AI-Designed Viruses, OpenAI’s First Device, The Mansion Section | Diet TBPN

Diet TBPN delivers the best of today’s TBPN episode in 30 minutes. TBPN is a live tech talk show hosted by John Coogan and Jordi Hays, streaming weekdays 11–2 PT on X and YouTube, with each episode posted to podcast platforms right after. Described by The New York Times as “Silicon Valley’s newest obsession,” the show has recently featured Mark Zuckerberg, Sam Altman, Mark Cuban, and Satya Nadella. 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/ Follow TBPN: https://TBPN.com https://x.com/tbpn https://open.spotify.com/show/2L6WMqY3GUPCGBD0dX6p00?si=674252d53acf4231 https://podcasts.apple.com/us/podcast/technology-brothers/id1772360235 https://www.youtube.com/@TBPNLive

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

• 0:05John Coogan?

  Who had orange in the chat? Because the chat was trying to guess what color sunglasses Tori would be wearing today. Is that orange or is that more of like a burnt sienna?

• 0:15Jordi Hays?

  Well, I think it's more of a green, greenish frame with more of, with an orange lens.

• 0:20John Coogan?

  You gotta drop the line. I'm wearing sunglasses because I'm looking at the future and it's very bright indeed. I don't know, no one gets that reference. Anyway.

• 0:33Jordi Hays?

  It's great to be back. It's Friday. We got a shorter show for everyone today. General Partner of Coastal Ventures coming on to talk about their new investment, Discovery Loop.

• 0:44John Coogan?

  Yeah.

• 0:44Jordi Hays?

  Founded by none other than Jeff Dean and some of his crew from DeepMind. And then we have Patrick Wendell, co-founder of Databricks, joining to talk about their new blog post. I promise it's going to be more exciting than it sounds like. No, but they're doing smarter model routing and we're excited to catch up with him.

• 1:04John Coogan?

  Very excited. Well, for the first time, scientists have used AI to create entirely new viruses.

• 1:11Jordi Hays?

  You asked for it. They delivered. They delivered.

• 1:16John Coogan?

  They delivered.

• 1:18Jordi Hays?

  They woke up as, you know what we don't have enough of?

• 1:20John Coogan?

  Viruses that have never existed in nature before. It's marked a milestone that could accelerate biotechnology while also raising long-term biosecurity questions, of course. Nightmare scenario is you go to Best Buy, you get a gaming PC with a couple of pretty stock graphics cards and you're able to run an open source model that basically walks you through the steps of creating something really problematic. At the same time, there's a lot of really talented and well-resourced organizations that are fighting that tooth and nail. And so we'll probably see a little, little, you know, back and forth equilibrium there. But lots of interesting questions. Important to note that these viruses do not affect humans whatsoever. Even these new viruses, they target bacteria.

• 2:04John Coogan?

  So it's more of an experiment, more of a demo, but you can see where things are going. And are we gonna have?

• 2:10Jordi Hays?

  That doesn't make me that comforted, to be honest.

• 2:12John Coogan?

  You like, you like your bacteria to be virus free.

• 2:14Jordi Hays?

  You know, we naturally have, we're, there's bacteria.

• 2:17John Coogan?

  Yeah.

• 2:18Jordi Hays?

  That is, it's part of being human, right?

• 2:20John Coogan?

  And you would like the bacteria to be unaffected by viruses. Is anyone standing up for the bacteria right now?

• 2:25Jordi Hays?

  Well, it's more so like you have bacteria, you have bacteria in your gut.

• 2:28John Coogan?

  Yeah.

• 2:29Jordi Hays?

  And the gut is kind of an important part of the body.

• 2:32John Coogan?

  Now that bacteria is gonna be suffering from a novel virus, apparently.

• 2:35Jordi Hays?

  Yeah.

• 2:35John Coogan?

  Well, in a study published Thursday in Science, researchers at Stanford and the ARC Institute trained an AI model to recognize patterns in naturally occurring viral DNA, then used it to generate genetic sequences for brand new viruses. After synthesizing those DNA sequences and inserting them into bacteria, the team found the bacteria produced viable viruses capable of infecting other bacteria. The work does not create a new threat to humans. Be careful. I'm sure that will get cut out of a lot of messaging around this because it sounds really scary on its face. The AI was trained only on bacteriophages, viruses that infect bacteria, and specifically excluded viruses that infect humans, plants, animals, and fungi.

• 3:19John Coogan?

