Tesla Robotaxis, Saudi Arabia, AI in Big Tech, Art Market Update + Guests

TBPN.com is made possible by: Ramp - https://ramp.com Figma - https://figma.com Vanta - https://vanta.com Linear - https://linear.app Figma - https://www.figma.com Eight Sleep - https://eightsleep.com/tbpn Wander - https://wander.com/tbpn Public - https://public.com AdQuick - https://adquick.com Bezel - https://getbezel.com Numeral - https://www.numeralhq.com Polymarket - https://polymarket.com Follow TBPN: https://TBPN.com https://x.com/tbpn https://open.spotify.com/show/2L6WMqY3GUPCGBD0dX6p00?si=674252d53acf4231 https://podcasts.apple.com/us/podcast/technology-brothers/id1772360235 https://youtube.com/@technologybrotherspod?si=lpk53xTE9WBEcIjV (02:39) - Tech Takes Over Saudi Arabia (22:35) - Tesla's Robotaxi Timelines (40:38) - Big Tech's AI Midlife Crisis (45:23) - Dylan Abruscato. Dylan is the creator of Crypto: The Game, an on-chain survival game that blends gameplay with crypto-native mechanics. He’s known for pushing the boundaries of interactive web3 experiences. (59:34) - Jared Madfes. Jared is an investor and writer who has become an online correspondent on Saudi Arabia’s growing influence in tech and finance. His commentary blends humor, geopolitics, and startup insight. (01:14:04) - Sam D'Amico. Sam is the founder and CEO of Impulse Labs, a company developing battery-integrated induction stoves that combine high performance with grid energy storage. With a background in hardware engineering at companies like Google and Oculus, Sam is leveraging his expertise to revolutionize home appliances and drive electrification. (01:32:33) - Vincent Weisser. Vincent is the co-founder of Prime Intellect, a decentralized AI platform that aggregates global compute to collaboratively train and co-own advanced models. He helped lead the development of INTELLECT-2, a 32-billion-parameter reasoning model trained through globally distributed reinforcement learning. (01:47:30) - Maneet Khaira. Maneet is the founder and CEO of Backbone, a company specializing in mobile gaming hardware and software. Backbone is best known for its Backbone One controller, which transforms smartphones into portable gaming consoles, and its companion app that integrates with services like Xbox Cloud Gaming and PlayStation Remote Play. (01:59:48) - Aaron Ginn. Aaron is the co-founder and CEO of Hydra Host, a platform providing decentralized, bare-metal GPU infrastructure for AI and high-performance computing workloads. (02:36:06) - Dan Gray. Dan is the Head of Insights at Equidam, a platform specializing in startup valuation. He is also a frequent contributor to Crunchbase News, where he shares his expertise on startup valuation and fundraising trends.

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

• 0:01Jordi Hays?

  You're watching TVVN. Today is Tuesday, May 13, 2025. We are live from the Temple of Technology, the Fortress of Finance, the Capital of Capital. Uh, we are wearing Pit Vipers today.

• 0:13John Coogan?

  Amazing shades.

• 0:14Jordi Hays?

  Chris, the founder and CEO of Pit Vipers, uh, set these to us.

• 0:19John Coogan?

  These look perfectly on-brand for us.

• 0:21Jordi Hays?

  Yes, they look very on-brand.

• 0:23John Coogan?

  They're fantastic.

• 0:23Jordi Hays?

  And I'm gonna take them off because I can't see very well.

• 0:25John Coogan?

  Yeah, it is a little unprofessional.

• 0:27Jordi Hays?

  But thank you to Chris for sending them over.

• 0:29John Coogan?

  On the set. Anyway, um, we got a great show for you guys today. Folks, we're talking Saudi Arabia. Technology has taken over Saudi Arabia. All of our hardest hitters, all of the absolute dogs of Silicon Valley have crossed the Atlantic Ocean and are hanging out. To the Middle East.

• 0:49Jordi Hays?

  Yes, to Riyadh.

• 0:50John Coogan?

  To Riyadh. Uh, so we'll cover that, talk about what's happening, why folks are there. Alex Wang's there. I saw Alex Karp there, bunch of Alex's in tech there, out in Saudi Arabia. Uh, Johnson Wong and Nvidia's announcing stuff. Uh, different trade deals going down, bunch of interesting things happening. Then we're gonna talk about Tesla's robotaxi timelines. Um, what's going on with their robotaxi launch? They, it seems like they've had some setback, setback. There's an article in the, in the information that seems to make it all doom and gloom, but I didn't like one of the quotes that I saw in there, so I want to talk about it.

• 1:22Jordi Hays?

  Truth Zone.

• 1:23John Coogan?

  Truth Zone. Um, and there's also some stories about just how big tech is grappling with artificial intelligence generally. There, we've been talking about this a lot, the innovator's dilemma, the problems of trying to build a product when you're a massive tech company. Even though you have all the resources possible, you're still struggling to get something to work.

• 1:40Jordi Hays?

  This is why Zuck started doing jiu-jitsu at some point last year.

• 1:43John Coogan?

  Yeah.

• 1:44Jordi Hays?

  So you could really.

• 1:46John Coogan?

  They're one of the companies that's doing okay, but you know, the rest are struggling, I think. Uh, but we'll dig into it. Uh, the art market, we say it's absolutely ripping. There was a big sale. It wasn't quite where people want it, but we'll break it down for you because we know that you need an update on what's happening in the art market. And then we are going to hopefully talk to somebody who's out in Saudi Arabia. It's going to be like midnight or 10 p.m. their time, but hopefully we'll be able to get on a call with somebody in Saudi Arabia, breaking down what's exactly happening with all the technology folks who are out there in Saudi Arabia. And then we got a great lineup of founders and investors and analysts to take us through the stories of the day. So let's kick it off. First one, Trump has lifted sanctions on Syria and touts deals in his Middle East

• 2:31John Coogan?

  tour. This is from Riyadh. President Trump has decided to lift sanctions on Syria, giving the country a financial lifeline after a lightning campaign overthrew its decades-long dictator last, late last year. I will be ordering the cessation of sanctions against Syria, Trump said during a foreign policy address in Riyadh. His first stop on a four-day swing through the Gulf. I wonder where else he's going. We'll have to figure that out. Track him. Cut her. Right? Probably. I'd be surprised.

• 2:58Jordi Hays?

  I'm assuming they want to give him the jet. Yeah, he's got to go.

• 3:01John Coogan?

  They can't just fly to him. These things don't fly themselves.

• 3:03Jordi Hays?

  Yeah. And even though it's a gift, it's such a meaningful gift. It's such, you know, he wants to make sure, he wants to, you know, he's not going to take the gift sight unseen.

• 3:11John Coogan?

  Trump is going to break the bottle of champagne over that new plane.

• 3:14Jordi Hays?

  Yes.

• 3:14John Coogan?

  That's, he's not going to let, he's not going to delegate that. No way. No way.

• 3:18Jordi Hays?

  There are things you delegate and there are things you do not delegate.

• 3:20John Coogan?

  Yes. He's in founder mode on that one. He's not in manager mode.

• 3:22Jordi Hays?

  That's right.

• 3:24John Coogan?

  Now it's time, now it's their time to shine. We're all, we're taking them all off. The announcement sets the table for Trump to speak with the new Syrian president Ahmed Al-Shara on Wednesday in the Saudi capital, which the White House has billed as a quick meet and greet. The, like the structuring of these deals, like, oh, I asked him to call me and I, he didn't call me. It's not a meeting.

• 3:46Jordi Hays?

  We requested that you request a meeting with us.

• 3:48John Coogan?

  Exactly. Yeah, that's the, that's the key too. Maybe, maybe we should port some of that back to venture capital. If you're pitching a VC, request that they request a meeting with you. If you're a founder, you're going out raising your Series B. Hey, Andreessen, I would request that you request a meeting with me.

• 4:04Jordi Hays?

  I would request that you reach out to me cold.

• 4:07John Coogan?

  Yeah, exactly.

• 4:08Jordi Hays?

  With a preemptive term sheet.

• 4:11Jordi Hays?

  I would request that you preempt my round.

• 4:13John Coogan?

  Yes.

• 4:17Jordi Hays?

  I always think it's good that the way that founders will message rounds.

• 4:24John Coogan?

  Yeah.

• 4:24Jordi Hays?

  It's like they'll be raising for two months and then they'll be like, yeah, we were preempted.

• 4:28John Coogan?

  Exactly, exactly. Yes.

• 4:29Jordi Hays?

  Buddy, you've been raising for

• 4:31John Coogan?

  For months.

• 4:32Jordi Hays?

  For weeks now. Like you've been taking meetings with investors, getting a

• 4:38John Coogan?

  The preempting branding, I mean, I know a friend of ours who said that to me at one point.

• 4:42Jordi Hays?

  Also preempting on a pre-seed is hilarious too.

• 4:46John Coogan?

  It's like, what are you preempting?

• 4:47Jordi Hays?

  You were gonna bootstrap?

• 4:48John Coogan?

  Oh yeah, we definitely weren't ready for pre-seed.

• 4:50Jordi Hays?

  Yeah.

• 4:51John Coogan?

  Definitely weren't ready for pre-seed.

• 4:52Jordi Hays?

  We weren't ready.

• 4:53John Coogan?

  Yeah, you're just totally jumping ahead on the valuation.

• 4:55Jordi Hays?

  Yeah, we were really going for more of a friends and family, but you know, once somebody, you know, once his pre-seed fund

• 5:00John Coogan?

  Yeah, yeah.

• 5:00Jordi Hays?

  Offered a hundred K, well.

• 5:02John Coogan?

  Yeah.

• 5:02Jordi Hays?

  We felt, yeah, maybe we're okay with getting preempted.

• 5:05John Coogan?

  Yep. You know, it's become such a meme to use the preempting thing. I feel like the next stage is putting in the press release. I mean, like we announced, instead of, you know, we announced a seed, seed plus, A, B, all of these rounds have kind of shifted around. So an A is now the size of a B or whatever. You should just announce, hey, we're announcing a preempted series A. And just put that on the news wire.

• 5:27Jordi Hays?

  Yeah. Or companies should just announce that they're in advanced talks. Like just say like, yeah, we're

• 5:34John Coogan?

  Call the press.

• 5:34Jordi Hays?

  I mean, that's basically, that's basically what company, it seems like if, if sometimes a fundraiser will leak and it's like, okay, this company is in advanced talks. Other times you can tell it's the company itself.

• 5:47John Coogan?

  Yeah.

• 5:48Jordi Hays?

  Just like going to the press and being like, we are in advanced talks.

• 5:51John Coogan?

  I love this, I love this segment because we were like, let's talk about what Trump's doing in the Middle East.

• 5:57Jordi Hays?

  Let's bring it back to early stage technology investing. Because that is

• 6:02John Coogan?

  I really don't care that much about this story.

• 6:04Jordi Hays?

  I really don't. I'll dive in a little bit. So.

• 6:07John Coogan?

  There's some interesting stuff here.

• 6:08Jordi Hays?

  Trump's remarks capped an eventful first day of his Middle East visit.

• 6:12John Coogan?

  Yeah, this is a big deal.

• 6:13Jordi Hays?

  He signed 300 billion investment deals. Let's see here.

• 6:17John Coogan?

  We love 300 billion.

• 6:19Jordi Hays?

  With Saudi Arabia with an eye toward doubling the total within four years. I believe that the White House was highlighting $600 billion. So.

• 6:27John Coogan?

  Where does that even go? Is that us investing in them, them investing in us? Both ways? One hand washes the other, I assume.

• 6:33Jordi Hays?

  Who knows? Why don't you figure that out? I mean, I think it's primarily in the US. That's what Trump cares about. He heaps praise on the kingdom's crown prince, Mohammed bin Salman, promising that we will always be friends.

• 6:46John Coogan?

  Yeah. I mean, this is one of those things where like.

• 6:51Jordi Hays?

  He also encouraged Riyadh to move towards normalization with Israel as soon as it's ready, even though war rages in Gaza and Palestinians are no closer to self-rule.

• 7:01John Coogan?

  The fact that you restrained yourself on the soundboard when we had the Secretary of the Army on, you know, this is really, it's a, it's a safe show.

• 7:07Jordi Hays?

  He would have loved it. In hindsight, he would have loved it.

• 7:10John Coogan?

  Public company CEOs, you know, presidential appointees, really the most important decision makers in the world come on, and they all get sound effects equally.

• 7:20Jordi Hays?

  Yeah. Yeah, I really need to adopt an equal opportunity soundboard policy.

• 7:26John Coogan?

  You hit those. It's very clear who you're friends with.

• 7:29Jordi Hays?

  Yeah, Tish yesterday was, was, you could tell he was just like, it really meant a lot to him.

• 7:36John Coogan?

  Feeding off the energy. It's great. But I think, I think it's universal. I think everyone loves a soundboard effect. So, yeah, let's try and space it out today. Try and hit everyone a little bit equally.

• 7:44Jordi Hays?

  This article is extremely politically charged.

• 7:47John Coogan?

  Yep.

• 7:48Jordi Hays?

  I'm going to read this next point. Still, the main message of the first day is that Trump values the transactional nature of US Gulf relations. As long as money pours into the American economy, the US will remain engaged and close to the region. He just said, we will always be friends. He, like, he just said, we're boys.

• 8:07John Coogan?

  Yeah.

• 8:07Jordi Hays?

  MBS, we're boys.

• 8:08John Coogan?

  Yeah.

• 8:09Jordi Hays?

  And now this journalist wants to say that it's just about the money? I mean, come on.

• 8:16Jordi Hays?

  Come on, give him some, give him some credit. You achieved a modern miracle, the Arabian way, Trump said of the Gulf's oil-rich monarchies. The Gulf nations have shown this entire region a path towards safe and orderly societies with improving quality of life, flourishing economic growth, expanding personal freedoms, and increasing responsibilities on the world stage. Trump's stop in Riyadh was always billed as a glitzy spectacle, but few could have predicted the warmth displayed between the two leaders and the nations they lead. Trump's visit to Riyadh kicked off with a Saudi F-15 escort as Air Force One touched down at King Khalid International Airport on Tuesday. Drums boomed and horns blared as the Crown Prince, the country's de facto ruler, greeted

• 9:01Jordi Hays?

  Trump on a lavender-colored carpet rolled out beneath the American plane. They really rolled out the lavender carpet for him.

• 9:08John Coogan?

  There it is.

• 9:09Jordi Hays?

  Then, they walked into the airport for a private ceremony lined by waving US and Saudi flags to welcome the president and many of his senior officials, including Secretary of State Marco Rubio and Defense Secretary Pete Hegseth.

• 9:21John Coogan?

  And his former Andreessen Horowitz partner, Sriram Krishnan, made it.

• 9:26Jordi Hays?

  Yeah, I hope he got a chance on the carpet.

• 9:27John Coogan?

  He got a bunch of photos. He's a heavy hitter over there. It's amazing.

• 9:31Jordi Hays?

  Heavy, heavy.

• 9:31John Coogan?

  You'd love it.

• 9:32Jordi Hays?

  Very cool.

• 9:34Jordi Hays?

  And again, you know, they clearly understands, they understand that, that Trump loves showbiz.

• 9:41John Coogan?

  Yep.

• 9:42Jordi Hays?

  And so the more that you can lean into that.

• 9:43John Coogan?

  Yep.

• 9:44Jordi Hays?

  The better, you know, the relations you'll have with the US.

• 9:47John Coogan?

  Yep. Elon Musk is there. FIFA President Gianni Infantino is there. Trump landed in the Middle East transformed by nearly, nearly two years of war, which responded with a devastating, devastating military campaign that has killed tens of thousands of people, trying to shut it down, trying to bring peace to the Middle East.

• 10:06Jordi Hays?

  Yep.

• 10:07John Coogan?

  It's rough. Anyway, we should go to some of the other announcements that relate to this. So, unusual whales, as opposed to US and Saudi Arabia agreed to $142 billion in defense sales. You have to imagine that that's important to defense tech one way or another, although we haven't seen a lot of stories about this. Most of the stories that we've seen on defense tech have been around Ukraine.

• 10:31John Coogan?

  But I was wondering if we're going to see, you know, the story of Neos, the drone company?

• 10:36Jordi Hays?

  Yep.

• 10:37John Coogan?

  How, uh, uh, Soren, great name, uh, Mon- Monroe Anderson.

• 10:42Jordi Hays?

  Nominative determinism.

• 10:43John Coogan?

  He went out to Ukraine. He's one of, he's, he's literally the world champion in FPV drone flying. Have you seen this?

• 10:49Jordi Hays?

  Drone racing.

• 10:49John Coogan?

  Drone racing. So, so he's, he's incredible pilot. Like you, you go out and you think, oh, he's going to fly the drone. And it's like the most intense whipping around a tree. He's crazy. Uh, so he went out to Ukraine and was helping train drone pilots there to use drones as weapons, basically. Comes back, builds a company around it. It's an incredible story, raises from Sequoia, obviously lots of, lots of competitive dynamics with Anduril and stuff. So a lot of questions and a lot of problems they need to solve, but, uh, still like an incredible story of like going and getting experience on the ground as a young technologist. And then going and building the exact thing that like they need, um, and then eventually selling it to the Ukrainians. But we haven't heard those stories as much from Saudi Arabia or the Middle East.

• 11:33John Coogan?

  And I was also wondering with the India Pakistan conflict, if there was going to be a Neos type company that grows up out of India. Obviously there's a lot of, uh, folks from India who work at Anduril or who work in defense tech or, or even don't even come to America, but want to work in defense tech. It'd be interesting to see someone who cuts their teeth in the Indian Pakistan conflict, then build a company out of that. And that's something I'm like tracking right now.

• 12:01Jordi Hays?

  Didn't have that much time to cut their teeth.

• 12:04John Coogan?

  Well, yeah, cause it was very, very short, but still I, I, I like, and, and America, the whole time was like, we're hands off on this, like we're not taking sides. But if you look at the actual numbers, America has kind of taken a side in the sense that just in the last year, America has sent $5 billion worth of military equipment to India and zero to Pakistan. And so like the numbers are pretty clear. And when I see $5 billion, I don't see, okay, yeah, like that's, you know, there's a generational company to be built right there for American, Anduril for America, for India or whatever. That probably doesn't make sense, but. Is there, is there someone like an entrepreneur who could go over there and get one contract on for 10 million and then take those learnings from that unique conflict? Because I'm sure it's different from other conflicts and then build a real company around that.

• 12:50John Coogan?

  That was something I was kind of tracking, but and I've heard some folks saying like they want to build like the Andorol for India. And that'd be interesting to track, but haven't seen that actually happen yet. Anyway, back on Saudi Arabia, Saudi Arabia brought in a mobile McDonald's for President Trump on his visit. Incredible.

• 13:09John Coogan?

  And it's just like a portable McDonald's. His reputation precedes him.

• 13:14Jordi Hays?

  What inciting that looks like not just any old McDonald's.

• 13:17John Coogan?

  Yeah, that looks like top tier McDonald's, pretty sweet.

• 13:22John Coogan?

  And then Vittorio kind of summed it up all in one post here. He says, Trump, Elon, Sam Altman, Jensen and Saudi royalty. This might be one of the most important events of the decade. Trump signs the peace accords, sets up the largest bilateral deal in history. Elon brings autonomy, solar grids, orbital access. Sam Altman brings AGI and Stargate infrastructure. Jensen brings silicon and compute Saudis bring capital, land and energy. This is how post scarcity begins. Compute for carbon swaps and desert solar powering AGI fabs instead of oil rigs and starship landing pads on Arabian sand. Pettiflop replaces Petro dollar and sun replaces oil. This is the birth of a post Western, post scarcity, post democratic world order.

• 14:07John Coogan?

  Interesting take, Vittorio. Let's hear it for Vittorio.

• 14:10Jordi Hays?

  Let's go.

• 14:12John Coogan?

  Which is the most aggressive take possible out of like, you know, something that they described as like a meet and greet. And they're like taking some photos, but you know.

• 14:20Jordi Hays?

  I mean, yeah, you gotta.

• 14:22John Coogan?

  It's directionally correct that there's like, this is the beginning of partnerships and the continuation of partnerships. Because obviously Saudi Arabia through investments is as exposure to a lot of these and you know, there's been discussions here. It's not like all of these deals are going to get signed today, but I like that he's putting a point on it.

• 14:39Jordi Hays?

  He's saying, we are entering post scarcity today.

• 14:41John Coogan?

  I like some.

• 14:42Jordi Hays?

  Even, even post democratic, right? Yeah, LaVittorio, thought provoking, to say the least.

• 14:49John Coogan?

  There's some other.

• 14:50Jordi Hays?

  We should talk about the specifically the Nvidia.

• 14:52John Coogan?

  The Nvidia thing, yeah, sure.

• 14:54Jordi Hays?

  Deal, so I'll pull this up.

• 14:55John Coogan?

  So Humane and Nvidia announced strategic partnership to build AI factories of the future in Saudi Arabia. We're hearing the AI factory term again.

• 15:02Jordi Hays?

  Humane is the AI subsidiary of Saudi Arabia's Public Investment Fund.

• 15:08John Coogan?

  Fund, PIF.

• 15:09Jordi Hays?

  So they're making a major investment to build AI factories powered by hundreds of thousands of Nvidia's most advanced GPUs. Over the next five years, Nvidia will work with Humane to train and empower an AI ready workforce. Sounds awesome. When did Jensen start calling data centers?

• 15:29John Coogan?

  AI factories? I don't know. And I wonder if that came from him or it came from the media. But it does seem like a more general term, like anyone can understand AI factory, like everyone knows factory.

• 15:40Jordi Hays?

  Data center.

• 15:41John Coogan?

  Data center is very, it's like, are you just storing data?

• 15:42Jordi Hays?

  Yeah.

• 15:43John Coogan?

  All right.

• 15:43Jordi Hays?

  Add another one trillion to the market cap. I've seen enough.

• 15:48John Coogan?

  So the projected capacity for one of the first factories is 500 megawatts, which is not massive by American standards, but it's up there. And that will have several hundred thousand Nvidia GPUs over the next five years. The first first phase of deployment will be a 18,000 cluster, 18,000 GPU cluster of Nvidia GB 300 Grace Blackwell AI supercomputer with Nvidia InfiniBand networking. And they really like the jargon in here.

• 16:17Jordi Hays?

  And Nvidia popped on the news, they're up another 5% today.

• 16:23John Coogan?

  5%?

• 16:23Jordi Hays?

  Back into the 3T club.

• 16:24John Coogan?

  Let's hear it. Let's get some soundboard for them. That's fantastic.

• 16:29John Coogan?

  That's really good.

• 16:31Jordi Hays?

  Here's a good quote.

• 16:32John Coogan?

  This is what we were talking about.

• 16:32Jordi Hays?

  Here's a good quote.

• 16:33John Coogan?

  Talking about like the path to the biggest company on polymarket, how it was a race between Apple and Microsoft. And we were like, yes, that makes sense, but the one company that could just absolutely pop would be Nvidia if it was a wild card.

• 16:44Jordi Hays?

  Still.

• 16:45John Coogan?

  Yeah, of course, of course, but but like if Nvidia does a couple more huge deals out of nowhere, all of a sudden it's gonna be so much.

• 16:53Jordi Hays?

  Funny because the gap between Nvidia and Microsoft is like $200 billion.

• 16:57John Coogan?

  Oh, that's it? I thought it was like a trillion dollars. I don't even know.

• 17:01Jordi Hays?

  But $200 billion, there's just not.

• 17:03John Coogan?

  Oh, they could close that in a weekend.

• 17:04Jordi Hays?

  Yeah, yeah, that's just like a. One swing. Here's a good quote from Jensen. Jensen says, AI like electricity and internet is essential infrastructure for every nation. Together with Humane, we are building the AI infrastructure for the people and companies of Saudi Arabia to realize the bold vision of the kingdom. So anyways, big news.

• 17:27John Coogan?

  Nvidia is at 28% to be the largest company by the end of 2025. It's Microsoft at 37%, Apple at 31%, and then Nvidia at 28%. And the market caps are 3.33 trillion versus 3.17 trillion. Wow. Yeah. Doable. Doable for Jensen. Couple deals and he makes it happen. Interesting. I wonder what they'll be training. I mean, they've done Falcon 9B. I haven't heard more about their LLM development. Are they, are they okay being a buyer of OpenAI and Anthropic? And the other foundation models? Or do they really want to own their own? If they're really close with us, and they are boys, right? Like, you shouldn't care. It shouldn't be that big of a deal. Should be like, yeah, that's fine. I don't care if I use an American LLM. But we'll see where they go with it. Anyway.

