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- [00:01]
John Coogan
You're watching TVPN. Today's Tuesday, August 26, 2025. We are live from the TVPN Ultradome, the Temple of technology, the fortress of.
- [00:09]
Jordy Hayes
Finance, the capital of capital.
- [00:11]
John Coogan
Thank you to the team at X. Thank you, Elon Musk. Thank you, Nikita. Beer. Because in the latest app store graphics package for the X app, that's the Everything app on iOS. Who's featured? None other than yours. True.
- [00:28]
Jordy Hayes
The Technology brothers.
- [00:29]
John Coogan
Yeah. Yes. Both of us are there.
- [00:33]
Jordy Hayes
Tight mogging me as usual.
- [00:35]
John Coogan
I don't know. I mean, it's just. It fits in. I like how the brand kind of fits in because we have some green in the background and they have green little accents in the design. Looking good with the liquid glass. Whoever screenshot of this clearly on the next version of iOS. But you wrote on the account switch.
- [00:54]
Jordy Hayes
Swift dev on X. Oh, it was from them.
- [00:56]
John Coogan
Oh, interesting.
- [00:57]
Jordy Hayes
Provided the screenshot.
- [00:58]
John Coogan
That's great. You said number one on the charts. Number one in our hearts, I believe.
- [01:03]
Jordy Hayes
I mean, it's great to see X number one in the news.
- [01:06]
John Coogan
Oh, yeah, they are number one. That's what you were talking about. Okay, so they're number one in the charts. That's great. Very, very cool. We love having grown the show and people are having.
- [01:16]
Jordy Hayes
Couldn't have done it without X because.
- [01:18]
John Coogan
We hit 100,000 followers on X. Thank you to everyone who supported us along the way.
- [01:26]
Jordy Hayes
They said it was impossible.
- [01:28]
John Coogan
There's actually two clips or hype reels have hit the timeline. We have one showing the evolution of our intros where they get more and more aggressive every day. Should we throw up this one? Yeah, let's watch this.
- [01:42]
Jordy Hayes
Play it.
- [01:42]
John Coogan
This is great. Welcome to Technology Brothers, the most profitable podcast in the world. Welcome to Technology Brothers, profitable podcast in the world. Welcome to Technology Brothers, the most profitable podcast in the world. Welcome to Technology Brothers, the most you on your phone in the world.
- [01:58]
Jordy Hayes
I mean, our house in the world.
- [02:01]
John Coogan
Welcome to Technology Brothers, the number one live show. I mean. I mean, welcome to Technology Brothers, the number one live show in tech. You're watching tvp. And we're live from the temple of technology, the fortress of finance, the capital of capital, the dojo of the dollar, the shrine of shareholder value. You're watching TVPN.
- [02:20]
Jordy Hayes
You're watching TVPN. You're watching TVPN.
- [02:24]
John Coogan
You're Watching TVPN.
- [02:26]
Jordy Hayes
You're watching TVPn.
- [02:28]
John Coogan
It's so much more extreme. Well, thank you to for putting that together. Only months apart from the first clip, to the. To the last incredible Growth. Yeah, it's been a lot of fun. And then can we pull up this, this vibe reel from Jace Faux Drill? This podcast has been growing like wildfire recently. We've become the fastest growing podcast in the world.
- [02:48]
Jordy Hayes
We're going to be doing a bottle of Dom every thousand followers.
- [02:52]
John Coogan
Every thousand followers. We are live from the palace of party rounds. Oh, my God. That was the first time you popped that one. I didn't realize it was so exciting. We are live from the New York Stock Exchange, one of the most, I.
- [03:07]
Sean (Coinbase Chief Business Officer)
Think, important things happening in broadcasting.
- [03:09]
Jordy Hayes
It's your show.
- [03:10]
Dan Wang
You guys saw it.
- [03:11]
John Coogan
What you guys do is great. I also think that you're transform the.
- [03:14]
Wade Foster
Way that media is dispersed each week and it's awesome.
- [03:17]
John Coogan
John and Jordy are gifted.
- [03:19]
Dan Wang
They're gonna fucking blow. I don't know anything. I only.
- [03:21]
Logan Kilpatrick
I know about podcasts. I know how history's greatest entrepreneurs think. I don't know anything about anything else.
- [03:26]
John Coogan
I promise you. There should just be like, here's a pile of money and next time you have come with an idea, do it.
- [03:32]
Jordy Hayes
Almost everything that I don't like is un American. We get into producing ballets, a model.
- [03:37]
John Coogan
That would basically use AI to basically use AI to make AI.
- [03:42]
Jordy Hayes
We are going to win the temple.
- [03:44]
John Coogan
Of technology that a fortun of finance, the capital of capital.
- [03:48]
Jordy Hayes
You're watching tv.
- [03:52]
John Coogan
Wow. What a great edit.
- [03:54]
Jordy Hayes
Thank you, Jace. Fantastic edits.
- [03:59]
John Coogan
Thank you. Thank you for making that. That's amazing.
- [04:02]
Jordy Hayes
They beat us to it. We were working on.
- [04:04]
John Coogan
We were working on something too to.
- [04:05]
Jordy Hayes
Do something like this, but you guys did it for us. So thank you. Thank you for being a part.
- [04:10]
John Coogan
Thank you to Ramp for making all of this possible. They took a shot on us very early and so you should take a shot on them. Ramp.com Time is money save. Both easy to use, corporate car bill payments, accounting and a whole lot more all in one place.
- [04:21]
Jordy Hayes
They did. I think we had something like a thousand followers when committed to working with us for the year and we are forever grateful. Yeah, they made it possible.
- [04:32]
John Coogan
Yeah, it's been. Been a fun run. Anyway, the. The real top story is of course Intel. The experts have weighed in. We have some amazing breakdowns from John at Asianometry, Ben Thompson at strateCherry and Doug O' Laughlin at fabricated Knowledge Semianlysis. The true experts have weighed in. We've obviously been following the story on this show, but these folks really know the details and we're able to put together a bunch of great analyses mapping out what might happen next. There's a really good video from John at asianometry that we should play to hear a little bit of what happens next. The quick recap, as I understand it, is intel was dominant right up until mobile. Not only did they manufacture the best chips, but they also had an incredible brand from their Intel Inside campaign. These stickers were all over every PC. Intel Inside. It was on every PC that every kid wanted. And I can still hear the intel sound in my head. If you dun dun, dun dun, you know that sound. Wow. Extremely offline.
- [05:47]
Jordy Hayes
Before my time.
- [05:49]
John Coogan
Tyler, do you know the intel inside.
- [05:51]
Dan Wang
Sound that sounds like the Xbox sound?
- [05:54]
John Coogan
No, no, no. Pull up the intel inside sound. We need this on the. On the soundboard.
- [05:59]
Jordy Hayes
This is the only sound we need.
- [06:00]
John Coogan
Inside sound. I'll just play it here. I think I can play. You've never heard this before. Let me play this. Oh, come on. I do know that you know that sound.
- [06:14]
Jordy Hayes
That's an iconic sound. I take it all back.
- [06:16]
John Coogan
Everyone knows that sound. So incredible brand. Right up until 2007, the iPhone dropped.
- [06:22]
Jordy Hayes
Did they used to get. They used to play that sound when you would be booting up a Mac.
- [06:27]
John Coogan
I think that was a different sound, but it was just all over tv. So you couldn't turn on the tv. They were just wall to wall. And it was interesting because you wouldn't.
- [06:35]
Jordy Hayes
Go and buy an underrated like medium.
- [06:37]
John Coogan
For Apple, 100% they had not been.
- [06:40]
Jordy Hayes
Taken advantage of fully in the Internet era.
- [06:42]
John Coogan
I mean, what did I say about the super bowl ad that Ramp ran? I was like, that song at the end is iconic. And like this one, I was like, there's something here that you could double down on.
- [06:53]
Jordy Hayes
Switch your business to ramp.com.
- [06:54]
John Coogan
Switch your business to ramp.com. thank you, Saquon Barkley. So it was very. It was a fascinating time because intel was making the chips, but also designing the chips and then also marketing the chips. And people would buy the computer because of the chip, not just because of the brand. And that just doesn't happen anymore, really. And so in 2007, the iPhone launched and it did not include an intel chip. And this was a bombshell. Instead, Apple selected a Samsung manufactured system on a chip based on arm, which is a design firm that designs chips and has an architecture that is incompatible with x86, which is Intel's architecture. So the reason was chips from ARM were far more energy efficient than Intel's x86 processors at the time, and the iPhone needed to optimize for long battery life. There's a debate over whether or not Apple ever had a chance to go with intel, but it almost doesn't matter because they went with Samsung and then eventually the Apple silicon and they stayed on ARM and they went for a more efficient chip, more, less power, more, less power hungry. And so intel was just too power hungry. And intel as a company underestimated how important the mobile market would be to remaining dominant in semiconductors over the long term.
- [08:11]
Jordy Hayes
Ben Thompson Mobile missed AI, yes, but.
- [08:14]
John Coogan
They didn't miss cloud. And that's what, and that's where it gets interesting because so 2007 they start missing mobile because of the iPhone. But the iPhone was small and it was a small portion. It was unclear how much computing was gonna be done on mobile.
- [08:25]
Jordy Hayes
A lot of people weren't taking it seriously.
- [08:27]
John Coogan
A lot of people weren't taking it seriously. Ben Thompson comes up with.
- [08:30]
Jordy Hayes
And there was real reason for that. If you were just comping it to the PC market and saw Apple's like, market share within PCs was a tiny fraction.
- [08:39]
John Coogan
Yeah, yeah, yeah, 100% that. And then also just the idea of, like, what am I going to do my work on a tiny phone? Like, that's so. It's such a stretch even if, yeah, okay, I can text a little bit better, but I'm not going to be doing a lot of work on here. And now it's like the device of CEOs, like, don't even open computers anymore. So Ben Thompson came up with this thesis in 2010 that intel needed to pivot and really double down on going into foundry mode. Not founder mode, but foundry mode. They needed to get other customers to design chips that were specific for what those customers needed. And then intel would make the chips and act as a foundry. He launches the blog Strytechery in 2013. It's one of his first posts. Intel needs to build a Foundry legendary call. Now, interestingly, he by his own account says that wasn't a good trade recommendation because for the next eight years, intel ripped because of cloud computing. Because as mobile was growing, cloud was also growing because as what does your phone need to talk to? It needs to talk to a server in the cloud. So the cloud was growing, AWS is growing, GCP Azure is growing. And so Intel's selling a lot of CPUs into EC2 instances on Amazon AWS. And Intel's business is doing fine until AI comes around and they miss that as well. And now they miss mobile and AI and they're. And they're just falling, falling behind. And then now the cloud is starting to look at, hey. Well, actually the power trade offs of ARM now are actually pretty good. And so maybe we should do, you know, different chips in the data center. So they are facing pressure in a lot of different ways now. That type of pivot would have been really antithetical to Intel's culture. They would have had to build a customer service organization. And intel was so dominant, it was like this center of excellence. It had the best people. And so they weren't used to saying, oh yeah, like let's do what the customer says. It's like, no, we know what's best, we make the best thing. And you decide when you're on a roll.
- [10:39]
Jordy Hayes
That works really well.
- [10:40]
John Coogan
Exactly, exactly. And so who knows if they could have, they could have done it. They actually did. As we talked about yesterday, they did try and spin up a little bit of a foundry for these FPGA startups, but it was always a small piece of the business, basically. Like if you need a very specific chip to do like networking or encryption in a data center, it's like a special chip, they would do that but with a small startup. And they never really pushed into it. They never went for like the big wins like Apple. And so because of the cloud boom, intel performed quite well throughout the 2000 and tens. But the AI boom is a different story. Intel's far behind now and camp simply cannot afford to build their new cutting edge manufacturing facility without external customers. And no one wants to work with intel right now. But big companies do want to stay in the good graces of the US government. And that's the bull case for intel here. If big tech companies get art of the deal into putting large enough orders into intel to underwrite the completion of their new 14A foundries, that's the big Ohio plant that is estimated to cost something like $40 billion in orders. To kind of make it math out, they don't need to go head to head with Nvidia. Nvidia, they don't need to win the GPU market necessarily. And we'll get to this with the video. John at Asynometry argues that Nvidia should buy CPUs from Intel. So Nvidia sells a CPU called Grace that they pair with Hopper, which is Grace Hopper, which is the namesake of the system. And that's not an, that's not an x86 chip. But there's no reason why Nvidia couldn't license Cuda and the design to intel and say, hey intel, you're going to be our manufacturer for that. Because Intel's not a manufacturer, so realistically intel should be able to say, hey, yeah, we'll go to intel, we'll go to tsu, whatever gives us leverage that.
- [12:31]
Jordy Hayes
The government and Trump have a stake in Intel. You can imagine Trump really leaning on Jensen to make something like this happen.
- [12:41]
John Coogan
And, and Trump also has some leverage over Nvidia because he's taking this 15% kind of questionable export tax. And so you can say, hey, Jensen, like how about I make that go away and you give Intel a little bit of business or oh, like I'm going to threaten a really crazy tariff and I'll pull it back if you work with Intel.
- [13:02]
Vikas NT
Yeah.
- [13:02]
John Coogan
And so that's kind of the bull case here that people are, are kind of coalescing around the experts who I trust on this issue. And so if Trump was able to strong arm Nvidia with a somewhat legally dubious 15% export tax, getting Jensen and Lip Bhutan in the same room today to hammer out a deal doesn't seem like the craziest idea. And there are other tech companies that might play ball too. This is an expensive gambit. Ben Thompson estimates Intel needs 40 billion in demand to make the foundry play pencil out. But big tech companies are spending almost ten times that collectively. And they all, and they all still take the President's phone calls. So let's play the asianometry video right here. Perfect. He's going to be in California, by the way, or Arizona, so you should go.
- [13:42]
Dan Wang
So what seems most likely about to happen is that the United States government and a few aligned investors first take a stake in Intel. The government puts up money to finish the fab in Ohio, then raises tariffs to a high number with some carve outs to satisfy the crowd.
- [13:57]
John Coogan
That's the $20 billion.
- [13:58]
Dan Wang
And then they will apply pressure to the tech giants that to get them to throw some orders at Intel Foundry. There's a comment on the wallstreetbets thread on the story that succinctly lays down the sentiment. Dude is 100% gonna nudge Apple and Nvidia to use their 14A foundries. This is gonna skyrocket by EOI 2026 in the hundreds. Doug O' Laughlin of Fabricated Knowledge agrees and adds that pressure might also be applied onto the semiconductor equipment companies too. Additionally, forcing semiconductor companies like kla, Applied Materials and LAM Research to invest and give resources in exchange for approved licenses is another example of a carrot and a stick. A few companies have already started to turn on this perceived trajectory. For instance, just as I write, intel has announced.
- [14:53]
John Coogan
Studio for sure.
- [14:54]
Dan Wang
Considering how Masa invests, I'm not supposed to surprised he's first through the gate. There's news that he was in talks to buy Intel's fabs. Maybe that will happen by the time you see this. As I said before, this seems to be what the plan is.
- [15:07]
John Coogan
Coalition of the Unwilling okay, we can stop it though. It's a great video. You should go subscribe to Asianometry on YouTube and get a I think it's part of the Stratecheri bundle. If you go for the bundle you get access to John at asianometry's blog posts as well, which are fantastic. And I've been going deeper into the Asianometry YouTube and there's so many good intel videos and the guy really understands the history. Apparently this isn't the first time that the US government has tried to reshore manufacturing of a particular technology. He highlights the drams like this memory gambit that happened in the 80s and it didn't really work out and he kind of draws some analogies there. Anyway, John, next time you're you shouldn't just upload that that YouTube video, you should stream it on restream one livestream 30 plus destinations multi stream and reach your audience wherever they are.
- [16:03]
Jordy Hayes
Go to Restream anywhere.
- [16:05]
John Coogan
So Sagar and Jetty is quoting Ben Thompson on the Intel 10% stake quote. The single most important reason for the US to own part of intel, however, is the implicit promise that Intel Foundry is not going anywhere. There simply isn't a credible way to make that promise without having skin in the game. So it's not just a lender of resort, it's actually just commitment that there will always be some level of US manufacturing on the leading edge. Which is what Intel's trying to trying to do here with this Foundry and what they have been so far unsuccessful at drumming up customers for. So Sagar shares some screenshots from the strategy article. Given all of this, acquiring 10% of intel, terrible though it may be for all the reason Lincecum articulates, and I haven't even touched on the legality of this move, is I think the least bad option. In fact, you can even make the case that a lot of what Lincecum views as a problem has silver linings. Intel deciding to stay in manufacturing is arguably making a political decision, not a commercial one. However, it is important for the US that Intel stays in manufacturing. It is a political issue. Intel prioritizing government interests which are inherently focused on national security and the long term viability of U.S. semiconductor manufacturing over their fiduciary duties could just as easily be framed as valuing the long term over the short term. Had intel done just that over the last two decades, they wouldn't be in this position. So America is setting intel up to be able to make that multi decade decision. It's going to be a lot of pain but then eventually hopefully they'll be back on the leading edge.
- [17:37]
Jordy Hayes
Yeah, remember it was felt like two or three weeks ago Le Bhutan was just focus. Like you could imagine the morale at intel just being absolutely abysmal because it was just cut after cut after cut versus you know, any time, any type of obvious long term strategy of getting back on the leading edge.
- [17:55]
John Coogan
Yep. Other companies being pressured to purchase intel products is exactly what intel needs to not be. To not just be viable in manufacturing but also to actually get better. If TSMC and Samsung are disadvantaged by not making chips in the U.S. that's a good thing from a U.S. perspective. Both companies are investing here. The U.S. wants more private capital. Prioritizing U.S. manufacturing is a good thing. I remember when the Chips act was still break. It was first breaking. Ben Thompson was advocating for something that looked a little bit more like Operation Warp Speed where basically the government instead of and this is what they do in China too where instead of saying like okay, we're just going to give 20 billion to intel because like we pick them and they're good, it's more.
- [18:32]
Jordy Hayes
Like guaranteeing the end.
- [18:34]
John Coogan
The US is going to be a buyer at this price. So if you make it in America we'll buy it. And this is what's happening with MP Materials right now. The DoD invested I think 500 million but then also said hey, we will buy all the magnets at this price. If you can go sell them at a higher price, somebody else do that but you got us and we'll just build a stockpile. And so you can imagine the US being like yeah, we'll build our own data center and we'll try and lease it out and maybe we take a loss if there's like an overbuild or something but, but it could very well pencil out and if demand for these chips is actually higher then you'll just sell them to someone else. We won't even need to buy them. So just acting as like that, that that stopgap actually makes more sense maybe, but the like so many of these decisions were already made that this is probably in this moment in time what made the most sense. And then private capital prioritizing US manufacturing is a good thing. Ben Thompson closes this little quote out by saying the single most important reason for the US to own part of intel, however, is the implicit promise that Intel Foundry is not going anywhere. There simply isn't a credible way to make that promise without having skin in the game. And that's now the case. So of course go subscribe to sirtechery. Go subscribe to Fabricated knowledge. Doug o' Laughlin is saying, not going to lie. A lot of people who are mad at Trump for everything can't see the genius of the intel investment. I mess with it massively. I love the way he posts there. It's great.
- [19:55]
Jordy Hayes
Doug messes with it, everyone.
- [19:57]
John Coogan
Yeah, I'm messing with it, but I'm mostly deferring to the experts on this.
- [20:02]
Jordy Hayes
Trust the experts.
- [20:03]
John Coogan
Anyway, if you are designing not a chip, but something else, get on figma. Think bigger, build faster. Figma helps design and development teams build great products together and get started for free. Figma.com David Senra, you saw him in the Vibreal. He just dropped a fantastic episode called How Elon Works. It was a very interesting process. He outlined it for us on the show. Basically the latest book on Elon is more of like news. I think it's Walter Isaacson's and it's more of like news articles minute by minute.
- [20:38]
Jordy Hayes
And so it's a play by play.
- [20:40]
John Coogan
It's a play by play.
- [20:41]
Jordy Hayes
Less of a playbook.
- [20:42]
John Coogan
Yes. And so Senro wanted to transform it into a playbook and he did that by. I think he read the book like seven times or something insane. But he like turned, he took notes on it, then read it seven times. And then you know, he does his process.
- [20:57]
Jordy Hayes
He did real actual deep research.
- [21:00]
John Coogan
Seriously. But I really enjoyed it and I think you'll enjoy it too. So you should go listen. But the interesting thing that I liked about it was that it helped me, it helped me understand a little bit what's going on with Starship because we've seen so many setbacks with that program. And when you actually listen to how the risks that Elon takes, it is crazy. First one is that he is not interested in achieving any sort of short term goal. He only wants to develop a system that can do something a million times. And so that says that that has a much higher bar than building like one exquisite rocket that gets there and has like. Okay, yes, we spent, we spent five years and we made sure that every screw was in the exact same place, in the perfect place and everything was designed flawlessly. So that we could get up there and then the next time we want to do it, it's gonna take another five years and another $10 billion. He's like, no, like, the thing that we're going to design needs to be able to go every single day. So it needs to be cheap and fast and we need to be able.
- [22:09]
Jordy Hayes
To copy and paste it.
- [22:10]
John Coogan
A bunch of copy and paste it. And so I think the manifestation of that is that, is that like, you're going to have a lot of failures early on, but then once it gets polished up enough, it's going to start churning and you're set up for much more scalability. The other example he gave was like, Elon would go around the manufacturing line and just be like, why are you using four screws there? Do you think you could use two? Like, save a little weight, like, do something. And the person would be like, well, like two screws, like, thing might fall apart. And he's like, we'll try it. Like, just try it and we'll see how it goes. And if you imagine that manifesting in the starship program, it's like, how many of those experiments are they running? It's like, yeah, that one, you actually need three screws at least. You definitely can't do it. Two screws. And so I imagine that there's tons and tons of those little discs, decisions that like, once you get, like, instead of, instead of starting with like the exquisite system and then tearing stuff down with this, it definitely seems like you started with like the bare minimum and then just like adding things back to like keep it stable so that it actually will work. But when it works, it should. It should be very, very, very cheap, very reliable and actually solve equation.
- [23:18]
Jordy Hayes
This starship launch, the timing. With everything that's been going on in XAI world recently, this launch feels more important than the last few in the sense that Elon and the SpaceX team don't want to give the haters material.
- [23:35]
John Coogan
Totally, totally.
- [23:36]
Jordy Hayes
So this current launch has been delayed a couple times. It's currently slated to. They're going to attempt it as of now in five hours later today. So hoping this one gets off the launch pad and does well. Right. Because if we get another one of those fireworks shows, I think that Elon is going to want to log off X for a little bit.
- [24:02]
John Coogan
Yeah, people are going to be talking trash. Talking trash.
- [24:04]
Jordy Hayes
Or at least pause the ANI posting for at least 24 hours. Four hours.
- [24:10]
John Coogan
Yeah. Well, if you're building a business that's going to space, you got to stay compliant, you got to get on vanta.com, automate compliance, manage risk, prove trust continuously. Vanta's trust management platform takes the manual work out of your security and compliance process and replaces it with continuous automation, whether you're pursuing your first framework or managing a complex program. In other news, Taylor Swift is getting.
- [24:33]
Jordy Hayes
Married the Private Jet enthusiast well, I.
- [24:36]
John Coogan
Feel like most of our audience would know her for her Wall Street Journal op ed in 2014 where she said, for Taylor Swift, the future of music is a love story. Where will the music industry be in 20, 30, 50 years? Before I tell you my thoughts on the matter, you should know that you're reading the opinion of an enthusiastic optimist.
- [24:56]
Jordy Hayes
One of the few enthusiastic be there.
- [24:58]
John Coogan
Yeah, one of the few living souls in the music industry who still believes that the music industry is not dying, it's just coming alive. There are many, many people who predict the downfall of music sales and the irrelevancy of the album as an economic entity. I am not one of them. In my opinion, the value of an album is and will continue to be based on the amount of heart and soul an artist has bled into a body of work and the financial values and the financial value that artists and their labels place on their music when it goes into the marketplace. Piracy, file sharing, and streaming have shrunk the numbers of paid album sales drastically, and every artist has handled this blow differently in recent years. You've probably heard the articles about major recording artists who have decided to practically give their music away for this promotion or that exclusive deal. My hope for the future, not just in the music industry, but in every young girl I meet, is that they all realize their worth and ask for it. Music is art, and art is important and rare. Important, rare things are valuable. Valuable things should be paid for. It's my opinion that music should not be free. And my prediction is that individual artists and their labels will someday decide what an album's price point is. I hope they don't underestimate themselves or underestimate or undervalue their art.
