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- [00:01]
Brian
You're watching TVPN.
- [00:03]
Tyler
Today's Wednesday, July 8, 2026 and we are live from the TVPN Ultradome. The template technology forces finance the capital of capital. Let me tell you about ramp time is money save. Both easy to use. Corporate cards, bill payments, accounting and a whole lot more all in one place.
- [00:23]
Brian
That's right. It's great to be back.
- [00:27]
Tyler
Yes. The invest like the best hype song really. It really, I don't know, it just burned its way. Yeah.
- [00:35]
Will Mayer
Puts it in the ground.
- [00:35]
Brian
It's an incredible mental state.
- [00:38]
Tyler
100%. 100%. You know who else is in a good mental state? Jeff Bezos. Cuz he's getting a markup on the 25 billion he's put in.
- [00:47]
Brian
He's marking himself up. He's marking himself up alongside cotu.
- [00:50]
Tyler
Yeah. The news is that Blue Origin is raising outside capital for the first time. He's participating fund. Cotu, who he is also invested in through his family office, is also participating. But there will be an opportunity for some other true outsiders to get their first slice of Blue Origin. Andrew Ross Sorkin had the scoop in the New York Times today. You have to wonder if this is gossip coming out of Sun Valley. The company is raising $10 billion. This is the first outside fundraise. It's hilarious to think about this 25 year old company as being previously bootstrapped, but that's technically what it is. Bas1 founders capital just chipping away at a really hard problem for a quarter century and now we are here. Bezos has been funding this basically solo on his quest to visit the stars. He's doubling down.
- [01:46]
Brian
People can't really complain about the valuation because he's a big part of setting the price.
- [01:52]
Tyler
Yeah, yeah. So he's doubling down. He's putting in $2 billion directly and. And CO2 is getting twice as much. Allocation 4 billion. There's another interesting CO2 tidbit I alluded to earlier from the New York Times piece. Bezos family office is a major investor in CO2's Innovative Strategies Fund which is focused on emerging technology startups. So I'm not sure if the money's coming out of that fund specifically, but there is a connection there. He's been building a relationship with CO2 for a long time and they are optimistic about Blue Origin's prospects. The valuation is expected to be $130 billion big for a private company. I was listening to Gavin Baker and Travis Kalanick talk about how crazy it was when Gavin was at Fidelity and he wanted to value Uber at 14 billion. And everyone thought he was crazy. The valuation turned into an auction, came in at 17 and everyone was like, this is unprecedented. We've never seen a private company this big. And now 17 billion, even 60 billion in the private markets looks quaint by modern standards. In an era where we have several trillion dollar private companies, many up in the hundred billion plus range. It's a wild, wild time.
- [03:05]
Brian
Brian wants us to warm up the gong.
- [03:08]
Tyler
We gotta warm up the gong. Warm up the gong for Bezos. Give it a couple warm up hits just to get it warm, just to get it warm. Here we go. Fantastic.
- [03:25]
Brian
Nice and warm.
- [03:26]
Tyler
Y so the Elon bulls are saying, oh, Space X is underpriced now because you have to imagine, I don't know if there's an exact revenue figure that's leaked for Blue Origin, but based on the size of that business, it has to be small. And so this has to be a very high multiple. But you're not really valuing this company on cash flow or even revenue. You're valuing it on the capability, which is, it's the second company in the world, I believe, to bring a rocket to orbit, land it successfully, you know, prove reusability. They got there before China which has been trying to copy SpaceX for years. And so lots of really solid progress. Of course there was that setback with the launch pad that exploded, but they figured out a solution to that and things are chopping along just, just fine. The company is estimated to burn 5 billion this year. So this looks like a pretty standard 12 to 18 month fundraise at 10 billion. And it's burned something like 27 billion to date, which, you know, a billion a year on average over 25 years. Not too bad for such an ambitious project. Still a lot of money, but a big opportunity. And you have to imagine there are a number of other comps like AST SpaceMobile, as you like to call them. AST Space Mobile ASTs 27, $28 billion, $30 billion company. And I don't believe that they've gotten much to orbit yet. They've done some experiments, some are still early, but it's a huge market. And we've seen how fast the concepts
- [05:00]
Brian
of mass to orbit.
- [05:01]
Tyler
Yeah, and we've seen how fast rocket lab and various. It's a really, really big market. And so when you're going after a big opportunity and you've been working on it a long time and you got Jeff Bezos funding it, lots of reasons to be optimistic. Let me tell you about MongoDB. What's the only thing faster than the AI market your business on MongoDB? Don't just build AI, own the data platform that powers it.
- [05:26]
Brian
Another comp investors would certain look at would be Rocket Lab sitting at just under 50 billion. And there'll be multiple players in launch, that is for sure.
- [05:39]
Tyler
Well, we have some heartbreaking news. Heartbreaking news. Apple has scrapped plans for a cheaper Apple Vision Pro display and is winding down work at Samsung. This is from MacRumors. Really hits me and the other three Apple Vision Pro fans particularly hard.
- [05:57]
Vincent Weiser
Brutal.
- [05:58]
Tyler
Who did I talk to? I talked to somebody who said that they actually are a daily user of the Apple Vision Pro. I thought I was in the top 1%.
- [06:05]
Brian
Was it the founder that's making?
- [06:08]
Tyler
Yes, that's right. He says he watches it, he uses it every night or something like that. That's a lot of Apple Vision Pro use. Obviously the product never really found product market fit, although we have one in the studio. We've been having fun with it. I still think it's an incredible piece of technology, but a little bit of a chicken and egg problem. The develop never showed up and it was very expensive, very heavy, very cumbersome. It requires a lot to put that thing on to watch Lawrence of Arabia, but when you do, it's worth it. It's worth it. What did I watch most recently? I watched Dunkirk in it and I watched Godfather Part II and Master and Commander. Master and Commander. That's a great movie, especially in Vision Pro. Really you want to be in the cinematic feel. Feel like you're on a warship. So Apple has reportedly stopped development on a cheaper display. For a low Vision Pro, this feels like what the industry needs to move forward. The actual display was fantastic. It just needed to be cheaper and lighter so more people could get them. That at least was my thesis. But Apple disagrees with me. What do I know? So the supplier, Samsung Display, expected to formally end the project by September. And if you remember, there were rumors of the crazy hoops that Apple had to jump through to get that incredible display because they really leapfrogged Meta, who had been working with the acquisition of Oculus, and they'd been improving the display fidelity. They got rid of the screen door effect, they were increasing the resolution per eye. Everything was getting better about that display, but on a very linear trend. And allegedly what Apple did was they went to Samsung and said, we know that you are working on next year's display. You're also working on displays two years out, three years out, four Years out now. What's the problem with the one that's four years out? Well, it's amazing, but it's not ready for manufacturing at scale. It's not on an automated line, it needs a lot of manual work to get it to actually produce. And there's crazy low yield. So in chips, in displays, yield rules, everything. If you run the machine a bunch of times, you want to get 99.9% yield. 90%. In the early days when you're prototyping a new technology, you might be getting just a few percent yield. And Apple said that's fine, we'll just jack up the price and pay a ton for these cutting edge displays. Jump to the front of the category with the best display technology. We'll charge a fortune for it, but we'll have the best product and that will be our market entry strategy. And so I was waiting for that display technology to commoditize because it's been a few years. I thought it would just naturally get cheaper. It probably has, but it has not solved the problem of virtual reality, augmented reality. We haven't seen someone pick.
- [08:55]
Brian
Do you think they're just bearish on the near term of people watching movies?
- [09:01]
Tyler
Maybe. Yeah.
- [09:02]
Brian
In, in, in VR. Because I don't. They're certainly not stopping R and D on their specs and they're in their sort of everyday glasses product.
- [09:13]
Tyler
Yeah.
- [09:14]
Brian
And so it might just be that, that they studied you and found that you're built different. You're one of one, the only person on earth.
- [09:22]
Tyler
No, no, I mean truly like sitting down and watching a full movie is a rare experience today. People aren't reading, they aren't watching movies, they're just scrolling. And people seem to be satisfied with their phone. And also the nature of a Doom scroll is somewhat interactive, somewhat multiplayer, although obviously people see it as brain rotting and very isolating. There is a game to be played by actively scrolling, which is something that doesn't require virtual reality, certainly not enhanced by virtual reality. But then also, sometimes you want to read the comments, sometimes you want to send it to a friend, sometimes you want to fact check it and ask AI about it, or spin off and do something else and go to someone's profile. So I think that the number of taps and user interaction experiences in a Doom scroll session are obviously much, much higher than watching a film which you just put on. And hopefully you don't pause it at all because you're engrossed the entire time from start to finish. And so if that becomes as scrolling means more and more. Maybe the VR experience is less, less and less relevant. So the cheaper display on the Apple Vision Pro or maybe the Apple Vision Slim or mini or something, I don't know. They could have used a different name. Pro always, always left the door open to just the regular Apple Vision at a more approachable price point. But the cheaper display that they were working on would have cut the headset's pixel density roughly in half. That's not what they should do at all. They need to keep that pixel density because that's the best part of the experience. The move likely reflects Apple's broader shift towards smart glasses. Bloomberg's Mark Gurman previously reported that Apple paused work on a lighter, cheaper Vision Air. Yeah, that's the term. In October 2025 to fast track its Ray Ban style glasses effort. This does not mean the Vision Pro itself has been canceled. Apple refreshed the headset in October 2025 with an M5 chip which does very little. Slightly better tracking. I think you can run some applications at slightly higher fidelity, but it is by all accounts essentially an identical device. But they are long overdue for a proper refresh. If they were taking this seriously and thinking about this as a true growth driver, I think they have recognized that this was an experiment that needs to be put on the back burner for at least a little bit. And so this report only suggests the cheaper display project is no longer moving forward. So the Vision Pro fans have hope. It's not fully canceled. Maybe there's something else going on, maybe there's more in the works. But anyway it's interesting with all the acceleration and AI I was hoping that we would get some advancements in this since it is an adjacent technology but we've been few and far between on the updates. We got to get an update from the Big Screen VR team because.
- [12:17]
Brian
That's right.
- [12:17]
Tyler
They have done a great job creating high fidelity VR that's also lightweight but it needs to be tethered to a PC. It's a little more prosumer, a little more dev kit styling.
- [12:28]
Brian
VR really attracts these like visionary chat the coolest guys that are willing to go that seem. No, no, I'm actually I could make that joke but I won't but just people that are willing to just continually look silly for a long time to ride through the hype cycles and just like keep building. I think Big Screen is, is an example of that. The founder that we had on that has a very cool Glasses demo product. He's I from my understanding probably using AR and VR more than anyone else on the planet. Like, so committed to just, like, winning.
- [13:09]
Tyler
Yeah.
- [13:10]
Brian
And so I really appreciate that about the category.
- [13:12]
Tyler
Yeah. Let's see how Apple's doing on the news. Are they trading up or trading down? I push the button. Will it come up? We'll see next time. Anyway, let me tell you about figma. Figma agents. Agents, meet the canvas. Your AI agents can now create and modify your FIGMA files with design system
- [13:29]
Brian
context production teams swearing at the team chat.
- [13:33]
Tyler
Well, here is a crazy story. I mean, it's such a minor story, but it certainly grinds my gears. I think we're going to dig into it and see what you think, what I think once we dig into it. But Getty Images, we know and love them. From their trove of Silicon Valley titans photographed at Sun Valley. At Sun Valley, which is happening now. If you don't have a Getty Images subscription, sign up now because you're going to be first to know when the new Josh Kushner paparazzi photo drops. But Getty Images was planning to merge with Shutterstock. These are two essentially stock photo sites. In theory, they should be absolutely decimated by AI image generation. Meta put out a new one. Museum Muse image. Nanobanana Pro has been fantastic. Images 2 from OpenAI has been really good. And like, they're honestly getting to the point where a lot of the example images are just like, okay, that's just a photo. I saw Adam Mosseri posted some on Instagram and I was like, is this AI, or did you just take this photo? Like, it's just you. And then he did a couple with filters and hair and crazy hair. And those are cool. And that breeds creativity. So I think there's a lot of value in the technology. But in terms of just like I'm trying to illustrate, I'm trying to make a point visually. I need a picture of a forest. AI image generation is very, very competitive with the stock image industry. And this should have. This should be a business that's sort of affected like the way, you know.
- [15:09]
Brian
Yeah. Imagine a lot of these business, their net new revenue over the last couple of years is just working with labs that need licensing.
- [15:19]
Tyler
Yeah, all sorts of things. So certainly in the face of growing competition, consolidation of an industry is very normal. That makes a lot of sense. This doesn't. This doesn't seem like it should raise any regulatory flags. And yet it did. In the United Kingdom, Getty Images has called off the Shutterstock deal after the UK created some barriers around it. So the $3.7 billion deal would have created a visual content company to offer a more expansive library to users, says the Wall Street Journal. So on Tuesday, Getty delivered a written notice to Shutterstock terminating their planned tie up, which was first announced in January of 2025 and received clearance from the Justice Department in America in April. So pretty quick turnaround in the United States, the $3.7 billion deal would have created a visual content company able to deliver a more expansive library to users, helping meet booming demand for licensed images and videos as artificial intelligence disrupts the business of content creation. Getty stocks slipped 1.7% in premarket trading. Shares of Shutterstock ticked up 1%. So maybe the Shutterstock shareholders are happy about remaining an independent company. The termination came after Getty last week said that its board voted to not proceed with the deal if it meant selling Shutterstock's editorial business, a condition required by the UK Competition and Markets Authority. So the decision to by Getty to abandon its merger with Shutterstock was ultimately a commercial choice. So the chair of Independent Inquiry Group that led the CMA's investigation of the deal, the Inquiry Group found that a loss of competition between the two businesses would reduce choice for UK media outlets and could lead to higher prices. And I would, I would assume that this would give them some sort of pricing power in the face of, you know, essentially unlimited free editorial images in the form of AI generated images. If you want to go with the real thing, you have to pay a little bit more. But that sort of offsets all the pressure of the customers that are leaving and no longer paying because they don't need to pay, because they're generating them with generative AI. So this felt like a very logical story and I'm a little bit uncertain that this is a good decision for the UK to help these businesses. It feels like it's just going to wind up hurting both of them.
- [17:43]
Brian
Yeah. Are UK media outlets not allowed to use AI content?
- [17:48]
Tyler
I don't think that there's any broad rule against it, no. So they. You would. It would be a deliberate choice and I'm sure there's plenty. I imagine that the Financial Times does not use AI images and that's by choice and they make that very clear. And there's probably a disclosure and if they, of course they will use an AI image, if they're talking about the AI image industry. But in terms of what you see on the front page of the Financial Times, it's almost always editorial images.
- [18:15]
Brian
Yeah.
- [18:15]
Tyler
That image, this is from Reuters and that is an editorial Distribution and something that is licensed. And occasionally they need a photo to illustrate something and they might use.
- [18:29]
Brian
Okay, so I was trying to figure out why the headline number here was 3.7 billion. Because it was based on the January 6, 2025 share prices, not today's prices, which are far, far, far lower.
- [18:43]
Tyler
Yeah.
- [18:44]
Brian
Shutterstock is sitting at $329 million market cap. Getty is at $340 million market cap. So these businesses have been really, really beat up over the period since they decided, hey, we should tie up.
- [19:00]
Tyler
Interesting. So is there a potential.
- [19:02]
Brian
So the uk, I think regulators are actually trying to just kick these companies while they're down.
- [19:07]
Tyler
Is that what's happening? Or is it a situation where Getty. I mean, that is possible. I mean, it could just be, like, just a complete mistake. I mean, as you go back to Meta and you think about the. The US Regulators blocked Meta from buying a VR fitness company that they said would create a monopoly in the VR fitness industry. And of course, the VR fitness industry never happened. It's not an industry worth monopolizing. And so if you think about the business model of Quest, would it have been advantageous? Maybe. But it's worth letting Meta take a shot at that and see if having a VR fitness company in the portfolio will actually get that product to, you know, to scale. Tyler, what do you have to say about that?
- [19:55]
Brian
Another interesting anecdote is the UK blocked Meta from buying Giphy in 2022.
- [19:59]
Tyler
Yes.
- [20:00]
Brian
So to prevent a monopoly in GIFs, I presume this could be pretty dangerous. Yes.
- [20:05]
Tyler
Which is also odd. Does Giphy power the GIFs that you see in imessage? You know what I'm talking about. When you go to, you go to. There's Genmoji, there's stickers, and then there's also hashtag images, and you can find images and you can send different pictures and gifs. I wonder if these are from giphy
- [20:29]
Brian
or it's powered by Bing, not powered by Bing.
- [20:31]
Tyler
Okay, so there's competition in this market. Yeah, I don't know.
- [20:36]
Brian
Amanda says Canva doesn't label AI in their stock images. That's so annoying. So, yeah, I didn't even know Canva was a player here, but it would make sense.
- [20:46]
Tyler
So if you're in Canva and you want to have a picture of a forest on your greeting card, and you can pick from a library, some of them will be generated, some of them won't. And they probably also have a generative AI tool where you can generate a new image. But if you're just looking for a generic stock image that's already been described. You can probably pull from whatever library is out there.
- [21:05]
Brian
Anyway, yeah, Canva partners with Getty Images, but then they're also featuring generated images.
- [21:11]
Tyler
Anyway, let me tell you about CrowdStrike. Your business is AI. Their business is securing it. CrowdStrike secures AI and stops breaches. There is another interesting article in the Wall Street Journal on the COVID the front page of the main section.
- [21:29]
Brian
The.
- [21:30]
Tyler
What do they, what do they actually call, what do they actually call the main section? There's the business and finance section. Is this just world news? I don't know. Anyway, on the COVID of the Wall Street Journal, it's the world's creepiest office and people won't stay away. This is the New York complex vacated by IBM has become a magnet for urban explorers. We have a video of this place. And if you're a scrappy startup looking to expand, this might be the key to success. The ultimate lock in factory in sort of rural New York. I think we'll get into it. So this is in Somers, New York. I don't know exactly how far away that is from Manhattan.
- [22:10]
Rodrigo Leong
Yeah.
