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- [00:00]
Jordy
You're watching TBPN.
- [00:02]
John
Today is Tuesday, November 25, 2025. We are live from the TVPN Ultradome, the Temple of technology, the fortress of finance, the capital of capital. We had a fan. Yesterday was anthropic Claude 4.5 day. We had a lot of fun talking to Sholto about that. You should go check it out. We wrote a little write up. I collaborated with Brandon and Tyler to kind of give our thoughts on the state of the AI race with regard to OpenAI and anthropic and what makes Anthropic special. The things that stuck out to me, I mean, the thing that went viral was just the fact that apparently Dario goes around Slack and writes essays every single day. And everyone is like, give me the essays. Turn it into a book. Paging Stripe Press. We got to get Stripe Press to turn it into a book.
- [00:48]
Jordy
Yeah, I mean, well, that. But I was also thinking of a potentially a risk factor for them of being like the Dario files. A disgruntled employee that leaks everything and then leaks them all. I imagine because even when he's on Mike, he's known to say some things. He at times sort of people.
- [01:13]
John
I feel like people take him out of context, out of context a lot. He will say he's going to the final boss. If this doesn't go well, we could lose 50% of white collar work or entry level white collar work. And people will be like anthropic. Stated mission is to destroy jobs.
- [01:32]
Jordy
Take your father's job.
- [01:34]
John
Yeah, yeah, it's rough, but ramp time is money. Say both easy use corporate cards, bill payments, accounting, and a whole lot more all in one place. Timeline was in turmoil over the weekend and yesterday we covered a little bit about the Nucleus dust up on the timeline. Cremieux will be coming on the show at 11:45 and then Keon, the CEO of Nucleus, will be coming on the show at noon. So we will kind of have both sides. Then we have Joe Wiesenthal joining from Bloomberg and then we have. Who else do we have today? Kratios Kratzios is coming on to break down Project Genesis, which we're very excited about. Anyway, let's run through what other news stories were at the top of the timeline while we pulled those up. Let me tell you about Restream 1 livestream 30 plus destinations. If you want to multi stream, go to restream.com. oh yes. The biggest news in tech in AI is that the Ilya Sutskever Dwarkesh Patel podcast has dropped. Do we have Hit the timeline. Do we have the opening clip? Because the opening clip is. Is iconic. It's very funny. It's a bit of a hot mic moment for Ilya and I think we should pull it up and play it because it has a fascinating. Just insight into it. Feels very like, oh, this is the real Ilya. He's not even thinking that he's on camera and he gives his real feeling. So let's play this from the very start that all of this is real.
- [03:16]
Sebastian
Yeah.
- [03:17]
Jordy
Don't you think so? Meaning what? Like all this AI stuff and all this Bay Area. Yeah.
- [03:21]
John
That it's happened. Like, isn't it straight out of science fiction? Yeah.
- [03:27]
Jordy
Another thing that's crazy is, like, how normal the slow takeoff feels. The idea that we'd be investing 1%.
- [03:33]
John
Of GDP in AI hasn't even started.
- [03:37]
Jordy
You know, where right now it just feels like we get used to things pretty fast. Turns out. Yeah. But also it's kind of like.
- [03:43]
Cremieux
It's abstract.
- [03:43]
Jordy
Like, what does it mean? What? It means that you see it in the news that such and such company announced such and such dollar amount. Right.
- [03:52]
John
That's all you see.
- [03:53]
Keller
Right.
- [03:55]
Jordy
It's not really felt in any other way so far. Yeah.
- [03:58]
Keller
Should we actually begin here? I think this is an interesting discussion.
- [04:00]
Sebastian
Sure.
- [04:00]
John
It's one of the greatest podcast intros from the average person's point of view. So good. So good. Anyway, we're not going to watch the whole.
- [04:07]
Jordy
I think that's. That's going to be a new meta.
- [04:10]
John
Yes, yes. I mean, you can't. You can't fake that. It's amazing. Also, it's just funny because, you know, it's effectively getting caught on a hot mic. But I was joking. I was like, of all the things that you could say on the hot mic before you sit down. Oh, okay. We're actually recording. His is just completely reaffirming everything we know about Ilyas at Square. Like, it's just completely the same. Like, okay, he's a. He is a true believer. It's not like he was sitting down and being like, like, norcash, we gotta go on my private plane. I just sold so much secondary. It's crazy what's going on with this stuff. Like, if people really think this AI thing's gonna pan out, I'm making billions of dollars. I'm cashing out. I don't believe any of this stuff is real. No, he wasn't caught on a hot mic like that. His hot mic moment is like, wow, it's exactly like science Fiction.
- [04:59]
Jordy
Everything is all real.
- [05:00]
John
It's all real, yeah. Which is just iconic. Well, you can go and listen to that in the Dwarkesh Patel RSS feed and on the YouTube Ch. And on X, he put the full thing up. It's 95 minutes long. Tyler, did you have any other takeaways from your Speedrun? You're listening to it at 5x, right?
- [05:19]
Jordy
Well, on X you can only do up to 2x. I was on that. So I still have like 10 minutes left. But yeah, a bunch of good stuff in here.
- [05:26]
John
Does he pop the scaling bubble? Does he give a bearish take about. Is it over at any point? While you're thinking about that, let me tell you about Gemini 3 Pro, Google's most intelligent model yet. State of the art reasoning, next level vibe coding and deep multimodal understanding. Continue.
- [05:41]
Jordy
So I wouldn't say he's like anti scaling, but he does kind of give this interesting take, which he basically says that like now AI companies, like, there's too few ideas for the amount of companies and for the scale that we're at. Where he basically, like, you can think of AI progress as being in these kind of distinct ages, right? So he says 2012-2020 was like the age of research, where you're trying all these different ideas and the scale of things is very small. Right? Like, to train the original Alexnet was like two GPUs. To do the original Transformer was like eight, maybe 64, but like very small amount of GPUs. And then once we kind of figured out that transformers work, we entered this age of scaling and that's basically from 2020 to 2025. And now we're basically at this point where like, yes, you can keep scaling and models will get better, but even if you scale 100x, like, are we really going to get super intelligence? Like, it'll get better on the benchmarks and they'll become more useful. But it's not like this. He doesn't think that just raw scaling alone is basically what's going to bring us there. I mean, this has been echoed by a lot of people, right? This was, I think Karpathy said this, where we still need a couple different kind of paradigms for this to work. This is even kind of what Sholto said yesterday, which is like pre training. It's not dead, but it's like the reason that Opus 4.5 was better is not just because they scaled pre training, it's scaling generally. But even then the scaling has gone from pre training and now it's rl. And so basically we need to find another paradigm and the way you do that is just doing like research. And so he talks about SSI as basically being this like, return to research.
- [07:32]
John
Return to research.
- [07:33]
Jordy
Yeah. It's small kind of training runs. Even though, you know, they only raised 3 billion, which is like small compared to other.
- [07:39]
John
Sure.
- [07:40]
Jordy
To other research institutions. The fact that they're basically putting it all on these kind of. I mean, I don't know if they're moonshots, but they're these small training runs where they're doing experiments and then they're going to scale it up eventually. But they're not just basically trying to win the AI race by just scaling up and doing the same thing as everyone else.
- [08:00]
John
Yeah, yeah. They're trying to find a new. A way to actually bend the scaling curve, find a new scaling law, or find a new technology that like they can scale against. I was thinking about Ilya's talk at Neurips last year. He pulls up this chart of the relationship between the mammals mass and the brain volume and it's a pretty linear graph. And so like the elephant is a lot bigger than the mouse and so it has a proportionally larger brain to its body volume. And it's this perfect. It's this perfect linear curve. I should just try and figure it out if I can maybe text it in. I took a picture of it because it's a very cool chart. Here it is. Where do I send this? The timeline. Let me see.
- [08:51]
Jordy
Ship it. Share.
- [08:55]
John
Let me see. Timeline. Sorry. Boom. So basically the mammals have this very clear linear trend, but then the non human primates are a little bit higher up on the chart and they're just doing a little bit better. But then hominids, the actual humans have a different. There's a very distinctly different curve. And so there's this interesting. Like it was making me think, like maybe that's what we're supposed to see when we think about. Yeah, this, this. It's like when we say like straight lines on log graphs, when we say we are seeing scaling happen with the current architectures, which line are we scaling against? Are we actually scaling on the human curve or are we waiting for divergence from that current scaling law?
- [09:53]
Jordy
Yeah, he has this good quote where scaling has taken all the air out of the room, where basically we have more than enough compute to try these different ideas, but they're just all going straight into training the next big model using the next paradigm. And maybe it's slightly different. You have a Different way of doing RL or whatever, but it is still fundamentally the same thing. Right. And he talks about maybe continual learning is really the better approach. Right. We've been in this era of having a pre training thing for so long that we think of AI as like, you train this thing and then you release it and it's like done. And RL is like a little bit different now because there's this idea of post training and you can kind of integrate different things.
- [10:35]
John
I also thought the interesting thing was with pre training, you use the whole Internet so you don't have to decide anything. You're just applying this algorithm to just all the data, all the compute, and there's no decisions. But then with rl, you have to decide, okay, we're putting in these math equations and we're maybe not putting in something else because we're actually creating the data and we're not just.
- [10:54]
Jordy
This is maybe why we see these kind of like models that are super well.
- [10:59]
John
Yep.
- [11:00]
Jordy
They do super well in evals, but not so much.
- [11:02]
John
Yeah. Some of the overfitting and, and the.
- [11:03]
Jordy
Reason is because the data that we choose is not the correct data.
- [11:06]
John
Yeah.
- [11:07]
Jordy
Because researchers are basically being reward hacked maybe into like just solving for benchmarks.
- [11:13]
John
Yeah. It's interesting, it's interesting to hear this. Like, the conclusion is we need another breakthrough and then simultaneously consensus be like, but like, we're definitely going to get that breakthrough in like the next decade. It's like, it's hard, it's hard to predict.
- [11:34]
Jordy
I feel like it echoes a lot of even what Mike Noop has been saying. We need new ideas. Yeah, totally saying this for, for months.
- [11:41]
John
But it's way, it's way harder to predict the rate at which breakthroughs will arrive as opposed to like, you can actually chart out, okay, the formation of capital, the time it takes to build a data center, how long it takes to, you know, manufacture a bunch of GPUs, rack them, run the training around. Like that's much more predictable than like human came up with new algorithm like that sort of random.
- [12:01]
Jordy
Yeah. And he brings this up as the reason why you see companies doing this. Because it's just if you're raising money, it's so much easier to justify the raise by saying, we're going to buy this data center, do this training run. It's going to cost exactly as much.
- [12:13]
John
Oh yeah.
- [12:14]
Jordy
It's going to monetize this way.
- [12:15]
John
Yeah.
- [12:15]
Jordy
Then the model will be this good and then we can use it to monetize this way.
- [12:18]
John
Totally.
- [12:18]
Jordy
Where if you're just saying, like, oh, yeah, we're just going to pay a bunch of, like, really smart researchers to do a bunch of research and then they'll figure something out. You can't really. Yeah. In some ways, it feels like SSI is set up for, like, somewhat of a mini AI winter, or like, at least riding the hype cycle down. Because it doesn't sound like he's sitting there being like, we raised 3 billion and we're spending it in the next 12 months.
- [12:39]
John
It's like 2.9 was debt.
- [12:41]
Jordy
No, not, not, not.
- [12:43]
John
No, no, no, no. That's the point. It's not. It's like equity. It's just sitting there. It's like he can clearly pull back.
- [12:47]
Jordy
I'm going to give each researcher different teams, like a. Shots on goal.
- [12:52]
John
No, I love it.
- [12:53]
Jordy
We're going to keep taking those shots until, obviously he'd be able to raise like another $10 billion whenever he wants, especially if he has, like, a key breakthrough insight and they can be first to scale that.
- [13:04]
Keller
Yeah.
- [13:05]
John
Well, let me tell you about cognition. They make Devin, the AI software engineer, crush your backlog with your personal AI engineering team. Nvidia has posted.
- [13:17]
Jordy
They hit the timeline.
- [13:18]
John
Hit the timeline. Break this down for me, Jordy.
- [13:20]
Jordy
They said, we're delighted by Google's success. They've made great advances in AI and we continue to supply to Google. Nvidia is a generation ahead of the industry. It's the only platform that runs every AI model and does it everywhere computing is done. Nvidia offers greater performance, versatility, versatility, fungibility than a 6, which are designed for specific AI frameworks or functions.
- [13:48]
John
That is a crazy thing to post.
- [13:49]
Jordy
Crazy, crazy, crazy thing to post.
- [13:52]
John
Sometimes we get stuff.
- [13:53]
Jordy
I don't know, boys, but having the largest company in the world sending tweets to defend their main product is not very reassuring.
- [14:01]
John
Yeah, it's just an odd. I feel like this would be so much better delivered. I actually don't have that much of a problem with the actual text here. I just think this should be delivered by Jensen with some nuance in a conversational setting. It just hits a lot different when this is in at exactly 9:00am, like, clearly scheduled, clearly typed out in a document. You know, it's like. It feels like a press release, which is just an odd, odd thing when, when it should be, you know, this should be an answer to a question which someone, Bobby Cosmic in the chat was saying, like, oh, the mainstream media is just now picking up on the Gemini 3 story and there's articles in the Wall Street Journal and other places saying like, oh, maybe Google's back. Like, you know, by Google, like it's very exciting. And, and so Nvidia feels, feels the need to respond to that. But it's a lot different when it's actually a response instead of just like we're putting out a press release, like who knows why? As opposed to Jensen saying like, well, since you asked, talk show host or news anchor or whoever he's taught, podcast host, whoever he's talking to, Dwarkash, whoever he's talking to, maybe us, we'd love to have him. I can ask him that question. He can defend this here.
- [15:19]
Jordy
Yeah, well, the timing is seems important because they are coming under a huge amount of pressure right now. There was an article in Barron's this morning by Tae Kim. The headline is not what Nvidia's comms teams Would have Liked it to be. The headline is Nvidia says It's Not Enron in Private Memo Refuting Accounting Questions.
- [15:41]
John
That'S a crazy thing to say. Of course it's not Enron.
- [15:45]
Jordy
But let me get, let me get into the coverage. So Tay says a series of prominent stock sales and allegations of accounting irregularities have put Nvidia in the middle of a debate about the value of artificial intelligence and its related stocks. Now Nvidia is pushing back. In a private seven page memo sent by Nvidia's investor relations team to Wall street analysts over the weekend, the chip maker directly addressed a dozen claims made by skeptical investors. Nvidia's memo, which includes fonts in the company's trademark green color, begins by addressing a social media post from Michael Burry last week, which criticized the company for stock based comp dilution and stock buybacks. Barry's bet against subprime mortgages before the 2008 financial crisis was depicted in the movie the Big Short. Of course, Nvidia repurchased 91 billion shares since 2018, not 112 billion. Mr. Burry appears to have incorrectly included RSUs, RSU taxes. Employee equity grants should not be conflated with the performance of the repurchase program, Nvidia said in the memo. Employees benefiting from a rising share price does not indicate the original equity grants were excessive at the time of issuance. That makes sense. Behrens reviewed the memo, which initially appeared in social media posts over the weekend and confirmed its authenticity. Burry told Behrens he disagrees with Nvidia's response and stands by his analysis. He said he would discuss the topic of the company stock based comp in more details. Burry is of course now over on substack. He's charging $380 a year and if you are a perma bear I can't. This is like Christmas coming early. Nvidia didn't respond to Barron's for request for comment, but they also responded to claims that the current situation is analogous to historical accounting frauds Enron, WorldCom and Lucent that featured vendor financing and SPVs. Nvidia does not resemble historical accounting frauds because Nvidia's underlying business is economically sound. Our reporting is complete and transparent and we care about our reputation for integrity. Unlike Enron, Nvidia does not use special purpose entities to hide debt or inflate revenue.
- [17:50]
John
There's no market. It's like there's 25 examples of how this is not the same. I don't even know why they're Nvidia.
- [17:57]
Jordy
Also addressed allegation that its customers, large technology companies, aren't properly accounting for the economic value of Nvidia hardware. Some of the companies use we've talked about this use a six year depreciation schedule for GPUs, Burry said he believes the useful lives of the chips are shorter than six years, meaning Nvidia's customers are inflating profits by spreading out deep depreciation costs over a long period. Nvidia's customers depreciate GPUs over four to six years based on real world longevity and utilization patterns. Older GPUs such as A1 hundreds continue to run at high utilization and generate strong contribution margins, retaining meaningful economic value well beyond the two to three years claimed by some commentators. So again under under fire on the TPU front and from the Michael Burry camp. But again I think I think their their answers are totally valid. Matt over on X said had a post here. He said the TPUs equal bad for Nvidia take is up there with the dumbest, maybe worse than deep seek as it completely misses what actually happened in the last six weeks and I will remember who is who in the zoo. My view one demand for AI is bananas. No one can meet demand. Everyone is spending more. Google said just yesterday they have to double capacity every six months to keep up. Two scaling laws are intact. He's referencing Gemini 3. The flywheel is about to speed up. Somehow the mid curve crew thinks this is zero sum competition. None of this suggests that. If you think the race is hot now, wait until you see what comes out of the large coherent Blackwell clusters. All the magic from the quote God machines is pretty much still hopper based. Lastly a quick GPU TPU less than the cost and performance specs on the box aren't what you get in real life and Google is going to get a fat margin too. Double duh. What matters is system level, effective tokens to watt to dollars and TCO. Nvidia GPUs have higher FMU because they're already embedded in workflows. Slash the ecosystem is massive. By the way, this is a good test if you have an opinion on this topic, but you have to look up FMU then perhaps curate better mrcu.
- [20:11]
John
What mfu mfu I said fmu.
- [20:15]
Jordy
Sorry sorry sorry. The above effective token watt gap also likely widens with Ruben. Add in that Jensen can actually deliver volume in a tight market plus future flexibility multi cloud capable, programmable for paradigm shifts and he'll sell every GPU he makes for years. Google will too since everyone wants a second supplier and TPU is a fantastic chip. But this is as far from either or as it gets. The one benefit of this confusion is that it is likely to give Google a brief stint as the world heavyweight champion, the most valuable company I would guess the midwits put the strap on them in less than two weeks.
- [20:51]
John
So he put the strap on them. What does that mean? Just like pile in is he saying just like it seems like he's predicting that people will overplay the Nvidia Bear take and overplay the Google opportunity. Opportunity. And that will result in Google becoming the most valuable company in the world. And he uses the phrase put the strap on them in multiple in less than two weeks. Interesting post.
- [21:28]
Jordy
In other news, David Sacks has hit the timeline. He says according to today's Wall Street Journal, AI related investment accounts for half of GDP growth. A reversal would risk recession. We can't afford to go backwards. The article is how the US Economy became hooked on AI spending and we will be chatting with Kratzios in about an hour on this on this very topic so we can get into a little bit.
- [21:59]
John
Well before we move on, let me tell you about ADEO AI native CRM Adeo builds skills and grows your company to the next level.
- [22:07]
Jordy
You want to read through Fact sheet from the White House President Donald J. Trump unveils the Genesis Mission to accelerate AI for scientific discovery today. And this is yesterday. Today Trump signed an executive order launching the Genesis Mission, a new national effort to use artificial intelligence to transform how scientific research is conducted and accelerate the speed of scientific discovery. The Genesis Mission charges the Secretary of energy with leveraging our national laboratories to unite America's brightest minds, most powerful computers and vast scientific data into one cooperative system for research. The Order directs the Department of Energy to create a closed loop AI experimentation platform that integrates our nation's world class supercomputers and unique data sets to generate scientific foundation models and power robotic laboratories. The Order instructs the Assistant to the President for Science and Technology to coordinate the national initiative and integrate an integration of data and infrastructure from across the federal government. The Secretary of Energy, APST and the Special Advisor for AI and Crypto will collaborate with academia and private sector innovators to support and enhance the Genesis mission. Priority areas of focus include the greatest scientific challenges of our time that can dramatically improve our nation's national economic and health security, including biotechnology, critical minerals, nuclear fission and fusion energy, space exploration, quantum information science and semiconductors, and microelectronics. Next, harnessing AI for our national security and economic development. With the Genesis mission, the Trump administration intends to dramatically expand the productivity and impact of federal research and development within a decade. So there's one more note here on strengthening America's AI dominance. Trump continues to prioritize America's global dominance in AI to usher in a new golden age of human flourishing, economic competitiveness and national security. And so we will get into more of this with gratios.
- [24:10]
John
Yeah, I'm very interested to hear how the public private partnership actually works here. There was a time when basically every cool technology was coming out of darpa, coming out of the US Government. The US Government landed on the moon. And since then, I think a lot of people in technology have lost faith in the US Government overseeing the development of technology, even academia. I mean people think AGI will emerge from a private C Corp. That's where people believe that the best work will be done with, you know, give Ilya Sutzkever, give the best scientist $3 billion, let him go cook. Like that's the thesis currently in tech. This feels like somewhat of a rejection of that in some ways. There's obviously lots of different places where having AI resources, having science and technology resources within the government make a ton of sense. But it'll be interesting to see like where are the interfacing points between the two, between the two categories, the public and private sector? Because by default, I think most people in our audience in technology would say, hey, let's leave the space travel and the AI research to the private sector. And this is potentially a different direction, potentially just very synergistic. So be interesting to See where it breaks. Well, should we run through The Astral Codex 10 piece on trait based embryo selection to tee up our discussion with Cremieux and Kian from Nucleus? Let's do it and go through that. So this is from Scott Alexander in Astral Codex 10. He says suddenly, trait based embryo selection when a couple uses so in 2021, genomic prediction announced the first polygenically selected baby. When a couple uses IVF, they may get as many as 10 embryos. If they want one child, which one do they implant? In the early days, doctors would just eyeball them and choose whichever looked the healthiest. Later, they started testing for some of the most severe and easiest to detect genetic orders, like disorders like down syndrome and cystic fibrosis. The final step was polygenic selection, genotyping each embryo and implanting the one with the best genes overall. Best in what sense? Genomic Prediction claimed that the ability to forecast health outcomes from diabetes to schizophrenia. For example, although the average person has a 30% chance of getting type 2 diabetes, if you genetically test five embryos and select the one with the lowest predicted risk, they'll only have a 20% chance. So you get a 10% bump there. That's nice. Since you're taking the healthiest of many embryos, you should expect a child conceived via this method to be significantly healthier than one born naturally. Polygenic selection straddles the line between disease prevention and human enhancement. In 2023, Orcid Health, founded by Noor, who we've had on the show, enter the field. Unlike Genomic Prediction, which tested only the most important genetic variants, Orcid offers whole genome sequencing, which can detect the de novo mutations involved in autism, developmental disorders and certain other genetic diseases. Critics accused GP and Orchid of offering designer babies, but this is only true in the weakest sense. Customers couldn't design a baby for anything other than slightly lower risk of genetic disease. You're basically just selecting out of what you already got. They're not editing the genes, they're merely sequencing them and then allowing you to select. These companies refused to offer selection on traits, the industry term for the really controversial stuff like height, IQ, or eye color. Still, these were trivial extensions of their technology, and everyone knew it was just a matter of time before someone took the plunge. Last month, a startup called Nucleus took the plunge. They had previously offered 23andMe style genetic tests for adults. Now they announced a partnership with Genomic Prediction, focusing on embryos. Although GP would continue to only test for health outcomes, you could forward the raw Data from GP to Nucleus and Nucleus would predict extra traits, including height, bmi, eye color, hair color, adhd, iq, and even handedness.
