Anthropic’s $380B round, Paramount vs. WB, Higgsfield ragebait drama | Diet TBPN

Summary

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Podcast Summary

Overview

This Diet TBPN episode, hosted by John Coogan and Jordi Hays, dives into three headline stories: Anthropic’s record-breaking $380 billion AI funding round, the escalating corporate chess match between Paramount, Warner Bros., and Netflix, and the controversy engulfing AI video startup Higgsfield. With guests Nathan Lambert, Tyler, and Teddy Schleffer, the hosts blend insight, humor, and a strong sense of the absurd as they dissect the latest moves in tech and media.

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1. The “Something Big” Moment: AI’s Inflection Point

[00:00–07:14]

• Viral Tech Panic: The show opens with a discussion of a viral long-read (“Something Big Is Happening”) that swept across tech circles with 75 million views and over 100,000 likes. Tyler recounts reading John Palmer’s satirical response, “Something Small Is Happening,” and reflects on the real existential unease sweeping Silicon Valley.
• Paradigm Shift in AI: This section highlights an inflection—a transition as momentous as the rise of food delivery, but now "it's your entire job." Increasingly, a handful of researchers are driving massive change.
• Acceleration Outpaces Perception: AI’s progress is invisible to the wider world, with cutting-edge tools now automating not just coding, but all kinds of office work. The speakers liken AI's speed-up to a phase change: "Then apparently in 2025, everything got much faster and then faster again." ([03:17] Tyler)
• Anecdotes & Humor: The speakers joke about AI not yet making actual meals, and riff on the importance (tongue-in-cheek) of getting a Mac Mini to prepare for the AI future.

Notable Quotes

• “The people sounding the alarm aren’t making predictions. They’re telling you what already happened to them... I am relaying this information to you secondhand, with conviction.” – John Palmer (read aloud by Tyler) [03:37]
• “By 2025, some of the best engineers in the world had handed over most of their coding work to AI. In February 2026, you can make AI send you a morning summary of the top posts on Reddit from your Mac Mini.” – Tyler [04:36]
• “Get a Mac Mini. Every single account I’ve seen posting this stuff has a Mac Mini. It’s the ultimate tool for this stuff.” – Tyler [05:39]

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2. Anthropic’s Historic $380 Billion Funding Round

[07:29–13:23]

• Deal Details & Investors: Anthropic, an AI lab, is finalizing a massive $20–30 billion funding round, valuing it near $350–380 billion. Investors include Founders Fund (Peter Thiel), D.E. Shaw, Dragon Ear, Microsoft, Nvidia, and Singapore’s GIC; it’s a “who’s who” of tech and finance.
• Venture Power Law Theses: Discussion of Founders Fund’s penchant for concentrated bets, and Peter Thiel’s complex relationship with AI (“crypto is libertarian, AI is communist”). The hosts ponder if investors see separate markets emerging within AI: consumer vs. developer/codegen.
• Breaking News: Live on air, Anthropic “formally announced the round” ([11:19]), revealing a $30 billion raise and a $14 billion annual revenue run rate, growing >10% annually.
• Enterprise Adoption & Forward-Deployed Engineers: AI tech is advancing rapidly, but real-world adoption lags due to organizational inertia. “Forward-deployed engineers”—staff who experiment with tools at home and introduce them at work—are pivotal for enterprise adoption.

Notable Quotes

• “This is acceleration. This is—true acceleration.” – Tyler [12:52]
• “If you roll out some tool and it doesn’t work the way you intended... even if you’re just, ‘I have eight hours of work to do in my traditional system. Where do you get the extra hours to automate your work?’” – Tyler [12:15]

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3. AI’s Public Perception War & SuperPAC Arms Race

[13:23–16:05]

• Public Backlash & Energy Issues: Anthropic commits to covering electricity price increases from its data centers to preempt local backlash. There’s bipartisan skepticism of AI due to electricity usage and perceived lack of community benefit.
• Super Bowl Ads & PR Misfires: Hosts suggest that a clear, practical move for Anthropic—like the grid payment pledge—would have been a better Super Bowl ad than current PR stunts.
• Political SuperPACs: Anthropic and OpenAI deploy competing SuperPACs for the coming elections, mirroring a “presidential race” between rival labs.
• Public Trust & AI: Poll—63% would prefer Claude Opus 4.6 (an AI) to decide their court verdict over a jury. Hosts dryly note respondent bias.

