Leopold Sold, Ferrari Undefeated, Martin Shkreli Joins | Guillaume Verdon, Lulu Meservey, Michael Kim, Joon Sung Park, Karan Kunjur, Vlad Tenev

(00:17) - Leopold Sold (12:14) - Martin Shkreli discusses the leveraged collapse of a major AI-focused hedge fund, explaining how forced liquidation, predatory short-selling, and excessive position sizing can rapidly destroy a portfolio. The former hedge fund manager and pharmaceutical executive also examines Citadel’s reported acquisition of the fund’s assets, the broader correction in AI stocks, and Wall Street’s recurring failure to heed the risks of leverage. (56:19) - Ferrari Undefeated (01:06:24) - Guillaume Verdon, founder of Extropic, discusses the company’s thermodynamic computing technology, which uses probabilistic electronics to run generative AI workloads with far greater energy efficiency. He also covers potential applications, government support for domestic chip manufacturing, AI safety and accelerationism, and the challenges of building a deep-tech company while maintaining a prominent public voice. (01:19:16) - 𝕏 Timeline Reactions (01:20:36) - Lulu Meservey discusses how founders and CEOs can build lasting relevance through consistent, authentic, and strategically focused communication rather than rage bait, viral stunts, or excessive media appearances. Drawing on her communications expertise at Rostra, she argues that leaders should prioritize trust, audience fit, principled messaging, and approaches that suit their individual personalities. (01:47:35) - Michael Kim is the founder of Cendana Capital, an institutional investor focused on pre-seed and seed-stage venture funds. Michael discusses Cendana’s growth, its approach to identifying promising fund managers, the importance of founder access and investment judgment, and lessons from both missed opportunities and exceptionally successful investments. (02:06:39) - Joon Sung discusses Simile’s $200 million fundraise and rapid growth as an applied AI lab building models that predict human behavior. He explains how its simulations help companies test products and understand customer preferences at scale while democratizing access to market insights. (02:17:35) - Karan Kunjur, co-founder and CEO of K2 Space, discusses the company’s $500 million funding round, successful first satellite mission, and more than $1 billion in signed contracts. He explains K2’s vision of building large, high-power satellites for commercial and national-security uses, including communications, orbital computing, and advanced space infrastructure. (02:28:35) - Vlad Tenev, co-founder and CEO of Robinhood, discusses the company’s record growth, expanding suite of financial products, and mission to broaden individual asset ownership. He also covers global markets, Robinhood Social, product design, and using mathematical superintelligence to verify software and improve cybersecurity. TBPN is made possible by: Ramp - https://ramp.com Public - https://public.com Cisco - https://www.cisco.com Console - https://www.console.com CrowdStrike - https://www.crowdstrike.com Figma - https://www.figma.com MongoDB - https://www.mongodb.com NYSE - https://www.nyse.com Railway - https://railway.com Shopify - https://www.shopify.com Codex - http://openAI.com/codex Follow TBPN: https://TBPN.com https://x.com/tbpn https://open.spotify.com/show/2L6WMqY3GUPCGBD0dX6p00?si=674252d53acf4231 https://podcasts.apple.com/us/podcast/tbpn/id1772360235 https://www.youtube.com/@TBPNLive

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

• 0:00John Coogan?

  You're watching TVP and today is Thursday, July 30th, 2026. We are live from the TVP Ultra on the Temple of Technology, the Fortress of Finance, the capital of capital. Let me tell you about ramp.com. Time is money. Both easy use corporate cards, bill pay, accounting and a whole lot more all in one place. Absolute chaos on the timeline. Last night, this morning, around Leopold Ochenbrenner's hedge fund situational awareness, they have been forced to unwind their public stock portfolio after steep losses on AI infrastructure bets. CNBC reported this on Thursday, today. Prime brokers reportedly rushed to raise

• 0:40John Coogan?

  cash to meet margin requirements while Ken Griffin's Citadel, my former employer, reached a deal to purchase the fund's publicly traded assets.

• 0:51Jordi Hays?

  Did Ken ever do anything to you?

• 0:53John Coogan?

  No.

• 0:53Jordi Hays?

  Like this?

• 0:54John Coogan?

  No, what? No.

• 0:56Jordi Hays?

  You were just an intern.

• 0:57John Coogan?

  I was an intern. I would, I would have loved to be getting him coffee.

• 1:00Jordi Hays?

  Did he ever try to maybe intentionally send the markets into turmoil just to test you?

• 1:04John Coogan?

  No, but I mean, honestly, the story of Citadel is crazy. I mean, after the, the housing crisis, the fund was down 50% and it was a very, very dark time. There were building.

• 1:16Jordi Hays?

  Good thing for Ken, though, at that time, Ken Griffin, what he would become didn't exist. And otherwise, you probably would have eaten the young Ken Griffin alive.

• 1:25John Coogan?

  Yeah, maybe, maybe.

• 1:27Jordi Hays?

  Much like it seems that Ken has done to Leopold.

• 1:30John Coogan?

  Yeah, maybe, maybe. The, the other, the other frustrating thing is that they went down 50%. I think the next year they went up 50% and then, and they're, you know, this is the classic, you know, explaining fun math to people. Oh, you're back up 50%? Great. You're back to where you were? Nope. You need to go back up 100% if you're down 50%. Of course. Anyway, so the news, the fund had built concentrated positions in AI infrastructure companies, including Nebius, Sandisk, Micron and CoreWeave, while also betting against software companies such as Adobe. Those trades have as unraveled as AI infrastructure stocks plunged in recent weeks before rebounding sharply today. Now, how much of the plunge

• 2:13John Coogan?

  is around shaken faith in AI's ability to deliver value, open source, or just oil inflation? The Fed's actions? We'll get into all of this because there's a lot of moving different, moving pieces that led us to where we are today. Let me continue giving the news, then we'll go through the timeline and discuss a little bit more in depth. So also relevant here, this is from the TBPN newsletter, you can go sign up at tbpn.com. And what a bunch of people are pointing out on X is the fact that on Tuesday, it was reported that Citadel expected a surprise rate hike from the Fed meeting that took place yesterday, which did coincide with more sell off in the market. So the market has been selling off based

• 2:58John Coogan?

  on what might happen at the Fed. We reported on the Fed news, there were three Fed governors that said, we should raise rates, but the rate held steady, but mortgage rates are high, are over a one year high at 6.66% today. Very odd number. But yesterday, the Fed left the rate unchanged. And today, many of the stocks in Leopold's portfolio are up double digits and we'll sort of go through them. They're up today, based on the news that Ken Griffin is buying the portfolio, but they are still down over the last month, for example, in many cases. Ashenbrenner, a former OpenAI researcher, rose to prominence after publishing his 2024 essay series, Situational Awareness, the billion dollar PDF, as Will

• 3:39John Coogan?

  Minaitis put it, I believe, which argued that rapid AI progress would require an enormous build out of chips, memory, power and compute infrastructure. That thesis became the foundation of his investment strategy. After launching the fund, he also engaged, he's also engaged to Anthropic CEO Dario Amade's Chief of Staff. The news is coming in hot and fast on the story. Here's a timeline of the most important headlines so far. So Bloomberg, 9:25 PM yesterday. I think you texted me this as I was going to sleep. And we were like, whoa, this is big deal. I wonder how, how crazy this will get over the next few days. It got very crazy very quickly. So Bloomberg reported, Leopold Ochenbrenner Situational Awareness seeks to raise capital after AI rout. There was an article in the Financial

• 4:23John Coogan?

  Times as well last night, just saying that, hey, there's some, there's some rumors that are leaking out from LPs that they got a letter saying like, hey, the market's down. Now's a good buying opportunity. The thesis is as strong as ever. If there was ever a time to put more money into this fund, now's the time. That can be good. You want to be buying when things buy low, sell high, right? But at the same time, if it's to cover margin calls, if it's because the fund's getting beat up, it's a little bit rougher of a pitch. Then at 6:05 AM, CNBC announces that AI investor Leopold Ochenbrenner has been forced to unwind all public stock positions after steep losses, according to CNBC sources. And then the Wall Street Journal reports at 8:39 AM that Citadel has stepped in to buy situational

• 5:08John Coogan?

  awareness's stock portfolio after big losses in AI. And so.

• 5:12Jordi Hays?

  After living through FTX and SVB, and now this on the timeline?

• 5:17John Coogan?

  Nothing.

• 5:18Jordi Hays?

  No.

• 5:19John Coogan?

  You're just grizzled.

• 5:20Jordi Hays?

  No, the, my key, the key takeaway is like, when, when, when leverage is involved, things just move so, so, so fast, right? You remember with FTX?

• 5:30John Coogan?

  Yep.

• 5:31Jordi Hays?

  There's kind of some rumblings.

• 5:32John Coogan?

  Yep.

• 5:32Jordi Hays?

  A couple, a couple posts from SPF saying like, we're fine. It's all good. And then it was over.

• 5:37John Coogan?

  And it is.

• 5:38Jordi Hays?

  And then the same thing with SVB.

• 5:40John Coogan?

  Yep.

• 5:40Jordi Hays?

  Like couple rumblings, maybe like a couple weeks, a week beforehand, a few posts here and there, and then it just moves so, so fast, right? And yeah, quite a bit different than traditional venture world where when a company is dying, it dies over two, three years, often, sometimes more.

• 6:01John Coogan?

  Yeah, yeah, yeah, yeah. I'm thinking of like, I mean, we've had some of these companies on from the private markets where they've gone through big booms and busts like Bird, and then they've built back and they've turned around. But there's so much more.

• 6:15Jordi Hays?

  Turned around.

• 6:15John Coogan?

  No.

• 6:16Jordi Hays?

  Talking about Lime.

• 6:17John Coogan?

  Lime turned around, but, but, but it took like an extra five years for Bird to actually wind down. And it's because there's no leverage in the system. There's just a bunch of dollars that sit there as equity and those get burned down. But every, every month, if the business is deteriorating, you're cutting costs, shrinking the business, tightening things up, making that 12 to 18 months last 24 months. And then you wind, and then you wind up, you know, 24 months in, you're like, oh, we're not going to be able to raise again. Let's stretch this again and, and right size the business again. And all of a sudden is, so it takes like years and years for these things to unwind. Although they are correlated in the venture world, they can be decorrelated in the unwinding process. And then there can be other things that are outweighing the portfolio. So every VC that had Bird on

• 7:00John Coogan?

  their books probably also had some SpaceX on their books or something. And so there's this balancing effect and it takes, it takes years for these things to balance out and they can be unwound, unwound at different periods in the market as opposed to everything needing to happen all at once. So speaking of public markets, let me tell you about public.com. Investing for those that take it seriously. They got stocks, options, bonds, crypto, treasuries and more with great customer service. I like this post from Richard Crabe, one of my favorite investors. He runs the quant hedge fund Numerai. And he says, I think it's cool that funds like situational awareness can exist in America and that there's a market for them. But the outcome was never going, was never about being right or wrong

• 7:39John Coogan?

  on AI at 150% vol. Variance drag alone is 113% a year and risk of ruin is roughly a coin flip over the fund's life. A child can do the math on a napkin. Claude did it for him. He says, AI says ruin wasn't unlikely. It was roughly even money. So there's a 50, 50% chance, 50% chance that, that the fund sees, you know, so many losses that they have to, that they have to do this liquidation process. And, and that's basically what happened. And it's, it must be so frustrating because the, this is, it really does not feel like, oh, Leopold was wrong about AI and the AI build out. It's like, well, there's oil and

• 8:24John Coogan?

  a war and interest rates and all these other things going on that are creating some jitters. And then also, once the AI trade and the infrastructure trade got so big, you wind up with like this retail froth on top that makes things even crazier. And then all of a sudden.

• 8:41Jordi Hays?

  That he was benefiting from.

• 8:42John Coogan?

  Benefiting from, but also it's much harder to do sort of a first principles analysis on what the psychology of a frothy market will do as opposed to just retreating to, okay, well, there's this, the model progress is progressing like this and, and token pricing is, is, you know, counting the ooms stops sort of working when it's like, well, will this particular stock become a meme stock, right?

• 9:07Jordi Hays?

  Pull up this picture. There was a lot of this going on this morning.

• 9:12John Coogan?

  The memes are flying. This is truly like.

• 9:14Jordi Hays?

  This was, this was my, this was my, the, the first meme that popped into my head. If we can pull this up.

• 9:20John Coogan?

  The chat is asking for a non-sponsored sleep score to see how we slept.

• 9:25Jordi Hays?

  I slept.

• 9:26John Coogan?

  In the midst of a financial crisis. I've been doing pretty well. I got an 87 last night, 92, 95.

• 9:34Jordi Hays?

  There's a lot of this on the timeline this morning.

• 9:37John Coogan?

  Yeah.

• 9:37Jordi Hays?

  People saying, oh, I don't know why the guy's head's cut off. You guys okay?

• 9:42John Coogan?

  This was you.

• 9:43Jordi Hays?

  No, this, this was just a lot of people on the timeline being like, I knew he would blow up.

• 9:47John Coogan?

  Yeah, yeah, yeah, yeah.

• 9:49Jordi Hays?

  Like.

• 9:49John Coogan?

  The armchair experts are out in full force today. And in many ways, we are among them.

• 9:55Jordi Hays?

  So I like to think about it, like at least some of the more high profile LPs.

• 9:59John Coogan?

  Yeah.

• 10:00Jordi Hays?

  That in, in situational awareness.

• 10:02John Coogan?

  Yeah.

• 10:03Jordi Hays?

  A lot of them are like, you know, great founders, you know, maybe they have big, big positions in, in the labs and all these different things. And it's quite possible that situational awareness, at least when they invested, was like 5% of their portfolio. And they're just thinking like, go giga long, like go.

• 10:23John Coogan?

  Yeah, yeah.

• 10:24Jordi Hays?

  For some of these people, it might be like. One, less than 1%, right? Whatever it is. And so it's, it's actually somewhat pragmatic for them to just be like, yeah, go crazy.

• 10:32John Coogan?

  Go crazy, do whatever. Yeah, that's the product.

• 10:34Jordi Hays?

  That's the product. That's what I want to buy.

• 10:36John Coogan?

  Yeah.

• 10:36Jordi Hays?

  The rest of my portfolio is fine. You're going to have a lot of AI exposure, whether you like it or not. But, but yeah, it's, it, it is actually crazy that it didn't even take a three month drawdown, right?

• 10:54John Coogan?

  Yeah.

• 10:54Jordi Hays?

  It was, you know, what was it? June, June 1st, they were at 45 billion of AUM, something like that was, was the nab.

• 11:02John Coogan?

  I think end of June.

• 11:03Jordi Hays?

  And end of June, so beginning of July. And then how quickly, how quickly things can change and.

• 11:11Jordi Hays?

  You know, poor, poor Leopold already went through this with FTX. I believe he, he and the rest of the, the future FTX future fund team, I believe resigned like right when

• 11:23John Coogan?

  Oh, FTX collapsed. What's interesting is people are, people are framing this as like they got pennies on the dollar or Ken Griffin bought the portfolio for pennies on the dollar. And when I think pennies on the dollar, I think like five pennies per dollar. So like 5% recovery, but it might be closer to like 50% of book value, might be 80% of book value. I don't know. Fortunately, we have Martin Scrawley joining in just a minute. He's here in the waiting room.

• 11:48Jordi Hays?

  And it's crazy because when, when Martin, Martin was the first account that I saw to post anything like this, he posted it before any mainstream media had picked up on it at all. And there was a bunch of comments on his post saying, I have good sources that say this isn't true. And of course, uh, Scrawley was right. There was trouble and we'll bring him in now.

• 12:11John Coogan?

  Let's bring in Martin Scrawley to break it down for us. I believe he's here. How are you doing, Martin? Good to see you again.

• 12:17Martin Shkreli?

  Hey guys, I'm doing great. How are you?

• 12:18John Coogan?

  Oh, perfect.

• 12:19Jordi Hays?

  Perfect.

• 12:22Jordi Hays?

  How's your last?

• 12:22John Coogan?

  Take us through it.

• 12:23Jordi Hays?

  24 hours.

• 12:24John Coogan?

  What's the last 24 hours been like for you?

• 12:25Martin Shkreli?

  It's, it's been interesting. I do invest myself, so uh, it's been a, it's been a probably one of the craziest months uh, in Wall Street history. I was talking to some friends last night about long-term capital management, uh, Amarin's, uh, other famous liquidity driven blowups. And uh, this is up there. And um, yeah, it's just a really crazy thing. We had heard rumors um, sort of mid last week, and then they really started crystallizing um, last night. And this morning, obviously sort of a fait accompli. And I actually think they did a wonderful job of, of keeping it relatively quiet. I think some players were already positioning, say, early in the week, Monday, Tuesday,

• 13:11Martin Shkreli?

  looking to do what my old boss Kramer used to call a, you know, shooting against a fund. So if you know, know somebody has to liquidate, the best thing for you to do, unfortunately, sadly Darwinian, is to go sell all the positions you have in common and then go start shorting everything they have. Um, and it accelerates the, the sort of downfall as quickly as you can. And this is a very common practice when these things, you know, happen. Certainly not something, I, I had overlap positions with them, so certainly not something I would do, but know a wide number of funds that were shorting all of these stocks, hoping to cause a panic and a crash.

• 13:47John Coogan?

  How do you trace back the start of this correction? Is it the war? Is it oil? Is it jitters around open source or just hyperscaler capex? There's so many different narratives around why the AI infrastructure trade, the bottleneck trade might be weakening. At the same time, it feels like there's some really solid progress and the models are progressing along like pretty like as expected.

• 14:14Jordi Hays?

  Yeah, you have the labs having some of the best months in business history of any companies ever.

• 14:22John Coogan?

  Yeah.

• 14:22Jordi Hays?

  But then all the infrastructure correcting.

• 14:25Martin Shkreli?

  Yeah, none of that stuff matters. The only thing that matters is, is the propensity of the buyer and seller to buy or sell. And what you got happened was the smart guys get in early, start buying, see the prices go up, buy some more. And then less smart guys take, take note and say, I want to do that. I want to be up 400% this year too. Guys like me started buying right near the top. It's just like, hey, this is great. I love memory. I love bottlenecks.

• 14:57Martin Shkreli?

  And uh, and then, but by the weakest hands are buying at the top. So they're also the first to sell.

• 15:03John Coogan?

  Sure.

• 15:04Martin Shkreli?

  First to panic. And it just creates this like, you know, every bubble is sort of the same. You have this euphoria, this peak, and then, you know, everyone sort of panics at once. You know, the fundamentals basically don't make a difference. You know, I think they, you know, they sort of drive the marginal buyer and seller, but you know, the 80 or 90% of the assets shareholders don't change hands. It's that 5% of the margin that's deciding the price. And if that 5% is in the state where they're, they're levered up 3X or 4X, as we heard Salp is, uh, was a 4X levered fund, which is, that's a lot of leverage. You know, a 25% drawdown takes you out of business. Interestingly, we heard that three firms were bidding on the assets.

• 15:47Martin Shkreli?

  So uh, Jane Street, Millennium and Citadel were sort of brought in, in a closed, closed circle, sort of late Friday to, to bid on the remains of, of the firm. And uh, we got offered uh, a look at a hundred million dollars of Anthropic stock, which we were puzzled, puzzled by. You know, sometimes you see these SPVs, sort of interest comes across, uh, you know, here and there. And we thought that was interesting.

• 16:17Martin Shkreli?

  I sort of raised my eyebrow and said, is that Leopold? It's because, you know, sometimes when you want to sell a $4 billion or something, you don't come out and say you want to sell $4 billion. You come out and you say, you want to sell a hundred million dollars of it. And usually a guy who wants to buy a hundred is enough to buy 500 or more. And you sort of fill them out and say, here's a hundred. Okay. Do you want five by any chance? And then, you know, your eyebrow starts to raise a little bit that, you know, maybe he's got even more. Now, of course, this is a really odd situation. So I, we, we heard Millennium did put in a bid. Citadel's bid was better. You know, I think Ken wants to be the guy that everyone goes to when they're in trouble. And that's the, you know, Buffett is getting older. This is not the kind of stuff Buffett wants to do anyway.

• 17:01Martin Shkreli?

  But you know, Citadel did this in the Amarin deal, you know, when Amarin blew up uh, natural gas futures. I think Citadel took that portfolio and virtually every blow up in finance.

• 17:13Jordi Hays?

  Well, you have Enron, Enron where they just raided all the talent.

• 17:18Martin Shkreli?

  Yeah, they wanted to do an Enron as well. I, I think, yeah, they just sort of, Ken is a very smart guy, sort of shows up and says, you know, how can I, you know, how can I uh, you know, be a partner to the Goldman's and the Bank of Americas when they need to get out, you know, uh, of a really risky position? They basically take, you know, take over the book, right? So if you, I'll give you sort of an example and you're asking the question. So let's say, you know, you're at 45 billion, you know, sort of try to trace this back. And you're, you're uh, you know, 10 billion of that is in Anthropic from what we understood. So you have $30 billion of, of cash in your bank account. And running 4X levered means you have 120 billion gross market value.

• 18:02Martin Shkreli?

