Interviewer (4:32)

I, you know, I was really confused by the, the Anthropic DAW incident, you know, about a month ago now. Why there was so much support for, for Anthropic on this. To me, it felt as obvious as like a bullet maker saying, hey, we're only going to sell you these bullets, but only if we can, you know, help influence how you use them, you know, separate from US Law. Now, I know I'm definitely simplifying it and we'll get, I'm sure we'll get some defenders to come on the show at some point. But. But to me, it kind of felt obvious that they, you know, we should sort of leave things. You know, private companies shouldn't be dictating, you know, foreign policy. I get their concerns about domestic surveillance, but we have, we have laws for that to protect us from that, from government overreach. And it doesn't seem like the, the realm of private companies to get into. What am I missing? There's no.

Martin Shkreli (5:22)

I don't think you ever say anything. I mean, I think that the idea that there would be some super governmental authority is a little scary. I used to, back in the hedge fund days when the markets were shaky around 2008, I would ask some hedge fund friends, would you rather buy bonds in Johnson and Johnson or bonds in the US Government? And it's a very interesting question because in some ways at the time it seemed like the US could default, the financial markets could collapse. Johnson Johnson's not going to collapse, you know, anywhere in the world where there's consumer healthcare, pharmaceutical and med tech. They did all three. Every part of healthcare, you know, every country in the world buys Johnson and Johnson dollar could go worthless. JJ will survive. United States of America would not, at least financially. Now, obviously, you know, the U.S. is very, you know, is extremely resilient. It's the greatest country on earth, et cetera. But at the time, there was a question as to whether bond yields would be better for a high quality corporate versus A, you know, a sovereign. And certainly if you look at some sovereigns like Brazil, you know, JJ bonds do yield less than Brazilian bonds. They're riskier, they're more default, more likely to default than JJ and part of that comes from this like, again, super governmental like JJ in a sense is its own country. You know, it has employees, it has a hundred couple hundred thousand people. It's got a lot of revenue. It's bigger than the country I come from called Albania, you know, so in a lot of ways, you know, anthropic in some ways is going to, is sort of going to be its own entity. And this is sort of a nation, sort of network state, kind of thinking corporate state in some ways. And you know, with all that revenue and all that power that comes from having a powerful piece of software, you know, I could see that sort of getting to somebody like Dario's head of thinking about, you know, oh my gosh, with great responsibility comes great power. And it's sort of like over, you know, obviously way overwrought. Whereas people I think at OpenAI and other companies, even, even, even Google are, are just sort of like, yeah, it's just software, man. You know, our job's to sell it. You know, it's not that big of a deal. Meanwhile, he's like, I am Spider Man. You know, I must be Batman. He wants me a superhero. And it's like, you know, obviously he's selling software really well, but I think the theatrics are kind of ridiculous.

Interviewer (7:31)

Yeah, let's get into other parts of the ecosystem. Are you still a huge Nvidia bull? I don't know if you saw the Jensen versus versus Darkesh, but what's your latest thinking on Nvidia?

Martin Shkreli (7:41)

So I'm starting sort of a hardware startup. So I was shorting these stocks, quantum computing stocks, and I had to learn computing. Quantum computing is really useful for one algorithm, Shora's algorithm. So unless you're a code breaker, and I don't know of any corporate code breakers, there aren't really too many avenues there. So I started thinking about frontier computing in general and I stumbled upon photonic computing and now I have a startup in this space. Interestingly, we're already a publicly traded company, but that's sort of your configuration kind of doesn't matter much. Rather public, private, or even not for profit. So I think photonic computing is really exciting. It's not going to challenge Nvidia anytime soon. But I think that what I've learned trying to program some AI a couple pivots ago, before we settled in on financial software, I learned that if you do the flame trace or the profetto of a really zoomed in like nanosecond level instructions, Basically all the GPU is doing is MATML's so called gem generalized MATMUL on the Nvidia hardware and light does MATMULs for free. So you have a MATMUL machine in light. God kind of made light to do matmuls whenever it diffracts. So you get the speed of light matmul. And if we did, if we had an optical computer, I Think it would have like a thousand x to a million x performance depending on whether it's speed or speed and energy included. And so like flops per watt or something like that. Flops for Joule. So I think there's like, I think eventually Moore's law, Jetsons already said it's dead. I think everyone's seen that. But I don't think processor speed is going to really improve at all. And I think just shoving more energy through the system know, making bigger systems, these are like the only things we can do. We need to do something I don't want. It has data centers in space. I don't want to have nuclear reactors in my backyard. And I think that, you know, it'd be a lot easier if we just made a freaking better computer. And I think that's, that's what's going to happen. So there's Neurofoss, they raised 150. There's a company called Flux Computing that renamed to olix, they raised 250. We're out there. There's a couple of little smaller guys too. And I think that one of us, hopefully all of us in some ways will, you know, and there's obviously unconventional, which has its, it's a little opaque, exactly what it's doing, but you know, very highly funded effort that raised a billion dollars I think and you know, I think it's time for a new computer and ultimately, you know, we're working on the hard parts of this. So it sounds great, but there's a bunch of catches and one of the catches is non linearity is very hard to do in optical computing. We think we figured out a way to do it. The other catch is there's no memory in optics. So we think we figured out a way to do that. So I think that we're going to see a lot of bankruptcies, we're going to see a lot of startups in this space. But I think it's sort of time for the end of silicon and the end of maybe not the end of silicon, maybe the end of transistors. And so there's $10 trillion whether you include all the other hardware coming out, the rest of the ecosystem, et cetera, maybe it's 5 to $10 trillion market cap up for grabs. And, and it's not an area where there's a lot of startups, which is like really shocking. Like the amount of agent startups is in the thousands and thousands. I can name all the, every single optical computing company on my hand. And compared to biological computing or Quantum or some of the other alternative computings. Those aren't really that exciting. So Photonic is, you know, many people I've Talked to at OpenAI or Meta and other places, they sort of all agree inevitably Photonic is going to be here. And I feel like, you know, whether it's five years, 10 years or even 20 years, it's still worth making that computer because you need to hand the baton off. I don't think Nvidia is going to stay asleep. But I also don't think that, you know, this is necessarily an easy thing to sort of embark on. You know, most of the time these, these bigger companies don't will resist kind of uprooting themselves.

