Predicting the SpaceX, OpenAI, and Anthropic IPOs — With Dick Costolo

Summary

Big Technology Podcast with Alex Kantrowitz

Episode: Predicting the SpaceX, OpenAI, and Anthropic IPOs — With Dick Costolo

Guest: Dick Costolo (Former Twitter CEO, Zero One Advisors partner)

Date: May 27, 2026

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Overview

In this episode, Alex Kantrowitz dives into the forthcoming IPOs of SpaceX, OpenAI, and Anthropic—three of the most anticipated tech stock market debuts ever. To unravel the dynamics, expectations, and risks associated with these IPOs, Alex is joined by Dick Costolo, former Twitter CEO who led Twitter through its own high-profile IPO. Together, they juxtapose Costolo’s firsthand IPO experience with the unique circumstances, personalities, and hype cycles shaping this new era of tech public offerings.

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Key Discussion Points & Insights

1. The Reality of Taking a Company Public

• Internal Turbulence of IPOs ([02:52])

  • Pre-IPO, teams are largely insulated from daily fluctuations—stock options are rising, and valuation increases seem smooth.
  • Post-IPO, teams must brace for severe stock volatility, which can shake morale regardless of company performance.
  • Quote:
    "You need to prep the team for, hey, we're about to go into a world where the price of the stock can change, even though nothing particularly happened." — Dick Costolo ([03:53])

• Importance of Messaging and Narrative ([04:44]–[06:43])

  • The numbers start to matter for real—public markets aren't about private potential, but reported metrics and profitability paths.
  • Setting and managing expectations is key; what is promised at IPO will be judged relentlessly moving forward.
  • Quote:
    "If we missed an MAU (monthly active user) number, stock would be down. And we could miss Top Line... but that quarter MAU were up over consensus and the stock went up..." — Dick Costolo ([06:48])

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2. SpaceX, OpenAI & Anthropic: The Comparative IPO Narratives

a. SpaceX & The Elon Effect ([08:02]–[14:12])

• Elon Musk’s mastery in shaping the future narrative for the markets is unmatched; faith in his vision is often the primary driver of valuation.

• SpaceX’s valuation ($1.5–$2T) will likely be propelled by belief, not near-term financials.

• The IPO is expected to have "very little float," creating initial scarcity and sky-high opening prices.

• Quote:
  "I think SpaceX... could end up being worth over $2 trillion on day one... His ability to frame a narrative on a small float—he doesn’t need a bunch of sovereigns to come in and put $400 billion each into the company." — Dick Costolo ([10:38])

• Starlink is the true story: The long arc is about Starlink becoming essential global internet infrastructure, with other ambitions (like data centers in space) being distant bets.

• Retail investors’ loyalty: There’s a theory that Tesla stockholders will rotate into SpaceX, especially as narratives around the two companies blend and potentially merge.

• Skepticism around "Space Data Centers": The practicalities (e.g., logistics, cooling, risk in space) are immense—this is a future-facing story akin to “full self-driving” promises.

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b. OpenAI: The “Exponential” Dilemma ([14:12]–[20:18])

• Sam Altman has made staggering compute and data center spending commitments, far ahead of demonstrated revenue.

• Differentiator: OpenAI’s promises are numerically explicit—public markets will ask for matching revenue/expenditure logic.

• Quote:
  "Sam has gone out and written checks that the rest of the organization can’t cash... over a trillion dollars worth of commitments that don’t have... the revenue model or growth yet to back it up." — Dick Costolo ([14:20])

• While belief in exponential growth underpins OpenAI’s pitch, public investors will want a clear bridge between outlays and future cash flow.

• Early post-IPO, enthusiasm will be sky-high, but ongoing scrutiny on growth, margins, and operational economics will be intense.

• On narrative management:
  "I think they'll be under a much bigger microscope quarter to quarter than Elon will. Is that fair? No. Is it probably what will happen? Yes." — Dick Costolo ([15:55])

• Fast-changing market dynamics (e.g., OpenAI’s Codex adoption vs. Anthropic’s Claude Code) can shift perceived momentum suddenly.

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c. Anthropic: The Enterprise Middle Ground ([20:21]–[22:41])

• Anthropic’s focus is on the enterprise market, with a more measured buildout and less speculative hype compared to OpenAI.
• Less scrutiny, but also less upside from retail excitement.
• Public perception is of steady, pragmatic growth—the so-called “middle of the road.”
• Quote:
  "Their focus on the enterprise, their consistency of story... makes their story maybe the most middle of the road of the three." — Dick Costolo ([21:26])

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3. IPO Order & Institutional Capital Dynamics ([22:37]–[27:12])

• Who IPOs first matters:

  • Going first grants access to the greatest pool of market liquidity and lets you set the narrative.
  • Going second/third means investors may have already locked in positions and capital, reducing enthusiasm for later entrants.
  • Quote:
    "The advantage of going first is you have access to everybody's liquidity... when you go out with third, 'I'm sort of capped out on my public...'" — Dick Costolo ([24:29])

• Ripple effects:

  • Massive IPOs will finally provide private market liquidity, freeing capital for new VC investments down the road.

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4. Risks, Headwinds & “Where the Story Can Unravel”

a. AI Data Center Backlash & NIMBY ([28:04]–[31:00])

• Increasing public opposition to data center expansion—environment, land use, and community disruption concerns unite both political left and right.

• Quote:
  "There is a growing backlash... 'Hey, not in my backyard.'... This is like the only thing I can think of that unites the right and the left in the country right now." — Dick Costolo ([29:08])

• Politically, expect moratoriums and ballot measures to start springing up.

b. Tech’s Narrative Problem ([31:00]–[32:32])

• While tech leaders feud, they’re missing the opportunity to educate the public about why large-scale AI infrastructure aligns with national competitiveness, especially vs. China.
• Quote:
  "They just need to be a lot more focused on the external narrative about this is why this is important to the future of our society. And it’s not happening at all right now." — Dick Costolo ([32:32])

c. Platform Value and Pricing Wars ([33:13]–[35:16])

• Will the value created by AI labs flow to users or stay with the platforms?
• Bill Gates definition of 'platform': Platform’s total ecosystem value must exceed the platform’s own revenue (not the case with OpenAI/Anthropic now).
• Price wars are likely, as models near feature parity, eroding margins.

d. Microsoft/Apple Skepticism ([36:01]–[37:28])

• Some believe Microsoft and Apple’s caution signals deeper doubts, but Costolo attributes their moves to strategic, operational decisions—not dismissal of AI’s importance.

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5. Meta, Twitter & Tech Company Evolution ([41:20]–[53:46])

• Meta’s Identity Crisis and Morale Dip ([42:35]–[44:39])

  • Layoff waves cause persistent employee anxiety—leadership credibility undermined if messaging sounds "spun."
  • Quote:
    "There's nothing people hate more in an organization than feeling like they're being spun. And that's when they start to kind of turn on management." — Dick Costolo ([44:52])

• Twitter’s Core Strength: Resilient Text Network ([47:08]–[52:17])

  • Despite waves of “Twitter is dead” stories, its text format persists, thanks in part to strong product management.

