IBM Nukes, Demis Govt Plan, Paramount WBD Deep Dive | Dylan Byers, Noah Schochet, Saam Motamedi, Ioannis Antonoglou, Jack Dent, Evan Burns & Jamie Seltzer, Tyler Page

(00:21) - IBM Nukes (07:36) - Demis Govt Plan (20:08) - NY Pauses AI Datacenters (25:38) - Can Pretty Data centers Win? (27:58) - Clanker Whales (29:23) - Dylan Byers, a founding partner and senior correspondent at Puck, is known for his in-depth coverage of the media industry. He discusses the challenges David Ellison faces in merging Warner Brothers Discovery with Paramount, highlighting opposition from Democratic state attorneys general, particularly California's Rob Bonta, who seeks to block the deal on grounds that Byers argues are outdated given the current media landscape. Byers also touches on the potential for Hollywood studios to relocate operations in response to regulatory pressures, emphasizing the evolving nature of the entertainment industry. (59:54) - Noah Schochet, co-founder and CEO of TerraFirma, discusses how he and his co-founder, both former SpaceX engineers, founded the company to revolutionize the construction industry by integrating robotics and automation to accelerate building processes. They retrofit existing heavy machinery with custom-built software and hardware, enabling remote operation and increased efficiency. Schochet emphasizes that while full autonomy may not be cost-effective due to construction's numerous edge cases, achieving approximately 75% autonomy with human oversight can significantly enhance productivity. (01:10:58) - Saam Motamedi, a partner at Greylock Partners, focuses on early-stage investments in AI, cybersecurity, and enterprise software. He discusses Greylock's new $1.5 billion fund, Greylock 18, aimed at supporting early-stage founders, particularly in AI. Motamedi emphasizes the vast opportunities in AI across the technology stack, from foundational models to applications, and highlights the potential for multiple significant winners in emerging categories due to the transformative impact of AI on various industries. (01:21:48) - Ioannis Antonoglou, co-founder, president, and CTO of Reflection AI, previously served as a founding engineer at DeepMind, contributing to projects like AlphaGo and AlphaZero. In the conversation, he discusses Reflection AI's mission to develop frontier open models, emphasizing the need for exceptional talent and substantial computational resources, exemplified by their recent billion-dollar deal with Nubius. He also reflects on the rapid advancements in AI over the past 15 years, highlighting the importance of adaptability and the exponential nature of progress in the field. (01:31:25) - Jack Dent, co-founder and president of Chai Discovery, discusses the company's development of an AI-driven platform for molecular design, likening it to a "Computer Aided design suite for molecules" that enables the creation of new medicines. He highlights the platform's focus on the pharmaceutical industry, emphasizing its potential to revolutionize drug discovery by designing molecules that can effectively target diseases. Dent also notes the rapid advancements in AI models for drug discovery, citing a significant improvement in success rates from 0.1% to 16% over the course of 2025. (01:44:50) - Evan Burns & Jamie Seltzer. Evan Burns, CEO and co-founder of State Affairs, discusses the company's mission to provide real-time insights into policy and regulatory changes affecting businesses, aiming to shift companies from reactive to proactive engagement in the legislative process. He highlights the challenges of navigating antiquated state government systems and the importance of having on-the-ground journalists to gather timely information. Burns also mentions their recent $70 million funding round led by Coatue and Founders Fund, emphasizing plans to expand coverage to city and international levels. Jamie Seltzer is the co-founder of State Affairs, an AI-powered policy intelligence platform that combines original statehouse reporting with AI to help governments, businesses, and advocacy organizations track and understand legislation across all 50 states. He is also a general partner at LightShed Ventures, investing in technology, media, and communications companies. (01:56:57) - Tyler Page, CEO of Cipher Digital, discusses the company's transformation from bitcoin mining to developing AI data centers, highlighting their current projects totaling 700 megawatts across three sites in West Texas. He emphasizes the importance of site selection, community engagement, and addressing concerns such as water usage and noise, noting that Cipher strives to be a good neighbor by contributing to local infrastructure and ensuring minimal environmental impact. Page also outlines the company's capital market strategy, detailing their approach to financing and partnerships with hyperscalers like AWS and Google. TBPN is made possible by: Ramp - https://ramp.com Public - https://public.com Cisco - https://www.cisco.com Console - https://www.console.com CrowdStrike - https://www.crowdstrike.com Figma - https://www.figma.com MongoDB - https://www.mongodb.com NYSE - https://www.nyse.com Railway - https://railway.com Shopify - https://www.shopify.com Codex - http://openAI.com/codex Follow TBPN: https://TBPN.com https://x.com/tbpn https://open.spotify.com/show/2L6WMqY3GUPCGBD0dX6p00?si=674252d53acf4231 https://podcasts.apple.com/us/podcast/tbpn/id1772360235 https://www.youtube.com/@TBPNLive

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

• 0:00Jordi Hays?

  You're watching TVPN.

• 0:02John Coogan?

  Today is Tuesday, July 14th, 2026. We are live from the TVPN Eldredal.

• 0:08Jordi Hays?

  The temple of technology.

• 0:10John Coogan?

  The fortress of finance. The capital of capital. Let me tell you about ramp.com. Time is money. Save both. Easy use corporate cards, bill pay, accounting and a whole lot more all in one place. IBM is absolutely nuking. The stock is down 25%. Let me see if I can pull this up. Boom. IBM. Well, that is a crazy chart. What is that? The, that's the one week chart? Uh, it looks better on the buy the year because the stock is actually way up in the AI era. Since the launch of chat GPT, IBM has done, uh, really, really well. Uh, the stock is basically doubled since the introduction of chat GPT during the AI era. You know, are you going to be a winner or a loser? Are you going to get, uh, steamrolled, slopped?

• 0:50John Coogan?

  Something like that. But, uh, it's been doing well up until today when the company, uh, re, uh, reset the narrative around their, uh, their, uh, server business specifically. So the high level reason that IBM is not well positioned in the token path to use the Brad Gersner and Gavin Baker parlance is that AI spending is currently flowing into GPUs, memory, networking, hyperscale cloud computing and frontier model inference. IBM is not a major winner in those categories. So just to refresh on IBM, because interesting business with a great name, international business machines.

• 1:32John Coogan?

  The first business machines they made were punch card systems. They made clocks. Like, it's like you're running a business. You need a machine.

• 1:40Jordi Hays?

  You're gonna need a great clock.

• 1:41John Coogan?

  You're gonna need a clock. No, it really was part of this.

• 1:43Jordi Hays?

  Not just any clock.

• 1:44John Coogan?

  Like a clock that works really well.

• 1:45Jordi Hays?

  That's right.

• 1:46John Coogan?

  Professional clock. Clock Pro Max.

• 1:48Jordi Hays?

  You on time.

• 1:49John Coogan?

  Exactly. Clock Pro Max.

• 1:50Jordi Hays?

  Lighter, thinner. It's the lightest, thinnest, best looking.

• 1:55John Coogan?

  Not fastest. You don't want a fast clock. Um, but, uh, tabulating machines, basically a bunch of different ways to process information mechanically. Uh, and that foundational insight, you know, was pretty simple. It was businesses will continually pay forever to automate record keeping. And at a high level, that's sort of been working forever and they're continuously.

• 2:17Jordi Hays?

  You know, if they ever tried to sell a clock as a SaaS product, time as a service.

• 2:24John Coogan?

  Hmm. If you really, really squint red hat Kubernetes, it's keeping time between distributed systems. Maybe there's something there, but, uh, when you're running a database across a bunch of different servers, there's some timekeeping aspect that's important, but, uh, no, I don't think they ever did. Uh, with the IBM that people know, the mainframe business, that started in 1964, system 360, it was a compatible family of devices, which is interesting. It's not just one, people think one mainframe, but it was actually a whole bunch of different, uh, systems that you can upgrade piecemeal without redesigning the entire workflow. So you need a little bit more storage. You upgrade that. You need a little bit more compute. You upgrade that. Uh, and this turned IBM into the dominant supplier of corporate computing,

• 3:09John Coogan?

  banks, insurers, airlines, manufacturers, governments. They all used IBM as the central system, uh, for their hardware and software. This was the mainframe era. Uh, then, uh, and, and, and the whole reason that IBM in particular became dominant in mainframes was, uh, they focused on high reliability, long customer relationships, expensive switching costs. It's very difficult. Once you're in the IBM ecosystem to, to weed your way out, uh, proprietary software tied to the hardware, uh, certain software would only run on IBM hardware. So you couldn't replatform. You had to rip everything out, which is very difficult for a large bank or a large airline in the 60s and 70s.

• 3:47Jordi Hays?

  Good for business.

• 3:48John Coogan?

  And they also had huge, uh, huge support and consulting contracts associated with all the software and the hardware that they were delivering. Sort of a precursor to the forward deployed engineer, if you squint a little bit. Um, but the PC era was the real turning point. So, uh, the IBM PC launched in 1981. Uh, this legitimized the personal computing market and set up two new companies, Intel and Microsoft for, to capture immense value during the next computing boom. So, uh, the IBM PC ran Windows and used an Intel chip. At the time IBM was doing 30 billion in revenue. Intel was doing less than 1 billion and Microsoft was only doing 17 million in sales. And so I think Microsoft had like 120 employees.

• 4:31John Coogan?

  And all of a sudden, those two companies became ultimately way, way, way bigger, like 10 times as big. Uh, so the market eventually fractured and proposals to break IBM into separate companies started to pop up. Uh, the market fractured because once you had, uh, you know, an Intel chipset and Windows operating system, you could run Windows on a different chipset and you could, you have a different chipset with different operating system and the value capture piece, there were just other PC manufacturers that came in. And then obviously Apple with their, uh, you know, anti IBM, like challenge the man campaign. So, uh, the market was fracturing and there was a bunch of proposals during the eighties and nineties to break up the country, uh, break up the company into separate units. Uh, Lou Gersner, who became CEO in 1993, rejected that idea. And he said, quote,

• 5:13John Coogan?

  "We do not necessarily need to manufacture every piece of technology. We need to be the company that makes of all of it work together. So we have to work together. We're going to be the integrator, the systems integrator." Uh, his strategy ultimately produced three things, uh, IBM global services, large outsourcing contracts and a vast consulting organization. And that's a lot of what we know about IBM today. So, uh, services businesses do have limitations though, lower margins, higher headcount, slower organic growth, price competition, et cetera. Uh, in 2019, IBM acquired Red Hat for 34 billion and spun off its traditional managed infrastructure outsourcing business, uh, in 2021. So today you can think of IBM as sort of three key businesses. They have software, which is 44% of the business.

• 5:55John Coogan?

  Uh, that's an 80% gross margins. Great business. Uh, 31% of their business is consulting. That's under 30% gross margins though. And then 23% of the business is infrastructure, which is just shy of 60% gross margin. And so for the last three years, the stock's been doing really well, up 77% before dividends, uh, and the Red Hat acquisition started paying off. Um, and the Z17 mainframe cycle was surprisingly solid, but the problem is, is that they just called out a shift away from mainframe spending with customers shifting capital spending towards the physical AI build out, demand for AI and associated hardware is strong, but IBM is losing share of their customers' technology budget. Uh, IBM still does have a strong asset for the AI era, uh, Red Hat OpenShift, uh, which is their enterprise

• 6:39John Coogan?

  Kubernetes platform for orchestrating workloads across multiple computers. Um, but there are so many other companies offering AI capabilities up and down the stack that they're getting a little hammered today with the worst, the biggest share drop in its 115 year history. Rough day for IBM, but, uh, an interesting story nonetheless. Let me tell you about Shopify. Shopify is the commerce platform that grows with your business and lets you sell in seconds online, in store, on mobile, on social, on marketplaces, and now with AI agents. Uh, we have a great show. We have seven guests coming on, lots of fundraising news across VC firms and.

• 7:17Jordi Hays?

  I'm thinking we're back.

• 7:18John Coogan?

  We're totally back. Dylan Byers is also coming up, coming on from Puck to break down the Warner Brothers Discovery news.

• 7:25Jordi Hays?

  It was over. We had no fundraising news.

• 7:28John Coogan?

  Yeah.

• 7:28Jordi Hays?

  Today we're back.

• 7:29John Coogan?

  I think it's just like slow weekends. People like to launch Tuesday, Wednesday, Thursday.

• 7:34Jordi Hays?

  Their news on a Monday.

• 7:35John Coogan?

  Yes. Um, but, uh, Demis Hassabis from DeepMind, the DeepMind chief, he has called for a US-led body to test frontier AI models. He says, "Society has a precious window to prepare for technology advancing at historic speed." He's a Nobel laureate. Uh, the Financial Times has, uh, the story and there's an article that he posted on X that will sort of click through and give you the takeaways, um, from the Financial Times. Uh, Google DeepMind chief executive Demis Hassabis has called for the creation of a US-led, led standards body to test new frontier class AI models for national security threats, arguing that urgent action from international regulators is needed to address the risks posed by rapidly

• 8:20John Coogan?

  advancing technology. I'm surprised, has he never proposed this before? This feels like something that has been proposed many, many times, but maybe I'm just, I'm just misremembering the AI 2027 people and the AI 2040 people and the OpenAI white paper and what Anthropic said. Like, it feels like we've seen this before of like, we need to have a regulatory body of some sort. Um, all the way going back to when the All In podcast was talking about an FDA for AI back like two or three years ago. Um, but it's now here and it's coming from a DeepMind executive, which hits a little harder. Uh, the warning from Hassabis, a Nobel laureate who leads Google's AI efforts, follows the White House's abrupt export ban

• 9:01John Coogan?

  on Anthropic's most advanced models last month alongside a fresh wave of warnings about the potential for AI to disrupt the global economy and financial system. We talked a little bit about The Economist. They got together with a much more moderate proposal, I think, because it wasn't actually, it wasn't actually calling for any sort of change to the development of AI whatsoever.

• 9:23Jordi Hays?

  And they were just saying it could get, AI could get better in the next 10 years.

• 9:28John Coogan?

  Yes.

• 9:28Jordi Hays?

  Which is a very sort of-

• 9:30John Coogan?

  Could get a lot better. That's what they said. They didn't just say better. They said a lot better.

• 9:34Jordi Hays?

  It may.

• 9:34John Coogan?

  But, but the actual pitch from, from the economists was, we need to have economists and government officials think about responses. If there is job displacement from AI, what is the impact? What will the reaction be? So to sort of like prep the legislation. So you can be more ready when things start to happen, whether that's retraining, or stimulus, or jobs programs, or all sorts of different things. So this intervention from Demis is the most detailed proposal yet for AI regulation from Google, which is vying for AI leadership with Anthropic and OpenAI. Quote, "We've already seen the challenges frontier models

• 10:16John Coogan?

  pose for cybersecurity," good point, "and other threats, including nuclear and bio risks, may soon emerge as capabilities continue to advance. The rapid progress we're seeing in AI requires a new approach to testing frontier AI model capabilities that is dynamic, adaptable, and rigorous. The US is well positioned, given its economic and technical standing, to take the first step in developing such a framework." My big question is, it seems pretty easy to go to the leading labs and say, hey, you have to go through this process. But do we have a good framework in the United States for reviewing code that China just sort of throws over here, open sourced? Because if

• 10:56John Coogan?

  you, I mean, as we've seen with the Kimi K2 and GLM, like if you tie someone up in an FDA-like review for even six months, let alone a year, let alone what the FDA timelines are for drug development, five years, 10 years sometimes, you are going to have open source models that are way, way more advanced. So like, you either have to review them very quickly.

• 11:21Jordi Hays?

  New frontier model, it's going through a six-month review, let's say. Maybe it's really like a one-month review, and then there needs to be-

• 11:29John Coogan?

  With AI, it could be a two-minute review.

• 11:30Jordi Hays?

  Yeah.

• 11:31John Coogan?

  I would hope.

• 11:31Jordi Hays?

  But let's say it's like a three-month, a three-month delay, or six-month delay. Then, when it eventually does get released, it gets distilled likely within even less time than that, and is publicly available.

• 11:45John Coogan?

  Yeah.

• 11:46Jordi Hays?

  Open weights.

• 11:47John Coogan?

  Yeah.

• 11:48Jordi Hays?

  I would like to see, so we keep seeing these like letters and proposals.

• 11:52John Coogan?

  Yeah.

• 11:53Jordi Hays?

  And they always come, one, with a request for urgent action, but they rarely come with super concrete scenarios, like near-term scenarios. I want, here's what's going to happen in six months. Here's what's going to happen in 12 months.

• 12:11John Coogan?

  Or, or even just like a trigger. Like, it would be interesting if somebody said, "If the unemployment rate goes above 10%, I would recommend a stimulus check of $1,000 be sent to everyone and means test it, so it only goes to the middle class and lower class." Like, that is a very reasonable thing. That's basically what happened during COVID, right? Like, the unemployment rate went to 15%, and then boom, there were checks in the mail for everyone. And that's a very concrete proposal, that you could say, if this happens, then this happens.

• 12:39Jordi Hays?

  Yeah, I want, I want someone like Demis. Basically, the world of Less Wrong, and AI 2027, and 2040, they're willing to lay out super concrete scenarios. And they, they can, at times, come across as very sci-fi.

• 12:57John Coogan?

  Yeah, yeah.

• 12:57Jordi Hays?

  But there's always, at least so far, been some element of, of reality in them.

• 13:03John Coogan?

  I hear what you're saying.

• 13:04Jordi Hays?

  And so, I want somebody who's like, generally more, like, kind of moderate, to come in and just say, like, here's, here's a few potential scenarios, and this is what I think. And, and because I don't believe it's, you know, Demis could suggest what he thinks that the government should do, the US government, in this case. He's, you know, encouraging like a US watchdog.

• 13:26John Coogan?

  Yeah.

• 13:27Jordi Hays?

  He's in London, though. So I think it's going to be on our lawmakers and our government to understand, in these different scenarios, at least start thinking through, in these different scenarios, how would we approach them?

• 13:39John Coogan?

  Mm-hmm, mm-hmm. Yeah. I just, I always have a problem with the, with timelines and predictions, because those can get so nitpicked, and they're so hard. I'd be more interested in less of, like-

• 13:54Jordi Hays?

  No, but don't you think that'd be helpful if, if-

• 13:56John Coogan?

  I don't think it's helpful. No, no, no. I actually don't. I think it's much more helpful to say, if the unemployment rate goes to 10%, create a new government body that hires people to do something. Like, create the next TSA.

• 14:09Jordi Hays?