Interviewer (11:31)

Yeah, well, first I just want to say you did this epically hilarious debate with somebody on Quantum that we'll link to. And you know, he was a bull and you got into the technology and he couldn't really. Yeah, he couldn't really defend himself there. Although I'm sure he's a, he's a nice guy, but very nice guy. Yeah, yeah. But it just goes, yeah, goes to show that, you know, this is very complex stuff.

Martin Shkreli (11:53)

And if Quantum sounds futuristic.

Interviewer (11:54)

Right.

Martin Shkreli (11:55)

It's a quantum that sounds really cool. Like. Well, you know, it's, it's, it's not that cool. If you, if you understand that computers basically be measured in sort of two ways. You have a, you have the thread, number of threads, number of operations at a time, kind of parallelization, which is why Nvidia is so cool. 16,000 threads versus your average computer's 16 threads. And then it's 1000x, literally 1000x more threads. And then you have clock speed and you have basically multiply the two and clock speeds in the gigahertz for both of those computers. So you have 1000x speed up with Nvidia if you can parallelize the instructions. Quantum. The fastest quantum computer I'm aware of is a megahertz, which is your calculator is faster than that. And it's literally 1,000 times slower than a normal computer. It's single threaded. And the only way the tortoise beats the hair is when you have an algorithmic advantage. And the algorithmic advantage exists in Shores, but it doesn't exist anywhere else. And what's interesting is you have these market caps. A quantum is about, in aggregate about 100 billion. And so obviously Naveen's company, my company, the other couple companies I mentioned, why don't we have a market cap of aggregate 100 billion? Why not? In fact because it's actually useful the world. Nobody wants to do energy factorization. Everyone wants to do MATMLs. Why don't we have a market cap of 500 billion? I think we will. And so that's kind of the pitch there. And I know your company is, I think, one of the major investors in this new thing in Naveen's company amongst many others, all star list of investors and I don't know what they're doing at all. But I understand that the race to make the next computer is on and some people are sort of half stepping it. There's some great companies doing ASICS which is fantastic. TPUs even are sort of half steps. You know, you're still on transistors and you're still limited by, you know, kind of the problems that come with, you know, scaling transistors, which are well known. And we'll eke out just a little bit more performance out of that. But I think to get a thousand X improvement you need to do something pretty, pretty different.

Interviewer (13:57)

Is there a particular milestone where you will know you're being successful or onto the right thing or how are you, you know, don't share anything confidential. But how are you thinking about it?

Martin Shkreli (14:09)

