Elon vs OpenAI, Ads in ChatGPT, Leaked Tech Emails | Sean Frank, Bill Shufelt, Alex Mashrabov, Sonya Huang & Pat Grady

Sign up for TBPN’s daily newsletter at TBPN.com (02:30) - Elon vs OpenAI (58:16) - Ads in ChatGPT (01:11:57) - WSJ Mansion Section (01:28:54) - Bill Shufelt, a former hedge fund trader and ultramarathon runner, co-founded Athletic Brewing Company in 2017 to create high-quality non-alcoholic craft beers that cater to health-conscious consumers. In the conversation, he discusses his transition from finance to brewing, the development of a proprietary brewing process to produce flavorful non-alcoholic beers, and the company's rapid growth, including becoming the top-selling non-alcoholic beer in the U. S. (02:00:04) - Sonya Huang, a partner at Sequoia Capital, discusses the current state of artificial general intelligence (AGI), emphasizing that AGI has arrived and urging founders to leverage existing technologies to address real-world problems. She highlights the evolution of AI capabilities, noting recent advancements in long-horizon agents that can persist and iterate towards outcomes without constant supervision. Huang also touches on the shift from product-led growth to agent-led growth, where AI agents autonomously select and utilize the best tools and services, potentially transforming traditional business models. (02:31:46) - Sean Frank, CEO of Ridge Wallet, discusses the company's eagerness to advertise on OpenAI's ChatGPT platform, highlighting the high revenue per user from AI-driven traffic compared to traditional sources. He expresses optimism about the potential of ChatGPT ads to deliver high-intent customers and anticipates that the introduction of ads will further boost organic activity, leading to increased site visits and sales. Frank also touches on the evolving landscape of e-commerce, noting the importance of adapting to new advertising platforms and the potential impact on traditional website traffic. (02:56:05) - 𝕏 Timeline Reactions (03:14:14) - Alex Mashrabov, CEO and co-founder of Higgsfield AI, discusses the emergence of AI-native social media agencies that create commercial ads end-to-end using AI, highlighting the efficiency and personalization this approach offers. He notes that Fortune 500 brands are increasingly hiring smaller agencies that utilize Higgsfield's platform to produce customized ads, enabling the creation of thousands of videos at a cost below $1 per video. Mashrabov also addresses the challenges posed by the growing size of video models, which are expected to exceed 100 billion parameters, and emphasizes the importance of integrating performance data to optimize content creation through reinforcement learning. TBPN.com is made possible by: Ramp - https://Ramp.com AppLovin - https://axon.ai Cognition - https://cognition.ai Console - https://console.com CrowdStrike - https://crowdstrike.com ElevenLabs - https://elevenlabs.io Figma - https://figma.com Fin - https://fin.ai Gemini - https://gemini.google.com Graphite - https://graphite.com Gusto - https://gusto.com/tbpn Labelbox - https://labelbox.com Lambda - https://lambda.ai Linear - https://linear.app MongoDB - https://mongodb.com NYSE - https://nyse.com Phantom - https://phantom.com/cash Plaid - https://plaid.com Public - https://public.com Railway - https://railway.com Restream - https://restream.io Shopify - https://shopify.com Turbopuffer - https://turbopuffer.com Vanta - https://vanta.com Vibe - https://vibe.co Sentry - https://sentry.io Cisco - https://cisco.com Follow TBPN: https://TBPN.com https://x.com/tbpn https://open.spotify.com/show/2L6WMqY3GUPCGBD0dX6p00?si=674252d53acf4231 https://podcasts.apple.com/us/podcast/technology-brothers/id1772360235 https://www.youtube.com/@TBPNLive

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00John Coogan?

  You're watching TVPN. Today is Friday, January 16th, 2026. We are live from the TVPN Ultra Dome, the temple of technology.

• 0:09Jordi Hays?

  The fortress of finance.

• 0:11John Coogan?

  The capital of capital. El capital de capital. Let's tell you about Ramp. Time is money, baby. Save both. Easy use corporate cards, bill payments, accounting and a whole lot more, all in one place. It is the goat of fintech, a fintech goat. Bunch of news today. Lots of people dropping stuff on Fridays. What's the meaning behind that? I don't know, but we'll take you through it. Lots of AI news, lots of OpenAI news because there's new details, new discovery in the OpenAI versus Elon Musk lawsuit that's heating up.

• 0:48Jordi Hays?

  There's a whole bunch of scoops. Greg was waiting for.

• 0:51John Coogan?

  Yes, for sure. For sure. There's a lot of crazy quotes.

• 0:57Jordi Hays?

  We're gonna go, we're gonna go through it all.

• 0:58John Coogan?

  Yeah.

• 0:59Jordi Hays?

  Cause it's part of our job.

• 1:00John Coogan?

  We're gonna go through both sides. We're gonna do the steel man for Sam, the steel man for Elon.

• 1:05Jordi Hays?

  Yeah, I would just say I have, I have a lot of sympathy for Greg. This is like a night, you know, having your personal diary.

• 1:12John Coogan?

  It is sort of crazy. I mean, do we know it's his diary? We'll see. Elon's calling.

• 1:17Jordi Hays?

  Framing it as a diary.

• 1:18John Coogan?

  I think, I think you had the best take of the day so far, which is that this is the Super Bowl for Nick on X.

• 1:26Jordi Hays?

  Nick on X.

• 1:26John Coogan?

  N I K is having the best day of his life.

• 1:29Jordi Hays?

  Number one hater for three years back to back.

• 1:33John Coogan?

  He's having a great time. Anyway, let's take you through the linear lineup, tell you who we're having on the show today. Linear, of course, is the system for modern software development. Seventy percent of enterprise workspaces on linear are using agents now and we will be having the co-founder and CEO, the founder and CEO of Athletic Brewing. We got the Athletic Brewing beers here in the studio.

• 1:57Jordi Hays?

  We got a lot of them.

• 1:58John Coogan?

  Pat Grady and Sonya Wong from Sequoia Capital coming on. They're co-authors of 2026. This is AGI. Then we have Sean Frank, Emergency Podcast. They put ads in ChatGPT, so we're calling the god of ads himself, Sean Frank, the CEO of Ridge. And then Alex from Higgs Field's coming back on the show to give us a little update.

• 2:18Jordi Hays?

  They just hit 200 million of ARR.

• 2:20John Coogan?

  Absolutely.

• 2:21Jordi Hays?

  One of the fastest growing.

• 2:22John Coogan?

  So we're very excited for our guest, but we have about 90 minutes here to lock in, talk about the two sides of the Elon versus OpenAI lawsuit. So let's kick it off with the Elon should lose side of the argument. I'm going to be steel manning Sam, steel manning Greg. They did nothing wrong. Elon's wrong. He needs to back down.

• 2:42Jordi Hays?

  Do you want your helmet?

• 2:43John Coogan?

  I need the steel man helmet for the whole thing. It might be too much. Maybe let's put it on the turbo puffer, but we'll just let everyone know that we're steel manning like crazy. Put it on the puffer.

• 2:51Jordi Hays?

  I'll wear it.

• 2:52John Coogan?

  Okay, you can, you can wear it. Before we do, let me steel man some super intelligence cloud, specifically Lambda. Lambda is the super intelligence cloud, building AI supercomputers for training and inference that scale from one GPU to hundreds of thousands. So, okay, Elon made a donation to a nonprofit organization. He got a tax write-off on that donation and that nonprofit, OpenAI, the nonprofit, it's now one of the best funded nonprofits in history. And it's still focused on the original mission. OpenAI, the nonprofit, it still exists. It has a, just a tiny hundred plus billion dollar position in a for-profit company.

• 3:35John Coogan?

  They're going to be able to do nonprofit stuff forever, whatever they want to do. If they want to hire researchers, if they want to write white papers, if they want to train their own models, the OpenAI nonprofit can do that. It's funded. Elon donated roughly $38 million alongside other donors who put in 90 million. There's some debate over how much Elon put in. I saw one report that was around 45. It's in the tens of millions of dollars. And he was a large donor.

• 3:59Jordi Hays?

  According to, according to OpenAI, they believe that, I think their sort of optimistic belief is that the damages would be $38 million.

• 4:07John Coogan?

  If they lose.

• 4:08Jordi Hays?

  The original donation.

• 4:09John Coogan?

  If they lose. But I'm arguing right now that they're going to win. They're going to win. The jury is going to say not guilty. OpenAI did nothing wrong, and here's why. So. Elon, yeah, he was a big donor. He put up tens of millions of dollars, but to play out the counterfactual, it's entirely reasonable to assume that things would have played out exactly the same, even if Elon was never in the picture, even if he never donated. Sure, I mean, the office would have had to be a little bit smaller. You're working with, you're working with 90 million instead of 120 million. But we've seen folks raise 90 million Series Bs. We've seen folks raise 120 million dollar Series Cs. Roughly the same company, you know, you, you pay people a little bit less, you have a few, few less perks, the office snacks aren't as good, maybe you skimp on the 45 pound plates, you

• 4:54John Coogan?

  just get the 10 pound plates. These things happen. So if Elon had never donated, maybe Sam would have just stepped up his donation. He put in 10, he put in 10. You know, maybe he goes and leverages something.

• 5:06Jordi Hays?

  Eight-figure nonprofit club.

• 5:06John Coogan?

  Yeah, yeah, he put, he put in 10. He could have potentially sold more stock that he owned, taken a loan, sold property, put the McLaren F1 up for sale. That's another 20 million dollars he could pour in. He could have filled that gap, or he could have hit the, he could have hit the road. He's a good fundraiser. He could have gone out and gotten money from a variety of people. Reid Hoffman, Peter Thiel, Dustin Moskowitz all put in money. There are more tech billionaires in that crowd that could have written a 1 million dollar check. So Sam could have gotten 34 1 million dollar checks and, and filled the gap. So it's not like if, if, if Elon didn't donate, he wouldn't have, like OpenAI wouldn't exist, right? It's totally possible that everything would have been the same and that

• 5:49John Coogan?

  the Elon donations were not make or break for AI, for OpenAI. So Elon should lose this case because everyone around the table came to the same realization at roughly the same time about the goal of creating AI responsibly. Basically, scaling laws ensured that AI progress would require vastly more capital than could ever be raised through donations. At a certain point, if you need 100 million dollars for a nonprofit, you can do it if you're aligned with some of the world's richest people in tech, like Elon, Peter Thiel, the other folks that I mentioned. At the, on the flip side, if you need 100 billion dollars or you need 50 billion dollars, like OpenAI has already raised in the venture markets, that's just not going to happen in the.

• 6:33John Coogan?

  In the nonprofit sector, except it could have because if Elon really believed in the nonprofit mission and really said nonprofit or bust, yes, I see the scaling laws. Yes, I agree. We'll need an insane amount of capital to get to AGI. Well, guess who has an insane amount of capital? Elon. If he wanted to, he could have said, yes, I'm staying with the nonprofit strategy and I'm going to put up the 50 billion. Every dollar that OpenAI has raised in the venture markets could have been a dollar donated by Elon Musk if he sold down all the positions. Now it's crazy. Never going to happen. Doesn't make any sense. Obviously, we're pro like, I think the nonprofit transition makes a ton of sense in the context of raising that amount of money. I think that's a reality. And truthfully, I think that everyone around the table agreed about that. And so

• 7:17Jordi Hays?

  Yeah, one thing that seemed clear here is there were a variety of different paths, but clearly a lot of big personalities in the room, a lot of ego, and it makes sense that eventually that just kind of blew up.

• 7:29John Coogan?

  Yeah. Yeah. And so even if you were going to keep funding the nonprofit, you're going up against Google. They have an economic flywheel that will provide the amount of capital required to advance AI, build massive, they're a hyperscaler. They're going to build massive data centers. They're not going to have a problem with this. Google was set up to make investments at this level, at 10 billion of CapEx. Google's not blinking. The shareholders are all thumbs up on that.

• 7:54Jordi Hays?

  Yeah, and remember when Sam was texting Elon, I think this was in 2023, saying like, it pains me to see you attack OpenAI publicly. I think we can both agree it's important that Google doesn't own AI. And that's been one of the only things that throughout this whole process, they've stayed in agreement on.

• 8:15John Coogan?

  Yes, yes. So they want to create a counterbalance to Google specifically. And Elon actually agreed with this as they were shifting from maybe the nonprofit's not the ultimate way to win this AI race, this AI battle, this AI future. Because Elon agreed, according to Greg Brockman in emails, that he said, he being Elon, said nonprofit was def the right one early on, the right structure at the beginning, but may not be the right one now. So According to these leaks, it seems like Elon wasn't always all in on the nonprofit. He was maybe open to the idea of a for-profit and of course, that was a fork in the road.

• 8:59John Coogan?

  Elon did actually have the money to continue supporting OpenAI as nonprofit. It would have been crazy, but technically could have sold down positions. But Elon clearly agreed that OpenAI should build a for-profit and that's why he wanted equity. He wanted to be CEO. He was interested in OpenAI joining Tesla. Tesla's a for-profit. He wasn't saying, "We're going to bring OpenAI over to Tesla and the whole thing's going to be a nonprofit." Clearly Elon is no purist about nonprofit AI research. He runs XAI. It's a direct competitor to OpenAI. He started it as a benefit corporation, which meant it had an obligation to deliver environmental and social benefits. But after the merger with X, that benefit corporation status was dropped entirely. This whole lawsuit is clearly just corporate lawfare and the battle should be fought out

• 9:42John Coogan?

  in the financial markets, in the App Store, on the open internet, not the courtroom. Let the best product win. Let the best AI model win. Let the best team win. And so, let's wrap this court case up and let OpenAI go and compete it out. They're fighting a war on five different fronts. Let them build, let them cook.

• 10:05Jordi Hays?

  Yeah, and it's worth noting that this is what winning, like today is what winning looks like for Elon. If he gets the damages awarded and he gets 38 million dollars, he's like, "Nice. I can fund XAI for a week."

• 10:23John Coogan?

  Maybe not even a week.

• 10:25Jordi Hays?

  Or even if he gets some points in OpenAI, right? He's like, "Great. This is not a material jump in my net worth or in my influence or power, whatever he's looking for. This doesn't really get me one step closer to Mars, right? It doesn't necessarily align." So the win state right now is just being disruptive, right? Basically buying XAI time, putting OpenAI in a position where they are trying to go public, right? And they've got this massive, high-profile trial going on.

• 11:00John Coogan?

  The helmet is really adding a lot to this conversation. I love it.

• 11:06John Coogan?

  The chat loves it too. Jordan in the night helmet is what winning looks like.

• 11:10Jordi Hays?

  Yeah, so anyways, I was thinking.

• 11:12John Coogan?

  Yeah, let me tell you about Plaid. Plaid powers the apps you use to spend, save, borrow, invest, and securely connecting bank accounts to move money, fight fraud, and improve lending. Now with AI, we have fireworks today.

• 11:25Jordi Hays?

  Fireworks for Plaid.

• 11:26John Coogan?

  I love it. I love.

• 11:27Jordi Hays?

  Plaid gets me fired up. This, this kind of, uh, this reminded me today of the Deal Rippling lawsuit. Where like, the actual win state for this like Deal Rippling lawsuit is just Rippling, like, like being a somewhat of an annoyance, right? Both companies are going to continue.

• 11:46John Coogan?

  Yeah, yeah, yeah.

• 11:47Jordi Hays?

  There's no amount of money that's going to make Parker like happy, right? But what, what will like probably make him happy is just like making it harder for Deal to go public.

• 11:57John Coogan?

  Yep. Right? Yeah. Did you see that line that apparently they were talking to Elon in one of these like leaked emails? And Elon's like, I don't really care about money, uh, but I do need, I do need $80 billion just handy in my back pocket for a city on Mars. It's like, it's like the most extreme being like, yeah, like I'm, I'm, I'm basically post economic, but there's like one more thing that I'm reaching for and it just happens to be $80 billion, like more liquidity than anyone has ever had in history. And I just need it ready to go for when I land on Mars and want to build.

• 12:33Jordi Hays?

  I just need about 80 billion liquid.

• 12:35John Coogan?

  Just liquid.

• 12:36Jordi Hays?

  Liquid.

• 12:36John Coogan?

  It would fix me. He says 80 billion liquid would fix me.

• 12:40Jordi Hays?

  In fact, even then I moved back to California because even if they're doing a 1% a year, right? I can, I'm probably good.

• 12:46John Coogan?

  Okay. Now let's argue the flip side. Elon Musk will win the OpenAI lawsuit. And before we tell you how and why Elon will win the OpenAI lawsuit, I'll tell you about Consol. Consol builds AI agents that automate 70% of IT, HR and finance support, giving employees instant resolution for access requests and password resets. Um, so.

• 13:11John Coogan?

  Elon will win the OpenAI lawsuit and he should, and he should, he should win this. Judge Gonzalez Rogers already rejected OpenAI's motion to dismiss. OpenAI wanted to throw this thing out and the judge said no. The judge said, I think there's plenty of evidence that something happened here. Yes, it's all circumstantial, but that's how these things work. OpenAI was trying to kill the case before the trial even started. They're trying to, they're trying to get rid of this thing, but it's clear that Elon is on to something here. Okay, just look at the emails, just look at the emails. It's so obvious that the OpenAI squad was trying to fleece Elon and push him out without giving him a fair share. Elon said, guys, I've had enough. This is a direct quote from Elon email. Guys, I've had enough.

• 13:56John Coogan?

  This is the final straw. Either go do something on your own or continue with OpenAI as a nonprofit. Otherwise I'm out, I'm not donating anymore. You guys, if you're gonna do the for-profit, just go start a normal company and wind this thing down. And that makes a ton of sense. It was an open invitation by him to just go build a traditional venture-backed company.

• 14:17Jordi Hays?

  And this is part of the trial, part of the trial in this proceeding that I'm interested in is like finding out why they didn't just do that.

• 14:23John Coogan?

  Yeah.

• 14:24Jordi Hays?

  It's not like Sam and Greg couldn't have been like, cool, we worked on a nonprofit for a while.

• 14:27John Coogan?

  How do we set up a C corp?

• 14:28Jordi Hays?

  How do we set up a C corp? Oh, Sam's like, oh, I own like a couple points of Stripe.

• 14:34John Coogan?

  Yeah.

• 14:34Jordi Hays?

  I think they have something called Atlas, you can just make a C corp.

• 14:37John Coogan?

  Maybe he forgot.

• 14:38Jordi Hays?

  A few clicks, maybe he just forgot.

• 14:40John Coogan?

  He's just, oh, I probably remembered about Atlas.

• 14:43Jordi Hays?

  If there was, if there was like a very, very specific reason.

• 14:46John Coogan?

  Yes.

• 14:46Jordi Hays?

  Like the nonprofit had developed some IP at that point.

• 14:49John Coogan?

  Yeah.

• 14:50Jordi Hays?

  That meant that starting over or, or, you know, having to rebuild a team or whatever factor meant that that was like gonna set them back years.

• 14:58John Coogan?

  Yes.

• 14:59Jordi Hays?

  That's, that's a big, that's a big deal.

• 15:00John Coogan?

  Yeah, and realistically, even, like you, you can't, there's no indentured servitude. You can't keep nonprofit employees working there.

• 15:10John Coogan?

  The workhorse.

• 15:11Jordi Hays?

  Two point, two point six.

• 15:12John Coogan?

  At OpenAI.

• 15:13Jordi Hays?

  Need his horse.

• 15:14John Coogan?

  Ilya, Ilya Sutskevich.

• 15:15Jordi Hays?

  Button, please.

• 15:15John Coogan?

  Ilya was the workhorse at OpenAI. And you needed him to keep the excitement, keep working. He developed a ton of the foundational technologies at OpenAI. And if he wanted to work at a nonprofit and you say, hey, we're leaving to go do a for-profit, come over here, who knows if he's gonna come? And that, that applies to tons of different researchers that were instrumental in the development of what ultimately became ChatGPT and GPT three and four. And so Elon gave them an invitation. Just go out and build a traditional venture-backed company. Maybe I'll invest, maybe I'll be involved, maybe I won't, but at least we'll have a clean slate to start from. It would have been trivial to set up a new entity, as we discussed. You could start building a team and then you run the classic venture playbook.

• 15:59John Coogan?

  But Sam told Elon that he remained, quote, enthusiastic about the nonprofit structure. That was enough to get Elon to donate more. But OpenAI wasn't all in on staying in nonprofit mode. They were on the cusp of restructuring OpenAI and taking the $10 billion investment from Microsoft. The reality, see, the reality of modern philanthropy, it, it's not fire and forget. You don't, big donors like Elon, in this case, do have specific intentions and conditions attached to the gifts. It's not like he's just throwing 20 bucks in the Salvation Army donation box around Christmas. This is 30 something million.

• 16:41John Coogan?

  If you give that to a university and you want a building, they need to build that building. They probably need to build it to your specifications, even if you want no windows.

• 16:49Jordi Hays?

  Put your name on it.

• 16:50John Coogan?

  Yeah, they might even put your name on it. And, and you can, and you can dictate these things in a nonprofit donation and you can ask that they, that, that the donation is contingent on those results. You can, you can pursue specific directions. You have, he has every right to demand results.

• 17:05Jordi Hays?

  Yeah, meanwhile, you know, during this whole period, Greg is writing to himself allegedly that he cannot say we are committed to the nonprofit, don't want to say that we're committed if three months later we're doing B Corp and it was a lie.

• 17:19John Coogan?

  Yeah.

• 17:19Jordi Hays?

  And then later saying, can't see us turning this into a for-profit without a very nasty fight. His story will correctly be that we weren't honest with him in the end about still wanting to do the for-profit just without him.

• 17:33John Coogan?

  Yeah. Before we continue our defense of Elon, let's tell you about cognition. They're the makers of Devon, the AI software engineer. Crush your backlog with your personal AI engineering team. So a big part of this, if and why Elon is going to win, why he should win, is that you can't just have corporate structure remorse, OpenAI. You can't pull the plug on promises made. OpenAI's own certificates of incorporation talk about creating a company, quote, "exclusively for charitable purposes, with the technology being intended to benefit the public." What's exclusively charitable about raising venture to build a subscription app with ads? That's not charity.

• 18:17John Coogan?

  Why, why are you doing that? Elon's right. Not only should Elon win this case against OpenAI, he will win this case. It's simple. A bunch of people, a bunch of San Francisco elite tech guys, their fancy cars, promise to build AI for humanity. They took $38 million from one of their co-founders based on that promise, then turned around and built a $500 billion for-profit empire with Microsoft. It's a straightforward bait and switch story that will play well to 12 regular jurors in Oakland. And so that's the case.

• 18:50Jordi Hays?

  I mean, this is, this is going to be the big challenge, finding, finding 12 regular people in Oakland.

• 18:55John Coogan?

  Extremely offline.

• 18:58Speaker 02

  How illegal is it to try to be on a jury?

• 19:02John Coogan?

  Extremely. Stop trying to get on the jury.

• 19:04Jordi Hays?

  Stop trying to get on the jury.

• 19:05Speaker 02

  Look, I said this, I'm going to vote, I'm going to vote in favor of whoever has the higher Arc AGI score.

• 19:09John Coogan?

  Okay.

• 19:10Speaker 02

  I'm just pro AI progress.

• 19:11John Coogan?

  Yes, yes, yes.

• 19:12Speaker 02

  I don't care at all about who wins. I just want better models.

• 19:15John Coogan?

  You just want better AI.

• 19:16Speaker 02

  Yeah.

• 19:17John Coogan?

  Whoever will build, whoever's scaling faster. Well, then I think you go with OpenAI. They have, they have 50 billion in the bank.

• 19:22Jordi Hays?

  Dan in the chat, Dan in the chat is ready to be a juror. We gotta get, we gotta get somebody in the chat.

• 19:29John Coogan?

  Somebody in the chat, gotta get, yeah, just have. Live tweeting the jury. Get on in the corner while you're in the jury, just like, hey, guys, yeah, in the chat. Yeah, I, I, I don't know. I mean, this, this is incredibly dramatic. We're going to hear a bunch of crazy storylines, learn a lot about the internal mechanics of both the Elon empire and OpenAI's world. But at the end of the day, you know, OpenAI is signaling to investors, hey, the, the max damage is going to be 38 million, something like that.

• 19:59Jordi Hays?

  They did say it could be more.

• 20:00John Coogan?

  It could be more.

• 20:01Jordi Hays?

  Of course, it could always be more.

• 20:02John Coogan?

  It does. It does feel like it won't be existential. And it feels like it's more of a vibe war than maybe a true economic war. I mean, you could, you could go back and argue that Elon should get pro Rata equity at what was effectively like a pre-seed round that was done as a nonprofit. And that's 38 out of 120 that was raised in the nonprofit, something like that. So you give him, you give him 25.

• 20:29Jordi Hays?

  Is there any precedent for a company going for a blockbuster IPO while having this lawsuit that is really going at the foundation of the entity itself? Right? You can imagine a company going public where they're in some process, legal process with a former executive or a specific customer or even, even a lender on some, you know.

• 20:56John Coogan?

  I can't think of anything, I can't think of anything this big ever happening. But OpenAI is a unique company. And if anything, it's going to draw a lot of attention to the, to the company and.

• 21:08Jordi Hays?

  Yeah, from, it's interesting from, from, from like the retail investor crowd. I think they're, I think they're still going to be happy to be in this company.

• 21:18John Coogan?

  Yeah.

• 21:18Jordi Hays?

  Even if there's like, even if this is all not settled. But it's really a question of like, is Wall Street going to be on board?

• 21:25John Coogan?

  I think Wall Street will underwrite it as there's a, there's a potential settlement that could be in the tens of millions, it could be in the billions. But at the same time, you just calculate an expected value, take that off the valuation that you've built up. And if you're bullish on the long-term value and cash flow of the business, like you buy anyway. I, I think that's sort of what happens. Tyler?

• 21:49Speaker 02

  Okay, so I've been reading through some of the documents.

• 21:51John Coogan?

  Yeah.

• 21:53Speaker 02

  And so I just want to like add some, some other like details.

• 21:56John Coogan?

  Please.

• 21:56Speaker 02

  So one thing is, like, I think, I'm reading through, like, you can actually see the arguments being made.

• 22:02John Coogan?

  Hmm.

• 22:02Speaker 02

  One of them is from the defense of OpenAI and that it's, that Elon actually didn't directly donate to OpenAI.

• 22:10John Coogan?

  Hmm.

• 22:10Speaker 02

  It was basically indirectly through a donor advised fund.

• 22:14John Coogan?

  Okay.

• 22:14Speaker 02

  And through OpenAI's fiscal sponsor, YC. And so because it's not direct, the idea of like the.

• 22:22Speaker 02

  The the specific charitable purpose doesn't actually like doesn't hold up.

• 22:28John Coogan?

  Okay.

• 22:29Speaker 02

  And that it actually just defaults to like OpenAI's.

• 22:32John Coogan?

  Yeah, because like he donates to one entity and then that entity would have to make that claim. So their direct communication doesn't necessarily hold as much weight.

