Slow Ventures' Creators Fund and Helion Energy's Fusion Reactors | 2084

This Week in Startups is brought to you by… Vanta. Get $1000 off your SOC 2 athttps://www.vanta.com/twist Northwest Registered Agent. Form your entire business identity in just 10 clicks and 10 minutes. Get more privacy, more options, and more done—visitnorthwestregisteredagent.com/twist today! LinkedIn Ads. Get a $100 LinkedIn ad credit athttp://www.linkedin.com/thisweekinstartups Today's show: Jason and Alex cover…TBD Timestamps: (0:00) Episode Teaser(1:16) Welcome Alex Wilhelm & Sam Lessin; Slow Ventures Creator Fund(3:49) Significance of the $60M creator-focused fund(5:47) Community-building and product development strategy(7:02) Mr. Beast's success as a case study(9:41) Vanta. Get $1000 off your SOC 2 athttps://www.vanta.com/twist(11:17) Financial structures and strategies in creator investments(14:14) Addressing challenges in creator-focused investing(19:46) Northwest Registered Agent. Form your entire business identity in just 10 clicks and 10 minutes. Get more privacy, more options, and more done—visitnorthwestregisteredagent.com/twist today!(22:24) Startups optimizing operations in challenging climates(24:50) Transition to fusion energy and Helion's technology(27:46) Helion's fusion technology and CEO David Kirtley(29:16) Commercial fusion power timeline(29:43) LinkedIn Ads. Get a $100 LinkedIn ad credit athttp://www.linkedin.com/thisweekinstartups(32:12) Fusion energy's market potential and agreements(33:39) Comparing fusion to other energy sources(36:10) Safety and environmental considerations for fusion(43:00) Helion's upcoming milestones and team expansion(44:00) Lon Harris on AI, copyright, and fair use(47:00) Exploring fair use and IP infringement in AI(53:00) Market impact and licensing for AI technologies(56:00) Financial implications for AI and copyright(58:00) Distinguishing personal vs. commercial use of copyrighted material Subscribe to the TWiST500 newsletter:https://ticker.thisweekinstartups.com Check out the TWIST500:https://www.twist500.com Subscribe to This Week in Startups on Apple:https://rb.gy/v19fcp Follow Sam Lessin: X:https://x.com/lessin LinkedIn:https://www.linkedin.com/in/wlessin/ Follow Helion: X:https://x.com/Helion_Energy LinkedIn:https://www.linkedin.com/company/helion-energy/ Follow David Kirtley: X:https://x.com/dekirtley LinkedIn:https://www.linkedin.com/in/david-kirtley-490b8230/ Follow Alex: X:https://x.com/alex LinkedIn:⁠https://www.linkedin.com/in/alexwilhelm Follow Lon: X:https://x.com/Lons LinkedIn:https://www.linkedin.com/in/lonharris/ Follow Jason: X:https://twitter.com/Jason LinkedIn:https://www.linkedin.com/in/jasoncalacanis Thank you to our partners: (9:41) Vanta. Get $1000 off your SOC 2 athttps://www.vanta.com/twist(19:46) Northwest Registered Agent. Form your entire business identity in just 10 clicks and 10 minutes. Get more privacy, more options, and more done—visitnorthwestregisteredagent.com/twist today!(29:43) LinkedIn Ads. Get a $100 LinkedIn ad credit athttp://www.linkedin.com/thisweekinstartups Great TWIST interviews:Will Guidara,Eoghan McCabe,Steve Huffman,Brian Chesky,Bob Moesta,Aaron Levie,Sophia Amoruso,Reid Hoffman,Frank Slootman,Billy McFarland Check out Jason's suite of newsletters:https://substack.com/@calacanis Follow TWiST: Twitter:https://twitter.com/TWiStartups YouTube:https://www.youtube.com/thisweekin Instagram:https://www.instagram.com/thisweekinstartups TikTok:https://www.tiktok.com/@thisweekinstartups Substack:https://twistartups.substack.com Subscribe to the Founder University Podcast:https://www.youtube.com/@founderuniversity1916

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

• 0:00Jason Calacanis?

  How do you get Microsoft on board? Because this is a paid partnership. They're giving you money. This isn't like a letter of intent. My understanding is they wrote a check. They put a deposit down. Am I correct?

• 0:12Speaker 01

  So no, this is a power purchase agreement is that they pay as the electrons come off the grid.

• 0:17Jason Calacanis?

  Okay.

• 0:18Speaker 01

  But if we can't meet those timelines, we pay them. And so there's penalties.

• 0:22Speaker 02

  You have a dagger over your head dangling. I love it. That's gonna, your sleep score is gonna suck.

• 0:27Speaker 01

  Yeah, there's, there it is.

• 0:29Jason Calacanis?

  Yeah, sleep score is gonna go, sleep score is gonna be variable.

• 0:33Speaker 01

  Point nine one.

• 0:35Speaker 03

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• 1:16Jason Calacanis?

  All right, everybody. Welcome back to this week in startups. I am the host of this show for, gosh, over 14 years. This is one of the first five podcasts in the world. Back when the pod in podcasting was the iPod. iPod, for those of you don't know, was a device that played music only. It had no internet connection and they were awesome. With me, my co-host Alex Wilhelm, who 15 years ago was in college, I believe.

• 1:42Speaker 02

  Uh, more or less. I graduated in 12. So yeah, I was.

• 1:46Jason Calacanis?

  Damn, okay. Two years out of school and he's worked at all kinds of places, TechCrunch, Crunchbase. Matter Mark, gosh, so many different gigs. He's got a great newsletter you can subscribe to. Cautional optimism.

• 2:00Jason Calacanis?

  And it does very well. And he's one of my new subscribers now that I have a thousand subscribers on X, X.com slash Jason, he's X.com slash Alex, first name club. We have a crazy docket today. We gotta get right to work.

• 2:12Speaker 02

  Yes.

• 2:13Jason Calacanis?

  I have a lot of strong feelings, a lot about a lot of different things, but I say we save the, um, all the stuff I've been talking about online and we just get to our first guest. Is that a good idea, Alex?

• 2:24Speaker 02

  I, I love it. We have some of the strongest guests we've ever had on the show today. So let's start with the first one. Sam Lessin is on. He's from Slow Ventures. Everyone's probably heard of him who listens to the show, but they have a new effort called the Slow Ventures Creator Fund, Jason. It's $60 million vehicle and we have questions. So let's get Sam brought up. There he is.

• 2:44Jason Calacanis?

  Thanks for having me, guys. Good to see you. Nice to see you, Sam. Now he's been on the program a couple of times. He's got his own great podcast with his wife and my good friend, Dave Moran and Britt. It's called, um, More or Less. It's the more or less. Right, based on your last names. Yeah. And it's great pod, great pod. I get a shout on it once every 20 episodes or so. Absolutely. I get, I get, I get a mention. You should come on sometime. You want to come on sometime? I will absolutely come on. Let's do it. There are, um, I don't, I don't know that it's all in inspired, but it is the all in format for really smart people talking for an hour, chopping up the week's news. But what's interesting about it, Alex, is these are power couples. They are couples who are both in the industry.

• 3:27Jason Calacanis?

  So Jessica Lessin, who's been on the show many times, uh, from the information you know well, Alex. Of course. And then Britt Moran, uh, who did Britten Co. She was kind of like pinned as the Martha Stewart of the, uh, the, or the next gen of Martha Stewart, but she's an investor now. So you got four in, three investors and a journalist walk into a bar. It's a great show. Go check it out. Uh, but you know, I saw your announcement today and you and I have a thesis around creators. Why don't you explain, uh, what your thesis is? Sure. And then why this is so significant, significant, and I think it's very significant, that $60 million in LP money

• 4:07Speaker 04

  Yep.

• 4:07Jason Calacanis?

  has come into this fund. This isn't just a bunch of Hollywood money. It isn't Kevin Hart or Kevin Durant.