- [26:12]
Jordy Hayes
So did she get this right to date? Not really.
- [26:17]
John Coogan
I think she. I think she got the thing that she got right is that what an album is can be extremely monetized. If you continue to think about what, like the album is scarcity. Like you either have it or you don't. And the Internet kind of reduced that scarcity to zero because you could stream it, you could pirate it, but there is still scarcity to be created. If you are an artist, if you are a musical artist. And so the way she does that now is when she releases an album, she goes on a tour that becomes so big that again there is scarcity because there are only so many tickets at Sofi Stadium. And you have to be there because it's a moment.
- [27:00]
Jordy Hayes
One of the best monetized recording artists of all time.
- [27:04]
John Coogan
Yes, yes. And so she gets the long tail eventually. And eventually her music is essentially free and played in. In groceries.
- [27:12]
Jordy Hayes
I'm going to read you something from their Instagram caption announcing the engagement.
- [27:16]
John Coogan
Yes.
- [27:18]
Jordy Hayes
It's not just a marriage. Dash M Dash.
- [27:22]
John Coogan
No way.
- [27:23]
Jordy Hayes
The perfect love story.
- [27:24]
John Coogan
No way. No way.
- [27:25]
Jordy Hayes
Back on X is calling this out. Saying, claiming that Taylor and Travis are one shot.
- [27:31]
John Coogan
It. No way. What you got Tyler? Was that.
- [27:34]
Jordy Hayes
No, well I was going to say.
- [27:35]
Dan Wang
Something about like her like monetization. Like Kyla Scanlan has this good post. She said Taylor Swift's engagement is actually very relevant to monetary policy because she is the most powerful stimulus tool we have.
- [27:47]
John Coogan
Oh really? How so?
- [27:48]
Dan Wang
Well, I mean her tours are like massive.
- [27:51]
John Coogan
Like you can see the like rise in consumer spending.
- [27:54]
Jordy Hayes
Yeah.
- [27:54]
John Coogan
Oh, interesting.
- [27:55]
Dan Wang
Especially like smaller countries. It's like very noticeable.
- [27:57]
John Coogan
Yes, yes. But, but how does her being married like she could just go on tour and be single, right? Is she gonna sell more tickets because she's married now? Does it allow her to tour more?
- [28:07]
Dan Wang
You could also see it in. A lot of people are talking about birth rates, right? Maybe a new boom.
- [28:12]
John Coogan
Yep.
- [28:13]
Dan Wang
Baby boom.
- [28:13]
Jordy Hayes
Catherine Boyle just posted a picture and just said with the caption captioned their pictures. Pictures just said American dynamism. I do think this will be good for the birth rate. It's also gonna be some for anybody that's in a longer term relationship in their late 20s, early 30s. Pressure is now on. These photos are gonna be getting sent around. They're setting a new bar, right? Quite the floral display by Travis. Gotta give him props there.
- [28:42]
John Coogan
How many, how many kids do you think she'll wind up having?
- [28:47]
Jordy Hayes
She's 35.
- [28:48]
John Coogan
She's 35.
- [28:49]
Jordy Hayes
She's gotta get going. Oh yeah, 1980 and hopefully a ton. Right? I mean I think we'd like to.
- [28:56]
John Coogan
See the last luxury status symbol apparently.
- [28:58]
Jordy Hayes
Like to see at least 10.
- [28:59]
John Coogan
Yeah, that'd be great. Well, if she wants to manage her family's plans, she should get on Linear. Linear is a purpose built tool for planning and building products.
- [29:15]
Jordy Hayes
It's a family planning tool. It could make it work for it.
- [29:18]
John Coogan
For modern software development, streamline issues, projects and product roadmaps. Start building I don't know, she could probably use Linear. She's probably developing software and websites and stuff. Anyway, what we should talk about is this post from Robert Sterling. The only form of wealth that's ever mattered Screenshotting the Financial Times the Ultimate Status symbol A big family. So the Financial Times writes, a flex of Uber wealth in 2025 is multiple children, all the while preserving pre parenthood lifestyle interests and physique. What is the ultimate luxury status symbol? Jordy Hayes Once upon a time it may have been flaunting a rare handbag sports car or flashy watch, but with the soaring costs of living and shrinking household sizes and depreciation of tay cons, sports cars are now they're given tycoons away. They're giving tycoons away. The only thing that you need that you can flex your wealth with is having kids, specifically lots and lots of them, says the Financial Times. For most working parents, quote, and particularly those living in cities, even to have one child comfortably is a major economic calculation that requires considerable financial stability, says Eliza Philby, author of Inheritocracy. It's time to talk about the bank of Mum and dad. Well, that was also true historically, when having an enormous brood was bolstered by a need for labor, religious imperatives, and preserving family legacies in the face of high infant mortality. Children today aren't a source of positive household cash flow. They are a drain on it. But I think we got to turn this around.
- [30:57]
Jordy Hayes
We got to put these kids to work.
- [30:58]
John Coogan
We got to put them in the mines, in the minecraft, or get them on.
- [31:03]
Jordy Hayes
If you got a. If you got once your kid hits three, you should set them up with a WAP account. I was about to say pay for college. Yes, do it. Don't make mistakes. Actually make some mistakes. But figure it out.
- [31:14]
John Coogan
Hey, I mean in the Stevens household you have to pay the bills making tech decks.
- [31:20]
Jordy Hayes
Start making courses for other three year olds. How to be a three year old. Yeah, don't of course the official course.
- [31:25]
John Coogan
The Anduril chairs to pay for your college buddy. There's only so many of those to get around. We're not selling. You're still long. You got to pay for those with skateboards. The reality is that middle class parents do not support kids to 18. Philby says that for families who can afford to, it's often closer to 30 with costly childcare, a lack of family support systems, and a global trend of.
- [31:52]
Jordy Hayes
Women hiring childcare for their 25 year olds.
- [31:55]
John Coogan
I guess, yeah. In some cases, conceiving children later There is a feeling that one child is increasingly the norm for dual income households. Philby says two is a bit of a push and three or more is just not just an anomaly. You need to be super rich. Official birth rate figures in many countries have hit all time lows. In the uk, the Office for National Statistics says that the fertility rate is 1.44 children per woman, while in the United States that figure is 1.6. In some Asian nations, such as Japan and South Korea, the rates are 1.2 and 0.75, respectively. I was talking to somebody who is very bullish on South Korean tech because of AI and a lot of the companies that they sell. SK Heiner. Yeah. And there's a whole ton, I think they have their own, like, S&P 500 of like, really, really great companies.
- [32:46]
Jordy Hayes
They have their own TVPN.
- [32:48]
John Coogan
They do, they do. But I had no idea that the birth rate was so low.
- [32:53]
Jordy Hayes
That's crazy.
- [32:53]
John Coogan
0.75 is really, really low. So they got to turn that around. But while one and done may be booming as a cornerstone of modern middle class parenting culture, so too has affiliate fetishization of the opposite end of the spectrum. In other words, ogling extremely wealthy figures in the public eye whose picture perfect families never seem to stop growing. Behold the fixation of frazzled millennial working women and others with the tradwife movement, a social media phenomenon that glorifies homesteading, milk maids and taking care of your husband and offspring. Its brightest star, Hannah Nealman Neeleman, I don't know of Ballerina Farm, has attracted a 10 million strong following on Instagram, thanks in no small part to her eight immaculately disheveled blonde children with her husband, Daniel Neeleman, the son of JetBlue founder and airline mogul David Nealman.
- [33:43]
Jordy Hayes
Hopefully they sold before JetBlue became a penny stock.
- [33:46]
John Coogan
Oh, my God. Yeah.
- [33:47]
Jordy Hayes
Get out, get out, get out.
- [33:52]
John Coogan
In the celebrity orbit and beyond the trials and tribulations of the the ever expanding Kardashian clan, Alec and Hilaria Baldwin sent the Internet into meltdown earlier this year with a TLC reality television series called the Baldwins. I had no idea this was a thing. Which documents life between their Manhattan apartment.
- [34:10]
Jordy Hayes
Try to pull up this picture East.
- [34:12]
John Coogan
Hampton mansion with their 7 children and 8 pets. I had no idea Alec Baldwin had 7 children. 8 pets. I wonder what pets he has. Huge fan.
- [34:21]
Jordy Hayes
You know that. You know that Hailey Bieber is Alec Baldwin's daughter?
- [34:25]
John Coogan
No.
- [34:26]
Jordy Hayes
Is that right? Am I right on this, guys?
- [34:28]
John Coogan
Wait, what? That's true. No way. Okay. Learn something new every day.
- [34:33]
Jordy Hayes
Pretty sure that's true.
- [34:35]
John Coogan
Yeah.
- [34:35]
Jordy Hayes
Might need to truth zone it.
- [34:36]
John Coogan
Yeah.
- [34:37]
Jordy Hayes
No, no, no. Uncle and niece.
- [34:38]
John Coogan
Uncle and niece. Okay, so they are.
- [34:40]
Jordy Hayes
Okay. Okay. Okay.
- [34:41]
John Coogan
Yeah.
- [34:41]
Jordy Hayes
Got it.
- [34:42]
John Coogan
Interesting.
- [34:43]
Jordy Hayes
But here, here's the picture of Alec Baldwin and his family still just pumping him out.
- [34:48]
John Coogan
Looks great. Looks great. Take those kids to a wander. Find your happy place. Book a wander with inspiring views, hotel, great amenities, dreamy beds, top tier cleaning and 247 concierge services. It's a vacation home, but better folks anyway. Huge families are increasingly visible among the 1%, especially in some of the world's wealthiest and most competitive enclaves, such as New York City. In her widely read if controversial book Primates of Park Avenue Wednesday, Martin member memorably observes that massive families, they were everywhere. On the Upper east side, a neighborhood with some of the most expensive real estate, schools, nannies and hobbies in America. Jordy, were you about to say I.
- [35:27]
Jordy Hayes
Was about to dive into that. Four is the new three. Previously conversation stopping, but now nothing unusual. She writes. Five is no longer crazy or religious, it just means you are rich. And six is apparently the new townhouse or Gulf Stream. According to a study by Forbes of more than 700American billionaires, at least 22 have seven or more children, often from multiple marriages and adoption, including perhaps most famously, Elon Musk. Regularly named the world's richest man, Musk has become a poster boy for billionaire procreation and a vocal proponent of pronatalism, which he sees as vital to humanity's survival and declining birth rates. Fascination with the uber elite, with how they live their lives and run their households, is not new. A raft of high end fashion and consumer lifestyle brands have turned to notions of parenting with almost unlimited resources and incorporated them into their product offerings and marketing efforts. Artipop offers $800 velvet and cashmere baby carriers that have been heralded as the Birkin of mom gear. Heralded but Harold Haraldo Rivera Geraldo rebranding wearing a baby as an ultimate.
- [36:34]
John Coogan
I mean it is the ultimate luxury accessory. Much like having graphite in your software development.
- [36:41]
Dan Wang
100%.
- [36:41]
Jordy Hayes
I was thinking there too.
- [36:43]
John Coogan
It's the Birkin of code review graphite.dev code review for Age of AI graphite helps teams on GitHub ship higher quality software faster. You can get started for free. If I don't mention Pavel Durov in here, I'm going to stop reading anyway.
- [36:57]
Jordy Hayes
I still when I'm walking around with my 1 year old and my 3 year old, people often assume that I'm the uncle and. And our surprise.
- [37:07]
John Coogan
Because you're young.
- [37:08]
Jordy Hayes
Yeah. Oh, just. It's still. Sure seems wild. Even though if you go anywhere slightly off the coast.
- [37:15]
John Coogan
Yeah, yeah.
- [37:16]
Jordy Hayes
It starts to become commonplace.
- [37:18]
John Coogan
Yeah. Super normal. Yeah. It is interesting that if you. If you actually look at. If you look at birth rate trends by income bracket for a long time, the higher the. The, like, the lower income cohorts would have more kids. And so technically, I think from an economics perspective, having children was an inferior good. It was something you did more. It was like the equivalent of Costco. It's like the opposite of what they're saying here. But really what we're identifying is like. Is like there's a barbell effect where at the high end you get a lot more kids and at the low end you get a lot of kids, but in the middle there aren't that many kids.
- [37:58]
Jordy Hayes
Yeah.
- [37:59]
John Coogan
And this is. I'm going to make a movie reference that you haven't seen, so I won't even try.
- [38:04]
Jordy Hayes
Hit me. Hit me. There's a 1% chance.
- [38:06]
John Coogan
Idiocracy.
- [38:07]
Jordy Hayes
No.
- [38:10]
John Coogan
We should pull up the intro to idiocracy because it is hilarious.
- [38:15]
Jordy Hayes
John Ross chat says Nick Cannon has 12 kids.
- [38:17]
John Coogan
That is crazy.
- [38:18]
Jordy Hayes
That is a big number.
- [38:19]
John Coogan
Wow. Very good.
- [38:21]
Jordy Hayes
I think. I mean, it's also, I'm guessing that's across a number of different relationships. It is.
- [38:29]
John Coogan
It is.
- [38:29]
Jordy Hayes
Yeah.
- [38:31]
John Coogan
So mini Me Designer collections and $600 high tops allow an army of children to dress like their parents as well as one another. And white labels such as Patek Philippe and Dolce and Gabbana have long placed glamorized visions of family at the heart of their advertising campaigns. Of course, you never own a Patek. You merely hold on to it for the next generation, or Patek, as they say. Newer efforts from Bottega, Veneta and Berber evolution. Oh, yes. You want to play this? This is the. I think this is the intro to. To Idiocracy. Let's play.
- [39:04]
Jordy Hayes
This was at a turning point. Natural selection. The process by which the strongest, the smartest, the fastest reproduced in greater numbers than the rest. A process which had once favored the noblest traits of man now began to favor different traits. Most science fiction of the day predicted a future that was more civilized and more intelligent. But as time went on, things seemed to be heading in the opposite direction. A dumbing down. How did this happen? Evolution does not necessarily reward intelligence. With no natural predators to thin the herd, it began to simply reward those who reproduced the most. And left the intelligent to become an endangered species.
- [39:51]
Wade Foster
Having kids is such an important decision.
- [39:55]
John Coogan
We're just waiting for the right time. It's not something you want to rush into, obviously. No way. Oh, shit.
- [40:03]
Wade Foster
I'm pregnant again. I got too many damn kids.
- [40:07]
John Coogan
Thought you was on the pill or some shit. Hell no. Must have been thinking of Britney.
- [40:12]
Wade Foster
Britney?
- [40:13]
John Coogan
No, you.
- [40:15]
Wade Foster
There's no way we could have a child now. Not with the market the way it is, no.
- [40:19]
John Coogan
God, no. That just wouldn't make any sense.
- [40:21]
Jordy Hayes
Come on over here.
- [40:23]
John Coogan
He don't care about you. Yeah, well, there must be something he likes over here.
- [40:28]
Jordy Hayes
Mean nothing to me, baby.
- [40:30]
John Coogan
Oh, shoot. It wasn't me. It wasn't me.
- [40:34]
Wade Foster
Well, we finally decided to have children and I'm not pointing fingers, but it's not going well. And this is helping. I'm just saying that before I have.
- [40:44]
John Coogan
In vitro, maybe you should be willing to.
- [40:45]
Dan Wang
It's always me, right?
- [40:47]
John Coogan
Well, it's not my sperm count.
- [40:50]
Jordy Hayes
Yeah.
- [40:51]
Dan Wang
Yeah.
- [40:52]
Jordy Hayes
I'm gonna fuck all y'.
- [40:53]
John Coogan
All.
- [40:54]
Jordy Hayes
Okay, okay. We gotta cut this off.
- [40:57]
John Coogan
You get the idea?
- [40:59]
Jordy Hayes
I got the idea.
- [41:00]
John Coogan
Decision fatigue from the 138 IQ.
- [41:05]
Jordy Hayes
Simply too smart to have kids.
- [41:06]
John Coogan
Too smart to have kids. Anyway, let's continue.
- [41:10]
Jordy Hayes
Yeah, this is an interesting line. So there's been other brands. Buttega Veneta has had a campaign with ASAP Rocky, which has been cool. I thought this campaign was brilliant. There's a line here. Healy thinks these campaigns come at a time when the luxury industry is struggling to maintain its cultural relevance, reflected in a cooling appetite for products as social signifiers in a fall in global sales. Focusing on family reflects an attempt to move into the realm of behaviors and values and away from physical things. You can't dupe having a family, Healy says. It's, you know, you could get a dupe of a. Of a Birkin or something like that.
- [41:50]
John Coogan
Oh, that's what dupe is.
- [41:51]
Jordy Hayes
Yeah. Or something from the Row or whatever. Every luxury brand gets knocked off immediately. Healy says it's a very long term commitment, not to mention one of the most significant and transformational that you can make in your life. But it's not just having kids that is venerated by brands and vaunted as a status symbol. It's about how you are having kids and to what extent you can maintain your pre parenthood lifestyle. For many celebrities, this means an army of childcare support. Kim Kardashian is said to have 10 nannies on a 247 rotation for four children, while the Baldwin family have two on staff that feels low for how many kids I saw in that picture. To be honest, childcare positions in the US of this nature can easily command annual salaries of more than 200,000, though his more standard wage would be closer to 85,000. Still, paid support of any kind remains an unobtainable luxury for the majority of families. Yeah, for me, I noticed this. I noticed the jump in how I was living at 25 pre kids, realizing as soon as you add kids, everything that you do, whether it's where you live and how you travel becomes. Travel instantly becomes. If you were staying at nice hotels and now you're traveling and you gotta get a hotel for your nanny, you gotta get a hotel for your kid, then a hotel room for your kid, then you add a. Then you had a second kid. And so now you need, in some cases you need three extra rooms, one for the nanny, one for each kid, one, one for the couple. And so the actual like cost of something as simple as a weekend trip can, can 4x pretty quickly. And it certainly inspires you to grind harder.
- [43:34]
John Coogan
In my experience, 100% this version of parenthood doesn't mirror the experience of most people. Healy says. There's a version where you're still constantly meeting friends, returning to your pre baby body, showing up at the club or late night event, not being tired all the time, moving out to the suburbs or wearing clothes with milk splattered over them. Fashion has always traded on allowing us to project something a little bit better than we are. But having a large family also sends a signal of confidence in the future.
- [44:00]
Jordy Hayes
We're also the generation that grew up with suburbs being bad and something to avoid. And as an adult with kids, I realize the suburbs are incredibly underrated.
- [44:12]
John Coogan
Yeah, heard it from Dr. Drew yesterday. He lives next to a golf course. It's amazing. A demographic that may feel more secure than most, those with more money. Musk paints his pronatalist vision in stark terms and has some highly unorthodox personal family values. But among the traditional conservative right, whose social media sway is growing and who champion Americans having a large household, the question of who should be having more babies is an uncomfortable one. A sizable portion of the extremely wealthy pronatalists say they want us to use breeding to fashion a better human race. Philby says. But the current fetishization of being a mother of multiple children can reduce women to a kind of birthing machine, fulfilling her social societal duty and demonize women working incredibly hard and contributing economically toward society who are having few, fewer or no children, whether by Choice or necessity. I think Nadia Asperuha had a good rebuttal to that, which is that tech can certainly embrace and kind of invalidate this false dichotomy by creating a more welcoming ecosystem and not like noveling when a woman shows up.
- [45:19]
Jordy Hayes
Yeah. I mean, it's interesting to note that a lot of the technology that we take for granted today makes parenting like a little bit easier, but not dramatically easier. Right. The sort of. I think people, people tend to judge, you know, the family out to dinner with the kid on the iPad.
- [45:38]
John Coogan
Yeah.
- [45:38]
Jordy Hayes
And if you haven't had kids, you don't realize that that many kids could be so would not be able to.
- [45:42]
John Coogan
Strap the VR headset right on.
- [45:44]
Jordy Hayes
Yeah. And just bolt them down to the kid seat.
- [45:50]
John Coogan
Yeah.
- [45:50]
Jordy Hayes
And then just fully locked in.
- [45:52]
John Coogan
No, when I, When I go out to the highchair.
- [45:55]
Jordy Hayes
Yeah.
- [45:55]
John Coogan
No, yeah. When I go out to the restaurant, I bring the full racing rig with the wheel, the steering wheel and the pedals and the VR headset and I'm just like, lock in, brother. Lock in.
- [46:06]
Jordy Hayes
You gotta beat this time.
- [46:07]
John Coogan
You're doing the Nurburgring.
- [46:08]
Wade Foster
Doing the Nurburgring.
- [46:10]
Jordy Hayes
We're not gonna.
- [46:10]
John Coogan
I don't wanna hear a peep out of you. No, I'm not having a. Not wasting time with an iPad kit.
- [46:16]
Jordy Hayes
No. But I mean, we, you know, step it up. We've tried the iPad here and there. We don't, we don't do it anymore. But the kid is, the kid is just. The kid is just, you know, my three year old will just run laps around the restaurant for like two hours straight.
- [46:32]
John Coogan
Yeah.
- [46:32]
Jordy Hayes
And it's cool because he likes to socialize. He'll walk up to other tables and. And like try to grab a french fry or something.
- [46:39]
John Coogan
Oh, yeah, that's a little bit. Yeah. No, I love it. I love when running around the restaurant just being crazy. It's so funny. Nothing brings me more joy because I'm like, that's what I want to do.
- [46:48]
Jordy Hayes
Yeah.
- [46:48]
John Coogan
I want to get some. Stretch my legs right now. I don't want to sitting here.
- [46:52]
Jordy Hayes
My, my little guy was stood up. We were at, we were at little beach house in Malibu and he just stood up. Last time we were. There was a Sunday, there was a DJ playing. He just put his chair up next to the DJ stand and just stood on it.
- [47:09]
John Coogan
Yeah. The iPad thing is like a, is like an endless source of trolling for me. So the four year old's like, oh, for my next birthday, like, I think I want like a tablet. I'm like, oh, like what? Like you want it, like, because, you know, some kid, like, told them, like, that they're the most incredible thing in the world. Of course. And I'm like, yeah, like, like, let's make one, like, out of cardboard. So I'll buy. I'll buy you a CPU six hours into a crafting project where you're like, what do you want to. What. What do you want on the screen? Let's draw it on with crayons, which is six hours into this thing. Like, oh, you want to have a. He was like, I want. I want one for my birthday. I was like, oh, so you want the. You want the theme to be like, tablet based technology. Like, we'll bake you a cake that's the shape of an iPad. And he's like, no, I want the actual iPad cake coming your way, buddy. Don't worry about it.
- [47:54]
Jordy Hayes
Don't worry.
- [47:54]
John Coogan
I got you paper mache iPad pinata that you will smash and get candy out of. That we will make by hand. But I think you'll have to wait. You have to assemble one on your own with a box of scraps in a cave. That said, following trad wives or billionaire spouses with lots of children on social media isn't necessarily a retreat into the home and history. As with many objects of aspirational focus, sometimes these trends are rooted in a type of parasocial cosplay, exploring styles of life and livelihood that are far removed from or will never be our own, nor do we really want them to be. Much of the Internet is consumed as if it's a type of speculative fantasy fiction. Healy says the ballerina farm family, for example, represents a vision of economic security. So much diet code, clearly defined gender roles, and a certain degree of purpose. People might engage with it as a type of entertainment or escape, but many will also look at it and think, in the real world in 2025. In no way do I actually want that. Why not?
- [48:59]
Jordy Hayes
I. Yeah.
- [49:00]
John Coogan
Move out to the farm.
- [49:02]
Jordy Hayes
I don't know. The more the merrier.
- [49:05]
John Coogan
More the merrier.
- [49:06]
Jordy Hayes
Within reason. Within reason. No, I do. I do think. I think that anecdotally from. From what I've seen in my social circle outside of work, I do think that kids are 100% a status symbol. I also think it's incredibly unfortunate that it's gotten to that point.
- [49:26]
John Coogan
Yeah, I wish there was a polymarket on the birth rate. I don't know if there is. We are, of course, sponsored by polymarket. And you can see the polymarket's on the, on the ticker. We will. We will need to spin up something I want to see if.
