Tyler (1:44)

What his organizations can do.

John (1:47)

Yeah.

Tyler (1:47)

And even though this tariff app concept, you know, there's a lot of reasons that you would want to bet against it.

John (1:52)

Yep.

Tyler (1:53)

I don't know that many people that are genuinely sold on the space data centers in the near term is not clocking for me, John.

John (2:03)

I'm a dad. I'm a husband. You're not getting it. It's not clocking to you.

Tyler (2:07)

It's not clocking to you that I'm

John (2:09)

standing on business, is it? It's not clocking that he's standing on business.

Tyler (2:13)

It's not clock.

John (2:13)

He's standing on business and you're.

Tyler (2:15)

It's not clocking for you to me that he's standing. He's standing on space data centers. Seemingly the first time he's put the Tesla XAI Space X logos together.

John (2:26)

No. The Tunnel Project Hyperloop was a blog post that he wrote and it appeared both on the Tesla blog and the SpaceX blog at the same time. And everyone was like, who's going to be involved in this? And it turned out it was like a couple people from both sides. It became its own company at some point.

Tyler (2:44)

I'm not saying it's the first time.

John (2:45)

No, no. But it does feel like Elon Megacorp Gearing.

Tyler (2:47)

Gearing for the Elon Megacore. And yeah. So just overall the pitch is he's basically saying like, okay, we're going to do Terrafab. It's this really hard project and the evidence for why you should believe that it's going to work. Well, he's like, we've done a lot of hard things in the past. Talks a little bit about space data centers and then he talks about needing something in the order of a thousand times more compute than he says to reach a petawatt.

John (3:17)

We'll build an electromagnetic mass driver on the moon with robots like Optimus and humans.

Tyler (3:22)

No, but before the mass driver.

John (3:25)

Yeah.

Tyler (3:25)

He's talking about how, oh, we're chip

John (3:27)

constrained, which is true.

Tyler (3:29)

Elon chip constrained by a thousand X.

John (3:32)

Sure.

Tyler (3:32)

And so we have to do this.

John (3:34)

Yeah. We have to build that capacity.

Tyler (3:35)

He doesn't, he doesn't lay out like a super compelling case of what all the chips will be used for. Right. Is it, are they going to be, is Space X going to be a Neo cloud? Is it just for their own internal products like you know, self driving humanoids? Again, again, my criticism is not of any individual company as much as the presentation. I just came away. He kept saying like if we can do this, it's going to be epic.

John (3:59)

Yeah, yeah, yeah.

Tyler (4:00)

And, and, and it wasn't a, there wasn't a really strong justification. There wasn't a strong justification other than it's going to be epic.

John (4:07)

Yeah.

Tyler (4:08)

And then he just closes out with this render of the mass driver which is, again, it's tight. Yeah, but I didn't, I didn't. What was the takeaway on like what we're even going to use the mass driver for other than to get to a Kardashev 3 civilization, which again, all this stuff just feels so, so, so,

John (4:26)

so far in the future.

Tyler (4:27)

Far out. He did drop the line. Turning science fiction into science.

John (4:31)

Science fact.

Tyler (4:32)

Science fact.

John (4:33)

No way.

Tyler (4:33)

Which is, I think it's a Josh Wolf line. And it's funny because Josh Wolf was like the hardest critic of Elon.

John (4:40)

That's right. Yeah, that's right.

Tyler (4:42)

Like he basically had to stop at some point.

John (4:44)

Yeah, of course.

Tyler (4:44)

But yeah, he kept saying these lines that he was, like, expecting, like, kind of laughter.

John (4:49)