- [22:10]
Brian
So if you were like a Neolab and your name was like Ominous Intelligence. Yeah, this could be a great sort of hq. Potentially your first little micro data center. Very James Bond villain sort of vibe. And yeah, looks like you could make it really, really homey.
- [22:33]
Tyler
How far is it from Manhattan? Let's see. Okay, it is one hour. You can be in the city in an hour.
- [22:40]
Brian
And imagine walking these halls late at night after a long day at work.
- [22:45]
Tyler
Yes.
- [22:48]
Brian
It wouldn't be creepy at all.
- [22:49]
Tyler
Yes. Robert Carlton was getting the mail one day in April when he saw a group of of teenage boys sprinting away from nearby woods. He cut them off at the road and raised his arms. I just said stop. It's over. The 62 year old retired engineer recalled. Soon he said three pursuing New York State police troopers emerged from the treeline and arrested seven juveniles. The criminal charge, trespassing on the former IBM campus here. Disrespecting international business machines. Don't do it folks. The long vacant site has become a magnet for so called urban explorers who prowl abandoned malls, hospitals, power plants, amusement parks, factories and any other unused disused structure they can breach.
- [23:36]
Brian
Enough of the graffiti.
- [23:38]
Tyler
Yeah.
- [23:38]
Brian
Do you think put a center here,
- [23:40]
Tyler
we got to figure out how much building.
- [23:42]
Brian
How dare they write all over international businesses. Yeah, exactly.
- [23:50]
Tyler
What was the, what was the IBM? AI Watson. Watson the machine. What do you mean?
- [23:55]
Brian
Was was probably still at the frontier.
- [23:58]
Tyler
Still at the frontier. It was super intelligent at at Jeopardy. The global Urbex, which is short for urban exploration phenomenon. Urbex, isn't new, but it's been turbocharged by artsy videos on Instagram and TikTok that Spoiler Spur others to create their own posts, luring more curiosity seekers. Police in Livingston, New Jersey recently warned people to stay out of the closed Livingston Mall property. Jacksonville Beach, Florida police issued a similar caution in April about the shuttered Adventure Landing amusement park. Going into an abandoned amusement park that is thrill seeking at its best. We are aware of a TikTok challenge to explore the property. Who's doing these TikTok challenges and should they be allowed to post those? This is dangerous for some people. I mean seriously, you go in there, there's a lot of broken glass and who knows about the structural integrity of a building that hasn't been inhabited in years or decades.
- [24:54]
Brian
Could be very Is it on the market?
- [24:56]
Tyler
Well, we have some news about that. I don't know if it's actually on the market, but I imagine if you make them an offer they can't refuse, this property could be yours. So Sebastian Capital, the Manhattan company that manages the 723 acre site, that's a lot of size, says it has beefed up security and appreciates help from police.
- [25:17]
Brian
So I'm shocked by the YouTube comments.
- [25:20]
Tyler
Yes.
- [25:21]
Brian
That are wholly coming to the defense of this building. They're saying. I hate there's a class of people who see something like this and feel compelled to start breaking things. Why do people vandalize these kinds of places?
- [25:33]
Tyler
Interesting.
- [25:34]
Brian
I can't believe these are all the top comments. I can't believe people go in there busting up the place.
- [25:38]
Tyler
That's crazy. I would have sort of expected people to be on the side of the urban explorers on the side of the TikTok challenge challengers. Andrew Proto, a defense lawyer, said a 15 second clip isn't worth a criminal record. Don't do it if you've already been arrested. You're not the first call we've taken this month and you won't be the last. Proto says he has represented or advised several miners arrested on the campus. The summer's town court. Town court clerk said some defendants received a six month adjournment in contemplation of dismissal, meaning charges will be dropped and their arrest will be sealed if they avoid trouble. Some explorers who have posted about the IBM site say they follow an observe and preserve ethos and reject vandalism they say they're driven by curiosity, the thrill of roaming forbidden spaces, and a zeal to. To document discoveries and that they're careful and know their limits. Quote. It actually gives me hope when I hear that kids are out there getting into trouble, said Bradley Garrett, a cultural photographer and author of the book Explore Everything, Place, Hacking the City, about his own Urbex adventures. He sees urban exploration as a gateway drug, in a good way, sometimes into intellectual curiosity about history and culture. So you go, you break into this abandoned building, and then next thing you know, you're an IBM consultant driving enterprise value for S&P 500 companies. Traveling businessman. Could happen. Who knows?
- [27:03]
Brian
Could happen. Raghav wants to turn it into an aman.
- [27:06]
Tyler
Aman would be like data center. Seems obvious, depending on our.
- [27:10]
Brian
What about the first aman with a data center with some local oath so quickly.
- [27:17]
Tyler
You asked about the price in 2016. In 2016, IBM sold the property for $31.75 million. And it's owned by a LLC that shares a Fifth Avenue address with Sebastian Capital. So everyone suspects Sebastian's in on the deal. A plan to convert it to a private school foundered during COVID and Sebastian said it is considered. Yeah, foundering is like failing. But yes, founders. So floundered would be another appropriate term for what happened. But it was not successfully converted into a private school, obviously. But if you want to take a wild swing, go pick it up. Make Sebastian Capital an offer. Let's see. I wonder what it would trade for today. Lots of work to be done.
- [28:06]
Brian
Car and drive quickly.
- [28:08]
Tyler
Tyler had something on the IBM complex.
- [28:10]
Brian
Yeah. So, okay. Planning to go 1.1 million square feet. Historically, you'd see, like, I think something like around 10 watts per square feet. Okay, maybe it's a little bit higher tech, right? This is IBM 80s. An estimate I think is reasonable is around 20 megawatts.
- [28:27]
Tyler
20 megawatts?
- [28:28]
Rodrigo Leong
Yeah.
- [28:28]
Brian
So you're looking at a small data center.
- [28:30]
Tyler
Is there any natural gas in the ground? Can we frack. Can we put solar panels on the roof? Can we build a. A nuclear reactor there? What are our options if we want to get this thing churning out tokens? Turn it into a token machine. Interesting. We should go check it out anyway. Let's move on to the New York Stock Exchange. Want to change the world? Raise capital at the New York Stock Exchange. Just do it.
- [28:54]
Brian
And Jordy car and driver says 2026 Lucid Gravity available with no interest due to. No interest.
- [29:03]
Tyler
What?
- [29:04]
Brian
Several months after launching the 2027 Gravity, Lucid still has plenty of 20, 26 models. So it's offering customers an interest free loan incentive.
- [29:14]
Alana Palmito
Okay.
- [29:14]
Tyler
I wonder how long there's no interest on the loan. That seems like a good deal. The Lucid is a very well reviewed car. Very luxurious interior, very polished product for some of the higher, more performance oriented trim. Incredible zero to 60 times, incredible range. I think Larry David has one. They're well reviewed cars. But it's a electric vehicle which has high depreciation. And then you're signing up to work with a company that a lot of people think might not be around forever. So what does the maintenance and repair and flow of products and new parts look like in a decade? And so that is a risk factor for a lot of people. But the Lucid air, gravity, I think it looks sort of cool. It's sort of like a. It's a little bit like it wants to be a minivan. It's trying to do the job of a minivan. But they didn't just lean into the sliding doors. At least the Model X realized that what makes the minivan great is the accessibility of the doors. And they made them cool doors by making. Making them gullwing or butterfly doors.
- [30:23]
Brian
Yeah. The problem here is that when I looked up Lucid Gravity for sale, I'm seeing a 2026 with just 3,000 miles. That's selling for $125,000. That's a lot of dollars. And even if you're paying no interest, it's probably losing. It's depreciating thousands of dollars a quarter. And so it's still going to be a rough ownership experience.
- [30:50]
Tyler
Yeah. Yeah. Will be interesting to see where they end up. I know they already have some big investors and potentially some corporate partners. It could eventually be rolled into another organization as sort of the EV strategy of a larger automotive group. Who knows? Did you want to look at end of stay? Did you see this? We gotta pull up this video because we were talking about exactly this. The 964 Cabriolet Junior is a Porsche 964 that has been shrunk. Actually shrunk. Exactly what you said. Look at this video, Corey. This is what you asked for. Fully customizable. And look at this. It looks normal size. But wait until this guy gets in it. This is amazing. So it is a go kart that has the bodywork of a Porsche. And so you can get one of these. They go like 60 miles an hour or something like that. Like they're pretty fast. Yes. So I think if you put a governor on this vehicle, you'd have what you want, which is the vehicle for the kid. That is fun, engaging and highly stylized and made with precision. The group behind this is called End of Stay. S T A Y has periods after it, so I imagine it's some sort of acronym, but what a while.
- [32:19]
Brian
They did it.
- [32:20]
Tyler
Yes.
- [32:21]
Brian
They did it.
- [32:23]
Tyler
They did it.
- [32:25]
Brian
I'm interested.
- [32:26]
Tyler
You can see the YouTube video here. The preview of the 964 Turbo Junior High Performance version. It's an absolutely crazy, crazy video that I got organically served to me and I was like, this is what we've been looking for for sure. This is exactly what we were talking about.
- [32:43]
Brian
I need one.
- [32:44]
Tyler
I think you do. I need one anyway. GPT Live, a new generation of voice models for natural human AI interaction launched today from OpenAI, rolling out to ChatGPT starting today, taking shots. That. That guy on Instagram who's unsatisfied with legacy voice models, it's a lot smarter.
- [33:05]
Brian
I have a feeling he's going to find a way to keep using the old models.
- [33:09]
Tyler
Oh, maybe. Or he'll just become. Who's a Pliny the Liberator. He's sort of the Pliny the Liberator of voice models in that. I know he's taking shots and he's like very unhappy with the quality of the voice models. But at the same time he does a great job of actually exposing and finding limitations. Not necessarily jailbreaks, but he, he. By watching those videos you can very clearly understand. Okay, I understand what's going on here. It's not. It doesn't have tool use, so it can't count. It can't set a timer. It doesn't have, you know, long running context window that can stay with you for a long time. So it gets, it gets lost. Can't talk to each other. There's a whole bunch of different ways. And once you have all of those documented by just a. He's basically like a white hat hacker.
- [33:54]
Vincent Weiser
He found a bunch of benchmarks.
- [33:55]
Tyler
Oh, wait, what?
- [33:56]
Brian
He found a bunch of like, good benchmarks?
- [33:57]
Tyler
Yeah, yeah, yeah. Basically benchmarks. Like if you can satisfy his videos and run those experiments again in a satisfying way, you probably have a better product at the end of the day. So I don't know. I think it's, I think it's cool. I'm excited.
- [34:10]
Brian
Yeah. Super excited for this one. I wonder if the.
- [34:15]
Will Mayer
Yeah.
- [34:15]
Brian
The real time nature unlocked, like under unlocks like almost like a new kind of like pod, like real time, like podcast format where you can just actually Have a conversation about a topic. Yeah, right.
- [34:28]
Tyler
Yeah, we should have it sitting right here. It has a full duplex architecture, which means that it can listen and speak at the same time, so it can jump in appropriately.
- [34:37]
Brian
And it can also route certain questions to smarter models to run in the background. You can still have a conversation. Yes, very cool.
- [34:45]
Tyler
Which is great, because my default flow, like if I'm driving, which I don't think I should be doing, but I will tap the record button, not the voice mode, and I will dictate a really long prompt, and then I will click send, and then I will wait for it to cook, and then I will have it read that back to me. And that's all just like a couple extra clicks, a couple extra steps to get what I really want, which is a conversation. I was interested about the idea of, of where this goes. Is there a world where you are talking to a model and you can have sort of multiple threads of conversations going within one conversation? So you can say, hey, I need you to go and do a deep research report on IBM Watson. And it goes and cooks on that. And then while it's doing that, you're still talking to it, and you're still having a conversation. But then you also might say, well, catch me up on the latest news. And it has that at the fingertips. So it can talk to you about the latest news. And then you can go and it can say, hey, by the way, I'm done with the report, or I'm done with the code that I wrote. But you're talking to me about other problems in your organization, other decisions, other research projects that you have. And it's all done in one continuous conversation, like me interacting with you. We might. You might delegate something and then continue the conversation and then move on. Oh, I got to text this person. Okay, I'll text them. They'll do that. They'll come back to me in 20 minutes with a revision to the thing that we're working on. But in the meantime, let's talk about whatever else we got going on today. So interesting to see where this goes. In other OpenAI news, GPT 5.6 SOL, along with Terra and Luna, will launch publicly this Thursday. Preview access is expanding globally. Lots of people are having fun with this. Some people got early access. Other people were joking about clearly not getting early access, but wanting early access. But a lot of people are having fun.
- [36:45]
Brian
What did John Palmer say?
- [36:47]
Tyler
What'd he say? He's in here?
- [36:50]
Brian
No, he had a.
- [36:51]
Tyler
He has one. He says, it seems I'm allowed to talk about five, six now. I wasn't one of the testers, but I heard it's really good again. I haven't used it yet, but this will probably be my default model from here on when I get access. It's a good one. People are having a lot of fun. Kit Langton says I can finally talk about GPT 5.6. I've been using it for many months, if not decades. And what is glaringly obvious to me now as I look back on my life, is that you did not have access to it. It's very fun. People are very happy with it. Interesting. There's a. There's a little bit of a fork around. Like when how the vibe around 5.6 is different than fable 5 when how interactive it is versus somebody said like Fable is like lightspeed across the galaxy and Seoul is like a Porsche, the Nurburgring more engaging. I don't know. It seems like we're entering some fragmentation and like the right tool for the job.
- [37:51]
Brian
Yeah. Ethan says my big takeaway is that both Sol. Ethan had access, so he says both Sol and Fable represents. Represent jumps over previous models and have opened a large gap with the next best AIs. People will have preferences for one or the other. But if you're doing any work where better intelligence matter, those two models are your only choices. Dean says, I think for me, the main takeaway with Soul and Fable is that I can't remember a time when the leading models were a so decidedly ahead of everything else and be so distinct from one another. So, yeah, a lot of people are talking about how they're using the models together.
- [38:26]
Tyler
It's probably a function of just tighter distillation protocols. Like there's less pollution. Also, not everyone's training on the exact same data anymore because it used to just be everyone just trains on the entire web corpus. And now each company has different data sets, different data brokers, different usage patterns that they can train on, and then different sort of research tastes. So go give it a try.
- [38:54]
Brian
I forgot to mention this. GPT 5.6, Soul's world leading in computer use. It made me use it 100x more. When we lost access to 5.6, I quickly started to go insane without it. So yeah, people in the early access program obviously lost access for a couple weeks.
- [39:08]
Tyler
Sure.
- [39:09]
Brian
Due to the D.C. action. But yeah, I saw some people saying like, what are some good uses for computer use? And it's like anything on your computer. What do you use your computer for? They're not all going to be great uses. But I'm curious, I still think it's
- [39:26]
Tyler
worth, it's always worth popularizing those genuinely useful patterns. I mean like deep research was that in many ways just a very. Like, it gave you a 20 page PDF report on the topic that you were asking for and it did a lot of the work for you. And I still think the Come up with a good prompt idea, find the right reason to use AI is a problem for a ton of people. There are plenty of people that adopt, adopt the latest AI tools immediately, find what the model is good at, how to use it, how to use it profitably, effectively, not waste tokens, not waste their time. But other people need ideas. They need to know that there's a new capability. You see this with the chat app. You see this with the voice mode, where people are judging a model based on hallucinations that disappeared a year ago or judging a model based on some. Oh, it has a cutoff window and that hasn't been a thing for a year. But it still burned its way into like the memes of the online culture. And thus people need to be updated on that. And so I'm in favor of coming up with good computer use demos. The real one is just can it play counter strike effectively? That's the real computer use test. Can it rank me up to Global Elite? Can it downrank me so I can smurf a little bit? This is. This is the future. This is what I want. Anyway, let me tell you about Railway. Railway is the all in one intelligent cloud provider. Use your favorite agent and to deploy web apps, servers, databases and more. While Railway automatically takes care of scaling, monitoring and security. I'm extremely excited to welcome our next guest to the show. We have Vincent Weiser from Prime Intellect. He's the co founder and CEO and he has some amazing news for us. Tell us what happened, then we'll dig into the news, the market, the story, the company. But first give us the news because Jordi's already warming up over here.
- [41:32]
Byron Boots
Amazing.
- [41:32]
Vincent Weiser
Yeah. So we've announced that we've raised 130 million at a billion with prime and build the open superintelligence stack.
- [41:43]
Tyler
It's fantastic. Congratulations. Yeah.
- [41:49]
Brian
What we were talking about before the show is the ratio between dollars raised to run rate. Yeah, absolutely incredible. Yeah.
- [42:00]
Tyler
How much have you raised before this round?
- [42:04]
Vincent Weiser
Just 20 million total. So I think we've actually got to this run rate on like less than 20 million and spend.
- [42:09]
Tyler
That's crazy.
- [42:12]
Brian
Which is north of 100.
- [42:14]
Vincent Weiser
Yes.
- [42:15]
Tyler
That's amazing.
- [42:16]
Vincent Weiser
Yeah. We doubled it I think since we actually closed the fundraise to 100. So basically on track to grow much more from here on.
- [42:25]
Tyler
Okay, so reset me on the latest and greatest in the actual product offering. What customers are coming to you is it? I have used a frontier model to you know, figure out that AI can in fact do some agentic workload within my organization. I want to cut cost and you're going to RL an open source model for me. Fine tune it and then am I paying you for tokens? Am I, are you getting me GPUs? What is the full suite of products that you offer customers these days?
- [42:56]
Vincent Weiser
Yes. So basically it is kind of like the full stack to do training, deployment and continual improvement of models. I think customers basically come to us for anything ranging from compute to inference to the full RL and pulse training stack to train models. And I would say it's like customers coming from different buckets and categories. A lot of them are like the AI natives who are basically starting out and oftentimes also being multi model.
- [43:25]
Will Mayer
Right.
- [43:25]
Vincent Weiser
Like they use the frontier models, they use open models for different use cases like good examples like RAM for example as one customer more in this like a native bucket and a lot of the big AI native startups. But then we've also increasingly been able to attract a lot of the new AI labs like a lot of the Neolabs. So a lot of those are using our full stack from like large scale clusters to our pre training and post training and RL stack. But then also increasingly like traditional enterprises and even sovereigns coming to us who want to have their own end to end stack that they can run like on prem. So how I see this is to some extent it's like there's just increasingly I think like a demand for having your own like software and AI stack.