- [49:39]
Jordy Hayes
I mean, there's already. There's a polymarket on, on the, on the Swifts. Oh, really? I guess it would be Taylor Kelsey.
- [49:46]
John Coogan
Okay. And who, who is she marrying?
- [49:49]
Jordy Hayes
Travis Kelsey.
- [49:50]
John Coogan
What does he do?
- [49:51]
Jordy Hayes
He is, I think from what I can remember, he's involved in like the pharmaceutical industry.
- [49:58]
John Coogan
Okay. As a spokesperson.
- [50:03]
Jordy Hayes
I can't quite remember, but I think he also played some, some sport. Okay, we'll have to. We'll have to look into it.
- [50:11]
John Coogan
Well, I'm sure he'll be more popular now that he's marrying Taylor Swift. Like, people probably dig into his backstory.
- [50:17]
Jordy Hayes
And like learn, figure it out and stuff. For sure.
- [50:19]
John Coogan
It'll be interesting. We'll be following it for sure. Anyway, let's go to this post by young Macro, one of my new favorite posters.
- [50:26]
Jordy Hayes
He's been on an absolute tear.
- [50:27]
John Coogan
He has been on a tear and.
- [50:29]
Jordy Hayes
He highlights that is the dynamic that he's experiencing right now. He says the hyper reality version of the bedridden industrial mag magnate envying the dashing young socialite archetype is that basically every one of your billionaire idols, Elon, Teal p, Marcus Sama, etc. Feels intense jealousy every time they witness an anon zoomer surf the cutting edge of the algo, purely organically.
- [50:52]
John Coogan
Donald Boat. Donald Boat.
- [50:54]
Jordy Hayes
I bet you every. I bet you every other day they see a random zeet that makes them ache to have once experienced being the guy to have posted it. Enjoy every second of it. Anon, you're the nubile maiden bathing at the village creek as the laboring brutes admire from behind the bush.
- [51:12]
John Coogan
This is actually sort of tied to what we were just talking about. This is great.
- [51:16]
Jordy Hayes
So if you're anon zoomer out there surfing the cutting edge of the algo, just know that you can parlay that into a $50 million Series A if you do it right.
- [51:27]
John Coogan
Yeah, that's great. Well, we should move on to this story in the Wall Street Journal. A billionaire, a psychic and a bad investment. The friendship breakup from hell. Of course you want to stay away from these bad investments. You want to get on public.com investing. For those that take it seriously. Do not take it casually. Take it seriously. They got multi asset investors. I think we're allowed industry leading financial advice. We just say take it seriously and don't be a casual. Anyway, a woman convinced her best friend, an heiress to the Thomson Reuters empire. We've of course had the CTO of Thompson. Reuters on the show didn't get to talk to him about this. I need to have him back. I'm back on to invest tens of millions of dollars into a crypto meme coin created by a psychic. It went to zero, of course. And this is in the Wall Street Journal magazine. So over a decade, Taylor Thompson and Ashley Richardson were inseparable. A fight over money destroyed it all. Oh my God, said Taylor Thompson, clapping her eyes on Ashley Richardson for the first time. You have those fabulous heroin chic arms. In 2009, both women were lounging in the backyard of a Malibu home of Beau St. Clair, a film producer and mutual friend. Richardson wearing a muscle tee over her bikini bass in the sun. Muscle tea like a stringer, you know.
- [52:49]
Jordy Hayes
Kind of like that gold gym enthusiast.
- [52:52]
John Coogan
I literally don't know the name for the non bodybuilding version, but it's like a tank top. A tank top. A tank top, yeah, tank top.
- [52:58]
Jordy Hayes
Richardson wearing a muscle seat over bikini bass in the sun. While Thompson sat carefully covered in a flowy outfit and hat, her then 10 year old daughter clutched a hot pink mini Birkin. Richardson, a lanky six foot tall blonde, was a free spirit who went on to build a career designing social media campaigns for companies like ford Motors and McDonald's. Thompson was an heiress to Canada's wealthiest family. An eccentric with a self deprecating sense of humor. She went to dinners and party with what parties with wild hair and drapey distressed clothes by California designer Rick Owens. Let's give it up for Rick. She was a subversive secret billionaire, says one mutual friend.
- [53:32]
John Coogan
Okay.
- [53:32]
Jordy Hayes
But a few crucial commonalities assured silliness, a love for animals and a deep spirituality drew them together. Thompson liked that. Richardson had spent 55 years in India working with a spiritual leader named Amma, the so called hugging saint. Richardson bonded with Thompson's daughter, whom she recalls as precocious and a quirky little being. Taylor is Holly Golightly, adventurous, bohemian spirit, says Richardson. She has this big beautiful heart when she lets her guard down. Both women have adhd, she adds. Because of that, I think we got each other. Richardson soon became part of of a small Los Angeles friend group that Thompson called her inner sanctum. Whenever Thompson would land in la, says Richardson, her phone would blow up. The women, often with Richardson's girlfriend, would order Nobu takeout and pair it with tequila. At Thompson's beach house, Richardson made Sunday dinners and frittatas at the heiress's Bel Air mansion. When Thompson had staff there, her assistants chopped onions. When she didn't, Thompson was the first to do the dishes. And Richardson taught to Thompson's eager than.
- [54:34]
John Coogan
Teenage where daughter how to roast potatoes for New Year's Eve. They planned a menu that included chocolates and truffles. Also an onion to chop for caviar. Reminded Thompson in a text message at the time. I can see the problem here already. They were not doing enough data analysis on Julius. Yeah, Julius could have changed everything in this equation totally. What analysis do you want to run? Chat with your data, get expert level insights in seconds.
- [55:01]
Jordy Hayes
The story would have ended here. They were running.
- [55:04]
John Coogan
If they run their life, they just become data analysts powered by Julius.
- [55:09]
Jordy Hayes
But instead we're forced to continue here. Over the next decade, the friends traveled to Italy and London, bought the same via Life vegan feta and stocked up on Rite Aid hand cream. It's very random. Richardson remembers the details samely Unhinged article remembers the duo peeing in the bushes at a Rolling Stones concert. It was Thompson's first ever. What is this writing? I can't even read this out loud. We gotta get to the part where they start slanging checks.
- [55:36]
John Coogan
Okay, let's scroll down. Richardson had grown up in an affluent part of Monterey County, California, where she attended elite prep school and was skiing by age two.
- [55:46]
Jordy Hayes
There we go crazy.
- [55:47]
John Coogan
But Thompson's wealth was a different ballpark. We would go somewhere for a few days and she'd be buying houses like other people buy mugs. Though there was a lot of it. Money didn't interfere with their relationship. The reason we'd be friends because there was no financial connection. Richardson could be defensive about the way people used Thompson. At the Frieze Art fair in London, Richardson recalls attendees descending on the heiress. People know who she is and that she will drop millions, says Richardson. It was nauseating. There was one time. There were. Then there were one time friends who Thompson later assumed were using her for her money. She had a nickname for them. Taker. Don't be a taker. Now the relationship between Thompson, 66, and Richardson, 47, has exploded into an epic battle that landed the pair in court. But this time, the billionaire is accusing her one time best friend of doing the taking. The story is based on interviews. Blah, blah, blah, blah, blah. What went so wrong? Okay. By the time Thompson met Richardson, the heiress had spent decades trying to prove herself to her family. For the Thompson's control of the empire passed down the male line. Her. According to people familiar with the family, Taylor, the middle child and only girl, felt less favored than her two brothers. And her efforts to forge her own path led to occasional periods of estrangement. But much of the tension with her brothers revolved around money. Thompson family in 2024 was the world's 10th richest. Wow.
- [57:03]
Jordy Hayes
Give it up for the Thompson.
- [57:04]
John Coogan
Let's hit the gong for the Thompson thing.
- [57:06]
Jordy Hayes
There we go. 10th richest family. According to Bloomberg. And Taylor wanted equal access. The family holding company Woodbridge, owns a majority stake in media and technology company Thompson. Reuters. Her older brother David is the chair of both companies. Thompson pursued a career in acting training at the American Repertory Theater in Cambridge. She performed with Shakespearean theater companies in Massachusetts and Los Angeles and had roles in in the TV show Matrix, Canadian drama TV show Canadian drama Forever Night about a vampire working as a detective. Okay, that's very cool. So big into tv. Maybe you should go.
- [57:40]
John Coogan
No, no, I'm not big into tv. I'm a cinephile. Thompson often suspected people were trying to use her for her money. According to people that know her, she insisted those around her sign non disclosure agreements from assistance to an ex boyfriend of her then 20 year old daughter. And she could get aggressive if she thought those terms were breached. Thompson even hired an infamous Hollywood private investigator, Anthony Pellicano, to spy on her former nanny who she suspected of sharing personal information with her daughter's father during a custody battle. I want you to do whatever you can to get information on Pamela, said Thompson to Pellicano on a recorded call played during Pellicano's 2008 wiretapping trial, after which he was convicted. Just get it. I'm not gonna ask questions. Crazy. By the fall of 2015, Thompson and Richardson's friend St. Clair were losing their battle with ovarian cancer. Her closest friend surrounded her in her final months. Richardson and her partner at the time had weekend slumber parties at St. Clair's ranch home. St. Clair's producing partner Pierce Brosnan then came by. Wow. Thompson decorated for Christmas with Dr. Seuss original Grinch sketches from her personal collection. Okay, we gotta get to the crypto stuff. There's some crazy stuff in here. Let's just keep scrolling, keep scrolling, keep scrolling. Thompson's pokes said this is all false. Blah, blah, blah.
- [58:56]
Jordy Hayes
With the pandemic, Richardson's work was drying up. In a fit of anxiety, she googled a burning question. Had anyone predicted any of this? She stumbled upon Michelle White Dove, celebrity psychic. She dropped $25 a month for White Doves newsletter, then largely ignored it until the spring of 2021 when she noticed the psychic had recommended a new crypto token Persistence, white Dove wrote. This is another dark horse that's going to come up on everybody and be a big dog. Get it and sit on it. Which is what I would tell myself. The value of Persistence's token, called XPRT, quadrupled from less than $3 in April 20 to as high as $13 by the next month. That summer, Richardson brought up White Dove's predictions to her friend. What is the link to that website of the channeler Thompson texted? She followed up with Robert Cebella, an astrologer and intuitive she regularly consults. Combining astrology and crypto is so good.
- [59:54]
John Coogan
It'S a match made in heaven.
- [59:55]
Jordy Hayes
Absolutely.
- [59:56]
John Coogan
What more do you need?
- [59:58]
Jordy Hayes
An intuitive she regularly consulted for advice both personal and financial. Once, when Thompson tried his Xanax after a panic attack, she asked Sabella for he replied, I'm getting that Xanax is not good for you right now. Stop taking it and find another I mean fair advice. He also weighed in on her investment, blazing there those answers I promise you, he said. But other coins show promise. ADA has a very high reading on it. A 10. Persistence does as well. Even higher.
- [60:27]
John Coogan
Oh no.
- [60:28]
Jordy Hayes
And so they're using the astrology readings for as financial advice.
- [60:35]
John Coogan
So with Richardson's help, Thompson invested more than $40 million in messages after the initial purchase. Richardson cheered Persistence's early success, but at times she pushed back at Thompson's requests, including when she suggested buying 60 million of the token. Are you sure you want 60? I will try. Still think you should diversify, Richardson wrote her. That same day, Thompson told Richardson that she would seek access to what she viewed as her share of the family money. I'm going to write to my brothers directly, David and Peter, Thompson wrote. As you know, as you as I know you both are more than aware our family branch Thompson and her daughter has been completely locked out of our any voice of control of stewarding our future financial wealth. She acknowledged having always been one for riskier investments like the rest of the than the rest of the family, but said she had been exposed to valuable opportunities like crypto. She accused her brothers of discrimination. The 2022, the 2020 infrastructure around my family branch and the inherent restrictive compliance which was put into place completely removed any opportunity of me stewarding meaningful investments. To be blunt, it is no longer acceptable. For the next several months, Richardson spent as many 20 hours, as many as 20 hours a day hunched over her laptop researching cryptocurrencies and and executing trades for Thompson. Richardson says Thompson provided instructions over daily hours long phone calls and messages. They Just become a hedge fund. There's just day trading. This is crazy. Richardson. They get into physical custody. Look. Richardson stored physical wallets like usb, like devices holding millions in crypto around her home, including at one point in her then partner's underwear drawer. Richardson, who, whom Thompson didn't pay and who has no financial background, says that moving that money was exhilarating and stressful and then debilitate, debilitatingly scary.
- [62:30]
Jordy Hayes
So at this point, they're managing $140 million in crypto that is based off of astrology. Persist. I looked up the chart for XPRT, the one they tried to put 40 or 60 million into. @ the time that they were investing in, it was about, I guess, $3 per token. Now it's sitting at less. Less than 3 cents.
- [62:52]
John Coogan
Less than 3 cents. Wow. That is like a complete and total loss. Like, wow, they had 140 million. They probably walked away with like 140,000. That's really bad. Today, Richardson is driving an Uber up and down California Central Coast, a job she took to make ends meet. I had this charmed, magnificent life. She sounds dejected and wistful. Her life wasn't charmed because of Thompson, she now says, but in spite of her she had a lively community of friends in Los Angeles, a partner she loved, and a thriving career. There were dinners and parties, she says, a chosen family that included Thompson and her daughter. I don't look at them and say bad people. I look at them and say, this is the catastrophe of having. Having money. Now she lives in her childhood home in Monterey County. A private investigator's unannounced visit to the home of her mother and stepsister this August has led her to worry for her family. Said I was hired by Taylor, Thompson says Richard's mother of the woman, a former FBI agent who now works for the consulting group Guidepost Solutions. Richardson has applied for food stamps. She can't afford paid medication for her dog, Jasper. She is buried in legal work.
- [63:56]
Jordy Hayes
Wow, this story has been a disaster.
- [64:00]
John Coogan
She lost more than $80 million in crypto associated with Richardson's involvement. Thompson did. Asked about the private investigator, a Thompson spokesman, men said Guidepost was making continued efforts to recoup the tens of millions of dollars from. Of Mrs. Thompson's. Of Ms. Thompson's money under Ms. Richardson's control. Because, of course, any one of those thumb drives could still have, like, a bunch of Bitcoin on it that you, like, forgot to sell or trade into something else. And so whenever a crypto deal happens, there's always a Lot of like exhaust nonsense going on. Persistence apparently rewarded Richardson by giving her a secret kickback of $783,700. $702 worth of XPRT, the lawsuit alleged. So they were like, you're bringing us a whale. We'll kick you back. Which is not good. And you need to disclose that obviously if you're getting commissions or something like that, you're not acting as a fiduciary. You're also not licensed or trained or you don't have any reason to be doing this. But what a mess.
- [65:03]
Jordy Hayes
Yeah. The lesson is would have hoped there was a white pill in here, but I think it's just total disaster.
- [65:09]
John Coogan
Total disaster. Should have gone long t bells instead.
- [65:14]
Jordy Hayes
Wow. Friend. Friend of the show just texted me something very funny about.
- [65:20]
John Coogan
Can you.
- [65:20]
Jordy Hayes
About this story that I cannot read off without completely doxing doxing him. But this. This goes deeper than we thought.
- [65:30]
John Coogan
Okay.
- [65:30]
Jordy Hayes
But anyways, let's move on to the next story. This was a total black pill. But anyways, if the. I guess moral of the story. Don't day trade crypto. Don't day trade your friends crypto based on your astrological readings.
- [65:48]
John Coogan
Yes.
- [65:49]
Jordy Hayes
And yeah. Just stick to betting on horses.
- [65:54]
John Coogan
Trust the excellent experts.
- [65:55]
Jordy Hayes
Really go down to the track.
- [65:56]
John Coogan
I mean it seems like stick to real estate. Like, you know, she was known for just like buying houses on a whim. And that seems like kind of ridiculous.
- [66:04]
Jordy Hayes
You can overpay for something, but hard to have.
- [66:06]
John Coogan
I bet almost all of those have been. Yeah, very. Have done very well even since the real estate market's been booming. Anyway, Pavel Asperuhov, friend of the show says Travis Travis Kalanick's corporate catering service is insanely good. This is brilliant kitchen. Faux Chipotle is better than Chipotle. Delivery is the the exact same time every day without fail. Cheaper than competition. TK is a beast, man. I mean we gotta get this would.
- [66:33]
Jordy Hayes
Change this Grace has been devastating.
- [66:38]
John Coogan
This could be the thing that gets us from 100k to a million.
- [66:41]
Jordy Hayes
Devastating for many technology brothers out there that. That used to be able to rely on.
- [66:45]
John Coogan
Yes.
- [66:46]
Jordy Hayes
On quality meal.
- [66:49]
John Coogan
Yes.
- [66:50]
Jordy Hayes
And it has just gone down the drain.
- [66:52]
John Coogan
You know the problem is with cloud kitchens. Not very good name recognition. Very much under the radar. They need to get. Travis needs to get on profound. He needs to get his brand mentioned in ChatGPT. He could reach millions of customers who are now using AI to discover new products and brand.
- [67:12]
Jordy Hayes
We gotta try this out.
- [67:15]
John Coogan
There's another post from polymarket in here. Breaking Bitcoin is now Predicted to crash below $100,000 this year. 67% chance before 2026. I mean, Bitcoin's 110. I remember this, this viral video of like bitcoin goes up and then it crashes down to $100 and then it crashes down to $1,000 and it crashes down to $10,000 and then it crashes down to, to $100,000. It's like we're kind of using like silly terms for like, what is like a pretty remarkable rise over a very long time.
- [67:49]
Jordy Hayes
Yeah.
- [67:50]
John Coogan
Anyway, I'll leave it to my astrologer to decide whether or not I should buy or sell bitcoin. Just kidding.
- [67:57]
Jordy Hayes
Today, Nick here has an As a very funny post, there was a new Google image banana generation product released today. It's very cheap, it's very good, and Nick is, what a great name. Always taking advantage of the moment to post a funny picture of Sam.
- [68:16]
John Coogan
He loves it.
- [68:17]
Jordy Hayes
But this is a good meme for it.
- [68:19]
John Coogan
Where did he get this from Silicon Valley or something? Yeah, he went deep in the.
- [68:23]
Jordy Hayes
In the archives.
- [68:24]
John Coogan
Yeah. You know, some paparazzi uploads a bunch of photos and Nick finds the most ridiculous one. But it is interesting to see the cost of these different models. If you're doing high volume image generation, probably makes sense to check out Google's offering.
- [68:41]
Jordy Hayes
And we will have Logan joining too today. Talk about release. State of the art image generation, editing, incredible character consistency, lightning fast.
- [68:50]
John Coogan
Very fun.
- [68:51]
Jordy Hayes
Available in AI Studio and the Gemini API today.
- [68:55]
John Coogan
Fantastic. In other news, Alex Wang has unblocked Yaxine. This is shaking up the timeline. Maybe we need a trading card. Unblocked.
- [69:04]
Jordy Hayes
Unblocked.
- [69:05]
John Coogan
It is huge news in the tech world, so there's big things. Can someone tell Alex Wang to unblock me? The reason I was being annoying was because of the whole Mei thing. Because the whole Mei thing was sensitive to me. But now that Zuckerberg crowned him the king of AI, I actually think it's really bad for my career that he doesn't like me.
- [69:27]
Jordy Hayes
Me.
- [69:27]
John Coogan
And so, and so we gotta.
- [69:30]
Jordy Hayes
We gotta get a yassine up. Gotta get it back on the show.
- [69:32]
John Coogan
Yeah. So bonegpt messages Alex Wang and says, please unblock Yaxine. He's very sorry. Thank you for your attention to this matter. And Alex Wang says, unblocked. Lol. I love it. And Bones says, you must send a raven to Ruhn for me.
- [69:50]
Jordy Hayes
That means good post here from High Yield. Harry.
- [69:54]
John Coogan
Do we have the video? We have to pull up the video. In the meantime, let me tell you about numeral sales tax on autopilot. Spend less than five minutes per month on sales tax compliance. Go to numeralhq.com and I got the video.
- [70:08]
Jordy Hayes
Here it is.
- [70:10]
John Coogan
This is of course Mike o', Hearn, the famed bodybuilder and known for memes and video reactions around the. Around the Internet. And here he is. We need the audio too.
- [70:25]
Jordy Hayes
Are you following generally accepted accounting principles, Gigachad?
- [70:36]
John Coogan
What? I'm just smiling. I just look good. Like what? What are you asking me?
- [70:41]
Jordy Hayes
I don't care, just look at the chart.
- [70:43]
John Coogan
Yeah, just look. It's fine.
- [70:45]
Jordy Hayes
It's all good.
- [70:46]
John Coogan
It's not good. Stop asking me questions. Yeah, this guy is just born for the Internet. Absolutely fantastic. Anyway, in other news, Mark Zuckerberg gifted noise canceling headphones to his Palo Alto neighbors because of the non stop construction around his 11 foot.
- [71:01]
Jordy Hayes
So thoughtful.
- [71:01]
John Coogan
This is awesome. Chris back, he says, this is so funny. I'm deeply sorry. I've been jackhammering the concrete of my old wave pool to build a new wave pool for the last few years at my 120 million home, which is next to your 18 million home. 18 million dollar home. In order to remedy the situation, I've gifted you these $199 headphones. Who knows?
- [71:19]
Jordy Hayes
I think thoughtful gift.
- [71:21]
John Coogan
I think, yeah, it's the, it's the least you can do.
- [71:23]
Jordy Hayes
It's a thought that counts.
- [71:24]
John Coogan
He's like, it is the thought that counts.
- [71:26]
Jordy Hayes
Eventually the jackhammering will end.
- [71:28]
John Coogan
Hey, I mean, are you. Is it time to build or not? Yeah, throw it on the gauntlet.
- [71:32]
Jordy Hayes
Yeah, just say, I mean if you're angry about this, just say it's not time to build.
- [71:36]
John Coogan
Yeah, just say it's not time to build. Just say you're anti re industrialization.
- [71:39]
Jordy Hayes
You're anti growth.
- [71:40]
John Coogan
Yeah, you're a degrowther. You're a degrowther if you're not into growth. Anyway, in other news, this has been.
- [71:48]
Jordy Hayes
This is Cadillac is coming to F1 important story of the day.
- [71:51]
John Coogan
This is huge. This is huge. Sergio Perez is returning to F1 to drive for the Cadillac team, joining the grid in 2026 along with Valtteri Bottas sources.
- [72:02]
Jordy Hayes
This is particularly important for John who dailies a Cadillac?
- [72:06]
John Coogan
I do.
- [72:07]
Jordy Hayes
Blackwing.
- [72:07]
John Coogan
I do.
- [72:08]
Jordy Hayes
Much like Zuckerberg been waiting does himself.
- [72:11]
John Coogan
Yes. If you want an American made, if you just have a few like, you know, requirements in your daily. You want it to be American made, you want them to have an F1 team, you want to have a supercharged V8 like there's really only a few cars that fit that, that fit those like that many, those basic criteria options. And so it eliminates a lot of other options.
- [72:31]
Jordy Hayes
Pretty much everything.
- [72:31]
John Coogan
Yeah. So you kind of force. Force my hand on that one.
- [72:35]
Jordy Hayes
Totally, totally. And the different Sergio Perez had like this very like serious announcement and Botas just, just posted him in a tuxedo with an American flag.
- [72:45]
John Coogan
The tuxedo with American flag. Yeah.
- [72:48]
Jordy Hayes
Looking very sharp too.
- [72:49]
John Coogan
He has a water bottle or something or it's. But it's like it's a green can of beer or something. But it's like it's unbranded. It's fascinating.
- [72:56]
Jordy Hayes
Very interesting stance on, on the.
- [72:59]
John Coogan
I have to admit the first time I saw this picture of Sergio Perez, I thought it was the guy from firefighters back. No, I thought, I thought it was Billy McFarlane.
- [73:07]
Jordy Hayes
Why did you think that?
- [73:08]
John Coogan
Billy McFarlane looks kind of like that, don't you think?
- [73:11]
Jordy Hayes
Interesting.
- [73:11]
John Coogan
I don't know. Maybe I'm. Maybe I'm crazy. Anyway. Spin AI, the number one AI agent for customer service. Number one in performance. Ben Smarts, number one in competitive Bake Offs. Number one ranking on G2. All eyes on 2026. Their driver lineup is locked in. I can't wait to see an American team.
