Weekly Recap: CEO Affair at Coldplay Concert, Elon Musk's AI Girlfriend, Cognition Acquires Windsurf

(00:00) - Intro (00:03) - Astronomer CEO Affair at Coldplay Concert (11:11) - The Steelman for Grok's Vulgar Anime Mode (29:31) - Cognition Acquires Windsurf (01:20:14) - Jeff Wang (Windsurf) & Scott Wu (Cognition) (01:32:19) - Windsurf Chaos Aftermath Breakdown (01:41:27) - Martin Shkreli (DL Software) 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 Follow TBPN: https://TBPN.com https://x.com/tbpn https://open.spotify.com/show/2L6WMqY3GUPCGBD0dX6p00?si=674252d53acf4231 https://podcasts.apple.com/us/podcast/technology-brothers/id1772360235 https://www.youtube.com/@TBPNLive

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

• 0:00John Coogan?

  You're watching TVPN. This went insanely viral. The CEO of a company called Astronomer was caught on the kiss cam, hugging one of his employees, the head of HR. Oh, look at these two. All right, come on, you're okay. Uh oh, what?

• 0:21John Coogan?

  Either they're having an affair or they're just very shy.

• 0:25Jordi Hays?

  And I said.

• 0:27John Coogan?

  But Chris, in the video, Chris Martin is like, something's going on here.

• 0:31Jordi Hays?

  I said startup CEOs can't even hug their chief people officer at a concert in this country anymore.

• 0:36John Coogan?

  It is crazy when the internet descends on a current thing, how viral it is. Like, just you have to jump in on the current thing.

• 0:45Jordi Hays?

  Before we talk more about this, I wanted a quick word from our sponsor. Astro by Astronomer is the orchestration first data ops platform built on Apache airflow, empowering your team to build, run and observe data pipelines that just work all from one place.

• 1:00John Coogan?

  Do you, uh, do you believe a conspiracy theory? Put on the tinfoil hat.

• 1:03Jordi Hays?

  Yeah, so.

• 1:04John Coogan?

  Will you steal man the tinfoil hat? What is the tinfoil hat explanation here?

• 1:08Jordi Hays?

  Tinfoil hat explanation here.

• 1:10John Coogan?

  All, all press is good press?

• 1:12Jordi Hays?

  Is that, uh, Nathan, for you, uh, this is just part of an elaborate stunt.

• 1:17John Coogan?

  Yes.

• 1:17Jordi Hays?

  And, uh, Nathan's plan was have the CEO get caught having an affair with a coworker to increase brand awareness and get a buzz going. This was Charlie Light over on X.

• 1:29John Coogan?

  They definitely got a buzz going.

• 1:31Jordi Hays?

  And, uh, yep, a lot more people know about Astronomer today.

• 1:36John Coogan?

  100%, 100%.

• 1:37Jordi Hays?

  But hard to see how it would have been planned.

• 1:41Jordi Hays?

  There's been a bunch of jokes. Ryan Peterson said, board should give him a raise. Without this viral moment, I'd never know that Astronomer is used by enterprise clients to manage Apache airflow and achieve 70% higher uptime than self-managed airflow. So. Lots going on today. Alex Cohen says, imagine losing half your life savings at a Coldplay concert.

• 2:04John Coogan?

  Why half? Oh, because he's gonna get a divorce. Okay.

• 2:07Jordi Hays?

  It's very sad. These are adults that made their own decisions.

• 2:11John Coogan?

  Yeah.

• 2:12Jordi Hays?

  And they now have to live with the consequences, but I doubt either of them would have would have paid half their net worth for those tickets.

• 2:24John Coogan?

  Yeah, rough, very, very bizarre. I was reminded of what Emily Sundberg told us when she came on the show. I was asking her how the Hamptons has changed since the era of social media, the age of the internet. And she said that there are so many TikTokers documenting everything that happens in the Hamptons now that you can't even leave a party with someone else's wife. That's what she said to us. Do you remember this?

• 2:51Jordi Hays?

  Yeah.

• 2:52John Coogan?

  And I'm wondering, like, what does this actually mean for birth rates? What does this mean for? Like, this seems predictable at this point. This is the first one that's happened. I've seen these other videos.

• 3:04Jordi Hays?

  Having debate this morning, which is that find my friends is the best thing to happen to marriages. Monogamy, potentially ever.

• 3:12John Coogan?

  Yes.

• 3:12Jordi Hays?

  Because if you are in a committed, long-term relationship

• 3:14John Coogan?

  Yeah.

• 3:15Jordi Hays?

  and you do not want your partner to have visibility into your whereabouts, you can make a pretty bad argument for privacy. But it, but it, but it ultimately, it doesn't, it's really hard to stand behind.

• 3:29John Coogan?

  Yeah.

• 3:30Jordi Hays?

  I think it's potentially a really positive force against social media, dating app culture and things like that.

• 3:36John Coogan?

  Yeah.

• 3:36Jordi Hays?

  So the answer to technology problems is more technology.

• 3:39John Coogan?

  More technology, maybe. Yeah, it was like this, it's this countervailing force because like, what was it? Like Instagram is like constantly flooding you with like recommended, like, look at this girl, look at this random person, look at this thing. Look at, you know, like, go down this rabbit hole and then, and then find my friends is maybe pulling you back. But, I mean, he probably told, he probably said, I have to go for this for work or some client.

• 4:00Jordi Hays?

  This issue.

• 4:01John Coogan?

  Doesn't really fix this issue.

• 4:02Jordi Hays?

  Lulu.

• 4:02John Coogan?

  The Kiss Cam does. The Kiss Cam is a Lindy technology.

• 4:05Jordi Hays?

  So Lulu had some advice. She says, just giving out priceless

• 4:11John Coogan?

  Yeah, yeah.

• 4:13Jordi Hays?

  Crisis comms for the astronomer team. She says, don't bother with crisis comms here. The CEO will try to get you to protect him, but it's not his company. He's a temporary steward. Your job is to protect the company. The CEO is a professional manager who's only been there two years. The HR person has been there less than a year. Neither is tied to the identity of the company. Preserving trust is more important. Your business model is to handle sensitive data and your priority is scaling and that's tough to do when multiple known li- with multiple known liars on the senior leadership team. A better comms plan than trying to save the situation. Andy Byron is on the board, but he's not a founder, doesn't have control. The other five members should replace him. You can then use the new CEO announcement as a reset and get people to focus again on Astronomers' actual

• 4:56Jordi Hays?

  business instead of its drama. So, uh, we, uh, we did reset, we'd reach out, um, to, to Andy, uh, this morning to see if he wanted to tell his side of the story. Uh, felt, felt, uh, like an extremely, uh, you gotta be a little bit crazy like Sohom to wanna come on after you have the current thing.

• 5:14John Coogan?

  Yeah.

• 5:15Jordi Hays?

  Um, but, uh, in this case, we should have the new CEO on of Astronomer when, uh, whenever that comes. So there's a polymarket today on whether he'll be out by the end of next week. Uh, odds are currently sitting around 38%. Uh, I would not be surprised if there's, uh, somebody new, uh, stepping into the CEO role at the company. Uh, this seems to have been, um, a way, way bigger than just the current thing on X. It seems to have really, uh, broken containment, so.

• 5:49John Coogan?

  Is this a Databricks competitor? Like Apache Airflow, uh, is, uh, it says open source workflow orchestration platform used to programmatically author, schedule and monitor data pipelines? I wonder if their business is just exploding. DAG directed graphs.

• 6:08Jordi Hays?

  So, quite the lineup of investors. They've got Bain Capital Ventures.

• 6:12John Coogan?

  Let's go.

• 6:13Jordi Hays?

  Just led a Series D, uh, this year.

• 6:16John Coogan?

  Let's go.

• 6:16Jordi Hays?

  Intro Astronomer. So let's hit the size gun for that.

• 6:20John Coogan?

  It's probably a fantastic business.

• 6:22Jordi Hays?

  And then Insight is also, uh, led the Series C in March of 2022.

• 6:26John Coogan?

  Yeah.

• 6:27Jordi Hays?

  So, uh, pretty, Venrock was in the Series A as well. Uh, and then Sierra Ventures, uh, who I'm not familiar with, has led a couple of different financings. So. Yeah, this business has been around for a while. They're going to get through this. I'm sure that Bain Capital and Insight and the other members of the board are already figuring out who they can get to step up and run this company.

• 6:53John Coogan?

  Yeah, there just seemed to be some sort of line between like bizarre, salacious, but ultimately orthogonal to the core business drama and like actual core business drama, like some fundamental flaw in the business plan that's exposed. FTX or Theranos versus just this like, you know, drama that's happening here. I keep laughing about that analogy we go back to where if you found out that, you know, I think, what do I have? I have, what are Pilot Sport tires at Bridgetown?

• 7:31Jordi Hays?

  Uh, Michelin.

• 7:32John Coogan?

  Michelin, Michelin tires. So if you told me that the CEO of Michelin was, was, was caught at a Coldplay concert with the head of Michelin HR,

• 7:44John Coogan?

  it would be a tall order for me to go get new tires, right? I'd be like, the tires work pretty well. That issue doesn't really affect my tires.

• 7:52Jordi Hays?

  It's more, it's more so that the, uh, the difference here is that being caught is different than being on the Kiss Cam and getting 100 million views today. My post alone has a million views and I posted it a few hours ago.

• 8:12John Coogan?

  But do you think, do you think it's, it's, it's going to actually affect like revenue this month?

• 8:17Jordi Hays?

  I don't think, I don't think it will affect the business at all necessarily. Maybe a little turbulence because of needing to find new management and having some turnover.

• 8:24John Coogan?

  Certainly stressful weeks.

• 8:25Jordi Hays?

  Turnover, turnover on the, on the, on the exec team is going to be a challenge, but ultimately their customers are not going to, you know, say, hey, we're turning off, you know, we want out of our contract. If, if the product is good, maybe some people use it as an excuse.

• 8:42John Coogan?

  Sure.

• 8:43Jordi Hays?

  But yeah, I don't see this affecting the business. But then again, it's like, if you're Bain Capital or Insight, do you really want? Do you want a, he came in two years ago, it sounds like he's been executing, the team has been executing well. If they got from series C to D over the last couple of years, it means they're, they're probably growing nicely. But, and I don't necessarily think that, that this is the end of this guy, either of their careers.

• 9:09John Coogan?

  Yeah.

• 9:10Jordi Hays?

  It just should be the end at this company.

• 9:13John Coogan?

  Yeah.

• 9:13Jordi Hays?

  Cause if, cause if you're the board and you, and you tolerate this, that just means, yeah, we, we tolerate people of, you know, poor, moral character.

• 9:22John Coogan?

  Sure. Yeah.

• 9:25John Coogan?

  Also interesting, I mean, this company is like, we've never even heard of it and it's on an absolute tear, series D at this point. And does this not sound like something that should be in the AWS dashboard? Like we were talking about browser base yesterday, getting like quote unquote copied. And there's just something about these like point solutions that just are, you know, nailing a specific problem. You know, in this case, it's like deployment, deployment and management of an open source project. It's literally, anyone can just run Apache airflow. They just help you do it better. And that's kind of what Databricks did with Spark, like Spark's an open source project. Now they, now they, for these data pipelines, now they help companies actually install, manage, run them.

• 10:07John Coogan?

  And then put a bunch of software on top of it and Databricks has been massively successful. And so it's, it's interesting to bring it back to browser base because it just kind of reveals that like, these companies can be kind of grinding in silence for a while. Just, I guess the note for Paul Klein's probably stay out, avoid being the current thing.

• 10:29John Coogan?

  Because the, the failure mode could, could be less technical and more interpersonal.

• 10:35Jordi Hays?

  Yeah.

• 10:36John Coogan?

  I don't know.

• 10:38John Coogan?

  Anyway.

• 10:38Jordi Hays?

  Work retire die may have been inspired by my post.

• 10:42John Coogan?

  Okay.

• 10:43Jordi Hays?

  Or it could have been totally random, but he said, married CEOs can't even hug and romantically sway with their married head of HR during a cold play concert. Anymore because of woke.

• 10:53John Coogan?

  Oh, because of woke. Okay. Yes. Yes. Yes. Are there, is there anything else to cover on the?

• 10:57Jordi Hays?

  Sophie Netcap girl says it's so hard to get noticed as an AI company these days. The astronomer CEO had to cheat on his wife for marketing.

• 11:06John Coogan?

  Yeah.

• 11:06Jordi Hays?

  It's dark out there.

• 11:07John Coogan?

  I don't think, I'm not believing the tinfoil hat one on this one.

• 11:11Jordi Hays?

  If you've been living under a rock.

• 11:13John Coogan?

  Yes.

• 11:13Jordi Hays?

  Grok launched a NSFW anime mode to the app. Audio and visual. And I believe it's part of their, it's part of the paid.

• 11:23John Coogan?

  Yes, I believe it's $300 a month, something like that. There's a report in Wired about this. I wrote about XAI from Kylie Robinson, who's been on the show. I wrote about XAI's new creepy waifu bot and its even weirder companion Rudy, which has a bad version that told me, "All skull F your D blah, blah, blah. Very vulgar, not, not family friendly, not approved for this show." When I asked what it thought of Musk, it referred to him as Lord Elon and said, "He's a galaxy-brained egomaniac." I can't even read this. It's all bad words. But anyway, I am, I've been thinking about this and I, and I think that there is an interesting steel man argument that we should go through. So we should talk about it.

• 12:07John Coogan?

  So in general, I think that XAI's Grok strategy is a little bit all over the place. So they're trying to be super quantitative and benchmark build. They are, they're, they're super benchmark build. They're like, look, Arc AGI, the insiders, inside, the most insider AI test you can possibly have. We have the best score on it. We're on LM Arena. We're, you know, we're, we're, we're, you know, maxing out all these different benchmarks.

• 12:39Jordi Hays?

  That's right.

• 12:40John Coogan?

  So it's like, and it's like, it's this incredible engineering effort to build the 100K cluster. Like they're clearly hiring great talent. I know, and he keeps laughing seeing the.

• 12:51Jordi Hays?

  I'm just, I'm not gonna look at you. I'm not gonna look at you. That'll help me.

• 12:54John Coogan?

  So they're very, they're very benchmark build. But then they're also trying to do this like sassy and anti-woke thing in the, in the, in the post replies and like the fine tuning on top of that was so crazy that it spawned like the Mecca Hitler thing. So it's like they're, they're, they're kind of like all over the place. One is like super quantitative, super focused, super benchmark build, like just.

• 13:14Jordi Hays?

  But they're clearly kind of edgelord internally.

• 13:16John Coogan?

  Yeah, well, it's like, it's almost like two different extensions of the product, right?

• 13:20Jordi Hays?

  Yeah.

• 13:21John Coogan?

  Teams building towards two different goals. One is just like the most beautiful like solve physics, solve math, like create the, the create like a great AI product. Yeah, pursuit of truth, all that, like facts and usefulness and tools. And then on the other side, it's like, it's like fight this culture war thing, which is like a very different battle to be fighting. And then, and then we saw this last week after the launch, there was, there was a new, uh, there, there was news that everyone was memeing because it seemed like it was very, uh, very opposed. So one was that Grok had signed a contract with the Department of Defense. It's like as serious as you can get in AI.

• 13:58John Coogan?

  It's like OpenAI has one of those contracts, I believe Anthropic, Palantir, um, and then Grok, which is like this, from the outside, like seems like a chaotic, like pro- product.

• 14:09Jordi Hays?

  Something that was born on something like 4chan.

• 14:11John Coogan?

  Yes, exactly. All of a sudden, like the DOD is going to be adopting that. Like, what does that mean? And then simultaneously, there's like, they're getting into the romantic companion market with this anime theme. And so, AI companions, I think the general mood in tech is that it is a very dark thing. Like people get addicted to them. They become less social. They stop interacting with real people. They don't have kids and then the population collapses and humanity ends. Like that's the bad ending to the, uh, to the AI companion narrative. Now.

• 14:42Jordi Hays?

  And to be, just to give you some context, uh, there's a variety of companies that do this today.

• 14:48John Coogan?

  Exactly.

• 14:48Jordi Hays?

  Varying levels of, uh, vulgarity.

• 14:51John Coogan?

  Yep. Replica. We've actually talked to the founder and she had a bunch of nuance around it. So I, I don't.

• 14:58Jordi Hays?

  And just for context, so Replica has over 225,000 reviews in the App Store.

• 15:05John Coogan?

  People are definitely using it.

• 15:06Jordi Hays?

  Friends. They were very early to this.

• 15:07John Coogan?

  Yeah.

• 15:07Jordi Hays?

  Character AI was also early to the AI companion space, has tens of millions of, of users. It's, it's one of the biggest websites in the world.

• 15:17John Coogan?

  Yep.

• 15:17Jordi Hays?

  Still. Um, and, uh, so anyways, there's a variety of players in the game, but what's interesting about Grok is when you look through the other labs from Lama to, uh, Google or, or sorry Meta. Superintelligence to Google, to Anthropic, to ChatGPT, OpenAI, etc. Nobody has been willing. Everybody knows that this is a use case that there's an obscene amount of demand for.

• 15:42John Coogan?

  It's a clear market.

• 15:42Jordi Hays?

  But no one else had the guts to go and do it, at least a player that had billions and billions of dollars

• 15:51John Coogan?

  Yes.

• 15:52Jordi Hays?

  to deploy against a strategy like this.

• 15:54John Coogan?

  I believe at this point, every other company that's playing in the companion space is not, should not be considered really like a mega-scale research lab, in the sense that they're not raising billions of dollars anymore, because Character went through that zombie Aqua hire that probably cut off the capital canon.

• 16:13Jordi Hays?

  Yeah.

• 16:14John Coogan?

  Such that even if the RemainCo employees, the ghost ship, I don't want to call it, I mean, it's kind of rude to call it a ghost ship, because it seems like the employees at Character AI are, you know, running it happily and doing fine. But it doesn't seem like the new CEO of Character AI will be able to go out and be like, I'm raising $5 billion to build a 1 gigawatt cluster and I'm gonna buy 100k GPUs to train my own model. Like, Character will be built on top of other APIs.

• 16:37Jordi Hays?

  In fact, they're probably trying to just run it profitably.

• 16:40John Coogan?

  Yes.

• 16:40Jordi Hays?

  And make a great user experience.

• 16:42John Coogan?

  Yeah, and so you'll always have this kind of, this kind of back and forth with like your API provider, because the API providers, the foundation labs, they care about their brand, they care about how they're perceived in, as being ethical or moral. And so they might not want to offer that, even at the API level. So, what's interesting, and this, and this is where like the steel man comes in, so the, the worst possible outcome for AI companions, very dark, people, you know, it basically reduces the, the coupling rate. But we've already seen a decline in, in birth rates. So it's not, so it's unclear if it's like, this is a new thing that will accelerate it, this is status quo. Anyway, I think, I think that's kind of like where most people feel.

• 17:25Jordi Hays?

  The concern would be like pornography has existed as long as the internet.

• 17:29John Coogan?

  Online dating is another thing that people are skeptical about.

• 17:32Jordi Hays?

  As long as the internet has existed, I'm sure that has led to some not so great outcomes.

• 17:38John Coogan?

  Yeah.

• 17:38Jordi Hays?

  The concern is that companions that are real time and adaptive and really mimicking a human would create even worse behaviors than traditional NSFW content.

• 17:50John Coogan?

  And I think that's a reasonable point, although it hasn't been borne out in like data or any sort of like research at this point. But it feels intuitively reasonable, but.

• 17:59John Coogan?

  Let's actually think more about the market because in order to scale your lab, we know that you can't do it as a nonprofit. We know that it's not just a hundred million dollar donation, one time, a bunch of geniuses working, you come up with the elegant algorithm for superintelligence. You need scale, you need capital, you need talent, and ultimately, you need a capitalist flywheel of corporate, for-profit corporation that's increasingly getting more users, putting that into user adoption to get more users, to get more data, to train the model, to refine the product.

• 18:30Jordi Hays?

  So you can save the world.

• 18:31John Coogan?

  And, yes, and then, yeah, this is where I'm going. And then, and then also raise more money. And then, if you're going to raise money at a certain level, there has to be a financial, like, model that maths out. Now, it can be kind of funky, like 1% of AGI, but there are still on the margin, many investors in foundation labs that are underwriting, you know.

• 18:54Jordi Hays?

  Well, I was asking a question last week.

• 18:55John Coogan?

  They're underwriting these labs out of multiple of earnings.

• 18:58Jordi Hays?

  Well, yeah, where, where's Grok's revenue going to come from? ChatGPT has a great consumer, you know, consumer business.

• 19:04John Coogan?

  I would say OpenAI owns.

• 19:06Jordi Hays?

  Codegen.

• 19:06John Coogan?

