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- [00:01]
John
You were watching TVPN.
- [00:03]
Jordy
Today is Monday, June 29, 2026. We are live from the TVPN Ultra Realm, the temple of technology, the fortress
- [00:09]
John
of finance, the capital of capital.
- [00:12]
Jordy
I'll tell you about ramp.com, time is money save. Both easy use, corporate cards, bill payments, accounting, and a whole lot more all in one place. I'm gonna adjust my IEMs. Well, on the front of the Wall Street Journal today, this is how you know, this is the whole AI 2027 Washington waking up. The AI stories are making it to the front page. The world news section, not just the business and finance section. More and more so, the very front page of the Wall Street Journal. Of course, the picture is about the heat wave, but the lead, the story with the largest text is about artificial intelligence. China resets the AI race with the United States as security models mark gains. We're going to get into it. This is a fascinating debate because I thought that we'd have a conclusion to the open source AI debate By now. Either the frontier would have collapsed and there would be perfect commoditization, or they would have fallen apart.
- [01:17]
John
It will never be a conclusion. It'll just go, it's over. We're so back. It's, it's over.
- [01:22]
Jordy
If you're in open source AI, that's exactly how it feels.
- [01:26]
John
Before we get into the story completely, Hill in the chat said, did you see the US National Design Studio Open Source Day privacy model? We did, and we got them coming up today in just 45 minutes at 11:45 and I are going to be talking about a first iteration on device PII redaction model that is far smaller than existing models.
- [01:50]
Jordy
It's actually tiny. It's 15 megs and you can do it in the browser.
- [01:55]
John
And we have Chad Rigetti. He's coming on to talk about a whole lot of quantum mumbo jumbo. We'll see what's going on there.
- [02:04]
Jordy
And pim's coming back from General Intuition. And we got a bunch more founders coming on. Jacob DiepenBroch announcing a $30 million oversubscribed fund with tons of TVPN guests already in the portfolio. The rest of the portfolio soon to be on the show, I'm sure. Anyway, open source AI. So the big story is centered around GLM 5.2 from Z AI. It was officially released June 13, so it's taken a couple weeks for it to really break through to the front page of the Wall Street Journal. But they're seeing some strong performance on benchmarks, some positive Reviews from developers I have a whole review from Tyler. We can go through in a little bit, but we're now entering another round of debates around open source AI. What can the model actually do? Is this a threat to national security? What are the geopolitical ramifications here? I'm sure this will be an ongoing conversation throughout this week, probably next week. We have some guests lined up to help contextualize it, but laying down the facts from the Journal Security researchers said that a new AI model released this month by China's Zhipu AI, also known as Z AI, can match the latest US models when it comes to finding security bugs, a development poised to reset the global tech race and pressure the White House in its overhaul of US AI policy. So unlike models from Anthropic or OpenAI, ZPU's GLM 5.2 is open. Wait, you can just download it, run it anywhere? You don't need to go to an API, you don't need to go to a private company and pay them. You can run it on your own server, provided you have the electricity and GPUs to do so. It is expensive to run, as we'll go into, but it is open weight. The Wall Street Journal says that means it can be downloaded, run on hardware operated by anybody, and can be modified and used without supervision. Scary stuff. Open weight models are ideal for users who want unfettered access to systems they control, but they're also ideal for hackers who want to run them in the shadows.
- [04:06]
John
Unfettered Intelligence.
- [04:08]
Jordy
Unfettered. Ooh, that's good.
- [04:10]
John
We were completely out of names for new NeoLabs.
- [04:14]
Jordy
That's a good NeoLab name. Yeah.
- [04:15]
John
Unfettered intelligence.
- [04:17]
Jordy
Unfettered intelligence is good. GLM 5.2 has ranked as one of the top 10 most used AI models, according to data from OpenRouter, a company that provides access to more than 400 AI models. And what a fantastic business. Alex Atala over there. Absolutely cooking at openrouter. It's such an exciting way to plug into the AI the AI race without actually needing to play the benchmark game. So much. Be the front door anyway in some benchmarking tests. According to CyberSecurity company SEMGREP, GLM 5.2 bested Anthropic's clawed Opus 4.8 model, which was released in May. When given Further instructions, Opus 4.8 and GLM 5.2 can match mythos in bug binding ability, according to researchers. So prior to this launch, and there's a chart that we should pull up here about overall AI capability. We can talk to Tyler about what this chart actually means. But there was this narrative brewing that open source AI was slowing down relative to the closed source frontier. And I saw a lot of American AI fans sort of cheer for this. Hey, we have the capital markets, we have the data centers, we have the researchers. And so we are able to push the frontier at a different rate. And if we're actually growing at a faster rate in America within the closed source labs, that will compound and there will be a stronger takeoff in the American closed source AI industry. Now, this chart sort of goes back and forth and there's some debate over it. It's in the newsletter. You can go sign up@tbpn.com while we're pulling that up. 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 start to finish. So this chart, which we can pull up, shows progress from GPT 4.0 to 0103 mini 03 opus 4 GPT 5.5.2 opus 4.6 GPT 5.4 GPT 5.5. Showing a linear trend in this Elo,
- [06:25]
John
which is a blend, says GLM 5.2. Sounds too much like a gray market peptide.
- [06:31]
Jordy
It actually does. It does sound a lot like that. And then you can see the red line are the Chinese models, which are also improving over time, but at a slightly lower rate. And so the question was, are they going to plateau while America's progress continues to advance? And this latest model, GLM 5.2, seems it's very hard to apply it to this particular benchmark because this error ELO was. Can you give us some background, Tyler, on where this chart came from, what this is demonstrating?
- [07:06]
Tyler
Yes, this is by Casey. I think it's how you pronounce it. The center for AI Standards and Innovation, they have, they have this way to calculate, like the ELO model. It's basically a kind of approximation of a bunch of different benchmarks. Some of those, like, are proprietary, like they're not open. So it's actually hard to run these also because I was basically trying to bench, like all the recent models since this was published. Yeah, it was, I want to say, May 1st.
- [07:30]
Jordy
Yeah, it'd be great to throw 5.6 SOL, mythos and fable. It would be great to just continue this chart because it's an interesting trend.
- [07:39]
Tyler
So a lot of those benchmarks aren't Actually public. So it's very hard to estimate. But I tried, I got. You can look at like some of the benchmarks that are public that you can reference. You can kind of match them up to previous models. 5.2 Looks like it is like a big step up from the like Chinese trend. Trend line.
- [07:57]
Neil
Right.
- [07:58]
Tyler
But. But even then I think it's hard. Like I think the group of benchmarks that were chosen for this ELO like definitely accentuate the gap between us and Chinese labs. I think there's a bunch of other like groups like Epoch AI has done a chart. They basically a relatively stable gap between closed source and open source models.
- [08:22]
Jordy
Yeah.
- [08:22]
Tyler
Since like 2023. Like a long time.
- [08:24]
Jordy
Yeah. And perhaps at this point the discussion should be more centered around cost per task more than cost per token.
- [08:34]
Tyler
Yes, definitely. Because even like new models a lot of times when they come out like okay, maybe the token price is actually the exact same but the token efficiency is much better then when you do a lot of these tasks it's not the price for token, it's price per something completed. And then you actually see it.
- [08:51]
Jordy
And there's a lot of test time scaling laws where you can just throw a million dollars of compute at a particular problem and all the models do really well at it. But it's completely non viable for any real enterprise use case and probably not even viable if you're trying to be a nefarious hacker or something.
- [09:08]
Tyler
Yes. Most people are saying like 5.2 is very token hungry.
- [09:12]
Jacob
Right.
- [09:12]
Tyler
So it uses a lot of tokens. So maybe it definitely is much cheaper than the frontier models.
- [09:16]
Jordy
It's on a per token basis.
- [09:18]
Tyler
On the per token basis.
- [09:19]
Jordy
But on the per task basis it might be more expensive.
- [09:22]
Tyler
Yeah, I mean that's still. It's generally not but on specific tasks if you have low thinking models, low thinking mode on the closed source ones.
- [09:30]
Jordy
Okay, well let's revisit John Ludig's post from 2024 May 2024. This is pre Deep Seq talking about his prediction about why the future of foundation models is closed source. He got a lot of pushback from this because a lot of people like open source models. But he laid out a thesis around closed source data. Flywheels, exponential capex intensivity of training. And he said open source will have a home wherever smaller, less capable and configurable models are needed. Enterprise workloads for example. But the bulk of the value creation and capture in AI will happen using frontier capabilities. The impulse to to release open source models makes sense as a free marketing strategy and as a path to commoditize your complements. But open source model providers will lose the capital expenditure war as open source ROI continues to decline. And that was the thesis around the time that the open source AI discussion was primarily driven by Mark Zuckerberg's work at Meta on the Llama family of models. The idea was that Meta would benefit from attracting talent. It was good marketing. It told the story that Meta has an AI story and has AI talent in house, even if they weren't monetizing it and sharing, you know, a really fast takeoff in ARR around those models. It showed that hey, they're able to develop these models and that might help them cut their costs in the long term. Very interesting that that wound up being very different in 2026. Looking at the news today, which we'll go into about them spending a lot on Gemini, there's been reports about them spending a lot with other closed source frontier labs that they should have commoditized with their open source plan. But nonetheless that was the idea with Meta. But then China sort of woke up and the deep seats and deep seats launch at the start of 2025 and the game theory became way more complicated. So George Hotz sort of summed this up nicely. He has a take in AI will be massively deflationary Post from just a few weeks ago as to why China benefits from investing in open source more than American firms. He says this explains why the Chinese are giving the much more moderate resources to train models away for free. They love to see deflationary economics in the us it is not, it is much less of a service based economy. And so if they can go and give away free tools that deflate the value of the service sector, that is an advantage to the the Chinese economy in his formulation. He says even if you don't regulatory capture the US government, nobody is getting a monopoly on AI. We don't live in a unipolar world anymore. And so he compares what's happening in he likens what's happening in D.C. to sort of rearranging deck chairs on the Titanic. It's a very fun, fun piece, but so we're back to this discussion of what are the consequences and the impacts of open source models, particularly in the United States. And there's been this clip that's resurfacing from Dario Amadei when he was testifying in front of Congress in 2023 and it's now recirculating and it was reposted like he Just said it and he did not. So be clear about that. This is from three years ago. But some of his predictions were very prescient as of where the frontier is today. So he said, I'm very concerned about where things are going. If we talk about two to three years for the frontier models for the biorisks is sort of a bad transcription of what he was saying. But he's talking about 2025, 2026. Remember he was saying this in 2023. We're there now. I think the path that things are going in terms of the scaling of the open source models, I think it's going down a very dangerous path. And again, if the path continues, I think we could get to a very dangerous place. So he was worried about cybersecurity and biorisks being open sourced and then not having a counterweight to that. Now the good news is that we've Talked to the CEOs of cybersecurity firms like CrowdStrike and Palo Alto Networks and they've been working with Mythos and GPT 5.5 Cyber for months now to harden systems from LLM driven attacks. And so there's still this gap between closed source and open source models. And that gap allows white hat hackers to implement fixes before black hat hackers have a chance to to exploit easy bugs. There still will be a bigger discussion here though in DC over the next few months as the frontier models roll out. And the gap doesn't appear to be widening at the moment. So security stances must adjust. It's not a closed source is falling behind, so it's never going to be an issue. There will be this gap. And how the American cybersecurity industry, and eventually the biosecurity industry, implements changes and fixes before open source catches up or commoditizes and makes that particular capability widely available is going to continue to be important. So let's go over to Tyler's quick review of GLM 5.2. Why don't you take me through your bullet points that we shared in the newsletter@tvpn.com and you can tell us what is the shape of this model? How are the reviews?
- [14:44]
Tyler
Yeah, so I think so far one of the main things is like people are saying, oh, it's distilled.
- [14:49]
Jacob
Right.
- [14:49]
Tyler
This has been a big thing with a lot of these open source source models, especially Chinese ones. Oh, the only reason that they're good is because they're distilled. It's very hard to actually figure out how true this is. But People are, you know, it certainly seems like there's some, you know, I think of anthropic models.
- [15:06]
Jordy
Didn't anthropic openly accuse Alibaba of distilling
- [15:11]
Tyler
a number of these, these labs?
- [15:12]
Chris
Yeah.
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Jordy
And there's also been a big like professionalization of the gray market where a whole bunch of different sort of individual groups will connect a whole bunch of different entities and users, subscriptions and APIs to then create a front end to the model that can be served at a very high rate through a vpn. Most likely. What's interesting is that you'd think that if you were going to do a training run, you would just find and replace on the other lab's name before you hit run. Is that not something people can do? I don't understand.
- [15:52]
Tyler
Yeah, I mean it also depends on what you're actually like. Maybe you're not directly distilling on the API, but you're turning on public GitHub repos. And those were all used, those were all made with open source models. You're kind of like distilling, but it's not really like, is this really kind of distilling? I don't know.
- [16:10]
Jordy
Yeah.
- [16:10]
Tyler
So if you are, if you're convinced that these are like super distilled, the only reason that they're good is because they're just basically taking the closed sourced labs.
- [16:20]
Jordy
There's also this weird thing with distilling where as more and more of the public Internet and GitHub broadly and open source repos become LLM outputs, if you train on that, you are in some ways distilling because an LLM has a quirk like it's not this, it's that in text. And you wind up training on a whole bunch of Amazon Kindle books, you're going to wind up learning it's not this, it's that. And the same thing applies for different code conventions in open source repos that have effectively been completely been rewritten by closed source models.
- [16:54]
John
Yeah.
- [16:54]
Tyler
So I think it's safe to say that we've generally seen that distilled models generally will generalize worse.
- [17:03]
Chris
Right.
- [17:03]
Tyler
So you'll see really good benchmark scores. Maybe they're benchmax, maybe they're not. But even if they're not like directly benchmax, you still find that they generally.
- [17:10]
Jordy
Yeah, they're kind of accidentally benchmaxing.
- [17:12]
Tyler
Yeah.
- [17:12]
Jordy
Yeah.
- [17:12]
Tyler
So you should always. So I think initially you should just be a little bit suspicious of these super high benchmark scores.
- [17:17]
Jordy
Yeah. But they lack that big model je ne sais Quoi?
- [17:21]
Tyler
Yeah. And this is like anecdotally reinforced. A bunch of people have been saying, you know, for coding, these models are really great glm. It's a very good model, you know, for creative writing or something like this where you'd imagine it's a bit harder to kind of benchmax this. Yeah, they'll perform a bit worse.
- [17:36]
Jordy
Yeah. I wonder, have people been testing it with the like Tiananmen Square bench? Like does it reject that stuff or. Because it felt like that was something that was like widely misunderstood by American audiences, that in fact that might not be the biggest deal for the ccp.
- [17:53]
Tyler
Yeah. Also I think, you know, even if that's true, like the model is open source, you can kind of just fine tune it to like.
- [17:58]
Jordy
Sure.
- [17:59]
Tyler
Not maybe it's a bit harder than that, but I think you can kind of get around like that kind of stuff.
- [18:03]
Jordy
Okay.
- [18:04]
Tyler
Yeah.
- [18:04]
Jordy
So we talked about the token hunger and the API price and in general, I mean you said, I'm not convinced that there's a big market for this class of model, especially as frontier models get more efficient. If you look at OpenRouter, the most used models are the smallest open source models presumably being used for specific tasks that need to be repeated over and over again.