  So if your GMV drops, I don't know, 25%, that doesn't sound so bad at 120 billion. Maybe that's, you know, I don't know, uh, 30 billion. So you're down to 90 billion, but that's not your equity. So your equity drops from 35 billion to 5 billion. And no, no prime broker is going to let you keep 90 billion of gross market value. Because once you did, your equity below zero, it's their loss, not yours. And they're not going to lose a penny after Archegos and after these other kind of blowups. That's not their job. And they kind of have the right to take over your portfolio, which is, is sort of uh, you know, something I hope nobody ever has to experience, but they basically call you in and say, listen,

• 18:46Martin Shkreli?

  you know, these are our, our assets now. You know, we're, we're going to decide what their, what their disposition is going to be. And the rumor is over the weekend, he contacted about 10 parties to place Anthropic in an effort to shore up liquidity, selling the Anthropic stake for, for allegedly the offer was at 1.1 trillion equivalent market cap.

• 19:08Martin Shkreli?

  Which, you know, I think roughly where it's trading. And um, you know, it's unclear whether that was sold or half of it was sold. It's what we reported. That, that half of it was sold. Still a little unclear who bought that, what's happening exactly, but that's, that's the best we've got. And then, you know, when it came to um, the public, you know, book, it does sound like um, you know, the, the buyer of that book basically got a, from what we were told, a three to four billion dollar insta-markup. So they basically now have to work them, they have to work out of, of three to four billion. More than three to four billion, quite a lot more.

• 19:50Martin Shkreli?

  But in essence, if they work out of these positions without disrupting the market, they'll print to three to four billion on the trade. Which, you know, is unusual and interesting trade, but you know, really exciting. One of the parties reached out to me last night, one of these three parties, interestingly, after my reporting. And they said that.

• 20:09Martin Shkreli?

  In essence, in some substance, yes, Leopold flew a little too close to the sun and your numbers are a little off. And I asked what direction and they wouldn't confirm or deny. I received a lot of pushback on the reporting, to your point, privately and publicly, that it's not so bad and that, you know, he's only down 30%. 30% you can kind of live with. But also, if Anthropic hasn't changed its mark, that means you were down 60 in the public book. And if you're Forex levered, you know, that means you're sort of down 15 on the public book, which sounds too good to be true. If you're trading these stocks, they were down like 15% a day. So we've also heard the other AI funds are hurting, maybe

• 20:54Martin Shkreli?

  not as much as in trouble, but certainly hurting as well.

• 20:58John Coogan?

  Where does the fund go?

• 20:59Jordi Hays?

  Yeah, he gives some good, he gives some good cover to all the funds that were effectively copy trading him, maybe even being more risk on and later to these positions because they were, they're naturally just late if you're trying to copy trade someone and you're

• 21:14Martin Shkreli?

  trying to catch up.

• 21:15Jordi Hays?

  Yeah, you're trying to catch up basically. Yeah, more leverage, you're coming into these trades way later. Do you, do you recall, like, how did you process Ryan Jacob in around the year 2000? Because you were at Kramer's firm, I believe you joined maybe right before the Ryan Internet Fund started collapsing?

• 21:40Martin Shkreli?

  Yeah, there was also the Ameren Fund. There was a fund in the 60s called the Manhattan Fund that Warren Buffett criticized for being the go-go kind of fund. It was run by a guy named Gerald Tsai. And so like every generation, you've seen the memes about Kathy, you know,

• 22:02Martin Shkreli?

  every generation has it, you know, the guy that believes in that cycle and it goes balls to the walls on that cycle. And look, I have a lot of respect for, for somebody who's willing to do that. I used to tell a friend who kind of did the same thing. He followed this trade, but he was very early. So he had sort of Leopold-like numbers. And he sort of did hedge it at what sounds like close to the top. So sort of a miracle trader, best trader I know. And I joked with him, I said, you know, if Leopold sells at the top and turns short, like I will absolutely adulate him as the greatest of all time. It's just that, you know, usually when you're so spellbound by that narrative of whatever's happening, in

• 22:43Martin Shkreli?

  this case AGI, you know, there are people out there that say, look, AGI is here slash coming. When it comes, the entirety of finance is not relevant anymore. You know, we might as well just run it up and kind of see the end of days this way. And of course, there's some guys sitting on a trading desk at Goldman Sachs, you're like, these people are fucking nuts. It's just the stock market. It's a big deal.

• 23:04Jordi Hays?

  Did you, given that Leopold had been at FTX right up until the fall, did you think that maybe as risk on as he was, like maybe he was like, you know what, I just, I can't go through that again. He wasn't necessarily, he wasn't necessarily directly tied to any of this sort of nefarious activity at FTX, but he did have to viscerally experience it and I believe resigned the day of the collapse. And I would, I just would have expected to not like, yeah, to run it back like so quickly. You would, you would expect even like, you know, go and do it, have a normal, you know, great career for a decade, whatever, then

• 23:48Jordi Hays?

  maybe come back to leverage and be like, I'm ready to dance again. But.

• 23:53Martin Shkreli?

  There's a lot of questions. Like one question is, what's his carry? You know, when a lot of firms in the hedge fund industry, believe it or not, they have clawback provisions for carry.

• 24:02John Coogan?

  Like high watermark provisions, right? So you have to clear something?

• 24:05Martin Shkreli?

  Sure. Everyone has a high watermark, but what's increasingly happened is a, is a carry provision where you have to return the 220 you earned if you have a severe drawdown, which, you know, could actually end up being a tough situation. Now, as you guys know, the fellow's getting, getting married this weekend as well, which is, you know, a little bit of tragedy with a little bit of triumph mixed in. But obviously, you know, when this kind of happens.

• 24:33Jordi Hays?

  How common are those clawback clauses? Because you have to imagine in this fundraiser, he had like massive, massive leverage, you know.

• 24:41John Coogan?

  Like demand was very high.

• 24:42Jordi Hays?

  Demand was very high. That feels like a term.

• 24:44John Coogan?

  The numbers were so good. Yeah.

• 24:46Martin Shkreli?

  It's a more institutional thing. And, you know, speaking of which, you know, obviously the guy basically had no experience. And again, in times like this, nobody wants to grave dance. And I'm not doing that. But I had some institutional friends, one of the biggest fund of funds in New York, for example, who passed on Leopold, basically laughed at him and said, you know, there's no way I could invest in this. And of course, you know, he goes on this tear, you know, makes like 20x or whatever it was since inception and does fantastic. And he feels sort of sheepish, but ultimately, you know, somewhat vindicated after all of this. So you did have a manager that had no experience, kind of a long only or extremely long bias, starts to do privates, which for many hedge funds

• 25:28Martin Shkreli?

  is kind of the death knell. You know, you know, when hedge funds put on their VC cap and try to do what those guys do, it often doesn't end well. And that goes back like, you know, 50 years, basically, of hedge fund history. And very few people have been able to do both. And the other thing I'd point out is we're going to see July numbers very soon here from, from quite a lot of hedge funds that I think were in the same trade.

• 25:54John Coogan?

  Sure.

• 25:55Martin Shkreli?

  And so this, this is not just Leopold's 100 billion gross. It's like that times maybe five or 10. And while the market's liquid, but that's a lot of downward pressure in a few weeks. And, you know, it's amazing to see this all compressed in a month, whereas like the dot com bubble took three or four years to like patiently go up and patiently go down. You know, seeing that compress instantly is interesting. What's going to happen next is really going to be fascinating. There's some theory out there that, you know, that we see all time highs again now that all this liquidity is out. And there's other theories there that we actually were just having this nice big downtrend and that this liquidity pop will fade and will be back down further and further. You know, nobody knows what

• 26:37Martin Shkreli?

  will happen, but it's certainly, while you're right that, you know, the Anthropics and Open AIs are having record business results, so is Microsoft and Google and Meta for that matter. There's still, I think, some more discerning questions about is, are, is this CapEx investment worth it? You know, they rewarded Microsoft for being prudent. They punished Meta and Google for not being prudent. So one wonders what, what the future will bring there. But yeah, out as crazy as things have gotten on Wall Street in many years, probably at least since FTX, and certainly crazier than the, the sort of Tiger Soft Bank venture boom of 21. And then, you know, really since then, the away insanity. So it's, it's

• 27:21Martin Shkreli?

  it's quite a spectacle. And I think, you know, no matter how much people want to learn the lesson of leverage over and over and over again, we all seem to repeat it. And, you know, it is what it is. But I think the Jane, the Jane Citadel Millennium, kind of like entire hedge fund complex sort of becoming this like shadow bank is quite interesting. You know, and that like these guys are, are sort of there to, normally the banks would sort of take this on the chin, but now that there's other folks who are like, you know, Jane was an LP, for example, and reportedly was not interested in bidding, which is fascinating. May have taken the Anthropic, however. Really unclear. We're going to learn more, obviously, as some days go on here, but it's, it's an unprecedented time and, you know, really

• 28:04Martin Shkreli?

  an insane story that may just get more insane as we learn more.

• 28:09John Coogan?

  Is there a world where the fund continues? Because I'm just hearing the numbers and it's like, you know, up at 45 billion, the actual money into the fund was maybe 5 billion or something. If you sell the positions, there's a world where you wind up with like 10 billion in a bank account and the LPs are like, well, we gave you five, keep going, get back in the game.

• 28:33Martin Shkreli?

  I hope, I hope that's the case for the LPs who are awesome, for the fund manager who obviously got quite a lot of whiplash. But, you know, at the end of the day, you know, there's, there's this concept on the street, as you guys know, like. Once there's blood in the water, like these positions would go to zero. Like, what's on micro on the $5, you know, just to liquidate this guy at three, right? Like, that's, you know, the craziest thing is like, that's, that's the nature of, of Wall Street. When this happens and there's a guy that has to sell 100 billion, you'll have a trillion dollars in front of them. Just like, you know, let's, let's see this guy cry uncle. And it's the saddest kind of most Machiavellian thing, but like he had, he sort of had to blow up. You know, there was no other ending sadly.

• 29:18John Coogan?

  Yeah.

• 29:18Martin Shkreli?

  Um, because of the leverage level, it's just like one slight, you know, I remember my old, my old boss was a Tiger, uh, Tiger portfolio manager, reminding me of the 2000 era where there's this very slight change in tone from one, uh, optical component supplier. And that's like him and his partner from Soros just decided to go like as, as short as they could. It's this, cause they knew ultimately these vulnerable hands were sort of sitting there. After the easy part of the bubble was over, you had this like, okay, what's, what's next? Things have to get a lot crazier. You saw Dorkesh's tweet, things like that would have to sort of happen for there to be enough second derivative for somebody to be surprised.

• 29:59John Coogan?

  Yeah.

• 29:59Martin Shkreli?

  You know, everyone knows AIs in this boom, everyone knows chips are in this boom. What could possibly shock you to the upside? Not much. So if you hear any little like, ah, you know, we're not going to spend as much. The whole shit hits the fan and every, it's just too heavy. So I, I, I actually wonder if we're, you know, if we're not in for a longer, more protracted decline. Things feel great today, you know, we have this huge boom, uh, this relief rally. Um, and a lot of the froth is out of the system, but you know, what next? You know, I, I don't know that, you know, a patient and calm market is going to emerge because you had the hyperscalers and the big companies, they FOMO too. They FOMO just as hard as Leopold did, right?

• 30:40Martin Shkreli?

  If not harder. So this isn't just him, it's the whole world collectively saying, fuck, I gotta, I gotta go all in on AI. And it's, it's, and who, who had the guts, you know, other than one man, Tim Cook in the back saying, not me.

• 30:53Jordi Hays?

  Do nothing.

• 30:54Martin Shkreli?

  You know?

• 30:54John Coogan?

  Yeah.

• 30:55Martin Shkreli?

  Yeah.

• 30:55John Coogan?

  No, really, it is Tim Cook. Yeah.

• 30:59Jordi Hays?

  Yeah. The, the funny thing, you know, we, we had been joking, uh, we were joking in like Q4 when, you know, there, prior to like coding agents really starting to rip, you know, OpenAI revenue growth had like slowed a little bit and like there was some jitters and, and a lot of this stuff wasn't, you know, public at the time, but you, you could tell some of the kind of crossover types were like getting a little nervous, right? They kind of expected.

• 31:26Martin Shkreli?

  MAU DAU numbers.

• 31:27Jordi Hays?

  Yeah, yeah.

• 31:28Martin Shkreli?

  You know?

• 31:28Jordi Hays?

  Yeah.

• 31:28Martin Shkreli?

  It really plateaued.

• 31:29Jordi Hays?

  And, and, and then we, and then there was a correction. Like there was like briefly, you know, for a period, it was probably like eight weeks. It was like, okay, like, uh, and then it started ripping again. And we were taking like a sort of a, um, a bit of a joking, like victory lap being like, cool, like AI corrected, you know?

• 31:49John Coogan?

  Bubble popped, now we're able to build back sustainably. We're good from here on out. It's smooth sailing. No, I completely.

• 31:58Martin Shkreli?

  I think the most unexpected thing is it would be if we saw brand new all time highs for the entire thing. I think almost everyone on Wall Street is skeptical this will happen, which means it has a chance of happening.

• 32:09John Coogan?

  Yeah, bullish.

• 32:11Jordi Hays?

  So you're saying there's a chance.

• 32:12John Coogan?

  I love it. Can you, uh, can you give me a little bit more insider baseball on, uh, what it takes to unwind a big position, uh, as a shareholder? Because, uh, a lot of people who are not inside the hedge fund world, uh, are sort of, uh, maybe confused around, okay, yeah, you own, uh, $50 million of a $1 billion, uh, chip stock. Can't you just dump that on retail? Can't you just like sell, market sell that on E-Trade or Robinhood? And in fact, it's much more complicated when you're at this level, even though it's public markets. There's not just a big button. Can you walk us through what it actually takes to like?

• 32:54Martin Shkreli?

  Yeah.

• 32:55John Coogan?

  Sell a big position when you're at that level?

• 32:59Martin Shkreli?

  Yeah, there's, there's a lot that goes into it. Interestingly, so the first is you have this advertisement system. So if you sell into the, into the market, you can try that. And those, that's called selling into the screens. The screens are the numbers on your screen. Anybody could buy and sell, Robinhood, whatever. So you don't normally do that if you, if you can help it. Uh, selling on the screens is at least somewhat quiet. You can just sort of trickle out. There's always this conspiracy that as I'm selling on the screens, there's some guy who's can see my screen. And he's like, this guy's got a B-Watt market order, sell 10 million shares. That's like, you know, I'm going to tell somebody and that knowledge would be very, very powerful. And there's even some even crazier conspiracies, uh, out there that quants could actually use different,

• 33:42Martin Shkreli?

  all kinds of insane, you know, ideas around what they can do to sort of sniff out that this is happening. So there's people that are scared of that. Then you can pick up the phone and this is the way you'd normally do it. And you, you'd call Goldman and you say, listen, I need to sell five, you know, five million shares of, of Microsoft or something like that. And they say, hmm, you know, should we take it or do we find a guy that wants to take it? And they'll sort of try to decide. Now, Microsoft is easy. If you're trying to sell share in AI, a NeoCloud in Australia that nobody wants, that's a tough one. And you own like 10 days of volume. So if you try to hit the screens, you have 10 days of volume. You, you'd have to be the entire volume for 10 days before you'd be out. You'd probably take the stock down 50% or more and you don't want to do that.

• 34:26Martin Shkreli?

  So you try to, you know, do this advertisement process, um, you know, and you basically can post in the stock market that you are a best seller of a stock. And you can post that your, your four digit, what's called market maker ID. And, and so Goldman's is GSCO. So GSCO would be a seller of say, you know, Nebius, which was one of his positions. And so you'd call up, you'd say, okay, Goldman, I'm a client too of Goldman. Uh, you know, what do you got on Nebius? And, and the guy would say, listen, we got a pretty big seller here, you know, and say, how big? You know, half a million shares and he's like, a lot bigger, you know? And so you'd say, hmm, okay. Cause they have to advertise that, you know, they're working your orders. So they have to sort of tell people that there's a seller.

• 35:10Martin Shkreli?

  Uh, they're, they, they kind of are trying to be coy about how big, but they're not going to waste somebody's time either. So the guy who's heard that there's a big seller, well, he might turn around, he's not supposed to do this. He sort of might turn around and say, you know, there's a huge seller of Nebius out there and I'm just a little baby fish. Maybe I could short 50,000 shares and get in front of this guy. If you're an actual interested buyer, you might also still be nervous because you'd say, well, if he's really got a ton of size, I might have to be judicious about, about how I step in. And so if you combine that with the sort of like pressure in the market and you add it all up. And then usually what you do is you'd have say, oh, I know a guy that works there. And let's see if he's returning calls.

• 35:54Martin Shkreli?

  And, you know, when you hit up the guy and he's not on Bloomberg, it's hard to reach. It's kind of like, well, it sounds like it could be them selling. Uh, so it's not too many people that own that many shares of that security. So you look at the holders list and you're sort of like, who could it be selling 10 million shares? So you call fidelity and they say, no, we're not selling. You call the next guy, no, we're not selling. Next guy's an ETF, next guy's a index fund. You know, it's gotta be him, you know? And so if it's them and there, there's, there, and then you start noticing all of their positions are down, it gets really hard. So ultimately the bank decides because you might say, you know, I don't want to sell. The bank says, I don't care what you want. We're, we're selling regardless. And Goldman Sachs is not in the business of holding AI stocks.

• 36:37Martin Shkreli?

  You know, we're going to sell at any price we can because our board would rather know for sure that we're down a billion and just take the, rip the Band-Aid off than to wonder if we could lose 50. And so it's Goldman's position that we're just going to just cut, cut this, cut the arm off right now before it metastasizes. And so they'll do a fire sale and of course Goldman's smart, they're going to reach out to a guy like Citadel or somebody else to place it carefully. But selling the whole portfolio in one shot was a very smart move. Now, again, we've heard the discount could have been as, as big as, you know, 20 to 50%, which is, you know, mouthwatering discount to buy, you know, some quality companies at. But to end it and have finality, what was really to answer the question finally,

• 37:20Martin Shkreli?

  what you really needed to do is the buyer of these stocks has to have the liquidity to hold them for five years and do nothing. Because the market, guys like me and to a very small extent, and guys to much bigger will sit there and say, I don't think you can hold this. And they'll start shorting it and shorting it and shorting it and trying to make you cry uncle. Kyoshu in Japan, one of Leopold's holdings, also one of mine, is trading at three times earnings. You know, they basically forced you, you're forcing the guy to, to really, you know, uh, to sell. And if you're going to hold this stock, you have to make sure that you can hold it until it's two times earnings or one times earnings. And the only player big enough and more powerful enough to, to sort of hold $100 billion and not blink is somebody like Citadel. And even still, some people, the rumors out there, there are the people who are going to try to trash your Citadel,

• 38:05Martin Shkreli?

  which I wouldn't advise, uh, you know, but something like that where, you know, maybe they'll now have to suffer the same contagion. So it's a very crazy time in the markets and, and I don't think we've seen everything yet. Because I do think there are some large tech funds that have had the same trade on. I do think liquidation is over thankfully, but I do think that there are some funds that are about to be found out to be down 30% or down 40% or something.

• 38:30John Coogan?

  Take me through the mind of Ken Griffin, like a couple of weeks ago. There's this rumor that he was sort of like pushing or signaling that there might be a rate hike. But what I'm interested in is if you suspect that there's going to be a fire sale on X, Y, and Z companies, is there a world where you build the hedges before you acquire those assets? Or is that two, four D chess? Because that, i- i- if they, if they wind up acquiring these for 50%, 20% off, but they already have offsets, then they sort of come in market neutral. Is that possible?

• 39:07Martin Shkreli?

  I don't think so. So I'm familiar with the Citadel's performance, uh, for this month, which is surprisingly up. So I think they're probably one of the only hedge funds in the world that's up this month. It's up.

• 39:17Jordi Hays?

  So they were actually.

• 39:18Martin Shkreli?

  Very small, very small.

• 39:18Jordi Hays?

  They were actually hedged is what you're saying.

• 39:21Martin Shkreli?

  Yes. They have a diverse platform of different businesses, a guy trading weather, a guy trading rates, a guy trading stocks, you know, about a thousand guys trading stocks. And they have a computer fund, uh, you know, called Citadel Securities that, that is a market maker that trades a good chunk of the volume of every instrument in the world. And ultimately I think that.

• 39:44Martin Shkreli?

  The the prime brokers, the Goldman's and Bank of Americas, they do so much business with Citadel. And they've done this before where they know who to go to, just the same way the US government went to Warren Buffett when they wanted to shore up Goldman.

• 39:56John Coogan?

  Yeah.

• 39:56Martin Shkreli?

  They know that the right person to call is Ken, and he is really going out of his way to make himself the guy to call. And I think that is a great brand because you may not need to be that guy more than once every decade. But look, once a decade to make a free five billion or 10 billion is a great, great guy to be. And, you know, it's it's sort of like he becomes a dependable trusted partner to these banks. And if he wants something from the banks, he's helped them. Because without him, they might have had to sell that at a negative number. In fact, some people think, I don't think this is what happened, but some people actually think the equity in Leopold's prime brokerage accounts went negative.

• 40:35John Coogan?

  Okay.

• 40:36Martin Shkreli?

  Which I think is, you know, something that, again, the Goldman's and Bank of Americas try to stop you before you get there.

• 40:43John Coogan?

  Sure.

• 40:43Martin Shkreli?

