Ellison's Counter Offer, Chinese H200s, Data Centers in Space | Aaron Ginn, Matt Kalish, Emil Michael, Blake Scholl, Naveen Rao, Ofir Ehrlich, Gorkem Yurtseven, Pedro Franceschi

Summary

Podcast Summary: TBPN — "Ellison's Counter Offer, Chinese H200s, Data Centers in Space"

Hosts: John Coogan & Jordi Hays
Date: December 9, 2025
Featured Guests: Aaron Ginn, Matt Kalish, Emil Michael, Blake Scholl, Naveen Rao, Ofir Ehrlich, Gorkem Yurtseven, Pedro Franceschi

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EPISODE OVERVIEW

In this lively holiday-season episode, the TBPN team dives into the intersection of technology, finance, media, and the shifting global landscape. The show balances real-time dealmaking commentary (especially the Paramount–Warner Brothers merger saga), emerging AI hardware developments, geopolitical moves in semiconductors, the future of data centers (possibly in orbit!), and the startup boom in foundational infrastructure. Through a mix of sharp takes and humor, the hosts and powerhouse guests unpack the moment’s most consequential and weirdly entertaining tech stories.

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SEGMENTED HIGHLIGHTS & KEY DISCUSSION POINTS

1. Paramount’s Hostile Bid for Warner Brothers

• Context: Paramount has launched a hostile all-cash bid to acquire Warner Brothers, sparking intense intrigue in the media and tech worlds.
• Jordi Explains:
  • The board’s fiduciary duty is often misunderstood. It's not always just the highest offer: “Maximizing shareholder value is an expected value calculation.”
    — (03:49)
  • Uncertainty in deal closing, regulatory risk, and opportunity costs matter more with big assets than with simple share sales.
• John: “How much of the calculus is just a deal that will actually get done?” (04:18)
• Ellison’s Approach:
  • David Ellison’s series of escalating offers, moving to 100% cash, shows a “clinic of just not taking no for an answer.”
    — (06:40–07:28)
  • Paramount’s funding reportedly comes from a global pool including Saudi, Qatari, UAE sovereign funds, Tencent, Redbird Capital, and Larry Ellison as a backstop.
• Meme Moment: “He sent a text to David Zaslav, but misspelled his name… I appreciated your underwater today, wanted to send a quick text…” (02:25, 16:52)
• Key Risks Discussed:
  • Financing risk: Will the offeror truly have the funds at close?
  • Regulatory risk: Would a deal even get past CFIUS/FTC scrutiny? (eg, Disney or ByteDance would be blocked outright)
  • Breakup fees: A failed deal can still be lucrative (see: Figma’s $1B from Adobe).
• Quote: “I feel like it’s coming together that [Zaslav] will be remembered as an incredible business executive for this deal.” — Jordi (12:55)

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2. Geopolitics of Semiconductors: Nvidia H200s to China

• Hot Topic: The U.S. will now allow Nvidia’s H200 AI chips to be sold to China, with a 25% government cut—a significant policy shift.
• Trump’s Pragmatism: “Trump fundamentally is a pragmatist... he's interested in making deals, not ideological warfare.” — Aaron Ginn (62:03)
• Tensions:
  • Do you accept lower short-term risk by supplying China, knowing they'll keep pushing to build domestic capacity anyway?
  • Is selling key silicon like "selling missile tech" or just keeping U.S. dominance in the loop?
• John: “It feels impossible to make the argument that we're going to get [China] addicted to the US AI supply chain...they'll never develop their own...”
• Aaron Ginn Pushes Back:
  • The CCP’s control over entrepreneurs is limited; saying 'no chips' gives them a “demand argument” to justify doubling down on SMIC and others.
  • "I’d rather take money from their economy and put it into ours.”
• Debate:
  • Is competition with China really about technical lock-in, education, or inevitability?
  • Car analogy: "If Tesla never exported to China, would BYD, Huawei, Xiaomi cars exist or be delayed?”
• Quote:
  • “They view competition as competition.” — Aaron Ginn, on Chinese culture (71:44)
  • “If you remove the demand stuff...we’re removing...justification to accelerate on the SMIC side.” — Aaron Ginn

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3. Space as Data Center Frontier

• Narrative Launch:
  • Gavin Baker claims “the most important thing...in the next three to four years is data centers in space.”
    — Clip played (32:47–36:52)
• Rationale: Cheaper energy, passive cooling, potential for faster interconnects (using vacuum for laser links).
• Skeptics Push Back:
  • Physics of cooling in a vacuum, need for huge radiator mass.
  • Practicality: Maintenance, hardware replacement, orbits, Sun exposure ("you only get light 50% of the time on the moon!").
  • Delian (via text): Current tech is far from supporting gigawatt-scale orbital compute. Launch cadence, power density, and radiative cooling are major bottlenecks.
• Quote: “This is a giant percentage of the cost. The lowest cost energy in our solar system is solar energy in space.” — Gavin Baker (33:32)
• John: “People that actually put things into orbit are skeptical of this on a short horizon.” (37:31)

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4. Major Guest Segments

Aaron Ginn (Hydra): U.S.–China AI Policy

• Argues for pragmatic engagement with China—technology is not as "weaponized" as some claim; the U.S. should maximize its leverage and profits.

Matt Kalish (DraftKings, Hardscope): Creator Media and Brand Partnerships

• From building DraftKings to scaling Faze Clan/Hardscope, Kalish sees creator partnerships evolving, with much runway for innovation especially in food, sports, and commerce.
• “Nobody does [creator partnerships] well…unless you’re a pure-play specialist.” (90:38–90:56)
• Hardscope pitches itself as back-office and growth-scaling partner for creators/collectives.

Emil Michael (U.S. Under Secretary of Defense for Research and Engineering): AI Adoption in Government

• Partnership: U.S. Dept. of War and Google Gemini providing 3M+ government employees with secure, on-prem Gemini access.
• “It’s entirely new territory...AI in secure networks is a new structure.” (105:13–106:18)
• U.S. aim is to support all national AI champions (OpenAI, Google, Anthropic, X) and provide government land/power for new data centers.
• “We're the first group in the last six months to really realize we better get great and stay great... it's a race.” (107:33)
• Securing data: models are custom, learning is siloed, no leakage to shared AI models.

Blake Scholl (Boom Supersonic): Pivot to Energy Hardware

• Boom, known for its supersonic jet, is now repurposing its engine tech for data center turbines (super efficient, 42MW, for AI compute).
• Blake’s tour of the factory demonstrates end-to-end hardware production, enabled by vertical integration.
• “It feels like doing it on easy mode—XB1 had 68,000 parts, a turbine has less than 2,000.” (139:46–140:20)
• This move provides cash flow to ultimately realize Boom’s greater ambition: passenger supersonic travel.

Naveen Rao (Unconventional AI): Rethinking Computer Hardware

• Unconventional’s mission: “Rebuilding from the transistor layer up” for AI—going beyond digital logic, targeting 1000x efficiency for AI workloads only.
• $475M seed round justified by the incoming energy crunch: “If we keep scaling AI, we’ll run out of energy.”
• “We’re not just designing hardware—we're co-designing from circuit to algorithm, as biology does.”
• Hiring: not massive headcount, but high burn for hardware iteration and prototyping.

Ofir Ehrlich (Beyond): Cloud-Native Data Infrastructure

• $300M new round for innovative, cloud-native backup/data-access platform; focusing on making all enterprise data accessible and affordable for AI training/analytics.
• “As companies move to the cloud, managing their data is a big problem...no need for tape or on-prem legacy.” (170:54–171:46)

Gorkem Yurtseven (Fall): AI Image/Video Generative Models

• Announced a $140M Series D (3rd raise this year, with Sequoia, NVidia backing), revenue 8x’d in 2025.
• Surprising to the team: AI image editing revenue has overtaken video generation, though video progress will catch up.
• “Image models… are so good now, and people are getting faked out all the time.”

Pedro Franceschi (Brex): $5.6 Billion Card Partnership

• New partnership: Fifth Third Bank will roll out Brex-branded cards to their clients, a huge expansion.
• “We built our own rails from scratch—this enables us to move fast, deliver local issuance in 200+ countries, and adapt for enterprise needs.” (193:02–195:04)
• On global payments: “The value is keeping clients in local currency as much as possible; stablecoins don’t help that much with the last mile.”

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5. Notable Quotes & Memorable Moments

Host Humor & Color Commentary

• “They should release the full DVD set just called 'Guys Being Dudes.’” — John, on Warner Bros’ “masculine cinema” vault (15:00)
• “Every Code Red is followed by a Baja Blast.” — John, referencing OpenAI and Mountain Dew (210:18)

Insightful Industry Quotes

• Aaron Ginn: “If you view what, you know, the H200 black war or whatever as a, as a Patriot missile, then like there's no real place to like have a conversation. That's irrational.” (74:11)
• Emil Michael: “There is no bigger organization than the Dept of War. There's no more exquisite, crazy, interesting use-cases... It's the world's biggest tech deployment.” (113:59)
• Blake Scholl: “After fundraising for a decade, I can't tell you how good it feels to have a round that lets us ship the revenue product to fund the rest.” (140:22)
• Naveen Rao: “Time is your biggest enemy.” (on both racing and startups) (167:28)

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6. Other Timely News & Announcements

• SpaceX leak: prepping for an IPO at a staggering $1.5T valuation, possibly as soon as mid-to-late 2026.
• Outrage: University of Utah inked a $500M private equity partnership for its athletics program—sparking debate on the increasing financialization of college sports.
• Private tech stack drama: “Meta Superintelligence Lab went on a hiring spree…delivered absolutely nothing…mass exodus.”
• TVPN meta-moment: “What is worthy and valuable?” Sparked by Patrick Collison’s viral meditation; hosts riff on how most career paths can’t participate in “high-mission” industries like space.

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TIMESTAMPS OF MAJOR SEGMENTS

• Paramount/Warner Bros Mega-Deal Explained: (00:02–18:01)
• Nvidia H200s & U.S.-China Chip Geopolitics: (18:12–41:20; Guest: Aaron Ginn 61:33+)
• Data Centers in Space (Gavin Baker Argument): (32:01–41:52)
• DraftKings/Creator Economy & Hardscope Launch: (82:27–98:46)
• Military AI Adoption with Google Gemini (Emil Michael): (103:01–120:44)
• Boom Supersonic's Pivot to AI Turbines: (131:37–147:43)
• Rethinking AI Hardware (Naveen Rao): (155:01–168:33)
• Cloud-Native Data Infrastructure (Ofir Ehrlich, Beyond): (168:47–177:17)
• Generative Media as SaaS (Fall, Gorkem): (177:36–187:45)
• Brex’s $5.6B Card Distribution Deal: (187:47–197:45)

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OVERALL TAKEAWAYS/THEMES

• Tech/Finance/Media are more entwined than ever — Legacy companies fight for relevance while global finance and Big Tech call the shots.
• AI infrastructure arms race is both technical and geopolitical — the U.S.-China chip struggle mirrors recent industrial rivalries, intensified by the centrality of talent, capital, and market access.
• Tech’s scope is shifting from bits to atoms (energy, hardware, real-world logistics)—but requires massive capital and tolerance for “hard mode” iteration.
• The next mega-platforms will be built at infrastructure’s edge: whether data (Beyond), compute (Unconventional) or financial services (Brex).

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TL;DR: If you follow tech, AI, or the finance behind it, this episode is a rapid, unvarnished, and surprisingly human look behind the scenes of the world’s biggest deals, infrastructure trends, and the personalities defining this era.

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For more—search any timestamp above, or reference the guests’ deep dives for expert insight at the leading edge of technology, policy, and global markets.

Transcript

[John Coogan]

You're watching TVPN.

[Jordi]

Today is Tuesday, December 9, 2025. Just a few days until Christmas. We're so excited. We're live from the TVPN Ultradome, the temple of technology, the fortress of finance, the capital of capital. No travel until Christmas, baby. No travel until the new year. We're in the Ultra dome, hanging out. We're monitoring the situation. We're monitoring the Paramount, Netflix, Warner Brothers situation because this is one of the most fascinating deals. The deal has gone hostile. Paramount has launched a hostile bid to acquire Warner Brothers. It's an all cash offer. 77 year, 9 billion. Really?

[Emil Michael]

Really.

[Jordi]

And it's a fun one because I feel like it's obviously tech adjacent, but it's not the story that people have been monitoring all year. We've been talking about foundation models. That whole story has just gotten a little bit.

[John Coogan]

Legacy media, they got tired of not getting enough attention.

[Jordi]

Exactly.

[John Coogan]

Let's spice it up a little bit.

[Jordi]

Spice it up. Here's something new to learn about. So everyone's having. Learning new things. And I could tell because when I came in today, I had a bunch of questions that people were throwing at me about how all of this works.

Why isn't Warner Brothers just going with the highest price? When I sell a stock, I don't care if Citadel or Jane Street's buying it. If I'm selling $80 a stock, just give me the best price. But when you're selling an $80 billion company, there are other considerations, and it goes beyond just maximizing shareholder value. I wanted to break down a few of those, so I did that in today's newsletter. We can run through that, and then we can run through some of the news.

[John Coogan]

Perfect.

[Jordi]

But first, let me tell you about ramp time is money. Say, both easy to use, corporate cards, bill payments, accounting, and a whole lot more all in one place. So.

This question, you know, it seems obvious. The board has a fiduciary duty to maximize shareholder value. That's legal requirement to take the higher offer. And yet that's not what's happening. Like yesterday, we saw that Ellison and Paramount came in with over 100 billion. Of course, that included the CNN, the TV assets. But even when you broke it out, it seemed like it was very clear that Ellison was willing to pay more money and make a higher offer. So under what circumstances can a board whose job it is to maximize shareholder value not take the higher offer? It can't just be whoever we had the better dinner with. Right. Which is part of the news, of course. They went out to Dinner. And Paramount CEO David Ellison sent a text to David Zaslav, who's running Warner Brothers, after they made a hostile bid today to buy Warner Brothers. And David text the other David and says, david, but I guess he misspelled his name even though that's his name, which is just funny. But anyway, he says, I appreciate your underwater today, so I wanted to send you a quick text. Know that despite the noise of the last 24 hours, I have nothing but respect and admiration for you and the company. It would be the honor of a lifetime to be your partner and to work and to be the owner of these iconic assets. He's talking about Foghorn Leghorn. He's talking about Porky Pig. He's also talking about Batman and Superman, obviously, and Harry Potter and Lord of the Rings and a million other iconic assets, which is true. If we have the privilege to work together, you will see that my father and I are the people you had dinner with, which I like that. I think that's cool. They had dinner.

[John Coogan]

It's a fantastic text.

[Jordi]

Yes, yes, yes. It's a great one. So quickly, 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.

So there are two main reasons why you don't just take. Why your size might not be size.

Directors at a company like Warner Brothers, they have to maximize shareholder value, but maximizing shareholder value is an expected value calculation. So if you come in with $100 billion offer, and I think there's a 75% chance that you're going to deliver that, and someone else comes in with an $80 billion offer, and I think there's 100% chance that they're going to deliver that. Well, the expected value of Your bid is 75 billion. The expected value of their bid is 80 billion. I go with the 80 billion. Even though it's like a lower headline number, it has a higher expected value.

[John Coogan]

How much of the calculus do you think is just a deal that will actually get done? Right, A deal that is going to get.

[Jordi]

So a deal that doesn't get done could still have value because of a breakup fee. So you could, in theory, go into a deal that you know is impossible. And the example that I gave is, what if bytedance came in and they were like, hey, you know, we're $400 billion media company. We'd love to own these iconic assets. Let's pick up Warner Brothers. We'd love to own CNN, too. You know, who knows what we'd put on the TV.

[John Coogan]

We already own TikTok.

[Jordi]

We already own TikTok. Why not CNN also why not Shark Week?

Not Shark Week.

[John Coogan]

They'd have to carve out Shark Week in my book.

[Jordi]

But obviously the government would block that. And we have cfius, which is an organization in the US government that determines whether or not an international buyer can take an American company because of intellectual property. All sorts of geopolitical considerations. We don't want cornering a market on a really key piece of the supply chain like the Nvidia H200 for example, which we might be talking about later in the show with Aaron Ginn, co founder of Hydra, host, repeat guest on the TVPN show. But then there's also just the ftc. So certain deals, like I gave the example yesterday, like Disney, Disney would be so blocked, I think that that deal doesn't even get kicked around. No one even talks about it because it would get blocked by the ftc. So it doesn't even happen. But it would maximize shareholder value if Disney came and said, yeah, we'll give you a $10 billion breakup fee and we want to try and buy you for 200 billion or a trillion or 200 million. Like you would immediately say yes, because you just want the breakup fee. But having being in this turmoil and being in this limbo and not being able to sign deals with other. That has an opportunity cost. Right. And so you might want to back off of that. And so basically the.

[John Coogan]

Yeah, look, you look back, the FIGMA acquisition, Adobe paid a billion dollar breakup fee. So that's effectively like non dilutive financing for figma. That has a happy ending because they were able to re. Accelerate, get out into the public markets. But there was another situation where they went through a rough patch and actually really needed that capital to get through.

[Jordi]

Yeah. So there's basically two buckets of risk that I think most dealmakers would be considering in this situation. First, financing risk. So will they come through with the money and what money are they paying with? Because the initial offer, this is the history, there's actually been six offers put forward by Paramount. David Ellison is putting on a clinic of just not taking no for an answer. Because all the way back on September 14, he offered $19 a share and 60% of that was cash. So 60% cash offer. Then September 30, two weeks later, he comes back $22 a share and ups the amount to 66.7%.

[John Coogan]

Zaslav is doing a masterclass in making your opponent negotiate against themselves, 100%. It's actually great.

[Jordi]

And so October 3rd, 2350 a share, 80% cash. Then November 20th, 2550 a share, 85% cash. Then finally, December 1st, 2650 per share, 100% cash. December 4th, $30 a share, 100% cash. Now, why does this matter? Well, it's because you get locked into owning the shares of 40% of the shares is paramount. And then while it's closing, the stock trades down, you wind up getting less value. And so the 80 billion today might wind up being 70 billion later. And that doesn't maximize shareholder value. And so there's also just the question of, like, can you actually marshal the cash? Just like, if somebody comes to you and you're about to sell your house to them and they say, yeah, I'm definitely going to get a loan for this. Well, that's a financing risk. Maybe they don't. Maybe they back out of the deal.

[John Coogan]

That's why cash offers often times.

[Jordi]

Exactly, exactly. If you can prove that you have the cash, that makes difference. And I mean, he's effectively gone and done that because he's teamed up with Jared Kushner reportedly and gone around the world, got a whole bunch of different sovereign funds. And just really, people, anyone with big, deep pockets has kind of said, yes, I'm down to come along on this ride and put up a bunch of the capital. The capital has been marshaled. It seems like it's ready to go. And then also you have Larry Ellison, who has three times as much money, I think, than the whole deal value, something like that, 275 billion to his name. And he's only put together, not cash assets, not cash.

[John Coogan]

But he should not just, I know they want it, but do not market. Sell your Oracle position, please.

[Jordi]

Yeah.

I'm actually going all cash now. But he's effectively acted as backstop. And so everyone who's come in and said, okay, I guess I'm good for 10 billion of that 80 billion, but only if everyone else is in. Larry Ellison reportedly has come in and said, well, you know, if there's one person in the bunch that backs out of their slug at the last second, I'll jump in and get that. He's not saying he's going to put up the whole 80. He's just saying he's backstopping it.

[John Coogan]

Yeah.

[Jordi]

And that's the term that's been thrown around. So.

David Ellison feels very good because he's done what Zaslav wanted him to. He said, hey, they wanted an all cash offer. I brought them an all cash offer. I brought them an offer that's higher. And we believe that it's. There's no reason why factor number two should come into play in factor number two is regulatory approval. And so there's been this question about will Netflix get approved? If there was a different buyer, it would have even more regulatory risk. And so you don't want to. Even if the price is higher, you don't want to accept a higher price with a lower chance of actual actual conversion. Right.

[John Coogan]

Bobby thinks NLE Choppa might up his offer to 100k of cash and get back in the.

[Jordi]

In that scenario, at least you know that the 100k cash is real and it's going to be delivered on the.

[John Coogan]

Day of close, maybe in actual cash.

[Jordi]

Probably. I think that was the. That is funny because that was the joke of that meme was that he was giving like actual cash. When we're saying cash offer here, of course we are not talking about physical cash.

[John Coogan]

Hey, you never know. Are you as well over there?

[Matt Kalish]

Yeah.

[Jordi]

Is Tyler doing money spread? What does he got? Did Christmas come early for you?

[John Coogan]

So I had a question though. What makes the Paramount offer, like, hostile? Is it that it's like reacting to the Netflix office at the Netflix board already or, Sorry, the Warner. Warner Brothers board went with Netflix and they're coming. It's hostile because they're saying, screw the board decision. We want to go to the shareholders. Okay. Yeah. Because the. It sounded like they had a nice dinner and the texts were like, kind, yes, yes, yes.

[Jordi]

No, no, no, no, no. Hostile in the sense of like, of like not accepting the final, like the final decision there and then. And then also there is a. There is a point where you can appeal directly to the shareholders and make the. You can actually make the legal case that the board is not acting in their fiduciary duty and in their. In the interest of shareholders. Because. But again, these things need to be argued in shareholder lawsuits because it is fuzzy. Because, like, if I say I'm offering you 100 billion and someone else is offering 80 billion and the board says, yeah, but that hundred billion has only a 75% chance of going through. You have to discount that. Now the board says it's worth 75, but whoever made that offer can say, no, we're actually good for it, you should apply a 10% discount rate and treat our offer as if it's 90% or 100% good.

[Matt Kalish]

Right.

[Jordi]

And so, and so all of those arguments, those can be made in the court and the Shareholders can, you know, react to that. And if the shareholders align and say, yeah, actually we think we'd be getting more money here with this, with this deal, then they can push back against the board at a certain point.

[John Coogan]

But yeah, Friend of the show, high powered media exec says Zaslav has been architecting this situation for the last 12 months. Sitting pretty and he's a wily old fox and has what he has been shooting for. Two heavy hitters fighting over a deal. Don't doubt there will be a couple more turns here with the price or even another bidder coming in sideways. Don't quote me.

[Jordi]

Which is remarkable because the price is so high already compared to where it was six months ago. Zaslav.

It really feels like it's coming together that he will be remembered as an incredible business executive for this deal. I want to know more. I'm still learning about this particular industry and so I've been. I've been having fun digging in, but.

[John Coogan]

Possible deal guy of the year. He's in the.

[Jordi]

He's definitely in the.

[John Coogan]

Was. Sam looked like he was running away with. Yes, Summer.

[Jordi]

That's true.

[John Coogan]

Early fall. And he lost ball control.

[Jordi]

He lost ball control, yeah. Well, quickly, let me tell you about Fin AI, the number one agent for customer service Automate, the most complex customer service queries on every channel. But.

There is a wrinkle that people haven't really been considering, which is the fact that Warner Bros. Discovery holds a massive, often underrated vault of masculine cinema. And if this falls into the wrong.

[John Coogan]

Hands, what is masculine cinema?

[Jordi]

Masculine cinema being dudes on film. So they own. They own a bunch of Clint Eastwood films. Dirty Harry, Magnum Force, the Enforcer, Heartbreak Ridge, American Sniper, Letters From Iwo Jima, Unforgiven, Gran Torino. They also own the classic Steven Seagal Run. Basically every movie where Steven Seagal was a massive theatrical star before going to direct to video. We're talking about above the Law, hard to Kill, Marked for Death, out for justice, Under Siege, which is Die Hard On a Boat, Under Siege, Two on Deadly Ground, Fire Down Below, Exit Wounds. They also own Rambo, the whole Sebast Alone, the Cobra Wing, Cobra, Demolition man, the Specialist Tango and Cash, Bullet to the Head, get Carter, the 2000 remake. They also own Mad Max, Lethal Weapons, all of the lethal weapons. The Matrix, blade, Mortal Kombat, 300, Rush Hour, Pacific Rim and a number of dad and military shows, Band of Brothers, the Pacific Generation, Kill. There's a whole host.