  As a result, the model cannot generate viruses capable of infecting people. While scientists have been synthesizing viral genomes for years to study diseases and develop vaccines, this is the first time AI has been used to design entirely new viruses that function in the real world. And I was going back and forth before the show on, is this anything special? You know, we've been using tools to make viruses for bacteria for a long time. This is just another tool to do it? Or is this some, you know, material breakthrough? That's sort of a debate point. It sounds really scary, but also like you've been able to design these viruses in a lab for a long time. So what is the material difference here? I think it all comes back to acceleration and cost. If all of a sudden it becomes a thousand times cheaper to generate viruses, then that

• 4:01John Coogan?

  could reshape biotech in a positive way, but also have biosecurity implications.

• 4:06Jordi Hays?

  Yeah, I think a lot of the reaction is just that it feels like a little too soon post Wuhan, a little too soon post hugging face. There's been a variety of events that I think naturally make people a little apprehensive when you see a headline like this.

• 4:21John Coogan?

  Yeah, a lot of people are like, you know, the LEAs or Yudkowsky reaction of ah, like this is bad. But we'll see where it goes. If the approach proves effective across other classes of viruses, it could become a powerful tool for medicine and biotechnology. Viruses are already widely used as delivery vehicles for gene therapies and other medical treatments. And AI-designed viruses could eventually expand that toolkit. At the same time, the research highlights how advanced, how advances in AI are making it increasingly important to build safeguards alongside new capabilities, which I'm sure the ARC Institute is working on. And there's also other, other AI-driven neo-scientific labs. I mean, Jeff Dean's, one of those was advancing, one of the goals of his new company is to

• 5:04John Coogan?

  work on biotech broadly. He has a very broad remit, but there are more narrow projects like that new company that's focused on finding a cure for the common cold. There are a few other projects that are more narrowly targeted, as well as all the biotech companies that are working on stuff. If we're going to get advances in viruses that deliver gene therapies or medical treatments, we gotta rebrand virus. We gotta come up with a new word, just like GLP-1 peptide. That felt very safe. It was like, you're not doing steroids. You're not on gear.

• 5:36Jordi Hays?

  What's the lizard?

• 5:37John Coogan?

  You're doing a peptide.

• 5:38Jordi Hays?

  You're not doing Gila monster venom?

• 5:40John Coogan?

  Gila monster venom, exactly, exactly.

• 5:42Jordi Hays?

  You're not doing Gila monster venom?

• 5:43John Coogan?

  No.

• 5:44Jordi Hays?

  Some Chinese peptide.

• 5:46John Coogan?

  The Chinese peptide was a rough go, but in general, I think the fact that it was like just a peptide, it felt much more welcoming as opposed to being in the world of the steroids, the performance enhancing drugs. And it became easier for people to jump in, oh, I gotta learn about peptides. Oh, there, oh, there's naturally occurring peptides? Cool, I'm into that. But virus has such a bad connotation post Wuhan as well as just everything. You're never like, I got a virus and someone says, a good one or a bad one? Like, it's always bad.

• 6:14Jordi Hays?

  Yeah.

• 6:15John Coogan?

  It's never good. But so they need, they need a new brand for that, if they're going to commercialize that for sure. But we'll see. Anyway, there's a whole article in the New York Times about it. This AI just created viruses not found in nature. The new study published Thursday in Science goes well beyond duplicating viral genes. Scientists at Stanford University and ARC Institute taught AI to recognize patterns in, of DNA in nature and then use that DNA to write recipes for entirely new viruses. The viruses dreamed up by AI do not pose a threat to humans because they are all similar to a naturally occurring virus called Phi X174, which can only infect bacteria. Really hardcore name for something that's not that dangerous.

• 7:00John Coogan?

  Phi X174 sounds like a offspring of Elon Musk. Governments and scientific organizations have been slow to develop guardrails that could block the creation of a deadly virus, even as the science races ahead. So I don't think they'll be open sourcing this anytime soon. But there is other news. Mark Gurman's been reporting on OpenAI's first consumer device. It'll reportedly look like a hockey puck sized donut. Mark Gurman, the Germinator?

• 7:22Jordi Hays?

  Oh, the Germinator, cool.

• 7:23John Coogan?

  The Germinator, yeah. OpenAI's first consumer device will reportedly look like a hockey puck sized donut and cost roughly $300 to $400. What a funny form factor.

• 7:34Jordi Hays?

  Love hockey pucks.

• 7:35John Coogan?

  Yeah.

• 7:36Jordi Hays?

  Love donuts.

• 7:37John Coogan?

  Okay.

• 7:37Jordi Hays?

  And so I like where this is going.

• 7:39John Coogan?