Notable Quotes

• “Already, the anti-AI issue is remarkably bipartisan. Data Center Watch claims 55% of Republicans and 45% of Democrats in affected districts [oppose it].” – Nathan Lambert [14:03]
• “It’s like Sam and Dario are running for election and we’re going to see… some attack ads.” – Teddy Schleffer [15:11]

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4. Paramount vs. Warner Bros. vs. Netflix: Hollywood’s Mega-Merger Turmoil

[16:58–20:43]

• Deal Dynamics: Paramount increased its all-cash offer to acquire Warner Bros. Discovery, seeking to outbid Netflix’s agreement. A new investor, Quora Holdings, enters to pressure Warner.
• Cable vs. Streaming Assets: Unlike Netflix, Paramount wants the cable networks (CNN, TBS, Food Network) too. Warner’s contract with Netflix makes switching costly (a $2.8 billion termination fee and quarterly “ticking fee”).
• Justice Department Review & Political Maneuvering: The DOJ is reviewing the transaction for antitrust; former President Trump says he won’t intervene, despite earlier concerns over media consolidation.
• Streaming Experience: Debrief on UFC moving to Paramount Plus—worse viewer experience, more ads, less commentary, causing discontent among hardcore fans.

Notable Quotes

• “Let’s give it up for multibillion dollar termination fees.” – Nathan Lambert [18:27]
• “The markets are reacting. Paramount’s down 7% today.” – Nathan Lambert [19:47]

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5. The Higgsfield Ragebait Drama: AI Video and Viral Fraud

[22:01–27:50]

• Rocketing Revenue, Questionable Tactics: AI video startup Higgsfield boasts $300 million ARR in under a year, but its wild influencer marketing—paying creators to tweet videos that aren’t AI-generated—sparks backlash. Some media kits included stock videos passed off as AI, and even non-consensual deepfakes.
• Dangerous Incentives: The hosts compare this market to BitTorrent or Napster: high demand exists for things that are hard or illegal to do. Higgsfield’s “Earn” program, which paid for viral shares of generated content (often controversial or infringing), led to its ban from X.
• Tech, Tools, and Wrappers: Discussion expands to the business model around “wrappers” for generative models—whether tool-layer start-ups can defend themselves against direct, open-source competition.

Notable Quotes

• “I said this, it was a huge alpha in just taking a cinema camera, filming yourself and being like, this is AI generated and—I’m raising, it’s fraud. But alpha.” – Tyler [23:04]
• “When you’re reselling a model, you are at risk.” – Tyler [24:51]
• “It goes back to the BitTorrent Napster analogy: the demand for things that just can’t be done legally is really, really high.” – Tyler [25:52]

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6. Lighter Moments & Olympic Oddities

[27:55–29:04]

• Olympic Luge Puzzles: The hosts crack up over baffling Winter Olympic events, like men’s doubles luge (“one of the most baffling things I’ve ever watched”) and the saga of a 50-something personal injury attorney aiming to be the oldest Winter Olympian.
• Athlete Branding & Nationality: The Eileen Gu/Bill Gurley meme surfaces; the politics of athletic endorsements and nationality are lampooned.

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7. Memorable Quotes & Timestamps

• “I know this isn’t a fad... The future is already here. It just hasn’t knocked on your door yet. It’s about to. And when it does, I will be ready. My Mac Mini will be unboxed, my agent will be configured, I will describe what I want in plain English and it will appear.” – John Palmer (read by Tyler) [06:28]
• “If you were falsely accused of a crime and it went to trial, who would you prefer to listen to the arguments and give the verdict? And the options are a jury of your peers or Claude Opus 4.6. 63% of people prefer Claude.” – Nathan Lambert [16:05]
• “When you’re reselling a model, you are at risk.” – Tyler [24:51]

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8. Episode Flow and Tone

• Paced & Playful: The hosts move briskly through breaking news, market analysis, and scandal, peppering commentary with deadpan humor and memes.
• Blunt Realism: Underlying the banter is a sober message: both AI and the industries it upends are moving at speeds that outstrip public perception and institution, leaving little time to catch up.
• Depth & Breadth: The episode succeeds in giving listeners both the key facts and the subtext—what matters, what’s posturing, and what might just be hype.

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For listeners and non-listeners alike, this Diet TBPN captures a whirlwind in tech and media, its stakes, and its culture—equal parts earnest, sardonic, and unsettled.

Transcript

[Tyler]

So something big happened yesterday. There was a massive viral article. And do you know how big this something big is happening? How much that grew?

[Nathan Lambert]

It went big. I was getting texts about it.

[Tyler]

It has over a hundred thousand likes now. It's quickly becoming the most read thing in the world. I don't know. It's crazy.

[Nathan Lambert]

75 million.

[Tyler]

75 million views.

[Nathan Lambert]

Views, okay. And 100,000, they're saying that's only 2, 200 people actually read it. But everyone has an opinion.

[Tyler]

Everyone has opinion. I had an opinion. I wrote a piece about it yesterday comparing. Saying AI is not like Covid. I kind of got one shot by the COVID analogy. Just from a mathematical perspective. But the best reaction to something big is happening. It's gotta be John Palmer. Something small is happening. I was reading this this morning, actually laughing out loud. So we'll read through it.