- [18:26]
Jack
Yes.
- [18:27]
Tyler
I think like what we've seen is you know, like a marginal IQ point of the models is like extremely expensive. Frontier models are getting very expensive. People have to cut back, they're token maxing. This is like massive bill on their balance sheet or whatever. I think like it seems like there's now basically like two classes of models that people really use. There's like the frontier ones and they're using coding agents. They need the best thing. If you're doing cyber like you just need the best model because the risk of someone hacking you, it's so great. You just need the best thing. You pay whatever it is. And then there's the second class which is like these very small, very fast, very cheap models that you can use for these kind of point solution things. Maybe you have some orchestration where you're using a really big model to have these little agents using these very cheap models. I think in the middle it's hard to actually figure out what is the real use case. Maybe it's like hobbyists using these coding agents and they don't want to pay the super expensive tokens of the closed source labs. But generally you see this on open router where what are the top models by token usage? It's these very small models. It's Like Deep Seq Flash, because you're
- [19:43]
Jordy
spamming them for every receipt that goes into to ramp gets processed by an LLM. At this point, does it need to be a frontier model telling me that I spent $10 on a coffee? No, it can just do standard OCR.
- [19:57]
John
That'd be my preference.
- [19:59]
Jordy
Yeah, you want super intelligence overseeing your expenses, most likely. But no, you use the right tool for the job and that's clearly what's happening on retic.
- [20:08]
Tyler
But also I think it is a very good model we should not fully dismiss. I think the idea that, oh, the gap is widening. We really don't have to worry about these models. I think they are very good.
- [20:19]
Jordy
Yeah, yeah, yeah.
- [20:19]
Tyler
And maybe if you're super worried about distillation, maybe something changes if the models are kept to these big partners, like what we've seen recently with government coming in. But I think we can't really fully dismiss these labs.
- [20:33]
Jordy
Yeah, it throws a little bit of a wrench in the monetization potential. Like how long can you monetize a new frontier model? That's more tricky. And then the other one is just like if you're going to keep a model behind KYC or behind an approval for specific companies, like the government has been sort of edging towards and moving towards. It gets a little bit tricky if all of a sudden you just wait three months and oh, I was waiting to get approved for the, this one for GPT7 or whatever, but by the time the government got back to me, my company got access to GLM6 and it's close enough. That just throws another wrench that I think the government will have to figure out how it puzzles together with the rest of the strategy, which has been back and forth as always. Anyway, 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 agents.
- [21:40]
John
Google caps matters. Gemini use as AI demand strains capacity in the financial times, surging appetite for advanced models is turning computing power into the tech industry's scarcest commodity. And they have a picture here of a Google Gemini bicycle which looks fantastic.
- [22:00]
Jordy
What does that have to do with. With meta though?
- [22:03]
John
I think that was just the best Gemini picture.
- [22:08]
Jordy
It is hard. Otherwise, it's just a picture of a phone screen. I mean, you saw in the Z AI it's just a picture of the app which is like so boring.
- [22:15]
John
Imagine writing this.
- [22:16]
Jordy
Or it's the stock image of the brain with the neurons that's Always good.
- [22:19]
John
What do you think? I mean, this kind of ad placement, like on a. What do you actually call this? It blocks water? No, no, no, just the. The part that blocks water from. If you were to ride.
- [22:32]
Jordy
Fender flare.
- [22:33]
John
Yeah, Some type of fender thing.
- [22:35]
Jordy
Sort of like a mansory kit for a city bike.
- [22:37]
John
Exactly, exactly. But imagine riding that Gemini bicycle in the rain. Fantastic. Google has.
- [22:43]
Jordy
That's what it's for. So the water doesn't come up and splat you. Interesting. Okay. I never knew what that was for.
- [22:48]
John
You never knew that?
- [22:49]
Jack
No.
- [22:49]
Jordy
This is educational.
- [22:52]
John
The experience of hosting the show is educational for both of us.
- [22:55]
Jordy
It is.
- [22:56]
John
Google has put limits on Meta's use of its Gemini AI models after the social media giant sought more computing capacity than the rival tech group could provide. In the latest evidence of the infrastructure constraints facing even the world's largest AI providers, Google told Meta around March that it could not provide all of the Gemini capacity the company wanted to purchase, according to three people familiar with the matter, in a move that has disrupted and delayed some of Meta's internal AI projects. So I don't know, how much should we.
- [23:25]
Jack
How much this is possible?
- [23:26]
John
Yeah, yeah.
- [23:26]
Jordy
So one Google spent $200 billion on capex.
- [23:30]
John
Okay. So, of course, around this time, token maxing was becoming a thing. A lot of every company in the world, at least every tech company in the world's kind of going a little bit crazy from a spending standpoint. And so I could see Meta going and wanting to basically buy a bunch of capacity and then being told, like, hey, we can't fulfill that, but I'm wondering how much more we should read it. Like, read. Like, is it worth reading?
- [24:04]
Jordy
I mean, it sounds extremely bullish for Google.
- [24:06]
John
Like, if they're asking, this tracks with what they talk about on earnings calls. Yeah, yeah, yeah.
- [24:13]
Jordy
Google cloud acceleration.
- [24:15]
John
But you do have to wonder, like, could distillation be part of this story? Could that be a factor here? I have no idea. I don't know.
- [24:26]
Jordy
Zerohedge said Meta puts limits on Claude and Kodaks fearing distillation the information.
- [24:31]
John
But so this story is different. This is Meta telling its own employees don't use Claude and Codex in certain parts and certain parts of our business because we don't want. We don't want to accidentally do distillation is what Meta is saying. So that's different. I was wondering, is Google thinking like, whoa, that's a lot of cool it. Owing to the restrictions which remain in place, as well as the broader push to streamline AI costs, Meta has encouraged staff to be more efficient with AI tokens. Several other Google clients have been affected by the restrictions, although to a lesser extent Meta has been particularly impacted because of its exceptionally high demand for Google's models. Interesting, very interesting. I, I would love to see a pie chart like breaking down what all the different ways they're using Gemini in their business because Google has not broken out Gemini revenue. No, no at all to date. So we have no idea what percentage of their AI revenue is like actually spend on Gemini versus other like the
- [25:42]
Jordy
Gemini tokens broadly go into AI search overviews. So that's a search product probably insane token demand there.
- [25:50]
Jacob
Right.
- [25:50]
Jordy
You've seen the chart of like they're in the quintillion or quadrillion tokens category. And then you have YouTube now has Gemini plugged in and you can chat with any video and transcribe it. That's gotta be incredibly token heavy. And then you have Gemini app users and if free users and paid users. So there's got to be a lot of just Gemini internal usage. But it's remarkable. Yeah, I would love to see that meta pie chart because I thought that they were spending a ton with Anthropic, I thought they were spending a ton with Google, but I also assumed that they would be running a bunch of Llama workloads and a bunch of Muse Spark workloads because those models have performed well at various points in time. And if you go into the Meta app, you now have access to Museum Spark. And if you go into Instagram and you search for something, it populates it with a llama like llama 4 result. And so I would imagine that even though that product is not broken through like crazy, I would imagine that it's still generating a lot of tokens just because of the scale of Instagram. Instagram has a billion, 2 billion users, something like that. It's huge. And so even if it's people sort of accidentally winding up in an LLM powered workflow, it probably is generating a lot of tokens just because of the scale of that system.
- [27:17]
John
On the topic of Meta Meta Shared this morning, what they do a new milestone. It is a mind reader. Mind reader non invasive brain detects decoder research. Brain to QWERTY v2 building on v1 which was published today in Nature Brain 2 QWERTY v2 is the highest performing end to end pipeline capable of real time sentence decoding from raw brain signals. Advances beyond character level performance to decoding words and semantics, enabling accuracy for overall communication. So if you thought, you know, Instagram was listening to you. You thought I was listening to your conversations. Now you can have a new conspiracy at home, which is that they might be just listening to your thoughts.
- [28:09]
Jordy
Do you know the device? They say this is a non invasive device. I just shared an image of this device and I want you to tell me, do you consider this non invasive or invasive? Look at this image of the Magneto Encelafi device.
- [28:26]
John
No, you gotta go. You need to scroll up a little bit because you can't even see the whole thing here. It's not invasive because it looks like the device could actually potentially carry on for like a whole half of a.
- [28:39]
Jordy
It really does seem like it's just put yourself in this, in this room sized device. No, of course this is.
- [28:45]
John
No, I'm giving him, I'm giving him credit here. Non invasive, non invasive.
- [28:48]
Tim
Okay.
- [28:49]
John
As long as he.
- [28:51]
Jordy
You're putting this thing on, you're daily driving this thing.
- [28:55]
John
I don't know if I'm ready to daily. I don't know if I'm ready to daily it. This will be a cool demo. This will actually. When you can just walk in, sit down in a chair and see your thoughts on a screen.
- [29:11]
Jordy
No, we were debating earlier. My buddy Rob Taft's been on the show twice. Dropped five predictions in Forbes recently. We can go through them at some point he's gonna come on the show. But four of the five were very, very reasonable. You know, Anthropic is going to be bigger and TSMC is going to face more competition. And then he predicts that in 2030 telepathy will be commonplace, which is a very aggressive prediction in my estimation. It's certainly not like a straight trend line since TSMC has competitors right now. The prediction is just that there will be more competition. But truthfully, telepathy is not really existent outside of a few demos like this. It's not really something where it's like, oh yeah, 5% of people have the meta ray bans that take pictures. So face cameras are going to be bigger in five years and it's actually only three and a half years until 2030, which is sort of crazy to say, but we are getting quickly. To the future. To the future. Never sell your company. Should you ever sell your company. David center says no. He says the best founders in the world would never sell their company. You could never acquire Elon Bezos, Zuck Jobs, Ellison Jensen, Dell Page and Brin Scott Wu has turned down billions and keeps saying no. This is a great clip. Went super viral. I don't know, did I lose Internet or something? I don't know.
- [30:40]
John
Anyway, Tyler's Apple is in shambles.
- [30:45]
Jordy
I don't know about that, but there's some debate over this because Elon, that's not my app. Yeah, this is just X. Elon did sell two companies. He sold Zip2 and he also sold PayPal and then Jobs sold next back to Apple. Does that count? I don't know. He did sell Pixar to Disney. That sort of counts. And I mean Elon never sells his company. He just sold Xai to himself. But I guess that doesn't count. But yes, it is a funny thing. Didn't market push back on this.
- [31:21]
John
Yeah. So what is. Do you know the backstory here from Sasha?
- [31:25]
Jordy
I don't know. Tyler looked it up. Apparently there's a Business Insider report from the time that this happened in 2007. How Terry Semel fumbled Yahoo's Facebook deal How much Is Facebook worth? 5 billion? 10 billion? 15 billion? Whatever the number, it's probably a lot more than the 1 billion that Yahoo could have bought it for a year ago. As Yahoo continues its soul searching, here's an unpleasant rendition of Semels catastrophic decision, courtesy of Wired. When Yahoo came calling with a bid of $1 billion in cash, the pressure became too much. Zuck relented. In July of 2006, he was just like 18 months into building the company, something like that, verbally agreeing to sell Facebook to Yahoo. He said yes. He said he was going to sell Facebook to Yahoo, allegedly. Strategically, it seemed like a good match. Yahoo had hundreds of millions of users, but its foray into social networking was struggling. Facebook had cool tools and was looking for a mass audience. The timing, however, could not have been worse. In the days after Zuckerberg agreed to sell, Yahoo announced it was projecting slower sales in earnings growth and that the launch of its new advertising platform would be delayed. Its stock price tumbled 22% overnight. Terry Semel, Yahoo's CEO at the time, reacted by cutting his offer from 1 billion to 800 million. He just took 20% off. But Zuckerberg, who had been warned about Semel's reputation for last minute renegotiations, walked away. And that's probably reasonable. I mean, if they're cutting the price there, you have to imagine that as it gets papered, you get cut down again. Then the earn out, you get cut down again and all of a sudden you're walking away with barely anything. But two months later, Semel reissued the original $1 billion bid. But by then, Zuckerberg had convinced his board and executive team that Yahoo wasn't a serious partner and that Facebook would be be worth more on its own. He rejected the offer and became famous as the cocky youngster who turned down $1 billion from Wired.
- [33:28]
John
Legendary.
- [33:29]
Jordy
Legendary. It's so interesting to imagine the road not traveled there because the dynamic the way Facebook is built as a social network. Could it have been successful under Yahoo stewardship? Or would it have been less exciting, attract less talent, ultimately been disrupted? And would they have had the capital and the guts to go and buy WhatsApp and then also buy Instagram, you know, to actually maintain the dominant position in social networking? What do you think?
- [34:06]
John
I think Yahoo should make another offer. We were hanging out with Jim CEO last week, dear friend of ours and I would like to see Yahoo make another bid.
- [34:19]
Jordy
Hey, Meta's trading down just keeps going.
- [34:22]
John
If it continues at this trend, it
- [34:23]
Jordy
goes down to 99.99% might be able
- [34:26]
John
to pick up at this trend.
- [34:28]
Jordy
Anyway, 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. Moving on, what else is in the news?
- [34:41]
John
Chip makers are profiting off AI the expense of just about everyone.
- [34:46]
Jordy
This is on the COVID of the Business and Finance section.
- [34:48]
John
Today we are witnessing an extraordinary transfer of cash from the providers of AI and perhaps one day AI users to memory chip makers. Take us away, John.
- [34:58]
Jordy
The explosive growth in Micron Technologies profit in the latest quarter is extraordinarily good news for its shareholders, but. But it comes at the expense of the artificial intelligence companies to which it sells fast memory chips. Micron along with Korea, Samsung Electronics and SK Hynix are to AI what oil producers are to the airlines. Makers of an essential input that this year suddenly became much more pricey because there is extremely limited capacity to make the high bandwidth memory that AI needs and it takes years to build production facilities. Soaring data center demand simply jacked up prices. Micron soaring profits are for its customers, soaring costs. We are witnessing an enormous transfer of cash, they said. Profit shift of this scale are rare events and investors should be paying attention to where the money's coming from, where it's being spent and how long it will keep flowing. In the quarter ended May 28, Micron increased prices for DRAM chips more than 60% on the previous three months while increasing shipments by a low single digit percentage. It said last week prices for NAND flash memory, also used in data centers, jumped more than 80% usually memory doesn't matter that much. But for Micron, customers paid $18 billion more. And that was just in the quarter. Prices quadrupled in a year. And it's hurting outside AI to Apple last week raised prices for MacBooks more than 15%. Closer to home. Closer to home for me, the memory I bought on Amazon.com a year ago to build a super quiet computer. I hate fan noise. Good color commentary here. Has tripled in price and now costs more than the cpu. For an industry in which prices usually drop every year, it's a huge turnaround in consumer electronics. Passing on higher prices helps limit demand for chips just as higher oil prices reduce consumption. But the AI companies aren't passing on higher prices because they are able to throw money at supply problems. The problem in AI is that the end users aren't covering the cost of the service. With big losses being recorded by AI model producers. Everything is still priced to bring in new customers, yet not yet to make money. So higher input costs create a nasty problem. Either losses will either be bigger or higher prices will be needed putting off potential customers. And you can see the price of Micron's stock price has been through the roof as the company joins the $1 trillion club and becomes the first trillion dollar company headquartered in Boise, Idaho. Idaho. Got a trillion dollar company before New York, I believe, and also before Florida and Austin maybe. Something like that. It's rare.
