The Biggest Merger Ever | Ep. 050 Lemonade Stand 🍋

Summary

Lemonade Stand Ep. 050: “The Biggest Merger Ever”

Podcast by Aiden, Atrioc, and DougDoug | Released Feb 18, 2026

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Episode Overview

This episode dives into what might be the largest private tech merger in history: Elon Musk’s SpaceX acquiring X.ai (and with it, Twitter/X), rolling them up into an “everything company” that blends AI, social media, and space ambitions. The conversation unpacks the business logic (or lack thereof), broader implications for the tech industry, financial speculation and bubbles, plus real talk on the impact of AI—from layoffs to corporate hype cycles. The back half of the episode covers the state of the gaming industry, why AAA studios are struggling, and wraps with news of the US government shutdown, the ongoing “AI wars” in Super Bowl ads, and societal consequences from rapid AI deployment.

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1. The Mega-Merger: SpaceX, X.ai, and Twitter/X

What Happened? [03:02 - 05:48]

• Elon Musk’s AI company X.ai (which bought Twitter) is now being merged/bought by SpaceX.
  • “Now you’ve combined a money losing AI company with a money losing social media platform.” — Doug [04:44]
• This move is touted as creating a technological powerhouse but is causing confusion for investors and the public.

The Core Business Question

• SpaceX is perceived as Musk’s “real” and relatively successful business (revenue from Starlink, government contracts, rocket launches) [06:09]
• Investors are upset: merger dilutes SpaceX with the “tumor” of Grok (AI chatbot) and Twitter, seen as liabilities rather than assets. [07:38]
  • “Now you own this weird appendage on a beautiful SpaceX.” — Doug [07:38]

Musk’s Rationale for the Merger

• Claim: To combine AI and space—AI data centers in space.
• Pitch: Instead of building power-hungry data centers on Earth (with regulatory issues and energy limits), move them to orbit for always-on solar power. [09:10]
  • “What if you just took data centers and you moved them into space?” — Mike [09:19]
• Google has a similar “moonshot” called Project Suncatcher, targeting commercial viability for orbital data centers by 2035. [11:41]
• Practical obstacles: massive expense, maintenance, cooling in space, radiation, satellite communication complexity. [10:47-12:11]

How Realistic is This? [13:15+]

• Even Google admits it’s “incredibly technically challenging.” [12:11]
• Musk is notorious for missing timelines.
  • “Translate an Elon 36 months into real time—that’s probably about 10 years, 40 years.” — Aiden [11:50]
• Doug and Mike see it more as a PR/hype move than a practical path to viability.

The REAL Strategy? [15:31+]

• Theory: This rollup is to “story-tell” for investors before a SpaceX IPO at a $1.5 trillion valuation. Elon’s ultimate plan: Merge all his companies (maybe including Tesla) to conveniently hit performance thresholds for his own compensation. [16:22-17:25]
  • “He will get people and the market gets excited about the future he paints.” — Doug [39:58]

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2. SpaceX, Starlink, and the Modern Space Race

How Much of a Lead Does SpaceX Have? [31:59 – 38:21]

• SpaceX is dramatically outpacing competitors like Blue Origin, Rocket Lab, and Lockheed Martin:
  • 165 launches in 2025 vs. 2 for Blue Origin, 21 for Rocket Lab [33:01-33:44]
  • 9,600 satellites in orbit (vs. 200 for Amazon’s Leo project) [34:04]
  • Only commercial provider of highly-reusable rockets
• Starlink is key: massive communications revenue potential by challenging ground-based ISPs.
  • “If you imagine Starlink and SpaceX can eat up telecoms, you start to see why that $1 trillion valuation is maybe justifiable.” — Mike [29:25]

But Will SpaceX Keep Its Lead? [36:07 – 37:34]

• Doug points to Tesla’s lost lead in EVs as a cautionary tale.
• Competitive threats from China (Xiaomi, etc).
• Key question: can SpaceX turn innovation into durable, market-dominating, profitable business?

The Broader Value of the Space Industry [24:33, 26:55, 67:11]

• Non-sci-fi: satellite comms (Starlink), GPS, weather forecasting, material science breakthroughs—all direct space tech spinoffs.
• Starlink seen as a democratizing tool (e.g., helping Iranians bypass state internet blocks) [28:04]

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3. AI, Hype, and the Automation Paradox

AI Data Centers in Space: Genius or Hype? [09:47 – 14:04; 51:23 – 53:08]

• The Hype: AI data centers in orbit are being pitched as the next logical step in both tech and business. Both Google and Musk are hyping it.
• The Reality: Mike and Doug—backed by examples from Google’s own project plans, and from technical experts—argue this is still “moonshot” territory, and huge technical hurdles remain.
  • “The amount of solar panels you need… is absurd… The radiation breaks GPUs… To do in any realistic timeline feels astronomical, literally and figuratively.” — Doug [21:50]

The AI Arms Race: Real Spending, Real Layoffs

• Google ($185B), Amazon ($200B), OpenAI, X.ai—all burning billions to win the AI compute/speed race [14:04]
• Musk’s companies much less profitable: “Amazon makes $95 billion in profit. Alphabet $152B. Tesla makes 7… SpaceX maybe 6-7.” — Doug
• The market is rewarding AI narrative over actual results.

The Layoff Wave and Entry-Level Jobpocalypse [133:18 – 140:22]

• Wall Street and companies are laying off personnel as soon as it looks like AI could replace jobs, even if the quality isn’t there [137:31+].
  • “Wall Street has no patience… The fastest financial results is by cutting jobs and replacing those with automation, even if it’s not perfect.” — via Josh Tyrangiel [136:33]

True AI Capabilities: Impressive... and Overhyped?

• “Vibe coding” phenomenon: hobbyists and professionals can now whip up tools with a prompt that rivals expensive software [115:05]
  • “Most surreal tech experience I’ve ever had. And it’s all moving so much faster than I expected.” — Rutger Bregman [120:53]
• BUT: Current-gen LLMs still fail at critical thinking, creativity, and reliability in high-stakes environments (security, large codebases, etc).
  • “It gets 90% of the way, but that 10% is missing.” — Mike’s anonymous programmer friend [124:40]
  • “If you’re already doing the wrong things, AI will help you dig a deeper hole, faster.” [127:02]

The Creativity Gap and Deskilling

• Deskilling: over-reliance causes professionals to lose edge/understanding. [126:05]
• AI’s void of creativity compared to human output in code, writing, design [131:27].
• Self-reinforcing—senior pros risk getting “dumber” as they trust AI for rote work [130:10, 130:25]

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4. Gaming Industry: AAA Downturn, Indie Boom

State of AAA Games [82:21 – 90:16; 154:33 – 160:47]

• Trend: AAA studios are producing more hero-shooter/flavor-of-the-month games, many flopping (High Guard, Concord, Riot’s 2XKO, etc.)
• Indie games (Peak, Another Crab’s Treasure, Mugenics) are thriving—faster turnaround, more creativity, less financial risk.
  • “Creative stuff is breaking through at a greater level than ever before.” — Doug [156:20]
• Market shifts: Online persistent games (Fortnite, League, etc.) now “Death Stars”—dominant, money-generating IPs that are nearly impossible to unseat.
  • “If you crack through, it’s a cash geyser… But it’s so difficult because you’re competing against the best with infinite resources and time.” — Doug [160:17]

Why the Failures? [89:04 – 90:16]

• AAA games take too long, struggle to adapt, face existing mega-communities.
• New titles can’t compete with entrenched habits and friend groups.
  • “You’re competing with games people have played for decades… Your game really has to peel people away from that.” — Aiden [90:48]

Indie Advantage & Esports Commentary [162:01 – 164:28]

• Indie studios enjoy creative agility, smaller budgets, and personal fulfillment.
• Esports production: big production houses bogged down by client/advertiser restrictions; smaller teams gush creativity [161:30]
  • “The freedom to design that league the way I wanted was the most fun I've had in esports.” — Aiden [163:58]

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5. Government Shutdown & Political Deadlock

What’s Actually Happening [97:20 – 104:13 / 164:57 – 172:14]

• Partial US government shutdown: Department of Homeland Security (DHS) loses funding—except ICE, which controversially remains funded. [97:20, 166:01]
• Political deadlock: Democrats making demands about ICE accountability (no masks, clear identification, etc.). Doug and Aiden debate whether this symbolic fight is worth the pain given gridlocked Congress.
  • “People are expecting a miracle from a party that has nothing. They don’t have the House, they don’t have the Senate.” — Doug [103:06]
  • “It feels like we’re going for another shutdown strategy when a month ago, you caved.” — Aiden [103:48]
• Frustration at the limits of incremental change and lack of real structural reform.

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6. “AI Wars” On Super Bowl Sunday [105:06 – 114:13]

• Huge AI ad spends: OpenAI, Google, Meta, Anthropic crowding Super Bowl prime time with (sometimes badly-written or confusing) ads. [105:06]
• Anthropic attacks OpenAI for introducing ads into ChatGPT, positions itself as “the AI without ads”—a move that may have backfired, as some viewers misinterpreted the satire or missed the point.
  • “Marketing research showed that most people just thought, ‘oh, AI is creepy.’” — Doug [106:30]
• OpenAI rolls out real ads post-Super Bowl; Altman responds in tone-policing style on social.
• “There is a laughing emoji in the PR statement. So I’m pretty sure Grok wrote this.” — Doug [22:28]

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7. Lightning Round: Notable Quotes & Fun Moments

• “Now you also have something that can deliver porn and hate speech industrial scale—like in a rural area, now you can get hate speech.” — Doug and Mike joke about Starlink’s unintended features [07:52]
• “If you love space, I don’t see why you wouldn’t like an app that has everything on it.” — Aiden [07:38]
• “Aliens’ first contact with us will be through Grok and they’ll hate us!” — Doug [03:02]
• [On layoffs & AI] “It’s going to destroy jobs at a much faster rate than anybody expects… It feels like a catastrophe is incoming, dude.” — Mike [140:16]
• [On the AI-coding revolution] “I have multiple what the fuck moments every week now… It’s not helping anyone to keep dismissing the greatest technological revolution of our time.” — Rutger Bregman [120:53]
• “That’s a smile that can’t lie, dude, I would trust him.” (on Bernie Madoff sweater) — Mike [211:42]
• “If you crack through, you are hitting a cash geyser… But it’s so difficult because you’re competing against the best of the best with infinite resources and time. I think too many Triple A studios swung at the King and missed.” — Doug [160:17]

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Key Timestamps

| Segment | Timeframe | |----------------------------|-------------| | The X.ai + SpaceX Merger | 03:02–17:25 | | Data Centers in Space | 09:10–12:11 | | Why SpaceX’s Lead Matters | 31:59–38:21 | | Musk’s “Everything Company”| 16:22–17:25 | | Gaming: AAA vs Indie | 82:21–92:24, 154:33–164:28 | | Government Shutdown | 97:20–104:13, 164:57–172:14 | | AI Super Bowl Ads | 105:06–114:13 | | Layoffs, Financial Market | 133:18–140:22 | | Deskilling and AI Limits | 126:05–131:27 | | Outro: Merch, Patreon | 210:22–211:56 |

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Final Thoughts

The gang agrees: Musk’s mega-merger is likely more about hype and financial engineering than true business synergies, with the PR of “AI + Space” mostly serving as a story to juice up SpaceX’s pending IPO.

Meanwhile, they’re sounding alarm bells: AI is progressing fast—sometimes genuinely disruptive, always hyped—creating massive pressure to cut jobs and automate, even when the tech isn’t fully ready. The AI rush is deskilling knowledge work, vaporizing junior roles, and possibly undermining the very creativity and judgment that made these fields valuable.

In gaming, as elsewhere, the story is disruption: huge players are losing ground to creative upstarts, and old business models are breaking down.

Closing Words

“Storytelling has become the basis of valuation in America like never before. Elon is just the furthest extreme. Whether it materializes… doesn’t seem to matter so far.” — Doug [40:12]

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For more, including bonus content and the infamous Bernie Madoff “Never Stop Hustling” sweater, check out Lemonade Stand on Patreon and the merch shop.

Transcript

[Doug]

Support for Lemonade Stand comes from Adobe.

[Aiden]

I'm so frustrated.

[Doug]

Is it about PDFs?

[Aiden]

You just keep sending me PDFs and I. I do not have a software to change them. You've.

[Doug]

You've been spamming MAD subject line.

[Mike]

Hahaha. Just try to change this.

[Doug]

Messing with him.

[Aiden]

And then I found Adobe Acrobat Studio and I started. I started editing the PDFs you send me and changing them up into what I want. And if you want to change PDFs like me, you can learn [e-mail] do that with Agrobat. So I wanted to trade some stocks.

[Doug]

Dumb idea.

[Aiden]

Already blessed. I flew to. I flew to New York to the stock exchange and I just. I just yelled outside the building because I thought that's what they did on tv.

[Mike]

You hold up a piece of paper.

[Aiden]

So it didn't work. Yeah, but where would I. So how do I do it?

[Doug]

I don't think you should trade anything. I think you will be financially ruined. Your level of intelligence. You could go to tastytrade.com at the very least you could check out their tutorials where you can learn some of the corporate jargon.

[Aiden]

I could go to tastytrade.com lemonade today.

[Doug]

You could do that today.

[Mike]

Tastytrade Inc. Is a registered broker, dealer and member of finra, NFA and sipc.

[Doug]

Welcome to the lemonade stand. First card. Why is Aiden so picky and needy and touchy on my cards?

[Mike]

I wrote that one.

[Doug]

Yeah, it's. Let's. I think it needs to be discussed. Let's get the whole roundtable going.

[Aiden]

I reached for it because. Why did you reach for it? Out of the corner of my eyes, I swear to God. That first card says Squeaks. Which who is? Just someone I'm not prepared to talk about.

[Mike]

Ladies and gentlemen, today's main topic.

[Aiden]

Squeaks.

[Mike]

Elon Musk is purchasing XAI through his company.

[Doug]

Squeaks?

[Mike]

Yes.

[Doug]

He's merging Squeaks with Space X. Wow. Bringing sort of. Squeaks is funny energy and the ability to launch.

[Mike]

There's a quote here. I was considering Aiden, but Squeaks simply outperforms him on Mirage every time. That's not true.

[Aiden]

That's not true of a higher rank. Dude, I was a couple. I was last week at least.

[Doug]

That's not what Elon's saying.

[Aiden]

Elon doesn't know about gaming.

[Doug]

He doesn't know about. Well, we'll find out. I. We talk about. We got a lot of topics today, but the big one is that the world's largest merger private merger ever just happened between Xai and SpaceX.

[Mike]

Nice.

[Doug]

Now, you may remember a little story here. Remember Twitter? Little blue bird.

[Aiden]

I remember it, I remember it.

[Doug]

This is a business.

[Mike]

Imagine that. But in space now, yeah, imagine.

[Doug]

Imagine you take that and put that out into space.

[Mike]

Okay, Name all the things you hate about Twitter. Name them.

[Aiden]

Ooh, I hate the. I hate the algorithm and the way that it primarily delivers me slop. Now, instead of things from people I.

[Mike]

Follow, now imagine that. But it's coming to you from space.

[Doug]

Is that changing? Does that make you.

[Mike]

Are you back in? Are we at Grok? Does that change anything?

[Aiden]

If I'm being honest, I'm slightly more intrigued.

[Doug]

I'm worried that our, the aliens first contact with us will be through Grock and they'll hate us. They will not like, Grock is not a likable fellow.

[Mike]

Yeah, it's just a coin flip of like which of the satellites you hit. Is it the International Space Station.

[Doug]

Or Russian up there or Grok or. Oh, there's the bird in space. Anyway, okay, remember Twitter? So Twitter is a company not doing so well. When it was bought, it was like dead even barely, barely staying afloat. Their CEO was part time, he worked at Square most of the time, and then was Jack Dorsey. So Elon buys it and puts a lot of that on debt, a lot of that on a credit card. He gets some Saudi help and he gets whatever. So it's a $44 billion purchase. A lot of it's through debt. He finds out quickly that his new changes to Twitter don't make any money. They're not. They're actually losing all the advertisers. And the ones that try to sell you the check mark, they don't make any.

[Mike]

But I read that viewer hours are up from Elon.

[Doug]

I've seen Elon make a lot of claims. I know for a fact it did not make a profit. And that's because not only did the revenue go down, but they had to pay the debt, the interest on the debt, which is a lot of money every month. So that all added up to being a net negative. And some of the people that helped him invest in that debt, the Saudis, and they were getting kind of mad, but Elon, he bailed them out. He went to his other company, xai, which he also owns, and bought Twitter. XAI buys Twitter. X. I also loses money, but they are bigger and they're easier to attract funding because AI is a cooler buzzword. And maybe Grok is going to do something. I'm not A fucking expert. I don't really, I don't know.

[Aiden]

And at this stage, in a way, Elon has effectively bought Twitter. Twice.

[Doug]

That's what we're getting. Yeah.

[Aiden]

Okay.

[Doug]

At this point, ye. He's bought it. Yeah, Twice. He bought it himself and then he bought it with his other company to bail it out. But now you've combined a money losing company, which is X AI, with a money losing social media platform.

[Mike]

Wrongs make a right.

[Doug]

Yeah.

[Aiden]

So they become positive plan would be.

[Doug]

But it turns out they're losing. I think I have a quote here. $1 billion a month. Xai burns through $1 billion a month. This is after. I'm not gonna do the whole timeline here, but around the time of this article, Xai was trying to fundraise because they're understandably running out of money. You can't spend a billion dollars a month and keep afford to buy all the stuff you need for Grok, all the stuff you need for Twitter, everything. So yeah, you can see right here, they're trying to raise $9.3 billion in debt and equity. Well, it turns out that the market was like, I don't know, like you have to give us pretty high interest rates for that cause you're losing so much money. And so rather than do that, he's like, wait a minute, I got a plan. I got an even bigger company that can raise even more money.

[Mike]

Wait, wait, wait. But surely the third company is profitable, right?

[Aiden]

No, wait, wait, wait, wait, wait, wait. I'm being serious, I'm being serious. Wait, he used. Okay, it has, that has to mean. This is SpaceX.

[Doug]

This is SpaceX.

[Mike]

SpaceX is buying Twitter and OpenAI or excuse me, and Xai.

[Doug]

So, so now this shit sandwich is getting rolled up into what I would say. And I think people who are Elon haters don't give enough credit. SpaceX is a pretty solid company from what I could tell.

[Aiden]

Okay. And that was, that was my question here. Yeah, I, for, for everything that's been talked about for Elon and all these companies that I've heard over the years, I actually thought SpaceX was a company. I thought SpaceX was making money. I thought SpaceX actually had profitable.

[Doug]

They're not profitable to my understanding.

[Mike]

Correct.

[Doug]

But they do make real revenue and theoretically have a path towards being a real business. Like Starlink is a product people like it does makes. That's where the majority of the revenue comes from. Then they have government contracts for like launching rockets and shit. So like yeah, between these things it's like There's a business there. Which is why, by the way, a lot of space X investors, like the hardcore SpaceX only investors, people that like have been in for minute one and don't care about Elon or Tesla or anything else or maybe like Elon, but they're mad about this. This is like diluting because a fourth of the company they now own the based on the way Best Valued is now Grok and Twitter. And like they, they said, they said X AI and Twitter is worth 1/4 of SpaceX when they merged. So that's where the way shares were diluted. So like now you own like this weird tumor, this weird appendage on a beautiful SpaceX they really liked.

[Aiden]

Why if you love space, I don't see why you wouldn't like an app that has everything on it.

[Mike]

That's a good point.

[Doug]

Or like a weird fucking AI that answers questions.

[Aiden]

It's like you have starlink, but now you also have something that can deliver.

[Doug]

Porn and hate speech and hate industrial scale.

[Aiden]

And I.

[Mike]

But like in a rural area now you can get hate speech. Okay, so let me give you, let me give you the pitch. So let Aidan your best guess. What is the business proposition? So, so in, in good faith.

[Doug]

Yeah.

[Aiden]

Yes.

[Mike]

And for example, so Elon just did an interview with Dwarkesh and they talked about why you would do this. So what would be the purpose of having the space company he owns by an AI company? I think the good faith, in terms.

[Aiden]

Of my small brain perspective, I feel like there has to be some sort of alignment with the end goal of the AI that you are training and developing and the needs of the space program that you're building. Like there are advantages of embedding this AI in the satellites that you're putting up as a part of Starlink or the rockets that you're launching or the software that future like space travel that this company is going to do. Is there. There seems to be some sort of technological alignment that is the best case scenario that I could describe.

[Mike]

Okay, here's a different way of putting it. Who's the most valuable company on earth.

[Aiden]

Right now in video?

[Mike]

Right. So what is like if you, what is like the. One of the best businesses you can make right now, AI building a shitload of data centers. But the problem is that that's hard to do on Earth because of things like regulation and human beings needing the energy and the land. Right, Right. So what if you just took the data centers and you move them into space? Aiden? Yeah, that is the pitch. AI data centers in space.

[Aiden]

Okay. And I. I know this sounds ridiculous. I'm sure there's a bunch of people that think this sounds ridiculous. Wait, is this low key a good idea?

[Doug]

No, I don't think so. I think. Okay.

[Aiden]

All right. I think the idea isn't. The idea is you could put a data center into space that is like built or built in with or surrounded by solar panels that give it, like a constant source of power. Like a constant source of power compared to what you could do on Earth and with no ramifications for the environment or people.

[Mike]

Yes, the pro power you can make. There's all these different challenges to having a data center, right? And one of them is energy generation, obviously. So if you put solar panels on a data center and you shoot it into space, you can put it in an orbit that is always facing the sun. So you don't have to deal with the fact that here on Earth, like, you only get sun some of the time. You don't have to deal with things like weather or physical degradation. And the only cost in return is that it's extraordinarily expensive to get it there, to maintain it, and you don't have a way of cooling it easily. Also, the satellites need to talk to each other in like, an extremely complex format. And this, you know, assumes a variety of other things all over the world.

[Doug]

Sometimes you need to update the chips that you sent up there and it's like, incredibly a huge pain in the ass, right?

[Mike]

You have to. The chips are gonna basically maintain themselves without any sort of guidance or oversight. But so here. Okay, here's the counter. As much as this sounds like a crazy Elon thing, Google actually announced a plan to do this in November. So this is like, not sort of. It's not just Elon's wacky idea. This started in November. They called it Project Suncatcher and they've described it as a, you know, in quotes, moonshot, and give it a 10 year timeline of like, we think that in 10 years it'll be cheaper by the mid-2030s to start new data centers. Like launching and operating a data center would become the same price as doing it on Earth. That's their pitch. And they're like, we're going to see if this is even possible and they're going to start to test it. And then Elon went on this podcast like a week or two ago and had a pint of beer and then said, in 36 months, it'll be cheaper to go in space. So it's going to be somewhere in.

[Aiden]

Those guys, in those Translate an Elon 36 months into real time. That's probably about 10 years, 40 years.

[Doug]

He's not Mr. Timeline, bro. Yeah.

[Aiden]

Okay, I can see as soon as you started listening to the downsides, I was like, okay, I can see how this might not be. It might not work great. But the Google. Can you explain what Google's plan is exactly? Like, who are they partnering with or how are they planning to do.

[Mike]

Yeah, they're part. So they're going to start testing stuff in 2027. They're going to partner with Planet, who is another like aerospace company that does satellite imagery. So they're going to work together to try to solve these issues. And they're being very upfront of like, this is extremely technically challenging. This is conceptual. We're going to try to make this work. We see this potentially working on a 10 year timeline. And they listed their own quantum computer and Waymo as an example where they're like, these are previous moonshots we've tried. They took 10 and 15 years respectively. So we're seeing this maybe be possible in the future. And then to kind of like quell a lot of the concern, I pulled out a quote here. Our analysis indicates that this should all be possible with multi channel dense wavelength division multiplexing, DWDM receivers and spatial multiplexing.

[Doug]

You're always talking about spatial multiplexing.

[Mike]

You talk about that on and off.

[Doug]

Like an insane obsession of yours.

[Aiden]

I just don't think that you guys would get it.

[Doug]

Yeah.

[Aiden]

If we dove into it. Probably be tough because it's just you don't have the background that I have at U Dubs Foster School of Business.

[Doug]

I really. That was one of the main things.

[Aiden]

They hammered well in multiplexing. Four, two, three. We just. You get so deep into the sauce with your professor, it's really hard to explain it to people who don't take that class with you. You get.

[Mike]

The students don't even talk, they just multiplex at each other.

[Aiden]

You just multiplex. You spend a lot of. You multiplex. You multiplex with. With somebody else, sometimes sexual.

[Doug]

Okay, well, let me, let me say something.

[Mike]

Okay, look, that, that is what is being stated by Elon of. This is the reason why this is a great fit.

[Doug]

Here's what I'll say. Xai is competing in this AI race with Google, with Amazon, with OpenAI. Yeah, everybody, they're all full steam ahead to get ahead in the AI race.

[Mike]

Wait, I will say real quick, you, you kind of dismiss them as saying they're losing a billion dollars a month. OpenAI is losing 3 to 4 billion dollars of money. So they're actually doing pretty well.

[Doug]

100% actually get to. So can you pull my screen, Perry, or like you show this? Okay, so Google stock just had a little bit of a tumble recently when they announced they're going to be spending $185 billion this year on AI. Absurd amount, but they have a lot of money. Amazon topped them. Pause. They said they're going to spend $200 billion in AI, but again, they have a lot of money. All of these hyperscaling companies are going to, are shooting to the moon about spend on AI. Amazon makes $95 billion in profit. Alphabet makes $152 billion in profit. Tesla makes 7. And it's going down Space X. I don't think it has profit yet, but if it does, it's like around 6 to 7. It's like in that area and not see, I'm saying. So this is a race that Elon, I think is not equipped to throw as much money at as these guys can. And the idea that he's going to get to space, build these incredibly expensive data centers with no problem, I'm skeptical on, but here's why. I think I'm giving an alternate theory on why this is happening. Okay, so Mr. Musk is tweeting about how money cannot buy happiness. And that's an easy thing to say when you have $844 billion and and are currently richer than the next three people combined on the list. You're the richest man in the world by far. So disgusting amount of money. All right, we mentioned the next two.

