Podcast Summary: This Week in Startups

Episode: What will be OpenAI’s IPO price? Place ya bets! (E2202)

Date: November 1, 2025
Host: Jason Calacanis
Guest/Co-hosts: Alex Wilhelm, Oliver, Lon Harris

Episode Overview

In this lively Halloween episode, Jason Calacanis and Alex Wilhelm dive deep into the rapidly evolving world of startups and AI, discuss OpenAI’s coming IPO and its implications, analyze the risks for developers building on major AI platforms, and explore several cutting-edge AI products, including startling demos of AI music creation and face-swapping technology. Producer Oliver joins for an extensive hands-on showcase of Suno Studio, an AI music generator, and the hosts dissect recent earnings, market trends, and some of the trickier ethical questions facing founders and early-stage investors.

Key Discussion Points & Insights

1. OpenAI, Platforms, and Developer Beware

• Jason’s Warning for Developers ([00:00] & [50:09])
  • Jason strongly advises developers not to build on OpenAI's API or Sam Altman’s platform:
    • “This is a warning…for anybody dumb enough to use Sam Altman's OpenAI API. They are studying you…like the Borg, steal every innovation they have.” ([00:00])
    • He likens Altman's approach to the “Zuckerberg school of Business,” historically co-opting innovations from the ecosystem and rolling them into the platform—much as Microsoft and Facebook did.
• Alex and Jason both discuss the platform-application tension: successful applications run the risk of being subsumed or cloned by the underlying platform provider, especially as OpenAI looks to move down the stack.

2. Prediction Markets: Brian Armstrong’s "Punk" Move ([05:08])

• Coinbase CEO Brian Armstrong gamed prediction markets during a live earnings call by explicitly stating keywords referenced in ongoing bets, causing major swings in betting charts.
  • “So punk rock Brian Armstrong is the greatest. He literally...punked the prediction markets.” ([06:09], Jason)
• The episode debates whether this constitutes insider trading and explores the implications for the fairness of prediction markets.

3. AI Demos: Face Swapping and Music Generation

Higgsfield AI Face Swap** ([08:51])

• The hosts showcase a viral AI face-swapping tool, highlighting implications for creativity, entertainment, and the entertainment industry.
• Notable moment: Jason riffs on how game-changing this is for casting directors and fan-made content:
  • “Imagine you’re the casting director, Lon. How amazing would this be?” ([12:29], Jason)

Intellectual Property (IP) Risks** ([14:05])

• Jason provides a straightforward take on IP law: using such tools for personal, non-commercial use is generally fine, but commercializing IP-owned content invites legal risk.
  • “If you released this and you said, put Leonardo DiCaprio as every Star Wars character…that's very illegal.” ([15:15], Jason)

Suno AI Music Studio Deep Dive ([21:07])

• Producer Oliver walks through Suno Studio (V5), an AI tool for automated music creation and editing (“like Ableton for AI”).
  • Suno Studio now allows users to write lyrics, select music styles, assemble tracks, and even extract or modify individual instrument “stems.”
  • Jason is clearly enthralled, having the AI generate a song about his own startup journey in the style of Dire Straits!
    • Lyrics: “Late nights, cold pizza, chasing a muse / dream stacked higher than the skyline views...”
      ([25:21], Oliver demos Suno output)
• Oliver: “For non-musicians, a tool like this really opens up the world of creating music to millions of people.” ([37:30])
• The hosts compare AI-generated music to existing DAWs (digital audio workstations), demo music editing workflows, and discuss the unprecedented accessibility for creative newcomers.

4. AI & Music Industry: Lawsuits, Settlements, and Cautionary Tales ([16:21])

• Universal Music Group and Udio settle and partner after legal dispute—Jason explains why the music industry is so aggressive:
  • “They set a trap…Once they see you have success…they’ll come after you like rabid dogs. More like in Game of Thrones, the White Walkers…They are going to come forever for you.” ([17:22])
• His advice for startup founders flirting with music IP is unambiguous:
  • “Never use their IP. Never ever touch it, not even for a second.” ([18:49])

5. Cloud & AI: Market Trends, Spending & “Grokopedia” ([39:43])

• Alex breaks down public cloud earnings:
  • “Growth at Azure for Microsoft was 40%...Google Cloud 34%...Amazon 20.2%...over at Amazon, each of the companies also said they're going to spend even more money than they thought.” ([39:43])
• Jason advocates for incumbents reinvesting cash into infrastructure, predicts prolonged cloud/AI expansion, and discusses “Grokopedia,” an LLM-generated encyclopedia linked to Elon Musk’s projects.
• Discussion pivots to whether companies like Apple, Meta, or Elon’s X should launch their own cloud services to rival AWS.