  • Quote:
    "Twitter's usefulness as a text-based medium... has been extraordinary." — Dick Costolo ([47:57])

  • Interesting anecdote: When Costolo resigned, Elon Musk immediately unfollowed him on Twitter. ([50:24])

• Business Model Takeaways ([53:05])

  • Advertising remains king; premium subscriptions can’t match ARPU.
  • Quote:
    "Advertising is undefeated as a business model." — Dick Costolo ([53:17])

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Timestamps for Major Segments

• [02:52] - Internal company turmoil during IPO transition
• [06:43] - Messaging pitfalls pre- and post-Twitter IPO
• [08:02] - Comparing SpaceX, OpenAI, Anthropic IPO narratives
• [10:38] - Float/demand dynamics in the SpaceX IPO
• [14:12] - OpenAI's risk profile and public market challenge
• [20:18] - Anthropic’s enterprise-focused measured narrative
• [22:37] - Does IPO order matter?
• [28:04] - AI data center backlash (NIMBY politics)
• [31:00] - Tech’s failure to “sell” AI to the public
• [33:13] - Platform value and the risk of margin wars
• [42:35] - Meta’s multiple layoffs and employee morale
• [47:08] - Is Twitter still a social network? Product resilience debate
• [53:05] - Advertising vs. subscription in social platforms
• [54:39] - Silicon Valley’s growing “permanent underclass” and wealth gap

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Memorable Quotes & Moments

• "The narrative and the story and your ability to help the market think about the way you want to tell the story is just as important as the specific numbers in the quarter." — Dick Costolo ([22:11])

• "Elon will build castles in the sky and people will buy it. And Sam will be put up much more against the 'help me understand how this maps'..." — Dick Costolo ([21:39])

• "There's no winning [in a life of comparison]." — Dick Costolo ([54:57])

• "If we don't do these things, China wins. If China wins, we lose." — Dick Costolo ([31:40])

• Anecdote:
  "I get off stage after telling the company... my phone bings: Elon Musk has unfollowed you on Twitter." — Dick Costolo ([50:24])

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Final Reflections

The episode closes with a candid discussion of the economic and societal rifts emerging in the Valley, as new AI fortunes are minted. Costolo cautions against the "life of comparison" and underlines the importance of tech leaders communicating societal benefit—lest public opinion and policy cut the industry down before its promises can materialize.

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Listen to the full episode for in-depth strategies, candid anecdotes, and the inside scoop on tech’s most anticipated public debuts.

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Transcript

[Alex Kantrutz]

We are headed towards the most epic run of IPOs of all time, with SpaceX, Anthropic and OpenAI all coming out within the next calendar year. What's going to happen? Let's ask the man that took Twitter public right after this. I'm just back from ServiceNow's knowledge 2026 in Las Vegas and the conversations I had there are ones you're going to want to hear. I sat down with their President and CPO Amit Zaveri on the platform strategy powering enterprise AI, Chief People and AI Enablement Officer Jackie Canney and Chief Digital Information Officer Kelly roma on what AI really means for the workforce, the technical leaders behind ServiceNow's Nvidia partnership on shipping AI at scale and Ulta Beauty on deploying ServiceNow's technology across 1300 stores. If you want to know where Enterprise AI is actually headed, not the hype, but the real story, you can find these videos on my YouTube channel. Search Alex Kantrutz on YouTube. Depending on who you ask, between 80 and 95% of enterprise AI projects fail to get AI to work for you. You don't need more tokens, you need better people. A board pairs powerful proprietary tool with senior engineers who've seen it all. That combination means your project doesn't stall, doesn't drift and doesn't fall. It ships. Whether you're a startup that needs to get to market or an enterprise with complex legacy challenges, Aboard delivers exactly what your business needs. Fast Aboard is your partner for AI transformation. Visit aboard.com and let's build something together. Welcome to Big Technology Podcast, a show for cool headed and nuanced conversation of the tech world and beyond. Today we're joined by Dick Costello. He is the former CEO of Twitter who took the company public in 2013. He's also a partner at Zero One Advisors and one of the members of a new podcast, the Nick Dick and Paul Show. Dick, great to see you.

[Dick Costolo]

Good to see you. I'm for Clarity. I'm Dick in the Nick Dick and Paul Show.

[Alex Kantrutz]

Oh it's good to know that.

[Dick Costolo]

It's good to have that clarity from the beginning.

[Alex Kantrutz]

Thank you for establishing that very interesting time that we're about to head into. We are in but in terms of the financial markets, three major IPOs are on the way. SpaceX, OpenAI and Anthropic could all come within, who knows, maybe even the next six months, which is crazy to think of. You were the CEO that brought Twitter public. In fact, I showed up to San Francisco in May 2015. I got one week in and then week two you stepped down as Twitter CEO. That's right. And then away we went. So it's good to be. We actually spoke the morning after. We're going to talk about Twitter in a bit. But you're somebody who knows not only about the going public process, but how important I think the message is when you go public, how important that message is for what the rest of your company lifetime is going to look like,

[Dick Costolo]

how you're communicating with your own team and company about it inside the company. Because interesting thing about an IPO for any company, but particularly for tech companies and particularly in a bull market, is there's the time before the IPO where you raised your Series B and you were valued at a billion dollars and that's what the stock price is and what the valuation of the company is until 18 months later, whenever, and you raise your Series C and now you're valued at $2 billion. There's not really any concern about the stock price. If you're in a fast growing company. Before the IPO, you're like, my options are priced at $1 and now the stock's $2. My options are priced at $2, now the stock's $3. It's just kind of this, it's all kind of fine. Then you go and think about not just Twitter in 2013, but more recent examples like what Dylan Field had to deal with Figma and Cerebras now dealing with as well. It took us seven years, six years, seven years to get to the price of $30 a share and then in one day it went to $110 a share and then two months later it's back down to $40. So there's becomes this. You go from whatever, it's not something you think about having to reinforce with the team or talk about with the team regularly, to whiplash. And what happened and why is the so my advice to people who haven't taken a company public before and are about to do it is you need to prep the team for, hey, we're about to go into a world where the price of the stock can change, even though nothing particularly happened. Today, the stock can go up by 15, 20% in value based on nothing or down 15, 20% totally based on nothing.

[Alex Kantrutz]

I think the public underrates how turbulent that could be inside the company. And this is kind of what I was getting at. The early days are really important in terms of the way that that turbulence actually lives out in your time on the public markets. So let me Just make the distinction between the private markets where the numbers matter to a degree, of course, but they're not the ground truth. Right. A lot of it is feeling and potential. You go public, those numbers matter a lot. You have to report quarterly.

[Dick Costolo]

For now, we'll see if that SEC rules changes.

[Alex Kantrutz]

So there's conversations that might be once a half, but you have to report quarterly. And ultimately, even if you're not showing profitability in the early years, investors need

[Dick Costolo]

to show a path toward it.

[Alex Kantrutz]

And investors who bought in on the IPO promise, they need to see that promise.