• 18:12Jordi Hays?

  We will see.

• 18:14John Coogan?

  Alex Wang was over there. He said, good discussion on AI leadership with President Trump and my colleagues from across the AI industry. Shaking hands emoji. Thank you to our Saudi hosts as well. Seems like he had a great time. And Elon Musk posted a eight-minute interview from the Saudi US Investment Forum, and there were some details that came out of here. I don't know if we can play this video. Do we have audio for this?

• 18:37Jordi Hays?

  Imagine the tension between Elon and Sam.

• 18:40Speaker 02

  To celebrate a US Saudi and a Saudi-US relationship that is 92 years old about how we moved from an oil-based economy to an innovation-based economy powered by wonderful technologies that definitely you're one of the pioneers in this industry. We just showed to his Royal Highness some of your Optimus robots and to President Trump. Let's talk about that. Tell me about them.

• 19:09Speaker 03

  Yes, so we just showed several of our Tesla Optimus robots to His Highness and President Trump. And I think they were very impressed. In fact, one of our robots did the Trump dance, which I thought was pretty cool. To YMCA, yeah? Yeah, to YMCA. So yeah, robots can dance, they can walk around, they can interact. I think we're headed to a radically different world. I think a good world, an interesting world. My prediction actually for humanoid robots is that ultimately there will be tens of billions.

• 19:51Speaker 03

  I think everyone will want to have their personal robot. You can think of it like as though you had your own personal C3PO or R2D2. But even better, then who wouldn't want to have their own personal C3PO or R2D2? That would be pretty great. And I also think it unlocks an immense amount of economic potential. Because when you think about what is the output of an economy? It is productivity per capita at times population or capita. The, once you have humanoid robots, the actual economic output potential is tremendous.

• 20:36Speaker 03

  It's really unlimited. Potentially, we could have an economy 10 times the size of the current global economy, where no one wants for anything. Sometimes in AI, they talk about a little basic economy. I think it's actually going to be universal.

• 20:56Jordi Hays?

  No one's clapping in the actual audience.

• 20:58John Coogan?

  Yeah, it was kind of low energy. Come on, guys. Where's your soundboard?

• 21:01Jordi Hays?

  Alright, I was falling asleep.

• 21:02John Coogan?

  Saudi-US Investment Forum stepping up, guys. Anyway, we should stay on Elon and talk about the Tesla taxi stuff.

• 21:11Jordi Hays?

  Should Tesla get credit for those tens of billions of humanoid sales today?

• 21:18Jordi Hays?

  I don't think that's priced into the stock.

• 21:20John Coogan?

  It's not.

• 21:21Jordi Hays?

  The market is not.

• 21:21John Coogan?

  It's not.

• 21:22Jordi Hays?

  Quite pricing it. It's pricing to figure, right?

• 21:24John Coogan?

  Yeah.

• 21:24Jordi Hays?

  Thirty eight billion. You gotta think that that figure is priced in.

• 21:28John Coogan?

  For sure.

• 21:29Jordi Hays?

  But if I'm looking at Tesla.

• 21:30John Coogan?

  I mean, you know, you're like half joking, but there really is.

• 21:33Jordi Hays?

  Tesla's back over one trillion.

• 21:38John Coogan?

  I never doubted it for a second.

• 21:40Jordi Hays?

  We're so back. It's so crazy. Even so, you could buy Tesla at two hundred and twenty seven dollars a share a month ago, less than a month ago. It's at three hundred and thirty five today. All it took was giving up the Doge dream.

• 21:59John Coogan?

  Terrible time to be a techno pessimist. It's really awful. Anyway, I do think the Tesla story is interesting because there are two narratives right now that are kind of rivaling. Like you're joking about like, are you pricing in all ten trillion dollars worth of GDP or whatever that they're going to add? But I do think that there are a significant number of investors that are saying, I'm investing because of Optimus. And there are a different set of investors that are thinking, I'm investing because of robotaxis. Because these are the two major transformative technologies that if they work will be big new markets, right? And Tesla's working on both of them, but there's questions internally about timelines on each of them.

• 22:39John Coogan?

  Optimus obviously seems farther farther out, potentially bigger market even. And then also there's like reports of like, you know, how far along are each of the technologies? How are the teams actually doing on this stuff? But the thing that I keep coming back to and the thing I want to dive into is just, there's a lot of negativity around Tesla, like missing deadlines or, oh, the robots are actually teleoperated or whatever. But I think it's always useful to step back and benchmark against what else is happening in the market because. Like the idea of a robot that dances is not science fiction. Like we've seen it with Boston Dynamics. We've seen it with Unitree. And it seems like the question is not can Elon build a robot that dances? That's as good as Unitree or as good as Boston Dynamics?

• 23:24John Coogan?

  Like that seems like pretty commoditized right now. Should be able to do that. The question is, can he dominate the category and really scale up production to a point where the economic flywheel works? It's profitable and the products are so much better that they're winning, winning, winning. Just like in the heyday of Tesla, the Model 3 was winning like best car of the year by car and driver, like a pretty nonpartisan group that was just like, yeah, on paper for the price, this is an incredible car. It goes zero to 60 in two seconds. If it's the Plaid and it's like under 100K, you could never get that performance for price ever before and it drives itself. So, anyway, the big discussion is about the Tesla robot taxi deadline. The information says the deadline is nearing and it's the start of a key testing phase

• 24:09John Coogan?

  that is uncertain. And so in Austin, Texas, there is a deadline that's just weeks away, but the company hasn't started testing its cars without a human safety driver as of last month, according to an engineer close to the testing and former employee. That's a crucial step required before Tesla can launch the pilot service for customers. And so Waymo is going through the approval process for self-driving taxi services, obviously all over the place. They're in Los Angeles now. They've been very successful in San Francisco and there's clearly stages and gates to that rollout where there's a human driver in, then you pull the driver out and the car's driving around by itself at low speeds, then at higher speeds. And as you get approved, you move forward.

• 24:50John Coogan?

  And so Tesla's been training its most popular model, the Model Y in Austin since at least last fall, according to internal emails. Tesla employees are now testing the robot taxi service cars on supervised rides in which a human safety driver sits behind the wheel. Testing without a safety driver is the next step, although it's unclear when that will when that will start. Much is at stake. Musk is betting Tesla's future on robot taxi ambitions, which will initially rely on existing Tesla vehicles before using Cybercabs, the specialized vehicles without steering wheels. It plans to begin manufacturing next year and making the Cybercab, that does not seem complicated because it's basically a Model 3 without a steering wheel. It's like less parts and it's all the same infrastructure.

• 25:31John Coogan?

  So like I would, I would be shocked if they don't hit that goal to make that because it's like. Paint it gold and you're good to go, basically. It wasn't like a radical reinvention of what the vehicle is.

• 25:41Jordi Hays?

  Yeah, I mean, the most exciting thing was the doors go up, right?

• 25:44John Coogan?

  Yes, the butterfly doors are important.

• 25:47Jordi Hays?

  Yeah, the doors go up.

• 25:49John Coogan?

  Musk is also betting Tesla can catch up to Alphabet's Waymo, which already operates a commercial robot taxi service in several US cities, but employs a different approach to training and operating cars, which we'll, which we'll talk about. So when Waymo wants to offer its city, its service in a new city, it uses data from sensors on a handful of test cars to prepare detailed maps of each city so its vehicles can safely navigate the streets. The process took a decade to develop and can take at least a year to complete. In Austin, Waymo tested for about six months with the safety driver in its vehicles and six months without them. Waymo cars don't yet ferry passengers on Interstate 35, but they are training on highways in California.

• 26:24Jordi Hays?

  Tesla, on the other hand, trains its cars mostly on data accumulated from existing Tesla drivers. Preparing to launch the service in Austin has forced the company to confront mundane operational problems like rerouting when cars get stuck and providing customer service, essentially the struggles of not having a human in the car, the engineer said. Waymo and other competitors have spent years grappling with these issues. Musk told investors this month, the launch in Austin could include as few as 10 Model Y vehicles. The company's looking to hire a team of people to work remotely, using virtual reality headsets to supervise the cars when they encounter problems.

• 26:58John Coogan?

  So this is teleoperation, very normal and also used in Waymo's. This is the George Hott's contention. It's never been confirmed, but he said, Waymo's don't work when the cellphone towers go down. So you know that they're connected to the internet and you know that people are watching them. But the VR headset thing is interesting because I haven't seen that as necessary. I always thought that when you had a teleoperation team working on self-driving cars, what you'd see is somebody had a big screen or series of screens and they would be looking at maybe four cars simultaneously and it would have kind of like green, yellow, red. And if it's green, it's just cruising down a clear day on an empty street, no problem. But then it sees a cone that it doesn't understand,

• 27:39John Coogan?

  it goes yellow and you can kind of look at it. And then red is, I'm really confused, I'm stopping the car. Now you need to hop in and take over. And then you're not, you're not driving the car in VR. You're saying, Hey, I've, I've, I've double checked as a human and I see no humans there.

• 27:56Jordi Hays?

  Yeah.

• 27:57John Coogan?

  You can, you can go for it, car.

• 27:58Jordi Hays?

  Yeah, and it's not, I mean, at the end of the day, it's not unreasonable to think that Tesla rolls this out and there is perpetually somebody monitoring every single minute that the car is operational.

• 28:11John Coogan?

  Why not? It's not that expensive.

• 28:12Jordi Hays?

  And it's not that expensive.

• 28:13John Coogan?

  Yeah.

• 28:13Jordi Hays?

  And.

• 28:14John Coogan?

  Obviously it doesn't work over the very long term, but it's fine as a way, as a path to market. And so, uh, the Tesla, the Texas Department of Public Safety, which oversees the highway, has not yet received an emergency plan from Tesla, but said it's prepared for the launch. Such a plan would help emergency responders engage with cars if they fail to pull over or if they block traffic, such as other robotaxi services have done. So it seems like the government's actually catching up to this thing, this stuff and it's putting a plan in place to say, hey, like, we want this and people want this, but we gotta figure out what to do if this car freaks out, basically.

• 28:47Jordi Hays?

  I saw a video, uh, somewhat, somewhat unrelated, but I saw a video of somebody figured out how to trap a Waymo. A Waymo had, was.

• 28:54John Coogan?

  I thought you just put a cone on it and stops.

• 28:57Jordi Hays?

  Yeah, so, so apparently a Waymo was in front of this guy's house. And so he went and just took tape and just put four pieces of tape around like the, the main sensors.

• 29:06John Coogan?

  Sensors.

• 29:07Jordi Hays?

  And so the, the car's like on and it's like running, but like, and I was like,

• 29:11John Coogan?

  It's mean.

• 29:11Jordi Hays?

  I don't support abuse of any type of robot.

• 29:15John Coogan?

  That person's first to go when the, when Salvation Day comes.

• 29:19Jordi Hays?

  They're cooked.

• 29:19John Coogan?

  Yeah, the Terminator's not gonna look kindly on that behavior. Anyways.

• 29:24Jordi Hays?

  I respect robots.

• 29:25John Coogan?

  Uh, full self-driving could take over most of city driving on city streets. FSD launched to the public in 2022. By last year, more than 2.5, 2.4 million cars were using it. That's a lot of data. Um, several, several autonomy researchers and engineers said, Musk's confidence in Tesla's ability to quickly expand its autonomous vehicles to new markets fails to account for the logistics needed to operate ride hailing fleets at scales, at scale. Yeah, whether they're driven by a human or a computer, it also glosses over some of the regional differences, such as traffic light and lane design that have slowed other companies as they try to scale. And this is the key thing we, we'll go into. But this is like the really, really important. It is a very, very important underlying strategy to the way Tesla is approaching this versus Waymo.

• 30:10John Coogan?

  So Tesla receives video clips from an array of cameras mounted around its cars and processes them at a cluster of supercomputers, which it calls Dojo. A primary goal is reducing the frequency with which a human has to intervene in the car's driving. This was called on policy learning versus off policy learning. And so you, the car is driving itself whenever the human interacts to take the steering wheel or apply the brakes. That's sent as a negative reward to the neural network to say, hey, whatever you did there, that was wrong. The human didn't like it. And so go back and do more of the driving where the human isn't taking over. And you get a lot of data on that. You build a big, big transformer network and eventually you get a very strong machine learning model, essentially.

• 30:52John Coogan?

  So the computer systems handling the data learn differently from humans and sometimes stumble over issues that would be obvious to people. The engineer said, like, this is obvious. We've seen this with hallucinations with L L Ms. The development has at times relied on feedback from Musk and from YouTubers driving the semi-autonomous modes who map out parts of the roads in San Francisco and Florida where the cars struggle.

• 31:12Jordi Hays?

  Interesting. This is citizen.

• 31:15John Coogan?

  Citizen journalists.

• 31:16Jordi Hays?

  AI.

• 31:17John Coogan?

  Yeah, I guess.

• 31:18Jordi Hays?

  Training.

• 31:19John Coogan?

  Tesla's sole reliance on cameras rather than laser and radar based systems in Waymo means its autonomous approach is more prone to mistakes, critics say. Cameras only is not enough and likely will never be enough, says Seaton Mersili, the co-founder of the autonomous trucking and logistics companies Locomation and Atlas Robotics. Tesla's approach doesn't work, period, said Missy Cummings, an autonomous vehicle researcher at George Mason University. Computer vision is simply not enough for this task and I completely disagree with that.

• 31:51Jordi Hays?

  Betting against Elon Musk.

• 31:53John Coogan?

  It's not just that. It's betting against, it's betting against the way humans do driving. Like humans don't have LiDAR. We just have vision and we drive fine. And so I've never, I've never buy, I've never bought this, this argument, this line of reasoning that, that you, that you would definitely need something more advanced than just a camera. Because humans are able to drive, 18 year olds can drive, 16 year olds can drive. And yes, you need, you obviously need to create something that's, you know, human level intelligence and very, very capable, and you need a huge amount of data, but there's, there's nothing, like this is such a refutation of the-

• 32:31Jordi Hays?

  Mr. Missy is the director of the Mason Autonomy and Robotics Center.

• 32:34John Coogan?

  Yeah, and I, and I understand where she's coming from.

• 32:37Jordi Hays?

  And she was a naval pilot in the eighties.

• 32:39John Coogan?

  Yeah, I mean, I understand where she's coming from in the sense that like, right now, LiDAR and radar based systems and GPS based systems are seeing better results right now. But to just throw out the bitter lesson and disrespect scale is all you need, is a really, really tall order that's been wrong many, many times. And so it's, it's a very risky position to be in and, and I don't, I don't think it'll pay off well. And the whole theory of the scaling laws and the ideas that you want to, that you want to just get a whole bunch of data and crunch it down into a huge transformer essentially, has proven correct many, many times.

• 33:19John Coogan?

  And it also puts you on a different path to scaling because as, if you, if you have a system that's more hand-coded, more, more customized based on the particular locale, every time you go into a new city, you need a new, you need a new team to spin up new records and scan and whatnot and do all these things.

• 33:40Jordi Hays?

  Yeah, and her broad point is that laser-based LiDAR systems also make errors like computer vision is making today. But it's just that layer of redundancy that allows you to avoid mistakes that pure, pure computer vision systems are making today.

• 33:57John Coogan?

  It's just, it's just a very strong statement to say camera only will never be enough.

• 34:01Jordi Hays?

  Yeah.

• 34:02John Coogan?

  Because it's literally enough, right now, in a human. And so I just don't, I just don't buy this line at all. I just think the timeline to actually scale this up is, is long. It's gonna take a long time, but, uh, but the idea that you will never be able to operate a car safely with just camera is ridiculous to me. Anyway, her analysis last year of Waymo, Cruise and Zooks and other testers found that computer vision systems are very brittle and likely play an outsized role in crashes in part because they miss obstacles and can hallucinate imaginary obstacles that don't exist.

• 34:35Jordi Hays?

  This is what I was saying. If you add that LiDAR system, you can add redundancy. And so it's just another effectively, you know, check on the pure computer vision approach.

• 34:48John Coogan?

  Uh, it's difficult to gauge safety of either approach because Waymo's deployments are still limited to specific cities and Tesla's system is not yet fully autonomous. Federal regulators are examining how Tesla cars handle relatively common traffic occurrences such as sun glare, fog and airborne dust, which is legitimate. Uh, Musk has counted, counted, countered doubters by saying that humans manage to drive with only their eyes.

• 35:09Jordi Hays?

  Got him.

• 35:09John Coogan?

  But, but acknowledged last month that Tesla's robot taxi services won't work in snow, prompting some followers online to offer to help train Tesla by driving more in poor conditions. They're just like, I will do it for you.

• 35:24Jordi Hays?

  I volunteer as tribute.

• 35:25John Coogan?

  Musk, Musk also said it's been difficult to train on enough incidents to make sure the cars can handle them safely because if the Teslas don't get into a lot of crashes, there's not a lot of data there.

• 35:34Jordi Hays?

  If Elon can add a, uh, the Tesla camera system to a Lamborghini Cerato.

• 35:42John Coogan?

  That'd be great.

• 35:43Jordi Hays?

  I'm happy to put 5,000 miles on it in, in harsh winter conditions.

• 35:48John Coogan?

  Yeah, yeah, yeah.

• 35:49Jordi Hays?

  You know, at this point, you know, summer's approaching, probably need to take it down to Australia, but doing, you know, a road trip through, uh, you know, the Australian. Winter. Sounds great.

• 36:00John Coogan?

  Yeah, yeah. I mean, this also this also ignores simulation learning and transfer learning, which is obviously something Tesla's invested in a ton and has a very proven proven track record. There was a researcher from Nvidia at Sequoia's AI Sent talking about transfer learning and how they're using generative AI to generate essentially video from the simulated data. So they'll create a physics simulation, basically a video game, a robot picking up an orange or something like that. That's a physics simulation. Then they'll create a ton of variation in the different physics properties to try and inject a lot of noise into the system, basically. But then they'll use generative AI to convert that into video

• 36:44John Coogan?

  feeds that then they can feed back into the system to train on. And they've seen a lot of success with that. And so I'm skeptical that that that this is that big of an issue. But also, like, you could just put LiDAR on the Cybercab, like, it hasn't been built yet. And if the price comes down, you throw that on, and then and then all of a sudden...

• 37:04Jordi Hays?

  Yeah, Tesla, there's companies that Tesla could acquire that would immediately give them a massive edge there. So anyways, let's move on.

• 37:16John Coogan?

  Okay, well, there's some other commentary around this piece. With the robot taxi network, your Tesla will be able to earn money while you're not using it, essentially paying for itself. It'll go it'll go to work just like you, says Tesla. Very bullish for buying a Tesla.

• 37:32Jordi Hays?

  It's wild that big public company...

• 37:35John Coogan?

  Can tweet like this?

• 37:37Jordi Hays?

  Don't use periods anymore.

• 37:38John Coogan?

  Oh, yeah.

• 37:39Jordi Hays?

  I saw. Yeah, it's an interesting evolution. But periods are over.

• 37:46John Coogan?

  Done. And then Dan O'Dowd is another account on here.

• 37:52John Coogan?

  Pouring some cold water on the robotaxi launch. You can almost hear Elon sigh of relief. A sigh of relief. He now has his excuse for cancelling Tesla's June robotaxi launch. It won't be long until Elon claims Tesla was totally ready, but the pesky regulator stopped him. Mighty convenient. Do you think Elon ordered NHTSA to send this letter? And so the NHTSA said-

• 38:14Jordi Hays?

  Get him a tinfoil hat.

• 38:15John Coogan?

  Get him a tinfoil hat. And then Cole grinned, says, "People say you should sell Tesla because it's hard to build a ridesharing system like Uber and Lyft, but little do they know Tesla already has over 20 million people using their app. Once the robotaxi launches, they'll be able to use the existing Tesla app for their ridesharing service. This will allow Tesla to gain new customers through app downloads and cross-selling of other Tesla products. Once those members become, come online, I would not be selling here, I would be buying." He's given some financial advice, folks, but we aren't. And then Rami, who's clearly a Tesla fan, his handle is Tesla Explored, says, "Please send me a video of any other company that can drive me in New York, in the rain, door to door, without any interventions. I didn't

• 38:57John Coogan?

  need to be in the car. I could have easily been in the backseat of my own Tesla robotaxi, and the result is that it took me to lunch autonomously." So he's a fan.

• 39:04Jordi Hays?

  The level of conviction from the, some of these Tesla fans is-

• 39:11John Coogan?

  Oh, huge.

• 39:12Jordi Hays?

  Incredible.

• 39:13John Coogan?

  Huge. It's similar to the level of conviction around-

• 39:15Jordi Hays?

  It's even, it's even beyond our little corner of tech, right?

• 39:19John Coogan?

  Oh, yeah.

• 39:19Jordi Hays?

  It's an entirely, it's a new level.

• 39:21John Coogan?

  But I mean, we see this with other companies. We see this with the Ramp fans. Like, they go crazy. There's all those YouTubers and like-

• 39:26Jordi Hays?

  People saying that they would defend Ramp with their life.

• 39:29John Coogan?

  Exactly, yeah. It happens a lot. Cause like, I mean, they, they know that time is money and they want to save both. And so they create whole YouTube channels all around, just easy use corporate cards, bill payments, accounting, a whole lot more, all in one place. They're just obsessed. It's crazy.

• 39:43Jordi Hays?

  Seeing people get time is money, save both tattoos.

• 39:46John Coogan?

  Lots of tattoos, lots of Ramp tattoos out there, for sure. Oh, and some people start whole live shows, whole podcasts, just to promote Ramp, basically.

• 39:53Jordi Hays?

  In service.

• 39:54John Coogan?

  In service of Ramp.

• 39:54Jordi Hays?

  In devotion.

• 39:55John Coogan?

  Yeah, they call them like, you know, there's like the Teslarati. They're like the Ramparati. We're like the Ramparati.

• 40:01Jordi Hays?

  Yeah.

• 40:02John Coogan?

  The Illuminati.

• 40:03Jordi Hays?

  Yeah.

• 40:04John Coogan?

  It's great. Well, if you're looking to go-

• 40:05Jordi Hays?

  Switch your business to Ramp.

• 40:06John Coogan?

  Long Tesla, short Tesla, whatever your decision is, go over to public.com, investing for those who take it seriously. They got multi-asset investing, industry leaders, they're trusted by millions. Thank you for the soundboard, Jordy.

• 40:18Jordi Hays?

  Thank you to public.

• 40:19John Coogan?

  Should we talk about the giants of Silicon Valley? How they're having a midlife crisis over AI? This was an interesting post in the Wall Street Journal because it was, it kind of all stemmed from an interview with Sarah Guo, who's been on the show. And so she did a podcast with the Wall Street Journal. Bold names, venture capitalist Sarah Guo's surprising bet on unsexy AI. And they did a nice little write up here. So they say, one minute you're upending established industries as the younger disruptor. The next, you're staring into the abyss, eating glasses, as Elon Musk likes to say, watching the disruption at your door. Most, if not all of the magnificent seven are in that position, weirdly trying at the same time to figure out the threat of artificial intelligence to their kingdoms.

• 41:03John Coogan?

  That dynamic has been on display for the past few weeks. Alphabet stock dropped more than 7% after a senior Apple executive disclosed that Google's search traffic on its service, on its devices using Safari fell for the first time in 20 years. You've, they've had Safari around for 20 years as a Google partner? That's crazy. It's so long. Google clarified it continues to see overall search growth even from Apple devices. Putting Apple in the truth zone. Don't knock our stock down, Apple. We're still growing. For his part, chief executive Tim Cook is trying to buy time for his company pushing investors during his latest earnings call to be patient with the iPhone maker's delays around AI features. Then there's Facebook.

• 41:46John Coogan?

  Mark Zuckerberg is attempting to brain, paint a bright future for his ad dollar juggernaut as something of an AI buddy for the lonely. That was kind of taken out of context from a Dorkesh interview. Did you see this? Dorkesh said something and they attributed it to Zach. It's like every time, so bad. Anyway.

• 42:04Jordi Hays?

  You're lonely. How about an AI buddy?

• 42:06John Coogan?

