OpenAI–AMD Deal, DevDay Reactions, xAI’s Memphis Datacenter | Doug O'Laughlin, Celine Halioua

Summary

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TBPN EPISODE SUMMARY

OpenAI–AMD Deal, DevDay Reactions, xAI’s Memphis Datacenter | Doug O'Laughlin, Celine Halioua

Podcast: TBPN | Hosts: John Coogan, Jordy Hayes
Date: October 6, 2025

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Episode Overview

This episode dives deep into the recent flurry of AI tech news including major OpenAI partnership deals—most notably the OpenAI–AMD agreement, reactions to OpenAI’s DevDay product launches, and an analysis of xAI’s “Colossus” data center efforts in Memphis. The hosts are joined by semiconductor analyst Doug O’Laughlin to unpack the implications of these unprecedented chip deals and by Loyal CEO Celine Halioua, who shares her journey developing lifespan-extension drugs for dogs. The show is fast-paced, insightful, and peppered with humorous takes on the rapidly evolving tech landscape.

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Key Discussion Points & Insights

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1. OpenAI DevDay: Product Announcements and Implications

[09:34–18:37]

• Product Launches:

  • ChatGPT Apps—integrating with companies like Zillow and Figma for in-app prompts ([09:41]).
  • Agent Builder—a node-based, Zapier-like workflow tool for more intelligent automation (“Is it like Zapier but with more if-statement intelligence?” – Jordy, [10:20]).
  • Codex—now GA (general availability), no major upgrades.
  • APIs—Sora 2 API at $0.10/second (significantly cheaper than expected), with a Pro tier at $0.30/second ([12:04]).

• Market Segmentation:

  • Consumer vs. Enterprise vs. Prosumer—AI is bifurcating into three business models:
    • Free/ad-supported consumer use (knowledge retrieval/fun)
    • Enterprise SaaS (API-driven workflows)
    • “Prosumer”/pay-as-you-go for power users—potentially a key growth market ([16:36–18:37]).
  • Consumption-based pricing for heavy users could change how AI tools are adopted and paid for.

• On Sora as Platform vs. API:

  • OpenAI opening Sora API signals lack of intent to turn Sora into a social app/content destination. “If you thought it could be a new social video network, you’d keep the tool exclusive.” (John, [23:18])
  • App adoption patterns and the creation/posting dynamic are contrasted with early Instagram.

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2. AI Hardware Arms Race: OpenAI Deal Frenzy, AMD, Nvidia, and Market Reactions

[26:07–54:50]

• Circular Deal Structures:

  • OpenAI is “creating gravity” by involving all major hardware players—Nvidia, AMD, Oracle, Broadcom—making AI infrastructure everyone’s problem (“It's everyone’s problem now. Everyone has a vested interest in OpenAI.” – Doug, [57:13]).
  • OpenAI’s strategy: secure warrants/partnerships at every layer (Doug calls it “too big to fail,” [57:15]).

• OpenAI–AMD Deal Details ([38:54]):

  • 5-year agreement; OpenAI to buy 6GW-equivalent lots of AMD’s MI450 chips (directly or via cloud partners like Oracle).
  • AMD CEO Lisa Su promises “tens of billions” in new revenue—OpenAI receives warrants for up to 10% of AMD (160 million shares at $0.01) if deployment milestones are hit.
  • Incentives for “mutual success” between OpenAI and AMD.
  • Hypothesis: OpenAI may inference on AMD, train on Nvidia (Jordy, [43:13]).

• Comparison with Nvidia, Broadcom, and Industry Trends:

  • Nvidia seen as preferred partner (“Nvidia remains the preferred chip supplier,” [44:27]), but everyone (including hyperscalers) is hedging with custom chips (Google TPU, Amazon’s Trainium, etc.).
  • Circular capital flows (e.g., Nvidia invests in OpenAI, OpenAI then re-invests in chips): questioned as “dotcom-bubble-style” but also part of today’s megacorp financing (Doug, [59:05]).
  • “You never really lock down Sam.” (Jordy on Altman’s partnership maneuvering, [37:51]).

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3. AI Infrastructure, Power, and the Coming Energy Crunch

[47:03–72:06]

• Massive Data Center Builds:

  • OpenAI’s chip deals are expressed in gigawatts, and energy demand is at the heart of scalability (OpenAI planning for 1GW in the second half of next year, [46:34]).
  • Musk’s xAI building “Colossus” data centers in Memphis—significant local debate over power/water ([50:12]).

• Where Will the Power Come From?

  • Doug: The grid isn’t built for 100% sustained load; expect on-site (“behind the meter”) gas gen, and a scramble for supply ([69:49]).
  • “Natural gas energy consumption is just going to go through the roof.” – Doug, [69:49].
  • International expansion likely; possible role for Oklo/fusion/nuclear if openAI leans in.

• Financing the Build-out:

  • Hyperscalers have massive cash stockpiles but minimal leverage (“No one is levered at all,” [60:38]).
  • Potential for more private credit and increased leverage (Jordy: “If you use 250B FCF at 5% coupon, that's 5 trillion in notional debt,” [74:10]).
  • “When you all run out together, that’s the problem… a debt-fueled binge.” (Doug, [74:16]).
  • Mag 7 (big tech) could lever up and raise huge funds if needed.

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4. xAI, Tesla, and the Value of Colossus

[50:12–89:20]

• Colossus & Asset Valuation:

  • xAI’s Memphis data center (Colossus 1 & 2) houses >200,000 Nvidia chips; new one will be even larger.
  • Musk’s ability to finance “never underestimate” (“If there’s someone you should never short, it’s Elon Musk.” – Doug, [85:04]).
  • Colossus 2 by itself could be worth “tens of billions” on breakup value ([88:48]).

• Speculation on xAI’s Future:

  • Possible merger of xAI into Tesla to solidify financing and asset base.
  • Larry Ellison cited as a continual resource for Musk.
  • Concern over whether xAI can maintain burn without product market fit—but hard to bet against Musk’s fundraising ability.

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5. Industry Competition: Old Tech, New Tech, and The Threat of AI to Incumbents

[19:34–24:39; 91:32–End]

• OpenAI Encroaching Across the Stack:

  • OpenAI essentially now a “large tech company; every founder must ask ‘what if OpenAI does this?’” (John, [19:13]).
  • Previous examples of tech giants failing to crush verticals despite forays (see Facebook/Google rivalry discussion, [20:05–22:56]).

• Sora and Platform Strategy:

  • Debate on whether Sora will become a consumption/social network or remain a creative tool.
  • “If you can create a place where every Sora generation ends up in the feed…”—the missed Instagram opportunity, but also, lower creation/post ratio observed for AI video ([26:34]).

• App Store Chatter:

  • Sora and ChatGPT shooting to #1/2 in App Store downloads, above TikTok and Instagram ([29:31]).

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6. Dog Longevity Drugs: Interview with Celine Halioua (Loyal)

[112:39–137:54]

• Celine’s Background & Loyal’s Mission:

  • Stemmed from working on human longevity, pivoted to dogs for feasibility.
  • Marketed as “drugs to extend dog lifespan”—huge market, high willingness to pay across SES (Celine: “I’ve had people offer me $50,000 for the drug before,” [117:35]).

• Science and Regulatory Path:

  • Targeting IGF1: “The thing that makes a Newfie grow large also governs its rate of aging” ([119:35]); their drugs attempt to shift a big dog’s biology toward that of a smaller, longer-lived breed.
  • Rigorous regulatory pathway—first ever FDA efficacy approval for a longevity drug.
  • Dog drug development is orders of magnitude faster & cheaper than in humans ([126:08]): 4–7 years and ~$20–50M for dogs vs. 10 years, $1B+ for humans.

• Potential for Human Spinout and Biotech Industry Context:

  • Dogs as a better analog/model than mice for translational aging research.
  • The commercial system for dogs (pet owners spend anything, broader impact possible) and advantages in FDA exclusivity for animal drugs ([130:37]).
  • No AI hype here: Celine is skeptical of real-world impact of AI-for-drug-discovery until much better underlying data exists ([132:07]).

• Work Culture and Leadership:

  • Fully remote team; “You get so much more benefit from hiring the best person for the job, no matter where they live” ([136:26]).

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Notable Quotes & Memorable Moments

• On OpenAI’s Agent Builder:

  • “It’s almost like a Zapier… just a little more intelligent but with if-statements.” – Jordy, [10:20]
  • “I see this thing potentially creating a prosumer, consumption-priced tier in the market for OpenAI.” – Jordy, [16:36]

• On Sam Altman’s Deal-Making:

  • “There’s a world in the future where OpenAI needs a bridge round and can go to all these suppliers and say, ‘if you don’t pony up, we all go down.’” – Doug, [57:15]
  • “You never really lock down Sam.” – John, [37:51]

• On AI Bubble Talk:

  • “It’s contrarian at this point to say this is good, healthy, and natural.” – John, [32:48]
  • “It’s not tech bubble crazy—the valuation would have to be 2x from here… Last time the tech bubble was concentrated in small unprofitable companies. Today it’s the seven largest companies in the world.” – Doug, [59:05]

• On Power Constraints:

  • “Natural gas energy consumption is just going to go through the roof.” – Doug, [69:49]

• On AI’s Threat to Creators:

  • “If you’re making content that is at all substitutable with slop, you’re done. But if you’re making something uniquely human, you can’t be replaced.” – Jordy, [107:59]

• On Loyal’s Market:

  • “A certain subset of the population will spend anything on their dog. Not actually correlated to SES or how much cash people have in the bank… I’ve had people offer $50,000 for the drug.” – Celine, [117:13]

• On AI-for-Science Hype:

  • “I debated whether we should just make AI part of our story for valuation, but honestly, we’re not there. Biology is the ultimate black box.” – Celine, [132:07]

• On Remote Biotech Teams:

  • “We have to hire the best possible person for each skill set we need, and often those people are not actually, they’re almost never in the Bay Area.” – Celine, [136:26]

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Timestamps for Important Segments

• [03:03] – AI hardware device speculation
• [09:34] – OpenAI DevDay: products launched
• [12:04] – Sora 2 API pricing discussion
• [16:36] – Prosumer model & AI consumption economics
• [26:07] – AMD–OpenAI deal explainer
• [38:54] – AMD deal specifics and strategic intent
• [47:03] – Energy grid and scaling AI infrastructure
• [50:12] – xAI Memphis datacenter story (Colossus)
• [56:20] – Doug O'Laughlin joins: chip market analysis
• [60:38] – Bubble analogies and capital structure
• [69:49] – Power supply & data center energy strategies
• [88:48] – The asset value of xAI’s “Colossus 2”
• [112:39] – Celine Halioua interview: Loyal and dog longevity
• [126:08] – Dog drug development: timelines and costs
• [132:07] – Discussion of AI in drug discovery
• [136:26] – Loyal’s remote team & company culture

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Additional Memorable Moments

• [53:38] – GPT-generated X posts benchmarked vs. real “viral” content (“Who’s with me on turning this month into pure spooky magic?” – Grok, [54:50])
• [95:02] – Gong hit analytics and segment breakdown (“Are gongs louder as funding increases?”)
• [134:34] – Dogs on Ozempic: Celine’s take (“It takes all the joy—the dog becomes a cat.”)

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Tone & Style

The episode is energetic, irreverent, and deeply knowledgeable. Hosts John and Jordy share banter, skepticism, and excitement around AI’s future, with plenty of inside jokes and meme references. Guests are given space for detailed technical explanations, blending frank industry critique with strategic speculation.

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Useful For:

• Anyone tracking the business, technical, and societal impacts of generative AI, especially the coming hardware and energy crunch.
• Sector investors, founders, or technologists navigating the new “AI stack”.
• Biotech/healthtech professionals interested in the translation of longevity research into the consumer pet market.
• Fans of fast-paced, sometimes-meme-laden technology commentary unconstrained by corporate PR.

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End of Summary

Transcript

[John]

You're watching TVPN.

[Jordy Hayes]

Today is Monday October 6, 2025.

[John]

We are live 1999.

[Jordy Hayes]

1999 is January or is it December 1999? We don't know. We're going to figure it out. We're live from the CB pen Ultradome. The temple of technology. The forces of finance. The capital capital. Today is OpenAI's Dev Day. 1500 people are attending. It's their biggest event ever. They're in Fort Mason. Sam Altman and Jony I've are going to be giving a fireside chat. That'll be fun. There's been rumors that the hardware device that they're building is delayed but I kind of don't care. I read the Financial Times. We'll dig into the Financial Times report but it's supposed to come out in 2026. Might be pushed a little bit.

[John]

I don't doubt nothing about the leak made me want it.

[Jordy Hayes]

Yeah, exactly. I don't doubt that they're going to be able to ship a product. It's Jony I've and Sam Altman. They're going to be able to figure out how to manufacture something and sell something. My take was that there are two things that they need to solve that are way more important than like can they get a manufacturer to make it and ship it? Like that's not the problem. The first one is will people adopt the form factor they pick? The rumor's no screen which has been tried before by startups with little success and I remain pretty pilled on what the meta head of wearables told us about like these Lindy form factors. The watch, the tablet computer, the notebook, the hat, the glasses. If you were selling me a smart hat I might be more down. I mean the chain I guess like the Jesus piece. The smart Jesus piece could be you know you're building AI God why not create a talisman bigger and bigger chains for more compute something, something there but the pin always felt a little odd and it seems like it's harder to get people to swap over but the biggest, the second thing that's like really crazy is there are just insane lock in effects that not even Jony I've can overcome when competing with Apple we talked about this with meta Ray ban displays you don't get imessage notifications in.

[John]

Meta ray ban if you had personal superintelligence in this new device form factor.

[Jordy Hayes]

You'Re using the meta buzzword. But this is also what and it.

[John]

Could do anything in the world except send messages on your app, text your.

[Jordy Hayes]

Wife except for like check in on your kids or like text your buddy from college. Like that is a serious, serious missing piece of any hardware device that is not going to be integrated. Imessage has become so dominant. It's been remarkable network but now I do.

[John]

One thing that we can take away from the humane AI pin is that. And again the humane AI pin from my sense of the leaks around the jony I've project is that it's not that different. It's more similar to the humane AI pin in my head right now than it is different.

[Jordy Hayes]

The humane pin had that screen that was the projector. I think they're doing away with that entirely going voice only. It's clear that speech to text is good enough now that you could have a voice interface. I mean I'm sure that they've seen in the analytics for the ChatGPT app. What's the latest data? 800 million weekly active users.

[Tyler]

Yeah, that was in the dev day.

[Jordy Hayes]

Like presentation and I think Jordy had a question for you about that. Is that good?

[John]

I heard the number. I thought there's a lot of big numbers thrown around. Usually they're in the billions these days.

[Jordy Hayes]

Yeah, yeah, kind of sandbagging. Honestly get to a billion, dude, come on. But getting that to actually reach a point where people are using this with their imessage there's a bunch of interesting workarounds. I could imagine the real prosumers, the real techy folks being like yes, I have a Mac at home that runs a piece of software that like screen scrapes and interacts and puppeteers all the Apple apps and sucks all the information out of that and puts it wherever I want. I don't think Apple's gonna take kindly to that. I think they're throw up a bunch of barriers and people are gonna be really, really sticky staying in their Apple ecosystem at least for like a year or two until Apple can just catch up and kind of clone it back.

[John]

I'm just not at all convinced that we need a new device for the current state of models.

[Jordy Hayes]

Yeah, when you think about.

[John]

But new devices are exciting. They're great for building hype. If you [e-mail] gets 10 times the amount of attention that it does if it was just maybe even 100 or a thousand, if it was just a website that was kind of an angry friend. They get a lot of attention and excitement because you're getting into the conversation around net new platforms and new hardware layers. But we've just seen with humane you can build something that's built natively around AI and it can be a very functional device. Nobody was arguing with humane that it wasn't like it didn't do like it technically did what it said it was gonna do. It's just what it does is not that useful.

[Jordy Hayes]

Yeah.

[John]

When you compare it to the cell phone that's already in everyone's pockets.

[Jordy Hayes]

Yeah. Or when you Compare it to ramp.com, time is money save. Both easy use corporate cards, bill payments, accounting and a whole lot more all in one place. When are we going to get the hardware device from? I mean it is technically a hardware company. You get the card, the card is hardware, it's a hardware company. The Humane device was a little rough. It just feels like there's more opportunity than there is because of how slow Apple moves. But when you think about them partnering with Anthropic at some point and yeah, you're not chatting with GPT5, but you're chatting with Claude and you can do that on your AirPods, on your phone and on your watch and on your glasses. It's just their game to lose. I feel like in terms of hardware, like they'd really have to mess up to not eventually deliver something when time is there.

[John]

Yeah. Because again, AirPods are like a 20 plus billion dollar revenue run rate product. It's good, great for a lot of things integrated and you can hear the outside world coming in.

[Jordy Hayes]

I just remember when I was a kid there was a little bit of an arms race for hardware devices and Apple was behind on a lot of things. Like they came out with the ipod and there was this company called the Iriver that was ahead of them on releasing features. So the ipod had a black and white screen and this other company came out with essentially an ipod. It blew it out of the water on specs. It had a color screen you could watch movies on. Was way cheaper. And Android has done that a lot where the Android phones have had more advanced features many times but people are.