- [44:10]
Will Mayer
Right.
- [44:10]
Vincent Weiser
It's like your own open end to end stack. But I think this is almost like complementing in many cases like the other like frontier like models and stacks and
- [44:19]
Tyler
you're using sovereign in not just the geopolitical sense but also if you're a Fortune 500 company you want to own your stack from start to finish potentially.
- [44:29]
Vincent Weiser
Exactly.
- [44:30]
Byron Boots
Yeah.
- [44:30]
Vincent Weiser
I think that there was a lot of reasons talk about this obviously like folks like Satya and Alex Carr were like also making, making those, those points and arguments over the last few weeks. And I think it's increasingly something I think where like a lot of like enterprises want to basically build this like compounding data mode and flywheel where ultimately I think the future that we are starting to see as a lot of these companies want to build basically self improving agents. And the way to do this I think is generally you have an RL environment for use case, you scale on it and then you ultimately deploy that into production and then continuously improve with the user interacting with that agent. It's almost like the Tesla autonomy like levels but like for knowledge worker agents. So I think like the RAMP example I think was one that people really resonated with for basically them being able to within a week and less than 50k of training spent outcompete a frontier model at automating spreadsheets and finance at a fraction of the cost of running the cheapest models. Basically it's like they were able to outperform oppos at a fraction of the cost of haiku and like 30% faster, like much more tailored to the use case. So I think in many ways these specialized agent use cases are a big unlock. And I think in many ways you still need the godlike big mega model to do the orchestration or planning. But I think oftentimes execution I think happens can happen with these specialized sub agents. So I think those have been extremely, I think like fruitful and useful for a lot of the companies adopting and training their own agents. Then I think the other big trend is just like an explosion in new entrants that are taking more training seriously. Obviously hundreds of neolabs really got stood up in the last probably 12 to 24 months. So we started powering a lot of those with our full stack, including with also large compute cluster. Nvidia also joined us as part of the round and we've since day one basically operated large clusters. And this is in large part why we need so much money. It's like to basically be standing up more and more GPUs. Like right now we run like 15,000 GPUs and scaling to over 30,000. So this is like a lot of the capital needs even.
- [46:50]
Tyler
And walk me through, when you're pressing the huge cluster button, is that because there's broad demand for specific models that you need to inference at scale and so there's just a lot of inference demand. Or is it that for the level of training that you're doing, you need to be cluster scale to even kick off the training run?
- [47:13]
Vincent Weiser
Yeah, so basically it's like for all the needs from training to inference, you need obviously compute. And in a lot of ways our customers are doing a lot of these large scale training runs with us leveraging our Full stack, including our compute.
- [47:27]
Tucker Brown
Right.
- [47:27]
Vincent Weiser
So it's like pre training phone parameter models, like for example what we did with RC like Q4 last year or really large also post training runs and our other runs. Right. So it's like increasingly basically we abstract all of that infra way. So basically people can just like hit a button to do a post training run without having to like log into GPU cluster and managing the bare metal GPUs. So we basically abstract a lot of this like GPU complexity away. But yeah, like for that we basically also ramping up our own clusters to basically just like serve hundreds and thousands of customers in parallel on those.
- [48:04]
Tyler
Yeah. So what you're saying is like there might be a situation where I have a 50k budget like you gave with the ramp example. I have a 50k budget to do some post training and I need to deploy that 50k into thousands of GPUs but only for a short amount of time. And so the budget's actually going to be relatively small. Even though if I were to buy, buy all of that, it would be way more than 50k, millions and millions of dollars. So you sort of absorb some of that cost, orchestrate it, abstract it away and then you can deliver for the customers just a slice of.
- [48:38]
Vincent Weiser
Yeah, so basically I think this is like also big unlock, like also on the inference side, right. Where customers don't need to like front load hundreds of mints and capex bands for large data center commitments. So we basically also increasingly serve a lot of inference. So it really is the full stack. And I think a lot of the compute we have like quite a clear like visibility into the demand just because people come with us with large requests or large contracts to basically do larger training runs and deployments. So we basically just like need to secure the compute to, to be able to fulfill all of those. And I think like right now we would probably be at like many orders of magnitude more compute. Like compute, but also revenue if compute wouldn't be as constrained as it is right now. So it's like right now I think like in the current environment it's like basically GPUs are pretty sold out for the next few months and for almost like the rest of the year, especially if you want to like stand up data centers in the us So I think this is actually like, I think the main bottleneck to, to scale right now for anyone in AI. And this is I think what we've been able to really scale through extremely well because we've basically with almost every data center out there since like over two years to basically able to stand up like data centers and different geographies and orchestrate them globally.
- [49:59]
Tyler
Yeah.
- [50:01]
Brian
Any predictions, forecasts for American open source over the next six months?
- [50:07]
Vincent Weiser
Yes, no, really great question. We joined also like Nvidia to help them train nemotron. So they're doing the Nemetron alliance and Collision. And so we are one of like I think 10 or so partners. So it's like so like I can't speak about like all the things there but I think like in general both on that front and other things we
- [50:28]
Brian
won't tell anyone, we won't tell anyone exactly anything.
- [50:31]
Tyler
Just between us, between us, just the three of us.
- [50:36]
Vincent Weiser
So basically I think like in some ways like the leading American efforts actually are Nemotron and actually like RC with a Trinity model. So both of those we're like very deeply involved in and so I think those will continue to, to like lead like with like American open source. Like we have like some of our own models cooking and then like we help a ton of customers there. So I think there will actually be like a huge resurgence of like frontier open models coming out of the US also led by players like NV itself and a lot of our customers and partners. So yeah, I think in general I think the interesting geopolitical question is actually what happens with Chinese open models, right? It's like obviously we've seen news that like China might consider like export restricting them like and like there might be policy interventions on both the Chinese and the US side, right? So it's like I think this is, I think actually in some ways like the motivation to build a stack and to also push American open source forward is to have like less reliance on molds that might get banned any day, be it all more close, right? It's like I think this is something increasingly like a lot of enterprises are starting to realize that like there's actually a huge dependence right in a sense on like many from the policy side. So this is something I think where we want to just like enable everyone to have like their own end to end front open stack to be able to create their own models. And ultimately I think like there will be like there's obviously a lot of like now like also Neol apps and a lot of them are actually like thinking about things quite in a quite open way. So I think it will be surprised that this may be one of the hot takes is to see more Neol apps release open models. Like a good example that we also partnered with recently was poolside, for example. People were expecting them to be closed, but they actually opened up their models and so I think there will be more of those. Especially given they're like hundreds of well funded neo labs now. I think there will be huge resurgence just like off like the age of research in terms of like these neolibes like pursuing truly novel directions.
- [52:40]
Tucker Brown
Right.
- [52:41]
Vincent Weiser
It's like going where like the big labs almost can't go necessarily taking big like bold bets that also might not pay off all of them. But like if you have hundred shots on goal, like some of them will probably pay off and result in interesting outcomes. So I think this is like really also I think what we empowering, right? It's kind of like helping these new neolabs and big AI natives and enterprises to move much faster and not have to basically all build the same stack each by themselves in house. Because almost a lot of them are like tiny teams of like tens of people instead of like thousands. So we're able to like help them move much faster basically. But I'm adopting our stack.
- [53:21]
Brian
When you hear of a, you know, major American tech company, let's say someone in the mag 7 that has extra capacity, do you reach out to them? Do you do, do you ping them? Are you at the scale yet that that a deal would be interesting to them or are they really searching for these, you know, $10 billion plus opportunities?
- [53:47]
Vincent Weiser
For sure. Like we already are sourcing pretty large clusters that is sometimes up to 5 to 10,000 GPU. So we're basically looking at every source and pocket of supply that we can find. We've literally turned every stone to find the last GPU available on earth. And we've been quite good at that in some ways. I think we're like that has been one of the core tenants almost since the beginning is that we really wanted to orchestrate the global compute supply efficiently. So we did a lot of optimization for tolerance and distribute training even in the early days to train across distributed compute. So it's definitely I think to this question, I think it's something that we're definitely considering. If there's anyone with some spare GPUs
- [54:38]
Tyler
you can always set up, that's great. All right. Back on China, do you have agree with my perception that if there is some sort of lockdown on Chinese open source export controls that would not affect.
- [54:56]
Brian
Yeah. Are they mad that American companies are distilling on or post training their open source models by design?
- [55:04]
Tyler
I thought it was goal of the project. But what I'm interested about Is
- [55:10]
Will Mayer
would
- [55:10]
Tyler
they try and claw back access to Kimi or glm, any of those models that are already been deployed? Because there's an element of like once the weights have been downloaded it's sort of just out there. Of course you could go and try and like sue every company but that's very hard if you're in an American jurisdiction and you're a Chinese company. But how would you see that playing out? Would it just be going forward, no more open source and that the CCP telling Chinese companies or some other shape of, of of like restriction?
- [55:44]
Vincent Weiser
Yeah, I think it's really hard to know. I think like a good example was like in some extent like the most popular Chinese malt already has been closed for example which is coin.
- [55:52]
Will Mayer
Right.
- [55:52]
Vincent Weiser
Like they've actually like changed their licensing stopped almost forcing. So I think there will be both like companies changing their policies. Right. But then also I think like probably like state intervention. Right. It's like in different shapes of form. So I think basically one can't rely on the steady stream of frontier open like releases out of China in many ways but it's like from different perspectives and I think similarly a lot of other sovereigns like obviously including the US also doesn't want to build on, on necessarily China's model. So it's like I think a lot of American enterprises obviously also like sovereign use cases like need American old model but I think similar for, for other continents. Right. So I think there's been a lot of work obviously and we're collaborating with people also across Europe, across India, across other GEOs. So it's like I think we'll see a much more like multipolar I think open like ecosystem of like open front. So I think that's like a healthy like balancing away from just relying on Chinese SO models even though they've obviously like been a great accelerant of like open source progress. I think, I think it's also unhealthy to rely just on that ecosystem. And yeah like I think we'll be like there will be I think a bunch of like quite unpredictable changes similar to like the last few months have been quite unpredictable I think to everyone involved. So I think this will continue to be the case in the sense that it will be like quite dicey policy like AI policy landscape for the next few years.
- [57:21]
Tyler
Last question. Data centers are data center construction, new data center construction deeply unpopular in America domestically. Simultaneously the workloads that are being done in AI data centers are basically latency is basically irrelevant for training certainly for most Inference tasks. If you're waiting a couple minutes for a result, an extra 500 milliseconds to get across the world isn't going to matter. This feels like a recipe for global competition for aggressive data center expansion. In a country that does see it favorably, that does see an economic boom from it or does have a lot of energy. What is the state of the non domestic, non US Data center build out?
- [58:09]
Vincent Weiser
Yes, so we're certainly building a lot of data centers and partnering with a lot of them outside of the US as well. But I think there's still a lot of demand actually for data centers in the U.S. i think even from a data perspective there's a lot of now the financial industries and highly regulated industries also adopting obviously more and more agents and compute. I do think inference still matters like speed in a sense. Like maybe not for like long running agents but like for a lot of use cases. People I think still really care about like having extremely snappy like responses. But I think like there's definitely, I think like a general boom in data center buildouts outside of the US as well. I think there's just like a limited set of countries who are like strong like allies with like ample amounts of like, like geopolitical stability but then also like energy and green fields and enough space.
- [59:01]
Brian
Yeah, US has unique access to natural gas which is if you're trying to bring energy online super quickly, it's hard to beat.
- [59:09]
Vincent Weiser
Yes. And I think we're seeing this across Europe even where there's specific regions that are much more active in data center build outs than others. And those are generally the ones that have their own like money internal as in them and like cheap energy and a lot of like also local support for it. So I think like in general from what we are seeing, I think there's like there, there is new entrance almost like to, to the data center build out. It's like in places like Australia and New Zealand like and like a small, much smaller place. Right. Like I mean Kazakhstan and others who like having a huge amount of energy and huge like and making huge bets also on data centers but while also being like allies of the US So I think those are the countries I think generally which will see the biggest boom in data centers. I think at the same time like I think we'll also continue to see a boom in U.S. data centers. But yeah, it's definitely harder to get data centers in the U.S. than outside of the U.S. and so it's something I think we'll see both continuously expand and I Think there might also be obviously like to your point, like a policy like, like updating like with upcoming elections and in midterms, things of I think like this, this whole almost like populism in the US around like data centers and like a lot of the kind of, I think public sentiment as potentially also like sovereign influences and other things like from other nation states who are trying to harm almost like the US Data center build out. So I think there's like a lot of things at stake for the U.S. right. It's like to, to not pull back on their data center build out, but I think there will also be specific states or like leaning in much more heavily than others.
- [60:45]
Tucker Brown
Right.
- [60:45]
Vincent Weiser
Like, I think this is already what we're seeing where like. Exactly. So it's like there's specific states in the US that are just like much more well suited to really ramp up data centers from here and. Yeah, and I think we'll see them ramp up globally and hopefully also outside of like beyond Earth. And I think that's the only way to really probably scale.
- [61:09]
Tyler
I love it. Well, thank you so much for coming on the show. Congratulations. Incredible progress.
- [61:14]
Brian
We love seeing you and the team win.
- [61:15]
Tyler
Yeah, it's fantastic. Have a great rest of your day. Say hello to Will for us and we'll talk to you later.
- [61:21]
Brian
Cheers.
- [61:21]
Tyler
Goodbye. Let me tell you about Cisco. Critical infrastructure for the AI era unlocks seamless real time experiences and new value with Cisco. Our next guest is Ben Thompson, the founder of Stratecherie. He's been on an Apple absolute tear during a slow news cycle. Does it feel like a slow news cycle to you?
- [61:41]
Mark Zuckerberg
I don't know it. And this summer is always slow. I, you know, I take a couple days or I slow down a little bit myself.
- [61:49]
Tyler
I feel like you've done a good job of like providing really insightful and interesting pieces during a slow time where. I didn't know that.
- [61:57]
Mark Zuckerberg
I wanted to say I'm doing you a favor.
- [61:59]
Tucker Brown
Yeah, you are.
- [61:59]
Mark Zuckerberg
Is that what I'm hearing?
- [62:00]
Rodrigo Leong
Yeah.
- [62:00]
Tyler
I didn't know I wanted you to adopt the voice of mark Zuckerberg for 20 minutes and go on a tear. But it's not like that was driven by like a specific. Okay, there's a Wall Street Journal article where like Bloomberg has a scoop and like, we need to know this. It's more just like resetting on the meta narrative. I want to talk about the meta narrative, but can we start with Xbox?
- [62:21]
Mark Zuckerberg
Sure.
- [62:22]
Tyler
I want to know first. Let's go back in time a little bit and I Want you to reality check me on the story. I tell myself about how Microsoft wound up in the situation it wound up in with Xbox. And I think it stems with DirectX. It's the graphics layer that allowed games to be run on multiple graphics cards. So that was a Microsoft licensed piece of property. So this is why we don't have the Chromebooks.
- [62:52]
Mark Zuckerberg
You want to go, you want to go really far back.
- [62:54]
Tyler
Like because we didn't get an Amazon gaming console, we didn't get a Google gaming console. Right, right.
- [63:02]
Mark Zuckerberg
Like Whytex is interesting. So you go back, way back. I mean we can go really far back.
- [63:06]
Tyler
Please.
- [63:08]
Mark Zuckerberg
I mean back in the day the main technology for doing 3D when it was coming along was OpenGL. And OpenGL had various pluses or minuses. It was, you know, we're way back in history. But this is the origin of the Nvidia story. Making cards to do 3D graphics. You had like the Riva, the 128, then you had the TNT, then you had the G Force. And like we're talking back in the 90s when I was, you know, your guys age or whatever it was in college and you know, making the first, you know, Quake comes out like the real first 3D game. You know, there was actually a really interesting Twitter back and forth with the old ID people talking about Quake and how basically they obliterated the company by burning everyone out by watching it. But super fun back and forth. But Microsoft comes out with direct 3D as an alternative to OpenGL. That was I think, and this is a little out of my area of expertise, but I think was a little easier to use, had more niceties, was more tied into the platform. But this is all sort of PC gaming. Yeah, the Xbox, the way I think about it. And a lot of gamers kind of get annoyed when I write about the gaming stuff because I don't really care about the game part of it. I'm more interested like the strategy and how that fits in the overall.
- [64:25]
Brian
What is your review?
- [64:26]
Tyler
Yeah, can we get a GTA 6 review?
- [64:28]
Mark Zuckerberg
No. Well, I feel, I feel compelled. Number one, I feel Rockstar I think is charging way too little for this game. They're charging what, $80?
- [64:36]
Tyler
Yes. Like you're going to get canceled for this. This is a nuclear take.
- [64:42]
Mark Zuckerberg
No, they should be charging like $200.
- [64:44]
Tyler
I know, I know.
- [64:45]
Mark Zuckerberg
GTA 6 is like the last great game.
- [64:48]
Tucker Brown
Yeah.
- [64:48]
Mark Zuckerberg
Like you think about everything. It was boastfully all made pre AI.
- [64:52]
Tyler
Yeah.
- [64:53]
Mark Zuckerberg
Like it is the pinnacle of this triple A craftsmanship. Years and years and years of blood and sweat and tears to the exclusion extent where you have like the Twitter analysts, like counting cigarette butts outside of the offices to see like, how much crunch are they in right now.
- [65:11]
Tyler
I don't even think he's trading the stock. I don't even think he's trading the stock. I think he just wants to know what GTA is. The love of the game. Literally the game.
- [65:17]
Mark Zuckerberg
The gamers are insane. So I always tread in this water, like very, very carefully. But no. So I feel compelled to buy GTA 6 just in honor of it existing. I like that even if I don't know if I'm ever going to play it. So I'm definitely going to do that. And I'd be happy to pay. Yes, $200, like $80 is ridiculous. They should charge more anyhow.
- [65:38]
Brian
Yeah. We had one of the youngest person on our team was commenting on people online complaining about the price and said something like, you didn't have. You had 10 years. You couldn't save up 80 bucks. Seriously, it's like whoever, whoever you are. Like, like, I know kids that do lemonade stands and they clear like 100 bucks. Yeah, you know.
