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A
You watching? TVPN today is Tuesday, February 10, 2026. We are live from the TVPN Ultradome, the Temple of technology, the fortress of finance, the capital of capital. We're not slopping it up today, Jordy. We're in full force with ramp.com time is money, save both easy use corporate cards, bill pay, accounting and a whole lot more all in one place. Thank you to Ramp. They took us to the Super Bowl. We hung out with a bunch of folks, folks in sf, very smart people. Dwarkesh, Dylan Patel, Trenton Sholto, Mark Chen. There were a ton of AI, really frontier, the people who actually know what's going on with the labs and the progress came away extremely AGI pilled. Then I had to wait two days for the photo that we took to work its way through the NFL software system.
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B
Yeah, they had on site photographers, an on site photographer.
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A
The guy, I mean no disrespect to the guy. He took a nice photo, but he was very funny because when he was taking the photo, it felt like the camera had recoil or something. He would take the photo. It was like first day with a camera. But he had a phone attached to the camera. And I was like, oh, it must be connected to the camera. Real time, real time. It uploads immediately. Then you get your photos and you can post them while the game's live. And for some reason it took like two days for us to get the photo. It was a watermarked way to buy it and I guess it makes sense.
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B
But we got monetized.
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A
It was just a funny, funny situation. Anyway, let me tell you about TurboPuffer, serverless vector and full text search built from first principles and object storage. Fast 10x cheaper and extremely scalable.
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B
Nah. And the chat says the photo quality was not great as well.
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A
Well, first time, first time. There's a whole bunch of interesting news. We're going to talk about Michael Grimes today. What Apollo's doing some new humanoids out of China. There was one piece in the Journal that I wanted to read for you. Streamer Braden Peters suffers awkward encounter with Arizona State fraternity leader. Video of the interaction has drawn widespread attention. Braden Peters, the online streamer known as Clavicular, found himself at the of viral attention this week after a brief in person encounter with a fraternity leader at Arizona State University left him visibly diminished. This is news just today. Video of the exchange, which has circulated widely across social media platforms, shows Mr. Peters appearing noticeably uncomfortable as the unnamed fraternity member dominated the interaction through sheer physical presence and social confidence. Viewers noted that Mr. Peters, despite his considerable height, appeared to shrink during the exchange, struggling to maintain composure as the other man controlled the tone and pace of the conversation with apparent ease. The clip has been viewed hundreds of thousands of times now, with commenters largely agreeing that Mr. Peters was, in the parlance of his own audience, thoroughly outclassed. Neither Mr. Peters nor the fraternity leader could be reached for comment, but we'll be following that story, of course. Anyway, moving on. Michael Grimes, he's Elon Musk's banker and he might be the most important person in the SpaceX IPO that's probably going to happen this year. Kevin Kwok summed it up. He said, Michael Grimes moving back to Morgan Stanley is the strongest signal so far that SpaceX, that the SpaceX OpenAI anthropic IPO Jubilee, it's a real thing. We're going to dig into it. First, let me tell you about Cognition. They're the makers of Devon, the AI software engineer. Crush your backlog with your personal AI engineering team.
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B
So why is no one talking about.
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A
Why is no one talking about Grimes? Well, a lot of people are actually very familiar with Michael Grimes. He took Facebook, Google, Tesla, uber, Spotify, Salesforce, LinkedIn, Workday, and literally hundreds of other tech companies public. He was involved or lead banker on those. He's been in the industry for decades.
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B
He has a reputation because he becomes a customer or user.
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A
Yes, that's a fun fact.
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B
Of the different products during the kind of bidding process.
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A
Yes, yes.
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B
Talked about playing farmville. How many hours did he play farmville?
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A
He didn't say how many hours he played. At some point we'll have to ask. They just said played hours of farmville in the lead up to the Facebook ipo saying, look, I don't just use Facebook, I use the, it's a platform. I understand the full business case. I understand that there's whole other companies like Zynga that are building products like FarmVille on top of Facebook. And to understand the IPO thesis, the investment thesis for Facebook at that time, you had to believe that other businesses would be built on top of Facebook. So you had to understand far more.
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C
You would expect him to like, you.
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B
Know, spend hours talking to Annie, you.
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C
Know, for this basics ipo.
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A
For sure. For sure. Yeah, definitely. He also actually drove for Uber before taking uber public in 2018. And so he likes to dig in. He also has just a very, a very like perfectly aligned background for tech and tech banking.
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D
So.
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A
He did the traditional investment banking thing. He was at Sahlin Brothers then Bear Stearns, then Morgan Stanley. But before that he studied electrical engineering and computer science at Berkeley. And so he was never really boxed in as this pure finance guy. And there's this interesting full circle moment where many people could comp elon Musk to Howard Hughes, who started Hughes Aircraft and sort of created like the aviation boom. And Michael Grimes actually interned at Hughes Aircraft in the space and communications group back in 1985. And what is SpaceX? It's like a space and communications company. And so you have this like very full circle moment, which I thought was cool. But the real fork in the road for Michael Grimes was when he was at Morgan Stanley and he's working with Frank Quattrone, who now runs Catalyst Group, big investment bank focused purely on technology companies. And Frank Quattrone was like a heavy hitter in the Menlo park office for Morgan Stanley. And he had a bunch of associates. And Quattrone bails, he's like, I'm out of here, I'm leaving. He goes to a different bank, eventually starts his own bank, but Grimes stays. And so that allowed Grimes to really grow into his role. I think he became the co head of west coast investment banking, co head of global technology banking in 2005. And so he had basically a two decade run with all those IPOs that we mentioned. Google, Facebook, Tesla, Uber, Salesforce, a ton of companies. His office is. You can't put down a coffee cup because it's all, it's all deal toys. It's one of the craziest offices I've ever seen. He's like truly a deals legend. So then he went, he did a brief stint with the, with the Commerce Department and people were wondering like, is he going to be able to stay out of going back to deal land? Like there's so many good deals on the table right now. You got anthropic, you got OpenAI. Well, there's SpaceX, government, there's deals in the government, but it's just a different environment. You know, there's so much red tape. And famously at Morgan Stanley, Michael Grimes was set up in a way that he at least reportedly was not really required to, to deal with all like the firm wide strategy. What's going on with the rest of Morgan Stanley? They were like, go hunt like you're a killer. Just go do whatever you need do. Go fish. Go fish. And so he had a lot of, he had a really like broad, they sort of cleared the agenda to just let him go do what he did best. And he obviously was extremely successful at that in the government, you know that there's going to be 25 different committees and stuff. So it's just going to be a different environment.
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C
I don't know.
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A
But he got pulled back to Morgan Stanley and he got a promotion. So now he's the chairman of investment banking, which is I guess higher than co chair of Global Technology Banking, which sounded like the top, but there are levels and he's even higher now. And it makes sense if SpaceX, they're on track to raise $40 billion in this IPO. Nothing's really confirmed yet, but that feels reasonable in the range. So what are the investment bankers going.
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D
To have to do?
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A
They're going to have to talk to literally everyone with money. Because putting together that size of a deal is huge. Pricing, it is very difficult. And the investment banking fees could be like $400 million. And so right now people are thinking those will be split across the four lead banks, Morgan Stanley, bank of America, JP Morgan and Goldman. And Kalshi actually has a prediction market on who's going to be involved in the SpaceX IPO. I believe Citi is sitting around at like 50, 50, so they might.
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B
Yeah, they're 56 right now.
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A
56%. But the, but the major bulge bracket banks that everyone knows and loves, Goldman, JP Morgan, Morgan Stanley and Bank of America are all sort of locked in.
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B
In that 89% being the lowest of that group.
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A
Exactly. And so either way, you got to get ready for the roadshow of a century. It'll be interesting. What will Michael Grimes do to prove that he's ready to go to space? Will he go to space personally, like Jared Isaacman did? That would be pretty cool. I want to see some stunts. I want to see stunts pre road trip.
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B
Elon. I fell in love with Ani. We're starting a family.
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A
I think he's got to go to space. He's got to do the Jared Isaacman thing. Put me on top of the Dragon capsule, get me into space. I want to do a civilian spacewalk. Jared did it. He got up there, he got back safely. Put Michael Grimes in the rocket. Let's do it.
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B
Do it.
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A
And I mean, you're going to be so. It's so much easier to underwrite the deal if you're like, I've been, I've been to space. It works.
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C
It's nice.
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A
I've driven for Uber.
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B
I think everyone.
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A
I played farmville. This is the best technology. Going to space is better than playing farmville or driving it.
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B
What if he says, put me in the Mass driver. Put me in the mass.
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A
Yes.
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B
Too early for that.
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A
Let me tell you about FIN AI, the number one AI agent for customer service. If you want AI to handle your customer support, go to FIN AI. So the Wall Street Journal has more coverage on Michael Grimes. By the time Musk finally decided to take SpaceX public, and this was sort of a surprise to people, people thought, okay, Elon has run the AB test. He took Tesla public. He kept SpaceX private. He had a much better time with SpaceX doing secondary sales and fundraises very easily. He could do whatever he wanted really, like, much more control Tesla. He's getting sued by shareholders. All these different things, like regulations, SEC stuff, like it's a headache, but the stock's doing really well. And at a certain point, maybe you cap out what's possible in the private market. So all of a sudden Elon says, I'm going public. I'm merging everything together. I'm going now. I've made the decision. And so Grimes is working in the Commerce Department. And he had actually followed elon to Washington D.C. in many ways, Grimes found himself watching from afar as colleagues, former colleagues, pitched for roles on what could be the biggest IPO of all time. You're just like, I want. Get me back in. Put me in. This week's Grimes put himself back in the middle of the action and in line to reap millions of dollars of fees. Morgan Stanley said Monday he was rejoining the bank as chairman of investment banking, a promotion from his previous role as head of global technology investment banking. According to an internal memo, SpaceX has long been considered a golden goose by IPO bankers. It skyrocketed to a 1.25.
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B
Let's give it up for all the golden geese out there.
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A
Golden geese, may they never be slayed. They must just continue laying eggs. Merged it with the AI company xai, which we know. Also interesting. There's all this news about the XAI co founders leaving. But you're post acquisition. Of course the co founders leave, right? That's pretty normal.
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B
Well, I think the reason that people care is because it was happening for quite a while now.
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A
Yes, that's true. And there's also this question of just like, how much research do you need at this point? We were debating this this morning with Tyler about, okay, like do they need to just be near the frontier or do they actually need to be doing research to advance the frontier if they wind up like, should you think about xai? More like a NEO lab that's trying to solve continual learning or some unsolved problem in AI research. Or should you think about them more like a hyperscaler, like an AWS or like a core weave or like a lambda, like a neo cloud. That's just like capacity and more of an engineering task. And if they're able to build colossus and then build 10 more Colossus and then build a bunch of space data centers and they just have a lot of capacity, like who knows, maybe they wind up working with Anthropom.
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B
I forget at what point last year we started talking about that possibility.
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E
Yeah.
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B
But as the consumer products and the enterprise products have kind of fallen behind or failed to fully catch up.
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C
I don't know.
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A
I'm seeing a breakout in Grok in the comedy category on Instagram reels. You can go check them out. There's some funny, funny interactions.
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B
It is really wild. The. Yeah, you really have to find the different modes in the product, but finding the different characters going to the unhinged setting, it is about five times more unhinged than I would expect.
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A
Totally, totally.
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B
A product like this to be.
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A
So yeah, talk trash about Elon. It goes all over the place, honestly. Some of it is genuinely funny though, which is like high praise. It's a new benchmark for AI. It is sort of like doing. It's a cheat code because of that.
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B
Part of humor can be truth seeking. Right?
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A
Truth seeking. Or just saying what no one else can say or be unexpected. You don't expect the computer to tell the truth.
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B
Sometimes people can't say that. You know, there's certain topics you can't say the truth. And yeah, the unhinged mode is certainly truth seeking.
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A
It's certainly unhinged as well. Anyway, if you want a more hidden hinged voice AI experience, head over to ElevenLabs. Fully hinged. Build intelligent real time conversational agents. Reimagine human technology interaction with 11 labs will depue shared. A little hack for everyone who's into Chipotle. We reposted a clip that is truly evergreen Jordy quote. I used to get 90% of my calories from Chipotle. At certain times in my life. It was something I would look forward to. But the last time I pulled over to get Chipotle it was like, this is going to be rough. The quality has degraded. I'd rather, I'd rather fast than eat Chipotle. Taking shots at Chipotle.
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B
Yeah, a couple, couple of the younger guys on the team were saying like what? Like what's wrong with Chipotle? And I Started shedding a tear. Like shedding tears explaining how you.
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A
Back in my day, it was the.
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B
Purest when I was a boy.
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A
Yeah.
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B
It was more fresh than the farmer's market. Yeah, I love your But Will has a good hack. He says I bought a Chipotle hat on ebay once and I would walk to the Chipotle in Ann Arbor and wear it when I went. And they would just give me the employee discount every time. I didn't even ask. It was a $2 hat and I saved $7 on my $15 order every time.
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A
This is thinking outside the box. He says I used to be so into budgeting in Chipotle that I'd measure everything in Chipotle meals. Rent was four Chipotle meals a day. A nice hat was two Chipotle. Me groked it. And in case this is fraud, it was more than six years ago. So pass the statute of limitations. Can't get me. On second thought, I need to atone for my sins and repay chipotle the $21 I stole from them by purchasing $21 of their stock. I am sorry, Chipotle. That's very, very funny.
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B
Moving on. We talked about this briefly.
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A
You Another resignation has hit the timeline. The co founder of XAI is out. You want to read through it?
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B
Yeah. So he says, I resigned from XAI today. This company and the family we became will stay with me forever. I will deeply miss the people, the war rooms and all those battles we have fought together. It's time for my next chapter. It's an era with full possibilities. A small team darned with AIs can move mountains and redefine what's possible. Thank you to the entire XAI family and Elon, thank you for believing in the mission and for the ride of a lifetime. I wonder if he took Some of the executives at XAI were offered cash instead of staying around. You remember this? We talked about this, I think last week. It's possible he just said cool, time to move on.
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A
Did you see Jack Clark's post about this? Did he take it down?
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B
He said something about Iman Shu says this isn't looking good. And it's the original Xai co founders. There was 1, 2, 3, 4, 5, 5, 6, 7, 8. There's three remaining. Elon plus Manuel and Toby.
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A
Yeah, Jack Clark at Anthropic had some post but it's disappeared. But he was basically like if you're. Oh, it is in the timeline. I don't know where it is but.
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B
And someone said now do OpenAI and this Himanshu says Sam was always ahead of his time. And you look at the original list. Yeah, there's Sam Altman and Greg are left. And you had, you know, very long list of others.
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A
Yeah. Jack Clark here, he said people leaving regular companies. Time for a change. Excited for my next chapter. People leaving AI companies. I have gazed into the endless night and there are shapes out there. We must be kind to one another. I am moving on to study philosophy.
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B
Well, this was like in reference to. There was an anthropic researcher that just left and it was like this whole essay and then he ends it with this, this poem. Yeah, yeah.
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A
People get deep at these companies.
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B
Yeah. It was saud over at Klein said head of Anthropic safeguards research just quit and said the world is in peril. And then he's moving to the UK to write poetry and quote, become invisible. Other safety researchers and senior staff left over the last two weeks as well. Probably nothing. Yeah, I think there's multiple factors going on. You can't discount the fact that many of these people maybe made something in the range of $100 million in the last two years. And if you're AGI pilled enough, you believe that that will be many, many, many, many, many, many, many, many, many lifetimes worth of wealth. And so why not go to the UK and write poetry? There's obviously more dystopian sci fi vision where when this period of our lives gets turned into Hollywood blockbuster movies. This will be a moment where the safety researchers start peeling off and going all over the world to write poetry will be.
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A
I just want one AI co founder researcher to leave and be like, look, I got an allocation of an F80, I got a bus down coming, I'm good, I'm Gucci, I don't need. I mean I quit. I quit.
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B
Shlom says probably burnt. Probably burnout from organizational dysfunction and moderate to severe safety as I'm one shotting.
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A
Hmm, interesting.
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E
I don't know.
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A
Paula says guy who can't quit his AI lab because he's bad at writing essays. Just like deathly afraid of Pangram Labs. Just one shot by Pangram and you can't, you can't post slop really quickly. Applovin profitable advertising made Easy with Axon AI. Get access to over 1 billion daily active users and grow your business today. Before we move on to the next story, let's pull up the linear lineup and show you who we got today on the show. It's an absolute murderer story.
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B
It's a bar burner.
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A
Linear, of course, is the system for modern software development. 70% of enterprise workspaces on linear are using agents. First, Vicenzo Landino, nominee to break down NASCAR.
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B
Landino.
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A
Ethan Thornton from NASCAR has a new campaign.
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B
They. Yes, they did something that I'm mad that we didn't think of. They broke the world record for the loudest billboard.
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A
Okay, that's cool.
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B
It appears to be an engine built into a billboard. Like an actual gas engine that just runs. Yeah, yeah, so we'll talk to him about that. I want to ask him about the new. The new Ferrari. Get his thoughts there.
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A
Oh, yeah, that'll be great. Ashley Vance in person.
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B
Danny Grayson Thornton is coming. In person. We got the CEO of AI dot com.
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A
Oh, yeah, that's going to be fun.
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B
He basically owns AI. He controls it. And I want to ask him about the whole super bowl debacle and how everything went down. And then you said already Chris Valenzuela from Runway. And then, yeah, we'll close it out with core memory. Can't wait.
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A
Fun times.
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B
Moving on. Apollo says it avoided the pain of PE peers by steering clear of software holdings.
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A
Software? I never heard of it.
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B
What's that?
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A
I don't touch it. You know, people are saying the Sass apocalypse or sassmageddon, but assassination was right there. And I don't know why we're not just calling it the Sassination isn't that bad.
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C
I think assassination would be like Sass is assassinating something else.
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A
Oh, okay. It's like your fun got assassinated. Assassinated.
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C
Like I would think it got killed by Sass.
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A
Yeah, I guess you're right. Sasspocalypse is maybe better.
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B
Apollo says fees rise as company reports record quarter for deployment of capital doing well.
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A
Mark Rowan said the group's decision to avoid heavily investing in software companies during an era of strong of soaring valuations will bolster its growth as investors move their money to firms that avoided a sector now threatened by AI. Rowan said he believed private capital groups would see a dispersion of returns depending on their exposure to software companies following growing fears of AI disrupting many IT businesses that triggered a recent sell off. Apollo would benefit after largely avoiding such deals within its private equity portfolio and curtailing leading to the industry to the industry over the past decade, helping to bolster its performance versus many rivals. He said during an earnings call. I expect that we will be, along with a handful of other managers, prettier than we have been historically. I like that.
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B
I saw a bunch of Apollo's leak returns.
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A
Yeah.
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B
Remember yeah, yeah, yeah. I think I sent them to you.
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A
Are they good?
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B
I think they're just very, very consistent.
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A
That's the whole point of like this function.
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B
But I don't know. Yeah. Sitting prettier kind of implies that they're going to be outperforming at least their own.
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A
If you're in a bunch of software that's selling off, then yeah, yeah.
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B
Their most recent Bio fundraise in 2023 has generated a 20 net return and has already returned about a third of investors capital. Love that significant outperformance versus the broader PE industry that has struggled to exit investment. So wait, what, what have they actually been investing in? Non software industrials. I'm trying to. It's failing to mention that.
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A
So they cut its exposure to software loans as it grew increasingly bearish about the sector's prospects in the wake of rapid inroads made by AI. The decision appears to have been validated by a recent sell off in software stocks and the loans of many large IT companies amid rising AI fears. Rowan's comments came as Apollo reported better than forecast fourth quarter earnings that included nearly $30 billion of net inflows during the final three months of the last year, pushing its aum to almost $1 trillion. Apollo, which manages private funds and owns insurer Athene, said it had a record quarter for deployment of capital which helped lift the management fees it charges on its funds. So called fee related earnings rose 25% from a year earlier to $690 million, eclipsing Wall street expectations. That was boosted by a 27% jump in management fees and a 41% rise in the fees it earns by originating and syndicating deals through its capital markets arm. Net income fell 55% from a year earlier to 660 million. The earnings were impacted by 592 million income tax provision. The company also announced its board had approved a $4 billion shareback share buyback plan. Annuity sales to everyday investors moderated from last year's highs with Athene reporting $34 billion in inflow through retail annuity sales in the year, including 7.3 billion in the final three months of the year. The insurance unit.
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B
Every time we. Every time one of these companies has earnings, I just, I just makes me. It's hard to wait for at least one venture firm to get out into the public markets. Like how, how fun would it be to listen to Marc Andreessen on an earnings call?
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A
So good. I just. I was so optimistic that it was going to happen last year or maybe this year. But it just feels like that was total. Just like head fake from both General Catalyst and Andreessen. Like it never really went anywhere.
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B
They're like, I don't want to go public, but I don't want my rival to go public before me.
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A
Maybe, maybe. But I don't think it's happening. I don't think we'll see it. Although aren't there some. There's some venture funds that might be traded on the public market soon, so you might see some of that. But it'll still be tricky. It certainly won't be like a proper venture fund that we know on the markets really quickly. Cisco critical infrastructure for the AI era Unlock seamless real time experiences and new.
- [25:19]
B
Value@Cisco, Monday.com had earnings and the stock went down 21% after they flagged AI agents as a competitive threat on their earnings call. Anyways, what did they say? Trying to pull up what they said. Exactly.
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A
Issued weak guidance as it grapples with rising concerns that artificial intelligence is disrupting software business models. I imagine it's seat based right now, Monday.com and they have to transition to some sort of consumption base, some sort of usage base, something outcomes based, I suppose.
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B
Yeah, you'd think at least some would say, like we actually love the seat based model. In the era of agents, every agent will require a seat. You might have, you know, again, you might have 100 employees, but then a bunch more agents. Maybe you can't charge nearly as much on a per seat basis, but we'll see how this nets out.
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A
Yeah, it seems pretty easy just to be like you have one agent that goes into the software and does everything that it needs to and then brings it out to your organization. It's like I need to use the tool.
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B
There's one agent whose sole job is to pull it.
- [26:27]
A
Yeah, everyone gets a prompt box and then that agent has one seat and uses the tool and brings you back the results. That's risk.
- [26:35]
B
Buco Capital is out for blood. He's you worried about stock based comp me? These businesses only need half their employees.
- [26:43]
A
Oh, so he's bullish. I believe he thinks that the SaaS apocalypse is overstated. Headcounts for assorted company. Salesforce is at 87,000. ServiceNow 32,000 workdays at 23,000, Zooms at 12,000. DocuSign famously large at 8,000. OpenAI's at 7, Octa's at 7,000, UiPass at 5, Sprinklers at at 4 and Anthropic's at 4,000. Yes. UiPath still has more employees than anthropic. Infer from that what you will. The flip side of this is that the companies do need employees to go deploy AI and actually lead about change management and get the. They certainly need to talk to the NFL's photographer about the software that they should be using to upload those photos a little bit faster.
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B
Tyler over at Pelion says correct. Tabuco. I have a strange amount of conviction that they could cut up to 40% and not impact growth. Buco says in fact, it would accelerate.
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A
Yeah.
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B
Peter T Peter. It's a fake. Peter Thiel account. Peter T E A L. Okay. Says really only 10 to 20% of X is a good case study. How much? How many is that actually? Did X really only cut?
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A
I think they cut like 70% of the workforce. I thought they were up at like 5,000. They went down to like 1,000. But while you look that up, let me tell you about Lambda Lambda is the super intelligence cloud building AI, supercomputers for training and inference that scale from one GPU to hundreds of thousands.
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B
I am pulling this up. I think it was like 80%. Yeah.
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A
80% reduction.
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C
Yeah.
- [28:14]
A
That's huge.
- [28:15]
B
Yeah.
- [28:16]
A
Did it accelerate?
- [28:18]
B
I'm seeing 80. Pre acquisition. Late 2021, they had 7500 to 8000 employees. As of late, they have 20. Late 2024, they had 2800 employees.
- [28:31]
A
It was so. It was such a chaotic time. Like they were changing the business model. A lot of advertisers were boycotting and pulling out. There was political considerations. There were all sorts of things that were going on. So I would hesitate to say that they accelerated the top line, but they certainly right sized that business very, very quickly.
- [28:51]
F
Yeah.