[John Coogan]

They should release the full DVD set. Just called Guys Being Dudes.

[Jordi]

Yes, they also own some Jason Statham properties. The Meg franchise, where Jason Statham fights a big shark.

[John Coogan]

Whoa.

[Jordi]

Wrath of Man. I guess most of the Guy Ritchie films are actually with Lionsgate or mgm, but there are a variety. And I think this could be a, you know, a big political hot button of what happens to the Rambo franchises. The Hollywood hunks. No one's talking about the Hollywood hunks. Everyone's focused on the Looney Tunes characters. But if the Hollywood hunks fall into the wrong hands, it could be. It could swing our entire culture potentially. Anyway, let me tell you about.

[John Coogan]

Apparently Michael on our team worked on Wrath of Man.

[Jordi]

Oh really? No way.

[John Coogan]

First job.

[Jordi]

Very cool. Very cool Dancer. Automate compliance and security AI that powers everything from evidence collection and continuous monitoring to security reviews and vendor risks. You're hiding inorder amounts of Middle Eastern funding sources in your takeover bid, are you not? Says boring business and not hiding it. It's out in the open. Like this is. This is. This is like the playbook for these deals.

[John Coogan]

Double. Double that of the amount of equity that the Allisons are putting in. Putting it around.

[Jordi]

Yeah. I mean, I think everyone assumes that there'd be a lot of Middle Eastern funding in this. That has become the standard funding instrument these days. I don't know, like EA Games. We just followed that story a little bit. That was obviously 93% Saudi money and that is part of the modern deal making playbook these days. Every. I'm pretty sure most of the. A lot of venture funds have raised money over there. A lot of the big AI companies have raised money over there. Like that seems like a foregone conclusion that if you need money, you go where the money is. Why do bank robbers rob banks? Because that's where the money is.

Well, Dylan Byers says. David, I appreciate your underwater today, so sent you a quick text. He's talking about the dinner. Oh, so that was the. Correct. That was the misspelling D A I V D. He must have been texting very quickly. It does give you.

[John Coogan]

Let's. Let's turn this into a copy pasta.

[Jordi]

Yes, I enjoyed the dinner. So Exec Sum has an overview of who's actually putting in the money here. Filings reveal that Paramount's bid for Warner Brothers is backed by equity commitments including 11.8 billion from the Ellison family, 24 billion from Saudi Arabia's, Qatar's and Abu Dhabi sovereign wealth funds, 1 billion from China's Tencent, additional commitments from Redbird Capital Partners and Jared Kushner's affinity partners that doesn't add up to 100 billion. So there must be cash coming from somewhere else.

Maybe there needs to be some more reporting until. Oh, they did give an updated version of this post but doesn't quite add up. So will be interesting to follow where you know how the deal comes together.

[John Coogan]

And we have a few more people joining this week to help us break down the deal. Ben Smith from Semaphore tomorrow and then Dylan Byers.

[Jordi]

Oh, Dylan's coming.

[John Coogan]

Puck on Thursday in person.

[Jordi]

I'm excited. Oh, he's coming in person. Yes. That's great. Well, let me tell you about numeral compliance. Handled numeral worries about sales tax and VAT compliance so you can focus on growth. Trump says that the United States will allow Nvidia H200 chip sales to China and get a 25% cut. This is a pretty big change. I mean we were talking about.

Not selling. I mean, I guess it's not Blackwell, right? It's Hopper. So we're still a generation behind. But was this, it was like a pretty nerfed chip before. We're getting less nerfed. We seem to move, we seem to be moving in a more thumbs up direction.

[Aaron Ginn]

More.

[Jordi]

Let's actually get the chips over to China at the same time. AI is fake, so it doesn't matter. That's the take. The pro China take is that it's like SaaS. It's SaaS. Or it's not like this nuclear bomb that's going to destroy everyone. So it's harder, it's getting harder to make the.

The Manhattan Project argument. Right.

[John Coogan]

And it feels impossible to make the argument that we're going to get them addicted to the US AI supply chain and they'll never develop their own capabilities and so we want them.

[Jordi]

Well, I disagree with that. I think that that argument actually holds.

[John Coogan]

That argument holds for sure if we in the next. I mean, I totally disagree. I think they're, I think China's smart enough to know they don't want to be dependent on any foreign country to produce any critical. Yes.

[Jordi]

But I still think there's enough of like a market force within China that if we flood the market with cheap Nvidia chips.

It'Ll just be expensive for them to keep propping up their local industry, even if they are aware of it, even if they know that they have to. It's a cost and it's something that a lot of AI researchers over there will just say, you know what, I'm already, It's so much easier. The Nvidia ecosystem is so great. I'm just going to stick with that. I don't know.

I'm a little bit skeptical that, like, there's no advantage to selling Nvidia chips there. I've become more receptive to that argument, particularly, even though you have not. But that's fine. Tyler, what were you going to say about this?

[John Coogan]

Yeah, I was just going to say, I mean, we kind of joke about this, but it is kind of crazy the extent to which you can basically bake down all like, AI policy questions to, like, if you are AGI pilled.

[Jordi]

Yeah.

[John Coogan]

Because like, if you are. If you're Dario.

[Jordi]

Yeah.

[John Coogan]

I mean, you shouldn't be giving stuff to China. You also shouldn't, like, if you are agile AGI pilled. You should be thinking about safety, all these things. Like, we had Keith or boy on. He doesn't seem super AGI pilled. He's also like, oh, safety is a hoax, et cetera. Stuff like this. Basically all these questions, you can just, you know.

[Jordi]

Well, it depends because if you're super fast takeoff pilled and you're super like asi, it's like. But you think that it can somehow be contained in whoever gets it first. You actually don't mind if China's six months behind you, because as soon as you hit that inflection point, you're 1,000 years ahead. And so you might as well just do whatever it takes, fund whatever, make as much money as possible, as long as it accelerates you to be the first one to hit that inflection point. So there is an argument where you can be extremely AGI pelt, even super intelligent.

[John Coogan]

Well, Truth Social media is creating a prediction markets product within the app.

[Jordi]

I thought you were going to say AI product. Did they launch an AI thing last week?

[John Coogan]

I think that was fake news.

[Jordi]

Oh, that was fake. Okay.

[John Coogan]

But it's possible Trump is going to use the prediction markets on Truth Social in order to kind of set AI policy going forward, say H2 hundreds to China. Good or bad.

[Jordi]

That's wild.

[John Coogan]

I mean, that's not that, like Robin Hanson says that that's like a good idea.

[Jordi]

That was the whole. That was the whole. That was the whole pitch originally.

[John Coogan]

There is definitely a bull case. You could say like a Steelman for that. Yeah, there's always a Steelman.

[Jordi]

Yeah.

[John Coogan]

I mean, where's your helmet, John?

[Jordi]

Yeah, yeah, yeah. Put on the helmet. Well, let's read through this Wall Street Journal article on the details of the new Nvidia deal. But first, let me tell you about figma. Think bigger, build faster. Figma helps design and development teams build great products together.

[John Coogan]

So.

Notable that this seems to have been completely priced in already because Nvidia is actually down half a point today.

[Jordi]

Yes, it's been such a dramatic story all year, and yet it's always felt like a complete footnote in the overall financial performance of Nvidia. It's never felt like, okay, yeah, if this goes Nvidia's way, they're going to double their revenue or double their profits or like, you know, really move the needle. They're growing so fast that, you know, I don't know how many we're going to get into figuring out how many H2 hundreds they sell, but they would need to sell a lot to actually move the needle on this behemoth of a business. What is the world's largest company in the world? So President Trump said he would let Nvidia export its H200 chip to China and that the US would receive a 25% cut, his latest bid to make money for the government in an unusual agreement with a private company. I have informed President Xi Jinping of China that the United States will allow Nvidia to ship H200 products to approved customers in China and other countries under conditions that allow for strong national security. 25% will be paid to the US of A. The move is a boon for Nvidia, which has fought for months to maintain access to the world's second largest economy. The company had agreed earlier this year to give the US 15% of China's sales from a lower performing chip, only for the Chinese to scuttle those plans as part of continuing trade talks between between the two sides, chips from the world's most valuable company have become a prized geopolitical tool. The H200 has higher performance than the H20 that Nvidia was previously allowed to sell. But this isn't as powerful as the company's top Blackwell products released this year, nor the Rubin Generation Chips generation of chips coming next year. The move follows a meeting between Trump and Jensen Huang last week where the pair discussed H200 exports. People familiar with the matter said Nvidia shares added nearly 2% after hours. That's not too bad. Even with the US government taking a cut, the decision could be worth billions of dollars in sales to Nvidia, which enjoys comfortable margins on its AI chips. In the most recent fiscal quarter, Nvidia reported gross margins of 73.4% on $57 billion in sales. That is crazy. They can totally afford 25% for the big guy, I have no idea if it'll be legal. We'll have to figure out if this gets approved because in general, the United States does not import enforce export duties. That's not something America has done historically. We had some folks on the show to contextualize that and give us some background when this was first floated. Feels like it is happening now, but we'll see where it lands. In August, Nvidia CFO Colette Krass said that if geopolitical issues subside, the company could ship between 2 billion and 5 billion of chips to China per quarter, which increase. Which could increase if orders pick up. So they're doing.

[John Coogan]

Yeah, right around that. Lutnick was on CNBC and this was the quote that originally ticked off the Chinese. He said, we don't sell them our best stuff, not our second best stuff, not even our third best. And he said, you want to sell the Chinese enough that their developers get addicted to the American technology stack. That's the thinking. And of course they CCP basically immediately said we don't want any of them now because we're offended.

[Jordi]

But it does seem like, yeah, I don't know, we'll have to have Bill Bishop or someone on the show to contextualize how China is receiving this information, whether or not they will actually buy it. Of course. We are going to be joined by Aaron ginn in just 30 minutes, so stay tuned for that. Also, let me tell you about LINEAR Meet the System for modern software development. Linear streamlines work across the entire development cycle from roadmap to release. So the exports could help Chinese tech giants that have struggled to get top chips to train their models. Huang has argued Nvidia should be allowed to compete in the Chinese market because China has many of the world's top AI researchers and the US should want them using American technology if you're. You are not going to replace China, wong said at an event. At a think tank event, Trump said that the government would take a similar approach to exports from Nvidia competitor AMD as well as intel, in which the government now has a 10% stake. The approval comes just weeks after administration officials, including Secretary of State Marco Rubio, torpedoed a push from Nvidia to sell a slimmed down Blackwell chip to China before a recent trade meeting between Trump and Xi Jinping. Some officials, including Aizar David Sachs and Commerce Secretary Howard Lutnick, have backed exporting the H200 because it could be a good compromise that allows Nvidia to compete with China's Huawei technologies without vaulting China past the US in AI. People familiar with the discussion said, I don't know. It's such an interesting question. I still wrestle with. We exported a ton of Teslas to China, and BYD and Huawei have now arguably completely leapfrogged. Completely leapfrogged. So they did not become addicted to the American.

[John Coogan]

That was the point I was making earlier. You can make the art, like almost with every single product. They've said, we'll work with you to make this thing that you want to make. We're really good at making things. And then they ultimately just make a better version of said product and make it for cheaper.

[Jordi]

Yes.

[John Coogan]

And in the case of cars right now, we're obviously not allowing these cars to be imported into the us but they can simultaneously say, we're happy to keep making you these things. We're also going to compete with you directly and constantly try to be better than what you do.

[Jordi]

I just wonder, if you play it back and you don't allow Tesla to export the amazing Model s or Model 3, does that slow down BYD's development of their car or. Or Huawei's or Xiaomi's development?

[Aaron Ginn]

Yeah.

[John Coogan]

My understanding is they were able to basically get a paid education making Teslas and they were able to leverage that into making.

[Jordi]

But that's about making the car there. If you don't make the car there.

[John Coogan]

Which is because the Nvidia has a Shanghai.

[Jordi]

But that's research. That's not made there. That's not made there. Like, it's very different. When you're saying, okay, we're gonna go and produce this product there and like, you are gonna get educated there and.

[John Coogan]

The world, I think it's different. But you remember, we've gone through this before. China's like five year plans to create a domestic chip industry.

[Jordi]

You've been doing five year plans for 60 years.

[John Coogan]

I know they're building. That's what I'm saying. And I would argue that it's working. They're not caught up, but they're certainly made massive amount of progress. They've made more progress than any other country on earth.

[Jordi]

Yeah. I don't know. What do you think, Tyler?

[John Coogan]

I think if you want to think about getting the Chinese addicted to our chips, it's like, how addictive are the chips?

[Jordi]

Yeah.

[John Coogan]

Because if you can make a comparison between, like, you have the Nvidia chips and then you have the Chinese or like tpu. Right. Because the TPU is like, in some ways it's. It's harder to use. The open source is not as good, but if it's just more economical, like if the actual hardware is just like a little bit cheaper, then it doesn't really matter how worse the software is, people will eventually move to it. So it's like the. I don't think there is actually that much like soft power in the kind of general open source stuff like that in regards to, like Nvidia, it doesn't seem very addictive outside of it just being cheaper.

[Jordi]

Yeah, yeah. I mean, at the same time, like, like we are, America is very much like addicted to Chinese solar panels right now. Like the Chinese solar panels come here, they're cheap. And so we don't wind up buying or building a domestic solar panel industry because just to get anything off the ground, you have to go in and say, okay, we're going to deal with having no margin forever and no venture capitalist can underwrite it and no private equity firm can underwrite it. And so it just doesn't really happen.

[John Coogan]

Yeah, but the Chinese, they do do that.

[Jordi]

I guess they do bear the cost more, so it doesn't matter. But it's like they wouldn't have to bear the cost. So we're imposing a little bit of a cost on them. It's like they actually have to pay it. Whereas they don't. Whereas they wouldn't if we didn't do that.

[Matt Kalish]

Right.

[Jordi]

Because if we don't go in and we don't sell them Nvidia chips, then they're like, okay, well, it makes economic sense to back Huawei and fund them. Whereas now they're like, it's not economically logical to back Huawei, but we have to because there's so much pressure from better chips flooding the market like Nvidia chips, that if we don't, if we don't fund Huawei uneconomically, if we don't lose money on Huawei, like, we will never get to. We will never get. We will never be competitive.

[John Coogan]

Yeah. I think it seems to me that like either way they're going to fund it. The government, the Chinese government.

[Jordi]

I think that's George's point too.

[John Coogan]

Really? I don't think it actually matters that much.

[Jordi]

Yeah, I don't know. Well, let's, let's move on. But let's also tell you about adeo, the AI native CRM. Adio. Builds scales and grows your company to the next level.

The United States will allow Nvidia's H200 processors its second best. So this is a change from what Ludnick said, right. Ludnick said, we're not selling the best. We're not selling the second best. Turns out we are selling the second best now. Maybe we'll sell the first best soon. Who knows? Well, we should play this clip from Patrick o' Shaughnessy's fantastic interview with Gavin Baker on Invest like the Best. He's talking about space data centers. We had Dallian on the show yesterday talking about space data centers. Delian still thinks Gavin. It's too far out.

[John Coogan]

Gavin knew we needed a new narrative. He said after the fateful BG2 episode ended, the AI trade. We needed a new trade. And now we're getting the space data center trade.

[Jordi]

Okay, let's hear the space data center. I think the most important thing that's going to happen in the world in the next three to four years is.

[Artistic (Brex CBO)]

Data centers in space.

[Jordi]

If you think about it from first principles, data centers should be in space. What are the fundamental inputs to running a data center? They're power and they're cooling. And then there are the chips, the inputs to making the tokens come out of the magic machines. So in space, you can keep a satellite in the sun 24 hours a day. Pretty cool. And the sun is 30% more intense. And this results in six times more irradiance in outer space than on planet Earth. So you're getting a lot of solar energy. Point number two, because you're in the sun 24 hours a day, you don't need a battery.

[Artistic (Brex CBO)]

This is a giant percentage of the cost.

[Jordi]

So the lowest cost energy available in our solar system is solar energy in space.

Second, for cooling, in one of these racks, a majority of the mass and the weight is cooling. And the cooling in these data centers is incredibly complicated. You know, I mean, the H vac, the CDUs, the liquid cooling.

[Artistic (Brex CBO)]

In space, cooling is free.

[Matt Kalish]

You just put a radiator on the.

[Jordi]

Dark side of the satellite. It's gold, and it's as close to absolute zero as you can get. So all that goes away, and that is a vast amount of cost.

[Blake Scholl]

And then.

[John Coogan]

A bit more complicated than that, the, the dissipating heat and space.

[Jordi]

This is what everyone's fighting about. I'm not exactly sure how it, how it plays out, like, the physics of it, but a lot of people are saying, like, yes, it's in a vacuum, but because it's in a vacuum, you can't just, you can't. Like, it's not as passive of cooling. It's more of a material science problem. Like, there's More physics. Physics problems there also, like, I don't know, I feel like you might need some.

I feel like you might need some batteries because I think there are orbits that are effectively in the sun all the day, but I think that the Earth's shadow hits them not like every day, but every once in a while.

You'Ll be caught in a shadow almost in, like, in a. What's it called? I don't know, some sort of. You just get caught in the shadow. Not every day, but like every 12 days or every 30 days or something like that. And so in that scenario, I mean, maybe it'd be fine if you're doing inference and you don't and you can just turn off the whole system for a little bit and there's some redundancy.

[John Coogan]

I just texted our resident spaceman. Dalian.

[Jordi]

Yeah, answer this.

[John Coogan]

I just said quick take.

[Jordi]

Yeah, on this.

[John Coogan]

It's urgent.

[Jordi]

It's urgent. Well, we'll get back from him. There's more to that clip, though. We should play this because there's a funny part in here going to connect those racks. Well, it's funny.

[Matt Kalish]

In the data center, the racks are.

[Artistic (Brex CBO)]

Over a certain distance connected with fiber.

[Jordi]

Optics, and that just means a laser going through a cable. The only thing faster than a laser going through a fiber optic cable is a laser going through absolute vacuum. So if you can link these satellites.

[Matt Kalish]

In space together using lasers, you actually.

[Jordi]

Have a faster and more coherent network than in a data center on Earth.

[Matt Kalish]

Okay.

[Jordi]

For training, that's going to take a long time just because it's so big. But for inference, let's think about the user experience.

[Matt Kalish]

When I asked Rock about you and.

[Artistic (Brex CBO)]

It gave the nice answer.

[Jordi]

This is crazy, though. They've done a podcast together five times. Why is he asking about Patrick? I was like, what is going on? Went to some sort of Metro aggregation facility in New York, probably within 10 blocks of here. There's a small little Metro router that's routed those packets to a big XAI data center somewhere. And then the computation was done and it came back over the same path. If the satellites can communicate directly with the phone and Starlink has demonstrated direct.

[John Coogan]

To cell phone this whole thing.

I would like to know how much space X exposure Gavin has. Because if this does become a dominant, at least narrative, over the next few years, a lot of the people that we know that have computers in space are not exactly bullish on data centers in space on a short time horizon. We had the founder of Star Cloud on. He's obviously bullish, but I don't believe he has any satellites in orbit. We've had Delian on. He puts things into orbit, he brings him back down. He's talked about having. He technically has.

[Jordi]

I mean, it's a hilarious position because Founders Fund has a huge position in SpaceX, obviously. But also Delian has had to do the hard work of like, getting something in space and probably understands like how much of a grunt work it is and how much of a grind it is to get even just like something as small as, like the pod into space. And then he's also seen at Crusoe, like, what a real data center looks like. And the idea of putting something so massive into space, like it's bigger than the Hubble, it'd be bigger than the iss. What are you thinking about the space data center thing? Have you evolved on this?

[John Coogan]

Yeah, I mean, I don't know. To me it seems just kind of impractical. Like, if you think about, if you're doing inference or something, like how much of the cost of the token is actually in the energy? Right. Because I feel like one of the main benefits of having the data center in space is that energy is basically free.

[Artistic (Brex CBO)]

Right?

[John Coogan]

It's right there.

[Jordi]

Sure.

[John Coogan]

But if you think about, like, I think Casey Hanwer has talked about this. Like, if you think about an inference, when you're doing inference, the portion of the cost that's actually the energy, it's like very tiny because it's like the chip is expensive or doing like, it's not that expensive. So it's like, okay, the.

Cost gains overall are like, not that great. And then it's like, well, what if you want to change the chip to the next generation? Or what if you need to do some kind of like, mechanical work? Are we ignoring how Broken Cluster would take some sort of intervention to fix as well as the cost per kg in fuel costs? Yeah. Just for context. So Gavin was at Fidelity and led a $900 million investment in SpaceX at a $12 billion post money valuation.

[Jordi]

That's amazing. Wow, what a go. That's incredible.

[John Coogan]

Okay. Actually.

Yeah, so maybe they didn't do the full 900 million. Grok isn't. Sure, sure, sure, sure.

[Jordi]

But I mean, either way you can be pro or con on space data science.

[John Coogan]

And Grok also says SpaceX has been Atreides largest venture capital position as of 2022, comprising an estimated 30 to 40% of its VC portfolio. Feels wild. So. So anyways, Gavin is set to. On one hand, Gavin could know things about space data centers. That the rest of us don't know because of his position.

And proximity to SpaceX. At the same time, SpaceX, if they go public next year, would benefit a lot from having a space data center kind of like narrative as part of this.

[Jordi]

It's crazy because the business is so solid. I feel like you don't need a fourth act or whatever.

[John Coogan]

Okay, wait, so what about this? So if a lot of the gains of space and the center are just because the energy is free, why don't we just. But then there's this hard part about having, like different satellites everywhere. Put the data center on the moon, there's no atmosphere, so you don't get the 30% reduction in energy from, from the sun and just put data center on the moon.

[Jordi]

Well, don't you get a 50%.

Reduction because there's like, there's a dark side of the moon. Like the moon you wouldn't put on.

[John Coogan]

The dark side of the.

[Jordi]

I know, I know, but what I mean is that our dark side sometimes gets light from when it's facing us.

[Aaron Ginn]

Right?

[Jordi]

And so you only. If you're on the moon, you only get light 50% of the time.

Whereas if you're a satellite and you're flying out in space and you're kind of orbiting the Earth, but at a weird axis that you're not constantly in shadow all the time, you're getting sun, he says, 24 hours a day. I think it's. I think it's like 99.9% of the time. But regardless, it's like almost always. Whereas if you're, if you're actually like on the moon, you don't get sunlight 100% of the time. You get a 50% of the time. I'm pretty sure.

I don't think it's because maybe there's something. Yeah, the sun's not. The sun's not like. Or the moon's not sun locked, it's Earth locked.

[John Coogan]

Pull up this post I put at the bottom of the stack from Joe Morrison. He's over at Umbris.

[Jordi]

While we pull that up, let me tell you about Restream 1 livestream. 30 plus destinations. If you want to multi stream, go to restream.com and we will pull up this next post, what we got.

[John Coogan]

Joe says you just put a radiator on the dark side of the satellite. And he says thermal engineers in absolute shambles right now.

[Jordi]

Yeah, people are not. I don't know. People are so scared.

[John Coogan]

Stacey Hammer says, to be fair, this is a big satellite. Joe says Many big satellites.

[Jordi]

Big satellite makes it easier. I don't know. I don't know.

[John Coogan]

Yeah, I think you need like, like a lot of like you need. You need basically a lot of mass in order to dissipate enough.

[Jordi]

Sure. Heat from a, from a GB300 or something.

[John Coogan]

GB200.200 somehow AST Space Mobile Inc. Is up 27% in the last five days.

[Jordi]

So.

Excited.

[John Coogan]

People are.

Quite excited.