  Even Musk seems to be sweating things as he returns from his Doge sojourn to Tesla, seeking to counter a slide in the electric car maker's stock price with the promises of deploying driverless cars. We're not on the edge of death, not even close, Musk told analysts recently. We love to hear it and we saw it in the stock, over a trillion dollars now. Not bad. His protest sounded like that Monty Python and the Holy Grail character about to be thrown on a pile of corpses. I'm not dead, I feel happy. To be fair, none of these giants are dead yet and they have lots of reasons to feel happy. They are wildly profitable pillars of corporate America, which we love to hear.

• 42:42Jordi Hays?

  Pillars.

• 42:42John Coogan?

  Corporate America and together they represent around $7 trillion in market value. You have the crossroads they all stand at collectively and how they react individually look like ready-made case studies for 21st century update to the classic business school.

• 42:57Jordi Hays?

  So on the Tesla.

• 42:58John Coogan?

  The Innovator's Dilemma.

• 42:59Jordi Hays?

  On the Tesla note.

• 43:00John Coogan?

  Yep.

• 43:01Jordi Hays?

  People that were shorting Tesla over the last couple of months, right? Sales of the cars have been abysmal. Literally every market is down like double digits. It's like so bad, just getting crushed by every other EV manufacturer. They're having to sell cars clearly.

• 43:19John Coogan?

  No blackpilling, no blackpilling, no blackpilling.

• 43:24Jordi Hays?

  I'm not, I'm not, I'm not, I'm just, I just have to, the, this is why never be a short seller. Because you could have looked at all the data for Tesla and said, this, where is the bottom here? I mean, it's like, where, like, why is Tesla, you know, and it's like Elon Musk? Don't betting against.

• 43:44John Coogan?

  Never bet against him.

• 43:45Jordi Hays?

  It's okay not to invest with him, but betting against him, that is.

• 43:50John Coogan?

  It's rough, dangerous. And again, it's like, it's like, are these, this is what we keep going back to with like the Trump tariff things and stuff. It's like, are these things, stuff he can roll back?

• 44:00Jordi Hays?

  Yeah.

• 44:00John Coogan?

  Like, okay, so what, what, what's going wrong with Tesla in this theoretical bad scenario? Well, like Elon's not spending enough time there, right? He's spending too much time at Doge. Well, can he quit his job at Doge and go back to be CEO of Tesla? Like, yes, okay. And is that what he did? Yes.

• 44:15Jordi Hays?

  That's worth about $350 billion.

• 44:18John Coogan?

  It's like, oh, like the LIDAR isn't working, like, could he add LIDAR to his cars? Like, yeah.

• 44:23Jordi Hays?

  Sure.

• 44:23John Coogan?

  Could he map every city? Yes. Could he, you know, there's like all these things that people are like, oh, he'll never, he's not doing this.

• 44:31Jordi Hays?

  It's impossible.

• 44:32John Coogan?

  Oh, he's like, he's over, he's politically, he's too right wing. Like, well, could he come out and endorse Gavin Newsom?

• 44:38Jordi Hays?

  Could he live out?

• 44:40John Coogan?

  He could. Yeah. Like, anything's possible.

• 44:42Jordi Hays?

  It's never too late.

• 44:43John Coogan?

  Anything's possible.

• 44:44Jordi Hays?

  It's never too late. Uh, well, let's talk about the art market. I wanted to have my dear friend Dylan Abruscato on.

• 44:51John Coogan?

  Potentially the most important topic for the show.

• 44:53Jordi Hays?

  To talk about the most important story of today and certainly, uh, potentially the week.

• 44:58John Coogan?

  Yes, I think so. It's, it's shaking up Silicon Valley. There's a lot of, uh, there's a lot of venture capitalists, a lot of exited founders, post-exit founders, and a lot of technology journalists who have generational wealth who are at Christie's right now bidding on modern art. And so they'll want an update. So we'll bring in Dylan to the studio. Welcome to the stream. How are you doing?

• 45:20Jordi Hays?

  Thank you for joining, Dylan.

• 45:24Jordi Hays?

  Dylan, it's great to have you on the show finally. Longer overdue.

• 45:27Speaker 04

  Long time listener, first time caller.

• 45:29Jordi Hays?

  Lot of great, uh, a lot of great pointers. Uh, but, uh, anyways, I wanted, we were, we were going to cover this story. So thank you for being, uh, able to hop on, on short notice. Do you want to give a quick intro and then we'll dive into the story just so people, uh, have some context?

• 45:44Speaker 04

  Yeah, sure. Uh, I'm Dylan, founder of Crypto the Game, which is an interactive, uh, crypto survival game. Think, uh, HQ Trivia, where I worked with the Rise and Fall meets, uh, Survivor or Squid Game or Hunger Games. We've had a couple of viral seasons. Um, and before that I was, uh, Jordy's Head of Marketing over at Party Round in Capital. So we go way back. Um, and yeah, excited to be here.

• 46:04Jordi Hays?

  Way back. Way back. Um, awesome. Why don't you give some context on your, your, uh, background, uh, as an amateur, uh, but successful art collector as well?

• 46:15Speaker 04

  Yeah, yeah. I've kind of, um, always been an obsessive collector of things, you know, growing up I collected Beanie Babies, Pokemon cards, baseball cards, sports memorabilia, um, always collecting. Fast forward to, I don't know, probably like. 2017, 2018, my wife and I moved into our first apartment together, had very sterile white walls and decided that, I guess, like, collecting art would be a good way to kind of scratch that itch of collecting and be something that we could do together. So kind of just started as something we could do together. I kind of browsed Instagram. Back

• 46:56Speaker 04

  then, there was like a much more intuitive, kind of like, explore tab. You were surfaced, kind of like, art if you followed artists. And pretty much just cold DM'd this artist, also coincidentally named Jordy, Jordy Kerwick, whose art immediately spoke to me. Sent him a DM. He didn't have any gallery representation. He made, you know, buying a piece and commissioning a painting as easy as like texting with a friend. You know, I think the art market historically has been so hard to get into for young collectors, and there was like zero friction in the way that we went about it. I think we got a little lucky in the sense that he eventually like blew up, got kind of like gallery representation and

• 47:37Speaker 04

  tier one gallery representation. He was breaking records, you know, in similar auctions to what we're about to discuss. And kind of because of that, I don't know, I almost like made a name for myself in this like Instagram art community. And yeah, I've kind of just like catapulted into the art collecting scene.

• 47:58Jordi Hays?

  How's the P and L, though? On paper, I'm sure the returns are fantastic. Have you ever, do you ever sell, or do you just buy?

• 48:05Speaker 04

  I don't know. I just buy. I don't know. You know, the, everyone always asks, kind of because of that, like, what to buy and how to go about it. And my advice is always just to buy what you love and buy what speaks to you. And it kind of sounds like, you know, pretty simple advice. But anytime I've looked at a piece or like had a recommendation from a friend or a fellow collector on a piece that was going to be a great investment or was going to do really well, has never worked out. And I've always kind of regretted buying and having on my wall and kind of like looking at it versus the stuff that we do buy and collect and kind of like do it for the right reasons and have always been kind of like rewarded on paper, basically, for those early bets.

• 48:43Jordi Hays?

  Yeah. Great. Well, let's talk about this story and then I'd love to get your update on kind of the broader art market. So we'll read through it. So the Journal covered it this morning, but the Mondrian sells for 47.6 million. Christie's Modern Art Sales kickoff, a week-long series of art auctions that will gauge the art market's strengths amid broader economic uncertainty. People are wondering, will art values soar or flop, or, you know, in general, what the liquidity will be like?

• 49:12John Coogan?

  So this was at the kind of low end of the estimate, the 1922 work composition with large red plain, bluish gray, yellow, black, and blue was expected by Christie's to sell for between 40 million and 50 million, but only one bidder emerged and it sold quickly for $41 million or 47.6 with the auction house's fees. The work still ranks as the third highest price ever paid for the artist, but the record remains 51 million, paid three years ago from Mondrian's composition number two. Both examples feature a large red square, which the auction house hoped would help because collectors tend to pay a premium for Mondrian's spare abstracts that contained cherry hues, said Alex Roder,

• 49:56John Coogan?

  Christie's president. Red always helps, simple as it is, because it's a people that color, it's a color that people like, said Roder.

• 50:04Jordi Hays?

  There you go. That's what Dylan's talking about.

• 50:06John Coogan?

  Never buy brown. Never buy brown. It doesn't sell. It's also particularly small. It's only about like two feet by two feet or something. And so I saw on X, Bornosaur, an NFT profile picture, says, this tiny Mondrian just sold for 47 and a half million dollars last night without anyone batting an eye. And yet people think AAA, natively digital grails are overpriced at two to three million, much, much higher. Kind of saying, hey, maybe we should pump the, pump the, the market of the bored apes.

• 50:42Jordi Hays?

  Yeah.

• 50:43John Coogan?

  Let's get bored apes in the conversation.

• 50:44Jordi Hays?

  Yeah, let's get it back in the conversation. Anyways, were you surprised at how this, this got priced, Dylan? Were you following it at all? Or?

• 50:53John Coogan?

  Yeah, I mean, there's a lot of like, there's a lot of uncertainty in the overall economy, right? So, I mean, you would expect that like art kind of oscillates. But yeah, I mean, do you follow this? Or like, how do you even track the overall art, art market these days?

• 51:07Speaker 04

  Yeah, I mean, it's exactly, it is so similar to, you know, venture investing. I know you kind of joked about it at the top, but especially when you look at emerging markets and if you buy from their studio in the same way that I did with Jordi Kerwick, it's basically getting into a friend and family round, at least with kind of like living artists and artists that still have gallery representation. If you do, if they do basically sign with an up and coming gallery, that's the equivalent of a seed round. And then by the time they do get that kind of like tier one Gagosian level representation is the equivalent to an Enresin or a, you know, a tier one fund, like backing them in like a growth stage round. But yeah, I think you, you referenced that kind of like Mondrian record that was set three years ago.

• 51:51Speaker 04

  There were emerging artists, everyone, basically like at the time of Zerf, like everything was going crazy. And we saw that both in, you know, basically across every single market, art not withstanding. So I think the way that I personally judge it is, is basically just off of the information that I receive. In 2021, 2022, I was reaching out to galleries kind of cold and being told that there were wait lists and the deal flow was basically like very, very hard to come by. Fast forward to, you know, a few, a few years from then, you know, galleries were kind of like reaching out to me. You know, hey, I know you were initially interested in this artist a few years ago. Here's all this work that's available and willing to offer discounts.

• 52:35Speaker 04

  And that immediately signals to me that, you know, times aren't good for galleries. But I do think that the, the best way of predicting like how these auctions are going to go are based on basically how New York Art Week goes. And that was this past week, which was kind of headlined by Freeze, but they also had a TAF as well as NADA, which is kind of like the more emerging art fair. And from what I can tell from everyone that I've spoken to, that was kind of like on the ground. It was a much more optimistic New York Art Week than years past. Gagosian sold a $3 million sculpture on the floor. They sold that, you know, tons of booths that were sold out kind of like on day one.

• 53:16John Coogan?

  $3 million sculpture selling on day one, that's great news.

• 53:20Speaker 04

  Yeah. So I think like that usually sets the tone for how these kind of like auctions go. There's been a ton of buzz around the Bass House. I'm not sure if you guys are familiar with the Bass House, but it was a commissioned.

• 53:33John Coogan?

  We both are, but can you explain it for the fans who might not be?

• 53:37Speaker 04

  Sure, yeah. It's an architecturally significant home in Texas that these two kind of like well-known collectors commissioned a very famous architect to design this mid-century modern house in Texas, specifically designed to house their collection of Rothko's and Warhols and, you know, pretty much every big name. And they are auctioning off the collection, which everyone in our market is very surprised by because you would think, you know, you commission this home to specifically house this collection, it should eventually become a museum. And I think that kind of like bodes well for what they think and what a lot of people think is going to be a lot of liquidity, kind of like heading into these auctions.

• 54:20Speaker 04

  Having said all of that, I would say if we had this conversation like a week or two ago, I think it would be a lot more pessimistic or concerned. But given the very like recent kind of like positive news and kind of like market turnaround, I think there's some buzz kind of heading into, heading into tonight.

• 54:38John Coogan?

  I have a follow-up question. I mean, the size seems significant. I feel like there's probably a sweet spot for the scale of a particular, you mentioned that sculpture, we're recording not too far from the Broad. You walk in, there's this massive Jeff Koons balloon animal. I walked in, when I was in New York once, I walked into Jordan Wolfson. I don't even know if it's a sculpture, but it's like a performance art piece. I don't know if you're familiar with Jordan Wolfson, but it's like this crazy, interactive like machine that has motors and stuff. And at a certain scale, it becomes like, how do you even collect that unless you have like a museum to put it in?

• 55:19Speaker 04

  That's who's buying it is, is the institution.

• 55:21John Coogan?

  It has to be.

• 55:22Speaker 04

  I would imagine, you know, the $3 million sculpture that Gagosian sold that I mentioned was a Koons and I, you know, Broad bought their Koons sculpture from Gagosian and I would venture to guess that the bidder or the person that bought this $3 million sculpture was an institution looking to build out their collection for the museum.

• 55:39Jordi Hays?

  Yeah, is Christie's, I mean, yeah, I'm curious, not to, not to switch gears too much, but I'm curious, is Christie's even slotting in NFTs this week at all? Or are they so over it that they're not even?

• 55:53John Coogan?

  Yeah, because it was a big thing like three years ago.

• 55:54Jordi Hays?

  Yeah, I mean, Sotheby's, you gotta give Christie's, Sotheby's.

• 55:57John Coogan?

  They did the B-pole.

• 55:57Jordi Hays?

  Yeah, you have to give them some credit for moving quickly and getting NFTs into these auctions early. But I'm curious if they're doing that now.

• 56:06Speaker 04

  So this week is kind of like the hero week of every year and there's, there's no way that in like a, you know, 21st century like masterpiece auction, you'll see an NFT, but I do think they are still accepting crypto and selling NFTs. All the main, major auction houses kind of have daily auctions that they're running. You know, you probably won't see a people in something as kind of like highly publicized as this week's auctions. But I definitely think they're still selling digital art for sure.

• 56:35John Coogan?

  Yeah, yeah, there's one NFT that I think belongs in the conversation. Have you heard of this moxie marlin spike NFT? So he's the founder of Signal and during the NFT boom, he wrote a very technical deep dive on kind of some of the flaws with the way NFTs were structured in that. He, he basically designed an NFT that displayed differently on OpenSea than in a phantom wallet than in an Ethereum wallet. And he was making this commentary around the importance of platforms and the role that a firm like OpenSea plays in the art market and how like the, the code is not

• 57:18John Coogan?

  purely on chain because it can be represented differently in different places. And, and it was kind of this like, it was kind of a top signal at the time. He wrote it when NFTs were super hot. And obviously he came to it from a very engineering mindset perspective. And I think that it, even though he never sold it and it doesn't have any value and it never like minted in the traditional sense. It is an NFT and it has this historical provenance and this story around it that I think as we look back on the NFT boom, we could remember that particular story as an interesting commentary on the entire industry that could actually drive the value up. So I was considering buying it from him for a while, but I didn't, I didn't have the guts to throw out an actual price.

• 58:00Speaker 04

  Yeah.

• 58:01Jordi Hays?

  Yeah.

• 58:02Speaker 04

  Well, I do think similar to how there's paintings and there's sculptures and there's basically all different forms of, you know, there's mixed media art, like I do think digital art definitely has staying power. Probably just like in the more experimental guys that you were talking about. And then just to quickly touch on like size as being a blocker.

• 58:20Jordi Hays?

  Sure.

• 58:20Speaker 04

  I think once you're talking about these like, you know, eight, nine figure pieces, it's almost always someone that can house or store either in their, in their museum or in their home, like a massive piece. But just for like the everyday collector or someone that might be listening to this, like personally speaking, like I have gigantic canvases that are still rolled up that I have absolutely zero wall space for, but that is like an addiction and a problem. And I do think that, you know, buy for the size that feels right to your home and something that you actually want to hang.

• 58:53Jordi Hays?

  Well, we're moving into a new studio very shortly and we're certainly going to have some wall space, so.

• 58:59Speaker 04

  Amazing.

• 59:00Jordi Hays?

  We'll, we'll only charge you a small storage fee.

• 59:02Speaker 04

  I'll pump my bags.

• 59:02Jordi Hays?

  As a, yeah, family, family and friends. Anyways, great to have you on.

• 59:07Speaker 04

  Yeah.

• 59:08Jordi Hays?

  Come back on again soon.

• 59:08John Coogan?

  Thanks so much.

• 59:09Jordi Hays?

  And let us know how things shake out this week in the art market.

• 59:12Speaker 04

  Cool. Talk soon.

• 59:14Jordi Hays?

  Later.

• 59:14John Coogan?

  Talk to you later.

• 59:15Jordi Hays?

  I was just pulling up, so OpenSea.

• 59:16John Coogan?

  Let's bring in Jared, because he just has five minutes and he's all the way from Saudi Arabia. Jared Mathias, Sparks, reporting live.

• 59:25Jordi Hays?

  Reporting live.

• 59:26John Coogan?

  From Saudi Arabia. He's there on the ground.

• 59:30Jordi Hays?

  He better, he better be in the traditional.

• 59:33John Coogan?

  In the traditional, oh, we were expecting a suit, we were expecting more pageantry.

• 59:40Speaker 05

  Yeah, no, no so from me today, boys, but I am calling in from an undisclosed location in Saudi. Can you hear me?

• 59:46John Coogan?

  Yeah.

• 59:46Jordi Hays?

  Yeah, you sound great.

• 59:47John Coogan?

  You sound great.

• 59:48Jordi Hays?

  Loud and clear.

• 59:49John Coogan?

  Give us the breakdown. Why are you there? What's going on? What's the mood on the ground?

• 59:54Speaker 05

  Yeah, so I'm here mostly just to see friends.

• 59:57John Coogan?

  Okay.

• 59:57Speaker 05

  But but beyond that, there was an event today where there was a US delegation. President Trump was there. The Crown Prince Mohammed bin Salman was obviously there. And a slew of top tech leaders from the US also came. So we had Jensen Huang, Elon Musk, et cetera, et cetera. You know, all the big names you can look them up online. Yep, you can hear, yeah, yeah, I'm not this. In terms of the big headlines, look, you guys can look them up. The big ones are 600 million in new committed capital.

• 1:00:28Jordi Hays?

  Billion.

• 1:00:28Speaker 05

  Sorry, 600 billion in new, yeah, 600 billion new committed capital. But I don't want to talk about that at all. What is the most interesting thing from today is the fact that sanctions on Syria have finally been lifted. Now, I know between the three of us, every time we get together, it's like, when are we finally going to be able to enter the Syrian market? Well, boys, that day is today.

• 1:00:47John Coogan?

  That's today.

• 1:00:48Speaker 05

  So, yeah, no, it's today.

• 1:00:50Jordi Hays?

  This is the day everybody's been waiting for.

• 1:00:51John Coogan?

  We should start distributing the show there for sure.

• 1:00:54Jordi Hays?

  Yeah.

• 1:00:54Speaker 05

  No, 100%. A lot of people don't realize, look, Syria, after the civil war started in 2011, our companies have just not really been able to serve customers there. So the Syrians don't really know the joy of US big tech yet. And, you know, they missed the whole web 2.0 mobile development. So most of the groups that are servicing them are from the Chinese sphere versus the American sphere. And I am beyond excited for the new crop of talented founders that are going to descend on the Syrian country to spread them the joys of American big tech. So, you know, if anyone is walking and is going to be launching any number of companies in Syria, my DMs are open. I could not be more excited.

• 1:01:34John Coogan?

  Very cool.

• 1:01:35Jordi Hays?

  Wow, 23 million people in Syria.

• 1:01:38John Coogan?

  Go get them.

• 1:01:38Speaker 05

  20, look, 23 million people, they've had double-digit inflation for like the past decade, which means that they are a prime market for stablecoin adoption. So every stablecoin neo bank needs to be descending into Syria and seeing how quickly they can dollarize the entire country. If anybody is using the Syrian pound in five years instead of US dollars on blockchains, we have just massively screwed up as an industry. So please, request for startups, we are looking to fund.

• 1:02:02John Coogan?

  That's very cool. What about artificial intelligence? Nvidia launched some stuff. Have you been hearing any rumblings about AI stuff going on?

• 1:02:11Speaker 05

  Yeah, look, the fact that Jensen was here today on the main stage shows that we are likely softening some of the restrictions on being able to export GPUs to the Kingdom and other parts of the Middle East. I might have the numbers off, but I think there was an announcement that like a purchase order of 18,000 GPUs has just been approved for the Kingdom. If you're listening and that sounds small, not enough to build, you know, a hyperscaler or a massive cluster, you're correct, but this is clearly the first of many. The entire region is rapidly searching to turn their, you know, petrol-based capital into, you know, token-based capital in the future. So expect, expect continued investment from the region trying to diversify out of their kind of one main industry.

• 1:02:54Jordi Hays?

  Yeah, Humane is, just for extra context, so Humane, the AI subsidiary of the PIF, is going to be purchasing hundreds of thousands of advanced GPUs over the next five years. So, starting with, I think, the number that, that you said 18,000 and scaling.

• 1:03:12John Coogan?

  Yeah, and the first plant is, I think, half a gigawatt, right? Something like that?

• 1:03:17Jordi Hays?

  What's your take on, why do you think that we started calling data centers AI factories? Do you have a take there? Does it just sound cooler?

• 1:03:25Speaker 05

  Yeah, it lowers your cost of capital.

• 1:03:28Jordi Hays?

  Yeah, and that's, that's the most important thing that anybody can be focused on at any given point.

• 1:03:35John Coogan?

  Yeah, what, what is the word on energy? Obviously, with AI training, it makes so much sense to put big data centers there. But at the same time, they're trying to get away from the, hey, we have a whole ton of free energy because we have so much oil. There's also a lot of sunlight, so maybe there's solar in the future. What are the hot energy sectors that people are looking at?

• 1:03:56Speaker 05

  Yeah, so a lot of people are, with regard to energy, talking about a potential nuclear deal. While there is an abundance of oil in the Kingdom, burning oil to power, power plants is not necessarily the most efficient use of oil. You know, I don't have the numbers off the top of my head, but if you look at the amount of oil that is burnt in order to air-condition all the buildings in the Kingdom, it's like a Exorbitant expense. Um, so some Gulf states uh are slightly more advantaged in that they have larger deposits of natural gas versus uh crude or shale. Um, which is just, you know, it's more more efficient in terms of converting into energy. And with regard to solar, solar in uh the desert has not really taken off as much.

• 1:04:39Jordi Hays?

  Um.

• 1:04:39Speaker 05

  Um, because my understanding is there's a lot of wear and tear that comes from the sand. Um, and that you need to build a series of protections and the elements are not necessarily kind and you know, a hundred and thirty degree Fahrenheit weather as sand rapidly batters them. So we'll see what happens, but yeah, obviously um. There's been a bunch of companies that are super interesting like Crusoe. I might be mispronouncing that. They're doing things like capturing excess flare, using that to generate energy at first to do crypto mining and now to run data centers. So expect there to be a lot more, as you already put it, AI factories coming out of the region. Um, and there's a massive focus on on renewables and alternative sources as well to power these things. Um, because people would rather sell their oil versus use them to, you know, uh, spin a water turbine.

• 1:05:23Jordi Hays?

  Yeah, that makes sense. Uh, do you think you or Jensen go to more conferences?

• 1:05:28Speaker 05

  I really don't go to that many conferences, guys. You know, I'm I'm about to hit my quota for the year and then I will retreat to a dark room instead of my laptop for the next nine months.

• 1:05:36Jordi Hays?

  Yeah, you do it right, though. You do it right. You go to you go to just the right ones. I uh, we've been just like not not even intentionally, but paying attention to Jensen's travel schedule and uh, he's at a new conference pretty much every single day, but um.

• 1:05:50John Coogan?

  What's the what what's the rest of the mood around crypto broadly? Is there a push for Saudi Arabia to build a position in Bitcoin, kind of a Bitcoin National Reserve from their Public Investment Fund? Are they into Ethereum, Solana? Is there is there is there even a thesis from the from the Sovereign Wealth Fund around crypto? Or is it kind of just general hand waving around, hey, we want crypto to be friendly generally?

