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- [00:00]
Ben Thompson
The Great Lock in continues. We will go into a review of the last few days. It's Friday, we're having fun. We're gonna be hanging out here on the stream telling you about the American economic roller coaster. You've heard this story before, it's just nonstop. Okay, so the American economic roller coaster. Good to be back.
- [00:22]
Travis
We miss you guys.
- [00:23]
Ben Thompson
It's good to be back. Yeah, we got a bunch of stuff going on, a whole bunch of economic news over the last couple days. Stock market is absolutely ripping. We should be in white suits. Intel's up 20 almost and there's this split between the AI economy and the real economy, the American economy. And there's a whole bunch of different things that like you need to puzzle together to get a picture of what's going on. And then I'm discovering that there are K shapes within the K shapes. Even in the real economy there is divide between different companies. And so I wanted to walk through that. So let's start with the intel news. It's up almost 20% today on the news that they will be making chips for Apple. There's a report in the Wall Street Journal about this. They've released reached a preliminary chip making. Not completely locked in but there's a whole bunch of extra context here that we've been tracking for the last six months, 12 months. As some of this was expected the revitalization of intel was something that a lot of folks were clamoring for. Ben Thompson myself, a lot of folks were all hoping for something and plans are starting to come together. So the talks have been described as intensive. Intensive talks between the two companies have been ongoing for more than a year. Apple's been talking to Intel. Interesting. Of course intel and Apple have been long term partners for the 90s 2000s up until the Apple Silicon program where they started going. Apple started going direct to tsmc. Can they get them back? It seems like potentially in some form factors but we're gonna dig into it. So they have hammered out a former deal in recent months and it's still unclear which exact Apple products Intel would make chips for and manufacture them both its own designs. So intel has two main businesses. It's both a design shop and a manufacturer. They have a fab and a and a design unit in its foundry unit. Both businesses have been underperforming for years before Lip Bhutan came in as the new CEO and was vowing to revitalize them. And so last summer the Trump administration struck a deal to convert nearly $9 billion in federal grants into intel stock
- [02:21]
Travis
giving the U.S. 10% roughly 20, $21 a share. It's now at $125 a share. White House has got to be feeling pretty good.
- [02:30]
Ben Thompson
Yeah, huge. I mean, I'm pretty sure Jensen has made over a billion dollars on the $5 billion investment. I mean, just today, if it's up 20%. And he must have seen a big growth in that position since then. So just today, probably a $1 or $2 billion print. And so the reporting here in the Journal says that the Trump administration was actually key in bringing Apple to the table, putting pressure on sort of both sides to say, hey, let's think about the future of American manufacturing resiliency, Taiwanese dependence on a foreign supply chain and giving Intel a real shot at underwriting the next big fad that they want to build.
- [03:08]
Travis
Nidia got in at $23 a share with their $5 billion investment. So up around a 5x.
- [03:16]
Ben Thompson
Not bad. That's not bad at all.
- [03:18]
Travis
The guy really needed it.
- [03:19]
Ben Thompson
He paid for Grok with that. That's pretty sick. Oh yeah, he just paid for Grok perfectly.
- [03:24]
Travis
That's why he wired before they actually closed.
