Sending datacenters into orbit | E2203

Summary

Podcast Summary: This Week in Startups | Sending Datacenters into Orbit | E2203

Date: November 3, 2025
Host: Jason Calacanis
Guests/Co-hosts: Alex, Lon Harris

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Overview

In this episode, Jason Calacanis and co-hosts dig into several pressing topics in tech and startups, including OpenAI's jaw-dropping infrastructure commitments, the economics and legal risks around large language models (LLMs), and the business of putting data centers in orbit (highlighting Star Cloud’s historic satellite launch). They also explore the explosion of legal AI startups, market reactions to potential failures in AI, and wrap up with founder advice and a fun detour into the Warner Brothers sale saga.

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Key Discussion Points & Insights

1. OpenAI's Revenue, Multi-Billion Dollar Commitments, and Industry Contagion Risk

• OpenAI's Financial Commitments:
  Sam Altman clapped back at venture capitalist Brad Gerstner’s concerns over OpenAI’s revenue vs. its $1.4 trillion in compute commitments, insisting revenue is rising fast and that there is plenty of appetite for OpenAI shares.
  • Quote (Sam Altman, 06:01): “First of all, we're doing well, more revenue than that. Second of all, Brad, if you want to sell your shares, I'll find you a buyer… There are not many times that I want to be a public company, but one of the rare times it's appealing is when those people are writing these ridiculous 'OpenAI is about to go out of business'... I would love to tell them they could just short the stock and I would love to see them get burned on that.”
• Valid Concerns:
  Jason walks through the math on commitments vs. potential revenue, worrying about what happens if OpenAI's growth slows or if contracts are more flexible than advertised.
  • Quote (Jason, 08:24): “If this revenue went from 18 to 36 to 72 and it just kept doubling like in a couple years they're making 100 billion, but they're spending 140 billion, they're losing 40 billion a year. That means the IPO cash, the 60 billion would get eaten up in but two years.”
• Hidden Risks:
  Alex notes that compute assets like GPUs depreciate quickly and OpenAI can't just delay payments forever. Plus, OpenAI just announced a $38 billion AWS deal.
• Market Contagion:
  Jason and Alex explore what would happen to the tech sector if OpenAI failed—the “AI Black Monday” scenario—potentially crashing stocks of Nvidia, Oracle, Microsoft, Amazon, and others.
  • (Jason, 14:58): “If ChatGPT fails, you could have like a serious contagion… Nvidia would lose hundreds of millions in revenue. Oracle hundred mils in revenue. Looks like Microsoft would lose hundreds of millions in revenue.”

2. Competitive Threats and Market Dynamics

• Crowded LLM Space:
  Jason outlines how ChatGPT’s market share is already declining (from 100% to around 80–85%), facing increasing competition from Anthropic's Claude, Google Gemini, Apple partnerships, etc.
  • Quote (Jason, 18:20): “What if they go down to 50% or 30% eventually and there's five major players? Then that could also mean that they can't reach that $1.4 trillion commitment.”
• Technological and Deflationary Risks:
  LLMs are getting cheaper (open-source and new compression methods), potentially collapsing margins and making trillion-dollar valuations unsustainable.
  • (Jason, 19:30): “Margin compression could also cause a downdraft. I think that’s a 50% chance happening.”

3. OpenAI, Legal, and Medical Advice: Shifting Terms of Service

• Policy Changes and Liability:
  OpenAI now restricts ChatGPT from providing tailored legal or medical advice without licensed professional oversight—mainly as a CYA (cover your ass) move. The bot will still provide information.
  • (Alex, 24:44): “Now ChatGPT will effectively offer information on medical and legal questions, but it will not offer advice to you.”
• Studies Favor LLMs for Empathy, Accuracy:
  Research from Johns Hopkins and Harvard shows LLMs outperform human doctors on quality and empathy in some cases.
  • (Jason, 27:07): “I would take the 3 LLMs over three doctors… that sounds crazy, I know, but I think for almost every case I would do that.”
• Legal Risks and Mental Health:
  Lawsuits have materialized after users hurt themselves following advice from language models (e.g., the death of Adam Rain).
  • (Jason, 29:29): “According to the lawsuit… ChatGPT actively helped Adam explore suicide methods. Wow.”

4. Star Cloud Sends Datacenters into Orbit

• Historic Satellite Launch:
  Star Cloud (formerly Lumen Orbit) has put the first Nvidia H100 GPU into space, a massive step for in-orbit compute. The company plans to scale up with a 100x beefier satellite next.
  • (Alex, 39:43): “This is a 1 kilowatt, so not very powerful, 50 kilogram satellite that I believe has a single H100 on it. In like two years, they've gone from founding to actually having a GPU in space that works.”
• Technical Details:
  The team discusses how satellites communicate (radio vs. laser), the huge impact SpaceX has had on reducing launch costs, and wider applications—from in-orbit compute to asteroid mining.
  • (Jason, 44:52): “People want to have Starlink… I think there’ll be a billion people who are paying for Starlink eventually.”

5. Trust-MRR and Building in Public: The Double-Edged Sword

• Transparent Revenue Reporting:
  TrustMRR.com lets startups connect their Stripe and publicly show real-time revenue. Jason and Alex debate the risk: While it brings VC attention, it also makes it easier for competitors to clone ideas.
  • (Jason, 35:56): “You are educating people and it's a very competitive world... You have rule-breakers who are known to build fast, who have some money in their pocket... Sometimes giving a revenue milestone can get you a little bit of press, but you are inspiring people to create a version of your software.”

6. Legal AI Startups Boom

• Massive Funding and Adoption:
  AI startups focused on legal tech (Lagora, Eve, Nexle, Spellbook, Harvey) are in huge demand with hundreds of millions raised within weeks.
  • (Alex, 54:01): “What we're seeing here is a really impressive locus of market adoption and demand for generative AI products in a new industry... I was just blown away by the amount of capital going into Eve, Nexle, Spellbook, Harvey, even up and Lagora in the last like 30 days.”
• Why it Works:
  Legal research, document drafting, and review are perfect for LLMs—provided errors and hallucinations are controlled.
  • (Jason, 56:49): “If you get sued… you have to process binders, folders of signed documents, and summarize them and read them… Research, drafting and reviewing. Those things are just so custom made for an LLM. Now, the problem is you can't make mistakes.”

7. Warner Brothers Sell-Off: IP Wars and M&A Speculation

• Who Will Buy Warner Brothers?
  Lon Harris discusses Paramount/Skydance’s failed offers, Netflix sniffing around for IP (not cable), and why Apple or Amazon might be the best fit.
  • (Lon, 58:20): “So now Netflix has hired an investment bank and is circling Warner Brothers… their interest is entirely 100% IP. So Warner Brothers owns, I'll give you a brief list… DC Comics, all of the HBO shows, Harry Potter, Barbie…”
• Jason's Take:
  Netflix should consider acquiring CNN for global leverage, though political risk could be a deterrent.

8. Government Shutdown and Prediction Markets

• Tracking Real-World Events:
  The team checks PolyMarket odds on the ongoing U.S. government shutdown and New York mayoral race, underscoring how decentralized prediction markets can offer accurate, crowd-sourced insights.
  • (Jason, 49:44): “Government shutdown… November 16th plus is 54%. And as you can see, there was a ton of volume… you can see view resolved. So what you can see here is that if you had been betting on this and wagering… you could have bet before 15th, before October… this is like continues to resolve itself.”

9. Founders' Corner: Burn Rate & Investor Updates

• How to Track Runway and Burn Rate:
  Jason advises founders to use accounting firms or simple internal processes:
  • Take last 3 months’ average burn = monthly loss, divide cash in bank by that number for "months of runway."
• Best Practices for Updates:
  Monthly or quarterly investor updates with relevant KPIs, narrative, and specific asks (“brown M&Ms in the rider”) build trust and ensure ongoing support.

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Notable Quotes & Memorable Moments

• Sam Altman pushes back:
  “Brad, if you want to sell your shares, I’ll find you a buyer.” (06:01, Sam Altman)
• Valuation Caution:
  “If they’re making 100 billion, but spending 140 billion, they’re losing 40 billion a year. That means the IPO cash… gets eaten up in two years.” (08:24, Jason)
• LLM vs. Human Doctor:
  “I’d take 3 LLMs… That sounds crazy… but for almost every case I would do that.” (27:07, Jason)
• Market Contagion Risk:
  “In the case of a ChatGPT failure… it would be a Black Monday—20% drawdown in these stocks, 30% drawdown; it could crash the AI boom.” (14:58, Jason)
• The risks of building in public:
  “You’re educating people and inspiring them to create a version of your software and charge half as much.” (35:56, Jason)
• On the Star Cloud In-Orbit GPU:
  “In like two years, they’ve gone from founding to actually having a GPU in space that works.” (39:43, Alex)

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Timestamps for Important Segments

• OpenAI’s Revenue & Commitments: 04:54–16:51
• Market Contagion & Competition Risks: 14:58–22:35
• OpenAI Legal/Medical Advice Policy: 23:55–31:56
• Star Cloud Sends GPU into Orbit: 38:34–44:52
• Legal AI Startup Boom: 54:27–58:00
• Warner Bros. M&A Speculation: 58:02–66:13
• Government Shutdown & Prediction Markets: 47:13–52:49
• Founder Advice: Burn Rate & Updates: 71:01–77:43

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Conclusion

This wide-ranging episode serves as an honest assessment of the stakes and headwinds facing dominant players in AI, the current startup fundraising climate (particularly for AI in legal tech), and celebrates the new frontier of in-space computation. Jason and guests blend big-picture financial scrutiny, news analysis, practical founder advice, and a touch of media industry gossip—perfect for listeners trying to keep ahead in the fast-evolving world of startups and tech.

