Weekly Recap: Grok 4 Launch, Texas Floods, Web Browser War, Top Signals, Meta Smart Glasses

(00:00) - Intro (00:03) - Texas Floods Controversy (03:39) - Augustus Doricko (Rainmaker) (31:04) - Top Signals (01:05:09) - Grok Goes Out of Control (01:14:49) - Grok 4 Launch Breakdown (01:48:06) - Ben Thomson (Stratechery) (02:27:59) - Meta Doubles Down on Smart Glasses (02:35:21) - OpenAI to release Web Browser TBPN.com is made possible by: Ramp - https://ramp.com Figma - https://figma.com Vanta - https://vanta.com Linear - https://linear.app Eight Sleep - https://eightsleep.com/tbpn Wander - https://wander.com/tbpn Public - https://public.com AdQuick - https://adquick.com Bezel - https://getbezel.com Numeral - https://www.numeralhq.com Polymarket - https://polymarket.com Attio - https://attio.com/tbpn Fin - https://fin.ai/tbpn Graphite - https://graphite.dev 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.

• 0:00Jordi Hays?

  You're watching TVPN.

• 0:03John Coogan?

  Rainmaker stands accused of having a role in the Texas floods. This is a very, very sad story. It's on the cover of the Wall Street Journal, not the Rainmaker part. That has been contained on X, but I'll give you a little update on what's going on in Texas. So Texas rescue grows urgent as toll mounts. At least 70 were killed in weekend floods as more bad weather complicates the search. The search for swept away, for those swept away by punishing flash floods in central Texas over the holiday took on new urgency Sunday as the death toll climbed to 70 and nearly a dozen girls from a private summer camp remained missing. Rescuers combing the swollen banks of the Guadalupe River were holding out hope that survivors might still be found. The potential for more bad weather

• 0:47John Coogan?

  Sunday also loomed over ground and air operations. The National Weather Service warned of more rainfall and slow-moving thunderstorms that could create flash floods and in the already saturated, in the already saturated areas in the Texas hill country. So this blew up on X and, and people were asking, Augustus, did Rainmaker, was Rainmaker operating in the area around that time? Cloud seeding startup Rainmaker is under fire after deadly July 4th floods in Texas. CEO Augusto Rico, who's been on the show multiple times, will join us today at noon to break it down. He's already explained his side of the story on X several times, but we will ask him a lot more questions. He says the natural disaster

• 1:32John Coogan?

  in the Texas, Texan hill country is a tragedy. My prayers are with Texas. Rainmaker did not operate in the affected areas on the third or fourth or contribute to the floods that occurred over the region. Rainmaker will always be fully transparent and he gives a timeline of the events. He says overnight from the third and fourth moisture surged into hill country from the Pacific as remnants of the tropical storm Barry moved across the region at 1 a.m. on July 4th. National Weather Service, which we work closely with to maintain awareness of severe weather systems, issued a flash flood warning for San Angelo, Texas. Note, summer convective cloud seeding operations in Texas.

• 2:10John Coogan?

  Do not occur during overnight hours at 4 a.m. On July 4th, NWS issued a life threatening emergency warning and flooding insured. He says, did Rainmaker conduct any operations that could have impacted the floods? He says, no. The last seeding mission prior to the July 4th event was during the early afternoon of July 2nd, when a brief cloud seeding mission was flown over the eastern portions of South Central Texas and two clouds were seeded. These clouds persisted for about two hours after seeding before dissipating between 3 p.m. And 4 p.m. CDT. Natural clouds typically have lifespans of 30 minutes to a few hours at most, even with the most persistent storm systems rarely maintaining the same cloud structure for more than 12 to 18 hours. The clouds that were seeded on July 2nd dissipated over 24 hours.

• 2:54Jordi Hays?

  A question I have that I'm sure he'll have answers to is why do cloud seeding operations in the immediately before a massive storm is coming through? That's the question that a lot of people have, but we will get into that when he joins the show.

• 3:14John Coogan?

  Yeah, I mean, there's a big question about how effective is cloud seeding? Could you start a flash flood if you've tried? Does this work? Someone was paying for this because it's not a nonprofit, like, obviously Rainmaker has clients.

• 3:28Jordi Hays?

  I believe it was state level funding.

• 3:29John Coogan?

  So the state might buy cloud seeding operations in one way. There could be, you know, a mistake. He says that he's not involved at all. So we will dig into that with him. Our next guest is here, Augustus Doricko, the CEO, founder of Rainmaker. Welcome to the stream, Augustus. How are you doing?

• 3:46Augustus Doricko?