[Dick Costolo]

Of course. What are future cash flows going to look like exactly? I remember a year before we went public, I was at a summit at ge, General Electric, and I was on stage with Jeffrey Immelt, the CEO, and he asked me, how do you think about how you're going to manage your investors once you're a public company? I said, well, we're just going to continue to focus on the long term like we have now. Everyone in the audience laughed. Good luck. Let us know how that goes once you're a public company. When all the sell side analysts are asking you every two days what the next quarter numbers look like.

[Alex Kantrutz]

No, you're right. And so look, I'll tell you what I remember covering because I was a Twitter beat reporter for a while and what I remember covering because I would go on CNBC and talk about Twitter earnings and I would always look back to the sort of the messaging at the Twitter ipo. Now I'll caveat it. Well, no, I won't even caveat it. I'll talk about it. What you said was, look, we see a path that this is a global service, we'll get a billion users. And what's the thing that dogged Twitter every quarter? It's like, you know, 200, 250, 300 million monthly active users. But I bought in at this promise that there's going to be a billion,

[Dick Costolo]

we're going to get to a billion.

[Alex Kantrutz]

Now this was, I was going to caveat, but now I'm going to sort of talk about this.

[Dick Costolo]

We could even have beat Top Line and EBITDA and grown Bottom Line more than we said we were going to grow it. But if we missed an MAU number, this would be down.

[Alex Kantrutz]

Exactly.

[Dick Costolo]

And we could miss Top Line. I mean, we only missed Top Line one quarter by like 1%. But. But that quarter MAU were up over consensus and the stock went up and by a little amount.

[Alex Kantrutz]

Yeah. And so this is the point that I was going to Bring to it, which is the hype that you came out of the door with at Twitter is basically going to be nothing compared to the hype that we're going to see SpaceX, OpenAI and Anthropic come out with. I mean, talk a little bit about what it's going to look like when these companies hit the public markets and then start reporting these quarterly earnings. SpaceX might come out 1.52 trillion. OpenAI, anthropic, certainly trillion each, at least. This seems like they have obviously the potential to change software. We talk about that all the time, change tech. But until they do, they're going to be measured against the expectations they set. And that could be a very rough road on the public markets for a while.

[Dick Costolo]

100%. However, I think you've got three very different personalities and stories associated with each company. Let me just say what I mean by that. Elon has the benefit of already knowing what this is like. Like him or like the way he runs his companies or not like the way he runs his companies. He does a great job of the narrative of yeah, yeah, yeah, this is what's going on. Right. But let me tell you what's coming. I mean look at Tesla. They can hit or miss delivery numbers and they can have 37, 63 robo taxis on the road in Austin versus the year ago number of estimated a million. But the narrative is, yeah, but this is where we're really going. And he's just out ahead of it with the public market and the retail investors and his fans and even the analysts and the sell side analysts and the people who run hedge fund. So I think with Elon, even though the initial valuation of SpaceX as a public company, if you mapped it to the amount of stuff they have to launch into space and make productive, is going to be like, wait a minute, that math doesn't fit.

[Alex Kantrutz]

I mean, forget Mars, they're going to have to get to Neptune too.

[Dick Costolo]

Yeah. And build it. He just does such an expert job of yeah, yeah, yeah, yeah, yeah. But if you play this out 10 years and I think he'll be, I think that. So I think he'll be actually fine. Even though there will be the people that are like, look, these numbers just don't make any sense compared to, you know, Starlink has to grow at this crazy amount over the next 10 years for this to make any sense.

[Alex Kantrutz]

Right. Okay. Before we move to OpenAI, how much money in the market is there in this belief that Elon will figure it out? Because so you have Tesla, right? So you have Tesla and there's this belief that he'll figure out robotics and then you have SpaceX with this belief that, I don't know, he'll figure out space.

[Dick Costolo]

I think SpaceX. I am one of the people that believes SpaceX will buy Tesla.

[Alex Kantrutz]

Right. And so Tesla's 1.29 trillion.

[Dick Costolo]

Yeah,

[Alex Kantrutz]

I don't know, maybe I'm misreading the market, but I get a trillion dollar company on belief of Elon. But then if he buys Tesla, we're talking about a $3 trillion company in the belief that Elon will figure it out. Is that possible?

[Dick Costolo]

Again, when SpaceX goes public, and I think it could end up being worth over $2 trillion on day one, whether that's a fake price or not, three days later, it's something else. People are going to. There's so little float. My understanding is there's so little float and the float is how many shares are being issued, et cetera, as a percentage of the overall number of shares of SpaceX. And there's going to be so much demand that the day one price is going to go to some insane number where it floats out. I don't know. I just think that his ability to frame a narrative on a small float, he doesn't need, for example, a bunch of sovereigns to come in and put 400 billion each into the company, he just does 30 billion each into the company. He just doesn't. He's been able to sustain that retail narrative with Tesla and I think it'll continue for some time with SpaceX. We'll see how long that lasts. But I do think he'll be able to do it.

[Alex Kantrutz]

Okay, what is the narrative? Before we move to OpenAI, what is the narrative?

[Dick Costolo]

I mean, it's just going to, you know, Starlink is going to be. Starlink is going to be power all, you know, all Internet connectivity.

[Alex Kantrutz]

So it's a Starlink story.

[Dick Costolo]

It's a Starlink story. And then I'm sure it'll be data center space, which Sam has and on our podcast we've talked about. It's a long, long way off from being true. I think data centers in space is actually like full self driving. If you Remember, Elon in 20, 2013 said, maybe it's 2014. By next year your Tesla will be able to back out of the garage, drive you to work, pull into the garage at work, navigate downtown, all without you ever touching the steering wheel. He eventually was kind of right. He was just 11, 12, 13 years off. The data centers in space Thing is the same thing. The amount of the acreage of cooling systems you would need to launch into space right now.

[Alex Kantrutz]

Well, the argument is you don't need cooling.

[Dick Costolo]

Well, you actually do, but it's a longer. That's a longer conversation.

[Alex Kantrutz]

Okay.

[Dick Costolo]

The amount of stuff you have to launch into space right now to even power a 1 GW data center is something like foots out to something like 16 acres of stuff in space. So you can't just. The capacity to launch that right now is nonexistent.

[Alex Kantrutz]

I don't see it as ever possible. I mean a piece of space junk hits your thing, you have to send not just an astronaut, a fleet of astronauts. I think a data center never has a plug come undone because it wasn't like properly plugged in. It's like, gosh, we have to send an astronaut. That's crazy.

[Dick Costolo]

Let's at least agree that it's at least 10 or 12 years away. But the story will be here's what's coming. And I just think, look, if you would ask me 10 years ago, how long are people going to buy their Tesla story where yeah, they missed this, but this is what's coming. I would have said it would have fallen apart a little while ago and it just doesn't. So I think the same will be true of SpaceX for a while.

[Alex Kantrutz]

I have this theory that the Tesla stock will or the Tesla shareholders who've been through this bumpy ride with Tesla, they've been told a couple stories. Tesla, the electric car, the self driving car, the Optimus robot, they will move their money. The retail in particular will move their money to SpaceX.

[Dick Costolo]

I think that's probably true. Yeah, I agree. Then SpaceX will buy Tesla.