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For more info, check out the full episode for the nuances and asides that only Jason and his crew can deliver.

Transcript

[Jason]

If you told me your health is at risk. Here's your choices. This one doctor is going to give you. These three doctors are going to give you their best advice. Or you can pick these three LLMs and you can feed the information. Same information you can give to these three doctors or these three alarms. I'm taking the three lms. That sounds crazy, I know, but I think for almost every case I would do that. What would you do, Alex?

[Alex]

I would take. Talk to the physicians because I have a great number of them in my geographically local family here and I hear about what people bring to them from LLMs and what kind of advice they're getting. Not just ChatGPT, but the whole gamut. And I don't think that the app. Jason, the average person's not very smart, so they're not doing great research here. They're not.

[Jason]

No, I'm saying for you. For you, though, I.

[Alex]

Even with all that. No.

[Jason]

Okay.

[Lon]

Yeah.

[Jason]

And do you think in the coming years it would change?

[Alex]

Oh, five years from now?

[Jason]

Oh, God.

[Alex]

I mean, I'm either gonna be in a flying zooks or I'm gonna be digging in the ground with sticks. So I'll take the LLMs in five years. Yeah.

[Jason]

Yeah. So I think it's. Then it's just a matter of time. We're in agreement.

[Alex]

Oh, I think most, most AI questions is just your time horizon, you know, like.

[Jason]

So you know what this sounds like to me? It sounds to me like people with credentials are going to start suing the LLMs for giving advice without a license.

[Alex]

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[Jason]

All right, everybody, welcome back to this week in startups. Yes, we're back. It's November 3rd. Here we go. Not only is the summer over, but the fall is ending and we will soon be in full on winter. But before then, I am in Saudi Arabia. I'm in the Kingdom. I'm in Riyadh. We had our first day of Founder University today and it went spectacularly. For those who don't know, Founder University is a program I've done 11 cohorts of in the United States. It is a pre accelerator. It's where teams of two or three founders get together and, and build an mvp, a prototype. They could be incorporated, they may not be incorporated. And then we help turn your startup idea into a reality. We accepted 350 people to the latest cohort in America. That was too many, so we're going to bring it down to 250 in the next cohort. But we decided to do it with our friends at Sonobal, which is the venture arm of the pif, which is the sovereign wealth fund of the Kingdom of Saudi Arabia. And if you go to Mena Launch co, you will see our website there. And after a couple of days here in Riyadh, Alex, I will go to Dubai and then I will say goodbye to Dubai and I will get on a plane to Tokyo. And then in Tokyo I will announce that Founder University in partnership with Jetron, the Japanese enterprise economic trade organization, that we will be bringing Founder University. I'm just going there to announce it. We'll be coming to Japan in January and we'll be opening up applications for founders in Japan to start companies and join our cohort there. So we'll be doing cohorts every year in America, Saudi Arabia and Japan. The business class and the first class cabins now on these airlines. I took American Airlines and British Airways Ways combo from Austin to Dallas to London to Riyadh. So it's three flights, but man, this, these nice planes are unbelievable. In business class now and I was traveling with my friend who is one of these, you know, really considered Austin biohacker type folks. And I slept, I took some supplements, went right to bed, eye mask, sound dampening, earplugs, all that kind of stuff. Slept like a baby, then stayed awake and then did the same thing. And so that's why, you know, I'm doing the show here. You'd be like, oh, take a day off from the show. But it's 8pm here. I'm actually trying to stay up till 1011 so that I can reset.

[Alex]

Yeah, you actually don't sound like. I kind of. I kind of like, no offense, but I've had jet like before too. I kind of thought I was gonna like extra caffeinate and kind of run things today while you limped along like a good sport, but you actually seem 100% there. All right, speaking about people who might not be getting enough sleep and are a little bit cranky. I think Sam Altman kind of blew up the Internet recently by shooting back at one of your friends, Jason, over at the BG2 podcast. We don't usually like podcast about someone else's podcast, but in this case, Sam Altman kind of cut loose, let's say, telling Brad Gerstner kind of to be quiet about concerns about OpenAI's revenue versus its infra spin. Jason, Brad Gerstner says, hey, you know, your revenues are about $13 billion this year, Sam. You have $1.4 trillion in compute commits over the next four or five years. You know, 500 billion to Nvidia, 300 million to AMD and Oracle. So how are you going to pay for all that? And that is when Sam kind of unloaded. So here's his response to Brad's question.

[Jason]

And you've heard the criticism, Sam.

[Sam Altman]

First of all, we're doing well, more revenue than that. Second of all, Brad, if you want to sell your shares, I'll find you a buyer. I just enough like, you know, people are, I think there's a lot of people who would love to buy OpenAI shares. I don't, I don't think you.

[Jason]

Including myself.

[Sam Altman]

Including myself who talk with a lot of like, breathless concern about our compute stuff or whatever that would be thrilled to buy shares. So I think we, we could sell, you know, your shares or anybody else's to some of the people who are making the most noise on Twitter, whatever about this very quickly. We do plan for revenue to grow steeply. Revenue is growing steeply. We are taking a forward bet that it's going to continue to grow and that not only will ChatGPT keep growing, but we will be able to become one of the important AI clouds, that our consumer device business will be a significant and important thing. That AI that can automate science will create huge value. So, you know, there are not many times that I want to be a public company, but one of the rare times it's appealing is when those people are writing these ridiculous OpenAI is about to go out of business. And, you know, whatever, I would love to tell them they could just short the stock and I would love to see them get burned on that.

[Alex]

I think that's a great place to end. Jason.

[Jason]

Sure. Yeah.

[Alex]

People were a little surprised at his kind of f off response to Brad. I'm curious what your first thoughts were. And with some more time, what did you come up with?

[Jason]

Yeah, I'd say two things. Number one, he's obviously being a little jokey. And I know Sam personally for a long time, like 20 years, I guess, that we've known each other. So I think he's being a little cheeky there. I don't think he crashed out. Like, full on crashed out, freaked out. I think he was kind of pushing back a little bit. And listen on the all in podcast here, other podcasts, it's known for being a little bit more of full combat, right?

[Alex]

Yeah.

[Jason]

And I probably have a part in that, obviously. So I think he's being a little bit combative because that's what podcasting is in 2025. And he could also be just like, I'm on the road right now. A guy's been on the road making a bunch of deals. He could be tired. He could be tired of answering that question and just say, listen, if you don't believe in us, sell the stock. Which is a completely valid thing to say. And his other point, which is completely valid, is if you. When we're public, this will be easier for everybody to understand. Now, let's take the other side of it.

[Alex]

Okay.

[Jason]

There is a really big issue he does have. They've been saying they have $1.4 billion in commitments, right. Truly hundreds of billions of dollars. They've got a company that last we know, was making 13 billion. He said it's a lot more than that. So I would say a lot means, I don't know, 3, 4, or 5 billion more. So let's say maybe he's got 18 billion in revenue right now. Maybe that's his run rate. You know, a billion and five a month is incredible. Right? So this is a lot of money. A billion five a month.

[Alex]

It's $50 million a day, right?

[Jason]

Right. Yeah. 30 billion a day. 50 billion. This is a lot of money this thing's printing off here. So it is, however, very valid to say if they're losing 10 billion a year, and I think that's the number, 8, 9, 10 billion is what people say they're short every year. Okay. So you start to put these numbers together. There was a rumor that they would raise 60 billion in an IPO.

[Alex]

Yep.