[Nathan Lambert]

John Palmer says, yeah, you were reading it to yourself. And then you just started belly laughing. And so then I started filming. And then I asked you what you were reading. I was filming you. Then I sent that to John.

[Tyler]

Oh, I missed that.

[Nathan Lambert]

To get his reaction to you reacting to his.

[Tyler]

Think back to 2014, a little over a decade ago. If you wanted a burrito, you had to get in your car and drive to the restaurant. You had to stand in line. You had to talk to a person. If someone told you that one day a stranger would bring you a burrito to your front door because you pressed a button on your phone, you would have said, that sounds dystopian and also incredible. Then over the the course of about three years, it just became normal. And this was before Chipotle started skimping out on the portions too. I think we're at that same inflection point right now, except of instead of burritos, it's your entire job. I've spent the last two weeks reading about AI and watching clips of people building things with it. I live in this world now. The future is being shaped by a remarkably small number of people. A few hundred researchers at a handful of companies. I'm not one of these people, says John Palmer. I work in crypto, but I am close enough to feel the ground shake. I follow several AI researchers on X, and I also recently purchased a Mac Mini. I haven't set it up yet, but I think you can understand what I'm saying. I know this is real because it happened to other people first. Here's the thing. Nobody outside of tech understands yet. The people sounding the alarm aren't making predictions. They're telling you what already happened to them? I am relaying this information to you secondhand, with conviction. For years, AI had been improving steadily. I absorbed these improvements fine because I wasn't really paying attention, to be honest. Then apparently in 2025, everything got much faster and then faster again. I know this because I watched a three hour podcast about it last Wednesday. The host was visibly shaken. I could tell because he wasn't even able to finish a single pint of Guinness. Then on February 5, two major AI labs released new models on the same day. And something clicked. Not for me personally. I was at a birthday dinner for my wife's co worker, but for the who tried the models that day. It was apparently a huge deal. One guy said he tells his AI what to build, walks away for a few hours and comes back to find the work done. This will very likely be what my life is like as well. Once I set up my acne, AI will be doing things while I'm in the other room. That's potentially huge. Let me give you an example so you can understand what this looks like in practice. The guy on Twitter built an entire app just by describing it. The AI wrote the code, opened the app, tested the buttons, decided it didn't like the layout, fixed it, and only then said, it's ready. I'm gonna do something. I'm gonna do something like that with my Mac mini, some type of cool app or something. I'm still figuring it out, but I have all the hardware and I'm definitely gonna optimize my setup with all types of skills and plugins. I'm not exaggerating. That's what my Tuesday could look like potentially. But I tried AI and it wasn't that good. People would say this, they're saying this, I tried AI. It wasn't that good. Here's John Palmer's response. He says, I hear this constantly. I understand it because I also thought this. But the models today are apparently unrecognizable from what existed six months ago. Some of the people who are saying this have hundreds of thousands of followers. And make sure you're not on the free plan. You have to get on the paid plan.

[Nathan Lambert]

That's key.

[Tyler]

How fast is this actually moving? Let's answer that question. In 2022, AI couldn't do basic math. By 2023, it could pass the bar exam. By 2024, it could write working software. And by 2025, some of the best engineers in the world had handed over most of their coding work to AI. In February 2026, you can make AI send you a morning summary of the top posts on Reddit from your Mac Mini. What should you actually do? I'm not writing this to scare you, says John Palmer. I'm writing this because the single biggest advantage you can have right now is being early. Early to understand it, early to buy the hardware, early to subscribe to the paid tier and ask it to make a meal. You can start using it for real work. If you're an engineer, give it a.

[Nathan Lambert]

Not a meal, a meal plan.

[Tyler]

A meal plan. Oh, a meal plan. Yeah, actually make a meal. That would be cool. If you're an engineer, give it a GitHub repo. If you're in finance, give it a messy spreadsheet. If you're in other industries, definitely figure out what you can give it. Then give it that. But give it something for sure. I just need to think about it more. Mention it to your co workers. Right now there's a brief window where most people are still ignoring this. You can be the person ignoring it less, which puts you ahead Be the person who walks into a meeting and says, I used used AI to do this analysis in an hour instead of three days. It's fine if it actually took you three days. The point is people will respect you. Get a Mac Mini. This is point number three.

[Nathan Lambert]

And by the way, you can actually get a Mac Mini on doordash.

[Tyler]

You can just like a burrito.

[Nathan Lambert]

It's important.

