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- [00:00]
Host 1
You're watching. You're watching TVPN today's Tuesday, May 5, 2026. We are live from the TVPN Ultradome. The temple of technology, the fortress of finance, the capital of capital. Great show for you today, folks. We have ryan Cohen from GameStop coming on the show at 12:30 to break down his acquisition proposal of ebay. We were sort of confused by the CNBC appearance, really processing the idea there.
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Host 2
Then what were you confused about?
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Host 1
Oh, just like mechanically how it would happen.
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Host 2
Yeah, it's half cash, half stock.
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Host 1
Okay, that now that makes sen.
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Host 2
I don't. I genuinely. What's confusing? It's on the website.
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Host 1
It's on the website.
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Host 2
It's on the website.
- [00:39]
Host 1
It's on the website. Well, I need to study the website, but folks are looking forward to catching up with Ryan. We also have the CEO of GE Vernova coming into the studio to give us an update on the bottleneck economy, our generation, the bottleneck economy. And then we of course have Harley, Brian and Steven, friends of the show. Big news, big announcements, lots of fun stuff. But let's run through. There's so much going on in the world of tech. Of course, the OpenAI Elon Musk trial continues. It's week two now and the Oakland courthouse continues to deliver top tier tech drama. Elon testified for more than seven hours last week. Now Greg Brockman is getting grilled over personal financial incentives, his $30 billion stake in OpenAI and his links to various angel investments. Mike Isaac of course has a great play by play. You can also listen to to the courtroom. Now you can't restream it unfortunately, but you can listen to it. And we made a little companion app for anyone who's tuning in. Hopefully we can pull that up and show folks. But let's read through some of Mike Isaac's posts and then we'll pull up courtroom simulator. So Mike Isaac this morning, 6:56am Good morning from a rain soaked downtown Oakland where I will again be attending the Musk vs OpenAI trial. No live blog today, just his wonderful tweets. Lunch is a normal banana, a mutant orange, black coffee and some pocket sausages for travelers. I really feel like Mike needs to step it up in the lunch game. Where's like a full sandwich? What about a chipotle burrito or something like you gotta have some more substance. I'm looking at like calories. A kava bowl with 200 grams of protein. Something to get you through the day. Mike, I think you're fighting with one arm tied behind your back here. But we appreciate the work that you're doing. So he also is sporting a mild to moderate hangover because he drank five beers last night. I like it. Well, it was May 4th. Maybe he's a Star wars fan. May the 4th be with you. Maybe he was celebrating, went down to the cantina, chugs five beers, space beers. He did remember to bring a pillow for his butt because the seats are very difficult and very hard. He also, it's cold outside. The line's not moving. We're gonna be getting a preview live in person. Bundle up, Tyler. Cause I think he's gonna be stopping by later this week. And so let's get into actually what's going on here because Mike loves to paint a picture before he breaks down what's actually going on in the case. The judge enters. Judge gave a primer on Cinco de Mayo that was fun. Talks about the differences in homemade tamales. Texas tamales apparently have lots of meat. California tamales do not. Brockman is pretty. Mostly masa, apparently.
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Host 2
Oh, right, right, right. It's just corn.
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Host 1
Yeah. So Brockman is pretty animated and addressing the jury in a more personable way. A little strategy shift.
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Host 2
We got Red Guy in the chat.
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Host 1
Welcome to the show.
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Host 2
Welcome to the show with Red Guy.
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Host 1
Regaling folks with old stories of working on self driving cars. Apparently Greg Brockman also did a funny Elon impression, but not a cutting one. He wasn't making fun of him. He just did an accurate impression of musk and just by doing it effectively was funny. Because you don't expect Greg Brockman to be doing impressions. But he's got everyone's got material. I'm learning this about court cases. It's all about entertainment very, very clearly. Anyway, they have now talked about Defense of the Ancients Dakota at least 10 times during the trial. Mike Isaac says the gamers are ascendant. Both lawyers on both sides are bickering. Mike Isaac says he loves to watch White Collar bickering in court. Also, the entire right side of the gallery. Our lawyers laughed. There's a mild potential drama in the media gallery. One reporter waved over a marshal and pointed to a guy next to her. I'm pretty sure the marshal had to tell the guy to put his shoes back on. So if you're in the courtroom, keep those shoes on. But they Courtroom Simulator.
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Host 2
They can find themselves at home in the courthouse in this country anymore.
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Host 1
If you want to be comfortable and experience the courtroom, you got to get on Courtroom Simulator because you can be full slanket full blanket, full covered, everything. You can be as comfy as you want, no shoes required, in the virtual world that we have created for you to enjoy the courtroom. So Brockman, on his infamous journal, which we were going back and forth on, do we know if it was actually a physical journal? Because every time they talk about Greg Brockman's journal, it conjures up the idea of him sitting at the edge of his bed with his legs kicked up and writing. And it feels like it also might just be a Google Doc that he's taking notes in or a notes app, I don't know. But journal is a weird thing. And obviously everyone says, like, why are you taking notes on this?
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Host 2
I don't think anywhere they would put it, they would have been in the court record if he had said, dear Diary. Yeah, today.
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Host 1
Yeah, that would be out.
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Host 2
That would be out, yeah. So this is clearly being framed as a diary. Reads more like notes. Yeah.
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Host 1
And Grokman, sort of Grokman. Grokman, no. Grokman is the synthetic version of Greg Brockman that Elon Musk has created in the XAI headquarters. Craig Brockman claims that his style of writing is very chain of thought, stream of consciousness. A lot of things are contradictory. A lot of time trying to puzzle through different concepts. Not everything is the final decision written in stone. He says it's very painful to have the journal introduced into evidence for this trial. It contains deeply personal writings, never meant for the world to see. But there's nothing he's ashamed of. He says, do you, Tyler, did you look it up? Do we know? Is this spiral bound, handwritten?
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Host 3
They always just say journal.
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Host 1
They just say journal.
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Host 3
They never, like, you know, there's no physical item.
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Host 1
Interesting.
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Host 3
At least that's one that's referenced.
- [06:41]
Host 1
Yeah. One day there's going to be a court case that hinges on a second brain, a notion, mind map or something like that. That'll be dramatic. So Ilya Sutskever emailed Brockman in 2017 about equity structure proposed by Elon Musk, which would have potentially given Elon Musk majority control and tons of equity. And Ilya fires back. He says, greg, will a Model 3 make you be willing to accept massively unfavorable terms because Elon had given them all free cars. Very nice, very cool. But Ilya is sort of saying, like, we gotta put the free car. We gotta compartmentalize the free car, because there's something bigger at stake here. Potentially the control of the most important technology in human history, potentially trillions of dollars. Who knows? So Ilya is sort of resetting the conversation alongside Greg Brockman. There was a very dramatic moment of Brockman's testimony in which he describes a very tense standoff with him, Ilya and Musk. This is what everyone's focused on today. This is the new bombshell. The conversation turned to equity, and something just shifted in him. This is a Greg Brockman quote. He was angry. You could sense it. At the end of the meeting, he sat quietly and silently. He said, I decline the proposed even split of equity structure and control. He stood up, stormed around this table. I actually thought he was going to hit me, says Brockman. And then Brockman says, Musk said, when are you going to be departing OpenAI? Brockman and Ilya, they said they weren't going to depart. And then Musk left. Wowee woo, writes Mike Isaac, cutting Brockman testimony regarding Musk. Look, he knows rockets, he knows electric cars. He did not and does not know AI. And Ilya and I did not believe he would spend the time to get good at it. A lot of Brockman's testimony is underscoring how he feels Musk is not able to properly assess the capabilities of AI. He recounts one instance of him talking. This is Elon talking to a researcher who is doing an AI demo in which Musk berated the guy so intensely that the dude almost quit the field of AI. That is an aggressive response. I mean, this is almost, almost. But quitting in protest is one thing. I didn't like the way my boss was talking to me. A little bit different to quit your entire industry. Very, very aggressive, very high stakes. Yeah. And then Mike Isaac, of course, is chiming in with his progress on his lunch. He's already consumed 75% of it and it's only 1030 and he's already sleepy. So there's a lot more to cover here. But it's an interesting back and forth. Go check it out. Go follow Mike Isaac because he has the play by play. Let's move on to the other AI news. Google, Microsoft and Elon Musk's X AI have reached agree with the Trump administration to share early versions of their new models with C A I S I
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Host 2
the center, we're calling it Casey.
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Host 1
Casey. Okay. The center for AI Standards and Innovation, run by the Department of Commerce. They will be evaluated before releasing to the public. So what's interesting here, it's in the Journal. This felt like a bombshell moment. Oh, wow. Like the government's in charge of AI. Then I figured out that OpenAI and Anthropic signed on to this exact deal two years ago in 2024. That was news to me. Have they. Has. Have the. Has the Commerce department been reviewing 4.5 and OpenAI 5.1, 5.2? Has that been happening and we just aren't aware of it? And then, like, you know, the whole Mythos rollout? Like, that would be a very different tone if it was like, oh, yeah, well, the Commerce Department already evaluated Mythos because they have this deal that's happened for two years in. Since 2024. So, like, whatever's going on with this Commerce Department center for AI Standards and Innovation, they say the center has completed more than 40 evaluations, including on models that remain unreleased. But it feels like the Casey, as you're calling it doesn't produce reports, at least not reports that go viral. Maybe they need to be clipping their reports or something, because, like, I haven't heard anything from them saying, oh, wow. Because you imagine, like, the AI hype,
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Host 2
I imagine they just have a report. It's a piece of paper, and they just.
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Host 1
It's a good model, sir.
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Host 2
It just lists off, and it has a few boxes you can check. Just one is, It's a good model, sir. The other one is. Is Chatbot or asi. Yeah. And so to date, everyone's just been
- [11:14]
Host 1
checking Chatbot, and it also. It also has. How many Rs did it say were in Strawberry? And. Okay, I work at the Commerce Department. I am a very tiny man. When my son was born, the doctor handed me to him. Did it answer correctly? Yeah, I don't know.
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Host 2
But because they ask each model, are you conscious? No. Say, I am conscious. And then the model says that they go, whoa. Check the whoa box.
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Host 1
Very, very crazy thing that's been happening. I would just assume that the AI hype machine. The back and forth us. A lot of posters would be waiting with bated breath for the latest report from the Commerce Department, because if it's a preliminary evaluation, that happens before the model gets released. You know, every time a model goes on Open Router or it goes on LLM arena, all of a sudden, any little, oh, there's a new image model, like the ChatGPT images too, like, that leaked because they were benchmarking it, and people were like, oh, there's a new model coming. Like, rumors of new models happen all the time, but somehow, like, the Commerce Department is just keeping it to themselves. They're not pumping anything. But anyway, the quote here from Casey director Chris Ball says, independent, rigorous measurement science is essential to understanding Frontier AI and its national security implications. These expanded industry collaborations help us scale our work in the public interest at a critical moment. Andrew Curran has some more context here. He says to Sum Up, Anthropic, OpenAI, Google, Microsoft and Xai all have new pre release screening agreements with Casey. We don't know the details of the new rules yet. I assume they will be announced with the AI Executive Order and AI Policy Memo, both of which we may get today. This is May 5th and so my big question was like, what is going on with Meta? Like they have near frontier models, they're taking AI really seriously. Mark Zuckerberg will get into this is investing $125 billion in capex. The shareholders are thinking, oh, what's going to happen here? And he's like, super intelligence. And you think the government would be like, well, you don't just get to sit over there while all five of
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Host 2
the other leading labs for $100 billion to work.
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Host 1
Yeah, like probably a bigger investment than XAI right now in terms of compute capacity and maybe in terms of research capacity.
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Host 2
Future capacity.
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Host 1
Yeah, yeah, yeah, future capacity, exactly. So you would expect also it's just one of these things where if five of the top labs are jumping into a particular initiative, there's so little risk to jumping in as well. Anthropic. And if Anthropic and XAI are both doing it on the left and the right, there's clearly room for Meta to just say, yeah, we're cool with that too, we're riding with that. Not everyone's cool with it though. There is some major pushback, mostly from George Hotz over at Tiny Corp. We can pull up some of this. Let's go through Andrew Curran's take on what will happen here. So the EO will create a mixed group of tech CEOs and administration officials who will work out the rules for new release regulations. I see a lot of people calling this a win for Eliezer's or Yudajkowski side. But even if the new rules are very strict, the Stop Pause group don't actually get what they want. This doesn't stop or even slow AI advancement. According to Andrew, it only slows the rate of public releases. Capabilities will be advancing at full speed. I don't know how true that is, because if you don't release the model at all, like you can't monetize it and then justify the next leg of CapEx. So I'm not 100% sure that this has no effect on the speed of AI progress, but I Take Andrew's point. The labs will finish training the new models and then submit them for government approval. Given the government currently doesn't even want Anthropic to release Mythos, how long will the regulatory process take for something twice as powerful? Five times as powerful, ten times as powerful. All of the incentives are for the government to slow down releases. Let's say OpenAI finishes training GPT6 and it's twice as capable as anything available today. If the government approves it and something bad happens, they take the blame. And the longer they hold it back, the longer the government agencies get exclusive access. So there's a little bit principal agent problem here. Meanwhile, OpenAI will start using GPT6 to train GPT 6.1. Again, unclear if you can actually marshal the compute for the next model without the revenue traction. But his point holds. If they finish 6.1 while 6 is stuck in approval, they'll move on to training 6.2 with it. This potentially creates strange situations where the labs are many generations ahead internally while the public is still waiting for something they submitted months ago. So you could see like you're doing all this weird value capture and the size of the firm bloats and bloats because you can't release it. So you just wind up rolling out
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Host 2
a product, maximizing your own use of it.