Yeah, it was really hard, I mean, doing like the actual delivery of a speech on stage. I mean, Jensen just went through this with a keynote at GTC where he didn't have a teleprompter, and he was able to deliver moments and get the crowd going. And the crowd size at GTC is really big. And so even if you just have a couple hardcore fans that really get you and have listened to every Jensen keynote, they know, yeah, they start clapping and then everyone starts clapping because it's infectious. And then pretty soon everyone's clapping. This is how it works. So, yeah, yeah. I mean, the comedic timing, the delivery timing of like, when to clap, when to be. Whoa, that was a little tough. I don't know actually know who was in the audience. Might have just been employees. It has a certain aesthetic to it. Interestingly, about the tariff app, this is something I was advocating for back in 2022. So when the Biden chips act happened, there was this question about, like, what's gonna happen with Intel? Intel should be at the, like, the center of the CHIPS act, because the whole pitch for the CHIPS act was that America is not a on the leading edge of semiconductor fabrication. And so we need to sort of pull our weight with our intellectual property laws to stop Taiwan from exporting them. Remember, Taiwan is its own country. They should, in theory, be able to sell their products anywhere. What say do we have over, you know, if Japan wants to sell PlayStations to China or anywhere, why do we have authority over them? Well, it comes down to the intellectual property. There's a lot of patents that have been licensed to asml, to tsmc. And so we do have the ability to pull levers and strings to sort of limit those, especially if they're packaged by Nvidia, an American company. We have export rules, but it's a stretch. But the whole thesis was America's gonna lose to China unless we do this. And so intel was a very logical one. And I remember there was like 60 billion or something up for grabs around the chips act. At the same time, Elon was marshaling around 60 billion for to buy out Twitter, something like that, 40 something billion. And then Intel's market cap. They're $220 billion company now. I think that they were lower back in 2022.

Tyler (6:59)

I think it makes total sense for Elon to make chips.

John (7:03)

Yep.

Tyler (7:03)

I think, I think it will make sense over time for X to start Offering cloud services to other companies, having

John (7:12)

it is valuable, but.

Tyler (7:13)

But still this seem just kind of a blatant sci fi pump going into the ipo.

John (7:20)

Maybe I will take the other side of that. The other side of this is that it is good to have a long term vision, even if it is decades away. And that's what mass driver on the moon is. It's not going to be realized this quarter, it's not going to be realized this year, probably not even this decade. Elon interestingly, didn't really put a date on it. Did he say something specifically?

Tyler (7:41)

He said, I hope to see it in my lifetime.

John (7:44)

Yeah.

Tyler (7:44)

Which is like, I mean he's 54, he's got a while, right? Yeah.

John (7:48)

If he's a radical life extension guy, he could be like 300 years from now. Who knows? That's a very vague timeline where whereas in the past with point to point, with roadster, with cybertruck, with space data centers, all the other Elon pitches have been very focused on we think we can do this in five years. And he always gets criticized for being Elon math too aggressive. But then history's shown that he over promises under delivers. But he typically does deliver eventually. And if the technology is completely new, no one else was going to build it and he's the first one to build it, it's fine because Starlink works. It was the first Leo constellation for satellite Internet, had turned into a huge business, wound up being a great technology and so now the mass driver's a lot crazier. I was going back and forth Tyler about this, trying to get him to nail down a prediction. We started with 100 years. Do you think it's possible to put a mass driver on the moon in the next 100 years? And you said, yes. So it's possible.

Tyler (8:50)

Yes. There's all sorts of like qualifications. I think the thing, it was like 300 metric tons.

John (8:54)

Okay. There was this interesting moment last year when everyone sort of like came around to the same AGI predictions or the same super intelligence predictions saying 8, 10 years. George Hotz, Dwarkesh Karpathy, Sam Altman. There were a number of people that were all saying in various words, like Sam said few thousand days. Dwarkesh had this probability distribution that said 2032. And so everyone was sort of in the, in the seven to ten year range. And it was just this interesting moment in the AI industry at least where everyone had a clear definition of like what superintelligence would be simultaneously. Everyone was like, yeah, it's not this year. It's more like 10. But there's way, like we are so far away from consensus around mass driver timelines, I thought it'd be interesting to start developing thought process around what is a mass driver, what does success look like, and what are reasonable timelines. Here we have to define what a mass driver actually is. In simple terms. It's an electromagnetic launch system fixed on the lunar surface that converts energy. So you put down some solar panels, you take energy, that's the electromagnetic, so you're not putting up fuel. And, and then because that's extra cost, once you're there, you can just repeatedly get sunlight, turn that into energy, and it's going to successfully accelerate a payload to lunar escape velocity, which is one fifth of Earth's escape velocity. You gotta be going 5,000 miles an hour to escape the moon's gravity well. You have to be going 25,000 miles per hour to escape Earth's. So from an efficiency, an energy efficiency standpoint, it's much better to leave from the moon than to leave from Earth. So then the payload needs to go somewhere useful. Like you make this thing. In this video, he's talking about making satellites on the moon that's even farther away. But those have to go somewhere. So you can't just launch them into deep space. I mean, unless that's where you're going. Usually you would go to a lunar orbit or an Earth orbit or some point in between the moon and Earth.