[Tyler]

Every single account I've seen posting this stuff has a Mac Mini. It's the ultimate tool for this stuff. You got to get your financial house in order. I'm not a financial advisor, says John Palmer. That said, I did just spend $599 on a Mac mini plus AppleCare and $50 on Claude tokens. But if it gets too expensive, have a backup plan to switch to an open source Chinese model. Fourth, watch the podcasts. Actually don't just watch. Study, tvpn, door cash, et cetera. The good thing is that these shows are several hours long, so you can basically fill up your entire day just watching them.

[Nathan Lambert]

Or making them.

[Tyler]

Or making them. In our case. Rethink what you're telling your kids. The standard playbook. Good grades, good college, stable job. It's over. Tell them it's. Tell them it's likely not looking good for them. Go to your 4 year old and tell him it's not looking good.

[Nathan Lambert]

It's not looking good, buddy.

[Tyler]

It's not looking good.

[Nathan Lambert]

It's not looking good.

[Tyler]

What? I know, I know this isn't a fad the technology works and the richest institutions in history are pouring trillions into it. I know this because I've seen it mentioned pretty frequently over the last few months. I know the people who will come out of this best are the ones who start engaging now. Not with fear, but with curiosity, a sense of urgency. Ideally a Mac Mini. The future is already here. It just hasn't knocked on your door yet. It's about to. And when it does, I will be ready. My Mac Mini will be unboxed, my agent will be configured, I will describe what I want in plain English and it will appear I just have to optimize everything first and make sure my setup is super legit. Most people won't want to hear about it until it's too late. You can be the reason someone you care about buys a Mac Mini. So funny.

[Nathan Lambert]

What a banger.

[Tyler]

Such a banger. So, so good. I went and I described in plain English to Codex 5.3 Build me an app. An amazing app. The best app ever. One that will win awards and make me a legend in Silicon Valley.

[Nathan Lambert]

An award winning app.

[Tyler]

An award winning app. And it appears to be working.

[Nathan Lambert]

And more seriously, John John Palmer's post feels like a response to Will's essay Tool Shaped Objects, which is fantastic. Anthropic is nearing the completion of a deal to raise more than 20 billion in a funding round led by investors including Peter Thiel's Founders Fund, D.E. shaw and Dragon Ear. Let's dig in. Being a little bit silly with the pronunciation, Sydney over on X said British AI researcher be like Anthropic. Anthropic is nearing the completion of a deal to raise more than 20 billion in a funding round led by the group I just mentioned. The deal is set to value anthropic at about 350 billion, nearly doubling its prior value. The funding round includes a range of investors including CO2, Singapore's GIC, Microsoft, Nvidia and has become a who's who of Silicon Valley and Wall Street.

[Tyler]

So Founders Fund is known for the monopoly thesis. Like there's a power law. You want to be in the best company in the category. You want the best ownership.

[Nathan Lambert]

Put all your money in that one.

[Tyler]

Yeah, I'll go all in. Famously they did some other social networking deals, but obviously like Facebook was the big one at seed and that was enough to return that fund many times over. And so the whole thesis of the fund for a long time has been like this. Concentrated bets, concentrated bets. AI has been an interesting one. They're now in three major labs because they have a huge position in SpaceX, which now owns XAI. And so they're in that lab. Sort of coincidentally, Peter Thiel, I believe, is listed on Wikipedia as a co founder of OpenAI, or at least he was like an initial donor and got like a co founder title. And so has been involved in OpenAI for a long time. And then they invested, I believe, like the $60 billion round right after. Right, right when ChatGPT was launching. And it was an odd deal because the company had not yet converted. It was very unclear what Microsoft would get, what the employees would get, what the investors would get, what the nonprofit would get, because the nonprofit was going to keep a stake. And so it was this like, wild bet. And I know a lot of investors.

[Nathan Lambert]

It was a leap of faith.

[Tyler]

It was a leap of faith. A lot of investors were scared off because there was, you know, what am I investing in? Like, I'm not getting shares, I'm getting units. And it was like a very odd structure. And I know many investors that were scared off by that.

[Nathan Lambert]

I'm an absolute unit, but I'm used to buying shares.

[Tyler]

Yeah, exactly. So you had to do a lot of sort of leaps of faith. The thesis at the time, how big can this be? What is the market? What are the opportunities for? Really, really huge categories. A lot of founders funds, investments like Space X. It's like this massive category that's very, very hard. But if you crack it, it's going to be an entirely new market. Social media was certainly that as well. That made a lot of sense. Obviously they're in X now, they're in anthropic. Sequoia is also in all three. And the interesting thing is, like, PT has given a number of talks where he's sort of been anti AI. You've seen, you see this whole thing about, like, crypto is libertarian, AI is communist, and that AI is like a consolidating force. He's never been one to say, like, oh, wow, the tools are so amazing. It's been a lot of like, is this just doing your homework for you?