[Jordi]

Yeah. Well, should we head over to Gulfstream News? There's some massive news from Gulfstream Aerospace. The G400 introduces next gen Gulfstream tech to its class. Sound on to learn more with Gulfstream president Mark Burns. How has Mark Burns not been on the show yet? Here we go.

Clearly don't have a no render policy over here. They're. They're render racing.

[John Coogan]

I think they're just not at. You think they could just be adding special effects?

[Jordi]

What do you mean? This is the most rendered video I've ever seen. This looks like it was rendered okay. But here he is 2010.

[John Coogan]

You think this is real though?

[Jordi]

Bring Gulfstream performance standards cabin class, fulfilling our customers needs for a product line.

[John Coogan]

I knew it was too good to.

[Jordi]

Be true and enhance every journey. Like this is real. This what it looks like.

[John Coogan]

It's far away.

[Jordi]

It does look like a nice plane though. With Gulfstream's signature combination of range, speed and cabin comfort, the G400 will provide unrivaled efficiency thanks to the combination of the advanced practices. This is going to be a hot Christmas gift this year.

[John Coogan]

Absolutely.

[Jordi]

People have been wondering. I think this will be top of. This will be under the tree for.

[John Coogan]

A lot of people it's not ideal to do like a pre order as a gift. You know, it's nice to have something under the tree but I think people would make an exception here. So funny. I was talking with a mutual friend of ours, a guest who's been on the show many times and they're planning to purchase a jet at some point in the relatively near future. And he was so fixated on like needing to be able to. It's his first. It will be his first jet. He was so fixated on like I need to be able to stand up at like it can't have like the cabin needs to be big enough that I can like walk around freely. I was like come on, for your first jet, can you not, not just like, you know, tolerate like slightly lower height in the cabin? He was like, no, I gotta be able to. I gotta be able to move freely.

[Jordi]

Go straight for the 747 the BBJ.

[John Coogan]

Yep.

[Jordi]

Get the VVIP package. The one that only the guitarist have for some reason. Well, Casey Hanmer.

[John Coogan]

Okay, I got it back. I got a text back from Dalian. I won't read all of it. Okay, there's a line here. This is from someone else. Dude, all this data centers in space stuff also I'm not going to read that you need 1 million 100 kilowatt sats to generate 100 gigawatts in orbit. 100 kilowatt sats? Wang. 1,000 kilogram including payload would mean a 5x increase in power density. And you can't just not have batteries and slap a radiator on the back. Lol. And then there were some choice words exchanged that I won't read on the show. But anyways, I think we should host the data center in Space debate.

[Jordi]

That sounds good.

[John Coogan]

We should get a few people on here. Somebody to be bullish, somebody to be bearish. I think we want somebody to be bullish that has put things into orbit and taken them down many times. I think it's hard to. It's hard to lean on somebody's kind of take or opinion if they're not actually participating.

In space. They're just sort of speculating.

[Jordi]

Yeah. Let's read through a little bit of what Casey Hanmer had to say. He said here's one idea about SpaceX's next big thing. AI computing inference. Again, not training on orbit. But how the hell can SpaceX do this cheaper than just building more data centers on the ground from first principles? It's an attractive proposition because the GPUs have extremely high value per kilogram and extreme revenue per kilowatt, both of which are relatively expensive. That is the value prop somewhat washes out the pain of operating in space. So I took a closer look. If anyone can make this work, it is a Starlink derived system. So I started with the Starlink V3 satellites with some high fidelity CEO CAD below orbital parameters. Pick a Sun synchronous orbit so we're in full 1400 kilowatt per meter squared sunlight at all times. No need for batteries. Deploy the solar array in sun slicer mode facing full sun, but the edge is pointing in the orbital direction bottom right in these images to minimize drag. But the inference Starlink star thought satellites don't have to scrape the atmosphere. Being in sun synchronous orbit, they'll need to use the rest of the Starlink constellation for backhaul via laser links anyway. And higher orbits actually improve worst case latency Very slightly too high though, and SSO is relatively full of debris. Let's pick 560km. A Starlink satellite in this orbit has full sun, so the back half is always shaded and relatively cool. The next hottest thing in the sky is the Earth, taking up almost half the sky to the bottom left in these images. And so what does he conclude? He says, I've seen a bunch of high inclination Starlink launches from the Vandenberg recently, but I don't think any of them were going to sun synchronous orbit. In any case, a Ring of Inference satellites visible at dawn and dusk running north and south will be awesome. If one Starship can launch 100 tons to Leo, then that gets close to 30 megawatts of inference per launch. 1,000 watts is 300 gigawatts. Now we're talking real scale. We're doing one launch of Falcon 9 per day. There was delions loosely.

We're now one a day. So 300 in a year. So you get to 1,000 over three years if you're on a one a day cadence or if you can wind up getting more. The math is not that crazy, but it does seem like Delian was pushing more towards like hey, this is maybe 10 or 20 years, not the next three years. But it certainly will be fun to follow the story. In the meantime, let me tell you about Cognition, the team behind the AI software engineer Devin Crush your backlog with your personal AI engineering team. Jordi has survived.

[John Coogan]

I keep like getting the podcast in a can like down the wrong they.

[Jordi]

Should really make a make a drink specifically for podcasters that has no carbonation that cannot be choked on in any way. Marc Benioff says LLMs are the new disk drives commodity infrastructure you hot swap for whoever's cheapest plus best the fantasy that the model is the moat just expired. Marc Benioff having fun on the timeline. I love that he's having fun. I love that he's taking shots.

[John Coogan]

Don't they have an AI lab?

[Jordi]

To be clear, they were working on Einstein for a while, but I think that they are very much happy to be a rapper, happy to be a buyer of LLMs at this point. It certainly has penciled out that way. We can talk more to Mark about that.

[John Coogan]

It's feeling Good. Stock's up 10% in the last five days.

[Jordi]

Hear it for.

[John Coogan]

Best salesman history.

What do you think about Michael Burry? The whole industry needs a $500 billion IPO ASAP.

[Jordi]

Said any everyone that knows anything knows this OpenAI is the next Netscape doomed and hemorrhaging cash. Microsoft is still trying to keep it afloat while keeping it off balance sheet and sucking out the ip. So why do they keep getting funded? The whole industry needs a $500 billion IPO ASAP. The whole industry needs to go away and sit in a corner for a couple of centuries and think about what it's done, says Jeffrey Miller. Wow. I don't know. This is. People want extreme takes.

[John Coogan]

This post would go super hard if you don't understand the Microsoft OpenAI relationship.

[Jordi]

Yeah, but.

[John Coogan]

Yeah, it's just, it's just.

[Jordi]

What was Netscape peak revenue?

What was Netscape?

[John Coogan]

If I remember correctly, they IPO'd with like 15 million of revenue.

[Jordi]

That feels a little bit different in Netscape's peak revenue in 1997 was 500 million. I mean.

We'Re up at 20 billion this year for OpenAI.

[John Coogan]

Yeah. Their total revenue before IPO for first two operating quarters, Netscape reported total revenue of 16.6 million.

[Jordi]

Just odd. I mean did Netscape have like an enterprise business?

[John Coogan]

Ask Mark.

[Jordi]

Yeah, I don't know. I mean even if there's a.

Yeah, yeah. Even if there's more commoditization, like it's going to take time and I don't know, the dynamics of the competition here feels like there will still be a lot of value. Even if there are, even if it is somewhat commodity infrastructure, it's like, you know what else is commodity infrastructure? Like aws, gcp, Azure, like you get.

A server with some hard disk on it, like that is commodity. And yet they all have 30% margins and they're all massive businesses. And when AWS, when Amazon broke out AWS as its own line, it was like an IPO of its own company because it was so big, it was such a massive business and it should be completely commodity because it's just servers in a data center and yet.

[John Coogan]

Yeah, it's interesting too. I mean Burry has positioned himself of just hating any company that's overheated. But ChatGPT having close to a billion weekly actives and, and ultimately even if they just compete in search. Right.

At least it's a multi trillion dollar opportunity. Whether or not they fully execute against that is another thing.

[Jordi]

Are you buying the IPO timeline of cohere, then anthropic, then OpenAI, or do you think they will be sorted in a different pattern? What was the order cohere first? That's Aiden Gomez's foundation model lab. He is of course on the transformer paper. Also a dripped out Technology brother.

[John Coogan]

That's right.

[Jordi]

With a fantastic set of outfits, then anthropic and then OpenAI. OpenAI third.

That's the rumor.

[John Coogan]

Hard to say. I have no idea how the market will react to Cohere.

[Jordi]

Yeah, Cohere has shifted more into like the business.

[John Coogan]

The enterprise market.

[Jordi]

Fully enterprise.

[John Coogan]

Not in the timeline at all. That could very well be intentional. But it would be.

It'll be interesting how much excitement they can build around the ipo assuming they're losing a lot of money, assuming the enterprise is really competitive and they're competing with Anthropic and OpenAI and open source models.

[Jordi]

If the narrative changes to the point where you know this idea of every enterprise is going to need basically a custom LLM that's fine tuned or pre trained on their data. Like what AWS CEO Matt Garman was talking to us about, about these pre training checkpoints where you can go in and say okay, I have a business and I absolutely do not want upload my data to Anthropic. I don't want to update it, I don't want to upload it to OpenAI. But I want a model that understands my business's data at a core level in the pre training step and Cohere can offer that and show traction there. That feels like that could be the next wave. We've talked to a number of founders that are building those sort of custom pipelines and there's not really a public company that is even anywhere in that narrative and that narrative does feel very nascent. It feels like it has not percolated through the public markets yet. So I don't know, it could be, it could be, you know, exciting for them.

[John Coogan]

Well let me tell you, they've only raised 1.4 billion.

[Jordi]

I did not realize they raised.

[John Coogan]

Sorry. 1.5, 1.5 billion. 1.54 billion. Very modest amount especially when you have seed stage companies raising half a billion.

[Jordi]

We got one of those show today. We're excited.

[John Coogan]

Joining later. He kicked the hornet's nest on he did timeline a little bit. People were, people were pushing back because.

[Jordi]

Of his, his, his racing history.

[John Coogan]

No, no, no.

[Jordi]

Oh people, people show respect.

[John Coogan]

Love that show massive respect. No, but I think, I think Jack at slow was saying that Nvidia was valued at, at 500 million when they IPO'd. Of course that was very long time ago. But anyways people, people are just saying like it feels pretty potentially overheated. But we have Naveen coming on the show today and I'm excited to hear about the opportunity from him, I'm ready.

[Jordi]

To say it's overvalued. Unless he's built a company previously and sold it twice.

[John Coogan]

Maybe.

[Jordi]

Yeah, twice. If he's done that, then he's, then he's off the hook. But he's got to prove it to us. Because if he's just some new grad.

[John Coogan]

Some dropout, like a Waterloo.

[Jordi]

Yeah, if he's just. If he's just like. If he shows up on the show and he's just like, yeah, I had this idea in my garage, I didn't go to school, I've never done in business before. And now then I'm going to call him out and I'm going to say, you're overvalued. You raised too much money. But if he can prove to us that he's done it once or twice before, then I'll let him off the hook. I'll let him off the hook anyway.

[John Coogan]

I think that's fair.

[Jordi]

Let me tell you about Privy. Privy makes it easy to build on crypto rail, securely spin up white label wallets, sign transactions, and integrate on chain infrastructure all through one simple API. Let's read the Semi analysis post says Important A common misconception about OpenAI's upcoming custom chip is that since it's a custom chip, it won't be flexible and will be a data flow machine. OpenAI has recognized that the 100x efficiency gains for training and inference happen at the algorithm layer and the hardware chip needs to be flexible enough to accommodate these algorithm changes. We went from just pre training transformers to now doing RL post training on transformers. We went from dense transformers to mixture of expert transformers and soon ultra sparse transformers that will have four active experts per token out of 2048 total experts. We went from casual MHA attention to MQA and GQA to attention sync sliding attention to now even learn sparse attention. Despite AI tourists thank, the chip OpenAI is building with Broadcom will be far more flexible than TPUs. Interesting. Despite most of OpenAI's chip team being poached from Google's TPU team.

The semiconductor horse race continues to fascinate me and I'm so glad that we have the good folks over at Semianalysis coming on the show regularly to help us understand it. I always enjoy talking to them and we have.

Two folks from Semianalysis joining the show next week, so we will be having a great time. Let me tell you about Turbo Puffer, Serverless Vector and full text search built from first principles and object storage. Fast 10x cheaper and extremely Scalable, of course. That's right. It's scalable. A hedge fund was ordered to pay a bonus to a trader who made 97% of its revenues. This is hilarious because when I read this, at first I thought it was. He had made like his target bonus was, let's say 10 million, and he brought in 9.7 million. And so he was 97% of the way to his bonus. And they were like, you didn't hit your bonus, buddy. You don't get the bonus at all. And I was like, oh, that sucks. But like, that's kind of the deal. That kind of makes sense. But Evolution Capital Management has to pay him because.

[John Coogan]

Yeah, so a hedge fund that was sued by a trader for refusing to pay a performance related bonus despite him making 97% of its revenue has been ordered to pay him 5.4 million plus interest by the High Court in London. When I read the headline of the story, I expected it to not be in the mid seven figures. But would you expect, I mean, I was hoping at least eight. At least eight.

[Jordi]

Not getting a G400 off of this.

[John Coogan]

Not even close.

[Jordi]

Not even close.

[John Coogan]

Robert Gagliardi sued his former employer, Evolution Capital Management in London, alleging that it actually acted in bad faith by denying him a $7.5 million discretionary bonus after he had generated more than 60 million for the firm.

[Emil Michael]

Wow.

[John Coogan]

Wait, does this mean that every other trader lost money was just something like that?

[Jordi]

I don't know.

[John Coogan]

Heavily.

[Jordi]

So he was at the fund, brief stint, he made 12 million, he was already paid 7 million, including a $625,000 signing bonus. Base salary was 425k and a $6 million new issue bonus. So he needs to get out of this. He needs to go into AI research ASAP if he wants to be putting up real numbers. This is rough, but there are some harsh words here, he said. Gagliardi, a block trading specialist, alleged that he was told in early 2021 that a return of $10 million over the rest of the year would be an excellent result. When Gagliardi asked the fund's founder, Michael Lurch, for the payout in 2022, he responded, I'm not going to pay you the bonus if you sue me.

[John Coogan]

So Gagliardi did. And he won.

[Jordi]

He did.

[John Coogan]

He did. Although Evolution did not dispute his extraordinary returns, the fund argued that the damage done to its reputation as a result of dealing with a US SEC probe into some of Gaglieri's trades at his previous employer outweighed his performance and that the bonus did not need to be paid because it was discretionary. There's no question that Mr. Gagliardi made exceptional profits for the funds, and Mr. Lurch frequently praised his performance in that respect. Had Evolution properly performed the contract, Mr. Gagliardi would have received a discretionary bonus of 5.3 million. The judge also said that Gagliardi was Lurch's prize asset at Evolution. That's a good goal for everyone. That is, you know, maybe working at a company become the prize asset. Hopefully that doesn't result in a lawsuit like this, but they're feeling. Gagliardi and his lawyer are feeling very vindicated.

[Jordi]

Well, we have our next guest here in the Restream waiting room. Let me tell you about Gemini 3 Pro. First, Google's most intelligent model yet. State of the art reasoning, next level vibe coding, and deep multimodal understanding. We have Aaron Ginn, the CEO and co founder of Hydra. Host. Good to see you. It's been too long. How are you doing?

[John Coogan]

Welcome back.

[Aaron Ginn]

Been all right? Yeah, Yeah. I just got back from Southeast Asia.

[Jordi]

Oh, yeah?

[Aaron Ginn]

Yeah. And despite what some of the critics were saying, I wasn't smuggling anything I shouldn't have been smuggling.

[Jordi]

Getting accused of smuggling, that is wild.

[Emil Michael]

Well.

[Jordi]

Give us the update on your interpretation of the H200 deal, where things landed, where you think the next debate points will be. I'd love to hear that.

[Aaron Ginn]

Yeah. As you know, I've said a number of times that even though I am a China hawk, that we have to realize that Trump fundamentally is a pragmatist.

[Jordi]

Sure.

[Aaron Ginn]

And he is not interested in the ideological warfare. And I think that him taking over the Republican Party proves that. And the orientation of reshoring to America, which y' all know, like I wrote one of the first arguments for a new Monroe Doctrine. So now you saw that the Department of War has been putting that out. The White House has been very clear that it's trying to reshore its emphasis back to latam in South America and to build up the ring of fire from, you know, South Korea down to Singapore, essentially to be more sovereign, essentially NATO, as we've approached ourselves with having them.

Spend their own money just for their own military, that the expectation is that Asia would do the same thing. So a deal with China on trade was always on the table and was very likely because both parties actually want this to happen. And. And I do believe that with like, with Huawei, that, yes, it is the national champion and they do want to proliferate it, but they are. But they're more interested in Selling it to other people and promoting themselves as a means of trade like they did with their Belt Road initiative than they are for internal uses like that. That's just kind of my estimation, talking to people in the region and we're just getting back from there. So. So Nvidia being in, in that region and being sold particularly China, I think is important for American interests. Whether it's an H20 or B30 or H200, I'm kind of less opinionated on. I just think that we need to be there because half of all AI engineers are Chinese. And we can go through any list of anyone scrolling at the bottom of this, you know, this, this broadcast and you can see that the, probably the majority are Asian descent, you know, minimally. And as America, we just have to realize that like we're good at certain things and we're not good at certain things. So we're very good at commerce, we're very good at free markets, we're very good at enterprise. We're very good at creating the default framework, the rules of the road for the world to transact. I think when it comes to trying to do these other strategies, I think we're not very good at it. And we just kind of have to realize that also that the President United States is interested in making deals. He's not interested in trying to get involved in other people's business.

[Jordi]

Yeah, let's. I mean there's like a million different pieces here. But let's start with the fact that there are so many fantastic genius AI researchers in China.

Why is it in the interest of the United States to help them? Is it that if they start developing on Nvidia chips it gets the Kudo ecosystem stronger and we will actually get more open source software basically for free from China that will come back to America and make our AI efforts stronger? Or is it. We want them to be familiar with Nvidia when ultimately they come over here on O1 visas and start working for American companies.

[Aaron Ginn]

I think that's too narrow focus. It's sort of like Boeing. Do you want Boeing in China?

[Jordi]

I mean, yes, because I want Boeing to be a thriving American business. I want Boeing to maximize profits. And I don't see the 747 as a piece of. I don't see the 747 as a nuclear power bomb.

[Aaron Ginn]

The. Yeah, I mean, I think that that's the key Prior on the second one is like, do you think that an H2H200 is A, is a, I don't know, like a, like A some form of missile technology.

[Jordi]

Yes, yes, yes. Increasingly. Increasingly I have, I have backed off the idea that these chips should be viewed as.

Weapons, like a defense technology. Yes, yes, yes, I've backed off.

[Aaron Ginn]

Yeah. Because I view it much more like telco technology.

[Jordi]

I agree.

[Aaron Ginn]

And we did not win at that. We lost that. And that's because we didn't offer the world an alternative. We just were like, hey, don't use ete, don't use Huawei. And they were like, okay, we'll give us something else. And we were like, well, I don't have anything to give you.

[Jordi]

Right, so what do they do? We're sort of separating things out here because on the one hand, like, there's give the rest of the world something and then there's other. Which is like, give China something, which is like. There is a difference there, right?

[Aaron Ginn]

Yeah, no, no, no, that's true.

[Jordi]

Because, because like, I'm totally down to go belt for belt and road for road all over the, all over the globe. Right. But the question of like, can, like, is there any world where we could get a different cell phone tower deployed in Beijing that's not a Huawei tower? Like, no way.

[John Coogan]

Right.

[Jordi]

This is impossible.

[Aaron Ginn]

But then you go back to the fact of like, you're right, like, you know, all metaphors fail. That's why they're metaphors. So the other exogenous factors you got to think through that's different from telcos is the fact of like, the level of AI engineering talent and the fact of like, it's funding in isn't like, you know, propelling forward American AI. That's just the reality of where we are. The second is the fact of like, they do not have the foundry capacity or the foundry skill set to produce similarly level at scale. Scale absolutely is true. They could be at some point be approaching some form of like 5 nanometer process. And there's like rumors around that. So. And that's a little bit of an obsession because it is a barrier of technology that like, we, I should say the west has been skilled at, not particularly America, Japan and the Dutch, but. But that's there. We don't want to fund that enterprise. And I think that that's where the pragmatism comes into play. It's like, if we don't offer them something, they'll just do it themselves. And I'd rather take money from them and build our own sort of reshoring in America.

[John Coogan]

But, but to be clear, but to be clear, they're still going to do it. Everything themselves, right? No, it's just going to take them. How does it.

[Aaron Ginn]

I don't think so.

[John Coogan]

You think that China will happily be dependent on foreign.

[Jordi]

I mean last time there were rumors of this sale, they, they, they were putting out press releases saying like, hey, if you're going to buy Nvidia, you got to prove it. You got to prove that you need it. You got to prove that Huawei won't work. It felt like there was a lot of pushback from the cc.

[John Coogan]

I don't, I don't believe, I don't believe, I don't believe at all that they're just going to be like, thank you for the H200. We're going to stop investment in our domestic chip manufacturing.

[Aaron Ginn]

Yes, but the problem is in that flow one you assume a level of CCP control that's just not realistic. It's a country of like 1.3 billion people with very successful entrepreneurs.

[John Coogan]

Yeah, but they've been ripping five year, they've been ripping five year plans for over and over and over and over.

[Aaron Ginn]

I mean like, yeah, but that stuff doesn't matter. Like you have to understand that like there's lots of propaganda that I think that they say that they actually never happens in real world. Go look at Africa, go look at all the airports and see actually how what actually happened. Go look at the ports. Yes, there are certain examples of ports actually transfer, like the Sri Lanka port, but go look at the rest of the ones like they didn't happen. So they say lots of things, but the question is like, what matters in terms of the national security orientation of America. And I would much rather take money from their economy and put it back into our economy than trying to give them both the demand side and the supply side argument. You're making a supply side argument which I think is very much how the CCP thinks about the world, which is like, oh, we need to build our own chip supply. But in the orientation I think that Jordi are more biased towards which is like, well, let's also give them a demand argument. I'm like, no, I don't want to give them the demand.

I would rather mitigate that as much as possible. To say that yes, like they have, you know, probably like five or six multi billion dollar operations that like want to have these types of chips that are not military oriented and by applying these export controls that are overly extreme, you're basically giving them a demand argument as well. And I'm saying I don't want the demand argument. Like if they're still going to have a supply argument. That's fine. Like go buy a byd, you know, car and hopefully it doesn't catch on fire. Like so like, you know, like just.

[John Coogan]

Because BYD are you bearish on byd. You're there catching strays right now.

[Aaron Ginn]

I saw one of them on fire in Hong Kong.

[Naveen Rao]

No joke.

[Aaron Ginn]

Yeah, I have a video of it.

[Jordi]

I text you, yeah, let's go to the cars and talk about what we were debating earlier.

If we are just talking about cars instead of chips, of course there's going to be a metaphor here. But if we're just talking about cars and we want, and the frame is like, we're all China hawks and we're putting on like rah rah, we want America to win the electric car race. Should Tesla have sold Teslas into China? Because it feels like they did. And then China was able to make a whole bunch of cars that compete directly with Tesla and it feels like maybe better, maybe cheaper, maybe better and cheaper on some sort of Pareto frontier. If we run that experiment, we try and think through the counterfactual. If Tesla had never sold a car in China, where would the SU7 be? The jumping Huawei car, the Xiaomi car, the BYD Han, the one that has the karaoke machine in it? There's some crazy cars. Would those exist? Would they be delayed? Would they happen faster? How do you think about that?