- [03:26]
Ben Thompson
Yeah, he's like, I'm up. I got gains. I need to offset these. So Commerce Secretary Howard Lutnick has met repeatedly over the last year with high ranking Apple officials, including CEO Tim Cook, as well as SpaceX chief Elon Musk, Nvidia chief Jensen Huang to try and convince them to get into business with Intel. There was a discussion about should Nvidia dual source the grace CPUs from Intel, SpaceX and Elon's been with Samsung for a lot of Tesla chips. But there's been discussion there. There was that rumor about global foundries and Elon's always been in and around the fab world and he's obviously going a lot deeper with the long term Terrafab project. So Commerce Secretary Howard Lutnig was trying to convince them to get into business with Intel. Some of the people familiar with the matter said with the Apple deal, Intel is now signed partnerships with all three. So over the last decade, intel fell badly behind rivals. This is from the Wall Street Journal, such as TSMC and Samsung Electronics. After a series of technical mishaps, leadership changes and failed attempts to a consolidation led outside foundry customers to pull or curb their businesses. When intel hired Tan in March of 2025. Wow. Just a year ago to replace ousted chief executive Pal Gelsinger, President Trump raised concerns that Tan's close ties with China would compromise him and called for his ouster it was a very, very dramatic moment. But Tan won Trump over with a charm offensive. I like that. And the government announced its 10% investment in intel shortly after. Following the investment, intel shares price rose sharply on Friday morning. It rose 7 1/2% to an all time high of nearly $118 per share. It's up more now. Tan has been reshaping Intel's top leadership ranks in recent months, including hiring former TSMC executive Wei Gen Low, a move that prompted a lawsuit from tsmc. So they're not friends anymore. Intel CEO has also ousted his head of product and hired new executives to lead the company's data center, processor and client computing units, as well as newly formed custom silicon business. He's also invested heavily in Intel's most advanced manufacturing process, known as 14a. And that is the node that intel is hoping that all of the potential customers will jump together and say, hey, we're going to buy from this. If you make it, if you build it, we will come. President Trump personally advocated for intel to cook in a meeting, which is funny because it sounds like he's advocating for intel just to cook generally, but he's no, he's advocating for intel to Tim Cook. In a meeting at the White House, according to people familiar with the matter, Trump said, I like Intel. In January, he said that the government made tens of billions of dollars from intel deal and that the government's backing of the company had attracted important partners to Intel. As soon as we went in, Apple went in, Nvidia went in, a lot of smart people went in. Trump said. Nvidia, the world's largest chip firm, invested 5 billion in intel in September. And the two companies announced partnership under which intel would build custom data center CPUs, the processing brains for most computer systems for Nvidia. And last month, Elon, of course, announced the Terrafab project. And so Apple relies on TSMC to make chips for iPhones, iPads, Macs and other devices and is under pressure to find additional chip suppliers. There's also chip shortages, so it could be good to dual source independent of the geopolitical discussion. On Apple's last two earnings conference calls, Cook blamed a lack of availability of advanced chips for Apple's inability to meet customer demands for iPhones. The constraints are expected to continue in the current quarter affecting several Mac models. Cook said, quote, we think looking forward that the Mac Mini and the Mac Studio may take several months to reach supply demand balance. And after the earnings call, Apple raised the Mac Mini starting price. And so TSMC's manufacturing capacities capabilities far surpass those of Samsung and Intel. Makers of other kinds of chips for memory and storage, for example, are more competitive with one another, giving Apple multiple sources of supply, although of course they are memory constrained. Apple's long been TSMC's top customer, but skyrocketing demand for its manufacturing capacity from Nvidia and other designers of AI chips means Apple no longer has as much leverage to secure the supplies that it needs. Starting in 2006, Apple used Intel designed CPUs as its main processor of its personal computers, but switched to its own custom CPUs based on ARM design in 2020. That's the dawn of Apple silicon. And so there's been an incredible economic and financial performance concentrated in just a handful of trillion dollar tech companies. Intel starting to join and starting to perform like that. There's a few memory stocks, I saw one report that referred to it as the Mag 10 and they'd added a few other AI names to that group. But there's just a few companies that are driving the vast majority returns in the stock market.
- [08:14]
Travis
We had three sort of beautiful weeks where pretty much everyone started saying there's no way it's a bubble. Yeah, look at the revenue growth. There's no way it's a bubble. But now people, Steve over at Bloomberg, we can pull this chart up the concentration, sure, I've seen this. The market, you can see the Big Ten.
- [08:35]
Ben Thompson
So mag 7 AMD, Broadcom and one other is the Micron now make up 40% of the market. Railroads for reference during 1835-1910 were 63% of the market. And he comps it to Japan, the nifty 50 tech and telecom throughout various periods of time. And so I was reading this post by or this piece by Greg IP in the Wall Street Journal and he was trying to disentangle what's happening in the overall American economy from the AI economy. What's. Where is the growth coming from? He sort of back the envelope did he said the AI economy grew 31% while the non AI economy just 0.1%. And he cites a few economic statistics that are recent. Personal consumption, the biggest component of GDP grew a relatively muted 1.6%. Investment fell in housing, business structures I think we're building, we're spending more on data centers than housing now or office buildings I guess. I think it eclipsed office buildings and factories and transportation equipment like trucks and aircrafts. Meanwhile, investment soared 43% in tech equipment. Obviously that's chips and GPUs, 23% in software surprising. And 22% in database had a pretty meaningful bounce back, certainly on the revenue side.