  John Jordy, thanks for having me. I am doing well. I am obviously talking to a lot of people about the flooding that's gone on in Texas and appreciate the opportunity to clarify that Rainmaker and cloud seeding had nothing to do with the flooding that unfolded. And even in spite of that, I think that it's a tragedy that it did happen and certainly don't want anybody to use this opportunity, use this controversy to blame cloud seeding for the sake of popular political support. And you may have seen that Marjorie Taylor Taylor Greene is proposing running a bill to ban all forms of weather modification based on those that we saw in the Florida State House Legislature

• 4:28Augustus Doricko?

  earlier this year. I think it would be both disrespectful to the families involved and baseless and without any technical or scientific credibility if that legislation were to go through. So I'm happy to talk about the course of events, what cloud is what it's not here with you today.

• 4:44John Coogan?

  Yeah, let's kick it off with the the high level on what actually happened in Texas, where things stand now, the status of the rescue operations and kind of the timeline. That's more broad.

• 4:58Augustus Doricko?

  Yeah, absolutely. So this phenomenon, this flooding was global in scope. It was referred to as a low probability, high impact event. I encourage people to go to Matthew Cappucci on X. He gave a great outline. He's a meteorologist that has a lot of expertise on severe weather forecasting, but but Tropical Storm Barry, the remnants of which blew into Texas, was going to cause inordinate flooding regardless. And that area of Texas is also known as flash flood alley because these events do happen. Now, four trillion gallons of precipitation occurring over the course of just a couple of days is pretty out of distribution, but we are seeing an increase in these sorts of severe climatic events

• 5:43Augustus Doricko?

  over time and especially down and around the Gulf. So just to go over the timeline, after having clarified that it was the remnants of Tropical Storm Barry and the conversions of large mesoscale phenomena that induced that flooding. It was at about 1 a.m. on the 4th that the National Weather Service issued a flash flood warning, and then it was at about 4 a.m. on the 4th where they said that there was a life threatening emergency underway. It was not

• 6:13Augustus Doricko?

  It was over two days prior that Rainmaker had suspended all of its cloud seeding operations in Texas because, one, our forecasters and our meteorologists saw that there was going to be this severe weather event and we needn't operate to produce more water when there was already the event coming. But, two, we suspended operations in accordance with the Texas Department of Licensing and Regulations suspension criteria where if there is a severe weather warning from the National Weather Service, or there is too much saturation of the soil, we have to ground operations. And so we do so both voluntarily and in accordance with existing statutes.

• 6:49John Coogan?

  Okay, so the cloud seeding operation that happened prior to the storm, who was the client? Like, I mean, I assume someone was paying you. Sometimes it's the government, sometimes it's an individual or a farmer or a business. Walk me through where they were, who they are, what their goal is by procuring your services.

• 7:11Augustus Doricko?

  Sure. So it's obvious that at this moment in time, that region of Texas does not need more water. However, throughout the western United States, farms, conservationists, governments concerned with their aquifer supply of water, and also reservoirs for both industrial and residential drinking water, contract with Rainmaker to produce more water via cloud seeding. And in the case of Texas, the South Texas Weather Modification Association, the West Texas Weather Modification Association, and multiple other entities exist as conglomerations of both counties and individual farms that pay for cloud seeding services to, one, water their crops, two, fill up the reservoirs that they irrigate

• 7:52Augustus Doricko?

  their crops with, and, three, recharge the aquifers like the Ogallala that has been severely drawn down and then puts all of these farmers at risk of not being able to grow, not being able to do business because of a historic drought.

• 8:04John Coogan?

  Okay, so...

• 8:07John Coogan?

  Would the proposed ban just because what I'm getting at is like I'm wondering if like if the government is paying for cloud seeding operations like the easier lever might just be to decrease the funding to the government, but it seems like Marjorie Taylor Greene is pushing for some other legislation that wouldn't just be, hey, buy less of this service because we don't need it. And instead, this service should never be bought at all. So why is there the distinction there? Like, is most of the money that's going into one of these associations, private farmer capital? Or is it a split? Like, how does that actually break down?

• 8:51Augustus Doricko?

  So right now, it's largely public municipal money that is going into these weather modification programs to increase water supply when there is drought or in preparation for drought. The bill that has been forecasted that has been proposed by Marjorie Taylor Greene would wholesale ban all forms of weather modification, be it cloud seeding, solar radiation management, or what they supposed to be chemtrails. I mean, very transparently, I think that a lot of the concern around weather modification is actually conflating baseless notions of chemtrails with a very practical American technology that can and will and does benefit our farmers, our ecosystems, our industrial water needs, and our residential water needs.