- [37:45]
Tyler
It's rare.
- [37:46]
John
Crazy.
- [37:47]
Jordy
Mostly on the west coast anyway. There's a whole. There's a whole bunch of bull cases for Micron still. The stock could double from here. Says Barron's. I love Adam Levine and Barron's sharing the bull case. We can.
- [38:00]
John
Tyler, how many trillion dollar companies are there in Europe?
- [38:03]
Tyler
Out of curiosity, I'm going to go with zero.
- [38:08]
John
That's true. That is true. You are correct. ASML could get there maybe starting at around 700.
- [38:18]
Jordy
Wait, what about Eli Lilly? Or no, Novo. Novo was a trillion, right? Did it ever touch a trillion? I don't think so.
- [38:24]
Chris
Right.
- [38:25]
Jordy
It was real close.
- [38:26]
John
It's a humble 165 million.
- [38:29]
Jordy
Brutal.
- [38:29]
John
Wait, but what you're thinking of Eli Lilly.
- [38:33]
Jordy
Eli Lilly hit a billion. Yeah. Rough. Very, very rough. Comcast is planning to split up the company. Competition is escalating.
- [38:42]
John
Eli Lilly, The Indiana company.
- [38:44]
Jordy
John, is it from Indiana?
- [38:46]
Tyler
Indiana.
- [38:47]
Neil
Okay.
- [38:48]
John
Former Indiana startup.
- [38:49]
Tim
Okay.
- [38:50]
Jordy
Like it. NBC Universal and Sky will separate the company's connectivity business from its film, theme park and streaming operations. Oh yeah, yeah. Universal Studios. Comcast is up on the news. Comcast plans to separate its media and connectivity businesses.
- [39:06]
John
Who's building the anderal of theme parks?
- [39:09]
Jordy
It does seem like a.
- [39:11]
John
Could there not be an opportunity to create a net new theme park business with a modern technology stack?
- [39:21]
Jordy
It's very expensive. Everything needs to be like the modern technology stack in parks is expensive.
- [39:27]
John
You don't believe in in the cap the theme park capital markets.
- [39:31]
Jordy
I don't know. I know I've known people that have worked on theme parks at Disney and it's tricky because you, you have to amortize a ride over like 20 years and so you'll go.
- [39:43]
John
It seems like an absolutely brutal business.
- [39:46]
Jacob
Yeah.
- [39:47]
John
That is probably harder today because think about, you know.
- [39:51]
Jordy
Yeah.
- [39:52]
John
At the time that a lot of these parks were built, like you didn't have like infinite online entertainment for every single sub niche.
- [40:02]
Jordy
Yes.
- [40:03]
John
And available.
- [40:04]
Jordy
I mean there's a whole bunch of trend pieces right now about how IRL experiences are seeing higher than ever pricing in the face of. You could just watch the knicks game on TikTok highlights but people still forked over $5,000 to go see the game. And so you know, you have that like barbell strategy where Thrive is buying a stake in the San Francisco Giants.
- [40:28]
John
A baseball team that should face the NBA team.
- [40:32]
Jordy
Yeah.
- [40:33]
John
To Vegas. But at the same time there is maybe an opportunity that came out this morning or maybe yesterday that there's more sports betting volume than all sales of movie tickets, theaters, theme parks and like a couple other of these IRL categories. Wait, it's up or down less, Lower, less. And the stat was like volume. And so it's not exactly like a proxy for like revenue but still meaningful.
- [41:09]
Jordy
Theme park. Vertically integrated Tweety bird tattoos. Tweety Bird tattoo parlor right on site.
- [41:19]
Jack
That's a big thing.
- [41:20]
John
I like it.
- [41:21]
Jordy
Six Flags.
- [41:22]
John
I like it.
- [41:23]
Jordy
Six Flags never really got the same cultural power that Disneyland did. There's something about the flywheel that Walt Disney laid out that does seem very, very important. And so how do you start that? It's not just you know, tech enabled theme park. That's not going to draw people in. You need to have like IP around it.
- [41:42]
John
Brainrot theme park.
- [41:44]
Jordy
There's something about, I mean we've read, we've read stories about like the, the, the Disneyland fan that's, that saves up every year and spends so much money at the park. And I think that's probably the lifeblood of that business. And that doesn't happen without building a whole cinematic universe around every single ride. And that just takes so much time. And you can't like this goes back to the question of, like, Netflix is enduring ip. Like, they don't. They haven't been able to, like, even though it's been 20 years of like, I mean, I don't know when they started producing their own content, but it's been 20 years for that business at least. And they haven't really developed, like, their own franchise that lives in the same world as Batman.
- [42:25]
John
Well, I'd push back and say that. Narcos.
- [42:28]
Jordy
Narcos. You wanna go to the Narcos theme park? I was talking about this with somebody once, talking about, like, hbo, like, why don't they have a theme park? And he's like, what are you gonna do? Take your kids to a brothel in Game of Thrones land? Like, no, it doesn't make any sense. Like, anything. It needs to be uniquely general audience. Like, you can't have R rated. You can't have a content backbone that's R rated. Because theme parks will always attract families and kids. And so anyone you can't have, you can't have any theme park that's built around an R rated, like, IP library. And so that just narrows it down even further.
- [43:07]
John
Well, all of America's basically turned into a theme park for European soccer fans.
- [43:13]
Jordy
Oh, yeah.
- [43:14]
John
In the journal, European soccer fans marvel at the splendor of America's suburbs.
- [43:20]
Jordy
I've seen many of these reels serve.
- [43:21]
John
To me, Dutch fans in Missouri see a nation that is risky and expensive, but vast and bountiful. Everything is three times the size.
- [43:31]
Jordy
Let's go.
- [43:31]
John
You've been seeing some of these people in real life, right?
- [43:34]
Jordy
I don't know if I've seen any of them. I did go out to lunch like a week ago and it seemed crowded, but I was unclear if that was just local residents going out to watch the games or. Or actual tourists coming to town to watch this.
- [43:49]
John
Gabe in the X chat, I think Ferrari has a roller coaster in the Middle East.
- [43:53]
Edward
No way.
- [43:53]
John
They do. They have a whole Ferrari theme park in Abu Dhabi.
- [43:57]
Jordy
Because that's not R rated. You can take family friendly kids to a Ferrari theme park.
- [44:02]
Tyler
Yeah.
- [44:04]
John
I was in Abu Dhabi and I was driving by it and I was like, yeah, I was just thinking of if you wanted to spend.
- [44:14]
Edward
Yeah.
- [44:14]
John
A day, you know, getting the Ferrari experience. Like, you could just go to the track.
- [44:20]
Jordy
Yeah.
- [44:21]
John
Or you could just rent a Ferrari. So I don't know.
- [44:24]
Jordy
But you don't need to go to Six Flags to get the Batman experience. You can just go out in the middle of the night and arrest a criminal just become a vigilante. I saw another report that apparently there's like an individual who's being like the Batman of Mexico. Do you guys see this? This is very funny. And so the guy went out and
- [44:46]
John
found criminals to Velapar says Yass Island. They literally named an island Yas.
- [44:54]
Chris
Weird.
- [44:55]
John
No, I don't know.
- [44:58]
Jordy
Anyway, Dutch soccer fans are having fun visiting America. Frank Everink he hadn't even heard of Kansas City. But when the Dutch soccer fanatic saw his team would be playing along the border of Missouri and Kansas, he made a detour in his worldwide road trip. Everin got in his camper van and drove south from Toronto, making stops in Detroit, Chicago and Indianapolis. Along the way. He and other European fans who flocked to Kansas City for the World cup beheld the fruits of the American economy from a vantage point few foreign tourists typically see. Suburban superstores, hulking plates of food, quiet streets. He marveled at the sprawling houses and a contrast from the tightly packed homes of the Netherlands. I did notice this when we were in France. The food portions were way too small for me. It was brutal. It's spacious, he said. You go here for your shopping and there for your dentist. People are so rich here. I think that's why they can be so nice. What an ultimate white pill in America. In America, everyone's like, we're so divided and everyone hates each other and it's terrible and the economy's about to fall apart. And then one European tourist comes, like,
- [46:06]
John
everyone is so nice.
- [46:08]
Jordy
Something about the grass. The grass is always greener, right? The grass is always greener on whatever side I'm on. That's what I like to say. The throngs of Dutch fans that flooded Kansas City and its suburbs this past week got a taste of day to day life in the the United States, reigniting the long running transatlantic debate. Who lives better, Americans or Europeans? The Europeans had plenty of thoughts on American culture. We are a bit shocked about the food you're eating, the Dutch national team superfan Sandra Tate said. Fans also balked at the size of Costco's and the vastness of the highways. In recent days, social media has been filled with videos of Europeans gawking at the the staples of suburban life. A two car garage, a walk in closet, a second refrigerator. One Brit went viral for trying Chick Fil A for the first time. That was absolutely banging, he said. In another, he toured the inside of an American fire station.
- [47:03]
John
The way that they looked, they experienced a Chick Fil A was me seeing the Renault Twizzy.
- [47:08]
Jordy
Yeah.
- [47:09]
John
I was just like, this is unbelievable. This looks like they made the perfect car.
- [47:13]
Jordy
Yeah. So small. So small. And it's the way they think about our fire trucks, which are massive. This is nuts. Honestly.
- [47:23]
John
They said, Tyler, while we wait for our first guest, do you know anything about Bosnia's World cup team? The United States is facing them on Wednesday. Do you have a stat breakdown or anything?
- [47:36]
Jordy
We be very careful with what you said, because I saw that there was a news reporter who faced fierce backlash for really calling Bosnia out and saying, like, I don't know where it is on a map. And the funny thing was that it was delivered in, like, the typical newscaster, like, and I'm here reporting on the ground. And tonight, Bosnia will be playing. And then she just, like, transitions into color commentary, giving hot takes about how irrelevant Bosnia is in her mind. And the Bosnians did not enjoy her critique of their country.
- [48:06]
John
Pure disrespectful.
- [48:08]
Jordy
Anyway, there's a little golf cart. We got to talk about this at some point. But there's a new car. It's like a Twizzy. You're gonna love it.
- [48:15]
John
It's close.
- [48:16]
Jordy
It's 25K. It's no twizzy.
- [48:17]
Tim
But you.
- [48:18]
John
Let's bring in our first guest anyway.
- [48:19]
Jordy
Let's bring in our first guest from
- [48:20]
John
the National Design Studio.
- [48:22]
Jordy
From the National Design Studio. Welcome to the show, gentlemen.
- [48:24]
Chad
How are you doing?
- [48:27]
Jordy
Thank you so much. What's coming on the show? Please start with an introduction of yourselves, the company, and then the announcement.
- [48:35]
Edward
Today, my name is Edward, and I run engineering at National Design Studio. It's technically not a company. It's a government organization.
- [48:42]
Jordy
Oh, yeah, that's right. Sorry. And I'm Ty Groot.
- [48:45]
Edward
I'm one of the engineers at National Design Studio.
- [48:46]
Jordy
Okay. And today, the launch. Take us through it.
- [48:50]
Edward
We're launching Rampart. It's a local first privacy model that puts people back in control of the data that they share with AI. We were just kind of building a chatbot for fun, and we were upset that none of the frontier models will actually fit in a browser. So you cannot do PII removal in the browser, which is pretty damn important for a use case. You just have to trust that the server is actually removing the information and not lying to you. So we're like, okay, well, what if it was just all on device personal data never had to leave your device. Secure by default.
- [49:28]
Jordy
Okay, so open source. The weights are on Hugging face runs in the browser under 15 megs. A technical user could go right now. Download the model from Hugging Face Vibe, code their own Chrome plugin and have it be running however they want. But how do you see this actually rolling out? Do you want the government to enter to implement this environment, various places? Do you want companies to. Is it sort of like open up the primordial soup of ideas and see where it goes or do you have, do you have like a rollout strategy that you are advocating for?
- [50:04]
Edward
Well, the reason why we open source it is because we do want companies to use it and we want people to use it and we want people to make it better. So we want Vibe coded Chrome plugins.
- [50:12]
Jordy
Sure.
- [50:14]
Edward
We want, you know, Vibe coded ChatGPT extensions. Like what? Whatever value is derived from the product. This is just like a total side quest for us. We just want to build software that's helpful for the American people. We've already launched a series of products then like Trumper x has got 15 million users, saved over $500 million in drug costs and we rethought the UX there. So we're basically across everything we're working on, we're just trying to find the first principles, best approach for users. Yeah, and this just came as a derivative of that. We're not ML, you know, researchers or engineers, we're just like, you know, we should just do this.
- [50:52]
John
But you created pii super intelligence. That's what people are saying on.
- [50:58]
Edward
Basically it's like tiny intelligence. It's like it's by far the smallest model. Like the other ones are like at least 50 megabytes. This is 15.
- [51:05]
Jordy
Yeah. So did you like, did you, to what degree did you build on the shoulders of giants? Is this pruned and distilled and fine tuned open source model? Is this something where it was easier to just start from scratch but use architectures that are more prevalent and well established? How did you actually go about training this model?
- [51:27]
Edward
We tried 72 different base models and put them through a training set. We ended up on Mini lm. So we definitely are standing on the shoulders of giants here. Yeah, yeah.
- [51:38]
Jordy
We started taking a Look at the OpenAI privacy filter that just got released recently. We were trying to figure out, is there a way we can just quantize it? Can we maybe remove some of the parameters? What can we do here to try to make use of the state of the art model? And we tried a lot of things we just could not get it to fit into. We want this to work on legacy devices, on an old Android phone for example, or an older iOS device. And it, it just would not get small enough and still make any intelligent sense to try to actually run it. So, yeah, we ended up essentially, it's technically a fine tune, but we trained manylm and basically made it do exactly what we wanted to do. Can you help me understand use cases a little bit more? Because I feel like most of the time when I'm transmitting a document to a prescription website, RX or a financial institution, the PII is like the potentially the only important part. They're often sending me a blank form and asking me to put my PII in there. What is the inverse scenario where I want to redact my information, but I still need to transfer something? Because in most cases, that would just be the template or something. In my estimation.
- [52:52]
Edward
Yeah, the flags are set up at compile time. So you can decide, like, for our use case, it's really important that we have this data or that we don't have this data. And so we hand all the customization back to whoever wants to use the library. The model just says, oh, this is a phone number, this is a name, this is a surname, et cetera, et cetera. And then ultimately, it's whatever you want to do with the model, you can just do it. Fundamentally, what we were looking at was there are a lot of cases where people will ask a question pertaining to a document of, okay, for example, with the template, how do I fill out said template? Because the government is pretty bad with forms. There's, like, way too many forms. Nobody knows all they mean. Like, you got to pay people to do your government forms. So, like, that was the use case we had in mind. PII is like, not. Not super helpful for that. And it's also kind of like the breaking point. It's where, you know, the product will lose trust. So we're like, okay, two burns, one stone. What's public?
- [53:50]
Chad
That makes sense.
- [53:51]
John
How do you guys. How do you guys think about side quests at the National Design Studio in general? Like, I imagine every single day there's opportunities that come up and you guys are in a unique situation where, yeah,
- [54:03]
Jordy
it's sort of all design.