• 22:38Speaker 02

  And then so there's like, there's a bunch of pages about the history of like how you actually define these things. So it seems like it's going to be just come down to like extremely like esoteric legal definitions of like trusts.

• 22:51John Coogan?

  Well, I think we're out of steel man mode. Jordy, of course, dons the steel man helmet whenever he's trying to steel man an argument. Uh, we thank you for putting up with our shenanigans and our props. Uh, let me tell you about vibe.co where D to C brands, B to B startups and AI companies advertise on streaming TV. Pick channels, target audiences and measure sales just like on Meta. And speaking of ads, there's ads in chat GPT. I liked Rigob in the chat saying they're putting ads in chat GPT to help fund the trial. Oh, sorry, that was actually Dave, but uh, Rigob did say OpenAI is nothing without its losses, which I think is very funny.

• 23:25Speaker 02

  Uh, you want to know?

• 23:27John Coogan?

  Let's go through some, let's go through some of the leaks, let's go through some of the ad details. We also have Sean Frank from Ridge joining to break down the ad landscape, whether he will be advertising Ridge wallets in chat GPT anytime soon.

• 23:39Jordi Hays?

  Yeah, part, part of the, the last thing I would say there is part of OpenAI's defense is that, uh, through their actions, they've created one of the most well capitalized foundations in history.

• 23:51John Coogan?

  Yeah.

• 23:51Jordi Hays?

  Right? And I think that they're going to continue to lean on that. Novo Nordisk has a foundation themselves focused on biomedical research. And it's like, it has, the estimate is that they have a hundred and sixty seven billion dollars.

• 24:02John Coogan?

  Okay. And so that's why we, that's why we're using the term one of the best funded, because it's possible that the OpenAI nonprofit might not be the best funded in history. Although if the stock continues to rip, uh, they will probably become the best funded in the, uh, in, in history. Uh, well, there's a whole bunch of leaks, news in the timeline. There's so many documents that hit the timeline that it brought down all of X and X actually crashed because so many people were logging on to read the Brockman files.

• 24:30Jordi Hays?

  Yeah, and there's, there's one more, uh, there's one more quote that's, that's worth reading through, which is that, uh, from, from the Greg files, from Greg Gate. Uh, another realization from this meeting is that it'd be wrong to steal the nonprofit from him to convert to a B corp without him. That'd be pretty morally bankrupt. He's really not an idiot.

• 24:51John Coogan?

  Yeah, I mean, but that sounds like, you know, they they were like, it would it would be wrong to do that and and by their admission, like, they would argue that they didn't steal it from them.

• 25:01Jordi Hays?

  The funny thing in here, the funny thing in here is like the, and and again, I love Greg and I feel bad that this is all coming out.

• 25:10John Coogan?

  Yeah.

• 25:10Jordi Hays?

  But his like, very millennial coded writing.

• 25:13John Coogan?

  Yeah.

• 25:14Jordi Hays?

  Brockman further wrote under the heading, our plan, quote, "It would be nice to be making the billions."

• 25:20John Coogan?

  Okay, I didn't see that one. That's a funny one. I do think that there's a there's a there's a very odd wrinkle where Elon didn't invest in the for-profit when any when any of those rounds were going, like, the ships were so thoroughly burnt to a crisp that even when even when the new for-profit was doing the round, he was not, there's, at least, we haven't seen a lot of emails or evidence saying like, whoa, whoa, whoa, don't go with Microsoft, like, at least give me write a first refusal, let's do this at Tesla and and and I'll be I'll be the financier and I'll take the equity. Like, I I'm bullish on this. And, you know, you don't have to. I don't know how much that plays into the actual court case, but it is interesting just seeing like, like, once the ships were

• 26:03John Coogan?

  burned and the and the bridges were burned and the paths started to diverge, like, they never really re resolidified. And you would think that, you know, if you wanted to continue, you would you would try and build a position one way or another, get some cap table ownership. It is it is odd that we're in a situation where Elon has zero equity in in OpenAI, in the OpenAI for-profit, where there were clearly many opportunities to get exposure. But, again, bad blood, so who knows, maybe.

• 26:32Jordi Hays?

  At least Greg didn't go in front of Congress and say, I'm just doing this because I love it.

• 26:37John Coogan?

  Yeah.

• 26:37Jordi Hays?

  Because that would make the these other notes on, it would be nice to be making the billions.

• 26:42John Coogan?

  Yeah. But, oh, yeah, for sure. But the the the other interesting thing is that, do we know where Sam Altman sits in terms of equity? It's been going back and forth, yeah, seven.

• 26:53Speaker 02

  There isn't a number, but in one of the documents, I I lost it. But it said he had indirect exposure via YC.

• 26:58John Coogan?

  Okay, okay.

• 26:59Speaker 02

  Yeah.

• 26:59John Coogan?

  Into the for-profit as well?

• 27:01Speaker 02

  Uh, yes.

• 27:01John Coogan?

  Okay, so look through exposure there. But then in terms of like, an actual grant, is there a number that's been thrown around?

• 27:08Jordi Hays?

  To my knowledge, nothing has been. Shared publicly, other than the sort of idea of him getting around 7%.

• 27:15John Coogan?

  Okay, okay.

• 27:15Jordi Hays?

  But.

• 27:16John Coogan?

  Yeah, that still feels low for for a co-founder of a, you know.

• 27:20Jordi Hays?

  No, but that was happening, that that's like, that's like, a lot of pollution had happened.

• 27:24John Coogan?

  Yeah, no, makes sense, makes sense. But, you know, it it it certainly doesn't feel like the Mark Zuckerberg or the Bill Gates or the, you know, or the Jeff Bezos scenario.

• 27:33Jordi Hays?

  I mean, yeah, if anything, these, um.

• 27:36John Coogan?

  Yeah.

• 27:37Jordi Hays?

  These files make a lot of Elon's kind of antics, like, more understandable.

• 27:42John Coogan?

  Sure.

• 27:43Jordi Hays?

  Like, he's been the one saying that they're morally bankrupt.

• 27:46John Coogan?

  Hmm.

• 27:46Jordi Hays?

  And here, they just straight up say it would be pretty morally bankrupt to

• 27:51John Coogan?

  Yeah.

• 27:51Jordi Hays?

  steal the nonprofit from him.

• 27:53John Coogan?

  Yeah.

• 27:54Jordi Hays?

  Like.

• 27:55John Coogan?

  Yeah.

• 27:56Jordi Hays?

  I don't think anyone ever expected their, that that language come out, came out, that was this specific about their moment to moment thinking during that point in time.

• 28:07John Coogan?

  Yeah, what what's the phrase that Elon uses? Scam default man?

• 28:13John Coogan?

  Scamuel, scamuel default man?

• 28:19John Coogan?

  The timeline is really so stupid. The portmanteaus.

• 28:25John Coogan?

  But, I mean, one thing that is that is real is that it's very clear that, like, at some point, the the core OpenAI team was like, it's either, it's either like Elon as CEO, financial backer, like, complete control, like, Greg Brockman said, this is the only chance we have to get out from Elon. Is he the glorious leader that I would pick? We have, we truly have a chance to make this happen financially. What will take me to 1B? Which is interesting, because, like, there are definitely people that have been taken to 1B alongside Elon, with Elon in the glorious leader seat. Like, there are people on the Tesla train, there are people

• 29:02Jordi Hays?

  Yeah, was he not?

• 29:03John Coogan?

  SpaceX train, that where where where truly, like, they are completely hands off. Elon is the glorious leader of those companies. They don't have any control over Elon. But Elon has given them effectively billions and billions through either their direct work with the company or their investment in the company. Like, there's a whole bunch of ways that those two things could actually be very compatible.

• 29:24Jordi Hays?

  Yeah.

• 29:24John Coogan?

  But it would be weird, especially if you want more of an egalitarian organization, more of an equal board, more of a dynamic.

• 29:31Jordi Hays?

  Well, you look, you look at the, you look at the run that Sam has gone on.

• 29:35John Coogan?

  Yeah.

• 29:35Jordi Hays?

  And you could imagine a situation where they're sitting. At the table and saying this boardroom ain't big enough for the two of us.

• 29:41John Coogan?

  Yep.

• 29:42Jordi Hays?

  Right?

• 29:42John Coogan?

  Yep.

• 29:42Jordi Hays?

  And it really feels that way.

• 29:43John Coogan?

  Big egos, yeah.

• 29:44Jordi Hays?

  Uh, Sam, uh, Sam notoriously is able, uh, to, uh, draw in capital using many of the, uh, the same sort of methods.

• 29:56John Coogan?

  Yeah.

• 29:56Jordi Hays?

  That, that Elon has.

• 29:57John Coogan?

  Yeah. I do think the, uh, the, the financially, what will take me to one B? It's just a good question to ask.

• 30:03Jordi Hays?

  Everybody needs to be asking themselves this.

• 30:05John Coogan?

  Yes. This is something that should be taught in grade school, really. Uh, I, I, I see people on Instagram reels all the time asking this question. Alex Hermosy, you know, makes reels about this. He's asking himself this question. The only other question is why aren't you asking yourself that question? You should. You should also get on 11 labs, build intelligent, real-time conversational agents. Reimagine human technology interaction with 11 labs, baby.

• 30:32John Coogan?

  Continuing with the timeline, a federal judge denied OpenAI's motion for summary judgment. Uh, the case is going to trial and Tyler's moving to.

• 30:42Jordi Hays?

  Oakland.

• 30:43John Coogan?

  Oakland.

• 30:43Jordi Hays?

  East Bay.

• 30:44John Coogan?

  Uh, should we read through some of Alex Heath's, uh, coverage in sources dot news?

• 30:50Jordi Hays?

  And talk about a scoop athlete that is really given.

• 30:53John Coogan?

  I call him scoop god.

• 30:54Jordi Hays?

  Really given, uh, Kylie over at Core Memory. I mean, these two are just going head to head, right?

• 30:59John Coogan?

  Yeah, yeah. It, it, it is a, a knockout, drag out fight, uh, for, for, for scoop, scoop athlete of the year, uh, but they're both doing great stuff. Uh, and, uh, and, uh, Alex read through thousands of pages in Musk versus Altman. So you don't have to, we'll go through some of the summary here. Uh, there's some news about Ilya Sutskever. Ilya had early concerns about treating open source AI as a sideshow. In 2022, OpenAI's leaders seemed quite concerned about the prominence of open source, the, the open source lab, Stability AI. But we, we don't talk about stable diffusion that often anymore, but I believe Stability AI was the team behind that, right?

• 31:43John Coogan?

  Uh, Ahmad Mastak, I believe, runs it.

• 31:47John Coogan?

  Sutskever voiced his worry over text with Maroti and others. Sutskever, my trepidation around open source is that we're treating it as a sideshow, e.g. Deft not going far enough to really hurt Stability. So they're not taking it seriously. And if open source takes off, everyone could standardize on that.

• 32:06Jordi Hays?

  Bergoff says, "Bro's scooping harder than a Ben and Jerry's employee."

• 32:11John Coogan?

  That's go. This is good. This is good, Alex. He's scooping harder than a Ben and Jerry's employee. We're gonna use that from now on. This is fantastic. Maroti, Mira said, "We're missing the opportunity to set standards."

• 32:27Jordi Hays?

  And let's just say, Mira is the real winner here.

• 32:28John Coogan?

  Yeah.

• 32:29Jordi Hays?

  She's winning today simply because

• 32:31John Coogan?

  Oh, yeah.

• 32:31Jordi Hays?

  the attention has shifted away from, you know, a good number of people leaving.

• 32:37John Coogan?

  Their own, their own co-founder Exodus drama, firings, who knows what's happening. But good to have the narrative shift and the vibes move on to OpenAI versus Elon Musk. So Mira Maroti said, "We're missing the opportunity to set standards with this massive growing group of developers. People are hungry to build things and we should lean in and bring our tech to as many people as possible. Long-term maximize our chance of maintaining lead, reducing competition. But if we do everything to get this in a couple of weeks at any cost out because we heard Stability is open sourcing a similar model, that's not in line at all with my motivation." So reducing competition, never something you want to see in Discovery. Always something you want to see in, you know, a pitch meeting with a VC.

• 33:22John Coogan?

  But you usually don't want to put it in, in writing. OpenAI leaders were divided over early investor Reid Hoffman's decision to start a rival AI lab, Inflection. And Reid Hoffman's interesting because he was one of the big early donors, I believe, maybe 10 million, something like that in the millions. And he has, he has not joined the lawsuit. He has not jumped in and said, "Hey, I need, I need equity in OpenAI. I'm also wrong to like, like Elon." Now, in order to make the claim that Elon's making, you need a lot more correspondence, a lot more proof of, you know, misleading around the donation. And I don't think Reid necessarily has that. But also, he doesn't seem to be saber rattling about it.

• 34:04John Coogan?

  So they were already, they were also already, they were, they were also already considering prohibiting investors from backing competing labs from an October 2022 exchange. Sutskever. I guess I just felt betrayed by him founding a direct competitor while simultaneously telling me, quote, "I could not possibly imagine you'd find it objectionable."

• 34:25Jordi Hays?

  And this is Inflection AI.

• 34:26John Coogan?

  Of course he'd find it objectionable.

• 34:28Jordi Hays?

  Inflection AI, which was ultimately sort of like acquired by Microsoft for not licensing to you.

• 34:35John Coogan?

  What was that Mustafa Suleman's company, I think? Inflection? Altman, here's how I'd summarize my thoughts on this. Pros: He supported us in a moment when no one else would, and it was pretty existential. Okay, so we're learning more about the existentialness of certain donations when they came in during the OpenAI nonprofit era. There are times when if somebody didn't come in, write a check, it would have been very, very rough for them. And Sam says, "Reed helped out at a key moment." I think OpenAI would have been pretty effed if he hadn't stepped up. Also, he was instrumental in getting the first Microsoft deal done, and has generally been quite helpful with Microsoft-related stuff, and he's generally a good board member. Cons: He's very motivated by collecting status. Although I personally think he cares much more about OpenAI than Inflection,

• 35:21John Coogan?

  he was blinded enough by the startup of being able to call himself the co-founder of a company, he made an uncareful decision. Also, at this point, I think this, at this point, I think that, I think at this point, OpenAI has the leverage to ask for a soft promise for new investors not to, not to invest in competitors, but only a select few companies ever get to do that. And we heard stories of this during one of the bigger fundraisers, where even Glean was targeted as something that they didn't want their investors to also invest in. They wanted you to be OpenAI ride or die, of course. Tons of funds said, "I'd like a basket of flabs, actually. I'm gonna invest all of them."

• 36:02Jordi Hays?

  I would like broad-based exposure to the category.

• 36:04John Coogan?

  I would like broad-based exposure, and so I'm, I'm doing SSI and thinking machines, and I'm doing Intropic too. And I'm also, I'm also on the board of Meta, and I'm also, I'm also investing in OpenAI and XAI. You gotta, you gotta get a little taste of all of them. Brockman chimes in, he says, "Oh, also, aside, after talking to Sam Altman, I'm planning to meet Patrick Collison tomorrow and demo, and demo DV3." Will ask if he's interested in participating in the tender under the condition of not investing in AGI slash big model competitors. So we talked about the Brockman Diary.

• 36:41Jordi Hays?

  Well, yeah, the funny thing is he must like, I'd find it hard to believe that he's not, didn't get to one billion just off of Stripe. Obviously Stripe was much smaller back then, but Greg was the CTO of Stripe from 2010 to 2015. Stripe was founded in 2010. He was there like for certainly longer than a four year vest. So who knows?

• 37:04John Coogan?

  But we don't know about his consumption habits. He might have been selling off Stripe equity as fast as possible to.

• 37:11Jordi Hays?

  He might have been using shares to pay for coffee. It's like saying, hey, I'll give you a forward contract. I'm going to share if you give me a free cup of joe.

• 37:19John Coogan?

  Yeah.

• 37:21John Coogan?

  Sonya Nadella was worried about Microsoft's position in AI. When he started looking at.

• 37:25Jordi Hays?

  Yeah, so Stripe was Stripe was in 2017. Stripe was valued at 9.2 billion.

• 37:31John Coogan?

  Bunch of wee lads just doing Stripe.

• 37:36John Coogan?

  From Sonya Nadella's deposition, the question to Sonya Nadella, the CEO of Microsoft, did you feel that your progress was moving more slowly than you had liked? And the answer Sonya Nadella says, I mean, always as a CEO of a company, I feel my job is to sort of be dissatisfied with the rate of progress at all times. And so yes, would be the answer, which is both in the absolute sense, which is can we build products that are more capable in any particular domain? And also, you know, vis a vis competition. There were others achieving things that we looked at and said, hey, that's great. And also, how can we make sure we're competitive with it? And so Sonya Nadella was obviously motivated to invest. And now he has a huge stack of OpenAI shares, ready to rock.

• 38:20John Coogan?

  Also, Sonya Nadella almost wrote a book about an AI, about AI called An Inflection Point. I think he definitely should write that book. That sounds amazing. According to an exhibit filed in the case, it was co-written with Marco Iann city and was in development in 2023 from the first chapter on Wednesday, August 24th, 2022, with the Pacific Northwest summer showing all of its beauty. Bill Gates hosted a dinner at his home in Lake Washington, just a few miles from Microsoft's campus. No longer a Microsoft board member or even Microsoft's largest shareholder, Bill remained the iconic co-founder and trusted advisor of the company's senior technical leaders. Sonya suggested

• 39:02John Coogan?

  the gathering, which included chief technology Kevin's chief technology officer, Kevin Scott, and a handful of top researchers. Food and drinks would be served, but the main entree was a hush hush demo by OpenAI co-founder Sam Altman on a forthcoming release of ChatGPT powered by GPT-4, an AI built on large language models. Bill had long encouraged researchers to develop a truly accomplished AI assistant, but had voiced his skepticism about this particular approach.

• 39:32Jordi Hays?

  That sounds like I'm listening to an audible.

• 39:35John Coogan?

  Thank you. CrowdStrike. Your business is AI. Their business is securing it. CrowdStrike secures AI and stops breaches, baby.

• 39:44Jordi Hays?

  That's right.

• 39:45John Coogan?

  CrowdStrike. So that would be fun. I hope that book gets published. It'd be fun to have some of those little stories about we don't. I don't feel like we don't have enough oral histories of AI. Who was in the room at what time? I feel like there's a whole series of books to be written about OpenAI. I know that they're writing. They've written a few, but most of them are sort of these like skeptical drama pieces. I'd be much more interested in in two, two different books. One would be the the technical histories, like exactly what researchers were doing, what at what times.

• 40:20John Coogan?

  And also, I want to know the feeling that was going through Ilya's head and what was the vibe when he said like, I'm hitting the button and I'm running the training run. What do you think?

• 40:31Jordi Hays?

  You're just describing Dorek Hes book.

• 40:33John Coogan?

  Yeah, but.

• 40:34Jordi Hays?

  Like, The Scaling Era and Oral History of AI 2019 to 2025.

• 40:39John Coogan?

  So, so, so, yes.

• 40:40Jordi Hays?

  And he interviews Ilya.

• 40:41John Coogan?

  Yeah, yeah, so, so, I hear you, I hear you on that being a great, a great tour of AI progress across labs.

• 40:50Jordi Hays?

  Yeah, I think John's talking about business.

• 40:52John Coogan?

  I'm talking about within a single lab, within a single lab, and you're in the room account of, of, you know, narrow it just to like the GPT models. And so imagine the scaling era, but just for the projects of OpenAI.

• 41:06Jordi Hays?

  Basically, you want like the acquired episode.

• 41:08John Coogan?

  Yeah, there's that. I mean, isn't there news that there's a book on Demis Hasibus that's coming out about DeepMind? That's going to be fantastic. It's written by Sebastian Malabai, one of the goats of business writing. He wrote The Power Law, all about the history of Silicon Valley. I know that book is going to be incredible. But, so I'd be very interested in, in the, the research side, how the research developed, who was doing what? And then I'd also be interested in the financial side. I want to know, okay, how did this SPV actually get done? What were the terms on this? Who was jumping in in this round at what terms? Who were they talking to? Who were their LPs? Were their LP skeptical? We've talked to and seen a little bit of the other side of that.

• 41:53Jordi Hays?

  And then layering in, layering in all of this information from the, like, the deposition.

• 41:59John Coogan?

  Totally, totally.

• 42:00Jordi Hays?

  And some of these, some of this evidence that's come out that we read.

• 42:05John Coogan?

  And so there's, there are a few writers that, that will take different cracks at the OpenAI story. I think the definitive book probably has yet to be written, but it will come and hopefully Sonya Nadella can, can play a role in that because he's such a key figure in the full story. Vanta, automated compliance and security. Vanta is the leading AI trust management platform. Like a foghorn. Uh, Microsoft beat out Amazon when it initially started working with OpenAI. Elon Musk was opposed to working with Jeff Bezos and wrote the following in an early email to Sam Altman. He said, I think Jeff is a bit of a tool and Sonya is not. So I slightly prefer Microsoft, but I hate their marketing department.

• 42:51John Coogan?

  Altman responded that Amazon had started, quote, really dicking us around. Um, yeah.

• 42:57Jordi Hays?

  Such a crazy line.

• 43:00John Coogan?

  He's like, I don't like his taste in champagne. Have you seen what that guy drinks in St. Bart's? It's unacceptable. He should be taking it up another notch.

• 43:07Jordi Hays?

  And, and the, and the, the sparklers with the champagne.

• 43:10John Coogan?

  It's all, it's just over the top.

• 43:11Jordi Hays?

  Very vulgar. He knew he was gonna get mocked.

• 43:13John Coogan?

  Yeah, yeah, true, true. Yeah, I like, I like a Tesla tequila over a St. Bart's champagne bathtub. I don't know.

• 43:21Jordi Hays?

  Credit to Jeff. He of course was a bit more locked in during that era.

• 43:26John Coogan?

  So the upside on Microsoft's initial $1 billion investment in OpenAI was capped at 500 billion. Hopefully they hit that cap from a filing written by Musk's lawyers. In November 2018, after dinner with Sam Altman, Scott told Nadella that OpenAI's new corporate structure offered both, quote, "a commercial vehicle for monetizing OpenAI AIP and investment returns capped at 500 billion." That's not bad. A 500x bagger is gonna move the needle for Microsoft for sure. Altman claimed the nonprofit would eventually benefit because though OpenAI has yet to make a single dollar of returns, if OpenAI ever does get to 500 billion in returns, the balance over that goes directly to the 501(c)(3). That's exciting.

• 44:10John Coogan?

  Microsoft's board initially approved a capital investment of 2 billion, but ultimately decided to limit its initial investment to 1 billion in the hopes that a smaller investment would compress OpenAI to commercialize.

• 44:21Jordi Hays?

  Sonya. Hey, we got it. We can't give them too much.

• 44:24John Coogan?

  Let's put a little fire into them. Let's make sure that they're, they're thinking, thinking about dollars, dollars and cents.

• 44:32Jordi Hays?

  Well, you see what you've seen. You've seen what happened with thinking machines. You give somebody $2 billion, maybe less pressure to commercialize.

• 44:39John Coogan?

  Maybe, maybe.

• 44:39Jordi Hays?

  More money on weight racks.

• 44:42John Coogan?

  Yes, yes. In exchange for its investment, Microsoft received a convertible limited partnership interest and rights to OpenAI's profits with returns capped at 2,000% of its $1 billion investment. Microsoft CFO noted in an internal email that the cap is actually larger than 90% of public companies, and the limit on Microsoft's profits is not terribly constraining nor terribly altruistic. In fact, it was a good investment at Microsoft's request.

• 45:07Jordi Hays?

  True.

• 45:08John Coogan?

  OpenAI agreed to keep any mention of Microsoft's promise 2,000% of return on its investment out of its public announcement. Imagine going to someone and pitching them, "Oh, we'll give you a 2,000% return," and then actually delivering it. What a crazy, crazy story. Gusto: The united platform for payroll, benefits, and HR built to evolve with modern, small, and medium-sized businesses. Get on it. Stop making excuses. The second update to Microsoft's partnership with OpenAI in 2021 included another $2 billion investment that wasn't reported and came with a lower upside. This is also a filing from Musk's lawyers. In March of 2021, Microsoft quietly invested another $2 billion in OpenAI. Neither OpenAI nor Microsoft publicly announced the investment, which was subject to a lower

• 45:53John Coogan?

  6X return multiple. In place of its 2019 license to a single OpenAI model, Microsoft secured rights to commercialize any OpenAI model developed during the term of the agreement, except AGI. Facilitating its commercial use of OpenAI's IP, Microsoft was permitted to embed up to 10 of its employees on-site at OpenAI. That's interesting. Anticipating increased product commercialization, Microsoft and OpenAI agreed to share any resulting revenue. Just three months later, in June of 2021, Microsoft released GitHub Copilot, its first product incorporating OpenAI's technology. Well, there are many, many more scoops in this piece by Alex Heath over at sources.news,

• 46:35John Coogan?

  so I encourage you to go subscribe, go sign up for his Substack, and read the full thing for yourself, because there's a lot of interesting stuff going on. But we should move on to the timeline. There's so much more news. Let's find some post to run through. Everyone is having fun with "Financially, what will take me to one B?" Sitting on the edge of the bed. I love it.

• 47:02Jordi Hays?

  Feet up.

• 47:02John Coogan?

  You gotta, you gotta be asking yourself this. It's just so clear. This could have saved OpenAI from Elon, and it's a diary with a lock on it.

• 47:12John Coogan?

  I think the diary framing is like woefully wrong. That's probably the worst part of this whole thing is because most of the, most of the, the thoughts that Greg's putting out are completely reasonable. Like, it's like, yeah, we shouldn't screw this guy over. Like, do we really want him to have a, a complete authority? Like, I, this is all, these are all reasonable things to, to be thinking out loud. It's just when you write them down, they get recontextualized in the courtroom, and then the fact that it's framed as a diary, very questionable.

• 47:38Jordi Hays?

  Yeah, I don't, I don't think it makes, I don't think it makes Greg look that bad.

• 47:41John Coogan?

  No.

• 47:41Jordi Hays?

  Because he wasn't, he wasn't ultimately, it's not like he was like secretly, you know, the pup, Sam's puppet master.

• 47:47John Coogan?

  No, no, no. And a lot of this went back and forth, and there were lots of opportunities for both sides to, to yield. It was like a long, ongoing negotiation. But everyone's picking their sides. Owen Sparks says, "Case closed. Elon has OpenAI dead to rights." Based on this quote here. He wrote, "Can't see us turning this into a for-profit without a very nasty fight. I'm just thinking about the office, and we're in the office, and his story will correctly be that we weren't honest with him in the end about still wanting to do the for-profit just without him."

• 48:17Jordi Hays?

  That, that one's absolutely.

• 48:18John Coogan?

  That's a bad one. That's a bad one. Oh, we'll see. Anyway, we should, we should move on from all this. Are there any other things in the, in the, in the timeline that we should, that we should run through? Here, Elon says, "They stole a charity, plain and simple."

• 48:38Jordi Hays?