  I just think, I just think-

• 14:10John Coogan?

  Send out stimulus checks, or lower interest rates, right?

• 14:13Jordi Hays?

  If you tell Washington DC, AI models are very good at hacking computer systems, and they're going to get better at hacking computer systems, there's not really much for them to do with that, because hacking computer systems are already, it's already illegal.

• 14:28John Coogan?

  Yeah.

• 14:28Jordi Hays?

  And the solution there is for companies to beef up their own cybersecurity, make sure they're using the most advanced models, right?

• 14:36John Coogan?

  Yeah.

• 14:37Jordi Hays?

  And so if you play out, again, more concrete scenarios, where like, here's, here's a timeline for the trucking industry, and, and potential job displacement within trucking, or any of these other categories, I just think it allows people in Washington, actual lawmakers, to start thinking about-

• 14:57John Coogan?

  I just think that's always wrong. Like, they're always wrong about those predictions.

• 15:00Jordi Hays?

  Yeah.

• 15:01John Coogan?

  It's so much better to just say, "Look, if the trucking industry goes through mass job displacement, then here's, here's what I, here's what I actually propose. Here's the solution." As opposed to just saying, like, "There might be a problem, and I think that there's a problem coming down the pipe. I don't know." Like, it's like, what are you actually advocating for? Other than just being like, "The, the, the sky might fall. I have a P doom of this number, and it's your job to go figure it out." It's like, you're smart. What do you suggest? UBI? Higher taxes?

• 15:31Jordi Hays?

  I just don't think predictions are always wrong. There's been so much, so many examples over the last decade where people have gotten predictions, like, dead on.

• 15:39John Coogan?

  Yeah, yeah.

• 15:39Jordi Hays?

  Situational awareness.

• 15:40John Coogan?

  Tyler, what do you think about this?

• 15:41Tyler?

  Yeah, I mean, I'm probably in the camp of, like, proactive regulation, like, usually it, like, has had bad consequences. It doesn't really work out. But also, I was just going to say, like, what he's describing is basically just Casey, the Center for AI Standards and Innovation, which is under the Commerce Department.

• 15:58John Coogan?

  Yep.

• 15:58Tyler?

  And it's like a slightly beefed up version, because right now Casey is like, very much, you opt in.

• 16:02John Coogan?

  Yeah.

• 16:03Tyler?

  But it seems like he should just have said, like, "You should specifically beef, beef up Casey, add, add these policies, do these, like, specific things."

• 16:11John Coogan?

  Yeah.

• 16:12Tyler?

  And I think that would be much more, you know, palatable, or, or well-received, or like, something like, like, what do we actually do with this letter? It, it's kind of very, you know, like, I'm not sure what we actually do with this.

• 16:23John Coogan?

  Yeah. It feels like, if, I mean, to go back to cybersecurity, it's like, if it's a national issue, like, the NSA works on this stuff, increase their budget, maybe? Raise taxes to increase their budget? Issue more debt to, to increase their budget? If it's, if it can be solved by the private market, it's like, go support CrowdStrike, or start a new company that can help with cybersecurity? I don't know. The actual, concrete recommendation, boiled down from what Demis wrote, is something along these lines. Create a US frontier AI standards body. That's like Casey, but probably more, more beefed up. He's also advocating that it's overseen federally, but funded by AI companies. Define and regularly

• 17:04John Coogan?

  update benchmarks to determine which models and labs qualify as frontier. So that's something that doesn't exist yet. Require frontier labs to submit models for testing up to 30 days before release. That's sort of nice, because that, that would allow someone who's just going and building a recommender system on Netflix, that's, actually, it is using AI technically, but it's not a frontier model, because it doesn't qualify for that. So then, they can just go and ship the latest recommendation algorithm on Netflix, no big deal. Test models for cyber, biological, nuclear, deception, autonomy, and guardrail passing capabilities. Require strong cybersecurity, personal vetting, model cards, watermarking, and substantial safety research. Use national labs, federal agencies, and independent third-party auditors

• 17:48John Coogan?

  to conduct evaluations. Develop independent confidential tests, so labs cannot train specifically against the benchmarks. Require labs to fix serious vulnerabilities discovered after release. Apply the rules to all frontier models deployed in the United States, including foreign and open source models, while exempting smaller models. Okay, so he wants to apply it to foreign, open source models. That feels very tricky, but I guess you could get, like, sort of DMCA notices to Hugging Face and GitHub, so that it doesn't proliferate across the web, but-

• 18:19Tyler?

  Yeah, I mean, there's probably some power law to, like, where people are actually downloading and influencing the model.

• 18:23John Coogan?

  And I guess if you go to all the NeoClouds and all the open source folks, and you're like, okay, this model is actually a bad model, you gotta go, you gotta stick to GLM 5.2.

• 18:31Jordi Hays?

  Yeah, it's much easier to regulate the compute.

• 18:35John Coogan?

  This is going to be very controversial to the open source fans.

• 18:37Tyler?

  Yeah, this is kind of like the George Hof-

• 18:39John Coogan?

  George Hof nightmare take, yeah.

• 18:40Tyler?

  You're tagging every single GPU.

• 18:41John Coogan?

  For sure, for sure. Coordinate a slowdown among frontier labs if testing reveals sufficiently serious risks, and turn the US framework into an international system of shared frontier AI standards. Well, I like, I like the general direction. I like the idea that he's just, he's just sharing his viewpoint more broadly. I think all of that is good. I'm not sure that there's, there's enough to dig into here, exactly how this would, like, where the rubber meets the road, how this would be implemented, or what effect this would actually have on the industry. Like, this could be really good for open source, because it could just slow down the frontier closed-source labs. It could also be really bad for open source, if it's much more cumbersome, because an open source project might not have a regulatory

• 19:22John Coogan?

  budget to actually massage a model through the approval process. Like, there's a reason why bio, small biotech companies get acquired by Big Pharma before they launch their drugs. It's because, like, the Big Pharma companies have offices in Washington DC, and can walk the legislators through the whole process. So in general, I'm sympathetic to the view where people say, "Oh, regulation benefits the biggest companies in the world, because historically, that's how it's played out." Maybe that's different this time, who knows? It could just slow down the frontier. But, you know, he does work for a leading lab, so. Interesting. Let me tell you about MongoDB. What's the only thing faster than the AI market? Your business on MongoDB. Don't just build AI. Own the data platform that

• 20:06John Coogan?

  powers it. And-

• 20:08Jordi Hays?

  What's going on in New York?

• 20:10John Coogan?

  I will tell you what's going on in New York. Today, New York Governor Kathy Hochul signed an executive order placing a one-year pause on new AI data centers in the state. This is the whack, whack.

• 20:26John Coogan?

  For everyone, except

• 20:30John Coogan?

  several Americans.

• 20:31Jordi Hays?

  People that are probably.

• 20:33John Coogan?

  But the order establishes a moratorium while New York develops a regulatory framework and conducts environmental impact assessments examining data centers, energy demand, water use, water quality, air quality, and effects on the electric grid. You would think there's a decent amount of oversight around those things generally already, like air quality, like whether you start a new barbecue restaurant or a coal plant, you would imagine that there's just a general rule about not polluting the atmosphere that would apply to data centers by default. But it seems like there's a little bit of a special case here, and so they're working on this in particular. The move immediately drew criticism from the tech industry,

• 21:15John Coogan?

  which argues that restricting data center construction will cost local communities jobs and weaken America's position in the global AI race. Earlier this year, Maine considered a similar moratorium, but Democratic Governor Janet Mills vetoed the proposal after concerns it would block a major data center planned for a town still struggling after the closure of a local paper mill. Hochul's Republican challenger, Bruce Blakeman, also opposes the moratorium, arguing that local governments, not the state, should decide whether to approve projects that promise significant economic benefits. If it stands, the order would make New York the first state to impose a broad moratorium on large scale AI data centers.

• 21:58John Coogan?

  The Associated General Contractors of New York State is already condemning the decision. So the contractors who are going to be working on this project and see it as a form of job creation are upset about this. But let's see what President and CEO Mike Elmandorf had to say. He warned that halting permits for as much as a year in this fast moving sector will not simply delay projects. It will send them permanently to Virginia, Texas, Georgia, and other states actively competing for these investments. Once those projects break ground elsewhere, he argued that the jobs, tax revenue, and economic opportunities are unlikely to return. So there hasn't been that much of a data center boom in New York State that I'm aware of.

• 22:41Jordi Hays?

  Trying to find the largest campus that I can find is the Lake Mariner Campus in Barker or Somerset.

• 22:53John Coogan?

  Yeah.

• 22:54Jordi Hays?

  And it's around, it has around 205 megawatts that are active.

• 23:00John Coogan?

  Wow, yeah, that's pretty big.

• 23:01Jordi Hays?

  And there's a proposal out to do another 500 megawatts.

• 23:04John Coogan?

  Yeah.

• 23:05Jordi Hays?

  But it hasn't been approved yet. And certainly that the new ban would stop that as it's any data centers requiring 50 megawatts or more.

• 23:14John Coogan?

  I know a lot of, a lot of IT infrastructure data centers, if you can call them that, they're usually smaller scale for from financial institutions in Manhattan often are built in New Jersey. But that's basically purely for economic reasons, that the land is cheaper and the buildings are cheaper. But I do wonder if this will put have any like knock on effects where the, you know, like Netflix's content delivery network that was just, you know, planning to build a small data center to route, you know, video streams to Manhattanites.

• 23:47Jordi Hays?

  Yeah.

• 23:47John Coogan?

  Would be delayed as well. Like data center, it'll be interesting to see how they, how they define AI data center. Will they do it on energy or what type of GPUs you're racking or what's going on there? But more to dig in.

• 24:00Jordi Hays?

  Ken Griffin was on Goldman Sachs's podcast, the Exchange, Exchanges podcast, and it was circulating this week, even though it was, I think, recorded last month. And he was talking about how, yeah, in his view, what an error this would be to, his view, the data centers are going to get built. And if they're not built here, that means hundreds of billions of dollars of revenue basically flowing, flowing through other countries.

• 24:28John Coogan?

  And. Other countries. I mean, it'd probably go to other states first, right?

• 24:32Jordi Hays?

  Well, he was talking about.

• 24:33John Coogan?

  Both it goes national.

• 24:35Jordi Hays?

  You know, if New York does it, there's going to be a lot of other states.

• 24:37John Coogan?

  Yeah, the meme is like China wins in this scenario. US Senator John Fetterman.

• 24:43Jordi Hays?

  We did this with nuclear, we did this with manufacturing, both of, both of which can all agree were, were mistakes. I was trying to find if any of the hyperscalers operate their own data centers in New York.

• 25:01John Coogan?

  Well, the funny thing is that when Mark Zuckerberg proposed the Hyperion data center, the visualization he used was we're building a data center the size of Manhattan, which was very cool to see. But now Dylan Patel is sharing an image of, you know, a proposed data center that takes up all of Central Park, of course, the, the most controversial data center you could possibly build in the entire world. Tyler's in favor of it. But it's funny because that image probably stuck in some people's mind is like, oh, Mark Zuckerberg's trying to build a data center in Manhattan. I don't like that idea, even though, no, he was always going to build Hyperion in a very remote location for a variety of reasons. There's also an article in the Wall Street Journal, can a prettier data center curb

• 25:42John Coogan?

  the community backlash? People have been batting this idea around for a while, but let's pull up this image and you tell me, would you be okay with this going into Malibu? The Malibu Compute Company. Would you be cool with this if it was puking out diesel fumes 24/7? If it was clean and it didn't drive up energy, didn't use any water, it was all closed loop and it looked like this? Tolerable, right?

• 26:07Jordi Hays?

  I wouldn't just be okay with it being in my town.

• 26:10John Coogan?

  I'd demand it.

• 26:10Jordi Hays?

  In my backyard.

• 26:12John Coogan?

  Yes, true yimby over here.

• 26:13Jordi Hays?

  That's right.

• 26:14John Coogan?

  In an effort to soothe local opposition, architects plan data centers that resemble tech campuses or art museums rather than bland boxes. You have to imagine that the money that they're spending on the data center for a facade like this has got to be very, very cheap by comparison. It looks like a slat wall.

• 26:32Jordi Hays?

  Less.

• 26:32John Coogan?

  And, and all of a sudden, just every time it's screenshotted, like there was that hot Google presentation where they were in front of those crazy tanks and they put the logo on there and it made it look like they were taking like a, like a brewing facility and turning it into a data center. But it was just for the press release. Like the data center was actually somewhere else, but it was just sort of like an odd image. Americans are up in arms over data centers. Of course, we know this. They worry how much water these buildings use and fume at the amount of electricity they consume. People hate the way they look too, says the Wall Street Journal. Now, a small number of builders are on a mission to ensure that new data centers don't have to be eyesores. Gensler, one of the world's largest architecture firms, is leading the charge. It's drawing up plans

• 27:14John Coogan?

  for data centers that look more like Silicon Valley tech campuses or art museums rather than windowless rectangles that neighbors often grouse about resembling prisons. It's no different than any other building and it doesn't deserve to look any worse than any other building, said Jeffrey Diamond, a design director at Gensler.

• 27:33Jordi Hays?

  Yeah, see, this is just very rough.

• 27:35John Coogan?

  Yeah, not good.

• 27:37Jordi Hays?

  That is objectively in the backyard of that community.

• 27:41John Coogan?

  Yeah, yeah. People will push it to the limit unless there's some pushback. But in other aesthetically pleasing AI development news, Clanker Media shared that researchers built a soft floating robot for indoor interaction. And for so, so many of the, of the AI robots, of the humanoid robots that we see on the show are Lovecraftian and horrific, this is so cute. I want one. Don't you want one just floating around answering your questions?

• 28:18Jordi Hays?

  These have, this has the potential to be a, like a massive hit.

• 28:24John Coogan?

  Yeah.

• 28:24Jordi Hays?

  Consumer product.

• 28:26John Coogan?

  It uses helium and flapping fins instead of propellers. Extremely cute. The result is quiet, lightweight, and safe to touch. It can follow people, give reminders, and act as a study buddy. So you can be studying and this whale can come up next to you and answer your questions about your math homework.

• 28:45Jordi Hays?

  See, I don't even need it to be smart.

• 28:47John Coogan?

  No.

• 28:47Jordi Hays?

  I just want it to fly around.

• 28:49John Coogan?

  Yeah. Load it up with GPT-2. It's good enough.

• 28:52Jordi Hays?

  No, we don't need any, we don't even need any local models. Just have it fly, just have it fly around.

• 28:59John Coogan?

  Oh, you don't even want to have it talk?

• 29:01Jordi Hays?

  Yeah, I just want it.

• 29:02John Coogan?

  You just want it. I, I personally would demand that they install Codex on this thing. Let me tell you about Codex before we bring in our next guest. Codex is a powerful workspace for getting work done with AI agents, whether you're writing code, analyzing data, creating content, or automating business workflows. Codex helps you move projects forward from start to finish. And our next guest is in the waiting room. We have Dylan Byers from Puck. He's the founding partner and he's here to get us up to speed on Paramount Warner Brothers Discovery and the acquisition. How you doing, Dylan?

• 29:30Speaker 03

  I'm good, gentlemen. How are you doing?

• 29:32John Coogan?

  We're doing fantastic.

• 29:32Jordi Hays?

  Have you been on vacation? You look incredibly tan.

• 29:35John Coogan?

  Very tan. Yeah, what's going on? What's the secret?

• 29:37Speaker 03

  I'm tan. I'm unkempt. I eat, no, I'm in the Pacific Northwest. I've been traipsing around the Pacific Northwest for the last month.

• 29:45Jordi Hays?

  You've been traipsing.

• 29:46John Coogan?

  Business or pleasure?

• 29:47Speaker 03

  Yes, like a logger.

• 29:48John Coogan?

  Little bit of both?

• 29:49Speaker 03

  Business and pleasure. I was in Sun Valley during the Allen and Company conference to meet with a bunch of folks who were there. And then I'm, I.

• 29:57Jordi Hays?

  Thank you.

• 29:58Speaker 03

  And then I, I'm from here. I grew up in Seattle. So, you know, what better place to spend the summer?

• 30:04John Coogan?

  We had a question about Sun Valley. Who had the bulkiest security guard? Who

• 30:09Speaker 03

  Oh, historically, it's Bezos.

• 30:11John Coogan?

  Physically, oh, yes, bigger.

• 30:13Speaker 03

  Historically, it's Bezos. I know. I know Barry Weiss has some beefy security guards. I read about that in the New York Post.

• 30:18John Coogan?

  Yes, I did hear about that.

• 30:19Speaker 03

  I didn't see them. I didn't see any security guards there. You know, here's what I will say about Sun Valley, about the Allen and Company conference. It is remarkable how little, I mean, they create a security perimeter, but it's very subtle. And it is remarkable how comfortable all of these executives who are used to security details, how comfortable they are just moving around the property. They really feel like there's minimal, minimal attention even to the fact that they're there from the locals, other than like myself and reporters from Bloomberg and CNBC. They are largely left alone and they feel that.

• 30:55John Coogan?

  Sure. How, what is the interaction? We always see those photos of like the line of microphones at the fence for the, you know, ad hoc interview. Obviously, there are scheduled interviews with CNBC and Bloomberg sometimes and sit down interviews. But what is the day to day of actually reporting on Sun Valley like? Are you grabbing quotes from people? Or are you meeting with folks?

• 31:16Speaker 03

  No, I go, I did different strokes for different folks, right? I mean, there are historically, there have been like New York Post reporters who go there and once in a blue moon try to breach a security line.

• 31:25John Coogan?

  Whoa.

• 31:26Speaker 03

  And get color and quotes. I go there to meet with people off the record. That's like, for me, like, that is the world I cover. Those executives, be they in media, tech, entertainment, whatever.

• 31:36John Coogan?

  Yeah.

• 31:36Speaker 03

  And I, I have off the record meetings with them at a cafe on the property. There are others who go there and do get interviews like Julia Borstein of CNBC always gets three or four interviews.

• 31:49John Coogan?

  Yep.

• 31:50Speaker 03

  It depends. But what I do not do, thankfully, gratefully, I do not stand there at the front and shout questions at people who then just sort of like wave at you, which is really their way of giving the finger, save for David Zasloff, who's like a moth to the flame of a microphone and will come over and always give a good quote.

• 32:10John Coogan?

  I love it. How real is the, the meme that like, this is where the mega mergers are birthed? This is the place where the ideas come together? The merger that you'll hear about in a year for $100 billion? It's all starts at Sun Valley?

