AI Boom Stalls, Blue Owl’s Next Move, ChatGPT Growth Concerns | Jeffrey Katzenberg, The Winklevoss Twins, Hims & Hers CEO Andrew Dudum, Coatue’s Spencer Peterson, Max Hodak, Melisa Tokmak, Tomás Puig

(00:20) - AI Boom Hits Speed Bump (11:56) - Will Blue Owl Capital Fly Higher? (26:08) - AI Boom Hits Speed Bump (34:35) - 𝕏 Timeline Reactions (59:12) - Spencer Peterson, a general partner at Coatue Ventures, leads their growth fund focusing on late-stage, transformative technology companies. In the conversation, he discusses Coatue's investment in Cursor, an AI-assisted software development service developed by Anysphere, highlighting its rapid growth to a $9.9 billion valuation and $500 million in annual recurring revenue. Peterson emphasizes Cursor's unique culture, exceptional team, and the broader potential of AI in software development, noting the significant opportunities in the expanding market. (01:25:50) - Tyler and Cameron Winklevoss, co-founders of Gemini and Winklevoss Capital, discuss the launch of Cypherpunk Technologies, a rebranded public company focused on privacy and self-sovereignty. They highlight the company's recent $50 million investment in Zcash (ZEC), purchasing 203,775.27 ZEC at an average price of $245 per token, and their long-term commitment to holding these assets. The twins emphasize their belief in Zcash as a means to move value privately and their strategy to avoid fast capital by being the largest investors in the company. (01:29:49) - Max Hodak, a biomedical engineer and entrepreneur, is the founder and CEO of Science Corporation, a neurotechnology company developing brain-computer interfaces and retinal prostheses. In the conversation, he discusses his journey from co-founding Neuralink to establishing Science Corp, focusing on their development of the Science Eye—a visual prosthesis aimed at restoring vision for individuals with conditions like retinitis pigmentosa and age-related macular degeneration. He also elaborates on the company's innovative approach to brain-machine interfaces, emphasizing non-invasive technologies that avoid the need for in-skull implants. (02:02:27) - Andrew Dudum, founder and CEO of Hims & Hers Health, discusses the company's evolution into a leading telehealth platform offering a wide range of services, including cardiovascular risk assessments, weight loss treatments, and mental health support. He highlights the company's commitment to providing accessible, high-quality care through digital means, treating millions of patients daily. Dudum also emphasizes the importance of preventive healthcare and the role of personalized diagnostics in improving patient outcomes. (02:21:08) - Melisa Tokmak, founder and CEO of Netic, an AI company based in San Francisco, discusses how Netic's AI revenue engine assists essential service industries—such as HVAC, plumbing, and electrical services—in managing fluctuating demand by deploying AI agents to handle customer interactions efficiently. She highlights the challenges these industries face, including labor shortages and seasonal demand variations, and explains how Netic's technology enables businesses to predict needs, convert one-time interactions into recurring relationships, and maintain high service levels during peak times. Tokmak also shares that Netic recently secured a $20 million Series B funding round led by Founders Fund, emphasizing the company's strong fundamentals and commitment to building a business with solid margins and efficient scaling. (02:35:37) - Jeffrey Katzenberg, Founding Partner at WnderCo, discusses Alembic's recent $145 million funding round and its innovative approach to causal AI, which helps Fortune 500 companies understand the direct impact of their marketing and sales efforts. He highlights a case study with Delta Airlines, where Alembic's technology identified that the most profitable content during the Olympics was not traditional ads but the Delta medal presentation ceremonies, leading to increased ticket sales to Paris. Katzenberg also emphasizes the importance of ingesting vast amounts of data to provide actionable insights, enabling businesses to make informed decisions and optimize their strategies effectively. (02:58:11) - 𝕏 Timeline Reactions TBPN.com is made possible by: Ramp - https://ramp.com Figma - https://figma.com Vanta - https://vanta.com Linear - https://linear.app Eight Sleep - https://eightsleep.com/tbpn Wander - https://wander.com/tbpn Public - https://public.com AdQuick - https://adquick.com Bezel - https://getbezel.com Numeral - https://www.numeralhq.com Polymarket - https://polymarket.com Attio - https://attio.com/tbpn Fin - https://fin.ai/tbpn Graphite - https://graphite.dev Restream - https://restream.io Profound - https://tryprofound.com Julius AI - https://julius.ai turbopuffer - https://turbopuffer.com fal - https://fal.ai Privy - https://www.privy.io Cognition - https://cognition.ai Gemini - https://gemini.google.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.

• 0:00Jordi Hays?

  You're watching TVP.

• 0:02John Coogan?

  Today is Thursday, November 13th, 2025. We are live from the TVP and Ultra Dome, the Temple of Technology, the Fortress of Finance.

• 0:08Jordi Hays?

  The capital of capital.

• 0:11John Coogan?

  Ramp, time is money, save both, easy use corporate cars, bill payment, counting a whole lot more, all in one place. There is a bunch of breaking news. The big news out of OpenAI, of course, the OpenAI show continues. Sarah Fryer had some comments about ChatGPT's growth potentially slowing, and it's unclear, it's not in decline, it's maybe deceleration. We'll have to dig into that. It had me thinking about debt, and I was thinking about just the fact that the debt has come to tech for the first time, really. And this was sort of my take, and I'm a little bit, this is an area that I know the least about. And

• 0:54John Coogan?

  so I was doing some research, learning about a different industry, since it's just so abstract to me, because I've never worked in private credit, or really seen that industry, or even just really studied it.

• 1:06Jordi Hays?

  You appreciate leverage, you've never been a big.

• 1:08John Coogan?

  I appreciate it. Yeah, and mostly I was just wondering, like, we keep going back and forth on the debt is coming to tech narrative as like, it's very scary. Like, when debt comes, only bad things happen. You know, we live through the global financial crisis, and there's a lot of jitters when debt is around. It's like, oh, you could get wiped out, you could blow up, the backstop comes in. It just feels like all of a sudden we're talking about things with a much more serious consequence than like, oh, yeah, a startup raised some money, and it didn't pan out, and it was a zero, and it wound up being a write down, but it was part of, you know, a portfolio of equities that is averaged

• 1:51John Coogan?

  out across a whole bunch of different LPs. Like, there's no, even when, even when. You know, like Theranos blew up. It was only equity holders that were lost. It wasn't this higher entire industry. And so it wasn't, it didn't turn into this like systemic issue, right?

• 2:07Jordi Hays?

  Yeah.

• 2:07John Coogan?

  But now it feels like with the 1.4 trillion of, you know, backlog that OpenAI has kind of opened up across a whole bunch of different deals, there is this worry that, you know, maybe the level of indebtedness could be risky, the level of risk in the system, the level of investment in the system, could be something that's bigger than just, oh, if you're in this one name, you're taking a big risk. Now it's maybe like, hey, we're all taking a risk. And if we're talking about backstops at least.

• 2:37Jordi Hays?

  Yep.

• 2:38John Coogan?

  And so I was trying to understand, there's this old phrase from 2006, coined by Clive Humby, classic coinage, I love a coinage. He said, data is the new oil. And back then in 2006, his point was, he was working at a data, as a data scientist at Tesco, which is this British grocery store, I don't know if you know this story. But he was working at this British grocery store chain. And his point was, we have all this data on a customer has or is in the rewards program. We see that they buy a Thanksgiving turkey before Thanksgiving. We see that they buy this type of paper towels or this type of milk or whatever. We have this data, but we don't really do anything with it. The data is not valuable. We need to refine it, much like oil, into gasoline. And once we

• 3:23John Coogan?

  refine it into gasoline, then we can do things like targeted advertising, and we can increase our customer value. And so it was basically just a generic, a generic call to action for taking data science seriously, for just, don't just have the data there, understand that the data is valuable, if you extract it, if you work on it. But the, but the metaphor, people have been saying data is the new oil for, I guess, two decades now. And it never really sat that well with me because unlike oil, data is not perfectly fungible.

• 3:57Jordi Hays?

  Yeah.

• 3:57John Coogan?

  So one, one tranche of data is not equivalent to another. Like Reddit is clearly very valuable, since it kind of, you know, provided the backbone for GPT-3. Though, all the analytics data that flows out of some mobile game is basically useless.

• 4:12Jordi Hays?

  A lot of data is worthless.

• 4:13John Coogan?

  A lot of data is worthless.

• 4:14Jordi Hays?

  And all oil.

• 4:16John Coogan?

  Yeah.

• 4:16Jordi Hays?

  Is has at least some value.

• 4:18John Coogan?

  Essentially, I mean, I guess there are different levels of crude, right? There are different, different grades. And I was actually trying to play out the metaphor more. And I was wondering, like, can we get to a place where, you know, so we can wring intelligence out of raw data like the oil? And the result can be low octane gasoline, kind of like midwit, you know, level like slop and AI slop. Or it can be jet fuel, like a deep research report that's actually pretty great. Or some code that's really reliable and really useful. But it all depends on the processing methodology. But the more interesting data is the new oil take that I don't think was considered in 2006 is that maybe the tech industry is going to look like the oil and gas industry soon. Like, I was looking up what, how much debt is in the oil and gas industry?

• 5:03John Coogan?

  It's over a trillion dollars of debt. And it's like, it's fine. Like, yeah, exactly. Yeah, clap, it's fine. Like, it's not this, like, huge systemic issue. It was two trillion, like, you know, a decade ago, and then it went down and then went up. And it's like, it's all just a function of like, how much oil and gas is going on? How many, what are the new projects? How big are the projects? How much debt goes in? Like, just having a lot of mortgages in America is not intrinsically risky.

• 5:27Jordi Hays?

  Okay, the difference, the difference is that if you identify oil in the ground and you figure out how much it's going to cost you to extract it and how long you think you'll be able, like, basically estimating, like, the, how much, how much oil is actually available in this, in this site.

• 5:45John Coogan?

  Yeah.

• 5:46Jordi Hays?

  Then you can lend against that pretty predictably because you know that the price of oil is going to fluctuate, but in general, as long as it's in a, in some range, it will be like a profitable operation to pull it out of the ground. And I think it's a little bit easier to lend against that than GPUs today when we're, the big debate is around depreciation schedules and will these GPUs, you know, we, we, we have a sense that a data center that has power and basically a box with a lot of power will be valuable in the future. But if you're, if a lot of the cost of a new data center is GPUs, it's harder to gauge on what the value of those GPUs will be in.

• 6:28Jordi Hays?

  In, you know, four years than than it is, okay, it will this oil like production site still be producing oil in five years? I think that's a bit easier to answer and easier to lend against.

• 6:42John Coogan?

  Maybe. I mean, sometimes there are tracks that only produce oil for four years and you underwrite it against a four-year depreciation schedule. And as long as you get the, as long as you you match the risk to the reward, the deal pencils out just fine. But but I understand what you're what you're getting at. And I think that as we dig into the OpenAI news, I think we'll have more, we can synthesize some of what of the recent, the recent leaks and rumored statements around potentially a plateau and demand for tokens on maybe the consumer side. But it is just like a wildly different question. Like, the fact

• 7:24John Coogan?

  that you're walking through that math is very different than what the venture capitalists in 2000 were doing. Like, Ev Randall, who's coming on the show on Friday, tomorrow, he always says he goes back to the Google prospectus from when they IPOed. And Google was like the most pure play, just beautiful software business. So, Google in from from 2001 to 2004 grew from 86 million in revenue to 3.2 billion in revenue. And net income over that period went from 10 million to 400 million, and that includes stock-based comp. So they were still making 400 million in profit with the stock-based comp. Googlers made a lot

• 8:09John Coogan?

  of money. They gave away a lot of stock. And so it was, it was not, it didn't look like an oil business. There was not this big capex build out. There was not this big, or even this crazy R and D phase. There was just not, there wasn't that much capital that went into Google before it became this monster cash flow machine. It was just beautiful, it was sort of an infinite money glitch. It was this beautiful algorithm that was just discovered, and it was so elegant, and it just produced this monopoly insane like growth rate for so long. And then, of course, they've been challenged, and they expanded, and there's million things. And then eventually, capex did come into the picture as they grew their cloud, cloud infrastructure, GCP, all this other stuff.

• 8:49John Coogan?

  But but for a long time, like, tech just meant, take a bet on a company, and it's either a zero or trillion dollars or something like that.

• 9:00John Coogan?

  And so it's a lot different. And I wanted to dig into like, the actual structure of one of these deals, because I don't, I think that tech people, I was, I was almost gonna call this like, why is no one talking about Blue Owl? Because people, obviously on Wall Street, are definitely talking about Blue Owl. It's, it's a public company that stocks, I think, down like thirty, forty percent this year. But it's the data center of finance.

• 9:22Jordi Hays?

  Private credit.

• 9:23John Coogan?

  Yes, private credit, exactly. And so I wanted to understand, like, how does Blue Owl actually interact with one of these data center deals? Because that's important to understand, like, where the risk winds up living. So I'll break one of these down, but first, I'll tell you about Restream. One live stream, thirty plus destinations, multi-stream and reach your audience wherever they are. So for Hyperion, you remember the Hyperion release? Zuck went on Threads and announced that he was gonna be building a five gigawatt data center, it was gonna be as big as Manhattan.

• 9:52Jordi Hays?

  It's like somewhat of a Manhattan project.

• 9:54John Coogan?

  Somewhat of a Manhattan project, exactly. So the, the crazy, crazy thing about that deal. So, so he spins up the, the, he, he puts out the announcement post on, on, on Threads, says, hey, we're going to build this five gigawatt data center campus. It's gonna be online in a few years, it's gonna be as big as Manhattan. And he, and he shares some of like, where it's going to be, how many racks are there gonna be, square footage, stuff like that. But he's basically just announcing that like, hey, the project's financed. We're ready to go on this. Like, you would expect that when that, it's a twenty seven billion dollar deal. You would expect that, okay, Meta went down, they, they spent twenty seven billion dollars, it's worth it, they're gonna, no, they got paid three billion.

• 10:40John Coogan?

  They got paid three billion. And the reason is because Blue Owl financed it with external debt and they are basically paying Meta upfront for the right to have them as a tenant, as a leaser for a very long time. So they get this like, we have Meta as a client. Meta is always going to pay their bills. They're not, they're like, no matter what happens with the AI build out, they're going to be good for it because they have this cash machine. So they are like the best possible tenant, not like some fly by night, oh yeah, I'm a startup, maybe I'll be around in a few years. It's like, it's Meta. They're gonna pay their bills. And so you have this massive data center project that's going to be paid for, even if it's not producing any valuable tokens, Zuck's still gonna, he's not just gonna default and be like, yeah, take the company.

• 11:22John Coogan?

  No way. He's gonna pay. And so in exchange for that, they got three billion upfront. And so there's just each one of these deals, I think the more you dig into them, I want to have more of these people on. Mohamed El Arian at PIMCO, or was formerly at PIMCO, I know he can explain this a little bit more. I want to have more people on the, on the show to help us get up to speed on this because this feels deeply important to the current AI build out boom, the tech story. It feels, it feels like an entirely new piece of the puzzle to understand where this technology is going. And I don't feel equipped to, to understand it at all. Barron's did have a great article about Blue Owl and a very funny interaction between

• 12:03John Coogan?

  Blue Owl and Jamie Dimon, and they're going at it. And I think it's interesting to read through. So let's read through a little bit of this to give you a little bit more flavor on what's going on at Blue Owl. Because if you're just in tech, if you're just in venture, you might not know that much about them. But first, let me tell you about Privy, wallet infrastructure for every bank. Privy makes it easy to build on crypto rails, securely spin up white label wallets, sign transactions, integrate on-chain infrastructure all through one simple API. So in Barron's, they, I had this, this article's from October 24th. I had it on the table. We never got to it. We're getting to it now. It's, the title of the article is Private Asset Star Blue Owl Has Been Flying High. Is It Too Close To The Sun?

• 12:41John Coogan?

  This feels like a headline Jordy would write. I'm very skeptical about, about what's going on in the AI build out, in the AI boom. But let's, let's dig in and see.

• 12:53Jordi Hays?

  I like the phrase private asset star. I'm gonna start calling our friends private asset stars.

• 12:58John Coogan?

  For sure, for sure. So the article says, suddenly Blue Owl Capital is everywhere this past Tuesday. The upstart alternative investment firm with an aptitude for private credit announced a financing deal for Meta Platforms, $27 billion AI data center in Louisiana. That is hyperion that I was mentioning earlier. Before, the week before, at the PAC CAIS Alternative Asset Summit in Los Angeles, Blue Owl's co-CEOs, co-CEO Mark Lipschitz called JP Morgan Chase's CEO Jamie Dimon, "cockroach warning about risk in private credit, an odd kind of fear mongering."

• 13:35John Coogan?

  So what happened there was, we talked about that, that blow up in the private credit world, and I have a little bit of background on this. So where, where do you say this? So I need to actually pull up what happened with the, with the private, with the cockroach statement, because it's very funny.

• 13:58Jordi Hays?

  Is that about First Brands?

• 13:59John Coogan?

  It's First Brands. Let me see, First Brands, First Brands. Okay, so, so basically, private credit has been growing a ton. We've talked about this a few times. Ares is massive now, Blue Owl is really big, and, and the whole, and, and there's basically been this little bit of a fight emerging between where the debt is coming from. Do you do private credit, or do you go with the traditional bank route? And so Jamie Dimon, at least I'm, I'm pretty sure he's going head to head against Blue Owl in a bunch of these deals. And so there's this question of like, you know, are they, are they chirping at each other intentionally?

• 14:39John Coogan?

  And so Jamie Dimon was cautioning investors about potential risks in the credit market by invoking a proverb. "When you see one cockroach, there are probably more." And so he was referring to recent loan defaults, such as the bankruptcy of auto parts maker First Brands and subprime lender Tricolor Holdings, as warning signs of broader credit issues. So Jamie noted, or Dimon noted, that JP Morgan took losses on some bad loans and implied that trouble in one corner of the credit market could mean undiscovered problems elsewhere, implicitly casting doubt on the booming private credit sector. And so Mark Lipschitz fires back, and he says, "I guess he's saying that there might be a lot more cockroaches at JP Morgan."

• 15:21John Coogan?

  And so he's, he's actually saying like, oh yeah, you, maybe you should go check out their books and see if they have other, uh, you know, bad stuff. Because I, uh, so First Brands collapsed was an isolated case of alleged fraud, actually, in the syndicated loan market. And it was not in the direct lending arena where Blue Owl operates. So Blue Owl had no exposure to First Brands. Um, and yet, and yet, uh, Mark Lipschitz was still, you know, firing back at JP Morgan for kind of casting doubt on the, uh, on the direct lending arena where Blue Owl plays. So, uh, there's these cockroaches, uh, there's these cockroach statements and they kind of go back and forth on this, but, um,

• 16:02John Coogan?

  the, the history of Blue Owl is also interesting. It's this like merger between a few different, uh, a few different companies here. And it's part of this, uh, broader, uh, boom in, in.

• 16:13Jordi Hays?

  And Blue Owl is, was the primary lender for, uh, CoreWeave.

• 16:19John Coogan?

  CoreWeave, and they've also done Stargate. They've done a ton of stuff.

• 16:22Jordi Hays?

  Yeah.

• 16:22John Coogan?

  Um, and, but interestingly, their, their, their data center business is, I think, like, less than a third of their overall business. They have a lot of other, a lot of other stuff going on here. Um, so, uh, George Walker, who's the CEO of the old line money management firm, Newburger, Bur, uh, Bergman, Berman, he's a cousin of President Bush. He says, it's extraordinary what they've done. It was just a startup and now their 26.6 billion dollar market cap compares to a number of large, century-old financial institutions. Uh, there were some, "Blue Owl's backstory entails some rich, behind-the-scenes machinations, but more significantly, it reflects the stunning trajectory of private markets which have tripled

• 17:05John Coogan?

  to 26 trillion in assets over the past decade." The company's also, yes. Uh, and, and so, I mean, I do think it's important to keep like the scales in mind here. Like the 1.4 trillion seems so big in the venture context and we think about, we think about Sam Altman as a venture-backed founder. But he's now playing in a market that is

• 17:28Jordi Hays?

  Playing a hyperscaler game.

• 17:29John Coogan?

  Yeah, he's playing a hyperscaler game. And so when I think about, it's like

• 17:33Jordi Hays?

  And so one thing

• 17:34John Coogan?

  1.4 trillion, that's the same size as the oil and gas market.

• 17:37Jordi Hays?

  Metas deal, Metas Manhattan, like Manhattan Project scale data center, the five gigawatt data center that you talked about, them doing this deal with Blue Owl on. Metas also just did a $30 billion bond offering.

• 17:51John Coogan?

  Yeah.

• 17:52Jordi Hays?

  Which has four billion of 4.2% senior notes due in 2030 and then all the way up to four and a half billion of 5.7 senior notes due in 2065. And there was an order book of around $125 billion for the $30 billion issuance. So there's a massive amount of

• 18:10John Coogan?

  Huge demand, yeah.

• 18:10Jordi Hays?

  So this is not, at least that we know of, what what OpenAI has not been raising this style of debt for the business.

• 18:17John Coogan?

  Yes.

• 18:18Jordi Hays?

  And it's unclear if there would be like a ton of demand for OpenAI's like on balance sheet debt.

• 18:29John Coogan?

  Totally.

• 18:29Jordi Hays?

  Given that it's unclear if they're going to be able to

• 18:32John Coogan?

  Totally.

• 18:32Jordi Hays?

  Spend, you know, what they've already

• 18:34John Coogan?

  Yeah, but but underwriting a data center with OpenAI as a client is very different than underwriting OpenAI directly.

• 18:41Jordi Hays?

  Yeah.

• 18:42John Coogan?

  So there's some really funny quotes in this article. Blue Owl is the pretty girl at the dance right now, says Wall Street trader David Williams. We're talking many billions in private credit. Ah, yes, private credit. Though, Blue Owl has three lines of business. Private credit, specifically direct lending in private equity deals, is the firm's calling card and growth engine and the straw that's stirring Wall Street's punch bowl lately. They also have this like GP business. If you want to buy the GP stake in Alternative Asset Manager, you can do that through Blue Owl. But what everyone's interested in is this private credit specifically for AI assets, at least from our perspective. I'm sure there's other people that find the other pieces of their business much more

• 19:25John Coogan?

  interesting. But its core direct lending business has $145 billion in AUM out of 284 billion total. So that's about half the fund. And that was conceived. The firm started in 2016 as Owl Rock at the Putnam Restaurant in Greenwich, Connecticut, of course, comfort food at its best. By principals Doug Ostrover, formerly the O of GSO Capital Partners, now Blackstone Credit, Craig Packer, a former Goldman Sachs partner, and Lipshitz, a former KKR partner. The name came from "the wisdom of an owl and the stability of a rock," says Lipshitz. And the website was available.

• 20:02Jordi Hays?

  That always helps.

• 20:05John Coogan?

  So instead of relying on in-venture, we all think of the GPLP, Private Markets Fund Structure, right, Jordy? Owl Rock changed this. They don't do the typical GPLP split. They use what's called business development companies, BDCs. So those companies issue stock and lend money to businesses, usually those with junk credit ratings. So something like a one-off data center that really only has like one client and it's not like Apple, it's not Microsoft, it's not, it's not an actually like, you know, been in business for 30 years, it's not the government. And so it's going to have a junk rating, it's going to be higher, a higher interest debt instrument. And other, and this has actually been a trend, other major alt firms are also turning to BDCs, which support higher yields.

• 20:50John Coogan?