  There's also a rumor that it has mechanical pieces on it. So I think it can like undulate potentially. The speculation's all over the place. According to Bloomberg's Mark Gurman, the Germinator, as you put it, the battery-powered device is essentially a portable smart speaker without a screen, designed to be carried around the house or placed on a nightstand or kitchen counter. It will include speakers and microphones, along with cameras and other sensors that allow its AI to perceive what's happening around it. The device is intended to work much more, like a much more capable version of ChatGPT's current voice mode, learning about its owner over time and using that context to make conversations more personalized. OpenAI is also making the hardware itself feel more expressive. The device will reportedly include lights and parts that physically move as it responds

• 8:23John Coogan?

  with the goal of making it feel more alive than existing stationary smart speakers from Amazon and Google. The product being developed by Johnny Ob's design team is expected to arrive in 2027.

• 8:33Jordi Hays?

  Feature request.

• 8:34John Coogan?

  And envisioned as the first in a broader family of OpenAI hardware. Long-term, the company reportedly hopes to develop AI devices capable of taking over some of the functions now handled by smartphones.

• 8:45Jordi Hays?

  Feature request.

• 8:46John Coogan?

  Yes. Flashbang. That'd be a good feature request.

• 8:51Jordi Hays?

  Yeah, it says it has lights, it's got sound. You should be able to use this as a on-the-go flashbang.

• 8:57John Coogan?

  Yeah.

• 8:58Jordi Hays?

  So you're going to hang out with some friends.

• 9:00John Coogan?

  Yeah.

• 9:00Jordi Hays?

  You want to prank them a little bit.

• 9:01John Coogan?

  Yeah.

• 9:02Jordi Hays?

  When you're, when you're kind of coming in.

• 9:03John Coogan?

  Yeah, I, I do, I, I was reflecting on the, the DeepMind story of, you know, the departures there and the question of, you know, how the models are progressing versus the commercialization of those models. There's some real strong points, there's some weaker points within the, within the rollout of Google's AI strategy. And I was, I was thinking about like, what happened to Notebook LM? Because that was heralded as a very magical technology. You would, you know, give it some sources, a particular report, and it would just generate a podcast talking between two different people, much more conversational. And a lot of people like consuming information that way.

• 9:44John Coogan?

  So you could just go read a deep research report on the history of, you know, how bacteriophages work, if you want to get up to speed on that, because you're going to, you're trying to understand what's, what the ARC Institute is working on with these new viruses. You could go to Notebook LM and say, hey, why don't you generate me a podcast of, you know, two scientists explaining this at, you know, a high school level and then take it into college level?

• 10:11Jordi Hays?

  Tyler in the YouTube chat says, not love Notebook LM, use it weekly.

• 10:15John Coogan?

  Use it weekly.

• 10:16Jordi Hays?

  I always thought that I would have used it when I was in college.

• 10:18John Coogan?

  Yeah.

• 10:19Jordi Hays?

  And I needed to, let's say, write a paper on something and I wasn't super prepared. I could say, generate me an hour-long podcast about this set of topics and I'd listen to that and then I could probably rip the paper.

• 10:33John Coogan?

  Yeah.

• 10:34Speaker 02

  I, I did that for a history exam.

• 10:35John Coogan?

  Wow.

• 10:36Speaker 02

  It was like a vocab list and it went through.

• 10:38John Coogan?

  Okay.

• 10:39Speaker 02

  Yeah, middle-aged history, I think.

• 10:40John Coogan?

  Wait, oh, you used Notebook LM?

• 10:42Speaker 02

  Yeah, it generated podcasts. So I basically fed in a vocab list of like dates and various things. Then I had it.

• 10:48John Coogan?

  Wait, and was it just a general podcast?

• 10:52Speaker 02

  It was really easy. I think I probably aced it.

• 10:54John Coogan?

  Wow. There we go.

• 11:00John Coogan?

  He needs a better confidence monitor. I'm a big fan of that new trend that's like asking old people like, how did you write a five paragraph essay without AI? And then the answer is like, buddy, we wrote a five paragraph essay without even reading the book.

• 11:17John Coogan?

  You just go to Spark Notes or something. But I was, I was interested in, in the evolution of Notebook LM because it's this like, there's this collapsing of capabilities where Sam Altman was recently sort of dragged a little bit for saying like, he would use ChatGPT work to generate a podcast about what's going on on his calendar and the family life and stuff. And people were like, how about you just talk to your kids? But the, the more interesting technical point on that is that, do you even need ChatGPT work to generate you that podcast? Or will the voice mode and the memory feature have enough context to just sit there and talk to you like it's a podcast on the fly?

• 11:57Jordi Hays?

  Like live voice?

• 11:58John Coogan?

  Yeah.

• 11:59Jordi Hays?