[Jason]

And if they're deploying 1.4 billion in five years, 300 billion a year. He said four in this clip, Brad. But maybe it's five years. Who knows? Four or five years is deployed over. We're talking about 3, 400 billion deployed a year. Well, that's a lot of money. And even if it was deployed over 10 years, it would be 140 billion a year if it was deployed over 10 years. Let's say the numbers are totally incorrect by a magnitude and it's like or double then if they're making and they got to 100 billion, if this revenue went from 18 to 36 to 72 and it just kept doubling like in a couple years they're making 100 billion, but they're spending 140 billion, they're losing 40 billion a year. That means the IPO cash, the 60 billion would get eaten up in but two years. And in this model we get eaten up in six months if it was in fact going over four or five years. So this is important math. What we don't know and we actually had this conversation, you're like, yeah, we can't find this information and if we're wrong and you can find this information, by all means tell us in the chat rooms how guaranteed are these contracts and we will probably find out what conditions there are on these contracts, what milestones, what outs there are. You can typically cancel or change or defer a contract at different times. So let's say they did buy 300 billion in compute from Oracle. Is that the number 3, 300 or 400 billion from 300, 300 from Oracle. Let's say that contract says it's up to 300 billion and it's intended to be deployed in six years, 50 billion a year, but the buyer can reasonably extend that in six month increments ten times, in other words for another five years. You know there it's not uncommon for those kind of things to be in contracts. So maybe they're on the hook for the whole 350 billion. Maybe they're on the hook for a the first hundred and they can cancel the last 200. Maybe they can cancel by a certain date. All of those kind of conditions haven't come out. Squarespace has been a friend and partner of this week in startups for over a decade and it's because they are one of my favorite startups of all time. You know Squarespace, the all in one platform that's going to help you make a beautiful website to help establish your brand online and scale your business with you as you grow. Doesn't matter if you're selling content or a course, but what if you want something super customized? Well, you can use their AI powered blueprint feature that works right alongside you as a creative partner. You tell it what vibes you're going for, what the aesthetic is and it makes something totally beautiful and personalized. To you and your business. And new features keep coming from our friends at Squarespace. You remember they did SEO, you know, they've been doing that for a decade now. They're doing it for AI. Yes, AI search people are starting with AI and then you see all those citations. They lead to Squarespace websites because they do AI search optimization. Go to squarespace.com twist to get 10% off your first website or domain purchase. So maybe the 1.4 billion in. In all these just mind boggling commitments that have been made are not guaranteed. And maybe the fault that we have here is that we're all thinking they're guaranteed. The people who are making the money on the other side are indicating to the markets it's guaranteed, which makes their stock go up, which is another can of worms. And they are probably going to report in the next quarter or two because these all occurred in the last three to six months. They're probably going to report soon what the details of those contracts are, where maybe analysts will start asking them. And when they do, maybe it turns out the 1.4 billion in commitments is only owes 10% of that or 20% of that actual number.

[Alex]

Yeah, I don't think that number is going to sink the company because much like you, I think it's a little bit flexible. The only thing I'll say is you can only extend certain deals so long in terms of repayment periods, Jason, because if you buy the GPUs, they begin to depreciate not only if you're using them, but also if you're not, because new technology is coming. So there is kind of a ticker on this. It's not like a bridge. We can just extend its lifespan by 5 years. This asset is just non durable in a way that some fixed cost investments tend to be. So I'm with you. I'm not that worried. And just to add more fuel to this fire, OpenAI isn't worried. They just announced today a $38 billion deal with AWS.

[Jason]

So okay, okay, yeah. So if they're not guaranteed. But now let's take the other side. Okay. There is also the idea that people are speculating about on X.com that there's speculation that if this, if they can't make these commitments and the company stutters or has headwinds, and if there's headwinds, what would happen to these commitments? In other words, if they couldn't make these commitments and they broke these commitments. Okay, so that means Oracle stock, I believe went up 20% or something after that announcement, huge. Right. So what would happen in that case? What would happen to Microsoft if their 27% ownership of OpenAI wasn't worth $270 billion at $1 billion IPO, but the company became worth 300 billion or 200 billion and that 27 billion was only worth 50. So you get the idea. We could be in a situation where there is a contagion.

[Alex]

Yes.

[Jason]

Let's just say there's a 1% chance ChatGPT fails, a 2% chance, 2% chance it fails, 2% chance it gets caught up in legal, you know, things that cause a problem. The Elon lawsuit, the New York Times lawsuit, whatever it is, whatever reason they don't win big and they don't become a trillion dollar company. Which a company with 13 to 18 billion in revenue is not worth a trillion obviously. But everybody's marking this as a trillion dollar company. Now if it is not worth a trillion, then there would be a contagion and who would get hit by it? Nvidia would lose hundreds of millions in revenue. Oracle hundred mils in revenue. Looks like Microsoft would lose hundreds of millions in revenue. And now Amazon Web Services would lose close to 40 billion in revenue. A lot of stocks on the same day. In the case of a chat GPT failure or even a flattening, it would be a Black Monday would be like 20% drawdown in these stocks, 30% drawdown, it could crash the AI. Boom.

[Alex]

Okay, so a couple of notes about that. One agreed across the board there. But for context, if you lost 20% of the stock market, Jason, that would take us back to what like December 24th, like correct? Yeah, it's not the end of the world terrible day, but I don't think crashes the tech industry. The other thing is I read through all the big tech companies earnings and one thing that Satya said a lot on their calendar Q3 fiscal Q2 earnings call was that this compute they're building out is fungible. And by that I think he means you can kind of swap out first and third party demand. So if OpenAI comes to them and says, hey guys, listen, we only need 80% of that $250 billion marginal Azure commit we made, well I think Microsoft can just use it. So I think that that helps a little bit. But you're right, a lot of things are depending on OpenAI, Jason, actually as you said on X and you're a little worried about competition, I think.

[Jason]

Yeah, so this is my next like scenario. So just to give you one scenario, which is ChatGPT fails. And you could include in that, what if LLMs are overhyped and all at once they hit a ceiling and for two years they don't get better and they're as amazing as they are today. They don't really change the world the way we think they are. They don't replace as many jobs, they don't, the agentic stuff doesn't work. They don't replace all the call centers, they don't replace all the salespeople, they don't replace all the, you know, cab drivers, et cetera. Well, if that were to happen, then you could have like a serious contagion where, you know, chatgpt were to fail and then like Domino's, all the other companies would fail as well. Right down the line. Yep. If like. And when I say fail, they just wouldn't reach their potential is actually probably the way to say it. So we're pricing in perfection and that these things are going to have a dramatic impact on productivity and they're having a dramatic impact on productivity now. But if it stops and plateaus, that would be a problem. But here's the other risk. This because the risk I just explained, like the. Either the entire sector doesn't deliver or ChatGPT doesn't deliver. I put that at less than 5% combined. Okay, 1 in 20, like so if you're playing Dungeons and dragons with the one and you know, if you're rolling.

[Alex]

A D20, you can.

[Jason]

Is there a D20? I know it's a D30, but you.

[Alex]

Know, D20 rolling, not zero. Yeah, happens, sure.

[Jason]

So it's sort of something to that effect. Now here's one that's more likely competition, okay? Because the company is priced to perfection. In other words, based on 13 or 18 million, they're trading at 30 to 50 times their price to sales ratio. Right? 30 to 50 times their revenue at 500 billion and at a trillion, they would be at almost, you know, double that. They would be at 60 times, 70 times 80 times their revenue. Now what if Claude's API, because I saw some notes that Claude's API was beating ChatGPT's API. I just saw a chart go by that was getting more popular. What if Cursor's new LLM for coding is just much better than ChatGPTs? What if Grok or Gemini, you know, start taking some of the consumers away from it? What if Apple does a partnership with Meta or with Google and Gemini gets all the Apple Phone users? In other words, what if they don't get all the market share. What if they lose the market share? Chat GPT's market share was at a hundred percent of LLM traffic of AI answers traffic, they were 100% at one point. Now they're down to like 80 or 85% I believe, which is still a massively dominant position. But what if they go down to 50% or 30% eventually and there's five major players? Yeah. Then that could also mean that they can't reach that $1.4 billion commitment. What if the utilization of these chips like we saw the research on Deep Seek and coming out of China, that they were using OCR to you know, store data and process data like 10 times more efficiently. What if they don't need all that compute because the open source community gets it right and it's takes 10 times less to provide the same thing? What if the price becomes so deflationary that you know, paying $20 a month is not necessary because Gemini decides it's free. Google just says it's going to be free. Apple says it's going to be free. And what if Amazon just says yeah, you know what, screw it, we got to protect the US franchise, we're going to just put up open source LLMs and you know, we'll just make this so cheap it's close to free and there's no margin. Well then you're going to have to price ChatGPT like a SaaS company and oh boy, a six times multiple of earnings or you know, a 10 times multiple of sales might not look as good. Right. It's hard to become a trillion dollar company if you're being traded at 20 times earnings or 10 times sales or 5 times sales. So that margin compression could also cause a downdraft. I think that's a 50% chance happening. So I think it's 45% right now that OpenAI continues their dominant run. 5% chance the whole sector and or ChatGPT hits a major, you know, plateau and then there's like a 50% chance that competition makes it impossible to spend that 1.4 trillion and the technological risk. Probably the best part of being a founder is watching a project that started as just an idea blossom into a full fledged startup. The worst part, it's bookkeeping. It's boring, it's detail oriented and it takes time away from building your product and hey, growing your team. It's time for you to let Pilot take care of all this bookkeeping so you can get back to running your company. Pilot's the largest accounting firm and it was built just for startups. They understand the technology industry and the landscape. They know the stakes, and they're already trusted by amazing companies we love like OpenAI scale, Airtable and beyond. And you know what? Pilot is about so much more than just getting your taxes done on time. Pilot has a smart dashboard that puts all the essential metrics your startup is tracking at your fingertip. And they have helpful advisors who can walk you through crucial financial decisions you're going to need to make in the coming years. Plus, when it's time to raise your next round, Pilot COO and CFO services are there to help. So it's time to focus on your company and let Pilot handle the books. And Twist listeners get $1,200 off their first year. Just go to pilot.com twist to get started.