- [09:56]
Travis
Datadog Atlassian. There's been some acceleration.
- [10:00]
Ben Thompson
It really was extremely widespread where you had, I mean, you had like doordash and companies with strong network effects where the software was not their moat. They still had to go and answer to the market. And some of them got in and out of that in a week or a month. And some of them, it took a quarter or two to show that there's resiliency. Some of them are still beaten down, but overall software is still doing very well. On the flip side, there's another headline that hit The Journal yesterday. US adds 115,000 jobs in April with solid hiring across sectors. Retail, transportation, warehousing and health care all showed strong growth and led to expectation beating jobs growth. And so this is the weird dynamic that, you know, you're seeing all of this growth in the, in the AI economy and yet the overall employment is still chugging along. We can pull up the chart from the Wall Street Journal. But the US job market blew past expectations in April, buoyed by gains in industries including retail, transportation, warehousing, health care. Not completely unexpected given that those are not particularly AI targeted areas. Whereas you might see the layoffs in the tech community, but it's just not enough because the US employs over 100 million people. And so a layoff of 4,000 people at some tech company just, Just doesn't really move the needle when you're talking.
- [11:30]
Travis
Breaking news from Gabe in the chat. Texas Roadhouse is up.
- [11:33]
Ben Thompson
What?
- [11:33]
Travis
Why? Says 20%. I'm seeing 15% either way.
- [11:37]
Ben Thompson
Why is it up so high?
- [11:38]
Travis
He says you're not bullish enough on Texas Roadhouse. I have never been.
- [11:42]
Ben Thompson
Maybe they beat. Everyone says this is a Kiraku filter. It really is.
- [11:49]
Travis
It's crazy how, how viral that that meme format has gone. I thought that was just like a thing that I. I sent to you because. Because I'd be dying laughing about it.
- [11:58]
Ben Thompson
No, no, no. It's quite popular. Broken containment fully. The American economy added 115,000 jobs in April. This was down from a net gain of 185,000 jobs in March. But it was much better than what expectations were for April. Analysts polled by the Wall Street Journal were expecting 55,000 jobs, and the real number came in more than twice that, which is like. It just breaks the narrative a lot. There is this disconnect between, like, the AI economy and the real economy. I was talking to Sager about this. It's like in some ways, it's like AI is Nvidia Earnings is holding up the global economy and it's holding up the global stock market. It's not actually holding up the economy. If you view the economy as all of the different jobs and activities that happen, even if there isn't incredible growth there, there's actually a surprising amount of strength and resiliency. So the unemployment rate, I'm waiting to
- [12:54]
Travis
hit the go until we see what the revisions come in at.
- [12:58]
Ben Thompson
We haven't seen any revisions from March this time. I don't know.
- [13:01]
Travis
It comes like. It comes like. It comes like over six months later.
- [13:04]
Ben Thompson
The April report, coming in after strong job gains in March, shows how the labor market is holding up better this year than last. While health care is still leading the way in job gains, other sectors now appear to be picking up. Businesses are seeing conditions stabilizing and they have weathered the tariffs. So many are hiring. It's looking somewhat better than it did last year. Diane Swonk, chief economist at kpmg, says it's still a high anxiety job market. Those who have a job are clearly clinging on, while those who are looking for a job are feeling frozen out. I was digging into, you know, where, where is their strength within the real economy? Once you go outside of AI, what is going on? And there were two recent earnings reports that were sort of disconnected but showed a little bit of the picture of what's going on. So it was Whirlpool and Six Flags. Both had very different reports. So Whirlpool, you probably know from refrigeration and washing machines, dryers, that type of appliance. They've been making an appliance for over 100 years. And they've also been paying a dividend since the 1950s. Consistently. They've never suspended their dividend, even through all the Great Recession, the dot com crash. Every year they've been able to pay that dividend. They just cut their dividend, which is a really, really big deal for this company since it's a dividend stock. The stock traded down on the news and the stock is down 80% of the past five years. And they're in some financial trouble. Like, they have a lot of debt and they have a lot of competition. But you could play that as like, okay, the real economy is like completely chugging to a halt. At the same time, you had Six Flags, which should be the thing that is the most discretionary, like, do you go to the roller coaster theme park or not? And Six Flags just reported higher first quarter revenue they're growing and they're growing attendance and customer spending. And so now Six Flags, it's not exactly a juggernaut of business. It's only worth 2.3 billion. And the stock is down over the past two years about 50%. But the business is growing and you wouldn't expect that during a time of like deep economic weakness. And so there's something odd going on there where as you think of refrigeration as extremely necessary, roller coasters as the ultimate. Like you don't, you can definitely skip it if you are cash strapped, but the actual dynamics of the market are very different. So Whirlpool sells big ticket necessities, these refrigerators, but they are deferable. So you can put off getting a new refrigerator, you can repair an old refrigerator if money is tight. But your kids are only really rollercoaster age for a lim time. And Whirlpool also faces brutal global competition. And existing home sales are down 3% month over month. And so all of that drives fewer appliance upgrades. And they are not necessarily a beneficiary of all the international competition that they face from LG and Samsung and other international players. And so I've sort of correction Six
- [16:02]
Travis
Flags or new information. Six Flags has been up since, since around, around November. It sort of bottomed. Travis, I remember I was thinking of this because one, they have the ticker fun, which is fantastic. The stock has not been having fun, but Travis Kelsey and a group put in 200 million.