• 4:15Speaker 04

  No, in fact, it's mostly none of those guys. It's, believe it or not, I mean, I got permission to say it's people like MIT, Michigan, Rutgers. It's like the real institutions. And some of them actually are even amazingly, some of those real institutions aren't even in our seed fund. They say, we have plenty of seed exposure, we have plenty, we like this strategy. So there's a real change going on here. And look, here, I mean, you know this better than anyone because you've been doing this 14 plus years, right? Which is, there's something, something has happened in the last many years, which is the strategy for building companies and communities has actually inverted in some cases. It used to be, you're two Stanford kids, you start with a product, you build community around that product, but you start with, it's product first and technology first.

• 4:58Speaker 04

  As technology has gotten commodified, not everywhere, but in a lot of places, and as the internet has kind of exploded, we've gotten into these niche cultures from this mass culture, there's this new pattern where you have entrepreneurs coming out and saying, hey, I'm going to build in a vertical I love, trust, I'm going to build community first, right? And I'm actually going to, in fact, if you put it in business terms, have a zero CAC sustainable audience, right? And then I'm going to layer products on top of that, right? In a high LTV segments, in places where they're really valuable. And we think this is a really big deal. This is kind of what happens, this is the natural conclusion that I think some of us have seen for a long time of what it means to have a global internet population and a

• 5:39Speaker 04

  move away from mass culture to places where people are trying to find community and interests that are deeper and more niche and more specific. So this is, it's a natural conclusion. Now, the interesting thing, Jason, as you know, is people have been trying to fund in the VC community, the creator economy for years. This is not an unknown thing. It hasn't worked that well, right? Creator platform financing is meh at best, it sometimes works, it sometimes doesn't. You know, people have tried to finance individual products from creators who have their own problems. So the real innovation that We've been working on now for years is how do you properly seed funds creators in these communities for deep alignment, right, for cheap cost of capital to make it something where we really can back these up and coming obvious build business builders and entrepreneurs

• 6:23Speaker 04

  that have honestly been underfunded to date is the way we look at it.

• 6:26Jason Calacanis?

  So to translate that, Alex, I think customer acquisition cost always the biggest piece of the puzzle when it comes to everything from a game, an app, a consumer packaged good or SaaS. You have some acquisition cost. That's CAC, as you mentioned. And then if you invert, as you're saying, Sam, the building of community first, and you spend a year or two or 10 building a community and you have trust with them, then you can launch a product. And we saw this, I think, the the greatest example of the last decade's been Mr. Beast. Mr. Beast built this phenomenal audience. He builds really interesting videos every week or two.

• 7:08Jason Calacanis?

  And then Feastables, their their their chocolate bar is, I think, makes more money than, and I don't want to speak out of school here because I do, I have overheard some inside information. I believe, taking a guess, might have some inside information. I'm old and can't remember, Alex. But I think that makes more than maybe the the the advertising revenue. And then, of course, he launched a Netflix show.

• 7:30Speaker 04

  Yeah. And Jason, if you don't mind me jumping in on that for a second, and here's here's the interesting thing is, Beast has been incredibly good for people understanding this world because that, oh, my God, this could be way bigger than we realized. And I think that's actually been very helpful, popular for two reasons. One is it's helped LPs, the industry, understand this is not some small thing. It's not just niche business. But also, really importantly, it's gotten creators or people who have started billion communities to dream much bigger, right? Which I think is great. Now, I will say, from a slow ventures perspective, we actually probably would not underwrite a beast right from the early days. We'd probably miss that one. You don't get everyone, right? And the reason is, we think general entertainment is extremely difficult because it's so competitive.

• 8:11Speaker 04

  We're much more interested in people who like, they love lawn care, they love chess. There's like a vertical which is surprising. Big and deep, but not universal. The second is, you know, there's two elements. One is the CAC, which is how cheap is it to acquire? Like, how much trust do you have with how big an audience? The other is, how valuable is the audience? Right? And the problem with Beast, and again, this is with respect for what he's done, is it's such a broad, general audience. There aren't that many products you can sell, we believe, right? That are that high value. And so we're, it's not that we don't believe that there's things to do there. We just think from a venture capital seed perspective, being hyper-focused on niches with very valuable customers, right? And very clear products is the way we're going to run our fund.

• 8:56Speaker 02

  Is that because the more niche you get, the easier it is to have a community that's incredibly aligned with the creative themselves? Versus a more general audience is going to be harder to kind of tie to one person most of the time?

• 9:07Speaker 04

  That's part of it. It's also the business-building opportunities, right? Which is, you know, if you are, for instance, the god of aviation, you know, like for people who are really into flying Cirrus planes, you are their god and you have, you've built that trust over years. You have the community because you were authentic. You actually suggested the right things. You, you've really built that personality. There are so many products to build and such a deep market for that, that you can then be that person. Whereas, again, general entertainment, the Kardashians, where it's not that it doesn't happen. It will happen. It's just very hard to underwrite.

• 9:41Jason Calacanis?

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• 10:26Jason Calacanis?

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• 10:59Speaker 02

  So on the financial side of this, you guys wrote on the new website that you're going to invest between $1 and $3 million for an equity stake of about 10% on average of the creator's cash profits. This, to me, sounds a little bit more like rev share versus traditional venture investing, Sam. So I'm kind of curious, like, if you could kind of bridge that gap for me.

• 11:17Speaker 04

  Yeah, what we care about is the company building. Like, when we're looking for entrepreneurs, like, we're not looking to invest in the cash streams from advertising, et cetera. The number one thing we care about, big picture, is alignment with creators. We learned this from our seed practice. You know, when we do our seed investing in traditional companies, it's usually around 10%. It's usually $1 to $3 million, right? And we don't do board seats. We're looking for entrepreneurs that we can be their first text message. We can be deeply aligned with them. And so the thing with creators is we want them to have the freedom to explore the best business models, period, right? If it happens, it's a highly cash generative business, but it isn't a company. We don't want to get cross swords with them. We don't want to be like, well, don't spend your time on that because that's outside of what we invested in. You promised us X.

• 12:01Speaker 04

  We want to say, like, we're just investing in you. We want you to have business ideas, but let's just be aligned. And so there are lots of, there are some extra nuances in that. Like, we always make sure on cash, for instance, that there's like, we'll say, hey, if you earn over $1 million next year because you're focused on some cash generating business, then pay us, but less, don't worry about it. So there's some nuance. But that's the, that's the emotional and innovation, the direction, which is we just care about alignment holistically.

• 12:27Jason Calacanis?

  I think it's a really interesting model, and I've started to think about it ourselves. About two years ago, I saw this guy on TikTok, Chef. Reactions. And I thought, my Lord, this is hilarious. And it was like the only person I followed on TikTok. And I'll pull up a video of it, or Alex, you can pull up a video of it. And we incubated it. He came to our Founder University, then he came to our accelerator. And I said, listen, let us just give you a small amount of money, talk about business with you and how businesses are formed. And if something comes out of it, great. If something doesn't, here's a video of him, you know, he's getting these, Sam, these brand sponsorship deals. And I think this, what we'll play here, go ahead and play it, Alex, I'll talk over

• 13:09Jason Calacanis?

  it. Healy and Bennett is like the, the number one apron company. Like if you're a chef, this is what you wear. And they recognize him. He goes to French Laundry, because they see he's in Napa, they invite him to come. They make him an entire meal, based on his channel, because they're so enamored with him. And I think the brilliance of what you're doing, Sam, is that you understand endemic advertising, endemic products. What does that mean? In my career, whether with Silicon Valley Reporter in the 90s, Engadget in the 2000s, Autoblog, This Week in Startups are all in. There's an endemic group that loves certain verticals.

• 13:49Jason Calacanis?