- [28:29]
Jordy
And it's worth noting that Nucleus is now being sued by Genomic Prediction, even.
- [28:34]
John
Though they have this partnership.
- [28:36]
Jordy
I'm assuming the partnership is no longer. Well, we can ask.
- [28:40]
John
Yeah.
- [28:40]
Jordy
But I'm assuming it's no longer because one of GP's co founders left. Left the company to join Nucleus.
- [28:50]
John
Interesting.
- [28:51]
Jordy
And allegedly turned off all the security cameras.
- [28:56]
John
Is that metaphor, or is that actually.
- [28:59]
Jordy
The lawsuit alleges that he turned off all the security cameras on his laptop.
- [29:03]
John
That's not a metaphor for, like, you know, sharing a Google Drive of PDFs. You literally mean it's his last day.
- [29:10]
Jordy
At work and he was allegedly, like, ramping up.
- [29:15]
John
Okay, so he turns off the cameras. Allegedly. And the implication is that maybe he was rummaging around, like, literally taking documents or something like that. That's at least what the timeline is.
- [29:25]
Jordy
What the lawsuit alleged.
- [29:26]
John
Okay. Wow, that's wild. I did not know that that was a literal accusation.
- [29:32]
Jordy
And then another part of it, apparently, Nucleus, it's new. People at Nucleus were emailing the former co founder at his old email address, evidence of them violating the agreement that they had. So, anyways, it's very, very, very, very messy. We can ask.
- [29:57]
John
Yeah, there's like, four or five companies.
- [29:59]
Jordy
Involved in this, and all of them are controversial. Because this is the most, I think, the most controversial, probably, like, category that you can be in.
- [30:08]
John
Yeah, it's certainly up there.
- [30:11]
Jordy
Health is already, like, one of the most controversial topics.
- [30:15]
John
Yeah, everyone has an opinion on it.
- [30:16]
Jordy
Health influencer that you've gotten into. Totally various debacles.
- [30:20]
John
Yeah. And also, there's just like the. There's just. It's so easy to throw. I mean, in the same way that people are throwing Enron at Nvidia. Like, it's so easy to throw Theranos at any biotech company that's not, you know, that's accused of anything. And also biotech, it's like, it's pretty hard to understand the underlying science. It's not as popular as. Okay, like, does the website work? Does the business make money? What's the cash flow like? It's way more complicated, and so it does attract even more attention. So one of the other companies in the space is Herasite and Astral Codex 10 continues here. They enter the space with the most impressive disease risk scores yet, an IQ predictor worth six to nine extra points, and a series of challenges to competitors whom they call out for insufficient scientific rigor. Their most scathing attack is on Nucleus itself, accusing its predictions of being misleading and unreliable. Let's start with the science and then move on to the companies to see if we can litigate their dispute. In theory, all of this should work. Polygenic embryo screening is a natural extension of two well validated technologies, genetic testing of embryos and polygenic prediction of traits in adults. So genetic screening of embryos has been done for decades, usually to detect chromosomal abnormalities like down syndrome or simple gene editing disorders like sister fibrosis. It's challenging. We've talked about this before. You need to take a very small number of cells, often only five to 10, from a tiny protoplacenta that may not have many cells to spare, and extract a readable amount of genetic material from this limited sample. But there are known solutions that mostly work. And so the companies that we're talking about today aren't necessarily doing like the fundamental lab equipment development, building the machine, figuring out how to sequence data from the first. It's more about the analysis that happens on top of the results.
- [32:22]
Jordy
And the recommendations. And the recommendations, which is probably, which I would say is the most controversial part of this.
- [32:31]
John
I don't know that any of them are recommending, hey, we think you should take, we think you should pick this baby. They're more just saying, like, we think that according to the data, this baby might.
- [32:40]
Jordy
But if you're giving somebody risk fact, if you're giving, if you're.
- [32:43]
John
Yeah, but that's not a recommendation. Like if I tell you this car is 700 horsepower and does 0 to 60 in two seconds, and this one does 800 horsepower and does 0 to 60 in 2.4 seconds. This one's faster in a straight line, this one's faster on the curves. And then like you pick like, I didn't make a recommendation, I just told you the stats. Right.
- [33:00]
Jordy
Yeah, but from when you look at these companies, from a, from what they're marketing to consumers of why you should care about the service.
- [33:10]
John
Sure.
- [33:11]
Jordy
And then the way that they deliver the information, if they're advertising, we can effectively advertising, we can help you have a smarter, healthier baby. And then they're saying like, hey, we think this direction is going to get you a higher iq.
- [33:27]
John
I don't think it's a recommendation, it's.
- [33:28]
Jordy
Not an explicit recommendation, but I think people are trusting the service to try to get them what was marketed to them.
- [33:36]
John
Yeah, people want the data and they want the data to be accurate because they're going to make a decision based on that. But I mean, here Scott Alexander actually gets into some of the, some of the complexity of the actual trade offs because there are. So most traits are polygenic, requiring information about thousands or tens of thousands of genes to predict. These are too complicated to understand fully at current levels of technology. But some studies have chipped away at the problem and gotten to a partial understanding. Often this looks like being able to predict a few percent of the variance in the trait to determine whether someone's genetic risk is slightly higher or lower than average. And so some people might genuinely want to select on a single condition. For example, people with a strong family history of schizophrenia might want to minimize their chance of their children getting the disease. For these people, reducing schizophrenia risk by 58% while keeping everything else constant sounds pretty good. Everyone else probably wants a genetically healthy, generically healthy embryo with low risk of all conditions. Exactly how this works depends on the customer's own value. Would they prefer an embryo with lower cancer risk to one that will have fewer heart attacks? Like that's a trade off that you have to pick. And the exact benefits will depend on how parents make that decision. Genomic prediction and Herasite try to help by providing semi objective measures of which embryo is overall healthiest according to different conditions, effects on longevity and patient rated quality of life. For genomic prediction, that's the embryo health score. This is, you know, that's close to a recommendation. I think you're getting close.
- [35:17]
Jordy
Yeah. And Nucleus's subway campaign is have a healthier baby.
- [35:23]
John
Yeah, yeah. The marketing claims are a big, big piece of this. I think the scientific claims are potentially just as important. But it's both, they're both understanding where the science actually is, both broadly and then also within the companies and then how it's marketed. Like all of that is important to get like a complete picture of what's going on here. So for her site, it's a polygenic longevity index. They don't give exact risk reduction numbers for each disease, saying that it depends too much on a couple's specific family history. But say that most people gain one to four years of healthy life. When I test it on a set of 20 embryos, the healthiest gets an extra 1.66 years. And so how much would you pay to give your children an extra one to four years of healthy life? This is no longer a hypothetical question. Here are the costs. Genomic Prediction is around $3,250, Orchid is around $12,500. Nucleus is around $9,249 and Herasite $53,250. That is expensive compared to the rest, five times the price. Is it worth it? Well, if you're already doing ivf, the claimed risk reductions are accurate. You value your kid's health as much as your own. You have low time discount rate, you're well off enough that these aren't extraordinary sums of money to you. You're okay using expected utility calculations where 50% chance of preventing X is half as good as fully preventing X. Then I'll go out on a limb and say, yeah, it's obviously it's worth it. Consider genomic prediction, which costs $3,500 for five embryos and claims to lower absolute risk of type 2 diabetes by 12%. That implies that not getting type 2 diabetes is worth $27,000. Ask anyone dealing with regular insulin injections, let alone limb amputations, whether it would be worth $27,000 to wave a magic wand and not have type 2 diabetes. It's not a hard question, and that's just one of a dozen conditions you can lower the risk for. Other ones, like not getting breast cancer, might be so valuable that it's hard to even attach numbers. So what about IQ6? Extra IQ points, which is Herasytes estimate with 5 embryos is about a quarter of the gap between the average person and the average Ivy League student. The benefits of intelligence are hard to quantify, but it's been shown to have probably causal positive effects on income, mortality and achievement. Probably the income effects alone make up for the cost of the intervention, again assuming total parent child altruism and a low discount rate. So if we accept all of these claims and assumptions, the choice seems obvious. It probably even accounts it's probably even obvious for governments to pay for all citizens to get these, given how much they'd save on health care costs, says Scott Alexander. But in practice, it's complicated. Critics have raised both scientific and ethical objections to polygenic embryo screening. Most significantly, it's been condemned by various bodies, including the Society for Psychiatric Genetics, the European Society of Human Genetics, and the Behavioral Genetic Society. Their statements are not good. They tend towards vague language about how people are more than just their genes, or how no genetic test can be perfect, or how embryo screening is not exactly the same thing as some other form of screening, which has a longer history and more proponents Although quote although in general, higher scores mean you are more likely to have a condition. Many healthy people will have higher scores. Others might develop the condition even with a low score says the Society for Psychiatric Genetics, as if they have just blown the lid off of some dastardly conspiracy. Screening embryos for psychiatric conditions may increase stigma surrounding those diseases, they continue. An objection which, taken seriously, could be used to ban every form of medical treatment because if you take care of something, you remove them from the population. That might increase the stigma, but we should still treat these. So, he says, we will mostly ignore these people and try to imagine the implications of the objections that mildly competent critics might raise, some of which will coincidentally overlap with the content of the non hypothetical statement. So the big question he wants to answer is scientific objection. The scientific objection around efficacy does this Are we sure where this works at all? Are we sure this works So a typical polygenic score is created by collecting thousands or millions of adult genomes, then matching genetic information with surveys about who has the traitcondition of interest. Reputable studies then test these scores on holdout samples, adults who were not used to make the score to see if they still accurately predict who has the trait condition. Polygenic embryo selection depends on an assumption that the scores which work in these kinds of retrospective tests will also work prospectively on embryos. This assumption hasn't been formally proven in studies which would require years or decades to conduct, but seems commonsensical. The strongest challenge to the application of polygenic scores for embryo selection comes from a recent body of research showing that most scores combine causal genetic effects with population stratification and therefore can be expected to lose much of their predictive power when comparing two members of the same family. There is an increasing agreement in the field that unless scores are validated within families, headline results like Decreases risk of X by Y percent will be large overestimates. When I talked to company representatives, they all said that they took accuracy extremely seriously and had various white papers and journal articles where anyone could double click could double check on their methodology. But I attended an industry conference a few months ago and the gossip level was comparable to a high school cafeteria.
- [41:16]
Jordy
Minus the sex rumors. Most of the attendees were having their kids via ivf.
- [41:22]
John
Everyone had some story about someone being careless or fudging their numbers. Some of the conflicts broke out into the open on Wednesday when Harasight left stealth and published a white paper and associated blog post. They criticized genomic prediction for reporting between family rather than within family results, and orcid for smuggling a term for age into their Alzheimer's predictor. Unsurprisingly, this makes it work better. We'll get to their accusations against Nucleus below. Note that this was recent enough that competitors haven't had time to air their own criticisms of her site. If this happens, I'll try and keep you updated.
- [42:06]
Jordy
And to be clear, this article is from around five months ago.
- [42:10]
John
Yes.
- [42:11]
Jordy
And since that time Nucleus has been accused of plagiarizing the paper from discussed.
- [42:20]
John
From Herasite and then also accused of stealing IP from genomic prediction.
- [42:25]
Jordy
So there's again a bunch of different accusations.
- [42:28]
John
We'll let Kian so yeah, I mean the goal here is to just give an opportunity for Cremieux and Kiyan to answer some questions, try and contextualize it, try and make their case to a broader audience. I've read through as much as I can, but without actually getting in the lab and rolling up my sleeves, I don't think I could come to a firm conclusion here. But I can certainly talk to them on this show and hopefully get some more information that the community can do with what they will so Scott Alexander concludes this section talking about his strongest opinion of the scientific criticism. He says authorities on all sides have cited Alex Young as an authority on how polygenic scores can be confounding or misleading. Last week Alex Young revealed that he had been working with Herasite while it was in stealth mode and endorses their research 3 lol probably that means Herasite's products are okay. That serves as proof of concept that this technology can work and means other companies claims are at least plausible. So lots of back back and forth and we will be joined by with by Cremieu in just a few minutes. I actually need to message him and make sure that he has the information. Is there anything else that you think would be worthwhile to discuss before we hop on?
- [44:01]
Jordy
Let's yeah, and I can, I can just go through. I mean the original accusations came from an account called Sichwan Mala.
- [44:09]
John
Sichwan Mala, yes.
- [44:11]
Jordy
Who wrote an extremely lengthy blog post on a bunch of the issues that they felt they had found with Nucleus. Nucleus ended up firing back and saying that Sichuan Mala was or sort of implying that Sichuan Mala was funded by a competitor or competitive service as well as making those allegations with Cremieux. Yes, they go into issues around potentially fictitious customer reviews which we'll ask Keon about. AI generated blog posts, accusations of intellectual property theft, saying that the Nucleus origin white paper is plagiarized, saying it has a bunch of errors. Nucleus has responded already to a lot of this stuff.
- [45:04]
John
Well, our first guest of the show is here. Let me tell you about LINEAR Meet the System for Modern Software Development Purpose Built tool For planning and building products, we will bring in Cremieux from the Restream waiting room into the TVP and ultradome and have him set the table for us. Cremieu, how are you doing? Welcome to the stream.
- [45:23]
Cremieux
How are we doing? Glad to be here, guys.
- [45:25]
John
Thanks so much.
- [45:26]
Jordy
Good as always.
- [45:27]
John
Looking good.
- [45:29]
Cremieux
Do you want, by the way, I can go face docs if you want.
- [45:31]
John
Let's do it. Let's do it. We can show his actual video this time, which is great. We've had him. Welcome to the show.
- [45:38]
Jordy
Hey. Hey.
- [45:38]
John
Good to see you.
- [45:39]
Joe Wiesenthal
How you doing?
- [45:41]
John
What actually kicked this off for you? Do you know Sichuan Mala separately, independently. Did you know that this was coming? Set the table for us. Why did Nucleus come to the top of your mind?
- [45:54]
Cremieux
So can I actually go back to.
- [45:58]
John
Hereticon please, with this?
- [45:59]
Keon
Yeah.
- [46:00]
John
All right.
- [46:01]
Cremieux
So for about a year we've told Nucleus about issues with their products. Can I just actually give a big, like I can monologue on this for a minute. I can tell you a lot of the details. If you want to go into it.
- [46:13]
John
Go right in. Okay.
- [46:15]
Cremieux
So one of the early things that really peeved a lot of us who are aware of how this tech works is that Nucleus claimed to provide parents with information about rare variants based on microarray files. Their website's wording is incredibly ambiguous. So the excuse when I raised this to keying in person was that they were referring to imputing a child's embryo or a child or an embryo's microarray based data with parental whole genome data. But this is not sufficient for rare variants like they claim it is, and it only works out in very well in narrow, well behaved cases. It's not a clean substitute for sequencing an embryo or child. The rare variant information they can offer is limited and their claim is highly misleading because it sounds like they can achieve coverage of de novo rare variants and ultra rare variants reliably for children and embryos, but they cannot do this because of like crossover that happens during recombination inside the haplotype blocks you're using to do the imputations. And because of mutations, they can't, they can't even get high confidence coverage of rare variants more generally, which is what their big claim is about in specific wording with the imputation based methods they claim to be using. So everything they say has a huge error bar on it and they shouldn't be advertising it. Basically it's something incredibly misleading.
- [47:28]
John
And so, so, so just to like actually zoom out, like, what do you think they are capable of doing.
- [47:36]
Cremieux
I think they are capable of microarray sequencing. I think they're capable.
- [47:43]
John
I mean, I mean, I mean in terms that you could advertise to a parent, like, like if Keon went to a prospective parent, the parent says, I'm doing ivf. What can you do for this category?
- [47:54]
Jordy
Even ready for large scale out of home advertising, do you think?
- [47:59]
Cremieux
It absolutely is. The issue is that Nucleus should not be doing it because Nucleus has produced scores that are invalid. They're incredibly invalid. Like for example, they used an ADHD score that included 12 single nucleotide polymorphisms. They claimed it explained 4% of the variants in ADHD, which means it's a pretty good predictor and you can use it to get some improvements in the margins. But 12 SNPs means that there's just no way they could explain less than 1% of the variants. And the best current ADHD polygenic score uses more than a million SNPs and explains about 1% of the variance. So they just basically lied. They made up these numbers and herasite had to go through and show that, oh, actually a bunch of their numbers are made up.
- [48:46]
John
I mean, how do you know for sure that they're, I mean, like that claim, you know, the state of the art was a million for 1%. Now it's 12. Nucleus is claiming 12 for 4%. That seems like a huge exponential, you know, growth in efficacy of that particular test. But just an exponential. Progress is not necessarily evidence of.
- [49:12]
Cremieux
This isn't progress. They've, they've never been able to show that they can use 12 snips and no one can. It's impossible. They don't explain this much variance. It's, it's literally physically impossible. There's no, it's not possible in any way. They should never have claimed it. They should never provided score reports to people based on it. And they did. They provided customers with score reports that have to be fake. Not fake per se, but they have to be incorrect. They have to be wrong. There's no way they could stand up to scrutiny. What I'm saying is that after they made this 12 SNPs to 4% variance claim, people have looked and they've shown the latest ADHD polygenic score, which is more recent than what they've claimed to have on offer, uses more than a million SNPs and explains about 1% of the variance. It's just, that's the state of the art. They are claiming to have better than the state of the Art with completely implausible parameters. It is impossible.
- [50:03]
John
Okay, so back to the original question, like what do you think they actually could offer? Even if they say, hey, you know what, we're not necessarily state of the art. We're partnering with a lot of different labs, we're standing on the shoulders of giants, we're using the tools that are available. What is a reasonable claim? That if they made it, you would be like, yeah, that sounds reasonable.
- [50:27]
Cremieux
A reasonable claim from Nucleus is that they are pulling polygenic scores from the polygenic score catalog, a publicly available resource that lists a bunch of different polygenic scores from different genome wide association studies. That would be reasonable, but that is not. Why would you go with them then? They have nothing unique to offer. What they have offered that seems to be unique are claims that don't hold up to scrutiny or which are clearly plagiarized from one of their competitors.
- [50:51]
John
Yeah, well, I mean there are plenty of services that are like, you know, in, you know, effectively wrappers around Quest Labs and you know, I get a better UI and it tells me that my cholesterol is in the range. And yeah, I know it's just looking up the range from the data data, but it has a nice UI and a reasonable billing system or whatever and people pay for that and they get, you know, they make decisions about their diet based on that. And I don't think that there's anything necessarily wrong about providing something that's a commodity or not a scientific breakthrough. As long as you're up to. As long as you're honest about what you're doing and you're not inflating the results.
- [51:29]
Cremieux
Yeah, the problem is that they're inflating the results. The problem is that they are effectively making up the results. They have actually they've, in their latest report, they have claimed to basically match herasite, not claimed it directly. They've copied their very unique citations which no one else has made. They've copied their method and copying their method is incredibly weird. You mentioned there that Scott Alexander noted that Alex Young is seen as a big authority in this space. And it's true. Alex is seen as like the go to guy. If you want to learn about family based sampling trio imputation. If you want to learn about within family validations or imputations or quality control, you ask Alex. That is the thing to do. And they apparently copied Alex Young's quality control pipeline and it's very unique. So doing this is unusual. It's unheard of. It's not likely to have actually Been done. It is like saying that you woke up one day and here's my morning routine. I woke up and today I was John Coogan, and I brushed my teeth exactly three times each time around. And I. I went and prayed to my household God. I did, like, all sorts of things. And it's just. It's incredibly specific in a way that is very unlikely to be real. They've very likely just kind of mimicked exactly what they said. And they said they did it on additional data, but the results came up very close.
- [52:46]
John
Yeah.
- [52:46]
Royce Branning
Yeah.
- [52:47]
Cremieux
Which is not likely. We have strong theoretical genetic reasons to expect that if they had this additional data that Herricite did not, the results would have actually looked different. So they have all these signals that they didn't do the analyses they said they did, and lots of indications that they plagiarism plagiarized. And when Sichuan Mala called them out, they responded. The response they generated was amateurish. It was kind of embarrassing because they admitted simultaneously to denying they did the plagiarism. They admitted to doing the plagiarism. They copied. They admitted they copied things directly from her site. They admitted they use resources that are unusual to use, and they effectively got the data from them. And they did nothing that was really unique. But they did ape everything that competitive.
- [53:34]
John
So copying might be looked down upon. In tech, people copy stuff all the time. Stories was copied into Instagram from Snapchat. Different machine learning architectures are being copied constantly. Some stuff can be patented, some stuff can be trade secrets. Are we looking at anything that goes beyond just like, yeah, it's kind of bad form to copy, or is this something that's actually like, a problem beyond that?
- [54:04]
Jordy
Yeah. Would you be less angry if they copied it perfectly instead of, like, sort of copied it directionally?
- [54:12]
Cremieux
They copied a lot of it perfectly. And this leads to weird results because they should not have done that given the cohorts they used. They used separate data for their validations, so the results should have been different. They copied details that made it apparent that they were not using the data they claimed to, or they were just fudging the results. It has to be one or the other. There's no way they could have gotten the results they did with the data they did and the copying they did. The copying tells us that they lied about something somewhere along the way. There is something fishy here, and we don't know what the exact error is. We just know they have to have made an error because there's no way that the additional data they had access to was identical to all the data their competitors used would have delivered different results.
- [54:52]
John
Yeah.
- [54:54]
Jordy
So I wanted to ask. They released open weight models, the origin models. Well, part of their pushback against Sichuan Mala's critique is that anybody can just download the models and play around with them. Have you downloaded them?
- [55:13]
Cremieux
So you have to ask for access and they do not give out access. We've had multiple people go in and try and ask for access and they've not received it at all. And one person who asked for more information was told stop contacting us. So no, they are not open at all. They're open in the sense that OpenAI is open. They're not very open.
- [55:31]
John
Okay, got it. Shifting gears to the marketing claims, what stuck out to you there is particularly in need of addressing.
- [55:42]
Cremieux
They very much need to address the fact that they seem to have fake reviews. So when they started Nucleus Embryo, they launched it in June, they weren't offering any sort of embryo screening services beforehand. And if they were, then it would have been how they have to specify what lab they use for all this stuff. There's a lot of details that should go into this that they can't actually specify because they didn't do that. So they claim to have had customers that have already been served by this. Well, as everybody knows, it takes about nine months to serve a customer in this. At minimum.
- [56:15]
John
Yeah.
- [56:15]
Cremieux
And it is nine women make a.
- [56:18]
John
Baby in one month.