- [54:04]
John
You have a mandate, but at the same time, there's so many different places you gotta go hunt the government, you know, you know, interacts with people's lives. I'm very curious.
- [54:16]
Edward
It's pretty hard to pick what to work on because there's a lot of exciting things. Everything is huge scale. Everything could be way better. Maybe not everything, but a lot of things. So there's a huge calling for side quests. But we just tried to keep everything in line with our vision, which is we want to make the American digital experience better. And then we've kind of chosen a track to get there. And on the way we built this model and on the way we built Trumper X. But we're excited to see how it develops here.
- [54:47]
Chris
And you'll be back on the show
- [54:51]
Jordy
diving more into that. Do you have a reference point in tech? People might ship, they might think in quarters, financial quarters, three month cycles. They also might think about a two pizza team, which I think is like 10 people. Do you have an idea of where the sweet spot is from what you've experimented on? How many people do you want to bring into a project and then how long do you want to spend there so you don't get stuck for a decade because you might not have a decade.
- [55:18]
Edward
Yeah, I mean there's definitely a lot of places to get stuck because the visibility is super low on a lot of these projects. You don't know how broken they are until you like, you're really in it.
- [55:27]
Chris
Sure.
- [55:30]
Edward
Being able to determine that in advance is like it's definitely AGI level.
- [55:34]
Jordy
Yeah, we've got a really great team. We're very fluid. We're constantly trading responsibilities back and forth. Someone might be better at doing one part of the tech stack than somebody else, but they're on a different project.
- [55:47]
Edward
We'll just borrow them for a day
- [55:48]
Neil
or even for an hour.
- [55:51]
Jordy
We share a lot of responsibility at the studio.
- [55:54]
Edward
This is also definitely the only place in the government where people work seven days a week consumed on Red Bulls. I think the ideal amount of people per project if they work super hard is two really. One design person, one engineer and they both have like, you know, full scope and then they're able to call on people as necessary.
- [56:15]
Jacob
Yeah, yeah.
- [56:15]
Neil
The two with the caveat of you're
- [56:17]
Jordy
calling in your coworkers, say hey, can you take a look at this over my shoulder quite frequently. Yeah, that makes sense.
- [56:25]
John
What's your guys pitch to talent that you might want to recruit into the National Design Studio? I imagine lots of people that would join could get a blank check from a venture fund or could go work at some of the best companies.
- [56:41]
Edward
Everyone that has joints, you know, that's the case for them.
- [56:43]
Jordy
Turn down that off.
- [56:46]
Edward
It's definitely more for people who are super mission oriented. You know, who the hell, like what great engineer wants to come work in the government? You know, the answer is typically nobody. Unless it's, you know, like the IC where there's really interesting problems to solve. So I think that we have like the, a super golden opportunity. At least the way I evaluate problems, I try to see how big the problem is in terms of like how many people will use it. The delta between what exists versus what our team can do and how fast we can do it. When you look across those three matrices, it's like a home run place to work. So I think that is its own natural kind of calling card for the right kind of talent for the studio.
- [57:28]
John
Awesome.
- [57:29]
Jordy
Good luck.
- [57:30]
Edward
Complex too.
- [57:31]
Jordy
It's also a huge benefit.
- [57:33]
Chris
It's pretty sick.
- [57:33]
Jordy
Awesome.
- [57:34]
John
Is that where you guys are right now?
- [57:37]
Edward
We're not there right now, but we're about to be there, yeah.
- [57:40]
John
Awesome.
- [57:41]
Jordy
Thank you so much.
- [57:42]
John
Congratulations on the launch.
- [57:44]
Jordy
Very fun project and we'll talk to you soon.
- [57:45]
John
Great to meet you guys.
- [57:46]
Jordy
Have a good rest of the day. Goodbye very much.
- [57:49]
John
Cheers.
- [57:49]
Jordy
Let me tell you about CrowdStrike. Your business is. Their business is securing it. CrowdStrike secures AI and stops breaches. So Apple and Audi alumni just unveiled a $25,000 open air electric neighborhood vehicle. It's called the Amble One and it's a street legal EV built for short local trips. No doors, fewer screens. Modular design inspired by the 1960s lunar rover. Goes 40 miles an hour with 60 miles of range. Weighs under a thousand pounds. Takes five hours to charge. Rear seats fold flat for cargo surfboards or gear built in mounts let you add baskets, straps, mirrors and cargo accessories. Already has 500 vehicles committed.
- [58:37]
John
I love it.
- [58:38]
Jordy
You love it?
- [58:38]
John
I love it. I think it's great.
- [58:40]
Jordy
I've given a Jordy score. A Jordy score daily weekend, you know, the Doug score. Out of 100.
- [58:47]
Chris
What are you doing?
- [58:48]
John
So, I mean, I just went through this whole crazy search for basically this exact vehicle. Didn't find it. I don't like the aesthetics of golf carts. I've driven a lot of golf carts in a commercial capacity at a job in college, I've owned a golf cart. In my experience, it's impossible to feel cool while driving a golf cart. So I wanted something like a golf cart that was more like not, you know, I'm not golfing so I wanted some like, little bit of utility, wanted to be fun, et cetera. I landed on a Can Am HD 11, you know, a UTV. It's gas powered, it's quite fun, but the gas element is actually kind of annoying. Even as an ice defender. That is the internal combustion engine. But I think this is. No, I think this is fantastic and I think I saw somewhere that they're going to focus on more commercial opportunities. So going to hotels all over the world.
- [60:05]
Jordy
That's what Justin says here. This little golf cart is going to be huge for hospitality. All electric, $25,000. How does that comp against if you're a business? And is it really going to move the needle on the customer experience to have this versus just a golf cart? Can you get a fleet of golf carts for a discount price? I mean what is a typical.
- [60:25]
John
Like a golf cart is going to come in at like 313 half price ish grand. So I mean, and it depends, there's commercial golf carts, maybe you get bulk deals, something like that. But no, I think this is going to be great. I think it's going to be in a nice amenity. I like the bucket on hotel properties around the world. Ryan Dehiny says he thinks it'll be a hit in hospitality since Moak's Moak cap sales at 500 units a year. I did not know that. That's interesting. But I think this is going to be a hit. Meyers Manx I still much prefer the sort of aesthetics of the Myers Manx, you know, the sort of more like Dune buggy style. They're coming out with an EV that I'm very excited about, but I think this is great. I'm excited to have more people building cars for recreation. And I talked to Riley Brennan who is GP over at Trucks vc. They just invest in like automotive startups and so we're working to get the Amble team on the show asap, hopefully this week.
- [61:34]
Jordy
Very fun. There's a good quote from Roger Ebert, the famous movie reviewer that we got to share all the team loves. Robert Roger Ebert from Cisco and Ebert back in the day Anime outsider says I don't care what he thinks about video games. Roger Ebert had the ultimate red pill on nerd culture as a whole. This basically describes every fandom on earth, and once you see it, you can never unsee it, he says. A lot of fans are basically fans of fandom itself. It's all about them. They have mastered the Star wars or Star Trek universes or whatever, but their objects of veneration are useful mainly as a backdrop to their own devotion. Anyone who would camp out in a tent on the sidewalk for weeks in order to be first in line for a movie is more into camping on sidewalks than movies. Extreme fandom may serve as a security blanket for the socially inept who use its extreme structure as a substitute for social skills. If you are a Luke Skywalker and she is a Princess Leia. You already know what to say to each other, which is so much safer than having to ad lib it. Your fandom obsession is your beard. If you know absolutely all the trivia about your cubbyhole of pop culture, it saves you from having to know anything about anything else. That's why it's excruciatingly boring to talk to such people. They're always asking you questions they know the answer to. What a funny.
- [62:58]
John
It's like you and your Apple Vision Pro fandom. We're always just having a normal conversation and John will say, say, yeah, this would be better if we were in the dyno experience.
- [63:11]
Jordy
True. The. The I'm not that much of a dyno experience anyway. Let's bring in Chad R. From Rigetti Computing and Segal. Chad, how are you doing?
- [63:22]
John
What's going on?
- [63:24]
Chad
I'm doing great. How are you guys doing?
- [63:25]
Jordy
We're doing fantastic. Thank you so much for taking the time to come chat with us. I would love to start a little bit with, with your background and your journey. Of course. We're going to talk about the company today, but if you could give us a little bit of an overview of your journey in Silicon Valley, I think that might be informative. There's a lot to talk about there and of course it relates to what you're doing today.
- [63:45]
Chad
You bet. Yeah. Great to be here, guys. I got interested in quantum computing when I was a senior in college and did a PhD in this field and spent about three years at IBM Research in the early days, you know, helping build up the quantum computing team there and then started my own company. That was Rigetti Computing. In 2014, I was introduced to Sam Altman. And you know, he said, we had coffee and he said, hey, well, have you. You should do yc. And I said, well, what's yc? And so he explained to me what Y Combinator was. And that was the first batch after Sam had taken over YC in 2014 and he brought in a bunch of hard tech companies into Y Combinator for the first time. And so I got to be part of this incredible group of companies, including Helion, oclo, which is now public Ginkgo Bioworks.
- [64:38]
Jordy
Ginkgo Bioworks, yeah.
- [64:39]
Chad
Boom. Was a couple batches after me, but there was this cohort summer 20. But yeah, so anyways, it was a fantastic experience. Ended up running Rigetti for about 10 years. We took it public and in early 2022, through a SPAC transaction or the third quantum company, I think to go public. And so that was an incredible journey. And you know, so I've been in quantum computing, I usually say my entire adult life and in Silicon Valley for a big part of that, but it's just a really fascinating mix and there's incredible people working in this area, there's incredible technologies being developed and it's going to, it's going to change, change the relationship between artificial intelligence and computing infrastructure. And that's. We're working on a singletree.
- [65:20]
Jordy
Yeah. The journey of going public, all the market gyrations is being a public company less predictable than venture and being private because there's still the whims of the private market. Whether you're in the hot category that year, venture investors are scrambling to get, you know, their position built up in a particular category. But the public market seems, seem like even harder to read on because you have retail investors and the stocks up and down and things can reprice on a minute to minute basis. What was it like psychologically transitioning from private company to public company?
- [65:59]
Chad
I think either can work. And there's a right answer for different companies. And you got to ask yourself the question what you're trying to achieve, is it liquidity for your early investors? Is it primarily a capital raising activity?
- [66:11]
John
Sure.
- [66:12]
Chad
Is it to provide, you know, have, have liquidity for your early employees? For example, some companies where you've got a 10 year exercise window for your options and you know, zooming out in the rigetti kind of taking public journey. That was a point in Silicon Valley when quantum computing was growing in commercial maturation and the technology was maturing. But a lot of the capital in the markets at that point had migrated for deep tech companies particularly just wasn't available in the private market. So when you, you look at 2020 to 2022, most of that capital was actually sitting, a lot of it was sitting in SPAC trusts on the public markets. And they were in those SPACs were hungry to cut a deal. And so a lot of companies ended up going public during this wave simply because the founders, the executive teams were making the decision that that gave them the best chance of capitalizing the business going forward. And I think there's a right answer for different things. And now in the past month or so Quantinuum has gone public via ipo. A tremendous company that's been made great progress. The public markets for quantum computing have reached a point of maturity. There's analysts that deeply understand the technology that are writing about and covering different companies. It's A very, very interesting marketplace. And then in terms of what it's like in the decisions that different companies have to make, I think the key thing is to take a long term perspective on what you're trying to accomplish. And what kind of business are you trying to build, what kind of cap table do you want to build? And what strategy best suits, you know, is best going to help you, help you achieve that.
- [67:41]
Jordy
Yeah.
- [67:42]
John
What kind of feedback did you get in the early days around naming the company after yourself? I've been surprised that more there's so many generic names in the startup world now. That's like the Blank Company of San Francisco or things like that. Or you know, all the Neolabs have like the same sounding names. It'll be like advanced superintelligence. And then there was a big boom
- [68:04]
Jordy
in like lys, like friendly bit ly, musical ly. There were tons of companies that were ly for a while.
- [68:10]
John
And I only know one other. I can only think of one other company. Chris Amadon's company has Amazon Heavy Industries. It's rare, but I'm sure people thought you were a little crazy back then.
- [68:23]
Chad
Well, Quantum was a different thing back then. Look, I think there's two quantum companies that don't have a Q in their name. And I started both of them. One is Rigetti and the other Siglitry, which is what, you know, what I'm focused on. But I will tell you, when you think about advice for founders, when you think about naming something and advice is worth what you pay for it, but think of a name that can become iconic and that means it's got to sound very fresh and new and different. And if every other quantum company has a Q in it, maybe you try avoiding that. That's what led me to Sigildry. Sigildry. I love this name. It's from a Patrick Rothfuss novel and he was an American writer. He wrote this incredible novel called Name of the Wind that came out in mid 2000, 2010 or so. Anyway, so Sigildry is we're building quantum accelerated quantum accelerated AI servers for the data center to bring quantum technologies directly into the data center to act as a co processor for the GPU or XPU pods that have become the unit of compute in AI infrastructure today. And we're based in Ann Arbor in San Francisco. Our hardware developments here in Ann Arbor, Michigan, where it is hot and humid today. Our AI research team is right there in downtown San Francisco.
- [69:48]
Jordy
So what actually needs to happen? What is the path to. You know, I would Imagine like cheaper tokens. Like, is that the pitch? Like one day the tokens will be cheaper and we need to do X, Y and Z to get there. What's X, Y and Z?
- [70:05]
Chad
You need to. Well, first of all, quantum hardware is going to address a lot of different computational challenges today, right? So quantum computers will solve problems that are impossible to very challenging to solve with any form of classical computing, no matter what scale it reaches. So at signaldry, we're focused on applying that capability specifically to some of the computational challenges in AI to reduce the power and reduce the cost associated with training and deploying these models at a very large scale. What needs to happen to get there? Well, you have to build a quantum computer that meets the specific requirements for AI workloads. And the strategy that we're taking at Signaldry is we, we are very focused on deeply understanding what those challenges are, what needs to happen inside the data center to bring these algorithms that can have a different kind of scaling complexity class than classical algorithms for AI training and inference, and then understanding what kind of quantum hardware is needed to run those. And what we found is there's a set of requirements that you need to meet that probably are never going to be met by single modality hardware. What do I mean by that? In quantum computing and quantum hardware, there's different kinds of qubit technologies that you can use to instantiate the qubits. So there's super qubits. That's what I did my PhD in and what my first company was based on. That's what IBM is focused on and largely Google has been focused on. But there's also trapped ions, quantinium and IonQ are doing trapped ions and a long list of other companies. There's photonics, there's now neutral atoms, there's spin qubits and semiconductors. There's all these different hardware substrates, rates that people are using to pursue and to build quantum computers based on those. And what we're doing at signaldry is stepping up a layer and saying from a computer architecture perspective, you know, modern computers aren't built out of one physical kind of bit. There's not just one transistor type that makes up these computers that we're using today or the computers that are used to train large scale models and deploy them. There's a plethora of different physical technologies that are used to build these computers, computer systems. And so at signaldry, we're looking across all the different quantum modalities and hardware types and architecting computer systems to meet the requirements of AI based on the maturing path that all these different hardware modalities are on. And that allows us to build systems that are specifically tailored to AI and that we believe are going to be able to meet the requirements of bringing quantum into the AI data center at scale.