Yeah, I think you have to, you know, we talked about this internally because taping something out is sort of a, you know, to some extent it's a waste of time. Unlike electronics, you can actually set up these experiments in free space. So that's the nice thing about light is like a light lab, you know, an optics photonics lab is pretty easy to set up. I'd say that unless you get 1000x or at bare minimum 100x improvement, you know, it's not even worth taping out. Arrivals are using SRAM and some other, you know, analog electronics. I think you have to stay in all optics. Never the conversion kills you. If you go from electric to optical, back to electric, back to optical, I mean, you know, you might as well not make the chip in my opinion. But you know, folks want to try it anyway. They want to do their best GROK imitation and you know, Grok, you know, is obviously great, great success from an investor standpoint. And so I think you stay in optics. If you can make a whole LLM in optics, then you tape it out and you hopefully get the performance characteristics we're talking about. But actually what's interesting about it is your question kind of is revealing because what's not well known about this is that guys have been doing this in academics for many years now. So UT Austin showed A optical transformer guy at UCLA showed optical non linearity were very recently so, so work has been done on this that, that's pretty impressive. It's not like biological computing. We're still trying to get like the machine to add two numbers. I don't know how we're going to do it. The super neurons might magically start thinking optical computing is sort of here. It's just, you know, a matter of scaling it. Some of the other challenges I mentioned, so I think if you can get, you know, some of these tricks down, we're actually closer than, than, than we think. But I still think, you know, you got to be realistic. No matter how much of an optimism you need as an entrepreneur, you have to be a little bit realistic that you' you know, kill a video overnight and you're not even going to kill 5% of it. You know, it's, it's fine. Like look at Grok. You know, Grok took this like very small, ultra fast segment of the market. They didn't take it all. But you know, for people that really need like very low latency grox, it's a decent solution and that's a $20 billion win. And that's, there's nothing wrong with that. So I think, you know, you might carve a niche out that oh, optics is really good, say for video because video and optics kind of, you know, they're naturally the same thing. So maybe you do that or something like that. And, and I think that, you know, you'll sort of see it, you'll know when you see it. And I think that the key is, in my opinion is investor mismatch. So the problem, if you go to your investors and you say I'm going to have something 10x better than Nvidia next year, well, you better deliver that. And if you don't, if it comes out at like 5x or 3x, your investors will probably balk another round because you know, ultimately, you know, Nvidia is not staying still. And you know, your, your investors, your employees, everyone around you is just sort of going to feel despondent that you know, you're not getting anywhere. Google had the power to live through lots of crap with TPUs, right? Like they just didn't work, they didn't scale and finally they got the revenue right there. It took 15 years. So you need to make sure investors. I've talked to some people recently where I said I might need 20 years. You know, are you ready to sort of like live that through, you know, and for most People, the answer is no. And so we're focused almost exclusively in corporates instead of VCs because I think that corporates sort of get that, especially corporates that have been through it, they've been around for 40 years, they get that it's worth it to stick around and wait and look at Nvidia. If Nvidia had no revenue, this is a good thought experiment. Zero out all the revenue for Nvidia of gaming and look at the annual financials. What's the net present value of Nvidia back in 2020? It's actually the same as the deference value of it with or without gaming GPUs because ultimately it was worth the wait for that gigantic hockey stick. So if you knew 25 years ago, oh, in 20 years there's going to be a thing called AI and we're going to dominate the hardware for that. You still should have invested, you still should have made it no less of your biggest investment than as if they had the revenue and the GPUs. So I think that this idea of really long termism, I almost want to think about it like a lab. The same, you know, it's kind of the way OpenAI sort of thought about their business was. We're going to, we're going to monetize something in AI. We don't know what it is, but you know, eventually it'll hit us and we'll know this is a more directed effort. But I think that, you know, there's something powerful about some investors now being willing to wait 10 years or wait 20 years. And, and the fact there's some entrepreneurs out there like ssi, you know, they're willing to actually tell their investors, you know, you're going to have to be really, really patient with this one. You know, don't expect cursor here.

Interviewer (18:46)

Yeah, no, absolutely. The, to that end, you're super bullish on Nvidia. Is there any major, you know, mag seven or major tech incumbent or emerging incumbent that you're bearish on going forward?

Martin Shkreli (19:00)

Oh, good question. You know, it's so funny because like in pharma you have this dynamic as well where it's, it's sort of very hard to sort of lose your long term edge. You have to, because these, these, these businesses are so valuable that, you know, they have a hard time falling apart. I thought you could ask me the other question, which is, you know, a lot easier to answer, but you can answer that too. Yeah, I think Facebook's maddest, greatest thing ever. You know, I, I'm just such a big fan of Zach and, you know, this amazing thing, this distribution he has, it almost doesn't matter if he makes his AI himself. Like, all he has to do is like, you know, he could just literally take an open source model and it doesn't. You know, the problem with AI, I think, is that if you're open AI or anthropic pushing for more intelligence, like going from 150 IQ to 160 IQ, the kind of kids I went to high school with, you know, you know, does it make them more interesting? You don't sit down with those kids at that lunchroom anyway, you know, you, you, you mostly Instagram users and Facebook users, most of their questions are sort of normal, ish stuff. You know, nobody's asking the Facebook AI prove the remon hypothesis. You know, that's something that DeepMind and all these other guys want to do, but who actually needs that? I think that the average person doesn't need questions that complicated and it'd be cool to see it happen. But for Zuck, I mean, he's got the distribution and he's got the best product guys in the world, you know, hence the Snapchat battle that, that he sort of won and, and stole from. And I, and I think that he's going to continue to do that and win. So I don't know, I feel like, you know, it's so hard to like lose to the Mag 7. I do think we're going to get surprised. Like, if you look at the history of, of capitalism and big stocks, you wouldn't recognize most of the Dow 30 from 100 years ago. United Cigar, you know, you know, there's some companies you've never heard of and American can, no joke, you know, and, and it, we laugh at that now. But like, that's going to happen again, you know, all some of these companies, maybe half these companies are going to disappear. And you know, I certainly think Apple is like one of these things you raise your eyebrow at because, you know, but obviously it's hard to count them out, it's hard to bet against them. But Apple's one, if I had to pick one that I wouldn't like bet on, you know, I wouldn't say I'm ready to bet against it, but Apple seems like it's now old hat and there's nothing that special or charismatic about the company and their products. It used to be super cool and sleek and edgy. You know, that design, like in fashion, you have to stay fresh. You have to Stay pushing the envelope, you stay dangerous. And apple was dangerous 20 years ago. It was new nouveau. It's kind of, kind of whatever now. And I feel like, you know, that that's a monopoly that can start to fracture a little bit depending on how other players play. Google is another one where, you know, it seems like, you know, no matter what they do with Gemini, it just kind of sucks and people don't want to use it. You know, they have the distribution, but they don't have, they just sort of feel like a pocket protector. They feel like Yahoo in 2000. They feel like, you know, it's, it's not cool, it's not interesting. You know, people want to do other things. So we'll have to see, you know, if Google will, will fail or what will happen. Obviously. TPUs are an exciting business search, never going away in some ways. But you know, it feels like there's some changing of the guard and moments like this is when the Xeroxes become Xerox and you know, the, those types of things, those transitions start to happen before your eyes and you don't necessarily feel it or notice it right away, but they do happen. And, and I don't know what Mag7 is going to become a Lag7, but eventually you're going to get the Lag7.