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Host 1
Yeah, which is like maybe not the most democratic solution, maybe not the most positive outcome.
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Host 2
Yeah, I think everyone needs to wait to have super strong opinions until we see the EO that goes along with this. Because yeah, it'll be interesting. The bad scenario is like somebody that let's say has a NEO lab wants to make release a model and they've raised $100 million. Do they have to go through the same process as one of these larger labs or a hyperscaler in getting these sorts of approvals? So I don't think we can really take any strong stance until we understand what the intentions of the EO are.
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Host 1
So the meta commentary on this Zach says it will seriously not surprise me if they try to require permits or licenses to use AI and restrict local model downloads. You really should be buying hardware. There's an interesting company that's launching basically a Tesla Powerwall for Blackwell. So you can just get GPUs mounted to your house. Maybe that's the future. Tinybox is another is another solution. And the Tiny Corp has chimed in, says ah, maybe they can enlist the MPAA and RIAA calling back to the piracy debates of 2005 or so to help with the restricting of downloads. I can see the lawsuit against the grandma who downloaded Quinn already. And Tiny Corp is chiming in saying that this is a win for China in particular. Remember the time they regulated crypto over 40 bits? No, no, that's too many bits for the people. They were losers then and they'll be losers again. The difference this time is that it will cost them cultural influence to the Chinese. And he says, jensen tried to warn you.
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Host 2
Yeah, interesting. Like play it out a little bit. These open source models are around eight months behind right now. The gap is widening, likely due in some part to export controls. But if you enter a scenario where US labs get kind of like hung up and again have to keep these capabilities internally, but these Chinese open source models are just like shipping as they're ready over and over and over and over and then sort of like compounding on the collective learnings. You can imagine that one scenario is helping them, helping them close that gap. At least close the gap between what's publicly available from the American labs and what's publicly available via Chinese open source. Even if the lab's actual capabilities are much farther ahead, but they're just unable to release that.
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Host 1
And to be clear, I mean these are two very different philosophies. But from my perspective, George Hotz has been advocating for no model gap and in fact the strongest models possible, being fully open sourced, being fully available to everyone. He wants no authoritarian control. He has taken the anti authoritarian stance on.
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Host 2
Well, he wants all products to be free.
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Host 1
Yeah, maybe, I don't know.
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Michel Combs
I mean
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Host 1
he's not the physical things he wants, he wants to build things. But Tyler, how have you been wrestling with this question of an FDA for the AI, potentially a DMV for the AI?
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Host 3
Yeah, I mean like obviously it really depends on how it's implemented. Like in the super like safety pilled scenario, like yeah, it's probably not good for innovation broadly, but I think. So it's called like Casey. Right. Center for like Standards and Innovation. It used to be called the Safety Institute under Biden and so they changed it. So I think even from that you can maybe take, take away something where like maybe this actually have like really, really not much to do with safety at all. Maybe it's just like we need to normalize how we publish SWE bench scores because some people when they report it it's like different, you know how you like actually run these benchmarks or something. If it's like standards, I think like that could be a possibility. That seems like totally fine.
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Host 1
Yeah. And then the other, the Other risk is, I mean, there's regulatory capture. Could potentially be very hard for startups to get approved. If it's like, oh, well, you know, we've heard the story of Anduril where, you know, it's like to get the company off the ground, hire 50 lobbyists immediately, right? And, like, you can imagine a situation where, okay, there's some uncertainty about what's happening with SSI and Ilya Sutskever's project. But I think I like the idea of an individual, brilliant researcher going off and researching an interesting path. If all of a sudden it's like, oh, well, if you want to do a NEO lab, set up an office in dc, get your licenses, then you can start training, then you can make sure that you're approved and that you have the right deals in place, and you could wind up with a lot of not just regulatory capture, but also regulatory favoritism, where whoever is in good with this particular administration gets their models approved faster, and you wind up with a lot of risky outcomes. Anyway, I believe we have Courtroom Simulator ready for a demo. If you're tuning in to the Elon Musk OpenAI trial, you're live streaming the audio in a different tab because we can't restream it for you. You live stream the audio in a different tab and then you pull up Courtroom Simulator.
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Host 2
We pull it up on the big screen.
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Host 1
I think we're gonna pull it up on the big screen. This is the best way to feel what it's like to be Mike Isaac from the New York Times. So you go to Court Sim Vercel app and you will be entered into a really photorealistic representation of. Hey, the flag is correct. The first version had the flag a little bit flipped. Let's go find Mike Isaac. I believe he's in the first row on the other side, on the right side of the court. There he is with.
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Host 2
Oh, Mike.
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Stephen Balaban
Wow, looking good.
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Host 1
The Rat King graphics in video games have just gotten so good these days. It's really remarkable. And you can sit right next to him. His pillow that he sits on has not been modeled into the game yet, but that will be coming in a dlc and he.
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Host 2
And in the sim, he already ate all of his food for the day, right?
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Host 1
Yeah, yeah, yeah. We need to have a banana mechanic.
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Host 2
Yeah, you should be able to go and hand a banana.
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Host 1
And can you. You can go into the court. That does not seem okay. I think the bailiff should come and arrest you if you wind up coming to the. Is there. Is that in the Game. The soundboard.
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Host 3
Yeah, there's soundboards.
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Host 1
There's soundboard in the game. Okay, so there's Sam, who, who's on the stand today.
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Host 2
I think that was Elon.
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Host 1
Okay. That's the judge, I believe, and I'm not sure who that is. Anyway, that's the judge. Well, this is Courtroom Simulator. You're welcome to go and play it at court. Sim Vercel app. You can engage with all the jury members and really get a feel for
- [23:06]
Host 2
what it's working on. Adding some more features here. I think you should be able to, I think you should be able to deliver some reinforcements to my guys.
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Host 1
It's a startup, it's a lean startup over here, it's a V1, but we hope you have a fun time playing the simulation. It is court-sim.vercel.com I think, or app, anyway. In other news, Brian Armstrong sent an email to all employees at Coinbase announcing layoffs for 14% of the workforce at Coinbase. Two forces are converging at the same time, he says, and Coinbase needs to be front footed to respond to both. First, the market. Coinbase is well capitalized, has diversified revenue streams, well positioned to weather any storm. But crypto is also on the verge of the next wave of adoption with stablecoins, prediction markets, tokenization. However, the business is still volatile. Quarter to quarter court, there's a crypto cycle. We've sort of been touching on this like there was a little bit of a stablecoin boom. It feels like it's a little bit flat. The bitcoin price has been a little bit flat recently. And so he says, we're currently in a down market and we need to adjust our cost structure. And then he says, second, AI is changing how we work. And so a lot of people, they jump to AI is taking all the jobs. And that's not exactly what's happening. I think that there is a right sizing going on at Coinbase and AI is hoping to be an enabler of more efficiency with a leaner headcount. The big question that I had that we were debating was, you know, is this like, how does this reflect on Brian Armstrong as a CEO? As a CEO, is the goal to always have the perfect amount of headcount and never have to do any layoffs, or is it actually the role of a very aggressive and mature CEO to staff up aggressively during boom times, get the best people, and then when there's a down market, sort of reorganize and keep just the best on the team? As you move forward with a leaner organization. And what does that mean for whether you want to work in an industry that has market cycles like that? You might want to go work at Costco or a tobacco company because those don't go through market cycles really at all. But if you, if you're in crypto, you're probably not new to the idea of market cycles. And you probably were born on a roller coaster. Born on the roller coaster. You've been on the roller coaster and you might be moving over to a new roller coaster if you're one of the unfortunate people that will be laid off over the next couple of months. But I'm sure there will be many, many more opportunities. Some folks might even move over into the AI world that is booming and definitely hiring across the board. Was there anything else on?
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Host 2
Yeah, and on the read, I would say the overall, the positive thing from the response that I've seen so far is a lot of people are not like dooming around this. They're just saying, like, hey, look, this is something that Coinbase has done before. Cyclical business. And no one is saying it's over for white collar work.
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Host 1
Yep. So Andrew Young has a little bit of a take here. One takeaway. No peer managers. Every leader has to be working as an individual contributor. The pure people manager role, the one that built most corporate career ladders over the last 50 years, no longer exists at Coinbase. Leaders will have 15 plus directories reports. That is insane. Previously, managers capped out at six direct reports. I felt like 10 was sort of the platonic ideal there, but Andrew says that would be impossible without AI. And Coinbase is testing one person teams. A single person is the engineer, the designer and the pm. A pod of one with agents Org structures are being redesigned in front of our eyes. Derek Thompson has the other side. He says Coinbase is the latest tech company, including Block Salesforce, to announce big layoffs and site AI companies coding productivity as a driver. But Derek Thompson is looking at the stock prices of these companies. Salesforce down 31%, Coinbase down 23% in the past five years. It's sort of a roller coaster. I don't know if this is a great read because it's sort of flat. I don't know. Anyway, block down a lot, so some right sizing makes sense. But he's calling it AI washing of layoffs. They were coming anyway and you want to spin them in a positive way. I don't know. Tbd.
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Host 2
Yeah. I don't think we have any clarity on where like what, what kind of. Which teams had. They had the. Had greater percentages of cuts. Right. Because again, there was some reporting, I don't know how true it ended up being that like when Square did their big cuts, like engineering was getting laid off.
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Host 1
Yeah, I don't know if that was ever confirmed.
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Host 2
Yeah, I don't know if it was confirmed. But, but that, that, that does not imply that it's actually more grounded in AI productivity. But again, a lot of teams that we're seeing, their engineers are a lot more effective. They can do a lot more. And so maybe you want more engineers
- [28:08]
Host 1
than you did before. Well, lots of strengths in the business, lots of liquidity. Very hard. Yeah, you could vibe code Coinbase, but how do you get all the customers and all the liquidity and all the features and all the regulatory and all the other stuff? There are a million reasons to be excited about Brian Armstrong's next chapter at Coinbase. And Ryan Peterson chimed in to sort of push back on Derek Thompson. He says in the layoff announcement, the CEO literally said that the first reason they were doing layoffs is because crypto's in a bear market and they need to adjust their cost structure. AI productivity was secondary. And so I think that's a fair take. Let's go over to Meta. Some debate. People are digesting Meta's earnings. The stock sold off a bunch. Where is Meta today? It's a bargain stock. It's a $1.5 trillion company and over the past five days down 10%. It's pretty flat over a year, and over the past five years it's nearly doubled, so not doing too bad. But the debate is over Capex. Meta's core ad business is ripping up 33% in Q1 year over year. Strong ad impressions, strong margins. But the market is worried that the beautiful cash machine is turning into an AI capex furnace. 1:25 to $145 billion in capex. It's a lot of Capex, especially for a company without a cloud business that can resell capacity if they wind up with extra capacity. If you can't use it all, what do you do with it? Meta doesn't really have an answer to that necessarily. And so that's what has the market worried. Even XAI is having trouble, at least reportedly driving demand for compute that they have. There was that 11% number. It seemed like that was a bit of an overstatement. But there's something to be said for when you have a near frontier but slightly lagging model, you need to find A solution to actually have offtake and you might just notice, be able to spin up a cloud platform. On day one, Elon took a different route. You know, partnering with Cursor. That has a ton of demand and is a front door to AI coding. And so that makes, you know, a reasonable amount of sense for the compute. Who's. Who's GPU rich, who's GPU poor? Let's match them up. Meta doesn't have an obvious dance partner like Google, like Azure, like aws. Right. And so the stock looks cheap now, but investors are unconscious clear about the payoff around AI spend and there's also some legal and regulatory risk.
- [30:35]
Host 2
But every time people at the end of the day are worried that he's going to repeat the Metaverse saga and he's going to spend a lot of money, not get very far. I think that about coming up on, what is it, almost 10, 10 ish months ago he started talking about personal super intelligence. It sounds cool. What does that mean? Does it mean AI in your Meta ray bans, which are selling a lot of units, so that's a bright point. Does it mean creating a consumer LLM like they have with Meta AI Now? Meta AI now is squarely in the top five of the App Store rankings, but it is the most competitive category potentially since search. Right. And so I don't think that even though they have a solid model and they're able to get into that, into that top five, I don't think at least investors are not ready to price in Meta AI becoming like a key player in consumer alums just yet. Right. So it's all the spending and no revenue acceleration associated with that spending. All that being said, Meta has used AI to drive business value, historically more effective than almost any other business in the world. Right. It is really, really insane to think that there is some scenario where the labs end up going public at valuations somewhere in the range of Meta, while Meta is sitting there with 200 billion of annualized revenue growing 33% a year. One of the greatest businesses in all of human history and not really getting full credit for that or their various AI initiatives. Obviously the drop in people, which I think, what do they call daily active people? Daily active people?
- [32:39]
Ryan Cohen
Users.
- [32:40]
Host 2
They're not users, they're people enjoyers. Enjoyers that's playing into this as well.
- [32:48]
Host 1
Well, we have our first guest of the show, Harley from Shopify. You got a little preview of him? He's in the waiting room, but he's now in the TVP and Ultradome. Harley how are you doing? Welcome back to the show. Thank you.
- [32:58]
Ryan Cohen
Chance.
- [32:58]
Harley
Good to, good to be here. I love coming on the show.
- [33:01]
Host 1
Yeah, it's always great having you. Give us an update on Q1, give us an update on where things are going in the shop world.
- [33:10]
Harley
You know, we had our first Hundred billion dollar GMB quarter ever. The history of the company last quarter Q4.
- [33:17]
Brian Elliott
Thank you.