  But, you know, they also don't want to sell, like I said, share in AI, which is an illiquid, tough to sell security.

• 40:49John Coogan?

  Sure.

• 40:49Martin Shkreli?

  You know, they'll sell out your Micron very fast, or you'll sell it out before then. But if you're left holding this bag of like a liquid crap that you have 60 days of volume to get out of, it's pretty tough to to sit there and tell your prime broker, don't worry. Which is why, again, I think he needed cash. Probably somebody on Monday or Tuesday tapped them on the shoulder and said, your margin's looking a little thin, you know, can you can add, you know, a couple billion here or more? And things happen so quickly that there was just no time. And, um, yeah, it's, I think, I think Citadel learned about this at the 11th hour.

• 41:24John Coogan?

  Yep.

• 41:24Martin Shkreli?

  As every, as you're supposed to, you know, the firm didn't leak out that they were hurting. They didn't have, to my knowledge, daily performance. In fact, from what I'm told, situational awareness as a young hedge fund was not so great with communication, not surprising. Especially with monthly and quarterly letters, could have been more timely on some of those. So it's a small group of a couple of guys. So I don't think that this was the thing where-

• 41:49Jordi Hays?

  Rewind, what was it, only a month ago that the, or-

• 41:53John Coogan?

  13F was late.

• 41:54Jordi Hays?

  13F was like late and everyone was questioning like, did he work out, did he work out some kind of deal to get it confidential? But it it sounded like you just like, didn't get around to it. They had other priorities, maybe.

• 42:08Martin Shkreli?

  Yeah, I mentioned, uh-

• 42:10Jordi Hays?

  Do you think you can rebuild a career as a venture investor? Because like in venture, you're just, you're just like gig along always. Like, it's like, you know, one of the few forms of investing where it's just so hard to get out of position.

• 42:25Martin Shkreli?

  That's the thing. I mean, why become a hedge fund manager? This is, I have a friend who wants to start, I have a friend who wants to start a hedge fund. I told him, this is the most painful, horrible business in the world. Why do this? And if you start a newsletter business that makes 100 million a year, even 50 million a year of revenue, you've done better than almost every hedge fund on the planet. Like, you do not want to do this job. And the reason, you know, the, the reason people do it, and I did it too, and I would never do it again, is it's the sexiest thing in the world. You think you're, you know, the glory is-

• 42:56John Coogan?

  Master of the universe.

• 42:57Martin Shkreli?

  Is incredible. Yeah, you're the master of the universe. And I had friends of wanting to quit really high profile jobs to be a hedge fund. I was just like, you're, you're out of your mind. You don't know what it, what this job is. It's waking up at 3 a.m. checking Korean stock prices and, you know, waking up back up at 6, you know, wondering what's, what's happening in the world, stuff like this. And there's absolutely no productive thing you're doing, you know, you're providing capital. You know, but other than that, you know, you're really playing this high stakes, crazy poker game. And, you know, it's certainly fun and interesting, but when it's painful and, and raw, you know, I hope he'll, he'll do something. You know, he's a brilliant person, brilliant people like that. I mean, look, Peter Thiel had a hedge fund that didn't quite have this level of liquidation or anything like that.

• 43:41Martin Shkreli?

  But it had a rough last few years. And, you know, Thiel was able to, obviously not only continue his venture investing efforts, creating one of the biggest funds of all time, one of the most successful funds of all time, investing personally, doing amazing, also getting back into macro trading with Thiel Macro, which supposedly has done well. So I do think there is this like period of a few years that, that, you know, he can reset and take the learnings, take whatever talent and skill, and certainly genius that nobody denies that he's a brilliant guy, and rebuild. I, I don't think it's the end at all. And, um, I hope he's keeping like that even temperament about this because, you know, I, I think a lot of people respect him quite a lot.

• 44:21John Coogan?

  Hundred percent.

• 44:21Martin Shkreli?

  No matter how this turned out, you know, he'll be back and, and successful. But it is a little bit of a humiliation thing that I think most people on Twitter and other places are sort of saying, well, the market tends to humble you. And this is like an extremely humbling moment from being, you know, just two months separated from the biggest hedge fund on planet Earth and most successful to being forced to, to sort of liquidate. That is quite a rapid sort of, you know, reversal.

• 44:48Jordi Hays?

  Also, just imagining what the fund looks like in two or three years if you just survive, right? I can, you know, he, you know, there, there was a clip that was circulating yesterday from his, you know, appearance under our cash where he's like, oh, there's obviously like 100x, you know, left before AGI, right? So like, he was like, up, you know, 20x or whatever, thinking like, I got, I got so much room to run, but just couldn't stay in the game. Um, I gotta say-

• 45:19Martin Shkreli?

  Extrapolating is always a risk.

• 45:22Jordi Hays?

  I gotta, um, yeah, I gotta say, it felt like a, felt like a huge moment for you and your business, just because everyone, the whole finance world was learning about the situation from your posts. Sure, a lot of people were glued to your terminal. And it felt like a, a changing of the guard because, again, you were getting pushed back. Um, you were getting some pushback, but then two hours later, it was like Financial Times and Bloomberg and Wall Street Journal, they're all kind of, clearly they needed a couple hours to like run it down. Um, but you got to it first and, uh, yeah, I was, I was quite impressed.

• 45:59Martin Shkreli?

  Thank you. Yeah. I mean, I, I think that, you know, we've talked about this in the past. I mean, there is a change of the guard. You guys helped change the guard i- in your space. And I think that, you know, the folks at the Journal, the folks at Bloomberg, the folks at these other companies, they're fantastic reporters, but they're not active or former players. And, you know, we will hear, we will always hear things before them. Uh, because, especially on the street, um, because that's just-

• 46:25Jordi Hays?

  Well, and the crazy, the craziest thing is you, you actually waited until it was like over, effectively, to, to share, right? Like you had been hearing about this for days.

• 46:36Martin Shkreli?

  There's a lot that we sit on that we don't want to share.

• 46:37Jordi Hays?

  Yeah, yeah, yeah. And we, you know, we've been in that position like hundreds of times where it's not appropriate to share anything. And sometimes you're sitting there being like, I'm really surprised that like legacy media hasn't picked up on this story. It feels like it's just common knowledge and there's, there's a definitely a time and place to just not, not say anything and, and let something work its way through the system.

• 46:59Martin Shkreli?

  Yeah. I mean, to give the devil their due, the information is also quite good at, you know, this type of thing. And they are particularly good at, at scoops on OpenAI. But the, uh, which I still haven't unraveled how, how, but they're obviously very good reporters. Uh, but a reporter in a place like that and trad media, they generally don't care about burning bridges and resources or contacts. So they want that news out yesterday. You know, I do care. And it also is a conflict of interest because I don't want to hurt somebody that's giving me good information and betray their confidence because I have to keep the confidence of these folks if I want to keep talking to them. But I also, in the case of this situation,

• 47:42Martin Shkreli?

  as the carnage is unfolding, you know, there's sort of a, the, the balancing, the need for everyone to know with the need for, you know, protecting friendships and relationships, you have to make that judgment call each time. And I, I hope that our customers understand that there will be things that we know before others we can't disclose because we want to protect, uh, folks and protect our friends. Bloomberg, Wall Street Journal, they'll never do that. They're, they're, they're always going to serve their customer who's the reader. We can't necessarily do that. You probably know things about a litany, like you said, hundreds of times, different fundraisers going on, different things like that. And you have, we have to all keep our lips closed because, you know, that will be the last time we hear about a fundraiser. And, and I think that this was a situation where it sort of merited discussion.

• 48:26Martin Shkreli?

  It was going to happen momentarily anyway. I, in fact, to your, to your point, the thing that got me to publish was my friend saying, everyone is hearing this now. Once that happened, I said, all right, well, you know, it's time to, I can let the cat out of the bag. It's about to be let out anyway. So.

• 48:42John Coogan?

  Yeah. Uh, I have two more quick questions if you have a minute. One is, uh, uh, just about how leverage works at a hedge fund. I think, uh, you know, again, from the retail perspective, from the much smaller player, you might know that you can go to a, uh, you know, a brokerage and get a little bit of leverage. But what does the process look like as you're scaling into the tens of billions of leverage? At a certain point, you have to go to all of the banks, certain banks, who's actually, like, what is that process to get leverage at that scale actually look like?

• 49:20Jordi Hays?

  And also, let's, let's appreciate for them, for a moment that I feel like just a month ago, the West Coast broadly was taking this insane victory lap, being like, the West Coast is eaten, Wall Street. Like, the best and biggest hedge fund is no longer on the East Coast. Like, we just have everything now, finance and technology. And then, and then just deeply humbled, uh, within the span of, of 30 days. Uh, and it turns out, turns out you guys over there, you, you know a thing or two, and here we are asking you, so how would one go about getting?

• 49:58Martin Shkreli?

  So one of the things that I think is not well understood is the prime broker

• 50:02John Coogan?

  Yeah.

• 50:02Martin Shkreli?

  Make a spread on, I think somewhat understood is they make their business to make a spread on financing. So if you go to a prime broker and say, I'm never going to use leverage. Uh, never? They say, I'm never going to use leverage and I'm never going to really trade a lot with, with, with your firm. You're just going to sit there and say like, we'll still take the assets because we can rehypothecate them and lend them to the the guys that are going to take leverage, but in general, that's not a great customer. So if they're making a 1% spread, which is actually is relatively huge amount. And you're borrowing 4X, you're actually giving them 400 basis points of free money, which is sort of fantastic.

• 50:43Martin Shkreli?

  Um, in fact, you know, their borrowing costs are probably less than, uh, so far. So, you know, they may be getting as much as 600 or 800 bips of, of free money on huge amounts of capital. So, uh, leverage is the best friend to a prime broker. Now the risk guy is sitting there saying, well, wait a second, you know, I, I love lending, but I don't like lending to concentrated portfolios. I don't like lending to short sellers. Uh, you know, short sellers can, can get big, big, big, uh, you know, leaps in their portfolios, like GameStop, for example. So the most the long can lose is a hundred percent, but if a 4X lever, the most long can lose is 25%. So, you know, there's sort of this mix of, of, of things you have to think about.

• 51:23Martin Shkreli?

  I think the getting into the privates is usually like, for me, a lot of really bad sign for almost every fund because it's as tantalizing as private companies are, there is a whole group of people on the West Coast who are much better at that than, than the guys in the East Coast. And of course there are funds now like Altium and Co2 and others that, that are doing both and doing both.

• 51:42Jordi Hays?

  Yeah. And what made that, what made it so tempting, obviously for Leopold, that just how close he is to like, he couldn't be closer to Anthropic. And it's a company that over the last six months has had a hundred X the demand relative to the allocation, right? So it just felt like, you know, and I don't know, who, who knows what the, what the structure on those investments look like. But it's like, if you're going to break your rule and do privates, like, then that's the company to do it with. But then you still get into a situation where you're like, wow, I really wish this was more liquid.

• 52:17Martin Shkreli?

  Yeah, I can't press the sell button.

• 52:19Jordi Hays?

  Give us an update before you leave on, on Korea broadly, because, uh, you know, a lot of people are commenting on, on, on just how similar Leopold's approach is to Korean retail. I don't know how true that is, but I can imagine like it's, uh, there's blood in the water over there and the whole country is probably in shambles.

• 52:44Martin Shkreli?

  Yeah, I think so. I made a Kelly Criterion Calculator and like a little portfolio simulator tool that, you know, basically and Paul Tudor Jones said this a while back, and I had a problem with this. Every single trader out there makes, makes one, seems to make the same mistake over and over again, which is their position size is probably two to 10X more than should be. And if you actually, you know, so it sounds nuts, right?

• 53:08John Coogan?

  Yeah.

• 53:09Martin Shkreli?

  But if you actually run the simulator and we, ours is a Kelly dot, Kelly, so Kelly was a, a guy at Bell Labs. He was a member of the technical staff. He's original, OG, uh, and was yes. And, uh, and so Kelly came up with the proof called famously the Kelly Criterion, which gamblers use. Mostly was a gambler thing before a financing. And it proves the optimal bet size and the optimal bet size is your edge subtracted by the reciprocal event. So if you have 55% edge, your optimal bet size is 10%. That's still quite volatile for folks. And so people do half Kelly or quarter Kelly. Most, most folks don't, actually don't have an edge when they trade, but they're, if, if they did have an edge, they're trading as if they had

• 53:50Martin Shkreli?

  a 4X or 5X Kelly edge, which is interestingly like, you might sound, okay, well, that just sounds swashbuckling and like, guy takes a lot of risk. No, if you run the simulator, you will go to zero each time. And the simulator is a really cool tool that shows you even with a 60, 40 edge on every trade you make, you'll go bust if you bet, if you overbet. And it's, it's an eye opener. We might say, who has a 60, 40 edge in the stock market? Nobody has 60, 40 edge. But you will absolutely go bust if you don't size correctly. And it's something that I've had to learn very painfully, very, you know, over, over the years, uh, that I'm almost always overbetting. And I think every fund is, is sort of the same and certainly every retailer is the same.

• 54:32Martin Shkreli?

  And it's just sort of a weird variance math game that very few people actually map out and say, can I simulate portfolio? And just to see what is the sort of the right thing to do, uh, in most cases. And in fact, I, I had a, uh, after I left the Tiger company I worked at, I worked in a, uh, briefly in, uh, the office of a guy who worked at, at SAC Capital, not called Point 72 for years. And he was one of the best managers, who's a quiet guy, nobody's ever heard of, kind of retired. But I got to watch him before I set up my own hedge fund and did the exact opposite, way overbet on everything. I got to sit with this guy for a few, few months and I was astounded. So what I found is that, you know, he was managing, I don't know, three or 400 million of his own, basically. He almost never used the capital.

• 55:15Martin Shkreli?

  You know, 80, 90% of the capital was just cash and he would just make these tiny trades. And the guy had almost never had a down, I think his record is he never had a down quarter in 20, 20 something years of trading. And he had like 20, 30% returns, which is great. And the guy just kind of, you know, just did these little, little nibbles and he never lost money. And it was an incredible thing. And then of course, the second I get the chance to get some capital, I'm 8X leveraged.

• 55:43Martin Shkreli?

  You know, and it's just like, you know, it's the dumbest thing in the world, you know, and, and you live and you learn.

• 55:47John Coogan?

  Psychology, psychology. Well, thanks so much for coming on the show and breaking it down. This is always a great time.

• 55:52Jordi Hays?

  Yeah. Looking forward to, uh,

• 55:54John Coogan?

  Yeah. Seeing where we go from here. Have a great week. Have a great weekend. We'll talk to you soon.

• 55:58Jordi Hays?

  Cheers, Martin.

• 55:58John Coogan?

  Goodbye. Let me tell you about Codex. Codex is a powerful workspace for getting work done with AI agents. Whether you're writing code, analyzing data, creating content or automating business workflows, Codex helps you move projects forward from start to finish. We have a couple of guests coming in soon, but first I want to talk about Ferrari. I don't know. Did you want to jump straight into the next guest?

• 56:21Jordi Hays?

  No, let's talk about.

• 56:22John Coogan?

  I want to debate this because there is news in Ferrari world that the Ferrari EV, the Luce, designed by Johnny Ive, has already hit the 2026 sales target. The haters are in shambles. Everyone doubted that this would sell. And the Italian carmaker reports, strong demand from China for electric model, derided for its unconventional design. There's a whole bunch of interesting tidbits in here, uh, in the Financial Times article. Ferrari has hit this year's sales target for its first electric vehicle on the back of strong demand from China, despite a polarizing design that drew backlash from investors and enthusiasts. Remember even the former CEO, former chief design officer, former executive

• 57:07John Coogan?

  came out and said, this is not a Ferrari. There was a lot of, uh, back and forth in the timeline. I could have designed a better one with, uh, ChatGPT. A lot of people threw out different designs, uh, but this one is selling, at least according to the Financial Times. The Italian group has not disclosed its target for the Luce, but two people with knowledge of the matter said it had aimed to sell this year just under 500 units of the EV. Not a lot, but their goal for, by 2030, over the next four years is to get to 2,500 units. So 500 a year for four, five years, that's where they want to get here. And they say they're on track. And so this is priced at 550,000 euros, 650,000 USD, something like that.

• 57:51John Coogan?

  One of the two people said the target had been reached earlier in July, just two months after its controversial launch, when critics on social media derided its unconventional styling. And, um, there's also an interesting line in here that Ferrari says they gave strict instructions to dealers not to force its traditional petrol-loving collectors to switch to electric cars. Said, if you want a Luce, we'll give you a Luce, but we're not going to make you buy a Luce in order to get in line for an SP3, SP4, some special F80 thing that's more limited. Just if you want it, it's here, it's a choice. And a lot of people made that choice, according to these insiders. What do you think? Give me the pushback and then we'll debate it.

• 58:33John Coogan?

  First, let me tell you about console while you think about that. Console is built AI agents that automate 70% of IT, HR and finance support, giving employees instant resolution for access requests and password resets.

• 58:43Jordi Hays?

  I was pausing because I wanted to start with something nice. I think, so the videos that I've seen of it on the road, it does look even more strange than in the images.

• 58:57John Coogan?

  What is this photo?

• 58:58Jordi Hays?

  That's not, what is that?

• 59:01John Coogan?

  The team just accidentally put in some random car.

• 59:06Jordi Hays?

  Okay, so, so the car, the car is strange. I love the interior, but the car overall is strange. It's still unclear to me who it's really for, but they are finding buyers. The, the, the idea that, that buying the Luce, like Ferrari is saying, we're not forcing any dealer to push this car or whatever, but the idea that it's not going to have some, whether or not you bought a Luce is going to have some weight on your future allocations to me is just insane. There's just no way that that's true because every single dealer is going to look at their client list. They're going to look what cars have they purchased?

• 59:44Jordi Hays?

  Like, we know, we, we know multiple Ferrari collectors that are buying two, two separate cars that they don't even want of the same style in order to gain status within the dealership and show that they're a proper, a proper collector and they're properly sort of cherishing the brand.

• 1:00:06John Coogan?

  Yeah.

• 1:00:06Jordi Hays?

  And so I'm not at all surprised that they've sold 500-ish units. That's about as many as I would have expected for 2026. I actually, I guess if you ask me, I maybe would have thought they would have done more. Like, to me, this was a car that was so different than the rest of their cars. It serves a wildly different use case. I would have expected their sales targets to be quite a bit higher, simply because when it comes to their really special cars, they make about 500 of them.

• 1:00:33John Coogan?

  Yep.

• 1:00:33Jordi Hays?

  And so I would have expected at least 500 sales guaranteed. And then you would hope there was a bunch of incremental buyers, people that are like, yeah, I actually don't want a Ferrari sports car, but I do want a daily and why not go for a Ferrari daily?

• 1:00:49John Coogan?

  Yeah.

• 1:00:49Jordi Hays?

  So you would have thought that there would have been like, 500 for the first year was like my very base case and I would have expected a bunch more on top of that. So I think they're positioning this as a win. I think people are going to love the car, if you ignore the price. And, but I don't think it's the win that.

• 1:01:08John Coogan?

  The Pope in the Luce is so good. Okay, three points in response to yours. Two, uh, first point, uh, the design's absolutely growing on me. Like, watching these videos here, it just looks way better than when we first saw the, the first pictures. And I don't know if it's just distance and I'm becoming more familiarized with it, but, uh, it looks a lot better, even the exterior. I've always agreed on the interior. I think everyone agrees on that, but the exterior is looking better to me somehow. I don't know if this is just like, I'm getting used to it. Uh, two, um, yes, there are, there are the 4D chess Ferrari collectors who are saying, I know I'm not getting pressured, but I'm buying one anyway because I think it'll help me jump the line and I'm doing

• 1:01:52John Coogan?

  that independently of any pressure that's coming. Uh, but there's also just collectors that are like, this is going to be a piece of Ferrari history regardless of if they, what if they never make another EV again? What if the, what if the Luce is canceled next year and Ferrari, literally for 30 years, never makes an EV? This thing is, it's important historically. It's an interesting thing to have in your collection.

• 1:02:13Jordi Hays?

  Yeah, that's true.

• 1:02:13John Coogan?

  And then there's also just people that are like, I want, I, I'm a true collector. I want every possible Ferrari experience. Give me the SUV because I want to see what that's like. Give me the, uh, the, the mid-engine. Give me the front engine. Give me the, the, the, the electric. Give me everything. Give me a vintage. Give me a new one. Give me a, a, a road car. Give me a track car. Give me, I want, I want a Ferrari F1 car. Like, I'm just, I want all of the experiences because I just want to experience everything Ferrari because I'm that deep with the brand. So there are, and are there 500 of those buyers? Maybe. Um, and then, uh, and then lastly, the question of, you know, what was their goal? I don't see this as their Urus. I don't see this as they were trying to make a mass

• 1:02:57John Coogan?

  market daily. I think that they were trying to make a very iconic, very iconic classic, very, uh, contrarian car that was bold and weird and different. And it happened to be dailyable. And the fact that it is dailyable is what is weird about it. Like, they're not known, the brand is not known for being able to be dailyed and yet they made one and that makes it weirder. And, and I don't think that they were going after their, this is something that will be like a Lamborghini Urus, which they can sell in mass volume and completely change the profile of their, of their sales curve.