[Aaron Ginn]

So I think this is where there is a reality which is that they're going to copy, but I don't think that that that is something we can change, speaking as a half Chinese American. So it's just the nature of what is the way they think about competition.

[Jordi]

It's just competition.

[Aaron Ginn]

Yeah, they view competition as competition.

[Jordi]

And importantly.

There'S one world where they need the industrial power of 1 million H2 hundreds and there's another one where if you give them a single H200 they can tear it down and try and reverse engineer it as much as possible. And then they can also do all the learning curve stuff on there, on their companies, on their national champions on Huawei.

[Aaron Ginn]

I think it is reasonable in terms of an argument against export controls. If you view this as a means of trying to slow down their own model level progress, I can at least cogently understand what's being presented. I do not agree with this from the perspective of hardware engineering because again, if you don't have the ability to make a car, then then what's the risk? Right? Like, like, like just mitigate their ability to make a Car which is generally been my, my, my position is like I want to mitigate their ability to make chips. And, and, and so in a world where there's a demand and supply right in sccp because they're, they're communists so they love focusing on supply solutions. Everything which by the way doesn't work as I mean we're all free marketers here. We're all a bias towards Austrian like we know that their philosophy of the world doesn't work. So, so they engineering all they want but again they don't have the ability right now to aggressively address their LE problems. And so in that world I want to just win because if they can't, if we remove the demand stuff because all their companies want to use Nvidia, if we remove the demand stuff, we're removing one of the biggest parts that would give them justification to accelerate on the SMIC side. But if they're just going to go and play around and be like, hey, we're going to dump money into SMIC because we want you to use local. But we're everywhere. It's like the fast food thing of like, sure, they have local fast food but McDonald's and Starbucks Fresh. And so like that's more how I think about it. They're still going to try to copy but if you don't give them the ability to actually have the toolkit then it's a much safer transaction. And I think, John, what you said is important is that the debate is highly mixed up between. You think NH200 is an F35. If you remove that as an A prior, then the world becomes significantly simpler to understand. But if you view what, you know, the, the, the H200 black war or whatever as a, as a Patriot missile, then then like there's no real place to like have a conversation. That's irrational. Yeah, because my view is like, you know, I, I don't have as much of an opinion on you know, GB or B, that kind of like debate. I, I just, I think American companies need to be in China and because we want the ability to not only address the second largest economy in the world and like have access to like, that is the Trump position and that's my position. Like we should sell to the world, we should be an export nation. But the other is like China is going to copy and it's just part of the equation.

[Jordi]

Flip around for me and give me the. Sorry, I wanted to hear flipping, I wanted to hear more. Shifting to domestic semiconductor supply chains. What is your theory of the current Horse race between Trainium, TPU and Nvidia it felt like Nvidia was dominant last year. The year before then we were hearing rumblings of like hey, maybe AMD is getting it together on the software side. Hey, maybe this TPU thing could be used to train a decent model. The DeepMind team seems to have been able to do that. Are we moving towards more of an oligopoly? What are you thinking about how the American Semiconductor AI accelerator horse race is playing out?

[Aaron Ginn]

My view from the TPU side, I don't really know who would buy that as just a product. I think Meta is the closest one that makes sense. But why would any of the cloud companies do it? Because they are in a position right now trying to build their own and they're trying to delever why they're building. They're trying to deleverage from Nvidia so why would they want to commingle themselves with an actual direct composite like a direct competitor and sell their stuff? And then there was a mock yeah, there's also this weird zealotry around TPUs that I may make because we had Thanksgiving. There's not going to happen. But to say that there's minimal switching costs is absolutely absurd and insane. There's significant switching costs and so if you're of the mindset of like hey well we have all this capex and it kind of makes sense and that's justifiable, I can understand that. But that's like the same reasoning that you could apply to the multi cloud argument and we didn't really see that happen at all all basically until GPUs. Now you're seeing much more multi cloud products because GPUs made everyone multi cloud. So and if you were multi cloud before GPUs as a function of an acquisition it was not generally intentional. So I think GPUs make sense for Google just as a vertically integrated strategy because that's what they like to do. And there are probably some other companies that maybe like maybe Apple, I could maybe see that because they love low cost chips just in general but I don't really see it breaking beyond Google because I just don't know who is really incentivized to buy that. And then I agree with you on AMD side their software is getting better. I think that's just the natural orientation of just Lisa Suit is the most reasonable because a competitor to Nvidia's general purpose computing dominance I'm pretty bearish on Trainium and TPU is just from a, from A chip perspective I'm bearish on. But as an integrated strategy, it makes sense for them. As a company, the Nvidia is not really as comparable.

[John Coogan]

We're running out of time. But I wanted to ask you about one other thing. There seems to be a number of people trying to manufacture a space data center pump.

[Jordi]

Oh yeah.

[John Coogan]

As somebody. And even Nvidia was posting from their corporate account.

Some renders of a company called Star Cloud, some space data centers that they're working on. As somebody that has spent a lot of time in data centers or around data centers all over the world, what are your timelines? Are we talking. Gavin Baker was saying the most important thing in the next three to four years is data centers in space. We've had plenty of people on the show that believe that it's an exciting possibility or opportunity. But maybe their timelines are more like 10 to 20 years. How do you think about it?

[Aaron Ginn]

Most of the stuff that has been announced will not happen. I.

No like then think of it as like a 50%. So if they announce like 5 gigawatts, probably end up being like 2. And because this stuff's really building stuff is actually quite hard. And America has not really behaved in a manner to me that believes it's that serious of a thing like this is a very niche issue. And one reason why the going by H200, the reason why it's making less noise now is because it is a niche issue. It is something that maybe a couple hundred thousand people really care about. And in the data center it affects even though it does bring jobs, it does bring these types of opportunities to cities that previously never had a position to support a data center, which is great. It is really kind of a narrow set of people that are really benefiting. And if you go look at, you can go read the bills that are in consideration across America.

America is not acting like it's very serious about building data centers. The power profiles, the approvals that are happening, it's just not happening. Versus the other countries, they're generally more serious about it. And many of these announcements, as Jensen disclosed.

They'Re fundraising announcements. They're actually not, not actual projects yet. So they're trying to let's say they have an equity already lined up, but the equity generally is like 10 to 15% of these projects. So you got to go raise the other portion of it. And the offtake side, outside of the hyperscalers, there's not a lot of confidence the credit side has outside of those hyperscalers. So the debt side of the world actually has been quite conservative on these and the private credit. So that's why I never really thought like, you know, the quote unquote bubble talk and bursting it. We're nowhere really there. If you go talk to lenders, like, we're nowhere even close. The type of capital that's being deployed has actually been very conservative, has been aligned with contracts, has been associated with high paying credit, you know, top tier customers. We're not seeing, you know, the Geordie Credit Union in the middle of, you know, SoCal doing black, you know, B300 loans. And when that happens, then I'll be like, yeah, you know, yet we're working on it.

That's where if you look at the legal side, if you look at the power profiles, if you look at what's happening and the political nature of it, I don't think many of these projects actually scale to what they need to. But I do agree with Gavin that we actually do need to get serious about it because it's not like the world would be worse off with more power, more compute capacity. If all those things get cheaper, our entire life gets better. And just as it's cheaper today to get a banana than it was 100 years ago and that means there's more bananas, that means people consume more bananas. So the logic will still apply.

[John Coogan]

Let's go after bananas.

[Jordi]

They love bananas.

[Aaron Ginn]

I'll give you a layup for that.

[Jordi]

I love banana.

[John Coogan]

Great to see you, Aaron.

[Jordi]

Software is eating world. Warren. Software is eating bananas. Thank you so much for coming on the show. We shouldn't have booked 15 minutes, you should have booked two hours because it's always a fun chat. Thank you so much for taking the time. We'll talk to you soon. Have a great rest of your day. Merry Christmas.

[Aaron Ginn]

Merry Christmas.

[Jordi]

Merry Christmas to graphite.dev code review for the age of AI. Graphite helps teams on GitHub ship higher quality software faster. What's under the tree this Christmas? It's graphite.dev baby, put it in your. It's a great stocking stuffer. Up next, next we have Matt Kalish, the co founder of DraftKings. He's a board member at DraftKings. He's also a board member of Faze Media and he's the founder of Hardscope, which launches today. Let's bring him in to the TVPN ultradome. How are you doing, Matt?

[John Coogan]

Great to what's happening?

[Jordi]

Thanks so much for taking the time to.

[Matt Kalish]

Hey guys, how's it going today?

[Jordi]

It's going fantastic. Merry Christmas. Good.

[Emil Michael]

Merry Christmas.

[Jordi]

Please. For those who don't know you already, I'd love to kick off since this is the first time on your show with a little bit of your background, you have one of the more interesting backgrounds with DraftKings. How do you tell a story in, you know, in just a few minutes?

[Matt Kalish]

Well, I had a couple friends from some early corporate jobs in my career. You know, I came up through analytics technology and then over the years moved more into marketing and, and I met some of my two partners, Jason and Paul, really at those jobs. Jason at Capital One, we were early stage business analysts and then went to a company called vistaprint. That's where we learned direct marketing and we all had this entrepreneurial bug and we're really looking for the right opportunity to go and spin off and do something kind of in the startup world, which we had no experience doing, but.

We had that drive. So we looked at a million ideas and then DraftKings kind of stumbled along. We just felt like there was a lot of people that like predicting things in sports but didn't really have a great way to do it. So that was back in 2012. We launched the daily fantasy sports platform.

Over the course of a few years, grew that to over 10 million registered users and it became just kind of a big cultural phenomenon. And then come 2017, that's really when sports betting started opening up in the US so DraftKings was in a really great position to extend our product. Launched a sports betting platform first in the US Outside of Nevada and became a market leader in that space. And then over the years just kept developing out the product, went public in 2020 and, and it's been a really amazing ride, a growth story that I'm really proud of.

[Jordi]

Yeah, take me through. I'm sure there's a ton of questions that we can kick around around prediction markets and sports betting and what's going on there. But first, take us through the launch today. Take us through hard scope. How are you positioning that?

[Matt Kalish]

Yeah, I had a 14 year run at DraftKings that, that, you know, we've seen it all the ups and downs and, you know, built a really amazing team over the years. I have, you know, the type of team at DraftKings where if I don't come to work for a week, things are amazing and fine. I'm telling you, like the caliber, the people, the leadership there, the team has been built out just so well. And.

You know, I'm a builder at heart. I like starting things, I like participating in industries that are disruptive, that are in the middle of a lot of displacement change. And a couple years back I worked with one of the original founders of Faze to buy the company off the public market and bring it back private. And it's kind of a space that I'm just super intrigued by. The massive amount of disruption in media moving from traditional forms in the creator led to community.

This sort of decentralized media through social channels. And I've also found it really intriguing how content discovery has changed so much. Like short form clipping and the TikTok the shorts. That's how people are really finding content these days. And Faze is really one of the best in the world at that. So just kind of jumping in, rebuilding the business side of that team and kind of relaunching and bringing Faze back to number one in creator media. I was initial focus and I decided to leave DraftKings and transition out to do this full time to launch Hardscope, which is kind of the platform that Faze operates on. It's a talent and brand platform to access the creator economy at scale. And it's a space I just think is tremendously underserved and a really massive market opportunity. So I felt like it was the right time for me to go all in on that and I'm really excited to be doing it.

[Jordi]

So what's the.

Walk me through how to actually use the product? If you're a brand, does it feel like just autonomous marketplaces where brands are meeting creators? Are there?

[John Coogan]

Yeah, I guess. I guess a better question is like there's probably been. There's probably been how much hand holding is going on. There's. There's been maybe hundreds of attempts at building these sort of like brand creator marketplaces. A lot of them haven't. Some have turned into great businesses. There's been.

[Jordi]

Well, we were just talking about little.

[John Coogan]

To no like Venture last Friday.

[Jordi]

Shopmize is like sort of in the same space Space, correct.

[John Coogan]

Yeah. Greater commerce tool, but this is more advertising focus, is that correct?

[Matt Kalish]

What's special about Hardcoop is the impossible part is building the actual valuable content assets that brands want to be a part of and reach the audience. And that's what our team for talent does really well. It's a full stack operating platform. Like you literally don't need any other resources. We do it all in house. Production, socials, clipping, all the distribution side into commercialization like brand partnerships, e commerce, access to capital and venture for initiatives. And the reputation really of Faze as the Number one creator collective in the world is the proof. I mean, that's a group that operates with this team on this capability set. And so Hardscope is really bringing that to new creator collectives in more verticals, really high potential talent and platforming them to really make the most of the opportunity that they have, which is really unprecedented, the level of power and control over the content, their community and how to commercialize it that talent has today. It's, it's a totally new age really. And some creators have built out great teams, but most really have underrepresented teams in particularly the commercial side. You know, like, how do I take my great content and then maximize the opportunity as basically the CEO of a media business? And so.

[John Coogan]

So, yeah, let me. Yeah, I think, I think I was a little bit confused. So. So you're effectively like a back office for personality personalities, content creators, whatever you want to call them, to help manage everything from ad sales to editing to clipping content distribution effectively. Social media management, like kind of. Am I saying that correctly?

[Matt Kalish]

Yeah, I mean the landscape is laden with, with middlemen, let's just say, like the LA ecosystem is unbelievably brutal. There's middlemen for everything. And we're trying to provide really a full stack solution where you don't need all of this noise to run a really successful business. You need a great business partner, a great team. And we've proven that with the operations of Faze Clan and how that's come back in, you know, prominence as the number one creator collective. I mean, you're talking about a group that had the top seven accounts on Twitch last month that's growing in an unprecedented rate and people thought it was dead two years ago. So like we came in, relaunched the brand and totally turned that around. And that is the proof, you know, that's the proof of concept really that I think is attracting so much interest from other talent and other verticals.

[Jordi]

And.

[Matt Kalish]

You know, you had asked about the brand side. That's more my background, you know, I was a large media buyer at DraftKings. We have, you know, as you've probably seen a lot of advertising out there in the world, probably bought every channel you can think of. And the one channel that's hard for everyone is creator direct partnerships. Nobody does this well. And unless you are a pure play specialist, where your number one marketing strategy is through creator, you probably are doing this not so well right now. And traditional agencies who try to tack on things like YouTube buying or other creator products tend to not do that very well. At all. So we're seeing a lot of opportunity on the brand front to be almost like a new kind of agency of record. Right. Where we can focus just on creator direct partnerships to help kind of bifurcate that channel out from a lot of people just lump it in with audio or other kind of traditional definitions of channels. The opportunity is really breaking out creator direct into its own lane. And maybe it's 2 or 3% of media mix today, but the landscape is changing. This channel might be 20, 30% of people's media mix in the future. The Unilever said it's over half of their media mix in the next year. They're planning. So like a lot of companies are seeing like we are just not reaching Gen Z audiences that are diverse under 30 are just not watching traditional media. And this is the way to reach them.

[John Coogan]

Yeah, makes. Makes a lot of sense. How. How are you? How are you like financing? Hard scope? Do you have outside investors? Was it. Am I hearing it correctly? It was. You effectively took Faze private and is it the same entity or I'm curious how.

How you're planning to scale. Is this something that you want to just operate profitably, indefinitely, or is this something that you'd one day want to take public again?

[Matt Kalish]

Yeah, look, I mean, I've been funding it. I led the acquisition initially and the biggest reason was it was kind of a mess. I mean, the public company of Faze was in really rough shape. Shape and it needed a lot of work and putting in the two years to really rebuild the entire operation and also to relaunch the Branda phase. Have that in such a great place today. That was the upfront investment I viewed as getting the ball rolling, kind of building the initial momentum. And I didn't think it made a lot of sense to involve a ton of people in that. I thought it was something we had to prove as a team here. So there's no noise in the company, there's no outside.

Investors funding. I do think in this next stage, now that we've launched, as we scale up, there's a lot of interest I have and the team has in certain strategic partners. So I think. Including people that can be helpful to us.

Absolutely. I mean, that's something that we're going to be looking to do in the next year.

[John Coogan]

Makes sense. Little bit of a connection issue, by the way. Sorry, sorry if there's a lag. Have to ask you about your kind of personal views on the state of both traditional sports books, online sports books, gambling platforms, as well as Prediction markets. It's absolutely bloodbath on the timeline right now. Everybody involved seems to hate each other, even the investors on every side of it. And it's an absolutely wild time right now. How do you think this kind of category evolves over the next 12 to 24 months?

[Matt Kalish]

I mean, I love it. This is one of the most competitive spaces in the world. Right. Like you had mentioned with the creator economy, it's very competitive. All these different companies doing this or that. Like, great. I love that. Like, there is nothing better than having a, a super vibrant competitive marketplace for products having to compete and win, for customer engagement, for loyalty.

There's always some curveball in gaming and gambling and sports betting, whatever. Something new every year, some new competitor, some new kind of product variant. And I think the exchange, like how fast that's kind of come in since the election and evolved into a sports product.

You know, it's. It's a fascinating thing and I think it'll be very competitive. You know, DraftKings obviously announced they're launching an exchange. Pretty much everybody, I think, in the sports betting space has some plan here. And then there's the Kalshi Poly Market, you know, that rivalry. And.

We just look forward to competing. You know, I feel like DraftKings has proven world class technology team. We deliver leading products. We have the best customer satisfaction in the market. We pride ourselves on that. So competition's our favorite. It's like something that drives us.

That makes sense.

[John Coogan]

What percentage of content targeting men online do you think is entirely dependent on either gaming ad revenue? It feels like there's huge swaths of the Internet that honestly like wouldn't really exist, or creators who. I'm curious if you have any kind of internal estimates, even.

[Matt Kalish]

Like creator media.

[John Coogan]

Well, yeah, it just feels like I can think of a lot of Sagar.

[Jordi]

Was on the show talking about, like he was saying, like there's a bubble in sports podcasting specifically because of all the sponsorships that come from sports books. It's actually made. It's made a lot of people in the creator economy be able to go full time because they've been able to.

[John Coogan]

Have, I just think a lot of creators where you look at their business and you're like, okay, 90% of your revenue is from either some type of online casinos or sports books, et cetera.

[Matt Kalish]

Yeah, it's such a valuable category that going back to hard scope and expanding beyond just Faze Clan, which is a sort of mass market, super mainstream media business, you know, going into verticals like sports really aggressively you know, sports, food, like the content verticals that have a lot of really attractive partnerships is. That's kind of the whole purpose here is to represent the creator economy across all of the verticals. At scale for brands and in sports, you can build out entire content properties and invest in them knowing that it's going to be supported through some kind of deal, some kind of partnership. It's one of the sure things. So I feel like as a company that builds assets, that makes content from scratch, puts together creator collectives from scratch and scales them like we can invent these things knowing that the sports landscape, it's so vibrant that there's going to be deals there.

[Jordi]

Like the idea of study on food, you said that you're working on food channels and I think that.

That'S one area of the creator economy that has not been financialized yet and that feels like fertile ground to me. Obviously business channels don't threaten me with a good time. Exactly. Exactly. I don't know exactly how it would work. It's like I'm going to bake this cake. We're going to do a blind taste test. Whoever likes this more, they win. But I'm sure there will be an attempt at financializing baking channels in the future. The Great British Bake Off. I mean, there's probably a prediction market on it.

[John Coogan]

Will I burn the cookies or not?

[Jordi]

Will you burn the cookies or not? That's a good question. I don't know. Anyway, thank you so much for coming on the show. This is a lot of fun. Congratulations on launch and we will talk to you soon. Have a great rest of your day and Merry Christmas.

[Matt Kalish]

Hey, thanks for having me. Merry Christmas and you know, love to come on again in a year and give you some updates on all the great stuff we're up to.

[John Coogan]

Fabulous.

[Jordi]

Fantastic.

[John Coogan]

That'd be great anytime you have hot takes too on anything gaming or prediction markets related. I know it's a little tough since you're still on the DraftKings board. You gotta keep that in mind. But. But we appreciate the insight and congrats to the team on the launch.

[Jordi]

Thanks so much. All right guys, we'll talk to you soon.

[John Coogan]

Cheers.

[Jordi]

Goodbye. And let me tell you about public.com investing. For those who take it seriously, they got multi asset investing. They're trusted by millions. Public.com.

In a groundbreaking endeavor, the University of Utah athletics is entering into what could be a $500 million equity partnership with Otro Capital featuring the creation and shared ownership of a for profit entity to operate athletics sources. Tell Yahoo Sports. So college football is going to the big leagues. They're going to the private equity leagues. Private equity is now going to own your local college football team.

[John Coogan]

Oh, people absolutely hate this.

[Jordi]

The problem. I know, I hate it too.

[John Coogan]

Because here's what.

[Jordi]

Why are they stopping with college football?

[John Coogan]

Please.

[Jordi]

High school football, middle school, lower school, little league, preschool. Preschool. Let's financialize that. Let's get, let's roll them up. We actually, this is happening. We talked about the hockey rinks that have been sold to private equity rolled up and then you can't film your own children without paying for the.

[John Coogan]

Somebody out there that really hates private equity just yesterday was saying, you know, private equity has come for everything, but at least you can still go to a college football game.

[Jordi]

I don't know.

[John Coogan]

And again, so how do we think they're going to. You know, so sounds like they effectively sold for half a billion dollars. They just sold.

[Jordi]

Yeah.

[John Coogan]

You remember, it was Chicago, I think sold all their streets or their parking meters sovereign back in the day. It was like for like five years.

[Jordi]

Yeah. So I mean, the big thing is that you got to get the, you got to get the money, you got to get the deal. Right.

[John Coogan]

Yeah. So. So they, they, they basically buy a college team. Yeah, you can say that it's some more sophisticated structure than that. But effectively that's what happened.

[Jordi]

Yeah.

[John Coogan]

They'll have to immediately put draftkings.

[Jordi]

Yeah.

[John Coogan]

Or prediction market logos all over the helmet and all. All over the jersey. So that's, that's probably, that's probably, that's probably like a $50 million new revenue line that the college could never do.

[Jordi]

Yeah.

[John Coogan]

What else they could.

[Jordi]

So the current mascot for the University of Utah is Swoop, a red tailed hawk.

[John Coogan]

That's pretty cool.

[Jordi]

They could change it to drafty.

[John Coogan]

Drafting off the drafting. Okay. So another thing they could increase. If you want season tickets to the game, you're a student. They could. Of course they're going to jack up the prices. They're probably gonna make it like $20,000 a year.

[Jordi]

Let me steal, man, you're being too negative here.

[John Coogan]

$20,000 a year and they're gonna offer. The private equity firm can bring a private credit partner into the mix and help finance the season tickets. So you don't just graduate with student debt. You actually graduate with game day debt that will stay with you for decades.

[Jordi]

That's ridiculous. I mean, there are so many reasonable ways to monetize a football team over the entire life of ownership for the.

[Aaron Ginn]

This firm.

[John Coogan]

They could sell the windshield. They could sell.

[Jordi]

Yes, yes. It's very funny to sell everything, but, I mean, there is something that actually could be very good for academics at this school, because if you have $500 million in cash, you can go and build a new library, a new science lab, you can go build actual academic buildings. Yes. You don't really need to. And you don't need to worry about, like, okay, we got this donor. Somebody went to the University of Utah. They hit it big. They're a billionaire. They want to donate $500 million, but you know what? They just like football, so they're going to build us a new stadium. And you're like, but wait, wasn't the point of this whole thing, you know, unrestricted gifts wasn't the point. Academics. And that might not. That might be less of an issue now. So they might be able to fund more great academic activities and endeavors with this money. So, I don't know. It's very funny to make fun of. It's very funny to. To riff on, but there are some potentially really good outcomes that could happen. Anyway, we have our next guest. In the restream waiting room. We have Emil Michael, the Under Secretary of Defense for Research and Engineering of the United States. Emil, good to see you. Merry Christmas. How are you doing?

[John Coogan]

Welcome to the show.

[Emil Michael]

I'm doing great. Thanks for having me.

[Jordi]

Thank you so much for taking the time. You look fantastic.