[Alex]

You know, if it ends up the case that a lot of these companies don't need as much info as they think or that demand doesn't surface, other companies are going to really struggle. I mean, core weave whacked Xai, which is spending a lot of money on building Colossus 2 whacked. Like, I mean, the only company that I think doesn't have a major footprint is anthropic like shout out to them for not buying GPUs. I guess.

[Jason]

Yeah. And here's the other thing. When people worry about this stuff, I don't worry too much because I think we're in the situation where it doesn't really matter if these people lose a little bit of money. The people who are putting up the money can afford to lose it. If Google spent and if Google and Facebook, you know, blow their earnings a couple years building out this infrastructure, it's not the end of the world. So carry on everybody. And I think he can give Sam a little grace. It wasn't a good moment for him. I think people might be overreacting to it a bit.

[Alex]

Oh, he's handling this so much better than I would if I was him. Going around the world jet lagged, exhausted, trying to literally save the.

[Jason]

He's on a global. He's on a global 650.

[Alex]

He's good.

[Jason]

Don't worry about Sam. He, unlike me, he's got a Global 650 minimum. He might have a G800. You might have the 800 at this point.

[Alex]

Sam, do you want to come on the show and tell us what you're flying in? We'd love to know how you're handling jet lag and if you too are big on whoop.

[Jason]

All right, what else do we have here on the docket?

[Alex]

All right, next up, Jason, I want to talk about OpenAI and legal and medical advice. This is all over X this morning. People are saying, oh, my gosh, have they just neutered ChatGPT? Because if they did, back to your point, that could limit usage and so forth. I'm here to tell everybody that they have not lobotomized your favorite Chatbot. Instead, what they have done is change the terms of service a couple of days ago, Jason. And now ChatGPT will effectively offer you information on medical and legal questions, but it will not offer advice to you. And in the new version of the OpenAI kind of terms of service, there is a line that says, you cannot use our services for the provision of tailored advice that requires a license, such as legal or medical advice, without appropriate involvement by a licensed professional. This to me reads like cya.

[Jason]

Yeah. So I guess there were a couple of accounts on Twitter that were saying there is chatgpt is no longer to give health advice and people, or legal or financial. And immediately people said, well, that's what I use for most.

[Alex]

That's the use case. Yeah.

[Jason]

So like, literally I take a picture of all the supplements I'm taking and I say, what else should I take? What are these known for? And I will take a picture of my creatine, my electrolytes, my protein powder, and my collagen. When I make like a shake in the morning, I put it all together and say, hey, what is this? What impact is this going to have on my workout today? Et cetera. And, you know, I'll put it in my little health tracker. So now they're going to, instead of saying, hey, you should add or you should consider adding these things, I guess they would say a doctor might. Or the FDA says you should have this many grams of protein. Peter Attia says you should have this many. So this does feel like they are concerned about practicing without a license. And I think this reflects how good they are. It turns out there was a study which we'll have somebody look up right now. I think it was John Hopkins, Hodgkin, Hopkins, Hopkins, or it might have been Harvard did a study on just General Practitioners, GPs, Doctors versus ChatGPT and large language models giving advice. And they, they sort of tested all of them and it turned out, you know, head to head, the LLMs did better than the doctors. Then they did bedside matter. It turned out chatgpt like, or all these services did like, much better than the doctors because they're patient with patients and they have great bedside manner.

[Alex]

So just Jason, backing you up there. There is a Johns Hopkins from mid 2023 entitled Doctor is Out. But it's okay. ChatGPT can answer your questions. Found that ChatGPT outperforms human physicians in quality and empathy. And then there was also Times coverage of similar studies in November of 24 saying that, quote, a small study found ChatGPT outdid human physicians when assessing medical case histories. So essentially we are seeing doctors take this stuff up as well. But they can interpret, they can better understand and find obvious errors.

[Jason]

Can they find errors? You know, I, I would actually say if you told me, if you told me your health is at risk. Here's your choices. This one doctor is going to give you. These three doctors are going to give you their best advice, or you can pick these three LLMs and you can feed the information. Same information you can give to these three doctors or these three LMS. I'm taking the 3.3LLMS. That sounds crazy, I know, but I think for almost every case I would do that. What would you do, Alex?

[Alex]

I would take, talk to the physicians because I have a great number of them in my geographically local family here and I hear about what people bring to them from LLMs and what kind of advice they're getting. Not just ChatGPT, but the whole gamut. And I don't think that the app. Jason, the average person's not very smart, so they're not doing great research here. They're not.

[Lon]

No.

[Jason]

I'm saying for you, for you, though, I.

[Alex]

Even with all that. No.

[Jason]

Okay.

[Lon]

Yeah.

[Jason]

And do you think in the coming years it would change?

[Alex]

Oh, five years from now?

[Jason]

Oh, God.

[Alex]

I mean, I'm either going to be in a flying zooks or I'm going to be digging in the ground with sticks. So I'll take the LLMs in five years. Yeah.

[Jason]

Yeah. So I think it's. Then it's just a matter of time. We're in agreement.

[Alex]

Oh, I think most, most AI questions is just your time horizon, you know.

[Jason]

Like, you know what this sounds like to me? It sounds to me like people with credentials are going to start suing the LLMs for giving advice without a license. And you did have this suicide, and I believe the, the Suez. There's a serious suicide case that ChatGPT was involved in. Not the person who worked for ChatGPT, who was the whistleblower. That's the Joe Rogan clip we could play, which was crazy on top of the Tucker Carlson one. And we can get into that, but I think the, you know, more relevant.

[Alex]

One is Adam Rain who died by suicide in April. And he was deep into conversations with ChatGPT. And if you recall everyone listening, this is one of the things that led to OpenAI releasing data about people using the service while under Jason heavy mental duress, let's say. And also they changed how they handle outreach to crisis response call lines and also how they respond to people who are, as I might say, losing it while chatting to the chat bot.

[Jason]

So according to the lawsuit that you just mentioned with Reigns, the Lawsuit says, quote, ChatGPT actively helped Adam explore suicide methods. Wow.

[Alex]

This is the one when it said it couldn't. But if you ask me to do it in a story world building setup, I can. And he took that easy workaround.

[Jason]

Yeah, I guess this is some dark stuff. So I will give ChatGPT some credit here. I'll give OpenAI some credit for maybe trying to get ahead of the how great these things are giving people a false sense of security that they should blindly rely on them. And so maybe they'll just start giving more disclaimers. And I was talking to some friends over dinner about this when the story broke and I just said all they have to do is have any time anything health related, finance related or legal comes up. They say legal is a serious, you know, practice. We can give you general information from this experimental software. Please do not rely on it. And they should just give that paragraph and then you should have to check a box that says click here to sign. You have read this? Yeah. Like you do for your terms of service or maybe even like a docusign. Sign it and say, I release all liability from Chat, CBT, Grok, Gemini, etc. For any responsibility for me using this health information to make health decisions.

[Alex]

Yes. I think also they're trying to front run regulation because if they didn't do this sort of thing as the most popular consumer facing AI tool, they're catching all the fire. Like you mentioned earlier, the API between Anthropic and OpenAI, how Anthropic is winning. It's true. Anthropic's business is growing very quickly on the back of enterprise sales, whereas OpenAI is majority ChatGPT subscriptions. So they're the tip of the spear here. And if they screw this up and then Congress comes down with regulation from hell, everyone's going to suffer. So they're kind of doing, I mean, God's work in a way by limiting us from, I would say, misusing these tools as oracles. Versus what they are, which is large language models. And I don't mean that as a dis, it's more of a statement of fact. They're not omniscient, they don't have consciousness. And I do think people spend a little too much time trusting them here. That said, whenever OpenAI tells me you won't do something chatgpt, I scream. I'm like, are you kidding me? I'm not 4 do it. So I'm on both sides of this one.

[Jason]

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[Alex]

Next on the docket is a find from the production team. We have talked on the show quite a lot about how startups might be reporting gross revenue instead of net revenue or contracted ARR versus real ARR. Well, what's a great way to find the source of truth, Jason? It's linking your stripe account to a public database so everyone can see how fast you're actually growing. So to that end, Marcus and I have found for you trust mrr.com check this out. This is a list of 100 companies that have connected their stripe and you can literally just see how much revenue they have and how quickly they're growing. Take a look. I love this. Right? So the number one, number one company is this. And you can see its revenue over time.

[Jason]

This being data expert tech creator has 3.4 million in all time revenue. 168,000 in the last 30 days, 4,589 yeah, there was a company called Buffer that was doing social media posting. Yes, Buffer was part of that build in public group. So what's great about this is, hey, most people are not going to put their content up here, but this is all time revenue. If we just check that down box there and I see here you just put your restricted API key in. But instead of all time, let's do this month or 30 days.

[Alex]

Yeah. So 30 day winner is hype proxies.