Tyler (10:55)

Gabe says, what is this mass driver you speak of? SpaceX is getting in the supplements game.

John (10:59)

That's a great.

Tyler (11:01)

They should make a.

John (11:01)

They've done the Tesla tequila.

Tyler (11:03)

Exactly. They should make a mass gainer mass driver release now and say, hey, if you buy this, you'll get priority access to the mass driver on the moon.

John (11:12)

I like this. I like this a lot. I would definitely be a daily driver of the mass driver. And so, yeah, there's this question of like, you, you set up this thing that's going to take forever, be really expensive. What are you actually pushing into space? You probably start with basic materials. So rock, literally rocks. Metal, oxygen, water, a lot of useful space.

Tyler (11:31)

What if the asteroids that we get into our atmosphere is just an advanced civilization somewhere else?

John (11:36)

Just mass driving.

Tyler (11:38)

Mass driving.

John (11:38)

I saw, I saw.

Tyler (11:39)

Yeah, we're downrange. Guys, relax.

John (11:42)

I saw a hilarious take that the first UFO that will arrive on Earth will just be a car guy from another galaxy who like got into building a crazy supercar, effectively taking it out on somebody's like, you can't get to Earth in that thing. That's too modded. That's too crazy. You're. Yeah, you're going to break down. There's no way. And he's like, I'll show.

Tyler (12:03)

You're going to be too old. I'll show you.

John (12:05)

I'll show you. I've modded this thing. You can also potentially get propellant from the moon if you can extract water from. From ice from the moon, especially near the poles. That water can support people because you can drink it. Here are the four conditions I think need to be met in order to say yes, we have a working mass driver on the moon. This is how I'd formulate this. Beta with Tyler Cosgrove over there. One, you need a permanently installed electromagnetic launcher, and it has to be on the lunar surface. This should be obvious too. It has to launch at least 300 metric tons over a 12 month period. This means it's driving significant mass, not just test payloads. Let's aim for 95% mission success and at least 200 launches per year. Failures are going to happen, but we want to get this reliable and at commercial scale. And that means that it can't be breaking down all the time. Lastly, the mass launched from the moon has to actually be put to use. You can't just have this demo unit that's just blasting rocks into the sun. It's got to go to something useful. And that could just be water that's going somewhere else or rocks that are going somewhere else. But it needs to be like we're catching them somewhere. There's a reason that it's going there. Once all four of those conditions are met, it will be hard to argue that we're in some sort of demo phase or publicity stunt. How long will this take?

Tyler (13:24)

My case, you should put the goalpost on the mast driver, the way that you keep moving them.

John (13:30)

Okay, I'm moving the Golf. I put the over under at like 15 to 20 years, which is about as aggressive as I could get. I think Tyler's gonna take the other side of this.

Tyler (13:40)

Well, I'm gonna take the over.

John (13:41)

You're gonna take over 20.

Tyler (13:42)

15 years is, I think, kind of crazy.

John (13:44)

15 years is a blink of an eye.

Tyler (13:45)

I think I'm a bit more AGI pilled than you, Tyler. Okay, so.

John (13:48)

Okay, well, let's go through the six steps.

Tyler (13:50)

Just say. Just say you lost faith.

John (13:52)