- [56:19]
Cremieux
You know, it takes a lot. So I'd love to see these three month old babies that came out perfectly and were, you know, made their customers so happy. But I don't think they exist. I think they're not real. So why do they have these reviews? I don't know. And the reviews are also. They have a lot of fake elements. There are some that are clearly fake. So they use stock images in these.
- [56:40]
Jordy
Reviews to show which to be clear, you can imagine a scenario where they use stock imagery and fake names and they put an asterisk and say due to HIPAA compliance reasons, we're not just publicly displaying, you know, the names of any of our clients.
- [56:57]
Cremieux
But there's, there's no issue revealing this stuff. And other companies do actually reveal their real customers. So Orchid has revealed real customers. I've been introduced. I've met her side customers.
- [57:06]
John
Oh yeah. Didn't Jason Carmen do a whole video with Noor in the first, in the, the first Orchid baby and has been like basically making a documentary about that person's journey. Like, there's no like.
- [57:18]
Jordy
Yeah.
- [57:19]
John
And I feel like I see in Drug commercials all the time. It'll be like, this is a real customer who loves this hair loss meds. And they're like, yeah, it looks great, yeah, but. And like, there's regulations are much harder to get.
- [57:29]
Jordy
It's probably much harder to get somebody to opt into that than just opt in to generally providing.
- [57:34]
Keller
Sure.
- [57:35]
Jordy
But clearly it's possible, I guess.
- [57:38]
John
Is that legit, you think?
- [57:40]
Cremieux
No, they still could not have had the babies in time. It doesn't fit with the time. The chronology doesn't work here. These customer reviews are not really physically possible and I'd like to see an explanation from them because it doesn't make any real sense to me. They could be, I don't know, making some sort of representative review that they've maybe hedged in some fine print on some page somewhere, but I haven't seen it. And their entire site has been archived now. So if that page exists, they'll have to show it to us on the archive.
- [58:06]
John
One thing Jordi and I were debating was this big question of, like, is Nucleus making a recommendation or not? I don't know if this is relevant, but I would love your take on this. This idea of like, you know, I see an ad that just says, like, height is 80% DNA based or genetically inheritable, and then you go into the dashboard and it just says, here's the predicted height and here's the predicted iq, and then you make the decision. And it's not necessarily that they're recommending one or the other, it's more of a diagnostic and you can do that information what you want. Does that absolve them of some sort of responsibility there?
- [58:45]
Cremieux
No, it doesn't. So if you still provide wildly inaccurate scores, then it doesn't matter what you're recommending. You are effectively just recommending something that doesn't matter. I mean, you are giving them incorrect recommendations. You have to give some range of uncertainty within the best of your ability. You have to give them something that is to the greatest extent knowable, reliable, and they can't have done that. They've provided scores that they know, they must know are incorrect. You can't explain 4% of the variants with 12 SNPs. It's not really feasible. It's. There's no possibility of it, really. There's also no possibility of getting high confidence coverage on rare variants to make from the imputation methods they described. So they can't make parents certain about this stuff. Like, they're saying lots of things that are. That would require them to basically advance the Science 20 years. Yeah, they would have to be leaders in innovations here and I just kind of doubt it. The people who are actually leading on the innovations here are herasite. Orchid is doing so as well. They're doing a lot of Orchid's whole genome sequencing of embryos is the only one in the industry available to do this. And Herasite's innovation is that they made this stuff low cost for what they have admitted is a reduction in quality. If you get PGTA based imputation now. But another thing I do want to mention though is that Nucleus might. And we're still. Look, I'm still looking into this. I'm collecting some patient reports. I found one for my friend Dylan. She got a report from Nucleus and she got one from Invitane. It was a whole genome sequencing thing done. And Nucleus and I did see the report. Nucleus said she had a Mendelian disorder, you know, monogenic disorder caused by one gene. And Invitae said she didn't have.
- [60:22]
Sebastian
Have it.
- [60:23]
Cremieux
Okay, this is weird. So what's the inconsistency? We don't really know. Nucleus recently changed this result. Now, per the law, you have to notify your customers if you change their sequencing results. This is a CLIA regulation. The CMS regulates this. And there are. That is a potentially major issue that they might be out of compliance with. And I understand that startups are often out of compliance and a lot of them fake it till they make it in terms of following the letter of the law. But I'm of the opinion they really shouldn't. Especially because this is serious tech with major implications for people, their families, and I mean all future generations of their families. This is, as I think Jordy called it, bloodline optimization. And we have these rules in place for a reason. You need to show you're abiding by them.
- [61:07]
Jordy
But they. Yeah.
- [61:07]
Joe Wiesenthal
How much.
- [61:08]
Jordy
How much do the other players in. In the category or how much are they worried about Nucleus? Just kind of setting back the entire category.
- [61:19]
Cremieux
So I have gotten. It's on video and because Keon tweeted about being in it, I'm allowed to say that we were at a private conference and I did lead a panel on this topic where Kian was one of the panelists and the heads of some other embryo selection companies were also on the panel as well. And I will say that everyone was worried. Everyone was worried about one of the major missteps that actually has already been addressed by another one of the companies and the series of major missteps made by Nucleus that they have failed to address. I warned Keon about this stuff many months ago. I've warned him about problems for more than a year now, and he has simply not addressed them. They have. They're still there on the website. You can go find them. I've archived these pages a few times to see are they getting to them? Are they getting to them? The answer is no. They are still making claims that are either not possible, not possible, the current tech might be possible in 20 years, or just don't seem consistent with the evidence that they provided to their customers.
- [62:16]
John
Okay, last question and then we're going to hop on with Keon. I'm a big believer in redemption arcs. You're obviously unhappy with Nucleus's behavior in the industry. What does redemption look like? What would Kian have to do or show you to get back in the good graces of the industry, in your good graces?
- [62:39]
Cremieux
So the whole industry knows that Kian has been a problem for a while, and we actually, a lot of people have tried to give him a redemption arc already ready. They have tried to come to him. They have given him clear advice on what he needs to do. They have told him, you need to stop making XYZ different claims. They have told him, you need to offer scores that are vetted. You need to be open about your vetting, you need to be open about your sources, you need to qualify everything like the other companies do. But you haven't. He has been told this for a long time. I sent you some pictures earlier today. You can see the panel we're on where clearly, like, this has been a thing that's come up a lot and we wanted to give them the ARC already, but it came to this. It came to a person going online, a blogger, deciding, hey, I'm going to look into this. After reading the various blog posts and saying, well, shoot. So to make up for it, I think they would need to be incredibly open and they need to apologize and they need to admit to what they did wrong. And they need to say that they were out of compliance with Clio rules and regulations. And they need to say, hey, we might have misstepped here or there, we didn't know we were doing this, or whatever. Like, whatever it takes to be accurate. Document everything, tell us everything you've done, tell us all the missteps, don't exaggerate, do not lie. Just be upfront with everyone and submit yourself to regulation. Not in the sense that you have to go and tell the regulator you want to implement whatever new rules and regs, but submit yourself to openness. Be really open. Stop this whole thing about not telling us your methods, which they've done. And Sichuan Mala has documented that in the latest blog post. And give us your data. Give your data out. Stop saying it's going to be available upon request. It doesn't matter if your competitors have it. Offer them. Offer better pricing or something. Compete on some other margin because we shouldn't have to compete on trusting you. I say we. I'm not talking. I don't have a company in this space, but everyone should be trusted. All the companies in the space need to shape up a little bit and they need to be a little more open. And Keyan needs to do that the most.
- [64:34]
John
Thank you for coming on the show and breaking it down for us. We appreciate you taking the time and walking through all of that. Have a great rest of your day. Who knows, you might be on the show very soon as this debate continues. So we really appreciate you taking the time.
- [64:48]
Jordy
Thank you.
- [64:49]
John
Talk soon.
- [64:49]
Cremieux
Have a good one, guys.
- [64:49]
Royce Branning
Bye.
- [64:50]
John
Before we bring in Kian, let me tell you about fall build and deploy AI video and image models trusted by millions to power generative media at scale. And we have Kian from Nucleus to in the Restream waiting room. Let's bring him in to the TVP and Ultradope. Keon, good to see you. Wish it was less dramatic circumstances, but you know, it makes for good tv. And we're happy that you're here and we can chat about this and I mean, I'd love to just give you the floor. I'm sure you saw, you know, some of the early segments. Where do you think it's important to start? Where do you think it's most important to set the record straight as a first point, and then I'm sure we'll have a bunch of questions.
- [65:30]
Keon
Well, I didn't see what Cremu said. I was busy helping a patient. But I think the key thing to remember is that Cremu and I, we are definitely aligned on doing great science. At the end of the day, that's what we want to do. We want to serve the patient. We want to do amazing science. I think what we're not aligned on is Cremeu basically, for several months has not disclosed that he's been affiliated with a competitor. And that wouldn't be so much a problem unless they're basically concerting together. And so that's on the Cremove side of things. But honestly, that's like the less important.
- [66:03]
John
Thing to Me, yes, I agree. I think that's less important. So I've seen him post positively about your competitors. I've not seen any proof that he's actually being paid or has equity in that competitor. But to me, it almost doesn't matter. It could, like every single post from him and Sichuan Mala could literally be from Nora at Orchid or someone at one of your competitors. You still need to address it, right?
- [66:28]
Keon
100%.
- [66:29]
John
Cool.
- [66:29]
Keon
And so, first and foremost, I'm going to say that our science is completely public, and it's been completely public. So one thing that it's really important to say is that anyone. And by the way, we've at this point, have shared our models with over 15 different entities, which includes, by the way, people affiliate with our competitors, several of them.
- [66:45]
Jordy
That means, just to be clear, I mean, Cremieu said that a number of people that he's aware of have requested access to the models and not been given access and been told to stop reaching out. And so I do think. I don't know.
- [67:03]
Keon
Utterly inaccurate and false. There is not one person who has filled in the Nucleus origin type form, which is a type form fill in a type form that has not gotten access to our model weights.
- [67:13]
John
Okay?
- [67:13]
Keon
And by the way, that includes people affiliated with the competitor.
- [67:16]
Jordy
Okay.
- [67:17]
Keon
And so I think what's really important here is the science is public. The message of the community is go and test it. In fact, our science is public, the competitors is not. So what I would propose is they should make their science public and let's have a third party independently evaluate the rigor, the quality of the science, and let's do it for everyone to see instead of he said, she said, they tit for the tad, you know, put the science out there, have a third party independently evaluate them. That is my message to our competitor. We are happy to stand behind our science, and we know that it's the highest quality science that can exist today. But by the way, John, that's not even the point either, please. You know what the point actually is? The point is about the patient. It's about having the empathy with the patient so they can know when they do embryonic selection, they can feel comfortable and confident in the results. And this Twitter back and forth, this tit for tat, this, oh, this person's race changed on the Nucleus landing page. It's ridiculous.
- [68:18]
Michael Kratzios
It's really ridiculous.
- [68:19]
Keon
And so that's my message.
- [68:20]
John
Speaking of the patients on the landing pages, what about the chronology here? This idea that there's a review of a baby with three months old, takes nine months to work through a baby. Should have happened a year ago. Was the service available a year ago? How do you square that particular allegation? That the timing of the review just doesn't line up with what must have happened in the real world had they used your service.
- [68:48]
Keon
There were several claims about the reviews. Let me address each, please. First and foremost, obviously as a HIPAA covered entity, we cannot disclose patient name, much less their picture. Okay. If a patient chooses to, they can publicly endorse the company and they can put their name in their picture. Otherwise, a patient can submit an anonymous, anonymous review and then we'll put that according to the landing page.
- [69:13]
John
Okay.
- [69:13]
Keon
And so maybe perhaps the people on the Twitter timeline, maybe they never run a company that involves any protections to the patients. Maybe they don't know about this. Maybe in like the broader tech community, it's like unfamiliar. If you're running a softw, it wouldn't make sense. Necessarily does not disclose the patient name. And I'm going to say to John.
- [69:28]
Michael Kratzios
This is really important.
- [69:29]
John
Yeah. Do you think you have to disclose the fact that you're using an AI generated image? Is that best practice or is that legally required?
- [69:36]
Keon
You know what I think we should do though, is now that the community gave us this feedback, is we should update it, make it more clear, hey, this is clearly not a real picture and this is both not a real name. That's reasonable. Okay, now fraud, this, that. Guys, really, come on. Okay, we'll update it. We'll make sure that the picture and also the names are more clear. But again, we're a HIPAA covered entity. You can imagine when you launch an embryo product, specifically people do not want their name to be affiliate with it. I mean, you have non accounts that don't want their names affiliated with these things. Imagine a patient actually undergo underwent Nucleus's services.
- [70:11]
John
Yeah.
- [70:11]
Keon
So now regarding the timeline thing, that's the second thing you mentioned. I want to directly address that as well. Obviously a company like Nucleus can start providing services to patients earlier than when we publicly launch a product. Moreover, you would imagine the services that you provide to patients would be the ones that actually the beta service that you provide to patients would be the ones you'd have reviews for, obviously, because they do the services prior to the company actually launching the services publicly. So that's it, that's the answer.
- [70:39]
John
So you were using the service before maybe a year ago or something, then you announced the service and that's why the we had request John to do.
- [70:48]
Keon
Embryo analyses probably three years ago.
- [70:52]
John
Yeah.
- [70:53]
Keon
I would wager that that actually was probably one of the first times before any of these companies to actually provide a sort of. This sort of services. So we've been thinking about this for a long, long time.
- [71:04]
John
Yeah, of course. Yeah, it makes sense. It's a very logical place to go. It's also a very competitive industry. There's a bunch of reasons why you'd want to play in that space. What about the, the Delta or the perceived gap between the marketing claims, what's on the billboard, what's in the New York subway? I'm seeing 50% IQ, 80% height. They feel like bold claims. What's actually possible? What can customers actually get from Nucleus today? What could they get a year ago when you were beta testing the product? I want to interrogate the gap there.
- [71:40]
Jordy
There.
- [71:41]
Keon
So to be clear, there is no gap.
- [71:43]
John
Great.
- [71:44]
Keon
Have a healthier baby. Have a taller baby. Have a smarter baby. IQ is 50% genetic. Height is 80% genetic. These are just facts of the matter. The, the, the latter two are herability estimates. They are what they are.
- [71:59]
John
Yeah.
- [72:00]
Keon
The former two are basically describing what you can do with Nucleus.
- [72:03]
John
Yeah.
- [72:04]
Keon
What, what I think is interesting here, there's actually a broader commentary. Nucleus is bringing the science mainstream. We are taking it out of the little echelons of the rationalist community, the little echelons of the scholars going back and forth out of the Twitter alleyway, and we're bringing it to the actual people who will benefit and use these services. I cannot tell you when you actually talk to a patient, not somebody on tech Twitter, when you talk to a patient, they have no idea this technology exists. And the first time they're discovering it is when they go and they actually see the campaign in the subway. And now, I think, is personally good for the entire industry. Right. Where you actually bring broader awareness. It lifts everybody, us, our competitors, and makes this actually more and more into a space. It's very early. My advice to our competitors is focus on serving your patients, because at the day, the market's huge and this market is extremely in its infancy.
- [73:00]
Jordy
And I think they would push back and say the industry can't afford to be sloppy. And I think that the.
- [73:08]
Keon
I agree.
- [73:08]
Jordy
The. I think it's a fair allegation that some of the ways that Nucleus materials have been presented have been sloppy. Do you. I guess one question I have is.
- [73:23]
Keon
What are you specifically talking about? What has been sloppy?
- [73:27]
Jordy
Specifically?
- [73:28]
John
The.
- [73:28]
Jordy
Like, the reviews. The reviews are sloppy.
- [73:34]
John
Using an AI image or using a stock image without Making it clear that this is anonymized because of hipaa. If it just said, if it said at the bottom and they're little asterisks and said anonymized because of hipaa, I think everyone would be like, oh yeah, that makes sense. Like they made a choice. And I think that's like the first thing that I would count as like sloppy.
- [73:52]
Keon
That's, that's fair. That's fair. And we're going to update that. Do you think that, you know that's proportional to the temperature on Twitter?
- [74:00]
Jordy
I think, I think politically charged category in technology and you can't afford to, you can't like basically the industry as a whole, I don't think can afford to make a lot of mistakes.
- [74:13]
Keller
Right.
- [74:13]
Jordy
These are people, these, this is the, this is the gonna involve the health of the children of all the industries clients. Yeah, there were allegations too that you guys were sort of had updated a test result on the fly. I have no idea if this is true, but I saw the claim going around. Somebody had gotten a certain test result and then it had been updated two weeks later.
- [74:38]
John
Yeah. What's going on there?
- [74:39]
Jordy
What's happening?
- [74:40]
John
That's super interesting.
- [74:41]
Keon
Nucleus. Remember guys, unlike these other players, we've served thousands of patients.
- [74:45]
Jordy
Sure.
- [74:45]
Keon
Anyone can go on our website right now and use our product. They can see our services.
- [74:49]
Jordy
Right.
- [74:50]
Keon
I mean, I think it's really funny what's flying around when someone could just go and buy a DNA kit and see the product for themselves.
- [74:54]
John
Yeah.
- [74:55]
Keon
Okay, so the idea that OB updated a model, we've updated models for the last several years. I mean results will change. We make that very clear. And by the way, any embryo selection company, Nucleus is full stack. We do adult DNA testing analysis. We also do the embryo and we also do a full end to end IVF experience. We're kind of multi product. But these models will evolve. One point here, which is important, John, to mention, people have a very good intuition when it comes to AI, that ChatGPT is going to be better next week, Grok's going to be better two months from now. The same expectation has to be communicated to the genetic optimization industry. The main limitation for building polygenic predictors is data. It's a data problem. And so what's going to happen is all the different polygenic predictors are going to be approximately equivalent until we get more and more and more and more and more data or people get more and more access to data. That is the fundamental bottleneck of the industry. In other words, similar to actually The AI situation, all the value is going to shift downstream to the application layer. The reason why, the reason why people are so upset is because Nucleus has excellent science, rigorous science, and we have excellent marketing, excellent product, and we've served more patients than all the companies put together. And so.
- [76:12]
Jordy
Okay, but if somebody gets a result and they make a decision based on that, and then a few weeks later you come in and you say, actually.
- [76:21]
John
It was the opposite.
- [76:22]
Jordy
It was, it was different than what we said, but they've ultimately made a decision that they cannot correct. Is there a regulatory framework?
- [76:30]
John
Yeah, that's a tough, that's a very tough situation.
- [76:32]
Jordy
Is there a regulatory framework that requires you to communicate to patients that 100%.
- [76:39]
Keon
So we're certified, of course, we're a CLIA certified CAPA credit laboratory. Any single time an update is made, it'd be reflected in the physician report of the respective customer. And also importantly, remember, there's a lot of disclosures, a lot of different consents people have to sign when they sign up for genetic testing services. One of them is, of course, that the results can and will be updated. And that applies to everybody in the industry. And that, by the way, applies to any lab developed test. The tests are getting better as more data comes in, software improves. That is the nature of how these things go. That's something that Nucleus has been very upfront with and we're very upfront if results do update or change.
- [77:15]
John
Yeah, yeah, I'm super. Yeah, yeah. I mean we were talking about like, there is a world and I think this is why the marketing is really like so important for what you do. There are so many other industries where if I'm watching, if I see a billboard for Instagram and it says the most entertaining images on the Internet and I download it and I'm like, this isn't as entertaining as YouTube. I feel like, ah, whatever, it's not.
- [77:43]
Jordy
That big of a deal.
- [77:45]
John
But the worst thing that could happen is someone does Nucleus with their embryo. It's accurate, but there's a minus sign in front of everything. So instead of the tall and smart one, they get the shorter, dumber one and then they can never go back from that. And it's this weird scenario. And so, so I do think that there's. I think that you're potentially correct that the temperature on Twitter is high, but it is a very high stakes industry. I think it is appropriate that you will just kind of need to deal with this for a while. I would love some background on this idea of the implications of of scores changing. I feel like that happened with 23andMe. I feel like that was the promise of 23andMe was that you do it and then as more data comes in, you can opt into extra studies. How did they solve that? Have you studied that business or any other previous DNA testing businesses to understand how to actually wrestle with that issue of the changing results over time as more data is created?
- [78:54]
Keon
So there's a couple things to unpack there.
- [78:57]
John
Please.
- [78:57]
Keon
The first is that.
- [79:00]
Michael Kratzios
You don't want.
- [79:01]
Keon
To be a Widget.
- [79:02]
Keller
Okay.
- [79:03]
Keon
Fundamentally, 23 is a widget. They thought that with their data, they could be able to actually eventually mine drugs, which because of the limited nature of their data, it's actually not best for drug discovery. But on the whole genome front, maybe you could argue, okay, that won't be a problem if ever a company wanted to do that. But actually, there's a meta point here about the genetics industry, which is. Is I think, and this is kind for me, which is, I think that too often people focus on the genetic test. It's not actually about the genetic test. Right. Usually people have a very specific, acute problem they want to solve. In the IVF context, it's about, for example, having their best baby. So you'll see more and more patients are signing up for Nucleus to do ivf. And it's IVF that's full stack, powered by our genetic stack. Because what's really unique about Nucleus as a business is because, because we've done the adult DNA testing for many years now, and then now we also do the embryo analysis. So we can actually build a new kind of IVF experience called IVF plus that is centered around giving parents as much information as possible into their embryos. And notice that shift there, John. You go from being a widget to actually trying to serve a process, a workflow that exists and that if anyone who wants to have a baby has to undergo.
- [80:18]
John
One thing that cremieu was kind of hammering, that I hope I don't botch was something about 12 SNPs versus a million SNPs. Previous data required a lot more genetic information. Nucleus was making the claim that you could get just as much signal from much less data. Is that right? What is your reaction to his. His take that it would be impossible for Nucleus to derive such a strong signal about the impact of genetic information from such a small data set.
- [80:54]
Keon
My response is, the models are public. Go check them. I mean, the models are public, to be clear.
- [81:01]
John
He also said that he tried to get access to the model and that he couldn't. But you're saying about that.
- [81:06]
Keon
Okay, it's a complete lie.
- [81:08]
John
Okay. It is a so. So it is incumbent, by the way, he proves that he. That he applied or something like that. I don't know. I doubt he took screenshots of his. I don't know.
- [81:16]
Keon
I mean, he wants. Yeah. I mean, also, by the way, we'll give the report, we'll give the weights.
- [81:20]
John
Okay, Just, just go.
- [81:21]
Keon
Literally mynucleus.com labs yep, go on. There. It says origin. Open weight. Like open weight. You know, instead of all this debacle, all this Twitter nonsense, the message to the scientific community, the message to Twitter is go check the weights. And not just that our models are public, yours are not. Make your models public and we can actually have a conversation. Then.
- [81:41]
John
What about the allegations of plagiarism, copying from a different paper? When I looked at it, it didn't look like I'm not equipped to evaluate if it's a direct copy or not. Is it scientific best practice to stand on the shoulders of giants and. And pull from what the best researcher doing, even if they're at your competitors or with something else more sinister going on or maybe a mistake?