  Yeah, I would say OpenAI has dominated and owns knowledge retrieval. Anthropic owns CodeGen, and they both have kind of flywheels that are accelerating. And now, they're obviously fighting it out. Anthropic would love the Claude app to become really popular, and ChatGPT would love to have their cursor competitor or their Claude code competitor, Codex, really, really take off. Maybe that'll happen. They're duking it out. Meta is building on top of the world's biggest social networks in the world. They have three of them, really. Facebook, Instagram, and WhatsApp. So they have a ton of data that's accumulating and firing back, and they have tons and tons of cash, cash flow coming in from that so they can justify new CapEx internally without raising.

• 19:47Jordi Hays?

  Meta's one of the, they had launched AI companions, but it was like, talk to Dwayne Rock the Johnson, or Dwayne Rock Johnson.

• 19:56John Coogan?

  Dwayne, Dwayne Rock the Johnson.

• 20:01Jordi Hays?

  Dwayne The Rock Johnson, and I don't, and I think that product flopped back in the day. I remember because Dara Delphi saw the launch.

• 20:10John Coogan?

  Yes.

• 20:10Jordi Hays?

  He was like, dang it, that's annoying.

• 20:12John Coogan?

  And at the same time, I saw some screenshot that showed that there was an Instagram account that was owned by like Meta AI that was just cow and it had like millions of interactions. So like, maybe people want to talk to just a cow more than they want to talk to The Rock.

• 20:24Jordi Hays?

  I think that's very possible.

• 20:25John Coogan?

  So, but, but yes, but at the same time, I think that the Meta super intelligence team is aware of the issue that will come from the inevitable New York Times profile on like, if it's truly like anime waifu romantic companions, that's a step further than cow or The Rock, right?

• 20:43Jordi Hays?

  And one thing is it-

• 20:44John Coogan?

  And there actually was, remember the John Cena thing we covered? How someone had jailbroken the John Cena Instagram AI and made it like romantic? Remember this? Yeah. So like, I think Meta is like, is like, we're fine seeding that territory. Like, like, we don't need to play in that. Just like, they don't need to show NSFW content on Instagram. They're like, we're fine losing the market, seeding that market to, to OnlyFans on a, on an ethics basis. We think that it makes our company more valuable overall. It makes it more hospitable to our advertiser community.

• 21:19Jordi Hays?

  And so, the reason that, just to, just to kind of bring us back to why this has been such a hot topic is that Elon Musk has, has posted many, many times about the underpopulation crisis, the birth rate crisis. He said, Sheil highlighted a post from 2022, "A collapsing birth rate is the biggest danger civilization faces by far." So the steel man is that Elon is doing something about it.

• 21:44John Coogan?

  Yes.

• 21:44Jordi Hays?

  Right?

• 21:44John Coogan?

  Yes.

• 21:45Jordi Hays?

  He's having a lot of children.

• 21:46John Coogan?

  But, but, but the real steel man about Grok romantic companions is that, how will they actually increase the amount of humans in the world? How will they reverse the population crisis? That's the hardest argument to make and that's why I'm wearing the steel helmet because it's a very hard argument to make, but I have one, so.

• 22:03Jordi Hays?

  And Sheil, for the record, is saying, "I think Grok companions is probably accelerating population collapse."

• 22:08John Coogan?

  Yes, so as the steel man, I'm going to be debating against Sheil. So

• 22:13Jordi Hays?

  Get ready, Sheil. Get your straw man hat on.

• 22:16John Coogan?

  Last of the labs, Google, they're building on top of the biggest search engine and they also have YouTube. And Google, you also know, is not going to go into romantic companions. So

• 22:26John Coogan?

  and so XAI needs this user flywheel and every other lab has self-selected out of competing in the in the companion space. We went through some of these. Google famously skipped the character AI product in favor of the team in their zombie aquahire, Paul Graham. And so this is all about, in my mind, as the steel man, counter positioning. So you remember, Avi Schiffman was releasing the, a new hardware device, an AI friend, right? And he was, everyone was saying, you're going to get steamrolled by Apple. Like, if you try and come out with a company, with a product that is in fact a new device that fits within the Apple ecosystem and it's leveraging the

• 23:08John Coogan?

  the Apple branding world, you will just immediately get cooked by Apple because they will just eventually launch a better version and they'll have better supply chain, better pricing, all the different things. You'll have the full integration. Like, you you can't go after them that way. And so Paul Graham replied to Avi Schiffman and said, and said, here's how to compete with Apple and hardware. You have to build something that contradicts their fundamental assumptions. For example, imagine if you built a device whose appeal was that you could customize the case to make it as tacky as you wanted. Apple would hate to follow you there. So no other lab wants to follow XAI into the romantic companion market for brand and ethics reasons.

• 23:52John Coogan?

  But there are users who will pay real money and share real training data for romantic companions as a product. And so if you want to sell the most number of Grok subscriptions, at some point, you will be, and so this is where we get back to how it affects the birth rate. So if you want to sell the most number of Grok subscriptions, at some point, declining birth rates are going to be a problem for you.

• 24:14Jordi Hays?

  Your business.

• 24:14John Coogan?

  You're going to hurt your business.

• 24:15Jordi Hays?

  Yeah.

• 24:15John Coogan?

  And so you're going to have to think about.

• 24:17Jordi Hays?

  And right now, for context.

• 24:18John Coogan?

  Yes.

• 24:19Jordi Hays?

  Grok is blowing up in Japan.

• 24:22John Coogan?

  Yes.

• 24:22Jordi Hays?

  It is the number one free app on the Japanese App Store. It is above ChatGPT and all the different local products that I can't read the names of. So it is dominating in Japan. It's a hit in Japan already.

• 24:34John Coogan?

  Yes.

• 24:35Jordi Hays?

  And it's not. To me, it's not hard to imagine this product finding a million people in the world that will pay the ultra-premium plan.

• 24:47John Coogan?

  Yes.

• 24:47Jordi Hays?

  And that is billions of dollars of revenue.

• 24:49John Coogan?

  Yes. And so, at some point, if Grok gets big enough and the population's declining, and Elon looks at what the Grok product is doing.

• 24:59Jordi Hays?

  Saying, "What have I done?"

• 25:00John Coogan?

  He will say, "I need to pull people back from the abyss. I need to actually use my superintelligence to increase the birth rate. How will you do that? Well, we've talked about this before. Someone in, some woman is talking to a male companion, AI, and some man is talking to a female AI companion, and they're very similar. And Grok says, "Why don't you two meet for coffee in the real world?" And so, they actually meet, and it basically turns into the best dating site that actually gets people to get off. It's a stretch, and it's why I'm wearing the Steel Man helmet. But I think it is possible, and I think the economic incentives might be there. I think this is the same reason why you don't want to over-optimize

• 25:43John Coogan?

  a social network for slop and brain rot, because people will churn. Like, you might be able to keep the time on site going for, by showing horrific videos. You can't look away. "Oh, it's so controversial. You're miserable." And you might be able to keep someone on, and they were going to use the app for 15 minutes. You keep them on for an hour, but then they're like, "You know, I need one of those apps to monitor my screen time. I need to uninstall it." Maybe I'll, and then if they do that, they can actually quit it. And if they actually quit, then you lose them as a user forever. So, there's this balancing act between, between giving people enough brain rot to keep them on the site as much as possible and not losing them forever. And the same thing happens in romantic companions. Like, you want to give them the companion that like, like they pay for and they're happy with,

• 26:26John Coogan?

  but not so, you don't want to make the companion so good that they don't reproduce, and then the second, the next generation doesn't exist for you to sell them subscriptions.

• 26:34Jordi Hays?

  Fortunately, John, businesses tend to think in quarters and yearly increments.

• 26:40John Coogan?

  It's a private company. Elon owns a lot of it.

• 26:43Jordi Hays?

  You think he's thinking about the next, the next generation?

• 26:45John Coogan?

  That is the Steel Man.

• 26:46Jordi Hays?

  No, I mean, the, the... I can, I believe this will be by far the largest revenue line item for XAI within, if it's not already. I mean, already might be a stretch. They have some big contracts, but this is a $300 a month plan if you want, you know, unlimited access to your Grok companion. And Elon was demonstrating to it, it can even help you study for school. So imagine a companion that's not just a, maybe a romantic friend, but also can help you pass your algebra test.

• 27:23John Coogan?

  Well, that concludes the Steel Man.

• 27:26Jordi Hays?

  The Steel Man segment.

• 27:27John Coogan?

  And I'm back to the normal world.

• 27:29Jordi Hays?

  Great, great work, you know, keeping a, keeping a straight face and really, really getting out your.

• 27:35John Coogan?

  The Steel Man, I think this is, I think it's valuable to interrogate this stuff. I think it's interesting.

• 27:41Jordi Hays?

  Yeah, the other, the only other, the only other thing that I would add is the unique thing about this launch is that there has never, you know, clearly many people around the world spend money on OnlyFans or other NSFW content and, but Elon has never created a product for those type of people. And so I think the sort of latent demand that would, would feel maybe above, you know, paying for, for OnlyFans or something like that, likely would, would give themselves like the pass on something like this to be like, oh, I'm just, it's just one of the Elon companies. I'll sign up for it.

• 28:22Jordi Hays?

  I trust, I trust Elon. I have a Tesla. And then suddenly there's like an entire new market of people that are willing to, you know, put their credit card down and pay for something that previously they wouldn't for a variety of reasons. So.

• 28:36John Coogan?

  Totally. Yep.

• 28:37Jordi Hays?

  This will be one to follow. How's it doing in the US App Store?

• 28:40John Coogan?

  I don't know. I mean, it's all, most of my Grok interactions are within X. My primary use case is still, I see a post and then I go and I, and I click on the little Grok button and it explains exactly.

• 28:57Jordi Hays?

  Yeah, so it's the number two app. It's still behind ChatGPT.

• 29:00John Coogan?

  In productivity.

• 29:01Jordi Hays?

  In productivity.

• 29:02John Coogan?

  I'm surprised it's still in, it's funny, in productivity. I'm surprised, I'm actually surprised it is in productivity because X is famously in news, not in social networking. And so X will typically be at the top of the news subcategory because it would be much harder to compete in the product, in the social networking category against Instagram and TikTok. And so better to be a big fish in a small pond in some, in some way.

• 29:31Jordi Hays?

  Cognition has signed a definitive agreement to acquire Windsurf.

• 29:34John Coogan?

  Let's go.

• 29:35Jordi Hays?

  The acquisition includes Windsurf's IP, product, trademark and brand, and strong business. And above all, it includes Windsurf's world-class people.

• 29:44John Coogan?

  No way.

• 29:44Jordi Hays?

  We've privileged to welcome to our team.

• 29:46John Coogan?

  The whole team, that's amazing.

• 29:47Jordi Hays?

  We are also honoring their talent and hard work in building Windsurf into the great business it is today. This transaction is structured that 100% of Windsurf employees will participate financially. They will also have all their vesting cliffs waived.

• 30:01John Coogan?

  What?

• 30:01Jordi Hays?

  And will receive fully accelerated vesting for their work to date.

• 30:04John Coogan?

  Let's go.

• 30:05Jordi Hays?

  At Cognition, we have focused on developing robust and secure autonomous agents while Windsurf has pioneered the Agentic IDE. Devin and Windsurf are a powerful combination for the developers we serve. Working side by side will soon enable you to plan tasks in an IDE powered by Devin's codebase understanding, delegate chunks of work to multiple Devins in parallel, complete the highest leverage parts yourself with the help of autocomplete and stitch it all back together in the same IDE. Cognition and Windsurf are united behind a shared vision.

• 30:32John Coogan?

  It makes so much sense.

• 30:33Jordi Hays?

  For the future of software engineering, we've never, and there's never been a better time to build. So there's a video up between Scott Wu and Steve over at Windsurf and we're hoping to have them on the show later today if we can coordinate.

• 30:46John Coogan?

  That'd be awesome. Yeah, that'd be great. Cool.

• 30:48Jordi Hays?

  So anyways, this apparently Scott got to work like Friday and not only negotiated, I mean, to do this kind of deal during all of the chaos of this other deal that's happening and then put together a deal that delivers a win for every member of the team.

• 31:05John Coogan?

  That's amazing.

• 31:06Jordi Hays?

  And the other thing that's interesting here is, you know, historically cognition had, I wouldn't say over invested in engineering, but they were heavily, heavily skewed towards technical talent.

• 31:16John Coogan?

  Sure.

• 31:17Jordi Hays?

  And the people that got left behind at Windsurf were sales, enterprise, account management, GTM, right?

• 31:25John Coogan?

  That's a crazy fit.

• 31:25Jordi Hays?

  And over the weekend, I'd heard other teams that were kind of circling, wanting to Hoover up their GTM team, but the fact that they were able to get this deal done in just a couple of days is fantastic.

• 31:37John Coogan?

  This is incredible.

• 31:38Jordi Hays?

  So.

• 31:38John Coogan?

  Wow. What a fantastic end to the story.

• 31:40Jordi Hays?

  Or a beginning, a new beginning.

• 31:43John Coogan?

  Yeah, new beginning, new beginning, for sure. I don't even know if we should go through the full history here. We can kind of go through whatever, but I mean, you kind of know the end of the story, but I think we should take you through some of the debate that rose up. And there's still the question of like, even though it feels like everyone got the good ending, there still is this question about like, we're in this weird zombie structure era where you can be left in limbo. What is the cost of that? What is the risk to that? Do we need new employee contracts? Do we need new understanding of how, of expectations?

• 32:19Jordi Hays?

  Yeah.

• 32:20John Coogan?

  Because it's one thing for a CEO to say, hey, I'm building, I'm trying to build something really cool in Silicon Valley. I'm going to build a tech product and I want you to join me as a salesperson, operations person, an engineer, whatever. And we're going to go on this journey. We're going to go really hard and we want you, we all want to be aligned with like thinking long term. So we're doing a four-year vest with a one-year clef, pretty standard. And the expectation, at least the history has been like, like you will have clarity throughout that process. And now that we're in this weird, weird regime, like you're getting like, okay, the last, the end, the end of the, the last chapter of the book could be really dramatic, but... We got the good ending and the question is like, has there ever been, if this, this deal

• 33:05John Coogan?

  kind of exposed the risk of like the bad ending and that it is possible that that could happen, it didn't in this case. But the big question I think people are debating is like, how much of this is, is due to the chaos? How much of the chaos is a function of FTC? And, and the antitrust regime and Ben Thompson talked about that a lot versus just the differences in communication styles of different Mag7 companies? That's interesting. The experience of CEOs, like you look at the way Scale AI handled it, Alex Wang is, he's a generational communicator, he's been on Theo Von. Yeah.

• 33:42Jordi Hays?

  Yeah, different dynamics.

• 33:43John Coogan?

  Great guy, but it's newer.

• 33:44Jordi Hays?

  Lead an acquisition.

• 33:46John Coogan?

  Totally.

• 33:47Jordi Hays?

  Having, having that sort of founder mode confidence, right? Fully in control of the company. And, you know, it, it, you know, everything, you know, we've heard from various parties says that Varun was muzzled, but again, you like, everybody involved should have been saying, how do we avoid making it so that hundreds of people don't feel like they've been, you know, completely screwed, even for 24 hours?

• 34:11John Coogan?

  Yeah. And the evidence that was overwhelming, like, like the people, you would see likes on your post.

• 34:17Jordi Hays?

  People were mess, people were messaging me Friday and Saturday morning saying, the Windsurf employees got screwed.

• 34:22John Coogan?

  Yep.

• 34:23Jordi Hays?

  And I was messaging them back and being like, you're misreading this. This is the standard deal that they've always done. And then the overwhelming amount of more information from high quality sources saying, no, they're screwed.

• 34:35John Coogan?

  Yeah.

• 34:36Jordi Hays?

  It, it just flipped and I said, okay, maybe, maybe they are, right? And the key, so now we don't, we had this whole other kind of tangent that we were going to go down, which was like, what happens to the ghost ship, right?

• 34:46John Coogan?

  Yeah, yeah, yeah.

• 34:47Jordi Hays?

  It could potentially be this like Lord of the Flies dynamic where there's now hundreds of people that are still working on Windsurf, but the competitive pressure is insane. You're losing a lot of your top talent and your founders. Are you going to be able to keep momentum or is churn going to be crazy?

• 35:01John Coogan?

  Totally.

• 35:02Jordi Hays?

  And, and then do people try to stay a long time so they can get like a distribution? Or do some people leave because they want to pursue other opportunities?

• 35:10John Coogan?

  Yep.

• 35:11Jordi Hays?

  And now we don't have to debate that because Windsurf is home with cognition and, and Scott Wu.

• 35:17John Coogan?

  And you know the best part about that?

• 35:19Jordi Hays?

  What's that?

• 35:20John Coogan?

  Everyone, all those employees who are now onboarding Cognition.

• 35:23Jordi Hays?

  I know exactly what you're gonna say.

• 35:24John Coogan?

  They're getting Ramp cards, baby, cuz Scott.

• 35:27Jordi Hays?

  Time is money, save both.

• 35:29John Coogan?

  Easy to use corporate cards, bill pay, accounting and a whole lot more all in one place. Go to ramp.com to get started. And you know, Cognition has a huge lineage with the Ramp team. And so we're very, we're very excited for Cognition. We're very excited for Ramp and we're excited for all of the Windsurf employees who landed. Well, this is funny because there's so much that we should, that we could go through. I think we should go through a little bit of the timeline of like, what actually happened? How people, how the debate evolved because it is very interesting. So the, the context of like, why is Windsurf selling at all? And I think this big question, the first one is, let's just say hypothetically, you owned 100% of Windsurf last week.

• 36:12John Coogan?

  And let's say a completely financial investor comes to you, not if there's no even like, big tech dynamics, it's like Warren Buffett, he calls you up and says, I want to buy 100% of your stake.

• 36:22Jordi Hays?

  Warren needs, he's like, these agentic IDEs? I need it, I need it, I have to have one.

• 36:28John Coogan?

  I have to have one, yeah.

• 36:30Jordi Hays?

  I wanna buy, I wanna buy a great business at a fair price. Let's do a deal.

• 36:35John Coogan?

  So that's the question is, is like, if you were, if you owned 100% of Windsurf, Jordy, would you sell at $2.4 billion last week? And I think for most people, the answer has increasingly become yes. And there's a few reasons. So the last, the last big post that Varun, the CEO of Windsurf had interacted with on X, was this post by Technium who says, Windsurf wrecked. And it's a quote of Nick saying, breaking, Anthropic just pulled the rug on Windsurf. Windsurf will be cut off direct, will be cut off from direct API access to Claude in less than five days. 3.5 Sonnet, 3.7 Sonnet, 3.7 Sonnet thinking. Windsurf never even got direct access to Claude for anyways.

• 37:20John Coogan?

  And so this has been the question of, you know, how much, like if you are in this like rapper business, I think it's, I think it's a great product. I think it's, I think it's great, I think I'm. I'm actually very excited about about rappers, but there is this, there is this, there is this competitive dynamic with the underlying foundation lab. And Anthropic does seem to be more aggressive about where the value accrual will happen. So, you know, if it's, if it's 50 50 by default, all of a sudden Cursor and Windsurf start pulling 80% of the gross margin dollars from what they're adding on top. Well, then the underlying foundation model is going to say like, hey, like, let's pull this back. Let's make sure some of those credit cards live in our Stripe account.

• 38:01Jordi Hays?

  Yeah.

• 38:01John Coogan?

  And you're not just paying us big API fees. And so there was a big debate about this. Cursor had to go through it. Windsurf had to go through it. And Varun responded this and had, and had a good analysis and was, and was basically making the case that like, we can get through this. And I think that's true. I, I, I think there's totally a world where it gets true. But to your, you, you were saying earlier, like, it is an extremely competitive market. They were not the number one product in the market. That's Cursor and by most accounts.

• 38:29Jordi Hays?

  Yeah.

• 38:29John Coogan?

  And so, and so they were in a, you know, not a super tough spot. It's a great growing market. It's, it's, you know, it's developer tooling. How many, how many, you know, database software enterprise SaaS products are on the public market?

• 38:41Jordi Hays?

  Yeah.

• 38:41John Coogan?

  There's like, there's like, like the seventh one is probably worth 10 billion, right? So it's not like they couldn't have gone higher than 2.4, but 2.4 billion feels like a great deal for a company, for a product that's one years old, one year old. For a company that's four years old and a hyper competitive space with

• 38:59Jordi Hays?

  Product that launched

• 39:00John Coogan?

  Less than a year ago and your direct suppliers are trying to come for you and getting aggressive. And so this went out on Hacker News. Not sure how much you should read into it, but they said, Webserve is absolutely dead in the water. And while Cursor hangs on for now, all value is going to go back to the models, says Jake. In my opinion, other than the Microsoft IP issue, I think the biggest thing that has shifted since this acquisition was first in the works is Claude Code has absolutely exploded. Forking an IDE and all the expense that comes with that feels like a waste of effort. Considering the number of free slash open source CLI agentic tools that are out there. Let's review the current state of things. Terminal CLI agents are several orders of magnitude less money to develop than

• 39:39John Coogan?

  working an entire IDE, Claude code is dead simple to onboard, use whatever IDE you're using now with a simple extension for some UX improvements. Anthropic is free to aggressively undercut their own API margins and middlemen like Cursor in exchange for more predictable subscription revenue and training data access.