• 9:36Augustus Doricko?

  If this legislation were to go through, not only would it deprive all of those interests and all of those Americans from having water from cloud seeding, but it would also be against America's interest at a geopolitical level. Because China recently, I think on the last time I was on TVPN, I talked about how they had a $300 million annual budget for their weather modification program. That as of 2025 has been up to $1.4 billion. That is extremely consequential. And I think that if we were to ban who controls or banning Americans from controlling weather modification technology, that would put us at a meaningful disadvantage. Now, all of this to say, people

• 10:16Augustus Doricko?

  Deserve transparency. They deserve clear regulatory framework so that they know whether modification operations are safe and being conducted in a responsible manner and with government oversight and accountability if ever there are negative consequences to cloud seeding. Again, there haven't been any in the case of Texas, but I think that the reasonable next steps are to more stringently regulate who is allowed to cloud seed, define what the concepts of operation are that are permissible, define the suspension criteria at a federal level rather than leaving it purely to the states so that anybody that wants to know about weather modification can look at the data and scrutinize it and ensure that it's being conducted safely and also just to build trust because the Weather

• 10:59Augustus Doricko?

  Modification Act from 1972 that currently outlines, the Weather Modification Reporting Act of 1972 that outlines how we have to report to the federal government is, you know, 50 years old. We need more scrutiny on these programs for the sake of public trust and accountability and that seems like a reasonable next step. That was also recommended by the Government Accountability Office in their report on cloud seeding and weather modification earlier this year.

• 11:24Jordi Hays?

  What was the scale of the general water, sorry, sorry, weather modification activities on July 2? It was you guys, was there a bunch of other players operating? Is there generally a lot of players or is it a pretty, is it, is it a fairly small number of, of kind of service providers that are, that are participating in these programs?

• 11:49Augustus Doricko?

  Yeah, Jordy, you may have seen the prolific Hustle Bitch on X.com posting about this. A little while ago, he said that I was the CEO of the largest and most powerful weather modification company in the world.

• 12:03Jordi Hays?

  I saw somebody compare, somebody was comparing weather modification tech to being, saying it was more dangerous than nuclear arms.

• 12:12John Coogan?

  Nuclear bombs. That was kind of crazy. And then I also saw some people just showing like general flight logs of like commercial airplanes. Like obviously there's a lot of chaos out there.

• 12:22Jordi Hays?

  I think it's just people have every right to be angry and demand answers. It's such a tragic incident, but, but yeah, I'm curious to get into the, the scale of, you know, kind of maybe late June, early July, what was going on broadly.

• 12:38Augustus Doricko?

  Yeah, absolutely. So there's one other cloud seeding operator in Texas called Seeding Operations and Atmospheric Research, SOAR. They're responsible for operations over the Rolling Plains Weather Modification Association, which is significantly farther northwest of Kerr County. On July 2nd, we conducted one 19-minute cloud seeding flight where we released about 70 grams of silver iodide and 500 grams of salt, table salt. That was released at about 1,600 feet above ground level into two clouds that dissipated over the course of two hours after seeding them. The amount of time that those aerosols could

• 13:17Augustus Doricko?

  have been suspended in the atmosphere is less than the time between when we were seeding and the onset of rains from the remnants of Tropical Storm Gary. And the amount of material that we dispersed could not come anywhere close to inducing the precipitation, the 4 trillion gallons of precipitation that did come from that event.

• 13:40Jordi Hays?

  So, yeah. And I'm assuming you guys like have records, you keep records of like the radar showing these different cloud formations. You're, it's not just, hey, we looked and we think it dissipated, but it's like you can actually, you have like, you know, basically a map that's live updating. Is that the right way to think about it?

• 14:02Augustus Doricko?

  Not only do we keep records for our own research purposes and operational purposes, but we're required to keep records by the Texas Department of Licensing and Regulation. And those are accessible online, as are the reports on our seeding activities. And if anybody is interested in those, then you can ask for them from the TDLR.

• 14:22Jordi Hays?

  I'm curious, when, when the flooding happened in Dubai, I want to say it was a year or two ago, Dubai's known for their cloud seeding operations, it's a very dry place, and makes sense why they would want to increase precipitation. A lot of people, maybe the same types of accounts that have been, that have been blaming you, were quick to blame it on cloud seeding. Throughout history, has there ever been any major kind of flooding event that, that people were able to say, yes, 100%, this was caused by weather modification activities? Or is the tech not even powerful enough yet to, to do something like that?

• 15:08Augustus Doricko?