[Alex Kantrutz]

Probably.

[Dick Costolo]

Yeah.

[Alex Kantrutz]

Okay, so if Elon is somebody that can sell vision, Sam Altman is not.

[Dick Costolo]

No, I don't think it's that he can sell the vision and Sam can't. I think it's that the narrative around OpenAI is already SAM has gone out and written checks that Sarah Fryer and team not to put Sarah's the cfo. So it's not just her. Sam has gone out and written checks that the rest of the organization can't cash. If you will, the COMPUTE commitments, the public commentary about, yes, we're going to spend this much on compute, but we're going to spend three times as much on training the models. And when you go, there have been plenty of podcasts with OpenAI investors on all these topics, et cetera. But when you go and run on the numbers it adds up to crazy. Over a trillion dollars worth of commitments that don't have the and you don't see the revenue model or growth yet to back it up. He's kind of mortgaged a bunch of the company, if you will, that. Now Sarah and the rest of the executives have to go out there with an S1 behind them and answer questions. It's one thing for the CEO to be out there. And again, Elon's got this history of I'm talking about things that are four or five years out. Sam has made monetary commitments. Here's how much so and so is going to put into the company. This is the deal for this particular data center. This is the deal for this kind of compute actual dollar figures attached to them and commitments. Sarah and the team now have to go explain to the public markets and get out there during the roadshow and hey, help me. I'm not getting how the bill adds up here. I'm not seeing how the dollar commits over here are mapping to revenue over here. And when we're going to see. Prof. I just think they're going to have a much, much tougher time. It will still do really, really well on day one because people are going to be like, it's the next stigma, it's the next Cerebras. I haven't been able to buy secondary before. I want to be an investor. You have to own one of these things. But I think they'll be under a much bigger microscope quarter to quarter than Elon will. Is that fair? No. Is it probably what will happen? Yes.

[Alex Kantrutz]

So when I spoke with Sam about this, his perspective was basically like, it's tough for people to grasp exponentials and we are in the middle of an exponential. So you might see our revenue today and you might see our planned expenditures, but what you don't fully grasp potentially is that we see it going that direction. And that argument is a lot of people don't buy it. The counter on it, the counter to that counter. And I'll let you answer is no.

[Dick Costolo]

You keep doing the arguments yourself and then we'll end up somewhere.

[Alex Kantrutz]

That's typically what happens. I just debate myself. All right. But let's just talk about it. If you've seen this play out over the past few months, you've seen anthropic hit capacity limits and OpenAI is starting to look wiser because it planned for that exponential.

[Dick Costolo]

Yeah. So I think, first of all, I think Sam is right that people, I think people are I'll just insult all your audience right now and say, I think people are generally enumerate and don't understand exponentials. And it's true. If you look back even six months ago with the actual committed data center buildout, people were saying there's way too many. There's going to be way too many data centers. We're not going to ever use all these things. And six months later with agentic coding and Codex and Claude Code and et cetera, like, yeah, we actually need more because these things to both do forward and backward work and token usage has grown exponentially. He's proven to be correct. Yet the size of the commitments, the debt load that some of these people are taking on to fulfill some of these commitments and the gap between those commitments and current OpenAI revenue growth is he's just got a hard. Sarah and the rest of the executives in the company are going to have a harder time. Help me map how you get from here to here. I just think they will. They've got hard numbers associated with them that Elon doesn't necessarily have. Elon does. A lot of here's where we're going to go and this is what's going to happen next. And people are like, great, I get it.

[Alex Kantrutz]

Well, SpaceX has basically given up on the AI project. And I know that might sound extreme, but when you're renting data centers to Anthropic, they've given up.

[Dick Costolo]

Yeah, yeah.

[Alex Kantrutz]

So is it possible with OpenAI's case that OpenAI really delivers on the product because it has more of these data centers, but still doesn't get it right economically?

[Dick Costolo]

I think so. This is my admittedly opinion from the last couple of weeks, but one of the things that I see happening that works in OpenAI's favor is Codex is getting more and more popular. I think if you asked people a month ago if you actually looked at Google Trends a month ago for Claude Code, Google Trends is show me what the search results, the volume of search results for this term over time, Claude Code looked like one of these inflection points and Codex is kind of bumbling along. In the last couple weeks, I've heard more and more folks say we were 95% Claude code and a couple Codex fans. And now there's a rapid growth in the number of people moving to Codex. That works in Sam's favor. And should that continue and you see a balance of, I don't call it, I don't know, 50, 50, 60, 40, whatever, with the growth in agent decoding across the board, that's going to continue, that could Be what Saves. That could be one of the things

[Alex Kantrutz]

that saves OpenAI Anthropic.

[Dick Costolo]

I just think, I mean, same thing. No, I think Dario. I mean, that's why I think they're three different things. I think Anthropic has just been maybe as a result of just not being the lead horse, so they don't have the spotlight on them. They were just more focused on we're going to go attack the Enterprise. We're going to focus on the enterprise. They weren't even initially going to release Claude Code. I mean, initially my understanding from folks inside Anthropic is we were just going to be like, wait, this is like a huge competitive advantage to be able to increase the rate of speed with which we can accelerate our own work. And then decided, well, actually we should release it because people will find problems with it out in the wild that we didn't find internally and that'll make everything better, et cetera. And there are probably other narratives in terms, but that's my understanding anyway. I just think their focus on the enterprise, their consistency of story. And the public's perception that Claude Code is irrespective what I just said about Codex two minutes ago, that Claude Code is like, this is the great unlock and going to be the real game changer makes their story maybe the most middle of the road of the three. Where I think SpaceX will be. Elon will build castles in the sky and people will buy it. And Sam will be put up much more against the Help me understand how this maps to this over here and Dario's threading the needle between the two and we'll probably get a little bit more of a. This is the most consistent one of the three I can bet on for long term growth and focus.

[Alex Kantrutz]

But the finances aren't going to look that different or they will.

[Dick Costolo]

I think that my big losses from all of them. I get it. My experience as a public company executive is that the narrative and the story and your ability to help the market think about the way you want to tell the story is just as important as the specific numbers in the quarter. And I think that's more true now than it ever was.

[Alex Kantrutz]

Does it matter then who goes first? Because you get a chance to set the narrative as opposed to.

[Dick Costolo]

Yeah, I think it would be great. I think it would be great for Anthropic if they can go first because for this reason, like we can tell our story. It's not going to be compared to. But Sam says and we just saw in opening bell on cnbc that they had to spend this much in compute. Why don't you have to spend this much in compute? You want to go first? I mean, I actually think part of the Elon lawsuit that, you know, we now all know the verdict of was, you know, when the verdict was announced, some people were like, oh, I'm, you know, surprised he pursued that. If it was going to be that kind of obvious that he was going to, was going to lose. I think part of it was just going to, you know, throw some wrenches in the works over there and slow them down and I can get out first before any of these things and I'll be first out to market and I can suck a little bit of, you know, the air out of the room and that'll be great.

[Alex Kantrutz]

Now, you mentioned that most people are enumerate, so let's keep running with that.