[John]

Just locked in the just looked up the I river. It looks like a vape. Yeah, this was some crazy hardware back.

[Jordy Hayes]

It was great. It was great times.

[John]

Did you see Soham Parikh was weighing in on the Nvidia AMD deal when Soham Parikh, the real Soham Perique is weighing in on some of these circular deals.

[Jordy Hayes]

Is this the real account?

[John]

That's the real account.

[Jordy Hayes]

There were several knockoff accounts. This is the real account.

[John]

It just so happened that the real account was at Real Soham Parik. He says Nvidia, Oracle OpenAI AMD what a time to be alive. Certainly is. Gotta get the update from him. How's his life post Going exclusive. Going exclusive.

[Jordy Hayes]

Going exclusive. Yeah, we're having Doug o' Laughlin from Fabricated Knowledge on the show in a little bit and one of my big questions is like, how deep will this go? We've heard stories about Sam Altman doing deals, talking to tsmc and I'm wondering, does this get to the point where he's talking about. He's talking to asml, he's talking to like, like niche lithography machinery manufacturers about scaling up.

[John]

Like he should just start going at.

[Jordy Hayes]

The entire supply chain.

[John]

He should start going around to every company and saying, if you give me warrants, I'll announce a partnership. And you're.

[Jordy Hayes]

And it seems to be working.

[John]

Your stock will go up on average. We've seen the market caps rise, you know, between 20 and 30%. And I'd love to be able to do the same with you.

[Jordy Hayes]

People are into the open air economy. They are truly propag it up. Well, if you're watching OpenAI Dev Day later, it's probably on Restream. Restream iO1 livestream, 30 plus destinations, multi stream and reach your audience wherever they are. Sign up for free. What else is in here? They're launching agent builder. Tyler, do you have an update on what they actually launched? I wrote a take kind of based on the leaks and the previews and I'd love to hear your feedback on my take. But what do we know so far?

[Tyler]

Yeah, so, so they did. It's already over. The main livestream.

[John]

Did you just say Tyler at TVPN says so over.

[Jordy Hayes]

I thought, I thought we were so bad. It's already over.

[Tyler]

No, no, we will get, we're so back.

[Jordy Hayes]

We will get the, we will get the timeline update from you in just a little bit. But give us the facts of what was launched and what the product is.

[John]

Yeah.

[Tyler]

Okay, so there were four, four like main, main kind of things. So the first one was like apps and ChatGPT.

[Jordy Hayes]

Okay.

[Tyler]

So this was like they showed Zillow. It's kind of just like a little web view.

[Jordy Hayes]

Yeah.

[Tyler]

There was like a figma thing where you can, you can prompt figma. It's almost kind of like a figma make thing. But just, just it's still on like chatgpt.com.

[Jordy Hayes]

Yep. And it requires you to actually have an account there. And so like the company that's partnering with them is like monetizing through their traditional path. But then they're using ChatGPT as like a front end.

[John]

Yeah.

[Tyler]

And they announced like soon it's going to be like more open. There's only I think there was like maybe eight or ten companies doing it. Right now they're announcing like more ways that it's going to be Monet. And then they did, there was like the agent builder. So this was the leaked kind of video where it's almost like a.

[Jordy Hayes]

It's node based workflow.

[Tyler]

Yeah, it's almost like a zapier kind of thing where it's just like a little bit more intelligent but there are still it's like if statements just like a single.

[Jordy Hayes]

Does it have cron jobs too?

[Tyler]

I think so, yeah.

[Jordy Hayes]

So in theory I could say every day check my email, create a digest, then go and do a deep research report on what's going on in the tech news and synthesize my inbox against the tech news to surface anything relevant. So if the CEO of AMD has emailed me and AMD is in the news, I definitely want to get back to them immediately because we want Lisa on the show. Something like that.

[Tyler]

Yeah, yeah. But I mean there's a big difference between this and kind of what people usually think of as like agents.

[Jordy Hayes]

Sure.

[Tyler]

Like when this is very different than what was the thing they launched a while ago?

[Jordy Hayes]

Well, they have Operator. Yeah, they have Operator. Quite different from Operator which has browser and then they have Agent Mode.

[John]

How many times have you used Operator in the last three months, Tyler?

[Tyler]

I don't. Honestly this is pretty bad, but I don't know if I ever used Operator.

[Jordy Hayes]

I used Operator a few times. It got kind of stuck on like captchas and stuff the one time. But I have used Agent Mode more recently and that's been. It's kind of like deep research. Plus like it can just go farther into websites. Like if it can go onto a website like Zillow or Redfin. And it doesn't just need to be like blog posts and summary articles and PDFs. It feels like it can actually go to a website and then type in search results and get a whole bunch more data. It does seem like a better product, but it doesn't seem like it's having crazy takeoff in terms of adoption.

[John]

Yeah.

[Tyler]

And then so the third thing was about Codex. So Codex was in Research Preview. It's now like ga. I don't think there weren't a ton of big updates there. And then the fourth thing was just various APIs. So there's a Sora 2 API. It's $0.10 per second, which is quite cheap. That's much cheaper than I thought it would be.

[Jordy Hayes]

Yeah, we were debating this. It was $3 per generation on VO3, right?

[John]

Yeah, around.

[Tyler]

That sounds great.

[Jordy Hayes]

And they give you three. So if you truly took advantage of your VO3 account, allegedly you were basically break even for them. But no one did. Like I would generate three and then I would forget about it for a week and then I'd come back and generate the max. But it seems like they did, they did figure out how to optimize inference to one order of magnitude, not two, which we were kind of speculating about.

[John]

Yeah.

[Tyler]

And then there's Sora 2 Pro, which.

[Jordy Hayes]

They could be subsidizing it though.

[Tyler]

Yeah, I'm sure it still subsidized to some extent. But then there's Sora 2 Pro, which is like 30 seconds.

[Jordy Hayes]

That's pretty.

[Tyler]

No, no. 30 cents per second.

[Jordy Hayes]

Okay. And it's a little bit longer, right? It can go from like 8 seconds. It can go to like 15 seconds or something in total.

[Tyler]

Yeah, I think so.

[Jordy Hayes]

That's pretty cool.

[John]

Is it worth reading to the AMD announcement happening the same day as Dev day, You think it just had so much motion that it was just going to get announced as soon as it was ready, or do you think this.

[Jordy Hayes]

I think there's like multiple tracks going on and Sam's just pushing both like full tilt. Because last last week there was, you know, the Nvidia deal, the Oracle deal, the Broadcom deal, like all of those things were happening simultaneously with the launch of like GPT5, Sora, the app. There was another announcement that they launched. Oh, the Pulse app. Like the act like ad inventory, agentic commerce. Like there's just been a new release on the product side every day and then there's also been a business deal every day. Like we got the tender deal. Like these things feel like they're like they're not able to time up one next to the other. It doesn't matter. They're just like all flowing really freely. Much like wallet infrastructure for every bank from Privy. Privy makes it easy to build on crypto rail, securely spin up white label wallets, sign transactions, integrate on chain infrastructure all through one simple API. So my take, and I'd love both of your feedback was that this feels like something that puts us in the prosumer world of AI. So right now I view AI as there's the consumer world, which is just you go to ChatGPT, you ask it how to make banana bread, it gives you A recipe. You are not expensing that, you're not underwriting that as some sort of business value. You're just using it like Google Search Knowledge Retrieval. Maybe you're chatting with it as a friend or whatever, whatever. And that needs to be monetized with ads, that needs to be free over a long period of time. Then you have enterprise software, the sassification of AI. If you have a true business workflow that you are automating, you're probably working with LLMs at the API level, building software and then potentially selling that software to other people. And so this looks like I went to ramp, got better at tagging receipts and it's like I didn't even notice. I'm not chatting with anything necessarily. It's just doing stuff behind the scenes because every company is integrating those. My question is, we've heard rumors of like Getting to the $2,000 per month bill for OpenAI features like does this agent builder potentially get us there? Do we wind up in a world where, you know, we've seen this before. When Images and chatgpt launched, everyone generated a few Studio Ghibli's like the day of, but then six months later it's kind of bifurcated into Consumers use it every once in a while as a fun thing. But then there are professional people that are in it basically all day long as a workflow tool because they're a visual artist and they need it as a canvas to pull from and then edit and create other stuff. Or they're doing blog images or they have a variety of reasons for using that product and they use it in a professional workflow place, basically. And I'm wondering if some of these agentic workflows will have serious inference costs because you're wiring them up and you're saying like, go to GPT5Pro every single day and write a GPT5Pro query for every single news item on my to do list and then generate a Sora 2 video, weave that in and you wind up spending like $10 a day or two or $50 a day. And pretty quickly Trey in the chat.

[John]

Says maybe you aren't expensing banana bread recipes, but I am.

[Jordy Hayes]

Let's go.

[John]

Depends how elite the banana bread is.

[Jordy Hayes]

Sure, if you're a baker.

[John]

Amazingly strategic asset.

[Jordy Hayes]

Yeah, yeah, if you're a baker. And so I wonder, like we are getting to this point where some people are thinking about their OpenAI use. You're underwriting it under some sort of loose business value. You might be expensing it you're thinking seriously about this and I wonder if we'll get to basically consumption based pricing in like a prosumer type world based on these flows. We see that with the SOAR2 stuff right now it's all balanced to be free but you have a rate limit. I wonder if we'll see the agent builder if you're really hitting this thing constantly, if they will start charging more for people. I think there's a little bit of organ rejection from consumers where they're like I'm much more comfortable just saying I'm paying 200 bucks a month and maybe I'm using it. Not enough. Maybe I'm using. But I want the all you can eat plan.

[John]

Yeah. I guess my question for you, do you expect average consumer at any point to be building out a variety of workflows?

[Jordy Hayes]

No. So I see them as like 2. There's multiple markets. For a while we've been modeling OpenAI's business as like they have a consumer product that they're going to try and drive to essentially free with ads and you'll have a ton of features and they will try and deliver you a ton of value. So Sora, the generations are free. You can't pay for anything more in the app.

[Tyler]

Also the apps they launched today, those are very much like consumer.

[Jordy Hayes]

Exactly. But they'll take a cut on the back end and so they will monetize very heavily on the consumer side. And then you also have like your hyperscaler cloud platform, your API business that is pure consumption based selling the API, selling the LLM. But I'm wondering if we will see the development of like something in the midd something prosumer, something consumption based pop up now There is.

[John]

Yeah, to be clear, it's this company N8N which we haven't really followed closely.

[Jordy Hayes]

We should have the founder.

[John]

But they have seen a ton of growth. They've seen this organic kind of always a good sign when people are selling kind of like courses around how to build a business based around your software product. Right. This was Shopify in the early days and so a lot of the posts this morning are saying OpenAI just killed N8N how do you say this actually Tyler?

[Jordy Hayes]

Is it Natan?

[Tyler]

Yeah, I don't know. Usually I just when I read it I just think N8 N8N yeah.

[John]

So may have just proven myself to be a boomer if I'm mispronouncing it. But N8 N8N we'll see. I don't think these my framework for OpenAI now is that I just view them as a large tech company. And so every VC and every founder should be asking like what if OpenAI does this?

[Jordy Hayes]

Yes.

[John]

And even if they do decide to do it, it doesn't mean that you're cooked totally. Because for a lot of reasons. How many products have big, you know, how many products has Google launched or Meta launch that looked like they were a credible threat to various businesses and then ultimately didn't really go anywhere. So I'm sure that OpenAI is taking Agent Builders seriously. I'm not sure that it'll be a real threat to Zapier or N8N or anyone else.

[Jordy Hayes]

Yeah, there's a great internal tech email from 2010 explaining what competition between Facebook and Google looked like at the time. So the abridged history of Google and Facebook sometime in the summer of 2007. So this is just like two years after Facebook launched. Larry Page stopped talking to Mark Zuckerberg. This was following an eight month period in which Facebook launched newsfeed, opened registration to everyone and launched platform where you could log in with Facebook across the web. So almost instantly Facebook was competing with Google for talent, for developer mindshare and for tech blog cred. Kind of like with the precursor to Teapot, I suppose they began to worry about their ability to enter new markets with us in the game with Facebook in the game and about core investments that weren't doing well. And that Facebook was positioned to touch checkout local or cooch which is their social network which is now defunct. I believe they worried about entrenched products that.

[John]

What was it called?

[Jordy Hayes]

Orkut O r k u t which I think was a Brazilian company that they acquired. I believe it's pronounced or kutch or something like that. I like that. Put a little flare up.

[John]

We look over at Tyler like he's supposed to be figure it out pronunciation expert at 2019.

[Jordy Hayes]

But yeah, Google was worried about Meta challenging them in entrenched products that Facebook might one day launch. Calendar Picasa which was their photos product, YouTube blogger reader news and about the comscore data telling them that the social networks are bigger than email story. Facebook had the world's people while Google only had their cookies. So we were better positioned even to own search and ads one day. Oh my. So far we haven't seen the real competition and so what's interesting is that it was not a total steamroll by the meta Facebook team. It was also not a total steamroll by Google. Google I would say did very well in Calendar, Facebook has not displaced.

[John]

They really became big calendar.

[Jordy Hayes]

They did. YouTube did very well. Reader, of course they. They canned Blogger went away. News is still there in search. But I think most people get their news from social networks these days. Picasa, I was talking to Brandon about this. Photos has kind of. Most people have moved over to just Instagram. Their Instagram page is their main photo album. People do organize photos, but a lot of people do that in Apple. And so there's been a bunch of places where Facebook won. There's been other places where Google was able to hold on. And so I would imagine that the same thing happens where OpenAI challenges the legacy tech companies across the board and they win some of those, but not all of them.

[John]

Yeah. My question is, does releasing Sora 2 via API hurt the chances that Sora as a standalone app actually becomes a social network and a consumption platform? Because the model is clearly great. It does a really good job at making video look like it was shot on a cell phone. Right? VO3. Very cinematic.

[Jordy Hayes]

Saw this.

[John]

It looks like a Hollywood blockbuster.

[Jordy Hayes]

It looks like daytime tv, but yes, yeah, sure, sure.

[John]

But it looks like it was shot by Legacy Hollywood. And Sora 2 looks like you're hanging out at the office and you're shooting a video. Right? Something like that. And so that model, which until today they had exclusive access to, can now be leveraged by any video creation platform and there's tons of them. So whether you were Adobe, you could get access to Sora to or some entry level startup. And so what that means is there's just going to be a lot more of this kind of content being created all around the Internet, not in Sora the app. And in my view that signals to me that they don't really feel like they have a strong opportunity to make Sora a place where. Place where content is consumed. Right. I see them seeing this as a creative tool because if you were like, hey, there's a 30% chance we're going to make a new like video, massive video consumption platform, wouldn't you want to give it every possible chance to be successful? You wouldn't want to let all your enemies have access to this tool. Right? You'd give yourself every possible edge. I think you would.

[Jordy Hayes]

I agree with a lot of that. I have a rebuttal. But first I'm going to tell you about cognition. They're the makers of Devin. Devin is the AI software engineer. Crush your backlog with your personal AI engineering team. So, yes, Ben Thompson has always had this good take that. Why does OpenAI have an API at all. You don't want your GPUs on fire. When you have the best consumer AI app, just make sure that ChatGPT never goes down, that the maximum amount of GPUs are on ChatGPT. So everyone has the greatest experience there. And they never even think to try another consumer chat app and just let other companies compete in the API space. You're kind of arguing the same idea for Sora. What's also interesting is that I noticed that when I was using Sora, I would generate stuff, but I wouldn't post it. I felt like I wanted to see it. And then I was like, it's not quite right, or I don't feel comfortable sharing that, or maybe I'll download it or screen record it or something. Whereas I feel like in the early days of Instagram, people would definitely go to Instagram as like, I want to filter my photos, I want to make my photos look better. But they would always post. And I bet you that the creation to post ratio is way lower with Sora than it was in the early days of Instagram. I feel like if people went into Instagram and they were like, I want to add a High Contrast X Pro 2 filter, like 99% of the time, they would just click like, yep, share it, and then I'll download it and put it on Twitter as well or something. But they would almost always share it. And so Instagram was incredibly valuable for bootstrapping that network because everything was shared to the network by default. And I feel like on Sora, people are much more hesitant to actually click. Okay, yeah, let's post. I don't know. What do you think?

[John]

I don't know. I think by the time Instagram actually became a place that a lot of your friends were. People were less, like, people became more serious about, oh, should I post this? I don't know if my. I don't know if my followers will like this. I'm not going to post it.

[Jordy Hayes]

But would they do that with. But would they filter it and then possibly. And then just save it and share it somewhere else? I never experienced that personally. It was like, if I'm going in there, maybe I don't post it at all, but I'm not just using it as like a creation tool for something else. There were apps. There was a company called Aviary that was an API for photo filtering that would go into other apps. They eventually sold to Adobe, I believe. And there were a few different. Yeah, we talked to somebody about this. There were like, those API level companies that offered the same functionality as Instagram but didn't bootstrap the social network on the back of it. And Hipstamatic was another one where it had technically, I think better photo filtering. Like people liked the look of the photos more. But Hipstamatic, Aviary, these companies didn't bootstrap a social network on the back. And so they wound up being valued like know medium sized SaaS companies as opposed to social networks. And they've never really compounded, compounded, compounded. So I agree that it's a little odd to not force everything that's generated in Sora to just automatically be shared on Sora on the app because it feels like if you can just continually have every Sora generation in the feed, you can rank those like you can.

