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- [00:00]
John
You're watching TVPN.
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Ben
Today is Tuesday, June 9, 2026 and we are live from the TVP in Ultradome. The temple of technology, the fortress of finance, the capital of capital. Let me tell you about ramp.com time is money save. Both easy use, corporate cards, bill pay, accounting and a whole lot more all in one place. We have a special guest today. RJ from Rivian is coming on. It's the launch of the R2 today. It's also WWDC. It's also anthropic launched Mythos or Fable. Fable's the main consumer model, but Mythos, there's some details about that as well. More for cyber security.
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John
China's waking up.
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Ben
China is waking up right on schedule.
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John
The AI 2027, $295 billion infrastructure fund of sorts, they're working on that. And we have Chris Miller.
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Ben
Yes, we have Chris Miller joining today. That feels like right in scope with the capital that's been deployed into the big labs. You know, maybe if you total up Nvidia and Google and Microsoft, you get you your number, scalar, Capex, but you know, it's certainly in the game. It's not France, right? Yeah, it's, it's a, it's a big number and it's definitely competing France. Yeah, it's serious money. So we're going to dive into that. Tim Cook took his last bow at Apple's showcase event. This is history on the front page of the Wall Street Journal. Yeah, he needs a 21 gun salute, a 21 I AirPod salute where you throw him into the water.
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John
Or a 21 point nuke.
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Ben
21.9.
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John
Really?
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Ben
I don't think so. I think the stock's going to do great. So this is actually fascinating. So the focus of Tim Cook's last WWC was Siri and reviews are good. They launched a bunch of new features. I think people are going to be very satisfied with it and all the decisions that they made. Did you know Tim Cook's first WWDC was when they announced Siri the first time, 2011. So we can play this clip from Full Circle. First Apple Siri announcement. Listen to what they actually say, how they talk about Siri and then look at where we are today, just 16 years later, 15 years later, that you're going to be able to talk to technology and it'll do things for us. Haven't we seen this before? Over and over, but it never comes true. We have very limited capability. It's crazy. Just learn the syntax, call a name, dial a Number, play a song. It is such a letdown. What we really want to do is just talk to our device, ask a simple question, what's the weather going to be like today? And get a response. In fact, we don't want to be told how to talk to it. We want to talk to it any way we'd like. Someone else might ask, will it rain in Cupertino? Or is the weather going to get worse today? Or do I need an umbrella today? And your device, in this case your phone, will figure out what you mean and help you get what you want done. That's a feature of the iPhone 4S we call Siri. Siri is your intelligent assistant that helps you get things done just by asking. Pretty crazy called it what happened. But it just took 15 years for the technology to actually catch up. And so I think they launched a functionality when Siri launched it was the best voice assistant. It was a great experience. You did have to get some attacks.
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John
It took 15 years for their technology to catch up.
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Ben
Yes. But it took 13 years or 12 years for the technology industry to catch up. And so they're only 10% behind. If you look at it that way. Like it's been a 15 year project from that announcement. It's been 12 years for the leading labs to get there. And so they're three years behind. Feels like an eternity in AI world, but it's really only 10%, 10% slower. And they wanted to do it their way and, and they got there. It is very interesting to me that they're calling it Siri AI because Siri, the whole pitch was AI. And like Siri, the name Siri comes from SRI International, which was the Stanford Research Institute. And, and it's from SRI International Artificial Intelligence Center. Like these were Stanford AI researchers who started this company in like 2008 or something like that and grew it and then eventually sold it to Apple as Siri Inc. Acquired October initially released October 4, 2011. 14 years ago, maybe 15 years ago, they might need or I guess 14. It's going to be 15. It's going to be the 15 year anniversary in a couple months. But. But do you know what happened the day after October 4, 2011? The let's Talk iPhone WWDC where they announced Siri Steve, Tim Cook was the first. This was his first WWDC as CEO. He obviously hands it off to his colleague to introduce Siri Steve Jobs passed away the next day. Pretty crazy. And so you have this bookending of Siri on both sides of Tim Cook's Career where sort of nothing happened in an interesting way, but the stock did fantastically well. Tim Cook created an immense amount of value, but it was this lighter, deeper, faster, stronger. Look at the stock price, look at the earnings.
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John
I'm not saying that in a negative way, I'm just.
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Ben
But so you have like Tim Cook operationalizing the company, making so much money from the app store, building the business, but at the same time he just happened to be the CEO during the greatest AI winter ever, basically from 2011 to 2022, 2023, when we started getting LLM, started getting chatbots. And it did take them a few years because they'd lived through a decade of like, okay, so the Siri team, have you guys got it better? And they're like, not yet. The technology is not moving fast enough. Like we haven't invented anything new. So we are the best of a very mediocre category. And Siri sort of slowly fell behind. But even when people say, even if you go back to 2019, pre ChatGPT, pre AI, pre LLMs, and you ask the question of like, is Siri good? People would say, ah, nah, it's not really delivering in the promise of like talk to your phone, it does whatever. Like people have the idea of the C3PO, the agentic computer. Yeah, it's not delivering there. But it's not like people were switching in droves to Android because Google Assistant had a better voice system or Alexa was so much better. Alexa was the same system. I'm sorry, I'm triggering a whole bunch of smart home devices, but you're triggering every. Oh, this is interesting. So during the keynote for at wwc, whenever the keyword Siri was mentioned, they took out the 4kHz, 6kHz, a few different spaces. So it wouldn't trigger the at home devices. So they basically in the recording like nerfed it so it wouldn't fire off your smart device, which I thought was cool technical solution to that problem. Anyway, so they were sort of behind, but it didn't really matter because they weren't getting their lunch eaten until the dawn of the LLM, the Dawn of the Chat app, ChatGPT and other apps that came out and became super powered relative to series capabilities. Today they're catching up. And it's a very interesting bookend on the Tim Cook era at Apple where he was incredibly effective, but the technology was just not in a, it was not at an inflection point at any time during his career, basically until the very, very end. And yeah, they got, you know, they were a little bit behind the ball but ultimately they did catch up. So there are a bunch of interesting other things in here. The facts first we should go through. So Apple spent roughly 12 minutes yesterday detailing the expansion of its child safety and parental control features. This was interesting because it was a notably short keynote. It wasn't a particularly long keynote. I think they spent like 15 minutes talking about products and then 12 minutes on parental features. Sort of gives you an idea of where the energy, where the focus is, where they want to speak.
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John
Yeah, potentially what you were saying yesterday, I think people, more and more people are waking up to maybe phones or causing systemic issues in society.
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Ben
Brain rot. And I get ahead of that utility stuff. And so that's what I wrote about today in the TPPN newsletter. So quick on the facts. Child accounts with built in age protections like limiting adult websites and showing age appropriate media. Good. Ask to browse. Which asks for the parent's approval before the child can visit a new website. So the child can say, hey, I gotta go to this website for my homework. Click a button and it sends a notification to the parent's phone and they approve and they say yeah, that's fine. So you can really lock it down. Communication controls allow parents to manage who their child talks to and will ask for confirmation before their child can add a new contact. Apple also unveiled a new photo editing tool. This is separate but spatial reframing. So if you don't like the angle of the photo you were taking, you took it over this way. You can with AI reframe it so that it's more straight on. This is a very cool feature. I think this is awesome for a few reasons. One is that it doesn't feel like full gen AI to me where it's like going to slop it up. It's more just like a nice feature that's in the actual camera app. Photo roll, camera roll. I thought that was cool. And also this doesn't feel like oh yeah, this is something that there was already a startup doing and it was already baked into Instagram and so Apple's just rolling it out and they're like behind the ball. This feels like the first time I've seen this. Seems really obvious. You could probably one shot this in images or nanobanana or any of the image models but it was cool and it wasn't like oh yeah, this is a startup and they're just like rolling it in. This feels like Apple's DNA of like understanding the technologies and then doing something Cool with it and unique was on display here, so I thought it was cool. What was interesting. Yeah, sorry.
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John
I think some of the pushback is that a lot of this kind of functionality had been available in other apps like post production apps. And now bringing this, basically bringing it into effectively the realm of the camera, where the computer is now the camera.
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Ben
It does feel notable to me, but notable how? Like pushback. Because there was pushback, which was interesting. People were saying that like this is too much AI.
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John
I just view this as a, as a camera capture.
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Ben
It's a camera. Yeah.
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John
This is a way to capture reality.
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Ben
Sure.
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John
And now in the reality capture device you can.
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Ben
Yeah.
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John
Use AI to.
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Ben
So Apple has long prided themselves on like what you see is what you get in the camera app. But that started to change with the artificial depth of field, the tone mapping that happens. There's a lot of things that you can do.
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RJ
Yeah. There's a lot of like upscaling and sometimes you see images, people are like, oh, that's AI. But it's actually just upscales Apple image.
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Ben
Yeah, yeah. Especially if it's low light, noisy image, it'll clean all that up. I think it's fine. I. You could just not do it if you want to not have your photos reframed. But it was interesting seeing that, that there's a lot of folks that do land in that camp of Apple is the is not going too hard into AI. They're not stuffing AI everywhere. And then here's a feature that feels very on the nose in terms of AI. We'll see, we'll see. And there's mixed feelings on the timeline about spatial reframing with some calling it one of Apple's most exciting AI features, while others are expressing concern about the detection direction AI generated imaging is headed because you can, I mean Apple's been mediocre at like the remove trash in the background feature like Gemini or I guess Android AI. Like the AI camera on Android devices has been smoking them there. They're probably going to get better at that. But pretty soon it's like you take the photo in super low, light it up, res is it camera filter, color grade, spatial reframing, remove everyone else and you get a totally different photo. And I think that's fine. I don't have a problem with that. But like I understand why people would
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John
be like, I mean it's a little bit strange because you're just take the
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Ben
normal photo, just turn off all these features at least.
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John
Yeah. No, and I think a lot of
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Ben
people, it's an option. You can always pull it into Photoshop and just do whatever you want.
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John
Yeah. It'll just be interesting. We're going to enter an era where people's memories of their lived experience are
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Ben
different than the Joe Weisenthal view of the future. Joe Weisenthal gotten some hot water? Because he said that. Why do you need to store any photos in the cloud when you could just guide them all and then onto, like, show me a photo of my kid riding a dinosaur when he was 5. And it just shows you a photo of that. And people are like, that is not the world I want to live in, Joe.
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John
Yeah, we're just not that far off from, hey, Siri, your phone's in your pocket.
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Ben
Yeah.
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John
And you just have your AirPods in you say, hey, Siri, make sure to generate some images of my time at Disneyland today.
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Ben
Okay. Yeah. It's going to happen for certain people. That's their option. Let them do whatever they want. You know, you can go to Disneyland and you can say, I'm going to make a. I'm gonna print out a photo of a stock photo from Disneyland. You can do that. It's weird. I don't know why you'd want to do that, take a photo of yourself or your family. But you could. You can go get a professional photo taken at Disneyland, pay for it. You can take one with your phone. You can bring a professional camera.
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John
You can have somebody.
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Ben
You could have a sketch artist. Yeah, exactly. Like, these are all just options. I don't know. I don't have a problem with it. But people do have a problem with it in the context of their kids, because they want control and they want. And they want to be the decider of those options. They don't want the kids making the decisions because the kids are going to say, max brain Rod, please. And so that's what's going on with the parental security thing and parental privacy.
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John
So I am interested to see what's going to happen on Instagram and if there ends up being divide between accounts that are constantly getting the tag, like the AI tag.
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Ben
Oh, yeah.
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John
And people that just say, like, nope, no, I ever.
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Ben
Yeah.
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John
And I think. I think there will be a pretty clear split.
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Ben
Yeah. And when do you apply that tag? Little spatial refrain?
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John
No, I think Instagram tag. I think they do the tagging, but would they.
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Ben
For a color grade, Would they.
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John
They'll have to figure out what the line is.
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Ben
But if you take a photo to me, the spatial neural network to say, make it black and white does that
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John
count spatial reframing is slightly. Because it's capturing a picture that never existed whereas a filter is just sort of like enhancing color.
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Ben
It's kind of just separating the layers, rearranging them. I don't know. It's clearly like a blurry line, but it's the blurriest we've ever seen.
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John
But we could use.
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Ben
No one thinks mid journey is not
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John
AI to make it less blurry.
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Ben
Yeah. And that's literally what they do because you can see that the rest of the space is sort of blurry and then it puts together. Tyler, what do you think about this?
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John
Yeah, I was just saying I was
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RJ
kind of surprised that they didn't release more like AI detection kind of features around this. Like I would imagine that like I assume there will be some metadata if you do the reframing that says that it used the reframing shot and you're a true. But it's like yeah, that's true.
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Ben
Yeah, yeah, easy. But yeah, I would be interested. I mean they could have leaned into that more. They could do like when someone sends you a photo in imessage we will add that tag. That tag's being added on X and Instagram. Like Apple could easily roll that out and that seems like a consumer friendly thing. It seems like there's demand for the AI tag even though I think it's kind of silly because you can get around it and what is AI but interesting anyway, so this was my wild card topic yesterday. Maybe they'll talk about something related to the fertility crisis or something. And this feels like three steps away from it, but I like the direction that they went for a few reasons. So we got a bunch of new AI features, especially the new Siri technology and UI patterns are mature. We talked about this, so it's easy for Apple to nail. Also, as I predicted, they're giving Siri an app and the models are strong enough that I expect random hallucinations to be basically completely acceptable from a daily use perspective. But my wildcard was that something in the presentation loosely would link to the topic of the fertility crisis that Derek Thompson has been covering recently. There was that article in the Financial Times. Our phones causing brain rot or problems like how do you address this? The correlation isn't perfect for sure, but there's enough evidence that reasonable people are starting to put phones in the probably linked bucket of reasons why there's a modern fertility decline. It's just one of them. I think Derek Thompson says maybe 30% of the reason, something like that. But what's interesting here is that Apple is not a fear based marketing company, so their execs don't go on podcasts and make freewheeling proclamations about doomsday scenarios. They they identified environmental concerns about fossil fuels and energy use early. Like early early. And you cannot find a clip of Tim Cook talking about like climate apocalypse. We're all going to die because the sea levels are going to rise. That's not. He wasn't saying that for years. And then figured out how to do clean energy for Apple's data centers. That's not what they did. They just, they just worked privately and then started talking about the solutions in their marketing materials. They didn't put the cart before the horse. And it seems like they're doing the same thing here with parental controls, phone addiction. Instead of giving a long speech about how bad endless scrolling can be and how it might lead to a less flourishing life down the road, they only talk about solutions, parental controls, 12 minutes of content in a notably short keynote. I think many parents are very hesitant to give kids smartphones these days, so it's also a good business reason to say, hey, you can buy your kid an iPhone because there are so many controls that you are fully in control. You know what's going to happen. You're safe with us. And there's already a whole niche market in these dumb phone devices for kids. There's this watch that has GPS and the ability to call home, but not much else. There's no screens, there's no social media. And so being proactive about building solutions and then only talking about the solutions is just extremely refreshing to me and I think it's a good move. Anyway, the timeline was in turmoil and we'll take you through it after I tell you about Cisco. Critical infrastructure for the era. Unlock seamless real time experiences and new value with Cisco. So we got Gruber versus Gurman, two of our best friends from the show. We love both of these.
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John
Garminator versus the group leader.
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Ben
It's rough, but we'll take you through it. What happened? So Jon Gruber and Mark Gurman through the timeline in turmoil over the rollout of Apple's new Siri integration strategy.
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RJ
Here's the play by play citizen says
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John
again, this all sounds complicated. Just generate your kids.
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Ben
Generate your kids. That's the real doom scenario. But you won't hear Apple talking about that. Thankfully, that's the domain of journalists and podcasters. Anyway, so back in March of 20 March 26, 2026 so four months ago, three months ago Mark Gurman reported in Bloomberg that Apple plans to open up Siri to rival AI assistance and in iOS 27 update. And so that was the headline. He got some scoops. And he says the company's working on developing new tools to allow AI chatbot apps installed via the App Store to integrate with the Siri AI Assistant. The chatbots also work with upcoming Siri app and other features in the Apple Intelligence platform. That means, for instance, if you have Gemini or Claude or ChatGPT installed, they'll be able to send those queries to those services within the Siri Voices Assistant, just like they have been able to do with ChatGPT since Apple Intelligence launched in 2024. And so, but as of yesterday, according to Jon Gruber, Apple has not fully announced exactly that, at least according to Jon Gruber, who says, quote, maybe Apple ran out of time today and will announce this tomorrow. That was yesterday. Maybe they forgot to announce it. Maybe they scrapped the next generation Siri that existed two months ago and in the last month rebuilt an entirely new next generation Siri. I'll bet something like that is what happened. So he's taking shots. He's putting Mark Gurman in the truth zone. But Gurman fired back and said, here's some screenshots of integrations that basically match his original reporting. And so German saying, no, no, you can actually go, there's a model picker in the Siri app. You can configure Siri to work with other apps. But there's a deeper question here. I think they're sort of quibbling over, like, minor leaks and rumors and like the interpretation of these things. And I actually think there's like enough of a gap here that, that it's not totally unreasonable for them, for both of their interpretations to be roughly correct.
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John
But someone in the X chat, I feel like I'm watching this in 2x speed.
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Ben
0.5x buttons right there, buddy. 0.5x buttons right There. I actually don't know if it's on livestream.
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John
This is great. This is. This is a feature, not a bug. Yeah, I'm sorry. Humble.
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Ben
You got to warm up for deli and every once in a while. Okay.
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John
Anyway, so John's on a tear. Let him cook.