  If you're trying to learn about a topic, for example?

• 12:01John Coogan?

  Pretty good.

• 12:01Jordi Hays?

  Is probably better than just generating a podcast because a podcast assumes like some certain understanding.

• 12:08John Coogan?

  Yeah, and it's rigid.

• 12:09Jordi Hays?

  Maybe, maybe it thinks you understand too much or too little. Whereas voice, you can be like, go down this like.

• 12:14John Coogan?

  Exactly, exactly. It's a choose your own adventure. It's a, it's an expert call. It's a, instead of Notebook LM, it's TIGAS LM, basically. I mean, you're talking to an expert and you can just guide the conversation wherever you go. So, uh, will be interesting to see where this goes, what the reception is like. Uh, I mean, huge, huge delta divergence between like the, the social media pushback for ChatGPT versus like the App Store ratings. Like, there's like a billion people using it. A lot of people just like the product. And then there'll be like someone dunking on it to the tune of a million likes on Instagram. And so what, how do you measure those two things? When it comes to an actual consumer product, if it's delivering something good?

• 12:58John Coogan?

  If people are like, if the, if the stated preference is like, I don't like AI, but the revealed preference is like, it's kind of nice to have this thing around the house. It's kind of useful. Um, interesting to see where it goes. The launch of this device will be, uh, very, very interesting to see like how things come together. Like you can see the ChatGPT work, ChatGPT Codex, ChatGPT like coming together into one product. But there's a world where this product launches with voice mode and it's not really capable of linking to a cloud Codex instance and writing new software and doing the more advanced things that are required just to accomplish some tasks. Like you can go to ChatGPT and ask it to pull down an image from the internet, restyle it, change it.

• 13:43John Coogan?

  But you can't really tell it to do like 40 of those. Or like every day forever, do a whole host, a whole workflow. But you can in Codex and you can talk to Codex, but it has to be running on a computer. And, and, and I would hope that by the time this launches, there's full, like full context. Like I, I was doing some work in Codex and I had the output and then I wanted to like, generate an image based on that and take it on the go. But I wanted to be able to close my laptop and not, and still be able to access it. So I had to like copy the context window into ChatGPT, just the normal app. So then I could like access that information and continue to transform it. Uh, and that was something that is like a very, very temporary thing that feels like it's going to be fixed in like a couple of weeks.

• 14:26John Coogan?

  But there's a whole bunch of these little minor integration issues that probably need to be fulfilled before this product launches and delivers like the full, the full capability of what you can do. Because so many things, so many tasks, instead of just knowledge retrieval, uh, require actually firing up a browser, scraping it, writing some code, downloading things, you know, setting up an actual, uh, service and, and workflow as opposed to just something that can be done within the context window of a single LM interaction. Last top story. A New Mexico judge has ordered Meta to pay more than $900 million and impose new restrictions on how minors in the state use Facebook and Instagram.

• 15:09John Coogan?

  This is a continuation of the social media addiction. If you're watching this clip on Instagram, let us know in the comments. Are you addicted to TVPN reels on Instagram?

• 15:20John Coogan?

  It's not our fault. Apparently it's, apparently it's Facebook's fault. If we, if we got you hooked on this stuff. The ruling requires Meta to establish a $567 million fund aimed at addressing harms linked to its platforms on top of a $375 million in civil penalties previously awarded by a jury. So they're up 900 million. They're very close to a billion dollars and the numbers are going to get bigger from here.

• 15:45Jordi Hays?

  Yeah.

• 15:46John Coogan?

  At least, at least they're going to try.

• 15:48Jordi Hays?

  Okay, so last time we really covered something from this ongoing saga. There was a verdict on March 25th. A Los Angeles jury found Meta and Google slash YouTube negligent for designing platforms harmful to young people. A woman who said she became addicted to social media as a child was awarded $6 million, 4.2 million against Meta and 1.8 million against Google. And, and again, at the time, we had this lawyer on, he was giving his opinion. He was like, this is just the start.

• 16:17John Coogan?

  Yeah.

• 16:17Jordi Hays?

  We were like.

• 16:18John Coogan?

  I was like, no way.

• 16:18Jordi Hays?

  The jury has a, has, has a verdict.

• 16:21John Coogan?

  Yeah.

• 16:22Jordi Hays?

  To say, you know, talking to the biggest companies in the world, you must pay $6 million.

• 16:27John Coogan?

  Yeah, it was nothing.

• 16:28Jordi Hays?

  Like this tiny amount, but it was to one person, right? And so you can imagine as these cases evolve, um, this, this new one is in New Mexico.

• 16:35John Coogan?

  And New Mexico is not the biggest state in the union. It's not the biggest.

