Wednesday’s Diet TBPN

Summary

TBPN: Wednesday’s Diet TBPN – November 13, 2025

Hosts: John Coogan & Jordi Hays
Main Theme:
This episode zeroes in on the evolving dynamics of technology startups, viral marketing in tech, investor strategy, and the latest in AI infrastructure and products. The hosts dissect a controversial YC-backed AI code editor (Chad Ide), discuss the pitfalls of "rage bait" as a product strategy, dive into VC fund performance debates, and break down new developments from major tech companies like Microsoft and Tesla.

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Key Discussion Points & Insights

1. Chad Ide & the Rise of “Rage Bait” in Product Design

What happened:

• The crew reviews the viral launch video for Chad Ide (“Brainrot Code Editor”)—an AI coding tool featuring built-in gambling, TikTok, and dating app integrations.
• YC (Y Combinator) promoted Chad Ide, sparking criticism and debate about the tactic of getting attention through outrage (“rage baiting”).

Discussion highlights:

• [01:54] Ben: “I think the video is funny… and I’m sure the founders are smart. For a low budget launch video, I think they did well.”
• [02:06] Ben: “Chad is an AI code editor that allows you to gamble, watch TikTok, and use dating apps while you work on coding tasks… On one hand, it’s funny. On the other hand, what are we doing here and why does this belong on the official YC account?”
• The hosts break down “rage baiting” as a move from fringe marketing to now an actual product differentiator, questioning its long-term value for startups.

Notable quote:

• [04:08] Ben: “Rage baiting, whether at the marketing level or product level, is the most effective way to get people who could be potential investors, customers, or team members to actively prey on your downfall. … Rage baiting is for losers.”

2. Differentiating Marketing Stunts from Product Identity

• [05:04] Ali: “The most important thing in your piece that I liked was this idea that there is rage bait marketing—doing a stunt, doing something a little bit crazy—but then delivering a quality product is separate from making the product itself rage baity.”
• The group discusses how Clad Labs’ (not Chad Labs) actual product may be more than its viral persona, but with limited info available and a sign-up wall, skepticism remains.

Comparison to established companies:

• [06:21] Ali: “If it was April Fool and Michael Truell at Cursor or Scott Wu with Windsurf were like, ‘we’re doing a brain rot version of the IDE,’ everyone would be like, that’s hilarious. OK, now back to using Windsurf and Cursor, right?”

Tension for investors:

• [07:26] Ali: “If that 1% [of a fund’s investments] gets a thousand times more views than your enterprise SaaS portfolio, you’re going to be known as the Slop Fund.”

3. YC’s Institutional Reputation and Selection Pressure

• Low YC acceptance rates mean founders with serious products may feel crowded out by provocative, less substantive entries.
• [08:47] Ben: “If you’re a founder that applied with an idea that you think is world positive, and then you see them announcing this kind of stuff, those founders are going to be even more frustrated.”

4. The Next Generation: Virality or Substance?

• Discussion about young entrepreneurs (like 14-year-old Alby) going viral with impressive YC applications.
• [11:10] Ben: “My default reply to high schoolers hitting me up for VC funding is: Put me on the phone with your parents.”
• Concerns that new founders might interpret viral “rage bait” as a key to breakout success, instead of product quality.
• [11:51] Ben: “I just want to avoid a scenario where … the Shiravs of the world think they need to rage bait in order to break out in this industry. It’s not the reality. You can just build a great product.”

5. Venture Capital Fund Strategy Debate

Ev Randall on 20VC:

• Claims most large funds (A16Z, etc.) can’t realistically promise 5x net returns to LPs any longer due to size constraints and market conditions.
• [13:04] Ev Randall: “I don’t think…they can go to LPs … and say, ‘Hey, this basket of funds…we’re going to get you 5x net on that.’ … it like defies the laws of physics.”