[Mike]

Are the Google co founders who have an extraordinarily profitable company. He has two.

[Doug]

Okay, again his, I mean the amount of money he has so far dwarfs any of the profit of his business. It's crazy. Anyway, so he has a pay package that we talked about that he signed with Tesla recently and I remember we said about it, it's like, okay, he's going to get a trillion dollar pay package, but it contains some pretty strict requirements. Number one is he has to like double the market cap of Tesla. And as I'm looking at this, it feels like this was only the next to last step of where Twitter is going to go, which is that X goes to Space X. SpaceX is going public this year at about a trillion dollar valuation. And then they're going to merge. They're going to merge Tesla and SpaceX.

[Aiden]

SpaceX is going to go public at.

[Doug]

A trillion, over a trillion trillion and a half. They're trying, they're shooting for it.

[Mike]

It's not confirmed, but strong, strong, strong indicators.

[Doug]

SpaceX is going public this year.

[Aiden]

That has to be the largest IPO ever.

[Doug]

It is. By far. And the gap between, again, like, you know, a trillion dollar company is like a Google or an Amazon. They make huge amounts of profit. Again, SpaceX is a good company, but it's not there. So the amount they're making it, they're about their value. That is so rich. And now it has like this grok. Money losing, Twitter money losing. Fourth of it. Anyway, I'm all saying it seems a little skeptical, but it feels like, and I'm not, I'm not saying it's out of my ass, like a lot of credible evidence and things. Elon has said that he eventually sees all his companies becoming one thing. And it would be convenient if a $1.5 trillion company merges with a 1.2 trillion dollar company. Right. As he needs to add a trillion dollars of market cap to get his pay package. That to me would be a weird thing to say for a guy who's talking about how money won't matter in the future.

[Mike]

Well, I mean, he's saying money doesn't buy happiness, but we don't, we don't know if a trillion dollars.

[Doug]

He hasn't had enough, you know what I'm saying? But he keeps tweeting like conventional currency will just get in the way. Wattage and tonnage will matter, not dollars. And it just, it's so funny with how, how much money he has. Like I, I could. It was just not so easy to say. So anyway, I think this is a part of it and I'm skeptical on the space data centers, I guess. Like, all I'm saying is like, I think SpaceX had something real and I think they're getting fucked by Elon's grander vision.

[Mike]

Let me make an argument. SpaceX a pretty good company.

[Doug]

Yeah.

[Mike]

All right. Yeah, I was looking at this a little bit as well as talk to somebody who works in the aerospace industry who, I can't give details about what they do specifically, but they said they're so first off, said chatted with, with bankers who work in the aerospace industry. If you go public, right. You have to work with bankers to do the ipo, right?

[Aiden]

Yeah.

[Mike]

So strong rumors that this is happening this year, that SpaceX is actually going to IPO this year. So that's in like the investment world. And the kind of expectation is that pulling Xai into SpaceX now makes it an AI play that you can go to investors or the public and say, hey, look, AI is the really hot thing, right? Yes, this is a space company, but it's an AI space company. Right. So just getting to like have that be part of the package, given the spiciness around AI right now, when space.

[Aiden]

Isn'T futuristic enough anymore, catching rockets out of the sky, we kind of finished.

[Doug]

The whole 10 times.

[Mike]

Boring.

[Aiden]

I get it.

[Mike]

Like 20 times.

[Aiden]

Yeah, it makes like I, I can understand that. Like, it's, it's seems to play to the time, right?

[Mike]

Yeah, Right. And I think it's probably IT that's probably the biggest driver. Who knows how much of this is, is Elon's, you know, desire for.

[Doug]

I don't think it's only this, by the way, Elon is a guy that's, that's mixing.

[Mike]

My suspicion is more of the incentive is about eventually merging multiple companies as well as make it an AI play to raise a ton of capital rather than the space data center thing being truly the future of the world.

[Doug]

Yeah, it feels like a hype thing to help boost this idea.

[Mike]

So yeah, as far the data center thing seems to be the. This is why this makes sense from a PR standpoint. And behind the scenes we're like, this is because you want to put AI next to SpaceX when it IPOs.

[Aiden]

Has he alluded specifically to the idea of Tesla taking over or merging with SpaceX at all?

[Doug]

Only in like Twitter replies and stuff. He hasn't. Like, there's been nothing super official, but I think Ben Thompson, who writes Tri, which is a great blog really, he did a deep dive analysis on all the statements they made over the years and there's a clear sense of like, I want my stuff to event. Like I'm. It's all coming together all. It's all part of this great fusion of AI space robotics. You know, the idea is like if Tesla had an energy part of its company and a robotics part of its company, it would be aligned. Like, Tesla has already put $2 billion into Grok.

[Aiden]

It's like a sci fi book. It's like a, it's. It's a sci fi plot to like fuse all these, to have all these companies and then fuse them all together.

[Doug]

Hey, stop talking about Mars. He said, yeah, they're giving up a. He gave up. He didn't give up on it, I guess. But you know, 14 years ago, Elon Musk said, I'll put a man on Mars in 10 years. Obviously his timelines are always a little off. But then recently he said the new plan is for SpaceX to build a self growing city on the moon within 10 years and we'll do that before Mars. So Mars is at least 10 years from now.

[Mike]

Well, he, so he did say on this podcast I watched, he's within the next 10 years they're going to invent a time machine to send somebody back to Mars 14 years ago. So that this timeline was correct.

[Doug]

Well, that's good. How many beers have you had at that point?

[Mike]

Wait a second, now we're thinking it was funny. So I listened to maybe 20 minutes, 20, 30 minutes of this podcast and they kept just probing him for like, what is the plan here? Like, how is X AI going to become profitable? He's just like, I'm not going to spill the secrets. I would need two or three more beers. And I didn't click to the end of the hour and a half to see did he just sort.

[Doug]

I watched probably the same 20 minutes and I got this, this email I got was like dorkish. Kept asking especially about the, the data centers because Broadcast knows his shit. And he kept poking him like, he's.

[Mike]

A podcaster, he's qualified, he's qualified, he's.

[Doug]

A podcaster is the most noble profession there is. But he kept asking him like, okay, but like, how's this? Like, apparently my understanding, I'm not an engineer, My understanding is the amount of solar panels you need on these things generate even like the equivalent of a 1 GW data center is like absurd. Like at the current tech, it's like absurd. The size is incredible. The radiation like breaks the GPUs up there much easier. Like the amount to cost replace is absurd. Like it just seems astronomical literally and figuratively to do in any realistic timeline. And so I'm, it feels more to me like, hey, this is a cool hype thing to say before the IPO.

[Mike]

Yeah, Barry, can you pull this up in SpaceX? So again, like in SpaceX's announcement that they're buying XAI slash, also Twitter, they, you know, it's this, it's saying we are doing this so that we can get data centers into space. And that's the only way to scale them to the degree of which, you know, and there's this one line here. The only logical solution, therefore, is to transport these resource intensive esper efforts to a location with vast power and space. I mean, space is called space for a reason. Laughing emoji. There is a laughing emoji in the PR state. So I'm Pretty sure Grok wrote this, right?

[Doug]

Like unironically.

[Aiden]

That's fire. Can't tell me that's. That's fire. We can't drop a fucking little emoji. Yeah, they should have done laughing, crying emoji, skull emoji. Yeah.

[Doug]

Just to be a little more with the times, it seems a little dated, a little millennial.

[Mike]

All right, so a couple rapid fire questions to you guys about aerospace industry. You know, I did a small amount of research on this as well as chatted with my aerospace friends, so I think it's easy, certainly I have fallen prey to this to think that SpaceX is like the only space company making rockets and shooting things into. But there's actually others. There's like Rocket Lab is a public company that does this Firefly Astra in space.

[Doug]

In space is like a big one. You've been working on that one. Yeah, in space you're like launching shit.

[Mike]

You're going outside. You just like roll basketball as high as you can.

[Doug]

How far did you get? Are you getting close?

[Aiden]

Well, we've gotten probably about 15ft in the air and.

[Mike]

Wait, no, don't give us raw numbers. Say the percentage improvement every year. Oh, yeah.

[Aiden]

Oh, it's a huge leap.

[Mike]

Quarter over quarter over quarter.

[Aiden]

We're growing 15% in the last year. Improvement for sure, in terms of height. And then also huge celebrity investors like Ludwig. He doesn't know that he's an investor.

[Doug]

Right, but you've been pulling some of the.

[Aiden]

But I've been pulling money out of the account because there's precedent for that.

[Doug]

Couple million here, couple million there.

[Mike]

Okay, okay.

[Doug]

So there's a lot of rocket companies.

[Mike]

Rapid fire question. Why the fuck does the average person care about things going to space anyways?

[Doug]

Well, I don't know. I thought the, I thought Starlink is pretty cool. Like that's cool, right?

[Aiden]

Yeah, in like a grand philosophical sense. Either.

[Mike]

Either grand philosophical or more importantly, if you are a person who works at, you know, a normal job and you don't give a that SpaceX launches however many rockets a year. What are some reasons that you as an average person might care about aerospace industry?

[Aiden]

I think there's, I think there's still a raw fascination with like space and exploration and like furthering human discovery.

[Doug]

Boring.

[Aiden]

That I think, is that, I think, is there. I think I still have that in my heart. I was like fascinated by space when I was a kid. I wanted to be an astronomer.

[Doug]

Putting me to sleep right now.

[Aiden]

I'm gonna kill myself one day.

[Doug]

I'll tell you why we go to space, Doug? I'll tell you why we go to space. Yeah, because I'm a greedy little gold goblin. And apparently these meteors and these asteroids, they have a ton of gold in them.

[Aiden]

So that was the, that's the other grab on there.

[Doug]

And you could suck it all out.

[Aiden]

Is. I do think there's, there's probably a longer term argument of if you can make space travel cheap enough, you can collect or gather a lot of resources from off the Earth without a lot of the negative externalities of doing it on Earth. You, you have like, and potentially unlimited access to like, resources and energy that Earth no longer needs to provide you if the space travel is cheap enough while absolving humans of the downsides of like, resource.

[Doug]

Would you guys live on Elon Musk's moon city? Would you move there and visit you privilege?

[Mike]

I would buy, I'd buy an apartment in its metaverse.

[Aiden]

Why would it, why would you use that as the example, Doug?

[Mike]

What a foolish.

[Aiden]

But I feel like those are the two. There's the philosophical kind of human discovery and then I think there's a scientific reason alongside that, there's valuable human discoveries that come with the pushing of human understanding that is required for space travel. And then there's a more practical resource and energy reason on the other side.

[Mike]

Yeah, so like what you said, you know, NASA has pages about this. But you know, a lot of the advancements and technologies that benefit life on Earth come from space technology advancements. So like solar panels, water purification systems, dietary formulas, material science innovations. These are all from NASA. As NASA has talked about how their work has advanced these things. This stuff that benefits the average human. On top of that, weather forecasting, that's from satellites in space. Gps, that's from satellites in space. As you mentioned, Starlink communications is, you know, up until now we mostly communicate with our cell phones and Internet on a bunch of ground fiber, you know, around Earth.

[Aiden]

I mean, I mean, could I give a cool example of Starlink? Like a very practical thing. When we filmed Tip to Tip last year, which was Ludwig and Michael Reeves traveling through Japan, their crew behind them in the RV used Starlink for a ton of that trip in order to send like proxy files back and forth that they were editing with to upload like final versions of videos. It was super useful and was one of the reasons that a project like that is maybe not straight up possible, but at least way more practical to do than it otherwise would have been.

[Doug]

Yeah, I mean one of the, one of the things that really warmed me to Starlink recently was reading a lot about what was happening in Iran. We don't have to go too deep into it now, but the government there has total control over the Internet. They shut it down during these protests and the crackdown. And people were like, using Starlink as the only method of getting it out. And some of the agents of the government were going door to door checking the rooftops and breaking Starlink satellites to try, like. But that was the only method. And so, like, it is a way of democratizing Internet access through. You know, it's like there's something to that, for sure.

[Aiden]

Yeah.

[Mike]

And there's also. There's a lot of businesses that you might not be aware of that are based around satellite imagery, which, to be fair, a lot of this is used by governments for defense manufacturing. Let's be real. Yeah, but, but they're real, actual good use cases. For example, the Brazilian government uses satellite imaging to see what's going on in the rainforest and can see like, okay, a narcotics operation is clearing forest land to build an airstrip and to, like, build out narcotics factories.

[Aiden]

Or I've seen it for, in the context of, like, Amazon rainforest logging and, like, it's like illegal logging practices in the, in the Amazon, they can see areas or patches that have, like, been burned in, like, really remote areas. So you can identify where, you know where to find, like, these poachers or loggers that aren't supposed to be there.

[Mike]

Yeah, so there's a. There's, you know, you, you actually care. I think as, as an average person, this might reasonably affect your life in some way. But I think the big one to hone in on that we just talked about is Starlink, because that's communications. And let's look at Verizon's market cap. It is $200 billion, right. Like, just one of the telecoms companies in America has a $200 billion market cap. So if you imagine that Starlink and SpaceX, who own Starlink, can expand that to the point that they are eating giant chunks of the telecoms industry, you're starting to see, okay, a lot of that $1 trillion valuation that SpaceX has, like, maybe you can justify it if that just keeps growing and growing and growing.

[Doug]

Yeah, I guess this is a thing that's unique to this time, but especially to Elon's companies. We're just. So much of the valuation always comes from saying things like that, but it's never from, like, what are they doing now? The money is never there. Now the robots are not being sold. The autonomous vehicles are yet to have any real driverless rides. Like, it's like. I get it, I do get it, I understand it. But they more than anyone else get the biggest amount of like, Gap.

[Mike]

Yeah, no, what I just said is a story about. It's a good sounding story that when you go like, look, here are all the things that make this story might be true because of all these things, right?

[Doug]

And then he's a guy who, you know, provably now, because it's been so many years, has told again, some stories. He has, has eventually gotten there. But so many of the stories are Homer, like Simpson though, because like, you know, the guy on Mars, the drill, the boring drill, highways. There's like a lot of things that just got promised and now we've had enough time to be like, those didn't happen. So why are we giving you so much credence on these stories where you're promising the same? That's my only. That's my. I mean, there's actually other things. There's again, you know, as a SpaceX investor, not me, but if you were one, one of the big things they're flagging is like, hey, Grok is currently being sued by like 12 countries. France, bunch of. Because of all the weird like things it was doing with putting people in bikinis.

[Mike]

And well, France can't sue them if they're in space. Maybe they're fleeing laws in international waters.

[Doug]

But so now all these lawsuits and like bad PR and like everything that, that is political, it's tied with Twitter and X and it's now all lumped into space X, which is just, you know, it's like it turns something kind of clean and cool about rockets into something very messy. That's the.

[Mike]

All right, so, okay, queen, click, queen, clean, quick rocket things. So, okay, while a lot of this is a story, it is true that SpaceX is by far the most dominant rocket company right now. So how many, how many launches do you think happened in 2025 from Blue Origin? It's the Amazon, it's the Jeff Bezos company. We hear all about it. How many rockets do you think they.

[Doug]

I feel like they launched that one with Katy Perry and it was such a PR disaster. They haven't done wrong.

[Mike]

Two.

[Aiden]

No way. It's only two.

[Mike]

I was going double digits.

[Doug]

I thought it was 100.

[Mike]

That's suborbital. They don't even go into orbit. So it's like, it's for. It's like a six minute funny, no gravity thing.

[Doug]

Dude, that first one was such a. Everyone that was on that thing got like roasted for weeks.

[Aiden]

Wait, they've done. Sorry, they've done two launches in 2025 or two all time.

[Mike]

2025, I don't think it's not, it doesn't really make. I don't think 2024 and earlier increases the numbers that much, but I don't have those off the top of my head.

[Doug]

I'm just saying Katy Perry got so roasted for that, she had to start dating Justin Trudeau. That's, that's how far she fell back to earth.

[Mike]

Which is not a good follow up.

[Aiden]

Yeah, it's kind of like famously bad.

[Mike]

SpaceX buying Twitter doesn't absolve the fundamental problem. Okay, Lockheed Martin, they have a space. How many launches do you think they had in 2025?

[Doug]

Oh, I'm going to give them eight.

[Mike]

Okay, close six. So Rocket Lab, this is a public company that launches rockets. This, they're a legit ass public company. I believe their market cap is $36 billion. How many, how many launches did they do? 2025, bro.

[Doug]

Give me 850.

[Mike]

Holy no. Oh my God. Jesus Christ. Okay, no, rocket, rockets are hard, guys. They' rocket the public company that you can go and buy this from.21 and 2025. SpaceX. 165 launches. They are way above everybody else in terms of launches. Okay. Number of satellites that they personally manage and operate out in space. Planet Labs is a public company. They have like 150 to 200 doing this satellite imaging. Amazon Leo, their Amazon Starlink competitor, they have about 200. Again, they're. Amazon LEO is explicitly trying to like get in on that Starlink competition, right?

[Aiden]

Yeah.

[Mike]

SpaceX again, Amazon is 200. SpaceX has 9,600. Like this is orders an order of magnitude higher, right? Fucking 50 times more. And then reusable rockets. SpaceX is the only one commercially doing reusable rockets. So they save something like 40 to 50% of their launch cost.

[Aiden]

There's the only one doing reusable rockets.

[Mike]

Yes. So everybody has prototypes like China's Lab does. Rocket Lab does, ISRO does. Blue Origins are reusable, but again they're not going into, into orbit right now, so it's like less impressive. SpaceX is the only one commercially doing it and each rocket can get up to like 20 times usage.

[Aiden]

Can I. Okay, so let me break away. I'm not here to tell you that this company is fully deserving of a trillion dollar ipo. But even without the Starlink part, the Promising thing of this company to me has always been space travel will inevitably become part of humans future in some capacity. Right. Like the, the desire to go back and forth between space and the earth more frequently. Not from like a human tourism perspective. I don't really think that'll be.

[Doug]

You want to go to the moon? 10 minutes ago you said you're going to swing by.

[Aiden]

Yeah, I'll be one of the guys, of course. No, but I. Less that and more. There will be like more practical, resource driven reasons to go back and forth between space. Like satellites. Like as an example, you're. You're so far ahead of the curve and an industry that is.

[Mike]

Seemingly so.

[Aiden]

Critical to the future. I feel like there's so much potential there. That's the value that I've always seen in SpaceX. So, you know, Xai or not.

[Doug]

Sure. Okay. It's not that I disagree. I do think SpaceX is his best company. But I'll say like here's an analog. Right. The things you're saying about how far ahead they are are things you could have said about Tesla in 2018 or 19. Right. And if you flash forward till now, like, you know, I got a story here.

[Aiden]

Next year Xiaomi releases a $70,000 reusable rocket.

[Doug]

Yeah.

[Aiden]

First of all, alongside the SU7, we now have a rocket that can go.

[Doug]

Yeah. Chinese manufacturing, I'm sure. And energy costs are going to allow them to compete heavily. And I think they were maybe a few years behind.

[Aiden]

Okay.

[Doug]

But then also like Tesla since that 2020 period where. Or 2021 where it kind of peaked, has flatlined like, like the growth of the cars and all things you said that are going to be dominant in electric vehicles. They're so far ahead.

[Aiden]

Yeah.

[Doug]

In fact everybody else caught up. They're flatlining their European sales for this year. Down 88 in Norway, down 67 in Netherlands, down 57 in the UK, down 40 in France. This is all from like this January versus last year. Okay. They're in three consecutive years of decline in Europe. So like that's in Europe. In China they're worse. So like they're doing okay in America. They're losing other places. So the idea that like SpaceX is going to maintain this. I think they are. I mean I. Undisputeably he's innovated in some area or his companies have innovated in some areas. Like they've had SpaceX.

[Aiden]

Absolutely has, like definitely, definitively.

[Doug]

But the idea that he has been really good about that next step where you like first of all maintain the lead and then turn it into a profitable business that can he. That hasn't been there. And so like I feel like in fact other people are gonna step in, take the tech that maybe he's led on Xiaomi. And yeah, I'm not even kidding, it might be Xiaomi the phone company now, car company, soon to be rocket company. That's the way it all works in China, I guess.

[Mike]

Yeah. Okay, hold on.

[Doug]

I'm taking the under is what I'm saying. But I don't disagree with.

[Mike]

Just, just real quick because it's important. Oh my God.

[Doug]

Yeah, I hate this dude. But refreshing it escape.

[Mike]

There we go. So sp. I, I heard that. So anyway, fact checking whether SpaceX is profitable. They have said they're 8 billion in profit last year ahead of the IPO. So at least at times they are profitable. 8 billion in profit on 15 to 16 billion in revenue. And that's from Reuters, 100%. So. So they're not.

[Aiden]

So they are profitable.

[Mike]

So that's like an important correction. Yeah, yeah. Does that justify buying the thing that's going to lose them a billion dollars a month? Maybe not, but yeah.

[Doug]

I just want to say, you know, this profit again is, we're in comparison to Amazon at 100 billion. Google, 100 billion is like.

[Aiden]

Okay, so this actually leads to a question I want to ask you both is I think revisiting this in this moment of seeing the profitability of a company like Google or a company like Amazon, seeing the list of like the wealthiest people alive right now. Yeah. At least like private individuals. And, and then looking at the, like where Tesla's at, where SpaceX might be. Yeah. Where Xai is. Yeah. And isn't it kind of ridiculous that he's that rich? Like does any of this, it seems so unfoundedly disproportionate from how other companies are valued and how other people's like net worths are represented. Like, how can this guy who's at best in charge of one company that loses a lot of money, one company that makes $7 billion a year, one company that makes $7 billion a year worth $800 billion.

[Doug]

I think he, first of all, he owns a larger portion of it than most other CEOs.

[Aiden]

I understand that.

[Doug]

Right.

[Aiden]

But it's the idea that after everything we know and understand, it's like people that invest, like broadly people that invest in these companies understand a lot of the things that we understand about Elon Musk and these companies as well. So how is his net worth even like Allowed to be.

[Doug]

I think he's the greatest storyteller. But we've talked about story. I think he's just been incredible. He will get people and the market, gets excited about the future he paints. And whether or not that materializes doesn't. Doesn't seem to matter so far.

[Mike]

I mean, look at the three of us. I get hyped up about shit all the time. Just say it on this show. Like, no, I mean even in this episode of three people.

[Aiden]

Even in this episode, right? I'm sitting here who. I'm not a fan of this guy, but I'm like fucking.

[Mike]

Fucking put the GPUs in space.

[Aiden]

Fucking awesome. Like, it's. I. I get that part, but it seems crazy that this story, that the narrative aspect is enough to like take. I know. My God.

[Doug]

And it's not just him.

[Aiden]

I know my company only makes $7 billion, man. But trust me, it's worth way more than this other company that makes $130 million a year.

[Doug]

Yeah, but I think the. All the market has become more focused on storytelling. He's just the guy that's the. It's so extreme that it, like, it's frustrating when you want to have any sort of valuation make sense. But. Yeah. Welcome to the lemonade stand. First car. Why is Aiden so picky and needy and touchy on my cards?

[Mike]

I wrote that one.

[Doug]

Yeah, it's. Let's. I think it needs to be discussed. Let's get the whole roundtable going.

[Aiden]

I reached for it because. Why did you reach for it? Out of the corner of my eyes? I swear to God. That first card says Squeaks, which who is just someone I'm not prepared to talk about.

[Mike]

Ladies, gentlemen, today's main topic.

[Aiden]

Squeaks.

[Mike]

Elon Musk is purchasing XAI through his company.

[Doug]

Squeaks?

[Mike]

Yes.

[Doug]

He's merging squeaks with SpaceX.

[Aiden]

Wow.

[Doug]

Bringing sort of. Squeaks is funny energy and the ability to launch.

[Mike]

There's a quote here. I was considering Aiden, but Squeaks simply outperforms him on Mirage every time.

[Doug]

That's not true.

[Aiden]

That's not true of a higher rank. Dude, I was a couple. I was last week at least.

[Doug]

Not what Elon's saying.

[Aiden]

Elon doesn't know shit about gaming.

[Doug]

He doesn't know shit about. Well, we'll find out. I. We talk about. We got a lot of topics today, but the big one is that the world's largest merger, private merger ever, just happened between Xai and SpaceX.

[Mike]

Nice.

[Doug]

Now, you may remember a little story here. Remember Twitter?

[Aiden]

The Blue Bird I remember it.

[Doug]

I remember it is a business.

[Mike]

Imagine that. But in space now.

[Doug]

Yeah, imagine magic that put that out into space.

[Mike]

Okay, name all the things you hate about Twitter. Name them.

[Aiden]

Ooh, I hate the. I hate the algorithm and the way that it primarily delivers me slop. Now, instead of things from people, I follow.

[Mike]

Now, imagine that. But it's coming to you from space.

[Doug]

Is that changing? Does that make you.

[Mike]

Are you back in? Are we at Grok? Does that change anything?

[Aiden]

If I'm being honest, I'm slightly more intrigued.

[Doug]

I'm worried that our. The aliens first contact with us will be through Grock and they'll hate us. They will not like it. Grog is not a likable fellow.

[Mike]

Yeah, it's just a coin flip of, like, which of the satellites you hit. Is it the International Space Station.

[Doug]

Or Russian up there? Or Grok or. Oh, there's the bird in space. Anyway, okay, remember Twitter? So Twitter is a company not doing so well. When it was bought, it was like dead even barely, barely staying afloat. Their CEO was part time, he worked at Square most of the time, and then was Jack Dorsey. So Elon buys it and puts a lot of that on debt, a lot of that on credit card. He gets some Saudi help and he gets whatever. So it's a $44 billion purchase. A lot of it's through debt. He finds out quickly that his new changes to Twitter don't make any money. They're not. They're actually losing all the advertisers. And the ones that try to sell you the checkmark, they don't make any.