- [16:21]
Ben Thompson
That's right.
- [16:22]
Travis
We talked about stock traded down pretty substantially. Yeah, I remember that after the investment. But it's basically recovered to where it was.
- [16:30]
Ben Thompson
Yeah, and well, it's still down over the past like five, two years ago it was like a $5 billion company down big. But what's interesting is that at this time of economic uncertainty and all these questions about hiring, questions about economic resilience, they are increasing revenues, increasing attendance, increasing customer spend, and that's what's driving the stock today. And so I was looking at these two companies and I was like, they sort of fit into this barbell thesis of the AI future, which I've been seeing pop up more and more. And the two examples that I always give are, one, the Ellison family is both like long slop and long anti slop. They have a ton of infrastructure investments in AI through Oracle, and then they own legacy media like Batman, Superman through Warner Brothers. And then Josh Kushner is doing a similar thing with OpenAI and the San Francisco Giants. Like two completely opposite ends of the spectrum. So you can think of roller coasters as potentially like anti science slop because you can't vibe code space Mountain. But it's interesting to sort of like dig into the weeds of what's going on in the global economy and the American economy and seeing where the unsuspecting winners are. Ryan Peterson shared a post from the OR chart from the Financial Times that perfectly illustrates our possible futures. This is so funny that this is in, in the Financial Times, but they fully embraced what happens in the human extinction tech singularity and the end of scarcity tech singularity. In the bull case, real GDP per capita goes north of a million dollars and in the human extinction scenario it goes to zero, of course. But the AI boosted growth path is a steady trend upwards and that is the goal that I think everyone should be working for. Potentially the end of scarcity outcome as well. And I think this chart that Ryan shares is sort of, I think why there's anxiety in the market because there's this, you know, the whole like you're not prepared if it's not a bubble concept. But there's like a dual anxiety where like if AI gets too good, there's mass unemployment, everyone's worried about that. But if AI is a bubble and it collapses, you go into a recession and everyone loses their job and like you're in a similar scenario of like economic anxiety for both the, not necessarily the true doomers. I mean obviously they face a similar opinion. But even if you're just like in the it's overheated camp, there's real risk to the stability and I think that's where a lot of the bubble concerns come from. Although we're certainly not seeing very many signs of the bubble. I mean obviously the valuations are high, but so are the revenue growth charts. So we can go through some of the folks that are arguing.
- [19:21]
Travis
Are you more of a back of the envelope guy or a napkin math guy?
- [19:24]
Ben Thompson
Oh, that's interesting. I have a napkin here from Wonderco from the event I brought in.
- [19:30]
Travis
Would you look at that little souvenir.
- [19:33]
Ben Thompson
I like a napkin. I like a napkin. Actually, now that I'm thinking about it, napkin math is insane. It's extremely hard to write on a napkin. It's way easier to write on the back of an envelope. Yeah, get a more big envelope. You can get an envelope that's eight and a half by. It's a, it's effectively an envelope is sophisticated spreadsheet.
- [19:50]
Travis
An envelope is, is kind of a core business utility. Yeah, napkins can be Used for anything.
- [19:56]
Ben Thompson
If you're in napkin math, you got to pivot.