  They're really on the, on the, for all the jurors, they're really gonna have to, I imagine you get, if it's Oakland, 12 people on the jury, I'd guess like four of them are driving Teslas. They're really gonna have to go check all the cars, make sure they don't have the "Bought This" before Elon went crazy bumper sticker on it. They're gonna have to throw those, those candidates.

• 49:00John Coogan?

  Well, they should also throw out any jurors that shop in Koning Sags. Probably in the Kona Seg owner meetup and there are cars and coffee and they're like, well, yeah, I mean, like, I don't really like, I don't like electric cars. Okay. I do have a bias against electric cars. I need a V12 and I, anyone who drives a V12, I'm going to give them some leeway. I'm going to give them some leeway.

• 49:22Jordi Hays?

  The, the thing, the thing about a, a Kona Seg, uh, owners meetup is that a lot of them are probably not driving the Kona Seg because they don't work that well. They're not, they're not reliable, uh, frequently. It's been frequently reported that they're not quite reliable.

• 49:37John Coogan?

  The one day you get it to start, there's paparazzi there taking pictures of you. Just one of the chances.

• 49:46Jordi Hays?

  Seriously, it's the worst luck.

• 49:48John Coogan?

  The worst luck, the worst luck. Anyway, Sentry, good luck for your systems. Sentry shows developers what's broken and helps them fix it fast. That's why 150,000 organizations use it to keep their apps working.

• 50:05Jordi Hays?

  Elon, uh, whole Mars catalog, uh, was asking ChatGPT.

• 50:09John Coogan?

  Yeah.

• 50:10Jordi Hays?

  What, what ChatGPT thinks and it says, if I were grading this purely as an analyst, not as an open AI model, the documents are legitimately bad. Brockman notes, not ambiguous.

• 50:21John Coogan?

  I was asking, I was asking Claude about this and it was very funny because it does, you can't not read into it like you're talking to someone at Anthropic. Because it's taking shots at both of them being like, oh, well, like, you know, uh, Elon has XAI and that's a for-profit, so he's a hypocrite. And like, maybe that's just objectively true and the model's just, you know, accurate, but it's funny just reading it in Claude's voice being like, Claude's sitting there being like, I don't like either of these companies. Anyway.

• 50:53Jordi Hays?

  One more post. Elon said yesterday, we talked about this yesterday. He was quoting the Kalshi odds on his case against OpenAI. And he said, I've lost a few battles over the years, but I've never lost a war. I think that, that what this comes down to though is like, what is? The same thing is like, what does winning the AI race actually look like with China? What is Elon winning against OpenAI? It doesn't.

• 51:21John Coogan?

  So the odds now, it's 68% chance will Elon win his case against OpenAI. That's up from 34% back in January 14th, just a few days ago. And so this new trove really did move the market, at least on Kalshi. So we will see where this goes. If the US District Court in Northern California sides with Elon Musk in Musk versus Altman before January 1st, 2027, then the market resolves to yes. Of course, this doesn't take into account appeals, which will obviously happen. And there's always the chance that there's a settlement before this, although I think it feels like we're just past all that and we are fully in.

• 52:04John Coogan?

  It's going to trial, there's going to be some drama, there's going to be some courtroom sketches. So get ready, because it's going to be, it's going to be beautiful. And I wonder who they're going to call to testify. A bunch of people will be on the stand presumably.

• 52:17Jordi Hays?

  Joe Weisenthal.

• 52:19John Coogan?

  What's he saying?

• 52:21Jordi Hays?

  He is highlighting Goldman raising 16 billion in record Wall Street bank bond sale. Joe Weisenthal says, right here, right here.

• 52:28John Coogan?

  Oh, here, toss it to me, toss it to me.

• 52:30Jordi Hays?

  Joe says, huge congrats to Goldman Sachs. I've been following them a long time. The whole team and culture is so impressive. I can't wait to see where they're going and what they do next.

• 52:47John Coogan?

  Yes, yes, yes.

• 52:49Jordi Hays?

  Goldman's really just getting started.

• 52:50John Coogan?

  They are.

• 52:51Jordi Hays?

  They're really just, today's really just day one.

• 52:53John Coogan?

  It's day one.

• 52:54Jordi Hays?

  It's day one for Goldman. Will Manitis, he thinks of Goldman as kind of the ideal firm, right? He has this idea of firm versus company.

• 53:00John Coogan?

  Yes, yes, yes.

• 53:01Jordi Hays?

  Where the company is just the people, the firm is the core ethos.

• 53:03John Coogan?

  Sure, sure, sure.

• 53:04Jordi Hays?

  And Goldman is kind of the perfect firm.

• 53:06John Coogan?

  There are some absolute dogs over there. We talked about it a bunch, but one of the most legendary things, going into the financial crisis, they know that real estate's going to sell off. They sell their corporate headquarters and lease it back for 10 years. They're not exposed to the financial risk of their building. You gotta be careful if you're on the other side of a deal. If they're selling, why? Why are you buying?

• 53:28Jordi Hays?

  Yeah.

• 53:29John Coogan?

  It's a good question. But fantastic firm, fantastic results from them, and congrats.

• 53:34Jordi Hays?

  Uh, Joe.

• 53:35John Coogan?

  And speaking of the financial markets, you gotta get in on them with public.com. Investing for those tickets seriously. Stocks, options, crypto, bonds, treasuries, and more with incredible customer service.

• 53:48Jordi Hays?

  Joe has some more news.

• 53:50John Coogan?

  Yes.

• 53:50Jordi Hays?

  He's news maxing.

• 53:51John Coogan?

  He is.

• 53:51Jordi Hays?

  There's some news out of AP, Beijing, breaking with the United States. Canada, Canada has agreed to cut its 100% tariff on Chinese electric cars.

• 53:59John Coogan?

  Oh.

• 54:00Jordi Hays?

  In return for lower, lower tariffs on Canadian farm products. Prime Minister Mark Carney said on Friday. Carney made the announcements after two days of meetings with Chinese leaders. He said there would be an initial annual cap of 49,000 vehicles on Chinese EV exports, growing to about 70,000 over five years. China will reduce its total tariffs on canola seeds. A major.

• 54:26John Coogan?

  Okay, yeah. Canola oil. They're getting seed oils. They're like, we gotta have them.

• 54:31Jordi Hays?

  Okay, okay. Maybe this is part of a grander strategy.

• 54:35John Coogan?

  Oh.

• 54:35Jordi Hays?

  He's like, yeah, we need to, this is, this is our version of fentanyl.

• 54:40Speaker 02

  So he, he actually did, um, uh, Carney said that Canada's partnership with China, uh, sets us, Canada up well for the new world order. So this is, the seed oils are the first step.

• 54:52Jordi Hays?

  Yeah, that was a, that was a crazy quote. That was a crazy quote. I, I, when I first saw that, I saw the video, I was like, okay, like.

• 54:59John Coogan?

  Yeah.

• 55:00Jordi Hays?

  Funny deep fake.

• 55:01John Coogan?

  Yeah.

• 55:02Jordi Hays?

  Prime Minister saying like.

• 55:04John Coogan?

  New world order.

• 55:04Jordi Hays?

  We're excited for this new world order.

• 55:07John Coogan?

  Yeah.

• 55:08Jordi Hays?

  But, uh, it was real.

• 55:09John Coogan?

  Yeah.

• 55:09Jordi Hays?

  Real.

• 55:09John Coogan?

  Uh, in other, in other, uh, electric car news, Ford and BYD are in talks for.

• 55:17John Coogan?

  Car batteries, let's give it up for some talks. U.S. car makers need, Ford, the U.S. car maker, needs more batteries for hybrid vehicles because it's shifting away from the full EVs. You know, they canceled the Ford Lightning, but they are going to do a lot of hybrids, and so they need a lot of batteries, and they're calling up BYD to help with it. Ford and BYD are going to do a partnership, or they're in discussions for it, in which the American carmaker would buy batteries from the Chinese auto company for some of Ford's hybrid vehicle models, according to people familiar with the matter. The two companies are still discussing how the arrangement would work. One idea is that Ford would import batteries from BYD to Ford's factories outside of the U.S., some other people said.

• 56:02John Coogan?

  Talks continue. And it's possible a deal won't materialize. The tie-up, if completed, would pair Ford with the largest Chinese car company that has struck fear in much of the auto industry over its ability to produce affordable models that carry sophisticated technology. For Ford, it solves a problem. As the company pulls back from electric vehicles and ramps up its lineup of hybrids, it needs a battery supplier, and BYD is able to produce high-quality car batteries. "We talk to lots of companies about many things," a Ford spokesman said. A BYD spokesman declined to comment. That's a good comment. "We talk to a lot of people about a lot of things. Why are you focusing on the Chinese batteries today?"

• 56:47John Coogan?

  Stop calling me Ryan Felton from the Wall Street Journal. Move on. I talk to a lot of people. Before becoming one of the world's biggest carmakers in the world, BYD developed a robust battery manufacturing business, including batteries for hybrid models. It currently produces most batteries in China, but the company is building up capacity in its overseas plants as it expands to markets such as Southeast Asia, Europe, and Brazil. Bernstein Research estimated that BYD's battery shipments rose 47% last year to 286 gigawatt-hours.

• 57:23John Coogan?

  President Trump's trade advisor, Peter Navarro criticized the idea on X. He said, so Ford wants to simultaneously prop up a Chinese competitor's supply chain and make it more vulnerable to the same supply chain extortion? What could go wrong here? That's Peter Navarro on X, the trade advisor. Last month, Ford said it would pivot away from making electric vehicles in the face of slumping demand and take an expected $19.5 billion in charges primarily tied to its EV business. So, very interesting news. Anyway, let's move on to the next big story of the day. But first, let me tell you about Shopify. Shopify is a platform, commerce platform that grows with your business and lets you

• 58:08John Coogan?

  sell in seconds, online, in-store, on mobile, on social, on marketplaces, and now with AI agents.

• 58:15Jordi Hays?

  Agents. And relevant because the day has finally come. Not to see ads in ChatGPT.

• 58:23John Coogan?

  That's true.

• 58:24Jordi Hays?

  But they're coming.

• 58:25John Coogan?

  They're coming.

• 58:26Jordi Hays?

  They're coming. We're talking, we're no longer in talks. We're no longer in advanced talks.

• 58:29John Coogan?

  Yes.

• 58:30Jordi Hays?

  We're talking about in the coming weeks, OpenAI plans to start testing ads in ChatGPT free and go tiers. It's go time.

• 58:39John Coogan?

  Go tiers. ChatGPT go.

• 58:42Jordi Hays?

  They said, we're sharing our principles early on how we'll approach ads guided by putting user trust and transparency first as we work to make AI accessible to everyone. We got to check in with Mark Cuban, with Mark Cuban.

• 58:55John Coogan?

  Yeah.

• 58:56Jordi Hays?

  But they say what matters most, responses in ChatGPT will not be influenced by ads. That is important.

• 59:05John Coogan?

  There's a firewall. There's a firewall. Editorial is over here, ad sales is over here. They don't interface with each other at all. And so the models that generate the responses will not be aware of who's advertising on what. This seems extremely easy to do technically, extremely. Extremely good for product reliability. It's what the consumer wants. They want, you want to know when you go to Google, if you scroll down far enough, you eventually get past the ads and you see the real results. And you're going to want that in your LLM, even if there's an add up at the top or in the middle. As long as it's clearly labeled, which they say they will be. So ads will always be separate and clearly labeled.

• 59:45John Coogan?

  Your conversations are private from advertisers. Plus, pro-business and enterprise tiers will not have ads. So I'm going to have to downgrade.

• 59:54Jordi Hays?

  Yeah.

• 59:54John Coogan?

  Cause I'm on the pro $200 a month tier, but I want ads. I want to experience the ad product. So.

• 1:00:01Jordi Hays?

  Everybody's got to downgrade.

• 1:00:02John Coogan?

  But I, I think they're going to be making way more than 200 a month off me on ads.

• 1:00:05Jordi Hays?

  Oh, yeah?

• 1:00:06John Coogan?

  Oh, yeah. Oh, yeah. Oh, yeah? They're going to be advertising crazy stuff to me. They're going to be, every other, every other result's going to be Koenigsegg. Here's a McLaren F1 in your, in your area. You can go pick it up right now. It's going to be insane.

• 1:00:19Jordi Hays?

  Yeah. So, so people have been so concerned, specifically Mark Cuban. We obviously had him on the show to talk about this last year.

• 1:00:27John Coogan?

  Yeah.

• 1:00:27Jordi Hays?

  About this idea of like ads showing up in the results.

• 1:00:30John Coogan?

  Yep.

• 1:00:30Jordi Hays?

  And part of it, the, the reason I was never that concerned is like, if I just search best backpack for men, which is kind of a joke in itself.

• 1:00:39John Coogan?

  It's going to tell you ridge, but.

• 1:00:40Jordi Hays?

  Well, a man shouldn't wear a backpack in the first place. So, uh, sorry to, to any backpack super fans out there.

• 1:00:48Jordi Hays?

  Well, you're not a man yet. You're not 21.

• 1:00:50John Coogan?

  Oh, true.

• 1:00:51Jordi Hays?

  So you're good. You got, you got, enjoy your backpack.

• 1:00:54John Coogan?

  Yeah. You should switch to a, to a stainless steel briefcase that you handcuff to your hand. That's the correct thing for someone of your stature, someone of your importance. You got, you're like important stuff carrying around.

• 1:01:06Jordi Hays?

  But anyways, when I search best backpack for men, I can scroll down and find a Reddit result.

• 1:01:12John Coogan?

  Okay.

• 1:01:13Jordi Hays?

  It's the second result after Nordstrom.

• 1:01:15John Coogan?

  Sure.

• 1:01:15Jordi Hays?

  But I can, they also served me a bunch of ads.

• 1:01:17John Coogan?

  Yeah.

• 1:01:18Jordi Hays?

  I don't assume that the best backpack for men is the first ad, right? It's not like, when it's clearly labeled and separated, I just assume this is an ad for somebody that sells backpacks.

• 1:01:29John Coogan?

  Yeah. But now I'm aware of that particular backpack.

• 1:01:31Jordi Hays?

  Yeah.

• 1:01:31John Coogan?

  Maybe.

• 1:01:32Jordi Hays?

  So I think it's, I think it's fairly aligned, right?

• 1:01:34John Coogan?

  Yeah. That, that's why, that's why. I I don't search like best backpack for men. I search uh I search best uh highest margin, highest highest margin backpack, men's backpack.

• 1:01:49Jordi Hays?

  Cause you you you appreciate.

• 1:01:52John Coogan?

  From the.

• 1:01:53Jordi Hays?

  You celebrate.

• 1:01:53John Coogan?

  Of the of the of the business.

• 1:01:55Jordi Hays?

  Yeah.

• 1:01:56John Coogan?

  Of the business.

• 1:01:57Jordi Hays?

  You wanna support business.

• 1:01:58John Coogan?

  Yeah, so and then and then so I wanna know what's the what's the highest margin backpack for whoever I'm buying from. Then I go to shopping tab and then it tells me, okay, this is the highest margin one. If you wanna support that corporation, make sure the most number of dollars flow to their shareholders. This is the backpack you should buy.

• 1:02:16Jordi Hays?

  Back uh forward slash in the in the chat says he uses a Spider-Man lunchbox.

• 1:02:23Jordi Hays?

  See, I I can I can I can appreciate a Spider-Man lunchbox.

• 1:02:28John Coogan?

  And soon you'll be able to generate a Sora of Spider-Man in ChatGPT. It'll serve you an ad for that Spider-Man lunchbox and the virtuous cycle of commerce will continue. MongoDB, choose a database built for flexibility and scale with best-in-class embedding models and re-rankers. MongoDB has what you need to build. What's next?

• 1:02:52Jordi Hays?

  Uh anyways, so plus pro-business and enterprise tiers will not have ads.

• 1:02:57John Coogan?

  Yes, so.

• 1:02:59Jordi Hays?

  Super disappointing.

• 1:02:59John Coogan?

  They need to hammer, hammer, hammer the first bullet point here. Responses in ChatGPT will not be influenced by ads. We know that this is what they're gonna do. Technically, it makes sense. It's completely the industry the industry standard. Everyone knows that everyone in tech knows that this is how it works, but consumers will have all sorts of conspiracy theories. I mean, remember how big the whole like Facebook listens to your audio and then targets ads off of that? And there's been so many uh so many like viral conspiracy theories around how ads work, how monetization works on these platforms. There's gonna be a huge amount of.

• 1:03:40John Coogan?

  Just noise out there basically saying that ChatGPT is polluted by ads, overly influenced by ads. And so they need to beat that drum really, really hard. It's good that they're doing it on the main account. It's good that they're doing this Fiji Cemos post, but they're going to have to, they're going to have to emphasize this in comms on every podcast that they do, every announcement for a long time.

• 1:04:03Jordi Hays?

  People, people seem to be really riled up about this. I'm seeing a bunch of comments on the post there. They're upset.

• 1:04:09Jordi Hays?

  I don't, I don't get it at all. The whole point is that ads, ads have made it so that wonderful services on the internet have been free for decades. They're generally aligned. Even target people report they like targeted ads. It's annoying getting an ad that's not targeted. Like, why are you, why are you wasting my time?

• 1:04:31John Coogan?

  I agree.

• 1:04:32Jordi Hays?

  This is funny. Somebody, somebody in here says some poor fifth grade teacher grading the worst World War II paper ever turned in when it suddenly starts talking about World of Tanks and Nort.

• 1:04:44John Coogan?

  Just coffee tasting the ads.

• 1:04:46Jordi Hays?

  Honestly, maybe that's a feature though, you know, because you get two impressions.

• 1:04:51John Coogan?

  Two impressions.

• 1:04:54John Coogan?

  Yeah, there's going to be some hilarious hallucinations or someone's reading from their press release and they accidentally have an ad in there. Oh, that's going to be amazing. I love it. I love it. Well, the Wall Street Journal had a little bit of an overview on this. Open AI to begin testing ads in ChatGPT and push for fresh revenue. The company will be showing ads in the free version of the chatbot as well as its.

• 1:05:15Jordi Hays?

  Let's give it up for fresh revenue.

• 1:05:17John Coogan?

  Fresh revenue. Ads will appear at the bottom of ChatGPT's answers and be labeled. Interesting. The bottom of the answer? I want it at the top and the middle and the bottom. And I also definitely want to show the ads while it's thinking, like show, because you can run an ad auction and show an ad while you're waiting. I mean, Uber has done this while you're waiting for the car. There's no reason why that shouldn't be there, especially if you're doing a deep research report or anything. I do wonder how the ads will surface in the audio summary. So if you fire off a deep research report, it throws an ad at the end. If you're listening to that audio, will that play the ad at the end? Will that sound like a podcast ad or will it sound like something else? Like, will it be clunky?

• 1:06:02Jordi Hays?

  I'm assuming that they're not doing audio in these, right? Imagine if you do a Google search and it pops up a video. It's like trying to play sound.

• 1:06:11John Coogan?

  It's annoying. It could be.

• 1:06:12Jordi Hays?

  You'd be throwing your laptop.

• 1:06:14John Coogan?

  Yeah, yeah, but I mean, a lot of times people will go to ChatGPT, fire off a query, and then when the, when the query comes back, they will just hit the play, the play the audio button. And will it read the ad as well? I don't know, maybe. But the company said ads wouldn't influence the chatbots' answers, of course, and that user conversations wouldn't be sold to advertisers. That also makes a lot of sense. Also advertisers don't really care.

• 1:06:41Jordi Hays?

  Well, to be clear, like they will, I'm, my understanding is they will use what they know about you to offer better targeted ads to advertisers. They're just saying they won't explicitly be like, hey, we have, here's this person's email and here's what they like and actually sell that specifically.

• 1:06:58John Coogan?

  Or even, or even anonymously. Like, there's not even an option to go to OpenAI and say, hey, I'd like to buy, you know, 10,000 conversations about backpacks. That's not an option. What you can say is you can say, I have a backpack. Find me some customers who want to buy backpacks. And they will say, sure, we'll do that. And we will go into the black box and, you know, sort and match you and give you the lowest cost per acquisition. You tell us that you're willing to pay five bucks per customer, two dollars per customer, we'll get you two dollar customers. We'll do our best. This is the auction model.

• 1:07:34Jordi Hays?

  Yeah, and the thing here, the thing here is like, if you are, if you are a business owner,

• 1:07:39John Coogan?

  Yes.

• 1:07:39Jordi Hays?

  you should be incredibly excited about this.

• 1:07:41John Coogan?

  Yes.

• 1:07:42Jordi Hays?

  Every time a, a major new ad platform has come out,

• 1:07:46John Coogan?

  Yes.

• 1:07:46Jordi Hays?

  it has, it has, it is an opportunity to drive a tremendous amount of growth really, really quickly because they typically under, under price, under price the ads in the short room. In the short run, just to get volume, just to get a lot of customers in. And so when Sean Frank comes on later, we can talk with him about this. I, I remember like early days of like Snapchat advertising, like Connor over at The Ridge was like getting like tremendous, tremendous results.

• 1:08:16John Coogan?

  Yeah, yeah. Cisco. Cisco is critical infrastructure for the AI era. Thank you to Cisco for powering TDPN. Dean Ball is back on the timeline.

• 1:08:30Jordi Hays?

  We know Dean Ball.

• 1:08:31John Coogan?

  We know Dean Ball. He says, flowers, no way, reacting to the screenshot that flowers hinted math before numerals. Pottery made by people of the Holotheian culture who inhabited northern Mesopotamia between 6,205,500 B.C. Painted flowers with 4, 8, 16, 32 petals. Some of them have 64 petals. They were obsessed with exponential growth. They were obsessed with compounding, the power of compounding.

• 1:09:03Jordi Hays?

  It's the Claude logo.

• 1:09:05John Coogan?

  It is the Claude logo. That's hilarious. I love it. It's amazing. Anyway.

• 1:09:12Jordi Hays?

  This is good.

• 1:09:13John Coogan?

  Graphite, graphite.dev, graphite, code review for the age of AI. Graphite helps teams on GitHub ship higher quality software faster. Where would you like to go next?

• 1:09:22Jordi Hays?

  Vic has a fantastic post. He says, had dinner with wife at a Mexican restaurant last night. Looked at the menu. They were trying to raise prices from $18 to $24 for her favorite entree. Wife was like, I think we can have Claude make this. Told waitress, trying to gouge us, they done. One week sprint. Claude cloned and replaced.

• 1:09:45John Coogan?

  Coach needs a Pabell and car needs us.

• 1:09:47Jordi Hays?

  Restaurant manager freaks out. How do we solve this? This is gonna happen so much in 2026.

• 1:09:53John Coogan?

  Just telling the restaurant owner that you're gonna do it at home.

• 1:09:59Jordi Hays?

  We cloned your entree with Claude.

• 1:10:01John Coogan?

  We cloned you. We cloned it. We cloned it. I just cloned it.

• 1:10:03Jordi Hays?

  This is pretty funny. Jeff Huber sharing this post from r/teacher. Every year, these kids come back with a new annoying quirk... Claude boys are apparently the new thing. In my 10th year of teaching, mostly freshmen, ever since the pandemic, there's always a new thing students bring to school that they learned over the summer from the internet or wherever. The newest thing here is a flock of self-proclaimed Claude boys who carry AI on hand at all times and constantly ask it what to do. They have their entire personality revolve around Claude prompting an AI. When we went around doing an icebreaker, four of the five kids, some variation of "I live by Claude and die by the Claude," that's their fact. Just about

• 1:10:46Jordi Hays?

  an hour ago, when I assigned the first assignment of the school year, one of the Claude boys was bold enough to say, "If Claude says I do it, otherwise I don't." I told him if he asked Claude, he would be getting a call home on the first week of high school. He asked it anyway, and it said to do the homework.

• 1:11:01John Coogan?

  That's amazing.

• 1:11:03Jordi Hays?

  This is a copy pasta from the Coin Boys?

• 1:11:06Speaker 02

  Yeah, it's just the same thing, except instead of asking Claude, you flip a coin.

• 1:11:09John Coogan?

  You flip a coin?

• 1:11:10Speaker 02

  Yeah, the Coin Boys are apparently a new thing.

• 1:11:13John Coogan?

  This is very funny. I like the copy pasta. This is amazing. Very, very funny. Well, you've been trying to make Gemmy Boys happen, which I think is underrated. We should get a copy pasta whipped up, of course, because we are sponsored by Gemini 3 Pro, Google's most intelligent model yet. They got state-of-the-art reasoning, next-level bot coding, and deep multimodal understanding. I have some advice for Jeff Huber. He's the founder of Chroma, and, you know, he's trying to change the world. And if he wants to change the world, he should raise capital at the New York Stock Exchange. Jeff, it's that simple. Head over to the New York Stock Exchange. When you want to change the world, you raise capital.

• 1:11:56Jordi Hays?

  Call Lynn Martin.

• 1:11:57John Coogan?

  Call Lynn Martin.

• 1:11:58Jordi Hays?

  Let's get into the mansion section.

• 1:12:00John Coogan?

  Let's get into the mansion section. I've been waiting all day. The first big piece is about the great property transfer. Gen Xers and millennials will inherit trillions of dollars of real estate over the next decade, and it's already reshaping how luxury homes are bought and sold. So, over the next decade, roughly 1.2 million individuals with net worths of over $5 million are projected to pass down more than 38 trillion globally.

• 1:12:31John Coogan?

  That is a huge amount. Real estate is poised to play a significant role in the great wealth transfer. Gen Xers and millennials are set to inherit 4.6 trillion in global real estate over the next 10 years. And this is why it's so important to win the genetic lottery when you're born.

• 1:12:48Jordi Hays?

  We didn't.

• 1:12:49John Coogan?

  We didn't. I won't be inheriting anything.

• 1:12:52Jordi Hays?

  But.

• 1:12:53John Coogan?

  Uh, stop making excuses and maybe get a time machine and go back in time and be born to someone with a luxurious estate that you can inherit.

• 1:13:01Jordi Hays?

  Yes. Maybe even, maybe even multiple.

• 1:13:05John Coogan?

  We already read about that. So, um, M6, let's kick it over to M6. What, what, what are some?

• 1:13:11Jordi Hays?

  Uh, parents are buying earlier and bigger. It isn't a new phenomenon for well-off parents to give children a helping hand in securing a first home, but at the high end of the market, agents say more parents aren't waiting for kids to inherit their wealth. They are buying them luxury properties sooner. It's reshaping the definition of luxury real estate as more sellers cater to the tastes and preferences of a younger generation.

• 1:13:29John Coogan?

  The price points have gone wild, said Ian Slater, a Compass agent who works with ultra wealthy families in New York. I used to commonly see people buy 3 million to 5 million apartments for their 25 to 30-year-old kids. Now I see them buying 15 million to $30 million apartments for their kids. That is absolutely crazy. Uh, when you, when you're buying for children, co-ops are a real no-no. Since many co-op boards want the occupants of the units to be financially independent. By contrast, condos offer flexibility, which is spec, which is especially valuable for global.