• 1:03:36Jordi Hays?

  My view is that they, I think those are all great points. My view is that I don't think they should have done a car like this because I do think it hurts the brand. Unless it was going to drive so many sales that it could make the rest of the cars that they make better, right? Like what the Cayenne did for Porsche, or what the Urus does for Lamborghini, right? This sort of like workhorse product that can fund a lot of the, the, the, the other cars that are more halo cars.

• 1:04:03John Coogan?

  Sure.

• 1:04:04Jordi Hays?

  And, uh, and, and so, yeah, I just, I don't think it makes sense if they sell 2,500 units, other than it solves their sort of emission, European like emissions, uh, standards issue, right?

• 1:04:17John Coogan?

  Yeah. I do think a lot of people buy a Urus because they want a Lamborghini, but they need a daily. And so they go with that because it says a lot. It's a very bold choice. And I don't think that's the calculus here because you're paying so much more. Whereas I believe the Urus is cheaper than most of the Lamborghini sports cars, whereas this is substantially more than just going and getting a 296.

• 1:04:40Jordi Hays?

  Yeah, and Ferrari has a, an SUV.

• 1:04:44John Coogan?

  Yeah.

• 1:04:45Jordi Hays?

  That.

• 1:04:45John Coogan?

  Is cheaper than this.

• 1:04:46Jordi Hays?

  Is significantly cheaper and it, and it is much more desirable to the Ferrari clientele because it has a naturally aspirated V12.

• 1:04:53John Coogan?

  Yes. But at the same time, the Purusangue, the SUV that you're referring to, had a lot of pushback when it came out. So did the SF90 and they all look really great now. And so the anti halo, halo car theory also holds. But I think it looks good and I think it's going to turn heads in a weird, weird way that very few cars, as we are collapsing and we're getting to, everything is white, everything is gray, everything is black, uh, everything is the same rounded, the, can you tell the difference between a McLaren or a 296 or a Lamborghini? They're all sort of starting to look the same like supercars. And then there's the whole hypercars, the Batista and the.

• 1:05:32Jordi Hays?

  Yeah, I'll give you this. I think certain specs of the Luce are going to look, they're going to look funky, but they're going to look cool and they're going to be a joy to drive.

• 1:05:41John Coogan?

  I just liked that Johnny Ive in the Financial Times, they sent this photo of him looking over. We got to pull up the, go to the, go to the Financial Times article, scroll down to, uh, the picture of former Apple designer Johnny Ive, who designed the Luce. And he's just like.

• 1:05:57Jordi Hays?

  He's like, what did I tell you?

• 1:05:58John Coogan?

  You doubted me? You doubted me? You doubted me? You doubted me? We, we couldn't sell 500 of these. We did. Uh, it, it's a true, it's a true victory lap photo and I love it.

• 1:06:09Jordi Hays?

  Yeah, great photo.

• 1:06:10John Coogan?

  Anyway.

• 1:06:11Jordi Hays?

  And I, and I can't wait to see one in person. I'm excited.

• 1:06:13John Coogan?

  Two.

• 1:06:14Jordi Hays?

  Uh, let's not keep.

• 1:06:16John Coogan?

  Tell you about Figma first and then we'll bring in our next guest. Agents meet the canvas. Your AI agents can now create and modify your Figma files with Design System contact. And we have Guillaume Verdon from Extropic, long overdue, but very excited to have him on the show. Guillaume, how are you doing?

• 1:06:30Speaker 03

  Boom.

• 1:06:30John Coogan?

  Welcome to the show.

• 1:06:32Speaker 03

  Doing great, doing great. Longtime fan, first time caller. So.

• 1:06:35Jordi Hays?

  Great to have you on here.

• 1:06:37John Coogan?

  Congratulations.

• 1:06:38Jordi Hays?

  During a massive moment.

• 1:06:39John Coogan?

  Massive moment.

• 1:06:39Speaker 03

  Thank you. Thank you. Long time coming.

• 1:06:42John Coogan?

  Uh, give us the state of the union on the company and then the news, uh, and the deal that's going on, the letter of intent.

• 1:06:49Speaker 03

  Yeah. I mean, so, you know, at Extropic, we've been, uh, pioneering this new form of computing from the ground up called thermodynamic computing. You know, our whole thesis is that right now everyone is focused on scaling things up, buying more GPUs, bigger data centers. We want to scale things down. We think there's going to be a race to densification of intelligence. So we started that about four years ago, which was very early to worry about energy. It sounded crazy to say, we're going to run out of energy four years ago, but here we are. And so we've reinvented how to leverage a transistor for the era of generative AI. So generative AI, for those not familiar, is a probabilistic algorithm, right? You're, you're sampling from these distributions of like, okay, if I give you, if I type in the word cat, what sort of image do I get out? It's, it's kind of random

• 1:07:32Speaker 03

  at the output. And so that is a probabilistic workload. It turns out you could run electronics probabilistically and at, at much lower power. And we pay a huge price to maintain our electronics in a deterministic state. So it doesn't make sense to run probabilistic workloads on deterministic electronics if we're going to pay a huge tax to know the state of our computer at all times. So our insight is if you use. Very little power. Essentially, your computer can operate probabilistically and you can train it directly, just like a neural network. And you can map your algorithm that is a generative AI algorithm, like a diffusion model, directly onto the physics of the hardware. And so that's kind of the vision. And it's been, it's been a journey, essentially, you know, a year, year and a half ago, we

• 1:08:17Speaker 03

  had our first prototype in silicon. There you go. X zero. And this one we taped out with, with TSMC. We've also now done global foundries and that, that demonstrated that actually, because when you operate electronics probabilistically, you can use far less transistors for these, these algorithms, you don't actually need the smallest transistors. And right now, the reason people have to go offshore is because the best cutting edge fabs are all offshore and they have the smallest transistors. And so what we demonstrated is that in principle, we can manufacture these chips in the US. And that was very interesting to all sorts of folks higher up. And, you know, we, we had some conversations and, you know, there's a, there's a very

• 1:09:00Speaker 03

  strong history of, you know, the government supporting the silicon industry. I mean, Silicon Valley was.

• 1:09:06John Coogan?

  Go back to DARPA, they created the internet, right?

• 1:09:09Speaker 03

  Exactly, right? And, and now, you know, we're, we're trying to go with, or I guess they're going, we're going with a modern twist where, you know, if, if the taxpayers are going to support R and D, you might as well get some upside as well and get some equity. And so this is what this, this announcement is about. It's with the Chips R and D office and, and, you know, we'll get into it, but.

• 1:09:30John Coogan?

  Yeah. In terms of where you want the first applications to be, it feels like different models are maybe sometimes designed around certain architectures. You see certain like GPT OSS runs really well on Cerebrus. And then you'll have another model that runs on an NBL 72. It's like rack scale. And then there's other models that can sort of run locally or run on the Mac mini or Apple silicon. And there's all these different pieces of the puzzle. And increasingly, we're starting to see where like voice models might be really good for those to run locally, but some crazy, long running AI agent might, may be fine to send off the server.

• 1:10:11John Coogan?

  Do you have a, an idea yet of where you think if things go perfectly, the first application might be like, where's the sweet spot?

• 1:10:21Speaker 03

  Yeah, we've been exploring a lot of applications, obviously running the model itself. The transformer is a big one. What we found is that, and we have a blog post coming soon. I guess this is a scoop here, but we have a blog post coming on, on a sparsity scaling law. So if you sparsify your model, because our chips have a sort of sparse structure. So that means sparse is just, you know, current GPUs, they have big matrices, which are these grids and, and basically every entry in the grid is, is busy, right? Like there's, there's something going on. Spars means there's a lot of zero. There's a lot of stuff not going, that's not activated. So our chips are really good at sparse operations. That's not originally what we're designed for, but if you really want to shove a transformer on our chips, you can do it.

• 1:11:05Speaker 03

  And if it's sparse, as long as it has the same number of parameters, you could reach the same sort of performance, which is interesting because for us, the flops are much cheaper per watt. So even though you use more flops, you get more intelligence per watt. So we have something coming out soon on that and teasing it here a little bit. But overall, we're really interested in diffusion models, you know, models for predictive control, for defense, physical intelligence, signal processing, you know, stuff you would use an FPGA for, you want to use one of these chips. So, you know, we have RTX as investors for that, for that reason, and similar defense primes, very interested, yeah.

• 1:11:44John Coogan?

  How are you feeling about the retrospective on effective accelerationism? Because it feels like, my interpretation is that you were 100% right at the time and that class of models didn't really pose any real risk. There was clear need for a build out and diffusion of this technology. But now we're in this like new, the last few months, there's been a new discussion over literally slowing down, literally decelerating. And it's coming from inside the leading labs, not just like doomers who are outside.

• 1:12:22John Coogan?

  How have you reflected on what EAC was, its role now, just AI optimism versus pessimism, risk? How are you thinking about all that now?

• 1:12:34Speaker 03

  Yeah, I mean, originally I wanted to just bring balance to the force. It was kind of a modern culture in Silicon Valley. It was just, just the doomer camp. And, you know, I was seeing the writing on the wall. If we just had the doomers, then that would eventually affect policy. And, and to me, there was a very biased view of the world. And so I think we kind of stretched the Overton window. It was okay to say no to doomers and say, that's a ridiculous model of the future, you know, Gregu, FUM, all that stuff.

• 1:12:59John Coogan?

  Yeah.

• 1:13:00Speaker 03

  But now, yeah, we've reached a point where, you know, the models are very capable. And, you know, the EAC view to me is just like viewing the whole world as a complex self adaptive system. And ever since the dawn of time, it's basically been PvP. Every form of life is becoming more complex and harder to predict. And then its adversary has to step up, get smarter in order to predict it, in order to compete. And if you do that slowly, then basically you can have a whole ecosystem and everything's good. But if one, one thing becomes much smarter and much more complex than others, then it can kind of control others and that's bad. And so I think, I think pace, stopping makes absolutely no sense.

• 1:13:41Speaker 03

  Pacing can make sense, but really it has to come with a really strong investment in, for example, cybersecurity and hardening things, because you can't pause things forever. Essentially, you just want to be adversarially robust and I'm all for that personally.

• 1:13:57John Coogan?

  It is very interesting reflecting on the doom arguments, how they were like, to your point about Gregu and FUM, it was not as precise as, as cybersecurity risk, which is some people were calling out, but the conversation was definitely distracted from the more practical, like difficulties about around slop and, you know, over investing and bubbles and all these different things that, that are much more short term that, you know, America will need to grapple with to actually, you know, deliver a positive outcome here. How are you, is your development process being accelerated by AI?

• 1:14:42Speaker 03

  Oh, absolutely. Yeah, yeah, no, absolutely. I mean, we, we use all the big, big model providers in-house and we try them all. We have agents constantly running, you know, for us, it's like we have to speed run deep learning. It's like you teleport back to 2011, you know, and there's no Alex net paper. And you have to speed run 10 years, 15 years of deep learning progress as fast as possible, right? But now it's like new game plus in a video game. You have all the power ups. You have, you have the AI. And so we're speedrunning progress very quickly. And, and, you know, we have online learning agents. We're training our own models as well, or post-training rather, sorry, as, as the cutting edge companies do.

• 1:15:27Speaker 03

  And so that, that's very exciting to me that, you know, current AI can help bootstrap and kickstart the next paradigm, the next substrate. And, and going back to the, your, your comment about the cycle, you know, my, my thesis was that, you know, GPUs are not the end game. And so, you know, we want to invest in the current cycle, but we should, we should hedge our bets, you know, as we saw today with Leopold, RIP. You know, you got to hedge your bets. And I think if we're all in on GPUs and we don't invest in the next generation, the next paradigm of computing and have a couple bets there, then when that pops up, you're going to get wiped out and we don't want that. And so to me, we're starting the next S curve. We're starting the next cycle. I know people are not over the current cycle, but everything is cyclical.

• 1:16:11Speaker 03

  But, you know, it's my responsibility to make sure, you know, we can, we can have build outs in the future that are, that are really power efficient. And, you know, it gets you better return on investment on your capital, whether it's on earth or in space or, you know, at the edge.

• 1:16:25Jordi Hays?

  Yeah, it feels like the, one of the, you know, you've been one of the loudest, biggest voices on, on X for the entire time that we've been running the show. We've, you know, had a bunch of your posts on the show over the years. And it feels like you picked a, you picked a product category that just by the nature of it was going to take time to evolve. And I think like, when I think back, it's like the challenge of. Showing progress. I mean, this moment is massive, right? It's a vote of confidence and it's very exciting. But everything that it took to get here, meanwhile, you're getting like hundreds of millions of views from some of the billions of billions of views.

• 1:17:09Jordi Hays?

  And I'm curious, like, yeah, reflecting on the last two years, do you feel like you've found the right balance between like you want to be getting attention and you want to maintain your voice, but you also want to be moving the business forward? And at any point, you know, X and Teapot specifically, if they feel like those two things are not balanced, they're going to like pounce and, and you know, take shots and all that stuff. And I know you've gone through that, which is why I'm excited for this moment to, for, but, but yeah, how have you processed it all?

• 1:17:40Speaker 03

  Yeah, no, it's been, it's been a journey. It's been a lot. It was despite, you know, allegations, it was never planned to get doxed. And, you know, I knew I was going after a very much a deep tech moonshot that was going to take some time to cook. But, you know, exponentials are slow at first and then they compound over time. Could I have had, you know, a product that, you know, would have had a shorter time to market and use the heat to make it grow? Probably, but you know, I was just dedicated to this, this one mission. I think it's the most important thing I could be working on and I've been all in since the beginning. But yeah, there's certainly a tension, like building in deep tech where you're supposed to be in stealth. You know, you have nation states trying to reverse engineer technology and you're trying

• 1:18:24Speaker 03

  to just reveal the minimum because that's your secrets is or your edge. But at the same time, you want to get buy-in, you want to shape people's beliefs like, hey, actually this technology is here, it's coming. Here's a hint, here's a prototype, here's a nature paper, here's this, here's that, here's some signal. We're going to have a lot more coming up next week, a big announcement for Z1 and all those products around it, including our stack. So.

• 1:18:47John Coogan?

  I love that framing of new game plus. It feels like there's so many founders from the previous era who grew big like SaaS companies and they're now sort of on new game plus moving a lot faster. It's a great formulation, great philosophy, and thank you so much for coming on the show and breaking it down.

• 1:19:04Jordi Hays?

  Yeah, congrats on all the.

• 1:19:05Speaker 03

  Thanks for having me.

• 1:19:06John Coogan?

  Yeah, we'll talk to you soon. Have a good one. Goodbye. Let me tell you about Railway. Railway is the all-in-one intelligent cloud provider, user favorite analytics to deploy web app, service, databases and more. While Railway automatically takes care of scaling, monitoring and security. Did you see that California startup Satyress unveiled a two-meter-tall Centaur robot designed to enter disaster zones too dangerous for humans?

• 1:19:33Jordi Hays?

  There's no way this is a real picture. Sorry.

• 1:19:35John Coogan?

  Go to the website. I mean, Satyress, Satyress, S A T Y R E S S.

• 1:19:41Jordi Hays?

  They made the demon robot to go into disaster. Imagine you're in a disaster zone, John, and through the fire and flames, you just see.

• 1:19:50John Coogan?

  Just kill me.

• 1:19:52Jordi Hays?

  Yeah, okay, okay. I actually am in Hades.

• 1:19:55John Coogan?

  I'm in Hades of this thing. Says no job is worth your limbs. That doesn't mean a job isn't worth doing. Do you think this is a prank? Do you think this is a joke? Or do you think this is a real company?

• 1:20:06Jordi Hays?

  I think if it's not a joke, then they gotta hit, they gotta go back to the design minds and do something else.

• 1:20:14John Coogan?

  Human-like torso and arms allow for.

• 1:20:16Jordi Hays?

  Now, this is a joke. On the website, it says this robot is more dangerous than it looks. Like, no, it looks dangerous. It looks very dangerous. I think this was vibe-coded and I don't think it's a real company.

• 1:20:29John Coogan?

  Well, it's burning up the timeline. People are having a lot of fun with it. Anyway, we have Lulu Maservi from Rostra in the waiting room.

• 1:20:36Jordi Hays?

  Let's ask Lulu if she thinks this is a real company.

• 1:20:40John Coogan?

  Yeah, and the value of rage bait, the value of like fake, fake launches.

• 1:20:44Jordi Hays?

  All right, Lulu, please look at this product, this new robot company and tell us, give us your read. Is it real? Team, can we pull it up?

• 1:20:54John Coogan?

  Show her the Centaur robot that is absolutely horrifying.

• 1:20:57Speaker 04

  Yeah, I saw, I saw a glimpse of it. This is like the stuff from nightmares. Like, imagine that you're, you're in a national disaster and this thing comes to you through like the smoke and the flames. I think you would probably die of a heart attack if they could save you.

• 1:21:10Jordi Hays?

  Don't worry, human. I will protect you. Yeah, really fascinating. I think, I think if they change the head, you know, maybe you could get it a little bit better, but it's still going to be.

• 1:21:23Speaker 04

  It looks like the canonical demon head. Like, this looks like the canonical Satan head when he appears in form on Earth.

• 1:21:30John Coogan?

  How did this originally hit the timeline? Like, where did this, this just came out as if.

• 1:21:35Jordi Hays?

  Well, the whole world gets their news from prediction markets, media accounts now, so.

• 1:21:40John Coogan?

  I guess, but yeah, it did go out on like a PR news wire. I guess Satyress Robots like, to answer the question.

• 1:21:47Jordi Hays?

  No, I'm curious, I want to have them on now.

• 1:21:49John Coogan?

  They say the horns are necessary because they place cameras there so they can see the position of all limbs and tools. It gives a layer of redundancy in case there's issues with encoders and on the actuators.

• 1:22:00Speaker 04

  That's what will make people like AI more, actually, is that the horns don't have enough cameras, but once the horns are for surveillance, then people will come around.

• 1:22:09John Coogan?

  I saw an open letter about this.

• 1:22:10Jordi Hays?

  Yeah, they gave the demon robot a chainsaw and they say the horns are completely necessary.

• 1:22:16John Coogan?

  Yeah, yeah.

• 1:22:17Speaker 04

  Yeah.

• 1:22:18John Coogan?

  What do you, yeah, what, what, what do you make of, of the, the current startup launch playbook? Because there is a world, like, there's all this speculation that Nathan Fielder is working on a new season of The Audition with that boy band called Boythrob. Have you heard this, Jordy?

• 1:22:36Jordi Hays?

  No.

• 1:22:37Speaker 04

  Boythrob?

• 1:22:38John Coogan?

  Boythrob. So it's this, it's a real band, boy band, that has been like detained and they have a whole, they've been making news, but people have been suggesting that like Nathan Fielder is sort of puppeteering the behind the scenes. And I'm wondering how far off we are from a startup just launching something that's like intentionally rage bait or viral and then sort of like pulling off the mask and saying, oh, well, we're, we actually are doing a quadruped. It doesn't look as crazy as this. This was just to, you know, draw a bunch of attention. Here's the final design. It feels like that would probably be a rough go because you've sort of violated the trust of the, of the audience on day one.

• 1:23:23John Coogan?

  But do you think the right founder could pull it off?

• 1:23:27Speaker 04

  I think it's a really bad idea to just optimize for going viral.

• 1:23:30John Coogan?

  Okay.

• 1:23:30Speaker 04

  Because viral comes and goes. What's that?

• 1:23:33John Coogan?

  Yeah, yeah, why? Why? It feels like it's such a badge of honor.

• 1:23:36Speaker 04

  So viral comes and goes. Like, it's, you're viral for like 24 hours, 36 hours, good or bad. You know, I think for Leopold, maybe we could get to that. Like by next week, people could be saying he's the goat again. People are just very fickle and everyone is at maximum intensity all the time.

• 1:23:53Speaker 04

  Five X.

• 1:23:53Jordi Hays?

  No, I do think, I do think people under, people have this idea of like, if I can just go viral once, then I'll have a big business. And I think back with just building our show, like we had so many, we had some big, you know, moments, you know, you can think of like the Soham Hareeks and there were big guests and there were things like that. But the amount of times that we needed to go like moderately viral on X to build our audience was like 20 times more than I would have thought that you needed to, to build a media business. And so, just trying to go, doing something that will get you viral once and sort of in a shortcut, kind of like a, almost cheating, which rage bait is like, wouldn't call it

• 1:24:36Jordi Hays?

  cheating, but, but it's like, you know, it's kind of, it's, it's kind of close to there. It's just short-term and it doesn't actually get you the thing that you want, which is like derp sustained attention.

• 1:24:47Speaker 04

  Yeah, I agree with you, but it's also not just about viral versus not viral. It's actually about consistency. So if you are consistent over the course of a year, there'll be times when you go more viral, less viral. There'll be times when there's like some Tuesday afternoon thing that you do that catches the attention of 50 people, but it happens to be that one of the exact right people is among them. You just have to keep doing the same thing kind of forever. It's like getting fit. You don't get fit by eating nothing for two days and then lifting for two days straight. It's like you just have to go to the gym kind of every day for the rest of your life in order to be fit. And the same thing is true of relevance. Consistency in just keep doing it, it's not a one-time thing, but also consistency in like, what are you going viral for?