  Then you know who the advertisers are. This Healy and Bennett, whatever these aprons are, I wouldn't know that, but he knows that. So there's just a clear path. And he's launching a new product that we're backing. And I think it's going to do great. There's one issue that I've seen come up over and over and over again, which is, well, there's really two. There's the Martha Stewart issue. What happens if you get pinched, and you go to jail, and you have this dependency on one person? What if Mr. Beast, God forbid, got hit by a bus? It's the standard, you know, talent issue. But the second issue that's, I think, the real one, is what's included in the deal, what's not? Mr. Beast had a burger, and there's some sort of lawsuit going on about Mr. Beast Burger. Then there was another person who contacted me to invest in like,

• 14:35Jason Calacanis?

  You know, some projects he was doing. And then, you know, there was this constantly like, are you investing in Mr. Beast? And project three, four and five? Or are you investing in projects two and seven? And projects three and five hit and you just made a mistake? And then where do they spend their attention? And then if they do speaking gigs or books?

• 14:55Speaker 04

  Totally.

• 14:56Jason Calacanis?

  Does that get included? Does not get included. So how have you handled this?

• 14:58Speaker 04

  So a hundred percent, this is the problem. And for what it's worth, we actually use Mr. Beast Burger as an example of what not to do. Right? Because you don't. And the thing that is so different about these creator and community driven businesses is the brand and the, there's a lot of equity and value that's held outside of feastables. Right? It's actually Jimmy, right? It's not. And so it's like, the question is, and I actually think in my experience that by far the place that, this is with venture capital in general, that people get sideways is when they're misaligned. Right? When I've invested in X, but you're doing Y or things like that. And so that's why I go back to this whole thing, which is our approach is extremely holistic. There are obviously things that are outside of the deal. Right? You know, if you say, I don't want to be a creator anymore. I'm going to go work at a law firm.

• 15:43Speaker 04

  That's not in the deal. Either, you know, it's about the creative business, but it's very broad the way we look at it. And that some creators don't like this. They say, well, we want you to invest in X and not Y. And I'm like, I get it. It's just not for us then. We, we look at it holistically and our, the thing we like to say to people is two things. One is the reason we're able to give you unrestricted cash and trust you is because we're fully aligned. I, I can't, I'm not going to tell you what to do. I'm not even getting mad because I actually, I'm, I'm trusting you with the money to do the right things. I think it's the right emotional thing. But the venture capital mindset, what we do as seed investors is we're looking at hundreds of deals to find one. Right? And it's kind of a similar thing for now. Now I do think, and Jason, I'm curious what you think about this. This, you, you have experience here is, look.

• 16:28Speaker 04

  A lot of people will also come and say, look, Sam, we like this idea, but you really need to pair this person with a business person. They're not business people. And I say, I heard this story before in 2003 about tech founders, right? Where you'd find the, you know, the kids who are great engineers and say, well, that's fine. But they're just engineers. We need to find, and I'm like, that's not the way this is going to evolve. The best will rise and figure out the holistic picture, but it will be a minority of people. It's not most.

• 16:55Jason Calacanis?

  When Larry and Sergey were going public and they were going to make a run at it, they said, you know what? To engineer Stanford, let's get Eric Schmidt. He did Novell, he did this. We can put him in charge. There is an adult in the room, you can do it. And it was unnecessary. It was performative. Eric did provide massive value. Then Zuck came and, you know, Peter Thiel was like, you know what? We don't need somebody to tell Zuck what to do, for better or worse. And then he obviously had Sheryl Sandberg as a collaborator who taught him how to scale the ad network. And you were there, I think, for a lot of this, Sam, so you probably have some thoughts on it. But people overindex on the business guy. And I specifically say guy, but it could be gal. Like Sheryl Sandberg was the business gal.

• 17:39Jason Calacanis?

  And then some people, business guy, Eric Schmidt. You can learn business. There are business experts who are verticalized. You cannot learn to have a motivation and a sensibility about content. That is something innate in the creator. And I will include engineers like Zuckerberg in that creator class. I'll include you on in that creator class with SpaceX. You, you, you, there's something about the motivation and the drive. That's the magic. Well, the business people can fill in on the margins.

• 18:11Speaker 04

  Well, I'll give you, Jason, I'll give you a funny one, which is, this is actually, I'm stealing this from someone from, actually from Mark's sister, Ariel Zuckerberg, who's a great investor.

• 18:18Jason Calacanis?

  I've met her, yeah, she's great.

• 18:18Speaker 04

  She's wonderful. So she says, what we're looking for is riz and tiz, right? You gotta have riz, right? Which is like the, you know, this is the, they've got in their community, swagger, charisma, et cetera. And then tiz is autism. Like you need to be a little bit autistic about, about the topic or area you're in, right?

• 18:37Jason Calacanis?

  I've never had a, that's why I'm not a billionaire. I have the riz, but I don't have the autism to focus long enough to be a billionaire.

• 18:44Speaker 04

  I mean, you and I might have that in common, but the point is only that I think we're, we're here to support those types of people. And that's, that's the thing that's special. Um, we do care about people who have demonstrated commercial instincts, right? So you can't, if you're just a creator and you're creating video, that's wonderful. You can build a great business doing that. This content oriented is fine, but you know, the people who really are ambitious, you know, they've shown that they can monetize, they care to, right? That's an important signal, but you know, you do the math on it. Let's pretend you're a successful creator, making a million dollars a year top line on your career, as a, on content. You know, pay your, pay your team, chop that in half for taxes. You're doing fine, but it's not like you have a bunch of investable capital for business building,

• 19:26Speaker 04

  which means that you're much more likely to take the sponsorship deal rather than say, no, no, I can make a better product myself, right? And what we want to do is enable those seed creators to say, no, no, no, I, I have a better idea. I know the community. I have the access. I want to build something special. And as you said, in an ideal scenario, it goes way beyond where they start.

• 19:46Speaker 04

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• 20:28Speaker 04

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• 21:03Jason Calacanis?

  It's so great. I love the idea. Have you made an investment yet out of the fund? Sometimes people have.

• 21:08Speaker 04

  So yeah, sometimes you warehouse deals. No, we've actually made about six or seven of these out of our opportunity fund. So we have, we have LPs that have allowed us some flexibility. So we've learned by doing.

• 21:18Jason Calacanis?

  Which one would you say you, you've had the best experience with, learned the most from?

• 21:22Speaker 04

  You know, all of them. You know, the first one we, we did was, was a woman named Marina, who's crushed it with language learning schools. She was an entrepreneur by background. She's dramatically grown since we've invested, has started several businesses. You know, we've done, uh, one creator called Vin Wiki, who does some great stuff around cars. There's incredibly passionate car communities and, you know, things like that. So we've done a few. But we now, the reason we've kind of switched this from our opportunity fund to his own special thing, which is the first time we've done this, you know, we did a lot of crypto investing. We kept it in the core fund, but this really is a different style of investing that we really believe deserves its own vehicle. And so we're here to double down on it.

• 22:01Jason Calacanis?

  I love it. Uh, if anybody wants more information on the Twitter, you can interact with Sam. Are you Lessen or Sam Lessin?

• 22:09Speaker 04

  I'm just Lessen. I'm not as good as you guys. I don't have Alex, but I've got Lessen.

• 22:13Jason Calacanis?

  That's pretty good. I mean, it means you were, you were an OG, you were there in the first six months of Twitter slash X.

• 22:19Speaker 04

  There you go.

• 22:20Jason Calacanis?

  Uh, DMs are open and, uh, yeah, ping him if you got an idea.

• 22:24Speaker 04

  And Jason, let's find some deals to do together.

• 22:26Jason Calacanis?

  I, you know, I'm going to introduce you to, to chef reactions because that's very early on. And I DM'd you there and then, yeah, let's find somebody to collaborate on.

• 22:35Speaker 04

  I love that.

• 22:35Jason Calacanis?