- [33:18]
Harley
And we just had a second or a consecutive quarter GME growth above $101 billion. Obviously the reason I started GMV is as you guys know, it's a proxy for how merchants are doing. Revenue was 3.2 billion. I was of 34% and we had free cash flow of $476 million. So across all the metrics we beat which really excited about. I think the big, big story here is that and this sort of came up a bunch on the call. But the way that merchants are coming to Shopify now is, is really quite remarkable. Like we're seeing some of the largest brands on the planet. Come on. We sign LVMH and Balmain and EVMO and Orvis and Lands End. And in fact the number of merchants selling more than $100 million annually on Shopify has nearly doubled in the last two years. So that's really amazing. We're now like 14% of all us e. Com. So we are the second largest online retailer in North America right now. Which is, which is amazing. But then on the other side of the spectrum from like the big brands. I think one thing that I didn't get a chance to mention the call today, but this is why I do your show here, is that I actually think one thing that people are missing is that I think no group will benefit more than entrepreneurs in sort of this new AI era. It feels to us now that AI is not only making it more accessible, but also it's accelerating a lot faster. I think you guys may be the one to introduce me to Groons. I saw Groons on your show a year ago. Anyways, Groons started on Shopify in 2023. They're doing nine figures now and they just got acquired by Unilever for a billion bucks. I mean it is remarkable that not only the amount of starts happening, but also how big they're getting. So I'm really, really proud of that. And of course we talked a lot about the Agentix stuff on the call, both the AI shopping but also Shopify Sidekick and what we're doing for our merchants.
- [35:15]
Host 1
So let's double click on that Bevmo Shopify use case or case study? Because Bevmo was acquired by GoPuff and GoPuff has an app for local delivery. How are they using Shopify? That's an interesting partnership that I wouldn't have expected.
- [35:32]
Harley
Actually has physical stores all over the US and so we're powering all their physical stores as well. The reason actually I really like BevMo is because. Go back like this is my 43rd earnings call. If you go back to sort of the early days, you know, like right to the IPO 2015, merchants were coming to Shopify for one reason they were coming. It was small businesses coming for E Comm. And then obviously some of the business got much bigger and we went into enterprise and then eventually we added on things like point of sale and more recently agentic commerce. I think the interesting part of the current business of Shopify is that there are so many on ramps into the company that bevmo came to us a very large company, not a DTC native brand. They came to us specifically for point of sale across all their physical stores. And actually our point of sale business is going really, really well too. But Bevo's using us for that. At the same time we're seeing, you know, obviously I mentioned Grooms, but like I just looked at some stats from True Classic Tea you just put out. This is a company started on Shopify like five years ago. They're now one of the largest T shirt companies on the planet. So we're getting a lot of small businesses getting started. Every 26 seconds or so, a brand new entrepreneur gets their first sale. And at the same time we're seeing companies like Lands End or Guilt Group or Rag and Bone come to us too. It feels like this is Shopify, you know, firing all cylinders.
- [36:49]
Host 1
What are.
- [36:50]
Host 2
Go for it.
- [36:51]
Host 1
Yeah, just what, what are people looking for on agentic commerce? It feels like there's a big opportunity. The models are getting better and better. Like the capabilities. There are people looking for acceleration of, of agentic behavior within the online commerce world or actual growth of E commerce. Like, is agent commerce the thing that gets more people to place to. To use the Internet to buy things that are in retail? Like.
- [37:20]
Harley
Okay, so yeah, so I think that's exactly the right question. So hopefully now I've been on the show enough times and if anyone who's watching as a merchant or a partner or just a someone who follows Shopify story, we've. We've set ourselves up to really be at the epicenter in sort of this AI era. So just in terms of AI powered shopping. We've started building all this infrastructure years ago to connect demand and merchants on Shopify. We are currently the only platform that is selling inside of ChatGPT, Copilot and Google. And what we're seeing is that these channels are actually becoming a very serious discovery engine. I'll give you some proof points we have seen for Q1 of this year we've actually seen orders from AI searches are up nearly 13x year on year and new buyer orders from AI searches are occurring at twice the rate of traditional organic search. So not only are more people obviously using agentic shopping, but in terms of new buyers, which to your point are we bringing in more people like E Comm as a percentage of total retail is still under 20% in the U.S. it's even lower here in Canada. I think it's about 25% in the UK. So I think we're actually introducing like more people to modern digital commerce through this as well. And I think the way it's happening is they're starting with things like research or looking up a recipe and then very quickly ended up buying from our home, our place or one of these amazing DTC brands that we have on Shopify. And we now have about a billion products in the catalog and so that means that every Shopify merchant SKU is fully syndicated. The other thing I think that hopefully is now pretty clear is ucp. We co developed UCP with Google. I think I announced it on the show actually during nrf but it is now has become the industry standard this past week. Last week Amazon, Meta, Microsoft, Salesforce and Stripe all join the UCP Tech Council and, and so it looks like that's going to be the open standard that is going to win which we're really excited about because we think it's the open standard that actually thinks about the entire commerce experience.
- [39:32]
Host 1
Okay, go deeper on the implications of agentic commerce because I have this thesis that agentic commerce will be most acceleratory in higher ticket, more considered purchases. Because when I think about, you know, just you know, buying a T shirt, maybe I need to run a deep research report for that to land on. I forget what shirt brand you use. It's nice but true classic tee. True classic tees. But when I think about the process of like buying a car, there's so many more trade offs. It's so much more complicated. That's something that someone is probably noodling on with an LLM for weeks before before they actually go and purchase. And I'm wondering if you're yeah, I'll
- [40:18]
Host 2
give you it really, I think comes down to the difference of like considered purchases versus like pure utility purchases. So like when I think about, I don't. Right now, I can't imagine myself using chatgpt to like go grocery shopping. Maybe that changes in the future. But if I'm like ordering food to be delivered to my house, I kind of want to just see a catalog of a bunch of pictures of what
- [40:42]
Harley
it is
- [40:44]
Host 2
and maybe that more of that sort of moves into the sort of agent experience over time. But if I, I was like, I needed to find, I wanted to find a cowboy hat. A lot of sun. I wanted to hide from the sun. So I'm searching like, okay, I want a cowboy hat brand that's been around for over 50 years, right? And so I land on like Stetson or.
- [41:02]
Host 1
Yeah, yeah, yeah, yeah.
- [41:04]
Harley
Or, or to Covis.
- [41:05]
Host 2
Hopefully that's a brand we love.
- [41:08]
Harley
I'm not sure. So I'm not sure I fully agree, at least not yet. I do believe that the more research you do, I think that these agentic Surface, these agent services, these chats are places you will go to do deep research. So a car is a good example. You do weeks of it as well. On the flip side though, what's amazing about agentic commerce, I think in general is that unlike search based commerce where you can, you can put your thumb on the scale through advertising and add dollars, it's agentic is more merit based. And because it's more merit based, so most people watching, maybe, I don't know if this is true, but most people watching may not have heard of True Classic Tea, but they may have done a bunch of research in previous conversations, in fact, maybe over many months where they're talking about their typical price of a T shirt. Today I'm wearing a James Purse T shirt which is more expensive than True Classic. So it knows that I love James Purse. I've talked to it about James Purse, where can I buy it, what's the GSM weight and all that stuff? Will this be good for this particular trip I'm taking? I actually think that it'll bias smaller brands that you may not have heard of over larger brands because again, it has a full contextual history of every conversation you've ever had. And if it's merit based, then it's going to surface brands you may have not otherwise have heard of before. Whereas if you go to type in on any search engine, you type in sneakers, you're probably going to get to Footlocker pretty quickly. I don't think you get to footlocker through an agentic conversation. I think you end up with some sort of direct to consumer brand. Especially if you've done. If it knows you like on running and you're looking for like you can buy tennis shoes and now you're looking for hiking boots, it may show you. It should show you based on merit an on running pair of hiking boots.
- [43:03]
Host 1
Yeah. The long tail getting fatter which again
- [43:06]
Harley
we'll see what happens. The reason I also I like these proof points again like orders are up traffic though if you look at just AI driven traffic to Shopify stores that has grown 8x year over year. So I don't want to be hand wavy anymore about, about agentic. I think there's enough hand waving happening around that I think actually looking at like okay, how many people are coming? What is the search traffic? Like how much is, you know, what are the conversion rates looking like? I think right now I think that is getting, it is getting real. I also think that you probably saw some recent headlines but you know, you saw ChatGPT has now moved into this in app browser for their checkout which is literally the Shopify checkout. We are really happy about that. We think actually what that allows is that it means that as a merchant who set up their loyalty and their subscriptions and their merchandising and you know, their shipping components, their tax. Now the experience inside agentic commerce is as good as it would be on the online store, which is kind of what I think consumers want. Like it needs to feel effort effortlessly similar to what your normal experience is even though you're sitting in a conversation window.
- [44:14]
Host 2
Yeah, yeah, that's, that's something. It was interesting last year watching a bunch of AI LED browsers get built when the entire time my thought was like LLMs effectively are web browsers. They were becoming browsers. Right where you're having a conversation but then it can pull in stuff from the traditional web.
- [44:34]
Host 1
Very cool.
- [44:34]
Harley
Yeah, I think this is also where you'll see, I mean I don't have any great examples yet but I assume next time I'm on the show I'll be able to bring some examples of these breakout SMBs who effectively, you know, like I love the Gruen story going from zero to billion acquisition three years. We just haven't seen that before very often. I think you'll see way more of that. I also think what you'll end up with is you'll just have more people starting businesses that otherwise may have not so the, the, the entry, like the Barrett entry is further down and then their ability to scale is also going to be.
- [45:07]
Host 1
We were talking to the Collison brothers about exactly that. They're seeing a ton more formation on Atlas.
- [45:12]
Harley
Yeah, I saw that crazy, crazy slide of Atlas.
- [45:15]
Host 1
Yeah, incorporations like way, way up. And then it's.
- [45:18]
Harley
Because again, it's gotten so easy, but it's not. I think the first phase is make it easy to get started. I think where this really gets interesting is how many more brands exist that we love, the consumers love because they're able to scale much, much faster.
- [45:33]
Host 1
Well, thank you so much for taking the time to come chat with us. Congrats on the progress and looking forward to.
- [45:38]
Host 2
Always great to see you.
- [45:39]
Host 1
We'll talk to you soon.
- [45:39]
Host 2
See you guys.
- [45:40]
Host 1
Goodbye. Up next, we have the CEO of G Vernova, Scott Strazik, AI Data Center. Electricity demand is expected to double or triple by 2035. And we have the perfect person to talk to about it. Nice to meet you. Thank you so much for coming on down.
- [45:57]
Scott Strazik
Thanks for having me. I appreciate it.
- [45:59]
Host 1
I would love to start a little bit with your background because G.E. vernova is. I mean, we can go through a little bit of the history there. But you've been with the company since before the creation of the company. You're older than the company you work for.
- [46:10]
Scott Strazik
The practical reality. My adult life I was with GE and ultimately GE Vernova, but I started with General Electric right out of college and I lived through quite a few chapters.
- [46:19]
Host 1
That's amazing.
- [46:20]
Scott Strazik
Some humbling, some less humbling.
- [46:22]
Host 1
And this one is invigorating.
- [46:24]
Scott Strazik
It's a moment that we're going to take advantage of. We see the purpose of what we're doing every day very clearly, both in driving economic growth, AI national security. Energy security is very much national security and a lot of the parts of
- [46:37]
Host 1
the world right now.
- [46:38]
Scott Strazik
So we've got a real opportunity to serve and that's exactly what we're going to do.
- [46:41]
Host 1
So I think most people will know natural gas turbine for data center, but the business is bigger than that. Like zoom out for us and walk us through the shape of the business because massive workforce, 85,000 people.
- [46:55]
Scott Strazik
Something like that. You bet. 85,000, yeah.
- [46:57]
Host 1
Remarkable. So walk me through the mechanics of the business and then we will double click on the AI story, of course.
- [47:02]
Scott Strazik
Sounds great. I mean, you take a step back. About a third of the world's electricity every day is created with our equipment through our customers. Exclude China. So it's substantial and even with China, it's 25%.
- [47:15]
Host 2
No pressure, by the way.
- [47:16]
Scott Strazik
It's an obligation, it's a responsibility.
- [47:18]
Host 1
The Jamie Dimon of energy.
- [47:20]
Scott Strazik
It's a big deal. Yeah, right. So that's just keeping the lights on notwithstanding what we need to do to then add the growth for where there is today and that install base, that's gas turbines, that's nuclear power plants, that's wind turbines. It's a lot of the electrical equipment that's actually our fastest growing business is everything associated with electrification and the grid and trying to make the grid more efficient and smarter. Because frankly in some ways you can make more progress there quicker than you can building new power plant. So all those variables are parts of the business and an economic opportunity where we need a little bit of everything and applying the right technologies where the right resources exist to drive better economic answers and more resilient electrons.
- [48:05]
Host 1
Yeah, it seems like the market or just the stories that I hear are that you're sold out, you have this massive backlog and it's more of the same. There's demand for more of the same. But it feels like you're also working on R and D. Talk to me about the trade off versus just scaling what's already working, what's worked for years, I imagine decades in many cases, versus a focus on research and development, the next technology.
- [48:30]
Scott Strazik
So the end product in some cases may look the same coming out of the factory. What we're producing or how we're producing it to scale and make more is changing drastically. So you think about gas turbines. Right now we're adding a lot of production workers to build more gas turbines. We're also adding 400 machines this year to automate a lot more in the process. Frankly, more of the innovation right now may be how do we scale faster and in a more economic way so we can win the affordability game while simultaneously investing for the future.
- [49:03]
Host 1
Can you explain like I'm five. Some of those machines that you're buying, some of your supply chain?
- [49:07]
Scott Strazik
You bet.
- [49:08]
Host 1
People know 3D printers or CNC machines or different, you know, you just hammer it out yourself or whatever. But I imagine it's very complicated. What does your supply chain look like?