- [82:13]
Keon
I think the thing to remember is a lot of research, if you think about in AI context, it's like attention is all you need. They will use that paper.
- [82:21]
John
Yes, yes, yes. The transform paper has gone everywhere.
- [82:24]
Keon
It's the same thing. What are you going to say? Google stole OpenAI?
- [82:27]
John
Stole it from Google?
- [82:28]
Jordy
Come on.
- [82:28]
Keon
You're not going to say that because it's public research. And so it actually comes back to the fact that Nucleus is bringing this technology mainstream. Our campaign is succeeding every metric. Sales are up, signups are up. We have multiple articles covering the campaign. People are starting a national conversation, as we saw on Twitter. And I think people want to try to tear Nucleus down because we have excellent science and science, excellent science is the first step to building a very successful biotech business. And this is what I think a lot of the armchair philosophers on Twitter don't fully grasp, which is, in order to actually build a successful business, you need to have each and every single one of these components shot. It's very easy for a scientist that's never actually built a business, has never actually tried to sell to a normal person. Right. To say, oh, the marketing is extreme. Oh, the marketing's over the top. Oh, the marketing's this. The marketing is helping a patient identify a genetic risk that they would unknowingly passed on to their Child. There was a patient recently who they were doing IVF with Nucleus and they identified that they actually had a gastric cancer marker, colorectal cancer marker, actually. Excuse me. And that that marker doesn't just impact their health, it also impacts their future child's health. So what did they do? They chose an embryo without that specific genetic marker and they took themselves precaution to make sure that they don't get cancer. And so that's what Nucleus is about. And we're going to keep serving patients.
- [83:53]
John
Yeah. Makes a lot of sense. Sorry to everyone. We're having a little bit of trouble with the stream. This has been a fascinating conversation. I like the gauntlet being thrown down on the next step here actually being, let's get the models in everyone's hands. Because that seems to be a fundamental disagreement here. You're saying that you'll give them the model, give them the data, they're saying that they can't get it. Well, the next step out of this debate, I think that could silence a lot of the armchair philosophers, as you point.
- [84:28]
Joe Wiesenthal
Do you.
- [84:29]
Jordy
Do you care about rebuilding trust with the broader community on X? Because yes, absolutely.
- [84:36]
John
That's my opinion.
- [84:37]
Jordy
Yeah, yeah, yeah. And then, and then I guess, like, what. What are kind of the. What are the handful of things that you're committed to doing to. To make that happen?
- [84:48]
Keon
A lot of things. One is the AI thing. I think, you know, we should fix that, as mentioned.
- [84:53]
Jordy
Right.
- [84:54]
Keon
Make it more clear that it's AI images that people want to be under, protected under hipaa. That's one thing I think we should do. Another thing is that this is originally why we made the models actually public, is because we need to be more clear that people can go and actually test and check this stuff. Right. In some sense a company can do something, but if people aren't aware of it, that's also my responsibility as CEO.
- [85:15]
Keller
Right.
- [85:16]
Keon
And so part of the reasons why I'm saying, hey, the models are public, come submit to get to them, is clearly there's an information gap there that for whatever reason wasn't filled in my Nucleus and we have to do better. And the last thing I think which is really important is sometimes on Twitter, this one personally hurt me. The amount of time we've spent making the product in a way that people can try to understand where it shows the error bars, for example, where you can see that there's signal, but there's not a lot of signal, or in some cases there might be a lot of signal with something like height.
- [85:53]
Michael Kratzios
Right.
- [85:54]
Keon
The Amount of time and effort and product design and science and sort of like scientific communication specifically. It's been years. Nucleus been around for six years. I've done this for years. Trying to get that right. When you see the embryo on your smartphone, it's easy to look at that and just write it off. I encourage everyone to go and pick your baby. Com, go to themtheflow, click around, look at our disclosures, look at the way we present information. Right. It really is. It takes a lot of time. It takes a lot of effort. Right. And I think that is something that I'm thinking about. How do we. How can we better put the product out there? Because I think when people can't see something, when they can't see the product or they can't see the science, then they start ruminating. So that's what I really, really want to do. And how do we better kind of connect? And also, honestly, I think I need to be also more mindful. I mean, clearly, I inadvertently. I've pissed some people off, and that's understandable that feedback's taken in. Okay, I'll be more mindful because I really, really, really, really. Nothing is more important to me than a patient coming to Nucleus getting the highest quality care in every sense.
- [87:04]
John
Yeah. Well, thank you for taking the time to talk to us. Thank you for taking the time to break all of this down. We are fighting through some technical issues completely unrelated to what's going on.
- [87:16]
Jordy
Somebody didn't want this interview to happen.
- [87:17]
John
Somebody didn't want this interview to happen. I don't know. But we really appreciate you taking the time to hop on and set the record straight, give your side of the story and explain what you think folks are getting wrong on the various issues here. It's an incredibly detailed, incredibly important discussion. And we really thank you for taking the time to talk to us. Thank you, John.
- [87:39]
Keon
Thank you, Jordy.
- [87:39]
John
Have a great rest of your day. We'll talk to you soon. Let's go back to the timeline. We do have more guests if you are tuning in because of that debate. The chat is active, but we don't know the status of the stream. The chat is saying that the stock is crashing because, of course, we're having stream issues. I don't necessarily think we gotta put this on us. You know, there's all sorts of, you know, independent state actors that have attacked us in the past. We've had major outages from the hyperscalers. You know, Nvidia put out a statement saying that they're not Enron, but That doesn't mean that they're not somehow responsible for our stream lagging in quality. Who knows? You have no idea what's going on, why our stream is having issues. All I know is that it's not our fault. That's for sure. There's definitely nothing that we did.
- [88:38]
Jordy
Amuse says Cian is now dodging the question about the Mendelian disease he flagged for a patient and then revised on this is illegal without notifying the patient. He's saying it's just a model update. This is not something you update on. Medallions are definite. You have it or you do not.
- [88:55]
John
Yes, Mendelians. Interesting. Well, we have Joe Wiesenthal from Bloomberg joining. I'm very excited to get get an update from him. Oh, he's here. Welcome to the stream.
- [89:06]
Joe Wiesenthal
Thanks for having me. It's been too long.
- [89:08]
John
It has been too long. We're sort of fighting for our life on the stream, but the conversation between us should be fine. We had a very dramatic debate in the bio context. I don't know if any of this bubbled up to you, but this anonymous poster, cremu is alleging that this company.
- [89:28]
Jordy
Nucleus, you might have seen some subway ads. Have a healthier baby. Have a taller.
- [89:34]
Joe Wiesenthal
Oh, I've seen these ads. I don't know if I've seen the ads. I've seen the photos of the ads and I know that they're the subway stops that I sometimes go to, but I actually don't know if I've seen the ads. I'm gonna look for one tomorrow morning. I'm gonna go to the stop that I've seen those photos. I'll take my own. I'll verify my own photo.
- [89:51]
John
We were joking about this, that there's something about New York subway advertising that's uniquely viral and every company, no matter where they're based, just to they see New York only as a place to run out of home and then go viral. Because this has happened a number of times. Friend.com, i'm sure. Did you actually see the Friend.com campaign?
- [90:11]
Joe Wiesenthal
I definitely saw. And without Phil, every single one was vandalized, period. There was not a single one.
- [90:15]
John
Really? That's true.
- [90:16]
Joe Wiesenthal
Every single 100%. 100% of the ones that I saw were vandalized.
- [90:20]
John
That's hilarious.
- [90:21]
Joe Wiesenthal
Zero exceptions.
- [90:23]
John
They were all over la. There was one that it's right on the drive from the gym to our office to our studio. But it's hilarious because it's a billboard that's directly up against a wall. So you can't see the full ad. You just see end.com and it just is very ominous. Like this is the end and it's clear because the buy was so broad that they didn't think that, oh yeah, that one's actually not valuable at all.
- [90:49]
Joe Wiesenthal
I love that. I love that. They literally, they just spammed real life. That's what I mean.
- [90:52]
John
Totally, totally.
- [90:53]
Joe Wiesenthal
They spammed the physical world and it.
- [90:55]
John
Was getting worse and worse. They were spamming Los Angeles. And then I live in a suburb of Los Angeles, Pasadena. And then one day I'm driving around my hometown, which is very quaint and sort of out of the loop. It's not the San Francisco hubbub, it's not Teapot, it's Pasadena. It's a very chill suburb. And I see a friend.com ad billboard and I'm like, I can't believe you followed me here. It's following me everywhere. It follows me on the Internet, follows me to la, follows me to Pasadena. I can't get away from it.
- [91:22]
Joe Wiesenthal
It's like clicking on an ad or something and then you just click, get served that same ad over and over again. Except this one is real life.
- [91:29]
John
I do wonder if the rage bait if these. Because there's these small campaigns from these tech startups that are in one way I criticize them, we criticize them here on the show. But I think that in some ways these are just pranksters on the Internet. These are young entrepreneurs figuring out how to get attention. I'm somewhat sympathetic, but at the same time I do see that there are, there are people that make political decisions based on this stuff. Have you been following the Tech Lash and all of this? The data center news?
- [92:02]
Joe Wiesenthal
Yeah, absolutely. I've heard of it. I've heard that there's a bit of a backlash brewing.
- [92:06]
Jordy
Yes.
- [92:06]
John
How real do you think it is and do you think it's gonna be more power driven or water driven or slower?
- [92:13]
Joe Wiesenthal
I think it's gonna be very real. I actually think it's gonna be very. Yeah, it could be all the. I think it's very real. I mean, I really wonder who is in. Even in the 20, you know, 2028 or even 2026, who is going to run on anything that actually is like, oh, no, actually data centers are good. AI is an important industry of the future. You know, actually the power stuff has been overstated. The water stuff has been dramatically overstated. I have a hard time seeing any politician actually running on that case. It seems like anyone, Democrat or Republican, it feels like they almost have to be automatically against data centers for some reason. And I think you're right. Like, I think that there is. People have some intuition. They don't like AI companies, they don't like big tech, whatever, and then they fill in whatever seems satisfying. So I don't know, I think the water stuff seems like the most out there and disconnected from reality, but. And so therefore the people who are most disconnected from reality will probably latch onto the water stuff. The people who are a little more sort of, of, I don't know, Normie in their views about how the economy will maybe talk about the electricity and then people who just dislike the sort of broader effect of tech and all these different things, they're probably going to talk about the slop and how it's ruining society, which maybe it is, I'm not really sure. But it does feel like there is something to your, quite to your point. There's something for literally everyone to latch onto in the anti AI fight. Anyone can have their thing which resonates with them, in which case it's like hard to see where the constituency is to build these things. So I think what you end up is probably a lot of entities looking for places in the middle of nowhere in Texas where they can set up their own natural gas plant and their own gas turbines or something and stay off the grid as long as they can.
- [94:00]
John
We gotta get a politician that's just like, you know what? This stuff's delightful. Have you seen a Studio Ghibli? I like a Studio Ghibli. I like a Suno song.
- [94:12]
Joe Wiesenthal
Yeah, Someone will like, who is it? Like just even when you say that though, like, it's hard to imagine who that politician is or what the case that they make, you know, so few people right today. I mean, I use some AI tool basically every day, look up something, you.
- [94:28]
John
Know, who speaks for us, who speaks, who speaks for the constituents that do one deep research report every couple days and they, and they use the thinking model models to answer some questions every once in a while and they generate some funny images every once in a while and then they kind of move on and then they come back to.
- [94:46]
Jordy
It a little bit and then it's.
- [94:47]
Joe Wiesenthal
Like, oh, they have a new, they have a new thing out. Let me, I'll run my battery of tests that I do with every new model. The questions that I always ask. Yeah, it's pretty good then.
- [94:56]
John
Yeah.
- [94:56]
Joe Wiesenthal
Yeah, I think it's gonna be, It's a real, it's. It's gonna be really tricky politically I think, and I really think it'll be huge because just to, you know, the labor market is soft. So here is this. And electricity prices are high. So. And granted we don't know what the conditions are going to be in 2026 or 2028, but right now you have people who are, you know, in the AI industry, obviously many of them, in fact talking about the potential for AI to displace significant amounts of labor. Who's going to vote for that? Like how is that again, I could envision some world in which human life is a lot better when we've been freed from many laborious tax totally tasks. But in today or tomorrow or 2026, it's hard to see like what is the thing that gets people excited.
- [95:41]
Jordy
Yeah, I mean pre, pre Internet, pre Internet, it would have been a lot easier for Silicon Valley to navigate, navigate this tech trend, this like technological cycle, because you could have been going to the capital markets and saying, well, you actually want to give me $100 billion because I'm going to displace, you know, millions of jobs and all these categories and we're gon capture some percentage of that. And then you could go to the everyday people, you could go to the media and say we're going to create super abundance for everyone and there won't be any jobs and you're going to have an army of robots that run your whole life and it's going to be this beautiful utopia. And now people go on one podcast and they want to talk about job displacement and they go on another podcast and they talk about utopia and the same people end up seeing both of them and it just doesn't, it doesn't work.
- [96:36]
Joe Wiesenthal
I couldn't agree with you anymore on this specific point. No, for real. I think this is like one of the defining phenomenons of our time, which is that there is no such thing as segmenting audience. And this is a phenomenon that occurs across all sorts of different realms, whether we're talking about politics or Wall street, et cetera. Historically, people talk differently to different groups and that's just very normal, etc. And you tell one story to someone, if you can't do that anymore at all, everything in any context is implicitly understood, including inter internal company communications. Right?
- [97:09]
John
Yeah.
- [97:09]
Joe Wiesenthal
Where we expect everything to leak and you expect someone to any memo that you share. So internal communications can't really have any candor anymore because that all reads as pr because that's expected to.
- [97:21]
Cremieux
Yeah.
- [97:21]
Jordy
And every single person running a lab has had something where six years ago they, they were on a mic spike, saying confidently, it's very likely that AI will kill all of us on a long enough time horizon. And then that resurfaces today and it's.
- [97:34]
John
Now or even worse, they'll say, like, one of my worst nightmares is that this happens, and that's why I'm working to stop that scenario. And then people just, that's why I.
- [97:42]
Joe Wiesenthal
Work to build it. But this is a weird thing about AI specifically too, which is that we're sort of at this point where several technologies that maybe we were really excited about at some point in the past, just years down the line, like, oh, we didn't really think, or this turned out to be not so great, or we don't really love the effect that this is having on society and so forth. AI seems very strange and distinct from anything else I can think of in memory where from day one, even before it really existed, the people invested in it and sort of working on it have talked about its downsides and frequently dramatic, dramatic terms such as you're describing. So it's very different than any other technology where usually the downsides only become apparent years and years after they've sort of suffused and soaked into society. Here they're talked about from day one.
- [98:28]
John
Okay, last week there were two headlines that I was trying to turn into some sort of pithy phrase or headline. I couldn't really land it, but I'd love your feedback. So Nvidia beat earnings and we got a jobs beat. And so I was riffing, I was like, demand for robots and humans through the roof.
- [98:49]
Joe Wiesenthal
Yeah, that's right.
- [98:50]
John
Is that what's going on, or am I misunderstanding the jobs numbers? Was that less impressive than people thought?
- [98:55]
Jordy
The October job jobs report is canceled.
- [98:57]
John
Yeah.
- [98:57]
Jordy
And the gdp.
- [98:59]
Joe Wiesenthal
So the. Yeah, I'll say a few things. I mean, that September, that jobs report is from September. It feels like a lifetime ago. You know, the other thing too is that although it did, the pace of job creation for September did come in higher than expected. Once again, job creation was actually negative if you include healthcare and social care work, which is a thing that I think I've talked about a couple of times when I've caught up with you guys. But those are the jobs that we would really like to see AI liberate us from. Right. Like, it would be really nice if you could actually have robots change the bedpans of seniors or other these things that are sort of low productivity jobs, jobs that for many people are low paid, kind of miserable in many cases. Et cetera. So I think what's going on, unfortunately, is that we're in this environment in which job creation overall for most sectors is, is pretty mediocre, including finance, including tech, et cetera. The one thing that keeps powering us forward are these sort of menial, low paid jobs in health care, service sector, taking care of seniors, et cetera. And I don't know, it feels like we're very long, very long until anything AI robot related is actually getting into that sector. But that would be the dream, right? I mean, that's what that would be the dream to. That was the original progress in that front.
- [100:18]
John
I mean, elder care was the original pitch of Honda Asimo back in like 2000 or 1999. It was like, yeah, this robot's gonna bring the meal to the, to the old person in the sick bed.
- [100:30]
Joe Wiesenthal
Wouldn't that be amazing?
- [100:31]
John
Makes a ton of sense. And to be fair, there are some robotic like, you know, with wheels on, it rolls around, does some stuff, but certainly not broad deployments by any means.
- [100:41]
Joe Wiesenthal
Yeah, not broad deployment, not at the scale. And so what happens is we have this, this economy where, you know, the unemployment rate is still, still pretty low by historical standards, although it's gone up a fair amount, a little bit in the last year. But there's just so much pressure being put on the existing labor force to care for the aging population. It creates some pretty serious strains.
- [101:02]
John
Yeah. How have you been tracking the, just the AI spending bubble? This idea of, you know, massive growth debt coming into tech for the first time in a long time. I feel like a lot of tech people, people are so used to the venture capital model. Okay, yeah, it might be 100 million at risk, but this is 1% of overall allocation. There's a bunch of LPs from foundations, it's very diversified. And if that company goes bust, that's fine because another company's gonna do great. Now we're looking at serious numbers. We're getting into the trillions. There's debt involved. People don't know how to manage with debt and deal with that. How are you processing it?
- [101:39]
Joe Wiesenthal
It was sort of a real wake up call to me when I started seeing people online post screenshots of credit default swaps on Oracle Debt. Like that was the moment where it was like, oh, this really has transformed from the sort of equity funded, free cash flow funded environment which has characterized tech for, you know, over two decades, really going back to, until the, the telecom bubble. So as soon as you and I know these companies have debt, I mean you see them, Apple has debt, they've had it for a long time. A lot of these debt issuance though in recent years have been more or less like exercises in cash flow management or optimizing taxes and stuff like that. Now it feels like, okay, like this debt is at very real scale or I'm looking at core weave, credit fault swaps, Oracle credit default swaps, et cetera. That is to my mind a signal of. Of course something's changing. Blue Owl, they're publicly traded. That's the private credit company that's gone in with Meta to do some data center financ. That stock I think has become a bit of a proxy for how people perceive some of the financing risk in that space. The deal that we have an episode coming out I think sometime next week actually where we talk a little bit about how the credit construction of these events, the founder of this company Noetica, which uses AI to examine credit agreements, actually, actually walked us through it. It's some fascinating stuff, but people are sort of looking at, okay, who is the real bag holder here? What is the risk of, you know, people are talking about, obviously, what is the risk if there's not as much value in these GPUs five years from now as we may have thought? And that to your point, that's just totally novel for tech in recent years. It doesn't feel like we've. It's been so long since the idea of debt or leverage in that way has been part of the tech story.
- [103:32]
John
Yeah.
- [103:34]
Jordy
What did you make of Nvidia sending out that report for the sell side over the weekend?
- [103:40]
Cremieux
And then again.
- [103:43]
Jordy
They had another post today. I'll just read it in case anyone's just tuning in this morning. Let's see, we covered it at the beginning of the show. We're delighted by Google's success. They've made some great advances in AI and we continue to supply to Google. Nvidia is a generation ahead of the industry. It's the only platform that runs every AI model and does it everywhere computing is done. Nvidia offers greater performance, versatility, fungibility than Asics, which are designed for specific AI frameworks or functions. So again, not, not like these are. These are meant to be inspiring, but they come off the, you know, they have the opposite effect.
- [104:23]
Joe Wiesenthal
It's really weird. The tweet like, I guess I sort of understood. Okay, so they sent out out that note, you know, look, as I mentioned over the last several weeks, for some reason Wall street has got really taken in with this whole conversation. About GPU depreciation schedules. Maybe I think Michael Burry's been talking about it or something. Okay, fine. Like this has taken hold. I am sure this is the type of thing where for every 100 people who are talking about this, maybe one knows what they're actually talking about. Like I have no doubt that there's all kinds of noise out there. And so maybe it makes sense for Nvidia to like, oh, let's, let's put out some information that we have. Like, I guess it's a little weird, but okay. Like I sort of get it. Given the degree to which this has just become a meme in the last few weeks. The tweet about Google is a little strange. Like, like here is the, here's the biggest, most powerful company in the entire world and they're doing this sort of a weird. We're excited to see, we're happy for your success.
- [105:26]
Jordy
It reminded me of Jensen's comment on the, on the OpenAI AMD deal where it was like kind of snarky. He was saying something like, I'm kind of surprised they would, they're so excited about their new chip. I'm surprised they would give away 10% of their company before they've even developed it. So, so again, to me, I feel like when you're operating from a position of strength and confidence, you never, you never talk about competitors from official channels. I, in fact I had, I've given it, I've given this advice very recently where like there's a, a company that every time their competitor does something, they post about it. Guess that. Get. Guess. Guess.
- [106:10]
John
It's so much easier to just be like, like our esteemed, the other members of our industry or like the other big tech companies do it this way or like other handset makers or other smartphone makers and everyone knows that you're talking about Google or iPhone or whatever you're comparing to, but you draw, in.
- [106:28]
Jordy
This case, the company that they always talk about has a hundred times their revenue. And so it screams like, it screams like we're obsessed with our competitor. But in this case it's like the TPU is just like the first sign of an external.
- [106:45]
Joe Wiesenthal
You immediately like pounce on them and you're like, you know, I've been thinking, I mean one of the funny things about Jensen Nvidia overall is you think about these other mega cap tech companies and these other ultra rich CEOs. You know, they've been dominant in most of these cases for like well over a decade, right? They've been Some of the most powerful companies in the entire world for over a decade. Obviously, Nvidia is sort of this weird case because, you know, four years ago people were talking about, oh, this is the company that makes chips for Ethereum mining. Or this is like. That was how a lot of people talked about Nvidia. I think even as recently as 2021, people were talking about, oh, Nvidia's. So it might be.
- [107:28]
John
Well, people don't remember before There was the Mag 7, there was Fang and there was Fang.
- [107:34]
Joe Wiesenthal
Right.
- [107:35]
John
And what was Netflix? It was Netflix. It was not Nvidia. It was Facebook, Amazon, Apple, Netflix, Google. And then crazy to not include Microsoft. Right. And they. So they added Microsoft and they took out Netflix and then they added Nvidia and Tesla, of course. But yeah, I mean, what. What a. What a wild.
- [107:52]
Joe Wiesenthal
It's a weird, like, what a run. I mean, obviously, like, Nvidia has been an incredibly successful company, but it went from like a, you know, pretty successful chip company to the biggest company in the world in a matter of few years.
- [108:06]
John
Yeah.
- [108:06]
Joe Wiesenthal
Maybe there's something there. Maybe there's still a chip on the shoulder. Maybe there's still some culture of feeling like it's underdog and something where it's like, yeah, it's like, act like you've been here.
- [108:16]
Jordy
Yeah, it's one.