  I think there's, there's so many people. One of the things Alex and I have been talking about was what is the impact of startups being able to do more with less? And you wrote an essay on it at some point, I think, and it's been like the trend of our careers. You know, you used to take 20 people and $3 million to launch a product, then five people and 200,000. And now with AI, you, you can kind of fill in all these gaps. And I think that's what the creators are going to really take advantage of. And it seems like the niches are small. Dave Morin and I were actually talking about our love of a niche app called Slopes, which tracks you.

• 23:11Speaker 04

  I was using it this weekend with Dave.

• 23:13Jason Calacanis?

  Okay. So Slopes is awesome. You can get your speed. You keep track of it. I've been using it for four seasons. It's really interesting. We have another one, Go Polar, which is a app for people who do cold plunging and saunas. Now you think these things are small niche apps, but they're done by hundreds of thousands to low millions of people. And because they have, because the cost of building apps is now under a million dollars and two people, it just opens up a lot of doors. And it used to be whoever your language person was or the chess person, that might be a five to $10 million effort to make a world-class app. Now it's a 500,000 to a million. So I think the timing is particularly good for you, Sam.

• 23:53Speaker 04

  Well, I appreciate it. I, you know, I appreciate it. I appreciate you getting it and I'm excited to work with you guys on it. It's a new thing.

• 24:00Jason Calacanis?

  Can't wait. Cheers. Uh, that's Sam Less than everybody. Well done.

• 24:03Speaker 02

  Thank you.

• 24:04Jason Calacanis?

  You know, we always like to have whoever the Alex.

• 24:09Speaker 04

  Main character.

• 24:10Jason Calacanis?

  Main character of the week is a concept we use here on the program. And I just saw Sam, you know, and I'm like, you know what? Sam, I think is the main character here. Also the data Republican one, I want to have her on.

• 24:20Speaker 02

  We will, we will work on that. But here's from my end, how this, why this show works is sometimes you, you push a little bit on like, what we can pull off.

• 24:29Jason Calacanis?

  Yes.

• 24:29Speaker 02

  But it's always better because the last couple of guests you've thrown in politely at the last minute have been clutch. So I, I like this. And on the Sam lesson point, I didn't get to put this in when he was here. He had a hard out, but I have like six names that I want to send him that are possibilities for his fun just because I love them already. So like, I think he's really on to something, but let's do a hard right turn. Let's talk about fusion. Yeah.

• 24:50Jason Calacanis?

  Yeah. And I just want to tell Jesus in the comments, Jesus is here. Um, you know, if you're going to troll me on my height, five, three, understand I was five, nine at one point. I've shrunk into five, eight and a half. I'm in the best shape of my life. I'm rich. I've got more friends than you can imagine. I have an incredible family. I got a 91 sleep score and I don't ever have to work and I ski 40 days a year. Jesus, if I was five, three, I'd be the happiest short king in the world. You have to come at me with something more like the Knicks haven't won a title since 1973. If you want to come at J. Cal, that's where the pain is. I'm not fat anymore. You could have gone after that. I mean, the pain in my life is that the Knicks haven't won a title since 1973,

• 25:35Jason Calacanis?

  but we got the best team since Patrick Ewing. So you got to try a little harder on the hard insults. The sleep score is amazing. 91 sleep score. Ray from Rivers in the, in the chat. She knows 90. When you break 90 in sleep scores, you're good. I was on time today because of that sleep score. But let's make our right turn because we went from creators and now we're going to.

• 25:58Speaker 02

  We're going to fusion, ladies and gentlemen.

• 26:00Jason Calacanis?

  This week in startups, killing it.

• 26:01Speaker 02

  This week in startups. So we are working on a project called the Twist 500, finding the 500 most exciting, most potentially lucrative private market companies in the world. One of them is a company called Helion. You may have heard about them in the news. Sam Altman has backed them. They've raised about a billion dollars. They're working on a very, very interesting piece of fusion technology. We have a clip we're going to play, but first let's welcome co-founder and CEO David Kirtley to Twist. David.

• 26:29Jason Calacanis?

  Hey, there it is. Nice to see you, David.

• 26:31Speaker 01

  91 sleep score. My goodness.

• 26:34Jason Calacanis?

  Yeah.

• 26:35Speaker 01

  Do not undersell that.

• 26:36Jason Calacanis?

  You know what? I just want to say two nights in a row. So I'm looking at it right now. 91 last night. You want to know my deep sleep? One hour, 32 minutes of deep sleep, 21%.

• 26:49Speaker 02

  Is that good?

• 26:50Jason Calacanis?

  And I don't mean to flex here, but last night, two nights ago, 92 sleep score, an hour and 13 minute, 15% deep sleep. When you get that level of deep sleep with a bulldog in your bed, that's significant. With a snoring bulldog, it's significant. Then two nights before, we're 74 and 56 because of Super Bowl. And then the night before I was out late and I had a, I had a Macallan 18. Alex, close your ears.

• 27:16Speaker 02

  Look, I can still smell Macallan 18 in my nostrils. But David, we did not have you on to discuss your a sleep score, although we could. We want to talk about Helion. I thought it'd be best to start with a, just a really compressed version of what the technology is behind Helion and why it's different than other fusion projects out there because you're not building a Tokamak, you're not building a stellarator, you're taking two plasmas, slamming them together and then crunching them and then pulling energy out of it. So can you just give us the quick rundown of how it works?

• 27:46Speaker 01

  Yep. So we build fusion at Helion. Fusion is how the sun works. It's how vast majority of energy in the universe is generated. And right now, we don't, on Earth, we don't make electricity from fusion as humans. We need to be doing that. And we can talk about all the reasons why. Fundamentally, what you're doing is taking lightweight isotopes, helium and hydrogen, and then at extreme pressures, 100 million degree, 1,000 atmospheres, you force those together, they form heavier atoms and release a lot of energy. The, what most people do in infusion is do that, do those reactions to generate heat, to boil water, to run a steam turbine. Our pioneering technology at Helion is to actually take that energy,

• 28:27Speaker 01

  electricity and magnetism and the fusion particles themselves, and extract them directly as electricity. Super high efficiency, which means the systems get smaller, cheaper, faster build, all that stuff.

• 28:38Speaker 02

  And the way this works is when you collapse your two plasmas together from opposite sides and then crunch them, it pushes back against the magnetic field. And if you change the field, that creates a current. So you essentially pull electricity directly out. You take away the whole steam power component entirely.

• 28:52Speaker 01

  Alex, you got it. There it is. I don't, you, you don't even need me. Let's do it.

• 28:57Speaker 02

  I do need you. I need you to build it. I just prepped about how it works by watching a lot of fusion videos. So my thing with fusion is apart from the fact that I'm excited by it, and I understand the massive need we have for more power around the world, is just how close we are to getting net positive fusion production into commercial use. So Yep.

• 29:15Jason Calacanis?

  That's my question too. Like, when, when do we think this arrives? Give us a range. The earliest we could be powering a data center with it is X. Maybe, you know, the midterm would be Y. And, you know, if it's hard, you know, the, the hard case, the worst case is we get it this year. Give us the, give us the range. Cause that's what your investors must ask when you raise a billion dollars. They want to know the timeline.

• 29:42Jason Calacanis?

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• 30:24Jason Calacanis?

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• 31:06Jason Calacanis?

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• 31:39Speaker 01

  We just raised another 425 million or CDA invested in manufacturing and then push our seventh generation prototype. So we built a lot of these systems that do fusion. That's one thing that sets Helion apart. We're builders. We built a lot of hardware up here in Everett outside of Seattle. And so that's what we do. So our seventh generation system came online and started the early operations last year. We got a lot of work to do this year to get up to full power, doing lots of fusion with it. Goal is that we can make first electrons in 2028. So that's a deal with Microsoft that we signed in 2023 to start building the first power plant for them, making electrons and then dialing that power up through 2030. So our goal is first

• 32:22Speaker 01

  electrons 2028. I'm going to need a sleep score 91 to get there. So we, because we got a lot of work to do. And then, and then full power by 2030 and we start deploying power plants in the early 2030s.