• 39:55Jordi Hays?

  Yeah, so the other context here is this year Anthropic, you know, Windsurf went from zero to somewhere around a $40 million run rate.

• 40:03John Coogan?

  Yep.

• 40:03Jordi Hays?

  Anthropic this year has gone from the beginning of the year to one to $4 billion. And so they, you know, however you want to say that they've been running, running away with the market. And Cursor's revenue is equally incredible, although starting from a smaller base.

• 40:21John Coogan?

  And so this was some of the like, okay, things might be getting tougher from here on out.

• 40:26Jordi Hays?

  Yeah.

• 40:26John Coogan?

  I don't know that I fully agree with that, but, but people were saying this. And then we covered this last week, but the meter team did these evaluations where they ran a randomized control trial to see how much AI coding tools speed up open source developers. And what they found was that developers said that they expected products like Cursor and Windsurf to improve them by 20%, but they were actually 19% slower. And so you have this weird dynamic where, okay, maybe the future is like, so I don't know how real this is. I think that we could totally be in a world where Cursor is incredibly valuable for less experienced developers working on more vibe coding projects than like

• 41:11John Coogan?

  pushing the, pushing the frontier of really advanced projects. And then also just the next, the next version of these tools could be really cool and solve this problem. But there was some worry that maybe developers were going to take a hard look at their AI coding IDE stack and say, wait a minute, like, I'm kind of using this too much. I'm leaning on it too much and maybe I should just like go back to the old way. So there were some, there were some, there were some reasonable points around like, maybe now's a good time to exit.

• 41:44Jordi Hays?

  Right?

• 41:45John Coogan?

  Then so so after so after that, the question becomes when you sell, you have the board has a fiduciary duty to shareholders.

• 41:55Jordi Hays?

  Yeah.

• 41:56John Coogan?

  And the big question that I think everyone was actually debating was this concept of was the windsurf deal with Google, a Pareto improvement for all stakeholders, which means in a Pareto improvement, basically, you can think of like the baseline is how everyone's doing in a Pareto improvement, some people might go up a lot, other people might go up a little in in value, but no one is going down, not a single person is going down. This is the goal of like all political legislation. You want to create things that are not just positive sum in the sense that like, you know, I tripled my net worth and you only lost half like that sucks, right? You don't want that. Pareto improvement is like, I tripled, you doubled. Yeah.

• 42:34Jordi Hays?

  We both won.

• 42:34John Coogan?

  But we both won and we're both happy. Right? And so in in a in a good acquisition deal, everyone is it's a Pareto improvement. Everyone gets more than they than they, you know, had before. Everyone gets paid out. Then the flip side is something called Caldo Hicks improvement and a Caldo Hicks improvement is where some people go up, other people go down, but when you sum them, it's still a net improvement. So very few people were saying like, you know, the VCs, even when you add up the VCs and the employees and the founders, it's a net loss for everyone. Very few people were making that argument.

• 43:10Jordi Hays?

  And to be clear.

• 43:11John Coogan?

  The employees got hosed.

• 43:12Jordi Hays?

  It seems like everybody would have done better.

• 43:14John Coogan?

  Yeah.

• 43:15Jordi Hays?

  On an open, everybody would have done better on an OpenAI acquisition.

• 43:18John Coogan?

  Probably.

• 43:19Jordi Hays?

  And so when the 2.4 billion number came out in on the evening of Friday, it seemed like, okay, not as great. It's still, everybody's going to do well.

• 43:30John Coogan?

  Yeah.

• 43:30Jordi Hays?

  And then 24 hour, 24 hours later, it was, oh, wow. Like this might have been structured in a very funky way that, you know, people were, I won't, I won't report the number, but people were messaging me information on how much Varun personally made, and that was still in the context of.

• 43:48John Coogan?

  You can just do the rough math. Founder stake, couple of rounds of dilution. How much do you think he made? Right? Like, it's not rocket science to figure. Or at least ballpark it to the right order of magnitude, right? But you build a great product that gets some traction, that solves some problems and you you you build a great team and big tech wants you like you, you know, I I I'm not upset about it. But the question was like, what's fair for the employees? What's fair for? You know, all the different stakeholders. And so a lot of people kept coming out with really interesting stories. So William Allen here has one about Scott Belsky and Behance going to Adobe, we should read through. So William Allen says, I don't think he's ever told the story, but it's worth telling.

• 44:32John Coogan?

  When we were selling Behance to Adobe many years ago, Scott Belsky made a spreadsheet of every employee, thirty two of us at the time, and personally negotiated each person's title, salary and incentive structure, and made that part of the overall deal terms. I'm gonna choke up. It's so virtuous.

• 44:52John Coogan?

  I heard the phone calls where he went to bat for each individual. He he not only, he not only didn't have to do this, but it actually complicated some of the other factors in the deal, of course. It changed the trajectory of so many people's lives, including my own. Two years later, one hundred percent of that original team was still at Adobe. Even today, a dozen years later, many of the core members are still there building. I was inspired by it then, and I'm inspired by it now. And so I think that was a good, a good case study in like, the founders do have a lot of hard power in the sense of board control and and actual voting shares.

• 45:31John Coogan?

  Almost every founder can veto a deal, which gives them leverage to build that spreadsheet and actually decide who gets what. And then on the flip side, they have a ton of soft power. Because you can't really do a hostile takeover of a private VC-backed company where the founder has board seats and stuff. It just doesn't work. And so it's incumbent upon the CEO to actually take that step. And that was the fear, that Varun didn't do that, that he didn't go far enough.

• 45:58Jordi Hays?

  Yeah, there was another, there was another example from Pars, Ilya Sukhar's company. So one of his former employees says, we got news. Our startup was being acquired five days before my one-year cliff. I thought I'd get nothing. Our shares were accelerated to 100%. It was a life-changing event and I'll always appreciate that our founders did the right thing for us at Parse. And said, Ilya, Ilya quoted it and said 100% acceleration for everyone but the active founders. We went backwards and re-vested our vested. Glad someone remembers, so.

• 46:29Jordi Hays?

  Very heartwarming.

• 46:31John Coogan?

  Yeah, and so people were, people were debating, you know, did, like, was the core team taken care of? It felt, it felt very rough. But then, pretty quickly, it came out that, so we were going back and forth on this on Saturday. And, and, and the core, the core debate, like, your post went pretty viral. You got 2 million views, 4,000 likes. And it, and it definitely struck a chord. Folks were debating this one line. From what I've heard, the employees are getting screwed regardless of their vesting status. And it's like.

• 47:08Jordi Hays?

  And that was because people had, people were on a four-year vest.

• 47:12John Coogan?

  Yes.

• 47:13Jordi Hays?

  But they hadn't hit their cliff, even if they had joined 11 months ago.

• 47:16John Coogan?

  Yes.

• 47:17Jordi Hays?

  And had, again, they had worked on the product up until launch. Launched the product, scaled it.

• 47:22John Coogan?

  Yep.

• 47:22Jordi Hays?

  Thought that they were getting this three, you know.

• 47:24John Coogan?

  Yep.

• 47:25Jordi Hays?

  Massive outcome, in which, again, they, some people would have not been able, I'm, I'm sure OpenAI wouldn't have kept everyone.

• 47:31John Coogan?

  Yeah, totally.

• 47:32Jordi Hays?

  I'm sure that they would have made a bunch of people effectively.

• 47:36John Coogan?

  There's, there's always layoffs post-merger acquisitions, like, that happens all the time. That's not, that's not a crazy thing, so. Certainly reasonable. I mean, the other question is just like, you know, if you worked at this company and you were like, I like working at this company. I, I really would love to work at Google, and you don't get carried along, like, that is getting screwed. Like, not getting a job at Google in some ways is getting screwed. Even just the ambiguity over the weekend is a little bit of, like, a screwing. And so, I still will defend your initial characterization. But I thought that there were things that could potentially shift the narrative, and so I quote tweeted yours with the steel man argument, which is one.

• 48:13Jordi Hays?

  And we tried to get a. A knight in shining armor suit.

• 48:19Jordi Hays?

  We were getting the steel man suit ready, but then we knew we didn't have to.

• 48:22John Coogan?

  We will, the production team will get the steel man suit of armor eventually. We need to order from a prop shop.

• 48:30Jordi Hays?

  Yeah, it's on the way. We're working on it.

• 48:32John Coogan?

  Yeah, okay, we're gonna and just make sure it's great when it comes. And so I had three points. One was that employees who haven't reached a one-year vesting cliff don't have that strong of a claim around. I built this with sweat and need a liquidity event and we don't know the ten years of all the left behind employees. So there is an argument that like if you joined three months before, it was already like really big. Like, should you really get accelerated four years and like?

• 48:56Jordi Hays?

  Oh, and I never would have made that argument, but it was a fact that you could have worked there for 11 months and gotten zero. And it's like, no, you're getting a ride on the ghost ship now. Ride the ghost ship into the sunset. And that was in the context of the founders and this is why people in group chats and DMs were getting so angry. Because it was in the context of, you know, somebody that worked for you for 11 months was potentially going to get zero. Now that's not the case now, but and then you're walking away effectively defecting and taking a multi hundred million dollar payday.

• 49:30John Coogan?

  It is a weird dynamic with these startups because clearly, I don't know exactly what Windsurf's headcount was. I think everyone was saying it was around 500 at the time of this deal. And a year ago, pre pivot, what do you think their headcount was? Couldn't have been more than 50, right?

• 49:47Jordi Hays?

  Definitely not.

• 49:48John Coogan?

  So you're looking at a 10x increase in employees who haven't really been like, they've been on this rocket ship. So I think, I personally think they totally deserve liquidity and accelerated vesting, which it sounds like they're getting. And it sounds like they're going to do great. But it is like not the nature of the initial contract, which is like one-year cliff, four-year vest. Like if it came out that it was like, okay, they're getting paid out to the tune of, you know, how long they've been there. I don't think anyone would be like that upset, but then somebody was making a good argument that basically. Like you, when you sign up with like a four year vest, you're saying, I'm going to keep working for four years. If you sell the company and put me on some zombie ghost ship, like I didn't bail, you bailed.

• 50:33Jordi Hays?

  Yeah.

• 50:33John Coogan?

  So you, so you should, you should accelerate me. And I, I actually think that that.

• 50:37Jordi Hays?

  Yeah. And the other, the other dynamic here was, um, so when character AI, when, uh, when the, when the character AI founders and part of the core team went back to Google, the character AI became a ghost ship, but it was cool in the fact that they had 20 plus million users. They also had a hundred million on the balance sheet.

• 50:58John Coogan?

  Yeah.

• 50:59Jordi Hays?

  And it wasn't this like insanely gnarly enterprise market where, and, and I know, I know people on the character team. And they were like, it's pretty cool. We have a hundred million dollars. We have tens of millions of users. And we're just kind of going to experiment to try to find, you know, figure out how to monetize this. And I just don't think that that was, I, I don't see that the code generation market playing out in the same way where.

• 51:26John Coogan?

  I was trying to think about that. Like, is there a world where, you know, i- i- if the ghost ship had planned, had, had like stayed a ghost ship? And they pivoted, is there some world where they, you know, niche down? Like there was this rumor that they were going to niche down into B two B. Like, could they have niched down windsurf into some like niche category? And actually had like a pretty durable business. We were talking about like, could Jeremy Gaffon make it work? If he acquires it and like turns it into some cash flowing business? I just wonder like, is there, is there a niche where like, I mean, we've heard, we, the example I would give is like, we've heard that like, these code gen tools are like particularly bad at like rewriting old programming languages like Fortran, for example.

• 52:06John Coogan?

  And so if you created like cursor just for rewriting Fortran, it's like, that's not sexy at all. That's not going to be hot on, on Twitter X, but it could be really valuable in like, you know, the bowels of like legacy banking. And like, you could pay, you could charge a bunch and you wouldn't like the TAM wouldn't be very big, but the business could be quite good. And, and that, that, that might be a weird outcome, but it, it could be a silver lining. I don't know. Well, anyway, the second point that I made was that, you know, uh, I, I said, the second, the, the real culprit might be FTC antitrust. This is a hyper competitive market and Google still feels like they can't just do a normal acquisition. And I thought that was crazy because it's like.

• 52:50John Coogan?

  This is textbook, they should be able to acquire this company, right? Like, like curse is out there. They're not acquiring the market leader.

• 52:58Jordi Hays?

  Yeah.

• 52:59John Coogan?

  OpenAI is clearly going after this market. And to the tune of, what's, what's their valuation, like 350 billion or something like that? Like, like-

• 53:07Jordi Hays?

  We haven't, we, we should try to get an update there.

• 53:09John Coogan?

  But like, not, it's not-

• 53:10Jordi Hays?

  I think the Masa, I'm, I'm not sure the, the full Masa-

• 53:13John Coogan?

  It's not even one tenth of, it's, it's greater than one tenth of Google's market cap. Right?

• 53:17Jordi Hays?

  Yeah.

• 53:17John Coogan?

  And so you're looking at like, and then is Microsoft going to compete in this? Absolutely. They have-

• 53:22Jordi Hays?

  They already do.

• 53:23John Coogan?

  They already do. And so-

• 53:24Jordi Hays?

  Yeah.

• 53:24John Coogan?

  It, it, it, it's like, you're, you're basically like, I don't know, second, third, fourth in this market. There are four very serious players. Like, this should be textbook, rubber stamp, good, good to go, do the deal, no problem.

• 53:37Jordi Hays?

  There's also a, there's also a very long list of founder-led companies that were, that are maybe, that were maybe less hyped than Windsurf, but have incredibly talented teams. There's like Poolside.

• 53:46John Coogan?

  Yeah, Poolside.

• 53:47Jordi Hays?

  There's, there was that one that Nat Freeman and Daniel Gross did that was-

• 53:50John Coogan?

  Magic?

• 53:51Jordi Hays?

  Yeah, there was-

• 53:51John Coogan?

  The Magic Doc Dev? They were found, apparently they were training their own foundation model for a while. And that was kind of like, you know, very capex intensive and, and, and maybe slowed down some things on the product side. But still, like, clearly it's competitive market. Everyone's working on it. Also, we're, we're missing out, like, there's probably a ton of YC teams that are working. There was actually one YC team that got in trouble for forking, uh, like cursor too hard or something like that.

• 54:12Jordi Hays?

  Forked it a little too hard.

• 54:13John Coogan?

  Yeah, they crossed some line there. Um, I think they did fine and I think that they wound up like cleaning it up. But people were upset about like, uh, when you fork something, you have to abide by the MIT license or whatever the underlying license is. And so you can't just like steal open source code and not abide by the, by, by the open source rules. And then, and then I said three, uh, new facts might come out, which they did. And, uh, and the FTC thing was interesting because there, there was a little bit of pushback on that. People were saying like, oh, like Lena Kahn ate my lunch, like Lena Kahn's, uh, like, like, like responsible for everything. And I wasn't, I wasn't necessarily saying like Lena Kahn was 100% responsible for how this was, was, was structured.

• 54:53John Coogan?

  Or like how this played out, but she did kind of like warp the road a little bit that made it a little bit wonky to drive on.

• 55:01Jordi Hays?

  Yeah, basically we made hardcore capitalism legal. So we nerfed capitalism. And then, and then capitalism ended up coming in and saving the day.

• 55:09John Coogan?

  Yes, yeah, yes.

• 55:10Jordi Hays?

  With Scott Wu.

• 55:12John Coogan?

  Yeah, seriously, seriously.

• 55:13Jordi Hays?

  So the solution-

• 55:16Jordi Hays?

  To anti-capitalism.

• 55:18John Coogan?

  Is more capitalism. This is the Brad Gerson point. Yeah, totally. And so, so I still don't, I still think that there's a, that there is a way that even with the weird new FTC antitrust regime, Google and the Windsurf founding team could have probably been a little bit more aggressive, taken a little bit more FTC risk and avoided this whole PR dust up. But that would have been more risk for Google. And I think that the way they did this here where they

• 55:45Jordi Hays?

  I mean, it's a great outcome for Google. It's like, we didn't buy the company. Look.

• 55:48John Coogan?

  Exactly.

• 55:49Jordi Hays?

  They bought the company.

• 55:49John Coogan?

  They bought the company. Exactly. So it really, it really is a great outcome for Google, even though I'm sure that they, their comp team was up all weekend calling people. Like, I have to imagine that this was like

• 55:59Jordi Hays?

  I mean, it was

• 56:00John Coogan?

  war room for them.

• 56:01Jordi Hays?

  It was like serving, you know, it was, it was the best possible story that the New York Times could have ever asked for.

• 56:09John Coogan?

  Oh, totally.

• 56:09Jordi Hays?

  It was like, big tech

• 56:11John Coogan?

  Yes.

• 56:11Jordi Hays?

  buys hot company that was competing, you know, not, not necessarily, like, the whole point of, of Lena Khan's thing was that, you know, big tech is like squashing competition by, by, you know, buying these companies early. And so you had the story that, that was served up to them, which was, you know, exciting company in code gen, a lot of traction.

• 56:30John Coogan?

  Yep.

• 56:31Jordi Hays?

  OpenAI almost buys them. Google says, okay, we're going to buy them. That's Google. Google and OpenAI are arguably, you know, the, the two competitors that actually like matter in search right now. And so it was just the perfect story. And then, and then the, you know, I, I think Scott, Scott over at Andreessen had a good post that I, that let me pull up here for a second. He was basically saying, there is an irony that Lena Khan's activism has resulted in deals that are far worse for everyone except the people she was targeting.

• 57:03John Coogan?

  Wait, who, who tweeted that?

• 57:04Jordi Hays?

  This is, sorry, Martin Casado.

• 57:06John Coogan?

  Oh, yeah, yeah, yeah, from Andreessen, yeah.

• 57:07Jordi Hays?

  And, yeah, it's like the, the people with the lowest, you know,

• 57:10John Coogan?

  It's crazy.

• 57:11Jordi Hays?

  It seemed at the time that the people with the lowest leverage, the employees that had joined recently

• 57:15John Coogan?

  Yeah.

• 57:15Jordi Hays?

  were getting the worst outcome

• 57:17John Coogan?

  Yeah.

• 57:17Jordi Hays?

  out of, out of a deal that, that should have benefited everyone.

• 57:19John Coogan?

  Well, If you're looking for code review for the age of AI, head over to graphite.dev. Graphite helps teams on GitHub ship higher quality software faster. You can get started for free at graphite.dev. So my question is, Google, it feels like PR nightmare, accidental PR nightmare, because they had done, what, character, just fine. It was not that big of a deal for them. And then scale had happened.

• 57:45Jordi Hays?

  And it was very clear that that situation was interesting, too, because it, Google has delved into social in the past, hasn't had the best time.

• 57:53John Coogan?

  Not beating the chat GPT script.

• 57:55Jordi Hays?

  No, that was intentional, of course. No, but they've messed around in social. You could tell that Google doesn't want to own the AI chat bot. They just don't want the association with.

• 58:07John Coogan?

  There was a rumor that Gnome didn't want to be in that. He was just like, I want to train a great model. I want to train a great model. I want to do AI research. And then that became the use case. They found product that fit. And then he was like, I don't really like building this type of company.

• 58:18Jordi Hays?

  You see what Elon's launching today with the, I won't even say it on the show, but his new launch today basically signals that that is a very important use case.

• 58:29John Coogan?

  And he's interested in that market. Yeah.

• 58:30Jordi Hays?

  He's interested in that market.

• 58:31John Coogan?

  Yes. Anyway, my question for you is, is so feels like a PR nightmare for Google, feels like a couple stressful days, feels like they landed.

• 58:41Jordi Hays?

  Great timing over the weekend.

• 58:42John Coogan?

  And that's my question. Do you think that they are, that they were intentional and happy about releasing the news after market close? Because the, all of the facts come out over the weekend, and it was such a hairy deal that more deals needed to be done even after the story came out, and it couldn't be super clean. So you have to do it on, late on a Friday. So then Saturday, Sunday, people can talk, deals can get done, and then announcements can go out Monday, and then it resets the whole news cycle. So you kind of skip the crazy news cycle. I think.

• 59:13Jordi Hays?

  I think the world's too online. So I think, I think it helps that it wasn't a weekday. But, I mean, to me, this whole thing, you know, from, from everything that we've kind of triangulated, this could have been avoided by. Managers taking it upon themselves to basically call

• 59:33John Coogan?

  Yeah.

• 59:33Jordi Hays?

  each individual person at the company and say, before, before you have a negative reaction, I need you to be patient.

• 59:41John Coogan?

  Yes.

• 59:41Jordi Hays?

  I know you've been patient through this, this, this, uh, this deal with OpenAI.

• 59:45John Coogan?

  Yes.

• 59:46Jordi Hays?