• 1:25:31Speaker 04

  It's like Ilya said, what are we scaling? What are you going viral for? Because if it's not going viral for the thing that you actually consider your true identity to be, now you've actually just gone in the wrong direction. Now you have to like over-correct back. And so if you are consistent with the story and then with doing it over and over, that's a lot better than trying to put everything into one moment.

• 1:25:53Jordi Hays?

  Well said.

• 1:25:54John Coogan?

  Do you think we are at peak? I forget what the word was. I got asked this recently. It was like, are we at peak, like transparency in terms of CEO communications? Because we're certainly at peak volume in terms of, if I go back and I'm like, oh, I'd love to just like listen to 20 hours of podcasts from Jeff Bezos while he was in the middle of building Amazon. That's not really an option. There might be like a 10-minute hit on Charlie Rose and then a four-minute hit on Letterman.

• 1:26:31Jordi Hays?

  Imagine Steve Jobs on Joe Rogan.

• 1:26:33John Coogan?

  Yeah.

• 1:26:36John Coogan?

  Imagine like, like Steve Jobs on Lex Friedman for the third time and you're like, ah, that one I didn't actually get through because it's like now we're in hour nine. But I, but do you think we're at like peak, like maximum amount of just founder content and founder like interviews in terms of just the volume?

• 1:26:57Speaker 04

  It feels like this should be the peak, but I don't think it is.

• 1:27:02John Coogan?

  Yeah.

• 1:27:02Speaker 04

  I think people consider it to be an arms race where now the peak is the new benchmark and baseline. I did, for a front fact, I learned English from a book called English. So sometimes I still do stumble into like.

• 1:27:18Jordi Hays?

  She read the book on English.

• 1:27:20Speaker 04

  I did. There's a book, it's called English, I read it and then I knew English. Like Neo in The Matrix. So forgive. Benchmark is the, the, the new peak is the current benchmark where it's like everybody is loud all the time. So if I'm launching and talking, I have to talk more and louder. But to your point, it's very different from actually learning new things. So I've seen the same CEO maybe go on 10 different podcasts and I still don't know what they're doing.

• 1:27:51John Coogan?

  Sure.

• 1:27:52Speaker 04

  Or like, is the sixth podcast marginally useful compared to the fifth? There was one week when Demis went on like a whole podcast tour.

• 1:28:02John Coogan?

  That's right.

• 1:28:03Speaker 04

  And this is no shade to Sir Demis. This is like planned around, he released a book or whatever, but it still was like, am I going to get anything new from the six podcasts that I didn't get from the fourth podcast? That I already listened to and each one of these is like two hours. I'm really.

• 1:28:17Jordi Hays?

  Well, the other criticism there is like that podcast tour and the book launch and everything coincides with them like completely falling behind the frontier. So now in hindsight, it's like, maybe you should have been.

• 1:28:30John Coogan?

  I thought you were going to say that there was no Rogan or Theo involved. Cause that was the real.

• 1:28:35Jordi Hays?

  Yeah, I should have done Theo Von.

• 1:28:36Speaker 04

  He's more Theo.

• 1:28:37John Coogan?

  Yeah, no, I, I would, but do, do you agree that if you, if you're advising a founder in the choices between 10 tech podcasts that are going to ask roughly the same questions? Or 10 varied podcasts where one might be cultural, one might be more political, one might be business, one might be finance focused, one might be technology focused, that having more of a breadth? Because I, there was a moment where the CEO started going on Rogan and Theo. And I was like, oh, this is so fresh and different. It's just a very different conversation for them to have. It's not the same as a Dorcas or like a serious interview, but it just shows me a different side. And I like to see how they interact. Not every CEO is set up for it, but how would you solve that problem?

• 1:29:22Speaker 04

  So I, I would approach it from the obverse, like almost the opposite of what you said, which is if you have five podcast opportunities in front of you or five, whatever publicity opportunities, and they're all different, think about who do you actually need to reach? Like, what is the best use of your time? And if you don't need to reach the general population, and if you don't need to show some fun side of your personality, then it's less about finding a way to show your range. And it's more about focusing on what do you actually need? Instead of doing five podcasts that are all different, just cut the other three. The three that are either duplicative or are reaching people that you don't need to, literally just don't do them. I, I think CEOs need to be thinking about what is like minimum viable effort?

• 1:30:03Speaker 04

  Where I can get my vision and persona and build trust with the people that I need to, without actually going on a press tour. Cause at a certain point, the same way that it wastes my time to listen to the fifth podcast, it wastes you, the CEO's time to do the fifth podcast. Because the marginal value of one hour of your time, there is like $30,000 or more. I mean, what's an hour of a CEO's time worth, right?

• 1:30:28Jordi Hays?

  The only, the only thing that I, the only thing that I would push back is I think the reason that you see some CEOs, once they just get on this, the podcast treadmill, and then it's like every week, new episode.

• 1:30:39Speaker 04

  Yeah, yeah.

• 1:30:40Jordi Hays?

  Is when you actually think of, if, if it's a virtual recording and they're using one hour of their time, and even if all that happens, let's say the podcast is like decent size, right? Like top 25 tech podcasts in the world. If you have a hundred customers or potential customers that listen to that, I would argue, and they'll listen to the whole episode, I would argue that it is like well worth the time to go on, even if that's the only group that actually.

• 1:31:07John Coogan?

  Yeah, it's basically.

• 1:31:08Jordi Hays?

  And so that's why, that's why, that's why you end up, and it's like, it's, it's, unless you're in a period where it's like, you actually don't want to share anything, then I think every incremental progress is like, is it a better use of, is it a better use of time for the CEO to talk to like a warm lead? You know, that's just coming in, talk to your customers? Or talk to a hundred customers and they listen to you talk for an hour and the sort of like passing sales or passive sort of like sales motion, right?

• 1:31:38Speaker 04

  Yeah, see, that's very true. And I, I agree with you there. And the difference is we're making the assumption that it is one of the top podcasts that your customers are listening to, and you're saying something that is going to be worthwhile to them. That is an amazing use of time because you use one hour or maybe on TVPN, you use like 20 minutes if you're a busy CEO. And then you get clips and clips and clips out of it. And you just were able to amplify the equivalent of having a thousand meetings into this setting where someone is able to, to pull better responses from you than you might've been able to give on the spot. That's true. But what a lot of CEOs also do, and founders in general, is just try to maximize for volume at any cost. And that leads to going on a podcast that nobody listens to.

• 1:32:21John Coogan?

  Sure.

• 1:32:22Speaker 04

  Going on a show that is actively detrimental to your vibes. There are shows where it's net negative. It's not just a waste of time, but you literally leave with a worse reputation than if you hadn't gone on there. Or just being boring, wasting people's time. Or you're making people angry and you're building a brand that you actually don't want. And now you have to put in extra effort to unwind the brand and walk it back versus if you had just been more focused in the first place. So I think that optimizing for volume and sheer quantity leads you down the road to all of these perils. Whereas if you're just focused from the beginning and say, here are the things that matter to me, here are the podcasts and shows and venues that I actually respect and people listen to, I'm going to focus on those. That's a better use of your time than just to go like hungry, hungry hippos with it.

• 1:33:08John Coogan?

  Yeah. It's also sometimes cool when the CEOs are sort of like, I don't know, like almost king making a little bit where they, they, they, they jump onto a show that hasn't hit that inflection point before it's obvious. And they take the risk of going on some small show and then that show blows up and you're like, wow, that, that CEO went on that show that early? That's crazy. They took a real risk. I think Elon did this with Lex very early and there were, there, there's a whole bunch of other examples, but.

• 1:33:38Speaker 04

  You know who loves doing that? Brian Armstrong loves doing that.

• 1:33:41John Coogan?

  That's right.

• 1:33:41Speaker 04

  And he, he went on TVPN when you guys had already, like this wasn't.

• 1:33:46John Coogan?

  No, no, no, no, no. I think he was our first public company CEO, first Fortune 500 CEO. He was very, very early and it was huge. It was great.

• 1:33:53Jordi Hays?

  We had a lot of, we had, we had, it was probably not in the first like 100 or 200 guests.

• 1:33:58John Coogan?

  Yeah.

• 1:33:59Jordi Hays?

  Definitely, I, I think you're right that it was the first.

• 1:34:02Speaker 04

  But he didn't wait for other public company CEOs to be going on there. A lot of public CEOs are so risk averse that they're like, show me. If Satya and Jensen have done it, I'll consider it. Otherwise, don't even bring it to me. Brian just never asked these questions. He just asked, do I like this thing? And so TVPN wasn't that early, still a nice milestone, but he went on this one podcast called Pod of Jake.

• 1:34:24John Coogan?

  Oh, yeah.

• 1:34:24Speaker 04

  It was a podcast by a guy called Jake.

• 1:34:26John Coogan?

  Yeah, yeah. It's a great show.

• 1:34:28Speaker 04

  Had like 50 listeners and he just liked it.

• 1:34:30John Coogan?

  Yeah. No, no, no, no, that's so cool. And Toby Lukey did that too, with like some Starcraft podcast, which was like crazy. I was like, this is selection, this is taste. I know that like, you know, he was involved in this. This wasn't something that came through a committee, which is just so refreshing. The opposite of volume and, and the spray and pray do every podcast is, is like just being mysterious and having aura. Do we need to move to, I think of Jeff Bezos does it very well. Jack Dorsey does it very well. Ilya Sutskaya does it very well. Do we need to move from a world for certain CEOs where instead of media training, we're doing mystery training, where we are coaching them to be mysterious and have high aura? Is that possible or is it innate with those people?

• 1:35:12Speaker 04

  It's innate because people who are too thirsty for attention cannot help themselves. You can tell them, I have coached founders to do less. And there are some people who just cannot be held back because they get excited and that's okay. You can be a very respected, excited, public facing archetype. But like what Ilya has cannot be taught. And in fact, if you tried to coach him to be the opposite, that wouldn't work.

• 1:35:38John Coogan?

  Yeah.

• 1:35:38Speaker 04

  And, and Leopold is in the category too, where there are people who just are a certain way and then that reputation gets out and it benefits them. But this is why it's such a mistake for CEOs to try to copy another. Because if you just say, I want to copy Ilya and I want to be able to have a five word tweet that gets 10,000 likes and everyone has us and whatever. Well, you can't because you're not him. You have to make this new thing that suits you.

• 1:36:02John Coogan?

  Yeah, yeah. Yeah, it's always funny when, when Ilya's tweets get completely taken out, taken out of context and people will be like, wow, like this is about ASI. It's like, actually he's just happy about his family or something like that.

• 1:36:15Jordi Hays?

  Okay, I'm sort of, I'm sort of inclined to try to workshop some, some ideas.

• 1:36:22John Coogan?

  Let's do it.

• 1:36:22Jordi Hays?

  If, if we were doing comms for situational awareness.

• 1:36:26John Coogan?

  Okay.

• 1:36:26Jordi Hays?

  What's the next move? It's an interesting situation.

• 1:36:31Speaker 04

  Yes.

• 1:36:31Jordi Hays?

  Because he was very, very quiet, right? He basically had like a couple of podcasts and a billion dollar.

• 1:36:38John Coogan?

  Literally just one.

• 1:36:39Jordi Hays?

  A billion dollar PDF and then went on the most insane run, all of his predictions coming true, you know, vindicated and then total annihilation in a very short period of time. I think that one, I think he's got to start kind of shitposting a little bit, like.

• 1:36:58John Coogan?

  You're going to advocate for the SPF like what?

• 1:37:02Jordi Hays?

  I think it worked for, I think it worked. I think it worked. Well, one SPF was different in that, in that he was very, he was always talking a lot.

• 1:37:10John Coogan?

  Yeah.

• 1:37:11Jordi Hays?

  This is like wildly different because he's been effectively silent. And to come back, you know, maybe after the wedding and say.

• 1:37:23Jordi Hays?

  What did I miss? You know?

• 1:37:24John Coogan?

  No.

• 1:37:26Jordi Hays?

  No, I just, I, I, I think that he's clearly brilliant.

• 1:37:30John Coogan?

  Yeah.

• 1:37:31Jordi Hays?

  He, I think is, from everything I've seen, will probably be an incredible venture investor. And he'll probably-

• 1:37:38John Coogan?

  Also, minus leverage, he's just correct. Like, minus leverage, he's, his whole thesis is correct still.

• 1:37:44Jordi Hays?

  Yeah.

• 1:37:44John Coogan?

  Everything went up, it was just the leverage thing.

• 1:37:47Jordi Hays?

  Yeah.

• 1:37:47Speaker 04

  So, one thing I think he should not do that now is start doing things differently. Because when people change how they operate, it shows that they're in a crisis. And obviously, it wasn't a good day.

• 1:37:57John Coogan?

  Yep.

• 1:37:57Speaker 04

  But, there's a difference between market movement, portfolio management, versus repudiating your underlying worldview and your underlying long-term thesis. And so, a couple, a couple of thoughts on my end is like, one, going direct doesn't mean, uh, you just have to tweet into the void or to the public. Going direct can mean picking up the phone and calling your LPs. And the people that matter to him most today, and always, are the LPs. So, if he can call the LPs, or if he already has, and make sure they understand two things. One, that day-to-day market movement and portfolio management, even in pretty extraordinary circumstances, don't change the underlying thesis and worldview. And that his vision for what happens in AI still stands.

• 1:38:42Speaker 04

  That's one. And two, is that he has this kind of hidden jewel of his portfolio in private companies. This is an unusual thing that he does, that he has access to. And that what is happening in the public market is actually the peripheral padding around this really interesting core of his private investments. Now, people know about Anthropic, but he has all these other private investments-

• 1:39:04John Coogan?

  Sure.

• 1:39:04Speaker 04

  That are super interesting, that haven't even really hit their peak at all. And so, if his, if his employees and LPs know these two things, then I think it's like, weather Twitter for a little bit, and then come back, and two weeks later, some other thing will happen, and people will be like, he's the GOAT again.

• 1:39:25Jordi Hays?

  Yeah, and I also think that, I, I don't know about institutional LPs, I don't know about that whole world, but I think knowing a lot of the, a lot of the, like, you know, founder types that are just allocating a very small amount of their portfolio to situational awareness, I think they give them another roll, roll the dice, personally. I think after that run, I think after that run, a lot of them would be like, yeah, I'll, I'll just, whatever I got out, I'll, I'll, I'll let it, I'll let it, let it ride, kind of thing. Just because, again, it's not like the underlying thesis has ever been wrong, it's a timing thing, and if you're just thinking of it as like, yeah, basically, like, you know, high stakes gambling, then why not keep rolling the dice?

• 1:40:07John Coogan?

  You've been through this, I think loosely, I mean, you've certainly seen, uh, Scott Wu, cognition, come in as sort of the savior in a messy situation. And we were talking to Martin Scarelli about this, where Ken Griffin is starting to play this non-bank role of, of backstop lender of last resort. This was a, a, a, a, a situation where the liquidity crisis could have bled into the big banks, Goldman Sachs, Morgan Stanley, JP Morgan. It did not, it stayed within the, the, the shadow banking system of, of Citadel. Uh, and it's interesting, because it feels like, uh, what Martin was saying was that, Ken Griffin is, is beginning to position himself as like, the next Warren Buffett.

• 1:40:51John Coogan?

  In a crisis, he can be the lender that brings stability to the market, the market is up. And I'm wondering about your advice for founders who are fortunate enough to be in the situation where they are rescuing another founder, another business, a, a, a market even, in this case. What is the right communication strategy where you are reassuring the world? With Scott, it was the, you know, the, the, the, the social contract in Silicon Valley, uh, in Ken Griffin's-

• 1:41:21Speaker 04

  Yeah, one year ago.

• 1:41:22John Coogan?

  One year ago, right? But at the same time, you don't want to take too much of a victory lap and, and, and rub it in everyone's face, and you don't want everyone to believe, oh, well, like, you know, maybe I can actually go and, uh, you know, screw over all sorts of founders, because Scott Wu's always going to be around to save the day. So, how would you balance that?

• 1:41:39Speaker 04

  So, the, the highest aura move is always to just chill and not make a big deal out of it. You know, like, when you, when you see someone dance a little too much after getting a touchdown, it's like, oh, this is someone who's not used to getting touchdowns. This is a big deal for them, is this their first ever touchdown?

• 1:41:57John Coogan?

  Yeah.

• 1:41:58Speaker 04

  But for the people who kind of like, do a little something and move on, then you realize that they're just, this is just part of their day.

• 1:42:04John Coogan?

  Yeah.

• 1:42:04Speaker 04

  And so, um, I think, one, just not getting overexcited, as if this is the best thing to ever happen to you by sheer luck. Two is, I think a classy way to approach this is to stand up for principle, or to stand up for the other party. So, in the case of cognition windsurf, the Scott's instinct was to protect and stand up for windsurf employees, as opposed to, um, some big treatise about, here's why I did this, and I, I, I.

• 1:42:31John Coogan?

  Yep.

• 1:42:31Speaker 04

  It was all about, here's what windsurf employees deserve, and by the way, um, you're not appreciating how talented this group is, it was all about defending them, and about the social contract. So, I think for, for Ken Griffin, or anybody, the best move here is like, defend the principle, defend the people that you're trying to help, and then just don't make a huge deal out of it, and be chill.

• 1:42:52John Coogan?

  Yeah. And, and I loved that, uh, when, when Scott put that announcement video together, he was there alongside with the team, it was not all about him, of course, that's his nature, he's a very humble person, but, uh, the, the, it, it would have been very easy to just say, like, oh, yeah, like, we can only schedule Scott for this video, and that's not what happened, and it was intentional, very clearly, which was great.

• 1:43:14Speaker 04

  One thing I'll say, I, there's one thing that I've learned from Sheryl Sandberg. I, I don't know, or I've never met her, um, I didn't read, wait, okay, here's, here's what it is. When I think that I'm gonna super-duper hate a book, sometimes I'll read it, so that I can hate on it with more credibility. So, like, I thought I would really dislike White Fragility and Between the World and Me, so I made sure to read them, so that when I hate on them, nobody can rebut, because nobody's read those books.

• 1:43:37John Coogan?

  Yeah.

• 1:43:38Speaker 04

  And so, I thought I would super hate Lean In, so I read it. And it was okay, but there was one part of it that was actually really useful. And she was saying this in the context of, women have to do this, but actually, it's just anybody. And what she said was, if you are advocating for yourself and defending yourself, that gets totally discounted, because it's just self-interest. But if you are able to do that on behalf of someone else that represents what you want, represents what you believe in, or principles that represent how you want the world to work, just that small shift allows you to go really hard on being full-throated about them, in a way that doesn't get discounted for self-interest. And so, same for like, any founder who's standing up for another person, or for an idea, or anything else.

• 1:44:20John Coogan?

  Yeah, that makes a lot of sense. Well, Jordan, anything else?

• 1:44:25Jordi Hays?

  There was an interesting comms crisis and, uh, and resolution that happened, effectively in the last 24 hours, I don't know if you guys saw it, the founder shared out a picture of someone getting a tattoo.

• 1:44:36Speaker 04

  A tattoo!

• 1:44:38Jordi Hays?

  We told everyone that would get a tattoo of our logo, we're at a company, I'm not a big fan of logo tattoos-

• 1:44:45John Coogan?

  Yes.

• 1:44:46Jordi Hays?

  Uh, in general, there's a few that I might consider myself, but I certainly wouldn't, you know, encourage other people-

• 1:44:52Speaker 04

  Wait, what are they? You have to-

• 1:44:54John Coogan?

  Roman weave.

• 1:44:54Jordi Hays?

  I think like, a Coca-Cola across the back, iconic brand.

• 1:44:59John Coogan?

  I thought you were gonna do a whole sleeve of the Bottega Veneta Roman weave on your arm.

• 1:45:03Jordi Hays?

  Yeah, exactly.

• 1:45:04John Coogan?

  Like, it's sort of black.

• 1:45:04Jordi Hays?

  Something like that, but that's less of a logo.

• 1:45:06John Coogan?

  Yeah.

• 1:45:07Jordi Hays?

  A Roman weave sleeve-

• 1:45:07John Coogan?

  It's like, if you know, you know tattoo.

• 1:45:09Jordi Hays?

  Yeah, quiet luxury. Roman weave sleeve. No, I, I, I just saw this, and I was like, absolutely shocked that someone said this out loud, basically, a founder was, uh, telling anybody that got there, again, I think, sub-seed stage startup logo, tattooed on them, got guaranteed an interview, which just felt like, so, so wrong. They posted it, everyone was like, wow, did you say this out loud? And then I saw the, I think it got deleted, but I saw the correction of like, we're now paying for tattoo removal for anyone that-

• 1:45:43Speaker 04

  No, wait, no, there's another one. I didn't see the paying for tattoo removal, but he posted this, like, mea culpa tweet that was fully written by Claude. Did you see that?

• 1:45:53John Coogan?

  No, I didn't see that. But, uh, I mean, the steel man here, I'm, I'm not gonna give you the steel man helmet, but the steel man is that, uh, there are people that just love tattoos. And if you offer certain people free tattoos, they will say yes, because they just want as many tattoos as possible.

• 1:46:09Jordi Hays?

  Yeah, we don't know, maybe he was at a tattoo convention.

• 1:46:12John Coogan?