• 32:33Speaker 02

  Can I double click on first electrons? Does that mean that's the first time that in your manufacturing facility or lab, this system will generate power? Or is that when you have taken it out of the lab and have built the actual power plant out of the technology that then power is taken out of?

• 32:47Speaker 01

  Yeah. So the goal is that's the first revenue from electricity. That's actually somebody buys those electrons. So our seventh generation system we built now, it's a job. It's the whole goal is to demonstrate not that we can do fusion and make lots of energy from fusion. We've done that. Lots of other folks have done that from fusion, but actually make electricity. So that's, that's the goal of what we built now and what we're testing today.

• 33:09Speaker 02

  How much technology risk is there left in your model compared to more conventional reactor designs?

• 33:15Speaker 01

  Yeah. So two parts to that. One, because you're skipping over that whole middle step of steam turbine cycles and all of the like closed loop fluids and all the engineering around that, you're actually have less technology risk because you're just missing a whole step.

• 33:29Jason Calacanis?

  How do you get Microsoft on board? Because this is a paid partnership. They're giving you money. This isn't like a letter of intent. My understanding is they wrote a check, they put a deposit down, am I correct?

• 33:41Speaker 01

  So no, this is a power purchase agreement is that they pay as the electrons come off the grid.

• 33:46Jason Calacanis?

  Okay.

• 33:47Speaker 01

  Um, but if we can't meet those timelines, we pay them. And so there's penalties.

• 33:51Speaker 02

  Oh, so you have a dagger over your head dangling. I love it. That's gonna, your sleep score is gonna suck.

• 33:57Speaker 01

  Yeah, there's, there it is.

• 33:59Jason Calacanis?

  Yeah, sleep score is gonna go, sleep score is gonna be variable.

• 34:02Speaker 02

  Point nine one.

• 34:03Jason Calacanis?

  What is the story with fusion versus nuclear? Cause, correct me if I'm wrong, a piece of this was uh, that nuclear was DOA in America. You couldn't do it. Germany was turning them off. But then all of a sudden, France is hosting an AI conference the last couple of days. They are getting a bunch of people like UAE, Mubarak, thing, uh, investing in their country because they have so much nuclear. Germany, uh, and the, and the hippie dippies over there are considering turning their nuclear back on after the whole boondoggle with Putin and Nord Stream. And here in the United States, looks like we're gonna be ramping stuff up. So now I think you were not in a race with nuclear,

• 34:47Jason Calacanis?

  but maybe you are, you're not fighting this war for energy in a vacuum anymore. There, there's I think two really big competitors, new nuclear and solar plus batteries. So maybe you can compare and contrast those two.

• 35:01Speaker 01

  I, I mean, I think when we founded Helion on the order of 10 years ago, we were at a place where we were looking at small power growth in the United States and, and our focus was how do we replace fossil fuels and maybe more expensive technologies with cheaper fusion base load, clean power technologies. What we're seeing is explosive growth of power demand in the US, right? I mean, AI data centers, you know, why we're working with Microsoft and others is that the, the 2% growth in power that we had seen for year over year for maybe decades, that's gone. Like we're seeing massive power, power growth that needs it. We're gonna need it. It's gotta be on all day long. So base load power, um, and, and it's gotta be low cost and, and

• 35:44Speaker 01

  customers aren't gonna buy expensive power these days. And so that's our focus. I think that there's room for everybody. That's the general PC CEO talking. Um, that there's room for everybody in the market. It's a huge market. Um, I do think we focus on things like safety that we know fusion, when you turn the key off, fusion turns off. And so, and so that's one of the focuses that we, we focus on, on Helios, which means you can build them much faster. Uh, the, the nuclear regulatory agencies passed law last year that said fusion is not regulated like nuclear reactors. Fusion generators are regulated like hospitals. And so it's still highly regulated. It's really important to do it safely, but you can go build

• 36:23Speaker 01

  quick and build much faster. And that's one thing that, and it unlocked Microsoft is that we had a path that didn't take 10 years of regulatory approvals. We had a path that was much faster. And so, so we, we think that, and then in terms of solar and battery, I look, we live up here in Seattle. Um, that yeah, when that, where the sun is shining and bright and low cost solar, you should put it in. Absolutely. There are places, there are places I see that every day where that's just, that's going to be hard.

• 36:49Jason Calacanis?

  Tell me about safety in these things because obviously, you know, that is a concern with nuclear power. What are the safety concerns here? Are these things going to be too dangerous to put near people? How far out do they have to be from a city? And how concerned are you about that? Because I, I've, I remember hearing people being concerned and then I've never heard anybody bring it up again. So what's the state of safety when it comes to fusion?

• 37:15Speaker 01

  It's super critical if you build a technology, but then either it takes a ton of time and money to regulate one of these, uh, uh, that technology. Or the customer doesn't want it and the community doesn't want it, then you haven't actually solved the mission. And so at Helion, we focus a lot on that, both the technical case and the operational case for safety. Fusion fundamentally, uh, the way fusion works is you put in your fuel, hydro, uh, hydrogens and helium, these lightweight, common, common materials. You then, when this is, when you're, when you don't want to run it, or if something happens, you turn the key off, fuel stops flowing in, it turns off. The same way as every other natural gas or, or other system you might have. So fundamentally, you don't have the big safety concerns like the evacuation or those types of things. Those all go away with you.

• 37:57Speaker 01

  That's really powerful. We've been able to make that case to all the regulatory agencies. So we're regulated by the state of Washington, the Department of Health. Been working with them for a lot of years on regulating all our previous machines. And to make that case, and I think that's, that's really important that we've been able to demonstrate that. However, just to be like crystal clear, fusion is still a big industrial power system. This isn't a thing we imagine is going to be on the back of a DeLorean just based off the physics. And so what that means is that we build industrial safety systems and industrial operating equipment. So this is regulated by the Department of Health, like a particle accelerator in a hospital. And so you do have trained operators, you do have shielding systems. And we do have some radioactive materials.

• 38:38Speaker 01

  And so we have to make sure that just like a hospital, we're regulating these, we're controlling these. And we spend a lot of time and money thinking about how to do that.

• 38:46Jason Calacanis?

  What are the elements you're using besides the obvious ones like hydrogen or whatever that are common? What are the uncommon ones you're using? And is there an issue with those being available? Where do they come from and who controls them?

• 39:01Speaker 01

  Yeah, we spend a lot of time thinking about the manufacturing of these systems. We spend a lot of time on the generators. We know that the cost of manufacturing, if you do a really good job of manufacturing on your product, comes down to the materials cost. So if you're using ultra rare materials, that's going to drive your product cost and then your electricity cost. And there's almost no way around that as good a manufacturing as you want to do. So we use common aluminums and steels and coppers and some more complex alloys of those, but not rare materials. And we spent a lot of time on that to make sure that as we build these systems, it can scale to big, to big scales. The other part to that is the fuel and we use in Helion, we use a different fusion fuel than other folks. We use a helium three, which is called light helium. It's actually quite rare.

• 39:45Speaker 01

  And one of the things we pioneered very early in the company is actually manufacturing that. So we make, make that from hydrogen, from heavy water, from things that are very common and found in, in all water on earth. And then we've demonstrated that we can make that helium three. Fundamentally, you make it from fusion itself. Is that from the fusion process, it's one of the actual things that comes out of fusion. And we measured that on our six generation system. That we could do that, we can make this helium three, and then it's a matter of filtering it. Um, why other folks don't make helium three is that you have to actually be able to do it to what you said, efficiently and at low cost. And so what you need is efficient fusion. And that that bootstraps right back to that very first question, because we can efficiently directly recover electricity. Guess what that means? We can actually make the fusion fuel efficiently too.