  And so BDCs send some 90% of the interest collected on those loans to shareholders through dividends. So they've basically created the same structure as a real estate investment trust, or something close to it. And so this has allowed them to scale. So two of Blue Owl's BDCs are publicly traded, others are private, they have Blue Owl Capital Corp., which yields 11.4%, and Blue Owl Technology Finance, which yields 9.9%. Both are down about 14% this year, the former from January 1st. And so Goldman Sachs recently called the fears overblown about, you know, the risk of falling rates and weakening credit. And they cited Blue Owl as undervalued, noting that it has a stock price to fee-related earnings

• 21:35John Coogan?

  multiple of 21.7, which is 5% below its two-year low. So the stock has been beaten up, but it still has like a buy rating from Wall Street firms. Blue Owl has generated a stable, highly predictable stream of earnings, says Ostrover, the other co-CEO. It makes no sense that we're down more than our peers, he says. If anything, we should be down less. I love it. I love a defensive CEO. Love the confidence. Wall Street may be particularly wary of direct lending, as shares of both Blue Owl and Ares, which specialize in that business, have fallen hard. It's also true that both stocks had previously outpaced their peers. The second leg of the Blue Owl stool was created years earlier when a Lehman Brothers executive, Michael Rees, started a fund

• 22:17John Coogan?

  at Newburger Berman that bought stakes in asset managers like D. Shaw. This is what I mentioned earlier about buying GB stakes. Rees named his endeavor Dial, after his children Dylan and Alexia. He just took his two kids' names and pushed them together, raised its own capital from Koch Industries, and invested in the likes of Silver Lake and Vista Equity Partners. So, he was a vehicle to allow you to buy GP stakes in Silver Lake and Vista Equity, which are not publicly traded, I believe. In 2020, Blue Owl merged with Owl Rock, and so the resulting company was named Blue Owl. A bank working on the deal had called it Project Blue, so Blue was added and Rock was dropped

• 23:01John Coogan?

  because it was Owl Rock before. And so, the hatching of Blue Owl was problematic to some companies in which Dial had invested, particularly Sixth Street Partners and Galub Capital, both of which sued, claiming the new company created a competitor with sensitive information about their operations because, of course, they own GP stakes in the companies. And so, in 2021, Blue Owl bought Oak Street Real Estate Capitalist, Chicago-based firm specializing in sale leasebacks and triple net lease deals as its third business. This wing of Blue Owl has AUM of $71 billion and is home to the Meta Infrastructure deal. So, it's like a remarkably balanced stool. I'm sort of shocked. I was expecting it to

• 23:46John Coogan?

  be like, you know, oh, we hear about Blue Owl in the Meta context, and that's their main business. Or it's a new thing, and it's only 5% of their business. But, in fact, they have... A pretty diversified offering across a few different products. And so this wing now has 71 billion and is home to the meta infrastructure deal and others such as Stargate data centers in Texas and New Mexico. Next, Blue Owl is working on AI deals with N scale and Valor Equity to finance purchases from Nvidia, whose chips go for $30,000 and up, according to people familiar with the matter. Blue Owl built its direct lending business by borrowing from the Silicon Valley playbook of scale first monetize later, or by underpricing established private credit firms to gain deal flow and then raising fees later.

• 24:28John Coogan?

  Most of the firm's direct lending business is done as part of private equity buyouts. So Toma Bravo, Blackstone, Warwick Pincus, these companies come in and then Blue Owl does the debt side of that. These investments generally entail floating junk bonds, a business pioneered by Drexel Burnham in the 1980s, but it was typically done with banks. Now it's done with these private credit firms. The private credit market has grown from 2 trillion in 2020 to 3 trillion at the start of 2025. So again, I'm like, that's growth, but that's not the craziest growth I've ever seen. Like, when I go back to global financial crisis, you know, you hear about these like 10x runups in these derivative markets.

• 25:08John Coogan?

  Like, I don't know. It just feels like, it feels like we're still in like the early stages of actually ramping this piece of the capital markets and marshaling that to the really crazy stuff. It feels like the crazy stuff is coming in two years. I don't know.

• 25:24Jordi Hays?

  Yeah, and that aligns with Doug, Doug from Semi Analysis's point. He was like, debt, we're still early in the debt cycle.

• 25:30John Coogan?

  We're early.

• 25:31Jordi Hays?

  But at the same time, market has jitters. I was working on our 2026 merch this morning.

• 25:37John Coogan?

  Yes.

• 25:38Jordi Hays?

  And I had about an hour call. And so I missed the fact that Nvidia is down 4%, Core Weave is down 8%. And It's a little bit shaky out there. We're certainly not in white suits today.

• 25:50John Coogan?

  No, no. Well, let's let's go over to the timeline. Let's go over to some of that other news that we wanted to touch on today. But first, let me tell you about cognition, the makers of Devon, the AI software engineer, crush your backlog with your personal AI engineering team.

• 26:08John Coogan?

  So Alex Heath has a scoop here in sources. During a recent private call, OpenAI's investors asked about external signs that ChatGPT's growth is slowing. CFO Sarah Fryer.

• 26:20Jordi Hays?

  This is the external signs where I think like App Store data, there was some data out of Europe.

• 26:26John Coogan?

  Oh, yes, yes, yes.

• 26:27Jordi Hays?

  That it was hard to read into the European data because Europe, Europeans.

• 26:32John Coogan?

  They don't work ever.

• 26:33Jordi Hays?

  No, I mean, it was coming off of summer, right? And, and, you know, ChatGPT is popular as a student.

• 26:39John Coogan?

  But European summer hasn't ended yet. European summer ends like late December.

• 26:43Jordi Hays?

  No, I have to push back on that because when the French television network came.

• 26:47John Coogan?

  That's true.

• 26:48Jordi Hays?

  They were clearly done. That was about a month ago. They were clearly back from summer holidays and they wanted to learn about the AI talent war.

• 26:54John Coogan?

  Yes, that's true. That's true. No, we're obviously joking there.

• 26:58Jordi Hays?

  Anyway, so there's been some.

• 27:00John Coogan?

  There's been, there's been early warning signs. Well, yeah, walk me through some others.

• 27:04Jordi Hays?

  So I can walk through Alex's coverage. It says on Monday, OpenAI CFO Sarah Fryer held a private, she was really hoping to just not be in the news cycle this week, but when you're the CFO of one of the most important companies in the world, that comes with, comes with the job, but.

• 27:23John Coogan?

  What backholder is leaking this?

• 27:25Jordi Hays?

  Yeah, that's my question.

• 27:27John Coogan?

  You're an investor and you're leaking bad news to sources? What are you doing?

• 27:33Jordi Hays?

  Yeah, what are you doing?

• 27:34John Coogan?

  Did you get out or something? Like, are you, have you, have you somehow facilitated some short position?

• 27:39Jordi Hays?

  Yeah, jumped off the call, marking.

• 27:42John Coogan?

  This isn't very founder friendly. Whoever's doing this, whoever's doing this is not very founder friendly.

• 27:46Jordi Hays?

  Not great, but.

• 27:47John Coogan?

  Okay, anyway, take me there.

• 27:48Jordi Hays?

  Anyway, Sarah Fryer held a private quarterly earnings call with the company's biggest investors.

• 27:53John Coogan?

  Yeah.

• 27:53Jordi Hays?

  As usual, the numbers she shared were mostly up and to the right, but behind the strong top line figures, a quieter question hung over the call. Was ChatGPT's momentum starting to slow? During the Q and A portion of the call, sources say. Friar was asked to reconcile ChatGPT's meteoric growth in weekly users from 250 in September 2024 to over 800 million now, with external signs that the app's growth has slowed in recent months. Closed followers of OpenAI's business have been whispering about these signals from research firms since late summer, but this was an opportunity for company backers to hear directly from leadership on the matter. After telling the investors to take third-party estimates with a grain of salt, Friar acknowledged a chink

• 28:34Jordi Hays?

  in ChatGPT's armor. She said time spent had declined slightly in response to, quote, "content restrictions" the company rolled out in early August. She then referred to the loosening of those restrictions that CEO Sam Altman has said will be implemented for adults in December. So, this is them. Sam came out and said, "We're going to allow erotica on the platform." And Sarah says, "And OpenAI expects the decline in time spent to reverse." And so, this reminded me of a conversation we had about exactly a month ago, where I said, "I don't think them announcing that they're getting into erotica is a sign

• 29:17Jordi Hays?

  of strength. I don't think that's something that you do, you do just because you want to, right? In my view, it felt like, clearly, I mean, clearly, there's user demand for it, but at the same time, that felt like something that you, that they would do in order to stimulate growth while they get a bunch of other monetization online, right? So like commerce, ads, et cetera.

• 29:42John Coogan?

  Yeah, no, no, that makes sense. Yeah, I mean, the original, like, founding team at OpenAI was incredibly idealistic, right? Like incredibly, like, you're going to work on a nonprofit on like, superintelligence, like AGI, like, you truly are working on, like, what you see as one of the most important problems, what I agree with is one of the most important problems. Then, of course, like, you know, eventually, the, eventually, the company evolves and you, and you bring in business leaders. But at the same time, like, like, I do believe that when they say, "I want to cure cancer," I believe that.

• 30:25Jordi Hays?

  I believe that too. But the reason I reacted strongly to it was that...

• 30:29John Coogan?

  Yes.

• 30:30Jordi Hays?

  There had been messaging, you know, around the same time of I don't want to be in a world where we have to decide between curing cancer and free education for the world.

• 30:40John Coogan?

  Yes.

• 30:40Jordi Hays?

  And so then, at that same time, deciding we're going to do erotica.

• 30:44John Coogan?

  It was very weird timing. It was very weird. It was very weird timing that those two statements like came out one after another.

• 30:52Jordi Hays?

  I'm, yeah, I'm actually surprised why they're waiting till December to roll out.

• 30:56John Coogan?

  Yeah.

• 30:57Jordi Hays?

  The.

• 30:57John Coogan?

  So, so, so in this scoop, do we have any, do we have any specific data on, on what exactly, what exactly, you know, is indicated in terms of chat GPT's growth slowing? Can we actually try and define that a little bit more? Is that, is that users, because there were already at almost a billion users? Is it, is it time on site? Is it monetization? I mean, deceleration, we were talking about this, like, OpenAI has decelerated revenue before. Because they, I think they tripled and then they went to a doubling or they went, or they were quadrupling. And then they went to a, to, to a tripling. And so they actually decelerated in 2024 and then they re-accelerated in 2025.

• 31:42John Coogan?

  And so I was kind of saying like, well, you know, there's a good chance that you could see deceleration in the future. It's happened before. Like, to be accelerating forever is, is basically impossible. But it would be interesting to track exactly how, how chat GPT's growth is slowing. There certainly feels like there's just a level of saturation. Do you have the stats?

• 32:05Jordi Hays?

  Yeah, so Meta, so SimilarWeb put out some information on month-over-month change in total visits to leading gen AI tools. ChatGPT is at the bottom of a list that includes Gemini, DeepSeek, Perplexity, Grok, Claude, Copilot and Meta AI. The key difference here is that like ChatGPT is so much bigger than these other platforms that they could still be adding more users on a, on a, on a total, on a, on a per-user basis than these other tools, even if their growth is slower.

• 32:38John Coogan?

  Yeah, yeah, that makes sense.

• 32:39Tyler?

  Yeah, I mean, they do expect their growth to slow down. So like from, this is Epoch AI, they, it was like OpenAI revenue estimates.

• 32:48John Coogan?

  Yeah.

• 32:48Tyler?

  So.

• 32:49Jordi Hays?

  Uh, 2025 is 13 billion and then they expect 2.3x, 2026, uh, 2x in 2027 and 1.6x.

• 32:57John Coogan?

  Yeah.

• 32:57Jordi Hays?

  So I mean, it's not like they're just saying like it's, it's going to go from 2x to 3x to 4.

• 33:02John Coogan?

  Yeah, exactly. So I wonder, I wonder how much of this is just framing something that was sort of already priced in as a, as like a bad thing. Like, I feel like people were expecting deceleration. And so if, if she's, if she says, like, if she's on the call and she says, um, as expected, we're really big, we're going to be decelerating the level of new users that we're adding. And then.

• 33:35Jordi Hays?

  I don't think she should say that.

• 33:38John Coogan?

  Yeah, maybe that would be bad framing. I don't know. It just doesn't seem that crazy.

• 33:42Jordi Hays?

  Please don't say that.

• 33:43John Coogan?

  I don't know. It doesn't seem that, it doesn't seem like that bad of a thing to say. Like, uh, the, like, like Meta is not accelerating top line, uh, top line users. They have like 3 billion users. Like, no one's expecting them to accelerate top line users. Uh, maybe like randomly, one quarter they accelerate, but not continually. Um, and so I don't, I don't know. It, it just feels like an odd thing. Um, did, did you get a chance to read the Ed Zitron article, this thing?

• 34:13Jordi Hays?

  I did, but I didn't, I felt it, uh, Ed is such a massive OpenAI hater.

• 34:19John Coogan?

  Sure.

• 34:20Jordi Hays?

  That I think it was hard to, and the sources were pretty unclear. It was hard to read too much into it.

• 34:27John Coogan?

  Okay. Well, let me tell you about figma.com. Think bigger, build faster. Figma helps design and development teams, build great products together. You can get started for free. Uh, should we head over to some timeline?

• 34:38Jordi Hays?

  Let's do it.

• 34:39John Coogan?

  What else people are saying? Uh, Cairo Smith says, it's going to be very funny when LLM's plateau around 120 IQ and what we've created is just a digital guy, not a god.

• 34:51Tyler?

  I mean, this doesn't make any sense. If we have like infinite digital guys, that's like literally a guy is just like a worker.

• 34:58John Coogan?

  Yeah.

• 34:59Tyler?

  If we have infinite workers, that's like insanely bullish.

• 35:01John Coogan?

  Uh, yes.

• 35:02Jordi Hays?

  It'll be bullish, but, but we've been prom- you know, people have been promising.

• 35:05John Coogan?

  He said funny. He didn't say bearish. He said it's gonna, he didn't say it's gonna, it's gonna collapse the economy when we just get a digital guy. He said it's gonna be funny. And I agree.

• 35:16Tyler?

  I guess that's true.

• 35:17John Coogan?

  It's funny.

• 35:17Tyler?

  But this is still like a very bullish take. I think people, you, I think you might read this as like being, he's kind of bearish.

• 35:22John Coogan?

  Yes, yes, yes. No, I know. I know. I think you're right. If you get a digital guy, that's pretty powerful because guys can do a lot of stuff. It's valuable.

• 35:29Tyler?

  I love guys.

• 35:30John Coogan?

  Yeah.

• 35:31Jordi Hays?

  You need a guy for everything.

• 35:32John Coogan?

  You do need a guy for everything and you will in the future.

• 35:34Jordi Hays?

  And that's been one of the great luxuries, right?

• 35:36John Coogan?

  Yeah, that's the agent.

• 35:36Jordi Hays?

  The middle class has apps.

• 35:38John Coogan?

  Yes.

• 35:38Jordi Hays?

  The wealthy have guys.

• 35:39John Coogan?

  Yes, yes, yes. And, and, and the, and the apps get better with the, uh, the apps get better with AI agency, AI agents, right? Uh, because you, you, you, you have, you have an app that acts a little bit more like a guy than, than a, uh, than an app.

• 35:58Jordi Hays?

  Real quick, Scoot in the X chat, uh, almost bought a counterfeit TBPN hat.

• 36:03John Coogan?

  No way. Watch out.

• 36:05Jordi Hays?

  There is a counterfeit, uh, TBPN store. These are, uh, not by us. They've made it look like it, it's by us. I'm not going to name the link, but we have not sold any merch. Uh, we will make the merch available, uh, as soon, uh, as soon as possible. Uh, I was working on it, uh, this morning before the show, so it's coming, but do not buy any of the counterfeit merch. My big concern with that site is I don't even know if they ship it.

• 36:35John Coogan?

  Yeah, that is a big question.

• 36:37Jordi Hays?

  They, and they also made like a hundred products.

• 36:40John Coogan?

  They made so many products and I did email them and I, and to be clear, I emailed.

• 36:43Jordi Hays?

  And our lawyers emailed them and we've submitted a bunch of take day requests.

• 36:47John Coogan?

  When I, when I emailed them, I was like, hey, like I assume like you're just a fan, like, uh, I was, I was being too nice. I was being golden retriever mode, but I, I did say, uh, I was like, hey, like I, you know, I appreciate this idea. This is, this is very cool that you're enjoying the show. Uh, but like, we just don't want people to get confused that we have our own plans for a store.

• 37:07Jordi Hays?

  They're like, okay, I'll make two hundred different products.

• 37:09John Coogan?

  They just didn't, they just didn't respond at all. And so then we, we sent a takedown notice and we will be fighting that tooth and nail. So stay safe out there.

• 37:16Jordi Hays?

  But please, uh, don't buy it because, uh, we have nothing to do with it.

• 37:20John Coogan?

  Uh, Tyler, did you get a chance to read Fiji Simo's latest blog post, moving beyond one size fits all?

• 37:26Jordi Hays?

  I hope you didn't read. I hope you studied.

• 37:28John Coogan?

  Sat your ass.

• 37:30Tyler?

  Uh, we talked about this for a tiny bit yesterday.

• 37:32John Coogan?

  Yes, yes, yes.

• 37:32Tyler?

  This was just the, the five point one.

• 37:34John Coogan?

  Yes.

• 37:36Tyler?

  Yeah, it, nothing I would say super substantive in it. Um, she kind of is talking about how, um, I, I think with the, with five point one, they were going.

• 37:46Jordi Hays?

  Like we made our digital guy faster, better, stronger.

• 37:50Tyler?

  Yeah.

• 37:51John Coogan?

  Is that what it is?

• 37:52Tyler?

  She talked about the EQ, um, of the model lot, uh, rather than IQ. Uh, so that's why you see a lot less benchmarks. I think it's just hard to actually benchmark that kind of stuff.

• 37:59John Coogan?

  Yeah.

• 38:00Tyler?

  But the actual like style of the model, um, talking about kind of safety, uh, ish stuff where there's like, you know.

• 38:07John Coogan?

  I mean, it is, it is crazy following this company so closely because, uh, in, in here, there's a line that says, with more than eight hundred million people using chat GPT, we're well past the point of one size fits all. And eight hundred million sounds amazing, except I feel like I heard the eight hundred million number like two months ago. And I feel like they have been accelerating so fast.

• 38:26Jordi Hays?

  You'd expect them to be at nine hundred.

• 38:27John Coogan?

  Eight fifty, nine hundred, exactly. And so the fact that they're repeating the eight hundred number is like, what's going on?

• 38:31Jordi Hays?

  They're like, sorry, we can't add a third of the United States every month.

• 38:35John Coogan?

  I know, I know, I know. It's very, very high stakes. It's very, it's very impressive what they built, to be clear, but, uh, I, I just, I am really keyed on that, like eight hundred, eight hundred. Because I was, I was excited. They were going to hit a billion. It was going to be a big moment. Um, and, and yet it feels like maybe that's a, a next year, a next year goal. But, uh, near Cyan has been going back and forth on this. Uh, so, uh, near said, chat GPT is officially in its Fiji Simo phase. Uh, if you're wondering why the upgrade doesn't come with benchmarks, have fun. Rune says, "You are confidently wrong about the internal dynamics of this. It could be better summarized as an infra-clean-up." And Neer says, "The source for my top tweet is Fiji's blog post from today,

• 39:20John Coogan?

  which discusses the release and its goals. I don't really know what else to say." Um, I don't know. Is there hunger for benchmarks anymore? I might actually take the other side of this here and say that I like that they're getting away from benchmarks. I wish they didn't do a 5.1. I don't want any more confusion. What is 5.1 versus 5? Just make it better and don't do a release. And certainly don't tell people, because what if people...

• 39:52Jordi Hays?

  Easy for you to say because you're not in love with the specific version, John.

• 39:55John Coogan?

  I'm in love with 5. I'm in love with 5, Rune. Bring back 5. I don't like 5.1. I need 5 specifically. Not 4.0, not 5.1. I need 5.

• 40:06Jordi Hays?

  5, please.

• 40:06Tyler?

  I will say, when it was...

• 40:08Jordi Hays?

  Just put the 5 in the bag, Rune.

• 40:10John Coogan?

  Yeah, come on. Bring back 5. Bring back 5. We need to cyberbully Rune until we bring back 5. Even the most minor tweak to the model is unacceptable.

• 40:20Tyler?

  You can still use 5 Pro.

• 40:22John Coogan?

  I know.

• 40:22Tyler?

  So that's gotta count for something.

• 40:24John Coogan?

  Only 5 thinking.

• 40:25Tyler?

  Okay, but I was saying, when GPT-4, like not 4 or anything, when that was the best model, they would do updates. They wouldn't like say, "Oh, this is a new model." And people could definitely tell.

• 40:37John Coogan?

  Oh, sure, sure.

• 40:38Tyler?

  Okay, they released a model, it's worse. And then everyone on Twitter would hate it, but then I think...

• 40:42John Coogan?

  So you think putting a version number actually helps like fight back against that? Because people are like, "Oh, I get it why it's worse. You changed it." Like instead of like there being a surprise under the hood?

• 40:55Tyler?

  I think it's more... It's just like easier for people to tell it that it was actually a change when they're noticing something that they've been depending on.

• 41:04John Coogan?

  Yeah, yeah, yeah.

• 41:04Tyler?

  And then it's a little different now, like.

• 41:05John Coogan?

  Yeah, I just don't understand why you're why you're surfacing it in the UI of a of like, if I open my chat GPT app at the top now, it says chat GPT 5.1. Like, this is a consumer iPhone app. It is today's pulse is here, talking about Blue Owl Stargate investment. And chat GPT 5.1. And I just have to wonder if like, the the 5.1 is like unnecessary. Like, if I open up Instagram, it does not tell me what version of the Reels algorithm I'm on. They're going to change it every day. Like, just change the algorithm all the time. Just make it better. And yeah, if you make it bad, I'm going to churn. So don't do that. Make it better every day, forever. And just keep shipping. Ship every single day.

• 41:46John Coogan?

  Like, I'm sure that internally, there are version numbers of Google Search, right? Because they push to like a main GitHub branch or something, or whatever they use for their mono repo. But like, there is version tracking for like, the Reels algorithm. They just don't surface that to the user. So I don't know why they're surfacing 5.1 to users after there was like, so much pushback over 4.0, 5.5, all this other stuff. It seems like, I don't know, it seems like a mess. You know what doesn't seem like a mess? Vanta, automated compliance, manage risk and accelerate trust with AI. Vanta helps you get compliant fast and we don't stop there. Our AI on automation powers everything from evidence collection and continuous monitoring

• 42:30John Coogan?

  to security reviews and vendor risk.

• 42:32Jordi Hays?

  There was one more note from Alex Heath's article on OpenAI that actually, I think, is worth sharing. He says, after Meta's last earnings call, sources say, and this is confusing because the name of sources is.

• 42:46John Coogan?

  I don't want to hear what Alex Heath has to say specifically. Give me some like, people who are close to the matter. I don't, I don't really, I don't want to know what sources says. I want to know what people close to the matter.

• 42:57Jordi Hays?

  Sources say that sources say.

• 43:00John Coogan?

  Okay.

• 43:00Jordi Hays?

  Sources says that sources say CEO Mark Zuckerberg joined an internal employee Q and A and shared a warning about the AI bubble. First, he shared a breakdown of how different players from startups to big tech names like Meta should think about timing their bets. He described three camps in the industry: optimists, who see superintelligence emerging within two to three years; moderates, who expect breakthroughs by the end of the decade; and pessimists, who think it'll take well into the 2030s. Each outlook, he said, dictates how aggressively a company invests. Then he expounded on a version of the answer he gave me recently in our last interview. He noted that while unprofitable startups like OpenAI and Anthropic risk bankruptcy if they misjudge the timing of their investment, Meta has the advantage of strong cash flow.

• 43:41Jordi Hays?

  He also made the point that while big tech has historically been relatively debt-free compared to large companies in other sectors, the AI infrastructure race is leading Meta and its peers to start using leverage in a more normal way relative to their size. Like he told me in September, Zuckerberg acknowledged to employees that Meta's market cap could suffer if his timing is wrong and the bubble bursts, but the message was clear, we'll have the balance sheet to survive and emerge stronger than most on the other side. So anyways. Super Dario was quoting that and said, "The obvious endgame in the next two to three years is that Microsoft acquires OpenAI, Google acquires Anthropic, and Tesla acquires XAI.

• 44:25Jordi Hays?

  Only the large caps survive."

• 44:27John Coogan?

  That's a nuclear hot take.

• 44:30Jordi Hays?

  Nuclear hot take.

• 44:31John Coogan?

  That is crazy, crazy. How would that even? I don't know. Could Microsoft get the rest of OpenAI? I mean, I guess they probably have the...

• 44:39Jordi Hays?

  Depends on the price.

• 44:40John Coogan?

  Size. It's a $4 trillion company versus a $500 billion? Yeah, I don't know. It doesn't seem like impossible. Let me tell you about graphite.dev. Code review for the age of AI. Graphite helps teams on GitHub ship higher-quality software faster and starting for free. I want to run through some more of these posts. Yuchin Jin says, "In contrast, OpenAI employees stayed for two-plus years, sold $6.6 billion of equity last month. Many hit the $20 million cap. Morale and vibes are high, but so is the turnover rate. New OpenAI hires are often shocked by how many Slack accounts get deactivated each day."

• 45:18John Coogan?