[Dick Costolo]

Yeah, this is gonna be the. Unfortunately this is gonna be the. I can already see the clip this. Unfortunately, many, most people are enumerate and then someone will go find somewhere I made a simple math error and then they'll.

[Alex Kantrutz]

Oh, our team will do it.

[Dick Costolo]

Yeah, okay, perfect.

[Alex Kantrutz]

But we're very generous with those.

[Dick Costolo]

Excellent.

[Alex Kantrutz]

Just kidding. We won't do that to you. But let's talk a little bit then about the money in the market that can. I mean, we're going to talk about 1 1/2, 2 trillion for SpaceX, a trillion for OpenAI, trillion for anthropic. Is there. I mean, obviously that is just the market cap, not the money going in,

[Dick Costolo]

but there's a lot.

[Alex Kantrutz]

But the money has to come from somewhere. Where's it going to come from?

[Dick Costolo]

Again, another advantage to going first or going second and not going third is there's not infinite, but there's not infinite capital out there. You're going to want to be in one or two of these things and then probably not all three, although we'll see. They're going to require a lot of capital. And I think the advantage of going first is you have access to everybody's liquidity and then you go second, you have access to some of that liquidity and then when you go out with third, like, well, we put this much into SpaceX and this much into Anthropic and we. I'm sort of capped out on my public. The percentage of money I devote to public equities, et cetera, et cetera.

[Alex Kantrutz]

Do you think the other thing. Well, let me ask you.

[Dick Costolo]

Go ahead.

[Alex Kantrutz]

The investors, the public market investors have secondary effects on. Right, but they must be making contingencies Right. They go through these planning cycles where they're like, I'm going to want a piece of all these companies, but so I'm going to have much more money available than previously. But maybe not.

[Dick Costolo]

We'll see.

[Alex Kantrutz]

Because if you don't do that and somebody else comes in and gets OpenAI for cheap, you just messed up in a big way.

[Dick Costolo]

We'll see. We'll see. As you already said, even though those market caps are not the amount of money that's sloshing around on the supply demand side of the shares that are floated, they're still big numbers and there's not infinite capital out there. The interesting other thing that will happen is there's been so much illiquidity in the private markets. You've got all these university endowments and venture LPs, etc. That haven't had their big liquidity events that are now going to be flush with distributions of SpaceX and Anthropic and OpenAI that are going to be able to turn around and pour a bunch more money into the early stage venture capital again, that have been maybe people who, hey, I'm already. SpaceX is marked up to this. It's on a markup basis. It's now this percentage of my portfolio, it's only supposed to be 7% or 8%, it's now 15%. Can't invest in new venture funds that becomes liquid. You get your big SpaceX distribution, you've got a lot of money to go invest in venture capital again. So there will probably be six to 12 months down the road a great time to go raise venture capital from LPs.

[Alex Kantrutz]

Right. The question is, well, what can you invest in that doesn't get eaten by these companies?

[Dick Costolo]

Yeah, well, I mean, that's something you have to be thinking about if you're a venture investor. For sure.

[Alex Kantrutz]

Yeah. All right, let's talk a little bit about where this story can unravel, where it could go wrong. Let me give you one scenario here, which is I was speaking with an investor recently about the margins that these companies, these big AI companies are getting. And I thought, well, they can easily raise the price because the economic value that they're creating is so great that. But you could double the price and most people would pay that price. This investor said, no, they're so close to parity that you're much more likely to see a price war than you are to see a across the board price raise. And then I had to agree with him. I agree with that happens. Then how do you justify massive valuations for the OpenAI and anthropics of the world.

[Dick Costolo]

I agree with that sentiment. I actually think there's a bigger challenge for them and it's something that is growing in the news, which is the public backlash against where's all the compute going to come from? And are these data centers that have been already committed to and approved by the county commissioners and blah, blah, blah, are they really going to keep happening? The one that's been in the news a lot is the Utah data center just north of Salt Lake, that Kevin o', Leary, the shark tank investor from the Canadian Shark Tank. Whoever's in charge, who's ever actually the money behind this thing. And I actually don't know who it is. Why they picked Kevin o', Leary, a Canadian Shark tank guy, as the face of this is anybody's guess. But the people.

[Alex Kantrutz]

It's funny, we talked about this before. You mentioned these, you know, Canadians, like, why are you in a US Infrastructure project? Fine. But I would say the bigger problem is he was the face of ftx, not the guy.

[Dick Costolo]

Right. Somebody picked this guy and he's going out and doing big public interviews on both. The right. He was on the Tucker Carlson thing. You've got the right that really doesn't want this thing to be built. Progressives and others who are like, you know, it's gonna do this to the environment and it's gonna not. It's really not gonna create a bunch of jobs. It's gonna be just this huge problem in Utah. And he's not prepared for these interviews. I mean, the Tucker Carlson interview was like, not dissimilar. That Ted Cruz Tucker Carlson interview, he just got crushed, annihilated. So I think there's actually gonna be a growing. There is a growing backlash against. Hey, not in my backyard. On these data centers. And we'll see. I mean, the commute has to come from somewhere and these things have to get built. And that's going to be. That's a real problem for these companies. Should that become a. This is like the only thing I can think of that unites the right and the left in the country right now is I don't want you to build one of these things in my backyard.

[Alex Kantrutz]

Yeah. Recent Gallup poll said 7 out of 10Americans don't want them.

[Dick Costolo]

The other three people don't know what. Yeah, the other three people aren't. You haven't seen what one looks like.

[Alex Kantrutz]

It's probably the other three got a check in the mail or something like that. Because they're widely unpopular. If you give a commencement speech and you say anything about AI, they'll boo you out of the stadium. Like we've seen recently with Eric Schmidt. So that could be a real. The idea that there could be moratoriums. There was one that was proposed in Maine that got vetoed by the governor, but it's being brought up by national politicians. The idea that moratoriums could happen, maybe not tomorrow, but it's going to be on the ballot in 2028. There are going to be pro moratorium candidates.

[Dick Costolo]

So the interesting thing about all this is because you've got. I mean, what has Silicon Valley spent the last two weeks gossiping about? Elon, Sam Brockman, Brockman diaries. I'm sure he regrets having a diary, but.

[Alex Kantrutz]

But you don't have a diary, do you?

[Dick Costolo]

I don't have a diary. I had one in Bern. No, I don't have a diary. While these guys have been like, I know you are, but what am I in court? The real challenge is they should be helping Americans understand this is why it's important we win. Here's what happens if we don't build these data. It's not a hard. It's challenging. It's not the most difficult challenge in the world. If we don't do these things, it's a fairly straightforward story. We don't do these things, China wins. If China wins, we lose. If we're the follower, we don't get to vote on a lot of things happening or not happening. They're gonna tell us whether that happens or doesn't happen. And they're not telling that story right now to people.

[Alex Kantrutz]

The China thing can be too abstract for, let's say, a college student who's like, I don't know if I'm gonna have a job.

[Dick Costolo]

I get it, man.

[Alex Kantrutz]

If I was sitting, I get it.

[Dick Costolo]

But you at least have to.