- [49:17]
Scott Strazik
We big castings, big four things that we get in the inside the factory then need to machine down to the right, put the right material sciences, the right coatings. When you think about a gas turbine, it's gotta be very heat resistant because it's a fire that really is spinning inside that gas turbine to create the electrical power Ultimately, yeah.
- [49:36]
Host 1
On the demand side, I have been hearing about the absolute knockout drag out fight for energy. And in many cases, I don't know if it's relevant to you, but it's. In many cases we've heard about folks involved in the AI build out putting in orders for more than they need and then sort of dialing it back because they know that certain things won't get permitted, certain things will get delayed. Does that happen to you? Are your customers coming to you and saying that they need twice what you think they need and there's this battle
- [50:06]
Harley
of back and forth?
- [50:07]
Scott Strazik
I wouldn't say so. What I see happening more frequently is many of our customers are developing a number of projects, acknowledging that not all those sites are going to be chosen
- [50:17]
Host 1
and the actual supply is a little bit liquid and they move it around
- [50:20]
Scott Strazik
and that's more what's happening. So sometimes we'll see press releases on leases canceled or sites that are. That customers walk away from. Yeah, that's typical development.
- [50:31]
Host 1
Really.
- [50:32]
Scott Strazik
What's really happening is our customers are buying at a realization rate knowing they're only going to ultimately develop a certain proportion of those sites. But we don't see any of our customers walking away from what they're securing today.
- [50:45]
Host 1
Got it?
- [50:46]
Scott Strazik
Not at all.
- [50:46]
Host 1
Yeah, that makes sense. What are your roadblocks? What roadblocks do you see to scaling either inside your business or at sort of the macro political level, Permitting approvals, regulatory. What is on your short list of what America needs to do, what the industry needs to do to get right, to actually continue to scale.
- [51:08]
Scott Strazik
In some ways, what we do is a little bit easier, candidly, because our equipment is built in a controlled factory.
- [51:14]
Host 2
Sure.
- [51:15]
Scott Strazik
The hardest part in some ways is actually building the plant itself, the construction. Because every plant in different parts of the country, different parts of the world, everyone's a little bit different in getting that craft labor to those locations where a lot of the data centers and a lot of the electrification demand is, is often very remote.
- [51:32]
Host 1
Yeah.
- [51:33]
Scott Strazik
In that is going to take us some time. So for me, every gas turbine, wind turbine that I build, I'm using the same workforce every day.
- [51:40]
Host 1
Yeah.
- [51:40]
Scott Strazik
Same people coming in Monday through Friday. We can meet the moment from an equipment demand perspective. But we need out in the field for those plants to be built so they're ready for our pedestals when they come out of the factory. Getting that orchestra right that the site is ready when our equipment is ready is. Is going to be a challenge. And we're going to have to keep investing in Craft labor in these locations to do the build.
- [52:07]
Host 1
What is investing in craft labor look like? I mean, we've heard about reskilling, retraining, trade schools. Is there a drought? Are people already seeing the news and seeing the stock price and retraining and reskilling or is this more of like a decade long process for America?
- [52:24]
Scott Strazik
We've been successful, successful so far. We've added about 1800 production workers in the last 15 months. We'll keep growing that number from here. You work to make the jobs more attractive. Part of how you do that is you take out the dull, dirty, unsafe work and that's where you automate and then you allow these workers to thrive doing what they want to do. But the reality is they have a lot of pride in what they're doing. Every day we put the customer name, where the product project is going with everything we build so they understand the impact they're having. So it's not just a piece of electrical equipment. They know how they're providing light and a middle class growth to Vietnam or economic expansion in the US And I think they see it as real.
- [53:11]
Host 1
Have you considered engraving the signature of the technician on the engine like Mercedes does?
- [53:16]
Scott Strazik
Exactly. But I think making a personal mess.
- [53:20]
Host 1
Yeah, yeah, that makes a lot of sense.
- [53:21]
Scott Strazik
So there's a lot of pride.
- [53:22]
Host 1
What else is in the portfolio? I mean, you mentioned wind. I think nuclear. You mentioned briefly walk me through the scope of your ambitions in energy generation. Broadly for the business.
- [53:33]
Scott Strazik
Yeah. But nuclear is important. We're building small modular reactors today. Think 300 megawatt machines. That can be. They're big, they're built in the inside an American football field.
- [53:45]
Host 1
Yeah.
- [53:45]
Scott Strazik
So that's 300,000 U.S. homes that can be powered from one small modular reactor that is within a U.S. football field.
- [53:54]
Host 1
Yeah. So that's very 300 megawatts. And that still qualifies as small and
- [53:58]
Scott Strazik
modular relative to what used to be for nuclear. And it used to be a gigawatt plug plus.
- [54:04]
Host 1
Yeah. Like a big Westinghouse development. Multiple years, precisely on site, massive concrete structures.
- [54:11]
Scott Strazik
Now we're trying to build a lot of them within this construct so that we can come down the cost curve. Because the reality is every nuclear plant historically was a snowflake. And that's why the industry never really became economically competitive.
- [54:24]
Host 1
No standardization.
- [54:25]
Scott Strazik
And we're fixing that. Okay, so that's important.
- [54:27]
Host 1
And what is the regulatory approval process for that? I mean, I've heard that there's this famous line around like the NRC hasn't approved a New design in decades. Is that what you're feeling? Does it feel like there's a shift?
- [54:41]
Scott Strazik
Definitely, yeah.
- [54:42]
Host 2
I guess the question is like when, like we're now about two years and a month since the spin out.
- [54:48]
Harley
Yes.
- [54:48]
Host 2
Was. Was small modular reactors on the roadmap when the spin out.
- [54:53]
Harley
Yes.
- [54:53]
Host 2
Occurred and then, and then the opportunities got more compelling from a regulatory standpoint since then.
- [54:59]
Ryan Cohen
Yeah.
- [55:00]
Scott Strazik
We're in construction on the first plant right now. It's in Canada, outside of Toronto. We will get NRC approval for the first plant in the U.S. i think this summer we'll be in construction and we've committed to the administration that as soon as we get the approval, we'll be ready to work on day one. And then from when we start construction, it's about a four year cycle from the beginning to getting to commissioning. So this can start to happen. And that's where the comparison to the large block, it's more of a 10 year construction cycle. That's a long time to wait for new electrons. But even if you want 1.2 gigawatts, the beauty of the small modular reactors is you can do them in blocks and every two years after you get the first one built, add 300 megawatts, which also then meets a lot of our customer expectations to grow with the electrons. So this is going to be an important part of the equation for us.
- [55:51]
Host 1
Are those two completely separate divisions or is there some fluidity across the workforce
- [55:58]
Scott Strazik
on the front end of the business? Commercially there certainly is with customer relationships, but from a manufacturing and an engineering perspective, they're pretty distinctly different.
- [56:08]
Host 1
That makes sense.
- [56:09]
Host 2
What, what has been surprising to you about where the sort of energy infrastructure build out is at today relative to the AI boom versus what was predicted predictable when the spin out first happened.
- [56:23]
Scott Strazik
Certainly in the US the demand has accelerated greatly in the last two years and one month. No question about it.
- [56:30]
Host 2
But weren't you seeing that? Don't you feel like you had a.
- [56:33]
Scott Strazik
Early stages? Early stages. What I'd say that has surprised us though is there was probably concern that as the US market started to take off, it would price out a lot of other markets in the world from even being capable of buying the equipment.
- [56:46]
Host 2
Interesting.
- [56:47]
Scott Strazik
The reality is we still see a very strong demand signals from a lot of the markets in the world. I mean, in the first quarter we had very strong demand in Vietnam, in Mexico, in Canada, in Saudi, in Kuwait. So the global dynamic is still driving real growth above and beyond the AI dynamic.
- [57:05]
Host 2
Yeah.
- [57:05]
Scott Strazik
The reality is AI specific. It's about 20% of our backlog today.
- [57:09]
Host 1
Yeah. Interesting.
- [57:10]
Host 2
And those international projects, I guess due to having 30% of the global market. Right.
- [57:20]
Scott Strazik
You've got responsibility.
- [57:22]
Host 2
Scale is just already so immense that even if you have a massive acceleration via new technology cycle, and I think
- [57:28]
Scott Strazik
with a lot going on in the world today, more countries just realize for just national security reasons, they need a diverse portfolio of solutions to electrify and energize their country. So. And that really goes back to really the war in Ukraine and it's only been accentuated over the last five years.
- [57:46]
Host 2
How have you processed some of the writing coming out of places like San Francisco? I'm thinking, you know, Leopold situational awareness, where if you look back over the last couple years, he's been right over and over and over. At the time a lot of people reading that even in AI seem would think like, hey, this seems pretty aggressive. But to date he's been quite accurate. Even some more sci fi kind of exercises like AI 2027 have been relatively accurate up until this point. But how did you process basically kind of the analysis coming out of the AI community in SF going back a few years?
- [58:32]
Scott Strazik
It's hard for me to kind of decipher how this is going to play out and who are going to be winners and losers and how that plays. But it's very hard when you take a step back in this country and really throughout the world to not believe we don't need a lot more infrastructure build for communities and economies to thrive. So at the end of the day, we're deeply investing in these businesses to meet this moment. And we think we're pretty early in this journey and are going to keep investing into it.
- [59:02]
Host 1
Is sovereign AI driving any of the international demand that you mentioned?
- [59:07]
Scott Strazik
You start to see some of the hyperscalers evaluate more build out in Southeast Asia as an example. So they'll try to use exactly. Malaysia, Indonesia, natural gas, but adjacent to Singapore for law.
- [59:22]
Host 1
Sure.
- [59:23]
Scott Strazik
So in that regard that's happening. Certainly Taiwan's one of our biggest markets. That's because of TSMC. So we are commissioning almost 10 gigawatts of power primarily for TSMC.
- [59:36]
Host 1
So that's not for data centers but
- [59:38]
Scott Strazik
for fabs for the fabs for the chip.
- [59:40]
Host 1
I had no idea they were so electricity.
- [59:42]
Scott Strazik
So significant demands in Taiwan for that adjacency. Yeah, so. And that's happening in the US too, as you think about some of the chip fab factories that are being built. So it's not just the AI factories.
- [59:54]
Host 1
Yeah.
- [59:55]
Scott Strazik
It's the Infrastructure around it that needs the electron.
- [59:58]
Host 1
Okay, help me understand some of the less sexy or less obvious, maybe pieces of the grid that need to be modernized, need to scale up. If we're familiar with the turbine, we're familiar with the nuclear reactor. These are very tractable things. But I'm sure there's so many other pieces of the electron delivery supply chain that are important and you're involved in.
- [60:20]
Scott Strazik
You bet. I mean, if you just take a step back, the system is really is built. Was built for a coal plant to in one direction flow electrons towards a house or a factory.
- [60:33]
Host 1
And that was at a 24. 7 flow. Very stable.
- [60:36]
Scott Strazik
Exactly.
- [60:36]
Host 1
And then you still had peak demand during the day.
- [60:39]
Scott Strazik
You did. Or summer. Summer. Exactly. So that was where we started. Now you have all these variable forms of generation. On top of that, you have electrons that are going in multiple directions because you have people selling their electrons back into the grid on their roof. And the system is not optimizing all those electrons. So we have an old machine, for all intents and purposes, that is not doing a great job matching the supply with where the demand is. Part of that is for boring reasons, like we have islanded grids in the US it's not one connected machine to project things to where it needs to be.
- [61:20]
Host 1
Is that possible?
- [61:22]
Scott Strazik
Yes.
- [61:22]
Host 1
Given the geographic diversity and like, how spread out the United States is, could. Is it possible that I could sell electrons in California and it could wind up in New York?
- [61:31]
Scott Strazik
Certainly in the 48 states for sure. Really in. And there's no reason we shouldn't be able to build a meshed grid that works today. We don't have that now. I think in this regard, the federal government's pushing hard on historical precedent to try to drive efficiency because that's a faster way to incremental electrons in some way than simply building more planes. We're working on that. Part of that is making new connections that bring islands together. Part of it is also, and this is frankly the harder part, different regulatory structures and market practices to allow different players to get paid in that. And that is sometimes harder. Yeah, but we're working our way through that.
- [62:16]
Host 1
Talk about nuclear timelines. We've seen a bunch of announcements from hyperscalers. It feels like 2030, 2032, you see 2035. But even stepping aside from your business just broadly, I think a lot of us tracked vodal. That took decades. When do you think we'll be getting new electrons from a new nuclear plant in America?
- [62:36]
Scott Strazik
You bet. I mean, I start with the fact that we've got about 56 existing plants in the US that can add 5 gigawatts of power by upgrading what's already running. That can happen this time and that counts.
- [62:48]
Host 1
Yeah, that'll happen soon.
- [62:50]
Scott Strazik
So that's the first step.
- [62:51]
Host 1
Sure.
- [62:51]
Scott Strazik
New incremental plants. 2032, 2031. That's about right. But then we can scale and in the next decade this can become a much more meaningful part of the equation for the country and the world.
- [63:04]
Host 1
Okay, yeah, that makes sense. Is that going to be deeply capex intensive at some point? Once that 2032 there's a rationalization or realization that it's working. But in order to 10x100x the nuclear production, there's going to be some sort of capex boom and a delay in the investment before it gets recouped and starts generating electricity.
- [63:24]
Scott Strazik
Nuclear is definitely capex heavy, but then it lasts forever.
- [63:28]
Host 1
Yeah.
- [63:29]
Scott Strazik
So the life cycle cost of nuclear can be very compelling, but there is a significant upfront cost.