  This is a screenshot of an interaction between Jack Morris and Liang Chen Luo at XAI. Jack says... There are dozens or perhaps a couple hundred X OpenAI, XAI, Google DeepMind researchers founding companies in the current climate.

• 45:34Jordi Hays?

  And this was talking about-

• 45:37John Coogan?

  And Liang Chen says, "The simple answer, the liquidity of Anthropic options is the worst among those frontier labs."

• 45:42Jordi Hays?

  Yeah, this is talking about how a lot of people have been leaving various labs. Less people have been leaving Anthropic. And so Liang Chen is saying the simple answer.

• 45:53John Coogan?

  Yeah, and so under Carpath, he says, "Bullseye, it's interesting how large of a fraction of people don't see the dominant first-order term that drives behavior of people in companies. You can construct a powerful world model just by understanding one, just by one, understanding the system and two, assuming this, there is only this single term, like liquidity, how much, how much cash you have. What would be interesting is if you could, is if companies started offering liquidity in the form of annuities. So imagine you have an employee who's like a rock star, they're gonna sell $20 million of stock and they're gonna basically be post-economic.

• 46:38John Coogan?

  If you could instead say, "We're, we're, we're going to be paying you out, like you're selling now, but you're, but we're, but you get a billion dollars a year or something." There needs to be some way to like, sort of cap, is there, is there some way to cap the actual amount? I guess 20 million was the cap. But I don't know, there's some way to, to, to deal with this, like, you know, if you don't get, if you don't get employee liquidity, like they'll leave for something else, they'll just go somewhere else that pays them a higher salary. If you give them too much liquidity, they'll leave and start new companies. Very, very tricky to manage the, manage the team. But that is the nature of these, these companies.

• 47:21Jordi Hays?

  Chad Byers, that is his real name, is a Chad in the literal-

• 47:29Jordi Hays?

  Sense and figurative sense. He says, one of my strongest beliefs is that it's going to take 20 plus years to get AI penetrated into the real economy. I filled out a piece of paper at the doctor's office last week.

• 47:41John Coogan?

  I filled out a piece of paper at the doctor's office last week, too. It was crazy and I was wondering like, when will we see a fast takeoff in DocuSign? Fun, I finally realized why DocuSign has so many employees. Because you need to go to every doctor's office in person, apparently for decades, to get them to use online form filling technology. Like, general SaaS really does not, has not permeated as much of the economy as people think. A lot of people still on spreadsheets for all sorts of stuff. A lot of people still on paper and pencil. There is a, you know, we joke about being pro-ramp, anti-paper receipts, of course. There's a company that makes paper receipts that's worth $20 billion. $20 billion.

• 48:23John Coogan?

  There are fax machine companies, the fax machine industry is still over $1 billion. Still a billion dollar industry.

• 48:29Jordi Hays?

  I would think it was actually more.

• 48:32John Coogan?

  Yeah, maybe that's too small. It's sort of hard to like calculate because a lot of these things have been like rolled up into other companies.

• 48:39Jordi Hays?

  Big Fax, Big Fax wants you.

• 48:41John Coogan?

  Like, I think Canon is one of them and so like, I don't even know if Canon breaks out their fax business anymore because they sell so many cameras and other equipment. But, yeah, that's funny, it's interesting.

• 48:54John Coogan?

  Mear says, IMO, in my opinion, the entire AI field switched from explore to exploit two years early. Everyone convinced themselves, no, this isn't the case. Look at our exploration and it's like watching someone go on a 50-foot walk and find a cool tree when the entire continent is still covered in fog of war. Now that the terrain seems known, it should be harder to convince yourself. I suppose this makes sense, given a lot of people hint at being good as gone as soon as they have enough money. But no, not me, I've been gone for ages already. That's a very funny post. I suppose, weren't we talking about this yesterday? This idea of like, of like, where will the next innovation come from?

• 49:38John Coogan?

  Where will the next breakthrough come from? Will it come from any of the, any of the, like, will it come from XAI?

• 49:47Jordi Hays?

  Will it come from DeepMind?

• 49:49John Coogan?

  Yeah, like, how much do you need the college campus? How much do you need that environment?

• 49:53Jordi Hays?

  Yeah, well, it comes from a university.

• 49:55John Coogan?

  A university. The universities seem to have not, like, it's very odd that the university system did not produce the transformer paper. Feels like the perfect thing to come out of a university setting.

• 50:03Jordi Hays?

  Yeah, I mean, it's really tough right now. You can stay in a university system and be a student and be taking on debt. Or you can go work at a lab and make, have a good shot, at least if you did this a few years ago, have a good shot of making twenty million dollars in a few years.

• 50:18John Coogan?

  Yeah.

• 50:18Jordi Hays?

  It's hard to give up that kind of opportunity.

• 50:21John Coogan?

  Yeah. Uh, this Wall Street Journal article has given more context on the AI boom. Says the AI boom is looking more and more fragile. AI stocks have swung downward as doubt rises about sustainability and payoff. Perfect isn't good enough and any sign of weakness is a disaster. This is what's happening. It's like you double revenue and your stock trades down. It's very, very odd, but everything's been priced to perfection.

• 50:43Jordi Hays?

  Corey Weave, who, again, is the only NeoCloud in the platinum tier semi-analysis, is down forty-five percent.

• 50:52John Coogan?

  That is remarkable. It's like, they have built a, like, by all accounts, fantastic product. Fantastic product. I mean, like, I don't know, maybe semi-analysis has got it wrong, but I don't think so. But it feels like they've built something that, as infrastructure, delivers at the level of the hyperscalers, just like a fantastic product. Uh, and yet, uh, the, the market, like, sort of ran away with that narrative and now is pulling back a little bit, so. Recent history suggests that the gloom won't last, but the shakeup serves as a strong reminder that the early years of AI pose a challenge for investors accustomed to measuring returns on a twelve-month time horizon. Generative AI services require massive data centers and state-of-the-art chips and server racks that don't come together quickly.

• 51:37John Coogan?

  The companies at the heart of the, of AI are now talking about years, plural, of all major investments still ahead. So everything has kind of sold off a little bit. Oracle, uh, is down the most from its three-month high. Nvidia's down a little bit. Google is neck and neck. They're doing great. Um, and oddly, Apple didn't even make the chart because they're not, they're so not indexed to AI right now. Um, last, uh, the latest episode of Fragility started last week when shares of some of the sector's leading lights lost ground. After a broad-based recovery on Monday on news of a possible end to the government shutdown,

• 52:15John Coogan?

  AI stocks fell again Tuesday, Nvidia's down 4% today, lost 7% last week, slipped another 3% on Tuesday, leaving it well shy of its $5 trillion market cap.

• 52:27Jordi Hays?

  Yeah, looking at the trailing 12 months, Apple is up 21% and Microsoft, which owns a third of OpenAI, is a huge AI beneficiary, has invested a ton in it, is only up 18%.

• 52:39John Coogan?

  Wow.

• 52:40Jordi Hays?

  So, Apple, which has been going through navigating a trade war.

• 52:43John Coogan?

  This is the secret, just don't invest in AI.

• 52:45Jordi Hays?

  Do nothing, win.

• 52:46John Coogan?

  Just don't do it, just skip it entirely, no.

• 52:52John Coogan?

  Just do nothing.

• 52:52Jordi Hays?

  Tim Cook's like, wait, why would I spend $100 billion on CapEx? I can sign up, he's like, I can sign up for ChatGPT for like 20 bucks.

• 53:00John Coogan?

  So hard. He's like, yeah, you know, we have this, we have Safari, we have, we have this web browser, you can go to use AI from there, just do that on your phone. That would have been the correct thing, instead of getting over their skis a little bit. On the branding side, fortunately not on the financial side, so they've done very well. There is, of course, real reasons to worry about the sustainability of the boom. Chief among them is that there is far more AI computing infrastructure spending than there is AI revenue. A gulf widening by the day, OpenAI says it's planning to spend $1.4 trillion in the next eight years, but is only pulling in around $20 billion of annual revenue today. And it lacks a clear business model to reach the hundreds of billions it needs within the next few years to keep the spending growth going.

• 53:46John Coogan?

  OpenAI is projecting losses will swell to $74 billion in 2028. So skittish has the mood become that CEO Sam Altman felt the need last week to defend the company on X, saying the spending was understandably causing concern. Wow, he says he understands your concerns, Jordy. He pointed to his plans to boost revenue with new consumer devices, robotics efforts, and AI cloud computing service, none of which currently exist.

• 54:14Jordi Hays?

  And this is why, when we were, the Monday after that interview, when we were talking about it, saying that wasn't a strong answer, because all those things seem like businesses that will...

• 54:26Jordi Hays?

  Lose a lot of money, even if they're successful.

• 54:29John Coogan?

  Yeah.

• 54:30Jordi Hays?

  Until they can reach some huge scale. Look at Meta's efforts in hardware. Look at early days of any hyperscaler. Look at any robotics company, right? These are not cash engines. They're cash incineration engines that could one day.

• 54:46John Coogan?

  If they want, if they want to get more like cash generation, stop incinerating so much cash, OpenAI should, should, you know, I know they're doing a lot, but they should expand into like just, just rolling up HVACs, HVAC businesses, just buy a bunch of HVAC.

• 55:01Jordi Hays?

  Adding agents into the workflows.

• 55:03John Coogan?

  Don't even, agents, we don't even need to do that. Just buy a good durable business and roll it up.

• 55:09Jordi Hays?

  Plumbing, electrical, roofing.

• 55:12John Coogan?

  Storage units. There's, there's a lot of good money in storage units. If they could get into some storage units.

• 55:19Jordi Hays?

  It's.

• 55:20John Coogan?

  Just buying a storage facility.

• 55:22Jordi Hays?

  OpenAI cloud storage.

• 55:24John Coogan?

  Five percent off.

• 55:25Jordi Hays?

  Storage, storage, uh, storage units that look like clouds.

• 55:29John Coogan?

  Yeah, yeah.

• 55:30Jordi Hays?

  Cloud storage.

• 55:31John Coogan?

  Uh, lawn mowing businesses. They could get into some, a bunch of lawn gardening businesses. Um, there's a whole bunch of opportunities there.

• 55:38Jordi Hays?

  Landscaping.

• 55:39John Coogan?

  Yeah. I mean, just buying multifamily homes, just buying some multifamily.

• 55:42Jordi Hays?

  Single family.

• 55:43John Coogan?

  Single family homes, getting the rent payments. They put the money in, they buy the house, and then they get the rent payment, and that's how they make the money. And I, I think that could be, it, it's a proven business model. Like, we know it works. It works for a lot of people. A lot of people, they, they start with one single, single family home. They grow it. They keep.

• 56:02Jordi Hays?

  Box, Box of Orange is an OpenAI Property Management LLC. So they have the property management company.

• 56:08John Coogan?

  I think they should do it, yeah.

• 56:09Jordi Hays?

  They own the, the, the, the, the properties with another.

• 56:13John Coogan?

  Yeah.

• 56:14Jordi Hays?

  And, and so they can, they can actually play both sides.

• 56:16John Coogan?

  Yeah.

• 56:17Jordi Hays?

  Play both games, you know?

• 56:18John Coogan?

  They could get into dropshipping.

• 56:20Jordi Hays?

  Whoa.

• 56:21John Coogan?

  Think about it.

• 56:21Jordi Hays?

  They could set up a TVP and merch store.

• 56:23John Coogan?

  They could set up merch stores.

• 56:24Jordi Hays?

  Counterfeit merch store.

• 56:26John Coogan?

  For sure. That's what, you know, they keep talking about agentic commerce in the, in the ChatGPT app. Imagine like you go there and you're just like, I need some, I need some, need some T-shirts. And it just, it, it just instantly sends you some T-shirts. They're getting into dropshipping. Uh, they could also launch a course. You launch a course.

• 56:43Jordi Hays?

  How to build an AI startup.

• 56:44John Coogan?

  How to build an AI startup. Two thousand bucks. Buckle up, buddy. Get ready to pay two grand.

• 56:52John Coogan?

  Sam Altman's already been driving around in hypercars, you know?

• 56:56Jordi Hays?

  He has the garage.

• 56:58John Coogan?

  He has the garage for it.

• 56:59Jordi Hays?

  To be a course, bro.

• 56:59John Coogan?

  To be a course, bro. That'd be great.

• 57:02Jordi Hays?

  Actually, he has a much better collection.

• 57:03John Coogan?

  He really does. I would pay for his course, honestly. I would 100% pay for Sam Altman course.

• 57:09Jordi Hays?

  You see a guy in a McLaren, in a P1, and he's telling you, "I will teach you to be rich. I will teach you to build an AI."

• 57:15John Coogan?

  I mean, how to do deals, how to do deals from Sam Altman, I would 100% pay $2,000 for that course. I'm not kidding at all. Like, 100%, it's worth it. That would be better than any college course ever. Be incredible.

• 57:34John Coogan?

  I'm glad we're having a good time. Let me tell you about Julius, the AI data analyst. Connect your data, ask questions in plain English, and get insights in seconds. No coding required.

• 57:45Jordi Hays?

  Julius has an out-of-home campaign right now on SDA.

• 57:48John Coogan?

  It's really good.

• 57:48Jordi Hays?

  That says, "Ever since I was young, I wanted to transform data into actionable business insights."

• 57:54John Coogan?

  It's the best. It's the best.

• 57:56Jordi Hays?

  Fantastic. Great work.

• 57:59John Coogan?

  Meridoo says, "If you're down today, you're a certified beta bobble boy. You literally bid up SanDisk WTF. Alternatively, you can call yourself a bad beta, B-I-T-C-H." People are having a lot of fun. Dario for dicks.

• 58:16Jordi Hays?

  SanDisk is only down 15% today, so.

• 58:18John Coogan?

  SanDisk. Buy the hot drive.

• 58:20Jordi Hays?

  Yeah, the White House last night tweeted, "We are so back," in all caps.

• 58:26John Coogan?

  What was that? What did that mean?

• 58:27Jordi Hays?

  What did they mean by that? In what way were we back?

• 58:31John Coogan?

  I have no idea. But I have, I have news I need to share with you that I can't share on the stream. But let me tell you about Fall, a generative media platform for developers. The world's best generative image, video, and audio models all in one place. Develop and fine-tune models with serverless GPUs and automatic clusters.

• 58:51Jordi Hays?

  Anna in the chat says, "The OpenAI McLaren Museum." They open up a museum.

• 58:58John Coogan?

  The McLaren Museum. Just tickets. It's just like adding to our revenue. Like, we're gonna charge 25 bucks. You can bring your kids.

• 59:06Jordi Hays?

  I would visit. I would buy the course. I would go to the museum.

• 59:09John Coogan?

  Yes. Well, our first guest of the show is in the restream waiting room. Let's bring him into the TVP and UltraDumb. How you doing, Spencer?

• 59:18Speaker 03

  There he is. What's up, guys?

• 59:21John Coogan?

  What's up?

• 59:22Jordi Hays?

  I hope you haven't been watching the last five minutes, because we're having

• 59:25John Coogan?

  We've been all over the place.

• 59:26Speaker 03

  I want you to know that I have been watching. And guys, we are so back from the White House, that's gotta be a reference to the government shutdown.

• 59:35John Coogan?

  Oh, yeah. Okay, I thought it was

• 59:37Jordi Hays?

  I forgot about the government.

• 59:39John Coogan?

  So lost in the markets.

• 59:39Jordi Hays?

  I forgot about the government.

• 59:40John Coogan?

  I don't think about the shutdown. Okay, well, that's fantastic. For those who don't know, you introduce yourself a little bit. You give us a little backstory.

• 59:49Speaker 03

  Yeah, everybody. I'm a general partner at Co2, help lead our growth fund, focus on late-stage transcendent technology companies. So, we work with companies across, of course, software, AI, obviously, and then also some stuff in hard tech, SpaceX, Android, companies like this. So, we're a 25-year-old hedge fund, launched a private's business 15 years ago. We're about 70 billion of AUM today across

• 1:00:17Speaker 03

  There you go.

• 1:00:18Jordi Hays?

  Where's the mallet? We're looking for the mallet. There it is. It's in front of your computer, John. There we go. This is for Co2.

• 1:00:27Jordi Hays?

  We are thrilled to have you. I've had many fun conversations this year. First one on the air. The reason for today's appearance is none other than Cursor.

• 1:00:38John Coogan?

  Oh, yeah. What's new in Cursor world?

• 1:00:41Speaker 03

  Right. The GPT rappers are, you know, their demise was maybe greatly over-exaggerated on X over the past few years.

• 1:00:52Speaker 03

  Look, we've gotten to know Cursor for a long time. We just think it's a really special company. Uh, Michael and his team are incredible. I'm sure maybe you guys saw Bree's piece about the company, the unique culture. Yeah. How they approach hiring. Um, I've just never seen a company with such a deep bench of really talented young folks. Um, and then, look, on the growth, the growth speaks for itself, right? I mean, we're seeing folks on Twitter today talking about the company being the fastest ever to a billion of revenue, right? It's definitely in that air, um, which they disclosed today being at a billion of revenue. And then if you think about the things that have transpired over the past year with Anthropic coming out with an excellent product in Claude Code.

• 1:01:35Speaker 03

  Um, OpenAI responding with Codex over the summer. Again, an excellent product. Uh, all these things happening at once. And then you sit here and you wake up today and say, wow, Cursor's got an incredible business, incredible product velocity, an incredible team, and now their own model, which they shared yesterday, is their number two most used model on the platform in Composer. So, um, you know, there's a lot of good companies, uh, in San Francisco. It's kind of a nice thing. Like, in early 22, everyone was very worried that all of our 21 investments and everything was just gonna, you know, kind of wipe out. There's actually a lot of good companies in San Francisco. It's a great thing. There's, there's a decent.

• 1:02:13Jordi Hays?

  Narrative violation.

• 1:02:14Speaker 03

  Right, right. There's a lot of good companies. Um, there's a few, there's a few great companies also, but there are very few of these companies that, you know, the, the, the word of the day or the word I try to always come back to is transcendent. And, um, you kind of know it when you see it or you know it when you're around it. And that's what we think, uh, Michael and the team are doing at Cursor.

• 1:02:35Jordi Hays?

  Uh, funny, funny story. Uh, I, Cursor is, uh, I'm incredibly inspired by, by their growth and, and user love and, and everything they've accomplished over the last few years. But I had a painful moment when they, when they, uh, when they first kind of exploded onto the scene because I realized that, uh, Aman, uh, one of the co-founders had been following me since like 2020 or something. I was like. I I I had this I've had this like, you know, lingering fear over the last few years of like, you know, getting followed by somebody not reaching out, not investing, and certainly, certainly would have been smart a few years ago to um to.

• 1:03:16Speaker 03

  Well, listen, Jordy, it's not too late.

• 1:03:17Jordi Hays?

  It's not too late.

• 1:03:18Speaker 03

  We think there's still a lot of upside, you know, so we'll we'll see, fingers crossed.

• 1:03:23John Coogan?

  One of the frameworks that I've heard kind of bandied about around what's going on, like, a lot of people maybe want this to be more of a winner-take-all market than it is. Um, and yet, when and and yet, maybe because of Jevon's paradox, or just the nature of like, we it's very hard to understand how much code does humanity actually want to write? Like, it's potentially a ton. And so you're in this like entirely new market that's a blue ocean, and it's massive, and it's just growing, growing, growing. And so there's opportunity.

• 1:04:01John Coogan?

  And I think you're in a unique position where you you're you're in a number of names that do overlap somewhat, and there's a lot of opportunity. I'm wondering if you think that's the right framework, or or or is there more of a like a winner-take-all monopoly thesis with with this particular market? Or if there's other historical anecdotes that you go to to kind of understand how this might play out?

• 1:04:28Speaker 03

  Yeah, I'm I'm not sure what the best I mean, I'll get I'll get to the anecdotes. It's it's hard to find the best analog, and analogs are always difficult, especially for this. We're we're investors in OpenAI, Anthropic, and Cursor.

• 1:04:40John Coogan?

  Yeah.

• 1:04:40Speaker 03

  Um, we're also investors in Glean, Harvey, OpenEvidence, um, a number of companies across the kind of AI stack. Um, our view, right, if you just take a step back, right, people talk about the the bottoms-up TAM sizing on developers, to your point, people want to write a lot of code, 30 million developers in the world, right? A a fraction of a percent of the global population today. And so what what's that number look like in 10 years, 20 years? What should that number be? I mean, that's not really an answerable question, but probably much higher. And then if you take a step back, tops down, you've got 5 trillion of global IT spend, and about a third of that is labor today. So, hey, OpenAI is putting up.

• 1:05:23Speaker 03

  Historic growth numbers, Anthropic's putting up historic growth numbers, right? All of that's well, kind of directionally known. We see all these companies growing really, really healthy. And doing it in a, in a way that we think is pretty sustainable.

• 1:05:39John Coogan?

  Yeah. Did you have a reaction to Satya Nadella on Dwar Kesh ex Dylan Patel? There, there's this interview and he kind of talks about, it feels like he was kind of sending the signal. I'm going to steamroll you if you try and build an Excel agent. I'm, I'm defending the castle that is Excel, but also have a platform for a bunch of other things.

• 1:06:02Jordi Hays?

  Excel is Excel Copilot.

• 1:06:03John Coogan?

  Yeah, exactly. And I think that, I, I think that I, I would bet on him being able to defend the castle that is Excel. But I've, but I was going back and forth with, with Jordy about. It feels a lot harder for Microsoft to put up a fight in AI for lawyers. Because they just don't have a practice there. And yes, lawyers use Word documents, but it is a, it, it, it, it just feels like a slightly different. Go to market, slightly different product. And so I'm wondering on how you think about the edges of like. Where the, where the hyperscalers or the Neo hyperscalers, the foundation labs might steamroll versus not.

• 1:06:44John Coogan?

  Because Cursor is an interesting example of a company that feels like almost steamrollable and yet hasn't been.

• 1:06:50Speaker 03

  Right. Hasn't been, right? Again, if you look back at the past. If I told you, hey, Claude Code is going to be this amazing product that's this good and you can use it. You'd think, oh my God, right? Cursor is good. Like I'm short in Cursor at the beginning of the year. That's what a lot of people. So again, I just think it's, it's, you know, we get to sit in a unique spot where we see all these things happening. And go, wow, we're just so early in terms of the pie growing, the tide rising with all boats. I think I messed up that somehow, but.

• 1:07:20Speaker 03

  To get back to your question around the, the hyperscalers and who wins where. It's, it's, it's hard to say exactly. I think that's kind of the big question right now. If you look back at like the beginning of the year, I think there was an open question around. Are these API businesses going to work? Is there long-term margin in the API business, right? Is something like Cursor just going to get run over? Is something even like Anthropic in the API layer going to get run over and squeezed? I think now people are kind of going, well, you know, these businesses look really good. They've scaled really nicely despite all these things, to your point, happening at once. Maybe now the question is, what's the the architecture of that market look like with the hyperscalers over the next 10 years? It's hard to know.

• 1:08:05Speaker 03

  What I would say is if you take a step back and you look at the cloud AI revenues for the three hyperscalers, I mean, they've been inordinate beneficiaries of this trend, right? Open, Anthropic, Cursor, like Harvey, all these companies are great. The hyperscalers have done really, really well. And the move to cloud and the move from on-prem to cloud that's being pulled forward by all this is really, really compelling for them. So like, they don't need to worry about winning, in our view, right? Like lawyers in beating Harvey. Like, that's almost, that's just further down the economic ladder in my mind for them. But, you know, we'll see. And then the other point, oh, you asked about Excel. Yeah, Excel's fascinating, right?

• 1:08:50Speaker 03

  The ultimate, like, dominant software product over many decades. We've been looking for kind of the cursor for Excel for a while. We've tested a few products. We've got an internal team here that builds a bunch of things that we also

• 1:09:04Jordi Hays?

  You guys have built your fair share of models over the years, I would hope.

• 1:09:07Speaker 03

  Yeah, we do a lot with data science and now increasingly with AI. We haven't quite found something that works yet, but there are a few folks building some interesting companies that we're not invested in them yet, so I'm not going to say what they are. But it's an interesting opportunity. Could, I think that more likely than not, Microsoft still ends up owning a lot of that.

• 1:09:28John Coogan?

  I mean, the closed source thing is very important. Like, there is no VS code in that category. People talk about this with Cursor for biotech, like, what's the lab notebook? And I was pushing on like, I was trying to go, I was trying to go deep with an investor who Kind of came at me with a thesis of of cursor for bio and I was saying, okay, well, if if you're going to invest in the cursor of bio, what's the VS code of bio? What's the open source? What's the open source standard that you can fork that every bio lab uses? And they're like, oh, well, actually, like the labs use closed source stuff and those enterprises do not just want to give up the data. So you're going to be fighting for the walled garden and all this other stuff.