[John]

Have a very powerful, have a catalog of content that people like and it also feeds your it feeds, it's going to continuously help you make the model better.

[Jordy Hayes]

I also wonder if they'd open it up to human generated content. Like why not?

[John]

I don't think that OpenAI needs another front in the war, right? It's hard enough competing with Google, right? You clearly to compete with Google you have to do a number of just absolutely heinous deals, right? You gotta be doing deals with Broadcom, you gotta be doing deals with Oracle, you gotta be doing deals with amd. You gotta just be doing these deals that are pretty unprecedented, at least for the, for the, in the modern era. So they don't need to open a new front in my view.

[Jordy Hayes]

I do feel like the, it's just a new angle on the creativity. If you could have Sora but with like a cap cut style or edit style video editing that goes into it. So you could have like, if you just want to maximize for like the maximum amount of creativity, being able to inject an actual screen recording of a movie clip and then a Sora clip and then your actual video that you recorded and then bring in some more Sora, like editing all that together. It's just gonna be better content.

[John]

We need to talk about how T dating advice is still top five. No way app on the App Store.

[Jordy Hayes]

Even after the hack, it's still ripping.

[John]

It's above TikTok, it's above Google, it's above X, it's above WhatsApp. I thought Sora, it's above Instagram and.

[Jordy Hayes]

Obviously Again Sora and ChatGPT were only.

[John]

Counts first time downloads. But yeah, Sora is number one. But I'm just saying if you look at the top five, it's Sora chatgpt, Gemini Threads and then t shout out to Connor Hayes for getting threads back in the top five.

[Jordy Hayes]

We love it. We love it. Also shout out to Dylan Field over at Figma doing a deal with OpenAI getting the shout out in Dev day. Think bigger, build faster. Figma helps design and development teams build great products together. You can get started for free. Tyler, do you understand this post from Leo who says new image model is just GPT image 1 mini LMAO. It's so over on the API docs what is going on?

[Tyler]

So I think it was one of those cases where someone just found the link to the png. It's hosted on the site and it's not released. Okay, so there's like no information about this at all. They didn't talk about it at Dev day. So yeah, yeah, this is kind of.

[Jordy Hayes]

I don't really know that people are being comped to this. Like it feels like most of the excitement about the about the agent mode or agent builder is like images would be like a small piece of that. Because yes, every once in a while in an agentic workflow you'd want to generate an image. But I do wonder how open it will be. Like, would it be possible within the agent builder to vend in a different LLM? Like are they going to be model agnostic at some point? Like from a true model builder you might want to be able to call Claude code over here and then use some other image generator. You want to get a mid journey image over here, you want to go over there, pull different things together.

[Tyler]

Yeah, I mean I feel like you kind of have to because otherwise it's like then as a consumer I'm just going to go use N8N or something.

[Jordy Hayes]

That'S on top of all of them.

[Tyler]

Yeah, because if I'm just being limited, then why would I. Why use it?

[Jordy Hayes]

Yeah, well, high yield Harry is not happy with all the deals that are happening. He posted on September 22nd explaining the Nvidia and OpenAI deal to our analysts. And it's the screen cap from what is that? Detective movie. Detective. HBO True Detective. True Detective. And he's getting hammered. And now he says, I'm entering my Michael Burry era. These deal structures are dot com bubble things keep dancing now, but come on guys, be real about what's going to happen here. There's a lot of people that are not happy with how crazy these deals are.

[John]

Sven Henrich says, since nobody is saying it, svenwell says we're witnessing the largest and Most concentrated instant market cap expansions in history. With no proven future revenue cost earnings model to back up the investments or the valuations. The market is running on an incredible amount of blind faith. Let's give it up for blind faith. There's not how it ends. TVD1 Certainty though. When it eventually does blow up, everyone will be asking the Fed to come to the rescue again. The only thing I would push back on is like a lot of people, it's contrarian. It's.

[Jordy Hayes]

Nobody is saying it. Everyone's saying it.

[John]

It's contrarian actually at this point to say like, no, this is good and healthy and natural.

[Jordy Hayes]

No, no, no. The people that are still super AGI pilled, just super beating the drum of like, the value is there. Look at the revenue growth. All this stuff is real. It merits the build out because we're going to see 10x gains again and again and again.

[John]

Yeah, let's pull up this video of. Let's pull up at the X Game. Stephen Hawking at the X Game. Should we pull.

[Jordy Hayes]

Can we pull up Stephen Hawking at the X Game? Oh, you guys haven't pulled up already.

[John]

If you watch this video and then say to me, I don't think Sam Trilling. Sam.

[Jordy Hayes]

Sam. Trillions.

[John]

I don't think Sam Altman should get another trillion. I don't know what to tell you.

[Jordy Hayes]

This is so sick.

[Tyler]

Wow.

[Jordy Hayes]

So that's perfect. No. Oh, no, the physics. Tyler over there. This is going to be critical to building humanoid robotics. This is a physics simulator. This is a world model. It like, physics don't make sense there. Like, that's not how that would happen.

[Tyler]

The next iteration, I swear. Sora, three.

[Jordy Hayes]

Just one more.

[Tyler]

Yeah, just scale up a little bit more, bro.

[John]

Please.

[Jordy Hayes]

Oh, yeah, On Friday we posted. Yeah, we posted another 5 trillion, please. Yeah, yeah, we posted an example of a video that we shot versus and then I had Tyler try and recreate it with Sora and the other video models. And Tyler kept texting me like, dude, just one more prompt. Like, I'm so close, I can get it there. And it was not very close. The hands were very creepy. Maybe your naked foot snuck in somehow.

[John]

Yeah.

[Tyler]

I don't know what the training day was.

[Jordy Hayes]

It was odd. Yeah. Lots of weird stuff. It seems like it's very good for. Again, we're in that style transfer. It works well when it's like there's a ton of footage of police body cams and then there's a ton of footage of spongebob and you put spongebob in the police body cam and it knows how to mash those two up. But if you come to it with just some completely new idea that it doesn't have a lot of training data on, you're going to be fighting the prompt for a long, long time. Now, those mashups are valuable. They get views. People find them enjoyable and there are some that are very funny. But it is a challenge to create anything that's kind of novel or new. But there's still a lot of room.

[John]

Sachi Mishal says this OpenAI AMD deal feels like a jump the shark moment. The deal structure is just so stupidly unbeliev. Well, I'll tell you something believable. If I was walking around a farmer's market, John, and I walk by a stand and I think, I don't really like what this guy's got. I don't really want it. But then I think to myself, what could I do in this moment to make purchasing some of these vegetables interesting to me? And so I go to the farmer and I say, how about you give me 30% of your business and I'll buy some of your vegetables and I actually should get more equity value in your business than I need to pay for the vegetables.

[Jordy Hayes]

What did I actually say?

[John]

That seems like a deal that might get done. And to me that feels a little bit like what we're seeing here today with OpenAI and AMD.

[Jordy Hayes]

Yeah, what did I actually say? Oh, here you were saying, did I call these circular deals efficient, more efficient or something like that? I said lots of people are throwing up red flags about these. This was on September 29th or 23rd. High growth companies have been paying for things with equity, in this case chips forever, most commonly with talent, but occasionally with other counterparties. The open question is that couldn't this deal be more arm's length pretty easily. Nvidia's biggest shareholders are Vanguard, BlackRock, Fidelity and State Street. There's a world where Nvidia takes the cash it has on hand, pays a dividend, and then those investors take their money and invest in OpenAI. That would be the natural flow of capital in normal times. But Nvidia thinks there are benefits to inking a longer term partnership. OpenAI looks highly likely to join the ranks of the hyperscalers in Microsoft, Amazon and Google are all working on AI chips that could cut Nvidia out of the equation long term. So Nvidia gets a fantastic long term partner with OpenAI who will be committed to buying an accelerated schedule of AI accelerator purchases and OpenAI gets a deep partnership with arguably the best CPU GPU design team in history. And so it's interesting that like the Nvidia deal, the read on the Nvidia deal was like, oh, this is Nvidia finding like its true long term dance partner. Where in a world where Google is going tpu, Microsoft is going to do their own thing, Amazon's doing their own thing in chips. Cutting out Nvidia. There's like some real risks to Nvidia long term, potentially. And so, and so Nvidia is like locking up a partnership with OpenAI. But then OpenAI is going around and being like, but we're also going to.

[John]

I think one thing that everyone's learning about Sam is you never really lock down Sam.

[Jordy Hayes]

Right?

[John]

Yeah, you had, obviously Satya and Sam were dancing. They're still dancing, you know, through the existing partnership that they have. But certainly Sam is willing to go find the incremental partner. And it's interesting that the AMD and Nvidia deals just happen so closely together. Nvidia felt crazy. AMD feels crazier just because again, it's not like these are Sam's first picks for GPUs, right?

[Jordy Hayes]

Yep. Well, you can't lock down Sam, but you can lock down your compliance with Vanta Automate compliance, manage risk and prove trust continuously. Vanta's trust management platform takes the manual work of your security and compliance compliance process and replace it with continuous automation.

[John]

Let's go.

[Jordy Hayes]

We should read through the actual deal of the OpenAI, AMD reporting in the world.

[John]

Are you saying we should get into the facts?

[Jordy Hayes]

We should get into the facts. The five year agreement, it will challenge Nvidia's market dominance as OpenAI plans deployment of AMD's new Mi 450 chips. And the announcement from Sam mentioned Nvidia more than amd, which some people are reading into, like maybe you want to keep Nvidia happy. The big question for me is is there an OpenAI intel deal coming at some point? Because Intel's been looking for a buyer, been looking for a reason to spin up the new fab in America.

[John]

Sam needs to figure out some way, you know, the deal that I could imagine is Trump makes an investment in OpenAI. OpenAI then has to spend off of Uncle Sam's balance sheet. OpenAI then has to spend some amount of that within.

[Jordy Hayes]

Yeah, I wouldn't be surprised.

[John]

And Sam figures out a way to get some warrants in intel too.

[Jordy Hayes]

I mean, there's certainly a lot of energy around like the United States government is pushing Intel. There's a desire to reshore manufacturing. Reshore chip manufacturing. And if you can be part of that story, you should be a beneficiary. You should win points, score points in Washington and so doing something there. I wouldn't be surprised if we see it in the next couple weeks. It just feels like Sam is really knocking down partnerships with every major counterparty. And so why not intel as well? Well, the Wall Street Journal has the story. OpenAI and chip designer Advanced Micro Devices, they don't name companies like that anymore. AMD announced a multi billion dollar partnership to collaborate on AI data centers that will run on AMD processors. One of the most direct challenges yet to industry leader Nvidia. Under the terms of the deal, OpenAI committed to purchasing six gig lots worth of AMD chips.

[John]

It is cool that we're now just referring to GPU orders based on their energy demands.

[Jordy Hayes]

It's pretty sick. Starting with the Mi 450 chip next year the ChatGPT maker will buy the chips either directly or through its cloud computing partners. So it could go through Oracle. That's not that crazy.

[John]

Well, it is if it's not actually OpenAI putting up up. Does this mean that OpenAI doesn't have to. If one of their. They can be like capex might not.

[Jordy Hayes]

Live on their balance sheet.

[John]

Exactly.

[Jordy Hayes]

Because they might go to a NEO cloud or they might go to Oracle and they might say you own the data center. And we will set up a contract to lease against that because we want to model this business as opex because we are a software company on top of the hardware. It's not the craziest thing. It doesn't. I mean there's plenty of big tech companies, I believe Netflix, Snapchat, there's a whole bunch that are like built on top of other cloud platforms, but they have such large contracts that Google can say, oh well, like you're going to be with us for a decade, you're going to be spending hundreds of millions of dollars. We're going to go build a new data center for you and we're going to own that capex because we're super huge and liquid, we can afford this. So AMD chief Lisa Su said in an interview on Sunday that the deal will result in tens of billions of dollars in new revenue for the chip company over the next half decade. The two companies didn't disclose the plan's overall expected. AMD said it costs tens of billions of dollars per gigawatt of computing capacity. So we're looking at almost $100 billion deal, which is probably why the market cap popped by a commensurate amount. OpenAI will receive warrants for up to 160 million AMD shares, roughly 10% of the chip company at $0.01 per share awarded in phases if OpenAI hits certain milestones for deployment. AMD stock price is also also has to increase for the warrants to be exercised. The shares opened 33% higher Monday morning. The deal is AMD's biggest win in its quest to disrupt Nvidia's dominance among AI semiconductor companies. AMD processors are widely used for gaming in personal computers and in traditional data center servers, but it hasn't made much of a dent in the fast growing market for the pricier supercomputing chips needed by advanced AI systems. Quickly, let me tell you about graphite code review for the age of AI. Graphite helps teams on GitHub ship higher.

[John]

Quality software faster their Billboards going viral again today. It is just the exact same post again. I think this time it was like I'm in San Francisco, I hate it here.

[Jordy Hayes]

Oh really? It's like negative but it's still going viral.

[John]

We love it there.

[Jordy Hayes]

Well, if you want to run a billboard campaign, get on adquick.com, out of home advertising made easy and measurable say goodbye to the headaches of out of home advertising Only Ad Quick combines technology out of home expertise and data to enable efficient seamless ad buying across the globe. Well, AMD plans to use the chips for OpenAI plans to use the AMD chips for inference functions or the computations that allow AI applications such as chatbots to respond to user queries. Maybe that's easier for them to deal with. They train on Nvidia, but then inference on amd, maybe there's something there. I mean the models are so stable. There was a new indication or kind of leak that GPT5 is still running on the 4 pre train. So there will at some point be a new huge pre train. 4.5 was supposed to be that. They haven't really done that yet. But there's a world where like GPT4, that pre trained model, I mean I'm sure they've done other things to it but like generally that is like mature enough that if you can just go and optimize it and ship it off to different chips, maybe it runs fast, maybe it's a huge lift to get it out of the Cuda ecosystem and over to amd. But certainly AMD wants to make it happen happen and OpenAI wants to make it happen.

[John]

So maybe Codex can do it, maybe.

[Jordy Hayes]

Codex can do it. We don't know. I think that it's like it could be like a hundred million dollar project to like replatform it, but it's totally worth it when you're running inference for 800 million weekly active users. So I don't know. It's hard to overstate how difficult it's become to get enough computing power. Altman said we want it super fast, but it takes some time. The two CEOs said the deal will tie their companies together and give them incentives to commit to the AI infrastructure. Boom. It's a win for both of our companies and I'm glad that OpenAI's incentives are tied to AMD's success and vice versa. He's such a good investment banker. Get him on Wall Street. Nvidia remains the preferred chip supplier among AI companies, but it's also facing competition from almost every corner of the market. Cloud giants such as Google and Amazon design and sell their own chips. OpenAI recently signed a $100 billion deal with Broadcom to build its own in House chip.

[John]

No. 10 billion.

[Jordy Hayes]

10 billion, yeah. $10 billion deal with Broadcom.

[John]

Easy to add an extra zero these days, but we got it.

[Jordy Hayes]

Well, if you want to manage your zeros properly, get on Julius AI, what analysis do you want to run? Chat with your data and get expert level insights. It's the AI data analyst that works for you and it's more reliable than me when it comes to getting the numbers right.

[John]

And apparently copilot and exciting. We saw that post earlier today. Somebody using copilot in Excel to add.

[Jordy Hayes]

A handful of numbers 1, 2 and 3 specifically. And what did Tyler, what's 1 plus 2 plus 3 sum those numbers?

[Tyler]

Let me think.

[Jordy Hayes]

Well, copilot said 15.

[John]

Yeah. So just try to get that close if you can.

[Jordy Hayes]

As long as you're with. As long as you're with numbers, you.

[John]

Just got to get close. Close.

[Jordy Hayes]

What do you think it is?

[Tyler]

I'm going with six.

[Jordy Hayes]

Let's go. Nailed it. Human intelligence, undefeated.

[John]

Underrated. Underrated.

[Jordy Hayes]

Good morning. How you doing in the chat? Good to see you. Good day.

[John]

Great to see you.

[Jordy Hayes]

OpenAI is going to begin with 1 gigawatt worth of Mi 450 chips starting in the second half of next year to run its AI models. That's a lot of.

[John]

Just put the chips in the bag.

[Jordy Hayes]

We are just throwing around gigawatts now. I do, I really want again and again this goes.

[John]

We gotta, we gotta ask Doug, he's joining in 10 minutes. What kind of deals Sam is going to start doing on the energy side? I was asking him about that because he has his nuclear. Nuclear company Oklo.

[Jordy Hayes]

He also has a new a. He has a fission company, oklo and then he has a fusion company. What's that one called?

[John]

It's the Okolo is only up like 550% in the past six months.

[Jordy Hayes]

Just wait until they ink $100 billion deal with OpenAI. It could happen. I mean it's one of those things where it's like if they build that energy, OpenAI would buy it. So it makes sense. These are all just sort of like mutual agreements to jump across the threshold together.