- [65:58]
Mark Zuckerberg
Oh, absolutely. I want, you know, the old $20. I'll keep the change. Nothing will make a kid's day better than that. Although unfortunately with inflation, I think now it's sort of like expected. It's unbelievable.
- [66:08]
Tyler
Expensive things.
- [66:09]
Tucker Brown
But.
- [66:11]
Mark Zuckerberg
So anyhow, six.
- [66:13]
Tyler
But we're.
- [66:14]
Mark Zuckerberg
We're back. Oh, so the console. The console era. So the way I think about Xbox is you go back to Microsoft and Microsoft had this whole thing. This is pre iPhone. This is idea of their corporate strategy was three screens in the cloud. And the idea that we're going to. We already own the desk via the PC. We're going to own the pocket via the phone. And people always to say, Microsoft missed mobile. Microsoft did not miss mobile. They like, they came up with a Windows CE in like 1999. Like they were in mobile. They just had the totally wrong conceptual model because they were basing it around, you know, as an extension of the PC. But then the third screen was the living room. How do we get in the living room? Well, people have consoles plugged in their TVs. If we can get in and own the console, we can own sort of the gateway to the living room. And we need to earn permission to be in the living room. We will do that by creating the Xbox, the game console. And what's interesting about this is this is a strategy that totally Failed. And it failed for a kind of an obvious reason in retrospect, which is first and foremost people buy consoles to play games, not to have a portal to the Internet in their living room. And so you're selling a multi hundred dollar sort of console to people who want to play games. But people who don't want to play games aren't going to randomly start buying consoles. What actually ended up taking it over was things like the Fire Stick or you know, Apple TV Beta played this. I still think it's like probably the, the best solution, but it's way too expensive now. The Apple TV's poor price got jacked to the moon with this recent memory increase. But Fire Stick is probably a big one. You had the Chromecast, you had Roku tv, you had, you know, these. Which ended up being. It's not that it's a classic Microsoft thing. They were actually right. There was this new front page to online services to be built. They just took totally the wrong approach with Xbox. And what's funny is that this approach actually became this uber OS of self mutilation because the Xbox didn't succeed in achieving this because the games console is way too expensive to achieve this. But then also they killed the Xbox where Xbox360 was pretty competitive. And that generation is actually the most interesting console generation. I'm happy to expound on that if you want to. But they come out after that with the Xbox One I think, which was super expensive because it had the Kinect built in that sort of like wave your hands around sort of thing. And it had all much more like restrictive DRM things. It was gonna be more digital. It was basically that console was designed around we're gonna realize our vision and own the living room. And gamers hated it, so they rejected it. So their vision, which they didn't achieve also killed their console. And so, and the. So my, I wrote over a decade ago and the whole Xbox saga is filled with regrets. I think first and foremost for Microsoft, but also for me because I from the beginning is like they need to kill this program or they just spin it out or get rid of it. The stated goals which made the cents from a corporate perspective were not achieved and it is continuing to exist because it exists. Yeah, and I was actually sympathetic to that. I worked at Microsoft from, from 2011, 2013 when Microsoft was in the dumps. And you know, they were still had a great business but their stock had been like $40 for like a decade. And. And the one thing the employees has like, well at least we have Xbox, all the cool kids over there. Like it was such a important thing to corporate culture to have Xbox, even though this was a totally failed division in terms of achieving corporate goals and also was sort of self immolating because it was trying to achieve corporate goals that it was not going to achieve.
- [70:09]
Tyler
Yeah. What do you think the naming scheme says about that project? I always found it very odd that they went from Xbox to Xbox 3 60. That sounds like the third. It's actually the second. Then what is the third? But it's one and then now they're on series X which feels like the 10th, but it's the 4th and then they have a bunch of sub names. It feels like they just didn't. They never leaned into just like Xbox two, Xbox three. Xbox, yeah.
- [70:38]
Mark Zuckerberg
Well you're asked, I mean maybe it shows that worked on Microsoft. You're asking the wrong guy about naming things I think. But yeah, total mess. They call it the 360 because it was coming out the same generation as the PlayStation 3 and they wanted to change so they wanted to. Well, they wanted to. To be on the same level three in our name.
- [70:53]
Brian
Yeah.
- [70:54]
Mark Zuckerberg
So what's interesting with the PlayStation 3 is the PlayStation 3 was Sony's big misstep in terms of the whole PlayStation era. What they had this crazy processor called the cell processor that had all these capabilities and they had up to that point consoles were differentiated by hardware. And so Sony famously helped. One of the reasons they beat Nintendo was they had disks so they could have much larger like media and things along those lines. And whereas Nintendo was sticking with cartridges and there was like other like they were much more favorable to third party developers just in general. They had sort of taken over in PlayStation 1 and 2. PlayStation 3 comes along, they produce this. Oh, they wanted to get Blu Ray off Blu Ray. That's another example of consoles getting screwed up by trying to attempt to to other corporate priorities. It worked.
- [71:45]
Tyler
Didn't they win and didn't Xbox go with HD DVD and they lost?
- [71:49]
Mark Zuckerberg
They did. But at the end of the day what happened was the PlayStation 3 was way too expensive. I think it ran super hot if I remember. And all these extra capabilities were not used. And the reason they weren't used is that was the first HD generation and you had this shift to 3D games and high definition graphics. And what happened was it used to be games differentiate themselves by how well they wrote the game. Like how did it perform on your Super Nintendo, on your Nintendo. Now we move to a world of actually all the actual Game was offloaded to engines. Game engines. Like, you know, it had one, obviously these were epic. Got super big with the Unreal engine. And so you no longer did that. What a game company did was actually design the game. And then asset creation. And asset creation at HD was way more difficult, way more expensive than it was for, for standard definition TVs. And so the economic imperative for developers came. We can't just be on PlayStation, we need to be on everything. And so that was the ultimate generation in almost every game was made to run everywhere, run on PS3, run on Xbox 360 and run it on the PC. And that was also the Xbox 360's best, best generation. Yeah, that was the one they're the most competitive on because they had all the games, because all developers are making them sort of run everywhere. They had a very simple to develop for architecture. The 360 was very PC, like even more so than the one sort of previously. And that was their best generation. And then they come back, the next generation, shoving Kinect down people's throats. We're gonna own the tv. And meanwhile, Sony learned their lesson. They're like, okay, we can't differentiate on hardware. We need to create sort of generic hardware that is easy to develop for. And the way we will differentiate is through exclusives. They bought a bunch of small studios in contrast, like buying Activision, which we can get to a little bit, they bought a bunch of small studios and pushed all those studios to developing killer games for the upcoming PS4. And so you got things like the Spider man, that was a huge game,
- [73:54]
Tyler
Naughty Dog, Last of Us, that type of stuff.
- [73:56]
Mark Zuckerberg
Exactly. I mean, and so the PS4 was an unbelievable generation. And a lot of the reasons unbelievable was because it had these exclusive games and they just crushed Microsoft because for all the cross platform games, the Call of Duty, the Maddens, things like that, those are always ran everywhere. And so what you do is you limit the economic potential of your studios because you're only building for your platform. And you make it back by all the licensing fees you get off the EAs of the world and the Activisions of the world, because 80% of gamers are on your console, not on the other guy's console. And so they just wiped out Microsoft in that generation. And that really just continued to the PS5. And this is where we sort of get to the game pass disaster.
- [74:43]
Tyler
Okay, yes. So yeah, I want to. Yeah, let's just jump forward to that.
- [74:49]
Mark Zuckerberg
I didn't want to ramble too long. That's going to be a chance.
- [74:51]
Brian
We love it. We love it. I have a bunch of other questions not related to gaming, but I love this.
- [74:59]
Mark Zuckerberg
The console history is fascinating. It's really interesting how sort of, because it tracks technological change to such a large extent and it totally shifted sort of strategy, so.
- [75:08]
Brian
And yeah, I think you can draw a lot of real parallels, even just model releases over the last couple years, how, you know, certain numbers around one model sets you back a certain number. You know, they're iterating a lot faster. But I'm seeing parallels.
- [75:23]
Mark Zuckerberg
Yeah, the sort of development of. Yeah, it's interesting. You can always sort of draw lessons. So you get to Microsoft at this point, again, I think I wrote at the time, okay, time to give up. I wrote multiple times through the years, they should give up on Xbox. And at this point, Microsoft, was there
- [75:41]
Tyler
ever an option after they bought Activision just to make Call of Duty a console exclusive, or would that have been an FTC problem?
- [75:49]
Mark Zuckerberg
Well, we'll get to that. That's part of the story here. So Microsoft decides, okay, what we. We're going to actually try a new business model. It's true. Xbox sort of selling a console, selling, you know, licensing it. We kind of do that. But we're actually moving to being a services company. The stock's doing much better now. You know, like, we have Azure, all the. All these things. What we need to do and the way we compete with Sony is we need to have the exact opposite of the Sony strategy, and we need to lean into services, lean into subscriptions. We're going to do Xbox Game Pass. And the idea of Xbox Game pass is instead of buying every individual game for $60, $70, $80 gaming pricing, by the way, really has stayed suppressed probably far longer than it should have been, particularly for these AAA games. But we already got to that with Rockstar. So they're like, you pay one price per month and you get access to all the games and game pass. Well, of course, no publisher wants to partake in this because they make all their money up front by selling games to their biggest fans. You know, it's kind of like the movie model. You make a bunch of money up front.
- [76:58]
Brian
And yeah, were they looking at, like, at what happened to the music industry as an example of saying like, like, yeah, it's cool to make your product more accessible. You get, you know, more listeners by bundling streaming.
- [77:10]
Mark Zuckerberg
But that was the bet. You had to make it up in volume. Right? And so this, all this why the Series S came about. There's The Series X and the Series S. The Series S was a more underpowered but much cheaper model. I think it launched at $300 versus the X was I think 600 or maybe 500. And that was also a problem because your kind of neutering the X because developers build to the lowest common denominator, not sort of the highest one. So that was one problem. But the idea was we're going to expand the market and they have these package deals where you get an S and you get Game Pass for a year and it's this sort of thing and we will make it up. And the problem is no independent developer is going to go for that. So they had some of their own games, but they went out and started buying a bunch of developers. So they bought Bethesda, which included I think it at that point and ZeniMax. The
- [78:04]
Tyler
like, they have a bunch of
- [78:05]
Mark Zuckerberg
like great IP libraries.
- [78:08]
Tyler
Those. But those developers just aren't releasing like incredible titles annually. Except for Activision, which does.
- [78:16]
Mark Zuckerberg
Exactly. And so the issue. So the issue with buying these companies is their. What you're paying for is you're paying for their existing business plus the premium. And their existing business was selling single copies of games to all platforms. And what they were saying is we're going to basically force all these studios to take a bath, to lose a ton of money by putting all their games on Game Pass. We'll still sell on PlayStation because we have to, because that's a lot of money. It'd be massively economically destructive not to. But what we think is going to happen is gamers are going to realize I could be paying $70 a pop on PlayStation or I could go to Xbox and I could pay $20 a month and I can get all these games and that's it. What a better deal. And by the way, we'll get new gamers. People are going to come in and realize, wow, I get all these games for $20 a month. None of that happened. All they did was cannibalize their existing business. They didn't expand the market for console gamers. All they did was have gamers who would have paid way more to play these games, pay way less to pay these games. And Microsoft ate it. And they, I think the, you know, the recent reporting was they expected to have 75 million Game Pass subscribers by this year. They have like 30 million. And that number is actually decreasing. It's not going up. And so it's just been. And so that's sort of the context of what's happened here. Phil Spencer got retired, which if you retire at that level of a company, you're probably canned, probably too late. The whole strategy disaster. They brought in new leadership and now there's sort of like a reset going on. They're laying off a few thousand people. They say all games production to continue but there's a real sort of critical decision here. What do we do? Because we ended up getting stuck in the middle like and we're just. This doesn't work.
- [80:17]
Brian
What, what did you read into their approach of laying off 1600 people now and keeping a 1600 person rift?
- [80:26]
Mark Zuckerberg
I mean it's a terrible idea. Like everyone there for the rest of
- [80:31]
Brian
the year, like every, every VC would tell you to like cut hard, cut
- [80:36]
Tyler
deep and then move forward with the team if you're on the ship, we're going to Valhalla together.
- [80:41]
Mark Zuckerberg
I think I do have some sympathy because the reality is I appreciated the note because they are in big trouble. And there's an aspect of just stating it clearly. We're not sugarcoating it. And if they laid out how much trouble they were in and then only cut 1600 people, then everyone kind of knows they're going to be cutting more people. Right. So I think they're just in a bad spot. So of course it's not great. It's going to destroy morale. It's going to destroy everything for the next year because everyone's way to get fired. But there's a bit of they did, I think tear the band aid off to the extent they could and now there's just a. Now they can be very overt. They can go through and actually talk to them employees about what are you working on, why should you still be here? And it's a reflection of the employment climate. Like people in general are more, they're just not going to bail Microsoft, you know, they're going to want to keep their job and so they can probably, hopefully, fingers crossed, do better cuts by virtue of doing them in the open. But I don't know, I mean I don't envy, I don't envy Xbox's leadership at all. It's going to be a very tough thing. But I can totally understand how they are where they are.
- [81:56]
Tyler
Probability of a spin out.
- [81:58]
Mark Zuckerberg
I mean, I think, I think it needs to happen. Like, but you know, this is again the regret is this was my take for years and years and years. I'm like, okay, fine, Xbox game pass. That kind of seems kind of interesting.
- [82:09]
Byron Boots
Let's go for it.
- [82:10]
Mark Zuckerberg
It should have stuck to my guns. They're like, no, stop. This is going to be a disaster. I think. Yeah. I don't. I don't get it. I just don't. I didn't see it before. The thing that got me to say, okay, let's give it a chance, didn't work. I don't see it now. I mean, I think it does give me pause. They hired Matthew Ball, who I've had on strategy multiple times, as their chief strategy officer. I have a lot of respect for, you know, his takes. So I'm curious what he's thinking about.
- [82:37]
Tyler
Yeah.
- [82:38]
Mark Zuckerberg
This gets to the question before. Is there a bit where they just write off these acquisitions and say, actually all this stuff's gonna be exclusive now we're like, Call of Duty, buy an Xbox. Like, basically giving into the FTC's worst fears, which. But those fears didn't make sense at the time in the context because it's. By writing off. What's funny is we lost billions and billions of dollars.
- [83:07]
Brian
Yeah. And it would test. It would be a good pricing test for the power of, of a triple A game to say, okay, you can only get Call of Duty on Xbox now. And you would see, like, how, like how many incremental Xbox sales do you get? Because that means the real value of the game is actually in the hundreds of dollars if people have a PlayStation and then they'll try something new. Switching gears a little bit, we keep having this experience where there's a company, you know, an AI company, let's say an application layer company that is, or lab that is, you know, hot. But then you don't hear very much for a few months and you write them off and then they come out and they've like added hundreds of millions of dollars in revenue and are doing a crazy up round. And it's this weird thing where like, even, you know, historically, you know, there's power laws everywhere. But I feel like in this moment we're seeing more and more examples where, like, the 10th best company in the category is still having the financial performance that a company that would have been the leading company in their category five years ago. What do you make it? What do you make of that?
- [84:14]
Mark Zuckerberg
This is just a thing in tech in general that is always sort of stuck out at me. I mean, I think I.
- [84:20]
Vincent Weiser
Has it been though.
- [84:21]
Brian
But like, like CRM, for example, like, if you go back to like 2000 and 2015 was like, there's a money CRM company. Like, actually.
- [84:30]
Will Mayer
Of course not.
- [84:31]
Tyler
No, no.
- [84:32]
Mark Zuckerberg
The example I always go back to is I think it was 2014 or so when Apple bought Beats and they bought beats for $3 billion. And everyone's going. The tech price is going crazy. Everyone's writing thought pieces about it. And I'm like, you know, of course writing about it, I'm like, $3 billion. Like, Apple is a $500 billion company. What is $3 billion matter? And what's funny about that take is, number one, it was right. Who cares about $3 billion that's in our couch cushions. Like, people were spun up also, they didn't really matter. Number two, Apple is only a $500 billion company. Like, the astronomical increase in valuation and numbers around this is absolutely crazy. So to your point, yeah, a 2019 CRM company, number one. There probably wasn't a number 10 even then. But, yeah, the numbers are not even remotely tied to, like, any. I just sort of let them go and be like, I write down the numbers and they don't really mean anything to me. But it's very hard to keep track of, like, the inflation in tech numbers specifically. You know, you think that. What was I complaining about pricing before? Oh, yeah. Lemonade stands are bad. Silicon Valley. Lemonade stand inflation is absolutely the worst in the world.
- [85:38]
Tyler
On mergers and acquisitions. There's this news today about Getty Images calling off Shutterstock deal after UK regulators said that they would have to sell the editorial business for the merger to be approved. And it seemed very odd to me that a merger would be blocked by a regulator when that industry that is consolidating and is maybe becoming more monopolistic is under such insane attack from generative AI. I can't imagine a better defensive move than putting Getty Images and Shutterstock together.
- [86:14]
Mark Zuckerberg
This happens.
- [86:15]
Rodrigo Leong
This is.
- [86:15]
Mark Zuckerberg
This happens every single time. Like the natural response to your own overall category being threatened by an external force is consolidation. Like, it's the only way to defend yourself, to sort of, you know, you get synergies. Like, all these companies are pretty established, so it's actually fairly easy to price, you know, exactly what things are. It's a much like we have growing companies. You want to merge them or acquire them. It's really unclear because how you sort of price out the future. These companies are declining, so it's very easy. While you could do a discounted cash flow and understand exactly how much they're worth, it's a very straightforward negotiation. It makes total sense for them to consolidate date. But precisely because they're knowable and understandable, it's very easy for regulators to block them. And you see this happen Again and again you see like pushback on. You saw this with TV and like, like different networks getting together and the various pushbacks happen to that or in telecoms, like the, this happens. This is a natural pattern. The moment that a company, an industry wants to consolidate, needs to consolidate, is the moment regulators are most likely to stop them consolidating. And whereas the actual time when action would matter, like when it, when it's growing and a company is making the right acquisitions to take over an industry, regulators don't do anything and also rightly don't do anything because you're dealing with the future and it's unknown. You don't want to screw it up. It raises the question of what use do regulators sort of do anyway in broad, broad strokes. I used to be, I've sort of, you know, I think that they probably do more harm than good as far as a lot of these sort of blocking mergers and things go. But I don't know. I'm the one that just said maybe Microsoft's to take Call of Duty exclusive. So who knows, Maybe I'll add.