• 1:06:17Speaker 05

  Yeah, so the holdings of PIF are public, or PIF, the Public Investment Fund of the Kingdom. Um, as of now, there is no crypto holdings in that, uh, except via, you know, funds that they're invested in downstream. Um, in terms of, uh, if it is going to emerge as a crypto hub, that is still yet to be seen. Crypto is largely legal in Saudi. What is interesting though is, uh, when you look at countries that have been super friendly to crypto in the region, mainly the UAE, right? There's a lot in Abu Dhabi, there's quite a bit in Dubai. The customers that they tend to cater are not, uh, born Emiratis, right? The number of, of Emirati citizens that necessarily will make use of crypto products in terms of giving them access to banking is fairly low, right?

• 1:06:57Speaker 05

  These are nations that are mostly staffed by, uh, uh, immigrants, um, you know, uh, expats that are choosing to live there. Um, but when you look at Saudi, even though crypto is legal here, there are some studies that show, uh, that in terms of Gulf region, it has the highest penetration from a individual user adoption space. Um, just how many individuals are holding the coins. So I think that as, uh, the regulatory framework flashes out a little bit, and as, um, you know, more and more voices inside of, uh, the Ministry of Finance and the Central Bank here, uh, grow louder, um, we should expect to see, uh, a softening of the rules. And then the end state of that is probably a pretty robust, uh, environment, specifically in the Kingdom.

• 1:07:40Speaker 05

  Um, but re- re- remember, the people that can benefit from crypto the most are regions that have, you know, high levels of inflation, low levels of banking, uh, highly mobile first in terms of, um, you know, payment infrastructure and things like that. And that doesn't necessarily describe all the Gulf states the best. So, you know, jury is still out on how much and how quickly penetration will come. Outside of just like investment speculation, which of course you hear rumors about tons of family offices here building massive positions, but it's just very hard to validate that.

• 1:08:07John Coogan?

  Yeah, with, with, with, with the new 300 billion, 600 billion investment, is that one of those things where the investment was already going to happen and they're tagging it for this press release? Or what is the structure? Is there any, is there any clarity on like the structure of that deal? Is that just investment dollars flowing into American investment funds or specific buying of, of American goods? Do you have any clarity on what, what, what we're going to expect here?

• 1:08:31Speaker 05

  I haven't really broken it down yet, but I I think the right way to think about it is it's going to be a lot of infrastructure investments and a lot of purchasing of American goods.

• 1:08:38John Coogan?

  Sure.

• 1:08:39Speaker 05

  Right. So when Jordy's talking about the hundreds of thousands of GPUs that are going to be acquired, that's, you know, the pool of capital that that's that where that's going to be coming from.

• 1:08:46John Coogan?

  Yeah.

• 1:08:47Speaker 05

  But no, I mean, they they specified they want to invest in energy infrastructure. They want to invest in data centers. They want to invest in, you know, ports and just anything.

• 1:08:54John Coogan?

  So I mean, it could even be like more oil rigs in the in the short term as they, you know, they're they're moving away from oil, but you know, they're obviously still producing a lot of it. And American companies have kind of a dominant position in the, you know, oil and gas infrastructure market. So they might be buying for that.

• 1:09:11Speaker 05

  Totally. So we'll see. Also, a part of that is a massive defense spending bill.

• 1:09:15John Coogan?

  Yeah.

• 1:09:16Speaker 05

  Or a defense spending agreement. I think it was one hundred and forty three billion that they committed. And, um, you know, just socially talking with some of the people from the Ministry of Defense that you ran into at the conference. Um, they were like, oh, my God, have you heard of this company called Saronic? Have you heard of this company called Anduril? They're really gung ho on some of the non-prime upstarts coming out of the States. And, um, yeah, I I like three different guys from the Ministry of Defense. They're like, hey, if you meet any founders building interesting new defense companies, refer them to us. We want to potentially pilot them. We want to potentially invest in them if we want to make a purchase contract. So, yeah, it's an exciting time for sure.

• 1:09:51Jordi Hays?

  I would like I would like to see somebody with a Daytona SP3 using it as a launchpad for a Roadrunner. So like you're driving the Daytona, launching the Roadrunner off the back.

• 1:10:02John Coogan?

  Uh, I mean, in terms of like early stage founders, like how early is too early to start engaging with someone like as senior as like a Ministry of Defense official? I feel like you need to have a product that can be demoed. But when we talked to the Secretary of the Army, uh, his message was very much like, we want to hear from startups even at the early stage. We have a proving ground. You can come test here. We want to work with Silicon Valley. That seems like it's certainly a vibe shift in America, but it sounds like that's happening over in Saudi Arabia as well.

• 1:10:30Speaker 05

  Absolutely. I mean, I mainly do not focus on defense, so I don't want to say anything too out of turn. But I think post the Ukraine-Russia conflict, people saw how important it is to have the most up-to-date equipment for the battlefield. So in the same way that a lot of companies immediately went over to Ukraine and Russia, or immediately went over to Israel following October 7th, there's probably an increased appetite to try new things and see where it goes. And if you have a prototype, it's probably better than not having a prototype. But if you have good contacts, it probably is a good idea to get in touch earlier rather than later.

• 1:11:00Jordi Hays?

  Yeah, I think oftentimes the conversations start, but no purchase activity can actually happen until the US has actually basically approved it and said, this works, we'll buy it, now you can export it to allies. But anyways, we don't need to get into ITAR stuff.

• 1:11:15John Coogan?

  What's the mood around the trade war? Generally, it feels like we're almost in like post-trade war discourse. It's a distant memory at this point after Sunday and Monday. But are people still thinking about tariffs or has the conversation just completely moved on?

• 1:11:30Speaker 05

  Yeah, the day opened with tariff conversations. So Scott Bessin started the day. And it was very calming. You know, he got up, he talked about the negotiations with his Chinese counterparties. He made some very interesting points around how while President Trump and Xi had a very strong relationship, some of the people more junior in the CCP perhaps did not share his warm feelings towards our president. So he mentioned that a lot of the talks in Switzerland were about,

• 1:12:05Speaker 05

  you know, showcasing and building favor with some of the, you know, second and tertiary level folks within the Chinese government.

• 1:12:13Speaker 05

  And came out and was very much, we don't want to trigger an embargo on Chinese goods. We don't want to trigger a double embargo. So the tariff rates came down and talked about a number of other countries he's going to negotiate with. And it was very much a non-escalatory tone. And I don't think it's a surprise at all that the, you know, US delegation chose to start the day out that way. So no, tariffs weren't really talked about after that because Bessin kind of kept everybody at ease. We'll see how much that remains and if we continue to lay off and have more 90-day reprieves and more agreements negotiated. Or if, you know, tomorrow things ramp back up again. But for now, I think people were pretty, pretty calm.

• 1:12:49John Coogan?

  Very cool. Thank you so much for taking the time. I know it's late there.

• 1:12:52Jordi Hays?

  Super insightful.

• 1:12:52John Coogan?

  Very clearly.

• 1:12:53Jordi Hays?

  Thank you for just throwing on the suit just to pop on.

• 1:12:55John Coogan?

  Yeah, just for us. Yeah, thanks for throwing on the suit. Every time.

• 1:12:58Jordi Hays?

  Every time.

• 1:12:59John Coogan?

  Great to see you, Jared.

• 1:13:00Jordi Hays?

  See ya.

• 1:13:01John Coogan?

  Let me tell you about Linear. Linear is a purpose-built tool for planning and building products. Let me get some soundboard, Jordy. Meet the system for modern software development, streamline issues, projects, and product roadmaps.

• 1:13:12Jordi Hays?

  It is the standard for product development.

• 1:13:13John Coogan?

  Yeah.

• 1:13:14Jordi Hays?

  It is the backbone of our...

• 1:13:17John Coogan?

  The global economy.

• 1:13:18Jordi Hays?

  Of the global economy.

• 1:13:19John Coogan?

  Of the global economy.

• 1:13:19Jordi Hays?

  Many people are calling, just considering that big tech is, you know...

• 1:13:24John Coogan?

  This really goes on for a long time. Well, we got Sam Jamiko from Impulse Labs coming in the studios. He's talking about stoves, but also trade tariffs, manufacturing. I want to ask him about what it takes to build a BYD in America, and I want to know the history of BYD, what he's learning from that company. And I also want to get him to sign up for Numeral, because I want him to put his sales tax on autopilot. I want him to spend less than five minutes per month on sales tax compliance. But Sam, welcome to the studio. How are you doing, Sam?

• 1:13:54Speaker 06

  You guys here?

• 1:13:55John Coogan?

  Welcome.

• 1:13:57Jordi Hays?

  Welcome, Sam. It's great to have you.

• 1:14:01John Coogan?

  Good to have you here.

• 1:14:02Jordi Hays?

  How'd you, uh, how'd you sleep last night? Better than you have for the last few weeks?

• 1:14:07Speaker 06

  Yeah, it was, it was pretty good. I think I got the notification at like midnight on, uh, on like, was it Sunday night or something like that? And I was like, oh, sweet. I didn't expect that, but I did. And that's why I didn't panic. Um, but they...

• 1:14:21Speaker 06

  And so, so for clarification, basically, we, um, I guess Ashley Van Scoop does that. We do a decent amount of our manufacturing in China.

• 1:14:29John Coogan?

  Yeah.

• 1:14:30Speaker 06

  At Impulse, which is the highest-performance stove you can buy. And you can go check out his latest video on, uh, on Core memory, the Core memory YouTube channel if you want to learn more. But the fun part about that is, um, we probably spent a couple of weeks being like, hey, do we have to pay this 145% tariff on a bunch of the stuff we build? My immediate calculation was this will stop trade between China and the United States, and a bunch of businesses will not like that. And feedback will land from everyone, from Ryan Peterson to someone that makes bratstalls to, I don't know.

• 1:15:08John Coogan?

  Everything. So I mean, it's only a 90 day pause. Are you trying to get as much stuff in the country right now? Are you scrambling to import a year's supply? Or are you thinking that this is the end of the trade war and we're going to be more or less smooth sailing from here on out?

• 1:15:25Speaker 06

  Yeah, I mean, I as much as I would. So one big thing with hardware companies is like a year's supply is like a gazillion dollars. So you gotta be, you gotta be, you gotta be, you gotta be a little strategic about what to grab. And we made sure that our suppliers are multinational and have manufacturing sites in Southeast Asia and other places, including places that are likely scoped to have deals of, you know, coming together in terms of, in terms of like favorable treatment on the tariff side, Vietnam, other places in Southeast Asia, Mexico, et cetera. And so basically, the idea is just like, make sure that like, all the customers that are already paid, we already told them, hey, we're going to cover this crazy 145% tariff back in the day, or a couple of weeks ago, we sent them a mass venue like that. Obviously, it's a little easier for us to do that now.

• 1:16:10Speaker 06

  Still, still holding, still holding to that. But, uh, but yeah, the, I think the big thing is like, now at least I've got some breathing room to think conscientiously about what the next steps are for manufacturing of not just our stuff, but you know, technologies that we're going to be powering other devices with as well.

• 1:16:30John Coogan?

  I mean, I know you're, I know you're a relatively new company, relatively small. But did you actually have to pay any tariffs? Or were you able to kind of like, do a little bit before and a little bit? You did. Okay. So break that down.

• 1:16:43Speaker 06

  Oh, yeah. I think we paid the 145% on a couple of things, actually.

• 1:16:46John Coogan?

  On a couple of things.

• 1:16:46Speaker 06

  The good, we, we, the customer, the bulk of the customer orders that are coming in are not subject to that. But like, we got, we've started mass production already. And we're a bunch, kind of the beginning of that ends up being kind of samples and like VIP influencer units and other fun things like that. We've definitely paid it on a handful of those. The balance of the, the balance of even that tranche of units is landing like pretty soon. So we mostly avoided all of this. We're kind of lucky that this was an April thing, not a May thing.

• 1:17:22Speaker 06

  Nice. To be blunt. But yeah, there was a lot of fun on that side where I think if our if our battery pack build hadn't gotten delayed like three weeks, there was actually a small chance that we would have had to decide whether or not to pay a very, a very large amount of money to get them out of the port.

• 1:17:43John Coogan?

  Well, it's better to be lucky than good, right? That's the nature.

• 1:17:46Speaker 06

  So the calculation, so I'll give you kind of like what I thought about and what was in my head as this was happening because I don't think I actually panicked at all. I was like, this is actually an opportunity to talk frankly about what it's actually like running hardware startup in 2025 with a large supply chain with a pretty complicated product with with with all these constraints, right? And finally, people care about me, right? Like, you know, finally, this is the main the main news story of the day. So I viewed it as like, what's turned the limits of the day?

• 1:18:23John Coogan?

  You made it on you. You didn't panic. You coped and it all worked out.

• 1:18:27Speaker 06

  And I get on Odd Lots and a couple of, you know. So, so, so that was the opportunity I saw. And the second piece was I was like, okay, so how long does it take for a boat to go from China to the US? And, and then I was like, okay, so by like, the first week of May, there's probably going to be some motion on on something here. And so I kind of had that in my head of like, there is a shock clock going on before we're going to have to do some sort of relaxation of some sort of thing.

• 1:18:57Speaker 06

  And looking at the shapes, the negotiations and kind of the various players that were, you know, swarming around and what I've heard privately from, I probably can't say who and what, but like, just, just, just in a sense of like, there were. There were, there were, there were well-known folks that have complicated supply chains that were not going to want to pay 145% duties on their stuff.

• 1:19:22John Coogan?

  I mean, we saw that pretty quickly with Apple, right? And Apple was kind of like the largest thing. They got the exemption pretty early, but then there was a lot of other discussion about other companies and at a certain point, you know, the, the noise gets so loud. It's definitely.

• 1:19:34Speaker 06

  The climb down from Amazon on the like, we won't put the tariffs in the checkout was interesting because it's like, I wonder if there was, it kind of felt like maybe there could have been some negotiation behind the scenes on this where they're like, yeah, don't put it in there because we're going to just come back in two weeks kind of thing.

• 1:19:49John Coogan?

  Well, I think they threatened to do it, right? They, they actually rolled out the UI and then they got slammed by the Trump administration for doing that and seeing it as like, hey, you're, you're blaming us, but you shouldn't.

• 1:20:00John Coogan?

  Never has a single.

• 1:20:01Jordi Hays?

  The question, the question I have is, does the, the debacle of the last month or so change your long-term planning in a meaningful way? Because we were talking in some, we were talking on the show and off the show yesterday around this idea that, okay, what did we get out of this, right? And it didn't, it didn't feel like we got a lot out of the Geneva negotiations. If anything, we got rare earths back, which was a reaction to the initial tariffs.

• 1:20:32Jordi Hays?

  And de-escalation is just generally good. Market obviously likes it, but we just kind of like round trip back to where we were. And John made a point, which is that, okay, well, if a generation of CEOs like got into their head, the reality of decoupling does that.

• 1:20:49John Coogan?

  It's not happening right now, but it could happen.

• 1:20:51Jordi Hays?

  It's not happening, but it could and you need to have a plan around it.

• 1:20:53John Coogan?

  During this chaotic period. And so I'm sure during that board meeting, you guys thought really seriously about, hey, if this actually sticks, what is our plan? Maybe that wasn't plan A, but at least it's a plan in the plan document now. And so decoupling.

• 1:21:11Jordi Hays?

  They had concepts of a plan.

• 1:21:13Speaker 06

  So, so, so I, I actually have this like, I, I, I, I don't want to get super political, but I do think there's this like Trump tariff cycle, like image that, that there's a meme, there's a meme that's called the Trump tariff cycle. It's like, I add tariffs.

• 1:21:28John Coogan?

  Yep.

• 1:21:28Speaker 06

  I like.

• 1:21:29John Coogan?

  Take them off art of the deal.

• 1:21:30Speaker 06

  Art of the deal. Yeah, yeah, yeah.

• 1:21:31John Coogan?

  Forty chess. Take them away, art of the deal.

• 1:21:35Speaker 06

  Yeah. So, so I, I, I actually think there's one interesting wrinkle to this, which is. Um, the, the Democrats have been often spaced, like you can argue they've been often spaced with like, you know, you can, you can blame like wokeness or um, some of the more like, like some of the Elizabeth Warren coded economic ideas in terms of like, oh, we should just break up all our big tech companies because well, that would be and like, there's a bunch of these, these sort of like, these, these sort of ideas that have been, let's call it anti-tech or, or kind of on the wrong side of a culture war balance or something like that.

• 1:22:11John Coogan?

  Yep.

• 1:22:12Speaker 06

  Um, what's been very interesting is, or like, let's legalize homeless encampments in San Francisco or whatever. And what's been interesting is systematically, um, so like Grow SF has like, really, and Daniel Lurie and all those have really reset San Francisco in a, in a positive way. Because like, they, they had to get the egg in their face to learn the lesson.

• 1:22:31John Coogan?

  Yep.

• 1:22:32Speaker 06

  But I'm actually excited about the Democrats being negatively polarized into a free trade party.

• 1:22:38John Coogan?

  Oh, interesting. That's a funny take. Yeah.

• 1:22:42Speaker 06

  Because, um, because, you know,

• 1:22:44John Coogan?

  Just as a reaction. Just as a reaction. Yeah. No, no, that makes a ton of sense. That's funny. Uh, I, we, we have five more minutes. I want to, I, I want you to walk me through. I'm sure you've studied BYD. I'd love to know kind of, uh, the history of that company, what your takeaways are. And what it takes to build an American BYD in America and what makes BYD, what does that even mean? An American BYD. Why is that different than an American, yeah, like,

• 1:23:14Speaker 06

  Tesla or something like that.

• 1:23:15John Coogan?

  Yeah, exactly.

• 1:23:17Speaker 06

  Yeah. So I, I spoke to, I spoke to an ex-Tesla person and I was like, I was like, would Elon ever build stuff for other people? And it's like, and I've actually asked this question for, for, for a number of different folks and I've actually gotten, gotten a variety of answers and it's kind of like, he'll do it if it's on the main path of like, getting something, getting to, getting to, getting to the like vertically integrated goal, if that makes, if that makes any sense. But like, it's, it's, unless, like, unless Tesla was forced by the government to be like, you will build tanks or something like that, like, like that. They're not in that business and they're never going to be.

• 1:23:47John Coogan?

  Yeah.

• 1:23:48Speaker 06

  And so if you think of like, what, what like BYD has in terms of capabilities, it's like, it's a car company and a car brand. You can buy a car from them, but like, everything inside that car is also like fractally built by them. Um, so like the infotainment system, they're the manufacturer of that, whereas like, Quanta, like where's like Quanta or Pecatron or something like that may make that system for Tesla.

• 1:24:14John Coogan?

  Yep.

• 1:24:14Speaker 06

  Um, and this goes down all the way into the battery cells and all the other stuff. So there's like, they're, they're, they're like the most vertically integrated company you could ever imagine.

• 1:24:23John Coogan?

  So interesting because you'd think in like a command and control economy, you'd be able to force a Kuretsu like in Japan even more, right? You'd be able to force cooperation between a bunch of different companies, but it seems like in China, maybe that hasn't happened with BYD. Am I understanding?

• 1:24:36Speaker 06

  It's, it's, it's, it's interesting because um, I think it's, it's the DNA of the place more than there's like a more than, more than the policy side. But then the flip side of it is, so BYD makes stuff for other people and that's like what they do generally. And that's what they historically did. They just happened to be a nickel cadmium battery manufacturer that just kept acquiring businesses and like, bringing them into the fold until they basically had a car business, a lithium ion battery business. And kind of like all of the, all of the like IP needed to build any electric, electric device. So like, that's everything from like a smartphone to a car to like.

• 1:25:17John Coogan?

  Your dreams.

• 1:25:18Speaker 06

  Battery first of those or whatever.

• 1:25:21Speaker 06

  And so, and so what's really interesting about this is like, I can, like, I could go to a firm like this and I can say, hey, build me soup to nuts, a whole device. They will commit substantial engineering resources, but those engineering resources is a little bit less like, maybe it's, it's, there's like contract manufacturers in the West and stuff like that. But this is like, no, they'll do it with the BYD parts and the BYD process. It's, it's like, they almost have like the best Lego set in, in, in the world. And they're able to leverage all of that IP as just a really high starting point to be able to kind of develop, develop all these devices.

• 1:26:00John Coogan?

  Yeah. So what, I mean, what does it take to build an American version of that? Should we be even thinking about that as a goal? Is that, is that a different company or is that a, you know, a cultural shift in Tesla's strategy? Where do we go from here?

• 1:26:14Speaker 06

  Yeah. I mean, there would be one way to do it. It should be like Defense Production Act says, hey, Tesla built for other people. But I think that would not go over, that would go over like a lead balloon and probably is not a good strategic choice. Um, I do not want to insert that idea. I don't think it's a great idea for Tesla for a bunch of reasons. But, um, but I do think that there's. I've been focused on like what parts of the value chain in kind of the electrified device universe. Um, and I say that very broadly, like this is everything from EVs to stoves to, to, to phones and stuff like that. Where, where a part of the value chain is like not made in the United States, really high level of integration, both like hardware, software, et cetera. And if you have better components, you can make better products.

• 1:26:57Speaker 06

  And this is where we realized that on the, the appliance industry, just if you go and build appliances in the United States today, you buy electronics from China or Germany. And all the guts inside, it's kind of like you're getting, um, your graphics card from a Taiwanese manufacturer and your motherboard from another Taiwanese manufacturer.

• 1:27:15Jordi Hays?

  Have you taken any trips to Germany, by the way? They've been asleep at the wheel in many ways.

• 1:27:21Speaker 06

  I've, I've actually never been to a German factory, which is saying something that's judgmental against myself and I intend to fix that soon. Um, the, I think a lot of what's been going on is all of like, China's been just incredibly good at the final assembly and like that part of the value chain. And it turns out that's where a lot of the software defined technology start intersecting is like automated assembly, computer vision.

• 1:27:51Speaker 06

  Like, like building all kind of like the firmware and software to make stuff work in an integrated way. And like, that's the thing that I think people miss about the car industry. And this is probably the, the thing to say is the, the legacy car companies don't build cars like phones, whereas Tesla does and China does. And when, and I, that's a really broad statement, but it's really like, you're building an integrated electronic device, not a bunch of individual boxes designed by different firms that you've like plugged together. And, and you need manufacturers like BYD, like a BYD or like a Tesla that can actually go and span all of these disciplines with the same people being able to, the people in these various groups being able to talk to each other versus how like a Ford car or a

• 1:28:36Speaker 06

  like one of a major US appliance companies like stove is put together where in some sense, there's like a corporate firewall between. Electronics box A and metal enclosure B for instance.

• 1:28:50John Coogan?

  Can you talk about like zooming out in terms of this reindustrialization reshoring industrial capacity? What's at the top of the priority stack? I mean, there are a lot of memes about like, do we really want to be doing screwing in iPhones and making those here? We've talked a lot about DJI. It seems like there's a huge gap between Chinese capability and consumer drone manufacturing versus American.

• 1:29:13Speaker 06

  Well, guess who makes DJI?

• 1:29:15John Coogan?

  Is that BYD?

• 1:29:16Speaker 06

  I won't say.

• 1:29:17John Coogan?

  Okay. But, but, but then there's also like lower level, potentially like higher skilled activities like battery manufacturing with the, you know, mineral extraction, all sorts of stuff. What, how should we be thinking about it? Not just from a consumer perspective, but from like a industrial capacity governmental perspective.

• 1:29:36Speaker 06

  Yeah. So actually what's really interesting is if I go take an iPhone and I like part it all out on a table in front of you and I say, who's actually doing the core engineering and IP of everything in the iPhone? It's actually like the US and our Asian allies.

• 1:29:48John Coogan?

  And Taiwan, right? Because Foxconn's a Taiwanese company.

• 1:29:51Speaker 06

  It's, it's, it's, it's Taiwan, but no, but even all the parts like LG in a tech makes the camera.

• 1:29:56John Coogan?

  Yep, yep.

• 1:29:57Speaker 06

  Samsung makes the display.

• 1:29:58John Coogan?

  Right. Yeah, a lot of Korean tech in there for sure.

• 1:30:01Speaker 06

  Lot of Korean and Japanese technology in there. So, so, so the point though is where, where is China really good? And it's like, it's like, it's the assembly, the integration, being able to kind of span all of these disciplines. So, so if I was to, if I was saying what, what I think is really important is, I think, I think Noah Smith has a, he's my tenant, so I have to show him. But I think Noah Smith has a good take on this, which is basically like the US is missing out on the technology of the future. And China actually has explicitly said this, where they believe that the tech stack of the future is the electric tech stack, basically. It's like, it's like batteries, power electronics, motors, that whole thing. And it's like, you can build a robot, you can build a drone, you can build a car, you can build smartphones and consumer electronics.