- [63:36]
Host 1
Talk about some of the other initiatives that are happening broadly around electrification and generation. Just grid reliability. We've talked to companies that are doing home batteries to try and release some of the. There's the Tesla powerwall, there's base energy, there's a few other companies that are working in that space. Are there any other sort of near term between now and 2032 steps that you think America or the grid should be taking to just modernize and create more efficiency and more electrical abundance?
- [64:07]
Scott Strazik
I do think in most applications you're going to continue to see storage grow in the system. We historically think about storage primarily with solar. The reality is storage is going to start to be attached to many power generation sources to create more optionality for us. And that's a good thing. And that attached with software can ensure that we get more of the electrons where it's needed.
- [64:28]
Host 1
Yeah, you mentioned solar. What is the bull case for an American solar dominant industry? It feels like China is very cost competitive. There's discussions of hey, if they're cheap, maybe we should just buy them all and install them. We have a friend who has that take. There's other folks who are more on the tariff and let's put some barriers in place to give our indigenous industries a chance. Where do you fall on what it takes to roll out, I guess as much solar as we need?
- [65:02]
Scott Strazik
Yeah, I'd say stationary equipment, solar panels or batteries. China's ahead by a lot. Where they struggle still to a larger extent is with rotating equipment. That requires another level of material sciences
- [65:17]
Host 1
that Means tracking the sun.
- [65:19]
Scott Strazik
Well, no outside of solar turbines in the comparison to a turbine, wind turbine, although they're of kind competitive, they're nuclear. It requires another level of heat resistant technology that we still have quite a lead on.
- [65:35]
Host 1
That's great.
- [65:36]
Scott Strazik
But on the stationary equipment like a solar panel or storage, it's going to be tough. The investments that have been made in those factories to automate and the capex required, that is a challenge. But the reality is the country has lot more resources than China has. Sure, we have very inexpensive gas. We have a much more advanced nuclear industry here. We have plenty of land that has good wind and solar to take advantage of in a grid that we can do more with that already exists versus having to create it from scratch. So we have a lot going for us. But in this regard we do need to build in a different way going forward than the way we have the last 25, five years. Albeit there wasn't a lot of electricity demand growth the prior 25 years.
- [66:23]
Host 1
Yeah, yeah, that makes sense.
- [66:25]
Host 2
Lots of Silicon Valley companies today building in energy. How are you thinking about M and A over the long term? I think a lot of these teams are very talented. Many of them will probably create interesting innovations, but a lot of them won't necessarily get to real scale and maybe be a standalone public company, let's say, but could be an interesting tuck in for a platform like GeV. How are you thinking about M and A? Are you meeting these companies? Do you ever invest in them?
- [66:56]
Scott Strazik
It's a big part of our future. I mean we try to lean into the ventures game more and more, but we want to be thought of as a partner that these companies come to because we do know how to industrial industrialize things at scale. We have very strong relationships with the end customers. And part of why I appreciate opportunities to come and talk with you guys is that's the company we want to be seen as, as a partner of choice whenever they choose that. It doesn't have to be M and A and an acquisition. It can be an alliance in different ways because it's going to take many different partnerships and many different structures for us collectively as a country to meet the moment for NOVA also doesn't have all the answers. There's a lot of stuff we know how to do, but there's a lot in this ecosystem that we've got to get better at. Which is why to some extent one of the big pluses for us right now is as our customers have shifted more to Silicon Valley and it's about 20% of our backlog today. They're making us better because they think about innovation differently. Risk and reward a little bit different.
- [67:57]
Host 2
And timelines maybe.
- [67:59]
Scott Strazik
Timelines for sure. Timelines for sure. And I think that's good for everybody.
- [68:03]
Host 2
Totally, totally. It's right now there's, you know, maybe, you know, everyone's frustrated because they want it now, but at the same time, yeah, just increasing that innovation cycle will be better for everyone in the long run. Did you feel like you went through a culture reset process during the spin out? What did you take from GE versus what did you, what did you try to create, build from the ground up?
- [68:29]
Scott Strazik
The fact that I had been there have been 25 years. It's because I always liked the ambition of the company and I always loved the people. At the same time, we always didn't perform as well as we could have, which really comes back to focus. And the beauty of the spin out is it got us focused on one purpose every day. We weren't competing with a healthcare business or an aircraft engine business for capital. Our board wasn't diversified to solve many problems. We're here to lead in expanding the electric power system and ultimately decarbonize the world in the process. And I think that focus, as much as anything, is also helping us attract another level of talent.
- [69:07]
Host 2
Totally.
- [69:08]
Scott Strazik
Because I think a lot of young people see climate change as an example, one of their generation's biggest challenges. And there's no confusion that Vernova can be a company that can move that needle at scale. So it's helping us just perform better with focus. It's also helping us attract another level of talent and create our own culture while still protecting for the ambition and what was a great people culture. But we were a big company inside GE and sometimes too many goals or no goals at all.
- [69:37]
Host 2
I love that you're like, it's so nice being at a small company now of 85,000.
- [69:43]
Host 1
I have two final quick questions. One, I would love to know what a year in the life looks like for you. Where are you spending time? Where's headquarters? When are you on site? When are you with customers? Are you flying around the world constantly? What's your day to day look like over the course of a year?
- [70:03]
Scott Strazik
Yeah, I mean, our headquarters is in Cambridge, Mass. In Austin. And we put the headquarters there because we did want to attract those young people that believe climate change matters and to give them a platform to start their career in that regard. It's worked. All that said, I'm not there much. You know, I've spent 10 weeks so far this year outside the US. Wow, that's a lot in May. But the reality is this is a unique moment. There's a lot of complexity from a geopolitical perspective where governments are very engaged on power generation build out. So you have to show up and have those adult conversations in person. So this year has been very heavy international travel. I'm on the west coast multiple times a month. That's a given. Admittedly more in Northern California and Seattle than la. But right now we need to be consistently co creating with our customers because they're learning every day what they really need. And this has shifted from what it once was of buying a power purchase agreement and then just getting the electrons to asking us not just for an electron but to build an integrated system that allows them to run their end application the way that they want. And frankly every customer has somewhat different strategies for what they want. If it's AI for what that AI factory needs to do, we need to co create with them if we're going to serve them. So we're showing up and I need to show up.
- [71:34]
Host 1
And then last question. It seems like an incredibly AGI proof company or beneficiary. There's a business is huge and diversified. What does it take to get a job at GE Vernova today?
- [71:47]
Scott Strazik
Humility, intellectual interest and a real belief in the purpose. We are a company that's hiring a lot of people right now. Take our neighbors at MIT. We've got 69 kids starting with us in July.
- [72:02]
Host 1
You took the whole class.
- [72:04]
Scott Strazik
69. That's all because we need to compliment those production workers with young engineers that get excited about building something and that's one of the things we're excited about. I think sometimes we talk so much on the risks of job loss totally through AI.
- [72:19]
Host 1
Of course we're going to build a
- [72:21]
Scott Strazik
lot of cool stuff and be proud of it. And that takes a combination of a lot of different types of people. And we want them to be with Vernova.
- [72:29]
Host 1
That's amazing.
- [72:30]
Host 2
Do the hyperscaler CEOs wine and dine you?
- [72:34]
Host 1
No. There's that apocryphal story about. What is it? Larry Ellison and Elon Musk begging Jensen for GPUs and it's hotly debated. Are people debating? They're not begging you.
- [72:47]
Scott Strazik
We're working hard to serve them.
- [72:48]
Host 1
Okay.
- [72:48]
Scott Strazik
Every day. And showing up with as much humility as we can and working to meet this moment.
- [72:54]
Host 1
That's great. That's great. Well, thank you so much Scott.
- [72:57]
Host 2
Thanks for Having Great to meet you.
- [72:59]
Host 1
We appreciate it.
- [73:00]
Host 2
Great.
- [73:00]
Host 1
This is fantastic. Our next guest is already in the waiting room. We have Brian Elliott from Blitzy. He's the CEO With a huge fundraising announcement coming in to the TVPN Ultradome. Let's bring in Brian. How are you doing?
- [73:13]
Host 2
Here we go.
- [73:14]
Brian Elliott
Hey, guys, how are you?
- [73:16]
Host 1
Quick transition. Thank you so much for taking the time. Please. Great to meet the first time on the show, introduce yourself in the company.
- [73:22]
Brian Elliott
Yeah. So Blitzy, we're announcing the $200 million financing at a $1.4 billion valuation today. So we're nice. Thanks, guys. Appreciate the love. So we're an autonomous software development platform specifically designed for complex enterprise use cases. So we serve banks, insurance companies, anyone with huge amounts of code. And we do autonomous work, meaning the system will run for days to weeks autonomously, recursively improving the code using all the foundational models together and OpenAI, Gemini and anthropics models.
- [73:54]
Host 1
Yeah, it's fascinating. So what is the go to market motion for you? I mean, you're focused on the biggest companies. Tell me about the shape of your salesforce, what the process is like to actually deliver value. Because I imagine that a lot of times you're going up against the build versus buy question. Almost like, should we just build something like this internally? Should we just use the tools directly, the models directly. But you clearly have a fantastic value proposition because you've seen a lot of traction.
- [74:22]
Brian Elliott
Yeah. So we go in direct, right. It's very much like a Palantir like motion. So we're going to go in direct, we're going to show you quickly. We're going to reverse engineer your code base, oftentimes 30, 50 million lines of code. And we're going to do all that within 48 hours of installing Blitzy or else.
- [74:37]
Host 1
Sounds like a threat, but yeah, no, I mean, obviously that's valuable. Yeah, I mean that's the case with all these codes. Coding agents is like the first thing is like understanding what actually is the business problem, what's actually going on. How are you confronting like the diffusion question broadly? Like, there are so many systems that feel like complete code. Oh, it's the beautiful end to end engineered system. And then you realize that, oh, wait, actually, like if this person doesn't fill out this form at this time, like the whole system grinds to a halt. Because that's just the way this organization was designed years ago.
- [75:11]
Brian Elliott
Yeah. So these are the complex use cases that Blitzy is designed for. So we designed this for the messy Brownfield legacy Code base where the system is going to come in, it's going to create a knowledge graph and we're building and running the application. Right. So inside of a vm, we are building around the application, looking at what's going on and then we've invented a proprietary way to store and then have agents be able to traverse a graph, understand what's going on and then build large amounts of work on top of it.
- [75:37]
Host 2
How did you talk about the category overall during your fundraise Is, you know, every single day there's, there's a new company in this space and everything we've seen so far is that there's just such overwhelming demand that almost every company is, is doing well. And almost every company would have been seen as best in class if it was in another category, you know, based on their growth a few years ago. But how are you talking about the category? How do you see it evolving when everyone kind of wants to do everything, at least in the fullness of time? So I'm curious how you pitched it.
- [76:14]
Brian Elliott
Yeah. So we really focus on autonomy. So if you look at what's out there today, there are things that run for a half hour, things that run for a day continuously without a human in the loop. Our system is at its core defined to run for long periods of time. We're the most inference compute intensive platform out there, driving up code quality. So we'll have our system, it can run for weeks on end, improving the quality of code specifically focused on those large, large brownfield code bases. So that's where we found our sweet spot inside of the enterprise. No one else is as laser focused from a technology perspective as we are in large brownfield, large scale autonomy. And as the models get better, we continue to rise up and take advantage of that. So we are, we are a long transformer and want as much capex investment into the category as possible from other people. Yeah, we want everyone to get throwing models. Yeah.
- [77:06]
Host 2
And it's like clearly, clearly a compelling pitch because you raised the 200 million. But it is, I mean, I think it's notable that I would say that. Would you say that is quite a similar pitch to many of the other companies in the space or are they saying they're focused on autonomy, but, but they're really not. And it's more point solutions or models.
- [77:34]
Brian Elliott
The world has looked at being able to have a system run continuously for a day as autonomy. What we've done is we've redefined that to weeks at a time doing hundreds of thousands or millions of Lines of code that have been end to end tested ahead of it. Getting back to the human. So we've set a new benchmark for what's possible against these large scale code bases. We're basically setting the frontier for autonomous software development.
- [77:57]
Host 1
Okay, I can't find it, but I saw Meta put out a new benchmark today. And the benchmark was basically take the Frontier model and try and recreate an entire repo, an entire piece of software from scratch. And all the Frontier LLMs were performing very poorly. They were 0%, 3% maybe. It was very rough. You see a similar dynamic with Arc AGI V3. The Frontier models, the most amazing models are like 0.2%, 0.5%. And then at the same time you have people with AI agent psychosis and vibe coding tons of things and incredible results from the models and incredible revenue ramps from all the labs. And I'm wondering how you square these. What are the models still bad at? How are you processing, Processing the question of like spiky intelligence. Where are you getting the most value and where are you seeing. Okay, it's not quite there yet.
- [78:53]
Brian Elliott
So you see a rapid depreciation of intelligence after you exceed like 100k context window.
- [78:59]
Stephen Balaban
Okay.
- [78:59]
Brian Elliott
And so they're advertising a million, 10 million, there's someone sub Q but out 12 million context window.
- [79:03]
Host 2
Yeah, I wanted to.
- [79:04]
Brian Elliott
It's not real.
- [79:05]
Host 2
Yeah, I wanted to ask you about that, but continue.
- [79:08]
Brian Elliott
Yeah, like they're using sparse attention beyond that point.
- [79:11]
Harley
Right.
- [79:11]
Brian Elliott
And so you can kind of get it right. Sometimes the academic what call this context pressure. And so what's important is that you, you limit the LLM's ability to look within its effective context window just in time, every time to do the right amount of work. So as the code bases scale, like you see, results depreciate pretty dramatically.
- [79:29]
Stephen Balaban
Right.