[Mike]

I read that viewer hours are up from Elon.

[Doug]

I've seen Elon make a lot of claims. I know for a fact it did not make a profit. And that's because not only did the revenue go down, but they had to pay the debt, the interest on the debt, which is a lot of money every month. So that all added up to being a net negative. And some of the people that helped him invest in that debt, the Saudis, and they were getting kind of mad. But Elon, he bailed him out. He went to his other company, xai, which he also owns, and bought Twitter. XAI buys Twitter. XAI also loses money, but they were bigger and they're easier to attract funding because AI is a cooler buzzword. And maybe Grok is going to do something. I'm not a fucking expert. I don't. Really don't know.

[Aiden]

And at this stage, in a way, Elon has effectively bought Twitter twice.

[Doug]

That's what we're getting at this point. Yeah.

[Aiden]

Okay.

[Doug]

At this point. Yeah. He's bought it. Yeah. Twice. He bought it himself and then he bought it with his other company to bail it out. But now you've combined a money losing company, which is xi, with a money losing social media platform.

[Mike]

Wrongs make a right.

[Doug]

Yeah.

[Aiden]

So they become positive, they cancel each other out.

[Doug]

Plan would be. But it turns out they're losing. I think I have a quote here. $1 billion a month. Xai burns through $1 billion a month. This is after. I'm not gonna do the whole timeline here, but around the time of this article, Xai was trying to fundraise because they're understandably running out of money. You can't spend a billion dollars a month and keep afford to buy all the stuff you need for Grok, all the stuff you need for Twitter, everything. So yeah, you can see right here, they're trying to raise $9.3 billion in debt and equity. Well, it turns out that the market was like, I don't know, like you have to give us pretty high interest rates for that because we. Because you're losing so much money. And so rather than do that, he's like, wait a minute, I got a plan. I got an even bigger company that can raise even more money.

[Mike]

Wait, wait, wait. But surely the third company is profitable, right?

[Aiden]

No, wait, wait, wait, wait, wait, wait. I'm being serious. I'm being serious. Wait, he used. Okay, it has, that has to mean this is SpaceX.

[Doug]

This is SpaceX.

[Mike]

SpaceX is buying Twitter and OpenAI or excuse me, and Xai.

[Doug]

So, so now this shit sandwich is getting rolled up into what I would say. And I think people who are Elon haters don't give enough credit. SpaceX is a pretty solid company from what I could tell.

[Aiden]

Okay. And that was, that was my question here. Yeah, I, for, for everything that's been talked about for Elon and all these companies that I've heard over the years, I actually thought SpaceX was a company. I thought SpaceX was making money. I thought SpaceX actually had profitable.

[Doug]

They're not profitable to my understanding.

[Mike]

Correct.

[Doug]

But they do make real revenue and theoretically have a path towards being a real business. Like Starlink is a product people like it does makes real. That's where the majority of the revenue comes from. Then they have government contracts for like launching rockets and shit. So like, yeah, between these things, it's like there's a business there. Which is why, by the way, a lot of SpaceX investors, like the hardcore SpaceX only investors, people that like have been in for minute one and don't care about Elon or Tesla or anything else or maybe like Elon, but they're mad about this. This is like diluting because a fourth of the company they now own the based on the way Best Valued is now Grok and Twitter. And like they've, they said, they said Xai and Twitter is worth 1 4th of SpaceX when they merged. So that's where the way shares were diluted. So like now you own like this weird tumor, this weird appendage on a beautiful SpaceX that they really liked.

[Aiden]

If you love space, I don't see why you wouldn't like an app that has everything on it.

[Mike]

That's a good point.

[Doug]

Or like a weird fucking AI that answers questions.

[Aiden]

And it's like you have starlink, but now you also have something that can deliver porn and hate speech.

[Doug]

And hate speech industrial scale.

[Aiden]

And I.

[Mike]

But like in a rural area now you can get hate. Okay, so let me give you, let me give you the pitch. So let Aidan your best guess. What is the business proposition? So, so in, in good faith.

[Doug]

Yeah.

[Aiden]

Yes.

[Mike]

And for example, so Elon just did an interview with Dwarkesh and they talked about why you would do this. So what would be the purpose of having the space company he owns buy an AI company? I think the good faith, in terms.

[Aiden]

Of my small brain perspective, I feel like there has to be some sort of alignment with the end goal of the AI that you are training and developing and the needs of the space program that you're building. Like there are advantages of embedding this AI in the satellites that you're putting up as a part of Starlink or the rockets that you're launching, or the software that future like space travel that this company is going to do is there. There seems to be some sort of technological alignment. That is the best case scenario that I could describe.

[Mike]

Okay, here's a different way of putting it. Who's the most valuable company on Earth right now?

[Aiden]

Nvidia.

[Mike]

Right. So what is like if you, what is like the. One of the best businesses you can make right now? AI building a shitload of data centers. But the problem is that that's hard to do on Earth because of things like regulation and human beings needing the energy and the land. Right, Right. So what if you just took the data centers and you move them into space? Aiden.

[Doug]

Yeah.

[Mike]

That is the pitch. AI data centers in space.

[Aiden]

Okay. And I, I know this sounds ridiculous. I'm sure there's a bunch of people that think this sounds ridiculous. Wait, is this low key a good idea?

[Doug]

No, I don't think so. I think. Okay, all right.

[Aiden]

I think I've seen the dwarf isn't the idea is you could put a data center into space that is like built or built in with or surrounded by solar panels that give it like a constant source of power. Like a constant source of power compared to what you could do on Earth and with like no ramifications for. For the environment or people.

[Mike]

Yes.

[Doug]

Yeah.

[Mike]

So the. Yeah, the pro power you can make. There's all these different challenges to having a data center, Right. And one of them is energy generation, obviously. So if you put solar panels on a data center and you shoot it into space, you can put it in an orbit that is always facing the sun. So you don't have to deal with the fact that here on Earth, like you only get sun some of the time. You don't have to deal with things like weather or physical degradation. And the only cost in return is that it's extraordinarily expensive to get it there, to maintain it, and you don't have a way of cooling it easily. Also, the satellites need to talk to each other in like an extremely complex format. And this, you know, assumes a variety of other things all over the world.

[Doug]

Sometimes you need to update the chips that you sent up there and it's like, incredibly a huge pain in the ass.

[Aiden]

Right?

[Mike]

Yeah. The chips are gonna basically maintain themselves without any sort of guidance or oversight. But so here. Okay, here's the counter. As much as this sounds like a crazy Elon thing, Google actually announced a plan to do this in November. So this is like not sort of. It's not just Elon's wacky idea. This started in November. They call it Project Sun Catcher and they've described it as a, you know, in quotes, moonshot, and give it a 10 year timeline of like, we think that in 10 years it'll be cheaper by the mid-2030s to start new data centers. Like launching and operating a data center would become the same price as doing it on Earth. That's their pitch. And they're like, we're going to see if this is even possible and they're going to start to test it. And then Elon went on this podcast like a week or two ago and had a pint of beer and then said, in 36 months it'll be cheaper to do it in space. So it's going to be somewhere in.

[Aiden]

Those guys in those Translate an Elon 36 months into real time. That's probably about 10 years, 40 years.

[Doug]

Is that Mr. Timeline, bro? Yeah.

[Aiden]

Okay, I can see. Okay. As soon as you started listening to the downsides, I was like, okay, I can see how this might not be. It might not work great. But the Google. Can you explain what Google's plan is exactly? Like, who are they partnering with or how are they planning to do.

[Mike]

Yeah, they're part. So they're going to start testing stuff in 2027. They're going to partner with Planet, who is another, like, aerospace company that does satellite imagery. So they're going to work together to try to solve these issues. And they're being very upfront of like, this is extremely technically challenging. This is conceptual. We're going to try to make this work. We see this potentially working on 10 year timeline. And they listed their own quantum computer and Waymo as an example where the like, these are previous moonshots. We've tried. They took 10 and 15 years respectively. So we're seeing this maybe be possible in the future. And then to kind of like quell a lot of the concern, I pulled out a quote here. Our analysis indicates that this should all be possible with multi channel, dense wavelength division multiplexing, DWDMcievers and spatial multiplexing.

[Doug]

You're always talking about spatial multiplexing. It's like an insane obsession of yours.

[Aiden]

I just don't think that you guys would get it.

[Mike]

Yeah.

[Aiden]

If we dove in. Probably be tough because it's just you don't have the background that I have at UW's Foster School of Business.

[Doug]

Really? That was one of the main things.

[Aiden]

They hammered well in multiplexing. Four, two, three. We just. You get so deep into the sauce with your professor. It's really hard to explain it to people who don't take that class with you. You get.

[Mike]

The students don't even talk, they just multiplex at each other.

[Aiden]

You just multiplex. You spend a lot of. You multiplex, multiplex. You multiplex with. With somebody else, sometimes sexual.

[Doug]

Okay, well, let me, let me say something.

[Mike]

Okay, look, that, that is what is being stated by Elon of this is the reason why this is a great fit.

[Doug]

Here's what I'll say. XAI is competing in this AI race with Google, with Amazon, with OpenAI. Yeah, everybody, they're all full steam ahead to get ahead in the AI race.

[Mike]

I will say real quick, you, you kind of dismiss them as saying they're losing $1 billion a month. OpenAI is losing 3 to $4 billion a month. So they're actually doing pretty well, 100% actually.

[Doug]

So I get to. So can you pull my screen, Perry, or like you show this? Okay, so Google stock just had a little bit of a tumble recently when they announced they're going to be spending $185 billion this year on AI. Absurd amount, but they have a lot of money. Amazon top them. Pause. They said they're going to spend $200 billion in AI, but again, they have a lot of money. All of these hyperscaling companies are going to are shooting to the moon about spend on AI. Amazon makes $95 billion in profit. Alphabet makes $152 billion in profit. Tesla makes 7. And it's going down. SpaceX, I don't think it has profit yet, but if it does, it's like around 6 to 7. It's like in that area and not see what I'm saying? So this is a race that Elon, I think is not equipped to throw as much money at as these guys can. And the idea that he's going to get to space, build these incredibly expensive data centers with no problem, I'm skeptical on, but here's why I think I'm giving you an alternate theory on why this is happening. Okay, so Mr. Musk is tweeting about how money cannot buy happiness. And that's an easy thing to say when you have $844 billion and are currently richer than the next three people combined on the list. You're the richest man in the world by far. So. Disgusting amount of money. All right, we mentioned the next two.

[Mike]

Are the Google co founders who have an extraordinarily profitable company. He has two.

[Doug]

Okay, again his, I mean the amount of money he has so far dwarfs any of the profit of his business. It's crazy. Anyway, so he has a pay package that we talked about that he signed with Tesla recently. And I remember we said about it, it's like, okay, he's going to get a trillion dollar pay package, but it contains some pretty strict requirements. Number one is he has to like double the market cap of Tesla. And as I'm looking at this, it feels like this was only the next to last step of where Twitter is going to go, which is that Xai goes to SpaceX. SpaceX is going public this year at about $1 trillion valuation. And then they're going to merge. They're going to merge Tesla and SpaceX.

[Aiden]

SpaceX is going to go public at.

[Doug]

A trillion, over a trillion, trillion and a half. They're trying, they're shooting for it, it's.

[Mike]

Not confirmed, but strong, strong, strong indicator.

[Doug]

That SpaceX is going public this year.

[Aiden]

That has to be the largest IPO ever.

[Doug]

It is, by far. And the gap between, again, like, you know, a trillion dollar company is like a Google or an Amazon. They make huge amounts of profit. Again, SpaceX is a good company, but it's not there. So the amount they're making, their amount they're valued at is so rich. And now it has like this grok. Money losing. Twitter money losing. Fourth of it. Anyway, I'm all saying it seems a little skeptical, but it feels like, and I'm not, I'm not saying this out of my ass, like a lot of credible evidence and things. Elon has said that he eventually sees all his companies becoming one thing. And it would be convenient if a $1.5 trillion company merges with a $1.2 trillion company. Right. As he needs to add a trillion dollars of market cap to get his pay package. That, to me would be a weird thing to say for a guy who's talking about how money won't matter in the future.

[Mike]

Well, I mean, he's saying money doesn't buy happiness, but we don't, we don't know if a trillion dollars.

[Doug]

Yeah, he has had enough, you know what I'm saying? But he keeps tweeting like conventional currency will just get in the way. Wattage and tonnage will matter, not dollars. And it just, it's so funny with how, how much money, like I could. It was just not so easy to say. So anyway, I think this is a part of it and I'm skeptical on the space data centers, I guess. Like, all I'm saying is like, I think SpaceX had something real and I think they're getting by Elon's grander vision.

[Mike]

Let me make an argument. SpaceX a pretty good company.

[Doug]

Yeah.

[Mike]

All right. Yeah, I was looking at this a little bit as well. Talked to somebody who works in the aerospace industry, who, I can't give details about what they do specifically, but they said they're so first off, said, chatted with, with bankers who work in the aerospace industry. So if you go public. Right. You have to work with bankers to do the ipo, right?

[Aiden]

Yeah.

[Mike]

So strong rumors that this is happening this year, that SpaceX is actually going to IPO this year. So that's in like the investment world. And the kind of expectation is that pulling Xai into SpaceX now makes it an AI play, that you can go to investors or the public and say, hey, look, AI is The really hot thing, right? Yes. This is a space company, but it's an AI space company. Right. So just getting to like have that be part of the package, given the spiciness around AI right now, when space.

[Aiden]

Isn'T futuristic enough, catching rockets out of.

[Doug]

The sky, we kind of finished the whole 10 times.

[Mike]

Boring. I get up there like 20 times.

[Aiden]

Yeah, it makes like I, I can understand that. Like it's, it's seems to play to the time, right? Yeah, Right.

[Mike]

And I think it's probably it that's probably the biggest driver. Who knows how much of this is Elon's. You know, I don't think it's only.

[Doug]

This, by the way, Elon is a guy that's, that's mixing.

[Mike]

My suspicion is more of the incentive is about eventually merging multiple companies as well as making an AI play to raise a ton of capital rather than the space data center thing being truly the future of the world.

[Doug]

Yeah, it feels like a hype thing to help boost this idea.

[Mike]

So yeah, as far the data center thing seems to be the, this is why this makes sense from a PR standpoint. And behind the scenes we're like, this is because you want to put AI next to SpaceX when it IPOs.

[Aiden]

Has he alluded specifically to the idea of Tesla taking over or merging with SpaceX at all?

[Doug]

Only in like Twitter replies and stuff. He hasn't. Like, there's been nothing super official, but I think Ben Thompson, who writes Tratecheri, which is a great blog really, he did a deep dive analysis on all the statements they made over the years and there's a clear sense of like, I want my stuff to eventually, like I'm. It's all coming together all. It's all part of this great fusion of AI space robotics. You know, the idea is like if Tesla had an energy part of its company and a robotics part of its company, it would be aligned. Like Tesla has already put $2 billion into Grok.

[Aiden]

Like it's like a sci fi book. It's like, it's, it's a sci fi plot to like fuse all these, to have all these companies and then fuse them all.

[Doug]

Talk about Mars. You said yeah, giving up on. He gave up. He didn't give up on it, I guess. But you know, 14 years ago, Elon Musk said, I'll put a man on Mars in 10 years. Obviously his timelines are always a little off. But then recently he said the new plan is for SpaceX to build a self growing city on the moon within 10 years and we'll do that before Mars. So Mars is at least 10 years from now.

[Mike]

Well, he. So he did say on this podcast I watched, he's within the next 10 years, they're going to invent a time machine to send somebody back to Mars 14 years ago. So that this timeline was correct.

[Doug]

Well, that's good. How many beers have you had? That.

[Mike]

Wait a second, now we're thinking it was funny. So I listened to maybe 20 minutes, 20, 30 minutes of this podcast and they kept just probing him for like, what is the plan here? Like, how is Xai going to become profitable? He's just like, I'm not going to spill the secrets. I would need two or three more beers. And I didn't click to the end of the hour and a half to see did he just.

[Doug]

I watched probably the same 20 minutes and I got this. The C I got was like, dorkish kept asking especially about the, the data centers because Broadcast knows his shit. And he kept poking him like, he's.

[Mike]

A podcaster, he's qualified. He's qualified.

[Doug]

He's a podcaster is the most noble profession there is. But he kept asking him, like, okay, but like, how's this? Like, apparently, my understanding, I'm not an engineer. My understanding is the amount of solar panels you need on these things generate even like the equivalent of a 1 GW data center is like absurd. Like at the current tech, it's like absurd. The size is incredible. The radiation, like, breaks the GPUs up there. Much easier. Like, the amount to cost replace is absurd. Like, it just seems astronomical, literally and figuratively to do in any realistic timeline. And so I'm. It feels more to me like, hey, this is a cool hype thing to say before the ipo.

[Mike]

Yeah. Oh, wait, Barry, can you pull this up in SpaceX? So again, like in SpaceX's announcement that they're buying XAI slash, also Twitter, they, you know, it's this, it's saying we are doing this so that we can get data centers into space. And that's the only way to scale them to the degree of which, you know. And there's this one line here. The only logical solution, therefore, is to transport these resource intensive esper efforts to a location with vast power and space. I mean, space is called space for a reason. Laughing emoji. There is a laughing emoji in the pr. So I'm pretty sure Grok wrote this, right?

[Doug]

Like, ironically.

[Aiden]

That'S fire. That's fire. We can't drop a little emoji. Yeah. They should have done laughing, crying, emoji. Skull emoji.

[Mike]

Yeah.

[Doug]

Just to be a little more with the times, it seems a little dated, a little millennial.

[Mike]

All right, so a couple rapid fire questions to you guys about aerospace industry. You know, I did a small amount of research on this as well as chatted with my, my aerospace friend, so. So I think it's easy, certainly I have fallen prey to this, to think that SpaceX is like the only space company making rockets and shooting things into space, but there's actually others. There's like Rocket Lab is a public company that does this Firefly Astra in space.

[Doug]

In space is like a big one. You've been working on that one. Yeah, in space you're like launching, shaking.

[Mike]

He's going outside and he just like throws the basketball as high as you can.

[Doug]

How far did you get? Are you getting close?

[Aiden]

Well, we've gotten probably about 15ft in the air. And by the way.

[Mike]

No, don't give us raw numbers. Say the percentage, percentage improvement every year. Oh, yeah.

[Aiden]

Oh, it's a huge leap. Huge.

[Mike]

Quarter over quarter.

[Aiden]

We're growing 115% in the last year. Improvement for sure, in terms of the height. And then also huge celebrity investors like Ludwig Auburn. Oh, he doesn't know that he's an investor.

[Doug]

Right, but you've been pulling some of the.

[Aiden]

But I've been pulling money out of the account because there's precedent for that.

[Doug]

Couple million here, couple million there.

[Mike]

Okay.

[Aiden]

Okay.

[Doug]

So there's a lot of rocket companies.

[Mike]

Rapid fire question. Why the. Does the average person care about things going to space anyways?

[Doug]

Well, I don't know. I thought the, I thought Starlink is pretty cool. Like, that's cool, right?

[Aiden]

In like a grand philosophical sense. Either.

[Mike]

Either grand philosophical or more importantly, if you are a person who works at, you know, a normal job and you don't give a. That SpaceX launches however many rockets a year. What are some reasons that you as an average person might care about aerospace industries?

[Aiden]

I think there's, I think there's still a raw fascination with like space and exploration and like furthering human discovery.

[Doug]

Boring.

[Aiden]

That I think, is that I think, is there. I think I still have that in my heart. I was like, fascinated by space when I was a kid. I wanted to be an astronomer.

[Doug]

Putting me to sleep right now.

[Aiden]

I'm gonna kill myself one day.

[Doug]

I'll tell you why we go to space, Doug. I'll tell you why we go to space.

[Mike]

Yeah.

[Doug]

Because I'm a greedy little gold goblin. And apparently these Meteors and these asteroids, they have a ton of gold in them.

[Aiden]

So that was the, that's the other grab on there.

[Doug]

And you could suck it all out.

[Aiden]

Is. I do think there's, there's probably a longer term argument of if you can make space travel cheap enough, you can collect or gather a lot of resources from off the Earth without a lot of the negative externalities of doing it on Earth. You, you have like an potentially unlimited access to like resources and energy that Earth no longer needs to provide you. If the space travel is cheap enough while absolving humans of the downsides of like resource.

[Doug]

Would you guys live on Elon Musk's moon city? Would you move there?

[Aiden]

I'd visit.

[Doug]

You'd privilege.

[Mike]

I would buy. I'd buy an apartment in its metaverse.

[Doug]

Why.

[Aiden]

Why would you use that as the example, Doug?

[Mike]

What a foolish.

[Aiden]

But I feel like those are the two. Like there's the philosophical kind of like human discovery and then I think there's a scientific reason alongside that. There's valuable human discoveries that come with the pushing of human understanding that is required for space travel. And then there's a more practical resource and energy reason on the other side.

[Mike]

Yeah, so like what you said, you know, NASA has pages about this. But you know, a lot of the advancements and technologies that benefit life on Earth come from space technology advancements. So like solar panels, water purification systems, dietary formulas, material science innovations. These are all from NASA, as in NASA has talked about how their work has advanced these things. This is stuff that benefits the average human. On top of that, weather forecasting, that's from satellites in space. Gps, that's from satellites in space. As you mentioned, Starlink communications is, you know, up until now we mostly communicate with our cell phones and Internet on a bunch of ground fiber, you know, around Earth.

[Aiden]

I mean, I mean, could I give a cool example of Starlink, like a very practical thing. When we filmed Tip to Tip last year, which was Ludwig and Michael Reeves traveling through Japan, their crew behind them in the RV used Starlink for a ton of that trip in order to send like proxy files back and forth that they were editing with to upload like final versions of videos. It was super useful and was one of the reasons that a project like that is maybe not straight up possible, but at least way more practical to do than it otherwise would have been.

[Doug]

Yeah, I mean one of the, one of the things that really warmed me to Starlink recently was reading a lot about what was happening in Iran. We don't have to go Too deep into it now. But the government there has total control over the Internet. They shut it down during these protests and the crackdown. And people were like, using Starlink as the only method of getting it out. And some of the agents of the government were going door to door checking the rooftops and breaking Starlink satellites to try, like, but that was the only method. And so, like, it is a way of democratizing Internet access through, you know, it's like there's something to that for sure.

[Mike]

Yeah. And there's also, there's a lot of businesses that you might not be aware of that are based around satellite imagery, which, to be fair, a lot of this is used by governments for defense manufacturing. Let's be real. Yeah, but, but they're real, actual good use cases. For example, the Brazilian government uses satellite imaging to see what's going on in the rainforest and can see like, okay, a narcotics operation is clearing forest land to build an airstrip and to like, build out narcotics factories.

[Aiden]

Or I've seen it for, in the context of like, Amazon Rainforest logging in, like, it's like illegal logging practices in the, in the Amazon. They can see areas or patches that have, like, been burned in, like, really remote areas. So you can identify where, you know where to find like, these poachers or loggers that aren't supposed to be there.

[Mike]

Yeah, so there's a, there's, you know, you, you actually care. I think as a, as an average person, this might reasonably affect your life in some way. But I think the big one to hone in on that we just talked about is Starlink, because that's communications. And let's look at Verizon's market cap. It is $200 billion. Right? Like, just one of the telecoms companies in America has a $200 billion market cap. So if you imagine that Starlink and SpaceX, who own Starlink, can expand that to the point that they are eating giant chunks of the telecoms industry, you're starting to see, okay, a lot of that 1 trillion dollar valuation that SpaceX has, like, maybe you can justify it if that just keeps growing and growing and growing.

[Doug]

Yeah, I guess this is a thing that's unique to this time, but especially to Elon's companies. We're just. So much of the valuation always comes from saying things like that, but it's never from, like, what are they doing now? Like, the money is never there now. The robots are not being sold, the autonomous vehicles are yet to have any real driverless rides. Like, it's like, I get It, I do get it, I understand it. But they more than anyone else get the biggest amount of like gap.

[Mike]

Yeah, no, what I just said is a story about. It's a good sounding story that when you go like, look, here are all the things that make this story might be true because of all these things, right?

[Doug]

And then he's a guy who, you know, provably now, because it's been so many years, has told again some stories. He has, has eventually gotten there. But so many the stories are Homer like Simpson though, because like you know, the guy on Mars, the, the, the drill, the boring drill highways. There's like a lot of things that just got promised and now we've had enough time to be like, those didn't happen. So why are we giving you so much credence on these stories where you're promising the same? That's my only. That's my. I mean there's actually other things. There's again, you know, as a SpaceX investor, not me, but if you were one, one of the big things they're flagging is like, hey, Grok is currently being sued by like 12 countries. France, bunch of your. Because of all the weird like things it was doing with putting people in bikinis.

[Mike]

And well, France can't sue them if they're in space. Maybe they're fleeing laws in international waters.

[Doug]

So now all these lawsuits and like bad PR and like everything that, that is political, it's tied with Twitter and X and it's now all lumped into SpaceX, which is just, you know, it's like it turns something kind of clean and cool about rockets into something very messy. That's the.

[Mike]

All right, so okay, queen, click, queen clean, quick rocket things.

[Doug]

So, okay, while a lot of this.

[Mike]

Is a story, it is true that SpaceX is by far the most dominant rocket company right now. So how many, how many launches do you think happened in 2025 from Blue Origin? It's the Amazon. It's the Jeff Bezos company. We hear all about it, bro. How many rockets do you think they.

[Doug]

I feel like they launched that one with Katy Perry and it was such a PR disaster. They haven't done wrong.

[Mike]

Two.

[Aiden]

No way. It's only two. I was going double digit.

[Doug]

I thought it was 100.

[Mike]

That's suborbital. They don't even go into orbit. So it's like, it's for. It's like a six minute funny, no gravity thing.

[Doug]

Dude, that, that first one was such a. Everyone that was on that thing got like roasted for weeks.

[Aiden]

Wait They've done. Sorry, they've done two launches in 2025 or two all time.