• 16:38Jordi Hays?

  But there was also one in, uh, in May 2026. So just a couple of months ago for nine million, uh, to a school district in Kentucky.

• 16:46John Coogan?

  Yeah.

• 16:47Jordi Hays?

  Same sort of issue. Uh, the lawsuit accused Instagram of deliberately using addictive features that contributed to anxiety, depression, self-harm and other problems among students, forcing schools to spend more on mental health services. The district had sought more than 60 million. And I guess the total payout was 27 million because it was split between YouTube and TikTok and Snap.

• 17:10John Coogan?

  Yep.

• 17:10Jordi Hays?

  Um, and in that case, there was no admission of liability and no required product changes. So I think it's time to start thinking about what the, the sort of battle that social media has ahead of it. Kind of in, in cigarette terms. Tell us about.

• 17:24John Coogan?

  Tobacco master settlement agreement?

• 17:26Jordi Hays?

  Yeah, exactly.

• 17:27John Coogan?

  So the, the tobacco companies wound up getting sued individually initially. And there was, there were a whole bunch of court hearings, very similar to the Senator, we sell ads moment. Um, uh, but, uh, more focused on the cancer causing nature of cigarettes. And the question was like, who is ultimately being harmed economically? And you would think it's obvious. Uh, the person that saw an ad that made smoking look cool, they picked up a pack of cigarettes. They started smoking and then they got cancer and their life was cut short. They are the victim. They should be paid by the tobacco company. That's what would be very logical. Uh, that's not what happened.

• 18:11John Coogan?

  In fact, the tobacco master settlement agreement, uh, landed in 1998. And it was agreement between all of the major tobacco companies. There's more nuance to this. One of them broke loose and like testified against the others. It's a crazy story, but that's for another time. Uh, in 46 states.

• 18:27Jordi Hays?

  I'm the good cigarette company.

• 18:29John Coogan?

  Basically, yeah. And so they don't have to pay. They're not part of the settlement, so they don't have to pay because they basically snitched on all the others. It's crazy.

• 18:37Jordi Hays?

  Are they still in business?

• 18:38John Coogan?

  Oh, yeah.

• 18:38Jordi Hays?

  Cigarette company?

• 18:39John Coogan?

  They're doing great.

• 18:40Jordi Hays?

  Who are they?

• 18:40John Coogan?

  Look at Victor.

• 18:41Jordi Hays?

  I've never heard of it.

• 18:42John Coogan?

  Yeah.

• 18:43Jordi Hays?

  Uh, last name Victor?

• 18:45John Coogan?

  Yeah, they were literally the.

• 18:45Jordi Hays?

  They won.

• 18:46John Coogan?

  They won, yeah. There's more nuance to it than that, but, uh, but that's like one way to tell a story. Anyway, uh, so a bunch of the big tobacco companies versus, uh, 46 of the United, of the US states, the District of Columbia and several territories. The states agreed to end major lawsuits against the tobacco companies. So the same thing was happening where all the different states were suing. And they were suing because the negative externality of cigarettes causing cancer was driving up medical bills in the states. So the states have healthcare and they assume, hey, okay, we're going to spend this much on doctors, this much on radiology, this much on X-ray equipment. And then all of a sudden they're starting to look at their populations and saying like, wait, everyone's getting lung cancer? We're not equipped to deal with lung cancer.

• 19:29John Coogan?

  We need to hire way more oncologists and cancer doctors who specialize in lung cancer. We need equipment. We need drugs that treat lung cancer. There's a whole bunch of other things that we have to spend money on. And so you got to pay us because you, the tobacco company, are responsible for us running out of money for our healthcare system. And so that was the nature of these, like the battles between the states and the big tobacco companies. You would think it would be the individuals who got the cancer. That would be very logical, but that's not actually the structure of this deal. And so in return, uh, all the states said, hey, we'll drop all those lawsuits. You won't have to, we won't be nickel and, nickel and diming you across every single state. Instead.

• 20:09John Coogan?

  The companies will make large payments and follow new limits on advertising and business practices. So the end result, the headline number is 206 billion, which feels like small relative to today's standards of like hyperscalers in social media. Facebook generates roughly 200 billion in revenue every year, although if they got hit with a $200 billion fine, that would be existential. But what happened with the master settlement agreement with tobacco companies was that there wasn't just one fixed payment. Instead, it created a system of annual payments that continue indefinitely. They will actually have to pay forever as long as they are in business. They have like effectively a special tax paid to them.

• 20:50John Coogan?

  And the amount changes based on cigarette sales, inflation, market share, and other adjustments. So if cigarette sales fall, the total payments usually fall. And that's a big reason why there's like a shift to non-cigarette products.