• 1:10:09John Coogan?

  So it it it does feel like the like the cursor for X model. I mean, it was really hot at Y C, what? Two batches ago, everyone was doing cursor for X. And it feels like it was wishful thinking in some markets.

• 1:10:23Speaker 03

  Yeah, I think that's exactly right. And what's interesting is for biotech in in particular, right? And we've heard Sam make more public comments recently, right? About their effort with the sciences and how much time they're spending there.

• 1:10:35John Coogan?

  Yeah.

• 1:10:37Speaker 03

  I just think that's where the value ends up accruing is something like an open. Anthropic probably throws their hat in the ring at some point. There's isomorphic labs coming out of Google. There's the Chai discovery business, which is a compelling company. There's a number of folks who are kind of building these pseudo lab companies that work with with biotech. I think that's probably what ends up be more interesting because to your point, there's not a there's not like a VS code for biotech today. And there are just very few markets where there even is a VS code analog, right? Part of the magic of cursor is they identified an incredible market where the models worked really well early, which was coding, right? This has been the frontier of model capability for a while.

• 1:11:21Speaker 03

  You had the ubiquity of VS code and of the terminal and all these things. And then you just built a really nice product around it and have continued to just push the frontier of what's possible. And now you layer in their own model with composer. So we're excited about it, but it's hard to find markets with the same anatomy and structure and kind of opportunity to your point. People are kind of squinting and like kind of forcing ideas a little bit.

• 1:11:47John Coogan?

  Totally, totally, totally. Yeah. Drew?

• 1:11:50Jordi Hays?

  I'm sure I'm sure you guys just try to back visionary founders that don't come to you for help unless they unless they really need it hopefully. But how do you think private companies? How much attention should private companies in AI? Be paying to the public markets right now because we're seeing so much growth, revenue growth in the private markets. And at the same time, you know, we were just, you know, core weaves down 45% in the past month. There's a lot of jitters in the market right now and it's hard not to pay attention to some of these signals, even if, even if a company's own revenue growth is skyrocketing. So I'm curious how, how you think the best companies

• 1:12:35Jordi Hays?

  are going to kind of manage through the next 12 months.

• 1:12:38Speaker 03

  Yeah, I mean, look, the fortunate thing for the best companies is almost all of them have a war chest in terms of capital on the balance sheet today. And I think the capital demands of these businesses is a bit exaggerated relative to what, what, what it is would be maybe my personal view relative to like what's on X or what's in the media around these AI companies.

• 1:12:59Jordi Hays?

  Yeah.

• 1:13:01Speaker 03

  In terms of like paying attention to the public markets, right? I think it's, I saw, like Subu tweeted, I think a few days ago, something around, right? Like the, the market's been above its 50 day moving average for like over 100 straight days, like something like 130 straight days or something like this. So you know that the market's been good for a while. When you see a stat like that, I think founders are aware of that and are pretty aware that it's a good time to raise capital and fortify a war chest, right? Which we've had a really busy Q2 and Q3 and now early Q4. I think that's kind of the way to think about public markets is, hey, when's a good time to raise capital when my, when my cost of equity is lower?

• 1:13:42Jordi Hays?

  Yeah.

• 1:13:43Speaker 03

  But outside of that, like, I just think tunnel vision is everything. And again, just to, to bring it back to Kersha, like this is a very focused company, very heads down company, doesn't make a lot of appearances, right? Like just stays in their lane and focuses. And I think that that's kind of the ultimate value, right? You don't want to be spread too thin. And look, there's a lot of folks like myself running around San Francisco now looking to give founders money and tell them when the, when the value of their equity is, is pretty good, right? So we, we help give them that signal.

• 1:14:15John Coogan?

  Yeah, there's also this interesting, it's hard to measure corrections in the venture ecosystem because they're much less quantitative than just looking at, oh, okay, you could, you know, map the

• 1:14:29Jordi Hays?

  Yeah, correction often looks like, wow, that company hasn't raised in three years.

• 1:14:33John Coogan?

  Yeah, yeah, that, or, you know, there's some hiccup in LP fundraising or something, but there's many corrections in the public markets that I can think of that were like hiccups in the private markets, but for the most part, it was everyone just kind of being like, oh, there's some crazy stuff going on. Okay, like, let's cancel a couple of meetings and, okay, we're back on two months later. Like, the COVID-19, like, sell-off was like a massive correction in the public markets. And for most startups, it was like, yeah, you needed to understand what, could your company continue, or were you in like hospitality or something that was going to be heavily affected? But for a lot of companies, it was just like, oh, your March raise turned into a June raise over Zoom, and it was fine.

• 1:15:20Speaker 03

  Yeah, I mean, I think that's spot on, right? Like, there is a level where, right, because we do have a public hedge fund. And so what's interesting is when you have conversations like the one you guys were having prior to this, right? You know, as a hedge fund, you're always behaving in the market, right? There's always a choice to be making, right? It's very unusual to be in 100% cash or something like this, right? As a private fund, as a growth fund, we can just choose to not invest for a while, right? We can just wait a bit. And for us, like, the convenient thing is, you know, we only make, I think this year, we've maybe added about half a dozen new logos to the portfolio. So for us, we're only making three to five core big investments a year on the growth side

• 1:16:04Speaker 03

  right now is kind of our cadence. So it helps us kind of work through whatever that cycle is and just focus on the asset, focus on the entrepreneur, focus on what we view is the 10-year trend and story for why this company is going to be so durable and so powerful over time.

• 1:16:20Speaker 03

  But yeah, like you don't see it, right? I think the other thing that's maybe like less discussed is we've had a bunch of companies and I've seen companies outside our portfolio too that were kind of your 2017 era SaaS businesses. That have really seen a nice bounce back and a nice acceleration over the past few years with AI. Really like reinvention is the wrong term. It's just kind of like some product extension.

• 1:16:42John Coogan?

  Yep.

• 1:16:42Jordi Hays?

  Yeah, the CEOs and the management teams and the the teams are just re-energized and excited because there's this new capability that you can integrate across your entire platform.

• 1:16:53Speaker 03

  Totally. And if you if you were some if you were some, you know, flavor of a source of record, your ability to now use that data.

• 1:17:01John Coogan?

  Totally.

• 1:17:01Speaker 03

  And create economic value around it is just inordinately better. So, um, yeah, I mean, look, the the market's been up for a while. It's definitely interesting.

• 1:17:10John Coogan?

  Yeah.

• 1:17:11Speaker 03

  Uh, but for us on the private side, it's a little bit easier because we just get to focus on the companies.

• 1:17:15John Coogan?

  Yeah. How do you think people are? Do you think people are reading too much into Sarah Fryer's like private phone calls these days or, uh, I mean, it it feels like, uh, you know, opening eyes like a billion users. Uh, deceleration might be sort of like expected, like, you know, people don't excel. They don't expect meta to accelerate on on DAUs. Um, do you have any thoughts on like what's going on there?

• 1:17:39Speaker 03

  I've got a big term because I I knew this would come up. And so I thought of this before. This was my one big term here.

• 1:17:44John Coogan?

  Okay.

• 1:17:45Speaker 03

  Anxiety displacement, guys. We've got anxiety displacement. That's what's going on. You know, like, people talk about anger displacement, right? All these things.

• 1:17:53John Coogan?

  Yeah.

• 1:17:54Speaker 03

  But market's been up for a while. Like, that's a that's a that's like a fact.

• 1:17:58John Coogan?

  Yep.

• 1:17:58Speaker 03

  Um, oh, ChatGPT is less than three years old.

• 1:18:01John Coogan?

  Sure.

• 1:18:02Speaker 03

  Is a product, right?

• 1:18:03John Coogan?

  Yeah.

• 1:18:03Speaker 03

  It's grown really quickly, right? It's it's they've disclosed their almost 10% of the world is using the product weekly.

• 1:18:08John Coogan?

  Yeah.

• 1:18:09Speaker 03

  Right? Like, that's pretty remarkable, right? But the market's been up a while. We had like, I still think as a society, people haven't really processed the whole lockdown thing. We had the government shut down for, you know, a month and a half. Like, there's all this stuff going on and there's all this anxiety. And I do, I think like, that's been very displaced because people, you know, like. OpenAI is a great company. It's a remarkable business. Um, there's just, it's hard to think of an analog for what they've achieved in less than three years is a, is a product. And uh, I think Sarah and Sam and the entire team do an incredible job. So people are definitely reading too much into uh, anything and everything. Sometimes I think there's a little bit of a malicious spin on some of the

• 1:18:52Speaker 03

  stuff they've put out also, just to be very candid about that. But uh, yeah, I mean, it's understandable for there to be a lot of anxiety in society and the market. And it's understandable that it gets displaced onto the company a little bit, but I don't think that's fair.

• 1:19:06John Coogan?

  Yeah, it was a little weird. I mean, we were reacting to this idea that there's a private call with investors, like what type of investor is then leaking like potentially bad news to the press? Uh, it seemed like an odd chain of events. Um, but there's certainly unlimited demand for uh, bearish takes about ChatGPT right now because uh, they've, they've been on such a tear.

• 1:19:29Jordi Hays?

  Every day people log on to ChatGPT and ask for, what's the most bearish thing about ChatGPT?

• 1:19:35John Coogan?

  Yeah, yeah, yeah.

• 1:19:36Speaker 03

  Right, right. That's like, that's the, that's the tweet prompt. Like that's your X maximizing like prompt right there. It's probably something like that, right? What, what chart can I put together? Or what can I do? But look, I, like, we'll see, right? Um, worked with the company for a long time. Think it's an amazing company and been really impressed by what they've done. Um, I continue to use the product every day, a ton. I think 5.1, the new model is really a nice upgrade too. I enjoy it. So, you know, um, yeah, I think it's, I think they do a great job. And I think people definitely over, over rotate on it, but I get it.

• 1:20:12Jordi Hays?

  We're excited for 5.67, which would be only a few upgrade cycles away.

• 1:20:18John Coogan?

  Rolling my eyes at that one. Can't do it. Can't do the stupid six, seven memes.

• 1:20:23Jordi Hays?

  It's over. Killed it just now.

• 1:20:25John Coogan?

  They're over them. I like that. I, I like the new coinage though. Uh, the anxiety displacement. It's good.

• 1:20:31Jordi Hays?

  Let's talk about other growth funds because that's just a fun, uh, fun topic for, for every, uh, every investors to talk about everyone else. Do you think anybody has, um? Have you seen any other, any other funds, uh, kind of, uh, blink yet or, or hesitate or, or kind of slow down at all? Get a little bit worried or, cause, cause it's just like, we're seeing every, every day we get like half a billion dollars of funding announced on, on the show. But that has, that's a lag, you know, it, it has like, uh, the, these rounds like really got done, uh, in, in late summer, early fall. And they're just kind of getting, getting out there now.

• 1:21:12Speaker 03

  Yeah, I mean, I'm sure there are some funds that have slowed down. I'm sure there are funds that are deploying more than us and less than us and those things, right? Um, I'd say generally the, the, I think the vibe when you're catching up with someone over coffee or lunch is a lot more positive than, than over Twitter, right? And there's a lot more of like, uh, well, how exposed am I to the AI trend, right? Like there are a few growth funds that feel like, you know, have disclosed, right? Hey, I'm a little behind this and I'm trying to catch up here and there. So if anything like I've felt more anxiety about that than, oh my gosh, you know, we just put more money and pick your big premier company and, you know, I haven't slept well about it. So that's not necessarily a, a great signal either, right?

• 1:21:53Speaker 03

  That's kind of like an, an average signal, but, um, I'm sure there are some folks slowing down. Not sure who they are per se, cause we have a lot of funds that are definitely deploying a lot more than us in terms of absolute dollars and just absolute number of deals. So, um, for us, we just, again, we really just try to focus on our, our core, uh, you know, mission, which is, hey, what are going to be companies that matter is public enterprises? You know, 10, 15, 20 years from now, and in some cases a little bit sooner, right? Um, and

• 1:22:28John Coogan?

  Yeah. What do you think about the capital intensive pre-revenue AI companies? We had, uh, uh, Fei-Fei Li from, uh, World Labs on. I don't know if they're fully pre-revenue, but it feels like, uh, a lot of the world model projects, the generative 3D worlds, Gaussian splats, what Google DeepMind is working on with Gemma, or is it Genie? Genie is the model. It feels like something that I just think will be like the next Roblox vaguely, but there's nothing that you could do to underwrite this against revenue growth. And so, and yet, and yet, a lot of these projects are like, to do the next thing, we need $200 million. How would you, as a growth investor, even square that?

• 1:23:10John Coogan?

  Or would you just say, hey, let's just come back when we can actually see some adoption data?

• 1:23:15Speaker 03

  Yeah, normally, we would fall into the second bucket, like generally, in terms of how we operate. It's different for everyone. I think all those rounds are ultimately just a representation of the idea size.

• 1:23:28John Coogan?

  Totally.

• 1:23:28Speaker 03

  Right, of the opportunity.

• 1:23:30John Coogan?

  Yep.

• 1:23:30Speaker 03

  And then, and then, of course, also of the entrepreneur and the team.

• 1:23:33John Coogan?

  Yeah.

• 1:23:33Speaker 03

  We did make, you know, one investment very early that maybe fits this mandate, which would be Skilled in the robotics space, which has been a great company. It's executed incredibly well.

• 1:23:44Jordi Hays?

  I think Luke Metros is over there now.

• 1:23:46John Coogan?

  Oh, yeah, that's right.

• 1:23:48John Coogan?

  Yeah, yeah, we just know someone who's on the team, but not, not one of the founders.

• 1:23:52Jordi Hays?

  That left and, left and roll to, to join. It's skilled, right? S K I L D.

• 1:23:57Speaker 03

  S K I L D, yep.

• 1:23:58Jordi Hays?

  Yep.

• 1:23:59Speaker 03

  So that was, that was one where we leaned forward a little bit earlier than we would with, with most things. But, and again, that was on the back of just being very bullish on robotics, on a 10, 15-year time scale and that team and where they sat in the stack. But generally, we tend to wait a little bit to see a company be a bit more flushed out. But it's always case specific.

• 1:24:20John Coogan?

  That's amazing. Well, thank you so much for coming on the show. Thanks for hanging out. Well, we will talk to you soon. Hope you have a great rest of the day. And congratulations on the cursor round.

• 1:24:29Jordi Hays?

  Great to see you, Spencer.

• 1:24:30John Coogan?

  Have a good one.

• 1:24:30Jordi Hays?

  Cheers.

• 1:24:31John Coogan?

  Goodbye.

• 1:24:33John Coogan?

  Up next, we have Tyler and Cameron Winklevoss. But first, let me tell you about TurboPuffer. Search every byte, serverless vector and full text search. Built from first principles and object storage, fast, tenex, cheaper and extremely scalable. The Winklevoss Twins are in the restream waiting room, I believe.

• 1:24:49Jordi Hays?

  Let's bring-

• 1:24:50John Coogan?

  If not, we have a slight delay. Let's follow up on that.

• 1:24:54Jordi Hays?

  Go back to the timeline.

• 1:24:55John Coogan?

  Back to the timeline. Dario Amade predicts that we will get to 90% on Sweet Bench verified in a year. That was one year ago. It's been one year. The best performing model, Sonnet 4.5 with parallel compute, gets 82% on Sweet Bench verified. Close to 90%, but not quite there. They put him in the truth zone. R.I.P. to Dario. What do you think, Tyler? Bearish?

• 1:25:18Jordi Hays?

  I mean, I think he was pretty close. He's, it was 90-

• 1:25:20John Coogan?

  Oh, it's pretty close. Good enough these days?

• 1:25:23Jordi Hays?

  That's, that was way more of a bullish take than most people.

• 1:25:25John Coogan?

  Yeah, it is, it is very impressive. Totally. Do you think it's saturated? People are saying that-

• 1:25:32Jordi Hays?

  Yeah, I think a lot of those kinds of benchmarks are generally saturated in that.

• 1:25:35John Coogan?

  Yeah, yeah, yeah. Yeah, I mean, it is interesting that like simultaneously you hit the 90% on Sweet Bench, did very well there, but on the flip side, you have Andre Karpathy saying like, it's slop and like, you can't actually use it for like the frontier software development that he wants to do. Anyway, I believe we have the Winklevoss Twins in the restream waiting room. Let's bring them into the TDP and Ultra Dom Tyler and Cameron Winklevoss. Welcome to the show. How you guys doing?

• 1:25:59Jordi Hays?

  What's going on, guys?

• 1:26:00Speaker 04

  Hey, hey.

• 1:26:01John Coogan?

  Very nice background. Give us the update. Give us the news. I know we're running late, so let's just jump right into it. I assume everyone knows who you are.

• 1:26:10Speaker 04

  Cool. So we launched Cypherpunk, a Zcash DAT yesterday. It trades under Cyph, C-Y-P-H. We're really excited about it. The, the mission of the company is privacy and self-sovereignty, starting by accumulating Zcash. And then in due time, we hope to invest in other technologies that promote privacy and self-sovereignty.

• 1:26:42John Coogan?

  This delay is extremely-

• 1:26:43Jordi Hays?

  Having some Wi-Fi issues.

• 1:26:45John Coogan?

  Sorry.

• 1:26:45Jordi Hays?

  Get, say more about the structure. This is Leap Therapeutics. You guys have, have rebranded it. This was an existing public company, but what more can you say on, on how this came together?

• 1:27:00Speaker 04

  Yeah, so it's an existing biotech company and we basically took it over and invested via pipe into it and then rebranded and changed the ticker today.

• 1:27:10Jordi Hays?

  Awesome. So I guess Zcash has had a lot of momentum recently. At the same time, a lot of the Dats have, you know, struggled in more recently. What like talk through kind of like the next, how are you thinking about, you know, making sure, just kind of navigating this time when the markets are pretty choppy overall?

• 1:27:39Speaker 04

  Sure. So I think number one, the long-term thesis we really believe in. And I think that when you look at Bitcoin as a store of value or how you store your value, Zcash is really how you move your value. This is very sound and we're obviously very bullish on that. But in addition, we're the largest investor into the DAT. So we don't have like a lot of fast capital that's looking for a trade. We're just long-term hodlers or in the case of Zcash, zoddlers. And we just, you know, we plan to hold for a very long time. And I think that's one of the differences is that other Dats have, you know, had faster

• 1:28:21Speaker 04

  money and people that are moving in and out of it. And that's why we didn't fill the pipe up. We took, you know, the vast majority of it, I think I put a $52 million check in. So the vast majority of equity will not be trading out of this, out of this, out of the shares.

• 1:28:38John Coogan?

  That makes sense. Well, thank you for the update. Sorry about the wifi connection. We have some technical problems. Would love to have you back on the show and talk more about what's going on in your world because there's so many interesting projects that you're working on. But really appreciate you taking the time to give us a quick update on Cypherpunk Technologies and congratulations on the, on the pipe closing, the rebranding, every, all the progress. So have a great rest of your day.

• 1:29:04Jordi Hays?

  Yeah, thanks for joining, guys.

• 1:29:05Speaker 04

  Thanks, guys.

• 1:29:06Jordi Hays?

  Cheers.

• 1:29:07John Coogan?

  Let me tell you about Google AI Studio. Create an AI-powered app faster than ever. Gemini understands the capabilities you need to, you need and automatically wires them up, the right models and APIs for you. Get started at ai.studio/.

• 1:29:19Jordi Hays?

  Who is building AI agents to make the wifi work?

• 1:29:23John Coogan?

  That would be cool. It would be cool if we could deploy an AI agent. I mean, I guess that's like the next generation of the Restream Waiting Room. Like the Restream Waiting Room, somebody talks to them in a different waiting room and checks the Wi-Fi. That will be something. Maybe it's a 2026 project. Maybe it's a 2046 project. Who knows? That could be the final box. Hopefully, our next guest is dialed into the Restream Waiting Room. We have Max Hodak from Science. How are you doing? What's going on? Welcome to the show.

• 1:29:54Speaker 05

  Hi, guys. Excited to be here.

• 1:29:56John Coogan?

  Good to meet you. Great to have you. I believe we met like years ago at an Oppenheimer screening, potentially. I don't know.

• 1:30:03Speaker 05

  Very possible. That sounds like it probably happened, yeah.

• 1:30:05John Coogan?

  Anyway, for those who don't know you, please kick us off with a little bit of an introduction on yourself and maybe the company as well.

• 1:30:14Speaker 05

  Sure. So I mean, I've spent most of my life thinking about how to engineer the brain. I mean, my origin story, I think, in this field started when I was in the fifth grade and I saw The Matrix. And I was like, I have no idea if we're living in a simulation, but we are definitely going to build one. I'd kind of broadly characterize my ambition as to eventually disappear into the simulation, never to be found. And I, as an undergrad, talked my way into a lab that was doing neural recording in primates. And really, that was where most of my education happened. And then in 2016, I got pulled into co-founding what became Neuralink. And I was there for four and a half years. And in the spring of 2021, started this company, Science. We're now about 180 people. Our main product is a retinal

• 1:30:56Speaker 05

  prosthesis. Like, really, the first retinal prosthesis that really works for store vision. It was actually on the cover of Time last week, which is a pretty crazy experience.

• 1:31:06John Coogan?

  So you like The Matrix? Do you like The 13th Floor? Have you seen that movie?

• 1:31:10Speaker 05

  I have not seen The 13th Floor.

• 1:31:12John Coogan?

  Oh, The 13th Floor. It's like one of those movies that got terrible reviews, but it goes a little, I feel like it goes a little bit farther than The Matrix in terms of simulation theory and simulation hypothesis. It's a lot of fun. But anyway, we can get back to the actual story. So how far are you in building this business? Give us a, give us a general update on like, the shape of the business. It seems like you're in the office right now. How big is the company? What's the progress overall?

• 1:31:38Speaker 05

  Yeah, so we're the so we we've a couple of different elements of our pipeline. So the the retinal prosthesis, we think like that is first like just an end in itself. Like if you can restore vision to the blind, it is like it is a quest that humans have been on for thousands of years. That is an unsolved problem. And I think like we've made there's like real progress on that. There's we got two programs. One is a retinal chip called Prima, which is this little it's a little chip implanted in the back of the eye under the retina that has all these light sensitive cells working in conjunction with a laser with a laser projection glasses worn by the patient. That finished a major clinical trial last summer that was published just recently in the New England Journal of Medicine. These patients go from being unable to recognize faces. They can they can walk around because they've got a little bit of residual peripheral vision.

• 1:32:21Speaker 05

  The trial was in an age-related macular degeneration, but they definitely can't read. They are really profoundly blind and disabled. And the the best patients in this trial could read could go from reading none of an eye chart to reading the entire eye chart. I mean, there's videos of these patients like filling in crossword puzzles. It's really very cool. And then separately from that, we also have like the another key program in the company is a different approach to building brain-computer interfaces where instead of placing wires like not like not in the retina, but like in in cortex, instead of placing wires or cables physically into the brain or genetically modifying the brain so that like there's some things you can do with like with optogenetics or sonogenetics.

• 1:33:03Speaker 05

  Instead, what we do is we have we grow up these heavily engineered biological cells that we hide from the immune system. And then we just sit this on the surface of the brain. And and so we don't place anything into the brain itself, but what these cells do is they grow in and they wire up and they form new biological connections and they can form billions of them. And so I think like the way to understand this or like I think actually fairly direct reference for how to think.

• 1:33:26Jordi Hays?

  John's face right now.

• 1:33:27Speaker 05

  So we call it a we call it a biohybrid neural interface. Have you seen a James Cameron's Avatar movies? Yes, yes, yes. You know, the ponytails of the aliens. Of course, of course, I know exactly where you're going with this. To plug into like their tree memory store or like their horses. So I think the question is like, if you wanted to build a ultra-high bandwidth neural interface, like how would nature do this? I think what nature would do is it would grow a a new cranial nerve that has like a USB port at the end. Yeah. And that, I mean, that is super cool research, but that is definitely a research project. And so the way the company's architect it is that is going to be paid for by the retinal prosthesis.

• 1:34:02John Coogan?

  Sure.

• 1:34:03Speaker 05

  Which is a very practical near term medical device. We hope to have, we've submitted for marketing approval in Europe for that. We're going through the review process now. The FDA actually is being much slower. It is possible it won't reach American patients for a little bit longer. And that's kind of crazy that Europe is going to get it first, but that's where we are.