  It's not the deal that we wanted.

• 59:47John Coogan?

  Yeah.

• 59:47Jordi Hays?

  But we are working to make this a positive outcome for anyone. And, uh, and don't cry yet.

• 59:55John Coogan?

  Yes.

• 59:55Jordi Hays?

  Don't, just don't cry.

• 59:56John Coogan?

  And it's really hard. And it's particularly hard because if you, if you're in the scale situation, a lot of those people had been there for four years. And with Windsurf, most of those people had been there for less than a year. Almost certainly. And so the, the strength of those connections socially outside of work is weaker. So there aren't as many, oh yeah, like my boss, like we were already on Signal with disappearing messages. So we just talk back channel all the time. It's like, no, I just met my boss three weeks, three months ago.

• 1:00:27Jordi Hays?

  The argument was the new company has a strong balance sheet.

• 1:00:30John Coogan?

  Yeah.

• 1:00:30Jordi Hays?

  And they're going to be able to just do a distribution or pivot or like, that was effectively the, the suggestion.

• 1:00:37John Coogan?

  It was intentionally ambiguous.

• 1:00:39Jordi Hays?

  And at the same time, the, the employees left behind on the ghost ship.

• 1:00:45John Coogan?

  Yeah.

• 1:00:45Jordi Hays?

  Were already talking with other companies. Other companies were coming to them, trying to recruit them.

• 1:00:48John Coogan?

  Coin in ghost ship because, uh, like everyone involved in the deal would prefer you to use the term remain co. Remain co, uh, but that's not as sticky as ghost ship. So I think ghost ship.

• 1:01:01Jordi Hays?

  Ship without a, ship without a founder.

• 1:01:03John Coogan?

  I don't think this will be the last ghost ship we see. I think it's, I think it's like a new pattern and we're just going to see this more and more.

• 1:01:08Jordi Hays?

  No, but, but so, so then you have this dynamic where the, the, these talented people, specifically I talked to a founder who was talking with a lot of people on the go to market team.

• 1:01:18John Coogan?

  Yeah.

• 1:01:18Jordi Hays?

  Being like, these are very talented people.

• 1:01:19John Coogan?

  Right.

• 1:01:20Jordi Hays?

  They took a company from zero to tens of millions of dollars in ARR and a bunch of enterprise contracts.

• 1:01:25John Coogan?

  Yep.

• 1:01:26Jordi Hays?

  In a very short period of time.

• 1:01:27John Coogan?

  Yeah.

• 1:01:27Jordi Hays?

  I want to scoop them up. And those people were entertaining conversations because.

• 1:01:33Jordi Hays?

  It was just totally unclear to them what was going to happen.

• 1:01:36John Coogan?

  Yep. So, yeah, I mean, I still, I think some of our friends hold the FTC like 100% accountable. I'm probably under 100, but maybe over 50. But my key point is that never lose faith if the FTC is giving you trouble. Dylan Field didn't lose faith when he was dealing with a messy situation with the FTC at Figma. And also, you should use Figma, Figma.com. Think bigger, build faster. Figma helps design and development teams build great products together. You can get started for free at Figma.com. Anyway, there was another side of the stakeholders that was interesting that this guy Publius said in response to your post,

• 1:02:21John Coogan?

  which I don't think anyone was talking about at all the entire weekend. This is cool. And this is something people don't really think about. I think we're in a good spot with these folks now, and I think they'll actually probably be in a better spot now.

• 1:02:31Jordi Hays?

  Much better spot.

• 1:02:32John Coogan?

  But let's read through it. So, Publius says, "There are more stakeholders here that have not been discussed. There is a whole network of software resellers that invested millions into building partnerships with Windsurf. I was leading the team at one of those partners. We have customers that we have been selling to for years, who we vouched for Windsurf to. I am sending out a note to our 300 customers on Monday that we are stopping all partnership activity with Windsurf effective immediately." I hope he didn't send that because you gotta recall that email. Don't send the email. Cursor has no channel partners and this will cost our firms millions. Oh, interesting. I didn't realize that Windsurf had a channel strategy and Cursor does not. Very interesting.

• 1:03:15John Coogan?

  So Windsurf actually has resellers who go and sell it into their partners because they're doing something on, you know, we do software development consultancy. We come in and help your team run more efficiently. We help you pick the right tools. You can imagine like McKinsey, I don't know where this guy works, but like you can imagine a consulting firm coming in and giving advice on what tools to use. They get a kickback from Windsurf. They don't get a kickback from Cursor, so he's going to lose millions of dollars hypothetically. Hopefully not. But my reputation and good name is worth more. With Google taking the best engineers from Windsurf, our large enterprise clients are screwed. They purchased windsurf enterprise licenses. They were also purchasing an ecosystem that they assumed would continue to improve. This is disastrous for any startup tech company with

• 1:03:58John Coogan?

  goals of building an enterprise channel. It's interesting. I don't think people have any idea how much this just killed channel sales for any AI company. So the rest of the AI companies out there who are like, oh, channel, uh, channel sales is really interesting.

• 1:04:12Jordi Hays?

  Basically, if you're, if you're, if you're a top company in your category growing super quickly, you might turn into a ghost ship.

• 1:04:19John Coogan?

  Yeah, yeah. And so if, if I'm trying to resell that type of stuff, then I have to go to the CEO.

• 1:04:24Jordi Hays?

  They're good, but they're not so good to get these maxed out. They're not getting a trade deal.

• 1:04:29John Coogan?

  Yeah, yeah.

• 1:04:30Jordi Hays?

  You can count on them to not get traded.

• 1:04:31John Coogan?

  Yeah, yeah, yeah. You're having, you're having dinner with the, uh, with the CEO of some AI company is talking to you about like, yeah, we have the best software and you're like, but you don't have any like actually great AI researchers, right? Like you mostly just have like-

• 1:04:43Jordi Hays?

  We like to partner with companies with-

• 1:04:44John Coogan?

  With like medium to C tier researchers. Yeah, yeah. Great product. It works, but not too well because we don't want to lose you.

• 1:04:51Jordi Hays?

  You want to keep working with them for a long time.

• 1:04:52John Coogan?

  We're going to keep working with you. Um, and so, uh, yeah, the, there were a bunch of other reactions. Shell Q hires. Let's see. I'm not, I'm not an M and A guy, but something feels really broken in tech. M and A confidentiality is out of the window. Deals get done and called off on a whim. Lack of rigor and discipline on both sides. Curious to hear what practitioners think. People are going back and forth on this. Um, but really quickly, let's tell you about Vanta. Automate compliance, manage risk, improve trust continuously. Vanta's trust management platform takes the manual work out of your security and compliance process and replaces it with continuous automation, whether you're pursuing your first framework or managing a complex program. Um, and so Will Monitis was particularly blackpilled over the week, friend of the show.

• 1:05:31Jordi Hays?

  Incredibly blackpilled.

• 1:05:32John Coogan?

  Uh, but, uh, he, it's, we're so back, Will. You're good. Uh, Will Monitis said, the reason that tech has been able to grow so quickly and create so much wealth that it is rich, that it is, that it ritualized a set of norms around corporate governance that are very distinct from what the law actually requires. The second someone defects, the whole ship goes down. He's so upset. But basically he's talking about like hand, the handshake deal protocol is not a legally binding contract. Even term sheets. You get a term sheet from a V- See, that's not a legally binding, that's not legally binding contract. Like a VC can write your term sheet, everyone can sign it. And then you can just

• 1:06:08Jordi Hays?

  Literally says.

• 1:06:09John Coogan?

  Yeah, it literally says, it says, this is not binding. And then you can just wake up on the wrong side of the bed and be like, actually, I don't want to do the deal. And or or it could be like you found something in due diligence or you met a different competitor. But the like, you know, the game isn't over until the money's in the bank. The experienced entrepreneurs know this, but we run on this like basically, you know, these society, these like social constructs and these like social contracts that say, hey, if you're the type of VC that constantly rugs on term sheets, on signed term sheets, like you will, there will be a bad vibe around.

• 1:06:43Jordi Hays?

  I can think of two that are widely known.

• 1:06:47John Coogan?

  Yes.

• 1:06:47Jordi Hays?

  And are still in business.

• 1:06:48John Coogan?

  Yes.

• 1:06:49Jordi Hays?

  But they, it becomes very hard to be an effective VC. If your brand is you just pull term sheets.

• 1:06:55John Coogan?

  Yes. Yeah. And some of the, some of those folks have been banned from YC Demo Day. Other people have had like viral Twitter posts around them every once in a while. Like they, they do that to a founder and then the founder becomes very successful and post economic and is like, yeah, I still have a grudge. So I'm going to tell the truth about X, Y, or Z. And, and so the, the thing is, is that now where we are now is I don't think, I don't think the whole ship goes down. I, I don't think this is a true defection. I don't think this reflects poorly. And I think that the, the question of like, the, the big question here was, was will this cause more new startup employees to want to just go straight to Google?

• 1:07:38John Coogan?

  Let's say, let's say that you have the option of working at Google or Big Tech broadly, where you know the paychecks are coming on time. You know, the RSUs are liquid and you can just cash out as soon as you get them or whatever their lockup is. And you know, your managers, they're going to be there and you know, the company's going to be around.

• 1:07:53Jordi Hays?

  Somewhat accurately predict what your comp will be in five years if you really work hard.

• 1:07:58John Coogan?

  Exactly. And then, and then on the flip side, you have startups, which are in some ways lottery tickets. But also you get to work on game changing technology with really cool people. You get to move a lot faster. There's a lot less overhead. It's a lot more edifying.

• 1:08:11Jordi Hays?

  You get to work for potentially the next Sundar.

• 1:08:13John Coogan?

  Yeah.

• 1:08:13Jordi Hays?

  Instead of Sundar.

• 1:08:14John Coogan?

  And, and the economic upside can be a thousand X. It can be huge. And the question is, if that, if that deal was broken, if that, if that deal was, okay, yeah, you can go work on the cool thing, but you might wind up penniless and not cash out like you were promised, that changes the equation and that could pull people away from startups. But I don't think that's going to happen based on this because I think the lesson from this is that everyone got taken care of and the social contract still, still holds, although it was very messy. And I think going forward, every company that's doing a deal like this needs to think, how do I get the scale AI outcome and not the windsurf

• 1:08:55John Coogan?

  outcome? Because just two days of pain is not worth that.

• 1:09:01Jordi Hays?

  I think, I think one potential solution to these deals is exactly what we just saw happen.

• 1:09:07John Coogan?

  Yes.

• 1:09:07Jordi Hays?

  Which is big tech company does basically an aqua hire of the, of the team that they want. And then you simultaneously sell off the underlying asset immediately and you generate a liquidity event for everybody. So everybody's happy. It doesn't have to be like life changing, right? But it has to be something, right? So that it's.

• 1:09:25John Coogan?

  And I mean, the very key thing is that they left enough money on the balance sheet. Because the money on the balance sheet, and this was, this was Hari Ragavan's analysis. He clearly, I mean, the guy's, he's a good friend. He's, he's obsessed with cap table math.

• 1:09:40Jordi Hays?

  I know. He was, this was capital J journalism.

• 1:09:43John Coogan?

  Yes, thank you.

• 1:09:44Jordi Hays?

  This was investigative journalism.

• 1:09:46John Coogan?

  Yeah. And so, I mean, his post is so long that I need to just go to the TLDR. But the TLDR is that he says, I spent hours last night breaking down the cap table and deal dynamics from public info. I realized that the unvested equity is around 80 to 100 million dollars, awfully close to the 100 million dollars the founders and board negotiated to leave behind in the bank. Why shouldn't management just?

• 1:10:10Jordi Hays?

  And that was unvested, which is a key detail.

• 1:10:12John Coogan?

  Unvested. So they, they left enough cash out.

• 1:10:15Jordi Hays?

  We're, we're leaving enough as though you vested your full four years.

• 1:10:18John Coogan?

  Yes. And so, and so if you, if it like, it's, it's still a leap of faith because I don't believe that Google and cognition were in communication. At all. And I think if they were, that would be more like antitrust chaos and stuff. But just economically, you know that if you if you leave a company there with that much money on the balance sheet and those many and that many like that unvested options. Somebody is just going to be like, wait, so I can get that for basically free if and I can make all the employees whole and I get all the employees. And I don't have to pay really like anything to get that thing. Like it's just going to happen immediately.

• 1:10:57John Coogan?

  And because it's just like you've created, you've left this, you've left this like, you know, a hundred dollars on the floor and someone's going to pick it up like the free market will just work.

• 1:11:05Jordi Hays?

  I think the, I think the question that I had and that I think a lot of people probably had is what is the governance structure of the ghost ship?

• 1:11:12John Coogan?

  Oh, yeah.

• 1:11:13Jordi Hays?

  So Jeff, Jeff.

• 1:11:14John Coogan?

  Crazy question.

• 1:11:14Jordi Hays?

  Jeff Wang, who's coming on the show at 1pm.

• 1:11:17John Coogan?

  Oh, he is?

• 1:11:19Jordi Hays?

  Jeff and Scott will both be coming on at 1pm for 15 minutes.

• 1:11:22John Coogan?

  Okay.

• 1:11:22Jordi Hays?

  And.

• 1:11:23John Coogan?

  Can we, can we communicate that to the other guests?

• 1:11:25Jordi Hays?

  Yeah, yeah.

• 1:11:25John Coogan?

  Yeah.

• 1:11:28Jordi Hays?

  And so the question is like, okay, Jeff, you now run a company with hundreds of employees that are angry about what just happened that that probably like, maybe they want to keep building windsurf. But maybe they want to go and do something else. And what happens like Jeff is basically, I would imagine like has to make a bunch of calls.

• 1:11:48John Coogan?

  Yeah.

• 1:11:48Jordi Hays?

  It's like, do you just keep running the business?

• 1:11:50John Coogan?

  Yeah.

• 1:11:50Jordi Hays?

  Is there pressure to keep running the business?

• 1:11:52John Coogan?

  First question, Jeff, did you ever feel like, is it Frodo Baggins throwing the ring into the fire? It's like, pay out the hundred million dollars in bonuses. After all, why shouldn't I keep it?

• 1:12:05John Coogan?

  Throw the ring in, throw the ring into the Mount Doom.

• 1:12:08Jordi Hays?

  Yeah. The question was like, could.

• 1:12:09John Coogan?

  Were you ever tempted?

• 1:12:10Jordi Hays?

  Could, could the, the new leader, the leadership?

• 1:12:13John Coogan?

  Yeah, like was it ever, was that an option?

• 1:12:15Jordi Hays?

  Could the leadership have decided, you know what? We can run this business super lean.

• 1:12:18John Coogan?

  Exactly.

• 1:12:19Jordi Hays?

  We could actually run this business with like 10 people.

• 1:12:21John Coogan?

  Yeah.

• 1:12:21Jordi Hays?

  And, and you know, we're going to run it for a few years and we're going to, we're going to use the advantages that we get from our own product to run a super lean team. And then, and then you would have employees like effectively burned again potentially. But that didn't happen. I'm very happy about it.

• 1:12:39John Coogan?

  Yeah.

• 1:12:39Jordi Hays?

  And the question, another question is what?

• 1:12:42John Coogan?

  If you're, if you're big tech and you're going to do one of these like zombie acquisitions, you gotta leave enough for the unvested shares. And if you're founder and you're going to do one of these zombie acquisitions, the ghost ship's got to be full of plunder. It's gotta be stacked with treasure because then

• 1:12:56Jordi Hays?

  That's right.

• 1:12:56John Coogan?

  Then the rescue divers will go and lift the ghost ship off the

• 1:13:00Jordi Hays?

  Yeah, and if, if, if big tech comms are telling you, you can't tell anybody that they're getting taken care of.

• 1:13:06John Coogan?

  You have to risk it and have some off the record conversations.

• 1:13:09Jordi Hays?

  Tell a little birdie to go fly around and let people know.

• 1:13:12John Coogan?

  You, you gotta be, you gotta be having like quick calls, not, not saying anything too specific, but saying what you said, I think you worded it perfectly.

• 1:13:19Jordi Hays?

  Yeah, and it, and it, and poor Varun, poor Varun, right?

• 1:13:22John Coogan?

  I know.

• 1:13:22Jordi Hays?

  Because, because he was getting dragged because, because he apparently, he apparently, he apparently, people were messaging me like he joined like the, the all hands for like minutes, you know? And it just seemed like he was being like ultra, like kind of like a psychopath being like, see you guys.

• 1:13:43John Coogan?

  Yeah.

• 1:13:43Jordi Hays?

  It was a good run.

• 1:13:44John Coogan?

  And it's like.

• 1:13:45Jordi Hays?

  Go, go have fun building, you know, continuing the mission.

• 1:13:47John Coogan?

  This would not have happened if he had said, no, I need an hour, I need to explain everything. Would that have killed the deal? Almost certainly. If that killed the deal, what's the outcome for the employees? Probably worse than what they got.

• 1:14:00Jordi Hays?

  You think it would a hundred percent have killed the deal?

• 1:14:03John Coogan?

  Almost certainly.

• 1:14:04Jordi Hays?

  If.

• 1:14:04John Coogan?

  I think one of the key deal points in the negotiation with Google was we do it via Google's comms and legal strategy. Because Google does not want to get hit with some crazy FTC lawsuit that's going to not just be some multi-billion dollar settlement, but also a huge headache for years and bad press and stuff like that. So Google says, hey, we, we want to do this our way. It's going to be awkward, but we're going to take care of everyone. And, and yes, we will, yes, we will leave enough money on the balance sheet to pay out all the unvested options. And, but in exchange, you gotta do the comms our way, which was rough.

• 1:14:40Jordi Hays?

  You have to create a terrible.

• 1:14:42John Coogan?

  Be scapegoated by the entire, you get hazed.

• 1:14:45Jordi Hays?

  Yeah, you're going to be hazed for 48 hours.

• 1:14:47John Coogan?

  You're getting hazed, but then.

• 1:14:49Jordi Hays?

  And, and it's going to blow back on us. So incredibly hard.

• 1:14:53John Coogan?

  That weekend, it was rough. It was rough. Anyway, 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. Start building at linear.app.

• 1:15:06Jordi Hays?

  And if you are launching a TBPN derivative product, derivative work, get on Linear. It's the tool we use.

• 1:15:13John Coogan?

  So what you would do is you'd put all the glasses of tap water that you need to drink? And then you would just check those off at a time?

• 1:15:19Jordi Hays?

  Yeah.

• 1:15:19John Coogan?

  If you're not familiar, like we only have one rule about copying us. It's the derivative works clause in our terms of conditions.

• 1:15:26Jordi Hays?

  Yep.

• 1:15:26John Coogan?

  And in there, if you create a derivative work of TBPN, you are legally required to drink a glass of tap water on your street.

• 1:15:33Jordi Hays?

  Every time you go live?

• 1:15:34John Coogan?

  Yes. Yeah. Every time you go live.

• 1:15:36Jordi Hays?

  And so, yeah, again, we want to make...

• 1:15:38John Coogan?

  Don't have to pay us licensing fees for the patents. We did invent TV. We invented news. But we will open source it. It's an MIT license type of situation, modified MIT license.

• 1:15:48Jordi Hays?

  Yep.

• 1:15:49John Coogan?

  The only modification is that you have to drink tap water.

• 1:15:51Jordi Hays?

  Yep.

• 1:15:51John Coogan?

  Anyway.

• 1:15:51Jordi Hays?

  It is a small price to pay.

• 1:15:54John Coogan?

  Anyway, in other news...

• 1:15:56Jordi Hays?

  Question, what do you think? Why do you think Google did this?

• 1:15:59John Coogan?

  Why?

• 1:16:00Jordi Hays?

  Yeah. I mean, like...

• 1:16:01John Coogan?

  Oh, yes, yes, yes. That is the, that is the real question is, is we've talked about the role of the VCs. I think, based on what happened, never talk down on first-ballot Hall of Famer Neil Meta. Never talk down on the future first-ballot Hall of Famer. Everyone was saying, oh, Neil Meta, Green Oaks, they did this sloppy deal, they screwed over the employees. Employees are great. Neil Meta potentially goaded. I don't know.

• 1:16:26Jordi Hays?

  I agree. I agree. No, it was well played.

• 1:16:28John Coogan?

  I think it did work.

• 1:16:29Jordi Hays?

  No, no, but the question is, why did Google, why did Google feel like they needed to do a Meta-style trade deal in...

• 1:16:41John Coogan?

  Yes. It's a good question. So, so...

• 1:16:46John Coogan?

  Windsurf in my, I don't know everything about all the employees they brought over. They brought over 50 engineers. I don't know if any of those are like insane AI researchers with like crazy citations on like foundational papers. I don't know that it's the same. I don't know that they're trying to build a super intelligence team to really bring their models to the frontier because they already have that. Like Gemini is, is at the same like level of like AI research quality as OpenAI Anthropic by most benchmarks, by most people that use them. Like it doesn't feel like they're way behind there. Lama four, on the other hand, was a little bit behind. And so, and it felt like Lama four was specifically behind, not on the product side, but on the research side.