• 32:26Speaker 03

  Well, look, here's the deal. I have, I have, I've tried to set the record straight on this. Deals do happen there. Oftentimes, they happen as the culmination of conversations that happened well before Sun Valley. And occasionally, like, conversations start there. And I don't want to downplay that. Like, it is true. Like, if you just, you know, this year, there's not much that I know of, at least yet. Sometimes, we don't know about it till later. If you look at last year, like, yes, Apple got the rights to F1 at Sun Valley. And there were meetings between Liberty and ESPN and Apple, and Apple won. Sun Valley last year was where not only Larry, or sorry, David Ellison, but also Matthias Dofner

• 33:11Speaker 03

  at Axel Springer and the Murdochs came and tried to court Barry Weiss. And of course, David Ellison won that one. So, yes, deals do happen. I think what I reject, and I've written about this, I reject the notion that all of these people with their private jets, who basically run on similar circuits throughout the year, that somehow, like, if Sun Valley didn't happen, they would have no way to make deals happen. And that somehow, these brilliant people, these brilliant entrepreneurs and executives, who have managed to like, run their businesses successfully and are always thinking, not just months, but years, if not decades ahead, are like, oh, I happen to be in Sun Valley with this person, and therefore, I will buy the Washington Post. Sorry, that's not the way it works.

• 33:56John Coogan?

  Yeah.

• 33:56Speaker 03

  But, but that said, everyone loves coming here because it is the same reason I love going there. It's shooting fish in a barrel. It's just like speed dating with everyone you want to see. And it's just extraordinarily convenient. And then going back to my point about the Pacific Northwest in the summer, there are worse places to be than amid the quaking Aspens, you know, in Ketchum in July.

• 34:18John Coogan?

  Yeah, that's great. So, get us up to speed on what's going on with the Warner Brothers Discovery acquisition. Maybe a little bit of the prehistory, just to refresh on where the deal stands, and then the latest back and forth that emerged last week, trickling into this week.

• 34:37Speaker 03

  Yeah, look, David Ellison has had to jump hurdle after hurdle to try and get this deal done, obviously. $111 billion deal, bring Warner Brothers Discovery into the fold with Paramount. And the last hurdle, he might face some challenges in the UK. But really, the last hurdle here in the States, now that he's cleared everything with the Trump administration, are these Democratic state attorneys general led by California AG Rob Bonta. Finally, Bonta came out this week, sort of very cinematic. He was like on a trail in front of the Hollywood sign. And, and effectively said like, yes, we are suing, we are trying to block this

• 35:21Speaker 03

  deal. Here's why. We can get into it. It is very hard for me to see that he has a, a strong case for blocking the deal, that he and the other AGs have a strong case for blocking the deal. Because if you think about it, like, David Ellison wants Warner Brothers Discovery to have some semblance of the scale that would be required to compete in a world that is dominated by, you know, like, pick your brand, Netflix, YouTube, TikTok, Apple, Amazon, like, the list goes on. And so, what, what Bonta and co are doing is sort of presenting this like, very strict definition that is rather archaic, right? It has to do with

• 36:06Speaker 03

  like theatrical distribution, cable distribution, issues like that. And I get from a political perspective, why he feels the need to do that. And I think there are probably political ramifications for him if he didn't do that. But the notion, I mean, like, just think about it on his face, we all live in the real world in 2026. The notion that somehow a combined Paramount, Warner Brothers Discovery, a combined CBS, CNN, combined, what are the streaming services? HBO Max, Paramount Plus, is going to be this, like, massive dominant business that is going to somehow like, like, you know, corner every aspect of the market? That's just not real. That's not the world we're living in. And so I think

• 36:50Speaker 03

  Bonta has an uphill climb in that regard, but he can certainly create headaches and certainly legal fees for Ellison for many months.

• 36:58John Coogan?

  And so, zooming out, the, like, Hollywood is under attack loosely, or, or facing competition from tech platforms, YouTube, Instagram. And so, time, time and attention is more broad than just Hollywood. And so, with that backdrop, while consolidation might not be good within the view of Hollywood, there's less buyers for movies, it might be a defensive move in a world where you're facing extra competition for attention across the internet.

• 37:30Speaker 03

  Yeah, that's right. I mean, it's just how do you define the competitive marketplace?

• 37:34John Coogan?

  Yeah.

• 37:35Speaker 03

  And if you're talking about, you know, the fact that, look, Hollywood has, Hollywood is in decline. I don't think anyone can dispute that. And frankly, like, there are comparisons to Detroit, you know, of decades ago. And I don't know, you guys are in Hollywood, I live in Hollywood, sometimes it certainly feels that way. So, there's this notion that, like, okay, we used to have six studios, and then we have five studios. And if we have four studios, that's going to be a problem. And so, all of this sort of, you know, there are all these negotiations over, okay, well, we'll release 30 films a year, we'll keep both studios open, we'll have a 45 day theatrical window. And I'm sorry, but that's just, that is not where the, that is not where consumers are, that is not what consumers care about,

• 38:19Speaker 03

  that's just not what the market cares about. Like, you're not, people aren't, people, people don't think that the one form of entertainment that they have in the world exists in a theater, and they care about a 45 theatrical day window. Like, we live, I mean, to even say that we live in an era of like Netflix and YouTube almost seems passe, when you think about everything coming down the pipeline in terms of AI platforms and everything else. So, it just seems like remarkably outdated, which I suppose is an evergreen commentary anytime you have Washington going up against business, entertainment, media, tech. And again, I just don't, I don't see how Bonta wins that case.

• 38:57John Coogan?

  Mm hmm. Jordy, do you have a question?

• 38:59Jordi Hays?

  Yeah, it was just, how did the, the threat to leave California?

• 39:04John Coogan?

  Yeah, because it feels like there's a short term incentive to stop consolidation in Hollywood. But if you wind up with, you know, studios leaving Hollywood, well, you've lost the war, even if you won the battle. But how, how?

• 39:19Jordi Hays?

  Yeah, it's just, it's just reminding, it's just reminding me of the, of the whole Getty Images Shutterstock deal, which is, was announced in January of last year. It was a $2 billion merger at the time. Now, both companies are worth roughly like 300 million in the public market. So, two companies that are under attack.

• 39:42John Coogan?

  And I'm sympathetic to the idea that, that this does create like a stock photo monopoly. But in the world of AI image generation, like, a monopoly in the real world, stock photos actually taken with a camera, is probably the only thing that can go up against just random image gen. And so, it's a very logical move. But yes.

• 40:02Speaker 03

  Well, look, let me, let me just say first about the threat to leave California.

• 40:05John Coogan?

  Yeah.

• 40:05Speaker 03

  One, everything that you, every headline we see needs to be viewed through the, through the lens of brinksmanship, right? Everything is basically trying to win the hearts and minds of, of anyone who's paying attention to this deal. And the threat to leave California all of a sudden would seem like if you take it at face value, would seem to reverse the narrative. It's like, okay, Bonta's ostensibly coming out here to try and fight on behalf of Hollywood. And like, lo and behold, his measures are going to drive Paramount Warner Brothers Discovery out of Hollywood. A lot of people, I think, looked at that and thought that that was a bluff and there's no world in which Paramount WBD can, can leave Hollywood.

• 40:49John Coogan?

  Yeah.

• 40:49Speaker 03

  I, I don't know. I mean, look, I do think it is a bit of a bluff. I do think it's brinksmanship. On the other hand, as, as folks I spoke to reminded me, like David Ellison did not get into this business either to just have like an old fashioned Hollywood business that couldn't really compete with the big tech players, nor did he get into it in a David Zasloff kind of way to just like flip the business in three years. He's young, he's into like, he, he has, he has ambitions of grandeur, he has ambitions of empire building. He really does believe that he can position this company to compete with, with all those other companies we've already mentioned. And if you think about it through that lens, is he nostalgic about Hollywood itself and

• 41:34Speaker 03

  like the actual location of Los Angeles? No. If you look at what his father did with Oracle, he moved Oracle from Redwood City to Austin. I believe now it's moving from Austin to Tennessee.

• 41:44Jordi Hays?

  And, and there's other precedent, right? You have Tesla, you have Chevron.

• 41:51Speaker 03

  You have Hewlett Packard.

• 41:53John Coogan?

  Disney too moved a lot of people to Florida during COVID and there was a lot of backlash and not everyone moved and they still have a huge presence.

• 42:02Jordi Hays?

  And now is, now is it like, you know, 30 years ago, if you're said, yeah, I'm going to have one of the biggest entertainment companies in the world, it's not going to be based in Hollywood, you would have been laughed at. But now you talk to anybody here that's like actively making movies, TV shows, et cetera, and they're already traveling a bunch. So it truly doesn't need to be here.

• 42:22Speaker 03

  No, you're, you're traveling a lot. Different states have different incentives for filmmaking. And by the way, like go back to the Oracle Tesla examples, like you still have businesses here. You can, you could, you could theoretically have a Paramount Warner Brothers Discovery based in Austin or Nashville or anywhere else that still had studio lots in California and to the, the, you know, the folks in the writers room, the showrunners, the talent, they wouldn't know the difference.

• 42:48John Coogan?

  Yeah.

• 42:48Speaker 03

  So like, and the only person who would feel the difference is Rob Bonta, who suddenly would not be on the end of what David Ellison is touting as a $30 billion investment.

• 42:59John Coogan?

  Yeah.

• 42:59Speaker 03

  And at a certain point, Bonta is walking a very fine line because he's trying to fight for Hollywood, but he's running the risk of alienating one of Hollywood's most valuable players right now. And so it's, it's just, it's, it's politics. It's pure politics. And another point I brought up this week in my writing is like, just to underscore how much this is politics, I want you to imagine that David Ellison, who by the way, is not some like right wing MAGA guy, like he's not, he's, he's donated to Biden, whatever. He's really just a pragmatist who's trying to get a deal done. He would, he took Trump to Ringside at the UFC. He went to the State of the Union address. He held a, he held a private dinner for Trump and his administration before the White House

• 43:44Speaker 03

  Correspondents' Dinner. All of that to like the folks in the newsroom at CBS News looks like, you know, he's like the, the new Rupert Murdoch.

• 43:52John Coogan?

  Sure.

• 43:53Speaker 03

  The truth is, is if Kamala Harris or Joe Biden were in power, he would have done the same thing. It just would have been at like, you know, the, the US Open or Wimbledon instead of a UFC match. And, and like, and the fact of the matter is, is that in that scenario, Rob Bonta would probably not be bringing this case. And it would probably be Republican AGs who would be, who would be trying to bring this case. And I think we have to be honest about the politics there.

• 44:18John Coogan?

  Yeah. I like the idea of tennis at the White House. Maybe that'll happen soon.

• 44:22Speaker 03

  Right, yeah.

• 44:23Jordi Hays?

  US Open on the White House lawn.

• 44:25John Coogan?

  Yeah, maybe just all sports. It should just be a sports venue and they should just have the hockey and then basketball and then baseball.

• 44:32Speaker 03

  Did they, was there adequate sponsorship? I didn't watch the UFC match on the White House lawn. Was there adequate sponsorship? Like, did they milk that for our?

• 44:40John Coogan?

  Not nearly enough. We could have gone way further.

• 44:42Jordi Hays?

  Yeah, it's unclear.

• 44:44John Coogan?

  There were a lot of sponsorships.

• 44:46Jordi Hays?

  Yeah.

• 44:47Speaker 03

  Yeah.

• 44:47Jordi Hays?

  Yeah, I remember a specific image of Justin Gagey, the, you know, the American champion who, who won his fight, doing a backflip with a polymarket logo. And you can see the, the White House in the background.

• 45:01John Coogan?

  It's American.

• 45:02Jordi Hays?

  It was a very iconic image.

• 45:04Speaker 03

  Yeah.

• 45:05John Coogan?

  Can you talk about the debate that sprung up, I think a little bit earlier, once the merger was confirmed around the duplicative studios? Paramount, Warner Brothers, they have two, when we say studios, there's the abstract concept, but there's also like the physical historical locations that are very meaningful. There was this discussion over, is one going to be turned into apartment buildings? And that feels like sad from a I love Hollywood perspective. Also, if you're a housing person, it feels like maybe it'd be good to bring down housing prices, but, but, but at least the reporting that I saw from, from Puck was that there was a lot of pushback towards like, don't ruin this amazing financial, this historical institution. Is that chip still on the table?

• 45:50John Coogan?

  Has that been resolved? Because there's been a lot of like, okay, we're making this pledge, we won't do this, we won't, we won't cut. And I'm just wondering if any of those chips come back on the table.

• 46:01Speaker 03

  Well, here's what, here's what I would say to, to the one thing that Bonta has gotten right. Forgive me because I, I forget verbatim what he said, but effectively like in, in, in spirit, it's I can't regulate pledges, right? And, and that's true. And like, there is so much that is going to be said, which you should effectively take with the same grain of salt that you take from like a, a political candidate who tells you everything they will and won't do in office. Like, yes, is he committed right now to 30 films a year? Is he committed to a 45 day theatrical window? Is he committed, again, I don't have the latest on this, but to keeping both studios open? Sure. Once you've got the deal and once all of this is behind you, are there ways in which

• 46:42Speaker 03

  you can sort of finesse one of those lots into something else for your business and then maybe finesse that real estate out of the portfolio to save some money? Yes, and that will 100, 100% happen. I think about this, you know, I cover this deal a lot at the news level and the sort of like tie up of CBS and CNN. The minute this deal happens, folks at Paramount are going to start looking how to offload the real estate that is currently used by CBS News and move CBS News operations into Hudson Yards at CNN. And why you do that? Because you have $80 billion of debt and because you have promised synergies. And there's no world in which you're sitting there with two lots that are duplicative

• 47:25Speaker 03

  that do the exact same thing and think like, in order to honor the history of Hollywood, we will continue, we will continue spending twice as much money as we need to. It's just not going to happen.

• 47:36John Coogan?

  Especially not in the news business.

• 47:37Speaker 03

  No, and definitely not in the news business.

• 47:40John Coogan?

  Like, you can sort of make the claim around specific film studios being historically important to Hollywood. Hollywood means films, but when you think about the, the, what it actually takes to run CNN and CBS News, like there are tons of overlapping, just pieces of equipment that you're like, oh, that teleprompter there and that backdrop and that lighting is like all the same.

• 48:00Speaker 03

  And sure. And look, like I am sure there are some Scott Pelley types who have very warm feelings about the labyrinthine halls of the CBS News headquarters up on, up, up in uptown Manhattan. But there was a group of folks from CBS News who went to Hudson Yards, who went to Atlanta to tour it. And they're like, holy shit, these facilities are a lot nicer than ours. These are great. This is, it would actually be a lot easier to create TV here. So that, that will be really easy. And look, I, I think there is, as someone who covers change in the media space, there's always so much panic and nostalgia anytime anything changes because you think that thing that's changing is sacrosanct.

• 48:41Speaker 03

  And the truth is, is that it usually takes a matter of weeks or months before everyone sort of comes around to the new status quo and gets very comfortable with it. And that inevitably is what is going to happen here.

• 48:53John Coogan?

  Speaking of change in the media industry, have you noticed, I mean, you, you report and operate at what I see as like a very, very high level, the executives, the, the mega deal makers. But have you seen any knock on effects from the, the summer of YouTube blockbusters that we've been talking about here from the creator economy perspective? You have Iron Lung from Markiplier, Obsession, Backrooms. There's a number of YouTubers who sort of, you know, labored away in obscurity and then just put up incredible numbers at the box office. It feels like Hollywood might be looking for more scripts, more interesting IP, less sequels, less bought in things.

• 49:35John Coogan?

  But is there any individual studio that's excited about that trend or anything that you're seeing that's actually rising to the level of your reporting?

• 49:44Speaker 03

  I here's what I say, I do not have as good of an insight into this as I do into other, other things we've been discussing, but here's what I will say, just from a distance. The, every studio is thinking about, um, how do we, like, all the way to A24, right? Which is sort of like the belle of the ball when it comes to quality content in Hollywood, is thinking about like, how do we incorporate AI into what we are doing? And I think the signal that those, uh, creators sent with films like Obsession and others is like, this can be done and this can be successful. Does it mean that, you know, like, every human being is going to go away and we're gonna stop? Like, no, it does not. I think that most folks will learn, will find ways to incorporate this in, in ways

• 50:27Speaker 03

  that does not, um, significantly like degrade the value of the content that they're making. But I think the sky's the limit. Like, I, I really think that those examples have shown that this can be done and that there's more opportunity here than the folks who are sort of like clutching to Hollywood's past have realized. And by the way, that doesn't need to be disruptive in a bad way. That can represent like extraordinary opportunities. In, in the same way, like, you guys talk about this day in and day out. AI creates extraordinary opportunities in every aspect of, of business, industry, commerce, everything else. And like, that can happen here too, in ways where the human element remains.

• 51:07Jordi Hays?

  How much are you tracking, uh, these AI short form, vertical drama apps? There's, I'm counting three in the top 25 of the US iPhone App Store right now. There's Vibe Shorts, AI Comic Dramas, Net Short, Exclusive Short Drama Video, space exclamation point, and then Story Reel, Exclusive Drama.

• 51:34Speaker 03

  I'm not following, I'm not following any of this. It sounds, just hearing you see it, read it, it sounds like, is, is this just Quibi AI?

• 51:40Jordi Hays?

  Yeah, it's AI, AI Quibi. Uh, Katzenberg entirely vindicated on, on the format. Um, but, uh, but yeah, I, I've just been, I don't know anyone that uses these apps. I think we need to have Tyler on our team just spend like, an entire weekend, watch every single one of these and, and review them for us. But I, it's funny to me that, that these are, these apps are seemingly being created not within the tech industry, their tech, their technology products, and not within Hollywood. So it's like entirely just, you know, outsider groups that are ranking.

• 52:20John Coogan?

  The hoverboard.

• 52:21Jordi Hays?

  That are ranking, like, Net Short and Vibe Short are both outranking Kalshi, Paramount, Polly Market, like, during these massive sporting events, right?

• 52:34Speaker 03

  I mean, I guess, yeah.

• 52:36Jordi Hays?

  Like, like, Vibe Short is outranking Gemini and Anthropic by a very meaningful margin.