• 1:30:46Speaker 06

  That spans the gamut of like, that is the technology stack. And in some, and it's rare earth magnets, stuff like that. For some reason, the US just like. I think it's basically the 08 recession and like a lack of manufacturing investment afterwards. Um, meant that like, we never actually picked up that stuff with one notable exception, which is Tesla.

• 1:31:07John Coogan?

  Yeah.

• 1:31:08Speaker 06

  And so, and, and actually SpaceX as well. So like Elon did this twice. We should reverse engineer why.

• 1:31:15John Coogan?

  Well, that's why we're talking to Elon Musk of stoves. We're, we're very happy.

• 1:31:18Jordi Hays?

  Many people have been saying this. The other people, people have also been calling you Noah Smith's landlord. After you dropped that he's your tenant.

• 1:31:25John Coogan?

  Effect on there. Uh, thank you so much, Sam, for joining.

• 1:31:28Jordi Hays?

  Sounds good. This is great.

• 1:31:32John Coogan?

  Before he can even say goodbye, just sound effect work.

• 1:31:35Jordi Hays?

  What were you gonna say?

• 1:31:40Jordi Hays?

  It's great to have you, Sam. Uh, I'm, I'm, I'm excited for you and the team.

• 1:31:43John Coogan?

  And, and keep us updated. I know there's big news coming, so drop it here first.

• 1:31:48John Coogan?

  Talk to you soon.

• 1:31:48Jordi Hays?

  Talk soon.

• 1:31:49John Coogan?

  You know, a lot of people have been saying, we need an American compliance company. We need an American company that helps you manage risk. We need an American company to prove trust continuously.

• 1:31:58Jordi Hays?

  Continuously.

• 1:31:59John Coogan?

  We need a trust management platform.

• 1:32:00Jordi Hays?

  Vanta.com.

• 1:32:01John Coogan?

  That takes your manual work out of your security and compliance processes and replaces it with continuous automation. Whether you're pursuing your first framework or managing a complex program, that's why vanta.com exists. So head over to vanta.

• 1:32:12Jordi Hays?

  Vanta makes compliance fun. They didn't say that. I said that because I've used vanta.

• 1:32:18John Coogan?

  Fantastic. Well, we got Vincent from Prime Intellect coming in the studio next. We're talking about a bunch of stuff related to crypto and AI GPU mining. I think this is going to be a very interesting conversation. We talked, uh, well, welcome to the stream, Vincent.

• 1:32:34Vincent Weisser?

  How are you doing?

• 1:32:36Jordi Hays?

  There he is. What's going on?

• 1:32:38John Coogan?

  We, a couple of months ago, yeah, yeah. Thanks for joining. A couple of months ago, we had Bridget from Founders Fund on, uh, gave us the high level, uh, overview, but I'd love to get it from you. Can you just introduce yourself and the company to kind of kick us off?

• 1:32:51Vincent Weisser?

  Yes. So, uh, my name is Vincent and like, I'm the founder, uh, like co-founder and CEO of Prime Intellect. And basically our goal really is to commoditize, um, AI and compute more broadly, um, really also.

• 1:33:05Vincent Weisser?

  By almost like networking all the computing world together and making sure like no GPU goes idle, but rather I can contribute to almost like an interplanetary like compute cluster that can like fund, uh, for example, so say I models, but also that people can just like use to ultimately save on like uh, compute like ultimately the goal really is um realizing that like computers is like gigantic market, which will ultimately power all those different areas and it's quite inefficient and very distributed. So a lot of it is ultimately like research challenges to make sure we can like network compute that is like quite distributed throughout the world. But also like verified, right? It's like you, you can't trust like the thousands or like millions of different like uh data centers and like

• 1:33:49Vincent Weisser?

  GPU nodes um distributed across the world. So there is basically like a challenge to scale trust. And it's like you can tr- uh, trust one data center or one company, but it's hard to do so at scale. Um, so basically we're attacking those two problems.

• 1:34:02Jordi Hays?

  Okay, uh, why don't you talk about the launch Sunday?

• 1:34:05Vincent Weisser?

  Yeah.

• 1:34:06Jordi Hays?

  You guys, uh, I hadn't seen, I hadn't seen the launch like that on a Sunday since the last seemingly few Trump executive orders. So you guys kind of realize Sunday's, yeah, Super Bowl Sunday. Why not launch a new model, but, but break down uh, the, the launch uh, just a couple of days ago?

• 1:34:24Vincent Weisser?

  Yes, so basically, um, we like, kind of like to take a step back, almost like did this first uh, very large scale uh, distributed pre-training run into like one, which was building on like deep minds, distributed low communication training to train basically a model across the internet, across multiple data centers in similar efficient CS in a centralized setting where we um, where all the computers network in one data center. And now that we switched to this kind of like O one, like post-training, like reinforcement learning paradigm. Um, it's actually kind of like a paradigm that is like perfectly set up for distributed training. Because most of it is like those roles and basically um, you can distribute them extremely well. Like there's basically less needs to communicate every training step.

• 1:35:09Vincent Weisser?

  Um, so what we did with like intellect two was really scaling to like the larger model size, like a thirty uh, roughly thirty B model that we basically trained distributed across the globe with different people contributing compute. And um, and we basically built this on top of Quen. So basically the goal was also to Like, take the best open models out there and improve them further for like actually quite um like uh small amounts of compute. It was honestly like more like a proof of concept where we basically proved four different pieces like on the one side. Basically, um we proved this like verifiable compute piece that basically anyone in the world could join with their compute. We don't need to trust them.

• 1:35:48Vincent Weisser?

  It's very like efficient basically ways to like um make sure that they're basically like an honest computer uh computer uh computer. And then the other piece was really um making like basically distributed uh reinforcement learning work. So basically decoupling. Those like role generations um from the training itself. So you basically can train across the globe with like less frequency um of communication. And what we basically proven is that like with quite a um small amount of compute like roughly a hundred thousand dollars, which is not comparable to obviously kind of like the. More like close AGI labs, we've basically been able to like improve upon Quen and it's kind of like sets the foundation for us to.

• 1:36:30Vincent Weisser?

  Actually scales much further and ultimately actually have kind of like a repeatable recipe. To get like basically improve like the strongest open source models out there. Continuously for quite like small amounts of capital across different domains. So we made it much better on uh math encoding. But the goal is also to make it much better on like other domains and really like how to do so is like. Really scaling those like reinforcement learning environments. I think you had uh Will Brown on like he joined us uh to work on this.

• 1:36:57Jordi Hays?

  Yeah, I was gonna ask, what was, what was the, what was the process like recruiting uh the big dog WB?

• 1:37:03John Coogan?

  Absolute dog.

• 1:37:04Jordi Hays?

  I mean, I, I just have to imagine he's such a good poster. He's such a, a great guy to chat with. I, I, he could have gone anywhere, but he ended up with you guys.

• 1:37:12Vincent Weisser?

  Yeah, I think it's, it's two things like you, you should ask him what's up, but I think. Like a lot of talent is gravitating more towards like open source AGI and like to basically build in the open. To publish in the open, right? Like to be able to also um like. Contribute to the frontier of like the most exciting research and in a sense like I have friends at OpenAI and who's you've never heard because they can't publish, can't really talk about their work, right? So like, I think there's this component, but I think then we are basically, I think like now, like especially in the Western Hemisphere, I think like one of the only places that is really catching up to the frontier, right? Like there's obviously like Quen and DeepSeek and others in China, but I think it's really a fumble by like America, I think,

• 1:37:53Vincent Weisser?

  to basically be the close guy, uh, that is like not really, almost like standing in for the values of like democracy and freedom to the same extent, but I think like he is obviously extremely passionate about like um, open source AGI and kind of like distributed like reinforcement learning, so like he immediately hit the ground running on, on basically scaling this much further. So we'll have more like, yeah, like work we are building on top of like this, uh, direct jump distributed reinforcement learning, like in the next few months, uh, already out, which should like scale this much further.

• 1:38:22John Coogan?

  Hmm. I remember a couple of years ago, I was using um, uh, Octane Render and they have a distributed rendering network where you can render CGI images on GPUs all over the world and they actually have a, a crypto layer uh, for render tokens as well, but this idea of distributed computation makes a ton of sense in that context because each frame is unrelated to the other frame, so you can, if you're rendering a 90 frame sequence that's a few seconds long, you can just send, you know, each frame to a different machine. Uh, what have you learned from the successes and failures of the render network and what Otoy did with Octane?

• 1:39:02John Coogan?

  Um, and, and is there any difference between those discrete individual frame generation? And something as complex as training a whole model where, you know, you might, you, in theory, you'd need to load it all into one, uh, one instance every single time?

• 1:39:18Vincent Weisser?

  Yeah, like, great question. I think there's a few players like them and others that have tried this in the past. And I think they've been almost like in some ways, I think, too narrow and like trying to ambush us, right? It's like rendering, like, it's nice, but like, it's not like the general purpose, like,

• 1:39:32John Coogan?

  Yeah.

• 1:39:33Vincent Weisser?

  like use case that we now have with AI, right? So I think there's basically, like, our goal is really making this much more like general purpose useful for like every single like computer AI use case.

• 1:39:44John Coogan?

  Mm hmm.

• 1:39:44Vincent Weisser?

  And I think that has been one big learning, it's basically being, like, most of our team are AI researchers and they come from the AI world.

• 1:39:50John Coogan?

  Mm hmm.

• 1:39:50Vincent Weisser?

  Including the people that build, for example, the verification mechanisms, right? Like the verification, in our case, has like tiny overhead, like one percent. Like the more like crypto native verification mechanisms have more like a one to ten X overhead, which then make it completely like unfeasible to compete with the centralized clusters. So I think that has been like a big learning is basically being very pragmatic and close to the AI researchers. So that's like the main community we're like building with and engaging with. And basically building for, right? So like all of our users are AI developers. And ultimately, I think the biggest lesson has been is like just creating value for for them from day one, right? It's like we launched basically our compute platform like two or three months in with like two or three people.

• 1:40:34Vincent Weisser?

  And and immediately got like a lot of users and scaled since then, like basically that like any kind of like AI startup or developer can just like, basically with our platform, almost like like have like a global market on the one side. But like we we aggregate all the hyperscalers, all the different data centers, even working with like folks like Aaron, like a later on from Hydra. Like, and all these guys to basically aggregate and orchestrate like all these different data centers and hyperscalers. And I think that has been another lesson is like, we are not trying to be like the exclusive maybe marketplace where supply onboards. We just aggregated all the supply out there, which gave us a huge kind of like wedge, maybe to like enter the market.

• 1:41:16John Coogan?

  Okay, talk about some of the hardware where this is actually running a thirty billion parameter model. Uh, at at floating point sixteen, you're gonna need sixty gigs of RAM. You're probably gonna be on H one hundred, not gaming cards. But are you thinking about bringing residual capacity online in the gaming market? Or are these like small data center operators that just have a stack of H one hundreds that they're not using and then they're bringing them online?

• 1:41:43Vincent Weisser?

  Yes, so basically, I think what's been exciting is like actually this run was hit a genius. So H one hundreds and A one hundreds could join. And I think it may be even like H hundreds. Um, and like for future ones, like actually for next one, we're starting like even thirty nineties and and like gamer cards can join. And I think what's interesting is you can basically with like uh this role generation and like basically synthetic data generation. You can distribute the tasks like basically based on their like difficulty to different cards, right? And to different models. So the goal really is like to have like a full tolerant, like your genius, like um pool of compute, right? So like what's also a big one that we did already in the first run, but also in this one is is full tolerance.

• 1:42:23Vincent Weisser?

  So it's not only that you have like H one hundreds joining and A one hundreds and thirty nineties, but they can also drop out, right? Like they can join for a few hours when they're idle. And I think that's like the border thesis is like almost like every GPU that is like idling is like a market failure, right? Like especially in a world where increasingly like my theory is like the the biggest almost like commodity in the world will be compute. And like it will be one of like one of the biggest slices of GDP. And it's like unfortunate of like half of that is like sitting idle instead of like curing diseases, generating like movies or like some like creating basically technological progress, right? And I think the goal is to basically just get to like a hundred percent utilization of compute. And we're very, very far from that.

• 1:43:02John Coogan?

  Yeah, yeah. Well, uh, what what are you seeing in like the trend in chip size and scale? You know, obviously Nvidia is pushing pushing those like DJX uh DJX like rack mounted units, racking everything together with NV links. You can do even bigger models. Cerebras is scaling up the single chip size to wafer scale. Uh, the the the theme of the last few years seems to have been uh, let's not decentralize. Let's actually centralize further. And so uh, where does this go? What is your take on on kind of the ever bigger racks and ever bigger chips for larger compute training?

• 1:43:37Vincent Weisser?

  Yeah, I think we'll see both and I think actually ironically like an Nvidia actually has an incentive to fragment the market like they don't want one buyer. They don't want AWS to be the only customer because AWS is building their own chips or like like the big tech clouds basically. Uh like have their own chips competing with Nvidia, right? So Nvidia is very happy to give a bunch of chips to Corey, a bunch of chips to Cruise, a bunch of chips to Lander. And all of these other guys, right? But then, um, so I think we'll see both at the same time. Like I think like all like we'll have thousands and like millions probably over the next few years. Like of data centers, there will be these gigantic clusters, right? Like Stargate from OpenAI. But I think at the same time, like this increasing amount of like capacity in in the almost like the mid-tier of like smaller data centers.

• 1:44:22Vincent Weisser?

  Um, but then I think like also on the other side, like there's a lot of compute like sitting idle everywhere, right? Like soon and whatever, like autonomous cars, robots, like everything else. So we actually had like some of the biggest like car companies in the world reach out to us. Or phone manufacturers that are like, oh, we're sitting on like hundreds of millions, like billions of like phones or cars that are like have idle compute capacity. And I think we're not there yet, but I think we'll we'll have like, we'll have just much more compute everywhere, right? Like we'll have more like mega clusters, but we'll also have like more mid-tier and small clusters.

• 1:44:54Jordi Hays?

  Mega cluster.

• 1:44:55Speaker 02

  Mega cluster.

• 1:44:55Jordi Hays?

  Mega cluster. Uh, I have a question before you leave. Can you, can you give some, uh, any expectations around DeepSeek R2? I've seen some crazy rumors flying around online. Uh, I don't know what's, what's real and what's fake news, information warfare. Curious what you're expecting out of the next release.

• 1:45:15Vincent Weisser?

  Yes, like I think they'll, they'll definitely catch up to the frontier like again, I think to some extent. I think they'll, they'll probably be not as good would be my guess as like, um, Gemini or OpenAI and but I think. There's obviously this trend where I think like and all the closed lab CEOs have admitted it, right? It's like that open source has catch up like very uncomfortably close to their lead. And I think that will continue. I think that the close guys obviously have some advantages, but I think there's also huge advantages, obviously, the open source AI space has. So I think like the trend will continue that ultimately like the deep seeks and the queens of the world, but hopefully also like players like Lama will like catch up a bit more. Like obviously they've been a bit disappointing with their like Lama fall launch, but I think they might

• 1:46:00Vincent Weisser?

  also actually like catch up again. And then obviously, I think like our goal is like to be able to basically build on all of these, on all of that progress. But it's like, basically, we kicked off our like largest synthetic data generation run the day DeepSeek dropped and like generated basically a lot of like verifiable like reasoning data that we could then use, for example, in this recent model. So I think the, like what I see more is like basically we can like improve open source AI progress like literally day by day, week by week. Like it won't be a thing where we need to wait like four months for like some progress to come. But it's more like continuous basically progress.

• 1:46:37John Coogan?

  Well, thank you so much for joining. This was fantastic conversation.

• 1:46:40Jordi Hays?

  Yeah, I really enjoyed this. And congrats on scooping WB. Legend.

• 1:46:47John Coogan?

  Truly, truly. Congratulations on the trade deal.

• 1:46:49Jordi Hays?

  Yeah. But come back on again soon. I know you guys are gonna have a bunch of launches coming up and appreciated your perspective.

• 1:46:58John Coogan?

  We'll talk to you soon.

• 1:46:59Vincent Weisser?

  Appreciate it.

• 1:47:00John Coogan?

  And if you're looking for distributed compute, go to Prime Intellect. If you're looking for distributed advertising, go to adquick.com. Out of home advertising made easy and measurable. Say goodbye to the headaches of out of home advertising. Only AdQuick combines technology, out of home expertise and data to enable efficient, seamless ad buying across the globe.

• 1:47:17Jordi Hays?

  They just make it too easy, John. I want to spend every single dollar we have on AdQuick.

• 1:47:23John Coogan?

  On billboards. Anyway, we got the CEO of Backbone in the studio. Let's bring him in, Manit. Excited to have you here. Welcome to the stream. How are you doing?

• 1:47:32Speaker 08

  Thanks for having me, I appreciate it. I feel like I walked into the middle of an ad read.

• 1:47:35John Coogan?

  You did. You did. You did. We are 100% corporate sponsored. Independent media is dead. The future is corporate media and we are leading the charge. But good to have you here. Can you introduce yourself and explain what Backbone is? I'm a fan, but some people might not be aware.

• 1:47:52Speaker 08

  Sure. My name is Maneth. I'm the CEO and founder of Backbone. Backbone is the leading platform for the future of gaming. The way I describe it to people is that every time there's been a shift in streaming media, it's resulted in some of the biggest consumer businesses. So like music streaming, you had Spotify and Sonos. And then in TV streaming, you had Netflix and Roku. And you can think of Backbone as the analog company for streaming games. We have a number of products. We sell devices that you can use to connect to your phone or any screen and play games on them. And then we also make an app that aggregates all the different streaming services like Xbox Game Pass and others, so you can access them all in one place.

• 1:48:34Speaker 08

  You can buy our products in any major retail store, Walmart, Target, Best Buy, et cetera. And we're backed by investors like Index and Sound Ventures.

• 1:48:43John Coogan?

  Yeah, so I got one a couple of years ago. I was not getting a lot of time in front of the PlayStation 5. And so it would drop my phone into the Backbone and stream from the PS5 over the Wi-Fi to the phone with the Backbone. It gives you the whole gaming experience. Very fun. What has the relationship been like with the big console providers? Can you break us down the different strategies? It seems like Sony has been very competitive, launching something that's kind of like a competitor with the PlayStation. I forget what they called it, but it has a screen and device and does remote play. Microsoft's taken a much more open approach, letting you even stream Xbox games on PS5.

• 1:49:27John Coogan?

  And Forza Horizon is on PlayStation now. And so what has been the relationship with the different major gaming platforms been like over the last few years?

• 1:49:38Speaker 08

  For sure. So I think, of course, each one has its own strategy. Microsoft in particular is really interesting because they're running this campaign now called Xbox Everywhere.

• 1:49:48John Coogan?

  Yeah.

• 1:49:48Speaker 08

  Where the idea is that you can turn any device in your life into an Xbox and run games on any screen. And the way they're doing this is through streaming games from the cloud. So Microsoft's subscription service Game Pass, if you subscribe to it, you can basically access the entire Xbox games catalog on any device that you own. And of course, the devices and software that we're making work great with Game Pass and make the experience work really well end to end. So you can do it on things like smartphones. So I think in Microsoft's case, you know, their goal is really to drive more Game Pass subscriptions and just gather more Mal and Dow for their service. And it's super strategic to, you know, their overall roadmap with cloud and all that as well.

• 1:50:29John Coogan?

  Why wasn't Google able to pull it off? I feel like they were early to that party. Game streaming, I can't even remember the name of the product, but it never really hit like major takeoff. Or do I have it all wrong? And actually, it's better than ever. I don't even remember.

• 1:50:44Speaker 08

  So you're talking about Stadia?

• 1:50:45John Coogan?

  Yeah, that's right. Stadia.

• 1:50:46Speaker 08

  Yeah.

• 1:50:47John Coogan?

  Is Stadia still around?

• 1:50:49Speaker 08

  What's that?

• 1:50:50John Coogan?

  Is it still around?

• 1:50:51Speaker 08

  No, no, it was shuttered unfortunately. Yeah.

• 1:50:54John Coogan?

  Classic Google.

• 1:50:55Speaker 08

  Classic.

• 1:50:56John Coogan?

  But, but I mean, I mean, you would think they have all the resources. They're a hyperscaler. They have GPUs in the cloud. They can do rendering and they're also somewhat platform agnostic. So any game developer could go to Stadia. It just seems like super additive. I'm sure you had intimate, you know, interactions with them as Stadia, as you were building the company. What do you, why do you think Stadia didn't take off?

• 1:51:18Speaker 08

  For sure. So I was at, I was at Google when they were working on it. That's probably, that's actually was, was sort of part of the basis for the idea.

• 1:51:25John Coogan?

  Yeah.

• 1:51:26Speaker 08

  I went into the office one day and there was a demo that an engineer had built where you could use Google's cloud technology to stream games to like basically a two generations old Android phone. So you run GTA on like a two generations old Android phone.

• 1:51:41John Coogan?

  Yeah.

• 1:51:42Speaker 08

  And I picked up this demo and I tried it and I completely lost my mind. I was like, we've seen disruptions in gaming across every single vertical, right? Business model, audio, content, but this has got to be the single biggest disruption in the history of the games industry, at least that I'm aware of in a long time. And so. That kind of became the basis for the idea behind Backbone. I basically made a slide deck on why I thought it would be like a really big opportunity for Google. And I sent it to the head of product for YouTube Gaming, and then I realized it could go a bit wider. So I sent it to a bunch of the vice presidents internally. And basically, a bunch of people ended up reading it, and it became one of the most viral slide decks internally in the company, like fifteen percent of the company read it by my last day.

• 1:52:26Speaker 08

  And so I got to meet with some of the executives that were working on Stadia and other initiatives. I think there's no doubt that this technology was incredible. But I think other players like Microsoft just had a better go-to-market strategy and more content.

• 1:52:38John Coogan?

  Yeah, that makes sense. I mean, the content's really, really key.

• 1:52:41Jordi Hays?

  Switching gears a little bit, how have you seen the industry react to the

• 1:52:49Jordi Hays?

  news last week around the App Store sort of payment policies? I imagine you've been hearing a bunch of chatter.

• 1:52:57Speaker 08

  Yeah, I mean, certainly if Fortnite were to return to the App Store, it'd be pretty big. I think it's been like

• 1:53:03Jordi Hays?

  It's under, it was resubmitted, right?

• 1:53:06John Coogan?

  It hasn't been approved yet. Normally, Apple approves and ninety percent of apps get approved in twenty-four hours. We're on like hour forty-six, so everyone's saying, "Apple, what's going on?" Dragging your feet, anyway.

• 1:53:19Speaker 08

  Yeah, I mean, I think it's huge. I mean, it means that if you're able to link out to external payment systems, you're basically going to be able to take in more margin as a game developer. And I think it'll, you know

• 1:53:31Jordi Hays?

  But how do you expect, how do you expect users to actually respond, right? So like, let's say you download a free game, and you're like, "Okay, I want to pay, I'm willing to pay for this game." And you get the option to just subscribe in the app. Maybe it's at one price, or subscribe outside of the app at a lower price, right? You'd have to offer, I imagine, have to offer some type of incentive to get somebody to want to go to a separate webpage, right? So I can go outside of the app and I get maybe some

• 1:54:03John Coogan?

  Instead of thirty percent, you're splitting the difference.

• 1:54:05Jordi Hays?

  You're splitting the difference, kind of, but then I imagine some users like the fact that their subscriptions are native, and they could go into the App Store and churn if they're not using something. And so how do you expect that? How do you expect developers to actually play it? And do you think it's, are they really getting back thirty percent? Or is it more like, you know, again, splitting the difference?

• 1:54:29Speaker 08

  Um. So I think what we're seeing right now and in Epic's implementation, they posted a tweet online like the Revenue Cat CEO replied to Tim Sweeney's tweet and was asking like, how did you implement this? Did you use in-app purchase? So in Fortnite's case, they show an option to do in-app purchase and they also show, you know, the web flow through Stripe or whatever. And that one is, you know, a 20% kind of cash back or something like that. You get like 20% back in Epic credits.

• 1:54:54John Coogan?

  Oh.

• 1:54:55Jordi Hays?

  Oh, there we go.

• 1:54:57Speaker 08

  So there's like an incentive. People might have to incentivize customers to transact through the web and that will.