- [28:52]
A
Derek Thompson is giving a shout out to Matt Levine. KPMG is trying to force its auditor to accept less money since accounting work can be significantly automated by AI. But KPMG makes money from accounting, so this looks like a company accidentally announcing to the world that its business model is under attack. Matt says auditing can basically be done by AI. So why should we pay for it? It's not a crazy thing for most companies to think or to say to their auditors, but it's a crazy thing for an auditing firm to say to its auditor. That is wild. KPMG should be paying Grand Thornton more. In these crazy AI times, everyone needs to pay more for trusted human auditing will go first. I guess that's what Grant Thornton said. I bet we should negotiate a discount.
- [29:38]
B
Wait, they're saying they do want trusted human.
- [29:42]
A
Well that's a Grant Thornton, like a different, a different group.
- [29:45]
B
Yeah, the, the, it seems like they'll have to switch to value based pricing too like everyone else. And the value, even if it can be one shotted with a prompt by some, you know, superintelligence is non zero. Like it is very valuable to have an external party verifying.
- [30:03]
A
Yeah.
- [30:04]
B
Verifying your work and the numbers that you're reporting. So it's definitely non zero. But yeah, price wars all over the place.
- [30:12]
A
Price wars because for a lot.
- [30:14]
B
Yeah. Or, or I would say the, the other dynamic is you have like basically legacy, you know, the big brands in the space, they adopt maybe a more Coke and Pepsi model where like Coke and Pepsi both could, you've talked about this. Get in an insane price war, cut down, compete on price so aggressively that there's just no money to be made anymore. But they have sort of like somewhat of an equilibrium where it's not really in any group's interest to compete prices to zero.
- [30:42]
A
Yeah.
- [30:42]
B
And I would say like brand is still gonna matter in this category with auditors specifically.
- [30:49]
A
And maybe that's where you find like bull cases within the broad sell off is do they like Coke and Pepsi? It's a duopoly, not an oligopoly. So there's no third player that can be, oh, we're 5% of the market, there's so much to gain. Let's go be the bull in the china shop. Just doesn't happen. And then also there's lock in around the brand and then there's also lock in around the distribution because Coke and Pepsi have trucks that go to every store where it needs to be distributed. Auditing might not be the same structure. I think it's more oligopolistic. I think there's more firms in the market and there's less of like you have to use this auditor because they're in this particular distribution channel. Anyone can pick up the phone, call the new upstart auditor that has the same level of quality at a lower price. And if you're getting a good product, you'll just go there as opposed to if you're at a gas station and they only have Coke or Pepsi. You're sort of out of luck really quickly. Railway Railway is the all in one intelligent cloud provider user agent to deploy web apps, servers, databases and more. While Railway automatically takes care of scaling, monitoring and security.
- [31:59]
B
Let's pull up this clip of Gerstner on cnbc. He hosted CNBC last week Yes. I tuned in to as much of it as I could from Altimeter Capital. Great host.
- [32:12]
A
Let's see it.
- [32:13]
G
Why is this happening to the degree it is, as we've discussed on numerous occasions. Is it overdone at times you've said yes.
- [32:20]
A
The last time we were together, you.
- [32:21]
B
Said something like 90% of the companies, the software companies that were down the.
- [32:26]
A
Way they are deserve to be. Those, I think, were your. Your exact words. Words. Where are we?
- [32:31]
G
So when you and I were together on January 6, I said, you have to understand the difference between earnings and revenue, revenue and stock price. Okay.
- [32:39]
C
And what's happened in software is hard.
- [32:41]
G
For people to get their head around.
- [32:42]
A
Because the stocks have been cut in half.
- [32:44]
G
But that's not what it's got. The market is looking into the future and saying in the past three years ago, I could, I could buy 35 years worth of Salesforce's free free cash flow into the Future, give them 35.
- [32:58]
A
Times free cash flow because I had that level of predictability.
- [33:01]
G
It was like a government bond.
- [33:02]
A
It was a sure thing.
- [33:03]
G
You definitely were going to get the those.
- [33:05]
A
And then we have.
- [33:06]
G
I do what I has done over the course of the last several months and people just said something very rational. I can't see as far into the future. So I'm going to pay less for the terminal value.
- [33:16]
A
I'm going to pay less for those.
- [33:17]
G
Future free cash flows. I'm not penalizing them because they're missing their numbers today. I'm just putting it in the too hard bucket because I can't predict those future numbers. So the only way that reverses, Scott, is those companies have to accelerate, accelerate their core revenues and show that they are beneficiaries of AI. The companies that do that, Databricks is accelerating their core revenues. I think this quarter they grew over 60%. Snowflake, clickhouse. These are companies that are accelerating their core revenues because AI relies on them.
- [33:47]
A
I think they'll do fine.
- [33:48]
G
But application software, where I can't see into the future, they're going to have lower multiple.
- [33:53]
A
I'll tell you, this week was especially.
- [33:55]
B
Acute in some of the moves on the news of this updated tool from Anthropic, which you're an investor in, of.
- [34:04]
A
Course, that speaks to me of the marketplace. And the investment community doesn't necessarily know.
- [34:11]
G
Even yet how to assess the level.
- [34:14]
A
To which software is going to be disrupted and by whom and by how.
- [34:19]
B
And even a simple, what appears to.
- [34:21]
A
Be a simple update or an upgrade.
- [34:24]
G
From an anthropic causes Software names to.
- [34:27]
A
Go down, it causes private credit names to go down because they're exposed in their loans to software businesses. We're still trying to get our arms, it feels like around this exploding technology and the impact it's going to have.
- [34:41]
G
And it's, and it's exponential the rate of change, the rate of improvement of these models.
- [34:47]
B
We had a topping any bubble you can get his hands on in December. A lot of good points. I mean I think the real SaaS apocalypse might not start until you have some of the labs public and people can actually really rotate out of software fully and say I don't want to own this thing, that I don't fully understand how AI is going to impact it when I could own the disruptor. Right. The anthropics, the OpenAI's, et cetera.
- [35:14]
A
Yeah, yeah. People were asking like where, where will the 50 billion come from? Where will the 100 billion of capital come from? And, and we see this in China too where one company will go public and you actually see a drop in the previous Baidu's or whoever the legacy company is because there just isn't that much liquidity in the market. So it needs to come from somewhere.
- [35:32]
B
Yeah. I just don't know how the narrative around SaaS flips positive because the models are not getting worse. Right. They only get better. We actually need to see some type of SaaS would benefit from a model plateau. Right. It's like hey, there's sort of a set, we have a set of capabilities. SaaS companies can deploy this. But if the models just keep getting better and better and better and agents get better and better and better, where's the bottom for SaaS other than some type of minimal free cash flow multiple?
- [36:11]
A
Well, it's like refocusing on a narrative that has durability even in a world where software R and D is essentially free.
- [36:21]
B
I guess what I'm saying is Brad's right. If you see a business actually really accelerating growth, accelerating, then it's possible to get excited about that one company. But it's hard to get excited at any point about SaaS broadly because the models are just going to keep improving and that just seems to be more and more of a threat.
- [36:40]
A
Yes, but within SaaS there will be companies that, that reveal to the market and correctly message that they are in fact AGI resistant because of ad networks, because of lock in effects, because of regulatory moats. There will be a number of categories that emerge. Like when we talk about the payment rails, those feel like yes, you could maybe Vibe code it. But like are you going to vibe code your bank charter and all these other things that you need to do and get all the customers like the distribution, the lock in. So I think within SaaS there will be things that are pretty easy to just rip out and replace with something directly like a model. And there will be other companies that are old and are legacy, but you're just like oh yeah, that's actually. That can't be assaulted by a model. It's impenetrable because it's actually a different thing. And so those companies will wind up sort of rebounding, I would imagine.
- [37:41]
B
Yeah.
- [37:41]
A
Anyway, New York Stock Exchange want to change the world. Raise capital at the New York stock exchange.
- [37:48]
B
When 1792.
- [37:51]
A
1792. That's when they started.
- [37:52]
B
That's when they started.
- [37:53]
A
Overnight success.
- [37:55]
B
We created the country and then almost immediately we decided we gotta start. Time to exchange some stocks.
- [38:02]
A
Gotta start, start.
- [38:03]
B
Michael over at Quiet Capital is quoting buco says for 50. Buco says for 50 years we treated the supremacy of asset light businesses as a permanent economic law. But if AI commoditizes asset light businesses, we'd just be reverting to the historical mean where value accrued to atoms, infrastructure, energy. It would be a 50 year blip, an anomaly.
- [38:24]
A
Interesting.
- [38:26]
B
Michael says this is one of the most underrated observations in tech right now. If AI commoditizes software, what's actually safe, regulated liability bearing businesses? Someone has to be on the hook.
- [38:37]
A
Oh sure.
- [38:38]
B
Anything touching the physical world, hardware, manufacturing, energy, that's the kind of Tesla.
- [38:43]
A
Yeah. These are the subcategories of things that are sort of SaaS businesses now, but will reveal themselves as being not actually that. Asset light.
- [38:53]
B
Yeah. Proprietary data sets makes your data more valuable, not less. Marketplaces and businesses with network effects liquidity greater than software, operationally intense businesses, the bad businesses become the best ones. And cybersecurity and physical security. More AI equals more attack surface. Yeah. Equipment share. I wonder how they're doing. They were went out IPO'd at this, I guess it was a week or so ago, January 23rd. They've done well specifically because they have so much supply on the platform that they actually own. And we're just so far away from anything like an optimist being able to like hey, make me a bunch of heavy machinery, don't make mistakes.
- [39:42]
A
Yeah. Carried no interest in the replies saying how is this underrated? Most have been talking about this for over a year. I'll say it again, an H vac business is not vibe coding a Service Titan competitor. That's true, but there's still the risk of the software vendor for H Vac businesses now has 25 competitors that can vibe code competitors. And there's just a lot more fragmentation, a lot more competition in the space.
- [40:13]
B
Yeah, that's interesting. Service Titan serves pretty wide range, but they also serve a bunch of SMBs. And those SMBs, if you went to them and say, hey, I can build you servicetitan but I'm gonna cut your bill in half. That because I can use AI.
- [40:27]
A
Exactly.
- [40:28]
B
That is a real risk to the bottom because a single, you know, owner operated business might just say like, yeah, no one's getting fired if I choose the wrong software. It might be a little bit annoying, but if I can save a lot of money, maybe it's worth it. So I think there is some risk.
- [40:42]
A
Yeah, there was a good comment in the chat earlier. Someone was saying, you know, it's the famous Bezos quote, your margin is my opportunity. And so small company comes in, sees high SaaS margins, can actually go attack them now and can, instead of needing to raise a billion dollars and do five years of R&D, they can raise 10 million and do one year of R and D and have a competitor that's ready to go head to head on a battle card against an entrenched public company SaaS company. And maybe they're only earning 30% margins instead of 60% margins, but they're happy with that because hey, it's a new business and they started it from nothing. And if they make $10 million, they get to take a lot of that home and stuff. And so there's, there's a, there's a lot of opportunity for these new companies, but then that's obviously a threat for the incumbents really quickly. Public.com investing for those who take it seriously, stocks, options, bonds, crypto, treasuries and more with great customer service. You want to go next?
- [41:39]
B
SHIELD says the greatest rebrand in enterprise software history is calling consulting revenue Forward deployed Engineering. I do wonder if a year or so from now we'll see companies that, you know these companies that went from 1 to 10 or 1 to 20 million in revenue really quickly. It just turns out like, like they were just kind of like doing a bunch, they were doing about $10 million work of worth of engineering work and it wasn't actually again a lot of them are setting it up where like hey, we're going to come and build a bunch of software for you and then we're going to charge on an Ongoing basis or based on usage. But, but still, I'm sure there's some examples where it really is just like effectively consulting or you're running a software development agency.
- [42:22]
A
Yeah, yeah. It's funny thinking about OpenAI. I think they're at 8,000 employees and wasn't the report that they're hiring something like 800 for deployed engineers? So you're going to have 10% of an AI lab that's focused on AI research. Curing cancer is going to be like four deployed engineers. And you have to imagine that was basically zero five years ago. I mean, I guess Greg Brockerman was out there paying people to use GPT2, which I love. But it is going to be a very interesting shift for that business and I think the forward deployed engineering is going to be important. The AI diffusion question, it's a lot of sticky systems. It's a lot of people that don't have time. The fact that we see these spikes in attention during long weekends and holidays, it's like that's when people have time to go do the new project and stop doing the same system again and again and again. And a forward deployed engineer comes into your organization and just is able to do that hard work that you don't have the slack capacity for.
- [43:25]
B
Brian says, did you guys see that guy who offered in person open claw setups for people and accidentally realized it was a seven figure business? No, I did see this. It was kind of like a Geek squad thing.
- [43:36]
A
That's really cool.
- [43:37]
B
Yeah, I wonder.
- [43:40]
A
No, there are plenty of people who are like, I don't want to open the terminal ever. I feel like I'm hacking into the matrix. It's just not for me. I don't know I'm going to mess up. I don't know any of these commands. And so I mean that's why the labs are launching desktop products around that are wrappers for the terminal agents. But yeah, there's going to be a lot of bull market for, for deployed engineers in my opinion. What do you think, Tyler?
- [44:03]
C
I was going to say that's like Ben, Ben's scared to use the terminal.
- [44:06]
A
Oh, called out. Called out. He's not even here.
- [44:12]
B
Where's Ben?
- [44:14]
A
He's practicing tmoxer CrowdStrike. Your business is AI. Their business is securing it. CrowdStrike secures AI and stops breaches.
- [44:25]
B
China is going all in to beat the US on humanoid robots. Beijing is showering companies with support. But some fear of bubble. Where's our bubble gun?
- [44:35]
A
Oh yeah, we don't have the Bubble gun. But look at this terrifying lead. Do you see this? So it has. If you scroll way down in the article, you can see the comparison of the different humanoid robots. And they're getting taller. Chinese humanoid robots are getting taller very, very quickly. So the Unitree G1. The Unitree G1 is the robot that most people think of when they think of Chinese humanoid Robot. The Unitree G1 has 23 joints and it's 4ft 4 inches tall. 4ft 4 inches tall, that's something you can drop, kick across the room. It's probably pretty safe. But they're getting taller. The Unix AI Panther has 34 joints and is 5 foot 3. The Ubtech Walker S2, it has 52 joints and it's 5 9. We're getting short king status now then. Now the AI Squared Robotics AlphaBot 2, 5 11.
- [45:41]
B
Wait, that could be some regulation that I could get behind.
- [45:44]
A
Yes.
- [45:44]
B
All humanoids should be capped at a certain height so that if any people out there are a little bit on the shorter side, they get to feel tall. But in general, a lot of the average person should mog the robot.
- [45:58]
A
Yes, yes.
- [45:59]
C
On Dwarkesh, Elon said The Optimus is 511 as well.
- [46:02]
A
5 11. That's a very reasonable height. So the AI squared robotics AlphaBot 2, 34 joints of freedom.
- [46:09]
B
Yeah, let's give it up for the.
- [46:10]
A
Short term degrees of freedom.
- [46:11]
B
Let's give it up for Trey.
- [46:12]
A
It's. Yes, give it up. It's 511. It has wheels. But it looks, it's starting to look intimidating. It's starting to look.
- [46:22]
B
Ashley Vance was at the latest robotics fight. We got to ask him about that later.
- [46:28]
A
Yeah. So the Wall Street Journal has a whole deep dive in what's happening in China with regard to humanoid robotics. China's going all in to beat the United States on humanoid robots. Of course, they have a ton of industrial advantages. So Elon Musk. Musk has been telling investors for months that Tesla's optimist humanoid robot will revolutionize the world and create a new mega industry. But most of it could belong to China. He has warned China is an ass kicker. Next level. Musk said in January, to the best of our knowledge, we don't see any significant competitors outside of China. China is moving quickly.
- [47:01]
B
Shots fired at figure and 1x.
- [47:03]
A
But I mean, the supply chain is not Sunday.
- [47:07]
D
Oh yeah, true.
- [47:08]
B
Yeah. He talks about this in the context of are you going to be able to make a million?
- [47:12]
A
Yes, yes. He's thinking about like massive scale gigafactory status. So China's moving quickly to dominate the industry. Humanoid robotics companies are sprouting up from Shenzhen to Suzhou with more than 140 and counting. There's 140 different companies. They got a market map over there. We have five and they have 140. They're tapping a vast ecosystem of parts suppliers and engineering talented. They're starting to produce humanoid robots at.
- [47:37]
B
Scale and actively running a bit right now. That's how you run.
- [47:44]
A
You ever go through TSA and they make you take your shoes off? What's the deal with airplane food? They're actively introducing them into real life scenarios in factories, hotels and offices.
- [47:57]
B
John?
- [47:58]
A
Yes, Grok.
- [48:00]
B
Unhinged voice mode in an optimist.
- [48:03]
A
Very intimidating.
- [48:04]
B
Hanging out around the office, just running benchmarks.
- [48:06]
A
It would actually be hilarious.
- [48:07]
B
It would actually be hilarious.
- [48:09]
A
Get ready. I mean you're going to be able to do that in like two years. That's it's going to be very viral. Is that like skin over a humanoid? Not a fan of that. I think I like the Terminator more than the humanoid with the skin. That is odd. Setting the broader industry direction is Beijing, which has identified embodied AI, the fusion of artificial intelligence with physical systems, as cutting edge technology. As a cutting edge technology area China wants to own in the coming five years. It's in the latest five year plan. Local governments are showering companies with land and discounted office rent. Banks are offering favorable loans. Since late 2024, Beijing, Shenzhen and other cities have established investment funds totaling more than 26 billion. That's right. That's 1,000 times as much as France is is investing to inject capital into the industry. Just kidding. France, we love you. Government agencies and state owned companies are serving as early adopters, buying up humanoids and deploying them in museums, at events and on the street as robocops performing traffic control. The deployments are helping firms build a market and collect data to make the robots work better.
- [49:20]
B
Yeah, Bill Bishop was saying next week China has seasonal celebration that they're doing and there's gonna be hundreds of robots on display.
- [49:28]
A
Totally.
- [49:29]
B
They're very good at effectively like scripted dances, maneuvering.
- [49:33]
A
I have been surprised that, I mean China was very early with the drone shows then. We've seen a number of drone show companies come to America and do like sort of bring that technology to America. I still. Have you ever seen a drone show in person in America? I've never like run into one like you know, oh, they're oh like I'm driving in LA and like The Chargers stadium just has a drone show.
- [49:55]
B
Gotta go to Katzenburg.
- [49:56]
A
Yeah. Or like, if I live near. I live near the Rose Bowl. So, like, I would imagine I see fireworks from the Rose bowl every once in a while. They have concerts, but I've never seen a drone show there. That certainly is getting diffused into America. But the humanoid robot shows can do a whole nother level of just like bizarre thing. And it works particularly well there as opposed to a truly unbounded. Like just be a worker at a restaurant.
- [50:22]
C
Right.
- [50:22]
A
It's like just dance in the scripted really quickly. Sentry. Sentry shows developers what's broken and helps them fix it fast. That's why 150,000 organizations use it to keep their apps working. So the moves closely track the way in which China built up other industries, such as electric vehicles, which benefited from incentives from buyers to help stimulate demand. Now, China has many of the world's most notable EV makers, including brands that are eating up the market shares of General Motors, Volkswagen.
- [50:51]
B
I've seen the people doing that. I'm outside in the byd.
- [50:55]
A
Oh, yes. Is that a Drake line? Did he actually say.
- [50:58]
B
He says, I'm outside in the amg. Oh.
- [51:01]
A
And they changed it.
- [51:02]
B
So there's like, if this is a campaign byd because it's always showing off the features, like crazy. It can, it can. The way that it can automatically park, like parallel park where you. Not just like a normal parallel park, but it can like shift. I don't know. It's like the Hummer ev.
- [51:19]
C
It has like the crab walk, right? The wheels turn off the axis.
- [51:22]
A
Yeah, yeah, yeah. You can sort of tank turn where you're spinning the car without moving forward or backwards. And then I think you can also tilt all four wheels so you can drive in at a really aggressive angle. But I feel like I saw one. Maybe it was AI that was like even more brain breaking than anything I'd seen from an American car at all.
- [51:40]
B
Yeah. It can do really crazy U turn.
- [51:43]
A
And then we also. I saw one video of someone driving BYD on, like sand dunes that was really crazy. So people show it off in snow. People show it off all over the place. Good marketing. Good marketing. We'll see what they do with the humanoid robots. China is once again mobilizing state support, supply chain depth and rapid commercialization to build a new strategic sector. Success will depend on who can best solve the myriad technical problems associated with humanoid robots. The industry is still in its early days and it may take years to take off if it ever does skeptics say humanoid robots are a bubble and may never find a true use case. What? It's like the most obvious use case. You don't have to reach that far to be like, put the E commerce package in the box. Like, they're already doing it.
- [52:31]
C
Yeah, like anything a human can do. I can't think of any good use.
- [52:34]
A
Who said this?
- [52:36]
B
Horse says cars may be a bubble.
- [52:39]
A
Bad news. China has a broad supply chain of manufacturers that make the nuts and bolts of humanoid robots. Government agencies and state owned companies in China are buying up humanoids and deploying them in museums. That's an interesting place. It does feel like we'll be in an era of like, the Optimus is already deployed into a lot of Tesla showrooms, which is like just a cool thing to see if you're at. You know, I was at the Americana brand in Glendale, went into the Tesla store and it was just like, there's lucid Airstore and there's Rivian store, but the Tesla store has a robot. So you're like, oh, I want to go see that robot.
- [53:10]
C
Tesla Diner has one.
- [53:11]
A
Oh yeah, they do.
- [53:12]
C
Yeah.
- [53:13]
A
I drive by that every single day. And I never, I still have never been because I pulled in the parking lot one day and I felt so uncomfortable because it was all electric cars and I'm sitting there with a supercharged V8 just being like, I don't belong here. I don't feel welcome. And so I shamefully, like, drove away.
- [53:29]
B
Yeah, I have so much respect for Tesla and yet I've never wanted a food product from Tesla. That is a big part of it.
- [53:39]
A
I mean, it's like a stunt marketing. So let's go into US worries. Even so, China's momentum is a source of concern for US policymakers and tech leaders. The White House has been working on an executive order aiming to boost the development of American robotics industry. Among the US's concerns, many American robotics companies will rely on China's supply chain. Dylan Patel over at Semi Analysis has talked about this a lot. Like, if humanoids become a thing, like China has the supply chain almost exclusively. Tesla's optimists will count on Chinese suppliers for components such as roller screws for robot joints and motors for robot hands for mass production. The US still leads one key area, the foundational AI models that serve as the brains of humanoids. Companies including Tesla, Boston Dynamics and Agility Robot robotics have made advances tapping cutting edge technology from the likes of Nvidia and Google. But China has a broad supply chain of manufacturers that make the Nuts and bolts of humanoids, including sensors, batteries, and other components. With the ability to source so much locally, Chinese humanoid companies are able to make design changes easily and at low cost. It is a hassle buying from China and waiting two weeks while something ships to you. They don't have to do that. They just walk right across the street, pick up whatever they need, bring it back.
- [54:50]
B
Yeah, we're in the process of shifting. We did some sampling for merch.
- [54:55]
A
We're refactoring our supply chain.
- [54:57]
B
Exactly. Our merch supply chain. I would say it's looking like 80% of the merch that we make for our upcoming drop will be made right here in Los Angeles.
- [55:10]
A
Yeah, that's exciting.
- [55:11]
C
I mean, I do think there's probably some cool things you can do with delivery of humanoids.
- [55:14]
B
Right, because if you're buying it from China, you could just like have it go on the plane and just sit.
- [55:19]
A
Down, sit in a seat, walk over, have it swim. Yeah, it needs to learn to swim. Give it a windsurfing board, a paddle.
- [55:28]
C
Board, give it a foil, and it.
- [55:29]
A
Can paddle all the way here. I mean, Palmer's talked about that with Anduril. They want the planes to fly from the factory straight into the battlefield. Pretty crazy. Chinese makers of humanoid robots, which include human, like machines with wheels as well as those with legs, don't have to have legs to be a humanoid robot, apparently announced orders worth more than 300 million in the second half of 2025. So the Chinese humanoid robotics industry is at a $600 million run rate. It's not bad. It's not tiny. Like, that's pretty significant. That's more than just like demos. I mean, sure, there's like a lot of museums and random places where you just want to show something off, but that's getting.
- [56:17]
B
It's hard to, like, you know, take every Elon projection at full face value. But he's talking about being able to make up to a million humanoids in the. What is it, the X and S facilities in Fremont? I have no. It's so unclear where these are going to price still. I think you can look at. You can look at Chinese companies for like, some type of comp. Like, it's going to be hard to.