• 1:14:08Jordi Hays?

  What's, what makes you, what makes you more financially independent than having a trust fund that just?

• 1:14:16John Coogan?

  Yeah. Uh, I don't know. I mean, I guess if you're a co-op, you want to just be around other people who like, uh, aren't Nepos or something? Or you want people who have like built their own businesses or something? I don't know. Well, uh.

• 1:14:28Jordi Hays?

  I won't, uh, yeah, I, I, I, there, I won't stand for, uh, for, for Nepo slander.

• 1:14:35John Coogan?

  Yes, yes.

• 1:14:35Jordi Hays?

  Seriously. I love, I love when a Nepo utilizes every available resource and just absolutely dominates.

• 1:14:41John Coogan?

  Yeah, it's beautiful.

• 1:14:42Jordi Hays?

  You gotta appreciate it.

• 1:14:43John Coogan?

  Uh, well, let's look at Gene Hackman's Santa Fe compound, which just listed.

• 1:14:49Jordi Hays?

  Wait, what did, how did he, how did Gene Hackman make his money? Actor.

• 1:14:54John Coogan?

  You didn't know that?

• 1:14:55Jordi Hays?

  No. I don't, I don't, this guy was born in the, in 1930.

• 1:15:01John Coogan?

  I guess. Uh, he's, he's amazing. He's a Hollywood icon.

• 1:15:05Jordi Hays?

  He's, he's not a hack.

• 1:15:07John Coogan?

  No, he's not a hack. Uh, French Connection, Unforgiven, Superman, the movie, Enemy of the State. That's where I know him from. Enemy of the State's a great movie. Uh, he's in The Firm.

• 1:15:17Jordi Hays?

  Is this on the movie list?

• 1:15:18John Coogan?

  He's in The Firm.

• 1:15:19Jordi Hays?

  Is, are any Hackman movies in the TVN chat movie list?

• 1:15:24John Coogan?

  Behind Enemy Lines, that's a great movie about a downed fighter pilot or spy, a U2 spy plane. Uh, I think it's Owen Wilson who goes down, uh, and, uh, and, and it crashes and needs to, and needs to get back to his team, to his side. Uh, it's a fun, it's a fun ride. I, I recommend. Uh, so nearly a year, nearly a year after the shocking deaths of Hollywood icon Gene Hackman and his wife, Betsy Arakawa at their compound in Santa Fe, New Mexico, the couple's 53 acre estate is coming on the market for just 6.5 million dollars. I had no idea that Santa Fe, New Mexico was so affordable. We were looking at a place in Nashville, which I would put at the same level as Santa Fe.

• 1:16:06Jordi Hays?

  John, I gotta, I gotta stop you there.

• 1:16:07John Coogan?

  Why, explain.

• 1:16:08Jordi Hays?

  I mean, saying that, is this a bit saying it's so at six and a half million, it's so affordable?

• 1:16:16John Coogan?

  It is. I mean, we, we looked at a, we looked at a three bedroom, uh, apartment that was like 25 million dollars in Nashville last year, or last week. This is 13,000 square feet, 53 acre estate, and it's one fifth of the price. I'm just saying like, on a relative basis, do you go Santa Fe at six? And you get 53 acres or you're living next to John Fio and you paid 25 mil? Which one would you go for?

• 1:16:44Jordi Hays?

  Okay.

• 1:16:45John Coogan?

  Pick it, pick it. Which one would you go for? I'm going Santa Fe all day, personally. Hackman, the two-time, uh, Oscar winner, um,

• 1:16:54John Coogan?

  Let's see, there will be some buyers who just adverse to purchasing property, blah, blah, blah. Let's move on to Washington DC where the prices are way up, way over six. Six is, six is low compared to this $28 million home. It's DC's most expensive home and it's now owned by the owner of the Washington commanders, Joshua Harris. And this is one of those interesting things where you can build a massive private equity firm, a massive financial institution. Josh Harris, of course, built Apollo, the co-founder of Apollo. But he's known as the owner of the Washington commanders, even though that's not like his life's work. It's an interesting

• 1:17:38John Coogan?

  thing, but when you buy a sports team, that's the thing that follows you around forever. And so the billionaire investor Josh Harris, the owner of Washington commanders NFL team, and his wife Marjorie Harris have paid $28 million for a storied Washington DC landmark with plans to return it to its original use as a single family home. The sale is a record for the city. It's known as the Halcyon House. The federal style building in Georgetown dates to the late 1700s, the roughly 30,000 square foot house, which has a large garden with a pool in the back, wasn't publicly listed at the time of the sale. And then the deal happened quietly off market.

• 1:18:16Jordi Hays?

  Would you live in a house like this, John?

• 1:18:18John Coogan?

  100%.

• 1:18:20Jordi Hays?

  I knew it.

• 1:18:20John Coogan?

  Absolutely. Would you not? It's amazing.

• 1:18:23Jordi Hays?

  This style of architecture is extremely depressing to me.

• 1:18:27John Coogan?

  What do you mean? This is like the Lindy's thing. You know who, you know who lived there? You know who lived here first? This was built for the first secretary of the Navy.

• 1:18:36Jordi Hays?

  No, I understand.

• 1:18:37John Coogan?

  Benjamin Stoddard. You are inhabited.

• 1:18:39Jordi Hays?

  I understand the appeal for, for you, but, and.

• 1:18:45John Coogan?

  What is depressing about this? This is a beautiful house. Is there not enough light?

• 1:18:48Jordi Hays?

  I don't know. Potentially if they like did a pretty hardcore remodel to it, really, really brought it.

• 1:18:54John Coogan?

  What's not to like? It looks beautiful. I don't understand.

• 1:18:58Jordi Hays?

  It just looks a little too vintage.

• 1:19:01John Coogan?

  Oh, it's ridiculous. It does have a crazy, like, there's a roof inside.

• 1:19:06Jordi Hays?

  And it looks like a frat house.

• 1:19:07John Coogan?

  Do you see this? Look at this. Why do you have a roof inside, under your roof? Do you see what happened here? They got roofs, roofs. It looks like they just built another house, an addition on, on top. And so there is some chaos here.

• 1:19:23Jordi Hays?

  It's a little too fratty for me. It looks like the floor would be sticky with.

• 1:19:29John Coogan?

  The floor sticky. Somehow, I don't think this $28 million property has a sticky floor, but you never know. They have three TVs up there. That's sort of fratty. You watch three different football games.

• 1:19:39Jordi Hays?

  Well, if you own an NFL team.

• 1:19:42John Coogan?

  Yeah, you got to watch all the games.

• 1:19:44Jordi Hays?

  Yeah.

• 1:19:45John Coogan?

  The market. The previous record in DC was set in 2024 when Cantor Fitzgerald CEO Howard Lutnick purchased Fox News anchor Brett Byers' Fox Hall estate for $25 million. Mark and Hunter McFadden of Compass represented Dr. Kuno in the Georgetown sale. Harris was represented by Sotheby's International. Figma. Figma Make isn't your average vibe coding tool. It lives in Figma, so outputs look good, feel real, and stay connected to how teams build. Create code-backed prototypes and apps fast.

• 1:20:14Jordi Hays?

  I hate to interrupt the mansion section, but we have to pull up this video from the Houston Texans.

• 1:20:19John Coogan?

  Let's do it.

• 1:20:20Jordi Hays?

  They are, their new video is Call of Duty themed.

• 1:20:25John Coogan?

  No way.

• 1:20:26Jordi Hays?

  And I just got a wonder.

• 1:20:29John Coogan?

  Oh.

• 1:20:29Jordi Hays?

  We created COD.

• 1:20:31John Coogan?

  Yes, 100%.

• 1:20:32Jordi Hays?

  We created the.

• 1:20:33John Coogan?

  We'll let's switch over to reacting to the latest video from the Houston Texans.

• 1:20:37Jordi Hays?

  It is in the timeline.

• 1:20:39John Coogan?

  And while we pull that up.

• 1:20:41Jordi Hays?

  Here it is.

• 1:20:41John Coogan?

  Here it is. What is this?

• 1:20:44Jordi Hays?

  Can we get some?

• 1:20:44John Coogan?

  The match begins in 4:30. Eliminate the enemy team.

• 1:20:53John Coogan?

  Oh, the hit marker. The hit marker sounds good. Long shot.

• 1:20:57Jordi Hays?

  It's so funny because we were just talking earlier this week. We did the hit marker sound effect.

• 1:21:04John Coogan?

  Hit marker sound. Air raid. Air raid. Kick. What sound effect? UAV online. Another hit marker. UAV online. That's us. That's not them, right? That was you?

• 1:21:17Jordi Hays?

  We got to figure out if they did this, if they did this before.

• 1:21:22John Coogan?

  Good. The graphics package, the, I didn't realize how iconic the text was in COD.

• 1:21:29Jordi Hays?

  All right, you can turn it off.

• 1:21:30John Coogan?

  That like deep glow right there, the glowing letters, that's just COD to a T. They really nailed that. That's very fun.

• 1:21:37Jordi Hays?

  I wonder, I wonder what inspired that.

• 1:21:39John Coogan?

  Anyway, let's move on to the last, the last story in the mansion section. But first, let me tell you about Railway. Railway simplifies software deployment. Web apps, servers and databases run in one place with scaling and monitoring and security built in. So, uh, this is a renovation. I want your take on this renovation. A Texas couple transformed a 945 square foot room into a space where they could watch sports and entertain friends.

• 1:22:08Jordi Hays?

  See, this looks fantastic.

• 1:22:10John Coogan?

  Thank you.

• 1:22:11Jordi Hays?

  This is what I want to see.

• 1:22:12John Coogan?

  This is awesome.

• 1:22:12Jordi Hays?

  On the last place. I want to see, I want to see this.

• 1:22:15John Coogan?

  More dark wood.

• 1:22:16Jordi Hays?

  Level of Reno.

• 1:22:17John Coogan?

  Yes.

• 1:22:17Jordi Hays?

  To the last property.

• 1:22:18John Coogan?

  But I feel like this does capture some of the opulence, some of the details, some of the texture. I, I, this is not flat white walls. There's lots of layers, there's trim. I, I like the, the blue, the way it goes, the brown, the, the, the gray couches. Everything sort of like harmonizes, but it's not bland. It's not flat. There's a lot of detail and layering there. Even behind the TV, you see a sort of like textured backsplash. I think they did a fantastic job on this and they spent $465,000. So, when financial consultants Damon Cronus and Julie Cronus decided last year that it was time to renovate their game room, they wanted to keep it fun for their two teenagers, but add a layer of sophistication. You always got to do that.

• 1:23:04John Coogan?

  They're in their early 50s and they drew inspiration for their new entertainment lounge during a visit to Manhattan and a stop by the UBS Arena Preview Club, a temporary showroom for the arena's premium space under construction. Uh, styled in vintage hues of rich gold and deep blue with dark brown wood. The space had just the upscale feel they wanted for their home. They brought in Pulp Design Studios and they transformed it. The owners wanted it to look like a lounge, like a private sports club. We took the inspiration and created our vision to suit their needs and lifestyle. The 945 foot square foot space was designed for versatility, allowing guests to enjoy different activities at once. It was tailored to host movie nights, lively cocktail parties,

• 1:23:47John Coogan?

  and Sunday football gatherings. The room had to have maximum flow for people to move about. And so you see they have a horseshoe couch, but there's a gap in the middle. So you can flow around either way. So it's kind of like two L couches nestled next to each other. Very, very smart.

• 1:24:03Jordi Hays?

  Two L's.

• 1:24:04John Coogan?

  The custom.

• 1:24:04Jordi Hays?

  Almost making a W.

• 1:24:05John Coogan?

  Two piece. Hmm. I like it. The custom two piece sectional sofa set them back $26,000 and it allows guests to move in and out of the TV.

• 1:24:14Jordi Hays?

  So you can tell the floors are not sticky here.

• 1:24:17John Coogan?

  Yes, definitely.

• 1:24:19Jordi Hays?

  Which is key.

• 1:24:20John Coogan?

  The room is narrow and we didn't want to have a sectional that you had to walk all the way around. And so for additional seating, ottomans pull out from under the coffee table, swivel stools, a company console tables beside the sofas, tall stools are tucked under the nearby bar top and custom banquet hugs, a curve of windows. Performance fabrics and durable materials were chosen to endure active crowds. They're not letting the beer soak the walls. They got performance fabrics, durable materials in there. They're not, they're not worried about a sticky floor. A sticky floor here, a sticky floor there. It's going to be okay. They're going to mop it up. Those performance fabrics are built to handle the stickiest beer, maybe even the athletic brewing.

• 1:25:01Jordi Hays?

  Athletic.

• 1:25:02John Coogan?

  Yeah.

• 1:25:02Jordi Hays?

  Some athletic brews.

• 1:25:03John Coogan?

  You're chugging athletic brews. You're spraying them all over. You're cheersing, slamming them on your head and, and they get on the.

• 1:25:09Jordi Hays?

  Honestly, so athletic, athletic brewing, which we have, we have a few here. Athletic brewing really needs to do a hard sell to cheeky pint and be like, look, you guys are hardly drinking. We can tell.

• 1:25:23John Coogan?

  We'll have to ask him if he uses Stripe currently because maybe there's a.

• 1:25:26Jordi Hays?

  We can tell.

• 1:25:27John Coogan?

  One hand wash is the other deal there.

• 1:25:28Jordi Hays?

  Yeah, yeah, yeah. We can tell you don't have it in you to get hammered on the podcast.

• 1:25:32John Coogan?

  Yeah.

• 1:25:33Jordi Hays?

  But we want you to be able to enjoy the taste of beer.

• 1:25:35John Coogan?

  Yeah, I like that. A little cheeky athletic brewing. I like that.

• 1:25:39Jordi Hays?

  Cheeky brew.

• 1:25:40John Coogan?

  Beyond watching sports across two TVs, the family enjoys competition of their own. Oversized Scrabble board hangs on the wall to set the tone. They spent $25,000 on a table. Who knew tables can get so expensive? We've been looking at tables.

• 1:25:54Jordi Hays?

  I mean, I feel like we did. We're just trying to get a new table.

• 1:25:58John Coogan?

  I know. We want a bigger table.

• 1:25:59Jordi Hays?

  We want a slightly bigger table.

• 1:26:00John Coogan?

  We want some features, but very quickly you get up into these big numbers. So the table, the round Cambria table was crafted for manmade quartz with a metal base. We bolted the base to the floor because Damon and Julie wanted to be sure it wouldn't topple around the teens if people are getting hammered down there standing on the table. They don't want it falling over, so they bolted it to the floor. The chandelier set them back $3,900. The Cavallino X Large Radial Chandelier from Visual Comfort adds sculptural interest and focus lighting to the game table. Chairs, $2,400 each, covered in Everly fabric, having coasters. Casters allowed them to move freely, perfect for group activities. You can move them around. The window shades, $12,000. Motorized Roman shades create a blackout environment that's ideal for TV watching.

• 1:26:48John Coogan?

  That's a cool feature. And the banquet, cost $27,000. The bottom is covered in Ultra Suede Green and Ocher from Crovat, and the back in Lulu Velvet.

• 1:26:57Jordi Hays?

  I like the sound of that.

• 1:26:59John Coogan?

  From S. Harris. We had to do a custom banquet so that it fit the curve of the window to maximize seating. They're all about maximizing seating over here. Well, congrats. And also.

• 1:27:09Jordi Hays?

  In more news.

• 1:27:11John Coogan?

  fin.ai, the number one AI agent for customer service. If you want AI to handle your customer support, go to fin.ai. What other news do we have, Jordy? Tell me.

• 1:27:20Jordi Hays?

  Harmonic.

• 1:27:21John Coogan?

  Harmonic.

• 1:27:21Jordi Hays?

  Vidia is investing in math.

• 1:27:24John Coogan?

  How much?

• 1:27:24Jordi Hays?

  They're investing in Vlad's AI startup Harmonic. They're investing $120 million.

• 1:27:34Jordi Hays?

  Hit. Emerson collecting. Collective is also joining as a new investor alongside existing backers. Ribbit, Ribbit, Ribbit. We need a frog sound effect.

• 1:27:46John Coogan?

  Mickey Malka's doubling down.

• 1:27:47Jordi Hays?

  For Mickey.

• 1:27:47John Coogan?

  He's a big Robin Hood guy.

• 1:27:48Jordi Hays?

  Sequoia Index and Kleiner.

• 1:27:50John Coogan?

  Ooh, Sequoia. Yeah, we'll have to talk to the Sequoia folks about how Harmonic fits into the post AGI age. Because we have Pat Grady in Stonia.

• 1:27:58Jordi Hays?

  What if it turns, what if, what if it comes out that Harmonic is just working on a chat GPT style app to help kids do math problems?

• 1:28:08John Coogan?

  That's it.

• 1:28:09Jordi Hays?

  That's the play.

• 1:28:10John Coogan?

  Yes.

• 1:28:10Jordi Hays?

  It's a trillion dollar opportunity.

• 1:28:12John Coogan?

  Yes, I love it. Well, we have our next guest in the Restream waiting room. Let me tell you about Label Box while we bring him in.

• 1:28:20Jordi Hays?

  Get in the box.

• 1:28:21John Coogan?

  Reinforcement learning environments, voice robotics, evals, and expert human data. Label Box is the data factory behind the world's leading AI teams. And we have, ooh, nice and cold athletic brewing, hazy IPAs. I will enjoy one of these while we bring in our guest, Bill Shufelt from

• 1:28:42Jordi Hays?

  Here we go.

• 1:28:42John Coogan?

  Restream Radio Room. Welcome to the TV Pen Ultra. How are you doing, Bill?

• 1:28:46Speaker 03

  Incredible to be here. Love the show. Thank you so much. Even though I'm East Coast and not in the AI world, you know, I just sell things that hurt when you drop them on your feet over here. But I'm a huge, huge fan of the show and so excited to be here.

• 1:29:00Jordi Hays?

  Yeah, so, so great to have you. I was just trying to remember, I listened to like about 90 minutes of you on a podcast. It must have been like four or five years ago.

• 1:29:09John Coogan?

  I listened to you on Logan Bartlett. That was a fun one.

• 1:29:12Jordi Hays?

  Yeah.

• 1:29:13Speaker 03

  Very cool. He's great, yeah.

• 1:29:14John Coogan?

  Yeah, yeah, he's awesome.

• 1:29:16Jordi Hays?

  What do you think about the pitch of getting, are you familiar with the Cheeky Pint Podcast from Stripe? Have you seen this?

• 1:29:22Speaker 03

  I, I love it. Yeah. I was actually thinking about cold emailing them to get out of there.

• 1:29:26Jordi Hays?

  So the elephant, the elephant in their pub is that they're not really crushing beers.

• 1:29:32John Coogan?

  They're not getting actually drunk.

• 1:29:34Jordi Hays?

  And so I think you should make a special addition for the team over there so they can really start, start indulging.

• 1:29:42Speaker 03

  Oh, I love that. I'm a fan of them, Ireland. I've got a bunch of their books. So yeah, would love to reach out to them.

• 1:29:48John Coogan?

  Fantastic. Let's take it back to the beginning. Since it's your first time on the show, give me the founding story. Give me what you were doing before. It's such a huge trend now, mostly thanks to you. Did you imagine that the trend would become so big? What was, what were the inciting elements?

• 1:30:10Speaker 03

  Yeah, I think there's like both like the personal story and the category story and like the health and wellness mega trend behind it. You know, even zooming out to the trend, I know, you know, so much of like the mega trends in business these days and big numbers around AI and it's rare to see something that is like so solidified, very visible, long term. And I can get more into like how big I think the trend will be and why it'll be so big over time and why I've got line of sight to that. My personal story really is I was working in the hedge fund world, had a great finance job. I came, I went, I went to like, went to college, exactly. But I like went to college with that view,

• 1:30:55Speaker 03

  went right into my career, never thought I'd do anything different. And but I was living this high performance lifestyle where, you know, 12 years ago, I was about to get married, I was thinking about my future life and alcohol was kind of a ceiling on my, my work productivity, my relationships, my sleep, my workouts, you know, all the things that are like so commonplace in knowledge now that like, you know, all the fitness wearables, the podcasts, like Peter Attia, Huberman, Rhonda, like, all these things are like so evident now, but I was like living that and feeling it myself. I was, you know, I had a very intellectually intense job at Steve Cohen's hedge fund where you're graded on your output every day. I was at the desk from 6 a.m. to 6 p.m., 150 work dinners a

• 1:31:39Speaker 03

  year, then out with friends and family on the weekends.

• 1:31:42Jordi Hays?

  150 work dinners is insane. One for us, I mean, we have like a, maybe not as intense as your schedule with Steve Cohen, but it's very, you know, we're here, we have to get to the studio at nine, we go live at 11, there's very little downtime. And so we do one work dinner and it throws everything off. It's like throws off the whole week.

• 1:32:03Speaker 03

  I have huge admiration for your always on, like, I think about that all the time. But yeah, we had 200 brokers and I had to do research dinners also and you have to have good relationships. So. When you like pick up the phone and need to convey something in 10 seconds that you know that person. Yeah. So anyway, that's a long way of saying like I was very interested in health, longevity, my fitness, my performance way before it became such a commonplace trend and I was living that. And I really started saying to people like I, I really wish I could go out to all these dinners and be in the moment without alcohol. And, you know, I saw the trend happening over my finance career where people were just as excited to go to Barry's Boot Camp or something in the morning rather than go to a steak dinner at night.

• 1:32:46Speaker 03

  And so, but I just really wish there was another side of it.

• 1:32:49Jordi Hays?

  Keith her boy, four Barry's Boot Camps in a day.

• 1:32:52John Coogan?

  So, so why not Shirley Temples? Why didn't you just become the Shirley Temple King drinking six of those? Like, what, what, what, what were you doing before you actually decided to build a new product in the category? Were you on just like soda, water and lime? What was the, what were the options?

• 1:33:08Speaker 03

  Well, so I saw that huge impact on my life just by like moderating my drinking and ultimately stopping my drinking. And then thought, you know, if I could just bring moderation to the masses and just make it accessible. Like I have no view on like bringing back prohibition, sobriety or anything like that. But just making the other side of the menu delicious, like match the culinary expectation and the experience that, and as I started to look into the numbers behind it, 50% of adults even at that point had point one drinks or less per week. And it was really only like the top 10% of adults have more than like seven drinks a week. And it kind of hit me that the adult beverage world is also just totally missing a majority of the population and their needs.

• 1:33:52Speaker 03

  And so I'll skip like the years of business research and surveys and stuff like that to get conviction around it. But ultimately it was like right out of my lived experience and I wanted it to exist and quit my job to build that.

• 1:34:06Jordi Hays?

  How much, how much credit do you give just how good the product is with the success of the company? Because I think in CPG, you're not the first finance Chad to like wake up.

• 1:34:20Jordi Hays?

  One day and say, I want to start it like it's it's kind of it's kind of a common path.

• 1:34:24Speaker 03

  It is.

• 1:34:25Jordi Hays?

  You know, they're kind of like bored. They're, you know, they they they try some drink like I I've met as an angel. I've met so many people over the years that like are trying to make the leap from finance to being an entrepreneur and CBG. Because it's like you're going from like spreadsheets to something that's like super tangible and you still have to use. You spend plenty of time in spreadsheets and I think there's something really appealing about like going from like finance to like the tangibility of CBG. But the issue is like so many people that are incredibly talented, they just end up like they end up developing a developing a product that's not amazing. And then it just you can't even live up to your talent level or your potential because you're just like handicapped by the product.

• 1:35:05Jordi Hays?

  And when I tried, you know, having this product, even when I had it for the first time, it's like it's just a fantastic product. It tastes exactly like a beer. It tastes like a sort of a cell, you know, celebratory moment or it tastes like, you know, winding down at the end of the day. Which is like it delivers something unique in the way that like a La Croix or just some other like non alk, you know, alternative actually works.

• 1:35:28Speaker 03

  Yeah, that is exactly it. And we have an incredible co-founder, John Walker, and the two of us homebrewed on Gatorade jugs. And we took it down to the screws and reinvented the way non-alcoholic beer is made rather than where historically non-alcoholic beer was a very industrialized, heavily processed thing. It was only a lager category as well. And so we took the time and John said he wouldn't even sign on if if I if I didn't agree that we wouldn't launch the beer. If it wasn't indistinguishable from top craft beers from day one. And I I think that's the huge differentiation. We we made the very unattractive decision to investors to take take a capital intensive route. We've built all our own breweries. We've put over 130 million into our manufacturing.

• 1:36:13Speaker 03

  Just very unattractive to investors if I can repeat that.

• 1:36:18Jordi Hays?

  Attractive now.

• 1:36:20Speaker 03

  Yeah, but it was so we could own our proprietary process, own the quality of what we're doing every step of the way. Where, yeah, as you were saying, if you were to, like, Nick Shirley, a lot of CPG, or especially the competitors in our category, like, you would find that they just totally outsource all the production. There aren't brewers on the team. And it truly had to be different quality and different experience. And we really invested to change that perception of the category. And that's still very rare non-alcoholic beer. There have been 280 brands since we launched, and a lot have had very disparate futures.

• 1:36:56Jordi Hays?

  Well, yeah. And what's happening with the category right now broadly? Because, you know, again, as an angel in LA, there's so many CPG founders. I've seen so many of these companies try to come up, not just in kind of the non-alcohol beer category, but in other categories. And one of the things I always struggle with as somebody who, you know, dramatically reduced my drinking, probably like six years ago, from like, drinking like a handful of drinks once a week, to like, drinking like, one or two drinks like, once a month, really. Like, so really limited it. And so I'd get these pitches, and people would be pitching like, something that doesn't taste like alcohol at all. And I'm like,

• 1:37:38Jordi Hays?

  I'm the buyer here, but you're selling me a product that I can, I can drink a Diet Coke. I can drink any number of other things. And so like, your competition is just, is not like the non-alcohol category. For some of these new non-alcohol brands, their competition is just like, every single drink that doesn't have alcohol in it. And that just felt like a super tough position. Whereas, for this, it's like, if you want a beer, but you don't want alcohol, like, your options are like, much more limited.

• 1:38:07Speaker 03

  Yeah, for sure. And as, as I looked at the TAM of the market, the way I thought about it was, A, 50% of the people really aren't drinking, and 99% of people, or even people who do drink are not drinking, like, 99% of the time, they're awake. So there's a huge opportunity to meet new occasions. And those occasions you just described losing over the years, we're trying to bring those back, bring the social connection back, get people out multiple times a week. But I think that, like, the clearest way, I think I could say this is, and like, why I think it's such a big trend is, you know, the overall beer category, per the Brewers Association, is north of $100 billion in all retail sales.

• 1:38:47Speaker 03

  Craft beer itself is 28 billion, supposedly, per the Crafters Association. If you go back like 50 years, light beer was one of the biggest mega trends to ever hit beer. And that is an enormous part of the beer category today. And but that was a huge trend up until about the turn of the millennia. And then we started to see like people, well, the light beer trend was driven by like the nutritionals, where people wanted superior nutritionals to what existed previously. Then you had big trends in craft beer and flavored RTDs, which were, you know, light beer might not have that flavor. We want to like have the nutritionals, but the flavor.