[John Coogan]

Yeah. I would say thank you for wearing the suit, but unlike a lot of our guests, this is a daily driver, I'm sure.

[Jordi]

Yes, yes.

[Emil Michael]

Well, we were buying a high school.

[Matt Kalish]

Football team today, so I had to dress up.

[Jordi]

Oh, nice. That would be a real treat. Well, you're not.

Is it fair to say that you're buying Gemini? Are you buying tokens? Or is this one of those deals where the partnership is structured so that it's not really a major cash infusion for Google, or it's not a burden on the taxpayer there. It's a little bit more of just two great American institutions working together. How are you framing the deal.

[Emil Michael]

It'S making to 3 million Department of War employees? That includes military members and civilians. Access to Google Gemini on our network, which is a private network. Right. So you actually have to port it over. And they gave us a great deal.

[Jordi]

For the first year.

[Emil Michael]

It's like 47 cents.

So they're very patriotic. I'm super excited to have that at the hands of everyone at the Department of War. It's never happened before.

[Jordi]

Yeah. Were there historical examples that you were pulling from, like, Because I imagine that service members have been Googling things for a long time. I've heard stories about. I mean, even during the. The war in the Middle east, the war on terror, they were using Google Maps just to see satellite imagery. And there were a whole host of reasons why a war fighter might want to use a Google product. Is this a new structure? Are you building on the shoulders of giants? Do you feel like when you came in there, the Department of War had a good reference point for how to work with a big tech company like Google, or was it sort of new territory? How did you think about actually interfacing with Google?

[Emil Michael]

I mean, it's entirely new territory. Right. Because you could get those apps off the app store or on a web browser. So to get AI in, there's a lot of sort of fear about AI, what it could do. And then you have to remember when you're doing a Google search, like, yeah, it kind of records where you're searching. But if you're putting stuff in AI, you don't want that to leak back into the model. So you have to architect it in a unique way. So it's kind of new territory. And we did it all in, like, three months.

[Jordi]

That's amazing. Yeah. What did the team on the Google side look like? I imagine that they have a large team just for working with the government.

You mentioned a few. It was a few weeks of work. But what did they bring to bear to actually deliver this on their side?

[Emil Michael]

I mean, they had a ton of engineers, because you got to put it in our networks, which are not simple. Right. And you have 3 million people all over the world, all kinds of devices and so on. So they really brought the heat.

[Matt Kalish]

Right.

[Emil Michael]

And they had a. For today, for launch, they had a room, or war room, if you will, no pun intended, as a way to make sure that it launched.

[Jordi]

Correct.

[Emil Michael]

I mean, we got a lot of flack on Twitter today.

[John Coogan]

So, yeah, I saw these comments, but it was very obvious if you used one brain cell, that you needed to be on an actual approved device on a military network if you wanted to access the service. So.

I didn't get the flack.

[Emil Michael]

Yeah, well, people want to give flack just to give flack, right?

[John Coogan]

Well, I think some people wanted to. They wanted to try it out themselves. And it's like, well, if you want to do that, you can join, become a service member.

[Emil Michael]

Yeah. We put a link on the error message a few hours ago for job openings at Department of War. If they want to join, access to Gemini for government. We're open for business.

[Jordi]

Yeah. What else have been the highlights of the year? As you look back on the year, obviously confirmation took time, but then there was this big White House AI action plan. What are some key moments that you feel like have been maybe under discussed or under didn't get enough appreciation at the time?

[Emil Michael]

I mean, you know, there have been like three AI executive orders, which is a big deal. Right. And Jensen said the other day that no other administration has ever done this much for the AI companies. So we're really championing, championing like these four national champions. Right. Google, OpenAI, Anthropic and X and giving them like we're talking about, you know, data centers on military lands. We're talking about how do we get more power to these companies because it's a race. And I think we're the first group in the last six months to really realize that we better get great, we better get better and stay great and ahead of everyone else on this because it's really the next generation of tech.

[John Coogan]

On the subject of data centers on military bases or land, what kind of comps have you looked at on that side? I know there's historically in weapons manufacturing you have like go co, which seem like they would provide some framework, but how have you thought about that?

[Emil Michael]

We haven't thought about that yet. We haven't broken ground yet. Or to the business models we just had the executive order said we're going to do it and then we got to figure out how do you prioritize who gets what right. And we may reserve some of that data center capacity just for the government to use for our own purposes. But the point was to send a message that we're all in on AI companies, all in on the data center power chip needs of these companies in a way that the last administration, we think was just trying to constrain everything with these orders to, to really, you know, have one company win and that's it. So they can control sort of the outputs. We're not, we're going the other way. We're going to have all the national champions. We're going to support them all the way. You know, David Sachs is out there making sure the American tech stacks and all as many other countries that can be. And that's a big deal. Right. If anyone's going to be using AI, we want them to be on our stack.

[Jordi]

Yeah. How do you think about.

The fact that all of the big tech companies seem to be working with the United States government effectively for free? 47 cents. I've heard of deals of a dollar, as high as a dollar. But then I, I think back to a few decades ago where Microsoft had a deal to develop virtual reality headsets, augmented reality headsets for the U.S. government. And I think it was like a $10 billion deal. I was really excited when that project went over to Anduril because it's a lot younger, faster moving company now. I love Microsoft. I love them as an infrastructure provider and the fact that they have OpenAI's IP is amazing. There's a ton of great things that, that Microsoft does, but developing an AR headset that always felt like it was going to be a rough go. It was such a big burden on the taxpayer at $10 billion. Much better to see it in a different, in a different land, in a different company. How are you thinking about how the government is working with big tech? When to open up the pocketbook and write a billion dollar deal or when to ask for 47 cents?

[Emil Michael]

Yeah, I think we want these companies to be successful so we're going to pay them market rates eventually. It's just how do you get out of the gate? And you get out of the gate by giving 3 million people access and not having to worry about a token count every day. That's exciting to them because now they get 3 million more customers and they get to learn use cases and so on. So it kind of works for them, works for us, but we need to pay them fair rates. But they're going to be commercial. Yeah.

[Jordi]

And I imagine that when a new technology comes up like Gemini, there's just a lot of service members that are just not, by no fault of their own, just accidentally using it a little bit too cavalierly. And this is an initiative to actually refocus on security, refocus on privacy. But can you take me through some of the. I'm not particularly worried about Google having, you know, information from the American warfighter, but I am worried about some of the international chat bots having access to the American war fighters prompts. Can you take me through how the Department of War is thinking about LLMs like Deepseek, Alibaba, these other AI models? Are those just banned everywhere? How do you think about actually banning different, different.

Vectors of attacks from a security perspective?

[Emil Michael]

Yeah, well, I mean, first of all, we're going to train. Everyone is going to train if they want to use it for higher risk use cases. Right. But this is going to be on their devices, just like the web browser is, and they can still search Google. But when it comes to the foreign companies like Deep Seq and Chinese. In the bill that was just released by Congress, I think yesterday, we're going to ban Deepseek and all these foreign models from use by Dow members and contractors and anyone who touches it. Because last thing we want is for those models to get data on how we're using AI. Right. That would be a tragic mistake. So I think we're already there, but it's going to be in law pretty soon.

[Jordi]

Yeah.

[John Coogan]

What's your pitch to.

Talent to come work with the Department of War specifically in AI? It's like the craziest talent war of our lifetimes. Most likely. You know, you're trying to recruit people that can go get, I don't know, anything from a million dollars a year to $100 million a year to a billion even up.

[Jordi]

Some people make up to more literally a billion dollars.

[John Coogan]

And so I imagine you have to have a, you know, pretty dialed in pitch to recruit people. And it's. And, and maybe that pitch is you're going to be able to work on. I mean, in the H200 news today says that, you know, we aren't the, you know, the H200 is not like a F35. It's not military technology yet. But I'm sure there's a pitch to work with you and your team on actually applied AI in a military context. But what are those? How do those conversations go?

[Emil Michael]

Yeah, so I call them recruiting Tuesdays. Right. I spend all afternoon Tuesday calling, dialing for dollars, emailing, referencing, interviewing, and my whole team does that.

The pitches, okay, you have to have some patriotic instinct, obviously, but then maybe you're in between companies or you're just motivated. I mean, Elon has five companies and he still worked for the government for like seven months and brought a ton of doge people who are motivated by the mission. So I'm trying to motivate people by, hey, this is the biggest technology deployment in the world. There is no bigger organization than the Department of War. There's no more exquisite, crazy, interesting use cases, whether they're intelligence, war fighting, even corporate use cases, and you get to be a part of creating that. It's never been done before. It's a pretty good pitch. And then when you leave the Department of War and you've done that, I think you get more valuable in the private sector. All these big AI companies now have big federal businesses. They all have sort of cooperating with the government in different ways. And you have another notch on your belt of good stuff that you've done and been an innovator on, which is pretty rare in government to literally innovate while you're sitting in the job on something that's never been done before. That's that big.

[Jordi]

Yeah.

How do you think about.

The different levels of AI diffusion, AI integration, where AI can actually help the war fighter in the American context? I mean, a lot of people kind of watched the Palantir story evolve over the last few decades. This idea of analytics just putting dots on a map sometimes that being enough to identify where an enemy threat might be, for example. How do you think about integrating AI from the most mundane use cases of just speeding up a little bit of paperwork here and there to some of the bigger questions that we will ultimately face? The war fighters of today?

[Emil Michael]

Yeah. I mean, imagine the most simple use case is just like an employee in any big organization. Right. It's writing PowerPoints for you, writing job descriptions, making spreadsheets, the basics. Then there's the cool intelligence use cases. Imagine that we've got decades of satellite imagery, decades of that, or sensors that we've had, or all kinds of things. And now instead of one human analyst having to go like, I think I see that there. You can go back through 50 years, train a model and say, look for things you've never seen before. Right. And then on war fighting, logistics, planning, all kinds of simulations. If you want to simulate a war game in a really incredible way with all the data and all the stuff in there. So it's like pretty. Pretty compelling and exquisite to mundane that you could do with this stuff when you deploy it the right way.

[Jordi]

Yeah. How do you think about this partnership with Google?

It feels very much like giving almost the consumer product of Gemini to everyone in the military. How are you thinking about larger projects that might require bringing together custom code, multiple systems, multiple pieces. Just as a consumer, we're running into things where anthropic might be better for coding and one day. And the nano banana is better for this. And ChatGPT is good for deep research. And if you want to build a business, we see a lot of startups pull three different models off the shelf. Is that something you're starting to look at as like a phase two of AI integration into the military?

[Emil Michael]

Yeah. I mean, so ideally we'll have all four models and all four of the newest versions, like all the time at every classification line model. And the reason you want to go up through the classification levels is so you can do more exquisite work. Right. More complicated stuff. And then the reason you want all models is just what you said. If you're trying to write code, maybe you want to use Claude if you're trying to do these other things. So as they compete, we want to benefit from it and we've never had that here before. So it's trying to consumerize it, give choice, but then give more and more capabilities as you go up the chain of. Of security classification.

[Jordi]

Yeah. Who owns the data? Does the taxpayer own the data? Does the government own the data? I see a lot of stuff where it's like, oh, this company now owns. Google's going to have your government data. Google's going to have the data. It seems like they might be storing the data in some points, but they don't have authority over it. How do you frame to the American who's maybe worried about government overreach or wants to understand where important critical military data is living, who has control, who has final say?

[Emil Michael]

Yeah. So taxpayers own the government. Government owns the data on behalf of the taxpayers. Google does not own it. We control doesn't leave our control.

And that's why it was complicated to actually launch. Right. Because AI models are built so that they learn as you continue to query them.

[Matt Kalish]

Right.

[Emil Michael]

And to make it such that the model we got the latest model and it took in queries, but then the learnings from that don't go back into the general model is a form of making sure that the American taxpayers data doesn't leak anywhere else and just used for the purpose it was intended.

[Jordi]

Yeah.

[John Coogan]

How many other organizations, globally, allies, things like that need to take on a project like this? It feels like you clearly it's very important to move quickly because if 3 million people can't use the latest AI models in a secure way.

It'S not super sustainable. They'll eventually go elsewhere to get these products. Do you think a lot of other groups need to pursue a project like this? And are you guys trying to help create a framework so others can benefit?

[Emil Michael]

Yeah, I mean any. Well, so we all know and you guys know any large organization needs to be using AI just for efficiency purposes. Right. And just, you know, dollars and cents if your competitors showing More profit in Q1 relative to you because they have too much overhead, that could be solved with AI, you're going to be in trouble. So when you talk about governmental organizations, should every government be using it in some degree? Yeah, I mean, I mean it's sort of like an economic imperative, but it's like a strength imperative too. It's sort of like the way I describe it to people is you're opening the human context window. So we're not replacing a war fighter, but we're allowing the war fighter to do more with the same amount of time. Right. To analyze more intelligence, to do more scenario planning and all that. So I can't imagine any other organization like ours that wouldn't be thinking about this. But hopefully I think we are setting the pace here here. We're going to be the pace setter here for the US Government and for governments around the world.

[Jordi]

I love it. Well, thank you for setting the pace. Thank you also for coming on the show today.

[John Coogan]

This is fantastic, fantastic to have you and thank you. Thank you for all the work that you're doing.

[Jordi]

Yes, you guys, thanks for having me.

[John Coogan]

Every citizen, come back on anytime. Always welcome.

[Emil Michael]

All right, thanks a lot guys.

[John Coogan]

Have a great meal.

[Jordi]

Goodbye. Let me tell you about profound get your brand mentioned in chat GPT reach millions of of consumers who use AI to discover new products and brands. Patrick Collison had a post that hit the timeline. Rocked the timeline with 1.3 million views. He says. Two conversations this weekend make me think that there's a vibe shift a foot in Silicon Valley around what one should work on and what is worthwhile. Culturally, it feels like the moment is ripe for new frameworks. One Davos expert morality is stale and discredited.

[John Coogan]

Let's give it up for the experts Joe Rogan, Andrew Rubeman, Lex Friedman.

[Jordi]

Those guys don't podcast Davos. They're not Davos guys.

[John Coogan]

It's very possible the next Davos could just be a roundtable between Joe Rogan, Andrew Huberman.

[Jordi]

Yes, the real expert Williams, Modern experts, Lex Friedman.

[John Coogan]

We love that.

[Jordi]

That would be fantastic. It's also apparent that the quote just be super based counter enlightenment is not really an answer. Yes, woke went too far, but simply inverting it does not work. Good point. Effective altruism is no longer the automatic default for smart people. They pushed it too far. They tried to save too many shrimp from their farming fates and now they are cooked.

[John Coogan]

Sorry, shrimp.

[Jordi]

There is increasing skepticism of slot and slop machine dynamics. People don't want to work work on a slot machine. They don't want to work on a slot machine. They want to work on something worthy and valuable. The question is overall, what is worthy and valuable? It feels like this question is becoming more central. What do you think is worthy and valuable?

[John Coogan]

I think it's worthy and valuable that OpenAI hired Slack CEO Denise Dresser as Chief Revenue officer. It's a scoop. It's happening right now. Wait, OpenAI has hired Slack CEO Denise Dresser, chief Revenue Officer.

[Jordi]

That really flipped me for a second because they have a cfo, they have a CEO of applications. I don't know where CRO fits in, but they got someone and that's very exciting. Is that gong worthy?

[John Coogan]

I think it's very gong worthy.

And in other news.

We got some new space SpaceX news from Bloomberg. The chat had it first. Thank you guys. We were in the middle of chatting with Emil, but SpaceX plans to go public at a $1.5 trillion valuation, up from the rumored 800 billion just last week. They plan to raise $30 billion, raising I guess far above $30 billion. Anyways, so this is reporting. SpaceX is moving ahead with plans for an IPO that would seek to raise significantly more than 30 billion.

In a transaction. That would make it the biggest listing of all time. I'll hit this. The Elon led company is targeting valuation of above 1 1/2 trillion for the entire company, which would leave SpaceX near the market value that Saudi Aramco established during its record 2019 listing. The oil major raised 29 billion at the time. SpaceX's management and advisors are pursuing a listing as soon as mid to late 2026. The timing of the IPO could change based on market conditions. Let's hope the window stays open folks. We will do our best to hold it open. I hate when the IPO window is closed, but anyways, no comments from the SpaceX team, but they junk bond analyst says of course. Congratulations on saying the biggest number. Always great when you can say the biggest number.

[Jordi]

Yeah. So I.

[John Coogan]

You think that the timing here with Gavin going on about space data centers is just a coincidence? Or is this part of a.

Allocator conspiracy?

[Jordi]

I still believe the primac take that Elon has ran has run the AB test on public companies. Tesla was miserable. SpaceX was great. And so you want to stay private as long as possible. Funding is not drying up for SpaceX by any means. There's no real requirement to go public. There's no reason why he has to take that company public.

I don't know why stuff is leaking right now. It might just be some sort of head fake, but it doesn't seem critical to me. I don't know.

[John Coogan]

Certainly doesn't seem critical that they go public. I would just say you have two major leaks in the span of a week.

[Jordi]

It's just very different than the OpenAI thing where OpenAI, in order to win, they need to marshal all this capital. They need to become GPU rich. They need the GPU prices to fall. They need energy to get cheaper. They need everyone to do everything. They need everyone to get in line where. Whereas SpaceX is very much established. They have their supply chain set up. They've been in this business for 20 years. They're just cooking and compounding and I just don't see a need for them to marshal more capital or do anything really special. It does seem like there's something going on with. Okay, we're talking about a second third act here. But at the same time.

It'S not like Elon needs to take this company public. I don't know. Do you think he does?

[John Coogan]

No. A lot of great companies don't need to go public, but there's still a lot of reasons to go public.

[Jordi]

Yeah, yeah, yeah.

[John Coogan]

So what do you think?

[Jordi]

It would certainly be exciting and I think it would be a good, like, it would just be a. Like there's a lot of people that are, you know, into space and can't get, can't get any like allocation into us into space generally, you know, they just can't, they can't participate in the economic upset.

[John Coogan]

AST Mobile.

[Jordi]

That's it. That's it. But you can't, you can't go. EchoStar is the hold cup.

[John Coogan]

I wonder, I wonder. This is. The market's closed now, But I wonder EchoStar, which owns, I think it's 1012 billion of SpaceX stock.

[Jordi]

Yeah.

[John Coogan]

I wonder what that's doing up 6% today.

[Jordi]

Well, but it's been fluctuating so I mean, back to the Patrick Collison a.

[John Coogan]

Lot at the close.

[Jordi]

Back to the Patrick Collison post. Like what is worthy and what's valuable. Like I, I still honestly feel like SpaceX is one of the worthiest and most valuable missions.

In terms of just. It has no slot machine dynamic. It does not create slop. It is, I don't know, it seems above enlightenment, counter enlightenment, woke super basic. Yes, Elon runs it, but just as a company. Just the idea of like let's go to the moon, let's go to space, that should be apolitical. It doesn't, it doesn't even have the Davos expert morality impact on the environment. It's just like it's one of the purest missions in my opinion. And I feel like.

The reason. I think there's not.

There's something interesting about what Patrick is saying here where there is this highly worthy, highly valuable mission, but it's only, there's only 5,000 people that can really plan in that game. Maybe like 10,000 or something. Like, it's just not, it's just not a career path in America. It's not like I'm going into real estate, I'm going into lawyer, legal, I'm going into medicine, I'm going into lawyer.

[John Coogan]

Going into big oil.

[Jordi]

You can't, you can't just say, I'm going into the orbital economy, I'm studying and I'm going to, you know, maybe I'll work at SpaceX. But there's a whole, there's a whole host and like, go, you can go into tech. It's very, it's very accessible. You can just like go and get a job in tech. It's very hard to do that in space and make a career.

It's nowhere, it's nowhere near as easy as it is for tech. Because tech broadly just say, you just.

[John Coogan]

Go, you go into aerospace engineering and then you have optionality.

[Jordi]

It's very hard.

[John Coogan]

Try to land a job at a true space company. Or you can.

[Jordi]

So. Yes, but what if you're not, what if you're not cutting out to actually go do aerospace? What if your actual skill set is marketing? Well, you can go and be a marketer in tech. You can't go and be a marketer in space. It just doesn't happen. They hire like two marketers. Okay, there's no, there's no marketing.

[John Coogan]

Is that so?

[Jordi]

What I'm saying is that like, is that like this question, you're saying we.

[John Coogan]

Need a federal backstop on marketing jobs in the oriental economy?

[Jordi]

No, no, no.

[John Coogan]

I just don't see what the problem is.

[Jordi]

No, no, what I'm saying is that, is that there's a vibe shift because like, so Patrick Collison is asking the question, what is worthy? What is valuable? What is a valuable mission? And I'm saying I know what a valuable mission is. Going to Mars, going to the moon. SpaceX is a valuable mission, but 99% of people can't participate in that. They can't make that their life's work. Because if they're not cut out to be aerospace engineers, aerospace designers, if they're not, if that's not what they're great at, they just can't participate. Whereas when previously in previous eras, tech was organizing the world's information, don't be evil. It was just cool. Tech was the mission. Tech was the thing that was worthy and valuable. And so you could show up and say, I'm a finance guy, I got a job in tech, I'm a lawyer, I work in tech, I Am a marketer. I work in tech. No matter what your actual skill set was, you could come to technology, the technology industry, and have a career. And you can't do that in the orbital economy yet you can't do that in space because there just aren't that many jobs. And so I think there is something that's worthy and valuable. It's just not able to absorb the actual demand for worthy and valuable career paths. And so for a lot of the marketers, for a lot of the lawyers, for a lot of the financiers, they wind up being forced to work in slot machine companies or slop machine companies companies, because those are the ones that have the jobs. They have 10,000 jobs available. I don't know. That's sort of a hot take.

[John Coogan]

Yeah, I think that's fair. I just would. I think you could. You could. You could also make the argument that many people are looking at jobs at, say, like, a Boom supersonic, and they're choosing. They're just making the choice to work at the infinite slot machine company.

[Jordi]

That's fair. That's fair. Well, hopefully they'll read Patrick Collison's post. They'll say what's worthy and valuable. I got to work for Boom Supersonic. I got to work for Blake Scholl, who's our next guest. So while we bring him in from the Restream waiting room, let me tell you about getbezel.com, shop. Over 26,000 luxury watches fully authenticated in house by Bezel's team of experts. We have Blake Shoal. Look at Blake Scholl.

[Emil Michael]

Wow.

[Jordi]

He is in a jet.

[Matt Kalish]

Oh, yeah.

[Blake Scholl]

He can fly.

[Jordi]

I forgot you can fly. Fly, right?

[Blake Scholl]

Hang on, guys. I gotta shut the engines down.

[Jordi]

This is crazy. What is going on here? Wow, look at this Mike Captain. It's been a complete rat race to try and put on the most insane performance during a TVPN interview. I think this is gonna take the cake. Blake, how are you doing? Introduce yourself. What's going on today?

[Blake Scholl]

Hey, guys. It's good to see you. Thank you for having me. It's a big day at Boom.

[Jordi]

This is a huge day at Boom.

[John Coogan]

I'm so happy.

[Jordi]

This is amazing.

[John Coogan]

Look at this.

[Jordi]

Okay, where are we? Take us through this.

[Blake Scholl]

So we are in the Boom supersonic factory. This, of course, is the XB1 airplane. This is the airplane that broke the speed of sound in January.

[John Coogan]

Wow.

[Blake Scholl]

The airplane that resulted in supersonic flight.

[Jordi]

Being legal again in the US So.

[Blake Scholl]

It'S blown wide open.

But, you know, A year ago we were joking that it would be way easier to fund this company if we were an AI company.

[Jordi]

We were laughing. Yes, I think we talked about that on the show. That's right.

[Blake Scholl]

Yes, it turns out we are. So the engine that we're building, that we've been building for almost four years now to power our Overture supersonic airliner makes the perfect ground power turbine for AI. And so that's today's news. We've got a product called superpower 42 megawatts, natural gas. It's going into data centers. Crusoe is our launch customer. We're going to be generating tokens and quiet sonic booms.