- [108:17]
Joe Wiesenthal
It's one thing.
- [108:19]
John
The tenure thing is real. Like, there's.
- [108:21]
Jordy
So here's the thing. If you're a startup and Google enters your market, I've seen a lot of founder or like a big company, if you get Sherlocked by Apple, you're going to hit the timeline and be like, I'm delighted by Apple's new mobile app. We're delighted to continue serving.
- [108:39]
John
They validated the market.
- [108:41]
Joe Wiesenthal
Thank you, Apple, for validating our industry.
- [108:43]
John
Right, yeah, yeah.
- [108:44]
Joe Wiesenthal
But I don't think. I don't think Nvidia doesn't exactly need validation at this point from a competitor.
- [108:51]
John
And the TPU is a decade old, by the way. Right.
- [108:54]
Joe Wiesenthal
It's been around for a while and all. Right. And like that, which is another sort of interesting dimension of all of this, which is like, suddenly people wake up and, oh, it's not like to your point. I mean, people have been talking about the existence of Google's TPUs for a long time. Obviously now there's been some question about the degree. What's the strategy here? Would they ever sell them? Will they rent them out? There have been obviously questions, et cetera. But it is funny how, you know, you get these moments where Suddenly you know, you get this 180 over the last several months weeks on Google. The Gemini 3 launch of course bolstering this idea. Oh actually they're at a good space and suddenly. Oh, and they also have these TPUs which they've had and been working on for a long time but. But nothing really changed. They've had them for a while. There's not some new breakthrough announcement here or something. And so suddenly Nvidia feeling that it has to respond a little strange.
- [109:44]
John
Yeah, yeah. I mean I do think that like there's so much demand that it's a little bit ridiculous to just be like oh, Nvidia is completely over. But at the same time like it's never great when you go from a monopoly to a duopoly. Like it's just that it's always nice to be in less competitive of market and yeah, but. And this whole year has been about amd.
- [110:06]
Jordy
AI is literally half as transformative as the AI bowls. It doesn't matter. Like you can have two players and the demand is so overwhelming that.
- [110:18]
Joe Wiesenthal
And like Nvidia's own sales are capped. Right. By capacity and by production capacity. There's only so much. Which is another sort of like interesting dimension that I'm like trying to get a better understanding of here, which is that you know, again it's not like search or AI or chatbots etc. There is the. There are these constraining effects on the markets from how much fab capacity is at TSMC or how many some of this underlying equipment. So the ability of anyone to scale up dramatically and expand the overall size of the market is sort of tough at this point. I don't know exactly what that means, but it feels like. My guess is my assumption would be that everyone remains pretty capacity constrained for some time. I don't think there's tons of chips laying out there for the taking right now.
- [111:09]
John
Yeah, give us an update on odd lots. People have been congratulating you on 10 years. Did the 10 year date happen recently?
- [111:20]
Joe Wiesenthal
The 10 year date did happen. We didn't even, you know it's funny, I think it was November 6th. I got an email because we. So we have a party which you both are invited to. We have a party in New York City in December to celebrate our 10 years. So we've been sort of.
- [111:37]
John
That's right, you play the night vision sound.
- [111:39]
Jordy
That's right, fire me up.
- [111:41]
Joe Wiesenthal
But so we were like getting ready for that. We've been doing some sort of 10 year episodes. We're talking to some big names and, you know, big, big, big picture thinkers and stuff like that. But I didn't realize the actual date until the morning of. And I started getting random emails from people inside the company congratulating me, congratulating us on 10 years. But it's pretty crazy.
- [112:01]
John
10 times.
- [112:02]
Joe Wiesenthal
Yeah, 10 times. Wow. It's 10 times gone.
- [112:10]
Jordy
There we go.
- [112:12]
Joe Wiesenthal
This has been the highlight. The 10 gong smashes. This has been the highlight so far of our 10 year anniversary.
- [112:18]
John
Who's the most recent 10 year guest that exemplified that, like bigger picture thinker.
- [112:25]
Joe Wiesenthal
Yeah. Well, we had Ray Dalio on the podcast on Monday, which was a lot of fun. He told us about meditation. He talked to us about the importance of transparent culture, about the importance of letting junior staffers or junior employees at Bridgewater attack the senior employees.
- [112:42]
John
I loved his story about the first stock he ever bought.
- [112:47]
Joe Wiesenthal
I know, I know.
- [112:48]
John
Hilarious. I don't know if he tells that constantly. I haven't listened to every podcast.
- [112:51]
Joe Wiesenthal
He probably does. He probably does.
- [112:53]
John
He's just like. He's just like, I saw it and it was the cheapest stock he could possibly.
- [112:58]
Joe Wiesenthal
It was the cheapest nominal stock.
- [113:00]
John
It was like $5 a share. Yeah, he's retail. He's a retail army. I mean, it's like in crypto when they're like, it's 00,0001 cent. A token. Imagine if it's a dollar and you'll be like, I have so much money.
- [113:13]
Joe Wiesenthal
Can we talk about that for a second? It's really annoying with some of these crypto prices to have to like squint and see how many zeros there are. They need some reverse splits. I really think like, we need to go. We need to like $1, $2. But no, to your point. Right? It's. It's basically if we're. I don't want to be insulting, but it's basically like the dumbest. Yeah, it's trying to attract the dumbest kind of trader there. When you're like, oh, this is cheap because it's 1,1 millionth of a cent.
- [113:39]
Jordy
Or whatever, you're still early. Yeah.
- [113:41]
Joe Wiesenthal
I mean, I imagine if this were a dollar.
- [113:43]
John
I remember the Doge to a dollar campaign. Everyone Doge to a dollar.
- [113:47]
Joe Wiesenthal
That was a very powerful meme.
- [113:48]
John
It was very. How was it these things going to get there?
- [113:52]
Joe Wiesenthal
Because I think it got to like 30 something cents. So I was like, oh, it's like, it's definitely going to satisfy the meme. It never made you like.
- [113:58]
John
I thought, I thought it was going to get there because I put my whole page.
- [114:00]
Joe Wiesenthal
I really, I really thought it was. I was like, oh, it's obviously going to go to a dollar.
- [114:05]
John
It did seem like the meme was going to work. It got close. It got close. It was Jordy.
- [114:11]
Jordy
Are you aware of a single person that has sold their primary residence in New York and is going to. Going elsewhere since the election? What's been the sentiment? I know a bunch of former Odd lots guests that are on the transition are on the.
- [114:27]
Joe Wiesenthal
Yeah.
- [114:28]
Jordy
Which is cool. Cause you guys have some insight into like how these people think and the public does.
- [114:33]
Joe Wiesenthal
Yeah. I have not heard of anyone who is leaving New York City. It's interesting. There's a. I don't know the name of the brokerage, but there is one of the brokers in New York runs these ads. Speaking of outdoor ads in the taxis. And prior to the election, they were very scaremongery and they were like talking about deals in Florida and all this like real estate that you could buy in Florida, etc. Anyway, after the election, I saw one of the ads this week and it was talking about how JP Morgan just opened up its new headquarters in New York City and how all of the. How many employees they're going to have there. So I guess now that, now that the election is over, they can go back to selling New York City real estate because. Because they didn't get the. I don't think they got the out. Those brokers did not get the outcome that they were hoping for. But yeah, we have some past guests in the transition team. Paul Williams, shout out to him, who I also play music with in my country music band, Light Sweet Crude. He's on the housing transition. Kathy Wild, who is the head of the Partnership for New York City, which is the big organization of a bunch of CEOs, et cetera. That's like the most like sort of like dyed in the wool, like sort of, you know, they're not a lobbyist group, but they represent the business community. Even she is in the transition team. She's also been on the podcast. So it seems like, you know, I've seen a bunch of people angry at some of the picks, happy about some of the other picks. It seems like he has built a. He's at least with these selections, a little something for everyone. Some moderate, some normies, more radicals, et cetera. Enough for like everyone to be a little happy and a little, a little concerned maybe.
- [116:11]
John
Yeah, yeah. I mean it certainly seemed like that there was that clip of him with Trump that Was very funny where they're.
- [116:16]
Joe Wiesenthal
Kind of going, oh, that was crazy.
- [116:18]
John
It felt like there was just like, okay, there's a lot of theater on both sides here. They're both, they're all having fun. You know, they're not like, I can't even be in the same room as that person.
- [116:26]
Joe Wiesenthal
So, you know, I think that, like, for those of us not in politics, I don't know, it's like hard for us to imagine how these people who are like, the way the rhetoric and then they like get together and they smile in front of the camera and like, feels very weird. But, you know, they're just like, they're professionals.
- [116:41]
John
I mean, NFL teams have rivalries. They shake hands at the end of the game. I think that's kind of the nature of these things, which is fun.
- [116:47]
Jordy
Wwe.
- [116:48]
John
Yeah, wwe. I've always liked the wrestling metaphor.
- [116:53]
Joe Wiesenthal
The thing is too, is that, like, whether we're talking about the selections of people for the transition or the, I think very wise choice by Mamdani to like, try to be friendly with the White House or at least find some common ground is, look, there's some like, pretty hard budget constraints, etc. The mayor, the job of mayor is a management job. You know, the trains aren't going to run themselves, the buses aren't going to run themselves, the apartments aren't going to get built. So there's a certain amount of like, required between the budget constraints and just everything else, I think there is a certain amount of sort of forced pragmatism that's probably at play here.
- [117:30]
John
Yeah, that makes sense. We'll let you go in just a minute. What's next on the economic calendar that you're tracking? What should we be looking forward to through the end of the year? Obviously, in our world, we're very excited about Black Friday going to be tracking those numbers. Also an interesting economic indicator. But what's on the top of your mind?
- [117:51]
Joe Wiesenthal
You know, I think actually like, basically all data through the end of the year is going to kind of be garbage because obviously we're going to get the restart of the data and we'll get more timely data, jobs data and so forth. But all of that is October. October affected by the shutdown.
- [118:05]
Jordy
October. We are not getting anything from October.
- [118:07]
Joe Wiesenthal
Yeah, we're not getting anything from October. And then November is going to be affected in large part from the shutdown. So those numbers aren't going to mean anything anyway. And so probably the actually clean report where we could say, okay, this is actually well collected data to the extent any data is, there's all kinds of issues with collection and is not affected by the shutdown down. So that's going to come out in January, about December, which is going to be very strange. You know, I think the big development is. So I think it's December 10th is the next Fed meeting. As recently as a week ago, it was looking like they were not going to cut. The odds were below 50%. But a number of the FOMC members in the last several days have come out and said they're cool with the cut. So it looks like as of right now we're going to get a cut. But that is, I think that meeting is the day before we get the November jobs data. So it's all going to be sort of a mess, I would say until early next year.
- [119:00]
Jordy
Last question. How should people read into not getting data from the month of October? Should we say that like the simplest explanation is employees were furloughed. We don't have time to go back and collect all the information.
- [119:17]
Joe Wiesenthal
I think my impulse is that the simple explanation is the correct one. That due to the timing of the shutdown, the duration of the shutdown, it's like unrealistic or something like that as opposed to something nefarious. If it, if there, if, if there continue to be more things, then okay, then we see what's up. But I would say this is probably pretty straightforwardly linked to the fact that, you know, the government shut down. Yeah.
- [119:45]
John
I'm also going to tell you about FIN AI AI that handles your customer support. The number one AI agent for customer service. Our next guest is Director Michael Kratzios. He is the 13th director of the White House Office of Science and Technology Policy and it is great to have him here with us on the show today.
- [120:03]
Jordy
One of the best call in setups we've seen.
- [120:05]
John
You look fantastic. Thank you so much for taking the time to talk to us. How are you doing?
- [120:10]
Michael Kratzios
I am great. Thank you guys so much for having me. I have followed your meteoric rise over the last year. I feel like I should have been on the show much earlier.
- [120:19]
John
Yeah, we would have loved to have you, but we're very happy to have you today because there's massive news but I'd love for you to introduce it and actually set up the conversation. So please take us through the announcement and then I'm sure we'll have a ton of conversation and questions to go through.
- [120:37]
Michael Kratzios
Yeah. So I think maybe we can start with the AI action plan that the President signed out in July of last year. And one of the main themes of the AI action plan, essentially to win the AI race is all about how we can win in scientific discovery. And the question was, like, how do we do that? What's like the next chapter of using AI to drive scientific innovation in our country? And yesterday the President signed an executive order launching what is known as the Genesis Mission. And I think for a lot of folks that you guys talk to every day, you know, this, you know, AI has had this incredible rise over the last couple of years. It ultimately started first with large language models themselves. And those are where we scraped the totality of knowledge on the Internet and were able to then create these models that can predict all sorts of things, the next word, if you will. The next phase of it was all around coding. And you've seen these great startups that are incredible at coding. Some are huge. Model builders are awesome at coding too. But the big question that still remains is how do you apply this large language technology to scientific endeavors? How do you use it to be able to create new materials? How do you use it to create new microprocessors? How do you use it and tap it into all of this exquisite scientific technology and hardware that exists all around the world? What the Genesis mission tries to do is to bring all of the super valuable, important data that the national labs have collected over the last 70 years and put it to use to train large language models to be able to dramatically, when I mean dramatically accelerate the pace of scientific discovery. So this is, I would argue, and I've said it before, and I'll keep saying it, this is going to be the single largest marshaling of the federal resources of scientific discovery since the Apollo program. So we're thrilled to kick it off and DOE is going to be the home for it.
- [122:22]
John
Talk to me about the relationship between the public sector and the private sector. I feel like a lot of folks in our audience have said thank you for your service. We loved darpa. We loved when DARPA created the Internet. We loved gps, we loved the moon mission, but we got it from here. We invented the transformer at Google, we invented SpaceX and the rockets that go up and land. And we think private industry has it handled from here. On the research side, we don't need anything from the government. How do you think about. About, is this just a misconception and we actually need more original new ideas, research in a government setting or is there more of a public private partnership that you think will play out here?
- [123:05]
Michael Kratzios
I think it's definitely More of the latter. I mean, the reality is that when some of the initial projects were launched in the 1950s, you think of the Manhattan Project. That was an era where the vast majority of research and development, United States was paid for and funded by the federal government to the tune of almost 70 or 80% of it was funded by the federal government. Government. If you zoom ahead, sort of the 70 years that we are where we are today, the vast majority has done private, private sector. You know, generally the United states spends about $1 trillion a year on R&D and about 80% of it today is done by the private sector. Now, that being said, there is a critically important role for the government for the government to play in that larger ecosystem. And it truly is an ecosystem. You have to have private sector, academia, and the federal government all working hand in hand to sort of make the very important basic research breakthroughs and ultimately commercialize those. And the secret and the sort of unique, special thing about the Genesis mission is the scientific data sets that exist at the national labs. This is a unique asset that is so valuable to the American people and to all of a scientific enterprise in the United States. And the bottleneck, as you guys know so well, in so many of these AI endeavors is how do you get the right data to train these models? And for the early large language models, the data was just out on the Internet. You could use common crawl and scrape it for the world of coding. You had lots and lots of coders and lots and lots of material that you could use to train those coding models. But for science, it's not that easy. You have silo data, you have pharmaceutical companies that have pharmaceutical related data. You may have chemical companies that have chemical related data. But what's so special about our national lab ecosystem is that it covers such a diverse and broad range of scientific endeavors. You have biologists, you have material scientists, you have key, you have people who are working on space, all in the same national lab infrastructure. And that depth of data is so incredibly powerful in order to accelerate scientific opportunity and endeavor. And kind of that's what the Genus mission is all about. And to your point about private sector involvement, the thing that we have been so excited about is the private sector is clamoring to be part of Genesis mission. We all are in this together. There's a desire to pair the incredible supercomputing infrastructure and the GPU capacity of our greatest chip companies with the great data sets we have at DOE and everything in between.
- [125:20]
John
Yeah. Can you help me understand a little bit more how A lab might actually plug into the Genesys mission because we've seen a lot of the labs say, oh, we want to start working on science. Some of the labs have already, I mean, Google has a Nobel prize, right for AlphaFold. Does that look like them interfacing directly with the DOE or going through a lab or how does that take shape? Do you, do you think?
- [125:48]
Michael Kratzios
So what DOE is ultimately the Department of Energy is going to be creating is a platform for scientific discovery. And there we're going to be making available the very valuable scientific data sets that can be used to run these large language models for science. And as we've seen, OpenAI had a nice tweet thread about sort of this project and how excited they are about it. We've seen lots of other companies already pursue this, Google of course, with, with, with AlphaFold and the Nobel Prize that they've won there. So what we're seeing is all large language model builders or labs themselves want to partner with the Department of Energy so we can work hand in glove to accelerate the scientific discovery. The key is how do we just zoom out a second, think about how do we 2x the ability of us to very quickly iterate on scientific experimentation? So right now, if you have a hypothesis and you want to test it, how do we make that 2 or even 10x faster? How can we make it so that if we have an idea, we can send that idea to an AI powered cloud lab and the test can be running, run behind the scenes. They were working on a second project. So that's this sort of like big level thinking that we want to do to dramatically, dramatically accelerate the velocity and pace of scientific discovery.
- [126:56]
John
Can you help me understand how you think the United States is positioned geopolitically against our near peer rivals? On the issue of AI in science, I'm pretty, I feel like I'm relatively up to speed on, on just the general capabilities of American image models versus maybe Chinese image models or deep SEQ versus GPT OSS and the LLAMA models. I kind of know where we're standing in just the general industry, the industrial uses or the general uses of these LLMs and the AI models that are coming out of America and China. How are you thinking about America's competitiveness on the science and research sector side?
- [127:39]
Michael Kratzios
So we're in a lot earlier innings of that. That's a really good question. And I think what's unique about sort of AI for science is it has to pair this exquisite scientific physical infrastructure with the models themselves. So if you want to drive scientist discovery, you have to be able to pair what's coming off of telescopes, what's coming off of lasers and all this stuff, to be able to match them with large scale language models, to be able to accelerate that loop. And we're still in the very early innings of it. And in order for us to do, in order to sort of outpace and continue to keep our lead, like we do have in some of these other places, is we have to do something like the Genesis mission. We have to wake up a country and say, like, look, where do we have the most valuable scientific data sets and how do we make those data sets available to our model builders to be able to create the necessary tools to pair the data coming off these exquisite scientific instruments back into these AI models. And like, think about it. For us, we want to win on fusion, for example. So for fusion, Google's already doing this, but there's a ton of companies around the United States that are very heavily funded that all have lots and lots of experimentation they want to do with these fusion reactors. The ability for us to be able to accelerate the modeling of that through the Genesis mission, rather than each individual company having doing this on its own, can be really, really dramatic. So back from a pacing standpoint, I think the US has all of these amazing instruments. It has the labs, it has the great private sector together. And what the Genus mission tries to do is bring that together in a way that's like truly American, where each of us is part of the ecosystem, can play the important role that we're best at with obvious sort of commercial goals in mind down the road. And that's what's sort of driven this great discovery we've had for years. And I think we're going to continue to see that in the years ahead.
- [129:22]
Jordy
What, what role does academia play as part of this project, in your view?
- [129:29]
Michael Kratzios
So I think for us, academia has always played a very important role in pursuing early stage, basic, pre competitive R and B. As we think of all of the most critical areas of scientific endeavor, whether it be in materials or in chemistry, or in mathematics or in physics or science, there is still a critically important role in that early stage discovery. Science and academia can play a very important role there. They're the ones that have these theses and these ideas, these hypotheses to solve some of these very early fundamental problems that can ultimately unlock great commercialized solutions in the years ahead. So academia and universities are and do want to be part of the Genesis mission. There's an important role for A lot of these departments, professors and thought leaders to be part of it and to introduce their ideas and concepts of things that they want to test. What ultimately Genesis is going to do. It's going to create up to 20 grand challenges on some of the biggest scientists, scientific problems we face today. And we're looking for everyone. You can be in academia, you can be in the private sector, you can be in your garage, wherever you are, we want you to come with the best idea on how to solve those and be able to leverage the great infrastructure that the federal government has at its labs to solve those.
- [130:38]
John
How are you thinking about AI risk these days? I feel like we've been on a total rollercoaster from sci fi paper clipping scenarios to, to some very real geopolitical competition and issues with people maybe using these models too much, going somewhat crazy. There's been a wild ride that I think everyone's been on and I'm interested to hear how you think about AI safety these days. Is the nuclear analogy the most important? Is this a Manhattan Project? How do you think about the role that the US government should play in the AI safety discussion?
- [131:17]
Michael Kratzios
Yeah, you know, I think as I kind of look back and think about how the early conversations were when some of the big model lab builders came to, you know, came to Capitol Hill and, you know, talked about wanting to create kind of an IAEA for AI, I think it, I think honestly it set the wrong tone and I think it set sort of the industry back for a while. And I don't know how much you guys track sort of like global politics of AI policy, but for a good two years there, I think that sort of discussion on the, on the global stage was, you know, what are the worst possible things that I could possibly do for the world? And let's try to like figure out if we as a collective, you know, world can find some sort of a global solution to solving it. And obviously that's kind of the wrong approach and everyone's backed away from it. You know, the UK themselves that were kind of touting their big, you know, UK Safety Institute have renamed it the Security Institute. We as the Trump administration, you know, renamed the AI Safety Institute or Department of Commerce as well and kind of moved in a direction of innovation and adoption versus sort of this nebulous, catch all safety term. But I think to me, one thing I always think about and we always have to balance is, and maybe it's a little personal, but to me, I recently became a father in July and I think a lot about the way that my child is going to grow up, the way that he is going to interact with this particular technology, the way it's going to impact not only the way that he grows and learns in school, but also the types of jobs that he's going to have and how he's going to enter the workplace workforce. And I think there are very credible and like, real things that the American people are thinking about, about how this technology can be best used to improve their way of life and ultimately help them live a better and more fulfilled and more rich life. And we at the White House are, are all about finding ways to encourage adoption of this technology. And in order for that to happen, we have to have the trust the American people. And trust is kind of part and parcel of everything we're trying to do. Whether we're building out, you know, AI for educational reasons, or to improve the amount of energy that we have in the United States, or solve the biggest health crisis that we may encounter in the future, we want to build that trust. So when these solutions are coming about because of AI, it's embraced and it's something we worry about and think about a lot. And it's something that a lot of our standards agencies are thinking about. How do you promulgate the right standards so that when these technologies are put into all these different industries, people trust them?
- [133:40]
John
How are you thinking about job displacement at this point? The models are so incredible. They're smarter than me at everything, and yet I haven't actually been able to drop them in as a co worker right next to me.
- [133:52]
Jordy
Every day we try to replace Tyler. We say, tyler, replace yourself. He's just too good.
- [133:58]
John
But there's still an ambient level of anxiety that something's coming. And so I feel like you do need to be prepared. You can't really write it off entirely, but I'd be interested to hear about how you're thinking about the goals that you could even set around transitioning people through jobs, how you think about the AI job relationship.