• 1:55:03Jordi Hays?

  But giving them back in at free credits, like points in a game, which they're going to value on a cash basis.

• 1:55:09John Coogan?

  Tim Sweeney, absolute dog.

• 1:55:11Jordi Hays?

  What a dog.

• 1:55:12John Coogan?

  Uh, I, I want to talk about, uh, the, the actual, uh, technology roadmap or tech tree to make mobile gaming even better. What's more important? Uh, better devices, faster chips, more memory, better screens? Or just ubiquitous 5G, Starlink, better connectivity, lower latency? Um, because, uh, Call of Duty, you can stream it on your phone, probably Xbox, uh, Xbox Game Pass allows you to do that. There's still a Call of Duty mobile that's optimized for the phone. And I think people probably play that one more on their phone than the streamed one. And so we're still not in this fully streaming era.

• 1:55:53John Coogan?

  Uh, what are the, what are the blockers to get us to just one installation of the game everywhere?

• 1:55:59Speaker 08

  Um, so I mean, both of those things are bottlenecks and we, we often used to get in these like furious debates internally over like which one was going to overtake the other. And then we kind of realized after a while is a bit aimless because we just want the overall basket to succeed. And I think you'll see a lot of like hybridization where you'll have, you know, games that are relatively like thin clients, but like a very significant cloud component to them versus right now, we think of this dichotomy of like fully streamed versus native.

• 1:56:24John Coogan?

  That's interesting.

• 1:56:24Speaker 08

  And I think maybe there'll be, um, some games that flip across the boundary line. I mean, Fortnite is one such example that where you know, there's a pretty heavy cloud component, uh, to the, to the game.

• 1:56:34John Coogan?

  What are you playing right now?

• 1:56:35Speaker 08

  Right now? So I don't know if you've heard about Expedition 33?

• 1:56:39John Coogan?

  Oh, yeah, I haven't played it. I heard about it.

• 1:56:42Speaker 08

  I'm just about to get into that. That's been popping off on the internet.

• 1:56:45John Coogan?

  Yeah.

• 1:56:46Speaker 08

  I've been playing a lot of Fortnite.

• 1:56:47John Coogan?

  Yeah, that's good.

• 1:56:50Jordi Hays?

  Were you, what, were you surprised about the GTA 6 release date? It seemed like the market had been pricing in a 2025 release and then all of a sudden it was like, nope, 2026.

• 1:57:03Speaker 08

  Um, I mean, it takes, these games take forever now. The production costs of, there's some really great articles online talking about like how the development costs for these titles of balloon because of like this need to have really lifelike graphics and realistic gameplay. So not surprising, no.

• 1:57:21John Coogan?

  Uh, what about tariffs? I imagine that that was a tumultuous time for you. Obviously sigh of relief recently, but what's your outlook and what did it mean? Take me through the, the emotional journey of the last couple of weeks of the company.

• 1:57:38Speaker 08

  Yeah, I mean, definitely short-term painful. It was awkward timing, given, given the Backbone Pro launch, which just occurred this past week. And this is a huge launch for us. I mean, we generated, I think around 700 million media impressions, which is more than, you know, Beats and Aura and Sonos generated for recent product launches.

• 1:58:01Speaker 08

  And so it was a big launch and it was an awkward time because of the tariffs that made the pricing strategy a bit complicated. That being said, we think in the long run, anything that promotes, you know, free trade or reduces tariffs like globally is beneficial to the company because then we can offer our products in more markets than we do today at, you know, more of a fair price to consumers.

• 1:58:23John Coogan?

  Yeah, I gotta pick up a Backbone Pro. I'm looking at it right now. I'm adding it to cart.

• 1:58:27Jordi Hays?

  John has always said the biggest risk to the show is that he just gets sucked into some, some.

• 1:58:32John Coogan?

  It's like my one vice. Like you'll never find me like passed out drunk, but you will find me like 70 hours into like Metal Gear Solid for the third time.

• 1:58:42John Coogan?

  Anyway, this is fantastic. Anything else?

• 1:58:45Jordi Hays?

  Yeah, no, I'm happy for you and the team that you get a little relief on the tariffs. And congrats on the new launch and good luck. I know you guys are shipping in about a week now. So I'm sure there's a lot of work to get to that point.

• 1:58:57John Coogan?

  Head over to backbone.com, pick one up if you're a gamer. Check it out. Anything else?

• 1:59:02Aaron Ginn?

  That's all. Thank you.

• 1:59:03John Coogan?

  We'll talk to you soon. Have a great day. Bye.

• 1:59:07John Coogan?

  Speaking of sleeping easier post tariffs, Eight Sleep, go to eightsleep.com, five year warranty, 30 night risk free trial, free returns, free shipping, Pod4Ultra. I got an 88 last night, seven hours and 11 minutes. Not too bad. What'd you do, Jordy? Did I beat you or did you smoke me? A hundred, a hundred. He knows Brian Johnson's coming on the show. He's prepping.

• 1:59:28Jordi Hays?

  Proof of work.

• 1:59:28John Coogan?

  He's prepping. Anyway, we have our next guest coming in.

• 1:59:32Jordi Hays?

  Put it up, put it up.

• 1:59:34John Coogan?

  100.

• 1:59:35Jordi Hays?

  See, it's not a screenshot. I'm moving it around. There you go.

• 1:59:39John Coogan?

  Yeah. The new app is beautiful. Go download it. Anyway, folks, we got Aaron Gin coming in, breaking down a new Wall Street Journal article.

• 1:59:46Jordi Hays?

  Boom.

• 1:59:47John Coogan?

  Aaron, how you doing?

• 1:59:48Jordi Hays?

  He's back.

• 1:59:49Aaron Ginn?

  Yeah, doing well, man. Can you put on those sunglasses, Jordy? I can't recognize you.

• 1:59:53Jordi Hays?

  Yeah, yeah, yeah. These ones, these ones, the Pit Vipers. Unfortunately, so there's some crypto, there's some crypto coin that people are using Pit Vipers to promote. So we gotta be careful.

• 2:00:05John Coogan?

  We do have to be careful.

• 2:00:07Jordi Hays?

  But they were sent to us from a

• 2:00:10John Coogan?

  From the CEO, I think.

• 2:00:10Jordi Hays?

  From the CEO of Pit Vipers. He just likes TVP and he said, have some Pit Vipers.

• 2:00:14John Coogan?

  It's pretty cool that they like rotate up and down like this.

• 2:00:17Jordi Hays?

  Yeah.

• 2:00:17John Coogan?

  I've never actually worn any of these.

• 2:00:20Jordi Hays?

  Anyways, it's great. It's great to have you on.

• 2:00:23John Coogan?

  Always great.

• 2:00:24Jordi Hays?

  The Prime Intellect CEO was on earlier and he said that you guys are working on some stuff together. Which is cool.

• 2:00:29Aaron Ginn?

  Yeah, yeah, yeah. Yeah, like they're handling the higher level like training layer or doing the underlying infrastructure distributed layer. But they, yeah, like going back to

• 2:00:39Aaron Ginn?

  About the op-ed that I wrote, I've been more or less battling slash encouraging the administration to take a more reasonable approach to the threats that Huawei has against our dominance on AI. And when I met and know the people who under my administration that wrote the January 15 ruling that we don't really know, by the way, like what's gonna happen. We just heard rumors that things are gonna change and they're gonna be more positive towards Jensen and Nvidia. But generally speaking, they wrote this kind of the precursor framework that people didn't understand is they created a G18 of AI countries, which included like Japan, South Korea, Taiwan, America, Canada,

• 2:01:23Aaron Ginn?

  and some European countries, about half of Europe. And the original Biden ruling, probably these are bureaucrats, like there's not, there's no, it's not, it's very vague law area under governance. They're basically operating under 1980s missile technology proliferation law that was written back whenever we had Soviet Union. But, but, so they're kind of regulating that and the Biden administration, you know, a couple of days before they're leaving, decided that they would create this kind of G18 of countries and then a hundred-ish other countries that were gonna be basically prohibited or require a license. And then, you know, absolutely no good countries, Tier 3. The Tier 3 countries are quite logical, right? They're like Libya.

• 2:02:06Aaron Ginn?

  Venezuela, right? It's like, oh, okay, this makes sense. But the Tier 2 countries that required license was like Greenland, Portugal, you know, Switzerland, Austria. All of Eastern Europe was on the crap list. All, you know, the president's right now and Jensen's in the Gulf region, all of that was on the crap list. And then like kind of random countries like Mexico, Mexico makes all of our servers. And the original kind of premise around this was regulating cheap power. So it was mostly anti-competitive. They didn't believe that Mexico had to be used or was into China. They just thought, oh, they have cheap power, so we should just, you know, say, oh, that's bad for America. And so I've been advocating for this kind of idea of like this Newman-Roe Doctrine, thinking that AI is more of a forward operating base of America.

• 2:02:50Aaron Ginn?

  Due to the neocons and neoliberals, we have over 300 operating forward operating bases of the world, where our special forces are, you know, active and doing things that they don't tell us. And so I basically have been trying to like kind of, you know, think about the AI as kind of something similar. The every deployment that is an American deployment is real estate that we own. And that running the world growing like growing on our infrastructure is better than growing on Chinese infrastructure. And it's either or. And I think that under the Biden administration, there was this view that they couldn't do anything. Like, oh, they just make icons. They're not to be overly tricked, but they I think they had a kind of a less view where China was. And as the data came out with more and more advancement on the ascent line under Huawei,

• 2:03:35Aaron Ginn?

  more advancement under DeepSeek and Manas, it became very much clear that this actually was a race and that they were significantly closer than we thought. And so the goal then is proliferation. And that's essentially what the Trump administration, the Congresswoman announced last week was that they are going to embrace a trusted proliferation model, which is what I've been advocating for this for deployment of Nvidia gear running on an infrastructure or running on our frameworks, because it's either us or them. Either the world uses dollars or uses something else. Like, there's not this kind of secular world where trade happens and it doesn't include a country, it involves us or involves somebody else. And and that's becoming more socialized and more accepted.

• 2:04:18Aaron Ginn?

  And so now they're trying to think of other ways to try to advantage proliferation. Tom Cotton introduced a bill to G P track G P U's. Not very bullish on that, but you know, like, there are other ways now people are trying to think about doing this rather than just saying, hey, Portugal, you have good beaches, but no G P U's for you. Saudi Arabia, we can sell you F thirty fives, we can sell you even, you know, I C B M's, so no nukes on it. But hey, you can't get the Blackwell series. That's too risky for for us to do for you. So it's a great resetting that's happening. It's good for America.

• 2:04:45Jordi Hays?

  Yeah.

• 2:04:45John Coogan?

  Yeah. What is your take on the recent Saudi Arabia deal? Eighteen thousand Nvidia Blackwell chips going in.

• 2:04:53Jordi Hays?

  With hundreds of thousands.

• 2:04:55John Coogan?

  Hundreds of thousands on the way. It seems like it's an affirmation of everything you've been saying. But what's your interpretation?

• 2:05:01Aaron Ginn?

  Yeah, like, I think it's one way Huawei's already deployed there. So I think that was a wake up call. And there's also a ton of Chinese cloud companies that are doing deployments in the Gulf region. But, you know, it's positive because it's, again, it's, you have to realize that people are going to get this regardless. So another good framework is because this is all like leading edge stuff and people get confused about what's actually happening. They also overly express our actual dominance on a particular area. But but think of it as like a MIG platform versus Lockheed or Boeing. Like, you're not going to tell a country, hey, Well, you just can't have a fighter jet. They're like, we're gonna go get some mix. Right? We're gonna go get some, I forgot the name of the French one, right? That that drops, you know, uh, baguettes from the airport, right?

• 2:05:46Aaron Ginn?

  Whatever that French land, right? Whatever that that one is, right? Uh, it like, I forgot the name of it, but the, the, uh, so, so it's, it's like that. It's like, it's like, it's, it's an either or question. So, uh, we either have a decision to engage with the country or not, and then if they don't, they're gonna go somewhere else. And with Saudi Arabia, which is a very clear ally of ours, very clear ally, Israel, the leader in the region with Israel. Uh, we have to be in a position of, they understand this, like, like, like, the Gulf region kinda gets real estate and put crap in the, in the building. They kinda like, they understand that, right? And, and so it's something they can feel they can be very successful in. And as well as it gets to kind of the, the, you know, the Jeddah Tower, Burj Khalifa thing of like, we're ahead, we're winning the line, right?

• 2:06:31Aaron Ginn?

  Like all these like crazy projects that won't happen until, you know.

• 2:06:35Jordi Hays?

  Yeah, but our data centers, but, but our data center, uh, you know, and obviously Saudi will have fantastic partners in Nvidia. And I'm sure many other, uh, hyperscalers, uh, for their new AI factories. That's the new aim. We gotta stop saying data center. It's AI factories.

• 2:06:51Aaron Ginn?

  Yeah, tokens.

• 2:06:52Jordi Hays?

  But, uh, but, but yeah, isn't, isn't this not, is it, is it, is it correct to call it real estate today? Or is it something else?

• 2:07:02Aaron Ginn?

  Well, well, I, I think the dynamics behave like real estate, like that's how the actual investors think of it.

• 2:07:06Jordi Hays?

  And that's how they get financed. The execution is different.

• 2:07:10Aaron Ginn?

  Yeah, yeah. So, so I, like, the way that this blows out, what I believe is what like the premise of our model, why we're a part of like over about almost a dozen seven or eight, seven or eight projects. We're kind of the, for, for Nvidia, they, they advertise us to a lot of their growing data centers internationally. As Hydra is the best sovereign AI go-to-market, uh, provider in the world. So like, we're really, really good at this. And, and our operating model is, is much more, I think I mentioned this last time, to think of it as like the airlines industry. That, that the, the commercialization of AI is really resides in the platform. And that platform is Jensen. It's not anybody else. It's Jensen. And, and the, and that's just like Boeing.

• 2:07:53Aaron Ginn?

  And you have these kind of like rare birds that are coming out, which is OpenAI. But the technology mode around OpenAI, as we come knowingly accept, is relatively commodisable. So its real value is the brand. It's the accidental consumer product company has been Thompson, like I said.

• 2:08:10John Coogan?

  Yep.

• 2:08:10Aaron Ginn?

  So when you have the commercialization happening at the platform hardware layer like Boeing, you create lots of billion dollar companies, you know, American Airlines, et cetera, Emirates, whatever. Uh, but you don't really have this uh, parabolic power law outcome like you had with software defined nodes like Google or Airbnb or Twitter or something to that effect. So when you have a world of works like that, Jensen becomes the play. Jensen is the platform. You can still create lots of different successful companies that are very large. But I, I'm very sceptical. You're going to see this huge outlier into the stratosphere like we saw with other software defined nodes. Rather, it looks more like the airlines industry where there's lots of very successful people, lots of very successful, uh, you know, winners, but there's no clear category leader.

• 2:08:55Aaron Ginn?

  There's no clear, like so far ahead that nobody, nobody kind of will ever touch it. Because the fundamental product is a product that gets deployed in a data center that gets run and commercialized and all the value is created there. And everything else just kind of plugs into.

• 2:09:08John Coogan?

  It's the fastest way to become a millionaire. Start as a billionaire and buy an airline.

• 2:09:12Aaron Ginn?

  Yeah.

• 2:09:13John Coogan?

  Yeah. This is a famous thing because like, yeah, the value doesn't really accrue to the airlines in the way that it does to consumer tech companies, of course.

• 2:09:21Aaron Ginn?

  Yes.

• 2:09:21John Coogan?

  Uh, I want to talk more about uh, this, this idea that like it is valuable to America to have uh, foreign AI models running on American infrastructure. Uh, and maybe we could go back to the F-35. If we send an F-35 over to another country, they have the ability to use that however they want. We don't really have control over that. We don't necessarily have a kill switch. Uh, obviously it's good economically because we sold it to them. We get some money. Uh, that's nice, but uh, is there, is there, is there some downstream benefit to, well, now we're really allied with you because yeah, we sold you the planes, but you're still going to have to remain friendly with us as we resupply

• 2:10:03John Coogan?

  and send you more screws and bolts to, to maintain these planes. Is there a similar analogy in AI factories or data centers where sure, yeah, you bought 18,000 Nvidia Blackwells, but if you don't keep working with us. Those are gonna die. You're gonna need to replace stuff and you need to keep us an ally. Is that the goal?

• 2:10:24Aaron Ginn?

  Yeah, like that's my goal because I believe America should win. I don't, I don't believe in a multipolar world. I believe in the Newman Road Doctrine. I believe that we should reshore to the Americas. And, and some of that will be here, some of that will be Mexico, some of that will be El Salvador. We're already, you know, monetizing El Salvador with prisoners. So like, why not then make fiber optic cables? Why don't they make fans? Why don't they like for in the, in the service supply chain or textiles? Like Mexico is the cheapest place for us to manufacture. It's been that way for over a decade, but they don't have the technical capability to do it, which is why you don't see that there. But, but in the Newman Road Doctrine, uh, my, my thesis is that we reshore critical things to the Americas. And then we have these, we have these external allies that reinforce that, just like the old Monroe Doctrine,

• 2:11:07Aaron Ginn?

  was Americas and we had Britain that enforced it and with us. And so the same thing goes with the Ring of Fire from South Korea down to Singapore. That becomes our allies in that region. We ship America goods there. They become America enclaves. But they're relatively sovereign. They're, they're, they have their own identity, their own military. And, and partnerships like that not only advance, you know, like you said, like sell goods, like there's announcement with the Boeing. Like, I mean, they already bought Boeing, like, so it wasn't, it both Riyadh Air and Saadia, they're, they're Boeing platforms. They don't, they don't have as many Airbus is out there because Airbus has a, is a, just so you know, like the, this is a very technical thing, but their engine design is not really compatible with sand that well. So that's why they, they prefer Boeing because it's more adaptable to high heat.

• 2:11:50Aaron Ginn?

  So like either way, like that, that's an advantage to us because it's a form of soft power that we can allow the proliferation of not only safety for Americans globally, but it makes us rich. Like trade is American. It's not secular. It's not something that just happens. Like if we define it, the dollar is a platform, trade is us. We define, we, we rule the open options because we say that it's important for us to trade. So I, I, there's kind of like this weird thing happening on the right that there's like these two types of like China hops. There's like OG China Hawks, which is like me, who believe that the way you beat China is you win. Then there's this new China Hawks, which are like protectionist, semi-socialist, and want to withdraw from the world. They believe in a multi-billionary world.

• 2:12:35Aaron Ginn?

  And, and they kind of crept in, but they're actually a little, they're more on the left side of the spectrum. And the tariffs and kind of attitudes around Nvidia, that's when you hear these things of like, we shouldn't sell. The world like kind of can wait on us, or we don't need their goods, we shouldn't trade. Versus the original OG China Hawks were like, no, we should trade, trade is peaceful, it's great. It decompresses issues between countries, but it doesn't mean we give away the farm. It just means that we rebalance and we make it fair. And, and it was kind of this hot minute where it's like, these like new Neo China Hawks got in charge. And started doing these kind of crazy things with tariffs where we had no freaking idea what was going on.

• 2:13:15Aaron Ginn?

  Like believing that tariffs make us rich is one of the most profoundly illiterate things like I've ever heard from. I have backgrounds in economics, but, but like it's, it's literally stupid. The places that have highest tariffs in the world are absolutely poor. And the places that make.

• 2:13:30Jordi Hays?

  But it's the external revenue service.

• 2:13:32Aaron Ginn?

  No, I get, I'm, I'm pro that, right? Because I don't want to pay taxes, but taxes are fat, right? So the, the, but I'm, I'm willing to engage in some type of febrary if it means that I'm safe when I go to, I just came back from Belize, but I'm safe when I go to Belize, I'm okay, I'm okay engaging in that. Uh, but, but America only wins when we have this peaceful economic transaction that occurs with countries that want to adopt more pro-Western frameworks. We should support that because when the world becomes more West, it becomes safer, it becomes more prosperous, people have rights.

• 2:14:05Jordi Hays?

  We had Sam, uh, from Impulse Stoves on, on earlier, and he was saying that free trade is almost becoming a liberal policy. You know, it's a liberal position now to just be like, free trade, you know, just because as from a reactionary standpoint. Uh, I'm curious if you, uh, what you're expecting out of the Qatar visit, which I believe is happening in the next. Forty-eight hours?

• 2:14:30Aaron Ginn?

  Yeah, like I it was a Qatar, we we've already been talking to the royal family there like they they definitely want to get in GPUs there. There have you ever been to Qatar, by the way, it's so it's you have you have?

• 2:14:42John Coogan?

  Yeah, briefly.

• 2:14:43Aaron Ginn?

  It's it's absolutely bizarre. It's a imagine like the largest country club in the world as a country. And there's like, everything is clean and well done, but like in the street and you're walking, it's mostly just like servants. There's like no people. It's like it's it's very weird. Um, and they have so much money. It's it's it's they they they even build like up with the Qataris, right? There's only, I think, three hundred thousand uh total citizens and the total number of like the broader servant class is like around three million uh in the actual city. Uh, but they're so wealthy, they have they they do these, um, you know, sand dune thing, uh, which everyone to go do. And they build these homes in the middle of the desert, like these massive camps.

• 2:15:24Aaron Ginn?

  And they just like have these hundred thousand dollar, uh, uh, they just going up and down sand dunes all over the place. Or there's like these huge camps. It's like they have so much money.

• 2:15:32John Coogan?

  So.

• 2:15:33Aaron Ginn?

  Uh, and they're they're trying to get into.

• 2:15:36John Coogan?

  Yeah.

• 2:15:36Aaron Ginn?

  Uh, power and energy as well as the data centers, but that but there is a there's a tricky problem, which is that they have a habit of of being anti Israeli. Uh, obviously, something happened to Benji and Trump. Nobody really knows. But something happened, uh, you know, and Benji could not be the most friendly, uh, you know, person to deal with. Uh, so something happened there. Yeah, but the Qataris like they think themselves as like the Switzerland of the region. In reality, they're just more pro Iran and pro pro Al Qaeda. Um, and and so that that's a that's a the the one thing I'll never underestimate is that the ultimate goal of every Trump. You know, conversation is a deal. That's what he loves. He loves deals.

• 2:16:18Aaron Ginn?

  And and so us being particular hawkish on any type of country, I think, is kind of not who we voted for. It's we voted for somebody to make deals for America. And that includes a jet, which I don't know if it does or not. I I heard it was.

• 2:16:31John Coogan?

  It's a rumor.

• 2:16:33Aaron Ginn?

  Yeah, yeah, it was a new S747 or something like that.

• 2:16:35John Coogan?

  Yeah, it just it seems like a rumor at this point, like no one really knows one way or another what's happening with that, but it's interesting story, certainly.

• 2:16:41Aaron Ginn?

  No, I had no problem like he went to go see Kim Jong-un, like whatever.

• 2:16:45John Coogan?

  No, no, I completely agree with this. That's a great take.

• 2:16:47Aaron Ginn?

  Yeah. So like, I have no problem meeting with people. And if that means more, I want them to be more pro Israeli and I want them to, they will get their release last American. That's a win for our country.

• 2:16:57John Coogan?

  Yep.

• 2:16:58Aaron Ginn?

  And that's what I voted. I voted for Trump and I wanted him to do deals. I wanted him to break the mold, reset relationships and make it more pro.

• 2:17:07John Coogan?

  And create more allies, like swing more people to our camp, regardless of the history, figure out how to do deals and build more allies in the American sphere. I want to talk about the learning curve Huawei versus Nvidia specifically. Is that a dynamic here with pushing Nvidia chips abroad? Is there, is there value from actually advancing the technology, staying on the cutting edge just by increasing the volume of shipments and manufacturing? We've obviously seen there's a TSMC on the learning curve. But, but what is your take on the Huawei ascend versus Nvidia hopper, Blackwell kind of fight that's unraveling right now?

• 2:17:52Aaron Ginn?

  It, Americans didn't realize that like, like lithography is not like a white technology. It's not like white people like own it, right? It's a technology map that's available to anybody that can work on it.

• 2:18:02John Coogan?

  Sure.

• 2:18:03Aaron Ginn?

  And their, their ability, yes, it's not TSMC level, stretched, they're probably a five nanometer, they're more likely at seven, but probably stretched to our five. TSMC is at two, it's about to go to like, you know, 1.5, I think, or something to that effect. But, but the thing you don't ever underestimate is that China, from a, from a supply chain perspective, is almost completely sovereign. Not only do they dominate reverse, but they have the entire manufacturing infrastructure to make Huawei.