• 52:43Speaker 03

  Yeah. I guess, here's what, here's what I would say, and I, I'm granted, like, I'm a very poor authority on this because my entire content has been like World Cup and Wimbledon, or just staring at the Quaking Aspens in Sun Valley. Um, here's what, here's what I would say. As in every other industry, like, the technology has democratized the ability to do things, right? And so, like, to bring this conversation full circle, there's no, no real reason anymore that this has to happen in Hollywood. Now, I'm not suggesting that, like, you know, every institution just goes away, obviously. But what I am saying is, like, there is, you cannot look at something like the success

• 53:26Speaker 03

  of the YouTube creators, or the engagement that these, these, uh, short form platforms you're seeing, like, the engagement that they're seeing, and just dismiss that as a fad. That is, that is, that is a total, uh, reorientation of, of the possibilities that exist for people to come along and just create something that is going to be a massive hit. And again, to bring this back to the, to Ellison and to Bonta, you cannot argue that people who can put movies in cinemas on Hollywood Boulevard are somehow in a different business than the people who are making AI-generated shorts. It is solely a question of where people are spending their time, and then whether or

• 54:11Speaker 03

  not that time, that time and engagement can be monetized. And that, and it does not matter what category that falls into, it's just a matter, a question of eyes on screens.

• 54:22John Coogan?

  Do you have a view on how US-China relations might evolve with regard to Hollywood? Because it feels like some of the video models coming out of China are a little too good. And they might be, uh, they might be training on some, uh, Hollywood intellectual property across, across different studios. And it feels like, in order to actually take a lawsuit to the finish line, or have any sort of settlement or retribution, or some sort of, uh, even just truce to not allow you to put Mickey Mouse, or Spider-Man, or Batman in an AI-generated, open-source video

• 55:07John Coogan?

  model, or something like that, uh, it might require Hollywood sort of teaming up, going to Washington, asking for some sort of concession, or, you know, deal, within the construct of like, the larger trade negotiations around Rare Earth, and it could be one of many bullet points in a new deal.

• 55:24Speaker 03

  Yeah, I mean, I do say, like, and we, we're here, and we've been here for a long time, like, China somehow seems to be the great unifier when it comes to businesses saying, like, it basically as the antithesis, right? Like, the, the, it has been years that I have been hearing tech executives invoke China as a way to try and push back on regulation of US companies. I can certainly see a world in which China becomes like, the, you know, what's the term? The bugbear, like, that gets Hollywood to basically come together, work with, uh, regulators, and say like, we need to protect this because this is American, and that is a very palatable argument for the folks in Washington or the folks in Sacramento.

• 56:09Speaker 03

  Yeah, I can to, I, I can totally see that. I guess the, the thing I would say, though, is, I think what, what businesses really want is to be able to play in that market. And I don't, I think at, at a certain point, like, your ideal outcome is a way to protect your own, um, IP, your own technology, while also being able to open up what is obviously like, an incredibly robust and, and large market and work with them as well. And that, you know, that's a negotiation that obviously, like, Tim, Tim Cook has been involved in for a long time. A lot of this, when it comes to the US-China stuff, is above my pay grade, but that is sort of my sense of what will happen.

• 56:48John Coogan?

  Last question. Quaking Aspens, you've mentioned them twice. Are you?

• 56:53Speaker 03

  I love them.

• 56:54John Coogan?

  Arbore, what was it, arborist?

• 56:56Speaker 03

  Arborist.

• 56:57John Coogan?

  Are you into trees, or is this just something everyone that goes to Sun Valley recognizes about the trees?

• 57:03Speaker 03

  Here's what, here's, thank you for asking. I've been wanting to talk about this for a long time. Um, no, here's what I think. I wish I could convey to people, I, I'm very privileged in my position as covering the world that I cover, to get to go, like, it, it is sort of a treat of the media, tech entertainment space, that these guys all sort of choose to convene in the Mountain West.

• 57:27John Coogan?

  Yep.

• 57:28Speaker 03

  So, depending on where you are in the sort of hierarchy, like, you're either going to Sun Valley, or Jackson, there are many retreats sort of in Colorado, a lot of these guys own ranches from like Montana down to Utah, uh, there, there's of course, like, the Aspen Ideas Festival. It is just like a real pleasure that these guys chose to convene there as opposed to, say, Cleveland, right? Or like, just do everything in New York City.

• 57:50John Coogan?

  Or Vegas.

• 57:51Speaker 03

  Or even Vegas.

• 57:52John Coogan?

  Like, CES is in Vegas, and that would be, you know, where you'd be if you were on the electronics beat, probably.

• 57:57Speaker 03

  Thank, thank God I'm not, thank God I'm no longer the politics beat and have to go to like, Iowa, New Hampshire every year. And I just, if, if there's any way to just sort of convey the atmospherics of that world, um, I, I know of no better way than, than like, the lull of the Quaking Aspens and the occasional sound of like, a Gulfstream jet taking off on the tarmac.

• 58:21Jordi Hays?

  Beautiful. Are you writing a book right now?

• 58:26Jordi Hays?

  I don't know yet. I think you should be. You're tan, you're hanging out in the mountains. It seems like you have incredible energy. Maybe an audiobook. It's called, "The River Runs Through It."

• 58:36John Coogan?

  Okay. Maybe an audiobook and it's just a recording of the quaking aspens and the sound of Gulfstreams passing by.

• 58:43Jordi Hays?

  There you go.

• 58:44John Coogan?

  To fall asleep, to fall asleep to.

• 58:45Jordi Hays?

  There you go.

• 58:46John Coogan?

  Thank you so much for coming on the show. This is.

• 58:48Jordi Hays?

  Thank you, gentlemen.

• 58:49John Coogan?

  Have a great rest of your summer. Hope to see you soon and we'll talk to you later. Have a good one.

• 58:55Jordi Hays?

  Cheers.

• 58:55John Coogan?

  Goodbye. Let me tell you about Figma. Agents, meet the canvas. Your AI agents can now create and modify your Figma files with Design System Context. The quaking aspen, it's a tree. They're defined by the natural feature of Sun Valley Idaho landscape, famous for their pale white bark and shimmering autumn foliage. The quake is a flat leaf stems that cause the leaves to flutter and rustle at the slightest breeze. So when you look at.

• 59:23Jordi Hays?

  Dan says Gulfstream ASMR.

• 59:26John Coogan?

  Gulfstream ASMR might be a market.

• 59:28Jordi Hays?

  Tyler, I need you to watch a few vibe shorts, a few net shorts, and a few story reels by tomorrow. Deal?

• 59:39John Coogan?

  Deal.

• 59:39Jordi Hays?

  Deal? And we're gonna, I don't know if we can watch them on the show.

• 59:44John Coogan?

  No.

• 59:44Jordi Hays?

  We can probably play a trailer on the show.

• 59:45John Coogan?

  Maybe.

• 59:46Jordi Hays?

  But yeah, pick your favorite on the three apps and we'll circle back tomorrow.

• 59:52John Coogan?

  Well, our next guest is with us in the waiting room. We have Noah from TerraFirma. He's the co-founder and CEO. Welcome to the show. How are you doing?

• 1:00:02Speaker 04

  Doing well. How are you guys doing?

• 1:00:03John Coogan?

  In the safety vest, looking great with the flag in the back too. I love it. Please introduce yourself and the company. Tell us a little bit about TerraFirma.

• 1:00:12Speaker 04

  Yeah, so TerraFirma was founded by my co-founder and I after we were working at SpaceX and we were trying to build Starship rockets down in Boca Chica. And the construction was just too slow. We're like, why are we able to build rockets the size of skyscrapers at like one a month? But like building a road or a factory is taking years and years and years. So we quit our jobs to start a company to change all that. We're basically becoming a new type of construction company, like a full stack construction company. It builds our own robotics software and we actually operate as a construction company ourselves.

• 1:00:41John Coogan?

  Okay, robotic software. So are you, how deep in the supply chain are you going to buy equipment? Are you buying from Caterpillar and retrofitting them? Are you buying from the people that make the tracks and the treads and the motors? And then building your own, your own bulldozers and cranes? Are you using, you know, custom software and robotic automation just as a harness for the project management layer? Like what level of the stack are you operating now and where do you want to go?

• 1:01:10Speaker 04

  Yeah, on the hardware stack, you can probably see behind me. We take existing Caterpillar machines and we retrofit them. Caterpillar, John Deere, Komatsu, those machines, they're pretty good. They're robust. They've been around for hundreds of years, 100 years. They're pretty good. Everything else we build ourselves. So we're building all of our own software from scratch. Kind of the manufacturing engineering software that we built at SpaceX in order to operate large scale factories. We're building that for construction.

• 1:01:34John Coogan?

  And how did you actually go from zero to one? At this point, you've raised $115 million. What was the first project? Was it find the customer to sort of do it all manually? Or did you actually build robotic tools first and then go and prototype them? What was the flow?

• 1:01:53Speaker 04

  This is a great question. So 12 months ago, we were only four people. So for the first year of the company, it was just my co-founder and I. We wanted to make sure we had product market fit before we started like raising a bunch of money and spending it. So we actually built a bunch of robots using Tupperware containers that our lunchbox came in and like Raspberry Pi and Arduino from our college like kits. And we got robots working. And then we went around asking like, who is willing to let us make some money with these robots? And our landlord's like, hey, I got a building for you to demolish. You think you guys can do it? We're like, I mean, it's not rocket science. So my co-founder and I literally operated the robots ourselves, like in, the brain was a little Tupperware container.

• 1:02:31Speaker 04

  And we knocked down a couple of buildings and got paid our first check. And we're like, whoa, you could just become a robotic construction company. It's Texas. Like you could do whatever you want down here.

• 1:02:39John Coogan?

  That's awesome.

• 1:02:40Jordi Hays?

  What, I feel like you'll quickly get to the point where permitting is like the gating factor. Where like you get to the point where hypothetically, we could build this, you know, we could build this whole, you know, shell in, like the shell they're in right now. We could build something like that in, in three weeks, but then you're limited by sort of local government and approvals and things like that. Is that, is that right? And if so, how are you thinking about approaching that problem?

• 1:03:10Speaker 04

  This is a great question. People bring it up a lot. For starters, I just want to say like permitting is an issue, but it's not the issue. Like at SpaceX, once we had the permits, theoretically it should go super fast, but construction still took longer than it should have. Like we're operating at maybe 25% of a work week, nine to five, five days a week. We could operate at 168 hours a week. We could be at 100% utilization rate and we're not. So you can make construction four times faster once you get the permits before permits are the issue. Now, our approach to this is very similar to like how Elon approached building rockets. Like, okay, we have to solve manufacturing. We have to solve supply chain. We have to solve testing the rockets and designing them. And now the rockets on the launch pad fix the permits. And like, I believe in the bureaucrats of this country wanting to make the country better.

• 1:03:53Speaker 04

  If you have everything else ready to go and you make their jobs easy and you chew the food for them, they'll start approving permits faster and faster. They're not currently the main bottleneck most of the time.

• 1:04:03John Coogan?

  I imagine that we're firmly in the Centaur era at best. I imagine that every robotic piece of equipment has a human in the loop somewhere at this point. But walk me through your vision for where this goes. I imagine that in the long term, it's sort of, you know, you create a, you know, a spec for what you want to build or destroy or the construction project that you're working on and all of the robots go off and do everything. But before that happens, it'll probably be one human overseeing two machines. Like how does all of that play out?

• 1:04:39Jordi Hays?

  Think about it is like, you probably don't want to be like taking the approach to like, same approach as like vibe coding with like building a building. Cause it's like, hey, go build this ditch and then it builds it like slightly in the wrong place. And then you have to like, you know, fill it back in and you know, it feels like not as forgiving as the software domain.

• 1:04:59Speaker 04

  This is a great question. Do you want the economics answer or do you want the sci-fi answer?

• 1:05:03Jordi Hays?

  Both.

• 1:05:04John Coogan?

  Let's do economics first, sort of like short term. I mean, we're familiar with Waymo. They have, you know, Overwatch drivers that might see four screens. They can sort of beam into one at a time. How, what are the economics of that? And then where do we go from there? And then let's talk sci-fi.

• 1:05:21Speaker 04

  So in terms of economics, you have two curves that cross. You have the cost of autonomy, which becomes exponentially more expensive as you go from 90 to 95 to 100%. Waymo spent $30 billion or whatever it was over 20 years. And you have the value of automation drops off a cliff. When you have one person controlling one machine to one person controlling two machines, wow, 50% production and labor. But when you're at one to four, changing to one to five, it's if it's between 25% of your labor and 20% of your labor. So I think those two curves cross in construction at about one person controlling three or four machines, about 75% autonomy. That's the goal for us, 75% autonomy. And then you add a new machine and then you add a new workflow. And then you go from dirt works to subsurface abilities to concrete to steel.

• 1:06:01John Coogan?

  Oh, that's interesting.

• 1:06:02Speaker 04

  We're building up the tech tree.

• 1:06:03John Coogan?

  Yeah. And that sort of makes sense because I imagine that when you're actually just one, like old school piloting a construction machine, there's probably about 60% of your time is like downtime. Like I know I need to get the crane from here to here. And I've now, you know, pushed, put my finger on the button and I just have to hold it there while I get there. So while that's happening, you can sort of beam into a different machine, do something else and sort of queue them all back and forth.

• 1:06:30Speaker 04

  Yeah, it's a little bit more video game than that. You ever play like Starcraft or Age of Empires?

• 1:06:34John Coogan?

  Oh, yeah. Yeah, yeah, yeah.

• 1:06:36Speaker 04

  So we're able to say excavator, dig here. And you design a task for a minute and it will run for 20 minutes. Then you say bulldozer, run here.

• 1:06:43John Coogan?

  Sure.

• 1:06:43Speaker 04

  Roller, run here.

• 1:06:44John Coogan?

  Yeah.

• 1:06:44Speaker 04

  And this is actually our teleoperation center.

• 1:06:46John Coogan?

  Sure.

• 1:06:46Speaker 04

  We have like 20 desks behind me and these 20 desks allow us to operate like 80 machines at a time.

• 1:06:52John Coogan?

  That's very cool. So.

• 1:06:54Jordi Hays?

  What are your, what are, yeah, on the sci-fi front timelines to, you know, you have a piece of dirt and robots arrive to the piece of dirt autonomously and you have zero humans in the loop and you just get a structure in a very short period of time.

• 1:07:10Speaker 04

  You don't want zero humans in a loop. It's not cost effective. There's so many edge cases in construction.

• 1:07:15Jordi Hays?

  Yeah, but I'm saying like, but, but. If you continue to execute in the way that you're doing right now, wouldn't we be able to get to that point in 10 years, 15 years?

• 1:07:28Speaker 04

  I'm not sure if construction will ever fully be without a human in the loop. I think you'll have like a very small team of people that's very efficient, building larger and larger projects, and it doesn't ever make sense to get rid of a human. That's my personal belief. Even on Mars, I think we're going to have a small team of astronauts conducting like a large fleet of robots. There's just a lot of things that edge cases and things that the robots have never seen before. You can't collect enough training data to simulate every possible thing in the world. But if you're asking me the SimCity moment, when I can say, I want a road here, I want a restaurant here, I think we're like five to 10 years away from that. I think that coincides with our Mars ambitions.

• 1:08:02John Coogan?

  Coincides with Mars, five years to Mars? What are you thinking?

• 1:08:06Speaker 04

  We are technologically capable of going to Mars today if you had the political and economic desire.

• 1:08:11John Coogan?

  I mean, we've actually sent robots to Mars. Like, America has sent robots to Mars, so it's possible.

• 1:08:15Jordi Hays?

  He's like, send me, send me.

• 1:08:17Speaker 04

  Yeah, it's not a technology problem. It's more so like a economics problem. But I think we will solve both within the next 10 years.

• 1:08:26John Coogan?

  How, but I imagine that the machines that you build for the moon and Mars will be much more highly specialized. When I think about the helicopter we deployed to Mars or the rover, like, those are science experiments meant to take samples and test specific, specific factors of what it means to move around on Mars. But I imagine even in terms of building, you wouldn't just plop down a caterpillar, would you?

• 1:08:52Speaker 04

  No, diesel engines won't work in vacuum, so you've got to redesign the hardware. But at the end of the day, it's like a smart shovel, like you're moving dirt. It's not the most complicated thing in the world.

• 1:09:01John Coogan?

  Sure, sure, sure. Very cool. Well, let's hit the gong.

• 1:09:04Jordi Hays?

  Yeah, last question, just because the crowd is loving it. And I wish we had more time, but how do you, do you expect any changes to, like, the material side, like, building materials side as robotics become, you know, much more part of building various types of structures? Or is it like, let's just change one thing at a time? Because I feel like-

• 1:09:28Speaker 04

  This is an awesome question. Are you familiar with the term DFM, like, design for manufacturing?

• 1:09:33Jordi Hays?

  Yeah.

• 1:09:33Speaker 04

  Like, at SpaceX, we literally had to, the materials were pretty simple, it was like stainless steel, like, the most common type. But you had to change the inputs to your system to be assembled by a robot. Like, Starlink couldn't take V1 Starlink and make it at the speed that they're building V4 Starlink. They had to change the piece parts. I think we're going to change the way we connect the pipes. I think we're going to change the chemical formulations of concrete. We're going to change how we weld steel structures. We're going to redesign the building codes to match something that can be built quickly by a robot.

• 1:10:00Jordi Hays?

  That's amazing. I figured.

• 1:10:00John Coogan?

  Tell us about the round. How much did you raise?

• 1:10:03Speaker 04

  So, we've raised 115 million.

• 1:10:08Jordi Hays?

  Who'd you raise it from?

• 1:10:10Speaker 04

  So, our Series A was 100 million, led by Kleiner Perkins.

• 1:10:14John Coogan?

  Kleiner Perkins.

• 1:10:17John Coogan?

  We got Bain Capital, Banner VC, Saga Ventures, Trust Ventures, Magnita. Wow. Murderers Row. Clayd Rock Capital, you got a bunch of great folks around the table. Congratulations.

• 1:10:28Speaker 04

  The American industrialists.

• 1:10:29John Coogan?

  Glad you have the capital to build. We need it more than ever right now, so thank you for everything you're doing, and have a great week.

• 1:10:35Jordi Hays?

  Do us a favor, raise another massive round.

• 1:10:38John Coogan?

  Yes.

• 1:10:38Jordi Hays?

  Maybe, maybe take it up, up from nine figures to the, to the, to the next zero.

• 1:10:43John Coogan?

  I like it.

• 1:10:43Jordi Hays?

  Come back on this year.