Reactions:

• Humorous jabs from hosts (“10x it again! Raise a $100 billion fund and 10x it!” at [14:38] Ali) and a measured debate about whether the comment is truly controversial.
• Differentiation between “making tons of money” and delivering high fund-level returns.

[16:21] Ben: “Benchmark is feeling, feeling pretty good right now. If you look at their 2020 fund…they have a bunch of multi 10-baggers.”

Social media fallout:

• Tagging and subtweeting escalates drama in VC Twitter, which the hosts aim to avoid.

A16Z perspective:

• [18:02] Ben: “The major appeal of investing in a16z is that you pretty much know you’re going to get in every important company…Not necessarily always super early, but at some point.”

6. AI Data Centers: Microsoft, Fairwater 2, and the Race for Capacity

Dwarkesh & Dylan Patel interview Satya Nadella (CEO of Microsoft) about Fairwater 2, the largest AI data center:

[20:33] Jordy:

• Satya splits AI into two realms: cognitive tools (like Copilot/autocomplete) and “guardian angel” (AGI-like oversight).
• Microsoft’s hyperscaler status means multi-model support and a focus on high-margin users versus Oracle’s single-customer strategy.

Data center build-out discussion:

• Chips and rapid depreciation: Don’t overbuild with soon-to-be-obsolete tech.
• Microsoft keeps options open: Buy capacity from “neo-cloud” providers during supply crunches.

[24:43] Jordy:

• Satya discloses there’s a superintelligence lab within Microsoft, indicating ambitions to train their own large models, potentially competing with OpenAI at every stack layer.

7. Delight Bait vs. Rage Bait & Tech Product Reviews

Robotic companions:

• Brief discussion on a new expressive robot—hosts are intrigued and amused, seeing it as “delight bait” instead of rage bait.
• [26:01] Ali: “I have been delight baited. I have not been rage baited by this.”

Tesla FSD (Full Self-Driving) Hardware 4:

• Readout of Andrej Karpathy’s glowing review of Tesla’s latest hardware, with vastly improved self-driving compared to previous generations.

[27:45] Ben: “Glowing review of Tesla self-driving from the man who basically invented it and started the whole process.”

8. OpenAI Releases GPT-5.1

[27:58] Ben: Briefly notes that OpenAI launched GPT 5.1 (“ChatGPT is officially in its Fiji phase”), now rolling out.

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Notable Quotes & Moments

• [02:06] Ben: “Chad is an AI code editor that allows you to gamble, watch TikTok, and use dating apps while you work on coding tasks.”
• [04:08] Ben: “Rage baiting is for losers.”
• [07:26] Ali: “If that 1% gets a thousand times more views…you’re going to be known as the Slop Fund.”
• [11:51] Ben: “You can just build a great product...Let that speak for itself. You can find ways to market it along the way.”
• [13:04] Ev Randall: “I don’t think…they can go to LPs ... and say…we’re going to get you 5x net on that.”
• [16:21] Ben: “Benchmark...have a bunch of multi 10-baggers at this point in that fund. So they’re feeling pretty good…”
• [20:33] Jordy: “Satya as being very non AGI pilled and I think this was a bit of an update.”
• [24:53] Ben: “That’s why I’ve always felt like the dynamic between OpenAI and Microsoft is so interesting, because OpenAI just has massive ambitions in the enterprise… you can imagine them ultimately competing on every layer…”

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Important Segment Timestamps

• 00:46 – 04:57: Chad Ide “Brainrot” code editor discussion, rage bait and viral stunts
• 05:04 – 07:26: Differentiating marketing from core product; investor reputation impacts
• 07:26 – 09:02: Fund reputation, founder frustrations with YC’s choices
• 09:35 – 11:51: Advice for future founders & on being product-first not rage-first
• 13:04 – 16:21: VC fund performance analysis, returns, and LP expectations
• 20:02 – 25:21: Fairwater 2, Microsoft vs. OpenAI, AI infrastructure strategy
• 26:01 – 27:45: Expressive robots, Tesla FSD review
• 27:45–27:58: OpenAI’s GPT 5.1 announcement

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Summary

This episode of TBPN dives deep into how tech startups market and differentiate in an “attention economy,” highlighting the dangers of rage as a product feature. The hosts explore ramifications for investors, discuss generational shifts in founder mentality, break down VC performance squabbles, and analyze current affairs in AI model infrastructure and robotics. The tone is critical yet humorous, with the hosts consistently questioning hype over substance while acknowledging the ever-evolving game of tech entrepreneurship and investment.