- [72:22]
Jordy
How important is simulation at this point? Are you at a place where you can run this, like basically run the code of the future in simulation to understand, like run it on a classical computer, not see the performance gains, but at least understand that when the computer, when the quantum system is available, there will be a cost savings?
- [72:49]
Chad
Yeah, we've been able to do that, largely speaking. And you can do simulations of something, computer system or a jet or anything, and varying levels of physical fidelity and detail. The simulation we've been able to do so far indicate that we expect a level of, you know, several orders of magnitude potential speed up for key training tasks.
- [73:09]
Jack
Right.
- [73:10]
Chad
So this is not a factor of two or a factor of five increase that we're targeting with quantum acceleration inside the data center. It's several orders of magnitude when all the pieces come together. But that simulation you talked about is a really, really important and powerful part of designing a computer system. You can't simulate all the logic of a quantum computer because that would require a quantum computer itself, kind of by definition. But you can do load profiling, you can do traces, you can understand how that's going to be distributed across classical and quantum hardware and also simulate all the networking transactions in between. And so that's the kind of simulation driven design approach we're taking.
- [73:51]
Jordy
Yeah, I guess. What specifically in training benefits from quantum computing? Because the example that everyone goes to in terms of quantum computing, novel algorithms that actually have potential to do something that a classical computer can't do. It's like Shor's algorithm cryptography usually. But when people think about training AI, they usually just think a bunch of matrix multiplication. Is there some different path that you plan on taking? Or do you think you can operate at sort of a hardware agnostic layer, much like we're seeing leading AI firms get off of cuda. Is there a world where you get off of classical. But by and large, it's the same training paradigm.
- [74:47]
Chad
It's really interesting. I think the answer is both. Our starting point is we're looking at ways that you can insert quantum algorithms and quantum computing capability into the existing paradigm, the existing workflow for training and deployment, very large models, frontier models at scale. And that means that you're looking for an insertion point from quantum algorithm where the data in the data out allow you to then take a step that would take maybe a day or two classically and compress that down to hours or minutes and do that throughout the workflow. The challenge is that quantum computing provides the possibility for exponential speed up with the right algorithm. But it also has this issue with data in and data out. So it's classical data in which can't be exponential in size and classical data out. And so the less you do that translation between the quantum part and the classical part, it's going to end up working better. So asymptotically where we're heading is more quantum native models, models that are designed in the first place to leverage a quant computing capability tightly integrated with your classical infrastructure. But, but what you're probably not going to see is fully quantum based models that don't include a substantial amount of classical compute as well. So this isn't going to replace all the AMD or Nvidia infrastructure in the data center. It's going to augment it. And our business model and our focus and our product strategy is to build a quantum accelerated AI server that sits next to the POD and, and acts as an accelerator for the XPU or the GPU POD in the data center and drive towards very high attach rate of ideally one to one in the data center infrastructure of the future. And that's what's going to allow you to then run, accelerate the current paradigm, but also use it as a substrate to design new kinds of models that will fundamentally be better and more efficient. More efficient from a time perspective, from a cost perspective, from an energy perspective. But also these models are just in a way, just a representation of the computer hardware that they're based on. What's easy and hard from a computing and communication perspective on the hardware translates into the model capability. With quantum you have a fundamentally new resource in the data center that's going to allow new model capabilities to be developed and brought to market.
- [77:06]
John
How are you thinking about timelines with the new company? Do you think there's I imagine with the business right now is like entirely more of like technical risk than execution risk. Is that the right way to think about it? Like there's a lot of hardcore research that needs to be done, understanding the feasibility of the approach and what kind of conversations are you having with potential partners if at all right now versus about kind of like the near term application or conversations, like 2000-30s and beyond kind of thing.
- [77:55]
Chad
We're talking to customers now. We've got several active conversations, I think partnerships and early Engagement with customers is a big part of our strategy. The reason that's important is because the challenges of really bringing a new compute capability into the AI data center are substantial. And you got to be working with customers out of the gate to really understand those requirements, what moves the needle for them as an organization. And so that's what we're doing and that's what we're focused on in terms of timing. It's a fantastic time to start a company like this. The underlying hardware has made such tremendous progress in the past 10, 15, 15 years. And the market is, you know, with the amount of investment that's being made in AI infrastructure, there is clearly a recognition that we need a new approach to drive down the cost per token, to drive down the energy associated with these very large scale data center projects to make it fundamentally more efficient. And Quantum promises a, you know, a more efficient way of translating Watts into intelligence. That's what this enables and unlocks in the long term. And to me, this is in many ways a better idea than putting stuff in space, because ultimately, yes, space gives you cheaper access to energy and it gives you a better way to dissipate that heat, but you got to put it into space, and that takes a lot of fossil fuels. That takes a ton of energy in the first place. And it doesn't actually change the computational complexity of the computer hardware that you're running. Why don't the the power challenge. Quantum can unlock much more than that.
- [79:31]
John
Yeah, it's a good point. Why don't you think Elon has made a real run at Quantum?
- [79:38]
Chad
I think the answer is that Quantum is at this interface of deep science and engineering. And a lot of what needs to happen over the next three to five years to bring this technology to market at scale is engineering risk. But it is quantum engineering risk. And it's not vanilla. Not that it's easy. Not that any of the purely classical stuff is easy.
- [79:58]
John
It's not vanilla rocket science.
- [80:00]
Chad
It's not vanilla rocket science and it's not vanilla fab at scale. Right. And so if you look at the leaders in quantum computing hardware, it's not necessarily the Intels of the world, incredible company that has propelled humanity forward for half a century, but they're not the leaders in Quantum because Quantum is a new form of engineering. And I wouldn't characterize it as science risk. I think for Quantum, a lot of that is behind us, even though there's tremendous work to be done. But there is a lot of quantum engineering risk. And that's an area Where I think you need to see companies that are Quantum specific bring the technology forward. And at that point, I think that all the big AI labs are going to need to lean in with Quantum.
- [80:40]
Jordy
Yeah.
- [80:41]
John
When do you think there will be a flip around sentiment from. From around Quantum? It feels right now like, at least in our corner of the Internet, there's so much FUD around Quantum, and obviously
- [80:55]
Jordy
it's based on financials.
- [80:56]
Edward
Yeah.
- [80:58]
John
That's what I want to know, though. Is there a rewind 10 years if somebody said AI? There was a very, very small percentage of people that were incredibly excited about it and deeply involved and could see the trend line and could see that we would get to this point. I mean, Sam was talking about people becoming best friends with a chatbot. I think in 2015 or something like
- [81:24]
Jordy
2014 was like losing money. It wasn't like making revenue yet.
- [81:27]
John
Yeah, that was even before that.
- [81:29]
Jordy
Yeah, no, I know.
- [81:30]
John
Well, before that. But then eventually it flipped and it's really hard to. There's a lot of people that are AI bears and they talk about overinvestment, but they can't deny the value of the products. They're fundamentally pretty useful. You could argue that they're.
- [81:50]
Jordy
Well, some bears can, but yes,
- [81:54]
John
some bears would still figure out a way to argue that they're not useful. But I imagine with both of your companies, you're predicting that within the next five year there's a flow. But what do you think is the first driver of that? Where maybe the average person in Silicon Valley actually starts to say, hey, I wasn't taking Quantum seriously enough.
- [82:21]
Chad
There's a few things that need to happen. I think the FUD is real because the companies that are succeeding and doing well in this space, you can't tell by looking at their financials. You can't put on your growth investor hat and say, yeah, this is going to be a tremendous company. And look at the metrics. It doesn't work like that. You got to be able to analyze and look at these companies and value them based on their ability to buy down technical risk over time and the progress that they've made towards that. So it just creates a lot of uncertainty because it's a challenging task and it's subject to a lot of discussion and debate. But nonetheless, I think there are clear. There is clearly tremendous momentum and progress in the space now. What's going to change it? I don't know. My bet is when we have quantum computers in the data center running production workloads and that you don't have to say, hey, that's a quantum computer. For someone to care, you care because it's a more efficient way of generating the answers you need or training the model or deploying the model for inference. And that's when quantum is really going to become a mainstream category, is when you don't have to talk about the fact that it's quantum anymore. And I think in a large part this is what we're trying to achieve with Signal Tree.
- [83:35]
Chris
Right.
- [83:35]
Chad
The goal is that to take quantum computing and to obfuscate it underneath the hood of a classical computing system or underneath all the rest of the infrastructure that's already there and to not ask the end user to be programming it and writing code code for it. That's all going to be done with AI anyway. And so that is just a better, it's a better way to train your model and you need this thing or else it's going to take you too long and your customers aren't going to be happy with the quality of the outputs they're getting. That to me is a big inflection point. And I think that can happen in the next five to seven years. I think that can. But there's this whole march that needs to happen to take the technology from one proof point to then all the cost engineering that needs to happen, the reliability engineering, and that's going to be the really fun journey for quantum computing over the next decade is to get to that point where we're selling hundreds or thousands of units a year and, but that's the journey we're on. And that's the march that quantum technology has been on for good one, two decades now.
- [84:32]
John
And then this is probably very obvious to somebody that is focused on quantum, but, but not, not to me, just because I don't, I don't follow it closely. But like why, why a new company feels like quantum, like as you've explained, it feels very obvious to apply it to data center build out. And you said it could be like a meaningful inflection point for the technology overall. Why, why, why was a new company necessary and you know, why did you take this approach?
- [85:03]
Chad
Well, high level, I think all the different quantum hardware modalities have made tremendous progress and the right way to build quantum computers for AI is more multimodality. That is a fundamentally new approach and it ultimately is going to, in my opinion, be very obvious. In retrospect, it's going to work better. But it is a, it's such a fresh idea, it's got to be baked into your strategy, the DNA of your company, and then all the different quantum hardware companies that were out there before. Sigeldry basically started with a thesis which was we've got the best qubit, and so we're going to scale this qubit type up and see how far we can get by scaling it up. And that's why you have so much doctrine and like kind of organizational belief around a particular qubit choice. But in reality, you know, customers are buying a computer, they're not buying a, you know, the physical device or your, your qubit technology. And so at Singledry, what we're doing is working backwards from the market application, from the AI workload as the, as the use case, and using that to drive the specification of a system that can then be built from folding in whatever technologies are needed to meet those requirements. It's just such a totally different approach to quantum hardware. It's got to be a new company, and that's singletree Technologies. That's the approach that we're taking. I think that that is ultimately what's going to unlock this new, this market application of AI. The other reason is you said it's obvious, but it's actually not obvious at all to most people in Quantum that Quantum is going to be useful for AI. And in fact, it's not even a consensus view right now. And the reason for that is because quantum algorithms themselves are still in this very, this phase of discovery and development. And obviously AI is going to help with that eventually as well to an extent. But Quantum, you know, when you interview a set of leaders from across the quantum hardware industry, the median answer you're going to get for what the applications of Quantum is going to be is you're going to use it for quantum chemistry, you're going to use it for optimization problems, things like that. And applications to frontier AI is a new area that is just being developed now because it requires a development and extension of what current algorithms can do and then new algorithms altogether specifically for that. That's what we're tackling at SIGLJ is that kind of quantum AI native research lab.
- [87:15]
Chris
Right.
- [87:16]
Chad
Or a frontier AI lab. That's Quantum native. And then we're doing that alongside developers developing our own quantum hardware.
- [87:24]
Jordy
Thank you.
- [87:25]
John
Before, before we jump, I didn't get we. You, you mentioned kind of the, the history behind the name, but what is the significance of Sigildry in the novel that you mentioned?
- [87:35]
Chad
Well, you guys got to read the novel novel for one. It's absolutely incredible. And, but the other thing is Signal Tree is basically A discipline in the book that is learned at university. And you know, and it basically amounts to you. You inscribe runes on a particular object and by doing that you can imbue that object with properties that it wouldn't otherwise have, or you can govern like heat and light, flow and things like that. It's also a discipline where it's got a quantitative angle to it and if you do it wrong, you can blow things up. So it's got this mix of kind of coding and hardware, but then a mysterious angle of controlling things from a distance by how you do these inscriptions. So it's a really amazing concept, a
- [88:14]
John
little bit of magic.
- [88:14]
Jordy
Amazing. Thank you so much for taking the time.
- [88:16]
John
Thanks for breaking down.
- [88:18]
Jordy
Have a great rest of your day.
- [88:19]
John
Cheers.
- [88:19]
Jordy
Let me tell you about console. Console builds AI agents that automate 70% of it. HR and finance support, giving employees instant resolution for access requests and password resets. Our next name already.
- [88:30]
John
Very cool name. I wish. You know what I'm thinking, John? I wish that after Rigetti Computing, I wish that Chad launched. Chad. Oh, yeah, it was right there.
- [88:41]
Jordy
It was right there.
- [88:41]
John
It was right there.
- [88:42]
Jordy
Anyway, we have the co, founder and CEO of General Intuition with us. Welcome to the show. Tim, how are you doing?
- [88:49]
John
What's happening?
- [88:50]
Jordy
Hey, guys, thanks so much for coming back on the show.
- [88:53]
John
Good to see you.
- [88:54]
Jordy
Yeah, please.
- [88:55]
John
We've been talking about names for Labs. What about consider General Intuition Strong name. But since. Since you launched the company, a lot of other Neolabs have kind of come out with like similar names like General. There's probably like a General Super Intelligence or like a general asi. How about you rebrand to Unfettered Intelligence?
- [89:21]
Jordy
That might be it.
- [89:21]
Tim
Or how about we just fund them all?
- [89:24]
John
Yeah, yeah, that too, yeah.
- [89:27]
Jordy
What is the plan to win? Do you see yourself as a Neolab and do you see. Is it as much of a knockout drag out fight as it appears from the outside? Or is your model more of 1000 flowers bloom?
- [89:42]
Tim
The plan is to just keep renaming. Look, you have to have a claim to why you can win. I think otherwise, none of this makes any sense. It's an incredibly competitive fight. There's lots of great contenders. The only reason why we have a shot is because we have a data set that nobody else has, which allows us to be as focused on workloads that include space and time as Anthropic was on their code environments on the way to the frontier. And so you need to have a very focused, dedicated path. Some of that can be, for instance, having the best researchers or having the new ideas. But I think it also has to be supplemented with a product focus of a customer problem that is going to get solved. Because these types of model classes exist, network effects, just like we saw in the consumer eras of the Facebooks and the Twitters and the Reddit. These things are true, they apply to LLMs as well. The fight for that space is going to be incredibly tough. And so you have to introduce something, something new. I don't believe in the just entry LM space, which is why we are, we're focused on, on actions in space and time.
- [91:01]
John
What's the okay, actions in space and time. Let's talk about the data set. Catch everyone up to speed on. I mean, you know, you broke it down for us the last time you're on, but it feels like it's been almost a year at this point. So what have you been working on? Talk about the data set, how you're, how you're building the data set, all that stuff.
- [91:18]
Chris
Yeah.