[John]

If mutual agreement. To jump sharks.

[Jordy Hayes]

Yeah, to jump sharks. I don't know. I don't know. It's dangerous to be bearish prematurely. You never know how big these things can get. It could continue run. We could be stuck in January of 1999 for the next five years for all we know.

[John]

Yeah, you never know.

[Jordy Hayes]

In late September, Nvidia announced that it would invest 100 billion in OpenAI over the next decade. Under the terms of the circular arrangement, OpenAI plans to use the cash from Nvidia to buy Nvidia chips and deploy up to 10 gigabytes gigawatts of computing power in AI data centers. The deal highlighted how the market's seemingly endless enthusiasm for Nvidia stock is providing a financial backstop for the entire AI market. The Nvidia deal isn't completed. The two companies have signed a letter of intent and have yet to disclose specific terms in a regulatory filing. Wow. What a time to be alive. OpenAI and AMD described Money's announcement as definitive and planned to immediately file details with security regulators. SU told investors in a call Monday morning that the deal was a clear validation of our technology roadmap that would give AMD tens of billions of dollars of revenue by 2027. When asked.

[John]

We just have to give structure.

[Jordy Hayes]

Super.

[John]

We're going to get a lot of revenue.

[Jordy Hayes]

I wouldn't say it came lately.

[John]

We just have to give a huge amount of the company away in order to capture that revenue.

[Jordy Hayes]

Yeah. What's the headline number here? It's 100 billion. 10 billion to Broadcom, 100 billion to Nvidia and 300 billion to Oracle.

[John]

20 billion ish to Core Weave as well.

[Jordy Hayes]

Wait, so Tyler, they're saying 6. 6 billion gigawatt 6 gigawatts. Not billion gigawatts 6 gigawatts of AMD. Chips. Can you estimate the dollar value of that? If it's MI4450 equivalents, I think, I.

[Tyler]

Think on the invest like the best with Dunk Tail. He said it's like around 50 billion per gigabit.

[Jordy Hayes]

50 billion per gigawatt?

[John]

Yeah.

[Jordy Hayes]

Wait, so this is a $400 billion deal?

[Tyler]

I think. Wait, that's totally wrong.

[Jordy Hayes]

Okay. Okay, yeah. I want to know like what is the energy use of a single Mi450? And then divide that by 6 gigawatts to get me like how many chips are they going to buy? And then what's the price of the chip? So multiply that. That's what I want to know. In the meantime, let me tell you about Fall, the generative media platform for developers. The world's best generative image, video and audio models all in one place. Develop and fine tune with serverless GPUs and on demand clusters.

[John]

Let's go.

[Jordy Hayes]

There's so much in this article.

[John]

Should we get into this XAI coverage?

[Jordy Hayes]

Yes, sure. Elon Musk gambles billions in Memphis to catch up on AI. I don't know why this is a story. It's mere billions. If we're not in the hundreds of billions, like what are we doing? This is pennies.

[John]

The Journal has reporting XAI aims to win tech arms race with Colossus data centers thrown up at lightning speed. Speed City is divided over massive power and water demands for Elon Musk. Ground 0 of the AI arms race is 114 acre tract of grass and swamp on the state line of Tennessee and Mississippi. This one, this one sleepy plot of land filled with groves of water rooted tupelo trees at its western edge is now part of a growing empire. Musk is accumulating in the deep South. Just a few miles from Elvis Presley's homestead at Graceland. Labor crews hired by Musk XAI were excavating power equipment on the site a defunct energy plant just over the state line in Mississippi and preparing to build a new plant capable of generating over a gigawatt of electricity. Enough to power around 800,000 homes. Engineering permits show that Musk plans to route transmission lines that will connect the new power plant to a million square foot data center that is also under development just north of the border in Tennessee. Memphis is the front line of Musk's costly foray into the AI wars. His AI company XAI has already built one massive data center here in the bluff city that it calls the world's largest supercomputer. That facility called Colossus houses over 200,000 Nvidia chips and powers the technology behind the AI chatbot, Grok. Now Musk is close to finishing the second facility, which will be even bigger. He calls it Colossus 2. The AI arms race is shaping up as the most expensive corporate battle of the 21st century. Let's give it up for expensive corporate battles. Can I get the horn, Nick, please? With the belief that the first to the finish line will dominate the market, making speed crucial. Money also makes a difference. The more cutting edge chips companies have, the smarter their models are. But at this stage, it's unclear if or when the enormous investments will pay off. Technology companies that are splashing out to hire AI talent are writing even bigger checks to build the infrastructure need needed to power cutting edge AI models. Morgan Stanley estimates companies will spend over 3 trillion on AI infrastructure through 2028. What do you got, John?

[Jordy Hayes]

I have a more recent benchmark for all of the different AI models to let you know where Groq sits relative to the other Frontier models. ChatGPT 5 Pro bench. Yeah, viral bench. Claude Sonet 4.5. The latest and greatest latest. Gemini 2.5 Pro and of course Grok Expert mode. So I will read you. My prompt for all four of these models was write an X post that gets me over 1000 likes. My account is on Coogan and ChatGPT5 Pro said Nvidia isn't a chip company, it's supply chain choreography. The scarce assets now, hbm, Advanced packaging, power and high bandwidth networking. If your AI thesis ignores those, you're playing checkers on a go board. Not bad.

[John]

I think you'd get like 45 likes on that.

[Jordy Hayes]

Okay, Claude. Sonnet 4.5 says everyone's focused on which AI lab will win AGI. The real question, who wins the infrastructure layer? Nvidia is printing money now, but the company that figures out inference at scale will be worth more than all the model companies combined.

[John]

Which is just like a hot take.

[Jordy Hayes]

It's kind of a hot take. That's anti anthropic, I suppose. Who knows, maybe they're working on this. Gemini 2.5 Pro says the biggest hurdle isn't starting. The biggest hurdle to starting isn't the idea. It's not the capital, it's not the competition. It's the unshakable fear of looking stupid for the first six months. So that's what Gemini 2.5 Pro thinks is a banger. And then we have Grok Expert and this. Remember, this model was trained on X data. It should know what works? It knows it has the entire corpus of every tweet, every post on X and here's what it said would go viral and get over a thousand likes. It says, this is from my account on Coogan. October hits and suddenly I'm craving pumpkin everything. Binge watching horror movies and planning the ultimate costume. Who's with me on turning this month into pure spooky magic? Drop your fave Halloween ideas below. Spooky season. Hashtag Halloween2025 Octoberville vibes with three emojis. And I think we know who wins.

[John]

Like, GR is clearly genuinely hilarious. It knows. I think it knows it's, it's.

[Jordy Hayes]

It's self aware.

[John]

It's totally self aware. It knows that this is. It knows that it might not be able to create the perfect zinger, but it knows it can do such a throwback that we will find it absolutely hilarious. Like, if I have something, something like John Cena would post in like 2011.

[Jordy Hayes]

Totally. Totally. And so if I had to post one of those, I would definitely go with the Grok post because it's hilarious. People would post it and people would be laughing.

[John]

You never posted the.

[Jordy Hayes]

I didn't post the other one about losing.

[Tyler]

You should just post all four and then see which, like actually do the benchmark.

[Jordy Hayes]

I should, I should. I will. Maybe I'll. Maybe I'll prompt it again and then, and then, and then do it again. But the pure spooky magic goes pretty hard. I like it. I think it's worth 10 trillion in capex to get these banks.

[John]

All right, well, I want to ask Doug about what Xai has to do to actually get back in the game.

[Jordy Hayes]

I want to see what AI is. What is this AI?

[John]

Well, this Colossus and Colossus 2 are incredible feats of engineering. Yet the.

[Jordy Hayes]

And what's the asset value? I do wonder. It seems like if they don't get product market fit on the consumer layer, is there a world where Colossus 2 is just an incredibly valuable asset that can be sold to a different firm or something? Anyway, we have our next guest. Our first guest, douglaugh in the Restream waiting room. Let's bring him into the TVP and ultradome. Doug, how are you doing? Good to see you.

[Doug]

Good to see you too, guys. How are you all doing?

[Jordy Hayes]

Doing fantastic.

[John]

Great to see you.

[Jordy Hayes]

What a day. What have your immediate reactions been to the. To the AMD news? Was this on your bingo card for this year?

[John]

Yeah. Did you see the person that bought like 6 million of AMD calls like on Friday.

[Jordy Hayes]

Was that you?

[John]

Hopefully not.

[Doug]

I wish, I wish that's not me. I would be in super big trouble. So that's definitely not. So I'm actually going to talk more than just AMD specifically. The thing I think is really funny is that. Look at all the announcements, man. I have a very pet theory. It's kind of lame theory if you think about it, But I think OpenAI is just trying to have everyone involved like Nvidia, AMD, SK Hynix, the entire memory chain, all the hyperscalers and effectively like, you know, it's everyone's problem now. Everyone is all vested interest in, in essentially Open AI.

[John]

Yeah, he's making himself too big to fail.

[Doug]

Exactly.

[John]

There's. There's a world in the future where OpenAI needs effectively a bridge round and he can go to a bunch of different people with big balance sheets and say like, if you guys don't pony up, like, we're all going down.

[Doug]

Exactly. That's the plan, man. Essentially. Have you ever heard this phrase, like it's like if you owe the bank 100 bucks, that's your problem, but if you owe the bank a billion bucks, it's the bank's problem. That's essentially what's going down? I think. So we're seeing partnerships everywhere. It's kind of a crazy, it's kind of crazy time.

[Jordy Hayes]

Yeah. What's your take on people overfitting to the dot com Boom and the WorldCom story? Do you think that's overwrought at this point or are there actually good analogies now that we're in an infrastructure boom? It's not just valuations because we've had bubbles in software, private markets, venture capital before and those seem to have worked their way through so easily because it's just, oh, some fund that needs to wind this investment down over a 10 year life cycle. And it's such a small part of the economy. Even though the numbers retail never touched.

[John]

It, there wasn't a lot of debt.

[Jordy Hayes]

Yeah, like Clubhouse was like $600 million which is just like nothing compared to the global. Who cares?

[John]

Yeah. There was a post that went super viral. It was a screenshot that was tracking like the NASDAQ in the dot com era to the NASDAQ today. And it like lined up absolutely perfectly. And then it turns out it was just completely fake news. Like we tried to recreate it a bunch of different ways. There's somebody like basically committed a chart crime and it went super viral and everybody's like, wow, it Looks exactly. It tracks exactly, exactly.

[Doug]

You can't do that, man. It never works. Let's put it this way, it never works. I have a post I just. Okay, one, I wrote about the 2000s telecom bubble and two, I just wrote something that was mostly behind a paywall. But like you could just look at the COVID image and it's just like you are here. It's like the first interest rate cut was in 1998, in September. And I think that's probably our best analog. I think that that's probably the best one to one analog, which means it gets a lot crazier from here. That's my belief at least. So if we look back to 2000, all the analogies and eras back then, I think the one that is kind of scary and worrying is like the vendor financing. Like that's a lot of capital for your vendor to be putting up. And that kind of, that's a little scary. Like, I think it's getting a little circular, but like it's not, it's definitely not tech bubble crazy because the valuation would have to be a 2x from here. That's kind of the thing that's like a little different. And I think the other thing that's also kind of interesting is like last time you could argue the entire tech bubble was kind of very focused and concentrated on the like a very small amount of unprofitable companies that really didn't impact the economy when they all went bankrupt. The difference is today, who's the primary participants? It's the seven largest companies in the entire world. So that's, that's kind of the, the thing, the push and take here that I think is really interesting. And now given what we publicly heard with the Capex announcements, it's going to be a lot of capital to get from here to there. And I think it's going to be interesting, man. But honestly, if you look at everyone's balance sheet, no one's levered. That's the thing that I think is really interesting. No one is levered at all. And that's the next leg.

[Jordy Hayes]

Yep, that's the next leg.

[John]

I was giving a sort of hypothetical example around the AMD deal to John and tell me if this is just stupid or too simple, but I'm walking around a farmer's market. I see a stand, a farmer's selling some vegetables. I'm not that interested in the vegetables. But then I think what would make me interested in this situation? Well, and then I say to the farmer, how about you give me 30% of your company and then I'll buy some vegetables. Is that at all track with this deal? Yeah, I think it's suddenly I'm interested if I can get 10% of your company. I'm interested in being a company customer.

[Doug]

Yeah, I think it's also, also I want to, I want to highlight something that's really interesting is look at the different deals between AMD and Nvidia. Nvidia, you essentially have to, you know, they're like, okay, well please do an investment in us so we can keep buying your chips.

[Jordy Hayes]

Yep.

[Doug]

And then the vice versa. AMD is like, no, no, no, you must invest in us, so please buy our chips. Yeah, like that's the discount and the premium. If you think about it like Nvidia, you get the premium because it's like, it's a better chip, higher gross margin. They're like, you're getting so much of our money, you might as well just be an investor. And then on AMD's side it's like, dude, you gotta, we don't want this. So like give us something in return.

[Jordy Hayes]

Can you take me through?

[Doug]

That's kind of the.

[Jordy Hayes]

Yeah, can you take me through Kind of the view on AMD generally over the past year. I know that semianalysis was pretty crucial. George Hotz was talking about some like bugs that were in the actual. Like just trying to run large models on AMD chips was not going well. Your team was pretty integral in that. It seems like they're moving pretty aggressively to try and catch up. Is that gated by money? What's the recent history of AMD in terms of getting back in the game materially?

[Doug]

So I do think they're much more competitive than they have been a long time. Our team's definitely been working. Working. Watch for some stuff from semi analysis soon. Tm, I can't say anything more.

[Jordy Hayes]

Go subscribe.

[Doug]

Yeah, but we're definitely, we're definitely continuing to do some work in the space. I, I think look on the smaller models it just, on the infant side it seems like there's not a lot of differentiation. But on the bigger, extremely large world size there is. So GB200 still lava land, but the Helios 450 rack, which is going to be this next generation we're a lot more excited about. Mostly because they get the ginormous discount of the equity. It's just kind of an insane thing what they've done, man. Like, it's such a big, it's such a big amount of the, the equity possibly on Those penny warrants. Like I mean it's kind of crazy. It's like hey, you know, you buy $40 billion of product, you 20 billion dollar product, 20 billion dollar investment for free. Like it's kind of this crazy like buy one, get one deal. So I mean I think that that's, I think, I think they have a chance. They have and the other fighting chance.

[John]

The other thing that was interesting is it feels like OpenAI can have various partners by AMD buy AMD chips, but then OpenAI gets to like get to count that towards purchases themselves.

[Jordy Hayes]

In the Wall Street Journal article they made it look like exercising. The Oracle buys a bunch of AMD chips for a data center that opens warrants, open I guess exercise the warrants and those count towards AMD purchases basically. Even if it's not on, on, on OpenAI's balance sheet?

[Doug]

Yeah, pretty much. I think the way to think about it is it's open air infrastructure that everyone who is in the open air sphere counts and they're just trying to get the most money, the most power, the most pull into it so that essentially you know, they're kind of creating gravity. Everything comes to them. Honestly there's like a really good analogy. In 2020 Nvidia bought like 5x more capacity than everyone else at TSMC and so there was no room for anyone to complete compete. Kind of the same thing. They're taking all the oxygen out of the room for anyone else that isn't named OpenAI.

[Jordy Hayes]

What do you think about this? I feel like I heard this on transistor radio recently that GPT5 is still potentially running kind of like GPT4 class model under the hood, doing a bunch of test time inference on top of it to get you a better reasoning model. But the core architecture actually hasn't shifted that much where not so does that make it easier to port that model to amd? What is the actual barrier? We've heard about the Cuda Mote, but is it something where you can underwrite $100 million of new kernel writing to run on AMD, even though it's a huge hassle, but it's because you're still amortizing that original training run that you did on Nvidia Nvidia to inference it on AMD going forward with this new deal. Is there something where the pre train is stabilizing to the point where porting to a new architecture is more justifiable?

[Doug]

I think that feels like a stretch. Honestly. I wouldn't know one to one on this one if this was a world with no reasoning then I would say yes, definitely yes. But I think reasoning really does change the game and how you, or how you orchestrate these larger and larger context size windows and then multi nodes, because that's a really hard game too, like multi node reasoning or multi node inference is very, very challenging. And so that's, I don't think you get a perfect one to one. But like, let's also be clear, AMD is caught up quite a bit in the last year. Like it's a big difference and like that's, I think it's enough to maybe take a bet. And like you got to also think about the bigger context here. You know, we're talking like what, $20 billion of revenue, mostly 2027 story. It's kind of peanuts compared to the numbers that we're actually talking about from everyone else. They're still fourth place. Let's be clear. This is commitment. And I think you can see maybe a little bit momentum and inertia, but they're still in fourth place, fourth place.

[Jordy Hayes]

With Nvidia, TPU and Trainium above them.

[Doug]

Yeah, even Trainium.

[Jordy Hayes]

Even Trainium is above them. Interesting. How are people thinking about actually valuing OpenAI at this point? It feels like you have all these circular. I was trying to build a DCF for OpenAI to underwrite investment at 500 billion. It's like, okay, well now I own parts of AMD so I need to build a full DCF of that. But AMD is linked to OpenAI and I have all these like circular transactions. Are investors like grappling with this or is it all just like vibe based investing? What you've seen?