• 1:34:20John Coogan?

  No, that's rare, kind of narrative violation, but excited.

• 1:34:23Speaker 05

  Narrative violation for sure. But so, yeah, hopefully that'll be on market next summer, making money. And that is big enough to pay for the rest.

• 1:34:31John Coogan?

  That makes sense. So why go with a, a retinal prosthesis instead of cutting a hole in the skull and putting electrodes directly on the brain and trying to deliver the signal that way? There's a lot of BCI firms, obviously you co-founded one, that, that are, seem to be approaching the problem that way. Is that just, like, do you, do you have a particular view on that? Is that just farther out and you're, and this is a way to get to market faster? Or is there something fundamentally like higher bandwidth about your approach? Like, what are the different technical trade offs?

• 1:35:12Speaker 05

  So BCI is not a product. BCI is a field.

• 1:35:15John Coogan?

  Okay.

• 1:35:15Speaker 05

  And there are many different types of BCI's for many different types of applications. Like, obviously you can't go into the retina to decode like a video game controller out of the brain.

• 1:35:24John Coogan?

  Yeah, yeah.

• 1:35:25Speaker 05

  Simultaneously, you can't stimulate like frontal cortex to do, like to do some, like sensory feedback. And so it really depends on the type of thing that you're trying to do. And when, and so in vision, which we, I mean, we think that a visual prosthesis is a, is a brain computer interface. We also think that cochlear implants are brain computer interfaces.

• 1:35:45John Coogan?

  Sure, sure, sure.

• 1:35:46Speaker 05

  You don't need to be drilling in through the skull to get to cortex. So if you want to restore vision. You kind of have a choice of you've got the retina, the output of the retina is the optic nerve that goes to a deep brain structure called the thalamus. And then the thalamus connects up to cortex. And so within the retina, so let's just take a look at like the options that you have here. So in the retina, normally light shines in from the front. It hits the rods and cones, the rods and cones are the light sensitive cells. There's about 150 million of those. These connect to about 100 million intermediate cells, the bipolar cells. And those compress down to 1.5 million like optic nerve cells. That connects to about 1.5 million cells in the thalamus. And that connects up to like 200 to 500 million cells in cortex.

• 1:36:30Speaker 05

  And so no one, I mean, people have been trying to stimulate vision into the brain for many decades. And until the clinical trial that we just finished, no one had ever gotten form vision, like structured vision that the brain could intuitively assemble into a whole. Like you could get patterns that if you like looked at it carefully, it's like, oh, there's like a line here, there's a line here, it's like connected, that must be an A. Like here's a line, like that's an N. But in the Prima trial, I mean, they could read off words at a time and that had never really happened before. And a big difference is that we are stimulating that first layer of cells, the bipolar cells in the retina. And we know that if you just go one layer deeper to the, from the 100 million bipolar cells to the 1.5 million optic nerve cells, if you stimulate those optic nerve cells, you don't get this.

• 1:37:13Speaker 05

  You just get these diffuse flashes of light that you can't really attend to and the brain does not intuitively assemble together because the brain has already compressed the signal. And you have to then figure out like, what is that transform? How did the brain compress this? Or how did even just the retina compress this? And the, and so the thalamus has the same issues as trying to simulate the optic nerve, except it's under eight centimeters of brain tissue under the skull. And then once you're up in cortex, you're dealing with hundreds of millions of cells that are distributed over like large areas that you just can't stimulate selectively. And so like people, if you do this, like you absolutely will get flashes of light. But converting that to like form vision that you can intuitively read is a totally different problem. And so, and then even if that worked, like even if that worked perfectly, one is like

• 1:37:58Speaker 05

  an outpatient surgery going through the soft tissue of the retina. The other is like a four or five hour brain surgery drilling through the skull. I think like one of those is you're kind of wind sails.

• 1:38:08John Coogan?

  Yeah, wait, so you said outpatient. Walk me through comparing the level of intensity of the surgery to something like Lasik.

• 1:38:19Speaker 05

  So it's a little more than LASIK.

• 1:38:20John Coogan?

  Yeah.

• 1:38:21Speaker 05

  But it's like not a ton more than LASIK.

• 1:38:23John Coogan?

  What about getting your wisdom teeth out? I was just coughing.

• 1:38:27Speaker 05

  I mean, you could do this. So in the trial, many of them ended up being done under general anesthesia.

• 1:38:32John Coogan?

  Okay.

• 1:38:32Speaker 05

  But to be honest, in these cases, general anesthesia is really like as much like a commitment mechanism for the surgeon and the patient than it is like there's any medical reason to do it. I mean, you just like you can't change your mind halfway through.

• 1:38:42John Coogan?

  Oh, okay.

• 1:38:44Speaker 05

  And so you, but from a like experience perspective, so you could do this with, you can make an injection next to the eye. The eye goes dark and numb for a couple hours.

• 1:38:53John Coogan?

  Yeah.

• 1:38:54Speaker 05

  And the, and then you can go in through the soft tissue of the eye. You leave the chip, there's a little injector, the surgeon presses a lever, it leaves the chip under the eye. They come out, they're done. And so it's a really very simple.

• 1:39:05John Coogan?

  Yeah. And then, and then, sorry, just to be ultra clear, like the chip is in the eye. Then how am I communicating with the chip? Is it wirelessly? Is there, is there a device that's on the other side of my head? Or you said glasses maybe are interfacing with that?

• 1:39:19Speaker 05

  Yeah. So if you look at this chip under a microscope, it has all these little hex cells on it. And every one of these hex cells, like the Science Prima chip, it's essentially a solar panel. And the, it works in conjunction with, there's glasses that are worn by the patient that has a camera looking out at the world, although you could really get the video feed from anywhere. And then there's a laser that projects the image onto the back of the eye in the infrared.

• 1:39:44John Coogan?

  Okay.

• 1:39:45Speaker 05

  And because you can't see infrared, you can't like, if you have residual peripheral vision or any, if you're not totally blind, this doesn't interfere with that, you can still have that. But the infrared laser where it strikes the implant, it works like an overhead projector. Like if wherever there's white that is projected, that is like, that's energy. And wherever there isn't energy, it's dark. And wherever the laser is absorbed by the implant, it stimulates the cells directly above that pixel. And so this is pretty cool. Because the implant is powered by the information that's projected onto it, like, like as a solar panel. This means that there's no implanted battery, there's no cable, like this tiny little fully wireless two millimeter chip is the whole thing. And Also, because the eye moves relative to the projector, like the projector is shining in

• 1:40:30Speaker 05

  from the front of the eye, and then the eye moves and the image changes. This means that the brain can easily fuse it together with their existing vision. And so there's like some pretty cool stuff here. Like if you show one of these patients a solid green bar all the way across the visual field, they'll see a contiguous bar, even though the implant only fills like a small area of the total area of blindness. And they'll say it's like it's green and then it turns white because we can only get black and white right now and then it turns green again. But the brain fuses all of this together. And so even though the implant only has 400 electrodes, as the eye moves around, you don't you don't experience the image that falls on the eye, falls on the retina like a camera. The thing you experience is the brain activity of the world model in the brain.

• 1:41:15Speaker 05

  And so as the eye is moving around, it's updating the world model and that's the thing that you see. And so even though it's like 400 electrodes, you can't think of it like 400 pixels on a screen. You think of it as just getting the information to the world model and the eye is moving around and the brain is cross referencing all that. So it actually does significantly better than you'd think from being 400 electrodes.

• 1:41:32John Coogan?

  That's fascinating. How do you, how do you think about the analogizing around the artificial intelligence community of what you know of the brain? So a lot of people in computer science or AI might say, with LLMs, we've built this piece of the brain. With the hard drive, we built the long-term memory. Has, what, your research, have you mapped any of that on to the current state of artificial intelligence? Has it proven insightful to help, for you to understand what's going on in AI?

• 1:42:10Speaker 05

  This is funny because I mean, at the very beginning of Neuralink and OpenAI, we were in the same building in San Francisco and we'd have these discussions about like, oh, who's going to learn more? Is AI going to learn from neuroscience or is neuroscience going to learn from AI?

• 1:42:21John Coogan?

  Yeah.

• 1:42:22Speaker 05

  And I think it has been revealed that like, like I asked, I kind of went with one of those guys a while ago and I was like, oh, like in retrospect, what do you think AI learned from neuroscience? He thought about it for a second and he's like. The concept of a neuron.

• 1:42:33John Coogan?

  Yeah, that's it.

• 1:42:33Speaker 05

  Like, that's basically it.

• 1:42:35John Coogan?

  It's like the very, it's literally just in the name. Neuroscience is neuron and that's it. And then nothing else. Because, yeah, like the whole brain structure concept, yeah, anyway, continue.

• 1:42:45Speaker 05

  And, but going the other way, I mean, AI has been so useful. I mean, there is a really interesting convergence going on. This is kind of called like neuro AI.

• 1:42:53John Coogan?

  Okay.

• 1:42:53Speaker 05

  Where neuroscience is learning a lot from artificial intelligence in ways that I don't think any of us really would have anticipated.

• 1:42:58John Coogan?

  Okay, explain.

• 1:42:59Speaker 05

  And have you come across the platonic representation hypothesis? So there's an empirical finding that different neural networks trained with different architectures, different objectives and different concrete data sets. But for the same type of thing, like images or language or audio, they produce these, like these similar internal representations. And what I mean by like, like there, sometimes you'll hear people say like, oh, these models are like stochastic parrots or they're just like neck. Like there's glorified auto completes, like these people are safe to ignore. Like the mathematical objects that you see appear inside these models are super interesting and look a lot like the representations that you see in the brain.

• 1:43:39Speaker 05

  And so that is hinting at, like, there's some like deeper fact about the universe that we're figuring out here. That basically if you have a lot of compute power and you kind of run it in these ways, then you see these like, these datas, these like mathematical objects kind of emerge. And what evolution did and figured out in the brain is like, looks a lot like stuff that you kind of see in these transformers and these other AI models. And there's definitely some interesting unification happening there. I mean, it's not, it's still like, it, it's a little more than speaking totally metaphorically, but it is still like, I'd say like instructive rather than literal. But that's getting like every month, there's like some new cool thing that comes out around this.

• 1:44:23Speaker 05

  I will say that, I don't know, and I, my view is that the transformer.

• 1:44:30Speaker 05

  Is like a reasonably good model of like what Cortex is doing, but there's a lot more of the brain. And so there's other parts that aren't fully capped, like that aren't that we're going to need something else, but it's not like the transformer is wrong. I think it's like probably part of the story.

• 1:44:43John Coogan?

  Yeah, that makes a lot of sense. I wonder what you think about just the idea that like it like it takes like millions of years to train a model to like drive a car and it takes, you know, a 16 year old, like a couple of weekends to do it, or, or the amount of energy that I will consume in one day of like reasoning, generating my own reasoning tokens is like way less than what it takes to run a data center. There seems to be some sort of like exchange ratio of that's like we're off by a couple of orders of magnitude. Maybe that's an algorithmic question. I don't really know. Do you have any thoughts on that?

• 1:45:21Speaker 05

  Yeah, I mean, evolution has done. I mean, it is really, it has been very good at minimizing energy and optimizing some other stuff. But I mean, that I think is like the advantage of biological brains. Like every now and then I, I see pitches from companies that they're saying, well, AI is really energy intensive. So what we should do is we should grow up cultures of biological neurons and train them to like to do intelligence tasks. Cause you can kind of do this. Like if you, you can grow up neurons on electrode arrays and you can condition them to learn things by stimulating them in different ways. Like when I was in college, I grew up a counter for game bot. Like there's actually not that hard to do. And, and I, and this is a thing that I think nerds types many people in this

• 1:46:06Speaker 05

  field at some point, but I, I don't think that that's like the way to go. I think that's still there's like just really structural advantages in silicon. Like if you compare and contrast these two approaches, like in the, in the deep learning models, like you can see all the weights, you can introspect them, you can like stop the model, you can change one, you can replay it, like examples about, you can copy to disk, you can like send it over to the network. Whereas with the biological living, like these organoid brains, you Like you can't see the weights, you can't copy it to disk. It's like the, what it learns is the time integrated experience it's always had. And like, at some point, four or five months in, it will randomly get infected and die and you'll have to start over.

• 1:46:44John Coogan?

  Yeah.

• 1:46:44Speaker 05

  And so I think there's just like structural, it's like the thing that the biology does is it's energy efficient. But my response to this is like, generate more power.

• 1:46:51John Coogan?

  Yeah, I like the idea of.

• 1:46:52Speaker 05

  There's no such thing as a low energy wealthy society, generate more power.

• 1:46:55John Coogan?

  That's, yeah, I like the idea of like, the solution to AI is just like, have kids or something. And you're like, you, you reversed it all the way down. So like, if I want artificial intelligence, I can do it biologically and just have kids.

• 1:47:06Jordi Hays?

  Are you and the team getting much leverage out of models today? Is it accelerating your progress? Or is it really just about having like deep domain expertise and being more obsessed with the problem than anyone else and hiring the smartest people in the world?

• 1:47:24Speaker 05

  The, interestingly, I think companies like this are really limited by infrastructure. And so like, one of the things that I got from my prior bosses, I totally received the gospel of vertical integration. And the, and we're really not, it's not like we're held back by like genius scientific insights for the most part, we're limited by like, oh, like, well, we need to get a new, like a new material in our like, like micro fab deposition tool, but this requires hooking up some gas plumbing, which requires getting some specialist vendor to come out and like weld it to the machine. Or you're out of animal housing and like building that is like an architectural design process and permitting and then construction. Like you're really limited by infrastructure more than your genius scientific insights.

• 1:48:05Speaker 05

  And so even if you had this, like, I think, when I think about like being in the takeoff era and what is going to the impact of these, of progress in AI, like, we're still limited by how that can impact the real world in really meaningful ways for these atoms things. But I'd say there's two places that AI has had a bigger impact. The first is ironically like, Comprehending regulatory standards and generating regulatory documentation.

• 1:48:26John Coogan?

  I was about to say, if permitting is the bottleneck, can you have like a permitting agent that just goes and spams the permits until you get exactly what you need?

• 1:48:36Speaker 05

  Yeah, I mean, they're not quite like they, you end up doing a lot of editing, but yeah, well, you definitely just don't want to spam the permits. This makes the regulators mad, but the, but I mean, the, the filing in Europe for, to ask for approval for our retinal prosthesis, which we submitted last summer.

• 1:48:49John Coogan?

  Yeah.

• 1:48:49Speaker 05

  It was, I forget exactly how many, it was like tens of thousands of pages. It was a 65 gigabyte PDF.

• 1:48:55John Coogan?

  Yeah.

• 1:48:55Speaker 05

  And that depends on like hundreds and hundreds of standards that we're just expected to know all the details of.

• 1:49:01John Coogan?

  Yeah.

• 1:49:01Speaker 05

  And so being able to talk to these things is super useful, like chat with this, these data sets is super useful rather than like having, yeah, like having a big team of regulatory experts who all kind of, it's a use this through meetings. And then the other place that we've had big success with, with AI internally is on our protein engineering program. So there's, conventionally, many of the problems that we're interested in, you'd have to solve with like better electronics or better, like better physical devices somehow. And we're now at a point where often when we find a problem, we ask like, can we make a protein to solve this?

• 1:49:36Speaker 05

  So a couple of months ago, we published a paper on a new type of optogenetic protein, which is these are, these are proteins that can make a neuron light sensitive that is not normally light sensitive. So we could control it optically with light. And these typically are, require very bright laser light in order to work. And we were able to use AI models to find one that is so sensitive that it is responsive to like, not just daylight, but like indoor office lighting. And so that allows us to substantially reduce the power consumption so that we can, because often the brain implants were often limited by thermals. Like how much energy you can consume depends on how much is limited by how much you can heat the brain.

• 1:50:14Speaker 05

  So if you have more sensitive options, then you can have your LEDs be dimmer and have more of them than you can think about going from like thousands to hundreds of thousands. But then also that might turn actually into our next generation retinal product. We might, that will have to go through clinical trials. That'll be a, a process, but it's possible that in five or seven years, you won't even need the chip at all. You'll just get an injection and then we can just make the bipolar cells themselves light sensitive. And then that won't even need the glasses potentially. And that, that really comes out of, the, the big breakthrough on, on being able to solve these problems with proteins is an AI enabled thing.

• 1:50:51Jordi Hays?

  Chat says, uh, we should have you ask how to, how to explain this to preschool.

• 1:50:59Jordi Hays?

  I, some labs, various groups have talked about the revenue opportunity and just automating science. And it's usually very general where they're just like, we're going to come up with a bunch of ideas and then hypothetically, they give the ideas to various people to execute on and they get some type of like royalty on it. How much, how much opportunity do you think there are for, for a more general foundation model company to just come up with a bunch of ideas and then actually capture real value from it? It feels like in some ways, the pharmaceutical industry maybe doesn't have a shortage of ideas. They have a shortage of infrastructure and funding in order to test enough ideas to actually get viable, uh, you know, solutions.

• 1:51:45Speaker 05

  Yeah, I think that a real bottleneck here is just the translation to human subjects research and then to the market is really difficult. Um, we have like the, uh, like a thing I sometimes joke about is like, we're in a golden age of mouse oncology. Like if you're a mouse with a cancer, like we've got some great things for you.

• 1:52:05Jordi Hays?

  Give it up for all the mice out there.

• 1:52:07John Coogan?

  That's great to hear for the mice. That's fantastic.

• 1:52:09Jordi Hays?

  Best time in the street.

• 1:52:10Speaker 05

  We owe it to them for all that they've done for science, right? But like, that's the trade off. And so if you can, um, and the, and I get it. It's, it's not, you can't just say like, oh, well, the FDA is the, is the problem. Like the problem, like the problem is that human subjects research is like life or death. It's like, it's a, it's like no joke. And like, I've had the experience of like a patient goes into a surgery, a new surgery for the first time, or they, or you're going to inject them with something and you're going to wait. And like, that is a very stressful experience. Like you want them like, and that's like, that's stressful experience for people like me. I'm not even the one getting it. Right? And so the. There's trade offs there that I think are very deep in like our like the way that we in our civilization like value human life, which I like, I think is right.

• 1:52:56Speaker 05

  And that there and see of this knob of like, how much risk do you think of taking in human subjects research and how fast do you get new things? And we know that the toolbox of science is very, very powerful because when you look at what's possible in the animal models, you have these amazing things that are possible. But then getting that into humans is like, and that it's not just to say like, oh, we um, like, like, oh, we should just deregulate all of this. Like there's, it's more complicated than that. Although I do think that there's a little bit of that. But at the same time, I mean, certainly this, there's an intelligence effect like I think that there's, it's going to be inevitable that these things. I mean, the fact that you can fold all the proteins, at least in static forms is a big deal.

• 1:53:39Speaker 05

  Like, I would not, I would absolutely not bet against improvements in AI, leading to improvements in, in medicine and healthcare. And I think there actually, just to go one step further, I think then the thing that we're going to have to reckon with is healthcare. It's like if, if you thought like, like 20 years ago, TVs and phones and computers were way, way, way more expensive. And now they're much cheaper, but we spend more on them total is this is like a technological growth industry. Like normally if Nvidia sells 20% more GPUs next year and their revenue goes up and their earnings go up and the stock price goes up. And like, everybody's stoked about this, but as time goes on and there's more things to spend money on in healthcare that produce better outcomes for longer lives.

• 1:54:22Speaker 05

  There's like spending should increase, but because we pay for this, it was these like kind of insurance schemes, which are kind of pseudo fixed buckets of money. Like if, if there were real breakthroughs in healthcare, that a lot of people will live much longer and have much better outcomes, but they cost money. And you could spend like 10 times as much on healthcare, like that would be a catastrophe. Like you do not want to spend like right now, our system would not handle spending 10 times as much on healthcare. But that is kind of directly at odds with it being a technological growth industry.

• 1:54:48John Coogan?

  What about the BCI industry? I think it's interesting.

• 1:54:50Jordi Hays?

  Yeah.

• 1:54:50John Coogan?

  We've seen like this boom in quantum computing and and there's public companies do all this stuff, but it feels like.

• 1:54:57Jordi Hays?

  Well, so specifically, I feel like the interesting question with BCI is like, I want to understand your timeline.

• 1:55:03John Coogan?

  Yeah, people are pouring capital.

• 1:55:04Jordi Hays?

  It feels like there's these therapeutic use cases where if somebody's blind and they they they're willing to take some level of risk in order to see or at least see something. And then there's like the utility timeline and entertainment timeline where I just have, you know, instead of wearing glasses, I just have a screen that's just embedded in my retina and I don't need to wear glasses and it's always on and I can, you know, turn it off. And I feel like that's where like, it feels like that's where you're going is sort of a general purpose technology on a long enough time horizon, but maybe I'm off.

• 1:55:43Speaker 05

  Yeah, I mean, I think, I mean, it'd certainly be cool if the like when your eyes are open, you've got the world of bit, a world of atoms, and when your eyes are closed, you've got the world of bits. The, I mean, the the near term is all, these are medical devices, especially on the cortical side. I think these are very serious brain surgeries that like healthy 40 year olds are not going to be like if your hands work, your a keyboard is a really great brain computer interface.

• 1:56:09John Coogan?

  Yeah.

• 1:56:10Speaker 05

  And there's a lot of research that goes into like the design of the Xbox controller or the design of like the VR inputs. Because if you can convey the signals from your brain to the muscles, like you can just capture that and that works really well. But at the same time, I think many people eventually become patients, like these bodies are great until they're not. And as they start to fail, we should have better options. And so I I think that BCI, I think that there's a kind of a meme that it is an AI adjacent story, but I actually think it's like a longevity adjacent story. I see like the like the only organ I really care about is the brain. As far as I'm concerned, kind of the rest of the body exists to like, keep the brain alive and healthy and move it around and cause it to do things. And I'm going to be fairly disappointed if I'm murdered by my pancreas or my heart.

• 1:56:53Speaker 05

  And so I think the you can get to this point where you say like, well, instead of the you've got all these hard problems, like, yeah, we've made progress on cancer and cardiovascular disease and metabolic disease. But again, like when you think about health insurance, like you can't insure something with a 100% loss rate. And we still that is what we were talking about in medicine. And I think you can get to this point where the the brain is the thing that is really special, makes you you. And like, when I look at a person, I see an agent and a robot, and biology makes great robots. The thing we really care about is the agent. And if you can kind of deal with the agent directly and the rest becomes swappable parts, then instead of needing to cure cancer, we might just be able to avoid this entirely. And that I kind of see as as one of the central elements, at least how I think about the promise of BCI's.

• 1:57:37Speaker 05

  And so I'd say, like, one of our one of the thing that I think could really be possible is like, by 2035, it won't be widespread. I think it'll take longer than that for sure. But by 2020, 2035, can you offer patient number one, the choice of like, dying of pancreatic cancer or being inserted into the matrix?

• 1:57:53John Coogan?

  Yeah. What's the strongest steel man you can offer for the anti-transhumanism arguments? Because I mean, I've been steeped in this exact Silicon Valley lore for basically my entire life. I've heard it articulated a bunch of different ways in media, video games, the matrix. And yet I've also seen a lot of pushback. There's a lot of there's a lot of pushback against the transhumanism stuff. What what's been the what's been the strongest argument that's that that you've you've had trouble debunking, if any?

• 1:58:27Speaker 05

  Yeah, I mean, I I don't really like the label transhumanism. It just has like all these like connotations. I also don't like to work the term like. The, I think it is important that these things, like, people don't want to be different.

• 1:58:39John Coogan?

  Yeah.

• 1:58:39Speaker 05

  They want to be themselves.

• 1:58:40John Coogan?

  Yeah.

• 1:58:41Speaker 05

  I think it's important to talk, to realize that things we're talking about should make you kind of just as much you as you've ever been, and just like with the best quality of life you've ever had. And I think like the concern with AI is that we could, it could be massively, um, like, it would lead to really undermining our agency. It could be like lead to a massive loss of agency for humanity and the emergence of something else. Whereas I think that these BCI technologies are really about increasing human agency. It's really, it's a very like,

• 1:59:13Speaker 05

  um, uh,

• 1:59:15John Coogan?

  Yeah.

• 1:59:15Speaker 05

  Yeah, they kind of exist to facilitate you and it should not, and it should be, it's not other than human. It's like it, it, uh, is a very pro-human technology.

• 1:59:25John Coogan?

  Yeah.