  I was, I, I, I've seen, I've seen free tattoos given out before, and people lining up, and it's, I don't, it doesn't, math for me, I'm not in the market, but there are certainly people who are just like, yes, I want more ink, I want more tattoos, if there's a tattoo artist here that I don't have to pay, sign me up, even if I get something silly. But, uh, yeah, what, what-

• 1:46:31Speaker 04

  That's true, there's like Cyan with her Androl tattoo, but they, but these were not people.

• 1:46:36John Coogan?

  She's a shareholder.

• 1:46:37Jordi Hays?

  Androl, Androl didn't say, like, we're not giving you the allocation unless you-

• 1:46:40Speaker 04

  Exactly. We'll only give you allocation if you get the tattoo. That was the thing, it's like, you're, you're, are you maybe exploiting desperate job seekers? And also, do you not have a different and better bar for whom you want in the company, as opposed to the people who make the most rash, poor decisions in the moment? You're like, optimizing for people who can't decision-make, to advance in your interview round. So, I, it, it obviously wasn't great, but I think the real crime was the cover-up, which was, in this case, the Claude mea culpa. Yeah, I don't know if, if that's still up there, but it was a slopology.

• 1:47:13John Coogan?

  Rough. Well, good luck to them, hopefully they live and learn, and hopefully those folks who didn't want the tattoo can get it removed smoothly. And thank you so much for coming on the show. Always great to chat up with you.

• 1:47:25Speaker 04

  Thanks, guys.

• 1:47:26John Coogan?

  Always great hanging.

• 1:47:27Jordi Hays?

  Talk soon.

• 1:47:27John Coogan?

  Have a great week, we'll talk to you soon. Let me tell you about CrowdStrike. Your business is AI, their business is securing it. CrowdStrike secures AI and stops breaches. Up next, we have Michael Kim from Sundown Capital, he's the founder, and I'm very excited to dive in to your story. Welcome to the show, Michael, how are you doing? Thank you, great to be here. Thank you so much.

• 1:47:48Jordi Hays?

  Great to have you.

• 1:47:49John Coogan?

  Would you mind, uh, taking us through a little bit of an introduction, yourself, your background, and then what you're doing today, to sort of set up the conversation?

• 1:47:58Speaker 05

  Yeah, so I said, I started Sundana in 2010. It was specifically to focus on seed and pre-seed stage funds. The thesis was that these new, you know, super angels were starting to institutionalize and bring outside capital in, guys like Mike Maples, Steve Anderson, Michael Dearing, Jeff Clavier. And so we were very early in identifying seed stage investing as becoming de facto early stage investing. And so, you know, it took me 18 months to raise the first fund in 2012. You know, today we have almost $3 billion under management. Our LP base is largely US endowments and foundations. So, you know, we feel like we are now, you know, solid LP focused on very early stage venture. And, you know, a lot's

• 1:48:42Speaker 05

  changed and we can get into that. But, you know, overall, we are convinced that early stage investing is still the way to go in this world of AI.

• 1:48:51Jordi Hays?

  Yeah. Do you think that if you look back, you weren't even thinking big enough about how much the category would emerge? Because like, clearly, the initial thesis was right. But in some ways, it feels like early stage venture has gotten bigger than anyone really could have predicted.

• 1:49:09Speaker 05

  Yeah, I mean, back then, there weren't opportunity funds. People weren't standing up SPVs. You know, I spent time with Josh Kushner when he was raising his first fund. He was talking about, you know, ultimately running billion dollar funds. We were a little bit too disciplined, perhaps, where we didn't, we really wanted to have people play in the sandbox of seed. And so did not invest with Josh, did not invest, you know, in Ribbit, Mickey Malka's fund, you know, that's like a 50x fund. So, you know, I think perhaps I was a little bit limited in how I was thinking about it. So, exactly, you know, should have thought bigger. But, you know, the market's grown, obviously, and there are probably 2,000 seed funds now. And, you know, we're investing out of relatively large vehicles.

• 1:49:53John Coogan?

  So, I mean, 2,000 seed funds is so, so, so much smaller of a pool than the broader startup ecosystem. And I'm wondering about what the day to day looks like. If you're familiar with a venture capital fund, that might be having a founder stop by the office every hour on the hour, every day of the week, and then partner meetings, and they might be taking thousands of meetings over the course of a year. What is your, what is your firm's day to day? What is the heartbeat of the firm look like?

• 1:50:23Speaker 05

  Yeah. Well, you know, just to give everyone a sense of how we invest, we want to be the lead investor. So, we're the largest LP in, in over 80% of our funds. So, we work very closely with our fund managers. We're always on WhatsApp. We're talking to them. We do monthly calls. I would say also, one way to think about this is, you know, it's similar in, in early stage versus late stage investing. Late stage investing, there's a finite set of companies that, you know, investors want to be in. At the earliest stages, there's an infinite number, right? Because new companies are being started every day. So, that actually transfers as well, or translates to what we do. There are always new funds being created. Whereas, like, if you look at the Sequoias and Excels and Index

• 1:51:06Speaker 05

  and Founder Funds of the world, that's a finite number that LPs try to get into. Whereas, we're actually discovering new fund managers.

• 1:51:13John Coogan?

  Sure, sure.

• 1:51:14Jordi Hays?

  How many great new seed funds are born every year? Is it like, two?

• 1:51:21Speaker 05

  That's a really good question.

• 1:51:23Jordi Hays?

  Because when you think about, when you think about, like, venture investing, when you look back throughout history, there's like, very small number of companies every single year that really matter. And you gotta, you gotta get in those companies. And then if you look at all the venture investors that actually break out and build big platforms, or just deliver really great results year over year, or fund over fund, a lot of them got into those 10 companies. And sometimes, all it takes is really getting into one in a significant way. And that's what allows their career to blossom. But I'm wondering, when I, when I, you know, we have six companies a day on to announce fundraises, probably on average, sometimes, sometimes a little less, sometimes more. And venture feels so

• 1:52:04Jordi Hays?

  competitive. But when I really narrow in and look at the seed market, like, true seed practitioners, it actually, in some ways, doesn't feel that competitive, because I can kind of clock these sort of rising stars. And I just know, like, I have a good intuition, like, this person is, I don't know if they're going to back, like, two out of the 10 next breakout companies, but I know they're going to back at least one, and they're going to break out. But I'm curious how, how you view the market.

• 1:52:35Speaker 05

  Yeah, I mean, with a fund, obviously, you get 20 to 30 shots on goal. And the idea is that we're indexing on fund managers that have access to amazing founders. And, you know, one good example, that is Neo, you know, Ali Partovi. You know, he was the first check in the cursor, first check in the calcio. He has cognition, he has deal, he has ramp, you know, amazing track record. But he had a sourcing engine. You know, he was created, he created this Neo Scholars Program. So, he was going to Harvard, MIT, Stanford, CMU, all these different places to identify the top CS students. And, you know, I think right now, we've been investing along this thesis that there's an arms race for younger founders. And part of that is AI native companies, small teams can actually generate substantial

• 1:53:19Speaker 05

  revenues. So, the next round is actually a growth round. And so, you know, that actually translates to some of our fund managers that really focus on finding young founders. So, like, a good example would be Carlo and Coco at a fund called Nova. And they spend, you know, they're, they're 25 and 23 years old. Their third partner, Henry, is 19. You know, they spend a lot of time with kids in, in college. We have Corey Levy at Z Fellows, you know, all over the college campuses. And, you know, Josh Brauder, he's a Thiel Fellow. And he, you know, he, he's on the selection committee. So, he gets access to this. So, you're absolutely right. It's always, venture is a power log game. I think with fund investing,

• 1:54:03Speaker 05

  they have more shots on goal. And the other element that dynamically is that, you know, one fund may be good, but the next fund actually might be better. And so, there's, it's multiple layers. And so, what we have to do is track, who are they investing in? How these companies are, are performing? And then decide whether we continue on with them or not. And, you know, Neo is, is a very good example of one that we have continued to invest in since Fund One.

• 1:54:30John Coogan?

  If you want to be the anchor LP in a new fund, you're excited. What does it actually take to win that allocation? Is it different than winning a seed stage venture round for a startup? Are you identifying value add or, or strategic advice? Like, what are the, what is your pitch to new fund managers?

• 1:54:51Jordi Hays?

  I imagine it's like, you don't have, there's way less scarcity, and there's way less urgency, right?

• 1:54:59Speaker 05

  Absolutely correct. Yeah, I mean, funds are raised over a period of time. They're not raised in a, in a week. So, there's not competitive term sheets, et cetera. You know, I think one of the things that we benefit from is that we know what we want. We know what to look for. We have good pattern recognition. So, like, with Kirsten Green, her first fund, 40 million. You know, we committed, we were the first to commit. We did 10 million. And, you know, and she was off to the races. And I would say that, you know, because, you know, of the 16 years of pattern recognition, we, we kind of know what we want in a fund manager. And, you know, again, it's indexing on people who have amazing access to tremendous

• 1:55:41Speaker 05

  founders. Obviously, we want to see some picking ability or proven picking ability. So, we've never invested in a first time investor. But we've invested in plenty of first time funds. And then I think, you know, we, we think that networks and shelf, and domain expertise have a shelf life. So, you could have been like the VP of whatever at Google, you know, 10 years ago. That's not as relevant today. And unless someone has hustle, and they're building on those networks, and they're, and they have the intellectual curiosity, you know, I think that's what we also look for, is sort of like the it factor.

• 1:56:15Jordi Hays?

  Yeah. Are you, are you, so, maybe to try to repeat it back to you, is like, volume of deal flow and access your preference over, like, just raw picking ability? Because when you think of, like, Z Fellows and Neo, sure, they clearly can pick great companies. But it's also, they just have, like, insane, they have insane access, right? They've built these sort of, like, pipelines of, of talent. And that feels almost easier to bet on. But then you have other investors who just, like, clearly know how to pick winners. We have a buddy who, like, I think the first two companies he ever angel invested in, like, both became unicorns. And so, he has, like, clearly has access and, and, and picking

• 1:56:58Jordi Hays?

  ability. And a little, and a little luck, but you definitely need that as a, as a VC.

• 1:57:03Speaker 05

  Yeah, I mean, luck is definitely part of it. But you got to be in the right rooms. So, we're investing in this one guy. He worked with Matt Freeman and Daniel Gross. He's a very smart person. I can't mention who he is because he's still fundraising. But, you know, he's someone who has the intellectual curiosity. He's seen what great could look like. He's learned from really good investors. And he's in the right rooms. Now, do we know if he's going to be an amazing fund manager? No. But, you know, he's got the, the ingredients there. You know, and to your point, you know, because there are so many companies being formed, you got to be able to have some sort of competitive advantage, some sort of discernible

• 1:57:43Speaker 05

  edge in finding these, and accessing these founders. You know, and so Carlo and Coco, for example, have that. They have the hustle. They're in the right rooms. They have the right access, not only just at the founder level, but also, you know, like, with Sequoia and the downstream capital.

• 1:58:03Jordi Hays?

  Do you, how much do you value if someone's a former founder? Cause a lot of people like to talk and say, oh yeah, former founders make such good investors. But when I think about it, some of my favorite investors across stages have never started a company. They've never had a job other than, you know, just, just, just looking at like deals and trying to pick good ones. And

• 1:58:27Speaker 05

  Yeah, for sure. Like Mike Moritz, right? Legend was a journalist, right? And Bill Gurley, he was an equity research analyst. And, but I will say at the earliest stages, a lot of our fund managers are actually ex-startup people or operators. And that's because, you know, if you're a founder, you want someone who can actually help you. I know it's a total VC meme that, hey, how can I help you? What kind of value can I add? But I think at the earliest stages, they do, founders do want that help. Even the best ones, although they probably don't need as much. But if you look at late-stage investing, they're typically ex-investment bankers, consultants and lawyers. So there is some sorting and I do see, we do see a lot of ex-founders.

• 1:59:12Speaker 05

  We actually have current operators, like we're invested in Ahmad's fund, you know, CEO, founder of Mercury. And that perch gives him really great perspective and he's a founder magnet. People want to work with him.

• 1:59:24John Coogan?

  Yeah. Can you give me a little bit of history on how venture capital, alternative investments became attractive to LPs, endowments, universities? We often talk briefly about the Yale model. How real is that as a story that gets told? What were the other key turning points in endowments sort of waking up and starting to allocate towards venture capital?

• 1:59:53Speaker 05

  Yeah. I mean, David Swensen at Yale, legend, you know, he obviously pioneered the endowment model of having significant exposure to private markets. I think 60% of their endowment is private markets, including private equity. But I think 25% alone is to venture. And, you know, you mentioned a word that I think describes venture. It's about stories, right? I mean, if you think about asset allocation and like, oh, you know, small cap value investing or, you know, these public funds, the standard deviation of returns is pretty tight. In venture, because of what we just talked about, you know, power law, you know, a handful of companies can do generate most of the returns.

• 2:00:34Speaker 05

  And so, you know, I think a lot of endowment and institutional LP types get attracted to those anecdotes. You know, I think, you know, for, for, for kids, you know, the Facebook movie actually inspired a lot of people not to just go down the Goldman Sachs McKinsey path, but try to, try to do something new. And so, you know, it is, it is narrative based, it's anecdote based, but when it hits, it really hits. You know, I mean, I don't think Neo will be upset for me saying this, but you know, they had four million into Kashi. It's worth a billion five. Seriously.

• 2:01:08John Coogan?

  That's incredible. Yeah, wow.

• 2:01:13Jordi Hays?

  That's wild.

• 2:01:15John Coogan?

  He's goaded.

• 2:01:16Jordi Hays?

  Going to the Midas list. The, another question for you, how much time, how much time do you spend looking through a fund's portfolio? And trying to apply or understand what your, like a real, like fair value to different assets? Because as, as an angel investor, I've done like 70 some odd companies. And there are companies out there that I'm up like, you know, 10, 15x. And I believe the company is probably a zero, right? And, and knowing the way that the venture game is played, there's a lot of, you know, I'm not in the venture business, right?

• 2:01:55Jordi Hays?

  So I don't have to report to anyone. I'm just like, I do it for fun and, and I enjoy, I enjoy learning from the process. But I know there's venture investors who are out there with, in the same exact situation. And they're not exactly probably like raising a hand and being like, you know, Michael, like, I know I'm up 15x here, but it's, I'm probably getting wiped out.

• 2:02:18Speaker 05

  Yeah. I mean, there's a couple of things around that, you know, like all the SaaS companies and vertical SaaS companies in the 2016 or 2022, before ChatGPT came out, you know, we call those the messy middle. Those are companies that, you know, raised probably at 50 times revenue, you know, maybe at a billion or more. And today they might have a hundred million of revenue, growing 10%. You know, you look at the SaaS apocalypse, you look at the rerating of software multiples to like three and a half times. You know, those companies are probably at best worth three to 400 million. So the question then becomes, are, have our fund manager, and everybody has those companies in their portfolio, you know? But, you know, have the fund managers been proactive in marking things down?

• 2:03:01Speaker 05

  We've had fund managers, for the most part, be proactive and mark things down. We've had other fund managers that haven't, and we know that those are, you know, unrealistic marks. The other thing that we do, just to give you a sense of this, is when we diligence a fund manager, you know, for the first time, we, we are very founder-centric. So we'll call, you know, all of the founders that they've ever invested in and really get a good sense of like, you know, can this person help you or how do they help you? But also importantly, and this, this gets into some of the, the inside football. You know, a fund manager has to come to us with a plan, right? Portfolio construction. We're going to invest in 20 companies and invest a million dollars in each.

• 2:03:45Speaker 05

  What we do is we assess the credibility of that. So if you're an angel and you're getting 25K into a bunch of companies, that's one thing. But if you're, you know, running an institutional fund and you're saying to your LPs, I'm going to get a million bucks into each company. That's what we want to hear from the founders. So we run a very founder-centric diligence process.

• 2:04:05Jordi Hays?

  Yeah, I, my, my best ever investment is roughly at 150x to 200x right now. And I would love to think about a world where I could have, I put 25K in. I would love to think about a world where I could have put

• 2:04:20John Coogan?

  A million.

• 2:04:21Jordi Hays?

  A million in. But like, honestly, at that time, this was a few years ago, 25K was the, like, I was begging for 25K. And so I could never go out and be like, yeah, like, yeah.

• 2:04:32John Coogan?

  Cause there was someone else.

• 2:04:34Jordi Hays?

  They wanted to give me a million. I turned it down. I was like, no, it was like, I was getting the last slug and I'm very grateful for that. But, but yeah, that, that, that's

• 2:04:43John Coogan?

  You got to fight for that allocation.

• 2:04:44Jordi Hays?

  It's so interesting to think about, think about the path into, into building the next.

• 2:04:49Speaker 05

  I have those regrets too. Like, I, I, I've invested in two of the three best venture returning funds ever. We're not in lowercase one, but I, we're, you know, we're involved with Laura Carbon now and I've known Chris Saka for probably 12 years. But the other two funds are Founder's Fund 2, which I'm in and personally, and also Blockchain Capital 2, which is Brad and Bart Stevens.

• 2:05:15John Coogan?

  That FF2 is insane.

• 2:05:18Speaker 05

  Yeah. Founder's Fund 2 is probably going to be a 300x fund. I think Blockchain Capital right now is 157x fund and it's on its way to being 250. And Chris Saka, of course, was 204. So, you know,

• 2:05:33Jordi Hays?

  I didn't realize FF2 was that good.

• 2:05:35John Coogan?

  SpaceX.

• 2:05:36Jordi Hays?

  I know, but still.

• 2:05:38Speaker 05

  It's amazing.

• 2:05:39John Coogan?

  No, it was a lot of fun.

• 2:05:41Speaker 05

  Yeah. Not having more in those.

• 2:05:43John Coogan?

  Yeah, wild. But yeah, thank you for coming on. Thank you so much for talking about the anti-portfolio, the wins, the losses. This is like what makes a great interview. So thank you so much. It's been a lot of fun.

• 2:05:53Speaker 05

  Yeah, I appreciate it.

• 2:05:53John Coogan?

  We'd love to have you back on and talk more about venture, the different landscape, how rounds are changing, how funds are changing.

• 2:05:59Jordi Hays?

  Next time, what, what, I think we would appreciate, because you have a bunch of interesting data, is like a regular interview where you're talking about the current actual market dynamics from an LP standpoint. Because like, getting that kind of read, all the venture stuff and the venture deployment is, you know, lagging indicator typically of, you know, LP activity, you know, historical LP activity. So this was great. I appreciate it.

• 2:06:24Speaker 05

  Yeah. Thanks for having me on.

• 2:06:25John Coogan?

  Yeah. Have a great rest of your day. Have a great rest of your week and we'll talk to you soon, Michael. Thank you so much. Let me tell you about Cisco. Critical infrastructure for the AI era unlocks seamless, real-time experiences and new value with Cisco. And our next guest is June Sung Park from Simile.

• 2:06:44Jordi Hays?

  He's back.

• 2:06:45John Coogan?

  Co-founder and CEO with a huge fund raise. June, how are you doing? Welcome back to the show.

• 2:06:52Speaker 06

  Hi, everyone. Great to see you all.

• 2:06:54Jordi Hays?

  Great to see you. Dude, you've been cooking. You've been cooking.

• 2:06:59Jordi Hays?

  It must be about a year since you were on.

• 2:07:01John Coogan?

  I don't know. It's blown, it's blown by, but congratulations. Why don't you give us the news first because it's the first gong hit of the show. I gotta warm up the gong and then you gotta tell me what happened. How much did you raise?

• 2:07:15Speaker 06

  We raised $200 million at $2.5 billion.

• 2:07:21John Coogan?

  Thank you so much. So, where is the company today? Take me through the footprint. How big is the company? What really unlocked this new round?

• 2:07:33Speaker 06

  So, the last time I was at TVPN, I believe it was about five months ago. Since then, the company, literally the team itself, has quadrupled. And one of the amazing things that we're seeing here is the pure market demand. The Simulay is a company, it's an applied AI lab that is creating foundation model of human behavior, where we create models that can predict human behaviors across different market segments, in the future, in the multi-agent simulations. And this particular area of study and model is seeing extreme amount of demand across retail. So, we've been working together very closely with CVS, but other Fortune 10, Fortune 50 retailers. But also in finance, in some of the largest financial banks that are out there today, and also in CPG companies and more.

• 2:08:18Speaker 06

  So, the market demand has been incredible.

• 2:08:21Jordi Hays?

  Demand for AI products is insane everywhere. And you're clearly no different here. How are you grading yourself? Because it sounds like, this feels like the product, the kind of product where like, the value prop, if the product works, is like, almost too good to be true, right? Try to understand people's future actions so that you can better serve them as customers and all that kind of thing. And I feel like humans want to believe that, you know, they have free will and like, you know, you couldn't possibly predict my next move, June. I'm too unpredictable. I'm sure you disagree. But like, how good, how good is the product today? And how much better can it get? Like, from a, from an accuracy standpoint?

• 2:09:07Jordi Hays?

  And, and on that, like, what, what gets a CVS or one of these big logos confident in your product? Where they're like, actually changing their roadmap based around your data?