The six steps. Six steps. Okay, so first off, we got to get to the moon. We can't really get to the moon right now. We're pretty close with really small payloads. We need reliable heavy lunar launch capacity and that's going to take some time. So starship needs to be refueling in orbit, landing on the moon with and without crews because you're probably going to need some humans up there, some robots and we need to start routine cargo flights to the moon. So this is straight up like three to five years away, like minimum. Then you need to build the power infrastructure. So that's another couple of years because once you're actually going up and back, you have to put down a bunch of solar panels stored in batteries and then the batteries need to be able to deliver a lot of power. All of a sudden. Now this is what the Tesla does, right? Robotic construction capacity. You got to get autonomous construction rovers at least up and running to lay the electromagnetic track. Then you actually have to build the mass driver on Earth. The good news is that once you build it, once you've built it like the benefits are really good. Like you don't have an atmosphere, there's no drag, no weather, no air resistance, and of course gravity is a lot less. So you still need a plan for where the mass goes after it's driven. You got to catch it kind of. And that's a whole nother problem. But. And when you add all these projects up, you start easily getting into the decades. I mean if you think about this in like the most grand project you can imagine, which is like the Dyson sphere, basically solar panels directly around the sun, all the way around the sun to capture all of its energy, you're going to need to send a lot of solar panels to the sun. Making those on the moon is lower cost potentially than making them on Earth.

Tyler (15:28)

That's the, I'm seeing a tourism angle. When the mass drivers pointed back at the Earth to be in a little like bobsled type thing, a little pod to be launched at the earth and then you kind of break through the atmosphere and then you parachute. Now that could be good for like gender reveal birthday parties, you know, potentially.

John (15:49)

Yes.

Tyler (15:50)

This needs an Elon esque figure to accomplish. Yeah, I'm thinking more in that 50, 50 year.

John (15:57)

Over 50 or under 50 we gave Tyler. Exactly.

Tyler (16:01)

I changed, I'm going 30, 30. I think 50 change. Well, I was just like AGI is like basically here. There's no way it's going to take that long there. There we go. It's like everything will be so cheap. Okay, so you want, I mean I was thinking five years head over to suspended cap. What do they have there? They bullish on suspended cap bullish on the presentation.

John (16:25)

Suspended cap says Tarifab is a blatant pump. It actually disgusts me. There will never be leading edge chips from them. There will never be data centers in space. It's such a blatant effort to IPO SpaceX on the back of some pie in the sky guy BS and then merged with Tesla, do humongous raise and keep blah blah blah blah blah for five years. Not a fan. D cell Suspended caps of D cell. There was an obituary in the Wall Street Journal for David Simon. He was a mall king who was both feared and admired. He had ruthless negotiation tactics, an obsession with details and the sheer force of will that turned his family's real estate business into into the largest mall owner in the country. He passed away on Sunday after a cancer diagnosis in 2024. He was 64 years old. During his more than three decades as Simon Property Group's chief executive, the inveterate dealmaker gobbled up competitors and defied critics who said malls were obsolete. Over a decades long buying spree, he cobbled together an empire that spanned 250 properties and 206 million square feet, giving Simon control of more retail space than anyone in the world. His success helped propel the family to the wealthiest echelons with an estimated net worth of 11.6 billion, ranking number 38 on Forbes magazine's list of the richest American families. At a time when malls were failing and retailers were filing for bankruptcy, Simon invested in his properties, beefed up their luxury offerings and added non shopping tenants such as high end fitness fitness centers, high tech mini golf courses and upscale residents. I feel like that has been the secret to success with the modern mall. There's a lot of malls that have sort of mid tier or low end retailers where it is actually pretty comparable to shopping online. You go in, there's no one that's really going to talk to you. The stuff's just there, it might be on the floor, it's messy. But then there are certain malls that have leaned into the higher end experience and oh, would you like a drink? Let's talk about what you're thinking. Let's you know, show you all this stuff, try this on and it's much more, it's just in a completely different tier than E commerce shopping. And so I feel like those properties and those chains have done very well. Along with partners, he snapped up ailing retailers including Aeropostel, nautica, Eddie Bauer, JCPenney, Forever 21, Lucky Brand and Brooks Brothers. The arrangement propped up the chains prevented large vacancies in Simon Malls and turned out to be moneymakers for the company. Effective Monday, Simon Simon's board appointed Eli Simon, one of David Simon's five children, as its CEO and president. The mall king was both feared and admired and could be both charming and terrifying. Simon unleashed a tirade at Coach executive Todd Conn during their first meeting in the decade of the 2000s, after the handbag maker tried to renege on deals to open stores in Simon Malls. There was no shortage of profanity. Khan said the two came to an agreement and became friends. Nothing like a screaming match to kick off a lifelong friendship. David's word was his bond. You could have bang out meetings, but if you came to a resolution and you shook hands, it was golden. That's a good way of doing business.