[Nathan Lambert]

He's not putting out threads about using his Mac Mini.

[Tyler]

I don't even know. I don't even know if he has a Mac Mini.

[Nathan Lambert]

You should send John Palmer's piece to pt.

[Tyler]

So, yeah, I mean, reading into this, does this say that the founders Fund team thinks that there's like a divergence in the market? That there are actually two markets going on here? One in consumer AI, advertising, Knowledge Retrieval, the other in code and developer tooling and Codegen and that Anthropic has actually carved out a separate space. So they're less competitive than people think. Maybe they're just more competitive and it just makes sense to get into both.

[Nathan Lambert]

And we have some breaking news.

[Tyler]

What's the breaking news?

[Nathan Lambert]

Anthropic has formally announced the round.

[Tyler]

Let's go.

[Nathan Lambert]

They said we've raised 30 billion, so they upsized it. 20 was boom. They are now at a $14 billion run rate.

[Tyler]

Wow.

[Nathan Lambert]

With this figure growing over 10% annually in each of those past three years, we'll see if they got another 10x in them.

[Tyler]

The biggest update for me is that the forward deployed engineer thing is like, very real. Even if the tools can build themselves, there's still so many blockers to actually rolling these out that you're going to need a lot of people inside these organizations who are actually playing with Mac Minis on the weekend and getting obsessed with these tools and then bringing them into the enterprise. Because it's very easy for a lot of people in Fortune 500 companies to show up and do their job the way they always do it, because no one gets fired for switching things up. But if you roll out some tool and it doesn't work the way you intended or it sucks about a bunch of your time, even if you're just, I have eight hours of work to do in my traditional system. Where do you get the extra hours to automate your work? It takes time. And that's where the Ford deployed engineers come in. So great gig for anyone who wants to go implement enterprise agentic workflows, because that will be the theme.

[Nathan Lambert]

We can see Anthropic's run rate, revenue growth. You can see here quite the pop from $0 in 2023 to 100 million in Jan. Of 2024 to a clean 1 billion in January 2025 sitting at 14 billion.

[Tyler]

This is acceleration. This is. This is true.

[Nathan Lambert]

Are you feeling it yet?

[Tyler]

True acceleration. Dario sort of underplayed 2027, I guess. Or I guess he said that he was like, I don't think we have another 10x if they go to 100 billion.

[Teddy Schleffer]

Well, he said, like, we've been 10xing. Yeah, you know, we'll see if we do it again. Yeah, like, wink, wink.

[Tyler]

If they hit 140 billion run rate by the end of the year, that would be insane. But strange times, strange times. You love this effect. That's all, folks.

[Nathan Lambert]

I mean, Tyler. Tyler's been saying stuff along these lines for some time. So more in Anthropic Nathan Lambert was quoting their announcement from yesterday saying, we're committing to covering electricity price increases from our data centers. This is anthropic.

[Tyler]

Oh, yes.

[Nathan Lambert]

To ensure ratepayers aren't picking up the tab, we'll pay 100% of grid upgrade costs, work to bring new power online, and invest in systems to reduce grid strain.

[Tyler]

Makes more sense.

[Nathan Lambert]

Maybe this should have been their super bowl ad. When you kind of look at clearly how much energy the industry put into the super bowl and what the net effect was for the average American, I don't think the average American came away from that having more positive feelings towards AI. If anything, they were like, I'm sick of this stuff.

[Tyler]

Yeah, yeah, yeah. The meme was like, oh, beer ads, like, refreshing. It's pretty easy to say, hey, my, my, my electricity bill is going up. I don't want a data center in my county, in my city. And you call your city county representative and they say, yeah, I don't like the slop either. I see, I see a bunch of junk that doesn't seem that valuable. Why do we need it here? It's not going to create that many jobs. It's not going to be that good for taxes, blah, blah, blah, blah. And other companies that do this too. Google had their clean transition tariff, and Amazon also pays a surplus above electricity costs. Already, the anti AI issue is remarkably bipartisan. Data Center Watch claims that 55% of Republicans and 45% Democrat in affected districts. So 55, 45. So it's not really like a red right issue or a left issue. Like, there's pushback on both sides. So anthropic is putting $20 million into a super PAC operation that is meant as a direct counter to the OpenAI super PAC operation. The midterms are a battleground between these two rival AI labs, says Teddy Schleffer at the New York Times. And so we're going to see some attack ads. It's like Sam and Dario are running for election and we're going to see.

[Nathan Lambert]

Some be the president of AI.

[Teddy Schleffer]

Yeah, but I mean, we just said that, like, overwhelmingly on both sides, there's like a lot of pushback.

[Nathan Lambert]

Right.

[Teddy Schleffer]

So it's like, what are the actual differences between their, Their approaches.

[Tyler]

Yeah, that is interesting.