- [73:28]
Jordy Hayes
And they're gonna be working with Tommy Hilfiger.
- [73:30]
John Coogan
Oh really?
- [73:31]
Jordy Hayes
And so this, this team is going to be very, very American.
- [73:36]
John Coogan
Yeah, this is a good opportunity for, you know, Trey was taking shots at Palantir, his former employer because Palantir sponsors an F1 team Anduril sponsors a NASCAR event. This is, this is the chance. If you're a re industrialized company, if you're an American dynamism company, getting your logo on the Cadillac F1 car feels extremely high ROI. It's probably not going to price like Red Bull like Ferrari, but it will certainly get a lot of attention, especially online. And then you'll fill up the top of the leads bucket. You'll be able to put everyone's information in Adeo. It's customer relationship magic.
- [74:16]
Jordy Hayes
That's right.
- [74:16]
John Coogan
Adeo is the AI native CRM that builds scales and grows your company.
- [74:19]
Jordy Hayes
And Nick, the founder of Adeo will be joining to talk about their new round later today. Excited for that, what else? And we have a post here from Mike Nutsia. He is highlighting, highlighting an article from Bloomberg. Data centers to propel infra securitizations past 110 billion by 2026. We had been joking about data centers crashing the global economy. Was it last week or the week before hopefully doesn't happen. But the tech lash.
- [74:51]
John Coogan
Someone was saying that, that, that that Mark Zuckerberg has the ability to crash the economy with how much he's spending on, on CapEx. But I don't, I don't know. Yeah, I think that's Derek Thompson. Take that the economy is data centers and dialysis. It's kind of an interesting take. But the, I don't know. The data center build out like the capex numbers are growing but they're not 10xing yet. I mean even the most AGI pilled folks are like the training runs will increase by 3x the size per year. Like that's a ton but we're still early and like all the capex numbers are growing but the cloud bills are growing as well. Like there are some crazy deals out there, but it's certainly not the size of the mortgage market yet.
- [75:36]
Jordy Hayes
Yeah. And the big question is how quickly will these assets depreciate. There's some conservative estimates, there's some very extremely bearish estimates.
- [75:45]
John Coogan
Yeah.
- [75:46]
Jordy Hayes
Bloomberg is reporting the market for securities backed by various digital infrastructure, including data centers, could grow by 46% by the end of next year to roughly 115 billion. Data centers account for 61% of the current $79 billion market for digital infrastructure securitizations, according to Business bank of America. Fiber infrastructure makes up another 20% while cell towers are at 18%. The estimates take into account both asset backed securities and commercial mortgage backed securities. Companies have been developing large data centers to help support demand for AI and banks as well as private lenders have been competing to underwrite such deals. Meta Platforms picked Pacific Investment Management and Blue Owl Capital to lead a $29 billion deal for its data center expansion in rural Louisiana. JPMorgan Chase and Mitsubishi Financial Group, meanwhile, are leading are leading a loan of more than 22 billion to support Port Vantage Data Center's plan to build a massive data center. Campus investors concerns about the development of data centers, cloud adoption and the path of investment in AI have been have been sorry cut off. The four big data center developers, in particular Microsoft, Alphabet, Amazon and Meta platforms, discussed higher cloud business revenues and reiterated plans for capital spending increases. Risk premiums on all three types of digital infrastructure, abs, data center, fiber and cell towers have tightened significantly over the past two years. While B of A strategists expect limited spread tightening going forward, they see such securitizations as offering attractive relative value compared to other types of abs.
- [77:24]
John Coogan
So, okay, so there's a post that I found through A Martin Shkreli quote tweet. Congratulations again to Martin on becoming a father. But it starts with this Cuppy's Corner post. Global Crossing is reborn. And it's a picture of Mark Zuckerberg. I got a fever and the only prescription is more data center build out micro cap. David says this is insane. I had no idea it's this bad. Shares this post which leads you to the first shocking revelation. The AI data centers to be built in 2025 will suffer 40 billion of annual depreciation while generating somewhere between 15 and 20 billion of revenue. The depreciation is literally twice what the revenue is. Global Crossing was started in 1997 and it's like, it's the textbook example of like the dark fiber overbuild. So the main business was a global fiber optic network. They wanted to sell wholesale band width to telecom companies in the 90s. It completely mooned the market. Cap was over $47 billion around 2000. It didn't really have that much profit, but it was like key infrastructure for the new economy. The bubble burst and they had already spent a lot of money to lay cable. But the demand for bandwidth is far lower than expected. The company filed for bankruptcy in 2002. And so a lot of people lost a lot of money. And that's what people are. That's what people are memeing around. Martin Shkreli has a take here. He says so this assumes $400 billion spent on AI data centers. So much of this math is wrong. A1 hundreds have depreciated 50% after 5 years, not 10% after 3 to 5. A B200 which will depreciate over 8 to 10 years costs roughly $62,000. 500k for 8. You can produce some amount of human like intelligence with this machine. Would you pay for around the clock? Always improving human level intelligence for 8,000 a year. $8,000 a year. Chips are a much bigger percent of the cost than implied here. So this breakdown says like it's a third depreciation, a third energy, a third GPUs or something like that, which I think is not quite right. So Shkreli's putting it in the truth zone. But obviously it is worthwhile to like reality check the overbuild. You don't want to get over your skis too much.
- [79:45]
Jordy Hayes
But at the same time bubbles are important.
- [79:48]
John Coogan
Bubbles are important. We get a lot of, a lot of capacity to build the next thing.
- [79:52]
Jordy Hayes
Joe Wiesenthal hit the timeline at 3am this morning.
- [79:59]
John Coogan
He wasn't sleeping on 8 Sleep. But you can be go to 8sleep.com, get a pod 5 with a 5 year warranty, 30 night risk free trial free returns, free shipping.
- [80:07]
Jordy Hayes
Back in the game.
- [80:07]
John Coogan
Yeah. What were you doing, Joe?
- [80:09]
Jordy Hayes
I have to assume it was actually 6:30, 6:30 Eastern.
- [80:13]
John Coogan
Okay. He's up early.
- [80:13]
Jordy Hayes
So he's just up early post and he said rather than take equity positions and he's talking about the intel deal. Rather than take equity positions in private companies, perhaps the government could confiscate 20% of pre tax earnings. And then when it comes to control, Congress could pass laws governing corporate behavior. There could be something, could be something here. Gregory replied that is just the beginning. Your scheme could be expanded to confiscate a quarter of any increase in the value of those companies when people sell their shares.
- [80:47]
John Coogan
Whoa. Interesting.
- [80:50]
Jordy Hayes
Another potential play here.
- [80:51]
John Coogan
Yeah, this is interesting. I think we're getting somewhere.
- [80:55]
Jordy Hayes
There was an interesting post here earlier. Dan Primack highlighted that Trump's Pentagon is thinking about taking equity stakes in defense contractors according to to Lutnik. So they're going all over. They're doing, they're, they're fiending.
- [81:15]
John Coogan
They're in deals mode. Deals mode.
- [81:19]
Jordy Hayes
Lutnick was on squat box with Sorkin earlier and what someone apparently the team.
- [81:28]
John Coogan
Put up breaking news of tvpn. Taylor Swift engaged and somebody quote tweeted Kana, never in my life did I think I would find out about Taylor Swift getting engaged via TVPN notice.
- [81:41]
Jordy Hayes
I mean she's a bean air and she's a private jet enthusiast. Right? Why would we not be highlighting that?
- [81:47]
John Coogan
This is fantastic.
- [81:48]
Jordy Hayes
She's an incredible entrepreneur, an artist.
- [81:52]
John Coogan
This is great. Anyway, should we do this? 5 span stake in the New York Times. This activist investor, it's kind of interesting. Bloomberg has a story. So the financiers that led a high profile activist campaign at the New York Times 3 years ago have now taken a stake in in the iconic newspaper.
- [82:10]
Jordy Hayes
They're back.
- [82:11]
John Coogan
New investment firm, 5span Partners.
- [82:14]
Jordy Hayes
New York Times. Mike Isaac, your favorite activist is back. They missed you guys.
- [82:20]
John Coogan
Yep. So the activist investment firm started last year by Dylan Haggart and Sarah Coyne has built a position in the Times and is pushing it to use artificial intelligence to expand its subscription base. According to a letter.
- [82:34]
Jordy Hayes
The parallel, they're just like every vc write a check. Hey, you guys should be using AI. I've heard a lot about it. I think there could be something here.
- [82:42]
John Coogan
AI is a clear tailwind for the New York Times. Our work shows it can more than double the Company's long term revenue and profit potential. Enhancing growth by reaching broader audiences, converting more readers into paying subscribers and unlocking new lucrative profit pools. What's the, what's the steel man for this? I think that if the New York Times goes a slot mode, it's very bad. It's a very short term win.
- [83:06]
Jordy Hayes
They're saying they're talking about using it to more, I guess more efficiently convert non paying. They're saying.
- [83:14]
John Coogan
Yes.
- [83:14]
Jordy Hayes
So the Times could use AI to broaden its international reach.
- [83:17]
John Coogan
Love that.
- [83:17]
Jordy Hayes
Low cost text and audio translations. That makes sense. Develop. Develop more dynamic paywalls and optimize pricing. Low cost video offerings could also boost revenue per user according to 5 span.
- [83:29]
John Coogan
Yeah and so AI doesn't necessarily mean LLMs generating text of articles but translation nailed. Audio nailed. And already I don't know why you're laughing.
- [83:43]
Jordy Hayes
Well, I just think it's, I think it's pretty funny to just. We should do this bit with TB Nation where we collect, take a stake in something like a Google and tell them that AI, we think AI is very important. We think it could be good for your business. I'd like you to take this seriously.
- [84:02]
John Coogan
Yes, yes, yes.
- [84:03]
Jordy Hayes
Hey Satya, we're going to take a position. We've taken a position in Microsoft, our whole team and we want you to take this seriously.
- [84:11]
John Coogan
The ask. If we're being activist investors in Microsoft. I know the ask. Bring back Clippy. Bring back Clippy.
- [84:19]
Jordy Hayes
Clippy. Is Clippy still around? Can you find him anywhere?
- [84:22]
John Coogan
I think there's some merch out there, but Clippy is not productized.
- [84:25]
Jordy Hayes
Clippy needs to be that is billion dollar IP. It's locked in.
- [84:30]
John Coogan
Imagine a billboard campaign on adquick.com centering Clippy as the new spokesman. Microsoft out of home advertising made easy and measurable. Say goodbye to the headaches of out of home advertising. Only Adquick combines technology out of home expertise and data to enable efficient seamless ad buying across.
- [84:45]
Jordy Hayes
Clippy should become CEO for a day as like a little stunt. Give Satya the day off. Let Clippy run the show for a day. Just one day.
- [84:53]
John Coogan
We gotta bring back Clippy. It's so good. It's such good lore and it's so fun. It's cute. It's like inoffensive. It's the perfect, it's the perfect mascot.
- [85:01]
Jordy Hayes
Yeah, I actually. So we've been joking around about five spans asked but I think it is. I'm happy to see that they're not saying, you know, lay off.
- [85:12]
John Coogan
You know, AI will will definitely not be able to do the fact finding that the New York Times does. Like, journalists are particularly good at that. And it requires like building a relationship over time, getting someone to share a piece of information that you can then verify. That's really intractable for AI.
- [85:29]
Jordy Hayes
Yeah.
- [85:29]
John Coogan
And then even the instantiation, you know, Teal has that line about, like, like AI will hurt math people more than writers. Which is kind of counterintuitive because you'd think that, well, AI is really good at writing, but AI is not actually that great at writing. And you can still clock it when there's the EM dash.
- [85:49]
Jordy Hayes
And we saw this.
- [85:50]
John Coogan
It's not this, that, that Travis Kelsey.
- [85:52]
Jordy Hayes
Taylor Swift announcement go into ChatGPT. Not just a marriage. It's a love story. It's a love story that is bullshit.
- [86:00]
John Coogan
The problem is, like, people do write like that every once in a while, but now you just can't. You can't use those. It's not this then that they hit chat. You think so you're convinced. But on the tinfoil hat, Jordy, if.
- [86:10]
Jordy Hayes
You'Re going to make that strong, we got to keep it closer.
- [86:12]
John Coogan
We do. We need the hat rack over there. A representative from San Francisco based 5 span declined to comment. That's the most boring line I could possibly read in this article today. We believe AI represents transformation, opportunity. There is something interesting here about instantiating low cost video. So the New York Times will occasionally take a story, if it's really big and turn it into a video, like a video essay. And they could probably do that for more content where they take the video or they take the facts that have been found by human and the writing that's been found by human and then use an AI voice and then use AI to select different stock imagery or generate images.
- [86:47]
Jordy Hayes
So 5span saying they could slop it up.
- [86:50]
John Coogan
Yeah, they would be slopping it up. But it would probably be like value additive to just like get. You know what they should do? They should do the Clippy strategy. You should take a position in the New York Times and be like, you need 500,000 clippers. You need to just be clipping everything. You just need to clip it all over. This is the thing. Maybe that's the strategy for Clippy. Clippy will clip your content Clipping as a service. So you do a campaign for Clippy and then you have wop clip it all over TikTok and then you buy TikTok. Anyway, we went through the family stuff. Let's go to this gentleman over at Waymo Ethan I love the Waymo team posting. Everyone in Google feels like they're getting more comfortable on the timeline right now. I don't know if they're just emboldened, but they're.
- [87:40]
Jordy Hayes
They were cooking, now they're posting.
- [87:41]
John Coogan
Exactly. They've been sort of building in silence, but now they're getting out there. So there's a video of a Waymo on the 101 Driving from San Francisco to San Mateo. Rider only doesn't touch the steering wheel. Very impressive. Congratulations to the team. And Ethan at Waymo says multiple sensors together is a fool's errand. What do you do when the sensors disagree? Surely no one has solved that. Anyway, here's one of our freeway rides that don't count in our 1 million plus fully autonomous paid rides per month because freeways are for employees, employees only for now. Interesting that they're not doing freeways because the risk of serious injury is much higher on a freeway because you're going much faster. So Mercedes has done the same thing with their level three autonomous system that only works in stop and go traffic, I think, or under 40 miles an hour. Because with the modern seat belts and airbags, it's really, really hard to get into a serious, serious injury accident if you're just going 35 miles an hour. So the Waymos can kind of drive around. It's much lower stakes, but they're testing it and they're going to be bringing.
- [88:46]
Jordy Hayes
Them onto the video.
- [88:48]
John Coogan
So congrats to everyone over there on the Cogs debate. Tane shared a chart of marginal differences. AI startups recent gross margins where high yield.
- [88:57]
Jordy Hayes
Harry pulled that video of Mike Michael Hearn for sure.
- [89:01]
John Coogan
So, so Anthropics at 60%, Perplexities at 60%, OpenAI's at 50%, Gross Margins, Stack Blitz at 40, Lovable at 35 and Replit at 23.
- [89:11]
Jordy Hayes
And there's an important note here, There's a note here. Perplexity, Replit, Lovable and Stack Blitz do not incorporate the cost of running AI models for non paying users and calculations while OpenAI does.
- [89:25]
John Coogan
Oh, anthropics accounting couldn't be learned. Interesting. So that's why.
- [89:31]
Jordy Hayes
Which I think is fair. They don't, they don't need to. I mean it's not Anthropic's job to tell journalists what their approach to accounting.
- [89:42]
John Coogan
Well, you know what? We have the perfect guest to talk about building a business without burning a ton of cash because we have Wade Foster from Zapier Zapier here in studio.
- [89:54]
Jordy Hayes
French pronunciation.
- [89:56]
John Coogan
You know you were in my YC batch in 2012 and I called it. What did I call you? And I called it zapier, like a rapier for a long time. And then, and then people were telling me that's wrong. And so I started calling Zapier and then I learned that was wrong. But it's zapier. Like snapier, right?
- [90:12]
Wade Foster
Yeah, zapier. It's funny, Snapier was actually what we called it first.
- [90:16]
John Coogan
Oh, no way.
- [90:16]
Wade Foster
We, yeah, we had to switch to Zapier because there was, you know, copyright issues and of course it was one snapier with one P. And so we just doubled down on the mistake when Zapier with 1P as well.
- [90:29]
John Coogan
Well, it certainly hasn't hurt the business. You've. You've been on an app. Absolute tear. We've enjoyed talking to your co founder a ton about Arc AGI and that stuff, but we'd love to get just into the rest of your world and what's going on with the business. And do you have any advice for current generation startups who are maybe playing it a little bit fast and loose with the accounting? Did you ever have gross margin problems? Was there ever a moment where you were like, okay, we have customers that are actually making so many calls to our APIs that we're losing money on them, or was that just never an issue?
- [91:04]
Wade Foster
We became profitable in 2014, so basically two years in. And when we raised the. Yeah, when we raised our seed round out of yc, yeah, we said, hey, we want this to be the last money we ever get. And so I like looked at every expense on our P and L and approved everything and was just like vigilant about not spending money if we didn't have to. And yeah, I think in 2010, like that decade, we were looked like as crazy.
- [91:35]
John Coogan
Totally.
- [91:35]
Wade Foster
And now it's very trendy. Like, in fact, I heard this term popularized out like six months ago. Seed strapping, seedstrapping, where it's like, yeah, one round and then, you know, don't raise more.
- [91:45]
John Coogan
So.
- [91:45]
Wade Foster
And I was like, that's what we did.
- [91:47]
John Coogan
Yeah. Did you believe it at the time? Were there specific entrepreneurs that you were looking to as like mentors? Like, where did that idea even come from? Because the meme in Silicon Valley at the time was much more on the Reid Hoffman blitz scaling raise a ton of money. And every venture capitalist would echo that because they want to put dollars to work. And so there was definitely like a mood in Silicon Valley of like, hey, it's more than okay to raise an A B C D, burn, burn, burn. Win, win, win. Like, did you believe that when you said it, or did it come from somewhere? Like, talk to me about the thinking at the time.
- [92:23]
Wade Foster
We had two examples. So we founded the company in central Missouri. All three of us worked at Veterans United. This is a company owned by two brothers. 50. 50. They never raised a dime. I was employee 500, and when I left 10 months later, there was a thousand employees there. So this company scaling like crazy with mortgages during the financial crisis.
- [92:45]
John Coogan
Wow.
- [92:45]
Wade Foster
And so we see that and are like, well, clearly you can build a successful company this way. Then one of our favorite products, mailchimp. They were one of, like, our earliest partners that was most successful entirely bootstrapped. And then coming from the Midwest, we're just. We just don't know anything about, like, this Silicon Valley world for companies. Yeah, yeah. And so it kind of makes us skeptical of any time, you know, a venture capitalist is. Yeah, I remember one said, no important company has ever been built this way. And, you know, when you make grandiose statements like that and you have counterfactuals, you're just like, well, what other advice are they saying that might just be wrong. And it doesn't mean that all the advice is wrong. But I think we just ran it through a thicker filter than most people who are like, well, I guess we're going to raise an A and a B and a C. But I think it's important.
- [93:36]
Jordy Hayes
It doesn't my read, and I guess what I've heard over the years is, it's not like you said, we will never raise another dollar. It was more. So we. We hope to just make a great business and not be forced to. And I think the issue when I hear people talking about seed strapping, it's like, seed strapping. I don't know if it's like, the right goal. It can be something that you hope to be able to achieve. But if you're raising a $5 million round and you're telling everybody, oh, yeah, we don't want to raise more money, it's just like, not the right. Oftentimes not the right thing to be fixated on. It's like, be fixated on, like, we want to use this money to find a really sound business model that will allow us to scale efficiently and we will tap capital markets as needed is like a better goal than we just don't want to raise more money. And because I usually feel like that comes from founders that are like, you may as well just say, I don't want to dilute myself anymore. And that's not necessarily the right thing, because ultimately, if you want to create value, you should just make the share price go up. And there's some companies that needed to loot a lot in order to create more value.
- [94:42]
Wade Foster
I think the exercise to go through is to look at your growth and really understand, where is there a bottleneck in your business? What is the long pole in the tent that is holding you back from achieving your goals? Every time we did that exercise, we came back with an answer. That wasn't more money. It was management horsepower. Or, you know, we need this particular feature to go launch, which we can go build. Like, there was just other things that were the thing to go address to help us grow faster. And the place where I see folks making mistakes is they get caught up in the noise, and the logic will be like, well, so and so raised a lot of money. Or what if something. What if this happens? Or what if that happens? Or which are not actually grounded in factual truths of reality. What you do know is this is where my company is. This is what it'll take to get there. And if my bottleneck is money, great, go get money. But if the bottleneck is something else, you as the CEO, like, it's incumbent upon you to spend time on the most important thing instead of go chase another thing that actually is. Is not the most important thing. And so that's kind of how we always thought about it. And, yeah, I think it. Raising more money never was the most important thing. And so we spent our time differently.
- [96:00]
John Coogan
Was there ever a moment where you blinked, like, you know, halfway in or a few years past being profitable where you were like, oh, like this idea, Maybe it's worth, you know, dipping in, raising some money, getting back on the train? Or was it just like, okay, now we've been going for a few years, we're good?
- [96:19]
Wade Foster
Well, once you get it going, it actually gets harder to want to raise more money because you start to look at your growth rate and going, you know what? Like, why would I raise at this valuation when I can just wait six months?
- [96:32]
John Coogan
Yeah.
- [96:32]
Wade Foster
And, you know, my revenue will be up by 50% or 100%. Like, the valuation just never makes much sense now, obviously. And this is, I think, why you see a lot of, like, really runaway valuations right now, because the founder kind of just looks at the math and says, well, it's. There's no sense. And so a venture capitalist has to come in and be like, well, I'll give you a 40x or 80x or 100x to get them to go. Well, okay, maybe for that I would do it.
- [97:02]
John Coogan
Yeah. Yeah. It's very funny that we're seeing in the market right now, like, tough margin stuff, crazy burns, crazy valuations. And then simultaneously, we have another company in the AI space midjourney, David Holes, that hasn't raised any outside capital and is just growing, growing, growing. And so it's not like it's something unique to the, to the, like, the fundamental structure of AI. Like, there is. There's clearly a way to do it without raising an incredible amount of money, and yet not everyone's on that path. Everyone seems to be on the path of like, burn, burn, burn. I don't know.
- [97:35]
Wade Foster
Yeah, well, and I think it depends, you know, like, some of the foundation models obviously have huge capex expenditures, and so that's a different beast. Whereas if you're at the application layer, your cost structure obviously looks a lot different. So this advice, this way of building obviously has to be filtered to your context. It doesn't make sense for all companies.
- [97:56]
John Coogan
Yeah. Was there something about your particular business or where you fit into the landscape where it wasn't positioned as a product, where on day 200, AWS is like, we're competing seriously? Or you had like a million competitors immediately. Was it less competitive because of the position in the market and kind of like how you shaped the product? Like, the product felt like, I don't know, somewhere in between, like a developer tool. It was almost like a new market that felt less competitive. But I don't know what your experience was.
- [98:39]
Wade Foster
It definitely was an odd product. We had folks comment to us, like, how exactly did you come up with this idea? And I think partly what made it so defensible was integrations. Middleware is just inherently sloggy. There's not a lot of secret hacks to do that. Now with AI, it's getting easier, but it's still not easy. You still just have to just chunk away at point this stuff. Like, I would put us plaid others kind of in this category where it's not actually easy for a big company to just decide, oh, we are going to go compete in this. And most of them just don't have the fortitude to kind of keep chipping away at a bunch of like, really boring engineering work. Like they are hiring all these engineers that want to work on more sexy things.
- [99:26]
John Coogan
Yeah.
- [99:27]
Wade Foster
Versus chip away at integration code all day, every day.
- [99:30]
John Coogan
Yeah. Now you kind of have like such a platform that you're in. I feel like you're just like a natural beneficiary of the AI wave because you're already plugged into so many customers, so many integrations, so many data sources, there's already so many primitives that I can take advantage of. There's two areas that, that stand out to me as potentially valuable. I'd love to know which one's more valuable to you. And then if there's a third that I'm not thinking of, let me know. First is just having AI copilots help write new integrations, help accelerate your software development, just do more with the team. I doubt you've done like massive AI layoffs or anything like that, but you're probably being more productive. That's maybe one area that is interesting and then the other is just AI as a product that can be drawn on in the midst of moving data around. So if I have one connection over here on Zapier and then I want to have an LLM, transform that data and then send it to another integration that feels like a really, really amazing use case. Have those both been equally beneficial? Has one stood out to you as particularly greater? Is there something else that I'm not thinking of?