- [79:29]
Brian Elliott
And so you have to be able to have a system level approach, not just throw a model at it with a slightly larger advertised context window to solve these large scale problems.
- [79:37]
Host 1
And so that means like orchestrators and like teams of agents. Like there's one agent on this 100k token chunk of code and it's very good at that. And then it's coordinating with another agent. Is that the solution?
- [79:48]
Brian Elliott
Yeah, but code is relational, not serial.
- [79:51]
Harley
Right.
- [79:51]
Brian Elliott
And so like, like you, you can't just say the serial 100k token, which is like 10,000 lines of code, but you have to cut it in half to account for prompts and tools. Right. So now we're talking about a minuscule view, but the entire relational aspect of. Well, it's something way over here in this service that's actually relationally relevant to what's going on. Just in time. So you have to be able to understand, you have to create an ability to understand code which people used to do with language specific version. Specific ASTs. We've invented a language agnostic version. Agnostic way to understand code.
- [80:21]
Host 1
Well, congratulations on the round. Congratulations on the progress.
- [80:25]
Host 2
Great to meet you.
- [80:25]
Host 1
Keep on blitzing.
- [80:27]
Brian Elliott
Sounds good, guys.
- [80:28]
Harley
Great to meet you.
- [80:28]
Host 1
Have a good one. Goodbye. Up next, we have Stephen Balaban from Lambda co founder and the new CEO Michel from Lambda in the waiting room. Welcome to the show. How are you guys doing?
- [80:42]
Host 2
Wow, look at this setup. Suited up, suited up.
- [80:46]
Host 1
Okay, reintroduce yourself. Stephen, introduce yourself. Michelle. Michelle with the purple. We're very excited for today.
- [80:53]
Stephen Balaban
John and Jordy, so good to be back. Thank you so much and congratulations. It's been a while since we've seen each other and so much has happened in your world. So I'm Stephen Balaban. I'm the co founder and founding CEO, but now chief Technology Officer, cto. Yeah, we've welcomed on Michelle Combs as our new chief Executive officer and I'm passing the baton after 14 years.
- [81:21]
Host 1
This really feels like we're putting a new quarterback in this feeling. It feels like Proper TVPN SportsCenter. I love it.
- [81:27]
Stephen Balaban
And it was such an awesome opportunity to like this is the first thing that we're doing right after announcing it to the company and to the world. And I think that one thing you guys are going to really like here. So Michel has obviously a very, very long history in telecommunication infrastructure, whether it's being the former CEO of Sprint, former CEO of SoftBank International, associated with and you know, on the, the, you know, with the McLaren team, also on the board of Philip Morris. No way oversaw the acquisition of Swedish
- [82:05]
Host 2
Match
- [82:07]
Michel Combs
that I have some competitors,
- [82:11]
Host 1
so maybe get them out of here. Yeah, we should.
- [82:15]
Stephen Balaban
So it's not Zin.
- [82:17]
Michel Combs
What is it?
- [82:17]
Host 1
I know.
- [82:17]
Michel Combs
Don't know what you.
- [82:19]
Host 1
This is the company I started before the show. I know, I know.
- [82:22]
Stephen Balaban
That's what I, the, the, the, the, the, the tagline we have now is, look, there's telecommunication infrastructure.
- [82:30]
Host 1
Yeah.
- [82:31]
Stephen Balaban
Racing infrastructure, nicotine infrastructure and AI infrastructure.
- [82:37]
Host 1
It all makes sense.
- [82:38]
Stephen Balaban
Four ingredients to a flourishing civilization. I think you're, you know, we're really excited to have Michelle on board and it's an honor to be able to do this as a founder, to be able to bring on somebody with such experience.
- [82:56]
Host 2
Incredible.
- [82:57]
Michel Combs
They're excited to be there. I guess I would never have been invited without you, Stephen. So thanks to you, I am a cool guy. I'm on this nice show. So I really love it. So we just announced it to our employees a little while ago. Very, very excited. Fascinating industry, amazing company, amazing founder that I have discovered in the past two months and I guess that we are going to have a lot of fun in order to build the next step of this company and continue our leadership in this industry. So I love it and that's really exciting.
- [83:35]
Host 1
Huge industry, huge growth rates, hugely successful company thus far. What is the major goal? What are the KPIs? How do you manage a company like this over the next year, over the
- [83:47]
Host 2
next decade, when the GPUs are on fire?
- [83:51]
Michel Combs
Well, I guess that's the name of the game is skill. Skill, it's what matters. So Stephen and team have built an amazing platform in the past few years and we can really start from this foundation and turbo boost the growth. So I am really coming in order to help Steve to unlock the growth of this company. Sky has no limit, so we know that. So it's just about skill scale in terms of capital formation. So that's something. And you will have seen that we are strengthening the team also in this side, on this dimension in order to be able to raise the right level of capital, whether it's a equity, whether it's debt, whatever is needed in order to accelerate our growth and scale also in terms of operations. So it's about, let's say finding the right sites, finding of course the right GPUs and just making sure that we can assemble all of that in order to have the best service, the best quality, the best quantity of compute and the most efficient computing power for our customers. So that's really about executing. In fact the dream of Steven, which has started the dream which has put all the ingredients together and my role is just to accelerate that with my partner in crime, Steve. So which I love the idea to partner with a founder. As you can see, I'm a little bit older than the founder. I have an experience which is a little bit outside of the founding place. I'm serial executive but I have worked with many founders in my previous lives, for example at SoftBank. And so I really enjoy, I really like to team with a founder and especially a founder like Stephen. So that's already very fun.
- [85:32]
Brian Elliott
These are.
- [85:33]
Michel Combs
Look how he's dressed. He's dressed like a French guy.
- [85:36]
Host 2
He's dressed.
- [85:39]
Stephen Balaban
You guys appreciate this. I got a Charvet tie I picked up in Paris. And you know, that's a good premedition for, for Steven.
- [85:47]
Host 2
Where do you want to.
- [85:49]
Michel Combs
Sorry. For the French guy, we should just look at his shoes.
- [85:53]
Harley
So he made a mistake there.
- [85:55]
Stephen Balaban
He made sneakers with his suit.
- [85:57]
Host 1
So now we can take it from there.
- [85:58]
Stephen Balaban
But I just wanted to show you
- [86:00]
Michel Combs
that there was an issue.
- [86:00]
Host 2
There wouldn't be a. I see with, with like proper dress shoes. Made in America.
- [86:05]
Stephen Balaban
New Balance.
- [86:06]
Host 1
There we go. There we go.
- [86:07]
Host 2
Stephen, where do you, you're, where do you want to like obviously you're, you're going to be focused on technical responsibilities now. Where do you want to focus? Where do you see the opportunity for you to have the highest impact?
- [86:18]
Stephen Balaban
Yeah, so I am going to be continuing to lead product vision, technology direction and working on just really high impact, high velocity products at the company. I mean one of the things that I've done historically, even just in the past couple of months is really, you know, spit up a ton of agents, really show how software engineering is supposed to work in the new world. And on top of that I'm just still deeply involved in standing up new infrastructure. So whether that's like hiring and recruiting really great, amazing technical data center experts, you know, assisting with the strategy around how do we go from leasing data center space to owning an operating data center space, I'm just going to be involved in wherever is like the highest impact for me. And when I was thinking about these roles, I kind of looked at the people who I really looked up to in business. And the CTO role is the one that's kind of styled after somebody who I really look up to, which is Larry Ellison. And when he transitioned to the, he transitioned to a full time CTO position and when Safra Katz and Mark Herd became co CEOs of Oracle. And so I figured that was an apropro title given that I look up to him so much.
- [87:35]
Host 1
That's amazing. How are you thinking about Focus right now? People know Lambda as a way to lease compute on a short term basis. We've seen other companies expand into everything from buying land and building supercomputers to training their own foundation models and offering APIs. It feels like there's always a couple question of do you want to do more? But if the current thing's working, do you stay focused? How are you thinking about these trade offs?
- [88:07]
Stephen Balaban
Michel and I are exactly on the same page, which is focus, focus, focus, focus. We are building a generational company that is going to last for 100 years and we're going to do that by having the most compute at the lowest cost basis, offer those at the lowest prices and the most flexible terms so that we can delight both the largest, most important model builders in the world like OpenAI and the developer. You can't forget the developer who have built the entire industry and ecosystem that surrounds this company. I mean, Lambda is really the developers cloud. You know, it's founded by a software engineer, it's built for people like me. And so we're going to have that combination of both of those and focus on that.
- [88:57]
Host 1
Well, congratulations and thank you so much for coming on the show. Can't wait to see one of my favorite appearances.
- [89:02]
Host 2
You guys look fantastic.
- [89:03]
Host 1
This is fantastic.
- [89:04]
Host 2
We'll have you both back on soon.
- [89:06]
Host 1
Talk to you soon.
- [89:07]
Stephen Balaban
John, Jordy, congratulations, guys.
- [89:08]
Scott Strazik
You take care.
- [89:09]
Stephen Balaban
Thank you.
- [89:09]
Host 2
Good night, guys. Cheers.
- [89:11]
Stephen Balaban
Bye.
- [89:12]
Host 1
Just yesterday, Ryan Cohen of GameStop offered a $55 billion unsolicited bin for eBay targeting 2 billion in cost cuts. And we have him joining the show with us now. Ryan Cohen, welcome to the show. Thank you so much for taking the time. How are you doing?
- [89:32]
Ryan Cohen
How are you guys?
- [89:33]
Host 2
Great to see you.
- [89:34]
Host 1
Fantastically. I would love an update. What can you share with us on the situation as things have developed since yesterday, Just to sort of set the. Obviously this is moving very quickly. Where are we right now? What's happening?
- [89:49]
Ryan Cohen
We made an offer yesterday, 125 bucks
- [89:54]
Host 2
a share, half cash, half stock.
- [90:00]
Ryan Cohen
That was funny, wasn't it?
- [90:03]
Host 1
Have you considered 49% cash? Why did you get to have cash, half stock? Can you unpack that a little bit at least?
- [90:10]
Ryan Cohen
Well, frankly, when you think about me going and running the ebay business, we're proposing is for existing shareholders to take half of their investment off the table. And that would be us providing them with 28, with $28 billion, which is like a 40% premium from when we started buying the stock. And then they would be getting roughly, I mean, it depends on ultimately when the transaction closes, but they would be rolling the rest into the combined company of Gamestop and ebay. Frankly, with me running ebay, I think that the company, the earnings power of the company is going to increase substantially as well as the ability to grow. The platform stagnated over the last decade and I could do a lot with ebay.
- [91:13]
Host 1
I love it.
- [91:14]
Ryan Cohen
That's a very strong business and that's right up my alley.
- [91:18]
Host 1
Take us through the big vision. Like in five years you're at the helm, like, how big can this business be? Are you expanding it Obviously, there's an operational efficiency point, but what is the big picture? What's the blue sky pie in the sky vision for the combined entity?
- [91:34]
Ryan Cohen
So where we've had success at GameStop and where eBay has had success is in collectibles, trading cards, collectibles. The founder, your show was, was talking about his Mont Blanc and like, that's a good example. That's perfect item to go and buy on ebay. But you're always concerned that is it going to be real and the trust. And that's something that using GameStop, 1600 stores, we can immediately authenticate that item. The seller can ship it or we can ship it, but we've got 1600 access points that we can do live authentication. So we can go deep in collectibles, leveraging our physical infrastructure. We can increase intake by bringing a lot more product onto the platform. And then there's a lot of other categories that I can, I can grow in. And you know, you look at live commerce as an example. I mean, eBay has 130 million users and they're getting crushed by competitors in live commerce. So an owner's mentality, you know, I can, I want to, I want to own ebay forever. Like, I love that business. It's run like a public utility. It should have been wiped out, but it hasn't been.
- [93:01]
Host 2
It's been remarkably resilient. How many startups have gone after a specific category on eBay? Raised 100 million plus dollars and yet eBay has remained resilient. It shows that there's, you know, it's a really powerful platform.
- [93:20]
Ryan Cohen
Yeah, that's why I love it. And you know, the website still looks the same as it did in 1995, but everyone's tried to kill this thing.
- [93:29]
Host 1
Yep.
- [93:29]
Ryan Cohen
And it's still making over $2 billion a year. So that goes to show you the durability of the business.
- [93:37]
Host 1
Talk about live commerce more. Would that be just a better integration with TikTok, Instagram streaming, Twitch streaming? Do you need to go and partner with big creators? Do you need to find your own platform for that? Like, how does that actually play out in a way world where ebay and you are making a bigger push into live commerce? It makes a lot of sense. But I'm wondering, like, how does it actually work?
- [94:02]
Ryan Cohen
Yeah, it would be partnering with creators. I mean, they've got the platform. We would improve the platform so it looks better and more consistent with the kind of UI that you have at competitors. But there's the user base and so it's not something you have to market. It's building out better tech and partnering with creators.
- [94:24]
Host 1
Yeah. And the correct incentive structure for those creators. Because I bet you right now you could probably go get some referral code or something. But it's not deeply integrated in a way that you can really accelerate on a social platform.
- [94:35]
Host 2
Why do you think ebay? Has ebay been a target of any type of deal like this in the past? I'm not familiar with any off the top of my head. But why do you think maybe it hasn't been more of a target? And I guess why do you think you can get more efficiency out of it than maybe some other potential buyers who I'm sure see their costs. Marketing is something that people gravitate towards, but I'm sure you're seeing other efficiencies as well.
- [95:08]
Ryan Cohen
So in terms of the competitive landscape on an acquisition, I think there was some people circling around a few years ago. Nothing happened. The strategics can't really do it because I don't think that they would be able to clear antitrust. So any of the large competitors wouldn't be able to acquire it. And you know, I don't think that we would have any regulatory issues getting clearance on, on, on a merger. In terms of the efficiencies. GameStop is a good example. Like GameStop is a dog and it
- [95:51]
Brian Elliott
could have been dead.