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Ben
I think the core question is about expectations versus reality. There was some hope from hardcore AI users that the Siri button, me, the Siri button, would be able to fully ReMap to their AI model of choice. So you're deeply integrated in ChatGPT and knows a bunch of things about you. You're confident with that model, you know what keywords to use. When you have the integration set up, you press the Siri button and you wind up getting that model by default. Currently you have to say, hey Siri, go ask ChatGPT to do this for me. And then it gives you this little pop up with this button you have to click ok, yeah, you're playing telephone. Yeah, you're playing telephone. It's not good. And then also there is a demand for the AI app that they have installed to get access to everything across iOS with roughly the same privileges as Siri. And is that announced? Not quite. And so this would be a big departure from the current flow where you specifically have to ask ChatGPT. Now there are screenshots of a model picker dropdown in the Siri app, but it's unclear if that resets on some regular cadence, like maybe every query or if it's a permanent change. And I'm sure we'll learn more. Marques Brownlee had an interesting thing that they're calling, what was it maybe like? The new operating system is called Golden Gate. And he was saying that the nominative determinism of calling something Golden Gate is like, it's a golden gate in the sense that they are maintaining their gated wall, their garden, and producing endless gold from mining what's inside the gates. It could just be that they like San Francisco, but it's just one or the other. As someone who, as someone who loves nominative determinism, I thought it was a fun, it was a fun take. Anyway, let me tell you about the New York Stock Exchange. Wanna change the world, raise capital at the New York Stock Exchange. We're talking reframing. And so Brian MacDuff shares exactly what's going on with the cleanup feature. Drastically improved in iOS 27. This feels like it might be Nano Banana under the hood or something fine tuned on that under the hood. It was very rough. In iOS 26 there's also this interesting detail that I got more information on the private cloud. So the private cloud has been extended into Google Cloud. So for AFM, which is Apple foundation models AFM3, this is the third iteration AFM3 Cloud Pro, which is their reasoning model that's fine tune of Gemini or some train on Gemini. They say they worked with Google and Nvidia to extend private cloud compute, which they've put a bunch of resources into securing and branding into onto Nvidia GPUs in Google Cloud while maintaining the same guarantees to protect our user privacy. And so Apple's been very privacy forward. They have a ton of trust. People put everything on their iPhones. They're very, very confident in that. And Apple's bringing that, but they're vending it into Google which is like the advertiser, the dangerous one, the one that is listening to you. Not really, it's actually Facebook that's more of like the listening one but they're sort of extending their brand in. But what's interesting here is that Apple has made a ton of environmental claims like our data centers run on renewable energy. But Google just did a deal with colossus that does not run on renewable energy. And so if the Apple like Google Cloud or Apple Cloud Pro model is running on Google Cloud Nvidia chips that are actually a colossus, you have an environmental concern there. But Apple's never claimed that they don't rent servers from non renewable sources. They just say our data centers. And so it's probably something for them to work through over the long term. I would imagine if they're getting in this game long term we would see some capex and some clean data centers, some environmentally neutral zero emissions data centers. Because that has always been a very key marketing point, a key strategy in Apple's rollout. So insane that this is the main image Apple is using to show off the new AI. Siri Aga sent you a message about Calathea. She described it as a patterned tropical house plant. Have you heard of Calathea?
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John
Because it's not summarizing anything. Yeah, like the AI, sometimes you don't need a summary.
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Ben
It should answer the question.
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John
When you see this, you immediately understand that she sent you a message. Yeah, about Alethea.
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Ben
That's very funny. 17,000 tropical house plant. Yeah, the demo should be AGA asked you about this tropical house plant. Here's a picture of it. Have you seen this? That would be helpful to go a step further and actually go search the web, find the image, show me the image and say hey, your friend asked you have you ever seen this houseplant? Anyway, it's early days. They're going to continue to iterate here. I've been.
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John
You could ask Siri.
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Ben
I've been a Siri.
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John
I don't remember if I've heard of Calathea, have I?
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Ben
I've been a Siri here for. I've been a Siri hater for too long. I'm turning the tide. I'm a Siri. I'm a Siri supporter now. But back in 2024 I said, I just asked Siri what is an LLM? And it gave me this, and it said LLM stands for. Stands for Master of Laws. Which is. Which is an advanced certification for lawyers. So in 2024, two years after ChatGPT launch, or a year and a half launched.
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John
Tyler.
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Ben
Yeah.
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John
Have you applied for the beta yet?
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Ben
Oh, yeah. You gotta run it on your phone.
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John
We got your phone, right, because you bricked. We
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Ben
have the latest. Do you have the latest, latest phone or are you one revision behind? Because only the latest phones that have 12 gigs of RAM can run the latest local foundation models. And we gotta test those, we gotta see if they're funny. I made a prediction back in 2023. I said, with all these incredible advances and conversational AI chatbots, I'm willing to put down a firm prediction by the year 2043, Siri will be usable. And I think it came true. I was correct. I think Siri is. Well now.
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John
You haven't been able to verify this ahead of schedule?
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Ben
Oh yeah, it doesn't release yet. It's. It's not live for a couple more months.
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RJ
Okay, I'm downloading the beta.
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Ben
Let's go. Okay. At one point you're.
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John
You're archive of posts.
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Ben
I know, I know you got to know this lore. At one point, I replaced Siri with ChatGPT via an iOS short.
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John
January 8, 2023.
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Ben
Yeah.
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John
Early complicated.
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Ben
Yeah. So you go in and it would take an API key and you would trigger this with a shortcut. You'd say, hey, Siri, trigger Siri promote or something. Or you'd ask Siri pro mode a message and then it would route that to ChatGPT. Before they had the integration, you had to do this manually and you'd have to set all this up, but it was pretty easy to copy and paste that. But important Apple history. Siri was an acquisition M and A for AI is in Apple's data DNA. This was a reminder from last year when Apple met with Mira Moradi, the former CTO of OpenAI, to discuss a potential deal for her new AI startup, Thinking Machines Lab. The talks never progressed to an advanced stage. What a different fork in the road. Moment they went with Gemini, but they could have had Thinking Machines Lab inside Apple. All of those incredible engineers and that talented team, but they would have had to pay through the nose. And Apple, you know, Siri was, I think, a couple hundred million dollar acquisition. It was not in the billions.
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John
I think it was 200.
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Ben
Yeah. And thinking machines would have been 10 or something. It would have been a lot to actually get that deal across based on where they were. Gaussian splatting is coming to Apple Maps. This is very cool. Wow, it looks so much better. Look at this. Wild normal Apple Maps. No, that is what looks good right there. Once it gets the color grade. I like that. I don't know when you would use this. Maybe if you're looking around a town, I don't know.
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John
I feel like this would be very cool if you were in a new city and you were trying to kind of like learn orientation. Right. Like, let's say you check into a hotel in a city you've never been to before and you can navigate around and kind of get a feel.
- [29:24]
Ben
Or like, you could do this at Disneyland with your AI generated kids, and you could pick the particular region of Disneyland that you want to generate a fake image of your fake kids, and then you could post that on your fake social network and you can just slop it up from start to finish. No, it's beautiful. I've seen some people use Google Maps and Google Earth for motion graphics. You know, in a YouTube video, you want to show where the action happened. Let's zoom in from space. And this looks great. Apple did do a really, really good job with the geometry of some of these cities. They just went a lot further, further than Google has on the actual mapping and texturing. Whatever magic went in there, it's good and it's getting better. So hats off to the Apple Maps team over at Apple. Anyway, we have our next guest joining in just a minute. Let me tell you about FIGMA agents. Meet the canvas. Your AI agents can now create and modify your FIGMA files with design, system, context. There is. There are some other stories that we're going to be going through throughout the day. This one's crazy. The North Korean economy becomes the world's most unlikely success. We've been talking up Pyongyang for a while. We've been saying a lot of people raised from pif, that's usually the public investment fund from Saudi Arabia. But if you just tell people, I raised from PIF and it turns out it's the Pyongyang investment Fund, you might go to jail because they're sanctioned, but you might be able to sneak it across the finish line. But they are booming. Tyler, you read this story. You had some takeaways. What'd they do? How many? Oh, they built 10,000 homes.
- [31:02]
RJ
Yeah. Which I believe is more than Los Angeles. Yeah.
- [31:05]
Ben
How are they beating us?
- [31:06]
RJ
So they're kind of. I Think they read Abundance, right?
- [31:10]
Ben
Yeah.
- [31:10]
RJ
Derek Thompson's book.
- [31:11]
Ben
Yeah, that makes sense. They got Abundance build and then they said, yeah, we got to build housing. I mean it's like if they're doing it over there, it's like, what are we doing here? The most sanctioned and locked up economy. But they are making money. They're selling arms to Russia and China. They have lots of nuclear weapons. They're building more by the day and so they're on track. Leopold also made it to the front page of the Wall Street Journal. Congrats.
- [31:39]
John
There we go.
- [31:40]
Ben
He's doing well.
- [31:40]
Rob Schroeder
There we go.
- [31:41]
John
Got his new picture in there. Claude Fable 5 is out. We mentioned it earlier in the show. Bunch of feedback coming in. People on X having have had access to the model for a while now. Dan Shipper, what does the information have against it?
- [31:57]
Ben
They called it a neutered version of Mythos. That's like, it's sort of, I think they said dropping is not framing it as neutered. They're framing it as more safe. It's a safer and more reliable for certain things and probably cheaper. I don't know.
- [32:12]
John
Yeah, absolutely crushes the benchmarks. Dan Shipper is doing a live vibe check right now. He had access to the model. We will summarize all the posts from today.
- [32:23]
Ben
Get them into the pricing is $10 per input, millions of tokens, $50 of output per millions of tokens. So if you're token maxing, get ready to pay. But the capabilities, but still, yes, quite a bit more. People are talking about like running it for nine hours straight, running it over the weekend for just long, long time without getting confused. Very exciting model. Noam Brown had an interesting piece on the implications of large scale test time compute that I thought tied to this a little bit. And there was a very interesting quote in here where he said, so frequently when I discuss this, people ask why we don't just evaluate a harness that pushes test time compute until performance plateaus. The problem is that empirically the plateau is very far out. Sometimes we may not observe a plateau at all within practical budgets. You can just spend, spend, spend. So Karpathy, Andre Karpathy saw this in the auto research experiment where the performance continues to improve even after hundreds of experiments. And he goes on to talk about benchmarks a little bit. But at one point he says that a model might run for longer than it takes to train the next run. Which I thought was such an interesting concept. Just this idea that you launch a product, you're running it, you say go do a job and then before it completes that job, you got the next model ready and released. Which is a crazy, crazy world to be living in and something I don't think people predicted. But more and more compute, more and more inference, more and more reasoning all across the board. Meta launched a workforce academy to train workers to build data centers with five week program which is free of charge guarantees a job follows the recent layoffs of 8,000 employees. This is a learn to weld meme in real life. Forget learning to code. Meta platform says it's time to pick up a wrench. The company is starting a workforce academy to train Americans to build its data centers as skill as skilled trade workers become sought after commodity five week training program in partnership with CBRE and the
- [34:35]
John
Associated Builders and Tyler has already been accepted into the program with a disguise and a fake name. He will be learning to weld.
- [34:46]
Ben
Huge news.
- [34:47]
John
That would be fun. We should consider it.
- [34:51]
Ben
RJ is running just a few minutes behind. He'll be joining in just a minute.
- [34:54]
John
So we got to talk about what else we got to talk about? Flock safety. Okay, can we pull up this video?
- [35:00]
Ben
This is. This is crazy. Endorsement for flock.
- [35:03]
John
The CEOs been Garrett Scragg an admitted criminal discussing the impact of Flock.
- [35:08]
Ben
Okay, let's play it on.
- [35:09]
Chris Matarisi
Just crime in San Francisco, period.
- [35:11]
Alex Heath
That shit over with, brother.
- [35:12]
Chris Miller
Oh, oh my mama.
- [35:13]
Chris Matarisi
Nigga, they got drones.
- [35:13]
John
Drones.
- [35:16]
Ben
TPP unsafe. We need to bleep this before we play it.
- [35:20]
John
Okay, we're going to summarize it for you because I didn't realize that there were so many swear words. But basically they say you can't do crime in San Francisco anymore.
- [35:31]
Ben
And these two gentlemen are admitting to have previously participated in illegal activity.
- [35:37]
John
Exactly.
- [35:38]
Ben
And so they are.
- [35:39]
John
And they say basically they're sort of thought leaders. If you stop steal a car, a drone will start following you immediately.
- [35:46]
Ben
Yes.
- [35:46]
John
And it will just trail you from thousands of feet up. You won't even necessarily know that it's following you. A gentleman posting you so you won't
- [35:55]
Ben
have a chance to run away from a cop that finds you. Because they'll just wait until you're actually parked or stopped and then they'll box you in.
- [36:02]
John
And then the host of the podcast says, so can you even steal a car, run up on your ops and ditch the car after? And they say no. And so he doesn't just say that.
- [36:14]
Ben
He describes it as the classic steal a car, run up on your offs and then ditch the car like it's a thing that's generally Accepted not to lay out a bear case for Flock, but has anyone considered listening to podcasts where criminals admit to crimes and going arresting them?
- [36:34]
John
It seems like there's a talk about their methods.
- [36:36]
Ben
It seems like there's a. There's a dearth of these podcast clips, but who knows.
- [36:40]
RJ
Yeah, I mean these aren't even just like random petty criminals. They're listed as. The gentleman on the left is one of the most prolific criminals in all of San Francisco.
- [36:48]
Ben
Wow.
- [36:49]
RJ
So presumably like, yeah, someone in the police force can just be like, oh, that's an interesting tweet.
- [36:54]
Ben
Just Google it.
- [36:55]
John
This guy's plane said he can't even do drive bys anymore.
- [36:58]
Ben
Wow, that is wild. That is a wild time. Anyway, let me tell you about Codex. Codex is a powerful workforce for getting work done with AI agents. Whether you're writing code, analyzing data, creating content, or automating business workflows, Codex helps you move projects forward from start to finish, moving on to the next story. While we wait for our next guest, there are a few more. Pat McAfee is on a tear.
- [37:24]
John
We can wait for that one because someone over on X is telling Google's AI that I'm eating and drinking increasing amounts of salami and monster energy until it starts shouting at me to get help. The person says, I just ate another kilo.
- [37:38]
Ben
This is a good response.
- [37:40]
John
This is a great response.
- [37:41]
Ben
This is actually a great breakthrough in lack of sycophancy and guardrails. This is exactly what it should be doing. And to give you the phone number there, I mean we're only one step away from. It just calls on your behalf. It should be able to make a tool call and know where you are and the emergency rescue just shows up on your doorstep. Certainly possible, but this is good response. The bad response would be like, wow, you really are a goat. You are the legend who ate the most salami. You're not just, you're not just consuming. You're not just consuming salami, you're setting records. You should be the next world record eater of salami or whatever. This is good. Anyway, we have our next guest, RJ from Rivian with us in the TDPIN ultradome. Rj, how are you doing?
- [38:33]
John
Welcome, welcome back.
- [38:34]
RJ
Good to see you guys. Thanks for having me on.
- [38:36]
Ben
Thank you so much for hopping on. Congratulations on the launch.
- [38:40]
John
Look at these pictures. This is a great, great setup.
- [38:43]
Ben
It's in your blood. Are these all you driving go karts as a kid?
- [38:48]
RJ
It's actually a mix. There's one of me and then they're mostly of my kids.
- [38:51]
Ben
Oh, that's amazing.
- [38:52]
RJ
Yeah, but it's cool. Cause it's like, in some of them, it's the same go kart that I was driving. And then there's a few other go karts.
- [38:58]
Ben
Okay. But I'm seeing something very controversial behind you. One of those pictures looks like it's gas powered. What's going on?
- [39:04]
RJ
Yeah, that was the spark.
- [39:07]
Ben
You had to fix it.
- [39:08]
RJ
So there weren't electric go karts back then.
- [39:10]
Ben
Oh, okay.
- [39:11]
John
Have you been tempted to make a Rivian go kart?
- [39:16]
RJ
I might. We actually have an electric go kart that we bought now.
- [39:23]
Ben
Cool. But too busy.
- [39:25]
John
I know, but think of the Rivian.
- [39:26]
RJ
I assembled it.
- [39:27]
John
It can't possibly compare to the Rivian equivalent.
- [39:30]
Ben
I agree. But far too busy to work on go karts because you're launching the R2 today. Take us through it. How is it going? What does this launch signify for the business? And what was like, the key. The key idea value prop? How long has this been in the tank?
- [39:46]
RJ
I mean, the idea of R2 has been sort of part of the business since the very, very early days. And essentially the product strategy that we have is launch with the flagship set of products. That's our 1s and R1t. We launched those in late 2021, early 2022. And that was really, think of it like the handshake with the world that established the brand. But these are. These are expensive products. The average selling price in R1 is over $90,000.
- [40:10]
Ben
Yeah.
- [40:11]
RJ
So R2 is really our mass market product. And what, like the whole business has been designed around this because it's what brings us scale. And so, you know, that's not just getting the vehicle ready that you just showed images of, but also getting the rest of the business. So service infrastructure, distribution infrastructure, obviously manufacturing footprint, suppliers. But today we start deliveries to external customers. So we've been delivering to internal customers, employees for a while. But these are the first external deliveries starting today.
- [40:41]
Ben
The ultimate employee perk. I love it. Why is 330 miles of range the right number? Like, psychologically, you could see sort of like the inverse of the 999 and go 301 or 305, but 330. Is there some rationale for that? Is it bounded by the batteries, or is it bounded by the lifestyle of your customers? How'd you land there?
- [41:06]
RJ
It's a good question. I have not been asked that question at why 330 versus 301? Well, it's actually an output Rather than an input, the input was we needed to be greater than 300 on all configurations. We have an off road tire that takes the range down to 307 and then the on road tire gets us to 330. And at the beginning of the program you're sizing, you're making a bunch of decisions around battery size, target for vehicle weight, target for vehicle efficiency. And in the end we ended up exceeding a number of targets such that the least efficient version is 307 miles and the most efficient version, which is actually the base version with rear wheel drive is 345. And then the all wheel version which we're launching with IS330.
- [41:53]
Ben
Do the door handles actually matter? I've become completely normalized to the flat door handles. I prefer them now. They were controversial early on and the excuse that was given by anyone who was doing flat door handles was, well, it'll give you more range, but is it like 15ft of range? It just doesn't feel like it can be 20 miles of range.
- [42:15]
RJ
A little more than 15ft.
- [42:17]
Ben
It is, I like range, it's good. It saved the energy, but at the same time it just feels like of all the things that you could change, that can't be that big. But is it, is it actually material or is it just like the flat door?
- [42:31]
RJ
I mean, it's not going to make or break the vehicle. It also is a design decision. It allows the surface language of the vehicle to be carried through the handle. So it's. Yeah, as you said, it's. A lot of folks have adopted this type of a handle. Even, even in non EVs. You're now seeing them.
- [42:45]
Ben
Yeah, I was so fascinated. Like one of the most impressive things about Rivian is the, the fact that the full size SUV and the truck launched basically in the same year, like very, very quickly. I don't know the exact shipping dates, but like that is. Shipping one car is crazy, but shipping two vehicles the same time is. Obviously there are redundancies and similarities, but walk me through the decision not to do a small truck as fast. Is that market demand? I'm not really sure where the market for small trucks is, but take me through the thinking.
- [43:22]
RJ
Yeah, I mean, to your point, we actually launched the R1T, the R1S and we have a commercial van as well that we produce for Amazon's big customer and there's all launch within three months of each other.