• 21:05Jordi Hays?

  Well, and that just naturally makes sense. If less people are buying cigarettes, less people are going to have health issues.

• 21:11John Coogan?

  Exactly.

• 21:12Jordi Hays?

  Yeah. So I brought it up because I think that we could be heading in that direction with social media.

• 21:17John Coogan?

  There's also a fascinating dynamic because these states now have an indefinite revenue stream that will be paid to them. And you can model that out financially and you can financialize it, and a lot of people have. And so, investment firms and banks and financial institutions have come in and said, okay, you are the state of New Mexico, for example, and you are expected to get 300 million from big tobacco this year. And then next year, we think it'll be 297, and then 298, and then it'll go down. And we can model that out. And we can just give you $4 billion right now in exchange for that revenue stream or a piece of that revenue stream. And then those states can take that

• 21:59John Coogan?

  lump sum of cash and build a new bridge or something like that, whatever they need to do. So there's been a lot of financialization on top of it. Each tobacco company pays a share of the total amount. Its share depends mainly on the share of cigarette sales among companies that participate in the MSA. The settlement then divides the money among states using fixed allocation percentages. Some states later borrowed against these future payments by issuing bonds backed by MSA revenue. The MSA also limits tobacco advertising and marketing, especially marketing that could reach children in simple terms. The agreement created a permanent system. Major tobacco companies receive protection. For many state lawsuits, while states receive continuing payments and new enforcement powers, the result is not just a legal settlement, it created this long-term financial and

• 22:42John Coogan?

  regulatory structure built around cigarette sales. And it's now the 10-year anniversary of Starting Lucy, 2016. August 8th, technically, was the day. New regulation.

• 22:52Jordi Hays?

  You know what I'm gonna hit?

• 22:54John Coogan?

  Overnight success. Yeah, for sure.

• 22:56Jordi Hays?

  The exact opposite, slaving away for years in obscurity.

• 23:00John Coogan?

  But very, very interesting, very, very interesting industry to have operated in for as long as we have.

• 23:07Jordi Hays?

  Semi Analysis chimed in on the DeepMind news. Not just chimed in.

• 23:14John Coogan?

  I think the term's posterized.

• 23:16Jordi Hays?

  Grave digging?

• 23:16John Coogan?

  No, not grave dancing.

• 23:18Jordi Hays?

  No, they're

• 23:19John Coogan?

  Grave digging? They're digging the grave?

• 23:21Jordi Hays?

  Yeah.

• 23:22John Coogan?

  Putting DeepMind in it? And then they're dancing on it at the end?

• 23:25Jordi Hays?

  Anyway, Semi Analysis says, "For all intents and purposes, we believe DeepMind is no longer a frontier lab due to large numbers of departures from their RL teams and poor compute allocation. Google will continue meandering on and releasing models, but their odds of ever reaching state-of-the-art again have dropped to zero."

• 23:43John Coogan?

  Whoa.

• 23:44Jordi Hays?

  Damn it. "Google is now simply unable to retain top AI talent." Again, this is what I was saying the day that the news broke. It's like, researchers want to work with great researchers, right? And so, the more talent density you have, the easier it is to recruit. Yeah, Noam leaving earlier was like a canary in the coal mine. Obviously, these are not the actions of people excited about Gemini 4 Pro. Jeff, Sanjay, Quokk, and Oriol are just the latest in a long string of high-profile departures from DeepMind. Jeff Dean is the undisputed GOAT of Google Engineering, co-founded Google Brain, and started the TPU program. Google, on the other hand, decided it was totally worth it to sell

• 24:26Jordi Hays?

  enormous amounts of compute to Gemini's fiercest competitors on long-term contracts without any hope of ever returning it to DeepMind. More than 20% of total TPU shipments from third quarter '26 to fourth quarter '27 are being sold directly to Anthropic.

• 24:42John Coogan?

  Wow.

• 24:43Jordi Hays?

  The issue with Google was not Jeff Dean nor Noam Shazer, but rather their extremely bureaucratic, painfully slow, and strategically timid culture. Google will join the ranks of other legendary tech giants like IBM and Intel to give up on the harder thing

• 24:56John Coogan?

  So aggressive. Wow.

• 24:57Jordi Hays?

  and do the thing that will make you more money. It becomes demoralizing as many of the great technology leads have left. And take him, taking a victory lap. He wrote a piece on July 21st, "Google is a secular short," kind of getting at a lot of these issues, so.

• 25:15John Coogan?