- [134:19]
Michael Kratzios
There's a couple of things. The first thing is about AI education. We have to prepare the future American worker to be able to fully leverage this technology when they enter the workforce. The President signed an executive order in April of this year which, where he prioritized K through 12 AI education. The first lady has gotten very excited about this endeavor. We're running something called the AI Presidential Challenge, which is a challenge that we're rolling out across the entire country, where we have students from all 50 states participating in it, and ultimately is Going to culminate in a, in a sort of competition here at the White House. And at the end of the school year, we can show kind of how students are using AI to solve some of the biggest challenges they face in.
- [135:00]
John
Their local, like the presidential fitness. I used to have to run a mile and touch my toes. And now, now you have to use AI.
- [135:06]
Michael Kratzios
You got to program some AI. Exactly.
- [135:08]
John
That's actually great.
- [135:09]
Jordy
That's presidential Vince.
- [135:14]
Michael Kratzios
But I do think it's important because at the end of the end, and I think the velocity of change that you see in how education is thinking about AI is so interesting to me. It's kind of like, and if you guys Even remember, like two years ago when ChatGPT first came out, every university out there was essentially banned. You weren't allowed to use it. You were like, you know, violating the honor code if you ever like turned on ChatGPT. And now there's no college student in the country that doesn't use it. So I think that the pace of change in how these models are being used in education is just so, so dramatic. And we have to get in front of it because what we think an 8th grader is going to be doing with AI when they enter the workforce, it'd be very, very hard to predict. So what we try to do mostly in The K through 12 space is not necessarily teach kids how to leverage this technology, but teach them about how the technology works. The term that was used in the executive order was demystified. Like teaching both children and teachers like, where does it work well? Where does it not work well? Why is it answering questions like this? Why does it hallucinate? Why does it not hallucinate in these cases? And I think the more people understand the technology they're dealing with, they'll be able to leverage it much, much better no matter where they end up in the world.
- [136:23]
John
Yeah, I absolutely love that because I feel like the, I mean, we talked about this with the GPT psychosis thing. There's a very big difference between understanding that what you are chatting with is a robot is a bunch of math and just being mystified by it. And the same thing with, you know, at some point every parent needs to teach their kids that, hey, the explosion in that movie, they didn't actually blow up the house. You know, they didn't. That's a cartoon. And now you also have to do that with AI generated images.
- [136:53]
Jordy
Something I noticed this was a major AI related announcement. Did not have a, I searched command F for a dollar sign. Didn't find it. Is that intentional? Is that like part of your focus of, hey, the government can catalyze the right sort of like progress and activity without just being a capital provider? We've seen so many announcements from this year that are really just fixated on the biggest number. And this feels like unlocking the sort of potential within the existing ecosystem that's not being properly utilized.
- [137:33]
Michael Kratzios
Yeah, for the Genesis mission, I think Congress actually appropriated some money to the Department of Energy this summer in some legislation that passed to drive some of these AI related efforts. And we've used that as kind of the down payment on kicking off this program. I think what you're going to be seeing in the next couple of weeks, which is, which we're really excited about, is commitments from a number of large private sector players on what they are contributing and donating to the Genesis mission. And I think what's key here is that what makes the American innovation ecosystem so unique is the ability for us to bring all pieces of the ecosystem together to drive innovation. You have one part academia, one part private sector, and one part federal government. And the reason why, and the feature about the US Innovation system that allows us to be so successful and have been the home for the greatest scientific and technological breakthroughs the last 200 years is that free market approach to innovation. And I think that's what the Genesis mission brings together and sort of highlights in the best way possible that we are in this together with all pieces of the ecosystem working together.
- [138:37]
John
There's been a lot of worry about going too far, doing too much AI, too, too aggressive about the build out, too much debt. There was this back and forth about the backstop. David Sacks, of course, said, we're not considering that. But have you thought any more about what the role of the government is in moderating the amount of sort of private sector AI buildout and how that should even interface with the government at all. What is the framework that we should be using?
- [139:09]
Michael Kratzios
I think we are very focused on removing federal barriers to folks that want to participate in the AI revolution. And for us, what we see is that if private markets and if capital markets are allocating dollars in a direction that say, like, look, we believe that we will be needing this level of compute to drive our future AI demand. We want to make sure that the bottleneck to that deployment isn't some federal rule around permitting and allowing these things to be built out. I have faith in the way that the capital markets are allocating dollars right now. And I leave it to those capital allocators to make the best decisions possible for that capital. What we want to make sure is that we are not an inhibitor to innovation, that some arcane rules about how and when you can build some certain facility in a particular place are not the reason why the data center we really need isn't built out. And that's kind of, that's the role that I think the federal government plays. And one of the three executive orders the President signed the day that the action plan was released was all about this. How do we get the federal government out of the way to allow the build out of these as quickly as possible?
- [140:18]
John
Yeah, what about the, like going deeper in the stack? Obviously there's been news around Intel. There's, there's a very rational reason to understand, prioritize having American control of the entire AI stack. How has your thinking evolved on just this idea of having full control over the supply chain in America? Is that something you're spending time on or you're thinking about or your thoughts have evolved on?
- [140:50]
Michael Kratzios
We are, I mean it's so critical. Back to the great day in July when we signed all of our executives executive orders. The third executive order was all about exporting the American AI stack. And I think, you know, if we rewind, you know, into Trump 1. When I was the CTO of the United States at that time, one of the challenges that I faced was traveling all around the world and trying to convince governments that they need to rip and replace their Huawei infrastructure. And at that point, you know, I think there was a big lesson learned by me and by a lot of people who served in 45 about what are lessons learned from that experience in that moment. The PRC had a technology that was good enough and was priced very reasonably, whether it was for subsidy or who knows what. But it was priced reasonably enough where everyone wanted it and ultimately was deployed for a big technological shift with 5G. Now, if you fast forward to where we are today, this next phase of AI AI is orders of magnitude more important than the 5G rollout right now. Governments all around the world in here, in a few, in very few short years, will all be running some sort of AI stack. They will be having some sort of chips that will be running some sort of large language model. And on top of it, there'll be important critical national applications. Everything from the way that hospitals are running to, to the way the tax is collected. And we want to make sure that the US is the partner of choice for that AI stack. And right now we're at a great spot. We have the very best chips in the world and we have lots of them. We have the very best models in the world and we have a competitive ecosystem that it seems like every other week they're leapfrogging each other. Then on top of that, we have the best applications in the world. We are so committed to exporting that stack. We want to create something that is so compelling and so exciting for governments and people all around the world that they will want to use our technology. And that's what we are building here at the White House, our partners at the Commerce Department and at the State Department to get that exported all over the world, from South America to Africa to Asia to anyone who wants it. Because we believe that the same benefits that all Americans are going to realize because of our great technology, we want to share that with the world.
- [143:09]
Jordy
Yeah, Final question, little bit of a wild card. I'm curious, are you thinking about humanoids as a category? I've been really concerned that we're going to repeat what happened with dji where we allowed a company to basically destroy our domestic industry and flood the country with cheap, very good, very good drones, but cheap drones. And I worry that. I think you can buy a unitree robot on Walmart.com right now. Now it's not a concern today, but if we allow the country to be flooded, I would be very concerned about it in the future. And I'm curious if it's on your mind at all.
- [143:52]
Michael Kratzios
It is actually. It's funny you say that. We were just actually speaking about this week with a number of my colleagues. I think it is challenging. I mean, there was a large, well known, top sort of shelf research university that I saw one the of their, one of their magazines that they published and there was, and they were like advertising kind of how great they were. And on the front of it was like, you know, two unitary robots. And I was like, come on guys. Like, honestly, like we can do better as a country. You know, we have been the home for Boss Dynamics for, you know, over, over two decades. And I think to me this is an opportunity where, where we should think about it in terms of the larger AI stack and if you start building from chips all the way way up, you know, the ultimate manifestation of all this is where a lot of these ultimately robots play out. It's this marrying of the physical infrastructure with, with the digital itself. And I think we do a lot more as a country to be able to propel that industry forward, to make it economical for the adoption to happen. And it goes back to something I talked about earlier. It's a lot about trust, you know, and I think there's, you know, if you think about kind of the dynamics oftentimes in the global marketplace, funny enough, the Europeans tend to be a lot more, more. A lot more quickly, quick adopters, early adopters, a lot of this technology just because of, of the issues that, that, that, that they have with some of their, some of their workforce. So I think for us, we want to create an environment where we can build these robots into our economic growth plans here in the US and think very critically about the way that, you know, we want safe, secure and trusted technology used by Americans in America. And if we see, you know, foreign companies, companies that are not safe, trusted and secure and are compromised, there's lots of tools that we have in our arsenal to protect our ecosystem from it. And the US Government, for example, banned DJI for use by the federal government. Then there's lots of other examples like that.
- [145:45]
Jordy
Yeah.
- [145:45]
Royce Branning
Okay.
- [145:46]
John
Actually, last question. Do you fish? What's the biggest fish you've ever caught? We'd like to ask that to everyone that joins the show.
- [145:52]
Michael Kratzios
Oh, man, I thought that was coming. I actually do not fish. So if you guys ever want to take me fishing.
- [145:57]
Joe Wiesenthal
I don't think.
- [145:57]
John
I don't.
- [145:59]
Jordy
I haven't either. So we can, we can go together and figure it out on the fly.
- [146:03]
John
Yeah. Yeah. Well, thank you so much for taking the time to come talk to us on your birthday. Congratulations on the Genesis mission. We're very excited for this and have a great Thanksgiving. Happy Thanksgiving.
- [146:13]
Jordy
Happy Thanksgiving, you guys too.
- [146:14]
Michael Kratzios
Let's do this again soon.
- [146:15]
John
See you.
- [146:16]
Sebastian
Absolutely.
- [146:16]
Jordy
Cheers.
- [146:17]
John
Let me tell you about profound. Get your brand mentioned in ChatGPT. Reach millions of consumers who use AI to discover new products and brands. Let me also to tell you about TurboPuffer, serverless vector and full text search built from first principles on object storage. Fast 10x cheaper and extremely scalable. Founder mode is right. We have Sebastian from Klarna in the Restream waiting room. We're going to bring him in to the TVP in Ultradome. How are you doing?
- [146:40]
Jordy
Great to see you again.
- [146:41]
John
It's been too long.
- [146:42]
Jordy
The last time we hung out, it was just another day at work for you. You just stopped by. Nice. You did your IPO and you jetted back home. But it's great to be back.
- [146:53]
John
Yeah. Kick us off with a review. What's it been like being a company CEO for a couple months now?
- [147:01]
Sebastian
Well, we said to ourselves on the management team, like, we're never going to watch the stock price, never ever. And then every day I was like, what?
- [147:08]
John
Why did it go up?
- [147:10]
Sebastian
And then somebody came to us, guys just like put yourself next to all the other stock and like, oh yeah, it's moving the same way. Got it. Okay.
- [147:17]
John
Got it, got it, got it.
- [147:18]
Sebastian
It wasn't just us.
- [147:18]
John
Yeah, makes sense. Well, big news on Tuesday day today. Please break it down for us. What's the news?
- [147:30]
Sebastian
No, I think it's, you know, I think I was, it's kind of funny because I like about a year ago I was like giving crypto a second chance and I was always like, you know, I was a little bit of the, on the skeptic side over the years partially. It's because like I was. My lacmus test is like, how is this going to help my mom?
- [147:46]
John
Right, Totally.
- [147:47]
Sebastian
And, and as much as like I'm getting excited about like financial revolution, you know, kill the central banks or whatever.
- [147:53]
John
Sorry, I shouldn't have said that.
- [147:54]
Sebastian
I'm going to re quot you know, bring financial liberty to the world. That's the way and those things. The point is that like that doesn't get my mom much excited. She's like, what, can I just pay cheaper or can this be faster? Like, she doesn't really care that much about it.
- [148:10]
John
The noise in the industry was insane. I mean it was so many just regulatory arbitrage moments. So much just like fraud and grift and also just like pumps and dumps and all sorts of just like memes and things that weren't outright frauds but had just like, but the potential was always there. There was always a little bit and.
- [148:29]
Jordy
The technology was always there and it was in. And I'm sure, I imagine I'd love to understand how your thinking evolved on stablecoins over time because back in 2021.
- [148:42]
Sebastian
What happened was some close friends of mine called Sequoia said like Sebastian, you.
- [148:49]
John
Really have to take a second look at this.
- [148:52]
Sebastian
And I was like, okay, fine, I'll do it. And they introd to some amazing founders among among them Bridge that we now partner with. And so I gave it a second chance and I listened to the stories and I realized, yeah, okay, so I've been wrong. Technology has now moved ahead. It's now fast, it's now efficient. It actually solves real, real problems. And so we, and then I wrote that on X and I was like, nobody's going to care because we're like, we're the last fintech in the world.
- [149:21]
John
It's not going to make it any.
- [149:22]
Sebastian
News but it was surprising like I think over a million people views on that on that post and since then we've been just working hard on like how do we integrate this into our stack and what can we do? And today we announced that we're doing the Klauna stablecoin which is one of many things which we're doing with Bridge and Tempo which is together with Stripe and the team over there. So that's really exciting but obviously there's more to come. It's just that like, like we're testing the waters and trying out what will work for us.
- [149:53]
John
So yeah, walk me through what the first few implementation points look like. If I'm going and I'm paying and I'm on a checkout page right now, I can check out with Klarna. At what point do I actually interact with Klarna Coin the stablecoin when does it actually come into the work workflow?
- [150:15]
Sebastian
So so far the start of this actually is just that like we obviously want to bring these services to the benefit of our consumers and in their day to day you know, using a Klarna, I mean we have a big NEO bank ambition, right? And we have over 100 million users worldwide but most of them will only use us for a single transaction. Thank you. Sometimes it's like, you know, a lot of nodes buy now, pay later but actually over 20% of them are debit where people pay the full amount of as well. So it's a mix. And now we're trying, you know, we're trying to offer ourselves more advanced services, more NEO bank services. Right? So we have our card. It's pretty cool. Like you know, we are now 3 million active card holders. A quarter ago we had zero in the US so exactly. I'm going to drop a lot of.
- [151:03]
John
Numbers, I'm going to get a lot of beeps.
- [151:05]
Sebastian
So that was like, so that's been great but obviously we want to add peer to peer, we want to add the ability to send money and so forth and then we've been looking at different solutions. But what's interesting I think here is that like even though that's the natural next step of offering using stablecoin for that because it's a very efficient way to send money fast and at low cost. We also actually realized that look, I mean we're processing over $100 billion worth of volume every year and we move ourselves quite large money between the US and Europe and so forth and this may actually be very efficient even for our Treasury Department to use as a way to move money. Right. So we've seen that there's a tremendous number of use cases, maybe more than we realized when we started looking into it. That's exciting. And that can drive anything. That obviously drives our efficiency will also allow us to offer services at lower cost and more value to our customers.
- [152:01]
Jordy
Can you break down specifically what's happening at each kind of level of the stacks? So you have Bridge, which is, from my understanding, the infrastructure that you're using to actually issue the token. Then you have Tempo, which is the blockchain in which you'll be moving it around on. And then you have obviously the product layer, which is the interface that consumers will use to move around. Is it usdk? What is the ticker?
- [152:31]
Sebastian
I think it's usdk. I think you described it pretty well. I was like, thank you. That's a good summary.
- [152:36]
Jordy
I'm not sure because I'm just trying to understand. And then you also have. There's a corporate treasury use case where you're saying you could use the same token internally as well.
- [152:47]
Sebastian
Yeah, I mean, yes, exactly. I think also then people discuss a bit on the merchant side, but the truth is that we mostly today distribute through Stripe and Adyen and the big psp. So most of the kind of merchant relationship happens directly with them. So to us it's mostly what we can do on the consumer side. But I think there's more opportunities. I mean this is just, just like again, people think like, oh, why did you do it this way and not that way and why didn't you use Solana or Ethereum and why didn't you, you know, whatever. And what about Bitcoin and so forth? And to me it's like, yeah, but come on, this was just like one first thing that we now announced and obviously we are working on more things and we want to utilize these technologies to more use cases. And we have more things, but we are not yet to announce them and talk about them. So more to come.
- [153:30]
John
Fantastic. Last question from my side. Who do you think is or what. You don't need to say a name of a company, but like. What type of player in the financial industry loses out most if stablecoins really take off? It feels like at a certain point we're just shifting take rates around. There's a lot of different, different transfer services that could benefit a lot from higher speeds and lower fees. Seems like consumers could benefit a lot. But do traditional payment rails suffer? Do governments suffer? Like what. What category really needs to be on their back foot right now.
- [154:15]
Sebastian
To me it's really, and I actually talked about this a little bit on our earnings call as well, is that I actually think, like to me I put the whole crypto thing in this wider AI change that's about to happen. Right. And if you look at it, both fin and tech have been extremely inefficient market, which is why you've seen the excesses in profits and excesses in, you know, as I, as I quoted there, like, you know, the gourmet cafeterias used to be called culture and now they're going to be called overhead. The point is that like there's been this huge success because there hasn't really been that strong competition. And why has there been lack of competition? Goes back to kind of classical microeconomical theory which states that if it's hard to compare two products, if too many legal terms that are hard to understand and so forth, then people will be fooled and will take products that are less good for them. AI and new technologies brings a fantastic amount of transparency. You can just ask, compare these insurances, compare these banking products, what is the best one? Compare these credit products. Which one is actually the best one for me. So that's going to change. The second, second thing is the major one which is very connected to crypto is switching costs. So the big reason banking isn't more competitive is simply because it's such a hassle to move.
- [155:30]
Joe Wiesenthal
You know, like I want to bring.
- [155:31]
Sebastian
All my stuff from this bank to that bank.
- [155:33]
John
Yeah.
- [155:34]
Sebastian
And people just don't have that energy. Right. Like you don't have the energy and all the accounts and the salary coming in and all that stuff. Right. So what happening is with technologies like crypto with AI and the combination of that, what you're going to see is you're going to see switching costs coming down to almost zero. It's just going to be much easier to move between different services. And it's just going to put this massive competitive pressure on this industry. I mean financial services make over $500 billion in profit. That's the profit pool that we're after. And then tech and advertising and tech is another $500 billion. That's a trillion dollars in profit, profit pool. And so what I think is going to happen is you just like if you are willing to be customer obsessed, efficient and with efficiency, operational efficiency, crypto plays a role because it can help you be much more efficient, you can move faster at lower cost and so forth, then the players who take the advantage of these technologies are going to make a massive dent. And the benefit I believe, and you can call me naive or you, it can call, call me optimist, but I believe that the value of this is all these excess profits that we see in banking, they're going to come back to consumers. They're just going to make, consumers are going to pay less for higher quality services. Some financial institutions will lean in and they will transform themselves and they will be more customer obsessed. There will be less marble offices, less beautiful buildings and all that stuff. And there will be more of just waking up every morning, morning just like a restaurant or any other business for that sake where you actually wake up every morning you're like how do I bring my customers in? How do I make them happy and how do I run my business? So I'm operationally efficient. Right. And that's a huge difference. And I think crypto plays a role in that. So I think that's what's coming for fin and tech. And if you're willing to be that customer obsessed and run those operational efficiencies and be smart and use these technologies, there's obviously tons of opportunity of growth and you can build trust with your customers, customer base. But if you're going to sit there and still continue making the kind of profits you are today and think that nothing's going to change, well, eventually you'll wake up, right? Just like you know, whatever airlines did when low cost airlines came in, you know, we've seen this over and over again. Or like carriers, when the low cost carrier things came in like it's happened before, right?
- [157:48]
John
Yep, absolutely. Well, thank you so much for taking the time to come chat with us. We will talk to you soon. Have a great rest of your day.
- [157:54]
Jordy
To get the update.
- [157:55]
Sebastian
Thank you.
- [157:55]
Jordy
Good to see you. Talk soon. Cheers.
- [157:58]
John
Before we bring in our next guest, let me tell you about public.com investing. For those who take it seriously, they got multi asset investing and they're trusted by millions. I'm also going to tell you about numero.com. let Numero worry about sales tax and VAT compliance. Compliance handled so you can focus on growth. We have David from 1Password in the Restream waiting room. Now he's in the TVPN. Welcome to the stream.
- [158:23]
Jordy
Welcome back.
- [158:23]
John
We have a big update for you. Since you came on the show last time, we onboarded the whole team onto 1Password.
- [158:30]
Jordy
John and I were, we were using it individually. There were some passwords being stored in the notes app. We corrected that.
- [158:37]
John
Yes, yes, yes.
- [158:38]
David
I'm glad I was able to shame you into action there.
- [158:42]
John
So yeah, this is real like customer development, getting your hands dirty, rolling up your sleeves. You go on the podcast with 10 employees and you physically tell them download my app. And it worked. It worked.
- [158:56]
David
One customer at a time. Thank you again for your trust, both with your business and your personal life.
- [159:00]
John
Yeah, we're very happy. It's been a huge upgrade and I think it's gonna sail to being a valued piece of infrastructure in this organization for many years. But we're also very excited that you've been on a tear. Your business is doing better than ever. Give us a little update. What's new in your. Your world?
- [159:20]
David
Yeah, so you know, we, we had a little announcement just to refresh some of the statistics of the business. So a couple weeks ago. So we are over $400 million of ARR and we're.
- [159:30]
John
There you go.
- [159:32]
Jordy
Love it. The spinning hit, spinning head.
- [159:35]
David
Grown to that level profitably all the way from inception, which is really cool. You know, durable growth profile and we continue to be very profitable. We now we're known as a consumer app for. For a long time. But now nearly 80% of our business is selling to business customers. 180,000 business customers use the product 180,001 now because of you guys. So thank you for that. And you know, we support over 1.3 billion credentials that are. That are managed in our system and we have, you know, over a million developers using the product. So, you know, we feel really good about the trajectory that we've been on. We've also in that announcement, we also announced that we've added to the team so we've got new leaders driving ecosystem and the revenue side of the business enhance the tech side as well. We're really just setting ourselves up for the next chapter here. And as we chatted last time when we were together, we just see the opportunity around AI is really something significant for us and we're going all in.
- [160:31]
John
Yeah, I want to talk about that because it feels like there's. Is there a fight coming because credential management on the. The developer tool chain side, the API keys, that's traditionally been a completely separate industry, a completely separate. I don't even know if you guys run into each other at industry conferences. It feels like a very different world. One's a developer tool, one's a consumer tool that you use with your family, then maybe you wind up using it at work. There's single sign on, there's all sorts of different ways to manage credentials, how much are they blurring? How quickly is this happening, happening? How are you thinking about setting yourself up for the world where. I mean, Sholto from Anthropic was on the show yesterday saying, we're creating a.
- [161:16]
Jordy
Co worker, digital coworker.
- [161:17]
John
Sounds like a digital co worker who needs some passwords every once in a while. How are they going to get it?