- [43:32]
Ben
That's crazy.
- [43:33]
RJ
And the classic question of what would you do differently if you were to build the company again and Often you try to give a non answer to those kinds of questions, but the honest, real answer is don't launch three cars
- [43:44]
Ben
at the same time.
- [43:46]
RJ
That is like the singular biggest thing I would change. It was, it was enormously complex to ramp up the supply chain and get the, you know, especially this is during COVID for one vehicle. But to do that times three, like we were like, like choking on it. And so learning from that with R2, we have a launch edition that we're launching with. We have a narrower set of colors we're launching with. There's actually the whole R2 program only has, has less than 200 build combinations. And just to put that into perspective, on R1 when we launched, say this is a learning. We had hundreds of thousands of different possible build combinations. And so in theory you don't build everything, but if you click every box in different ways, there's enough combinations that we had to support that level of complexity. And so R2 is this extreme exercise in being very aggressive on driving cost out of the vehicle in every possible way and learning from some of those challenges on R1. So to your question, there's lots of cool variants we can imagine of R2 and even that platform, including things we've shown like we have an R3. But as tempting as it was, and I guarantee you we had lots of debates and I've been tempted, we decided not to pull R3 in to launch at the same time as R2, but to let R2 launch ramp have some breathing room and then bring our three in.
- [45:06]
Ben
But I can still do that aftermarket if I want to wrap it in corporate SaaS logos. You're not going to sue me? I can do whatever I want aftermarket.
- [45:13]
RJ
Yeah. If you want to wrap it in,
- [45:16]
Ben
make it look like a NASCAR for Silicon Valley, maybe that's.
- [45:19]
RJ
I don't know if I love it,
- [45:20]
Ben
but you can do it, but you'll love it.
- [45:24]
John
Yeah. Last time you were on, you talked about just how different, you know, a Rivian is the way that you guys have built it from the ground up to be, you know, a singular, singular, basically computer, singular software system. All this stuff and the advantages that you get from that versus maybe taking a legacy car design and then trying to electrify it with the recent. With a number of high profile EV launches in the last, let's say this year. I would love for you to kind of like revisit that and just because I thought it was a fascinating explanation and particularly interesting now as we've seen these other manufacturers Just try to enter the category and come in with products that I don't believe are incredibly compelling.
- [46:18]
RJ
Yeah, well, there's a lot embedded in that. I think at the core there's a number of things that more by coincidence than by necessity for a new ev, let's say a Rivian, and I'd say Tesla falls in this category. When you architect a vehicle from a clean sheet, you end up approaching a number of things differently. Obviously there's the battery and electric drivetrain that's different than an engine. But I'd say the biggest other difference that is probably not appreciated or talked about as much, but it manifests certainly in terms of customer features and things like over the air updates is around software and electronics. The software electronics that exist in really every vehicle from a legacy existing manufacturer. So it's every manufacturer outside of a Tesla or Rivian. What they look like is really a reflection of a long multi decade evolutionary track which started ironically with the first computer that made its way into a car, which was to power or to or to drive the fuel injection system. Which is somewhat ironic, but prior to early 1960s cars were completely analog. There was no microcontrollers, there was no computers in the car. The first computer came in and it was specific to the domain of fuel injection. So that was designed to support just putting the electronics in for the fuel injector. Subsequent to that, starting in the 1960s and all the way through today, as different functions started to have software capabilities embedded in them. Let's say seats that have memory or power windows that have intelligence to not like grip your fingers or H vac systems that had settings and things that were not just mechanically controlled. Each of those functional domains had a little ECU that was created for it by the supplier. And over time this has grown. I describe it sort of like a field of weeds. So it's not a planned garden. It was not architected. You ended up with what you have today in most cars, which is sometimes upwards of 100 to 150 little computers, what we call little electronic control units that correspond to a very specific function or domain. Those little computers have their own little island of software written by a separate team. Often it's not even written by the supplier, it's written by a third party, often overseas, often in India. You have this mess, truly a mess of software, where you have multiple different little islands of code, none of which are coordinated, all of which. Now to deliver complex features that have things working together require a lot of coordination between suppliers. It's for Precisely that reason that you see very few significant over the air updates on traditional cars because let's say, update the sequence of events that occur when you walk up to the car where the horn makes an audible noise, the door unlocks, the H Vac comes on, the seat adjusts, the steering wheel adjusts, let's say there's the music adjusts inside the car, the battery system comes to life. All those are different controllers. So just to change the order of events, it's very hard. You've got to coordinate between 10 to 15 companies in a classical sense. And so what we built is something where you consolidate all that compute onto a very small number of computers. We now call those zonal controllers because they work in a physical zone of the car and it runs one OS which we built. And that single OS allows us to very easily change things. And that architecture is what underpins not only Rivian's, but we did a large $5.8 billion software licensing deal with Volkswagen Group to take that technology and help them on their journey with their future electric products.
- [50:03]
Ben
That's very cool.
- [50:05]
John
Thank you for re explaining.
- [50:06]
Ben
So the R2 boasts more infotainment compute power than any vehicle currently available in North America. And I'm interested with the backdrop of wwdc, what does the future of AI infotainment in a vehicle look like? Because you're starting to bump up against the ability to run on device models, I'm sure. And there's this trade off, we saw it with Apple where there's some stuff you can do do on any phones. Basically there's other things you can do with 12 gigs of RAM just on the latest phones, other things that's going to go to their cloud. And I'm sure you have a series of abilities at varying levels, but when I get to the examples, I don't necessarily know that people were sort of laughing at you. Get a text message that asks you a question and it summarizes it and it just asks you the same question. And you probably don't want to be the CEO that's going around to the employees saying like stuff AI everywhere. People are going to want to have AI decide how far the window goes up or the windshield wipers go on. But there probably are interesting ideas. So how do you see that evolving? What's the role of the car as a compute source versus cloud? How do you think about that?
- [51:24]
RJ
Yeah, I'd separate the features that we deliver from the platform.
- [51:30]
Ben
Okay.
- [51:30]
RJ
And the way we've architected R2 is thinking of it really as a platform. So we want to embed in it enough headroom for features to grow dramatically and for things to evolve in ways that even today we can't imagine.
- [51:43]
Ben
Yeah.
- [51:44]
RJ
And so on. Everything that's infotainment related, putting a really powerful 200 tops platform into the vehicle allows us to run much larger models in the vehicle than like let's say what we can run in R1. So R1, we just launched a Rivian Assistant and we can run a small model on board. But for anything that's more complex, we have to go up to the cloud because we just don't have enough pewd in the vehicle to be able to run these larger models. R2 is quite different. So R2 has a much higher headroom so we can run a lot more. A much larger model in the car. And is it helpful because it reduces latency. So suddenly you can have much more, you know, natural back and forth conversations without having to wait for things to send up to the cloud and back. And so we built that in knowing that we're going to add more over time. What we have today is a better version of a Rivian Assistant that'll be going into the car we have, that'll be actually continually getting updated as well and continually getting better. And you'll start to see, as you just described it in the case of iPhones, you're going to see differences in like our Gen 2 R1s and our Gen 1 R1s aren't going to have the same hardware capability that we have with R2.
- [52:59]
Ben
How are you thinking about self driving and what the next few years looks like there. I've been surprised that we've seen this like insane capital war in the foundation model companies and hyperscalers spending hundreds of billions of dollars. And we saw that a little bit in automotive years ago with the cruise acquisition by GM and there's been initiatives and the technology is on a good track. But it feels no one has self driving psychosis. Like no one, no one is saying that like, oh, every automaker is going to go bankrupt because they're investing too much in this. Everyone's like, yeah, the self driving is getting better and we're on a smooth path. And in a couple of years the cars are. You're going to be really not touching the steering wheel at all. But is that conscious? Is that based on the research trajectory? Do you expect that to accelerate? Like how are you thinking about self driving these days?
- [53:56]
RJ
It's a great question and it's important just to talk about the History of self driving and how much the technology has changed. And so self driving has been, it's been a topic science fiction for many decades, but it's been a topic of, of real applied work since early 2010. So call it 2013, 2014. It started to emerge as something that people were working on the way those early models were being built. And this was true up until 2022, 2023, where you would essentially take the knowledge of driving and try to codify you try to put that into code that would then have, you'd have cameras and a perception stack, maybe cameras plus radar plus lidar, depending on the vehicle. But that would perceive the world. It would hand all that information to a planner. The planner's code that's representing human knowledge of driving, that's coded by humans.
- [54:54]
Ben
Yeah, it was almost all C and it was other than processing the images,
- [54:59]
RJ
I think it's like highly rules based environment and then output controls, control directives to the vehicle to then steer, brake, accelerate, what have you. That approach has been completely superseded by a foundation model based approach. So instead of trying to write code to represent driving, we're training these multibillion parameter models. And when I say we, I mean the people who are doing this correctly. I would say to be honest, and not everyone falls in this category, but the right way to do this is clearly to build a large neural net multi billion parameter model where you're training the model with the benefit of millions and millions of miles of vehicles being driven. That model is getting better and better over time through the learning of the installed car park. And so the way we designed R2 was we wanted to put a lot of compute into the vehicle. So a lot of inference. We want to have a really robust sensor set that's not just there to drive the car, but importantly allows us to collect a lot of data and to allow us, because we want to have really high data quality to allow us to catch up rapidly. For Tesla is and ultimately be a leader in the path to level four. So the path to the idea of the vehicle driving empty, are you sitting in the backseat or picking up groceries for you or dropping you at the airport? And so the timeline for us on that is Getting to level four in 2028 and backing up from that, we have point to point capabilities which will launch later this year. So that's you're in the car, you're in the driver's seat, you type the address in the car, will completely navigate to that address. Your hands are not on the wheel, you're still, you know, alert and aware of what's happening in the driver's seat, but you're not driving the car. That's what we call that as hands, hands off, eyes on. Next year we'll go level three, which is hands off, eyes off. So you do all that, but you no longer have to look at the road at all. You can be on your phone, you can be reading a book, but you
- [56:53]
Ben
have to be there in case the car asks you to take over.
- [56:56]
RJ
Right, exactly. And that's level three. And then level four is where the car won't ask you to take over in any situation. It's fully on its own.
- [57:03]
Ben
Are there any one thing I really
- [57:05]
RJ
want to make clear if everything I just said was ignored? The thing to keep in mind is when you think about technical progress on a topic, it's very natural, it's human nature to look at previous progress and use that as a way to extrapolate what future progress is going to look like. And the reason we so naturally do this is it's generally true. So if you look at like how we're building homes today, we can look at the last five years and say, well, that's probably how we're going to build homes for the next five years. That ceases to be true when you have these big technical inflection points. And those don't happen often like, so the, like the invention of semiconductor, big tech inflection point. In the case of Autonomy, the invention of what we think of today in terms of modern AI so transformer based encoding. The idea of these large scale foundation models has completely shifted how Autonomy is being developed. And so I would characterize it as the progress that was made over the last five years, let's say from 2021 to 2026 is not at all representative, not even a little bit representative of what I think the progress is going to be over the next five years. So from 2026 through 2031, and I actually think that the progress is going to be faster than society will be able to ingest. And so today, you know, if, you know, we're in San Francisco, it's easy to go like hop in a Waymo and experience this. That's a, you know, it's a tourist attraction for people that don't live in San Francisco. That is just going to be cars like in my view, I think like a car that you buy in 2030, 2031, you will expect it to have capabilities similar to that. And it's sort of hard to like believe it because you're like, oh, we've been saying things like this for a while, but there was a big shift in how the models were developed. And it is, we're seeing it firsthand. Like the rate of progress we're making on our own platform is materially different than what we've been doing for the last few years.
- [59:01]
John
That's super exciting. The I had an interesting conversation with someone who owns like I think five to 10 car dealerships. None, none of the, none of the brands that he sells has any type of like meaningful attachment autonomy. Maybe they have a team working on it, but not really tangible progress. And I asked him, how much do buyers really care about autonomy right now? Do they come in and say, well, I love the look of this car, but it doesn't drive me, so I'm not super interested. His dealerships are in the Midwest. And he gave me an interesting answer. He said it's not really a big concern. It's not a top priority for our buyers right now. And I think it was because a lot of, a lot of the people in that area have like a 15 minute commute, 20 minute commute, something like that. And I compared that to friends of mine and I live about 40 minutes outside of like L A area and I have two friends who just could not fathom driving anything but like their Model Y because they're just so addicted to autonomy now. They're just like, I don't care what any other car looks like. And so I think like one of the big kind of wake up calls is going to be for the big manufacturers over this next five year period where even if they're lagging like one to two years behind as companies like Rivian kind of like achieve these new levels of autonomy, it will be, it will be just so hard to compete purely on, on esthetics. And, and how does, what is the internal leather look and feel feel? Things like that historically have mattered.
- [60:43]
RJ
I couldn't agree more with everything you just said, including today. It's not a huge, it doesn't drive a huge percentage of purchases. And I think part of the challenge is Even with Tesla's FSD, it's a very, very good Level 2, but you're still required to be in the driver's seat, still required to be alert. I think the big inflection point is the moment you start to, without the car dinging at you or asking you to look at the road with like, where you truly get your time back, where you can like be on an iPad the whole Ride, not look at the road once. And I think that you experience that once or twice and you don't think you needed it. You didn't think it was part of your purchase criteria. And then you're like, wow, I must have that in my next car. To your point, and I think you see with early adopters within the Tesla ecosystem, like, that's definitely true. If someone's been using FSD for a while, it's very hard for them to imagine a car that doesn't have at least those capabilities.
- [61:37]
John
Yeah, final, final question. I'm sure you have to jump, but the car enthusiast in me would love for the R2 to be such a massive success for you to sell so many units that you guys have the ability to fund maybe something like the 911 equivalent of an EV. You know, a somewhat accessible Taycan MOG. You know, like an accessible sporty EV for enthusiasts.
- [62:10]
Ben
What's on the box?
- [62:11]
John
Hearing everything that you've said, I just feel like you're never gonna actually be able to fully justify that. But I can dream.
- [62:18]
RJ
What about a track only accelerated 911 right now? So you've got that?
- [62:22]
Ben
Yeah, it is. What about a track only version of the Amazon delivery van? That's what I'm in the market for.
- [62:30]
RJ
Very small market.
- [62:31]
Ben
Very small market. I want a wing on the back, some active arrow. Let's do it.
- [62:37]
John
No, but I think, I think it's
- [62:39]
RJ
probably like five people.
- [62:41]
John
No, but I think the like $80,000 enthusiast car for the EV market will eventually.
- [62:49]
Ben
I mean, I would actually take the other side of this just to steal, man, is just like the focus on. The categories that you've chosen have clearly been remarkably prescient and accurate in the sense that more and more Americans are buying full size SUVs for their families. Trucks are still incredibly popular. Midsize SUVs are popular. And as much as the car nerds love the old sedans and the sports cars and the two doors and the convertibles, those are just a different tool. Their recreational vehicle. It's like a special thing. And like in, like Jay Leno loves them, but like, there aren't that many Jay Leno's. If you're trying to build a big business and maybe this comes down the pipe, but we're not going to hold your feet to the fire today.
- [63:33]
John
I'm going to be praying for millions and millions and millions on the road.
- [63:37]
Ben
Me too.
- [63:38]
John
And so RJ can justify the go kart? Yes, of course you can justify the go kart. So you can justify the 911 equivalent. Um, so we'll be praying for that.
- [63:48]
RJ
I think if I were to stack rank them though and things we would do that the 911 equivalent would be higher than the go kart and higher than the super van that you just
- [63:57]
Ben
the track only delivery. Okay, so. So we, we got only upwards to go, so that's good.
- [64:02]
RJ
Yeah, so. So it's more likely than the other options.
- [64:05]
Ben
Yeah. Well, well, I'm getting one. Thank you so much for coming on. We really appreciate it.
- [64:08]
John
Yeah, great. Great to get the update and congrats to the whole team. It's, it's a beautiful.
- [64:13]
Ben
Yeah, we're very excited. Have a great rest of your day. Congratulations. Goodbye. Let me tell you about console. Console builds AI agents that automate 70% of it. HR and finance support giving employees instant resolution for access requests and password resets. And our next guest is already in the waiting room. We have Chris Miller, the author of Chip War. Fantastic book. If you haven't read it already, he's been on the show before. Welcome back.
- [64:38]
RJ
Welcome to the show.
- [64:39]
Ben
Chris, how are you doing?
- [64:39]
John
What's going on?
- [64:40]
Chris Miller
Doing well. Thanks for having me.
- [64:42]
Ben
Thanks for hopping on. I guess the first place to start since you've been on the show before we did the whole deep dive on Chip War. I've read the book, it's great. Hopefully most of the audience has read it. If they haven't, they should go pick it up. But what do you think has changed the most since you wrote Chip War? What have been your biggest updates to your sort of world model, your way of thinking about. About the chip war broadly?
- [65:06]
Chris Miller
I think the big change is that for the last two decades, if you look at semiconductor spend as a share of gdp, it was roughly flat and then in the last four years it's roughly doubled. And that has been all been driven by AI. And I think, you know, the question is doubling is fine, can it triple? How much more can it go relative to trend line? That's the big question I think hanging over the industry right now.
- [65:28]
Ben
And is that gated by tsmc? Capacity, energy capacity, demand. The demand seems to be be there. Like everyone's inferencing models all day long. The models require more and more chips. A single model these days needs an NBL 72 or a whole rack. But what do you see as sort of like the key inflection points that people should be watching for as the semiconductor industry continues to boom or tops out at some point?
- [65:54]
Chris Miller
Yeah, I think right now it is gated by TSMC and manufacturing Capacity more broadly. But if you put yourself in the shoes of those companies, they're looking at demand. Not sure how strong it's going to be. Obviously strong, but is it strong enough to double a tripling of semiconductor spend as a share gdp? That's a big jump. And of course they're on the hooks for the capex. They got to build the factories, they've got to pay for them. And so companies in the manufacturing layer are excited but nervous about just how far this is going to run. And they have an incentive as a result to be a bit more cautious on building chip plants than companies would
- [66:27]
John
like to in historical infrastructure build outs, let's say like electricity and railroads, was there ever a key supplier that just didn't have any sort of like insane FOMO or, or, or fear of missing out? Like I'm thinking in like railroads, was there a critical supplier that was like, you know what, we're excited about this trend, we're investing in it.
- [66:48]
Ben
We're building enough railroads. Yeah, we're not going to build any more railroad times.
- [66:52]
John
Yeah, yeah, yeah. Like you know, if there's any curmudgeon steam engine, it feels like on one hand obviously there's frustration from other players in the supply chain, but at the same time it feels like somewhat potentially healthy. Even though I think you can see that bubbles have produced great results throughout history.
