Rage Baiting is for Losers, Everett Randle’s 5x Controversy | Jordan Nanos, Brian Halligan, Dr. Fei-Fei Li, Scott Sanders, Jeremy Allaire, Vladimir Novakovski, Andrew D'Souza, Parag Agrawal

Summary

TBPN Podcast Summary

Episode: "Rage Baiting is for Losers, Everett Randle’s 5x Controversy"

Hosts: John Coogan & Jordi Hays
Date: November 12, 2025

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Overview

This episode of TBPN dives into the latest tech and venture news, with a strong focus on the phenomenon of “rage baiting” in startup launches, institutional branding risks, and a wave of high-profile interviews highlighting the intersection of AI, entrepreneurship, cloud infrastructure, and crypto. The hosts scrutinize controversial marketing strategies, dissect the shifting standards in founder and investor culture, and feature in-depth discussions with leaders from World Labs, HubSpot, Circle, and more.

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Key Discussion Points & Insights

1. Rage Bait Marketing and Y Combinator Drama

• Main Thread: Discussion ignited by YC-backed “Chad IDE”—an AI code editor branded with "brain rot" features (gambling, TikTok swiping, dating app integration)—and an essay by Jordi, “Rage Baiting is for Losers”.
• Jordi’s Thesis [03:09–06:33]:
  • Rage bait has evolved from fringe marketing to a core “product” feature.
  • This tactic risks alienating talent, investors, and serious customers.
  • YC is urged to reinforce values: “Rage baiting is for losers.”
  • Quote: “Rage baiting for commercial purposes…was pioneered by course bros. But now, rage bait sits at the product level. It really should not be employed as a product strategy.” — Jordi [04:40]
• Debate: Is “Chad IDE” a clever viral stunt, or a red flag about the state of tech launches?
  • Some hosts defend stunts if there’s substance behind them (“low-budget launches can be effective if there’s a good product”).
  • Others warn about permanent reputational harm for YC, VCs, and the startups.

2. YC’s Brand and Institutional Risk

• Brand & Talent Impact [12:11]:
  • If even a tiny fraction (1%) of a VC’s investments are highly viral and “degenerate,” it can brand the whole fund.
  • Admittance rates at YC remain vanishingly small, fueling frustration over what kinds of ideas get through.
  • Quote: “If 1% gets 1,000x the views, you’re going to be known as the slop fund.” – Patrick [13:33]

3. Founder & Startup Launch Trends

• Younger Founders & Video Application Trends [20:29]:
  • Young talents like Sharav (age <10) and Alby (14) get huge engagement applying to YC with slick videos.
  • Discussion of whether admissions processes should reward video production over substance; YC’s original goal was simple, non-produced webcam pitches.

4. Venture Drama: Everett Randle’s 5x Controversy

• Critical Comments on Returns [28:09]:
  • Everett Randle (Benchmark) challenges mega funds’ ability to promise 5x net returns to LPs on large funds.
  • Clip discussion: “Smaller, more constrained funds can produce higher returns in venture.”
  • Heated TL responses from A16Z's Scott Kupor; tension over large fund vs. boutique fund strategies.

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5. AI Infrastructure Deep-Dive: Satya Nadella Interview Debrief

• Interview Highlights (with Tyler) [43:02]:
  • Satya now openly “AGI-pilled” — describes AI as both “copilot” (productivity) and “guardian angel” (supervisory intelligence).
  • Microsoft’s “hyperscaler” model: Committed to multi-model support, balancing subscription vs. usage pricing.
  • Detailed on AI chip strategy, data center capex, and dependence on cloud partner OpenAI.
  • Quote: “If you want to do that [single customer] strategy, just vertically integrate.” – Satya (as paraphrased by Tyler) [45:15]

Key Takeaways

• Microsoft is carefully balancing building proprietary chips vs. leveraging OpenAI and other partnerships.
• Satya downplays “chip pause” concerns—emphasizing that lower buildout protects against rapid obsolescence.
• Upcoming “superintelligence lab” inside Microsoft, led by Mustafa Suleyman, will train both generalized and domain-specific models [52:46].

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6. AI Data Center & Depreciation Economics (with Jordan from SemiAnalysis)

• Major Points [62:24–71:53]:
  • The big cloud players are stretching asset depreciation schedules (now 5–6 years) — not solely “financial trickery,” as hardware has long productive life.
  • Potential for a surplus of used GPUs and how that could impact the broader AI economy.
  • Jordan expands on geopolitical drivers for global data center expansion; regulatory pressures are a major factor.

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7. Guests & Announcements

Dr. Fei-Fei Li (World Labs) [119:22–149:08]

• Launching the first publicly available generative 3D world model (Marble).
• Vision: AI’s “spatial intelligence” still a frontier, underappreciated beyond language models.
• Advocates for creative agency and tool use layered on generative models.
• Quote: “Human creativity is precious... AI is here to help and augment.” – Fei-Fei Li [142:05]

Brian Halligan (HubSpot, Sequoia) [92:07–112:43]

• New podcast on “the CEO’s job” and how the rulebook is being rewritten in the AI era.
• Observes rise of “five-tool CEOs” (can code, recruit, design, sell, envision).
• All founders are “wartime” CEOs, maxed out on stress; remote work is “dead” among new high-growth startups.

Scott Sanders (Forterra) [149:47]

• $238M Series C for physical defense platforms—focus on modular, open architectures for integration with radar, autonomy, and munitions.
• Defense procurement reform is overdue; new warfighting realities demand new priorities.

Jamie Allaire (Circle) [159:10]

• USDC activity skyrocketing; billions in on-chain payments.
• Circle’s ARK Network aims to be a foundational blockchain for agent-driven, global payments.
• Regulatory harmonization and cross-chain interoperability emerging as critical themes.

Vlad (Lighter) [170:27]

• Decentralized exchange on Ethereum designed with verifiability, low cost, and composability as first principles.
• Reflections on FTX: the real lesson is the necessity (not sufficiency) of transparency.

Andrew D’Souza (Boardy) [182:08]

• “Boardy” is an AI-based super-connector for founders and investors; already handling $16B in raises.
• Goal: scale business introductions to any economic use case (fundraising, hiring, partnerships).

Parag Agarwal (Parallel AI) [191:29]

• $100M Series A announced for agent/web search infrastructure.
• Focus: high-quality, authoritative research layers for web-using AI agents, with business models for publishers (including payment for access).

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Memorable Moments & Quotes

• “Rage baiting…should not be a product strategy. It’s a way to get the people you need on your side praying for your downfall.” – Jordi [04:50]
• “If 1% gets 1000x more views, you’re gonna be known as the slop fund.” – Patrick [13:33]
• “Small funds produce higher returns in venture. That seems to be a reasonable take.” – Patrick [37:51]
• “Microsoft is a hyperscaler…we want to prioritize the long tail of high margin users.” – Tyler summarizing Satya [44:44]
• “All founders I talk to are at a 10/10 stress, all the time. Wartime all the time.” – Brian Halligan [107:50]
• “We're the most degenerate, insane in your face…you're not going to be able to say '99% of my investments were quality’ when all anybody knows is your rage-bait product.” – Patrick [13:12]
• Dr. Fei-Fei Li: “Human creativity is precious. AI is here to help and augment, not replace.” [142:00]

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Timestamps for Key Segments

• Chad IDE & Rage Baiting: 00:00 – 20:29
• VC Impact of Viral Stunts: 12:11 – 16:41
• Venture Drama (Everett Randle): 28:09 – 36:43
• Satya Nadella AI Interview Debrief: 43:02 – 56:38
• Depreciation Economics & Data Centers: 62:24 – 77:22
• Fei-Fei Li (World Labs): 119:22 – 149:08
• Brian Halligan (Sequoia & HubSpot): 92:07 – 112:43
• Scott Sanders (Forterra): 149:47 – 158:20
• Jamie Allaire (Circle): 159:10 – 169:51
• Andrew D’Souza (Boardy): 182:08 – 191:04
• Parag Agarwal (Parallel AI): 191:29 – 198:09

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Additional Topics Covered

• Young founders and evolving application norms at YC
• The latest in large model training, hardware constraints, and cloud infrastructure builds
• Shifting regulatory approach to stablecoins globally
• Defense tech, procurement reform, and edge compute for warfare
• AI-powered business applications for networking, fundraising, and research
• New funding rounds for fast-growing AI and infra startups

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Conclusion

This episode brings together sharp analysis of the ever-blurrier line between viral marketing and lasting product moats in the startup world, with deep dives into the technological and economic underpinnings of the ongoing AI and web3 revolutions. It features industry insiders at the center of these shifts sharing candid reflections and plans, providing a multi-faceted view on where tech, venture, and product culture are headed next.

Open invites go out to today's controversial founders and industry leaders — the TBPN team promises to "play into it" and test every real product behind the latest stunts.

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For deeper context, listen to these segments:

• Jordi’s “Rage Baiting is for Losers” essay [03:09–06:33]
• Satya Nadella AI/Cloud Interview [43:02–56:38]
• Fei-Fei Li on AI World Models [119:22–149:08]
• Everett Randle’s “5x” Soundbite [28:09–37:51]

Transcript

[Patrick O'Shaughnessy]

You're watching TVP. Today is Wednesday, November 12, 2025. We are live from the TVPN Ultradome, the Temple of technology, the fortress of finance, the capital. What's going on over there, shorty? You got caught? Lacking.

[Jordy Vandeput]

I was publishing an essay.

[Patrick O'Shaughnessy]

You were publishing an essay? It's live on X now. You can go listen to it. You can also [e-mail] our substack will email you every morning with the the TVPN newsletter. And 500 words from me or Jordy. It's a lot of fun. Go check it out. Also check out ramp.com, time is money. Save both easily, use corporate cards, bill payment accounting, and a whole lot more all in one place. The thing that got Jordi to learn to type was this video, this launch video. You were like, I gotta write an essay. I gotta lock in. I gotta learn how to write because I gotta respond. It's enraged me. Were you enraged?

[Jordy Vandeput]

I wasn't enraged. I try not to let the Internet make me mad.

[Patrick O'Shaughnessy]

Okay, but they were trying to enrage you, and they enraged. Baiting me.

[Jordy Vandeput]

They were baiting me.

[Patrick O'Shaughnessy]

Made you angry?

[Jordy Vandeput]

Yeah.

[Patrick O'Shaughnessy]

You got angry. You weren't enraged. You were below enragement, but you were above angry. And so you had to put him in the truth zone. You had to write a long post, an essay about it. We'll go through it, but I'd love to watch the Chad idea Brain rot code editor video first. I want to see. I want to see the video for myself. Let's play it. Okay, so he's got some Newport cigarettes. He's packing, pulls out a cigarette with the Stanford, lights it up. He's got the cut off Stanford cut offs. What is this music that's playing? He's got the. The guitar in the background. And what is he playing? Some sort of plink.

[Jordy Vandeput]

This is steak.

[Patrick O'Shaughnessy]

Oh, this is steak. Okay, so this is gambling.

[Jordy Vandeput]

So he's gambling, and he's gambling in the ide.

[Patrick O'Shaughnessy]

Okay, So I assume that means he's won something or other. I actually don't know what the stake UI looks like. Okay, so he's done winning. He has won the gambling session with stake, and now he's back in his ide. And he writes a prompt and he says, test the code. And it pulls up some sort of mobile game that it's playing. Do you know what this is?

[Tyler]

Clash Royale.

[Patrick O'Shaughnessy]

This is Clash Royale. Okay.

[Jordy Vandeput]

Have you played?

[Tyler]

I have played. In middle school. Yeah.

[Patrick O'Shaughnessy]

Interesting. I never played. I never really got into any mobile games. I did Play Politopia. I like Polytopia. That's a good game. It's a mobile game. It's like Age of Empires but on your phone.

[Tyler]

Elon is a big fan of that.

[Patrick O'Shaughnessy]

Elon's a big fan of it. And with Polytopia, actually the entire Elon universe is sort of into Polygon. Polytopia. It's like, it's like how you gain status at some of these companies. It's like Polytopia.

[Jordy Vandeput]

So I'll start by saying I think the video is funny.

[Patrick O'Shaughnessy]

Okay.

[Jordy Vandeput]

And I'm sure the founders are smart.

[Patrick O'Shaughnessy]

Okay.

[Jordy Vandeput]

And I think they. They for. For a low budget launch video, I think they did well. They broke through.

[Patrick O'Shaughnessy]

That is a very low budget video that. That literally cost nothing.

[Jordy Vandeput]

Yeah.

[Patrick O'Shaughnessy]

Okay.

[Jordy Vandeput]

So I think that's great. And I'm not. And I want to be clear that I'm not bearish on the founders at all, but this made me think of something and I'll read through my post. So the title of the essay that I just put out, rage Baiting is for losers. This is in itself ragebait. If you have been rage baiting, there's sort of levels. But I said yesterday YC announced Chad Ide, aka the Brainrot code editor. Chad is an AI code editor that allows you to gamble, watch TikTok and use dating apps while you work on coding tasks. Their launch rightfully got a lot of attention. On one hand, it's funny. On the other hand, what are we doing here and why does this belong in the official YC account? To understand Chad Ide, Clulee, icon, friend, and the new class of Gen Z startups, you have to understand the online environment that these founders grew up in. If you grew up on the Internet and you studied how and why certain people would regularly go viral, you know that making people mad has and always will be an effective way to get attention. The feedback loop is simple. You make something that makes people angry and people comment, share and dunk. And because feeds are optimized to show posts with high engagement the most, you get a lot of reach. Rage baiting for commercial purposes, in my view, was pioneered by Coarse Bros. People like Tai Lopez realized that making the masses mad was an effective way to drive course sales. You could flaunt Lamborghinis, make a bunch of people angry, and as long as a handful of people found their way into their course, it was a viable, repeatable strategy. Historically on X, rage baiting was a marketing strategy, not a product strategy. Accounts like Sweaty Startup, AKA Nick Huber frequently post Things to get an angry reaction and the subsequent reach. But behind the scenes, Nick has always been running a pretty normal commercial real estate fund. In 2025, rage baiting has become a product strategy. Cluley started as an app for cheating on coding interviews. Chad Ide's only known differentiation from the other hundred AI native ides is that you can gamble and swipe on dating apps in it. The ragebait is sitting at the product level now. It's becoming clear that while Ragebait might occasionally work as a marketing strategy, it really should not be employed as a product strategy. Running a successful VC backed company requires you to build a coalition of people that want to see you win. Getting media, investors, talent and customers on your side is not an easy task. Rage baiting, whether at the marketing level or product level, is the most effective way to get people who could be potential investors, customers or team members to actively prey on your downfall. YC has long provided some of the most durable, high quality, generalizable advice for startups. And I believe that it has had a tremendously positive impact on the companies that go through YC and even those that don't launch now make something people want, do things that don't scale, ignore your competitors are just some, some of those. So as someone who believes that YC is one of the most important and influential institutions in tech, I believe it might be time to include this in their list of essential startup advice. Rage Baiting is for losers. So again, I think, you know, I'm sure that, I'm sure that there's like more to chat Ide than we've seen so far. But I do think it's notable that Rage Bait has moved from kind of a fringe marketing strategy to a marketing strategy within tech to now living at the product level. And I just don't think that's going to create a lot of enduring value for the companies that pursue that strategy.

[Patrick O'Shaughnessy]

Yes. So the, the, the reaction to this was very negative and I think there's a few. It really has to layer the stack.

[Jordy Vandeput]

It ends up, it ends up, it ends up impacting the brands of the firms that fund these ideas. Of course, of course there's a post, I'll try to pull it up here. Let's see here.

[Patrick O'Shaughnessy]

The most important, different, like the most important thing in your piece that I liked was this idea that there is Rage Bait marketing. Doing a stunt, doing something a little bit crazy, but then delivering a quality product is separate from making the product itself rage baity. And so I think a lot of people when they saw this video they wanted, they were wondering, what does the product actually do? Because all you've told me is that you created an April Fool's joke. And Google's been doing April Fool's jokes for years. Some of these April Fool's jokes I was looking at were insane. In 2000, just a couple years after they launched, they created a fake mind reading search engine. Then they did Pigeon Rank. An explanation that Google's algorithm relied on trained pigeons. They launched a free home broadband service so Internet delivered through your toilet. They announced Google Translate for animals. You could talk to your dog and it would try and translate. These were all jokes. They were never real products. It was just the Google team having some fun. On April Fool's Day, they would get a bunch of attention and then they would route you to the safest, fastest, most secure email system possible.

[Brian Halligan]

Right.

[Patrick O'Shaughnessy]

Like a real product. But they would have a lot of fun and sometimes they would even build a little, like, web experience around it. But at the end of the day, it was like, yeah, but also we're ready to sell you servers with Google Cloud platform, or we're ready to sell you, like, you know, ad units on Google. Like, it was like, we have a serious business. And so the question for me and the question I had for Tyler was, what's actually under the hood at Chad Ide? The company is not called Chad Ide, it's called Clad Labs. The steel man here is that, hey, Ides are boring. You gotta do something funny, film a funny video, create a fake product, but then have something under the hood that is actually real, that does actually advance the conversation and is maybe something that a real product.

[Jordy Vandeput]

Tyler, try to sign up. Need a code.

[Patrick O'Shaughnessy]

Yeah. So what happened? We asked you to sign up.

[Jordy Vandeput]

And one thing I would say before we go further, I think this would have been a brilliant kind of like, stunt. If they did it as a stunt and it wasn't core to the brand that they're building, it wasn't core to the product. If they did it. If they released a product and then later said, hey, we're adding this brain rot function.

[Patrick O'Shaughnessy]

Totally, totally.

[Jordy Vandeput]

Like, that would have been, that would have been, I think, a good reaction.

[Patrick O'Shaughnessy]

If it was April 4th and Michael Truell at Cursor or Scott Woo with Windsurf were like, we're doing a brain rod version of the Ide. Everyone would be like, that's hilarious. Okay, now back to using Windsurf and Cursor. Right? Like, that's just what.

[Jordy Vandeput]

Yeah. And I don't think it certainly probably is not a fit for Cursor's brand.

[Patrick O'Shaughnessy]

No, not at all.

[Jordy Vandeput]

If you're creating something to try to compete in that space, it would have been a good strategy.

[Patrick O'Shaughnessy]

But again, there's a. I would actually fight you on that. I think that Cursor has this very. Michael Truill has only done like a few podcasts. He did that podcast with Patrick Collison. He's this very, like, thoughtful software engineer. Scott Wu is this IMO gold medalist. Like, there's something that actually would be very funny and might actually break through if they did some silly brain rotty stunt. Because it would be like, well, obviously they're not actually doing that. Obviously what they're focused on is just improving developer productivity. And instead this, it just, it hasn't answered a lot of the question of like, what's behind the curtain, what's behind the marketing? Because if it's brain rot stuff, if it's jokes all the way down, like, what are we really doing here? But Tyler, what was your experience actually trying to use this product?

[Tyler]

Yeah. So I go to the website. You can't download it yet because it's still in beta. You need a code. I DM the founders, but they didn't get back to me. But like, I mean, the company is not Chad Labs, it's Clad Labs. This like, it's the Chad Ide. But like, this is obviously a marketing stunt. I kind of disagree.

[Patrick O'Shaughnessy]

Yeah, but can you get a product from Clad Labs? Like, Google would come out with a joke, you know, pigeon based algorithm or something like that that would be out. Or like Google Translate for animals would [e-mail] translate.com that day. But Google Translate would still work. So like walk me through the Cloud Labs product. Like, what is their core product outside of the stunt?

[Tyler]

Yeah. So, I mean, obviously I haven't tried it, so I'm kind of giving them the benefit of that here. But like when you go to the download page, there's the options, like, which brain rot do you want?

[Patrick O'Shaughnessy]

Yes.

[Tyler]

And it's like, you know, steak or like Minecraft Parkour or whatever. And then there's an option that says, I don't want brain rot.

[Patrick O'Shaughnessy]

Okay.

[Tyler]

So there is obviously a product here that is like, not just. It's not just the Brainrot. That's not the entire company.

[Patrick O'Shaughnessy]

Yes.

[Tyler]

Like when you go to the pricing page, it says that, it says like there's, you know, the free pro, super whatever tiers. It's not listing like, oh, this one has the Minecraft one. It says like, oh, it has unlimited agent tool use.

[Patrick O'Shaughnessy]

Okay.

[Tyler]

Like there's obviously a product here. This is a marketing stunt. I like believe that.

[Patrick O'Shaughnessy]

Okay.

[Tyler]

I like, I kind of disagree that.

[Jordy Vandeput]

I just think, I just think it's, I just think it's a poorly executed stunt.

[Patrick O'Shaughnessy]

And because you have not told me what the differentiator is, like, how is this better than Windsurf? How is this better than cursor? Like, what is their value prop other than just like, oh cool. It's a newer, it's a newer cursor with less funding and the team's less serious but they're good at making viral videos. Like, what does it mean?

[Jordy Vandeput]

Part of the reaction here that I think is, you know, there's an account developing Valhalla is quoted. The post from YC said this is what we're promoting. Instead of telling young 20 year old founders to take us to the moon to create better societies, to improve the material conditions of our fellow man, YC is funding garbage that is only making our society worse. You don't hate VCs enough. So I think there's just naturally like, I just look at YC as, as an institution that has consistently provided just very sort of like, like the best quality advice that's generalizable. Right? For, for just any, any person that wants to get into startups.

[Patrick O'Shaughnessy]

So let me tell you about Restream 1 livestream, 30 plus destinations, multi stream reach your audience wherever they are. There is, there's this post by Shield Monot here. He says met a very successful founder who said I ch because they gave me credibility when I needed it. Now the fund backs everything, including the dumbest ideas I've ever seen. I don't think the next wave of founders will pick them. The credibility they had is gone. And I was thinking about how AUM weighted brain rot or AUM weighted slop is not an excuse for slop and controversial investments. If you put 1% of your fund into something that is just going to go all over the Internet and be like, we are the most degenerate, we're the craziest, we're the most insane, we're the most fraudulent, like in your face company. Even if it's only 1% of your fund, you're not going to be able to say like no, no, no, no. 99% of my investments are just like, you know, trying to cure cancer genuinely or like actually trying to improve developer productivity. Or like 99% of my investments are just reasonable down the fairway like good businesses. But 1% of them. I took a flyer. 1% is a little bit crazy. Well, if that 1% gets 1000 times more views than your enterprise SaaS portfolio, you're gonna be known as the slop fund. So you need to be careful about that because the nature of the Internet is that a viral rage baity video can get 1000 times more views than your latest bet on AI legal services that might actually be helping improve lawyers efficiency or something like that, you know. So yeah, in terms of branding, part of it, it's real, It's a real.

[Jordy Vandeput]

YC is always had. You know, one of YC's challenges as an institution is that they can only accept something like. I think it's like less than 1, isn't it? Less than 1%.

[Patrick O'Shaughnessy]

Oh yeah.

[Jordy Vandeput]

So super small, you know, very, very low acceptance rate.