• 2:09:20Speaker 06

  That is a great question. So, there's a technical side and the market side. On the technical side, today, we may have already seen many models that are trying to be amazing reasoning models. So, many of the labs are working on this. So, they would go to more core skills of the world, get expert data, encoding, natural sciences, mathematics. These are trying to solve the objective problems in our lives. Simulay doesn't actually care about any of that. The models that we create are models that are trying to be as human as possible, to actually represent the human values, preferences, taste, all the subjective half of human brain. So, what we do is we get into partnership with places like Gallup of the world

• 2:10:03Speaker 06

  that are amazing at creating a representative sample of human population. And we try to understand what is the real behavior and distribution of our human population. So, really, on the technical side, the success here is can we predict that distribution? Can we predict people's behaviors? And can we represent them at the scale that we want? The vision here is to actually represent only a billion people along the way. And we're very much going aggressively towards that momentum. And right now, we are representing tens of millions of people as we speak.

• 2:10:33John Coogan?

  Yeah.

• 2:10:33Speaker 06

  So, that's the technological side.

• 2:10:37John Coogan?

  How much? Yeah, yeah.

• 2:10:38Jordi Hays?

  Continue.

• 2:10:39John Coogan?

  I have another question, but continue.

• 2:10:42Speaker 06

  And of course, on the market side, this technology is now having real impact. So, we've been in deployment. So, we're obviously a fairly young company. However, the simulation as technology has been in deployments in some of the largest markets in the world. And companies are making real decisions. They are usually starting from actually replicating what they know to be grand truth. The studies they have run, the behaviors of their customer they're aware of. Now, we run them in simulation. We see that they replicate with extreme accuracy. And once they replicate, we go on to test new markets to basically help them test, pre-deployment testing on new markets, new product, message testing, and actually show ROI on those predictions.

• 2:11:24Jordi Hays?

  Okay, very, very cool tool. Sounds like it's working.

• 2:11:30Jordi Hays?

  This feels like the, there's, there's one scenario here, the, the sort of sad scenario is like, big companies get access to the crystal ball that allows them to just like, compound their scale and their growth and their customer bases. And, and they have access, you're, you're building like predictive superintelligence or predictive intelligence. The biggest companies in the world have access to this. Meanwhile, the like, long tail of, you know, Shopify brands and smaller companies are just stuck, you know, guessing. I'm super curious, do you think there's a product to be built that, you know, that the long tail of companies can, can leverage to get access to that same intelligence?

• 2:12:10Jordi Hays?

  Because I feel like a big company can afford to spend $20 million launching a new product and like, swinging and missing. So, they have the advantage of scale and being able to take different shots on goal. And they have this sort of like, base of successful products. Whereas you have a young startup that's just trying to get off the ground. And you have maybe one, two shots to make something, you know, thinking about consumer brands. If you're a consumer brand and your first or second product aren't a hit, like, you're probably not around to launch the third. So, I'm curious about how many people you can get this to.

• 2:12:42Speaker 06

  So, this is a great question. I would actually look at this as the way to democratize access to people. If you look at how insights really operates today, if you're a large enough company, you have the budget and you have access to your customers, to go after those customers, to better understand them, to actually talk to them, get their feedback. But especially if you're a younger company, that is small, that doesn't have a big budget, that is very cost prohibitive in many ways. Simulation is no way to get access to people in a scalable way. So, it is actually a way to democratize this function. You can also think about this from the people's perspective, people who are represented by simulations. There's so many decisions that are being made today where we would love to be able to listen to people and actually see and get their feedback.

• 2:13:28Speaker 06

  However, in practice, it's very difficult. You cannot actually go talk to millions of people every time you need to make a decision. But if you can create simulations of people, then that is representation at scale. So, in the grandest sort of scheme of Simulay, what we are really trying to achieve is to bring human voices to the rooms where the most important decisions are being made for our society.

• 2:13:50Jordi Hays?

  And what does that actually look like in practice? Is that like, people are developing a product? Again, I'll use like, a big CPG company. They're developing a product and they can actually like, pitch, like, effectively like, like, I'm wondering how much this is like, tech space right now versus actually conversational? Like, can you simulate talking to your customers? I'm sure the YC folks would, would laugh at this. Like, stop simulating talking to your customers and just talk to your actual customers. But, but it feels like very valuable. You know, there's, there's, every founder's had the experience of like, having a big customer meeting

• 2:14:33Jordi Hays?

  and it either going great or not going great. And sometimes you wish you could have like, just done a bunch of simulations of that conversation before you actually went into it. So, what is this actually, like, how are people interacting with the product now? And where will they, and what are the other kind of interaction formats of the future?

• 2:14:51Speaker 06

  Really, right. So, our customers come in and what they see is an interface that allows them to filter down to a population of their interest. So, they can describe the population to be whatever they want it to be. Let's say, male living in California in their 30s. And then they can literally ask any questions. That can be a behavioral, environmental questions.

• 2:15:10Jordi Hays?

  What about male, male podcasters in their 30s in California?

• 2:15:14Speaker 06

  You know, you, you must have guessed, you know, I simulated both of you before coming on today.

• 2:15:18John Coogan?

  You did that last time.

• 2:15:20Speaker 06

  Just like last time.

• 2:15:22Jordi Hays?

  You're like, we've had this conversation thousands of times.

• 2:15:28Speaker 06

  This is my thousandth first time I'm having this conversation with you.

• 2:15:30John Coogan?

  Yes, yes.

• 2:15:32Speaker 06

  But our customers can literally filter down to any population of their interest. And they can ask questions. It can be a survey form. They can also send images, if it's image asset, videos, if it's a video like advertisement. It can even be a product demo, whether it's a Figma or real website. And our agents will actually traverse through those websites and Figma mocks and basically give feedback once they have seen it. Now, that's how the product is being leveraged today. But one of the things that I also find to be quite exciting is as agent tech development goes much more prevalent, the cost of production is going down every single day. Now, the real alpha in that case really is to understand what do people actually care about?

• 2:16:15Speaker 06

  We can generate 10,000 variations of this product, which one actually matters to people? So, in that way, Simulay also has an opportunity now to actually inform not just human decision makers, but, but also agentic decision makers who have delegated power from real humans. So, this is done through MCP, API. These are the kind of product that are also getting built instantly.

• 2:16:39John Coogan?

  So yeah, oh, okay. Very interesting. Thank you so much for coming on the show. Congratulations on the progress. Really, really awesome.

• 2:16:46Jordi Hays?

  Yeah, one of the most, I love how sci fi the company is, but also grounded in in practical business.

• 2:16:52John Coogan?

  Yeah.

• 2:16:53Jordi Hays?

  Objective.

• 2:16:54John Coogan?

  That's a great way to put it. Yeah, it's like very, very sci fi, but like then it's like CVS is a big customer and driving actual value, which is great.

• 2:17:02Jordi Hays?

  Next time you come on, I'm sure it'll be soon, given, given

• 2:17:06John Coogan?

  trajectory.

• 2:17:07Jordi Hays?

  The trajectory, but I want you before the conversation to predict, you know, 10 questions that you think John would ask, 10 that I would ask, and then, and then let's, let's compare at the end.

• 2:17:20Jordi Hays?

  I have a feeling you'll be able to like that at least like 60% accuracy.

• 2:17:24John Coogan?

  Yeah.

• 2:17:25Jordi Hays?

  Uh, but this was great.

• 2:17:26John Coogan?

  Well, thank you so much for coming on the show. Congratulations. Talk to you soon. Let me tell you about Shopify. Shopify is the commerce platform that grows your business unless you sell in seconds online, in store, on mobile, on social, in marketplaces, and now with AI agents. And our next guest is in the waiting room already. We have Karen Kundra from K2 Space with an amazing update. How are you doing?

• 2:17:45Jordi Hays?

  Here he is.

• 2:17:47Speaker 07

  Good to see you again.

• 2:17:48Jordi Hays?

  He's back.

• 2:17:49John Coogan?

  You're back. Welcome back. Uh, give us the news. The gong's warmed up. I want to hit it again.

• 2:17:54Speaker 07

  Yeah, so we just announced a $500 million round.

• 2:17:59John Coogan?

  Congratulations.

• 2:18:02Jordi Hays?

  Uh, so for anyone living under a data center here on earth, what's going on in space? What's the latest on the space economy? Anything happening? Any big, any big deal?

• 2:18:12Speaker 07

  Not that much. It's been, it's been a quiet year. Um, you know, a lot of like seed stage investments, nothing much going on in space this year. But no, I, uh, yeah, we, we started K2. We wanted to build giant satellites. Since the last time we talked in December, we flew our first giant satellite. We called the mission Dramatass, if you guys remember, and, uh, it's gone well. We're 120 days in. We proved that we could do a lot of really hard things. And, uh, yeah, this round comes on the back of that.

• 2:18:37John Coogan?

  What was the very first satellite that you thought about putting up in, in terms of actual use case? Like the, if I go back to the very first deck or memo you put together, obviously there was a vision for building satellites, putting them in space. But were you thinking cameras or internet or data centers? Or like, what was the earliest prediction?

• 2:18:59Speaker 07

  So when we started the company in June of 2022, um, our pitch deck was all about Starship. And it was all about like building physically, what's the largest possible satellite you could build using Starship?

• 2:19:10John Coogan?

  Yeah.

• 2:19:10Speaker 07

  And it was, uh, I mean, we were, we were thinking about data centers, we were thinking about orbital fuel stations, we were thinking about giant telescopes, like, uh, and our pitch deck to show you like how wrong we were, we were like, oh yeah, in 2024, we'll be using, you know, Starship on like a monthly basis.

• 2:19:24John Coogan?

  Yeah.

• 2:19:25Speaker 07

  A little bit wrong on time in there, but, uh,

• 2:19:26John Coogan?

  Yeah.

• 2:19:27Speaker 07

  It's all right.

• 2:19:28John Coogan?

  And, and, and those delays, I mean, there, there have been delays, everything, I mean, the video of Starship landing that dropped like a week ago is incredible. Everyone's like, you know, I can't believe this isn't CGI. Um, are, are you, are you set up? Do you set up your business to be insulated from those delays? Is the overall like space economy broad, broad enough and diverse enough that at this point slight delays, everyone sort of adjusts all the different actors from employees to investors, no one really freaks out when there's like a slight delay there because everyone prices it in?

• 2:19:59Speaker 07

  Yeah, we got fortunate. We had a few, uh, a few very smart people tell us in 2022, maybe don't go full send on Starship.

• 2:20:06John Coogan?

  Okay.

• 2:20:06Speaker 07

  And, uh, thankfully, and, and so we, we built something that's like compatible with Falcon 9, our entire business. Like we announced that we also crossed a billion dollars in signed contracts. All those contracts are tied to Falcon 9, right?

• 2:20:26John Coogan?

  So I have heard, I think we've all heard the pitch of, uh, lots of small satellites, potentially data centers network together. We've all seen the, how well Starlink works. It's an incredible technology. And it, and it's an incredible technology because it works with Falcon 9. It also works with Starship. But is there an actual use case or a world where you see basically the Starship fairing filled with just a single satellite? Some huge thing that goes up, stays there and it's massive and there's benefits of the scale to that degree?

• 2:21:01Speaker 07

  Yeah, I think for us, at least we're going to use it for proliferation, like lots of big satellites.

• 2:21:05John Coogan?

  Yeah.

• 2:21:05Speaker 07

  Um, I think there's probably some military use cases that might get interesting where you go even bigger and maybe fewer per, per Starship. But for the most part, we're going to stick to like, okay, let's put up like 50 of these in a Starship and think about how to max out how much power per satellite and power per launch vehicle.

• 2:21:20John Coogan?

  Sure.

• 2:21:20Speaker 07

  Um, maybe on the telescope side, like it starts to get like giant, giant telescopes.

• 2:21:24John Coogan?

  Yeah. But even those with the Hubble, like you can usually like assemble things in space, which sounds even more complicated than anything else. But, uh, but it has been done before, like the ISS didn't go up in one big piece. It was assembled over time. Which is remarkable to think about, but, uh, congratulations. Walk us through, um, the, uh, the, the energy density or energy, the power output that comes from, uh, these satellites. Because, uh, with, there's this big vision that Elon's been very good about laying out the timeline. You know, who knows, might slip or whatever, but there's this idea of like gigawatts in space. That would be meaningful to the AI inference market. Um, but there's clearly going to be a walk, crawl, run.

• 2:22:07John Coogan?

  Starlink has a certain amount of power. We've seen that that can work. But what is the scale up and build out of just getting more energy in space before you start running into crazy heating and what the solar capacity can be?

• 2:22:20Speaker 07

  Yeah, I mean, power drives everything in space, right? If you think about communications, um, power drives how much throughput you can put down on the ground. It drives the strength of signal. If you think about compute, power drives how much compute you can host. It is like the fundamental metric that kind of ties every development to. And so, um, you know, I was telling people like 40 years ago, we started this company called K2 because we wanted to help make humanity a, a type two Carter ship civilization. Right? Like one that's able to harness massive amounts of energy, right? Um, our hallmark is a Dyson sphere.

• 2:22:49John Coogan?

  Yeah.

• 2:22:49Speaker 07

  At the time I had to explain like, what is a Carter ship, right? Like nobody knew what that was. And now everyone, Elon is like, I know exactly what that is. I know how it works. Um, and so for us, like the whole idea is keep pushing the bounds of power so that we can have even more compute. We can have even more comms and over time, like every single infrastructure play we're going to want to do in space is going to tie back to power. Maybe a bit of mass as well, but like all of those require going built, you know, building bigger effectively.

• 2:23:17John Coogan?

  On, uh, heat radiation in space, that's been sort of one of the sources of like fear, uncertainty and doubt around the data center in space plan. There's, I've seen really, you know, thoughtful takes from scientists on both sides. My question is more on where that intellectual property, that R and D will happen. Because, uh, if this were 50 years ago, we'd probably be like, it will be done at DARPA and NASA, and it will be in the public domain. And every company will be able to benefit from it. Uh, we're now in this world where some of that might happen at SpaceX and that might be sold or licensed. But, uh, are you going to be working on that particular technology? Do you see, uh, multiple companies creating standards around it?

• 2:24:00John Coogan?

  Or is it just sort of a, a horse race between every company where everyone will have their own solution? Maybe the best one wins. How will that play out?

• 2:24:07Speaker 07

  Yeah, I think, I think the evolution is going to be, there's a conventional way to solve the thermal problem, even at the 100 kilowatt class satellite, right? Like you can do it with the existing technology. It's just an engineering problem more than a, a physics or R and D problem.

• 2:24:20John Coogan?

  Yeah.

• 2:24:20Speaker 07

  Over time, I think we're just going to get more optimal and we're also going to be pushing up power more and more. Where everyone's going to try like, you know, the new science, right? So I think you're right. Like we're going to see a massive amount of capital investment invested in managing thermal in space in a way that was never going to happen in a world where NASA was the only one pushing, you know, the R and D forward. I think it's going to be pretty cool. I think we'll see, you know, like how different strategies play out. For now, in the next five years, I think it's going to be relatively conventional. Like there's not going to be, it's just engineering that's like solving some problems that, that should be solved.

• 2:24:51John Coogan?

  Yeah. Uh, I feel like a lot of, uh, maybe it's all hard tech, certainly space companies, they sort of go back and forth between the dual use, uh, opportunities. They'll do some, uh, government work for a few years while the commercial sector sort of catches up. Then they'll flip it and all of a sudden the revenue will be 90% commercial. Are you on that sort of roller coaster as well? Do you see you, do you see, uh, the company going through phases of, well, we're doing a lot of government contracts, but we ultimately want to have a big commercial business or vice versa? How do you see the, the trade offs there playing out?

• 2:25:23Speaker 07

  Yeah, we've always seen it as like both, right? Like I'm going to be about 50 50 in our business. Like the first big contract we announced this year was a massive, uh, commercial contract for 30 satellites that we're going to deliver in 2028.

• 2:25:33John Coogan?

  Yeah.

• 2:25:34Speaker 07

  Um, the second contract after that was partnering with Androl on, on Golden Joe.

• 2:25:38John Coogan?

  Sure.

• 2:25:38Speaker 07

  So, um, for us, like it's, the whole goal is to be able to build this like super performant platform that we can use for national security and commercial.

• 2:25:46John Coogan?

  Yeah, yeah, that makes a lot of sense.

• 2:25:47Jordi Hays?

  Do you think hyperscalers and big telecom companies over time will feel like they need in-house, uh, space in, in a more meaningful way? Like it, it, right now it feels like, uh, having a specialized partner makes a lot of sense, but then as space becomes a more important part of like, let's say cloud and, and uh, on the telecom side is just like general communications, like you'd imagine that them thinking like, wait, we should try to buy a company like K2 because this is too important for us to just be entirely reliant on an external partner. I can see it going both ways, but I'm curious your view on it.

• 2:26:29Speaker 07

  A hundred percent is going to be mixed, right? If you look at like how comms and compute happen on the ground, trustfully, right? Like Meta is rolling out their own deep sea fibers, right?

• 2:26:37John Coogan?

  Yeah.

• 2:26:37Speaker 07

  Um, you know, Google's partnering with certain Neo clouds in a certain way. And I think the exact same thing is going to happen as we take those applications and put them in space.

• 2:26:44John Coogan?

  Yeah. It is funny looking at the mag seven, I guess mag eight now, if you include SpaceX. Like if, if, if the question is just like going up high, doing things off of earth, like Google has the balloon project and uh, Facebook was doing solar powered planes for a while. Bezos obviously has Blue Origin and Amazon, not directly linked, but there's a play there. And so the, the, the, the, the big tech companies are certainly waking up more and more, doing deals, but also having stuff in-house and outside. It's a fascinating market, watching it evolve.

• 2:27:16Jordi Hays?

  Yeah, it's interesting to compare launch to just the frontier labs.

• 2:27:20John Coogan?

  Yeah.

• 2:27:21Jordi Hays?

  A lot of people realizing like, whoa, it's kind of, it's interesting not having a frontier model and, and being reliant on another partner. And then on the space side, it's like, hey, we, we don't necessarily want just one highly competent launch party.

• 2:27:34John Coogan?

  Yeah.

• 2:27:34Jordi Hays?

  Or sorry, launch, uh, company.

• 2:27:36John Coogan?

  Yeah.

• 2:27:37Jordi Hays?

  So.

• 2:27:37John Coogan?

  And we've seen that with Rocket Lab and a bunch of other companies in the space economy. Uh, but yeah.

• 2:27:42Speaker 07

  I think that's the coolest part about this, right? Like, we're seeing like a purely capitalist reason to go invest tons of capital in things like launch vehicles.

• 2:27:49John Coogan?

  Yeah.

• 2:27:50Speaker 07

  Right? Like, that's something that didn't exist five or even 10 years ago. And, you know, outside of SpaceX, right? So I think that that's probably like one of the most fun dynamics of this whole orbital compute dynamic that's happening now is everybody's like, wait, to your point, like, hey, launch is just like, you know, a model. And if I'm the only one that has it, I'm going to be in a lot of trouble.

• 2:28:07Jordi Hays?

  Yeah.

• 2:28:08John Coogan?

  Yeah.

• 2:28:09Jordi Hays?

  And I can't stop thinking how you're kind of office studio mogging us right now. We have a pretty big space here, but you have you have a K2 space.

• 2:28:19John Coogan?

  Yeah, it's amazing.

• 2:28:21Speaker 07

  Go bigger.

• 2:28:22Jordi Hays?

  Go bigger.

• 2:28:22John Coogan?

  Go bigger.

• 2:28:23Jordi Hays?

  Excited for the next one. Great. Great to see you and congrats to the team on all the progress.

• 2:28:27John Coogan?

  Yeah, thanks so much for taking the time to come chat with us. Have a great day.

• 2:28:30Jordi Hays?

  Cheers.

• 2:28:31John Coogan?

  We'll talk to you soon. Let me tell you about the New York Stock Exchange. Want to change the world? Raise capital at the New York Stock Exchange. Just do it. Stop making excuses. Up next, we have Vlad Tenev from Robinhood. He's the co-founder and CEO back for the third or fourth time. Vlad, how you doing?

• 2:28:50Jordi Hays?

  We got new sound effects.

• 2:28:51John Coogan?

  We got new sound effects.

• 2:28:53Jordi Hays?

  Great to see you.

• 2:28:54John Coogan?

  How's it going? The market's in turmoil. There's obviously crazy news with situational awareness, but how are things going in your world?

• 2:29:02Vlad Tenev?

  Things have been strong. We announced earnings and we had a really strong quarter. Record revenues, 1.31 billion. Total platform assets, all time high.

• 2:29:21Vlad Tenev?

  And we had more records on trading. So records, again, with equities, options, prediction markets. And we launched Trump accounts, as well as Robinhood chain and and tokens. So we're doing a lot of stuff. I think the thing that I'm most excited about is, you know, wrapping everything together. I don't think any company is pushing broad individual ownership as as much as Robinhood is. We I think that's important, not just for individuals, but also on a societal level. You know, I think I think we're in a very fragile spot right now. And plugging more people into owning real assets, giving them more of the

• 2:30:06Vlad Tenev?

  upside, more of the benefit, could lead to a more stable and prosperous society.

• 2:30:13John Coogan?

  How difficult is it to actually, when you say unify everything, I imagine that there are, there are regulatory considerations, there are also just UX trade offs that feel like, I don't, I don't know, it feels like it's more human taste than AI. It feels like it's not, it's not so much like the code that goes into the app, but real decisions about the hierarchy of different products in your app on the website, for example. How much of your time is spent thinking about the like, the Robinhood super app, like, how you actually design these things? How human is that versus you can sort of A B test your way there?

