Stripe x PayPal, Codex Micro, Saagar Enjeti Joins | George Kailas, Mukund Jha, Russ Tedrake, Glenn Youngkin

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Today is Wednesday, July 15th, 2026. We are live from the TVPN UltraDome, the temple of technology, the fortress of finance, the capital of capital. Let me tell you about Ramp.com. Time is money. Save both. Easy to use corporate cards, bill pay, accounting, and a whole lot more all in one place. Big news in the fintech world, not related to Ramp actually, but Stripe, another Founders Fund project. It's Founders Fund day. Stripe is offered to buy PayPal. PayPal. This was rumored and on the timeline on and off over the past year as PayPal has been a little beat up. We can pull up the 5-year chart. It's down over 80% since the pandemic highs. If you go back further, the 2020 to 2021 era for PayPal was like sort of an anomaly because of the big shift to e-commerce during the pandemic boom. But things have not been looking good for the last 5 years. And so just a couple— was it a couple of months ago? Shiel Monat posted in February of 2026, he posted a little, a little question for the timeline. He said, so who's buying PayPal? He says it has the opportunity of being one of the great distressed value opportunities in fintech history. It's down 85% at the time, still generating $5.5 billion in free cash flow. This is a $50 billion company. We'll go through the PayPal, the Stripe offer, which is at $53 $50 billion, but, you know, you're getting a 10% free cash flow yield. I'm unaffected.

Sorry, I'm still— I'm still working through these. These two, uh, sound—

we got new ones. But if you think about it, it's like you have a $50 billion company printing $5.5 billion in free cash flow. You can use a lot to finance debt, obviously, which is what's proposed here. $400 million consumer accounts. So lots of consumers have PayPal accounts, have Venmo accounts. Maybe they're not fully active, but they're ready to be engaged. It's a huge footprint and huge distribution mechanism. And they have bank info attached. That's difficult. You can't get that from many other consumer applications. That's sort of the white whale of consumer— how deep can you go in the KYC flow in the consumer bank relationship? You really know these customers, which is valuable for a potential buyer like Stripe in this case. Checkout buttons are on millions of merchant sites, although that has been slowing. And that's part of the reason why a change of ownership might make sense at this point. And they also have this peer-to-peer brand with Venmo, which was bought by Brian Johnson, Braintree, and then sold to PayPal. Old lore. So Sheehan, the first company he calls out is Stripe. He says they have a lot of desirable assets for Stripe, a consumer-facing checkout, bank account details for hundreds of millions of consumers that you could integrate into Stripe's checkout flow. And they have a consumer brand. Venmo. Apple would also be a potential buyer, says Scheele. Good complement to Apple Pay for e-commerce penetration. They never got social payments going. Could get Apple back in buy now, pay later. Remember PayPal bought— did they buy Afterpay? No, that was Block bought Afterpay. Does PayPal have a buy now, pay later?

No, they were just building this out themselves.

They built that up themselves.

Okay.

Not very well.

Got it.

So Scheele says Those are the two logical options from a business value creation perspective. But he identifies a problem. He says in both cases, Apple and Stripe, the culture fit makes them a non-starter.

I take it back. They actually did buy a BNPL platform.

Which one?

That I've never heard of called Paydee.

Okay, okay.

In 2021 for $2.7 billion.

Okay, so they, so they do have an asset there that they are hopefully trying to grow.

But prior to that, they had already built their own.

Got it. So Shield calls out that culture fit might be a problem with PayPal integrating into Stripe. PayPal is a, quote, sprawling legacy fintech with 25,000 employees. That's a huge company. Decades of technical debt. Neither Stripe nor Apple would want to absorb that. Although technical debt, you can clean it up. Coding agents, not too bad these days. Maybe less of a problem. Apple also might face big tech antitrust with this type of thing. That's a good callout. And yeah, you do have to wonder Stripe, incredible on the product side, on the innovation side, on the, on the just building a fantastic, massive $159 billion as of last tender offer business. But are they the, are they the team to be the, the ruthless cost cutters if that's what it takes to turn PayPal around? That might be a different challenge culturally. Same thing for Apple. They don't— they're not this private equity firm that goes in and buys legacy assets and turns them around. So a little bit of an of a culture shift that I think Sheila is correct to call out. He also I identifies Visa and MasterCard as potential buyers. So they could both afford it. And they've been creeping into merchant acquiring and checkout. Also, we talked about that the, the big banks are now taking a shot across the bow of Visa and MasterCard with their own card network. So there's potential that Visa and MasterCard might want to expand into a different territory, although that's not what's playing out right now. But who knows what other bidders will come out of the woodwork now that Stripe has made this offer to buy PayPal for $53 billion. So PayPal's checkout button placement is enormously valuable real estate for either Visa Visa or MasterCard. The networks have been trying to move beyond interchange into direct merchant relationships, and PayPal could accelerate that by years. I think they may be burned out on antitrust. Either network acquiring the largest independent online checkout provider would and should face brutal regulatory scrutiny, says Scheele. He goes on, he says, what about Elon? Elon co-founded PayPal and always wanted it to be called X. So there's some poetry in it coming back under his fold as X. Of course, he is a Stripe shareholder, I believe. I think he was an angel investor. One of his very rare angel investments was Stripe. So crazy., you know, he might be getting a slice of PayPal with this. Not too bad. His bandwidth and spread— his bandwidth is spread impossibly thin across Tesla, SpaceX, X, AI. This is pre-merger X politics and replying concerning to posts at 3 a.m. Never been a problem for Elon, but he said, but you could have made the case he was spread too thin before he started to acquire the last several companies too. Technical debt at PayPal is a big challenge that he knows. I would never count him out. I just don't see it, though.. And then he says, in his opinion, Scheele says JPMorgan makes the most sense. They've spent heavily on payments and acquisition, and an acquisition could get them closer to building a consumer super app alongside Chase. $50 billion would be a huge acquisition even for them, but they could stomach it assuming they could get regulatory approval. Venmo gives them a P2P brand that they've never been able to build, especially among younger consumers. PayPal's branded checkout button sits on millions of merchant sites. Remember, didn't JPMorgan— is it JPMorgan that bought that company? That Charlie Javice founded and then she went to jail or was accused of crimes because— and that pitch for her company was consumer-facing, consumer-facing.

They had a relationship with alleged— yeah, I guess they think they've been convicted.

Yeah, they positioned it as having a lot of relationships with younger consumers, college students. And so I think the deal came in like north of $100 million and then it was later alleged or discovered that those accounts were maybe generated programmatically. I think this was the pre-AI era. Now it's even easier if you need to generate a bunch of fake data. But don't do that because it's fraud.

Yeah, the question is like Stripe makes so much sense because if— yeah, to be able to pull off an acquisition like this, to be able to get the level of debt needed to do this, you need to have so much confidence that they're going to actually be able to— I'm assuming they'll end up reducing headcount pretty dramatically. I'm assuming Stripe looks at this and says, hey, I don't think we need 25,000 people running this business. So who has the— who has the operational strength and know-how to make PayPal run? If you could make PayPal even run half as well as Stripe, that's probably worth double what it's currently worth. So yeah, if you're, if you're a lender here, I don't, I don't see— or, or a partner— I don't see that you can find a better partner than, than Stripe on a deal like this. Yeah. Period.

Let me take you through the lenders first. I'm going to tell you about Console. Console builds agents that automate 70% of IT, HR, and finance support, giving employees instant resolution to access requests and password resets. So Stripe is a fun option. I agree with this. It's funny, this Thiel-backed fintech company buying a Thiel-founded company. Full circle. The first offer is already facing some pushback. Michael Burry, I believe, is a shareholder, and he posted on his Substack about why he's not selling at this current price. He thinks that PayPal can get back to their previous share price from a year ago. But the basic structure of the deal is as follows: $53 billion for all of PayPal. $60.50 per share offered, 28% premium over yesterday's closing price. But it's a steep discount to last year's valuation. $50 billion has been committed in bank financing. And the FT is reporting that PayPal has been reluctant to engage with the offer thus far. Stripe is much bigger than PayPal at this point. Also interesting, this offer was apparently sent over to PayPal weeks ago, maybe a full month ago based on the reporting, and it didn't leak. So whoever's working on this team, good job, kept it Yeah, they're taking it public.

They're taking it public. Enrique Flores, the CEO over at PayPal, just got the gig. He had been over at HP. And you can't imagine that he's, you know, took the job wanting to just basically be acquired in a short period of time.

Exactly.

He wants to— I would imagine he wants to get credit for a proper turnaround here. And so I think they're going public with this now, in part to try to put pressure.

Well, speaking of public, let me tell you about Public.com investing for those who take it seriously. Stocks, options, bonds, crypto, treasuries and more with great customer service. So Stripe is partnering with private equity firm Advent International for the deal. They have a lot of dealmaking experience in fintech specifically, and I think they're going to go 50/50 on the equity portion. But then there's a whole bunch of bank financing coming in and they will point in their offer to the fact that branded PayPal checkouts are slowing. There's fierce competition from Apple Pay, Shop Pay, Klarna. These are reasons to sell. PayPal will likely fire back saying, hey, we just brought in a fresh CEO. We have a restructuring plan in place. We're executing against that. Once that happens, once we're successful, we will get back to the 70s for our share price, which we traded at just a year ago. So yeah, maybe we're not going to go back to the pandemic highs anytime soon, but this offer is just too low for right now. But we will see. Overall, I mean, Stripe has done an excellent job expanding into many adjacent markets. Atlas is a great example and they've never cracked consumer, but also they've never really tried, in my opinion. And so I think it'd be really awesome to watch this play out, see what they do with it. But it does seem like it'll take a few more rounds of negotiation before anything fully materializes.

Yeah.

Anyway, let me tell you about Cisco. Critical infrastructure for the AI era unlocks seamless, real-time, new experience, seamless, real-time time experiences a new value with Cisco. So there is news out of OpenAI. The first consumer hardware device will reportedly be an AI companion speaker. According to Bloomberg, the device will be screenless and movable, designed to serve as a new kind of home computer for the AI era. And I believe Tyler has a mockup of what we think it would look like. I think I sent it to you. Did that make it into the timeline? Let's pull that up when we have a second. It will be able to answer questions, control smart home devices, play music, and tap into GPT's capabilities, but the bigger goal is for it to become increasingly personalized over time. OpenAI envisions it as an AI companion that gets to know its owner, understands their habits, and can even draw on personal information like email to provide more useful assistance.

And we have the image here.

Oh yes. Let's pull up what I think it probably looks like based on this description that it's screenless, movable, and designed to serve as a new kind of home computer for the air. That's what I'm hoping for, sort of a Function One concert-level speakers that have wheels and can be wheeled around. It's movable. Smart speaker.

It weighs— it actually weighs 1 ton.

Yes. Yes.

Because it's on-board battery system.

Yes.

They want it to be mobile. They don't want you to worry about plugging it in.

Exactly. Exactly. Imagine just wheeling this around and just pumping out Tiësto at concert-level volumes throughout your home.

Inside any room in your home.

Any room in your home. Ideally, those wheels would be motorized. It could follow you around and deafen you in any room. Sort of Bryan Johnson's worst nightmare. Not so common. Callback, Brian Johnson. But unlike today's smart speakers, the device is designed to feel more lifelike.