Transcript

[Ali]

What's going on over there, shorty? You got caught? Lacking.

[Ben]

I was publishing an essay.

[Ali]

You were publishing an essay? It's live on X now. You can go listen to it. You can also [e-mail] our substack will email you every morning with the tbpn newsletter. And, you know, 500 words from me or Jordi. It's a lot of fun. Go check it out. The thing that got Jordi to learn to type was this video, this launch video. You were like, I gotta write an essay. I gotta learn. I gotta lock in. I gotta learn how to write because I gotta respond. This is. This is. It's. It's enraged me. Were you enraged?

[Ben]

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

[Ali]

Okay, but they were trying to enrage you and they were fading.

[Ben]

They were baiting me.

[Ali]

Made you angry. I'd love to watch the Chad Ide BrainRock Code Editor video first. I want to see. I want to see the video for myself. Let's play it. Okay, so he's got some Newport cigarettes. He's packing, pulls out a cigarette with the Stanford, lights it up. He's got the cut off Stanford cut offs. What is this music that's playing? He's got the. The guitar in the background. And what is he playing? Some sort of.

[Ben]

This is steak.

[Ali]

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

[Ben]

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

[Ali]

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

[Jordy]

Clash Royale.

[Ali]

This is Clash Royale. Okay.

[Ben]

Have you played?

[Jordy]

I have played in middle school. Yeah.

[Ben]

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

[Ali]

Okay.

[Ben]

And I'm sure the founders are smart for a low budget launch video. I think they did well. They broke through.

[Ali]

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

[Ben]

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

[Ali]

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

[Ben]

It ends up, it ends up, it ends up impacting the brands of the firms that fund these ideas.

[Ali]

Of course, the most important thing in your piece that I liked was this idea that there is Rage bait marketing. Doing a stunt, doing something a little bit crazy, but then delivering a quality product is separate from making the product itself rage baity. And so I think a lot of people, when they saw this video they wanted, they were wondering, what does the product actually do? Because all you've told me is that you created an April Fool's joke and Google's been doing April Fool's jokes for years. The question for me and the question I had for Tyler was, what's actually under the hood at Chad Ide? The company is not called Chad Ide, it's called Clad Labs. The steel man here is that, hey Ide are boring. You gotta do something funny, film a funny video, create a fake product, but then have something under the hood that is actually real, that does actually advance the conversation and is maybe something that a real product.

[Ben]

Tyler try to sign up. That might need a code. I think this would have been a brilliant kind of like stunt if they did it as a stunt and it wasn't core to the brand that they're building. It wasn't core to the product.

[Ali]

If it was April fool and Michael Truell at Cursor or Scott Wu with Windsurf, we're like, we're doing a brain rod version of the Ide. Everyone would be like, that's hilarious. Okay, now back to using Windsurf and Cursor, right?

[Jordy]

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

[Ali]

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

[Jordy]

When you go to the download page, there's options, like, which brain rot do you want?

[Ali]

Yes.

[Jordy]

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

[Ali]

Okay.

[Jordy]

There's obviously a product here. This is a marketing stunt. I believe that.