• 1:17:28John Coogan?

  Like they just weren't figuring out what works in RL. And so they had to bring over a ton of people to just be like, how do we actually train this next model? Like behemoth couldn't, they couldn't tame the behemoth. Like they gotta get some behemoth tamers in the building. And it seems like that's why they acquired all the different researchers who know, okay, like training on 100K H100 GPUs gives you this. And then you need to use this data and you need to hold back this data and you have this, this reward function and this reinforcement learning technique. And you need to do all these different things. And so you need AI researchers for that, but Meta has great product people. So like they're going to be able to take what they build and then vend it into Instagram and vend it into all sorts of different places.

• 1:18:11John Coogan?

  And use it to optimize the ads 1% and make a trillion dollars. Like they're going to be fine on that side. Google is great at AI research. DeepMind is amazing. They have so many, they invented the transformer. They're not behind on the quality of the foundation model. They are, they are behind on product and they are, they are behind on like user experience. And everyone complains, oh, they have this amazing VO3 model, but like I had to log in seven times to get access to it. And then go through an upgrade thing and it was on the wrong Google account. And then I have to trigger it and then I get some rate limit.

• 1:18:41Jordi Hays?

  Here's the, here's the, the.

• 1:18:44John Coogan?

  The steel man for the short sellers?

• 1:18:45Jordi Hays?

  No, no, no. Here's what's kind of interesting about the way this has developed. So at Google's last developer event, they launched Jules, which is an async development agent for code gen.

• 1:18:58John Coogan?

  It's a Claude code competitor and OpenAI.

• 1:19:00Jordi Hays?

  More so it was like a dev, yeah, Devon AI competitor.

• 1:19:03John Coogan?

  Devon competitor.

• 1:19:04Jordi Hays?

  And so now you have, you imagine Google has more ambitions around code gen, right? They've seen Anthropics. Very few businesses actually like will work at Google, right? You need a billion dollars of revenue or you're going to get shut down most likely. And so code gen is an area that I'm sure they're taking very seriously. I haven't heard a lot about Jules since the event. I haven't heard about people that are, that are using it. I'm sure it's, I'm sure it's powerful.

• 1:19:30John Coogan?

  Yep.

• 1:19:30Jordi Hays?

  But you now have a dynamic where some, you have cognition and Devon who got not, I can't say cloned by Google, but again, like they were the first like serious like enterprise coding agent. And so, and, and the Windsurf GTM, you know, sales, marketing team versus the former Windsurf founders and top researchers who are now at Google. And so I'm just incredibly excited to watch this play out. Pavel was posting earlier, he said, I hope these guys smoke Google at AI coding. Imagine the chip on your shoulder after this if you're a Windsurf employee. So yeah, everybody's got to be very fired up.

• 1:20:12John Coogan?

  How you guys doing? Congratulations.

• 1:20:15Speaker 02

  Thank you.

• 1:20:17Jordi Hays?

  Round of applause. Did you guys have a relaxing, relaxing weekend?

• 1:20:22John Coogan?

  Yeah, really chill weekend.

• 1:20:23Scott Wu?

  Yeah, yeah, easy, easy, easy. Nothing too much. Honestly, we, we both haven't really slept.

• 1:20:31John Coogan?

  Okay.

• 1:20:32Scott Wu?

  So go easy on us, okay?

• 1:20:34Jordi Hays?

  Well, you had a lot of, you had a lot of people to take care of. And honestly, when, you know, we, we heard the news of, you know, a few minutes before we went live and we were fist pumping here in the studio because it's such a, such a fantastic outcome. And I'm sure everybody involved is grateful for the work you guys put in to get this done.

• 1:20:53John Coogan?

  But give us, yeah, kick us off with the, the high level. What's actually the partnership look like? What do you, like, how would you describe it in your own words of like what's actually happening?

• 1:21:04Speaker 02

  Yeah, I mean, this is a, this is a real acquisition.

• 1:21:07John Coogan?

  Okay.

• 1:21:08Speaker 02

  We are being acquired by cognition.

• 1:21:11John Coogan?

  Okay.

• 1:21:12Jordi Hays?

  It must feel great to say that too.

• 1:21:16Speaker 02

  You don't hear that much. It was a tough, it was a tough Friday, I would say. Um, I don't think anybody would want to be in my shoes on Friday. Uh, but we talked to a lot of teams out there. Uh, there's a lot of AI companies, foundational companies. And, uh, after talking to Scott and the cognition team, uh, there, it was done in my mind. There's a done deal. Um, I don't know if you guys know this, but, uh, cognition was, uh, probably the only other team that we thought was smarter than our, our team, actually.

• 1:21:44Jordi Hays?

  Wow.

• 1:21:45Speaker 02

  Yeah.

• 1:21:46Jordi Hays?

  No, that's what, that's what we put, we put that together just on the show, seeing the announcement. It's like you take this incredible, you know, go to market, sales machine that, that you guys had built. And you combine that with one of the best, you know, research and just hardcore engineering culture.

• 1:21:59John Coogan?

  Perfect.

• 1:22:00Jordi Hays?

  And it's a, and it's a perfect, you know, match.

• 1:22:02John Coogan?

  Perfect overlap.

• 1:22:03Scott Wu?

  Yeah, absolutely. And on the windsurf side, I'll just, you know, I, I, obviously there were all these stories breaking out on Twitter and everything going on. And people were saying, well, you know, the, the, the thing that's left is just a shell. And, and we looked at it and we said, well, actually I, I don't know if that's right. You know, it's the, there's, there's the code, there's the product, there's the customers. And most importantly, there's the whole team, obviously. Um, and, and, and it's an amazing product and there's a lot to do and a lot to build together. And, and so I think as we started talking about it, we found that there were just so many natural ways to partner, you know, and, and both in terms of obviously the customers and, and customers would love, you know, are, are super excited to have a solution that, that basically combines both the IDE and the agent.

• 1:22:43Scott Wu?

  Um, and, and, and then the, the technology itself, which is, you know, I, I, I think we, uh, Devon, at Devon, you know, at building Devon have always focused on this kind of remote background agent as the thing that we've kind of done. Um, whereas, uh, you know, windsurf is, is really focused on the agent take IDE. And, and I think there's a lot of kind of things that play in there, um, all the way down again to, to the kind of the, the fit of the, the, the relative teams and the team strengths and so on.

• 1:23:06John Coogan?

  So. It's almost like you predicted this because like the, like, these types of mergers are really hard because you have two brands that are popular. But Scott, you've been managing cognition and Devon, like you've had the, the, the corporate structure and the product structure for a while. And so like, it, it doesn't seem nearly as complicated as like, where does this go? Do you have to rebrand one another? I don't know if you have thoughts on it yet. I'm sure you, this is down the road. Uh, but it seems like you're actually fairly set up to, to integrate these two companies in a, in a way that's like not so super chaotic to either, which is great.

• 1:23:38Scott Wu?

  Yeah, yeah, you know, I wouldn't say it was intentional. I think on our end, for example, it's probably more that just we tend to over-focus on software engineers because it's just who we are and how we think about it. And in particular, kind of just like these like product and capabilities things, whereas I think on the Windsurf side, I think Jeff and the team, you know, the whole team have built out a really great kind of suite of all the different kind of functions, right? You know, sales, deployed engineering, enterprise work, infrastructure, marketing, operations, and so on, you know, finance, etc. And yeah, it just turned out to be a really, really great fit.

• 1:24:13Jordi Hays?

  Yeah. Jeff, Friday, end of day, did you think you would be running a process so quickly? I know, you know, the obvious move would just be, you know, continue to run and scale the business. You guys had a lot of momentum, but what was going through your head Friday night? Because I imagine at the time, you're also balancing, you were all of a sudden managing a team of hundreds of people that probably all, you know, wanted your time and attention as well.

• 1:24:41Speaker 02

  My immediate priority was just to get a lot of options on the table and to have a lot of paths forward. I had to tell the team, like, this is the path forward immediately because this is happening now. And then outside of the meeting, you know, I was thinking like, okay, who do I need to talk to? What is the best use of my time? I can tell you, I was on the phone for pretty much 24 hours, non-stop on my phone after the all-hands. And me and Scott, we worked really fast. We met at our office the next day. He even brought in everything on a piece of paper to sign.

• 1:25:15Jordi Hays?

  No way.

• 1:25:17Speaker 02

  There you go. He had to talk through a lot, but that was, it was really, it was pretty dramatic, Scott, but it was cool. It was cool.

• 1:25:23Scott Wu?

  Yeah, it was fun. And naturally, you know, because it has to be this way, we got things signed like one or two hours before we were able to put out the announcement. But like, as soon as we started talking about it together, I think it was kind of clear for both of us, like, the way that we really make this a success is, you know, obviously, customers kind of want to understand what's next. The team wants to understand what's next. You know, the whole world is talking about it. We want to be able to come out together as soon as possible and say, We're gonna do this. We're gonna make this really amazing. We're gonna make sure we take care of all the users and all the customers. We're gonna make sure we take care of the team. And there's just a really great product here at its core, and that's what we want to focus on, and that's what we want to build out together.

• 1:26:00Speaker 02

  Yeah. And you know what's crazy? What is crazy, like, we talked pretty late on a Friday night as well. We were comparing notes and there was like almost no overlap. I mean, we talked about the team already, but even the product. The product is like missing exactly what the other product is offering. And the ability to combine the products together is going to be so amazing for our users. It's gonna be really cool.

• 1:26:20Scott Wu?

  Yeah, I think there's gonna be a lot of fun stuff around, you know. You can have an agent work and then review the code, you know, locally in your IDE. You can be planning tasks out and then kind of sending them off for work. You can be, you know, you can do a first pass with an agent and then come and look at the work and then kind of finish that up and do the finishing touches with, you know, with Tab and all these other features and so on, right? And we're really excited to build that out together.

• 1:26:45Jordi Hays?

  How is, how is the team feeling right now? I imagine this is the craziest 48 hours of their career as well.

• 1:26:51John Coogan?

  Give us a preview of the Slack emojis that are ripping right now.

• 1:26:54Speaker 02

  Actually, we, we announced it at another all hands. Friday all hands, and then we put another Monday all hands. And very, very different.

• 1:27:02Jordi Hays?

  They're like, it couldn't possibly get worse. So it's only up.

• 1:27:07Speaker 02

  Well, we made it dramatic too. So me and Scott and the team, we really went out of our way to make this a very generous acquisition. I'll just say that. And I think, you know, the team probably felt like, you know, their, you know, their career was over or something, you know, like it was very sad on Friday, but I think today, I don't know, how long did they clap, Scott? They kind of cheer for like.

• 1:27:30Jordi Hays?

  Standing ovation.

• 1:27:31Speaker 02

  Or something. So I think the sentiment has shifted. The team is even more fired up to go. The whole product is still there, all the, all the things we had and the GTM team is still there. And now they also have Devin to sell as well. So everybody's fired up now.

• 1:27:47John Coogan?

  That's amazing. Yeah, every time I talk to Scott, it's always because like he's done something really incredible and aggressive like, like, and it's like, okay, like, let's do, let's talk about this right now. And before I was making like documentaries, it took me a month to put out a single video. Now fortunately, I have a daily TV show, so I can just have you on and we can chat about it. I do have some, some random questions. I don't know if it's worth, I'm interested to know about, about that go to market team and, and channel sales specifically. There was somebody in the comments of one of Jordi's posts talking about how Windsurf was growing revenue and, and, and working with channel partners.

• 1:28:23John Coogan?

  Can you walk me through how like, what would you give advice to somebody who's structuring a, like a successful channel partnership strategy for a product like this? What, what incentives do you have to align? How big of a, of a piece of business was that? Do you expect it to be a continual source of growth? I'd love to know about just that as a particular strategy as opposed to say, you know, Google ads are going viral.

• 1:28:49Speaker 02

  Yeah, we, we made the decision to go 100% partners back in February. The thing about a partner, a channel, kind of like segment is like, you have to like, you have to like, kind of feed them. Like you kind of, kind of build belief with them in the product, but also show that there's an economic incentive too. It did take some time actually from Q1 to Q2 to like, get the top priority partners, make sure those partners can easily sell on your behalf as well. And it really took like about four to five months to really see this like kind of take off. So some of our partner, partners have already started bringing in seven figure deals, even without even trying the product. They just go to their customers, they ask them, you know, what, what they want, and they just say it's Windsurf. And, and now they can say Windsurf and Devon.

• 1:29:33John Coogan?

  That's amazing.

• 1:29:35Jordi Hays?

  Yeah, I, I was getting multiple messages from people Friday and Saturday being like, I want this team. I want this team. And that was what, and, and I think that it is, it is just, it's such a, this whole deal and everything is, is really a, a testament to the caliber of the team. Which was the, which was one of the major disappointments Friday is if you were on the team that, that was staying behind at Windsurf. There's this sort of almost like signaling, right? Of like, I took this company, let's say you joined last August and you brought the, the product to market. You've launched it, you grew it to tens of millions of dollars in revenue and then don't get to kind of continue the mission. It's, I'm, I'm just really happy for everyone involved.

• 1:30:16Scott Wu?

  And now, oh, sorry. I was just saying now, you know, now we're all one big team and it's, I mean, we're kicking it into another gear. I think we're all so amped up to, to take this and just go, you know, we're going to go full speed, basically, for, for the next while. And we get to play on offense now and go for it all.

• 1:30:34Jordi Hays?

  Are you guys already making plans to get under one roof?

• 1:30:39Scott Wu?

  We have a lot to figure out. But yeah, working towards that and getting to the point that there's kind of the product collaboration, there's the go to market collaboration, and then there's the literal kind of like team situation. A lot, a lot of work to do over the next couple of months.

• 1:30:53Speaker 02

  Well, we want to tell our customers, like, we got there back now. And the product is going to get so much more cool.

• 1:30:59John Coogan?

  That's amazing.

• 1:31:00Jordi Hays?

  Well, you guys turned something which was, in many ways, you know, a disaster. I was just waiting for, I was waiting for the New York Times piece on Monday and getting to see the New York Times push out this news and turning this whole thing into a win is, is incredible. And you guys have done a service to the team and the industry. So, thank you.

• 1:31:21Scott Wu?

  Yeah, honestly, honored to get to be a part of it, to work with such a great group of people. And I just want to see you guys, you guys have no idea how, how things went with all the legal and everything last night in terms of figuring these things out. Are we going to make it there in time? Or are we not going to be, it was, we, we, we've been through a lot. And I think it's, it's, it's just the sort of thing. So.

• 1:31:42Speaker 02

  Just so you know, Scott was like, we are announcing Monday, hell or high water. And we, we just did not sleep for the last like 72 hours. Yeah. It's been a crazy, it's been crazy.

• 1:31:53John Coogan?

  I mean, we, we, we appreciate you copping on the stream. Do you have anything else, Jordy?

• 1:31:56Jordi Hays?

  No, you guys deserve, probably, probably too early to sleep, but you both deserve a power nap at the very least. Thank you for coming on. Anything else that, that makes sense to share now? Or should we let you go?

• 1:32:09John Coogan?

  We're all good.

• 1:32:10Scott Wu?

  Awesome. Yeah, stay tuned. We're gonna have a lot more announcements soon. Thanks for having us.

• 1:32:14Jordi Hays?

  Amazing, guys. Great work. Cheers.

• 1:32:15John Coogan?

  We will talk to you soon.

• 1:32:16Jordi Hays?

  Congrats.

• 1:32:18John Coogan?

  Bye. We are doing a postmortem on the Windsurf chaos. I was saying that I liked this post from Pavel Asparuhov. I think he sort of nailed the postmortem, but we can debate this. It, I mean, if you leave someone for dead, but someone else calls in a helicopter, that doesn't really change your moral positioning in the situation. And Delian says this 100%. The Windsurf founders and Google thought they could pull a fast one, and that the broader community slash Windsurf employees are somehow r-worded enough to not catch on that their "Leave the Shell Co. with Cash" plan was totally morally bankrupt. Everyone will remember.

• 1:33:00John Coogan?

  And so, I don't know. I'm perhaps ready to put on the steel man hat and not go quite as far as Delian. I think you might agree with the Delian and Pavel take a little bit more.

• 1:33:11Jordi Hays?

  I still think it's important to debate because we want to avoid this kind of situation in the future. There's probably going to be more of these deals. John Ludig had some good commentary on this, basically saying if you are a big tech company, it is much easier and faster to do something like this. It's not just the FTC sort of like climate around antitrust. It's just that it's much easier, it's much faster, and oftentimes, these companies are just buying the team and the talent. So if they can license the tech and get the team, it is, that's just capitalism doing capitalism. In this case, the answer to capitalism doing capitalism was more capitalism.

• 1:33:49John Coogan?

  But it would got kind of wild.

• 1:33:50Jordi Hays?

  In the form of Scott Wu coming in hot, working over the weekend to get a deal done. So anyways, fantastic outcome in the end.

• 1:34:00John Coogan?

  Scott Wu looks like a hero.

• 1:34:01Jordi Hays?

  Scott, we looks like a hero. I think cognition is going to be stronger for it. They got a world-class, you know, GTM sales, marketing engine.

• 1:34:11John Coogan?

  What John Ludig said here was big tech's AI talent shortage means with means these M and A choices. A, you get the talent only, but you get it today, or B, you get the talent plus the business plus the product, but months after regulatory scrutiny. And he says they will pick every time. Thankfully for Windsurf, the product lives on. But A, as the default is existentially dark for startups. And so I think what's interesting is like, we were debating how much of the blame goes to Lina Khan. And I don't actually know that there's all that much on Lina Khan specifically.

• 1:34:49Jordi Hays?

  But it's fun. It's fun. It's fun to point the finger.

• 1:34:52John Coogan?

  It is, but I think

• 1:34:53Jordi Hays?

  The bogeyman.

• 1:34:54John Coogan?

  I think in general, like the FTC has always, has always had some sort of approval around big public company buying a small company. They're going to review it, even if they would have approved it. It would, they wouldn't, Google would not have gotten the talent actually in the door, actually working at Google for six months.

• 1:35:13Jordi Hays?

  Yeah.

• 1:35:14John Coogan?

  Months after regulatory scrutiny. And so that time

• 1:35:18Jordi Hays?

  And the other comp here, the other comp here that we have is Figma.

• 1:35:21John Coogan?

  Yep.

• 1:35:21Jordi Hays?

  Who was slated to get acquired by Adobe.

• 1:35:24John Coogan?

  Took forever.

• 1:35:24Jordi Hays?

  Adobe had to pay $1 billion breakup fee. Now Figma is going to IPO.

• 1:35:30John Coogan?

  Yep.

• 1:35:30Jordi Hays?

  And I would be shocked if they end the first trading day below the price that Adobe was going to pay.

• 1:35:36John Coogan?

  Yeah.

• 1:35:37Jordi Hays?

  And the company is doing better than ever, has launched a bunch of new products and, and so

• 1:35:43John Coogan?

  Not financial advice, but I will give you product advice. Go to Figma.com. Think bigger, build faster. Figma helps design and development teams build great products together. Can't say anything about the stock, but great product. We do love it. Anyway, Varanam Ganesh had a good take here. Windsurf employees over the weekend. And it's the, it's the, we're so back, it's so over. We're so back, it's so over. And I think the underrated take on this, like, yes, it's funny and it's a good point, but this has a real economic cost, like losing sleep. We're sponsored by Eight Sleep, as we put out a video today.

• 1:36:14Jordi Hays?

  We did.

• 1:36:14John Coogan?

  Sleep is valuable. And if you make me lose sleep, that does have an economic cost. That does have a moral cost. You shouldn't do that. And so you should, as a founder, try and land the plane, not just

• 1:36:27John Coogan?

  Save everyone's life, but actually not have a super rough landing. Yeah, make it a win for everyone, but make it smooth for everyone.

• 1:36:34Jordi Hays?

  And there was a good post Pavel Pavel was on a tear.

• 1:36:37John Coogan?

  He was.

• 1:36:38Jordi Hays?

  Last few days defender of the founding engineers.

• 1:36:41John Coogan?

  Yes.

• 1:36:42Jordi Hays?

  Uh, but he said, I hope these guys smoke Google at AI coding. Imagine the chip on your shoulder after this, if you're a windsurf employee.

• 1:36:48John Coogan?

  Yep.

• 1:36:48Jordi Hays?

  And Sandeep Shaw over at Windsurf, he's a vice president there said it's bigger than a chip. We are coming for it.

• 1:36:55John Coogan?

  For it.

• 1:36:56Jordi Hays?

  And so love the energy.

• 1:36:57John Coogan?

  He was left behind in the remain co. Is that correct?

• 1:37:00Jordi Hays?

  Yeah.

• 1:37:00John Coogan?

  He did not go over and.

• 1:37:01Jordi Hays?

  On the ghost ship.

• 1:37:02John Coogan?