Interviewer (22:29)

Yeah, you could, to your point on Meta, I mean you could tell they're a live player by them, you know, in the arena, you know, paying billions of dollars for Alexander Wang, for Daniel Gross, for, for Nat Friedman. Like, like Apple's not doing that, you know.

Martin Shkreli (22:42)

Exactly.

Interviewer (22:43)

They could attract, that they have the money to. They're almost sitting on a resource curse of, of the iPhone but, but not willing to buybacks.

Martin Shkreli (22:50)

Yeah, I mean, why do buybacks like, you know, I mean, I. If you can't. And if you can't pick the winner. And again, this may sound strange or stupid, but like if it were me, I can't pick the winner. I don't know what company to buy. You know, you can buy 5 or 10% of each of these. You could buy, you could, you know, give, you know, Sequoia 16Z here's, here's $100 billion. You know, go invest it for us. You know, but you know, doing buybacks is like historically it's the worst thing you could do. I mean it really is kind of this admit admission that you don't know what, you know, you kind of don't know what to do with the capital, you don't know where the future's heading. It's a financial engine. It's kind of stuff I do like. It's a very financial engineering kind of nerdy, you know, not that innovative thing. And it kind of like, you know, it's indicative of, of their business, I think, being sort of like they have released new products, they're just refreshes the same old products, you know, Air. All the new stuff they did has sort of been bad other than AirPods. So I feel like, you know, it's also going to be other, other companies, you know, Microsoft sort of also sitting on a perch that's not great. I mean, you know, they make OS software, don't need OS software anymore. You make office tools, you can vibe code, those, you know, et cetera, et cetera. It's kind of like, you know, that's sort of a dangerous perch. I don't think anything's going to happen Excel, but I feel like, you know, there is a fear that all of Max 7 could be, could be in trouble and that, you know, maybe it is hardware that rules the future.

Interviewer (24:08)

Yeah, we see, you know, anthropic OpenAI threatening startups or even very big companies on a, on a seemingly weekly basis. And you know, a lot Gill the, the legendary investor tweeted out the other day something like, if you're a company in AI, you know, if you're an AI company, consider getting sold in the next 18 months. You're just speaking to the power that these big companies have. And I think there's, there's also just a broader question as to whether the AI sort of platform shift will look like the Internet. In that application companies will accrue a lot of the value or if it'll look more of like the cloud in the sense that maybe the hardware layer has the better margins. And like we're seeing with Nvidia right now.

Martin Shkreli (24:52)