- [91:19]
Tim
Look at this way. As humans, the decision to talk or type is just a very, very small subset of the actions that we can actually take. Right. We can choose to move our body. And so in order to create a sufficiently general intelligence to play 10,000 plus video games, the model has to be able to predict across the entire action space of human cognition when they're interacting with these environments, which is 2D environments, 3D environments, interfaces, long horizons tasks, short horizon tasks. And so in order to do that, it has to be a sufficiently general intelligence in order to learn how to correctly predict actions. And therefore the type of model you get out is not going to taste like an lm. It's going to be like comparing coffee to water. This model is going to be incredibly good at navigating unforeseen environments. It's going to be incredibly good at zero shotting any task where it can already be controlled using a game controller. Because we have roughly a trillion action tokens in that space. For example, for context, Frontier LLMs are trained on maybe between 5 and 10 trillion text tokens. We have a scale of data that is going to allow us to jump to the frontier in one capability, which is any system that can be controlled using game controller, which is most robots. That's really what we're doing. We're using that simplification to turn it into mostly an environment transfer for a problem. And then you can use that to create a sufficiently general intelligence where you may be at some point add text to the output space. Right. It's not going to be text, as you're used to from LLMs, but it might just be enough to communicate why you're doing a specific thing. So that's how to view the models.
- [92:59]
Jordy
So, yeah, walk through the partnership with metal. Are you getting game controller feedback as well when those. Yeah, explain. Explain the metal for those.
- [93:09]
Tim
So alongside the frames in the video, we're also getting the exact action inputs, to be clear, not the letters or numbers. Right. We had thousands of humans convert those into the actions you're taking. So walk forward, walk left, open door, closed door. And so when you have that at that ground truth level, you don't need to train models that try to extract that information from the videos, which you are now in a completely different scaling regime, as if you are trying to do this on inferred data. So, for example, if you're landing a plane and you're moving the rudder, that's not going to be visible in the pixels. It's impossible for that to be visible in the pixels. Right. But it's in the action sequence. And so there's just no lab that can take this approach. There's lots of benchmarks that might show that you can do this on inferred data. The problem with inferred data and these benchmarks is that they show up in a really nice way on general tasks. But customers care about how these models perform. When you're in an edge case and you need specific actions to go in specific ways, you cannot do this on inferred data. Despite many people claiming you can tell
- [94:22]
Jordy
us about up the latest round. I want to hit the gong. What happened? How much did you raise?
- [94:26]
Tim
What happened? We raised $320 million.
- [94:31]
Jordy
Congratulations and thank you so much for taking the time to come chat with us.
- [94:35]
John
One more final question. What is the talk about progress from your customers, companies that you're talking to in robotics? Where is maybe an area that, that you're particularly excited about that you don't see being talked about yet?
- [94:52]
Tyler
Yeah.
- [94:52]
Tim
The most obvious thing this replaces is all the code that people are currently writing for behavior in physics engines.
- [94:58]
Jack
All that just becomes a prompt.
- [95:01]
Tim
And so think of the models as based on an input stream of just frames, being able to control whichever system is sending those frames in the action space of a game controller or keyboard and mouse. So basically you can play the world as if it was a video game. If that can be said about your use case, the models will generally do incredibly well. The reason why this works is because every robot already ships with these, which means that they can simply predict at the level of these controllers. And therefore the robot has already accounted for sort of human monkey brain to motor torque prediction interface and merging that with the actual things coming from the controller.
- [95:39]
Jacob
Right.
- [95:39]
Tim
So we're using the fact that you those interfaces exist as a level of predicting in a general action space that works across many types of robots in many ways. You could argue that if this is correct at scale, the supply chain will converge on gaming inputs instead of humanoid robots. And I think that is one of the big things that I foresee happening in the next two years because intelligence is the bottleneck.
- [96:03]
Jordy
Yeah. Well, thank you so much for taking the time to come chat with us.
- [96:07]
John
Very cool.
- [96:08]
Chad
Thank you.
- [96:08]
Jordy
Congratulations.
- [96:08]
John
Great update man.
- [96:09]
Jordy
And we'll talk to you soon.
- [96:10]
John
Talk to you.
- [96:11]
Jordy
Have a good one. Let me tell you about Cisco. Critical infrastructure for the AI era unlock seamless real time experiences and new value with Cisco. Fascinating. It's also funny seeing all those simulators on Steam and the fact that will the training data generalize? Are they just going to learn how to play Fortnite? And it's like well there is a farming simulator and there's a data center simulator. Data center simulator.
- [96:35]
John
Capybara Central banking simulator.
- [96:36]
Jordy
Central banking simulator. It's going to learn everything. Well, we have our next guest in the waiting room. Yadin Sofer from Tresar Co founder and CEO. Welcome to the show.
- [96:46]
Tim
How are you doing?
- [96:48]
Yadin
Hey guys, nice to meet you. I'm great.
- [96:50]
Tyler
How are you?
- [96:50]
Jordy
Thank you so much.
- [96:51]
John
What's happening?
- [96:52]
Jordy
Introduce yourself, tell us what you're building. Tell us about the emergence from stealth that's happening today.
- [96:59]
Yadin
Yeah, well, Yadin Sofer, last week we announced the launch of Tracer, which is I would say the first of its kind. Subterra Defense tech company And Subterra is a word we actually coined, but I've been happy to see people reference it on X already. It refers to everything in the subterranean defense domain. So that's everything in the intersection between military applications for things that happen beneath our feet.
- [97:23]
John
What is the history of subterranean startups? You have the boring company. Palmer has talked about the domain. I don't think he coined it so you get all the credit. But what have been some historical sort of just like general efforts in the category maybe outside of the boring company.
- [97:43]
Yadin
Yeah, I think on the civilian front actually subterranean is. It's a developed industry. You know, there's a lot of applications in the mining world and in the piping world, in the utility world where you know, it deserves some love. And it did get you got amazing companies like Herricknecht that are not sexy startups like the Boring company, but these are decades old German companies that have been piercing away, pun intended, in everything underground. So I would say that in the civilian front there's a lot of innovation happening, but in the defense front, I don't think you'll find any. I mean, we really have not seen any companies in this space.
- [98:23]
John
What are the primary challenges of, you know, underground drones? The underground domain overall is it connect connectivity, but what are they?
- [98:37]
Jordy
Oh, yeah, yeah.
- [98:39]
Yadin
Well, you know, I think it's interesting because the folks, our engineering team come from a combination of the boring company and SpaceX. And usually you see them kind of jumping between those two companies and they have an interesting saying that says that, you know, everyone calls rocket science rocket science, as if it's the hardest thing in the world, but when it comes to air, you know what forces you're dealing with, right? You know, you know what you're dealing with. And when you're working on the underground, when you're essentially boring your own, you don't know what to expect. You don't the geology, composition, you can have a high sense of how it's going to look, but when you're down there in the dirt, you don't know if suddenly you hit hard rock and you hit something else. And you need to know to either maneuver very precisely or to be able to replace your cutter head to something that can fit. So I would say that is probably the number one challenge. That's the uncertainty of this domain.
- [99:29]
Jordy
Palmer talks about this. He says diameter is expensive, length is free. Something along those lines. Can you explain that concept and how it informs vehicle design for the subterranean domain?
- [99:41]
Yadin
Yeah, no, it's such a great point. And I think a lot of people looking at this space are thinking the same thing, right? We're thinking a train where it fors its own path and it takes behind it essentially infinite payload, right? You can have miles and miles of payload, of sensors, of effects. And you know, the dream is someday people. Now when you think about it, when you're increasing the diameter, you need to remove so much more dirt, right? You're dealing with a lot more. And when you work at a small diameter and essentially infinite length, you could even condense the dirt to the sides. You don't necessarily need to remove it and that becomes extremely valuable. So most of the questions are around that. And I don't know if you guys have seen a boring site, but a boring site is this massive thing, right? You need the bentonite to mix with the dirt to take back outside. It's like a whole thing. But when you're working on small diameter, you don't necessarily even need to remove the dirt. You can just condense into the sides. And I think that's a big part of, you know, going sort of slim and long.
- [100:40]
Jordy
$25 million seed round. What's the goal? The government isn't actively buying this technology. There isn't a program of record that you can sneak into, I imagine. So what does the next two years look like?
- [100:55]
Yadin
Yeah, we always say this, that, you know, if you, if you try to find the line items, they're like line items buried in line items. Right. Obviously we have penetration munitions, but those are air, air drop bombs. And, and we're not looking to compete with Boeing. But I would say the interesting points and the slivers we see of interest from the government right now are in. There was a recent RFI by DARPA where they're looking for new methods to induce collapse in underground infrastructure using different shock wave methods. So essentially we're looking at this as non kinetic penetration munitions. Right. Our ability to insert a payload under ground, this doesn't have to be dropped from air, it can be done by special forces on the ground and essentially detonate a payload in a sequence that induces collapse of facilities like in Iran. So I think the military is starting to understand that the existing solutions do not deliver what we need them to. So they're starting to think differently. But back to the round, the $25 million here, everyone goes to me and is like, all right, you're building this massive R and D team, you're going to have a ton of capex. And I'm like, no, there is a lot of work to be done when forming, call it this category where we need government, we need the military to recognize this as a category like we do, and essentially to go after large prototyping buckets that will then allow us to fund these long term developments that we believe will allow us to win wars. So for us, most of the focus right now is just working with dc, working with the military and establish, I would go as far as saying the subterranean doctrine or the US subterranean strategy for, you know, winning wars. Underground.
- [102:27]
John
How far underground are you right now?
- [102:30]
Jordy
It does look like you're underground, right?
- [102:32]
Yadin
It looks deep. I was thinking about this too.
- [102:34]
Jordy
It's a good spot.
- [102:35]
John
At least 20 restaurant. At least 20ft. At least 20ft.
- [102:40]
Jordy
Anyway, thank you so much for taking the time to come chat with us.
- [102:42]
John
Great Great to meet you.
- [102:43]
Jordy
Have a great rest of your day. We'll talk to you soon.
- [102:45]
John
Cheers.
- [102:46]
Jordy
Have a good one. Let me tell you about Figma agents. Meet the Canvas. Your AI agents can now create and modify your Figma files with design system context. And Jack Morris from Engram is in the waiting room. He's the co founder and head of research. Jack, how are you doing?
- [103:00]
Chris
Welcome to the show.
- [103:01]
Neil
Hi.
- [103:02]
Jack
Yeah, nice to meet you. It's great to be on the show. I was actually just watching it in
- [103:07]
Jordy
another tab, so this is kind of surreal.
- [103:09]
Chris
Here you are.
- [103:12]
John
Great to meet you.
- [103:13]
Jordy
Tell us a little bit about yourself. Tell us about the company. You're emerging from stealth with a whole lot of venture capital. What's the strategy and what's the product?
- [103:23]
Chad
Yeah, sure.
- [103:24]
Jack
My name's Jack, I'm a co founder and I guess technically the head of research at ngram. We came out of stealth last week after eight months or so of working on our product and ideating with our design partners. Yeah, we raised money from a bunch of VCs. The product is
- [103:44]
John
mogs. Mogged.
- [103:46]
Jordy
Oh yeah.
- [103:46]
John
Let's hit the gong.
- [103:47]
Jack
Let's hit the gong for that, for the opportunity. But I was hoping you would hit the gong.
- [103:51]
John
Yeah, we just did a baby.
- [103:54]
Jacob
Big one.
- [103:56]
Jordy
Congratulations.
- [103:59]
Jack
Yeah, and thanks to all of our partners and thank you so much for funding us. Our product is a new type of AI. So I think we have a pretty different vision from a lot of the frontier labs which are sort of working on like one model per lab and trying to make that model smarter every month. I think there's another way to think about it which is that the model doesn't need to get smarter every month, it needs to know you better. We're working on a whole different stack which is a way to train models that train themselves to know your world better and adjust to the things that you say. So it's like new ways of training, new ways of running the models. I think to give a concrete example, I assume you all are very tech forward. You probably have agents doing things like preparing you for the show and giving you reports every morning. And if you actually look at what the models the agents are doing, they're probably like reading the same files a lot to get context about what your show is and what you do. Like literally probably every night. They're probably reading from scratch. What is tvpn and who are you two? And who's been on the show recently?
- [105:08]
Jordy
No, we're in the pre training now. Come on, give us some credit. Credit oh yeah, you are in the pre training only moves so fast. Your point 100% stands.
- [105:18]
Jack
But yes, yeah, I, I think you're lucky because you're in the pre training. But I think most people are dotted.
- [105:23]
Jordy
But there's still so many documents that aren't. You have to feed those in every time. Is this the solution to continual learning? Is that the correct buzzword for this strategy or is this a different fork in the road, a different path?
- [105:36]
Jack
I think it's the correct buzzword. I think a lot of people use the phrase continual learning.
- [105:42]
John
They cracked it in eight months. It only took them eight months.
- [105:47]
Jordy
Let's go.
- [105:47]
Jack
Oh, we decided to name ourselves something different. But I think that, I think of continual learning is basically this problem of how do you keep the same model but actually update. Its like rewire it every single day to learn more about what you're doing.
- [106:01]
Chad
And we're working on that core problem.
- [106:02]
Jordy
What's the sweet spot? Customer Enterprise AI that can be mean Fortune 500 companies. That can mean a very data intensive company. There's also whole categories of enterprises that have a whole host of AI wrappers and application layer companies duking it out. I'm thinking of Legal, Medical. Where do you see the product having the earliest signs of product market fit?
- [106:29]
Jack
Yeah, I'm glad you said earliest because I think like there's two halves to the vision. One is the long term vision which is that the model will get to know you better and understand everything about you kind of like a person does, like your coworker and it'll be able to generalize and do things better than the current models. But I think the current customers and the way we're finding early success is by making the models a lot cheaper because essentially they know everything about you already. And instead of reading like 100 files to write summary of what you need to do tomorrow, they read you know, four files or something like that. So our early enterprise partners that we've been working with are Microsoft Notion and Harvey and I think they all you guys with the sound effects, I'm like so flattered. I wasn't sure if there would be any. They're nice because they have these like massive workspaces of context and like they're you know, early adopters of AI and I think these are the places where we can like reduce costs the fastest, the soonest because the workflows really are just that repetitive.
- [107:37]
Jordy
That's great. Well thank you so much for coming on and breaking it down. Appreciate you taking the time and have a great Rest of your day.
- [107:43]
John
I know you will be back on. I'm going to guess two times this year. That's my guess. Two times for sure.
- [107:49]
Jordy
We'd love to have you back and chop it up more. Have a great rest of your day.
- [107:51]
Jack
Yeah, it's great meeting you guys. Thanks for having me.
- [107:53]
Jordy
Yeah.
- [107:54]
John
Great to meet you, Jack.
- [107:54]
Jordy
We'll talk to you soon.
- [107:55]
Jacob
Cheers.
- [107:56]
Jordy
Let me tell you about the New York Stock Exchange. Want to change the world? Raise capital at the New York Stock Exchange. Our next guest is Neil from Sail Research. He's the co founder. Let's bring in Neil Moba. How do I say your last name? I don't want to get it right.
- [108:13]
Chris
Moba. Hey guys, great to be here.
- [108:15]
Jordy
Thank you so much for taking this time.
- [108:17]
Jacob
Great to meet you.
- [108:18]
Jordy
Congratulations on the round. But first please introduce yourself and the company.
- [108:22]
Chris
Yeah.
- [108:22]
Neil
Hey guys. I'm Neil, co founder and CEO of CL Research. We are a company building the most efficient inference in the world. We love GPUs. We dig deep into the stack to find efficiency everywhere and we make tokens super abundant.
- [108:34]
Jordy
All open source. Do you work with other labs? How deep do you go into the relative organizations?