- [19:58]
Travis
I will say I'm much more of an napkin math guy. I can't. I mean, just, just, just the phrase spiritually. Spiritually and the phrase that I pull. But if I can't get excited about an opportunity based on what can fit on a napkin, then I'm never going to get excited about it.
- [20:15]
Ben Thompson
So you think a napkin is definitionally smaller? It's a less amount of math.
- [20:22]
Travis
It's a lesser vehicle than an envelope.
- [20:26]
Ben Thompson
Yeah. Because a big envelope you could do a full spreadsheet on.
- [20:29]
Travis
Totally.
- [20:30]
Ben Thompson
You could write out comps.
- [20:31]
Travis
Totally.
- [20:32]
Ben Thompson
And have multiple cells.
- [20:34]
Travis
No. So in practice, I'm a napkin math guy, but if something was really serious, I would probably trade.
- [20:44]
Ben Thompson
Yeah, we've been doing too much napkin math around here. Time to pull out the big guns. Let's get out the envelope.
- [20:49]
Travis
Speaking of envelopes, so this morning I was telling Tyler, yeah, I'm incredibly overwhelmed with slacks, emails, DMs on every platform, LinkedIn, DMs, Instagram, DMs, XDM's, all the different messaging apps. And I was thinking, how cool would it be if there was a service where you connected all your inboxes to, and then every day they would print out all of the different messages and then bring them to you? And you could put like a box. Yeah, you could put a box outside of your house and they would just put them in there. And then at a specific time, you know, maybe in a roughly like two hour window, you could go out and grab all the printed out messages and sort of like leaf through them, decide what you need to respond to. You would, potentially, because you're only getting messages once a day, you would probably be a lot more intentional about what you wrote back and forth. Right. And I think that could be sort
- [21:45]
Ben Thompson
of the opposite of Earth Class mail, those virtual mailboxes, because they'll take your physical mail.
- [21:51]
Travis
Yeah, but I want everything. I want everything.
- [21:53]
Ben Thompson
You want everything printed.
- [21:54]
Travis
I want to put a box outside of my house that people put. And I think there's something there. Yeah.
- [22:00]
Tyler
Trump. I mean, Trump literally does this.
- [22:01]
Ben Thompson
He does that, right?
- [22:02]
Tyler
Yeah. And then he'll, he'll write with a big marker his response, and then his assistant will scan it and then email it back.
- [22:09]
Travis
Yeah, More, more on C. Fry says a napkin is more available than envelope. Very true. Often the best business meetings were not scheduled as a business meeting.
- [22:22]
Ben Thompson
So there aren't envelopes around.
- [22:23]
Travis
There's napkins, no envelopes around. But there's plenty of napkins.
- [22:25]
Tyler
Yeah. Also, I mean, you're saying napk are smaller, but if you're at a restaurant and you have like a fabric napkin.
- [22:30]
Ben Thompson
Yeah.
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Tyler
And you want to be big, those can be pretty big.
- [22:31]
Ben Thompson
So you're, you're. But I feel like it's bad form to be at a restaurant. Like, you're not supposed to ruin the napkins. Or do you carry a pen that has washable ink?
- [22:41]
Tyler
You have the crayons for the kids. Right. People are.
- [22:43]
Travis
The chat is saying.
- [22:44]
Ben Thompson
They don't ask you to.
- [22:45]
Travis
Saying I could call my service the United States Post Office.
- [22:48]
Ben Thompson
Yeah. That's a good name.
- [22:49]
Travis
Thank you. Alex. That's a great name.
- [22:50]
Ben Thompson
That's sort of like the San Francisco Artificial Intelligence Company or something like that. Or the browser company of New York. It would be inspired by that. Yeah. I think that even with the crayons, he uses crayon.
- [23:05]
Travis
Closed fisted grip right on the tablecloth.
- [23:08]
Ben Thompson
Okay. Yeah. I feel like if you're given crayons, you are expected to maintain that the child uses the crayons only on the children's menu, which is typically made out of paper. Very disposable. If you see the child using the crayons on a cloth napkin, you are expected as a patron to intervene.
- [23:30]
Travis
Jackson says digitize this service and call it email.
- [23:34]
Ben Thompson
There we go.
- [23:36]
Travis
We gotta establish the mailbox first. We got an idea, but then we can go there. But I like where you're going.
- [23:42]
Ben Thompson
Well, there's some other posts about the markets. Justin Spitler says them be careful buying semis here. Obviously, the market's very, very.