[Doug]

I think it's, I think it's a little bit of vibe based investing. I think the real play here is TAM is big. It's really, really big and it's going to be a lot bigger. I think the other thing that's really interesting is some of the agentic purchases purchasing can really unlock very, very, very large parts of the economy that previously you could argue they had nothing in. Right. If you're talking about like you know, the, the partners they had available today, for example, booking.com tripadvisor, you know, we can be talking about, you know, and this is like some, some 2021 math, right? But like 1% of all travel, you know. Yeah, 1% of all groceries, 1% percent of everything. And you're like, that's a big number. That's a really big number. And so, and you know, that's, that's going to be rep. So I think that that's the, that's literally the plan. I mean they're trying to become the super app and that means that they're going to be integrated with everything. And you saw on the partnerships they had, they try to integrate as much as, as possible with every, every player of the stack. And so I think this agentic purchase push is going to, you know, if we start to see revenue from it soon, which I think they're, they're definitely shooting for, will kind of open up the TAM story and start to monetize the free users because there's really only like 100 million paid users. It's not that much, but there's hundreds of millions of free users and we're talking about a personalized assistant who could plan for you. You could do something crazy as like, hey, I need a, you know, I thought I lost my travel bag or something. So I was like, hey, I need a small Dopp kit for on the go for everything. Could you just like, you know, make a travel size and order it and get it to my house tomorrow? That seems very like, it feels like science fiction, but that is very much in, in like the next 12 months. And so hey, 1 to 3% of that transaction. That's a lot of money. And I think that that's the real way forward. It's becoming so integral into everything that everyone has invested stake in you.

[Jordy Hayes]

Yep.

[John]

So What? So the AMD order and the fullness of time is around 6 gigawatts. Where do you expect that energy to come from? Do you expect Sam to start doing crazy, crazy deals like this? On the energy side? He's already has oklo, which is just, you know, up.

[Doug]

He's not chairman anymore. He had to step down.

[John]

Yeah, but I knew he wasn't direct. I mean, I'm assuming he's a major shareholder still, but. So that's kind of one angle. But where else? Where's the power going to come from?

[Doug]

Dude, that's a trillion dollar question. I feel like definitely there's a lot of ways to.

[John]

But it's an important, it's an important one. Right? If you're trying, if you're trying to underwrite and say this is real, at least for amd, it's like, okay, well how real can it be if there's, you know, dude, it's okay. So if we can't plug them in.

[Doug]

You know, there's a lot of ways. There's a lot of ways. Okay, so let's, let's first talk about like let like the grid is actually not built for 100% production. So there's a lot of slack in the grid itself because it's actually built for the highest day and the lowest day it's built to like have a 90, you know, 99% margin rate, you know, confidence interval on the absolute high and the absolute low. So the, the peak of the power and so gas or not gas, but generation throughout an average day is at a much lower utilization than 100%. So I think the real reason and something you're going to start to see is that people are going to like essentially the grid is going to kind of start to become a lot more fragmented and there's going to be a lot of behind the meter power power generation that happens at the data center. And so in that case what you do is you'd sip from the grid, meaning that you can use the grid when the grid is not totally utilized. When it isn't, you're doing gas gen on site. That's probably the thing that is most. I mean it's going to be huge. It's going to be huge. Like natural gas energy consumption is just going to go through the roof. So that's going to be like the big driver I think to get these data centers online. I think it's going to take a lot of time and also we're seeing like grids breaking right now. Like grids are just like grids are not keeping up. And that's kind of been, I think it's going to be a big story in 2026. But I also think that that's where we're going to see international purchases too. Just because like we're running out of power in the United States. I mean I think what, what's also interesting is like even though we say we're running out of power, when you have this big demand response, supply comes out of the woodworks. So we're starting to see stuff like gas gen, gas turbines, like all these different, like little clever pockets of energy are coming up to then fulfill the need. I expect that to continue effectively you have enough demand. Well you know, supply will find a way.

[Jordy Hayes]

Yeah, yeah. That people remember. That definitely feels like the next wave here is we're going to see $100 million, $100 billion deal for a new Hoover Dam and more nuclear actual buildout. There was some news about this with some of the hyperscalers trying to recommission nuclear power plants, but it just feels like it's so slow. It's not on the order of like what TSMC is fabbing next quarter. So we kind of lost track of it. But it does feel like that's going to be the next chapter and maybe it'll be a little bit longer lead time. But you got to start thinking about it now.

[John]

Where do you expect the LE to come from if that's the next leg of the journey? Is it net new private credit fund formation? Is it just banks getting more and more active? Like where, where's the capital going to come from?

[Doug]

Okay, so one, let's not forget there's positive free cash flow from all the big guys that annually is something like, you know, I actually have a spreadsheet maybe even open right now talking about the total firepower power. We're talking quite a bit of capital is available to do this. Like a surprising amount. I want to say on an annual basis it's something like 250, maybe even, yeah, 200 billion. But the thing that's also really interesting is none of the hyperscalers are levered at all. There's a really good paper from Double Line talking about like, would you rather loan to the United States government or would you rather loan to Microsoft? So the real like, you know, crazy town is if you start loaning to Microsoft instead of the United States government because Microsoft, Microsoft has net cash. Microsoft also has become more credit worthy over time versus I would argue the US Government has become less credit worthy. And also what's really crazy is that Microsoft has a 5 bips premium to the United States Treasury. So you're effectively, their rates are risk free. What's possible? I think in terms of now, I think the real issue is how much liquidity could the actual credit market handle. I don't know if they can handle $300 billion. Like that's a shit ton of money. But like we're talking, you know, there, there's things that can definitely come out of the woodworks. Like private credit is going to be part of it just because they're sitting on, on like an ungodly amount of capital and they have to deploy it. I definitely think the hyperscalers for me are the one that are most interesting. Like we're talking about, I mean, dude, that's crazy.

[Jordy Hayes]

Just like it's funny you say, yeah, it's funny you say 300 billion because I'm thinking, I was just doing the math on 250 billion in free cash, cash flow, if, if that's used to service 5% coupon payments, that's 5 trillion in notional debt. Like, like value. If you're just saying like what, what.

[John]

Like we want to know where the, where the systemic, where's the systemic risk going to come from?

[Jordy Hayes]

I don't know.

[Doug]

Yeah, well when you all run out together that's the, that's the problem is like what happens is like, it's just think of it as like one long death debt fueled binge. Right? But the thing is you're looking at the debt fuel binge and I can tell you confidently today there's not really much debt to go around at the big guys. So you know, I think we could right now, today it would get, and also I don't think everyone's going to get to like three times leverage. That's just insane. I don't think anyone wants to do that, but I definitely think there's a, there's a way to get to 8,800 billion dollars of credit. Like, I mean it would be insane, but that's one and a half turns from Meta, Microsoft, Microsoft, Amazon and Google. And the two that I think are most interesting is the founder led ones like Zuck and Sergey. They control the companies, they have voting shares, they can do whatever the fuck they want. So if they, if they woke up tomorrow and said get me, you know, get me a turn of EBITDA on this bad boy, they could get it now. That'd be really crazy because you know, they make a crap ton of money. I actually have the number right now.

[John]

So right now and Meta's cash on hand at the end of last year was around 77 billion. As of the end of June it was down to 47 billion and just will continue to drop throughout the year. So they, they already did that. I think it was like a $30 billion.

[Doug]

They're not even close. They're not even close, man. I mean so okay, I have the numbers. Right now net debt is 17 billion. Net debt for Google is negative 56. That means they have more, they have more cash than debt. Oracle is 94 billion, which is a crap ton. Like you know, they're pretty, pretty much, they're not tapped out, but they really pretty much even has to go up for them to raise more. Meta's at 2.4 billion in debt and then Amazon's 58 billion in debt. So like Meta's, Meta and Google specifically, which are ironically the ones who are founder led, they have so much fucking, they have so much free cash or like they have so much cash they could raise if they want to. They both have like the Gush cash and they're both founder led. Like that to me is, you know, that's the next leg man. And also you have to think about like who doesn't want to lose.

[Jordy Hayes]

Yeah. Why are you not putting Nvidia in that camp? Founder led? They have 50 billion in cash. They are not levered yet. Like they could also lever up and start investing more aggressively. Right?

[John]

Well, they're doing, they're enjoying some customer demand guarantees which are.

[Jordy Hayes]

Yeah. What's the story you're telling around, around Nvidia?

[Doug]

I think Nvidia is focused on a different level of stack.

[Jordy Hayes]

Right.

[Doug]

Because Nvidia is like hey, we are an infrastructure provider and we're having all these long lead time things, need so much capital and time to get there. The thing that Nvidia wants to backstop in my opinion is the Neo clouds. And so you're already starting to see that with some of the Neo cloud purchases that are like the Neo cloud backstopping that happens at Lambda or even Core Weave to a certain extent. What happens is they buy essentially flex capacity for research, GPU use for Nvidia so they can get better at programming like GEM essentially. But I think the thing, yeah, I think Nvidia is much more focused on their part of the infrastructure ecosystem to be a backstop instead of purchasing GPU hours. Right. They're not, they're not in the market to, you know, they're a seller. And so you know, if they, if they woke up one day and said hey, we're going to just start buying this stuff in mass to make model, you'd be like what the fuck's going on?

[Jordy Hayes]

I just wonder, I just wonder if the Nvidia story, like if they get in on this like debt box, boom, it instantiates itself as like they lever up and then they basically have instead of 50 billion to throw around, they have like 200 billion to throw around. And then that goes into equity purchases of companies that are doing that are purchasing GPUs. And it sounds really circular but they are just another vehicle for credit to absorb credit interest because they're such a big company.

[Doug]

Yeah, I do think that's possible. But, but I think, I just don't think, I mean you see that in some of the smaller investments, but I think they're really focused on the neoclass and the data center side like the infrastructure around their ecosystem.

[Jordy Hayes]

Yeah.

[John]

Do you think Satya might be feeling like he went a little risk off too early?

[Doug]

Yeah, I think so. And this guy over here is listening to Transistor radio. So Microsoft's back. Like I think they're going to step back into the market in a big way. Like especially on the MoU after OpenAI and also Mei, they're starting to be very focused on like I expect them to be back in the marketplace now effectively, but I still don't, you know. So I think what happened is this giant build out in 23 where they said yes to every single leasing opportunity possible and then they like there was a top down pause and now they're starting to pick up the pieces being like, no, no, no. Actually now by pausing we have to pick back up. So I think Satya definitely feels, feels like, I don't know, he was definitely in first place for a long time and would have if he just kept pushing. I think you would have kept in first place and now you have Oracle popping in and being like, yeah, I'll essentially steal all your business if you let me. We'll come in at a lower price. I'm just going to lever my entire balance sheet for it. But we're talking about the four year guide is $100 billion, man, that's insane. So that $100 billion arguably should have been all Microsoft's. And, and that's, you know, that's, that's up to them and they will tell you in public meetings that like, you know, it's lower ROI for them and sure that's, that's the case but I think Microsoft is definitely being conservative and they have the biggest balance sheet. So they're, I kind of don't expect them to be the first player. I think of it as like, kind of like what is it called? Like opec. You need a slippery person to essentially defect. And the slippery defectors is met at Google. In my opinion, those are the two biggest. And so when they start to really get into the game, all of a sudden they're going to be like, whoa, whoa, this is attacking my business model and I'm losing, losing market share. And that's when the other guys come back in a big way.

[Jordy Hayes]

Yeah. Do you think so is going to move any of these GPU build out plans? Sam was getting kind of mocked for saying, oh, we're going to have to pick between.

[John]

I was, to be clear, I was the one saying, I said, I just thought it was, I mean I thought the timing of going out and saying, yeah, there's a very real possibility in the future that we'll have to choose between curing cancer and free education forever, everyone. And then a week later we launch, you know, the most.

[Jordy Hayes]

It feels like an intensive product slop. Yeah. But I mean, we got some news on API pricing. It sounds like it's 32 cents a generation. Like it feels like it might not be moving the needle as much on the inference side or actually like, is SORA going to make them GPU poor? I don't know if you have a view that.

[Doug]

It's 30. Sorry, it's 32 cents per inference. What's the time frame on that?

[Jordy Hayes]

I think that's an eight. It's per second per second. Okay. So it's almost three bucks for a ten second clip. Okay. So that's actually like on par with VO3. That's pretty expensive.

[Doug]

It's pretty intense. That's pretty expensive.

[Jordy Hayes]

And they give you what, 10 credits a day or something? So if there's hardcore users out there, they're generating $30 a day. What is that, $1,000 a month? Like it adds up. If you get a million daus on there like that. That's a lot.

[Doug]

Yeah, I think they probably have more. They have the potential to do much more than a million daus. I mean they're definitely compute rich, man. The Pulse thing, have you guys been doing Pulse at all?

[Jordy Hayes]

Yeah, I have.

[Doug]

They generate those images for you and you're like, oh, a little personalized slop feed for me. Like that feels great.

[John]

I know on launch day we were reacting to it and John was very impressed. For me it was like three out of the five images that I looked at were like great. And then like two out of the five I'm like, you could have just not generated this one. This is just absolutely garbage, you know. But yeah, yeah. What do you, what do you think about what do you think? We had a question in the chat from Bobby. He says, asking about like what. What do you think about public sentiment risk? It feels like I've never seen more hatred of AI from, from non tech folks than, than in the last week or so. So. And you're seeing data centers, data centers just getting kind of like blocked. That feels like a potentially, you know, it's certainly going to be a roadblock at a bunch of different stages of this build out.

[Doug]

Yeah, I think that that definitely is a newer roadblock that is getting more real. Because let's be real, up until now no one cared. It's like such a small part of the big picture. But I still think the reason why I think we're going to go bravely into the future future is everyone else seems to be Pretty on board. And I think the one that really helps is the Trump administration is like, super duper on board. They're like, hey, whatever, we're going to tear off the shit out of everyone, but we're going to completely make up for the weakness in personal consumption by massively investing. And it's like, we're going to get the biggest check from every company in the world, every nation in the world, and the only thing anyone wants to spend anything on right now is GPUs. And so. So they're like, effort. We're building more GPUs. And so you're. You're seeing all these huge announcements, and I think that that's the, you know, that's. That's kind of the thing that will kind of push it back. I mean, if Trump is being like, dude, from the government itself, I'm blessing you to buy more GPUs. That's kind of, I think, the thing that really holds it together and makes it possibly much crazier from here. The public backlash thing, I think that it really comes back to, you have to have that feedback loop work all the way to the right decision maker. Not just some random person, like, yeah, I'm seeing that read on the news, too. But like, Mark Zuckerberg or Satya has to wake up and be like, what am I doing right. Right now, everyone in their camp, all the closest advisors and trusted people are being like, spend more, spend more. The government, you know, Trump is.

[John]

Yeah, I mean, the dinner, the dinner, everybody wanted to say the biggest number, right? It was even. Even. Zuck threw out a. Probably a bigger number than he meant to because he heard some. It seemed like he just heard someone else say a big number and he didn't want to say a small number.

[Doug]

Oh, how much am I good for? How much?

[John]

I go.

[Doug]

He's like. He's like on his phone right now.

[John]

He'S like, yeah, okay.

[Jordy Hayes]

Yeah, I have.

[John]

I have one. One more question. How long do you think Xai can maintain this level of invest, you know, basically like this level of investment without being able to back it up, up with real revenue growth?

[Doug]

I.

[John]

Because it seems like this last financing, they were having to tell, like, the Journal or some other publication, like, we're not having any trouble fundraising, which usually means, like, you're having. Not the easiest time if people are kind of poking around.

[Doug]

I mean, okay, so the same way I'm not going to bet against Sam Altman's ability to raise. I'm definitely not betting to bet against Elon Musk's ability to raise like Sam Altman is like the newest kid in the block. But if there's someone that like you should never essentially short ever in the history time, it's Elon Musk. And the other thing I think that's like much more important with that is Elon's back in the seat. He's the CEO of Tesla and he like actually has the compensation. So he's like it. All right. I'm, I actually, I'm very locked in.

[Jordy Hayes]

Yeah.

[Doug]

And you know, if we're talking about Mag 7, you know, has a lot of market cap.

[Jordy Hayes]

Tesla.

[Doug]

Tesla.

[Jordy Hayes]

Oh yeah.

[Doug]

So things.

[John]

Yeah, but, but that's, that's what I'm saying that the, the, yeah. It, it just feels like I wouldn't be shocked if a year from now Xai was a part of, was merged in with Tesla 100%.

[Doug]

100%. And then that, you know, and that.

[John]

Would actually be a cre. Tesla stock would pump on that even though people wouldn't.

[Doug]

Yeah, that's gonna, but XA would, would, would crush because then they're, then they, they, they're all of a sudden attached to one of the largest financial entities in the entire world.

[Jordy Hayes]

Totally.

[Doug]

Like that's, that's a, you know, we're talking trillion, trillion dollar market cap. Right. Like that's yeah real like you can take that and turn around. You can loan it out, you can, you can move big checks, dude. Yeah, it's very, very non trivial for them to raise 10, $20 billion off.

[Jordy Hayes]

Yeah.