[Patrick O'Shaughnessy]

Yeah.

[Jordy Vandeput]

And so if you're a founder that applied with an idea that you think is, you know, world positive and then you see them announcing this kind of stuff, they're going to be, you know that those founders are going to be even more frustrated. Right.

[Patrick O'Shaughnessy]

I want Tyler's reaction. But first I want to tell you about Privy Wallet infrastructure for every bank. Privy makes it easy to build on crypto rails, securely spend a white label wallet, sign transactions, integrate on chain infrastructure all through one simple API. Tyler, what do you think?

[Tyler]

Okay, so like as a steel man, like say that I have some new way to do, you know, agents in my editor and it's like it actually works way better than Cursor, it's way better than Windsurf, it's better than everything else. And I apply to YC with this thing. Okay, there's like probably what like 10 other YC companies that are like literally YC companies in the same batch doing similar, you know, coding editor stuff. How do I differentiate myself? I feel like this is like fairly reasonable, like to get more views. Like imagine I think from their opinion, the idea is like okay, we get some users that are think it's like funny to gamble in their id and then they realize like, oh, this is actually a pretty useful feature. And this is all assuming that they actually have good tech underneath. But like what like Jordy, if you were in YC and you had a coding editor company, like how would you launch it? Yeah, how do you like recommend? Like instead of doing stuff like this, how do you, how do they differentiate themselves?

[Patrick O'Shaughnessy]

If Clad Labs had launched something and they were just like, hey, like we're, you know, we're building a better ide, here's how we Use our model. Oh, Cursor. They're currently in a fight with Anthropic. The rates are through the roof. Ours is cheaper for this one reason. And we have this better UI and better functionality. And we also have this engineer who figured out this little solution. And we work on mobile and they don't. Or we work on iPads and they don't. Or we work for Fortran and they don't. They only do Python. You know, there's a million ways to, like, articulate your differentiation. They certainly. It doesn't seem like they even tried to do that. It doesn't seem like they even tried.

[Andrew d'Souza]

Sure.

[Tyler]

But I think you could probably find companies in this YC batch doing exactly that. You don't know their name.

[Patrick O'Shaughnessy]

Yes. Yeah, yeah, that is true. That is true.

[Tyler]

You do.

[Jordy Vandeput]

Like, I just go back. I just go back to what I said, which was. Which was separate out the RA from the core product and have it be like a marketing stunt. I still think you could have gotten the same amount of attention. But then people would go in and they'd be like, wait, there's actually a really cool novel.

[Tyler]

I don't think we know for sure that they're not doing that. This seems to like. When I read this, I see it.

[Patrick O'Shaughnessy]

As a marketing, but it's like. So I would agree with you if I could go to cladlabs.com and see the actual product. But it's like cladlabs.com is not even purchased. Like, they, like, there's literally no information. Okay, Cloud labs.

[Tyler]

But when you go to the site, it is just like the brain rods.

[Patrick O'Shaughnessy]

Exactly. Like, where is the real product? There is no real product here. And that's what Jordy's risk is that they haven't built anything behind the scenes. It's all marketing. It's all stunt. And it's like, yeah, doing a stunt is maybe fine, even if it's designed to enrage people. It's like, I don't know, maybe you shouldn't do that. Maybe people are against even doing the stunt marketing. I think it's actually okay. I think we went through this. Cluley, like, there was a moment where it was. Cluly was doing rage bait marketing. And there were people that were upset about that, but there were other people that were upset about this idea of the product you're making is to help people cheat and cheating is bad. It's like the product you're making is to help people gamble and gambling is bad. And so if you are anti gambling, you are anti this product that they built. And now they have the opportunity to say, no, no, no, here's the real thing. And they haven't done that yet. And there's no, like, oh, click seven layers deep in the menu and you can see that it's like, oh, this was a stunt for this other thing. Like, they haven't actually put out any breadcrumbs of what they're actually building. And so I think that's why it leaves such a bad piece of feel like they spent all y working on a stunt.

[Jordy Vandeput]

And I'm going to give them the benefit of the doubt that I'm sure they're smart and I'm sure they have a deeper, broader vision. And I think the reality is having these moments between prompts is an unsolved problem.

[Patrick O'Shaughnessy]

100%. 100%. And so, yeah, it feels like. It feels like they. They risk sort of going the clulee route, which is over optimizing for rage bait product development even. And. And then they have to, like, figure out what the final product is where. It's like, okay. I think it's okay to spend. To spend, you know, a day in YC thinking about, like, what's our marketing strategy? That that video did not look expensive to film.

[Jordy Vandeput]

Yeah.

[Patrick O'Shaughnessy]

What feels. What feels expensive is like, it seems like they actually built the full product. Like, it feels like they built the full brainwrap product.

[Jordy Vandeput]

Yeah.

[Patrick O'Shaughnessy]

And it's like, you didn't need to do that. You could have just gone viral for the video and then followed up and been like, it would have been so easy if at that end of that video been like, be like. Like, that's what people feel like. Gen Z entrepreneurs build. Yeah, but we didn't want to do that. So we actually built this video.

[Tyler]

But I'm not gonna. I want to try the. I don't want to gamble, but I want to see it actually, like, in id. That's like, funny. But if they. At the end they say, oh, it's all a joke. It's like, okay, it's another ide. I don't need another one. But I want to.

[Patrick O'Shaughnessy]

What do you.

[Tyler]

I want to try it.

[Patrick O'Shaughnessy]

You can just do window management. Like, what are we actually talking about here? Just put TikTok on the left side of your screen. I have two windows open right now. This is a Mac native feature.

[Jordy Vandeput]

Okay, well, let's pull up this video from Sharav Arora, who's going viral this yesterday. He said, tips to apply at YC batch winter 2026. And I think Sharav is a literal child. It seems to be under 10 years old. Something like that.

[Patrick O'Shaughnessy]

He looks very young.

[Jordy Vandeput]

Yes, looks very young. And the reason that I think.

[Patrick O'Shaughnessy]

Wise cognition. Here's the Behavin, the AI software engineer. Crush your backlog with your personal AI engineering team. You want to play this video? Would you have.

[Fei-Fei Li]

First tip, you should have some clear goals, like what you should do after funding and you should have at least.

[Jordy Vandeput]

I can barely hear this, but okay, we can pause. But the reason, the reason I included this is because I think there's a lot of people like Sharav and tons of young people that look to YC as like, like whatever YC is promoting, they approve.

[Patrick O'Shaughnessy]

Yes, yes.

[Jordy Vandeput]

They give a lot of advice. If, if they're sharing something on their social account, it means it has weight. It means it's a valid strategy. And so I just, I want to avoid a scenario where the Shirovs of the world think that they need to rage bait in order to like, break out in this industry.

[Patrick O'Shaughnessy]

Right.

[Jordy Vandeput]

Because it's just, that's not, it's not the reality. You can just build a great product. You can get. Let that speak for itself. You can find ways to market it along the way.

[Patrick O'Shaughnessy]

Yeah, I mean, I feel like that's part of the reason why Gary Tane was tapped as the president. Like, he, he. I don't know all the complex behind the scenes stuff, but he was putting out content on his YouTube channel and certainly carrying the torch of YC forward where he was definitely speaking to the next generation of entrepreneurs in an extremely positive way, telling all these fascinating stories about his entrepreneurial career, his values. I mean, he hosts meetups at churches and has really focused on building an extremely positive community. And there is a question about the YC X account. Is it a, is it a portfolio list? Is it every company that launches? Or is it. Or is it a library that they're building for startup advice and they stand by everything that happens there. There's, there's two different things that you can use the account for. Right now it feels like it's a little bit of like, hey, like, you know, if it gets views, we're going to put it up there. If it's fun, if somebody's doing something fun. But you don't always have the same, you don't have the same. Like, like the context really matters. Like, I think that video goes more viral because it's on the YC brand account as opposed to, oh, some people got into yc, they pivoted, they Came up with this funny video. Like they're just having fun. Like they're kind of after yc. There's a whole, there's a whole era where you go through yc, you hit demo day and then a few months later, like there's companies that still have a little bit of cash, but they're not really building the same thing. And they're. And it's not like I would not hold the YC partners responsible for what YC companies do post pivot, post demo day where yeah, the company is still a YC company. You know, you do have, there is sort of a code of conduct in YC and they can kind of kick you out a little bit. But legally, like there is a contract where once they invest you can't just take the money back because they think you're doing something immoral.

[Brian Halligan]

Yeah.

[Patrick O'Shaughnessy]

Unless it's like fraud. If it's legal, like they can't just ask for the money back.

[Jordy Vandeput]

So Teddy Blank says sharing a video of Albie, who is a 14 year old applying for YC went extremely viral earlier this week. Got 3.6 million views.

[Patrick O'Shaughnessy]

Wow.

[Jordy Vandeput]

14 year old founder. Yeah. Let's play it.

[Patrick O'Shaughnessy]

I'm Alby, I'm 14 and I'm based in Sydney, Australia. I've been building things. Good editing since I was six or seven.

[Jordy Vandeput]

Bruh.

[Patrick O'Shaughnessy]

Don't get the joke. Really good editing. Well, I've been building things ever since I was nine. First writing code at code camps, then building Roblox games and even launching a soccer gear brand when I was 12. Platform where teams learn the real world skills that school forgot. Coding, AI, content creation, etc instead of boring textbooks, books, you level up, earn XP and unlock challenges as you go. All while learning from top founders, creators, innovators and other young people doing amazing things. I started Finkel because school wasn't teaching me or my friends how to actually build, create or launch.

[Jordy Vandeput]

Teddy says my default reply to high schoolers hitting me up for VC funding is put me on the phone with your parents.

[Patrick O'Shaughnessy]

I'm Alby, I'm 14 and this is awesome. I love this. I hope he gets in. I should recommend this guy.

[Jordy Vandeput]

And if he doesn't get into yc, Alby will hire you.

[Patrick O'Shaughnessy]

Yeah, head over to Los Angeles, head over to Hollywood.

[Jordy Vandeput]

Yeah, I don't.

[Patrick O'Shaughnessy]

It's interesting because it's sort of a, sort of a. Like you're not really supposed to do this when you apply to yc. Like the application video is not like they definitely don't want a game of like A Red Queen's race where it's about the video production but at the same time, like, you gotta play the game on the field. Like you're supposed to just turn on the webcam and basically just talk for one minute. That's how you apply to yc.

[Jordy Vandeput]

One shot it.

[Patrick O'Shaughnessy]

Yeah, you're supposed to just one shot it. No editing. Because they don't want it to turn into oh, to apply to yc, you spend two weeks doing an edited video. They're like, no work on your product. And then the marketing is like the last little cherry on top. Like, that's always been the YC mantra. And that's a little bit of this Cloud labs thing. Although the weird thing is the video, I love the video. It's funny and it's cheap and it's clearly just like a bit. And they did it and it was two seconds. But then it feels like they didn't, they didn't give me the payoff of like, oh, okay, you guys are funny and you're working on something cool and interesting and hard and different. And so I just feel like I didn't, I didn't get the payoff of the joke. Like the beauty of those Google April Fool's Day was that that was the era when they were on such a tear. You would go and you would go to a Google April Fool's joke and then you would land on their product blog and you would be like, oh, wow, they did some crazy update to Google Maps and now you can see your house from the street because they just invented Street View. This is incredible. They were delivering on so many different levels that they earned the right to make the April Fool's joke. They earned the right to joke around because they also had a massive monopoly in search engines. And so they were printing money. So no one was like, oh, this is so unreasonable that they took a couple hours out of their developers time to go build some funny gag. Anyway. Bigma.com Think bigger, build faster. Figma helps design and development teams build great products together. Get started for free.

[Jordy Vandeput]

SHIELD says met a very successful founder who said, oh, I read goes fund credibility.

[Patrick O'Shaughnessy]

I read this one. We covered this.

[Jordy Vandeput]

Sorry, sorry.

[Patrick O'Shaughnessy]

Yeah, we jumped ahead earlier. Yeah, this was my point about, about if you, if you, even if you put 99% of your AUM into boring B2B SaaS or even curing cancer, if you do one deal that's gonna get a little crazy and go viral, that's gonna have a big impact on the fund overall. Should we go to more Drama in the venture world. EV Randall, who's coming on the show on Friday, went on Harry Stebbing's show, 20 VC and is putting the timeline in turmoil over some comments about other funds. I'd love to play this clip from the actual interview. It's in a minute.

[Jamie Allaire]

I don't think Robbie or Hamant or even Ben and Mark at this point. I don't think that they can go to LPs, one of those legs of the stool and say, hey, this, this basket of funds that we're making you invest, party, pursue across, we're going to get you 5x net on that. I don't think they can say that or they at least can't say that with a straight face. And if you look at the recent return data, I think it suggests that. So I think they'll be able to make an immense amount of money on an absolute basis. But I think a lot of these LPs are in the business to make or in venture to make high money on money returns. Like they had PE for the low return stuff and they probably get better liquidity from pe. They're here for the high money on money returns. And this is one of the reasons why I'm extremely excited about benchmark competitive position in today's market. Because we can go to LPs, we can say, hey, we're shooting for higher 5 than 5x net. We have the historical track record to back it up and we have the fund sizes to back it up as well. I mean you had miles from Carnegie Mellon come on here and do the awesome math and the very clear math of hey, do you know how hard it is to return forex net on $8 billion, $10 billion? It is immensely hard and it's, it like defies the laws of physics. So I think there's a difference between are they going to make a ton of money and are they going to produce the returns that LPs really want this asset class to produce? Two very, very different things. But for now, like the rubber is like the rubber won't meet the road because as you mentioned, there's just so much global demand from LPs for exposure to private technology and they are happy to take lower returns. And so I don't think there's any end in sight. But I think on a relative basis between all of these different constituents and all these different gps, there's a huge, huge delta and a huge differentiation between who can actually produce venture like returns.

[Patrick O'Shaughnessy]

Boo is not AGI pilled. Boo 10x. You're going to tax the fund. Just 10x it again. Just 10x it again. 10x the fund. Raise it all with raise $100 billion fund and 10 exit. Just 10 exit and we're going to 10 exit again. No, obviously that was on a little.

[Jordy Vandeput]

Bit of damage control.

[Patrick O'Shaughnessy]

Wait, so I want to hear what, what exactly did he say? The first line. He says they cannot go to LPs and say with a straight face that they can do 5x net. Can we play the actual clip? Because I feel like that's not quite right. What do you say?

[Jamie Allaire]

I don't think rather Hamont or even Ben and Mark at this point, I don't think that they can go to LPs. One of those legs of the stool.

[Jordy Vandeput]

Said, I don't say, hey, this basket.

[Jamie Allaire]

Of funds that we're making you invest party Pisu across. We're going to get you 5x net on that.

[Patrick O'Shaughnessy]

We're going to get you.

[Jamie Allaire]

I don't think they can say that.

[Patrick O'Shaughnessy]

Because maybe they can go with a straight face and say we're going to get you 6x. Boom, we're going to get you 10x net. Maybe they can say that with a straight face.

[Jordy Vandeput]

Taylor knows Nancy Pelosi is not afraid to say I'm going to 10x it. I'm going to 10x it again.

[Patrick O'Shaughnessy]

I'll take it then I'm going to 10x it Again. Yes. EV is fighting for his life a little bit. Tagging big shots, quick edits, clickbait call outs, giving me pick me vibes. People are not happy about this clip hitting the timeline. People are taking shots back and forth. What actually happened here?

[Jordy Vandeput]

Part of the reality is I don't think no fund manager can really go to LPs and you can share that. You believe there's a chance we'll get a 5x net. But isn't it like 99% of funds just don't come anywhere close to that?

[Patrick O'Shaughnessy]

Yeah, that's for sure true. Also, I think the broader point that he's making is something along the lines of I saw some other post about like there will be fortunes made just by getting retail investors and the broader capital that's out there in the world into the private Mag 7. So the OpenAI's, the anthropics, the SpaceXs, the andurils, there's a whole host of companies.

[Tyler]

That was also an EV Randall tweet.

[Patrick O'Shaughnessy]

Oh, that was him from. Was that him recently or.

[Tyler]

Yeah, that was I think yesterday.

[Patrick O'Shaughnessy]

Okay. Yeah. So. So like there is a world where, where you set up a fund that has lower return expectations but also lower risk and it's a great deal and LPs love it. And so I don't know, I don't know that it's that hot of a take, but it's certainly, certainly put the timeline in turmoil. Christian Garrett here is sharing the gif of digging himself deeper into the hole, I imagine. So what did that.

[Jordy Vandeput]

Part of it is that benchmarks feeling. Feeling pretty good right now. If you look at their 2020 fund, they have four, they have fireworks. What's the other one? They have a number that are. That have that they have a bunch of like multi 10 baggers at this point in that fund. So they're feeling pretty good about going to LPs and saying, look, we still got it. Yeah, still cooking.

[Patrick O'Shaughnessy]

Yeah. And, and yeah, I mean ever in Benchmark newly at Benchmark. Benchmark has not become the. The platform fund. Mega scale fund has not 10 the LP base. Certainly EV says to be clear, I slash. We love working with our friends at all of these funds. And this part was not meant as a slight slash commentary on the qual on their quality as investors. Just POV on fund strategies and the unique value prop of benchmark. I think it's a fair tweet, but it's amazing because everyone is coming out and just trash Spencer Peterson in the comments there. I took that personally. I run a big fund. I'm at CO2. We got 60 billion. What are you saying about me, buddy? You don't think I can put up with 5x? Watch me, watch me. I take that personally. I'm gonna put up 5x. I'll call you when I have 500 billion under management.

[Jordy Vandeput]

I think part of what made it feel super personal is that Harry tagged Ravi.

[Patrick O'Shaughnessy]

Totally, totally.

[Jordy Vandeput]

And Ben.

[Patrick O'Shaughnessy]

Yeah, we actively try to avoid tagging people if someone is talking trash about someone else or like subtweeting them. We don't really try and like hand hold into drama, but it is an art and it is delicate. Sometimes it's like, oh wow, they're really talking trash about that person. Sometimes it's fun. Sometimes. We've done this where, I mean we've done this with Ev, right? We've had Delian on the show, he's called out Ev and we've tagged EV in a clip and then. But it's all been fun. We've all been chatting about it behind the scenes and then obviously had them all on the show to duke it out and stuff. And that was a lot of fun. This, I don't know. It doesn't feel that big of a deal. But let's go to Scott Kapoor, obviously speaking for his former colleagues at Andreessen Horowitz, now he is the director of the Office of Personnel Management. Scott Kapoor says, since my former colleagues at A16Z are RIAs and thus cannot legally comment on what they can cannot say with a straight face to LPs, this sounds a lot like what crappy board members say. They think they understand your business in depth and make inane comments about what you should not do when as an outside observer, they have zero clue what actually happens day to day in the business. Buyer beware. What? I'm so confused by this. Okay, so he's saying that EV thinks he understands Andreessen's business, but in fact he does not understand Andreessen's business business. But I want to know what is the misunderstanding? Because the steel man, the bull case on the Indrisin strategy is that EV is making the claim that they will make more money dollars, total dollars, because they're investing out of a bigger fund size. They don't need to go and say we're going to 5x it. So it's a different pool of LPs.

[Jordy Vandeput]

Also, part of the major appeal of investing in a 16Z is that you pretty much know that you're going to get in every important company. There's one.

[Patrick O'Shaughnessy]

Okay, so yeah, maybe that's something that didn't articulate fully. I don't know. I don't know.

[Jordy Vandeput]

That's my point of view. I'm not an lp, but I happily would be. And it's because you know you're going to get some exposure to pretty much every important company. Not necessarily always super early, but at some point in the company's life cycle, it's very likely that they will take a meaningful check from a 16Z.

[Patrick O'Shaughnessy]

Yeah, yeah, yeah. I wonder.

[Jordy Vandeput]

How.

[Patrick O'Shaughnessy]

The RIA Dynamic is playing out at Benchmark. It seems like such an advantage in the vibe wars to not be able to speak freely if Andreessen can't defend themselves because of RIA rules and EV can just go on podcasts and talk trash. You kind of win by default. Like, you got to get out there, guys. You got to convert, you got to deconvert from the ria. I don't know. You got to get on the timeline, fight it out. What does EV say? He says, I think smaller constrained funds can produce higher returns in venture. Quote, this must be a shitty board member. Don't work with him incredible. Non sequitur. Thanks, Scott. Chad Buyer says, while I actually agree with Scott in general, my lived experience is most board members are useless. I've been on a board with EV and he was consistently the most prepared. Founder raved about his contributions. And Alex Klein is saying, love you both because they're beefing. Interesting. Yeah. Smaller funds can produce smaller constrained funds can produce higher returns in venture. That seems to be a reasonable take, but I don't know what they're actually saying to LPs. Where is. Wasn't Emil Michael going, chiming in as well. What did Emil have to say?

[Jordy Vandeput]

I tried to pull that up, but the underlying post got deleted.

[Patrick O'Shaughnessy]

Oh, it got deleted. Okay, well, we'll move on from it. We'll tell you about Vanta. Automate compliance. Manage risk, Improve trust with Vanta. Vanta helps get you compliant fast. We don't stop there. AI automation powers everything.

[Jordy Vandeput]

Meanwhile, over on X, people are saying, calling me unknown. They're saying I'm a boomer.

[Patrick O'Shaughnessy]

Oh yeah.

[Jordy Vandeput]

For my, for my post. Which I think is fair. But again, there's more nuance. I don't necessarily. I like there's a lot of it that I think is cool.

[Patrick O'Shaughnessy]

Should we have the founder on?

[Jordy Vandeput]

The founder. Open invite to the founder.

[Patrick O'Shaughnessy]

Okay. Open invite to the founder of, of the Brain Ide Clad labs. I am, I am actually very interested to hear what is. What the actual product is. I feel like the narrative around these rage baity stunts is always like, oh, don't play into it. Don't play into it. I'm happy to play into it. We played into it with Cluley. We had Roy Lee on the show three times. And what I said the first time was what I continue to say, which is that, hey, you're going to have to build a real product.

[Jordy Vandeput]

Part of my thesis is that Roy effectively ran this strategy as aggressively as you could. Like he, he post. There was a picture of him with a stripper.

[Patrick O'Shaughnessy]

Yeah, that was very rage baity and.

[Jordy Vandeput]

That was like the peak. And then I think he walked it back and he's adapted his strategy and now he's.

[Patrick O'Shaughnessy]

And so, and so our take was like, it was like, he's going to have to build some good, good software at a certain point, a good product. And we tried the product and Tyler churned and like it just wasn't adding a ton of value. It wasn't moving.

[Jordy Vandeput]

But now they're opening iterating on the.

[Patrick O'Shaughnessy]

Product and now they're iterating on the product. And so now I would Imagine during the Cluley heyday, I would imagine that 80% of the team's hours were spent on marketing and 20% were spent on. On product. Maybe now I think it's flipped, and I think that's very bullish. I think that's good. But, Tyler, you had a rebuttal?