• 2:30:56Vlad Tenev?

  Spend a lot of time thinking about that. And you can't A B test everything, right? Like, you can't A B test the name of the product, the front door, what's on the App Store pages. So, yeah, I'd say up until a couple of years ago, we were very much trying to rev up the product engine, putting all the pieces in place. Now, we've got so many pieces. We launched 13 new products at our previous event. The world is flat. And an increasing amount of time is spent on kind of this coordination. And how many apps should we have? The main app, like, what goes into it? How do we surface the right things to

• 2:31:40Vlad Tenev?

  the right people? How do we push personalization? So, yeah, it's, it's, I spend a lot of my time on that.

• 2:31:47Jordi Hays?

  How is, how is, so we've been in this AI, you know, the bottleneck cycle, the age of bottleneck investing is probably not over, but symbolically, maybe over with the situational awareness situation today. But something I think that there's a lot of American retail investors that for the first time where it was like, oh, wait, I want to own this Korean stock, or I want to own this Japanese stock, because this toilet company is in the bottleneck path. How is that changing how how you're thinking at Robinhood? Obviously, you want to make sure that if invest, if there's an asset that

• 2:32:27Jordi Hays?

  investors want to buy, like, your job is to make sure that they can do that. But markets are complex and and, you know, all these regions are quite different.

• 2:32:39Vlad Tenev?

  Yeah, I mean, I have many thoughts. I think that, you know, we were hearing from customers that they wanted Korean stocks, right? And so international stocks were one of the features people wanted. But I don't know, it was probably like, top 15, top 20, right? It wasn't one of the top features. And then suddenly, maybe last quarter, every single conversation I would have, people are like, when are the Korean stocks coming? Why can't you bring them faster? Right? And then, and then you saw some of them started

• 2:33:18Vlad Tenev?

  getting ADRs listed, leveraged ETFs. And I think I had two minds of it. One, obviously, we intend to offer every asset. We want, if people want to trade it, we'll, we'll offer it to them to trade. But also, when you start hearing that everyone wants Korean stocks, it should raise alarm bells that maybe something could be slightly overheated, at least temporarily, which I think is, is what ended up happening. I think it's interesting too, that Ken Griffin is in the middle of this. You know, a lot, a lot of respect for

• 2:33:56Vlad Tenev?

  Ken Griffin, just, you know, you can tell he has pure love of the game, loves what he does. You know, maybe, maybe in the way that a Pavarotti is, you know, the, the art of the opera singer and, you know, Trump, Trump obviously make makes deals. Ken Griffin provides liquidity in the most challenging and uncertain of times. So, yeah, him being in the middle of this, buying the Constitution.

• 2:34:27John Coogan?

  Yeah.

• 2:34:29Vlad Tenev?

  Yeah, I thought, I thought that was very entertaining.

• 2:34:33Jordi Hays?

  I view him as like a, a shark, like a very large shark, like a megalodon, that has an important role in the ecosystem, where sometimes he, you know, is, you know, you maybe don't want to be

• 2:34:51John Coogan?

  Well, this is just the second or third time that he's been like the final boss of tech stories, where the Constitution Dow, all, all the energy was in tech, it was this thing that happens. And then at the last second, it's like, let me introduce you to Ken Griffin. And then the same thing with the situational awareness story. It's like purely a tech story for, you know, months and months and months, and the domain of Twitter and podcasts. And there's like one or two Wall Street Journal articles about it. But then all of a sudden, it's Ken Griffin at the very

• 2:35:18Jordi Hays?

  Yeah, how, how, about a month or two ago, there was a like, this sort of narrative bubbling that like, the West Coast had just like eaten the East Coast and like, the East Coast is having less relevance, right? And you could see this in the performance of all, a bunch of the hedge funds on the East Coast. You look at their performance relative to Leopold's, and you're sitting there like, you know, what is, what's, what are they doing on the East Coast? Are they just sort of asleep at the wheel? And then, you know, the events of the last 24, 48 hours, or at least since Friday, have shown that like, yeah, maybe the East Coast like, has learned a lesson or two about the way that markets work in these cycles. And, and I feel like Robinhood's been in a position where it's

• 2:35:59Jordi Hays?

  like, very much a West Coast company, to me. But at the same time, you guys have, I think now, at this point, like, probably more respect than any West Coast tech company for traditional finance and that whole world. So I'm curious how you was, was, did you ever kind of like, buy into that narrative that, that tech was eating finance? Or did you always see it as just wishful thinking?

• 2:36:28Vlad Tenev?

  I mean, I think certainly there's some truth in that technology, which had at its epicenter, Bay Area, you know, Silicon Valley has disrupted lots of industries. I never really looked at it as a coastal thing. It's not like, you know, rap music or anything like that, where you're kind of in your neighborhood, you know, offering, offering the technology. Everything's fully global. And, you know, I'm sitting here in New York. Usually, I'm in Menlo Park. We've got offices all over the world. New York's probably our second biggest. And now it's, it's increasingly a global thing. I think a lot of these people

• 2:37:12Vlad Tenev?

  are, you know, a lot, a lot of the hedge fund folks are working remotely and now out of California. So I don't know if, yeah, I don't know how much of it is actually location based.

• 2:37:25Jordi Hays?

  Well, I think part of the interesting story for, you know, we were talking with Shkreli earlier, and he was like, kind of walking us through, like, if you're a hedge fund that's getting margin called, like, what that's actually like. And it's like, for being a technology focused hedge fund, it's still, the irony of it all, and even an AI focused hedge fund, the irony of it all is like, it sounds like if you're a hedge fund that's getting margin called, you're spending a lot of time on the phone with your prime brokers, and you're trying to like, it's not really as much of a technology problem as like, you're working with a lot of people and a lot of different buyers. And there's all this game theory of like, when, you know, trying to exit positions

• 2:38:08Jordi Hays?

  without letting other funds know that you're, you know, it just seems like this. Yeah, it's like a very fascinating, like,

• 2:38:19Vlad Tenev?

  When the stakes are high, right, it ends up being down to relationships. Yeah, I think, yeah, I think, you know, algorithms and automated processes are great for the typical case, you know, the 99% scenario, but I think humans still have to get involved at the extremes.

• 2:38:42Jordi Hays?

  Yeah. It feels like retail crowd, for the most part, is like extremely, I mean, it's all just very power law driven. So I would imagine like even though oil has been like a super interesting market this year, it wasn't quite as interesting or didn't have quite as much attention as like the bottleneck trade. And certainly like, you know, crypto has been, has probably gotten less attention this year than, than many of the years prior, just because it was like, well, if you can buy some stock that's trading at $100 million and it can go up to $2 billion in the span of a, of a couple of months, like that's what gets people really interested.

• 2:39:24Jordi Hays?

  Is that, is that, is that, is that track with, with what you guys are seeing? And like how on, on the commodity side, like what, what are you guys doing on, on that front? Is there a lot more things you can do at the product level? Or did, had you already sort of established like, is, is trading oil on Robinhood as good as it, as it's going to get?

• 2:39:51Vlad Tenev?

  Yeah, I think there's, there's obviously more we can do. We have a great futures trading products. We have a great mobile experience. We have a trading ladder. I don't know if you guys have tried it, but it's like very tactile, easy to use, particularly on mobile. Futures business has been, has been growing quickly as well. One of the things we announced this quarter is we've got 13 business lines, so lucky number 13, generating 100 million in annualized revenue or more. So we added two more this quarter. Robinhood Legend, which is our pro trading platform. And, and that, a big part of that is actually futures.

• 2:40:33Vlad Tenev?

  Futures traders love the desktop interface and it's just much easier to see the chart and, and have the news and, and everything all in one place. So Robinhood Legend got to north of 100 million annualized. And the Robinhood Gold Card crossed into 100 million as well.

• 2:40:52Jordi Hays?

  Yeah, the last number I remember was nine. At some point last year, you had nine business lines doing over 100. So add it even, even more.

• 2:41:00Vlad Tenev?

  Yeah, it for since then. It's like, I, I had this analogy that it was like adding cylinders to a high performance vehicle. So now that we're at 13, I'm probably close to needing another analogy. But yeah, it's remarkably diversified.

• 2:41:16Jordi Hays?

  I don't know, Bentley's got the W16. Or no, sorry, sorry, not.

• 2:41:19John Coogan?

  That's the Bugatti.

• 2:41:19Jordi Hays?

  Bugatti.

• 2:41:20John Coogan?

  Has the V16 now.

• 2:41:23Vlad Tenev?

  Maybe I've got three more, yeah.

• 2:41:24John Coogan?

  Yeah, yeah, somewhat related to Jordy's question. It's very interesting that when you identified a new product request, Korean stocks, you were just stack ranking it based on customer demand, not really financial volume. It felt, it's, it felt very much like when you talk to customers, that's just what they're asking and it's just maybe showing up in forms and feedback and requests. And I'm interested in other markets that might sort of pattern match to that where there's a lot of, there's a lot of money moving around, but it's maybe lower on the priority stack. And I'm interested in how you're thinking about compute futures, because that feels

• 2:42:03John Coogan?

  like that could be a very big market, sort of insuring data centers and, and, you know, providing, you know, some sort of derivatives market on top of compute, which is a massive market. But when I think about it, I feel like some of those big numbers might just come from, you know, a hyperscaler who gets an insurance contract from their bank when they go to build a big data center complex. And it might not actually be the, like, the, the vast majority of the, of the volume might not be driven by retail at any point in the future. And so I'm wondering how you deal with new financial markets that are going to be big, but you don't, you don't see a lot of demand from them. How do you think about reasoning through how you should play in that market?

• 2:42:50Vlad Tenev?

  Yeah, I mean, I think if we have strong conviction, we'll add it even before it becomes a huge asset class in terms of volume. I think we did that with crypto. You know, we added crypto in 2018 and it was many years of next to no volume until end of 2020, when suddenly it just really inflected. So compute futures, yeah, if, if there's a lot of demand and if people are trading them and if institutions are using them to hedge, of course, we'll look to add that. I don't know if we're seeing much of that yet.

• 2:43:30Vlad Tenev?

  I, I think the tricky part about that is it's a typically a rapidly depreciating asset. So I, I think those tend to not make for, for very good markets. But, you know, you, you are in a unique situation where compute on a, on a per, on like a given architecture tends to be increasing in the short term. I don't know how long that'll last, but I, I think that's, that's rather unique in history and we'll see if it's the same in, in the next two to three months.

• 2:44:07John Coogan?

  Can you take me through a little bit more of the story of the Robinhood Gold Card? And how it's changed, how you're positioning it, how it's evolving, what's driving the growth?

• 2:44:17Vlad Tenev?

  Yeah, so what's driving the growth is a very simple value prop, 3% cash back on all categories, which is much bigger than what you'd get with a typical credit card. You know, it's market leading. And so when we find that the best products are easy to explain to your friends, they grow through word of mouth. And, you know, if someone asks you, well, why would I use this credit card? You have a very simple answer, 3% cash back on categories. And of course, the user experience is nice and, and you have virtual cards and family features and, and we, we make it really good around the edges.

• 2:44:59Vlad Tenev?

  But I think the, the clear reason that's easy to explain is, is a big part of it. So we're now at above a million cardholders with the Gold Card. I mentioned earlier, 100 million in, in annualized revenue for the card business. And last week, we started rolling out Platinum. So we have.

• 2:45:21John Coogan?

  There we go.

• 2:45:26Vlad Tenev?

  Yeah, we've got like a growing card portfolio. I think the Platinum Card is really, really good. We, if you haven't checked out the website, I, I really just, sometimes I just scroll through the website and look at all the great things that, that we're offering. The Platinum Card is a, a highlight, I think.

• 2:45:44Jordi Hays?

  Robinhood Social, what's the latest there? I've been seeing some screenshots. It's already providing a lot of entertainment, even for people that are not using the platform yet, but how's it going?

• 2:45:58Vlad Tenev?

  Yeah, I've, I've seen those too. Yeah, yeah, yesterday was, was a big day. Yeah, so Robinhood Social is something I'm really excited about. It's growing, we're rolling it out, it's not out to everyone yet. And the reason for that is we've just been iterating on all of the details. Building a social network from scratch is pretty complicated, right? You want to, there's a decision about what type of content you want to allow people to post. And at first we started with only trades and we came to the conclusion, maybe that was a little restrictive.

• 2:46:39Vlad Tenev?

  You want to give people a little bit more freedom to post charts and things like that, to post comments, maybe news stories, but you don't want to give too much freedom. So we've been iterating heavily. We just added politician trades as well, which, which have been doing quite well. And yeah, now you're starting to get to the point where you have legitimate influencers on Robinhood Social with, you know, thousands of followers and we're still rolled out to a relatively small portion of the customer base. So I think we've, we've got good signal that'll do well and it'll be useful. And yeah, yesterday, it's sort of like transition to people posting Robinhood social content

• 2:47:22Vlad Tenev?

  on X, which, which is very interesting. I think the unique differentiator that we have, that, that makes it compelling to people is that there's actual trades and real portfolios tied to the account. So we can combine these two things, you know, real transactions with opinions and that gives you a, a primitive that you can't find easily in other social networks.

• 2:47:48Jordi Hays?

  The same, the same content, you know, you see somebody post on X, like just closed out this position, like, you know, can, my, I'm updating my thesis or whatever, doesn't have the same weight if they are doing that and they either printed on it or, you know, or took a meaningful loss. So it's great content.

• 2:48:06John Coogan?

  I have one last question. You've been very early and very bullish on mathematical superintelligence. There's been a whole bunch of conjectures solved. It feels like a total validation of your idea that AI would be very good at mathematical problem solving. How have you processed the recent conjectures that have been solved by various models? How does this update you? Do you have like a next, next hurdle that you want the AI to solve? Because it feels like, I mean, I know people are still throwing like the, the Reiman hypothesis and P versus NP at it, but aside from that, do you have like a, an idea or a vision of where this goes?

• 2:48:49Vlad Tenev?

  Yeah, I think that's an awesome question, John. So the next thing is, in the same way that I applied my mathematical skills to computer science, you know, I was a mathematician and then I became a business person, what we found is that math skills and coding actually go hand in hand. So what I'm really excited about now is applying mathematical superintelligence to software. So in the same way that MSI can be used to make sure that your math is correct, when you have a computer program or a piece of software, it can be used to

• 2:49:33Vlad Tenev?

  make sure that's correct and that there's no mistakes. And I think particularly now when we have Mythos finding security bugs and you see all the scary stuff like we saw last week with the hugging face breach, rather than it being a cat and mouse game of just escalating model capabilities, finding breaches and preventing breaches from happening, verification and proof that software is immune to these types of bugs, I think is the future. So you're gonna see it first.

• 2:50:08John Coogan?

  Formal verification of software systems that you use and there could almost be like, I mean, you know, you go to those websites and it's like, there's a security certificate at the bottom and no one really knows if it does anything, but in the future, you could actually land at a website where the entire code base has been formally verified.

• 2:50:24Vlad Tenev?

  Yeah, and now the absence of a security certificate is a red flag. Browsers will block it. I think you're gonna see it first in domains where accuracy and correctness are critical. So you're seeing it a lot in crypto, actually, with crypto, formal verification is having a bit of a moment. You're gonna see it in semis. If you're producing a chip and, you know, the process of producing a chip is you get to tape out and beyond, if you find a mistake, it's incredibly expensive to reverse. So you'll see it in chip design, you'll see it in system software, you know, a lot of software, legacy software is written

• 2:51:06Vlad Tenev?

  in languages like C, C++ . So, yeah, I think you'll, you'll start to see it in these systems languages, critical software, and then from there, it'll just, as the price goes down, I think it'll be ubiquitous.

• 2:51:23John Coogan?

  Yeah, that's exciting. There's a lot of, there's a lot of fear about the cybersecurity questions, and I think it's, it's great that the mathematical progress can actually apply, even if it takes a couple reasoning steps, and I think people will need to digest it. And then they'll actually have to see it in, the proof is in the pudding, if we go through a whole period where we're like, wow, yeah, there haven't been any incidents, even though everyone's been, you know, piling zero days of every system, but we're still in a good spot. Very exciting. Wait, Bill?

• 2:51:55Jordi Hays?

  There you go.

• 2:51:56John Coogan?

  Thank you so much for coming on the show. Congratulations. Always good to chat.

• 2:51:59Vlad Tenev?

  Cheers, guys.

• 2:52:00John Coogan?

  Have a great rest of your day. And we'll talk to you soon. Goodbye. Let me tell you about MongoDB. What's the only thing faster than the AI market? Your business on MongoDB. Don't just build AI, own the data platform that powers it. I have one last post I want to go through. Jordy, have you seen Spider-Man: No Way Home?

• 2:52:17Jordi Hays?

  Absolutely. No, not. Absolutely not. Should I?

• 2:52:21John Coogan?

  I think I have.

• 2:52:22Jordi Hays?

  I'm pretty into movies now. I saw The Odyssey and I appreciate film.

• 2:52:26John Coogan?

  Movie, you're a film buff now. You're a film snob, honestly. No, there was a question on the timeline from Rob Felt, rewatching, he was rewatching Spider-Man: No Way Home to prep for Brand New Day, the new Spider-Man movie, and he says...

• 2:52:42Jordi Hays?

  That is actually insane. Right as you said that, a white spider landed from the ceiling onto my microphone. You see this?

• 2:52:49John Coogan?

  Yeah, yeah, I do. Wow.

• 2:52:51Jordi Hays?

  You said Spider-Man.

• 2:52:52John Coogan?

  Maybe you are the next Spider-Man.

• 2:52:54Jordi Hays?

  Just landed. I'll try to show everyone.

• 2:52:57John Coogan?

  Yeah, you might need to turn down the console, the, put down your laptop, swing it out more. Oh, it's really going around. Oh, it's on the ground now. Whoa, there we go. Can you see this at all? I don't know if people can see this, but there is a spider crawling on Jordy's microphone. You'll have to really, oh, there, yeah, you can see it in the, in the monitor right there. That's a very good omen. I think that's a good omen.

• 2:53:20Jordi Hays?

  Spiders can hear. They can speak English.

• 2:53:23John Coogan?

  Well, let's, you feel free to deal with that. I'm gonna talk about this. So, in Spider-Man: No Way Home, the movie, the prequel to Brand New Day, I think Homecoming is in this, in this series, right? There's a whole series of new, the latest round of Spider-Man with Tom Holland, right? Daily Bugle web show scene pops up and all I can think about now is a question. Is the TBN aesthetic inspired by J. Jonah Jameson's web show? And if you look at it, it does sort of look like our show. And so it's a good question. Did we

• 2:54:02John Coogan?

  see this film? Did Jordy, who is the brand architect of the TBN aesthetic, watch Spider-Man: No Way Home and say, ah, I like that color, I like that design, let's bring that into our studio? And the answer? No. No. Lots of other influences, but this was actually not one of them. I believe I have seen this. I like, yeah, we like the color green. I remember Jordy, one morning, we were working out and he's like, we should do green. And I'm like, okay, yeah, that sounds good. I like green. And he's like, no one's done green. And I'm like, that's not true. Like, Robin Hood is green. There's plenty. He's like, no one in tech, no one in tech has ever used green before.

• 2:54:45Jordi Hays?

  Not TBN green.

• 2:54:46John Coogan?

  I'm like, it is a white space in the sense that like, yeah, I couldn't think of another podcast with the green, dark green background. And we, and we did find our own space. We looked at Pinterest a lot for different references, some photos, some catalogs.

• 2:55:00Jordi Hays?

  I didn't look at Pinterest.

• 2:55:02John Coogan?

  What, what, what, what images were you pulling from? Because I know you had some references. I mean, obviously F1, but just your brain, just your brain. You don't let much go in there, but...

• 2:55:11Jordi Hays?

  Certainly not movies.

• 2:55:14John Coogan?

  Certainly not movies.

• 2:55:15Jordi Hays?

  I gotta figure out where this spider went. This spider landed, it was on the mic, I lost it. I think it's, I think that's a good place to call it.

• 2:55:23John Coogan?

  Anyway, it is a coincidence, Rob. That's your answer.

• 2:55:25Jordi Hays?

  It looks like, they're up almost 9% after.

• 2:55:29John Coogan?

  And the market is, is, is way up. The Nasdaq's up 2.78%.

• 2:55:34Jordi Hays?

  Should've been in white suits.

• 2:55:35John Coogan?

  In white suits, but it's a very sad day because we love situational awareness and they're going through a really hard moment. We're wishing them the best, hoping that, you know, good things come out of this ultimately. But it was, it didn't feel appropriate to wear a white suit on such a rough day.

• 2:55:49Jordi Hays?

  Yeah, I'm in a black suit.

• 2:55:50John Coogan?

  He's in a black suit because it's a very disappointing moment. But, of course, everyone has a long career ahead of them and there are many ways to build back better and do more big things in the future in the world of AI and technology. So, thank you for watching TBN. Tune in tomorrow at 11 a.m. Pacific.

• 2:56:06Jordi Hays?

  That's right. Thanks for hanging out.

• 2:56:08John Coogan?

  Apple Podcasts and Spotify. Sign up for our newsletter at tbn.com and we will see you tomorrow. Goodbye.