[Mike]

2025, I don't think it's not, it doesn't really make. I don't think 2024 and earlier increases the numbers that much, but I don't have those off the top of my head.

[Doug]

I understand. Katy Perry got so roasted for that she had to start dating Justin Trudeau. That's, that's how far she fell back to earth.

[Mike]

Which is not a good follow up.

[Aiden]

Yeah, it's kind of like famously bad PR.

[Mike]

SpaceX buying Twitter, it doesn't absolve the problem. Okay, Lockheed Martin, they have a space. How many launches do you think they had in 2025?

[Doug]

Oh, I'm going to give them eight.

[Mike]

Okay, close six. So Rocket Lab, this is a public company that launches rockets. They're a legit ass public company. I believe their market cap is $36 billion. How did they do 2025, bro?

[Doug]

Give me 850.

[Mike]

Holy shit. No. Oh my God. Jesus Christ. Okay, no, rocket. Rockets are hard, guys.

[Doug]

They're really hard. Rocket.

[Mike]

The public company that you can go and buy this from, 21. In 2025, SpaceX 165 launches.

[Aiden]

Wow.

[Mike]

They are way above everybody else in terms of launches. Okay. Number of satellites that they personally manage and operate out in space. Planet Labs is a public company. They have like 150 to 200 doing this satellite imaging. Amazon Leo, their Amazon Starlink competitor, they have about 200. Again, they're. Amazon LEO is explicitly trying to like get in on that Starlink competition, right?

[Aiden]

Yeah.

[Mike]

SpaceX again, Amazon has 200, SpaceX has 9,600. Like this is orders an order of magnitude higher, right? Fucking 50 times more. And then reusable rockets. SpaceX is the only one commercially doing reusable rockets. So they save something like 40 to 50% of their launch cost.

[Aiden]

They're the only one doing reusable rockets.

[Mike]

Yes. So everybody has prototypes like China's Lab does, Rocket Lab does, ISRO does. Blue Origins are reusable, but again they're not going into orbit right now, so it's like less impressive. SpaceX is the only one commercially doing it. And each rocket can get up to like 20 times usage.

[Aiden]

Can I. Okay, so let me break away. I, I'm not here to tell you that this company is fully deserving of a trillion dollar ipo. But even without the, the, the, the Starlink part, the promising thing of this company to me has always been space travel in will inevitably become part of humans future in some capacity. Right. Like the, the desire to go back and forth between space and the earth more frequently. Not from like a human tourism perspective. I don't really think that'll be.

[Doug]

You want to go to the moon? 10 minutes ago you said you're gon by.

[Aiden]

Yeah, I'll be one of the guys. Of course. No, but less that and more there will be like more practical, resource driven reasons to go back and forth between space. Like satellites, like as an example, you're, you're so far ahead of the curve and an industry that is.

[Mike]

Seemingly so.

[Aiden]

Critical to the future. I feel like there's so much potential there. That's the value that I've always seen in SpaceX, you know. Xai or not. Sure.

[Doug]

Okay. It's not that I disagree. I do think SpaceX is his best company. But I'll say like here's an analog. Right. The things you're saying about how far ahead they are are things you could have said about Tesla in 2018 or 19. Right. And if you flash forward till now, like for, you know, I got a story here.

[Aiden]

Next year Xiaomi releases a $70,000 reusable rocket.

[Doug]

Yeah.

[Aiden]

First of all back alongside the SU7, we now have a rocket that can go. Yeah.

[Doug]

Chinese manufacturing, I'm sure. And, and energy costs are going to allow them to compete heavily and I think they were maybe a few years behind.

[Aiden]

Okay.

[Doug]

But then also like Tesla since that 2020 period where or 2021 where it kind of peaked, has flatlined like, like the growth of the cars and all things you said that are going to be dominant in electric vehicles. They're so far ahead. In fact everybody else caught up their flatlining their European sales for this year. Down 88 in Norway, down 67 in Netherlands, down 57 in the UK down 40 in France. This is all from like this January versus last year. Okay. They're in three consecutive years of decline in Europe. So like that's in Europe. In China they're worse. So like they're doing okay in America. They're losing other places. So the idea that like SpaceX is going to maintain this. I think they are. I mean I undisputably he's innovated in Samaria or his companies have innovated some areas.

[Aiden]

Like they've had SpaceX absolutely has. Like definitively.

[Doug]

Yeah, definitively. But the idea that he has been really good about that next step where you like first of all maintain the lead and then turn it into a profitable business that can he. That hasn't Been there. And so like I feel like in fact other people are going to step in, take the tech that maybe he's led on Xiaomi and yeah, I'm not kidding, it might be Xiaomi the phone company now car company, soon to be rocket company. That's the way it all works in China, I guess.

[Mike]

Yeah. Okay, hold on.

[Doug]

I'm taking the under is what I'm saying. But I don't disagree with just, just.

[Mike]

Real quick because it's important.

[Doug]

Yeah, I hate this dude. Refreshing it. Escape.

[Mike]

There we go. So Spade. I heard that. So anyway, fact checking whether SpaceX is profitable. They have said they're 8 billion in profit last year ahead of the IPO. So at least at times they are profitable. 8 billion in profit on 15 to 16 billion in revenue. And that's from Reuters. 100. So. So they're not.

[Aiden]

So they are profitable.

[Mike]

So they are. So that's like an important correction. Yeah, yeah. Does that justify buying the thing that's going to lose them a billion dollars a month? Maybe not, but yeah.

[Doug]

I just want to say, you know, this profit again is we're in comparison to Amazon at 100 billion. Google at 100 billion is like.

[Aiden]

Okay, so this actually leads to a question I want to ask you both is I think revisiting this in this moment it. I've seen the profitability of, of a company like Google or a company like Amazon, seeing the list of like the wealthiest people alive right now. Yeah. At least like private individuals. And, and then looking at the like where Tesla's at, where SpaceX might be.

[Doug]

Yeah.

[Aiden]

Where Xai is.

[Doug]

Yeah.

[Aiden]

And isn't it kind of ridiculous that he's that rich? Like does any of this, it seems so unfoundedly disproportionate from how other companies are valued and how other people's like net worths are represented. Like how can this guy who's at best in charge of one company that loses a lot of money, one company that makes $7 billion a year, one company that makes $7 billion a year worth $800 billion.

[Doug]

I think he, first of all he owns a larger portion of it than most other CEOs.

[Aiden]

I understand that.

[Doug]

Right.

[Aiden]

But it's the idea that after everything we know and understand, it's like people that invest, like broadly people that invest in these companies understand a lot of the things that we understand about Elon Musk and these companies as well. So how is his net worth even like allowed to be?

[Doug]

I think he's the greatest storyteller man we've Talked about story. I think he's just been incredible. People get. Get people and the market gets excited about the future he paints. And whether or not that materializes doesn't see. Doesn't seem to matter so far.

[Mike]

I mean, look at the three of us. I get hyped up about all the time and then just say it on this show. Like, no, I mean even in this.

[Aiden]

One out of three people, even in this episode, right. I'm sitting here who. I'm not a fan of this guy, but I'm like, put the gpus in space. That sounds awesome. Like it's. I. I get that. That part. But it seems crazy that this story, that the narrative aspect is enough to like take. I know. My God.

[Doug]

And it's not just him.

[Aiden]

I know my company only makes $7 billion, man. But trust me, it's worth way more than this other company that makes $130 million a year.

[Doug]

Yeah, but I think the. All the market has become more focused on storytelling. He's just the guy that's the. It's so extreme that it, like, it's frustrating when you want to have any sort of valuation make sense. But yeah, I do want to say okay on this subject because we talked about. You talked about GPUs in space. I want to do a quick gaming story. If you guys. Mike, we do a quick gaming story and then I'll.

[Aiden]

Look, I'm going to be honest with you. I'm begging for gaming because we don't.

[Doug]

Put some gaming on this.

[Aiden]

I'm giving for begging to be back.

[Doug]

I want to do a gaming story. So GPUs. Nvidia just canceled their GPU lineup through 2027, possibly beyond. They're just not making gaming.

[Mike]

GPUs gaming.

[Doug]

GPU or like they're not making new ones. And it's because of this canceled gaming is like because of how expensive memory has and because everyone is buying AI chips for this for space.

[Mike]

Like Aiden is buying them and just throwing them into the air as high as you can. Let's get this.

[Doug]

So Jensen just came out and was like, yeah, we're just not doing a new. Like the old chips are where we're going to stop. You just buy those for the foreseeable future. And it's like kind of interesting.

[Mike]

I have a question. Do you.

[Doug]

Graphics are frozen is what I'm saying, right? Starting right now, graphics are frozen until the AI thing clears up or new stuff comes in.

[Mike]

Do you feel that you. You were the head of marketing of gaming, right? At Nvidia do you feel like you leaving made Jensen say what's even the point?

[Doug]

I feel like I wish I was there now because knowing this, you are getting paid to do no work or.

[Mike]

You think they don't let you off? You think they're like, hey bro, your corner?

[Doug]

No, this happened for me during. There was like a crypto wave in 21 and all the cards got bought up by crypto miners. And they were like, hey, just take the summer off. Don't market because we can't sell any. And people are mad. They can't. Like it's all sold out from everywhere. It was. That was it. Like, just don't. Just don't like cut down the marketing.

[Mike]

So I just sat there and cut down the marketing.

[Aiden]

Just wordless.

[Doug]

So that's what they're doing right now. I'm sure the marketing team's just chilling. Anyway, I want to say, okay, two more gaming stories. Because if graphics are frozen now, there has been this big push from a bunch of different laid off AAA developers to make essentially Overwatch clones. This happened recently with a game called High Guard that I don't know if you guys heard about it, it just came out. It was like, it's not Overwatch, but it's. It's like a hero shooter 5v5 thing.

[Aiden]

You better not be talking shit about High.

[Doug]

You're a High Guard guy. No, I wanted to ask you about it because all of these, these Ex Blizzard, these X Riot X, they all have made similar type of hero shooters and they are all flopping. The big one was Concord for 100 million at Sony. But now High Guard, they just laid Everybody off like two weeks in. They had 100,000 people. At launch day, everyone stopped playing and they all got laid off. And then this is not necessarily a hero shooter, but like two days ago I saw a thing from Riot Games where they have been teasing this fighting game to XKO for like eight years and it finally launched and everyone is laid off in two weeks. Like it's like, so what? I'm not even. This is just a thing of like what is going on in gaming. What do you guys think is happening? That triple is. Triple H is dead outside of like Fortnite and all these companies are doing these big high profile flops and nobody seems to be able to adapt to what gaming is now.

[Aiden]

Maybe you have a better window into this than I do because I've been feeling a similar question. I've been wanting to talk about High Guard specifically because of how low the numbers have been. And how I had heard about this. But with 2xko, something that surprised me was I feel like they were willing to let this game simmer for so long. The build up time was incredible. The fact that they could announce that this game existed, work on it for so long, keep everybody employed through that time period, then launch it, have kind of a weird timeline of marketing and beta releases that I actually think need to launch it like 12 times. Yeah. That's why I never knew when the game was actually out. So by the time that the game is actually out, it's like, hasn't this been out? I don't. There's no hype anymore. That was my outside perspective and that's ignoring that. Like maybe the genre is like tough to access and other stuff. But you, you, you were willing to go through all of these layers of friction to get to the release and then you only have the game out for a short period of time. Longer than two weeks. In 2xk, sure. Right. It's been like. I think it's been like six.

[Doug]

But it was quick. Not. Maybe it is.

[Mike]

Maybe since the official release.

[Doug]

I'm not sure since the official release.

[Aiden]

It'd be good to clarify, but I'm. All I'm saying is why are you willing to wait that long for the game to exist but not enough time to see if you can turn things around after it comes out? And if you have any insight there or to the broader question that he asked, I'm very curious.

[Mike]

So like I don't have like insider knowledge on this. Like, you know, technically I was a game developer in the most like technically sense. So you know, but you're a streamer, you're plugged.

[Doug]

I mean you have a chat. You know what I'm saying? Like this is. Here's what I'll say on that note. Yeah, the one, the developers of High Guard, one of them got kind of mocked for this. But he basically blamed gaming culture now, including streamers, for the reason his game didn't died on release. He said people made fun of our videos on social media. The comment section were flooded with memes calling us Concord 2. We got negative reviews from users who didn't even play it. And that's why we didn't. And it's not like I don't think those things are true, but I feel like that's an insane cope that doesn't jive with how I see games that succeed. Like the game Arc Raiders is crushing. So you know what I'm saying? Is it just a good game Thing versus a bad game thing.

[Mike]

I would say an anecdotal thing and then a maybe business side anecdotally. I have not played many AAA games the last several years. I've just become less interested in them and have had less time for games. And so I don't want to take on a game that's going to be 50 hours. But last weekend I tried Death Stranding 2. Hadn't played the first one, but I was like, ooh, this could be really cool. And to be honest, I was pretty disappointed. It seems like a cool game. It's not like it's bad or anything, but I just thought it would be more. I thought it would be more different than what I understood the first one to be. And it seems like it's that, but with a new coat of paint and my. Whenever I try a AAA game, obviously it's extremely subjective, but for me it doesn't feel like that much stuff is different than five years ago or 10 years ago. The graphics are nicer, but I don't care very much.

[Doug]

Those are frozen now, so those are frozen anyway.

[Mike]

Like that's not a drive driving factor. I want like, like compelling gameplay that gets to the deal quickly. I tried Pikmin 4 recently as well and after 45 straight minutes of characters talking and no gameplay, I was like, I don't care. I want to just play a game like Pikmin Verse. And so he doesn't get it.

[Aiden]

He's another lord.

[Doug]

He doesn't get how Olimar is like so deeply attached to these anecdotally.

[Mike]

I think that indie games have done a better job of being innovative and being creative and compelling. And I think that you see that in the market Peak. Absolutely fucking crushed. And actually I talked to one of the Peak developers at the Streamer Awards and he was talking about how he was part of the team that made Another Crab's Treasure. They had worked, I forget how many years, but it was either three or seven years on this game, right? And they finally put it out. It's like Dark Souls esque kind of game. And it did okay. And then they spent three months on Peak and it becomes one of the biggest games of all time. And he was like, I feel so confused about this because like the thing I barely put any time into is one of the biggest gaming sensations of all time. And it's a nice, I think, example of how much creativity matters more than just like production value.

[Aiden]

I knew him in college.

[Doug]

Did you really?

[Aiden]

That guy? We played Melee together.

[Mike]

Oh right, I forgot he mentioned that.

[Doug]

Yeah, it's crazy.

[Aiden]

It was so surreal to see him there because it was like this weird thing of like, I haven't seen you in so long, why are you here? And then it's like. You mean peak? It's like we used to play Melee at the UW Smash Club.

[Mike]

Another funny coincidence is he was like. We were talking, I was like, oh yeah, my brother makes indie games. He's like, oh, what games? I'm like, oh, he made the Stanley Parable. And he's like, your brother's Davey. Like he's had all these conversations. He's really helped me out. And so this dude has like a weird personal connection to our lives. But it's cool in that.

[Doug]

So all you're saying like, so at the same time is like this game around the same time that this game is blowing up, everyone's getting fired.

[Aiden]

Yeah.

[Doug]

Mugenics. I don't know if you guys heard about this game. It's a new cat indie robot. It's selling like a million copies instantly. Like creative stuff is breaking through at a greater level than ever before.

[Mike]

Yeah.

[Doug]

Indie people with three person studios are making absurd money. But like the triple A stuff, it takes eight years to make and is like behind on what consumers are wanting at the moment is like it's getting destroyed.

[Aiden]

I feel like the value proposition or like the risk is just so much different than it used to be. I imagine there's a world now where indie devs have actually a more reasonable path to making and getting their games out there in a shorter period of time with relatively less cost than a AAA studio could which were the primary vehicles for developing and publishing games maybe 10, 20 years ago. So like this old business model of how AAA studios address like address the market doesn't really make as much sense anymore. Yeah, it's just tougher competition. And then also the. Or, sorry, the risk reward of taking that approach to publishing a game like does make as much sense. The other thing I think is huge, that I think about a lot is online gaming, when we were coming, when we were kids, wasn't that prevalent yet. Right. So this idea of this big continuous live service experience was very new and people were creating games that were like the first to market in that area. But now after all of the time that has passed, giant live service titles are established.

[Doug]

Yeah.

[Aiden]

So when your new game comes out, when your fucking Overwatch 45 clone comes out, it isn't. It doesn't just have to be good by its own merits, it has to prove its Value within a genre of things that already are like stable and have a lot of value. You're competing with like Overwatch that already exists. You're competing with Valorant. You're competing with Counter Strike. League of Legends. These games that have established player bases and followings that people will go back to for litter in some cases like cs.

[Mike]

Decades.

[Aiden]

CS has been around for decades.

[Doug]

Yeah.

[Aiden]

League is coming up on 20 years. Like these games are things that people continuously come back to and your game needs to out compete and provide something that those games don't already peel you away from that. And this was actually my problem with playing platform fighters that weren't Melee because I had played Melee for so long and Melee is so good in my eyes that anything that would come out that was vying for my attention in that space, like that old game icons that eventually got published in a different form or even when Rivals 2 came out. And I think Rivals 2 is a really fun game genuinely. And I do. I do not have financial ties back by the way. I'm not financially tied to that company.

[Mike]

So you're just financially tied to the guy who owns. Yeah.

[Aiden]

You just need him to be able to hold on. Okay, fair enough. Fair enough. Maybe there's a conflict of interest there. But genuinely, when I've played Rivals 2 for the first time, I was like, this is the first platform fighter I have played besides Melee that I'm significantly enjoying. But I never got into it because it's like I could just keep playing.

[Doug]

You already have the friends and the tournaments and everything. The scene. Yeah, I agree.

[Aiden]

And I think think in every game that's getting dropped, especially with these lofty expectations of being a continuous live servants like log on and play a bunch thing that isn't like this a story game that can like crack through and like have value for a short period of time. And maybe you put a sequel down the road. Like these community or multiplayer experiences, they. You, you are just. You're putting it out there and hoping it beats out all of these Titans that didn't exist.

[Mike]

Yeah.

[Doug]

I heard this from a game developer friend which is like, like they're like death stars, you call them. Which is basically Fortnite League of Legends. Like these.

[Aiden]

I can't even believe I forgot Fortnite.

[Doug]

There's these massive live service games that have billions of dollars pouring in. They have new content all the time. They have established legacies.

[Aiden]

Yeah.

[Doug]

And because they make so much money, everyone wants a slice of that pie. Everyone's like, if I could just crack through which to be fair, a game like Arc Raiders did, it's a live service game that is like doing really well.

[Aiden]

Yeah.

[Doug]

Is make money. If you crack through, you are. You are hitting a cash geyser. The oil comes out of the ground and you're set. But it's so difficult because you're competing against the best of the best with infinite resources and time. And so I agree. I think too many Triple A studios swung at the King and missed basically.

[Mike]

It also reminds me of when I and maybe you guys experiences too when I worked in esports production.

[Doug]

Yeah.

[Mike]

Worked at a company called ESL and it did. We did. I was working on like medium sized gaming tournaments, right. And I remember I did a show called Trinity Series which was a Hearthstone tournament. And I was. We were allotted because it was very creative people like whoa, this feels so different and unique compared to the average tournament. And I reflected on how much time I actually spent focusing on the creative side of the tournament. And it was maybe 10% of the time, 90% was about coordinating all the production assets and the team and the logistics and getting the ideas into place. When you have that much production scale and size, the vast majority of time is just spent like just getting the ideas even remotely implemented.

[Doug]

Right.

[Mike]

And then I went to YouTube and I was utterly refreshed by how the inertia between I have a creative idea and it is out there in the world is a hundredth of the amount of space. I just imagine that for AAA of like if you're the Assassin's Creed developers and you're like I want to do something like crazy and experimental and different, that you might have one chance to do that for the entire next game.

[Aiden]

Right.

[Mike]

That's all you can afford. That's how you can do versus an indie developer who can like just crank that out every week.

[Doug]

Yeah. And it might not look as polished, but if it's fun, it'll just take off.

[Aiden]

Nowadays I used to like working in. One of the reasons I left working in esports was the frustration of the dynamic of how ad funding or heavy marketing was the. The lifeblood of esports for so long. Right. So you had to like kind of pander to and create tournaments in a style that the advertiser, especially if it was a white label project looked for. And what I mean, white label for people who don't know it means like when your production company or your company doesn't, you're not at the front end of the presentation of the product anymore. So like if Chipotle would Approach us and be like, run a Call of Duty tournament. Nobody knows that it's my studio making the tournament. They just contract us. Chipotle is the brand on top of. And Chipotle would have all these restrictions about how they want the tournament of the format to be. And I was like, this is definitely going to be bad. Like, this isn't what the players want. This isn't really what the viewers want.

[Doug]

But it's what the money wants.

[Aiden]

But it's what the money wants and you would have to do that. And I think I got frustrated with that part of esports and I was like, you know, this thing I dreamed in working up for so long, I don't want to fucking do this anymore. I'll go be Ludwig's boy. I'll be lovely boy instead. Or I wanted to go work at a company like Riot, where at least you were the first part. You were doing stuff internally or first party. And my favorite esports project I've ever worked on was this Melee League I did in SoCal in 2024. And it was because I had full freedom to do and structure things in whatever way I wanted. And I think in that space, I am a true expert. Like, that is genuine. If I could pick one thing that I'm an expert at in the world.

[Doug]

It'S rocket ships and this and rocket.

[Aiden]

Rocket ships. Getting things in it, getting GPUs into space. And I toss them really high. It's crazy.

[Doug]

You've been breaking quite a few, but, like, you're getting there. For sure, you're getting there. It's expensive. But.

[Aiden]

But the freedom to design that competitive, that scene and that, that league in the capacity that I wanted to was the most fun I've ever had with it esports event. And it's because. And I imagine indie developers feel that.

[Doug]

I just heard.

[Aiden]

I don't want to.

[Doug]

I don't want to leak too much, but I heard from someone who worked at a agency that got the High Guard contract to help them get, like streamers and stuff. Basically their words were that they did.

[Aiden]

Start with an L and end with an Odin.

[Doug]

This. They were like, hey, we tried to tell them, like, some of this stuff is not going to work and the money didn't want to hear it. And so like, and then you flash forward two weeks and everyone played off. Like, it's like, it's. That's that quick nowadays. Like, if you don't. If you aren't hitting the culture or the creativity, it's like people just don't Play it. And then all of a sudden all. I don't know. It's crazy. Anyway, guys, I want to move on to different talks. We're on time here where there's like 10 different things that hit. I want to talk very briefly. It's a real tone switch. You ready for this?

[Aiden]

Yeah.

[Doug]

The government shutting down again.

[Mike]

I feel like my government. Too much production.

[Aiden]

I liked when we talked about gaming. I love talking about games.

[Mike]

All right, let's get, get one sentence review and then we're going to talk about the new Diablo 2 expansion.

[Doug]

Okay, fine, we'll do one sentence on it. Basically, Department of Homeland Security is the only part of government shutting down. No, I'm sorry, the. Whatever it ladders up into. Actually it's dhs. DHS is shutting down. They couldn't get funded as of Saturday morning 1am it's over. There's no money. That being said, because of the unique quirk of the big beautiful bill, everything in the DHS except for ICE is unfunded. But ICE is still funded. So even though this is all about ICE, like that, all the anger is about ice. The reason they're freezing it is about ice. Ice is still funny because they have 70 billion in cash from the, from the big beautiful bill. Everything else, which includes like the border patrol, I think virtual might be funded as well. But like, like.

[Mike]

Well, like tsa, right?

[Doug]

Tsa. Yeah, exactly. That's the big one, people. There's a couple more of them, but these are just the general idea. Yeah, tsa.

[Aiden]

Yeah.

[Doug]

I guess the main one we're going to realize is tsa. It's the Transportation Security Administration. Yeah, I guess that's, that's the main thing you're going to see like in terms of feed, so that's being unfunded. So some people are going to work knowing they'll get paid back pay when this gets figured out. But again, we're back to it again where it's like the whole funding thing. I will say the main things comes down to if you can pull us up. There's 10 demands. This is what they need for the vote, which is basically no masks, require id, protect locations.

[Mike]

From who? Who's demanding.

[Doug]

This is demand from the Democrats. Okay, who voted against this? Only one. I think it was Fetterman. Flip sides voted with Republicans. I think Somerset, I think Massey or someone might have voted on the Democrat side. The point is they don't have a filibuster brief majority to get the bill through until they agree on this. So they are debating now. But my understanding is because the. There's like a recess, they're not able to vote for 10 days, at least 10 days of the shutdown. Now, again, we'll cover this more if you guys have a bigger deal in terms of the shutdown expanding. But my understanding is like, it's like, it's just a political flashpoint right now around, you know, we talk about.

[Mike]

I mean, these, these demands seem extremely reasonable.

[Doug]

Yeah. They seem like the basic first step.

[Mike]

Yeah.

[Doug]

Right.

[Mike]

Agents should not be wearing masks. They should not. They have to verbalize who they are and their id and they need to display their agency name and not just be like mysterious people showing up in vans like this. Seems.

[Doug]

Have you seen it? There's like a, you know, it's a bit of a rip it on Democrats kind of meme, but it was like Republicans, we want to kidnap people and put them in unmarked ventures bands. Democrats mark the bands. Crack me off.

[Aiden]

Does it? Does. Yeah.

[Doug]

So I think this is a basic first step. And I'm surprised, but I. Yeah. You want to jump in?

[Aiden]

Well, okay. One, I have a. Please clarify for me. Yeah, The. I don't. Is the idea that they're using the weight of the shutdown as it pertains to a bunch of other things. Things to get changes to ICE that remains funded currently, no matter what.

[Doug]

They have no other lever to get at ICE than this. This is what ICE ladders up into. Just the fact that ICE is already funded is not their problem. Like, they just have to do it this way. So this is like the best thing they can do to like, get changes to ice.