• 40:30Speaker 02

  That's such a bummer because I heard that there's a lot of helium three on the moon and I was really excited about lunar mining operations to power our fusion future. It's much lamer if we're just going to do it in the same warehouse we're doing the power production. Come on, David.

• 40:42Speaker 01

  There's a couple of companies out there talking about how do you go to the moon to mine helium three to sell to helium. Um, but yeah, I think it's, yes, it's lamer, but our goal is to make electricity. And if it's lame, great. That means it's low cost.

• 40:56Speaker 02

  Okay.

• 40:56Speaker 01

  If it's sexy, it's probably expensive. So let's, let's focus on, on how do we get it as lame as possible.

• 41:00Speaker 02

  Launch costs are coming down. Get excited. So what is the next major milestone from helium that we should have our eyes out for? Because we love watching technology products mature and come to market. So David, what's the next big bang?

• 41:11Speaker 01

  Yeah. So the big ones from last year was get our seventh generation machine built and get started operation on it. Um, big technology goal internally is get that machine running at full power, making electricity, showing you can do that from fusion. And in parallel to that, building out US manufacturing of the fusion industry, which is a brand new thing. So that's mass producing electrical components, ones we call capacitors, building more R and D and advanced semiconductors here in the US. Um, and then we haven't talked too much about all the, the hard manufacturing we do in terms of machining and electromagnets. And we've got a lot of those to build too. So we'll be doing that over the next year and then, uh, starting to, to work on that power plant. So one of the better, bigger announcements we'll have coming out later is where that first power plant for Microsoft will be.

• 41:57Speaker 02

  I'm going to guess Redmond and then that means that I can come up and see you guys and Zap at the same time for a field trip and see all the American fusion. Um, David, thank you very much. And we love to ask, um, is there a particular role that you're looking to hire for? They're having a hard time feeling that we can give a shout out for while you're here?

• 42:11Speaker 01

  Oh, I love it. Yeah. So, uh, we are a company of builders, hardware building. I think, uh, right now, uh, over 75% of our team are technicians and assemblers that are building. And so we're hiring anyone who is great at building complex technology with their hands and a lot of building out in the engineering team, the engineering side. So my voltage power electronics, come on by.

• 42:32Jason Calacanis?

  Yeah, go to the website, check out the careers page and go save humanity by making energy free. I mean, that is going to be a wonderful future when energy becomes, you know, 90% cheaper or whatever it's going to become. Just great job and appreciate the hard work you're doing here in America. Make America even more extraordinary again.

• 42:57Speaker 02

  Amazing. All right. Thank you, guys.

• 42:58Jason Calacanis?

  All right.

• 43:00Speaker 02

  Thanks, man.

• 43:00Jason Calacanis?

  Take care, David. You know, we have one other major story that's a little bit underground. I thought we'd bring Lon Harris on, new editorial director here, back from the future when he was the original newsreader on the program, gosh, 14 years ago. But I really wanted him or you to tee up this story around large language models and copyright and IP.

• 43:24Speaker 02

  So the headline here is that Thomson Reuters has won its case against a company, a former legal AI startup called Ross Intelligence. Now, if my understanding is correct, Jason, this is not actually about generative AI, but instead about training a different type of AI model, kind of in the pre LLM era. But people are really applying this decision by the judge to the current moment. So it is a very important point. And what happened is the judge ruled in Reuters' favor, essentially saying that the information that Ross Intelligence had procured, and we can talk about that process, did constitute a copyright violation and did not fall under the protection of fair use. Now, there's four things that come up.

• 44:09Jason Calacanis?

  It's a four-part test. The four-part test of fair use, I've been through so many times because, you know, as a, when I was doing blogging, or we would cover something in our magazine, sometimes we would want to use somebody else's IP to, you know, make a point, right? And the purpose of what you're doing, what you're using the content is important. Is it for commercial purposes or nonprofit uses? Is it in educational, right? And in educational? Setting are you doing commentary? So there was a famous case, Alex, where somebody did a voiceover. Producer will know all about this.

• 44:53Speaker 02

  Actually, just let's, let's bring lawn on right now.

• 44:55Jason Calacanis?

  Oh, great.

• 44:55Speaker 02

  Hop on and help us talk through this because you are our media guy.

• 44:58Jason Calacanis?

  Let me walk you through this. If you, there's also how much of the original work you're using. Is it commercial, non-commercial, educational? In other words, it's a context under which you're using it. And the percentage that you're using, right? And then the nature of the work also comes into fact. So if the work is the real world, like a documentary or something, that can play into it versus something completely fictional. And then how does this affect? And this is the most important one. The potential market for the original work. Right? And so what does that mean?

• 45:40Jason Calacanis?

  Practically speaking, if you're Napster and you say, hey, we're just providing these MP3s or people are sharing them online. You sell CDs, you sell live concerts. This isn't, you know, impacting you. Well, that's the wrong way to look at fair use because the potential market for the original work is what's critical. Now, when you look at something like the internet, that was a potential market for all content creators. You can't just steal stuff. Now you look at the exceptions, exemptions. If you were doing, Lon, you might remember this or be able to look it up real quick. There was a guy who went over the prequels and he just did commentary on the entire movie.

• 46:23Jason Calacanis?

  Put it on YouTube and Lucas was like, hey, you can't do that. That's the entire goddamn film. He said, well, I'm doing commentary. I'm not actually making money from it. I don't have it monetized. So these things act, you know, because they're one offs. People aren't making money off them. There, there's kind of a special place for them in the fair use law. But the Mouse House, Disney, the music industry has made this very clear. You can't just take our stuff. And this is where stable diffusion, open AI with chat GPT. And in this case, they're making a legal document. They try the legal service, they trying to get. Westlaw, which is a famous, Westlaw or LexisNexis to give them a license to this. It doesn't matter that you tried to do it. It matters what you did.

• 47:08Jason Calacanis?

  You can't just take other people's content without permission. And the judge here basically said as much.

• 47:15Speaker 02

  So in the question of what was the use? Because it was both commercial and competitive and not transformative enough. That was a strike against the infringing property, the Ross AI startup. The other two, the next two, so the copyright works nature and then how much of their work was used? Those actually went in favor of Ross.

• 47:37Jason Calacanis?

  So going against Ross was, hey, this was a commercial use, right? You weren't transforming it. Transforming it would be like Andy Warhol taking the soup can and painting it. That's when you transform the original work significantly. And again, that's like up to a jury. It's up to a judge to interpret that. And it's up to the person whose artwork it is to decide if what you did was transformative enough. That went against Ross. What went in favor of Ross is Westlaw's material has more than a minimal spark of originality required for copyright validity, but the material is not that creative. In other words, what Westlaw has is a bunch of cases that they have scanned in OCR'd and cleaned up and put into their database.

• 48:20Jason Calacanis?

  So if you're a lawyer and you want to search case law, that's what you use Westlaw for. There's LexisNexis is another. But part four is that this is the money quote, I guess. Even taking all the facts in favor of Ross, it meant to compete with Westlaw by developing a market substitute. When I talked about this on All In, I showed, if you go on ChatGPT and you ask it to make a version of Darth Vader as a bulldog, it wouldn't do that. But I asked it to make a Jedi and it did, or a Sith Lord and it did. So somewhere along the line, the folks at OpenAI, who have a long history of stealing content, according to the lawsuit from the New York Times, and stable division, which got caught with like the Getty watermarks on their images. I mean, talk about red handed.

• 49:06Jason Calacanis?

  They decided, hey, let's take out the Mouse House's IP. In other words, somebody said, anything that's a character name from Disney, they must have gone to, you know, Wikipedia or DBpedia, like one of these sources and say, give us the character names, put them into our rule set, not the original LM, but the rule set around it. There, that's like that little thin layer of rules put on top of the LLM. They put a thin layer on top saying you cannot make IP from Disney.