- [88:03]
Brian
Yeah, we had a funny moment because we were looking. It's a $3.7 billion deal. But I'm like, how is. This is a $3.7 billion deal? Both these are two 300 million ish market cap companies. And it was because they, the deal was like priced back in January of 2025. And so both companies had declined so
- [88:22]
Tyler
much combined market cap over the last 18 months anyway. I don't know, I mean it could be worse.
- [88:28]
Mark Zuckerberg
You could be Netflix and have the stock market sort of like make a bid for Warner Brothers that the stock market hates, abandoned the deal. But they already decided you did the deal because you're desperate, you're screwed anyway. So. Yeah, you don't even get what you bid for. So maybe that's what happened here. I don't know.
- [88:44]
Tyler
Oh, well. Well, thank you so much for taking the time to come chat with us. Have a, have a great summer, enjoy the break and we'll see you soon.
- [88:52]
Brian
Yeah, good luck with the lemonade stands.
- [88:55]
Tyler
Yes.
- [88:56]
Brian
Try to make it stay soft.
- [88:59]
Tyler
You're gonna run up on a kid
- [89:00]
Mark Zuckerberg
that has clarinet, raise some money.
- [89:02]
Tyler
Yeah, I know.
- [89:03]
Brian
Yeah.
- [89:03]
Mark Zuckerberg
Clarina at 118 standard happen 5 easy
- [89:06]
Tyler
happens in Silicon Valley interest free. It might. Well, thank you so much and have a great rest.
- [89:11]
Brian
Great to see you.
- [89:11]
Tyler
We'll talk to you soon.
- [89:12]
Mark Zuckerberg
Talk to you later.
- [89:13]
Tyler
Have a good one. Let me tell you about Shopify. Shopify is the commerce platform that grows with your business and lets you sell in seconds online, in store, on mobile, on social, on marketplaces. And now with AI agents and our next guest is Rodrigo Leong from Samba Nova. The co founder and CEO is here with us in the TV venulture realm. Rodrigo, how are you doing? I'm doing good.
- [89:35]
Rodrigo Leong
How are you guys?
- [89:35]
Tyler
We're doing fantastically, but it sounds like you're doing better. Give us the news. What happened?
- [89:40]
Rodrigo Leong
You know, we're super excited. We did a big, big funding announcement today with a billion dollar round that we did a first close on at an 11 billion valuation. So super excited about announcing that.
- [89:53]
Tyler
Incredible.
- [89:58]
Tucker Brown
There we go.
- [90:00]
Brian
This is reminding me there was somebody posted like a couple of weeks ago something to the effect of like every day there's a new billion dollar deal in chips from some company you've never heard of and market, I guess the trend. The trend continues.
- [90:18]
Tyler
Yeah, yeah. Is this an overnight success? When did you start the company? How long has this been overdue?
- [90:24]
Rodrigo Leong
It's an overnight nine year success. You know I've been, I've been, I've been building chips for 30 years. High performance processor and we started this company in 2017 so. No, but it's been, it's, it's been a great journey. It's just, you know, again, so noisy. So many companies out there doing also all sorts of awesome things. But look, Danielle, Inference, Inference is now right in front of us. It's kind of broken everything open. It's what we do and it's been what we've done for a long time. And so it's the new training run and so people that are kind of been thinking about building just for training, well, now it's the time for inference and this is where we shine and we shine, you know and investors are putting all their money behind that and so we're excited about that.
- [91:05]
Tyler
How, how walk me through the, the phases of. I mean you have some of the biggest companies in the world. You're working with JP Morgan, Chase Slide selected you for secure on prem AI inference. And I'm interested in the thought process that large Fortune 500 companies, Fortune 100 companies are going through right now. I imagine that there's a lot of explore with frontier models. Very expensive, they're token maxing. Then they shift to okay, this agentic workflow is working. Let's use a open source model for it that is, you know, either the open source frontier is caught up and can do this particular task. Maybe there's a fine tune or some RL on some Private data that makes the system perform better. When is the conversation shifting to actually optimizing the inference stack the hardware? What's the conversation like there? What are the savings that people are focused on?
- [92:05]
Rodrigo Leong
Well, I think what people are starting to realize after they start using ChatGPT and the Frontier models is look, there's a bunch of things I can do there and it's great, you know, we'll use it and it's going to be part of their business for a long, long time.
- [92:18]
Vincent Weiser
Right.
- [92:19]
Rodrigo Leong
And Hyperspace are offering all sorts of different services with different TPUs and GPUs and training chips. They're offering different things, they're again on the cloud. What, what's happening now is this next phase of production is people starting to realize okay, what happens to the stuff that I'm not complaining, comfortable releasing to these models like my private data, my security, the stuff that I want your models to learn and then somehow become part of the global knowledge. Right. And so what happens with that? Right. And so I don't know if I've had, you know, you know, my, my clients banking information, you know, have you know, some, some very regulated information. What do I do with that? Right. And so people starting to realize, okay, there is a whole nother class of workloads, whole nother class of, you know, of applications that you got to go and do private. And so with someone somewhere like JP Morgan, which is fantastic, you know, I mean they are the top of the top when it comes to enterprise and it, right. And so and technology and fantastic partners. So they selected us as the ones that can come in and go into an environment like JP Morgan do, full on prem secure private. They can bring their open source models, they can fine tune into it, they can deploy that privately securely and control the models and control it forever. And so, so I think we're starting to see the landscapes are to steady, right? There's some things you use the anthropics for, there's some things that you kind of use the hyperscale clouds for and there's some things you're going to say hey, let me run on prem and let me, let me control the outcome. And especially since I don't know how the regulatory environment is going to settle. Let me just be secure for that. Let me just be safe and just run those things on my own models, in my own environment with my own security around it and then be done.
- [93:54]
Brian
Yeah, you can think pharma company being like I would love for all the other large pharma companies to Share their data with a frontier lab, but I'll pass.
- [94:07]
Tyler
What does partnership with you look like for a large organization? If I have a large IT footprint already, I probably have data centers, but they might be more CPU based workloads. Maybe I have some GPUs, but I'm not doing, you know, frontier inference. I'm not fully scaled up, but I have some. Are you consulting with them at the level of like where they should be buying land for their next data center, how they set up a powered shell, who they should partner with? Like how deep in the stack will you go with a company that you're working with?
- [94:43]
Rodrigo Leong
Well, look, you know, I mean if you look at the AI ecosystem existence up to date, you know, you've, we've been really focused on hyperscale clouds, the Neo clouds, the Differentia models were really focused on building those out, you know, gigawatts here, megawatts there. I mean just, you know, just this large scale, large scale deployment. And then what you're still thinking about is well, how do I get as many tokens out per megawatt per kilo, you know, kilowatt megawatt and gigawatt that I have. Right. So that's kind of, we're very focused on that. Some of the workplace into that are really, really efficient models. We run the big models really fast. That's really what we're known for. Huge models. Right. And the battleground for power and data center and all that is about huge models. It's not about the little models, about the trillion, multi trillion parameter models. That's what we focus on and run that faster than anybody else in the world. So but then you flip it over to the enterprise and for them it's not as much about how many thousands of racks going to fit into an environment. It's about data privacy, privacy. It's about security, it's about having the capacity when I want it. It's about low latency. It's about these things that again you go back to traditional computing, it's what they've always wanted, right? They always wanted low latency, high performance, all security. They always wanted that. And so what we know is that because Iraq, Iraq is a 10 kilowatt air cooled rack compared to what traditional GPUs are, 140 kilowatts per rack. Right? We're 10 kilowatt air cool rack producing, state of the art AI.
- [96:06]
Tyler
Sure.
- [96:07]
Rodrigo Leong
Now you can go into your existing data centers. You don't need to go buy new data. You already have data center roll out the old gear, bringing the new gear, off we go. Right. And you're running the latest and greatest models at a great performance. So that's kind of what's exciting about it. And you know there are first and foremost our customer. You know, they're buying racks and deploying them, but then broadly they're really also a co developer when it comes to enterprise. New secure AI for enterprise because they are the most knowledgeable when it comes to deploying these types of applications and they're just so smart about this stuff and so we can partner with them and figure out how to bring the enterprise on board, which again, you know, if we all think about it, there's three classes of AI clients. You got the model makers, right. Got the clouds and people forget enterprise is just waking up and historically they've been up massive amount of spend. Massive.
- [96:59]
Vincent Weiser
Right.
- [96:59]
Rodrigo Leong
And so they're just waking up when you see Jake Morgan, some of the banks and some of the other retailers having to come on board. And I think that's going to be a part of the ecosystem. I think it's going to be something that's going to be around.
- [97:09]
Tyler
Yeah. Last question for me, Jordi, you can take whatever after but walk me through the pre chat GPT era for your company. I imagine that since 2022, 2023, it's been on fire and demand has been through the roof. But how did the company survive from 2017 to 2022? What were you doing? Who were the customers? Did you have revenue? Like what was, was it all R and D and venture funding? Like what was the, what was the early history of the company? Because that felt, that feels like a very potentially rough period. But how did you get through that, that, that time?
- [97:44]
Rodrigo Leong
Well, look, I mean I've been chipping design for a long time. Well always knows that the long term investment. So I mean back in 2017 we're still trying to recognize cats and dogs in the web, right? That's what we're doing, right. We're trying to figure out what do we do with this thing. Right. And so, and we're building recommender models, all sorts of different things for people. But the reality is this, the pre. What, what, what OpenAI did, it just fleshed out all of that noise. Pre open AI. Yeah. And focus all the, the value around. Let's start here. It doesn't mean that images are important, doesn't mean voice, all these other things are important. But what it did is focused us as a global market to say let's start here, let's just start with language and it's a very good place to start and allowed us to, all of us can come together say hardware, software models, everybody start focusing in on language as the use case. And now you've got so much production traction and now we can focus on other things like and we're doing great in voice and we're doing great in video and these are things that are also coming. But the ability to sequence these things in production so that you can actually see value is incredibly important.
- [98:52]
Brian
On, on that note, going forward, how are you thinking about, you know, reacting to customer needs like this partnership with, with JPM and some of your other new customers feels like reacting to this like real time need of like okay, we understand the potential, we're willing to invest a lot here but we have certain, certain kind of criteria around how we want to roll these products out versus skating to where the puck is going and trying to make predictions around R and D that you do today that will pay dividends, you know, three, four, five years out.
- [99:22]
Rodrigo Leong
Yeah, well when you're chip design as you guys know, right, it takes you two years to design and you got to go through tsmc, you've got to build these wafers and you got to build the systems. I mean there's a three or four year cycle, right? And so you're always, it's a blend between engineering and fortune telling, right. And so you're kind of mixing those. But, but the reality, the reality is you're always doing that. But here's the difference when it comes to enterprise and not only we have JP Morgan, but last month we announced a huge partnership with Vista Equity which has 90 portfolio companies building all that. So what is the biggest thing that we run out with AI is we don't have optics. We don't have optics. And so now what you're seeing is the JP Morgan's of the world, the empires of the world, the business of the world, all these applications, all turning SaaS companies into AI first companies and you're seeing the demand pull through. And so what we're excited about this is not only the chips and you got connected with the data center that there. Oh the next thing is connected with the end user, the end off taker that applies AI into something that's useful to new businesses. And so, so we're super excited about the JP Morgan, the Vista, all of these, that picture, that's our, that's our mentality is what are people using it for. Solve that problem. Everything underneath follows.
- [100:35]
Tyler
Thank you so much. For coming on the show. Congratulations on the massive round nine year overnight success. Can't wait to talk to you again soon. Have a great rest of your week. Talk to you soon. Goodbye. Let me tell you about public.com investing for those who take it seriously. They got stocks, options, bonds, crypto, treasury and more with great customer service. Our next guest is Alana Palmito from Paradigm.
- [100:59]
Brian
Hey guys, what's up?
- [101:01]
Tyler
What's up?
- [101:01]
Tucker Brown
What's going on?
- [101:02]
Tyler
Welcome to the show. Our Last guest raised 1 billion. You had to 1 up them. You had to 2 up them with 1.2. Tell us about the new fund.
- [101:12]
Alana Palmito
Oh, man. Thanks for having me, guys. Really great to be here. We're super excited about it. We raised 1.2 billion to go after the new opportunity set Frontier.
- [101:26]
Tyler
Thanks for warming that up for me. It sounds nice and warm. Fantastic.
- [101:32]
Brian
All right, continue, continue. 1.2 billion for investment.
- [101:36]
Alana Palmito
All right, guys, we're going big. We're going after all Frontier Tech. We're really excited about it. Obviously. You guys know we got our start in crypto back in 2018. This is our fourth fund. Yeah, pretty, pretty excited about it, but
- [101:51]
Tyler
I feel like, I don't know, this is being somewhat positioned as like an expansion of the vision or the thesis, but I feel like Paradigm's been investing in broader frontier themes for years now. Can you talk about some of the history of expanding beyond crypto and the key moments in the fund's history that sort of woke you up to broadening the thesis?
- [102:15]
Alana Palmito
Yeah, well, I think in 2018, crypto was the most interesting frontier to be investing into. And like, that really was the heart of how we started building the firm. And it was the thesis behind being the sort of researchers, builders first. How do you get really close to the tech to be able to understand and underwrite these things from first principles? And then I think over time it's. It's become pretty obvious that it's not the only frontier. And really hard to ignore what's happening in AI. But actually, like I would say it's more than that. It's like the world itself has started to blend together and drawing these concrete lines is like, no longer applicable. I think that like, even something that called itself a crypto project years ago today, like things that are right on the periphery, tech is just all touching each other. And when you think about trying to separate, it just doesn't work that way.
- [103:08]
Tyler
How are you thinking about the early stage? There's been some chatter on the timeline about like every VC just wants to pile more money into the biggest private companies, the trillion dollar private companies. Why would I waste money or time talking to an early stage founder? How are you thinking about opportunities at early stage, mid stage, late stage? What even is mid stage now? Is that 10, a mere $50 billion company early stage at this point? Who knows?
- [103:35]
Alana Palmito
Yeah, I think, well, I think stages is a hard thing to define because like what are we really talking about? Are we talking about the stage of the company, the valuation? Like, I think it's, it's impossible to, to not be backing some of the earliest founders and folks who are coming out with new great ideas. And so for us it's like talent led. I would say, like you find great people, oftentimes they're in their early 20s. So I don't think you can ignore the early stage, but you also can't ignore the dynamic that you're describing, which is like the power law of what's happening with these larger later stage companies and how much they're able to capture in the compound rate of growth. So I think it's, I think it's like you have to do both
- [104:16]
Brian
from an actual product standpoint. Are you breaking out the fund? Is there some amount, you know, segmented for the early stage, some for growth, some for incubation? How should founders be thinking about the new vehicle?
- [104:31]
Alana Palmito
It'll be truly stage agnostic. So we're going to invest in everything from super early seed stage, even precede in some cases all the way into growth markets. We also, we have a core flagship fund which is an open ended vehicle and so we invest into public markets too.
- [104:47]
Tyler
Oh, interesting.
- [104:48]
Brian
Very cool.
- [104:49]
Tyler
What is the effect of this year's IPOs? What have been the internal learnings from the, the height of the opening of the, of the IPO window? It feels like it's sort of open, but maybe not fully wide open. We've got a lot of exciting IPOs that have done well. But how is that affecting the fund and your feeling around the market right now?
- [105:11]
Alana Palmito
That's a good question. I think it's a hard thing to answer. One of the, one of the interesting Dynamics happening in IPOs is like hyper liquid and some of the trading activity we've seen in advance of the IPOs. It's been pretty fun to see the 24, 7, 365 markets really come alive, which has been a long term thesis that the crypto markets have had. And I think Jeff Lowe at Hyperliquid has just done an incredible job pulling it off. Jeff Lowe at Trade XYZ and Jeff Yon at Hyperliquid. And so like the Cerebras IPO, SpaceX IPO like all of now, like we had all of this trading activity going into those and so there was a lot more transparency on pricing in advance of the IPO event itself.
- [105:56]
Brian
Yeah. How, how accurate was the like on chain pricing relative to what these IPOs actually opened at?
- [106:05]
Alana Palmito
And do you feel like surprisingly accurate? Yeah, surprisingly like quite accurate actually.
- [106:11]
Brian
Interesting. And have you heard of any institutions like starting to bigger firms on Wall street that you think will, if they're planning to invest in the IPO or trade it after it opens, actually start their activity on chain? Is that something that you see happening in the future as we get more evidence that on chain trading tracks real life after these IPOs actually happen?
- [106:39]
Alana Palmito
Yeah, it's a good question. I mean if I were them I would be doing that. I don't know what the rules are and, and what the playbook is for them today and like what the liquidity and depth of those books looks like. But I mean I think that's the thesis for what 24 7, 365 markets look like in the future is you're going to have a lot more institutional activity. Certainly we're seeing that in perps as a derivative product themselves. Like I think they're just a much more efficient pure play product for big hedge funds to come in. And I would even say like the same thing can be true in prediction markets. Markets like what we're seeing is, you know, some people are relating to prediction markets as an institutional product for getting exposure to things and bets that they want to place that is much more precise than we've had in the future or excuse me in the past. And so the future I think holds like still a lot of white space in terms of how these markets are going to evolve. But we continue to be really excited about it.
- [107:32]
Brian
What do your internal meetings look like? Do you have like, you know, a meeting once a month where you guys pitch new frontiers that you're kind of kicking around like at what, like what is forming a thesis look like? Is it all partner driven or is it more collective? You guys have kind of a general idea of a category that you're excited about and then you work together?