[Aiden]

Look, I hate, like, it just feels like. You ever seen that like, Chuck Schumer parody video where like Trump goes too far again and then the guy is dressed up like Chuck Schumer. He's like, that's not very nice. They shouldn't.

[Doug]

The strongly worded letter kind of. Yeah.

[Aiden]

And I think I was listening to a daily episode about this and the correspondent was talking about the Democrats strategy with this. With this shutdown and how they view the previous shutdown as internally. Democrats view the previous one as a success because. I know, I know. And I was like, I don't understand.

[Doug]

Didn't they cave at the last second?

[Aiden]

And they view it as a success because it was a flashpoint for raising awareness about Democrats. Better support for healthcare than Republicans. Kids.

[Doug]

It probably did do that. But that's.

[Aiden]

And I. And I was like, yeah, maybe it did that. But it didn't. They didn't get any change. I was like, what are we fucking talking about, dude? And this. I. I, look, this is. This is obviously my bias leaking through, but it's the same reason I asked Pete at the end of the last episode. And I think one of the things you were trying to hammer home with Gavin Newsome when you were doing that interview was like, no, you don't understand. Like, like, you. You can't just. I get that you're positioned to win the next election, but you can't just win it.

[Doug]

Yeah.

[Aiden]

So you have to make substantial changes in the way that allowed these problems to.

[Doug]

Yeah.

[Aiden]

Exist in the first place.

[Doug]

I will say. Okay, I'll.

[Aiden]

I'll.

[Mike]

I'll.

[Doug]

Straw. Steel, straw. What's the good one? I'll steal, man. This one.

[Aiden]

Straw man it.

[Doug]

I'll cover some straw on the steel, man.

[Aiden]

I like.

[Doug]

You punch it and you think it's a straw man, but it's hard.

[Aiden]

Let's do a lemonade stand. Let's do a lemonade stand episode where we only straw, man. Like, we just.

[Doug]

I'll see you, man. And then I, you know, I. I feel the vibe of this, and I agree with the vibe of this in general, but I feel like people are expecting in this moment right now, a miracle from a party that has nothing. They don't have the House. They don't have the Senate.

[Aiden]

They don't. They can't.

[Doug]

They don't. Unless you expect them to grab an AK47 and assort the capital.

[Aiden]

I don't expect that.

[Doug]

Like, do you know what I'm saying? Like, the reasonable thing they can do is, like, try to make demands on things they have leverage on, which is this. And I think for a temporary stopgap before they can win elections and make real changes, these changes seem like a good, like, baseline. All Americans should agree. Why the masks? Right. You know what I'm saying?

[Aiden]

I agree. I agree in the sense that. Yeah, sure. But I feel like I'm a. Maybe I'm a. Maybe I'm a fucking moron, dude. But. But it's like we're. We're going for another shutdown. Strat. When. When? A month ago. You walked.

[Doug]

Oh, yeah, No, I.

[Aiden]

That's how I. That's how I felt.

[Doug]

Like, you just crazy and you know, but they walk on this one. Right? You know what I'm saying? Like, it. Then. Yeah, I agree with that in general, but I think I'm just more.

[Aiden]

We need to go back to gaming, dude. Go back. I'm getting too. I'm getting too riled up. I need to talk about High Guard. You know what I've been doing is every. Every week I've been checking the High Guard concurrence on Steve.

[Doug]

I'm just saying I'm not going back to gaming.

[Mike]

We're going back to High Guard.

[Doug]

I'm not voting for the DHS funding bill until they fund High Guard with it. Until they keep dedicated servers up for High Guard.

[Mike]

No more masks on the developers.

[Doug]

Developers got to be unmasked, I think.

[Aiden]

Okay, now I actually do have a.

[Doug]

I mean, I got. You want to do. I got. I got cards.

[Aiden]

Go to another thing.

[Doug]

All right, here's one. This is for Doug. You watch Super Bowl, Doug?

[Mike]

I did watch the Super Bowl. I tried to pay as little attention as possible because the game sucked and the ad sucked.

[Aiden]

Hey, it was, it was in my.

[Mike]

Peripheral at all times.

[Aiden]

If you love kicking, it was a great game.

[Doug]

No, you're one of those guys. There's a real master class in defense. Shut the up.

[Aiden]

In kicking.

[Mike]

No, it's a master class in defense if both teams are defending. Really? It's boring. The whole thing is boring.

[Doug]

It was not a good game. And I agree the ads were bad. But one bright point of the ads was we had a little bit of an AI war.

[Mike]

Ooh.

[Doug]

A little bit of a drama. There's a little bit of a. You know, and so this is a little bit dated as we say this, but it's going to go into something else. Which is. Which is that gemini OpenAI.AI.com. who else meta bunch. A bunch of. There was some weird AI slop ads. Like you see that vodka ad where there was just, just literally it was.

[Mike]

A lot of AI generated content.

[Aiden]

Was the vodka one actually AI generated? Cuz we were watching it in the office and we're like, was this just AI?

[Doug]

Yeah, it was like a generated slop ad.

[Mike]

And then terrible. Oh my God. The, the like personal, like cleaning, robotics. One seemed to be all AI. That was just nonsense.

[Doug]

So there was some weird slop in there. But the big thing was these big companies that are again all spending hundreds of billions of dollars are kind of like muscling in each other's territory and trying to stink their claim as what makes their brand different. And the big thing, the big argument was between Anthropic and OpenAI. Where Anthropic is like, hey, we don't do ads. That's our whole thing. They did these, they did these ads. I don't know if you saw them, where they had like the guy.

[Aiden]

Yeah.

[Doug]

Pretend to be an AI and he's.

[Aiden]

Like, hey, yeah, they had four. I don't know if they all rolled at the super bowl, but I had seen this on Twitter the week before. They released four different cuts of this ad that basically have the same premise.

[Doug]

Yeah.

[Aiden]

And this rolled at the Super Bowl.

[Doug]

Here's the funny thing. My understanding, because I read a lot of ad breakdowns after the super bowl because I do it for my show and it turns out Margaret research showed that most like the average like 46 year old guy watching this while drinking a beer thought this was genuine. So like if you're watching this kind of half, you're just like, this is kind of weird. Like they, they thought they were presenting this as a good thing. And so it's like this, this, as.

[Aiden]

Far as I can tell, this did not backfire.

[Doug]

Like a little bit of backfire. Like they, it. The main takeaway from the ad is like AI is kind of creepy or like weird. It's like they were also, they were.

[Mike]

Trying to, they were attacking OpenAI chatgpt adding ads. Right. That was like their main attack. Yeah. And you know, which is a legitimate thing and we've talked about that in the past. But then also, I guess you said they just started, but ads aren't in it yet. So it's also to the average person who's not extremely online.

[Doug]

No, they are in it.

[Mike]

Right.

[Doug]

Look, I saw. Maybe I'm crazy, but like if they.

[Mike]

If they are, they started like a couple days ago. I don't.

[Doug]

They started after the Super Bowl.

[Mike]

Right.

[Doug]

I, I saw.

[Mike]

So it's like it's an attack on ChatGPT about, hey, these guys are doing ads and we're not. Which is very, you know, a very valid line of attack. But it's bizarre when the average ChatGPT user is like, I don't get it. I don't have ads in my thing yet. But I guess they're just getting ahead of it because ads are supposed to launch soon, I believe. Dude. Sam Altman. So the head of OpenAI said he.

[Aiden]

Did a gigantic reply to this, didn't he?

[Mike]

The good part of the Anthropics ad. They are funny. And I laughed. But I wonder why Anthropica would go for something so clearly dishonest. I guess it's on brand for anthropic doublespeak to use a deceptive ad to critique theoretical deceptive ads that aren't real. But a Super bowl ad is not where I would expect it.

[Doug]

He did like, he did like a tone policing kind of thing. He also tried to make them out like the big bad rich guys. You see that?

[Mike]

Oh, yeah, yeah. Anthropic serves an expensive product to rich people. We are glad that they do that and we're doing that too. But we also feel strongly that we need to bring AI to billions of people who can't pay for subscriptions.

[Aiden]

Hey, only one of those. Only one of those companies went to the international and one to be one dandy and dota.

[Doug]

Oh, you're talking about.

[Aiden]

And it's open AI.

[Mike]

It's okay.

[Doug]

He's gonna try to bring back to gaming every time now, no matter what.

[Aiden]

How can I?

[Mike]

That's why this is about high.

[Aiden]

That's why the Wario 64 in 2026. This podcast is going back to its roots and we're bringing gaming back.

[Mike]

It's about gaming. It's about business, about Gerald Ford. A lot of people asking for Gerald Ford in the last comments, by the way.

[Aiden]

A lot of people.

[Mike]

Very few people cared about P. Buttigieg.

[Aiden]

And if this episode episode gets to 10,000 likes, we will bring Gerald Ford on the podcast.

[Doug]

Dude, can you imagine? We did an AI Gerald Ford discussion. Our worst rated episode. You pull us out. This is what they look like, but this is what the open AI ads look like. They're not.

[Mike]

They actually launch. Okay. Okay.

[Doug]

They're not as intrusive on frame one as you'd expect. I guess it's like they. They have a line and they separate it at the bottom so they'll give you your answer and then it'll be like, here's something related to your answer. Not. It's not necessarily like, hey, bud, you. You've been feeling sad lately. You know, give you a pick me up is like nerds or whatever.

[Aiden]

Xanax.

[Doug]

For me, it's always candy. If I'm depressed, I want candy. It's a little.

[Mike]

It's a little dystopian. I'm realizing I haven't seen, to be honest.

[Doug]

Here's what I'm going to say. Okay, let's get crazy with it. I want to get crazy with that. This. I've been waiting to do this. Don't show my screen yet. I'm pulling up. I'm going to convince Aiden you're an AI guy. Lately I've been feeling like that is moving so fast in the world of AI that I have to get. I still think it's a financial bubble, but the tech is like getting crazy in some areas. And I'm going to convince Aiden and this whole podcast is going to be ruined, dude. Okay, I'm going to show you.

[Mike]

Wait, were you not convinced by his to do checklist app?

[Doug]

That's. Yeah.

[Aiden]

Again, it's weird.

[Doug]

I've always known it could do something simple like the checklist app. And that's why for me, it wasn't like, oh, this is a crazy breakthrough. But it's like, damn, it's pretty good. Like, I just type it and it does it. But here, this. This is your goat. Rutger Bregman, dude.

[Aiden]

Oh, rut.

[Doug]

Rut mean rut. This guy you talk about. You read all his books. I bought you his book for Christmas. Another one?

[Aiden]

Yeah, I like Ruger.

[Doug]

This guy. I mean, his example, but he has a different post where he's like, hey, hey, why is there some people completely sticking their head in the ground on this? I.

[Aiden]

He's.

[Doug]

He's not an AI guy by any stretch of imagination. He's a total, like. I mean, how would you describe him? What would you, like, what do you think his philosophy is in general?

[Aiden]

I don't know, like. Like a humanist. He's. He's very. I feel like he's very positive about humanity and how we can use our innate goodness towards making all of our lives.

[Doug]

He's like anti fascism, anti big business, you know, all that stuff. But this guy's like, hey, I needed to do a teleprompter app and I was going to buy a $100 one, but I vibe coded it in two prompts. It worked better. Like, he. I mean, he has a longer thread on this. He has a. As a blog, but. And I wonder if I could.

[Aiden]

It's weird he didn't text me about this.

[Doug]

Again. He's talking about us. Wealth, concentration, all this stuff. I'm just saying I'm seeing more people who actually try it be like, damn, some of this shit's crazy. And I think. I don't know if you had any examples from Seed Dance, but I saw it was this new Chinese video, AI. It's crazy. Like some. It's obviously not. It's still slop. I understand that. It is still at its core. I watch it, it's like always the same fucking upgraded version of Sora.

[Aiden]

I'm going to be vulnerable where it's.

[Doug]

Like Rick and Morty fucking dancing in a. You know what I'm saying? It's always slop.

[Mike]

Yeah. This. This just as an example is a prompt of. Of this is AI generated video of Brad Pitt and Tom Cruise fighting, arguing about Epstein, you killed Jeffrey Epstein.

[Aiden]

You Animal.

[Mike]

He was a good man.

[Doug]

He knew too much about our Russia operations.

[Mike]

He had to die.

[Doug]

And now you die too. Yeah.

[Mike]

So this is, this is from ByteDance, which is the company that makes slash made to TikTok.

[Doug]

Yeah, they've been trained on your TikToks.

[Aiden]

I got a couple of things about jump in one, because I had seen a bunch of these videos are going around now, right. And I think the reason that this is sort of catching on a little is I would say that these videos look better than previous iterations of AI video software that I have seen, or at least most of them. Right. And I think by the nature of the product, this, it means it's going to improve over time. And I think on Twitter you do see a similar range of reactions to these things. Of, this is stupid, it looks bad how this is so obviously AI whatever. But I do want to point out that I think in the past week, and I don't mean Tom Cruise and Brad Pitt fighting, I mean little videos that have taken me as someone who, I think as someone who grew up on the Internet, has a relatively. Does a relatively good job of like parsing whether or not something is, you know, real or fake in. Is this a scam? Is this not a scam? Like, this is the first week with AI videos where I have seen a couple things that have been presented to me and I'm like, oh, I thought.

[Mike]

Is this like Twitter or something?

[Aiden]

Yeah, just on Twitter. Just people uploading things on Twitter that have been like, fed to me through. Through my algorithm. Right.

[Mike]

And I.

[Aiden]

And it took me way, like, it took me longer to figure it out and realize that like, oh, this is definitely like, haha. It's so funny to make fun of the AI videos. This is just gonna get.

[Mike]

This is gonna get worse.

[Doug]

Yeah, there was that viral rabbits and the trampoline thing where a lot of people were like, confirmed it was real and it was AI and that was like. That was one of the big moments for people. Here's an example. Rucker retweeted this. This is Josh Dawes. I'm 48 and I've worked as a software engineer for 30 years. I've grown numb to the Silicon Valley hype machine. My default posture is meh. We'll see. What I've seen and experience firsthand in the past two months is not hype. Ignored at your point peril. Now again, I do think that a lot of this is a little bit too far on the oh my God side, but I gotta be real here. The Advances are getting faster and they are real. And the more I dig into it, the more I see real concrete examples of certain air. Like, like the big one, the one that kicked off the episode we talked about last week or two weeks ago was anthropic. Putting in a thing that allowed a legal add on.

[Aiden]

Right.

[Doug]

And like I've seen, I had a blog that kind of broke down how it's impacting the legal field. And it's just like the one I think about it. It's. I think of my entry level jobs, I think of things I did when I started at Twitch. Like I managed the email newsletter and I managed the front page. And I know for an absolute fact that everything I did in those jobs for again, probably a year and a half to two years as I got started in the industry can be done in one prompt. Now everything, the entire email I created everything. And so that is something different like that. And then you see the Microsoft guys and they're like, every white collar job is getting automated in 12 to 18 months. And again, I'm naturally skeptical. As you know from this podcast, I'm naturally skeptical of all this stuff. That being said, I'm not stupid. I do test these things and try them out. There is. It's breaking a line. It's like it's getting more.

[Aiden]

Yeah, yeah. I think the idea, like even with what I'm saying, right. I'm not here to say that like AI video is this flawless thing or something. It's the fact that I'm hitting this point for the first time in a few years where I had a passing thought of I wasn't sure. And then being scared of that feeling and realizing that this trend will only increase, I will be more. I have to be even more conscious than I ever was of the idea that this video is just entirely fake. Fake.

[Doug]

And then I saw another thread that really convinced me. It was a. It was a filmmaker I think talking about. He was like, listen, the scene where it's me and Doug in a room doing dialogue, they're not going to replace that. But this scene that opens it where it's like a. A helicopter shot of London that goes into a window and then starts the scene, we can make that in two seconds now. And if that's good enough to be not able to tell that just, you.

[Mike]

Just saved hundreds of thousands.

[Doug]

You saved hundred thousand dollars. And so. And again, this is as bad as it'll ever get. See Dance two out of nowhere. So I'm just getting more real to the idea that this is a. Not just an issue, but like a really big issue. Like a really, really urgent issue that I think even if it. Again, I'm actually more of a skeptic on AGI, but on, like, I guess what I'm realizing is how most jobs don't need AGI, Guy. Most jobs are like pattern matching. Basic. Most white collar jobs are like, see a couple things. Think about one, just choice on that and then do an action.

[Aiden]

Yeah.

[Doug]

Yeah.

[Mike]

Well, let's do a little role reversal. Wait, let me make a pitch to you guys about why this stuff is overhyped. Oh, interesting.

[Aiden]

Wait, I want to.

[Doug]

I want such a different episode.

[Aiden]

One quick thing about.

[Doug]

I'm getting so high.

[Aiden]

Speaking about. I'm withholding it. I did want to mention Sea Dance. I think it was today. Disney and paramount both sent ByteDance a cease and desist 100% like, already. And they seem very upset. One of the quotes from one of the partners with Disney's law firm said ByteDance's virtual smash and grab of Disney's IP is willful, pervasive, and totally unacceptable. Yeah, because, I mean, all of these examples are like, I'm watching Mario and Luigi, like, fist fight.

[Doug]

Yeah, yeah, yeah.

[Aiden]

So of course there's gonna be this reaction, but it's happening very quick.

[Mike]

And I just want to confirm when you saw that you. That you were unsure whether it was real or not.

[Aiden]

Yeah, I did think that was the one where I was like, I'm pretty sure this is real.

[Doug]

Mario did fight Luigi.

[Aiden]

This is this.

[Doug]

They both love Princess Peach. So. Yeah. Okay. All right. Well, I'm very excited for this episode because I. I guess I'm being the fucking AI holy shit guy. And you're going to. You're going to downplay.

[Mike]

All right, so two weeks ago, we talked about AI coding. I think that there were valid criticisms that we focused too much on hype as well as a lot of the people I quoted were basically people in AI who are highly invested in AI succeeding. And I think that's. That is a fair criticism. I want to remind everybody I'm. None of us are experts, so I'm trying my best to learn. But this week I made an effort to go and specifically research and present some other sides, including things we didn't get to two weeks ago. So in terms of just like, raw numbers, we just talked about it. A bunch of new models releasing. This was like 10 days ago, anthropic released opus 4.6, which is like the even better coding model of what we had been talking about and then 28 minutes later, OpenAI drops GPT 5.3 codecs. So they're like literally trying to snipe each other within like an hour of dropping the hot new thing. So this keeps going, going. And I reached out to some AI or, excuse me, software people who are not like, you know, tied to the AI space. So from what I've been hearing for four or five people that I spoke with in some situations, this stuff truly is like mega advanced in terms of the coding specifically. A lot of people do feel like there's a major shift in the past few months. And you see it like this guy right here who just vibe coded a thing and is going, holy shit, this is different from what I.

[Doug]

Can I read his line real quick before you go on, because I didn't. This is what I was looking for. And this like, this coming from this guy, knowing what we know about Rucker. Yeah, it's like a really crazy thing for him to say. That's what kind of woke me up and made me so. He said, I'm increasingly annoyed by how many journalists, academics and large parts of the left, which he is on, get everything wrong about AI. So many smug dismissals from people who clearly don't use it much or don't know how. I have multiple what the fuck moments every week now, for example, and they talk about the teleprompter thing for context. I've never written a line of code in my life, but I was able to give Claude two rambling prompts two minutes later. It works better than the fancy hundred dollar software with patented voice track technology. Technology. Most surreal tech experience I've ever had. And it's all moving so much faster than I expected. AGI is not even a clear concept to me, but I do know what's available now is just fucking impressive and only get better. It's totally unserious. To keep dismissing the greatest technological revolution of our time. Sticking your fingers in your ears. It must be BS comes. These hundred marks are normal. It's not helping anyone.

[Mike]

Wait, hold on. Say that sentence again.

[Aiden]

That was crazy.

[Mike]

Single word.

[Aiden]

I know that we complained about the screen.

[Doug]

You guys can read.

[Aiden]

That one was crazy.

[Doug]

You know what you do is vibe code a text reading app like, do it again.

[Aiden]

Do it again. I'm not. Do it again. Last paragraph again.

[Doug]

I don't want to.

[Aiden]

We have audio listeners.

[Doug]

It's totally unserious. To keep dismissing the greatest technological revolution of our time. Sticking your fingers in your ears. It must be BS because it comes out of Silicon Valley and these Huns haven't read Marx or Adorno is not helping anyone.

[Mike]

Love it.

[Doug]

Again, coming from Rucker, Bregman means something because he's a guy who's principled. He's very principled. He doesn't just say, just to say that he has no financial stake in this. Yeah, but that made me.

[Aiden]

For context, there's two famous clips with this guy outside of his writing as an author. There's an old clip where he's at Davos, I think, at the World Economic Forum, where he calls out everybody on stage and he's like, I feel like I'm having a surreal experience where nobody here talks about taxes and the importance of taxes. We all fly here in our private jets and nobody wants. I feel like I'm in a fire conference and nobody wants to talk about water. That's his famous quote. And then there's another cut interview from Fox News when Tucker Carlson was still there, where, because of that clip, Tucker Carlson's interviewing him and he's asking him, like, it's so impressive that you stood up to, like, the elites and the upper class and, like, called them out all out on that stage. And then Rutger's like, yeah, and like. But you're like one of them. Like, you do the same thing. And then. And then Tucker starts cussing him out and they cut it from broadcast. So it's that guy, I was gonna.

[Doug]

Say right after he makes this point about AI, he's like, retweeting, you should quit GPT, cancel your chatGPT. He's not a booster by any method of any measure of the imagination. Like, he's not boosting this anyway. I think he's just being honest. And I have been feeling increasingly more like this, especially in the past three months as I've, like, tested the stuff and seen things like Seed Dance. It's just like, it's getting better faster. That's the thing. It's getting better faster.

[Mike]

So I'm. Okay, I'm speaking largely about software here, but the reason software matters if you aren't a coder is because. Because if software gets insanely good, that allows people who are making the models that touch whatever industry you work in to go faster. That's always been kind of. It's called closing the loop is what they talk about. Whereas you start to have AIs writing code that's training AIs, and you just start to speed that up. And so in theory, it just is going to get better faster. And so I spoke with Somebody who is a CEO of a mid sized startup. And I was like, is this hype? And he was like, it's not hype. This is crazy. I mailed this, I did this huge new feature that touched all the different aspects of our app, our cms, our data pipeline, our managing data pipeline, actually presenting everything to the customer service, doing all this analysis, all of it on the way to work at my commute and on the other side, talk to software engineers who are like, no, this is not good. So my friend who I mentioned last time who nine months ago said AI coding agents are like a junior software engineer who doesn't learn. He said it has gotten a lot better, he's using it a lot more and he's coding less than ever. Again, this is a guy who is not invested in AI in any way, is very skeptical and he's the smartest programmer I've ever worked with. But he says it misses critical things, so you cannot fully trust this. He spends tons of time fixing the little things that it misses. So his quote is, it gets 90% of the way, but that 10% is missing. And that means you end up spending far more time getting that little bit to work. That while, yeah, it seems like it's really helping you if it's not fully getting there. For many industries, that's not useful. For a doctor, that might not be useful. For sure. For a lawyer, that might not be useful. Even maybe for a film developer or producer or whatever, if that helicopter shop just can't get the right creative vision he wants, that might not be useful. He also said it's a security nightmare. Like it is just terrible at passing various things around at managing proprietary data. There's huge vulnerabilities.

[Aiden]

Yeah, this is the number one complaint I see when people talk about building apps at scale for large commercial use.

[Mike]

Right. So I think having looked into this more, pretty much anybody at my level and even a small company, this has leveled up in the last few months where you're like, this can potentially do everything but anything that touches security and then anything that's a giant code base. So like some of our YouTube commenters were saying, okay, I work at a giant SaaS company, I work at this company with a huge database and they're saying thing it can't do, it cannot handle this. So there's very much still a limit at which this stuff is just not effective. But in this, you know, they're like these, I think growing tiers at which people are like, whoa, this stuff is 100.

[Doug]

That's one of the parts I'm still convinced in the financial bubble because I was seeing examples of people being like, holy, everyone will be able to code their own Monday.com or Trello or whatever. And then those things are gonna die. Right? That's the idea. And maybe those, those are like the easiest ones, maybe, but. But I guess salesforce. But here's the thing is if you're at. If every individual company is going to try to make their own and spend all their time debugging that, getting that ready and getting the security to be okay, the amount of time and money they spend on that, they could have just spent 80 bucks for the seat, for buying the license. And it turns out, like, it's probably not going to be nearly as efficient to duplicate the work across everybody to make their own.

[Mike]

Right.

[Doug]

You know what I'm saying? So I fully see the skepticism. I'm just, just more impressed with the tech than I was before. And I do think it's going to change some things.

[Mike]

So here, I think is another. It gets a little higher level. But what are some downsides of people continuing to use these tools in the ways that we're talking about? The first is a concept called deskilling. So we've essentially alluded to this, but the idea is that if you offload your critical thinking to an AI, your skills actually degrade. So I found a paper, AI induced deskilling in Medicine. And there's a whole bunch of evidence that doctors who use. Use AI to do decision making in a medical environment actively lose the ability to make those same tasks without AI. Quote, automation gradually erodes human expertise. Critical processes become increasingly vulnerable as reliance on AI becomes entrenched and the necessary skills to operate without it are forgotten. There's another study that looked at doctors who do colonoscopies in Poland, tested three months of them, just like digging in there for answers without AI, and then used AI assistance for three months. The detection.

[Doug]

I can't believe the robots are taking such a beautiful job from humans.

[Mike]

I want Optimus to get up in there with a hundred.

[Doug]

I don't want. I want to. This is a. Humans have loved digging through the Polish anuses for a long time, for millennia. And now it's gone.

[Mike]

That's a huge part of the economy.

[Aiden]

I take all the jobs.