Yeah, nobody knows. But one thing I think is that software is not dead yet. And I think that we're making this financial software. We've been working at it two years. We sort of still in beta. We have some nice revenue, we're almost profitable. We haven't launched it yet. And it's this sort of. Many people try to make this thing. It's sort of a Bloomberg killer. You know, killer is a strong word. You know, Bloomberg's been this like software monopoly for 40 years. And the reason it works is because it's actually very hard software to make. And your customer expects, I was just sitting down with a customer. He expects the bond prices. When he looks up a bond to Be right. And you know, bonds are something that like 90% of these apps like Perplexity Finance, for example, doesn't have bonds. You know, half of Wall street or even 60 or 70% of Wall Street's related to bonds. And if you don't have your bond prices in there and you Vibe coded it well, a bond API player takes six months to do a contract. Like, these guys are so sleepy, they, they don't want to talk to you. They almost don't want a new customer. And if you want bond prices and you have to like make sure, oh, when you look up this French bond, it's correct. Like that's something that, like that kind of taste and that kind of like attention to detail. It's just not something you can vibe code. And it's, it's so hard to get right customers. A customer at Citadel, he's not vibe coding something. He wants to buy something and he wants to buy something that works all the time. And if it breaks, he wants to yell at somebody and take his business somewhere else. That's the kind of thing you get out of software and the relationships matter. Sal, my wonderful Bloomberg rep or whatever it is, you know, those are, those kinds of things sell software. So I sort of think the panic is most panics aren't, you know, really what, what you expect something's going to change. But I, I think some of this panic is, is unrealistic. And then, you know, it again, you know, going back to like, you know, the Bloomberg example, we have like 1800 news relationships with news companies. And you know, if you vibe coded it yourself, I've seen people do this, they get five and it's like, well, the trader cares about the 17, 13th new source that's going to screw up his portfolio. He doesn't care about, you know, the five that everyone know about. So I feel like, you know, vibe coding is kind of, it's, it's a fantastic thing. You know, where you can cut your software costs a little bit or just raise the, you know, the ability of your software, but it doesn't replace marketing and sales. It doesn't replace product and taste. It doesn't replace, you know, personal relationships and it doesn't replace the customer who wants to have really well made software. It may, may increase your ability to compete, but it's, you know, I feel like, you know, the changes that, you know, where like software stocks have dropped like a rock. Those are probably opportunities to buy and I feel like depending on the stock, you can, you can get some bargains. Out there.

Interviewer (27:38)

Yeah, that's, that's encouraging. I want to shift to biotech and pharma. If you were building a pharma company today, I'm curious what you might pursue. Sort of one range of question. The other thing I'm curious to get into is sort of, you know, you're, you had this great peptide debate on tvpn, which we loved. And you know, it seems like that's, that's all the rage and only going to increasingly so. And yet it seems you're, you're bearish on it and, and then also just GLP ones and what, what that means, so, so I'll let you take it away.

Martin Shkreli (28:16)