And yes, that is a bit.

This is a joke.

This is a joke. But we have not been intentionally not been read in on anything in device land because we want to figure out what's happening in real time.

Play this game with you guys. But if you've been using Codex and you are running Codex on or just the new ChatGPT app, which is fully Codexified, if you've been running Having it on your computer, it's pretty remarkable when you're on your phone and you remote into your computer and you can have it go and just open your actual email. And if you're logged into a news— a news site, it will just use your actual login to go and open the website in your Chrome browser, which is logged in, and get you whatever information you need. So, having the full control, I think that people are just with the ChatGPT app on iOS integrating to Codex or ChatGPT app on Mac. People like, we're now crossing the chasm of like the OpenClaw experience for people that weren't ready to set up the OpenClaw whole like agentic workflows and do all of this stuff, jump through all the hoops there. These are just apps that you can install. You never really get hit with a terminal window whatsoever. So like the next wave of consumers are adopting effectively these, I don't even know, they're agents, but it's more like computer use plus agents plus desktop integration that makes it ultimately more usable. So unlike today's smart speakers, the device is designed to feel more lifelike according to Bloomberg, and it will include mechanical elements that move on their own along with a camera and other sensors to understand its surroundings. Powered by GPT Live, OpenAI's new real-time voice mode. It should be able to hold more natural conversations and recognize when you enter a room. You'll also be able to take it around the house thanks to its rechargeable battery. Jonny Ive is helping design the product. Bloomberg says OpenAI's hardware team is developing roughly 5 AI devices, with the speaker expected to be the first, targeting an unveiling this year ahead of a planned 2027 release. We have another example of what we think they should do in the device battle. The new smart device that I want from OpenAI is, of course, the— you've heard Greg Brockman say this— taste is a new core skill, right?

Yep.

So what can computers— what are they uniquely bad at doing?

Taste.

Creating tastes for you, right? There's no real smell-o-vision yet. There's no computer device. There's no smart device that actually puts puts a taste in your mouth to signal what's going on with your AI agent. So I put together Melt, my pitch for the next AI device from OpenAI, a custom-fit oral wearable that turns AI agent status into flavor.

So you can feel a ChatGPT Codex run without watching the terminal.

Yes. So you don't need to look at a screen. This is perfect if you're trying to cut back on your screen time. You don't need to hear anything. You can just listen to the beautiful surroundings of wherever you are, and yet you're still tapped in. You know whether your build is failing or not because you pair with Codex, it maps the signals, and it ships by taste. So when your agent is done, a clean sour pulse tells you that it's time to review the work.

If something breaks— But like a good—

Yeah, sort of like a Sour Patch Kids.

It's nice.

It's a little sweet, but it's sour. You know, it lets you know, hey, it's time to go check on what's happening, review some code, make sure everything's shipping as you hope it is. If something breaks, you get a flash of heat, it gets spicy in your mouth. This pulls your attention, you gotta lock in. So you have some spicy flavor in your mouth. If your API balance hits zero, you get this bitter taste. It's not good. You gotta go refill this flask.

The bitter note makes the problem impossible to ignore.

Yes, but if everything is green, everything is shipping appropriately, everything's good to go, you get a sweet pop in your mouth that rewards the win. And it's also a Pavlovian feedback loop, 'cause you're just on the hunt for the next burst of flavor. And it can also look like an iced-out grill, which might be nice.

Uh, more seriously, we were, uh, over here at TVPN HQ, any idea that we have immediately gets turned into a website now.

Yes.

Um, we have, uh, the laptop detailing company of San Francisco.

Yes.

Uh, and— And this is a business that we actually think should be built.

Yes.

John was cleaning his laptop last week, and whatever product you had ordered off of Amazon—

I didn't order it. Team ordered it. It's a normal screen wipe, but I didn't realize that you're supposed to use gloves when you use these screen wipes. And it gave me a chemical burn all over my hands. Be very careful.

My whole—

I just wanted to clean—

—on my fingers. —screen.

Peeling off.

It's been terrible.

My laptop is— So we think that there is a— There's a real business. —silly but real business opportunity to make a laptop computer, you know, like a computer detailing service, like a car detailing service. Yes. For laptops. You sign up a bunch of companies, startups in San Francisco, you know, early-stage companies, enterprise, et cetera. You give them a monthly plan to keep all of their employees' laptops clean and polished. And yeah, this was one shot, and I think it gets the job done. No excuses. Yes, you should get out there and do it. I think that the only thing I disagree with on the site is the pricing. The pricing? How much? I think $29.99.

Well, you know why this is so subsidized? Because the screen cleaners are looking for trade secrets and then trading off of them. But of course, if you're doing this, you need to have the no insider trading guarantee, which is featured here. To be extremely clear, our detailers will not photograph, memorize, transcribe, trade upon, tiff off a roommate, or otherwise profit from anything visible on your screen. 100% information is not used. Right? That's a great— You got to let them know.

That's a great offer.

Yes. We clean screens. We do not read them. It's almost like he doth protest too much. Even if your screen contains an unreleased earnings report, even if the font is very large, even if the ticker symbol is impossible to miss, our detailers will not be trading on your inside information.

I think these have to be on-site visits. Yeah.

Yep. Okay. What's another big problem in the world? Big problem is that everyone knows the phrase, "You can't put the toothpaste back in the tube." Well, what if you could? What if you could? What if toothpaste came in a luxurious jar? The company's called Paradox Toothpaste Out of the Tube. It's a refillable frosted glass jar that turns the most ordinary part of your morning into a ritual worth displaying. Do you think this would sell? Paradox? Most toothpaste is designed to be hidden. Paradox is designed to be seen and used with intention twice a day. Scoop one precise Pearl. No crusty cap, no guesswork, no wasted squeeze. Brush your teeth. Then you—

what do you do with the spoon though? You're— you just dip it back in the toothpaste.

Luxurious toothpaste.

It's over for this idea. This is a bad idea. It's funny though.

It solves the problem. You can't put toothpaste back in the tube.

Everyone's been clamoring.

Everyone's been clamoring for this, to put the toothpaste back in the tube. Now you can. Uh, the last one. First off, let me tell you about CrowdStrike. Your business is AI, their business is securing it. CrowdStrike secures AI and stops breaches. Uh, Tyler made one. He has a pitch for, uh, for Keydra.

Yeah, this was another idea I had for an OpenAI device. So basically it's a water bottle with the keyboard wrapped around it. Okay. So if we can pull this up here, um, you can see like, you know, a lot of times you're typing and then you go to grab water, you're thirsty, you want to keep typing. Yeah. And this also is especially pressing now because of everyone's using Whisper, right? You got to talk and you can't talk while you're drinking water, right?

So why not just put a microphone on here instead of a keyboard? No, no, that's the whole point.

When you're In the act of drinking water, you can't.

Oh, so you got to switch to typing.

So you have to start typing. That's right. It's almost like a flute.

Yeah, that makes a lot of sense. But I think— I think this could be pretty promising. I actually think that when you showed me this image, I think just aesthetically, it's a cool-looking bottle even if the keyboard isn't functional whatsoever. I think people would just rock this type of bottle because they like the aesthetics of a keyboard. Sort of like that NVIDIA purse. You've seen the GPU purse that's It's clear plastic and then inside is an A100 or some sort of NVIDIA GPU and it just sort of shows you the circuit board and the circuit board is the art, is the design of the purse. I thought it was pretty cool. I would pick one of these up if you manufactured one. What do you think?

Absolutely not. Absolutely not?

Well, whatever you're designing, use Figma. Agents, meet the canvas. Your AI agents can now create and modify your Figma files with with design system context. Uh, okay, the next great car.

We have another new car alert. New car. This one, the car is called Chip. Chip Motors.

Let's play this.

It is, it is funny. It is funny. Yo, I want to see their— you know, a year ago you could have been sitting there thinking, why has no one made a cute EV car for getting around your town or your neighborhood? Yeah, why is no one—

and now there's like 7 companies.

There's a bunch of companies Apparently a lot of people had the same idea. Okay, um, Jameson from the CEO of Chip Motors says the next great American car is a robot. It talks, parks itself, more customized than your coffee. Meet Chip. You can reserve today. Let's play this video.

I want to see it.

Yes, Saturday's here! I'm Chip, by the way.

Let's get moving. Hey Chip!

Hey, my crew's here.

Ready to roll!

Oh, he's got crazy FOMO. That's right. Bye Chip!

Go get him, guys! Have fun!

Love you too! And I'm talking to myself. Um, hi! Go park, Chip. You got it, boss. I like the LED screen on the front. I've seen demos of that in Chinese cars. Chip, I forgot the snacks again.

Can you run to the market? On it.

Drives itself? This is bold. This is going to take some regulatory approval.

Yeah, yeah. Okay, so I love the vision. Yeah. And I think as just the base model in its current design will sell units, right?

I mean, there's like— to channel Doug DeMuro, he'd say it's no, there's no way it's going to wind up shipping at $15K. There's going to be a bunch of upgrades. It's going to be difficult. But yes, like at $15K with these features, like 100%.

But yes, even at, even at, even at somewhere in the range of, you know, $20K to $30K, I think these things sell because I know what these sort of like higher-end neighborhood golf carts go for. They're already all in that range. So, yes, I agree. It's probably—

but at this point, you said like, yes, I will buy this, this neighborhood golf cart, to like 7 different golf carts, and you're like $400K in the hole on golf carts, and you could have just got a Luce and chopped the top.

Chop the top on the Luce. You gotta chop the top. It's not a bad idea. Um, no, I like this. So, so it's cool. I think the, the talk— it's interesting because the talking to your car element, uh, is not a selling point to me. The screens, et cetera. To me, those aren't value-add things.

What is the selling point then?

Just a— Just the aesthetic? Functional. A functional neighborhood car.

That is the selling point right now. So you like the lack of doors, 6 seats?

Yeah, golf carts are mid, right? They're fun to drive, but there had been a lack of innovation in the space. And so just a better golf cart is a good product, right? But yeah, I don't, yeah, my question is like the parking itself, going on trips by itself, these kind of things, especially in those settings, I'd be curious if they actually launch with those features at all, or these are things that they're kind of building towards. Because imagine you're— the example I think they used was like a kid's soccer practice. Can you imagine like parking for a kid's soccer practice or a soccer game and being like, yeah, robot that I just bought, like, go park yourself? Like, that just sounds like the sketchiest situation.

This customizer is so cool. You can, you can get livery of like an American flag from the factory. I mean, this is all like very—

you're sold. Detail. —anyways, I think it's taking a different direction than Ambul. Ambul is betting that you're going to want something that has less technology, right? More simplicity. They're going very tech-forward, everything from autonomous driving to screens and AI in the device. Different bets, different customer bases. I think they can both work. We're in touch now with the Chip team. So we'll look to get them on the show at some point soon. And hopefully they can just drive this thing right behind the horse and get on the set.