- [161:21]
David
Absolutely. I think, you know, the traditional identity systems that have been siloed and sort of different parts of the pretzel and really hardwired into big enterprises over the years, they don't really, they're not set up to support this federated dynamic environment where applications spring up, up and agents need access that are very, very specifically scoped to what they're trying to accomplish. And then they need to be sort of tracked and managed and many times revoked. And so that system of identity and access management really doesn't exist. And we're in really good position to support that. And we're doing a bunch of things already to help people use AI tools securely. I'll give you a couple examples. So we were a launch partner with Perplexity's Comet browser. I'm not sure if you've seen that. But then shortly thereafter, OpenAI and ChatGPT Atlas came out and immediately both they, and we got besieged by a customer saying, I need to be able to use 1Password with Atlas. So we got on the phone with them and we, we started working together with them and quickly we made one password available as a browser extension on, on Atlas with a little bit of a workaround. And then just today we announced the release of a fully optimized, you know, onboarding experience, optimized for the, the, the workflow experience and the Atlas browser as well. And so what we learned is like, look, customers, they want to use these tools, but they want to be able to use them safely and securely and they want to be able to have trust. So that's what we've always been about, is bringing that trust to the table. And so we'll be wherever our customers need to be. Last time we were talking about the headless browsers around a browser base. But like with Perplexity and Atlas, you know, our customers want to be able to use these tools without having to give their credentials over in raw form. So that's one aspect of it. The other is what's really interesting is, you know, we're moving from applications being developed by software engineers to being developed by everybody. And it's amazing how much of the agentic applications that are being created are not necessarily by, by software developers. And so it's great, it's very powerful. The whole organization can figure out ways to leverage it. But again, if you need API keys to be part of the, you know, in the environment that you're, you're building, or SSH keys, you need to be able to actually have those things secured. And so our developer tools, they sync with AWS Secrets Manager at runtime, they allow you to put a pointer to environment file tools that we build so that your credentials are always encrypted, end to end, fully traceable, fully revocable. And so that's the beginning of what you'll see. And then where we're going from here, discovery of agents, governance around it, how does it interact with observability systems? There's a whole green field of things there that we're really well positioned to participate in and really help define the standards. So, you know, we're going for it. It's a very exciting time.
- [164:01]
John
How are you thinking about resiliency? Do you have any tips for folks building, you know, mission critical systems these days? It feels like we were fighting outage with AWS. At one point Cloudflare went down. We don't, don't have nearly the resources that you do, I'm sure. But what tips and strategies have you used? Because I feel like you're definitely going to hear if one password goes down. Right?
- [164:26]
Joe Wiesenthal
Yeah.
- [164:27]
David
You know, look, we are a Cloudflare customer, right? So our marketing site was down, our service wasn't down. So we're using obviously dual redundancy and failover procedures and we've got, got, you know, we come from a security centric approach. That's probably what's differentiated us from a lot of the other players in the space. Like security is job 1 and job 10 and like nothing else matters until we're sure that everything we're doing is at the utmost security. So we've got a lot of resilience built into the way we do it. But I think just generally people need to be aware like it, the threat profile is so much more hostile than it's ever been and it's going to get a lot worse. I'm sure you did a bunch of work on, on the, the disclosure that Anthropic put out around that. And it's not just, I mean anthropic, you know, as you know, they, they have like nation state level security, you know, enforcement, they have like bunkers and.
- [165:22]
John
All kinds of stuff that they got to worry about.
- [165:24]
Joe Wiesenthal
Right.
- [165:24]
David
Because they're, they're, you know, hugely a big target. But, but it's not just the biggest guys anymore. It's really, anybody can be a target because you can do really sophisticated social engineering, engineering at scale with almost no effort at this point. And it's going to get worse and worse and worse. So the number one thing that people you know will expose is, is weak credentials.
- [165:43]
Jordy
Right.
- [165:43]
David
So it's another really good spot for us. Like the credential, credential hygiene is more important than ever. So whether it's you're using Atlas and you're a 1Password customer, great. Make sure it's connected. If you're not a 1Password customer, you should go get it if you want to use Atlas.
- [165:55]
John
Right.
- [165:56]
David
And if you're a developer and you're building an application and you're not and you're hard coding credentials or SSH keys, et cetera into files, don't do it. Get a 1Password license, super easy to use, keeps you secure, keep everything ever locked up and you know, maybe we'll get another new customer out of this.
- [166:11]
John
Love it.
- [166:12]
Jordy
What's your timeline to a point in time where the average American on let's say a weekly basis will be sending an agent out to do something for them and the agent needing to actually utilize the actual login infrastructure of the user. I'm talking about imagining the workflow where my agent's doing something and I get maybe a 1Password push notification or I don't know exactly how the workflow would work, but saying hey, I want to do this, do you approve it or not? And then I hit yes, basically authorize the agent.
- [166:49]
David
So that's exactly what's happening with browser based, for example, in the headless browsers that we're doing exactly low friction user verification. So that allows you to keep things secured. Look, we're seeing tremendous uptick on the, you know, Atlas was a really, was a enlightening to see how many people are actually trying to sort of utilize the browser and have it do things on its behalf. Certainly the other partnerships we've had, we're so early days on it. But I think when we're going to hit this inflection point where people realize, I mean, I'm starting to see how valuable in both my professional and personal life the tools can be and just shortening my day and obviously, you know, I want to make sure I'm doing it securely. I think most people are going to be in that mode before we know it. And so we just want to make sure we're available for our, our customers when they, when those moments come so that they can do so securely.
- [167:37]
John
Last question. What's the biggest fish you've ever caught?
- [167:41]
David
Well, I'm more of a fly, I'm more, I enjoy fly fishing more than I do like deep sea fishing. You know, getting sick on a big boat and hauling.
- [167:48]
John
Yeah, deep sea fishing is the, is the ultimate hack. If you just want to catch the biggest fish right. It's not just going about and somebody else catches it and you really do.
- [167:56]
Joe Wiesenthal
Yeah.
- [167:57]
David
My son, my son prefers fly fishing so I, I, he likes to catch a big bass.
- [168:02]
John
Where, where is the best fly fishing spot?
- [168:05]
David
You know I, Utah.
- [168:08]
John
Utah. You like Utah?
- [168:09]
David
Utah and Montana. Utah fisher will smaller. Montana a little bit bigger but, but you know, two, two really good spots and you know just, just, you know.
- [168:16]
John
We'Re going to become, we're not, we're never going to leave this building but we're going to become fishing experts. We're never actually going to, but just through asking every guest a little bit more.
- [168:25]
Jordy
Eventually this would be a fishing show.
- [168:27]
John
I like it, I like it.
- [168:28]
David
Get yourself a guide.
- [168:29]
John
Go on a fly fishing trip.
- [168:31]
David
Take a weekend, go to Montana.
- [168:32]
John
You'll love it. Thank you so much for coming on the show.
- [168:35]
Jordy
All right, David, we'll talk to you soon.
- [168:38]
John
Let me tell you about Vanta Automate compliance and Security. Vanta is the leader leading AI trust management platform.
- [168:45]
Jordy
One thing that's cool back in 2019, one password raised from Excel and when they announced it they said Excel will be investing 200 million for minority stake in 1Password. And you don't see that positioning a lot but I mean it was a very minority stake. Obviously they put in about 200 I think at was it 200 on 1 or 2 billion, but anyways, absolute beast of a business.
- [169:19]
John
Well, up next we have Keller from Zipline. We're very excited to talk to him. There's some big news.
- [169:24]
Jordy
The Eagle himself.
- [169:25]
John
Yeah, get that ready. First I'm going to tell you about Figma. Think bigger, build faster. Figma helps design and development teams build great products together. And there's someone who built a great product with lots of talented individuals. Keller from Zipline. We'll bring him in.
- [169:42]
Jordy
Oh, I don't think he's ready yet, but we can go over, we can.
- [169:45]
John
Go to the timeline.
- [169:46]
Jordy
Yeah, we have a post here. Somehow. No, I'm gonna jump. Okay. Somehow. David Ulovich, former guest of the show, said, turns out huge swaths of the BS on this platform that claims to be from the US is all foreign. And then this heel quoted and somehow the A16Z account is based in Canada. I really don't, really don't know how this, this is actually possible. I want to see if it's been updated.
- [170:12]
John
I did check all of her accounts and I think we've been marked safe. I haven't checked actually. Most of the team. Tyler, I don't know, maybe just secretly.
- [170:21]
Jordy
I just know so many. I have so many friends at Andreessen. I don't know how.
- [170:25]
John
Why does Tyler's.
- [170:26]
Jordy
I don't know. None of them are Canadian.
- [170:27]
John
Why does Tyler's account say it's based in North Korea? I don't understand that.
- [170:30]
Jordy
I know.
- [170:31]
John
Have you been to Pyongyang recently? Is that where you're going over the holidays? Yeah. You said you're leaving. This is misinfo.
- [170:37]
Jordy
He goes, oh, I have a dentist appointment. I can't come in tomorrow. Back to Pyongyang for a little touch base?
- [170:42]
John
Yes. Yes. What happened with this meta whistleblower situation?
- [170:53]
Jordy
Adam Dell says, I'd love to see tvp.
- [170:55]
John
Well, you're not discussing this meta whistle.
- [170:57]
Joe Wiesenthal
You're not.
- [171:01]
John
But we have our guest here, so we will bring in Keller from Zipline. Welcome to the show from the floor. Fantastic setup.
- [171:08]
Joe Wiesenthal
How are you?
- [171:09]
Jordy
Best comms team in the game.
- [171:10]
John
Good to see you. How are you guys? We're fantastic. You look great. Give us some updates. Give us what is the latest news in your world. Various. Excited for everything that we've been seeing on the timeline. I want to go into all the jokes about what happens if you shoot one of these down. But first let's get the serious update. Let's get the serious questions out of the way.
- [171:34]
Keller
I mean, yeah, there's a ton going on. The thing we announced today is that Zipline just signed a $150 million contract with the US State Department. To triple double the size of our life saving autonomous delivery network across Africa. We're going to go from serving about 5,000 hospitals and health facilities to over 15,000. We'll add about 130 million people to the network who don't have access today. And the last cool thing about that is that that 150 million comes with up to $400 million of CO financing commitments from the African governments themselves. This is not just straight on the tax.
- [172:17]
Jordy
Yep.
- [172:17]
Keller
Yeah, exactly. This is actually like encouraging investment in this kind of infrastructure.
- [172:21]
John
Yeah. So was this delayed because of the USAID pullback? There's been a lot of like back and forth on how much the US would be investing internationally. What would be happening? Has the dust kind of settled there and there's now time to actually go do a partnership like you just did. What's the kind of State of the Union?
- [172:39]
Keller
Yeah, I mean, you know, obviously earlier this year that was like the first phase of a big shift in terms of how the US is interacting with developing economies. And I think this new vision that's now being talked about by the State Department of Commercial Diplomacy, the whole idea is let's not, you know, let's not treat these countries as charity cases. Let's actually treat them as allies and trade partners. And the good news is these countries have been saying for a decade that they want trade, not aid. They're sick of low quality services provided for free by NGOs. What they want instead is high paying jobs, entrepreneurs, entrepreneurship, technology. And the thing is like, that's what the US has to offer. You know, like we can, we can deploy AI and robotics infrastructure into these countries in a way that will save lives and kind of turbocharge their economies.
- [173:27]
John
So 150 million from the U.S. state Department matched with 400 million from the partners internationally. 10,000 health facilities. How many actual drones is that? How are you actually thinking about scaling your, like, what does this allow you to do? Are you, are you going to be staffing up, hiring tons of people? Is it just build another factory? Is it a dedicated factory? Like walk me through how you plan to actually use this money over however long you're planning to work on this particular growth initiative?
- [173:57]
Keller
Yeah, I mean, look, in a way this is coming at the worst possible time because as you guys know, the US business is growing really fast. We're in the middle of, I'm here on the manufacturing floor, you can see like Doc Electronics happening over here, here, Zip platform to zip manufacturing. And then if we were to go straight behind the camera, right now we're just opening up a new 100,000 square feet of manufacturing facility that will produce both the platform to technology as well as accelerate manufacturing. For this specific contract. The, you know, we're in total, this manufacturing facility is capable of building about 20,000 autonomous aircraft a year. And it's all happening in South San Francisco. So this is kind of, this is the cool part of this compact which is that, you know, this is not just a big deal for all these African countries that are now leading the world in terms of deploying autonomous infrastructure to save lives. It's also really good for the US because we are sort of securing US technology and manufacturing leadership for the decade to come. This is creating high paying jobs in the US and it's accelerating all of our manufacturing efforts here.
- [175:07]
John
Okay, let's shift to what's actually going on here. We've seen the initial partnerships that have rolled out. What have you learned most recently about or what has surprised you about the actual application of the technology? The adoption? Where are the underrated use cases? Beyond the meme that I'm sure will follow you forever, which is the private jet for your burrito. So get ready for that one to be around forever. I'm sure we just had Sebastian from Klarna on and his entire business, which serves all sorts of different customer bases, has collapsed to buy now, pay later for your burrito because they did a.
- [175:47]
Jordy
Partnership with burritos are powerful. I think it's actually a bullish indicator if your business is getting burrito memed.
- [175:53]
John
It is. But yes. Where do you see the shape of the US Business going? Where are the exciting developments these days?
- [176:00]
Keller
Is, I mean, look, you know, on, you know, Saturday, Zipline hit an all, all time new record number of deliveries across the US Then on Sunday we blew that record out of the water by 10 or 15%. So, you know, it's like every day is basically a new record at this point as a company, I would say the most interesting things are it feels as though we accidentally like stuck a pipe into the Pacific Ocean. Like demand is so vastly outstripping our ability to build capacity for this kind of service. And keep in mind, I mean, right now, you know, we deliver products in two to three minutes. So even from like when a customer presses a button to have something delivered to their front yard or backyard or front doorstep is typically around 15, 16 minutes. And so it is very magically fast that results in customers changing their ordering behavior. Like, you know, a lot of our customers say they'll grocery shop once a week and then they'll order from Zipline three to four times a week. So people are using Zipline more than the average Amazon prime subscriber uses Amazon Prime. And not only that, but one of the big changes just since, you know, I was last on with you guys, is that a lot of these restaurants are really accelerating. We're now doing 15 to 25% of deliveries from these restaurants that we've been integrated with. So we are similar size on a per delivery basis to the big delivery platforms. And so I think maybe people still think, oh, the technology is like sci fi, it's like years away. And it's funny sitting here Thinking like, wow, I mean, this is like completely normal in the neighborhoods that we're serving.
- [177:37]
Jordy
Talk about the actual experience of getting, let's say, items from a restaurant. We had David Chang on. He was excited about drone delivery and the technology.
- [177:46]
Keller
I tweeted at you guys and we're going to try to deliver for him in Dallas.
- [177:51]
Jordy
Yeah, yeah. And specifically, he was saying he didn't think it would solve delivering something hot. From my point of view, if I'm used to getting something in 20, 25 minutes and then you deliver it in three minutes, that feels like it will be a material improvement. So I wasn't. I didn't quite understand what his point was. But what's the actual experience been like for people? And what's kind of the average speed up in terms of delivery times that you're seeing?
- [178:21]
Keller
I didn't really understand what David was saying either, but look, our comms team hates when I talk about this, but one of the first food deliveries we did, the customer badly burned their tongue on the food.
- [178:35]
John
Okay, yeah, I can see why they don't like this.
- [178:37]
Keller
And I heard that's the restaurant's fault.
- [178:40]
Jordy
They served food at a dangerous.
- [178:42]
John
Yeah, yeah, yeah. It's kind of a bad.
- [178:43]
Keller
I was like, no, actually we should make this like a core part of the marketing. Like, that is crazy that customers are so not used. They're so used to getting, like, fries, they're 45 minutes old and, like ice cold and soggy and gross, and food that tastes bad and milkshakes that are melted. And we just put up with this shit, man. Like, we're completely used to it. And so, you know, I really think this is going to, you know, in the same way that maybe David's expectations are going to get kind of reversed. Like, it's totally happening with all the customers. When you can get something delivered and there's only, you know, two or three minutes from when the thing comes out of the oven, when it is delivered to your front doorstep. That is a way different customer experience. I think actually people are underestimating the difference in the quality of that experience. Like, food tastes really good. It's almost. Almost like you're having an in restaurant experience at home.
- [179:35]
John
I wonder. So I remember when the delivery. When the delivery boom happened, and all of a sudden people were ordering way more food, and it was really like a TAM expander. There were obviously ways to get delivery. You could order a pizza 30 years ago on the phone, they would deliver it. But when it became an app and the market expanded so Dramatically. And people were starting to, to doordash and uber eats. Like every night. Lots of people did this. The market grew and it actually changed the nature of our food. And we got ghost kitchens and we got these funny knockoffs. Like there's in la, there's sugar fish. And then I saw one that was like sweet fish. It's like they will deliberately try and change the names as close as possible. And you get these kind of restaurants that only exist because of the new technology. And I'm wondering what you think of the impact if there will be a change in the nature of, of the food or the nature of the restaurants just because the delivery time goes down or because of the shape of the box. Like if you can't do a massive six foot pizza, maybe some smaller products emerge as the dominant form factor and the restaurants that conform first six foot pizza, John, I don't know the size of this table. I don't know. You know, the kids, birthdays, you see those? It's not six feet. It's not six feet. But you get my point, you know, will there be restaurants that are like, okay, we're going all in on zipline. We're thinking about developing meals from first principles that fit for the best possible experience on the zipline platform. And then that becomes like a new thing that actually changes our culinary experience.
- [181:12]
Keller
I mean, you know, I'm not an expert, but I have a bunch of like hypotheses and, and I would say a couple things. Like first of all, I actually think we have to do a ton of design of the food now to make it work for a system that is going to deliver the food 45 minutes later and ice cold. And also there's a lot of innovation that has to go into the packaging because I don't know if you're familiar, but 60% of food delivery drivers report eating some of the food that they delivered in the last 30 days. So we're like really doing all the temperatures.
- [181:44]
John
Yeah, sorry, 60% over, like hopefully over the month. Not 60% of every time.
- [181:49]
Keller
Over a month. Not 60% every time. Okay, over a month.
- [181:52]
Jordy
They're like, but only when it's, when it's really good. Only when it's really good. Only when it's at my top five favorite restaurants.
- [181:59]
John
One fry, one piece of.
- [182:01]
Jordy
Sorry if I'm.
- [182:01]
Keller
Sorry if I'm ruining it for anybody. But like, you know, so we have to innovate on like tamper proof packaging. We have to figure out like safety and we have to figure out reliability and like, you know, some percentage of things just get picked up and then never delivered. And a lot of things actually like the driver will accept the order but then actually just never show up at the restaurant. Then they have to throw out the food, remake it again. So, you know, I think there's a ton of inefficiency and cost in the system that we will just don't think about. But you do end up paying for in fees and you know, all the crazy fees that get added on top, plus tip. I think another big thing that's going to change is that, you know, this technology is designed to be able to fly out to 10 miles mile, 10 mile radius. And typically it's not cost effective to deliver something with a car more than like three or four miles. And so that means, you know, it differs on by metro and where we're talking about, but like that means that these kinds of systems, for any given restaurant, you're going to enable about 10 times as many customers to receive instant delivery from that location. That's a big deal. And it's a bigger deal actually for like mom and pop restaurants or kind of local heroes versus, versus a really big chain like Chipotle that actually has a ton of stores. And so I think, you know, especially when you think about a place like la, for example, where you have a lot of these different parts of the city that are hard to reach, traffic is terrible. You know, it can take an hour plus to get delivery of food. You know, this technology is going to be like transformational and you can deliver a lot of like the best, most beloved kind of local hero brands and make it universally accessible. By the way, on the universally accessible front, you know, some of the cities were serving in Dallas right now. I mean, just one city that I was looking at statistics for yesterday, 46% of homes are ordering from Zipline.
- [183:39]
Cremieux
Whoa.
- [183:40]
Keller
In that city. And so I think people don't appreciate. Yeah, exactly. I thought it was like a math error when I looked. You know, people talk about startups getting like 2% market share, 5% market share. It's like zipline. In a few weeks, Zipline will literally have the majority of homes in our service areas ordering from the service. And that is like, that's not a joke.
- [183:58]
Joe Wiesenthal
How are you.
- [183:58]
Jordy
So, so clearly, clearly it's working. Clearly customers like it. There's an insane amount of demand. How are you pushing the team to move faster? Because at the same time. Yeah, I know, I know you want to, you know, be, be practical about the rollout and not get over your skis. But at the same time, I mean, people, people in our chat are. Anybody that sort of knows that exists, they start to become angry that they don't have it in their, in their area. And I'm sure there, there's people sending you messages all day long asking you, when are you going to be here? When are you going to be here?
- [184:35]
Keller
So, yeah, we don't. We're going to be announcing something very shortly. We just started talking about it internally, but we'll be announcing the next two metros that we're launching in Q1 and Q2. So look for that in the next week or two. You know, we are, we're then going to start accelerating and adding multiple metros across quarter, starting in the second half of next year. So we are trying to move super, super fast. Hardware companies are, are hard in that you have to scale all these different parts of the business simultaneously. It's in the name. And also it's like, you know, you got to make really sure that you don't accidentally bankrupt the company. And actually, the faster you're growing, the easier it is to bankrupt the company. Is like, you know, these numbers, when you're, when you're building 20,000 autonomous aircraft a year, the numbers actually start to get really big. You've got to make sure that, like, the hardware is validated and like, you have sites that these, that the hardware can go to and begin operating. Got to make sure that aircraft utilization is high. If to make, you know, there's, there's a lot that has to move in tandem in order for the business to work. So I mean, to put it into perspective right now, flight volumes have been growing about 15% week over week for the last 30 weeks straight. We are now planning for next year. Yeah, we're planning for next year. And we actually just reforecasted the entire business and we are planning to actually double our growth rate next year relative to what we were planning just at the beginning of this quarter.
- [185:59]
Sebastian
It's.
- [186:00]
Keller
Yeah. And I don't know how much I can, you know, you know, we are, we are definitely anticipating, like, exponential growth.
- [186:07]
John
You've given us enough to do more than this point. It's fantastic. Just send it straight to Wall Street. I appreciate it. This is fantastic.
- [186:19]
Jordy
So exciting.
- [186:19]
John
Congratulations again. It's always a great time.
- [186:22]
Keller
You guys got to come to Dallas. I think, I think it's probably at a point now. When I was in Dallas last week, we were just hanging out at all these different neighborhoods that are using zipline, and there were Neighborhoods where I saw more zips than I saw saw cars.
- [186:35]
John
Wow.
- [186:36]
Keller
And so I don't, you know, it's funny how the, you know, the futures here, it's just not evenly distributed. I think there are, you know, certain parts of the US people like, oh yeah, it's sci fi, like, you know, it's totally goofy. And then there's like, yeah, some metros where people are like, oh, yeah, I use it like three to four times a day. And by the way, these are like predominantly moms and grandmas.
- [186:52]
John
There's a lot of AI researchers that say that getting Waymo into D.C. will significantly update the administration's AGI timelines because the they will just see robots on the street and they will recognize that this is a real thing. And until you actually see it diffused in the world, it's very hard, it's very abstract to just see reports. Oh, Waymo has 1,000 rides or 10,000 rides or a million rides. It's like, what does that mean? But when you are walking and it's like, oh, seven waymos in a row and they're all driving fine, not crashing into each other. You get it?