[Tyler]

Yeah. I mean, I would just say, like, this seems very different from, like, you see the gambling on your credit card statements or whatever, like, from other accelerators. Like, this feels very different. Like, this is like, the marketing. I think people kind of tend to group all of this stuff together where it's like, what Grand Daniel was talking about yesterday, where it's like. Like some of these are, like, immoral companies that you could say, sure. I think this feels different than that. It feels much. At least to me, it feels much more of a marketing stunt than, like, this is the product. We want people to be gambling while writing code.

[Patrick O'Shaughnessy]

Yes. But what if the whole product is. And this is all we've. This is all we've seen is a. A VS code fork with minimal autocomplete. They're always, you know, a year or two or five behind Cursor and Windsurf. And yes, it has the ability to add Tinder and Stake and sports betting in it and like, that. The product that they are telling us they're building is what they're building and they stay with it for five years. Like, what do you say then?

[Tyler]

Yeah, then that's not good.

[Patrick O'Shaughnessy]

So basically you're. You're just saying you're open to a pivot.

[Tyler]

It's not even a pivot. It seems to me like the company is everything, at least in my opinion, points to this being a marketing stunt. The company is named Cloud Labs.

[Jordy Vandeput]

Yes.

[Tyler]

This feels like a marketing stunt. Marketing stunts. It tells me that there actually is something different underneath than just adding.

[Patrick O'Shaughnessy]

Yeah, no, no, I am super optimistic about it. I would love to see, like, I don't know, by the end of the month we know what is actually going on here. Certainly by demo day. When is demo day? December 3rd, I believe. December 3rd. We should know what's actually going on with the company. What's the real product. So they did their stunt. They got a bunch of people, hopefully to sign up. Check out the website. You got your early user base. Typically in yc, you just ask your other YC batchmates to try it. Maybe you need to go broad, go viral. You did that. Now draw the rest of the owl basically, is the prompt or at least say what you're planning to do. Say what you're planning to do.

[Jordy Vandeput]

Let's move on to Dwarkesh. Dwarkesh.

[Patrick O'Shaughnessy]

Dwarkesh. I haven't watched the full thing, but a massive interview has hit the timeline. Dwarkesh Patel. Dylan Patel sat down with Satya Nadella and they got an exclusive tour of Fairwater 2, the most powerful AI data center in the world. I feel like everyone's been saying they the most powerful AI data center. It appears that open that Microsoft has leapfrogged Colossus 2.

[Tyler]

Well, I think maybe this is wrong, but I think Colossus 2 will be bigger. It's just currently it's not big. Like this is the current current biggest. It's the current biggest.

[Patrick O'Shaughnessy]

Okay, okay, okay. So you had a chance to actually sit down and watch this whole interview before we started the show. Can you give me some takeaways? Where should people. Are there any timestamps that we should pull up? Are there any takeaways that people should know they go and watch it?

[Tyler]

Yeah, I wrote a bunch of notes, so maybe some of these aren't as interesting.

[Patrick O'Shaughnessy]

But before you take us through those notes, let me tell you about graphite.dev, code review for the age of AI. Graphite helps teams on GitHub ship higher quality software faster. GitHub, of course, is a Microsoft product.

[Tyler]

Yeah. Okay. So I think broadly, I would say it was pretty enlightening. I usually think of Satya as being very non AGI pilled and I think this was a bit of an update. So there's a bunch of reasons for this, I think. So early on he like in the very. I think this was one of the first questions. He's like, what is AI? AI is basically two things. This is Satya saying this, there's cognitive enhancement. So this is like your tools or this is your autocomplete. This is your copilot. Yeah, co pilot, stuff like this. And then there's like the Guardian angel. And this is like the very AGI pill where I mean, it's like kind of lording over everything. And so he actually does like say these two things are like very possible. And then we kind of move on. He says copilot and actual pilot. Yeah, basically. Okay. So the next thing he's talking about kind of how he thinks about pricing structures of AI broadly. So there's this kind of conflict between subscription models and usage model of pricing. And he says, I think he's broadly more focused on, at least in the short term, on this subscription kind of thing, which he Makes a big emphasis on this because you need to be very specific on how you price these things because doing the actual serving of the models is so expensive. Okay, so then throughout the interview he keeps emphasizing the point that Microsoft is a hyperscaler. And so that means a bunch of things. That means that they're going to keep supporting multiple models. It means that they are going to like, they want to prioritize the kind of long tail of like high margin users. So you can like, you can kind of compare that to Oracle, who you can think of Oracle as basically prioritizing.

[Jordy Vandeput]

One potentially low margin.

[Tyler]

Yeah, exactly. You're giving bare metal essentially to one customer. OpenAI.

[Patrick O'Shaughnessy]

Yeah.

[Tyler]

And you're betting the whole company. And he says like, if you're going to do that, you should just vertically integrate that company. Like you're part of that company. That's what Satya says. Like in response to like, why is Oracle basically eating your entire business?

[Patrick O'Shaughnessy]

Sure.

[Tyler]

Like in the past like five years, Microsoft was super ramping up their capex, their build and then they just basically stopped and let Google, Oracle, Amazon basically build that up. So that's kind of the main reason there's a bunch of other stuff he's talking about. They ask him about chips. So all the big hyperscalers have their own chip play, right? There's Trainium, there's TPUs. OpenAI is doing their own chip and Microsoft does have their own chip, but it just kind of, it's like the actual production is like way behind everyone else. It's like, okay, why is this chip so bad? Or why are there so few of them? And then Satya basically brings up that like Microsoft has IP to everything OpenAI has except for consumer hardware.

[Patrick O'Shaughnessy]

And chips are not consumer hardware, they're chips, enterprise.

[Tyler]

So he's like, well, okay, how do we get the best chips? The best, like, you know, model specific chips. We'll just take OpenAI and we'll just like build on top of that.

[Patrick O'Shaughnessy]

I wonder how much that actually transfers though, because where does the chip development live? Where does the IP live? Like if OpenAI, I mean it's designed.

[Jordy Vandeput]

And they can get line time at tsmc, then they can just produce it and sell it to any customer they want.

[Patrick O'Shaughnessy]

Yes, but what if they do it within Nvidia or something? Like what if they go to Nvidia and they're like, hey, for the next run of Nvidia chips, we'd like you to consider this architecture.

[Jordy Vandeput]

Why would they need to do that?

[Patrick O'Shaughnessy]

Because they want their models to be more performant on the chips. And so they go to Jensen and say, hey, we're one of the biggest buyers, so make the next version extremely performant for our chips. And I think they're already doing this. They're co developing chips with Nvidia, they're co developing chips with other companies and if they co develop with Broadcom or they co develop with AMD or maybe even intel in the future, but that IP lives with intel, then no, Microsoft doesn't just get it. Right.

[Tyler]

Yeah.

[Patrick O'Shaughnessy]

So it's like only in the event that, I mean both of these are going to happen, like there's going to be internal efforts and there's going to be external efforts. But it is a funny reminder that the internal efforts get copy pasted over to Microsoft.

[Jordy Vandeput]

One other, one other note. Satya signaled that he's open to buying capacity from neoclouds like Oracle, Nebius, Lambda Iron N scale. Isn't he already doing that to fill the. Yeah, he is, but Semianalysis has a concept called the pause, which is basically a gap of this insane period of demand that is trying to meet that demand. Yeah. And Satya actually says specifically you're rightfully calling out the pause in the interview.

[Patrick O'Shaughnessy]

Interesting.

[Tyler]

I think continuing on, why he basically stopped building out the chip question is also very important because you can think of it like if you build a bunch of data centers right now, they have very specific power requirements that are directly based on the chip. If you're building based off the H120 chip, that's different than if you're building a data center based off GB2 hundreds. And it's like you can't really, it's not like fungible. You can't just trade one out for another. So that's another one of the reasons why you don't want to basically have insane build out right now because you don't think, you know that chips are going to get much better, especially with like Asics.

[Patrick O'Shaughnessy]

Right?

[Tyler]

Yeah, exactly. Nvidia is like constantly, they're saying we got this next chip coming out. You want to build up your data center with those chips because otherwise they're going to depreciate and you're going to have, have these basically data centers in like five years that are using the old gen chips or two generations back.

[Patrick O'Shaughnessy]

Yeah.

[Jordy Vandeput]

Anything on depreciation?

[Patrick O'Shaughnessy]

Capex?

[Tyler]

Yeah, I mean so yeah, basically he gives like two reasons how you can justify data centers.

[Patrick O'Shaughnessy]

Right.

[Tyler]

Because you have data center basically depreciating in like five years or the chips, which is a big part of the, the cost. And so there's basically two ways to justify the actual build out. One of them is basically you can think of research as just being like R and D spend. So you basically just have to, you got to do the research like you need to do the spend, basically. Then the other is just like he keeps bringing this up is everything has to be like super demand driven. So that's also why he's not. It's like again, in comparison to Oracle, Oracle is basically, maybe you could say that they're kind of skating to where the puck is going or trying to figure that out and then doing a bunch of debt, et cetera. And then Microsoft Satya saying, no, where is demand right now? How do we fulfill that demand basically? Exactly. If we're not fully built up, then we can lease from the Neo clouds.

[Patrick O'Shaughnessy]

Yeah, makes sense. I'm super excited to listen to this full episode. The Wall Street Journal also had an article about the news as well. It seems like this is all in line with Microsoft's just announcement that they have a super factory. I like it. We went from AI factories to AI super factories. We went from regular artificial intelligence to super intelligence. We're ramping up, but we're still like seven levels away from the final boss. Because after super intelligence of course you have giga intelligence, then ultra intelligence, then super duper intelligence and mega factories, exa factories, terrafactories. There's all these different terms.

[Tyler]

Okay, so I will say one last thing I thought was funny.

[Jordy Vandeput]

Terrestrial intelligence factories.

[Patrick O'Shaughnessy]

Yeah, for sure.

[Tyler]

Okay, one last thing. Dwarkesh asks Satya like, does he buy basically the revenue growth of like when OpenAI or Anthropic says they're going to be like 70, 100 billion in like three years, he's like, well, you know, they have to justify their fundraise somehow. And then he basically doesn't say much else besides that.

[Fei-Fei Li]

Wow.

[Patrick O'Shaughnessy]

Sasha, absolute dog. I love him. He's the best.

[Jordy Vandeput]

Cooking Chat was asking about hair routines. We have to comment and unfortunately disappoint because I think we both ride the apply the same approach, which is sleep.

[Patrick O'Shaughnessy]

Diet, exercise, baby well.

[Jordy Vandeput]

And no hair products.

[Patrick O'Shaughnessy]

No hair products.

[Jordy Vandeput]

No hair products.

[Patrick O'Shaughnessy]

Use water and water, some sauna, some workout. Just keep the rest of your body healthy. And I think the hair will be healthy as well. I actually think that's how it works.

[Jordy Vandeput]

Yeah, yeah, yeah. It's just funny. We're never gonna have a shampoo or a hair product sponsor because we don't really use either of them.

[Patrick O'Shaughnessy]

No, but I like creatine and people say that that's bad for your hair.

[Jordy Vandeput]

But it's creatine, the hair loss medication.

[Patrick O'Shaughnessy]

Hair loss medication. People think it. People think you'd lose your hair if you're on creatine. But I certainly haven't experienced that. I have experienced that. Julius helps with maintaining good hair because it's the AI data analyst that works for you. Connect your data.

[Jordy Vandeput]

Stop pulling your hair out.

[Patrick O'Shaughnessy]

Plain English. Get insights in seconds. No coding required. Yeah, stop pulling your hair out and get on. Julius. What are the other factors in here? Microsoft spent more than $34 billion on CapEx during its first fiscal quarter and said it would increase its total infrastructure investments over the next fiscal. It is among several tech companies pouring a combined 400 billion into AI efforts this year with demand for AI computing and companies saying they need ever more capacity. Very fun.

[Tyler]

Okay, one last thing. Another thing that I was surprised to hear is that Satya, he made a big point of saying that there is a superintelligence lab within Microsoft. They're going to be training their own models.

[Patrick O'Shaughnessy]

Yeah. Isn't that. Mustafa Suleiman is running it.

[Brian Halligan]

Yeah.

[Tyler]

And so he said, says maybe they'll be completely trained by Microsoft. Maybe they'll just do like fine tuning and training on like GPT OpenAI models. Yep. But like they are going to like actually have. They're going to be training their own models. They're doing kind of the full stack.

[Patrick O'Shaughnessy]

Yeah. When we were, when we were about to go on stage with Satya, I was texting with Doug o' Laughlin from Semianalysis and he was like, ask about MSL or not msl, Ask about mai. Like, what's the strategy for mii? And we asked a couple people and we got a little bit. It was sort of hard to like really pin down a clear strategy. I don't think that they were ready to really divulge exactly the full strategy. It'll be interesting to see what models they train. Like, do they just go bigger? They have the biggest factory. Could they just take this Fairwater facility and say, hey, let's go train something that's 10 times bigger than GPT 4.5. Do they believe that, that pre training scaling laws hold or not? That's what I'm curious about. Or are they gonna do something that's more precise? Like, will they do a pre train for Excel? Will they do a pre train for Word or something like that? Is there some other tactic that they're going to employ? There's a bunch of interesting things they clearly very GPU rich, tons of sharp engineers, tons of interesting product surface area. Where will they actually go? Interesting times.

[Jordy Vandeput]

Yeah.

[Tyler]

I mean he talks a lot about like application layer stuff. He actually says like the rapper model wrapper companies are basically debunked by models getting better. So I think he thinks that Microsoft will basically take over a lot of that application layer stuff. Right. He talked about Excel Agent a lot. There's like the PowerPoint stuff.

[Jordy Vandeput]

That's why I've always felt like the dynamic between OpenAI and Microsoft is so interesting because OpenAI just has massive ambitions in the enterprise they want to create. Sam alluded to a AI native Slack recently. Microsoft has teams.

[Patrick O'Shaughnessy]

Imagine those going to be AI native.

[Jordy Vandeput]

You can imagine OpenAI having like word processing, Excel, like product. You know, you can imagine them ultimately competing on like every single layer, including eventually at the cloud layer.

[Patrick O'Shaughnessy]

What do you think the dynamic is between this? Like, you know, Microsoft always loves to say like, hey, yeah, we have all the ip, but it feels like they're not actually fast following. Like they could like OpenAI launched Atlas, like they could have launched like Edge Atlas. Microsoft could have launched like Edge Atlas like the next day. And that would have been like, whoa, what are we doing here? That's a shot. They could have launched Sora 2. They could put Sora 2 in Excel. How about that? Brain rot Excel, Brain rot Excel. They could have done that. They didn't. And so, so there's clearly like, even though they have access to all the ip, they still have a differentiated view on how the products get built. They're not just saying, oh, yes, one copy of Atlas, please. One copy of Sora 2 please. We'll just launch our own competitor app. They could have put it in LinkedIn. There is a way to integrate that. Microsoft's clearly not moving so fast on that front. They're being a little bit more method.

[Jordy Vandeput]

Yeah.

[Tyler]

This is why I'm very excited to see what comes out of Mai.

[Patrick O'Shaughnessy]

Yes.

[Tyler]

Because it seems like they have a lot of good people. Like they've been doing a bunch of talent acquisition stuff.

[Patrick O'Shaughnessy]

Yes.

[Tyler]

So I'm curious if they're going to start right now. It just seems Microsoft is still very slow. They're kind of reactive and they're like, okay, we should add another AI helper to Excel or something. But it's not really built in low level yet.

[Patrick O'Shaughnessy]

Yeah. I'd like to have Mustafa on. I'd like to talk to him about where their training models. Whether or not that seems like an interesting conversation, I'd like to ask him some hard questions. There's been a debate on the timeline. John, how hard of questions?

[Jordy Vandeput]

Edge has every single feature that Atlas has. Copilot Mode. It's better than Atlas or Comet.

[Patrick O'Shaughnessy]

Interesting. Maybe they don't need a copy then. They're good. But there has been a debate over how hard of questions we ask. Is it a hard question to ask Mustafa at Mai what type of model he's training, or should we ask some sort of other hard question? I wanted to practice some hard questions. I think we should start asking harder questions. I have some hard questions here for you. And I think if we practice, we'll become better interviews. Are you guys ready for these?

[Jordy Vandeput]

Should we just start hitting guests with, like, insane math?

[Patrick O'Shaughnessy]

I wouldn't call them insane. I do have one here for Tyler. Is every even number greater than two the sum of two primes? Answer the question.

[Jordy Vandeput]

He's looking around the blue.

[Patrick O'Shaughnessy]

It's a simple yes or no question.

[Tyler]

Every even number.

[Patrick O'Shaughnessy]

Is every even number greater than two the sum of two primes? Answer the question. Stop dodging the question. Just answer the question. It's a yes or no question. Is every even number greater than two the sum of two primes? It's an unanswerable question. Of course it is. The Goldbach equation or the Goldbach conjecture. There's also. Can there exist an algorithm that decides whether any computer program will halt or run forever? It's the halting problem. It's a possible question. What will OpenAI's valuation be in 2035?

[Tyler]

100 trillion.

[Patrick O'Shaughnessy]

100 trillion. We answer that quickly, we'll come back to that in 10 years. See if that was a hard question. What's the nicest thing ever done by Adolf Hitler? Answer the question. Stop dodging the question. Tyler.

[Jordy Vandeput]

Ask that to Carp. Karp was on a roll yesterday. Some of those clips were.

[Patrick O'Shaughnessy]

Here's a question we should ask a lot of founders that. Come on here. Does your dad know you're bankrupt? I think if we hit them with that, people will be like, that's a hard question. That's a hard question. Here's one for Tyler. Prove God exists.

[Tyler]

There was the Godel.

[Patrick O'Shaughnessy]

What is truth? That's a hard question. Have you ever done illegal drugs? Tyler, answer the question.

[Jordy Vandeput]

No.

[Patrick O'Shaughnessy]

Answer the question.

[Jordy Vandeput]

Good answer.

[Patrick O'Shaughnessy]

Who's your favorite host? Me or Jordy? Answer the question. Answer the question.

[Tyler]

I'm my favorite host.

[Patrick O'Shaughnessy]

Taking shots. What is time? I like these hard questions.

[Jordy Vandeput]

Okay, Jordan at semianalysis down to hop on and correct a few things we said on the article, but I Dropped him the he was listening, said Al in the chat.

[Patrick O'Shaughnessy]

Where is he? Let's bring him on.

[Jordy Vandeput]

I'm working on getting him the Assume link.

[Patrick O'Shaughnessy]

Fantastic. Fantastic. 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 models with serverless GPUs and on demand clusters. You can get started. Let's see what else. Henry Kravis gave a talk. The founder of kkr. The post appears to have been deleted, but I won't say who it's from, but I will read it to you anyway. The world needs another fund like it needs a hole in the head. I think it was supposed to be off the record and I think one of our friends was maybe live tweeting it against their request. Or maybe he just corrected it and realized that he didn't want to post that. But there are a lot of funds. I suppose I was doing a little deep dive on blueowl. I want to get to know Blue Owl more. It's a fascinating company merger. There's a SPAC involved. They have two CO CEOs and three CO presidents. The top ranks at Blue Owl are absolutely stacked from what I read. They are of course powering the AI buildout is which with debt private credit. They are a private credit fund up there with Ares. They've done very well. They actually have three different businesses. Only one of them is doing AI data center build outs and even within the AI data center buildout fund they fund other stuff. So it's interesting to see how much risk they're taking, how much their business is really dependent on the AI build out. It's also there was a. They got in a little battle with, with Jamie Dimon because Jamie Dimon was saying that some of these bank failures are the fault of private credit. When you see one cockroach there's usually more. He's kind of saying like hey, like you know, we see these defaults. We see these, we see these, these large companies defaulting. Maybe this is the start of something bad. Maybe there's a lot of other bad companies out there.

[Jordy Vandeput]

Yeah, there was something with BlackRock had lent I think $100 million to a business recently as of like two weeks ago they had a, they had it marked as, you know, fully sound.

[Patrick O'Shaughnessy]

Yeah.

[Jordy Vandeput]

And then the company almost immediately went bankrupt. So concerning we have. Anyway Jordan from semi.

[Patrick O'Shaughnessy]

Welcome to the show. How are you doing? Hey Jordan, good to see you again. Welcome back.

[Jordy Vandeput]

All right, what did we get wrong?

[Patrick O'Shaughnessy]

What's going on?

[Jordy Vandeput]

This is all, of course, Tyler's fault. He was.

[Patrick O'Shaughnessy]

Break it down. Give us some notes.

[Jordan]

Yeah, no, I don't think you guys got anything wrong, but I think just wanted to promote that. We put out a companion article that comes out with the interview.

[Patrick O'Shaughnessy]

Oh, fantastic.

[Jordan]

Was in there. He's being called out by some other people on Twitter for hunting around in the background while they're interviewing the Azure teams.

[Patrick O'Shaughnessy]

Wait, Dylan Patel, you mean? Yeah, we got to go through frame by frame and find him. Like, oh, he's going to go look because he's actually break down.

[Fei-Fei Li]

What.

[Patrick O'Shaughnessy]

What does a Dylan Patel scoop look like when you're on site and security turns their back? Is he, like, looking for, like, oh, instead of this Nvidia switch, they're using AMD's. I've seen him call stuff out where it's like, wait a minute, this company is using a different company's technology? Is that what he's looking for?

[Jordan]

Yeah, I mean, I don't know if he was looking for the CREDO cables or anything, so those are obvious with the purple housing. But if you look at his last tweet, he just said to be clear. While Scott was explaining the data center, he was super intently focused on figuring out the fiber patch panel config. We know about some providers that have gone out and bought cables, like 20,000, 40,000 cables, and then they mess up the config of the patch panel and they end up finding it too short and they just have to send them back and get all new cables, which is like, not a negligible amount of. Of money. These cables are like at least a thousand bucks a piece. They're really heavy. We've been talking about internally, how many cables can you bench?

[Patrick O'Shaughnessy]

Okay, there we go. There we go. Yeah. Dylan Patel seems like a bit of the fox who in Microsoft is the hen house. And they really shouldn't have let Dylan Patel into the new data center because you know, he's going to find some stuff. There's going to be some scoops that, like, I'm sure there's like a PR team at Microsoft that's like, okay, here are the talking points. We're going to keep him here. He's not going to look behind this curtain. There's a bodybuilder over there. Don't go in that closet. And Dylan's, I'm sure on the case. Probably quickly becoming the greatest investigative journalist of our generation, the big pop.

[Jordy Vandeput]

Give us some more insight on the depreciation Comments?

[Jordan]

Yeah, definitely. So there's a section of the article that kind of goes through this. I think you guys asked me this on Monday. I didn't have a properly prepared answer because I actually didn't know what Michael Burry had been tweeting about and kind of talking about with this. So maybe for background, Burry is claiming that the hyperscalers, like including Meta, but also Azure on Oracle, Google, are artificially boosting their earnings by extending the useful life of the IT assets. You can see from 2020, when they would report their numbers. These IT assets, like servers, switches, storage, would be three to five years on a life cycle and they've now extended that to five, five and a half or six, all the way across the board. In some ways I think this is a bit of a game of catch up. If one provider does that, everybody else has to follow suit.