- [56:42]
A
Really compete, but Morgan Stanley has, let's see, 100,000. So that's very interesting. So the run rate right now is $600 million. Morgan Stanley is predicting up to 100,000 humanoids shipped in 2026. If there's not significant increases in price for these, that would be $6,000 per humanoid. It must be higher. So I would expect, based on this Morgan stanley prediction of 100,000 humanoids shipped in 2026, you would expect revenue for the industry to be in the billions for sure. Because I have to imagine that the average selling price of a humanoid is like, more like 20,000. It's more like a car.
- [57:28]
B
You can get a unitree G1. How much on their site for $13,500. But they're going to charge you for delivery, John. They're going to charge you $1.44.
- [57:38]
A
Wait, really? $1.44?
- [57:41]
B
They're like, sorry, our margins are so bad on this. They're actually negative. We can't afford free shipping for this shipping this human sized thing across the ocean.
- [57:52]
A
We're going to have to ship it in the spookiest coffin possible. Wake from the dead. Very macabre. Very, very spooky. Anyway, let me tell you about Plaid. Plaid powers the apps you use to spend, save, borrow, and invest securely. Connecting bank accounts to move money, fight fraud, and improve lending. Now with AI adjusting bed sheets. On a recent weekday at unix, AI, a Chinese robot maker, founder Fred Yang showed a group of investors how its wheeled humanoid Panther could easily adjust messy bed sheets, pick up trash, and place dirty clothes in the laundry machine and start the wash. The company has about a hundred employees now, and it's developed three versions of its humanoid robots with a starting price around $12,000 each. It is deployed in hundreds of places, such as hotels, mostly in China. I was in a hotel in San Francisco once, and there was a. There was not a humanoid robot. It was more like a trash can with wheels, kind of R2D D2 looking like Guy. If you ordered coffee, they would put it on the delivery robot and then the robot would get in the elevator, take the elevator up to your room, and then knock. And then you would take it out of like the bin. It was more like those delivery robots that you see on the street, the Cocos. Right. So, you know, just one level up that it still has wheels. It needs to be in a controlled facility like a hotel. Something that's not super unpredictable.
- [59:19]
B
Goes pretty hard to name your humanoid Panther.
- [59:21]
A
Panther's a good name. I don't know if I would be fighting alongside Panther in the Singularity. I think in the, in the Skynet apocalypse. Panther's coming for me. I'm gonna have to shred it. Yang, who studied at the University of Michigan and Yale University, returned home to China to start UNIX a year and a half ago. He said China's deep bench of technical talent and government support help make it a good place to launch. Some local governments offer free land and office space for three years, followed by three more years at half price. They're giving out free land over there. We can't even get an art gallery in Hollywood to make a TV show. We need help.
- [60:01]
B
Saga continues.
- [60:02]
A
We gotta compete. Policy is one of the most decisive reasons that embodied AI is doing so well in China, yang said in August. I treat the government policy as a force to crack the market and our embodied AI startups are the force to push. They call it Robot Valley. Other cities and provinces have set up their own action plans and embodied AI funds to provide capital for the industry. Tencent Huawei and EV maker BYD have been part of a so called Robot Valley in Shenzhen with 15 robotics firms there. Shenzhen has said it is setting up a roughly $1.4 billion fund focused on AI and robotics industries and another valued around 640 million. What is that a fund for ants Robotics fund.
- [60:49]
B
They're making.
- [60:51]
A
That's a lot of money. That's a lot of money to just give away.
- [60:54]
B
They're making ant size robots.
- [60:56]
A
I mean that's a lot of robots. That's definitely like get a ton of these companies to Series B, get them with a product that actually ships, hire good people, do the R and D, do initial manufacturing run and then yeah.
- [61:11]
B
You'Re doing that much with triple layered STVs every day.
- [61:14]
A
Every day. One humanoid robotics firm there, AI Squared Robotics, enjoys subsidized rent as well as access to interns from nearby universities. Their costs are also subsidized. Eric Guo holds a PhD from Purdue and worked previously at Microsoft. The firm's general purpose humanoid, called Alphabot, is currently used in factories including lcd.
- [61:35]
B
This implies there's a firm called Sigma Bot. Sigma Bot, somewhat antisocial, doesn't actually like.
- [61:44]
A
Humans and looks out on a rainy day. It's just plotting, aiming and listening to vibreals. Our primary focus is to figure out how to make robots usable and operational even when they haven't fully achieved 100% perfection in technology, guo said in September. Beijing also has an economic development zone with humanoid robot startups. They are doing a lot 14 billion to support AI and robotics industries. So China's recipe for government support, low cost supply chains and technical talent worked wonders in the EV industry, but it also led to hundreds of brands crowding the market and severe price competition with many companies unprofitable. As more robots robot firms emerge, fears of a bubble have risen. Hoping to avoid that outcome, China's government is drafting a set of technical standards to guide development of the humanoid robot industry, weed out unqualified players and accelerate adoption, according to researchers involved in the process. In November, China's top industry ministry set up a standards committee with executives from leading companies as well as state labs. So China's financial regulators have also tightened oversight on robotics companies seeking to go public to reduce the risk of a bubble. So they say if you go public, you gotta be accountable. You gotta follow all of the regulations so that you're not just fleecing the public.
- [63:05]
B
Apparently, Warren Buffet was an investor in byd. Gabe just brought this up. He was, but he exited in late 2025. He held it for 17 years.
- [63:19]
A
What I didn't know byd was that old. Wow. He got in early. Was he like a pre ipo? Pre IPO investor or something? I don't know. How do you get into BYD 17 years ago? That's crazy.
- [63:33]
B
Buffett began investing in BYD in 2008 when it paid 230 million for 225 million shares, equivalent to a 10% stake at the time.
- [63:44]
A
Wow.
- [63:44]
B
Basically led the Series A.
- [63:46]
A
Basically, yeah. That's crazy. Let me tell you about Shopify. Shopify is the commerce platform that grows with your business and lets you sell in seconds online, in store, on mobile, on social, on marketplaces, and now with AI agents. The Wall Street Journal is trying to unpack what is going on in the U.S. labor market. They identified a number of factors that were sort of interesting. I thought we should read through them. So the pace of hiring in America has dropped precipitously, and there isn't a single reason why, says the Wall Street Journal. Instead, there are a lot of them. Uncertainty over tariff policy. There's a variety of things here, but they identify. So uncertainty over tariff policy has made it difficult for many companies to plan ahead, leading them to hold off on hiring some, particularly small businesses. Tariffs have raised cost, making it more difficult to take on new employees. Higher short term interest rates are another pressure, particularly for smaller firms, which often rely on credit card borrowers to meet financing needs. Tech companies that hired heavily in the wake of the pandemic are still dealing with an overhang of workers. And then there's another factor. Workers aren't leaving the jobs they have. The number of workers. The number of people that quit in December was 3.2 million. And in March of 2022 it was 4.5 million. So less people are quitting. And so that's obviously putting pressure on the labor market because there's less employee churn. When post pandemic hiring was in full swing, the quits rate which measured, which measures quits as a share of employment was 2%, well short of the 2.3 it averaged in 2019 before the pandemic.
- [65:19]
B
Yeah, it felt like at the back half of last year, everyone, a lot of people started saying very publicly, if you have a job right now, keep it.
- [65:28]
A
Yeah, so yeah. So the labor market on Thursday reported that the overall number of hires employers made in December came to 5.3 million. That put the so called hires rate, the number of hires employers made as a share of overall employment at 3.3%. That's a very low number, not only below the level of a few years earlier when businesses were desperate to bring on new workers, but also well below its level before COVID hit low. Hiring has historically correlated to much higher unemployment rate than the US is actually experiencing about 4.4%. The disconnect between the two reflects an unusual environment where despite the low pace of hiring, employers haven't been shedding as many workers, notwithstanding some of the big recent layoff announcements. As a result, employment has been growing at a glacial pace with the economy adding the fewest jobs last year outside of a recession since 2003. And economists expect annual revisions, including the January employment report coming out Wednesday, will bring the 202025 jobs tally lower still. The relatively low number of layoffs, said JPMorgan Chase economist Mike Feroli, is a reflection of an economy that continues to chug along and hasn't undergone the kind of shock of demand that leads employers to start shedding workers. So top lines aren't decelerating. The economy is doing well. But the low level of quits, on the other hand, is probably driven by workers sense that the labor market is fragile. And there was another article in the in the Wall Street Journal today about.
- [66:55]
D
How.
- [66:58]
A
The recruiting business is flipping and people and it used to be employers would pay the recruiter fee, but now job seekers are paying recruiters to find me a job. Like if you find me a good job, I will pay you to find me the job.
- [67:12]
B
Oh, success fee.
- [67:13]
A
Success fee by the talent. Yes. Which is the opposite of what it usually is.
- [67:18]
B
That's interesting.
- [67:19]
A
So consumers surveyed by the New York Fed in December put their chances of finding new work in the next three months if they lost their jobs.
- [67:26]
B
It's interesting because if you're a company and you find out somebody's going around offering to pay people to find them a Job. That's a very probably negative signal because a lot of the best talent doesn't like has no shortage of job opportunities. For sure.
- [67:38]
A
Yeah, yeah, I was looking at this.
- [67:41]
B
I mean there were other attempts at this over the years. People trying to build kind of like talent agencies for tech talent. There was at least one company that was doing that. I don't know the latest on them, but it's. Yeah, people trying to comp like tech hiring market to sports. Right. And it felt like we had that moment in summer of last year, but in reality those people again, you know, hopefully if you're negotiating a comp package where 100 million or 50 million or even 10 million, you have like a lawyer involved. But unclear if anybody really capitalized on that moment and became like the agent for a lot of these different researchers.
- [68:27]
A
Yeah, I talked to one person who was sort of a talent agent recruiter, I think for like GP positions at venture capital firms. And there's a few other people that have sort of played in that space, but not too much. I have one more thing, but quickly. Figma. Figma helps. Figma make isn't your average vibe coding tool. It lives in figma so outputs look good, feel real and stay connected to how teams build, create code back prototypes and apps fast. So I was looking at the share of white collar work over the last century in America. In the 1900s, white collar work was around 18% of American labor. And electrification was the big technology of the day. It was transforming factories, cities and homes. Then in the 1910s, 19 teens, we got the automobile. White collar work moved upwards to 20%. Then in the 1920s, you get radio and consumer electricity. White collar work goes up a little bit more, 22%, 25%. In the 1930s you get aviation. Despite the Depression, white collar work kept climbing 25 to 27%. In the 1940s you get nuclear, radar, synthetics. White collar work goes up to 30% in the 50s. You get television, you're up at 35, 40%. White collar work in the 1960s, you get mainframe computers and space technology. White collar works up at 42%. IBM is starting to dominate the 1970s. You get semiconductors and microprocessors. White collar work goes up to 46%. The personal computer in the 80s leads to 50% of the American workforce working in white collar work. The Internet in the 90s pushes that up to 58%. You have Netscape, Amazon, Google mobile and smartphone kick off in the 2000s. White collar works up at 60% then and then in the 2010s you get cloud computing that takes it to 62%. So now we're at like between 60 and 63% white collar work. There's this big question about like, do we redefine what, how people work? Where do things shift around? But Tyler.
- [70:35]
B
Yeah, that's what I was gonna say. I mean, I think Boris, you got a blue collar on right now.
- [70:38]
C
You do have a blue collar. I think it was Boris yesterday.
- [70:41]
B
He was like, well, maybe we have more blue collar jobs in some way.
- [70:44]
C
But the colors are less blue. Right.
- [70:46]
B
So it's like maybe you're in a.
- [70:47]
C
Factory, but you're only. You're just using an iPad. Right. You're not actually like moving things with your hand.
- [70:52]
A
Totally, totally.
- [70:53]
B
I think it's like very.
- [70:54]
C
I think the line is getting increasingly blurry.
- [70:55]
A
Yeah, I know.
- [70:56]
B
Like in the U.S. yeah, yeah, yeah.
- [70:58]
A
No, I completely agree. And it does seem like people will just be moving around to new jobs. New jobs will be created, but certainly a lot of opportunity for like chaos and, and turmoil if things happen quickly. Although at least according to the Wall Street Journal, there's a whole bunch of different factors that are going on. The labor market. They sort of come conclude that article talking about how it's still difficult to really quantify the impact of AI because there's so many other things happening around interest rates, tariffs, quit rates, hiring, slowing, Covid overhang that you shouldn't just jump to being like AI is 100% explanatory for what's happening in the labor market. Quickly, let me explain to you. Labelbox, reinforcement learning environments, Voice robotics evals and expert human data Label Box is the data factory behind the world's leading AI teams. You want to go back to Ferrari?
- [71:52]
B
There's more Ferrari Ed. He's an automotive advocate. According to his bio, he says to all the people who for some reason want the inside of a Ferrari to keep looking like a mid range gaming mouse, here's a historical comparison that may provide some context for recent design choices. This is very cool. I really. It was easy obviously to clock that the steering wheel of the Johnny. I forgot Ferrari looks like some classic Ferraris, but I hadn't seen a shot exactly like this. I can't tell, I don't know what car this actually is, but you can see a lot of the same functionality. Even the vents up at the front are quite similar. They've just modernized it. So my main thing. I'm going to have many more thoughts on the Ferrari, but I will wait to See what the outside of the car actually looks like.
- [72:43]
A
That's true. Yeah. I mean, very mixed results. Some people were super excited about this design. It's always just cool to see, like, what Jony I've is up to outside of Apple. Like, this is one of the first big projects that we've seen. You know, we've heard about the love from acquisition with OpenAI, what he'll be doing there, but all of that is still very rumored. It's unclear how much of his design work is actually working its way through the OpenAI organization. But here is just like a project that he did from start to finish and turned over. Like, they delivered not just like a deck, but like a series of books. Do you see this, like five, multiple hundred page, like, coffee table books around their work? Like, here are all of our references. Here's how we think about Ferrari's history, all this stuff. I think it was very, very cool, but very mixed reaction. Lee says cover the badge, and you'd think this was the interior of a budget hatchback. I don't know if that's entirely fair. I think that up close and personal.
- [73:40]
B
You could convince me from far away that this was in the new Mini Cooper.
- [73:45]
A
Yeah, totally.
- [73:46]
B
But I think the thing that is undeniable is, like, some of the little details, right? You can. To start the car, you can, like, pull this thing out, lights up. I think that'll be very cool.
- [73:54]
A
Yeah, Ilya has that. Imagine starting your car like that. It does look very cool. Is this in the ceiling? Like, why are. Why is the video.
- [74:03]
B
Oh, yeah, that would be.
- [74:04]
A
This looks like you pull it down from the ceiling. It doesn't look like the way the camera is pointed looks like this will be up top, which is very cool and very different. And I think this is something we were talking to a friend about that the tactile feel and the way, like, I saw some ASMR video of of all the different buttons and the buttons make. Even if it looks like the same switch, it makes a slightly different sound when it clicks. And so you could potentially have an audio cue that knows, okay, if I click this, it's the light. If I click this, it's the windshield wiper. If I click this, it's defrost. And all of that makes no sense in a gas car because Ferrari's gonna be very loud. But in an electric car, you could actually hear all these little subtle cues. And it really takes beyond, like, the image doesn't do it justice. I just know that when you're there when you're feeling the materials and then interacting with them and the sound that the materials make and the feeling of every knob, every button, how it works, that's very interesting. But at the same time, Pinorm says it looks like a PS2 peripheral. So you got them dead to rights there, but you got to see it. Yeah, this is it. All the buttons and switches in the Ferrari Loose sound. Incredible. Love that they went for a real tactile experience instead of just a touchscreen. If we have audio here, you can hear them sound different. That's really cool. Yeah.
- [75:28]
B
So those sounds good, but that's good. That's good. You ever seen one of those new car reviews where they push the plastic throughout the whole car and sometimes it like, listen, listen.
- [75:40]
A
So if you go back a little bit. So listen to the different switches, they sound different even though they're like on the same dash. This one.
- [75:50]
B
Okay.
- [75:51]
A
See? Different sounds. That's really cool and unique. I've never seen that before. I was intrigued.
- [75:58]
B
I like this.
- [75:58]
C
I like it.
- [75:59]
B
I like this.
- [76:00]
A
Johnny, I've come on the show Johnny Drive. Johnny Drive's making cars now. A lot of people in Silicon Valley are teeing up. Ilya Sukar said, how do I order the Johnny I've carried? I'm ready. Gotta call it the Johnny Drive. Anyway, Phantom Cash. Fund your wallet without exchanges or middlemen and spend with the Phantom card.
- [76:22]
B
We have Vincenzo.
- [76:25]
D
We do.
- [76:25]
A
Amazing.
- [76:26]
B
Ready? We can bring him in.
- [76:27]
A
Vincenzo is in the Restream waiting room. Let's bring him in to the TVPN Ultra Realm. Vincenzo, how are you doing?
- [76:33]
B
What's going on?
- [76:34]
A
Hey, Vince, how are you? Good to see you. Yeah, good.
- [76:38]
D
Senior.
- [76:39]
A
I'm just here to talk about.
- [76:41]
G
Oh, this is the Williams pit crew. Retro pit crew. That's very nice shirt.
- [76:46]
A
I love it, I love it.
- [76:48]
B
That goes well.
- [76:49]
A
Thank you for taking the time.
- [76:49]
B
You might have to do a puma collab.
- [76:52]
A
Give us a.
- [76:53]
G
Still waiting for my tvpn.
- [76:55]
A
We'll send it to you. We'll send it to you.
- [76:56]
B
Aren't we all? Everyone's waiting except for me. John this morning. John this morning was like. Yeah, it's really cool how everybody, you know, every Tuesday you wear a new one of one. But we're in the sampling process, so don't worry. We got a bunch of stuff we.
- [77:12]
A
Will be mass producing.
- [77:13]
B
Let's get. I want. We've been talking about Ferrari, but I wanted your take on the new Jony. I've car the loose. I hadn't actually seen that video yet. The Luche Luce.
- [77:22]
G
It's Lucy John Luce. Light means light in Italian.
- [77:28]
B
Yeah.
- [77:28]
A
Break it down. What was your reaction? Do you like it? Is it too iPad like. Does it look like a PS2 peripheral to you? What do you think?
- [77:35]
G
I think I'm with Jordy in this one where I'm like, I'm kind of torn. Like I want to like it for what it is and I think it looks cool. It looks great. But is it Ferrari? I don't know.
- [77:49]
A
But is electric Ferrari? You know they're doing a different drivetrain.
- [77:52]
G
Well, that's a whole other. That's a whole other issue.
- [77:55]
A
Why not just go full send and change everything?
- [77:57]
B
So funny. Cause you know American consumers have broadly rejected EVs even though there are some, some that sell well. But every American manufacturer like Ferrari is so late to the game. Every American manufacturer has already taken like a multi tens of billions of dollars worth of write downs already. So they're coming in. So I'm expecting the car to be cool. I'm expecting it to sell well in la, which naturally means it will sell terribly in the rest of the country. Everywhere else expecting it to be Ferrari's just like known watch F1 right like and, and decide. Do you want to daily a Ferrari? I've tried doing that. It's not good, I expect but. But the, the price point's interesting. The Johnny thing I'm expecting.
- [78:44]
A
Do we know the price point yet?
- [78:46]
B
No, I just, I think you can assume like it's not going to price like the purosangue up in the half a million dollar range because you're getting a naturally aspirated V12 and this is like not even.
- [78:56]
A
Here's what they got to do. They're changing the drivetrain, they're changing the UI and all the interior. They got to change the exterior. It's got to look like a cybertruck and it's got to be orange. They say we're burning the ships. No Ferrari design cues whatsoever. Just complete blank slate. You already frustrated a lot of people. Why not just frustrate 100% of the audience have you.
- [79:18]
B
Do you know when they're gonna come out with the actual like what the car actually looks like? Because the render that's been getting shared around is not released by any.
- [79:27]
G
I did not see the date on anything. The render looks.
- [79:34]
B
Doesn't look impressive. So I really hope that's not what it's going to look like. Yeah, nascar. NASCAR broke. What is it? A Guinness World record for loudest billboard. What's going On.
- [79:46]
G
I guess that's a. I guess the thing. Yeah.
- [79:48]
B
They're going alpha. You got to be making up records that only you can achieve.
- [79:54]
G
Correct.
- [79:55]
C
Yeah.
- [79:55]
G
They have got a billboard out in Times Square, which. It feels like there's so much motorsport stuff happening in Times Square. We had the Cadillac F1 reveal. Aston Martin took out some billboards out there. I said some billboards. They had a whole bunch of Times Square queued up with their reveal. Their launch was happening. And then NASCAR did this. But I thought was really impressive was the ad they put out. Did you guys see the ad they put out?
- [80:20]
B
Yeah. The guy in the red truck. The guy in the red truck.
- [80:23]
G
Clint Eastwood's kid. It's Scott Eastwood. Yeah. So really impressive. So a lot of. They had a moment at kind of a Bud Light moment, too, right. They kind of switched up, started alienating their typical base.
- [80:38]
B
Wait, so they switched up on their day ones.
- [80:43]
A
They did switch.
- [80:44]
D
They were.
- [80:45]
A
They were accused of switching up on the new day ones, but this is a return.
- [80:48]
B
Let's play the campaign. I just. I just dropped it for the team. We can. We can watch it.
- [80:52]
A
We can watch it together.
- [80:53]
B
Little watch party.
- [80:54]
A
Little watch party. I love it.
- [80:56]
G
It's pretty fantastic. If you're.
- [80:58]
E
Yeah.
- [80:58]
G
If you're into America.
- [81:00]
A
Okay, one second.
- [81:02]
H
So we can be loud.
- [81:03]
A
Here we go. So we can be free. We don't come from royalty. We come from bootleggers and barn builders.
- [81:10]
B
Shots fired.
- [81:17]
A
We're about grit fights for inches and contact accounts.
- [81:23]
C
A boat, a fairy, you know?
- [81:26]
B
Wait, is Clint Eastwood's son. Is he an actor or.
- [81:31]
A
A very famous actor?
- [81:32]
B
Okay.
- [81:32]
G
Yeah, yeah, yeah, yeah.
- [81:34]
B
There's also. I didn't know if he was a NASCAR driver.
- [81:38]
A
No, no, no.
- [81:39]
G
There's a YouTuber, Cletus. I believe he's in it too, which a lot of people spotted.
- [81:44]
A
This is great driving. Wow. The sense speed here is amazing.
- [81:50]
G
This is like Free Bird kicks in.
- [81:52]
A
Yeah. This is a level above even, like, watching a movie. A Michael Bay movie or something. True, like, true, like, brand collab here. This is a NASCAR ad, but it feels like this is an ad for seven other things.
- [82:09]
E
Oh.
- [82:10]
A
I mean, it's.
- [82:11]
G
It's motorsport. You should have a bunch of ads.
- [82:13]
A
You should have a bunch of logos. Yeah. Stack them up. Stack them up.
- [82:15]
G
Stack them.
- [82:17]
B
Ben Sand.
- [82:18]
A
This is good editing. This editing feels like a vibrio. Like, it's very, like. Yeah, it's really, like, the cuts are so fast.
- [82:24]
G
It's like somebody said, give us the most America feeling trailer you can possibly.
- [82:30]
A
Think of that's super cool.
- [82:33]
B
Ben sand in the YouTube chat, so he's commenting on Apple. He says car takes the awkwardness of the Apple watch and scales it up to a car.
- [82:43]
G
Whoever said that is accurate.
- [82:46]
B
That's exactly kind of. Anyway, so, so NASCAR switched up on their day one. They're like, we're done, we're back.
- [82:52]
A
But they're back. They're said we're back.
- [82:54]
B
We never forgot the day they take some shots at.
- [82:59]
G
Shot at F1.
- [83:00]
D
Right?
- [83:00]
A
The royalty thing, right?
- [83:02]
H
Yeah.
- [83:02]
G
Oh yeah. We're not here for royalty. We're, you know, we're, we're founded by bootleggers and barn builders and so that's kind of, that's what sets the whole.
- [83:08]
B
How many, how many nascar, what percentage of NASCAR drivers do you think are. If they're taking shots at the European royalty? F1 pipeline. Are. Is NASCAR a motorsport where you can be truly self made, actually just work your way up or is it just like, like Americans version of royalty? Like your father had an oil and gas company and so you're a NASCAR driver kind of thing.
- [83:33]
G
I mean somebody put up this, this graphic and it was like, here's all the top players in, you know, nascar. Bill, France, Michael Jordan, Roger Penske. And it's like they're all billionaires.
- [83:44]
A
Yeah.