  Brutal, brutal stuff. This is insane. On the other side, GCP is working. GCP is basically a money-printing machine. No wonder Google executives are choosing GCP over Gemini. So although EBIT margins for these system sales are slightly lower than core cloud margins in the low 30% range, we still expect total GCP to deliver mid-to-high 30s EBIT margins going forward. How investors decide to capitalize the current TPU backlog in any large future sales is an open question. However, given the strong compute demand from the labs, we expect more multi-gigawatt deals to be announced soon, adding to this backlog. In all, we estimate that over $250 billion additional TPU bookings could be added to GCP RPO in the next coming quarters from Semi Analysis. Very interesting. I mean,

• 26:00John Coogan?

  there is like a positive spin on this, which is like, they seem to be really good at chip development, really good at cloud, like focus where it's working. And you don't have any tensions there because you have excellent teams, and then you have the ability to underwrite that build-out with the cash machine that is Google Search and YouTube and their ads products. And having more of this like barbell approach as opposed to playing in like the middle race is maybe ultimately the right thing to do. There are plenty of hyperscalers that have lived that and are doing very well on the back of it. Like Microsoft, Amazon, for example, they've been partners to labs at various points and are very good at building

• 26:42John Coogan?

  data centers, very good at scaling, and have not tried to really go on a crazy poaching race and amass the dream team. And, you know, they've been rewarded for it.

• 26:55Jordi Hays?

  Yeah. Still, wild series of events. They obviously had effectively a version of ChatGPT internally. They didn't ship it. Tebow, who's now running Chat Codex, was there working on that product, which is really wild.

• 27:09Speaker 02

  It just seems like Google leadership has a very different idea of like where value accrues in AI than like Demis or like the other labs, right? It's like, it's not actually like the model itself.

• 27:18John Coogan?

  Yeah.

• 27:19Speaker 02

  It's the like infrastructure, GPUs, cloud business.

• 27:23John Coogan?

  It's interesting because you can run back the old Demis quote about like, he went, when he was selling DeepMind, he talked to Mark Zuckerberg and is like, what are you excited about in the future? Are you excited about AI? And Mark Zuckerberg, apparently, according to this exchange that Sebastian Malaby reported on, Mark Zuckerberg says, "Oh yeah, I'm super excited about AI." And then Demis is like, "I'm gonna test this guy. I'm gonna see if he's a true believer. What do you think about VR?" And Zuck's like, "Oh, VR is like equivalently as big." And then Demis is like, "No."

• 27:48Jordi Hays?

  I don't think he even said that. He was just equivalently as excited.

• 27:51John Coogan?

  Yeah, yeah, excited. And he was excited about a few other things. And Demis was like, "I want to be with someone who's like all-in on AI as a fundamentally different technology, not a normal technology, not like VR, not like new devices, not like electric cars, not like, you know, satellites in space. It needs to be considered as a completely separate development, a completely separate technology."

• 28:14Speaker 02

  Yeah, like, I don't know if Sundar like believes in RSI. It seems like he doesn't think that that's like really gonna

• 28:19John Coogan?

  So the point is that Demis should have probed more and said like, "Well, how excited are you about cloud? How excited are you about AI overviews?" And if Sundar, it wasn't Sundar back then, but if Google was like, "Oh yeah, we're equivalently excited about cloud infrastructure as ASI," then that should have been Demis's moment to be like, "Ah, maybe I shouldn't."

• 28:45Jordi Hays?

  The only thing, the only thing is there's a world where he's actually so RSI-pilled that he's thinking, "Okay, it's over for us. I need to back up the Brink's truck and help Anthropic," right? And putting together this like, you know, almost a quarter of a trillion-dollar financing package.

• 28:59John Coogan?

  Yeah.

• 29:00Jordi Hays?

  And a variety of data center guarantees to enable Anthropic to scale up, even though they don't have, you know, really access to the debt markets in the way that Google does. Google's ownership in Anthropic is capped at 15%. They, I believe, have roughly 14%.

• 29:19John Coogan?

  Weird. Why, how is it capped?

• 29:20Jordi Hays?

  I think Anthropic just didn't

• 29:22John Coogan?

  Oh, we don't want you to have

• 29:23Jordi Hays?

  They don't have any voting rights. They don't even, they're not even a board observer. They don't have a board seat. They basically are just a purely financial background.

• 29:31John Coogan?