[Jordi]

That's amazing. That's amazing.

[Blake Scholl]

So you guys want to see the factory?

[Jordi]

Absolutely.

[John Coogan]

Give us a tour.

[Jordi]

Give us a tour.

[Blake Scholl]

So one of the things that anybody building in hard tech learns quickly is that the legacy aerospace supply chain is just really screwed up. And so we are building this factory to go from raw materials in one side of the building and completed jet engines out the other side. So this is some of the raw material that's just come in. This is 17 pH hardened stainless steel. It's heat treated. This is what they call the hot stuff. And I missed the gym this morning.

[John Coogan]

So do a little bit here.

[Blake Scholl]

But this is going to turn into stage five. Stator vanes that go inside the engine and the super power gas turbine.

So one of the most amazing, surprising things is that technology that is ideal for supersonic passenger flight is actually the same thing you need to power a data center. So this is Elon pioneered this at Colossus. Sam's doing the same thing at Stargate. These large arrays of what are called aero derivative jet engines. And they're like the blade servers of the energy world. I put a lot of them in array. And just the same way blade servers beat mainframes, aero derivative turbines could beat mainframe gas turbines. So let's talk about how they work. This is a 1/3 scale model of our engine. It works on a complicated principle. Suck, squeeze, bang, blow. All right, so let's break that down. Air comes in this way. This thing spins super high RPM compresses. You can see the blades get smaller as you go in, getting the air down to about a 20 to 1 compression ratio. Burners in here. This can run on jet fuel and also run on natural gas just with the different fuel nozzles and it goes out the back here. So the model you're looking at here is what powers the airplane. The model that powers AI is very Similar. We basically take the fan off the front, we lose these two turbine stages, and then we have what's called a free power turbine on the back. Three stages that extract energy, spin a second shaft and that powers a 42 megawatt generator. So like I said, the vision here is we're going from raw materials on one side of the building, completed engines off the other side. The facility we're standing in now is going to do the first 200 megawatts over the next about 18 months.

[Jordi]

That's pretty sick.

[Blake Scholl]

And then we're building a much larger factory that's to be able to do 2 gigawatts a year. And we're just going to scale from there.

[Jordi]

Wow.

[Blake Scholl]

So let's go inside the shop.

[Jordi]

Yeah. And this is all on the back of. It was seen as controversial that boom did not just white label another engine from another company. Correct. And now it's sort of come back to benefit you. Is that the correct narrative?

[Blake Scholl]

I think that's correct. I mean, people called us crazy to not outsource our engine. Frankly, I was a little bit nervous about it. How is this really going to go? It's the best decision we ever made. We're getting a fully custom engine for about a quarter of the development cost. It enables things like boomless cruise. Could not do boomless without our own engine. It enables a totally new passenger experience. Haven't revealed it yet. And then I think the most important thing is we can now take that same engine core, put a power turbine on it and get to profitability years faster than otherwise we could have. And this makes basically superpower. Makes not just electricity. It makes capital and it makes the capital that finances the capital expensive development of the Overture passenger airliner. Let me walk you around the shop here. This is basically the first year unit. If what we will copy paste into the facility, that will do 2 gigawatts per year. What are jejins made of? Well, you've got big round things. And actually if you look inside this machine here, this is called a turn mill. This machine weighs 65,000 pounds. And spinning on it right now is a 4,000 pound donut of cast inconel. And that's a nickel alloy. This is a relatively hard alloy. This is going to be the turbine center exhaust frame. This is the first very large part that we're machining in house. So big round things. Then you've also got discs with blades all around them. That's called blisks. These are some of the hardest to make parts. And so we have started what we call the Blisk Krieg. And this machine here is actually a more than 5 axis machine.

So this will hold a disc of forged titanium or forged powder metal, super alloy. And then the disc will kind of rotate in and out like this while another cutter head comes down and basically sculpts each individual compressor blade out of metal. So we ultimately we're going to have a whole bunch of these machines cranking out discs over here on the other side. This is part of an automated production line or compressor blades. So to give you an example of this, this is the. What's called the stage one variable guide vane. So this goes in the front part of the compressor section of the engine. These actually move as the engine changes power settings to have the optimal airflow. And this machine here starts with that bar stock, those kind of heavy beams I was showing you outside in the hangar floor. Comes in on this feeder in one side, gets held in the machine, the cutter head comes over, cuts it away. Another gripper comes over, grabs it, machines the backside. A robotic arm comes in, grabs it, puts it on the table, we start the next one. So this thing is ultimately going to be able to run 247 building engine parts.

[Jordi]

Quick questions about the factory. Where are we? Where is this factory and how big is it overall? Square footage, roughly.

[Blake Scholl]

Yeah. So this building is about 70,000 square feet. It is five minutes from our engineering HQ in South Denver. And we're about to open early next year another factory that is three times the size of this one. And that's what's going to be able to do 2 gigawatts a year.

[Jordi]

Yeah.

[John Coogan]

So.

What are the key challenges now? This feels hard, but maybe more straightforward than supersonic commercial. Commercial flight. Like what are you guys doing?

[Jordi]

Less approvals.

[John Coogan]

Yeah, yeah, exactly. And have like massive, massive demand. Yeah. What are kind of like the key challenges that you and the team are looking out for to be able to deliver on the timeline that you were talking about?

[Blake Scholl]

Yeah. So after having done a boomless supersonic jet that was safety critical with a pilot on board, this feels like doing it on easy mode, literally. XB1 had 68,000 parts. 68,000 parts. And they're all safety critical. The turbine has less than 2,000. And so there's going to be a lot of challenge in getting that to work, getting to work reliably, getting manufacturing up to scale. But after having done XB1, it feels like easy mode. We've got customers that are going to take as much as we can possibly make as Fast as we can make it today, we've got the capital to go do that.

[Jordi]

How much capital?

[Blake Scholl]

300 million. And.

[Jordi]

Congratulations.

[Blake Scholl]

Thank you. Thank you. After basically continuously fundraising for about a decade, I can't tell you how good it feels to have raised the round that lets us ship the revenue product that then produces the cash to fund the rest of the stuff. So we're done fundraising. This is the last equity round we ever have to do.

[Jordi]

Let's go.

[John Coogan]

That's incredible. How was the first night's sleep after you closed the round?

I imagine that that was a pretty. Pretty surreal moment. Even though you're still just getting started. I would say.

People are going to be a natural concern. Is like, does this mean we're not getting. We're not going to get the supersonic commercial aircraft? You. Obviously.

I haven't lost any faith. This feels like an intelligent move in order to enable that future, basically by the company any time to get us to that point. But what do you have to say to anybody that might be wavering?

[Blake Scholl]

Yeah. If you want superfluid passenger flight to exist, you should be very, very excited about this. Is that the single biggest challenges we had were how do we prove that we have a reliable engine and where do we get all the money to do it? And running this thing on the ground proves the engine is reliable and it literally prints the cash that we need to go develop the airplane. So I think this takes us from. From less than 50% chance of success to a far greater chance of success. I think Overture supersonic flight is basically inevitable at this point. Some people are saying, oh, Blake got lost. I'm just going to become an energy guy. And it's like, guys, I didn't bust my ass for 10 years in order to only make power turbines. I'm very excited with the power turbine business. America needs it. We're losing to China. We really need this. But this is absolutely our bridge to the even bigger opportunity to just reinvent all commercial aviation.

[John Coogan]

Makes a lot of sense from looking at the existing sort of turbine landscape. A lot of them have supply chain challenges. Is part of Boom's edge that you guys are so used to making all of your own componentry and parts that that you basically effectively just need the raw materials and you can make stuff happen. How are you kind of avoiding maybe some of the other delays that legacy manufacturers are experiencing?

[Blake Scholl]

Yeah, well, I think you named it. Being able to build our own parts is huge. And the room I'm standing in here does not exist at ge does not exist At Rolls Royce.

In the sort of Jack Welch era of, of everyone getting focused on return on net assets, by the way, what a random metric. They all sold off their supply chains and they can't make anything anymore. And now we hire disaffected engineers out of Pratt, out of GE and they're like, holy Toledo. We can resolve in an hour what used to take us three weeks or three months to do at our last companies because they didn't have access to hardware. And if they ever wanted to change anything, it's really hard to change. That's actually one of the biggest innovations here is what we're doing is we're trying to make the world of atoms more like the world of bits. And you can iterate, you can evolve, you can change. And part of that is about taking software engineers, putting them on hardware engineering teams and automating design workflows. So that means we can change digital designs really quickly. When we learn the other piece is how quickly can we turn apart. If we take a turbine blade and we send it to a traditional supplier to be managed, made, it's going to take six, maybe nine months for us to get that part back. Going from digital design to hardware, what that means is if you're the engineer designing it and you get it wrong, like it's really bad, you've set the whole company back six, nine months. So now there's a lot of hand wringing, now there's analysis paralysis. Now you got to have layers of managers double checking everything. Now you're really slow, but if you build that part in house, you can actually turn a turbine blade in 24 hours with a 3D print process, heat treat, braze, get it out into the engine. So what we can do is iterate really quickly. So we're liberating engineers to move really fast because if they make a mistake, if they want to do an iteration, we can turn it in days or hours in the same building that they work in.

[John Coogan]

That's super powerful.

[Blake Scholl]

I see what you did there.

[Jordi]

That was great. Was that accidental?

[Emil Michael]

I don't know.

[Jordi]

I love it. I love it. Is there, is there anything that you've been tracking on the regulation side that you think needs to change? We were talking about.

Making boomless crews legal, removing speed limits for high speed travel. If you were to wave a magic wand, is there anything that you'd change around energy production in America today to accelerate reindustrialization and everything, Everything.

[Blake Scholl]

It's much bigger than energy production. We have, we have a huge problem that I think not Enough people are talking about which was we have a permission based approach to building, not a freedom to innovate approach to building. If we drove to work the way we build buildings or permit energy plants, you'd have to go file a plan. You have to list out exactly what turns you're going to take. You're going to promise that you're going to stop at every stop sign, not run through any red line, always drive the speed limit and then some bureaucrats go to sign off on that and then finally you can drive to work. It's insane. That's the way we build a building. That's the way we build a power plant. I think we need to go from permission based, which just inserts huge delays and huge costs to hey, we're going to have a rule book. We're going to have commonplace rules and then you can pledge to follow them and if you break them, then you get fined or you get in trouble or you get your permits taken. But I think we have to really get rid of the entire concept of market pre approvals if we want to move fast. It's really holding America up right now. It's the biggest problem with building anything physical.

[Jordi]

Yeah, yeah.

[John Coogan]

Are you guys hiring at all right now?

[Blake Scholl]

We're hiring as fast as we can find great people. So in fact, I figured, in fact, I'll plug this if you'll let me. If you go to boomsheepersonic.com referral and you send to somebody. Great. We're looking for great engineers. Hardware, software, mechanical propulsion, everything. Technicians, CNC machinists. It's hard to find enough great CNC machinists send to somebody. We will send you a free Overture desktop model if we end up hiring that person.

[Jordi]

I love it.

[John Coogan]

That's very cool.

[Jordi]

That's very cool.

[John Coogan]

Well, this has been the best hard tech tour we've ever gotten. We've had a number of people attempt what you just did. It always goes poorly.

[Jordi]

Yeah, there was no stakes. It's very high stakes because like anything can go wrong with like your wi fi or anything. I'm very impressed. This was amazing. And honestly, it was just like chilling, watching, learning. This was really awesome. Normally I have to ask way more questions to get information, but this was really informative.

[John Coogan]

I'm so excited for you and the team put together. Great group of people.

[Jordi]

What a crazy story. I mean, I'm sure like the job not finished, the book has not been written. But you know, I've followed your career for a long time and.

You'Re on an amazing run, doing an amazing thing. So we appreciate you taking the time to come talk to us.

[Blake Scholl]

Appreciate your having me and making this so much fun. Thank you, guys.

[Jordi]

Have a great day. Merry Christmas.

[John Coogan]

Cheers to the whole team.

[Blake Scholl]

Merry Christmas. Over and out.

[John Coogan]

Goodbye.

[Jordi]

Eight sleep.com exceptional sleep without exception. You close the $300 million round, you need to sleep on an eight sleep. Fall asleep faster, sleep deeper, wake up energized. If you're trying to build a 42 megawatt natural gas turbine while working on a supersonic jet, I definitely need to.

[John Coogan]

Get my eight sleep to be powered by a natural gas turbine. I want to just give me a mini boom turbine for my bedroom.

[Jordi]

Yes.

[John Coogan]

Least just a small one. It doesn't have to be full scale.

[Jordi]

Yeah.

[John Coogan]

But just something small that I can really rely on.

[Jordi]

Yeah.

[John Coogan]

Because, yeah, it is weird.

[Jordi]

The eight sleeps, you plug it into the wall, it's electric. You could get a diesel. A diesel version. You just fill it up with a little bit of diesel and then you pull. Start it like a lawnmower and just.

[John Coogan]

Leave the window open.

[Jordi]

Yeah.

[John Coogan]

So there's some air.

[Jordi]

Yeah. I mean, the exhaust needs to, like, kind of flow out of the house, but.

[John Coogan]

Or you could wear a mask and just run a. Like a.

[Jordi]

Well, that could be diesel powered, too.

Sleep apnea.

[John Coogan]

Pulling air out.

[Jordi]

That's pulling out.

[John Coogan]

That's fresh.

[Jordi]

Exactly.

[Matt Kalish]

Exactly.

[John Coogan]

Yeah.

[Jordi]

But then you have a diesel motor running in. You put your whole house on your face.

[John Coogan]

Your face is potentially kind of vibrating. But be good. Can see it.

[Jordi]

Well, people are starting to talk some trash about the old Meta superintelligence lab, WHO 0.005 seconds, says it's now painfully obvious that Meta Superintelligence Lab went on a massive hiring spree, promised the world, and delivered absolutely nothing. There has been a mass exodus. I feel like Alex Wang was a colossal mishire. When is Zuck going to clean house and admit his mistake?

[John Coogan]

Let him cook.

[Jordi]

Let him cook.

[John Coogan]

Let him cook. I was the first one. I was the first one to say that Meta Vibes, like, should never have been released or at least advertised publicly. I think it was definitively just not a good product.

But let them cook. Let him cook. Yeah. Again, the mistake is, like, people are going to judge the first thing that your new organization releases. It felt rushed. It looked bad in comparison to Sora, but we need to see the next version of Llama. I'm sure they'll call it something else. But give them more than what should they actually give them more than six months.

[Jordi]

Like Google has been able. Gemini I feel like has been able to carve out a really unique, unique position with nanobanana and it went viral. And this was Anj Ne's Andreessen at the time, Anjnay's take about the Empire Strikes Back. And I have found that.

Having the best video model is a reason for people to go to your app. Having the best audio model, the best photo model, the best Deep Research product.

[John Coogan]

Anna Banana is what the rotisserie chicken is to Costco Nano.

[Jordi]

This is a great analogy. Great analogy, right?

[John Coogan]

It's a loss leader. It's like come in, make a bunch of images. We're going to lose a lot of money but we're going to get you hooked on our bread and butter, our language model.

[Jordi]

And so Yeah, I mean OpenAI has obviously developed just a great like back and forth chat experience. The voice mode is really dominant there. The Deep Research product.

[John Coogan]

It's possible that Zuck wanted his true believers to be able to accumulate Meta shares at around the one and half a half trillion dollar mark because he wants to reward his most loyal soldiers potentially.

[Jordi]

Stammy here says Limitless is acquired by Meta today. End to a lovely journey with Rewind and Limitless. And Ryan Jones says Suzaki is going on a generational run of Max Paranoid. Missing Mobile really, really, really scared him because he just bought an AI wearable startup. He's still spending on the Metaverse.

[John Coogan]

I think it's obvious that Meta is just going to keep shipping hardware. I think that this, the Limitless acquisition look like, you know, a soft landing for a team that had proven that they can ship products again. They did that. I know they had customers because some of the customers were mad that Meta acquired them and they were talking about it. So yeah, shouldn't be a surprise. I don't think you can. I think it's hard to argue that Meta should just ignore any forward thinking product lines and just do.

[Jordi]

Yeah. Well, speaking of the Metaverse, we should watch this video of a robot that was clearly being teleoperated. Absolutely. Destroying a water bottle. It's one of the craziest videos I've ever seen. This is like so insane. So the operator clearly takes off. It feels like it should be AI or something.

[Emil Michael]

Something.

[John Coogan]

Daniel says the hand coming down with.

[Jordi]

Enough horseshoes, which is not easy to do if you just have a water bottle and you can't just rip that thing open. But.

The robot tele operator takes the VR glasses off and then the robot just falls backwards.

[John Coogan]

See ya.

[Jordi]

Is this real?

[John Coogan]

Imagine having One of these hanging out.

[Jordi]

It's comedic genius.

[John Coogan]

Imagine having one of these hanging out in your office and it's just running bitch all the time. Like its whole goal. I have kind of class clown energy in the office, but if I could outsource that to Optimus and just be able to focus more on my work. And Optimus is just going around running bits. I mean that.

[Jordi]

You know what we have to do? We have to get one of these robots that. You know how so many of the robots are claiming, like, we're going to do your dishes. We're going to do your dishes. I want to just have. Okay, we're going to all have a nice glass of wine. We're going to put 50 different glasses, wine glasses of all slightly different shapes on the table and just tell the robot, hey, clean up the wine glasses. Just load them all in the dishwasher. Nothing's. I can barely do that.

[John Coogan]

I can barely do that without breaking.

[Jordi]

Oh, yeah. All the time I'm smashing these things. Can you imagine one of these robots just completely decimating the.

[John Coogan]

Sure. I'll unload the dishwasher just in there.

[Jordi]

Oh, no, no, no. Please. Allow me. Allow me to unload your finest crystal stemware.

[John Coogan]

This would be.

[Jordi]

Allow me to unload your stemware.

[John Coogan]

You discover an edge case where the robot thinks, well, to unload the dishwasher, I should break every glass and use a vacuum and just vacuum it out. Way easier than just taking them all out at once.

[Jordi]

Oh, oh, oh, sorry, sir, would you like me to polish your fine stemware?

[John Coogan]

I'll polish it into dust.

[Jordi]

Polishes it into dust. Anyway, our next guest is in the Restream waiting room. First, let me tell you about adquick.com out of them advertising made easy and measurable Plan, Buy and measure out of home with precision. We have Naveen Rao from Unconventional CEO of Unconventional AI in the Restream waiting room.

[John Coogan]

Naveen, welcome to the show. Thank you.

[Naveen Rao]

Thanks for having me.

[John Coogan]

Let's jump right into an introduction on yourself health companies you built in the past. And then we'll get into unconventional.

[Naveen Rao]

Yeah. So I was. The first company I built in the AI space was called Nirvana. It was actually their first AI chip company. That was back in 2014, before most people knew what machine learning was.

[John Coogan]

Just a little too. A little too early. But you're back.

[Naveen Rao]

I think it was actually decent timing, to be honest with you, but I think I sold too early, to be honest. The second company was actually moving more toward the software and algorithmic side called Mosaic ML sold that to Databricks back in 2023. And I led AI at Databricks up until just a couple months ago where I left to start Unconventional.

[John Coogan]

Incredible. So, yeah, jump right into it. Talk about the vision. I feel like you guys, the perfect amount of controversy yesterday because people were latching on to not a seed round at a $500 million valuation, but 500 million of capital invested at the seed round. It was honestly perfect. You want a little bit of spice on the timeline to get attention and I'm sure there's been a ton of inbound interest both from the candidate side and future customers.

[Naveen Rao]

Yeah, I mean, obviously that was somewhat intentional. We wanted to have a big shocking moment, but I think it's actually pretty rational when you think about the opportunity ahead of us. So. So what we're doing at Unconventional is rethinking how a computer works. The computers that we use today, the fundamental distractions, have been around for nearly 80 years. And it's kind of weird to think about in the tech industry something being around for 80 years, but it really is true. And now we've come to the point where we've pushed that paradigm as far as we can push it. Fundamental constraints around energy are now hitting us at the global level. If we keep scaling AI like we're doing, I mean, I think AI is amazing. I use it all the time and I think the rest of the world is going to do that too. We can't get there. We're going to run out of energy to scale these things up because it requires very power hungry chips. So really we are saying, can we rethink the paradigm actually from the circuit level up and build something that's vastly more efficient, like a thousand times more efficient than what we've been building and focusing on? Focus only on AI. We don't need to do accounting software and artillery calculations and all the things that traditional computers do. We'll let that be in the realm of digital machines. But can we build something that's much more efficient for the substrate of AI? And so the opportunity ahead of us I think is nearly infinite. And that's why valuation actually can make some rational sense.

[Jordi]

So what does your supply chain look like or what do you think it will look like? Like in the near future?

[Matt Kalish]

Yeah.

[Naveen Rao]

I mean, when we started this project, there were two fundamental constraints I put on it. One is that we have to be able to solve the problem within five years because this problem is going to hit us in three or four years and we need to have a solution ready Then at that point, when we have a solution, you can't have something that's like, I've solved the science problem now what we have to be able to manufacture it, so we have to have scalable manufacturing. So we believe we can solve this problem in a big way within five years. That actually leverages the silicon ecosystem. So we do want to manufacture it on standard lithography techniques now.

[Jordi]

Interesting. Yeah, ASML could potentially be a partner in the next five years. Like they're not off the table.

[Naveen Rao]

Yeah, TSMC we were talking with already, you know, I was out in Taiwan just a few weeks ago for this purpose and you know, it doesn't mean that's the end, the be all, end all. What we're doing is really building a new set of abstractions. Like a computer is built on a digital abstraction. Can we move away from that and actually move to something that is more amenable to using fundamental dynamics of the substrate? And if we can do that, we can actually open up the world to a whole new set of potential substrates. Silicon is one of them and maybe there'll be more exotic things. I've talked to folks who are building 3D printed circuits and all kinds of crazy stuff. And so I think the world is going to be very rich in the next 20 years in terms of new capabilities. Right now we got to leverage what, what we have.

[Jordi]

Yeah, I mean, in terms of leveraging what we have, I feel like there's been movement from. Okay, Nvidia, GPUs are bust. Everyone's just doing that. Then we got some serious movement this year from AMD stepping it up. We got TPU, Trainium's looking pretty good. There's like these ASICs are doing well. There's a whole crop of ASIC startups that are saying, hey, we're going to bake the transformer right onto the silicon. They're going with tsmc. Can you help me understand how you were thinking about.

Creating something that's higher performance but still leaving enough flexibility to be able to actually work with whatever the next algorithmic paradigm looks like?

[Naveen Rao]

Yeah, I mean, one part of what we're doing is a very deep co design. So we're not saying here's a transformer and it's immutable. We're not looking at it like that. The way you define the neural network itself is something that we're going to change and actually link to the hardware. And if you look at biology, there is no difference between the definition of the neural network and the physical substrate. They're one and the same. So the dynamics, the physics of those neurons actually gives you the algorithmic richness that you have. So we want to move more in that direction. It's not this abstraction on a digital machine which is built out of numerics. All the machines that you highlighted just then, which all have a wonderful purpose by the way, all work on the same fundamental abstraction. They all use bits to represent numbers and those numbers represent weights that then are manipulated in some way to build a neural network. We're actually talking about building those sort of effective numerics on the physics, on the fundamental properties.

[Jordi]

Do you have a view on. We were reflecting on this Marc Benioff post earlier in the show. He was kind of making the argument that LLMs are going to commoditize, that it's like hard disks and you're going to be able to move them around. There's not a lot of value or not a lot of lock in at the. Okay, I got this bag of weights layer and I'm wondering if you have a view on how the foundation model landscape will evolve over the next five years. Years, Because I want to know what your customer mix looks like, but you can kind of tie that together however you like.