Yeah, I couldn't have more, I couldn't have higher conviction. The peptide thing is all bullshit, you know, it's, you know, self, self diagnosing and self administering medicine that you don't know anything about. I mean, this look literally craziest thing ever, right? I, you have to be out of your mind, you know, and I understand, like, all right, you're, you're Patrick Collison. You're, you're a super billionaire. You're, you know, maybe one of my investors. Naval, you know, you kind of like you want to take health into your own hands. You have a lot of doctors around, okay, that you're a special case, but you want to impersonate those guys. I think that, you know, that's where, that's where it sort of ends. I mean, you know, the star, you know, the star asset for these guys. This drug BPC157. I, I spent a few days on this thing. I took few days out of my life, wasted 1% of my year to look at the stupid drug. And it's the worst drug ever. And you know, nobody understands medicine unless you've actually made medicine successfully. My first, I got my first FDA approved drug. It was like four or five years ago. We got three or four years ago it was like accelerator approval. We finally got final approval, which is cool. Accelerated approval is actually contingent. Um, so. So, you know, I got a drug through the FDA, there are not that many. There are about 30 or 40 a year they got through FDA, so, you know, it's a pretty, pretty hallowed haul. And unless you've done that, you know, you really don't know what it looks like. Drugs are like seemingly simplistic. You know, you look at a, you look at, you know, this Claritin on my desk or something and you sort of say, oh, you know, I could do this too. And the reality Is, you know, it's, it's, it's pretty freaking difficult. In fact, some people say, well, how hard would it be to make this drug or something like that? I said, imagine the SpaceX landing, like the chopstick or the landing on its head. Drug development makes that look easy because I want you to, in your mind, shrink down the molecular nanomolecular size where angstroms are your unit of length, 100 nanometer, and imagine the atoms of some kind of organic molecule and imagine those atoms interacting with proteins, atoms. And you're telling me you understand what's going on there? It's really not easy. And I think what I see, people do like 10 minutes of pharmacology and they feel like they're experts all of a sudden. No offense to the guy who's debating Max, who is a very nice guy, sitting down on Max and teaching in pharmacology over a few hours is, to me, it's like, dude, you should not be advocating for this stuff. I mean, peptides, for example, are kind of one of the lowest desired drug classes in pharma for the longest time because their half lives are generally in the minutes. And GLPs are Franken peptides. You know, they're, they're, they're, they take GLPs and they add these fatty acids, they conjugate these different things that make the half life better, and they sort of become biological peptides that, that are like, you know, they're hybrid drugs basically. Amgen called them peptobodies, you know, so peptides in general are just these terrible asset class for pharma because the half, you need drugs that have long half lives. So BPC 7 is not dangerous because it's, it's gone within like 60 seconds. And the time you inject it, it's, it's dead. And so it doesn't have the time to do anything useful. Any drug guy could tell you that. But I think what, what this really is about isn't about pharmacology or science. This is about rebellion. You know, I'm a, I'm a rebel. I get this. You know, it's, it's. I don't want to pay Pfizer, I don't want to see my doctor. I don't want to pay insurance, I don't want to get a prescription for f. All that. You know, I'm gonna do this myself. And I, okay, you know, I get it. I mean, I'm, I, you know, it's crazy that maybe it was crazy for me to tell Congress to go F itself. And, and, you know, it's just as crazy to go, you know, you know, make your own medicine, but, you know, DIY medicine. I mean, this is the dumbest thing ever. So to me, as a pharma guy, I would focus on, you know, and this is where, like, you know, I don't want to tear, jerk anybody, but, like, somebody sent me a message today or last few days. You might have seen on social media about a West Point guy, you know, such strong military network, his son just died. His two more sons or two more kids that have the same disease, they're going to die too. I just had a baby boy. Look, you'd move heaven and earth for anything for your kids. And you know, how many people in the world know how to develop rare disease drugs? Well, I got one approved. You know, there. There's, you know, maybe 100 guys on planet Earth that, that can say that. And I would happily, you know, try to develop a drug for this guy. I got banned, you know, from the pharma industry for sort of political reasons. I still might want to try and do it in Europe or something or get a special exemption. But, you know, there are people dying, you know, there are people dying of hundreds of rare diseases, tons of cancers. Go to go where the hardest stuff is, you know, go where the people are suffering the most because, you know, that's where, you know, ironically, that's where the money is. And for the longest time, these kind of cosmetic diseases actually weren't moneymakers. And GLP's been around 20 years, and finally a lot of pharma guys are scratching their heads, like, why now? We've had these for a while and they just finally got mainstream after 18 years of like, watching this drug class be kind of like, meh, you know, they finally broke through because they are fantastic drugs. But, like, for the longest time, the way you made money in pharma was you went after the most heinous, horrible, terrible illness and made a change, made a difference in somebody's life, and that's how you made money. And I think that that's still the case. You know, it's. It's still the case. You have to go after the toughest cancer. The Duchenne muscular dystrophy has been a passion of mine for the longest time. My first company was named after muscular dystrophy. That's, you know, it's a death sentence disease. You can get a million dollars a kid if you save their lives. I think Elon, you know, Elon's not a drug company. But he's, he's sort of going to do the same thing with Neuralink. I mean, I think Neuralink's going to be a hundred billion dollar plus, maybe even 200 billion dollar company because those patients, and there's many of them, they want to walk, they want to talk, they want to be productive members of society. And he's, he's making it happen. And again, that's a million dollars per patient productivity, which insurance is happy to pay. So I feel like the rare diseases, the Alzheimer's, the terrible cancers, this is where you go. I mean, the playbook hasn't changed. I think that the science is still really hard. I think AI is going to help a lot there, coming up with new ideas. Fundamentally, the drug game is an idea game. You have to sit, toss and turn and say, I wonder if you inhibited, you know, IL1, would that work for Alzheimer's? No, I don't think it crosses the blood brain barrier. Inflammation is not that important. But what if we did this and you keep thinking and thinking and you have these ideas before you even put a drug into an animal or in a petri dish? It's a theory game and AI can actually do that. It can actually zip through thousands of ideas and come up with something. So I think there's something to work on there. And I feel like, you know, maybe it's anthropic, that's, that does a drug company, maybe it's OpenAI or maybe somebody else, but like there could and should be a way to make this work. The drug companies themselves don't take to technology very easily or quickly. You know, they're probably not the place to do this, but you still have to be a drug company. And I think that's what a lot of the Valley kind of doesn't get. They're like, we want to, we want to tackle the farm industry without being in the farm industry. And it's like, no, you have to go do trials, you have to go do the stuff that nobody wants to do. And that makes drugs kind of boring and shitty. And that's why like Vivek and myself are like two big interlopers in pharma. And we're both kind of not loved, you know, for lots of reasons because, like, pharma is this old guy's game. I mean, the average pharma CEO is like 60. There's no Patrick Collison pharma, and there never will be. You know, it's kind of, you know, a tough space to Be an entrepreneur in, you know, there's, there's, it's, you know, pretty ivory tower.

Interviewer (35:58)

Yeah, well, you guys were to some degree. So, so it's you guys. But, but I, but I hear you on the barriers being there. The. So just to close the loop on the predictions. So are you, is your thinking that in the next year we'll sort of see that peptides don't really work or are. Because a lot of companies are getting funded in this space. You think it's just all going to collapse? And then I'm also curious on the glp, one side, you know, Eli Lilly, there's just an Amazon announcement today. You know, it's over a trillion dollars. Do you think it's going to be a 5 trillion? Like, how big can this get?