[Ali]

Okay. Met a very successful founder who said, I chose Fund Blank because they gave me credibility when I needed it. Now the fund backs everything, including the dumbest ideas I've ever seen. I don't think the next wave of founders will pick them. The credibility they had is gone. And I was thinking about how AUM Weighted Brain Rot or AUM Weighted Slop is not an excuse for slop and controversial investments. If you put 1% of your fund into something that is just going to go all over the Internet and be like, we are the most degenerate, we're the craziest, we're the most insane, we're the most fraudulent, like, in your face company. Even if it's only 1% of your fund, you're not going to be able to like, no, no, no. 99% of my investments are just like, you know, trying to cure cancer genuinely. Or like, actually trying to improve developer productivity. Or like, 99% of my investments are just reasonable down the fairway, like good businesses. I took a flyer. 1% is a little bit crazy. Well, if that 1% gets a thousand times more views than your enterprise SaaS portfolio, like, you're going to be known as the Slop Fund. So, like, you need to be careful about that.

[Ben]

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

[Ali]

Oh, yeah.

[Ben]

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

[Ali]

Yeah.

[Ben]

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

[Jordy]

Say that I have some new way to do, you know, agents in my editor.

[Ali]

Yes.

[Jordy]

And it's like, it's actually works way better than Cursor. It's way better than Windsurf. It's better than everything else. And I apply to YC with this thing. Okay. There's like, probably what, like, 10 other YC companies that are like little YC companies in the same batch doing similar, you know, coding editor stuff. How do I differentiate myself? I feel like this is, like, fairly reasonable. Okay. We get some users that think it's, like, funny to gamble in their ide, and then they realize, like, oh, this is actually a pretty useful feature. Jordy, if you were in YC and you had a coding editor company, how do you, like, recommend? Like, instead of doing stuff like this, how do you. How do they differentiate back to what.

[Ben]

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

[Jordy]

I don't think we know for sure that they're not doing that.

[Ali]

Like, there is no real product here. And that's the. And that's what Jordy's risk is, is that they haven't built anything behind the scenes. It's all marketing. It's all stunt. The product you're making is to help people gamble. And gambling is bad. And so if you are anti gambling, you are anti this product that they built. And they. And they. Now they have the opportunity to say, no, no, no. Like the. Here's the real thing. And they haven't done that yet. It would have been so easy if at that end of that video been like, that's what people feel like Gen Z entrepreneurs built. Yeah, but we didn't want to do that. So we actually built this.

[Ben]

Go download this video.

[Jordy]

But I'm not going to. I want to try the. I don't want to gamble, but I want to see it actually, like, in the IDE. That's like, funny.

[Ben]

Tips to apply at YC batch winter 2026. And I think. I think Sharav isn't. Isn't this literal. Is a literal child tips.

[Alby]

First tip, you should have some clear, cool secret, like, what you should do after funding. And you should have at least.

[Ali]

I can barely hear this, but.

[Ben]

Okay, we can pause it.

[Jordy]

But the reason.

[Ben]

The reason I included this is because I think there's a lot of people like Sharav and tons of young people that look to YC as whatever YC is promoting, they approve. And so I just. I want to avoid a scenario where the Shiravs of the world think that they need to rate rage bait in order to break out in this industry. It's not the reality. You can just build a great product you can get. Let that speak for itself. You can find ways to market it along the way. Alby, who is a 14 year old applying for YC went extremely viral earlier this week. Got 3.6 million views.

[Ali]

Wow.

[Ben]

14 year old founder.

[Alby]

I'm Alby, I'm 14 and I'm based in Sydney, Australia. I've been building things good editing since I was 6 or 7.

[Ben]

Bruh.

[Alby]

Don't get the joke.

[Ali]

Really good editing.

[Alby]

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

[Ben]

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

[Ali]

You're supposed to just turn on the webcam and basically just talk for one minute. That's how you apply to yc.

[Ben]

One shot it.