[Teddy Schleffer]

Maybe, I guess maybe Anthrop will be more like. About the China chip issue.

[Tyler]

Yeah, it feels like there's. They should be more in alliance than against each other.

[Teddy Schleffer]

Yeah. It's like there's a crypto super pac. Yeah, it's like the big one.

[Tyler]

Yeah.

[Teddy Schleffer]

There's no, like, big AI one right now.

[Tyler]

Yeah. Yeah. It would be weird if there was like a USDC super PAC and then a USDT super pac and they were like, fighting each other and just constantly surfacing bodies that are buried in the closets or skeletons of the closet. Because every time there's a successful attack on OpenAI. Yes. People might be like, oh, okay, I like anthropic a little bit more. But most, most people just come away and be like, I don't like AI.

[Nathan Lambert]

If you were falsely accused of a crime and it went to trial, who would you prefer to listen to the arguments and give the verdict? And the options are a jury of your peers or Claude Opus 4.6. 63% of people prefer Claude.

[Tyler]

Yes. Might be the audience here.

[Nathan Lambert]

Yeah. Yeah. A little biased.

[Tyler]

I think the jury of your peers will be around for a very long time. I mean, they still have courtroom stenographers and we have.

[Teddy Schleffer]

I think Claude's gonna be around a long time, too.

[Tyler]

Yeah. Okay. If you're thinking in centuries, maybe. But I mean, the courtroom sketch artist. We've had cameras for 100 years. Like the jury.

[Teddy Schleffer]

Yeah. I'm not saying that I think this will ever happen. Yeah.

[Tyler]

Okay. But you'd prefer it. You would. Ideally. I mean, how many jurors will be sitting there being like, okay, Claude, how should I vote? I haven't really been paying attention. Like, I've been playing Candy Crush.

[Nathan Lambert]

What's up with Warner Brothers? The situation intensified this week as Paramount CEO David Ellison and a vocal investor made new moves to thwart rival Netflix's planned takeover.

[Tyler]

Storied Hollywood asset and the home of Batman, Harry Potter and the White Lotus.

[Nathan Lambert]

Paramount, the long rebuffed suitor for Warner Brothers Discovery, enhanced its 77.9 billion all cash offer for the entire company Tuesday in an effort to bring Warner to the negotiating table and ultimately abandoned its deal with Netflix, also an all cash transaction valued at 75 billion. Cleveland investor and Quora holdings entered the fray by acquiring a small stake in Warner with an eye toward increasing its holdings and pressuring the company to negotiate with Paramount. I wonder if they're friends with the Ellisons.

[Tyler]

Interesting.

[Nathan Lambert]

Paramount's gamble. Paramount is hoping its latest pitch can persuade Warner to ditch its agreement and sell its movie and TV studios and HBO Max streaming service to Netflix. Unlike Netflix, Paramount also intends to buy Warner Discovery's cable networks, which include cnn, TBS and Food Network. Warner has so far shown little interest in engaging with Paramount, telling investors that Ellison's previous offer was not even comparable to The Netflix agreement. On Tuesday, Warner said its board will review Paramount's new offer, but it but isn't modifying its recommendation regarding its agreement with Netflix. The company advised shareholders to not take any action now regarding Paramount's amended tender offer. The bar for Warner to reopen talks with Paramount is very high given its contract with Netflix.

[Tyler]

A massive termination fee.

[Nathan Lambert]

Paramount said it would pay the 2.8 billion. Let's give it up for multibillion dollar termination fees Warner would owe Netflix should the agreed to deal collapse and pay a ticking fee of 25 cents a share to Warner shareholders for each quarter its deal hasn't closed. Whoa, we got ticking fees, ticking time bomb. Some stakeholders are holding out for Paramount to further boost its bid. I'm not surprised given that they've repeatedly said with their offers this is not our best and final offer. So everyone is waiting around saying let's get those numbers up.

[Tyler]

Remind me of how Paramount is doing right now. They have UFC and the experience watching UFC was a downgrade from pay per view, but cheaper. What was the takeaway?

[Nathan Lambert]

Well, I mean I don't think we can like give an analysis of Paramount as an entire business. Everything looks experience was not as good as paying for the pay per view.

[Tyler]

And was that because you had to, you had to go through all the, you had to jump through all the hoops to sign up for Paramount plus and you weren't already a member.

[Nathan Lambert]

Like the viewing experience was different because it's now subscription and ad supported whereas previously pay per views had ads but not nearly as much. So the thing you're missing now watching is like in round commentary, walkouts, things that like hardcore fans really like there.

[Tyler]

Less Joe Rogan commentary.

[Nathan Lambert]

Basically brutal. Brutal. Well, the markets are reacting. Paramount's down 7% today.