- [100:39]
Wade Foster
They're both really valuable for different reasons. Yeah, so the first, this idea of like a copilot or text to workflow is really valuable for helping people build new types of workflows. Sure, inherently these no code workflow editors have a fair amount of configuration involved with them. We always invested a lot in design in making that experience good. But it's still a lot to configure. And copilot just gets closer to how humans think about this stuff. Most humans are not great systems thinkers. They don't break the task down bit by bit by bit. And so as a result, a copilot can be a really good way to attract folks into the market that maybe struggled in the past, but it doesn't fundamentally change the use cases that folks can do. Which is where the second one gets really interesting. And I think the. This is where we've had some really interesting learnings because we have launched Zapier agents, which is a purely agentic exception experience. And we have our classic workflow editor where you can now inject AI steps. Now, both have been successful, but the latter has been far more successful. And I think it's because when you look at the.
- [101:54]
John Coogan
And the ladder. Sorry, to clarify, the latter is in this case is workflows. Workflows AI steps. Yes, exactly.
- [102:01]
Wade Foster
And I think the reason why is because agents inherently just don't Quite have the reliability yet to get you to solve, like, sophisticated use cases. You think about it where it's like, well, if you're asking it to do anything complex, call it like 10 tasks in a row, 20 tasks in a row, but the error rate is 10% every time. Well, by the time it rips through 10 or 20 tasks, it's messed up on a handful of these things and it's way off in left field. Whereas within a workflow, you can put it in a harness and say, hey, mostly I want this thing to be deterministic throughout all these parts of the steps, but right here I need to summarize something, or I need it to analyze the sentiment of this, or I need it to generate an email. And you can put the agent part, the AI part, in the spot where it does the thing best, and then you wrap it back in, fold it back into a deterministic workflow that has opened up a huge amount of uses. We have like a quarter billion, more than a quarter billion tasks that have run through Zapier with AI like that alone. And I think that's the. Honestly, I think it's kind of a sleepy category.
- [103:10]
Jordy Hayes
Yeah. When did, when did you guys realize what a good position you were in here? Because you basically spent. Before agentic workflows were like a term that people were throwing around every single day. You guys spent a decade basically building out all the really structure, really hardcore integrations with hundreds or thousands of different services and getting just simple workflows dialed so that you can. You can just slot in, you know, reasoning or slot in LLMs at different. @ different steps. But have you been surprised at how many people are coming in to kind of like compete in this space? Because it feels like I've just seen a lot of pitches over the last 12 months that are. I just look at and be like, okay, this is like, this is Zapier, but just like, you know, pretending that Zapier doesn't exist.
- [104:00]
Wade Foster
But AI first, right?
- [104:01]
Jordy Hayes
Yeah, yeah, yeah. AI first. And it's like, well, you're.
- [104:03]
John Coogan
It's Zapier, but you can buy the stock in the private markets.
- [104:08]
Jordy Hayes
Yeah, it's Zapier, but then we're doing a series B.
- [104:13]
John Coogan
There you go.
- [104:13]
Wade Foster
Zapier. We sell software. We're zapier, but we sell stock.
- [104:16]
John Coogan
Yes, exactly. There you go.
- [104:19]
Wade Foster
Yeah. I do think it kind of surprised us that we were as well positioned as we were. We had started to dabble with generative AI a few months before ChatGPT had come out and had started to see some customers building workflows on our private developer platform. So we have a developer platform where folks can build their own stuff. And so we'd started to see some of that happen. And as the models advanced, in particular when GPT4 came out, we were like very unsure if workflow was durable. Like we started to think like, actually this like pure agentic experience is probably going to be the future. Now I still actually believe that it will be the future. I just don't think it's going to get there as fast as we think it will. And over the course of the next year we just kept seeing agent like AI use cases on the traditional workflow builder grow and grow and grow and grow. And then we started to realize, huh, maybe what we need to do with our product roadmap is actually help people surf the wave, help them go from just old school classic deterministic workflows and move steadily into purely agentic ones and allow them to kind of mix and match these experiences along the way.
- [105:44]
John Coogan
Take it back to gross margins. For me, how important is offering the full suite of pareto frontier models within those deterministic steps? And is there a world where you want to offer even smaller and more focused and cheaper models? We talked to one company that's training transformer based models, but just for sentiment analysis, just for censoring bad words, just for JSON to CSV or something. Stuff that could almost be done deterministically in many cases, but just like you need a little bit of AI there and they train them on GPUs or on gaming graphics cards and they run like super, super cheap. And I'm wondering if you're in a high, if you build out zapier workflows that are high volume, the cost per inference feels relative there and it feels important. And I feel like you would have a good insight into how some of these bigger models can blow up on you if you're not careful.
- [106:50]
Wade Foster
Yeah, well this is also where it's nice. If you can encode your workflow into something that's deterministic, you get reliability, you get cost advantages, you get speed, you get a lot of things that are really, really nice. And then, you know, insert AI only where you need it. Now the way we've thought about this is we really want to abstract as much of this away from the customer as possible. You know, we sell predominantly to folks in GTM orgs and gna orgs and folks that are not paying attention to the subtle differences between and you know, which model is best for coding, which model is best for writing, which model is best for this, that or the other. So we're trying to abstract away a lot of those choices and that extends into how we price for this stuff as well too. So we want to make it a little bit more like you just buy it, we charge you for tasks. Doesn't matter if it's an AI task or another task. We'll just sort of it all the math will kind of all work out for you in the end. But I imagine if you were, have you.
- [107:48]
Jordy Hayes
Do you guys have a lot of, do you guys have a lot of learnings from like pricing on pricing based on outcomes versus traditional SaaS? Because that's again so many of the ideas that VCs have gotten excited about with agentic workflows and just agents broadly. I feel like our ideas that you.
- [108:08]
John Coogan
Guys have explored, you've basically always been consumption based, correct?
- [108:11]
Wade Foster
We've always been consumption based.
- [108:13]
Jordy Hayes
Yeah.
- [108:13]
Wade Foster
And I think the challenge that.
- [108:16]
Jordy Hayes
Sorry to interrupt, but the other way to look at that is like you've been pricing based on work done is. Is like the sexier way to describe that. At least it is 2025.
- [108:29]
Wade Foster
We do a task like you pay for tasks. And I think the challenge that exists for horizontal products is the way in which folks use the software. They get variable value from it. And high usage doesn't necessarily correlate with high value and low usage doesn't necessarily correlate with low value. And so that's where you know, if you're building horizontal usage based software, you run into a trap where you're like how, like where along this spectrum are we going to price, are we going to pick one credit system where everything is going to cost one? And we're trying to figure out, well, is it a premium thing or is it a more commoditized thing or do we risk making our pricing more complex and start to say we're going to have a credit system that's tied to different value. But now your customer is having to do a bunch of different calculations in their head figuring this out. This is where I think vertical agents have an advantage right now, where they can say, hey, we are hyper fixated on one use case and as a result we can maximize the value that we are going to sell for. We're going to say, hey, you know, if you're in customer support, we're going to charge you if we close the ticket. And you can do very direct math to say, well today I have a support rep that I Got to pay this much money every single year to answer this many tickets. If I can turn that into an agent and they can answer those questions just as well, then I'm willing to pay. This is sort of like the maximum I'm willing to pay for this. So that's where these vertical software do have like, pricing advantage. Whereas if you're charging horizontal, you have a much trickier challenge because you have so many variable use cases at the end of the day.
- [110:11]
John Coogan
Yeah. Are there new markets that you're noticing open up that are uniquely available to you because of AI?
- [110:25]
Wade Foster
I think the thing that has surprised me is the certain more traditional industries have been fairly quick to jump on this and I think my hypothesis is partially that their use cases are well suited for this. So if you're working a lot with like PDFs and like paper documentation, the SAS stack was like, kind of tough for you because it had to be structured and there wasn't tooling that could turn all this, like unstructured data into structured data for you. However, LLMs are uniquely good at that. And so as a result, these companies have seen, seemingly jumped on this stuff pretty quick. The second thing that's been interesting is we've watched particularly media companies be relatively fast at this, which also surprised me. In some ways I felt like they were faster at it than certain tech companies. We've spent time with this and I have to wonder, like, how much of this is because they saw so much disruption in their business model during the Internet craze that they were like, we are not going to let that happen to us again. Whereas technology companies have kind of had it pretty cushy.
- [111:44]
John Coogan
Yeah.
- [111:44]
Wade Foster
And so like, yeah, we're, we're doing the AI thing.
- [111:46]
Jordy Hayes
It's fun when you're doing the disrupting, but getting disrupted.
- [111:51]
Wade Foster
Yeah, not so exciting. And so they're like, act two. We're going to be on it this time around.
- [111:56]
Jordy Hayes
Where do you stand on estimating the impacts of AI on the job market? Because I feel like a decade ago or around the time when you, you were getting zapier off the ground. Zapier. We said it both ways. I'm sure people were saying, like, automating business processes will lead to, with software will lead to job loss.
- [112:21]
John Coogan
Did people say that? I guess, yeah.
- [112:23]
Jordy Hayes
I mean, people said that with the Internet, they said you're not going to need sales reps anymore. Everybody's just going to be able to go and you're just going to be able to go to a website. And I just, yeah, I'm curious.
- [112:34]
John Coogan
Well, there's two data points that we've been pointing at. One is the Wall Street Journal had an article today saying that new grad unemployment is not tracking as well as it should. And there might be a real effect of AI not driving companies to hire less new grads. But then on the flip side, there was this report that came out that said that 95% of AI tests at Fortune 500 companies did not make it past the test phase. And so AI as an installation into these large companies is not going as well. So there's kind of evidence on both sides. But I'd love to know what you think.
- [113:12]
Wade Foster
Yeah. You know, when I think about this, my take is that capitalism is largely undefeated. And, you know, it's easy for us to spot the disruption. We can see the jobs that are disappearing easier than it is for us to see the new opportunities that are being created.
- [113:37]
John Coogan
Sure.
- [113:37]
Wade Foster
But history will tell us that there is always new jobs created. And this is what we see play out in our customer base. I talk to small businesses over and over where they're like, I, I never could have hired somebody to do this work. And now, because I'm doing it with automation, I'm actually getting more done, I'm generating more revenues, and now I'm reinvesting that. And when they go to reinvest that, yeah, some of it's being reinvested in AI and more automation, but some of it's being invested in people. So that's kind of where I think this plays out. And the second thing I think will happen is there's this, this meme that goes around where it's like, well, all these software companies are just going to have crazy high margins now. Like, we just don't need that many people. But again, capitalism is undefeated. If someone looks out and sees like, wow, you're generating so much value, how about I just come in, I'm willing to tolerate.
- [114:35]
Jordy Hayes
Or if everybody, everybody has high margins and they're like, we should just spend three times as much on user acquisition and just get more scale.
- [114:43]
Wade Foster
Exactly, exactly. And, well, how are you going to get user acquisition? Well, some of that's going to be invested in advertising, some of that's going to be invested in people. And like, I think at the end of the day, it nets out where, hey, we're all going to still have jobs, but what jobs we do have, that's where it's going to shift. And I think those reports are kind of telling that story where new grads, the requirements are Shifting. What's needed inside the workforce is, is changing. And so there's kind of a shift going on there. And that's always what's really challenging in these moments is time. Is the skill sets required to be successful? They're not static.
- [115:18]
Jordy Hayes
Yeah. What about job creation around the implementation? Like, I'm sure there's been a cottage industry around Zapier for a long time now, people that just help integrate Zapier and companies. And we, we were talking probably at the beginning of this year thinking that what, what an amazing. You know, in the same way there used to be a big opportunity to just help companies run Google Ads or help companies run Facebook ads and that there's still opportunities there. But it feels like right now, taking Zapier into a company and just saying, like, I'm going to save you guys, you know, $250,000 a year if you pay me 20 grand to like, set this up properly, it just feels like that is extremely repeatable. And there's so many businesses that as for as many that are coming on and using Zapier or other platforms, there's probably a multiple of those that just aren't even fully aware that these tools exist yet or how to implement them.
- [116:14]
Wade Foster
So 100% we're seeing the rise of the AI automation engineer. We have some of these internally where for our enterprise customers, if you want us to do it for you, we will come do that for you. And to your point, we're seeing this cottage industry starting to blossom and it's particularly effective when you can combine that skill set with domain expertise.
- [116:35]
John Coogan
Yeah.
- [116:35]
Wade Foster
So if you have somebody in HR who has this capability, they're able to work magic on the same thing in legal, finance, marketing, sales. If they have this systems thinking, this ability to break down tasks to use the tools, they're often able to work wonders inside the stack. And it's been pretty exciting because this person has kind of existed for all of our. This is who we've served for all of our 15 years. But in the last couple years, they're starting to get more credit inside these organizations. They often were like the underappreciated person who just kept all the plumbing working. But now they're like the automation engineer. I'm making magic happen.
- [117:18]
John Coogan
Can you give me your take on MCP and just explain it and how it fits in? And is it a tailwind or a headwind, an alternative, something that you're just benefiting from immediately? How does it all fit into your landscape?
- [117:32]
Wade Foster
Yeah, so MCP model, context, protocol, It's a protocol much like HTTP or REST or something like this that allows it focuses on agent to agent communication, letting agents talk to each other. I think right now there's obviously a lot of hype around it. Whether it's a tailwind or a headwind or both, we're still figuring it out. I think there's a lot that has to be figured out with the use cases and whatnot. I think the most important thing is to actually get the use cases really dialed in. And the place where we're seeing it be most efficient, effective is in like claude. We're seeing a lot of folks that set up CLAUDE projects, they give it access to various tools and then they go deploy that tool like an internal tool for their organization. So for example, if you wanted to create like a, a sales briefing tool for your sales reps, you might say, hey, I'm going to set up a project, I'm going to give it a list of a template for how I want the brief to be created. And I'm gonna give it access to HubSpot, I'm gonna give it access to Zoom info, I'm gonna give it access to like deep research through ChatGPT or perplexity or something like that. And now my sales reps can just come in and say, hey, I'm talking to, you know, Sam Altman tomorrow. Like what do we know about our deal with OpenAI? And it goes and does deep research. It affects everything you have from your internal stuff CRM and it generates a brief for you so you come in way more prepared. So those types of like internal tools in the past, those were like kind of hard to build. And MCP is like making it really easy for folks to build those kind of like chat style internal tools really effectively. That's the use case that we're seeing pop up most frequently. But I have to imagine that as time goes on we're going to see a lot more. Like we, it very much feels like we're in the very early innings and we haven't, you know, seen these like new user experience paradigms, like launched yet or popularized yet.
- [119:38]
John Coogan
Yeah, yeah. It always, it always just felt like to me with just the, just on, on the basis of inference cost, if you're hitting an MCP server a million times, you would rather just have your agent like write an API integration and just go direct to the database for most of those things. But there's probably specific use cases where it makes sense. Especially if you're like dancing around a.
- [119:59]
Wade Foster
Lot of different, well I think you're correct there. Like, at the end of the day, there's going to be some use cases where you want an API call and deterministic code because it's faster, cheaper, more reliable and other use cases.
- [120:11]
John Coogan
Yeah, we saw this with ChatGPT pretty early. It was like, yeah, it's pretty good at math. It can memorize a lot of math, but why not just give it Python and then it can get the math 100% right. I don't care. I just want the right answer. You don't need to stunt on me by memorizing every number of PI. You can just go look that up on Google if you want. Anyway, Jordyn, that's fine.
- [120:30]
Wade Foster
That worked out pretty good in the past.
- [120:31]
John Coogan
Yeah, exactly. Let's stand on the shoulders of giants as much as possible. Anyway, this was fantastic. Thank you so much for hopping on. We will talk to you soon.
- [120:39]
Jordy Hayes
Great to chat.
- [120:40]
Wade Foster
Thanks, guys.
- [120:41]
Jordy Hayes
Cheers, Wade.
- [120:42]
John Coogan
In the meantime, let me tell you about Bezel. Your Bezel concierge is available now to source you any watch on the planet. Seriously, any watch. You can go to getbezel.com and we have Dan Wang in the Restream waiting room coming in to the TVPN ultra dome. He is releasing a new book today. I believe it's already being reviewed.
- [121:00]
Jordy Hayes
Gotta ask him how many pages it has.
- [121:02]
John Coogan
Is that the question you want to ask?
- [121:04]
Jordy Hayes
And hit the gong.
- [121:05]
John Coogan
Okay. Yes, yes, yes.
- [121:07]
Jordy Hayes
Definitely what everybody's been waiting to hear. How many pages is your new book?
- [121:12]
John Coogan
Yes, yes, yes. He's a research fellow at the Hoover Institute. The book is Breakneck China's Quest to Engineer the Future. I saw a video of him going viral talking about the difference between China's government officials and America's government officials, talking about how they have an engineering society, we have a lawyer society. It was fascinating. Can't wait to talk to him. So we will bring him in from the Restream waiting room. Dan, how are you doing?
- [121:36]
Jordy Hayes
Welcome to the show. Really well, guys, thanks. Big day for you.
- [121:40]
John Coogan
Huge day.
- [121:42]
Jordy Hayes
Well, huge day.
- [121:42]
Dan Wang
I get to be on tbpn. This is a nice day indeed.
- [121:46]
John Coogan
Welcome, welcome.
- [121:47]
Jordy Hayes
Been waiting for this moment.
- [121:48]
John Coogan
How many pages are in the book?
- [121:51]
Dan Wang
Less than 300.
- [121:52]
Jordy Hayes
Wow. Less than 300.
- [121:53]
Dan Wang
I think this should be a quick read.
- [121:56]
Jordy Hayes
Quick read, quick read.
- [121:59]
John Coogan
Talk about the background.
- [122:01]
Jordy Hayes
Was that intentional, by the way? Were you going for something like, could you have written 700 pages and you.
- [122:09]
John Coogan
Wanted a lot of work? Condense it down.
- [122:10]
Jordy Hayes
Or to condense it down? Yeah, I think it's.
- [122:12]
Dan Wang
I think it's much better to write a book that is that people feel was too short and could have been a lot longer than it is to write a book that everybody feels should have been 100 pages shorter. So that you want to err on that side.
- [122:23]
John Coogan
Yeah, yeah. Give me some background on, on the path to writing the book, the type of research you were doing, what inspired it, and a little bit on your background.
- [122:32]
Dan Wang
I was in China from 2017 to 2023 three working as a technology analyst, mostly for hedge funds, thinking about semiconductors, clean tech, China and science, trying to figure out what's going on. So I was living in China at the start of the first Trump administration. I was in Hong Kong, then Beijing, then Shanghai, trying to figure out what's going China is going to do on Huawei, how it's going to respond on the trade war. And so I ended up living through the first trade war, the trade war that moved into a tech war that really hurt Huawei. I lived through the entirety of Zero Covid. And I was just trying to make sense of all of this experience. I was thinking that, you know, we use these words like socialist, capitalist, neoliberal, democratic, whatever that means to describe the US and China now. These are all words from like the 18th century or something. And let's just come up with a new framework. And that's why I came up with the engineering state and the lawyerly society.
- [123:26]
John Coogan
The lawyerly society. It's a great framework. It really stuck out with me. Remind me where your family comes from within China. It's somewhat far away from Beijing, is that correct?
- [123:38]
Dan Wang
Yeah, it's in the southwestern periphery named Yunnan. So it's really far away from Shanghai and Beijing.
- [123:44]
John Coogan
That's right. And you said that the distance from the government was relevant to the political culture there. And I was wondering if there was a similar dynamic that you saw in the United States. Like is being in California or Silicon Valley. Is there a distance from Washington D.C. or Mar a Lago or Trump Tower in New York that is at all relevant? Or do you think that that distance from the center of government power unique to the geography of China that your family grew up in?
- [124:20]
Dan Wang
I think I am an outsider, both the US and China. Well, I'm Canadian, so I'm not, not exactly American.
- [124:26]
John Coogan
Sure.
- [124:27]
Dan Wang
Now I'm in Silicon Valley, but I've never quite felt like this is, this is exactly where I'm from. This is exactly where, where I need to be. And also in China, I didn't grow up in these hyper competitive Chinese cities like Shanghai. Or Beijing, where everybody owns a bunch of property. You liquidate one of these properties and you can send your kid to UCLA and give her a Mercedes as well. And so I feel like my strength looking at both countries is as an outsider not really buying into everything that D.C. or Silicon Valley thinks about itself.
- [124:59]
John Coogan
Yeah. When you try and define the structure of China's government or the United States government, you've obviously coined these terms, the engineering and lawyerly society. I was looking at data to try and quantify the difference between the Chinese economy and the US economy. And the US has, I think, higher taxes and potentially a higher share of the population working for the government. And I'm wondering if there's this world where you can look at the United States as a socialist country that's trying to be capitalist and China as vice versa. And I wonder if you could like toy with that at all. Where the US is actually the government is huge and yet it is the country of like, oh yes, the government is not involved at all. And in fact it is extremely involved.
- [126:03]
Jordy Hayes
Yeah.
- [126:04]
Dan Wang
Well, I think the best line I've heard on this is that the Department of Defense is America's answer to the central planning and the Communist Party because just so big. My view of China is that it is 1950s Eisenhower, America, giant manufacturing sector. They're building highways absolutely everywhere, very little immigration, very traditional gender roles, pretty low taxes, very minimal transfer payments. Eisenhower had more transfer payments because he embraced the New Deal. But there is a sense in which I think China's the most right wing country in the world for all of the reasons that I've just outlined. And the US is kind of a capitalist country that's a little bit embarrassed about it and trying to get to a bit more socialism.
- [126:47]
John Coogan
Yeah, I heard you mention that imperialism was somehow the final form of capitalism or something like that. Can you explain what you meant by imperialism's relationship to capitalism?
- [127:00]
Dan Wang
Well, that wasn't me. That was a much balder thinker. Vladimir Lenin, you were quoting it.
- [127:06]
John Coogan
Yeah, that's right.
- [127:07]
Dan Wang
I was quoting Leiden.
- [127:08]
John Coogan
Yeah, that's right.
- [127:09]
Dan Wang
So Imperialism the Final Stage of Capitalism, which is one of his big pamphlets, I recommend it.
- [127:14]
John Coogan
Okay, but unpack the thesis there because I don't immediately understand intuitively the relationship between imperialism and capitalism. Like what was his argument? And then what's your take on his argument?
- [127:27]
Dan Wang
Yeah, well, I think maybe we don't need to get too deeply into Marxist thought here, but they have something about class struggle and how the proletariat really needs to rise up because the people at the top have all the resources. And the capitalists, in order to maintain their capitalist expansion, really just have to go overseas and conquer Africa.
- [127:47]
John Coogan
Sure, sure.
- [127:48]
Dan Wang
Asia and Latin America in order to maintain their expansion. That's the idea.
- [127:51]
John Coogan
Yeah. And then like the white pill of America avoiding that, what's the bull case for American capitalism not devolving into imperialism?
- [128:05]
Dan Wang
Well, imperialism, I think was a thing of the past when you really needed a lot of rubber in order to power your cars. And we don't need this natural rubber anymore. We can synthesize it through petroleum. And so I think the US doesn't need to be imperialist. That doesn't mean that it doesn't have any other sorts of problems. But it hasn't needed to conquer a lot of territory in part because it's built this wonderful structure of alliances that you don't really need to conquer them because the elites kind of do what you already want to do. And I wonder if the Trump administration is still going to value all of that.
- [128:37]
John Coogan
Yeah.
- [128:38]
Jordy Hayes
How much do you think Trump is actually inspired by the Chinese approach?
- [128:45]
Dan Wang
Well, every time he talks about his buddy Xi, he compliments Xi for his great head of hair. And this is like something that they talk about pretty often. I've always felt that Trump never said a bad word about his buddy Xi Jinping. Up until Covid, Trump always kind of hated the Japanese and the Germans more, which were the enemies of the 1980s. I think there is an aspect in which the US is becoming like China. The US is nationalizing intel. Intel is now going to be a stay, don't enterprise with American characteristics. There's a lot less data probity. I think with the statistics not being perhaps quite right, there's a lot of interference inside the economic agencies. I think there is more construction, but there is more construction around gilded ballrooms and detention centers. And I just want Trump to take a leave from China and build a lot more mass transit. Build a lot more subways in New York, where I'm chatting with you from, Build a lot more housing for people. Let's make Silicon Valley a much more livable, mass transit friendly place.