Martin Shkreli (36:25)

Dark drugs have a big, big problem. As a friend of mine talked to Warren Buffett about this. He wanted to sell his drug company, it was privately held, wanted to sell it to Warren Buffett. Buffett said no. And he said the problem with pharma is ip, you know, so we have to recreate our business. Every 10 years, drug goes generic. I have to go find another one. Are you effing kidding me? You know, so like imagine being OpenAI or you know, imagine 10 years after a 16C. Actually your patent on venture capital expired. You got to go find a new business, go do PE or go do lending or something. That's like, I was just getting started. I was just hitting my stride, you know. And, and in pharma, you literally have to go do something else. And so Ozempix generic, in like a year or two, it's pretty good. And, and, and so the problem with, with drugs is you make a better and better drug and you reach this asymptote where it's like, nobody's making a better hypertension drug because we have solved that problem. You can lower blood pressure. You don't need another one. And so once that patent expires, it sort of permanently has lifted the bar for that disease. And eventually GLPs, you know, they're perfect. I mean, you really can't get a better one. So at the end of the day, Ozempic going generic, Munjaro, eventually It's, you know, 2040 or something, but eventually going generic. So markets price, long term asset value, long term cash flows. So Lily's kind of screwed, you know. You know, they have to find a way to perpetuate, you know, their product. And one of the ways you could do that is manufacturing. But the problem is you sort of have to design a drug that's hard to manufacture and if you want to keep it in the long run. And J and J figured out how to do this where for the longest time small molecules like Claritin go generic very quickly because any Indian company can make it. But antibodies sort of even still haven't just now are starting to be able to get dismediated by generics. So like in some ways like the more complex the molecule, the harder it is to make, the more cash flow you're going to get out of it because somebody else may not be able to make it. The patents expire and they expire quickly in pharma because you have to develop the drug over 10 years. So your 17 to 10, 20 year patent life kind of gets cut in half because of your development timeline. So you have 10, 15 years of cash flow. Lilly has brilliantly staged each GLP to come out one after another in this really smart way. But at some point the consumers and the insurers say I don't need Super GLP Max Pro plus like good old, you know, generic Ozempic works and it's $3 instead of Super GLP Max Pro which is $250. Consumers have zero brand identity with these companies. Companies, right. Nobody gives a crap that their Drugs from Lily vs Merck vs Pfizer and they just want the cheap version. And, and I think that sort of plagues these companies. So I think that's, that's unfortunate. I do think the peptide stuff, it's, it's going to be weird to see this happen because drugs are, are the reason we have an FDA and it's good is because snake oil sort of works for people like they, they, people want to think, they want to believe. And so if you think BPC 157 is working for you, you're not going to stop taking it and you love it and you think oh well it works for me. And you might think that, but you have to look at the trials. But I can't. Nobody can convince the populace that statistics matter. It's going to hit so hard your individual response, even though it's a non response, it's just random noise around a distribution. You want to believe that it's relevant to you, that it changed something for you. So it's going to be hard to defeat that. I think regulations are the way to defeat it. But you know, we're in this regulatory environment that that's really laissez faire. I feel bad for it because there's actually drug companies. There's a Huntington's drug that was promising, maybe not perfect, and FDA rejected it. And so the Huntington's disease is deadly disease, horrible genetic disease. Companies spent a couple hundred million dollars making this drug and the people who are suffering, dying from this disease can't get it. But I can get BPC157 totally unregulated stupid medicine that doesn't do anything. I can go inject that. It's sort of tough. I mean I think that's terrible. And, and I feel like Peptides will will are so safe. That's the one benefit that, you know, maybe people will just trick themselves into doing it. It'll be this weird veblen good where it's like, oh yeah, I take this, this and that, that's my stack. And it's, it's like it's not doing anything for you but you're spending a thousand dollars a month on it and you feel better about it and it gives you some placebo effect. I mean it's a business, it's not a business. I want to be in, you know, business of pharma is, you know, again, neuralink, you know, casting it as a pharma company for a second. I'm literally giving a million dollars a year productivity to this person. You know, I'm cutting the costs of everyone taking care of them and feeding them and doing all this stuff for them. Now they can work. And the meta, the medical system that maybe have been spending a million per year per patient on this, on this person and their productivity, you know, you flip that around and it's an amazing like beautiful thing that you will get paid for. You know, to get paid for something you have to show the value. And if peptide you can't show the value, yeah, you're going to get some suckers to buy it. But like, you know, that's not really exciting. So I don't know why I'd want to be an entrepreneur in this space when there's, you know, it's easy I guess. You know, it's a, it's like a go to market, go to consumer, you know, direct to consumer kind of thing where you can, you know, finagle your way into, you know, getting some demand. But you know, this isn't going to scale to like the reason Lily scale this product really freaking works, you know, and that's how you win. So I feel like, you know, you know, good luck to it. I mean, I just don't think it's going to be a Great place to play.

Interviewer (41:42)

Yeah. So we did some AI ecosystem analysis and then we just recently we just did some pharma analysis. I want to end on a little bit of off the wall question, which is hearkening back to your interview with Laura Shin a few years ago. Excellent interview. Where you analyzed sort of the SBF's case. And getting some advice. I'm curious to do a thought experiment which is imagine SBF gets out early, he gets lucky, there's some sort of pardon, or you just, you know, he gets out on good behavior. Maybe it's unrealistic, but imagine he gets out next five years, something like that, a shortened sentence, maybe 10 years. What advice might you have for him in terms of, you know, a redemption arc or just re acclimating to society?