• 1:39:28Speaker 03

  And where non-alcoholic beer comes in is all the experience, superior nutritionals. It's about 20, 30% of the calories, plus all the flavor of great craft beer. And it's emerging in this new big mega trend that I think has really good line of sight to be the next huge thing in beer. And I'm a very delusionally optimistic person, but I do think non-alcoholic beer will be significantly bigger than craft beer and a huge part of the overall beer category in the future.

• 1:39:56Jordi Hays?

  Yeah, where else in beer is there like meaningful growth?

• 1:40:03Speaker 03

  Well, that's also the problem, too, is every other, like most CPG overall, but especially Bevalk, all the innovation is like a one-for-one substitute for the same consumer in the same occasion. And and even some of them are like you're substituting one thing for many. Like a THC drink is a one, one for like six substitute.

• 1:40:23Jordi Hays?

  Oh, sure.

• 1:40:24Speaker 03

  And so what we're doing is we're bringing in, like a lot of people drink our beers within the same night as alcohol, our 80% of our consumers drink. So we're bringing a lot of people back into the category, plus 25% of our drinkers are new to beer altogether. So like this is really additive to the beer world for the first time. Yeah. And then, yeah, as you think about those occasions, there's just a lot of occasions to layer in. I guess on the broader beer category, too. The last few years have been the worst beer years of our generation in alcohol for a number of reasons. I think part of it is the category is not connecting to the next

• 1:41:04Speaker 03

  wave of consumers. If you look across the spokespeople in the major brand TV ads, most of them in their seventies, one of them's in their eighties, one brand's about to bring back an eighty-seven-year-old spokesperson from ten years ago. So like, this is a cohort, this like, this is not the cohort we need to meet. Like, it is, like, we are bringing beer for the modern, healthy, active adult. We have great aspirational athletes and chefs and people behind it. But more than anything, we're just trying to build like a really timeless brand. And I could share more about our marketing and how we're thinking about that differently, too.

• 1:41:40John Coogan?

  I want to get to that, but first I want to know about what, how is your business different or similar to other beer companies that are higher alcohol? Do you need to be twenty-one to buy this? Are you subject to the three-tiered system? Can you sell this online? What's different or similar to just higher alcohol beer distribution and sales?

• 1:42:00Speaker 03

  Yeah, I mean, as a finance chat coming into this category, I was like, wow, there is, there is no tech in this sector and there is margin everywhere.

• 1:42:11John Coogan?

  Yeah.

• 1:42:11Speaker 03

  And like, I very quickly got on the ground and realized that there's a lot of reasons why, like, beer distributors are great at what they do. It's incredibly capital-intensive. They're basically a big logistics business. And so, we do largely plug into the three-tiered system, but that's our opt-in. And then

• 1:42:28John Coogan?

  So legally, you don't have to necessarily because you're regulated slightly differently?

• 1:42:33Speaker 03

  Correct. And then, we were the first beer brand to launch nationally on D to C also. And so that was like, an absolutely enormous marketing advantage where, you know, any high-flying brewery of the twenty-tens, you'd have to wait in line outside of their brewery for a limited release in the locale, where, you know, we could, we could lose tons of money shipping beer all across the country. So

• 1:42:55John Coogan?

  And then is there any age restriction?

• 1:42:56Speaker 03

  Not in most states, no. But, yeah, typically, it's, you know, we, we're trying to establish it for adults in typical beer occasions, celebrating life's special moments.

• 1:43:08John Coogan?

  I'm mostly trying to catch Tyler because I saw him grab one. And if, if there's some rule that he's violating, I'm going to call the cops right now.

• 1:43:19Speaker 03

  I mean, we are huge on the Michigan campus.

• 1:43:21John Coogan?

  Okay.

• 1:43:22Speaker 03

  You know, we like some of, I mean, some of the like, just like colleges across the country were enormous. This next generation is so much more moderate than prior generations. And I, I think the perception of alcohol has changed something like 14 percentage points in three years, which, you know, it's, it's happening really fast.

• 1:43:42John Coogan?

  Talk about the, the, the formulation process a little bit, not to go too far back, but a lot of folks, when they're doing a CPG project, they go to a co-packer and they get a dog and pony show and they come out and they're like, we formulated the perfect thing for you, or Flavor House, or some supplier, and they tell you this is the best thing possible. And then if you don't, if you're not sharp, sort of the dog and pony show can kind of overpower you. Was there any, any point where you were working with a manufacturer and you had to sort of override them? Or what was the, the initial scale up like?

• 1:44:19Speaker 03

  It's really been all internal since day one.

• 1:44:22John Coogan?

  All time.

• 1:44:23Speaker 03

  Yeah. I, I basically put my life savings into our first 10,000 square foot warehouse, Gatorade jugs, me and John's salaries a bit, and then raised, raised an angel round to build that first brewery, did 120 meetings, huge rejection percentage.

• 1:44:42Speaker 03

  But yeah, in that, we wanted to approach it in a totally different way. And so we're confident we arrived at that.

• 1:44:49Jordi Hays?

  Funny, I, I feel like consumer is the one category where you just really don't know until you start selling the product. Like I can easily imagine getting this pitch and just being in the mindset of like, like if I'm, if I want to drink a beer, I want to, I want, I want alcohol.

• 1:45:11Speaker 03

  Yeah.

• 1:45:12Jordi Hays?

  And it just turns out it's like totally, just totally false.

• 1:45:15Speaker 03

  Yeah.

• 1:45:15Jordi Hays?

  Right? I wanted to ask, I know you did a ton of like community IRL marketing early on. And I wanted to ask you about how you advise other consumer brands when they're early on and thinking about how to spend their time, what channels to really focus on, because for certain consumer categories, if somebody's like, yeah, we're going to really focus on events and community, I'm just looking at them being like, you should just sell the product, like, just sell the product, like, spend all your time selling the product, whereas you guys, like, I know, invested a lot in the, in kind of the, the running, uh, running, uh, world and, and saw a ton of great results.

• 1:45:55Speaker 03

  Yeah, I mean, by invested a lot, like, a lot of my time and weekends.

• 1:46:00Jordi Hays?

  Yeah, like every, every weekend.

• 1:46:02Speaker 03

  Yeah, we had no more resources after all the stainless steel to put into marketing, so that was like, all on us, but, um, yeah, just touching quickly on two things you said there, where, like, a lot of people both, A, don't contemplate non-alcoholic beer, they're almost like non-considerers, and then think they don't like the taste of beer, are two things we like combat, like, over and over again, because like, it, it really is hard to imagine non-alcoholic beer and the social experience until you actually experience the social experience without alcohol, and you're like, oh, like, I kind of really like this, I'm actually in it for my friends, the food, the moment, and not the alcohol that mostly hits you after the moment, that was like a big light bulb to me, and the thing we hear all the time is people say, oh, I don't like the taste of

• 1:46:45Speaker 03

  beer, well, actually, the ingredient a lot of people don't like in beer is the ethanol, which at times is up to like eighty, eighty-five percent of the calories of beer, like, in a normal light beer, the ethanol calories is more than eighty of the calories of like the ninety-five to a hundred calories, and so, we actually do have a pretty big flavor advantage, too, and like, no comparison, large brand, um, yeah, on the, eh, eh, uh, in real life, too, that was almost out of necessity, like, I was like, going around to our early grocery stores like Whole Foods, and nobody was even looking at the non-alcoholic beer shelf, and so I was like, okay, I gotta get out in the world and bring people in, and so I, like, I was running a lot of races, and like, trail hop marathons, and Spartan

• 1:47:28Speaker 03

  races, anyway, and so I just started pouring beer at those, giving out hundreds of beers a weekend and getting people to. Like to the actual like table and trying the beer where they're like happy sweaty thirsty and actually considering it. So it's gotta be like.

• 1:47:42Jordi Hays?

  How do you, yeah, how do you measure success with an initiative like that? You're pouring, you're, you're sampling with people, you're seeing their reaction. Are you trying to like, are you already at that time stocked in shelves in local stores? And then you're trying to like, see, hey, if I, if I do like a bunch of weekends back to back, am I going to see an uptick in sell-through? Or is it more just like, this is like, I'm basically spending my time to get more people aware of the brand and I have more time than I have capital?

• 1:48:17Speaker 03

  Yeah, we have downed to zip code and store level sales. And so I was able to see like ripples fairly quickly and could run regressions on that. Separately, like it, it has to be authentic to the brand proposition. Like everything about this brand, like the can, the mountains, the outdoor aesthetic, the taste was like all out of me and John's life and like primarily my life. And so where I was going to market the brand and talk to people were like, I didn't have to like go to a focus group or Google where people like me hang out because it was all built around me. And so I, I have seen a lot of people like try to bring non-alcoholic spirits to like races. And it's just like, it's like absolutely laughably terrible fit. But you can tell some of you see just like pushing someone up to.

• 1:49:02Jordi Hays?

  Yeah, they heard you on a podcast and they're like, yeah, let's just run it. We'll do the same thing. It'll have the same effect.

• 1:49:07John Coogan?

  Athletic brewing for Manhattans and gin and tonics.

• 1:49:10Speaker 03

  We did also take a very intentionally like long track with things too, where so like that, like, yeah, talking to someone face to face is very unscalable. And like doing things digitally is so much more scalable and awareness. But like, if you do it enough, and if you're doing it all the time, all of a sudden it is scalable on a long time horizon. And even up until this year, last year, we probably did 2,500 events as a company and handed out well over a million samples, probably in all 50 states and three other countries. And so. Those things do scale over time and then we've been really consistent with our marketing messages too. You know, I, I knew my core skillset isn't like me being a social

• 1:49:52Speaker 03

  media persona and like just turning on the cameras all the time. We wanted to create a timeless brand that just compounds over time. We talk about the same things like over and over again. I, I think of it somewhat as like a Red Bull model of advertising consistency, where most of CPG these days is like chasing that next hit. It's like you've got to be on the next trend. You've got to be like, the next video's got to be a home run.

• 1:50:17Jordi Hays?

  Yeah.

• 1:50:18Speaker 03

  Or even shorter duration, like celebrity trends. You know, we've had upwards of 10 celebrities enter our category. We have a whole range of superheroes at this point. And, and

• 1:50:29John Coogan?

  It's so funny because you, you probably know all of them, but you could list them all off and I've never heard of any of them. And that tells you everything about the level of focus and actually

• 1:50:37Jordi Hays?

  It's probably harder to watch their movies now.

• 1:50:40John Coogan?

  I'm personally slated. I can't do it.

• 1:50:44Speaker 03

  Yeah. Well, we've got one more, at least one more superhero coming into the category this year. This one's being launched at us from a French castle. You know, it's going to be draped in Americana imagery. So we're excited for that one. But there's all different texts. There's like the short-term celebrity spike and like, hope you can ride it where we've kind of just done the thing and been authentic, like who we are inside the walls is who we are outside the walls.

• 1:51:11Jordi Hays?

  Yeah.

• 1:51:11Speaker 03

  Over and over again. I think that really compounds over time and matches with our like manufacturing strategy, our continuous investments in quality. Every one of our teammates is full-time teammates and like, all, all this capital investment is, it looks really good right now, but in 2018, this was super out of vogue for sure.

• 1:51:32Jordi Hays?

  Yeah.

• 1:51:32John Coogan?

  Yeah.

• 1:51:33Jordi Hays?

  Well, yeah, the, the beautiful thing with CPG, it is, it is incredibly competitive. You are going to do, if you're successful at all, you'll deal with a million knockoffs and new entrants. But you can look backwards and say like, or even just look at your business today and, and realize like, even with everything you know now, imagine trying to compete with yourself from zero. Like it would be an absolute nightmare, you know? So it's just the, the benefits of Great product, operational excellence, and then compounding.

• 1:52:02John Coogan?

  Talk more about the decline in alcohol consumption amongst young people. What are you seeing in the data? How real is the trend? And what are the key drivers of what's going on?

• 1:52:15Jordi Hays?

  Yeah, and how much, basically, how much does the alcohol industry hate Andrew Huberman?

• 1:52:22Jordi Hays?

  He basically, he basically needs to be in witness protection.

• 1:52:26Speaker 03

  Yeah, the, the new dietary guidelines were basically like, don't not drink alcohol. It was like, it was like as close to don't drink alcohol as it gets. And the industry was like, yeah.

• 1:52:40Speaker 03

  At the end of the day, like, I, I think a lot of this is potentially skewed by COVID. And, you know, generations that were maybe like, I mean, if you go back to the start of our careers, it was so easy, like, I lived above a bar in the West Village in New York. And like, I had friends in that bar every afternoon. It was so easy to find where people were after work. And I, I feel for this generation that like, is kind of losing the work happy hours, the mentorship and stuff. And I, I don't think we're going to have generations that don't love social connection and blowing off steam and having fun. I think the industry and the world has to meet people where they're at. And so I do think they'll normalize. But I also don't think, you know, in a world of cell phones and videos always on

• 1:53:21Speaker 03

  and like, high work performance expectations, it, it's going to be really tough to get back those like, volume drinkers as well. So I, I think you've got to layer in more occasions throughout the week. You've got to find ways to keep people at bars longer with moderate beverages. So I, the industry on the alcohol side will have continued volume challenges. And then there's like new non-alcoholic functional drinks too, of which THC is the most obvious. And those are not like, high volume drinks either, so.

• 1:53:51Jordi Hays?

  Yeah, they're low volume and they destroy your sleep, so.

• 1:53:55Speaker 03

  Yeah.

• 1:53:56John Coogan?

  Not a fan. Talk to me about label claims. The only real label claim that I see on here is non-alcoholic brew. It doesn't say it has creatine in it, or protein, or caffeine, or anything else.

• 1:54:09Jordi Hays?

  Protein beer.

• 1:54:10John Coogan?

  Protein. But I mean, you've reduced the calories.

• 1:54:12Jordi Hays?

  Have you guys, have you guys ever, have you ever made like a MVP internally of the protein beer?

• 1:54:18John Coogan?

  The high protein beer. 50 grams, why not?

• 1:54:22Speaker 03

  We've had some fun with like caffeine and protein and like funny videos and stuff. I do think there could be a world of functional beers in the future, but I I also think like beer and function is like just kind of different things for the most part. And so, but that being said, like one of the hardest things of starting a CPG business is like the plaintiff's bar and all the like how tight the FTC rules are from website to label claims to everything. And there are a thousand eyes waiting people for people to misstep even the smallest tripwires.

• 1:54:56Jordi Hays?

  And Yeah, that was why earlier last year, there was somebody, there was a viral brand doing like nicotine drinks.

• 1:55:04Speaker 03

  Drinks, yeah.

• 1:55:05Jordi Hays?

  And that that

• 1:55:07Speaker 03

  But at the same time, I mean,

• 1:55:08Jordi Hays?

  And that just looked like it was like, okay, you you're just you're just making stuff and selling it.

• 1:55:14Speaker 03

  Jordy, you don't think an Athletic Four Loco could work? An Athletic Loco? Athletic Loco has a nice ring to it.

• 1:55:23Speaker 03

  No, that one got cut out immediately.

• 1:55:24Jordi Hays?

  What's a what's a scale of the of the business today?

• 1:55:28Speaker 03

  Um, steadily compounding. Um, I guess we we've moved into like the top five of overall crap breweries out of 10,000 crap brewers, top 20 beer producers overall.

• 1:55:41Speaker 03

  Yeah, we passed 100 million in revenue in 2024 and have been growing very healthy double digits since then. Last year was the worst beer year of our lifetime, probably, and we had really strong growth into that. And, you know, we're just coming back with more exciting partnerships, more marketing spend next year as the business grows and kind of steadily just chugging along. And, you know, comparable, I think, could be the energy drink category, which Red Bull really put on the map in the 90s. Monster arrived in like 2002. And those brands didn't have a lot of 100% years. It was just a like 5 to 15% compounder for 25 years. And that's really what we're looking for also

• 1:56:21Speaker 03

  is just to like make really high quality beer, timeless marketing, and just ride that health and wellness wave.

• 1:56:28Jordi Hays?

  Yeah, that's always the I feel like founders can get a bit carried away of like, I'm making an energy drink. Look how big Monster is. It's like, or look how big Red Bull is. It's like, you don't, they didn't just like, be like, oh, yeah, we just executed well for six years and suddenly we're a $50 billion company. It's like, no, decades and decades and decades. And I think I I

• 1:56:50Jordi Hays?

  I get excited about TPG founders that are like, you know, I think of like Peter with David, where he, he doesn't want to sell out to the last gen. He wants to just compound enough, launch new products, launch new brands to get to the point where he is the, the 800 pound gorilla in the industry. And so I'm sure you've had a bunch of opportunities to sell and turn them down to date. So I'm a fan of the compounding.

• 1:57:18Speaker 03

  Well, you guys know better than ever too. Like the rules of private capital have totally changed since we launched the business. And we have like an amazing cap table through all that rejection I went through. And just people who are super excited about what we're doing with a really long time horizon. And, you know, there's the whole public versus private debate and like, do we want to go public and spend 80% of our time on the regulatory of that versus how great it is for awareness? And then the public can also invest in the business who are like super fans in it. So there's a lot of push pull on public versus private too, that we're working out.

• 1:57:54John Coogan?

  Are you getting any pushback from other alcoholic beer producers? We saw this with the milk lobby pushing back against like the alternative milks and saying, hey, you can't use the word milk. Are there words you can't use?

• 1:58:12Speaker 03

  There's actually like, the alcohol industry definitely tries to put up walls around things like this. We can't use like all the normal beer words like lager, stout, ale, like, you name it. And so like, we have to call our Mexican lager a copper. For example, our stout a dark. But I do, did look at like those analogues and Beyond Meat and companies like that and how they made enemies with the incumbent industry. And, you know, we want to make it really clear from day one, like, we're not out to stay in our soapbox and kill alcohol. Like, we're here to add to it, bring a lot of new consumers into it and actually create a really new, exciting, viable part of the industry that just helps build the whole thing. So yeah, definitely learnings from that.

• 1:58:58John Coogan?

  Well, thank you so much for coming on the time.

• 1:59:00Jordi Hays?

  Thanks for all the drinks, dude. We're working through it. We're working through it.

• 1:59:03John Coogan?

  I think, I mean, it says under half a percent. I think if I drink 50 of these, I can get a buzz going. So, hella high water here.

• 1:59:13Speaker 03

  Yeah, there's a major placebo effect. So, it's like having one with lunch or on stressful workdays or like my commute beer is my favorite beer to unwind. Like, yeah, it's like all these new occasions.

• 1:59:25John Coogan?

  It feels a little bit of a sky. I like it.

• 1:59:28Speaker 03

  Oh, it's delicious. Yeah.

• 1:59:30John Coogan?

  Thank you so much for taking the time to come chat with us.

• 1:59:32Jordi Hays?

  Great to meet you. Super, super impressed with everything you guys have built and come back on anytime you have news.

• 1:59:39Speaker 03

  Uh, thank you so much. Love the show.

• 1:59:41John Coogan?

  Thanks so much. We'll talk to you soon.

• 1:59:42Jordi Hays?

  Great chatting, Bill.

• 1:59:43John Coogan?

  Goodbye.

• 1:59:43Jordi Hays?

  Cheers.

• 1:59:44John Coogan?

  Let me tell you about TurboPuffer, serverless vector and full text search built from first principles on object storage. It's fast, 10x cheaper and extremely scalable. Our next guest.

• 1:59:55Jordi Hays?

  Switching gears just a little bit. We're going from non-alcoholic beer to AGI.

• 2:00:01John Coogan?

  We have Pat Grady and Sonya Wong from Sequoia Capital in the stream waiting room. Welcome.

• 2:00:05Jordi Hays?

  Welcome to the show.

• 2:00:06John Coogan?

  How are you doing?

• 2:00:07Jordi Hays?

  Cheers.

• 2:00:08John Coogan?

  Thanks for having us.

• 2:00:09Jordi Hays?

  It's Friday.

• 2:00:09John Coogan?

  It's been way too long, Pat. I haven't seen you on the show.

• 2:00:14Jordi Hays?

  We missed you too.

• 2:00:14John Coogan?

  I missed you guys. Most shows, it's like, you know, maybe once a year we'll have someone on.

• 2:00:19Jordi Hays?

  Invest like the best. It's like once every few years.

• 2:00:21John Coogan?

  We can just get you every week. We'll start scheduling next week's appearance too. Sonya, it's also been too long. We, we enjoyed the candles that you sent us after our, our last hangout.

• 2:00:30Speaker 04

  I'm so glad. I'm glad you had the ideas for this year's swag. Just wait.

• 2:00:33John Coogan?

  Yes. Is, is the conference, uh, it's still called AI Ascend?

• 2:00:37Speaker 04

  AI Ascend. It's, it's going to be on 4/20 this year. So that'll give you a break.

• 2:00:41John Coogan?

  Yeah, you were, you were early to the whole ascend trend. Everyone's talking about ascending this year. And so it's just a great brand for you guys. I love it. Um, anyway, take me through the article 2026. This is AGI. Why were you writing it now? What was the one thing that you saw? What was the inciting element?

• 2:01:00Pat Grady?

  Do you want me to start?

• 2:01:01Speaker 04

  Go for it.

• 2:01:02Pat Grady?

  I think there were two. Let me start with there were two purposes to the article. And there was something that we saw that catalyzed the article. One purpose was to kind of put a stake in the ground. Because there's this thing that people call the AI effect where once a technology is actually out there and working, we stop to believe that it's AI and we start to just call it by the specific name of the technology. You know, that's not, that's not AI. That's just our LHF, you know?

• 2:01:29Jordi Hays?

  Yeah.

• 2:01:29Pat Grady?

  And so, and so there's this mythical quest for AGI. And best we can tell, we're there. And so we just kind of want to put a stake in the ground and say, hey, look, we're there. And, and then you say, okay, well, what's the point of doing that? Why put a stake in the ground? Well, that leads to purpose number two of the article, which is it is time. This is meant to be a call to arms for founders. It is time to take stock of what capabilities are available in the world today and apply those to real world problems as vigorously as possible. And so there is enough great technology out there available to founders today to go solve so many real world problems. And particularly what we've seen over the last couple of months. And this is kind of the triggering thing for the article.

• 2:02:14Pat Grady?

  With Claude Code and Opus 4.5 and these long horizon agents, which to us are kind of the tipping point that's gotten us into AGI. Like in particular, what is possible now with that is sort of the third big inflection point of the last five years is pretty remarkable. And so it's kind of meant to be a call to arms.

• 2:02:32Jordi Hays?

  Yeah, we're not helping because we have physical goalposts.

• 2:02:35Pat Grady?

  Yes. Yeah, exactly.

• 2:02:37Jordi Hays?

  We always, we always move.

• 2:02:38John Coogan?

  We have to take the goalposts off if we've achieved.

• 2:02:40Jordi Hays?

  No, we, no, no, let's just mount, let's mount it to the ground. Like we actually have to.

• 2:02:45Speaker 04

  That's amazing. Your, your smell of AGI stuff was amazing.

• 2:02:50Pat Grady?

  Yeah, see, it's there. We're there.

• 2:02:52Jordi Hays?

  Yeah, yeah, yeah. Well, bolt it to the ground.

• 2:02:54John Coogan?

  You're in the goalpost now. You're physically in the goalpost because you have declared AGI. Take me through a little bit of the history of Sequoia, the history of previous technological revolutions. I don't remember a, you know, a 1999, this is internet. But, but as you reflect on the work the firm has done, what, what, what can you tell us and what can you share about how the firm has processed these, you know, broad proclamations about the impact of technologies that are coming and then arrival dates when they are ready? And that maybe changes the stance of the firm?

• 2:03:32Pat Grady?

  Yeah, I love that as a question. So thank you for asking that. We've been pretty quiet historically as a partnership. And so this idea of sharing our thoughts with the world is, is kind of new. And hopefully it's a useful service to the founder community. If you go back to our founding, so in 1972, when Don Valentine started Sequoia Capital, he was the go to market guy at a company called Fairchild Semiconductor, which is a household name for people who've studied the history of Silicon Valley, but, but not really outside of that. It was kind of like the OpenAI of its day, or it was the Nvidia of its day. Like it was the it company of its day because it was the first company to, to really commercialize silicon based transistors. Like it was kind of the company that gave Silicon Valley its name.

• 2:04:14Pat Grady?

  And as the go to market guy at that company, Don's job was to take this magical new capability and figure out how to apply it to real world problems.

• 2:04:22Jordi Hays?

  Yeah, make it useful.

• 2:04:24Pat Grady?

  Make it useful. And that sort of led him into venture capital because a lot of his customers were these founders and he just kind of fell in love with them and their quest to build these businesses. And so I mentioned that because we grew out of this semiconductor revolution where all of a sudden computation is a thing that was available to the masses. We moved from that into systems in the next generation with the, with the Apples and the Oracles, you know, taking these chips and turning them into more computing systems. We moved from that into the networking and PC era. Where all of a sudden you have endpoints on every desk in every office, thanks to the PC, and you can connect them all up with networks, thanks to Cisco and the router. We moved from that into a more sophisticated form of networking, which is known as the Internet.

• 2:05:08Pat Grady?

  We moved from that into applications, which are a more sophisticated way to make use of the Internet. Those applications started to show up on mobile devices. And then eventually, now that everybody has one of these mobile devices in their pocket, there's an enormous amount of data. People started doing interesting stuff with data, and now we have AI. And so this lineage of Silicon Valley has kind of built up over the decades, and each successive wave has built on the one that's come before. And being in this very fortunate position to kind of be in the mix on a lot of these transitions, and actually being the only partnership that's kind of made it through these different tectonic shifts and kind of has this institutional knowledge, you know, gives us this broader view on, okay, what's the importance, knowing what we know about past tectonic shifts,

• 2:05:53Pat Grady?

  what's the importance of the current moment? And with that, I'll hand it off to Sonya, because Sonya was the one who, you know, three, four years ago, prior to the release of ChatGPT, kind of called this for what it was and put out the original generative AI post back in the fall of 2022.

• 2:06:10Jordi Hays?

  Yeah, the other thing I think that's interesting about this moment is I feel like people have had this sense of like AGI will be here when it's just like so obvious in the economic data. And like, that's like, that's when it'll really feel like, okay, that's when you can declare it of like, it's here, it's working the economy. And I think part of why I appreciated your guys' piece is it's like, it actually is going to require a lot of human agency and like, human application of this. It's not just gonna, it may not just like, happen fully organically, running away by itself, right? And

• 2:06:42Pat Grady?

  Call of arms, now's the time, let's go. Yeah.

• 2:06:44Jordi Hays?