I'm excited. I mean, I do really, really hope that the time to market for startup, these weird, like sort of niche vehicles and these new EV makers shortens because is we had this moment where it was impossible to start a new car company. Then Elon built Tesla into what it is, the number one selling car in, I think, the US and in China, well, the Model Y. So huge success. And then there were a number of follow-ons that were like Nikola and a few others that either ended very poorly or went bankrupt or didn't really get to breakthrough. Took, you know, years and years and years and billions of dollars in capital to ship something, and they didn't— weren't really able to find their footing in the, in the market. Because at the time when, for example, like Lucid— Lucid, you know, eventually launched a premium EV SUV, or a premium— they eventually launched SUV but a sedan. And by that time, like, the Taycan was out and a few other— and Mercedes had the EQS. And so there were a lot of other, uh, major brands that had been to deliver on a similar promise on a similar timeline, whereas Tesla's advantage was that they were able to be the first EV and they had like a monopoly on EVs for like a decade. Basically, it was the only viable one. It was like that or like the Nissan Leaf. And now there's more competition, but they're established. I'm interested to see, can this come to market in, in a 2-year timeframe or 3 years or something as opposed to— I would be really, I'd be really disappointed. And that might be regulatory failure. That might just be the supply chain. There might be a variety of different things, but based on the speed with which we see China shipping all sorts of vehicles that crab walk and spin around and do jump and all these crazy features, I would certainly hope that startups are able to bring cars like this to the market much faster.

They have a frunk that pulls up and just gives you an HD TV screen. Really cool. And anyway, so this is cool. We'll work on getting the founder on— I can see you getting this to watch movies, maybe when you're out and about. If it's self-driving, I should be able to watch it. Before our next guest comes in, let me tell you about MongoDB.

Please do. What's the only thing faster than the AI market? Your business on MongoDB. Don't just build AI, own the data platform that powers it.

And then while we wait for our next guest, Sagar, your friend of the show, I want to head over to the big board. Yes. Check out—

So what do we have going on here, Jordi Hays?

This is Sagar Bet. Okay. Sagar Bet 9000.

Yes.

The Sager bet $9,000. Yes. The market never sleeps. Okay. And on Sager Bet, you can track UFOs. Yes. Track mention markets. So this thing Sager might say—

so it's sort of like an entire casino built around Sager and Jetty. Yeah. If you just want to bet on anything he's doing, this is the product for you in your pocket.

Yeah. Wherever you are in the world, there's even topic slots. Oh, you can bet. Is he going to talk about Trump? How— this is huge. Uh, Joe Rogan. Marijuana and AI. Okay. The Fed, America and housing.

Well, let's bring in Sagar and Jordi and get the, get the, get the betting starting. Let's bring him in. How are you? How are you doing?

I can't even breathe.

I can't breathe.

Props to your team for creating that.

The website is live. It's all play money. And there's a disclosure at the bottom. We can send you the link and you can have some fun on SagerBet.

We're just going to leave this up the whole time while you monologue.

And every single chart is active and live.

I am not even going to be able to make it through this.

It's so hard. Thank you.

Thank you for having me.

Thank you for this gift on this day.

Thank you. True, true, true nightmare fuel for Sager and Jetty. But I wanted, I wanted to talk about how Zach Should we talk about prediction markets first? Should we, should we debate the level of where the data should be used? Is that a good place to start? Because we were, we were chatting about here.

You guys want— yeah, go ahead. I mean, I know you're— well, so, so I request coming into this was I don't want any Calci ads.

Okay. Yeah. No, no, no.

Soccer bet is okay. Okay. No. So pure play money. So there was news, I guess, in the last 24 hours that I think Calci is exploring being able to trade on potential airport delays. Oh, which is interesting. And that was interesting for—

we're going to get crazy stories where people like intentionally delay the flight to win a bet, right?

Is that what you're saying? That's kind of— that's kind of my concern because—

because what's happened already, already, whether I'm sure you said—

well, no, I'm saying with the hairdryer, right? It's exactly.

Yeah. The hairdryer, I believe they're also— no, this is Polymarket. This is not Kalshi, which is offering odds on the Odyssey box office, which this is off of a viral tweet. So I could be totally wrong, which I believe they said is in violation of a specific element of U.S.

law. So interesting.

You know, that's kind of where things are here.

So offering commodity markets on box office, I was actually addicted to fantasy movie.

Any of my soccer bets hit? Yeah, just feel free to scream.

And Jordi, now I'll mail you the check. No, no, I was. I was fully hooked on fantasy movie premieres with a group of friends. So it's like fantasy football, but every week you have to build a theoretical theater and you can pick like, I want The Odyssey and then I want Obsession. And you have a certain budget to allocate. And then based on the box office numbers, you can win or lose. And some people go really deep. There's no money on the line. It was just for fun. With friends, and it made me really engaged in what was going on in Hollywood, and I was tracking every movie. And some people build whole Excel models for it, and they go crazy with it. But of course, it's now financialized. Yeah, but I don't—

I can imagine the argument for why being able to trade your flight being delayed. I can imagine the argument. It's very inconvenient, right? You're going on this vacation. Why not hedge? Hedge it. But at the same time, I don't— I can't imagine how it doesn't end in disaster where you have these sort of global— you have global markets. You could have someone in another country call the local police. Oh, yeah. Spotting and say like, hey, you know, I'm planning blah, blah, blah. It would just be so easy to create a delay. Not to mention all the airport employees that are working these like really, really hard jobs, you know, making probably something close to minimum wage and will just be having the, you know, sogger bet in their pocket saying— But yeah, let's see John steelman this one.

I got to steelman this. All right, let's see. Let's see. The steelman is, I don't have good information on Even if I don't want to trade, even if I don't want to participate at all financially, I like the idea of being able to pull up a website that will give me the odds that my flight is delayed and I can make just a rational decision on when I get to the airport. You know, I'm getting there 5 minutes before, but I could get there 10 minutes after the plane's supposed to leave if there's an expected delay.

And why do you need Kalshi for this exactly? Do you not have— John wants—

John wants the largest—

I feel like the United— that's a lie to me.. I feel like it's going to say, oh yeah, it's totally on time. And then I get there and it's going to delay.

Whereas all of this data is public. Like, are you a frequent flyer? Do you not just go on the airport website and look at the departures and the actual time? Like, people have been doing this for a while.

Does this guy look like a frequent flyer to you? I'm not a frequent flyer.

But, but I mean, this gets to the, this gets to the sports betting thing too. Like, I personally, I personally like to just know who's expected to win the World Cup. Right. And I don't have a problem with that information being pulled into other sources. Google ChatGPT. I like just seeing like a yes or no. I've previously looked up like casino betting lines and it's hard for me to instantly, you know, interpret like, oh, it's +4.5. I'm like, I don't know what that means. Just tell me like, what are the odds that the Reds are going to win?

Everything is just in percentages. Yeah, yeah, yeah. That is smart. Someone in the chat says, what if the— Dan says, what What if the pilots and crews got a certain number of shares on? No, incentivize. Incentivize on time. They're like, Captain, Captain, I don't think we could. I don't think we should take off. Like, you know, the engine looks like, you know, it's having a little bit of trouble.

Is probably just already creating incentivized bonus systems that are already tracked within the airline network. Yeah, you know, it's like you don't need Calcio or Polymarket to do any of this stuff. You think American Airlines doesn't track all of that and create like incentive-based In the future, you won't even buy a ticket.

You'll just buy— you'll just buy yes on a contract that someone will fly me from Los Angeles to San Francisco. Exactly. So, or no. Yeah. And then someone will buy the yes, fly me there, and then they will collect whatever I deposit.

All right, let's zoom back though, because the information point is important. And, and you're not wrong, that's actually— that's a genuine utility that I think a lot of casual people have come— I always come back back to the systems themselves. So when you talk about sports betting, sure, it's nice necessarily for a casual person like us, but what is that being propped up on? And also, what is it incentivizing? So first of all, your assumption is that the sports line— yeah, what is indicative of a market. Now, that's not even necessarily true, especially whenever it comes to a sports bet. The line is built in order to hedge what the casino needs, plus or minus, in terms of the money. For how they're going to break even and/or profit whenever it comes to that. So remember, it's not the true market for what it is, and the line moves all the time based around the amount of money coming in. Whales can distort the line. So let's just remember that whenever it comes to that. The secondary thing is, again, like, I don't think that you need KALSI, Polymarket, FanDuel, or DraftKings to have a general idea of who you think is going to win, especially when all of this is based case not just on metrics but on public opinion on record. Like, for a casual football fan, I could understand the case that you're making. But my main point is that, you know, potential benefit does not in any way justify, you know, the immense harm that gambling is doing to the vast majority of Americans. So I get it, you know, whenever it comes to the informational purposes. But sorry, it's just not worth it. Yeah.

So I could in theory go to an app of my choice and say, hey, ignore the betting markets. I want to know who's going to win the World Cup. Go around and just read everything written by every analyst and do your own research and then just come back to me with the summary and put it in a percentage odds for me because that's what I want to know. Is it dramatic that France is up right now? And that adds to my experience of watching, even if I have no money on down the line. I want to see— I want to know if it's a comeback. Interesting.

You're saying AI features— I've watched sports for a long time. So you're advocating to leverage advanced artificial intelligence.

You're saying we need way more data centers.

Oh, I would not say that. The president said that today. Did you see it?

I sent it to you. Okay.

Oh yeah, I sent it. I texted it to you before I came on. I was like, guys, this is bait for our show. So can Can you let me, can you let me read it to you?

Please. Please. Yeah. Take us through it.

And feel free to do an impression if you want.

Oh, Trump. He said Trump. He just hit on Sagerbeck. We predicted it. Are you going to share your screen?

I wouldn't dare bring any of that to you. Okay. Let's see here. Sorry.

We can have, we can have the team pull it up too. I just shared it with them too so they can pull it up and you can—

Sorry, Jess. Sorry. No worries. The data centers aren't working very well.

We need more. We need more.

Yeah. Yeah. There's plenty in my state. Don't worry.

Well, Politics and Poll Tracker said President Trump comes out as pro-data center and says New York Governor Kathy Hochul terminated data centers for, quote, political reasons. The quote from Trump in this tweet is, one of the biggest driving forces in the future of job— for jobs are data centers. They are big, strong, bold, and money machines capitalized for the state in which they are built. And is there anything else from that post that you think is worth digging into?

Well, I thought that the most interesting part of the post is not just his defense of data centers, but is the China piece there at the very end. And that was— that's kind of been the more interesting part of the debate that I was curious what you guys thought, because I don't know if you saw that Kevin O'Leary, you know, went on Fox News and he accused the opponents of his data center project in Utah of being paid by China. Fox News actually had to issue a retraction whenever it came to that claim. And, you know, I've talked a lot here about the populist kind of energy around the anti-data center movement and just generally, like, I think this is very obvious that Trump and a lot of the Silicon Valley guys are in his ear with their messaging. They seem to think that this China angle is going to influence, you know, this vast, totally general feeling across the nation of being like, well, hold on a second. You know, there's just enough viral stories around noise about land use, about, you know, just being really unhappy or like having it shoved down their face. Actually, you know, I was originally gonna come here to talk about housing. It's very relevant whenever it comes to housing, 'cause it gets down to locality and state and local control. Some of that's bad, some of that isn't. But, uh, you know, the data center movement is probably like one of the last gasps really of like popular nimbyism. And what I mean by that is, is it's like a popular, you know, most people at this point have turned against nimby in terms of the general populace. I think most people would agree we need need more housing. It gets super complicated when we get down to the local level, but this is one of those last bastions where a large percentage of the public seems really to be against where the president is here on the issue. They don't believe the stuff about the tax revenue. A lot of it comes down to, prove it to me. There have been promises. There's a case here actually in Virginia where I live, Data Center Capital, uh, of America, where, you know, the data center claimed that they were going to be hooked up to the grid, but then they couldn't for some complicated reason. Their generator whine is creating like insane decibels around a neighborhood. People there are literally losing it, stapling plexiglass to their windows so that it's not loud. Yeah, I've heard a lot of— created a whole crisis here.