• 1:59:27Speaker 05

  I mean, as much as any kind of healthcare, right? Like we, we try, like you, we do heart transplants. We get, we're working on our visual hearts. You have dialysis. You have, we treat cancer. We like, think that these things are worth trying to improve on. And it's only transhumanist in the way that like any healthcare is. That you don't accept that just like the state of the art in the Middle Ages. If you're like playing in the wrong forest and got a scrape on a branch, you could suddenly die of a bacterial infection two days later. Like we developed antibiotics. Like this is only transhumanist in the way that antibiotics are. It's this continuation of that story.

• 1:59:56John Coogan?

  That's a great, yeah, that's a great argument. I love it. Um, what, uh, yeah, Jordan, do you have anything else?

• 2:00:04John Coogan?

  I was gonna ask, I was gonna ask about the merge.

• 2:00:06Jordi Hays?

  Yeah, I'd be interested to, uh, get your dep- personal definition of the merge. Sam Altman wrote in 2016 that it would, could be a scenario where people become best friends with the chatbot. Maybe this, the merge is something like, uh, AGI where we just keep moving the goalposts.

• 2:00:24John Coogan?

  Yeah, yeah. Do, do you think it's inevitable? Or do you think there's like some sort of fork? Or, or where do you think the unexplored discussion surface area is around the concept of the merge?

• 2:00:35Speaker 05

  I mean, the way that we interact with AI as I mean, there's many different ways that this could go. I think like the the failure mode of like Terminator seems less likely. But I definitely agree with Sam that like an underrated failure mode is people just start like delegating their decision making to it because the models just make better decisions. Like there's I was reading an article that one of the US military like combatant commanders is now like running personnel decisions by chat GPT. And if you're just like realizing like, hey, like, these things make as good decisions as I make, then you they kind of come like pre merged. Like, you don't need a device for that necessarily, because we are just kind of like, like, causing it to happen in the world, like, whatever it wanted.

• 2:01:16Speaker 05

  And there's like some dark versions of that. Like, you can imagine like an extinction scenario is that we just really become dependent. We're like, man, these things have great judgment. They really know what to do. We should like, ask it for advice and listen to it and like persuades a bunch of humans into suicide. Like, you should, I think you got to keep an eye on those rates. They won't be zero. And I think it's unreasonable to expect them to be zero, because you're talking about hundreds of millions of people. But like, do those trends like, what do those look like over time?

• 2:01:43John Coogan?

  Yes, yes. Keep an eye on the rates. That's, that's the great summation of what's going on. It, it, you should do the baseline's not zero. But if it starts climbing up, you got to watch it.

• 2:01:52Speaker 05

  Exactly. Just like self driving cars, like humans are not, like, don't hold them to like, like, to these unachievable standards.

• 2:01:57John Coogan?

  Yes.

• 2:01:58Speaker 05

  But like, keep an eye on the rates.

• 2:01:59John Coogan?

  Keep an eye on the rates. I completely agree. That's a great take. Thank you so much for coming by the show. Congratulations on the progress. Do you have anything else?

• 2:02:08Jordi Hays?

  Yeah, this was incredible. I wish we had more time.

• 2:02:10John Coogan?

  Yeah.

• 2:02:10Jordi Hays?

  But come back on whenever you want.

• 2:02:12John Coogan?

  Yeah, I really appreciate this.

• 2:02:13Speaker 05

  Thanks for having me on. Good to see you guys. This was super fun.

• 2:02:15John Coogan?

  Yeah, we'll talk to you soon.

• 2:02:16Jordi Hays?

  Cheers.

• 2:02:17John Coogan?

  Have a good one. Bye. Let me tell you about Profound. Get your brand mentioned in chat GPT. Reach millions of consumers who are using AI to discover new products and brands and get a demo at Profound. Our next guest is Andrew Dudum from Hims and Hers, two companies, no, just one company, Hims and Hers. Welcome to the show. Welcome. How are you doing?

• 2:02:36Speaker 06

  I'm great guys, how you doing?

• 2:02:38John Coogan?

  Thanks so much for taking the time to jump on the show. For those who who might not be familiar, can you just kick us off with a little bit of an introduction on the state of the business right now? It's a public company, people know Telehealth.

• 2:02:50Jordi Hays?

  Yeah, I thought you were gonna say for anybody that hasn't heard of of Hims, because I'd like to find one.

• 2:02:56Speaker 06

  You guys have some great hair, so I feel like maybe we've got some customers on the call.

• 2:03:02Speaker 06

  So Hims and Hers has been around for about eight years. It's actually our eighth birthday this month. We went public in 2021. And the vision is to help people feel great through the power of better health. So we connect you on your phone, you pick up your iPhone, you click an app, and you immediately get connected to one of a thousand or 2,000 doctors who are registered in your state, and then can immediately engage in everything from cardiovascular disease risk, at-home testing for testosterone, menopause, weight loss, prescription treatments, all the way down to stigmatize things like sexual health and mental health and depression and anxiety. So, you know, we treat millions of patients on the platform, 10,000 to 15,000 patients per day.

• 2:03:45Speaker 06

  So while we are in many ways a new and innovative telehealth company, as people, what people call us, we're actually probably one of the largest healthcare systems in the US today, just given the pure volume of patients that we treat. And it's all digital. So no matter what zip code you're in, you have access to world-class, consistent care, standardized care, which I think is one of the most important parts of all this digital, this digital healthcare revolution, which is no matter where you are, you get great care, as if you're 10 minutes away from Stanford and you can go see a dermatologist, you know, right outside your door. So this year, we're on track, you know, two and something billion in revenue profitable and growing super fast, which is exciting. A bunch of organizations have got it.

• 2:04:26Jordi Hays?

  Gong hit, gong hit for you.

• 2:04:29Jordi Hays?

  Let's talk about Labs.

• 2:04:30John Coogan?

  Yeah, Labs.

• 2:04:33Speaker 06

  So labs is an important one. We launched today two packets, packages where you for a few hundred bucks can get over 120 biomarkers. This is the most advanced diagnostics frankly that are out there in the market. And I spend a ton of time figuring out with, with concierge doctors and others, what is kind of at the leading edge. Where you can get twice a year, annual testing and then have all those biomarkers come into the platform. And have thousands of doctors essentially overlook it, coupled with our AI to be able to prescribe and treat very specific treatment plans for you. So it's not just a data dump of here's, you know, 120 biomarkers, good luck, throw it in chat GPT. But, but it's actually real providers that are then helping you make tactical personalized prescription next step.

• 2:05:18Speaker 06

  So we have about a million square foot of pharmacy compounding in the US. So we actually make a lot of these medications ourselves. So if you're a person that comes in like me, low vitamin D, uh, you know, testosterone's not as optimized as I want to be. So it's going to be a zinc and ashwagandha or magnesium supplement along with core pharmaceuticals. Let's say for heart disease like a statin, we'll be able to actually put that together for you in a form factor that you love. Um, you know, customize into a beautiful personalized treatment and then deliver to your door for something like 30 or 40 bucks a month. So it's really this vision of a completely unified system that gets to know you, optimizes you.

• 2:05:56Speaker 06

  And then actually can verticalize the, the making of treatments for you, uh, so that we can see you get better and help you kind of get preventative. Given we're in a country here where almost everybody dies of preventable disease, right? It's like heart disease, heart attacks, diabetes, and stuff that takes like 10 to 20 years to develop. We should be able to get ahead of this stuff and actually start people, you know, help people change that course of direction.

• 2:06:18Jordi Hays?

  How do you, how do you think the labs market evolves? There's a ton of players in the space. This is obviously not your core business, although it feeds into the core business. I think there's players that are trying to use labs as like a wedge to then go and compete with you guys. You guys are kind of doing the opposite, but do you think that margins on labs like effectively go to zero over time?

• 2:06:43Speaker 06

  It's going to go to zero. Yeah. I think anybody who's in the labs business today, whose core business is labs, needs a new business. Yeah. You've got Quest and LabCorp and great partners. They've got thousands of locations, you know, 10, 15 billion dollar public companies each of them.

• 2:07:00Speaker 06

  There's no way that those margins will be constrained when you have a platform like ours, where it's in our, it's in our best interest and it's in our consumers' best interest to verticalize this infrastructure over time and give it away for free. Right? For, for you guys or anybody who's a him's or hers customer, it's to our benefit that we do a full panel and, and get you that at cost, or even as lead gen, right? Like we can, we'll, we'll pay you to take it eventually as you actually verticalize this infrastructure because the data you then get back from it allows us to give you very tangible next steps and manage your care over, you know, five, 10, 15 years, which is really where the long-term relationship and value creation comes from. So, you know,

• 2:07:43Speaker 06

  for us, um, you know, we're excited about these price points. It's $1.99 for a base package. It's $4.99 uh, for the advanced package. You know, my hope in three years from now and my CFO will be mad if I said this, but it's like, my hope is it's 30 bucks, right? And it, and it just gets added on to your him's and hers member, uh, membership. And if you have a treatment with him's and hers at all, you get this stuff for free, right? Because it just makes the platform and it makes your precision care that we can deliver so much better, right? Say you're a hair treatment and you're taking, you know, our oral chew for hair loss, which is like finestride and minoxidil. And then we figure out that you're prediabetic, right? Our ability to compound that with a low dose of metformin or some type of other, you know, microdosing GLP-1 or GIP, like that just transforms the

• 2:08:28Speaker 06

  actual clinical outcome for you. And it all started with a very simple relationship, which is, I'm worried about my hair. I want to start taking advantage of that.

• 2:08:36John Coogan?

  I want to know your take on Theranos. I have this hot take that it was never a good idea at all because you can just take a full vial of blood and it was, even if it worked, it wouldn't be that big of a product because if I go to the doctor and they take this much blood instead of this much blood, it's just not that big of a deal. Do you think if Theranos had worked, uh, that would be a successful product? Would that have reshaped? Like, was there ever a chance that would have been a great thing?

• 2:09:06Speaker 06

  Yeah. The only reason that the idea for Theranos is interesting was if you can do at-home diagnostics as opposed to in-office lobotomy.

• 2:09:15John Coogan?

  Sure.

• 2:09:15Speaker 06

  Right? So, you know, that, that burden of leaving your house, going to a doctor's office, the number one fear in the country is needles, right? So you sitting there and somebody, you know, putting a needle in your arm to take out that tube of blood. Whether or not it's a tiny tube or a big tube, it actually doesn't matter. You know, you had to go and park and take time off work.

• 2:09:33John Coogan?

  I just see that as a terrible problem in our society that people are afraid of needles.

• 2:09:38Speaker 06

  It doesn't matter.

• 2:09:38John Coogan?

  We should not be fearful. I don't like that at all. I feel like we should solve the fear problem before we solve the needle problem.

• 2:09:45Speaker 06

  I think if you can do, and this is, you know, something we're working on, and we've talked about this. I think in the next year or two, you'll have at-home diagnostic devices that you can put on your arm, click a button, you feel nothing. It's kind of like a CGM, right?

• 2:09:59John Coogan?

  Sure, sure, sure.

• 2:10:00Speaker 06

  And you can actually probably eventually look at the interstitial fluid. So you're not even doing injections deep into the blood, but you're actually just doing kind of like top capillary fluids to be able to interpret what some of these base biomarkers are. If you can pull that off and it costs 10 bucks to do that and you just click a button, take it off and mail it back to HIMSS, that I think really transforms access because so many more people I think will do that versus the whole, you know, kid can boot all like going and scheduling and showing up in office.

• 2:10:28John Coogan?

  Yeah, yeah, that makes a lot of sense.

• 2:10:30Jordi Hays?

  How, what's your like framework for how the GLP-1 market shapes out?

• 2:10:39Speaker 06

  Yeah, it's a crazy market, you know? It's like one of the most important categories probably in the next few years. I think you're going to have more and more treatments on the market very quickly. Right? You've got Metzera deal with Pfizer and Novo that have been taking place, you know, back and forth. You've got Kylera that just raised a huge growth fund that's got a GLP-GIP that is at par or possibly superior to tirzepatide. You've got Viking coming out probably in 29 or 30. You then have Wegovy, nozempic going generic sometime in 2030 or, you know, 31, which is going to bring the price down to, you know, it costs, you know, it could probably cost $10 to make one of those models, right? So I think in the next few years, the landscape is going to be.

• 2:11:24Speaker 06

  Incredibly competitive. I think the prices are going to come down dramatically. This is something we're very excited by. When we first started putting these treatments out, the prices were $1,500 a month, but now they're down to about $150. I would guess in three years from now, you can be buying, you know, one of the best treatments for 50 bucks a month. And at that point, it's going to be just cash pay. Customers are going to be able to use HSA, FSA, not have to deal with the, you know, the pain in the ass of insurance. And then the massive market will expand pretty dramatically.

• 2:11:53John Coogan?

  Yeah. You said you have like, what, thousands of square feet of compounding? Something like that, tens of thousands?

• 2:11:59Speaker 06

  Yeah, we've got a million, a million square feet.

• 2:12:01John Coogan?

  A million square feet?

• 2:12:03Speaker 06

  Yeah.

• 2:12:04John Coogan?

  I feel like that's been controversial in the past. There's been battles between you and maybe the FDA, maybe the...

• 2:12:11Jordi Hays?

  Just a little controversial.

• 2:12:12John Coogan?

  Yeah, I mean, we read about it in the Wall Street Journal. Is there, are you staying the path on compounding? Is that where you want to be in a decade? Is compounding here to stay? Or is there a world where you wind up partnering with the legacy pharma companies?

• 2:12:27Speaker 06

  I think it's both, right? I think we will inevitably partner with a lot of these companies. You know, we have the largest distribution platform for therapeutics in the US for consumers, right? So if you have a next generation treatment, we should be talking. Because if we want to get your medicine to a lot of people, you know, there's just no faster route to do so. So I think that's a very logical and natural thing to happen. And we've been doing things like this. We recently invested in Grail, which is one of the, I think, the most advanced early multi-cancer detections blood tests. Simple blood tests can detect over 100 cancers as early as stage one. I have every single person in my family take this test every year. More things like that are going to come to market and I think will come to the platform.

• 2:13:11Speaker 06

  But for compounding in specific, there's really clear guidelines with regards to FDA allowance of compounding. There's different types of pharmacies. They can do different types of things for very specific reasons. Provider personalization, form factor, side effect management, et cetera.

• 2:13:28Speaker 06

  We're a public company, you know, our, our chief medical officer was the chief medical officer of Walgreens. Uh, Deb O'Toole, who's on our board, who runs the risk committee, was the woman who, who wrote a lot of the compounding legislation at the FDA for a decade. So I think we played very clearly by the rules. I think this is one of the first times in history that, um, we're able to give this level of personalization to a lot of people.

• 2:13:51John Coogan?

  Sure.

• 2:13:51Speaker 06

  Right. Historically, this level of personalization only was possible for people that, you know, were spending $50,000 a year for concierge doctors and they could have treatments made for them. And I think it's our ambition to figure out, how do you get that for the 1% to everybody? And so I think there's friction without question in that system, but, uh, the regulatory framework is, is, is very clear. And I think we're just staying the course and, and I think over time we'll be able to figure out ways to, to, to make the other parties in the ecosystem feel like they're getting, you know, well, well compensated, uh, as well.

• 2:14:21John Coogan?

  Yeah, makes no sense.

• 2:14:24Jordi Hays?

  Uh, how would you describe your management style? Uh, the, the, you know, the company's, uh, up massively from, you know, the IPO. Uh, I feel like, uh, I started tracking HIMSS during the D to C era, right? You guys were the, the poster child of D to C, this meteoric rise. And then, and then, uh, obviously, uh, you know, the, the public markets have been, uh, wild. Uh, yeah, I'm, I'm curious like how, how you navigate, uh, you know, the, the market internally, you know, even with the team. Like it feels like you guys are very built for it. Um, but what's your approach?

• 2:15:02Speaker 06

  Yeah, you know, when we, I remember waking up one morning and, and looking at my wife and the stock was $2.87. Like we were trading at, I think like point four times next year's revenue or something like that. It was crazy. So I think the team has a stomach of steel, you know, whether it's not $70 or $2.87. I think, you know, most of the executive team will retire with this company, including myself. Because I think there's this incredible opportunity to figure out how you redefine what is a healthcare membership that every single one of us wants to buy. Like it's got the cutting edge, it has the most, you know, the best diagnostics, it's the most affordable, it's an Amazon Prime

• 2:15:41Speaker 06

  version of healthcare that you can afford, right? It's like 500 bucks a year. For 500 bucks a year, why deal with insurance in this country when everybody's insured, but everybody has a high deductible plan with a $2,000 deductible, right? So while everyone is insured, nobody can actually get the benefits of insurance because they can't actually afford to use all the cash to then get the $1 of insurance. So I think our management team is, um, it's not a very glitz and glamour team, right? Like you're not seeing us out on TV 24/7. It's a really heads down team. Uh, it's a gritty team. It's a team that loves to build. We have a ton of fun together. Uh, and I think

• 2:16:21Speaker 06

  it's a team that genuinely focused is on what can be accomplished in a decade, uh, and not can be accomplished in the next quarter or two, which is why I think a lot of the investments we're making, um, have a much longer time horizon. But, you know, as a, as a founder that runs the company that has the high boat stock, like we have that privilege to be able to invest over that long period of time.

• 2:16:41Jordi Hays?

  That makes sense. Uh, what kind of horror stories have you heard about Chinese peptides? There's sort of a meme going on, on X of, of people talking about it. Uh, obviously there, uh, some of the pricing coming out, you know, people buying directly there is pretty wild. Uh, what, what are the, what are the risks that people should be aware of?

• 2:17:01Speaker 06

  Yeah, you, you've got to make sure, you know, the, the pharmacy suppliers are working with are good quality pharmacy suppliers. There's something called a certificate of analysis that, um, you know, high quality FDA oversight facilities in the US, uh, can deliver third-party tested invalidation. You can actually ask for this certificate. We give customers their certificate for, for any of our compounded products, which actually shows the independent laboratories saying this is exactly what, you know, we say it is. So I think you want to have organizations or pharmacies that have that type of coverage, that type of third-party testing, you know, good manufacturing practices, and ideally have some type of oversight from, you know, state boards or FDA. I think there's a lot

• 2:17:46Speaker 06

  of stuff you can buy online that's, you know, truly not for human use. And they say that as a way to kind of loophole around, but it like truly is not for human use. And, you know, I'd encourage people to try to stay away from that kind of stuff.

• 2:18:00Jordi Hays?

  Random question. I'm curious to get your take on it. Something like 1% of US GDP is dialysis.

• 2:18:08Jordi Hays?

  Doesn't necessarily seem like a problem for HIMSS to solve, but from everything you know about, you know, working in and around this industry, how do you think, do you think it's a solvable problem?

• 2:18:22Speaker 06

  Yeah. You know, my grandfather was on dialysis for like this five or seven years before he died. And it's a, it's like the worst thing in the world, like watching somebody on that, right? You have to show up to the facility every week. If you don't, you literally, your body deteriorates and you die. Dialysis is a result of you having totally failed taking action on you being sick for 20-plus years, like a very long time. Similar to cardiovascular disease, right? Like you show up in the ER at 60, you have a heart attack. You know, that took 20 years to build up. Like, there's just no other way it happens. And so, something

• 2:19:03Speaker 06

  like what we launched today, I actually think is the first step of the salt. Because you get, for a couple hundred bucks, something like a lipoprotein little A test, which tells you your predisposition for advanced cardiovascular disease, which means even if your cholesterol numbers are amazing, they're not amazing enough. Right. You have to have like the best gold standard cholesterol numbers like you're an 11 year old kid to avoid a heart attack because you have this predisposition to risk. Same thing with diabetes, right? Diabetes, A1C, fasting insulin, all of the fasting glucose, these all rise over time. So if we're 30 or 35 and have these numbers, you can just chart what it's going to look like at 50. And so, you know, micro steps in health,

• 2:19:46Speaker 06

  in food, in movement, in, you know, metformin at the right time, or GLPs, or preventative statins, or PSK9 inhibitors, like all of these tools exist. And for the most part, these tools are not extremely expensive. Right? So the real burden in the US healthcare system isn't actually lack of innovation, it's lack of education and access. So how do you get more people tested faster? How do you make it easy and less scary for them to take that first step? And then keep them motivated along the way because, you know, these treatments don't make you feel amazing the next day, but they'll save your life 20 years from now. And I think that's where a brand like ours spends a shitload of time is, is you, you actually have to love him's and hers because staying on this medicine

• 2:20:29Speaker 06

  is, is good for your health and, and it's harm because you've dropped that habit and then you drop that benefit.

• 2:20:37Jordi Hays?

  Makes a lot of sense. Well, thank you so much for joining. It's great, great to finally meet. Certainly, we're, we're an inspiration during, again, that D to C era. It was like just a crazy, crazy moment in, in time. And it's awesome to see you guys execute in the public markets.

• 2:20:54John Coogan?

  Yeah.

• 2:20:55Speaker 06

  Yeah.

• 2:20:55John Coogan?

  Thank you.

• 2:20:55Speaker 06

  Yeah.

• 2:20:56John Coogan?

  We'll talk to you soon.

• 2:20:57Jordi Hays?

  Cheers.

• 2:20:57John Coogan?

  Have a good one.

• 2:20:59John Coogan?

  Before we move on, let me tell you about Linear. Linear is a purpose-built tool for planning and building products. Meet the system for modern software development, streamline issues, projects, and product roadmaps. We have our next guest in the studio, Melissa Tokmak, Tokmak from Netic. We also, the market is selling off like crazy. People are asking us to cover it, but we will talk to Melissa first. How are you doing?

• 2:21:20Speaker 07

  Hello.

• 2:21:20John Coogan?

  Good to see you. Have a seat right there. We do need to cover, I'm glad we have you on the show because the market is in turmoil, but your business is maybe less indexed to the market. Is that correct?

• 2:21:34Speaker 07

  That is correct.

• 2:21:34John Coogan?

  Explain, explain, you know, explain the business, the news, take us through it.

• 2:21:41Speaker 07

  Yeah.

• 2:21:41John Coogan?

  We'll, we'll get your take on all sorts of things.

• 2:21:42Speaker 07

  Well, I mean, we serve the essential services businesses that are really. Backbone of our American economy.

• 2:21:48John Coogan?

  By nature, counter cyclical.

• 2:21:50Jordi Hays?

  Let's give it up for the backbone.

• 2:21:51John Coogan?

  The backbone of the American economy, thank you. Okay.

• 2:21:54Speaker 07

  So, these businesses are, these enterprises are in industries like HVAC, plumbing, electric, solar, consumer health, and energy across the boards. So whether the market is going down or up, that somebody, a business or a consumer always needs these businesses. Actually, today, I'm coming from San Francisco, as you know. All of San Francisco needs a lot of these services today because the weather is a complete disaster. It has been raining, no, it's complete rain.

• 2:22:24Jordi Hays?

  Rain is coming for Los Angeles.

• 2:22:26Speaker 07

  Everything is shut down. Yeah, electricity goes off all the time, and I'm sure a lot in the Bay Area will be needing these services all day today. So what we do is provide really these enterprises with an AI revenue engine, right? So in these times of need, they can actually handle all of the demand with AI agents and serve the communities. But also, when the demand is soft, they can predict the need and turn these relationships into multi-time recurring relationships.

• 2:22:57John Coogan?

  Okay.

• 2:22:58Jordi Hays?

  So, I feel like every time I call a plumber, or a roofer, or an electrician, people like that, they don't, like, the delay and the lag of getting, like, there's always, like, crazy lag in terms of getting back and just being like, yes, I can see, I can come by at this time. And I feel like the lag is because they're super busy. And if you can help them respond more quickly, they can generate a lot more revenue.

• 2:23:24Speaker 07

  Exactly. Actually, many of them are very large businesses, and the lag is because everybody needs it. When you need it, odds are millions of other people need it at the same time. And I'm sure, like, this has been talked here in this program too, there is a national shortage in skilled labor in these industries too. So it's actually, Jensen talks about it a lot, and it is the type of labor we need in the country, and until then, they're also going to have.

• 2:23:49John Coogan?

  Is that what Jensen was talking about? I feel like he said, he like, you know, we don't have enough plumbers, but I felt for some reason he was talking about, like, plumbing and data centers?

• 2:23:55Speaker 07

  Yeah. It's the same, right? So HVAC technicians or plumbers, what the data centers need, cooling, right?

• 2:24:01John Coogan?

  Yeah, but it's not that many.

• 2:24:02Speaker 07

  Or to be able to stand it up. But if you think about it. It takes a lot of years to get actually trained for these jobs.

• 2:24:11John Coogan?

  Sure, sure.