  Yeah, I wanted, I want to hear from you, Sonya, but I wanted to ask like, has there been any type of shift in founders coming and pitching Sequoia with like an entirely? Like, I felt like last year, I kept seeing like agent businesses that were exciting and the teams were talented, but I felt like they were just, in many cases, just like, kind of rebranded SaaS. It's like, okay, like, you're pitching me this as an agent, but like, if I log into the product, it's going to look like traditional software. And maybe that's the, this, maybe, maybe SaaS is evergreen and we're just going to live in dashboards

• 2:07:27Jordi Hays?

  forever. But I've, I kept wanting, like, wanting like more, basically. And I think we have started to see some new paradigms. But has there been any type of shift in terms of the companies coming in where maybe somebody spent a few years at a lab and they're like, okay, we're actually going to kind of, we've seen the future and now we're going to really reinvent the, you know, the entire product experience from the ground up based on this new set of capabilities?

• 2:07:50Speaker 04

  I'll start, but Pat is our app layer guy, so you should, you should, you should talk as well. We, we frame this with one of our posts, like from talkers to doers. And I think maybe that describes a little bit of what you're describing of like first iteration Gen AI companies, including some of the great ones. Like, it did feel like, you know, it was, it was a, it was next generation of SaaS, was how it felt like. They weren't actually getting work done for you. Part of the reason for this, Paul, the arm is like, we're going from talkers to doers, which is, and I think it is both the, long horizon agents is the thing, but it's both the underlying model capabilities and the harness around it. So like, these models can now take action and iterate and persist in the world around us. And so what we're seeing now is that founders are selling companies that are not just doing

• 2:08:35Speaker 04

  the, you know, the, you know, newer, brighter, newer, shinier version of SaaS, but actually something that takes real agency and takes real time horizons to execute. So for example, a traversal in the troubleshooting space, like when there's a bug that goes down, data dog says like ding ding ding, there's an issue. Typically, you have a war room that goes back and triages, what the hell happened, goes back and scrolls through dashboards, goes through traces, et cetera. Eventually, root causes it, fixes it. This is a, you know, several hour to Um, day-long process for companies.

• 2:09:05Jordi Hays?

  It's funny to think of the, it's, it's funny to think of the human analog there. It's like if you have an employee that comes to you and they just tell you there's a problem and they're not doing anything about it. They're just like, we got a big problem here, boss. And you're like, okay, like, what are you doing about it? And it's like, so traversal is like, okay, like, we're actually gonna be what a good employee would do, which is like, we have a problem. Here's like how we're gonna fix it and hopefully this just solved before it even gets to you, right?

• 2:09:30Speaker 04

  Exactly. And so in this case, there is no SaaS equivalent to that, right? This, this, it doesn't even feel like SaaS. It feels like talking to a coworker. And that's why the litmus test here is, you know, are you, are you, can you actually sell work? I'd say the founders that came into our door a few years ago, they all saw that vision. Like it's, it's not, it's not a new idea that you can build agents. I think what's new is that you can actually execute on that vision. Because these models are finally smart enough, capable enough to actually stay on the rails where you can just let them run.

• 2:09:57Pat Grady?

  And I would say founders have done a really nice job of making use of what is available technologically at the time. And I think, I think over the last five years, we've kind of had three big inflection points, you know, inflection point one was chat GPT when we saw the benefits of pre-training. And pre-training kind of gives you baseline world knowledge and some kind of instinctive judgment, so to speak. Inflection point number two was late 2024 when O1 came out and we had reasoning. And so the ability to kind of take your time and really think through particular questions and come up with deeper answers and better conclusions. And then inflection point number three has sort of been these last couple of months where we saw the impact of these long horizon agents. And so you've got some baseline, baseline knowledge, you can do some reasoning over that knowledge.

• 2:10:40Pat Grady?

  Now you can actually fail, recover, stay on task, persist all the way through to some sort of an outcome. And I think if you map those three capabilities to the applications that people have built, it's no surprise that the initial applications were, were kind of like good Q and A or good summarization or good basic content generation. Like it was the stuff that pre-training sort of gives you. The next generation of those agents could, could think a little bit harder, you know, like in the case of, um, In the case of Notion as an example, which I think has done a really good job of staying on top of all this stuff. You know, you could now tell Notion, okay, can you build me a database? And it could actually reason through like, what kind of database do you need? How should I build? And it can actually build you a database. It's pretty good.

• 2:11:23Pat Grady?

  And then now with these long horizon agents, we're finally getting to the point where you can make a couple of mistakes. You can take a test, a couple of hypotheses, and you can actually iterate your way toward the right outcome. And so look at, again, you can look at Notion and you can effectively have your personal chief of staff doing stuff that you would otherwise be doing while you were in a meeting, running in the background. You know, or in the case of Harvey, you can effectively deploy an AI associate after a data room or a deposition or some other legal workflow and actually complete it end to end while you're doing something else. And so I think this, maybe one way to put it is with this third inflection point, you don't have to babysit the model. You can just like give it instructions and let it go.

• 2:12:07Pat Grady?

  And you can have a few instances of it running in parallel. And you kind of go from this is a cool tool that allows me to be more productive to holy cow. This is kind of like a team of coworkers that I have at my disposal.

• 2:12:21John Coogan?

  Yeah, totally. Help me reconcile these two things that I'm feeling simultaneously. I agree with your declaration, the call to action, the, just the idea of so much opportunity for founders to use AGI to create all sorts of different value and products and services. At the same time, towards the back half of 2025, I was seeing Ilya Ondorashka talking about, hey, maybe we're in age of research and Richard Sutton and Andre Karpathy talking about some of the more, some of the more restrictive aspects of the research progress. And so is that something else that we're working on?

• 2:13:03John Coogan?

  How are you thinking about the progress that's happening in more purely research contexts? What even needs to happen there? Your role as venture capitalist in helping that happen? How do you blend those two things that both feel true, but are, but feel somewhat at odds?

• 2:13:21Speaker 04

  I think it's an end and we're putting our money on both in both camps. Okay. Like on the research side, there's this absolute fundamental research that needs to be done right now. Yeah. I'm personally, I don't know if you've, you guys have read Dave Silver and Rich Sutton's Age of Experience paper. Like that to me kind of outlines the premise like we're going from, you know, learning from existing data, internet data, et cetera. Yeah. Um, that was like the paradigm for pre-training to learning from experience, which is like reinforcement learning. The paradigm is you interact with the environment, you get reward signals, um, you improve. Yeah. Um, and so I think there's a lot that's gonna happen in terms of learning from experience and, and, um, have been following, you know, what Rich Sutton's doing with Keen. Yeah. Um, and very excited about some of that direction. I'll give you an example also, we backed a company called recursive intelligence. Mm-hmm.

• 2:14:04Speaker 04

  Uh, they formerly held the chip at Google and this is like recursive chip design. So similar to, um, in the game of Go, you can have, uh, you can play your, uh, the agent can play itself and get superhuman at Go. You can actually get superhuman at chip design and very surprising things come out of that. Like you end up having chip design that looks, you know, not like the Manhattan distance, kind of like square grid stuff. You, you actually have what looks kind of like alien-like chip design, uh, layouts. And so, um, we are absolutely back backing research labs. Um, but then if you like, if you freeze research progress where it is, I am convinced there is so much value to be built in the world. And it's just like, it's, it's just lacking founders, lacking agencies to actually go out and, and, and productize and then build companies around those.

• 2:14:49Speaker 04

  Like one of my examples, go ahead.

• 2:14:51Jordi Hays?

  I was gonna say, uh, how are you guys thinking about like more passive product experiences? Cause people talk about agents and most of the time they're talking about like giving agents tasks. Like, hey, go do this thing and spend as much time as you need on it and, uh, you know, we'll, we'll see the result, right? Like selling work, but when you think about actually working with people, some of the best employees are just without direct guidance, constantly doing work in. The background and coming to you only when maybe they need some type of like input. And so it's like more like you're just kind of reacting to the work that they're doing and and giving guidance. And so an example I would think of is,

• 2:15:31Jordi Hays?

  you know, with Harvey, it's like if somebody sends me legal docs, I should get a some type of notification from Harvey really when it's when it's already done some type of like.

• 2:15:41John Coogan?

  Like I already jumped on it.

• 2:15:42Jordi Hays?

  Diligence on it. I already did the work. You only don't. So I'm not even worried about.

• 2:15:47John Coogan?

  Yeah.

• 2:15:47Jordi Hays?

  I'm just, I'm getting a ping from Harvey. Hey, you should pay attention to this thing.

• 2:15:51John Coogan?

  Yeah.

• 2:15:52Jordi Hays?

  You're gonna need to make a decision here. I've done all the work. And so, and even like with the email experience, like I would love to log into my email and not see just like the order at which the emails came in, but like here's three decisions you need to make. And again, like when you work with great people, they're gonna, if they have five minutes of your time, they don't just tell you, here's the last 20 things that's happened. They're like, here's the three things that you need to make a decision on. And so I'm really excited to see more of these like passive product experiences where the work is just being done and you only need to chime in when it's really necessary or if you're actually a bottleneck.

• 2:16:29Pat Grady?

  Yes, I, I think this is a great question and great direction. And to me, this kind of gets at the software as a service versus services as a software. You know, the, the nature of software is really changing as we go from an era of apps to an era of agents. In the era of apps, you want a lot of surface area with your customers. You want them to spend a lot of time in your product. You want to put workflows around them. They're going to be really sticky that they're going to get accustomed to. In an era of agents, to your point, things can just be running passively in the background. The actual amount of surface area you have with your customers might be de minimis. The amount of time they spend in your product might, might be de minimis. So the nature of the mode that you build is different.

• 2:17:11Pat Grady?

  And the nature of the mode that you build, kind of what Sony was saying with the age of experience, it's all about context. It's all about like the environmental context of the job that you are trying to achieve. And the feedback that that agent gets as it runs off and does something and it comes back and you say, actually, you know, like you did this part a little bit, a little bit wrong. You need to do this part a little bit different. And I think in a perfect world, you have something, you have something like what Harvey does, which, you know, Harvey kind of bridges that gap where there are workflows today for people who, who want to do the work kind of how they've done it in the past, just a lot better, faster, cheaper with the benefit of the AI brain. And you can deploy agents to go out and do the work on your behalf and then come back to you when it is done.

• 2:17:53Pat Grady?

  And I think that, I think that, I think we'll see a lot of that over the next handful of years where there are companies who can kind of bridge that gap. Where they can live in the software world and have some of the workflows, better workflows because of AI, but some of the workflows people might be accustomed to. And then separately, they can deploy in the background with these passive agents that kind of function as coworkers who just come back to you when things are done. But it's two very different like design paradigms. It's two very different business paradigms. The fact that they're so different is one of the reasons why I think it's going to be tricky for a lot of the incumbent, you know, software companies to make the leap. The same way it was tricky for a lot of on-prem companies to make the leap to cloud.

• 2:18:31Jordi Hays?

  Yeah.

• 2:18:32John Coogan?

  Can you help me understand where you sit on the level of software eating the world? We talked to Tyler Cowen about one of the, one of the problems with AGI showing up in economic statistics is that AGI needs to live in a digital realm. It has to affect the, the, the, the digital economy, the services economy. And that there's so much of the GDP is made up of the healthcare sector, nonprofit sector. He highlights a number of sectors that are sort of AGI resistant or AI resistant. And so that's why he has longer timelines for significant impact to the overall GDP figures.

• 2:19:13John Coogan?

  Do you agree with that? Or do you think that there's something different about AGI that should allow tech to finally move the needle on those stickier industries?

• 2:19:25Speaker 04

  Well, I do think as like, I, I fully agree with the premise that, you know, this AGI stuff is only good. It's only embodied in the digital world right now. Right? And so like we, we seem to be, you know, getting tantalizing close to solving the entire digital world. That is very exciting. At some point, the physical world does become the next bottleneck.

• 2:19:43John Coogan?

  Yep.

• 2:19:44Speaker 04

  I think exciting thing is actually that like, hey, robotics is also going through renaissance right now as well. Like some of the smartest people are going out and working on robots. And so I do think like similar, just the pace of progress is so high right now and. I didn't think we're gonna have digital embodiment that was reliable this early. And now you can just let the thing run on your machine. Um, I think that increasingly we're gonna get to physical embodiment and we're gonna have a smooth curve there. Um, I, I do agree with the premise of like, if you want, if you believe in the super fast takeoff recursive self improving, like, you know, everything is just gonna, you know, go vertical line, like I, I just, yeah, we're, we're not gonna get there. We're not gonna get there without the physical world. We're probably not gonna get there, even if we have the physical world. I just think the reality of life is, is really messy.

• 2:20:26Speaker 04

  Um, so I don't think we're at, we're at ASI. We're not at that kind of like, takeoff moment whatsoever. That's not the stake in the ground that we're putting. What we're almost saying here is, hey, guys, this, this quasi-religious concept of AGI, like, is the thing, you know, generally intelligent? And, you know, instead of just waiting for it to arrive, it's here. Let's, let's, let's build that, that's here around them.

• 2:20:47Jordi Hays?

  There's so much, there's, there's such a, uh, there's kind of this toxic idea that, uh, I feel like is ingrained in so many people's head, which is like, AGI is just gonna do that.

• 2:20:58John Coogan?

  Yeah.

• 2:20:59Jordi Hays?

  Like AGI is just gonna do that.

• 2:21:00John Coogan?

  And then we're done. I will all be retired.

• 2:21:02Jordi Hays?

  AGI is gonna cure cancer.

• 2:21:02John Coogan?

  Yeah.

• 2:21:03Jordi Hays?

  And it's like, it's at least in the near term, from everything we're seeing, it's gonna be a human properly, you know, a group of, of talented people, properly using the tools to solve all the most pressing problems that we have. And so it's, and, and for young people, it's like,

• 2:21:18John Coogan?

  Extremely paralyzing to be like, in 2027, I'm either dead or billionaire retired on a space yacht. And so I could probably just chill for the next two years because it's, it's gonna be one or the other.

• 2:21:29Jordi Hays?

  No, and I worry, I worry that, I worry that we'll have this sort of like lost generation

• 2:21:33John Coogan?

  Totally.

• 2:21:33Jordi Hays?

  of people that have let, be ingrained in their head that, uh, it's not worth trying. It's not worth.

• 2:21:38John Coogan?

  Now's the time to build enterprise SaaS.

• 2:21:40Jordi Hays?

  Even, even I feel.

• 2:21:41John Coogan?

  You heard it from Sequoia Capital. Get in the arena, folks. This is called action.

• 2:21:46Jordi Hays?

  I feel bad because,

• 2:21:47John Coogan?

  Seriously?

• 2:21:47Jordi Hays?

  I feel bad because a, a friend of mine was pitching me this idea of like an, an, an agent to help consumers switch between, uh, like insurance products. Like an insurance company will, will sell you a policy. And then they'll just kind of jack up the price a little bit every year because they assume a lot of people aren't gonna churn.

• 2:22:04John Coogan?

  Yeah.

• 2:22:05Jordi Hays?

  And at the time, I think ChatGPT agent had come out and I was just like, Dude, like, like, the labs are gonna like one-shot this problem, like, right, like, I think pretty quickly. I think you could work on this for, like, you know, six months and get steamrolled. And like, it's very possible that like, if he had just focused on that one little problem.

• 2:22:24John Coogan?

  It'd be a decent business and he would have figured out something unique.

• 2:22:26Jordi Hays?

  Yeah, it's a big category. And so I, I felt bad.

• 2:22:29John Coogan?

  There's lots of examples.

• 2:22:29Jordi Hays?

  How much do you guys, um, I wanted to ask, like, like, like processing signal? Cause obviously there's so much noise right now and something that I've appreciated is kind of comparing like the X timeline to the App Store charts. Because every single day on the X timeline, like vibes are fluctuating and some news will break or some product will be released. And the common response is like, it's so over for XYZ company. And then you look at the App Store chart and it's like, the company that just launched a thing is like, not actually even in the picture at all. Like, they're not in the top 25 of any category. And so like, I feel like there's this insane disconnect between the real world.

• 2:23:09Jordi Hays?

  The real world is using ChatGPT all the time, but they're clearly not paying attention to X, our little bubble. So it's like, where are you guys really looking for signal and noise? Especially in the later stages where, you know, the, you're, you're investing in companies that should be out in the real world at, at some point.

• 2:23:27John Coogan?

  Yeah.

• 2:23:28Speaker 04

  Totally. Look, before I get to that point, I, I think it is so amazing that like all of this AI discourse is happening on, on X right now. Like, you couldn't imagine a world where, you know, all this dialogue was like happening and behind closed doors or, um, you know, scattered across different channels. The fact that it's all on X is amazing. Um, and, you know, it's a combination of research and hot takes and what's happening on the labs. It's like, it's, I think it's awesome that it's all happening in one place.

• 2:23:53John Coogan?

  It's remarkable for young people. They can just like jump in and learn by osmosis and understand.

• 2:23:57Jordi Hays?

  Yeah, it'd be bad if it was only happening in Valenor.

• 2:24:00Speaker 04

  Totally. I still have to figure out what the Alps comment was about. But anyways, putting that aside, like, yes, our like, our job is to like, you know, to kind of try to peep signal from the noise. We have, we're obviously doing everything we can in the background, credit card panels, web signals, et cetera. And I'll say, like, sometimes we see a, you know, trending web signal take on X, and it's just, it's just raw. Like, we look at our own sources of ground truth. The example, like, this, some of the stuff on, you know, ChatGPT is losing, losing market share. We actually cut it by, like, US, US web traffic. It's a very different story. And so for us, it's like, it's really important that we're on X. I think all of

• 2:24:43Speaker 04

  all the discourse happening here, very important, but then, like, let's, let's get to ground truth.

• 2:24:46John Coogan?

  Most importantly, just know that as venture capitalists, if someone refers to you as smog, it's sort of a compliment, but also sort of a dig. So that's what you need to know in terms of Lord of the Rings references for, for where you sit in the ecosystem specifically.

• 2:25:01Speaker 04

  Is that, is that shorthand, like Sméagol?

• 2:25:03John Coogan?

  Smog is the dragon that hoards all the gold and is an antagonist in The Hobbit, but does have the gold, which is kind of like what you do. You know, you got a lot of capital over there at Sequoia Capital. Sorry, Jordy, continue. No, what were you gonna say? Yeah, Pat, Pat, sorry.

• 2:25:17Pat Grady?

  Oh, I was just gonna say, you know, to the question on Signal.

• 2:25:21John Coogan?

  Yeah.

• 2:25:22Pat Grady?

  You know, interestingly, one of the big themes of the last few years on, on X, thanks to Lulu, is the go direct idea. And I think for us, go direct is a little bit of try to, you know, let the world know what we're thinking, but probably even more so, just go direct to the founders. You know, the best source of signal we get is the founders. We spend, you know, we spend many hours every day just meeting with founders out there doing interesting things. And we kind of have the ability to do primary research that not everybody gets a chance to do. And I think that's, that's still the best source of signal.

• 2:25:52John Coogan?

  Yeah. What's, uh, what is changing in the AGI age in terms of adoption and just AI diffusing itself through the economy? This is something that obviously every company has to deal with because they can build a great product, but then they need to get it into businesses if they're in enterprise SaaS. They need to get adoption, make sure that it's being used correctly. There's the forward deployed model. There's self-serve models. Is anything changing there structurally? Or is it all just, you know, the same playbooks?

• 2:26:23Speaker 04

  And one thought is like, I think we're going from, over the last second, we went from sales-led growth to product-led growth.

• 2:26:28John Coogan?

  Yeah.

• 2:26:29Speaker 04

  I think we're going from product-led growth to agent-led growth.

• 2:26:31John Coogan?

  Okay.

• 2:26:32Speaker 04

  And I think you see this most clearly, actually, if you're using, for example, Claude Code actively. Like, it says, hey, you should use for database, you should use Superbase. For hosting, use Vercell, et cetera. And like, it's choosing for you the stuff you should be using. And I think increasingly, like, so it's most obvious to me with code, like, your agent is choosing your infrastructure.

• 2:26:53John Coogan?

  Yeah.

• 2:26:54Speaker 04

  But I think it's gonna happen across the entire economy. Like, your chatbot is gonna tell you, like, hey, this is the, this is the place, this is the travel you should be booking. This is the, you know? And, and so I think we are going towards-

• 2:27:05Jordi Hays?

  It's like back to channel, channel sales, like, old school.

• 2:27:09Speaker 04

  Yeah, old school. But I think that the difference is, like, you don't have competing incentives here. And I think the OpenAI guys tried to raise, like, principles that I think are, it's a very principled take on, you know, how do you want to tell users what to use? And I think product-led growth brought us closer to the vision of best product wins, but like, ultimately, people are still lazy. They can't read all these reviews. They kind of default to, like, what looks cool on the website. Whereas agent-led growth, like, your agent has, remember, your agent has infinite time to go and make these rules for you. And so it can go and, you know, read all the documentation, read all the user comments, like, figure out for your use case.

• 2:27:42Jordi Hays?

  Also has an experience, like, building on top of the infrastructure. It's like, like, eventually, it's like, well, you want-

• 2:27:48Speaker 04

  Yeah, it knows.

• 2:27:49John Coogan?

  It feels like, yeah, reputation, reputation management is gonna be very important. The way you show up in these LLMs is important, both in the pre-training and in all the research that they do. And then also, this whole idea of, like, you know, SaaS companies that don't have customers, they have hostages. Well, if it's one click or one prompt to replatform from the database that has, that was trying to keep you hostage, to the database that's trying to keep you happy-

• 2:28:14Jordi Hays?

  Yeah, but it's also, like you're saying, I think it's good alignment. Compare it to, like, if you're building a home-

• 2:28:19John Coogan?

  Yeah.

• 2:28:19Jordi Hays?

  And like, the, the person, like, you know, like, running, like, the, the construction firm that you choose, like, uses really bad cement-

• 2:28:27John Coogan?

  Yeah.

• 2:28:27Jordi Hays?

  And then you have, like, a terrible foundation. Like, you're gonna be mad, you're actually gonna be mad at, at, like, the, the firm-

• 2:28:33John Coogan?

  Sure, sure.

• 2:28:34Jordi Hays?

  Because you're like, why did you pick this?

• 2:28:35John Coogan?

  Yeah.

• 2:28:35Jordi Hays?

  You should've known. This is like- And so I do think there's a good alignment where it's like the best, like you're saying, the best product should win.

• 2:28:41John Coogan?

  Yeah.

• 2:28:41Jordi Hays?

  Because the the agent is incentivized to make sure that you're on the best like footing and using the best product.

• 2:28:47John Coogan?

  Yeah.

• 2:28:48Jordi Hays?

  Cost is a factor, quality, reliability, all these things. I do think there's that good alignment.

• 2:28:53John Coogan?

  That makes a lot of sense.

• 2:28:54Speaker 04

  The agent could have accelerated this, you know, best product wins notion. And best product for the human is maybe different, but best product for the agent sometimes.

• 2:29:01John Coogan?

  Fantastic. Well, thank you so much for taking the time to come and chat with us today.

• 2:29:05Jordi Hays?

  Super fun.

• 2:29:05John Coogan?

  Have a great weekend and we'll talk to you soon. Pat, we'll see you next week. We'll see you next week. I can't wait. I can't wait.

• 2:29:12Jordi Hays?

  Two for two.

• 2:29:14John Coogan?

  Have a great rest.

• 2:29:14Jordi Hays?

  Great to see you guys. Have a great Friday.

• 2:29:16John Coogan?

  Goodbye. Phantom Cash. Fund your wallet without exchanges or middlemen and spend with the Phantom card. Meet Phantom Cash.

• 2:29:24Jordi Hays?

  The Andrew Reid special.

• 2:29:25John Coogan?

  A Sequoia Capital company. We have some breaking news before we bring in Sean Frank. Sam Altman has taken to the timeline. He posts the melting smiley face emoji with a screenshot from Elon's court filing. The in the court filing, here's what it said. Musk insisted that any new entity, quote, "support the nonprofit mission" and that OpenAI remain, quote, "essentially a philanthropic endeavor." Now, Sam Altman's putting it in the truth zone. He says, "Here are the actual September 2017 call notes from Elon. Coming week's

• 2:30:06John Coogan?

  top priority. Gotta figure out how we transition from nonprofit to something which is essentially philanthropic endeavor and is B corp or C corp or something. Must tell the story and not lose moral high ground. Absolutely vital." So we'll see if we'll see how Elon reacts to that. But if that is the case, Sam Altman is upset about it. He says Elon is cherry picking things to make Greg look bad. But the full story is that Elon was pushing for a new structure and Greg and Ilya spent a lot of time trying to figure out if they could meet his demands. I remembered a lot of this, but here's a part I had forgotten, quote,

• 2:30:48John Coogan?

  Elon said he wanted to accumulate $80 billion for a self-sustaining city on Mars, and that he needed and deserved majority equity. He said that he needed full control since he'd been burnt by not having it in the past. And when we discussed succession, he surprised us by talking about his children controlling AGI. I appreciate people saying what they want and think it enables people to resolve things, or not, this is Sam speaking, he's no longer quoting. But Elon saying he wants the above is important context for Greg trying to figure out what he wants. And Hope's Revenge says, "Oh my God, girl, he's such a snake."

• 2:31:33John Coogan?

  The drama continues. The drama continues on the timeline. Well, let me tell you about app-lovin', profitable advertising made easy with axon.ai. Get access to over 1 billion daily active users and grow your business today. And we have a happy app-lovin' customer in the restream waiting room. We have Sean Frank from Ridge, he's the CEO. Welcome to the show, how you doing? Good to see you. Ooh, you got the polo bear on. What's this?

• 2:32:03Jordi Hays?

  Is that the Winter Olympics Team USA?

• 2:32:06Sean Frank?

  It is the newest drop, guys. You guys like it? I put on this for you.

• 2:32:09Jordi Hays?

  Insane.

• 2:32:10John Coogan?

  Fantastic.

• 2:32:11Jordi Hays?

  Insane, brought the, brought the.

• 2:32:13John Coogan?

  Okay, so, emergency podcast, we have why we wanted to have you on because OpenAI introduced ads. How quickly are you thinking about ramping up, testing it out?

• 2:32:24Jordi Hays?

  Is Connor waiting in line outside of OpenAI to try to be the first?

• 2:32:29Sean Frank?

  Dude, no joke, we are, we would be the first advertiser if they let us. You know, we measure a lot of traffics are still at Ridge, and the most. Like revenue per user out of all traffic ever, I mean, Google branded Meta, whatever, is ChatGPT. We get like $12 from every one of those sessions and like, you know, for Meta, you'd be lucky to get a dollar per user, right? So the revenue per session from a AI user is just through the roof. And, you know, we have some data, I don't know if you wanted to share it or not, but like Northbeam put out their 2025 report and they track, you know, probably 2,000 merchants, billions of dollars in revenue. And AI search in January was like 0.01% of

• 2:33:11Sean Frank?

  all traffic on all e-commerce websites. And now it's like 0.7. So it's just like shot through the roof.

• 2:33:17John Coogan?

  Yeah.

• 2:33:18Sean Frank?

  And there's not ads yet. As soon as ads roll out, I am so excited.

• 2:33:22John Coogan?