Tyler (19:30)

RIP to the mall King OpenAI is

John (19:33)

offering private equity firms a guaranteed minimum return of 17.5% as well as early access to models not yet in public release. There was a lot of chatter on the timeline going back and forth like is this some sort of weird guarantee? Is this not normal for private equity dealing market participant had broke it down down to take you through it. So why don't you read through some of this?

Tyler (19:58)

Many are saying OpenAI's $10 billion private equity joint venture is giving a desperate feeling. A lot of people are throwing up the red flag emoji saying vendor financing dressed up as venture capital, guaranteed returns that smell like a Ponzi. A company burning 14 billion this year buying distribution it can't earn organically. I'd push back. TPG, Bain Capital, Advent in Brookfield put up 4 billion. They get preferred equity with a 17 and a half minimum return board seats and early access to OpenAI's newest model. OpenAI gets instant distribution into hundreds of portfolio companies. No traditional enterprise sales cycles, no selling company by company. The part people are missing. A huge number of software companies are privately held. Thoma Bravo alone owns 75 software companies generating 30 billion of annual revenue. PE firms collectively did 1.8 trillion in buyouts last year. These companies are shifting to heavy token consumption. AWS knows this. They run a dedicated PE sales function.

John (20:49)

Talk about a dream job that. Oh, I would kill for that.

Tyler (20:53)

Yeah, yeah, if you love private equity, yes. Hard to imagine. Anyway, anything better? Advisory programs, transformation consultants, the whole apparatus. Azure and GCP do the same. OpenAI is running the cloud distribution playbook, wholesale tokens to PE portfolios at scale. The difference is exclusivity. Aws doesn't ask PE firms to put up 4 billion to take board seats. They give the advisory away. OpenAI is asking for capital commitment which buys preferential access, dedicated forward deployed engineers and a financial incentive for the PE firm to actually push adoption across its portfolio. A PE firm that invested 4 billion in this JV isn't running a parallel RFP with Anthropic. That's the point. The 17.5% return looks like a red flag until you look at it closely. Its preferred equity hurdle not a coupon on debt. This is the main thing that the hundreds of posts I saw are missing. Priority on returns before a common shareholder. So it's preferred equity plus a return. On top of that OpenAI is buying captive distribution channel into enterprises they'd otherwise spend years trying to reach. Anthropic is running a parallel deal with Blackstone, Hellman Friedman and Per Mira 1 billion common equity. No guaranteed return. More of a Palantir style consulting venture. Both companies doing this simultaneously tells you where Enterprise AI is heading. The bear case is real. 95% of Enterprise AI pilots fail to deliver ROI Ferdy Gone.

John (22:15)

Yeah, that's kind of true anymore but

Tyler (22:17)

yeah that was one study and again it was every agent coding 14 billion in projected losses this year. Profitability not expected until 2029. All true. And OpenAI's enterprise businesses is already 10 billion of 25 billion in revenue 40% and growing to 50% by year end. The distribution problem is what's left to solve and anyways goes goes on and on. But yeah overall I think like people are taking one data point out of context kind of spinning it into something that that looks quite extreme and concerning when in reality is just giving them a preferred return. Financial Times had Some reporting Saturday OpenAI to double work force as business push intensifies I love a business push so this is fantastic news. Matt Slot says TBH the biggest risk to incumbents may be that labs absorb all the top talent. Labs already get great engineering talent but this will spread to product sales, marketing et cetera when they become the optimal destination to solve the problems of your customers. It's going to get ugly. Yeah, basically you know you have a big enterprise instead of going and doing and trying to figure out like the right SaaS solution for a specific problem. You can go to a lab and get something similar as part of that workforce push. OpenAI tapped former Meta executive to lead their ad push yeah, why is no

John (23:38)

one talking about Dave Dugan, the Duganator? It's, it's crazy.

Tyler (23:43)

Dave Dugan, a former top advertising executive in Meta is going to lead sale ad sales. Dugan, who announced earlier this month he was stepping down from his role as vice president of global clients and agencies at Meta, has been named vice president of global ad solutions for OpenAI. He will report to Brad Lightcap, the light cap inator. The high profile hire underscores OpenAI's urgent push to generate new revenue streams to support its enormous funding requirements for its computing needs.