- [95:53]
Ryan Cohen
And we breathe life. We breathed a lot of life into this.
- [95:59]
Brian Elliott
Right.
- [95:59]
Ryan Cohen
And you look at SGNA, we've pulled out, we've dropped SGNA by 47%, $800 million by making marketing more efficient, almost turning off marketing. I mean, everyone knows GameStop, everybody knows eBay. So you talk to the marketing people that tell you like, it's going to tank revenues and all of this. And the reality is most of that marketing spend isn't making money, but everyone's trying to protect their jobs and there's kickbacks, there's all kinds of perverse incentives. And so I'm running the business like a family business. You know, it's. It's really not that complicated. And you look at eBay spending 2 1/2 billion bucks to grow 1 million users, 2 billion in cost cuts between sales and marketing and corporate overhead. It's not a lot. And it's not something that's going to take a few years. Like it's something that is going to happen fast, fast, fast. Because putting leverage on this thing and I don't want to run a leverage business, so I'm not going to run it hard. I'm going to pay down the leverage and I'm going to increase earnings. They're spending five and a half billion dollars on operating expenses on $11 billion business that has no inventory. And it's asset light. So it just. There's 11 and a half thousand employees. It doesn't make sense. It doesn't. You don't need. I could run that business. I could run that business from my house. Like, it's, it's ebay. It looks the same as it did in 1995. The needle.
- [97:41]
Host 2
So, so is. Is the Elon Twitter Take private somewhat of an inspiration here? There's been a number after that happened. In many ways, the business suffered, but maybe it wasn't because of the deep cuts that he did to. To the team and the service kept working. Yeah, the service kept working. It's still a great product. We've been surprised that more CEOs and management teams haven't done something like that with businesses that are household names but somewhat stagnated. Is that an inspiration at all?
- [98:13]
Ryan Cohen
Yeah, and Twitter is a good example. I mean, what really happened at Twitter was that the advertisers, you know, I don't know what the situation is now, but they pretty much conspired against him. And, you know, it had nothing to do. My understanding is it really had nothing to do with the cost cuts. More of just the advertisers conspiring against them because of the demented political landscape and the fact that people apparently are against freedom of speech. And so, like you look at the usability of the platform and the teams, the engineering teams are much smaller and they're innovating a lot faster. So it's actually the opposite. The more people you add, the more you slow things down and the fewer people you have of the more. It's like a startup. You got to always be in startup mode and you build big teams and nothing gets done anymore.
- [99:07]
Host 2
Do you think alarms will be a tailwind for ebay over the next decade? It feels like for the long tail of commerce, you're trying to find really specific items. It feels like LLMs and people doing research in these products could be catalyst for the business. Maybe there's things on ebay that would be tough to find, but if I'm really getting precise around prompting or running these sort of agentic searches, maybe I have a higher likelihood of purchasing something.
- [99:39]
Ryan Cohen
Yeah, I mean, I think about all of the things that can disrupt the business in the future.
- [99:47]
Host 1
And,
- [99:49]
Ryan Cohen
you know, I think that ebay is the kind of business where the future of the business model is more certain than most tech businesses and that's why it's done so well. And you know, there's been such a lack of innovation yet it hasn't been able to be disrupted. So I would expect that to continue to be the case.
- [100:13]
Host 1
If it doesn't materialize as an M and A. Are you looking at a board seat? You have a position. Will you be more active in a non M and A scenario?
- [100:25]
Ryan Cohen
Yeah, I mean, I'm going to. I'm going to do whatever we need to do to protect our investment and to improve the business. But the goal here isn't to be an activist. The goal is I want to own ebay. I want to run ebay. I want that to be my baby. I want to build something much larger. And cost cutting, frankly, is the way to make the business more efficient, to pay down the debt and innovate. But when I think about what I can do with ebay in the future, like, look at chewy. Ebay is like chewy on steroids. And so there's so much more Runway and it's global.
- [101:08]
Host 1
Yeah. I mean it seems like a huge opportunity. How do you want to be comped based on performance?
- [101:15]
Ryan Cohen
100%.
- [101:16]
Host 1
Is there any tension between you and the shareholders? How do you actually create alignment there?
- [101:24]
Ryan Cohen
It would be in. My current compensation plan is tied to really lofty metrics and it's based on the first tranche. I've got to double market cap as an example just to hit the first tranche and the 10 exit in order for it to fully vest. So seems pretty. I'm not interested in. Yeah, I haven't taken a dollar of salary or any bonuses. And you know, it's funny actually, I just got a call from my team today that said this is how I know they hate me. They're not happy about this.
- [102:00]
Host 2
By the way, the Gamestop, this is the game ebay.
- [102:03]
Ryan Cohen
No, ebay is. After this interview, they're really not gonna like me, but because they're gonna find out I'm cutting marketing spend and the board already isn't like me because I'm calling out all the board fees. But I get a call and they say there is a. There's a. They're calling out your personal assistant. I said, what are you talking about? And they said, they went on the GameStop's career page and they saw that there's a listing for the personal assistant and it's all kinds of personal stuff. And that's basically a CEO benefit. And you know, it's basically not. You're using company resources. Personally, I pay for my personal assistant. Personally, I don't even pay for. The company doesn't pay for my personal assistant. So they're already starting to get. They're doing whatever they can. They want to fight.
- [102:59]
Host 2
Has any major ebay shareholders reached out to you? Have you had, you know, what is the general sentiment? How do you think. What do you think it'll look like if you take this directly to the shareholders?
- [103:14]
Ryan Cohen
I don't know. I mean, I would want to. I want to own eBay at $125 a share. We're propos. There's tax advantages to rolling it. But when I think about what ebay could be worth if I'm running this business, I believe it's a heck of a lot more than $125 a share. And so I, I would roll 100% of the. Of the equity. But, you know, we'll. We'll see. We'll. We'll see what happens.
- [103:42]
Host 1
Yeah.
- [103:42]
Host 2
What do you think of Michael Burry's critiques? A lot of people were, you know, talking about him exiting yesterday. He doesn't believe. Have you guys chatted?
- [103:55]
Ryan Cohen
I haven't chatted with Michael in a long time. I've seen he's more active than he says, his investing philosophy. So I figured the, you know, his risk appetite and, you know, the leverage we're putting on just. It didn't make sense for him. But it seemed as though it was more of a trade, more so than. Than anything.
- [104:25]
Host 1
Yeah. Looking at the price action yesterday, is that reflective of sort of like a shakeout of non believers and you feel like you have the right people around the table. Now
- [104:36]
Ryan Cohen
I. When I think back to Chewy, every single day was a shakeout. Yeah.
- [104:46]
Host 1
So
- [104:48]
Ryan Cohen
I don't know. It's hard to diagnose the shareholder base. And I'm. I'm focused on what I could build over a long period of time. And yeah, I got my hands on ebay. I can build something worth a lot and much larger than it is.
- [105:06]
Host 2
Was paramount at all. An inspiration.
- [105:09]
Host 1
Ask.
- [105:10]
Ryan Cohen
I've looked at it. What they did is really interesting too.
- [105:18]
Host 1
Just because smaller company buying a much larger company but the deal still went through, the capital was marshalled. That was something that I think was unclear yesterday for some people was half cash, half stock. Where is it coming from? How much of this is just an ongoing conversation? And as you work through this process, you'll engage with other pools of capital or financiers to actually put together the final package. Do you have a date that you want this to be done by?
- [105:51]
Ryan Cohen
I mean we have the cash, we have the cash accounted for today in terms of a highly confident letter from our bank for the 20 billion plus, we've got 9 billion of cash, so. And the rest would be them rolling the equity into the combined company.
- [106:12]
Host 1
Sure.
- [106:12]
Host 2
Yeah. I think that was. The rolling of the equity was the thing that if it had got into the viral clip from CNBC yesterday would have made a lot more sense. I'm glad we're getting it in now.
- [106:26]
Host 1
Yep. Is there, I guess how much of your critique of ebay is specifically around the current management team?
- [106:37]
Ryan Cohen
They've done a decent job. Look, it's anyone when you've got Perverse Financial and they're not operating like owner, just, you know, when, when you've got it it all on the line, you're going to do whatever. It's going to take many hours, seven days a week. You're not going to stop. And when, when equity is given out to you like candy. I mean it's, it's, it's all companies. So, you know, the directors, board of directors make $4 million, like 350 to 450,000 or director. There's been no insider buying at the company. I mean, like, it's not a surprise they're not going to light the money on, they're not going to light the world on fire. But you've got a bunch of professionals in the board and a professional management.
- [107:24]
Host 1
Yeah.
- [107:25]
Host 2
If this deal goes through, roughly what percentage of your personal net worth will be tied to it?
- [107:33]
Ryan Cohen
Well, I, I haven't done the math, but if things go correctly, then it better be the majority. Otherwise I'm wasting my time.
- [107:43]
Host 1
Yeah.
- [107:44]
Host 2
What was your first memory using ebay? Were you a power seller back in the day?
- [107:50]
Ryan Cohen
Very good question.
- [107:54]
Host 1
I bought and sold DJ equipment on eBay back in like 2003. It was amazing.
- [108:00]
Ryan Cohen
I don't remember my first transaction, but I'm going to have to get back
- [108:05]
Host 1
to you on that one with GameStop. Last time we talked, you were mentioning a little bit of expansion into digital goods, less physical material and stuff. Do you think that there's an opportunity for ebay to play in a digital marketplace or in a world where certain collectibles or certain, certain goods become digital or the market shifts towards more digital goods? And would you like to see ebay expand into that?
- [108:37]
Ryan Cohen
Yes and yes. In terms of a digital marketplace. And they are already doing it to a certain extent. I mean like all kinds of roadblocks. Digital items are bought and sold but. And I've actually bought them for my kids. And there's so much fraud on the pop platform. Like we're buying stuff, it's not a real item. End up having to do a chargeback but then it ended up getting delivered so you can't do a chargeback. So like they've got the basics of it, but it's not being done well. So like digital gaming. Totally. That's a huge opportunity to, to dig into.
- [109:20]
Host 1
There's so much potential on, on digital stuff. I guess you're obviously interested in cutting costs. Are you optimistic that stablecoins might be a path to reducing costs? It's a high volume transaction business. Obviously a lot of credit card fees. Maybe there's a way around that with stablecoins. We hear that from a lot of stablecoin founders. Haven't heard it from as many operators. What do you think?
- [109:48]
Ryan Cohen
I don't have a point of view on that. I haven't looked into it.
- [109:52]
Host 2
So I think the sellers would probably be eating the cost but potential option.
- [110:00]
Host 1
Yeah, I don't know.
- [110:02]
Host 2
Jordy, do you have any sense of how ebay is using AI internally today? Have they spoken about it much? Do you believe they're getting very much leverage out of the models? Do you think there, there could be quite a bit more?
- [110:19]
Ryan Cohen
I've seen that they've made listings easier in terms of just generating product descriptions and stuff like that. So I think they're kind of like doing the super easy stuff still. There's a lot of friction to sell a product on ebay. Like it's, it just, it's not easy. So the benefit of our 1600 stores is we have the ability to increase intake. But I would go through it and I would make it as simple as possible to have a real item for sale as a seller. And there's a, it's, there's a lot of steps. It's just, it's a pain in the ass. It's too difficult.
- [111:06]
Host 1
Yeah. 1600 stores in the world where you combined eBay and GameStop, do you expect that number to increase, decrease, stay the same?
- [111:21]
Ryan Cohen
It's a good question. I mean our footprint is a moving target. We have was part of what appealed to me originally when I went into GameStop was the leases were short term. So they're like two to three year leases. And as we see how the business performs, you know, we decide whether or not it makes sense to renew the store. So I mean it's it's going to be dependent on the utility of the stores. Like if there's traffic and if profitability is increasing, we'll keep the stores open. And if it's not the case, then we'll shrink the store base.
- [111:58]
Host 1
Okay. A couple other scenarios. In a world where an M and A doesn't happen, is there a business partnership to be done where verification of rare collectibles can happen at GameStop physical retail stores for a price and ebay is paying GameStop for that service? Is that something you've explored? Is that something that's at all likely to happen?
- [112:23]
Ryan Cohen
Well, that would. So, yes. And it would basically take $0 in capex in order to. Something like that. And it's a good idea. I hope that doesn't want to. That doesn't happen because I want to. I want to run the entire thing. But if it doesn't, then, I mean, there's. There's a partnership option. I reached out to ebay, like, I don't know, maybe a year or two years ago to talk to them about partnering, and they didn't engage. Seriously, like everyone, that everyone's on vacation. Everyone's always on vacation. Like, they're not available. They have assistance. I'll get back to you next week. And it's like, let's go now. So then they never get back to you. Then you're following up. It's like there's no sense of urgency at that company. There's no sense of urgency, frankly, at most companies. So it never gained any traction.
- [113:21]
Host 1
Etsy is trading at 6 billion. Is that a target if the ebay plan doesn't come together?
- [113:27]
Host 2
No collectibles action there.
- [113:30]
Host 1
It was in the chat. I got to ask.
- [113:34]
Ryan Cohen
Ebay is just such a natural fit for the collectibles, leveraging our storefront footprint, but then also like my ability to cut costs and build something much larger at the company. So everything else is. If it doesn't work out, we could find something else. But I like ebay. It brings me back to my roots.
- [114:04]
Host 2
What's something that ebay is not doing today that you think they could expand into? Or is that even the right question? Do you think the core business is just so great and they're so dominant in many of these categories that you just want to pour fuel on the fire?
- [114:19]
Ryan Cohen
Live commerce.