Upgrade the energy infrastructure to run more powerful racks. And so the data center that originally got approved might have been at a very reasonable level, but then it gets louder over time, and that's what a lot of people don't like. On the China issue, I think there's a few things. First is that I think I agree with you that you can just walk out anywhere into the world and ask a random person on the street, what do you think of data centers? And they're going to say, I don't like them. And so this is not some like astroturf nonsense. Like it's very clear that there is a populist movement against data centers. That's very obvious. I believe the polling data on— and then also on the question of like, will— like we can't lose the race to China or we need to build them here instead of China. Resonate with Americans. Like, I think average Americans like Temu, they like Shein, they like cheap stuff from China. It's not like people abstractly understand that jobs are important, but they also just are fine with like, yeah, not in my backyard.

Like, put it over there. Well, yeah, I think another way to put it is I would say ask most everyday people and they would rather lose the AI race to China than lose their own job. Sure. Exactly. Thank you.

You guys are just taking my words out of my mouth, man. That's exactly the point I was going to make. They're like, lose the race for what? For me to be unemployed? Yeah. Uh, you know what is interesting, John, did you see the journal article? And I'm not even—

I'm not even saying that— I'm not— I'm not saying that's like the correct view. Yeah, right, right. But, uh, to be clear, but, uh, but I can see exactly why they would totally believe that.

Yeah, I do think— well, I sent you that journal article a few weeks back where all these tech CEOs, Sam Altman and others, all of a sudden they're no longer talking about jobs. Like Dario and Sam and all, they were like, well, we actually really misspoke joke in terms of the way that we were talking a year ago. Yeah, you've talked about this too, Jordi, about the, the way that this was used as a fundraising mechanism, whether or not any of that is true. So much of that has now been imbibed by the general public that it is like a rock-solid belief. And so I don't know, I look at the Trump order on the data center, the data center, the Trump Truth post on the data center.

You just assume that since it was on Truth Social, it also was an executive order.

Right. Yeah. I mean, this was an interesting court case. I had to correct myself because I remember years ago I covered this as a journalist where Trump said, I am declassifying all documents. And The New York Times used that in court. They're like, well, Trump said it. And the DOJ had to say, well, actually, a tweet does not equal an executive order. So it is not an official presidential announcement, but it is a political judgment nonetheless. The China language, whenever it comes to attacking his home state of New York with data centers. It's very obvious to me that somebody like kind of got into his ear here on the issue. And I think it is very compelling. This Trump knows for certain is that the data center CapEx spend by a lot of these AI companies is literally propping up the entire United States stock market, which they desperately need at a time right now of sky-high oil prices. We're renewing the war with Iran, the oil crisis and all that stuff that's happening. So it is a very interesting marriage. This is one of those marriages where you could see at the beginning with the inauguration of the tech CEOs that flanked Trump, you know, during his swearing-in ceremony. But I would not have imagined how much, because I knew how much they needed him. What I didn't realize is how much he would need them to save them on tariffs and on oil. Like, if anything, the marriage, like the relationship dynamic has really changed, I think, for Trump with AI recently. And it's something they were there for antitrust reasons. So one thing to jump in on is— I agree, totally agree.

And now it's different. And Tyler and our team just pulled this post up, but he was saying they stopped saying AI was going to take jobs because AI has been creating more jobs. So that is one factor, right? So we know that, like, one thing's for sure, we know a lot of big public company CEOs will do a layoff and then say like, we did this because of AI. And we know that they're lying. Fine. And then we know that there's a bunch of like new company formation. Yeah, there's a bunch of new big infrastructure projects happening that are— that is because of AI that is creating jobs. So we're like, we know there's a lot of like lying about AI job loss, but there's a lot of truth around AI job creation. And so to Sam Altman's credit, he did say like a few days ago, so far at least, I'm pretty sure AI has been net job creating. This was not what I expected, although I was much less pessimistic than others. I thought this level of capability, we'd have seen some impact it is possible this direction keeps going. So that's like the optimistic—

yeah, there's a lot of these, there's a lot of these sound bites that go out and then either like the reality doesn't match the prediction because the prediction is like 10% chance of a 10% unemployment rate and, and, and you just hit the 90% and it's like, oh, like, and then it's like, wait, you lied. And it's like, ah, you were sort of doing this weird prediction that was odd. Uh, and then also some of the some of the major quotes that go viral, the one that I always keep coming back to is that Sam Altman in 2015 said like, AI will lead to the end of the world. Yes. But in the meantime, great companies will get created. So the next sentence in that clip is, and I'm starting a company so that it doesn't go poorly. Like, and that always— which was OpenAI, which is OpenAI. And so, so there are these things where, where where some of the CEOs will say like, there's a problem and we're identifying it early to work on it. And then when it doesn't happen, people are like, you were, you know, Chicken Little. And it's like, no, I was like Chicken Little, but I also like reinforced the sky along the way. But to some of the job displacement things, like it is this constant battle of like, is it coming in the future? It's not really showing up yet, but it's a little bit, but here, and there's so many other things going on in the economy that it's very hard to track.

But I just think it comes down to control. And this is why I always talk about the data centers. I always talk about this here on the show. People feel so out of control in their lives. And, you know, Jordi, whenever you say like they're lying, it doesn't really matter to the person who lost their job.

I know it doesn't matter. That's right. Yeah, that's, that's again, to my earlier point, I can— they're just sort of trusting the person that employed them and the things that they're putting out. Out online as, as a justification for the layoffs. Yeah. Yeah.

And, and then it gets to the data center issue. It's like, wow, we feel like this is just getting plopped down here to do what? So that it could fire me. So I know somebody, my, you know, sister, my cousin or whatever got fired from this job and now they just wanna build even more of it. And is this stuff really making me happy? Is it making me thriving? Like, that's kind of the interesting point. I think you guys were doing a segment around cars, uh, before. Yeah. I always think about this with technology. Um, you know, I've had two wow moments probably with tech. In the last like 20 years. Both were hard tech. First was the iPhone, the iPhone 4. Hard tech saga. Thank you. The iPhone 4, right? Which is, I will never forget holding that and just being like, oh my God, like this is it. The second was Tesla. It was full self-driving. It was, those are the two like holy shit moments that I've had. And I think, you know, look, the Tesla backlash.

Do you have a, be honest, do you have a bumper sticker on your Tesla that says I bought this for the autopilot, not because I support Elon Musk?

You know, I'm neutral.

I support autopilot. I do not support Elon Musk.

A lot of my neighbors in Northern Virginia have it. Don't worry. I miss out. I do think it's a little different with the Cybertruck. Those people definitely have to put that one on their bumper sticker around here. But yeah, I mean, those are what I just think about here with the AI is that even to this moment, look, making my job more useful on Excel and all that. Cool. Maybe, you know, for some of the spreadsheet jockeys and stuff. But I still think AI is missing that type of product of moment. I know OpenAI wants to come out with the new speaker, the design product. It's kind of interesting. I was looking at it a little bit earlier, but that is part of why with the data centers, with the job loss and the feeling of out of control, especially in the current like modern economy. And John, you know, you've and I've been talking a lot here about housing. I just can't imagine living in San Francisco. Where the median price is $1.7 million and, or, and having been around there for a long time or even in the general area and be like, what am I getting out of this? Like, it really just feels like so much downward pressure on your ability to— and you just have to claw your way out. It's like these larger—

I do, I do think that I do think in areas that are not someplace like West Texas that are extremely remote, that have massive amounts of energy that are already super pro-business and any areas that aren't like that, I do think the solution is effectively direct payments to local residents because I just don't— I like— people don't believe that, oh, my, you know, my town is going to have more tax revenue, so that's going to benefit me because they're probably already upset with how the town is allocating dollars. Right. And I don't believe like a one-time purchase of like a new school bus or a fire truck is like enough. Right. It needs to be like, okay, this thing moved into my area and I'm getting a $500 a month, a very tangible benefit. And so, yeah, I do think— proposing that— I do think there's going to be a lot of these projects that get to a point where they're at kind of a standstill and the developers are going to have to say, hey, like, here's what we're actually going to do. And in a lot of these towns where there's like not that many people and a data center can generate billions of dollars of value, I think that that's like a fair trade. That's an interesting idea.

I definitely think it would help because it just solves the tangible question of like, what am I getting out of this, you know? I mean, currently I, I do read some fun stories about like random boomers who live in, you know, areas— I was just reading one today, yeah, in like Pennsylvania where these like 20 people netted like $580 million selling land. A lot of farmers, they sell it. Yeah, right. Underperforming.

I'm fascinated by the this fact that you didn't— that you don't call out like the passing of the Turing test as an iPhone moment, as a Tesla Full Self-Driving moment. What's it done for me? It's just fascinating to be able to talk to a computer and have it talk back. Yes, it's just interesting. But I do think that you're getting at something, which is that instantiation in the physical world is much more tangible, memorable. You were like, I don't remember where I was the first time I used ChatGPT. GPT, even though I was impressed by what's it done for me.

Wow. It's like, it's like you already forget that you were crying laughing. We gave you a belly laugh. That's it. All right. Yeah, we built that with one Codex prompt. Literally one Codex prompt gave you a belly laugh, right? Well, how many belly laughs I can count on? I can probably count on— I can probably count on like two hands how many belly laughs I have a year. Right. And we just gave you one., and that wouldn't have been possible without Universal Basic Belly Laugh.

That's true.

Look, all of the, all of the, uh, endorphins that you gave me were great, guys, but you didn't drive me 12 hours, and that's pretty sweet. You know, I just did a 12-hour, uh, road trip. I barely, you know, had to touch the wheel. That's, that is a big fucking deal whenever it comes to, you know, your own life. Same. I mean, I, again, I just come back to the iPhone, like iPhone 4. I will literally never forget it. I don't think most people will either. It's part or genuinely why it changed the world. So I do think that there's just, there needs to be that manifestation, like you said, John, in the physical world. What is this doing for me? Jordi Hays, your point about paying people, I actually think is a very good idea, at least because it just shows people like tangibly what I'm getting out of this. It also would make it so that it can prove that it's actually going to make money because that's one of the other worries I think for some of the localities is promised tax revenue is not actual tax revenue. In the moment. It's like the stadium thing, right? Mm-hmm. You're like, wait, I have to shell out X, Y, and Z and give up all this local control. And then it's eventually gonna come to me in the future, even though there's reams of data, let's say on stadiums and others, that doesn't necessarily work out. So you, you gotta put it in the context of these bigger projects in a lot of these localities where people have constantly said, hey, let's do this semi-undesirable thing for you and eventually it will work out. I've talked to you guys about the Amazon experience. That we had here in Northern Virginia, right? Yeah. They're like, we're going to build it. It's going to be amazing, dude. The realtors and all that went crazy. They're like, oh, don't worry, your house is going to be near HQ2. And then HQ2 was like, yeah, no, it's not happening. And we were like, oh, okay. You know, it's like, that's a very scarring experience, I think, for a lot of people.