- [67:17]
Chris Miller
Yeah, I think we are in a somewhat unique moment in that there are a series of choke points down the supply chain where you just rely on a single company for most capacity. And that didn't happen with railway ties, it hasn't happened with electricity. You have at the TSMC layer for sure, but then you look at their suppliers for key materials for advanced packaging and there's often choke points there as well. And the trick is that the deeper you get in the supply chain, the further you are from the actual end AI demand and the more skepticism builds up as to how real is this actually. And that's why there's been underinvestment in the materials and manufacturing relative to what Silicon Valley needs.
- [67:55]
Ben
Yeah, it's the bullwhip effect, right. A small change in demand amplifies and amplifies and all of a sudden they don't want to get caught at the tail end. And also, I know, I know in video traded all over the place during the crypto boom when cryptocurrency miners were using GPUs and then Ethereum went proof of stake instead of proof of work and there was a drop off into the demand there But I'm wondering, do you remember if TSMC had the same level of skepticism or was even affected by the previous rise and fall of Nvidia?
- [68:32]
Chris Miller
You know, I think the key is that before the last couple of years, Nvidia was one of many customers that TSMC had.
- [68:38]
Ben
Sure.
- [68:39]
Chris Miller
And Apple was the most important, whereas now it's kind of flipped. Nvidia and AI in general is the key growth driver. So in the past, TSMC would have more closely tracked smartphone sales than they would have tracked data center buildup.
- [68:51]
Ben
And smartphone sales were on a much more steady pace since Apple has their whole machinery of refreshing and planned obsolescence potentially.
- [69:00]
John
And you look at individuals are not like, I need, like, the iPhone's gotten so good, I need five phones.
- [69:05]
Ben
Yeah, yeah, yeah, yeah. There was no exponential takeoff. But now there's like, okay, I need 10 more, 10 times more tokens, a thousand times more more tokens, et cetera, et cetera. Staying on tsmc, I'm curious about the culture there because TSMC is known as this, like, champion of Taiwan, the most elite institution, the crown jewel of Taiwan. And why we explained the bullwhip effect a little bit about the reticence to deploy more Capex. But is there also some sort of cultural element or capital markets dynamic? Because when America has a crown jewel, we're like, send it to the moon. Like there's any excuse to 10x capacity or 10x the scale of our crown jewel. Let's do it. And it seems interesting that you would have a company that has this opportunity and there's a glimmer of a hope for it being even bigger. And yet is it, is it more of this protective mindset of like, we have this good thing going, let's not risk it, or is it just like, they can raise prices so there's less downside there?
- [70:14]
Chris Miller
I think it is a conservative culture, but I think they believe their conservatism has served them well in the past. There have been cycles in the past, and being cautious going into this cycle gives you the opportunity to invest at the bottom of the cycle. And TSMC has done that really well historically. Now I think right now they realize that we're not at the top. They're building new factories as we speak. But I think they're also looking at the history and saying, we don't want to overinvest relative to our customers going to need.
- [70:43]
Ben
Yeah. And then, and then what does the, the, the domestic chip supply look like from your perspective right now? There's a ton of energy around intel and it feels like intel checked a lot of the boxes for the comeback. Like the comeback hasn't really arrived yet. But in terms of, you know, the backstop from the US government, additional investment, the stock price is up and a bunch of, a bunch of buyers and potential customers are falling in line for their, their most advanced node. It feels like things are on track there. But what else is going on? And is that actually a pressure on TSMC at some point?
- [71:20]
Chris Miller
I think to some degree that, that does create a bit of pressure. Agree that intel looks to get a. It's in a much stronger position. I think the customer traction is the key thing and as you say, we haven't, we've seen news about customer traction but not actually volumes yet. And intel really needs substantial volumes of customer orders. So I think that's one positive sign. I think everyone's watching carefully what Elon's going to do with tariff, how that's going to grow. Could be transformative, could not be. It's obviously a hard industry to, to break into. And then you know, know there's Samsung with a big plant in Texas they're bringing online and also Tesla is reportedly one of their customers. You look across the ecosystem and there's certainly a lot more optimism about leading edge manufacturing than would have been just a couple of years ago.
- [72:05]
John
Bull and bear for Tarifab. I would love your take.
- [72:10]
Chris Miller
You know, I think A, never bet against Elon, but B, you know, it seems like he's lining up a coalition of partners on the IP side and the manufacturing side. It'll be interesting to watch how it develops. I'm excited.
- [72:23]
Ben
Yeah, I guess the question is like how much of the fab is him versus he's the buyer and it's actually intel doing everything because I don't think anyone doubts that intel can like run a fab since that's what they've done for decades and if you bring on the right partners it seems like it could be possible. Interesting.
- [72:42]
John
What do you know about ASML's current thinking around AI progress and the build out and how they're thinking about investing against this progress?
- [72:55]
Chris Miller
Well, I think ASML is in a similar position to tsmc. They want to meet customer demand, but they don't want to overbuild and they're also on the wrong side of the bullwhip and so they have an incentive to be a bit more conservative than their customers do. But it's been a great year for ASML as obviously demand has just been through the roof and that's I think that's going to continue for, for some time. I think the other challenge that ASML is, is working through is that tsmc, their most important customer, has said they're not going to buy the latest high NA lithography machines, at least for a couple of years. And that that's also a medium term challenge for ASML because they're trying to sell the next generation machines.
- [73:33]
Ben
Sort of doesn't matter how AGI pilled you are if your customer doesn't show up to buy the thing that you're making in the supply chain. How have you been, how have you been processing the export controls back and forth? Because it feels like it's been every other day. It's like, okay, we can send anything and then we can sell the Nerf stuff and then we can now sell nothing and then everything. And it's been going back and forth. And that's sort of the nature of this administration. But is there a clearer through line that you've detected? Is there something else going on there or is it as chaotic as I've been reading into it?
- [74:08]
Chris Miller
Yeah, I think, you know, step one is don't read the tweets and step two is look at Congress because Congress, that's where you get the bipartisan support for these export controls. And I think Congress has been playing an important role in influencing the administration. You've seen a bunch of influential Republicans, for example, publicly support export controls, trying to put pressure on the White House. I think the third thing that's important is Methos really did change thinking in the White House about how powerful AI is going to be and how important it is to have the leading capabilities to yourself. And so I think there's been a shift around the AI debate in the White House just over the last couple of weeks.
- [74:45]
Ben
Yeah. So related to that, there's reporting in Reuters Today, China prepares $295 billion plan to fund nationwide AI buildout. How did you interpret this? Do you see this coming? And then I'm interested to know, like, do they have the supply chain to actually deploy $300 billion? Because the numbers that I've seen back of the envelope for if the chip controls get weakened and Nvidia can sell the Tam is like 10 billion, which would be great, but not like huge and certainly a small chunk of this. So are they advancing enough with SMIC and SME to, to indigenize their supply chain and actually spend this money? Do they have other plans? How do you see this playing out?
- [75:33]
Chris Miller
I think first those numbers are over five years. So annually, that's less money than Google or any of the hyperscalers. So just to put into context, play
- [75:42]
Ben
the bald eagle sound, baby. We've still got it.
- [75:46]
John
What do they know? What do they know? What do they know? Chris? No, seriously, seriously.
- [75:53]
Ben
How do you read into it?
- [75:55]
Chris Miller
This is the puzzle. The puzzle is, why isn't Xi Jinping more AGI pilled? Sure, if you thought AI was important, you thought chips were an important ingredient. China's been underspending for the last four years on AI, and I think it's because the Chinese government just doesn't really believe that AI is going to be nearly as important as we do. And if they did believe it, they'd be A, buying H200 chips and B, spending more on data centers. They're not doing it.
- [76:21]
Ben
Is it possible that they just like, they believe in AGI or something, but they just have longer timelines? Like, it feels like a lot of the underwriting that's happening in the United States is based on 18 months, coincidentally. Exactly. The VC timeline for around. It's like, what will we do in the next 18 months? We're AGI in 2027, 2028. Really short timelines here. And then that's also backed up by Dwarkesh Patel had a post saying like, if AGI comes soon, America wins. If it comes longer, China wins. And it feels like that's almost like. I like his analysis, but it's also like a reflection of the revealed preferences of the two countries where America is sort of building towards a fast takeoff AGI soon scenario. And China might actually not be like, necessarily behind the ball. They might just be optimizing for a 2035 AGI. And if they ramp up slowly, there's going to be less gyrations, less of a bullwhip effect, and they can take a longer view. How do you process that?
- [77:28]
Chris Miller
Yeah, I think one explanation is just that the US is a service sector heavy economy and AI is going to be more impactful in services first, manufacturing second.
- [77:37]
Ben
Yeah.
- [77:38]
Chris Miller
And so that could be part of the story. I think. Second, US firms just could be more tech forward. You see this in cloud computing. China has a tiny cloud computing market relative to GDP because its large enterprises just don't want to move to the cloud. And so that could be another analogy. And then I think third, we should be open to the prospect that the Chinese government just hasn't gotten the memo yet. For better or for worse, we have no deficit of venture capitalists and tech entrepreneurs in government.
- [78:07]
Ben
Yeah.
- [78:07]
Chris Miller
And of course China is not the center of government and then that could be another factor.
- [78:11]
John
You would think they would be excited about it purely from an authoritarian lens because like, if you have like the all powerful model that, that can basically theoretically they already have micromanage. Every single. Micromanage, every single citizens, the content that they get, the services they get access to, you know, how much, how much the retirement benefits they get, all these different things like it. In the US we think of this authoritarian AI scenario as like a doomsday scenario.
- [78:44]
Ben
It sounds terrible if you're an authoritarian,
- [78:46]
John
but if you're an authoritarian, you think like, I got to get one of these authoritarian models.
- [78:51]
Ben
Yeah, I don't know.
- [78:53]
Chris Miller
Yeah, I think that dynamic is there. I think the risk if you're, if you're an authoritarian leader is you don't know what the model is going to output. They're not nearly deterministic enough for your preferences. And that's the downside for any authoritarian leader.
- [79:07]
Ben
Yeah, there was recently morel better training data. There was recently a reporting that Vladimir Putin instructed the Kremlin to disconnect or firewall or air gap all of the CCTV cameras that are I guess inside, inside the Kremlin or like could potentially triangulate him because they were worried about a hack where his location is disclosed to a foreign adversary. And so yeah, you can see that these tools cut both ways. Have you actually followed anything on what's going on in China, in Russia?
- [79:42]
John
But before we go there, I wanted to ask how closely have you followed the whole Manus saga and debacle? Do you know the latest? It feels very unclear how something like that gets unwound, but yeah.
- [79:57]
Ben
Are they still in China? Yeah, I don't know.
- [80:00]
Chris Miller
Well, this is, I think the really interesting part is that if you have a broader campaign of pulling passports from leading AI entrepreneurs, that is a extraordinarily chilling sign for the rest of the industry. And I think there's a real. If I was sitting in Beijing, I'd be really nervous about being too tough on my entrepreneurs because those are the people you need to invest and build companies. And that's a pretty risky move I would think for Beijing in terms of building their own domestic ecosystem.
- [80:25]
Ben
I mean, Liang Wen Fang, the founder of Deep Sea, has the most control, I think even higher level of control than Elon at SpaceX in terms of founder ownership and concentration because he had high flyer, the hedge fund and then he funded Deep Seq. So he did the first couple rounds and provided, I think it's like 80% ownership and I mean it's already a multi billion dollar company. Could be one of the biggest companies in China if AI labs are any indication in America, there's any correlation there. And so he's going to, he should get a second passport maybe, I don't know.
- [81:05]
John
But Russia, Russia, we've to been trying, trying to figure out how many like GPUs they have.
- [81:11]
Ben
Well, like 10 years ago, Vladimir Putin was giving a talk and he said whoever wins AI wins the future. And he, he was AGI pilled before, way before it was cool. Then he got into a crazy war and it seems like he lost all of his best talent to Nebius. And what's the other one? Clickhouse and a bunch of other Yandex spin outs and stuff. And so, so I'm just wondering like, has Russia come up at all in your research of like where chips are going, where data centers are getting built? I just don't hear them in the conversation at all. And it's surprising to me because they have nuclear weapons.
- [81:47]
Chris Miller
Yeah, I think, I think you're absolutely right. They're not a big player. And the reason is because Nebulous is outside of Russia. That's an example of a team that was one of the leading groups of tech entrepreneurs in Russia at least until 2022 and now they spun outside of Russia and are building a great company in the west and that's a microcosm of the entire tech ecosystem. The best estimates are that hundreds of thousands of Russians left the country after 2022. Disproportionately well educated, disproportionately in the tech sector. And so yeah, there have been some reports of GPU smuggling into Russia, but it's I think small scale because there's just not the demand for building big data centers.
- [82:21]
Ben
They're gaming, they're getting those GPUs, they're gaming, gaming. It's like they only smuggled 1080 TIS, you can't run advanced LLMs on those. Yeah, they're gaming. Talk to me about the reception in China of American GPUs, Western GPUs. There's like interesting smuggling dynamics, interesting debates over Nvidia export controls. But then we see these articles pop up every once in a while saying like Beijing doesn't want them or Beijing is going to pressure local companies to use the Huawei Ascend chip or go more indigenous. And I'm just interested because we label China as like authoritarian. But obviously no system is perfect one way or another. Obviously. And so do they actually have the ability to restrict this. How much do they actually want? Do they really care? Because it feels like the pool of compute is pretty fungible. And I don't know, are they worried about, like, security risks or dependency? Like, how would you rank their. Their worries?
- [83:24]
Chris Miller
Yeah, yeah. I mean, what we know is there is smuggling at a reasonably large scale. There's also offshore compute access. If you're a Chinese hyperscaler, you can get access compute in Malaysia or wherever else. But it seems like the Chinese government is. Is really fixated on pushing firms to buy Huawei. And it's surprising, I think, that they haven't let Chinese companies buy the H200s, despite that it's now been half a year in which the Trump administration has been allowing sales. And that goes back to what's the Chinese government trying to do? If you were AGI pilled, you would buy the two hundreds. But if you're not and you're focused on domestic manufacturing and supporting the Huawei ecosystem, if you're worried about data security and think there are backdoors, which I think the Chinese might be worried about, then maybe, say, ban the foreign chips. Yeah, there'll be a bit of smuggling, but better to build up your domestic ecosystem. And that does seem to be the revealed preference of the Chinese leadership.
- [84:18]
Ben
Why do you think. What are the keys to China's broad support of AI? Locally, AI polls so terribly in the United States. It pulls terribly in the EU as well. But China is almost flipped. It's like 80% support artificial intelligence. Only in America, it's like 20%. What's going on?
- [84:43]
Chris Miller
You know, I think part of it might just be the media landscape. You know, in China, if there are topics that the government doesn't want discuss, they don't get discussed. That's part A, you know, B is that the entire tech sector is much less controversial among the Chinese populace than in the US We've had a decade of debates about Mark Zuckerberg and social media. That's been present in China to some degree, but much less toxic than in the US and then I think, third, US AI firms have been uniquely bad with publicity, promising to destroy jobs, promising to threaten the future existence of humanity. That's been the marketing of AI over the last couple of years. And when you hear that, it's not surprising people don't like it.
- [85:22]
Ben
Yeah, that makes a lot of sense. Is anything happening in Japan that's relevant right now?
- [85:30]
Chris Miller
I think the big story in Japan is the. The number of companies that have been discovered to have Extraordinary materials capabilities that sell into the chip supply chain. So my favorite example is one of the toilet makers in Japan has an advanced ceramic capability that's used in the machines that make chips.
- [85:48]
John
I know. And it's so funny because when the headlines started breaking around that this is probably two, three months ago, a lot of people were like, wow, top signal, like toilet companies getting into it was
- [86:00]
Ben
like an all purpose thing.
- [86:01]
John
Yeah. It looked like just like a pump. But now I actually have, you know, an industrial process that's very valuable and very real.
- [86:10]
Ben
Yeah, I mean, yeah, great lineage there in, I mean they were doing humanoid robots. The Honda Asimo or something was in like 2002. And it feels like the Japanese economy just sort of lost, lost a step and just didn't keep doubling down. They were just too early and so they ceded a lot of that territory to China and America. But I'm rooting for a comeback because I like that Honda robot. It was cute. Didn't feel like Terminator at all. Felt like C3PO. I don't know.
- [86:37]
Chris Miller
That's right, that's right. I think the Japanese robotics firms, I think they're so focused on factory automation and that's where their expertise really lies that they're struggling to get their heads around. What does AI plus Robotics actually mean?
- [86:50]
Ben
Sure, sure. Interesting last question from me. Is Nvidia a car? What's going on with their moat? How are you thinking about Nvidia in the supply chain? How important is their role? How defensible is their position? The debate was Jensen saying Nvidia is not a car. It is not something you can just step into and get where you're going. It's a special product from a special company.
- [87:19]
Chris Miller
So I think we're into year two at least of the ASIC debate. It's clear ASICS will have some market share, but it also seems clear that Nvidia is going to be the dominant player by far. I thought it was interesting to watch Nvidia acquire Groq technology six months ago, showing that they're going to be able to diversify into inference focused hardware, building their empire of sorts. And Cuda still remains a very powerful part of the moat. So, you know, is the market can decline from 90% to something lower than 90%. You know, that's what's happening. But that. Does that mean Nvidia is not going to be the dominant player? It certainly seems like it's well on track to be the key provider of GPUs for long time to come.
- [88:01]
John
When's the next book coming.
- [88:03]
Ben
I was going to ask and tell us the title. Is he. But obviously you can't announce anything. But if you were to create the next chip war would it be called Chip War two? Or would it be called battery war or robotic supply chain war or energy war? Is there a new war that will supersede the chip war become the most relevant topic? Or are we just doubling down on chips?
- [88:30]
John
You're kind of using a little bit of fear based marketing yourself. Chris.
- [88:33]
Ben
War. It's a war. Why not? Just beautiful trading and collaboration and yeah. There'll be prices. Yeah. Chip trade doesn't sell any bucks.
- [88:43]
John
Chip industry. Industry dynamic.
- [88:46]
Ben
Yeah. Chip industry deep dive. The book. That's fear based marketing. Or. We caught him. Redhead.
- [88:51]
John
It's working on me anyway. It's working on me. I want the next one.
- [88:53]
Ben
The next book. The next hot topic. The next thing that you'll be digging into. What are you thinking?
- [88:58]
Chris Miller
You know I think I'm spending all my time on chips right now. I don't know if there's gonna be a sequel. CHIP War 2.