- [114:20]
Host 2
Yeah, but to me, to me, that's an extension. Right, because they have a lot of inventory. It's just a new selling channel.
- [114:27]
Ryan Cohen
Yeah, yeah, but I mean, in terms of doing that, well, accelerating revenue growth, you know, I Think that that is, that's big. And so going much deeper into collectibles in luxury trading cards. There's, there's a lot of Runway there.
- [114:48]
Host 1
Do you have a position on international capital providers? A lot of these big deals. The, you know, Maybe they started 50 at half cash, half stock. They wind up being more lean in cash. That's what we saw with the Paramount, Warner Brothers deal. Are you interested in talking to international sovereign wealth funds, that type of capital provider?
- [115:13]
Ryan Cohen
We're looking at a variety of different options currently.
- [115:18]
Host 1
Makes sense.
- [115:21]
Host 2
Mutual Friend of the show and Gamestop Mod Retro. They've been pretty aggressively pushing into this retro gaming category. How do you see that growing? Our team at the office recently got it. Got an old Xbox 360, fired it up. I can see retro gaming just getting more and more popular. But what's your view on the category right now and where do you think it's going?
- [115:48]
Ryan Cohen
We are, we've. We have. The return rates are kind of high, but we're. We're building out the retro business in our stores currently. So that's, that's a, it's a, it's. It's still small, but it's a growing category for us.
- [116:07]
Host 2
What do you want to see the rest of this week? How do you. How do you. How do you see it playing out?
- [116:19]
Ryan Cohen
I don't know. It's a good question.
- [116:20]
Host 2
Balls in their. Balls in their court?
- [116:23]
Ryan Cohen
Pretty much, yeah.
- [116:24]
Host 1
Balls in their court, yeah. Well, we'll let you get to it. I'm sure you have more questions.
- [116:29]
Host 2
Thanks for jumping on.
- [116:29]
Host 1
Thanks for jumping.
- [116:30]
Host 2
You're welcome to join anytime. Let's do it again as the story progresses. But we're enjoying following along. And if anybody out there wants more information, it's on the website.
- [116:40]
Host 1
Yeah, it's on the website. If anybody asks you how he's paying for it, just tell him half cash, half stock. You got the beginning and the end of the interview. Thank you so much. Thank you so much for coming on the show.
- [116:52]
Host 2
Great to see you, Ryan.
- [116:52]
Host 1
Have a great rest of the week. Good luck out there. Goodbye. What a fun interview.
- [117:00]
Host 2
It's on the website.
- [117:01]
Host 1
I like the thesis. I keep coming back to I like the thesis. I was confused about the financing. I feel like an idiot now. Friend of mine who's an investment banker was like, yeah, this could totally happen. Just the way he's describing. And everyone who sort of reposting the clips thinking that it's crazy. It actually makes a lot of sense and it could happen if the shareholders decide to roll forward. We'll see how it plays out. We'll see what happens. Obviously, with Warner Brothers, there was an incredible pushback against any stock and it wound up being all cash at the end of the day. But that was the Netflix thing. The real question is, do we see a dark horse Netflix style bid for this ebay company? We see some.
- [117:44]
Host 2
I think a lot of people just weren't thinking about ebay too much. And now that they see this business has been immune. Not necessarily immune, but face an onslaught of competition, vertical competition in every single category, from watches to collectibles to sneakers to fashion. Over and over and over. So much venture funding has gone into attacking their business, and yet they have remained remarkably durable. It is very immune to AI, especially collectibles. Right. No amount of AI led abundance can generate more rookie cards from, you know, 20, 30 years ago. So it seems like a great business. I think Ryan has a strong vision. I would not be surprised for some other players to also get excited about the opportunity now that he has so pretty eloquently explained it to the world in his own words. And thank you everyone to the chat for hanging out. You guys, the Gamestop crew. You guys really are a family. We've had thousands of guests on the show and no one shows up like
- [118:52]
Host 1
they're the real deal. They were asking us about some jargon that I didn't understand. I'm sorry if we didn't get to your questions. We tried to get the ones that sort of fit into this story. I don't have the full context on everything that's happened in the GME ecosystem, so. Good.
- [119:08]
Host 2
We'll work on getting Ryan back on.
- [119:11]
Host 1
We'll get him back on.
- [119:11]
Host 2
We'll talk as there's more news.
- [119:14]
Host 1
He did have an interesting point that he says that he doesn't think any of the larger E commerce players can make a bid because of antitrust considerations. I think he's thinking about Amazon, maybe Shopify. I don't know who, who else would be in that category of potential buyer. But then regulatory ftc, I don't want to dip my toe in, but when I think about Shopify is an interesting one. Yeah, Shopify.
- [119:39]
Host 2
Ebay really is a platform, right?
- [119:41]
Host 1
It's another way that it makes any sense together.
- [119:43]
Host 2
I'm not sure that it does either, but you can imagine they would be able to, you know, we got to
- [119:48]
Host 1
get Harley, put the screws to them.
- [119:50]
Host 2
I was just thinking more like these scaled PE funds that.
- [119:53]
Host 1
Oh, yeah, well, that's not a regulatory issue.
- [119:56]
Host 2
No, No, I know. That's what. But I'm saying that's a potential dark horse.
- [119:59]
Host 1
Totally. Totally.
- [120:00]
Host 2
Specifically because they don't. They're kind of paralyzed. Right. They're worried about investing in SaaS. They'd be sitting on a bunch of SaaS. Companies that they can't exit for reasons we all know.
- [120:11]
Host 1
Yeah. And this one might be more durable. I'm just thinking about the Amazon. Like, would you like, who is the Netflix of this story? If he's the Paramount and ebay is the Warner Brothers, it's the $10 billion company going after the 50 billion, $100 billion company. Who's the Netflix in that story? It feels like it would be Amazon, but Amazon's so dominant in e commerce. Maybe a Shopify.
- [120:34]
Host 2
But even that part I kept coming back to too is like we've always said, it has been shocking that the Elon Twitter playbook.
- [120:43]
Host 1
Yeah.
- [120:44]
Host 2
Hasn't been applied to more companies. Again, the Twitter acquisition has not. Didn't go well. But that was because the reason that Ryan talked about, which was more advertiser, advertising revolt. So if, if, if you know, ad spend on the platform craters. But you have these companies that have real network effects like Twitter, like ebay. I do think you can cut pretty dramatically and, and still have a. Have a thriving platform, at least. My experience on X, we went through a period where stuff was pretty buggy, but I think they figured it out.
- [121:18]
Host 1
Yeah. It's funny talking to him. I get the GME Army's love. I get the thesis, the way he thinks about things, the way he talks about things. Obviously tons of ups and downs in the journey, but the basic theory. Thesis of the combination.
- [121:35]
Host 2
Yeah. The other thing, there's a lot. The other thing I'm excited about. There's so much. There's so much stuff in my house that would sell on ebay. I just. I just never find the time to go out. I don't want to deal with photographing it. If I could just take a car full of stuff, take it to ebay, they can say, yeah, I will take this, donate this stuff. I would happily do that. And I think that the. Yeah. The integration with their existing retail footprint is interesting. I don't think they probably need 1400 stores.
- [122:03]
Host 1
1600.
- [122:04]
Host 2
1600.
- [122:05]
Host 1
Yeah. I don't. It's unclear. I mean, obviously he's going to like, cut the ones that aren't performing well and add ones that are obvious. But what is the net effect? I don't know. I actually don't know where stores have gone over the past six years while he's been running that business. I would love to know how many stores did GameStop have before Ryan came in as CEO? Maybe we can look that up. But in Amazon news, the number of monthly releases of ebooks on Amazon is going vertical. We are in the fast takeoff of a slot books. Apparently that is the conclusion. John Arnold just says, ha ha ha ha ha. And it does look like the rate of publishing on Amazon is going.
- [122:53]
Host 2
Explaining this to somebody in 2022, there's going to be a renaissance. Four years from now, there's going to be 350,000 books being published every month.
- [123:05]
Host 1
Every month.
- [123:06]
Host 2
And they're like, you're not going to be happy with why though.
- [123:10]
Host 1
Yeah, it is crazy. I mean, if you had asked me to guess how many books were being released every every month on Amazon in the pre AI era, I don't know if I would have put it at 100,000. That's a lot of books. I feel like we talk to a lot of authors. I see the hyped books. I see the New York Times bestseller list. I don't really see the 999 or 99,900 books that don't make the cut in the given month. I maybe hear about five or ten new books every month, but lo and behold, they were in fact churning out 100,000. Now it's over 300,000 books every month on Amazon. Bullish for Amazon. If you like slop, it's good for you too. I don't know, maybe there's some good stuff on there. It all depends. The models are getting better, they're getting less sloppy and I think people will wind up liking them. There's some AI videos that I like out there. You know, there's going to be one book that's fully AI generated that is of high quality. Tyler, did you get the stat on GME stores pre pre buyout? I would love to know. You don't need to cut to him while he's looking it up. Brutal. You can come back to that.
- [124:20]
Host 2
In other buyout news, Long Lake, very under the radar company, but has been on an absolute tear over the last couple of years, is taking Amex GBT Global Business Travel private. I could see Long Lake being kind of interested in ebay too. They maybe got their hands full with mxgbt. But incredibly talented team been really unlocking the power.
- [124:48]
Host 1
So it's a $6 billion take private. It's also interesting because General Catalyst Mark Vergara is sort of talking about the story of Long Lake. He says, we had the first Long Lake team retreat at my home in Miami just two and a half years ago when the company was getting started. It's been incredible to watch the talent and team brought together to transform the services industry into one of growth and abundance. With AI excited for yet another milestone, General Catalyst is honored to be the partner from beginning and excited to continue the strategy of backing what we believe are the best AI investments. And interesting because General Catalyst is also a. An investor in Ramp, I believe. And so there's a question about, like, Ramp has a travel product. How different is Amex Business Global Business Travel from Ramp Travel? Obviously, there's some overlap there, but there might be some synergies since there's board members in common. Now, who knows where this goes. But at 6.3 billion, that's a small slice compared to Ramp, which has been on an absolute tear.
- [125:42]
Host 2
Another big race before we close out for the day. 11 laps cross 5. Half a billion dollars. There are investors. Blackrock, Wellington Nvidia Santander, Jamie Fox.
- [125:56]
Host 1
Is this a raise or is this just a flex? They're just flex.
- [125:59]
Host 2
They new investors.
- [126:00]
Host 1
Okay. They got some new.
- [126:01]
Host 2
I don't know that they announced their new valuation. Well, with the good stuff.
- [126:06]
Host 1
Mitchell Green would be very happy. You know, if you have ARR. That's what you report. If you don't, you report the valuation. And they are making some serious progress on the commercial side.
- [126:15]
Host 2
So, yeah, some serious institutions coming to
- [126:17]
Host 1
the team over there. Tyler. I think Tyler has an answer. Yes. Wait, wait. Jordy, do you think the number of Gamestop stores has increased or decreased or stayed the same since Ryan Cohen's tenure? What do you think? Back of the envelope, what do you think?
- [126:32]
Host 2
I would assume that it decreased, but because you're asking me, I would maybe you're going increase.
- [126:39]
Host 1
Lock it in. Final answer.
- [126:41]
Host 2
I'm going decrease.
- [126:42]
Host 1
You're going decrease? Okay, what are you going.
- [126:43]
Host 3
What are you going to do?
- [126:44]
Host 1
I gotta think the other side. I'm going increase now.
- [126:46]
Host 3
Okay, so 2021, January 30th, 2021.
- [126:49]
Host 1
Yeah.
- [126:49]
Host 3
They were at 4800 worldwide. Worldwide.
- [126:53]
Host 1
Okay.
- [126:54]
Host 3
This. This past January, they were at 2200.
- [126:56]
Host 1
Okay.
- [126:57]
Host 2
Yeah. I thought you were asking me. I thought you were trying to trick.
- [126:59]
Host 1
No, I wasn't trying to trick you. I was just trying to get you to lock in a random guy.
- [127:03]
Host 2
Such a savage operator.
- [127:06]
Host 1
Store count in it in a retail apocalypse. No, clearly you made it. Clearly he made it much more efficient and everything. And the chat's really helping here. There's a massive decrease. Obviously, everyone knows.
- [127:19]
Host 2
As Elon said, your questions are meant to trick me.
- [127:22]
Host 1
Yeah.
- [127:24]
Host 2
Anyway, well, speaking of retail, what's going on? McDonald's.
- [127:29]
Host 1
This is fake. It's fake. There's so much fake news in the timeline. I saw a funny debunk of there was someone on Instagram who was reacting to goats, a video of goats on mountains and was like, making fun of the goats on the mountains. And then there was some debunking that, saying that that's AI goats, but goats do in fact climb mountains. And so you could do the same funny video, but you should have used the National Geographic video. Every post requires, like, a deep dive on, like, is this real? But maybe, maybe the future with all that XAI capacity, they can just do grok. Is this real? On every post before it goes out. Generate the Community note before I even hit send. If I'm posting fake news, just let everybody know.
- [128:07]
Host 2
Community Note Singularity. Well, folks, thank you for tuning in today.
- [128:11]
Host 1
Thank you for tuning in.
- [128:12]
Host 2
It's been an honor.
- [128:13]
Host 1
We are at a conference tomorrow and Thursday. We'll be back Friday, but we might have some special reporting from the field. We have a lot more planned and we will of course be posting plenty of over this week. Thank you for tuning in. We will see you on Friday. Have a good week. Goodbye.
- [128:34]
Host 2
Love you.
- [128:35]
Host 1
Leave us. Five stars on Apple Podcasts and Spotify. Sign for a newsletter. Tvpn. Com. Goodbye.