• 2:24:12Speaker 07

  Probably more than I went to school for at Stanford or you went to school for. Actually, it's very important and afterwards you have to do it in real life, the training as well.

• 2:24:21John Coogan?

  Sure, sure.

• 2:24:22Speaker 07

  So with data centers and consumers and businesses across the world, the need for these businesses a lot. And it's not only about HVAC, plumbing, electric, when you say essential services, right? It's also across energy and solar or consumer health, like the Bay Club, right? That we have been serving. So it's really the things that everybody in their daily lives need and has to interact with.

• 2:24:46John Coogan?

  Yeah, walk through the typical stack of HVAC repairmen. I imagine somebody could just have, you know, like a Yelp page and a Venmo account. Then some of them have a full website with a booking system and almost like their own little mini ERP. Probably not something they built themselves. Maybe they have a Shopify site or something. And then at a certain point, they get a roll-up happens, they get bigger, they get more industrial, they get more mid-market. And then I imagine that there's some sort of central, you know, point of record. Are you plugging into that? Are you trying to replace that? Are you trying to be the first, the first choice for setting up all the touchpoints?

• 2:25:26Speaker 07

  Yeah, so we primarily work with what you described as mid-market and large enterprise. A lot of these businesses are owned by private equity.

• 2:25:34John Coogan?

  Sure.

• 2:25:35Speaker 07

  And or still owner operated. They have built it from zero to hundreds of millions of dollars in revenue. So they will actually, I love that you went through that stack. They might have a more sophisticated tech stack than here, right? So these businesses run on EBITDA, right?

• 2:25:52John Coogan?

  Okay.

• 2:25:52Speaker 07

  So it's extremely important that they think about their efficiency, the customer relationship, and how do they serve their communities? So primarily it will focus on, you know, what type of data they have and where do they keep it? There is software solutions and of course, third-party aggregators where they might do advertising. So we will partner with different solutions that they might have. To make benefit of any of the data they can. But primarily, what we're doing is bring Frontier AI to these industries so that when their demand is very high, instead of losing that, they can handle it all at the same time. And when the demand is soft, they can generate net new demand, right?

• 2:26:34Speaker 07

  As you know, these industries, just like we talked about San Francisco today, is very volatile due to seasonality or some other external effects that they can't really control, right? And so that's why it's very important how you need to be efficient when the demand is coming, you have to capture it all. And when it is not, you're thinking about-

• 2:26:55Jordi Hays?

  Yeah, it's like a retail brand, if you can't sell during Black Friday, if you're in Q4, you're cooked, like you're probably not profitable at all.

• 2:27:01Speaker 07

  Exactly, exactly. Or even how to predict the next thing. Like, one of our customers, there were tornadoes in Missouri a few months back, and before the tornado literally happened, using Netic, right, reached out to potentially affected areas and talked about generators. How would you feel if your electricity went in the studio? You would not like that because your business would be down, right? And, but then afterwards-

• 2:27:23Jordi Hays?

  I tried to get a generator when the power was out last year.

• 2:27:26Speaker 07

  It was denied by-

• 2:27:27Jordi Hays?

  Doesn't work well.

• 2:27:28John Coogan?

  It doesn't work once the crisis starts.

• 2:27:30Jordi Hays?

  Because the electrician's like, "Yeah, buddy, I got 200 people calling me asking the same thing."

• 2:27:35Speaker 07

  I will, I will help you out. It's the best in there.

• 2:27:38Jordi Hays?

  I got one, I got one, I'm covered now.

• 2:27:39Speaker 07

  Yeah, but also, you know, when the disaster actually happened, in 90 minutes, maybe they got thousands of calls, right? So how do you help? But it was great for them because they could answer every call with Netic, and they had already maybe rescheduled the non-essential jobs that they had so that they could help the community in that moment. So that type of proactivity and focusing on the future and like revenue generating interactions for the businesses is very important for these industries.

• 2:28:11Jordi Hays?

  Let's talk about traction.

• 2:28:12John Coogan?

  Yeah, sure.

• 2:28:13Speaker 07

  Yes.

• 2:28:14Jordi Hays?

  You raised a new round?

• 2:28:15Speaker 07

  I did. Today we announced our Series B.

• 2:28:18Jordi Hays?

  Very, very low dilution. Let's let her hit the gong.

• 2:28:21Speaker 07

  Oh, that's me, yes.

• 2:28:22Jordi Hays?

  As hard as you, as hard as you can.

• 2:28:24John Coogan?

  23 million dollar Series B led by Founder's Fund, hit that gong.

• 2:28:30John Coogan?

  Wow, with authority.

• 2:28:32Jordi Hays?

  Powerful hit.

• 2:28:32John Coogan?

  At a 450 million dollar cap, which is a strong 4X step up in valuation.

• 2:28:38Jordi Hays?

  Very low dilution.

• 2:28:39John Coogan?

  Very low dilution. Yeah, why?

• 2:28:41Speaker 07

  Well, I think from the beginning, I really...

• 2:28:44John Coogan?

  You hear this? Good omen.

• 2:28:46Jordi Hays?

  Still going, everybody.

• 2:28:46John Coogan?

  When it still goes, it's a good omen.

• 2:28:48Speaker 07

  The same strength we put into our business, right? No, I mean, that is actually the answer. From the beginning, what was important to me is that we build a business with strong fundamentals, right? It is not about the hype, it's not about the valuation. For me, the most important thing, even in investments, we work with the best and we're lucky and grateful that same people tripled down in a row in Netic. And when you have a business with strong fundamentals and strong margins and scaling efficiently, you don't want to raise more than you need. And if you do that, by the way, that would be a detractor, actually, in the type of talent that we're hiring today. They do want to work in nimble teams, they do want to run through walls, they want to

• 2:29:30Speaker 07

  be here because they want to build the future of essential services.

• 2:29:34Jordi Hays?

  I want to run through a wall.

• 2:29:35Speaker 07

  Yes, you should.

• 2:29:36Jordi Hays?

  Get one of your customers to build us a wall, we'll run through it.

• 2:29:39Speaker 07

  Exactly.

• 2:29:40John Coogan?

  I have a question about models. We were talking to Brian Chesky and he's starting to add features to Airbnb that allow the booking of like a chef. It's a very different, it's a very different model for someone who's traveling, they want a private chef or something like that. But he mentioned that he's having a lot of success with open source models. Obviously, he's operating at massive scale and so every dollar counts. Are you seeing luck with open source models or are you sticking to the closed source models?

• 2:30:14Speaker 07

  Yeah. You actually can't stick to one. The way to, because if you think about it, maybe the difference there is we serve essential services industries, I'm like a utility to these companies. I can't go down. I can't be wrong. So the way that, so we build our own inmaloustration, right? The way that you build and think about models and what's really helping with each task that you need to do in that order. orchestration is very important. So you have to think about what's best fit in terms of address verification in this case versus understanding what does Jordi need when he's calling me, right? Or messaging me. So that would be need finding. So the whole point is, how do you think of these modules and what do they need to get done? And what is the model

• 2:30:59Speaker 07

  that can give you the best answer, right? And you have to obviously build a lot on your internal evals to be tracking that continuously and make any changes as you need, right? So today, definitely, like, we do use quite a bit of more closed source models, but depending on your evals, if something is not, you know, like, keeping up with what we need and the new functionality we add, we would always test and think about any other model.

• 2:31:30Jordi Hays?

  What about in 10 years? You think in 10 years? Before that, are you using voice models at all? Like, like, you have, like,

• 2:31:36Speaker 07

  Yeah, we don't do voice to voice. We do have voice. Actually, today, we support our customers from voice, text, online, like, any type of channel you can take. We are, we're the single inbox, right, for anything that they're really getting. So voice, yes, we support, but voice to voice is actually not there yet, speech to speech. So we do really orchestrate all of that in terms of speech to text, reasoning models, and then text to speech afterwards to really give that accuracy, reliability, as well as the flow, the feel, right? And hopefully, maybe in 10 years, you're asking, we will have to think, think that not in 10 years, maybe even a few, where's voice to voice, speech to speech is going. So according to that, we have to continuously.

• 2:32:19Jordi Hays?

  What's the sales cycle like?

• 2:32:22Speaker 07

  To be frank with you, I think we really sell based on ROI. So we show our customers, right? And they can talk to our existing customers at any point, anyone interested, private equity firms that we support, large companies that we support.

• 2:32:37Jordi Hays?

  Yeah, our private equity firm's been one of the main channels in here where they're just like, hey, we have a, we have a roll up of a bunch of different underlying businesses. Let's roll it out. We have a number of roll ups and we want the same software across all of them. We have a roll up of roll ups.

• 2:32:49John Coogan?

  I mean, that's what private equity firms are these days.

• 2:32:51Speaker 07

  Today, yeah.

• 2:32:51John Coogan?

  There are rollups.

• 2:32:52Speaker 07

  And that is correct. It has been one of the good channels, but also it can be direct to large companies itself. I think the reason we love working with private equity because in today's world, they understand the importance of AI and they're looking for an AI partner.

• 2:33:07John Coogan?

  Yeah.

• 2:33:07Speaker 07

  Right? It's not really about.

• 2:33:09Jordi Hays?

  They're like, we need an AI strategy. What can we buy?

• 2:33:11Speaker 07

  Yeah, actually, you'd be surprised. Like, I think a lot of tech companies may be looking for something or a strategy to put on a board deck. A lot of these businesses I work with, I will say they're absolutely incredible and better entrepreneurs than entrepreneurs in Silicon Valley. Sometimes I see.

• 2:33:26Jordi Hays?

  They know. They've experienced. They've experienced free cash flow.

• 2:33:29Speaker 07

  Yeah, it's, I mean, you can't hide behind raises and valuations, right? Like, all you see is that, does this help my revenue?

• 2:33:36John Coogan?

  Yeah, yeah.

• 2:33:36Speaker 07

  Very easy. And for me too, I can say, hey, I will not give you any random words, AI this, AI this, blah, blah, blah. No, let me show you how is this going to affect your revenue. Let's talk about that. So when you do it that way, I think the cycles are pretty fast.

• 2:33:55John Coogan?

  Yeah.

• 2:33:57Jordi Hays?

  Do you think people are scared to compete with you? You seem like a pretty formidable opponent.

• 2:34:03Speaker 07

  Um, I don't know. I, I hope not because I.

• 2:34:07Jordi Hays?

  You enjoy crushing them?

• 2:34:08Speaker 07

  Yeah. I do enjoy crushing.

• 2:34:11John Coogan?

  Crushing. Uh, how are you?

• 2:34:13Speaker 07

  Not only me, my team too. And this is just for them from here. You all that are watching right now, you're all beasts. And there's no one else in this world that I would rather work with other than you. Incredible people coming from scale, HRT, Databricks, MIT, Stanford. But I don't want to even talk about the accolades. Who cares? They all, most of them have deployed AI applications in the real world, in production, and they run through walls every day to deliver for the real world, even though they could be anywhere. They could go in any company.

• 2:34:50Jordi Hays?

  Well, for the Series C, we will get a wall built and you can run through it on the go.

• 2:34:55Speaker 07

  Exactly. I will be doing that.

• 2:34:57John Coogan?

  Yeah. Yeah. Thank you so much for coming on the show.

• 2:34:59Jordi Hays?

  Amazing progress.

• 2:35:00John Coogan?

  Congratulations.

• 2:35:01Speaker 07

  Thank you for having me.

• 2:35:02John Coogan?

  We'll talk to you soon. We have one more guest. Stay with us. The market is crashing. Everything is in turmoil, but the business continues. The show goes on. The White House, the White House needs to announce 100-year mortgages. Yeah, yeah. Second round of stimulus tax. Let's move to 100-year mortgages. That will be the solution to all this. No, the only thing that can save us right now is numeralhq.com. Sales tax on autopilot. Spend less than five minutes per month on sales tax compliance. Also, fin.ai, the number one AI agent for customer service. Number one in performance benchmarks. Number one in competitive bake-offs. Number one ranking on G2. And our next guests are here. Let's bring them in to the TBN UltraDome.

• 2:35:43John Coogan?

  We have Jeffrey Katzenberg and Tomas. Welcome to the show, folks. Thank you so much for taking the time to come down to the TBN UltraDome. Good to see you again. Congratulations on the news. Let's get some introductions first. Who are you? What organization are you with? Let's kick it off there.

• 2:36:02Speaker 08

  I'm Tomas Puig. I'm the CEO and founder of Alumbic.

• 2:36:05John Coogan?

  Thank you.

• 2:36:06Speaker 08

  Jeffrey Katzenberg, GP at Wonderco.

• 2:36:09John Coogan?

  Third time on the show, second time on the show, something like that, but first time on the show here. Congratulations. And what's the news today?

• 2:36:15Speaker 08

  Oh, well, the news is, is that we actually just raised $145 million.

• 2:36:20John Coogan?

  Fantastic. Why don't you go hit that ball? Please enjoy this. As much as you like, enter the dragon. Yes, yes, yes. Whoa. Around the world, actually. We haven't seen that before. Different style, different style.

• 2:36:34Speaker 08

  That was a very aggressive ring.

• 2:36:35John Coogan?

  I like it. I like it. It's still ringing now. It has a nice sound. So take us through the business. How are you pitching it these days?

• 2:36:41Speaker 08

  So what's really interesting about it is we do a little bit of a different thing in the AI space. We do causal AI. And really, what our executives that we work with in these Fortune 500 and Global 2000s want to know is they want to do every chain reaction and lever that moves the metrics that they care about in the business at any time. And so where we started originally was on the marketing and sales side. And so they would be like, hey, I spent $100 million on a stadium name. All these unknowables, these large content pieces, all this brand. We all know it worked at the time. But nobody could actually prove down to the dollar, down to the actual effect of what it would be. And so when we built the company,

• 2:37:25Speaker 08

  Originally, we were, you want to know how to shine a light inside this black box and actually be able to get the real dollar value so that you can start telling stories because there's been so much of this improvement in, say, the programmatic side of the house buying these ads. Well, what ended up happening is, once we built that, we found out it actually worked really, really well, and we got a lot of incredible clients. And then they started to ask us to do other things, like being like, oh, hey, now can you see how all that affects foot traffic? Now can you see how that affects my ordering systems? And as we started putting this causal model out further and further, we realized it actually worked on an incredible amount of stuff. And so then our clients started asking us to be like, well, can you do our FPNA for finance? Can you do our supply chain?

• 2:38:09Speaker 08

  And so that's really kind of where the business came from. But the core of it is, is that like, when you have low information or low amounts of stuff, you want to be able to actually affect the metrics you care about.

• 2:38:19John Coogan?

  Take us through some of the case studies. Who have you worked with? What's the most concrete example of, you talked about buying a stadium. Have you literally found whether or not Crypto.com Arena penciled out? Have you, have you looked at these? You know, I grew up at the Staples Center. I miss Staples. It's been renamed. But, but I want to at least know.

• 2:38:39Speaker 08

  Are you the guy with the red stapler?

• 2:38:40John Coogan?

  I want to at least know that, that it was worth it financially. Is it, was it worth it financially? Can you tell me that?

• 2:38:47Speaker 08

  Yeah, so we did a great.

• 2:38:48Jordi Hays?

  Let's check Staples stocks.

• 2:38:50John Coogan?

  Yes, should Staples have stuck with the sponsorship?

• 2:38:55Speaker 08

  See, the problem is, it doesn't count for execution risk.

• 2:38:57John Coogan?

  Yes, yes, yes.

• 2:38:58Speaker 08

  So when we.

• 2:38:59John Coogan?

  There's always unknowables, but, but what can you know?

• 2:39:02Speaker 08

  No, so we did a great case study with Delta Airlines that we actually presented with their CMO at the, the Nvidia conference, at the GTC conference, where they were sponsoring the Olympics.

• 2:39:13John Coogan?

  Yeah, yeah.

• 2:39:14Speaker 08

  And one of the things about these large sponsorships is there's two big aspects people don't talk about. One is, every time you've ever worked in the business side of the house, they go, hey, you need enough historical data to be able to do something.

• 2:39:23John Coogan?

  Yeah.

• 2:39:24Speaker 08

  Right? The second is, it takes a lot of time to get a response. Well, when they were doing this, when they were doing the Olympics, they were doing the promotions, one of the most interesting things we found out is, we analyzed all this ad work that's coming out. You have only two weeks. You're holding up tens of millions of dollars on the P and L line while you're doing this, right? These are not cheap options.

• 2:39:44Speaker 08

  And when we polled the study, we actually found out that the best piece of content that functioned for them, the most profitable, was not actually the content that was the ads. The ads did okay, right? Thirty seconds, sixty tickets, bots. But what ended up happening is they actually, if you watched the Olympics, they had the Delta medal presentation ceremony, where like every time an American athlete would win a medal, they would take it, put it on, you know, their shoulders, and that would be, you know, a really emotional moment. Well, it may seem kind of obvious in hindsight, but when you have the Eiffel Tower in the background, really emotional moments, you sell a lot of tickets to Paris. But the key is, if you can know that within a few days, you can either double down, right? You can sponsor the next Olympics. You can do all these things, and then you can actually act on it.

• 2:40:28Speaker 08

  Now, the problem also with when you do big, huge campaigns like that is you walk into the lounge for Delta Airlines, and TMEOSA is the Wi-Fi passcode. It's not like one simple campaign, right? You pivoted an entire company into messaging set. But we were able to tell them within a couple of days, down to the dollar, a material amount of cash that they were able to pull back, and then they could actually show that to, you know, executives.

• 2:40:51Jordi Hays?

  Oldest problem in advertising, right? Of like, I know my advertising, like, half of my advertising-

• 2:40:56Speaker 09

  That's a line. I'm 100% sure-

• 2:40:58Jordi Hays?

  Yep.

• 2:40:59Speaker 09

  -that 50% of my brand marketing is working if I only knew which 50%.

• 2:41:03Jordi Hays?

  Exactly.

• 2:41:04Speaker 09

  Which has been true in brand marketing forever, going back to the 1980s.

• 2:41:07Jordi Hays?

  I'm sure in entertainment especially, because there's less, like, the attribution is really challenging. We did a bunch of marketing, and then people went to movie theaters, and then some people streamed it, and it's hard to actually track it all the way through.

• 2:41:19Speaker 09

  But what the brilliance of what Tomas and Olympic have done is, is that using, well, first of all, and he should explain it, because he's the brainiac here, the new math that came out of contact tracing from COVID, which actually has impacted many different businesses in terms of research and- You know causality and attribution.

• 2:41:43Jordi Hays?

  We got advertising learnings out of contact tracing.

• 2:41:45Speaker 09

  By the way, absolutely. It's a biggie.

• 2:41:51Jordi Hays?

  Very American to like, you know.

• 2:41:53Speaker 09

  Entrepreneur says, oh, okay.

• 2:41:55Jordi Hays?

  Turn it into an ad.

• 2:41:55John Coogan?

  Advertising.

• 2:41:58Speaker 09

  When you think about it is, is that either for that for COVID testing or for any of these attributions, what they are able to do, which was not possible even only three or four years ago, which is to be able to ingest billions of rows of data from all sources.

• 2:42:21Speaker 09

  And using machine learning and AI to actually digest that and make sense of that and actually then be able to see directional in in time. You know, they'll he'll explain neural networks and how this actually works, which, as I said, is way above my pay grade here. And it but I can tell you, which is to your to your question here, which is, when we went to the top brand marketers, the first reaction was, no way. You know, this is like, you know, yeah, it's not possible. And this is just like telling us, you know, you know, pot of gold at the end of the rainbow or, you know, Dumbo flies or I don't know, whatever you want to say. And they went, not not possible.

• 2:43:05Speaker 09

  And that's when these guys would come in and do these POCs. Disney, Mars, Accenture, Delta. And, you know, in the world, once is an accident, twice is a coincidence. Three times you go, OK, well, this thing actually delivers. As fanciful as the notion may be, it's real.

• 2:43:25John Coogan?

  Yeah. Can you tell me a little bit of the history of how like product placement works in Hollywood? Because that feels like the classic example of difficult to measure. But you've been in that situation.

• 2:43:39Jordi Hays?

  We put this car in this one.

• 2:43:40Speaker 09

  But you're but it's but it's when you start to actually think about this, there's a trillion dollars a year globally spent on.

• 2:43:49Speaker 09

  Brand marketing and brand marketing is everything from crypto on the Staples Center.

• 2:43:55John Coogan?

  Sure, sure.

• 2:43:59Speaker 09

  To an interstitial, to imagine in the Disney parks, all the things that you're, you know, if they're able to offer to their brand partners, to putting a logo on a car. What do you, you know, what's the value of having Oracle?

• 2:44:15John Coogan?

  Yeah, on the race car.

• 2:44:16Speaker 09

  On a race car in this, or a patch on a baseball player or a basketball player, you know.

• 2:44:22John Coogan?

  So is it, has it always just been intuitive?

• 2:44:24Speaker 09

  Yes.

• 2:44:25John Coogan?

  Or has it been more relationship driven?

• 2:44:27Speaker 09

  No, it literally is intuitive. It is, I mean, he can tell you, there's, there's a, there's an old math, MMM, he'll, he can, again, Tomasz can really take you through, explain it. And that literally dates back to the 1980s. And one, it's directional, not specific. And two, the lag between the time it happens and you're able to gather the data on it was months.

• 2:44:53John Coogan?

  Yeah.

• 2:44:53Speaker 09

  So it doesn't, the value of it, you know, is really questionable.

• 2:44:56John Coogan?

  I, I guess my question for you is, it, it's very clear that with the, with the progress in AI, there's the ability to find insights in data, like clearly we see this across everything. My question is like, there, there's so little ground truth that how can your clients A/B test your solution against something else? Like if I go to a, you know, a coding agent and I ask it to generate some code, I can run the code at the end and I can say, well, yeah, the code worked, right? Or I can read the report. But if I go to you and I say, how much was this sponsorship worth? And you tell me it's $4 million? And I say, okay, like maybe it was for, that, that could have just been a guess.

• 2:45:38John Coogan?

  So how do you justify the, the results that you spit out since we can't run a controlled trial?

• 2:45:44Speaker 09

  So.

• 2:45:46Speaker 08

  Validation is one of the number one things we get asked constantly.

• 2:45:48John Coogan?

  Yeah, I'm sure.

• 2:45:50Speaker 08

  When we give out papers, it's really funny. We have one paper where it's like a two-page brochure, and then the next 15 pages is how we validate.

• 2:45:56John Coogan?

  Yeah, exactly.

• 2:45:57Speaker 08

  And, you know, one of the things that people don't talk about is it's actually very possible to test these things.

• 2:46:02John Coogan?

  Oh.

• 2:46:03Speaker 08

  So what you can actually do is you can do what we call backfit testing. You could set the machine backwards in time.

• 2:46:07John Coogan?

  Mm-hmm.

• 2:46:08Speaker 08

  And then you can test against things that you know. You can withhold information. You can do all sorts of things to actually see whether, you know, you feed the machine up to like last year.

• 2:46:16John Coogan?

  Yeah.

• 2:46:17Speaker 08

  You know what all the results are gonna be this year, so when you predict what something's gonna be, you can see how close you got. And so I think that when we're testing things, we use a variety of both synthetic data testing methods.

• 2:46:27John Coogan?

  Yeah.

• 2:46:27Speaker 08

  Because we're not, you have to keep in mind, we're not a transformer model or an LLM.

• 2:46:32John Coogan?

  Sure.

• 2:46:33Speaker 08

  It's an entirely new methodology. And so when we grab this stuff, we have both synthetic data we can build.

• 2:46:38John Coogan?

  Yeah, yeah.

• 2:46:38Speaker 08

  So there's systems like for the nerds like Tegromite that does causal synthetic data.

• 2:46:42John Coogan?

  Mm-hmm.

• 2:46:43Speaker 08

  Or there's real data, like EFMRI data, that we actually know that there's a cause and effect that we can pull from physical world or physical bodies that you can test the algorithms against as well. And then from the business side of the house, there's lots of ways to do it. Now, one of the things I like to correct on this is it's like, we often say the mantra of our company is we're about being directionally correct, not specifically wrong.

• 2:47:02John Coogan?

  Okay.

• 2:47:02Speaker 08

  And so when you need to make decisions, a lot of time when we do these simulations, we're like, here's the top 20% of things you need to absolutely keep doing because they knock it out of the park. Here's the 20% of things that are just literally hurting you.

• 2:47:13John Coogan?

  Okay.

• 2:47:14Speaker 08

  And when you have zero information, like you're in a pitch black room, and you have no idea where the exits are, would you rather take a really, really good educated guess about where the exit is? Or would you rather wander around the dark?