[Tyler]

Paramount needs to test Netflix's pain threshold without having to bid too high. The revised offer does exactly that without further constraining its balance sheet. For now, the ball is now with Netflix. Warner and Netflix are focusing on getting their deal approved by the Justice Department as well as regulatory authorities in Europe. As part of its investigation, the DOJ is looking into whether Netflix has engaged in anti competitive practice. Last week, President Trump reversed course and said in an interview with NBC News that he didn't think he should weigh in on the deal and would instead leave it to the Justice Department. I've decided I shouldn't be involved, Trump said in the interview. He previously expressed concerns about the size and scale of a Netflix Warner combination, saying the combined company would command significant market share. But he's clearly been watching YouTube and he just says YouTube's too dominant. Too many watch hours on YouTube. It's fine, let it rip.

[Nathan Lambert]

Erica over on X posted that Eileen guy to join Benchmark as a senior associate when she returns from the Olympics. She photoshopped this. Of course, we did not put this out, but it's a good bit. Eileen competes for China in the Olympics even though she's a US citizen. Citizen.

[Tyler]

And an American student.

[Nathan Lambert]

And an American student. Bill Gurley responded, I know a lot.

[Tyler]

Of Americans do this. I have a buddy who was able to go play ping pong in the Olympics because he had dual citizenship or he wasn't even like a dual citizenship and he just like his parents were from another country. So he was able to go be on that team because a lot of the other teams are like way less competitive. So it's like you wouldn't make the US team, but you want to play anyway, so you go with the other country.

[Nathan Lambert]

I think with Eileen, it's because the sponsorship dollars she can make by being a Chinese star. Oh, there's all these Chinese brands.

[Tyler]

I thought you couldn't.

[Nathan Lambert]

She's a global star.

[Tyler]

You can just get paid.

[Nathan Lambert]

You can get a bunch of it. Not to compete in the Olympics, but broader endorsement deal. Yeah, yeah.

[Tyler]

You're on the Wheaties box.

[Nathan Lambert]

Getting a gold medal is like ubi. Yeah. Because you'll be able to do.

[Tyler]

You'll be turned into a labu. Potentially.

[Nathan Lambert]

Well, yeah. In this case. In this case, yeah. But Bill Gurley actually responded. He said and said, I can't believe you actually found out about this. We were planning to keep it a secret, but he wrote it in Chinese.

[Tyler]

He's leaning in. He's leaning into the meme. Interesting.

[Nathan Lambert]

Influencer marketing has helped AI company Higsfield hit 300 million in annual revenue run rate in just 11 months. But misleading marketing tactics and a social media strategy based on shock has led to backlash among creators. In late January, Tim Sorett, a London based video game director, received a message on a social media site from the marketing team at Higgs Field, a fast growing AI generation startup. This is the biggest moment in Higgs Field history and we want you to be a part of it. It read. The $1.3 billion startup, whose tools are used by some 15 million creators and ad agencies to churn out four and a half million video clips every day, was about to launch a new tool called Vibe Motion, which uses AI models to convert text prompts into motion graphics.

[Tyler]

You like good Vibes, you have Motion. Use Vibe Motion.

[Nathan Lambert]

The offer of Sorrit shared the startup social media posts along with a video clip from preassembled marketing materials. The company would pay him $200, but sort, who has spent years designing graphics both manually and with AI tools, could tell something was off. Videos Higsfield had shared with him lacked the visual quirks of AI. He's like, this is simply too good.

[Tyler]

Interesting.

[Nathan Lambert]

And he quickly realized that some clips in the media kit weren't generated with AI at all.

[Tyler]

I said this, it was a huge alpha in just taking a cinema camera, filming yourself and being like, this is AI generated and I'm raising it's fraud. But alpha. This happens a lot with OpenAI stuff where people will see a video and they'll be like, wow, they definitely have a new model. And it's like they also have a production budget. Like they can't just hire actors.

[Nathan Lambert]

Well, so when Sam launched Monaco yesterday, was his video AI? Because it looked. It was 5050 for me. And it's kind of a funny thing if you're launching an AI company to show why not? I made this with AI. That good?

[Tyler]

Good enough.

[Nathan Lambert]

Anyways, so this guy gets a media kit, says, hey, can you share some of these AI outputs? But he found out and said there were video templates that appear to have been lifted from a stock site in Vato. And when it pasted its own logos. While Sort didn't share the videos, others did, circulating the stock video templates on X to promote Higsfield. Wow, all this hype is fake and it's bought. Sora told Forbes, Higgs Field's co founder. With its library of 400 presets of camera motions and visual effects, SF based Higgs field offers an easy way for creators and advertisers to produce cinematic short videos through text based prompts. You guys already know this. Last month the startup claimed it doubled its annualized revenue to 200 million in just two weeks, driven largely by subscriptions from its 300,000 paying users. By early February, its annual run rate crossed 300 million. CEO Alex told Forbes that he hopes to reach 1 billion by the end of the year. After raising 80 million from firms like Excel and Menlo in mid January, the startup is now in talks to raise funding again. But that rapid growth appears to be driven by aggressive, shocking and sometimes misleading marketing tactics. Anyways, they're moving very quickly. It was interesting. When we asked Alex about his margins, he gave kind of a concerning response. He immediately was like, yeah, well, when.