6. Startups Building Their Own AI Models ([46:42])

• Alex notes a surge in startups creating their own tailored LLMs, often retraining open-source Chinese models to reduce dependency on OpenAI or Anthropic’s margins.
• Jason reiterates platform risk, forecasting OpenAI’s inevitable encroachment on successful applications and references historical platform behavior (Microsoft, Facebook).

7. OpenAI’s IPO: Timing & Valuation Bets ([57:04])

• Reuters reports OpenAI may IPO by late 2026 or early 2027. Jason and Alex debate the likely timing and market cap.
  • Alex proposes over/under at $1.25T—Jason opts for the under, Alex the over.
    ([58:36], Alex & Jason)
• Jason’s rationale: OpenAI will need to vertically integrate and own businesses to maintain growth and justify the massive infrastructure spend.
  • “If you're using them, you're enabling your own demise.” ([54:21], Jason)

8. Recent IPOs & Market Sentiment (Navan/TripActions) ([59:24])

• Navan’s IPO (formerly TripActions) went out at a $6-7B valuation and dropped 20% on the first day.
• The hosts analyze the lack of IPO “pop”:
  • High but justifiable price-to-sales ratio, solid revenue growth, but unprofitable—likely explaining investor caution and underperformance.
• Jason compares the opportunity cost: why buy newly public SaaS if Google/Amazon are accelerating thanks to AI?

9. Founder/Investor Trust & Bad Behavior in Early-Stage Startups ([66:43])

• Discussion on founders abusing trust structures like SAFEs and failing to properly use invested funds:
  • Jason: “The safe is so in favor of founders…bad actors in the system. In a peak market, you see bad behavior go up…” ([67:37])
• Jason’s “stump speech”: never abuse early investors, cherish your backers, and play the long game.
  • “The best part of life, people, is when you can build a 10, 20, 30 year friendship where you just collaborate on everything and you win and sometimes you lose. But if you lose, you learn something.” ([73:20])
  • “If you want to go fast, go alone. If you want to go far, go together.” ([77:09])

Notable Quotes & Memorable Moments

• Jason Calacanis, on platform risk:
  “If I was a developer of any kind, I would never work with Sam Altman and OpenAI. This is a warning…They are studying you…like the Borg, steal every innovation…” ([50:09], [00:00])

• On AI face-swapping tools:
  “Imagine you’re the casting director, Lon. How amazing would this be?” ([12:29], Jason)

• On music industry caution:
  “Never use their IP. Never ever touch it, not even for a second. In fact, only hire work-for-hire musicians…” ([18:49], Jason)

• On AI music creation:
  “For non-musicians, a tool like this really opens up the world of creating music to millions of people.” ([37:30], Oliver)

• On OpenAI’s competitive moves:
  “Wake up, people. You're going to see them go after every single vertical…They're going after everyone. Wake up, Wake up. If you use their API, you're educating them as to how many tokens you use.” ([54:52], Jason)

• On founder/investor trust:
  “Cherish the early investors. Act with honor. And then you will be in a situation like I am…This is the best part of life, people…If you want to go far, go together…” ([72:09], [77:09], Jason)

Timestamps for Key Segments

• 00:00 – Jason's opening warning to developers about OpenAI & platform risk
• 05:08 – Brian Armstrong games prediction markets
• 08:51 – Higgsfield AI face swap demo and IP discussion
• 14:05 – IP risks with AI media tools
• 16:53 – AI music industry deals/lawsuits
• 21:07 – Suno AI music studio demo with Oliver
• 39:43 – Cloud earnings, infrastructure investment, and Grokopedia
• 46:42 – Startups training their own models and escaping platform risk
• 50:09 – Jason’s emphatic platform warning redux
• 57:04 – Jason & Alex’s OpenAI IPO bet discussion
• 59:24 – Navan IPO analysis
• 66:43 – Founder/investor trust breaches with SAFEs
• 73:20+ – Jason’s reflections on ethics, loyalty, and long-term relationships in tech

Concluding Notes

The episode is a whirlwind of insight on the intersection of AI, startups, platform risk, and the social dynamics of entrepreneurship.
Jason is in classic form: blunt (“It’s a trap. Don’t use their API!”), humorous, and passionate about founder ethics.
The hands-on AI demos (face swapping, AI music) underscore just how rapidly the landscape for startups and creative tools is changing, while recurring discussions of trust and platform power serve as a caution to builders everywhere.
For founders, investors, and technologists, this episode is both a warning and a call to be strategic, thoughtful, and loyal as the next tech wave crests.

Listen if you want:

• Sharp takes on how OpenAI is changing the rules for developers
• Insider perspectives on music, AI, and IP law
• Deep (and fun) demos of the latest generative AI tools
• Tactical lessons for building and investing in startups in 2025 and beyond

Skip if you want:

• Ads, news intros, or background—this summary avoids those and focuses on the substance.