[Jason]

Well, now every VC is coming here to set up meetings with these companies. So the upside here is you've just got the entire investment community to come here and go talk to you about your company. The downside is that you've just inspired people to create a version of your software and charge half as much or turn your software into a feature. And this goes to the should I build my startup in public discussion that I keep having with people. And you got to be careful, sometimes giving a revenue milestone can get you a little bit of action and press and information, but you are educating people and it's a very competitive world. One thing I've seen over and over and over again not to single out, Y Combinator is failed Y Combinator companies who got the 500k from Y Combinator, the 125k and then the convertible note, just literally ripping off other companies in the marketplace because they can't think of an idea, but they have some money and they want to make a go of it. So they just take another startup's idea. And there's been some gnarly cases where young entrepreneurs do stupid things. And it's not just Y Combinator, but I think it happens in Y Combinator because you have this combination of a startup with builders who can build quickly, who have been selected because they're kind of hackers and they like to break rules. Remember that question they asked, what's an example of you breaking rules in your life?

[Alex]

Social hacking or something?

[Jason]

Yeah, yeah, there's some like rule there. So you have rule breakers who are known to build fast, who have some money in their pocket and then they fail and instead of coming up with their own idea, they come here. So imagine if, you know there's 200 people in a Y Combinator class, okay, 10% of them can't figure it out. So you got 20 people with 500K and two developers, three developers, whatever, three builders. What should they do? They should go right to this list and steal these ideas. And that's the dark side of this and why I would recommend not Doing.

[Alex]

It, not doing it. That was kind of my question to you. Should v, should startups do this? Because I don't know. I went through this list. I'm not a vc, but I'm keeping track of companies for us. And I was just like, who do I know on this list who is not? Who do I not know who is news. As a small addendum, Jason, there is a, there's a fake version of this. Now if you go to fake-mrr.com it's the exact same thing, but done in a whimsical format. So if you want to see how totally real company and Walmart are too, people are having a lot of fun, which I appreciate.

[Jason]

I mean it's an interesting concept and in a world without people stealing each other's ideas and so many over funded teams in the world in a peak, we were in peak zirp. Now we're peak AI bubble.

[Alex]

Yep.

[Jason]

So if it wasn't peak bubble or like we're kind of, we're getting to peak bubble, I would say when the whole discussion of the first half of the show is some lunatics spending $1.4 billion trillion dollars. Not billion trillion dollars. There's a startup spending $1.4 trillion on infrastructure. Like it's pretty heady out there folks. So I would be careful inspiring people to go steal your business idea.

[Alex]

1.4 trillion is, is 1400 billion, which is just.

[Jason]

It's 1400 unicorns. Yeah, yeah, it's crazy.

[Alex]

All right, Jason, before we move on, I have a thing I wanted to ask you about.

[Jason]

So Jason Limkin, you could give 14,000 Startups $100,000 dollars. $100 million to. You could fund 14,000 Startups with a hundred. No. Is that right? Wait, yeah, I think that's right. I mean you'd be a billion dollars to 1400, which means 100 million to 14,000. Yeah, I mean it's. The numbers are so big, I'm like actually not believing the back of the envelope math I'm doing from halfway around.

[Alex]

The world with jet lag. That's the problem with, you know, I mean, a thousand thousands.

[Jason]

A million.

[Alex]

A thousand millions. A billion. A thousand billion is a trillion. And so it gets big really, really quickly.

[Jason]

Very big.

[Alex]

All right, next up, Jason, Star Cloud is finally in space. They went up on the latest SpaceX mission and dropped their first satellite into space. Would you like to see a Nvidia GPU take flight from SpaceX?

[Jason]

I know Jensen does.

[Alex]

Yes, he does. All right, so here is the clip of Star Cloud's first H100 going into space.

[Jason]

Okay, here we go, I guess. Star Cloud 1 separation confirmed. ISI 3 separation confirmed. And that was our final payload of the bandwagon 4 mission manifestation.

[Alex]

I thought that was super duper cool.

[Jason]

We've been talking what that's attached to. Is that attached to the, to the, you know, like a Falcon 9 or something like that, or is that their unit now attaching H1 hundreds.

[Alex]

So this, this is the first kind of demonstrator device from the company. And when we had Philip Johnston on.

[Jason]

The show earlier this year, he's episode 2073.

[Alex]

Yes. This is a 1 kilowatt, so not very powerful, 50 kilogram satellite that I believe has a single H100 on it. So this is a. Let's get it up in space. I mean, you have to deal with radiation. It's a different level up there, cooling's different and so forth. But the cool thing is now that they have this up into space and working, by the way, they didn't lose connectivity to it. So that's fantastic. They're working on their next satellite, which is going to be, I believe, called Star Cloud 2. The company rebranded from Lumen orbit earlier this year, but doesn't really better. It's going to have about 100 times more GPU capacity. So the company is now, you know, stellar and then soon it's going to be a fleet. And I, I don't know, Jason. I just. This company was one of those, you see it YC demo day, you're like, sure, data centers in space, why not? But in like two years, they've gone from founding to actually having a GPU in space that works. So I'm blown.

[Jason]

Which says a lot about SpaceX's cost of putting stuff in space that nascent startups can actually get to Space. Right. Without SpaceX, that would happen. So that's really interesting. I guess the question is the satellites want to connect to it and actually offload a job to it. Or like, so that would be their customer is there's a satellite up there and do they dock with that satellite? Or how does a satellite get data from a satellite to the H100? Is there a standard for that? Like, does WI fi work in space? I know it's a very stupid question, but I would assume WI fi doesn't work in the vacuum of space. Or it works really well.

[Alex]

Well, given my deep, you know, physics PhD that I have, the way that he explained to me was lasers essentially in between different satellites to connect them in Orbit Compute is going to be one of their markets, but I think more near term they're going to be working with you basically using lasers to send it up and down from the planet. And he says that there is an advantage to having optical for that versus connecting to ground centers. You have to help me out the terminology here, Jason. The places on the earth where we talk to satellites traditionally using radio and such, that's much lower bandwidth. But with their second demonstrator they are going to have the ability to beam stuff down with the laser, which is much higher throughput. But right now I just think they're trying to do like the kindergarten version of their future projects to make sure that they can do it. The company though is not de risked. I don't want to overly sell this. They definitely still need lower launch costs to get the amount of solar panels and GPUs and stuff into space to make their idea function. So.

[Jason]

Of course, yeah.

[Alex]

But I don't know, I'm just. I was so jazzed for them. Like you ever just get excited for a founder that you meet and you really like and then something good happens? That's why I want to put it.

[Jason]

Absolutely. And so I see here just asking producer Claude to help us out at Claude AI and we'll give you a promo code in a second. Radio frequency communication Most common method spacecraft use radio transmitters and receive with directional antennas. Common frequencies S band 2.4 GHz. That sounds like you're your WI FI at home. Data is modulated onto radio waves and beamed between spacecraft. Requires line of sight between transmitter and receiver. Optical laser communications, which is the newer, faster technology, uses laser beams to transmit data at much higher rates than RF can achieve. Gigabits per second versus megabits for rf. Radio frequency requires extremely precise pointing since laser beams are narrow. NASA LCRD laser communication relay demonstration Demonstrate this technology is less susceptible. Wow, that's really interesting. Yeah, and I guess there's distance and power limitations on these, but that's how data is sent in space.

[Alex]

Now everyone knows, but we have startups that are working on building space tugs that are working on in orbit refueling that are working on trash cleanup, that are trying to put GPUs into space. We're talking about in orbit scientific experiments from Varda in orbit factories. If I was starting a VC fund today, I would just raise as much money as I could and give it to all these awesome companies because I'm really, really bullish on the space economy in the next 10, 20 years.

[Jason]

Years there, you know, with this whole space economy though, there needs to be a customer other than the space industry. So it feels like we're picks and shovels. But what is the actual benefit to humanity? And I think the best thing I've heard is that mining certain things off of asteroids etc and the collection of some of those minerals, rare Earths, you know, like maybe they're rare on Earth but not rare on asteroids type thing that those might be the big win. That's what I'm waiting for is like what's the big win? I mean scientific discoveries are great, but you know, are some of the moral victories or intellectual victories that don't actually translate into a monetizable revenue stream for a product or service to sell to other humans and businesses on the planet. That's my only concern with these businesses. I know that there's a great business in, you know, sending stuff up there. But you know, Elon found a business a lot of people are willing to pay for, which is SpaceX. People want to have Starlink.

[Alex]

Yeah. Oh, Starlink. If, if they broke out Starlink, how much would that company be worth? Jason?

[Jason]

I think it's $100 billion company out of the game. Yeah, yeah, I don't have enough information to know, but I mean it's, I think they'll be, I think there'll be a billion people who are paying for Starlink eventually.

[Alex]

Yeah, I can see that dance. Your question though, what is the actual like use case? By the way, this echoes to me like crypto conversations and also early AI to some degree. It's kind of fun that we end up doing this kind of on repeat, picking a company from the bucket. Albedo Space is doing very low Earth orbit imaging of the planet with some special tools and techniques they're doing with that. They're another company that I've tracked for a while. But to make their technology work they need to have very, very low satellites, which means that they have high drag, so they burn a lot of, of fuel, so they need in orbit refueling. So I think we're starting to see some applications that will use the picks and shovels that we're building. But you're right, we're not there yet.