[Naveen Rao]

Yeah, I mean, transformers are something that works really well today. We were able to scale it up. We were able to prove out that we can build synthetic systems that learn. I think that was enormous in the last several years. Right. And actually not just that learn that can learn, but can be useful. So now it's about, okay, well, we can define what useful is. Now we have these quality metrics for what a token token is. That actually has opened up a whole new world to me in a sense where I can say, well, as long as I can supply that quality, I don't really care if it's a transformer. I don't really care what it looks like. And if I can do so very cheaply and very fast, that's all I care about. So now we're really getting to this almost pure play supply of intelligence. That's what we want. So now if that's the abstraction, it's not about a transformer, it's about intelligence. And I can define that with some methods metrics. Okay. Now I can supply that in new ways. And so that's the way we're looking at it. Like, I'm not looking at the world today, I'm looking at the world in four or five years in terms of a product.

[John Coogan]

Yeah.

Can you break down more specifically what you Expect your kind of first initial customer cohorts to look like.

[Naveen Rao]

Yeah, I mean, the way we're going to see all of this stuff expressed is really a much cheaper per token cost, like 1/500th of cost per token or something like that.

I think our cohort is really, at first, we're going to go after data center as the fundamental rollout. But anyone who's using intelligence for an application at that point, they're going to actually have probably strict requirements on what the capabilities of the models are, what the token quality is defined as. So when we have that metric, we can build toward it. We can say, okay, well GPT 8 or whatever it is at that point gives me this. And is there a way I can recapitulate that in a, in the kind of neural network we're defining? And the answer should be yes. And so we, we will have kind of strict specs in, in a way to build toward, in terms of what that intelligence token really means. And so it's, it's really our, our customer cohort will be anyone who's using AI as part of their application.

[Artistic (Brex CBO)]

Application.

[Naveen Rao]

And we want to supply that faster, cheaper, and eventually in a more ubiquitous way. I mean, personally, if I really want to look out there, like 10 years, I think robotics are going to be huge. And I think robotics require us to solve this problem of bringing energy down drastically, to actually have more processing on the bot itself. That's how we're really going to open up this world of autonomy. And so personally, I think that's where I'm really excited. Maybe that's just the kid in me excited about seeing that future, but I think that's where we're going to go.

[Jordi]

Yeah. I mean, I know you talked a little bit about the size of the seed round, but can you help me understand a little bit more? $475 million is a ton of money.

Is there like a bill that you see yourself paying? Really? Yeah, I'm going to spend $200 million on this, or is it more like you're just going to be operating at the level of like, okay, we're burning $100 million a year on a lot of top engineers and AI scientists and like, it's just a big organization early and you're just kind of jumping to growth stage, company scale as fast as possible?

[Naveen Rao]

Not really that. So I don't anticipate the company becoming huge in terms of people call it 80 to 100 people, steady state for a while.

[Jordi]

Yeah.

[Naveen Rao]

But much like a frontier lab, like a Frontier Lab spends a bunch of money on GPUs to iterate.

[Jordi]

Yep.

[Naveen Rao]

Like training GPT5, maybe 30 million bucks. But you got to follow a bunch of dead ends.

[Matt Kalish]

Right.

[Naveen Rao]

And you do that with GPU compute. Our version of that is actually building hardware.

[Jordi]

Okay.

[Naveen Rao]

So we're going to be fabricating chips, we're going to be trying different things. It's very hard to model some of this stuff actually numerically. And you know, we're going to do our best to model it, scale up that modeling actually on GPUs. But at the end of the day, you got to build it, you got to test it, and you got to see if the whole thing works end to end. And we're going to do, do that a whole bunch of times.

[Jordi]

Yeah.

[John Coogan]

How are you planning to actually use existing gen AI, kind of the existing Genai stack to accelerate your own development of an alternative to traditional GPUs?

[Naveen Rao]

Yeah, actually that's a great question. It's really interesting as we start clicking into the tools for designing hardware, they're still pretty far behind.

Automation of digital logic has been done to some degree as coding tools, but on the analog side, this is still relatively new. And we are seeing now companies that are saying, hey, I can explore the design space of different circuit architectures for you using AI. And we said, great, we want to either work with them or buy them. I don't know, whatever it is, whatever makes sense for us. But we are trying everything to use the latest techniques to accelerate our exploration of the space. That's the way we're looking at this is how fast can I iterate, how fast can I find working solutions? That's our main goal right now.

[John Coogan]

Makes sense. What have you learned from racing that you've applied to company building, and what have you learned from company building that you apply to racing?

[Naveen Rao]

Oh, boy.

I think racing, when you start getting into like truly competitive events, you, you start to see that every like tenth of a second matters. When you're coming into the pit lane, for instance, you have a pit lane speed limiter.

[Matt Kalish]

Right.

[Naveen Rao]

So I don't think people even know this, but when you, when you come in, you, you hit this pit lane speed limiter. And when you drop below the pit lane speed limit, you hit the throttle and it pegs it at the speed, speed limit. You basically want to optimize that so you don't even lose a tenth when you come into the pit lane. You basically hit the brakes at a certain point, slow down and enter at this pit lane speed. You don't want to slow down ahead of time and kind of ease your way in.

[John Coogan]

Yep.

[Naveen Rao]

Every tenth of a second matters and that may be in even a 24 hour race. And I think that's true with a company like don't waste time. Every moment matters. You may make bad decisions. That's okay. Figure out how to back them out. Move as fast as you can if you may. If you hire the wrong person, fix it. And so I think the main thing I learned is that time is your biggest enemy.

[Jordi]

Always love it. Love it. Well, we normally ring the gong for $475 million, but we should all also ring the gong for 265 points in the Ferrari challenge.

[John Coogan]

There you go.

[Jordi]

Yes, I'll take it.

They're both massive accomplishments but we're big fans of Ferrari challenge around here so it's a big deal for us.

[John Coogan]

Thank you so much.

[Naveen Rao]

IMSA is where it's at really.

[Aaron Ginn]

That's the big stuff.

[Jordi]

Oh, cool. Cool.

[John Coogan]

Yeah, yeah.

[Jordi]

We were out in Thermal a couple weeks ago and it was the first time for both of us on the track and it was life changing. It was like a new like and.

[John Coogan]

I'm sure it was somebody that you've probably shared a track. This is the here and there. Anyways, congrats on the announcement and everything and the whole team. Sounds like an incredible place to go work right now. Yeah, I'm sure.

I can't wait to have you back on.

[Jordi]

And what a murderer's row you got. Andreessen, LightSpeed, Sequoia Lux, DC VC, Future Ventures, Jeff Bezos, Databricks and many others. What a fantastic way to kick off a new business. Congratulations.

[Aaron Ginn]

Awesome.

[Naveen Rao]

Thanks so much.

[Jordi]

Rest of your day. We'll talk to you soon. Goodbye.

Let me tell you about wander.com book a wander with inspiring views, hotel graded minis, dreamy beds, top tier cleaning and 247 concierge service. It's a vacation home but better folks.

[John Coogan]

That's right.

[Jordi]

Our next guest is already in the restream waiting room. We have the founder of Beyond. Welcome to the show. How are you? You doing?

[Ophir]

I'm doing great. Thank you very much for having me. I'm very excited to be here.

[Jordi]

Thanks for.

[John Coogan]

Very excited as well. We wanted to get you on last week but we were on the road and yeah. Very excited to chat.

[Ophir]

Thank you very much.

[Jordi]

Introduce yourself, introduce the company. We'd love to get you know how you're positioning it and then I want to go into the funding round. Some of the implications of this but kick it off with a little bit of introduction for us.

[Aaron Ginn]

So.

[Ophir]

Sounds great. As always. I always start by saying my name is Ophir. I'm married to wonderful Julian, father to Rom, objectively cutest baby ever born.

[Jordi]

That's a great intro. I love it.

[Ophir]

These are the important stuff. Less important stuff. I started a few companies before. Actually four companies to be exact.

[Blake Scholl]

Wow.

[Ophir]

Most recent one was a company called Cloud Undo which we sold to Amazon on January of 2019, grew the business to a billion dollar business doing migration and disaster recovery to the cloud.

[John Coogan]

Let's give it up for migration and disaster recovery in the cloud. Doesn't get enough.

[Jordi]

Doesn't get enough credit. It does not get enough credit. That's right.

[Ophir]

I agree. I'm actually, I was saying this crazy guy who really love data, data regression, data protection. We live this so long and both me and my co founders and while we were there we saw an opportunity that we just couldn't resist. All those companies really moving to the cloud, especially around co Covid and later on and all the incumbents in our space were born on premises. So we decided to start a company in cloud backup. You could say cloud backup. Isn't it sovereign already like in 1981? Well, we figure out that as companies move to the cloud become very significant, they have a very big problem actually managing their data. Imagine the secondary storage backups like tape. These are companies storing their most precious data for a very long time and they can't access that. So we started as a backup company. I said I'm this crazy person starting a non AI company in an AI world.

[Jordi]

Yeah.

[Ophir]

But then you know what it hit me? AI is such a strong compelling event which has strong tailwinds that we just had.

[Jordi]

I mean look at the Seagate and Western digital stocks. They're through the roof this year. It's crazy and it makes sense because everyone's going to need to store a lot more data. Everyone's creating so much more data.

[Ophir]

So much data is created all the time and you always use data and I don't know who's going to win the compute wars. OpenAI anthropic databricks, snowflake any area. What I do know, no matter what's going to happen, data is going to be the enterprise mode. And we are here to help them unlock this data. We're automating cloud backups. Sounds boring, right? Making this it into useful accessible assets, data lakes so you can back up all your data in a very seamless, easy way. But then use it for example, to train Models, that's all the hype. Right. And analytics and bi.

[Jordi]

Wait, so no. So no tapes, it's on drives, no tapes.

[Ophir]

As it seems, we're software only, solution only in the cloud. Cloud born. This is what we've been doing.

[Jordi]

Yeah.

On a public cloud or on your own cloud? Because I imagine that one of the benefits of backups and one of the key things that people wanna buy when they're backing up data is, hey, I'm already tied to aws. I don't want everything on aws. I want security in case AWS goes down. I wanna back up somewhere else. How are you thinking about that? Perfect.

[Ophir]

So, and we've seen quite a few outages in the last few weeks.

[Artistic (Brex CBO)]

Right.

[Ophir]

And what we're saying, we're democratizing your data. It's your data. Whether it's aws, Azure and GCP grid clouds or other clouds, we're making sure you can extract the data, make it portable between clouds, making accessible, performant, browsable and searchable. You can search and browse all of your data and all of your history immediately. And because we're building our own software, stack software only, it's not going to cost you a dime. It's actually cheaper than building it on your own or using existing, existing cloud technologies to do that. So we're trying to make sure that we make it, we give you an easy button as a customer to just enable the use of all of your data, making it accessible to. If you want to run Snowflake or databricks or Redshift or bigquery or anything that you want on your data, that's great. We are here to make sure that you enable to do it on all of the data that you have and all of the data that you had in the past.

[Jordi]

But how can you possibly be cheaper than the big hyperscalers, the big public clouds? I imagine that Microsoft, gcp, Azure, aws, they're buying so many Seagate drives, so many western digital drives. How can you possibly compete on price?

[Ophir]

That's an unbelievable question. Actually. I don't want to just win on price, I just want to make it easy for you. So what we're doing, even though we're still in the the cloud, using cloud building blocks, object storage, GCS, S3, Azure, blobs, et cetera, we're building in a very different way and actually building a more efficient, let's call it, version of cloud snapshots that purposely built for backup and data retrieval.

[Jordi]

Okay, yeah, that makes a lot of sense. Take us through the News, what's the funding news? I want to ring the gong for a data storage company.

[Ophir]

Thank you very much. And I'm also very excited. So we raised $500 million in total, $300 million just in this round. Really excited. Led by Elad Gil, who is not only an amazing investor, he's also an amazing human being.

[Jordi]

Yeah.

[Ophir]

And we got.

[John Coogan]

What's it like, what's it like being. What's it like being a fly on the wall when you and Elad get together and talk about data?

[Ophir]

Well, Elad is simply unbelievable. You know, he's one of the most humble people I've met. Met and at the same time brilliant. Brilliant and so well connected. I don't think I've ever seen an investor that everyone likes so much and I have the privilege to choose amazing investor. I have Sequoia and Lightspeed and Greenox and Bond Capital and likes of Omri Caspi who are just amazing, amazing investors. And Elad Gil is very unique actually. We got preemption wanted by 16 VCs and I so wanted it to be a lot really. And when. A lot.

When a lot wanted to. I'm going to lead my round. I was in New York, he flew from San Francisco, he came to my office. He basically wouldn't leave until I signed. And to be honest, I really, really want to do that because I got to know the person, not just the investor in the last few months and year. He put a small chick in a previous run around and honestly we just fell in love. Not just myself, my other co founders as well.

[John Coogan]

So that's incredible.

[Ophir]

When we had the chance, we had to do it.

And really, really happy excited about it.

[John Coogan]

You wrote the book on high ground.

[Ophir]

I know, I know and absolutely, absolutely. And I'm really thrilled. We have now a lot of capital in a time when.

We can now plan ahead. We don't need to think about the macro, we don't need to think whether everything's going to continue to be rainbows and unicorns. Do we going to have a downturn soon? Who knows? But we know we can build a strong fundamental business that's going to be here for a long time.

[Jordi]

This is hilarious. But it's a great take. It's a great way to build your company and your business so that you can take advantage of these, these tailwinds but also survive the headwinds. And congratulations to you. Great. This is what we need. This is a.

[Ophir]

Exactly. We're here for a long time.

[Jordi]

Yeah.

[Ophir]

Yes.

[John Coogan]

Forever. Forever. Is this your. You want this to be. You've done four companies prior to this. Do you want this to be the last one? You, you just want to just.

[Ophir]

Last one. Last one all the way to the IPO and beyond.

[Jordi]

Yes. Yes.

[Ophir]

That's my goal.

[Jordi]

Fantastic.

[John Coogan]

Incredible. You have incredible energy. I'm excited to follow your journey and you're welcome on the show anytime.

[Jordi]

Thank you so much for coming. Thank you very much.

[Ophir]

I'm really excited. I love your show.

[Jordi]

Amazing.

[Ophir]

Thank you very much. I'm going to get back and tune to that.

[John Coogan]

Thank you.

[Jordi]

Thank you. We'll talk to you soon. Have a great rest of your day.

[John Coogan]

Cheers.

[Jordi]

That is worthy and valuable. We were debating what is worthy and valuable. That feels like a company. That's the worthy and valuable company of San Francisco.

[John Coogan]

He's keeping.

[Jordi]

That's what you need to do. I don't even.

[John Coogan]

I'm glad he's keeping all of our data.

[Jordi]

But I liked up. Yeah, yeah. It seems, it seems, it seems extremely valuable.

[John Coogan]

He's. He's that guy.

[Jordi]

Well, we have Gorkham from Fall in the restream waiting room with some news. He's back on the show. You know him, you love him. He makes all this possible.

[John Coogan]

Every time you're on, I'm like I he's gonna be back on.

[Jordi]

He's gonna be back on.

[John Coogan]

You guys, how you doing on a terror.

[Jordi]

Merry Christmas.

[John Coogan]

Merry Christmas.

[Matt Kalish]

Thank you so much. Good to be back in the temple of technology, capital of capital.

[Jordi]

There was one more.

Fortress of finance. There you go. Thank you so much for coming on the show. Give us the news. What happened?

[Matt Kalish]

Yeah. Today we announced our 140 million dollar Series D. It's led by Sequoia and.

[Jordi]

From Klein Perkins and Nvidia it's the Sequoia capital firms.

[Matt Kalish]

We had an incredible year this year. We have some of the biggest advertisers, retail platforms, design and productivity apps and movie studios generating images and videos on the platform. And we 8x star revenue in the whole year was. This is our third fundraise of the year. We announced our series earlier this year in the beginning.

[John Coogan]

And then you got one more. You're going for the four Pete. One a quarter.

[Jordi]

Come on.

[Aaron Ginn]

Come on.

[Jordi]

We got.

[John Coogan]

We got two weeks.

Couple. It's remarkable weeks.

[Jordi]

What's been, what's been the biggest driver of revenue growth? Has it been uptime? You know, being a one stop shop? Like what, what messaging has really resonated the most and driven the most growth for you this year?

[Matt Kalish]

Yeah. So beginning of this year we thought we were going to Ride the AI video wave for the whole year. That was accurate. It was an incredible year for AI video. But what was surprising to us is actually rise of image editing. Image models existed a couple years ago. That's how we started our business. But image editing, one of the first good models, came out around May and now it's a bigger part of our business than AI video. That was surprising to us. So we thought we were going to ride a big wave, but another even bigger wave collided with it.

[John Coogan]

Well, is that surprising? Because when you think if it's very. It's very commonplace now to like one shot, a great image output and it's so much harder to one shot or even get a great video output. You can get a decent video output. So I feel like it makes sense. Everybody's making images all the time. It's like it has. It's like when you think about in the workplace, there's just so many different use cases even for consumers. So I think it makes sense and it really is just exciting because the image models feel like they're so good now. Everybody's so used to seeing it and getting kind of like faked out by an image now because you can't tell the difference. Video you can still usually tell, but it feels like maybe in a year from now it'll be the same situation where it's like, I just don't know what's real, I don't know what's fake. It's all confusing.

[Matt Kalish]

100%. Video models are still very hard to work with. Still some really talented AI creative people create great content with it, but it hasn't really reached mainstream. I would say it takes even more effort to create an ad with a video if it's like high quality than actually shooting it yourself. But what happened with image models is going to happen with video. And the user experience of video models are going to get much, much better. And you'll have have even more mainstream adoption of these models. I'm pretty sure of this. And that's what makes me really excited because we went so far. It's a lot of image models, a lot of image editing. Just a glimpse of video models and this is all gonna get better and better and it's gonna reach complete mainstream. All the studios, all the retailers are gonna make use of this technology.

[Jordi]

Sorry.

[John Coogan]

Yeah, just what are you seeing? Like how are you thinking about 2026 from a model progress standpoint, Nano Banana was obviously massive leap. I'm expecting we'll see even more activity in 2026. But I'm sure you have somewhat of a preview just given your guys position in the market.

[Matt Kalish]

Yeah, exactly. So usually one of the Frontier Labs labs pushes the boundaries. In this case it was Nana Banana. Twice this year it was like their first release and now this very recent Nano Banana Pro release. But very quickly, either the open source community or labs from China, people catch up. There are a couple reasons for it to be honest. Once they see there is demand for it, once people know exactly what to build for, it's usually easier for them to get motivated and catch up. But also some of the tricks, some of the research tricks leak and people use them and train these models. The model market for generative media is a lot more fragmented than LLMs. There's so much choice, there's so many models that are different and that are better at different things that the best model keeps changing. Even Nano Banana was dethroned a couple times throughout the year. Right now it's considered the best image editing model. But I don't know how long that's going to last.

[Jordi]

What are you excited for in terms of capabilities for next year? Do you have specific benchmarks that you're tracking or even functionality like I've noticed? I have one that's the Where's Waldo test where I will ask you to generate a full Where's Waldo. And even nanobananapro still can't quite do it. It'll either put Waldo right at the center or it'll make two Waldos. And those images in the children's book are really complicated. It's not just a portrait and there's maybe not enough training data on the Internet, but that's one test that I've been tracking. Do you have your own internal benchmark or whatever you think is next? The thing it can't do right now?

[Matt Kalish]

Yeah, I have some of my favorite prompts that I try with every single model. But I rely on our team. We have great creative people in the team. They spend all their living hours working on these models. They are usually ones coming up with very creative ways to utilize. One thing that changed with Nona Banana is you can actually feel the model has more world knowledge than other models and that opens up other doors. I don't know. Have you seen people are now adding some web search and creating newspaper articles on the fly. Things like that are very creative uses of these models. And on the video side people really want more controllability. They want character consistency, they want scene to scene consistency. And some of the releases that happened recently Cling, for example, is One of the better video models out there. They've announced some editing capabilities which are pretty remarkable. And all of that is going to get easier to use. And once people have more consistency with the scenes they are creating with video models, I think that's gonna make a big difference.

[Jordi]

Yeah, I always see those videos of. It's the lil yachty walkout that is character swapping. And it's always really obvious what's going on. It's rough around the edges, but it's still hilarious because it's a great meme. And I definitely would predict 2026 is the year that that little yachty walkout just looks 100% real.

[John Coogan]

Next fundraiser announcement.

[Jordi]

I can't wait. Yeah, yeah, yeah, yeah. We need to do that for you. We need to get your body scanned a little bit.

[John Coogan]

You know, you've never asked this question, but you might know the answer. You know why it's called Nano Banana Pro? Where. Do you have any idea what the origin is of the name?

[Matt Kalish]

So they had a code name Nano Banana. Usually when they put these models into the benchmarking websites, they usually add a code name. There were Blueberry was one codename, Red Panda was another, and this was Nana Banana. And people recognized the model like that and they kept it. That's the story. I know. I don't know if there's another version.

[Jordi]

Of the story, but I guess the other question is, obviously it is a code name, but where'd the code name come from? Google has a long history of using fruit, although so does OpenAI with strawberry. But all the Android iterations were like ice creams and desserts for a long time. But the question is.

What'S the Nano doing there? Because I want the full banana. Give me the. Don't give me the Nano Banana. Give me the giga banana. I want the giga banana, the biggest exa banana, the mega banana. I want the biggest banana model. Don't give me the shrunken down Nano one. I want the. I want the giga banana.

[Matt Kalish]

Yeah. I think it's using the smaller Gemini.

[Jordi]

Model as the ll as the reasoning.

[Matt Kalish]

That's why it's Nano. But.

[Jordi]

Yep.

But it's funny. It's funny to have fun with. Anyway, thank you so much for coming on the show. Congratulations on the massive news and thank you for supporting us all year long.

[John Coogan]

And you got a. If you 8x again next year, you got to 8x the number of fundraisers that put you at like two fundraisers, two fundraises a month, two fundraisers a month. 24 for 20, 26. We'll see.

[Jordi]

That'd be great.

[John Coogan]

But congratulations to the whole team and we're very excited for you guys.

[Jordi]

Have a good one.

[John Coogan]

Thanks. Cheers.

[Jordi]

Bye. Well, we have our next guest already in the restream waiting room. We have Pedro from Brax, the founder and CEO of Brax.

Announcing a massive partnership. We're very excited to welcome him to the TVPN Ultra Dark.

[John Coogan]

Welcome to the show.

[Jordi]

Great to see you, Pedro. How are you doing? How's your day? Merry Christmas. I'm great.

[Artistic (Brex CBO)]

How are you guys? Thanks for having us.

[John Coogan]

We're great. We're in the Christmas spirit.

[Jordi]

We are in the Christmas spirit.

[John Coogan]

We got bells. Very, very holiday themed. Holiday themed shows for the rest of the year.

[Jordi]

Yes, yes.

[John Coogan]

But it's great to meet.

[Jordi]

Yeah. And have you on the show. Yeah. Please take us through the news today. Oddly, I'm actually a fifth third customer. So I want to know how this is. This applies to me.

[John Coogan]

Yeah.

[Artistic (Brex CBO)]

You get a Brax cartoon. No. So in all seriousness, thanks for having me.

[Jordi]

Of course.

[Artistic (Brex CBO)]

Today we're announcing a pretty big partnership between Braxton Fifth Third Bank. It's a $5.6 billion commercial card partnerships where effectively. Wow.

[Jordi]

Massive.

[John Coogan]

So good.

[Jordi]

I heard a big number. I had to tell you that at my office. Fantastic.

[Artistic (Brex CBO)]

And we're really excited just because when you look into across all the US and we just see, see tens of thousands of businesses out there that are still. 98% of businesses are still using legacy corporate cards. And.