- [83:45]
G
I mean listen, it's. Everyone's got their version of royalty, but I think it is a little bit easier to come up in a. Somewhat of a nascar. Maybe not at the cup level, but even like the Xfinity series, there's the ARCA series, which is kind of like their third division. You can come up in those pretty well. The bottom line on motorsport is you still need money to race in it. You need significantly less. I don't have the exact figures, but you need significantly less to go through the NASCAR feeder or NASCAR ladder than you do F1, F1 formula racing. It's insane. It's like the numbers are mind boggling. I had someone on the podcast recently who was telling us like you need $400,000 a year just to even be in the Formula Series or In the Formula 2, I think it is.
- [84:29]
F
And then.
- [84:30]
G
Or Formula 3, Formula 2, you already need like almost a million per year. So if you're not getting out of that soon enough and getting into like a paid F1C.
- [84:38]
A
Yeah.
- [84:39]
G
You're like, how, how long can you sustain that without being loaded?
- [84:43]
B
I think, I think Lando people were running the numbers. Like Lando's dad spent like 40 million or getting him to the point where it was like, like, yeah, we talked.
- [84:51]
A
To some, like, IndyCar guys who. Where it's basically like they had a family friend who ran an investment company or a law firm and they put up like 20k a year and they're like, just put our logo all over it. We'll go and like take clients to the local race. And it's like not a huge investment for some company that's doing well. And they see it to support like a local hometown hero. And so they can actually get racing and then move up.
- [85:16]
B
What are you, like, NASCAR is doing this in response. They want to. Is this. They're threatened by F1 and the popularity. F1 has three races in the US now. Do they feel like, hey, there's a number of people that are going to be just saying, well, I'll just go to F1. It's got the glitz and the glamour and maybe they're worried about people not kind of entering the NASCAR world. Or is this just, hey, we should do a new campaign.
- [85:42]
G
So nascar, they, they got a new agency or late last year creative agency and I believe it's 72 and Sony, but don't quote me on that. And they wanted to just attack this whole thing. Right? You've got F1 growing IndyCar, the massive deal with Fox. Fox took an investment stake in IndyCar and all the broadcast rights. So there's a massive thing going on there. IMSA Sports car racing, their YouTube channel is about to surpass NASCAR in terms of growth and they're. They're growing tremendously in the charts.
- [86:17]
B
I couldn't. Yeah, I couldn't believe that stat. I was like, the only way this makes sense is, is if NASCAR has just not been paying attention to social media or something. IMS obviously has like a massive international audience who nascar, you know, very big. But. And yeah, even, even as like, somewhat still, I consider myself a casual viewer of all these things. But like, IMSA is a lot more exciting to me. You have the battles. You're not just around an oval, right? It's very class racing. Yeah.
- [86:51]
G
Yeah. They also, they made. So what IMSA did really well was they worked out a deal with NBC to allow international feed to be completely free on YouTube. So internationally you can watch. If you're outside the US you can watch it from flag to flag for free on YouTube.
- [87:08]
A
Very cool.
- [87:10]
G
You know, is that something others are doing now? I think NASCAR is tripling down on where America first. We're going to go all in on America. We saw they've got the. Anduril race coming up in San Diego. Andrew is sponsoring car. Like there's a lot of that come back to, hey, we are an America first series. We're going to go all in on America first. So they're going to double, double, triple, quadruple down on what works for them. Other series are, have to do the same thing. And I think that's what they're seeing more than anything is, you know, F1 is doing what they're doing. IndyCar is doing what they're doing. IMSA, which is owned by NASCAR is doing what they're doing. Like we have to go back and find an identity. We can't just try to be all things to all people. It's just not, it's just not going to work. It's not that kind of racing. And there's, there's so many other flavors of racing now that are available to everybody that are so attainable to watch. It's like nascar. You need to carve out something. And that's what I think is happening. What is actually happening.
- [88:04]
A
Yeah.
- [88:05]
B
Switching gears. Aston had their event yesterday. I was excited to see COGNITION working with Aston. They got all their enterprise clients. Got to get them, got to get them on the paddock public, of course, sticking with it with Aston for the, for, for the season as well. What's going on with Cadillac? How, how, how, like, how would you, how would you rate their, their whole launch, their entire strategy? Running a Super bowl ad for a new Formula one team. Very bold. Was that to get, was that a, to acquire?
- [88:38]
G
I'll say. Kind of a. I've got a double take, first of all, to go back to Aston. Eight sleep. Did you guys see the eight sleep announcement?
- [88:44]
B
Whoa.
- [88:45]
G
Also.
- [88:45]
A
That's right.
- [88:46]
G
So that's a big one because not only are they a partner, they are a partner with Aston. Aston invested in eight Sleep. So it's a little bit of a two way situation here. So that's a, that was big news today for Cadillac.
- [89:00]
F
Yeah.
- [89:01]
B
Lawrence Stroll is an investor. So he's like down to do some equity deals and deals. Yeah. Because he's like, I got the cash.
- [89:08]
G
Yeah, that's a thing. That was a thing. As for Cadillac, they were attempting to reach a new audience that they don't have. Right. The U.S. audience. They don't have anybody yet. And I think the super bowl ad was aimed at doing that. I don't know the ins and outs of what they were trying to accomplish because it was, it felt like a very fast spot. And you guys were at the stadium So I don't know if you saw it, but it was. It showed up and it felt like it was over really quickly. The longer full spot, the one minute that I.
- [89:36]
B
That you. Oh. So we watched the one minute.
- [89:38]
A
The one minute on the stream the next day.
- [89:40]
G
Correct. But during the moment, I had a lot of people text me and say, hey, what was that Cadillac thing? Because they were pulled in by the JFK speech, which I thought was brilliant. And the moonshot, the whole. That was great. But I think if you're watching the game, you don't know it's coming, which a lot of people don't. They had no idea what was going on. A lot of people that did not know.
- [90:00]
D
I was like.
- [90:01]
G
The people I was watching it with, I was like, hey, check that out. And they were like, what happened? I said, oh, well, they're an f. Their new F1 team. And they were like, oh, that's what that was. So a lot of people had no idea. So I'm curious to see if it worked. They had the Times Square activation, which I thought was the better move in terms of actually getting people, like, interested, because you had this box sitting there thawing out in Times Square for a couple days. So people had to figure out, inquire what is going on.
- [90:25]
B
It was frozen.
- [90:27]
G
I think that was the idea. Looked like it looked like it was frozen, then it was thawing at that last minute. So I like what they're doing. They ended up with not a lot of sponsors on the car. They used a lot of TWG's assets, so TWG AI is like their big primary partner, but TWG owns the team, so.
- [90:47]
B
I didn't know that.
- [90:48]
A
Yeah, I was just expecting for Cadillac to partner with like an Exxon or a Chevron or some. You know, you have your Ramco out there and there's just pockets. A lot of the big tech, we.
- [90:59]
B
Love big oil, but we also like asset management. Twg.
- [91:03]
A
Yeah, there's a lot.
- [91:04]
B
What percentage. Do you have any idea what percentage. Did Cadillac retain significant ownership in the team or does TWG effectively own the entire thing?
- [91:13]
G
It's TWG Motorsports that runs the whole thing. So they're basically operating a factory car or GM under the Cadillac badge with a Ferrari engine, if that makes any sense to anybody watching.
- [91:25]
A
I Love it. That's F1. Get ready to study.
- [91:27]
E
Hit the button.
- [91:28]
G
And that's also probably why they're not. They don't have an oil partner yet because they're using Ferrari, so they have to use Shell.
- [91:35]
A
I'm guessing sure, sure. Yeah, yeah, that's tricky. You did get fact checked on the 72 and sunny thing. You were right.
- [91:43]
C
Okay, good.
- [91:43]
A
You were right. Good job. I want to get the Rolex 24 update. How was it? You were there. Give us your review, dude.
- [91:52]
G
I mean, the cars are incred. Like, that's, to me what cars should sound like. The Valkyrie was there, the naturally aspirated V12. And in IMSA there is no, they don't muffle the engines, which they do. They have to in WEC in the World Endurance Championship. So it is full bore. Like during the night. You hear that thing around the track.
- [92:12]
E
Wow.
- [92:13]
B
I got to sit in the passenger seat of our friend's Valkyrie and every single corner was, oh, I'm gonna die.
- [92:20]
C
I'm going into the wall.
- [92:21]
B
Oh, okay, we made it around. Next corner. Oh, I'm gonna die. Oh, we made it around somehow coming around. Oh, we're gonna die.
- [92:28]
G
The access people have though, at IMSA is really, really crazy. I mean, there's fans of any, like with any ticket can walk through the garages and there's like a whole pit walk. And so people that just think of F1 as the only thing out there, like, have no idea. There's well priced series to get you into, you know, into motorsports, but there's nothing like Daytona. There's nothing like an endurance race. I had never been to the 24 hours of Daytona. That was my first time there. Just such a cool event. Whoa. Such a cool event. I mean, people are up the whole time. There's festivities going on. Walking through, like where all the RVs are. I mean, people are absolute party. It's, it's a good time. So if you ever want to go.
- [93:08]
A
For a good time, Daytona's a great spot. What was your experience like? Were you up for 12 of the hours, 18 of the hours? Are you sleep deprived or is it more like I'm going to the day and then I'll sleep normally and then I'll come back for the day section?
- [93:22]
B
Yeah. Do you really need to catch the fog? This straight fog?
- [93:26]
G
No, fortunately I didn't have. We didn't have anything to do during that. Like, we weren't tied to anything. We had gone up to like the spotter stand and the, the starter stand. We had done all the things. We were hanging out with the president of imsa. We were in the suite, like, so we, they were taking us around. But then around 11, around midnight, it was like, all right, things are dying out. The fog was coming down. So we actually Went back and came back at about 8 o' clock in the morning. So there was like an eight hour period. So what, 16 hours I was up for the actual race.
- [93:55]
A
Not too bad.
- [93:56]
B
What kind of stories, narratives are you tracking ahead of the Formula one season? I know there's been some drama with kind of some of the advancements Mercedes made and other teams pushing back. Can you share more on that front?
- [94:10]
G
I'm tracking to see if anything pans out with the Mercedes situation. There was this rumor that I don't believe is going to happen, but a rumor that the Mercedes cars may not start in Australia, which is not going to happen. It was just interesting if that was being floated around. And I know Red Bull was trying to garner support. And then Dan Towers today, the CEO of the Cadillac team, he actually said, yeah, we're all competitors, we're banding up against Mercedes because they're competition. So obviously if you take out the Mercedes engines, which to me tells me they are just very worried about that engine, it must be that good. They're pushing the FAA to change how they're measuring compression ratio, which is like, okay, you know, they're really trying to nerf this thing and it's either an absolute rocket or things going to blow up. Like there's no, there's no in between to me with the Mercedes at this point. But you know, half the grid runs in Mercedes. The Mercedes team runs it, McLaren runs it, Williams runs it, it Alpine runs it. So like you've got, you, you, you've got a lot of cars are gonna have a rocket ship in it. Yeah, of course, if you're Ferrari and you're Red Bull and, and anybody else, Honda, you're gonna be nervous. I'm also curious to see how this Adrian Newey Aston Martin ends up with the Honda power unit like it's a match made in heaven. Honda, Newey, you've got Alonzo who's wanting to drive there a lot, so you know that he's going to put in a good drive. That car is halfway decent, I think. I think that car is the one to watch out for. The Aston. I'm really excited to see the Aston.
- [95:44]
A
That's very cool.
- [95:45]
B
Do you think Lewis Hamilton is locked in during the off season? We saw him at the Super Bowl.
- [95:51]
G
Yeah. Locked into Kim K while he's keeping up with the Kardashians now.
- [95:58]
A
Yeah. Oh yeah. Do you blame him though?
- [96:01]
D
Do you blame him?
- [96:01]
A
No, he's having fun. He's living his best life. Dude, you're 40 something years old. You're loaded.
- [96:05]
E
Like, hey.
- [96:06]
A
I mean, he's already been on reality TV with Drive to Survive. What's. What's one more show?
- [96:09]
B
Yeah, we're both reality TV stars, essentially.
- [96:12]
A
Essentially. Probably more people know him from Drive to survive than actual F1.
- [96:16]
G
I don't blame him. And if that car is a dog, I could see him checking out sooner rather than later.
- [96:21]
A
Oh, no. I mean, I'll just be real with you. Well, we appreciate it.
- [96:26]
B
Maybe the conspiracy is. Is, like, F1 is actually doing an, you know, some type of influencer deal with the Kardashians.
- [96:32]
G
A Taylor Swift.
- [96:33]
B
It's kind of an arranged marriage. Like, they saw the success of the Travis Kelce Taylor Swift thing. They're like, we need a. We need. We need our own T. Swift.
- [96:42]
G
Would it shock you? Like, would that actually shock you? If that was the case, that'd be great.
- [96:47]
A
Well, thank you so much for coming on the show.
- [96:49]
G
Thanks for having me.
- [96:49]
A
Always good to catch up.
- [96:50]
B
You get the update, we'll have you.
- [96:51]
A
Talk to you soon.
- [96:53]
G
Thanks.
- [96:53]
A
Have a good one.
- [96:53]
F
Cheers.
- [96:54]
A
Let me tell you about console. Console builds AI agents that automate 70% of it. HR and finance support, giving employees instant resolution for access requests and password resets. And without further ado, we have Ethan Thornton from Mock Industries. Long overdue. Welcome to the show. Good for having you. Grab a seat there. Good to see you. Good to see you. First time in the show. Long overdue. Please introduce yourself. Introduce the company.
- [97:18]
C
Awesome. Yeah, I'm Ethan Thornton. Start Mach Industries. Happy to tell. Background on the company?
- [97:22]
A
Yeah, please. I mean, we met, what, two years ago or something? And you were maybe just starting the company then? Huge progress, but. Yeah, give us the background.
- [97:29]
C
Yeah, for sure. So I actually started the company in high school. I ran, like, a woodworking, metal working company in high school. Was pretty obsessed with this turnover we're seeing towards unmanned systems and the importance that'll have on the world over the next few decades. Went to mit. Initially thought this would take a lot longer to play out than it would, so I went to mit. But around that time, war in Ukraine starts. It becomes clear that this transition is happening very, very quickly. Drop out, start mock, I guess, two and a half, three years ago now.
- [97:59]
A
Where were you studying at mit?
- [98:00]
C
Aerospace engineering. I was there. I was playing football there. I dropped out during football preseason. That's crazy. So I can't say that I was there very long, but I think the mission of making sure the west wins on systems is just so urgent.
- [98:16]
A
Was the Thiel Fellowship part of the decision to leave or had you already left?
- [98:20]
C
I'd already left.
- [98:21]
A
Okay.
- [98:21]
C
Yeah. So that was the semester after I left.
- [98:23]
A
What was the answer to your question? The main what's your contrarian take? What's something you believe that very few people agree with you on? That's the classic teal fellow question.
- [98:33]
C
It's a great question. Oh, yeah. I don't remember what I answered.
- [98:36]
A
Wow.
- [98:38]
C
I can say the thing, the thing I was betting my life on at that point. And if I had to guess what my answer was, I think it was the importance of drones.
- [98:44]
E
Yeah.
- [98:45]
C
Like, I singularly think that the US Is not going to be able to out manufacture. Out manufacture China unmanned systems and that the way to win is through asymmetry.
- [98:53]
E
Yeah.
- [98:54]
C
And at the time, that was obviously a contrarian take less. So now the world has started to move in that direction, but I still think very few people.
- [99:01]
B
Yeah, that sort of predated. And Americans have now seen how many different Chinese drone shows in the sky where they're like, look at the pretty lights and the colors. And then some people are like, whoa, that's.
- [99:13]
A
Imagine that coming at you.
- [99:14]
B
Scary.
- [99:15]
A
Talk to me about asymmetry. That sounds like not just going drone for drone. That seems like different capability. Unpack asymmetry. Why is that important?
- [99:23]
C
Yeah, it's a great question. I'd say that was probably the big differentiator in the way we thought about the space. If the US Is manufacturing a quadcopter and China's manufacturing the same quadcopter, if we're making a cruise missile and they're making the same cruise missile, they will out manufacture us. Yeah, right. And so the optimization becomes instead, how do you take this future style of war fighting and pull it left as far as possible? And we talk a lot about basically creating an offset to China's dominance in manufacturing, which doesn't mean we don't focus on manufacturing. Like, first and foremost, we are a manufacturing company. But that's not what it's going to take to win. What America has to do very, very well is actually rely on unmanned systems to win, which, like you mentioned, America's actually been relatively slow to adopt unmanned systems. A lot of the work we're doing is pushing to change that as much as possible and getting the institution to think about unmanned systems not as something that's scary, not as something that's looking to disrupt the way wars are currently fought, but instead is basically our biggest advantage if we look to maintain.
- [100:22]
A
What's the history of these asymmetrical Offsets. I'm trying to think of like the classic example, like can one F35 take out five MIGs? And so you don't need to manufacture as many because you have a more advanced plane. So you throw 50 planes at me. If I have even 10 of my better planes, I'm good.
- [100:41]
B
A nuke. It's like, I don't care if you have a 10,000 bombs. I have one that's a lot bigger.
- [100:46]
C
Yeah, that's a great point. I mean a lot of the things that become the way wars are fought start as asymmetric.
- [100:51]
A
Sure.
- [100:51]
C
I mean you go as far back as like the American Revolution.
- [100:54]
A
Yeah.
- [100:54]
C
Right. You've got.
- [100:55]
B
Yeah. Something's not going to remain asymmetric forever.
- [100:57]
E
Yeah.
- [100:58]
C
But over the next decade, two decades, pushing on this new style of war fighting as much as possible to achieve that asymmetry, which is something historically America's done very well again all the way back to the American Revolution, adopting tactics to counter a force that at the time was obviously superior.
- [101:16]
A
So get me up to speed on how you're thinking about the current drone landscape. Even putting aside the asymmetrical thing. I mean, I've heard like you just buy a DJI drone, you fly to Ukraine and you put a grenade on it and you fly it into somebody. There's these new drones that have the fiber optic wires so you know, you don't. No electrical interference. You don't need a signal, they can't jam it. There's a whole bunch of different things. There's the ship of Heeds and like all these different tail sitters. There's 25 different types of drones. What's actually going on, what's actually making a difference and then what are you interested in?
- [101:48]
C
Absolutely. So yeah, it's obviously a super wide space where we focus most is on the pacing threat, which we see is China and basically fighting a war in. And generally speaking, if you can do something in Indo Pacom, you can do it well in Ukraine.
- [102:02]
A
Okay.
- [102:02]
C
Is the way I like to think about it. We don't play in the group one, group two space. So the quads and similar smaller drones describe group one. And then yeah, there's. The formal definitions are pretty murky. Like I think technically vipers are group five based on speed, group three based on weight. It. It's basically, it's an old like FAA style of assessing how much damage something does if it falls out of the sky.
- [102:22]
A
Okay.
- [102:22]
C
But generally thinking you can speak. Speak about a group one is like quadcopter. All the way up to a group 5 being 30 foot long, kind of fighter jet.
- [102:29]
B
Yeah.
- [102:30]
C
For us, where we play, the Predator.
- [102:32]
A
Drone would be exact 5. That's the biggest we have.
- [102:35]
C
Spot on.
- [102:35]
A
But it's like human, manned, in Las Vegas. Remote, remotely or something.
- [102:38]
B
Yeah.
- [102:39]
C
For landing and other things.
- [102:40]
A
Yeah.
- [102:41]
C
And so where we play is generally group three, Group four, space.
- [102:44]
A
Okay. So pretty big.
- [102:45]
C
Pretty big. Okay. And our primary focus is again on. On asymmetry as relates to Endopacom. So the pacing threat for America right now is China, specifically as relates to Taiwanese semiconductor access.
- [102:58]
E
Yeah.
- [102:58]
C
Right. A world where we lose access to advanced semiconductors because China takes Taiwan.
- [103:03]
A
Yep.
- [103:04]
C
Is pretty crippling for the West.
- [103:06]
A
Talk to me about the hypersonic missile gap. I had a friend who was very worried about that, saying that there's a lot of other things that are going well. I mean, we're advancing AI models, there's a lot of stuff that's happening on trade, but we're just not making hypersonic missiles. Is that something you've looked at or you have any sort of insight into the importance of.
- [103:25]
C
Yeah, I mean, we spent a lot of time thinking about it. Ultimately, we play in the subsonic regime.
- [103:31]
A
You focus on this.
- [103:32]
C
So that's where we focus. Castilian and a lot of the other folks are pushing hard on. On hypersonics. My personal belief, and this is again, sort of a contrarian take, I think future war fighting has to be so decentralized that most of the assets used to fight wars are actually not large enough to consider taking out with a hypersonic missile. So, like a big, big focus for our product line is having things that two operators can deploy. So you look at Viper, you look at Stratus, these are things you and I could actually put up in the field ourselves, such that by the time you launch it, there's actually nothing to shoot, shoot back against. I think that is very much the direction war fighting is heading. That's what we see in Ukraine.
- [104:08]
A
Less. Less exquisite systems, less capital assets like you sunk my battleship becomes less important because there aren't as many battleships on the.
- [104:16]
C
And so I think hypersonics are excellent at taking out existing large centralized assets.
- [104:24]
A
But as soon as both sides have them, there's just no more large assets on the battlefield.
- [104:28]
C
Exactly.
- [104:28]
A
Because everyone knows. Well, I'm not even going to try.
- [104:31]
C
And that's a contrarian take. And I'm not saying we're going to get there in five years. But as you. As you look as far into the future as you can, and a Lot of what we see in Ukraine right now is this giant push towards decentralization. How do you get everything off a Runway? How do you get everything off of centralized command and control infrastructure? How do you push to decentralization? Because the future force structure looks a lot more like a. It's kind of a buzzwordy term, but like almost like a kill web of hundreds of different systems each doing some element of sensing, communications and shooting, such that your force is kind of fighting from everywhere and nowhere.
- [105:05]
A
Yeah. What is your like P. Doom on Taiwan or timeline? I mean, there was that book 2035, I think that was sort of talking about that timeline. At the same time you have China's thinking in Hundred Year Plan, Xi Jinping. Think he's going to live to 150. Maybe he's not in any hurry. Last year was pretty quiet. I mean, it was a lot of trade negotiations, but we didn't see a blockade. We didn't see really many major military movements. And so from my perspective, it feels like maybe I just wishful thinking, but it feels like things are sort of business as usual over there.
- [105:38]
C
Yeah, it's a good question. Look, it's really hard to know. I mean, the CCP obviously outlined their plan for military readiness by 2027. And y' all can find public, public testament to Hegseth and others talking about sort of the state of our war games right now in that theater being quite dire. So look, I can't say when or, or if something happens, but we need to be prepared. We need to be prepared. I think we obviously started this year with a lot of Chinese aggression around Taiwan. And in January they ran a pretty big set of set of drills. And then. Yeah, look, I mean it's just, it's so catastrophic if Taiwan falls. Yeah. For the west, like what have you.
- [106:19]
B
Learned from history about Indo Pacific theater? It's been a while for the United States, but there's, you know, infinite amount of kind of content on what techniques worked, what are the unique challenges. It's obviously very different. And fighting over huge bodies of water and that kind of thing versus Ukraine.
- [106:41]
A
Yeah, there's a lot of predictions about like if they do try and cross the strait, they'll do it at certain months because the tide's low or the waves are not as choppy. What are you thinking about? History?
- [106:52]
C
I think it's super hard to extrapolate out the course of this conflict from history. Like we have not fought a war in the Pacific since it scales since the era of precision munitions. I Think certain things will continue to be true. Like it will overwhelmingly be a logistics battle.
- [107:08]
E
Yeah.
- [107:08]
C
And I think the, the biggest problem we face right now, speaking on hypersonics, is how do you get your ships close enough to actually get into the fight is the big problem right now. Like how do you, how do you secure Runway access? How do you get your ships close enough?
- [107:20]
A
Yeah.