- [129:52]
John Coogan
Is there any hope for the federal government building anything, really? I feel like all of that is the domain of the state and local governments. When I think of the roads and the bridges and the high speed rail in California, that's not a federal project. Should it be?
- [130:08]
Dan Wang
Well, the interstate highway system is a federal project, and that was something really built by Eisenhower. Manhattan was a federal project. Apollo was a federal project. There is A lot of local building, that's for sure. A lot of maintenance. A lot of highways need to be built locally. But I think there's no reason for the federal government not to be much more muscular and take over California high speed rail. Rather than nationalize intel, let's nationalize California high speed rail. Do a much better job at it.
- [130:35]
John Coogan
This feels like something that Trump could get on board with.
- [130:38]
Jordy Hayes
Like, for sure, he would love to pop over to Newsom's backyard.
- [130:42]
John Coogan
He loves building stuff. He's a builder, he's a real estate guy.
- [130:45]
Jordy Hayes
What about on the energy side? What do you think America can learn from China's approach to increasing energy production?
- [130:54]
Dan Wang
Well, Trump has this policy of all of the above, and I think China is actually the one that is much more all of the above because they're building most of the world's coal plants still today. They're building all of the wind, they're building all of the solar, so they don't have that much natural gas. But they're building much of everything else, including all the nuclear. So the Trump administration is doing more nuclear now, but they're getting rid of wind projects that are almost completed. They're not really building much more transmission. I guess they're favoring coal as well. But China is doing all of the clean technology, all of the new stuff, as well as some of the old stuff, too.
- [131:29]
John Coogan
One question I have on press freedom in China is just why isn't China? Does the repression of the press in China reflect a lack of confidence in how good things are over there? Because you think if you're confident about what you're doing, if you're happy, if you're successful, you'd be like, there are no skeletons in the closet. Let the press run free. They will by default report positive things.
- [131:59]
Dan Wang
I think that is a sign of lack of confidence. The Communist Party is super thin skinned about any sort of criticism. But I think the other aspect of that is that there are a bunch of engineers, and you've spoken to engineers. They're not really good at talking. They don't even want to talk to any of us, right? So they like to just sit, you know, sit with their projects and design a new bridge or something, whatever. They don't understand, they tend to censor. And they're also really prickly skinned about any sort of criticism that they have. And so I think that it is a manifestation sometimes of lack of confidence in China's system. They're really nervous that any criticism will somehow topple the Communist Party and then Whatever sort of jokes or any sort of humor they don't understand, they simply censor it. And so I think the engineering state is also kind of an explanation for why China has been relatively weak at producing soft power. It's not like the Koreans. You know, we're all listening to K Pop. We're all watching Squid Game. The Japanese with Nintendo and the Game Boys and Mario and Mario Kart. They've been amazing. Chinese have not produced quite that much. And I think the Labu is the first.
- [133:05]
John Coogan
Yeah, the first attempt, I suppose.
- [133:06]
Dan Wang
I think this is kind of a new thing, but China's been getting richer for nearly five decades now. And this kind of a weird doll is. Is that the best they can do?
- [133:15]
Jordy Hayes
I don't know. Well, TikTok. TikTok would be the other TikTok feels like TikTok is.
- [133:20]
John Coogan
It's not its own cultural power. It's not its own brand. It's like a bucket that people put different brands into. It's like the hoverboard, the anonymous hoverboard that came. That product was developed in Shenzhen and. And no, it. And it never had a brand around it. It was just five different front brands on top of a technology that was engineered. I don't know. It was an interesting phenomenon.
- [133:44]
Jordy Hayes
Yeah.
- [133:44]
Dan Wang
I mean, mostly on TikTok, all I'm watching are short clips of TBPN. Not the Chinese propaganda. Right. I'm only watching American propaganda from.
- [133:51]
Jordy Hayes
I mean, that is really proof that they're not putting their thumb on the scale.
- [133:55]
John Coogan
If we have any traction over it.
- [133:56]
Jordy Hayes
If we have any traction. Have you been. Have you been surprised to see Elon engaging in. In lawfare with the apples of the world? The OpenAI's feels like if anybody represented the engineering state in America, was Elon creating these mega projects, massively impactful companies.
- [134:18]
John Coogan
Yet more broadly, just. It feels like the lawyerly society kind of had organ rejection from having an engineer in the room that was like. I don't know if I'm trying to apply your frame of thinking to the Elon Trump. There were other people that were successful in Washington. David Sacks has a law degree. Peter Thiel has a law degree. Keith Raboy has a law degree. Elon goes in.
- [134:41]
Brian Pellegrino
J.D.
- [134:41]
John Coogan
Vance. J.D. vance. Elon goes in. He's in the same crew. He's in the PayPal mafia. And yet he is ejected pretty quickly.
- [134:49]
Dan Wang
Yeah, I mean, I think this is one of the tragedies of Doge. I feel like we could have had engineers building a really big megaproject inside government as we used to do. We had Robert Moses build a lot of projects in New York, sometimes not very well. We had Hyman Rickover, father of the nuclear Navy, build this giant Navy project powered by nuclear reactors with some ships as well. What did Elon do? While he wasn't really trying to build anything inside government, he was kind of destructive to a lot of aspects of government. And I really wish he applied his talents more to like build 30 big nuclear reactors for, for the US instead. And that's, that's not what happened.
- [135:27]
John Coogan
Would those need to be net new projects? Like, is that, is that a more fertile ground for government projects as opposed to say, take over intel, take over the high Speed rail initiative, like take over something? Because it just feels like there's a lot of stuff that's not working both in the private sector and the public sector. And that seems to be where we focus as a society in America. Just there's so much that's going wrong. The government is kind of the lender of last resort that can step in when I agree with you. I think I like the idea of another Apollo project, another Manhattan project, another project that's like completely new and no one would underwrite it in the private sector to begin with.
- [136:05]
Dan Wang
Yeah, let's have both. Let's have a functional high speed rail project out of California. Let's have many more nuclear reactors. Because we, I think we had only one new nuclear reactor in something like the last 40 years. And that's kind of pathetic. I'm talking to you now from New York. New York is trying to fix up Port Authority bus terminal. It's going to take something like five years and $6 billion to make a new bus station. Every mile of subway that New York builds costs something like $2 billion per mile. This is just the highest cost in the world. And we can't even build something as simple as a public toilet in San Francisco. And so, you know, we need to get better at every sort of thing. You know, we need to do the public toilets, we need to build the bus stops, we need to build the nuclear reactors. Let's go to the Mars.
- [136:48]
John Coogan
Yeah, yeah. Is one possible path here, the wolf in sheep's clothing, the engineer with a law degree that they acquired online or something, they pass the bar in their free time. Like can, can the lawyerly society be hacked in the way that, you know, an engineer might social engineer a, a job application or reverse engineer an API and hack a website?
- [137:17]
Dan Wang
Yeah, I want Peter Thiel to hack all of that and be the lawyer that actually is actually the real engineer. I think that would be great if something like that could happen. But I also feel like the US Used to be an engineering state. You know, it built a lot of in the 19th century, built canal systems, built the train systems, built a lot of skyscrapers in Manhattan and Chicago. And then in the mid 20th century, we built the highways. We got Apollo, we got Manhattan, we built the Hoover Dam. That heritage is out there. But right now, it feels like we're walking amidst the ruins of a fading industrial civilization, and we need to at least renew this and hopefully build more, too.
- [137:56]
John Coogan
Yeah.
- [137:57]
Jordy Hayes
Trump yesterday said we're going to get along good with China. I hear so many stories about how we're not going to allow their students. We're going to allow. It's very important. 600,000 and students. It's very important. Where do you think that's coming from? Feels like a little bit of a pivot. And do you think there's that much demand on the student side for opportunities at U.S. universities?
- [138:25]
John Coogan
Yeah.
- [138:26]
Dan Wang
TRUMP is now the most pro China member of the White House. As I said, I think I've always, every time I saw Trump and I was living in Beijing in 2017, 2018, when he was visiting China, he visited the Forbidden palace once. He's always said nice things about China. Up until Covid, his real enemies are like, the Germans and the Japanese. That's been long the case, and that's not always going to be true. But, you know, a couple of months ago, when a journalist asked him, does the US Want so many Chinese students? Trump said, it's our honor to have them. You know, it's our honor to have them. And I think that's a really ringing endorsement of Chinese students. I think there's still a lot of Chinese who are really keen to move to the US they're attracted by some aspect of working without censorship. If they're in the arts, if they're working in journalism, they're attracted by some aspect of pluralism. New York is a great place. San Francisco is a great place. They want to come. And I think more American students should also go to China. Take a look at what Shanghai is like. Take a look at what Shenzhen is like. You know, let's just have more exchange and let's have more mutual curiosity, too.
- [139:32]
Jordy Hayes
I studied abroad in Shanghai in 2016. And what'd you think? Within a week of arriving, I decided to stop studying Mandarin and I was excited to go home. I think that's. That was part of. Part of partly because I Was born and raised in California and I like clean air and healthy food and things like that which are not in large supply over there. But I was still shocked. It was overall a cool experience. It was interesting because I was working at a. Interning for a company that was at a Chinese startup accelerator and I got to experience how hostile the sort of local market was to external kind of startup players in the ecosystem.
- [140:22]
John Coogan
You also got paid to be in a promotional film about teaching English, which you weren't doing. Right?
- [140:28]
Jordy Hayes
Yeah.
- [140:29]
John Coogan
Local government fraud.
- [140:31]
Jordy Hayes
Yeah. No.
- [140:32]
Dan Wang
Can we pull up that clip?
- [140:33]
Jordy Hayes
Let's find it. I think it'll be tough to find. I still don't.
- [140:37]
John Coogan
Yeah. One day Jordy gets paid to go out to some. Like the official was clearly cooking the books on like how much English was being taught.
- [140:45]
Jordy Hayes
Yeah, there was, there was a, there was a local. Some, some state government had like really bad test scores and they, they wanted to bring English teachers which, anybody, any student in China can become like an English teacher or whatever. But anyways, it was a very weird, very weird experience. This was also during the, during the election cycle, which was just absolutely wild. But I'm not surprised now that I think there's like only 800 ish American students currently studying in China, which is just such a wild, wildly inverted from, from how many Chinese students that we have here.
- [141:22]
John Coogan
Switching gears, what do you think of. I liked, I like the take about like the, the quantitative nature of Chinese policies. Zero Covid the one child policy. It's very quantitative. My, my kind of take on the, on the Chinese birth rate decline was that if you can effectively put a gun in someone's face and tell them they can only have one child. You can put a gun in someone's face and tell them that they have to have three children. And so is there actually cause for nervousness or fear around true population decline if you do have the authoritarian playbook in your back pocket and you can just upregulate fertility, essentially?
- [142:11]
Jordy Hayes
I doubt it. I think it is.
- [142:13]
Dan Wang
You can stop a lot of births by putting a gun to people's heads. It is really difficult to coerce some measure of copulation. How are you going to get two people in bed and put a gun to their head? I think that's not the best conditions. It's not the best conditions. It's much harder.
- [142:32]
John Coogan
Is population decline overrated? Underrated? Is it a serious threat to China in the long term from an economic perspective or population perspective?
- [142:42]
Jordy Hayes
Yeah, Peter. Overrated in the short term? Yeah. Peter Zeihan loves to go on and say how cooked.
- [142:49]
John Coogan
Yeah, yeah, he's been saying that for a long time, but yeah, what were you saying?
- [142:52]
Dan Wang
Overrated in the short term, correctly rated in the long term. I mean, the curve is not that steep right now. The population is really gently declining. You don't need a giant population in order to have a semiconductor industry. Right. The global population of semiconductors is not that large.
- [143:08]
John Coogan
Yeah.
- [143:09]
Dan Wang
And so this is really going to bite something like 20 years from now. But that's still 20 years when, you know, 20 years is a plenty long time. Twenty years ago, you know, we were dealing with some sort of a housing bubble and the US was bumbling around in Iraq and Afghanistan. 20 years could be a long time. And it could be that China fully deindustrializes Germany and Japan and maybe even the US over the next 20 years. And that sounds pretty bad.
- [143:33]
John Coogan
Yeah. What, what is your frame of thinking around the Chinese semiconductor industry? It feels like they've been investing consistently for decades. Never really hit the leading edge, but they've always been there in the conversation. They've never stopped investing. But, but how do you think about China's place in the competition against tsmc, asml, the rest of the kind of western semiconductor supply chain?
- [144:04]
Dan Wang
They've never caught up, but they're closer and closer. And as they get closer and closer, the profits among the leaders are going to shrink because they're going to be out competed by China. You've already seen this happen in memory chips, which is simpler. But Micron has been kind of struggling for quite a while. Intel struggles have almost everything to do with itself and nothing to do with China. But it could also be that once China gets much better at Foundry, then a lot of orders will shift to smic, which might be able to offer a lot of cheaper alternatives. So I don't think that China will catch up to TSMC in the Next, let's say 10 years. It might never catch up. China also might never catch up to asml. But if it is just consistently following behind and it's good enough, you know, maybe that extra quality level is not worth triple the prices. And that's always been China's success. Right. They make, you know, 80% as good at half the price and that's good enough for most people. And once that shifts, then a lot of the leaders stop having profits too.
- [145:02]
John Coogan
Are there any, are there any moves by the United States in the competition for semiconductors with China that you would like to see America avoid or you'd like to, to see America particularly go down A particular path in terms of the semiconductor competition.
- [145:21]
Dan Wang
I think that America should import a lot more Taiwanese engineers, send them to Arizona, send them to California, wherever it is, and then just bring all of their process knowledge and to manufacture in the US Instead. The US hasn't done a great job supporting Micron hasn't done a great job so supporting Intel. I'm skeptical that nationalizing these companies is really going to be a good olution, but the US has everything it needs to succeed in chips. You know, intel hasn't been good, but Nvidia and Apple could shift a lot more of their orders to, let's say, a better intel or a better tsmc. TSMC import a lot of ASML equipment and then just become a lot better at that. It has a lot more resources and much more capabilities than China does now.
- [146:06]
John Coogan
Yeah, the yields in Arizona seem particularly good. I'm not sure where I heard it, but someone was saying that there was the potential of TSMC spinning out the Arizona assets, which I think might be quickly made a meme stock, but certainly would be an exciting, exciting development.
- [146:22]
Jordy Hayes
How do you expect the trade war to resolve between the US And China, just given Trump's more up to date messaging around, signaling that, you know, we're actually, we actually might be friends after all?
- [146:37]
Dan Wang
Every time it gets close, there's always the chance that it falls apart. And I've seen that the trade deals fell apart several times when I was living through the first trade war in Beijing. And so I want to be optimistic that these two countries come to some sort of agreement so that, you know, we don't have the world's two biggest countries at each other's throats, two biggest economies at each other's throats. But I'm not really optimistic. Trump is erratic, and sometimes he wants to make a deal and sometimes he doesn't. And even if Trump and Xi come to some sort of agreement, I'm not sure if that's really good for the world. What if Trump decides that he's simply going to gift Taiwan to Beijing? You know, I don't think that would be good for the world. And I think there's a lot of people, European countries and other Asian countries who are really nervous that they do come to some sort of accord. So I don't have a good sense of what is the right move here.
- [147:31]
John Coogan
How do you think China is thinking about Taiwan? I think America comes to the Taiwan conflict with a very Cold War mindset, a very kinetic warfare mindset, where I've heard more interesting theories around sort of like, slowly shifting the population with propaganda and political influence and just creating a more. More pro China. Taiwan, over time, being very patient might be something that's like, more in the direct playbook of China. What's your current thinking on how. How China would like Taiwan to play out if everything went according to plan over the next decade or so?
- [148:18]
Dan Wang
China has had this patient strategy for a really long time, and then it's tried to shift the population with propaganda, and it was on course to work until they blew it up themselves by being really mean towards Hong Kong. So China promised Hong Kong that it's going to have essentially 50 years of freedom, and it did have about 20 years of freedom. And as he went back on, basically, basically Deng Xiaoping's word and they crushed it. And so after that, you saw that the Taiwanese population don't have faith that China would actually respect any of their own wishes. And so I think what we're thinking about now is I don't think that a kinetic action, a big conflagration in the Pacific is the most likely. I think the most likely path is just some sort of status quo, which the two, you know, us, Taiwan, China, don't really try to do anything big. And if anything, more likely than a kinetic action would be some sort of a blockade to surround Taiwan, and then the US would be in this kind of a tough position to have to be the initiator to break the blockade rather than being the defender of Taiwan. And so I think that that is kind of the challenging, politically challenging thing that Beijing would like to put the American position in.
- [149:29]
John Coogan
Yeah. Well, hopefully it's resolved to peacefully. We'll continue monitoring the situation. Thank you so much for always monitoring. Always monitor.
- [149:36]
Jordy Hayes
Yeah. Congrats on the launch.
- [149:37]
John Coogan
Congrats on the launch.
- [149:38]
Jordy Hayes
Thank you very much. Yeah, we'll talk soon.
- [149:42]
John Coogan
Have a great day. All right, we'll talk to you soon. Bye. The book is Breakneck. You can go and check it out.
- [149:47]
Jordy Hayes
Dan Wang, thank you for. Write up the charts.
- [149:50]
John Coogan
Yeah. Send it up to the top of the charts. Our next guest is in the restream waiting room. We have Nick from Adio coming into the studio.
- [149:58]
Jordy Hayes
Sharp.
- [150:00]
John Coogan
What do we got?
- [150:01]
Jordy Hayes
Fantastic. Name the news.
- [150:03]
John Coogan
Give us the news.
- [150:04]
Jordy Hayes
What's happening? Welcome to the show.
- [150:07]
Nick (Adeo CEO)
Hey, guys. How you doing?
- [150:09]
Jordy Hayes
Great. Late for you, right?
- [150:12]
Nick (Adeo CEO)
Yes, it is. Especially when you are. You've got two toddlers asleep in the house. This is well past bedtime.
- [150:19]
Jordy Hayes
Yeah. Yeah. Well, I know how that goes. And yeah, I'm glad you were able to. Always good to get Them it's good to have a meeting set for somewhere around bedtime. It's like extra incentive to have bedtime.
- [150:32]
Nick (Adeo CEO)
And also dodge the duties of putting them to bed.
- [150:35]
Jordy Hayes
So it's all good.
- [150:35]
Nick (Adeo CEO)
Thank you.
- [150:36]
Jordy Hayes
Good, good. Well, big day. Big day. Congrats on the raise. I have the gong mallet here ready if you can give us the details.
- [150:47]
Nick (Adeo CEO)
Absolutely. So we are very, very excited to announce $52 million Series B led by Google Ventures with existing lessons.
- [150:58]
Jordy Hayes
Sorry to interrupt. Fantastic breakdown. Give us, I mean, first time on the show. Give us kind of his full, kind of abbreviated but full history of the company and how you guys got to this point, because it hasn't. It's a big milestone, but certainly been at it a little while now though.
- [151:20]
Nick (Adeo CEO)
Yeah, absolutely. No big long journey. So fundamentally what we do is we build an AI native CRM. And what that means is a very, very flexible data model allows businesses to mold out here to go to market motion rather than having to do it the other way around, which has been the way software has worked for a while. And then massive amount of data ingestion, which gives us all of the context to automate action. Essentially, DRM is a big product to build, a very big product to build. And there's not really an MVP of a CRM. It's a big ask for a customer to adopt it. And we've got about 5,000 companies that have now adopted Aztio. But to get there is a lot of engineering. And so we did three years of engineering in a, in the sort of startup desert, pre launch, pre launch. And yeah, so we did three years pre launch of just hard engineering grind and launched about two years ago.
- [152:25]
Jordy Hayes
Incredible. I guess maybe talk about kind of the inflection points at what stages, kind of where LLM started to really unlock value for. For customers and kind of where you had those initial sparks. Because I think like when people, for better or worse, every CRM provider now says that they're AI native. So I also want to understand like what does that actually mean in practice and what kind of advantages do you have as a new player that hasn't been in the industry for a couple decades at this point?
- [153:02]
Nick (Adeo CEO)
Yeah, I mean, I think fundamentally we have two really big advantages. So one is the quantity and resolution of the data that we ingest and building a data model that can do that. So LLMs work great when they have lots of context and you need to feed them that context. And so one of the things that. One of the first things we worked on was this data model and being able to instantly ingest the company's emails, calendar, product data, et cetera, et cetera. That was the bit that really took, took a long time to build, especially when you need to do the scale you have to do it at for CRM. The other thing that is.
- [153:48]
John Coogan
A big.
- [153:49]
Nick (Adeo CEO)
Difference between RTIO and sort of legacy products is that we think that we have a thesis that code is becoming the new no code. So the idea of no code and these kind of very complex UI that you have to learn and very steep learning because you're not learning how to code, but you're learning something pretty complicated and especially when you start to hit up against edge cases, et cetera, then the UI has become extremely complicated. One of the things that we've engineered into Atio from the offset was the ability to execute code inside of your CRM. If you think about what has made Salesforce successful is this infinite flexibility through very, very complex engineering processes with Apex and a language not many people know and huge amounts of difficulty. But what we do with that here is build in this sort of native code execution very early. And LLMs are brilliant at generating code, especially in these kind of safe, somewhat constrained environments. And so that's another thing that we think is going to, especially as this plays out is going to be a really, really big deal. This idea that software becomes so much more malleable because code is so much easier to generate.
- [155:06]
Jordy Hayes
How do you think about the right. Where's your focus on the customer side again? CRM has so many different applications within different companies and in the long run you can serve everyone. But what's the focus been to date in the kind of 5,000 you mentioned?
- [155:24]
Nick (Adeo CEO)
Yeah, so the focus really is on what we would consider builders.
- [155:30]
John Coogan
So.
- [155:30]
Nick (Adeo CEO)
So people who like to get stuck in to building things. The rise of the gtm, the go to market builder is, is pretty, it's pretty apparent now and so about 50% of our customers are tech companies and even the 50% that aren't tend to be people who really want to get stuck into building something. But you know, as you said, CRM has a huge range of users and we think deeply about the kind of, you know, the consumer of the CRM, that's the, the SDR, etc. All the way through to someone in rev ops or you know, building out really complex go to market motions. And so we have to serve all of those customers and you know, we focus a lot on making the consumption of the CRM super seamless as well. And obviously AI has Been incredible for that massive reduction in data entry and stuff like that.
- [156:28]
John Coogan
Talk to us about gross margins. They're in the news with a lot of companies sort of like just reselling inference. Obviously your business is very different than that. It doesn't feel like I'm just paying you for tokens or just output. But are there any examples of customers where you've looked at their usage and you've been like, wow, this person somehow triggered like a million, a million different calls and ran up a big bell? And are there any lessons that you've learned from just like building an AI product that is on the back of inference and does have real costs that are somewhat variable?
- [157:06]
Nick (Adeo CEO)
Yeah, yeah, absolutely. And like all good startups, the sort of approach we took to this initially was it's not our focus right now. In the last sort of six months, 12 to six months, we've actually made incredible, you know, incredible gains there and we're in a very, very good place now. And that has been a combination of, I mean that's, that's a combination of models getting more cost effective and us learning to use them better. One of the things that we can do, for example, is we can, we can decide at runtime which model is best suited for a task. So I think this is now becoming a relatively mainstream strategy. But if we're digesting an entire call transcript, we don't need to use the best reasoning model. We can do sort of compaction first on a faster, cheaper model and then put less tokens into a better reasoning model. Exactly. And so it's been a big engineering effort that with a combination of all of these techniques, you know, we have very, very good margins. Now the other thing is a lot of the, the, the, the sort of, the value that the LLM provides is very apparent to the end user though it's work done and that's changing the way that we think about pricing as well. And so, you know, CRM has historically been just a seat based product, but I think increasingly we'll see that that will, that will change. And we now have a hybrid pricing model which is there is a seat based aspect and we give sort of very generous automation and sort of AI credits to those seats. But if you want to go really wild and you want to replace a lot of work, then you can buy credit to do that.