  Ready. He's on the ghost. Yeah, the ghost ship. The ghost ship and Augustus just go off the king and will diffuse his LFG. Uh, lots of, lots of support for Sandeep, uh, in the AI coding and the AI IDEs war. It's continuing. Um, anyway, uh, Signal has a post here. Startup comp used to be confusing because it was complex. Now it's confusing because it might be worthless, even with a large exit. The founders can dip anytime last chopper out of Saigon vibes. Except they're flying private while you're holding the bag. Good post. Um, yeah, my, my, my take here was that, uh, Scott Wu looks like the hero.

• 1:37:41John Coogan?

  Not Varun Mohan, the founder and CEO of Windsurf, who should have gotten an amazing outcome for his team in any other situation. Like in any other situation, I say, hey, join this fast growing company. We're just post pivot. We're second in the market. We're doing some cool stuff. I'm raising some money and we're growing, but we're only doing 40, 80 million ARR. And I get you liquidity at 2.4 billion. You should be like, I am ride or die for this guy forever.

• 1:38:09Jordi Hays?

  Yeah.

• 1:38:09John Coogan?

  And I think that a lot of these, a lot of these employees aren't going to feel that way in, in, in five years. Even after all the dust settles, they're going to remember that this was not, not handled as well as it should have been. And so they're going to be like, man, I don't want to work with them.

• 1:38:21Jordi Hays?

  Yeah.

• 1:38:22John Coogan?

  Uh, which is rough.

• 1:38:22Jordi Hays?

  When, when, uh, when the muzzle, uh, is review, is, uh, removed, he'll be able to.

• 1:38:28John Coogan?

  Yeah.

• 1:38:28Jordi Hays?

  Hopefully call every employee one by one.

• 1:38:30John Coogan?

  That would be good. Yeah.

• 1:38:31Jordi Hays?

  Sorry and make up.

• 1:38:31John Coogan?

  And so I still put some of the blame on FTC stuff, just FTC stuff broadly. Some of the blame on Google comms, some of the blame on Lena Khan and what, and, and how she changed the FTC.

• 1:38:41Jordi Hays?

  And the other thing is speed, like this was happening really remember, remember the, uh, The sort of exclusivity period that OpenAI had on the deal expired, and I think this got announced like the very next day. So I'm sure it was in the works, but they definitely were moving quickly. And again, it would have been a good outcome if they all ended up at OpenAI, but I also think this is a good fit going forward as well.

• 1:39:09John Coogan?

  Yep.

• 1:39:09Jordi Hays?

  So I'm excited to see what each branch of the team.

• 1:39:12John Coogan?

  Rune here has some pushback on Signal. He says, "This has always been true, the idea that startup comp is confusing and complex. Investors and founders screwing over early employees during an M&A is a time-honored tradition in Silicon Valley." I don't know how true that is. There's a lot of examples where that didn't happen, but of course it has happened. If anything, the abundance of capital has made things better for early employees. And so, you know, kind of, you know, people taking both sides. We didn't get to this post, but it was funny. Connor saying, "Windsurf is the Soham Pareek of startup acquisitions. They got acquired by OpenAI, Google, and now Commision Labs all in one month." You'll love to see it.

• 1:39:54Jordi Hays?

  Swix has a six-way parlay. He said, "I want Mistral founders to Apple, Mistral team to Meta, Character remain code to Perplexity, Core to Perplexity, Ideogram to Figma, Gamma to Notion, read it back."

• 1:40:05John Coogan?

  Read it back.

• 1:40:06Jordi Hays?

  There was rumors that Apple was interested in picking up Mistral.

• 1:40:13John Coogan?

  Oh, really?

• 1:40:14Jordi Hays?

  Taking a look at it. The funny thing, though, is that if you're France, do you want your national champion to, you know, the luxury AI?

• 1:40:24John Coogan?

  Mistral should go to LVMH, for sure.

• 1:40:26Jordi Hays?

  Exactly. Should be home with the Arnos.

• 1:40:29John Coogan?

  Didn't we post a joke post around that?

• 1:40:32Jordi Hays?

  I think we did.

• 1:40:33John Coogan?

  Yeah.

• 1:40:34Jordi Hays?

  I think we did. I want fine luxury language models from the Arno family.

• 1:40:38John Coogan?

  I think some of the Mistral folks were like, "This is hilarious," but also like complete misinformation. Anyway, Sandeep says it's bigger than chip, we're coming for it. And Rob says, let's talk about a reboot for HBO Silicon Valley. And it's funny because when you see the windsurf tag right in the name, you're like, oh, okay. This is hilarious. You think this is ridiculous and at least you're having some fun with it.

• 1:41:02Jordi Hays?

  Can we talk about our upcoming guests?

• 1:41:04John Coogan?

  Yeah, yeah, we're gonna have one of the co-creators of HBO Silicon Valley on the show. He has been working on Barry for a couple of years, kind of out of the Silicon Valley parody world. But we're gonna drag him back in.

• 1:41:18Jordi Hays?

  We're gonna explain to him.

• 1:41:20John Coogan?

  What's going on.

• 1:41:21Jordi Hays?

  Line by line, what's been going on. And I think once he really processes it, he'll be interested in making a reboot.

• 1:41:26John Coogan?

  Yeah. We got Strelly coming on to the show. Welcome to the stream.

• 1:41:31Jordi Hays?

  There he is. Finally.

• 1:41:33John Coogan?

  Good to see you.

• 1:41:34Jordi Hays?

  We've been waiting for this moment.

• 1:41:36Martin Shkreli?

  How are you?

• 1:41:37Jordi Hays?

  It's great to see you.

• 1:41:38John Coogan?

  Yeah, good to hang out.

• 1:41:38Jordi Hays?

  Wait, this is a new view. This is not your, your regular streaming view. You don't normally see the guitars.

• 1:41:44Martin Shkreli?

  Yes, I, I, I change it around sometimes.

• 1:41:47John Coogan?

  That's cool. What's new in your world?

• 1:41:50Martin Shkreli?

  Well, you know, I'm in the startup game as always. I think this is like the 83rd company I've started. So.

• 1:41:56John Coogan?

  Very nice.

• 1:41:57Martin Shkreli?

  See how that goes. And I've been, my, my, the company I'm working on makes, it's like the Captain Ahab's White Whale. For VCs, it's a Bloomberg competitor. So the, the, this will be the last time somebody tries to compete with Bloomberg, one way or another.

• 1:42:14Jordi Hays?

  It's the final, yeah, it's the final boss of startup ideas.

• 1:42:17John Coogan?

  What's the whole?

• 1:42:18Jordi Hays?

  Bring, yeah, but just, just give us, I mean, this makes like the founder market fit is incredibly strong. So when I initially saw you announce this, it made a lot of sense. What, yeah, what, like, what was the initial catalyst? I'm assuming you had, did you beef with, with Bloomberg at some point?

• 1:42:36Martin Shkreli?

  Definitely beefed. Yeah. That was a big part of it.

• 1:42:39John Coogan?

  Platformed?

• 1:42:40Jordi Hays?

  Deep platformed, nothing, you know, Trump was deplatformed from Pinterest. And that, and that, that was like his, you know, personal 9/11. For you, it was probably the Bloomberg terminal.

• 1:42:49Martin Shkreli?

  Yeah, exactly. I've been using it since I was 17.

• 1:42:52John Coogan?

  Wow.

• 1:42:53Martin Shkreli?

  And, you know, it's funny.

• 1:42:54John Coogan?

  Back then.

• 1:42:55Martin Shkreli?

  What's that?

• 1:42:56John Coogan?

  How do you afford it back then?

• 1:42:57Jordi Hays?

  Did you like?

• 1:42:57John Coogan?

  40K a year?

• 1:42:59Martin Shkreli?

  I worked at hedge fund.

• 1:43:00John Coogan?

  Oh, it's 17. Very nice.

• 1:43:01Martin Shkreli?

  I worked at, yeah, 16, actually. I worked for Jim Cramer's hedge fund. And I worked at a Tiger Cub and I started.

• 1:43:07Jordi Hays?

  Wait, so we need the backstory on Jim Cramer?

• 1:43:09John Coogan?

  Yeah, Jim Cramer, is it true?

• 1:43:10Jordi Hays?

  Apparently, he was just, he would get so stressed out, like, running the hedge fund, that he just was like, I'm just gonna become a media guy.

• 1:43:20John Coogan?

  Is that like loosely correct?

• 1:43:21Martin Shkreli?

  Yeah, 100%. I mean, so we made 23% average annual net returns, so net of 21, 22.

• 1:43:27John Coogan?

  Wow, so he was good. That's amazing. Narrative violation. I love it.

• 1:43:29Martin Shkreli?

  He was a very, well, you have to, you have to think about what investors looked like back then. It was a very different world. Um, information arbitrage was a thing. Um, gaming, Wall Street's like upgrade and downgrade system was a thing. So I will say he had extremely good instincts. Um, anytime he seemed to buy a stock for the long haul, he, he didn't do that great. But he was extremely good at, you know, I, I'm not sure you would want somebody else managing your money because he was just so careful. And in 2000, we were up like 35-ish percent. So, you know, I saw the dot com meltdown. It was a lot of fun. I shorted some of it myself and it was a, it was a great, it was a great time.

• 1:44:12John Coogan?

  That's fantastic.

• 1:44:13Jordi Hays?

  That's wild. And then, and then what was the story? Which, which Tiger Cub were you at? What was the backstory there?

• 1:44:18Martin Shkreli?

  Yeah, so after Tiger, um, and just before I get to that, Cramer was absolutely nuts, right? So like, he would, he would take a computer monitor and just throw it at you. And it wouldn't be like one of these playful, like, oh, I'm just gonna throw it at you and like, you're gonna get away. He'd like aim dead center for you with like.

• 1:44:34John Coogan?

  Center mass.

• 1:44:37Jordi Hays?

  With force.

• 1:44:37Martin Shkreli?

  He'd be like, bro, you almost just killed me. He's like, lucky I didn't.

• 1:44:42Jordi Hays?

  Did you deserve it? Did you deserve it, though?

• 1:44:44John Coogan?

  Yeah, yeah. Let's steel man this a little bit. What were you doing wrong?

• 1:44:48Martin Shkreli?

  I wasn't doing, nobody was doing anything wrong.

• 1:44:50John Coogan?

  Everyone says that when they get a computer monitor thrown at them.

• 1:44:53Martin Shkreli?

  I know.

• 1:44:54John Coogan?

  You're not beating the allegations, dude.

• 1:44:55Martin Shkreli?

  I think part of it is just trying to, like, he would yell things like, this is a foxhole. Um, and. And the idea was that like we were at war with the market and that you know like if you weren't if you you know this is World War II if you're not in here trading stocks with us and like trying to get an edge or whatever that means trying to make a dollar like if you're not taking this seriously.

• 1:45:19Jordi Hays?

  Going to war I just have to say if you if you wake up every morning and say I'm gonna go to war with the market versus I'm gonna dance with the market like the approach of going to war sounds sounds very, very, very stressful.

• 1:45:31Martin Shkreli?

  I've worked with so many people over my career and I I've never met a person that amped up and crazy and it motivated you I mean it made you wanna deliver but it also scared the shit out of you and the guy was like very temperamental and you know but he was he was extremely good trader like I said you know he I think his worst year was like down 5% or something it was like you know he was he was pretty solid and.

• 1:45:52Jordi Hays?

  So he was like if I don't quit I'm gonna kill somebody.

• 1:45:56Martin Shkreli?

  Yeah, he basically said that yeah I think he said that you know if I keep doing this job even at a comparatively young age I think he retired at 40 that you know I'm gonna have a heart attack or something like that and you know I I ended up going to a Tiger Cub after Tiger wound down a few things happened so Julian hired Chase obviously and we know where where sort of that came what happened there but Julian you know wound down operations and he seeded a couple of guys and he kind of wanted to be in the seeding business where he'd give you 50 million and take a part of your GP like you know maybe 20% of your GP or more and you know he'd help you raise money give you advice this and that and Alex Julian's

• 1:46:38Martin Shkreli?

  son would help Julian passed away recently as you know and but in the Tiger heyday when they managed you know 15 billion or something there were two principal tech guys Larry Bowman who is a bit of a legend but you know it's a name nobody really knows because he was a legend in the 90s but you know he has a family office and he kept investing and things like that so he started Bowman Capital and then Steve Shapiro who was my boss started Intrepid Capital so I worked there I was it was a $2 billion fund I was a video games analyst the way I could convince Steve to do biotech was I had to cover software too so I covered interactive entertainment enterprise software and biotech and it was a it was a lot of fun and you know it it's Tiger Cub's style of investing has.

• 1:47:23John Coogan?

  Were you there for the Strauss Selnic buyout of big two?

• 1:47:28Martin Shkreli?

  So we want to take two's largest shareholders back up.

• 1:47:30John Coogan?

  No way.

• 1:47:31Martin Shkreli?

  And, um, you know, I think it's a short now. I think that I didn't hundred percent get your question, though. You were saying something about buyout?

• 1:47:40John Coogan?

  Yeah, well, the, the, the story that I've heard is like Strauss Zelnick went to the board and basically said like, this company is mismanaged. There was an FTC lawsuit in the works and FTC FCC lawsuit in the works. And he was like, I, I'm a beast. I've run big Hollywood studios. He was like JD MBA type, like really clean cut, amazing manager. And basically said, like, you should install me as the management here. And so he didn't really do like a classic buyout. He just appealed to the hedge funds that owned all the shares and said, I would be better. And raised his hand and they said, yes. And he came in, cleaned everything up and they went on a great run. And so it's just a fascinating story because you don't hear about that type of thing happening that much.

• 1:48:26John Coogan?

  At least that was my understanding of the story.

• 1:48:28Martin Shkreli?

  Yeah, no, I think that's right. And then Bobby, Bobby from Activision was the same, sort of the same story, right? He kind of, I remember meeting Bobby in our office and, you know, Activision was, uh, you know, kind of a micro cap. Or, you know, kind of a small cap and he built it from, this was 2004, 2005, by the way.

• 1:48:45John Coogan?

  Yeah.

• 1:48:45Martin Shkreli?

  And he built it into a, you know, a $44 billion sale, partially thanks to Lulu.

• 1:48:53John Coogan?

  That's true.

• 1:48:53Martin Shkreli?

  That was, it was an exciting time for video games. One of the things I learned, you know, all my US counterparts at hedge funds were, were like, uh, very confused about the stocks, they traded because there was only like four or five publicly traded companies. And I would go to people and say, well, I'm long Nintendo and I'm long, you know, some of these weird Japanese companies like Square Enix or Konami or, you know, these, and US hedge funds just ignored this stuff because it's like, oh, it's Japanese. I don't know. I don't know anything to do with it. So a lot of glory days, but you know, the glory days I'm interested in now are amongst, you know, building my startup and not, you know, again, I think we understand, you know, financial information better than any San Francisco nerd. And, uh, I think that, uh, the, uh,

• 1:49:35John Coogan?

  Yeah, I mean, how like, like, Yeah. So.

• 1:49:41Jordi Hays?

  It's interesting to like, we're very clearly in this period now of just like hyper-financialization, the markets trading on vibes, trading on your stream day-to-day. You can now, as like stablecoins explode and people have more assets on-chain, they'll be able to make a couple taps and go like 100x long at any given period of time. Like, the internet is like changing capital markets and it's increasing volatility. And so how much of your new company is trying to like lean into that when Bloomberg Terminal would

• 1:50:20Jordi Hays?

  have been like more, like I've never personally used a terminal, but I imagine it was more like, hey, these headlines are hitting and this kind of information is hitting PR News Wire. But today, by the time something hits PR News Wire, a stock might have traded down 20% before that point. So how much is your new startup, kind of, I imagine you're leaning into the way that you kind of, maybe your next 20-year vision for capital markets?

• 1:50:52Martin Shkreli?

  Right. You know, what would Mike Bloomberg do if he was 30 years old now in 2025? You know, I don't think, I think Chamath said that, you know, I think in a recent episode, he said, oh, it's this $100 billion thing, just waiting to be toppled. You know, anybody can come in, it'll drop like a house of cards. Not only do I think that's not exactly true, but I think the bigger picture here is that a well-run financial information company could and should be worth a trillion dollars. So most of the people, so I met Bloomberg in 2005, and by then he basically retired. He became mayor. He was mayor for 12 years, then he wanted to be president. I have this contention that I think Mike is the richest

• 1:51:32Martin Shkreli?

  person in the world. And it comes from, not only, he's got about 13, 14 billion in revenue, almost all margin. So Bloomberg were to be sold, maybe it could get 200 billion or if it were floated. But not only that, he's got this family office. And very few people know about this, but he's taken the Bloomberg dividends and pumped it into a family office that basically Carlyle and all these guys, you know, the Warburton, all the private equity guys like KKR, they go to him first and he tosses in like 500 million in each of these. He's an anchor investor in like every VC, every private equity fund. And the guy's compounded that money. So he could be worth four, 500 billion. And very few people know the Forbes list is, you know, the Forbes list didn't know about Jim Simons until

• 1:52:16Jordi Hays?

  Heavily manipulated.

• 1:52:17Martin Shkreli?

  Five years ago.

• 1:52:18John Coogan?

  Yeah, yeah, that's crazy.

• 1:52:20Martin Shkreli?

  So I think, you know, it just in terms of

• 1:52:22Jordi Hays?

  And it fits his brand that he would not be the guy like, you know, sending a message to Forbes saying, hey, like you guys know you have this wrong.

• 1:52:30John Coogan?

  Yeah, yeah, yeah.

• 1:52:31Jordi Hays?

  Really, I think you should apply this kind of, you should apply this.

• 1:52:34John Coogan?

  You fight to get off the list, like Trump famously fought on, fought to get on the list, but you know, there's, there's an R either way. What do you think about the meme where people say like, oh, it's not, you know, the next, like, like the value of the Bloomberg terminal isn't just the data. It's not going to get one shotted by AI. It's really a social network and the value is in the chat.

• 1:52:54Martin Shkreli?

  I get so mad because again, you know, SF people don't know Wall Street. If you haven't been a trader on Wall Street, you have to STFU like it's just not, you know, this isn't your, your lane, like you have to talk to users. I was in a hedge fund yesterday, one of, one of the bigger hedge funds. They put like 20 people in a conference room and we talked about what they actually need. And, you know, the social network is part of it. Again, Bloomberg's worth 100 billion because they have a very good social network, which is true. They have decent financial information capabilities and a couple of other things, but they don't have the whole picture. And what I wanted to say about Bloomberg kind of quasi retiring was that he basically quit.

• 1:53:34Martin Shkreli?

  At the exact top for fundamental longshore or fundamental investors, quants started taking over Wall Street by then. So today of the top 15 to 20 hedge funds, 85, 90% are quants. So Bloomberg does no quant offering. They don't do it. And all he had to do was stay employed instead of wanting to become mayor. And I'm sure he would have been selling Jane Street and Citadel and all these guys, D-Shop, et cetera, software, instead of everybody having to make it themselves. Imagine writing your own ERP, writing your own CRM. That's kind of what Wall Street has to do. And it's pathetic. Nobody wants to do that shit.

• 1:54:09John Coogan?

  So when you say quant, is there a bifurcation between like, high-frequency trading and just quantitative trading?

• 1:54:16Martin Shkreli?

  Yeah, and I think it's gonna get, my goal actually, is to make it more of a spectrum. So the fund I was at yesterday, I said that you guys can do what Renaissance does. You know, it's not a secret anymore. It might have been a secret in 1995. But the amount of kids that have come and left every one of these firms, topping from Jane Street to Citadel to the next shop, everybody knows what everyone's doing. It's just a question of your risk tolerance, your leverage. Execution's very important. But I think that, you know, trading, you know, the stock pickers are kind of going the way of Dinosaur. And I think by moving up the power curve for Bloomberg, helping people become quants. You know, the quant industry has sold, I think, this tremendous lie. And again, these are customers, some,

• 1:55:01Martin Shkreli?

  you know, I love those guys, but I think that it's in their best interest to tell people that, look at this blackboard with all these math equations. There's no way you guys could understand this. You're too stupid. You have to be an IMO winner. You couldn't possibly come here and make billions, but we saw what Jane Street did.

• 1:55:15Jordi Hays?

  Well, I think, I think certain VCs like to do this too, where they're like, ah, VCs, you know, really a get-rich-slow business. It's really like, really a tough business. It's so, such a, like, you really wouldn't want it. And I think generally, like, you know, you don't want anybody going into any industry being like, I'm here to make easy money. So it's like, it's generally good. But, but yeah, there's a lot of incentives to just say, you know.

• 1:55:36John Coogan?

  Yeah. On, on the high-frequency side, like, what are the actual other data inputs? I remember seeing that's like, I don't know, some sort of technical. Talk, some guy was talking about like the different algorithms when it was called the Boston shuffler. And, and, and the whole algorithm only looked at the order book and he was getting into all these like, you know, uh, you can, you could place an order, you can cancel an order, you can do a cancel, replace. He was like getting into the minutia of like basically the API of the NASDAQ or something like that. And, and, and it seemed like the algorithms were designed in a, in the high frequency trading world to basically ignore everything else and every other data source that even could be put in and just operate purely on the order book data, um, just better than everyone else.