• 1:10:44John Coogan?

  You deserve it.

• 1:10:45Jordi Hays?

  But, uh, great, great to meet you.

• 1:10:46Speaker 04

  We'll talk soon, and we'll host our next one from the Mars base.

• 1:10:48John Coogan?

  Fantastic. We'll talk to you soon. Have a good one.

• 1:10:51Jordi Hays?

  See ya.

• 1:10:51John Coogan?

  Let me tell you about CrowdStrike. Your business is AI, their business is securing it. CrowdStrike secures AI and stops breaches. Our next guest is returning to the show. We have Sam from Greylock Partners. He is a partner there. Sam, welcome back to the show. How are you doing?

• 1:11:06Speaker 05

  I'm doing great. Great to see you guys. Thanks for having me back.

• 1:11:09John Coogan?

  Thanks for hopping on. Let's kick it off with another gong hit since it's warmed up. Tell us what happened. Give us the news. What's new in Greylock world?

• 1:11:16Speaker 05

  We've, uh, we've got some big news today. We're announcing Greylock 18, our 18th venture fund. It's a billion and a half billion.

• 1:11:27John Coogan?

  Early-stage founders specifically. I want to know, uh, opportunities created in AI. I'm interested in the next generation of AI companies. Obviously, there's so many huge private, now SpaceX is public, so like, there's a number, a deep mind, there's a number of like first-gen AI companies that are huge. But there still is a lot of opportunity. Where are you seeing the opportunity? There's, there's early-stage companies that are going deeper in the stack, selling to the, the, the big labs. There's also niche players. Like, how are you viewing the market? How are you mapping things out?

• 1:12:02Speaker 05

  Yeah, I'd say overall is we're very early in this wave, and we think there's going to be winners up and down the stack. And I think the only mistake you can make in AI is underestimate the size of the wave and think it's binary in outcome. So, you know, we've invested up and down the stack, and the foundation model layer, you know, investors in Anthropic and OpenAI. In infrastructure, you know, we invested in Base10 back in 2019, before generative AI was a thing. Today, they're the leaders in inference, right? Brain Trust, I remember in 2023, no one was using the word evals, right? Notion was using their product, and today, fast forward, evals are the core IP of AI and most of the value is using Brain Trust for it. Right? So, we've done a lot in inference, and of course, a lot in applications. I, we're going to see new opportunities up and down the stack.

• 1:12:45Speaker 05

  So, on the infra side, I think, you know, you guys are talking about agents every single day, there's going to be a new set of abstractions around infrastructure to actually power agents. Of course, inference and observability is going to play a big part of that, but there's more to do there. There's new things in data structures, databases, runtimes, et cetera. On the application side, I think we're just getting started. It wasn't until, um, you know, the model, set of model releases in December of '25 that you actually had robust agents. And now, like, and I've seen our portfolio, like, we led the initial round in Resolve, which is an agent tech software liability engineer. Today, companies like Coinbase, it completely automates on-call. So, engineers are no longer getting woken up because there's an incident, because the Resolve agent fully handles it autonomously. Or, you know, we're in 7AI, which does the same thing for security teams.

• 1:13:29Speaker 05

  Those products are like coming to life because the underlying models are finally there to really support these long-running agent workflows. And so, you're going to go into different application categories and be able to build new agent off-ranks. So, I think that that's going to be really big. And then, of course, things outside of software. Like, we, you know, we were some of the early investors in autonomy, like Aurora, which is, I think, the largest standalone public company in self-driving. You know, we've led the initial round in NeuroOthers. We're now going to see a whole new wave of things happening in robotics, and I think the underlying model capabilities and the data sets that we're building are finally going to get us there, where we're going to see a, like, proliferation in the real-world economy as well. And we've made some new investments, are still in stealth, we're excited to talk about soon.

• 1:14:11John Coogan?

  Yeah, we talked about Aurora yesterday because they bought ATG from Uber, the advanced, the autonomy group. I'm, I'm interested in, in hearing, are you noticing any categories of company that have shifted from venture-backable to more likely to be successful as a lifestyle business? Because they are so capital-light in the AI era that you, if you have a friend that comes to you and says, like, I want to start a video game company, or I want to start a, a, a niche SaaS company, you're like, yeah, 20 years ago, you'd need to raise $10 million to rack a bunch of servers. Couple of years ago, you'd have to go through YC or raise a million bucks to hire some software engineers.

• 1:14:53John Coogan?

  But this, you can just build it this weekend and go get customers and be profitable tomorrow. And so, are you noticing that trend? How is that, how is that changing your investing philosophy, or is that just a ruse?

• 1:15:06Speaker 05

  I think the lens on whether or not something should raise venture capital is more about the ceiling, not the floor. So, I think it's absolutely correct that you can get a lot more done with less capital now.

• 1:15:15John Coogan?

  Yeah.

• 1:15:15Speaker 05

  But what's also correct is that the size of the prices that are available, and our whole brand around the new fund is the map is blank again because we think AI just resets the entire map.

• 1:15:24John Coogan?

  Yeah.

• 1:15:24Speaker 05

  The size of what's possible now, the size of these categories, is so enormous-

• 1:15:29John Coogan?

  Yeah.

• 1:15:29Speaker 05

  -that venture capital dramatic, even if you can be capital-efficient and get a lot done on a given dollar, if you can, uh, increase the size of your capital base, the aggression and speed with which you can move is just much faster. And I think, like, I, I think it's an interesting kind of observation. You take the last three years, there's a lot of discussion around what you can get done with AI, et cetera. At the same time, the capital velocity in companies is faster and at a larger order of magnitude than it's ever been. Like, we look at this in our portfolio, you know, we're primarily doing the first rounds, and the speed at which companies raise their Series A, Series B, Series C, and, you know, the size of these rounds, which often are in the hundreds of millions, you know, very, very quickly. Like, that's an interesting observation. You ask, why is that?

• 1:16:11Speaker 05

  And I think it's because we're operating in such big, like, in such big and new categories and opportunities, that the price to be the number-one player is so significant that you need to do everything you can as a company. And so, if you can be more efficient, the real lens is like, what else can you go do and help quickly? And that's why we're seeing companies have much faster product velocity, have much faster revenue growth. They're spending, they're getting more out of that spend, but they're spending. And in fact, I would say they're spending more in this last three years than in the prior decade.

• 1:16:43John Coogan?

  The map is blank. I love that as a rallying cry. At the same time, I see a new market map in every category, and it's stuffed full with AI startups, and it feels like it's more competitive than ever. I'm interested to know, are there categories that are now more oligopolistic, more, like, like, less monopolistic? It feels like the software 2.0 era was very much, oh, there's a runaway leader in this particular niche, and it's winner-take-all, and they're just compounding. But now, I've been so surprised when I check in with the, the third-biggest or third-most well-funded company in a particular area, and they're accelerating revenue, and they, like, tripled revenue last year, and it's a great company by historical standards, even though it's like a laggard in the modern era.

• 1:17:30Speaker 05

  Yeah, it's a great question. And yeah, it's interesting, by the way, like we, there's all these market maps, people count these companies as winners. And I think we forget that like, the game's just beginning. I mean, you rewind the clock just 18 months. And you look at what the foundation model landscape looked at at that time, and then you fast forward to today. And you know, we fast forward another 18 months, and there's going to be more evolution. So I think we all live on Twitter where we're trying to clear everything over like every single minute. Like we, we should zoom out and remember these things are very nebulous. But yeah, I think, you know, the difference with AI is the size of the prize, especially when you're automating labor. And you're shifting these labor dollars to software and technology dollars is so dwarfed. Like, or so dwarfs relative prior software categories.

• 1:18:15Speaker 05

  They think you can have more winners that can get larger much faster. And I'll give you just two examples. In the customer support category, we, you know, led the initial round in Cresta. Cresta is north of 100 million in ARR, you know, growing very quickly, doing customer support AI. There are likely, there's at least two other significant companies in that category, maybe more, you know, at similar revenue scale. And I think multiple companies in that category will get to a billion of ARR in the coming years. And the reason for that is just AT&T alone spends a billion dollars a year in contact center spend. And you extrapolate that across all enterprises, you think about what's addressable.

• 1:18:49John Coogan?

  Yeah, it's way different than IT spend, right? Like, because there was a war for Zendesk and Salesforce had a solution. And there's a number of previous era, you know, software products, but it's a very different pool of spending to pull from.

• 1:19:04Speaker 05

  That's right, that's right.

• 1:19:06Jordi Hays?

  What are, what are your first checks? What have your first checks been looking like? It's a one and a half billion dollar fund, you're investing, you want to be doing the first.

• 1:19:17John Coogan?

  It's like two early stage deals.

• 1:19:19Jordi Hays?

  Yeah, just 750. No, but, yeah, so how are you thinking about it? What percentage of the new fund is going to be reserves, follow on capital versus like, you know, net new investments?

• 1:19:33Speaker 05

  So, you know, for us, the North Stars, we want to back the most important companies of this era. And we think some of those companies require much more significant checks when they get started. Because of the people who are starting them, the ambitions, the opportunities. So as one example, you know, we, 21 years ago, we backed Palo Alto Networks when it got started, got started in our offices. I think that company today is almost at 300 billion in market cap. When we wrote the initial check, I think it was a $250,000 initial check. Fast forward, the founder of that company, Nirzuk, left Palo Alto last year. He started a new company with Greylock, right? That company is called CyLake, right? It's building a really new important cybersecurity platform. Our initial check, there's 36 million dollars.

• 1:20:15Jordi Hays?

  That's what I figured, that's, yeah.

• 1:20:16Speaker 05

  We want to back Nirzuk, the largest company in cybersecurity in history, a 300 billion dollar company. We want to back him to go build something, you know, of consequence. And that has a different capital requirement. And so we have a larger fund.

• 1:20:30John Coogan?

  We just got a goal, sorry.

• 1:20:35Jordi Hays?

  Who scored, who scored? Spain?

• 1:20:37John Coogan?

  Spain just scored.

• 1:20:38Jordi Hays?

  There we go, there we go.

• 1:20:40John Coogan?

  Sorry, we had to cut to the fan cam.

• 1:20:43Speaker 05

  I respect it.

• 1:20:47Jordi Hays?

  Who you got, who you got in the game?

• 1:20:49John Coogan?

  Who's playing?

• 1:20:51Speaker 05

  So Spain's up 1-0. I thought France was going to win this easily.

• 1:20:55John Coogan?

  Well, Spain's on its air, yes. But you are too, and thank you so much for coming on the show, breaking it down for us, and congratulations on the new fund.

• 1:21:03Jordi Hays?

  Yeah, stoked for you guys.

• 1:21:04John Coogan?

  Stoked for you.

• 1:21:04Jordi Hays?

  And looking forward to talking to all the new founders out of the new fund.

• 1:21:08John Coogan?

  Yeah, we'll talk to you soon. Have a good one, goodbye. Let me tell you about Cisco. Critical infrastructure for the AI era, unlock seamless real time experiences, a new value with Cisco. So yeah, what actually happened there? I have not been watching the game, but.

• 1:21:25Speaker 06

  Yeah, there was a Spain goal, 22 minutes left, Osho Bajal, 1-0 Spain.

• 1:21:29Jordi Hays?

  Was, you thought the PK was fair?

• 1:21:33Speaker 06

  Yeah, yeah. Very nice shot. He kicked Laminya Mal on the, on his like side. It's kind of like a bang bang play. I want Spain to win. Bang bang.

• 1:21:42John Coogan?

  Okay, well, our next guest is in the waiting room. We'll bring in Yanis from Reflection. He's a co-founder, president and CTO. And it's his first time on the show. Welcome to the show, Yanis. How are you doing?

• 1:21:55Speaker 07

  I'm doing all right. Thank you so much for the invitation.

• 1:21:57John Coogan?

  Thank you so much. Hopefully, we didn't pull you away from the World Cup. I'm not sure if you've been following, but it's 1-0.

• 1:22:04Jordi Hays?

  Hasn't even seen a minute. He's locked in.

• 1:22:08John Coogan?

  But since it is your first time on the show, I would love a brief introduction on yourself. And then I'd love to hear about the news and the deal with Nebius.

• 1:22:15Speaker 07

  Absolutely. So first of all, again, thank you so much for having me. I'm Yanis, I'm the co-founder of Reflection. Before that, I was one of the founding engineers of DeepMind, joined really early. And I spent most of my career there working on deep reinforcement learning research. So anything from DQN, which is the first deep reinforcement learning agent to ever exist, to AlphaGo, AlphaZero, NuZero. And I was doing RLHF, I was leading RLHF for Gemini before I left. And left with Misha to start Reflection, where we're building frontier open models. And we want to ensure that open intelligence remains open and accessible to everyone.

• 1:22:52John Coogan?

  So I imagine demand for the business is through the roof, because you just signed this big new deal. What's actually driving it? What are the, what are the enterprise use cases that you're seeing? Who are the key customers? What's the shape of the customer base? And then why now with this particular deal? And why Nebius as a partner?

• 1:23:11Speaker 07

  Yeah, so I mean, let me just like start by saying that, you know, building frontier open models is, requires two things. So it requires like a lot of incredible talent. And we've been extremely privileged with the fact that like many of the best people in the industry have actually joined us to work on frontier open models and work closely with me. So just like really like for that. At the same time, the other thing that you need is compute, right? Like this is what fuels AI research, like that's, that's kind of like the thing that like keeps the researchers busy. So to this end, we actually like, you know, signed this billion dollar deal with Nebius to just like get the compute that we need.

• 1:23:54John Coogan?

  Congratulations.

• 1:23:57Speaker 07

  Thank you.

• 1:24:00John Coogan?

  I'm interested in, if we can shift to history for a second, just your reflections on, no pun intended, sorry. The, just the progress in computer use. Recently, I saw a demo of Codex and 5.6 Soul playing Slay the Spire, this card game that I played a lot of. And I know how hard it is, and it sat there for five hours and played the daily challenge. And I'm wondering if, are we ahead of your timelines in terms of generalization? What is your overall thesis on progress? Where have you been surprised based on what you obviously had a front seat to a preview of years ago?

• 1:24:47Speaker 07

  Yeah, that's a really good question. I think that it's actually like, you know, I've been in the industry for like 15 years. And I've actually like seen the progress we've actually made in the past 15 years. And, you know, every time that we felt that we, there was a wall or there was like something stopping us, we just kind of like overcame it almost immediately. So it's kind of like really, you know, this is like the best time for anyone just be doing like AI research. And, you know, I think that, I'm not surprised anymore. I think I've seen so many things in the past like 15 years, that like it's really hard to be surprised. Sometimes this exponential growth, exponential curve, it's like really hard for the human mind to just like fully understand it.

• 1:25:30Speaker 07

  But, you know, just things just change extremely fast. And we should just be really adaptable and really understand that, you know, AI is still on this exponential curve. And incredible things are ahead of us.

• 1:25:45John Coogan?

  But once you're on, once you're living on the exponential, you sort of internally, like emotionally operate on the second derivative. And so you're sort of like, yes, this is as expected, once you've internalized it fully. But yes, I agree that it's shocking.

• 1:25:59Jordi Hays?

  Can you, can you talk about the advantages and disadvantages between Chinese labs that are making open models versus American labs, like Reflection that are making open models? Because I imagine it's like, you know, you might have better access to compute, maybe more capital, but potentially more restrictions around, you know, things like distillation that could provide advantages in some way. But how do you, how do you think about that competition?

• 1:26:29Speaker 07

  Yeah, so, you know, one thing is that like it's, it's really opaque, exactly like what the Chinese labs are doing like on the ground.

• 1:26:38Speaker 07

  You know, some things we know is that like maybe there hasn't been as much of a respect to IP and, you know, restrictions in terms of like use of data. That we know, as an American company, of course, we are like fully compliant. At the same time, there are like, there've been accusations, I don't know if they're true or not. But, you know, from like US labs, that the Chinese labs are actually doing distillation of like an industrial scale from their models. And that's, that of course, something that like any Western lab would ever do. And, you know, there are like definitely gains in terms of access to compute or like, you know, things that we, we can get access to like the latest compute.

• 1:27:18Speaker 07

  At the same time, I've also had that like the Chinese labs, you know, have found ways to bypass maybe the restrictions in terms of compute, like via getting compute from like other places. I think that like we have definitely the advance of like having, you know, the talent here. In the sense that, you know, the frontier labs, the closed frontier labs are based in the United States. And like many of these people have actually been to the frontier, they've seen the frontier. And many of them have actually chosen to join us now and just like work on our models. So that's definitely a benefit.

• 1:27:55Speaker 07

  Yeah, I think like this is this kind of like the world as it is, but you know, there I don't think that like the fact that we are a Western lab and we might not we cannot cheat means that like we won't just build the most powerful open models. I think like it's actually the opposite. The fact that the closed labs also like never cheated and they are the frontier means that like we have the talent, we know we have the know how and we now have the compute of like all these deals to ensure that we know we catch up to the Chinese open frontier and after that our ambition is to just like close the gap between closed and open and ensure that like frontier intelligence is accessible to everyone.

• 1:28:33John Coogan?

  In the in keeping with bringing access to frontier intelligence to everyone, your former colleague, Demis Hassabis from DeepMind, just today is advocating for a US frontier AI standards body and he specifically says that he wants to apply rules and and tests, submit models for testing, that would even include open source models. Have you grappled with that? I mean, you're a large company, very successful, $8 billion as of the last round and yet as a

• 1:29:12John Coogan?

  as someone who can be a little wary of overregulation, I don't want to slow a an exciting company down that might not have the resources to staff a huge lobbying group in Washington DC to get open source models approved. So how are you grappling with the idea of as models get more powerful, deepening your relationship with the United States government?

• 1:29:37Speaker 07

  Yeah, so I can't like it's important. No, as reflection, we also like always want to engage and ensure that like the models are safe, they're like well received and they actually meet standards. So just like do whatever is required from us. I don't want I want to ensure and I think like many people in the community feel the same that like there is a frontier open model in the US market. This is kind of the bedrock upon which presets in research institutions around the country are building their solutions. This is the tools that like developers and like early stage startups use to just like build new products and kind of like drive innovations.

• 1:30:17Speaker 07

  So we need to just like be we need we need to just ensure that there is like room for frontier open intelligence in the United States and in the Western world. And I feel like this would be just a net positive for the society as a whole. So you know, always here to engage in any way we can, just like from and also like express the voice of people who believe in open in the open ecosystem.

• 1:30:39John Coogan?