[Patrick O'Shaughnessy]

Sure.

[Jordan]

But we go into detail in the article about like, what this actually means and you know, Burry's argument that this is understating the amount of, or it's boosting their earnings, it's understating the amount of, of depreciation that's going on on these, these GPUs is really predicated on Nvidia's comments that the product cycle is now two to three years long. Sure, that is like.

[Patrick O'Shaughnessy]

But that's on the development of a new chip. Like, from my perspective, depreciation, although there is the economic question about how much value can you get out of the tokens that you sell generated by an A100 in five years? That's a good question, but that's not how we think about depreciation. Like if you buy a mechanical arm to put a glass windshield on a car at an automotive factory, you're just wondering how long until that mechanical arm breaks. And I'm sure there's been immense pressure on Nvidia to let the chips not burn out in two years. They probably have done a lot of work. It's a very expensive chip. It's a very expensive rack. Is it that crazy to assume that the 50th percentile might be five years now?

[Jordan]

No. And there's basically no precedent to say that a chip would fail or wear out, as you're describing it, in two to three years. Like, there's the hardware OEMs, they have contracts that are standard for three to five years and they offer extended warranties for six and seven years. The big supercomputers in the world that run as a total system where even individual servers kind of get life cycled they run 5, 6, 7, some of them up to 10 years in production. Right. Not to say the years that it takes to actually turn this thing on. And these are the environments that use liquid cooling and some of the latest and greatest chips that are actually, you know, similar in comparison to the GB 300. And then even if you go to the providers directly and you try to rent a V100 today, which was launched in 2017, right. Seven, eight years ago, I can still rent V1 hundreds in data centers from providers like Amazon. I mean, there's plenty of a 1/ hundreds for sale right now. So there's, there's nothing. To me, you know, the, the.

[Brian Halligan]

The.

[Jordan]

Proof of this argument would be predicated on Nvidia releasing chips that so drastically outperform the current generation in two to three years that all hyperscalers everywhere are so incentivized to go through another capex cycle, they got to buy all new chips and rip out all the existing ones, and we're still so power constrained that they have to do all that. And that seems like a much farther leap than saying we might be able to run these chips for five or six years in the data centers themselves.

[Patrick O'Shaughnessy]

Hmm. I wonder, do you have a reaction? So Ben Thompson's been writing about the AI build out and the bubble, potentially the benefits of a bubble. And one of his bull cases for a bubble was basically that in previous bubbles you get a glut of IT infrastructure or even just steam engines or railroads. But his example was dark fiber. And the idea was if you overbuild well, then you get a bunch of extra infrastructure that you can use and it's Che. And his counter to the AI build out was that depreciated H1 hundreds just aren't as valuable as fully depreciated fiber lines. But I just don't know if that's true. I feel like if there's a ton of depreciated H1 hundreds out there in 10 years from now, I think there's still something useful that you can do with that. In the same way that you can push bits across fiber lines, it won't be super intelligence, but there will be a base load of generic knowledge retrieval or just, hey, people just want to chat. And the fact that it's so cheap now because the assets are fully depreciated means that you can just have a chatbot in interface, every single conversation in every app, and it'll just be so much. It's sort of like a Jevons paradox thing. I'm not saying that the economics will stay the same, the margins will go way down, but, but there will be a benefit. It's not like these things just disappear after five years. They don't just break.

[Jordan]

Yeah, no, they, they, they don't just break. I think there are some, Your comparison makes sense, but there are some nuances compared to the fiber lines. Just to say that if new GPUs come along from other providers that are so much more performant than the current ones, then at some level it doesn't make sense to keep the power turned on for the old one because the operating expense is too much. Like, we estimate this at 30 cents per kilowatt. So if the bottom of the H100 price gets below 30 cents or somewhere close to it, you're probably better ripping them out and replacing them with something new. Even if, you know, for the car analogy, this is still a beater that somebody else could drive for the price of gas and insurance, right?

[Scott Sanders]

Yep.

[Jordan]

Yeah, yeah.

[Patrick O'Shaughnessy]

I was talking to Jordy about it and I was saying, like, there is a world where to just put in really concrete terms that most business people might understand. Just, you know, if your job is, you know, you have a Diet Coke business, you deliver Diet Cokes, you have a, you have a, you have a gas car that delivers the Coca Cola and you have the opportunity to switch to an electric vehicle, you might do that because bringing down your total cost of ownership, your annual OPEX would be great. But sometimes companies just don't want to spend the capex to actually do that. And so I'm wondering if there's a world where, where the GPUs get traded down to a point where people are like, yeah, the OPEX is higher, but I'm still running it for this niche use case. There are still mainframes that are running, there are still on premise cloud, there's companies that haven't fully moved to the cloud. And I'm just wondering how long some of these GPU racks might just be sitting around where someone gets it cheap and they're just like, yeah, that's the thing that filters every invoice that we get. And it just runs and it runs like it runs GRO2 on it or whatever, and it's fine, it's good enough.

[Jordan]

Yeah, well, I mean, look, I, I put in the article a link to Azure's announcement from September, kind of pleading with their users to move workloads off of V100 GPUs that are 8 years old.

[Jordy Vandeput]

So please.

[Jordan]

Please don't get Upset at us when we turn off this instance. And you, you know, I don't think they're doing payroll on these things, but like things gonna shut off.

[Patrick O'Shaughnessy]

So interesting.

[Jordan]

I mean, I totally take your point. Working in IT for years, there's, there's so many people that come along and when there's like some sort of last call for the sale of spare parts for these old GPUs and they want to keep these systems running, they. They suddenly show up and want to order a bunch of them. Yeah, and it could be for all sorts of reasons, but usually it's just inertia of not wanting to move the old workloads onto the new stuff.

[Patrick O'Shaughnessy]

We're also completely discounting the. No, I mean people like air cooled Porsches. I imagine that Dylan and you guys are going to be like, yeah, I need a V100 just sitting in the office. I don't like this new technology, this new gbc.

[Jordan]

You want to talk nostalgia, we got to go back to Kepler or Pascal Volta, guys. I don't know.

[Patrick O'Shaughnessy]

Yeah, yeah, yeah.

[Jordy Vandeput]

What about on the chip side? What was most notable about, about Satya's comments there?

[Jordan]

Yeah, I mean I find it fascinating that such a clarified. They have access to all ip, including chips and including systems. So yeah, this is on the models that everybody jumps to. I think OpenAI has a ton of IP that's going into their chip program that Azure could definitely take and sell as part of the cloud services. If they want to partner up with Broadcom and just produce a bunch of chips that are, are more similar to a TPU than they are to a GPU in the future, they've got that optionality.

[Patrick O'Shaughnessy]

I wonder if there's a way to puzzle around that though. When I was debating with Jordi, I was saying, well, obviously OpenAI has a team that works with Nvidia and with Broadcom and with maybe intel in the future. Amd now, Is there a world where the IP lives with the other companies for the next five years or something? It seems like maybe tricky, but I'm just wondering how much of the IP actually lives within OpenAI versus their partners.

[Jordan]

Well, I think it's so Satya made the point in the podcast that in some cases Microsoft seeded parts of the OpenAI chip program with IP from their Maya program. Oh sure, I think it's this whole mosaic of where the actual IP sits, but at the end of the day there's going to be something that comes with OpenAI that they learn and you can even go beyond the chips to the systems that the chips go into to the network that connects the chips or to the software, like the runtime and the like inference stack, which is to say how they run inference efficiently on these chips. There's a whole stack that gets built from the actual hardware through to the API that produces tokens to the user in the chatbot and they have access to all of that that OpenAI would consider proprietary. So maybe to the point you guys were making earlier, comparing to Excel or to Microsoft's other strategies, it seems like this is a case of OpenAI going really fast and executing really quickly and their moat being speed. And then you compare that to Microsoft, who has an existing moat of distribution. So they've got 400 data centers in Azure, 70 regions.

[Jordy Vandeput]

Free cash flow. Free cash flow is also bit of a moat too.

[Patrick O'Shaughnessy]

Yeah, definitely.

[Jordan]

They've got all the makings for like, who do you think wins the race to turning on public instances of an OpenAI chip that anybody can rent, right? OpenAI or Microsoft Azure with a bit of a head start. Like I think they have some good optionality there with OpenAI's program, with the relationship with Nvidia, with Maya, but the point is that right now they are losing the race on chips to Nvidia From Google, maybe AMD, they use some AMD GPUs right now, so they've got to go and execute. Right.

[Jordy Vandeput]

Whether or not do you think Satya expects Azure to compete with an OpenAI cloud in the next few years?

[Jordan]

I think if OpenAI really develops a cloud, absolutely. Because Satya says in that article that they. Well, in the interview that they don't want to be beholden to one customer. I think he says we have five big deals with five customers and that's the bulk of Azure's compute right now. And I would say it's really one deal with one customer that is the bulk of the incremental revenue in Azure right now. So like, I mean I go hands on testing this stuff and I've talked to 140 different companies about actually using Azure and they were a distant third compared to just AWS and Google from a hyperscaler perspective. And I talked to Clem from Hugging Face this morning and he shared some data with us that backs this up. Like if you look at the downloads from Hugging Face of open source models, the downloads that originate from an Azure IP, there's more than 5 times less when compared to AWS.

[Patrick O'Shaughnessy]

Wow.

[Jordan]

Right? OpenAI can use it all with their private repos and stuff, but if you look at the long tail of the market, where the long tail represents everybody but OpenAI, basically, they're getting five times less of that business right now because they're so focused on OpenAI. So I think Satya wants to do more than just OpenAI. It's just a matter of actually going and doing it.

[Patrick O'Shaughnessy]

Yeah. Do we have more of a clear narrative now on what motivated the pause? Like you can see it so clearly in this data center. Pre leased capacity in the semi analysis article. It's so obvious what's happening from 2023. You see the blue bars just increasing, increasing and then just complete flatlining. Everyone else is growing. It seems like this, it seems like this piece, this video with Dwarkesh and Dylan feels a little bit like him maybe teasing, like, hey, I'm getting back in the race. Like the headline with the Wall Street Journal is like, I got the biggest data center that feels like I'm unpausing but right, you're not like, oh, I'm happy to be a leaser. And oh, by the way, I have the biggest thing. Actually, I own the biggest thing. That's kind of an odd dichotomy there. And I'm wondering if there's a clear narrative. Was it specifically the nature of the OpenAI relationship that led to the pause or was it just concern about the overall market or the viability of the technology? Or was he like plateau pilled and had seen that GPT 4.5 wasn't getting adoption too expensive to serve? Do we have a narrative for what motivated the pause yet?

[Jordan]

I don't know if it's clear. I think we have different pieces that we can piece together. The things that Satya says in the interview point towards fungibility diversification outside of OpenAI, a lack of foresight in two years ago to what the actual demand would be. They fishtail where they went too far on building demand and then they wanted to come back and now they didn't have enough. And so now they're, they're renting from Neo clouds like nabius, like Lambda Iren, Oracle directly. They've got N scale deals. I mean they're clearly using Neo clouds to take on that extra bit of risk and going forward. I mean, we are. I think the result is that it's incredibly bullish for Microsoft actually serving this demand when they have the first right of refusal and OpenAI's growth continues to go crazy and they, they, they are kind of back on track to leading the way with coding models in a way that they were, you know, maybe forecasted not to with Anthropic coming and taking a bunch of share there. They are like all in on taking down Anthropic as a direct competitor with their Codex models now. So I think they just kind of. Microsoft just flinched a bit.

[Patrick O'Shaughnessy]

Yeah.

[Jordan]

And they're, they're back on track. And we're pretty, I mean, we're pretty bullish on them growing in the future. But. But it's notable that Satya talks about things like diversification around OpenAI and around globally. Like the idea to me that there's a geopolitical conclusion that you can draw from his response on the question about the pause where he says, what if I want to build in India, what do I want to build in Europe? What if I want to build elsewhere? And therefore we paused North Carolina. That seems to say that governments around the world can attract investment in data centers if they implement a bunch of harsh regulations on data privacy.

[Patrick O'Shaughnessy]

Yeah.

[Jordan]

And more and more companies are going to want to train models based on personally identifiable information or other types of data that's regulated and needs to stay in those countries. And therefore you need GPUs around the world. You know, that could be something that they just kind of learned and therefore pause North Carolina, spin up something else. Haven't seen that exactly play out on the global deployments, but it could be coming.

[Patrick O'Shaughnessy]

How real is this fungibility of the fleet thing? Because the narrative around Google is that they have the tpu, they're so vertically integrated, they DeepMind and it just feels like when you go to Gemini you get something that's like down to the metal and then at Microsoft pick your model and then also they're subleasing from all these other clouds. But as, as I see from clustermax, there is a wide variety of performance metrics and results and qualitative even the feel of these different NEO clouds. And so is there some sort of risk to. You go to Azure and they put you on the lowest ranked cluster max NEO cloud and it's like I would rather be up here on the top tier, lease I want to be subcontracted down to the platinum tier, not the D tier. Is there any risk to that? Or is Microsoft actually able to take a NEO cloud that is in the D tier and give you the Azure level of service.

[Jordan]

Yeah, I think it really depends on at what level you're assessing the fungibility. So I think in some ways the tokens or the tokens produced by the model endpoints are almost completely fungible.

[Patrick O'Shaughnessy]

Okay.

[Jordan]

You can fine tune the models on private scenarios. But generally speaking like tokens from one provider versus tokens from another provider are effectively the exact same as long as you're hitting the quality metric you need from that model deployment on that gpu. But if you look at the underlying architecture, when Azure claims to add 100,000 GB3 hundreds coming online this quarter, that is not fungible to every single user on a cloud service. GP3 hundreds are rented 72 GPUs at a time in 135 kilowatt rack. Your workload needs to be ported to ARM because it's a Grace cpu. You need to have the performance per dollar benefits of the Blackwell GPU to justify it over the previous generation Hopper. It needs to use a GPU in the first place. Satya spent a bunch of time in the article talking about the importance of in the interview talking about the importance of databases of non GPU related services that actually run the web app that actually store the data. Turbo Puffer Lots of azure capacity beyond GPUs coming online too, right? Yeah, you know, might call them CPU data centers now and they consume a little bit less.

[Jordy Vandeput]

Wanted your take on a couple other things. One the new Anthropic News $50 billion investment. Any reactions to that?

[Jordan]

Yeah, I think notable that they called out Fluid Stack by name and they're not calling out the underlying providers as you said. Like, you know, if, if somebody like fluidstack can help them deliver on a a bunch of what we think is TPUs deployed directly first party, you know, then there's, I mean there's all sorts of stuff that they can do because under the hood it's pretty clear that FluidStack is deploying these TPUs in Terawolf data centers in Buffalo, at their Lake Mariner facility elsewhere in Texas and then at Cipher Mining in Texas. If you look at some of the you got to pair two new press releases together, the one from the underlying provider and fluidstack and then the one from Anthropic with Fluidstack. But the point is that Anthropic is definitely ramping up just at the same level as OpenAI. Maybe not quite at the same level but. But they both seem to be clearly believing that. Statement from Greg Brockman if we had 10x more compute right now, we'd have 10x more revenue and so therefore their constraint is compute, bring it online and just keep growing.

[Patrick O'Shaughnessy]

That was certainly the case with the early iPhone launch. Apple's earnings were extremely predictable every quarter because they were like as many as we make we will sell. And so they were completely supply constrained. It does feel like on the question of backlogs, Anthropic has just been much less aggressive. They have been somewhat saying the biggest number every once in a while, but they haven't gotten into the trillions of backlog. And it feels like OpenAI. Sam's almost like, oh yeah, sure, give me all the weight of Stargate, even though that's sort of a separate entity. And he could have easily fended that off and been like, well that's Stargate. That's sort of a separate thing. That's not all on OpenAI. We need to clarify how this all fits together. But Anthropic's been a little bit quieter on the like. Okay, we have this crazy RPO that's going on all over the tech industry.

[Jordy Vandeput]

What was your reaction to coreweave's quarter? Jim Cramer was going pretty hard.

[Patrick O'Shaughnessy]

What did Kramer say?

[Jordy Vandeput]

He was just like.

[Patrick O'Shaughnessy]

He was blackpilling.

[Jordy Vandeput]

Yeah, it was just a funny interview. He was like, what's going on? What's going on?

[Patrick O'Shaughnessy]

You think they doubled revenue but they sold off?

[Scott Sanders]

Is that what.

[Jordy Vandeput]

Yeah, well, I mean they've sold us a ton in the last month. I think like 20, about a. Yeah, 26%, something like that. But Kramer was saying like, why are you relying on a bitcoin miner to like help fill your capacity? Are you sure they can deliver? And he was talking about Core Scientific, which Core we've attempted to acquire. It got rejected, but I know it was just yesterday.

[Patrick O'Shaughnessy]

Platinum on clustermax. That's all I need to know. Buy and hold. Get lost.

[Jordy Vandeput]

Yeah. And the CEO was saying like, yeah, and like he didn't name Semianalysis because I think the CNBC audience is maybe not familiar yet. But he was saying like we're platinum rated. We're platinum rated.

[Patrick O'Shaughnessy]

Oh, he said platinum rated. Oh, that's amazing. I love it.

[Jordan]

Yeah, I mean it's in the earnings call semi analysis mentioned I think three times.

[Jordy Vandeput]

But that's definitely.

[Jordan]

Yeah, we went into this the, we're.

[Patrick O'Shaughnessy]

Very excited for this. This is big.

[Jordan]

Yeah, I think we like, we went into this. Jeremy and the data center guys, Rake, Dan, they put out a note earlier in the day to the Core Research subscribers that the Core weave is at risk of short term delays in their capex but not to their revenue which is driven by the data center partner, Core Scientific. So yeah, when you're relying on somebody to add 250megawatts and you know they're only going to get you 150 by the end of the year that changes your guidance on CapEx. And sure, I think the, you know, this is like, yeah, look, this is the, the reality of the industry right now, which is that when projects are so big, measured in the hundreds of megawatts, small delays or small changes in a plan can really impact like short term financial guidance that people have in place. I don't like, personally I don't think this changes any of the fundamentals of coreweave's engineering or a lot of the experience and what customers they have signed. But we saw the same, a very similar reaction when the information put on an article about Oracle having delays. I think people who don't know about the data center industry or things like this, they see things like, oh yeah, these GPUs take a month to come online after they get installed and they're starting to depreciate the asset but they're not generating revenue yet. Like what's going on? It's like, yeah, that's typical.

[Patrick O'Shaughnessy]

I mean it's completely standard.

[Jordy Vandeput]

That's business.

[Jordan]

Yeah, stuff takes, I mean, you know, maybe the US federal government is different, but in my previous job we tried to hand over these supercomputers. The US Federal government, it take like a year and a half to pass.

[Jordy Vandeput]

Exactly.

[Jordan]

Adaptive.

[Patrick O'Shaughnessy]

But at the same time if investors aren't aware of that and then they learn that for the first time, they could be surprised. And so that could be something of what we're seeing in the gyrations in the public markets.

[Jordan]

I suppose it makes sense and I think there was a broad recognition that the Bitcoin miners have an uphill battle to figure out how to run these facilities when compared to established players like an Equinix or a digital realty or Switch or somebody that like has been running tier 3 data centers for a long time. Yeah, it's just different.

[Patrick O'Shaughnessy]

Give us an update on the energy model that's coming. What can you tell us? Is it this year? Next year? Is it my Christmas present? How does this work?

[Jordy Vandeput]

There's some previews.

[Jordan]

I think you should, you should have a J on the program next time or bring Jeremy back.

[Patrick O'Shaughnessy]

Yeah, yeah, I would love to have both of them talk about it. Yeah, I'm specifically, I'm very, very interested in the just American energy forecast for the next couple years because it feels like the entire industry is sort of hinging on like the trend changing. In my opinion. It feels like we need to bring up the level of energy production for everything else to happen and whether we hit some sort of regulatory block or Some massive scale block or a capital block or a glut of some sort or some gyration correction. There's so many things that could go wrong. But I'd love to know what the forec actually is from the folks who have gone so much deeper.

[Jordan]

I'll give you the quick, the quick hit. So everybody's trying to do turbines behind the meter right now, nat gas, right. And you've got a number of different players. But if you look at Schneider, Vertiv, Bloom, one of them. Bloom is ramping up. First of all, they're all sold out. So the model will cover like how sold out and exactly, you know exactly how sold out. But yeah, you want to look at Bloom ramping up production and you want to get Schneider and Vertiv on here and try and figure out exactly why they're not. Let's, let's see, you know, what does it take to get those guys to recognize what everybody else in the industry is recognizing right now? And then, and then let's dig into solar, wind, nuclear, hydro, all these alternatives that you know, you'd like to, you'd like to have in there, right? Why, why is Elon putting power plants on the other side of the border and then piping the electricity back to his data center in Memphis? Because of short term regulatory approvals. There's all of that political stuff that goes on to influence this market.

[Patrick O'Shaughnessy]

I'm so excited for it.

[Jordy Vandeput]

Well, thank you for coming on again. Twice in a week. We'll see what happens.

[Patrick O'Shaughnessy]

We really appreciate you taking the time for a three peat if you're not already subscribed. What are you doing? Head over to semianalysis.com. buy the most expensive subscription you can find. Especially if you're a venture capitalist. You can't call yourself a VC in the age of AI if you're not paying Semianalysis the big bucks.

[Jordy Vandeput]

At least a couple hundred thousand dollars per month.

[Patrick O'Shaughnessy]

Per month. I demand it.

[Jordy Vandeput]

Anyways, great to see you Jordan. Thanks for coming on.

[Patrick O'Shaughnessy]

We'll see you soon. Bye. You mentioned Turbo Puffer. I'll tell you about Turbo Puffer search, everybody. Serverless vector and full text search. Built from first principles and object storage. Fast 10x cheaper and extremely scalable. The soundboard.

[Jordy Vandeput]

Someone leaked their revenue recently and Iber. It's quite shocking.

[Patrick O'Shaughnessy]

Well, we have a shocking guest, Brian Halligan from HubSpot joining us. He's the co founder of HubSpot. Welcome to the stream. Brian, how are you doing?

[Jordy Vandeput]

I'm sorry to keep you waiting. Welcome to the show.

[Brian Halligan]

Never better. How are you guys doing?

[Patrick O'Shaughnessy]

We're doing fantastic. What is the latest in your world? Have you been captured by the AI build out? Is this something that's keeping you up at night or are you watching it more as an observer or are you checked out entirely? Where are you on the. How much does it get your pulse up? Because me and Jordy, it's every day for us over here. We're in the trenches.

[Brian Halligan]

I'm very checked in. I come at it from another angle. What I've been doing for the last year is I'm like the. I run an in house CEO practice at Sequoia.

[Patrick O'Shaughnessy]

Yeah.