• 49:36Speaker 05

  It's utterly meaningless, though, in stable diffusion, particularly because the whole way it works is, it's like, um, it's a platform and then people design their own models to go on top. So stable diffusion can say, we don't have Darth Vader, we're not putting him in our library. But then I, as an end user, can just make my own Darth Vader model, use it in stable diffusion. And now I'm using their platform to make my own Darth Vader images anyway.

• 50:06Speaker 02

  Lon, is your point that all these models are inherently anti-copyright and therefore they're all suspect? By the way, this is what Dolly, which is a, a, a OpenAI thing they have inside ChatGPT, said it would not create Darth Vader, it said it could try to get close, I said, sure, and it made me a poodle?

• 50:22Jason Calacanis?

  Darth Poodle. Darth Poodle with a Tie Fighter and the Kylo Ren lightsaber. So this is trademark infringement here, using that IP, even though it's subtle in my mind. The Tie Fighter is Lucas's IP, you can't just use it. And the lightsaber, that iconic one, you see, there isn't just a light sword. If you just did a light sword, that would be different.

• 50:46Jason Calacanis?

  But it's actually Kylo Ren, so they kind of know what they're doing here. And yeah, the difference, Lon, to what you're talking about is the difference between personal use, that's non-commercial, and building a service. ChatGPT charges for their service. ChatGPT has a vibrant, multi-billion dollar business that's based on subscriptions from consumers who want to make images. Now, if you on your own computer, or you at home, were to make your own home version of Star Wars, you literally hired actors, put them in your backyard on your ranch and made a Star Wars film in your forest, uh, on your ranch, you can do that. You can do all kinds of copyright breaking stuff on your computer. You could download a New York Times story.

• 51:31Jason Calacanis?

  You can edit it. You could republish it on your computer. You just can't publicly publish it. And that's the difference. So you will be able to make a Star Wars LLM for personal use. You just can't use it for competing against Disney. And I believe Disney will make at some point as part of Disney Plus, an LLM to do this, which by the way, YouTube released today for premium subscribers.

• 51:58Speaker 02

  I do want to say though, that producer Matty did manage to get a very convincing Jedi Bulldog made.

• 52:03Jason Calacanis?

  There it is.

• 52:04Speaker 02

  So it's funny how thin these barricades are around IP. Because if you look at that, that just screams, I like dogs and I like Star Wars. And half of that's copyright protected.

• 52:14Jason Calacanis?

  And that's a licensing deal right there, by the way, Alex. You know, there are people who license Disney IP, Marvel IP to make ashtrays and saucers and T-shirts. And that's a vibrant part of any IP owners, whether it's Elvis or, you know, the Rolling Stones. They make very detailed decisions on who gets to license for cups. Who gets to license for a fast food Happy Meal? And they have a bidding war between all of the different fast food restaurants of who gets, you know, the Happy Meal characters for the next Marvel film.

• 52:50Speaker 05

  And there's so many legal requirements, like here's what you can have the characters doing, here's what you can't. They can't be associated with anything like this and you lose all that power now. Yeah. Put them next to whatever they want.

• 53:04Speaker 02

  Lon, I think Ferrari has a thing in all their licensing deals that if you show a Ferrari car, it has to be leading the race, for example, because they don't want Ferrari ever to be shown in second place.

• 53:13Speaker 05

  Exactly.

• 53:13Speaker 02

  People are particular about this. They're serious. But what I'm curious about is not just the implications amongst ourselves, but also for the industry itself. And according to Cornell University professor, James, I'm going to guess here, Grimleman?

• 53:27Jason Calacanis?

  Grimleman again, Grimleman. He's always got something to say, Grimleman.

• 53:33Speaker 02

  Mr. Grimman says, quote, "If this decision is followed elsewhere, it's really bad for the generative AI companies." So we are talking about a legal database, we are talking about Reuters, but the thing is, this does, I think, chip away a little bit at the foundation of the value of some of these companies. Jason, we've talked about it on the show a bunch. What's OpenAI worth? 157 billion, $300 billion? If their foundation is porous, it could be 30.

• 53:56Jason Calacanis?

  And here's what's going to happen, I predict. The New York Times is not going to settle, nor should they. New York Times has to take this one to the mat. And if they do take it to the mat, they're going to be able to get an injunction against ChatGPT. And if they get an injunction, what that means is ChatGPT has to turn its product off. They have to stop providing it. That would be cataclysmic. The damages that the New York Times could get here, I believe, could be like nine figures, like 100 million, 500 million, which is pocket change for ChatGPT, except when 10 other people show up.

• 54:40Jason Calacanis?

  And then it's like getting 10 speeding tickets, or it's having 10 cars impounded. Now you've got 5 billion in liability, 10 billion in liability. That's what sunk Scour, Napster, and made all those companies become insolvent. Will ChatGPT become insolvent in this case? I don't know.

• 54:58Speaker 02

  Probably not, but...

• 55:00Jason Calacanis?

  Well, it's gonna be, this could be cataclysmic. I think it's a 5% chance or less that this becomes existential for them, and a 95% chance, they write really large checks. And I do think this could balkanize everything, where Reddit then says to folks, "You know what? Pay up or take our stuff out." And then Quora, "Pay us, take our stuff out." Getty, "Pay us, take our stuff out." And it is going to cause absolutely, absolute chaos in the industry, I believe. And then it's going to cause a really positive model of licensing for the New York Times.

• 55:44Jason Calacanis?

  I believe the New York Times will make more money. More money from licensing their content to L L Ms. Then from advertising and possibly more than subscriptions every year.

• 55:56Speaker 05

  But haven't so many of the A I leaders have said they can't afford that. Like if they have to start paying everybody. Well, but do you do you not believe them?

• 56:08Jason Calacanis?

  I don't believe them.

• 56:09Speaker 05

  Okay.

• 56:09Jason Calacanis?

  Spotify pays. You tell us, Alex, is it 70 cents on the dollar or 68 cents?

• 56:15Speaker 04

  About 65.

• 56:16Jason Calacanis?

  Yeah. Okay, Alex is here. He knows this stuff. You know pop culture, he knows numbers. It's 65 cents of every dollar. You know what? Napster said, we can't possibly make this work. Somehow Spotify figured out how to give two thirds of their revenue away. By the way. Apple gives away 70 cents of every dollar in the App Store.

• 56:35Speaker 04

  Yeah. Oh, okay, yes, but.

• 56:39Jason Calacanis?

  Okay.

• 56:40Speaker 05

  I mean, there is. Oatman literally said, we need too many materials to train these models. It's not possible. We'd run out of money.

• 56:49Jason Calacanis?

  Cry harder.

• 56:50Speaker 05

  Before we could pay all of these creators.

• 56:53Jason Calacanis?

  Very simple.

• 56:54Speaker 05

  You just think it's made up.

• 56:54Jason Calacanis?

  Percentage.

• 56:55Speaker 05

  Okay.

• 56:56Jason Calacanis?

  Percentage. He should take 65 cents of every dollar of consumer subscriptions and give them to content creators.

• 57:02Speaker 05

  Yeah, but they hoovered up like all the content.

• 57:05Jason Calacanis?

  Okay.

• 57:05Speaker 05

  They have to pay.

• 57:05Jason Calacanis?

  So I'm just saying, this is a potential settlement. If you say you can't pay everybody, then you could say, I'll pay a percentage.

• 57:12Speaker 05

  Okay.

• 57:13Jason Calacanis?

  And then you come along for the ride, which by the way, is what Spotify did. Spotify figured out a way to say, even though we can't pay you for every song in the system, we can pay you a percentage of our revenue. As it goes out, we pay you.

• 57:25Speaker 05

  But Spotify can measure that numerically. Here's how many people listen to Rihanna this month. Open A I can't do that with their whole system. They think of everything in.

• 57:36Jason Calacanis?