  A branding mogul's Miami Beach home lists for $68.5 million. Branding mogul Nick Woodhouse was sailing around Miami for his birthday in 2019 when he realized he'd found his new home. Turning to his wife, Joseline Woodhouse, the Canadian-born businessman said, "We have to live here." It wasn't long after relocating from New York in 2020 that the couple, then living in a condo on Sunny Isles Beach, Florida, saw a waterfront lot on a guard-gated La Gorge Island. Is that how you pronounce it? La Gorge? I don't know. Island in Miami Beach from a friend's boat. The property had the foundation of a house

• 30:13John Coogan?

  that was just starting to be built. The Woodhouses purchased the partially-built home for $17 million in 2021 and completed construction of the roughly 8,800-square-foot, seven-bedroom contemporary house around 2023. It's a 0.4-acre estate, and they're selling it for $68.5 because they're building another home nearby. Nick is the former president and chief marketing officer of Authentic Brands Group, and that's why I wanted to talk about this, because Authentic Brands is a very fascinating company. Tyler, you have something here?

• 30:42Speaker 02

  Yeah, so it's pronounced "Legors."

• 30:44John Coogan?

  Legors.

• 30:45Jordi Hays?

  Thank you.

• 30:46John Coogan?

  Legors. Well, Authentic Brands Group is a very interesting lifestyle platform, I guess. I don't know exactly what you would call it, but

• 30:55Jordi Hays?

  They have some truly tier-one assets.

• 30:58John Coogan?

  They own more than 50 consumer brands, as well as likenesses and estates of celebrities, including Muhammad Ali, Elvis Presley, and Marilyn Monroe. But what stuck

• 31:08Jordi Hays?

  Let's start at the top, cream of the crop. They own Tapout.

• 31:13John Coogan?

  They do.

• 31:13Jordi Hays?

  Iconic brand.

• 31:14John Coogan?

  Tapout tees.

• 31:15Jordi Hays?

  And if you guys ever run into John on the weekends, he's almost certainly head-to-toe Tapout.

• 31:21John Coogan?

  It was one of their first purchases, Silverstar and Tapout. In January 2011, they acquired the rights to the likeness of Marilyn Monroe. So if you see Marilyn Monroe on a T-shirt, Authentic Brands is getting a chat.

• 31:34Jordi Hays?

  They own Ruka, the surf brand. They own Neiman Marcus. They own Prince. They own

• 31:39John Coogan?

  They own Brooks Brothers.

• 31:40Jordi Hays?

  Goodman. They own DC Shoes.

• 31:42John Coogan?

  Yeah.

• 31:43Jordi Hays?

  Tyler, I know, I know you're still, you're pretty much head-to-toe Volcom at all time. Volcom, maybe some Billabong thrown in there. Well, they also own Billabong.

• 31:51John Coogan?

  Anyway, Nick is the former president and chief marketing officer of Authentic Brands Group, a licensing and managing company that works with companies such as Reebok, Champion, and Brooks Brothers.

• 31:59Jordi Hays?

  TZH says, "ABG is a graveyard for iconic brands."

• 32:04John Coogan?

  It's the bending spoons of brands.

• 32:06Jordi Hays?

  No, it really is. I mean, it's somewhat sad because a lot of these brands are so, so iconic, and with the right sort of management and investment, they would be back to their former glory. A lot of the surf brands and the skate brands are a little sentimental for me, just because I grew up watching so much of the content that those brands put out and following the different athletes on their teams. Those industries have just been impacted surfing most aggressively, just because kids that don't live by the ocean now, they don't really care about surfing.

• 32:40John Coogan?

  Yeah.

• 32:41Jordi Hays?

  They care about Chrome Hearts. And so

• 32:44John Coogan?

  Do you think the surfing industry needs a federal backstop?

• 32:46Jordi Hays?

  I would push for one, certainly.

• 32:48John Coogan?

  Yeah.

• 32:48Jordi Hays?

  Yeah.

• 32:49John Coogan?

  Couple billion dollars from the Treasury directly to get Volcom.

• 32:53Jordi Hays?

  Quicksilver, Billabong.

• 32:54John Coogan?

  Quicksilver back to the top.

• 32:56Jordi Hays?

  Roxy. We're on to something here. This is our new platform.

• 32:59John Coogan?

  I think so. Okay.

• 33:00Jordi Hays?

  We'll be back in the UltraDome. We're gonna have a lot of coverage this weekend, too, around, you may have been seeing some of our Getty images.

• 33:07John Coogan?

  Yeah.

• 33:08Jordi Hays?

  You might be seeing some more.

• 33:09John Coogan?

  Yeah, we're working on it.

• 33:10Jordi Hays?

  We'll see.

• 33:11John Coogan?

  But have a great weekend.

• 33:12Jordi Hays?

  We'll see you Monday.

• 33:13John Coogan?

  See you Monday. Leave us five stars on Apple Podcasts and Spotify. Sign up for our newsletter, tbba.com. Goodbye.