  Okay, we would expect the dollar per user to fall based on ads, correct? But do you still expect them to be high intent? Because there were, you know, we were talking to Ben Thompson about this and he was saying that they should have launched two years earlier because it's going to take a while for the ads product to work its way up. I imagine that the ChatGPT users that land on your website are super high intent because they've probably been asking ChatGPT about your product specifically, or wallet specifically, or product specifically. Now, if they're researching the Roman Empire and they just see a little ad at the end that you purchased and it's not targeted at all, they might click on it and check it out, but it's probably going to be lower intent. How optimistic are

• 2:34:04John Coogan?

  you about ChatGPT ads delivering at a level above Facebook quickly?

• 2:34:11Sean Frank?

  Well, Google is rolling out their direct AI offer, right? And what that is, is if someone asks, hey, what are the best gifts for dads, right? They're gonna ask that specific, you know, question.

• 2:34:23John Coogan?

  Yeah.

• 2:34:23Sean Frank?

  I can now bid to show up with an offer for those people. It's like, hey, the ritual, it's a really good gift for dads.

• 2:34:29John Coogan?

  Yeah.

• 2:34:30Sean Frank?

  And they're gonna give you 20% off right now if you click this link, right? So it's incredibly bottom of the funnel, like people who are ready to purchase. And that's Google's ad offering inside of AI.

• 2:34:40John Coogan?

  Yeah.

• 2:34:40Sean Frank?

  And that's coming out soon. So I think that was like, what pushed ChatGPT over the edge to roll this out? They'd probably do a carbon copy of that. So it's not going to be discovery ads like you get on a AppLovin or a Meta, right? What it's going to be is... You know, like that last point of sale, almost like an affiliate, like push you over the door, like a honey competitor or whatever, which I think is.

• 2:35:03John Coogan?

  Would you be unhappy if the offering was just, give us a dollar amount per customer and we'll go find you customers, something that's fully black box, you're not doing any demographic targeting, no keyword targeting, or would you like those features?

• 2:35:20Jordi Hays?

  Well, that historically, if you can tell somebody like, here's 20 bucks, find me customers, and you're, you just look at your average order size, that's like the holy grail of advertising, but it usually ends up being

• 2:35:33John Coogan?

  Yeah.

• 2:35:34Jordi Hays?

  A bit more complicated.

• 2:35:35John Coogan?

  But is the, is the initial product that they roll out, does it matter to you? Or will you just take what they, what they give you?

• 2:35:43Sean Frank?

  Yeah, it's, it's what we've seen, the organic traffic from any AI search is already so valuable, right? Any way to get more of that, we would, we would spend a lot of money for, but you know, the beauty of the Facebook ad product is that they figured out a way to take half of everybody's revenue, right? Like affiliate is, like people.

• 2:36:05Jordi Hays?

  Let's give it up for Mark Zuckerberg. I'll take half. You do the work, I'll take half.

• 2:36:12Sean Frank?

  Yeah. TikTok shop affiliate, people don't want to give more than 15% of a sale. They're like, oh, that is too much, right? But all performance marketing is, is just a, is affiliate in a different coat, right? It's like they're, they're able to, like, oh, you're going to generate your demand. And if you have a better offer, you'll get a better return, right? But really, they've just figured out exactly how much money they could take from everybody at the optimal level, and that's why they do $100 billion a year in revenue. So if the offer from ChatGPT and Sam Altman is, hey, give us 40% of your revenue and we'll give you new customers you wouldn't get otherwise, I would take that deal because I'm already giving Mark Zuckerberg 50%, right?

• 2:36:52Jordi Hays?

  One thing that's exciting is I think once people start seeing more, once they start seeing ads for products, they will just naturally start using LLMs for more product research. Like I still find myself. If I'm like, if I'm doing like product research, I'll still go to Google search quite a lot, even though in many ways the experience is inferior just because I'm so trained on that. And so I think like as they roll out ads, they're just, there's going to be like more organic activity. So hopefully as a brand, you should be getting more people just landing on the site organically because they're just finding out, finding out through their own research.

• 2:37:30Sean Frank?

  Totally. Half of all product searches start on Amazon. So like Amazon has been able to take over the product search box from Google, but they spent $500 billion in two decades doing it. So if ChatGPT can start stealing some of that, you know, glow that Amazon's been able to do, they'll have an amazing affiliate business and ads business and whatever you want to call it.

• 2:37:49Jordi Hays?

  Yeah. What do you, what do you, you, you guys sell a ton on Amazon. What, what do you think Amazon's like play here really is? Because they obviously don't want to give up the golden goose of their massive ad revenue business. They want to like protect that Alexa is like not even in the picture as far as I'm concerned in terms of like a shopping assistant. So what's the play?

• 2:38:16Sean Frank?

  Well, you know, Amazon has a beautiful ad arbitrage system where they spend, they're like the number one spender on Amazon, on Meta and on Google, because they can spend $2 to get a user and then those users click on a bunch of ads on Amazon. It's a free money machine that they've invented. So, yeah.

• 2:38:35Sean Frank?

  Yeah, I think they would love to partner with everybody because once you're on Amazon, you're still going to click around, you're still going to do shopping and they have an ad product. The more interesting question is what does Shopify do? Because, you know, Shopify is a product feed of all these merchants, right? But will they be able to win over any sort of, of these deals? They don't have an ad product. Like they make all of their money on me hosting my website and then a percentage of the sales I drive. And it's a very small percentage. It's a payment processing company. So it's like, how are they going to survive if more and more of those transactions are happening inside of ChatGPT or inside of Gemini? I think Amazon's fine. They have a big enough product, you know, fee, they could feed it in everywhere.

• 2:39:18Sean Frank?

  And if you do come to Amazon, they get all their money back with all the clicks.

• 2:39:23Jordi Hays?

  But walk me through, walk me through the risks of Shopify because if I am, if I'm looking to, there's a lot of, there's a lot of brands, like there's a ton of, I would say like the real like shopping that I've done over the last five years is like almost always on Shopify stores, right? Like Amazon for like essentials and things like batteries and things of that nature. But I feel like a lot of my, like, like, like lifestyle consumption is happening on Shopify. And so you mentioned that, that not having that like ad flywheel,

• 2:40:03Jordi Hays?

  but am I not still like discovering Ridge and just popping over to your Shopify store and like to complete the transaction? And if they're effectively a payment processor, like they're still making their money?

• 2:40:16Sean Frank?

  Right. Well, it's just if websites continue to be important. Like, you know, I, I'm, I'm going to operate on the assumption that all-

• 2:40:25Jordi Hays?

  But calling, calling Shopify just like a website company, like in my view, it's like a catalog and it's a CRM and it's a payment processor.

• 2:40:35Sean Frank?

  Oh, for sure. It does all those things incredibly well. Bro, I'm so bullish on Shopify. I love, I love Shopify as a thing. But the challenge is the website will become less important in the future. Just like mobile apps had a moment, they're not important anymore. Where's the last time you guys opened a shopping mobile app? And before that it was catalogs, right? So like the user experience has, has become easier and easier and easier. And the way you interact with brands has changed. And I think the website will kind of be replaced just by asking chat to buy you stuff. And maybe you'll still go to websites, but kind of like how you still kind of open catalogs and-

• 2:41:12Jordi Hays?

  I don't open catalogs. Straight, straight in the recycling. I'm like, I did not ask for this.

• 2:41:18Sean Frank?

  Totally, right? And that's just like the worry of the website. So Shopify is incredibly important for us, but they do have to plug into every single L L M, right? They have to be that product feed everywhere.

• 2:41:29Jordi Hays?

  Yeah, but I think they're they're they've taken the approach of just like being more quick to partner with the L L Ms than an Amazon has because again, they don't have that same like they have like less to lose, right? They're not worried that because they don't have an ad business, they're not like like I feel like Amazon has to be a lot more. When you look at the when you look at the marketplaces that have partnered with Chat G P T, it's like Etsy, right? Etsy doesn't really have anything to lose, right? Like they're they just want more traffic, more more sales, like they'll take it however they can get it. Whereas like Amazon has something to lose.

• 2:42:08Sean Frank?

  Right. You know, and it was big news when Shopify partnered with Chat G P T, Intel, Amazon partnered with Chat G P T, and Amazon comes in with an equity round, but like that now all of those products are going to be feeding in Chat G P T. And that's one of the the worries of Shopify. It's like, how do you stand out? Right now, it's like beautiful brands with beautiful websites with shopping experiences, and that is different from what Amazon offers. But if all of those products are just going to be discoverable inside of Chat G P T and competing for the same space, I don't know the value of my website in three years. Like, that's one thing that we're worried about at Ridge right now.

• 2:42:46John Coogan?

  Well, what about ad creative? I there's this weird trend where D to C companies were effectively making TV commercials with TV production techniques, cinema cameras, high res photos, whatnot. But what wound up working on TikTok and Instagram reels and YouTube shorts was a lot of U G C, a lot of stuff shot on iPhones, a lot of stuff that feels more natural. Is there a world where maybe you want to get good at creating Sora videos or or A I generated images, even if they don't look like a real photo,

• 2:43:27John Coogan?

  it looks more natural within that app, within the chat app, you're expecting to see A I images. And so you want to lean into A I image versions of your products, even if the background's a little little crazy hallucinogenic, it's what people will be used to, they'll be in that mode.

• 2:43:45Sean Frank?

  Yeah, I think when ChatGPT launches their ad product, it's probably going to be thumbnails to websites with really aggressive offers.

• 2:43:53John Coogan?

  Yeah.

• 2:43:55Sean Frank?

  But right now, in our ad account, if you guys go to the Facebook ad library and pull up Bridge, we are running full-blown AI videos, right? And they are, they're getting spend and they're winners in the ad account.

• 2:44:05John Coogan?

  Yeah.

• 2:44:07Sean Frank?

  So, we're all probably underestimating how much it's going to affect the ad industry. It's like by the end of the year, video is going to be, if you want to make AI video, it'll look just like human video. And like the highest level productions are already being basically monopolized by AI. And so it wouldn't surprise.

• 2:44:26Jordi Hays?

  Something I've been, something I've been thinking about that feels inevitable is, you know, two years from now, we'll look back and laugh that people would like make an ad and then serve the same ad to like a hundred thousand people or a million people. Cause it's like, if you're going to spend a lot of money serving somebody an ad, you should serve them the most like hyper-targeted, like, Sean, Frank, I have an athletic brewing company beer for here for you. I got an offer for you, Sean, just click the link and check out. Like eventually it will just get so, so, so, so targeted that it's basically like ads are being generated on the fly for individual customers.

• 2:45:04Sean Frank?

  Oh dude, that's for sure coming. Meta's working on it. And not only that, they'll put you in the ads. They'll be like, hey, look how cool you can look in this sweater. You should buy this sweater. And they want to do that because then the CPMs just go up. Right now I get a $12 CPM on Meta, they would much prefer me get a $200 CPM and just show way less ads to everybody, right? So I think that the personalization of ads is coming and we've already just seen, like in my ad account right now, today, maybe a third of all my spenders will be AI ads. And that's crazy.

• 2:45:35John Coogan?

  That is crazy. Double-click on the, the, the AI ads that you're running, are you running stuff that you could shoot that's indistinguishable from human photography, human videography? Or is there a unique value to saying, look, there's just no way that we could take a Ridge Wallet to the top of Mount Everest, shoot it into space, have it turn into cake, have it turn into a cat, like crazy stuff that's just impossible, maybe with like a massive CGI budget, but truly like breaking the laws of physics? Or are you just trying to do like, hey, it's just a Ridge Wallet on a beautiful background and you know, we were able to generate that?

• 2:46:12Sean Frank?

  Yeah, so really what it is, is, you know, we have wallets with every college. And let's say there's 200 colleges in America, right? Now, I could get 200 jerseys, and I could get 200 fans, and I could have them talk about this particular wallet with this jersey, with this fan, like a very bespoke ad, and then serve it into a market like Ohio. I could do that, but that would cost, I don't know, $85,000 to run that campaign. Or I can have one guy do it in one day with a Higgs field or whatever, right? So that's what we're doing right now.

• 2:46:46John Coogan?

  Shout out to Higgs field.

• 2:46:47Jordi Hays?

  Are you guys using Higgs field?

• 2:46:48John Coogan?

  We're having them at the show in just a couple of minutes.

• 2:46:51Sean Frank?

  Yeah, I love Higgs field. So, yeah. And I don't think like, I think normies are using ChatGPT now, like it fully broken through the mainstream. But like, all of the tools around that, I mean, everyone knows Lovable or Bolt new. But like, if you want to make videos at that scale, Higgs feels like the best, easiest way to do that.

• 2:47:10John Coogan?

  Yeah, so the pipeline is, you specifically want to multiply your creative. So you are filming one human video, and then you're creating variations with AI. Is that the correct use case right now, as that example?

• 2:47:23Sean Frank?

  No, no. So, so what we're doing is we have B-roll of actual wallets being used that we've shot, right? But we need an opening hook of a Buckeyes fan, right, in a jersey or whatever. So that is being done with AI, and then intros to the wallet.

• 2:47:38John Coogan?

  Got it, okay.

• 2:47:39Sean Frank?

  And you could pull up our ad account right now, there's a woman like Hunter, she's walking, talking about like, hey, like, I bought this for my husband, he's like, you know, whatever. That, she doesn't exist, that is all AI.

• 2:47:53Sean Frank?

  And it's because for us to find a woman hunter who's out in a field or whatever, we could do that. It would just take, you know, two days, and it'd probably cost $2,000. And we can test that concept right now in real time inside the Facebook ad library, so.

• 2:48:06Jordi Hays?

  It's gonna be interesting. I'm so curious to see what happens to the brands that like, try to take like, some type of like, moral, aesthetic, or ethical high ground and just say like, we never use AI? And like, what actually happens to those?

• 2:48:24Sean Frank?

  It's one of those things. Yeah, it's like not using AI. It's like, it's like if somebody said like, yeah, we don't use computers. I'm like, I don't even know what you mean.

• 2:48:32Sean Frank?

  It's like everything's AI. Everything's gonna be AI. So, um, look, incredibly bullish on uh ads coming to any surface of the internet. So if there's any surface of the internet that doesn't have an ad, I would love an ad to be there. Uh, so you guys.

• 2:48:52Sean Frank?

  You guys did the app loving ad read. Um, brand new to e-commerce and I spent millions of dollars there and I love, I love it as an ad product. So more of that is just really good for me. So if it comes to Gemini or ChatGPT, no, I just don't think they'll do big, beautiful display ads. I don't think there'll be any video ads. It's just gonna be, hey, you're looking for a gift, Ridge Wallet will give you the best price ever right now. And then they'll take a 30% commission.

• 2:49:17Jordi Hays?

  I really wanna see more flashbangs come to the internet.

• 2:49:22John Coogan?

  Watch out, watch out. We got you.

• 2:49:28Jordi Hays?

  Do you have any flashbangs on your podcast? You're the, you're the one show that we would give you the, the, the effect if you wanna, if you wanna flashbang your boys.

• 2:49:36Sean Frank?

  Okay, cool. I'll get the ad rights to that.

• 2:49:39John Coogan?

  We also have a horse that runs across the screen now.

• 2:49:41Jordi Hays?

  We'll, we'll save that. We'll save that. For right now.

• 2:49:45John Coogan?

  Uh, wait, have you, have you, uh, have you used any other of the AI ads, uh, like AI? Basically, like I heard perplexity was rolling out ads in their product. Did you demo that? Have you, have you thought about using that? I know it's like smaller and earlier. Do they, are they actually live? You have any experience there?

• 2:50:07Sean Frank?

  No, and I have a list of in front of me, like, I told you earlier, Northrop did a report.

• 2:50:13John Coogan?

  Yeah.

• 2:50:13Sean Frank?

  And ChatGPT is 99.5% of all AI traffic to e-commerce websites right now. So.

• 2:50:21John Coogan?

  So it's a big one. So this is a big announcement today. So, uh, yeah, what does it take to actually get Ridge live?

• 2:50:28Sean Frank?

  I don't know, man. You guys, you guys know Sam, dude. Hit him up. Say he's got his first paying customer.

• 2:50:32Jordi Hays?

  He's a little, he's a little busy today.

• 2:50:36John Coogan?

  He's gonna go back and forth between Oakland and traffic. No, uh, yeah, we'll, we'll, we'll put in a good word for you. I would love to.

• 2:50:43Jordi Hays?

  What, what, what consumer, what kind of broader consumer trends are you tracking this year? We were talking about the sauna wars in New York City. Uh, people setting up these like bath houses. I was somewhat bearish on the trend like nationally. I just think there's a lot of places in America where people will be like, am I going to pay a couple hundred bucks a month for this like sauna, like bath house membership? Or do I just want to buy one? Uh, you know, for my house and, and, um, uh, but what, what are you tracking?

• 2:51:14Sean Frank?

  Uh, well, on the sauna wars, I mean, Paws is a franchise-based sauna business. They have them in Venice. They have them in Southern California. I was at a e-commerce or like a private equity conference. I think those guys are going to expand aggressively. So I think they're selling.

• 2:51:28Jordi Hays?

  Yeah, but here's the thing. I used to live down the street from a Paws. I would go there. I enjoyed it. I was like, I like using a sauna and I like using an ice bath. And so I just bought one because it was like a hundred dollars every time I went. I just did the math and I was like, it's nice to go there, but it's, it's nicer to just have it in my house. And so that's, that's one of those things. Like I, I don't know how much like actual spend that they can capture long-term or what the LTV is. Like if you get somebody hooked on using the sauna, eventually they just run the numbers, right? It's not like a gym where it's like a gym, I'll pay the, uh, however much it is a month because it's nice to go somewhere out of my house to work out and I don't want 300 different machines and all these different plates. So

• 2:52:13Jordi Hays?

  I'm not convinced that it's actually going to scale that well outside of, you know, major metros like LA and New York.

• 2:52:21Sean Frank?

  Yeah, also, the cost per use of a gym is really low compared to a hundred bucks every pop of a pause. But they're gonna expand like crazy and it'll be a great private equity transaction for somebody. But yeah, long term, I don't think it's a good trend. The thing we're most interested in is fiber. I think fiber is gonna have a protein-like moment. And protein's been like on a mega trend for 20 years or whatever and has billions of dollars in spend behind it. You know, creatine had like a little taste of that, but fiber will be like the next, you know, thing that even reaches something like a protein. So we think fiber is like the obvious big trend right now that's going mainstream.

• 2:52:59Jordi Hays?

  Will we see, will we see you, you guys enter, enter the category this year?

• 2:53:04Sean Frank?

  Oh, we're secretly in the fiber space already. So we're not talking about it, but we have, we have a brand bubbling up. We have real customers that are paying. They don't know what's behind Ridge, but we'll talk about that maybe offline.

• 2:53:16Jordi Hays?

  Amazing. So you're gonna post your revenue every single month to invite thousands of competitors into the category, right?

• 2:53:22Sean Frank?

  Yeah, yeah, seems to be the smartest thing to do, right?

• 2:53:25Jordi Hays?

  It's like, I, the, the, the build, the build-in public movement brought to consumer is just an absolute nightmare. It's like, if you brag to the world about how much revenue you're doing, there are gonna be smart people that enter your category and they're gonna do it fast and they might out-execute you. I don't think they'd out-execute you guys, but I've yet to see, see a consumer founder build in public that didn't ultimately regret it.

• 2:53:52Sean Frank?

  Oh, yeah, you know, we're pretty public with Ridge just because I think you have to be stupid to try to sell wallets in 2026 or whatever.

• 2:53:59Jordi Hays?

  Yeah, but, but, but for you guys, it was, it was never like you were just like, here's our investor update. I'm publishing it because it's so good. Like you guys don't have investors, but like it was never like, I'm gonna flex monthly on the timeline, which is the approach that I think a lot of people have had, like on, on the, the consumer side.

• 2:54:21Sean Frank?

  Yeah, I mean, consumers and I fight, man. Like there's no moats at all. It's, it's the digital equivalent of opening a restaurant, I think. So, you know, like you're, you're fighting for every single transaction, right? You guys are just having, you know, Sequoia on talking about it's a great time to sell enterprise SaaS because you guys have hostages and not customers. And it's like, yeah, I would love, I would love to have.

• 2:54:44John Coogan?

  Yeah, there's truly no lock-in. Once you buy one, it's not that you have to come back the next year, whereas for a lot of enterprise SaaS, if you stop paying, your entire business shuts down. So.

• 2:54:56Jordi Hays?

  Yeah, the moat is like scale, operational excellence, but those things like those things can erode. Very team-based.

• 2:55:05John Coogan?

  Well, thank you so much for taking the time to hop on.

• 2:55:07Jordi Hays?

  It's great to see you. Next time you come on, come in person. We know it's not that long of a drive.

• 2:55:13Sean Frank?

  Dude, I would love to and.

• 2:55:15Jordi Hays?

  Wait, once you're, once you, once you actually have the, the OpenAI ad platform live, let's come here. Let's put it on the big screen. We'll get a bunch of monitors and we'll just monitor the situation together.

• 2:55:27Sean Frank?

  And we'll clap every time a sale comes in.

• 2:55:30John Coogan?

  Yes, yes, yes. And, and thank you for hooking the team up with Ridge Wallet.

• 2:55:37Jordi Hays?

  Oh, yeah. You guys are too kind.

• 2:55:38John Coogan?

  Uh, I was in the gym this morning with some of the folks. They had the suitcase. Look at the suitcase. There it is in the corner. Every single member of the team is rocking a Ridge suitcase. There are more Ridge wallets than you can possibly count in this Ultra Dome.

• 2:55:53Jordi Hays?

  It's amazing.

• 2:55:53John Coogan?

  We're huge fans.

• 2:55:54Jordi Hays?

  We love you.

• 2:55:55John Coogan?

  I carry Ridge Wallet every day. I love it.

• 2:55:57Jordi Hays?

  Talks in.

• 2:55:57Sean Frank?

  Brothers. Thank you. Keep crushing. Goodbye.

• 2:55:59John Coogan?

  Goodbye.

• 2:56:00Jordi Hays?

  Goodbye.

• 2:56:01John Coogan?

  Restream, one live stream, 30 plus destinations. If you want to multi-stream, go to restream.com. Uh, I want to talk about ads more. I want to talk about vibe.co's ads. They're a sponsor of us, but they've also been burning up the timeline with a number of billboard ads in San Francisco. Sheil Monat, friend of the show, says these ads are very clever. What else is in the collection? And I got a preview of some other ones. So this is Jensen on, Target Jensen on TV. That's a brilliant billboard. It only works in San Francisco, but Jensen Wong, the CEO of Nvidia, his leather jacket is iconic. And so you see the shoulder of the leather jacket with Jensen. You know what they're talking about. If you want to

• 2:56:43John Coogan?

  get to him, you're going to go to vibe.co. What else did they do? They did say Target Mark on TV. They put just Mark Andreessen's head there. It's an iconic image and it lets you know immediately, how can you target someone like Mark Andreessen? It's hard. He's not going to be everywhere. Vibe.co has great targeting. So I got a little teaser of what else is available. We got Sam Altman, Target Samma on TV.

• 2:57:08John Coogan?

  With the McLaren F1.

• 2:57:09Jordi Hays?

  Is that real?

• 2:57:10John Coogan?

  And then we'll go to the next one, target Zuck on TV. And it's a wrist with a FPJorn on there or a Patek.

• 2:57:17Jordi Hays?

  No, you made these.

• 2:57:17John Coogan?

  And then the next one, they have a target Chesky on TV. And it is a barbell. Yeah. So this is the type of marketing that you gotta be doing. You gotta be thinking, okay, how do I, how do I send a message? There's, there's one more. Uh, we'll go to this, target Augustus on TV. Of course, everyone knows Augustus Derico, you know, he's known for carrying a white monster.

• 2:57:37Jordi Hays?

  Sort of like a human version of the white monster.

• 2:57:38John Coogan?

  If you put this billboard up, everyone's gonna get it immediately. They're gonna know that you're, you're cool. They're gonna know that they should go to vibe.co and they should start targeting folks like Augustus Derico, the CEO and founder of Rainmaker, who's known for having a white monster every once in a while.

• 2:57:52Jordi Hays?

  Not every once in a while.

• 2:57:54John Coogan?

  Pretty much constantly.

• 2:57:55Jordi Hays?

  Every hour, on the hour.

• 2:57:56John Coogan?

  He's powered by it.

• 2:57:57Jordi Hays?

  The way you drink Diet Cokes, I imagine he drinks white monster.

• 2:58:00John Coogan?

  Yes, yes.

• 2:58:01Jordi Hays?

  It's just like, oh, oh, it's two o'clock.

• 2:58:03John Coogan?

  No, no, the four of those that, uh, that we just displayed, I did generate in Nano Banana with Gemini 3 Pro, Google's most intelligent model yet.

• 2:58:12Jordi Hays?

  Leah says, "Love trash day, love hearing that truck. Humans getting stuff done, cooperation, logistics, municipal services, civilization. Couldn't agree more. It's a reminder that we haven't collapsed yet."

• 2:58:29John Coogan?

  Dude, a four-year-old, the way their face lights up when the trash truck comes and it's just pure wonder at the massive machinery moving up and down the street, the beeping when it backs up. That is childlike wonder that you should never lose, no matter what your age is. You should always take, take a moment to show some respect for the trash truck. I completely agree. I love it. Joe Weisenthal is crashing out. He says he never wants to use the web again. Said in today's Odd Lots newsletter, he wrote about how depressing the internet's become. We'll read his piece. And we need to catch up with Joe. I think he's coming on the show soon. He says, "I swear, I swear, this is not another piece about my personal forays into vibe coding." Okay, maybe it is a little bit, but not really.

• 2:59:12John Coogan?

  So last year, we did an episode with the COO of Perplexity, whose name is Dimitri. He says, "Which is kind of a hybrid LLM search engine. You'll be familiar with it. Uh, it's, it's very tethered to the real world. So if you asked it about, uh, hey, maybe the latest developments in Venezuela, it will obviously produce text, but also links to the latest reporting from reputable news outlets and other resources. It generally works well." If you want to get up to speed on something that's happening right now. Anyway, one of the questions that Joe tried to get across with Dimitri, but he doesn't think he phrased it all that particularly well, is what happens to the future of the web as we know it? If more and more of our news is coming to us from chatbot form? Let's just imagine people start regularly making perplexity their first destination each morning to capture up on the news.

• 2:59:57John Coogan?

  And let's just imagine for sake of a thought experiment that the traditional news publishers come out fine in this relationship. So the New York Times is and the CNNs and the Al Jazeera's of this world are getting adequately compensated for their reporting to be summarized and displayed on perplexity. It's hard for me to imagine this future, but whatever is beside the point. So he's just saying it's not an economic issue. Let's talk about the vibes that would result from this. So he says, hey, this is his question. In the future, why do websites still exist? If more and more people start consuming the New York Times' content through a chatbot, why continue to invest in maintaining a well-functioning website called nytimes.com? I suppose that to some extent, this is a question that precedes the existence of chatbots. There was almost certainly a time when a majority, when a major priority for the New York Times was to have a well-functioning elegant website.