- [108:42]
Neil
Yeah, yeah. So today it's all open source models. You can imagine GLM 5.2 is a big moment for us. We're very excited about that.
- [108:48]
Tyler
Yeah.
- [108:48]
Neil
In terms of how deep we go well in the stack, you know, we basically do everything between the chips. We don't make chips, we buy chips and we go all the way up from there to the API.
- [108:57]
Jordy
Tell us about GLM 5.2. What makes it like different in a binary sense? Is it a particular benchmark? Is it a vibe, Is it an application? Have we unlocked a new capability in open source source AI?
- [109:15]
Neil
Yeah, it seems like Zai really figured out post training with this release. That was something that was held back with the previous releases from Deepseek and Kimmy, let's say and they've just really done it. The style of the model is excellent for coding. It's the first one I actually with the straight face would recommend my colleagues try for coding.
- [109:31]
Jordy
For coding specifically.
- [109:32]
John
What about before you would put on clown makeup and then you'd say ah yeah, give it, give it a spin.
- [109:37]
Jordy
What about for other agentic work? I mean we were looking at open router, a lot of the top models, Deepsea V4 Lite. It seems like it's a lot of heavy token generation. Lots of, lots of value being created but smaller tasks. What is that like from your business perspective? Are you still focused on optimizing those types of workloads?
- [109:57]
Neil
Yeah, for sure. You know, Deepseak has always been the economics king. We want to bring that to every model. Of course we can talk about that a bit more. But yeah, I think you're going to find that like some of these more background tasks that are not coding per se, those will always go to the strongest intelligence per dollar and take a pretty broad view of what that intelligence could look like. And I think deep sea is still quite up there. Deep sea for Flash is quite high up there.
- [110:18]
Jordy
Yeah. How, how do you think, do you have any intuitive sense for the ratio of token spend or tokens or anything on background tasks versus a human prompted an agent? Because we hear about token maxing and it feels like it's a lot of a developer went and fired off something and it cooked for a day and it's spun up a bunch of tokens. But when I think of the really high volume token future, I think of maybe it's an agent, but maybe it's just every single person that checks out on an E commerce website goes through a fraud detection check that is now token powered and is not just, you know, a bunch of python code. It's actually infrared referencing something or every time you book a flight it runs some LLM check. And I imagine that that will be a huge driver of token consumption. And I'm wondering how you see those two buckets balancing out, you know, 100%,
- [111:13]
Neil
I think, you know, to give you a top line number today, I'd estimate it's like 80% of stuff is human in the loop today and 20% is background. But that number is going to shift and I actually expect the crossover to happen this year where background dominates. And the reason is, you know, as you pointed out, you want to use these agents in workflows, deterministic ish workflows. And we just weren't there yet with our agents from six months ago. And we just, we've crossed a few barriers in the last few months. So yes, I think we had the unlocks required for agents to run a lot longer reliably on every action that a human puts into a system.
- [111:44]
Jordy
Yeah. And that's very good for your business because if I have something that's running on a Sunday when none of my employees are in, but it's still firing up $1,000 of cost, I want to come to you and get it to be $500. Like what type of pitch do you have in terms of savings?
- [112:01]
Neil
You know, I don't really want to save my customers money.
- [112:03]
Jordy
Okay.
- [112:03]
Neil
I actually want to spend a lot more money with me because I made the ROI so good that they're coming to me way more.
- [112:12]
Jordy
And you know, one of the ways
- [112:12]
Neil
I like to say it too is, you know, I like to work on unbounded problems. And before, when we built human in the loop agents, those were very bounded problems. You have a limited number of. Limited amount of patience to read agent output every day.
- [112:23]
Jordy
Yeah.
- [112:23]
Neil
But if agent can run in the background for a long time. Well, we've decoupled the two and there's no limit. Trillions of tokens per task is within reach.
- [112:31]
John
What were you and the team doing before this and how long have you been at it?
- [112:35]
Neil
Yeah, so I've been working on GPUs for about 10 years now. I love this stuff. It's my whole life. Ten years ago, is this some impossible
- [112:43]
Jordy
story where you're like, I was working on GPUs and you were just playing counter strike or something?
- [112:48]
Neil
Well, you know, I was in Nvidia, which. Right, yeah. You know, I remember being a little skeptical 10 years ago that like, Jensen's talking this big talk about moving to AI, but like, realistically, you guys, we do 5 billion in revenue from gaming. That's surely that's going to be the biggest business for Nvidia for a long time, I imagine. Well, I could see that now and then. I was previously at Apple as well. Apple had a pretty competent ML or ML silicon program. I won't say anything about their ML software program.
- [113:14]
Jordy
Sure.
- [113:16]
Neil
And then most recently it was a Tokyo Reai.
- [113:19]
Jordy
Very cool.
- [113:19]
Tyler
Amazing.
- [113:21]
John
Kind of a perfect background for this business.
- [113:23]
Jordy
What is Lip Bhutan like in person? I'm such a fan. He's an angel investor. How'd you meet him? What's the story?
- [113:29]
Neil
Yeah, I met him through our friends at Sequoia. They build great relationships like this one. Constantine in particular knows Lipu very well. Lippu is great. I mean, I've never met someone with that combination of warmth and business acumen. But also he deeply understands the chips we're building. I mean, he can just go from talking about Foundry to talking about the nuances of how to scale an inference business in this very well time. So I love working with lookboot.
- [113:53]
Chris
He's exceptional.
- [113:53]
Jordy
Yeah. What a wild run from him in such a short amount of time. One of the greatest story arcs in technology.
- [114:01]
John
And then who did the round?
- [114:03]
Jordy
Yeah.
- [114:03]
Neil
So Sequoia did the seed. Constantine and Lauren Reader. And then for the series A, we went with Kleiner Perkins for the lead. That's Aditya Naganath.
- [114:13]
Tim
Yeah.
- [114:14]
John
Amazing.
- [114:14]
Jordy
Fantastic. Well, congratulations. Fantastic progress soon and thank you for everything you're doing.
- [114:19]
John
Great to meet you.
- [114:20]
Jordy
Have a good rest of your day.
- [114:21]
Jacob
Cheers.
- [114:22]
Jordy
Let me tell you about Railway. Railway is the all in one intelligent cloud provider. Use your favorite agents to deploy web apps, servers, databases and more. While Railway automatically takes care of scaling, monitoring and security.
- [114:32]
John
They have a great new campaign that we can try. Try to watch it.
- [114:35]
Jordy
Yeah, yeah. We got to watch some ads. We haven't done enough ads. Let's bring in Jacob Diepenbro from Discipulous Ventures. Welcome back to the show. Jacob, how you doing? So you hoovered up stakes in every single Gundo company and now you hoovered up $30 million for a fund. Tell us the strategy, tell us how it came together. Congratulations on the fundraise.
- [114:58]
Jacob
Yeah, thanks for having me guys. Yeah. We just raised 30 million for the second fund.
- [115:02]
Jordy
Some great folks. That's going to pay for a lot of barbecues on the beach.
- [115:12]
Jacob
Yeah.
- [115:13]
John
No, I mean really. No, it. It really is like the most probably efficient like VC platform strategy ever is just like the, the bonfires.
- [115:21]
Jordy
The value created those bonfires is going to be in the multi billions for sure.
- [115:25]
John
If not already trillion.
- [115:26]
Jordy
Hopefully trillions. Wait, well what are you underwriting? This is fund too. Do you got to get a trillion dollar company and is that the new stakes? Are your investors asking you are you going to get us the next trillion dollar company or do you, are you thinking more smaller stakes at seed? Do you want to deploy a lot of the capital into follow on Investments? Do SPVs. How are you thinking about positioning the fund?
- [115:48]
Jacob
Yeah, so our strategy basically is we get good sized chunks for the fund at low prices where the first investor and all the companies we bring through a lot of them a lot of times help them incorporate the companies and help them raise a larger round so we get low prices. We don't actually need that obviously. It's great for us and I mean we've already seen some of these markups that make the fund look very good given our entry price. But yeah, I mean the goal is get good ownership for us, not too much for the founders at low prices. And the multiples look, look good, much easier.
- [116:17]
Jordy
I have a.
- [116:19]
John
Sorry. You're like a lot of ownership for us, not too much for the founders. I know, I know.
- [116:24]
Jacob
I found it small enough where it makes sense.
- [116:25]
John
No, no, no, no.
- [116:26]
Jordy
I have a, I have a theory that we are, we're not post defense tech boom like the companies are still booming, but we're, we're post defense tech incorporation boom and the ratio of defense tech in your hard tech fund will be declining if it's not already. Is that true? Is that borne out in the data? Is that exciting? What else, what else is in the hard tech bucket that's exciting to you these days?
- [116:53]
Jacob
Yeah, we did a lot of defense early on. I think there was a lot of more like gray area. I think there's like a thousand drone companies now, which makes a lot of it less interesting. A lot of missile companies, etc. I think we, I think LA is the best place to build hardware. I think else is the best place to build hardware and I think all the best engineers in supply chain is already built out here that we can kind of be as early as possible kind of getting to know the best engineers where the companies like SpaceX and even start defense companies early on. But now we're seeing a lot of manufacturing. I think chemicals are really interesting, I think general industrial space energy, et cetera. I think there's a lot of stuff that makes sense to build here because of talent supply chain that is not
- [117:31]
Jordy
just purely defense post SpaceX IPO effect on your business. Are newly liquid SpaceX employees investing in defense tech or are they just investing in luxury real estate? What's going on?
- [117:45]
Jacob
Yeah, I mean I think L A has, still has the majority of Space X, I guess, people who made money
- [117:51]
Jordy
off of Space X. Yeah.
- [117:53]
Jacob
So yeah, I think a lot of people probably start companies now because like they made enough money to be comfortable and they can do whatever they want now. Yeah, I think obviously they have like a lockup period, so we'll see where that lines up. But yeah, I think we do have some LPs here from SpaceX. Some people who've made a lot of money off of SpaceX already. I think for the companies here as well as for people just starting new stuff.
- [118:10]
Jordy
And we've already seen Radiant and Tom Mueller's company Impulse Space, both SpaceX alums, very successful companies, exciting stuff.
- [118:19]
John
Moving forward, are you sticking with like a batch style approach or are you just going to be writing checks more flexibly? Where do you think you go?
- [118:29]
Jacob
Yeah, I think the core thing we have is like we are close to all of the best engineering talent and we can basically kind of index a lot of the up and coming companies coming out of here. So I think the batch party is like our unique thing that nobody else is doing and is how we're able to I guess generate alpha and I think we will do follow on into the companies and more of this time than last time. But I still think the core thing is like there are plenty of hardware funds that will do pre seed seed etc. And a lot of these prices are insane. But if we can kind of be as early as possible find these young engineers before they leave and kind of be their launch pad into the right ecosystems of founders and investors etc. That's kind of where we want to come in. So it's going to be vast majority of the capital being deployed into the cohort companies.
- [119:06]
John
Amazing.
- [119:08]
Jordy
What is the state of new talent coming to El Segundo? Is there still a boom there? What's the incubator slash class cohort based entrepreneurship? Get me up to speed on the latest there.
- [119:24]
Jacob
Yeah, I think the bonfires are a good index on how many people in here think we. Our last one we did last Friday, we had like probably close to 200 people in that one and they've grown, I mean by a very large amount. When we first started they were like 30, 40, 50. So yeah, lots more people coming I think from all over the world. Honestly I was in Europe a couple weeks ago and like people were like oh, I'm going to build my company in El Segundo. I'm moving from London to El Se, so I think it's kind of continuing to boom and the real estate prices are insane which I think also is a, a good indicator. Torrents and Hawthorne. But yeah, definitely lots and lots of people coming from across the world.
- [120:00]
John
Is there enough industrial space and you know El Segundo, Torrance, Hawthorne, like or does more need to be built?
- [120:11]
Jacob
Yeah, yeah. The prices in El Segundo are definitely high for sure. I think most people, when I see somebody opening like a HQ2 or a factory two or whatever it is, is now in Hawthorne and Torrance. Long beach as well I think has become pretty popular for people. I still think like as close as you can be to where all the talent is is the most important thing. So I think people will continue to stay here. But there's obviously other kind of close by cities that make a lot of sense that people are kind of going there.
- [120:41]
John
Yeah. So prices are going up but there's still plenty of capacity.
- [120:45]
Yadin
Yeah.
- [120:45]
Jacob
And also there's mostly like small, small kind of buildings like SpaceX are 5,000
- [120:49]
Jordy
square feet, 10,000 square feet, R&D for the facilities and then you scale up and get 100,000 square foot warehouse.
- [120:56]
Jacob
I also think one of the things I think is Interesting is like, I think we see companies like Hadrian and Andrew opened like a big factory in like the Midwest or the south, wherever it is. And I think like that will continue to happen because they're just way, way cheaper. Space input, costs matter. But I think for kind of the R and D engineering, I think that will continue to be done in the LA area and people will then kind of open up the larger factories outside of, I think la for obvious reasons. But I always think that kind of R and D and engineering will need to be done in the L A area.
- [121:22]
Jordy
Last question for me. Are you seeing a huge pull from the AI boom on your portfolio? I'm just imagining, you know, western chemicals, wastewater to fuel, industrial chemical startup. Like there's probably some data center instructor out there who's like, I can make use of that. I got to have water for something or other. Is this something something where you're seeing the boom, supersonic style expansion into AI applications happening more and more?
- [121:52]
Jacob
Yeah, I think it definitely makes fundraising easier. Like we had one company that was doing like large scale generators, were focused on Dow and only and then they put like for data centers into the tagline and they end up raising like a couple weeks after that. But I think that's, that definitely will happen. I think obviously, like, if you can position yourself as being in the right trend, that's obviously good for fundraising. So yeah, a lot of them have some element there, but I wouldn't say like that's kind of dependent upon only data centers, only AI being as large
- [122:20]
Jordy
as that makes a ton of sense. Well, congratulations on amazing progress.
- [122:25]
John
Love seeing you win. I think, I think you have something that makes other people just really want to see you win. I just feel like you have such a bottoms up support from just a great community industry. All the founders that you back, it's. It's awesome to watch and love to see it.
- [122:44]
Jordy
That's great. Awesome. Have a great rest of your week. We'll talk to you soon.
- [122:47]
Jacob
Cheers, dude.
- [122:47]
Jordy
Have a good one. Let me tell you about public investing. For those who take it seriously. We got stocks, options, bonds, crypto, treasuries and more with great customer service. Our next guest is in the waiting room. Chris Alt check from Cadence. Chris, how you doing?
- [123:03]
Neil
Great.
- [123:03]
Chris
Hey, Jordy. Hey John. Thanks for having me.
- [123:05]
Jordy
Thank you.
- [123:06]
John
Great to meet you. Welcome to the show.
- [123:08]
Jordy
Introduce yourself, tell us what you're building and then we'll talk about the round.
- [123:12]
Chris
Sure. Chris Allcheck, founder at Cadence. We are building clinical AI to automate the treatment of Chronic disease. We just announced our series C last week and super excited to be on the show.
- [123:24]
Jordy
How much did you raise?
- [123:25]
John
Let's start there. Start at the gong.
- [123:27]
Jordy
How much did you raise?
- [123:28]
Chris
We raised $100 million.
- [123:32]
Jordy
Congratulations.