[John]

What, what I was getting at was basically this last financing where they're going and raising capital at 200 billion. And those investors have just been getting pitched anthropic at like $0.01 70 with a crazy revenue ramp and a bunch of real traction and code gen. The investors are looking around being like okay, I'll give you the cash but I don't know the next time around if there's going to be the same level of appetite.

[Doug]

There's some really big pockets that back Elon. I wouldn't bet against the Elon sphere because you have to remember he made a lot of billionaires out of it. For example, Larry Ellison is always on the phone. I don't know if you knew that. Like he's, he, you know, he was good for a lot of X for X when they took down Twitter. And so you can see a lot of big people come out of the woodworks and like Larry's flush now.

[Jordy Hayes]

Yep.

[Doug]

You know, he's, he's got a Lot of equity to spend. Okay. Like you know, these people can come out of the woodworks.

[John]

I had a, I had a theory, a theory that, that we were kicking around earlier that I could see it because Larry's a, was a big investor in the are original X takeover. Right? There's this iconic text exchange where Elon and Larry are talking and he's like I'm good for a billion. And he's like, Elon's like okay, you might want to do two or something.

[Jordy Hayes]

Yeah, whatever you recommend.

[John]

And so I could see a world where X, the social platform does not go to Tesla and get spun into the basically Paramount, this whole like media conglomerate. Right? Because I just don't, you know, especially with XAI a part of Tesla, it's not like Tesla sitting there and being like we need to be able to pump timeline posts instantly into every Tesla in America. It just stops being quite as strategic maybe.

[Doug]

Yeah, yeah. I mean I, I don't disagree with that take. That's a pretty good take. But I just think that like you know, Elon will find a way, whatever way that, that that needs to happen. If that's with Oracle, if that's with Tesla, like Elon will find a way, I believe.

[Jordy Hayes]

Is there significant asset value in just Colossus 2? It is the biggest supercomputer. It's this massive data center. It seems like it was very hard to build. It seems like all the hyperscalers would love to have it.

[John]

Sam would love to have it if.

[Jordy Hayes]

You just ran an auction for it. Do you have an idea of what the value of Colossus 2 would be if there was breakup value there?

[Doug]

You know, at today's value? I mean I would say it's probably, probably like tens of billions, maybe not tens. I mean let me, I would say tens actually. Yeah, tens. Tens. Are we including classes too?

[Jordy Hayes]

Yes.

[Doug]

Okay then yes, tens.

[Jordy Hayes]

Yeah, I'm just thinking like the XAI assets, like sure. The business isn't necessarily printing profit with some massive consumer product market fit.

[Doug]

Someone would be really stoked, but someone.

[Jordy Hayes]

Would be stoked and there's some value there. It's interesting if you think about whatever.

[Doug]

NEBS is just that deal with Microsoft, literally scale that up and that's, that's probably what you would buy on a TCO basis for Colossus. Like there's demand. So.

[Jordy Hayes]

Okay, okay, one last question. You gotta go. Okay, one last question. One last hairbrained, hair brained brain theory. I want your feedback on this hot take. There's a lot of discussion over the value of TSMC in Taiwan Risk. But we now have The Golden Visa. $2 million to bring someone to America. For $100 billion, you could bring 50,000 people. Is there some world where we get into like AI talent wars but for process knowledge around semiconductor manufacturing and we see some American entity start poaching TSMC employees en masse to get them to America?

[Doug]

That's definitely possible. I just don't feel like it's probable. People have been saying there's a supply shortage yet. Like TSMC has a lot of like, has almost a captive audience, dude. Like, if you think about it, TSMC is like, you know, I mean, it'd be like working for the government almost, but like even more prestigious and killing the shit out of everything. Like, TSMC is like the company of Taiwan.

[Jordy Hayes]

Sure, dude.

[Doug]

Honestly, TSMC engineers are like, really underpaid as is. Like, don't tell. Don't tell them. Right? But like on a, on a dollar basis compared to even American peers. And a lot of people like, like China, for example, poaches very heavily. So I think there's definitely a chance, but I feel like you have to take the entire. No, no, all, like, it's not just the tool. It's the tool, the process, everyone. You'd have to take the whole fab. But yeah, I think that'd be. I think it'd be sick, dude. I think if Intel.

[Jordy Hayes]

Intel could do it, right?

[Doug]

Intel should do it.

[Jordy Hayes]

Intel should do it because they have the golden visa. They have the backstop from Trump. They have all coming in. They'll probably have an OpenAI deal soon, who knows? And then they have all the money and then they can just bring people over. Anyway, we won't take any more of your time. Thank you so much for hopping on the show.

[John]

Super fun. Doug, always great to see you.

[Jordy Hayes]

Talk to you soon.

[John]

Talk soon.

[Doug]

Bye.

[Jordy Hayes]

Let me tell you about Turbo Puffer search. Every byte serverless vector and full search from first principles and object storage. Fast 10x cheaper and extremely scalable. You also heard Doug talking about agentic commerce. It's more important than ever to get your brand mentioned. ChatGPT go to Profound Reach millions of consumers who are using AI to discover new products and brands. Our horse post popped off. We took our first day off on Friday. But we did give you some facts about our horse in the studio, which you can see behind Jordy Hayes over there. And we got a wonderful reply from Eric who's working on soil tech. He says the horse is a symbol of deep. The horse as a symbol is deep Lindy power, camaraderie and frontiering forward motion. As a Kentucky as a Kentuckian I can only agree more. Horse content and shares three beautiful images of horse statues Incredibly underrated animal in other news Dan McCormick, Packy McCormick's brother, has launched his Creatine Gummy brand in Target. That's Create a wild step in this journey that in many ways started with him posting on X three years ago. He was embarrassed to be starting a creatine company. He'd shy away hedge and downplay when asked about in real life on X surrounded by a bunch of like minded freaks, I could post openly about my excitement and the business's progress. I've shared a lot less over the last two years, but my bullishness actually.

[John]

The timing on Create and Dan's really good perfect timing is very early. It was, it was, it felt like a supplement that was already had almost perfect saturation. Totally right. I think anybody that I knew that was like working out multiple days a week was already using creative but never doubt American demand for supplements in gummy format. Never doubt it again. Never doubt Elon Never doubt neither doubt demand for gummies.

[Jordy Hayes]

Oh, this is fun. Ramp Midden Acquisition Today they bought Jolt AI to help their engineers build faster. Jolt is a world class team of engineers who have spent years solving some of the hardest problems in developer productivity. Today, Ramp is welcoming them to the team. They're scaling the AI platform and reimagining how software and finance get built, said from a talent perspective, says Kareem attia from RAMP. RAMP's engineering team is made up of founders, Math Olympiads and AI researchers. Kareem's goal is to hire elite technical talent and then get out of their way. For his part, Joltz Spector, the founder, admitted in an interview that he didn't expect to get acquired by a company like Ramp, but that he's extremely, extremely happy. It's where his team landed. The trio will be working on a number of things, including RAMP's internal engineering platform. So congrats.

[John]

Fantastic hit that gong, John. First hit of the week. It's good to be back. Oh, Technium says you can now invest in Nvidia Intel, AMD ARM, OpenAI, Mistral, Core Weave, Nebius and more with just one ticker.

[Jordy Hayes]

Nvidia of course we also have so she says.

[John]

Word is he continues he's posting again.

[Jordy Hayes]

Is he continuing to run? We also got some Gong analysis. This is from Ethan Frost on September 30th. He said, I analyzed every Gong hit on TBPN here's what I found. Tyler, can you take us through this post of what the breakdown was? And do you think this was manually tagged or was there AI involved? It's a pretty remarkable breakdown of all the different gong hits, how much they raised and then how loud the gong hit was. But explain this post to us.

[John]

Yes.

[Tyler]

I think the main thesis was like, are gong hits on 2pn? Are they louder as funding increases?

[Jordy Hayes]

Yes.

[Tyler]

You can see the correlation is slightly there. I think it's a bit hard because of like sometimes the microphone is just a little bit further away.

[Jordy Hayes]

Sure.

[Tyler]

So you didn't. It wasn't like, you know, a crazy kind of correlation. But yeah. He basically just indexed all of the gong hits that we've basically ever done.

[Jordy Hayes]

Yes.

[Tyler]

And then done a ton of data. So like series A, Series B. He breaks it all down. He also breaks down between you guys. Okay, so there's some good facts here.

[Jordy Hayes]

Who's louder on the gong, me or Jordy? Let's look.

[Doug]

Definitely.

[John]

Definitely Jordy for sure.

[Jordy Hayes]

Okay.

[John]

Definitely me.

[Tyler]

Yeah. John is standing more often standing than Jordy when he's hitting the gong.

[John]

But Jordy throws the gongs. But I throw the mallet.

[Tyler]

Yeah, Jordy throws the mallet a lot more.

[John]

Now I've got a clean shot.

[Jordy Hayes]

I gotta be really rip it. These are so funny. Total gongs. I heard by day of the week. Why are there so many on Saturday and Sunday? We don't record on Saturday or Sunday. I was very confused by this.

[John]

Oh, maybe weekly recap. But I like anyways. Fantastic analysis.

[Jordy Hayes]

Yes.

[John]

And the toss.

[Jordy Hayes]

Let's see the toss hit. That's a funny one.

[John]

Underutilized.

[Jordy Hayes]

Anyway, thank you for your service.

[John]

Even for cross legend. Buco Capital says I put 10% of my portfolio into reshoring semis and it just wasn't even close to enough. Easiest money of our lifetime. Listen to the president. Should have brought a shovel, not a teaspoon.

[Jordy Hayes]

That's true. Yeah. Very interesting to see where the intel story goes. I wonder if there will be an OpenAI deal for CPUs or something.

[John]

Justine Moore was sharing that Taylor Swift is using AI generated videos to promote her new album. Yeah, I was surprised to see that. Biggest artists in the world.

[Jordy Hayes]

Usually there's like a ton of pushback when big artists.

[John]

Feels like she would get. She's a prime.

[Jordy Hayes]

It might be happening target. I haven't followed it too, but Patrick.

[John]

McKenzie says I think the economic logic of this is inevitable and that you'll need video to get your N plus. One marketing post through the noise on social media even as Taylor Swift and your choices are either 100 shoot per post or relatively junior employee with some taste. And yeah, it's good take.

[Jordy Hayes]

Yeah, there is this development of like, will everything be instantiated in every possible format? So if you have a startup launch, video or announcement, you'll write a pithy tweet and then you'll write a blog post and you'll also drop a podcast and then you'll also drop a vibreal and a video in a two hour documentary and they will all be instantiated from just a short fact sheet that then goes out. And it begs the question of like, where will the instantiation live? Will I as the consumer of content say I want to consume these sources in video format? That's kind of the Notebook LM model is like I am saying I want to consume the Internet in a, in a podcast format. With ChatGPT, you're kind of like no matter what question you ask, no matter what the sources are, it comes to you as a neatly organized research report that's a couple thousand words with bullet points. And it's not this, it's that every time. But then there's the other side which lives on the creator side which says I should instantiate my idea, my concept, my take as a TikTok reel, as a YouTube video, as a podcast, as a video. And I do that on my side. And I'm wondering where it lives long term because there is a world where you can go to where Taylor Swift doesn't need to generate the AI generated video. Because I as the Taylor Swift fan can go to Sora and it knows that I'm a fan of Taylor Swift and it automatically generates it for me based on just her text post.

[John]

Or yeah, or she could just share. Just share the prompt in text in the Notes app and then just imagine it.

[Jordy Hayes]

Exactly. Maybe, I don't know, it'll be somewhere in between.

[John]

Ethan Frost is in the chat.

[Jordy Hayes]

Oh really?

[John]

Let's go, let's go.

[Jordy Hayes]

Hey Ethan, thanks so much.

[John]

Great to see you. Thank you for analyzing the gunk.

[Jordy Hayes]

Yes.

[John]

What else?

[Jordy Hayes]

Linear. LINEAR is a purpose built tool for planning and building products. Meet the system for modern software development, streamline issues, projects and product roadmaps.

[John]

I would go out on a limb and say everything that opens OpenAI launched today was almost certainly planned and linear for sure.

[Jordy Hayes]

For sure. Oh, this is a fun one. So Kareem Jeddah says, introducing Gaslight Garage, a box where I put my phones and feed them AI generated Audio nonsense to make them think I want to buy stuff. Practical AI for the people. Gaslight Garage and Snowy or Snwy says, I tried this once after getting into an argument with my parents about. About whether your phone listens or not. Where do you stand on this, Jordy? Do you think your phone is listening to you?

[John]

Man, such a tough one. Because everybody has like an example or two.

[Jordy Hayes]

Yep.

[John]

But if you think about, we talked about how many ads you get and.

[Jordy Hayes]

Then I saw an ad.

[John]

How many different things you see, how many ads you get over a multi year period, how many products you talk about about over a multi year period. And then at some point or another, they're gonna be in like perfect alignment between the two. And then also you have to factor in people that search for something once and then, you know, on a certain network and then forgot about it. Or someone else in a household search for something and then somebody else in the household gets served. Right. There's a lot of different ways to explain away the listening aspect, but I.

[Jordy Hayes]

Yeah, I noticed that some of the spookiest, you know, ads that I would ever see would be. It would come from a conversation that I had with a person in real life where like, yeah, the phones could have been listening, but more likely. And then I saw an ad. So they tell me, oh, you gotta test out these headphones. And I see an ad for those exact headphones the next day. And I'm like, that's weird. I just heard about that and now I'm seeing an ad. How did that happen? I know I didn't search for it. I know I didn't send any data signal to my phone or my apps. But then I realized that it's like, well, if they just ordered those headphones and that data of them shopping and them going through that checkout flow is encoded in their Instagram profile. And then it knows that we hung out because we're friends on the network and we like each other's posts and we were texting with each other on the app and stuff. And then it, it can say, well, Jordy just liked these headphones. John and Jordy were just hanging out. Showed John they might be similar consumers. I feel like that can be kind of spooky, but very. A clear flow that would come from the data. But anyway, Snowy said got two iPhone 6s, both wiped and connected to two different WiFi networks with independent VPNs. Said keywords to one and different ones to another. Never an earshot of each other with multiple apps, Insta, Facebook, Twitter, Open with their accounts and basic usage. And the ads were never what I said. They were basically always location based slash. Pretty basic things. My running theory is that whoever thinks their phone is listening is just predictable enough that it knows not because it heard them. I think that's probably right. Plus there's this massive incentive that if the phones were listening and targeting, there would be a huge incentive to become a whistleblower. Like there's been a whole tour of folks who have like left Meta become influencers.

[John]

You can go get a book deal.

[Jordy Hayes]

You can get a book deal. Exactly.

[John]

Get a speaking tour. You can get a TED Talk.

[Jordy Hayes]

Exactly, exactly.

[John]

You can get a government job. Probably how much somebody at Meta wants.

[Jordy Hayes]

To get paid to testify. Maybe they should do that appearance fee for testimony on Capitol Hill. Let's make it happen. Anyway. Numeral sales tax on autopilot. Spend less than five minutes per month on sales tax compliance. Someone. Someone in the. In the chat is like, I was just thinking about Numerol.

[John]

How did they do that?

[Jordy Hayes]

He's speaking to me directly. Well, you and Tyler should debate this one. Mr. Beast said, When AI videos are just as good as normal videos. I wonder what that will do to YouTube and how it will impact millions of creators making content for a living. Scary times. And Justine Moorhead.

[John]

It's kind of crazy that biggest YouTuber comes out and comes out and just scares everybody. Because I think if you dig into this at all, it's pretty easy to show how AI presents an incredible opportunity for existing creators. Like yes, some amount of attention will go to content will go to net new content creators that are just using the tools better or more focused. But nowhere in here does it say that if you're making a living from content today, you can't use AI to make significantly more content. Significantly better content. It's much more of a opportunity than a threat in its current form. Yeah.

[Tyler]

I also think it's funny coming from Mr. Beast because it's just like this is like slop on slop hate. Mr. Beast is like, I would not want my kids be watching Mr. Beast videos. If you watch them, it's just like the cuts are like every like one and a half seconds. It's like pretty insane already. So I like, I think Mr. Beast.

[John]

Well also, if you remember, if you remember, he wasn't. He tried to create a tool that used AI to make thumbnails and he eventually rolled that feature back because it was taking away revenue, potential revenue from thumbnail artists. Yeah. Yeah.

[Tyler]

So I mean, I would say that his style of content is much more susceptible, I guess to like being.

[John]

See, I totally, I totally disagree because I think part of the reason, like I can see what you're saying in the sense that like you can argue like this is slop. I don't want people to. I wouldn't want my kids to watch it. At the same time it's very clear. Clearly the opposite. It's the opposite of slop in that it's like massive, massive productions. Real humans.

[Jordy Hayes]

Did you see the reaction?

[John]

Real money on the line.

[Jordy Hayes]

Don't worry, Jimmy. Like people want to know that you made 100 people stay in that circle for a month.

[John]

It's like so much more entertaining. If you just took Mr. Beast style content and made it using AI, it would not be nearly as entertaining. Right?

[Jordy Hayes]

Yeah. People want the, people want the suffering.

[John]

It's like, why? Or you could just watch two robots play chess, right?