• 3:00:42John Coogan?

  And while there are people still paid to work on it, this is probably not their top priority right now. A tech budget that might have once gone to web development might now be going to figure out the best strategy for Instagram reels or whatever. Nonetheless, do you have a comment, George?

• 3:00:57Jordi Hays?

  Yeah, maybe, maybe this is just because I turned 30 and I'm unk now. But I like going into the world of the content. Like, I like going to the Wall Street Journal app. I like going to the New York Times app. I like going to these places because you get to...

• 3:01:13John Coogan?

  I like the physical paper.

• 3:01:14Jordi Hays?

  We like the physical paper.

• 3:01:15John Coogan?

  This isn't going anywhere. For my cold, dead hands, me and you, Joe Weisenthal, we are keeping the newspaper alive. I guess you'll be on the web like some hot new youngin'. I will be reading the paper.

• 3:01:28Jordi Hays?

  Yeah, ultimately, I still care about, like, it matters. I care a lot about who wrote it, too.

• 3:01:33John Coogan?

  Totally.

• 3:01:33Jordi Hays?

  Like, I don't want it just served.

• 3:01:34John Coogan?

  But that can be instantiated in perplexity or ChatGPT. It can tell you who wrote it. You, you could, in theory, if the, if the deals are structured properly. Now, you can't get... I don't think you can get the New York Times content in ChatGPT because they have a lawsuit. You can get Wall Street Journal content. So in theory, you could kick off your morning with a query to ChatGPT. Hey, tell me the most interesting pieces that are on the front page of the Wall Street Journal and it would just do it for you. And it would bring that in and it would pay News Corp accordingly. But there's something fun about holding a nice piece of paper in your hands. I think it will die, but a very, very slow death. We're still reading newspapers. I imagine I'll still be reading newspapers in a while and I imagine that we'll still be going to the websites. But he is correct to highlight that there is a change afoot.

• 3:02:20John Coogan?

  So he says, nonetheless, the web browser is by and large still a dominant piece of software for accessing content and services that exist on the internet. And in fact, if we step out of the news context and think about it, say, buying a car insurance, then the website as we know it is still incredibly important. Anyway, I was thinking about this again because my vibe coding foray, easily the most annoying parts, were when I had to leave the terminal interface and do something on the web. So it's still an unbelievably annoying process to do something simple like redirect a domain name. I found GoDaddy's, where I've been registering various domain names for years, interface to be borderline unusable. Shots fired.

• 3:02:56Jordi Hays?

  Back check true.

• 3:02:57John Coogan?

  It is difficult sometimes.

• 3:02:59Jordi Hays?

  Every time I'm just trying to make sure that like a domain is renewed, they're like, how about you buy a thousand websites? Buy a thousand websites. Buy a thousand AI websites.

• 3:03:11John Coogan?

  I'm a name.com guy.

• 3:03:13Jordi Hays?

  We actually have, we have one billion websites for you.

• 3:03:16John Coogan?

  Yeah, yeah. As I mentioned in the piece he wrote on Tuesday, one of the first things Joe did to make it so he could update his website correctly, directly from Claude Code, rather than having to update the files via Cloudflare backend. This is the first very small thing, but the point is that every time I had to operate in the browser, it felt deflating, typing in URLs, clicking buttons, checking boxes, pulling down dropdowns, entering fields. No, thank you. He's genuinely curious what happens to visual, the visual web that's designed for humans. I know there's plenty of work that's being done to allow agents such as Claude Code to go to a website, click around at what human does, just in the same way that chatbots were trained on billions of Reddit posts and everything else on the internet.

• 3:03:58John Coogan?

  These agents are being trained by ingesting numerous sessions of people moving a mouse on the screen and so forth, until they can mimic that process. So, that's all well and good, but it still gets to this issue that we currently have much of the internet presented in the form of webpages that are designed to be logical and pleasing to the human eye. We still do so much on the web, but now every time I have to use the web, it feels kind of like a personal failure. It feels inefficient. And if the web is increasingly going to be navigated by bots working on a human user's behalf, then why even bother optimizing it for visuality at all? I don't know where any of this is going, but my guess is that it's pretty big structural changes are in store for what people think of as the internet. Yes, it's interesting.

• 3:04:35Jordi Hays?

  I know, I feel like the internet is already living in apps so much. Like, when I think about a world in the future where an LLM is just generating me an article that was in the New York Times that day.

• 3:04:47John Coogan?

  Yeah.

• 3:04:48Jordi Hays?

  I could imagine it just generating it in the visual style that the New York Times, like, decides themselves.

• 3:04:53John Coogan?

  Yeah. I mean, you can already do this with Nando Banana. You can, you can say, "Write me a New York Times-style article about this topic." It will write it, instantiate it. It will search the web to find the facts, so it'll probably not hallucinate that much. And then you could say, "Turn it into an image that looks like a New York Times screenshot," and it'll do that, too. So, people, people will be met where their preferences are. Um, I don't know. I, I, I think that, uh, I mean, the, the flip side is like, he's, he's making this argument that as more and more traffic shifts away from the web, it will get fewer and fewer resources within those organizations. So, the New York Times will say, "Hey, you know, we're not getting that much traffic to our website, so let's not spend that much effort making it better." But you also get 10 times as much leverage because the folks at the New York Times will

• 3:05:38John Coogan?

  be able to fire off an agent and say, "Hey, make it look better." And so, you would imagine, I would hope, that even as you go from, okay, maybe there's, if there's 10 people working on a, on a website, and now, uh, five of them move over to Instagram and YouTube strategy, and four of them move over to generative optimization, optimization strategies and LLM and AI stuff, well, there's one person left. The person on the, the Japanese soldier on the island who hasn't gotten the memo that no one's going to the website. Well, some people are going there and they fire off a prompt. Make it perfect. Don't make mistakes and boom, they're good. They're in business. So some cause for optimism. We'll see. What do you think, Tyler?

• 3:06:16Speaker 02

  Well, I was just going to update on the, on the Sam Altman.

• 3:06:19John Coogan?

  Please give us an update. What's up?

• 3:06:21Speaker 02

  Okay. So, so first, um, just if you want to look at prediction markets, right? So will Elon win his case against OpenAI?

• 3:06:27John Coogan?

  Yes.

• 3:06:28Speaker 02

  Earlier today, basically at the peak of like the, uh, oh my gosh, like Sam is so cooked.

• 3:06:32John Coogan?

  Yes.

• 3:06:32Speaker 02

  He was at, uh, 74 and a half percent chance.

• 3:06:35John Coogan?

  Whoa.

• 3:06:36Speaker 02

  It's now down at 54.1.

• 3:06:38John Coogan?

  This is fascinating. We're watching them like duke it out in real time.

• 3:06:42Speaker 02

  Yeah.

• 3:06:42John Coogan?

  Prediction markets.

• 3:06:43Speaker 02

  You know, Elon, he doesn't have to worry too much, um, because, uh, Nick.

• 3:06:46John Coogan?

  Oh, Nick.

• 3:06:47Speaker 02

  His strongest soldier.

• 3:06:49John Coogan?

  From the, from the.

• 3:06:50Speaker 02

  He's saying it reads as Elon's emails.

• 3:06:53John Coogan?

  Yeah.

• 3:06:54Speaker 02

  It reads as obviously fabricated.

• 3:06:55John Coogan?

  Hmm.

• 3:06:56Speaker 02

  Uh, Elon doesn't talk like that.

• 3:06:58John Coogan?

  Oh, well, you know, case, case closed. Case closed. I wonder if Nick will be called to testify. I'd love to see him on the stand. That would be very entertaining. Uh, anyway, uh, Jensen Wong doesn't care about gamers, allegedly. Uh, Asus reportedly says the RTX 5070 Ti is no longer being produced. RTX 5060 Ti, uh, 16 gig to follow. The gamers have been having a rough time.

• 3:07:24Jordi Hays?

  I don't want to play with Jensen says, I don't want to play with gamers anymore.

• 3:07:27John Coogan?

  It's AI all the time. Yes. Uh, gamers are being squeezed left and right. Uh, we, we, we, we need to make everyone aware of, of the rights of gamers with our COD sounds and our flashbangs and our smoke grenades to let people know, let Jensen know. Maybe we'll have to bring Jensen on the show, throw a smoke grenade and when the smoke clears, he can tell us that he is still committed to gamers. Let's move on to World Labs.

• 3:07:54John Coogan?

  World Labs launched a box. They shipped a box. It's a video of they took World Labs. I think this is real. I have no idea how to process this, but it looks like they built a screen put in a box that has a, what is it, IMU, Inertial Measurement Unit that can measure how the box is being rotated and then it can re-render the world. So you're looking into it in this box. This seems really, really cool. This seems like just a piece of hardware that people would actually buy and sell. We've seen this with the holographic display that you put next to your gaming rig made by Asus or a Razer. I guess Razer's

• 3:08:37John Coogan?

  the one that makes it. This is really cool. I'm a big fan of World Labs and I like that they're productizing this. I wonder if this is like a stunt, if this is just for fun. I really hope we can get our hands on one of these because this looks amazing. Well, there is more news in the AI talent war. The total of folks, the total number of employees that are leaving Thinking Machines, Alex Heath is hearing that it's up to six now. True Scoop God is on, on the trail of another scoop. He posted this at 2:00 AM. He's up burning the midnight oil, getting the scoops on Thinking Machines. Maybe up to six people leaving.

• 3:09:17Jordi Hays?

  Naval says California-based unicorns.

• 3:09:20John Coogan?

  Do you think this was because of ads? Do you think all the Thinking Machines folks were like, wait a minute?

• 3:09:24Jordi Hays?

  We want to work on ads.

• 3:09:26John Coogan?

  They're gonna do ads at OpenAI? I gotta go back there. I gotta go to OpenAI. I gotta get out of here.

• 3:09:33Jordi Hays?

  It's been my dream.

• 3:09:33John Coogan?

  Mira hasn't said anything about ads.

• 3:09:35Jordi Hays?

  Or maybe it's, maybe it's they wanted to work on adult mode.

• 3:09:38John Coogan?

  Maybe, maybe. There's lots of reasons. Or Sora. They could be trying to grind up the trough.

• 3:09:43Jordi Hays?

  The Disney IP. They want to get their hands on that IP.

• 3:09:46John Coogan?

  Yeah, they want to slop it up and they say, we're not doing any of that at Thinking Machines. So we're going over to OpenAI. Talk about this.

• 3:09:52Jordi Hays?

  Naval says California-based unicorns being routed to the glue factory.

• 3:09:56John Coogan?

  The horse metaphor.

• 3:09:57Jordi Hays?

  Not mincing words. We will protect.

• 3:10:01Jordi Hays?

  The unicorns, unicorns are horses. We will protect them. They are. Do we read through David Friedberg's piece? Yeah, fantastic piece. California started with the gold rush and might end with the golden exit. We're coining. It has been under-reported how much wealth has left California because of the asset seizure tax being proposed. It's important that we continue to call it the asset seizure tax. Hmm, he's coining. A private poll was conducted amongst affected individuals a few days ago, and 80 to 90% surveyed they had already left California in 2025, or will leave in 2026 if the ballot measure looks likely to pass. Of course, the ballot measure currently is retroactive, so they would be subject to the 5% one-time tax, and of course, it would get litigated. Dave Friedberg continues, "Two to two and a half, half trillion of assets gone, representing

• 3:10:46Jordi Hays?

  20 billion of annual, annual revenue for the state government, and likely hundreds of thousands of jobs now at risk. Less reported is the bigger exodus underway from folks who are not directly affected, but worry as they should that this law will quickly transition from billionaires to everyone else. The initiative actually gives California legislators the right to take anyone's post-tax assets anytime in the future based on a majority vote. This isn't about billionaires. It's a new tax system that simply destroys private property rights in America. All private property is now public property even after paying your taxes. It's not legally your property anymore. It's the government's. You're just borrowing it. Legislators will decide what you get to keep and temporarily use

• 3:11:28Jordi Hays?

  each year. Countless founders, CEOs, and other business leaders are actively looking to move their companies out of state, not just tech, not just AI, not just billionaires, but the core engine of California's prosperity since 1847 is unraveling. And here is how this initiative risks unraveling America. Ten states have explicit or implicit prohibitions against asset seizure tax. Individuals affected in California and other states trying to do the same will move to these states that endow, endow private property rights. California already has a 20 to 30 billion dollar budget deficit, an unfunded 1 trillion pension liability for public employees, unions, and 500 billion of debt outstanding. The state cannot afford

• 3:12:09Jordi Hays?

  to borrow more, much more, and will launch more asset seizures to meet its obligations. Asset seizures will transition to millionaires and eventually to the entire middle class as more asset seizures drive more people to leave the state. The debt..." The deficit debt and job loss will spiral, the golden exit. No US state has ever declared bankruptcy. In addition to California, dozens of other states face similar fiscal crises. Legislators promised future benefits that can't be paid, where theft and waste have been allowed to run rampant and unabated for years. Struggling states will eventually request federal government assistance, as they always have in times of fiscal crisis, effectively federalizing state debt. States not in crisis will declare enough is enough.

• 3:12:53Jordi Hays?

  Individuals in those states will refuse to pay their federal taxes. Why pay for other people's mistakes? Some states may try to secede from the union, and a constitutional and civil crisis will erupt. I know this sounds crazy, but I think at some point, states will just say, like, people, citizens, will be like, why am I sending 30% of every dollar I make to bureaucrats in Washington that hate me? And so I think this sounds wild, but I don't, I don't think it's as far-fetched.

• 3:13:26John Coogan?

  Yeah, it's very dark. It's, uh, it's chaos.

• 3:13:29Jordi Hays?

  Nothing like a little Friday black pill.

• 3:13:31John Coogan?

  Not, we just, the answer, the answer is clearly just AGI pilling all of the California regulators. Just say, AGI will solve the deficit. We will just ask AGI to fix the debt, fix the fiscal crisis, fix the pension liabilities, fix the budget deficit, don't make mistakes, and so much value will be created by AGI here. Just the income taxes will pay for that a thousand times over, a thousand times over. So you don't need to, you can respect private property. Don't worry, it's gonna be fine. AGI is here to save it. That's the solution. Gotta pitch them. Anyway, back to the AI world.

• 3:14:16John Coogan?

  We have Alex from Higgs Field AI in the restroom waiting room. Let's bring him in to the TVP and Ultra. Alex, how are you doing?

• 3:14:24Alex Mashrabov?

  Doing great. So great to be back.

• 3:14:27John Coogan?

  It sounds like you're doing great.

• 3:14:29Jordi Hays?

  We were just talking about the billionaire tax. This is something that fortunately, your business is doing so well.

• 3:14:35John Coogan?

  Yeah. Focus on growth. Focus on the good things. Tell us the, tell us the best news in your world this year.

• 3:14:43Jordi Hays?

  Give me that mallet.

• 3:14:43John Coogan?

  Oh, yeah.

• 3:14:44Jordi Hays?

  Give me that mallet.

• 3:14:45John Coogan?

  Yeah. What's the latest? What's the latest metric?

• 3:14:49Alex Mashrabov?

  Absolutely. So what's exciting about Hixfield is that we see emergence of AI native social media agencies. So really teams from maybe 10 to 30 people making commercial ads end to end with AI.

• 3:15:06John Coogan?

  Yeah.

• 3:15:08John Coogan?

  We just talked to, yeah, we just talked to Sean Frank. He said he's a huge fan. He uses it for Ridge Wallet and has been able to generate custom ads for, you know, tons of different markets, local areas where it was just completely unfeasible to, to cast so many actors, to, to, to play so many different parts for every single different college team that he sells products for. Yeah, it's a, it's a fascinating time. So this is mostly driven by agents or brands going direct. What's the biggest driver of growth for you?

• 3:15:43Alex Mashrabov?

  Absolutely. We are excited to see Fortune 500 brands really hiring, primarily hiring, really hiring smaller, really hiring smaller agencies.

• 3:15:54John Coogan?

  Yeah.

• 3:15:55Alex Mashrabov?

  So that they then use Hixfield to make those ads. And I think although the most exciting segment is definitely direct to consumer, especially when AI can deliver not just the efficiency, not the cost efficiency, but also higher level of personalization. So the example which you just brought up completely makes sense.

• 3:16:13John Coogan?

  Yeah.

• 3:16:14Alex Mashrabov?

  Whenever someone needs to customize for 30, 60, 100 different user groups, let's say sports teams,

• 3:16:21Alex Mashrabov?

  then AI delivers against this goal and Hixfield is at forefront of that.

• 3:16:26John Coogan?

  What are the compute costs look like, looking like these days? I mean, the big, the big news is that you, you jump from a hundred million to 200 million top line in just two months. That's insane. Congratulations. Jordi hit the applause. Congratulations. But, but, but on the flip side, I mean, if you, I mean, you are raising money. Obviously the capital markets are open, but if you were really spending on inference, that could be, you know, difficult. How is, how are the margins developing? How are you optimizing for inference cost? What are you seeing on just inference cost trends broadly? Are you, are you happy with the progress?

• 3:17:11John Coogan?

  Or what else can you tell us about the, the, the cost structure of this business?

• 3:17:18Alex Mashrabov?

  I have good news and I have bad news.

• 3:17:20John Coogan?

  Okay.

• 3:17:23Alex Mashrabov?

  Look, I think on the good news is that video models get more capable. So that over time marketers can just upload all the brand assets in one place. And then the model just remembers all the context. And this helps to make not just one video, but multiple videos and extend existing marketing campaigns. I think this is going to be a major unlock. Think about marketing agents who actually remember all the previous campaigns, all the performance of the previous campaigns and so on.

• 3:17:59John Coogan?

  Yeah.

• 3:18:01Alex Mashrabov?

  Although there is a bad thing, like these models, they get bigger and bigger. There is no other, there is no other path around. I think most of the video models this last year were maybe between 10 and 50 billion parameters. And it's going to scale well beyond 100 billion parameters.

• 3:18:22John Coogan?

  Okay.

• 3:18:24Alex Mashrabov?

  So I think, although the good news is that in the same time, we're seeing customers spending thousands of dollars a month on the platform.

• 3:18:33John Coogan?

  Yeah.

• 3:18:34Alex Mashrabov?

  Which tells us that Slay likely make thousands of videos. Cost per one video is still quite below one zoler.

• 3:18:42John Coogan?

  Yeah.

• 3:18:43Alex Mashrabov?

  This is a very, this is very interesting times as we move from a concept of.

• 3:18:47Jordi Hays?

  Well, yeah, that's an insane, that's an insane reduction in cost because.

• 3:18:52John Coogan?

  Even the most efficient video shoot on your iPhone, you're going to spend a day, even if you're paying a marketing intern twenty dollars an hour.

• 3:19:01Jordi Hays?

  Yeah, when brands are doing, trying to generate UGC content historically, you know, now they can use Higgs field and generate stuff on the fly, but historically you'd be like, okay, I'm setting a budget of like two, a hundred dollars an asset and then you'd have a bunch of people like actually record on their iPhone to generate it. And so if you're saying it's, you know, a dollar an asset or sub a dollar, it's like a hundred X reduction in cost, it's pretty significant.

• 3:19:25Alex Mashrabov?

  Absolutely. I think cost reduction has already, I mean, it has already happened compared to physical production. And I think this batch content generation, meaning that we make not just one video, but hundreds of videos simultaneously, I think this change happening this year. So the goal for Higgs field is to lead those, like this new wave of agentic behaviors and build cursor for video.

• 3:19:52John Coogan?

  What about getting the, ingesting the data on performance? Do you have API integrations with all the big platforms where you're ingesting ad data from Meta and AppLovin or whoever else you're distributing video content through? Or is it PDF upload, CSV upload? Like, how are you thinking about actually creating that feedback loop? Because that seems extremely powerful.

• 3:20:22Alex Mashrabov?

  Yeah, absolutely. On that angle, I can tell that probably 2027 is going to be a year of major revolution in ad tech world as connecting generation with performance data is going to become a major point.

• 3:20:37John Coogan?

  Got it.

• 3:20:37Alex Mashrabov?

  This year, we collect a lot of these data from social media platforms. We built most of these integrations and establishing direct relationships with the platforms. We collect a lot of very valuable data points directly as we see which generations result in an actual ad so that we can actually run reinforcement learning to streamline content creation process. I think this is the main priority for 26 and 27 is going to be a year of full revolution in advertising technology space.

• 3:21:14John Coogan?

  What's going on in the hardware side? What would be most valuable to you? We saw Nvidia acquire Grok with the Q. Grok's whole pitch has been very fast inference, usually for text-based LLM models. When I think about the work of a marketer generating a bunch of different video variations, if they fire that off and they come back an hour later, that doesn't seem like a terrible experience. So are you more focused on higher fidelity, larger parameter counts, over speed? Are you interested in what's happening in custom silicon in a particular area? Or do you just want more and more Nvidia GPUs at your disposal?

• 3:21:58John Coogan?

  Like, what's important on the infrastructure side for your plans over the next few years?

• 3:22:06Alex Mashrabov?

  This is a great question, and I think we have seen that custom silicon can perform really well. Gemini 3 is the first multimodal LLM which has these emerging capabilities, which has done a banana pro model.

• 3:22:19John Coogan?

  Yeah.

• 3:22:20Alex Mashrabov?

  This model essentially made Adobe obsolete.

• 3:22:25Alex Mashrabov?

  Yeah, who needs to, yeah, because I mean, who needs to go to Photoshop?

• 3:22:31John Coogan?

  Yeah.

• 3:22:33Alex Mashrabov?

  Yeah, look, I mean, I I'm not saying like, like especially for social media marketing.

• 3:22:38John Coogan?

  Yeah.

• 3:22:38Alex Mashrabov?

  If we're being serious, so because I mean, going and if I say, uh, Georgie, you assign me to go and make uh, five ads for you a day.

• 3:22:46John Coogan?

  Yeah.

• 3:22:46Alex Mashrabov?

  And try completely different stuff. Uh, I don't have time to go to Photoshop and push every pixel to make it perfect. I better use a model like like man of banana prod to really deliver against the vision. And it's semantic based editing, not just like pixel pushing.

• 3:23:03John Coogan?

  Yeah.

• 3:23:04Alex Mashrabov?

  So, um.

• 3:23:05Jordi Hays?

  I kind of miss, I kind of miss when you you used to be able, you used to see a like a like really high quality Photoshop on the timeline. And part of why you appreciated it is like somebody really needed to put the effort in or they needed, even if they're not great at Photoshop, they hired somebody and it's like you and nowadays.

• 3:23:21John Coogan?

  You know, they got the lasso tool and they cut that character out and slapped that text over there, threw a drop shadow on it. Now it's just a prompt. It's fascinating.

• 3:23:31Alex Mashrabov?

  Yeah, now it's just a prompt and it's done with custom silicones. So I think we're gonna see a renaissance of custom silicon for sure. And Jimmy and I, um, another banana prod are are amazing model with these emerging capabilities. And we we really embrace those create, those creators and social media marketers who creates ads with AI end to ends. So they don't have to go to Adobe to link at all.

• 3:23:58Jordi Hays?

  Uh, how how are you tracking the uh, the problem of understanding what's what's AI generated, what's real? This is now a daily. I feel like it used to be like even like 12 months ago, it was like, you know, once, once a month you'd see something and you're like, oh, is that AI? Or is that real now? It's like almost every single day.

• 3:24:19John Coogan?

  Oh, I I see stuff on Instagram all the time where I know it's AI, but then I go to the comments and and everyone's happy. No, no one's, it used to be people would clock it and then even if they couldn't tell, they would key off of the comments and and then kind of pile on. Now people are just like, yeah, this is good content. Uh, well, yeah, what's your take on on AI detection? Uh, how it's working through its way through the internet?

• 3:24:41Alex Mashrabov?

  I think that we're going to see more standards emerging. I think European Union, it's a big thing. We're gonna see something by the end of the year coming on that front, I guess. I can just tell you that direct to consumer brands, they primarily don't care if that looks like AI-generated content or non-AI-generated content, as long as it catches eyeballs and it sells. They just keep coming to Hixfield and making more of such videos. So the best performing AI-generated ads, they look like AI ads and they don't look like real ads. I think that's my main observation.

• 3:25:19John Coogan?

  Yeah, yeah, yeah. I mean, there's a certain element where, you know, the iPhone, the selfie video, it never actually wound up looking like an HBO show or a James Cameron film. It never wound up looking like, you know, it was shot with a hundred thousand dollar camera. But everyone just got used to it and they like the aesthetic and we grew accustomed to that aesthetic and it has its own aesthetic and so have AI content. Even if it retains its aesthetic for a very long time, even though I think it's going to be indistinguishable, it already sort of is, but even if it does, people could just become fans of that and be like, yeah, I like the way it looks.

• 3:25:57Jordi Hays?

  Yeah.

• 3:25:57John Coogan?

  Yeah, interesting. Anything else?

• 3:25:59Jordi Hays?

  Very cool. Well, also my buddy texted me, it's Alex Kassen. You guys just had lunch?

• 3:26:04John Coogan?

  No, no way.

• 3:26:06Alex Mashrabov?

  Absolutely. We're just chatting about that. Small holes.

• 3:26:11Jordi Hays?

  Yeah, he's a great guy to know in this town. So are you in LA right now?

• 3:26:17Alex Mashrabov?

  Yes, I'm in LA.

• 3:26:18Jordi Hays?

  You should have come by the studio.

• 3:26:20John Coogan?

  Yeah, next time.

• 3:26:21Jordi Hays?

  Could have been sitting here. You could have been hitting the gong.

• 3:26:23John Coogan?

  Could have been moving the goalposts.

• 3:26:24Jordi Hays?

  Next time.

• 3:26:26Alex Mashrabov?

  Absolutely.

• 3:26:27John Coogan?

  Anyway, thank you so much for taking the time.

• 3:26:28Jordi Hays?

  Well, yeah, congrats on the progress. The growth is absolutely insane and look forward to talking more this year.

• 3:26:33John Coogan?

  Yeah, we'll talk to you soon.

• 3:26:34Jordi Hays?

  Cheers.

• 3:26:35Alex Mashrabov?

  Thank you, guys.

• 3:26:35John Coogan?

  Have a great weekend. Go bye. All right. We can close with one of the best ideas that I've heard recently. It's from Ryan Peterson. He says, "We should have an AI transfer portal like in the NCAA. Couldn't agree more." Well, that's our show. The bomb has been planted. Thank you for tuning in today. It was a good one. Thank you for watching. Leave us five stars on Apple Podcasts and Spotify and sign up for our daily newsletter at tbpn.com. We send out our newsletter every weekday. Enjoy the weekend. We will be live Monday. We will be live Monday. Looking forward to it. And we'll be back at 11 a.m. Pacific. So tune in. We have a couple live in-person guests, a couple remote guests. Go touch some grass.

• 3:27:20John Coogan?

  It's gonna be a lot of fun. Well, hope you have a great weekend. Thank you for being here with us. And goodbye.