- [187:25]
Keller
Even Tesla, fsd. I mean, I was hanging out with my college professor and he had no idea what FSD was or that it was working.
- [187:34]
John
We've heard about it for so long. But it's finally here. So, yeah, very exciting. Well, thank you so much for coming on the show. I hope you have a great Thanksgiving and we'll talk to you soon. I'm sure you'll be back soon.
- [187:44]
Jordy
Yeah, you'll be busy delivering turkeys.
- [187:47]
John
Hot whole turkeys soon.
- [187:49]
Keller
Small ones we can do.
- [187:50]
John
Small ones you can do. Okay, great. I love it. Well, congratulations.
- [187:54]
Jordy
Thank you for talking. Great to catch up.
- [187:55]
John
Have a good one.
- [187:56]
Jordy
See you. Cheers.
- [187:57]
John
Before we bring in our next guest, let me tell you about Julius AI, the AI data analyst that works for you. Join millions who use Julius to connect their data, ask questions and get insights in seconds. And I'm also going to tell you about Privy. Privy makes it easy to build on crypto rails, securely spin up white label wallets, sign transactions and integrate on chain infrastructure all through one simple API. We have our next guest in the Restream waiting room. Royce Branning from Claire Clearspace. How are you doing, Royce? Welcome to the show. Good to have you. How are you doing?
- [188:27]
Royce Branning
Thanks for having me.
- [188:28]
Cremieux
I'm doing well.
- [188:28]
Royce Branning
How are you guys doing?
- [188:29]
John
I'm doing well. Can you kick us off with just a little bit of intro and background on you and the company. And then there's a whole bunch of questions that I'm sure we're going to get into.
- [188:40]
Royce Branning
Totally excited to dive in. My name is Royce Branning, co founder and CEO of ClearSpace, and we help people reduce their screen time. Our company, our mission is to build the missing intentionality layer of the Internet. We think there's a fundamental asymmetry in the war for your attention. And we're equipping the individual autonomous consumer in the market with the ability to steer their focus online and protect their family's attention online.
- [189:03]
Jordy
What's a perfect amount of screen time? Have you guys run the numbers? Is there an optimal.
- [189:09]
John
Well, you know, Andrew Ross Sorkin asked Peter Thiel this in Sun Valley for his kids. He was like, you're on the board of Facebook. How long, how much screen time do.
- [189:18]
Jordy
You let say, like zero.
- [189:19]
John
He said 30 minutes a week.
- [189:20]
Jordy
Oh, yeah.
- [189:22]
Royce Branning
30 minutes a week is ambitious. I think that the ideal amount of screen time is probably a little bit less than whatever you're spending right now.
- [189:29]
John
Sure.
- [189:31]
Royce Branning
We say that a calorie is not a calorie is not a calorie. A minute spent on a screen is not equivalent to another minute spent on a screen.
- [189:37]
John
Sure.
- [189:38]
Royce Branning
But you want to be increasing the quality of the consumption. And usually overall reduction in quantity ends up meaning an increase in quality.
- [189:45]
John
Yeah, that makes a lot of sense. So how do you actually do it? I mean, there are screen time functionality natively baked into Apple, the iOS. I'm sure Android has it too. Your business is still working, so it's not like you're getting steamrolled. But how do you differentiate and deliver value?
- [190:04]
Jordy
Is there any sort of misalignment to Apple's business with screen time? Because I imagine if they really incentivize people to use their screen screen less, it's like less apps that I'm subscribing to and less. Kind of potentially less. They don't have a perfect incentive to make you use your phone less. They sell you the phone once, but they're like, take more pictures, get those icloud subscriptions up, buy more apps, spend more in that mobile game, et cetera.
- [190:30]
Royce Branning
100%. Yeah. We think Apple has every incentive to have a solution here, but maybe not the ideal incentives to have an effective solution to helping people kind of control their screen time and reduce it. We think that it comes down to both visibility and control. So you have like a feedback loop that's helping people identify how much time they're spending on devices and where that's actually going. I think the current state of screen time right now is basically like again to use food if you only tracked calories that you consumed, not micro and macronutrients. So for the last two years coming out of yc, we've been primarily focused on a mobile app that grows people's awareness of how much time they're spending on devices and then allows them to add little bits of cognitive friction into the addictive habit loops that they use on different apps like social media. And that kind of starts to get them rehabilitating an addictive habit. But what we're actually working on now, and we just announced a few weeks ago, are screen time agents that sit at your network layer and can observe network traffic going to all your devices. And this is particularly useful both for individuals and for their families to think about holistically what it means to, to have the right type of content, the right time of consumption happening across all of their different devices. And that kind of breaks out of just Apple's ecosystem of what they allow us to see.
- [191:45]
John
Yeah, yeah, that's interesting. How do you think about the responsibilities of different big tech platforms? We were just pulling up this article in CNBC about this. Whistleblower is claiming that meta failed to act to protect teens. Do you have a stance on like are the big tech platforms being negligent in what they're surfacing to their users or do you think it's more just like the natural forces of the economic incentives they're trying to sell ads. How have you grappled with the various dust ups in the big tech world over. Over what happens on these apps?
- [192:29]
Royce Branning
Yeah, I tend to think about no one is the boogeyman. I think actors are kind of following the incentives laid out before them. Our mission is really much to meet the opposite side demand. I mean, I don't know about you guys. Everyone I know hates their relationship with their phone, they hate how much time they spend on their devices. And I think what we're seeing is we think that actually equipping them to articulate that pressure preference in terms of how much they're spending time on these platforms with technology that's sophisticatedly protecting their attention is going to actually push back against how big of an intention economy scenario can actually be downstream from people just rampantly consuming content.
- [193:07]
John
Yeah, yeah, that makes sense. So how do you actually take me through a list of the walls that you run into? I mean all the big tech platforms are famously walled gardens. Somebody in the chat was asking like I would love to Be able to use YouTube with no shorts, only like long form content. And I actually installed an extension in Safari called Social Focus that allows you to do that if you use the browser, but if you're in the app, there's nothing you can do. It sounds like you're going higher at the network traffic level a little bit, but at the same time, I don't even know. Can you at the router level detect if someone's watching a short versus a long form video on YouTube? That feels like that would be obfuscated.
- [193:57]
Royce Branning
Yeah, yeah, that gets a little harder to do. Although we're constantly pressing at the edges of like what is possible around that. I mean, we've definitely ran some experiments where you can kind of fingerprint what short form content might look like coming down the wire versus long form content.
- [194:11]
John
Yeah.
- [194:11]
Royce Branning
And so there is like interesting things that you can start doing there, but really robustly for the mobile app, we can basically just like make sure that you're staying within healthy usage limits and that those aren't sliding out of control, which, like when shorts go wrong, what really happens is they pull you into a longer session than you want to be in. So there's not an easy way to do that. But different platforms have different rules. Like on obviously chrome, on the MacBook, there's a way higher ability to detect what type of stuff you're watching.
- [194:40]
John
Yeah, yeah. I mean, it's tricky, especially as all the apps like collapse with it. AI you could imagine. I mean right now Sora and ChatGPT are separate apps, but in many ways they're like on the opposite ends of the spectrum. Like I want, you know, my son probably spending a bunch of time solving problems in ChatGPT and researching things and like finding facts and you know, using it as a helpful assistant to understand the world. And probably very little time on Sora, just, you know, slopping it up.
- [195:15]
Jordy
What are parents of teenagers actually doing specifically with clear space? Like how are they utilizing it? What are best practices? Our kids are much younger, five and below, so we have probably another at least five to seven years before this is even a conversation. But I'm curious.
- [195:36]
Royce Branning
Yeah. Some of the cool stuff that, that we've seen is people inviting their kids into challenges as families. So setting up incentive and reward systems. One of our most popular gambling.
- [195:47]
Jordy
Gambling on screen time, the most American thing.
- [195:50]
Royce Branning
Fight one addiction with the other. We hear a lot of parents set up family groups where they're doing a challenge, like a push up to scroll challenge where everyone in the family or Squat to scroll. You have to earn every single minute you're going to spend on social media that week with a physical exercise that we validate with like a machine learning verified push up or squat. And then whoever's in the lead at the end of the week gets to decide where the family's eating out to dinner on Friday night. I think the most effective solutions we're seeing are kind of these, like, cultural pushbacks, almost community type stuff. Like the practice of Shabbat in the Jewish community where it's like 24 hours, everyone's putting their phone away and people love it. It's not this negative. You can't use your screens. It's like everyone's of kind, kind of buying into a new fun thing. And we think Clearspace is the platform that can empower you to do that, like really quickly. You don't have to be a software engineer and know how to hack your router and know how to program all the phones. You don't have to buy a dumb phone. You can kind of still participate in the latest and greatest technologies while knowing that they're not completely zapping your entire family.
- [196:50]
Jordy
Yeah, totally.
- [196:51]
John
Well, congratulations on the progress. I know we didn't talk too much about the business, actually more about the problems that you're solving, but it's. Yeah, it's a very interesting industry.
- [197:00]
Royce Branning
Thank you. I'm curious for both of you guys what you're doing about your screen time these days.
- [197:06]
John
Most of the time, I mean, I don't know because all my screen time is actually really low because I'm live streaming all the time and do I count this like I'm looking at a screen? I'm looking at you.
- [197:14]
Jordy
The other thing I've always been frustrated.
- [197:16]
John
With, the dedicated content is actually way lower than it used to be because I'm live, but that's content and I am the content and so it's a little bit murkier.
- [197:24]
Jordy
But the other thing is I was always frustrated with screen time. I'll give clear space a spin, but with the core screen time app, it would track like call hours as part of the screen time. Right. Which just makes zero sense to me because I'm oftentimes not using my screen at all. I'm just talking with somebody. So anyways, I just always felt like, I don't know, I think I've always been more focused on spending time on. You talked about like, all calories are not created equally, but spending time doing the right things. But yeah, the best thing I've found is Just putting my phone far away and just staying away from it.
- [198:08]
John
Yeah, last week I spent eight hours in the Maps app or something which is like, dang it, I did a commute last.
- [198:15]
Jordy
Classic Map map.
- [198:17]
John
It was my number one used app last week. I don't know what was going on. I was driving a lot.
- [198:23]
Royce Branning
Putting the phone across the room is what we call a classic low tech solution to a high tech problem. We think there's an opportunity to basically deploy super intelligence at the network level at protecting your attention rather than exploiting. And we think that's what people want and that's what we're bringing to them.
- [198:40]
Jordy
I'm going to really stick it to Apple and just start breaking my phone phone into pieces when I want to use it less. And then I got it because I'm on the whatever, I get the free replacements. Right. So I just go in the next day, get a new phone and when I want some less screen time, I just break it into pieces. That's the real low tech solution. But excited to give Clear Space a spin and really glad you guys are working on this. Very important that we have the smartest people in the world trying to capture as much attention as possible and it's good to have equally smart people working on humanity's side here. So thank you and great to meet you.
- [199:17]
Royce Branning
Awesome. Great to meet you guys.
- [199:18]
Jordy
Cheers.
- [199:19]
John
Talk to you soon. Let me tell you about adquick.com, out of home advertising made easy and measurable. Say goodbye to the headaches of out of home advertising. Plan buy and measure out of home with precision. Oh, this CNBC story. Meta failed to act to protect teens. Second whistleblower testified. This is from 2020, so I don't know why. Adam Dell wants us to discuss this. Is there something new here? Because the CNBC story links to a Wall Street Journal article and I was like, oh, November 2nd. It's a little bit old, but it's November 2nd of 2023. And so I don't know what the news is here. Maybe there's something new. We'll have to dig in, but we can go and take a tour of the latest in Meta's world. The most recent thing that I saw was that the they beat the FTC case on the antitrust case that they were fighting. So things seem to be on the up and up. The latest thing from Meta on the is it safe for kids stuff was from Adam Mosseri at Instagram where he was saying he's going to try and make it PG 13. He was using the MPAA rating system. And I believe that there was some pushback from the MPA on whether or not they could. I was saying, hey, Matt, you're rich enough, you should buy the entire mpa. I don't even know if you can. Probably nonprofit. But like, I want. I want those ratings, like in every app, like, just as a consumer, because everyone understands it. You know what R rated means? You know what PG13 means. You know what PG means? I can even tell the difference between G and PG now with the kids, because pg, there might be a little bit of like a tense moment. It's just like emotionally charged. I used to think, think pgg. It's the same stuff, but it's not. And so quantifying that, using the. Using every movie as training data, pipelining that in and then filtering every message that gets sent into Instagram, every post, hey, how would you rate this machine learning model? AGI? God. Personal superintelligence. Let's give every Instagram post a rating and then let the user do decide, hey, I don't want to see anything above PG13. I don't want to see anything R rated. I don't want to see anything G rated or PG rated or anything above that. If you could set your threshold, I think that would be very useful for parents who want parental guidance on the meta platforms.
- [201:36]
Jordy
Okay, we've had a bunch of guests back to back.
- [201:39]
John
We've also had some ads Back to back. GetBezel.com Shop over 26,500 luxury watches fully authenticated by Bezel's team of experts.
- [201:49]
Jordy
Okay, we gotta talk about the Cremieux Keon exchange. Yes, yes, yes. I thought that Cremieu was pretty, pretty fair. Sure. I think he could have gone harder.
- [202:04]
John
Yeah.
- [202:07]
Jordy
Keon said he didn't watch Kermieu's interview, that he was with a patient. I wish that he had because it seems like this is one of the most important things on his plate right now is kind of getting beyond this. And ultimately we tried to bring up as many of kind of the key concerns as possible. To be honest, it's technical enough that I don't. That we don't have the same power level in terms of kind of like pushing. Pushing Kian on some of these issues.
- [202:42]
John
Yeah, totally.
- [202:43]
Jordy
And Sichuan, which is why I think.
- [202:45]
John
Like a lot of the debates will be done around the data in blog posts by scientists.
- [202:51]
Jordy
But yeah, and Kian's main point that I took away was. Sorry, laughing at the chat, but it was like, people are angry that we have the Best marketing and the best science. And I believe that they have the most effective marketing in terms of capturing attention right now. But I don't have the confidence after that conversation that the marketing should be happening at the scale that it is. I didn't come away from that super confident that Keon felt like they've done anything at all. That's.
- [203:37]
John
Even if you just narrow it to what there is full agreement amongst all participants on which is that there were reviews that were anonymized and then not disclosed to be anonymized. Even if it's just that that is enough to, if you're a customer, be like, oh, I don't trust this anymore. And it's a very, very high trust in very environment. It's a very trust critical environment. It's not, okay, yeah, I'm buying a phone case. And like they AI generated the. Like an example of a person holding up the phone case. Like, that's not what this is. This is like life. It's bio. It's really important.
- [204:16]
Jordy
People are selecting, you know, impact, future child's life.
- [204:20]
John
Yeah, we've talked about that.
- [204:21]
Jordy
And I think that whatever happens, it's.
- [204:24]
John
Really important to get it right.
- [204:25]
Jordy
It's really important to get it right.
- [204:26]
Cremieux
Right.
- [204:26]
Jordy
And ultimately people that use the service, if they have an adverse experience, they feel like the service didn't deliver went wrong. They're going to come back to this.
- [204:37]
John
Yeah. So are there any posts that we need to read?
- [204:40]
Jordy
Sichuan Mala followed up and said the fundamental problem with Kion's deflection is that even if the Origin polygenic weights can be independently validated to have the predictive accuracies claimed in their white paper. None of that changes the fact that that they completely plagiarized Herite, falsely claim that Origin is novel and has superior performance, made numerous errors from typos to substantive mistakes in their white paper, have a history of making literally impossible accuracy claims, in some cases inflated 2000x to independent replication. These. These are not just.
- [205:16]
John
What's up, Tyler?
- [205:17]
Jordy
Oh, I just. There's. You can continue. I have another post I want to talk about.
- [205:20]
John
Okay.
- [205:21]
Jordy
These are not just restricted to claims about technical accuracy. These are claims about ethics and morality for the vast majority of businesses. Maybe you don't really care that much about unethical practices. Typically that's fine. I mean, maybe Meta does shady stuff sometimes, but I still use Messenger. Maybe my local grocery store manager is a wife beater. Who knows? I still have to buy my groceries somewhere. That's a.
- [205:46]
John
This is the example that we keep giving of like, you know, will you go change your tires if you find out that the Bridgestone tire company is spying on, you know, a rival tire company? There are certain things where it's just like, if the tires are working, like you're okay with it. A lot of it depends on, like, is the criticism directly in line with the company, with the company's product? Like, if the CEO flubs a line and they miss earnings, but the product still delivers what it is, it's like they sell apples and the apples taste great, you're fine. But when they're making a claim about the actual product and then it doesn't align, that's where people really, really start to ask questions. So closing out here, it says, but we are talking about a company that will select your future child. How can anyone trust you? To a company where the CEO's first instinct when confronted with evidence based criticism is to make false accusation of shady conspiracy theories. And MEW follows up and says, if a company engages in malpractice, for example, plagiarism, providing products they should know are bad to customers, et cetera, is it water under the bridge if they can clean up? That's obviously a reaction to my question was, is there a redemption arc in here? His mind, Somebody says Volkswagen can answer this question really well, I think that's because Dieselgate is what's going on with. Is that in reference to.
- [207:14]
Jordy
Yeah.
- [207:15]
John
Anyway.
- [207:15]
Jordy
Kermu also says Keon alleges that he's been working on embryo services for a long time. Again, that doesn't seem surprising. I think this was always the longer term vision of the company. But Kermieu says he hasn't been doing this with genomic prediction. According to their law lawsuit, which says in 2025, Nucleus sought to offer IVF products involving embryonic DNA testing. Because Nucleus could not do that work itself, it contracted with gp for GP to use its own embryonic genotyping products to provide test results for patients. Nucleus made overtures about acquiring gp. But soon it became apparent that Nucleus was looking for inroads to misappropriate. Again, these are just allegations that we can't really validate ourselves. But again, didn't come away from that. Kind of more confident in anything, really.
- [208:14]
John
Yeah, the Typeform. A lot of people are saying that the Typeform is down. Kian was of course saying that he will release the models and that.
- [208:24]
Keller
You.
- [208:24]
John
Can get the models and the data from the of type Typeform. It was down at the moment, he said that. But Max Glick, thank you for your service. Doing that reporting in the chat while we were talking about that exact thing, Max says it's back up now, for what it's worth. And so crew Mew says that's good, and I certainly hope. I just feel like the next turn of discussion needs to be okay. We tested the models, we tested the data. Data. We tested the claims at a higher level of rigor, I guess. Tyler, which post did you want to run to?
- [209:02]
Jordy
Oh, it's at the bottom of the timeline. Sejuan Mala is also accusing Kian of using a Chad filter.
- [209:08]
John
This has happened before. This happened before. So when Kian came on the show maybe six months ago, growing Daniel accused him of using a Chad filter while on the stream and went super viral. And I was kind of like, oh, that's. I don't know. I don't know how to even respond to that. That's a very silly claim. I have no idea if this is real. I can't tell at this point on a zoom call at this resolution. What do you think? Do you think this is real? Are you guys just cracking up? Because. Does everyone think it's real?
- [209:54]
Jordy
I don't think that he used a filter. I don't think he used a filter.
- [209:57]
John
I don't think he used a filter either. I think he just grew a beard and I think he's just been mewing maybe.
- [210:02]
Jordy
Maybe he's just photogenic.
- [210:03]
John
Yeah, it is possible that he just. He just, you know, flexed his jaw muscles and, like, you know, has low body fat. I don't know. I don't know. I feel like it would be extremely high risk to run a chin augmentation.
- [210:17]
Jordy
Filter down for a second.
- [210:19]
John
I mean, because, you know, that's what happens right, when you're using, like, the Snapchat filter or like the TikTok filters. Like, sometimes they pop in and out, and if they pop out, like, you're done, like, people are going to be immediately, you know, let's see. Compare the first two images with the X.com profile. I mean, the Axe.com profile. That picture looks three years old, four years old. I think on this one, Sichuan, like, you might be over your skis. I don't know. We need to prove it. And then, yeah, people are really going back and forth.
- [210:50]
Jordy
Just gotta get the Nucleus test for the Gigachad test and publicize the results.
- [210:58]
John
Everyone's cracking up in the studio. We're having a wild time.
- [211:03]
Jordy
Anyway, in other news, this is actually insane. Apparently, according to X. I don't know if this is true. But the robbery that took place yesterday in which an armed thief posed as a delivery driver and robbed somebody for $11 million of Ethereum and Bitcoin was Lockhee Groom that was targeted.
- [211:28]
John
Whoa. What?
- [211:29]
Jordy
Which I had.
- [211:30]
John
No way.
- [211:32]
Jordy
I didn't realize that it was him, but absolutely terrible and traumatic. And yeah, when self custody goes wrong. But I'm glad he's glad he's okay and safe.
- [211:45]
John
Wow. An armed thief posing as delivery guy finessed his way into the $4.4 million Mission District home shared by investor Lockheed Groom. Yes, Sam Altman's ex boyfriend and another tech investor named Joshua.
- [211:59]
Jordy
Oh, okay, so it was not Lockheed, but Joshua.
- [212:06]
John
Gary Tan posted the footage, panicked enough to delete it minutes later. Crypto security experts are now saying what everyone thinks self custody is great until someone shows up your door with a fake UPS label and a Glock. San Francisco's tech leader about to hard pivot into vault custody. Private security, zero public flexing because this heist was wasn't random. It was a warning shot.
- [212:24]
Jordy
Very chatgpt written Mario Nafal. But anyways, very sad. Yeah, but glad Joshua is okay. I was confused for a second.
- [212:34]
John
That is terrible.
- [212:35]
Jordy
Anyways, thank you for tuning in today folks.
- [212:41]
John
Before we head out I got to tell you about eightsleep. Com. Exceptional sleep without exception. Fall asleep faster, sleep deeper and wake up at Energized. And I'm also going to tell you about wander.com book a wander with inspiring views, hotel grade amenities, dreamy beds, top tier cleaning and 247 concierge service. It's a vacation home but better. Folks, thank you for taking the time to listen to the show. Thanks for dealing with our stream issues up and down. We sorted it out. The full never happened before posted. Yeah the full interviews will be posted obviously RSS feedback, YouTube and the full Kion interview has made its way to the timeline. Obviously there's a lot of debate. We will continue covering it but not tomorrow because we're off and not Thursday because it's Thanksgiving. We will be back on Friday for Black Friday. We have a fantastic lineup of a bunch of different entrepreneurs, E commerce founders.
- [213:35]
Jordy
Brand builders, some of the most savage.
- [213:37]
John
Operators E commerce operators there will be.
- [213:39]
Jordy
A lot of the world cannot wait.
- [213:41]
John
It's going to be a great time.
- [213:42]
Jordy
A lot of friends have a wonderful Thanksgiving. We are thankful for each and every one of you. Thank you for being a part of this and we'll see you Friday.
- [213:51]
John
Goodbye.
- [213:51]
Jordy
Cheers.