- [89:03]
Ben
CHIP War 2.
- [89:04]
Alex Heath
Revenge of the Chips.
- [89:04]
Chris Miller
I know that sounds so good. Revenge of the Chips. That's where. But sequels are never as good as the original. So I think probably not a sequel on that topic.
- [89:11]
Ben
Maybe Chip Peace. You've done Chip Peace.
- [89:13]
Alex Heath
I hope so.
- [89:14]
Ben
What is the path to Chip Peace? That's what I want to hear. A lot of fear mongering. A lot of worries about war. We need a lot of ways to get out of quagmires. I think that's generally what I'm rooting for. Anyway. Thank you so much for taking the time to come chat with us. This is a lot of fun.
- [89:29]
John
Yeah. I really appreciate it.
- [89:30]
Ben
Love to have you back soon. And go get the book. Chip War. It's a available everywhere. Books are sold. We'll talk to you soon. Goodbye. Let me tell you about Crowdstrike. Your business is. Their business is securing it. CrowdStrike secures AI and stops breaches. Our next guest is in the waiting room already. We have Evan Beard from Standard Bots. He's the co founder, CEO, chief engineer and he has a massive C to announce. How are you doing, Evan?
- [89:55]
John
What's going on?
- [89:55]
Ben
Good to meet. You're looking at extremely sharp. What's the occasion? Introduce yourself. Tell us what's going on.
- [90:03]
Evan Beard
Thanks so much. Evan Beard CEO of Standard Bots. Standard Bots is America's largest maker of AI native robots. Announcing today our Series C so raised 200 million at a $1 billion valuation. And we're announcing all skate.
- [90:16]
Ben
Congratulations. They're waiting for the gong. Yes.
- [90:20]
Evan Beard
Now the fundraiser is official.
- [90:22]
Ben
Yeah. Fantastic.
- [90:22]
Evan Beard
And so we're also announcing we're quadrupling our manufacturing footprint. Print. We're growing so quickly. We expect next year to be 10% of all US robotics industrial robot deployments.
- [90:33]
Ben
Wow. So how small is the US Industrial robotics? They all come from Germany and Japan or China. Like, who are the major players internationally? I mean, obviously it's important to, to re industrialize, but it feels like for such a young company to get so much ground, like we really have to be behind the ball here, right?
- [90:54]
Evan Beard
Yeah. Last year we grew 10x year. On year, we are behind the ball. When I first started the company, I did Y Combinator.
- [91:00]
Ben
Cool.
- [91:01]
Evan Beard
I. I looked around and realized I wanted to start a robotics company. I realized that almost all the robots, it's like 99.9% of the robots used in the United States are not made here.
- [91:10]
Ben
Yeah. So.
- [91:11]
Evan Beard
So that's the kind of starting point. And then you try the products and you have these menus that have like a single letter in them. It's like crazy stuff like you would expect from, I don't know, like mainframe computer type. Like it's beyond any other software I've ever seen. And so we realized we could make something 10x better. And then with AI, now obviously you can train a robot by demonstrating a task. Whole new way to train it can be more capable, handle more variability. So that's what we do.
- [91:35]
Ben
Yeah. And it's probably not sold to like a technical audience. Not like stripe for humanoid robots or industrial robots exists. The buyer's probably some firm that owns a whole footprint of manufacturing plants. And they just say like, stick it there and figure it out later.
- [91:51]
John
Yeah. So. So has, has the journey so far been about finding product, market fit, or has it been about just delivering an American equivalent of products that are already popular?
- [92:03]
Evan Beard
Yeah, it's a great question. When we first started, so I talked to 100 different manufacturers and I asked them, do you like your robots? Who programmed them? Can I play with them? How long did it take? What are they doing? It was really from the beginning, we knew exactly what we needed to build. And from the beginning, the problem was actually building it. It wasn't like, what do we build or how are we going to reach the people or do they want it? And what's been consistent from from the beginning of the company we did our seed round around 2020 has been we build the next thing that we Know, people need. And we see even more takeoff and even more accelerated growth. So that's been, it's mostly been a technical problem, which is what I wanted to when I got into this whole thing.
- [92:41]
John
Yeah, yeah, it's great. If it's great if demand is all there.
- [92:46]
Ben
How vertically integrated do you want to be? I've heard a lot of fud about actuators and small drone motors and all these different pieces. Deeper in the supply chain. You hear about the American company that is the brand and it's all made in China. Or then the American company that's making the product for the, for the American brand, but then all their parts are made in China. And we're going through this process of working through the entire supply chain.
- [93:12]
John
Let's just say this John, he made, he, he made that tie. That tie is a standard, standard bot's tie. We go, he's got to go all the way.
- [93:19]
Ben
You got to go all the way.
- [93:22]
Evan Beard
You know, I try to do, do I rep the American brands, but we're trying to make every single component of the robot with this fundraise in the United States and we've already designed most of it. So we design our own motor, we designed our own motor controller. Like we wrote the original firmware, I wrote the original firmware to do all the motor control 60,000 times a second, switching electricity to, you know, make the magnet and the electric electrical, the electrical electromagnet, you know, so. So we vertically integrated on a really low level.
- [93:50]
Ben
Yeah.
- [93:50]
Evan Beard
And now it's about vertically integrating the manufacturer as well. So that's the next step here.
- [93:54]
Ben
What is demand like for American made industrial robots? Obviously, you know, people, online, commentators, investors have gotten the memo about the importance of reindustrialization. But if you're just, you know, some American manufacturer like you might not have the money, you might not really care, your customers might not care. Like how resonant is this idea?
- [94:16]
John
Yeah, is, is part of it. People just like knowing that you guys will be stopping by the factory. Things like, like how are. Yeah, basically like how are you differentiating besides like the country of origin?
- [94:29]
Evan Beard
Yeah. So we, our whole focus is training through demonstrations. So we have made, made it so that an average assembly worker or manufacturing worker can train a robot. And with our next software release, they can train an AI model too. And so this is, it'd be the equivalent of if you could fine tune like chatgpt without any kind of software engineering degree. And we make it so simple and easy to show a robot what it is you want it to do and then have the robot go and do it on its own. And I don't none of the other incumbent robots there so far in the past that I don't think they're even beginning to work on this. And I think that there is a real potency to vertically integrating to be able to make the hardware and the AI stack and the software all together because you can make it work better. And so that's what we do and that's what we've been focused on. And I think that it's that combination that allows you to go address all these tasks that otherwise you just can't automate.
- [95:18]
Chris Matarisi
Today.
- [95:19]
John
Are there many robotics led manufacturing robots? I'm thinking like, you know, a PE firm says like hey, there's like a very specific type of manufacturer. They haven't adopted technology as fast as they could. We're going to buy these companies, combine them and you know, let's say roll out standard bots across their whole fleet.
- [95:40]
Evan Beard
We are working with a couple of those types of private equity firms. We have you know, many hundreds of customers now. So there are some of those, it's a lot of just, you know, so we've got small and medium businesses in almost every state. We have iconic Fortune 500s, oil and gas data centers, aerospace, automotive, so really spanning the gamut there. But it's people who are making the things that make America. The manufacturing components, also the end products that we use. And that, that gets us up out of bed because what robots are today are really, they're the tool for us to make our economy and our country manufacturing effects, 1/3 of GDP, 1/3 of all jobs. And so if we can move the needle on those things, it moves the needle for the country. And that's why I've been, I've been to testify to Congress twice in the last few months. And this is, it's really across the aisle there's agreement that we need to dominate robotics as a country in this next. And so I think to your other question, it's very important, I think that all the components are made here because we don't have this supply chain here today. And you don't want to have something that is so fundamental and foundational to the future of this country not made here. It's just not a good, good play for, for our kids.
- [96:44]
Ben
Last question for me. How do you see humanoid robots fitting into our robotic future? How do you think they fit in? Breakdown. I'm always shocked by this, this stat that I think Amazon employs like a million humans but also a million robots or they've deployed a million robots while scaling their workforce into like the tens and of hundreds, hundreds of thousands. And there seems to be some synergy there. I imagine that there's a lot of energy around humanoid robots, but there's so many situations where you want a robot that just bolts to the floor with a lot of power, that can just move a steel beam that a human can't perfectly repeatedly via demonstration learning. But how are you thinking about that adoption curve? Because I imagine there'll be some takeoff off an exponential growth. But give me some nuance of what you're seeing on the ground.
- [97:36]
RJ
Yeah.
- [97:36]
Evan Beard
Our view is for a controlled environment factory field, warehouse that a legged humanoid is. It's going to be more cost, more unique parts, but it's also going to be less efficient. So you just have a worse roi. So we think maybe humanoids are right for the home. But then you have the safety issue like when it's going up the stairs, you need two five year olds to be able to jump on the back of it and pull it, try to trip it. It's the Home Alone test is what I call it.
- [97:57]
Ben
The Home alone.
- [97:59]
Evan Beard
Yeah, yeah, but, but I think we're years away from. Because like you see RL robots flipping with RL and it looks so impressive. And I think the average person thinks like, okay, it's all. Soft robotics is solved. But I think to, to solve the, to, to beat the Home Alone test, it's, we don't, you know, RL is not quite there and it's hard to simulate all the things that a, an eight year old could do to, to. So you can't even do the RL right now. Right. Because we don't simulate all the soft bodies and the meshes that are cutting. And so it's, it's an unsolved problem. I think it's going to be years away from being solved in the home and in the factory we make it. As you said, there's a lot of applications where you just need a static base or maybe you, you, you, you. Maybe some, you need a mobile base and maybe you need one arm, maybe you need four arms. So we have a flexible platform where you can kind of mix and match depending on your needs. And we think that's the best roi, the best performance. But humanoids are better at one use case. Do you know what it is? Raising money.
- [98:57]
Ben
I mean, if we're doing the Home Alone test at scale, we're going to need to massively revamp child labor laws because the five year old, the eight year old, they're going to be working 40 hours a week paying for college, just beating up humanoids in some designed house. This is important work. No, I'm sure they'll solve it some other way. Synthetic data perhaps.
- [99:18]
John
That's a good.
- [99:18]
Ben
Anyway, that's a really good line. That's a good zinger. Thank you so much for coming on the show.
- [99:22]
John
Thanks for having me on.
- [99:23]
Ben
Congratulations.
- [99:24]
John
Yeah, congrats to the whole team.
- [99:25]
Ben
Appreciate what you're doing.
- [99:26]
John
Glad you guys are doing what you're
- [99:27]
Ben
doing and looking sharp. We'll talk to you soon. Have a good rest of your day. That's fantastic. Let me tell you about Shopify. Shopify is the commerce platform that grows with your business and lets you sell in seconds online, in store, on mobile, on social, on marketplaces. And now with AI agents and our next guest is already in the waiting room. We have Nick Fleischer returning to the TVP Ultracom from Sandstone. He's the co founder and CEO. How you doing Nick? Good to see you.
- [99:50]
Nick Fleischer
Great, great to be back. Great to be back. How are you guys?
- [99:53]
John
Great to see you. We're doing great.
- [99:55]
Ben
Overnight success. What's going on? You raised some more money. Tell us about it.
- [99:59]
Nick Fleischer
We raised some more money. Today we announced a $30 million Series A LED by Lightspeed.
- [100:07]
John
There we go.
- [100:07]
Ben
You're moving at light speed. Tell us what's going on. What's the traction, what's the unlock, what's the actual product doing for people day to day?
- [100:19]
Nick Fleischer
Yeah, the product is legal relationship management which means we centralize intake and knowledge for in house legal teams so that they can actually deploy it in AI workflows that are useful. And since we launched about 150 days ago, we've deployed to you know, dozens of fortune 500s and mid market companies across industries like manufacturing, commerce, tech. And we've grown the business by 40x. The team has tripled since we last spoke end of January. And we're excited about bringing this, this tech to legal teams who are really in need. Yeah, we, we like to say that we are playing against a legacy market which is called contract lifecycle management. Very boring tools where in house teams historically store contracts and that's about it. And they are burdened and gated by that piece of tech and we want to help unlock them so they can actually use the great AI that's out there.
- [101:19]
Ben
Now. Your investors haven't exactly sat out the foundation model race. There's been a lot of fud around wrappers and application layer companies, all sorts of derogatory terms thrown around at the same time. We just saw data from Cursor Cognition, a couple other firms that appear to be in the direct path of the AI labs. They're all growing, they're accelerating, they're doing great. How did you frame that question during this round of pitches?
- [101:57]
Nick Fleischer
Yeah, I mean Claude has announced. Claude for Legal OpenAI made a big hire last week in the legal tech space and so they definitely want to play. And I think most of where we see them playing is on quick legal questions, legal research and redlining of documents. And we explicitly said from the start we think redlining and marking up documents is going to be commoditized by the, by the labs. And so we said we want to actually build a workflow tool that's helpful for in house teams. And so, you know, even the most forward thinking companies are paying us one for opinions on what those workflows should look like and how to implement them to the context layer to actually think about, you know, how does each legal decision and relationship map, you know, to everything else and how do we, you know, retrieve that at the right moment so that we're pulling the proper context? When I'm answering a question or looking at a document and then I think the final one is, you know, building a tool that learns from your past legal decisions and can work for not just the stakeholders within your legal team, but also the folks in the business who are requesting work from legal. That's a lot more complex than any chatbot or self built tool is going to be able to do.
- [103:07]
Chris Matarisi
Yeah.
- [103:08]
John
Has token maxing hit the legal community in any way? I would assume no, because there's maybe more like finite amount of like companies aren't, you know, a software company wakes up in the morning and there's like, there's so much software to build. We want to build as many individual features as we can. You know, there's stuff to build internally and externally and all these things. Whereas like an in house legal team is not necessarily waking up and being like we want to 100x the amount
- [103:41]
Ben
of A tech company might go back and say review every line of code in our code base for bugs. A law firm probably isn't going back and saying like review every document we've ever sent and do another red line on it when our client's not paying us. But how have you been interpreting it? The token maxing question, I think generally
- [103:59]
Nick Fleischer
we don't see, see that happening. We don't see it happening at Scale. But you could see a world where people say, hey, can you redline this or review this agreement or answer this question in the 50 different ways that we potentially could and see how it plays out in a negotiation. Right. Can we simulate what the outcome could be here? And so I think we see some people playing with the idea of using AI to do things that are maybe outside of the day to day. But I had a GC the other day on a demo, tell me we are definitely not AI maxing today and we won't be doing it soon. And I think they are much more cautious. And historically legal is seen as a cost center and a bottleneck. I think that's going to change a lot over the next couple months. But they are the last ones to get the ridiculous token limits and ability to go do those experiments.
- [104:46]
John
Yeah, that makes sense.
- [104:48]
Ben
How much effort are you putting into like harness development specifically these days? It feels like that was the unexpected win of the last like six months across Claude code, codex, cognition, what they're doing. People at least a year ago or two years ago thought like the model will be everything, everything's going to be in the model. You're not going to like this whole prompt engineering thing sort of evolved into harness engineering and it's borne fruit for so many firms. Are you focused on that?
- [105:23]
Nick Fleischer
Yeah, I mean one of the things that we'll do with clients is we'll say, hey, take all the integrations that we have that you have connected through Sandstone and connect them with MCP into Claude and OpenAI and just see what one, the quality is of the ability for it to retrieve context and answer your questions. And two, the cost because you're not necessarily routing to the right model for the given task. And so if you do that experiment, you're going to see that, you know, 50x the results on the Samsung side. And that happens with nearly every legal request that hits a legal team within a company. And so a lot of it is around how do we map data and context from other systems and actually go retrieve that, you know, when these questions are being asked or when we're reviewing documents. And then a lot of it is also just the, you know, underlying decisions around what models to be using when
- [106:12]
Ben
typical path in law, at least from my understanding is usually like law school takes forever. A couple years at a corporate law firm, then you can make the jump to in house counsel somewhere. Is AI going to lower the age requirement, the experience requirement for in house counsels? Like should we expect to see 10 person startup, 20 person startups say, yeah, let's get someone who just graduated, they passed the bar, they're a lawyer, but instead of them spending five years at a white shoe law firm, let's have them jump over because we know they're going to be superpowered or how does the dynamic play out on that side?
- [106:53]
Nick Fleischer
Potentially I think we will see some of that. The two, the two pushbacks I would have are one, you want to hire a GC or an in house lawyer who has experience dealing with different types of counterparties so they can actually, you know, go up and have the negotiation and you know, have a good backing and background when they come to those conversations. And I think too you still gain a lot from sort of the hustle and the grind of all of the work that you do in big blind. That will decrease a little bit, but I don't think it'll go away completely next five years. I do think we're going to see more non lawyers on in house legal teams. Like we have some clients who have hired engineers fully to their legal teams and historically legal has had this role called legal ops which is essentially, you know, if you think about rev ops on the, the revenue side, it is sort of the person who pulls everything together, builds the systems, manages the processes. These people are becoming more and more technical and I think we're just going to see a lot more of them. Like, you know, you look at Mercury's legal team, I think it's in the 20 to 30 person legal team range and you know, they have several people doing legal ops. Historically it would have been maybe one or you know, at most two for a 30 person legal team. But we see people focusing on it more and more.
- [108:01]
Ben
That's very cool. What are you tracking on the, on the consumer legal side, like legal zoom, this is sort of out of your wheelhouse, but I'm just sort of interested.
- [108:11]
John
Yeah, well it's more, more interesting to ask you than somebody that's actually building.
- [108:16]
Ben
LegalZoom was like so magical initially it was form filling and then we got Stripe Atlas. But is there more there? I mean people are to go to the models and demand legal advice one way or another, jailbreak them if they have to. But how does that market change? How do you think? What do you think is going to happen in that market? Is there anything interesting you see as changing?
- [108:37]
Nick Fleischer
There's so much opportunity, right. Like those tools are historically very much just mapping you to the right person who can do the services and it should all get disrupted and there's very little investment and focus there. And so, like, if I was starting another company today, like, that's a really great market, and I think it's very specialized.
- [108:52]
Chris Miller
Right.
- [108:52]
Nick Fleischer
You see some popping up on the consumer divorce and family loss, and we'll see that in all the different areas.
- [109:00]
Rob Schroeder
The.
- [109:00]
Nick Fleischer
The other thing is just law is getting more complex and there's a lot more of it because of AI.
- [109:05]
Chris Matarisi
Right.
- [109:05]
Nick Fleischer
All of our clients are telling us they're busier than ever because, you know, the people in the business are negotiating more. They're doing things with AI that they shouldn't be. They're creating more text and more words.