- [107:55]
Alana Palmito
Well, I'd say top down, like thematically we're investing into areas where that are structurally long AGI first and foremost. So what are the things that are going to have a natural tailwind to come out of that we don't run like necessarily a top down process Though, down to an investment and say, like, let's go do a deep dive or a particular theme. I think that oftentimes you try to gain conviction and do sprints on individual areas in the market that were maybe like, there's a particular founder that we are excited about. About. But the process, yeah, I would say it's more organic. Like each individual partner may have a different thing that they're excited about and, and digging in on. I do think, like, you know, fundamental to our thesis is like, we have to be close to the tech and so we ourselves have to be able to go really deep and like, understand these things down to, you know, lines of code. And a lot of folks on the team are computer scientists or physics about
- [108:59]
Brian
down to the metal. You guys have a little data center in the office just humming away?
- [109:05]
Alana Palmito
No data center in the office. Yeah. I mean like orbital data centers. Are they the future? I don't know. What do you guys think?
- [109:13]
Brian
I don't know. I think you guys should, should get some. Get on. Get on the next SpaceX rocket and run a little experiment.
- [109:21]
Tyler
I think it's all just. Yeah, I'm on the Elon Musk timelines, which is take whatever he says and multiply it by three. And that's probably true. Which is still going to happen, but just not next year.
- [109:33]
Alana Palmito
Yeah, I think, I think Elon will. Will things into existence with enough time.
- [109:38]
Tyler
He will get there.
- [109:39]
Alana Palmito
Yeah.
- [109:39]
Tyler
Almost always.
- [109:40]
Alana Palmito
Absolutely.
- [109:41]
Tyler
But it takes time. Anyway, thank you for taking the time to come chat with us and congratulations on the new fund.
- [109:46]
Brian
Yeah. And excited to meet all the new founders joining the portfolio.
- [109:50]
Tyler
Portfolio, right.
- [109:50]
Alana Palmito
Yeah, yeah, We've got some great folks in there.
- [109:54]
Tyler
I love Zipline.
- [109:55]
Tucker Brown
Yeah.
- [109:55]
Alana Palmito
Evan Rogers Keller is amazing at Zipline. Yeah, yeah.
- [109:59]
Tyler
Fantastic.
- [109:59]
Alana Palmito
Super excited.
- [110:00]
Tyler
Have a great rest of your day and we'll talk to you soon.
- [110:02]
Brian
To have you on. Alana.
- [110:03]
Rodrigo Leong
Cheers.
- [110:04]
Tyler
Let me tell you about Codex. Codex is a powerful workspace for getting work done with AI agents. Whether you're writing code, analyzing data, creating content, or automating business workflows, Codex helps you move projects forward from starting to finish.
- [110:16]
Brian
Our next next up is Byron Boots.
- [110:19]
Tyler
We got Boots on the ground.
- [110:20]
Tucker Brown
Boots.
- [110:21]
Tyler
Let's bring in Byron Boots from here. He is Overland AI. Welcome to the show. How are you doing?
- [110:27]
Byron Boots
Oh, great. Thanks for having me on, guys. It's really exciting to be here.
- [110:30]
Tyler
Yes.
- [110:31]
Brian
Great to have you.
- [110:31]
Tyler
We're very excited. Can you reintroduce the product and then take us through the latest news and the contract that you just signed?
- [110:39]
Byron Boots
Yeah, sure. So Good news is I'm working here out of our factory in Seattle. So you can actually see the product that we have. Right. So we're building autonomous ground vehicles for defense. Basically. Think about that as like robots for the battlefield.
- [110:54]
Tyler
Yeah.
- [110:54]
Byron Boots
So do you guys want to see it?
- [110:55]
Tyler
Absolutely. Give us a tour.
- [110:58]
Byron Boots
So, so here's, here's one of them. This is our ultra product. You can kind of see the top part of it. Yeah, it's a large off road ground vehicle. You've got sensors in the front, so there's stereo cameras and lidar. You've got these big, big wheels here and long travel suspension. Down here is a payload deck. So you can think about putting big payloads on the vehicle right in here. There's onboard power, there's compute down below the deck, comms in the back. So that gives you just a brief overview of one of the things that we're building. And then you asked about the contract and we're super excited. So we're the first ground autonomy provider to get a production contract with the US military. 20 million dollar contract with the US Marine Corps.
- [111:49]
Tyler
Oh, it's fantastic that you're thinking about. I'm thinking that truck needs a gun. What, what does the payload look like on there? It seems very modular. It seems like you can put a lot of different equipment on that. Is that something that's delegated to the Marine Corps? They decide they partner with other primes or do you have other relationships where you can bring the configuration to them?
- [112:11]
Byron Boots
So we've put 30 payloads, 30 different payloads on these vehicles. It's designed to be modular. You can see that there's L track down here that makes it really easy to attach things. So this is everything from kinetic payloads like remote weapon stations, drones. Ew. So it depends on what the customer. We can help them integrate anything onto this vehicle.
- [112:34]
Brian
Dogs as a form factor. There's been a bunch of sort of robot dogs. Robot dogs or actual dogs? Well, we should get into real dogs. But there's been a bunch of videos circulating recently. There was one maybe a week ago of a robotic dog. And it seemed like they had solved like some of the recoil challenges. Do you think that, how are you thinking about that form factor? Obviously you guys are focused on something else, but I'm sure you understand the trade offs of both. I can imagine your product is much better for high range situations where you need a lot of range. But how do you think about it?
- [113:15]
Byron Boots
Yeah. So one of the reasons why we love this form factor is that it's first of all large enough to put a serious payload on it. It can handle 1-2,000 lbs depending on what the configuration is. It's got wheels, so you know, it has really good use of energy. You can drive it 100 miles. So robot dogs are really cool too. So before I started Overland AI as a professor running a lab where we worked on machine learning and robotics and we had a bunch of robotic dogs in the lab and they're fun to work on, but I think wheeled vehicles are really the place where we can get, you know, the most.
- [113:52]
Tyler
You're saying wheel is underrated and it doesn't need to be reinvented. That's what I'm hearing.
- [113:57]
Byron Boots
Crazy. Yeah. I mean so not only do you not need to reinvent the wheel, I mean if you have squishy tires, you can do things like drive up and down stairs and, and do all sorts of stuff.
- [114:06]
Tyler
I never thought about how simple that is. You can just drive up the stairs if your tires are big enough. How big are the tires on? That's right on that truck.
- [114:13]
Byron Boots
I think these are like 38 inch. So pretty big.
- [114:16]
Tyler
38, that's fantastic. I love it. What does the actual manufacturing process look like? Obviously you're very well funded company $100 million round recently. the same time there's probably a lot of experimentation, a lot of putting different parts of the supply chain together, a lot of modularity. So how hand built are these? What does the automation story over the future look like?
- [114:38]
Byron Boots
So the ultra vehicle like this one is actually based on a Polaris razor chassis and drivetrain. So we get that from Polaris and then we upgrade the suspension. You can actually see a great view of that here.
- [114:50]
Tyler
Got it.
- [114:51]
Byron Boots
We pull out the seats, we just add this flat payload deck and we do all the work to add the compute and the sensors and wiring power, all of that kind of stuff. So we pull all that together in our factory here. We're also very field forward. So we test these out in the field all the time. You know, we're in the field every single day working on the, you know, the software, the autonomy. And I think one thing which is really, really important about these systems is that this is a completely autonomous robotic system. Right. Like it has sensors that allow it to perceive the environment, plan through the environment, control it so that a user can just tell it where it wants it to go, what payload to x execute. It's not, you know, it doesn't have to be tele operated. You know, a single user can control Multiple vehicles. It's one of the things which is really cool about this tech.
- [115:42]
Tyler
I imagine there's like very high demand for both teleop and full autonomous mode though, right? People want to be able to port in for a particular mission and then also be able to just try and draw waypoints on a map.
- [115:56]
Byron Boots
So. So one of the things that I think we see is when people first start to use a vehicle like this, they're like, oh, I want to teleop it and be able to precisely control where it goes. But they quickly realize that you can actually just tell it where to go on the map, tell it what orientation you want it to be in, and it will just go there and do it. And so it's actually safer, more efficient and allows you to get much more force multiplication if the operator just relies on the autonomy to get it there. What we've seen is war fighters really embracing that and starting to experiment much more with that. So we think autonomy really is the future.
- [116:34]
Tyler
Any plans to make a dual use version for Malibu? If you got a bunch of surfboards, you want to get them down to the beach, you load them up and say, hey, I'll meet you there in five minutes.
- [116:42]
Brian
Some natural light.
- [116:43]
Tyler
Some natural light.
- [116:45]
Byron Boots
I mean, it sounds awesome. We are actually dual use. We are using this for things like wildland firefighting and other things. So who knows, I mean, maybe, maybe pretty soon we'll be able to, to, you know, get you guys one the
- [116:57]
Tyler
day party market, the Amman taking around the hotel property. Well, thank you so much for coming on the show. Fantastic news, Congratulations and we'll talk to you soon.
- [117:07]
Brian
Incredible.
- [117:08]
Tyler
We appreciate what.
- [117:09]
Byron Boots
Yeah, thank you so much. Really appreciate it.
- [117:11]
Tyler
Have a great week. We'll talk to you soon. Goodbye. Let me tell you about com console. Console builds AI agents that automate 70% of it HR and finance support, giving employees instant resolution for access requests and password resets. There's a scoop. There's a scoop on the timeline. Perplexity is quietly building an AI coding tool that takes on Claude code and cursor and codecs potentially. It's meant to build software end to end. The tool is being internally used for now under the codename Teammate. Perplexity has been sort of bouncing around from different. So Steve Hu here says, what happened to the Bloomberg terminal killer? They were working on that for a while, then they launched Bloomberg Computer, which was sort of a computer use agent and saw incredible growth. Like you saw the ARR numbers went way up. It feels like one of those examples of a company that people were sort
- [118:06]
Brian
of like I think one of the challenges.
- [118:08]
Tyler
And then all of a sudden there's some new good news.
- [118:09]
Brian
Perplexity has a ton of revenue. Yeah, they're taking a ton of shots on goal. Yeah, just like every other company to be clear. But I think the difference is that Perplexity doesn't have a product that's being used heavily by tech insiders. And so people just see them as like running around with like it feels like they don't have something like that's a hit in enterprise that they can fall back on while they keep taking shots at some of these more enterprise Y products. And so yeah, it's interesting.
- [118:44]
Tyler
Feels like it's going to fund Prince. Remember they fired up the Perplexity investment fund investing in other startups.
- [118:51]
Brian
I don't know what they invested in,
- [118:52]
Tyler
I don't know what they invested in
- [118:53]
Brian
but he has good access.
- [118:55]
Tyler
It's possible everything in that fund is just on fire because the market is doing so well. So many companies are getting marked up. That could be a pretty interesting portfolio to dig into at some point.
- [119:07]
Brian
I think that this is more this teammate makes me think that it's maybe something else but I could see them seeing lovables growth and having a lot of overlap and audiences and replit and saying like hey, we want to make, you know, we. Yeah, we want to make a more consumer leaning product. I think it'll be hard to really get a foothold.
- [119:27]
Tyler
They are more adjacent than you think. You go to Perplexity to look up some information. You get nice UI design on the responses.
- [119:36]
Brian
They have the Joe Rogan partnership which seems like it's crushing. Lewis Hamilton and Joe can be like hey Jamie, build me a new CRM during the show.
- [119:45]
Tyler
I don't think Joe Rogan has any interest in a CRM. I don't think he's in the market. I think he does everything over text message and you have to be invited. So you know if you're going to be on the show before.
- [119:55]
Brian
Before we have our next guest. Grok four five.
- [119:58]
Tyler
That's right.
- [119:58]
Brian
Is out.
- [119:59]
Tyler
Is out.
- [120:01]
Brian
Some reviews looking good on the benchmark.
- [120:04]
Tyler
I wonder how does Michael True have a SpaceX AI badge yet? Is the cursor team involved in this? Heavily because I know they were doing some consulting work while the deal closed. Of course the deal was announced but they still have to go through post merger integration. I wonder how deep that team was integrated but excited to check it out.
- [120:23]
Brian
I think they're still going to be running under the cursor umbrella for a long time. I think it's much easier to sell Cursor through the Enterprise and they have
- [120:30]
Tyler
Composer separate model, but Grok.
- [120:33]
Brian
Yeah, Cursor did say that We've partnered with SpaceX AI to train Grok for train.
- [120:37]
Tyler
Okay.
- [120:37]
Brian
So I think that there was a lot of clarity.
- [120:38]
Tyler
I really wonder if there'll be any gap in capabilities in the spiky intelligence sense of. Grok will be good at a particular thing, writing or, or something that's a little bit more X. Native Twitter, native news, social media. Like that's been the advantage there potentially. And then Cursor will be more data code driven and there will actually be some bifurcation in the models. Or will we just see a consolidation where both models wind up offering basically the same spiky frontier as every other model? Anyway, excited to dig into that. Always love a new model launch. But we have our next guest in the waiting room. We have Will Mayer from Colt Holdings. Welcome to the show. How are you doing? Will do well. How are you guys? Thank you so much for taking the time.
- [121:22]
Brian
Great to have you on the show.
- [121:23]
Tyler
Great to have you on the show.
- [121:24]
Brian
What do we got in the background here? Is that real?
- [121:28]
Will Mayer
That is real.
- [121:28]
Brian
Yeah.
- [121:29]
Will Mayer
That's like various artifacts from the past.
- [121:32]
Tyler
So, yeah.
- [121:33]
Brian
Very cool.
- [121:33]
Tyler
Webby Awards. I think the spring. Isn't that a Webby Award?
- [121:37]
Will Mayer
That is a Webby Award.
- [121:38]
Tyler
Congratulations. Thanks. Give us a little background, Give us a little bit of the journey. Introduce yourself for those who are watching who might not be familiar with your work.
- [121:47]
Will Mayer
Yeah, of course. I am Will Mayer. I'm the co founder and high priest at Cold Holdings. Background came from making skateboard films at a young age when I was like 14 for companies like Vans. Became deeply obsessed with brands and what they represented. Moved from there into advertising, working with brands like Nike and Netflix, and then started working more more with startups, incubating companies and fell in love with cults and religions and believe that many of the best brands are some form of a religion.
- [122:18]
Tyler
I remember early in Silicon Valley I was working on a company and people were saying like, oh, you don't want your product to have a cult like following. And I was looking at Cult of Mac, the website that tracks Mac. They refer to it as a culture cult. It's a great way to think about things.
- [122:35]
Brian
Obviously some case against not wanting a cult.
- [122:38]
Tyler
Oh, just that, like, you know, cults are bad. They often lead to, like, terrible outcomes in the literal sense. And also you probably don't want like psychos following you, you want just like normal customers in reality. And that's what Apple wound up getting. They got a huge amount of just normal consumers, but they do have a cult like fan base.
- [122:57]
Brian
Yeah, they needed the culture to get them through to the truly hit consumer product.
- [123:02]
Will Mayer
Yeah, I mean, before the like 1970s, the word cult was actually neutral. It just meant a new fringe group. There was a period in like the 60s and 70s people refer to as the Fourth Great Awakening. It's like huge boom in spirituality, things like Children of God, but also brands like Blue Ribbon Sports, which became Nike or Apple from Jobs. In that period, the word cult went from being a neutral word to a negative. And conservatives started to use it to demarcate and delegitimize new movements. So today sociologists mostly refer to cults as NRMs or new religious movements.
- [123:35]
Tyler
Okay, got it. Interesting. But you're reclaiming it. You're taking it back. Talk to us about. I mean, you have a couple different things going on in your world, but I'm interested particularly in advertising, video production. Like, what does it look like to work with you? How long are you on a particular project? The Polymarket ad went very viral and I'm wondering, like, what does that process look like from start to finish?
- [124:00]
Will Mayer
It really depends on the type of folks we work with. With Polymarket, we've been working with them since January in like a bunch of different capacities. The team and I have been working on strategy, a bunch of the brand work and out of home stuff. That campaign came together in an insane timeline and was driven a lot in partnership with their internal team. I got a call like three weeks before, before the World cup. And if you guys know, like people now are working on super bowl ads. Yep, it's like a six month process. Normally that whole thing from like concept to production to post to being online and routed for TV was like three, three and a half weeks.
- [124:31]
Byron Boots
Wow.
- [124:31]
Will Mayer
So it was insane.
- [124:32]
Vincent Weiser
Yeah.
- [124:33]
Brian
What, how did you process all the different reactions? I think I saw the Reuben ad while watching ufc. I watched it too and I was like, whoa, Rick Rubin, prediction market ad. Yeah, the ad was obviously very cool. A lot of people were surprised by that. I brought up to you. You were like, rick Rubin came out of the rap game. Why is it surprising that he would
- [124:55]
Tyler
do like a prediction market ad on ufc?
- [124:59]
Brian
So, yeah, I feel like it was very, very mixed reactions to it. You know, not. Not on the creative. I think that was universally like, creative was awesome. But how did you process people's reaction to it?
- [125:10]
Will Mayer
I mean, I feel Like, a lot of the best campaigns are pretty controversial. I mean, in our time with Equinox, we, like, banned membership sales on January 1st, and that became, like, the most heated moment that business has ever had, but also the most successful campaign in history for them. So I think with someone like Rick, what was great is there's nobody that represents questions better than him for those who are the creative act or anything else. So he felt like a great fit.
- [125:31]
Brian
Yeah, I've been feeling over, you know, we're sort of at, like, peak marketing content, and yet, like, it feels like advertising has never been in a worse place. I don't know if you feel the same way. The campaign with polymarket is like, it is a campaign. It feels like the craft of advertising. And that's why I think it broke through as much as, like, again, the actual creative was good. Do you feel the same way? Do you have launch video fatigue? It used to be, like, maybe a company would come out with a video, but they were really just hoping for a TechCrunch article. Now it's like, well, we're definitely doing a video and it'll look exactly the same as every other video. And then, yeah, maybe we get a TechCrunch article. But it feels like people are trying to create their own artifacts.
- [126:22]
Will Mayer
I mean, dude, I don't want to point it back at you, but you guys created, like, the OG launch video, I feel like, for tv. I remember, like, that that was my first experience at tvpn was like, you guys on a helicopter or something?
- [126:33]
Brian
So I'd say no, and you'll appreciate we had 20 other videos planned. And then it just started this sort of snowball where everyone was launching videos, and we were like, this is no longer a good way to actually break through and get attention. So we just switched strategies.