  So I think that there's probably three points to touch on. The first of which is that it wasn't until 2017 that attribution had been physical attribution of cloud seeding's effects had been seen and proven in an academic context. And so with new events in radar technology, namely dual polarization radar, we're able to much more clearly monitor what the effect from cloud seeding is. In previous operations, it was extraordinarily difficult to see what your effect was because we could not measure the cloud dynamics and the cloud microphysics that were changing as you were seeding. So that's the first point.

• 15:48Augustus Doricko?

  The second point is that, and again, I'm trying to be and will continue to try to be maximally transparent about our operations and historic weather modification. There was something called Operation Popeye during the Vietnam War, where the deliberate intention of cloud seeding was to cause precipitation that would

• 16:08Augustus Doricko?

  like cause flooding and then impede supply chains on the Ho Chi Minh Trail. Now, the extent to which that was effective because we didn't have good satellite imagery or dual pole radar is outstanding. Now, that said, lastly, third point. We have suspension criteria that are given to us, not just by the TDLR in Texas, but every state wherein we operate. Because if there already is too much saturation of the soil or if there is an oncoming severe weather event that the National Weather Service has notified us not to seed, then we ought not do that to increase the severity of precipitation. So there are suspension criteria because there are limits on what we ought to do with this technology.

• 16:51Augustus Doricko?

  So it's not to cause flooding and only reap the rewards from it, right? For our farms, for our ecosystems, and for our national security interests as well, right? Like, if we don't have access to weather modification technology, if we don't regulate this at a federal level and ensure that there's accountability and attribution for these activities, then other people, other nation-states, could be conducting weather mod in the vicinity of or on American soil without any accountability. And so that's why I am advocating for way more regulatory scrutiny from the federal government for cloud seeding and weather mod ops.

• 17:24John Coogan?

  Walk through some of the history of the Chinese weather modification strategies. We heard about the flooding in Dubai that was kind of unclear. Have there been any notable or confirmed negative outcomes from China spending? I mean, you said $300 million a year, something like that. That seems like a lot of cloud seeding. It seems like if there was a surface area where there could be mistakes made, they would have kind of explored that. I remember the pre-Olympics, they were doing cloud seeding or just kind of bringing down like the dirt in the atmosphere. And, you know, people kind of learn from that. Okay, you get acid rain when you do that in particular.

• 18:08John Coogan?

  But have there been any case studies from China that we should be learning from in America?

• 18:13Augustus Doricko?

  Case studies from China with adverse weather coming from their cloud seeding operations?

• 18:19John Coogan?

  Yeah, anything like that, like something where like, okay, they've done a lot of this. Yeah, they're doing this at scale. Pushed this to the limit. They've done this at scale. If there's going to be rough edges or mishaps, I would have, I suspect that we would have seen evidence of that over there. They would have had an accidental flood or something like that happen over there if they're doing it at scale.

• 18:41Augustus Doricko?

  You would expect to have seen it from China. However, you would also probably expect and understand that they're a relatively inscrutable country.

• 18:50John Coogan?

  Yeah.

• 18:51Augustus Doricko?

  That does not report on their activities very openly, objectively. Now that said, one thing that we do know about the WeatherMod program that they do have going is that they're planning to build 100,000 ground generators on the Tibetan Plateau. So Rainmaker is primarily using drones for operations. We also have inherited some ground generators from previous operations. These are essentially aerosolizing units on the tops of mountains. They can disperse material into clouds when the clouds intersect those mountain tops themselves.

• 19:24John Coogan?

  Is that like a cannon that fires the material into the cloud?

• 19:27Augustus Doricko?

  No, no. You might recall my initial inclination to use something like that because it is used in China. But no, it's essentially like a... A smokestack of sorts, a very small smokestack that releases those aerosols there.

• 19:40John Coogan?

  Sure.

• 19:40Augustus Doricko?

  But in building a hundred thousand of these ground generators and also using the Wing Long Two and a bunch of their other military drones for aerial cloud seeding, they're turning Tibet into a reservoir, a snowpack reservoir of unprecedented scale that will feed more water into the agricultural basins in southern and eastern China. And I think that, you know, although, again, this is something that needs to be transparently reported on and regulated, depriving American farmers in the West, especially as a congressperson from Georgia, right, where there is not as severe reliance on cloud seeding to produce water, would be against America's interest.

• 20:23John Coogan?

  Mm-hmm. Jordi?

• 20:28Jordi Hays?