- [107:21]
C
And so it becomes a massive logistics battle. And that's, that's why you'll see us focusing on these decentralized assets that are significant, significantly easier to get into theater, or that you can launch from far enough away to actually reach the fight. So I think it comes down to logistics. I think getting secure comms that far forward and then more importantly, getting proliferated ISR that far forward is going to be an incredibly difficult challenge. The US conducted an operation last year called Rough Rider in CENTCOM, and we lost something crazy like 30 MQs, like 30 Press and Reapers. And that was not against as nearly as sophisticated of an adversary and certainly not over that distance. And so I think one of the key gaps is how do you get enough sensors forward, how do you secure communications? I think rightfully so in many cases, the US pushes to have man in the loop for autonomous systems, but what that means, you have to have really secure comms in order to do that. And we're facing adversaries that may not look to, to do that themselves. And so that becomes a pretty strategic vulnerability. And then right now, I mean, you can count on any conflict being a conflict of numbers. And in war games, we run out of ammo in literally a couple days. Right. And so that's why you'll see across industry just this massive push to manufacture as many assets as possible, while also making sure that those assets are as effective, effective in asymmetric, because we're just not going to catch up. I mean, China makes a lot of claims. This claim is probably not totally accurate, but they have claims. They have factories making 1,000 cruise missiles a day. And you can go online and actually watch videos of these factories. Now, that might be 100 a day, that might be 50 a day. Regardless, you're talking about orders of magnitude more production than the US has right now, which serves as a wake up call. That's why I dropped out of mit. It's why I think a lot of us in this space are pushing us hard. And then a world where you lose access to advanced semiconductors is existential. I mean, our entire backbone as a country is built on this sector. As you look at Future of conflict or future of unmanned systems. The reason you build unmanned systems and on an F35 is advances in computation. And so if you find yourself in this arms race where the most important thing is unmanned systems primarily bottlenecked by intelligence, and you lose access to the semiconductors you need to power these things, that's pretty terrifying.
- [109:42]
B
Yes. Sorry to interrupt. Where are you guys partnering? Are there Primes that you're working with at all? Anything on the. Obviously there's battlefield systems that you need to integrate with. What are you doing? What are you manufacturing in house? Like, what is kind of the web of companies and groups that you're actually connected into?
- [110:02]
C
That's an awesome question. And before I start, like, I need to emphasize the importance of working well together as a group of companies in the space Primes, Neoprimes startups. Like, when you're facing this level of difficulty at a geopolitical level, you have to view it as a non zero sum game and you have to be willing to work. Yeah.
- [110:21]
B
Have you learned any stories from history on that front? Like, back, like, I imagine if you're actually fighting in a hot war, I imagine, imagine people, the whole industry and the whole country is banded together and saying like, we're not competing here, we're fighting for our values as a country and our way of life and all these things. So I imagine it very easily in a hot war clicks into that mode, but in sort of relative peace time or preparation, they're still like, oh, this Neoprime just launched this thing. They're trying to kill this other Neo Prime. And it's like, all right, we're kind of focused on, yes, fighting for market share is important, but at the same time the entire purpose of the defense industry is to defend the country of which we are all citizens of.
- [111:09]
C
Absolutely. Look, I mean, unfortunately in a modern day, I think a hot war would end relatively quickly. You're talking about a very decisive outcome. When you think about cyber effects and how quickly infrastructure in both countries would shut down. When you think about the ability to do long range precision fires, how quickly capital assets would be taken out.
- [111:27]
B
And so Ukraine is like not a good example because it's effectively turned into trench warfare. It's a battle for territory, whereas in a conflict with China it's more over a specific region being.
- [111:44]
C
Exactly. And the style of warfare that the Soviets wage for that the west wages and that China is looking to basically base their fighting style on the west on are quite different. Like they always have been. Like the, the, the Russian and Because that largely the Ukrainian way of war fighting is this sort of just mass effects war of attrition. What you see the US doing and what China specifically architected their force structure to, to also execute is these pulse strikes that are very, very, very quickly damaging. And so my, my fear is In World War II one we had years of ramp up where industry could start to rearm, lend lease. All these different things that got us into the fight before Pearl harbor started. Even after that, however, you still had years where GM and Ford could switch over to defense production and where you could get this sort of mass rallying of cultural effects towards fighting this war. Yeah, that is not happening today to the extent it should. And I think we have way too much confidence about this war, not just how happening in weeks, like very, very likely outcome is. You're not ready to fight a war and so you cede territory. Right. And so the way I see it, that effect you're describing has to start like today. We need to start acting like we're purely on the same team. And then for Mach's approach, specifically a few things we do. One, our approach is quite different to a lot of the other neoprimes. So you'll see a lot of folks starting with battlefield management layer and kind of working down which is a great way of doing things. You need to have like efficient orchestration.
- [113:12]
B
We're very, Everybody wants to be the platform.
- [113:15]
A
Yeah.
- [113:16]
C
Yes.
- [113:17]
B
Yeah. From a business, really business. If you're pitching investors, you don't want to say oh we're a point solution. We just do, you know, offer this. Even though that might be the best way to actually get in, get into the game and become a business.
- [113:30]
C
Yeah, and I'm happy to dig in there. I, I think the business tactics there are actually potentially more complex and I'd argue that point, but I actually don't think it's super important. I think the big thing is we need different people doing different approaches. The way I think about it, the defense industrial base has rotted out so bad. You think about the incentive structures for the last three decades. If you're Lockheed and I'm your supplier and you're on Cost plus, you're incentivized to have me charge you more for a component. And then if you're my tier two supplier, I'm incentivized to have you charge me more. And so for the last three decades, 10 levels down the stack across the industry, you've just seen it rot out. And so what that means is typically like tech that you'll get for like 50 bucks. In consumer electronics, you'll literally be charged tens of Thousands for like AirPods cost Apple like six to ten bucks to make, roughly if that's a defense product. If you're dealing with like three different radios, all these different Imus, you're literally talking tens of thousands, 20 grand.
- [114:28]
A
Something about like a, it was like a faucet or sink on a, on a battleship that cost like 200.
- [114:33]
C
It's crazy. It's crazy. And so, and you look at the incentives and it's very obvious how we got here. And so the work I'm looking to do as a company is I think that the rate limiting factor on how much you can produce and frankly where most of the money from the budget goes is into hardware. And the performance of that hardware is gated on the performance and cost of its subsystems. And so we're taking a very different approach of actually working, working bottom up in the stack. Most of our revenue, for the record, still comes from selling platforms, but we've taken a very deeply vertically integrated approach. And then one of the ways we look to partner is actually by selling those components to other companies and looking to be a good partner by basically establishing this industrial base and hopefully enabling people to sell products cheaper and more performant than they could otherwise. So that's sort of our approach. And then even within that, we try to be selective about the things we bite off, like consumer electronics and automotive still run pretty efficiently. And so if you can, if you can architect your designs to use hardware from those two industries as much as possible and to avoid hardware from the defense industry.
- [115:32]
A
COTS versus Gots. Right off the shelf.
- [115:36]
C
Exactly.
- [115:36]
A
Government off the shelf.
- [115:38]
C
But in any case, there, there needs, I mean this, this industrial base needs to be rebuilt. And that does start with your jet engines. That does start with your radar. That does start with, with your cameras.
- [115:48]
A
How are you thinking about moving quickly, solving problems in workplace safety? There was that incident that happened, that was reported and I'm just wondering about, like that trade off has got to be difficult when you have a bunch of people that want to work on a really important product. But these are big machines. There's risk factors. Like what does security and workplace safety look like?
- [116:11]
C
That's a great question. So I think there are misconceptions about that accident. I've talked a good bit publicly about it, but that was actually before we were mock. Oh, okay. So that was before we had any employees. Super, super early.
- [116:22]
A
Got it.
- [116:23]
C
And again, I've talked a good Bit publicly about that, I'd say today, I don't know, there's this move fast and break things actually doesn't work very well. Like you imagine testing a Viper. You're basically putting a Ferrari on like a slingshot and launching it into the air. You don't want to be doing that every day, like haphazard randomly. So early on, what we did, like literally when we raised our A was invest very deeply in citl. Invest very deeply in hitl. Invest very, very deeply in.
- [116:49]
B
What are those phrases mean?
- [116:51]
C
Like hardware in the loop testing.
- [116:53]
A
Okay.
- [116:53]
C
A simulation environment.
- [116:54]
A
Sure, sure, sure.
- [116:55]
C
How do you go and run thousands of cases of what a vehicle will look like in flight and then actually run that on representative hardware and then run that on the vehicle and then build into a test campaign. And we have five products now and the first flight of all five of those reached wings level, steady fight flight on the first try. And so I think there's this misconception that the way you move fast, just.
- [117:16]
B
Get a test range and just start putting slapping stuff together, which is not.
- [117:21]
C
It's actually not the way it works. And I think one of the reasons we've actually been quite successful at developing these things so insanely quickly, I mean, I just, I kind of soft released a product that we went from nothing to flying in 71 days on a pretty large aircraft. And the way you do that is by building excellent, excellent test infrastructure, excellent engineering process.
- [117:38]
B
How do you, how do you actually build the simulations? Is it. Are you using. Can you use like Microsoft flight simulator to create like a physics engine?
- [117:49]
C
That's a good question.
- [117:50]
B
Or are you building everything from the ground up?
- [117:52]
A
Unreal.
- [117:53]
C
Yeah, we actually do use unreal a little bit on computer vision. So for GPS denied navigation, you're using your cameras to navigate. You obviously need to be able to spoof some of that imagery. There are a bunch of different approaches. So we have an arrow tool we built in house to basically run across hundreds of different aerodynamic designs and select your plan form as you design out your outer mold line. Different tool chain basically allows you to do RF simulation. A lot of the stuff is industry standard. For the record, I'm not saying we, we invented much of this stuff. I do think we're pretty good at it. But RF simulation to understand antenna patterns, to understand all that different stuff. We actually have four different radars in design right now as a company, so we have a really good RF team. You work from there into basically your six degree of freedom physics simulator. We found an open source. It's called JSP sim. If anyone wants to go and use it that we forked a couple years back and have been doing a lot of work to basically make more robust. That's really cool. Like you can actually simulate like specific actuaries, actuators braking. You can simulate wind gusts across like thousands of cases. And then from there you then plug that into your avionics and actually spoof your avionics to think they're flying. And so we make our own avionics and you obviously can't run hundreds of thousands of cases like the JSP SIM will be running on basically a cloud instance so that you can crank out a ton of compute and then you confirm that your actual avionics hardware is performing the way it should.
- [119:17]
A
Very cool.
- [119:20]
B
What advice would you give to the younger version of yourself that's dropping out of MIT and going to attract hundreds of millions of dollars of capital?
- [119:29]
C
It's a good question. I think the importance of people like all you have at the end of the day is your team. And like as an individual the amount of work you can get done is tiny compared to what can happen if you get a really, really good group of earnest mission aligned people together to go work incredibly hard.
- [119:48]
B
And did you learn that the hard way by hiring somebody that was maybe like leading expert for a specific technology but weren't perfectly mission aligned or came from kind of an old way of doing things? And then when the going gets tough on kind of an individual product level or something like that and it starts to unwind.
- [120:10]
C
I wouldn't say we necessarily learned it the hard way. I just think it's very spoken about and I don't know, I'd assume that saying that was more buzzwordy.
- [120:21]
B
Yeah, yeah, yeah.
- [120:22]
C
But I actually like, I really, I don't think we know.
- [120:25]
B
But that's a classic across all startups. I don't even have context. I'm just saying all startups will hire somebody who like is the expert in one specific thing and then you put them into a new context and it just doesn't work. I've done it before. I think every founder has.
- [120:41]
C
I actually don't. I don't think we've necessarily done that. I think I actually was so afraid of that I must spun the other way. And we had like too many really, really intelligent, really young, hungry people. They're still at the company and they're like some of the best people we have. But I actually think I was almost too slow to bring that on. I don't know if that was good or bad. But I was pretty terrified because it's because all the horror stories surrounding stuff like that of doing that too early. Yeah.
- [121:07]
B
Yeah. That's interesting.
- [121:08]
A
Well, it's good to hear the team.
- [121:11]
B
What is winning look like for Mach this year? What's the focus? How do you end this year? You got 11 months left. What is coming out of this year? What's going to allow you to take one or two days off around Christmas? Feel good about it.
- [121:27]
C
Look, it's proving effect on the battlefield and getting into manufacturing. Manufacturing at scale. I think we've done a great job as a company winning contracts and bringing products into a state that we can demonstrate them to customers and that we can make tens or hundreds of a thing. But the really, really hard work starts the day you try to build 100,000 of something, the day you actually have something go downrange. And so for us it's basically taking these designs that are in a good spot, taking the team that's in a really good spot, scaling that team up a ton of this year to actually enter rate manufacturing and then taking our conviction around the impact our products will have on the battlefield and actually going and proving it for the, for the warfighter.
- [122:07]
A
That's awesome. Well, thank you so much for everything that you do. Thank you for coming on the show.
- [122:10]
G
Of course.
- [122:11]
A
Ethan from Mock Industries, let me tell you about Gusto. The unified platform built for payroll benefits and hr. Built to evolve with modern small and medium sized businesses.
- [122:22]
B
Go check it out like ours.
- [122:23]
A
And we have the CEO of crypto.com, the CEO of AI.com. i'm going to tell you about Gemini 3 Pro, Google's most intelligent model yet. State of the art reasoning. Next level of vibe coding and deep multimodal understanding. And we are going to bring in Chris from crypto.com. he's in the Restream waiting room. And now he's in the TPP and Ultradome. Chris, good to meet you.
- [122:44]
B
What's happening?
- [122:45]
E
Nice to meet you guys. How are you? Thanks for having me.
- [122:47]
A
I love the background. The logo's looking great.
- [122:50]
B
Is that real or is that AI?
- [122:52]
E
It's totally made up.
- [122:56]
B
Well, I was like it feels, feels pretty quick to have the actual design manufacturing.
- [123:01]
A
It takes time. Well, take us through the thesis for AI.com.
- [123:04]
B
Yeah. Wait, yeah. Before we get into the super bowl let's maybe rewind to maybe probably a year ago. You see a domain on the market. I think they had been trying to sell it for a while I imagine. And you Came in as a buyer, but walk us through that whole journey.
- [123:23]
E
Yeah, I bought another domain and the agent who was brokering this told me about AI.com being in a process of being sold, if you will. So I immediately recognized the importance of it and just jumped on it, got on the phone the same day, got the deal done, we shook hands. There were some ups and downs for the. Through the, through the process, but we managed to get this done.
- [123:51]
B
You've had some good success buying iconic domains. What did you pay for crypto.com? have you ever disclosed that?
- [124:01]
E
I don't think we ever did, but we paid $12 million. I would argue that that was a more difficult decision, if you will. We were a small company back then. $12 million was about a third of our capital and it was bang in the middle of the 2018 bear market. So people were discussing whether crypto is going to survive or not.
- [124:27]
B
Yeah, the person selling it to you was like, probably like this guy is idiot. Of course, of course you ended up, ended up looking on the Staples side.
- [124:36]
A
I drive by it all the time.
- [124:38]
B
Okay, so, yeah, you see this domain is on the market. Do you have any idea what you wanted to do with it at the time of acquisition? Or did you just think that, hey, this AI thing is probably pretty important. Maybe I should own AI.com?
- [124:52]
E
We were building products ever since ChatGPT launched and playing with consumer facing side, but also internal tools. So constant experimentation. And the vision from day one was we want to build a consumer product. We believe that you have 4 billion people having personal assistants that should play the role of kind of a chief of staff for your entire life.
- [125:24]
A
With.
- [125:24]
E
Great context, being proactive, getting things done for you rather than just chatting. So the vision didn't change from day one.
- [125:33]
B
And then, yeah, I guess fast forward. How did you, how did you process before we get into the kind of super bowl and that whole strategy, how did you, how did you process kind of the open Claw launch? It sounds like you guys are integrating the. Are you building those patterns? Yeah, at least some of those patterns. Are you kind of forking the project? Talk about that.
- [125:56]
E
So as we started building this product about mid-2025, it was never just, it just didn't click. It didn't have this. You couldn't pass the uncanny valley. And I think the pivotal moments where we started seeing this change is Opus 4.5 release. It started working much, much better. And we obviously saw cloudbot going live and adding some elements of their architecture to it. I think it gets it done in terms of how it feels as a product. You just need to solve a whole litany of issues to make it consumer friendly. Like how do you set it up without being technical? The security issues around your data, those are serious, serious issues when you want to bring something to the mass market. So I think we are combining everything that we've built over the last, say, eight months into something that we can roll out to the end users. And we are starting doing this tomorrow.
- [126:58]
A
Wow.
- [126:59]
B
Tomorrow. Okay. Before we get into the product and kind of more of the vision, let's fast forward again to the, to the super bowl specifically. How did that all come together? It felt like it was coming together quickly, but we know we ran a much, much smaller ad. We ran a regional ad. You do have to lock these things in ahead of time. But walk us through the process of kind of preparing and then experiencing the Super Bowl Sunday.
- [127:29]
E
So I bought the domain in April. The deal closed and we got the domain successfully. So I'm like, okay, we need to launch this and it deserves a global stage. And in May, we were one of the first companies to actually buy the spot.
- [127:46]
A
Oh, no way. Wow.
- [127:48]
E
At that time we had just the domain and idea what we want to do with it, but the product didn't exist. And you know, I, I know that we only have one shot to get this done correctly and I didn't want to release the product until I felt that it's there for the end user. You know, these things. You need to be able to develop an emotional connection with the product in order for this to be sticky and retentive. So I only made a decision that we actually going to pull the trigger on this a couple weeks ago. And that's why the ad felt like it was, you know, quickly put together. It was quickly put together.
- [128:37]
B
Wait, so you bought, so you bought the super bowl spot?
- [128:40]
A
You go back to crypto.com if you wanted to.
- [128:43]
B
Yeah. What was the idea like? Hey, if we don't run it for AI.com, we have the crypto.com ad ready. We'll just run that.
- [128:51]
E
We have the crypto business, we have a prediction markets business. There's always some level of optionality. Right. But this is the moment to run an AI ad, as you guys have seen, it is. And timing is really important in life. You know, skill, timing and luck, combination of these things.
- [129:11]
A
It's a good reference.
- [129:13]
B
Okay, so you put the ad together in effectively two weeks and then you run it. And what happens then? Because I think you got the Attention from buying the world's most expensive domain ever. Then you got the attention of like, hey, there's this new AI product I've never heard of with a crazy domain running a, a Super bowl ad. You should pay attention to it. And then you got a whole nother kind of amount of attention from people being like, wait, I just got an ad for AI.com and I landed on the website and it's not and the website's down. So what kind of happened? Did you. You spent the 70 million on the domain, the 8 million on the spot, and then you didn't have enough to host it or what happened? I'm assuming a lot of people got through, but certainly a lot of people got stuck as well.
- [130:01]
E
I think we are happy with the outcome.
- [130:03]
A
Okay.
- [130:04]
E
We had about 300,000 people signing up.
- [130:07]
A
Wow.
- [130:07]
B
Wow. Let's go a lot. Can we get the gong? Can we get the gong? 300,000 sign ups.
- [130:13]
A
There's been a lot of big numbers.
- [130:14]
B
That's a big number for one day. For one day. But on a more serious note, how did you, how do you even prepare for that amount of traffic? Like how do you, how do you. What was going on in the war room, guys?
- [130:33]
E
You know we're on a platform that is used to spikes, right? And we've got a great DevOps team and we've got all the stuff that you usually would expect, auto scaling and whatnot. So there were intermittent problems for some people, but largely it held up. So I think fundamentally it's the name and the fact that there is a certain element of curiosity there and we.
- [131:00]
A
Design it in a.
- [131:02]
E
It was a very simple call to action, go and sign up. So I think it worked. Yeah.
- [131:09]
A
Talk to me about consumer AI. ChatGPT has broken through Gemini and Google. They've been leveraging the Google platform and the network to onboard consumers. Nanobanana was a big moment. Sora and the Meta Vibes app sort of made a splash, but haven't been super sticky. But where do you see the gap in breaking through with consumers in a new way or just doing what consumers already expect, but better, cheaper, faster? Like where is the consumer AI opportunity now that we're three years into the Chetchy?
- [131:46]
E
I think fundamentally you're able to actually get stuff done right now. So that's a big differentiating factor for the user experience. And we don't really know where this experiment is going to take us given how the domain is resonating with people. We can introduce social network elements to it. I think the fact that every single person on earth is going to have an assistant of this sort can unlock new type of interactions and make our lives just better through serendipity advice, staying on top of things and being proactive, really understanding us. So I'm pretty excited about the wandering aspect of it. We try to keep an open mind and not really be set on one thing. We now have 300,000 people waiting for us to give them the product. We're going to very quickly iterate on it. I'm a huge believer in moving quickly and listening to actual customers and we will see where the journey takes us. I take a very long term view. What can we do with this in 10 years? I think it worked in the crypto space and the opportunity here, the size is much, much bigger.
- [133:04]
A
Yeah. So much of what happened in crypto was sort of permissionless, you know, bankless. This open source, these networks, anyone can set up a node. And part of this latest open claw cloud bot hype cycle is driven by the fact that you get a Mac Mini, it can talk to iMessage, it can talk to WhatsApp, it can talk to Telegram, it can go sort of wherever you go as a person. And that feels unique because maybe OpenAI can't go over to WhatsApp because Mark Zuckerberg doesn't want to let him. And so I'm wondering about how you're thinking about the trade off between certain things that are only possible with an open source AI system that is sort of acting as an imposter, as a human versus your company. If you want to integrate with WhatsApp, you might have to give Meta a call. So how do you think about delivering the vision of a truly universal AI agent that can do things with the realities of the business community?
- [134:07]
E
There are a lot of business and UX challenges here, so we'll have to resolve them one by one.
- [134:14]
A
Sure.
- [134:14]
E
And our view is we want to stand on the side of the consumer and help them make these technical choices, make sure that their data is safe, make sure that they can do what they want to do without putting themselves at risk and solving these issues with access to data, with user experience, it cannot feel like a chore today. You need to be really technical to get value out of it. So there's plenty of work and it's difficult and that's part of the opportunity.
- [134:47]
B
Yeah. One of the some unrequested feedback for me. I had kind of heard that AI.com was like potentially something like some type of leveraging some open claw technology and then I got hit with the Google login and I was like, I don't have time to read through kind of the full terms of service privacy policy and really understand. So I would love to see. I mean, maybe there's plans for it, but I'd love to. To see just like being able to create an account on the platform to play around with it. Just because I was looking at my Gmail, which my life is on my work email, which obviously has its own privacy concerns. All that stuff you said you're rolling out the product tomorrow. What's the first thing that you want people to do with it?
- [135:36]
E
I think this is the big part of the product, figuring out how do you onboard people to it and get them to do a couple of things so that they can see value very quickly and connect with it. I think today it's pretty hard to get the feeling for what it can do without really connecting your email and calendar. We will see. I feel that there's going to be a lot of experimentation there and we will look for user feedback and truth in data, in numbers of what really works and what doesn't. To a certain degree you need to gamify it until such point where users are deep enough that it actually gives them the feeling of like, wow, this is special, this is different. Yeah, yeah.
- [136:21]
A
That gamification is so important. Like you see the Studio Ghibli moment where you know the Latest images in ChatGPT launches and you don't even have to think, you just have something in your camera roll and you're going to type Studio Ghibli and you're going to get the value prop and then a couple months later you're still going to be going there for slide inspiration and stock photography and all the other things that you can do. But there's a killer app on day one that you come in and you. And you get joy out of.
- [136:46]
B
Did you ever talk to the Original owner of AI.com I heard he sat on it for 30 years. His initials, his first and last name. His first name starts with A, last name starts with I. So he had bought the domain.
- [136:57]
D
Wow.
- [136:58]
B
I'm shocked that he held onto it it for so long. You would think like IBM Watson in like 2010.
- [137:04]
A
Oh, totally.
- [137:05]
B
We'll give you a million.
- [137:06]
A
Yeah, he held on.
- [137:09]
E
Look, we spoke on the day when we closed the transaction because he had a, it was a little bit of a bidding war. He had a very serious bidder on the other side and it required connecting in order to get it done.
- [137:24]
A
That's good.
- [137:24]
B
Your deal.
- [137:25]
E
And by the way. And by the way, right after we closed the deal, I got the approach from the other side offering 500 million plus. Not for 500 million for the domain. I think I could have pushed it to a billion if I wanted to, but I didn't want to. So I think you guys need to understand I am pot committed.
- [137:52]
A
I love it. I love committed.
- [137:54]
B
I love that you're just thinking you're viewing this, like, obviously you're taking it very seriously, but you're also taking the approach of like, it's very early days in what will be a long journey for the project, but also the industry. And you're just gonna listen to your users and figure it out. But the conviction to turn down what would have been turning 70 million into 500 or a billion in 24 hours is admirable.
- [138:20]
A
Will you train a foundation model?