- [158:53]
John Coogan
Yep, that makes no sense. Well, congratulations on the round. Thanks so much for hopping on the show. We will talk to you soon. Have a great rest of your day.
- [158:59]
Jordy Hayes
Come back on anytime. Absolutely.
- [159:02]
Nick (Adeo CEO)
Thank you guys. Yeah, Nice to see you. See ya.
- [159:05]
John Coogan
Up next, we have Sean from Coinbase joining. I want to get his reaction to this. Front page news about stablecoins. Wall street calls for stablecoin rethink as friction with crypto industry builds. There's a loophole on industry yields, apparently. We're going to dig into it. He's in the Restream waiting room and now he's in the TV and ultradome. Welcome to Stream. How are you doing?
- [159:25]
Jordy Hayes
Good to see you.
- [159:26]
Sean (Coinbase Chief Business Officer)
Hey, guys, I'm doing great. Good to be here with you.
- [159:28]
Jordy Hayes
The Chief Business Officer.
- [159:30]
John Coogan
It's a great title at any title. It's the best. Anyway, give us a little your background and what you're working on. What's the most interesting thing in your world these days?
- [159:40]
Sean (Coinbase Chief Business Officer)
Yeah, first off, congrats on 100k. Pumped for you guys in under a year. That's huge. You know, we're just trying to keep up with the crypto charts here. Yeah, my background stuff. So, like you guys mentioned, I'm Chief Business Officer at Coinbase. I oversee the broader company's strategy, partnerships, M and A investments and a handful of other things. I actually started out my career wanting to be a brain surgeon. So I studied neuroscience at ucla. Realized like late in college that I had a big enlightening moment, which was that I fainted when I first, like saw that much blood up close. And I realized like, hey, this isn't.
- [160:21]
Jordy Hayes
Going to be the thing for me.
- [160:23]
Sean (Coinbase Chief Business Officer)
I ended up working in strategy consulting. I know you guys have been talking a lot about intel and semiconductors today. Those were like some of my early clients there. We're doing a lot of due diligence for private equity firms and the like.
- [160:36]
John Coogan
Were you pounding the table saying, go Pure play foundry in 2020?
- [160:40]
Sean (Coinbase Chief Business Officer)
Yeah, not quite.
- [160:41]
John Coogan
You're like, Ben Thompson just wrote about it. We got to implement this.
- [160:44]
Jordy Hayes
Yeah, exactly. I don't know if you had the same clout back then.
- [160:48]
John Coogan
Well, fortunately, yeah.
- [160:50]
Sean (Coinbase Chief Business Officer)
After the consulting thing, I wanted to get more on the right side of the table in terms of allocating capital. So I worked in venture at a fund called Greycroft. You're actually based down in the Arts district, John Down.
- [161:02]
John Coogan
I've been to the office.
- [161:04]
Sean (Coinbase Chief Business Officer)
We were early movers there, to the east side of LA. And then I jumped on Coinbase in 2018.
- [161:11]
John Coogan
Yeah. So take me through the recent, the recent history of your work at Coinbase, what you're focused on, what. What is moving the needle for Coinbase and kind of this, this next phase, it's obviously a very Scaled company, but it's one of the, it has to be one of the largest founder mode financial institutions now. And I'm starting to stop thinking, I'm thinking about it less as like, yeah, it's the place where you buy Bitcoin and more just like it is a financial institution that does a lot of things and potentially will do kind of everything in the financial world over the.
- [161:42]
Jordy Hayes
Next decade and been extremely acquisitive.
- [161:44]
John Coogan
Yes. So yeah, give us a whirlwind tour.
- [161:48]
Sean (Coinbase Chief Business Officer)
Yeah, totally. I think two primary dimensions. So historically, like you mentioned, I think Coinbase has primarily been known as this place where we make it really easy and secure for people to buy and sell crypto assets. Right. And people know us for the first party applications, the Coinbase Blue app, which has been great, but we're broadening that out now to support a wide range of different assets. I think fundamentally it's driven by, we think that all assets are going to get tokenized and be on chain in some capacity. It just provides better infrastructure for financial transactions. And so we, we announced pretty recently that, you know, for the first time Coinbase is going to be building what we call the everything exchange and supporting things like equities, prediction markets. We opened up through the Coinbase app now that you can trade assets directly on Dexs. So in general what we see is basically the blurring of these lines between what was off chain and on chain. And we want to make a very simple and seamless user experience for people to access all of these assets that are going to be on chain. So that's.
- [162:55]
John Coogan
Yeah, go ahead. Yeah, yeah. I mean in general, super on board. I feel like liquidity just lowers cost of capital, allows businesses to do more impressive things. It's good. Obviously there are areas where I'm particularly thinking of like stocks on chain. There's situations where like I don't know that I'd want someone to be trading shares in my company all the time. So how are you thinking about that market evolving? Obviously there's a huge benefit to getting access to capital without some of the over like the cumbersome nature of the reporting constraints of going public and all the different issues with floats and IPOs. But how are you thinking about the path to bringing more assets on chain? What's the most logical and then what's further out on the long time horizon?
- [163:50]
Sean (Coinbase Chief Business Officer)
Yeah, I think it starts with the regulatory front and that's where we see the biggest uphill battles. So right now it's sort of like in vogue to talk about tokenized Stocks and theme of tokenization. And tokenization isn't really anything new. When we co founded USDC in 2018, it's a tokenized dollar, right? Like it is a dollar on a blockchain. And at that time people were sort of like what is this thing good for? But now they realize like, hey, you have all these benefits that are just come with the asset when it's on chain. So you get programmability, interoperability, global access, all those types of things. So public stocks, this is like the new thing that people are really excited about. And we're really excited about it too. Actually in 2021 I was helping take the company public through our direct listing and we actually explored issuing a tokenized version of coinbase simultaneous with the exchange listed version of Coin. And you know, that was always the dream where you could basically have a user that holds the asset on chain and if they wanted they could redeem and hold the asset on NASDAQ or go vice versa depending on their preference. And we just ran into a number of different regulatory blockers in 2021 where we realized that wasn't possible. And so I think the regime change in 2025 makes it much more collaborative. There's a very healthy bidirectional conversation that's ongoing around, you know, what are the rules and requirements for an asset that's traded on chain? Do you need to be, does it need to live in, in the environment of a broker, dealer and a national securities exchange or does it not? So we're really excited about the regulatory environment progressing with the benefits of the technology.
- [165:35]
John Coogan
Is there a great argument right now that you've heard for how like your average American benefits from stablecoins? Because I've literally paid people internationally in stablecoins. It is amazing. And if they don't have access to dollars otherwise like in a high inflation country, I totally get that. But is there a way to contextualize it for somebody who isn't doing any international business and is an American? Like what are the benefits besides like, you know, programmability?
- [166:06]
Sean (Coinbase Chief Business Officer)
Abstractly, yeah, I would say right now most of the benefits are really cross border transaction oriented. But like, you know, the one that I think will resonate with a lot of people who are Americans even is, you know, if you're hiring freelancers or contractors around the world, like how do you get them money? These are people that you might need for like a one time job or for like just a few weeks, it's a lot easier to do that. And you know, we have a Partnership with Stripe, where Stripe is enabling stablecoin payments through USDC on base. And one of Stripe's key customers is remote.com. and they start to see that this is just a naturally native, better way for small startups and founders in the US to pay freelancers regardless of where they are in the world.
- [166:50]
John Coogan
Do you think that, like, the freelancer, are they more just excited about getting dollars, or do they actually care a lot about, like, the yield that comes from Treasuries and all of that? Because it feels like they're. They're both important, but I have trouble weighting them. Like, what do people.
- [167:07]
Jordy Hayes
One obvious benefit is just getting the money immediately versus having days.
- [167:11]
John Coogan
Yeah.
- [167:12]
Jordy Hayes
Actually 10 days. Get your money even after the client has hit pay.
- [167:17]
John Coogan
Yeah, yeah.
- [167:18]
Sean (Coinbase Chief Business Officer)
I think the thing that has become clear is there is just insatiable demand for US Dollars around the world. Like, everybody wants US Dollars, but it's really difficult to access US Dollars too. So, John, I think to your first question, the pain point is really, I want dollars or a safe, stable currency. And then, Jordi, to your point, it's like I want it as quickly as possible in a form factor that I know and I trust. And, you know, we started to see this kind of organically a couple of years ago where a lot of people in Argentina, Argentina and a lot of other countries were just like, natively finding their way into dollars. Stablecoins. And in those countries, you know, we spoke with a lot of customers and it's. It's normal, right? Like, you look for different stores of value, whether that's, you know, buying real estate in the US or gold or Bitcoin. And Stablecoins are just a natural and more relatable form of store of value for a lot of these people.
- [168:16]
John Coogan
Yeah.
- [168:16]
Jordy Hayes
Can you talk about the significance of the Deribit acquisition that you guys just completed?
- [168:21]
Sean (Coinbase Chief Business Officer)
Yeah, we're really excited about it. We just closed it for context. Deribit is the world's largest crypto options exchange. Specifically, They've had about 80% market share in crypto options for the last 8ish years or so. So kind of like up and down through the various crypto cycles. And in the crypto markets, derivatives are orders of magnitude larger than spot markets. Coinbase kind of grew up and got its foundation and its roots in helping people seamlessly go from fiat currency, primarily US Dollars and euro and gbp, into crypto. And the derivatives markets have. Have just sort of like ballooned in size. So over the past year or so, we've made a Big push into the derivatives markets. We have exchanges in the US and internationally that support a handful of products. But Deribit really for us brings us market leadership in this options category that we think is going to grow tremendously. It's also a differentiated capability that will basically pull together spot options and futures as different trading products together into one exchange platform. And what that does for users is really two things. One is it creates new trading opportunities. A lot of people will buy spot and short features. And you can do that now across more instruments just on one place. And then the second thing is it unlocks more capital efficiency. And this is really a key one is whenever you put on.
- [169:56]
Jordy Hayes
Let's give it up for unlocking capital efficiency.
- [169:58]
John Coogan
Love to see.
- [170:00]
Jordy Hayes
Doesn't get better than that.
- [170:02]
John Coogan
Yeah.
- [170:03]
Sean (Coinbase Chief Business Officer)
Whenever, as you guys know, it's like, how do I get the most bang for my buck? Quite literally, right? So if you can trade across all those different assets, you hold $1 or one crypto asset with Coinbase, then you basically can get margin and cross margin across all these different products with that $1. So it's, it's just a better trading experience overall for, for people who move in size.
- [170:25]
Jordy Hayes
Very cool. Let's hear for people that move in size.
- [170:29]
John Coogan
You play the eagle sound.
- [170:31]
Jordy Hayes
There we go.
- [170:33]
John Coogan
I love it.
- [170:35]
Jordy Hayes
Thank you for coming on. You're always, always welcome.
- [170:37]
John Coogan
Yeah, anytime. We'll talk to you soon.
- [170:38]
Jordy Hayes
And congrats on the new title. Well deserved.
- [170:41]
John Coogan
Thank you. Well deserved. Cheers.
- [170:43]
Jordy Hayes
Up next, we need to make somebody the Chief Business Officer here.
- [170:47]
John Coogan
Yeah, it's up.
- [170:48]
Jordy Hayes
Simply too good.
- [170:49]
John Coogan
Tyler, you're going to take it. You're going to take it.
- [170:52]
Dan Wang
I'll take it.
- [170:52]
Jordy Hayes
Chief Intern Officer, the cio.
- [170:54]
John Coogan
Cio. But you know, any day now he could get promoted. Anyway. In the Restream waiting room we have Brian Pellegrino from Layer Zero. Oh, sorry.
- [171:04]
Jordy Hayes
No, we have.
- [171:05]
John Coogan
Okay, sorry. We have a switch. We are.
- [171:09]
Jordy Hayes
We have Rylan from. From Reframe. Right, There we go.
- [171:13]
John Coogan
Sorry, we're having technical difficulties over here.
- [171:15]
Jordy Hayes
Welcome to the show.
- [171:17]
John Coogan
Good to meet you.
- [171:17]
Vikas NT
Great to be here. And I'm glad you guys have Rylan on too.
- [171:20]
John Coogan
We do.
- [171:21]
Vikas NT
Old colleague of mine.
- [171:22]
John Coogan
Oh, no way. That's amazing.
- [171:23]
Jordy Hayes
From what era?
- [171:25]
Vikas NT
We were both at Kiva and Amazon Robotics maybe 10 years ago.
- [171:29]
John Coogan
That's very cool.
- [171:30]
Jordy Hayes
Awesome.
- [171:32]
John Coogan
I had a friend who just got a tour of an Amazon facility. They said like on site, just on this one facility, they had like 10,000 robots or something and they built the whole facility like six months ago. They said they're already two versions out of date from like what the next stage of Amazon's build out is. It was like the most impressive tour he's ever done anyway.
- [171:49]
Jordy Hayes
That's great.
- [171:50]
John Coogan
We're not here to talk about Amazon.
- [171:51]
Jordy Hayes
We're here to talk about you.
- [171:52]
John Coogan
Off with an introduction on yourself and what you do.
- [171:55]
Vikas NT
Wonderful guess. Well, it's great to be here. I'm Vikas nt, CEO and co founder for Reframe Systems. We're on a mission to build climate resilient homes for everyone. And we're doing this by applying some cutting edge robotics and algorithms with micro factories that we can deploy within 100 days to build pretty impressive good looking homes in neighborhoods all around the country.
- [172:17]
Jordy Hayes
Incredible. And the news today give it to us.
- [172:20]
Vikas NT
We've raised a $20 million Series A super pumped announcement.
- [172:26]
John Coogan
Not as pumped as us. Not as pumped as us. Congratulations.
- [172:31]
Jordy Hayes
Incredible. Incredible. When did you start the company and I guess what was the initial catalyst?
- [172:37]
Vikas NT
Yeah, we started about three years ago with the pitch deck. And the catalyst was as simple as me becoming a dad. My twin daughters are four years old now, but they, they. Yeah, so they were the catalyst to kind of take a step back and think about what else I should be doing in my time besides getting boxes to people's doors faster. And I decided I'll get bigger boxes of people's doors that boxes people can live in.
- [173:03]
Jordy Hayes
Right now you're, you're committed to making boxes go faster.
- [173:07]
John Coogan
Yeah.
- [173:08]
Jordy Hayes
You find what you love.
- [173:09]
Vikas NT
That's my super.
- [173:10]
Jordy Hayes
What kind of, what kind of. Yeah, I mean obviously Reframe is trying to provide a solution for one of the biggest problems I think facing our country. Where how have you thought about kind of narrowing in and focusing? Go to market. What markets are important and what does success look like in the early days?
- [173:32]
Vikas NT
Maybe I can kind of talk from what the big picture is for us. We want to build a million homes by 2045. That's twice as fast as what how long it took Dr. Horton, the largest home builder in the US to build a million homes. But the places we're going to be building homes look vastly different. If you think about where homes are getting built today, they're out in farmlands that have been converted. They're far away from existing communities. Like that's the only place you have land available for large scale optimized builders. We believe that by applying software and robotics we actually change that equation. We can actually be just as efficient as them. But in infill neighborhoods, how do we actually build 100 units not in a single lot, but on a bunch of scattered sites in a neighborhood in Palo Alto or a neighborhood out in Somerville or Cambridge, Massachusetts. And we believe that by leveraging software we actually get to a wall that we define as mass customization. How do you convert existing building designs to have it be compliant with any site, but make the marginal cost of this change go down to zero? Because software's in the loop, robotics is in the loop. And whoever can achieve that end state can get the same efficiencies of a production builder on scattered sites. And we believe that's our path for actually getting and creating the type of housing that people actually want to live in in neighborhoods people want to live in, ideally at price points that are also significantly better than what's out there today. So we're currently focused on markets that are building homes for over $400 a square foot. So the Europe markets on the coast, so New England, so we're currently based in Massachusetts, will be as part of the series, they will also be launching capacity out in Southern California to help with the LA Wildfire rebuild. So LA is also a target market. And then we have markets out. So Salt Lake City, Utah and then Denver adjacent and then Seattle and Washington D.C. adjacent would be other markets in the future.
- [175:15]
Jordy Hayes
How does is. What is the process to start working with somebody that ultimately wants to buy a home? Are you working with developers that are developing entire neighborhoods or can somebody just go to your, your website and say I want one house please?
- [175:31]
Vikas NT
Yes. So today we're very focused on working with developers. So it's still a B2B sales motion for us. We believe that the best customer is a repeat customer. And this is that we're trying to build a pretty long term, multi year pipeline. We have sold to individual customers, but the experience for them doesn't resemble that of a custom home builder. Like you're still building off of our product portfolio. We will customize our product to meet the site. We're not going to design a ground up custom building and if customers are fine with that, and that's the experiment we're testing out with la because now we're working with homeowners who've had their previous homes burned down and we're trying to help them rebuild. And we're able to make good progress with customers who realize they're going to get a better product significantly faster working with us, but they'll have to make some trade offs in what the product is and what their expectations are. And that's been an education process and We've actually been surprised that people actually just want limited set of choices. If you can give them choices on things like cabinet colors, a few different arrangements of windows, et cetera, they're actually pretty happy with the process versus saying you can only get one color or any color as long as it's black.
- [176:35]
John Coogan
Right.
- [176:36]
Vikas NT
I think that doesn't work out here. Doesn't fly in a house. And the whole aspect of mass production doesn't work for construction either. Which is why we've had to embrace customization.
- [176:47]
John Coogan
Yeah. That makes sense. Do any of these stick out as factors for your business? Self driving cars potentially making it easier to people live in farther away suburbs or just the adoption of technology in cities? You can live in a smaller house because you can put on a VR headset and you don't need a home theater anymore. Or you can go to a local gym instead of needing a home gym or a library because you don't need a home library. Or even like the ADU thing in California. The idea of building more smaller houses on existing plots of land are any of those factors that you think about?
- [177:25]
Vikas NT
Yeah. So the ADU factor has been great. Where I think is actually spurring a whole bunch of upzoning. You can actually add more units into existing properties. It changes the calculus for developers trying to develop new properties that get to add additional density. And we're also seeing this trend where people are actually okay living in smaller spaces which also results in us being able to build homes that are more space efficient. But the place that we're also keying off of. And I think that from the practical standpoint of self driving cars, solving the logistics challenge while that is true. But also noticing a generational shift taking place. If you actually look at buyer sentiment for zoomers are coming into the market eventually. What we expect Gen Alpha to also envision there is a loneliness pandemic. They're looking to build more connection and community. And I think their desires are actually vastly different than what was true for the boomers all the way through the millennials and gen buyers. So I actually think we'll see a migration of people coming back into cities or pockets of communities that are more denser and more connected than what they were for how development took place for the last 20, 30 years. And the only way to be successful in that space is how do you actually embrace scattered side development in full development?
- [178:30]
John Coogan
Sure.
- [178:31]
Vikas NT
And not build the 300 unit apartment building. People only live there because that's the only choice. People don't live there because they want to live with 300 other people who are complete strangers.
- [178:40]
John Coogan
Right?
- [178:41]
Vikas NT
I think so. This is a place where we get to refactor what housing of the future looks like. It's not just the farm, but just the connection of how it's connected to neighborhoods. But the only way to unlock that is again, new technology.
- [178:52]
John Coogan
You said a million homes by 2045. When do you want the first home to be built?
- [178:58]
Vikas NT
Well, we've already built our first home. It's occupied today, so we built our first home about 18.
- [179:03]
John Coogan
Thank you. Fantastic, man.
- [179:07]
Vikas NT
I need to get. I need to get one of those buttons here.
- [179:10]
Jordy Hayes
We'll license you the air horn every time you guys complete a new home. But congratulations, progress, it's tremendous.
- [179:20]
John Coogan
We'll talk to you soon. Have a good day.
- [179:22]
Jordy Hayes
Cheers.
- [179:23]
John Coogan
And our next guest is in the restream waiting room. We will bring them in to the studio.
- [179:28]
Jordy Hayes
I believe we have Brian from Layer Zero.
- [179:30]
John Coogan
Welcome to the stream. Play that soundboard, Jordan.
- [179:36]
Jordy Hayes
Here we go. Look at this background.
- [179:38]
John Coogan
There we go. How you doing?
- [179:39]
Jordy Hayes
Hot.
- [179:40]
Brian Pellegrino
How you guys doing?
- [179:41]
John Coogan
I'm good. You got some news for us? What you got?
- [179:44]
Brian Pellegrino
Yeah, I got lots of news. What do we. What do you want to go through?
- [179:48]
John Coogan
Kick us off. What's the biggest news in your world?
- [179:51]
Brian Pellegrino
Biggest news in our world is we just wrapped up the largest DAO acquisition in history. About $120 million. Yeah.
- [180:01]
John Coogan
Congrats.
- [180:01]
Jordy Hayes
Crazy. Okay, break that down for the audit. What does that actually mean in practice and kind of. Why did it make sense for Layer Zero and. Yeah, basically to combine these two businesses.
- [180:17]
Brian Pellegrino
Yeah, So I mean there's a little bit of context here. That's originally we built Layer zero, we actually built Stargate as well and spun it out and sort of was running as this independent entity. And we now have like refolded it back in with this acquisition. Right. So it's coming back home. There's been kind of me that the bridge is coming home finally. And so for us, layer zero already today, 86% of all dollars that move across chains happens through Layer Zero. Largest stablecoin in the world is built on us. Largest wrapped Bitcoin asset, largest synthetic yield bearing asset like first state issued dollar with Wyoming. All of this is already there. So we're doing that set of things you have on the background of Larry Fink saying, listen, every. Every stock, every bond, every asset is going to be tokenized. So like we're already sitting there. Stargate is the consumer touch point. Right. Stargate is where the end user facilitates where we've sat in the background. And so for us this was a verticalization of the entire stack. It's roll up the whole thing, have a single touch point, single offering to both developers, merchants and end consumer and have it in one single place.
- [181:24]
Jordy Hayes
That's awesome. So, so break down like what did the, what did the, what did the entity that was Stargate prior to this acquisition? Actually this was dow. DOW was thrown around. I think our audience, some people in our audience are more crypto native, but many others aren't. And so they may have heard about DAOs back in 2021, 2022, but are less familiar.
- [181:48]
Brian Pellegrino
Yep, DAO is sort of fascinating idiosyncrasy within crypto itself. Right. So DAO is decentralized, autonomous organization. We built this protocol, we launched it and then we basically said, hey, governance is going to be left up to all the people who hold the token. Right. So there's a bunch of people who hold the token. They have the ability to sell, stake and actively vote on all kinds of things, how things get priced, how the dollars that the protocol owned. So the protocol had accrued about $95 million worth of, worth of assets itself internally, like all kinds of things within it. And it was just running and naturally, as you can imagine, something that gets run by 50,000 people as opposed to a small group of very agile, fast moving entrepreneurs runs very differently. Right. And so what's meant is a lot of things are slower than you would like them to. Innovation is sort of like slow in that side. So I mean it was very dominant from a bridge perspective. That's what Stargate does, just move assets around. It's done about $80 billion of assets transferred. So the largest bridge in the space, but purely on the innovation side and to keep moving forward, much slower than kind of you would hope. And so the offer from the layers are side was, listen, we're gonna basically buy out these STG this governance tokens stg. We're going to pay a premium on top of what exists. So we're going to pay an offer above kind of what's there and the DAO gets to vote on whether or not to basically accept this or not. And so we paid again close to about $120 million at current market price. And so what happens is they get rid of their old token, they swap it for this new one, they now have this $120 million. So they're made whole, they're invested in, in the future direction of the new thing. And now universally that stack those assets, everything drives in a single Direction. So what was Stargate? What it was accruing value internally, revenue streams internally. Now all drive directly to layer zero.
- [183:42]
Jordy Hayes
How does it take private in crypto history?
- [183:48]
Brian Pellegrino
Largest DAO acquisition ever in history. Really? Not definitely not common, I think might become more common, but definitely very unique.
- [183:58]
John Coogan
Yeah, yeah. Are there like lawyers in the room? Is this all executed on chain?
- [184:02]
Brian Pellegrino
Is this everything on chain through the dao? So it's not like we don't have an agreement that we can sign with the dao. It really was an offer. So an acquisition is sort of how the industry is internalizing it. Because that makes sense what it really is. Hey, the DAO is going to vote to sell Sunset their own token, take this other asset in place of that, and basically migrate the whole system over. And they're getting a premium for doing that.