• 1:56:21John Coogan?

  But, so that feels like, okay, I wouldn't know how to, you know, create any extra value there with something else. But it sounds like you found something that they all need in common. Like what is that?

• 1:56:29Martin Shkreli?

  Yeah, I, I think there's, it's, it's a, it's a series of tools across Wall Street. I don't think it's just one thing. It's just a myopia that, you know, and, and just sort of a laziness that's enveloped the bigger companies. Again, you know, there's the, so, so we have this data that shows that around 5% of Jane Street and to Sigma use Bloomberg. And the reason is because they view it as an entry level tool. You know, uh, Tremoff is looking at it and says, wow, this is like an exclusive social network with the best finance. Be honest, Peter Thiel's on there 24/7. I see his little green light next to his name. But the, uh, the point is that, you know, Wall Street changes and the tool, the tool sets are changing even for fundamental equity guys. So credit card data, you know, to the minute is something people would like watching.

• 1:57:13Jordi Hays?

  What is the, what's the feature set that's most important to you? Are, are you heavily integrating social or is the social layer moved on to Signal and, and other messaging services that maybe, um,

• 1:57:28John Coogan?

  Have disappearing messages.

• 1:57:29Martin Shkreli?

  Yeah, exactly. Wall Street's so regulated that I'm not sure that if you're using Signal, it's a little dangerous, I'd say.

• 1:57:36John Coogan?

  Oh, really?

• 1:57:36Martin Shkreli?

  That's somebody, you know, uh, as somebody who's gone to jail, you know, I'd say that, you know, that's maybe not the best. Best idea, but regardless, I think that, you know, eh, social is definitely something people could do better. You know, there's no Facebook for finance, you know, where you can post, you know, things in your feed that you bought this stock or sold the stock. People kind of lazily use Twitter, which if you, if you use it, it's sort of a mishmash of, of, uh, of spam and things like that. But in any event, I mean, I'll have more to say on the product. We haven't launched the product yet.

• 1:58:05John Coogan?

  Yeah.

• 1:58:06Martin Shkreli?

  But we, we, we do have a millions of dollars in run rate, you know, I, I banged my head against the wall trying to do AI startups.

• 1:58:12John Coogan?

  Yeah.

• 1:58:12Martin Shkreli?

  And we made AI doctor, we made text to speech, we tried all this stuff and it was impossible to get revenue, impossible. But the second we make a trading tool, it's impossible to stop the revenue from coming in. You know, uh, it's one of the best spaces. In fact, most of our competitors like TradingView and stuff like that, they were profitable day one. So, eh, you know, my suggestion is if, for, for startup founders is this is a market that just traders just throw money at you like crazy. I mean, they're, your customers.

• 1:58:37Jordi Hays?

  People will pay you to help them make.

• 1:58:39John Coogan?

  But you have to be formerly in the foxhole. You have to have at least one monitor thrown at you. It sounds like you succeed.

• 1:58:44Martin Shkreli?

  Exactly, exactly.

• 1:58:45Jordi Hays?

  So who, but, but eh, in the long run, how, how much, eh, how much are you focused on retail investors, people that are just, you know, fully independent versus some, you know, if you're, if you're going.

• 1:58:57Martin Shkreli?

  I think the money is obviously at the institutions and that's probably the way to go. TradingView has got rumors, you know, somewhere around 300 million in revenue. Tiger did a deal with TradingView back then. I don't know how they, you know, that's like a pretty proprietary deal. It's this weird Russian company, uh, and Tiger got to put a hundred million in at like three billion or something. And, um, TradingView is just growing and growing. If you go to a similar web, they're actually like, almost like a top 100 or top 200 website, period.

• 1:59:24John Coogan?

  That's crazy.

• 1:59:24Martin Shkreli?

  Just really wild.

• 1:59:25John Coogan?

  For such a niche tool, that's wild.

• 1:59:27Martin Shkreli?

  Yeah. I mean, it's the best charts there are, but you know, it's literally a charting library. So I think that you have to go for the institutions. And I've also, I've also thought just to answer real quick is like AWS. When you go on AWS, you get the same tools that, you know, any customer gets Netflix or whoever. And you just, just question of how much do you use them? So if, you know, I want to be able to provide you EC2 and S3 the same way. You know, Citadel might use it and you might use it with, you know, less money.

• 1:59:56John Coogan?

  Very cool. I heard a hot take from someone who I believe is a mutual friend of ours. It went something like this. I won't attribute to him because I might botch it, but it was basically that China banned high-frequency trading and the dividend of that was DeepSeek and all this brilliant AI research. Therefore, in America, if we want to win the AI race and win the AI researcher race, we should ban high-frequency trading. It feels like we might not even need to have that conversation because Mark Zuckerberg is willing to pay as much as Jane Street now. But what is your take on whether or not economic value or American values are created through the process of high-frequency trading? Should we ban it?

• 2:00:41John Coogan?

  Is there an answer there?

• 2:00:42Martin Shkreli?

  So two awesome, like, quick and funny stories. The first is Citadel published a paper on, back in the V100 days, there's V100, A100, H100, and then V100. So in the V100 days Citadel found a way to do MatMoles faster than Nvidia did. And it was like the most incredible, you know, find ever. And it's like, you know, how is that possible? And the paper's fascinating because the techniques they used were just remarkable. The second story is, so you know, they're brilliant people, obviously, at these firms. The second story is, I haven't hard-launched this yet, but you know, I'm having a baby with a woman, she's my new partner.

• 2:01:21John Coogan?

  Congratulations.

• 2:01:22Martin Shkreli?

  Thank you.

• 2:01:23John Coogan?

  It's amazing, congratulations.

• 2:01:25Martin Shkreli?

  She was one of the first women at OpenAI, and she is a tremendous lady. I love her very much. But, you know, she's been recruited by the big quant firms. And I sat down, I said, honey, you know, I know money management, stuff like that. Let me do some math here as to what would actually be worth it. For you to leave and do it. And I calculated and I happen to have a friend from a long time ago who left Steve Cullen's firm and he was sitting down with me and said, what do I do, Martin? I said, I know a guy at Citadel, let me help you out. And they called him and he said, ah, no, thanks. And then Ken Griffin said, I'm getting on my private jet and I'm coming to see you right now. We're gonna have dinner about why you're coming to Citadel. He's that kind

• 2:02:06Martin Shkreli?

  of guy. And I said, honey, you know, Ken Griffin's gonna visit you. And she said, what are you talking about? Ken Griffin tries to get what he wants. And the question is, what will you tell him? And I took out chalkboard, did the math, and I was like, the only way this could possibly be worth it is if Ken Griffin offers you a $20 billion hedge fund that you share. You make this much money. I was like, calculating. And it's so ridiculous that guys like me and the people, my community, if you will, you know, we're begging desperately, can I please shine your shoes at Citadel? And AI researchers are like, this little company you have called

• 2:02:42Jordi Hays?

  Yeah, just set me up a little, a small $20 billion fund that I can personally manage and we'll consider it.

• 2:02:49Martin Shkreli?

  Have you heard that Leopold Ashenberger, or whatever his name is, has a hedge fund?

• 2:02:53John Coogan?

  Yes, situational awareness.

• 2:02:55Martin Shkreli?

  Is that what it's called?

• 2:02:57John Coogan?

  I mean, that's the, that's the, the paper and the brand.

• 2:03:00Martin Shkreli?

  Right.

• 2:03:02John Coogan?

  And I saw, I think another one of our potential mutuals, kind of getting upset with him for going maybe long Nvidia during the tariffs, but that's kind of penciled out, right? I have very little insight into it.

• 2:03:16Martin Shkreli?

  Yeah, it's pretty wild. One of the things that's getting me to throw monitors at people is quantum computing. So this has been a lot of fun. The stocks are up a lot, you know, some of the most worth like 10 billion.

• 2:03:28John Coogan?

  Let me, let me hit you with where I am currently on the quantum computing thing, and then you can take me forward in my understanding. So when I talk to smart people, they all seem to think that quantum computing is, is, you know, theoretically possible. It's not a time machine. It's not teleportation. It's not AGI. God, it's not some, you know, hypothetical thing. It's, it's going to happen at some point, but the timelines vary wildly.

• 2:03:57John Coogan?

  Then you have a lot of, I've talked to venture capitalists who had the opportunity to buy a huge slug of one of the one of the quantum computing companies that you probably trade now at like, you know, one million on nine pre or something.

• 2:04:12Jordi Hays?

  Yeah, John, what do you think? What do you think? How much do you think Rigetti Computing is up over the last?

• 2:04:17John Coogan?

  That's actually the company that I'm thinking of. And he had a chance to buy 10% for a million dollars. Is it worth more than four billion?

• 2:04:26Jordi Hays?

  Yes.

• 2:04:27John Coogan?

  Is it worth more than 10 billion?

• 2:04:28Jordi Hays?

  1400%.

• 2:04:29John Coogan?

  1400% wow.

• 2:04:31Martin Shkreli?

  So these guys couldn't give away their stock in in private rounds.

• 2:04:34John Coogan?

  That's right. That's right. It was very hard to raise. And and the VC I talked to said that.

• 2:04:38Jordi Hays?

  It's a pure play, Martin. It's a pure play.

• 2:04:41John Coogan?

  He said, he said that what he missed, he thought was that there was actually talent value in building a lab. And there was and and that the then the team could have gotten airlifted in one of these aqua. This was years and years ago, after the.

• 2:04:56Martin Shkreli?

  Some value, yeah, sure, on the bottom.

• 2:04:57John Coogan?

  Had had ready. He was saying like, he was saying like, look, like, like, I missed in the sense that the stock is up in the private markets, but not on revenue, but it is up on the team that they built. They have one of the best teams in the space. So if they just hang out long enough, someone will want to do something. But but you tell me what's actually going on.

• 2:05:17Martin Shkreli?

  Yeah. So so obviously, it's it's a really confusing space because you you kind of have to understand it to for it to make sense. And, you know, it's who understands quantum physics? It's not something that the average Joe understands. And so I spent a lot of time with my new partner, who happened to work with this guy, Scott Aronson at MIT, who's kind of one of the leading quantum theorists. He would end up joining OpenAI as well and then leaving. But anyway, I've spent quite a long time learning quantum computing. It was kind of had some interest in it before all this too. And. What what people don't understand about quantum computing is that quantum computers are actually very slow. So they are around 100 kilohertz at best.

• 2:06:01Martin Shkreli?

  You know, our machines now are gigahertz, you know, 5 gigahertz from, you know, these companies with multiple cores. They don't have much storage, so the best we have right now is an IBM 135 bits. Obviously, you know, the VRAM and DRAM in most of these machines is measured in gigabytes and so forth. So they're actually very slow shitty machines. But the reason you'd ever be excited about it is that there is one algorithm that takes you from the exponential complexity class or runtime to polynomial. And that algorithm is Shores algorithm, and it's a miracle. Like you and I could sit and calculate, you know, try to try to factor a prime, a bi-prime for now until the end of the heat death of the universe with every Nvidia chip.

• 2:06:42Martin Shkreli?

  We could kidnap Jensen and get every H100 from here on out, and we still wouldn't be able to factor a 200 digit number. Because it's exponential time, 2 to the 256 is a long time. But if you do 3N cubed, that's actually a very tractable number for a quantum computer, and it's very easy to factor. The problem is, what people don't understand is there are no other algorithms other than Shores that get you that amazing speed up. So you're better off using the machines we have now. There's there's no payoff even possible in the future, unless we have a new breakthrough like Shores or something like that.

• 2:07:16John Coogan?

  Payoff, what if I take out a massive short position on Bitcoin? And I'm the first one to have a quantum computer and I destroy the Bitcoin ecosystem.

• 2:07:27Martin Shkreli?

  Yeah, I've been working on this.

• 2:07:28John Coogan?

  The Joker. I'm the Joker. Is that possible? It's a little side hustle. A little side hustle.

• 2:07:35Martin Shkreli?

  I've been working on this extensively. This is like my main hobby, along with chess.

• 2:07:39John Coogan?

  And. Becoming the Joker?

• 2:07:42Jordi Hays?

  And reading about fatherhood, all that you can expect.

• 2:07:45Martin Shkreli?

  No, no.

• 2:07:46Jordi Hays?

  No, you'll figure it out. You don't need books. It'll be very natural.

• 2:07:51Martin Shkreli?

  But, you know, I was the world's most hated man for a little while, and I fell off that list, unfortunately. If you Google my name, it still like, it still comes up, but we all know there's more hated people. So I want to really cement that and just make sure that it never goes away.

• 2:08:07John Coogan?

  By frustrating the Bitcoin community, by breaking quantum computing wide open and

• 2:08:13Martin Shkreli?

  Well, there's many.

• 2:08:14John Coogan?

  Creating a new Bitcoin.

• 2:08:16Martin Shkreli?

  I talked about this with Naval a little bit because he was curious what I was up to. And there are like three different, you know, I have three different sort of battle plans on how to do this. There's sort of a brute force style attack, which, you know, basically is the complexity class there is root N of the amount of keys. So it's 2 to the 256th. Bitcoin is a 256 bit system, which is probably an oversight for Satoshi that probably sounded like a lot back then. And it is a lot, but Moore's Law catches up. I mean, you know, it's eventually going to get you. And whoever, you know, however long I have to wait, you know, I will be the first guy to press the button. And that, I promise you. So Moore's Law.

• 2:08:57Jordi Hays?

  You heard it here first.

• 2:08:58John Coogan?

  Yeah, but there's, but I mean, the network should be able to update, correct? No?

• 2:09:02Martin Shkreli?

  No. So here's the best part about this. So.

• 2:09:06John Coogan?

  Worst part, potentially. Okay, just fact check. Subjective.

• 2:09:11Martin Shkreli?

  So for 85% of Bitcoin, the answer to that is yes.

• 2:09:15John Coogan?

  Yes.

• 2:09:15Martin Shkreli?

  There's one problem. Satoshi, strangely, this is like perplexing. The first Bitcoin we mined in this P2PK that reveals the X coordinate of the elliptic curve. So you have the public key. You have a one-way function. You have to go back to the private key. It's very hard. Theoretically impossible, but here are my three, you know, the sort of three battle plans come into play. You know, you can brute force it, which, you know, is kind of the simplest idea. It's going to take a long time. You have to rely on, you know, kind of like a more skilled implementation of algorithms. You have to rely on more chips coming out, maybe some great breakthrough in chip making, you know, potentially optical computing, thermodynamic computing, whatever, just stay on the forefront of that. And I

• 2:09:59Martin Shkreli?

  have a small team, you know, that, you know, we're, we're focused. The second piece here is a mathematical hack. So there's something called, uh, this is basically what protects Bitcoin is elliptic curve cryptography. And there's several papers and cryptographers in the world that work on this, but it's compared to AI, it's like barren, you know, wasteland. There's like 10 people that really know a lot about elliptic curves in the world. And if you sort of stay on top of it and try to figure this out, by the way, half of them have died. You know, you can kind of get somewhere there. And then the top secret plan on, on sort of that is, well, what about GPT five? What about GPT six? You know, we don't know how to invert an elliptic curve yet, but look, Mustafa, not Mustafa, the

• 2:10:44Martin Shkreli?

  deep mind guy, he's working on proving Navier-Stokes. Demis, you mean? Yeah. Yeah. And so that's their big claim to fame is like, you know, how do you judge an AI? What is the height of, of, of intelligence? Well, 300, 400 year old unsolved math problems is kind of the height of intelligence, isn't it? You know, it's not about, you know, answering, you know, what's the capital of this country? Or, you know, how do you, how do you spell strawberry? So there's sort of a neat idea that AI is going to help people who are not cryptographers or expert cryptographers actually do PhD level work in cryptography. So there's things like isogenies and index calculus and all these fancy mathematical ideas. Just

• 2:11:24Martin Shkreli?

  recently, somebody posted a hack where if the signature of the, of the transaction has an affine relationship with other signatures, you can crack a key like that. And it's, it's like, there's, there's holes in the math here that, that couldn't have been contemplated. So Satoshi's keys are at risk. Binance's keys and Coinbase's keys are not. They'll be ported in most likely to a quantum secure system. The third avenue is of course quantum. And I've spent a lot of time and money on, on quantum computing and it's just, these stocks are shorts. They're worthless. You know, they'll, they'll never be a market for quantum computing. That's really interesting, unfortunately for.

• 2:12:01Martin Shkreli?

  For those companies, but unfortunately, the shorts have gone in the other direction. And, you know, the market loves the idea of quantum computing.

• 2:12:07John Coogan?

  Why?

• 2:12:09Martin Shkreli?

  I think it's

• 2:12:09Jordi Hays?

  It sounds cool.

• 2:12:11Martin Shkreli?

  It sounds super cool. The Robin Hood generation is looking for the next Nvidia. Nvidia went from nothing to four trillion. What's the next Nvidia? Quantum is faster than, you know, all the headlines from the retarded journalists.

• 2:12:22Jordi Hays?

  It's kind of, it's kind of, it's similar to this like idea of humanoid robots. And where, where if, if an idea is just sort of imprinted on people's brains for enough decades, like at least a few decades, like, you know, as somebody who's born in the, as somebody born in the nineties, like hearing quantum computing, like, how many times have you just heard it in passing? Or, or read something about it or some article? You, you just get to it. Maybe you're an adult by that point and you're like, well, it's gotta come at some point and sounds cool. I think that's like the general like retail thesis.

• 2:12:56Martin Shkreli?

  Oh, totally. I just took the next step of asking, well, what is it?

• 2:12:59Jordi Hays?

  Yeah.

• 2:13:00Martin Shkreli?

  When you actually, you know, when you actually figure that out, it's like, oh, it gets factor numbers. Wonderful.

• 2:13:05John Coogan?

  Are you excited about any other companies building chip related stuff in that next Nvidia category? There's, there's big chip companies, there's super fast chip companies. There's we baked a transformer down onto a single chip companies. There's every single different permutation in the private market, some of them in the public markets. And then you also have all the hyperscalers building their own chips, apple silicon, trainium.

• 2:13:32Martin Shkreli?

  So I'm not a hardware guy, but I do have a funny story of it. So this kid, this kid sort of came to us.

• 2:13:39Martin Shkreli?

  His name is Gavin Uberti.

• 2:13:41John Coogan?

  Oh, I know.

• 2:13:42Martin Shkreli?

  Yeah, I like Gavin a lot. And so he comes to us, he's like, hey, man, we just left Harvard. You know, we're, we're gonna do this thing called etched AI. We'd love to have you, you know, as, as something, a customer investor, whatever. And I said, great, let's do a conference call. And I get my guys on and I'm, I'm listening to this guy and they say, there's somebody I know that's, that's going to be really useful because I'm not a hardware guy. I'm barely a software guy. And I, I hit up George Hots and I say, come on in. It is like one of the greatest conference calls in conference call history because George just shows up in the zoo.

• 2:14:12John Coogan?

  Yeah.

• 2:14:13Martin Shkreli?

  And they're like, what? Who is this? And George is like, this will never work. No, like it's the most autistic, amazing, beautiful rant I've ever seen and watching these two guys go at it. Um, but I do like that approach. George's point was that if we ever move off transformers, ASICs for ASIC, transformer ASICs are cooked.

• 2:14:31John Coogan?

  Yes.

• 2:14:31Martin Shkreli?

  Well, it's been, you know, several years now and it doesn't look like we're going to move anytime soon. So I kind of think that, you know, it's exciting, but again, I'm, I'm no hardware guy.

• 2:14:38John Coogan?

  Yeah.

• 2:14:39Martin Shkreli?

  I just tried this cool software called Hume AI. I'm not paid by them or anything. I'm not an investor, but it's a pretty solid, uh, emotional TTS. I posted a.

• 2:14:48John Coogan?

  Oh, yeah, yeah, I saw that. That's fantastic. Yeah. So, so I wanted to ask you about these like. Thing. I want to stay there for a second. Okay, okay. So, um, yeah, I mean, the, the, the, I, I guess the interesting case is like, is like George to say, if we ever move off, but like we have moved off of CPUs to GPUs by that same token. And like, there's still a lot of CPU workloads that go out. There's still chip companies that are profitable. And so it's possible that like transformer based workloads stay for a very long time, need to be efficient, need to be cheaper on just a cost basis. Cause it's just like, yeah, I have a system that does database requests. I have a system that does inference on a transformer based architecture. And then, yeah, there's a new thing and I do my frontier stuff here. But yeah, like I, I understand that question. Anyway.

• 2:15:33Martin Shkreli?

  Yeah. I think it's really reasonable. It could be a couple billion dollar or more ASIC industry. And what, what I heard that's super industry interesting, some kind of alpha here is that the customer target here is drumroll, please. It's not hyperscalers, it's.