- [126:50]
Tyler
We literally had the whole production team here geared up for weekly video shoots with ideas and different songs that we were going to play on. And then it just got so tired. Okay, let's not do that.
- [127:01]
Brian
Yeah, we should have. We should have made 10.
- [127:03]
Tyler
We should have made them and then launched them all one day at a time or something like that. But I don't know, what do you think about, like, the. The. The oversaturation of things, like how fast the Internet moves when you want to jump on something, when you want to bring back something from the archive that hasn't been touched in years.
- [127:18]
Will Mayer
It's tricky, man. I mean, again, like, not to throw it back to the 70s again, but the average American, I think, then saw like, 500 as a day and now it's more than 5,000. And who knows what it'll be in like a few years from now.
- [127:28]
Vincent Weiser
Wow.
- [127:29]
Will Mayer
I. We get hit up like every day for like countless launch videos.
- [127:33]
Tyler
Sure.
- [127:34]
Will Mayer
I'm not sure how long the trend is going to last. I think just like it's cliche to say, but like taste and a contrarian point of view will cut through. The approach I would give to people to try is I think the poly market work resonated because we took somebody who would the whole team like from creatives internally there to the photographer to the talent. Normally wouldn't be a part of a prediction market campaign. When you think of like Equinox. Every photographer we ever hired for Equinox had never shot fitness before. They only shot fashion. All of our design team came from museums that we would poach. So I think like hiring people out of category, you have enough subject matter experts in the business. So bring in people who don't know the category and can bring new things to.
- [128:14]
Tyler
Yeah.
- [128:15]
Brian
When you have a campaign that hits, where do you. Do you think the value is primarily coming from a great idea or the execution?
- [128:25]
Will Mayer
I think a lot. It's hard to say.
- [128:29]
Brian
The Equinox, the great idea is like, let's make it impossible to sign up for a membership on January 1st. Right. Like that's the idea and that's what sticks with people. I don't even remember like a lot of the visuals, but to me that that's what made it a great campaign.
- [128:44]
Will Mayer
Yeah. I think that we spent less than 1% of what we would normally spend on a January campaign that year for what we launched, which was we don't speak January. It was just black and white text, which is why you don't remember it. But like brand actions I think cut through more than anything now, especially with like I feel like AI is going to democratize creativity and skill. So many people that there'll be such an abundance of beautiful visuals over the next few years that like the concept and what the company actually does will probably be the most important thing.
- [129:10]
Tucker Brown
Yeah.
- [129:10]
Brian
What action are you willing to take?
- [129:12]
Tyler
Yeah, yeah. Actions speak louder than words and maybe slop as well. How did you. How is working with Brian Johnson different? Because it feels like Polymarket. It's sort of like a standard playbook. You have a celebrity, you have a video, it's going in the World Cup. It's like, it's like standard inventory. Obviously executed very well. But with Brian Johnson, it's like this massive owned media influencer. Driven, individual. He's huge on Twitter. It just feels like a different company. How did you approach that? What'd you wind up working with him on?
- [129:43]
Will Mayer
It's massive. Him and Kate hit us up, like, probably late 2024, early 25, because they heard we were focused on, like, building religions, and the brief was basically like, build a religion for don't die.
- [129:54]
Tyler
That makes sense.
- [129:55]
Will Mayer
So we spent a lot of last year, we had to, like, to basically collaborate with them on what the doctrine of don't die became. A lot of the rituals around it, there's like, I don't know, like, five core tenants of, like, how to build a cult brand. And I think Brian's, like, done all of those completely, naturally, authentically on his own.
- [130:10]
Tyler
Do you know, were you forgetting him
- [130:12]
Brian
on the cigarette box? You know about this?
- [130:18]
Will Mayer
I was not responsible for that. In.
- [130:19]
Tyler
In France, they have pictures of, I think, cancer patients on the. On the boxes of cigarettes, and one of them looks exactly like Brian Johnson.
- [130:27]
Brian
Bonus up.
- [130:27]
Tyler
It's very funny. Yeah. We can share it with you and you can see. I'm interested to know the five key tenets of building a cult brand. But first, we'll show you the image of the Brian Johnson on the cigarette box. Can we zoom in there? It looks just like him to me. This one.
- [130:46]
Brian
This would have been good guerrilla marketing. Yeah, you should have claimed credit.
- [130:49]
Tyler
Yeah.
- [130:50]
Will Mayer
I'm honestly surprised it's not. But yeah, respect.
- [130:52]
Tyler
But, yeah. Walk us through the five tenants. How did they apply to blueprint and beyond?
- [130:57]
Will Mayer
Yeah, I think it comes down to, like, five core things. The first being doctrine. So having, like, identity before features, which is like, what is the sacred text that everybody abides by? Most brands have a tagline, but what can actually be, like, truly enforced and felt by the community? Brian's done this incredibly well. Think of things like, most religions have commandments or tenants. Brands have, like, think different or just do it. You have longer forms of doctrine, like the technological republic by Alex Karp or, like, zero to one. Brian used to write under the moniker zero all the time, so he's been primed for that. The second is ritual, which, like, again, Brian, through the dinner series for Don't Die Dinners, did such a beautiful job at. You guys have a ritual here every day, five days a week. But, like, what are the initiations into your brand or into your community? And it's basically forming, like, a ritual that becomes a habit, that becomes identity over time. So, like, you buy a pair of shoes, you join a run club, you are a runner. The Third one is symbols and language. So, like, how can you take elements to create in groups versus out groups? What are the key features that signal people who are insiders versus outsiders to your brand? CrossFit has, like, it's not a workout, it's the wad with equinox. We never said gyms, we would say clubs. So elements like that are super important. The Catholic church used stained glass windows to educate an overwhelmingly illiterate population in the 12th century to indoctrinate them into the church. That's like another form of symbols for that. The fourth is a charismatic leader, which again, you have in Brian, you have in folks like Palmer Lucky, where you almost icon yourself. So like Palmer goatee, Hawaiian shirts, flip flops, things like that are so incredibly important. Important. And then the fifth one is an enemy. I think, like every brand needs a nemesis. A lot of people use competitors. Apple started as IBM with the like 1984 campaign, but over time it evolved to the concept of conformity. Because when you get bigger than your competition, that enemy loses power. But if it's like an overwhelming thought that can never truly be defeated, the enemy always keeps power.
- [133:02]
Brian
If you were doing a brand for the dog breeding golden retrievers, you needed to figure out an enemy for the golden retriever.
- [133:11]
Tyler
Let's workshop the tennis ball.
- [133:13]
Brian
No, it's not the tennis ball because that's your friend. That's the thing that you wanna. That's the thing that you wanna, that you're desperately trying to find and get.
- [133:20]
Tyler
It's hunger. I don't know, what do you think
- [133:22]
Will Mayer
it could be hunger for my Australian shepherd. It's like every single loud car. So I would say, like the opposite of peace. And in defining your enemy, you define yourself. So, like, I'd be interested. Who's your enemy? Who's like the nemesis of TPPN right now?
- [133:36]
Brian
We've actually.
- [133:38]
Tyler
Yeah, we mapped this all out. We actually did this experience and I mean, it was geopolitical near peer rivals, who you can guess. And then we had a bunch of like, more satirical ones, like, like our allies. People who block data centers. We love data centers. That whole thing.
- [133:53]
Brian
I mean, yeah, that was early on, but we would do things more like who were, who are our allies? Like if someone would mention private equity, we were just like, you know. Yeah, yeah, that was like. No one ever is, like, standing.
- [134:05]
Tyler
Yeah, short sellers. We hate short sellers. That type of thing, you know.
- [134:09]
Tucker Brown
Of course.
- [134:09]
Tyler
Yeah, yeah, we have a sheet, the terms and memes.
- [134:13]
Brian
How do you, how do you think about scaling what you're doing, you know, in a craft business, it's. It's exceeding. It's been done. Scale's been done in the creative field with agencies, but oftentimes it's at odds with great work. But how do you think about it?
- [134:34]
Will Mayer
I think the point of view, the way we work is different than most agencies. I have no desire to scale the agency much larger than it is today. The way in which we work was you can either grow an agency really large, try to sell for a pretty shit multiple down the road, or what we started doing like five years ago was incubating startups. So only a third of our clients pay us in cash. The other two thirds pay us in some form of equity. We helped create a credit card company that is called Built Rewards. You might have heard of this guy. Encore. Jane and I've done a bunch of stuff like that. So we're working on a ton of those with firms like Index and other venture firms.
- [135:09]
Tyler
I found our actual list of enemies.
- [135:12]
Will Mayer
Did you?
- [135:12]
Tyler
H vac repairman. I don't know why they're on there. DJI drones, TikTok Xi Jinping under monetized podcasts. Podcasts that don't have enough advertising, which we solved. Leaf blowers.
- [135:25]
Brian
Yeah.
- [135:25]
Tyler
Fantasy football. Why'd we put that on there? What's wrong with fantasy football?
- [135:29]
Brian
This is from the original printout of the tvpn. So we, when we were doing the show early on, we would have these bits and if we had a good bit we would write it down and we would have this sheet that we would update and I would just keep it here and it would just remind me of like the kind of the core tenants as we were establishing the
- [135:45]
Tyler
in allies we had job creators and bubbles. Very good, very good. Yeah, it was a lot of fun. Yeah. Good exercise for any brand. But of course everyone should call you first because clearly much better than most people, but fantastic progress. Thank you so much for coming on the show, breaking it down for us. Jordy, anything else?
- [136:06]
Brian
Yeah, next time one of your founders is coming on and flag it to us. Yeah, be excited to meet them.
- [136:11]
Tyler
Yeah, we'll talk about soon.
- [136:13]
Brian
Awesome.
- [136:13]
Will Mayer
Sounds good. Have a good one, guys.
- [136:14]
Tucker Brown
Cheers.
- [136:14]
Tyler
Have a good one. We'll talk to you soon. Goodbye. The old term sheet, the size gong timeline, some personnel news. We haven't done one of those in a while. We don't really do the trade deals. The trading cards really took the place of the trade deals. But speaking of advertising, I want to watch this SK Hynix advertisement. The Tyler Dug Up. Let's play this because I want your reaction, Jordy to add for SK Hynix. Okay, So we're also being extorted. Exported time went by. He's dressed up as the chip, as the hpm. He's dressed up as the memory. Can't you just be cool? How have you been doing? Why is he frozen? Some prop comedy. I. I like it.
- [137:30]
Brian
Wow. No idea what that means, But I love S.K. heinecke.
- [137:33]
Tyler
Yeah, we don't know how to make.
- [137:35]
Byron Boots
I think that ad has like 80
- [137:36]
Brian
million views
- [137:39]
Tyler
for good reason. It's a good ad. Makes me want hbm. Well, our next guest is live in the TVPN ultra realm. With us, we have Tucker Brown from Compound Creative Holdings. He's the managing partner, friend of Paki McCormick, and we're very excited to have him here on the show.
- [137:55]
Brian
We're back.
- [137:55]
Tyler
We're back.
- [137:57]
Tucker Brown
This is quite a set.
- [137:58]
Tyler
Yes. Welcome. How was the rest of your trip to France?
- [138:02]
Tucker Brown
France was hot.
- [138:03]
Tyler
Okay.
- [138:04]
Tucker Brown
It was. It was productive though. I think, you know, you guys probably saw the energy that there was.
- [138:10]
Tyler
Were you doing deals?
- [138:11]
Tucker Brown
I was trying to do deals.
- [138:12]
Tyler
Okay, but when you do the deal, are you a back of the envelope guy or a napkin math guy? Which one are you pulling out?
- [138:19]
Tucker Brown
You got to kind of combine, I guess.
- [138:23]
Tyler
You're doing a DCF and it gets so big, you might have spreading comps on different tabs.
- [138:28]
Tucker Brown
I mean, as I'm sure you understand, you know, the category that we're in. Yeah. You got to be creative with the deals.
- [138:35]
Tyler
Yeah. So, okay, so take us back.
- [138:37]
Brian
Was your first can.
- [138:40]
Tucker Brown
What was my first can?
- [138:41]
Brian
Yeah. When did you go for the.
- [138:42]
Tucker Brown
It was this year. I've been to film festival.
- [138:44]
Brian
You waited until it was like, actually going to be productive for you. Yeah, exactly.
- [138:48]
Tucker Brown
Make it worth the, you know, the money you got to spend to get there.
- [138:50]
Byron Boots
But.
- [138:51]
Tyler
But yeah, take us back early in your career. How'd you get here?
- [138:54]
Tucker Brown
So I've been at CAA for 15 years. You know, the talent agency that represents biggest entertainers in the world, athletes and all that. I was at Evolution, which is our investment bank, working on large scale M and A capital raising transactions across, you know, different categories. So that for a long time, I like the applause on that.
- [139:14]
Brian
For capital raising?
- [139:15]
Tucker Brown
Yes, yes. Worked with pro sports teams, worked with entertainment companies, tv, you know, TV studios, production companies.
- [139:23]
Brian
When does that get. Get tapped in for a transaction? So, like, yeah, like I can imagine if a sports team is going to transact or, or an emerging league or an athlete has a Business that they want to sell. Like am I, am I in the right area?
- [139:42]
Tucker Brown
Yeah, it's sort of. It depends. Right. I mean we're, we don't work on tiny deals. We like to focus on larger scale transactions. So in sports it's probably going to be something 50 million-plus. So if you're putting a check into a team and you got some money to spend and want to buy a piece of a sports team, we'll facilitate that transaction. We'll work on, you know, team sales too. So entire teams that trade. One of the earliest deals that we did was the sale of the Sacramento Kings Civivik Runaway in 2011. And how much teams traded by the way, for $500 million.
- [140:12]
Tyler
So how much does that organization look like a standard investment bank?
- [140:17]
Tucker Brown
A lot. Like, I mean that's the service that we provide. I think the difference is we sit within CAA so we have the strategic connectivity, the knowledge that might be a little different than other investment banks have.
- [140:27]
Tyler
And probably less public markets coverage.
- [140:31]
Tucker Brown
Yeah, we don't have capital markets capabilities. We don't do public marketing. But focused on M and A. Yeah, generally.
- [140:35]
Rodrigo Leong
Got it.
- [140:36]
Tucker Brown
So probably a little bit smaller. Our team is only about 20 people, so kind of 50 to 500 million is our sweet spot. Sports is going to be a lot larger than that. But I'd say for other deals it's really in that kind of range. So was there for a long time and it came to how I've gotten to compound and what we just launched. I started working around creator deals a couple of years ago. Kind of just by chance you stumble across deals and companies that are interesting that make sense. You want to lean in and figure something out. And that was the case with dude perfect creator business that been scaling really nicely for a long time built on
- [141:13]
Tyler
YouTube probably 20 years in the.
- [141:15]
Tucker Brown
Yeah, 16 years at the time.
- [141:16]
Tyler
16 years at the time, yes.
- [141:18]
Tucker Brown
So they were ancient in YouTube land,
- [141:21]
Tyler
but consistent in their performance the whole time.
- [141:24]
Tucker Brown
I think they were growing at a 50% CAGR for that entire time.
- [141:28]
Tyler
And no matter when you. A lot of people dip in and out of dude perfect content, of course you go through some binge watching, you watch a bunch of the archive, then you come back years later and you see that okay, everything's evolved and all the great pieces are still the same, but they've added on a bunch more capability.
- [141:43]
Tucker Brown
Yeah. And their audience, I mean they sort of 8 to 16 year old boys I'd say is the core of their audience. But they also grew up with them. So These guys are, they're 38 now. They have a big audience. People in their 30s that grew up watching the content. So I didn't know much about it other than what I'd seen on YouTube. They built a big live entertainment business. They go on tour, they sell at NBA size arenas.
- [142:05]
Tyler
So what's unique about that deal because they have multiple revenue streams at this point, they're doing advertisements, partnerships. They only have a partnership with Nerf and a bunch of other deals in the works, tours. And then they were also talking about building like a Disneyland. Basically.
- [142:19]
Tucker Brown
Do Perfect World.
- [142:20]
Tyler
Do Perfect World. Incredible.
- [142:22]
Tucker Brown
There was a big mock up of that when I first went to visit their office in Texas.
- [142:25]
Tyler
Yeah, insane.
- [142:26]
Tucker Brown
You know, amusement park to make a pilgrimage. So, yeah, listen, they wanted to build, and we've heard this a lot from creators, but you know, kind of a next generation Disney type business.
- [142:34]
Tyler
Yeah.
- [142:35]
Tucker Brown
For a specific audience around, you know, sports, kids, comedy, family, very family friendly business. And yeah, so I sort of got to know the guys, saw their business diversified across a bunch of different categories. It wasn't just a YouTube business, it was a real media company. So we took that to market and executed a pretty large scale private equity transaction. It wasn't easy. I was naive in the sense that I thought it would be because the financial profile was so attractive.
- [143:05]
Tyler
Why was it not legible to.
- [143:07]
Tucker Brown
It just. It's a new category, I think generally for transacting. It's the opportunity that I see at this point in time.
- [143:13]
Brian
You don't have kids of like case studies and Harvard Business.
- [143:18]
Tucker Brown
There are no comp as a single comp or Preston. I looked at media company comps for it, I guess. And you're dealing with talent, you're dealing with key man risk in a way that's sort of unnerving to some private equity platform risk. Platform risk. I mean, with them it was a little bit less connected, contingent on the platform itself, which was an advantage. You know, their YouTube revenue was a small percentage of the overall business at that point in time. But, you know, investors get spooked by algorithms. What could happen if it goes up or down or changes and how that impacts the business. So it took a while. And by the way, you have to find the right partner too. And for, you know, for talent and for their business. They built it over 16 years, they owned it outright. They cared about what, you know, what the future looked like with their partner. So finding the right, you know, not just the right deal, but the right people behind the deal to transact with. I'd say in this category, in the creator world is more important than in others.
- [144:09]
Brian
And so you came out of that feeling like you had a greater sort of understanding of these businesses as well as like an appreciation for their potential and their quirks. And so you decided to become the buyer. Is that the right way to think about it?