• 2:18:28John Coogan?

  Yep.

• 2:18:28Aaron Ginn?

  And, and that is a type of competitive advantage that we don't want.

• 2:18:32John Coogan?

  Yep.

• 2:18:32Aaron Ginn?

  And, and so now again, like, it doesn't mean we become central planners and like drift into, you know, Linus or Trotsky thinking that like, oh, we should just essentially plan this entire thing. Like, that's not my view. I, my view is comparative advantage. It works. Like, as, as Jordi was saying, like, all of a sudden liberals remember that Adam Smith exists and, and you know, that TDS has benefits, right? Is it, it pushes people to, because it's not a philosophy, it's a, it's a, it's a psychosis. So. Yeah, yeah. So it doesn't have an orientation. It's just not that thing.

• 2:19:04John Coogan?

  Yep.

• 2:19:05Aaron Ginn?

  Uh, but, but you know, like we, we have the ability to, to win because we still are the best. But, but they're just going to take a different approach. Like they're going to take advantage of their, their power. They're going to take advantage of the fact they move fast and they're cheap. But the new AI Belt and Road Initiative has already started. They're already around the world. We know this. We see them at, you know, different data centers that we work with. Selling their stuff and it comes as a fully complete solution with deep seek, open sea, like a, a Manus models. Combined with infrastructure, combined with support.

• 2:19:37Jordi Hays?

  Manus has, has that kind of distribution already?

• 2:19:41Aaron Ginn?

  No, like Huawei is designing for their, their, their open source ecosystem. So Huawei is being the hands of heat out there building.

• 2:19:49John Coogan?

  I think what George is asking is like, have you ever run into a country that's not China? That's like, yeah, we're, we have Huawei Ascend and then we have DeepSeek and then we have Manus. Because Manus came out of nowhere just a couple of months ago. Feels like that would be a very quick ramp to be like, it's deployed in another country as a part of the AI Belt and Road Initiative.

• 2:20:07Jordi Hays?

  DeepSeek, I can believe Manus, I would give it.

• 2:20:10John Coogan?

  So yeah, give us the update on that.

• 2:20:12Aaron Ginn?

  Yeah, yeah, yeah. It's deployed, like DeepSeek and Manus are everywhere in Europe. Like they're, they're everywhere. And again, it's open source. It, it, open source works as a distribution strategy. They're not open source because they give, they, they try and care. They don't care about open source. They care about defeating us. And, and, and so the, the approach that, this is why, uh, OpenAI made that announcement of we're going to do like this combined deployments of software plus like infrastructure is because that's, they're mimicking what China's doing. But, but the proliferation of the open source models, go look at OpenRudder. Like you can just see the growth in other models. Those other models are Chinese. So, so it, it, it's a, it's a race that actually is legitimately an arms race where there's not much of a. Uh, like, like, what is the ceiling, right?

• 2:20:57Aaron Ginn?

  Like, if, if, we have to kind of think of it as, imagine your multiple countries that someone invented a new technology like the nuclear weapon. Like, you're, the reason why UK, France, Israel, USSR, India, ex- base of proliferation that happened was because America said, no. We're not gonna give you any intel, even though we promised, by treaty, actually, that UK and France would have our intel after Oppenheimer did what he did. And then that's what started the race is like, okay, well, we can't just have America have it, we need to have it, right? And so what is the actual breakpoint at which all of it stops? It's like, how do you, it's like, it's like, it's a kind of different, it's not an economic question, right? It's, it's a doctery question.

• 2:21:37Aaron Ginn?

  Uh, and that's why the Gulf region announcements are really exciting, is because fundamentally that region is gonna serve Europe. It's probably not gonna serve America, it's really gonna serve Europe. Because they could say all they want, they wanna build this many data centers or whatever, but the, trying to make the EU do anything is, is, is, you know, it's trying to convince an obese person to stop eating, they're rather just use Ozempic. Like, it, it, it's not gonna go anywhere, like, they, they, they need some kind of, like, injection to finally do something. And the Middle East region and Gulf region is just really good at this stuff. They're good at real estate, building power, deploying crap. And, uh, in it, in the airlines world, that market is dominated by Europeans. Europeans use Emirates and Qatar to fly to Asia, to fly to the region, I think it's gonna be really similar.

• 2:22:22Aaron Ginn?

  So we're able to dominate Europe through those, the, those relationships. Uh, but, but if we're, if we weren't gonna do it, my guess is like a year or two Huawei would have some big announcement of doing with, probably Qatar, probably the country I'd think of first, uh, maybe Kuwait. Um, but, but yeah, and we still have the lead, but we have to realize that Huawei is gonna make inroads and places that we have decided to not. And we just have to accept that, uh, we, we can't stop. Yeah, I'm trying to give another like.

• 2:22:51Jordi Hays?

  How did the how did the Manus investment from benchmarks sit with you? A lot of people that are a lot of people have pretty much everybody has an opinion.

• 2:23:00John Coogan?

  Jali and Asperu have are upset about it.

• 2:23:02Jordi Hays?

  Yeah, everybody's got an opinion on it.

• 2:23:05Aaron Ginn?

  Yeah.

• 2:23:06Jordi Hays?

  But there's varying.

• 2:23:08John Coogan?

  A lot of new comments, actually. I think everyone has an opinion, but not everyone's willing to share them.

• 2:23:12Jordi Hays?

  A lot of people have opinions offline.

• 2:23:13Aaron Ginn?

  Oh, really? Why not share it?

• 2:23:15John Coogan?

  Oh, it's because of like competitive dynamics in benchmark. They don't necessarily want to talk trash about another firm.

• 2:23:16Jordi Hays?

  I mean.

• 2:23:18Jordi Hays?

  Yeah, if you're competing. Yeah, and I think that's the right stance generally for the most part.

• 2:23:23John Coogan?

  But.

• 2:23:25John Coogan?

  Yeah.

• 2:23:25Jordi Hays?

  Unless you're down.

• 2:23:27Aaron Ginn?

  I mean, no, I mean, I mean, I don't care. Like, we could free change it. If if if they want to do that, that's the prerogative. If the Georgia Department wants to, you know, go after that investment, as I told me they're going to, that's their decision. Like, is this a free market, free exchange of ideas? I believe your capital is your capital. And if you want to deploy it to a Chinese model, then would I question your patriotism? Probably. But, you know, it's your right to do that. And and it doesn't need to go much farther than that. I mean, Manus has serious adoption. And we should think of it as, I think that's how maybe Benchmark would think about it, is like, you know, one, that they're going to create, you know, a TikTok style like relationship. It's not real. All this stuff is a figment of our imagination. Think it actually matters to Chinese? It doesn't.

• 2:24:08Aaron Ginn?

  But it's that that's just an excuse. The reality is like they they want to win. They want to make money. And in some respects, I understand that. And we were capitalists here. And in another respects, you had to think about it from the the patriotism perspective of like, we're not really interested in it. One thing to like, maybe even allow GPUs to be sold there, which is going to happen. And by the way, GPUs are all the trade deals include GPUs, man. Like, to think that that we're really that serious about like, we don't want them to have infrastructure. It's like, it's it's it's total baloney. Like, they it's such an easy gift for the administration. We're the best. We want to make a crap ton of money.

• 2:24:47Aaron Ginn?

  We like that Nvidia is rebuilding here. It's an easy give. It's not it's not it's not even hard to to debate over. It's like, oh, you want that? Sure. Now give me reduction of ethanol. Or give me. You know, stop tariffing auto imports by 100%. Like, that's the stuff they really care about. So this is an easy win. Uh, but, but there will be a, uh, like a separation is happening to where China clearly is embracing and winning open source. They will have comparable advantage, uh, sorry, uh, uh, uh, at least a reasonable alternative on Huawei, probably in like 12 months. Uh, which will basically be like an H100-ish. Uh, and it'll be cheap, large scale, easy to install, all open source.

• 2:25:30Aaron Ginn?

  Uh, so the, the next phase, if we want to actually win China, is what the Trump administration is doing now, which is trusted proliferation. The second phase, like, we gotta get serious about open source. And we have to be, we have to be very intentional that the closed model thing is just not gonna work. It, it, it's not a, it's not a serious durable mode. I think most investors would probably agree with that now. It's a myriad of models approach.

• 2:25:54Jordi Hays?

  Yep.

• 2:25:54Aaron Ginn?

  Uh, and we, we have to be in this game. Otherwise, it, it doesn't matter if, if, uh, we have the best infrastructure in the world. If the LLMs themselves are all closed, on closed door, which is never gonna reach this traction, which is never gonna reach this level of adoption. And there are, there are so many levels of advantage China has on open source right now. Uh, that, that we have to be serious.

• 2:26:17Jordi Hays?

  What are you expecting from Deep, DeepSeek R2? We've been, we just asked the, the Prime Intellect CEO that. He had his own take. What are you expecting?

• 2:26:27Aaron Ginn?

  I, I think you'll be, uh, the rumor is like mostly on Huawei. I haven't validated that. That's the rumor I keep hearing. Uh, it probably again will be very good, uh, because this is accessible. This is math. It's open research. It's, uh, it, it's like physics. It's like, it's like thinking that we can control physics. Like, if physics is available to everybody, uh, to explore and discover. Uh, I think it'll be very good. I think, I think it's a Quinn 3.5 was very good.

• 2:26:51Jordi Hays?

  Yep.

• 2:26:52Aaron Ginn?

  Uh, and Manus just had an update again. It shows that. I unless we were heavily invest with, I guess, you know, Gemini or or or Lama to really like up their game that Europe's and they continue to use that the Middle East is continuing to use it.

• 2:27:07John Coogan?

  Yep.

• 2:27:07Aaron Ginn?

  Um, and it just is what it is like we we can't stop people from doing this stuff. Uh, it it's available to everybody.

• 2:27:14John Coogan?

  Yeah. So I mean, walk me through this hypothetical scenario where uh let's just use like Switzerland as an example or something like Switzerland. Uh, wants to control their own AI for their own population. So they build Swiss GPT.com. And every Swiss citizen is going there as the front end to their AI experience. Uh, and but that in one scenario, you know, that is run on air gapped Huawei ascend data centers, running deep seek and Manus to actually do the computation. But the data is not being exfiltrated. Uh, what is the risk there? Is it just that we're losing the economic power from selling into Swiss, the Swiss, the Switzerland market?

• 2:27:58John Coogan?

  Or or is are we worried about some sort of like Manchurian candidate in the weights shifting the minds of the Swiss population? Or something like that? Like, what what is the risk of the power accruing in that scenario?

• 2:28:11Aaron Ginn?

  I mean, I I I don't really worry much about like, everyone knows it happens in 1989. Like, you don't need your canvas score happen. It's not them when deep sea tries to delete itself like.

• 2:28:21John Coogan?

  Yeah, yeah, yeah.

• 2:28:21Aaron Ginn?

  Everybody knows, right? It's very obvious. Uh, like, you know, is President Xi, you know, Winnie the Pooh? Would possibly be like, you know, we don't really know, right? He did so. He did disappear for six months after COVID. So if he's Winnie Winnie the Pooh in a little outfit. So, uh, yeah, like the the the issue with the I what I believe about sovereign AI is that mostly the content of the internet is American English.

• 2:28:46John Coogan?

  Yep.

• 2:28:47Aaron Ginn?

  The estimates are like 70%.

• 2:28:48John Coogan?

  Yep.

• 2:28:49Aaron Ginn?

  Uh, so that's most of the training data.

• 2:28:51John Coogan?

  Yep.

• 2:28:51Aaron Ginn?

  Although if you look at the proprietary data, what does that mean? I just did it.

• 2:28:56John Coogan?

  This is good news.

• 2:28:57Aaron Ginn?

  Seventy percent of the internet is.

• 2:28:59John Coogan?

  Is American.

• 2:28:59Aaron Ginn?

  Oh, America.

• 2:29:00John Coogan?

  Yeah, we're just excited about that.

• 2:29:02Aaron Ginn?

  The the, uh, uh, so so they they so they can like sovereign AI. What is the data that they're going to be training on? Yep. And because if the internet is English, American English, it's our slang, it's our, you know, it's our, the second is Spanish and the third is Mandarin. Yep. It's, it's actually government documents. Hmm. That is how most people are training, the governments are training their own subset, sovereign AI, legal cases, law, right? And none of that crap is going to Amazon, none of that crap is going to Corey. Like they're, they, they're going to build that to, to their liking. Sure. So then, okay, so what is the end, end use case? I, one is that it, most of this is mutual search destruction sort of frameworks. Hmm. That if Switzerland doesn't do it, then maybe Austria does.

• 2:29:44Aaron Ginn?

  And if Austria does it, they have a leverage or Switzerland, so it's like, well, I can't have that, so I have to do that. Hmm. Think of it as, um, uh, did you ever watch show Billions? Yeah. Uh, I love that show. So, so Axelrod, right? Everything he thought about was like both him, it's like, it's like two lanes of thought. It's like him winning and him not being owned by one of his competitors. And that's the way G, uh, GPUs and AI works. It's like, it's like, I think even from the perspective of like, sure, it was an advantage to my, my country, like Axelrod doing investment. But most of it's just like, I want to screw over that other person. And, and, and, and investing like traders today, they're doing GPUs AI stuff. Not necessarily because Nissai has a return today, because they're trying to figure out, is someone going to screw over me somehow?

• 2:30:27Aaron Ginn?

  Because when you, when you put something into an LLM, it's immediately, uh, uh, everywhere, right? Like anything now, like private information that is even more valuable than ever before, because LLMs make information so accessible. Yep. And can substantiate content even easier. And, and so private information becomes significantly more valuable. And so how Switzerland would deploy that, in my view, would be basically buying other people to, uh, providing an alternative within its own government about like how to actually use LLMs internally. Uh, and so it, that the, I, I think we as Americans need to just kind of take, take a step back and realize that not everything the world does has to make money. Uh, people just kind of do stuff sometimes because they think they should do it. Hmm.

• 2:31:11Aaron Ginn?

  And, and how, we as Americans, we don't really get that. Like it's, it's hard for us to kind of put our hands around. So commercial. Uh, but they, yeah, like, exactly, it's like, like the, we were so far away from Reagan, where we just, uh, built crap because we're like, Soviet Union could do this to us, we're just gonna do it.

• 2:31:29John Coogan?

  Yeah.

• 2:31:29Aaron Ginn?

  We're so far away and we're so dominant for so long that we're lazy. We're self-absorbed, lazy people who think that Pope Leo had, you know, is a Chicago Democrat. It's, it's, I'm not a Catholic, but he's certainly not. And like, oh, he said this about immigration. And I'm like, do you know anything about Catholic doctrine? Like, do you read anything? Like, do you know, like, it's, we, what I mean by that was that we define so much international dialogue by America's framework.

• 2:31:58John Coogan?

  Sure.

• 2:31:58Aaron Ginn?

  When the world doesn't work that way.

• 2:31:59John Coogan?

  Yeah.

• 2:31:59Jordi Hays?

  Yeah. Uh, real quick, I want to have a couple, a couple more questions and then we have a, a pretty hard stop here. But, uh, who is going to be the American open source AI front runner? Uh, XAI did an open release of Grok one.

• 2:32:17Aaron Ginn?

  Yeah.

• 2:32:17Jordi Hays?

  OpenAI is planning to have some strategy around open source. Uh, do you have any type of, you have any expectations here?

• 2:32:28Aaron Ginn?

  I, I don't think it'll be OpenAI. Uh, I think it's either going to be Zuck, Elon, or somebody else that we just don't know about yet.

• 2:32:36Jordi Hays?

  Yeah, cool. Uh, last one, uh, do you expect to be satisfied when a TikTok deal gets announced? Or extremely disappointed because the rumors that we've heard so far are that, uh, it doesn't necessarily get at the core issues.

• 2:32:54John Coogan?

  What's wrong with that?

• 2:32:57John Coogan?

  Inference is the important part, right?

• 2:32:59Aaron Ginn?

  Yeah, that's a good question. Uh, so do I think it's propaganda? Oh, absolutely. Do I think it matters in terms of the trajectory of our culture? No. They like, like creating blaming Chinese, oh, good boogeyman. But like on the fact that our kids are lazy and stupid is, is asinine. It's, it's classic like white guilt, sort of ducking Freudian frameworks. And like, the reason why isn't, it's actually, you know, like your kids will actually be fine. They're, they're leaning very heavily libertarian, so they're actually good. Just kind of like. Late millennial, uh, cause I'm a, I'm a midlife millennial, so I'm more Gen Xer. But it's kind of like late millennial and early next gen, uh, that are very Marxist in their kind of like frameworks.

• 2:33:44Aaron Ginn?

  And they've been told things about their, well, objectively lies about our country and how like life works and success works. And yeah, I feel bad for them, like, cause they were told things that were not true. Uh, but like saying that, oh, the reason why, you know, Chinese kids are doing math because TikTok like encourages math is, is, is, is pretty stupid. Like it's like, it's like, no, maybe you're just like.

• 2:34:06Jordi Hays?

  No, my, my frustration was, uh, you know, if you're, if you're in the middle of an ideological war, trade war, you know, sort of great power conflict, we're not, you know, multi polar is not possible. It's just sort of like the US or, or nothing. Uh, why would you allow your adversary to own what is effectively like the, one of the largest news channels into the US population? And why would you kind of ignore that, right? Cause even, even, yeah, getting, uh, you know, delivering brain, brain rot. Like Americans are going to get brain rot from somewhere, right? And they have an insatiable appetite, but I'd prefer to be, no, I'd prefer to be an American made brain rot.

• 2:34:51Jordi Hays?

  No, but the, but the, you know, you know, the, these platforms do influence public opinion and, and, but anyways, probably a longer conversation. We'll have you back on when the news gets announced and, um, always a pleasure, Aaron.

• 2:35:05John Coogan?

  Have a good day.

• 2:35:06Aaron Ginn?

  God bless, guys.

• 2:35:07Jordi Hays?

  Cheers.

• 2:35:08Aaron Ginn?

  I want a hat. Jordy, I want a hat.

• 2:35:10Jordi Hays?

  Oh, I got you. I got, I got you. You get a jacket too. You're going to get the full, you get the full set. You're going to get the full set. Thanks, Aaron. Great chat.

• 2:35:17John Coogan?

  Talk to you soon. Bye. Find your happy place.

• 2:35:21Jordi Hays?

  Find your happy place.

• 2:35:23John Coogan?

  Book a wander with inspiring views, hotel-grade amenities, dreamy beds, top-tier cleaning, 24/7 concierge service. It's a vacation home, but better folks. Also head over to getbezel.com. Your Bezel concierge is available now to source any watch on the planet. Seriously, any watch. And our next guest is Dan Gray. I have been following him for just a few days, but I wanted to have him on the show. He's put out some fantastic posts about venture capital market dynamics and I thought it'd be interesting to have him on the show and pick his brain and have him break down what he's seeing in the venture capital markets. I want to talk to him about large scale of VCs, the cram down in the angel and seed market, all the fun dynamics. So, welcome to the show. Dan, if you're there, can you hear me? How you doing?

• 2:36:08Speaker 10

  Longtime listener, first time caller. Glad to be here.

• 2:36:11John Coogan?

  Yeah, great to have you. Can you take me through your, oh, actually first, let's kick it off with just the introduction. How, who are you? What do you do? Break it down for everyone.

• 2:36:20Speaker 10

  Sure. Yeah, I'm, you know, my, my kind of day job is head of insights at Equidam, where it starts at valuation platform. And that's kind of the perspective from which I come at all of this.

• 2:36:30John Coogan?

  Yep.

• 2:36:31Speaker 10

  I think what I'm, what I'm most known for is like long walls of text on Twitter about the venture industry.

• 2:36:37John Coogan?

  And what was the most recent long wall of text that you put out?

• 2:36:42Speaker 10

  Yeah, that was kind of like a summary of the, like, the last year or so of observations.

• 2:36:48Speaker 10

  Kind of like, not a very optimistic title, like the venture capital and ailing asset class, suggesting a lot of the challenges that we've seen.

• 2:36:55John Coogan?

  Yes.

• 2:36:56Speaker 10

  But it moves towards like solutions, you know, better practices, some ideas for how the industry can evolve. So, everybody comes out of it better, LPs, founders, GPs.

• 2:37:06John Coogan?

  So, what are the key cracks? Why is venture capital ailing? What are the key problems that you're seeing? What are the indicators? What are the metrics that you're tracking? Because a lot of people have been saying, we're so back, it looks really good, there's big funds, everyone's doing well, everyone's making money, it seems like it. So, this is kind of an odd take to see, but open to hear the argument, obviously.

• 2:37:28Speaker 10

  Yeah, I think kind of what we see at the moment, if you look very broad, big picture, is like stagflation. There is, I would say, less activity than before, but prices in concentrated areas are much higher. And for a lot of people, that's a very bad thing. You know, if you're a founder's fund and you can win on merit and get into any deal you want, you're doing fine at the moment. That's okay. If you're Andreessen Horowitz and you have the scale to buy into any deal, you're also doing fine. But a lot of my writing is is actually really aimed at like the middle of the market. GPs who, you know, could be doing better, maybe if they if like better practices were more accessible to them, or if the market was a bit more stable.

• 2:38:10Speaker 10

  Similarly, LPs who have a difficult time picking, you know, if they're not already in like the founders funds and USVs,

• 2:38:19Speaker 10

  how they can be guided towards better decisions and better returns.

• 2:38:23John Coogan?

  So, yeah, is this just affecting new managers who raised funds maybe during Zerp? Or are you seeing cracks in kind of the the legacy firms that have dropped out of the public eye? They're not as competitive, but they've been in the game for a decade. They have kind of an institutional structure. Maybe they're not raising multi-billion dollar funds, but they have a model where it's like, yeah, $300 million fund every two years. You deploy it, it's great business. All the partners are going to retire wealthy. Or is there risk for that type of mid-market VC firm?

• 2:38:58Speaker 10

  I think the the ones that are struggling the most at the moment are perhaps the ones that like haven't evolved as quickly as the market has shifted in the last year. So we've seen this this much talked about bifurcation into like what I call venture banks. So like Andreessen Horowitz and Thryves, et cetera. And the kind of traditional model of VC, which is, you know, contrarian investing, a bit more disciplined, you could say on on that front. There's a few people, a few funds kind of stuck in the middle, you know, and they're a midsize series A firm who's still trying to invest their in AI and they're having a very difficult time right now. So you kind of have to pick your lane a little bit these days and lean into the strengths of what those two different lanes offer.

• 2:39:44John Coogan?

  Did you ever read Everett Randall's post on like the Tiger Global and the and this and like the squeezing between, what was he calling it? He had some great phrase for it.

• 2:39:58John Coogan?

  Playing different games, why Tiger is eating your lunch and your deals. It was kind of talking about how Tiger and the crossover investors came in and they were just commodity capital that you just show up with a deck and get a term sheet same day and it was very much like venture bank versus the, how did he describe it? He said the, he described one of the funds as like JC Penney funds, which is very rude. That is the dead zone. So there's Tiffany and Co, which he said was like benchmark founders fund, like the really like prestige sequoias of the world, low velocity, higher IRR, main advantage is signaling, building a board of directors, but it's expensive capital.

• 2:40:41John Coogan?

  Then you have the Walmart, which was Tiger Global, higher velocity, lower IRR, but they're built to, to accept a lower IRR, although that didn't play out very well for Tiger specifically, but in theory, these venture banks are kind of playing this Walmart category. But the dead zone was the JC Penney where you're not super differentiated, sending a really strong signal to the market that we have picked the winner, they're going to the moon and so get in or get out, but you're also not super founder friendly, not taking a board seat, just dumping cash in a company. Is that dynamic still real in your mind? Has it grown or has, have things changed?

• 2:41:15Speaker 10

  Yeah, I think it's very real. It's definitely real and you can see that in a lot of the liquidity issues today. So you have, you know, the big like venture banks, let's call them. They're finding more opportunistic liquidity through, through secondaries for like the huge winners that they invest in who have the strength of brand and the size to generate a lot of liquidity in that manner.

• 2:41:38Speaker 10

  Where other VCs would traditionally get liquidity, IPOs and M and A, we all know has been very slow and that, that slowdown for a range of reasons, but it's part of, because the industry became so bloated and confused for a while. You know, hopefully, as this bifurcation is better understood, those more traditional managers are like teeing up companies for exits in a healthier way. You know, they better understand the kind of exit metrics you need.