There'S so much opportunity in just automating how these teams run their finances. And Fifth Third just has this massive distribution and trust. And of course Brex has the financial services and the software and the AI that just helps these businesses automate so much of their manual work and better allocate capital.

[John Coogan]

Wait, so when. Yes, Sorry to interrupt. I'm curious when, when you guys started working on embedded products? Because if you go back to 2021 and 2022, I'm sure there was a bunch of companies that, or at least a few that got created to go and pitch some of these same banks and say, hey, your corporate. I don't know if people remember anybody that remembers svb, like corporate cards back in the day.

[Jordi]

I had, I had a few of those.

[John Coogan]

Their UI was truly insane. It was, it was like, how is this? How is this?

[Jordi]

And you had like a different. You. You had like a different login too. It was crazy.

[John Coogan]

Yeah. It was truly the most product experience of all time.

[Jordi]

And it was like, this is Silicon Valley bank we're supposed to be the tech not to talk, but beat a dead horse. There kind of a dark moment at.

[John Coogan]

Some point you said like, hey.

We'Ll go compete here as well.

[Jordi]

Yeah, yeah.

[Artistic (Brex CBO)]

So for us it's really been driven by a lot of just customer demand. So we started this with Navon and Zip where they really saw a lot of the value in bringing financial services and car to workflows into their software. And we're really excited about it because it's just a one plus one equals five situation. Both products are coming better together. And then as we thought about the rest of the US and there's 8% of businesses are now accessible through this partnership, for example, in the US which is a really exciting thing in the commercial space. And the really big thing is how do we make the bank's product materially better? And when you bring the technology and what we've done on the card side and especially the financial infrastructure that, that we build from scratch, like we don't run on stripe issuing or marketa, we just build our own rails from the ground up that enables a partnership to actually take place.

[John Coogan]

So it's. How does it actually work? Is it fully white labeled or does somebody in first third get kicked out?

[Artistic (Brex CBO)]

No, no, no. It's actually a fully Brex branded card. And the reason is because Fifth third wants to have someone that's actually responsible for delivering this great customer experience on the card and implementing the software and rolling that out to their customers. And what they do really well is the banking side.

[Matt Kalish]

Right.

[Artistic (Brex CBO)]

It's the lending side, it's the banking is the relationships and the thousands of branches and just the thousands of distribution partners that they have on their side and the tens of thousands of customers they serve are all effectively reliant on that and already have that relationship. And now they get a Brex card, which we're really excited.

[Jordi]

Yeah, sorry, you mentioned you're not using Stripe for what was it issuing, issuing.

Does Stripe or are there other fintechs that do play a role in your supply chain or are you down at an ACH layer? What's going on under the hood?

[Artistic (Brex CBO)]

Yeah, so what we've done since 2018 on Brex is we actually build our own financial infrastructure from scratch.

[Jordi]

Okay.

[Artistic (Brex CBO)]

So we actually went straight to the Metal MasterCard and built everything from the ground up. And because we vertically integrated the whole thing, this created this pretty big advantage on everything that requires their metal capabilities on financial services. So for example, Global. Right. We operate in over 200 countries today with local cards Local issuance. Because for us it's just a matter of saying, hey MasterCard, we're going to issue in Europe or Brazil or India or Mexico and just flipping a switch for them because we are our own issuer, we run our own stack stack. And then Fifth Third was another example where we said Fifth Third wanted to issue a Fifth Third issued card. They want it to be their name on the card. It has to be under their license and MasterCard and all of that. And for us it's just effectively bringing in a new bank live, which we have a few banks on the back end and including Fifth Third, of course. So for us it was sort of pigging back on this advantage that we've had over many years by building our own rails from the ground up, which.

[John Coogan]

Is really how are you, how are you thinking about? We've had a bunch of different teams and companies on the show building like new layer one blockchains for payments. They're touting speed, default, global, all these things. We've had a bunch of stablecoin issuers and business. I'm sure in conversations that you have, you're being pitched these companies to be an infrastructure provider. I'm sure your investors are like maybe asking you sometimes should we, should, should, should there be a Brex stablecoin? You know, who knows, right. I'm sure these questions are coming up. How do you think about kind of the layer one landscape? And you're, you're operating a global business today and so I would, I would, you know, your opinion on some of this stuff in terms of the, the real value of it I feel like would carry a lot of weight.

[Artistic (Brex CBO)]

Yeah. So the way we think about it is maybe a little bit different which is we, we think that first like stablecoins and, and, and blockchain in general have a, you know, tremendous application and we're really excited about, about a lot of the work there. We announced support for stablecoins this year. When it comes to our banking product and you can pay the card to stablecoins, we've done a lot of that. But when it comes to global and just supporting customers in a wide variety of countries, really the challenge there is the on ramp and off ramp and specifically the fiat last layer for an employee to reimburse you in Indian rupees or Brazilian reais and then for you to settle the card in that currency and do all that locally. And unfortunately stables don't help you that much on that last layer. And the whole actually a misconception about the way a Global product works is a lot of the value comes from remaining in local currency. Because what they're trying to do is minimize fx. Even on stables, FX has a cost just intrinsic to it. And a lot of what we're trying to do is keep you entirely in rei. So your revenue in REI in Brazil are settling your expenses in reais or in Euros or in GBP or whatever currency you're in. So a lot of the infrastructure we build is to enable this multi currency and multi entity operations versus having to do the FX and a lot of the benefits that stables typically bring to the table. So our use case is a little bit different.

[John Coogan]

I'm sure that's disappointing to people building global payments L ones, they're like, wait, you're supposed to need this.

[Artistic (Brex CBO)]

I mean we do use it internally for some stuff. But I would say the value prop for our customers is stay in local currency as much as possible because just minimize so much savings and effects.

[Jordi]

Yeah. What are the other keys to success?

Obviously you have experience internationally, but you're a YC company. I think of Brex very much as an American company. But then in terms of winning international, what does it take? What have the lessons been?

What are the interesting insights or what were some surprises that cropped up on the journey?

[Artistic (Brex CBO)]

Yeah, so I would say the biggest one is that when you go into like true global, like true enterprise, the amount of requirements and specifically on both the card and expense management side is unbelievable. So you have these rules, for example, local per diems. So when you are in Europe, Europe, there's these rules that if you have a German employee traveling to London is one set of rules. If you have a London employee traveling to Germany, completely different set of rules. And then if they rent a car, there's different mileage requirements. And then all this information stuff you have to be aware of. And of course we use a lot of the car data to make that easier and we can solve it automatically. But probably the biggest challenge overall is just building the core financial infrastructure because this is something that is know, we're literally the only issuer in the US that actually had done this from scratch. And just the amount of time and energy that we dedicated into building these, you know, core financial services infrastructure is pretty tremendous. But you know, it gave us a pretty big advantage when it comes to these enterprise customers. And you know, today we have maybe three or four years ago, I think we had five or maybe 10 public companies on Brex and now we have 250 and growing. So that's a really Exciting thing.

[Jordi]

That's amazing.

[John Coogan]

Awesome.

[Jordi]

Yeah.

[John Coogan]

Well, congrats to the whole team on the deal. Congrats to Art.

[Jordi]

Yes.

[John Coogan]

And chief business officer.

[Jordi]

Correct.

[John Coogan]

Cbo.

[Jordi]

Cbo.

[John Coogan]

He was coming in to defend Keith Raboy last week. Was talking some smack about the BD.

[Jordi]

People of the world, does OpenAI have a chief business officer? Because they just got a CRO. They have a. They have a CFO and they have two. I think they're missing a CRO.

[John Coogan]

It's an underrated title that you're going to lock down.

[Emil Michael]

Art.

[Jordi]

He's going to get poached.

[Artistic (Brex CBO)]

Artistic.

[Jordi]

Don't listen to that.

[John Coogan]

Awesome. Well, yeah. Congrats to the whole team.

[Artistic (Brex CBO)]

Congratulations.

[Jordi]

Congratulations.

[John Coogan]

Great to have you on the show.

[Artistic (Brex CBO)]

Yeah, thanks for having me.

[Jordi]

I appreciate it. We'll see you soon. Have a good one. Merry Christmas. Goodbye.

[Matt Kalish]

Thank you.

[Artistic (Brex CBO)]

Merry Christmas.

[Jordi]

Merry Christmas. The ho ho ho really gets me every time. I've been thoroughly enjoying it. I love the idea of country specific per diem's because if I had a German employee, I would want them to know that they are not an American employee and they are second class citizen in this organization. And they will not be dining out on the company dime at a nice. At least in US dollars they will be eating sauerkraut in the gutter for $5.

[John Coogan]

That's brutal. The most American American John Coogan ever.

[Jordi]

Yes. Yes. Well, speaking of, of travel to international countries, if you go to Saudi Arabia, you can now booze it up. I guess you can drink alcohol. Saudi Arabia is loosening alcohol rules, letting non Muslim foreign residents earning over $13,000 you can buy alcohol. So you have to check. You have to do a whole check on this.

[John Coogan]

Daniel's line is great. He says this is such a galaxy brained idea, it could only come from a mind totally disconnected from normal material reality.

[Jordi]

It's hilarious.

[John Coogan]

It is interesting. Imagine being like, hey, if you want to do drugs, if you want to consume alcohol, that's fine, but you have to be putting up numbers.

[Jordi]

Yes, yes, exactly.

[John Coogan]

Putting up numbers.

[Jordi]

Exactly. And so if you're underage, basically cannabis.

[John Coogan]

Should be like $10 million a year on your W2.

[Jordi]

I was about to say, but you know what happens then? So you have everyone in America, you know, you turn 17, 18, 19, you're not 21 yet, you get a fake ID to try and buy some booze. You're gonna need a fake W2 as well.

Fake your income statement and you're gonna need to do all these crazy things where you have all these circular deals.

[John Coogan]

Bringing your fake W2 to the corner liquor store just being and they're just.

[Jordi]

Like looking through every line in Saudi Arabia. So you're in Saudi Arabia and let's say you're making $1,000 a year USD or you know you're making 10,000 reals. You need to go and set up a circular contract where you're a 17 year old, somebody else's 17. I pay you 10,000, you pay me 10,000.

[John Coogan]

And then we get a couple times.

[Jordi]

Exactly a couple times. Then we're earning enough to go buy alcohol and go get drunk together.

[John Coogan]

That is crazy.

[Jordi]

That is truly galaxy brained. We're out galaxy braining them. We're going to galaxy brain all the way to the top. We do have to hop on with Riyadh soon. Let's close out with anything else that's on the timeline. Jordi, why don't you take a pass, let me know if there's anything that.

[John Coogan]

We fluid stack raising 700 million at a $7 billion valuation built on Google backed leases for new AI data centers. According to Rohan Paul Fluidstack, a real player on the semianalysis.

What's it called?

[Jordi]

Cluster Max.

[John Coogan]

ClusterMax. And so not surprising here. Interesting that potentially you've got Leopold looking to lead the financing, so dipping his toes into privates.

[Jordi]

Well.

They have cluster Max over at Semianlysis. They have inference max. Are they going to do looks Max?

[John Coogan]

Potentially they could. It looks like. According looking at some of our officials, it looks like we might be developing a strategic looks max maxing reserve.

[Jordi]

I mean there are lots of people that would comment on looks maxing and try and rank like the hottest men in tech. I personally would only regard semianalysis opinion as credible on that issue specifically, like it must come from them.

[John Coogan]

Post here from Buco. He says Hock Tan acquired VMware, had coffee chats with the employees where he made fun of them, inspired half the business. So a little excerpt here. Earlier last year, Broadcom CEO Hock Tan decided to host what he likes to call a coffee chat with employees of VMware, the software giant that Broadcom CEO had recently purchased for $84 billion. The company wide meeting was Tan's effort to introduce himself and answer questions questions from those employees about life at the semiconductor firm. At the time, VMware's Palo Alto campus sprawled over 18 buildings and 100 acres of delicately pruned gardens, an outdoor amphitheater and a turtle pond. Employees enjoyed nice HR perks including childcare, marital counseling and an annual thousand dollar well being allowance for anything from Dumbbells to Xboxes.

[Jordi]

A thousand dollars in Xboxes, that's like one Xbox every three months. Months. So many Xboxes, you can actually only.

[John Coogan]

Spend this on Xbox. When Tan opened the discussion up to questions, a VMware employee asked if Broadcom provided such benefits. Tam Tan seemed surprised. Why would I do any of this? I'm not your dad, he replied, according to three people in attendance. We have a trading card.

[Jordi]

I'm not your dad.

[John Coogan]

Over the next few months, Tan fired about half of VMware's 38,000 employees. That is wild. He also stripped down Florida private equity, selling all but five of the buildings. At the remaining offices, Tan had the espresso machines removed.

[Jordi]

Okay, well, that is a question. They need to stay caffeinated.

[John Coogan]

I gotta hold the line here.

[Jordi]

What are they doing? I mean, I'm okay with. I'm okay removing.

[John Coogan]

You think they're doing white monsters instead.

[Jordi]

If they're doing white monsters, then I approve of it. But if you're gonna have a decaffeinated workforce, that just makes no sense. That's just not elite performance, he says.

[John Coogan]

The article says, somewhat against the odds, the turtles were allowed to stay. So do you think he's putting espresso in the turtle pond?

[Jordi]

No. I imagine he had a massive broadsword and was above the turtle, ready to let it all go.

[John Coogan]

They're like, hawk.

[Jordi]

And he's like, I can't do it. And he drops the blade and it falls to the ground, clanks him. And he says.

You live to fight another day, turtle. You're too important here.

[John Coogan]

He's got him making tpus completely different.

[Jordi]

Vibe from when Pat Gelsinger was getting a VMware tattoo on his arm, or temporary tattoo, at least, showing his love for the company that he just bought while he was at Intel. Hawk's hand clearly cut from a different cloth, but clearly also putting up big numbers. Broadcom's been on an absolute run.

[John Coogan]

Alexis Ohanian says. Been warning y' all AI everywhere. Dead Internet react is increasingly scarce online and thus increasingly valuable. There's a Wired article called AI Slop is ruining Reddit for everyone. This has always been. There's such an incentive for companies and people to just create jobs on Reddit. AI is training on Reddit, and the natural end state is it's 99.9% bots and just a handful of humans. So stick to the group chats, I guess.

[Jordi]

Yeah. In other news, Netflix has launched Best Guess Live, a new Netflix mobile game show where guessing the right answer based on five clues could win you thousands, Dylan. Abruscado in this economy.

[John Coogan]

Come on.

[Jordi]

Not a.

[John Coogan]

They're willing to spend $80 billion to get Warner Brothers. 40 billion per one.

[Jordi]

They should give you some. You should be able to win Porky Pig.

[John Coogan]

I get Foghorn Leghorn or some of the masculine film.

[Jordi]

I want the Steven Seagal rights. I want the rights to Hard to Kill. For sure. Dylan on our team says, can I copy your homework? Yeah, just change it up a bit so it doesn't look obvious you copied. Of course he worked at a competitor to this or the precursor to this.

[John Coogan]

He created game shows.

[Jordi]

He created game shows with HQ trivia, which you should know.

[John Coogan]

Rune says a lot of people think CEOs are on coke or stimulants because of how hyper they look in interviews. But I think the unfortunate truth is that natural amount of energy is extremely, unequally distributed.

[Jordi]

I was going back. Yeah, I was going back and forth on this one. Obviously, it's a subtweet of Carp, but.

I think he's just like that. I think he's just. I think he's just high energy and I think that. So the carp clip looks crazy as a single clip, but I actually watched the full interview and there is a flip on it, which is maybe more negative, which is like, that was a question he was squirming on. Like, that was an uncomfortable question. And I notice it on this show all the time. If we ask someone a question and they're like, not that happy that we asked that question. You'll see on their body language, the cross their arms and crossed arms is like a well established body language for, like, I'm closing myself off versus, like, if I'm hanging out here with you, I'm just having a good time.

[John Coogan]

If I'm sitting up and.

[Jordi]

Yeah, yeah. And so there's a world where you're literally. They call it being in the hot seat.

[John Coogan]

They just needed a better camera tracking.

[Jordi]

So, yeah, they call it being in the hot seat. And when you're in the hot seat, you're kind of bouncing around. And yes, it can look like you're on a lot of stimulus. Maybe you're on some caffeine, maybe you're a little wired, but also maybe you're dealing with a serious interviewer, Sorkin, across from you on a stage. There's nothing to help you at Dealbook. Like, the crazy thing is you keep seeing people's legs all funny and it's like, because you're just in a chair, there's no desk there so there's nothing covering you up. So it's like you're very vulnerable. There's this big wall.

[John Coogan]

Has somebody done that?

[Jordi]

Everyone's looking at you and all. Also, it's not just a private conversation where it's like you and Sorkin are just hanging out here having a normal conversation. Like there's a couple people. All of our friends are here, right? Imagine it's like all of your rivals are in the. All of your rivals, all your haters are watching online, all your haters are watching online and all the rivals are in the building, in the seats right there looking at you. Answer tough questions. I don't know, it just feels like this is not that crazy of a reaction for a high energy guy who, who's kind of quirky, who's in that position and is answering some tough questions. I don't know.

[John Coogan]

Well, Tyler, figure out how to use AI to run an analysis on every guest we've ever had to see who and just rank their body language from most trustworthy to least trustworthy.

[Jordi]

Yeah, I did like Gabriel here. He says he's quote, tweeting someone who's like, there is zero chance that these hyper animated CEOs are just, just naturally that way. Kind of the counter to what I was just laying out as an argument. And Gabe says cocaine expert here. These CEOs do a lot of cocaine. Feels like a very 2025 moment somehow. And I agree with that. I agree with that. It is a very weird, weird thing. Well, in less weird headlines, we have some fantastic news from Lulu who has raised a $40 million.

[John Coogan]

Give me the mallet. Give me the mallet. Now you go for it. Too late. Too late.

[Jordi]

Congratulations to Lulu.

[John Coogan]

This photo goes hard.

[Jordi]

It's a good photo. It's proper paparazzi. She got caught by the paps. The paps got her. This is a throwback photo from when she was working on the Microsoft Blizzard deal. I mean, the fact that she's a board member at Activision is just crazy at the time. $80 billion company. People talk about Lulu like she's some like, you know, small time PR advisor for startups, but it's like she is on the board of a $80 billion.

[John Coogan]

She also intentionally shopify.

[Jordi]

Right?

[John Coogan]

Flies under the radar.

[Jordi]

Yeah, well, we're blowing up. Or we're blowing up here now. Sorry. Sorry about it. Anyway, at least it's at the end of the show.

[John Coogan]

Lisan Al Gaib says the normies are waking up on TikTok. They're saying chat GPT is washed. John says perplexity is goaded. Hard to say. Yeah. They're ranking them.

[Jordi]

They're all over the place. Claude.

[John Coogan]

Greater than Gemini, greater than Never be washed. You don't want to be cooked either.

[Jordi]

Yes, we've learned this. We've learned this.

[John Coogan]

You want to be washed, cooked or chopped?

[Jordi]

From our.

[John Coogan]

If you're a language model that wants Gen Z adoption from our Gen Z.

[Jordi]

Employee who is currently both chopped and cooked, he's not here. We hope he gets. Not you. The one who says sick. Who we hope gets better soon. But we didn't learn any lingo from you.

[John Coogan]

Tyler Buko says what people get wrong. OpenAI's code red is bullish, not bearish. It's an admission they were overeating, getting beat, and needed to focus. That's what great teams do. Now here's the challenge. Code Reds are really hard. It's easy to say yes. Hard to say not right now. All eyes on how they execute Code Red. I'm skeptical. Overeating seems to be embedded in the culture. Same, obviously. Likes to definitely dabble in a lot of things.

[Jordi]

Every Code Red is followed by a Baja Blast.

[John Coogan]

That's right. I think the next model should be Baja Blast.

[Jordi]

Go back to the crazy names that make no sense. Stop it with the 5.2 tomorrow. Wait, wasn't 5.2 just supposed to come out today?

[John Coogan]

That was if you looked at polymarket.

[Jordi]

That's what it looked like.

[John Coogan]

It's now moved to, I think by December 13th.

[Jordi]

Okay, okay, 90%. Yeah, yeah, yeah. Anyway, but also, this is a separate.

[John Coogan]

Topic, but I need to put you in the truth zone. There actually are spots on the moon that are perpetually in sunlight.

[Jordi]

Oh, really?

[John Coogan]

You figured it out on the rims of certain craters. Inside of them are always in darkness. The rims are.

[Jordi]

The rim on the crater is always in the sun.

[John Coogan]

Yeah. So that's where we need the data center.

[Jordi]

Okay, well, how much crater rim is there? Is there enough crater rim to actually build a lot of data centers?

[John Coogan]

If there's not, you could probably nuke.

[Jordi]

The moon, make more craters. Yeah, Yeah. I don't know. I still have trouble visualizing this. Doing like the celestial body physics math in your head is very, very difficult.

[John Coogan]

In other news, this person on X Kenu Nazari says they got their hands on some North Korean cigarettes.

[Jordi]

They did.

[John Coogan]

They got them in a DPRK state owned restaurant from a waitress who was from Pyongyang. Basically impossible to find any background info on them online. They taste and look 100% what is that Jush?

[Jordi]

I have no idea.

[John Coogan]

But I like the packaging. The packaging goes pretty hard. It feels.

Very.

[Jordi]

But I can't support it because I don't support North Korea.

[John Coogan]

And this is a good place to end the show. Sag Harbor Capital says if this niche Scandinavian brand doesn't ship my overcoat in the next 24 hours, I'm gonna blow up the Nordstream 2 pipeline.

[Jordi]

That's really funny.

[John Coogan]

He tags the brand too.

[Jordi]

He does. Where? Oh, oh, Bergenberg.

[John Coogan]

I need an overcoat. I was trying to just go around New York last week, just my heart. And I was kind of cocky going into it. I was like, oh, John, nice coat. We're gonna be outside for 20 seconds.

[Jordi]

Yeah, you're like session Kendall. Roy doesn't need a coat because he's so rich.

[John Coogan]

I didn't say that. I didn't say that.

[Jordi]

I think Dylan said that.

[John Coogan]

Dylan said that.

[Jordi]

But I was like, yeah, like, we're not. We're not that rich yet. Whatever's going on in 16.

[John Coogan]

We went for a half mile walk and I was devastated.

[Jordi]

We did, but it's nice when you're in a coat. It's fun to walk around New York City. Also, it wasn't that cold, but you were getting destroyed.

[John Coogan]

We gotta pull up last post of the day. Skook says the concept of getting sent to rehab by the Taliban because you and your cousins wanted to larp as the Peaky Blinders in Afghanistan. And down here, that says reportedly four people in the Herat province were detained and sent to rehab by the Taliban's virtue ministry for imitating characters from British crime series Peaky Blinders and parading around the city resembling the vintage gangsters. An act seen as violating local values.

[Jordi]

This, it seems, I have no idea how to process if this is real at all. Hope says rare Aliban L. This is crazy.

[John Coogan]

I mean, they look fantastic.

[Jordi]

They do look fantastic.

[John Coogan]

I feel like this would encourage.

Potentially they could open up a tourism market for people. Kind of like the Disneyland for Peaky Blinders enthusiasts.

[Jordi]

Such a weird, weird phenomenon to happen here. Also, what does being sent to rehab look like in Afghanistan?

[John Coogan]

They're just like, no more Peaky.

[Jordi]

Is it like Alcoholics Anonymous? You're like, first step. I am powerless to Peaky Blinders.

I'm a Peaky Blinders impersonator. You have to come, you know, you have to say, I'm an alcoholic. I'm a Peaky Blinders impersonator. And I am powerless and the of it. And you need to say the what is it the Lord's Prayer? Something like that.

[John Coogan]

Anyway, thank you for being with us today, folks. We love you dearly and we will see you tomorrow. We hope you have a fantastic evening.

[Jordi]

Goodbye.

[John Coogan]

Cheers.