- [23:52]
Travis
Let's pull up this video. Travis.
- [23:54]
Ben Thompson
Let's play this video. Oh, this is Travis Pastrana.
- [23:57]
Travis
Yes.
- [23:57]
Ben Thompson
That's amazing. Nitro Circus we mentioned many times on the show. Is he drinking a Red Bull?
- [24:03]
Tyler
Yeah. No parachute?
- [24:05]
Ben Thompson
No. Oh, no parachute.
- [24:06]
Travis
Yeah. So he jumps out of the plane, no parachute.
- [24:09]
Ben Thompson
That's crazy.
- [24:09]
Travis
Drinking a Red Bull.
- [24:10]
Ben Thompson
That's actually.
- [24:11]
Travis
And then he connects. He's got to do some tricks.
- [24:14]
Ben Thompson
He's really taking his time here. The tension is building, building, building. And so he connects with someone who wraps him up. And then do they pull the parachute
- [24:24]
Travis
or do they strap him to them?
- [24:27]
Ben Thompson
Oh, okay. There is a strap.
- [24:28]
Travis
Strap themselves.
- [24:29]
Ben Thompson
Because it seems sort of crazy just to bear hug and hope for the best.
- [24:33]
Travis
You're bear hug.
- [24:33]
Ben Thompson
I don't know. It's Red Bull. Anything could happen. I would expect him to be delivered a full parachute, his own parachute that he then, you know, dons and. And. But he made it wow. Well, that's what it's like investing in semiconductors right now. I guess. Anyway, how was your last two days, Tyler? What'd you get up to?
- [24:52]
Tyler
It was sick. I was at the. I went to the trial.
- [24:55]
Ben Thompson
You went to the trial?
- [24:56]
Tyler
OpenAI elon trial.
- [24:57]
Ben Thompson
Okay, walk me through it. You left the studio on Tuesday. You leave the office at 2. After we wrapped the show on Tuesday, you went straight to the airport.
- [25:06]
Tyler
I did.
- [25:07]
Ben Thompson
Okay.
- [25:07]
Tyler
Yep.
- [25:07]
Ben Thompson
And then what time did you go to bed? Cause you woke up really early, right?
- [25:10]
Tyler
Yeah. So I got to the trial. So it's in Oakland, the courthouse, at, I think like something around like 530.
- [25:16]
Ben Thompson
5:30.
- [25:17]
Tyler
Yeah. Because you got to get in line. So basically, you know, it's a public. Yeah, because. Because it's like a federal case.
- [25:22]
Travis
Yeah, yeah.
- [25:23]
Tyler
They're like. Has to be some room for the public. But there's only like. I think the number is somewhere like 20 or 30 because I think it's closer to 20 because I think part of the 30 is reserved just for media.
- [25:33]
Ben Thompson
Okay. And when you got there at 5:30, were there already people standing in line?
- [25:37]
Tyler
Yeah, so they were. I think there were like three. Three or four people there already in line.
- [25:42]
Ben Thompson
Early bird getting the worm.
- [25:43]
Tyler
Because I didn't want to be late, honestly. Did you talk to people? A few of them.
- [25:48]
Travis
Were you there before Mike Isaac?
- [25:50]
Tyler
I was there before Mike Isaac, but
- [25:52]
Ben Thompson
he is a media past, so.
- [25:53]
Tyler
Yeah, because last time when Mike Isaac came on the show, he said that because each like, news.
- [25:58]
Ben Thompson
Yeah. New York Times got one pass and he was splitting it with Cade Metz. And so they were sort of going back and forth and I guess he had a media pass that day.
- [26:07]
Travis
Yeah.
- [26:07]
Tyler
So that day he had immediate pass. He got there pretty late. He got there like 7:30 or 8.
- [26:11]
Ben Thompson
Okay. So you're there from 5:30. He gets there at 8. What time does the trial actually start?
- [26:16]
Tyler
Around 8:30.
- [26:16]
Ben Thompson
8:30. Okay. Yeah.
- [26:18]
Tyler
So basically I'm just posting up for like three hours.
- [26:20]
Ben Thompson
Okay. And then this is Wednesday. So walk me through. Like, what, what are you seeing? There's these opening remarks from the judge. They sort of welcome everyone in.
- [26:27]
Tyler
Yeah. Jury comes in.