- [144:24]
Tucker Brown
There were many times during that process, there were a couple others I did after where I was. Yeah, I just wish I was the buyer in that situation. I feel like I was doing the work to structure the deals that made sense. I understood the talent behind the deals in a way that maybe other buyers couldn't. And I came from the world of the agency at caa, where we had a whole suite of services and things we could provide for these creators in a way that a typical buyer wouldn't be able to do. So we pretty quickly started to think about what we could put together to basically be that unique buyer that we didn't see in the marketplace or we didn't see many of, didn't see really at scale, didn't see sophistication from, and started to iterate what that would look like and how it would come together. And do we do it through the agency proper? Do we set up something independently? Which is what we did. Because I think it's important to be independent in the way that it's structured and raised good amount of money and looking to do a lot of deals in the category and really become the first of its kind of preeminent buyer in this category.
- [145:29]
Tyler
So, yeah, excited for creators or media businesses that wind up with the Disney style business, the flywheel of multiple properties, multiple revenue streams, do you find that those businesses are sort of organically grown by garden, like a garden, or built brick by brick? Like how often do creators have the idea of where they want to go and they execute one step at a time? Because I always think of that Disney flywheel and it's a beautiful napkin sketch and it's so cool. And you understand how the business works. But when he drew that, it was like two years before he died. It was very much a reflection on a life's work.
- [146:12]
Tucker Brown
Yeah, listen, the best creators really are creative geniuses, but there's not always cohesion with how they think about the future and what they're doing. So oftentimes I may see the whiteboard over there in the studio. You walk into their offices the same way I walked into Dude Perfect's office in Texas, and you see a whiteboard scattered with ideas and it's all brilliant. It's not necessarily put together and structured in a way that provides, again, a lot of cohesion, but there's a lot of opportunity that they see. And I think first and foremost what they've all done successfully is they focus on building a pretty rabid audience and building engagement with that audience. And then once you have that and you have that captive audience, it really expands and opens up the world of opportunity beyond whatever that core product or offering might be. So for them it was trick shots on YouTube and then you build an audience there. Kids, family comedy. And you can extend that into live events, into products, into things. They probably, certainly in 2009, when they started, didn't think they'd have a line of products in Walmart necessarily. But then you start to dream bigger. Once you realize that what you're doing is actually working and resonating with the audience.
- [147:21]
Tyler
The fund that you've built, how permanent is the capital? Are you thinking about a certain fund life cycle? Is there a world where maybe not today, but in 10 years? We are talking about capital markets, public markets, creators going public. There's been rumors about Mr. Beast. I could see that happening, but that might be like a exception that proves the rule. But is there a world where in a decade we're looking at like, yeah, like the top 20 YouTubers and podcasts are public?
- [147:46]
Tucker Brown
Yeah, certainly possible. I mean, it's the, you know, it's the fastest growing segment of entertainment. People want exposure to that. It's going to start with private capital. I think it will probably move into the public markets. So, yeah, I think we're moving in that direction. For us, I think permanent capital is an important part of our strategy. We want to, we don't want to be forced into an unnatural life cycle where we're forced to sell quickly. Creators don't, you know, feedback.
- [148:10]
Brian
Yeah, they're like, hey, you're doing your life's work. But also we're going to try to just change up who you're partnered with in a decade. Whereas like CPG business or software company, like the management team might be fully turned over over the fun life cycle.
- [148:25]
Tucker Brown
So we try to again, in structuring this, we tried to solve for what we heard was important to creators in the transactions. I've been around and some permanence of the partnership or permanent capital is part of it. Letting creativity sit and remain with the creators, even in a controlled transaction, so there's no interference in the creativity of what they built. That's really important. Even if you're selling equity control.
- [148:49]
Tyler
Yeah.
- [148:50]
Brian
Yeah, to me I look at it and I can see over time this just being more and more and more important part of CAA strategy. Because the challenge right now is you have creators. Historically there was maybe I don't, you know, you'll know much more about the history. But my feeling is that historically there was like maybe 500 stars that matter and then now in Media there's like 50,000 stars that matter across every single vertical. It was, it was maybe easier to run a business when you had, you know, you could just focus on like a smaller number of like really, really big stars who were running their own, you know, basically they had their own individual businesses. But when you have 50,000 creators in all these sub niches, you can't, like it seems like there's probably a limit. Like you can't scale the CAA team 1020 X and expect to be running the same thing.
- [149:43]
Tucker Brown
You need too many agents.
- [149:44]
Brian
Yeah, exactly.
- [149:45]
Tucker Brown
Cover it all.
- [149:46]
Brian
And so as a sort of new strategy, saying like, hey, we're going to try to service as much of that market as we can, but we're also going to try to find the best talent and businesses across all these different categories and then be a long term partner to those and actually participate in their overall business.
- [150:05]
Tucker Brown
Yeah, you go deep with the ones you believe matter most and are positioned to scale the most. Right. So we're not, you know, trying to transact with hundreds or thousands of creators. It really is to pick the businesses we believe in and categories that we think are exciting and scalable and go deep with them across the board. On the capital side of things then you know.
- [150:25]
Brian
Yeah, how with the agency, how do you think about stages in a creator's life cycle? There's people that are going to be incredibly talented from a just pure talent standpoint. There's people out there that are like not even good at making videos but have incredibly engaging content because they're so good. And then usually they graduate into having better and better teams and eventually maybe they get into products. But how do you look at the different stages? What's too early? When are you seeing an individual who's showing all the potential but is too early for maybe a transaction?
- [151:04]
Tucker Brown
Yeah, we don't like to be hyper prescriptive with how we look at it. I mean there's certain things we do look for to assess whether it's the right stage for us to get involved. If it's an individual without a business, it's tough for us. There's a lot of work to do probably to Pull it together and make it transactable. So we look for it to be an actual business that's been built and scaled to some capacity. Right now.
- [151:25]
Brian
Is that like multiple revenue lines? Not dependent entirely on platform revenue like those kind of.
- [151:31]
Tucker Brown
Maybe an operator diversified to some extent. Maybe an operator not essential. I mean there was no operator duper when we did that deal.
- [151:37]
Tyler
But they do everything themselves.
- [151:39]
Tucker Brown
I mean there was I think 20 employees. The oldest outside of them was 24.
- [151:43]
Tyler
Yeah. But they didn't have like a business guy who would do like a single business. I love that. That's awesome. Yeah, it's a different business.
- [151:51]
Tucker Brown
Yeah, it's 80 employees now. Yeah, yeah. So you look for some sense of a business achieve diversification and some it doesn't need to be massive. But yeah, some off platform monetization is, you know, is attractive and then yeah. Scale of revenue, profitability. We really only like businesses that are profitable. And that's, that's not, I don't say it's not hard to do, but in this category it is. You're used to seeing margins that are not common in traditional media.
- [152:18]
Mark Zuckerberg
Right.
- [152:18]
Tucker Brown
50% plus margins.
- [152:19]
Tyler
Sure.
- [152:20]
Tucker Brown
For creator business. Business is actually relatively, it's relatively standard. So sure.
- [152:25]
Rodrigo Leong
Yeah.
- [152:25]
Tucker Brown
Look for profitability growth and again, categories that we think are positioned to scale and where we can be valuable and add additional value. So you know, bring certain when you're,
- [152:34]
Brian
when you're underwriting a deal are like, how do you think about it? Like, how do you, how do you think about a business where you know, there's a ceiling? Like, and I imagine there's certain situations where you're talking totally is like, there's certain creators. I would say that we've always said that if you, if you asked us to make content for 100 million people, we would just wouldn't enjoy doing it because we'd be covering topics that are not interesting. Right. To us at least. And there's I think a lot of creator businesses where there's sort of like some TAM from an audience standpoint in the category.
- [153:13]
Tyler
You don't think we can get 100 million views on an SK Hynix Advertisement? Reaction video. Jordy, have some faith. Have some faith. We'll see how that does Korean memory advertising come on.
- [153:25]
Brian
But I can imagine you're talking with a creator and saying like, hey, I think that you're a $5 million business today. I think that you can get to 40 and that's going to be enough for it to be a home run for you and us. Like Is that a conversation that you have or is it always like, I need to see the path to superstardom and you know, nine figures of revenue?
- [153:46]
Tucker Brown
I think, listen, there's a difference between how we might underwrite the deal and think about where there's a ceiling and then how you communicate that to a creator. If you're trying to justify, you know, value, maybe that's part of the conversation. But really they, you know, the best creators won't really cap their potential.
- [154:03]
Tyler
Yeah.
- [154:03]
Tucker Brown
So even if it's a $10 million business today, they probably think this is a billion dollar business if we do it right, if we sort of serve the audience in the way that we can. And so honestly, any of the businesses we look to transact with now, probably we ourselves believe could be billion dollar plus businesses. And if we don't believe that, we're probably not betting in the right categories with the right creators. It's early to maybe make that kind of call in this space. But, but to the earlier comment about public markets potential, I think we'll see many of these businesses scale to that billion plus dollar mark, potentially go public. And yeah, it's just, there's a lot I think that's left to.
- [154:43]
Brian
Would it end up is a more likely or one of the more likely paths where you end up with effectively an index of a bunch of top creators. Because to me, like creator business is like, I don't know that many creators even like look at the most sophisticated operations like a Mr. Beast, right. You have these like nine figure Amazon deals, you have these consumer packaged goods businesses, you have, you know, royalty streams effectively. But him running, him running his business being like, I got to make sure that next quarter is good, otherwise we're going to nuke. Like that feels challenging. Whereas if you took a basket of, you know, 200 top creators that, that were trading, you could see that being like stable and growing. You know, you're looking for sort of
- [155:30]
Tyler
like a manosphere ETF for you so you can have exposure to
- [155:35]
Brian
in one ticker.
- [155:39]
Tucker Brown
I do listen, that's, that's partially what we're trying to do. Right. I saw the difficulty from institutional capital partners to transact with single creator business, single assets. Yeah, they're all eager to get into the category. They want money to work. They talk about it all the time. You bring them a deal that's attractive and they're like, we can't, we can't do this. There's too much risk. If you bring a basket though, right. I think it's a lot more Attractive
- [156:03]
Tyler
and in some ways, dude, perfect is a little bit of a basket. There's a number of on camera talent. It's not single person, single name. And same thing with, with Midas Touch. They have a number of, of products in their portfolio and number of hosts and whatnot.
- [156:17]
Tucker Brown
Yeah, the more, the more layers to diversification you can achieve.
- [156:20]
Tyler
Of course it's going to be easier.
- [156:22]
Tucker Brown
Right. So the business itself.
- [156:23]
Tyler
Yeah.
- [156:23]
Tucker Brown
The talent maybe that's involved and for us, the portfolio that we build.
- [156:26]
Tyler
Yep.
- [156:28]
Brian
How are you, how are you building out your pipeline of opportunities? Are you going. I met, you know, you're in Cannes, you're meeting a bunch of creators but I imagine you're like probably the beauty of creator businesses, they're out in the open. Like an invisible creator business is not. Whereas some of the best deals in traditional private equity are like you would have to live in the town and know that this certain business was printing.
- [156:56]
Tucker Brown
Yeah, they're out in the open but some of the flashiest ones don't always have the numbers you might expect that they would. Some that you don't think about as much. A little quieter building actually really significant businesses in a different way. So you don't always know everything, even if it is quite visible. You know, I've had the benefit of living in the category for a little while so I've seen a lot and have a good sense of what, you know, the immediate attractive targets might be. You know, we again have the relationship with the agency at CA. We've got a 308 creator clients. Not all of those would make sense for us but a lot of them are growing and are looking to potentially think about capital partners. So there's a built in pipeline there and you know, we're open for business. I've gotten a lot of great inbound opportunities that have come our way since we announced. So yeah, it's. There's a lot, a lot of activity and a lot I think for us to do.
- [157:47]
Brian
How much time are you going to be spending in New York versus la?
- [157:51]
Tucker Brown
La, yeah. So I've been back and forth over the last decade plus quite a bit. I spend the winter out here usually smart to do in New York's not always the most fun. So I'm usually here about twice a month. We'll have a headquarters probably in both, you know, both locations and then you know, creators are kind of everywhere too. So New York and LA been the hubs of Entertainment London a bit internationally but we see that much more dispersed with creators that are all over the place. So yeah.
- [158:21]
Brian
How is the influencer creator industry evolved in China? Is it similar? How does it, how is it similar versus how does it differ from the us? Yeah, like they were big and early in like live shopping, for example.
- [158:37]
Vincent Weiser
Yeah.
- [158:38]
Tucker Brown
I mean you have a sort of massive, you know, massive population. All the numbers you see with businesses over there are pretty crazy from an audience perspective. Listen, transacting with China.
- [158:52]
Brian
Yeah. I can't imagine you could do deals there. But I'm saying like when you look at that market, is there anything that you see that allows you to feel like you're seeing into the future?
- [159:04]
Tucker Brown
It's tricky, right? Because if you do take that as a learning and you try to apply it to a different territory, it probably won't necessarily translate in the same way.
- [159:13]
Brian
Yeah. Live shopping has taken off in the US but it's a lot of like functionally gambling, not like buying oranges.
- [159:19]
Tucker Brown
Yeah.
- [159:20]
Tyler
Oh.
- [159:20]
Brian
Like a lot of these like live shopping platforms are like people live breaking open packs of cards.
- [159:26]
Vincent Weiser
Yeah.
- [159:27]
Tyler
Unboxings and stuff.
- [159:28]
Brian
Like they're like shopping for apparel in the same way that in China, like a lot of these live shopping platforms, they would start with like you could literally go and buy new kiwis and you see the kiwis and then you're just hitting.
- [159:40]
Tyler
Apparently China doesn't have a Joe Rogan. Like they don't have a really dominant just public commentator who just gives his random opinions about everything.
- [159:48]
Brian
I think somebody like Joe Rogan that's commenting on that many things, it's a
- [159:52]
Tyler
little risky politically actually. So.
- [159:54]
Rodrigo Leong
Yeah.
- [159:56]
Tyler
What about Hollywood? What's been your update on the creator economy's interaction with Hollywood? Post the trifecta of creator led movies. So obsession, backroom rooms, Iron Lung 3, born on YouTube crossed over. This was predicted like a decade ago. It's finally here. It feels like very high status, but maybe not actually moving the needle for some businesses. Not something reliable like something low status like ads and merch, which might actually drive a business forward.
- [160:27]
Tucker Brown
Tough to. Yeah, again, tough to rely on that and bet on that as a business model in and of itself. It's a component that's pretty interesting for creator businesses. I mean it was a big kind of narrative early on in podcasting, using podcasts as a cheap sort of IP development mechanism for long form content. Yeah, same thing with YouTube. Right. A cheaper way to test and see if you've got an audience and then use that to sort of monetize in long form. So it's a great trend, I think that we're Seeing more and more of that. It'll continue.
- [160:58]
Tyler
We were talking to Alex Hormozi about this yesterday and. And it was interesting thinking about. He was saying that he just doesn't reach the same audience as a Ramsey, as a Dave Ramsey who just has syndication on so many radio shows. And if he were able to crack into that, it's not that that deal would make him that much money. It's that it would expose his overall portfolio, his overall business to a new tranche of clients and potential customers, but also audience members. And so there's an interesting world where you could underwrite the, you know, high risk. Maybe this person does the next obsession. Or you could say this person's on a track where they are going to crack distribution on radio or TV at some point and they're going to be on that channel and that's going to be a halo for the overall business. But obviously hard to predict.
- [161:48]
Tucker Brown
Yeah, that's why it's hard to underwrite against that. Right. I mean, it's a. That moonshot outcome could drive upside, but probably not going to be a base case underwriting situation.
- [161:59]
Tyler
That makes sense.
- [161:59]
Brian
What about Substack and potential new platforms?
- [162:05]
Tucker Brown
Substack, You've seen some really nice businesses built and monetized on that platform. So in the same way that YouTube can be a core that you build off of another area is you can take YouTube build into subset. The same thing. I think we're seeing migration from substack into video and other, you know, other platforms. So it's one of the kind of top platforms that we're actually looking at to evaluate if there are things for us to invest in there and again, migrate that audience into other mediums. So, yeah, there's a lot to do in that category.
- [162:37]
Brian
Yeah. I was thinking like, why is there no substack for video? You know, like a platform that was less algorithmic. And of course, the substack for video will almost certainly be substack.
- [162:49]
Tyler
Yeah, yeah. Probably you just gotta get the right people on there or something. It's hard because like as soon as you make a video you're like, well, this wants to be replicated everywhere on the Internet. So let me throw it up on
- [162:59]
Brian
every channel, timeline to first deal announcement, any prediction.
- [163:03]
Tucker Brown
Are you gonna hold me to it? It's always hard to.
- [163:05]
Vincent Weiser
Are we gonna.
- [163:05]
Brian
I mean, but we know we have friends with father that have a unique strategy and sometimes they don't do a deal for 18 months after closing a fund.
- [163:15]
Tucker Brown
So like, I think we benefit from a bit of a running start. Because we have been in conversation with creators, we've had this in the works for a little while. We have relationships that are warm, so we're looking to move fast, but also want to be thoughtful. We know those first couple deals are going to be really important for setting us up for longer term success. Love to think we get something done by the end of this calendar year. These deals, at least the ones I've been around historically, they do take time. There's a relationship element to it that involves a real time commitment. You want to make sure it's, again, obviously structured the right way. So we're ready to go. Just want to be thoughtful about making sure that we're picking the right partners and setting up the right deal for ourselves.
- [163:57]
Tyler
Makes sense.
- [163:58]
Brian
Amazing. Let's hit the gong for the fund itself. No, I want Tucker to hit it. Look at this guy. He's a gigachad. You can have at it as hard as you want.
- [164:08]
Tyler
It's warmed up.
- [164:08]
Brian
It's warmed up.
- [164:09]
Tyler
It's warmed up.
- [164:11]
Brian
Break it.
- [164:11]
Tyler
There we go. Well, thank you for coming on the show. Thanks for coming on down. We can wrap the show there.
- [164:19]
Brian
Can't wait to do this with your first deal.
- [164:21]
Tyler
Yeah, we're excited for that. Leave us five stars on Apple Podcasts and Spotify. Sign for newsletter tbpn.com and we'll see you tomorrow. Goodbye.
- [164:30]
Mark Zuckerberg
Cheers.
- [164:31]
Brian
Love you.