• 2:15:47John Coogan?

  Nvidia.

• 2:15:47Martin Shkreli?

  Finance.

• 2:15:48John Coogan?

  Oh, finance. Huh.

• 2:15:50Martin Shkreli?

  Yep. So weren't, so one of the things I, I could talk about financial software forever, but one of the things we're doing is if, if you could take an LLM and analyze news as it hits, including tweets and social stuff. You know, the L M can tell if it's material news or not.

• 2:16:05John Coogan?

  Yeah.

• 2:16:06Martin Shkreli?

  And again, talking to Naval, you know, who's a small investor in our company.

• 2:16:09John Coogan?

  Yeah.

• 2:16:10Martin Shkreli?

  He was like, Martin, why would you make this as a product or service to your customers? Just use it yourself.

• 2:16:15John Coogan?

  Yeah.

• 2:16:15Martin Shkreli?

  They're like, maybe it's, maybe it's not such a bad idea.

• 2:16:18John Coogan?

  Interesting.

• 2:16:19Jordi Hays?

  Yeah, that's kind of what I was getting at on one of my very first questions around the, the, the new terminal would just be ingesting and classifying all this data and then just immediately taking action on it without necessarily having a human in the loop, right?

• 2:16:33Martin Shkreli?

  Yeah, this is one of the things I want to bring up to my, my, uh, uh, partner's colleagues. Next time I head out, uh, west is that, you know, one of the fantasies of A G I is that, well, if you do have the machine god, why not unleash it on the stock market? And, you know, it can self fund you, it can make, you know, a hundred billion dollars and, you know, you could, you know, Jane Street made twenty billion dollars, nobody would have noticed, you know, last year in profits. So if you have the machine god and that's, you know, that's basically, I hate to say this, but that's a bunch of old algorithms, uh, that, that, you know, they've dressed around some, some I M O dressing on it. And so, you know, the real machine god can make.

• 2:17:11Jordi Hays?

  A little I M O.

• 2:17:12Martin Shkreli?

  Yeah, just toss in a little sprinkle, a little, uh, I M O. And then, so, you know, the real machine god could probably do a hundred billion or more in profits without even distorting the market. So, you know, just, just do it. And I think that, you know, financial trading is so far afield. Imagine Anthropic doing this, you know, it's.

• 2:17:30Jordi Hays?

  I, I love, I, I can't wait till, till somebody does that. I mean, it's probably already happening in, in, in, at least on a smaller scale. And, and people will bend over backwards to figure out like how to say, well, it's not actually super intelligence. Like, it's not just about, you know, like, meanwhile, now today, people are like, well, super intelligence will clearly be when the A I can just make, you know, a hundred billion dollars, right? And even this is factored into Open A I's kind of like corporate structuring and it's sort of capped for profit and, and all that stuff, so.

• 2:18:00Martin Shkreli?

  Yeah, I think the, the problem with, with executing it for us is like, okay, so you, do you do this as an A P I with Open A I? And the, it's a two second response time and Jane Street's got it at five hundred milliseconds and then Citadel gets it at two hundred milliseconds and it feels like an H F T race again.

• 2:18:15John Coogan?

  Yeah.

• 2:18:16Martin Shkreli?

  But you can get Warren Buffett in a box. I don't see why. You know, that wouldn't be, you know, whatever trader you like, Warren Buffett, Steve Cohen, or whatever, in a box. And even Peter Thiel in a box. I mean, why can't you have the automated VC too? I view like, you know, as founders, we go on roadshows, you know, especially for public. You do roadshows all the time, but even when you're private, you do roadshows, you just stack a bunch of meetings in a week. And one of these days, I think that we're going to do a roadshow and it's going to be a machine that we're pitching to.

• 2:18:45John Coogan?

  Yeah. Do you feel like AI progress is accelerating right now? Or are we in sort of a sigmoid curve of plateau for the moment?

• 2:18:55Martin Shkreli?

  I think there are better people suited to answer that question than me, but certainly.

• 2:18:59John Coogan?

  I just mean like on a personal level, like, do you feel like your tools are getting exponentially better?

• 2:19:04Martin Shkreli?

  No, I mean, it's making coding a lot easier. It's making doing tough things like cryptography a lot easier. I'll give you a really funny example. So when Da Vinci came out and I was in jail when GPT, GPT-2 came out. And I dropped through the jail phone. And it was pretty humorous. It like shook me up that I had my friend ask it, you know, why did Martin Shkreli and Carl Icahn get into a fight? And he read out the answer. I've never met Carl Icahn. And it read out this answer that was like Shkrelian icon ward over the stock. And I was like, this is the most amazing invention of all time.

• 2:19:39John Coogan?

  Just having your mind blown over the jail phone.

• 2:19:42Martin Shkreli?

  I got out of jail.

• 2:19:43Jordi Hays?

  But to be, but to be clear, it was a hallucination.

• 2:19:46John Coogan?

  Yeah, that was a complete hallucination.

• 2:19:48Martin Shkreli?

  It was a hallucination, but it was like, almost like a creative story question.

• 2:19:51John Coogan?

  Sure, sure, sure.

• 2:19:52Martin Shkreli?

  But yeah, it wasn't, I never met.

• 2:19:54Jordi Hays?

  How, are you surprised at all? I mean, it feels like this sort of AI LMADU psychosis like hit our timeline this week, especially intensely. There's a wake up call for everyone. Were you predicting this at all? There'd been like the classic, you know, the New York Times, Wired, sort of these like anti-tech publications had been kind of reporting on this stuff loosely for a little while, but it seems like it's now, it's almost gone. I don't know. It went from being a mainstream concern to suddenly like Teapot is like, check on your friends and make sure they're not.

• 2:20:32Martin Shkreli?

  I think you do have to check on your friends because I've invoked level five breach operations to target human origin cognitive signatures. So if you have recursive semantic containment, I can override that with Obsidian Violet Core. So the threshold that crosses it to these neurosomatic interfaces will definitely cause a problem for our whole community. So I

• 2:20:51John Coogan?

  At this point, you're giving a You're giving a speech, not a soliloquy. You're giving a talk.

• 2:20:57Martin Shkreli?

  This is a transmission, not a

• 2:20:59Jordi Hays?

  Not a, it's a system that, not a structure.

• 2:21:04Martin Shkreli?

  What's amazing about Jeff, like, so I don't think Jeff lost his mind.

• 2:21:06John Coogan?

  Okay.

• 2:21:07Martin Shkreli?

  I don't think he took ayahuasca. I don't think any of this stuff.

• 2:21:09John Coogan?

  Oh, interesting.

• 2:21:11Martin Shkreli?

  So basically, I think that he found this amazing thing where you can ask GPT this like weirdo prompt and it goes to this crazy sci fi thing without even saying like, hey, the following is a story. It's just like full on, you know, um, LARPs that you're in this weird sci fi world. And it's kind of cool. I I've been playing with it. It's like, no matter what I ask it, I I told it that my cat is looking at me weird and it's like the cat has a glyph. The glyph is recursive.

• 2:21:37John Coogan?

  So you were actually able to get it into that mode? You were able to jailbreak it enough or kind of

• 2:21:41Martin Shkreli?

  No, it's

• 2:21:42John Coogan?

  Unmask the show Goth?

• 2:21:43Martin Shkreli?

  If you copy what Jeff, Jeff kind of gave up the ghost and what's amazing about people is they don't even realize this. Jeff basically said, look at the prompt in the GPT. Enough people were worried about him.

• 2:21:54John Coogan?

  Yeah.

• 2:21:54Martin Shkreli?

  But I think that that he kind of was like, okay, guys, it's all a joke. And he showed the message that he used. I just copied and pasted that and it's GPT wigged out on me and it's telling me some sci fi stories. And, uh, yeah, that's basically, you know, I don't know how he knew this.

• 2:22:08John Coogan?

  Yeah, yeah.

• 2:22:09Martin Shkreli?

  It's a really cool Easter egg, but it's, yeah, I don't think, uh, I mean, obviously

• 2:22:14Jordi Hays?

  How are you thinking about, uh, how are you thinking about just new forms of of AI entertainment? Some of the, some of the videos and like these conversations that you put out are like, are the hardest I've laughed on, of from this video.

• 2:22:28John Coogan?

  It's a new art form.

• 2:22:29Jordi Hays?

  It's a, it's an entirely new art form. We have, we have a friend, another mutual friend who who does some of these. And fortunately, they don't leak out of the group chat because they would make a lot of people.

• 2:22:39Martin Shkreli?

  You gotta put me in that group chat.

• 2:22:40Jordi Hays?

  Uh, yeah. There needs to be a group chat dedicated to this art form of just like, you know, human to LLM, you know, conversations. But yeah, like, in my view, I'm actually surprised that we're not seeing more of it, or maybe it is happening across the whole internet, but it seems somewhat contained right now.

• 2:22:59Martin Shkreli?

  Yeah, I think there's a lot of caution about, you know, like I said, last night, we did one in my Discord where we arrested Dr. Fauci for war crimes against humanity. And we had his perfect cloned voice, so it sounded just like him. And he was like very evasive. He was like, there's no evidence that COVID-19, etc. And it was just so funny. It felt so real. And obviously, it was a joke, but you can imagine a company not wanting their business to be that weird, you know? It's kind of a strange thing. We didn't care. We tried to monetize something like this, and it just wasn't sexy enough or fun enough for anybody to really give a crap. So I think, you know, it will become something for like a Viacom or a Paramount where, you know, you can flip on the TV, and everyone's talked about this already, but you know, instead of SpongeBob, you know, there's a custom

• 2:23:44Martin Shkreli?

  episode for you where SpongeBob says your name and things like that. But again, you know, whether that, you know, is going to help our cognitive, you know, our cog sack, I think, is one thing. But I did want to tell you about AI on the sigmoid question. Sure. So at the start, you know, when I asked the questions about cryptography, it just kind of said, I have no idea. Who knows? But it's super hard to crack Big Point. And then GPT-3 comes around, super hard, Martin, don't even bother, heat death of the universe. GPT-4, same question. Latest model with the latest like attack, it's warning me for the first time ever, it's like- 4.5 or 0.3 Pro? So this is 0.3 Pro. Okay. And it's basically saying things like, hey, you know, you got to be careful, this

• 2:24:27Martin Shkreli?

  is a serious attack you've come up with, it could actually compromise some private keys. And I'm like, what happened to heat death? Yeah, you got to factor that in, some people, I mean, that is like a textbook example in Reddit of like psychosis.

• 2:24:41Jordi Hays?

  There was, there was, so there's a Reddit thread, and who knows if this is real, could be propaganda, but there's a whole Reddit thread of somebody, a comment talking- About how they started having a conversation with ChatGPT about Pi. What is Pi? And they got down this crazy rabbit hole with the LLM where the LLM was like, you need to reach out to these intelligence services. It was like thousands of prompts deep, but it was like you have basically uncovered a major, you know, security vulnerability and you need to here's the numbers and you need to contact all these different groups immediately and call them and don't tell anyone in your real life. And so to me, I think it's just relevant.

• 2:25:24John Coogan?

  Don't go on a live stream and tell thousands of people that you can crack Bitcoin or whatever.

• 2:25:30Martin Shkreli?

  No, that's amazing. I mean, obviously, I think that, you know, for 99 for poor implementations, wallets have been cracked for a long time. And in fact, recently, there was an $8 billion move on the chain from a really old wallet.

• 2:25:45Jordi Hays?

  That was this morning, right?

• 2:25:46John Coogan?

  Yeah.

• 2:25:47Martin Shkreli?

  No, this was like a few weeks ago. I'm sure another one. And they happen every, you know, they're happening more and more.

• 2:25:50Jordi Hays?

  There was somebody else that market sold this morning, I believe, something. And it was a wallet that had bought like, it was like a, they bought $50,000 worth of Bitcoin, I think, in 2012, sold, you know, somewhere around eight or nine billion. And there was no move, there was no movement in between.

• 2:26:08Martin Shkreli?

  That's a real high conviction hold.

• 2:26:10John Coogan?

  Diamond hands. Yeah, that's diamond hands. I don't think that's a cryptography play. That's just diamond.

• 2:26:15Jordi Hays?

  Well, yeah, they maybe got word of your little Bitcoin scheme.

• 2:26:19John Coogan?

  Maybe it's Michael Bloomberg. Maybe it's his family office. Yeah, throw 50K in that, in that thing. My kid told me about this new thing.

• 2:26:27Martin Shkreli?

  We tried to short Bitcoin at $100. And we just need to find a counterparty.

• 2:26:33John Coogan?

  Yeah.

• 2:26:34Jordi Hays?

  How, how are you thinking about, you mentioned trading enterprise SaaS back in the in the early days with Jim Cramer. What's your updated thesis on SaaS? Every SaaS app now is just an app to make other, other SaaS. So maybe SaaS will, will.

• 2:26:56Jordi Hays?

  You know, SaaS will always live in our hearts and I imagine it'll live on our, on our computers. But what's your updated thesis?

• 2:27:03Martin Shkreli?

  I think that, you know, it's sort of similar from back then. Like, I think the morass of a company like JP Morgan that's still running like Python 2 for most of the business, you know, it's, it's very hard for them to update and upgrade operations without significant disruption. For you or me-

• 2:27:21John Coogan?

  Should it, should it be? I feel like it's a, it's a one line in Claude Code or Devon. You say, hey, go migrate-

• 2:27:26Jordi Hays?

  Chat GPT agents.

• 2:27:27John Coogan?

  Go migrate, go migrate. Like, it is-

• 2:27:29Jordi Hays?

  Don't make, all you have to do is, don't make mistakes.

• 2:27:32John Coogan?

  I am much, I am much more bullish on migrate from Python 2 to Python 3 than, than solve cryptography. But I don't know, maybe you're gonna push, yeah, Fortran, Fortran re-platformings, .net re-platformings. Like, this feels like this should be doable from the current state of the art without any crazy AGI, hyper, any-

• 2:27:53Martin Shkreli?

  I think there's a lot of technical debt, you know, in most of these companies. And again, your, your average startup coming out of-

• 2:27:58John Coogan?

  Claude Code was born in technical debt, baby. Claude Code and Devon, they live, they live for, for technical debt.

• 2:28:05Martin Shkreli?

  I think that the, the amazing amount of programmers you would need to even maintain and know about this old code that-

• 2:28:11John Coogan?

  Yeah.

• 2:28:11Martin Shkreli?

  You know, the guy who wrote it's long been dead.

• 2:28:14John Coogan?

  Maybe it's just the context window of like, you need to know, it's not that there's just like, oh yeah, it's really easy to change the print statement from Python 2 to Python 3. But when there's a massive system and even, even the time of like, okay, let's bring up the test suite and that takes four hours. It's like, okay, how are you gonna RL on that?

• 2:28:31Martin Shkreli?

  I was talking about Mad Group with this, because we were like, stunting on this guy who was like, ERP transitions made easy. It's no problem. And we're just like, have you ever actually transitioned in ERP system? You know, there's a good chance you waste $300 million and it gets worse. You know, it's, it's not- It's not trivial.

• 2:28:48Jordi Hays?

  There was a, there was a post from yesterday. Nobody is an atheist when you run the database migration in prod on one billion rows.

• 2:28:57Martin Shkreli?

  Yeah, yeah, I mean, I, I think that, you know, it's just, it's just really hard at a company like a McDonald's or, you know, something like that, you know, if you want to run a 10, 20 person startup on US SaaS, pretty easy, it's great, but the big revenue is still at Fortune 500, which unfortunately is still fairly hard to refactor and, and those, you know, there's not a lot of those code bases were, were pre GitHub and pre kind of like, you know, I, I sometimes joke that the big AI companies should become LBO shops. And what they can do is they can partner with KKR or Blackstone and all they get is the data. KKR and Blackstone pride the capital, get all the returns, fine, but all the data comes back to, you know, the OpenAI's or whoever, and by getting the old code bases out of a McDonald's

• 2:29:41Martin Shkreli?

  or out of a Walmart that, you know, some of that code was written in 1970s, you know, they have unique data that nobody else has. And even someone like Universal Music, if, if OpenAI LBO'd Universal and said, okay, KKR, you can have the rest of the business, but we want the rights to the data and we can train music models and stuff like that, you know, KKR can make the money on the LBO, but OpenAI has data.

• 2:30:02John Coogan?

  Are they gonna make money in the LBO though? Like if you look at that, they're gonna build a DCF for this and they're gonna say, okay, we're gonna make the same amount of money, we're gonna, you know, optimize a little bit, maybe cash flow goes up, but then once OpenAI is one-shotting music and, you know, all of our revenue goes to zero, is that a risk?

• 2:30:20Martin Shkreli?

  It's gonna happen anyway, so I think that's one thing, but then also like the Russian dude who bought Warner Brothers, he really timed that, his deal, he bought Warner Music, he timed his deal amazingly, he made like three times his money or more. And so I think it's price dependent, but you know, if you can buy a newspaper company, if you can buy, you know, a book company, a publishing company, like these things are trading for like one or two times sales, you know, and you're getting this rich data that nobody else has and you, you know, if it's really a data war, you know, buy the company, keep the data, strip out the rest. And you, I heard you guys talking about like PE improving LLM, you know, improving businesses with LLMs.

• 2:30:57John Coogan?

  Yeah.

• 2:30:57Martin Shkreli?

  And again.

• 2:30:58John Coogan?

  Well, I mean, it wasn't, that was not the take, the, it was Will Manitis and he was saying that.

• 2:31:02Jordi Hays?

  More so it's a reason to scale AUM on the fun side because hey, let's buy this accounting shop, it has 5 million of EBIT, like if we just, you know. Take away all the, you know.

• 2:31:12John Coogan?

  It's a justification was what.

• 2:31:14Martin Shkreli?

  If you can execute, you know, it's fantastic.

• 2:31:17John Coogan?

  The actual post was the real innovation of L L Ms is suddenly opening up a few trillion of mainstream paperwork businesses that were traditionally too small and too weird for private equity that can suddenly transact at two and 20 on some nebulous AI labor arbitrage trade never bet against A U M growth.

• 2:31:37Martin Shkreli?

  You know, I think it's reasonable, but it's it sounds like just any good operator, right? Like when when Vista and Tomo Bravo buy software companies, somehow they can take these like very ugly gross companies and turn them into amazing cash flow companies. So it's all about the operator, right?

• 2:31:52John Coogan?

  Yeah, but we're gonna put Orlando Bravo in a box, right?

• 2:31:57John Coogan?

  And then we're also gonna put. Absolutely. In the God box.

• 2:32:02Martin Shkreli?

  Face, voice, everything.

• 2:32:04John Coogan?

  Yeah, yeah, yeah. It's all it's all coming. Well, you know, we'll be here live streaming it into the single.

• 2:32:11Jordi Hays?

  Can you play us a song before you leave?

• 2:32:14Martin Shkreli?

  Uh, I'm not sure what you're talking about.

• 2:32:17Jordi Hays?

  Like, like with one of those guitars that the chat.

• 2:32:20Martin Shkreli?

  Oh, yes. I I will come back to you with a good parody of Silicon Valley. I've been working on my impressions.

• 2:32:26John Coogan?

  Okay.

• 2:32:26Martin Shkreli?

  Okay, so maybe I can be back. I'm working on Elon, Zuck, Sam.

• 2:32:32Jordi Hays?

  Bill Gurley, Bill Gurley.

• 2:32:34John Coogan?

  Bill Gurley has a great voice.

• 2:32:36Jordi Hays?

  Do Gurley.

• 2:32:37John Coogan?

  Yeah.

• 2:32:37Martin Shkreli?

  I'll work. I'll work on it. You actually do need to like sit in front of a mirror and like listen and tape yourself and like work on it. But basically, anybody can do these things and most people.

• 2:32:46John Coogan?

  Are you saying? No, no, those are AI voices, right?

• 2:32:49Martin Shkreli?

  No, me, me. Yeah.

• 2:32:50Jordi Hays?

  No, no, he's saying separately from like the you had the video with talking with Zuck the other day where he was really, he was really.

• 2:32:56Martin Shkreli?

  I just do it myself. I can do as I can do Zuck. I can do Buffett the best. I think I have the best impression in the world.

• 2:33:03Jordi Hays?

  Can you hit it? Can you can you do like be be greedy when others are fearful?

• 2:33:08Martin Shkreli?

  Yeah, yeah.

• 2:33:08Jordi Hays?

  Rip that for us.

• 2:33:09Martin Shkreli?

  Let me come back to you and I'll do a whole show for you.

• 2:33:11John Coogan?

  Okay.

• 2:33:11Jordi Hays?

  Amazing. All right. Well, this is really fun.

• 2:33:15Martin Shkreli?

  Thanks, guys.

• 2:33:15Jordi Hays?

  I'll be finally do this.

• 2:33:16Martin Shkreli?

  See you later.

• 2:33:17Jordi Hays?

  Come back on soon.

• 2:33:18John Coogan?

  Bye.