- [138:26]
E
I think I'm more focused on getting this to scale and getting the data flywheel going so that we can deliver for our users. Our users don't really care about which model runs in the background as long as the job gets done and their data is safe. But once you get to a certain scale, who knows?
- [138:48]
A
Anything's on the table. I like it.
- [138:50]
B
Well, I'm sure you'll be back on.
- [138:52]
A
That's very exciting.
- [138:53]
B
I'm excited to see this roll out and I'm signing up tomorrow.
- [138:57]
A
I might be using a dummy Google account, but I will be signing up and testing this out. I'm excited. And then I'll slowly forward myself data from my real account to give you a little bit more. A little bit more to see what it can do. But I'm excited for the launch tomorrow and congratulations. I mean, fantastic career, but also this particular project, really, really fun execution and a wonderful story. So thank you for coming to.
- [139:21]
B
Do you come? You're basically the mayor of Los angeles through the crypto.com arena. Do you come through much?
- [139:28]
A
You're a Lakers guy.
- [139:30]
E
I've been in D.C. last week and then I stopped over and Silicon Valley. I have never been to the arena.
- [139:37]
C
Never been to the arena.
- [139:39]
B
Wow.
- [139:39]
A
You gotta come sometime. Catch a game.
- [139:42]
E
Maybe we should catch a game.
- [139:44]
A
Yeah. They also do monster truck rallies there. Underrated crypto.com arena experience. Especially if you have kids.
- [139:50]
B
This is a big monster truck guy.
- [139:52]
A
I'm a big monster truck guy. I don't really follow basketball that much, but I will be watching Gravedigger live in the crypto.com arena. Anyway, thank you so much for taking the time Congrats on the list. Have a great rest of your day. We'll talk to you soon. Let me tell you about MongoDB. Choose a database built for flexibility and scale. With best in class embedding models and re rankers. MongoDB has what you need to build. What's next?
- [140:14]
B
That is insane. Buys a domain immediately, could net a $430 million profit. Same day, decide says no.
- [140:23]
A
Diamond hands.
- [140:24]
B
Diamond hands. Diamond hasn't been to his arena.
- [140:28]
A
Hasn't been to his arena.
- [140:29]
B
He's like, I've heard of it.
- [140:30]
E
Yeah.
- [140:32]
B
What a wild story.
- [140:33]
A
Amazing. Here's another wild story. Alphabet is selling 100 year debt. You can buy a bond from old Google. Sundar's paying you in 2126. You'll be getting a payment from Sundar. They did a big bond sale. They're gearing up to sell bonds that won't come due for a century. You don't get your money back for a full century.
- [140:55]
B
Someone who Google $1,000, they're gonna pay.
- [140:57]
A
You a little dollar every once in a while and then you get full thousand dollars back in 2126.
- [141:02]
B
Sorry, I don't know if this is fake news, but somebody was saying that out of the Dow of 30 in like 1930, like none of those companies are publicly listed anymore.
- [141:13]
A
Thinking in centuries, potentially underrated. So it comes as the second big tech company to tap the bond market this year after Oracle issued $25 billion in debt last week. The Google parent plans to sell debt in dollars, British pounds and Swiss francs with varying maturities. According to an investor familiar with the matter. That will include debt with maturities of 3 to 100 years for the sterling debt and of 3 to 100 to 25 years for the Swiss francs. The dollar bonds will total up to 20 billion, up from the initial 15 billion. The investor said. And I was listening to Ben Thompson talk about for a long time. If you were worried about the AI bubble, the easy counter was, hey, all this build out stuff, it's just being funded with cash flow from these super profitable companies that have been around for decades. Worst case, they take a bath on some cash flow. It's like what happened with Meta and Reality Labs. Mark Zuckerberg drew down a ton of the free cash flow from Meta's incredible advertising business. Launched some VR headsets, didn't really get crazy traction went back to printing free cash flow, right? It was no problem. Of course he had to restructure the business a little bit. But the stock rebounded. All investors were like, okay, that was sort of a fever dream. We're moving on. Well, now the hyperscalers as a class are all going all in on AI and spending all of their free cash flow on AI. And that's where people start to get a little bit more worried. I'm sure we will be hearing more about the potential fears of an AI bubble also. I mean, people are broadly very excited about this. Like, I believe that this, this $25 billion debt offering was massively oversubscribed. People are excited about, you know, buying these Alphabet bonds. It's such a robust business, been around for a very long time. And so people are, are gearing up to ride with Google into singularity.
- [143:11]
B
The DAO ekes out third straight record.
- [143:14]
A
Let's go, let's go. Gong for that.
- [143:17]
B
Gong for that. Third straight record. Close.
- [143:27]
A
Automate Compliance and security. Vanta is the leading AI trust management platform, baby.
- [143:33]
B
So blue chip heavy. Dow Jones rose roughly 0.1%. It's not much, but it's on its worth.
- [143:39]
A
You didn't tell me when you said it was a record that it was 0.1% gone.
- [143:43]
B
I hit it pretty hard.
- [143:45]
A
I hit it like it was 3%.
- [143:47]
B
Industrials the safe haven in the sass apocalypse.
- [143:51]
A
Anyway, Nikita Beer is saying that X will be looking into undisclosed paid post via clipping agencies. Tarun said these big accounts copy and paste each other's content and get paid by X. What are your thoughts on this, Nikita Beer? Nikita chimes in. He says these are likely undisclosed paid posts, also known as clipping. When you see this happen, the person or brand in the story is likely paying a clipping agency to take over the timeline for a day. We're looking into it.
- [144:21]
B
Yeah, they're looking into it. But to be clear, this doesn't read like they're looking into something supporting it. They're looking into how to.
- [144:29]
A
I think that's what yeet. The original poster was saying we'll be looking into undisclosed page posts. I think everyone's annoyed by undisclosed page posts and wants them to go away. And it appears that Nikita and Elon are also in that camp to say, hey, we want these to go away as well. They make the platform worse in some ways because it's astroturfing. It's not organic, it's not what people actually want to see. It's engineered to go viral and so it makes the user experience worse. And Nikita cares about that.
- [144:59]
B
Buck says, my rep at MrBeast bank said I can have a 9% APY savings account, but I do have to live in the bank vault for 100 days.
- [145:09]
A
The jokes really write themselves with Mr. Beast Bank. It's very exciting, but we'll see where it goes.
- [145:15]
B
Tyler was saying you could maybe offer. No, there's no 0% APR APY. There's no interest yield. But you get a chocolate bar once a month. Free chocolate bar.
- [145:29]
A
Wait, isn't that just pure upside for the customer because they don't pay interest, but then they also get a chocolate bar.
- [145:38]
B
No, I'm saying like, hey, it's like, we heard you like rewards. So we're giving you rewards, but we're not going to give you any of.
- [145:44]
A
The interest yield, no points on the bank. Okay, got it. I was in credit card debt world, Not.
- [145:50]
B
Yeah.
- [145:50]
A
Not in savings account interest world. Yeah, that makes a ton of sense. Yes.
- [145:54]
B
This is crazy. There's a ATM in China that melts your gold.
- [146:00]
D
Wow.
- [146:01]
B
At 1200 degrees Celsius and transfers money straight into your account.
- [146:05]
A
Do you think it actually does this in at the ATM or do you think it just looks like it does this and it's just storing it in the background?
- [146:11]
B
Couldn't you, couldn't you weigh it? But at the same time, I imagine people would try to spoof it so they actually maybe do have to.
- [146:17]
A
It pays you immediately. I mean, I've seen those ATMs where you put a bunch of change. Have you ever done one of those? Have you ever saved up?
- [146:24]
B
Oh, I used to do that when I was a kid.
- [146:26]
A
Yeah.
- [146:26]
B
Piggy bank.
- [146:27]
A
You put a coin in there.
- [146:28]
B
The piggy banks really fell off, I think.
- [146:29]
A
I mean, the death of the penny does not bode well for the piggy bank maxers of the world. It was a true coming of age story. To save up a hundred dollars in quarters, take it to the exchange. Although the real alpha was not using those ATMs because they take a cut of the counting. So.
- [146:49]
B
Yeah, they're piggy banks.
- [146:51]
D
They are, yeah.
- [146:52]
A
So you get.
- [146:52]
B
They're preying on young pig.
- [146:53]
A
Yeah, you get the. You get the little paper. You get the little paper coin rolls. And then you fold them up and you put the quarters in. And when you get to the full stack, that's exactly $10 or something like that. And then the dimes is $2 or something like that. And you very meticulously count them all up. It takes you all day. But at the end, you get 100% of the value you're not paying anybody. And then you take it to the bank, they turn them in and they're very Happy to hand you cold hard cash that you can use to buy.
- [147:23]
B
The Cougar method of being five years old.
- [147:25]
A
Yes, yes. I would definitely save quarters. I have definitely bought an N64 game for $50 with coins.
- [147:32]
B
Aston Martin Aramco F1 team is welcoming Cognition. Congratulations to the cockpit. Very excited the dedicated AI coding company joins us as a global partner. Love to see it. We will be back with Aston Martin this year I'm sure at some point with our brothers over public. And it's great to see Cognition joining.
- [147:55]
A
Sort of underrated in the FDE boom that Cognition has been going after larger enterprises since like day one. Right. That this was, you know, Devin did go into general availability, but you know, the business.
- [148:10]
B
An enterprise business.
- [148:11]
A
Yeah. I mean the first time I saw Cognition mentioned on stage, I think was at a Microsoft conference and they were talking about replatforming. Net applications. Like that's not exactly like, it is vibe coding, but it's not really vibe coding. It's not a common consumer vibe coding use case. It's not a personal website. It's much more like you're a huge company and you're running some Fortran and you gotta move over to Python or Rust or something and you send in Devin.
- [148:38]
B
Matteo says today I'm excited to announce our partnership with Aston Martin F1. Growing up as a motorsport fan and racing car driver myself. Whoa. Some lore. I've always admired the precision and dedication that goes into every race. When I first connected with the Aston Martin team, it was clear they shared our vision at eight Sleep. This isn't just a logo partnership. Aston Martin is now an investor at eight Sleep because we want to integrate our technology directly into their performance strategy.
- [149:04]
A
That's fun. I mean we were talking about. The F1 circuit for the drivers is so intense. You're flying all around the world constantly. And I mean it takes me a full week to. To adjust from just going from Europe to America. So getting on eight Sleep.
- [149:21]
B
Yeah. I wonder if there's anything that can actually apply eight Sleep's cooling technology to the cockpit to help with driver performance. I'm sure there's various vendors already that are dealing with making sure that drivers are not overheating. Obviously cars in IMSA and things like that have.
- [149:41]
A
Have AC F1 car trailer with a California King 18 inch mattress with an 8 sleep on it. You sleep on that while you're going around the track. That's good. Let the.
- [149:53]
B
So Jaguar. Is this a real Jaguar out on the streets in London? Did you see this?
- [149:59]
A
I saw the post, but I don't know if it's real. I have no idea.
- [150:04]
B
No community note.
- [150:05]
A
No community. This does look real. But El Slappo. AI slaps though it's not AI, dude. You stole the original post from Instagram. That was made two days ago. Hard to tell, but it does look.
- [150:22]
B
Like you can't even trust your own eyeballs in this world anymore. You can't.
- [150:28]
A
But wasn't it supposed to be electric when it came out? They said, they're saying this is a voice. I don't know. I would need to really Pixel.
- [150:36]
B
No, that's a joke. They're saying like, hey, it looks really cool. Now it just needs a V. Oh.
- [150:41]
A
Now it just needs a V8. Yeah. Seriously.
- [150:43]
B
Moving on.
- [150:44]
A
This does look good though.
- [150:45]
B
Moving on.
- [150:46]
A
I think if they wound up shipping this, it could be successful.
- [150:52]
B
I covered this when Chris was on from AI.com but the story here is this. MalaysianBotai.com as a boy in 1993.
- [151:01]
E
Wow.
- [151:01]
B
Now he sold it for $70 million. He bought it for 100 million.
- [151:07]
A
Wait, what? No, he bought it for $100.
- [151:10]
B
Bought it for. As a boy, he bought domain for 100.
- [151:14]
A
Ismaili.
- [151:15]
B
Ismail Arcian Ismali Ismal.
- [151:18]
A
He paid 100 USD 30 years ago.
- [151:22]
B
What a buy. Just what a buy. What a visionary.
- [151:25]
A
Visionary. I love it. It's amazing. Let me tell you about vibe co. Where DTC brands, B2B startups and AI companies advertise on streaming TV, pick channels, target audiences and measure sales. Just like on Meta.
- [151:37]
B
The vine boom really does hit Dan Primack at Axios. Last story. He says good one.
- [151:43]
A
To kick off.
- [151:45]
B
Stripe is in talks we valued at over 140 billion. Everyone. Eric Bond.
- [151:52]
A
That's a lot. That's gonna buy a lot of cheeky pints.
- [151:56]
B
A cheeky rack. Maybe they can afford the 20 ounce.
- [151:59]
A
Glasses now they can build out the rest of the authentic Irish pub. That would be a good use of capital. No. Congrats to all the folks over at Stripe. What a fantastic progress. Certainly not affected by the SAS apocalypse and whatnot. It's a network they've been building and building four years and who knows? Maybe we'll see.
- [152:19]
B
I'm so curious to understand in the 2100s, I would love. I would love to hear them talk about the like, competition for Stripe. Yeah, like where are they actually facing competition? Is it real? Are they the kind of company that has to say, we have a lot of competition. We have. You know, basically, I think it's Adyen. If you don't Have. Yeah, that's Adyen. And certainly you don't see. No, no, that's. That's a. Yeah, that's a comp.
- [152:45]
A
Oh, you mean like.
- [152:46]
B
But in the context in our world, you don't exactly see companies saying like, I just set up my Delaware C Corp and I built some software, now I'm going to set up Adyen. Right. It doesn't.
- [152:57]
A
Yeah, yeah.
- [152:57]
B
You never see it.
- [152:58]
A
Yeah.
- [152:59]
B
Obviously they've been more, a lot more enterprise focused, but I wonder where they actually do face competition at this scale.
- [153:05]
A
Well, we'll have to dig into it. Let's start the Lambda Lightning round. We are. We already have the mallet down, but we have Cristobal Valenzuela returning to the show. He's the co founder and CEO of Runway. And here he is in the TVPN UltraDome. Good to see you. How are you doing?
- [153:23]
F
Hey, good to see you guys.
- [153:24]
B
How are you?
- [153:24]
A
Congratulations. Give us the news. What happened today?
- [153:27]
F
Yeah, a lot of news. We just raised our series C and so we're announcing it.
- [153:31]
D
How much?
- [153:31]
F
315.
- [153:33]
B
That's five. Big, big numbers.
- [153:38]
D
Big numbers.
- [153:38]
A
I love these products. You know, I'm an og.
- [153:40]
B
Jordy, you were one of the first.
- [153:43]
A
Yeah, yeah. Back when it was like a rotoscoping tool almost. Not to sell it short, there were other features, but the Roto was very, very cool.
- [153:50]
B
You invested.
- [153:50]
C
Yeah, that's.
- [153:52]
B
This is a running joke. John's like an early user of like every, every, you know, five to $100 billion company and no break down what's been going on the last kind of few months. Talk about traction, all that good stuff. And then I want to talk, yeah, I know where this money's going to work.
- [154:11]
F
Of course.
- [154:12]
B
Yeah, that's a lot going on.
- [154:12]
F
And so obviously closed around late last year. I think we just like figure out now we should announce it. There's a lot going on. Just in the company model Release we released 4.5, which is one of the best video models in the world. And it's been getting used a lot. I think a lot more than what we usually like tiny for. And so one of the biggest thing in like research and both inference is capacity. How do you manage like the amount of volume of users and like inference that we're seeing. And so scaling compute has been critical for us reminded like we're perhaps like smaller frontier labs out there and we're having and creating some of the most powerful like models. And I think the way we do it is we're very like Efficient with how we do things and the research itself. And so a lot of our racing and we're putting our funding towards scaling that machine. We build to get more training runs to get more pre training of the next frontier models and then supporting inference. We have millions of customers who just require more Runway and supporting them is the biggest thing and the biggest obsession for us right now. So yeah, putting funds into that and then talent we're hiring across the board. So from research, from engineering, from sales for pretty much everything at Runway, which is great.
- [155:34]
E
Yeah.
- [155:34]
A
Talk about going all in on video generation training models, the actual video generation from start to finish versus tools. I was watching Corridor Crew, you probably know those guys and they were like I still don't have a good roto tool. And they were like sort of vibe coding and stuff. And it feels like there's that we're in the centaur period of video editing and I see vibreals on Instagram all the time that are like no video model could do exactly what they're doing because they're editing so fast and in such bizarre ways. At the same time the models just keep getting better. That's sort of where you want to be. How do you think about the trade off between building tools and harnesses and tool use within video generation versus just like just all in on the video generation will solve every problem.
- [156:26]
F
So I think the reality these days that you have to do both the way we call it at Runway is there's that the exploration mindset and exploitation like mindset you need to be able to explore and create new models, pre train them, build net new products, net new things. I think we been relatively good at that. We've been first to market with video, first to market with role models with real time gen. Like the surface area of what you can do there to help either filmmakers like the crew guys or other folks is just so big at the same time. Like the gaps you can fill by building the right workflow on top of the right model or chaining models together to get to where you need to go is the way you educate the market to. To like that next frontier of sorts. And so the best companies I would say are the ones that can do both. If you only focus on one, you're detached from your user base from the reality from use cases. If you focus primarily on like workflows, you're going to get leapfrogged. And this is a bitter lesson I think we've seen over the last. We've been working on running for seven years now. The bitter lesson of like a startups is that they eventually get leapfrogged by a better like bigger, much more capable model. And so there's definitely a market opportunity while you're getting leapfrog. And so being good at being ambidextrous of like you need to use your left hand and your right hand all the time to like win here.
- [157:48]
A
Yeah, talk a little bit about tool use. It feels like nanobanana definitely has access to some tools just to like cut out an image, overlay it. When I asked ChatGPT to multiply two big numbers together, it doesn't just try and inference that it actually writes some Python executes it in a repl. If I go to Runway and I say generate me a video of beautiful mountains, it's going to do that flawlessly. If I say now make it black and white, is it going to know just to drop out the colors using a traditional workflow or will it regenerate the footage? Because that feels like an extra step wasteful. And then if I like the way those mountains look, the new mountains might be slightly off. So how do you think about that workflow and tool use coming to these models?
- [158:33]
F
Yeah, that's an interesting point. I think tool use might be.
- [158:39]
H
I.
- [158:40]
F
Wouldn'T say the best way to necessarily think about it. I think the best way to think about it, I would say what video models are capable of is that in some way they have all these emerging properties that if you tune them well into, there's examples in research and I think others and we have proven that if you want to train a great rotoscoper, a great rotoscoping machine, you can just take a baseline model and show it a couple of examples of rotoscoping. And the model has, and this is where the world model like approach comes from. It's like the model has innate understanding of the world. And so with the right examples then the model can learn that particular task without necessarily having to be pre trained for it or without necessarily having to seem enough examples of it. And so the most unique opportunity around here is that these are eventually simulation machines. That's what data models are, they're simulating the world. And the way they simulate the world is by watching the world. Therefore you can ask it for almost any task like remove things or add things or change how things are seen, create a new novel camera angle for example. And when you think about it that way, then simulation becomes extremely useful in other domains as well, like robotics or self driving cars or many other opportunities where you're not showing videos to humans, but you're showing videos to robots and robots are learning from those videos. And I think that video as a world simulation engine is perhaps the most impactful thing that AI that we can work in AI these days.
- [160:05]
A
Yeah.
- [160:06]
B
How did you react to the Super Bowl?
- [160:09]
A
There was.
- [160:09]
B
Svetka had like the first AI super bowl ad. I have to imagine a lot of the other ads were using AI in some way or another. It's kind of hard to clock. They're 15 second ads if you kind of want to keep up with the program. So not necessarily pausing and looking at each pixel.
- [160:26]
A
I see six fingers. Yeah. I think a lot of people, I.
- [160:30]
F
Think more ads were using AI than I think people realize. But it's hard to tell. And maybe that's the trick. Like you can tell. I like the idea that you're making an ad and you're putting it out because it's good, not because it was made with AI, but I'm pretty sure there are a lot of fats out there that were made with AI also. First time I watched a Super Bowl, I think I'm not a super sports fan, but I'm from Chile and we had a lot of great Chilean representation there. Pedro Pascal was there. So biggest Chilean representation we've ever had.
- [161:00]
A
Yeah. Who are the biggest customer segments? Some of these apps have people that just video generation just for themselves. I was talking to Sam Altman about this. Like when I use Sora, it's just for like an in joke between me and Jordy. It goes in like a text chat. Then you talk to other companies and they'll be like we are used by social media advertising agencies like crazy. Then there's other people that might be in Hollywood and they're like, hey, we just need to do background shot or stock footage. What's the biggest use case right now?
- [161:31]
F
I mean biggest cases is just media all around like marketing, entertainment, film, pre production, post production. We've signed with all the studios out there. We've signed with a lot of agencies and brands, marketing teams. I think the default way you make things will be with AI and first like it's just such a. And you started to see this already where like studios are now hiring like AI like chiefs or like they're organizing their entire companies around like AI related workflows. I think that the norm of what you'd expect over the next couple of years because the trade offs are just so, are so big. Like you start to realize you can do things in days instead of Months. And so for us, media, entertainment, just content across from like social to much more professional will continue to be a source of growth for sure.
- [162:20]
B
Yeah, it was eye opening yesterday. We, we were on Fox Business for like a total of of three minutes. But while we were in the waiting room to go on, we, we watched like five minutes of ads. And every single one of the ads I was like, I feel like Runway could like not one shot this necessarily but like it's you know, five different kind of scenes stitched together and I don't know why you would even in 2026 do this as a IRL production.
- [162:50]
F
Yeah, no, you don't have to. And I think that's what most agencies have realized, but also the market marketing teams. We've signed with PayPal, with Allstate, we've signed with agencies across the board, with amc, with Lions, like all of them. All of those companies and brands and teams have realized why would you spend six months, hire an agency to do one work when you can just do it internally? As you were saying, not entirely one shot it, but kind of close to it to be honest.
- [163:15]
A
That's amazing. Well, congratulations on all the success. Thank you so much.
- [163:18]
B
For sure you'll be back on this year. You've got a habit of, of raising money every two months.
- [163:24]
A
Such an exciting company.
- [163:25]
F
Yeah, maybe in two months. I'll see you again.
- [163:27]
A
We'll see you soon.
- [163:28]
B
Good stuff. Congrats to the team.
- [163:29]
A
Good seeing you.
- [163:30]
F
Thank you guys.
- [163:31]
A
Bye. Let me tell you about Restream one livestream, 30 plus destinations. If you want to multi stream go to restream.com and I'm also going to tell you about graphite code review for the age of AI. Graphite helps teams on GitHub ship higher quality software faster. And without further ado, our next guest guest is in the Restream waiting room. We have Brad from primary. He's the co founder and what's going on? Brad, good to see you. How are you doing?
- [163:53]
H
Great guys, how are you doing?
- [163:54]
B
We're doing fantastic. Not as great as you. We didn't raise hundreds of millions. We're not announcing hundreds of millions of dollars in news.
- [164:03]
A
What happened?
- [164:04]
H
I don't know guys. But you, what is this like about 12 months in and you're becoming the place that people like me have to come and make these announcements. So like you're doing something wrong.
- [164:13]
A
Right? Thank you. Thank you.
- [164:14]
B
Or having fun. But it's great, great to meet, great to meet you and super excited to.
- [164:20]
A
Give us the news. How much is the fund.
- [164:24]
H
So we raised $625 million for our. Awesome first gong of my life. I appreciate it. First gong in primary's history.
- [164:38]
A
That's great.
- [164:39]
H
May there be many more. Yes, but 625 for our fifth family of funds. That's both a pure seed fund and what we call our select fund that doubles down on some of the biggest and most successful of our portfolio companies. That's to, you know, we are, our model is, is institutional seed at scale. We think the world is rapidly as you guys know and you guys have talked to the leaders of these firms. The kind of mega platforms are getting bigger and bigger. They're sucking a lot of oxygen out of the room. They're getting more and more aggressive in the seed market. And our point of view, my co founder Benson and I have thought from the beginning 10 years ago that seed was a sub asset class that deserved to be treated as such. That there is a very different value proposition, a very different set of needs and opportunities to be the best partner to founders. Founders at the earliest stages it looks a lot different than supporting founders who have $10 million businesses you're trying to take to 100. And so we've tooled everything we do to be the best partner in an institutionalized professional with a lot of support resources behind it. Way from in those most fragile moments where the magic really starts to happen.