  Yeah, I think my nightmare scenario would be some situation where you're slowed down, but international firms are not slowed down by some weird quirk. And so I hope that whatever happens, we at least get a level playing field for everyone, both closed source, open source, but also internationally. You don't want to add advantage a geopolitical rival by accident. But that makes a ton of sense and I'm sure you'll navigate it all flawlessly. Thank you so much for coming on the show. Congratulations on all the progress and

• 1:31:10Jordi Hays?

  Yeah, great to meet you.

• 1:31:11John Coogan?

  Meet you. Have a great rest of your day.

• 1:31:13Speaker 07

  You too. And thanks so much.

• 1:31:14John Coogan?

  We'll talk to you soon. Let me tell you about Railway. Railway is the all in one intelligent cloud provider. Use your favorite agent to deploy web apps, servers, databases and more, while Railway automatically takes care of scaling, monitoring and security. Our next guest is Jack Dent from Chai Discovery and he's here with us now in the TPN Ultra. And welcome to the show, Jack. How are you? Welcome.

• 1:31:36Speaker 06

  Thank you. Great to be here.

• 1:31:38John Coogan?

  Thank you so much. Could you quickly introduce yourself and the company? And then I want to go through the news, but I'll let you start with an introduction.

• 1:31:45Speaker 06

  Sure. So I'm Jack. I'm one of our co-founders here at Chai. At Chai, we're building what we like to call the computer aided design suite for molecules. So think like Photoshop or Blender or SolidWorks, except instead of designing a car, you're designing molecules. These are small collections of atoms which are often used for things like medicines and that can actually go inside our bodies and do things like like cure us. And so we operate at all levels of the stack. We're both a, you know, frontier research lab, also a product company, also a bit of a science company and tie all of those things together to put that that piece of software in the hands of some of the largest pharmaceutical companies in the world.

• 1:32:28John Coogan?

  So specifically narrow to pharma, but I imagine that you will have applications in material sciences all all over the place. But is is pharma just the the best landing zone? Or is that such a deep market that you'll stay there in perpetuity?

• 1:32:46Speaker 06

  Yeah, I think pharma is right now where we're really focused. You know, our models, they work at the level of atoms and molecules and that you also require different categories of models when you're trying to do different tasks. So it's not like a specialized model that will design an antibody will necessarily like out of the box work for material science as well. That's still some additional work. But but pharma is also, you know, this is a multi-trillion dollar industry. It's actually larger than the chip industries in in revenue in and of itself. And so it's this massive market that obviously does huge amounts for human health and there's just so much runway to to build into that.

• 1:33:28John Coogan?

  So what actually is different about the models that you're developing? Do you have the same sort of massive capex around pre-training runs and scale is all you need and you need to marshal all this compute? It doesn't have a different shape? Is there a different data puzzle that you're solving? How how important is your feedback loop with your customers? How does your lab look different than sort of a lab that's focused on coding, for example?

• 1:33:58Speaker 06

  Yeah, it's a great question. It's really all of the above. So when I say we're a research company, that means that we actually train our own models from scratch. These aren't like LLMs that we take off the shelf and fine tune some open architecture. We're starting at, you know, PyTorch and then below that down even at the kernel level sometimes and creating models which actually look quite unlike the sorts of models that you build elsewhere. Sort of like how if you're training a video diffusion model, that's a pretty different architecture to what you train for language. These just different model categories require fundamentally different avenues of research. And, you know, one piece of intuition here is in the same way that video models sort

• 1:34:40Speaker 06

  of think in 2D and they put pixels on a grid. And so, you know, auto aggressive token prediction with a language model maybe isn't the best fit. You know, our models think in in 3D really. They put individual atoms in 3D space to construct these molecules. And so that means we really need to have a command of the the entire stack. And then the data as well, this is not natural language data. It's very domain specific data. It's these vast troves of protein sequencing data sets and structure data sets where people have used essentially really powerful microscopes to go and look atom by atom at the structures that that that exist in nature. And then we

• 1:35:21Speaker 06

  also do a lot of data generation in house as well. We throw that off as well. So and that's just at the the research layer. Then there's a whole, you know, products layer on top of that as well. It's almost like, you know, we're training Claude as we're also building, you know, cursor or cognition. And so we need to do those things hand in hand. So there's also this this feedback loop with the the scientists and our both at the pharma companies, but our users, many of whom sit inside the company and dog food and try and push the frontier of these models. So it requires, yes, to be just A plus across both science, AI research and and product engineering as well.

• 1:36:00John Coogan?

  Please.

• 1:36:00Jordi Hays?

  Have you seen any scientists get quote unquote one shot in the way that certain vibe coders have staying up all night?

• 1:36:09John Coogan?

  Where they're just like staying up all night. Laptop open with Chai Discovery running at all times.

• 1:36:13Jordi Hays?

  Yeah, because I mean, it's such an interesting challenge that that the labs have faced where you're trying to balance like making products that are enjoyable to use, effective. In a weird way, you know, you are optimizing for engagement. If you're optimizing for revenue, just because someone's more engaged, they're using more tokens. But I'm curious if you've seen any signs of that, because so far, the labs that have experienced the most extreme product market fit have gotten to the point where there's this idea of like one shotting. And then you have to like, you know, align the model better and and improve that.

• 1:36:52Speaker 06

  Yeah, totally. And actually, you know, maybe it's worth just providing some historical context here on just how quickly the research has moved in this field. You know, a year, a year and a half ago, basically, none of this stuff worked. You know, it was, or the success rates were extremely low, you know, 0.1%. And over the course of 2025, these models went from being these research curiosities in that they were maybe interesting things to study in some academic labs, but they weren't really being used in real drug discovery workflows. In July, June, July of last year, we put out a paper called CHI2, where, you know, the title of that paper was zero shots antibody design in a 24-well plate, literally

• 1:37:35Speaker 06

  getting at this exact point where you could start to design these molecules without needing to fine tune them on a lot of data. You could really just prompt them in the way that you had prompted LLM with an input, you know, a target, maybe some, some disease you're going after, a target that's implicated in that disease. And it would, you know, design a number of candidates that would, that would help do that essentially. And so, you know, I created some really, you know, interesting situations where, you know, we would go into, you know, a pharma company and we'd be presenting some data. And there's one that comes to mind in particular, where somebody pointed to one of our slides and says, oh, my God, you, you solved that one? Did you choose that on purpose? And we're like, no, we didn't,

• 1:38:17Speaker 06

  we didn't choose that one on, on purpose. Why? And they said, you know, I spent five years of my life working on that, that target, trying to, trying to find a bind it to it. So, you know, the, this technology has really moved beyond, I, I think AI and drug discovery has been in the realm of promise for a really long time, where it's been, there's been a lot of hype and attention around it. But in 2025, we really like crossed the, you know, crossed the Rubicon in a way. And now these technologies are, are, you know, be actively being deployed in companies like Eli Lilly, Novartis, Pfizer. You know, these are some of the most scientific, highest tech companies in the world. And they're

• 1:39:00Speaker 06

  putting them into real drug programs and, you know, making them part of their core discovery engine. And I think that's, that's what might get missed here, but, you know, so much has changed in the last year on the technology side. And it's created this wave of, of new applications. And what, what's amazing is the scientists themselves are the most happy about it. They don't love the fact that they fail 90% of the time or that they're

• 1:39:23Jordi Hays?

  Yeah, or they could dedicate half of their career to one disease and, and make, you know, modest progress, or maybe their entire career. Do you think, do you, do you think there will be something, the music industry is funny right now, because, you know, every artist is using AI, or not every artist, but many of them, both casual artists, non-professionals, you know, amateurs, but also professional musicians are using it, but no one wants to talk about it. I expect that Pharma will be much happier to talk about it. But is that the right intuition?

• 1:40:00Speaker 06

  Yeah, I think that's exactly right. I think 2026 is the year where these technologies are going from being fringe technologies, which people are adopting on the side to actually technologies, which, you know, entire discovery programs are, are built around. And so, the, you know, pharma companies are not necessarily the loudest, you know, they care a lot about their IP. And they, you know, there's obviously some, some alpha in figuring out some, you know, an advantage in getting a, a drug to market faster than someone else. So I think that will be, be lagging. And then I think there'll also be some time for some of these de novo drugs to get into clinical trials in humans and

• 1:40:43Speaker 06

  there'll be validation there still. But what's important is, you know, that adoption curve is, is, is well underway now. It's kicking off, you know, it is the most sophisticated companies. And, you know, some of the stories we're hearing already are just, are just remarkable.

• 1:40:57Jordi Hays?

  On the, on the business model side, you're, you're very full stack already. You're building the, you know, the harness, the model, and then the research that goes into the model. At some point, I imagine you'll have a customer that develops a new drug using CHI. And that drug, you know, goes on to generate, you know, tens of billions or hundreds of billions of dollars of revenue. To me, that's like what success

• 1:41:21John Coogan?

  Blockbuster.

• 1:41:21Jordi Hays?

  A blockbuster drug created with CHI. Depending on how you charge for that, it's possible that you end up capturing

• 1:41:29John Coogan?

  200 bucks a month.

• 1:41:30Jordi Hays?

  Yeah, just some, some like very, you know, minimal amount of value, which is good. Every company, you know,

• 1:41:37John Coogan?

  Huge positive action.

• 1:41:38Jordi Hays?

  Want to capture less value than, than they create. But at some point, would you consider, or, or have you considered a model where you're a true partner to these companies?

• 1:41:49John Coogan?

  Joint venture.

• 1:41:49Jordi Hays?

  And, and you're doing sort of joint, joint ventures where you're basically giving them access to the product in exchange for long-term upside?

• 1:41:58Speaker 06

  Yeah, you know, that traditionally has been the model. If you look at how biotech deals tend to work, a lot of them includes things like royalties and upside sharing in the drugs. You know, this is really just all partner driven for us. You know, what does, you know, we live to serve our, our partners really. And what do they, they want to do? And what they want to do right now is, a lot of them wants to take our technology and deploy it, you know, fairly broadly across the portfolio. And that, that means that, you know, we get rewarded financially for that. We also can reinvest some of the money they're paying us into building even better models for them. And so, that, that way of doing business is working well for us right now. There may come a point where,

• 1:42:41Speaker 06

  you know, some pharma companies turn around and say, hey, we'd love to do a joint venture or, you know, go 50, 50 on this thing with you. And, you know, I think suddenly open to that. But really, it's, it's partner driven for us. And we, we are, we're trying to, you know, what we see ourselves as, as this, you know, core platform layer, which enables their, you know, their discovery engines. And, you know, that, if you look at the top pharma companies, they might spend five, 10, 15 billion dollars a year in R and D. And so, even that, that's not even, you know, on a, what they're spending, you know, on, on royalties or anything. That's just their, their R and D costs. So it's a massive market to be building into. In fact, you know, it's even larger than

• 1:43:24Speaker 06

  some of the, the money that's spent on, you know, semis R and D every year. Pharma is one of the most enduring and durable categories of applied R and D spend in the world.

• 1:43:33John Coogan?

  Good point. Well, you have some new partners on the financial side. Tell us about the round. I want to hit the gong. How much did you raise?

• 1:43:40Speaker 06

  Yeah. So we raised 400.

• 1:43:46Jordi Hays?

  Who came in?

• 1:43:47John Coogan?

  Everybody, everybody came in.

• 1:43:51Speaker 06

  Yeah, we, we raised 400 million dollars at a 3.8 billion dollar valuation. We're super lucky to be partnered with Index, Kleiner, Parkin, Sequoia, and Dimension, who are the sort of the largest checks in, in the rounds. And, you know, it's an, it's an all star cast, some people we've known for a very long time. Nina from Index, Ilya from Kleiner, Pat Grady from Sequoia, and then Zab Many, but really the whole Dimension team, you know, that all, yeah, we're, it's rare to get this caliber of investors on a cap table, and especially rare in, in one round. So we feel, we feel incredibly fortunate.

• 1:44:29John Coogan?

  Well, congratulations and thank you so much for coming on the show.

• 1:44:32Jordi Hays?

  Yeah, great to have you on. This was fantastic.

• 1:44:33John Coogan?

  Incredible progress. We'll talk to you soon. Have a good rest of your day.

• 1:44:36Jordi Hays?

  Cheers, Jack.

• 1:44:37John Coogan?

  Goodbye. Let me tell you about the New York Stock Exchange. Want to change the world? Raise capital at the New York Stock Exchange. I think CHI Discovery might be there any day now. You're putting up multi-billion dollar rounds. Anything's possible. Our next guests are Evan Burns, the CEO and co-founder of State Affairs, and Jamie Seltzer, the co-founder of State Affairs. Very excited to be joined by both of them. How are you guys doing? We haven't seen each other in, what, a year and a half for Ereticon? I think that was the last time we hung out. How you doing? Welcome to the show. Quick introduction.

• 1:45:08Jordi Hays?

  Great. So great to see you guys.

• 1:45:10John Coogan?

  But good to see you guys.

• 1:45:13Speaker 08

  Rapid to be here, guys. Jamie, you want to go first?

• 1:45:15Speaker 09

  Yeah. Yeah, I'm one of the founders of State Affairs. I'm also a GP at Light Shed Ventures. I fashion myself as a poor man Delians or a poor man Josh Kushner, doing kind of both. But yeah, founded at State Affairs with Evan four years ago.

• 1:45:34John Coogan?

  Very cool.

• 1:45:34Jordi Hays?

  And you're an absolute dog, a very, a very humble one at that, and a dear friend. So it's great to see you here at long last. Evan, over to you.

• 1:45:45Speaker 08

  Hard to follow that entrepreneur, most recently built and sold, finished, long drink. I should have come on here when we, when we had that exit a couple of months ago.

• 1:45:51John Coogan?

  The boys were so ready to crack them open in the, in the studio today.

• 1:45:56Jordi Hays?

  They were, they were, they wanted us to be, they wanted you guys to join. And we go.

• 1:46:00John Coogan?

  Yeah, they were like, this is huge. Anyway, sorry. State Affairs.

• 1:46:04Speaker 08

  Yeah. And so also the co-founder and CEO of State Affairs.

• 1:46:07John Coogan?

  Yeah. And just to set the table on like the shape of State Affairs business, why it's unique, how like the footprint, the strategy, because it's fascinating, I think, under discussed.

• 1:46:17Jordi Hays?

  Yeah, Jamie, why don't you tell me about how you didn't even mention or tell me to invest until about a couple of years had passed and you guys were at tens of millions of revenue? No, I'm just kidding. Evan, go for it.

• 1:46:34Speaker 08

  I think Jimmy was worried about that when we were coming on here. It was like, I don't know, we might be, uh, might be asking for this. But we had to do something different than everybody else doing finance. So of course we picked this, but, um, but the, the problem that we saw and that we're focused on every day is, and it's probably true for most of your guests, these policy and regulatory markets affect so much of what companies do. But everybody just acts like they're a thing that have to happen to us. We're all reactive to them. So Jimmy and I had this idea like, what if we could build a platform? Kind of like Bloomberg, instead of focusing on financial markets, we're just focused on building a knowledge graph around the day to day movement federally in all states and eventually cities.

• 1:47:13Speaker 08

  Around these policies that change around regulations. And in the day, we think they affect most businesses more than what the financial markets do. But if you're a leader, but business, how do you pay attention to them? How do you hear what the discussions are about snap benefits access or about AI data center building or about public safety, uh, tracking? Are we going to have tracking or not? Like these things are massive. And I think most people in America have just decided, oh, they are, these things are what they are. So we said, let's try to build something around that.

• 1:47:37John Coogan?

  And so how, how much does this look like a media business? How much does this look like newsrooms across the country? Rollups? Are you hiring people? Are, are you acquiring whole businesses? Walk through how you actually get a broad footprint out there to track all those topics you mentioned.

• 1:47:55Speaker 08

  Yeah, I think, I think what we didn't realize getting into this was if you look at the legislative process of making policy, there's so many pieces to it and so much data to it. So you have all the hearings that happen in every state. You have all the bills that are introduced and every bill, if it even makes it, is going to have hundreds, if not thousands of data points that change along the way, whether it's the wording or the votes or the committees or the sponsors. And of course we have, we, we did actually build out journalists, a team of journalists. And it's very important that they're nonpartisan going and doing coverage. What's happening in the state houses also, asking questions around this policy and regulation. So it's that whole mix together. That becomes this knowledge graph that enables the users to plug in and say, okay, what's happening today with snap access benefits?

• 1:48:36Speaker 08

  What's gonna happen next, next year around GLP one access with Medicaid? Like these things are changing kind of by the day, but you might not see it in a law for another six months, a year, two years.

• 1:48:46John Coogan?

  And so for the, for the, the, the, the pre-AI, the last few years, the experience of the customer was a subscription and then sort of like a fire hose of facts that were not previously reported about things that are happening in areas that they care about or all over the nation. How is that changing in the AI era? What are customers asking for? And then what are you building?

• 1:49:11Speaker 09

  Well, the, the first thing that we're able to do is map the relationships of all of these different data sets using AI. And so sometimes something will happen in one state and it can affect, you know, states that are tangentially down. And so without basically having built out, you know, through journalism, we have on the ground people that input data that sometimes doesn't make it to the government websites, budgets, bills, hearings, fiscal notes, executive orders. We're mapping the relationships of all of these things through our models and we're finding net new insights for our customers.

• 1:49:45Jordi Hays?

  Yeah. Talk about how legislation and ideas flow between different, different, you know, state and local governments. We were covering, you know, New York's data center ban or moratorium earlier today. We were talking also about how Paramount and the Allisons are up against a number of different AGs. And so it just feels like you guys could get to a point where you can almost forecast the way that policy is kind of shifting and moving around the country.

• 1:50:17Speaker 09

  We, we do do that to a certain extent right now. I don't say we do predictive, but we do model the momentum of how bills are likely to get picked up or that the likelihood of a certain policy, um, picking up more and more steam in a particular state. So you know, we, we basically have our models have a hundred and fifty kind of unique data points that we source from on a daily basis that are kind of constantly resetting the momentum on these.

• 1:50:45Jordi Hays?

  Historically, big companies, let's say Fortune 500s, like how many, how many, how many individual, what, what would the teams look like, you know, the, the government affairs teams look like to try to get the level of coverage that you guys are now offering? I imagine they're buying data, working with maybe more local companies, but, but the, the pitch now is like, you know, one platform, access to intelligence across tons of different, you know, counties and states and, and things like that. But how, how are you pitching it?