[Alex Kantrutz]

Ariz. University of Arizona and Eric Schmidt told me about AI, and I didn't have a job lined up coming out of college. I would be booing. I mean, I didn't have a job coming out of school as it was when I graduated. And if I heard anything like that, oh, man, I'd be ready to boo.

[Dick Costolo]

Yeah, yeah. They're just, you better start telling the story. And there's no time like the present. Like you haven't been telling it in the past. And again, Americans perception of these guys is they're like bickering about who's gonna be the more rich in court. And I know you were name calling and Et cetera. And that coupled with now you wanna go build this thing next to my house is a bad look. And so they just need to be a lot more focused on the external narrative about this is why this is important to the future of our society. And it's not happening at all right now.

[Alex Kantrutz]

So let me challenge the economic benefit part of this and see what you think. So another place this could go wrong is are these companies going to create enough benefit for others using them? This is. Chamath had an interesting tweet. He said.

[Dick Costolo]

Wait, Chamath had an interesting tweet?

[Alex Kantrutz]

Yeah, I like this one.

[Dick Costolo]

Well, I guess they're all super interesting.

[Alex Kantrutz]

Let me read this. In an early meeting at Facebook, when I was describing the goals of Facebook platform, an area I oversaw, Bill Gates. Wait a minute. Bill Gates yelled at me, wait a minute.

[Dick Costolo]

You gotta love comma. An area I oversaw.

[Alex Kantrutz]

That's right. Yeah. Okay. He said his quote has stuck with me to this day. This isn't a platform. A platform is where the collective sum of revenues of the participants exceeds those of the platform itself.

[Dick Costolo]

Yeah.

[Alex Kantrutz]

So the platform is something that's so useful that the companies that use you make more money than you make. Yeah, I think that's a good definition.

[Dick Costolo]

Yeah.

[Alex Kantrutz]

There's a. The article in the information anthropic and OpenAI's share of AI startup revenue rises to 89%. That's not a platform according to that definition.

[Dick Costolo]

Yeah. Correct. I agree. Not wrong. But that doesn't mean they won't be able to be wildly successful. If you're increasing the productivity of every Fortune 500 company and beyond by not just 10%, 20%, but orders of magnitude, that's an extraordinary amount of value.

[Alex Kantrutz]

Would we have seen a corresponding increase in earnings?

[Dick Costolo]

Well, we'll see. I mean, again, if you look at six months ago and you tried to foot out, hey, we're not going to need all this compute. And hey, these companies are never going to be able to be profitable. You would have been right if that continued to be the trajectory. Trajectory. And then along comes agent decoding and up everything goes. So we'll see. One can easily imagine there are two or three or four more of those unlocks that we haven't seen yet that are coming.

[Alex Kantrutz]

Yeah. Could it just be that that's simply been applied to coding work and it can start working for all different types of work.

[Dick Costolo]

Sure.

[Alex Kantrutz]

Which is what they want. Okay, one last thing to run by you and then we're going to take a break. We had one of our commenters talk about the fact that Microsoft had has pulled back a little bit from OpenAI and Apple has not participated in this moment. They said Microsoft and Apple come from real innovations and use cases. Executing LLMs is expensive, risky trash for grifters and they know it. There is no paradigm shift without Apple and Microsoft on board, so why should they take the risks of building these models driven by stolen data? This stuff is toxic and they know.

[Dick Costolo]

Could you find someone who has a stronger opinion and is less equivocal in their commentary? Let's see. It's unclear whether that was a choice Apple made or an inability to do whatever they needed to be doing. I found it. It's surprising how Siri or iMessage, for example, have been so impossibly slow to keep pace with what appear to be things that AI startups with 10 or 12 people have been extraordinarily successful at, like text to speech or speech to text granola, for example, does a 100 times better job of interpreting what I'm saying than Siri does, which seems, I would imagine, has orders of magnitude more people and resources focused on it. So I don't think it's that Apple has seen that what OpenAI and Anthropic are doing is grifting. I don't think that that's the case at all. And I think Microsoft pulling back from the OpenAI relationship probably has more to do with Satya's understanding of the dynamics that are going on inside OpenAI and with the relationship between him and OpenAI and maybe his perception of what he believed to be true and what is actually true, and his understanding of where he wants to take Microsoft.

[Alex Kantrutz]

Yeah, no, I think that's a good perspective. Hey, I love our listeners. We'd love to give you guys an opportunity to come in and come in.

[Dick Costolo]

Of course. I have nothing against that listener. I was just making a joke about the clear opinion he had that came through.

[Alex Kantrutz]

All right, let's take a break. When we come back, you ran Twitter. I want to talk about Meta. And then there's also this really interesting thing that's going on, this concept of a permanent underclass that's emerging because there is. There is going to be this sort of distinction between those that have won from AI and those that haven't. So let's cover that right after this. Look, if you have a kid in school right now, you know the drill. What you take 20 minutes of homework, ends up taking two hours and usually ends in tears. And every good tutor, well, they're fully booked for months. This episode is brought to you by Brainly. Brainly is an AI powered personal tutor built by educators, not a general purpose chatbots. It doesn't just give your kid the answer, it walks them through step by step explanations so they actually understand the material. It learns how your child learns, diagnoses when they're struggling, and builds a personalized learning path in under three minutes. Available 24 7. There's no scheduling headaches and it's just a fraction of the cost of a private tutor. Finals are coming. Build your teen's study plan now. It only takes minutes. Go to brainly.com bigtech to get 50% off your first Brainly subscription with my Code Big Tech that's B R A I n l y.com BigTech this episode is brought to you by True Diagnostic. I've been trying to get more intentional about my health lately. Not just how I feel day to day, but what's actually going on under the hood. That's why I checked out True Diagnostic. They offer at home tests that measure your biological age, not just how old you are, but how your body is aging on a cellular level. Their True Age test looks at things like your pace of aging, organ system health, and even risk factors tied to lifestyle, giving you real data to act on. What I like is that it's not guesswork. You can track changes over time and see how things like sleep, diet or exercise are actually impacted, impacting your body. And taking the test at home was so easy. If you're serious about optimizing your health and longevity, this is a really powerful tool right now. Big Technology Podcast listeners can get 20 off at truediagnostic.com using code Big Tech at checkout. That's truediagnostic.com and use Big Tech for 20 off today. Choose True Age, TrueHealth or the Combo Kit as a one time purchase or subscription. Bitcoin has been part of the conversation for years now, but actually doing something with it has always felt more complicated than it should be. Where do you even start if you've been curious about using Bitcoin but haven't made the jump yet? Cash App Makes it easy when you buy Bitcoin on Cash App, they hold real Bitcoin for you one to one and you can withdraw it anytime. No extra steps or restrictions. You just access and control it when you need it for a limited time. New customers can get $10 added to their balance. Just use code CASHAPP10 when you sign up. And don't forget this part. Send at least $5 to a friend in the first two weeks. Terms apply. CashApp is a financial services platform, not a bank. Banking services provided by Cash App's banking partners. Bitcoin services provided by blocking branches. For additional information, see the disclosures at Cash App Legal podcast and we're back here on Big Technology podcast with former Twitty Twitty, former Twitter CEO DeCostello. Let's talk a little bit about Meta, which was your number one competitor when you were working on Twitter.