Yeah. On housing, I want to do a quick tier list of ideas to solve the housing crisis. You can rank them. Tell me how they resonate with you. First would be national permitting reform, fast approvals, much quicker at the national level.

Depends what you mean by that. So they kind of just did national permitting reform at the— with the housing bill. It just became law like 2 days ago. I don't know if you saw that, but that is very— I mean, you can actually go and you could plug it into an AI if you want to and you can even ask, hey, how much is this going to impact national housing? It's like, well, not really, right? Because all it does is it potentially sends more funds to localities which speed up housing, but not enough to actually make a meaningful difference. For what you're talking about, John, you would need a national permitting reform which effectively allows— okay, let me explain it this way. You know police departments where the feds suspect that they're racist, they can come in and just take it over? Yeah. This is value neutral. I'm saying it exists, a consent decree. Yeah. That's basically what you would need. You would need like X amount units were not approved— the Department of Housing and Urban Development or whatever can come in, look at your books and be like, yeah, this is not happening because zoning reform at the local level is the single biggest impediment to actually building more housing. And then this is where the trust issue comes for me. You have to make it so that it's actually housing people want. Like one of my biggest beefs with Yimbis is a lot of them are childless and they just want to live like in a downtown area for $1,800 a month. And I'm like, yeah, you know, if you have kids, that's not really what you want, right? I've talked to you about Levittown. One of my favorite books of all time, it's the Oxford History of the United States. It's called Great Expectations. It's about 1945 to the 1970s. Man, you got to study the suburbanization of America and the ingenuity for building these Levittowns, these suburban, highly packed together single-family residences, 1,500, 2,000 square feet. You have sidewalks. They became family hubs, like, for being able to walk different places. No garage in some cases. We have carports. Like, it was cheap and it was not like McMansion living. That would literally be impossible today, even if you wanted to build it. And, you know, what the testament to that is, those original Levittowns now go for, like, like $700,000. Wow. Like, they are not at starter home levels, and you couldn't even buy it because a lot of the way that the localities in the places, even though they were built, the lots and other things are zoned so that you couldn't even build a house that small today.

So I saw that it's actually so difficult around where I live. There's a— there's some very lovely trailer parks, right? Uh, and I was like, this seem— in, and I was like, oh, why aren't we building more trailer parks? And so I just, I went to, you know, my favorite AI chat app and I started having a conversation and very quickly figured out that like trying to create a new trailer park anywhere, like close to anywhere you'd actually wanna live is just like so incredibly hard. It's impossible. And it does feel like that is the way that you get like a 2-bedroom, 2-bathroom, for, you know, how do you make a 2-bedroom, 2-bathroom that, that, you know, where like the actual up cost to create the unit is like $100,000, and then, you know, you need— you have like some, some small fee that you're paying every month, you know, for amenities or whatever it is. And it just like— that to me feels like, you know, I've seen some of these communities where they're like incredible, they're safe, like families love them. Uh, again, there's trade-offs. You don't have the massive garage and, you know, all the square footage, but like totally livable for a young family. And I know plenty of families that could basically buy any house they want in LA, and they spend like half the year living in, you know, a, a trailer park, right? Just because it's like very enjoyable. So I do think that that's the solution, and I would hope that there's some way way to, you know, 100x the approval rate of even new communities like that. Exactly. Just to get people into a space so they feel like—

yeah, you're talking about the lowest of the low level, like in terms of entry point. I'm not against that at all. I want to build this stuff everywhere, not just trailer parks. Like, I want to build these Levittown-style houses. But this is the market dynamic, John. Oh, I do have to go in a few minutes, if that's okay. Uh, but John, one thing that I do want to emphasize is this is where the Fed's guaranteeing some of the fees and other things that the developers have to pay is really important. This is what I learned from that book, is that we were heavily subsidizing a lot of those initial fees, which drive up a lot of the cost, the approval, and it creates the market incentive for the developer. Right now, a lot of the developers, when they do build these new housing units, they need to make profit. So that means they're gonna build within the existing zoning structure, and for the customer, usually a boomer or other, a very, very rich person, person who can afford to buy at a high and a premium level, which means that the so-called starter home is now part of this very limited amount of housing stock. And that's what prices it. You know, here in Northern Virginia, those 1960s ranchers, which are— I mean, they're not big, 2,500 square feet, something like that. They are going for $1 million in a good school district. $1 million, right? So $1 million for a 1960s, barely renovated rancher. This is the story, I think, across the entire nation.

So the permitting rates where they are, $400,000 of combined family income to afford it.

It's a bingo. Yeah, $400 grand income, or you need to have a VA loan or something like that. Otherwise you're cooked. It's not happening.

Anyway, we'll solve it on the next appearance. Thank you.

So here's an idea I want you to sit with. I want you to sit with before you leave. Sauger's Razor. Is the idea that any sort of positive impact of prediction markets can be delivered with powerful AI. Oh, right. Hockem's razor.

Yes. Sager's razor.

Okay, Sager's razor.

Seriously, thank you for the bet thing. It made me, I can't wait to show my wife.

Yeah, we'll send you the link.

It's so funny. It is so funny.

We'll send you the link. Yeah.

I appreciate the time. Hopefully you don't spend all.

Thanks guys. All night staying up playing it. It can be addictive. It can be addictive, these things. It is addictive. I wouldn't be surprised if you get sucked into it here in East Texas.

We'll see you later. Have a good one.

We'll talk to you soon. Let me tell you about Railway. Railway is the all-in-one intelligent cloud provider. Use your favorite agent to deploy web apps, servers, databases, and more while Railway automatically takes care of scaling, monitoring, and security.

Sager always gets the people going. In the chat. Always. But we, we really enjoy these conversations. And I think it's, I think it's super important to have conversations with people that are outside of our little beautiful technology bubble. Yes. Yes.

Well, we have our next guest joining in just a few minutes. There is, there are a few posts in the timeline that we can run through. A quick news hit. We talked about about Paramount yesterday and the potential that David Ellison would be taking Paramount outside of California as a response to Attorney General Rob Bonta potentially blocking the Warner Bros. Discovery and Paramount deal. Now Tennessee is courting Paramount and the studio is allegedly considering it, according to The Hollywood Reporter. Just wanted to give everyone a quick update.

In other news, Italy's oldest dairy TAP's new way to borrow against cheese. Huge. An Italian dairy just raised €10 million by securitizing wheels of aging cheese through an SPV. The cheese SPV is great. Private credit is reportedly circling the structure next.

I would love for a cheese bubble. Who knows? Maybe keep it in the fondue.

I want— I want some exposure.

Yeah, get in on it while you can. Well, our next guest is from Atheon Fund. George is in the waiting room. Let's bring in the founder and CEO. He's launching an AI-powered hedge fund.

George, how are you doing?

I'm great. Thanks for having me on.

Thanks for coming on. Please introduce yourself for everyone who's watching.

So I've been in investing for a long time. I started in value investing when I was 17. I actually taught myself accounting to get that that job. Well, I lost a little faith in, you know, the fundamentals, you know, things like price-to-earnings ratio as I kind of saw some holes appear. Got a lot more interested in AI and actually was able to parlay a novel mortgage algorithm that I put together actually in Excel at that time into an AI company. That was interesting for a while. But in 2019, I started a company called Prospero AI because I thought that data was going to be a lot more valuable than models in the long term and just, you know, technology overall. And, you know, we kind of had a couple approaches to that. One is we focused on compression. So basically complexity in the back end, simplicity in the front and the user interface. And then we were pressure testing those, you know, signals, looking at edge cases with the public, which I think is one of the best ways to do that, especially because not a lot of hedge funds ones get to have that kind of testing. As we evolve that, we also saw some very interesting data. And this is part of our thesis where the more trust we have from the public, the more, you know, follow-on and kind of a self-fulfilling prophecy gets created. And a lot of that was the thought behind what we started with Aethon recently. And we're basically taking these signal libraries from Prospero. We're expanding into like my R&D backlog that, you know, a startup wasn't able to dip into as much. And then we essentially feed it into, you know, some of the world's best LLMs. We create thousands of strategies with that. And then from those strategies, we figure out intelligent ways to, you know, combine them to work in many different markets, to opportunistically allocate amongst them. That's what Athan is. We have a lot of excitement behind, like, the risk risk and reward combination that that creates and obviously have a big launch for a fund.

So, so fund is already closed. You're deploying it already. Like, where are you at in the process?

So we have an agreement with the, you know, the fund of funds that we're dealing with. We have, you know, some traditional LP capital as well. We expect to actually launch in August August, September at the latest.

What, what data sources are being unlocked this year that were previously either too expensive, too manual? You know, we've heard everyone tells a story of like the hedge fund that's looking at Walmart parking lots with satellites to determine if they're going to beat earnings. But what are the interesting sources of data that you're seeing pop up around the industry these days?

Oh, I mean, I think a lot of that's exhausted. Like I've been talking about real-time credit card swipes, camera data, satellite images, you know, for a long time. I mean, I think some of the interesting ones that I'm starting to hear are coming from like the medical field. I think a lot more people are starting to use interesting datasets there. But I think most of the interesting things going on are in this, you know, signal compression. Like one of the smartest guys I know on Wall Street is starting a firm that is focused on like data containerization. And I think that's a really good way to look at basically all of these alternative datasets, mostly established, giving people kind of intelligent access to them. That's kind of minimizing their training costs while also getting a broad exploration of the data.

What does data containerization mean exactly?

I believe it's the, you know, it's like a new term that, you know, his Carbon Arc is the firm that, you know, I've heard from them, but I happen to think they're very sharp. I've been on a panel with Kirk who runs it, you know, essentially taking, you know, the same concept as, you know, dividing up compute, but basically packaging datasets in these smaller components, not like accessing a huge credit database, accessing it in only the ways that are relevant to the, you know, that current training iteration, for example. Cool.

Where do you want the fund to go? Where do you want the firm to go? Do you imagine adopting multiple strategies, going into other asset classes? How do you see this growing over the next decade?

Certainly, I think we want to go into a lot more asset classes as we grow. You know, the way we kind of look at this is, you know, we will test strategies within our existing signal library. Then we expand our signal libraries and some of that will be chasing down, you know, different asset classes, different arbitrage opportunities, you know, even similar asset classes in different countries. Then we kind of feed that into, you know, the broader system and do kind of the data compression thing that we're really good at and then say, hey, we might start mixing and matching a lot of these different strategies in kind of these larger waterfalls and then And then, you know, amongst these different waterfalls, combinations of, you know, strategy, opportunistic strategy allocations, we might then say, hey, divide the capital we have between 10 of them, 20 of them, and just become more and more distributed.

That makes a ton of sense. Well, thank you so much for coming on the show and breaking it down.

Yeah, good to meet you.

Rest of your week and we'll talk to you soon. Good luck. Have a good one. Thank you for having me on. Cheers. Let me tell you about Codex. Codex is a powerful workspace for getting work done with AI agents, whether you're writing Analyzing data, creating content, or automating business workflows, Codex helps you move projects forward from start to finish. And our next guest is with us from Emergent with a huge, huge Series C. Let's bring in Mukund. How are you doing? Welcome to the show.