  I call BS. They could say in the system, these are citations. When you get medical information, go ahead and do a medical search right now and ask like, what is, you know, this statin drug used for? Please give me citations. You can ask these L L Ms right now, Gemini, et cetera. Please give me citations. And they somehow figure out how to get citations in there. So I do know that the lot model has been trained. And yes, you're right, Lon. There's probably some general knowledge in there. Guess the next word in an email that they can't. But they can also add citations. So I do think there is a way for them to re-engineer the models from first principles to say, anything we ingest, when we, when it comes

• 58:20Jason Calacanis?

  out the other side of the transistors, let's make our best effort to attribute it.

• 58:25Speaker 02

  I, I struggle with what to do here because I am a writer, right? I, we do this three times a week. I also love technology. I think startups are awesome. I use AI. And so I just feel conflicted as hell and I don't even know which way to shoot.

• 58:39Jason Calacanis?

  Somebody republishes this and puts ads in it and reconstitutes it. I can't pay my salary and your two salaries.

• 58:46Speaker 05

  And I mean, that's the whole idea. Fair use isn't supposed to be a new business. It's supposed to be me doing some kind of analysis or some kind of parody, or it's not just supposed to be me recreating your business for myself.

• 59:01Jason Calacanis?

  Now, if you do a picture-in-picture reaction shot, that would be okay with me. So.

• 59:05Speaker 02

  Transformation, that's addition. That's doing a lot more.

• 59:08Speaker 05

  A reaction is something new. You're making the content of you reacting. Yeah.

• 59:13Speaker 02

  But in the economy of reactions on YouTube, quite often, if you sit down and you put on a new, a band's new single and you have yourself in the corner and you're talking over it, often the label gets the money from that. And I think that's mostly okay. Sometimes they cut side deals with creators just to help encourage them to kind of like show off newer bands. But I mean, like even in that case, YouTube won't mess around.

• 59:35Speaker 05

  Nintendo, this is always an issue with Nintendo. They don't like, let's play people reacting to the new Zelda game, even though, you know, that's how you get the word out that there's a new Zelda game.

• 59:46Jason Calacanis?

  Yeah.

• 59:47Speaker 02

  You can choose to do that, but if you were just taking our show without permission, yeah, okay.

• 59:52Speaker 05

  Yeah.

• 59:52Speaker 02

  So short, short meta, short Microsoft, because they're in trouble with OpenAI, long New York Times.

• 59:59Jason Calacanis?

  No.

• 59:59Speaker 02

  Just speaking startups, investor advice.

• 1:00:01Jason Calacanis?

  I think they'll be, I, I think they're all gonna win. It's just gonna take some settlements. Um, but, uh, you know, I just love this one. The daily Doug is a composer. He smokes weed on air and then talks about songs.

• 1:00:17Jason Calacanis?

  I can relate to this. Like, I like this. And he does like my, and I gave him 100 bucks. I said, do more Dire Straits. And he did a couple of Dire Straits for me. And I don't know how much he makes, but the Daily Doug is so great.

• 1:00:30Speaker 02

  Oh, this guy.

• 1:00:31Jason Calacanis?

  He's so awesome. I've seen this guy before. And if you go look at, you know, what's a really great feature in YouTube is they, if you go on the timeline on the scrub, you can see which are like the key points that people will watch again. So pick whichever one is like a peak.

• 1:00:44Speaker 02

  There we go.

• 1:00:44Jason Calacanis?

  There you go. Boom. And he started playing along to Dire Straits and trying to figure out the chord progression. You can play there. We can listen to it.

• 1:00:53Speaker 02

  I'm gonna play only 30 seconds at most to respect the copyright.

• 1:00:57Jason Calacanis?

  It was fair use of a fair use.

• 1:01:00Jason Calacanis?

  And here, he's like doing, he is digging Brothers in Arms, which is one of my favorite songs of all time, Dire Straits or otherwise. And just go check out the Daily Doug. And if we could book him as a guest, Daily Doug, I want to book as a guest.

• 1:01:15Speaker 02

  Okay.

• 1:01:16Jason Calacanis?

  And then Blanco Lirio. Pull up Blanco Lirio. I pay for both of these substacks. This is bizarre stuff, Lon, but Blanco Lirio channel is so great. And Doug is so great. Daily Doug is so great.

• 1:01:30Speaker 02

  Ah, okay.

• 1:01:31Jason Calacanis?

  Blanco Lirio, I love because I fly planes. Not myself personally, but I fly in planes.

• 1:01:37Speaker 02

  I was gonna say like.

• 1:01:38Jason Calacanis?

  And I don't want to die in a plane. I don't want to die in a plane. Blanco Lirio channel does an amazing job. You can pull up any of his videos.

• 1:01:46Speaker 02

  Here, here is a very short clip of him discussing the Azerbaijan Airlines preliminary report, it was quote, shot down. And here we go.

• 1:01:53Jason Calacanis?

  Okay.

• 1:01:55Jason Calacanis?

  This guy's a pilot. He's somewhere around Lake Tahoe where I have, where I ski and I have my ski house.

• 1:02:03Jason Calacanis?

  And it's incredible. He goes through every step of every report, Lon. And he actually did the the the Black Hawk one and you know, he will do three, four, five of these reports, pulls up the NTSB report. I love this guy. I love both these YouTubers. I want to do a collab with both and talk to both of them about their businesses.

• 1:02:25Speaker 05

  You know, the, there's a TikTok guy who's an airplane mechanic. Do you watch his stuff?

• 1:02:31Jason Calacanis?

  I'll have to find his.

• 1:02:32Speaker 05

  Send it to me. He just shows you whatever he's working on. He just brings the camera and he's like, now when you're changing a fuselage cover, you got it.

• 1:02:39Speaker 02

  You guys need to play more video games and consume less content.

• 1:02:43Speaker 05

  It's fascinating. I mean, he's funny, but it's just interesting to see how planes work. I had no idea.

• 1:02:48Jason Calacanis?

  All right, everybody. Another amazing episode of This Week in Startups. Thanks, producer Lon. Thanks, Matty, Chris, Court, sales team, Hannah, Jamie, and Matty Boy, and of course, Alex Wilhelm. He's X.com slash Alex. I'm X.com slash Jason. And the shortest, no, it's tied for shortest, is X.com slash Lons, L-O-N-S. We all have great early year one Twitter handles.

• 1:03:16Speaker 05

  You went to South by Southwest and then came back to the Mahalo offices and stood up on a chair and said, everybody, stop what you're doing.

• 1:03:25Jason Calacanis?

  Yes.

• 1:03:25Speaker 05

  Go download this new app called Twitter. We're all going to use it every day.

• 1:03:31Jason Calacanis?

  Alex is like, and nothing's changed in 15 years. He still does that.

• 1:03:34Speaker 02

  No, no, I was just thinking that, um, I wish I had been, I wish I'd been there for a little bit because I I've known Jason mostly in his like investor era, kind of like, you know, like aging into the elder statesman role type, you know? I didn't know like Scrappy Jason startup Mahalo. I mean, I knew about Mahalo, but we didn't know what you did back then.

• 1:03:52Jason Calacanis?

  I'm going back to Scrappy J Cal mode.

• 1:03:56Speaker 05

  Oh, no.

• 1:03:57Jason Calacanis?

  Well, I'll tell you, well, Scrappy J Cal with resources.

• 1:04:00Speaker 05

  Horrible mistake. I'm sorry.

• 1:04:02Jason Calacanis?

  I would resource as long as like, I like it better now because I have resources. It's a little bit easier. Everybody gets paid a little more money and there's a little bit more budget for food. We get a nice office. Maybe there's some money to pay for the old relocation costs. So Lon is moving to Austin. He will be with me, Jackie and the team in our new studio. People don't know, but we're building the studio. So I am looking for a 10,000 square foot warehouse somewhere in Austin to put my team and maybe two or three sets of the pod. We keep working on the sets and maybe some new shows and ideas. And then just generally a good time. We'll see you all next time on the Speaking Stars. Bye bye.