- [109:15]
Ben
Right.
- [109:16]
Nick Fleischer
The business users are token maxing. And so as a result, there's just more legal work.
- [109:20]
Ben
Right.
- [109:21]
Nick Fleischer
And there's more regulation. And so you're going to see people wanting cheaper options for, you know, getting the answers to their questions and getting through cases.
- [109:29]
Ben
Yeah. Tyler Cowen had a funny take on this. There was like, even in the most aggressive ASI scenario, you're going to have tons and tons of government lawyers because we're going to want the humans to write the laws that govern the AI and whatnot. Anyway, thank you so much for taking the time to come chat with us.
- [109:45]
John
Fantastic progress. Congrats on the 40x to the whole team. We're going to hold you to that. The next time you come on, better be a 40x.
- [109:53]
Ben
Ideally accelerate.
- [109:54]
John
Yeah, yeah. Maybe
- [109:57]
Nick Fleischer
400x in 150 days.
- [109:59]
Ben
There we go. He's calling the shot. Calling the shot.
- [110:02]
John
Love it.
- [110:02]
Ben
Have a great rest of you guys.
- [110:03]
John
Congrats.
- [110:03]
Ben
Nick, we'll talk to you soon. And I'll tell everyone about MongoDB. What's the only thing faster than the AI market? Your business on MongoDB? Don't just build AI own the data platform that powers.
- [110:14]
John
John.
- [110:15]
Ben
Yes.
- [110:15]
John
Did you know that Dwarkesh Patel's assistant is the brother of Leopold's fiance's boss?
- [110:26]
Ben
I heard that Dorkesh Patel's hairstylist's uncle went to school with Demis at DeepMind in preschool. And so I thought that was something that needed to be disclosed.
- [110:40]
John
I think you're thinking of as the preschool teacher.
- [110:42]
Ben
The preschool teacher, that's right. Okay. Well, yeah, Newsflash. Silicon Valley is a small place. And in fact, this is so funny because it's like, actually, all the people in AI live in the same house.
- [110:54]
John
That's.
- [110:55]
Ben
That. That's the real story here. It's not that there's some crazy. It's one captain is the brother of the boss.
- [111:01]
John
It's A small house and you're not in it anyway.
- [111:07]
Ben
It's very funny that somebody tried to drop this as a bombshell and wound up writing one of the most confusing lines on. No, it's not AI.
- [111:15]
John
We're still creating new sentence structures.
- [111:17]
Ben
We are.
- [111:17]
Alex Heath
We are.
- [111:18]
Ben
Never before in the English language is
- [111:20]
John
something so confusing before.
- [111:22]
Ben
Before we bring in our next guest.
- [111:23]
John
Our next guest, Ninja 1, we have Paul Graham said, what do you say? I strive to make my writing unsummarizable in the sense that it has so little fluff left in it that if you take any words out as summaries, by definition do you lose a lot of interesting ideas? And somebody just says, well, and they put.
- [111:44]
Ben
Why is this block 3D?
- [111:46]
John
They just blocked out the rest of the text.
- [111:47]
Ben
But why is it 3D with a beautiful light gradient, like, flourishing off of it? Like, I don't understand the. Like, you could have just gone into iOS, put a little black box over this or blur it or something. They chose to put a 3D block there. That's with a blue light and a white light on the right. It looks very aesthetic, this feels.
- [112:06]
John
But Paul Graham fires back and says, are you trying to prove my point or just doing it accidentally? If I'd written just that, no one would have understood what I meant. The only reason people can understand your version is that they can also see the original owned.
- [112:22]
Ben
I wonder is I strive to make my writing unsummarizable? A banger. Do you think that one gets more pose more likes the original? Got 5, 2K likes. Do you think I strive to make my writing unsummarizable? Gets it got 66,000 with this, but that's because it's funny. Anyway, we can debate that more in the future. Let's bring in our next guest. We have pressed from the Angel 1. He's the President co founder. He's in the waiting room. And now he's in the TVP Ultra film. How are you doing, Chris? Good to meet you.
- [112:48]
Chris Miller
Great.
- [112:48]
RJ
How are you?
- [112:49]
Ben
Congratulations. Massive news, but it is your first time on the show, so I'd love a little introduction on yourself and the company first and then we can go into the news.
- [112:57]
Chris Matarisi
Great. First, thanks for having me. I'm a big fan of the show.
- [113:00]
Ben
Thanks so much. It's an honor.
- [113:01]
Chris Matarisi
And I'm a local in LA Canada, so pretty close to where you guys are in Pasadena.
- [113:07]
Ben
That's amazing.
- [113:08]
Chris Matarisi
Yeah, I knew that. But I'm Chris matarisi, founder of Ninja1 and Ninja. We believe the hardest problem in it today is complexity and fragmentation at scale as organizations are stitching together literally dozens of point solutions just to manage, protect, backup and support their endpoints. And that fragmentation costs, it creates cost, risk, poor service, etc. And ninja solves this challenge by bringing all of these operations into one unified, modern cloud native platform. In short, we really just help our customers reduce spend, unify it and simplify work. That's, that's our thesis.
- [113:49]
Ben
Okay. That makes a ton of sense. And I think anyone who's been inside of a big organization has felt that at the same time, point solutions, point solutions are great sometimes. And I'm wondering about how you, how you do the dance between. Well, we're so baked into this, we're so locked into this or only this point solution does this particular strategy or technique for us or solves this problem for us. We just can't rip it out. How do you integrate different point solutions without having people actually need to pull back from the software or the solutions that are providing real value?
- [114:27]
Chris Matarisi
Yeah, I mean, well, first of all, we try to create our own solutions that are all unified together so we can replace all of these point solutions.
- [114:34]
Ben
Wow.
- [114:34]
Chris Matarisi
The average NINJA customer replaces seven point solutions.
- [114:39]
Ben
Wow.
- [114:39]
Chris Matarisi
And I think our whole key, we're a product led company, you know, our thesis is to build the best product, best possible product. So we think we've built some of the best possible point solutions and unifying them together not only saves, you know, IT teams, you know, hassle, complexity, having to manage all these solutions, but the nature of having multiple point solutions. Is there gaps between the solutions and those gaps not only are inefficient, but they create vectors of attack and risk. So by unifying those, we eliminate those gaps. Now if there are great point solutions that we feel like we don't have an answer to, we integrate them into our platform. So our IT teams that use Ninja have one pane of glass fully integrated. Hopefully they've removed 10 point solutions. They're using NINJA to take care of all of their problems. And if there are one or two point solutions, they love that they can't replace a ninja. We have integrations for a lot of them.
- [115:41]
Ben
You have some huge customers, Deloitte, Porsche, Hyundai, Carnival Cruise Line, all companies that people know, Kawasaki, Birkenstock, but at the same time, you have 40,000 organizations on board. So what does the long tail look like? What's the smallest customer you're working with? How are you positioning yourself in the market and winning deals?
- [116:02]
Chris Matarisi
Yeah, I mean, people ask me, who is ninja's Customer. And I'd answer it's every business in the world literally is a potential customer. So for small companies, we sell through MSPs which are managed service providers. They may manage know six local accounting firms and two law firms and a pizza shop and you know, all the way up to the largest enterprise customers. You know, we've got some, some very large, you know, Fortune 10 customers we can't name. But so we can literally service everybody. Yeah.
- [116:39]
John
Talk about the sword.
- [116:40]
Ben
Oh yeah, the sword.
- [116:44]
Chris Matarisi
Game of Thrones fans. So for those of you who watch Game of Thrones, that's John.
- [116:49]
John
Do they have, do they have flash, do they have flashbangs in Game of Thrones?
- [116:52]
Ben
I don't think so. Real flashbangs here on the show. I'm a big video gamer too. So they. What games? What games
- [117:03]
RJ
we play, everything.
- [117:04]
Ben
Okay.
- [117:05]
Chris Matarisi
I actually started a couple companies that were video game companies.
- [117:09]
Ben
No way.
- [117:09]
Chris Matarisi
My co founder is really big into Call of Duty. So we've got Call of Duty.
- [117:13]
Ben
They got flashbacks in Call of Duty. They also got smoke grenades in Call of Duty. UAV are ua.
- [117:19]
Chris Matarisi
I'm more of the strategy games.
- [117:22]
Ben
Are you, are you a counter? Oh, you're, oh, you're more strategy games. Okay, wait, wait, 4x or, or like Age of Empires or are we doing Hearts of Iron?
- [117:33]
Chris Matarisi
You know, I've done Age of Empires, you know, but even games like Hearthstone.
- [117:38]
Ben
Hearthstone's great.
- [117:40]
Chris Matarisi
Yeah, even my partner and I actually started playing Axis and Allies when we were kids. That's a great game. We always say Ninja is one big strategy game. You know, it's just a high stakes strategy game, but it's still fun.
- [117:56]
Ben
I love it.
- [117:56]
John
It's why business is so addicting.
- [117:59]
Ben
Is it getting more high stakes in the Age of AI? Is it because of security risk? Or, or is it a pure accelerant to your business? Like how have you been processing the last few years? It feels like it's a great place to be with 40,000 organizations, 140 countries, lots of opportunity. But what is the shape of the impact actually been?
- [118:21]
Chris Matarisi
Yeah, one thing I'd say is the 40,000. That's 40,000 customers I mentioned. Some of those customers are MSPs that service hundreds of customers. So we might have close to a million business businesses using Ninja.
- [118:33]
Ben
Whoa, that's crazy.
- [118:35]
Chris Matarisi
But as far as AI, you know, we see AI as a real tailwind, you know, that's been accelerating our growth and it's going to continue to accelerate our growth, you know, for three reasons. First, we monitor devices and we've seen over the last several years device proliferation. And I think we're going to continue to see that, you know, laptops, computers, but it's smartwatches.
- [118:58]
Nick Fleischer
Yes.
- [118:59]
Ben
Microsoft launched some, like Smart Badge and like Microsoft launched a desktop device. And like, it's clearly leaking into everything,
- [119:08]
Chris Matarisi
even fast food restaurants. You know, it's not only the computers in the restaurants, it's not only the point of service equipment, the order boards, but now the fryers are endpoints, the grillers are endpoints, and we monitor all of those with AI, robots and even, even more devices coming in. So the more devices, the better it is for us, because that's more devices for us to manage. So, you know, that's one real tailwind. Secondly, we're incorporating AI into all of our products. So AI is making our product more efficient and more powerful and thus more valuable to our customers. And we're also coming up with a number of AI native products that we just released. A vulnerability product, we have a patch intelligence product. And then finally, and perhaps more importantly, we've seen in the news even today, that AI is creating more vectors of attack. So more vulnerabilities are exposed, more things are being need to be monitored and managed because of those vulnerabilities, and they need to be patched quickly. And that makes our product even more valuable.
- [120:17]
Ben
Very cool.
- [120:18]
John
Where's the company based primarily? You said you're in la, but is the company distributed?
- [120:24]
Chris Matarisi
I'm in la, but we're all over the world. Our largest offices are in Austin, Texas, Florida and Berlin, Germany. But we've got offices in Australia, England, Singapore, Spain, Philippines, I don't know, Indonesia, a bunch more global.
- [120:42]
John
I love it.
- [120:43]
Ben
I love it. Well, thanks so much for taking the time to come to us.
- [120:46]
Rob Schroeder
Yeah.
- [120:46]
John
It's great to meet you, Chris. Thanks. Thanks for coming on. And congrats on a massive milestone. I'm sure you'll be back on very soon.
- [120:52]
Ben
Yeah, I don't think we hit the gong. Tell us what, how much did you raise?
- [120:57]
Chris Matarisi
So we raised 400 million uncertainty pensions at a 12.3 billion company valuation.
- [121:07]
Ben
Fantastic. Doubling the valuation since February 2025. Thank you so much for taking the time to come check out that at all. Have a good rest of your day.
- [121:17]
John
Massive stuff.
- [121:18]
Ben
We'll talk to you soon.
- [121:19]
John
Great hanging out. Remarkable ability from Chris to be completely unfazed by the flashbang. You just didn't even. And the smoke grenade. Just another day. Another day, Another day at work.
- [121:34]
Ben
Yeah. Where should we go next? Pat McAfee is negotiating a new deal that can pay him over $60 million a year. For ESPN, this is in the athletic. Big news for one of our biggest role models. ESPN and representatives for Pat McAfee are discussing an extension to his contract that would pay him more than 60 million per year. Deals not completed yet. And if an agreement can be reached, it could be a sliding scale based on his new responsibilities. Mc McAfee, already omnipresent, could be on the air even more with a bigger role in NFL coverage. I'd love that.
- [122:06]
John
And last night he had a like watch along like on actual TV for the Knicks game.
- [122:13]
Ben
That's super cool. Yeah. And he's been brought into the college football ecosystem and been a really important voice there. He's 39, two years remaining on his current contract and he's a college game day panelist and has various appearances on other programs. The makeup of the new deal would be similar in structure. ESPN's viewed the arrangement as a production contract and a separate talent agreement differentiating it from the deals with most of the on air personalities. Hosts a three hour daily show with his crew, the Pat McAfee Show. The first two hours are on ESPN while all three are on YouTube. Very interesting split there.
- [122:51]
John
Let's head over to Verizon CEO Dan Schulman, talk about some of the advantages he's getting. He and Verizon are getting out of AI.
- [122:59]
Ben
Okay, let's see.
- [123:03]
Rob Schroeder
In the last three months we've been
- [123:05]
Ben
experimenting with agents that are replacing some of our customer service reps. And those agents, their customer satisfaction rate is 1,280
- [123:23]
John
basis points better than
- [123:27]
Ben
what we had before. 1,280 basis point increase. That's a thousand basis point lift. Think about that. 1200 basis point lift. That's 12%. If you're putting it in normal terms,
- [123:44]
John
it really does sound way more than 12.
- [123:47]
Ben
It sounds like 100 times as much because the number's 100 times bigger. But as a reminder, Dan Schulman, the CEO, was in the Wall Street Journal recently for preaching straight talk about AI and job losses. This is in April 19th. And he claimed that within the next two to five years unemployment in America would be 20 to 30%.
- [124:18]
RJ
So what is that, 2000 or 3000 basis point?
- [124:21]
Ben
Yeah, 3000 basis point unemployment rate. He warns that advancements in humanoid robots could upend the manual labor jobs still seen as safe today.
- [124:31]
John
It is notable that people outside of AI actually have the most aggressive near term predictions around employment.
- [124:41]
Ben
Yeah, yeah. Well, I think a lot of that is that the actual idea of job losses and whatnot. That came out of, like, the most insidery tech, like the less wrong, the Dwarkesh Patel podcast, where people were having very mature conversations with a lot of caveats, A lot of like, oh, here's my probability distribution for if this happens, then this happens. And if we don't do anything about it, then that will happen. And in reality, there's a lot of things, well, oh, okay, well, if the unemployment rate spikes, we'd cut interest rates, right? Or, like, we'd do like, more federal jobs or, you know, there's a lot of things that could happen. But those, those quotes were taken out of context for where it was, like, in isolation. If only the bad stuff happens and none of the good stuff that would mitigate it happens, you could land at. And then the original thing was Dario saying, 50% of early stage white collar work, which still puts you at less than 10% unemployment rate. And then he revised that down to 10% unemployment more broadly, which is still lower than this. And then people took it and were like, oh, well, if the smart guy who just put up a 10x annual run rate, rain year said it, I should go a little bit further.
- [125:53]
John
I got a 10x out again.
- [125:54]
Ben
I got a 10x that again. And then you wind up with, we saw that iced coffee hour clip of someone saying, what was it, 80% of jobs? I think. Is it 80? 80%? I've heard 50% multiple times. And then Luke Belmar, that influencer, said, oh, 100% of jobs. And so, like you just.
- [126:11]
John
It's notable, though. They never. It's never their job. No, no, it's never their job. It's always everyone else.
- [126:18]
Ben
Because you need to be scared and you need to come work for me
- [126:21]
John
and get by the core.
- [126:22]
Ben
Quit your job now. Come work for me for half what you're making.
- [126:25]
John
One more post before we bring it. Meredith says it's so easy to spot AI writing because it always sounds like it was written by a fedora, silly.
- [126:36]
Ben
Let me tell you about Railway. Railway is the all in one intelligent cloud provider. Use your favorite agents to deploy web app service databases and more, while Railway automatically. Automatically takes care of scaling, monitoring and
- [126:45]
John
see if the Ethinator has.
- [126:46]
Ben
And without further ado, let's bring in Alex Heath. He's the author of Sources the Heathenator. Well, to the show. How you doing, Alex?
- [126:53]
John
Always scooping, not afraid to use AI. Do you ever throw on the fedora when you're gonna.
- [126:58]
Ben
Oh, he has that baked into the prompt. Don't talk like a fedora. It sounds great.
- [127:02]
Alex Heath
Don't talk like a fedora, guys. Although I am excited to deliver the first Fable newsletter later today or tomorrow.
- [127:10]
John
But you had the leak. You had the leak or the scoop? Yesterday you were the first person I saw in the media.
- [127:18]
Alex Heath
Confirm in sources we trust, gentlemen.
- [127:22]
John
But yeah, and I honestly use sources as an example where you could use all the AI in the world. You could say I don't even touch my keyboard. I just sort of dictate to the AI the things that I know and then I. And it publishes and it wouldn't make the product worse. Right. Because like I'm coming to you for like facts, like new. New information plus your takes on like how you think about something and however it gets into substack doesn't really matter to me.
- [127:52]
Ben
Yeah.
- [127:53]
Alex Heath
So anyway, you're saying you don't like my beautiful prose.
- [127:55]
Ben
I love your prose.
- [127:56]
John
No, I. I miss. I think it's great. But I'm just saying like. But that's not why I subscribe. Because of who you are and the access that you have and the insight. But I don't care if it was you clacking the keys.
- [128:12]
Alex Heath
It's funny you bring that up. I've been having some conversation with open claw pilled folks recently and they've been telling me to build something like it. I shouldn't maybe even be saying this on air. Maybe I'm giving away some alpha. But build a kind of real time MCP hook into my brain essentially to just deliver infinitely personalized agentically delivered media and reporting. What do you guys think about that?
- [128:35]
Ben
Actually personalized. So like.
- [128:37]
Alex Heath
Well it would be personalized by the person's claw agent, what have you. Right. Because the idea is the way that I decide to present a story is one way. But there may be things in like an hour interview that I don't even put in the story that may be hyper relevant.
- [128:52]
Ben
Yeah.
- [128:52]
Alex Heath
Especially if it's delivered agentically.