[Ali]

Yeah, you're supposed to just one shot it. No editing because they don't want it to turn into oh to apply to yc you spend two weeks doing an edited video. They're like no work on your and then the marketing is like the last little cherry on top. Like that's always been the YC mantra and that's a little bit of like this Cloud Labs thing. Although the weird thing is like the video. I love the video. It's funny and it's cheap and it's clearly just like a bit. And they did it and it was two seconds. But then it feels like they didn't. They didn't give me the payoff of like, oh okay, you guys are funny and you're working on something cool and interesting and hard. Ev Randall, who's coming on the show on Friday, went on Harry Stebbing show 20 VC is putting the timeline in turmoil over some comments about other funds.

[Ev Randall]

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

[Ali]

Boo. He's not AGI pilled.

[Ben]

Boo.

[Ali]

10X. You're going to 10x the fund. Just 10x it again. Just 10x it again. 10x the fund raise. All within raise $100 billion fund. And 10 exit. Just 10 exit and we're going to 10 exit again. No, obviously that was on a little.

[Ben]

Bit of damage control.

[Ali]

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

[Ev Randall]

I don't think rather Hamont or even Ben and Mark at this Point. I don't think that they can go to LPs. One of those legs of the stool said, I don't say, hey, this basket of funds that we're making you invest, party, pursuit across, we're going to get you 5x net on that.

[Jordy]

We're going to get you.

[Ev Randall]

I don't think they can say that.

[Ali]

Yeah, because maybe they can go with a straight face and say, we're going to get you 6x net.

[Ben]

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

[Ali]

I think the broader point that he's making is something along the lines of I saw some other post about there will be fortunes made just by getting retail investors and the broader capital that's out there in the world into the private mag 7, the OpenAI's, the anthropics, the SpaceX is the andurils. There's a whole host of companies. There is a world where you set up a fund that has lower return expectations but also lower risk and it's a great deal and LPs love it. I don't know that it's that hot of a take, but it's certainly, certainly put the timeline in turmoil.

[Ben]

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

[Ali]

To be clear, I slash, we love working with our friends at all of these funds and this part was not meant as a slight slash commentary on the quality, on their quality as investors. Just POV on fund strategies and the unique prop of Benchmark. I think it's, I think it's a fair, fair tweet, but it's amazing because everyone is coming out and just trash.

[Ben]

Part of what made it feel super personal is that Harry tagged Ravi.

[Ali]

Totally, totally.

[Ben]

And Ben.

[Ali]

Yeah, we actively try to avoid like tagging people if someone is talking trash about someone else or like subtweeting them. We don't really try and like hand hold into drama since my former colleagues at A16Z RIAs and thus cannot legally comment on what they can cannot say with A straight face to LPs. This sounds a lot like what crappy board members say when as an outside observer, they have zero clue what actually happens day to day in the business. EV thinks he understands Andreessen's business, but in fact he does not understand Andreessen's business. But I want to know like, what is the misunderstanding? Because the steel man, the bull case on the Andreessen strategy is that EV is. EV is making the claim that they will make more money dol total dollars because they're investing out of a bigger fund size. They don't need to go and say we're going to five exit. So it's a different pool of LPs.

[Ben]

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

[Ali]

What does Ev say? He says, I think smaller constrained funds can produce higher returns in venture quote. This must be a shitty board member. Don't work with him. Incredible non sequitur. Thanks, Scott.

[Ben]

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

[Ali]

Oh yeah.

[Ben]

For my. For my post, which I think is fair. But again, there's more nuance.

[Ali]

During the Cluley heyday, I would imagine that 80% of the team's hours were spent on marketing and 20% were spent on. On product. Maybe now I think it's flipped and I think that's very bullish. I think that's good. But Tyler, you had a rebuttal.

[Jordy]

This seems very different from like, you see the gambling on your credit card statements or whatever. Like from other accelerators. Like this feels very different. Like this is like the marketing. Like I think people kind of tend to group all of this stuff together where it's like. Like what Grand Daniel was talking about yesterday. Where it's like some of these are like immoral companies that you could say, sure, I think this feels different than that.