[Brian Halligan]

And I do three things. I coach CEOs most of which are building companies on top of the AI wave. All of which I create communities of CEOs so they can collaborate together. I have a kids table of CEOs of kind of small company and an adults table of CEOs in large companies and then I'm creating content. So I've got a podcast launches tomorrow. Let's go. Yes. About CEOs and how to be a CEO. I love it how you do startup to scale up. Tune in tomorrow.

[Patrick O'Shaughnessy]

Fantastic.

[Jordy Vandeput]

What's the format? What's the format? Is it guest driven? Is it turning kind of the lessons that you talk about at the kids table and at the big kids table.

[Patrick O'Shaughnessy]

It's a six hour daily livestream actually. It starts at 9am and ends at 3pm Makes us look lazy.

[Brian Halligan]

The basic thesis is the playbook. I grew up running HubSpot from 2006 to 2021. Like a lot of those plays don't seem to work as well.

[Jordy Vandeput]

Sure.

[Brian Halligan]

And the rulebook's getting like the rubrics rethought. Like for example, I think what's how the way Jensen Huang runs this company is super interesting. With 60 direct reports and no one on ones and kind of public criticism. The way Elon runs his company, his empire is really interesting. The way Brian Chesky does it is quite interesting. And I notice all these CEOs have kind of new plays and they've got a new perspective on things. And so I'm inviting them on kind one by one to chat about how did you become a CEO? How do you like your job? What are the best practices? What is all wrong about CEOing these days? And I think it's me. My first guest is Parker from Rippling tomorrow.

[Jordy Vandeput]

Nice.

[Brian Halligan]

And it's a good one because Parker gives all the tea on getting fired by David Saxon benefits all the tea on the drama with deal on Spygate. And then in between all that, he is a very, very thoughtful CEO. He's not a big fan of conventional wisdom as people know, but he's doing some really cool stuff. So that's kind of episode number one tomorrow.

[Patrick O'Shaughnessy]

Yeah, I like that framing as like focusing on the actual job of the CEO because there's other shows that could do like okay, let's do the product review, let's do the product announcement. But having one feed where you can go and actually understand the philosophy of a whole host of CEOs, that's fascinating.

[Jordy Vandeput]

Jordan.

[Brian Halligan]

I think it's kind of interesting because I was a CEO for so long, so it's like I'm really a journalist. It's like a conversation about what the hell's really going on here.

[Jordy Vandeput]

How did your approach evolve over the 15 or so years that you were CEO of HubSpot?

[Brian Halligan]

I don't think it evolved that much is the interesting part.

[Jordy Vandeput]

You just one shotted.

[Brian Halligan]

I was basically the same guy from 2007 to 2021 but. And I followed like ye old playbook of the way people run companies like the Bill Campbell style playbook. And that's what I think is interesting. It's kind of changing and that's what I'm trying to dig into and kind of go deep on. It's like Stanley Tucci, you know Stanley Tucci show when he goes to Italy and he's trying to find his roots.

[Patrick O'Shaughnessy]

Search what are your want to know some surprises? Yeah, please.

[Jordy Vandeput]

Yeah.

[Brian Halligan]

Okay. A couple of things. There's. There's a breed of CEO that I see a lot of these days that I call a five tool CEO Now I'm a big baseball guy and there's such a thing in baseball as a five tool player. Someone who can hit, someone who can hit for power, somebody who can catch, somebody who can throw and somebody can run at an elite level. Very, very rare in baseball.

[Jordy Vandeput]

Who's an example of a, of a modern five tool player?

[Brian Halligan]

I mean a six tool player is Shohei Otani. Okay. But he can do. He, he can actually run, he can hit, he can hit for power, he can throw, he can catch. Yeah, he's very talented and very unusual. Cat Alex Bregman's one of those on the red, some red sky. But there's a bunch of these folks who kind of remind me of that in, in the software industry where they've got vision, they can code, they can design, they can recruit and they can sell their product and that's I think was pretty rare in software they're all over the place now and they're getting funded and I work with a bunch of them. Just a few examples like Parker's one for sure. Brett Taylor for sure from Sierra is one. Gabe Stengel from Rogo. Kind of a new company's rippings. Won mati from 11 labs. I have no idea how to say his last name. Kareem from Clay. Dara from Delphi. Like on and on and on. I'm super impressed with the new breed that's coming out and how talented they are.

[Patrick O'Shaughnessy]

Who do you think the Barry Bonds of business is or the Mark McGuire of business? Fantastic performance as a CEO, clearly using performance enhancing drugs.

[Brian Halligan]

If someone, if someone tapped me on the shoulder and said, you know, I don't know if you heard this, but Elon's actually an alien.

[Patrick O'Shaughnessy]

Oh yeah.

[Brian Halligan]

That kind of, that puts. Would you guys be surprised if someone said it turns out he was an alien? Would you guys be like, oh no, no, no, no, that's crazy. You'd be like, yeah, maybe.

[Patrick O'Shaughnessy]

It is funny, the performance sensing drugs thing, because majority have jokes about how it's not illegal to be on a stimulant. You obviously partake in caffeine, the legal stimulants, but some go a little bit further. But the reason that it was so controversial and so illegal in baseball is because isn't baseball a sanctioned monopoly by the government? I believe that's why. And so that's why during the whole baseball scandal, the steroid scandal, they came in and they had to do like a hearing on Capitol Hill. It was a crazy, crazy moment. I don't know if you tracked that.

[Brian Halligan]

I think the real reason is because baseball has been around for 150 years. People who broke records in the 1920s, like Babe Ruth broke important records in the 1920s that you can have like a ranking of who's actually done the most home runs, best batting. You can't do that in basketball because they change the rules so much. You can't do that. Football, they change the rules. So that's why they were so resistant to change the rules in baseball. And that's why they were so up in arms about the steroid thing. But I do think founders do the equivalent. Like when I was growing up, I'm a beer drinker, you know, the team definitely tied on. You go to, you go to a Sequoia founder dinner.

[Patrick O'Shaughnessy]

Yeah.

[Brian Halligan]

First of all, it's at 5:30.

[Patrick O'Shaughnessy]

Oh.

[Brian Halligan]

Like early. And everyone has a salad and it has water and then back in the room coding by 7:30. That's definitely not how I grew up.

[Jordy Vandeput]

Do you think beer. Do you think beer gave you an edge back in the day?

[Brian Halligan]

I don't think beer gives anybody an edge. I think it helped me connect with some employees along the way for sure, particularly salespeople.

[Patrick O'Shaughnessy]

What do you think about co CEOs? Yay or nay?

[Brian Halligan]

Okay. I think Sandhill Road is very negative on this, except on stewards.

[Jordy Vandeput]

We have co stewardship.

[Brian Halligan]

Yes, we can talk about that too. But I talked about this on one of the pod episodes with Vlad Tennis. He was a co CEO for like the first seven or eight years of the company. And I was very surprised to hear that. And he was very positive on it. I think you can do it. I think it's a little dangerous. You better know the person very well and be able to finish your sentences. Like my co founder, Dharmesh and I, we weren't co CEOs, but we ran it like a partnership and we thought of it like a partnership and the employees thought of it like a partnership. If we called ourselves co CEOs, that would have actually worked quite fine.

[Jordan]

Fine.

[Jordy Vandeput]

That makes sense.

[Brian Halligan]

Want some other things that surprised me?

[Patrick O'Shaughnessy]

Yeah.

[Brian Halligan]

Here's the weird thing. Two of our most successful entrepreneurs of our generation are Jensen Huang and Elon Musk. And they've obviously got really unique playbooks. Like Jensen's got his 60 direct reports and the. No one owns all the stuff we just talked about. Elon Musk has his algorithm, and he credits the algorithm with a lot of his success. I ask all of the CEOs on the pod, who's on your Mount Rushmore? Who do you follow? Who's your inspiration? For me, it was Steve Jobs. My generation is Steve Jobs. None of them really say Elon or Jensen. No one's copying their playbook. None of these CEOs have 60 direct reports, and not a single person has mentioned the algorithm. I think that's quite odd. Do you?

[Patrick O'Shaughnessy]

Yeah. We actually polled YC founders the last demo day. We asked probably 20 or so who was their favorite entrepreneur, like, who they look up to. And I was expecting like half to say Elon and maybe a third to say Jensen. Something like that. Just like Vanilla Market Cap. It's a question. We didn't prep them. We didn't tell them we were going to ask them this. This is off the top of their head. And there were maybe like two or three Elons, but it was all over the place. And it was. It was way down the stack. I mean, there were some people who Are like the founder that I look up to most is like a founder who started their company five years ago and is a unicorn now. But like, certainly not like one of the greats, like, obviously doing fantastically. But like, like this is like a series B or series C level founder. And they're like, that's who I actually look at.

[Jordy Vandeput]

I was shocked. I don't even think a single person said Jeff Bezos.

[Patrick O'Shaughnessy]

I don't think anyone said Jezebezos, a.

[Jordy Vandeput]

Guy with 120 billion of 2024 free cash flow EBITDA.

[Patrick O'Shaughnessy]

Yeah, it was crazy. It was much less concentrated in the Mag 7 than I thought it would be. And I don't know if that's a shift in how younger entrepreneurs or newer entrepreneurs are thinking about what success looks like. Like the, maybe the downstream critique of like the, the teal monopoly thesis is that, like, it's actually really hard to go start a business that is in the social networking category or in the online commerce category. It's just harder to do that. And so maybe people. Some people read 0 to 1 and they said, hey, I got to start a company. But then other people read 0 to 1 and said like, like, hey, I better not set my sights too high because realistically, how am I going to compete in some of these monopolistic categories that have been truly dominated by the hyperscalers? It's going to be hard for me to go zero to one in those categories. And so I need to maybe find a smaller market. I don't know, maybe it's a trend.

[Brian Halligan]

One of the things that surprised me about them is they don't really have anyone that they're really following or looking up to. They're very much their own people people. And they're kind of making it up as they go in there and they're writing the rules kind of based on what they think makes sense. They don't have, like, when I grew up, I had two people. I've two CEOs, Steve Jobs, Jerry Garcia. Those were my two heroes that I tried to base my behavior around. And they were my courses. These guys don't have Coruscants. The other thing that's interesting about all of them, them is like, be yourself. Everyone else is taken. They're all very, very, very different. Homo sapiens, like Vlad Tenev is very, very, very different from Parker at Ripley. Anton from Lovable is very different than mati from 11 labs. They are all quite unique, which I like to see that. And they're in. They're their own people. They have a lot of agencies.

[Jordy Vandeput]

Are you interviewing. Interviewing anybody that runs her company remotely?

[Brian Halligan]

Nobody's doing remote. Everybody is in the office. Remote is dead. And Everybody talks about 996. I think there's a lot more talk about 996 than walk on 996. I don't think very many people are actually doing it. The CEOs are though. Every CEO I talk to is under. Like I say, what's your stress Level one to ten. Ten. Almost all of them say ten.

[Patrick O'Shaughnessy]

Yeah. What do you think about this idea that a lot of companies are996ing in a hybrid sense? That because the tools have gotten so good, I mean, a software engineer can fire off a prompt at home on their phone that will go and start doing work that gets reviewed in the morning. I'm firing off a deep research prompt for something that we are going to talk about on the show. Yes. Tomorrow. And so, and so there's this like ambient level of remote work that's happening on top of the in person work that's happening. And so I might, if I were to push back, it might be that remote is not dead. We said, yes, and we said, let's go back to the workplace. Let's work in the office. And then let's also work remotely at home on Saturdays, on the nights and weekends, because that's what it takes to win. And so the996 thing is happening, but across to two spaces.

[Brian Halligan]

I totally buy that so much work is asynchronous now. I just think like we went remote at HubSpot pre Covid and like, the culture's great, it's still great, but you lose something, you lose, you definitely lose something. So I'm very supportive of the announcing. Like, if I were starting a company today, I wouldn't do remote. You know, your headquarters in San Francisco. San Francisco is a bear of a place to scale a company. Salespeople are hard to find and really, really expensive and not loyal. Developers are even harder. And so I do a big hub in San Francisco and then another big hub, let's say in Toronto, where there's a lot of salespeople, a lot of developers, and be like, we're in office and at least four days a week. I think that's a good call. Ironically, the people who I think the CEOs who I think are the hardest core are the two European founders. I interviewed Anton from Level and Matib from 11 Labs. Like they are seven days a week. They expect everybody in the office for seven days. A week. Those two are the hardest core, even more so than our American brethren.

[Patrick O'Shaughnessy]

Well, the pressure on them is immense because people have such. So low of expectations for Europe. So, you know, they have to deliver for their country. It's really, it's really high.

[Brian Halligan]

It's kind of patriotic. For sure.

[Patrick O'Shaughnessy]

Of course. Lead the thing. Talk about the stewards.

[Jordy Vandeput]

One second. I was curious. You said the CEOs you interviewed, dude, all of them or the CEOs you talk to? All of them say their stress level is 10 out of 10 for the most part. They do 15 years running. HubSpot. When was your like, does that resonate? Was it kind of steady state, 10 out of 10 the whole time? Or did you at some point figure out a motion that allowed you to maybe hover it, you know, a seven, which is maybe like a healthy amount of stress.

[Brian Halligan]

It was pretty close to 10 the whole time.

[Jordy Vandeput]

Time just white knuckling was pretty stressful.

[Brian Halligan]

Like the whole thing was stressful. And, and like the thing with HubSpot, most companies like, it looks pretty smooth from the outside, but it was like two steps forward and like one freaking giant step back. And two steps forward, giant step back. You're stepping in it. And at HubSpot, like, we were kind of a wartime company. Like, I like Ben Horowitz book and he's got a whole chapter on wartime versus peacetime CEOs. All of these CEOs are wartime all of the time. And if they don't have a war going on, they kind of create a war. I thought that was kind of interesting. It's a wartime era. The only CEO I interviewed that is not like 10 out of 10 stressed is Nikesh from Palo Alto Networks. He's a cool cucumber.

[Patrick O'Shaughnessy]

Yeah. I wonder why. So secure.

[Brian Halligan]

He doesn't work. A lot of these guys are.

[Patrick O'Shaughnessy]

I mean, yeah, like, this has strength of, strength of market position.

[Jordy Vandeput]

Right.

[Patrick O'Shaughnessy]

Like if, if you are running a company where Sam Altman's out there being like, I would love to eat off of your plate. I would love to launch a competitor. And then like Satya Nadella is, oh yeah, we're going to do that too. Like, you better be operating at a 10 out of 10.

[Jordy Vandeput]

Sam.

[Patrick O'Shaughnessy]

Sam, you're going to get cooked.

[Jordy Vandeput]

Sam. Competing, you know, effectively competing with Microsoft. While Microsoft has all his IP and he has to give him 20% of his revenue and he's got to pay quarter of a trillion over the next few years.

[Patrick O'Shaughnessy]

He might come for your nice little startup.

[Brian Halligan]

Virtually every company. I was just looking down my List of kids, stable, adult, stable. Virtually all of them are extremely nervous about what OpenAI is going to do. It's a long conversation at every board meeting.

[Patrick O'Shaughnessy]

Of course. Of course. The steward thing, I'm so interested. Why doesn't Sequoia just have one CEO? Why don't they have a super gp, like a head partner? Named partner. You could just rename the fund. Kleiner was doing that for a while with Caulfield buyers. There's so many different ways to approach it. The Blue Owl we were talking about earlier, they have two CO CEOs, and I think they have three CO presidents. These names kind of mean nothing, but they also have extreme weight. So what is a steward in the Sequoia Capital context? Context? Why not CEO, why not president? Why steward? And then what does it mean to have two now?

[Brian Halligan]

Okay, I actually like the word steward because, you know, Don Valentine started and Michael Moritz and Jim Goetz and Douglioni. Like, it's been a long line of really strong leaders in Ruloff that they've handed it down to. And the thing that's interesting about Sequoia, so I've been in there for a little over a year here, is they are not at all, like, even remotely resting on their laurels. They are paranoid, they are aggressive. They don't want to blow it. And so steward is actually a decent word in this particular case. I think Ruloff was ready to move on. He wanted to move on on top. And there were just two really obvious candidates. Alfred Lynn's got an incredible track record. He runs the early team. He's a good leader. Pat Grady's got amazing track record, runs growth team. Like, picking one of those would have been tough. They work well together. It's like, let's give it to him both. And I think Sequoia has done that kind of thing in the past. So it's not unprecedented. And I think it's going to work well. And they don't call themselves. They call themselves stewards, but internally they're like, just call us partners. And they've made a big deal out of that, which I think is.

[Patrick O'Shaughnessy]

I imagine that they go around the office saying, you have to call me Steward Lynn now. You have to call me Steward Grady now. And also, don't make eye contact with me. I will wear long, flowing robes. No, yeah. It's just interesting, the actual aesthetics of it. I mean, we don't need to get into the actual dynamics of the changeover from Roloff to the co stewards. It's just I wonder if. If a co CEO dynamic is sustainable or if it is an audition process for the final boss, the final CEO.

[Brian Halligan]

I mean, it hasn't worked a lot. I mean, Netflix is doing it, Spotify is doing it, but you can't think of a lot of examples. And it looks like it kind of works with Netflix. Like that's been going on for a while and it's doing pretty well.

[Patrick O'Shaughnessy]

Well, yeah.

[Brian Halligan]

I mean Spotify is really. There's just not a lot of precedent for it. So I don't know. It wouldn't be my first choice to be a co CEO or to fund a co CEO, but in some cases it can work. I think it's a little unorthodox.

[Patrick O'Shaughnessy]

There is an interesting dynamic where.

[Scott Sanders]

They.

[Brian Halligan]

Call it a partnership for a reason.

[Patrick O'Shaughnessy]

Yeah.

[Brian Halligan]

You know, it's not a corporation, it's a partnership. And so that vibe has stretched over five decades for these folks.

[Patrick O'Shaughnessy]

Yeah. I wonder the benefits of having two people in the same in the role. Like it becomes less pressure for one person. But then you also don't have necessarily like the buck stops with one person. There's all these like odd dynamics. Like there's benefits and costs to having the.

[Brian Halligan]

I think they can get a lot done and they can divide it up and get a lot more done. That was the case with my co founder and I. Like we divided a lot stuff of up and we got a lot of shit done together in our respective parts. And I deferred to him a lot. He deferred to me a lot.

[Patrick O'Shaughnessy]

What do they call it? Duarky, where there's two kings. Monarch is one key. Duarchy is two kings. Very rare.

[Jordy Vandeput]

How have you been processing this New wave of AI agent startups that are, in my view, oftentimes competing with traditional SaaS, companies that may have only been started a few years ago. How have you been processing it?

[Brian Halligan]

Well, I'm involved with a lot of them. I mean, they have escaped the gravitational pull of the Earth's revenue. Like, holy crap, are they going fast? And HubSpot grew fast in its day and it's like, wouldn't even get a second look from a VC now. And it's remarkable what's going on. And I tweeted a week or two ago that like, it's a bubble. If you get an offer to sell your company, you should do it. You should take money off the table. And on one shoulder I'm like, it's definitely a bubble. The valuation is crazy. 100x and whatnot. On the other side of my shoulder. Like I just have never seen in the history of mankind growth like this. So maybe it's not, I don't know. Where do you guys come out on that? Are we in the middle of a bubble or is it just match the growth?

[Jordy Vandeput]

I think we've had a, you know, we talk with a lot of investors and sometimes we get a little concerned when people come on and say they don't care at all about margins. We worry a little bit about those clips ending up in documentaries about, you know, whatever, whatever this moment in time.

[Patrick O'Shaughnessy]

You're either in a bubble or you're in a crash. And we're definitely not in a crash right now.

[Jordy Vandeput]

Yeah, I get, I get, I get, I would say I get like, my concern comes from, from companies that spring up and are raising because they're positioning their product as this AI agent, when in reality it's hard to tell why it's gonna be a better solution oftentimes than something that looks like a normal SaaS product. And so I get concerned because I know that the SaaS companies in their category have access to all the same tools and they have distribution and they can potentially use the advantage they have of having this big product surface area and a bunch of core existing product and then just compete on all these new product lines. And I just wonder if some of these AI agent, these more native AI companies will struggle to actually compete with. And you've seen this. It's not like companies like Notion, for example, didn't sit around and say like, no, we're not going to integrate Link into our product. Like that seems cool, but we're just a, we're, we're, you know, a notes product and we're going to stick to handwritten text. Like they were incredibly quick to integrate all the best models into their product. And so I just don't, I don't see like the most recent generation of teams like asleep at the wheel at all.

[Brian Halligan]

Yeah, I'm old enough to remember the last platform shift from client server to SaaS. And the client server companies were very much in denial of SaaS for a long time. I remember Oracle just being very vocal that SaaS is a bunch of BS and obviously SaaS did very well. Some of those folks did well and they came across SAP did pretty well. Oracle did pretty well. Oracle did fantastic actually. The thing that's different this time around is all the SaaS players, including HubSpot, were very early on it and are investing heavily in it and are building cool sets stuff and they have a Little bit of advantage and they have a lot of data and a lot of context which is really useful if you're building agents. So I wouldn't, I don't, I. I think SAS is alive and well and I think a lot of these SAS companies, HubSpot ServiceNow notion. So many of them are building cool stuff like inside of HubSpot. I think of it as like a platform with applications and agents. You can build agents on it, you can use our agents and then it's got a co pilot that you can, can refer to. It's all starting to work. People are using it. The thing that's interesting about some of these Asian companies is they're working in areas where there's. There weren't SaaS companies like Harvey is doing incredibly well. It wasn't really a, you know, wasn't an area with a lot of big SaaS companies in there or Rogo selling to investment bankers. Like a lot of, a lot of the early huge wins on the agents are in funny areas. There's a company called Juice Buy Box Absolutely ripping is in recruiting areas where they're like a big incumbent. Like they're filling in there and some of them are co piloty sort of you're working alongside of it and some are autopiloty and the autopilot ones I think will be the ones to really watch.

[Patrick O'Shaughnessy]

Yeah, it feels really hairy for Microsoft to go after legal AI just because that's not really. They sell mostly general purpose tools tools and so if you're building an Excel plugin where you bring an AI to Excel, I'm worried a little bit about where that goes. But if you're building something that yes, it ostensibly is a Word document, but your entire business is often this industry that's heavily regulated and Microsoft has only penetrated with the broad tools and has never really built a vertical solution in that category. I feel much less worried about you being attacked from the labs. But thank you so much for taking.

[Jordy Vandeput]

I'm excited for your new show. Excited to check out the first episode.

[Patrick O'Shaughnessy]

And the number of stewards at Sequoia is doubling. So any day now you might get the tap on the shoulder, be the third, fourth, fifth steward. They're adding more stewards every day. We're pulling for you.

[Brian Halligan]

See you guys.

[Patrick O'Shaughnessy]

See ya.

[Jordy Vandeput]

Cheers.

[Patrick O'Shaughnessy]

Google AI Studio Create an AI powered app faster than ever. Gemini understands the capabilities you need and automatically wires up the right models and APIs for you. Get started at AI Studio Build. Our next guest is Dr. Fei Fei Li from World Labs. She is A world renowned computer scientist. Thank you so much.