• 1:51:18Speaker 08

  I think the main thing you have to, when we talked to all these folks and we've sat down with a ton of Fortune 100 brands and have you know, brands like Mastercard and McDonald's and Walmart that are already subscribers, but like the problem of what everybody is facing before is they've got like lobbyists or like old school data platforms that are often like much slower than real time information. So you're waiting for a firm to send you a PDF deck from like something that happened two weeks ago and you've got 50 different states. So it's three different formats. And so the ability to plug in and understand real time movement on what's happening with discussion around, you know, data center licensing or power build outs. Uh, it's very tough and it's late. So we want to switch people from being kind of late to the game to understand what's even happening to proactively involve in themselves in the democratic process.

• 1:52:02Speaker 08

  And ideally trying to get their voice heard involved before, before the bills are even introduced, let alone waiting for them to get all the way to the governor's desk, which happens a lot. We were talking to the CEO of a, a publicly traded company that I think the, uh, I think you see it's been on here. I won't say his name, but you know, their company business model was basically banned in a top 15 state, got to this, got to the governor's desk. And this CEO didn't even know about it. So it got to the governor's desk until their business model would have been banned. And then they had to pull this very painful, very painful, um, strings and favors to kind of get it fixed at the very last second. But if they'd just been involved a year before, they'd have seen it coming.

• 1:52:37Jordi Hays?

  What does your guys' team look like? I imagine it's extremely distributed.

• 1:52:44Speaker 09

  Well, we have about a hundred and eighty seven employees. It's about half editorial, half tech and sales. The editorial newsrooms are on the ground in each state. So yes, they are distributed. Like we do believe that being in the room is the difference maker on a lot of this intelligence from that, from an editorial side. And then engineering, we're in DC, San Francisco and Miami.

• 1:53:10John Coogan?

  Are you seeing, uh, acceleration or value in sort of like vibe coding integrations to government websites to scrape and organize data?

• 1:53:23Speaker 09

  Uh, I think it's very difficult to do that.

• 1:53:26John Coogan?

  Really? It's the final, that'll be AGI. We need super intelligence to get filings into a database.

• 1:53:34Speaker 09

  However, unsophisticated federal government websites are, state government websites are that much harder to navigate. I think like only two of them have APIs. Uh, just to kind of level set on what we're dealing with. And you know, a lot of this, the syntax on how they label their data is very different. And so there's like a huge cleaning process in Ohio, for example, if a bill has an amendment to it, um, sometimes it never goes onto the government website. You have to go into an office in the state, go and get it. Um, there's this example we love to give in North Carolina, that if you don't, um, watch a Senate floor committee hearing, uh,

• 1:54:14Speaker 09

  you have, the only way to go and get a recording of that is to go into the congressional library, pay a dollar and 25 cents, get it burned on to a CD-ROM and then you get custody of it. So like, yeah, it's, it's, it's, uh, pretty antiquated.

• 1:54:27Speaker 08

  Yeah. And you have confirmation every day, right? So we, we made the joke before the like, we all think about the Roman Empire a lot, of course, but you only have to label the Roman Empire once. Like it's done, it's over. And like, gotta get the information and data around what's happening in government legislation every day. Because what the process was last week has changed and whatever today, uh, happening today is the most important.

• 1:54:48John Coogan?

  What do your customers want you to do next in terms of coverage? Is there demand for international coverage or even more local, like, you know, like HOA or something? I don't know how deep you could go. Like how low, how low level can you go? And then how high?

• 1:55:03Jordi Hays?

  If the mayor in this town of 5,000 people sneezes, I want to know about it.

• 1:55:07John Coogan?

  I want to know.

• 1:55:09Speaker 08

  For the right price, we can definitely figure that out, you know? I don't know about HOA, so I don't, the sanity, sanity quotient much. But look, if you, if you look at these major, we have international customers, um, Fortune 50 brands, you name it. The thing that they're trying to figure out again is this real time movement on things that have billion dollar or tens of millions of dollars affecting their business. So for sure, like we do federal now, we do state, we'll get into city. Um, there's a huge ask for international because if you've already got your executive team and government affairs leadership on us and you've got US, why not Canada? Why not Australia? Why not UK? So the goal clearly to do this, this daily, build this kind of daily knowledge graph and platform for sort of all Western democracies. But we're definitely just starting here at the US.

• 1:55:49John Coogan?

  That's very exciting. Well, you raised some more money. Tell us about the round. How much did you raise?

• 1:55:53Speaker 08

  Seventy million.

• 1:55:57John Coogan?

  Bunch of nobodies, right?

• 1:56:00Jordi Hays?

  Who participated?

• 1:56:02Speaker 08

  How many, how many times a day do you get to do that, by the way?

• 1:56:04John Coogan?

  Uh, today's like five or six. It's great.

• 1:56:07Jordi Hays?

  Yeah.

• 1:56:08John Coogan?

  You gotta warm it up, too.

• 1:56:09Jordi Hays?

  Sometimes we'll hit it twice.

• 1:56:10John Coogan?

  Yeah.

• 1:56:10Jordi Hays?

  I'll, I'll, I'll hit it for you guys, too. Who, who participated in the round?

• 1:56:14Speaker 08

  Uh, it's been primarily Cosly and Founder's Fund, a big shot.

• 1:56:18John Coogan?

  Those guys, they needed a

• 1:56:22Jordi Hays?

  Never heard of them.

• 1:56:23John Coogan?

  Never heard of them.

• 1:56:24Jordi Hays?

  Never heard of them. Glad you guys are putting them on the map.

• 1:56:26John Coogan?

  Yeah, yeah, it's good. Thank you for what you're doing for them.

• 1:56:30Jordi Hays?

  Uh, so great to have you guys on and incredible progress. I'm, I'm glad you're talking more about what you're doing because I've been getting the updates for, for years now. And, um, yeah, I know you guys would only start talking about what you're doing. Once you were confident you were gonna eat the entire market, so.

• 1:56:46John Coogan?

  Great.

• 1:56:47Jordi Hays?

  Uh, congrats.

• 1:56:48John Coogan?

  We'll talk to you soon. Have a good rest of your day. Goodbye.

• 1:56:51Jordi Hays?

  Cheers.

• 1:56:51John Coogan?

  Let me tell you about console.com. Console builds AI agents that automate 70% of IT, HR, and finance support, giving employees instant resolution for access requests and password resets. Our next guest is Tyler Page here with us in the TVPL room live. Thank you so much for taking the time to come on down and chat with us.

• 1:57:08Speaker 10

  Of course. Thanks for having me.

• 1:57:09John Coogan?

  Welcome to the show. Uh, please, uh, why don't you kick it off with a little introduction on yourself for everyone who's watching?

• 1:57:14Speaker 10

  Sure. I mean, look, longtime listener, first time guest, so thanks for having me. Excited to be in studio for that. Um, yeah, look, I'm the founder and CEO of Cipher Digital.

• 1:57:25John Coogan?

  Yeah.

• 1:57:25Speaker 10

  Uh, we're a developer of AI data centers, a popular trend these days. Um, over the last year, we've really completely transformed our business. Once upon a time, we were a Bitcoin miner.

• 1:57:35John Coogan?

  Yeah.

• 1:57:35Speaker 10

  Uh, also a data center building business, actually a lot closer to building AI data centers than I think is in the popular imagination. Um, but we've really had just a complete transformation over the last 12 months. Uh, we've signed a series of leases with hyperscalers or with companies affiliated and backed by hyperscalers. We're currently building 700 megawatts of AI data centers at three sites in West Texas.

• 1:58:02Jordi Hays?

  There we go.

• 1:58:04Speaker 10

  Love that.

• 1:58:05John Coogan?

  It's huge.

• 1:58:06Speaker 10

  That was, uh, Bonamask. That was awesome. Um, yeah, so look, we're really busy with that. And then we have a massive development portfolio beyond that. So we've, at this point, sort of proven that, uh, we can sign these leases, we can construct these data centers, we can finance them. Also a really big part of it, uh, and then we have a really big development portfolio. So the total portfolio at Cypher is 4.2 gigawatts.

• 1:58:32John Coogan?

  Wow.

• 1:58:32Speaker 10

  Um, and

• 1:58:34Jordi Hays?

  He's going back.

• 1:58:36Jordi Hays?

  It's even louder. It's even louder in person.

• 1:58:38Speaker 10

  Yeah, that's just really awesome.

• 1:58:43Speaker 10

  Yeah. So, I mean, look, we're on the path to sort of rinse and repeat on that business. Um, demand remains really high. Uh, of course, everyone in, in non-podcast media will point out everything's a bubble or there's challenges or whatever, and, you know, we can run through those things. But, um, you know, right now, listen, the demand remains really high.

• 1:59:03John Coogan?

  Sure.

• 1:59:05Speaker 10

  I don't see any signs of that pulling back if you've got power available in the next couple of years.

• 1:59:09John Coogan?

  Yeah.

• 1:59:10Speaker 10

  Uh, and it's a really exciting business. I mean, honestly, with all the things going on in the space, Cypher lives in a little bit of, um, you know, it's got a unique structure that we're really doing co-locations. So building like a full turnkey AI data center for a multi-decade lease and handing over the keys.

• 1:59:28John Coogan?

  Sure.

• 1:59:28Speaker 10

  And on a spreadsheet, truthfully, it's, it's a pretty simple business. If you can execute in the real world, it's real estate development.

• 1:59:35John Coogan?

  It's a real estate deal.

• 1:59:36Speaker 10

  It really is. And, and there are so many interesting things going on in the space. And there's lots of people trying to be more vertical up the stack and build a software layer. And that's all super cool. And there are big prizes to win there probably. But I love our simple rinse and repeat.

• 1:59:51John Coogan?

  You're in the wormshell business.

• 1:59:52Jordi Hays?

  How are you, how are you thinking about site selection across the development portfolio and new opportunities? We had the, the New York State, uh, data center moratorium get announced this morning. I would expect other states to follow suit. Uh, you guys don't want to invest, you know, tons of time and resources into a, into a, into a state that, uh, could eventually say like, hey, you just gotta stop what you're doing.

• 2:00:18Speaker 10

  Yeah. I mean, listen, so, uh, I'm actually based, our corporate headquarters is in Midtown Manhattan. None of our data centers are anywhere in the state of New York. Um, I think that's a little bit of a, a hangover from our days, starting as a Bitcoin miner, when not only did people not want to give you the power in New York, but they also decided they didn't like Bitcoin.

• 2:00:36John Coogan?

  Oh, interesting.

• 2:00:37Speaker 10

  So, uh,

• 2:00:38Jordi Hays?

  And I think the biggest data center in New York right now is still a Bitcoin miner, or they were, and they've been pivoting.

• 2:00:47Speaker 10

  I think it's pivoting over. I think it's one of our, our good friends and rivals. But, um, you know, look, I, I think there are gonna be layers of challenges from the federal level to the state level to the local level, a- anywhere in the country. Um, of our 10 sites, nine are in Texas and one is in Ohio. Texas is generally known as a very kind of low regulation, business-friendly state, um, very entrepreneur-friendly. That said, the exact same concerns about data centers exist there. And we spend a lot of our time, uh, trying to, to be good neighbors and good partners and deliver the message of how it's gonna be a wonderful addition to the community when we come join.

• 2:01:30Speaker 10

  But quite understandably, people show up and mean it is outside of the universe of the savvy listeners to your podcast.

• 2:01:36John Coogan?

  Yeah.

• 2:01:37Speaker 10

  There's a lot of like naked dislike of data centers.

• 2:01:41John Coogan?

  Yeah, you see it in the polling data, too.

• 2:01:42Speaker 10

  But, you know, it's interesting, even as recently as yesterday, we had folks down at a local hearing. And, um, I, I completely understand why people show up and they're not happy. Cause they're like, I've heard this stuff's terrible.

• 2:01:53John Coogan?

  Totally.

• 2:01:54Speaker 10

  And it's gonna end the world.

• 2:01:55John Coogan?

  Yeah.

• 2:01:56Speaker 10

  And, you know, um, you know, it's gonna end things that are creative and everything's gonna be an automated chatbot. And like, I don't like anything about that. Um, and then you get all the way to the spectrum of frankly, just people don't know what happens in the building. So you get questions like, is this gonna harm my cows that are next door? Or like, is my, I mean, someone asked, like, is my pacemaker gonna have a problem because of the building? And it's, it's not for the record. Um, but you know,

• 2:02:22Jordi Hays?

  Well, yeah, there's no, there's no upside, no, no immediate upside to them often. And then there's potential downside, like noise and energy prices and things like that. Uh, what have you thought about certain proposals or ideas around doing direct payments to people, you know, in towns or counties that are gonna have a data center developed? And they're thinking, well, I don't, what's a benefit to me other than some construction jobs and a handful of jobs and local tax revenue, but it's not as like direct as like, you know, cash coming into your account?

• 2:02:56Speaker 10

  So that, that may be where it goes, Jordy. I mean, I, I think there's, this needs to be answered on a couple of levels. There's like a really, really high up public policy question about, do we have the right tax regimes and ownership regimes? And large language models and government ownership and things like that. And that's what I mean. Like it goes through all the layers down to the state. I think what I'd start with is just number one, back to the big point about this scary new neighbor you might have. I mean, I try to focus very much on starting with what happens in these buildings. And, you know, I'd say, look, we're, we're a pretty entrepreneurial driven culture at Cypher. But some people, especially a lot of younger people, a little bit more mission driven. And I point out, like, you guys are racing on this construction project.

• 2:03:41Speaker 10

  And that literally might be the building that has the breakthrough in research to cure cancer or dementia or something like that. Or we've got, you know, uh, one in every five employees at our firm is a veteran. And I point out, like, we may have work that goes on in there that saves our soldiers' lives. So part of it is like, just starting there. To get to your actual question, though, about like money sharing, I'd point out, um, there's already a fair amount of framework in place that envisions this. Not exactly the giant AI build out that's happening, but like, for example, in Texas, we will pay tens of millions of dollars a year to the Texas public school system.

• 2:04:17John Coogan?

  Yeah.

• 2:04:17Speaker 10

  We are the largest taxpayer in the counties typically of our data centers. Um, and then we try to go above and beyond that to do a fair amount of community outreach. So, uh, in one of our locations, we're refurbishing the small hospital there. We're buying them a new fire truck. Uh, we're rebuilding the playgrounds and the pools, little things like that and having job

• 2:04:35John Coogan?

  I study Virginia as an example of, of a state that benefited from tax revenue as the AWS campus built out there. And a lot of local, uh, people that live there have lived through the data center boom and seen, you know, lower taxes on their balance sheets because of that.

• 2:04:51Speaker 10

  Yeah. I mean, listen, affordability is a really big political topic right now. And so people say, well, wow, my electricity bill's a lot higher.

• 2:04:57John Coogan?

  Yeah.

• 2:04:58Speaker 10

  Must be the data centers.

• 2:04:59John Coogan?

  Sure.

• 2:05:00Speaker 10

  And it's sort of like, well, we printed an awful lot of dollars starting five years ago. And we've had a couple of wars and there's a lot of inflation. And so it's not really the data center. But I mean, I think, look, we try to be very front footed on that. We do not want to raise local rate payers bills. By the way, all the regulators in Texas feel the same way. So like that problem will get addressed.

• 2:05:22John Coogan?

  Yeah.

• 2:05:22Speaker 10

  I really think it's the big picture thing of like, this is something you should want in your community.

• 2:05:27John Coogan?

  Sure.

• 2:05:27Speaker 10

  Um, you know, it's a big warehouse that's air conditioned and full of computers.

• 2:05:31John Coogan?

  Yeah.

• 2:05:31Speaker 10

  It's not, you know what I mean? And where we're building them, and it's really, it's interesting. It's, we've gotten to be a bit of a disruptor to the traditional data centers like in Northern Virginia.

• 2:05:41John Coogan?

  Sure.

• 2:05:41Speaker 10

  When we started our pivot, we almost had an unfair advantage from being a Bitcoin miner. Because when you're a Bitcoin miner, the business doesn't work on the spreadsheet unless your power costs are really low.

• 2:05:53John Coogan?

  Yeah.

• 2:05:53Speaker 10

  And where are they really low? In really remote places with a lot of generation.

• 2:05:57John Coogan?

  Yep.

• 2:05:58Speaker 10

  And typically not a lot of demand, like not a lot of houses. So if you look at just the map of Texas, most of the people live in the east. There is a ton of generation in the west. You can't ship the electricity that far. And so it's really cheap historically in West Texas.

• 2:06:10John Coogan?

  Yeah.

• 2:06:11Speaker 10

  When we started having this idea of like, wow, look how fast, you know, chat GPT is taking off. And look at all the implications for how many megawatts you're gonna need at a data center. We, we said, well, surely they're gonna have to draw the conclusion that everyone's gonna have to move to places like West Texas. And the entire incumbent data center industry was like, No hyperscaler will ever sign a lease at those locations. This is as recent as like a year and a half, year ago. And the floodgates.

• 2:06:41Jordi Hays?

  Just because it was a hassle and they'd want to just co, you know, locate around there.

• 2:06:46Speaker 10

  I think they were just using pattern recognition where they're like, I've been in this business 20 years and no one's ever signed a lease out there. And I think, and then there was a second question about like, well, is latency really bad out to West Texas? Cause it's a long way away from the city, but the truth is there's a big fiber line running out there and it's fast enough. Um, you might not do traditional cloud work out there, but even Northern Virginia exists because everyone went there 20 years ago and then built out all that infrastructure.

• 2:07:13Jordi Hays?

  Yeah.

• 2:07:14Speaker 10

  I can tell you because we're the tip of the spear, like all these guys are coming to West Texas. Our portfolio alone is almost as big as all of Northern Virginia. So, uh, I mean, I, I just, I think this is kind of the next thing that's going to happen when people, the, the sort of next skeptical thing about locations like ours is, well, we're at this really funny time where there's no power available. And so there's a ton of demand. And so people will go to these places, but that's going to be like a dinosaur relic at the end of this lease in 15 years.

• 2:07:48Speaker 10

  And we, we, we are 180 degrees opposite of that. I actually think the cap rates will be lower. That will be a more valuable like terminal value for a data center at the end of a lease in West Texas because of what's, of what West Texas will become. I think over the next decade or two.

• 2:08:04John Coogan?

  It feels like when, uh, new data centers come to town, there's like a suite of questions that local residents have. Uh, everything from aesthetics, uh, to power rates, to water usage, to sound, to air quality. What of those five have, you know, solid regulatory frameworks in place where you can go and say, okay, we did the EPA test and we passed, and so we're good. And which ones are more subjective?