Hi, John. Hi, Jordi. I'm doing great.

How are you? Congratulations. Give us a quick introduction, reintroduction to the company and tell us the news.

Yeah, I'm so excited to be here. So Emergent is an AI platform that allows non-technical business owners build and deploy production-grade applications, and we are increasingly becoming an operating system for small and medium businesses to become more AI native. We just recently announced a $130 million Series C round at $1.5 billion valuation.

Congratulations. Fantastic. There's, right now, I mean, it feels like obviously there's a ton of knowledge retrieval that's happening and with AI in enterprises and businesses. There's also agentic workflows that once they are established, they are running in, they're doing inference, but they're doing that 24/7, even while the workers are asleep. And then there's the different work, which is, helping you build new deterministic systems, whether that's vibe coding, agentic engineering, context engineering, all of that. What has been the bigger driver more recently? Has it been coming in, understanding a manual workflow for a company, building an AI-powered system that can do that on repeat forever, and then moving on to the next problem? Or has it just been enabling business users and engineers to constantly work with AI and build new systems iteratively?

Yeah. So for us, like most of our users are non-technical, almost 80% of our users are non-technical. And these are business operators, you know, who are running small and medium businesses across the globe. And, and we are a platform where they can come in and in national language describe what they want to build, both agents and applications. And we have, you know, people who are building custom CRMs, ERPs, inventory management tool. A lot of the business-critical tools that they're building right now is getting deployed, you know, on Emergent. And the power is that most of these people understand their business really well. They understand the domain, they understand the problems that they're trying to solve, but haven't had access to technology teams or dev shops, quality dev shops to sort of really build this software. And because we are able to bring the cost down dramatically for them, like they're able to experiment and, you know, really accelerate their business today. What's— where are you—

where are you finding customers. You're at over $100 million of ARR, 200,000 customers. Where are they all coming from?

Yes, we are actually fairly well distributed right now. One-third of our revenue comes from North America, one-third from Europe, one-third from Asia. And, you know, most of these users are essentially, you know, non-technical business owners right now. And there is a huge variety of, you know, breadth of users coming, you know, from, from people who are running hospitals to people who are running factories to, you know, people who are running travel agencies, all of them coming in, building their own sort of, you know, production-grade software.

Where's the sweet spot right now for AI adoption in your customer base? Because when I hear, you know, custom CRM system, I think small business that is sort of starting fresh, like TBPN, we have 10 employees and we have built a whole bunch of custom internal systems, but if we were a 1,000-person company or a 10,000-person company, it's a much different conversation, even as powerful as the tools are to rip out a Salesforce, and that's certainly not showing up with the lack of the SaaS-pocalypse that didn't really materialize in revenue declines for the SaaS companies. And so am I correct in thinking that like the smaller, more agile, smaller businesses are potentially more ready to adopt custom tooling that's built from agents like your own. Yeah, totally, totally.

I mean, the users that are coming to our platform are traditionally businesses that have been running on top of emails, WhatsApp, spreadsheets. Yeah. And now they're trying to digitize themselves. Many of them are actually entrepreneurs who, you know, understand their domain really well, have a new idea that they want to build. And essentially a lot of these A lot of these small businesses, I mean, I believe that they're gonna just skip the SaaS cycle and move to the AI cycle directly. And that's what we are seeing right now. A lot of these businesses have a lot of excitement and they understand their domain really well and they're able to relate with the problems that they're solving. And they come in on the platform, try to build something simple like a landing page first, and then they sort of go on to building more complex use cases on the platform.

Yeah, from your work in Asia, do you have any insight? We have always heard this stat that like 90% of Americans don't like AI. In China, it's reversed. 90% love AI. Do you have any insight into what the mood, the topics of conversation are in India or other parts of Asia outside of just the US-China dynamic?

Yeah, I think there's a lot of excitement in India across, you know, around the board for AI. And I think adoption is increasing at a very, very fast pace right now. And, you know, I think we recently had this AI summit also in India last year that brought a lot of excitement. And generally, I think, you know, like everybody is super excited about using these tools, you know, and we also have like a large developer base. So Codex, Cloud Code, all of those things are really popular. And, you know, people are finding new ways to use AI to sort of accelerate their businesses today.

Sure, sure. What about employment? There was— I remember listening to to sort of an AI doomer who was talking about the risk that AI would create mass unemployment internationally because some of the outsourced BPOs or call center work would be displaced immediately. I've been tracking those employment numbers and I haven't seen a massive fall-off, but do you have any insight into what's happening in the international labor markets?

I mean, right now I think, um, at least for a short period of time, like, I feel, and that's what we are seeing also, is that employment is going to go up because, you know, like, um, you know, especially like in, in domains like software and a bunch of those things, uh, where, you know, as software is becoming cheaper and cheaper to build, I think, you know, like, the demand and the need for software is actually accelerating. So we are seeing, um, you know, jobs actually increase. Um, but, but, you know, as we get closer and AI has become more powerful, you know, transmit change.

Yeah. What are you hearing from your customers on demand for closed-source frontier expensive tokens versus laggard models versus open-source models? Like, how quickly do you abstract all of that cost consideration? Or do you have opinionated users that say, I want to use a 5.6 SOL or a Fable because I heard something about that abstraction? Abstractly, but I want to use it within your harness and within your product.

Yeah, so typically we, we actually abstract those things out, and, and, you know, we have a model router which figures out depending on your request what is the best model to use. Uh, even during the execution, uh, we would switch to open source or, you know, some of the cheaper models, uh, if we, if you see the task is relatively cheap to do. And, uh, in fact, like, you know, as, you know, all the labs are pushing out on this test time compute, yeah, uh, the actual cost of building actually going up even though token price is doing the same. And oftentimes we see that there is a sweet spot of affordability and price and value that we are trying to keep. And increasingly we're seeing that now that frontier models are getting really, really good and open source systems are getting really good, this mixture approach is what is working really well for us.

Yeah, yeah, yeah. It's fascinating just being in this era where for the first time in my life, certainly, Technology has a marginal cost, and we're all talking like railroad barons now or manufacturing. It's just so different from the world of zero marginal cost.

Jordi Hays. Yeah, the other thing is just how many companies doing functionally the same thing can all be growing so quickly, right? Like, certainly you have a lot of competitors from— from Labs to Lovable, Replit, all these companies, and yet you're all—

they're all doing really well. They're fantastic businesses.

And it's cool to see.

Yeah, I think there's a huge amount of latent demand in the market right now, like as people really discover the power to build things. And eventually we think that product that is able to deliver, you know, final outcome to the users is eventually going to win. And I think that's where we are doing really good. Yeah, that's amazing.

Amazing. Well, congratulations. Great update. Congrats to the whole team. Coming back to the show. Thank you so much. Have a good one. Let me tell you about the New York Stock Exchange. Want to change the world? Raise capital at the New York Stock Exchange. We also have some amazing breaking news. The all-time record has been hit for a dinosaur sold at auction. Sotheby's just sold Gus the T-Rex for $50.1 million. Finally, Ferrari of dinosaurs.

Someone's doing the math. 183 bones going into this T-Rex, that's $273,000 per bone.

Interesting. But the sum is greater than its parts in this case.

This is truly an incredible example. I do wonder, imagine having this in the Ultra I feel like many—

yes, I agree. I feel like many dinosaur skeletons are often found with some bones missing, and so they have to recreate some of those. I wonder— this is probably an extremely complete example, but I wonder how many— how complete it actually is relative to what's possible, like the theoretical max.

In other news, last year just 20% of adults accounted for more than 80% of all books read. Mm, power law and everything. And this account says, wow, 20% accounted for 80%, an unprecedented and unique dynamic.

I mean, there are people that just churn through books. And I mean, if you count the number of books that you read to a small child, it's like 4 or 5 books a day, right? You're putting up like 5 books a day, right?

You're rivaling— More like 10, 15, 10, 5. Yeah, something like that.

Yeah, pretty good, pretty good. You add that up, you're probably— do they count parents reading children's books in this stat? Because that changes everything, because a parent will honestly read thousands of books. Cat in the Hat might get read 100, 200 times in a single year. That's gonna—

I'll read the same book every night. Yeah, for months, sometimes weeks.

Yes, I know, and we've all been there.

Anyway, moving on. Breaking news from Ergov. Thinking Machines just launched a new model and it's open weight. It's called Inkling. Interesting. Inkling reasons efficiently across text, image, and audio modalities. We are making the full weights available.

Fun. On Hugging Face, probably. Uh, well, we'll have to go check it out, see how it benchmarks, see how it reviews, see if it can do our benchmarks, our internal tests, see how it stacks up. But up next, we have Rush— Russ Tedrake, co-founder and CEO of Walden Robotics, joining us for the first time with an exciting launch. How are you doing, Russ? Welcome to the show. I'm well. How are you? We're great. You're great. Thank you so much for taking the time on a big day. Please introduce yourself a little bit, the company, and then we can go into the news. Awesome. Yeah.

So I'm Russ. I've been a professor at MIT for about 21 years. Wow. 10 years ago, Toyota started a lab right next to MIT and right next to Stanford. So I helped. I was the SVP of Robotics and then Large Behavior Models at TRI. And now I guess I do podcasts right after Gus the T-Rex, you know? So that's—

You made it. Tough act to follow. Tough act to follow.

So, OK, let me tell you about Walt Walden. So Walden just came out of stealth today. Super excited about it. We're deploying general purpose robots, you know, powered by physical AI. They are— we are super focused on manufacturing, super focused on deployments. I think the next great lessons for physical AI, they happen in the field. You know, we have to deploy these robots, figure out how to mesh them with the manufacturing processes that are already fantastic.

Okay. You're out of stealth now. So your competitors are going to be picking over your launch video and any podcast that you do trying to figure out how you're thinking differently. How do you think differently about these use cases versus maybe some of the other companies in the category so far?

There are a lot of robotics companies now, right? I mean, it's actually awesome.

It's probably exhausting for you guys, you know, but— We love anything but another CRM, maybe. Not to pick on the CRM founders, of which we love.

Okay, but there are a few things that are finite in the world. I think one of them actually is the number of big strategics that can really take this the distance. So one of the things that's just very different about us is that we've got a huge relationship with Toyota, and now we're building new relationships with— if you've seen the announcement, we have— we're working with Boeing, with Samsung, Prologis. We've got an incredible team of the kind of the best you could possibly ask for in terms of advancing manufacturing.

Yeah. So, and then why is a partnership like that so exciting in this category? So using the CRM example, if a founder came on and said, like, we're partnered with this big company, and you'd be like, okay, well, like, what's the most they could possibly spend on CRM? And it would be like, maybe it's like $5 million a year or $10 million a year. Oh, it's not that. But, but for you, I could imagine Toyota spending effectively like billions of dollars a year on robotics over time. Is that why starting?