Martin Shkreli (42:21)

Yeah, I mean, I talked to Sam, you know, I like him a lot. I think he should be out. I think the hard part here, and having talked to even the Trump administration about this, is the hard part is Sam has got to show he's a normal guy. And I think he struggled with that. He's obviously not that normal in a lot of ways. How many of us go to mit? How many of us start a huge company? How many of us pick Anthropic as the first? So there's something about Sam that people don't trust. And there's something about Sam that he's got to really let his human side out. And one of the problems here is maybe he doesn't have one. You know, and I don't think that, I don't say that as a bad thing necessarily, but as somebody who understands his path in life, being a prodigy, being pushed on stage as like this intellectual guy and being shoved into this like different room to room, math camp, mit, Jane street, you know, all this stuff, he maybe didn't have the time to like be a normal person. And I think that that's what makes it so awkward and so untrusting. People look at him, they're like, I don't know about this guy. There's something about this guy I don't trust. And he's got to fight hard to make it real that he's a real dude and with real life, with real friends, with real emotions. And then people will feel bad for him. But until then, it's like, how do we know this guy doesn't come and pull the wool over our eyes again? And I feel like, truth be told, as much as Anthropic was a successful investment, if you look back at that announcement, Anthropic was those profits seem like they're going to go in his pocket and, you know, not in the depositor's pocket. Not enough. Not even in FTX's pocket. So, like, you know, if you look at the round, it was series A by Sam Bankman, you know, and it was like, well, at the time, that was the tell. That actually is how you would have told. Because where is this 400 million coming from? I mean, most people don't have $400 million. You know, Bezos doesn't put $400 million in deals. You know, Zuck doesn't put, you know, these. The two richest guys in the world don't just drop 400 million on a single deal. The biggest VCs, maybe that's still like a lot. So, like, how'd this guy show up with 400 million to drop? And, and the answer was obvious, you know, he took everyone's money to do it. And that's wrong. And, you know, you could almost allow it if, like, hey, it was going to go to all, all his depositors. Somehow it was going to give us 105 cents on the dollar. Okay, you know, whatever. I didn't ask for this gambling, but, you know, if it helps me, I, that was kind of my case. That's, that's what I went to jail for. And so, you know, at least I gave, I gave the profits to the people. But I think that, you know, it's. No matter how bad or how big of a mistake you made, there's always redemption. It's just, you have to show the vulnerability. You have to say, I fucked up. You have to say, even if you don't say I fucked up, you have to show a scar or wound or bleed, bleed a little bit. And I think that his, his thing is like, you know, he wants to fight, but, but he's not connecting and, and connecting is so important. And I feel like his upbringing, you know, his, his, his sort of like MIT math camp, Jane street life has led him to this position where he's hard to feel sorry for, he's hard to connect to him. And I feel like if he ever, if he does get over early, which again, I'm advocating for, but it's been met with this very stiff resistance of who really is this guy as a human, you know, that's the question I get back from the Trump camp. I think that once he does that not only will people in politics feel bad for him, America will feel bad for him. America will want to give him a second chance because the Promise is there. The guy's obviously a genius, One of the best businessmen ever. But how do you take that and get the trust? I like this guy. I want to root for this guy. That's what he's got to focus on. And he's brilliant. So I think he might be able to do it, but it's going to take some soul searching, might even take some pain. He's obviously going through pain right now, but I'd love to see him out. I'd love to see what he could do for society. And I feel like as long as he can be a human, which is, you know, some people, we joke about them being lizards or robots or whatever, and there's a human in everyone. And, you know, I think this experience may actually. It's going to sound really crazy. Might actually be the best thing for him because, you know, it's the pain of learning who you are. The pain of going through this pressure chamber that prison is and forcing you to reflect on, like, what. What did I miss? What did I. What am I? What. What is this all about? And five years in prison and then coming out and. And, you know, I've heard a rumor that there are investors who have already lined up for Sam's next thing. I'm not kidding. I've heard this from very serious people that. And the numbers are, like, they're staggering, that they're willing to drop hundreds of millions or even billions on Sam's next thing. And. And so obviously, you know, there's something here and to throw a life away, you know, that, like, such a unique life away, you know, and I. I was. I was making fun of Sam, you know, you know, as I was digging a little bit. And now, like, you know, that I feel like, you know, he has to go through that journey, that hero's journey of, like, he's got to hit rock bottom. And then I think, you know, perhaps, you know, the time will be where. Where he gets out. Maybe it's this administration, maybe it's the next one, but I see a big, glorious comeback if he can find this humanity, find this, like, you know, this new person.

Interviewer (47:38)

Yeah, that's a great note to wrap on, Martin. Thanks so much for coming on my situation.

Martin Shkreli (47:43)

See you soon.

Podcast Host (47:46)

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