[Tyler]

You'Re reselling a model, you are at risk. There at the same time, with a different business model, with a different customer acquisition flow, it's possible to have good margins on top of models if it's deeply embedded.

[Nathan Lambert]

Here's maybe where Higsfield kind of crossed the line. Apparently they were sharing a Google Drive folder with creators that had popular children's characters like Shrek, Moana and Mickey Mouse saying things that are on the show but sound a little, a little racist. And then non consensual deepfakes of public figures like Sydney Sweeney and Zendaya and President Trump. So the challenge here is like companies like Higgs Field are competing with these Chinese open source models that have no rules. They'll generate whatever you want. And clearly there's an insane amount of demand for video models that have no rules, of course. And so this isn't surprising even though it's wrong.

[Tyler]

Yeah, I mean it goes Back to the BitTorrent Napster analogy where like the demand for things that just can't be done legally is really, really high. You can't view that as a business opportunity because of course you'll see really, really high demand for completely free music if you're not paying anything. Right. You'll see really high demand for generate Mickey Mouse character. The question is, the business question is can you actually do the deal license? It's make sure all the stakeholders and all the legal parties are represented and happy with the deal and everyone's paying.

[Nathan Lambert]

Yeah. So they did launch a program called Higgs Field Earn, which was basically like a clipping thing. You could make stuff, share it. Depending on how much engagement it got, you'd earn some money.

[Tyler]

Yeah.

[Nathan Lambert]

That led to them getting banned from X for their account shut down.

[Tyler]

Whoa, I didn't realize that.

[Nathan Lambert]

So, yeah, we'll see how this nets out.

[Tyler]

I do think that there's an interesting opportunity right now for a little bit of what cap cuts doing, plus Nano Banana Sora stuff where you have a lot of video generation, but then you also have the ability to layover just actual text, actual motion graphics. And if you pair up some of the more deterministic tools like basically tool use, like how ChatGPT can also do a math problem in python and be 100% accurate. You could imagine if you, if you want to just draw a rectangle on top of the video that you've generated or make it black and white, that's something that doesn't require a generative AI model. You can just call a tool that has the same functionality as Premiere Pro and then it'll just do that but you have to actually wire all that up, make it all work together, and maybe that's where this goes. And then I don't really know how defensible that is, but we'll see.

[Teddy Schleffer]

Yeah, I was just going to say, like. I mean, you're kind of just describing, like, a wrapper, right?

[Tyler]

Yeah, exactly.

[Teddy Schleffer]

At least in the text field, seems like rappers, at least of late, like, have not been.

[Tyler]

Yeah.

[Teddy Schleffer]

You know, people are much less bullish on rappers now than they were, like, a year and a half ago.

[Tyler]

Yeah, probably.

[Nathan Lambert]

I don't know. SD kid pretty good.

[Tyler]

Yeah, I like that.

[Nathan Lambert]

We got one more post.

[Tyler]

Yeah.

[Nathan Lambert]

Yeah. People are reacting to the men's luge doubles. They're saying, it's one of the most baffling things I've ever watched. And national champion speaker says, how do you find out you're good at this? What's the conversation look like? I guess I may have seen this before. I remember as a kid watching singles, but this is baffling.

[Tyler]

There's also something called skeleton.

[Nathan Lambert]

What do you.

[Tyler]

I think it's an evolution. I think it starts with, like, a toboggan, and you have, like, a bunch of people essentially in, like, a rowboat. And then you're just like, let's do one less. Let's do one less. Let's optimize and reduce weight. And then they're finally down to just two people, and they're basically just on this, like, sled together. And. Yeah, I guess you get here. Very, very funny. Personal injury attorney in his 50s is on the cusp of becoming the oldest American Winter Olympian in history. All he needs is for one of his teammates to slip and fall. This guy is elite.

[Nathan Lambert]

I feel like being a personal injury attorney is probably a great gig. If you're in one of these kind of fringe Olympic sports, you want to have some flexibility in your schedule. You want to be able to make enough to reinvest into the sport. This guy's clearly locked in. It's been an honor.

[Tyler]

It has.

[Nathan Lambert]

Have the best evening of your entire life.

[Tyler]

Yes. And we'll see you tomorrow Friday. Goodbye.