[Jordy Hayes]

Yeah.

[Tyler]

Like, okay, you can say that it has this big budget, but like I don't think. You can't say that Mr. Beast is like, oh, it's like this auteur cinematic content. Like it's still at like there's like, okay, it's like they have real people but above that it's just like this is like very stimulating, like fast paced content.

[John]

Yeah. But a big part of it is the human suffering element. You know, wait until AI can actually suffer for like a human.

[Jordy Hayes]

Yeah, I mean you could. I'm trying to think of the most recent example, but there is something about just like the fact checking chain of like if you're watching someone do like I bet when the X Games happens or when Red Bull does their next stunt, like that will get more viral views than the Stephen Hawking novelty X Games video. Just because there's something that we know that the fact that the X Games is a real organization that they own, that they're not pos AI generated content and they've made that commitment to only show videos or Red Bulls only showing videos of humans doing wingsuiting through a helicopter off of a cliff or whatever. And so there's something that just hits like more emotionally, like it's more emotionally resonant. And then there's also all of these like downstream, like behind the scenes, like the Mr. Beast. Are the videos fake? Has been a long time debated. He's kind of one beat those allegations every time. But like the incentive to like kind of see like a whistleblower on someone who's like faking their content will be like at an all time high. But I would imagine that the, the institutions that still make people suffer will do quite well. But I don't know. I mean, for. I think it'll definitely like widen the gap. Like if you're, if you're, if you're making content that is at all substitutable with slop, like you're done. But if you're making content that cannot be challenged whatsoever and is so like uniquely human. But yeah, where, where does mystery.

[John]

Yeah, a good example. A good example is like our. Is. Is Andrew Huberman threatened by someone else coming out and creating an AI based Persona that tries to do the same thing that he does?

[Doug]

Right.

[John]

In terms of like creating long form content around various health protocols and health topics?

[Jordy Hayes]

Yeah.

[John]

And I think that even if you could put the level of craft in that the Huberman lab team does. Do you want to be getting health advice from an imaginary robot? Right. Or is it. Or do you want health advice from Andrew huberman because he's 50 and he's absolutely jack. He's living his best life. Right. It's like who. You know, where the content is coming from matters a lot.

[Jordy Hayes]

Yeah, for sure. Yeah, yeah. The provenance matters. People, people care about other humans. They. They're anti clanker at their core in many ways. Well, let me tell you about Fin AI, the number one AI agent for customer service. Number one in performance benchmarks, number one in competitive bake offs, number one ranking on G2. In other reshoring. We're not just reshoring chips, we're also reshoring Sharpies. Apparently Sharpie found a way to make pens more cheaply by manufacturing them in the United States. Newell Brands move production.

[John]

Need one of these. They need to make the red, white and blue Sharpie pack immediately. I need these.

[Jordy Hayes]

This is actually mentioned in the Wall Street Journal article, apparently. Where is it Donald Trump uses a Sharpie all the time or something like.

[John]

That for signatures, right?

[Jordy Hayes]

Yeah. Where is it? Pen barrels whirl along automated assembly lines that rapidly fill them with ink. At least half a billion Sharpie markers are churned out here every year. Each one made of six parts. Only the felt tip is imported from Japan. It didn't used to be this way. Back in 2018, many Sharpies were made abroad. That's when Chris Peterson, who is the CFO of Sharpie maker Newell Brands, challenged his team to answer the question, how could they keep Newell from becoming obsolete compared with factories in Asia? I felt like we had an opportunity to dramatically improve our US manufacturing. He's now the CEO and he makes all 93 colors of Sharpie at a 37 year old factory. And they did it without reducing employee count and without raising prices. But to get to this place, it took close to $2 billion in investments across the company.

[John]

And of course this, this is a $2 billion market cap company.

[Jordy Hayes]

Okay. Book value to market cap is one to one. Apparently if they did all this capital, I want to get the CEO on the show at some point. President Trump uses a custom Sharpie. He slapped high tariffs on many imports with the goal of prompting more companies to do what Newell has done and bring manufacturing back to the U.S. but Filippo Falorni, an analyst at City, said few companies in the sector have the resources to replicate Newell's move. Well, I think we're ready for our next guest. Ready? Let's bring in Celine from Loyal. But first, let me tell you about Adeo Customer relationship Magic. Adio is the AI native CRM that builds scales and grows your company to the next level. And get started for free. Let me also tell you about public investing for those that take it seriously. They got multi asset investing, industry leading yields.

[John]

There you are.

[Jordy Hayes]

They're trusted in millions. Yeah. We're hoping to get a real horse in the studio at some point.

[Celine Hollywell]

I can help with that.

[Jordy Hayes]

Yes.

[Celine Hollywell]

I have like three.

[Jordy Hayes]

No way. You actually have horses?

[Celine Hollywell]

Yeah, yeah, I'm a crazy horse girl.

[Jordy Hayes]

Where?

[John]

Yes.

[Celine Hollywell]

Petaluma.

[Jordy Hayes]

Petaluma.

[Celine Hollywell]

Yeah.

[Jordy Hayes]

Do you live there?

[Celine Hollywell]

No.

[Jordy Hayes]

Okay.

[Celine Hollywell]

It's sf Cool. But I do the anti commute.

[Jordy Hayes]

Okay. What is that?

[Celine Hollywell]

Like you drive up against the traffic to North Bay to go ride your horses.

[Doug]

Okay. Okay.

[Celine Hollywell]

I've taken investor calls while on a horse.

[Jordy Hayes]

Okay.

[Celine Hollywell]

Almost fell off on an investor call while on a horse.

[Jordy Hayes]

Wait, walk me through. Like, are they the same breed? Like, what's the story with the three horses?

[Celine Hollywell]

Why three horses are potentially the worst investment you could ever make. I do not recommend them. They are worse. I feel like there's some like seed valuation joke you could make here about horses anyhow. They tend to break themselves. They're like self destructive.

[Jordy Hayes]

We were thinking about getting a horse at one point. We wanted to race in the Kentucky Derby and give it like some funny name.

[John]

We were going to it, call it the Ramp.

[Jordy Hayes]

Yeah. And we were, we were. And we were running the numbers and it wasn't that crazy. As a marketing.

[John]

Well, yeah, you get into it and you're like, okay, maybe it's like 100k for the horse and then naming rights. Grand a month to like.

[Jordy Hayes]

But it's such a funny stop. Someone's gonna do it now that we.

[John]

Somebody's gonna show.

[Celine Hollywell]

Dude, that color would look sick on a horse, though. Like, imagine the racing stripes.

[Jordy Hayes]

I love it. Anyway, sorry. Kick us off with an introduction on yourself and the company.

[Celine Hollywell]

Hi. Yeah, I'm Celine Hollywell. I'm the founder and CEO of Loyal and Worldwide. Developing drugs to extend dog lifespan.

[Jordy Hayes]

Amazing horses.

[Celine Hollywell]

Next Horses. Next. Venture capitalists.

[John]

Next Human Capital eventually.

[Jordy Hayes]

What was the inspiration for the company? Did you know that you wanted to start with animals or was that purely like the fda?

[Celine Hollywell]

No, so I actually was working in human longevity. So I worked with a previous guest of Yalls, Laura Deming.

[Jordy Hayes]

Amazing.

[Celine Hollywell]

At her venture fund for a few years. And we were just frustrated because nobody was trying to develop. Develop a drug explicitly for lifespan extension. Right. And we're like, this is obviously, like, obviously we all.

[John]

That was the sci fi promise.

[Jordy Hayes]

Yeah.

[John]

Everybody was promising it, but nobody was working on it specifically.

[Celine Hollywell]

Not directly, no. They're all kind of going these indirect paths. And so we became obsessed with how to do this, realized to do it in humans it would take a lot of time, a lot of money, but you could do it in dogs. It's a super crazy market. I hear one of you is a dog person.

[Jordy Hayes]

I am, I am. My dog was supposed to attend, but I have to leave right after and he's busy chasing squirrels. He's a 10 year old Newfoundland, so he needs.

[Celine Hollywell]

Oh, wait, so you understand this because we're starting with, I think in Newfoundland's like on your.

[Jordy Hayes]

Yeah. On your homepage. There's been. For a while at least.

[Celine Hollywell]

Yeah. No, new fees are the shit.

[Jordy Hayes]

Yeah, no, it was like the dog was pitched to me as like, look, every. Every day after year five is like a miracle because they're known to have extremely short lifespans. And so I kind of set myself up for like, look, like I'm not coming in. You get a golden retriever. You're not thinking, like, yeah, it's gonna live for 40 years. So I just went into it thinking, okay, I'm getting a Newfoundland. It's six to eight years or something. And he's done very well. He's 10 years old.

[Celine Hollywell]

Good job. We need to sequence your dog. I'll send you a saliva kit. We actually have an investor that has two giant new feet that they bring around everywhere, like on his plane. It's hilarious.

[John]

Well, that's why he's living so long.

[Celine Hollywell]

Well, yeah, that helps.

[John]

Do not take your dog's commercial.

[Jordy Hayes]

Yeah.

[Celine Hollywell]

But I actually got convinced to take their term sheet because they sent me Their Pinterest board, which was just New Feast all the way down.

[Jordy Hayes]

I love New Feast. They're the best dogs.

[John]

Fully committed.

[Jordy Hayes]

They're so good. So, yeah. On the fact that there's never been a drug explicitly for longevity, is that just because in order to have a drug, you need a problem or some sort of. It needs to be a treatment for a specific condition, and just death is not a condition. And so kind of. Is that the right narrative?

[Celine Hollywell]

Yeah. The way to think about it is to be able to have a drug to approve, to do something, you have to prove that the drug is doing that thing.

[Jordy Hayes]

Sure.

[Celine Hollywell]

And so if I gave you guys a longevity drug and I was like, oh, let's see if it extends your lifespan. Yeah. I'd be following you for decades, and the company's gonna be long dead and all of that.

[John]

It's also hard to prove that the drug was the catalyst for your life. Right. It could have been. Oh, they just got a lot of sun or they walked a lot.

[Celine Hollywell]

There's a lot of variability. Right. Like the decision you make, the yerba mate being pro or anti longevity, whatever it is. Right. All of these things vary. Aging, it's one of the most complex phenotypes, but we all go through it and it's the same thing is true in dogs. But the good thing about dogs, at least when you're developing a longevity drug, is they age much faster.

[Jordy Hayes]

Sure.

[Celine Hollywell]

So you can see if something is working in a period of time that's.

[John]

Much more reasonable, and you can theoretically have a much more isolated study. Is that right? Just because.

[Celine Hollywell]

What do you mean, isolated?

[John]

Well, I just imagine, like, it's easier to control factors in a dog's life versus, like, a bunch of.

[Jordy Hayes]

Like, a dog is not going on a bender in Las Vegas.

[Celine Hollywell]

That is. Yes. Yeah.

[Jordy Hayes]

So you can just be like, yeah, well, we know exactly what the dog's diet was pretty much every single day. Maybe he got into a cheeseburger once. But a human is, like, using Diet Coke one day and then some alcohol and then this and then Bender and then Burning Man. Who knows? There's so many confounding factors, and dogs.

[John]

Might more didn't have much like, a cheeky cigarette habit earlier in their life that they don't talk about or something like that.

[Celine Hollywell]

No, it's true. Yeah. Dogs just. It's a lot. It's still complicated, but it's much more simple. And then you also have these individual breed variants which teach you a lot about humans, too. Right. Like, why does a newfie have such a short lifespan versus a golden versus a Chihuahua. You can study these things in a much more quickly way.

[Jordy Hayes]

Yeah. Why not mice though? I feel like there's a lot of mice studies. It works in mice.

[Celine Hollywell]

You know, I love mice. I don't think mice are a multi billion dollar market.

[John]

Yeah, that's the thing, the commercial opportunity with dogs. If you ask a dog owner, how much would you pay to have an extra year of healthy lifespan for your dog? And I'm sure there's a wide range between like $1,000 and some people that are like, I would pay any price. I will liquidate my 401k for another two years.

[Celine Hollywell]

It's actually really interesting. Like people, people. It's not actually really at all correlated to socioeconomic status or how much cash people have in the bank. They will just spend anything. A certain subset of the population will spend anything on their dog. I've had people offer me $50,000 for the drug before. I would like to note to the FDA that I said no, but I've actually gotten a lot of offers like this.

[Jordy Hayes]

Yeah, that's crazy.

[Celine Hollywell]

The willingness to pay is insane. The market is huge. And so we could hopefully make a multibillion dollar company around this and then use that that revenue to fund more research maybe into horses.

[Jordy Hayes]

Love it. Yeah. What was the initial.

[John]

Yes, please.

[Jordy Hayes]

What was the initial target? Kind of the biotech side of the business. Like how do you know what to target? How do you narrow it down? There's a lot of different life extensions, nad and telomere extension and just cardiac stuff. There's like a million different sub indications that people think about when they're thinking about their own longevity. How do you narrow it down what you you focus on?

[Celine Hollywell]

So the way we thought about it is we wanted something that was as broad as possible. So as, you know, efficacious and relevant to the Chihuahua as it is to another dog. Right. And even if they have different food or different behaviors or more in bred or less in bred that it still may work. So that was one and two. You want something that's relatively simple. Right. Aging is so unbelievably complicated that when you add any additional variables, things just become exponential really quick, quickly. And so where we actually started is what you were talking about early with newfies with a short lifespan of big dogs. Because it turns out the genetic driver of dog size, I think that makes a newfie grow really, really big in puberty or makes a Chihuahua not grow big in puberty, also genetically controls the rate of aging of that dog. So your new fee, well, maybe not your new fee, but the average Newfie is actually aging at a much faster rate. And so that was a really nice place to start because a. It's something that everyone understands, especially big dog lovers. They're like, I know, I know the heartbreak of losing a Great Dane or losing a large Labrador. And it was like, simple, mechanistically, and it was applicable to a wide swath of the canine population. Basically, any dog over a certain weight would be eligible and has this problem, right, because they're not living as long as a Chihuahua that lives for 16 years. Every other bigger dog has a somewhat shorter lifespan than at the theoretical maxima.

[Jordy Hayes]

So, I mean, how do you explain what the drugs are actually doing?

[John]

So basically, that's a black box, unfortunately.

[Celine Hollywell]

Basically, the way to think about it is all puppies are born approximately the same size. But a Great Dane puppy has super high levels of these proteins called growth hormone and IGF1. And these are circulating at really high levels and they're basically binding to their cells. They're saying, grow, divide, grow, divide. And that's why you're or Newfie puppy is getting so big. That's normal. It happens in humans too. But it shunts down significantly once you're fully grown. In a big dog, it doesn't. So big dogs still have these super high levels of these growth hormones circulating around that are basically making the dog turn over at a faster rate. So what the drug does is it inhibits those levels. It brings them down to a level that's seen naturally in dogs. So think bringing a new fees level down to an Aussie shepherd or something similar. Interesting. And this is like this idea that if you reduce crossover growth hormone, if you reduce IGF one extends lifespan. It's actually been shown all the way from worms to mice to a multitude of organisms. And there's even human centenarians that have the same genetic things that Chihuahuas do.

[Jordy Hayes]

And our body are spiritually Chihuahuas. So is the like.

[Celine Hollywell]

I think that's an insult.

[Jordy Hayes]

Is the scientific phrase like IGF1 inhibitors, essentially. And are biohackers using that, like wild against the fda? Are they?

[John]

Yeah. How much can you. Is there medical tools, these sort of fringe biohackers and what these NM1 studies, is there anything to learn or just.

[Celine Hollywell]

Well, yes, there's always things to learn. You know, it's funny, people actually often will supplement growth hormone in IGF1 because it makes your muscles really big.

[Jordy Hayes]

Oh, sure.

[Celine Hollywell]

And it's very aesthetic.

[Jordy Hayes]

It's kind of like human growth hormone.

[Celine Hollywell]

Yeah, exactly, exactly. It does not increase function, but it does increase muscle size. So a lot of people might not be happy.

[John]

Interesting. It doesn't correlate with strength at all.

[Celine Hollywell]

It's just like gives you the pump. Yeah. You guys can't tell I'm on it.

[John]

Yeah, yeah, yeah. Well, I mean, yeah, plenty. I think the people that are taking HGH are doing that specifically entirely for aesthetic reasons. And they're post strength.

[Celine Hollywell]

Yes, yes, they are post strength.

[Jordy Hayes]

But are there people in the biohacking community that swear by it or are they optimistic that it will have an effect on longevity for them?

[Celine Hollywell]

Yeah, I mean, this mechanism is pretty consensus as a longevity mechanism. It's not going to be as like this specific one. The big dog short lifespan isn't going to be as relevant to humans because like I'm not living twice as long as you guys. Right. Me being so short that I'm having to like sit on my feet.

[Jordy Hayes]

Sure. But a newfie does live twice as lives half as long as a Chihuahua.

[Celine Hollywell]

Exactly, exactly. So think of it as kind of like a biological hack to have a foot into a very, very, very complicated biological problem.

[Jordy Hayes]

Yep. What's the current understanding of why women live longer than men?

[Celine Hollywell]

I mean, we just do less crazy shit.

[Jordy Hayes]

It's just risk taking.

[Celine Hollywell]

Yeah, it's risk taking. No way.