[Ali]

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

[Jordy]

Yeah, then that's not good.

[Ali]

Dwarkesh Patel, Dylan Patel sat down with Satya Nadella and they got an exclusive tour of Fairwater 2, the most, the most powerful AI data center in the world.

[Jordy]

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

[Ali]

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

[Jordy]

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

[Ben]

Prioritizing one potentially low margin.

[Jordy]

Yeah, exactly. You're Giving bare metal essentially to one customer. OpenAI, all the big hyperscalers have their own chip play, right? There's Trainium, there's TPU's. OpenAI is doing their own chip and Microsoft does have their own chip. The actual production is like way behind everyone else. And then Satya basically brings up that like Microsoft has IP to everything OpenAI has except for consumer hardware.

[Ben]

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

[Ali]

Interesting.

[Jordy]

The chip question is also very important because you can think of it like if you build a bunch of data centers right now, they have very specific power requirements that are directly based on the chip. Like if you're building based off the H100 chip, that's different than if you're building a data center based off GB2 hundreds. And it's like you can't really, it's not like fungible. Like you can't just trade one out for another. So that's another one of the reasons why you don't want to basically have insane build out right now. Because you think, you don't think, you know that chips are going to get.

[Ali]

Much better, especially with like Asics, right?

[Jordy]

Yeah, exactly. Nvidia is like constantly, they're saying we got this next chip coming out.

[Ali]

Yep, yep, yep.

[Jordy]

You want to build up your data center with those chips because otherwise they're going to depreciate and you're going to have these basically data centers in like five years that like are using, you know, the old gen chips or two generations back.

[Ben]

Yeah, anything on depreciation.

[Jordy]

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

[Ali]

Yeah, makes sense.

[Jordy]

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

[Ali]

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

[Jordy]

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

[Ben]

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

[Ali]

It's going to be AI native.

[Ben]

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

[Ali]

Have you ever done illegal drugs? Tyler, Answer the question. No, answer the question.

[Ben]

Good answer.

[Ali]

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

[Jordy]

I'm my favorite host.

[Ali]

Taking shots. An emotional and expressive robot to reshape our attachment to technology. Is this a CGI vibreal or is this a real product?

[Jordy]

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

[Ali]

Sure.

[Jordy]

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

[Ali]

Wow. Okay. This is very cool. I have been delight baited. I have not been rage baited by this Brigetti. What an opportunity. Kaching buy IBM.

[Ben]

What does that even mean?

[Ali]

Kramer posts like a crazy amount. I mean he's got 2.3 million followers. He's posting like every half hour. That's our show for today.

[Ben]

I don't tolerate Kramer slander.

[Ali]

Yeah, no, no, I think he, he's, he's entertaining. He's insightful. He's controversial. He's a total package. We love Kramer here. I took delivery of a Beautiful shiny new HW4 Tesla Model X today. I like this hardware 4. He cares about the chip inside that thing. He doesn't care about what bar on the front is or the door handles or whether the doors go up. Andrej Karpathy cares about the GPU inside, so I immediately took it out for an FSD test drive. A bit like I used to do almost daily for five years. Basically, I'm amazed. It drives really, really well. Really smooth, confident. Noticeably better than what I'm used to On HW3, my previous car and Elon's Aons and Eons ahead of the version. I remember driving up Highway 280 on my first day at Tesla nine years ago where I had to intervene every time the road mildly curved or slop on city streets. The car casually handled a number of tricky scenarios that I remember losing sleep over just a few years ago. It negotiated incoming cars in tight lanes. It gracefully went around construction and temporary in lane stationary cars. It correctly timed tricky left turns with incoming traffic from both sides. It's a glowing review. Glowing review of Tesla self driving from the man who basically invented it and started the whole process.

[Ben]

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

[Ali]

Podcast and Spotify. Subscribe to emailbpn.com and we'll see you tomorrow. Goodbye.