[Mike]

Think of the Polish colonoscopy monsters in America. So, okay, the, the, the doctors doing this. After three months of AI usage, their ability to detect this without AI dropped 6%. They just became measurably, concretely, substantially worse. At their job without AI after they had used it for a period. Last time we talked about Anthropic doing this study with programmers who use a new, who used a. Like a. Learned a new Python library using AI. And the ones who used AI didn't learn it as well, couldn't refer back to what they had learned. Like, the understanding was worse. So this is really concerning in a world where we have AIs that are increasingly like, oh, I can do everything for you. 80% of your code is just tell me what to do. But you're actively losing the critical thinking skills. So there's another from modern Software Engineering, a YouTube video where they did a study about the maintenance of code. And the idea is, look, writing code is getting the first draft done is a small portion of the overall work it takes to do software. The maintenance of it after you've made it. It is, in his estimate, three to five times more than the lifetime over the lifetime of this software. Some quotes I liked. It's largely naive nonsense to imagine you can develop software once and then never revisit it. Yet most AI studies stop at did the AI software developer finish faster? And they just kind of brag about the speed and quality of what's written and don't think at all about is this even useful in the long term? And again, with all of this stuff, you can start to imagine how this applies to any industry, right? Not just programming. So they did a cool study. Phase one, they had a whole bunch of programmers add features to an app, some with AI, some without. Phase two, a second group of programmers came in and tried to improve the code from phase one, but they didn't know whether it was AI written or not. So the question is, is it harder to maintain AI software? And the results. He was like, I'm actually surprised it didn't appear to make a huge difference. Pushes back on this narrative. You would think the AI code is total dog shit, but it was not. It was fine. But what it did reveal is that the smart engineers using AI had better code. It was like better quality. And the less experienced engineers, the worst one who used AI, had worse quality code. And his quote, if you're already doing the wrong things, AI will help you to dig a deeper hole. Faster tools amplify capability, they don't replace it. So it brings up this idea. If you're someone who, who never learns critical thinking skills, they never spend those two years being an entry level person to figure out what looks good or what's bad, they just offload their thinking to the AI or even if you start with somebody who has the expertise and then they de skill and actually devolve because they're having the AI do most of the work. You are now going to have a world where people who don't have good critical thinking skills and a background are producing more shit than they did before.

[Doug]

You had that world right now. Now that is the world we are in. That's what I feel like.

[Aiden]

Yes.

[Doug]

Yeah, it's well said.

[Aiden]

It's pulling the ladder up on critical thinking, I feel like.

[Doug]

But also like kicking people down.

[Mike]

That's the thing. I think it's been easy. Like we've talked many times about how hey, this is going to destroy entry level jobs because a senior engineer can just review what an AI does. And this is, I've talked about this with doctors doing the same thing, but we're like, wow, will people learn to be a senior person? But this is also revealing that the senior people are getting dumber by using AI.AI. so in both angles we're like suffering and then there's just going to be this massive slop that is being pushed out as everybody becomes dumber but is better at producing slop. We're getting really efficient at being dumb slop generators. Prime said this. He reviewed the two most recent models and he's like, the people who weren't producing good code are just producing bad.

[Doug]

Code faster at a gargantuan rate.

[Mike]

Yeah. And then one final thing. I'll say there's this excellent YouTube video called Can AI Power freshman CS. So this is graduate TA at Cornell. I guess we can put links to these YouTube videos in the description. But graduate TA at Cornell last semester did a study where he basically had the three of the best coding models. Gemini, Claude and ChatGPT. Just follow his computer science class that he helps teach.

[Doug]

Yeah.

[Mike]

To see is it actually like PhD level coding? Because Sam Altman keeps saying they're now like PhD level coders. So the synopsis of this hour and a half video. These AI's ace a whole bunch of really hard things and screw up things that no student would ever get wrong and no human would ever get wrong. And the final grades were Gemini and Claude Both got a C plus in this class. ChatGPT got a B plus. All three of those models, which are the newest models that are mega hyped, that are told like we're told constantly. These are PhD level smartness. Look at all these graphs. Every single one scored below the median student grade. These are supposedly PhD level CS coding. Capabilities, and they're doing worse than a freshman computer science student. And so he ends with a quote that I really like. He talks about how there's all these mistakes and then he says, but the complete void of creativity that permeates everything that AI touches makes the output so much less than anything we got from the real people we got taking the course. If you put the bland, broken output from the LLMs alongside the magic the students worked, it really isn't even a comparison. So can an AI pass a first semester CS class? Sure it can, technically. But looking at our students, I'm still feeling okay. And I think that was very optimistic. And he showed examples of how students really added like unique creative angles to all the assignments and were able to thoughtfully solve things. And instead these models are like, can sort of kind of do that. And I was like, okay, maybe we got some hope for entry level people, people, wow. And all of this. And we now jump to it. But all of this is not what the stock market is thinking. The stock, whether or not these AIs are, are actually game changers. The stock market is acting like it is. So to tie back to business last two weeks, stock software stocks are just getting absolutely annihilated, Panicking.

[Doug]

First, it's not even software stocks. Like, everything that could possibly be disrupted by AI is getting haircut. 10, 15, 20%. It's like it was software, it was legal. Now it's like commercial real estate stuff. Like a lot of things, a lot of things are all getting haircuts.

[Mike]

I think the takeaway that I've had from looking into this more is these things are really good at certain tasks and certain, let's say, silos of what you're doing. But there's a degree of critical thinking and creativity that is necessary and in certain cases, just like security and logistics for this to really be valuable in most industries. Right, Right. But on paper, it can replace these people. And that's what the market is doing. And that is where, again, I'm really concerned about entry level stuff. Steve Isman, best friend of the pod, he did his weekly market recap last Friday and He was like, OpenAI just approved an insurance provider AI app. Investors took that news as a potential existential threat to insurance brokers, many of which went down 10%. He explains that those insurance brokers provide complex services to commercial insurers, whereas the OpenAI app is for personal insurance in like a casual format. But in this environment, investors shoot first and ask questions later if they ever ask questions at all. Same thing with an AI tax powered tool that knocked out a bunch of stocks. Anthropic released the productivity tool for lawyers and legal zoom dropped 20% which is like a. I use LegalZoom. Like they've been, they've been nice and so and then. And that doesn't get to layoffs, which we can chat about.

[Doug]

But yeah, you pull this up. It's the way you were describing is how I've seen it. This is not the. I'm drawing the chart, but it's like the way I describe is that if this is like a skill chart with different skills, AI goes off the chart on like one part of the task.

[Mike]

Yeah.

[Doug]

Like insanely, insanely efficient. Insanely good. And then it's like really weak at the other part. So it's not well rounded in that. But some part of the task it just destroys. Which causes people to get scared. Yeah. Again, I don't know where I land on hype versus reality. I'm just in a process of flux. But I do know that it's getting better faster. I do know that. And I do know that the old idea of it is just a next token generator parrot getting back to is not really true anymore because they added. I found this out from that book that we read and I took more time into it but because they, they forced it to do chain of thought reasoning where it has to say how it's thinking at all times. And then they graded that and did reinforcement learning on that.

[Aiden]

Right.

[Doug]

It now has these processes that applies to everything. And so it's actually capable of getting two solutions that are not just remixed of. Yeah, yeah. And so that, that. You know what I'm saying? That is again, I just know because I've worked in the corporate world, most jobs are not that mentally taxing. Most jobs, three hours a day, people are on red or checking their email and they have a couple of key decisions in the day. A lot of things is pattern matching. A lot of things is like, oh yeah, I got this file. I need to put this in Excel in this way. Send to this person this email, respond to this. It's like if you can figure that out, that basic thing out, you could do that job.

[Mike]

Okay.

[Doug]

It's not.

[Mike]

Permit me to rant one final second and then we'll.

[Aiden]

We'll wrap.

[Doug]

Yeah, we should wrap.

[Mike]

But exactly what you said. Right. I think that it's clear that there are critical things missing. That which humans are necessary. Even my, my friend who runs the startup is like, like, look, these things are not creative. The only Reason it's valuable is because human beings are making smart decisions around what it should do. But the market is ignoring that and going, we can just knock out all of these jobs and replace them. So Josh Tyranji did a, he's a journalist, tech and he did an interview with Derek Thompson. He has a quote that I like. This is from this last week. He says, when I spoke to a bunch of CEOs, they said, look, I actually like my workforce. I actually think that this, meaning AI, would take time and we could perfect it. Wall street has no patience for that. They're expecting me to show financial results now and then the way they show financial results the fastest is by cutting jobs and replacing those with automation, even if it's not perfect. He talks about how McKinsey, which is another company he's like looked at a lot, McKinsey's business model is to hire a bunch of college graduates who've never run a company and then charge another client $5 million to have these college graduates.

[Doug]

It's make PowerPoints do make a bunch.

[Mike]

Of power points and they charge them $5 million. So beast business model, it's honestly a crazy business model, but they do all of this stuff, right? They do have a staff of people. And to their credit, McKenzie generally hires like wicked smart people out of very high end schools. They do maintain their prestige and, and they spend months creating the analysis and whatever else, even if the analysis at the end is like, yeah, lay off tons of people. So if you think about AI though, AI could just take the data set of all the analysis they've done and then just shit something out to a client. Right. McKinsey could very easily make an AI that replicates what their team of human beings does and just does like an okay, you know, pretty close, let's say 90% version of it, but kind of misses some core things. And even if McKinsey is like, we don't want to do it, we want to maintain our prestige, well, another company's going to come along and say, hey, we're going to get you the report in one week and it's going to cost $1 million instead of $5 million. And he talks about McKinsey is all of a sudden McKinsey has this massive competitive pressure and they will fall in line because they're not going to lose business over this. So what I'm really concerned about now is not only are companies being driven by Wall street short term profits, which means lay people off and replace them with AI, which is not ready to do the critical thinking and misses certain things. But on top of that, we're going to have this shitty race to the bottom where they're forcing more AI usage and more layoffs when it's not ready because everybody's going to be doing it. And I find this to be pretty concerning.

[Doug]

Yeah, it's just short term especially I do think white collar layoffs are accelerating and I think this is a bigger part of it than I anticipated.

[Mike]

I Dude, like Dario Amadai biased. We're tranthropic, has a long essay he did about two weeks ago and just lists. So he. They're making Claude and he's like, I really think this is going to destroy Josh Jobs at a much faster rate than anybody else. I don't know, maybe he is incentivized to do that. I'm not sure why he would, I guess. But the point is he is actively. He's one of the few.

[Doug]

I want to be clear. He's incentivized. His company sells the business clients and he. They want them to come make a deal with him.

[Mike]

Yes. No, no, no, that's fair. That's fair. He, to his credit, I think he's going out there repeatedly and saying, we are coming in for a catastrophe with our economy. We are about to, to destroy giant swaths of entry level jobs or at the very least, I think there's an argument again that they're not gonna do it effectively, but that Wall street and corporations will do that because that's the short term beneficial thing. And that is really fucking scary. And that's why I brought it up with Pete last week because I was like, I think this is gonna be like the biggest thing in two years. This feels like a fucking catastrophe. That is incoming, dude.

[Aiden]

Well, if you want to hear us talk about the disastrous revised job numbers.

[Doug]

You can join seconds and then we talk about gaming.

[Aiden]

You can join us on the [e-mail]. we do an extra hour of the show every week. But that's it for this week's episode.

[Doug]

Nature Patreon. And what are you wearing? Can you pull up the website? Listen, there's one person that embodies the spirit of this pod and us telling the truth at all times, right? And that is the late, great Bernie Mao. I don't know if he's dead, actually.

[Aiden]

Did he die? He did, right?

[Doug]

I think he died in prison.

[Mike]

Yeah, him and Gerald Ford on the pod.

[Aiden]

Okay, here, here's the deal. We're selling this sweater with, with Bernie Madoff on It. I. I came up with. I came up with this design.

[Doug]

I've been pushing this sweater for like five years.

[Aiden]

Yeah. If you've. If you've followed me closely for some reason or Josh man, the Melee player. You may have seen seeing this sweater. And it's because I made it a very long time ago, but I didn't have a personal brand to sell it under. That really made sense. And we finally decided to put it on sale. I was like, what if we actually sold this now? So if you want to cop a Bernie Madoff, you're super hustling sweater.

[Doug]

It's Bernie Madoff, the greatest Ponzi schemer in world history. And it says, never stop hustling. And if that's the kind of brand you want to run yourself, which I swear certainly do, here's Bernie right here.

[Mike]

That's a smile that can't lie, dude. I would trust that he wouldn't lie to you.

[Aiden]

He wouldn't lie.

[Doug]

By the way, this story is crazy.

[Mike]

Money from this or are you just using our website for this? It wasn't clear.

[Aiden]

That's a great question, actually. Am I.

[Mike]

This money will go somewhere I don't look.

[Aiden]

We could. I really just wanted to get this one out there. Sweaters and Ponzi scheme.

[Doug]

How appropriate. Guys, thanks for watching. Check out the Patreon. Check out this website. What is it? Lemonade stand Shop.

[Aiden]

Lemonade stand. Lemonade stand Shop.

[Doug]

Check that out. Thanks to Bernie Madoff for his longtime support of our podcast.

[Aiden]

Guys. Bernie.

[Doug]

See you guys next week. Thanks, everybody. Bye.

[Aiden]

Foreign.

[Mike]

Support for Lemonade Stand comes from Adobe Acrobat Studio.

[Doug]

As I have a. I have an actual thing that I have been using lately that it actually helps me if you have a really. Let's say I'm still in school. This is an example for people that are tiny little baby children like Aiden. And you have a book that you need to read or 18 pages or whatever.

[Aiden]

You didn't read books in school.

[Mike]

Don't lie to us.

[Doug]

You can put that in a PDF into Adobe Acrobat PDF spaces and it will generate a literal. It'll generate a podcast for you or a presentation for you that you can then use to summarize and understand the. The takeaways from this longer.

[Mike]

It's actually amazing for learning.

[Doug]

It literally is just like you can have it. You could like have it generate a quiz for you. It's like. It is a helpful thing for summarizing a very large document that's in a PDF is a useful.

[Aiden]

You need resources for your baby mind. But I consume the material in one go and I keep it all in my head. That's how I keep everything so straight and easily managed in front of me.

[Mike]

You're always saying disaster communicating with you. Be like Atriok. Use Adobe. Learn [e-mail] do that with Acro. And now you can use PDF spaces to learn so much more from your files man.

[Aiden]

Be forgetful, be free.

[Doug]

He's just channeling the constraints of the office in the workspace that I'm working.

[Aiden]

In make your co workers mad. I'm. I'm tired of being vulnerable on this show. I told you guys earlier that I thought to trade stocks you have to fly to New York and yell in the streets and wave a paper around and that's. I thought I learned from TV and you guys just.

[Doug]

You make TV doesn't even do that. It's like a 1920s movie.

[Aiden]

You guys, you guys. It's like I can't be open on this show. So where do you trade the stocks? Tell me where you do it.

[Doug]

There's a lot of places you could do it it but one place. If you are interested in learning about the jargon behind it or having FDIC, FINRA, NFA, SIPC backed trading platform you can go to tastytrade.com okay.

[Aiden]

Tastytrade.com Lemonade of course otherwise we wouldn't.

[Doug]

Be talking about it.

[Mike]

It's packed with trading features to help you trade smarter like advanced charting tools, back testing, pre built strategy select A risk analysis tools and a bunch of educational stuff to teach you about how exactly get into this. Aiden, I am saying that directly at you. That's not for our audience you really to learn.

[Doug]

This is like. This is not just.

[Aiden]

I think I just didn't yell loud enough.

[Doug]

No, obviously.

[Mike]

Go to tastytrade.com lemonade today Tasty Trade Inc. Is a registered broker dealer and a member of F I N R A N F A and S I.

[Aiden]

P C E. I'm in a bit of a language arms race with my boss Ludwig.

[Doug]

Okay.

[Aiden]

He speaks so much. He speaks a little Japanese, he speaks.

[Doug]

French, speaks a little of a lot of things but he's not and.

[Aiden]

And he. Some say he even speaks Chinese now. So I've been using Babel to study French so I can talk him in a language he can understand.

[Doug]

Okay.

[Mike]

He's like a one inch deep ocean. There's nothing there. It doesn't go down. He knows four words.

[Doug]

You don't need that to beat Ludwig A. You need five minutes And a phrase book.

[Aiden]

But if I wanted to learn a lot.

[Doug]

You want to learn a lot. Start speaking a new language in three weeks. You can go to babel.com lemonade get up to 60% off your subscription. 60% off when you use our link. Join the millions of Babel learners breaking the language barrier every [e-mail] lemonade we.

[Mike]

Should say Babel's an award winning app that makes learning a language simple and effective. You got practice conversations with speech recognition. Real people. It's like a private tutor in your pocket. Tons of good stuff.

[Aiden]

Use it to harass your boss who. Who makes your life terrible. He makes my life terrible. This is a personal grievance.

[Doug]

I'm language mog, your boss.

[Aiden]

Boss.

[Doug]

Which is a lame thing to do. I do want to say. Okay, on this subject we talked about. You talked about GPUs in space. I want to do a quick gaming story. If you guys. Mike, we do a quick gaming story and then I'll.

[Aiden]

Look, I'm going to be honest with you. I'm begging for gaming because we haven't.

[Doug]

Put some gaming on this.

[Aiden]

I'm gaming for begging to be back.

[Doug]

I want to do a. A gaming story. So GPUs. Nvidia just canceled their GPU lineup through 2027. Possibly beyond. They're just not making gaming. GPUs gaming or like they're not making new ones and it's canceled. Gaming is can't. Like because of how expensive memory has and because everyone is buying AI chips for this for space.

[Mike]

Like Aiden is buying them and just throwing them into the air as high as you can. Let's get this.

[Doug]

So Jensen just came out and was like, yeah, we're just not doing a new. Like, the old chips are where we're going to start. You just buy those for the foreseeable future. And it's like kind of interesting.

[Mike]

I have a question. Do you.

[Doug]

So graphics are frozen is what I'm saying, right? Starting right now. Graphics are frozen until the AI thing clears up or new stuff comes in.

[Mike]

Do you feel that you. You were the head of marketing of gaming, right, at Nvidia? Do you feel like you leaving made Jensen say, what's even the point?

[Doug]

I feel like I wish I was there now because knowing this, you are getting paid to do no work.

[Mike]

Oh, you think they don't lay you off? You think they're like, hey, Brandon, just keep your corner.

[Doug]

Happened for me during. There was like a crypto wave in 21 and all the cards got bought up. By crypto miners. And they were like, hey, just take the summer off. Don't market because we can't sell any. And people are mad. They can't. Like it's all sold out from everywhere. It was that was it. Like, just don't, just don't like cut down the marketing. So I just sat there and like down the marketing.

[Aiden]

Just work less.

[Doug]

So that's what they're doing right now. I'm sure the marketing team's just chilling. Anyway, I want to say, okay, two more gaming stories. Because if graphics are frozen now there's been this big push from a bunch of different laid off AAA developers to make essentially Overwatch clones. This happened recently with a game called High Guard that I don't know if you guys heard about it, it just came out. It was like, it's not Overwatch, but it's like a hero shooter 5v5 thing.

[Aiden]

You better not be talking shit about high.

[Doug]

You're a High Guard guy. No, I wanted to ask you about it because all of these, these Ex Blizzard, these X, Riot X, they all have made similar type of hero shooters and they are all flopping. The big one was Concord for 100 million at Sony. But now High Guard, they just laid Everybody off like two weeks in. They had 100,000 people at launch day, everyone stopped playing and they all got laid off. And then this is not necessarily a hero shooter, but like two days ago I saw a thing from Riot Games where they have been teasing this fighting game to XKO for like eight years and it finally launched and everyone is laid off in two weeks. Like it's like, so what? I'm not even. This is just a thing of like what is going on in gaming. What do you guys think is happening? That triple is. Triple H is dead outside of like Fortnite and all these companies are doing these big high profile flops and nobody seems to be able to adapt to what gaming is now.

[Aiden]

Maybe you have a better window into this than I do because I've been feeling a similar question. I've been wanting to talk about High Guard specifically because of how low the numbers have been and how I had heard about this. But with 2xko, something that surprised me was I feel like they were willing to let this game simmer for so long, but you let the. The buildup time was incredible. The fact that they could announce that this game existed, work on it for so long, keep everybody employed through that time period, then launch it, have kind of a weird timeline of marketing and beta releases that I actually Think need to launch it like 12 times. Yeah, that's. I never knew when the game was actually out. So by the time that the game is actually out, it's like, hasn't this been out? I don't. There's no hype anymore. That was my outside perspective and that's ignoring that. Like, maybe the genre is like tough to access and other stuff.

[Mike]

Sure.

[Aiden]

But you were willing to go through all of these layers of friction to get to the release and then you only have the game out for a short period of time. Longer than two weeks. In 2xK.

[Doug]

Sure.

[Aiden]

For sure. Right. It's been like. I think it's been like six months.

[Doug]

But it was quick.

[Aiden]

Not. Not.

[Doug]

Maybe it.

[Aiden]

It is. Maybe since the official release.

[Doug]

I'm not sure since the official release.

[Aiden]

It'd be good to clarify, but I'm. All I'm saying is why are you willing to wait that long for the game to exist but not enough time to see if you can turn things around after it comes out? And if you have any insight there or to the broader question that he asked, I'm. I'm very curious.

[Mike]

I. I so like, I don't have like insider knowledge on this. Like, you know, know technically I was a game developer in the most like, technically sense. So, you know.

[Doug]

But you're a streamer, you're plugged. I mean, you have a chat. You. You know what I'm saying? Like, this is. Here's what I'll say on that note. Yeah, the one. The developers of High Guard, one of them got kind of mocked for this. But he basically blamed gaming culture now, including streamers, for the reason his game didn't just died on release. He said people made fun of our videos on social media. The comment section were flooded with memes calling us concord to. We got negative reviews from users who didn't even play it and that's why we didn't. And it's not like I don't think those things are true, but I feel like that's an insane cope that doesn't jive with how I see games that succeed. Like the game Arc Raiders is crushing. So you know what I'm saying? Is it just a good game thing versus a bad game thing?

[Mike]

I would say an anecdotal thing and then a maybe business side. Anecdotally, I have not played many AAA games the last several years. I've just become less interested in them and have had less time for games. And so I don't want to take on a game that's going to be 50 hours. But last weekend I tried Death Stranding 2.

[Doug]

Okay.

[Mike]

Hadn't played the first one, but I was like, ooh, this could be really cool. And to be honest, I was pretty disappointed. It's a. Seems like a cool game. There's. It's not like it's bad or anything, but I just thought it would be more. I thought it would be more different than what I understood the first one to be. And it seems like it's that, but with a new coat of paint and my. Whenever I try a AAA game, obviously it's extremely subjective, but for me it doesn't feel like that much stuff is different than five years ago or 10 years ago. The graphics are nicer, but I don't care very much.

[Doug]

Those are frozen now, so those are frozen anyway.

[Mike]

That's not a driving factor. I want compelling gameplay that gets to the deal quickly. I tried Pikmin 4 recently as well, and after 45 straight minutes of characters talking and no gameplay, I was like, I don't fucking care. I want to just play a game.

[Aiden]

Verse.

[Doug]

And so he doesn't get how Olimar is like so deeply attached to these.

[Mike]

Anecdotally, I think that indie games have done a better job of being innovative and being creative and compelling. And I think that, like, you see that in the market Peak. Absolutely fucking crushed. And actually I talked to one of the Peak developers at the Stream Rewards and he was talking about how he was part of the team that made another Crab's Treasure. They had worked. I forget how many years. It was either three or seven years on this game, right? And they finally put it out. It's like Dark Souls kind of game. And it did okay. And then they spent three months on Peak and it becomes one of the biggest games of all time. And he was like, I feel so confused about this because, like, the thing I barely put any time into is one of the biggest gaming sensations of all time. And it's a nice, I think, example of how much creativity matters more than just like production value.

[Aiden]

I knew him in college.

[Doug]

Did you really?

[Aiden]

We played Melee together.

[Mike]

Oh, right. I forgot he mentioned that. Yeah.

[Doug]

That's crazy.

[Aiden]

It was so surreal to see him there because it was like this weird thing of like, I haven't seen you in so long. Why are you here? And then. And then it's like. You mean Peak?

[Mike]

It's like we used to.

[Aiden]

We used to play Melee at the UW Smash Club.

[Mike]

Nice. That's another funny coincidence is he was like. We were talking, I was like, oh yeah, my brother makes indie games. He's like, oh, what games? I'm like, oh, he made the Stanley parable. And he's like, your brother's Davey. Like he's had all these conversations. He's really helped me out. And so this dude has like a weird personal connection to our lives, but it's cool.

[Doug]

And then so all you're saying like, so at the same time is like this game around the same time that this game is blowing up and everyone's getting fired.

[Aiden]

Yeah.

[Doug]

Mugenics. I don't know if you guys heard about this game. It's a new cat indie rogue. It's selling like a million copies instantly. Like creative stuff is breaking through at a greater level than ever before. Yeah, indie people with three person studios are making absurd money. But like the triple A stuff, it takes eight years to make and is like behind on what consumers are wanting at the moment is like it's getting destroyed.

[Aiden]

I feel like the value proposition or like the risk is just so much different than it used to be. I imagine there's a world now where indie devs have actually a more reasonable path to making and getting their games out there in a shorter period of time with relatively less cost than a AAA studio could, which were the primary vehicles for developing and publishing games maybe 10, 20 years ago. So like this old business model of how AAA studios address like address the market doesn't really make as much sense anymore. Yeah, it's, it's just tougher competition. And then also the, or, sorry, the risk reward of taking that approach to publishing a game like doesn't make as much sense. The other thing I think is huge, that I think about a lot is online gaming. When we were coming, when we were kids, wasn't that prevalent yet. Right. So this idea of this big continuous live service experience was very new and people were creating games that were like the first to market in that area. But now after all of the time that has passed, giant live service titles are established. So when your new game comes out, when your fucking overwatch 45 clone comes out out, it isn't. It doesn't just have to be good by its own merits. It has to prove its value within a genre of things that already are like stable and have a lot of value. You're competing with like Overwatch that already exists. You're competing with Valorant, you're competing with Counter Strike, League of Legends. These games that have established player bases and followings that people will go back to for literally in some cases like cs Decades. CS has been around for decades.