[Dick Costolo]

Number one, number two and number three competitor.

[Alex Kantrutz]

I remember Meta and Twitter didn't like each other so much that when Meta built a trending tab, a short lived trending tab on its news feed, whenever there was a story they picked up from Twitter, they would write social media. People are talking about this on social media.

[Dick Costolo]

Oh, I didn't know that. That's very good.

[Alex Kantrutz]

So. Because they clearly saw you as a competitor. But right now it's kind of a rough moment. At Meta, they just went through or they're in the process of going through some large layoffs. Their AI models are not state of the art. They don't have a cloud code or Codex equivalent. In fact, the consumer use case for AI hasn't really been correct and employees are starting to question whether it's worth working there anymore. I'm just going to read one employee's comments in the SF standards. From the outside, there's massive negative sentiment and there's certainly something there, but the pain of working here is not very well understood. It's this grand calculus of what it costs to live in the Bay Area and what personal sacrifices are you're willing to make and what you're willing to do for money. On the one hand, I feel massively privileged and lucky to work at a place like this. On the other hand, I'm like, where is my line? What do you make of those comments?

[Dick Costolo]

I mean, there are always people who are. There are always people inside the company who are. It's fine, but I like it. I don't love it. Bob's my manager's mean to me. I don't know. It's one person's sentiment. So it's hard to know what to make about that comment. What I would say specifically about Meta is Mark is extraordinarily sharp and a strategic thinker. And the thing that I've been surprised about is the little bit of the death by a thousand cuts on the layoffs. There's a riff and now there's another if. And now there's another reduction force. Sorry, reduction force. Yes, layoffs and that's like, that's what drive. If you do it once and then you get up in front of the company, you're like, here's why this is happening, you know, and blah, blah, blah. And we're going here. And so now we're going to all wish our colleagues the best. And the rest of us have to, you know, buckle down and focus on. People will like, okay, I get it. You know, they might be sad that Jim is leaving, but then they kind of are like, okay, like, I get it. We had to do that. Fine. The doing it a second and then a third and then a fourth time is like, okay. You start to be like, okay, this is obviously not the last time. It's going to happen again. It might be me. And then that starts to be massively anxiety inducing across the company. And people just start to look around and like, who's next? So that's just been. And each time in these layoffs, it's been a. A slightly different version of the. Because of blah. We need to xyz. And at some point you just start to realize, like, yeah, you said that one. That was the same reason as the second riff. And then the third riff was. The third layoff was a little bit different narrative. Now we're going back to the second layoff narrative, and people just start to go, okay, we're just being. We're just being spun.

[Alex Kantrutz]

Yeah. I mean, I worked in newsrooms for eight years, so every January there was a difficult decisions subject line.

[Dick Costolo]

Yeah, the difficult decisions. Yeah.

[Alex Kantrutz]

And I was like, I can't deal with this anymore. That's why I just decided to go out on my own.

[Dick Costolo]

There's nothing people hate more in an organization than feeling like they're being spun. And that's when they start to kind of turn on management. Like, you know, you can get up to. You can make mistakes and get up in front of them and go, man, I really screwed this up. Or we really screwed this up and we should have done X and we didn't. It's my fault. I'm a, you know, blah, blah, blah, I'm fessing up. And they'll kind of be okay. You can do that a few. You can do that a couple. A couple times a year and be like, people are like, okay, I get it, we all make mistakes. But when you start to spin people and the reason for this is because of our, like. And you said that, you know, same thing nine months ago, whatever, then they're like, it drives people crazy. You think people are fooled and they're not fooled.

[Alex Kantrutz]

And I'm so glad to have you here because, man, Dick, I feel like we could speak every week because there's so much that I covered social media, I cover AI. You worked, you ran social media company, you're investing in AI. So it's unfortunate we only have like 12 minutes left. I feel like we have to do this again.

[Dick Costolo]

I'll just have to. Ben Horowitz has this great shout out to Ben Horowitz. He ran this management class when he was running his loud cloud and he had this great. And I asked him for his outline of it because I wrote a management class and I did at Twitter. And I remember he was like, your job as a leader is not to be, is not to have all the answers. If you try to spin people and you think that I just said this, if you try to spin your team and they know you're spinning them, that's the most demoralizing thing you can do. Don't try to con me. And so there's got to be. That's the problem with these layoffs and then layoffs and then layoffs. And now we're doing it again. But this is the reason why. And people just are like, okay. They turn off.

[Alex Kantrutz]

No, I'm with you. And okay, so here's where I was going with my wind up. The interesting thing about meta is that is it really like a social network anymore or is it like Reels and an AI project? And is Twitter a social network anymore or social media? Or is it like. I mean, it does still have text posts, but it's kind of like Reels and it's combined with that side AI project.

[Dick Costolo]

I think Twitter's text posts have been extraordinarily resilient. It's like this ability to survive the changes in the way people use TikTok and Reels and social media. I do think Meta is reels in an AI project.

[Alex Kantrutz]

Let me just tell you though, Twitter, I just went to my home feed, okay? First post, image. Second post, video. Third post, video. Fourth post, text only. Fifth post, video. Some guy beating the shit out of someone who tried to take his bike. Six posts.

[Dick Costolo]

Alex, you've got a weird. You've got a. The algorithm wants you to look at the algorithm.

[Alex Kantrutz]

Don't.

[Dick Costolo]

Algorithm. Minor, minor.

[Alex Kantrutz]

Text. All right, next text post. Next image. Go ahead.

[Dick Costolo]

Anyway, I just think I'll say this about. I think you're asking me about Twitter. I think Twitter's usefulness as a text based medium, despite what you're seeing in your Home Feed has been extraordinary. And I think I would actually credit. I liked knowing a little bit about. Knowing a little bit, a tiny little bit about what goes on inside the company. I would credit a lot of the recent success and I hope I'm actually hurting this person by crediting him instead of the ownership. But I think Nikita Baier as the head of. And he's the product. I think he's the only product manager there now. And loads and loads of engineers, or sorry, some engineers and a designer. Sorry, don't mean to insult Ilan by saying loads of engineers, some engineers. But Nikita has an extraordinary instinct for product that I think only. I would say Kevin Systrom and maybe Evan Spiegel with his initial instinct for Snapchat stories are comparable. I just think Nikita's got an almost remarkable instinct for. No, no, no, this is going to be what helps grow the product, even though nobody else is talking about that right now. We're going to go do this. And he's right more often than he's not. And it's impressive.

[Alex Kantrutz]

Yeah, I mean, I just remember I sort of foreshadowed this at the beginning of the episode. So I moved to San Francisco in May 2015, and I think I had my first week on the job. Second week on the job. You stepped down.

[Dick Costolo]

Yeah, June 10th.

[Alex Kantrutz]

And this was. Yeah. And this was my second week there. And this was Twitter and Facebook. That was basically my beat. And the whole newsroom stopped. We're like, this is big, big news.

[Dick Costolo]

Holy shit.