- [165:59]
B
Give us, give us the, the update on seed today. In 2020, 2021 there was, you know, every platform fund was descending down and being like hey, we've got plenty of money, why don't we compete here? The narrative at that time that you were probably talking founders through was like hey, there's some real signaling risk and you're not going to get necessarily the attention and there's all these implications. And then I feel like a lot of funds backed off a little bit but at the same time they created accelerators and things like that. And where are we at today? What does the market look like?
- [166:37]
H
Yeah, I haven't seen a ton of backing off yet. Certainly every time we're in an exciting competitive seed deal, which is all of them now we assume that one of the big, at least one of the big multi stage platforms is around the hoop as well. And I get why. I mean I've been in this business for a couple of dozen years now. I've seen three full cycles of.
- [167:04]
F
The.
- [167:04]
H
Kind of big firms coming down market and that's, that's what everybody does. It gets competitive at your stage and you try to front Run all your competitors and move early and that moves down and down and down market. And so we're seeing it again. I think, I think in each one of those cycles I've seen before, founders ultimately figure it out. You know, when you have leaders of some of these platforms openly saying, we're sort of indexing categories and we want to seed multiple competitors and then we'll back up the truck for the winner, that's a really rational decision for them. It's not a great value proposition for, for seed founders. And we, we want to be that we are there.
- [167:46]
B
Amazing. Go for it.
- [167:49]
A
Oh, I'm just, I'm wondering more about what being ready for a seed round looks like in 2026. It feels like some things are so fast with prototypes, vibe coding. Like you can have something that looks so polished at the same time. Like, building relationship with co founders takes years, decades sometimes. Like, like, what do young founders, new founders, actually need to be thinking about before they go out to raise?
- [168:20]
H
I think the fact that, to your point, the fact that you can buy code, something awfully impressive in a weekend, the fact that you can get customers excited about something literally in a week or two. Now obviously that plays to the advantage of everybody, but it doesn't substitute for the fact that if you're going to be selling into a market, you know, there's a reason that the guys, you know, the three or four real breakout companies in the legal tech world all have lawyers as they're amongst their founders. There's like critical customer context and product awareness that only comes from living within these industries. And you can't, you can't fake that in a weekend.
- [169:02]
A
Yeah.
- [169:02]
H
You can't fake how well you've gotten to know your co founder. We certainly spend as much time as we can really getting to understand the human dynamics of this stuff. Because the lesson I relearn every single year in this business is that there's nothing more important than the kind of character and grit and makeup of those founding teams. That's what ultimately drives the game.
- [169:23]
E
Yeah.
- [169:24]
B
What's a category that you'd like to be more invested in? Maybe you've done some one or two deals, but you want to do more, or there's kind of, you see a greenfield opportunity and you're looking for the right company to back there.
- [169:41]
H
A couple of things we've been, we've been very light on activity over the last several years in blockchain and crypto because we haven't felt like the kind of application layer of those markets was ready that is starting to feel much more interesting to us. My partner Emily, who leads all of our financial services work, is getting more and more oriented there. My partner Sam Toole, who leads our health care practice, is thinking a lot. And we brought on a venture partner recently to help us explore what's happening at the intersection of AI and biology. And there's a set of life sciences companies that are going to be transforming treatment and therapeutics in the next decade that look a lot more like computer science companies than they do biotech companies in a traditional way. And we're getting much more actively involved there as well.
- [170:39]
A
How have you been processing the SaaS apocalypse? Is it a suicide mission if you're a startup founder to pitch a seat based model in 2026?
- [170:49]
H
A seat based model?
- [170:51]
A
Seat based model. I'm selling SaaS and I'm doing enterprise SaaS. Save yourself the trouble.
- [170:56]
H
Stick the gun to your head.
- [170:58]
A
Just, just ended.
- [171:00]
H
Yes, but a usage base, a value base. I think we're in a really interesting period of transforming the way software is priced. And I think there's a lot of people with good ideas and best guesses. Anybody tells you right now they know what the answer is is wrong. Like we're going to have to see how that plays out over the next several years. And it's that kind of, you know, the premium we put on creativity, nimbleness, like being a learning machine and the founders we back is higher than ever right now because we know it's just radically changing week to week to week.
- [171:34]
A
Yeah. Do you like the idea that AI unlocks new areas for software to eat the world more fully? I mean the legal boom has been interesting. There's been a few legal tech companies, but I never thought of legal tech as a multi unicorn category. And now it feels like there's many players, lots of revenue, like it's an entirely new era for that category. And I feel like there's probably five more of those subcategories that are less explored.
- [172:07]
H
I think there's a lot of markets where historically it's been hard to sell software, but when you do what the legal tech guys are doing and start to sell software that's bundled effectively with work work, that's a super compelling, super compelling set of opportunities. We have a company called Light Table that's in the kind of architecture and engineering and design space that you know, you traditionally an architect completes a set of drawings for a building, you send it off to a third party quality control operation and they like do the checking of like hold on you can't have a, you know, elevator right there next to that. I beam, whatever the problem is. And so it's been a traditionally very manual process. Like suddenly bam. That is AI automated. What took you three months gets done in 30 minutes. And that's been historically a really hard category to sell into. But now when you're selling not just tools to do the work, but the work completed itself, that's really transformational and we think that plays, that is what's going on in legal and that plays across many, many, many sectors.
- [173:16]
A
IPO.
- [173:16]
B
Oh sorry, go for it.
- [173:19]
A
IPO market in relation to seed market. If OpenAI anthropic, SpaceX get out, there's a whole bunch of liquidity that could funnel into early stage startups. Even early employees getting liquidity, becoming angels. At the same time, you know, you have like the most formidable companies in the world now trying to like eat every opportunity. How are you processing this idea of like these mega IPOs and how they might change your business or the business of the companies that you work with there?
- [173:47]
H
There's no question guys, they're, they're going to be helpful. I mean this LP base, you know, we have terrific LPs, they just trusted us with a big pile of new capital. Yeah, we feel very fortunate, but they're all starved for liquidity. The asset class has not done a great job of returning more dollars than it's raised year after year. And so I think this will, this will unlock a bunch. It's been a tough, we had a quite streamlined process at our raise but it's been a tough process for a lot of people and I think it will be good to have more capital flowing into frankly something other than just the mega platforms. I think an interesting thing in the IPO dynamic though is you know, yes, open air, anthropic, Space X, those are incredibly sexy, like I need to own that stock kind of names. The pipeline of IPO ready companies is also full of a lot of traditional seat based SaaS. Companies that are in a bit of a weird limbo right now. So it's unclear to me whether or not those three getting out unlock some like tidal wave of additional activity.
- [174:55]
B
Yeah, last question. How are you advising early stage founders? Let's say you back at three co founders in New York, when are they making the call to stay and scale a team in New York versus set up on the west coast or wherever?
- [175:16]
H
We do equal amounts of work on the west coast as New York now despite our original New York heritage, by and large, if we're meeting teams who are in New York. They're in New York for a reason and a good reason. And so I can't remember ever having said, like, gosh, you really need to go west to build this business. We definitely see companies on the west coast that are, that should be there as well. But I think as we, you know, what we're in right now is a, is a phase of the AI revolution that's been much more. More foundational and infrastructure driven. And that's a phase that the Bay always does well. You know, when the, when the PhDs are driving the companies, Stanford and Berkeley are going to be, you know, out punching NYU and Columbia. When kind of go to market activity and being connected to customers and starting to really scale regulatory accounts and all of that. Like, that's when the fact that New York is home to media and consumer packaged goods and financial services and everything else starts to shine. So it's been important for us to be playing both coasts because different coasts excel in different environments.
- [176:29]
A
Yeah. Makes a ton of sense.
- [176:30]
B
Awesome. Well, great to meet you. Thanks for coming on. Congrats to the whole team.
- [176:33]
A
Congratulations.
- [176:34]
H
Thank you.
- [176:36]
F
Thanks.
- [176:37]
H
Congrats again to you guys on all your success.
- [176:39]
A
It's been fun to watch, but we'll talk to you soon. Have a good rest of your day. Let me tell you about Okta. OKTA helps you assign every agent a trusted identity so you get the power of AI without the risk. Secure every agent, secure any agent. And without further ado, we'll bring in Vader Grayson. Welcome to the show.
- [177:05]
F
Thank you.
- [177:05]
A
Thank you so much for coming on down to the TVPN ultradome. First time on the show. Please introduce yourself.
- [177:12]
I
So Dana Grayson, founder of Construct Capital with Rachel Holt. We started in 2020. I spent about a decade prior to that a little bit less at NEA doing early stage investing. Started a smaller boutique firm in Boston. That's where I learned Venture. Had a small stint in product design at a company that had gone public and that's what sucked me on over to the venture side.
- [177:34]
A
Was there any particular focus at nea? Stage wise? Sector wise?
- [177:37]
I
Yes, definitely. So nea, Big firm Tech, Healthcare, early stage, later stage. At least that's how they were organized then. I was early stage tech mostly outside the Bay Area, but that's because I lived on the East Coast.
- [177:49]
F
Sure.
- [177:50]
I
Of course. Did some stuff on the Bay Area too. My first investment was a company called OnShape, which is a CAD company. CAD in the cloud. Brought CAD like next generation.
- [177:58]
A
Now, based on what you're doing now. Okay, continuous.
- [178:01]
I
So exactly like that. That was a pure SaaS investment. I was a SaaS software developer prior to that. Always enterprise SaaS, enterprise software through OnShape. I saw like, okay, if you actually bring collaboration to product design, like real product, physical product design, make it cloud, like Google Docs, that affects like the whole downstream manufacturing and creation of those projects. Like you're not FTPing files, you're not calling your manufacturer in China. You're actually able to instantly change things and iterate on the design a lot faster. So from there I got into desktop metal with Rick Fullop, who I had known for years prior a whole slew basically from 2015 on was doing just exclusively industrial, mostly software investing, tulip automation.
- [178:53]
B
Before it was cool.
- [178:55]
I
Before it was cool.
- [178:56]
B
And we had a terminology for it outside of just.
- [179:00]
I
I didn't have a term for it.
- [179:01]
B
Yeah, I didn't have a term for it.
- [179:03]
I
I like to say I was like, no, not hardware, not hardware. Cause that was like a bad word.
- [179:07]
B
Yeah, like, but secretly we're doing hardware.
- [179:09]
A
Was that just a bad word because of the capex intensivity of that category?
- [179:13]
I
Yeah, yeah. In those days you had to have, and it wasn't that long ago, but you had to have people like Rick who were just like larger than life, going to will it to make it happen. You know, you've got, now we've got SpaceX.
- [179:24]
B
The difference it was like hardware was hard. So people were like, like I maybe don't want to invest there. Or founders would say, well, I could build this thing in the real world, but I could also build some software scale to a million users really fast. And now hardware is cool, but it's still hard. Like that part has. Which is why over the last I had a friend of ours was saying, man, I think a lot of these new hardware, American dynamism companies aren't going to make it. And we were like, yeah, of course that's actually how it's always been. But that doesn't mean you shouldn't invest there. And that doesn't mean it's not worth still building. It still fits the venture model even though it's really hard. But you're going to get these outlier outcomes.
- [180:08]
I
Well, you got to keep it simple. Like in hardware, you can't do everything. Like when I see teams designing everything new, you're like, that's gonna fail because you do every little thing new. We love companies that are doing like commoditized, using commoditized off the shelf stuff for Most of it. And then innovating where they need to innovate versus like building the whole thing. That's where you can really falter.
- [180:30]
A
I remember talking to a drone company like a decade or two ago that didn't use Linux. They were like, we need our own operating system, which is crazy. So they had like an operating system team, then the software on top of it, then the hardware is like they're.
- [180:43]
I
Really like to be around success.
- [180:45]
A
Yes, exactly.
- [180:46]
I
Like to be around. And so that's what I say. I think today what you're seeing in industrial tech, you're seeing three main things. You see AI, automation and we'll of course get to that, I'm sure in this conversation. And that just being able to do things that are filling the talent shortage.
- [181:02]
A
Yeah.
- [181:02]
I
And boost productivity. Just like we're seeing in the IT space. Obviously coming over to. Not obviously, but coming over to the industrial world. It's taking longer. Physical AI is going to be longer, but it is happening. I think the other thing that we really see is like you're able to create things and do things that you just weren't able to produce before partly because of the speed. Like you get engineers that are coming over from the tech world where they're used to. Someone mentioned earlier on the show like fail fast and do things like that. Like you have to have that mentality of just like willing it into existence. We don't usually back people that are coming out of Fortune 100 industrial companies. We back the people that were coming out of uber or now SpaceX, Palantir.
- [181:46]
B
Yeah, you want to back like people that are coming out of a big company but that became big really quickly versus the industrials company that's like, yeah, we were started in 18.
- [181:58]
I
Otherwise hardware. It's like, well this will be ready in two years and you can't accept that type of cycle.
- [182:02]
A
What do you think about why the reindustrialization narrative is so tied to the defense narrative? I've had this sort of like random thesis that like maybe if we want to re industrialize fully, like we should make Happy Meal toys here and get back into injection plastic injection molding. But like what are the steps? Obviously there are some accelerants to re industrialization in the defense context because of supply chain security, because of the way DC writes contracts and does deals, you sort of have one buyer, so maybe you can accelerate. But what's easier or harder about the various pieces of the reindustrialization puzzle?
- [182:42]
I
I think it's definitely become like the early adopter market which is like ironic. That is ironic that like defense is our early mover but I think it will happen across the board. I mean when we started construct we really believe that like the world of industrial companies that could dwarf like you know, the whole S and P value today 50 if you projected out 50 years you could have you know industrial companies, they should be part of our public markets.
- [183:08]
D
Right.
- [183:09]
I
But getting back to your question in the defense space that that is just something that you know has to be built on U.S. soil. You know you've got to adopt new technology. You had the great impetus, the oh crap moment when you know Ukraine and actually it happened way before that but that really opened the eyes of like if we're going to support that we're running out of stuff faster than we can make it and like it's a oh crap moment. Not just like we knew this was happening, which they did know was happening but it was like an actual depletion so they had to escalate and there are budgets, there are large incumbents that need to be disrupted. It's all the things I think the thing that we haven't seen is like we're financial markets investors, we're all totally driven at construct of we want to see 50 trillion of new market cap created in our lifetime in public markets from these spaces. We don't know how that's going to play out yet but I think we're.
- [184:06]
A
Yeah, we're learning what's different for the early stage industrials company venture debt is so taboo. If you're running a software company it's something that can blow up on you. It requires a different level of financial rigor. What are you seeing the best founders do to sort of financial engineer their success when they need to maybe buy a lot of equipment.
- [184:31]
I
I think it's a hole in the market right now.
- [184:33]
A
It is.
- [184:33]
I
I mean I do think it's a hole. I think debt is a whole, you know, the venture debt guys don't know how to lend to companies that are startups unprofitable. Buying hardware and capex like they don't do that.
- [184:46]
E
Yeah.
- [184:46]
I
You know and traditional banks that would do that don't do that for unprofitable companies. They lend to get cash flow so you kind of.
- [184:53]
B
Or they do but. But it's like the founder actually has to put their house on the line. It very quickly is like yeah, you can get a loan if you're willing to stake your entire financial life on it. Venture backed startups are not used to.
- [185:12]
I
Doing that, yeah, so you have to put these different instruments together. We don't recommend that raw startups go out and take debt, but certainly series B stage, you shouldn't be using equity capital to finance a build out of a factory or you know, things that are finance.
- [185:28]
A
Has there been any movement on equipment financing in the way large equipment makers, if they're starting to sell to more startups, if there starts to be more activity in the venture community, there's actually crossover and you see more risk taking from suppliers deeper in the supply chain because that's also like unlocking liquidity in some ways, right?
- [185:48]
I
Yeah, I mean vendor financing is great, right? Yeah, we've seen some of that certainly at the bigger companies like Hadrian and others that are buying at scale now.
- [185:58]
B
What about, wait, speaking of Hadrian, I wanted to ask, do we need more Hadrians or is Hadrian the Hadrian for X? And a little anecdote. We were flying back from the super bowl and Chris, the founder of Hadrian was there and I was like, oh, were you, were you at the game? I didn't see you. And he's like, no. I was like, that some business meeting. And I was like, that's, that's bullish. It's like a late, late Sunday night flight. Like he was, he was, he was locked in.
- [186:26]
I
Yeah, well, I have both sides of that bet because my job depends on more Hadrian's, but I would love Hadrian to be the only Hadrian. We plow it all into that. But I think you've truly succeeded. When you hear people saying I'm the Hadrian of X, you know, we sit in a position where we're like, yeah, not really.
- [186:46]
B
It's like, do you know what Hadrian does?
- [186:48]
I
But that's okay too. I mean that's the sign of success. We're the Uber of we're the doordash of, we're the Google of we're the whatever. But I think what Hadrian's done so well and you guys probably know is just rebuilding the whole stack and like really not saying like never say die and until it's full automation, but like getting real return on. I mean they hit this market that was like supply going down and demand going up. And like when we first invested, we didn't even see the defense stuff. Right. Like we loved that it would happen and we thought it would happen. We were investing purely on aerospace and just our own belief in reindustrialization. And that was already demand going up. But then you have like double demand. Like there Are very few companies like, you know, people say you get lucky. I don't believe in luck. I don't believe in. I do believe in timing but not everybody can like have return on timing or you know, like you would on luck or return on.
- [187:47]
B
Yeah. What can we do? We need to be learning more from China on the manufacturing side. It feels like they learned plenty of things from us. We, they were the factory of the world. They learned what it took to make a great product. And then you look at BYD and companies like that learning from Tesla, whether Tesla likes it or not. We've talked to T1 Energy. When we saw T1 Energy launch, or at least put out a launch video last year, we got super excited because it looked like a Shenzhen style factory in the US and we were like, wow, America is back. And then we realized that it had a Chinese history. But what can we learn from China? Do we need to be taking that more seriously versus the American, you know, pull yourself up by your bootstraps and figure it out approach that.
- [188:44]
I
I mean sure, I think you should always know, you know, keep your competitors close, be learning from them, but be learning from them in a way that you can like leapfrog. I mean I think what we're good at in the US is you know, the things that you guys have been talking about all day, AI, you know, systems. And if you're going to play the catch up game, like we're probably not going to catch up. Like if you're going to play the leapfrog game, you've got, you know, to reinvent the way automation is done through what we do well with AI and software and systems. So I would say like be aware but, but like we're not, we don't have that culture, we don't have a, we don't have the worker talent available. You know, Steve Jobs said like we wouldn't even be able to do the tooling of the iPhone in this country with people that do it because we don't have that skill set. So we've got to find something else. I firmly believe, and it's been a original point of view or thesis of construct since we started of like manufacturing and production will look different in this country. Decentralized, different, smaller formats. That was the promise of additive manufacturing which I think is still finding its way. But you can do a lot of different things. You don't need humanoid robotics going everywhere. We may end up with that, but we have a few steps in between of just automating factories.
- [190:02]
A
I want to go back to the government as an interesting buyer of new technology, reindustrialization technology, defense technology. I'm interested to hear what you're seeing best practices look like on ramping up a business that sells to the government. I'm familiar with the sbirs and then getting to program of record. Has anything changed there? What are you seeing founders sort of match to based on their fundraising in the private markets relative. Relative to traction in dc?
- [190:37]
I
I think it's. It's probably more a canon. Like I'm speaking sort of naively here because we're not a bio. We're not biotech investors. But if you think about like the biotech world, right. You take different markers. You're like, okay, you've got FDA clearance and like you can go public or like you've applied for this, you know, you've got to this clinical trial. Oh my God, it's amazing. I'm like, I don't know if that's amazing or not, but like I think those are the signals you can take of like getting a program of record how you navigate that. But you know, these markets are mercurial too. So we're in a really great time now where there's a lot of spending, a lot of new programs, a lot of disruption, a lot of like unseating a lot of Neo primes that everyone's talking about.
- [191:24]
A
So what does it take to work for you as an investor? You have to be a great angel investor. Do you need a portfolio? Do you need me an operator? What are you looking for? Yeah. In the folks you hire.
- [191:34]
I
Yeah. You know, and we think of ourselves as like if you take the way venture has gone and like the bulge bracket VCs and the boutique VCs. We're boutique VC. I came from bulge bracket place.
- [191:49]
A
Yeah.
- [191:49]
I
Voted with my feet that you change has been going on for a while. It's great to see a couple firms, you know, declaring success there. But like declaring success. Well, being successful, I think being.
- [192:04]
A
Able.
- [192:04]
I
To declare because they were declaring their path for a long time and I think they can declare success raising. What was it and recent 15% of all venture capital, maybe more. 18%.
- [192:13]
A
I can't remember you hit that gong.
- [192:15]
B
Really meaningful market share like that.
- [192:17]
I
That's success.
- [192:18]
A
It is, yeah.
- [192:19]
I
That's hat tip, you know. So but if you follow like I've been studying that for a while because I came from a boutique firm in Boston. I went to nea. I don't think the way to look at it is look at other and I'll get back to your question about how we hire. But I don't think the way to look at it is how other venture capitalists are doing it. Like we look at like other financial markets, other asset classes, like hedge funds. So if you look at like hedge funds, you've got like the bridgewaters, the bulge bracket and then you've got like the Val post, you know, the boutiques. Yeah, we're very much a Valpost. So how would we. Or we aspire to be.
- [192:56]
A
Yeah, who you hire.
- [192:56]
I
We aspire to be. So how we hire is we hire that analyst type thinker who unlike in the hedge fund world, you can't do a lot of like analyst based research behind your desk. Our research is going out, meeting people, being in the field, like you have to learn on the front lines, but people that form that point of view and we work in a very team based approach. So you know, if they've spent 30 hours working on something and I've spent you know, two hours meeting the founder for the first time, I'm going to like want to collaborate with what they've learned and what they've seen and then I can also help them think about winning the deal and how to do the. And so we want people who are original thinkers, who have points of view and are scrappy and go out and hunt it down.
- [193:41]
A
Is there anything that jumps out on a resume?
- [193:46]
I
I mean we want to see success in that analytical rigor, but we want to see that combination of self starterism.
- [193:53]
A
Sure.
- [193:53]
I
You know, so we do like the analytical rigor. But you can get, you can get sidetracked by that because a lot of great bankers out there, VCs just so.
- [194:04]
A
Interesting because you have somebody like Andrew Reed Goldman background, then you have so many founders, you have operators, you have people anywhere, all over the place.
- [194:13]
I
Yeah. When I first got into venture, I was at a business school thing and I heard a venture capitalist speak and he's like, you've got to have been an engineer, you had to have been a company that went public and then you got to go to business school. And I was like, oh, I've done those three things.
- [194:28]
A
It's funny if he had said you.
- [194:30]
I
Could do anything or you need to be a banker.
- [194:31]
B
Sort of a non traditional background.
- [194:34]
A
Yeah, you know we make that joke. But like there really are so many backgrounds. There's no way you see more so than other than other career paths.
- [194:40]
B
What's your, what's your health Tech stack. I see you got the whoop and the apple.
- [194:44]
I
Oh, I'm Ridiculous. Yeah. I got the whoop. I love the whoop.
- [194:48]
A
Shout out Will Ahmed.
- [194:50]
I
Yeah, yeah, yeah. We should have invested in him long time ago. I love the whoop and I'm a proud customer. This is my iPhone finder.
- [194:58]
A
Okay.
- [194:59]
B
IPhone finder. Got it, got it, got it.
- [195:01]
I
And it's a watch. And then I also do the bands when you go to different workout classes and stuff.
- [195:09]
B
Nice.
- [195:10]
I
I'm a single stream device for one single thing. This is probably more sleep than you.
- [195:14]
B
Got two wrists for a reason. You were giving this advice to a friend. He was like, I love the Apple watch. I was like, that doesn't mean you can't get an rm.
- [195:20]
I
The other is I haven't done the oura ring. I don't like that form factor.
- [195:26]
B
But I hear they're just saying, I hope you let us know when you find a real Hadrian for X.
- [195:33]
I
They're out there. We've done a lot energy. Energy is a big space.
- [195:36]
A
Energy is a fascinating space.
- [195:37]
I
Great one.
- [195:38]
H
Yeah.
- [195:38]
B
Awesome. Great to meet you. Congrats.