• 2:47:26John Coogan?

  Yeah.

• 2:47:27Speaker 08

  And so I think that one of the things about business intelligence is when you have zero information, the value of the information you can get is that much more important.

• 2:47:34John Coogan?

  Yeah.

• 2:47:35Speaker 08

  And so we do it various ways.

• 2:47:36John Coogan?

  I'm so confused about the backtesting thing. Like if I, like, how would you go back and assess the value of like, Budweiser sponsoring Super Bowl 40 or something?

• 2:47:44Speaker 08

  Yeah.

• 2:47:45John Coogan?

  It's like you can't, you can't run the counterfactual.

• 2:47:47Speaker 08

  Well, you, so counterfactual simulations are assumptions. So think about like this. A lot of people talk about probabilistic graph, right? Graph analysis.

• 2:47:55John Coogan?

  Mm-hmm.

• 2:47:56Speaker 08

  Probabilistic graphs, whether they're causal, whether they're anything else.

• 2:47:58John Coogan?

  Sure.

• 2:47:59Speaker 08

  Is, to a certain extent, I mean, you know, in a pandemic, LLMs are almost a probabilistic graph.

• 2:48:04John Coogan?

  Sure.

• 2:48:05Speaker 08

  Right? Undirected until you query it.

• 2:48:06John Coogan?

  A neural network.

• 2:48:07Speaker 08

  And, exactly. And so when we do this type of analysis, The thing about it is is that we actually have seen lots of instances of the same exact thing. It's about the specificity. So we just did a calculation literally yesterday that we looked at one trillion connections across six months for a company. Like, that's the type of scale of analysis we're doing. We haven't seen when you haven't, when you, say, the counterfactual, when you're saying, what does it look like when you have a base state? We've seen the operating version of a company over years. And so we know what the base state looks like when there's no influence from that. The key is you have to have enough data. So in the old world, when we're doing all this analysis, we used to say, you hear about the term overfitting, right? Everybody's worried that is the model just biased?

• 2:48:50Speaker 08

  Well, in the old world, you'd say, I want to reduce the number of features, reduce the dimensionality, to prevent overfitting, right? To prevent overprediction. Well, in the modern world with like computational statistics nowadays, or AI as we call it, you want more features. You get more accurate the more data you have. That's counterintuitive for how people think about these type of things. So my answer to you is, we have to have immense amounts of data, right? And so we ingest a lot of it. And then that gives us enough vision, right? That we can see what a state would be and what it would not be. And then we also provide our customers with confidence and everything else. So there are times where we really, really know, right?

• 2:49:27Speaker 09

  Yeah.

• 2:49:28Speaker 08

  And we go, this we have 100% bet on, we see enough examples of this.

• 2:49:31Speaker 09

  Yeah.

• 2:49:32Speaker 08

  And sometimes we go, you're asking for a call on this, and yeah, we've got a pretty good guess, but you should still keep an eye on it.

• 2:49:37Speaker 09

  The interesting thing is, is, you know, he's going fishing. Sure. To see where, you know, the best fish are. Sure. And interestingly, we did one of these POCs for a very, very big branded company. And they were looking for the positive impact of event-driven. Sure. Brand marketing they were doing.

• 2:50:06Speaker 09

  When they went out and sucked in all of this data to do this assessment for them, in addition to finding what were the sort of positive impacts of this, which were modest, what they actually caught in the net was, unknown to them, a promotion being done, literally in Canada by a, you know, little subsidiary.

• 2:50:29John Coogan?

  Interesting.

• 2:50:30Speaker 09

  That was just, you know, like a, a, a regional commercial.

• 2:50:35John Coogan?

  Yeah.

• 2:50:36Speaker 09

  Which somehow or another bled over into the States. So it was being run in Canada by a subsidiary there, bled over into the States, and had a tremendous negative, adverse impact on brand.

• 2:50:49John Coogan?

  Yeah.

• 2:50:50Jordi Hays?

  Those Canadians.

• 2:50:51John Coogan?

  I mean, yeah, the classic example is like, the social media manager intern of your Canadian, you know, offshoot is doing something that goes viral in America and everyone hates it.

• 2:51:03Speaker 08

  This one was even funnier. They bought out a national, the National Sports, National Hockey League final spot.

• 2:51:07John Coogan?

  Okay.

• 2:51:08Speaker 08

  And so that's gonna be huge in Canada.

• 2:51:09John Coogan?

  Yeah.

• 2:51:10Speaker 08

  So they, but that broadcasts across the entirety of North America.

• 2:51:12John Coogan?

  Okay, so everyone saw it.

• 2:51:13Speaker 08

  Right? And so like, suddenly this little like, thing there.

• 2:51:15Speaker 09

  Drippy, ugly hamburger in the hand in a way.

• 2:51:18John Coogan?

  And it was just poorly executed.

• 2:51:20Speaker 09

  And I'm sure maybe natively, they thought it was funny.

• 2:51:24John Coogan?

  Okay, interesting, interesting. And so you're looking at like, when, when sales data is happening relative to when the campaign goes on, and then you tease out from there.

• 2:51:31Speaker 08

  Yeah, think about like, you know, one of the big inspiration for the company was Renaissance Technologies out of New York.

• 2:51:35John Coogan?

  Sure, sure.

• 2:51:36Speaker 08

  So the high-frequency trading firms and everything, they can do a pretty good job about knowing when things affect each other or not, but you have to have an immense amount of incredibly high-speed data sets.

• 2:51:44John Coogan?

  Talk about Accenture. You're partnering with them. Are they, are they just an investor or are they also go-to-market channel?

• 2:51:51Speaker 08

  Oh, well, they actually started as one of these tests we did, because they were curious.

• 2:51:57Speaker 09

  They were a customer.

• 2:51:58John Coogan?

  A customer.

• 2:51:59Speaker 08

  Yeah, and the interesting thing is-

• 2:52:00Speaker 09

  Which is the best way, when you think about it, John. So they started as a customer, then said, "Wait a minute, we, we have a multi-multi-billion dollar business around marketing go-to-market."

• 2:52:13John Coogan?

  It seems like a lot of people go to Accenture for these questions.

• 2:52:17Speaker 09

  And so then it went to, hey, can we help take you to market? Yeah. Which they've been fantastic at. I can imagine. And then that led to when this, when Tomat's doing this most recent round, them stepping in is the biggest venture investor they've ever done. Wow.

• 2:52:37Jordi Hays?

  So, big companies, Fortune 500 have been hiring Accenture and other consulting firms and research firms to help them understand what is driving results, positive and negative in their business for a long time. What's the timeline to productizing what you're doing to a degree that a much smaller company, let's say a company with like a million dollar a year advertising budget, can actually start to get value out of this? Oh, that's interesting.

• 2:53:05Speaker 08

  Oh, so this is actually one of my favorite questions because it has to do with the long-term vision of the company. One of the problems you get when you have midsize or small size firms and they're near and dear to my heart is that they literally have never done things. So when you have a really large corporation, right, they've been in a podcast on whether they want to be two or not, somebody's mentioned them, right? They have all of these data sets across everything. But when you're a smaller company, right, you say a million dollar a year business or something like that, you haven't done everything. So there's no actual priors, there's no data, we don't know how they react. But eventually, when we see enough of the universe, right, just like you hear about world models, just like you hear about anything else, we'll actually know what the causal universe looks like.

• 2:53:47Speaker 08

  What is the actual most likely outcome of when somebody does something?

• 2:53:51Speaker 09

  Yeah.

• 2:53:51Speaker 08

  So in the future, in a, in a, say, a couple of years, we'll actually be able to build synthetic data sets that you can send us any query and we can respond to you what the most likely, likely outcome would be. And where this gets really, really important is I think that, especially when you're doing private businesses, the world of LLMs and everything nowadays, I think they're amazing. But they're quickly converging, right? There's not going to be that much difference for a client between like ChatGPT and Claude. The problem is that if you're using that for business intelligence and business decisions, what are you going to do when your competitor gets the exact same answer and strategy you do? That's a real problem. And so we believe that we will take the best private data sets in the world,

• 2:54:33Speaker 08

  do stuff for just them, get the, get our overall learnings in other places. And then we can actually provide people with strategies that are unique to them.

• 2:54:42John Coogan?

  Yeah.

• 2:54:43Speaker 08

  Right? Augment the other sets of intelligence, but.

• 2:54:45John Coogan?

  Yeah, there are certain brands that will get a better return on investment from being in the Super Bowl than others. If you are a no name brand and you just put up a 30 second spot in the Super Bowl, people are going to be like.

• 2:54:55Speaker 08

  Your web server would probably crash, right? Like all sorts of things.

• 2:54:57John Coogan?

  Yeah, yeah, your web server might, you might not be ready for it, but also people might just be like, I'm not ready to learn about that as opposed to, I actually gonna, am in the market for beer right now. And thanks for showing me those Clydesdales.

• 2:55:08Speaker 08

  Yeah, but I mean, to kind of like talk to your question, like that is an absolute dream that I have, right? Of being able to level the playing field across that, but also provide.

• 2:55:16Jordi Hays?

  Yeah, because that's one of the advantages of these massive businesses. They can spend $20 million to figure out what's really working and then do a lot more of that. Whereas a small firm is like kind of doing the vibes based analysis.

• 2:55:26John Coogan?

  Yeah, yeah.

• 2:55:27Jordi Hays?

  Started my career helping companies like advertise on YouTube channels and with podcasts. And, you know, they might run a $200,000 campaign and there's some like direct attribution that they get either from a landing page or a code, but then they're like, wait, our conversion rate is just going up on the site generally.

• 2:55:45John Coogan?

  Totally.

• 2:55:45Jordi Hays?

  Is that being driven by changes that we made at the site level, changes that we made to the offer? Is it just overall lift from, from podcast advertising or is it some other strategy entirely? And so the, the, the more you can bring like real business intelligence to small companies, the more they, they'll be able to actually compete against the, the big guys.

• 2:56:04Speaker 08

  And that makes me happy because everybody should have the level playing field and whoever has the best strategy and product should do well. Right? I think that it's important to note as we kind of talk about this thing, we spent. Years, years building the signal processor for this thing. We had to figure out how to bring in all this unstructured and semi-structured data and be able to basically do data dog for unstructured data first, before we could even try the causal thing. And so we have years of working on that and that ingestion pipeline, that, that skill there is what allows us to do what you're talking about. You can't just be like, I'm gonna slap a model on top of it, right? You actually have to be able to have a sensor that can actually understand every data feed.

• 2:56:43Jordi Hays?

  Have you found a company yet that Jeffrey can't get an intro to or directly connect you to the CEO? Like this guy? Oh, you want to meet this guy? Yeah, I'll give him a call right now.

• 2:56:54Speaker 08

  You ever want to not take a bet on something? That's one of the things I would not take a bet on.

• 2:57:00Jordi Hays?

  Jeffrey will find them.

• 2:57:03Speaker 09

  Hunt you down.

• 2:57:04John Coogan?

  Well, congratulations on the progress. Thank you so much for coming by the Ultra Dome. And yeah, good luck with the next, with the next phase, putting the capital to work. It's going to be an exciting time and I'm excited to hear more of these case studies as they roll out.

• 2:57:17Speaker 08

  Yeah, I really appreciate it both of you.

• 2:57:19Jordi Hays?

  Let us know when you're ready for your first podcast, customer. We got

• 2:57:22John Coogan?

  Yeah, yeah, we got to figure it out.

• 2:57:24Jordi Hays?

  Analysis that we want to do. I mean, we, we just do the, we do the vibe space analysis.

• 2:57:27John Coogan?

  We did a billboard. We did a billboard in New York.

• 2:57:29Speaker 09

  Being in the house.

• 2:57:29John Coogan?

  Did really well.

• 2:57:30Speaker 08

  We should just do it for fun. We should just do it for fun anyways. Like there's nothing more that I like than like looking at data sets.

• 2:57:35John Coogan?

  Yeah, yeah, yeah. We ran, we ran a billboard campaign in, in Manhattan. We ran two, exactly two billboards. We have no idea whether or not it worked. It seemed to work because people shared it a lot on social media.

• 2:57:45Speaker 09

  For a million dollars, he could tell you.

• 2:57:49John Coogan?

  Well, we'll need to bargain that down.

• 2:57:52Speaker 08

  For you all, we could do some drinks.

• 2:57:54John Coogan?

  Well, thanks so much for coming on the show. Congratulations on all the progress and we will go back to our regular scheduled programming. And I will tell you about Adio, customer relationship magic, the AI native CRM that builds, scales and grows your company to the next level. Um, Buco Capital bloke is also black pilling on the timeline. Uh, there, it is a bloodbath in the markets. Nvidia is down 4%. Microsoft's

• 2:58:19Tyler?

  Michael Burry rage quit.

• 2:58:20John Coogan?

  Michael Burry rage quit. We need to talk about Michael Burry. I'm sure there's something in the stack. Um, let's go through some quick updates as we run through the show. Uh, oh, this is cool. This is a white pill. Google the mind. SEMA 2, our most capable AI agent for virtual 3D worlds. Tyler, what's the deal with SEMA 2?

• 2:58:39Tyler?

  Yeah, this is really cool. Um, so this is a, it's like a general model that, that can basically play like any video game.

• 2:58:45John Coogan?

  Sure.

• 2:58:46Tyler?

  Which is different because like you've seen a lot of like even early open AI, there was like Dota 2.

• 2:58:50John Coogan?

  This is amazing for me because I don't have any time to play any video games anymore since I have kids. And if with this agent, I could just tell it to go play the game and then I, I could

• 2:59:01Tyler?

  Go have fun. And then, then describe the fun you had and I'll read it and I'll get to fully

• 2:59:06John Coogan?

  And email it to me and I'll have Nick read the email and summarize that to me in a text message. That would be my experience of the video game. No, seriously. What I actually want this for is I hate how modern video games, it takes 20 minutes to set up. Have you, have you ever experienced this? It's like

• 2:59:19Tyler?

  Like going through the tutorial?

• 2:59:20John Coogan?

  Remember when I, yeah, when I made you play Halo, when I made you play Halo, it, it took like 10 minutes for you to actually get into the game and then the actual game took you five minutes to play. And so, uh, I like, there are a lot of times when I hear a new game, I'm like, I only have 20 minutes in my weekend to play this game. I want to jump straight into the action. I don't want any of the opening unskippable cutscenes. I don't want any of the, of the tutorial, learn how to jump, learn how to crouch. I already know how to move. I know what the stick does. Don't tell me that. Uh, this is gonna solve that for me, hopefully.

• 2:59:52Tyler?

  Yeah, but this is actually, I think this is like one of the most interesting papers this year.

• 2:59:56John Coogan?

  Yes.

• 2:59:57Tyler?

  Um, a, a, a big part of it is, um, it's general. So it, it, you can put in the new game and then it does like self-play essentially.

• 3:00:04John Coogan?

  Sure.

• 3:00:04Tyler?

  Um, which is like really important because that's like, it's teaching itself.

• 3:00:07John Coogan?

  Yeah.

• 3:00:07Tyler?

  This is basically the first like agentic. Model that can like see a new completely new environment.

• 3:00:12John Coogan?

  Yeah.

• 3:00:12Tyler?

  And then do self-play.

• 3:00:14John Coogan?

  Yeah.

• 3:00:14Tyler?

  Uh, where it gets better. So you, um.

• 3:00:17John Coogan?

  I wonder how wild, I'd love to know how, how diverse the inputs are. Like, does it expect an Xbox controller's worth of inputs? Does it expect a, uh, a keyboard's worth of inputs? Because that's more inputs that it would need to learn. That's fascinating. And then I wonder what happens if you start marrying it to generative world models in the future as those become games? Like, you have this weird, like, agent on simulated world. You're simulating both of these. That's very interesting.

• 3:00:41Tyler?

  Uh, a big part of it is, is they connected it to, um, Genie 3.

• 3:00:45John Coogan?

  Hmm, they did.

• 3:00:46Tyler?

  Yeah.

• 3:00:47John Coogan?

  No way.

• 3:00:47Tyler?

  It, it worked. So you could, you have a generative, basically, video game.

• 3:00:50John Coogan?

  Okay.

• 3:00:51Tyler?

  It's like generating frame by frame and it's just a little keyboard and stuff. And then you have the generative, uh, agent that like learns what the, the world is and then actually plays it.

• 3:00:59John Coogan?

  That was very cool.

• 3:01:00Tyler?

  See this like flywheel kind of starting very well.

• 3:01:02John Coogan?

  Whether you're going long or short, go to public.com investing for those that take it seriously. They got multi-asset investing, industry-leading yields, and they're trusted by Millings.

• 3:01:08Jordi Hays?

  They also acquired Alto IRA, crypto IRA.

• 3:01:13John Coogan?

  Yes, yes, yes.

• 3:01:13Jordi Hays?

  You're now going to be able to hold, uh, digital assets in your, uh, retirement accounts all on public.

• 3:01:20John Coogan?

  Yeah.

• 3:01:20Jordi Hays?

  They acquired Alto for 65 million. That got announced this morning. So great pickup from the public team. Uh, major white pill, Mira Marathi's startup Thinking Machine Labs is in early talks. We love early talks.

• 3:01:34John Coogan?

  Love early talks.

• 3:01:34Jordi Hays?

  Some of our favorite talks to raise a new round of funding at a valuation of roughly 50 billion. More than 4X their valuation.

• 3:01:41John Coogan?

  Everything's cooking. Everything's cooking. Stop blackpilling.

• 3:01:46Jordi Hays?

  Uh, in other news, Anthropic disrupted a highly sophisticated AI-led espionage campaign. The attack targeted large tech companies, financial institutions, chemical manufacturing companies, and government agencies. We assessed with high confidence that the threat actor was a Chinese state-sponsored group. Uh, I guess they were using Claude, I, I think is, uh.

• 3:02:08Tyler?

  Yes. I, I think they were using Claude code, actually.

• 3:02:11John Coogan?

  Hmm. Weird.

• 3:02:13Jordi Hays?

  So they were vibe coding espionage.

• 3:02:15Tyler?

  Yeah, it was pretty funny. I read through some of the blog posts and it was like some of the the interactions of like the hackers and it was like this is what they were saying to the model. They're like, okay, good job, Claude, but I think this part is wrong. You can see like the actual transcript. Very bullish, transropic.

• 3:02:31John Coogan?

  Well, go to aidsleep.com, get a pod five, five year warranty, 39 years free trial, free returns, free shipping. Michael Burry appears to be shutting down Scion Asset Management. He said, Dear investors, with a heavy heart, I will liquidate the funds and return capital, but for a small audit slash tax holdback by year's end. My estimation of value in securities is not now and has not been for some time in sync with the markets. With heartfelt thanks, but also with apologies, I wish you well in your future investments. I do suggest investors contact my associate PM.

• 3:03:06Jordi Hays?

  Did he really, did he really quit right before the market started correcting?

• 3:03:11John Coogan?

  He's, he's the famous.

• 3:03:13Jordi Hays?

  You know, 90%, 90% quit right before, 90% of gamblers quit right before.

• 3:03:18John Coogan?

  Apparently this is.

• 3:03:19Jordi Hays?

  They finally call the top correctly.

• 3:03:21John Coogan?

  Yeah, it does seem odd. I mean, if he, if he, if there is a crash and he was going to be short, but he pulls out before like getting that short thesis to work and realizing the results of that, it really changes his legacy. It changes the meaning of that meme. It changes the, the, the meaning of the, the Michael Burry image, in my opinion. But we'll see. I mean, he might have, he might be out of step for years and we might look back on this and say that it was great that he got out and it was great that he didn't, he didn't short the greatest bull market.

• 3:03:57Jordi Hays?

  His memory will live on through meme images from the big short.

• 3:04:03John Coogan?

  And through whatever he gets on his wrist. Go to getbezel.com. Your Bezel concierge is available now to source you any watch on the planet. Seriously, any watch.

• 3:04:10Jordi Hays?

  In other news, Paramount, Comcast and Netflix are preparing bids for Warner Bros. Discovery. They will have until November 20th to submit non-binding first-round bids.

• 3:04:23John Coogan?

  Yeah.

• 3:04:24Jordi Hays?

  Warner Discovery is holding the auction process in the hopes of having it completed by the end of the year.

• 3:04:30John Coogan?

  Have you seen how expensive streaming is getting? This is on the cover of the Business and Finance section in the Wall Street Journal. The price has gone up pretty much everything. Netflix has gone from something like five bucks to 25 at the top end. Everyone's raising the price and now they're creating bundles of streaming properties.

• 3:04:50Jordi Hays?

  It's only going to be $2,000 a month.

• 3:04:51John Coogan?

  And they're all going to have, yeah, 2,000 bucks a month. They all have ads constantly.

• 3:04:55Jordi Hays?

  They all have different logins.

• 3:04:56John Coogan?

  All different logins and you can barely rebundle them even if you try.

• 3:05:00Jordi Hays?

  I wish, I wish that we could get Jeffrey in here to talk about this Warner Bros. deal, but you're probably too close to the metal on this one to provide, to be able to really comment on it.

• 3:05:11John Coogan?

  Well, we'll tell you about Wander instead. Find your happy place. Book a Wander with inspiring reviews, hotel great amenities, dreamy beds, top-tier cleaning and 24/7 concierge service. It's a vacation home, but better.

• 3:05:20Jordi Hays?

  In more news, apparently Vine is being rebooted.

• 3:05:23John Coogan?

  No way.

• 3:05:24Jordi Hays?

  Under the name Divine with funding from Twitter's former CEO, Jack Dorsey.

• 3:05:29John Coogan?

  Huh.

• 3:05:30Jordi Hays?

  The app plans to feature more than 10,000 previously archived vines and does not allow AI-generated content.

• 3:05:37John Coogan?

  That's remarkable. There have been so many Vine revival attempts. Elon was talking about bringing it back at one point.

• 3:05:44Jordi Hays?

  One more time.

• 3:05:45John Coogan?

  I believe the founder of Vine was talking about bringing it back and did a number of different projects. There was a project called V2, right? At some point. It would be fun. I was a huge fan of Vine when it came out. I really enjoyed it as a new creative medium. It was, it was very, very interesting, very, very fun. Let me tell you about adquick.com. Out-of-home advertising made it easy and measurable. Say goodbye to the headaches of out-of-home advertising. Only AdQuick combines technology, out-of-home expertise and data to enable efficient, seamless ad buying across the globe. What else?

• 3:06:14Jordi Hays?

  In other news, Strategy has gone below one NAV for the first time ever.

• 3:06:20John Coogan?

  Whoa, that is crazy.

• 3:06:22Jordi Hays?

  Meaning that Sailors BTC Holdings are worth, are worth less than their, than their total debt. How is that? How is that even possible? That seems very concerning. Anyways, their debt has long maturities, 2027 to 2032. They're not margin loans, but eventually they'll be forced to sell if they can't make interest payments. They have something like a $700 million worth of interest payments due next year and they have, I think, under 50 million of cash on hand at the moment. So they'll either need to raise more or start selling.

• 3:06:59John Coogan?

  And, and just like immense pressure from the other products in the market. I feel like if you want access to Bitcoin, which has been Michael Saylor's flagship asset, you were able to initially mine it for free, which was weird, then, then buy it on Coinbase with a somewhat clunky process. Now it's pretty simple. Now you can buy Bitcoin on a credit card. You can get it in almost every app. You can, you can get it in an ETF. You can get it in your, in your retirement fund. There are a whole bunch of different ways to get exposure. So that particular strategy is not the only one in town. Anything else, Jordy? Or should we wind down for the day and say goodbye to everyone?

• 3:07:42John Coogan?

  Say, leave us five stars on Apple Podcasts and Spotify.

• 3:07:45Jordi Hays?

  Everybody go DM the White House now on X and just request the 100 year mortgage. We need some type of bullish announcement.

• 3:07:54John Coogan?

  Yes.

• 3:07:55Jordi Hays?

  Otherwise tomorrow will likely be even worse.

• 3:07:58John Coogan?

  Yes. Well, if you do DM, X has changed the way DMs work. Now there's unified DMs and encrypted chats all in one place. That is the last piece of news of the day. Well, thank you for tuning in. Leave us five stars on Apple Podcasts and Spotify and we will see you tomorrow.

• 3:08:13Jordi Hays?

  Can't wait.

• 3:08:14John Coogan?

  May I am Pacific?

• 3:08:15Jordi Hays?

  Sure.

• 3:08:16John Coogan?

  Goodbye.

• 3:08:16Jordi Hays?

  Cheers.