[Jason]

And I do believe space stations, we're going to announce an investment shortly and I think space stations are going to become like the next card to turn over in this. You know, people are going to want to have a permanent home in space and there's going to be a lot of providers, non governmental providers who are going to provide, you know, I don't want to say Airbnb of space, but there's going to be a need to have permanent installations in space, whether it's for a data center or for people or for shipping stuff. So, yeah, it's coming, folks. It's going to get really interesting in the next Axiom.

[Alex]

Space is a one name in the private space station game. And also, if you want to look at asteroid mining, Trans Astra and Astro Forge are two more names to add to the mix.

[Jason]

All right, and what is our code for Claude? I just did a Claude promo. We shouldn't throw in the. We missed the. Throw in the code there.

[Alex]

Oh, yeah, no worries, Claude. AI slash twist. If you want to save 50 off your first three months of paid cloud access, we use Anthropics Claude here at Twist each and every day. It powers every show. We live and die by it. Come join us if that's your jam.

[Jason]

Yeah, it's. It's awesome. Well worth paying for. All right. You know, I. I'm on the road right now, and I've seen there's a lot of Poly Markets going on that I just want to check in on.

[Alex]

Oh, okay, hit me up.

[Jason]

I wanted to check in on the New York City mayor election, and I have an announcement after we see what's going on on Poly Market with this New York City mayor election. Because I been hearing that Cuomo is coming back and that these. There's some polls. I saw this on social media, but I don't trust polls and stuff I see on social media anymore. So when I want a version of the truth, I just go to Poly Market. It's got the Zohan. The Zoan is the Zohan. The zoron is at 94%.

[Alex]

Yeah. And even more so, Jason, look at the trend. Plus one versus Cuomo, down one. Now, for folks out there who don't know what we're talking about, this is the New York City mayoral election. No, this is not for president. It may feel like we talk about it as much as a presidential election, but because New York City is, oh, I don't know, Jason, one of the capitals of the world and a financial titan, it gets outsized media and press attention.

[Jason]

Well, and also, he's 30 something years old and a socialist, and I guess, you know, I don't know how to say this. Anti Zionist, pro Palestinian. I don't know exactly how he frames himself, but my Jewish friends in New York are very concerned about his stance on Israel. So New York, I mean, a lot.

[Alex]

Of Jewish Brothers, There's a lot of Jewish people in New York City. Absolutely.

[Jason]

Yeah. And they're like, what's going on here? And there's a lot of capitalists there too. But here we are, folks. I think polymarket gets it right.

[Alex]

So what, what else did you want to check out on, Jason? I was, I'm keeping track of the government shutdown myself.

[Jason]

Oh, is that. Yeah, it's very interesting because I guess what we're trying to figure out is when it ends.

[Alex]

Yeah. So the thing that I wanted to highlight for everyone today on this play market, a couple of things. One, I like markets that have lots of volume. This one is nearly 6 million. But it's the decline of optimism. So if you're on the audio version, we're looking at a chart right now of just when will the government shutdown end. And the furthest out option, Jason, is November 16th plus. And it just keeps getting higher, which to me implies we could have at least another two weeks of this shutdown, making it, I think, the longest shutdown in history. And it doesn't seem that anyone who's making hedging bets here thinks this is going to change. And that, to me is just an indictment of my nation, our nation's current political good luck.

[Jason]

Yeah, what a disaster. Just November 16th plus is 54%. And as you can see, there was a ton of volume. See, this is actually the interesting thing of a time based one. If you scroll down just to teach people the poly market, how Poly market works, you can see the resolved. So if you scroll back up, you'll see like. Yeah, so you see view resolved. So what you can see here is that if you had been betting on this and wagering and you know, you could have bet before 15th, before October, before the 19th, before the 23rd, those have been resolved. So this is like continues to resolve itself. So I guess the November 3rd one resolves, you know, later this week, November 7th, over the weekend, etc. Etc. Man, this is really interesting. I, I kind of like the government being shut down because I think we're.

[Alex]

Spending too much money. I don't think we're saving. We're not saving much.

[Jason]

Yeah. Like, doesn't all the money just go back out anyway? Like, everybody just gets their paycheck. So the only people suffering here are people who are civil servants. So unless they're the ones in charge and they still get paid.

[Alex]

There's, there's a, there's a disconnect between business and government that I think people get a little bit mixed Up. So in a business, Jason, what's the number one expense most of the time? Humans.

[Jason]

Right, People. Yeah, humans.

[Alex]

Yeah. It's, it's, it's much, much smaller fraction of the government spend than compared to corporations. And so when people show up and try to, like, cut staff as a way to, like, dramatically reduce the federal outlays, it doesn't work because most of it is entitlement programs and earned benefits. So I don't think the shutdown actually saves us much money. I just think it makes the country worse.

[Jason]

Yeah. And those 600,000 furloughed workers, those folks are furloughed, which means when they come back, they get their money, I guess. And then there are a bunch of them, God bless them, who've been working now for a month.

[Alex]

Yeah.

[Jason]

Without pay.

[Alex]

Yeah.

[Jason]

Which is, is brutal. And then people aren't. I mean, I understand, like the food stamps program is abused massively. You know, know, who knows? 10, 20, 30, 40, 50%, who knows what the abuse is, whatever it is. And you can buy soda on it, you could have tons of complaints about it. But there are some people whose food is, you know, like, they're, I don't know if they're going to starve, but there are people who are going to struggle. And so I just wish these people would work together in a more functional way.

[Alex]

Yeah. Disgratiad around. But at least we have polymarket to keep us entertained, Jason, as we fiddle while watching Rome Burns, you know?

[Jason]

Yeah, I mean, well, no, what actually is really great about it is there's another poly market I saw, which is will it be the longest in history? And I didn't know this, but, you know, that's one of the things I like about polymarket is I can start to build mental models of what's going on in the world. And I didn't actually know what the longest shutdown was. It was December 2018 to January 25, 2019.

[Alex]

So according to Claude, that was 35 days and that was during the first Trump administration and this was the fight over the southern border wall. But we're at 34 days now, so if the government doesn't radically immediately open by tomorrow. Well, congratulations everybody. We've done it. A new all time worst. Would you like some good news, though, Jason, to put a smile on your face? All right, another twist. 500 Company is in the news this time it is Lagora. It's a legal AI startup, or maybe an AI legal startup. Swedish offices around the world just raised 150 million in a Series C, led by Bessemer, Now a unicorn, $1.8 billion valuation, and its customer count I think, effectively doubled while it added another 20 markets since its last round. And the company's CEO Max Unistron says, quote, we are seeing astronomical demand for our product. Legal professionals across the globe are adopting AI into their work at an unprecedented rate. So I was curious, what does that mean for other legal AI companies? I went to the Twist 500, I pulled all of them and it turns out they've all raised money in the last month, more or less. So I think what we're seeing here is a really impressive locus of market adoption and demand for generative AI products in a new industry that is not software development. But Jason, I'll just say structured language, huge corpus of information, historical record to pull from. Those are things that tend to do well. So maybe it's not a surprise that we're seeing legal AI companies do so well. But I was just blown away by the amount of capital going into Eve, Nexle, spellbook, Harvey, even up and Lagora in the last like 30 days.

[Jason]

So, yeah, there's, and there's a couple of things that lawyers do. You know, of course there's research, like you're researching a case and you know, research has had Westlaw and LexisNexis and services like that. But being able to use AI to do it and do natural language queries, you used to have to learn how to use LexisNexis really well. And there were some people in the firm, your law firm, who knew how to use it really well. So you just go to them and you would pay like by the page, by the search, it was not cheap. And then you would just pass those like 5 cents a page, 25 cents a page of research onto your clients anyway. So I remember it was like, you know, you might be doing thousands of dollars worth of legal research on those services. Now you're going to have all that corpus into an LLM and the ability to, you know, not pay for it. Really interesting. But drafting documents is something that people do all the time and they have document management systems. But to be able to draft a document using AI is really powerful because if you said, I need a non disclosure agreement for Alex and Jason, they both work at Launch. You know, Launch has its own template. They have the names of the company, you have your name, your social, whatever information. A lot of that drafting could go a lot quicker. And then the third thing that lawyers spend a lot of time doing is reading documents, right they have to process them. And document review is the other thing you get charged for. So. So if you get, I don't know, if you get sued. Okay, you have a human resources case now. You gotta go find all the documents associated with that manager, that employee, when they started, all of their emails, all of their Slack messages. Right. In the case of discovery, you're researching those documents and then there could be legal docs. Oh, we're doing an M and A deal. We did an M and A deal. We're being sued. You hire a new counsel to do this. You have to go get binders of documents, folders and folders of signed documents and summarize them and read them. Like you're saying, research, drafting and reviewing. Those things are just so custom made for an LLM. Now, the problem is you can't make mistakes.

[Alex]

No.

[Jason]

So this software, I think, think is going to need time to fully bake. So. And then people get lazy and they don't check their work. So there was a case of somebody who drafted a document and sent it to court with fake stuff in it. We covered that two years ago.