- [26:28]
Ben Thompson
Okay.
- [26:29]
Tyler
So there are basically three main, like, segments. So basically I'll say it starts 8:30, ends at, I think 2:00pm there's two breaks, two 20 minute breaks. So starts off and we watch like the deposition of Mirror Marathi. So this is all live streamed, right? The audio is live.
- [26:45]
Ben Thompson
The audio is live. So you're seeing a video.
- [26:47]
Tyler
We're watching the Video of her deposition. It's mostly covering the ousting, the timeline of the ousting.
- [26:53]
Ben Thompson
And this is where.
- [26:54]
Tyler
This is where all the texts came out?
- [26:56]
Ben Thompson
Yeah, yeah. Were they showing you the actual text? Were they playing a video? Or were they playing the AI reenactment of the text? Because we have this. Someone turned Sam Altman's text, Amirah moradi, into a 2011 style emo teenage heartthrob anthem. Did this make it into the courtroom or no? Let's play this. We have the audio.
- [27:19]
Travis
Can you indicate directionally good or bad?
- [27:25]
Ben Thompson
And others anxious?
- [27:27]
Travis
Directionally, very bad.
- [27:29]
Ben Thompson
Good motion graphics too. Whoever made this, talented. What is this? Suno. Can you put in text into Suno?
- [27:47]
Travis
Play this for an AI skeptic.
- [27:49]
Ben Thompson
Yeah.
- [27:49]
Travis
And. And see what their reaction is.
- [27:52]
Ben Thompson
How do you see this and not want to build? I've seen these before and I've always really enjoyed them, but with most of the AI music tools, I've never found a great way to put in a full script that I've written to get the results, but does happen.
- [28:06]
Tyler
So the author said his steps to make this. First he OCR the images and turn them into plain text. So images of the actual text messages and then removed the names from the dialogue pasted into Suno and iterated like 20 to 30 times.
- [28:19]
Ben Thompson
Ooh.
- [28:19]
Tyler
And then finally thought this one was catchy.
- [28:21]
Ben Thompson
Okay.
- [28:22]
Tyler
Yeah.
- [28:22]
Ben Thompson
Put up a version of this with the Gen Z brain rod slang. Yo, fam, can you give me a vibe check and am I cooked or. Nah. For real? For real. Satya and the gang Low key stressing murmurati. Yeah, you're skibidi. This isn't a rare L. This is an Ohio level. Generational or a loss little bro who ratioed me? Sam Altman says Miramorati. Some rando. Zesty NPC twitch looks maxing Sigma. I'm not even gonna go further. What else happened? Did someone actually get on the stand or was it all video? Yes. So the first, like, it's straight up teacher played a movie. It's movie day.
- [28:58]
Tyler
The judge actually did get angry because, like, she was like, oh, the jury's gonna get bored. And like, she was like, offering them coffee and stuff. Okay. So basically, yeah, the first maybe hour was mirror deposition video. And then we go through some of the actual, like, documents again, the text messages. And then Siobhan Zillis is testifying. So she's physically there.
- [29:15]
Ben Thompson
Okay.
- [29:16]
Tyler
She was a open board member 2020-2023. And she steps down when Elon started.
- [29:22]
Ben Thompson
Yep.
- [29:23]
Tyler
I have no idea how long that was. That was the majority of the.
- [29:26]
Ben Thompson
During the whole conflict.
- [29:27]
Tyler
Yeah.
- [29:28]
Ben Thompson
Perfect person. Yeah.
- [29:30]
Tyler
So she actually left the board before the ousting. So she left in February 2023. Ousting is November.
- [29:36]
Ben Thompson
Oh, okay. Interesting. I didn't. The timeline always gets so jumbled up because, like, there's like 2018 battles between Sam and Greg and Ilya and Elon, and then there's the board. Yeah.
- [29:47]
Tyler
Because all throughout this hearing, there's like. Yeah.
- [29:49]
Ben Thompson
There's sort of main moments.
- [29:52]
Tyler
Right.
- [29:52]
Ben Thompson
Yeah. And we're sort of clicking back and forth between them.
- [29:55]
Tyler
Yeah.
- [29:56]
Travis
Chat wants to know what kind of wombos were being thrown around. Was Lorraine being used? People saying, can you please, Lorraine?
- [30:04]
Tyler
This email, Siobhan was actually dropping some good lingo.