[Jordy Vandeput]

Welcome to the show.

[Patrick O'Shaughnessy]

Thank you for taking the time to talk to us today and congratulations on the launch.

[Jordy Vandeput]

Massive.

[Fei-Fei Li]

Hi guys, how are you?

[Patrick O'Shaughnessy]

We're doing fantastically. I have so many questions about what you're building. I'd like to start with why you're building it. Specifically, what was the moment where you decided to go and start the company? Because the big institutions haven't exactly given you the cold shoulder. You've been associated with Stanford and Google and on the board of Twitter at various times. You could be doing work inside of a hyperscaler, I'm sure. Why did you want to build, build a company outside of the big labs?

[Fei-Fei Li]

Well, because we had a vision. We had a vision we really believe in. We believe that AI as a civilizational technology will help humans and superpower humans in many aspects of the intelligence industry. One of them is spatial intelligence. And that is something that is, is in my opinion, still in a budding stage. And our vision was ahead of most people. And this is something that my co founders and I really feel passionate about because without this, AI or AGI would not be complete. And we want to pursue that vision and that mission.

[Patrick O'Shaughnessy]

Talk about how you think about spatial intelligence. There's so many data primitives from GIS data, GPS data, there's dot clouds and all sorts of different ways, even just video footage. Like what we're generating right now. We're generating spatial data to some degree. Where did you think the initial data sources were lacking? And then how do you think about building up the stack to kind of advance this and move it a step forward?

[Fei-Fei Li]

Yeah, you're totally right. Spatial intelligence is actually as huge or horizontal as say, linguistic intelligence or language intelligence. So there is many aspects of it, but fundamentally I think it's deeply perceptive. It involves seeing and understanding, it involves reasoning, it involves the ability to create in the mind's eye what worlds look like and also the fundamental ability to be able to interact with the worlds, whether it's physical or virtual, in a very profound way. And if you put all these together, we haven't had technology that can really do all of the above. And we're still on a journey to unlock that. But one of the things we just have done is really putting out the world's first 3D world generation model that is available to everybody. And not only it's generative, it allows users to interact and create and edit. Your question about data is actually an important one because it's hard, unlike language, unlike videos, unlike Images. You don't have too much 3D data out there on the Internet. They're much more specialized. So as a group of technologists, we actually have to, we have to just work harder. And you know, and frankly we use a hybrid approach in data. Some are large scale from the Internet, some are large scale from simulation, some are real world captures. And a lot of data also comes from algorithmically processed. That's really important because it's just a much richer problem. 3D is a much richer problem.

[Patrick O'Shaughnessy]

So the product that we just saw, it looks a little bit like a video game. I can imagine a bunch of different ways that this gets built into something that feels like a video game. Or maybe there's this new trend of folks who are using AI tools almost as like these, they just enjoy generating songs on Suno or they enjoy just creating for the sake of creating. It's like you sell a guitar and then someone plays the guitar and they never commercialize their music. They just enjoy playing the guitar. And so I'm wondering if you have a view on, is it too early to tell what your customer base or what the user base will look like? Are you just hoping to get this out and then see who shows up? Maybe there's a robotics company that needs a bunch of data and so the use your model to generate synthetic data. Or there's people that just have fun with it and they wind up paying because they enjoy the service.

[Jordy Vandeput]

Yeah. I wonder if people sort of underrate world models because they look and feel today often like video games and so they don't understand kind of the significance and so. Yeah, I would love to understand.

[Fei-Fei Li]

You're so right. Yeah, you're so right. I think people underrate world models because we haven't had world models. It's not people's problem, it's that the technology is really hard. It's the next frontier of AI. And like I said, this is the first time a generative 3D world model is available to everybody. And humanity has only known one world, that which is the 3D physical world. But now suddenly we are in a multi universe, multiverse situation because of this technology. So who will use it? I agree with you, actually. You know, just the sheer joy of the immersive experience for the sake of enjoyment itself is really fun. I was just talking to a user earlier today about the VR button on our product. Click on that VR button, it takes you to, if you have a headset, you can just purely enjoy the immersive experiences and of course add some favorite music of yours that will be even better. But dialing all the way to professional use. There is a lot of professional use cases. If you go on our website, we have a page called Marble Labs where we show creators from vfx, from game developer, developing world from design world, architecture from robotic simulation, even clinical research, which I personally never thought about, are already finding use cases. So it's very horizontal. But I think creativity and simulation are going to be two very large areas that people will find this really useful and superpowering.

[Patrick O'Shaughnessy]

Okay, help me understand tool use in the world model context. So there was a model moment where the large language models, the transformer based GPT3, GPT4, those models were getting really good at math and they were basically just memorizing math. And you could just ask them what's 100 plus 50? And it would just tell you 150. And it was sort of learning math and then at a certain point it broke down and it couldn't do really complex math, just in the actual weights. And so the solution was to teach it to write Python and give it a Python repl and let it write some code. And then you get the perfectly accurate math when you need that from the, not just the LLM weights, but the actual model, the experience. And so what I'm interested in is that I've seen evidence from Jeanne and your model and world models generally. There's this idea of persistence and the base model getting good enough that if I go up and I paint the wall and I come back later, the paint's there, the model remembers this. Maybe gravity, there's all these things that are simulated. But at a certain level it feels like if I need an inventory in my game, maybe we should just use a database. And so I'm wondering where you see tool use coming in to layer on top versus where you think you're on a scaling law, where if you just keep working on the base underlying model, you will get all of the of that functionality for free.

[Fei-Fei Li]

Yeah, great question. So I want to answer your question in two different ways because you ask a very important question technically, which is the scaling law of these models. But then you also ask the really important question of the tool use on the scaling law side. 3D generative world, or just world model in general is actually a earlier technology than language models. So we're seeing budding size of scaling law, but this is an interplay between model architecture as well as data. So what I can say right now is we're absolutely seeing budding signs of it, but the curve hasn't gotten to the point where we see LLMs yet, which makes this technology really exciting. And being at the forefront of it, we really do have the best 3D generative world model is exciting. On the tool use side, this is where I find it fascinating. I think when it comes to the usage or the use cases of World Model, there's a lot of professional use cases, whether we're talking about VFX for movie industry or game developers. When it comes to professional use cases, I personally really believe that superpowering creators and developers is very important. That means it needs to give them the sense of control and agency. You know, if you try our model and product, there is an option just prompting a result out. And sometimes it's a slot machine, but it's said it to be a pretty good slot machine.

[Patrick O'Shaughnessy]

I love a slot machine.

[Fei-Fei Li]

Yeah. And that's great, right?

[Patrick O'Shaughnessy]

That's amazing.

[Fei-Fei Li]

But as a creator, in your mind's eye, there's actually so much nuance. There is so much story in your mind, so much, so much you want to express, whether it's for a game or for a movie, for a story, for, for even like trying to get the robot to do train the robot. So we actually put a lot of thought in using native AI capabilities to allow the users or the customers to engage in the editing and controllable creative loop. So if you prompting something and you don't like the wall color here, we actually allow you to set, say, well, change the wall color from green to purple or say, add this object or say I want to expand here or allow you to stitch together the worlds that you see or allow you to actually give a 3D layout so that you can put the couch where it is. So this is very important and this is the tooling side of it. It gives the controllability and agency to the human collaborator.

[Patrick O'Shaughnessy]

Yeah, you can go.

[Fei-Fei Li]

By the way, my team told me I have to put this on now.

[Jordy Vandeput]

There we go.

[Patrick O'Shaughnessy]

Thank you.

[Jordy Vandeput]

Love it. What kind of progress can we expect from World Labs on the next two, three years? What are your ambitions in terms of just general progress?

[Fei-Fei Li]

Two, three years? I think we need to. Two, three years is a long time. Things are moving so fast. Spatial intelligence is so horizontal. And it's a platform. I do envision that marble. Our product is a platform that can empower creativity simulation. I think we're gonna see a sea change in multiple use cases. On the gaming side, on the VFX side, on the metaverse side, on the robotic simulation side, on design side, all these are really. I wouldn't say it's almost ripe for changes. And we were seeing that level of excitement from many, many users that.

[Jordy Vandeput]

What game developers or platforms do you think will be most quick to adopt world models? Because it feels like, it feels like Roblox, I'm sure you've chatted with them like Roblox should be jumping on this because it could be something that any of their users could get a lot of value from immediately speed up that creative process. But I can think of any. And some of the visuals we've shown on the screen. I'm just like, I wish that I had World Labs when I was playing first person shooter games as a kid because you could just generate infinite maps for the games that you were playing.

[Patrick O'Shaughnessy]

You're watching this and you're like, yeah, the environments look beautiful. I just wish I had an assault rifle in this game. And there were bad guys.

[Fei-Fei Li]

Yes. And if you look at our page on Marvel Labs there are, you know, shooting games examples already. So I don't know, I, I think the sky is the limit. Literally. Of course. I think what's exciting in this Gen AI era is that a lot of just creators and technologists, many of them are individual developers or indie studios and small teams are really jumping in really fast and, and Genai models like ours really lowers the bar of entry for many of these use cases. So to be honest, we're also talking to bigger teams. I'm actually very pleasantly surprised by the level of enthusiasm from bigger teams as well.

[Patrick O'Shaughnessy]

The team's going crazy. They're actually playing your wife.

[Jordy Vandeput]

Is it possible that we're in a, a, we're in a World Labs model Simulation. Simulation at this very moment. Have you.

[Fei-Fei Li]

Sure, yeah.

[Patrick O'Shaughnessy]

After this time travel after generated this.

[Fei-Fei Li]

Way.

[Patrick O'Shaughnessy]

Getting back to some model, the.

[Jordy Vandeput]

Model is getting really good.

[Patrick O'Shaughnessy]

Yeah. I would love to know your thoughts on market structure and how things might play out because I have been completely convinced of your vision for where we are on this technology, how early we are and what's going to happen over the next few years is like just the, I don't wanna call them easy wins but like the logical. Play out the scale and you get somewhere really exciting. But I'm interested in the market dynamics. So in chat in LLM we saw sort of a, somewhat of a monopoly emerge, a clear winner in consumer chat knowledge retrieval with OpenAI's ChatGPT of course now other firms are obviously working on that and competing then in the enterprise you have more of an oligopoly maybe emerging between anthropic Gemini and OpenAI's API. There's obviously a long tail of other providers, then you have the wrappers. And I'm wondering if there's going to be something similar that happens in world models. Is it worth thinking very hard about being the winner in consumer specifically and not partnering with Roblox, but being the next Roblox, being the platform that wins consumer, even if it means pulling back from an API business in the short term? Or is it just too soon to tell and it might be kind of totally different? I'm just wondering how you're thinking about the long term market structure for what feels like a distinct technology from LLMs.

[Fei-Fei Li]

That's a great question. Actually, by and large, I think it's a little bit early to tell. So right now, like I said, we just rolled out the first generally available, publicly available model and we're going to focus on being a model company for a while because science is still early. Yeah, we want to move fast and there is a lot to be unlocked. I also think that, I don't think we're a model in the way that we are defining it, especially in the deep spatial intelligence way is as consumer as a chatbot, because I think 3D is a, a representation. It's a, is a medium that is, that has its own, own characteristics. So I think that we're going to see, we're going to see products that are going to build around these models in, in different ways. Some are for creators, some are APIs, some are for possibly even different use cases.

[Brian Halligan]

And.

[Fei-Fei Li]

I'm not saying there's no consumer. I actually think the market might surprise us, especially on the Metaverse side.

[Patrick O'Shaughnessy]

I think it's going to surprise you. I think it's going to be a huge consumer category. There's a lot of work that needs to be done to actually make it a place where people want to hang out for hours and hours and hours. But I do think it's going to happen and I think that it's a bit of a race, but it is extremely exciting to even just be on the, at the, at the, at the, at the model layer and then, you know, experiment at the application layer.

[Jordy Vandeput]

Because we've seen model companies get into the application layer.

[Patrick O'Shaughnessy]

Yes, yes, exactly.

[Fei-Fei Li]

Of course, of course, of course. No, we are, we're absolutely, I mean, Marmo itself is an application, of course, of course. App.

[Patrick O'Shaughnessy]

Yeah, yeah.

[Fei-Fei Li]

But we are going to focus on model. This is the world Apps is a deep tech company and I think focusing on model is the right Thing to do right now.

[Patrick O'Shaughnessy]

Yeah. How are you thinking about fungibility between formats? It feels like there's maybe a unique value in having a world model that can export Gaussian splat, but then also export geometry. Also Export just an MP4 for different stages of like a VFX pipeline, for example, something that Hollywood might want to do. Do you think that you need to have like translational models or is there like one model that becomes like multimodal that can handle all the different formats? Whether I want an OBJ file and I want a 3D, you know, point cloud or an olembic can just get whatever I want from the same model or do I need specific models to translate between them?

[Fei-Fei Li]

I don't know if you have played marble yet. We are actually multimodal. We are right now exporting Gaussian splats, mesh, mesh colliders, MP4s and images and panels.

[Patrick O'Shaughnessy]

But is that all from one model that's trained or is there a translation layer between the output outputs? Is there like one foundational truth? And then like, it's like ChatGPT is not specifically trained on. There's not a Spanish version and an English version and a French version. It just learned every language when they did the big pre train. Is it the same thing or is there actual like. Or is there a, like a translation layer that you need to do in a series of different models?

[Fei-Fei Li]

What I can say now is we are a foundation model. Marco is a foundation model.

[Patrick O'Shaughnessy]

Okay, got it. Cool.

[Jordy Vandeput]

More more broadly, where do you think AI is under hyped and where do you think it's overhyped?

[Fei-Fei Li]

Oh, that's a spicy question. Ultimato is under hyped.

[Patrick O'Shaughnessy]

There we go.

[Jordy Vandeput]

Yeah, talk your book, Just talk your own book.

[Patrick O'Shaughnessy]

I love it. I agree though. I completely agree. I think this is a deeply under hyped category.

[Fei-Fei Li]

So to be honest, one, one thing, I consider myself a scientist in my heart and I actually really don't like hyping. I think, you know, that's just. You probably have seen me not on the hype train in most of these discourse. Right? So as a scientist, I think world model is underappreciated because it's so new. And in terms of overheating, I do think that Silicon Valley as a whole tend to mistaken clear vision with short distance sometimes. For example, 2006 Stanford self driving car drove the first 140 miles in the Nevada desert For mankind self driving car, it took 20 years for Waymo to be barely on the road as a L4 and there's still, it's still so limited and this is a massive amount of effort and it's also riding on the coattail of a very mature industry, especially hardware and distribution and use cases and all that. So this is an example to show you there are clear visions, for example, robots that can do all kind of house chores. And as a mom I'll tell you that that would be amazing. Start with cleaning my bathroom. But that clear vision is important. But the journey is going to be long. We have issues with hardware, we still need to figure out data. The world model brain of the robots also need to improve and all that. So that's just an example. And also creativity, right, Creativity industry, which we are also engaging in. One thing I don't call it a hype, I call it a misleading sentiment which actually really bothers me is that we don't want to replace human creators. Human creativity is precious. It takes tells the story of our species, of our culture, of our society, of our community, of each one of us. What we want to do is to superpower and augment creators capabilities. And sometimes the communication of technology is a little skewed towards oh, the model can do all the work in creativity. And I personally really want to highlight human creativity as something that's so fundamental to who we are. And AI is here to help and augment.

[Patrick O'Shaughnessy]

Can you help me understand the relationship between the current AI hardware build out and your technology, your model, your business? I would imagine that you're a beneficiary because there's all these data centers. There might be some slack capacity in the field, but at the same time I've been hearing that a lot of the LLM foundation model companies are partnering with Nvidia to try and steer the development of the next generation of chips to be hyper optimized for LLM inference. And that might be okay for you, but it might actually take us away from something that's optimized for what you do. And so I'm wondering if you could just take me on a tour of what's exciting on the AI hardware build out. From your perspective, where are the risks?

[Fei-Fei Li]

Yeah, so actually I was just in London receiving this award with both the algorithm folks as well as the hardware folks for AI.

[Patrick O'Shaughnessy]

Congratulations.

[Fei-Fei Li]

Yeah. So I think as you.

[Patrick O'Shaughnessy]

It's the Queen. No, no, it is not AI generated. I believe it is recording of an audience clapping but Jordi triggered it from his soundboard. That is the Queen Elizabeth prize for engineering from King Charles himself. Congratulations. We had it here to mention to you, but I'm glad you brought it up.

[Fei-Fei Li]

Yeah. Because you're talking about hardware. I was literally in the room with my friend Bill and Jensen. So as you know, the boat, the most exciting thing for modern AI, for the birth of modern AI is the convergence of hardware, software and data. So from hardware side, I think it continues to evolve for world modeling especially our technology relies on rendering. We do think we will keep our conversation, our side of the conversation going with the chip makers because some of our requirement, especially on the rendering side as well as on the training, the model side will be somewhat different from LLMs. And you know, I would love to, I will and I would love to call for the chip industry to also work with us on this, on this front. What is exciting? I think that's a great question actually. I'm trying to. So I was in Middle east visiting some of the construction of data centers and that was pretty epic. Seeing how large this Stargate data centers are being constructed and it really feels that we're in a different phase of industrial revolution. We never, none of us lived in the days of the steam engines, the electricity, when the scale of industrialization in that time was just multiplying for humanity. I think we are now living in the AI industrialization era and seeing that scaling up is quite exciting.

[Patrick O'Shaughnessy]

Hypothetically. Last question from me. Hypothetically, if I gave you, you unlimited access to a 1 GW data center, the best and brightest, the hot off the presses, the freshly installed 1 GW data center, probably billions of dollars invested in this, would you do a training run? Would you run your model? Would you just scale up or would you say hey, I need more time, time to actually advance the way we think about training before we press go on the big run.

[Jordy Vandeput]

Yeah, that was going to be. My question is like at what point does World Labs become capital constrained and are you capital constrained today? Yeah.

[Patrick O'Shaughnessy]

Or is it the whole bitter lesson.

[Jordy Vandeput]

Research and new ideas.

[Patrick O'Shaughnessy]

There are different parts of the business that are bitter lesson pilled and others that aren't. And I'm wondering like what, what pieces are, are currently on the great scaling curves?

[Fei-Fei Li]

Yeah, like I said, the scaling curve. From a model architecture point of view, we're still early. So If I have 1 gigawatts and that many chips, I'm more likely going to actually run some parallel models and experiments to really hole in the the bet. So. So it doesn't mean we're still trading large models, it's just not at the level of today's LLMs yet. So are we capital constrained. We are capital constrained.

[Jordy Vandeput]

You got to start hyping. Okay, well, we're going to, we're going to hit the gong.

[Patrick O'Shaughnessy]

Hit the gong. Capital constraints. How much have you actually raised? How much can you do? How many can you share publicly?

[Fei-Fei Li]

It's known that we've raised more than $240 million.

[Jordy Vandeput]

Publicly.

[Fei-Fei Li]

Let me explain why. Why did you hit the golf just now?

[Jordy Vandeput]

Because we're increasing the hype.

[Patrick O'Shaughnessy]

Yeah, we hit the golf.

[Jordy Vandeput]

We heard your capital constrained. We hate that.

[Patrick O'Shaughnessy]

Yes, yes, it's a good sign.

[Fei-Fei Li]

It's a mutual hype. And wear your hat.

[Patrick O'Shaughnessy]

Yes, we appreciate that and we appreciate you taking the time to come talk to us. Thank you so much. This was extremely exciting, extremely enlightening.

[Jordy Vandeput]

Yeah, we're very excited for you.

[Patrick O'Shaughnessy]

Congratulations on your launch and we'll talk to you soon.

[Fei-Fei Li]

Yeah, thank you, guys.

[Patrick O'Shaughnessy]

Thank you.

[Jordy Vandeput]

Cheers.

[Patrick O'Shaughnessy]

See you soon. Before we bring in our next guest, let me tell you about profound. Get your brand mentioned in ChatGPT. Reach millions of consumers who are using AI to discover new products and brands. Let me also tell you about linear. LINEAR is a purpose built tool for planning and building products. Meet the system for modern software development.

[Jordy Vandeput]

I'm going to ask Kari to project roadmaps.

[Patrick O'Shaughnessy]

I'm loving the new Stingers.

[Brian Halligan]

Look at that.

[Patrick O'Shaughnessy]

That looks fantastic. Our next guest is Scott Sanders from Forterra. He's got some big news. How you doing, Scott?

[Jordy Vandeput]

What's going on?

[Patrick O'Shaughnessy]

Good to see you. Good to see you too. First time on the show. Introduce yourself, let us know what you do, how you describe Forterra for those who don't know.

[Scott Sanders]

I mean, first off, longtime listener, first time caller. I think I was actually the subject of the original tvp. Then print the Internet situation where you were printing out physical memes and I criticized that.

[Patrick O'Shaughnessy]

You criticized it.

[Jordy Vandeput]

Okay. Well, you came around.

[Scott Sanders]

I came around.

[Jordy Vandeput]

Was it like we were using up too many piece of paper?

[Patrick O'Shaughnessy]

Is this an environmentalist thing you were anti printing or something? What was going on?

[Scott Sanders]

No, the Internet exists on your computer. What's the need to physically print it off every day?

[Jordy Vandeput]

Well, I printed your new. We printed. I will put it out there. We printed your news here. We printed your news because we care so much. We wanted to physically hold.

[Patrick O'Shaughnessy]

We like the Wall Street Journal, we like the Financial Times. You know, you'll come around.

[Jordy Vandeput]

We should, we should do like a tvpn. Like for every episode we plant a tree just to make sure that, you know, we're, we're replacing.

[Patrick O'Shaughnessy]

But I feel like you, I feel like we're kindred spirits. You, you work on physical things. We, we work in, in physical, in the physical realm. Of course, there is a software element to everything that both of us do. But give us the update on what you're building because it does touch the physical realm, Correct?

[Scott Sanders]

That is true. We do build hardware. Yeah. We announced a $238 million Series C today. I think there's a sound effect.

[Jordy Vandeput]

There we go.

[Patrick O'Shaughnessy]

Congratulations.

[Jordy Vandeput]

There we go. Massive.

[Patrick O'Shaughnessy]

Fantastic.

[Brian Halligan]

Yeah.

[Scott Sanders]

But we're, we're building distributed systems for defense starting from the ground up. You know, we feel the, the warfighter. You know, you need drones, you need maritime capabilities. There's great companies building that.

[Patrick O'Shaughnessy]

Yep.

[Scott Sanders]

But we're focused on building stuff that primarily goes on vehicles because at the end of the day, you know, try not to walk into combat if at all possible. And we want to be able to equip those war fighters with, with technology and distributed compute at the tactical edge that enables vehicles to be self driving, act as communication nodes and relays, launch things like load air munitions, put radars into place to detect aircraft or detect enemy shipping, and then put anything from cruise missiles to anti ship ballistic missiles in the back so that we can deter our enemies from invading countries and want them to invade.