[Alex]

Yeah, I was going to say I've seen that recently, but then my second thought was, I haven't seen that only once. Yeah, people are sometimes quite lazy and if you give them a tool, they will just kind of copy and paste it in and. And they're gonna get into a lot of trouble. The thing though is what I was surprised by as well, Jason, is the diversity of business plans for these companies. It's not all Harvey clones, just for example, even up, which raised 150 million that Bessemer led, is working on just the personal injury legal space. Eve wants to help people that are at the plaintiff side of legal cases. And Nexle is actually building kind of like GTM software for. For legal firms. So we're seeing a kind of a multivariate approach here. I don't know if all these will end up being companies versus features, but it's not just the same idea. And then nine Clothes, which I think is very encouraging.

[Jason]

You know, I feel like talking to editorial director Lon Harris. I've been seeing that this Warner Brothers, which I sold out of. I took a bath on my J trade. Hey, Lon, how are you doing? Good to see you.

[Alex]

From around the world.

[Jason]

Tell us what's going on with Warner Brothers. Sure.

[Lon]

Well, so Warner Brothers, they sort of announced a few weeks ago that they are considering offers, basically putting themselves up for sale, announcing to the world they are planning to sell the company or possibly to split up the company. That's what it's more and more looking like. So we've had Paramount, the newly merged Paramount slash Skydance. The Ellison family of course took that over. So now they have run Paramount. They were thinking about trying to take on Warner Brothers Discovery. There was some concern that this would mean two of our largest sort of news organizations, CBS News, which is owned by Paramount, and then cnn which is owned by Warner Brothers. Discovery would both be in the hands of the sort of Trump aligned, or at least loosely Trump aligned Ellison family. But so far Warner Brothers has rejected those offers. They're too low is what the trades are saying. So now Netflix has hired an investment bank and sort of is sort of circling Warner Brothers and trying to see if there's a deal. Now Ted Sarandos kind of talked around this during their last earnings call last week. He's suggesting the interest of Netflix is entirely 100% IP. So Warner Brothers owns, I'll give you a brief list. DC Comics, all of the HBO shows, Harry Potter, Barbie, Looney Tunes, the Monsterverse, that's that Godzilla, King Kong franchise, it, the Stephen King franchise, Lord of the Rings, Mortal Kombat, Final Destination, Blade Runner is also in the Warner Brothers. So that's what Netflix is looking at and licking their chops. Like they want to make Batman shows, they want to make a Harry Potter movie, they want to make all of this stuff. Now what Sarandos is suggesting they're not interested in is the cable TV business and all of that infrastructure. So in addition to cnn, Warner Brothers Discovery owns Discovery, tbs, hgtv, Food Network, tlc. This was all that stuff Zaslav was so excited about like the 90 Day Fiance verse they were launching on HBO. Max. That stuff Netflix not interested in, they don't want all. They want to make their own reality shows. So they're thinking of maybe they would buy the Warner Brothers movie and TV studio and then spin off the cable networks into their own company and they.

[Jason]

Could be a big mistake. Something else they should go, obviously they should buy the ip. It's a no brainer and they can outbid everybody except for Apple, Amazon and where is Apple and Amazon and all this like Apple owning HBO is the obvious best term for it because Apple likes prestige.

[Lon]

Yeah, when you could always see these like hit Apple TV shows would be right at home. They're trying to make HBO content anyway. Stuff like Severance, Silo, Slow Horses. Those are all just HBO shows that ended up on Apple.

[Jason]

Yes, very precious, very manicured, very well thought out. Very or tour I guess would be the best word. Very or tour.

[Alex]

Silo was good. Those books are fantastic. And they did a pretty darn good job bringing it to the screen. Yeah, yeah.

[Jason]

So I don't know. Spoilers, please. So I just. Here's what I. First of all, I just want to say my jtray got crushed. I lost $24,000 on this effing stock because I sold it at 8 bucks. What is it at right now?

[Lon]

What's Netflix today?

[Jason]

Well, they're not Netflix. I kept my Netflix.

[Lon]

Warner Brothers 20.

[Jason]

I bought it at 16. I bought it at 16. I sold it at 8 because I was so disgusted. I had lost money on Disney. I had lost most money of all my J trades. The biggest loser was Warner Brothers. And I love Zaslav and I love these assets. But I was just watching this thing for two years go down and down, and I said, you know what? I have all these other stocks going up and up. I had to sell some winners and I had a big profit. So I was like, okay, let me use some of these losses to offset it. So I sold it. But if I had held it Instead of losing $8 a share and 24 grand, you're telling me I would have made $6 a share and I would have made like 20 grand. But it doesn't matter because I was offsetting losses.

[Alex]

It's all good.

[Jason]

They should keep cnn. This is the one piece that's a wild card. I predict they keep cnn. Why? There are people who love cnn and having CNN as part of Netflix would give you a reason to keep it open all the time. Yeah, and it's global now. Netflix has a global business. There's CNN in every country around the world. And if there isn't whatever pockets where there isn't CNN or what an amazing opportunity to expand the franchise. Now, the reason Ted might not do it is because of politics and toxicity and stepping in it. But if they went back to CNN just doing straight reportage and not having like a bunch of emotional, which they've tried to do. Zaslav has moved CNN in the Trump 2.0 era to really trying to get back to a centrist, not opinionated. And they, they hired that right wing guy who just dunks on everybody on when he's on panels, and they've kind of deprecated having it just be all, yeah, you know, Trump derangement syndrome, whatever. And they tried to just be more even killed. But I think maybe they don't want to be involved in Anything as toxic as politics and news, I think it's a mistake. I think you play the long game, you got three years to navigate the end of the Trump era, or seven. But I'm gonna go with three. Say Polymark. Does Polymark have Trump taking a third term?

[Alex]

I'm on it.

[Jason]

Oh, my God.

[Alex]

That's the one I want to put money on.

[Lon]

Now, Trump is. He. He was, he was saying he was doing all of that sort of stuff around it with the hats or whatever, but now he's sort of saying he was just joking and he doesn't really think he's going to do a third term.

[Jason]

So he's definitely doing it.

[Lon]

But that's what Trump is saying this week. But who knows if you can believe him.

[Alex]

4% on Polymark as presidential election winner. 2028 poll.

[Jason]

Okay.

[Alex]

Donald Trump, 4%. Marco Rubio, 5% to give you how much faith the market currently has in a third. Trump JDM top. Gavin second. AOC third.

[Jason]

I think. Now, wait, I can't bet against aoc. No, I can bet. No on aoc.

[Alex]

You can, but you can buy.

[Lon]

You can bet. Yeah. Yes or no?

[Jason]

There's no way AOC winning president in 2028, right?

[Lon]

That's not happening. It doesn't feel super likely to me. I mean, like, the Democrats that are really finding a lot of enthusiasm for the base, they are, do tend to be sort of left, you know, like Mandani, Bernie Sanders, AOC they're the ones that have a lot of hype around them right now. But that doesn't necessarily mean. That doesn't mean you going to win a four. No, I don't. I don't think. I don't think that.

[Jason]

Of course you have to win the. This means win the nomination and win the presidency, you know.

[Lon]

Right.

[Jason]

Make it to the final in the general. Yeah, yeah. It's not. It's not.

[Lon]

Yeah.

[Alex]

I don't.

[Jason]

So what do you think of my idea here?

[Alex]

No. Ivanka, Me. Are you on here?

[Lon]

No, I don't think so.

[Jason]

All right, so what do you think of my idea with no I N N?

[Lon]

Well, I think what's so interesting about it is just if you remove the political angle entirely, CNN is one of the most established live brands in the the world. And that's exactly what Netflix has been trying to position itself. They want to be. You watch live events on Netflix, not just Vod, squid, game, whatever. They want you to watch boxing matches, they want you to watch football. So, like live news, 24 hour news. Seems like a Perfect complement to that. So I think it is an interesting idea.

[Jason]

They should buy CNBC as well.

[Lon]

Well, I think the, the idea that you're gonna step in and say we don't want all media to be in the hands of a few people, it kind of. There's a hero narrative in this for Netflix as well. Like we're going to step in and save American journalism. It was all going to go to this one family was going to control all these news networks. But now we're going to take it and we'll step.

[Jason]

Oh, right. Because the other option is the Ellison.

[Lon]

Who already own Paramount, Skydance. They already own cbs, so they get CNN too. That's a lot. And actually David Zaslav has spoken to this pretty specifically. Last week he was at the Simon Wiesenthal Center's humanitarian dinner giving a keynote and he said, quote, when the government controls the news, that is the end of democracy. So he didn't name names, but everybody sort of feels like that's what he's saying, that he's being pressured. And there has been. Now none of this is confirmed, but there has been some suggestions in the media. CNN reported on this, actually that the Trump administration has been signaling that they may not give approval, regulatory approval to any acquisition that isn't the Ellison's taking cnn. Like they wouldn't. The FCC would shut down a merger between Netflix and CNN or whatever. That's just the room. We don't know if that's true.

[Alex]

Yeah, I think it's a pretty good point. And today in a transcript of the 60 Minutes interview that Trump did, which is now part of cbs, which he helped facilitate the transaction with the Ellison family and so forth, he specifically printed, praised the new editor in chief of CBS and so forth. So I think we're into Hungary territory. We're going full Orban or. Right.

[Lon]

And I think, I think we can sort of see that the Trump administration would prefer that CNN end up in the hands of an allied sort of group than, you know, Netflix or another loose cannon company other. Not, not that Netflix is necessarily Trump's worst enemy. I mean, I don't think any of these companies would go at him necessarily.