[Alex Kantrutz]

And my editor looked around and he's like, who's writing this? I guess I will. And then the next day we spoke about the fact that you were leaving and Jack was gonna become the interim CEO. My favorite full time CEO. And that was like, it was a definite welcome to Silicon Valley moment. Just like, oh, things haven't really slowed since then. Go ahead.

[Dick Costolo]

Your favorite, not favorite. A moment I remember vividly from that is we have all these alerts on our devices internally around the platform, obviously. And I got off stage after telling the company, hey, I'm stepping down. Jack's going to take over as interim CEO. I've told this story before, but I get off stage and my phone and super emotional phone bings. Elon Musk has unfollowed you on Twitter. Like, oh, man, four seconds.

[Alex Kantrutz]

I don't know, you might have dodged a bullet there.

[Dick Costolo]

You never know anyway.

[Alex Kantrutz]

Yeah,

[Dick Costolo]

I think it was more like looks and sees the news, like, don't need to follow this idiot anymore.

[Alex Kantrutz]

Well, does he follow you now?

[Dick Costolo]

I Don't believe so. But I haven't looked at.

[Alex Kantrutz]

No, I always. I mean, I always liked looking at your tweets. So, I mean, I think we could do another full episode talking about the Twitter era and the transformation of that product. And I actually thought, you know, maybe we should have even started there. But I'm glad we went with aiip. But it has been a fascinating. I mean, when I was covering it, I covered, like, every little tweak to the feed. I broke the news that it was going to be algorithmic, and. And that was a very intense time because Jack initially denied it, and my DMs were like, you're a liar. Your credibility's gone forever. And then on Tuesday, I broke it on Friday. On Tuesday, they're like, we're going algorithmic. And clearly it's algorithmic. But I've forgiven Jack for that. I hope we're all good at this point. But not just a crazy, crazy product. And clearly, this whole Twitter's dead thing, when you were CEO, you saw it, but after you left, every journalist writes a Twitter stead story. I never wrote it, and I never will, because for whatever reason, the format works.

[Dick Costolo]

That's what I was saying. It's remarkably resilient. The day I became CEO, I walked up to the head of communications, Gabriel Stricker, and I said, hey, at the time, back in the day, there were business magazines, Business 2.0 and Bloomberg, I think, had had dead roll. Dead birds, dead Twitter birds on their cover. The past year, the death of Twitter. This is 2010 death of Twitter across media. I just went up to the head of comms. Gabriel was like, hey, your goal for the next year is no dead birds on many of the major media platforms. Low bar. The company's not dying. It just is. It's a constant and it never goes away. It's crazy.

[Alex Kantrutz]

Well, I would say that. So the business of Twitter has died to a degree, but the product remains vital.

[Dick Costolo]

I mean, people can crazy.

[Alex Kantrutz]

It's a sex company. To bring it full circle.

[Dick Costolo]

Yeah, people can dish on advertising, diss and dish on advertising all they want, but advertising is undefeated as a business model. What you end up finding is that the average revenue per user is just much, much higher than you can get from a premium subscription.

[Alex Kantrutz]

Yeah. So maybe going to premium subscription and telling advertisers to F themselves isn't the best business strategy.

[Dick Costolo]

It never worked for me, telling my customers to go F themselves. But, you know, again, teach their own. Yeah, teach their own.

[Alex Kantrutz]

Okay, let's end here. You know we were texting. You sent me this post. The vibes in SF feel pretty frantic right now. The divide in outcomes is the worst I've ever seen. Over the last five years, a group of 10,000 people about at Anthropic OpenAI XAI Nvidia Meta TBD have hit retirement wealth above $20 million. Everyone else outside the group feels like they can work their well paying, but less than $500,000 job for their whole life and never get there. Worse yet, layoffs are in full swing. Many software engineers feel like their life skill is no longer useful. The day to day role of most jobs has changed overnight with AI pointing at this permanent underclass. I mean, I guess it's tough to feel bad for someone who's making less than $500,000 if it's like 499. But it is interesting what you're seeing in Silicon Valley today with these lottery ticket winners at the big AI labs and everyone else.

[Dick Costolo]

I don't know, man. I'll say two things about it. Living a life of comparison. It doesn't matter where you are in that stack. It's a losing strategy. It's just a life of misery because

[Alex Kantrutz]

you're comparing or you can't buy a house.

[Dick Costolo]

No, just no. Just like I'm here and this person. There's no winning that ever.

[Alex Kantrutz]

That's right.

[Dick Costolo]

By the way, you can be, look, Elon has got more money. Elon's gonna be the first trillionaire. Is he talking about like, like what's he talking about on Twitter? Sam's a bad guy. You don't get like, man, if I were a trillionaire, life would be great too. You get, I'm going to that guy's a bad guy and I'm going to go get this person. There's a great old Winston Churchill quote that I'm going to botch, but it's something like, like functional expertise, while great, is no match for a broad appreciation for the humanities and the human condition in all its joy and suffering because you just develop this immense understanding of. It looks like things are great for that guy. They can be just as horrible for that guy. It looks like things are horrible for her. Actually, some things about her life are better than anything about yours. And literature is filled with these, hey man, stop chasing ghosts, stop looking, stop living a life of comparison and chasing ghosts. And this phantom thing you think you're supposed to have. Virginia Woolf's to the Lighthouse, Great expectations at Dickens. And I just think there are too many people in Silicon Valley who Have functional expertise and not a broad appreciation for the joys and sorrows that you grow to appreciate. Appreciate in the humanities and therefore live in this vortex of this tunnel vision of they got that. And I would have that if I went to Anthropic and I didn't go to Anthropic, and that sucks. The person Anthropic is like, was gonna get this house, but this jerk paid 15 million for the $8 million house, and now I don't have it. And that sucks. It's just. There's no winning.

[Alex Kantrutz]

That's right.

[Dick Costolo]

Yeah.

[Alex Kantrutz]

Yeah. I mean, I would say I get

[Dick Costolo]

that it's worse for the guy that didn't go to Anthropic and have a billion dollars. I get that.

[Alex Kantrutz]

I'm not taking the side of someone saying life is miserable on that front. I do get the person who's like, it's crazy, like, making a couple hundred thousand dollars. And because these OpenAI and anthropic folks have gotten this windfall, they've taken the housing supply. Rent has gone up here in New York, Rent is like, the craziest it's ever been. But that being said, you can still have a pretty nice life with that type of.

[Dick Costolo]

Again, writ large across the country. It goes back to the Darios and the Sams, et cetera, et cetera. Need to start painting a picture to the country about why this is great for us or a lot of these data centers aren't going to get built.

[Alex Kantrutz]

Yeah. All right, Dick, you have to come back. This was so great.

[Dick Costolo]

Yeah, thanks for having me.

[Alex Kantrutz]

The fastest move an hour I've ever done on the show.

[Dick Costolo]

So thank you.

[Alex Kantrutz]

Thank you for being here.

[Dick Costolo]

Yeah. Happy to do it.

[Alex Kantrutz]

All right, all right, check out. Let's plug the show. Check out this Nick, Dick and Paul show, please, on your podcast app of choice. And we always thank you for being here with us. We'll see you next time on big technology Podcast.

[Dick Costolo]

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