[Patrick O'Shaughnessy]

Yeah. My mental model for this stuff is a little hazy. Maybe you can help clean it it up. I feel like there's usually one company that does just autonomy. There might be another that's doing some sort of battlefield tactical mapping, some awareness things. It sounds like you're doing multiple. How do you actually interface with the other touch points? Who do you need to integrate with? Since some people might be familiar with maybe what Palantir builds or what Anduril's built On the operating system level. Can you give me some concrete examples of groups that you're working with or technologies or platforms that you're building on? What's the wheelhouse case study for Terra?

[Jordy Vandeput]

Yeah, and on top of that, I feel like the challenge from a product roadmap standpoint, a product planning standpoint is you have to understand what are the systems that we have in place in our armed forces today and then how the battlefield is actually changing. Because we've heard from other people on the show that, you know, a lot of the equipment that we have might not be relevant in a world where the front line is just drone on drone action.

[Scott Sanders]

Yeah. I think one of the best examples of doing this is actually with one of our partners, Raytheon, where we, or in this case, chaos, in that quick little snippet where with Raytheon we and Oshkosh, we integrated our our Edge compute platform and our self driving software to take a traditionally manned vehicle and make it unmanned. So one, by putting the Edge Compute on self driving vehicles, you're enabling other algorithms and other platforms to run on top of them. So we think about the ecosystem as a partnership approach where we're not going to make everything that a war fighter needs. In fact, no defense company, defense tech or otherwise, can do that. And so we open up our architecture and our system so that a Palantir can run at the tactical edge and not on a giant server rack somewhere. Or in the case of the small multi purpose equipment transports that you're looking at, we put Chaos's long range biostatic radar system on it to detect drones. And our future integrations with those guys will enable them to utilize our compute in our autonomy later. We don't care who's doing the C2, we obviously do our own because you. I kind of have to. But if that's Andros Lattice or Palantir's Gaia or Smart System, we're very open to that. And we've broken up our system in a way that enables the user to sort of make the decision of what capability they want for each different application layer and not wrapping it all into one holistic platform, unless that's what the end user and the customer want to do.

[Jordy Vandeput]

What was yours or the team's reaction to Pete Hegseth's speech last Friday? We had Kathryn Boyle from Andreessen on talking about how Hegseth was basically making a case that was it Cheney made back in like 2001. So these are basically reforms that have been, people have been asking for, for a long time, but we haven't been able to actually deliver.

[Scott Sanders]

Yeah, we were lucky enough to be at that event and, and defense tech reform is a thing people have been talking about since before defense tech was a thing. The acquisition system has become extremely complicated and I think difficult to work with for many companies. And to have a Secretary of War coming out and saying look, this is an actual problem. The rate limiting step on getting technology to operators is very rare. Rarely whether there's the technology that exists that can solve the problem, it's can it work its way through the prototyping into production phases and get into scale production with an end user and that's been very hard. Palantir has been at this for 20 years. Anduril's been at this since 2017 and definitely not going to do that. Math in public. Although it'd be quite easy to do.

[Jordy Vandeput]

He's a growth guy.

[Patrick O'Shaughnessy]

That's amazing. Okay, speaking of growth, how is the company growing? I mean, we've texted about this. It's all sbirs, right?

[Scott Sanders]

Yeah, it's all sivirs all day long. Actually, no, I think too big for sbirs now, which is great. We're about 550 people total and so we're still not that big. Defense tech or defense world, still relatively small, trying to be a scrappy startup and work with not only the legacy primes who build incredible systems.

[Patrick O'Shaughnessy]

Right.

[Scott Sanders]

There's no one in defense tech building 8 by 8, 25,000 pound armored vehicles that can go head to head with major land forces across Europe. And there's only a couple small startups that are starting to do the missile systems that we want to put on the back of these platforms. But, but our approaches, we open up and enable our architecture to work with nearly anyone to deliver that capability. At the tactical edge, we really just feel like humans being the blunting force of combat is a pretty bad idea. Probably 20%. Veterans at Forterra and a lot of us feel very strongly and very passionately that I would much rather have a robot make first contact with the enemy or be the platform that is emitting a large signature on the battlefield. Something firing a missile, firing a howitzer, moving a radar so that when platform is inevitably targeted, it's not a human that's getting targeted, it's a machine. And we're trying to change that dynamic one platform, one program at a time.

[Patrick O'Shaughnessy]

Well, thank you so much for coming on the show and thank you to all the veterans. It was Veterans Day yesterday, right? Thanks everyone for their service and congratulations on all the progress and congratulations on.

[Jordy Vandeput]

The Series C. And next time you come on, we will not print out your news. We'll just go in blind.

[Patrick O'Shaughnessy]

Yeah, we'll just.

[Jordy Vandeput]

Because we don't know how to use computers.

[Scott Sanders]

As long as the next time isn't at 10:30 at night, I'll be stoked.

[Jordy Vandeput]

Wait, are you in Lisbon right now? Were you guys at web summit?

[Scott Sanders]

Josh is at Web Summit. I'm in Paris at Tectonic. I'm meeting with some customers.

[Patrick O'Shaughnessy]

Okay, cool.

[Jordy Vandeput]

Awesome.

[Patrick O'Shaughnessy]

Yeah, we can coordinate better on the time.

[Jordy Vandeput]

Congrats to the whole team on the progress.

[Patrick O'Shaughnessy]

Yeah, awesome. We'll talk to you soon. Have a good, good day. See y numeral numeral.com not numeral hq.com anymore. Numeral.com and sales tax and autopilot spend less than five minutes per month on sales tax compliance. Our next guest is Jamie Allaire from Circle. Just had earnings. Welcome to the show. Jamie. How you doing? Good to see.

[Jamie Allaire]

I'm great. Good to see you guys.

[Jordy Vandeput]

Welcome back.

[Patrick O'Shaughnessy]

Fantastic.

[Jordy Vandeput]

Welcome back.

[Jamie Allaire]

Thank you.

[Patrick O'Shaughnessy]

Give us the rundown. What's the latest in your world?

[Jamie Allaire]

Yeah, well, this morning we announced our Q3 earnings. It was a tremendous quarter. We saw USDC grow 108% year on year, which is fantastic. The amount of activity happening on chain with USDC grew about 600% year over year to $9.6 trillion of on chain activity with USDC.

[Jordy Vandeput]

I think that's the biggest gong ever. Maybe we've hit the gong for various countries. Gdp.

[Patrick O'Shaughnessy]

We might have hit for a GDP once, but that's it. The only thing, transaction volume, that is. Yeah, that is remarkable. That's a lot, of course that's the nature of.

[Jamie Allaire]

Yeah, a lot of other great stuff. I mean we, we, we, we launched something called cpn, which is an on chain money movement and payment network earlier this year. Year that is growing very fast. You know, dozens of financial institutions coming on that network. It's already gotten to an annualized payment volume of about 3.4 billion. Key though, just from a financials perspective, we saw adjusted EBITDA grow 78% to 166 million in the quarter. That's a 57% adjusted EBITDA margin which is about 730 basis point expansion and so, so strong performance on that as well. And then I think really importantly, we recently launched ARK into testnet. And ARK is a new layer one blockchain network that Circle has been building into the market. We had over 100 major companies, major banks, payment system operators like Visa and MasterCard, major AI companies, major exchanges, e commerce companies, gig economy companies, all, all these working with us, collaborating us to deliver ark. And we also announced this morning that we're exploring a token, a native token for ARK Network which is an exciting development for us as well. And so we're seeing a lot of activity in the space. We had the Genius act passed recently and so we're also just starting to see more and more major institutions, major financial firms, payments companies getting in the game and collaborating with us and building products with us as well.

[Patrick O'Shaughnessy]

Can you tell me anything about the anthropic relationship? There's this very interesting concept of using stablecoins to power agents in the future. There's that and then there's also just like anthropic might need to pay someone internationally. Can you give me any guidance on where we are on that.

[Jamie Allaire]

Yeah, I mean look, a couple things on that. I think the first is that you know, we've been working alongside others on these standards for agentic payments using mcp.

[Patrick O'Shaughnessy]

Which does not have MCP does not have standard points yet, but it should maybe in V2 or something.

[Jamie Allaire]

Well, yeah, and standards like X402 and Google's agent to payment standard, we're collaborating on both of those, we're releasing tools for those and we actually have a number of agent developer tools companies that are supporting these things as well. And so, so that's actually happening. It's actually one of the key design centers for the ark blockchain network that we're building, which is we envision a world where over time the velocity of money increases and more and more of our economic activity is machine intermediated and that machine intermediation is going to be in these new computing networks, these provable trusted computing networks which we call blockchain networks. And AI agents will become, we believe, the primary intermediary that's intermediating activity on these. And so we see that as sort of, if you look at these trends converging over the coming several years, we see these kind of compounding each other. And so yeah, we were excited to have Anthropic as a collaborative, a collaborating partner for us with arc and I think, you know, we had a number of other AI focused firms there too. And I think it just speaks to the fact that we need a substrate, we need an execution environment that AI agents can use the, that are trustworthy, approvable. And look, AI agents need to be able to make a 5 cent transaction for consuming some tokens or a $50 transaction. It needs to work anywhere in the world where software works. And that's what these new networks are really good at. And so there's not a payment system that's ever really been built to support that. And I think something like USDC and then these new networks like ARC Network and standards like X402 and others really.

[Jordy Vandeput]

Really help, help with that a lot. Talk, talk about just like the strategy of going full stack and how you guys are positioned against competition at the different levels. You guys are an issuer, you're building, you know, you're building your own network. You're going to have a native token. There's tunt, there's. Nowadays it feels like there's probably a new stablecoin that gets created every second of every day, right? Not, not just a net new of an existing stablecoin but an Entirely new stable. You guys are well positioned in a lot of ways. But I guess talk about how you view your competitive position as a variety of other networks come online and new stablecoins come online. Yeah, absolutely.

[Jamie Allaire]

I mean, I think the first, just start with the core, which is our stablecoin network has really strong network effects. We have liquidity network effects, global, globally, we have infrastructure network effects. Just in terms of where we're plugged in around the world, there's tens of thousands of products and services that integrate to our network, which really drives the developer flywheels. And so we're in a very strong position there. And we're taking that and we're expanding kind of down the stack and up the stack. And I think in our view, if you think about where we are in the evolution of this, the global economic system is enormous and we expect more and more of the economic system to, as I said, become, become machine intermediated on these new kind of economic operating systems. And we're still at the front edge of that. We have a market that really grew out of speculation on cryptocurrencies, and now we're seeing more and more of actual financial contracts, actual trade flows, payments flows, treasury activities, investment products, lending products. All this is actually starting to come over, but we're at the front edge of that. And so, so I think our view is that there are going to be some very significant scaled Internet platform companies built out of this transformation over the next five, 10, 15 years. We think that these can be as big or bigger than prior Internet platform companies that were built around centers of gravity, around search or social or mobile or cloud or E commerce. We think that that's going to take place and we think that we're in a very good position to provide really great infrastructure across those different layers. And I think if you look at what we've been able to do with ark, even just getting to testnet, the range of major firms from around the world that touch literally over $100 trillion of assets, whether those are custodians, exchanges, clearinghouses, payment systems, et cetera, we're putting forward a model that we think can work for scaled mainstream adoption. And so that's an infrastructure problem. And we're doing it in a way where, where we can build a distributed network of distributed stakeholder participation, distributed governance, and kind of bring that into the world. And obviously that's what we're considering as we evaluate the design of an ARK token as well. And then on the other hand, we definitely see an application layer emerging on Top of these platforms I think. Likewise, we're still in the early stages of the application layers behind being built. We are definitely taking a crack at part of that by building a payment utility, this CPN as a payment application. But we're designing it in a way where other financial institutions can use it, benefit from it and generate revenue from it. We're not trying to compete with them as well. And so at every layer of what we do, we try and build kind of market neutrality and interoperability at the core. And that has served us well. I mean one of the things, things we pointed out this morning in the earnings call is, you know, we actually run, as of October, the largest cross chain interoperability protocol in the world. Cctp, which is Circle's cross chain transfer protocol in October was greater than 50% of all cross chain traffic, accounting for all assets across all blockchains. And that's really significant. We really want to be part of the solution to interoperability while we build at these different layers of the stack.

[Jordy Vandeput]

We've had a number of conversations about the local regulatory environment, how that's changing recently, but what's going on internationally? Last time you were on the show we talked about how, you know, part of Circle's edge is having offices in a, you know, in a bunch of different countries and being set up to navigate what, what will ultimately be unique regulatory environments in a, a bunch of different countries.

[Jamie Allaire]

Well, it's been amazing actually since the Genius act, we've seen almost every major government in the world accelerating plans around building local rules around stablecoins. We've seen for example Hong Kong in August went effective with their new rules. We're seeing regimes working on this from major emerging markets to some of the largest developed markets like Korea, which is accelerating their efforts around stablecoin rules, UK accelerating their efforts. So now everyone's sort of getting behind this model of private sector, you know, bank and non bank issued stablecoins, clear supervision, usually supervision by the central banks, just like you know, where we're going to be overseen by the national bank regulator here in the United States. And so that that kind of standard is, is cascading around the world. And I think also a lot of these regulators are, are looking at ways to support kind of reciprocity or kind of consistency as well. And so I think that's really important as we build infrastructure that we know that it'll work in all these different places around the world. So I would say the activity for us internationally has really, really accelerated and you'll See a lot more as well as we go forward, but I think the US is actually really providing leadership right now in this whole area and the rest of the world is taking notice and following. It's kind of a national competitiveness issue as well.

[Patrick O'Shaughnessy]

Fantastic. Well, congratulations on a successful earnings season. We'd love to have you back on the show soon and we'll catch up. Have a great rest of the day or likewise. We'll talk to you.

[Jamie Allaire]

Cheers. Bye bye.

[Patrick O'Shaughnessy]

Goodbye. Before we bring in our next guest from the re waiting room, 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. Our next guest is Vlad. He's building Lighter. We have some big news on the funding side. How you doing, Vlad? Good to meet you.

[Jordy Vandeput]

Welcome to the show.

[Patrick O'Shaughnessy]

Welcome to the show.

[Jordy Vandeput]

What's happening?

[Patrick O'Shaughnessy]

Hey guys, can you hear me? Yes, we can hear you. Please introduce yourself. Introduce the company for those who aren't familiar.

[Vlad]

Awesome. Yeah, good to be here. Actually I think you had my former co founder Scott on a couple weeks ago who's now working on Cognition.

[Patrick O'Shaughnessy]

Oh, Scott, of course. We've had him on a bunch of times.

[Jordy Vandeput]

TVPN hall of Fame.

[Patrick O'Shaughnessy]

TVPN is made possible by Cognition, the makers of Devon, the AI software engineer. We love doing ad reads for Cognition with the other makers of Devil. Oh, nice, nice, nice.

[Jordy Vandeput]

Yeah. We're here to talk about you and Lighter.

[Vlad]

Yes, exactly. So I'm Vlad, I'm founder and CEO of Lighter, which is decentralized exchange built on top of Ethereum. We can talk more about, you know, how we built it and why, but you know, we launched in January and of kind of had pretty strong growth this year with our mainnet and we actually had a public launch in October 1st. But yeah, and I guess before later I worked on Lunch Club with Scott and prior to that I guess I'm kind of like I'm not a crypto guy that got into finance. I'm more like a finance guy who took a detour to AI and then got into Defi.

[Patrick O'Shaughnessy]

Yeah, talk about some of the choices that you've made made, like why Ethereum compared to other chains. Why decentralized exchange of the technical decisions that you made. I feel like we've talked to a lot of folks who have picked out different quadrants. If we do a two by two quadrant or something like that, you've clearly landed in one particular piece, one particular spot on the market map. How would you describe the Trade offs that you've made and then why did you make those trade offs?

[Vlad]

Awesome. Yeah, that's a great question. And we actually started working on lidar right around three years ago. So like mid to late 22 is when we were thinking through that idea maze, as it were. So it's interesting to look back now and the genesis of the idea was that we were thinking about digital assets, right? Like digital assets have been around for 10, 15 years, right? Like they've been traded a lot, I mean, but most of them represent some kind of blockchain or decentralized protocol or like Rails for the future of finance. But the weird thing was that like 99% of the activities of how they're traded actually did not use the Rails of the stuff that these assets are building, right? It was actually trading in a centralized way. And centralized exchanges have, there's some good ones, right? I think some of them definitely have provided value to customers. But at the basic premise, a centralized exchange doesn't actually use the blockchain at its core to verify what's going on. In some cases it's actually worse than tradfi, right? At least in tradfi you have regulations and the legal system to fall back on if something goes wrong. And we said the thing is that actually almost three years to the day is when FTX collapsed and we were looking at that when we were thinking about how to build lighter and we thought, okay, well now people will get it and volume will move away from centralized exchanges after one of the big ones failed and that didn't happen happen. So what that taught us was that actually the decentralized exchanges that existed at the time, their product market fit was so bad that people would rather trade somewhere where there's like a 1 in 6 chance of the whole thing being a fraud than using the decentralized products. So then we thought, okay, well this is something we should be part of the solution to, right? And so for us it's like, okay, what we want to achieve is a local cost, low latency, secure, verifiable and composable. And the first three of those are pretty self explanatory. But what does verifiable mean? It means that everything that happens there's a cryptographic proof that it happened fairly incorrectly. Why is that important? Well, if you ask the reverse question, what if it's not verifiable? Well that means there's some part of the system where, where you're just like, trust me bro. Which is kind of again defeats the. Even if there's one part like that the whole thing could be manipulated or.

[Andrew d'Souza]

Corrupted.

[Tyler]

Right.

[Vlad]

So that's a problem. Right. And then composable is also important because at the end of the day, we're not just trying to build a sandbox for people to speculate on. We want to build something that's composable with the rest of Defi, whether it's lending, stable coins, staking prediction markets, all this other stuff. So that can kind of all work together in smart contracts. So, anyway, so we had those five goals and going back to your question, so Ethereum was the obvious choice for the security layer. Right. For it to be secure. We had a pretty strong view that the layer one that's by far the most secure out of things you can build on is Ethereum. Solana has built a great L1 as well, and others have too. But theoretically, Ethereum is very secure. It's been stable for a very long time. So that was pretty clear to us. And yeah, we can dive into how we achieve the other goals, but as far as why decentralized and why Ethereum, I think that gets into those points.

[Patrick O'Shaughnessy]

I don't know if we have enough time to go super deep into more of the technical side. I'm more interested to hear about how you met Ken Griffin, honestly. So could you tell me the story of the Ken Griffin recruitment? I would love to know. How did he even know to reach out to you, what happened there? Tell me the full story because I think that's fascinating.

[Vlad]

Yeah, yeah. And by the way, I'm also based in Miami now for the last five years, so not only did I learn a lot of stuff from Ken about finance and business, but also that South Florida is a good area in that location.

[Fei-Fei Li]

Yeah.

[Vlad]

But, you know, so. So the, I guess, you know, the thing with my time at Citadel and, you know, so I was 18 when I finished Harvard. And actually, even while a student.

[Jordy Vandeput]

Let's give it up for finishing Harvard at 18.

[Patrick O'Shaughnessy]

Congratulations.

[Jordy Vandeput]

Continue.

[Vlad]

What's that? What's that account like VCs congratulating themselves.

[Jordy Vandeput]

Or we're congratulating you. You just said a fact. You just said a fact.

[Vlad]

But, yeah, so. And actually, like, even at school I did some trading and was working on kind of a side project with two friends around options. And so, you know, so I was doing that and that didn't quite get off the ground, but I got to know the team at Citadel through.

[Jordan]

You.

[Vlad]

Know, essentially like the research firm. So, you know, it's, you know, it's not like Ken personally gave me a call or something, but I got to know the team and they wanted me to join. And then kind of towards the end of the process, Ken got involved and spent a bunch of time with me, you know, to tell me more about what their high level goals are at Citadel and their strategy and why it would be a good fit for me and kind of making sure that I'm comfortable joining them. And, and I guess without going to too much details, I mean, he made it a very attractive proposition for me and was pretty involved the first couple of weeks, especially of my work there. And yeah, he's to this day someone I thoroughly look up to.

[Patrick O'Shaughnessy]

And yeah, I do hope that he's gonna. Fascinating lineage here. There's just fascinating lineage here. Obviously Ken Griffin went to Harvard, was trading in his dorm room. It took him a couple extra years. He didn't graduate at 18, so you sort of mogged him on that front. But then of course he had a deep relationship with Robinhood and Robinhood Markets came in and invested in this round. And so there's a whole bunch of full circle moments.

[Jordy Vandeput]

I did want to quickly ask if you think that the industry fully learned its lesson from ftx because I feel like I've seen some chatter over the last few weeks around various exchanges saying like, no, your funds are frozen, but don't worry, we're working on it. And it's maybe sending some alarm bells.

[Vlad]

Right? So October 10th was an interesting moment for the space. I think that actually Defi kind of as a whole worked well, right. Whether whether it's AAVE or Morpho, all those protocols. And I think our competitors handled those market moves in different ways, but I think all of them in the context of Defi work the way they're supposed to work some of the centralized exchanges. I think maybe again the problem there is lack of transparency. You don't really know, like did they actually liquidate their customers correctly or not? Like maybe they did, right? Like maybe, maybe everything worked exactly as expected. But if it didn't, there would be no way we would even know that. And so I'm not aware of any cases of specific wrongdoing by centralized exchanges in that cycle. But again, with the lack of transparency, there was no way I would know that. And we do know there have been some blow ups of kind of small, smaller hedge funds, like on chain hedge funds.

[Brian Halligan]

Right.

[Vlad]

And what ultimately caused those is unclear. But the one thing I will say is I remember after FTX there was this whole thing about like, okay, let's even centralize Exchanges, let's make them more verifiable and prove reserves. Now, of course, what does that mean? Because you can prove assets, but how do you prove liabilities? But still there's some, some push to do that. And I remember Vitalik had some ideas on how to do that and Binance was looking into it. And then I think someone asked CZ about it and he was just like, well, Vitalik is very technical. Some of this stuff is too complex or something like that. Right. So I don't know if decentralized exchanges have really, truly learned their lessons on that front. But did anything particularly egregious happen that I know of October 10th? Like, I can't say that. But again, the whole point is that it's supposed to be transparent and trustless.

[Jordy Vandeput]

Well said. Well, glad you're building what you're building.

[Patrick O'Shaughnessy]

Yeah. Well, thank you so much for coming on the show and congratulations on the massive fundraise. Very excited to continue following the story as you continue to build this company. But have a great rest of your day. Awesome. Hope you enjoy.

[Tyler]

Awesome.

[Patrick O'Shaughnessy]

Thanks for having me, guys. Cheers.

[Jordy Vandeput]

Come back soon.

[Patrick O'Shaughnessy]

Have a great rest of your day.

[Vlad]

Thank you.

[Tyler]

See ya.

[Patrick O'Shaughnessy]

Let me tell you about Adeo Customer relationship magic. Adeo is the AI native CRM that builds scales and grows your company to the next level. You can get started for free. Also I'm going to tell you about eightsleep.com Jordy's traveling but I got a 917 hours 55 minutes.