- [184:27]
John Coogan
So it looks more like a GitHub PR than a traditional filing from.
- [184:33]
Jordy Hayes
It has to be one of the most, one of the most efficient acquisitions from sell side from a cost and legal standpoint.
- [184:42]
John Coogan
Check in on the bank.
- [184:44]
Jordy Hayes
What should we be looking at for in the back half of this year? I mean, four months, I guess, at this point. But in terms of assets coming, coming on chain and tokenization broadly.
- [184:57]
John Coogan
Yep.
- [184:58]
Brian Pellegrino
Yeah. I mean like right now, what we've become most well known for where we sit is, is stablecoins. Almost every, you know, the large majority of stablecoins are built on top of this Pay, you know, PayPal, USDT. All of this stuff built moves through layers or. Right. So stablecoins have been a bread or butter that has been the focus of really what we're trying to do is the cleanest and most efficient money technology ever.
- [185:21]
Wade Foster
Right.
- [185:22]
Brian Pellegrino
That's really our pitch internally is the way that value moves and what you're going to see in the coming months and then accelerating very quickly from there is hundreds of tokenized equities stocks moving on chain. All of this again moving out of these same rails. So the layer zero, what makes it so special and what has, you know, we're talking hundreds of billions of dollars of assets moved is you can move Today, you know, $5 million, $50 million for cents or low dollars. Right. Like incredibly efficient to move extremely large amounts of capital around all of these ecosystems. So when you talk Stripe and Coinbase and Robinhood and Circle, all are launching their own networks. Right. And all of these platforms are racing for tokenization, for issuing equities on chain. Again, all of you know, this, this entire sort of Larry Fink 2025 mandate of like this is the way that the world is moving, none of those have the ability to talk to each other. Right. None of them. There is no way right now that you're going to settle between Coinbase and Robinhood or that you're going to be able to move these assets to anywhere. So that is where we sit. All of this flow that again, has been historical stablecoin flows. These hundreds of billions of dollars of stablecoin flows. Now you're talking every asset that exists. And so very. We're very directionally focused on that.
- [186:40]
John Coogan
Fantastic. Seem set up for success.
- [186:42]
Jordy Hayes
Yeah.
- [186:43]
John Coogan
Come back.
- [186:43]
Jordy Hayes
Come back on again soon. There's a lot more here and we should have a longer conversation. And congratulations on. On the take, private, the acquisition, whatever we want. Very cool.
- [186:54]
John Coogan
To be soon. Have a good day.
- [186:56]
Brian Pellegrino
Love to. Thank you guys so much.
- [186:58]
Jordy Hayes
Thanks for coming on.
- [186:59]
John Coogan
Our next guest is in the restream waiting room. Let's bring them into the studio. I think we got to get the gong ready again.
- [187:07]
Jordy Hayes
Rylan, what's happening? Great to see you. Hey, guys.
- [187:10]
Rylan
Good to see you guys.
- [187:11]
John Coogan
Sorry to keep you waiting. Give us the news. Welcome back to the show.
- [187:16]
Rylan
Thank you. It doesn't seem that long ago that was on the show, but we raised our Series A today, led by Google Ventures and diggy Nichello. $50 million.
- [187:24]
Jordy Hayes
50.
- [187:25]
John Coogan
Boom.
- [187:27]
Jordy Hayes
GV's been busy today.
- [187:28]
John Coogan
Busy today.
- [187:29]
Jordy Hayes
Busy day. They haven't. They're not taking. They're not taking August off.
- [187:32]
John Coogan
Yeah, yeah, that's true.
- [187:35]
Jordy Hayes
Incredible. Yeah, give it. Give us the update since. Since the last time you were on, it must have been probably two to three months. I'm also interested. I think I'm an investor in this round. Right?
- [187:46]
John Coogan
You are.
- [187:47]
Jordy Hayes
Yeah. I didn't know you guys have been moving. You guys have been moving very quickly. You know, you never. But. But, yeah. What's the update?
- [187:55]
Rylan
So we announced our sort of seed round came out of stealth in the spring. That round was just to get the company going, get the team together and start developing some of the key tech for what we're building. And we're building and designing autonomous ships for the Navy. And now with this Series A, we're actually able, as one of our investors said, we've left the reservation. We actually build a full prototype ship which will launch next year for the Navy. So when I say full prototype ship, talking about half a football field in length. So where, you know, there's a lot of unmanned service vessels that the Navy is working with today. Some are smaller in form factor, a little twirl. They're Great for choke points. But we're building ships that are meant for, like, the open ocean, that can operate all the way across the Pacific.
- [188:35]
John Coogan
And they can fit like basically a full shipping container on board, if not multiple. And then so you could put potential.
- [188:41]
Jordy Hayes
So in this case, you're saying half a football field. That is what the ultimate size will be. But you can't be starting.
- [188:48]
Rylan
It's the Goldilocks. So, like, we want to carry payloads that matter for the Navy. And so if you think about the payloads that today's guided missiles, destroyers carry, you can actually disaggregate them and take one or two of those payloads, whether the radars or the equipment look to hunt for submarines or even missile launchers, and put them on these smaller sized ships so they're big enough, they can operate across the ocean. You can carry the payloads that matter. We have the range and endurance for the Pacific, but we're not so big that we cost an arm and a leg. And so we're making ships that are Trident. They're reusable, so you can send them out and they come back, but if you lose them, it's okay. And it's relatively inexpensive compared to like a $2 billion destroyer.
- [189:27]
John Coogan
Yeah, we talked to Dan Driscoll about the army modernization project. What's going on with the Navy? What does it look like to sell into the Navy now as opposed to maybe five, 10 years ago?
- [189:40]
Rylan
I would even talk about a year ago. So a year ago when we started this company, we had a thesis around building the sort of Goldilocks type ship, sort of a medium. Davey would call it the medium unmanned service vessel. But it wasn't on the shipbuilding plan. There wasn't a ton of money around it, but we thought there was a need. And so we started the company with just, you know, a small check for to start the company. But what's happened is there's actually $2 billion now for this program. And so there's a ton of investment, there's a ton of activity and a ton of attention around the space. And so right now it's us and a couple other companies that are with our own dollars building what we think the Navy needs. And there's just an AI that went out, we submitted for it. So we're super excited to see all the progress in this space.
- [190:25]
John Coogan
How does the Jones act fit into your, your business model? Does it affect you? I've heard, I've talked to some folks who've said that it's making it difficult for them to source certain pieces if they're building in Europe or something. Obviously Europe has a long lineage of shipbuilding. But how does the Jones act fit into your strategy or benefit you or is it red tape?
- [190:48]
Rylan
That's a good question. I don't know who gave that one to you, but that's a little bit spicy. So in a good way, because of the Jones act, we have mid tier shipyards either on the west coast, the east coast or the Gulf coast that actually can build our ship. So we don't need to start from scratch. We don't need to go find 100 acres of greenfield and try to go build a shipyard, which will take years to go launch. We'll announce later this year a partnership with the shipyard so we can actually build and launch our ship next year. And if it weren't for the Jones Act, I'm not sure if that industrial base would be around today. But I think in some ways we're not as competitive as other countries in shipbuilding. And so because of that, we've had to go source some of our long lead items from other countries that have a sort of a deeper base around sort of shipbuilding. But we think we can bring shipbuilding back to the US And I think it's not by necessarily trying to compete directly with countries like China or Japan or South Korea, but it's about out innovating them and sort of taking a lead on the tech side. And so we believe in, you know, maritime autonomy not only for the Navy, but also for the commercial sector. We think there are a ton of different use cases that are out there. We're already getting comfortable. And you've seen in L. A like hopping in Waymo has zero drivers in the front and just taking that. And sometimes it's a preferred kind of method versus having sort of a manned vehicle that's out there. We can apply that same technology for the maritime industry and we're super excited to do that.
- [192:11]
John Coogan
That's very exciting.
- [192:12]
Jordy Hayes
Incredible. Very exciting.
- [192:13]
John Coogan
Thanks so much for taking the time.
- [192:14]
Jordy Hayes
To hop on grats to the whole team. Congrats and yeah, well, at some point I assume we'll do a podcast at sea. Oh, can't wait for that on one of your. One of your ships.
- [192:26]
Rylan
The next time I'll. The next time I'm on, I don't want it to be a funding announcement. I want to like do interview from like a shipyard and show you all.
- [192:33]
John Coogan
The cool stuff, the beauty. If you call in your phone, it's a zoom link. So we can.
- [192:37]
Dan Wang
Anywhere.
- [192:38]
Rylan
Exactly. If you want to see welding and.
- [192:40]
Dan Wang
Steel and all that.
- [192:41]
Jordy Hayes
Yeah, I want to see sparks.
- [192:42]
John Coogan
That'd be great.
- [192:44]
Jordy Hayes
Congrats.
- [192:44]
John Coogan
Have a good day.
- [192:45]
Jordy Hayes
Cheers.
- [192:46]
John Coogan
Up next we have Logan Kilpatrick from Google coming in. I think I have it right this time. I got a little mixed up my calendar.
- [192:52]
Jordy Hayes
We're caught up to speed.
- [192:53]
John Coogan
Logan, great to see you. Congratulations. Give us the news. What's the launch? Is there a number we can associate this so we can ring the gong.
- [193:01]
Jordy Hayes
For looking for any reason to hit the gong.
- [193:03]
John Coogan
Number of parameters, number of cost per token or cost per image or something.
- [193:08]
Logan Kilpatrick
0.39 0.039 cents per image.
- [193:14]
Jordy Hayes
There we go.
- [193:15]
John Coogan
Congratulations.
- [193:16]
Jordy Hayes
There we go.
- [193:18]
John Coogan
Step back, contextualize it for us. Give us the actual news, the actual update.
- [193:23]
Nick (Adeo CEO)
Yeah.
- [193:24]
Logan Kilpatrick
Super exciting day. So we launched, I think folks have probably seen online this whole nano banana thread. We should have gotten you all in banana suits or something for this.
- [193:34]
John Coogan
Yeah.
- [193:34]
Logan Kilpatrick
We launched this new model, state of the art image generation editing model. I think what people are losing their, losing their mind over is just this character consistency of how well you can do all of these prompt based edits and transform whatever people have. I've seen all these great examples online already of what people are doing. So it's awesome to see. And it's a model that's available for free for everyone to go and play with and try Gemini app, AI Studio. You can vibe code, some cool stuff with it. I was working on a TVPN announcement card generator earlier.
- [194:06]
John Coogan
Oh, that's amazing. We need that.
- [194:09]
Logan Kilpatrick
I'm like I'm putting your media team out of work.
- [194:13]
Jordy Hayes
No, I mean the biggest thing there is speed. It's just about the ideas matter.
- [194:17]
John Coogan
More timings. Yeah, yeah, yeah. I love that. What's the story on the research side that unlocked this? Is this new algorithm, is it just more scale, bigger data center, big training run? Is it some sort of unique advantage to Google on the data side? Like what, what went into achieving this? Because I think people are tracking this stuff very closely these days.
- [194:41]
Logan Kilpatrick
Yeah, yeah, that's a great question. I think there's three things quickly that I'll mention. I think one of them is there is this interplay between image understanding capabilities and image generation capabilities. And it's actually I was just talking to the VO team two weeks ago as well. And it's a similar story on video as well. Which is like if you have state of the art video understanding, it tends to be that that actually really helps you when you want to generate really great videos. And there's a bunch of dimensions of why that's the case. So I think that's part of it which is from the ground up. Gemini was built to be multimodal. So it's been like the core focus from a modeling perspective for a long time. So I think we see that now in the generation capabilities. I think another one is this iteration from Flywheel that we had. So we initially launched this was actually before OpenAI launched the GPT image model. We shipped the first native LLM image generation model and got a ton of feedback of things that didn't work and people were wanted it to be better along a bunch of dimensions and I think so this launch was a culmination of looking at and spending a ton of time with folks in the ecosystem who've been giving us all the feedback of what would they actually want this model to do in order to build a bunch of real production use cases and use it to support whatever their work is. So I think that's another angle of this. I think the last one is just this continued model train that we have which is there's all of this infrastructure that's being built in order to make it so that Google can ship models and bring them to the world and have them scale up on day one we are right now and all this other stuff. So I think the new capabilities of image generation I think benefits from this huge amount of momentum and inertia that's happening inside of Google to get this stuff out the door. So I think it helps and we see this on every other model benefits by how much momentum there is on the core model progress standpoint.
- [196:41]
John Coogan
I have two follow up questions. One is are you thinking about some sort of Pareto frontier? Do we need a benchmark for image generation that then we can comp to put on a beautiful X and Y axis so we can go viral here with cost to quality trade offs Because I haven't really seen that pop up. We're still in the age of just like there's like the state of the art's great and then everything else I wouldn't want to use and so people aren't really making those trade offs but you can imagine that as people start to implement this into business processes if I'm just like oh yeah, I'm just generating like an icon and you know like a previous generation model can basically one shot it because I'm not trying to do anything crazy. I want to be very cost conscious versus this super frontier. I'm going to be using this as you know, a poster in VFX and a Hollywood movie. It's got to be the best and whatever the cost is. Let's do that. Are you starting to think about a frontier Pareto frontier kind of emerging in image generation?
- [197:42]
Logan Kilpatrick
Yeah, I mean, we should collaborate on this because I feel like y' all will do a great job on it.
- [197:45]
John Coogan
So that's, that's maybe an action item, but I think one of the cool.
- [197:49]
Logan Kilpatrick
Takeaways for me on this launch is actually the, like, cost per image didn't change between 2.0 and 2.5.
- [197:56]
John Coogan
So if you see, I think we.
- [197:58]
Logan Kilpatrick
Released a graph of like the level of progress from 2.0 to 2.5. It was literally like almost like doubled in quality across, across certain dimensions. It's the same zero point. It's like the pricing is annoying. It's like 4 cents.
- [198:13]
John Coogan
Well, we're gonna have to switch to like cost per million images at some point because just like cost per million tokens, like we, if we tried to say cost per token, we'd be in like 0.00000.4 cents per image.4 cents per.
- [198:24]
Logan Kilpatrick
Image or $40 for a thousand images. That makes it. That makes it.
- [198:27]
John Coogan
There we go. Now. Now we're talking. Yeah. $40 for to do. Yeah.
- [198:30]
Logan Kilpatrick
I think it's just crazy though.
- [198:32]
John Coogan
There's.
- [198:32]
Logan Kilpatrick
There's so much that you could build that like you wouldn't have thought about building before at that price point. Like $40 is like not for 1,000 images, customized for whatever you want. It's like actually not that crazy.
- [198:42]
John Coogan
Totally.
- [198:43]
Jordy Hayes
Yeah. How. What's the reaction been from some of your guys, partners on the, on the API side in terms of this? I mean, I'm assuming they got early access and exposure to it because I see a lot of them are already rolling it out to millions of users.
- [198:57]
John Coogan
Yeah.
- [198:57]
Logan Kilpatrick
I think a great example of this and something that I'm super happy about is open route, which I'm sure y' all have covered some of this stuff. They have a bunch of like actually cool leaderboards that show like their leaderboards are all usage based.
- [199:08]
John Coogan
So it's like Alex on the show, the CEO, Alex.
- [199:11]
Logan Kilpatrick
Alex is awesome. He's great. He's an incredible founder and entrepreneur.
- [199:14]
Jordy Hayes
He joined the day that he raised like $100 million and didn't mention it at all.
- [199:20]
John Coogan
He's a super low key dude too. It's crazy.
- [199:24]
Logan Kilpatrick
Yeah, he's awesome. We are the first image model that OpenRouter has actually ever released. And I think there's like a bunch of philosophical reasons why? From a platform perspective. But I also think it speaks to the level of quality and the progress that's been made on these models that OpenRouter wanted to actually take the first step in and have a model that they felt is conversational enough for their customers to just embed it into a bunch of their existing workflows. So I think the reception has been super positive and we need to get a live segment and show some of the cool stuff that you all can do. There's literally so much. It's incredible to see what people are building already.
- [200:02]
John Coogan
I want to talk about naming version numbers and all of this. It's good for releases. It's good for showing that there's some sort of binary change that you should pay attention to and actually see the jumping capabilities at the same time. Eventually this stuff just diffuses into everyday workflows and Google has a bunch of products that don't really have version numbers. BigQuery just gets better. Google sheets. I mean, there might be some version numbers under the hood that I'm not aware of, but, like, for most people, they just open it up and, oh, there's a new feature today. Or maybe there's release notes. Are we close to entering that era? Are you going to miss the era of constant name change?
- [200:42]
Jordy Hayes
Banana emojis, hitting the timeline?
- [200:44]
John Coogan
There are benefits and there are costs. Like, there are high expectations when there's a new big number. But it also draws a lot of attention. It's a reason to talk because something happened as opposed to just BigQuery is growing and it's better and it's good and it just keeps getting better and it's less exciting. So how are you thinking about that in terms of messaging, all of Google's products here?
- [201:05]
Logan Kilpatrick
Yeah, I think this is a super fine mind to walk. I talk to lots of customers who have this feedback, which is like, there's so much exhaustion with the pace of releases and they're keeping up with, you know, something point one version update. And it's just like all this stuff to keep in your head.
- [201:22]
Jordy Hayes
You're just like, please stop making technological progress. Like, we've had enough.
- [201:27]
John Coogan
I don't think that's not what people. This is the challenges.
- [201:30]
Logan Kilpatrick
It's not. I don't think that's actually what people want. They just don't want to have to, like, stay on top of it. So I do think there's a point at which, like, this stops being the thing that everyone is talking about. And there is this, like, what's the. Like, there's a bunch of good sayings that I'm sure you both know better than me, which is around, like, the arc of technology and how it, like, transitions from actually being technology to just being, like, something that is a part of a product, like a car, we don't look at as this, like, science thing anymore. It's just this, like, object that we use to get around. And I think AI will sort of eventually go on that arc where it's just, like, diffused into everything that we're doing and we don't think about it.
- [202:05]
John Coogan
And it's.
- [202:07]
Logan Kilpatrick
It's part of every product experience and therefore you don't look into, like, all the nuanced details of the small version number. But I do love the. My takeaway is you need a good mascot. Like, I love the nano banana thing really took off. And I think if it wasn't something that was, like, easy to attach to, that had an emoji that, like all this other, like, there's all this, like, subtle, weird marketing lessons that you. I feel like I relearn every time something like this happens.
- [202:34]
Jordy Hayes
That's great.
- [202:35]
John Coogan
Talk about jailbreaking bug bounties. Is there some benefit to the flywheel of people trying to jailbreak stuff? It actually helps improve the models. There's some post out there, somebody figured out some jailbreak. The chat wants to know. But I've always thought that the nature of social media kind of encourages, like, if you can get the models to do something weird or funky or rude, then it goes viral very naturally. And of course there's like the negative, like, oh, this is bad, but it's actually pretty helpful. But how are you thinking about that side of the world, of getting these models out to the world? Yeah.
- [203:10]
Logan Kilpatrick
One of the things that we're always trying to, again, walk the fine line of is all the safety parameters. So I think I already saw a bunch of folks making comments around what are we over blocking on, what are we under blocking on? There's the global legislation on a bunch of this stuff is extremely complicated. So I have a bunch of empathy for the teams that have to, like, think about this more deeply than I do.
- [203:31]
John Coogan
But, like, it is.
- [203:32]
Logan Kilpatrick
It's actually not easy. There's a lot of open questions. Not easy to deploy.
- [203:37]
John Coogan
Super hard. Especially on. I was thinking about, like, the trademark infringement side because I was like, well, well, I want to be able to use my own trademarks. I want to be able to go and generate my own. My own defects of myself, but I don't necessarily want everyone else to be able to do that necessarily without something. So like it's.
- [203:52]
Jordy Hayes
Yeah, we've run, we've run into that trying to generate images of ourselves.
- [203:57]
John Coogan
Yeah. And it's a, oh no, you can't do this. And it's like you've kind of arrived but now you got to prove to the model. No, I'm John Coogan.
- [204:03]
Jordy Hayes
Yeah, I am, I really am.
- [204:06]
John Coogan
This is a very, I think this.
- [204:08]
Logan Kilpatrick
Is like a non trivial problem that like will end up getting needed to be solved. So I don't like, I don't think there's any good experiences to solve this right now. But you know, to the extreme of this is like the future of you. You orb scan your iris to like iv to the model that like you're really John. And then that's how this sort of, you unlock this capability.
- [204:28]
John Coogan
That's the extreme version. But yeah, yeah, I mean, yeah, there's a bunch of ways to make sure that the stuff works. But I mean also just like I feel like Google's been particularly good with releasing like the thinking behind the decision making in both like a blog post and a technical paper like Jeff, we covered Jeff Dean talking about the amount of energy and water used by various. That was crazy. And I just, I loved that because it was, it was written in a way that was accessible to the person that just wanted to see a viral post on X, the Everything app, which is kind of like, you know, it's a, it's a, it's a mud fight on there every day. And then, and then you also the blog post which was like a press person could show up there and there was also the technical paper. So if you're a scientist you could go in there and it wasn't phrased as like this counterweight to all the pieces that have come out saying it's really bad. It was just like here are the facts in three different tiers of complexity so you can kind of get the answers at whatever level you want. And I thought that was well handled anyway. Jordy, anything else?
- [205:29]
Jordy Hayes
Absolutely no. Congratulations on the launch. Always great to see you and have fun out there on the timeline.
- [205:35]
John Coogan
Have fun out there.
- [205:36]
Logan Kilpatrick
Let's go vibe code some stuff. I can't believe you think the timeline is a, is a mud fight. I'm like, people in your replies must be horrible. I feel like everyone's very kind in.
- [205:43]
John Coogan
My version of kind. But you're always just one, one quote tweet away from getting from war. From war. The timeline's in turmoil a lot. We monitor the situation every day and we see the timeline and turmoil non stop. Someone puts out a bad take, there's going to be a pile on there.
- [205:59]
Jordy Hayes
Always. Always.
- [205:59]
John Coogan
But it's a good content.
- [206:00]
Logan Kilpatrick
Good for business.
- [206:01]
John Coogan
It's good for business.
- [206:02]
Jordy Hayes
Sure is. Sure is. Great to see you, Logan.
- [206:04]
John Coogan
Thanks so much. We'll talk to you soon.
- [206:06]
Jordy Hayes
And, and on that note, you gotta hop on, gotta get on with London.
- [206:11]
John Coogan
One sec before. Oh, we have one more thing from producer.
- [206:14]
Jordy Hayes
We have a special guest.
- [206:15]
John Coogan
We have a special guest. Who is this? Okay, let's bring them in. Moments away. Let's bring them in. Okay. Who is this?
- [206:22]
Jordy Hayes
Who's this?
- [206:23]
John Coogan
This is a surprise. What's this? What is this?
- [206:25]
Jordy Hayes
What's this view?
- [206:27]
John Coogan
This is a joke or something? This is a prank.
- [206:29]
Jordy Hayes
Are you pranking us?
- [206:30]
John Coogan
I'm, I'm, I'm genuinely not prepared for whatever's gonna happen. Who's this?
- [206:36]
Jordy Hayes
Oh, wow. No way. What is this?
- [206:43]
John Coogan
Oh, thank you. Oh, we have a, we have a cake in the studio. That's so cute.
- [206:51]
Jordy Hayes
Bottle of dumb.
- [206:53]
John Coogan
Wow, that's amazing.
- [206:55]
Jordy Hayes
Thank you.
- [206:56]
John Coogan
Thank you. Thank you.
- [206:58]
Jordy Hayes
Welcome to the show.
- [207:00]
John Coogan
Amazing. Look at this.
- [207:03]
Jordy Hayes
You say into the microphone, you're watching tbpn. You're watching tbn. Amazing. Well, thank you, folks. Fun show today. Can you say, see you tomorrow, technology brothers say, see you. See you tomorrow, technology brothers. See you tomorrow, tech.
- [207:31]
John Coogan
There we go.
- [207:32]
Jordy Hayes
Yay. Awesome, folks, we will see you tomorrow.
- [207:36]
John Coogan
We'll see you tomorrow.
- [207:37]
Jordy Hayes
Thanks for tuning in.
- [207:38]
John Coogan
Thanks for tuning in. Goodbye.