[Doug]

Yeah.

[Aiden]

League is coming up on 20 years. Like these games are things that people continuously come back to and your game needs to out compete and provide something that those games don't already peel you away from that. And this was actually my problem with playing platform fighters that weren't Melee because I had played Melee for so long and Melee is so good in my eyes that anything that would come out that was vying for my attention in that space space, like that old game icons that eventually got published in a different form or even when Rivals 2 came out. And I think Rivals 2 is a really fun game genuinely. And I do. I do not have financial ties to.

[Doug]

That hashtag ad hashtag, by the way.

[Aiden]

I'm not financially tied to that company.

[Mike]

So you're just financially tied to the guy who owns that.

[Doug]

Yeah.

[Aiden]

You just need him to be able to hold on. Okay, fair enough. Fair enough. Maybe there's a conflict of interest there, but genuinely, when I played Rivals 2 for the first time, I was like, this is the first platform fighter I have played besides Melee that I'm significantly enjoying. But I never got into it because it's like I could just keep playing.

[Doug]

You already have the friends in the tournaments and everything. The scene. Yeah, I agree.

[Aiden]

And I think in every game that's getting dropped, especially with these lofty expectations of being a continuous live servants like log on and play a bunch thing that isn't like this a story game that can like crack through and like have value for a short period of time. And maybe you put a sequel down the road. Like these community or multiplayer experiences. They. You. You are just. You're putting it out there and hoping it beats out all of these titans that didn't exist.

[Doug]

I heard this from a game developer friend, which is like they're like death stars, you call them. Which is basically Fortnite League of Legend.

[Aiden]

I can't even believe I forgot Fortnite.

[Doug]

There's these massive live service games that have billions of dollars pouring in. They have new content all the time. They have established legacies.

[Aiden]

Yeah.

[Mike]

And.

[Doug]

And because they make so much money, everyone wants a slice of that pie. Everyone's like, I. If I could just crack through. Which to be fair, a game like Arc Raiders did. It's a live service game that is like doing really well.

[Aiden]

Yeah.

[Doug]

Is making money. If you crack through, you are. You are hitting a cash geyser. The oil comes out of the ground and you're. You're set. But it's so difficult because you're competing against the best of the best with infinite resources and time. And so I agree, I, I, I think too many AAA studios swung at the king and missed basically.

[Mike]

It also reminds me of when I, and maybe you guys experience this too. When I worked in esports production.

[Doug]

Yeah.

[Mike]

Worked at a company called ESL and it did, we did, I was working on like medium sized gaming tournaments, right. And I remember I did a show called Trinity Series which was a Hearthstone tournament. And I was, we were up allotted because it was very creative. People like whoa, this feels so different and unique compared to the average tournament. And I reflected on how much time I actually spent focusing on the creative side of the tournament. And it was maybe 10% of the time, 90% was about coordinating all the production assets and the team and the logistics and getting the ideas into place. When you have that much production scale and size, the vast majority of time is just spent like just getting the ideas even remotely implemented.

[Doug]

Right.

[Mike]

And then I went to YouTube and I was utterly refreshed by how the inertia between I have a creative idea and it is out there in the world is a hundredth of the amount of space. I just imagine that for AAA of like if you're the Assassin's Creed developers and you're like I want to do something like crazy and experimental and different that you might have one chance to do that for the entire next game. Right. That's all you can afford, that's all your team can do versus an indie developer who can like just crank that out every week.

[Doug]

Yeah. And it might not look as polished, but if it's fun it'll just take off nowadays.

[Aiden]

I used to like working in. One of the reasons I love left working in esports was the frustration of the dynamic of how ad funding or heavy marketing was the lifeblood of esports for so long. Right. So you had to kind of pander to and create tournaments in a style that the advertiser, especially if it was a white label project, looked for. And what I mean white label for people who don't know it means like when your production company or your company doesn't, you're not at the front end of the presentation of the product anymore. So like if Chipotle would approach us and be like run a Call of Duty tournament, nobody knows that it's my studio making the tournament. They just contract us. Chipotle is the brand on top of it and Chipotle would have all these restrictions about how they want the tournament of the format to be. And I was like, this is definitely gonna be bad. Like, this isn't what the players want. This isn't really what the viewers want.

[Doug]

That's what the money wants, but it's.

[Aiden]

What the money wants, and you would have to do that. And I think I got frustrated with that part of esports, and I was like, you know, this thing I dreamed in working up for so long, I don't want to fucking do this anymore. I'll go be Ludwig's boy. I'll be Ludwig boy instead. Or I wanted to go work at a company like Riot, where at least you were the first part. You were doing stuff internally or first party. And my favorite esports project I've ever worked on was this Melee League I did in SoCal in 2024. And it was because I had full freedom to do and structure things in whatever way I wanted. And I think in that space, I'm a true expert. If I could pick one thing that I'm an expert at in the world, it's rocket ships and this and rocket ships getting things. Getting GPUs into space, and I toss them really high. It's crazy.

[Doug]

You've been breaking quite a few, but, like, you're getting there. For sure. You're getting there. It's expensive, but.

[Aiden]

But the freedom to design that competitive, that scene and that. That league in the capacity that I wanted to was the most fun I've ever had with an esports event. And it's because. And I imagine indie developers feel that.

[Doug]

I just heard. I don't want to. I don't want to leak too much, but I heard from someone who worked at a agency that got the High Guard contract to help them get, like, streamers and stuff. Basically, their words were that they did.

[Aiden]

Start with an L and end with an odin.

[Doug]

They were like, hey, we tried to tell them, like, some of this stuff is not gonna work, and the money didn't want to hear it. And so, like. And then you flash forward two weeks and everyone's laid off. Like, it's like. It's that. It's that quick nowadays. Like, if you don't. If you aren't hitting the. The culture or the creativity, it's like people just don't play it. And then all of a sudden, all. I don't know. It's crazy. Anyway, guys, I want to move on to different talk because we're on time here. When there's like 10 different things to hit, I want to talk very briefly. It's a real tone switch. You ready for this?

[Aiden]

Yeah.

[Doug]

The Government shutting down again.

[Mike]

I feel like the government has too much production value.

[Aiden]

I liked when we talked about gaming. I love talking about games.

[Mike]

All right, let's get one sentence review and then we're going to talk about the new Diablo 2 expansion.

[Doug]

Okay, fine, we'll do one sentence on it. Basically, Department of Homeland Security is the only part of government shutting down. No, I'm sorry, the whatever it ladders up into actually is dhs. DHS is shutting down. They couldn't get funded as of Saturday morning 1am it's over. There's no money. That being said, because of the unique quirk of the big beautiful bill, everything in the DHS except for ICE is unfunded. But ICE is still funded. So even though this is all about ice like that, all the anger is about ice. The reason they're freezing it is about ice. Ice is still funny because they have 70 billion in cash from the, from the big beautiful bill. Everything else, which includes like the Border Patrol, I think Border Patrol might be funded as well. But like.

[Mike]

Like tsa, right?

[Doug]

Tsa. Yeah, exactly. That's the big one people want. There's a couple more of them, but these are just the general idea. Yeah, tsa. Yeah. I guess the main one we're going to realize is tsa. It's the Transportation Security Administration. Yeah, I guess that's the main thing you're going to see like in terms of feed. So that's being unfunded. So some people are going to work knowing they'll get paid back pay when this gets figured out. But again we're back to it again where it's like the whole funding thing. I will say the main things comes down to if you can pull us up, there's 10 demands. This is what they need for the vote. Which is basically no masks, require id, protect locations.

[Mike]

From who? Who's demanding?

[Doug]

This is demands from the Democrats. Okay, who voted against this? Only one. I think it was Fetterman. Flip sides voted with Republicans. I think some are. I think Massie or someone might have voted on the Democrat side. The point is they don't have a filibuster brief majority to get the bill through until they agree on this. So they are debating now. But my understanding is because the A, there's like a recess, they're not able to vote for 10 days at least 10 days of the shutdown. Now again, we'll cover this more because of bigger deal in terms of the shutdown expanding. But my understanding is like, it's like it's just a political Flashpoint right now around, you know, I mean, these.

[Mike]

These demands seem extremely reasonable.

[Doug]

Yeah, they seem like the. The basic first step.

[Mike]

Yeah. It's like ICE agents should not be wearing masks. They should not. They have to. To verbalize who they are and their id, and they need to display their agency name and not just be like mysterious people showing up in vans like this. Seems.

[Doug]

Have you seen. Super obvious. There's like a. You know, it's a bit of a ripping on Democrats kind of meme, but it was like, Republicans, we want to kidnap people and put them in unmarked vans. Democrats mark the vans. That crack me off.

[Aiden]

It does, yeah.

[Doug]

So I think this is a basic first step. And I'm surprised, but can I understand. Yeah. You want to jump in?

[Aiden]

Well, okay. One. I have a. Please clarify for me. Yeah, the. I don't. Is the idea that they're using the weight of the shutdown as it pertains to a bunch of other things to get changes to ICE that remains funded currently, no matter what.

[Doug]

They have no other lever to get at ICE than this. This is what ICE ladders up into. Just the fact that ICE is already funded is not their problem. Like, they just have to do it this way. So this is like the best thing they can do to, like, get changes to ice.

[Aiden]

Look, I hate, like, it just feels like. You ever seen that, like, Chuck Schumer parody video where like, they, like, Trump goes too far again and then the guy is dressed up like Chuck Schumer and he's. He's like, that's not very nice. They shouldn't.

[Doug]

The strongly worded letter kind of. Yeah.

[Aiden]

And I think I was listening to a daily episode about this and the correspondent was talking about the Democrats strategy with this shutdown and how they view the previous shutdown as internally. Democrats view the. The previous one as a success because. I know, I know. And I was like, I don't understand.

[Doug]

Didn't they cave at the last second?

[Aiden]

That was the whole. And they view it as a success because it was a flashpoint for raising awareness about Democrats better support for healthcare than Republicans.

[Doug]

It probably did do that, but that's.

[Aiden]

And I was like, yeah, maybe it did that, but it didn't. They didn't get any changes. I was like, what are we fucking talking about, dude? Dude. And this. Look, this is obviously my bias leaking through, but it's the same reason I asked Pete at the end of the last episode. And I think one of the things you were trying to hammer home with Gavin Newsom when you were doing that Interview was like, no, you don't understand. Like you, you can't just, I get that you're positioned to win the next election, but you can't just win it.

[Doug]

Yeah.

[Aiden]

So you have to make substantial changes in the way that allowed these problems supposed to.

[Doug]

Yeah.

[Aiden]

Exist in the first place.

[Doug]

I will say, okay, I'll, I'll, I'll. Straw, Steel. Straw. What's the good one? Steel man.

[Mike]

This one straw in it.

[Doug]

I'll cover some straw on the steel man.

[Aiden]

I like punch it.

[Doug]

And you think it's a straw man, but it's hard.

[Aiden]

Let's do a lemonade stand. Let's do a lemonade stand episode where we only straw man. Like we just.

[Doug]

I'll steal it. And then I, you know, I, I feel the vibe of this and I agree with the vibe of this on general, but I feel like people are expecting in this moment right now a miracle from a party that has nothing. They don't have the House, they don't have the Senate. They can't, they don't. Unless you expect them to grab an AK47 and assort the capital.

[Aiden]

I don't expect that.

[Doug]

Like, do you know what I'm saying? Like the reasonable thing they can do is like try to make demands on things they have leverage on, which is this. And I think for a temporary stop gap before they can win elections and make real changes. These changes seem like a good, like baseline. All Americans should agree. Why the masks? Right. You know what I'm saying?

[Aiden]

I agree, I agree in the sense that, yeah, sure. But I, I, I feel like I'm a, maybe I'm a, maybe I'm a dude. I, I, I, but, but it's like we're, we're going for another shutdown. Strat. When, When A month ago. You walked? Oh, yeah, no, that's how I, that's how I felt. Like if you describe.

[Doug]

And you know, but they walk on this one. Right. You know what I'm saying? Like it then. Yeah, I agree with that in general, but I think I'm just more.

[Aiden]

We need to go back to gaming, dude. Go back. I'm getting too, I'm getting too riled up. I need to talk about High Guard. You know what, what I've been doing is every, every week I've been checking the High Guard concurrence on Steam.

[Doug]

I'm just saying I'm nice.

[Mike]

We're going back to gaming. We're going back to High Guard.

[Doug]

I'm not voting for the DHS funding bill until they fund High Guard with it until they keep dedicated servers up for High Guard.

[Mike]

No more masks on the developers.

[Doug]

Developers got to be unmasked, I think.

[Aiden]

Okay, now I actually do have a.

[Doug]

I mean, I got to do. I got fucking. No, go to topic cards.

[Aiden]

Go to another thing.

[Doug]

All right, here's one. This is for Doug. You watch Super Bowl?

[Mike]

Dude, I did watch the Super Bowl. I tried to pay as little attention as possible because the game sucked and the ad sucked. Hey, peripheral at all times.

[Aiden]

If you love kicking, it was a great game.

[Doug]

No, you're one of those guys. There's a real master class in defense. Shut the up.

[Aiden]

In kicking.

[Mike]

No, it's a master class in defense. If both teams are defending really well. It's boring. The whole thing is boring.

[Doug]

It was not a good game. And I agree, the ads were better. But one bright point of the ads was we had a little bit of an AI war. We got a little bit of a drama. There's a little bit of a. You know, and so this is a little bit dated as we say this, but it's going to go into something else, which is. Which is that. Gemini OpenAI.AI.com. who else? Meta bunch. Bunch of. There was some weird AI slop ads. Like, do you see that vodka ad where there was just. Literally.

[Mike]

Yes. It was a lot of AI generated content.

[Aiden]

Vodka one actually AI generated because we were watching it in the office and we're like, was this just AI?

[Doug]

Yeah, it was like a generated slop ad and then terrible.

[Mike]

Oh, my God. The. The, like personal, like cleaning, robotics. One seemed to be all AI. Like, that was just nonsense.

[Doug]

So there was some weird slop in there. But the big thing was these big companies that are again, all spending hundreds of billions of dollars are kind of like muscling in each other's territory and trying to stink their claims as what makes their brand different. And the big thing, the big argument was between Anthropic and OpenAI, where anthropic is like, hey, we don't do ads. That's our whole thing. They did these. They did these ads. I don't know if you saw them, where they had like, the guy.

[Aiden]

Yeah.

[Doug]

Pretend to be an AI and he's.

[Aiden]

Like, hey, yeah, they had four. I don't know if they all rolled at the super bowl, but I had seen this on Twitter the week before.

[Doug]

Yeah.

[Aiden]

They released four different cuts of this ad that basically have the same premise.

[Mike]

Yeah.

[Aiden]

And this rolled at the Super Bowl Bowl.

[Doug]

So here's the. Here's the funny thing. My understanding, because I read a lot of ad breakdowns after the super bowl because I do it for my, my show and it turns out Margaret research showed that most like the average like 46 year old guy watching this while drinking a beer thought this was genuine. So that like if you're watching this kind of half you're just like this is kind of weird. Like they, they thought they were presenting this as a good thing. And so it's like this, this, as far as I could tell, this did not backfire. Like a little bit of backfire. Like they, it, the main takeaway from the ad is like AI is kind of creepy weird. It's like they were also, they were.

[Mike]

Trying to, they were attacking open AI chatgpt adding ads. Right. That was like their main attack.

[Doug]

Yeah.

[Mike]

And you know, which is a legitimate thing and we've talked about that in the past. But then also I, I guess you said they just started but ads aren't in it yet. So it's also to the average person who's not, not extremely online. Twitter.

[Doug]

No, they are in it. Right? Look, I saw, maybe I'm crazy but.

[Mike]

Like if they, if they are, they started like a couple days ago.

[Doug]

I don't, they started after the super bowl.

[Mike]

Right.

[Doug]

I, I, I saw.

[Mike]

So it's like it's an attack on ChatGPT about hey, these guys are doing ads and we're not. Which is very, you know, a very valid line of attack. But it's bizarre when the average ChatGPT user is like, I don't get it. I don't have ads in my thing yet. But I guess they're just getting ahead of it because ads are supposed to launch soon, I believe. Dude. Sam Altman so head of OpenAI said.

[Aiden]

He did a gigantic reply to this, didn't he?

[Mike]

The good part of the Anthropics ad, they are funny. And I laughed. But I wonder why Anthropica would go for something so clearly dishonest. I guess it's on brand for Anthropic doublespeak to use a deceptive ad to critique theoretical deceptive ads that aren't real. But a Super bowl ad is not where I would expect it.

[Doug]

He did like he did like a tone policing kind of thing. He also tried to make them out like the big bad rich guys. You see that?

[Mike]

Oh yeah, yeah. Anthropic serves an expensive product to rich people. We are glad that they do that and we're doing that too. But we also feel strongly that we need to bring AI to billions of people who can't pay for subscriptions.

[Aiden]

Hey, only one of those. Only one of those companies went to the international and one we wanted Dandy and Yoda.

[Doug]

Oh, you're talking about.

[Aiden]

And it's open AI.

[Mike]

It's okay.

[Doug]

He's gonna try to bring back to gaming every time now, no matter what.

[Aiden]

How can I connect?

[Mike]

That's why this is about high.

[Doug]

That's why the warning runs.

[Aiden]

Mario 64 in 2026. This podcast is going back to its roots and we're bringing gaming back.

[Mike]

It's about gaming. It's about business, about Gerald Ford. A lot of people asking for Gerald Ford in the last comments, by the way.

[Aiden]

A lot of people.

[Mike]

Very few people cared about PD Buttigieg.

[Aiden]

And if this episode episode gets to 10,000 likes, we will bring Gerald Ford on the podcast.

[Doug]

Dude, can you imagine? We did an AI Gerald for discussion. Our worst rated episode at you pull us out. This is what they look like, but this is what the open AI ads look like. They're not.

[Mike]

They actually launched. Okay. Okay.

[Doug]

They're not as intrusive on frame one as you'd expect. I guess it's like they, they have a line and they separate it at the bottom. So they'll give you your answer and then it'll be like, here's something related to your answer.

[Aiden]

Answer.

[Doug]

Not. It's not necessarily like, hey, bud, you, you've been feeling sad lately. You know, give you a pick me up is like nerds or whatever.

[Aiden]

Xanax.

[Doug]

For me, it's always candy. If I'm depressed, I want candy.

[Mike]

So it's a little, it's a little dystopian. I'm realizing I haven't seen.

[Doug]

I don't know if this is necessarily, to be honest. Here's what I'm going to say. Okay, let's get crazy with it. I want to get crazy with. With this.

[Aiden]

Well, this episode of Lemonade Stand is brought to you by the League, the dating app. And we three people were. We're in happy relationships. So we sent our good friend Eli that we play basketball with into the trenches. And I was confident sending Eli onto the league because he's a professional man. He's a PhD. He's a PhD, had a. Had a great job. He's a teacher.

[Mike]

He plays like an animal at basketball.

[Aiden]

That's where he lets it all loose. But that was the. One of. Of the things he liked about the league was how compared to other platforms, he felt like everybody was very well, like, put together, looking for like long, long lasting, permanent relationships. And Just. Just higher quality matches in general. This is. This is true. This is actually his feedback from trying out the app. And did it help his layup percentage? No, no, no.

[Doug]

Worse. If anything, I think he's been distracted by trying to find.

[Aiden]

He's been distracted by trying to find.

[Doug]

Somebody I didn't see screaming at him on the court.

[Aiden]

But more. Is it better? Better is better. And if you're ready to date in a way that actually respects your time, this is the move the league. Find someone in yours. Download the app and apply today. This episode is brought to you by indeed. Stop waiting around for the perfect candidate. Instead, use Indeed sponsored Jobs to find the right people with the right skills fast.

[Doug]

It's a simple way to make sure.

[Mike]

Your listing is the first candidate.

[Aiden]

C. According to Indeed data, sponsored jobs have four times more applicants than non sponsored jobs.

[Mike]

So go build your dream team today with Indeed.

[Aiden]

Get a $75 sponsored job credit at Indeed.com podcast terms and conditions apply. It's time to level the F up. I'm Robin Archison and I light buyers. I'm an executive, founder, best selling author, ultra marathoner, mother, proud Latino, and I'm not done yet. Announcing Project Swagger, my new weekly podcast, your transformation toolkit. I'm gonna cut through the noise and give you actionable takeaways each week in under 30 minutes. Elevate your hustle with routines, strategies, and mindset shifts that I have pressure tested. I have burnt down this Beyonce candle, like all the way to the bottom. We have been trying to manifest. Carbs are not the enemy. I probably have a piece of bread or a bagel with me at all times, and I am not exaggerating. Tune in on February 24 for episode one, building the skill of self talk. This is the foundation. Follow Project Swagger wherever you get your podcasts. Let's go.

[Doug]

I've been waiting to do this. Don't show my screen yet. I'm pulling up. I'm going to convince a Aiden, you're an AI guy. Lately, I've been feeling like that shit is moving so fast in the world of AI that I have to get. I still think it's a financial bubble, but the tech is like getting crazy in some areas and I'm going to convince Aiden and this whole podcast is going to be ruined. Dude. Okay, I'm going to show you.

[Mike]

Wait, were you not convinced by his to do Checklist app?

[Doug]

That's. Yeah.

[Aiden]

Again, weird.

[Doug]

I've always known it could do something simple like the checklist app. And that's why for me, it wasn't like, oh, this is crazy breakthrough. But it's like, damn, it's pretty good. Like, I just type it and it does it. But here, this. This is your goat. Rutger Bregman, dude.

[Aiden]

Oh, Rut.

[Doug]

Rut mean, right? This guy you talk about. You read all his books? I bought you his book for Christmas. Another one?

[Aiden]

Yeah, I like Ruger.

[Doug]

This guy. I mean, his example, but he has a different post where he's like, hey, why is there some people completely sticking their head in the ground on this? This. I.

[Aiden]

He's.

[Doug]

He's not an AI guy by any stretch of imagination. He's a total. Like. I mean, how would you describe him? What would you. What do you think his philosophy is in general?

[Aiden]

I don't know, like a. Like a humanist. He's. He's very. I feel like he's very positive about humanity and how we can use our innate goodness towards making all of our.

[Doug]

Lives, like anti fascism, anti big business, you know, all that stuff. But this guy's like, hey, I needed to do a teleprompter app, and I was going to buy $100 one, but I vibe coded it in two prompts. It worked better. Like, he has a longer thread on this. He has a blog, but. And I wonder if I could.

[Aiden]

It's weird. He didn't text me about this.

[Doug]

Again. He's talking about us. Wealth, concentration, all this stuff. I'm just saying, I'm seeing more people who actually try it be like, damn, some of this shit's crazy. And I think. I don't know if you had any examples from Seed Dance, but I saw it was this new Chinese video AI guy. It's crazy. Like, some. It's obviously not. It's still slop. I understand that. It is still at its core. I watch it. It's like, always the same fucking upgraded version of Sora.

[Aiden]

I'm gonna be vulnerable where it's like.

[Doug]

Rick and Morty fucking dancing in a. You know what I'm saying? It's always slop.

[Mike]

Yeah. This just as an example, is a prompt of. This is AI generated video of Brad Pitt and Tom Cruise fighting, arguing about Epsom Epstein. You killed Jeffrey Epstein, you animal. He was a good man.

[Doug]

He knew too much about our Russia operations.

[Mike]

He had to die. And now you die, too. So this is. This is from Bite Dance, which is the company that makes Slash made Tik Tok.

[Doug]

Yeah, they've been training on your tick tocks.

[Aiden]

I got a couple things about guys jump in one, because I had seen a bunch of these videos are to going. Going around now, Right. And I think the reason that this is sort of catching on a little is I would say that these videos look better than previous iterations of AI video software that I have seen, or at least most of them. Right. And I think by the nature of the product, this, it means it's going to improve over time. And I think on Twitter you do see a similar range of reactions to these things, of, this is stupid, it looks bad how this is so obviously AI what, Whatever. But I do want to point out that I think in the past week, and I don't mean Tom Cruise and Brad Pitt fighting, I mean little videos that have taken me as someone who, I think as someone who grew up on the Internet, has a relatively. Does a relatively good job of like, parsing whether or not something is, you know, real or fake. Is this a scam? Is this not a scam? Like, this is the first week with AI videos where I have seen a couple things that have been presented to me and I'm like, oh, I thought.

[Mike]

Oh, is this like Twitter or something?

[Aiden]

Yeah, just on Twitter. Just people uploading things on Twitter that have been like, fed to me through my algorithm. Right. And it took me way, like, it took me longer to figure it out and realize that like, oh, this is definitely like, ha, ha. It's so funny to make fun of the AI videos. This is just gonna get.

[Mike]

This is gonna get worse.

[Doug]

Yeah, there was that viral rabbits and the trampoline thing where a lot of people like, confirmed it was real and it was AI and that was like, that was one of the big moments for people. Here's an example. Rucker retweeted this. This is Josh Dawes. I'm 48 and I've worked as a software engineer for 30 years. I've grown numb to the Silicon Valley hype machine. My default posture is meh. We'll see. What I've seen and experience firsthand in the past two months is not hype ignored at your peril. Now, again, I do think that a lot of this is a little bit too far on the oh my God side it. But I gotta be real here. The advances are getting faster and they are real. And the more I dig into it, the more I see real concrete examples of certain areas. Like, like the big one, the one that kicked off the episode we talked about last week or two weeks ago, was anthropic putting in a thing that allowed a legal add on.

[Aiden]

Right?