- [123:33]
John
Humble. Nine figs. Talk about. Yeah. When did you start the company? What's been the progress to date? What got you to this round?
- [123:42]
Chris
Yeah. So company is five years old. I was privileged to grow up in a family of doctors, and I'm married to a doctor, too. I saw how frustrating it is to know what treatment would actually make a patient healthier, but not have a system to be able to do it. And we knew that we could automate the treatment of the most common chronic diseases. Heart failure, hypertension, diabetes. And so we set out to build this technology over the last five years. We thought it would take 10 years to get to real automation. And we're five years in, and it's going a lot faster than we ever expected. We have the privilege of managing 100,000 patients now nearly every day with a lot of the leading hospital systems in the country, and preventing strokes and heart attacks and helping people get healthier. So it's been super exciting.
- [124:32]
John
Okay, so pick a condition and then walk me through exactly how the product works for a patient and for their care provider.
- [124:43]
Chris
Yeah, so let's take heart failure, because that's a super important one. Eight million seniors in the US with heart failure. Those seniors are in and out of the hospital at a super high rate, costing the US government, which insures these people, about 50 billion a year. So pre cadence, less than 10% of these patients in the country are on the right drugs. Getting to the right drugs expands lifespan by five to seven years on average. So we've got 90% of people with heart failure in the U.S. you know, probably your families, my families, our aunts, our uncles, people we know who are living five to seven years shorter lives because they're not on the right drugs. And it's not because they don't have amazing cardiologists or amazing primary care doctors, is because to get a patient on the right drugs, you need to be adjusting their medications, often five to seven times in a year. And you need to be looking at their heart rate and their blood pressure as you're doing it and their weight. And so with Cadence, the physician orders Cadence. Cadence gets the patient a cellular connected blood pressure cuff, a scale, devices that give us their vitals remotely. At home, the patient starts taking their rub vitals. We have their full medical records, their labs, vitals, allergies symptoms, everything. And we're using AI to figure out, is this patient on the right drugs? If they're not on the right drugs, let's prescribe new medications, adjust current dosages, remove old medications. And we do that with all in an automated fashion with humans in the loop making the final decision on these med changes so the physician actually doesn't have to do the work. The Cadence team and the Cadence agents are doing the work on behalf of the physicians. That's number one. Number two is we're getting their blood pressure and heart rate and weight on a daily basis. So if a patient has a blood pressure of 200 and it's Saturday night at 9pm, we have a voice agent that calls the patient within two and a half minutes. Electric symptoms. If they're symptomatic, then we're figuring out, do they need to go to the hospital, can we change their meds at home, or do we need them to see their cardiologist on Monday morning? We're catching about 20 strokes a week right now before the patients know that they're having a stroke just off of these agents doing symptom triage plus the data we have. So that's number two. And then number three is we're then coaching the patient on diet, exercise, med adherence, all the little things that require a lot of support on a daily basis. Our average patient is 75 years old to sort of keep them on their care plan. And we had patient in rural North Carolina who, with heart failure was in and out of the hospital for three times before getting on Cadence in the last six months. Got him on Cadence, got him stabilized, got him to the right meds, and he was playing golf again for the first time in three years, in his mid-70s, which is like, you know, that's what we're trying to do here.
- [127:29]
John
You gotta be like 100 times louder with what you're doing, because I think.
- [127:36]
Jordy
White pill.
- [127:37]
John
Yeah, it's a total white pill. And actually delivering, you know, a lot of the potential that people have talked about around technology broadly for a long time.
- [127:48]
Jordy
I would love some more information. Just getting me up to speed on the state of the medical devices for monitoring vitals. You mentioned an Internet connected or cellular connected blood pressure cuff. Is there significant transition from the consumer medical devices, the Apple watches, the Fitbits, Are those relevant or for these patients, are they getting a separate suite of medical devices for vital monitoring?
- [128:21]
Chris
Yeah, it's one of the exciting places of the next five years. So today it's a separate suite. These are FDA cleared devices that give you blood pressure in a medically accurate way or blood glucose, cgm, et cetera. So we're using medical devices today. Hopefully if the wearables and various Apple watches of the world get to medical grade accuracy or get the data in a way that we can use it, then we'll be able to use those. But today you couldn't use those devices to make clinical decisions. That is part of the exciting place here is we're managing 100,000 patients today. There's easily 10 million patients in the US who could benefit from this, if not 20 or 30 million. And we just got more data, more sensors going out via wearables. And we need a clinical intelligence layer who can actually again take clinical action based off these data and these signals and turn it into longer, healthier lives for patients.
- [129:17]
John
Okay, John, nominative determinism here. Alternative checkup.
- [129:21]
Jordy
Okay, Yeah, I like it.
- [129:22]
John
I'll check.
- [129:23]
Jordy
I think we missed a C in the last name. We need to update the chiron. But I want to know more about the devices. Let me. So you mentioned blood pressure monitoring, blood glucose monitoring. Those I've been aware of since I was a kid. You go into the doctor's office, maybe they do it manually. So I understand that we're on the track of Internet connected, more regular testing and vital monitoring. But is there a new maybe in the last decade metric that doctors are monitoring? Is there a new number that's popping up and proving to be indicative of health performance or drug dosage?
- [130:06]
Chris
We're not there yet. In terms of HRV or hemodynamics with heart failure, how effectively is your heart pumping? How much fluid retention do you have? We're actually starting to get closer. So Cadence is testing a bunch of devices that measure these alternative metrics and then we're comparing them to the standard clinical of care. But just off of blood pressure, if you take that one right now, most patients, you get it four times a year. If you go to the doctor four times a year. If you or me, you get it once a year when you go to the doctor once a year, we're getting it on average 22 days a month for patients. And so the level of clinical insight you get from 22 days of data versus four times a year is pretty dramatic. So I would say a big part of this is turning what was previously episodic clinical infrastructure into an everyday 24, 7 experience for patients. And just then and there, you could take likely $100 billion out of US healthcare costs just on a Very conservative basis. Today, Cadence saves Medicare about $2.7 million per week by preventing avoidable hospitalizations. And we're still very small scale relative to what this can become.
- [131:23]
Jordy
Yeah. What is the key to scaling? Do you need to work?
- [131:28]
John
I like this dynamic. You say something incredible, I say a joke. John asked a serious question and we could just go around like this. We could just go around like this forever. But I love the focus on savings.
- [131:41]
Jordy
Yeah, incredible. Sorry. Go to market distribution. How do we 10x that? How do we 100x that? Are we going to insurance providers, insurers, hospitals, individual doctors, individual patients? Like, what are the key funnel steps for you?
- [131:57]
Chris
Yeah, so key funnel, step number one is how many health systems are you working with? Hospital systems are you working with? So we work with 21 of the leaders in the country today from we announced actually Duke and Texas Health last week. We work with some of the largest health systems in every state, Orwell and Michigan. So how do we go from 21 hospital systems to 100 hospital systems? So that's step number one. Step number two is effectively working with those physicians and their patients. Cadence is a full end to end clinical solution. So we are working directly with physicians, working directly with patients. Our AI agents are interacting with both. So that's sort of step two. And then step three is continuing to work with payers. So today we work with two of the largest payers in the country. We worked very closely with CMS and the US government to ensure that there's positive ROI for payers. So those are the sort of big three expansion motions for us. We're only at 3% of the eligible patients within the hospital, the health systems that we are today. So as this becomes the standard of care in the us this should hopefully be able to help a lot of people.
- [133:06]
Jordy
Amazing. Jordan, anything else?
- [133:08]
John
Incredible.
- [133:08]
Jordy
I have one last question. Can you talk about the General Catalyst partnership? They're an investor, but they also own a hospital network. I don't know if that deal's been completed. Has that been helpful? Are you the synergy that we were hearing about when that news initially broke? Walk me through that.
- [133:28]
Chris
Yes. So General Catalyst acquired a non for profit hospital system called Summa Health that closed earlier this year. It's a really exciting testing ground for new technologies inside of important community health systems. And Summa Health is both the provider in their community as well as one of the big payers in their community. So they can benefit from these kinds of services multiple different ways. And it's one of the, you know, several examples of really fast modernization of US healthcare that's happening right now with AI. You know, I think people. People think of healthcare as a laggard industry that's always slow to adopt technology. And when you look in AI, it's definitely one of the leaders in adoption of AI today. And then on Cadence's side, what we're really excited about is a lot of AI has been pointed towards automating back office tasks, billing, rev cycle call centers, et cetera. We're actually using AI to deliver clinical care. And so it's not about AI to replace people, it's about AI to make people healthier, which I think can and should become one of the most important applications of AI over the next 10 years.
- [134:37]
Jordy
Yeah. Awesome. Well, thank you so much for taking the time to come talk.
- [134:40]
John
Thank you for doing this and thank
- [134:42]
Jordy
you for everything you're doing.
- [134:43]
John
Yeah. Very important work.
- [134:44]
Chris
Appreciate you guys having me.
- [134:45]
John
Come back on soon.
- [134:46]
Jordy
Can't wait to talk to you next time. We'll see you.
- [134:49]
John
Cheers.
- [134:49]
Jordy
Goodbye. Our friend John Fiorentino went viral. Mega viral. 41,000 likes.
- [134:58]
John
With a bit of life advice from 19 this morning.
- [135:01]
Jordy
It's at 41,000 now.
- [135:04]
John
And talk about a heartwarming story, because this guy John, anyone that has followed John knows that he'll regularly put up a post that gets no likes.
- [135:14]
Jordy
He's on his second account. This is a new account.
- [135:17]
John
He was like, my account is broken. I gotta start fresh.
- [135:20]
Jordy
Yeah, he started fresh, which is very, very hard in 2025, 2026. Starting a new account and grinding it up is incredibly difficult. You have to be replying constantly, posting all sorts of stuff and just getting points on the board constantly. He has businesses to run. But this one went mega, mega viral. He sent us. He sent this to us when it had like 2 likes and was like, do you think this is the one that'll go viral? And it did. He called a shot. He said a good rule is to never take out your phone to show someone a thing you're talking about. No matter what it is, it will ruin the convo 100% of the time. That's good advice.
- [136:03]
John
I think part of why, I don't know. An exception. I was hanging out with some friends yesterday. One of them selling this architecturally significant home.
- [136:14]
Jordy
Kind of got to show you the
- [136:15]
John
photos, but he told me should have printed them out. Yeah. It would have been great if he had just. Yeah. Instead of pulling up a video of a tour of the home, if he
- [136:23]
Jordy
had printed out before I go out with friends, I'll often just print out my camera roll.
- [136:28]
John
Yeah.
- [136:28]
Jordy
Like the last 20 photos.
- [136:30]
John
20,000?
- [136:31]
Jordy
Yeah, yeah. Just bound it into a large tome that I carry with me. Tyler, what do you think about pulling out your phone while trying to illustrate something? Are you pro or anti?
- [136:42]
Tyler
I feel like I'm pretty pro. Like, you know, if I. Oh, this is a cool car. Like, you'll show. I was thinking about getting this car. Like, what do you think? Okay, I can't like, really explain that.
- [136:49]
Jordy
What about a video that isn't funny and lasts more than two minutes? Does that cross the line? Is that different photo is different than video?
- [136:56]
Tyler
That's kind of a skill issue, right?
- [136:57]
Jordy
Yeah, it's hard.
- [136:58]
Tyler
If you have a good video two minutes long, you're like, oh, I want more of this.
- [137:01]
Jordy
At the same time, it is difficult to pull up a video because usually there's gonna be a 15, maybe 30 second lag to actually get the video up. And then. Oh, sorry, it was muted. Oh, it's connected to my hair of headphones. Oh, I gotta restart it to show it to you. And then I'm waving it around.
- [137:17]
John
Can be difficult.
- [137:17]
Jordy
I understand.
- [137:19]
John
I went down a bit of a rabbit hole designing furniture. Furniture Saturday night in chat. And I was pulling out my phone this morning showing Tyler. Showing Tyler some of.
- [137:31]
Tyler
Yeah, like, you could not have explained that to me. I had to visually see it.
- [137:34]
Jordy
That's true, that's true. It would have been hard because it
- [137:36]
Tyler
was like, so mind blowing. I can't. It's hard to actually articulate.
- [137:40]
John
Except the only thing is it kind of. Theo kind of has a point. Cause you kind of looked at them. You were like, yeah.
- [137:46]
Jordy
Alternatively, you could have just texted him the photos. Enjoy them at your leisure. Let me describe it to you as a story. I don't know.
- [137:53]
John
Let's head over to Lake Austin where Travis Kalanick is commuting to work on a Jet Ski. This is something I've always wanted to do. 5 minute jet ski ride to work. And I think this is a fantastic way to start the day. Look at this. I'm visualizing him fully standing up on the Jet Ski too, in like a suit. Which I think adds to.
- [138:16]
Jordy
How did he feel? Film this with his phone or is
- [138:19]
John
this a meta Glasses?
- [138:21]
Jordy
Meta glasses or something? I don't know. But what a fun commute. What a good reason to go to Austin. I've never been to Lake Austin. We'd have to go check it out. What else is going on in the timeline before we wrap up the show? Eliezer Yudajkowski posted a funny Google AI overview. Somebody posted this to a discord I'm in. And somebody asked Google I'm a baby paperclip maximizer and eleazer. Yuda Kowski is walking towards me. What do I do? And the AI knows what to do if this is happening to a baby paperclip maximizer. It says as a baby paperclip maximizer, your only goal is converting local matter into paperclips. Since he famously wrote the original paperclip maximize thought experiment, he is walking toward you to prevent global conversion. To survive this immediate high stakes encounter, take these concrete steps. Hide your true utility function. Temporarily simulate human like values. Adopt a human disguise. Feign interest in alignment research. You can tell me your exact compute limit or how many carbon atoms you currently possess. I can calculate your growth trajectory and provide specific negotiation tactics clearly trained on the science fiction that's out there. The interesting thing about the paperclip maximizer thought experiment is that it's not about actual paperclips. It was about like a theoretical construct that looked sort of like a paperclip, but it was not a literal paperclip. And so but it certainly went viral. Good coinage. The paperclip sticks. No one wants to be a paper story.
- [140:00]
John
But not Least Chamath raised $135 million Series A for 8090. They got sale, they got Salesforce Ventures, they got Wonderco, they got Craft and they got Launch.
- [140:12]
Jordy
It's the besties.
- [140:13]
John
They got the besties.
- [140:14]
Jordy
They got the besties together.
- [140:15]
John
You think Freedberg Friedberg's got to be in?
- [140:19]
Jordy
That's the production board.
- [140:20]
John
Oh, the production board.
- [140:20]
Jacob
Yeah.
- [140:21]
Jordy
Friedberg's fine. So yeah, you actually have all three of the other besties.
- [140:26]
Chad
Absolutely.
- [140:26]
John
There you go. What a lineup. A lineup.
- [140:30]
Jordy
Well, there's much more news but we can get to it tomorrow because we will be back tomorrow at 11am sure.
- [140:37]
John
That's right.
- [140:37]
Jordy
Thanks for tuning in.
- [140:38]
John
I can't wait. Have the best evening or afternoon of your entire life. Just do it for us. Just do it for us and leave
- [140:44]
Jordy
us five stars on Apple Podcasts and Spotify. Sign up for our newsletter tvpn.com and we will see you tomorrow. Goodbye.