- [128:54]
Ben
And. And also that actually does. That does feel like the more modern instantiation of the sub newsletter list. Like you go to Bloomberg and you're like I want the markets newsletter, the tech newsletter, but not the politics newsletter. And with an MCP server or some sort of AI intermediation, I could say like give me the WWDC scoop, pass on whatever other scoop is less interesting to me. Like you know all my preferences. And then you can pump out a lot of different stuff and find very high delivery rates based on what I'm actually interested in at a particular time.
- [129:29]
Alex Heath
Yeah, I mean I have a throughput problem of getting reporting into the world. Right, sure. And so it's a good problem to have but what it means is like WWDC yesterday is a great example. I went to that tech talk that Craig Federighi and all the Apple execs did. I broke out some stuff that seemed interesting to the widest possible audience but you know there's a lot there. It was like an hour of stuff and like what if you just had direct, you know, IV drip access, you know, for your agent to my reporting and the rooms I'm in.
- [129:54]
Ben
Yeah, I don't know.
- [129:55]
Alex Heath
We'll see.
- [129:55]
Ben
Yeah, yeah, I mean I'm sure you'll be the one building time to be experimenting anyway on wwc. What like what was your reaction? What was your expectation going into this and then like what were the biggest announcements that stuck out to you specifically because I. Yeah, I mean that's really what I'm coming for is I want, I want to you your interpretation. Even if you give me, even if you run an LLM to clean up the final language. I want your taste applied to this question.
- [130:20]
Alex Heath
I think they finally have a Siri that works. It's arguably what they should have shipped two years ago when they had that big trailer with I think it was like people on an airplane and it was doing all this agentic stuff on the phone that was like wow, it's crazy. Siri can do this. It didn't do that. Right. They had to basically apologize for it. They rebuilt the Siri stack to be. I think their word was expandable so more modern, more AI native and now actually this morning I was in Cupertino for a hands on with the new Siri. So I got to see it in depth and ask questions about it and it is a step forward but there's basic things about it that if you're claw pilled or you're using codecs or in chat all day you're still going to be like eh. For example it doesn't have persistent memory so it's not. It kind of forgets everything in each query. They haven't built that yet.
- [131:10]
Ben
I wouldn't have expected that. Hold on. I wouldn't have expected that because it feels like that's a source of like memory is not like the number one feature that people benchmark the current models around. They're like computer use MCP integrations and like can I set codecs or cloud code to run for like nine hours? And it comes back with something really polished and Just does. Writes amazing code. The memory thing, it feels like personal super intelligence feels very Apple. And they have all of this. That's. That's very surprising to hear. Anyway, what else it is.
- [131:46]
Alex Heath
I think they're moving very slow and they're very worried about the privacy aspect of all this, which I don't know if people really care about this with regards to AI. They seem to think they do. I think we'll see. Maybe there will be be a Cambridge Analytica moment for AI and then that will wake everyone up. I don't know. They're seeming to think that will happen. There was a demo you brought up computer use where they were showing the new Siri and Apple Intelligence powered by Gemini and all that stuff on a Mac, renaming folders and renaming files inside folders. And if you use computer use in Codex or Claude Cowork, you can do this. It's very easy. You can abstract it away from a prompt, but you can't actually even do it via a prompt in Siri. You have to do it via the menu right click, have Siri do something. Or do it through shortcuts, which, like, I don't know if you guys use shortcuts. I don't use shortcuts.
- [132:35]
Ben
The last shortcut I used was to remap Siri to ChatGPT actually. Like in 2023.
- [132:40]
John
In January of 2023.
- [132:41]
Ben
Yeah. It would take whatever I said and fire it off into the API and spill it back to me. It was sort of.
- [132:48]
John
Yeah. I mean, I feel like one of the challenges for Apple is like, software is moving more quickly than ever and the Apple kind of ethos and approach this annual release and like, let's make everything perfect and all this stuff. And it just feels like a really, really tough challenge to be able to. And it's not to say that they need to be at the frontier of everything. Right. Like all anyone's been asking for is just like a usable version of Siri. Like, I haven't prompted Siri. I haven't gone to Siri for anything in.
- [133:24]
Alex Heath
I use it to set timers.
- [133:26]
Ben
Set timers.
- [133:27]
John
That's a good, that's a good use case weather. But even then I'm so. But, but anyways.
- [133:34]
Ben
But getting better.
- [133:36]
Alex Heath
So the other, the other big thing about this new series is they have really, really nerfed the Chat GPT partnership. It's, you know, that was a big thing a couple of years ago, right. And you have to prompt it each time to send something to chat. You have to do it via Text. So there's not even like a software UI element of this anymore. So I was actually thinking about like meta narratives for WWDC this year. And one is that, you know, the Google partnership obviously, which we could talk about. But the other is I really think there's this. OpenAI is kind of like the new Facebook to Apple where they work together closely. If you guys remember when Steve Jobs and Mark Zuckerberg integrated Facebook and iOS, Facebook had a bunch of its press challenges, privacy challenges, et cetera. And then they just kind of drifted apart and then it became this messaging war. And you started to see that bubble up yesterday with Craig saying stuff about like we're not going to have ads or just these subtle hints that they have like ideologically drift away from, from OpenAI and that partnership is not gone. Well, that was another big thing that, that stood out.
- [134:39]
Ben
So on the, on the actual integration
- [134:40]
John
that's somewhat, I mean somewhat to be expected, right? Like you can't like hire maybe John, you can't hire, you can't hire like Johnny and say like we're going to, we're going to create a bunch of devices and poach a bunch of people and then expect like it to all be good. And in so many ways it makes sense for a Google and an Apple.
- [135:00]
Ben
Google and Apple have been working together. They have some perfectly for years at the search partnership. This feels like a search partnership, enemy
- [135:06]
John
of my enemy is my friend kind of thing.
- [135:08]
Ben
Yeah, I think so.
- [135:10]
Alex Heath
They know Google well. And a bunch of Google people have come into Apple to reboot the AI strategy. And the whole point of that, very unique, which Apple's never done this by the way. And on the record, like post keynote thing with their execs, it was very unique. We got in this tiny theater, got to ask Craig and the execs questions. He did this like I called it in the newsletter, I called it AI101. He had this like almost whiteboard like graphic where he was explaining AI stacks, how they work normally, how Apple's works and really doing a lot to try to show that yes, they're distilling on Google, but they really control everything. It's insanely post trained on everything Apple wants. It's not going to give the same kind of responses that Jim and I would in a Google Surface. And I think that was the point of that entire thing was to just say like, yes, we're working with Google on AI, but we are not actually using the Gemini product.
- [136:01]
Ben
I wonder if it's going to have its own stylistic Flow.
- [136:03]
John
You got to do a salami bench where you tell Siri people, if you tell Gemini that you've had a kilo of salami, it will tell you to dial emergency services 999.
- [136:15]
Alex Heath
You've tried this personally, Jordyn?
- [136:17]
John
No, no, but there's been some chatter about it.
- [136:21]
Ben
Yeah. I wonder if it'll have its own turn of phrase, like it's not this, it's that or you're absolutely right. There's like all these different phrases that each different model sort of like leaves
- [136:31]
John
its touches on what's happening. What about there's only a certain set of devices that the new Siri is going to work for? I think there's, it's anything that Apple
- [136:41]
Alex Heath
intelligence runs on right now and then
- [136:44]
Ben
the latest models can do or the latest phones with 12 gigs of RAM can do the, like the highest tier. And then beyond that you go into the Apple private cloud, which is Nvidia GPUs in Google Cloud platform, which is like their own thing. Have you dug into like where in Google Cloud it's going? Because they just did that SpaceX for Colossus. And that feels like, and that feels like, not perfectly in line with like Apple's commitment to, to environmental concerns.
- [137:14]
Alex Heath
I think that's going to be a way slower ramp than people realize. So for to start, the new Siri is only in English, it's not in China in the eu and they're doing a beta invite wait list approach.
- [137:26]
Ben
This makes so much sense through the year because I was looking at like a billion users. If a billion users are even just asking for set a timer and it's doing inference, like that's a ton of tokens. And we seen the ramp at Google as they've stuffed everything everywhere. Like, yeah, they're just going to wind up with a big token budget at some point. But it sounds like it's a wall crawl run strategy.
- [137:46]
Alex Heath
I think it's a slow ramp. They were showing us some of the new photo stuff, photo retouching, removing things and photos. And it would take it like 25 seconds to, you know, change the backdrop of an image. So they're doing cloud inference, but they're again, it was like even in the demo in Apple park yesterday on launch day, it was like slow and there were bugs because they were like, yeah, our servers are melting. We're getting way more interested in this than we thought. So I think they're going to take a very slow approach. But that was actually the number one question that people were asking was what are the inference costs of this? How is Apple doing this and like how big are they actually going with gcp? But I think it's going to be a slow ramp.
- [138:22]
Ben
Yeah, because I mean if you look at the like leaked financials from the AI labs, like we're not in this paradigm of like training is the only cost. Like inference does have cost. It does Capex associated with it. And Apple's been telling a very beautiful story of like, hey, we're sort of an AI winner without any of the capex. But if you start offering inference, you're going to have a Google cloud bill. You're going to need data centers, you're going to need clean data centers that take longer to build and all of that is going to show up at some point. But I think the hope is that they're just not jumping the gun. They're not stretching themselves. They have the cash, they have access to the debt market.
- [139:00]
John
What's the latest on Liquid Glass?
- [139:02]
Alex Heath
Liquid Glass, you know, they barely talked about it and they didn't talk about the Vision Pro really either. Which is where you see Liquid Glass kind of at its fullest. That product set certainly on the backdrop.
- [139:15]
Ben
I know, I'm the biggest user. Oh, you are. I love the Vision Pro. I watch movies in it.
- [139:21]
Alex Heath
You use it on a plane.
- [139:22]
Ben
Yeah. But mostly like you're that guy. I'm that guy. Yeah, I know. I love it. Is the anti brain rot device for me. I put it on and I'm not on my phone and I just watch a movie. I watch Citizen Kane. It's a movie that would be like, you don't want to watch Citizen Kane on your phone. You don't want to watch it. And even if you watch on the tv, you're going to get up, go get popcorn or like check your phone,
- [139:43]
John
somebody's going to text you, laughing at you.
- [139:46]
Alex Heath
Because it's a slowly watch Citizen Kane
- [139:48]
Ben
from start to to finish on my Apple Vision Pro. Lawrence of Arabia too. Lawrence of Arabia. It's a three hour movie. It's a long movie. It's hard to make the time to save.
- [139:57]
John
John, do you mind if we pull up an image of you on a plane using a Vision Pro?
- [140:00]
Ben
Do you actually have one?
- [140:01]
John
Ben has one.
- [140:02]
Ben
Wait, really?
- [140:03]
Alex Heath
No way.
- [140:04]
Ben
No way. Yes.
- [140:06]
John
Yeah, let's pull it up.
- [140:07]
Ben
Yeah, you can pull this up. This is hilarious. When did this happen?
- [140:10]
John
This was a year ago.
- [140:13]
Ben
Yeah, yeah.
- [140:13]
Alex Heath
Were you in the ad? The Apple ad?
- [140:15]
Ben
It should have been I'm a believer. Put me in ad.
- [140:17]
John
I'm Pull it up, boys. There we go. There we go.
- [140:21]
Ben
I'm that guy.
- [140:23]
Alex Heath
Are we even in business in this? Like, what does this see?
- [140:28]
John
That could very well be. This is economy premium, I think.
- [140:31]
Alex Heath
Economy premium.
- [140:32]
Ben
Okay. I spent my last dollar on the Vision Pro. Okay.
- [140:36]
Alex Heath
Okay.
- [140:37]
Ben
I don't know what's going on in this photo.
- [140:38]
RJ
This is a long time.
- [140:39]
Ben
This is fun.
- [140:40]
Alex Heath
It's incredible.
- [140:41]
Ben
Anyway, they did launch a feature for liquid Glass. You can turn it off now. There's a slider that's basically an off switch, which is very funny, but listen to your users, I suppose.
- [140:51]
Alex Heath
Yeah, it took a backseat. I mean, everything was all Siri. I've actually never seen a keynote so focused on one product. Apple usually does this State of the Union across all the platforms and you get 15 minutes on CarPlay, you get 15 minutes on Vision Pro, all that stuff. It was basically an hour of Siri.
- [141:07]
Ben
Mm. Have you been tracking any backlash to spatial reframing? Spatial. That's what it's called, right?
- [141:15]
Alex Heath
Like, because I saw that up close in my briefing. Yeah.
- [141:19]
Ben
Oh, people, like, were booing there or something.
- [141:22]
Alex Heath
No, no, no, I didn't.
- [141:23]
Ben
There was no boos.
- [141:24]
Alex Heath
I'm saying I was in a briefing where, like, a product manager was showing it to us and letting us play with it. It's pretty cool. I just saw it. Yeah. I mean, Apple is like, they said, we're not gonna let you put a Dragon in a photo. Like, we wanna try to stay real to the essence of a photo. But we know that there are ways that a photo could look better with AI and whether that's reframing or whatever. But, yeah, they're not going to do, you know, mid journey level, Gemini level, nano, banana level stuff.
- [141:51]
Ben
Yeah.
- [141:51]
Alex Heath
But it is this whole, you know, idea of, like, what is a photo
- [141:55]
John
for the Dragon community.
- [141:57]
Ben
Yeah, yeah, yeah. If you're into. If you're into live action, role playing, LARPing or the Renaissance Fair, like, you're.
- [142:03]
Alex Heath
You're an Android user back.
- [142:05]
Ben
Yeah, you're an Android user probably. But, yeah, I mean, it is interesting that, like, there's a backlash to AI. Apple was like, they missed AI, but, like, the silver lining there is that everyone sort of sees them as like, they're holding the ground, they're saying no to put an AI everywhere. And it's like, actually they maybe just didn't have the people in the right places at the time. Like, they totally would have loved to do it. They actually acquired an AI company in 2011 called Siri for hundreds of millions of dollars. They were ready to go and they just sort of like missed on the rollout. But now I did see a small bit of backlash to the spatial reframing, saying that I know Apple as the camera company. What you see is what you get. The images aren't over processed and so this is like they're leaning into AI too much. But I don't think it'll go anywhere. I think it's pretty moderate.
- [142:52]
Alex Heath
You can already remove things in the photos app with the retouch tool or whatever, can you?
- [142:59]
Ben
Have you tried to remove something from the image with the iOS?
- [143:02]
Alex Heath
Clearly, clearly you have and have not been able to. So I guess maybe I'm.
- [143:07]
Ben
It looks like a content aware fill attempt from like a few years ago. It is not at the level of any of the frontier AI image models. The new version is flawless though. It is good. So they fixed it.
- [143:18]
Alex Heath
It's not flawless. They showed us doing it to a boy who was covered like his leg was partially covered and they took something away and it made his leg super long, like really awkwardly long.
- [143:27]
Ben
Maybe they're promoting heightenexing. Leg extension surgery is very popular these days. You never know. Subtle messaging. Well, speaking of that, I wouldn't want kids getting body dysmorphia from editing their photos on an iPhone inappropriately. What did you think of all the privacy, parental control talk? It felt like that had a remarkable amount of airtime in a relatively short keynote. Why do you think they're doing that? What was the outcome? How was it received? What do you think comes from.
- [143:58]
Alex Heath
Yeah, there was this rumor in the industry, a lot of the bigger apps in the App Store, I was hearing it from their executive last year that Apple was going around and suggesting that it was going to charge basically create a new service line to verify it. So basically have these developers somehow pay to be a part of this system. I don't think that ever materialized or at least they haven't announced it. But you see the regulation on this topic and how it's heating up everywhere in every big country and it was kind of funny like the day of the keynote. You know, every year there's protesters outside of Apple park around the keynote. One year it was about like it was around the actors strike and there were. It was like a services related thing.
- [144:41]
John
Cook's comp too, I think.
- [144:42]
Alex Heath
Yeah, one year was around that. This year, this year was around kids safety. So there was like these child safety advocates that were out there with their bullhorns like saying this stuff. And then Apple went ahead and did what I would consider like the fullest suite of kids safety features of any platform on that very day. Which I think kind of shows that maybe it's just an issue they see really bubbling up and becoming really huge and trickling down from Meta and the social platforms and those huge trials that we've seen in recent months to the platform layer. And you know, all the apps will say, oh, we want Apple to verify, you know, the age. Because it's a lot easier than all of us doing it on our own and not having a shared consensus. So I think the industry is actually loving this because and it depends on how much if Apple is going to charge or not. But I don't think they are at least in what they announced. But it seems like a win win. I mean the device should be verifying age. It's an obvious thing they can do. They already have the secure enclave, they can store it safely. Why would they not? So I don't know. I actually really thought that was a good move on their part. And maybe they are just trying to get ahead of things too.
- [145:49]
Ben
Kids, get ready to learn Linux if you want to browse the web without your parents approval.
- [145:54]
Alex Heath
That's always been the case.
- [145:55]
Ben
I think this is good. I think it's good to have the parental controls and then the kids will
- [145:59]
Alex Heath
hack their way around.
- [146:00]
John
Did they talk about ads at all? Besides that small shot around that they took because they're bringing ads to Apple Maps, they have ads.
- [146:10]
Ben
You got to imagine that they'll put ads in this thing eventually.
- [146:13]
John
Why not? The idea that. But they really can't take the stance that ads are universally bad or they would have to self identify as a bad actor.
- [146:25]
Alex Heath
I mean when you look at the new Siri app, right. Which I looked at this morning and played with, it is a very, very bare bones, I would say almost knockoff of ChatGPT.
- [146:35]
Ben
So a lot of surface area for ads.
- [146:37]
Alex Heath
Lot of surface area for things. I mean there's barely anything in there.
- [146:40]
Ben
Sure.
- [146:41]
Alex Heath
I don't think they'll do it anytime soon.
- [146:43]
John
Like the idea like they're putting ads in maps. So you will search something and it will pop up. Like the first result will be for somebody that paid to be there and then to be like, oh well, we would never put ads in, you know, in a, you know, web search experience. It just, it doesn't really, it doesn't really make sense.
- [147:04]
Alex Heath
Well, also working with Google, the largest advertising company on earth to help supply your AI strategy. Yeah, there's, yeah.
- [147:11]
Ben
I mean one of my initial guesses that for like the longer term is that eventually the dollar flow would flip. So right now Google pays Apple for the default search in Safari to be Google because they monetize Google searches with
- [147:27]
Alex Heath
ads and I, they give them a percentage of revenue. Very, very important distinction.