[Jordy Vandeput]

I'll give it to you.

[Patrick O'Shaughnessy]

Let's go. And our next next guest is Andrew d' Souuda from d' Souza from Borde. He's in the Restream waiting room now at TVP and Ultraviolet.

[Jordy Vandeput]

What's happening?

[Andrew d'Souza]

How are you?

[Jordy Vandeput]

Great. Great to meet and welcome to the show. Kick it off maybe with a quick intro on yourself background and then let's talk about Boardy.

[Patrick O'Shaughnessy]

Yeah, yeah.

[Andrew d'Souza]

So I'm the founder, founder, CEO creator of Boardy, the AI Super Connector. BOR is helping, helping founders meet investors primarily, but connecting people for business and economic reasons. We launched a program about two weeks ago to try and get 100 founders to help close the round. We have 5,000 founders raising $16 billion sign up and 600 investors spending about a trillion dollars of capital some size. So yeah, we've got, I think we've probably got about 10% of the active fundraising happening right now among founders that are, that is working through Boardy, which is pretty exciting.

[Jordan]

Awesome.

[Jordy Vandeput]

So yeah, I guess, I guess, yeah, I guess immediate thought Is with products like this, one of the challenges is just like balancing the network basically. And within venture, it's oftentimes the companies that have the most demand for their equity or the companies that are maybe performing the best oftentimes don't need intros. They're in the position of saying no. How are you thinking about maintaining quality on the platform? When you're a business and you want to be as big as you can possibly be and I imagine you have a strategy there.

[Andrew d'Souza]

Yeah, I think that was something that I was worried about. This is the reason why we didn't start with the idea of connecting founders and investors. It just happened. Organization organically, that this was, this was the activity that was taking place. I've been shocked at the caliber of founders that have come in looking for help. And I think as a CEO, as a founder, like your job is to create demand for your shares. Doesn't matter whether you're Elon or, you know, Roy Lee or you know, a YC founder, like, yeah, that's your job and you'll take all the help you can get. Most founders only raise capital, you know, two or three times in their life. And, and having someone that can help you navigate that, get the right introductions. I think there are probably 50 or 100 founders in the world. I think this is the reason why we talk about this sort of AI bubble right now. Maybe 50 or 100 founders in the world that every investor is chasing. Right. Because that's the hype cycle. There's probably thousands of founders who have incredible businesses. We're talking to them that have incredible businesses, incredible metrics. Metrics. And they're just, you know, they just haven't. They're not based in Silicon Valley or they're not, you know, straight down the middle. Pattern recognition.

[Patrick O'Shaughnessy]

They're not based at all. I'm back.

[Scott Sanders]

They may not be based at all.

[Patrick O'Shaughnessy]

Stupid job.

[Jordy Vandeput]

Good luck raising if you're not based these days. Yeah, that makes total sense. What, like where, where does this go from here? This feels like a good early wedge, but hard to build a billion dollar business yourself just within venture. So I imagine you have a number of other kind of pathways or use cases for the kind of introduction engine or. I don't know how you.

[Andrew d'Souza]

Yeah, we've built Bordy as like an AI board member. So what is the most important meeting for the CEO to take it anytime, right? Is it a customer meeting? Are they hiring an executive? Are they trying to get on, you know, a podcast? Are they, you know, like, is it, is it A big partnership. Is it corp Dev? It happens to be that fundraising ends up being a high urgency place where you can build a great relationship. But I think abort as an economy, you know, boarding. Every time you connect two people, there's some economic opportunity that is unlocked, there's some latent economic potential, and we can financialize it.

[Patrick O'Shaughnessy]

Yeah, I love it. It's actually what you're doing. It's true. It's actually good.

[Jordy Vandeput]

Okay, can I give. Can I give feedback to Bor? If I get an intro and I. And I. And I take the call and I'm like, can I be like, yo, Bordy, never again. Never again. Because we. I mean, everyone's gotten an intro from somebody and. And you're like, wait, why'd you make that intro? Like, I jumped on, they didn't know who I was.

[Patrick O'Shaughnessy]

Am I on with the venture fund that loves firing CEOs? Don't introduce me to them. Introduce me to the friendly ones.

[Jordy Vandeput]

Yeah. So how do you. How do you.

[Brian Halligan]

Because.

[Jordy Vandeput]

Because I can imagine that's like one way that you. You want to make sure. You want to get to the point where the entire industry is. Is on boarding, like, every single founder, every single investor. But as an investor, for an investor to, like, not churn, they need to be able to, like, give feedback and say, like, hey, like, this didn't meet. This didn't meet my bar for a meeting. I don't, you know, if you, you know, and if you keep sending people meetings or intros that don't meet their bar, eventually they'll just say, like, I'm going to, you know, log off.

[Andrew d'Souza]

Yeah. Yeah, absolutely. So this is one of the things we take a lot of. We take feedback. Bordy has goodwill with people, right? So his idea, the same way that if anytime I make an introduction, I'm gambling goodwill. I mean, if I make a bad introduction, I burn some goodwill. If I make a great introduction, maybe I gained some goodwill. And you're sort of doing that calculation at any given time. The version of Borde. If you just sign up, you're talking to a low latency, relatively low cost. On the phone, on WhatsApp, you're just talking to the standard version of Bord. What we tried to do, we had this experiment. We were running this fundraising thing. We said, what if you could remove the constraints of latency and cost? What if I could spend 100 times the tokens? What if I could let Bordy run for 30 minutes trying to find the perfect introduction and position you in the perfect way? Could I get better results? And that's kind of what we're seeing. So now we've had 5,000 founders that are raising in 600 investors in the last two weeks. He has now picked the top 100 that he knows he can help that are going to be in demand from the investors in his network. And we put them into a shared slack channel with us and Bordy and the founder. And we've now got those shared slack channels with people. Hey, here's some investors. What do you, you think get feedback from the founders? We're doing the same thing with investors. So the investors are sort of signing up and saying, here's a few founders that are raising. We think they'd fit your thesis. And board is just learning. So you're like, actually that's not a good fit. Or I've talked to this founder, more like this, less like this. And over the course of a couple of weeks, we really dial it in on both sides and we just make sure that you're spending time. It's less about capital allocations, more about like, how are you allocating your time and attention onto the deals that are actually likely to materialize. As an investor, the deals are going to win. As a founder, the investors that are actually going to give you a term sheet and fund.

[Jordy Vandeput]

That makes sense. What are some other kind of types of work that you expect boardy to do in the future?

[Andrew d'Souza]

Yeah, we're already starting to see a lot in sort of corporate enterprise sales and biz dev and partnerships. It starts with the corporate venture capital arms. So we're getting a ton of corporate venture capital funds coming in and now we're talking to their innovation teams and it's the same thing. It's like, hey, look, I gotta, I gotta stay abreast of what's happening in my industry and it's almost impossible.

[Vlad]

Right.

[Andrew d'Souza]

Maybe I'll watch TVPN and see who comes on there. But like that's almost too late.

[Vlad]

Right.

[Andrew d'Souza]

It's actually like I've gotta, I've gotta see who's starting a company, you know, who's just being funded, who, who is going, who do I want to be? Who do I want to be tracking? And so board is starting to help with that and making those introductions. Hiring is another one that I think is interesting. You know, especially when people, people are passive. They're not actively looking. They don't want to take a bunch of recruiter calls. But they'll talk to boarding. Like, I might start a company, but if there's a really Great startup out there. I might join the team and so those kind of conversations are quite interesting as well. But it's like whatever you would call your board member, whatever, whatever introduction is going to move the needle for you that is worth the time of the CEO. That's what we want to work on.

[Jordy Vandeput]

That makes a lot of sense.

[Patrick O'Shaughnessy]

I'm looking for a board member who can take me on a track day. That's my only thing I want to get out the of them. Take me to the track, put me in a race car. It better not have a passenger seat and then get out of the way because I'm building on my own. Thank you so much. Yeah, yeah. I mean that's customer development. Maybe once you get into the really high tier boardy spend you do attractive well, you know.

[Andrew d'Souza]

So Nico Rosberg is a big boardy user.

[Patrick O'Shaughnessy]

No way.

[Jordy Vandeput]

There we go.

[Patrick O'Shaughnessy]

Oh, he's been on the show big.

[Andrew d'Souza]

Time bor user and so. So he could probably make it happen for you.

[Patrick O'Shaughnessy]

Very cool.

[Andrew d'Souza]

I love it.

[Jordy Vandeput]

I like it. I like it. It's one of those things that in kind of working on when you describe it of just like a place that a founder can go to just get help with their business. It's surprisingly not something that nobody's made that pitch on the show to date which is surprising because that's pretty much, you know, feels like very valuable to a lot of the companies that are coming on.

[Andrew d'Souza]

Yeah.

[Patrick O'Shaughnessy]

Fantastic. Well thank you so much for taking the time to come talk to us. Congratulations on all the progress.

[Jordy Vandeput]

Yeah, great. We'll try out the product and need to find like a guess who we're raising.

[Patrick O'Shaughnessy]

Yeah, that'd be great.

[Jordy Vandeput]

There you go.

[Andrew d'Souza]

Love to give it a shot.

[Jordy Vandeput]

Awesome.

[Patrick O'Shaughnessy]

Have a good one. We'll talk to you soon.

[Jordy Vandeput]

Cheers Andrew.

[Patrick O'Shaughnessy]

Goodbye. Let me tell you about public.com investing for those who take it seriously. Seriously. They got multi ass investing, industry leading yields. They're trusted by millions. I'm also going to tell you about Ad Quick 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. Our next guest is Parag Agarwal from Parallel AI. Welcome to the show. Parag. How you doing?

[Brian Halligan]

Hey, hey, hey, hey.

[Scott Sanders]

Good to see you man.

[Jordy Vandeput]

What's happening? Are you at new newcomer event right now? I am. Oh yeah.

[Patrick O'Shaughnessy]

You get the stab. Repeat behind you. Cerebral AI summit. Congratulations. What you announce on stage. What are you announcing here on tvpn?

[Scott Sanders]

I announced on stage that we just raised Series a. We raised $100 million from some of the best investors.

[Jordy Vandeput]

Yeah, let's give it up for the best. 700, 140.

[Patrick O'Shaughnessy]

Perkins Index Ventures.

[Jordy Vandeput]

There we go.

[Patrick O'Shaughnessy]

Got some spark capital participation. We love to see it. Khos in there. First round terrain. Wow. Really, really Murders row Mamoon A. Kleiner is joining the board. That's exciting. That's exciting.

[Jordy Vandeput]

Kind of looking like the Figma Figma board.

[Patrick O'Shaughnessy]

We got a. We got a good crew here. I like this. So take me through the actual company progress, the progress that unlocked this $100 million Series A. Obviously there was some demand, there was some research progress. What was the shape of the data points that went into the ultimate deck that got this across the finish line?

[Scott Sanders]

So we did it first time two years ago. We started with this sort of pie in the sky idea that agents are going to use the web and they're going to use them a lot and we need to build new infrastructure for, for them. Yeah, there weren't any agents around in that moment.

[Jordy Vandeput]

Right.

[Scott Sanders]

None of them were using the web when we started.

[Jordy Vandeput]

They were trying. Some of them were trying, yes.

[Scott Sanders]

And this year like everything changed. Everyone's now building an agent and every agent wants to connect to those. So the market just came alive. I want to say six, nine months ago, the most like Frontier customers started doing its last years and became our design partners this year. The number of customers, the number of queries, the diversity of work. Like there's coding agents using us, there's people in sales building agents using us, finance, risk compliance, insurance, healthcare, people doing scientific research agents, people in pharma and bio figuring out how to use web search APIs to build agents. So like it's completely different world this year as it relates to agents, agents using the web.

[Jordy Vandeput]

So yeah, to make it super simple, people are using parallel web systems within, you know, maybe a SaaS provider is integrating parallel into their products so that if somebody's doing research, let's say in a CRM on a customer, you guys can help them use agents to do a web search and fill in that CRM with data. That would be one example.

[Scott Sanders]

That is a perfect example. You see this quite often. Our products are APIs, our users are agents, our customers are people building agents. Right. So if someone builds an agent to say, okay, I'm going to take your CRM and add very interesting data to it so that you can take better actions, that agent that they build will call our APIs in order to Search the web in order to pull content from the web in order to get the highest quality information to be able to fill up that database.

[Patrick O'Shaughnessy]

React to this post from Jim Cramer. He says when I use ChatGPT or the others, I can tell quickly that they won't pay up for good sources. We all know that. So what's the point? They need to start paying newspapers and stop using bogus sources. We would never use ourselves. We need integrity, not volume. There's a bunch of ways you could read that, but my take was there is a data quality opportunity, especially in the enterprise, especially where willingness to pay is maybe really high. And so how are you thinking about making sure that parallel and the Deep Research API has the highest quality data forever?

[Scott Sanders]

Perhaps agreeing partly with gym trainer. I don't always Two things there. How do you get the highest quality Deep Research? That is a lot of things. High quality data, authoritative data is a part of it. And then there's a lot of other technology we're building on top, whether it be at the ranking layer, the retrieval layer, the crawling layer, the reason reasoning layer to get you higher quality research. I ask you to try our Deep Research product and compare it to OpenAI's and we win nine times out of 10. So I want everyone to try that and tell us if I'm wrong. Go to the data question. I think there are deals being done by people. The world I don't want to live in is only Google and OpenAI's agents have access to, to some data and most publishers don't get to make those deals and most other agents don't get to have that access. That is the core mission of our business. We started with building products for AI customers. We've recently started figuring out what the incentives are for publishers to allow AI agents to use them, which will include payments, which will include other forms of value, which is transactions and which include distribution, which are the things that people care about on the web. Having run Twitter before, I understand the concerns of someone publishing on the web. And business models around ads are likely to evolve. And that's part of the reason we end up doing this company, because we think we have an opinion or two to bring to life here.

[Jordy Vandeput]

Do large revenue multiples scare you?

[Scott Sanders]

No.

[Jordy Vandeput]

Good.

[Tyler]

No.

[Scott Sanders]

As long as you know what you're doing.

[Jordy Vandeput]

There we go.

[Patrick O'Shaughnessy]

Confidence. I love it.

[Jordy Vandeput]

Love the confidence. Got to be confident.

[Patrick O'Shaughnessy]

Congratulations.

[Jordy Vandeput]

But yeah, I, I love how the, the even, even since the last, your last appearance, you know, the vision and opportunity just seems bigger and bigger.

[Patrick O'Shaughnessy]

Totally. Yeah. Makes a ton of sense.

[Scott Sanders]

Thanks for having me.

[Jordy Vandeput]

Yeah, it's great to have you back at this rate. I'm sure come back on by the.

[Brian Halligan]

End of the year.

[Scott Sanders]

I'm going to ship a product in a couple of weeks and be right back.

[Patrick O'Shaughnessy]

Fantastic.

[Jordy Vandeput]

Hit us up then.

[Patrick O'Shaughnessy]

Congratulations. We'll talk to you soon. Prague. Have a great one.

[Scott Sanders]

Thanks for having me.

[Patrick O'Shaughnessy]

Let me tell you about bezel getbezel.com your bezel concierge is available now to source you any watch on the planet. Seriously, any watch. I want to do a lightning round. We got a bunch of posts. We're going to try and go through them as fast as possible. First, Brian Johnson does did confirm this is from Brian Gorell. Brian Johnson confirms he was not one shotted by a recent magic mushroom trip. You said if Brian Johnson comes out of this five gram trip he says yeah, we're going to conquer death. We're still on then. He's certainly a true believer. What do you say? He replied to TVPN's post. He said we're gonna conquer death. So Brian Johnson is feeling good, looking good. Back on the timeline. Not one shot.

[Jordy Vandeput]

I suppose one of the founders of Chad Ide says he quoted my post and said really great post. However, it doesn't apply to Chad Ide. We're five steps ahead, different plane of thinking. But really great posts are reposting for Buddy.

[Tyler]

Nice post lil bro.

[Patrick O'Shaughnessy]

Nice post little bro. I want to say I think that's a pretty hilarious I did sneak a peek at your post during the show and I don't think you got called Unk as bad as I expected. You made it sound like you were getting destroyed. You did very well. You got over a thousand likes and people are like, oh, you're taking shots at Gary Tan. No, Gary Tan chimed in. He said good points, big thanks. A lot of people did identify that you were rage baiting the rage baiters, which is funny.

[Jordy Vandeput]

I had to use their own tricks.

[Patrick O'Shaughnessy]

Against them, but yeah, you did. I think in this case you used the tricks for good and I think it's a great post and I enjoy. But maybe we have to have the there's always room for follow up. Maybe we'll talk to Gary Tan later this week. We'll get him on the show. Think about how he's thinking about the future of maybe we'll have the founder of Chad Labs Chad idea. We will also be demoing the product at some point. I believe we'll be getting a preview of what the actual product is. If there's something awesome. Behind the scenes we're going to tell you what that is.

[Jordy Vandeput]

Let's also just love responding and being like, yep. Actually it doesn't apply to us. We're five steps ahead or five steps ahead.

[Patrick O'Shaughnessy]

I mean that is just a complete trust trump card. How do you respond to that? Levels, Levels. I think he wins. Much like wander. Find your happy place. Book a wander with inspiring views. Hotel grade amaze dreamy beds, top tier cleaning and 247 concierge service. It's a vacation home, but better. What is this lamp? Introducing a lamp says Shavir Sharke Sharkery. An emotional and expressive robot to reshape our attachment to set to technology. Is this a CG CGI vibe reel or is this a real product? Can we put. Do you have any idea who put this in the show notes?

[Tyler]

I put it in the show.

[Patrick O'Shaughnessy]

Okay. Do you think this is real?

[Jordy Vandeput]

Trying to find where you are.

[Tyler]

Yeah, it looks real.

[Patrick O'Shaughnessy]

Looks real. Okay. It looks pretty cool. I wonder. Wait, wait. So would you buy this? What is the value of this? It's obviously very cute. Very cool. It's the Pixar lamp. But it should exist. But why? What does it do?

[Tyler]

It's pretty cool. I don't know.

[Patrick O'Shaughnessy]

It's weird.

[Tyler]

It just feels cool to have. There was put a speaker on it. I'm like 90% sure it's real. There was a Apple research paper that came out like I don't know, six months ago. It was all about like expressive robots.

[Patrick O'Shaughnessy]

Sure.

[Tyler]

And they had a bunch of like demos and stuff on how they could build this stuff.

[Patrick O'Shaughnessy]

Yeah.

[Tyler]

It looks very exciting.

[Patrick O'Shaughnessy]

Yeah. Well, the website is lelamp.com. that's a good one. L E L A M P dot com. You can pre order it. The lamp like follows around your cursor. Pretty cool website. Let's see what the channel. It's only 50 bucks. Wow. Okay. This is very cool. I have been delight baited. I have not been rage baited by this. I think this is a great launch. And in other news, Jim Cramer is posting about quantum computing. He says rigetti, what an opportunity. Ka Ching. Buy IBM. What?

[Jordy Vandeput]

What does that even mean?

[Patrick O'Shaughnessy]

Kramer posts like a crazy. I mean he's got 2.3 million followers. He's posting like every half hour. The guy's a machine. He's going to be on the show in a couple weeks. We're very excited.

[Jordy Vandeput]

I cannot wait.

[Patrick O'Shaughnessy]

It's going to be a lot of fun. Anyway, that's our show for today.

[Jordy Vandeput]

I do not tolerate Kramer slander.

[Patrick O'Shaughnessy]

Yeah, no, no. I think he's entertaining, he's insightful, he's controversial, He's a total package. We love Kramer here. He's great. Oh, there is a review from Andre Carpathia. Missed this one. Oh, there's a couple posts that I missed actually. Andre Karpathy says I took delivery of a Beautiful shiny new HW4 Tesla Model X today. I like this hardware 4. He cares about the chip inside that thing. He doesn't care about what the light bar on the front is or the door handles or whether the doors go up. Andrej Karpathy cares about the GPU inside, so I immediately took it out for an FSD test drive, a bit like a YouTube used to do almost daily for five years. Basically I'm amazed. It drives really really well, really smooth, confident. Noticeably better than what I'm used to on HW3, my previous car and Elon's AONS and and and eons ahead of the version. I remember driving up Highway 280 on my first day at Tesla nine years ago where I had to intervene every time the road mildly curved or sloped. Note this is V13. My car hasn't been offered the latest V14 yet. On the whole highway I felt like a passenger in some super high tech maglev train pod. The car is locked in the center of the lane while I'm looking out from the Model X's higher vantage point and its panoramic front window, listening to the incredible sound system or chatting with Grok on city streets. The car casually handled a number of tricky scenarios that I remember losing sleep over just a few years ago. It negotiated incoming cars and tight lanes. It gracefully went around construction and temporary in lane stationary cars. It correctly timed tricky left turns with incoming traffic from both sides. It's a glowing review. Glowing review of Tesla self driving from the man who basically invented it and started the whole started the whole process. I mean I don't know if he started it, but he was incremental. He was instrumental in the development of it.

[Jordy Vandeput]

So we also missed it. But OpenAI released GPT 5.1 rolling out to all users this week. Nir says near says ChatGPT is officially in its Fiji phase now. If you're wondering why the upgrade doesn't come with benchmarks, have fun.

[Tyler]

Yeah, no benchmarks. So yes there's two models, there's 5.1 thinking and instant. So if you go to like the actual like model router on like chatgpt.com or whatever the only like there's GPT5 which you can do pro, which is like the super long, almost like a deep, deep research product. And then the rest of them are just the 5.1 thinking. But yeah, no benchmarks or like any kind of really technical report. In the blog post, it was a lot about the like, personality of the model. She also released a separate blog post, like, on her substack and there was some mention of like, they're definitely, like, they tried to address kind of the 4, 0, like one shotting stuff. They're like, okay. We're definitely aware that there are some problems with like a very small amount of people becoming very addicted to the models. But yeah, nothing like very technical out of this.

[Jordy Vandeput]

Like, it was only 1% of our user base.

[Patrick O'Shaughnessy]

It wasn't 1%.

[Jordy Vandeput]

It was 10 million people that want to kill Rune. Rune, up your security.

[Patrick O'Shaughnessy]

Please do.

[Jordy Vandeput]

Anyways, we actually have to go over to Base, which is a conference hosted by my dear friend Will Cofield. So we gotta head over there. We're gonna have a little chance chat.

[Patrick O'Shaughnessy]

That'll be fun. More podcasting.

[Jordy Vandeput]

Another two hours of offline podcasting.

[Patrick O'Shaughnessy]

We love it.

[Jordy Vandeput]

Cannot wait. Cannot wait to be back tomorrow. Have a great day for hanging out with us.

[Patrick O'Shaughnessy]

Leave us 5 stars on Apple Podcasts and Spotify. Subscribe to [e-mail] and we'll see you tomorrow. Goodbye.

[Jordy Vandeput]

Cheers.