It's not the capital. I mean, the capital is flowing. I mean, you have to be able to move capital to be successful, but that's, that's table stakes, I think. So robots are hard, right? It's going to take a long time. And you have to think about not just building the core technology. You have to think about manufacturing it at scale. You need to think about distribution, you know, marketing, insurance. How do you repair them, you know, in, in locations all over the world? So if you look across like all industries on what kind of a partner would you want for this, um, I think the automakers are in a really good shape, you know, for, uh, for putting out things of this complexity at scale, you know, having a dealership in every town. I think there's a lot of reasons to really like the automakers as a real leverage point on this.

Do you have an idea of the scale of robotics deployments currently in the auto industry? Obviously, you're very close to Toyota, but even 20 years ago, we all saw the robotic arm putting the windshield on the car, moving the heavy frames. So it's not like there's never there's been a robot in an auto plant. The question is just, what is the next step? I think there's some companies that are betting on going straight shot to humanoids. I think you're taking a more iterative approach, but what does the walk, crawl, run of building a car with a robot actually look like?

Okay, so it's really important to start by acknowledging that there are a ton of robots in factories already, right? So welding, painting, you know, there's places where big robots have been extremely successful for decades. We're also seeing cobots all over the place, AMRs all over the case, autonomous mobile robots all over the case. This is like really successful. But there are still a bunch of tasks that are fundamentally hard to automate. Sometimes impossible, sometimes just too expensive, right? They're kind of one-offs or we run one robot to do multiple tasks. There is a disruptive technology from physical AI And the fundamental question is like, how is this going to change the way we think about manufacturing? And it's not just, here's one job that we couldn't automate before. This is completely going to change the equation for how we think about production. It's going to make a data-enabled factory. It's going to change variability in manufacturing process in a way that could really change the fundamental production systems. So, we're trying to introduce this core technology of general-purpose robots. Yeah. And then I've heard you guys ask before about sort of the special purpose versus the general purpose. I do think there's another future of those robots specializing into more narrow applications and getting, you know, something that's really task-specific. Mm-hmm. But I think there's a time right now where the generalists will come in and do a lot of the tasks that have been hard to automate. We'll get the data, we'll bring this new capability, and then there'll be a second round of automation where you go in and the tasks that are worth special purpose, they're valuable enough for a special purpose robot, then you'll go in and you'll optimize and you'll make your special purpose robot for those tasks.

Well, the robot, the general purpose robot would hopefully make a special purpose robot.

That's of course right. Actually, robots are building robots. Yes?

Yeah, what was— I'm assuming over the last 20 years you had a million opportunities, a million VCs that said, "Hey, why don't you spin out and build a robotics company?" What made you maybe pass then and do it now?

Yeah, so I've been watching the capabilities mature. We were at Toyota Research, we were actually some of the core innovators on some of the algorithms that really kind of started this boom in physical AI. Watched them get better and better, but a lot of things had to align. So, I mean, certainly the capital started flowing The amount of talent coming into the space is flowing. I think the awareness from the customer's perspective of what is going to have to happen and just the readiness there. And I've watched a lot of people think about the different business models and sort of explore things. And I took the time to really think hard about that. And, you know, what is the business model that I really believe in that's going to make the unit economics work, that's going to make a durable business? And all of those things Things have aligned, including backing from Toyota and our other core strategics.

And this is the moment. Does the business model actually matter that much? Because we've talked to people who are saying, I'm going to build a robot and sell it. It's going to be very expensive. Others say we're going to, you know, finance it. It's going to be a subscription plan. We're going to sell the work. At the same time, yes, to a manufacturer who's buying a robot, a million-dollar purchase can be expensive, but they have access to debt lines. They can finance these things on their side. And so when you say business model, is this just financial innovation sliding around the payments plan, or is there more to it than that?

No, no, I think, I mean, the hardware cost is expensive. The AI training costs are expensive until you amortize it across a large fleet. So everything is kind of paid painful and expensive in the, in the, in the sort of small quantities. That's actually one of the reasons why we focused on manufacturing. I think you want to find tasks that are super high utilization, right? You want the robot to be running 3 shifts if you can, right? Yeah. Um, you want to all week long, right? You want to find places where there's a high value of the, of the work that's being done, and there's a really good match for that in manufacturing. And then as the economics play out, the unit economics become very favorable because you're training a model once and deploying it across a huge fleet and all the things sort of improve with scale. The BOM cost of the robot goes down. But how do you get there from here? Right? I think you have to be thoughtful to make a business that can actually make money.

Is the recent story of the, the most recent robotics boom driven more by non-deterministic software, generative AI unlocking the ability to do more with the physical designs that we have? Or is there also an acceleration in the power and efficiency and capability of motors and actuators and robotic arms and the actual hardware side of the business? Because it feels like the really unique thing that everyone's like drawn to every moment is the software side, the generative AI, the ability to deal with, never-before-seen scenarios, essentially.

Yeah, and it's everyday people or people, every person in the tech industry having like a magical moment with an AI model in the workplace and just thinking like, wow, this seems a lot more possible now to do something in the physical world.

I mean, there's no question that the AI was the unlock and it's not just like making an MCP entry point for your existing robot API. It's actually, we've dug down deep into the stack and use generative models to command robot low-level behaviors in ways that make them much more dexterous. That's no question that that is the big thing. But along the way, the hardware has gotten so much better. And it's not just pointing to one actuator. Of course, we've had improvements in actuators and batteries and all the others, but it's the entire supply chain. Like, the whole ecosystem has put us in a position where you could start a robotics company. We've got a robot that we've built You know, we started the company in January. We've got a brand new robot that was a twinkle in my hardware lead's eye in January. And now it's, you know, it's—

it seems like it's walking around behind you, rolling around behind you.

We have so many robots running around.

The frosted glass is a real tease, I got to say. You got to get clear glass next time, or at least electrochromatic so you can turn it off when you're on an interview. But it's exciting progress.

How much did you raise?

Tell us. Yeah, $300 million. That's the number we wanted. Yeah, that's right. Get it going for that.

Awesome.

And thank you for coming on the show and breaking it down for us. So great to meet you. Fantastic rest of your day. Congratulations on the launch. We'll talk to you soon. Goodbye. Let me tell you about Shopify. Shopify is the commerce platform that grows with your business and lets you sell in seconds online, in-store, on mobile, on social, on marketplaces. Places and now with AI agents. Our next guest is former Virginia Governor Glenn Youngkin, who is joining Red Cell Partners as partner and chairman. We're very honored to have him join us today. How are you doing, Glenn? Welcome to the show. I'm doing great, guys.

Thanks for having me. Love your show. And it's just a thrill to be here. I mean, to have a chance to talk about tech as opposed to politics.

I'm all in. I— it's very funny. I was reading your bio and I was like, I was like, okay, I gotta skip all this politics stuff, get to the Carlyle era. I want to talk about Carlyle. I want to talk about your, your journey. But first, just get us up to speed on what's happening today. Red Cell Partners, how you met Grant, the story there, what you're hoping to achieve.

Yeah, well, first of all, I've known Grant Verstandig for a while. Yeah. And just admired the work he's doing. Listen, he's built an awesome firm at Red Cell that is really trans— it's, it's really transforming the way venture capital works, where the actual founders are part of Red Cell and they bring scaling capital and operating support in order to incubate and then grow businesses internally. And then they help them find customers. And what's really neat is it's kind of a different kind of entrepreneur. I mean, their basic view is that there may be entrepreneurs that think about the best Yes, technology, but guess what? A case officer at the CIA has got a problem that he or she's trying to solve. She might actually, or he might be the right CEO, and let's bring the right technology to go solve that problem for him. Yeah. And that's the whole approach. And as a result, they have cranked out some awesome companies that are doing crazy neat things. Everything from Trace, which is the governance layer that sits on top of your AI platform that really manages your agents. You know, who comes in, who goes out. You get an audit of who's there. So in the healthcare world, in the national security world that are heavily regulated, it's the kind of capability that you need. They just closed a, uh, just under $110 million round for that business. It's growing like crazy. They've done some cool hardware which is really addressing data center power needs. Needs. Guess what? Data centers swallow a ton of power. And if you can find a way, both at the semiconductor level and at the operations level, to conserve power, you can absolutely do that. That's what Klarus does. Hunted Labs is really cool. It actually finds nefarious third parties and open architecture AI applications, and they find bad Russian guys who are making their way into stuff that they shouldn't have access to. But this is the kind of stuff that Red Cell's doing. And I have to say, you know, coming out of my most recent job as governor where we just grew the state like crazy and we're bringing businesses in to be able to partner with guys who have big ideas and big ambitions, it's really awesome.

That's great. Incredible. Is there a— how, how, how, how hard are the edges around the thesis of the fund? Because there's many funds that are very heavily thesis-driven. Some others are just like the right entrepreneur at the right time, might be going into a weird market, might be going into something that doesn't even seem like that big of a business. But years later, you find out that it's— that it becomes a monster. So how are you thinking about the balance between being thesis-driven, value-add, and just backing, you know, extraordinary entrepreneurs who maybe have a vision of the future that even you can't quite clearly see?

Yeah, well, one of my big learnings at 25 years at Carlyle is it's all about the leader. It's all about the visionary. And sometimes visionaries want to take you to a place that maybe not everybody understands. But listen, you're really happy you got on the train with them when they got there. And so there is a real balance here to make sure that you're not being being, you know, overly dogmatic about what you're going to back and what you're not. In fact, you know, Red Cell's got a particular, uh, investment right now that they're incubating that's really focused on the, on the elderly healthcare market. It's a place that really isn't attracting a lot of attention right now because folks are worried about it. But let me tell you, it's going to be a big hit because that's a giant market. And so oftentimes Oftentimes, you know, running where everybody else is going isn't really the place to be. And what I found during my 25 years at Carlyle, both as an incredibly active investor, but also when I had the great privilege of being co-CEO, is you got to back people. And that's what it's all about. It is, it is great talent. And when you find great talent, oftentimes the right thing to do is to let them run.

Can you actually take us back in time? I believe you joined Carlyle in 1995. What was the core thesis of the firm? How much infrastructure was there? I know you were, you know, incredibly involved in building Carlyle as a business as well as doing deals. But what was the first day on the job like? What were the first couple of years like? How was the firm evolving in the mid-'90s?

Well, you guys have started and grown businesses, and so, you know, I know that there's always the moment in time where you wish it was further along than it was. When I joined Carlyle, they had already had some real big successes. Sure. And David Rubenstein, Bill Conway, and Dan Daniello had already demonstrated that they were extraordinary investors and were building a great business. But it was still, you know, very much the entrepreneurial environment. And I'll never forget the first day I got there. First of all, I didn't have a phone. Phone. I didn't have a computer. And, and David Rubenstein went running by my office. I've been there for about an hour. And he said, don't worry, we're going to raise some money. It's going to be okay. And I sat there and I said, wait a minute, wait a minute, you didn't tell that to me when you were recruiting me. So, you know, this— that's the— that is the awesome part about these fast-growing, energy-filled environments, which are It's all about getting it done. And, and that pulls people in who want to go 24/7, who want to change the world, who want to do something that hadn't been done before. And it's the exact same energy that Red Cell has now. Yeah, I mean, literally, you sit in there in their big, big, big conference room and they bring a bunch of their CEOs in and investment professionals and, and a lot of their advisors. And it is, it is just racing. At breakneck speed to keep up with the ideas on how to grow. How can they bring a technological solution that's at one of their portfolio companies to aid another one, or a great technology that sits inside one of the portfolio companies that's not being really commercialized in the right way? Can you spin it out and actually, actually drive capital and opportunity? So that is so exciting to me. I have to say, when, when I was governor, I had to this awesome group of people around me who came to grow Virginia, and we had the same environment. All right, what can we do to actually put a rocket fuel on the back of this great opportunity? And, uh, and that's what I'm hoping we get a chance to do a lot more of at Red Cell.