- [195:41]
A
Thank you so much for coming by the show. We'll talk to you soon. And we have our last guest of the show. We got Ashley Vance from Core Memory. He's the founder, he's the CEO, he's the podcast host, he's the documentarian, he's an author, he's a multi hyphenate. He is a friend of our show. We were excited to announce his his launch of Core Memory a little over a year ago. We made a sportscenter type hype reel.
- [196:11]
D
Amazing.
- [196:13]
A
You said a lot of crazy things about some legacy media companies that I probably wouldn't say now, but we all had a good laugh.
- [196:18]
B
Didn't we say death now?
- [196:20]
A
Death now for Bloomberg Short the stocks. Like we were going crazy.
- [196:25]
D
Time may tell you. We'll see.
- [196:28]
A
Yes. But how are things? What's most interesting to you? What are you tracking today? You've done so many different things. Tours of Abilene. You've been tracking this AI talent war. I feel like pretty well with the Mark Chen interview and Jerry Turek as well.
- [196:42]
D
Yeah, Jerry. Kylie Robinson joined our team.
- [196:45]
A
She's killing it.
- [196:46]
D
Yeah.
- [196:46]
A
That's a huge pickup.
- [196:47]
D
What do you call her? A scoop.
- [196:50]
A
Scooping like a Baskin Robbins employee. That's what we call that. But we have a whole list of scoop related puns that we will be slowly trickling out as more scoops hit the the timeline. So I don't want to leak them all. Okay, I'll send them to you.
- [197:03]
D
Hold On. It's so cool to be here, man.
- [197:05]
A
Welcome to the place. It's amazing. Are you recording?
- [197:07]
D
We're recording.
- [197:08]
A
We're filming you. Filming us filming you.
- [197:10]
D
I'm recording on my face, all the cameras. I think I'm the first person to do a meta walk, I'm told. I love it. And. Yeah. So, well, what are we doing? Well, first of all, you're in a Quonset hut.
- [197:22]
A
Yes.
- [197:22]
D
Which is near and dear to my heart. You guys know Silicon Valley began in a Quonset hut.
- [197:27]
A
Hud, I didn't know that.
- [197:27]
B
No way.
- [197:28]
A
Tell me the story.
- [197:28]
F
Yeah.
- [197:28]
B
When we figured out how quickly you can actually build these structures, we were shocked. Yeah, extremely.
- [197:34]
D
There's that one startup that's doing like the inflatable ones from some Belarus technology. But yeah, no Quonset hud. William Shockley invents the transistor at Bell Labs. His mom lives in Palo Alto. This is like, why Silicon Valley? Silicon Valley. His mom's not doing great. She misses him. He wants to move out. So he moves to Palo Alto, sets up Shockley semiconductor lab in like 1954 maybe. And it looks exactly like this. It was on right in Mountain View, on San Antonio Road. It no longer exists.
- [198:06]
A
It's amazing because we always get like, why aren't you in San Francisco? Is this a real tech show? It's like we recreated Silicon Valley here.
- [198:13]
B
Right here, here in Hollywood.
- [198:15]
D
I saw it, I saw it.
- [198:16]
A
And it was, how is sf? Do you go to robot fights, like daily now? Is that a weekly thing? Do you have a season pass hourly?
- [198:25]
D
Yeah, it's a lot. We just went to one this Saturday. Rec had one at KHIZR Pavilions. It was kind of like their biggest one yet. We've been filming like, oh, my meta glasses died. We've been filming a documentary more or less. So kind of like from the very beginning of the robot fights all the way through. So. Yes.
- [198:44]
B
How do you think of the timeline? Is this a 10 year project? Because my expectation. I haven't been yet, but the. My expectation. Tell me if I'm wrong, is that it just sounds like the craziest, most awesome thing ever. And yet the robots today are still kind of making progress. And so the actual action in the moment, it's probably a fun place to like hang out with friends and watch, but it's not yet, like, oh, I'm sweating. This is like better than ufc.
- [199:13]
D
It's a little comical at times, but, you know, it's getting better.
- [199:17]
B
The idea is that the documentary would show over time and then.
- [199:22]
D
Well, I think we want to do this is like, this is kind of the cool thing. So we make. We do make films for Netflix, hbo, all that stuff. But I think we're going to try something different here where it's like a documentary that's living and ongoing. Yeah. So I think we're going to take what we filmed for the last six or seven months, put that out as like chapter one of the Rise of the Robot Fights and then just keep following it along, which is. I mean, we have internal, not like fights, but just the best strategy on how to release some of this stuff. But I think it's kind of cool. I think you can do different things now that we have our own distribution and kind of play with the format.
- [199:57]
A
How do you actually. How do you actually process watching robots fight? Is it like scary, Doomer? Are you actually entertained?
- [200:05]
D
It's pretty fun, man. Everybody, like, at this last fight, you could tell there were a lot of people who had never seen one before. I mean, it's the spectacle of it all. There was an element where the first round went and then a bunch of people cleared out. Because I think they were just. Once they've had their fill, it has to get better. Right. But they.
- [200:22]
B
Well, I think what they should do is do the robot. Like extreme sports. I think before you get fighting, it's like robot cliff jumping. Watching a robot jump or base jumping. Right. Watching a robot hurl itself off a cliff and then be like trying to pull a parachute. And like if whether it works or not, like, pretty cool.
- [200:42]
D
I'm with you. I do think.
- [200:43]
B
Or big wave. Big wave surfing robot.
- [200:45]
A
Big wave fighting is pretty good.
- [200:46]
D
The fight is getting like, better pretty quick and now. So, you know, when it first started, they had these little miniature robots and that was super. Are goofy because they barely hit each other and fall over. But you know, now they're getting.
- [200:56]
A
They're getting tall this year.
- [200:58]
D
In the next five months, we'll see like the 6 foot 2.
- [201:01]
B
Did you used to go to the Battlebot shows back in the day? I have some good memories there. Those things were lethal.
- [201:08]
A
Those things. Those things like just jump from 411 4. 4 to 5.
- [201:13]
D
11.
- [201:14]
A
That's pretty tall.
- [201:14]
D
Yeah. So we just filmed. It's kind of. Well, I won't tell the backstory, but we have filmed. There is a six footer in America.
- [201:21]
A
Six footer in America.
- [201:22]
D
That I think is the only six footer in America. Yeah.
- [201:25]
A
Does that make you feel the AGI more than visiting a big data Center.
- [201:30]
D
I mean, the cool thing, okay, I find this cool as like a cultural phenomenon, San Francisco sort of art meets tech kind of thing. But then I do. It resonates with me because it is this physical instantiation of AI. And even though it's not that has cutting edge of some AI solving a physics problem, maybe there is this. You do feel the AGI because there's like something to it and there's this energy. And that's what like, drew me to the story from the beginning.
- [201:57]
B
Are documentaries just like a get rich quick scheme, Break down the business model.
- [202:04]
D
Cannot count all the cash, man. I always laugh because people are like.
- [202:09]
B
Well, it sounds like, oh, I work with Netflix, I work with hbo. You sound like a, like, you sound like you're in mogul mode. But the reality is like, you have to invest years of your time and it can, you know, obviously it's a business, otherwise you wouldn't be investing in it. But break down the realities of like, what it actually takes to create a documentary, sell it, monetize it.
- [202:31]
D
It is hard. It's probably harder than ever, maybe. I mean, we went through this, the glory years of all the streamers lighting up and they couldn't get enough content. They were overpaying for everything. And so you could actually. You don't make money like a scripted project that really hits, but you could do pretty well with a documentary if you really had something good. And now it's brutal. Netflix, most of the streamers kind of cap what they're willing to pay. And it's not a very high number. It's like, call it like 2 million bucks. And so you have to get your budget under that. You're following something for could be one year, it could be six years. And to spread all that work and.
- [203:08]
B
Money over all the best. Yeah, some of the best stories. I mean, it's so hard because there's companies today where if you knew where they'd be in five years or 10 years, you'd be like, we need to have a camera on this team every single day. But then they could just peter out and it doesn't become interesting. And then you've just kind of.
- [203:24]
D
Which is what we kind of try to do. I mean, we try to place these.
- [203:27]
B
Back, but you're kind of. You're acting as like an investor, basically.
- [203:29]
D
Yeah, because like the robot project, I'll go as a reporter first and be like, oh, there's kind of something here. And this character, this person is really interesting. Let's follow it for a bit and Then we can do sort of shorter episodes. And then once you really think you're onto something, you can go all in a bit more. So we have our own money to invest in the projects that we really care about and then sometimes partner with other people.
- [203:52]
B
Have you cared at all about what's happening with Warner Brothers Discovery? Do you think that actually impact impacts the documentary market is it consolidates, more consolidation? They're going to be like, hey, it was 2 million last year. Now it's like one and a half. Is that kind of the concern?
- [204:07]
D
Yeah, I mean, continued consolidation is a real problem. Then I mean, there's this part where, like, tech companies own every major media company now. And it's a real issue for some of the stuff we want to cover because it's like, does it compete with this? Is this offensive to all the tech people? And so it really limits to some degree the scope of what you can cover.
- [204:30]
A
Yeah, I hadn't thought about that. But even if you just want to make a documentary about the Apple Vision Pro, how it was made, whatever, and it's like, if it looks damaging to Apple and then you sell it to Netflix, well, those two companies compete and then they could. Even if there's no true conflict of interest, people could be like, well, was there.
- [204:51]
D
Is Netflix going to buy some doc about Apple?
- [204:54]
A
Oh, yeah, they might not want to glaze Apple.
- [204:56]
D
Then you have. You're always after the most interesting people, right? So you've got this list of whatever the top 20, 30 tech figures that you might want to follow for a doc. And then it's like, whose alliances are they on and who hates them? Who fits in where you're just trying to make a movie and have people watch it.
- [205:15]
A
Talk about scoops and the impression importance of scoops in making a documentary that feels like they can help a lot. You also have these multiple touch points. So I could imagine you, like, interviewing someone and then being like, that would go well in a documentary. Maybe I want to hold that. How does scoops work in this?
- [205:32]
D
That's horrible. I mean, because I do books and.
- [205:34]
A
Documentaries and it's like, so you get good scoops and then you have to wait a year. I know you're sitting on some stuff.
- [205:39]
D
You're like, you have to sit. And then you just. When I see these OpenAI.
- [205:43]
B
You gotta hide your nose well. You gotta hide your nose from Kylie, too, because she's like, that's a scoop right there.
- [205:49]
A
No, no. Now you're on the same team.
- [205:51]
D
We're on the same team. We'll figure all that out. But no, I mean, it is really hard. Like sometimes you're sitting on something and you know, I remember when I did the Elon book, you know, there was this anecdote where Google almost bought Tesla and I had that like two years before the book was going to come out. You're just like praying to God, nobody, nobody happens upon this. And in the meantime, in the. Documentaries are the same way. In a perfect world, if you do manage to ride through that, then yeah, you have not only this long form piece that's revealing a lot about these people, but you've got some news with it to help. When I released that story ahead of the book on Bloomberg, that's what shot the Elon book up the Amazon charts.
- [206:31]
A
Before it came out. How do you think? I've always been struck by the fact that in the Netflix app, in the iTunes, Apple TV app, it's very hard to screen, record and share because they don't want you stealing the whole thing, which makes sense, but it also hurts clippings. Whereas if you share a story, you could screenshot it and that can go viral. With books, it's very important to pick a good excerpt and then run that in a magazine. New York mag got the first chapter of this new book and they distribute it and whatnot. I'm wondering how you're thinking about how documentary promotion might change in the future.
- [207:06]
D
I mean, it's funny because we're living in these two worlds right now. We're doing stuff on YouTube, on our channel and the doc world. And the second you go into the doc world is a lot like the publishing industry. Things get very traditional very quickly and there's a lot more reluctance to try things out. And they. Once you've signed over to Netflix, I mean, they kind of own your thing and you're a little bit at the mercy of how they want to do it. So it's not something honestly that I've thought a ton about. And I haven't seen an incredible amount of creativity yet on embracing that.
- [207:40]
A
Are there any traditional Hollywood executives that look at your YouTube experience as a feather in your cap? I'm just thinking about that Neuralink documentary that you did. Well, it was a YouTube video, went super viral and the structure of that video was amazing because it was all the great stuff about Nashley Vance, like documentary video production. But then it had a hook. It had, oh, Elon's gonna call. It had like, it opened loops. It was like also a Mr. Beast video. You know, that was the best of both. And I, and I imagine that you probably saw Matt Damon and Ben Affleck on Rogan talking about second screening and how more and more Netflix executives want you to retell the plot 25 times. But if you're coming from the YouTube world, you can say like, hey, if it's holding retention on YouTube, like, I know I can edit like that you. And you'll have similar retention. Is that interesting yet?
- [208:34]
D
Well, I mean, I think there's a massive clash going on right now. I mean, like the guys filming us who make our show, we sort of at Bloomberg, we learned how to make a TV show that was like an Emmy nominated show for way, way, way less money than Netflix or Hulu would pay for a similar show.
- [208:52]
A
This was hello World.
- [208:53]
D
That was hello World. And then obviously we're doing that at core memory. But, you know, there's this economics that I think we figured out. They work very hard is one part of it. But the second you sign up within Netflix, the budget expands. Everybody's padding. Like, you'll get line items on a budget for landlines of like $15,000. Because people are just trying to. This is how Hollywood works. It's very strange. So you have these, you've got this clash of finance from the old world and then the model of the new world. And so, you know, when I talk to more traditional Hollywood execs, some, I think are not paying as much attention maybe to YouTube as they should. But then there are some really big producers. The second we started the company, they called and they're like, dude, we want to kind of do what you're doing, or we want to be part of what you're doing and rethink how we go about things. And so, I mean, I still think YouTube, it's been around what, like 20? I still feel like this is very early days for how this is going to play out, because I think that is where you have the most flexibility and the distribution of the entire world. It still beats everything. Yeah.
- [209:59]
A
How do you think about.
- [210:01]
B
Would be nice if they bought documentaries where they're like, we'd love to buy your documentary for this creator payout.
- [210:08]
D
You floated this idea?
- [210:10]
B
No, but I think, I mean, one of the challenges of building a modern media brand, I think, like, you have the substack business you could roll out if you could potentially lean more into YouTube at some point and build out a subscription business there. And you're kind of like splitting attention, which can be tough.
- [210:28]
D
It's hard to figure out. And substack substack's been great. Our store do great. But it so far, I would say, is like, not a visual first platform. And so putting stuff behind the paywall, it's been tricky. But there has to be some way to figure this out where you are. You can't just give everything away. And that's. It's kind of fun now because we have all these different levers to play with and try to see where this goes.
- [210:51]
E
Yeah.
- [210:52]
B
How did you react to the different super bowl ads?
- [210:55]
D
Well, thank you guys for putting the Core Memory logo. I think we snuck it twice on the. Through some sort of missing.
- [211:01]
A
Oh, really?
- [211:02]
D
Yes. I think we got Tyler over there. Thank you. Thank you very much. I'm like, I was just happy that you actually.
- [211:11]
A
We snuck the ad on Fox Business yesterday.
- [211:14]
D
I saw that.
- [211:14]
A
So that ran there and then it snuck onto the billboard in. In Times Square as well. Has been there. I think we're going to the Olympics next. Everywhere you're coming with us.
- [211:24]
D
Everywhere you could see it. And I'm not just saying this because I'm in the Ultra double. You guys are just marketing geniuses. I mean, it was so smart. When I woke up on X that morning, it was just every single person was pushing it along and then. And then I did the same thing. And. No, I mean, I liked. I don't know. I kind of like the World ad. I think people are so torn on World and how they feel about it, but. But I actually like that one. Yeah. And then I. The Claude OpenAI. Yeah. I don't know.
- [211:53]
B
Wait, World Coin ran in at.
- [211:55]
D
No, no, the World. Yeah, World. I mean, it's World now, but. Yeah.
- [211:58]
A
Tools for humanity.
- [211:59]
B
I didn't even see that.
- [212:00]
A
They ran about.
- [212:01]
D
It was like, you know, are you human?
- [212:03]
A
Yeah.
- [212:04]
B
Oh, cool.
- [212:04]
D
Yeah.
- [212:05]
A
Yeah, that's. Yeah. That's somewhat of an optimistic message in a time when people are sort of AI Skeptical. So you have a little bit of wind at your back when you go into the super bowl where people are probably like this AI stuff. I don't know.
- [212:17]
B
I have a question. Can you go to China for, like, a few months?
- [212:22]
D
I'm trying to figure this out. So we want to do, like.
- [212:24]
B
I want your. I want the. I want to. I want. I want to feel like I toured China through your eyes.
- [212:30]
A
I showed you. Got me, like, 99% of the way there. Only you can take me across the finish line.
- [212:34]
D
So I appreciate you saying that. We are trying to do this. I mean, we filmed the hello World in China when I was at Bloomberg. We had some difficulties with China that made it. Made it harder to get a visa for a period of time. And so now I've been trying. I actually want to get in touch with Ishowspeed because I want to know like what the visa YouTuber First Pure Journalist visa situation is like. But yeah, no, I 100% want to go to the humanoid robot factories. I want to go to byd. I want to do all that stuff.
- [213:02]
A
Very cool. Yeah, be great.
- [213:03]
D
We're definitely going to go to India this year and shoot an episode which is already lining up. Yeah.
- [213:09]
A
Talk to me about storytelling. When you're in information capture mode, you're doing reporting, you're getting a ton of different facts and scoops. But then at some point it needs to boil it down into usually a three act structure. Do you think in the hero's journey, do you think in the eight part story circle, do you think in Act 1, Act 2, Act 3, and then you're trying to map things to that or are you just hunting around and then when you get lucky you're like, okay, the third act has happened. I'm feeling it, I'm ready to publish.
- [213:38]
D
There's always sort of an arc. I don't know if it's not always the hero's journey, but yeah, you're not wrong. I mean, a lot of the people I'm chasing are these eccentric inventor types on a quest and trying to figure something out. I usually when you do the magazine features, if it's like 5,000 words in length, those usually my first thing I think about is the character spending time with them and then, and those break down usually into actually four, five, six sections. And for each section I always think about it like a documentary or a TV show. You want something to open. You have to keep momentum for the reader because you're asking them to stick with you for a while. And so those are the bits that I always think about. So you set up the state of play in the first act or you're taking someone into some really weird world through an anecdote and then, and then, yeah, you're going on this journey where you're getting into more in more detail. I always, it's like my fatal flaw maybe I short shrift the end. I spend so much time on the beginning and then you should obsess about the ending as well. But I always kind of just get there and then figure it out on the floor.
- [214:43]
A
Well, it's really hard because like in many ways the third act of the Elon Musk story is like the SpaceX IPO. Like that's the final boss that would be. That ties it in a bow in some ways. So if you're like, well, I'm not going to wait 15 years. So we're finding a different third act. I found this with the. I did a piece on Parker Conrad and rippling. Incredible Act 1 starts Zenith or starts Zenefits. Right?
- [215:09]
D
Yeah.
- [215:10]
A
Gets fired, got revenge story, starts a second company and then it's like, okay, well, they're building, building, building. And it's like, what's the third act? They got to take the company public. Hasn't happened yet. I'm sure he'll be successful. But it doesn't tie itself in a bow with like the dramatic third act.
- [215:25]
D
It's the hardest thing about the. For the long form stuff we do, whether it's a book magazine story or a documentary, is you're doing real time reporting on tech and it's always changing so fast. And then like on the Elon book, I had to pick, you know, you just have to pick a moment where you're like, okay, this is. This. We're going to button this up. Same thing on the last book. And. And so. No, I mean, that part's really hard. But I battle with this all the time. After I finished the Elon book, for a whole bunch of reasons, I was like, I'm only writing about a dead person next time. But then I only get excited about.
- [215:58]
A
Well, the Shockley book is ready to go. You know it off the top of your head.
- [216:01]
D
That one. That one is good. There's a couple people have swiped at that one. But yeah, no, I mean, I get excited when I walk in places like this, when I walk into factories and I kind of feed off that.
- [216:10]
A
So I have.
- [216:11]
D
It's like, like I have no choice but to chase what I'm interested in. But it's hard to figure out.
- [216:17]
A
The Elon book is a biography. What is when the Heavens went on.
- [216:22]
D
Sale, which is in your lobby. I signed it.
- [216:25]
A
I bought multiple copies on Father's Day. That's how we first met. I sent him a picture, I bought a bunch.
- [216:30]
D
So we made a movie based on it called Wild, Wild Space, which is on hbo. But it's a book. It's kind of like a book, nonfiction book, tracing the underbelly of new space being born. And so we go along with a couple rocket companies, some satellite companies, but it's less Elon, less Bezos.
- [216:46]
A
Is it on an ensemble cast? Is it a tour of an industry?
- [216:49]
D
There's like four. There's four distinct sections that would for sure tell you some of the history of space and then fully bring you up to speed on the rise of commercial space. But yeah, we go with Rocket Lab, which is after SpaceX, the second most successful rocket company. Planet Labs, which change the face of satellites. Firefly is one of my favorite stories in the book. I hang out with this Ukrainian dude, we go to Ukraine, we're drinking scotch at Vandenberg Air Force Base. Down the road, all kinds of adventures. And then Astra, which is still going, God bless them, and was trying to make the smallest, cheapest rocket possible. And so I spent six years on that with Astra.
- [217:30]
A
Overnight success.
- [217:32]
D
I was there, I was with Astra when it was like four dudes in a room trying to get the engine to burn for the first time all the way up to when they flew to orbit for the first time. So I think, I mean mostly that book is meant to like immerse you in that.
- [217:45]
B
Did the moon Mars to moon pivot from SpaceX? Did that surprise you or given.
- [217:51]
D
I'm wondering if you guys. I'm still like processing this in some.
- [217:54]
B
Ways, I mean but like it didn't come out during the biography. No conversation.
- [218:00]
D
No, no. I mean Elon, even until recently is full Mars.
- [218:04]
B
And do you think it's because they're going public and you now as a public company or a soon to be public company, you can't be messaging like we're going to Mars, we're going to Mars. But then we're actually I think Elon.
- [218:20]
D
Probably could still keep messaging that because he.
- [218:24]
B
Yeah, yeah, the roadster. But yeah, ten and public markets are less excited about what you're going to do in a decade or two decades versus what you're going, what are you going to do for me right now? Take me to the moon?
- [218:34]
D
I mean, oh man, we could talk about this for a long time. The Mars thing was always part of Elon's genius, I think because it sounded completely insane to most people. And yet if you were in the space and you were young, there were a lot of people who actually wanted to go do that. And it was part of building, building this religion, this very aspirational thing that made you want to go to SpaceX, that filled you with all this passion for what was going on. Even Gwynne Shotwell, I mean she co runs the company with Elon. That was her quest, that's what she wanted to do. And so it always had this mystical overtones which is the same way with Tesla of creating this big climate change sort of revolutionizing technology. So in some ways I feel like he's come, pardon the pun, back to Earth a little bit with this. Right, because it's slightly less. I mean, you're building a colony on the freaking Moon, but it's slightly less aspirational. It's much more practical for all the reasons you lay out. I mean, clearly the US government wants to try to beat China to the moon, although I don't think we will. But that's where the US government's attention and money is, is on the moon with all the space data center stuff. I mean, all this interplay between building these layers of infrastructure. So I think he's chasing money. And what makes sense in this near.
- [219:57]
B
Term, it's more pragmatic, less sci fi.
- [220:01]
D
It made me a little sad, man. Like canceling the Model S, stopping production on that along with this Mars thing. I mean, it is as someone who is like his biographer, I mean it's a massive philosophical change and the Model S just represented. That was the moment that Tesla actually became real and electric cars became real and shocks. It sold so many more than anyone had expected. So these are really momentous things. I think Elon's really practical. I think he's all in on AI. He needs money to fund that. SpaceX is this sexy thing that people get excited about and you can use it to raise money for other things. And so I think he's just being very, very practical. And I think probably it's the pressure and the immediacy of this AI race that might be making him make statements and decisions that normally he could put off.
- [220:58]
A
I think, yeah, that makes a ton of sense. Time to plant the bomb. We're getting out of here. You can close the show out with us. I want to hit the gong. Two best selling books. Mom has been planted. Leave us. Five stars on Apple, podcasts and Spotify. Go to tppn.com for our newsletter. Go to corememory.com for your newsletter. For your substack YouTube channel. Follow Ashley on X YouTube podcasts everywhere. Go buy the books. Go buy the book.
- [221:32]
B
Buy them all. Buy 100 copies. Buy yeah.
- [221:34]
D
Can't buy.
- [221:35]
A
We will be back tomorrow at 11aM Goodbye. Nice work, Brett.
- [221:41]
C
Nice work. I'll see you on the next one.