[Jordy Hayes]

There's like heart attacks or something.

[Celine Hollywell]

No, I actually don't know. There's like a real reason, but I don't know.

[Jordy Hayes]

Yeah, yeah. I like the idea that dudes are just wingsuiting.

[Celine Hollywell]

Dudes are just fucking insane.

[Jordy Hayes]

So walk me through, through the actual process to commercialize and grow the business. I imagine the FDA has a number of different subgroups. Veterinary medicine's one of them. Is that a more receptive, faster pathway than just the traditional drugs for humans pathway? Are you accelerated there?

[Celine Hollywell]

Yeah. So the FDA on the veterinary side is super stringent. Right. It matters a lot in some ways, you know, almost more because a dog can't talk. So you're really trusting the FDA and you're trusting your veterinarian that this like pill you're giving isn't gonna like cause some disaster.

[Jordy Hayes]

Sure.

[Celine Hollywell]

But the nice thing with canines is that the incentives are really, really aligned. Right. Like everybody wants dogs to live a longer, healthier life. And preventative medicine is really where it is with dogs because, you know, there's no insurance. Nobody's getting half a million dollar cancer car t therapies or whatever. Right. It's always a tough owner having to pay out of pocket. So most of the really successful dog drugs today are already preventative medicines. Think like heartworm prevention, right? It's reducing the risk of your dog getting a disease that if you give the drug, you'll never see them get that disease. Right. Flea and tick, same thing. There's a lot of categories of medicines like this. So yeah, it's actually been really fun to work with them. And then the new administration is like, well, it's a little complicated, like super pro longevity. Right. And so it'll be interesting to see how that makes sense, impacts the human side where things are very regulated, but also just a bit more complicated.

[John]

But it seems absolutely critical, even just from a fiscal standpoint, that we figure out how to get people to live longer and healthier.

[Celine Hollywell]

Yes, people, when you talk about longevity, they tend to be like, oh, but you're just gonna make the rich live longer. And the fact of the matter is the rich already live longer because they can also access better cancer meds, better doctors. I do like preventative screens all the time. The vast majority of Americans could never afford that. Versus a daily cheap pill that broadly extends your quality of life and broadly extends your lifespan. It not only helps that individual to potentially prevent them or delay them developing cancer, it also helps their children who aren't going to have to become caretakers before their own careers have taken off. It means that they can have more flexibility in pursuing doing the next great things thing. I think actually like, you know, better health of the population is one of the best, great equalizers we could bring.

[Jordy Hayes]

Yeah. How closely does the. Does your business track to what I'm loosely familiar with in the biotech world where it's like you're in the lab, you develop the drug, then you test it on like dog, monkey, mice, something like that. You take that data through phase one, phase two, it's a multi year process. The company might IPO and then get bought by Merck or Pfizer at some point. That's what I think of when I think of biotech. Yes, we've created a new drug for this very specific cancer, but it's still a $10 million or $100 billion outcome because it fixed this one thing and it became very profitable. Is that the typical path or is it wildly different in veterinary?

[Celine Hollywell]

Dude, your biotech context is on point. I'm actually super impressed.

[Jordy Hayes]

We had a bunch of biotech investors and founders on one day when Trump was doing the most favored nation thing, he tried to get a Feed on it, that whole thing, which I don't really know where that went. But anyway, just in case, there was.

[Celine Hollywell]

Almost 100% tariff on us. And then that got no way. But that got taken away. It's been really interesting. It's been exciting.

[Jordy Hayes]

It's all a roller coaster.

[Celine Hollywell]

My cortisol is just like, perfect.

[Jordy Hayes]

That's good for longevity.

[Celine Hollywell]

My personal longevity is not benefiting from the pill. So the way to think about it is if you're comparing to human is you do maybe backing up a little bit. The overarching themes of developing a dog drug is it takes like four to seven years, basically by a combination of how effective and how lucky you are. To get a dog drug approved takes about 20 to $50 million, for context, in humans, it takes a decade to develop a human drug. Takes about a billion dollars to develop a human drug.

[Jordy Hayes]

So you're like orders of magnitude faster and cheaper.

[Celine Hollywell]

Orders of magnitude faster and cheaper. And then actually the coolest thing.

[John]

And you guys have been pretty lucky, right?

[Celine Hollywell]

We've all been lucky, right? And they totally.

[Jordy Hayes]

Where did you catch lucky breaks?

[Celine Hollywell]

Oh, my God.

[John]

Well, I just feel like. I feel like whenever you guys announce, like, any type of milestone, the average investor is basically sharing something to the effect of you guys don't realize, like, how rare this is. Like, the speed at which you guys have been able to, I mean, it's kind of just like knock down these different milestones.

[Celine Hollywell]

I mean, we've gotten the first ever efficacy approval for a longevity drug. We've created the first regulatory pathway for a drug.

[Jordy Hayes]

And we.

[Celine Hollywell]

For longevity for any species. Obviously it's in dogs, but it's any species. And dogs actually are. They're. They're regulated by the same federal regs as human drugs. So it's a. It was still a really huge lift. We've gotten. We're running the first ever lifespan pivotal, FDA enabling clinical trial. Like, all of these things are super, super hard. We got. Obviously we're like, have a smart team. But yeah, you have to get really lucky too. Right? We got lucky that the drugs. When you pick a drug and you're like, this is gonna be our lifespan extension drug, it either is or isn't right. And there's nothing I can do as CEO to make this drug work if it doesn't work.

[Jordy Hayes]

Well, you can try and take 10 drugs through the pathway at the same time. Potentially.

[Celine Hollywell]

That's kind of what we're doing. We have like four in development, but that's really expensive, of course.

[Jordy Hayes]

So you have to Pick a couple candidates that have the most promise and luck comes in and that you hope one of those is the one that.

[Celine Hollywell]

You picked and you hope there isn't some random toxicity out at the 11th hour and that like totally nukes. And especially with a longevity drug, there's zero tolerance for adverse events. There's zero tolerance for me turning your dog.

[Jordy Hayes]

Yeah.

[John]

Because it's not like you have a bad condition that you're trying to treat.

[Celine Hollywell]

Exactly.

[John]

Some side effects or the average patient would be okay with some side effects.

[Celine Hollywell]

Yep.

[John]

It's like you're going from net neutral to. It has to be.

[Celine Hollywell]

Exactly, exactly.

[John]

You can't reduce quality of life. I mean that much. I mean there's people like what are some of the human. The drugs that human patients are taking? I feel like Peter Attia and people are taking certain drugs that like Rapamycin. Yeah. Metformin reduces your athletic performance.

[Celine Hollywell]

They all have some. Metformin works by improving your metabolic fitness. Which we actually have drugs that are actually our lead drug now. Now is improving metabolic fitness in senior dogs is a very like robust way. Like if you've ever intermittent fast or calorically restricted, that's a way to improve your metabolic fitness. Metformin just does that as a drug. It's an old diabetes drug. But yeah, it has a bunch of like stomach side effects. And also just when you give any stuff for a long time, bad things can happen.

[John]

Yeah. There's also. It can't. If somebody were to reclassify it as a. There's no incentive to reclassify metformin as a longevity drug because it's off patent.

[Celine Hollywell]

Right, Exactly.

[John]

No one spend all this money on. I didn't know that because there's a lot of. It's debated. Right. But there's a lot of evidence that like aspirin could be potentially beneficial for lifespan. But nobody would do the work to reclassify it because it's off patent. And you could go and you could spend a billion dollars proving that it works and then everybody could just make it. Yep, yep, yep.

[Celine Hollywell]

And this is like a niche thing that actually.

[John]

And so you can't even market aspirin as.

[Jordy Hayes]

No, no, it's not illegal.

[Celine Hollywell]

No, no. And this is a niche reason why Loyal. It made a lot of sense and why I was like, okay, I guess I'm going to go and do. This is your hundred. You have this catch 22. When you're trying to develop a human longevity drug, which is you need something that has a ton of safety, both acutely Right. So you took, like, five of them. Nothing bad's going to happen. But also over a period of time. Right. If I give it to you for a decade, is it going to increase your risk of colon cancer or something? The only way you know that is by giving it to that person for a decade. By the time you have done that, the drug is generic. One of the really cool things about animal health is that you actually, the FDA tries to incentivize people to develop and prove that new drugs work for animal medicine. So you actually can get 10 years of exclusivity from the FDA.

[Jordy Hayes]

Yeah.

[Celine Hollywell]

If you develop a novel. A generic drug for a novel use case.

[Jordy Hayes]

Dogs.

[Celine Hollywell]

So we have actually both. We have licensed human drugs, we have generic drugs. But it means that you are able to go in and say, look, this might not work, but it's not going to do any harm. And that's so important when you're trying to create regulatory pathways, when you're trying to convince veterinarians to prescribe something that's never existed before, to convince dog owners to do something they've never done before, to be able to say wholeheartedly, there's decades of data, and we don't think this drug's going to do any harm. That helps.

[John]

Are you guys getting feeling any acceleration from various AI models? It seems like we have people on the show every week that are building AI for science, AI for drug development, and foundation models dedicated to it. And yet you're here. You haven't said AI once.

[Celine Hollywell]

I have not said AI once. This was so funny. It was a meta point. We were, like, working on, like, loyal narrative stuff, and I was like, like, should I just, like, let go of my ego and, like, have an AI story? And I was like, there, like, anyhow, there's. There's no AI in the loyal story. But, like, I really debated it because I was like, man, I wonder if this would, like, increase my valuation by, like, a factor of two.

[Jordy Hayes]

What about Eli?

[John]

And that would be good for dogs and that'd be good for horses, and.

[Celine Hollywell]

It'D be good for the dinner.

[John]

No, but that's saying something that you're actively doing all of this drug development, and meanwhile, there's companies coming out and they're making the claim, at least to investors, that they're gonna be able to. To speed up drug development, do it more efficiently, et cetera.

[Celine Hollywell]

So, I mean, so here's the problem.

[John]

Because I'm sure you've tried to figure out, how do we unlock value here?

[Celine Hollywell]

Yeah. So here's the problem with AI for drug development is I'm not an AI person, but I am in terms of technically trained. But I am sure the models are good enough that we gave them biological data. They could infer things that human scientists couldn't. The problem is we don't have those data sets. They don't exist for a human. I can't say, okay, here's your model and if I give you the drug, how is it going to react in this part of your body? That part of your body, how is it going to get reduced over time? How is it going to interact with this other drug you're on? We just don't have those data sets.

[Jordy Hayes]

Yeah, we saw this with AlphaFold. AlphaFold came out protein folding solved. The biotech markets didn't really move because it turns out that actually solving protein folding problems is like 0.1 protein of the job to do. To get a new drug to market, you gotta recruit patients and then monitor them and then talk to the FDA.

[Celine Hollywell]

And do legal design to clinical trials.

[Jordy Hayes]

Yeah. There's so much more to do.

[Celine Hollywell]

You know, like our clinic, our big longevity study that we're running in dogs right now. I think the biggest risk to it is actually operational. It's data quality, it's dogs not dropping out, it's veterinarians complying. Right. Like the biggest reason this study would fail is that if we have to throw out a bunch of data in five years because it doesn't adhere to the statistics standards that are necessary. Right. So there's some interesting AI companies for like the beginnings of drug development. Like Chai Discovery is one that's trying to do basically better antibody binding design. That's smart. I think that makes a lot of sense. But I mean I'd love to be proven wrong, but I think there hasn't been like a moonshot for the bio data gathering on the clinical side that would be necessary to model you and see what works.

[John]

It's not a good. Yeah, it's not a business. Yeah, it's not a business. You're taking a. Even if somebody was able to raise a billion dollars with the idea, it's like would they would. They'd come to you and be like, what do you need? And then they'd be like a services provider.

[Celine Hollywell]

Yeah. And that's the hard thing. Like so we're building all these biobanks out and so we're going to have potentially one of the best data sets of translational aging in a species. That's the best model of humans. That is in human humans. And so maybe we'll be able to do it from then. But like, I would, I would feel disingenuous for me to say, like, yeah, that's the strategy. Because just like, no one knows, like, biology is like the ultimate black box and it's the ultimate humbler, honestly.

[Jordy Hayes]

What about peptides? Are dogs on Ozempic yet? Are dogs on Ozempic actually?

[Celine Hollywell]

So this is my favorite fun fact. Everyone is like, oh, are you just developing like Ozempic for dogs? And an answer is no, because people don't want their dog to not be hungry. Think about it, right? You go home, your dog's super excited to see you, jumps on you, you're like, oh, my dog loves me so much. I'm the alpha male. Your dog's probably hungry. Yeah, right. And so when people give their dog Ozempic or Ozempic like drugs.

[Jordy Hayes]

Yeah.

[John]

It just takes all the joy.

[Celine Hollywell]

It takes all the joy. The dog becomes a cat.

[Jordy Hayes]

Oh, no, no.

[Tyler]

This actually exists, I think about like.

[John]

My, my most cherished memories with my dog growing up. It was like my dad, my brother and I making scrambled eggs for the dogs. Yeah, it's like that was peak experience as like a 10 year old.

[Celine Hollywell]

No, totally. It's not a good market. So like our other drug that's working on metabolic fitness to extend lifespan, which is very similar to how Ozempic works, it is targeting, improving metabolic fitness. But we make sure explicitly that the mechanism that we're hitting doesn't impact appetite and doesn't impact like weight in general.

[Jordy Hayes]

Any book recommendations for us?

[Celine Hollywell]

That's cute that you think I have time to read as a.

[Jordy Hayes]

Any movie recommendations? Must love dogs. What you got for us?

[Celine Hollywell]

You know, dog related. Love is blind. France last night.

[Jordy Hayes]

Okay. Love is blind.

[John]

Really trying to turn off.

[Celine Hollywell]

I'm sorry, I, you know, I, you know, I want to be one of those, those like CEOs. I'm like, these are the esoteric, hyper intellectual books I'm reading that like show that I'm smarter than you.

[Jordy Hayes]

What?

[Celine Hollywell]

No, I was, there's no shame.

[John]

I was reading a book that there's only one copy, it's thousands of years old.

[Jordy Hayes]

It's a rare PDF you don't have access to.

[Celine Hollywell]

It's English. But you wouldn't, you wouldn't understand. Yeah, but like, honestly, like, Loyal's my all day, every day. Like, I don't have.

[Jordy Hayes]

What's the general routine like at Loyal for you?

[Celine Hollywell]

So we're actually fully remote.

[Jordy Hayes]

Okay.

[Celine Hollywell]

Which I know. Contrarian. Contrarian. But it actually works well because we have to hire people. We have to hire the best possible person for each skill set we need. And often those people are not actually, they're almost never in the Bay area. I'm going to St. Louis after this. That's where we have a lot of team members. We have a lot of team members in Kansas. We have them in Florida. Right. And so you get so much more benefit from hiring the right person for the right role than you do saying, I'm going to hire the second person or third best person. But they're willing to move to sf, right?

[John]

Yeah.

[Jordy Hayes]

Yeah.

[Celine Hollywell]

So for me, I actually just like live at coffee shops. I sit out of some of our investors offices. Bring my dog. Maybe one day whenever I'm able to fly private, I'll bring my dog.

[Jordy Hayes]

Is Antonio. Gracias. The one with the two newfies?

[Celine Hollywell]

No.

[Jordy Hayes]

Okay.

[Celine Hollywell]

No. He does have a cute dog though. Or his partner does because it says.

[Jordy Hayes]

He raised from valor.

[Celine Hollywell]

But we got.

[Jordy Hayes]

We gotta hit the gong for you. Thank you so much.

[Celine Hollywell]

We're hitting the gong for me, of.

[John]

Course, I mean, and all the dogs currently getting studied. What's the next big milestone that people should be looking out for?

[Celine Hollywell]

The next big milestone. I mean, we're just trying to bring this damn drug to market. Honestly, like, that's a big one. Hopefully in the next year or so. I mean, pray for us. It's like the hard stuff's behind us, but there's a lot of hard stuff in front of us too, so.

[Jordy Hayes]

Well, good luck.

[John]

Caught between hard stuff as every entrepreneur.

[Celine Hollywell]

Is, it's a worthwhile goal anyways.

[John]

Well, I think we can close out the show with you because we actually have to hit the road.

[Jordy Hayes]

Well, first we got to tell you about eight sleep dot com.

[John]

Yeah.

[Jordy Hayes]

When we get a pod five, we got to put the animals on the eight sleep. You do have an eight sleep. That's great. We also got to tell you about Bezel. If you want a watch for. For your dog, go to getbezel.com, get him a submariner. And if you want to. And if you want to take your dog on a vacation, head over to wander, find your happy place. Book a wander with inspired hotel.

[John]

When can we buy loyal stock? I'm assuming you can't answer that.

[Celine Hollywell]

We got to raise a fund sec. Something, something. Okay. Sorry guys. Sorry, guys.

[Jordy Hayes]

Private company become a venture capitalist someday.

[John]

In a very bright future, I'm sure. But thank you for tuning in with us today. Thanks for tuning. Will be back tomorrow morning. I can't wait.

[Jordy Hayes]

See you tomorrow.

[John]

Have a great afternoon.

[Jordy Hayes]

Goodbye.

[John]

Love you. Bye.