[Doug]

And. And like, I've seen I had a blog that kind of broke down how it's impacting the legal feature field. And it's just like the way I think about it, it's. I think of my entry level jobs, I think of things I did when I started at Twitch. Like I managed the email newsletter and I managed the front page. And I know for an absolute fact that everything I did in those jobs for again, probably a year and a half to two years as I got started in the industry can be done in one prompt now. Everything, the entire email I created everything. And so that is something different like that. And then you see the Microsoft guys and they're like, every white collar job is getting automated in 12 to 18 months. And again, I'm naturally skeptical. As you know from this podcast, I'm naturally skeptical of all this stuff. That being said, I'm not stupid. I do test these things and try them out. There is. It's breaking a line. It's like it's getting more.

[Aiden]

Yeah, yeah. I think the idea, like, even with what I'm saying, right. I'm not here to say that that like AI video is this flawless thing or something. It's the fact that I'm hitting this point for the first time in a few years where I had a passing thought of I wasn't sure. And then being scared of that feeling and realizing that this trend will only increase. I will be more. I have to be even more conscious than I ever was of the idea that this video is just entirely fake.

[Doug]

And then I saw another thread that really convinced me. It was a. It was a filmmaker I think talking about. He was like, listen, this scene where it's me and Doug in a room doing dialogue, they're not gonna replace that. But this scene that opens it where it's like a helicopter shot of London that goes into a window and then starts the scene. We can make that in two seconds now. And if that's good enough to be not able to tell that just you.

[Mike]

Just saved hundreds of thousands.

[Doug]

You saved hundred thousand dollars. And so. And again, this is as bad as it'll ever get. See Dance two Out of nowhere. So I'm just getting more real to the idea that this is a. Not just an issue, but like a really big issue, like a really, really urgent issue that I think even if it I. Again, I'm actually more of a skeptic on AGI, but on like, I guess what I'm realizing is how most jobs don't need AGI guy. Most jobs are like pattern matching, basic, most White collar jobs are like, see a couple things. Think about one, just choice on that and then do an action.

[Aiden]

Yeah, yeah.

[Mike]

Well, let's do a little role reversal. Wait, let me make a pitch to you guys about why this stuff is overhyped but interesting.

[Aiden]

Wait, I want to.

[Mike]

I want to.

[Doug]

Such a different episode.

[Aiden]

One quick thing about.

[Doug]

I'm getting so high.

[Mike]

Speaking.

[Aiden]

I'm withholding it. I did want to mention Sea Dance. It got. I think it was today. Disney and paramount both sent ByteDance a cease and desist 100% like, already. And they seem very upset. One of the quotes from one of the partners with Disney's law firm said ByteDance's virtual smash and grab of Disney's IP is willful, pervasive, and totally unacceptable. Acceptable. Yeah, because I'm. All of these examples are like, I'm watching Mario and Luigi, like, fist fight.

[Doug]

Yeah, yeah, yeah.

[Aiden]

So. So I. Of course there's going to be this reaction, but it's happening very quick.

[Mike]

And I just want to confirm when you saw that you. That you were unsure whether it was real or not.

[Aiden]

Yeah, I did think that was the one where I was like, I'm pretty sure this is real.

[Doug]

Mario did fight Luigi.

[Aiden]

Well, it's like this is.

[Doug]

This is like, they both love Princess Peach, so. Yeah. Okay. All right. Well, I'm very excited for this episode because I. I guess I'm being the fucking AI holy shit guy, and you're gonna. You're gonna downplay.

[Mike]

Two weeks ago, we talked about AI vibe coding. I think that there were valid criticisms that we focused too much on hype as well as a lot of the people I quoted were basically people in AI who are highly invested in AI succeeding. And I think that's. That is a fair criticism. I want to remind everybody, I'm. None of us are experts, so I'm trying my best to learn. But this week, I made an effort to go and specifically research and present, present some other sides, including things we didn't get to two weeks ago. So in terms of just, like, raw numbers, we just talked about it. A bunch of new models releasing. This was like 10 days ago, anthropic released opus 4.6, which is like the even better coding model of what we had been talking about. And then 28 minutes later, OpenAI drops GPT 5.3 codecs. So they're like, literally trying to snipe each other within, like, an hour of dropping the hot mess. New things. So this keeps going. And I reached out to some AI or, excuse me, software people who are not like, you know, tied to the AI space. So from what I've been hearing for four or five people that I spoke with in some situations, this stuff truly is like mega advanced in terms of the coding specifically. A lot of people do feel like there's a major shift in the past few months and you see it like this guy right here who just vibe coded a thing and is to going, going holy. This is different from what I can.

[Doug]

I read his line real quick just before you go on, because I didn't. This is what I was looking for. And this, like this coming from this guy, knowing what we know about Rucker. Yeah, it's like a really crazy thing for him to say. That's what kind of woke me up, made me so. He said, I'm increasingly annoyed by how many journalists, academics and large parts of the left, which he is on, get everything wrong about AI. So many smug dismissals from people who clearly don't use it much or don't know how. I have multiple what the fuck moments every week now, for example. And then you talk about the teleprompter thing for context. I've never written a line of code in my life, but I was able to give Claude two rambling prompts two minutes later. It works better than the fancy hundred dollar software with patented voice track technology. Most surreal tech experience I've ever had. And it's all moving so much faster than I expected. AGI is not even a clear concept to me, but I do know what's available now is just fucking impressive and only get better. It's totally unserious to keep dismissing the greatest technological revolution of our time. Sticking your fingers in your ears. It must be BS because these Huns haven't read marks where, I don't know. Not helping anyone.

[Mike]

Wait, hold on. Say that sentence again.

[Aiden]

That was crazy. That was crazy.

[Mike]

Single word.

[Aiden]

I know that we complained about text on the screen.

[Doug]

You guys can read.

[Aiden]

That one was crazy.

[Mike]

You know you do.

[Doug]

Is vibe code a text reading app like do it again.

[Aiden]

Do it again. I'm not good. Do it again. Last paragraph again.

[Doug]

I don't want to.

[Aiden]

We have audio listeners.

[Doug]

It's totally unserious to keep dismissing the greatest technological revolution of our time. Sticking your fingers in your ears. It must be BS because it comes out of Silicon Valley and these Huns haven't read Marx or Adorno is on helping anyone. Love it again coming from Rucker. Bregman means something because he's a guy who's principled, he's very Principled. He doesn't just say, just to say that he has no financial stake in this.

[Aiden]

But that made me, for context, there's two famous clips with this guy outside of his writing as an author. There's an old clip where he's at Davos, I think at the World Economic Forum where he calls out everybody on stage and he's like, I feel like I'm having a surreal experience where nobody here talks about taxes and the importance of taxes. We all fly here in our private jets and nobody wants, I feel like I'm in a fire conference and nobody wants to talk about water. That's his famous quote. And then there's another cut interview from Fox News when Tucker Carlson was still there, where because of that clip, Tucker Carlson's interviewing him and he's asking him, like, it's so impressive that you stood up to like the elites and the upper class and like called them out, all out on that stage. And then Rutger's like, yeah. And like, but you're like one of them. Like you do the same thing. And then, and then Tucker starts cussing them out and they cut it from broadcast. So it's that guy, I was gonna.

[Doug]

Say right after he makes this point about AI, he's like retweeting, you should quit GPT, cancel your chatGPT. He's not a booster by any method, any measure of the imagination. Like, he's not boosting this anyway. I think he's just being honest. And I have been feeling increasingly more like this, especially in the past three months as I've tested the stuff and seen things like Sea Dance. It's just like, it's getting better faster. That's the thing, it's getting better faster.

[Mike]

So I'm speaking largely about software here, but the reason software matters if you aren't a coder is because if software gets insanely good, that allows people who are making the models that touch whatever industry you work in to go faster. That's always been kind of, it's called like closing the loop is what they talk about. Whereas you start to have AIs writing code that's training AIs and you just start to speed that up. And so in theory, it just is going to get better faster. And so I spoke with somebody who is a CEO of like a mid sized startup and I was like, is this hype? And he was like, it's not hype. This is crazy. I mailed this, I did this huge new feature that touched all the different aspects of our app, our cms, our data pipeline, our managing data pipeline, actually presenting everything to the customer service, doing all this analysis, all of it, on the way to work at my commute. And on the other side, talked to software engineers, are like, no, this is not good. So my friend who I mentioned last time, who nine months ago, said AI coding agents are like a, you know, like a junior software engineer who doesn't learn. He said it has gotten a lot better, he's using it a lot more, and he's coding less than ever. Again, this is a guy who is not invested in AI in any way, is very skeptical, and he's the smartest programmer I've ever worked with. But he says it misses critical thinking, so you cannot fully trust this. He spends tons of time fixing the little things that it misses. So his quote is, it gets 90% of the way, but that 10% is missing. And that means you end up spending far more time getting that little bit to work that while, yeah, it seems like it's really helping you if it's not fully getting there. For many industries, that's not useful. For a doctor, that might not be useful for sure. For a lawyer, that might not be useful. Even maybe for a film developer or producer, whatever. If that helicopter shot just can't get the right creative vision he wants, that might not be useful. He also said it's a security nightmare. Like, it is just terrible at passing various things around at managing proprietary data. There's huge vulnerabilities.

[Aiden]

Yeah, this is the number one complaint I see when people talk about building apps at scale for large commercial use.

[Mike]

Right. So I think having looked into this more, pretty much anybody at my level and even a small company, this has. This has leveled up in the last few months, where you're like, this can potentially do everything, but anything that touches security, and then it's anything that's a giant code base. So, like some of our YouTube commenters were saying, okay, I work at a giant SaaS company. I work at this company with a huge database. And they're saying it can't do. It cannot handle this. So there's very much still a limit at which this stuff is just not effective. But in this, you know, they're like these, I think, growing tiers at which people are like, whoa, this stuff is 100%.

[Doug]

And that's one of the parts I'm still convinced in the financial bubble level, because I was seeing examples of people being like, holy, everyone will be able to code their own Monday.com or Trello or whatever. And then Those things are going to die, right? That's the idea. And maybe those, those are like the easiest ones maybe, but I guess salesforce. But here's the thing is if you're at. If every individual company is going to try to make their own and spend all their time debugging that, right? Getting that ready and getting the security to be okay, the amount of time and money they spend on that, they could have just spent 80 bucks for the seat, for buying the lights. And it turns out like it's probably not going to be nearly as efficient to duplicate the work across everybody to make their own.

[Mike]

Right?

[Doug]

You know what I'm saying? So I fully see the skepticism. I'm just more impressed with the tech than I was before and I do think it's going to change some things.

[Mike]

So here I think is another. It gets a little higher level. But what are some downsides of people continuing to use these tools in the ways that we're talking about? The first is a concept called Deskill. So we've essentially alluded to this, but the idea is that if you offload your critical thinking to an AI, your skills actually degrade. So I found a paper AI induced Deskilling in Medicine. And there's a whole bunch of evidence that doctors who use AI to do decision making in a medical environment actively lose the ability to make those same tasks without AI. Automation gradually erodes human expertise. Critical processes become increasingly vulnerable as reliable reliance on AI becomes entrenched and the necessary skills to operate without it are forgotten. There's another study that did looked at doctors who do colonoscopies in Poland, tested three months of them, just like digging in there for answers without AI and then used AI assistance for three months. The detection.

[Doug]

I can't believe the robots are taking such a beautiful job from humans.

[Mike]

I want optimists to get up in there with a hundred I don't want.

[Doug]

I want to. This is a. Humans have loved digging through the Polish anus history for a long time, for millennia and now it's gone.

[Mike]

That's a huge part of I take all the jobs. Think of the polishers. So okay, the, the, the doctors doing this after three months of AI usage, their ability to detect this without AI dropped 6%. They just became measurably, concretely substantially worse at their job without AI after they had used it for a period. Last time we talked about anthropic doing this study with programmers who use a new. Who used like a learned a new Python library using AI and the ones who used AI didn't learn it as well, couldn't refer back to what they had learned. Like the understanding was worse. So this is really concerning in a world where we have AIs that are increasingly like, oh, I can do everything for you. 80% of your code is just tell me what to do. But you're actively losing the critical thinking skills. So there's another from modern Software Engineering, a YouTube video where they did a study about the maintenance of code. And the idea is, look, writing code is getting the first draft done is a small portion of the overall work it takes to do software. The maintenance of it after you've made it is, in his estimate, three to five times more than the lifetime over the lifetime time of this software. Some quotes I liked. It's largely naive nonsense to imagine you can develop software once and then never revisit it. Yet most AI studies stop at did the AI software developer finish faster? And they just kind of brag about the speed and quality of what's written, don't think at all about is this even useful in the long term? And again, with all of this stuff, you can start to imagine how this applies to any industry, right? Not just programming. So they did a cool study. Phase one, they had a whole bunch of programmers add features to an app, some with AI, some without. Phase two, a second group of programmers came in and tried to improve the code from phase one, but they didn't know whether it was AI written or not. So the question is, is it harder to maintain AI software and the results? He was like, I'm actually surprised it didn't appear to make a huge difference. Pushes back on this narrative. You would think the AI code is total dogshit, but it was not. It was fine. But what it did reveal is that the smart engineers using AI had better code. It was like better quality. And the less experienced engineers, the worse one who used AI had worse quality code. And his quote, if you're already doing the wrong things, AI will help you to dig a deeper hole. Faster tools amplify capability, they don't replace it. So it brings up this idea. If you're someone who never learns critical thinking skills, they never spend those two years being an entry level person to figure out what looks good or what's better bad. They just offload their thinking to the AI. Or even if you start with somebody who has the expertise and then they deskill and actually devolve because they're having the AI do most of the work, you are now going to have a world where people who don't have good critical thinking skills and a background are producing more shit than they did before.

[Doug]

We have that world right now. That is the world we are in. That's what I feel like.

[Aiden]

Yes.

[Doug]

Yeah.

[Aiden]

This is pulling the ladder up on critical thinking, I feel like.

[Doug]

But also like kicking people down.

[Mike]

That's the thing. I think it's been easy. Like we've talked many times about how, hey, this is going to destroy entry level jobs because a senior engineer can just review what an AI does. And this is, I've talked about this with doctors doing the same thing, but we're like, wow, will people learn to be a senior person? But this is also revealing that the senior people are getting dumber by using AI. So in both angles we're like suffering and then there's just going to be this massive, massive slop that is being pushed out as everybody becomes dumber, but is better at producing slop. We're getting really efficient at being dumb slop generators. Prime said this. He reviewed the two most recent models and he's like, the people who weren't producing good code are just producing bad.

[Doug]

Code faster at a gargantuan rate.

[Mike]

Yeah. And then one final thing. I'll say there's this excellent YouTube video called Can AI Pass Freshman? So this is graduate TA at Cornell. I guess we can put links to these YouTube videos in the description. But graduate TA at Cornell last semester did a study where he basically had the three of the best coding models, Gemini, Claude and ChatGPT. Just follow his computer science class that he helps teach to see is it actually like PhD level coding? Because Sam Altman keeps saying they're now like PhD level coders. So the synopsis of this hour and a half video, these AIs Ace a whole bunch of really hard things and screw up things that no student would ever get wrong and no human would ever get wrong. And the final grades were Gemini and Claude Both got a C plus. In this class, ChatGPT got a B plus. All three of those models, which are the newest models, that are mega hyped, that are told like we're told constantly. These are PhD level smartness. Look at all these graphs. Every single one scored below the median student grade. These are supposedly PhD level CS coding capabilities and they're doing worse than a freshman computer science student. And so he ends with a quote that I really like. He talks about how there's all these mistakes and then he says, but the complete void of creativity that permeates everything that AI touches makes the output so much less than anything we got from the real people, we got taking the course. If you put the blank and broken output from the LLMs alongside the magic the students worked, it really isn't even a comparison. So can an AI pass a first semester CS class? Sure it can technically. But looking at our students, I'm still feeling okay. And I think that was very optimistic. And he showed examples of how students really added like unique creative angles to all the assignments and were able to thoughtfully solve things. And instead these models are like, can sort of kind of do that. And I was like, okay, maybe we got some hope for entry level people.

[Doug]

Wow.

[Mike]

And all of this. And we now jump to it. But all of this is not what the stock market is thinking. The stock, whether or not these AIs are, are actually game changers. The stock market is acting like it is. So to tie back to business last two weeks, software, Software stocks are just getting absolutely annihilated.

[Doug]

Panicking. First, it's not even software stocks. Like everything that could possibly be disrupted by AI is getting haircut. 10, 15, 20 years. It's like it was software, it was legal. Now it's like commercial real estate stuff. Like a lot of things, a lot of things are all getting haircuts.

[Mike]

I think the takeaway that I've had from looking into this more is these things are really good at certain tasks and certain, let's say, silos of what you're doing. But there's a degree of critical thinking and creativity that is necessary and in certain cases, just like security and logistics for this to really be valuable in most industries. Right, right. But on paper it can replace these people and that's what the market is doing. And that is where again, I'm really concerned about entry level stuff. Steve Iseman, best friend of the pod, he did his weekly market recap last Friday and He was like, OpenAI just approved an insurance provider AI app. Investors took that news as a potential existential threat to insurance brokers, many of which went down 10%. He explains that those insurance brokers provide complex services to commercial Insur. Whereas the OpenAI app is for personal insurance in like a casual format. But in this environment, investors shoot first and ask questions later if they ever ask questions at all. Same thing with an AI tax powered tool that knocked out a bunch of stocks. Anthropic released the productivity tool for lawyers and legal zoom dropped 20%, which is like a. I use Legal Zoom. Like they've been, they've been nice and so and then. And that doesn't get to layoffs, which we can chat about.

[Doug]

But yeah, you pull this up. It's the way you were describing is how I've seen it. This is not the. I'm drawing the chart. But it's like the way I describe is that if this is like a skill chart with different skills, AI goes off the chart on like one part of the task.

[Mike]

Yeah.

[Doug]

Like insanely. Insanely efficient. Insanely good. And then it's like really weak at the other part. So it's not well rounded in that. But some part of the task it just destroys.

[Mike]

Yeah.

[Doug]

Which causes people to get scared. Yeah. Again, I don't know where I land on. On hype versus reality. I'm just in a process of flux. But I do know that it's getting better faster. I do know that. And I do know that the old idea of it is just a next token generator parrot getting back to is not really true anymore because they added. I found this out from that book that we read and I took more time into it, but because they, they forced it to do chain of thought reasoning where it has to say how it's thinking at all times. And then they graded that and did reinforcement learning on that.

[Aiden]

Right.

[Doug]

It now has these processes that applies to everything. And so it's actually capable of getting two solutions that are not just remixed of. Yeah, yeah. And so that, that. You know what I'm saying? That is. Again, I just know because I've worked in the corporate world, most jobs are not that mentally taxing. Most jobs, three hours a day, people are on red or checking their email. Email. And they have a couple of key decisions in the day. A lot of things is pattern matching. A lot of things is like, oh, I got this file. I need to put this in Excel in this way. Send to this person this email. Respond to this. It's like if you can figure that out, that basic thing out, you could do that job.

[Mike]

Okay.

[Doug]

It's not. I don't know, it's crazy.

[Mike]

Permit me to rant one final second and then we'll.

[Aiden]

We'll wrap.

[Doug]

Yeah, we should wrap.

[Mike]

But exactly what you said. Right. I think that it's clear that there are critical things missing. That which humans are necessary. Even my, my, my friend who runs the startup is like, look, these things are not creative. The only reason it's valuable is because human beings are making smart decisions around what it should do. But the market is ignoring that and going, we can just knock out all of these jobs and replace them. So Josh Tyranji did a. He's a journalist, tech and he did an interview with Derek Thompson. He has a quote that I like. This is from this last week. He says, when I spoke to a bunch of CEOs, they said, look, I actually like my work for I actually think that this, meaning AI, would take time and we could perfect it. Wall street has no patience for that. They're expecting me to show financial results now and then. The way they show financial results the fastest is by cutting jobs and replacing those with automation, even if it's not perfect. He talks about how McKinsey, which is another company he's like, looked at a lot. McKinsey's business model is to hire a bunch of college graduates who've never run a company and then charge another client $5 million to have these college graduates, PowerPoints, do it. Make a bunch of PowerPoints and they charge them $5 million. So Beast Business model, it's honestly a crazy business, but they do all of this stuff, right? They do have a staff of people. And to their credit, McKenzie generally hires like wicked smart people out of very high end schools. They do maintain their prestige and, and they spend months creating the analysis and whatever else, even if the analysis at the end is like, yeah, lay off tons of people. So if you think about AI though, AI could just take the data set of all the analysis they've done and then just shit something out to a client, right? McKinsey could very easily make an AI that replicates what their team of human beings does and just does like an okay, you know, pretty close, let's say 90% version of it, but kind of misses some core things. And even if McKinsey is like, we don't want to do it, we want to maintain our prestige, well, another company's gonna come along and say, hey, we're gonna get you the report in one week and it's gonna cost $1 million instead of $5 million. And he talks about McKinsey is all of a sudden, McKinsey has this massive competitive pressure and they will fall in line because they're not gonna lose business over this. So what I'm really concerned about now is not only are companies being driven by Wall street short term profits, which means lay people off and replace them with AI, which is not ready to do the critical thinking and misses certain things. But on top of of that, we're going to have this shitty race to the bottom where they're forcing more AI usage and more layoffs when it's not ready because everybody's going to be doing it. And I find this to be pretty concerning.

[Aiden]

Yeah.

[Doug]

It's just short term especially. I do think white collar layoffs are accelerating and I think this is a bigger part of it than I anticipated.

[Mike]

I. Dude, like Dario Amadi. Biased. We're tranthropic. Has a long essay he did about two weeks ago and just lists. So he. They're making Claude and he's like, I really think this is going to destroy jobs at a much faster rate than anybody else. I don't know. Maybe he is incentivized to do that. I'm not sure why he would, I guess. But the point is he is actively. He's one of the few.

[Doug]

I want to be clear. He's incentivized because his company sells the business clients and he. They want them to come make a deal with him.

[Mike]

Yes. No, no, no. That's fair.

[Aiden]

He.

[Mike]

To his credit, I think he's going out there repeatedly and saying, we are coming in for a catastrophe with our economy. We are about to destroy giant swaths of entry level jobs or at the very least, I think there's an argument again that they're not going to do it effectively, but that Wall street and corporations will do that because that's the short term beneficial thing. And that is really fucking scary. And that's why I brought it up with Pete last week because I was like, I think this is going to be like the biggest thing in two years. This feels like a catastrophe. That is incoming, dude.

[Aiden]

Well, if you want to hear us talk about the disastrous revised job numbers.

[Doug]

You can join seconds and then we talk about gaming.

[Aiden]

You can join us on the [e-mail] lemonade stand. We do an extra hour of the show every week, but that's it for this week's episode.

[Doug]

Nature Patreon. And what are you wearing? All right, can you pull up the website? Say, listen, there's one person that embodies the spirit of this pod and us telling the truth at all times, right? And that is the late great Bernie Mao. I don't know if he's dead, actually.

[Aiden]

Did he die? He did, right?

[Doug]

I think he died in prison. Yeah.

[Mike]

Him and Gerald for it. On the pod.

[Aiden]

Okay, here, here's the deal. We're selling this sweater with, with Bernie Ma off on it. I, I came up with, I came up with this design.

[Doug]

I've been pushing this sweater for like five years.

[Aiden]

Yeah. If you've, if you've followed me closely for some reason or Josh man, the melee player, you may have seen this sweater and it's Because I made it a very long time ago, but I didn't have a personal brand to sell it under. That really made sense. And we finally decided to put it on sale. I was like, what if we actually sold this now? So if you want to cop a Bernie Madoff never stop hustling sweater, it's.

[Doug]

Bernie Madoff, the greatest Ponzi schemer in world history. And it says, never stop hustling. And if that's the kind of brand you want to run yourself, which I certainly do, here's Bernie right here.

[Mike]

That's a smile that can't lie. Dude, I would trust him.

[Aiden]

He wouldn't lie to you. He wouldn't lie.

[Doug]

By the way, this story is crazy.

[Mike]

Money from this? Or are you just using our website for this? It wasn't clear.

[Aiden]

That's a great question, actually.

[Mike]

This money will go somewhere. I don't.

[Aiden]

Look, we could. I really just wanted to get this one out there. This sweater Nepon game. How.

[Doug]

How appropriate. Guys, thanks for watching. Check out the Patreon. Check out this website. What is it? Lemonade stand. Shop.

[Aiden]

Lemonade stand. Lemonade stand Shop.

[Doug]

Check that out. Thanks to Bernie Madoff for his longtime support of our podcast.

[Aiden]

Guys, Bernie.

[Doug]

See you guys next week. Thanks, everybody. Bye.

[Mike]

Support for Lemonade Stand comes from Adobe. Every single night I go outside of Aiden's house, I take a dump in a bag like a paper bag, and I set it on fire. And so yesterday, I was doing tax stuff, and I realized some of the PDFs I have are super annoying to edit.

[Aiden]

Right?

[Doug]

Oh, just unrelated.

[Aiden]

What was that first part?

[Mike]

Cut that first part.

[Doug]

But yeah, let's focus on the PDFs.

[Mike]

Honestly, things like taxes, you can just edit it right in place with Adobe PDF spaces. That's dynamic and alive. You can do more than you ever thought was possible.

[Aiden]

You're terrorizing my home.

[Doug]

Stop interrupting. He's telling a really cool story about.

[Mike]

Learn [e-mail] Duo that with Acrobat. Sometimes it's not even my poop.

[Doug]

Moreover, this show comes from Tasty Trade. Aiden, how's the. How's the trade?

[Aiden]

I'm getting a call.

[Doug]

No one's calling me. No, you're not.

[Aiden]

Oh, it's my friend I sent to New York. They did not thought they were profiling you. I thought it was a me. I thought maybe just if I said someone with more charisma and. And thought you didn't have enough raise.

[Doug]

When you screamed buy, buy, sell, sell, sell at a wall.

[Mike]

Well, don't keep us waiting. Did it work?

[Aiden]

I did it right at the bowl.

[Doug]

All right, well, if it didn't work, which I assume it didn't, you could still go to taste. Com Lemonade today. To get started with an actual trading platform.

[Mike]

Tasty Trade, Inc. Is a registered broker, dealer and member of F I N R A N F A and sipc.