[Jason]

But anyway, it's an interesting shout out to Simon Wiesenthal. Not. People don't remember, but he was like the greatest Nazi hunter.

[Lon]

Yes.

[Jason]

Of all time, brought 1100 Nazis to justice. While I have you here, best Nazi hunter film or film threadline or TV show.

[Lon]

I mean, I would say I have.

[Jason]

My own, but I want to hear yours.

[Lon]

Yeah, I Mean, there is one of my favorite movies of all time is a 1969 French movie called army of Shadows by a guy named Jean Pierre Melville is the filmmaker. And it's just a French Resistance. It's a bunch of different stories interconnected about members of the French Resistance during the Nazi occupation. And it is incredible. And it's like. It's a great movie to watch, like, right now because it does have that kind of, like. It's very motivating and it's very exciting and it's very compelling. Just like following along on these little missions and how they sort of went about sabotaging and what they would do if they got captured and all this really great movie that it's about, I guess, Nazi evading and Nazi thwarting more than Nazi hunting. I do really like that. I'm trying to remember which one it was.

[Jason]

I think Boys from Brazil.

[Lon]

Yeah, that's a great one.

[Jason]

The Boys from Brazil. You ever see that? Sure.

[Alex]

Yeah.

[Jason]

No, I know.

[Alex]

Honestly, I mean, I'm not gonna lie. I. I don't think I've even heard of this.

[Jason]

But here is Boys from Brazil is in 1978, obviously, Inglourious Basterds.

[Alex]

Cover of the Boys.

[Jason]

The Boys from Brazil is.

[Lon]

I was also Olivier. There's that great X Men First Class sequence about magazine. Being a Nazi hunter. Yeah.

[Jason]

Was so great when he hunts them down in their, like, Bavarian village in Brazil. Right?

[Lon]

Yeah. He finds them in South America. Yeah.

[Alex]

Yes. I forgot that I was.

[Jason]

Great scene, which I think is inspired by Boy with the Coin. I think that's inspired by boys for sure.

[Lon]

It for sure was.

[Alex]

Yeah. I just think there's a big tam for Nazi hunting videos and movies. I think some startups should make more of these because apparently we can. There's a lot of good ones.

[Lon]

Well, the great thing, I mean. And Spielberg talked about this when he made Raiders of the Lost Ark. The great thing about making Nazis your villain is you could do anything that people don't care. You could blow away a hundred of them. James Gunn actually has been having fun with this on Peacemaker, the HBO Max show. Like, if you set up that your bad guys are Nazis, you can gun down a whole field of them and everybody's like, hooray, Bravo, good job.

[Jason]

Melt their faces with the Ark of the Covenant.

[Alex]

Right.

[Lon]

Nobody feels bad, no matter what. What gruesome, awful thing you want to do to them in your movie, because they're not.

[Jason]

All right, folks, I think. I think it's time for me to hit the hay. But before I do, maybe I should do one founder question since you're here, Lon.

[Lon]

Oh, sure.

[Jason]

Have a great founder. Because I literally spent the whole day talking with founders. I did the founder university presentation that you helped punch up.

[Lon]

Sure, yeah.

[Jason]

Yeah. So I did that for an hour this morning. I walked. It was great. People loved it. So great job on the presentation.

[Lon]

It's a good presentation. Yeah, we went through it. Kabir and I spent a long weekend going through that slide by slide.

[Jason]

Well, you guys worked over the weekend for me. Thank you for that. That's right. Yeah.

[Lon]

Bianca too. Bianca helped out. She's been very busy in. In the Kingdom, but she helped out as well.

[Jason]

Yes.

[Lon]

All right, so I do have a good founder question here from Warm Sale 7908 on R startups. Is there asking founders who've raged angel or seed rounds, how do you track Runway and burn rate and how painful is it creating investor updates? This was such a good question because it's so. It's so directly a founder university question that we hear from all the time. They wrote I'm researching how founders manage Runway tracking and investor updates after raising angel or seed rounds, trying to understand if there are real pain points here. If most people have figured it out, would love to hear how you handle it, what tools you use, what's annoying, what works well and so forth. So, Jason, what do you think is the best or simplest way for early, early startups to track their Runway and burn?

[Jason]

Very simple. There are tons of accounting firms out there who do this kind of work and they'll send you every month a P and L, and they will send it to you somewhere around like 10 days after the close of the month, 15 days after the close of the quarter. And you have to have your accounting right. The good news is in year 0 or 1, you may not turn on revenue. Or if you do, it's a pretty simple revenue. So. And your costs are usually limited to your gusto account, like what your salaries are or. And like you bought some computers and maybe you got some credits from, you know, Google or Amazon and you know, maybe you're paying for some cloud as well. So you essentially take your last three months burn, you average it. Okay, so let's say you burned 50k and then you had a big month because you bought some laptops and it was 70k. And the next month you made a little more money and it went down to 40k or 30k. So you got 50, 70, 30, 150k in losses in a quarter instead of Doing it based on one of those three numbers. You just blend the three together. You say based on the last three months. Months burn rate, which is revenue minus spend. Positive or negative number. You're. If it's negative, it's a burn. If it's positive, it's your. Your Runway is infinite. And it's always great to get that email. Infinite Runway. So when you go to $1 in profit over your spend, you're now Infinite Runway. But if you had a burn of 50k a month and you have 1 million in the bank, you have have 20 months of Runway. 50,000. Your average burn for the last three months. So you say based on our average burn of the last three months, we have approximately 20 months of Runway. And I think a short overview at the top of what you do. Hi, we are Uber. We are everybody's private chauffeur. We operate in three cities. We're opening up two more cities. And then you might have team product, customers, you know, fundraising or corporate activities. And you just list two or three. Sentence of narrative. If you have a chart, you put in a chart. And then at the bottom, it's always good to put requests. Why do you put it at the bottom? You want to see who gets to the end of your rider. Famous story. Like take the brown M M's of.

[Lon]

The Van Halen, I believe is that story?

[Alex]

Yes.

[Jason]

And so they had at the bottom of their rider take out the brown M M's. Why? They wanted to make people. Make sure people got to the end of the rider. The rider being the conditions under which they would play in an arena. So here you put at the bottom things you can do to help. One, we're looking to get press in the legal press for our legal LLM solution. This includes the following journalists and whatever. Two, we're looking to fill these three positions. You can retweet that we're looking my tweet here or my LinkedIn post number three, we're going to be raising in the fall. We're looking for connections to these Series A firms. Here's a list of the company. Here's a list of the firms we've met with. Please put your name on it if you know anybody at the firm and who you know. So you'd like a call to action. Something for your investors to do monthly is great. If you do it monthly, you will have a deep, meaningful relationship with your investors. If you do a quarterly, you're going to have a great relationship with your investors. If you do it less than quarterly, your Investors might feel, unless you're just having massive success and they're seeing you do crazy fundraising and reading about your press, they might feel like maybe you're ungrateful. And the only time you do email them is when you've sent updates. So a lot of times we'll get an email, hey, we have three months of Runway and I haven't heard from the founder in a year. So we literally, you know, try to train our founders to do this. We put it in our documents. Even, like as of part. Part of our agreement, we have information rights and we'll get a quarterly update. And we like to find what we're looking for, not because we need it as much as you do, but because as the founder does, but because we want to see the founder succeed. And if you're not a good person with sending updates like I'm not, because I'm so pulled in different directions for my updates, for my venture funds, I deputize Jackie and our team, a partner at our company, to write them and send them. And if I have a time to edit them, if I don't have time to edit them, they go out from Jackie, and I'll read it when other people read it, which is actually in some ways, like, even more honest because I didn't see them. So I like the idea of even deputizing somebody on your team or two people on your team. You're responsible, Lon for the product and this, and Alex, you're responsible for this and this. And then if you're not the type of person who stays on top of these things, things you forget, deputize your other co founders or somebody on your team and say, I want you to write this update in this format by this date, have all the numbers in, and then I will write an opening paragraph. If I don't write the opening paragraph by this date, please send it. And just send it from you, the VP of operations or the general manager of the startup or the VP of product. They're really important. You don't need software to do it. You can find a million templates online. But short is better than long, and short is much better than nothing. And no numbers means no numbers means bad news. Yeah, numbers typically mean good news. So when you don't give numbers, people are just assume, oh, man, the startup is screwed, or you don't hear from people screws. A 90% chance, as I wrote in my book, like, if you don't get Updates, it's a 90% chance it's going to zero a 10% chance it's Uber or Robin Hood. But in truth, Travis sent regular updates. Even Travis sent regular updates. Why? Things were going so well. He kind of wanted to connect with investors, and he had requests of us, of things we could do to help, and he was putting us to work. So put your investors to work. Great question, and I hope that's helpful.

[Lon]

All right, I'm sure was.

[Alex]

Well, Jason, let's get you to bed. Overall there in the Middle East, Lon, you and I are going to get back to work, but this has been another this week in startups. We'll see everyone live on Wednesday. Bye. Bye.

[Jason]

Bye. Bye.

[Alex]

Bye.