- [30:07]
Ben Thompson
I don't know if I remember anything. There's something like Mike Isaac always talks about. Like, they keep referencing Dota and they keep. Everyone on the stand is using a ton of jargon. How jargony was it? Was it like Dwarkesh Patel podcast level jargon or like actual, like, researchers, like, talking to each other jargon?
- [30:26]
Tyler
I would say it was not very sophisticated, especially among the lawyers. Right.
- [30:29]
Ben Thompson
Okay.
- [30:30]
Tyler
Siobhan, she did drop some good lingo. Okay. Yeah, it was some referencing, some like, why she got into AI, but, you know, acceleration, all this.
- [30:38]
Ben Thompson
Okay. Okay.
- [30:39]
Tyler
And then after that, we watched another, like, hour long video of Helen Toner's deposition. Wow. That was just about the ousting.
- [30:45]
Ben Thompson
Okay.
- [30:45]
Tyler
Yeah, it was very fun. I enjoyed a lot. Like, basically almost everyone, like, sitting in my section, which was basically the public and the media.
- [30:51]
Ben Thompson
Yeah.
- [30:52]
Tyler
Like, everyone that came as the public were basically also media. They just get the media pass.
- [30:57]
Ben Thompson
Sure.
- [30:57]
Tyler
So everyone surrounding me is. Is on their laptop, like, typing, basically. Yeah. Just like taking down what's being said.
- [31:03]
Ben Thompson
Yeah.
- [31:03]
Tyler
And then I'm just in there enjoying it because it's like, you know, it's good stuff.
- [31:07]
Travis
How would you rate Mike Isaac's, like, snack and overall food supplies for the day? Did he burn it?
- [31:13]
Ben Thompson
Looks pretty good.
- [31:13]
Tyler
I believe he did bring the butt pillow.
- [31:15]
Ben Thompson
It seems like he's not making progress on the food front. I would expect by day seven of this, he would have a smorgasbord in front of him.
- [31:23]
Tyler
I fasted the whole time. I just kind of. I just.
- [31:25]
Ben Thompson
Why didn't you figure it? We have talked about the food situation so many times. How did you not think ahead there?
- [31:30]
Tyler
I just wanted to make it more challenging.
- [31:31]
Ben Thompson
Okay.
- [31:32]
Tyler
Yeah. This is going to be too easy.
- [31:33]
Ben Thompson
Deep Seek is raising a monster. $7 billion round at 50 billion valuation, making it China's largest ever AI race. But what shocks a Jaws here Cryptopunk the most is the founder. He's personally contributing 40% of the round himself. Wow. 3 billion coming from the founder. Directly owns 90% of the company. Unheard of at this valuation. Deep Sea was founded inside of his hedge fund, one of China's most successful funds. What a beast. He's got to acquire as much compute to push out new deep SEQ models. You know we saw that chart that showed that Chinese open source models were sort of falling behind a little bit on a different growth curve in terms of performance. But you know, he's certainly betting on getting back in line having a Frontier model within, within a couple months. Zach Brock says congrats to Anthropic for defeating Grok in the market and feasting upon the compute of their fallen enemy.
- [32:28]
Travis
Yeah, basically every time we take, every time we take a day off the show like something big happens on Wednesday as the was the big reveal or SpaceX anthropic deal. A lot of people have been predicting that I, I was not simply because I thought there it was like the rational decision for the parties, but I thought that the tension between, you know, Elon, who had only a couple months ago been, you know, hurling insults at the Anthropic team. I didn't think they would be able to uncover that those cultural differences totally. But demand for compute finds a way.
- [33:02]
Ben Thompson
Yeah, I think that you and others had identified the possibility of becoming a Neo cloud. Selling the computer.
- [33:09]
Travis
Yeah, Last year I was talking about that a lot, all the time. I was like look, they're incredible at building infrastructure really, really fast, bringing power online. This feels like a very strong, a strong use for Elon Inc. Yes, and, but I, but as things evolved I just didn't see, I didn't see this coming together.
- [33:29]
Ben Thompson
I didn't see this coming together specifically because of the cursor deal. I thought the cursor deal was the long term solution for all that compute and then the computer sort of got sold twice maybe. But of course there are multiple clusters, multiple colossus data centers and plenty of work to be done as SpaceX continues to grow their ambitions.