John (24:11)

People were complaining that, like the advertisers that bought the first ad campaigns on ChatGPT said that process with low tech and that they haven't received much data showing if their ads worked. Two executives at agencies working with early ChatGPT advertisers said they haven't yet been able to prove the ads have driven any measurable business out from their outcomes for their clients. Eric Sufert over at Mobile Dev memo shared two thoughts on reporting that early ChatGPT ad campaigns lacked performance data. One this is to be expected. Any early offering will feature limited functionality. Early adoption should be prepared to fill measurement gaps themselves with polling or any other sort of pixels or tracking. You should be able to work this together. There's been plenty of times this was the early podcast ads. You'd run a bunch of podcast ads and be like, okay, some people use the coupon code, but a lot of people don't. What multiplier should I apply to that? And then you'd wind up surveying your customer base and being like, wait, we spent 10% of our marketing budget on podcast ads, but 20% of our customers said they found out about us from a podcast. Like maybe we should spend more there, right? Measuring incredibly at asserting performance is precisely what ad agencies are paid to do, says Eric. Suefert says if an ad agency says it can't provide performance data because the channel doesn't provide it, it is merely a media buying intermediary. If you're an ad agency, you gotta figure out whether or not the ads that you pitch to your clients are actually working. Mark Zuckerberg Big scoop.

Tyler (25:40)

Huge From Megan over at the Journal, Mark Zuckerberg is building a CEO agent to help him do his job. Employees are also adopting AI agents and AI tools internally, namely My Claw, My

John (25:54)

Claw, My Claw, My dude and Second Brain in a bid to speed up work as they get graded on AI use.

Tyler (26:02)

Tyler where's our My Claw and our Second Brain?

John (26:07)

Yeah, I don't know. I'm so interested to know what Mozart Revenge prompted.

Tyler (26:12)

Hope's Revenge, says Zstack.

John (26:14)

Yeah, it is.

Tyler (26:15)

Honestly, Zuck's Zstack is like it's like God mode.

John (26:19)

I mean, it does make sense in his position to have a model that's fine tuned on the internal KPIs, the internal org chart, all this information that's private and he probably doesn't want to hand that off to another, to another lab that's just going to maybe look at the data and be like, oh, okay. So Mark Zuckerberg just add, just asked, how do I poach from all the other labs? But there's got to be so many other questions that he's asking all the time. When you're walking into a meeting with executives, you want to know, well, how is this division performing? How much money am I spending on Meta Ray Ban displays? What's the turn rate? Who are our biggest partners? There's a million questions we're joking around,

Tyler (26:58)

but Zstack does make sense.

John (27:00)

It does make sense.

Tyler (27:01)

You should be able to have God mode.

John (27:02)

Yeah. And I mean this, this has the. There are companies that are starting to do this where they're, they're pitching their agent stacks for CEOs. Boardy is sort of one version of that. Right. But there's more and more people that are like, okay, we will come in and fine tune something for your organization specifically and maybe do that on the fly. Maybe that's just enterprise or anthropic enterprise or whatever. But Zuck clearly wants something built from the ground up and it's also a great product demo because if it works really well for him, then the lessons and the learnings from there will probably apply to other people in the ecosystem. So the agent, which is still in development, is currently helping Zuckerberg get information faster, for instance by retrieving answers for him that he would typically have to go through layers of people to get. Zuckerberg's agent project reflects a drive across the 78,000 person company to accelerate the pace of work, eliminate layers from its organizational structure and change the day to day jobs of its employees to remain competitive with AI native startups with much smaller staffs. The company views AI adoption as critical to the future of success. Zuckerberg has been spending more time coding recently. He previewed some of the efforts at a company's earnings call in January. Quote, we are investing in AI native tooling so individuals at Meta can get more done. We're elevating individual contributors and flattening teams. He said, if we do this, then I think we're going to get a lot more done and I think it'll be a lot more fun. I love that. Leave us five stars on Apple Podcasts and Spotify. We are now the number two technology show on Spotify. Thank you to everyone who supported us. Who's ahead of you throughout this way. All in.

Tyler (28:39)

Have a wonderful evening.

John (28:41)

Massive stream tomorrow, 11am Pacific sense reaction to this.