• 2:08:35Speaker 10

  So it, it really depends, which is an unsatisfactory answer.

• 2:08:39John Coogan?

  But yeah.

• 2:08:40Speaker 10

  I think we always start on the power side.

• 2:08:41John Coogan?

  Okay.

• 2:08:43Speaker 10

  And so if you look at, at ERCOT and the way they interconnect large sites, that's generally a low regulation zip code, um, state. Uh, and so what I'd say is you need to address all those issues. There are some local permitting requirements around them, but I'd say it's more about the, like, what issues could be raised? There's no real framework of, we'll just hold up the, uh, the noise permit.

• 2:09:11John Coogan?

  Sure.

• 2:09:11Speaker 10

  Because there's a lot of oil and gas and like industrial things and places we're building, but I would say probably in our experience, the, of course people care a lot about affordability. So we need to discuss that. But I think water at our locations tends to be, um,

• 2:09:27John Coogan?

  Bigger question.

• 2:09:28Speaker 10

  The biggest issue.

• 2:09:29John Coogan?

  Sure.

• 2:09:30Speaker 10

  You know, they, they say, uh, I think whiskey is for drinking and water's for fighting in some of the places, uh, out there. Uh, just it's, it's dry, but what's interesting is, and I know you guys have talked data centers a lot on here before, but you know, with modern closed loop systems.

• 2:09:44John Coogan?

  Yeah, it's much less.

• 2:09:45Speaker 10

  Really don't use that much water. And I think the other thing is you can innovate. So there's actually a lot of like brackish, non potable water underneath the dirt in Texas.

• 2:09:57John Coogan?

  That can work.

• 2:09:57Speaker 10

  And so you can build facilities to filter it.

• 2:10:00John Coogan?

  Sure.

• 2:10:00Speaker 10

  And use it and actually help the aquifer. So, you know, I, I generally think all these kind of growth issues are challenges, but they're all solvable.

• 2:10:12John Coogan?

  Yeah. It feels like a meat in the middle here is instead of jumping straight to like data center ban, you're focused more on what is the decibel level that is acceptable in this city for any building?

• 2:10:23Speaker 10

  Right.

• 2:10:24John Coogan?

  What is the power consumption for any building? What, what, what is the impact on the water supply for any building? And then that framework. So then if somebody shows up and they're just like, yeah, I have a house where I'm going to be blaring music. It's like, yeah, that can't happen in this neighborhood either, because we've just determined this and, and then that's applied broadly as opposed to just narrowly targeting that.

• 2:10:42Speaker 10

  Well, what I'd also point out is like, all of those same objections could be raised about almost any industrial build.

• 2:10:50John Coogan?

  Yeah, for sure.

• 2:10:50Speaker 10

  So of course, I mean, if you go to the places where we build our data centers, we own hundreds of acres and in some places you can see to the horizon in all directions.

• 2:10:57John Coogan?

  Sure.

• 2:10:58Speaker 10

  So I'm really not too worried about, you know, we'll be cognizant of measuring the decibel level at the edge of our property, but like, I'm not worried about anyone hearing it.

• 2:11:08John Coogan?

  Sure.

• 2:11:09Speaker 10

  Uh, you know, I think it's, it's going to vary by jurisdiction. If you try to plop one down in a, in a neighborhood or something, that's not what we're trying to do.

• 2:11:16John Coogan?

  It seems like a lot of them have sort of like grown over time where there was, it was, it made a lot of sense to co-locate some data center for delivering Netflix to a local neighborhood. And then the, the, the place just got upgraded and upgraded and upgraded until it's like running diesel generators 24/7 and then people are annoyed.

• 2:11:32Speaker 10

  Yeah. I mean, and I understand.

• 2:11:34John Coogan?

  Creep up on you is, is more of a problem than like the new project coming in with a dedicated.

• 2:11:39Speaker 10

  I think this is like any industrial build though, where you've just got a balance, you've got to strike the right balance. It gets back to what you said, like maybe the end policy solution is a, a different way of taxing, regulating, sharing the, the income, whatever. And we will certainly be.

• 2:11:56Jordi Hays?

  Yeah. It's not necessarily, it's not even necessarily like more dollars that are being shared, but it's like how you share the dollars. Because again, like money going to someone's, you know, city feels a lot different than money going directly into someone's pocket, right?

• 2:12:13Speaker 10

  Correct.

• 2:12:13Jordi Hays?

  That they can use to pay their bills. So.

• 2:12:15John Coogan?

  Walk me through your capital market strategy when you're working on a new site, new project. Uh, what does your roadshow look like? We're familiar with like a series A pitch, series B pitch, even an IPO occasionally, but you're talking to private credit? Are you talking to real estate investors, banks, debts? Walk me through the whole picture of like who you're calling, who, who you're pitching, who's around the table, just in broad strokes.

• 2:12:39Speaker 10

  Sure. So, I mean, high level, we're, the sites we're developing, and, and again, this is some of the most lucrative real estate development in the history of real estate development. We have purchased these sites typically really cheap.

• 2:12:51John Coogan?

  Yeah.

• 2:12:52Speaker 10

  Like couple million bucks.

• 2:12:54John Coogan?

  For a hundred acres?

• 2:12:55Speaker 10

  For the, the land is almost secondary. It's getting the interconnect for power. So

• 2:13:00John Coogan?

  Okay.

• 2:13:00Speaker 10

  The price has gone up like per megawatt, but for example, we're building a 300 megawatt site right now for a, um, for, uh, AWS.

• 2:13:09John Coogan?

  Yep.

• 2:13:09Speaker 10

  Uh, and we paid like $7 million for the site, three or four years ago.

• 2:13:14John Coogan?

  Wow.

• 2:13:14Speaker 10

  I mean, it's been a while. Today that would be hundreds of millions of dollars to sell it. And we own lots of acreage around that. Um, so, uh, the, back to your question about the model. So typically we will try to find a good deal, harder to find these days, but we have a pretty big portfolio. Like I mentioned, it's closing in on the size of Northern Virginia. So it's pretty big to still be developed. Next phase is we want to shorten the development timeline as much as we can, and that typically will be an early equity investment. So the longest lead time item to build one of these things typically is the, um, the like high voltage to mid voltage conversion infrastructure, the substation.

• 2:13:51John Coogan?

  Okay.

• 2:13:51Speaker 10

  Okay. And that might be like 18 months to get one and call it a hundred thousand dollars a megawatt. So 300 megawatts, 30 million bucks.

• 2:14:01John Coogan?

  Okay.

• 2:14:01Speaker 10

  We'll, we'll get that done and we'll do some early civil work to get the site, like the timeline to build shortened.

• 2:14:07John Coogan?

  Okay.

• 2:14:08Speaker 10

  That's currently at least, you know, who knows if we evolve over time, but currently at least that's where we stop generally our equity investment until we find a tenant that's interested. That's very hard. It takes forever. You negotiate for months and months, hundreds of pages of documents. But if you get, let's say a hyperscaler long-term lease, at that point they will be very opinionated about the particulars that they want for that site.

• 2:14:35John Coogan?

  Sure.

• 2:14:35Speaker 10

  That's a very iterative process with our engineering team. You figure out exactly this is the style they want. It takes all these boxes. At that point, if we have a signed lease, we will try to debt finance as much as possible.

• 2:14:48Jordi Hays?

  You know, are you buying the actual GPUs or is the hyperscaler?

• 2:14:52John Coogan?

  Warm shell.

• 2:14:53Speaker 10

  To this point, that business has been less interesting to us. Not that it's not very interesting, but the

• 2:14:59Jordi Hays?

  Yeah. It's like you don't want to.

• 2:15:01Speaker 10

  The piece we see the best, certainly risk adjusted return, and for the last year or two, frankly, just the best absolute return, uh, is building everything down to the GPU.

• 2:15:12Jordi Hays?

  Yeah.

• 2:15:12Speaker 10

  Basically.

• 2:15:13John Coogan?

  So wait, wait, wait. So yeah, walk me through exactly how far you're taking it. So the building goes up.

• 2:15:18Speaker 10

  Yep.

• 2:15:18John Coogan?

  The polished floors are in.

• 2:15:20Speaker 10

  Yep.

• 2:15:20John Coogan?

  Air conditioning?

• 2:15:21Speaker 10

  Yeah, we're bringing cooling everything down to the rack.

• 2:15:24John Coogan?

  Rack. Okay.

• 2:15:25Speaker 10

  They're going to pretty much wheel in the racks.

• 2:15:27John Coogan?

  Got it. Okay.

• 2:15:28Speaker 10

  Yeah. Connect various connections. Uh, and then.

• 2:15:31John Coogan?

  But water lines.

• 2:15:32Speaker 10

  Yep.

• 2:15:33John Coogan?

  Power lines.

• 2:15:33Speaker 10

  All of that. Chillers, everything.

• 2:15:35John Coogan?

  Down to the rack.

• 2:15:36Speaker 10

  Yeah. It's a very like everything ready to go. And the reason why, by the way, on a long-term lease, right? Figure they're going to recycle those racks.

• 2:15:44John Coogan?

  Yeah.

• 2:15:44Speaker 10

  Probably twice.

• 2:15:45John Coogan?

  Sure.

• 2:15:45Jordi Hays?

  Yeah.

• 2:15:46Speaker 10

  So like a lot of the modern design and iteration is how do we build this site? To make it as easy as possible to not be outdated when we want to change the racks. And the racks are going to be, we'd like, there's going to be way more rack density. I don't know. They might replace them in five, six years with one megawatt racks. You know, you might be at 120 kilowatts or something now, and it's going to be way more dense. And so, you know, high level, you, you have to bring basically, you know, electricity and water and air into the building.

• 2:16:16John Coogan?

  Yep.

• 2:16:17Speaker 10

  You have a very big, open building, um, kind of like a lot of these types.

• 2:16:21Jordi Hays?

  Like an altar down.

• 2:16:22Speaker 10

  Yeah.

• 2:16:22John Coogan?

  Fantastic.

• 2:16:24Speaker 10

  And then the ability to dial down those, um, various valves and so forth, as you get towards the rack.

• 2:16:29John Coogan?

  Yeah.

• 2:16:30Speaker 10

  And probably the floor space shrinks. Over time and you have cool ping pong, you open the podcast studio in the other end of at the other end of the data center in a few years.

• 2:16:39John Coogan?

  So

• 2:16:39Speaker 10

  Just because I didn't finish it like, so then we'll go debt finance it. We have gone to the the high yield markets.

• 2:16:45John Coogan?

  Yep.

• 2:16:46Speaker 10

  We've raised a couple billion dollars at about 6% and change. So amazing.

• 2:16:51John Coogan?

  That's

• 2:16:51Speaker 10

  At a really high LTC. So

• 2:16:54John Coogan?

  Yeah.

• 2:16:54Speaker 10

  Um, yeah, the market's wide open.

• 2:16:55John Coogan?

  That's great. Does your team look like a private equity fund with a bunch of people sitting at desks in front of spreadsheets and then you've called people to actually go and build the building and they're off your staff and you're hiring construction firms? Or do you have sort of, you know, guys who can work a shovel?

• 2:17:16Speaker 10

  I think it's a really weird company. Like I tell people, so I started the company in my attic during COVID. So we've had to hire like every person knew how to do something better than me at some point, and then that's cascaded down.

• 2:17:28John Coogan?

  Yeah.

• 2:17:29Speaker 10

  We only have about 100 employees at this point. It's a very unique firm in that it's, it's a little bit like a Venn diagram of yes, a finance sort of structuring spreadsheet person.

• 2:17:43John Coogan?

  Project management.

• 2:17:43Speaker 10

  Yeah.

• 2:17:44John Coogan?

  That type of stuff.

• 2:17:45Speaker 10

  Let's call it a technology firm to figure out a lot of what needs to be done, like networking and stuff like that. It's not exactly the industrial side of construction.

• 2:17:54John Coogan?

  Yeah.

• 2:17:55Speaker 10

  And then the last part really, and like the most populated part is the more industrial.

• 2:17:59John Coogan?

  Okay.

• 2:18:00Speaker 10

  We do in-house project management and most of the procurement activities. We externalize the like trade work.

• 2:18:08John Coogan?

  Sure.

• 2:18:08Speaker 10

  So if there's

• 2:18:09John Coogan?

  You might pick the transformer to buy, schedule it for shipment, but you're calling a trucking company to bring it out. You're calling other people to unpack it off the truck, plant it, bolt it to the ground, do whatever else they need to do.

• 2:18:20Speaker 10

  We have an external EPC that really brings all those trades to the sites.

• 2:18:24John Coogan?

  Got it.

• 2:18:24Speaker 10

  We have 1800.

• 2:18:25John Coogan?

  What does APC stand for?

• 2:18:26Speaker 10

  EPC.

• 2:18:27John Coogan?

  Oh, EPC?

• 2:18:27Speaker 10

  Yeah, sorry. Engineering procurement construction.

• 2:18:29John Coogan?

  Got it.

• 2:18:29Speaker 10

  Right. So, sorry, jargony on you. Yeah. So, so

• 2:18:36Speaker 10

  if there's 1800 people on the site, maybe five of them are Cypher employees.

• 2:18:39John Coogan?

  Yeah.

• 2:18:40Speaker 10

  The others are like the staffed up folks from the outsourced provider of a lot of that trade work.

• 2:18:47John Coogan?

  Do you like railroad analogies?

• 2:18:49Speaker 10

  I love, I love, actually, it's the best analogy.

• 2:18:52John Coogan?

  More than oil?

• 2:18:53Speaker 10

  Yes. And I'll tell you why. Because it's this, the build out of this industry is so tied to capital markets. It's one of the reasons why we have such a New York nexus.

• 2:19:02John Coogan?

  Sure.

• 2:19:03Speaker 10

  Like honestly, even in Bitcoin mining, that was a big part. We went public as a way to raise a bunch of money in a business that's hard to like get the capex for. All the hyperscalers are now doing the like varsity version of that with big debt offerings and so forth. But I like the railroad analogy because the modern capital markets were kind of created because of the railroads. Like there wasn't enough bank lending in the world.

• 2:19:27John Coogan?

  Yeah.

• 2:19:28Speaker 10

  To get them built. So the idea of like buying equity shares in a project

• 2:19:32John Coogan?

  Yeah.

• 2:19:33Speaker 10

  is kind of the railroads. So that's why I like that one. None of them are exactly perfect, but

• 2:19:37John Coogan?

  No.

• 2:19:38Speaker 10

  That's closer than any of the other ones I could think of.

• 2:19:41John Coogan?

  Yeah. Jordy, do you have something else? Sorry.

• 2:19:44Jordi Hays?

  We like the railroad analogy minus the, you know, massive bust.

• 2:19:50Speaker 10

  So true.

• 2:19:51John Coogan?

  I actually haven't studied the railroad boom and bust as much.

• 2:19:54Jordi Hays?

  We should, we should study.

• 2:19:56John Coogan?

  I mean, it was a very long, long period of history.

• 2:19:58Jordi Hays?

  Yeah.

• 2:19:59John Coogan?

  Fascinating. Well, thank you so much for coming.

• 2:20:01Jordi Hays?

  Yeah, great to have you here in person.

• 2:20:02John Coogan?

  Really, really interesting.

• 2:20:03Speaker 10

  Great to see you.

• 2:20:03Jordi Hays?

  I'll see you again soon.

• 2:20:04John Coogan?

  Going a level deeper like this. This is fascinating. Uh, yeah. Please send anyone to us. Send anyone on your team our way when you have news and congratulations on everything that's going on in this business.

• 2:20:13Speaker 10

  Thank you so much.

• 2:20:13Jordi Hays?

  Fantastic to be here. Great to have you on.

• 2:20:15John Coogan?

  Have a great day.

• 2:20:16Speaker 10

  Congrats on the podcast.

• 2:20:17John Coogan?

  Thank you.

• 2:20:17Jordi Hays?

  Much. Hang out for a quick bit. We're gonna close out.

• 2:20:21Speaker 10

  Let me.

• 2:20:24Jordi Hays?

  On, before we jump, I gotta talk about my dear friend Brandon Jacoby, who I saw in the chat earlier, launched his new studio, a multi-disciplinary design practice for those who challenge the boundaries of technology. He combined a Star Wars intro style

• 2:20:46John Coogan?

  Oh, scroll.

• 2:20:47Jordi Hays?

  With a barrel, a wave.

• 2:20:50John Coogan?

  A barrel. Oh, cool. Okay, I'm visualizing that.

• 2:20:54Jordi Hays?

  Kind of, I think he made this for us.

• 2:20:56John Coogan?

  Okay.

• 2:20:56Jordi Hays?

  You.

• 2:20:57John Coogan?

  Do you want to pull it up?

• 2:20:58Jordi Hays?

  Uh, there we go. There we go. Look at this.

• 2:21:02John Coogan?

  Big motion design. Oh, interesting. Yeah, this is both of us.

• 2:21:06Jordi Hays?

  Our intro.

• 2:21:06John Coogan?

  Yeah, this is perfect.

• 2:21:08Jordi Hays?

  He made the launch video for an audience of two.

• 2:21:10John Coogan?

  For some reason I was, I was imagining the, the text curling up like a wave and it being sort of hard to read, but this is much better. I love it. It's a good statement.

• 2:21:19Jordi Hays?

  Brandon and I.

• 2:21:19John Coogan?

  This is a mission statement. This is an essay.

• 2:21:22Jordi Hays?

  Worked together for, for a few years.

• 2:21:25John Coogan?

  Yeah.

• 2:21:25Jordi Hays?

  And he's been doing this.

• 2:21:27John Coogan?

  He was one of the first personnel news we did on the show. We, we tracked his move to X, the everything.

• 2:21:33Jordi Hays?

  But anyways, he's been doing this kind of work forever. He was a design lead at, at X as well as Cash App, as well as my last company. And he's incredibly talented. So he's open, open for business.

• 2:21:45John Coogan?

  Fantastic.

• 2:21:47Jordi Hays?

  That's our show, folks.

• 2:21:48John Coogan?

  Let me tell you about Public. Investing for those to take it seriously. They got stocks, options, bond, crypto, treasuries and more with great customer service. And that is our show. We'll see you tomorrow at 11 AM sharp. Leave us five stars on Apple Podcasts and Spotify. Sign up for our newsletter, tbpn.com and we will see you tomorrow. Goodbye.