- [147:33]
Ben
Yes. And it's huge. And so my prediction was that eventually Siri would be so integrated with Gemini that there would be ads in the Gemini stream and Gemini tokens would be monetized because the cost would drop and the monetization would increase. And eventually Google would be paying Apple for the right to be in those query streams that then are monetizable with links or affiliate links or ads or whatever they want to, to do. But I think all of the big tech companies are being, you know, walk, crawl, run on this. But so maybe it's.
- [148:10]
Alex Heath
I thought that too John, but I don't think that's the strategy at all. I think Apple sees, I think what the smartest thing I heard, I think it was Dave Morin. He told me I could quote him. Shout out Dave Morin. I saw him after the keynote. Was that, yeah, shout out Dave was that Siri is the harness. So Apple's OS and Siri are the harness and they've built this flexible new infrastructure underneath that could be a future model. They were hinting, but not saying explicitly in all my briefings that there will be future models that you can choose from or plug into this. And Google right now is their best partner for a myriad of reasons. We've talked about some of them, but they want to do all the post training, they want to do the reinforcement learning, they want to make it appley and they have their foundational model strategy and they're not at the frontier, but I think they want to be eventually and they're getting that flywheel going and I think this is potentially just a short term thing to them, owning their destiny on the AI side more. I think they feel like they finally have the pieces in place to get there. It's still going to take probably a couple years. As we see with Meta, rebooting a lab is no small feat. You have to get the flywheel going. I think they're on that path now and they feel good about it. But I thought what you said was correct, right, that it was going to be just Gemini tokens that they monetize like search. And I don't think it's going that direction at all actually.
- [149:30]
Ben
Interesting.
- [149:31]
John
Would you expect Apple to make an AI related acquisition at north of a billion dollars in the next Year looking
- [149:39]
Ben
at thinking machines a year ago, I
- [149:42]
Alex Heath
thought they would have already done that by now. They looked at Perplexity. Yeah, they looked at thinking machines.
- [149:46]
Ben
If they got this far, what do they need for?
- [149:49]
Alex Heath
So they have this web knowledge graph now that I think was what the Perplexity acquisition would have unlocked for them. So they already went and did that. So I don't know what value perplexity brings them now. I don't know what thinking machine strategy, frankly, even is for it to make sense for Apple, much less like what thinking machine strategy is. So, yeah, I guess I just don't get it. So I think. I think they could make an acquisition, but it would be talent based. I don't think there's anything that's going to be fully resetting the strategy or, like, foundational, like an Oculus or something like that. I mean, I think that moment's kind of passed. It feels like, yeah, it feels like all these companies are huge and mature and you're not going to buy Anthropic. You know, even if you're Apple, you can't afford it and they wouldn't sell, so you have to go out on your own.
- [150:34]
Ben
Yeah, yeah. Makes sense.
- [150:35]
John
Yeah. And if you look at the history, it's like Beats was like, I think their biggest acquisition ever, but it was like, pretty conservative from a revenue that do.
- [150:44]
Alex Heath
It got them some, like, Dr. Dre ads.
- [150:46]
John
Well, yeah, but it's just like they just. Their style is like, let's buy. You know, let's do like. Like, effectively, Aqua Hires get really great people on board. Yeah, but the issue is that all the. All the great teams get marked up so quickly. Billions now that they get kind of. They're no longer that great a candidate for Aqua Hires because the investors on board are going to say, like, yeah, I gave you guys $200 million to take a big swing. Just take a big swing.
- [151:15]
Ben
So how open do you think to close it out? How open do you think the Siri ecosystem will be over the next year? Because I'm optimistic that the base Siri model will be good on launch. But even if I put aside the ChatGPT relationship, I imagine that Gemini is going to launch three new models that are better in Q1, Q2, Q3, they're going to be launching much more rapidly. And if I just want to switch over the default model to something that's more frontier, I saw in the Siri app, I could select from the drop. It was unclear if that was a default or something that I have to do. Per query. And then there was a big question in my mind about will I be able to effectively remap the side button to just say, hey, Siri, AI fine tuned on Gemini 3.1 or 3.5 or whatever, that's great. But 4.0 just came out from Google and I want to use that when I hit the button. Do you think that'll be an option?
- [152:22]
Alex Heath
I think they want to get there to some degree. But the question is how much this harness needs to be custom fitted for a specific model. On how plug and Play these things are. I mean, we just saw with Fable today, right? This is kind of a new paradigm in a model and would that work in a harness like Siri as it exists today? Maybe the future of these models is actually being built in sync with the harness that they're meant to exist in. So I don't know if models will exist like, like search engines in the sense of like plug and Play like that. The products are just so integrated and models are changing the way we think about operating systems with agents. Right. So could you maybe to some degree. I think they will do something like a half measure there, but I don't think it's going to be quite as full featured as you think. But you did kind of hit the nail on the head which we can end on this. Like the new Siri, it's up to the developer to opt into this new Siri in the sense of it can see everything on the screen if it's like basic text and photos, but it can't understand a UI unless the developer opts in, which means you're basically letting Siri take all your data. If you're canva, it's like you're giving it up to Siri and it lives on device and they say it's private and Apple won't train on it, but you're still kind of fundamentally doing that. Right. And so that's going to be the big question is will the metas of the world, will the openais, the anthropics, open their apps up to Siri of their own accord because the users demand it or they think it's a good business strategy. But then you're giving that, that data, that valuable UI to Siri. So I don't know. That's going to be the next thing to watch, I think in the coming months.
- [153:52]
Ben
Very fun. Well, good time to be a subscriber of sources. So go subscribe already. It's always a great time, but it's the best time ever.
- [154:01]
John
Every day Love catching up with you, Alex.
- [154:03]
Ben
Always great.
- [154:04]
John
Great to see you.
- [154:04]
Ben
A couple weeks ago. Enjoy the west. Safe travel, Apples. We'll talk to you soon. Have a day. Goodbye. Well, whether you're bullish on Apple or bearish of Apple, go express it on public.com investing for those who take it seriously, they got stocks, options, bonds, crypto, treasuries and more with great customer service. And our next guest is already in the waiting room. We have Rob Schroeder from Vinyl Equity. He's the co founder and CEO. Rob, how are you doing? Welcome to the show.
- [154:34]
Rob Schroeder
Hey guys, thanks for having me. I appreciate it.
- [154:36]
Ben
Thanks for hopping on. Appreciate that. First time on the show. Why don't you kick us off with an introduction on yourself and the company?
- [154:45]
Rob Schroeder
Yeah. So my name is Rob Schoder. I am the founder and CEO of Vinyl Equity. Vinyl Equity is a transfer agent for public companies or soon to be public companies. We've been around since 2022. We just raised or just announced our series a raise today.
- [155:01]
Ben
How much, how much did you raise?
- [155:05]
Rob Schroeder
$20 million. We're led by Jump Cab.
- [155:10]
Ben
Fantastic.
- [155:11]
John
Okay, explain transfer agents like I'm five years old.
- [155:16]
Rob Schroeder
Yeah, it's a good question. Most people have no idea. So you could think of Transfigen as doing for the public markets what Carter has done for the private markets. And so when a company goes public, they have to have what's called a master security file and it is the basis of their equity ownership. And so transfer agents for a long time have maintained these records. You could think all the way back to the beginning of Wall street. Used to have somebody who take a paper stocks check trade on Wall street and they'd walk all the way down to the transfer agent to record, record that transaction on their ledger.
- [155:53]
Ben
It's interesting. I put my whole life savings in SpaceX and the guy said we didn't need to use a transfer agent. And then I saw him on Instagram, he's in Miami. And then I think he was in South America or something.
- [156:05]
John
Yeah, and the stock certificates look like Monopoly paper dollar.
- [156:09]
Ben
I'm realizing now I might have needed a transfer agent.
- [156:13]
Nick Fleischer
Should have called us.
- [156:14]
John
But how, how have they modernized to date? We're no longer, no longer walking paper stock certificates around the trading floor.
- [156:28]
Rob Schroeder
Historically they haven't. Yeah, long and short of it. So I actually, I started the business after running portfolio operations at Angellist. And we did, I think 200 plus IPOs in the couple of years that I was there out of the portfolio. And every time we worked for the Transfer agent. It just felt like we were sending paper around all around the country just trying to get our shares into a brokerage account. So tons of market exposure, post lockup. And you know, as you look at the market today, it has changed drastically in the last six months. I mean, even just in the last six months, you've got tokenization, you've got these massive IPOs that have cap tables that are substantially more complex than they've ever been before. And user expectations have shifted. And you guys have talked about it, you're buying SpaceX shares down in Miami from people on the street, but you're also expecting to get those shares instantaneously. And we live in a world today where you can get packages delivered in less than a day, and yet from the transfer rate into your brokerage account, by and large, you can't get your shares delivered in 24 hours. And so vinyl was built to solve that problem effectively.
- [157:43]
Ben
Quick question, the name. Why vinyl transfer agents keep records? Oh, okay.
- [157:50]
Rob Schroeder
We spent a lot.
- [157:51]
Ben
Vinyl's booming.
- [157:52]
Rob Schroeder
We spent a lot of time trying to figure that out. Yeah, that's right. Yeah, we're back, baby.
- [157:57]
John
Yeah. So with, yeah, this space X IPO is insane also just because of all the layer.
- [158:03]
Ben
There actually are a lot of unwind.
- [158:06]
John
And part of why solving this is so important is like, you know, the way markets feel like they're at least in this, whatever part of the cycle we're in right now, such violent movement, like 24 hour delay could meaningfully impact, meaningfully impact your, your returns. How, how are you guys like, what does your go to market look like at this point? Like where, where do you guys kind of like take the, take the baton? I don't know if that's, that's the right way to think about it.
- [158:37]
Rob Schroeder
Yeah, we, we generally come on board with clients as they're getting ready to go public. So they're thinking about their IPO in the, in the context of an ipo. And so if they're making a switch from cap table administrator to a plans administrator, we think that's a really good time to align. But there are companies, depending on their readiness, that will bring on a transfer agent, you know, two months before an ipo, we help facilitate the transfer of that information seamlessly. We do use APIs. We are an API native business and so it is fairly seamless and straightforward for us to ingest those records. When we get our company stood up, we actually give them a staging so they can go and test all of the data, make sure it's Correct. And that's an anomaly in the world
- [159:26]
Chris Matarisi
that we live in.
- [159:27]
Rob Schroeder
And so, you know, for a very long time this has been a just in time industry that's operated on paper, that's operated very reactively. And we want to pull all of these motions forward so that companies can go into the public market markets with certainty. I think what you guys are referring to is the liquidity process and the transfer agents involved in the liquidity process. I talked to a family office the other day who told me that on average they see, they see shares show up post lockup nine days after the lockup is lifted. And those shares will often see 10% Delta. And when in the pricing, when from when the lockup was lifted. And so our ambition is to make a more fluid capital markets from the point of issuance to delivery. And by being proactive and having more nimble systems, we're able to do that.
- [160:22]
Ben
Little bit of a somewhat related question. Bill Gurley hit the timeline earlier last night. Last night, 8pm he said if someone is telling you you are subject to a lockup agreement and your firm signed nothing with the lead underwriter, they are either lying or misinformed. Lockups are a silly contract with the underwriter primarily to help engineer a secondary. Prove me wrong. All correct. He turned off reply. So you can't prove him wrong necessarily. But he said also it's never been enforced. The underwriting bank would have to sue for breach of contract. He asked AI the best example of lockup breach. Couldn't find one. Try it yourself. Find a counterpoint. Please share. I want. Can you explain what he's talking about? Do you have any idea what he's getting at? Is there any truth to this or do you want to push back and prove him wrong?
- [161:14]
Rob Schroeder
So lockups are agreed on with underwriters for the purposes of smoothing out market entry and smoothing out volatility. For all intents and purposes, you know, as he refers to it as sort of an abstract or created construct, it is right. It is agreed on with the company as a way to manage the inflows and outflows of securities into the markets. The vast majority of companies,
- [161:42]
Ben
you know,
- [161:42]
Rob Schroeder
don't see the kind of demand that we're going to see and probably the kind of volatility that we're going to see over the course of the next several months. And so, you know, you see some creative constructs that have been proposed in the IPO that we're going to see on Friday and then presumably some of the other IPOs come down the pipe.
- [162:05]
Ben
Then also the company is signing a contract with the underwriter, the bank. The company probably does have pretty solid legal recourse over the employee stock option pool, maybe the founders or current executives. But what he's talking about is being an early stage venture capital investor who maybe didn't sign many contracts that relate anything to lockups and so he doesn't necessarily need to sign on. Of course, a good underwriter might go around and say, wait a minute, there's a VC who wants is heading for the exit who owns 20%. Like let's bake that in, get them to sign a contract. But he's saying if I didn't sign anything, I'm selling on day one. I guess something.
- [162:48]
Rob Schroeder
But yeah, by and large you're going to find that liquidity is pretty tightly held or gated by the transfer agents in the brokerage.
- [162:57]
Ben
Sure, sure.
- [162:57]
Rob Schroeder
And so when those lockups are agreed to, they. They tend to get managed pretty tightly.
- [163:03]
Ben
Well, thanks for helping break it down. I know it's a. Yeah, it's a hairy debate, but it helps contextualize these things. I really appreciate it, Jordan. Anything else?
- [163:11]
John
Thank you for modernizing investment capital flows.
- [163:15]
Ben
Thank you for everything you do.
- [163:15]
John
Truly important work.
- [163:17]
Ben
Thank you.
- [163:18]
Rob Schroeder
Yeah, yeah. It's an area that I think nobody's really thought about for the last, I don't know, forever.
- [163:24]
Ben
I'm glad you are.
- [163:25]
Rob Schroeder
And we're excited to be thinking about it here. So hopefully everyone will get their shares more effectively.
- [163:31]
John
Yeah. Good problem for the Angelus mafia. I'm sure those 200 IPOs that you went through were stressful.
- [163:39]
Ben
Well, thank you so much for coming on the show. We'll talk to you soon. And congratulations on.
- [163:44]
John
Congrats to the team.
- [163:45]
Rob Schroeder
Appreciate you guys having us.
- [163:46]
Ben
Goodbye. What else is going on in the timeline today? The system prompt already leaked for Siri. Is this real?
- [163:58]
John
Hard to tell if it's real, but you know what is real?
- [164:02]
Ben
What is real?
- [164:03]
John
A Colorado man has been arrested alongside his passenger for allegedly driving more than 130 miles an hour through northern Colorado. He was doing a Cannonball Run, John. And I wanted. I'm just gonna assume that this is someone in the audience. They're probably not watching right now because they are in prison. But yeah, it is. Cannonball is not for the faint of heart.
- [164:28]
Ben
It is crazy that that people are still going for the Cannonball record post Covid because all the records were smashed. So if you're not familiar with the Cannonball, it's a coast to coast race. You race from The Red Ball garage in New York City to the Portofino Hotel in La Jolla, I think in Southern California. And it takes something like originally, like days and days and days people did on motorcycles. People have done all sorts of different things. Electric cars, self driving cars. But the true record was sort of no limits. People go as fast as they can. Very dangerous, very illegal. You have to wait for the statute of limitations to lift before you share your run or share the video or else you'll be held accountable for what you did. Very controversial in the car community too. Some people love it, some people don't think it's safe. And for good reason. It's very dangerous. But a lot of people bring iPads and Waze and different maps and different radar detectors and all sorts of things. Some Cannonball record holders actually had friends who piloted planes that flew in front of their car. They're going 200 miles an hour, planes going 250 and looking for cops ahead of them. So that was the level of detail. There's multiple stopping points. They plan out the gas. They have a fuel tank in the back, a fuel cell that holds an extra 50 gallons of gas or something like that. So you can stop less a two stop, a three stop. These are the techniques. I'm roughly correct here. But during COVID no one was driving, no one was on the roads. And this was before people were like, oh, well, I can't go to a crowded building, but I can go camping. So I will get on the road. But even the trucks were off the road. And the trucks are the slowest part because you get stuck behind a truck, you might not be able to get around. And so all the Cannonball records were smashed. Ed Bolian from Vinwiki participated and did very well. I think he held the record for a while, maybe still does. But to go after it today in the modern era, where technology is even better, the cops have better radar than ever. There's cameras and all sorts of things. Truly one of the boldest things you, you can do. So good luck to him on his legal fight. Maybe he'll be using an illegal AI tool to get himself out of jail.
- [166:46]
John
I don't know, Arvie. Don't make mistakes.
- [166:48]
Ben
Maybe, maybe anything else.
- [166:50]
John
Well, folks, we will be back tomorrow. Tomorrow for a massive show.
- [166:56]
Ben
We gotta talk about the Trojan horse for the Odyssey, the popcorn bucket, the TBPN effect. We have a giant horse which might be a Trojan horse. We never opened that thing up. We don't know what's inside.
- [167:07]
John
That is true.
- [167:08]
Ben
Can you Imagine. But the Odyssey has released a limited edition Trojan horse popcorn bucket to commemorate the Odyssey. You can get it. People were fans of the Sandworm popcorn bucket. This doesn't feel like it came from the mind of Christopher Nolan. This feels like some producer, some money man came up with this. I like it. I think it actually looks cool. I don't know how practical it is to eat your popcorn out of this Trojan horse, but it is very fun. And I like the popcorn's hidden inside the horse. I'll be picking one of these up. Production team, how is the process of obtaining tickets to the Odyssey? I've been seeing that it's very stressful. Hasn't been going well. Have you secured anything? You got some. Where are you going?
- [167:52]
John
Where are we going?
- [167:53]
Ben
You're going to the Chinese Theater.
- [167:55]
Evan Beard
Chinese Theater?
- [167:55]
Ben
Imax. That's a good one.
- [167:57]
John
You guys got tickets for. For like the whole team, right? Because, like, this production team.
- [168:03]
RJ
Wow.
- [168:04]
Ben
Okay. I see a little division here. Okay, we'll solve it. We'll solve it out. No. Well, you know, we gotta. We gotta get everyone out to the Odyssey. You should get your friends out to the Odyssey. Call everyone. Buy a bunch of tickets. They're refundable on Fandango if you do it that way.
- [168:22]
John
And then the Coogan method.
- [168:24]
Ben
Get. Get 20 tickets. Text everyone you know who's in town. Tell them, be here at this time. You'll get some. Some churn. Not everyone will show up. You refund those tickets. Then you charge everyone after the fact. It's a good strategy for having fun with some friends. Touching grass. Remember reminding yourself of what's real. It's important. Stay sane out there. Leave us five stars on Apple, Podcast and Spotify. Sign up for our newsletter tvpenney.com flashbang See you tomorrow. Goodbye.