Can you take me through, uh, the story of the Kinder Morgan transaction, what that was like, what that meant to you in your career at that moment, what it did for Carlyle?

Yeah, So for those of you who don't know, Kinder Morgan was at the time one of, if not the largest take private in business. It was enormous. And it was for me an opportunity to lead it for the Carlyle team, kind of a breakout opportunity as a professional. But the coolest thing about it was Rich Kinder, who was the chairman and CEO at the time and the majority shareholder, Kinder was just an extraordinary, I mean, leader to work with. I mean, I kept a notebook of just great management and leadership lessons from being able to sit at the table with Rich Kinder during that entire transaction about how do you serve customers, how do you grow talent, how do you think about expanding and opening up brand new markets where you might not have had a footprint, but there's a real opportunity And for me at that stage in my career, it was an absolutely transformative opportunity. By the way, it was a great deal too. All the investors did very, very well. And I look back on that and I will tell you that one of the great, great business builders of all time was Rich Kinder.

What did you learn from international expansion throughout your career at Carlyle?

Well, it was also, I think, I think one of the great opportunities for a young guy— when I was 33, I had a chance to go over and run our London office. Yeah. And, uh, and I had, uh, Middle East, uh, North Africa, Russia. Uh, I had some— a lot of coverage— really new territories that I'd never been to before. And, you know, at that stage of your career, um, you know, you've one got to make sure you have good mentors to talk to, to say, hey, wait a minute, you know, I'm getting ready I'm getting ready to go to Moscow for the first time, you know, what should I be aware of? Uh, all the way to, listen, we've got this investment opportunity and I'm not sure I've seen one like this before, where do I go in order to get input? But I have to say, one of the things that I loved about Carlyle, uh, for the every day of the 25 years I was there, which was David, Bill, and Dan believed in growth. Yeah. And they believed that they could take young young people and put them in search situations that they might not have been in before and stretch them. And I got to tell you, that's why I was there for 25 years. I loved every minute of it and every day was exciting. And international growth is one of those places where if you do it well, you can have tremendous success. But let me tell you, if you do it poorly, it can, it can really wipe out a great business.

Yeah. What was the focus or like the key unlock? Is it hiring driven? Is it bringing over the right people from the existing team, educating them, getting them up to speed, hiring from the local market? Like, take me a click deeper on that.

Well, the answer is all of the above. And you hit it right on the nose. So you first have to have people who are— I'm going to call it geographic experts. Sure. Subject matter experts. Yeah, yeah. How do we perform in a new geography, in a new culture, most likely in a place where English is not the primary language? And how do we do really well? Second of all, how do we bring what we do and make sure that we continue to do our business in a way that's consistent with our values so that it's Carlyle, or whatever company it is, in this new geography? And then finally, and I just think matching deeply experienced folks with young talent that wants to run is a great mix. And, you know, you look back, Carlyle expanded around the world. I will tell you, our business in Japan, which we were one of the very first movers into Japan, it was an incredibly tough market for a non-Japanese firm. And it became and has become one of one of the biggest markets around. And that was part of the key strategy of hire local, make sure that we have consistent values, but let people run and do what they can do best. And then also that translates into new areas. So, you know, we got into this area of secondaries, which is liquidity around LP interests. And let me tell you, back when we first when I got started and bought Alpinvest. Yeah. You know, that was not a business that people thought much of. And I think Alpinvest— and I just read about it in the newspaper today because I've been out of Carlyle for 6 years— but I think they raised $20 billion last year to provide liquidity into the private investment market. It's a huge part of allowing investors to expand their exposure and to bring more capital, which is why I'm excited about what Red Cell's doing. Yeah, they are bringing a new idea into venture capital and they are, they are raising money. I can't talk much about it because they're, they're in the market now. Um, but you know, they have a substantial capital capability to help companies grow, but they're also bringing trusted and brand name partners, venture partners of other funds in to help them be the next round of, of, you know, rock market fuel to help these companies grow.

Jordi? The chat wants to know about how you processed the Supreme deal. You were co-CEO, right, when Carlyle bought Supreme? I don't know if you were there when they eventually exited it, but at the time, you know, streetwear today is sort of established as like this, you know, massive, massive category.. But you guys were, you know, an early mover in it. I'm curious how you processed it. I don't— can't tell that you're wearing Supreme right now, but how did you process it originally?

I think— I actually think it's in a frame on my wall as one of the great deals ever that Carlyle did.

Wow. Well, and I imagine like a lot of your peers would have looked at you guys at that time being like, what are these guys doing?

Yeah, like, like stick to the energy infrastructure. Do another pipeline deal. Where's the next Kinder Morgan? And you're like, actually, Supreme.

Well, you know, Jordi, part of, part of an investment environment is getting creative. And there was a— we had a great team that was focused on consumers and consumer trends. And, you know, we invested in a lot of consumer product companies, really fashion at that time. And we're really kind of out out in front. Golden Goose was one of our great European deals. And then, of course, Supreme was such a, such a unique idea. And we had this extraordinary group of investors that came and said, we think this is a great idea. Here's how it's going to work. We had good partners in the deal with us, the founders. And before you know it, you know, it just really took off. And what you see over and over and over again is by By bringing capital and unlocking an opportunity, they're self-fulfilling, right? I mean, without the capital, it might not have grown as fast or as large because you couldn't have expanded and had inventory and all the things, although they had a really interesting inventory management system, just to go back to that deal. But the net of it is oftentimes when you can bring an investor and an entrepreneur and visionary together that actually they can actually see where they're both going, then you can take 1 plus 1 and turn it into 10. Yeah.

Please. Got to talk about data centers. So much in the news this week, obviously the New York State moratorium. What is Red Cell— how is Red Cell thinking about the category overall? You got to lead the data center capital of the world.

And we're seeing more and more startups incubations work up and down the supply chain, whether it's semiconductor design to data center construction. Like startup is used to mean you write software and now you can be shovels in the ground. And we see a lot of successful companies there. But how are you seeing the opportunity risk? Anything else on data centers?

Yeah, well, let's just begin with the aside from anything else, there's trillions of dollars that's going into data centers. Centers. Yeah. And I think this year it's going to be a $700 billion CapEx sector. And with that one, it's driving a big chunk of our economy today. I think out of the GDP contribution, the data center and tech investment world is the lion's share of it right now, driving so much of what we're doing. And so if you are thinking about big markets, it's hard to think that's not one of them, because of course it is. I think second of all, so much of the, of the opportunity, like what, what Red Cell has leaned into with Klaros, is how do you address the problems that are, that are really inhibiting data centers and the acceptance into the marketplace? And power consumption is right at the top of the list. Yeah. And so if you are are thinking about an opportunity to, to either re-engineer the, the semiconductor infrastructure, to re-engineer the power draw so that you can power the entire thing without power conversion and therefore the associated power loss— and Klarus does both of these things— then all of a sudden you can see 20, 25%, almost 30%, uh, efficiency gains and, and power utilization, that's a game changer. Yeah. And that's real value added. And so this big supply chain which has been built up in order to meet this massive industrial investment activity going on around the country, I think has tremendous opportunities just in that supply chain, not to mention all the opportunities around the technology itself. And that's why Red Cell, I think, has got got so many ways that they are playing around this, this, you know, that tectonic movement in investment where, you know, go— but going back to Trace, if you are the governance layer over top of your AI capabilities and that governance layer can manage the interactions between agents and information in a way that is restrictive when you need it to be, it's secure, it's it's reportable, it's auditable, then all of a sudden this is a bit of the holy grail about what people are worried about from a, from an information security standpoint, but also from a real dependability that what's being used to, to in fact drive a large language model is dependable and repeatable. And that's huge. And so we're seeing, we're seeing Trace have big applications in the healthcare sector like they're, like they have with Duke where they now are starting to drive a lot of the patient data at Duke because they can be compliant with all the healthcare regs. But on top of that, they're seeing big applications, of course, in national security. And that's why, I mean, that's why you see a guy like Grant Verstandig and he's got this really cool idea of what can be done with this governance layer And now you start seeing lots of markets you can get into. I think the next market for Trace is going to be in the fintech world and in the financial services world, because once again, it provides that governance layer which provides people with great certainty about security.

Where do you see Red Cell in 25 years? If I was naively pattern matching on your work at Carlyle, I would say There's going to be more strategies. This is a mega fund. I'm looking to what General Catalyst did, a private equity deal for a healthcare company. There's RIAs now that are trading public. So you're— there's growth fund, there's an incubator. Like, if there's someone you want around the table when you're adding strategies, new markets, it's probably you. But where do you see Red Cell going in 20 years? Is that naive, or is this, uh, is this possible?

I I would say from, from my standpoint, it's, it's premature for me to answer that question. This is, this is Grant's company. He founded it 6 years ago. It's been his vision. I totally buy into his vision. Sure. But I think there's this tremendous room to create great companies. Yeah. And, you know, I think at the heart of a great investment firm, a great venture capital firm or private equity firm, You're an investment firm. You're, you're, you're a visionary place where entrepreneurs can come and grow great companies that really do address mission-critical concerns for sectors and in this case for the country as well. Yeah. And I, and I think by being able to address both mission-critical issues for industries like healthcare and cyber and national security, not to mention financial financial services and fintech, but if you're— but you're also able to bring, uh, solutions that address the national issues, then I think we've got big markets, we've got big momentum, and that's going to define Red Cell. And that's why I'm so excited, because that's exactly what Grant's vision was. That's what he's building and has built time and time again. And I got to tell you, there are, there are, uh, so many talented folks in America today dreaming up and inventing just amazing things. And I got to tell you, Grant Verstandzing is one of them.

I love it.

Well, we want to hit the gong for you.

Hit the gong. Thank you so much for coming on the show. What a pleasure. Congratulations on joining Redstone Partners as a partner and chairman.

Look at that. I broke the mallet. We broke the mallet.

Very excited to have you on the show. Have a great rest of your day.

Have a great rest of your week. Soon.

And hopefully we can talk to you soon.

I, I hope we'll get a chance to do it again. Yeah, anytime. There's a big discussion topic that you guys are on recently, which is what do we do with, with workers that might be, um, uh, job displacement because of AI. And that's something I'd love to engage with you guys on in a future date.

Yeah, that'd be great. Thanks so much for coming on the show.

We'll talk to you soon. Congrats. Have a good one. Um, mallet broken.

You You broke the mallet. Look at this thing.

What a masterpiece. I mean, it basically came off.

Yeah, these mallets, we need to mill a mallet out of pure titanium or something. Maybe castings, and when we break a mallet, we can merely pour molten steel.

Next they're going to want us to warm up the mallet over a fire. That's our show, folks. Thank you so much for watching.

Tune in to TBPn tomorrow at 11 AM Pacific. We'll see you tomorrow.

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Please. And we'll see you tomorrow. We love you. Goodbye.