• 2:42:05John Coogan?

  Yeah.

• 2:42:05Speaker 10

  As opposed to the venture bank model.

• 2:42:07John Coogan?

  Do we need to kind of redefine these terms of venture capital? Because it used to be, there was like angel investors, then venture capitalists that would do series As and maybe series Bs. And then there was growth equity, private equity. And then, like, yes, a hedge fund might take a large position in a late-stage firm, but they weren't seen as VCs. Now, you can have a VC firm that, I'm pretty sure there's venture capital firms that have never invested in a company at less than a $1 billion valuation. Because their whole business is, maybe we buy secondary, or we buy common, or we do growth stage, and we're really only trying to be along for the unicorn to $100 billion ride. And we'll do that all day long, because there's so little downside. And by the time we're

• 2:42:50John Coogan?

  investing, the company has durable revenues, is growing, product-market fit. So we're not even trying to underwrite the founder, or their ability to explore the idea maze. We're just piling in. But we still call that venture capital. And maybe that's, is that a problem? Or do we need to think about the market differently?

• 2:43:08Speaker 10

  I think it's definitely helpful to think about it as a slightly separate beast. You know, venture capital, in my mind, is finding the non-consensus companies. And then you fund them through into like legibility, into growth, growth capital, and ultimately to an exit. That's how you generate your liquidity. The new game today is kind of like this financialized version of venture capital, where it's not necessarily about like finding great companies and taking them to exit. It's about like funding through the like, the incremental milestones and hitting those incremental metrics to raise bigger funds. You know, and you do that through. Pursuing TVPI in a way that like it's slightly disconnected to generating

• 2:43:49Speaker 10

  value in the traditional sense, you know, TVPI is a has slightly different drivers, you could say.

• 2:43:55John Coogan?

  Yeah. Do you think that part of the reclassification as somewhat other asset classes into venture capital is driven by a desire to mimic the fee structure of a traditional venture capital firm in other in other industries? So I'm a I basically were doing public markets investing and I might be able to get one in 10. But if I call myself a VC firm and I play a little bit differently, I get two and 20 or something like that. Do you think that the branding matters when VC firms go out to LPs and try and raise money?

• 2:44:28Speaker 10

  That's a good question. I'm not really sure about that, to be honest. I mean, I'd hope LPs were scrutinizing that a little bit more, but perhaps not.

• 2:44:37Jordi Hays?

  What do you do? You look at any data on the health of the sort of retail and the private markets, right? Like the everyday angel investor, are you seeing more or less activity today than in 2021, early 2022?

• 2:44:53Speaker 10

  I would say quite a bit less, probably like a third less at the moment. It's because so much attention is concentrated on AI. And I think a lot of angels, frankly, have just resigned themselves like they're not going to get in on that game.

• 2:45:08Jordi Hays?

  Yeah, interesting. Yeah, I was thinking I was I was even going to consider doing a poll to anybody within, you know, just a poll on X or whatever. But I think if you ask the average angel investor, would you sell your entire angel investing portfolio for 15 cents on the dollar today? And I bet you that I bet you the honest answer is that like 90% of of people would because angel investing is this like weird dynamic where to me I I legitimately feel addicted to angel investing.

• 2:45:43John Coogan?

  Really?

• 2:45:43Jordi Hays?

  Like, it's a weird thing, but, and I joke about this, right? It's like, all these kids, you know, these kids that grew up in San Francisco and their, and their parents are addicted to angel investing, you know? It's like, refreshing their, refreshing their email on the first of the month, you know, waiting, waiting for, waiting for the update. But it's, but it's this interesting, you know, dynamic where it's honestly one of, you know, to me, it's one of the most interesting ways to spend free time. It's just like, meeting exciting founders, but at the same time.

• 2:46:13John Coogan?

  Liquidity timeline.

• 2:46:14Jordi Hays?

  Timeline, just, literally.

• 2:46:15John Coogan?

  Even if you make money, it's like, well, I didn't get to enjoy that in my 30s.

• 2:46:18Jordi Hays?

  Yeah. Yeah, totally. And I have, I have buddies that are, that are towards, you know, the end of their careers or maybe even retired that are, that are basically, like, somebody recently said to me, "I don't want to make net new angel investments because I don't want to deal with this when I'm like, potentially in a retirement."

• 2:46:37John Coogan?

  That's crazy.

• 2:46:39Jordi Hays?

  Potentially like, you know, retired to Hawaii, right? I don't want to be worried about, you know, figuring out, oh, when, you know, when should I try to exit, you know, this position?

• 2:46:48John Coogan?

  Dan, can you break down this idea that most venture capitalists don't understand risk management and only 10% of venture firms are making it to fund for? What do VCs get wrong about risk management? What does risk management even mean? I thought the whole point was to be risk on, swing for the fences.

• 2:47:06Speaker 10

  That's a great question. It's a real fundamental point as well. I talk about, like, the importance of risk management in venture capital and people do give me a slightly crazy look, like, the point is risk.

• 2:47:17John Coogan?

  Yeah.

• 2:47:18Speaker 10

  But if you properly manage risk, like, in a systematic way, you can take more risky bets. Like, that's kind of the point. Like, if you understand the maths of portfolio construction, how big your checks are going to be, you know, what the outcome is likely to be, how many you have to write, what maximizes your exposure to potential unicorns.

• 2:47:38Speaker 10

  You know, what what discipline across the whole portfolio looks like, you can take more risk on an individual investment basis.

• 2:47:44John Coogan?

  And yeah, so what does a what does a poorly risk managed fund look like? Is it is it just not building concentration in the winners, not leaving money in the fund for pro rata and follow ons to kind of ride the winners up as they become outsized winners? I feel like that was something that we heard from like the last generation of managers that got a $50 million fund, then everything got marked up in Zerp. And all of a sudden, they had to make these decisions on huge pro rata checks out of their main fund where there really was no new data about the company and they were still at a seed level. But some big firm had come in and preempted a series A or series B. And so all of a sudden, you can't do the normal thing of, wow, there's so much traction on

• 2:48:29John Coogan?

  this company. I need to really make sure my fund has a significant ownership because I did get a foothold in, but I need to build that position. Is that what's going on or is there something else, some another dynamic?

• 2:48:39Speaker 10

  Yeah, that's a part of it. That's quite a big part of it. I think that like the fundamental thing is the having a right sized initial portfolio, the number of investments that you make to begin with.

• 2:48:49John Coogan?

  Yeah.

• 2:48:49Speaker 10

  That should be diversified enough and, you know, the the average might be like 25 today, maybe it should be 50.

• 2:48:57John Coogan?

  How do you even calculate that? Is that based on like historical trends in like the number of unicorns or something? Like, how are you? How are you thinking about that?

• 2:49:05Speaker 10

  Yeah, exactly. There's there's great work done by a few people, Dave McClure from 500 Startups. He has an article on this. He talks about, you know, 100 startups should be the portfolio size for for a seed fund.

• 2:49:17John Coogan?

  Wow.

• 2:49:18Speaker 10

  Because of the the small percentage that eventually become unicorns or decker corns.

• 2:49:22John Coogan?

  Yeah.

• 2:49:23Speaker 10

  And you you fundamentally don't know to begin with which which ones are going to work out. That's kind of the problem is VCs over concentrate. And of course, if you're, you know, I've spoken to some great GPs about this concept and they always push back because they have 15 companies and they're all doing great. And that's like, fine, good for you. You're in the top 2%. It's the other 98% that I'm kind of thinking about.

• 2:49:46John Coogan?

  But is that really a way to get to, like, by definition, the, don't you, to be in the top 2%, don't you have to behave like the top 2% and just actually like consider it a skill issue? And just make sure you're fit to.

• 2:49:59Jordi Hays?

  Well, if you're trying to, if you're trying to get, you know, I can see the argument if you, if you're trying to get past Fund 4, which is like the milestone, you need to have bangers in the first fund, right? Like, even if, even if you're not necessarily, even if your ownership is not amazing, you need to be able to prove that you can get into winners at all to some degree. And so I've seen that strategy play out fairly nicely where as long as you're in a handful, you know, just get, showing that you can get in is kind of like key proof points, even if you're not able to concentrate, you know, 5% plus of your, of your fund in a, in a single company.

• 2:50:37John Coogan?

  Yeah. Do you think, do you think LPs are more willing to forgive on mistakes of portfolio construction, not sizing into winners, easier than missing winners and having like, okay, yeah, you built the portfolio perfectly. You got concentrated into your winners properly, but you didn't have any of those really sexy companies in the portfolio.

• 2:51:00Speaker 10

  Well, I'd like to think ultimately what matters is, you know, the, the end multiple, the IRR, the performance of the fund and everyone, you know, the majority of emerging managers come out swinging for the fences every single time they want a 10x fund. And in doing so, they are like, are themselves boom or bust. If they fail and it's less than returning capital, they have no room to learn. They can't improve for the next fund, you know, there's, there's no step two. If they are a bit more conservative, a bit more diversified and they return like 2.5, 3x, maybe they get a fund two and they learn and they can improve and earn concentration over time.

• 2:51:40John Coogan?

  Isn't there something beautiful about the fact that both startups exhibit a follow a power law and venture capital firms exhibit a power law? Like, there's a, there's a kinship here that it's like, hey, we're all either going to be rich or poor here. There's no median outcome. You're not just a bank to me. You're not going to be around unless this works out. You're living under the power law just as much as I am as the entrepreneur.

• 2:52:04Speaker 10

  I would disagree with that, to be honest with you.

• 2:52:06John Coogan?

  Please.

• 2:52:07Speaker 10

  I, I, I think it's a better world for everybody if the VCs are more stable.

• 2:52:11John Coogan?

  Okay.

• 2:52:11Speaker 10

  They, they, they are very power law. They are boom and bust. They don't really have to be.

• 2:52:18Jordi Hays?

  Interesting. Interesting. Well.

• 2:52:21John Coogan?

  Yeah, this is great.

• 2:52:22Jordi Hays?

  This was great.

• 2:52:22John Coogan?

  Yeah, thanks so much.

• 2:52:23Jordi Hays?

  Coming on and sharing. Uh, next time you have a report, give us a heads up and, uh, love to have you back on.

• 2:52:28John Coogan?

  Yeah.

• 2:52:28Speaker 10

  It was a pleasure.

• 2:52:29John Coogan?

  See you, Dan. This is great.

• 2:52:30Jordi Hays?

  Cheers.

• 2:52:30John Coogan?

  Thanks so much. Uh, let's run through some, uh, timeline. Let's give some updates, whatever else is in the news.

• 2:52:37Jordi Hays?

  I've got an idea before we jump into the timeline. Should we talk about Figma?

• 2:52:41John Coogan?

  Of course.

• 2:52:41Jordi Hays?

  Figma is the design tool of my dreams. It's a tool that, that I have used for my entire career at this point.

• 2:52:50John Coogan?

  Think bigger, build faster.

• 2:52:52Jordi Hays?

  That's great.

• 2:52:56John Coogan?

  How you design, explore your ideas freely and iterate quickly.

• 2:53:00Jordi Hays?

  We should make, we should make an actual like old school style radio ad.

• 2:53:04John Coogan?

  For sure.

• 2:53:05Jordi Hays?

  For this, but, um, but anyways, Figma, uh, launched a bunch of new features last week at config, one of which is very cool. They allow you to generate marketing, uh, various types of assets based off of your brand book. It's called Figma Buzz. Uh, so exciting new feature from them alongside sites and, and, uh, kind of the core, uh, you know, design tools that you probably already use and love. So go check out Figma Buzz and sites and thank you to Figma.

• 2:53:32John Coogan?

  Thank you.

• 2:53:33Jordi Hays?

  Should we talk about some timeline?

• 2:53:35John Coogan?

  Let's do it. Jason Calcanis of the All In Podcast is is taking the movie industry to task. He says the movie industry is effing clueless. Make a $19 a month, all you can watch $10, plus $10 for each kid and $49 for a family of five. Watch the money pour in. He wants a subscription. Movies would be huge if you made it a season pass like the ski industry did with the Epic Pass. Show old movies too for bonus points. AMC will slash prices on Wednesdays, the news. By 50% starting in July, the goal is to get more people in theaters between weekends. What's interesting is that I saw a separate article about how the modern instantiation of Movie Pass is wildly successful. Have you heard of this?

• 2:54:19Jordi Hays?

  Yeah, well, yeah, apparently AMC has a subscription product already.

• 2:54:23John Coogan?

  They do stubs.

• 2:54:24Jordi Hays?

  I think the interesting thing that Jason called out is showing old movies. I think one of the challenges is that there's so few new movies coming out that people are genuinely wanting to get up and go see.

• 2:54:37John Coogan?

  Yep.

• 2:54:38Jordi Hays?

  I don't know if old movies would do it, but.

• 2:54:41John Coogan?

  They do re-releases all the time and they are available. And I don't think they build as much hype because I think there's some weird dynamic in the movie industry. Where like unless you see the billboard and the hype and like you're texting your boys.

• 2:54:54Jordi Hays?

  I think it comes down to scarcity that they need to pull movies off of every, off the internet entirely.

• 2:55:01John Coogan?

  Yep.

• 2:55:01Jordi Hays?

  For a year.

• 2:55:02John Coogan?

  It's good.

• 2:55:02Jordi Hays?

  And then just build it up and being like, we're bringing it back. You know, the people, some people will be like, well, I have a DVD. I can watch it anytime. Good luck playing a DVD on your home entertainment system if you got it in the last five years. Not going to work.

• 2:55:16John Coogan?

  Anyway, staying with the All In Podcast, Chamath Palihapitiya says, "Not nearly enough people are talking about the implications of Klarna rolling back some of their AI bets, not knowing any of the details. I can guess why. Replacing determinism of or humans with probabilistic code is fraught with edge cases and require new ways of software development and process engineering that aren't well solved." The implications to an entire generation of AI apps will be as severe, uh, will be severe as more companies come to terms with the difficulty in getting products to work reliably in production with AI in the loop. Customer service may be the first funeral signpost. The result will be that many startups need to pivot to simply use AI for narrow use cases and otherwise act deterministically. So what will, what will, so what have people

• 2:55:59John Coogan?

  funded then? An AI company? No, not really. Just a really overpriced SaaS company at AI valuations. Interesting. What do you think?

• 2:56:08Jordi Hays?

  Uh, I mean, I thought the conversation with Owen yesterday from Intercom was super insightful, right? They are incredibly well positioned to deliver AI to CX teams and, and unlock the power of it, but they're not saying, they're, he, he wasn't coming on and saying 99% of tickets are solved by AI today. He believes that, you know, we can get there over time. And he, his hot take was that, you know, AI was, you know, better than humans already at a lot of things, right? It stays on script. It, it doesn't get tired. It doesn't get short. It's not temperamental. All, all these things that, um, you know, end up creating a better customer experience. Once the quality is at a certain point.

• 2:56:52John Coogan?

  It's this idea that like we, we overestimate what can be done in a year, underestimate what can be done in a decade. You got superhuman autocomplete for every single one of your customer service agents. You got much better ways to navigate a knowledge base effectively and just serve up a better Google search, use it as a knowledge engine. And so that should drive those, but, uh, trying to go full Klarna mode and saying, you know, we're not hiring anyone. We're going to be a one person company, probably a little aggressive.

• 2:57:22Jordi Hays?

  Yeah.

• 2:57:22John Coogan?

  Anyway, Avi Schiffman, uh, founder of friend.com says, I met my investors LPs and realized I'm just working for college endowments and family offices.

• 2:57:34Jordi Hays?

  Yeah, you are. And it's good. It's an opportunity. It's an amazing blessing.

• 2:57:39John Coogan?

  I mean, we heard about this from Andrew Reid, talking about when he was pitching Dylan Field at Figma, brought him into the Brown conference room and said, hey, like, we work for Brown.

• 2:57:51Jordi Hays?

  You have an opportunity to run it up for Brown.

• 2:57:52John Coogan?

  Yeah, you have an opportunity to run it up for Brown.

• 2:57:54Jordi Hays?

  Run it up to go long Brown.

• 2:57:55John Coogan?

  Exactly.

• 2:57:56Jordi Hays?

  And it's not just college endowments. It's teacher pension funds. It's, you know, you're supporting firefighters, all these things. So you're supporting, you're helping big oil, right?

• 2:58:10John Coogan?

  I mean, that is, that is part of the beauty of like the intertwined financial system is that losses are born across the entire economy so that any one company that blows up doesn't destroy everyone's pension. And but, but when there's big winners, everyone kind of benefits if you have a pension or you go to one of these schools, like their endowment is enriched and they do more research and science and all sorts of stuff. And so you, you have kind of a,

• 2:58:38John Coogan?

  I mean, it's just, it's diversification, right? It's just diversification. And so like you, you don't hear as many of those stories about an individual Main Street investor that lost all their money on a risky startup bet. Because angel investing is while addictive, it is for high net worth individuals and accredited investors only, but they still have exposure to the venture markets through LPs.

• 2:59:00Jordi Hays?

  Yep.

• 2:59:02John Coogan?

  Prime Video has renewed Beast Games for not one, but two more seasons. Y'all are not ready for the big stuff we have planned, says Mr. Beast. Very interesting. This was one that was like hotly debated about whether, whether, whether it was good. It's hard to track because you can't just, you can't just look at the YouTube metrics to understand if Beast Games is truly successful for Amazon Prime. But we have the data now. Season two and season three confirmed, they probably wouldn't have done that if it underperformed. So interesting watching a YouTuber transition to mainstream media or, you know, bigger platforms. I mean, Amazon Prime is new media, but still, you know, a huge company, major network. He's clearly worked out a fantastic deal. And we've seen a bunch of this and it feels like it's more of a increasingly,

• 2:59:44John Coogan?

  social media is a proving ground for Hollywood. Talk about Pat McAfee, what he did with his podcast, took it to ESPN eventually. I think we're going to be seeing a lot more of this as people build independently and then ultimately levers the distribution that comes from something like Amazon Prime. So congrats to Jimmy. We should have him on the show. Dalton Caldwell says the S and P 500 now has three Y C companies, DoorDash, Airbnb, and Coinbase. Let's hear it for Y C. Can we get the, can we get a size gong or some plat thing or something? Congratulations to Y C.

• 3:00:18Jordi Hays?

  I can't wait to go back to the next Emma day.

• 3:00:20John Coogan?

  Yeah, me either. It is, it is actually crazy how big that Y C has done this because no other incubator is even close, right?

• 3:00:28Jordi Hays?

  And I'm excited for the update in, in 2055. The S and P 500 is now 60% Y combinator companies.

• 3:00:36John Coogan?

  For sure. Certainly, if you expand that to Y C founders running companies, probably even bigger.

• 3:00:42Jordi Hays?

  Yeah, P G says 497 to go.

• 3:00:43John Coogan?

  497 to go. P G, I like it on a conquest. Good job.

• 3:00:49Jordi Hays?

  And all are consumer tech, right? Everybody says build B to B SaaS until you see some of the biggest outcomes.

• 3:00:56John Coogan?

  Just wait. I mean, a couple of those payroll companies will be in the S and P 500 pretty soon. I'm pretty sure. Anyway, all three hopefully. Aiden says Uber would be a lot cooler if it was called American Express. I, I just love this guy. Seven likes, low TAM, but.

• 3:01:11Jordi Hays?

  Low TAM banger.

• 3:01:12John Coogan?

  Yeah. He also had another post that we didn't get to yesterday that was like, if, if, if the airline's calling your name personally as you board the flight, it's basically like flying private. I thought that was funny. Anyway, shout out to Aiden. Great, great programmer. Great hacker. Airbnb is launching, they're unveiling their next chapter. This is going live today. I don't actually have the update, but.

• 3:01:33Jordi Hays?

  Yes, they're launching new.

• 3:01:35John Coogan?

  Founder mode.

• 3:01:36Jordi Hays?

  So they're launching new services.

• 3:01:37John Coogan?

  Okay.

• 3:01:38Jordi Hays?

  Businesses.

• 3:01:39John Coogan?

  Oh, interesting.

• 3:01:39Jordi Hays?

  There's a redesigned app. So remember they condensed a bunch of launches into one.

• 3:01:43John Coogan?

  Yep. And they were doing like Airbnb experiences for a while.

• 3:01:47Jordi Hays?

  Yeah, expanding beyond home stays. And I guess they're going to invest a quarter of a billion dollars into this new sort of business line.

• 3:01:56John Coogan?

  Big money.

• 3:01:57Jordi Hays?

  Like, it's, it seems like an extension of their kind of experiences product.

• 3:02:01John Coogan?

  Sure.

• 3:02:03Jordi Hays?

  But anyways, hopefully they can.

• 3:02:08John Coogan?

  Hopefully they don't crush under the weight of competition with Wander.

• 3:02:11Jordi Hays?

  Yeah.

• 3:02:12John Coogan?

  Honestly, that's my only hope.

• 3:02:13Jordi Hays?

  The rumors of the Wander Series B.

• 3:02:15John Coogan?

  Founder Mode CEO, love him, but.

• 3:02:18Jordi Hays?

  They're gonna be feeling the heat.

• 3:02:19John Coogan?

  They're gonna be feeling the heat from Wander for sure. Adam D'Angelo said, "At Cora, we recently tested switching from Zoom to Google Meet for a week. Google Meet is better in many small ways, but bit worse in one big way, audio quality, particularly background audio noise cancellation echoing. That kills it, so we're staying on Zoom." Those are funny, just like, hey, I did this A/B test and we're sticking to Zoom. And Sundar Pichai responds.

• 3:02:44Jordi Hays?

  Sundar, Founder Mode.

• 3:02:46John Coogan?

  We'll follow up offline as we have an experience case. As we read notes below, "It works pretty well in my experience. We will debug to understand the root cause and fix. Thanks for flagging." Thank you. Would love to switch if this is fixed. And Nathan, a buddy of mine, says, "I have the inverse experience. Zoom is well rubbish in it." And he's British, or French, maybe? I don't know. He's over in Europe somewhere.

• 3:03:07Jordi Hays?

  Well, rubbish.

• 3:03:08John Coogan?

  Anyway.

• 3:03:09Jordi Hays?

  In it.

• 3:03:10John Coogan?

  Hilarious. Anyway, Teddy Blank had a coinage. Once your VC has, what was it? The actual coinage was something about, once your company's LinkedIn profile picture is the founder holding a microphone at a conference, you're cooked.

• 3:03:27Jordi Hays?

  With one of the.

• 3:03:28John Coogan?

  Yeah, with one of those. Which I don't think is really true necessarily, because a lot of the big CEOs, they wind up doing that anyway. Bezos, Steve Jobs, I'm sure all these guys have been pictured with lav mics. But still, funny to see that, yeah, if you grew up too much. So anyway, shout out Teddy. Anything else you want to cover? Should we get out of here? It's 2:05. Thank you for watching.

• 3:03:47Jordi Hays?

  2:05.

• 3:03:48John Coogan?

  Any more plugs? At Aurora.com. Go to Lucy.com.

• 3:03:52Jordi Hays?

  You should always go there.

• 3:03:54John Coogan?

  Go to 8sle.

• 3:03:55Jordi Hays?

  But, no, I'm excited for the show tomorrow. We got Brian Johnson calling in, as well as Mateo from 8 Sleep.

• 3:04:01John Coogan?

  Should be great.

• 3:04:02Jordi Hays?

  And yeah, go and leave us a five-star review on Apple Podcasts or Spotify.

• 3:04:09Jordi Hays?

  It helps us. I think it helps us. I don't know what it does, but if you do leave a review, we will talk about it on the show.

• 3:04:19John Coogan?

  And head over to Polly Market. Keep tracking the largest company at the end of May. This is the Super Bowl of big tech. Microsoft's at 60% right now, but they dropped just recently down from 80%.

• 3:04:33Jordi Hays?

  This chart is actually-

• 3:04:33John Coogan?

  Nvidia is climbing fast. Apple's climbing as well. It's a knockout, drag-out fight for the largest company at the end of May. Head over to Polly Market, check it out. Anyway, thank you for watching.

• 3:04:45Jordi Hays?

  The only market that matters.

• 3:04:46John Coogan?

  We will talk to you soon.

• 3:04:47Jordi Hays?

  Cheers.

• 3:04:47John Coogan?

  See you tomorrow. Goodbye.