  I guess, yeah. I'm trying to, I mean, the, the, my, my question is, it feels like, it feels like, candidly, it will be hard to come, it'll be hard to find any type of allies in Texas, on the ground in Texas, maybe aside from, from the farmers, but, but I'm curious, you know, the, the various different groups, you know, what, what the reaction from them has been in terms of, you know, if they're, you know, the, the reality is, is water scarcity

• 21:10Jordi Hays?

  affects all, every person in Texas, but only a few people truly feel it, right? It's a much smaller group because everybody goes to their sink, they turn on the water, they turn on a hose outside, they go to a grocery store, there's water, there's produce. It's not something that people necessarily feel. And so I'm curious where, you know, you obviously are going to defend weather modification because you, you believe in, in the many different ways it can have a positive impact, but I'm curious who you think the other players. That will be on your side as the industry, I mean, the industry was not in a good spot prior to this.

• 21:53Jordi Hays?

  It's in a much worse spot now, and I know you've been flying all over the country, making sure that it doesn't get banned. So I'm curious what you think the kind of coalition that will kind of form around you.

• 22:07Augustus Doricko?

  Yeah, yeah. Well, so I actually think I, just from my own experience over the course of the last few days, disagree with the two points that you made, right? Like, it has neither been hard to find allies for cloud seeding weather modification in Texas, nor do I think the technology and the industry is positioned worse now than it was prior to this weekend. And regarding the first point, there are some people that I think are probably not in good faith engaging with this because they have some preconceived notions about chemtrails or otherwise, and don't themselves want to scrutinize the data to back up how our operations are different and beneficial,

• 22:50Augustus Doricko?

  whereas chemtrails, as they believe them to be, are, you know, malevolent. The vast majority of people that I've interacted with online, on the phone, and in person are rightfully curious, skeptical, concerned, some, you know, more than others, obviously. But in scrutinizing the data and having these conversations and learning about what cloud seeding is, pretty unilaterally, people are supportive of it, provided that there is a regulatory framework more stringent than the one we have now that ensures that it's safe. This is true both of just individuals that are not themselves farmers, but obviously farmers, water managers, government officials too.

• 23:36Augustus Doricko?

  I welcome any questions that people do have, both online and via email, about what our activities are, what our policy recommendations are.

• 23:46Augustus Doricko?

  And I'm grateful that there are a lot of people that understand, one, our operations did not contribute to the flooding, but two, that even if there was a flood now, it doesn't mean that there is always enough water. And having access to a technology to produce more water for farms and otherwise would be beneficial. Like, people want a more green, lush country.

• 24:08Jordi Hays?

  Yeah, I'm curious, I'm sure you've spent plenty of time thinking about this, but would there be a way to apply the existing technology you have almost in a defensive way? In, you know, theoretically.

• 24:24John Coogan?

  Exceed a hurricane while it's still offshore.

• 24:26Jordi Hays?

  Something like that, or, you know, one of the issues here, there was just so much water in the atmosphere that rolled over a heavily populated area, and then it's got, it's gravity, right? It's got to come down. You know, is there an application of the technology that could, over time, strategically prevent, you know, or act defensively against the conditions that create flash floods?

• 24:54Augustus Doricko?

  It's a very worthwhile question for you to ask and for us to ask ourselves collectively. Right now, again, Rainmaker only does precipitation enhancement operations for all those constituencies that I listed before. However, in the past, the United States government funded Project Storm Fury, which was a series of attempts to reduce the severity of hurricanes over the Atlantic before they broke against the eastern seaboard. Again, we didn't have the appropriate understanding of atmospheric science, or the radar, or the satellite data necessary to appropriately do that. However, severe weather is something that is like a geopolitical risk, a national security risk. It causes damage, and it is fundamentally

• 25:39Augustus Doricko?

  a physics problem, right? A physics and chemistry problem. Is there technology now that could mitigate severe weather like this? No, and Rainmaker doesn't have it. Is it possible to someday? Provided we invest in NOAA, in the National Weather Service, in the appropriate research into cloud seeding, such that we could reduce the severity of severe weather? Absolutely. And I am entirely in favor of that, provided it is done in a responsible manner. And if we were to ban it wholesale, then not only would we lose access to precipitation enhancement, but we'd lose out on any potential of, at the very least, better forecasting for these systems and warning people early, but also the even greater and more consequential

• 26:22Augustus Doricko?

  beneficial potential of reducing severe weather in the future. And so I think that the United States government and Rainmaker should and are absolutely interested in mitigating severe weather in a manner similar to Project Storm Fury.

• 26:35John Coogan?

  Yeah, I think the PR, what you were getting at, Jordy, like the PR difficulty here is that like, when there's not enough water, crop yields are lower, prices go up, but it's very distributed. Everyone feels it a little bit. Whereas when there's too much water and there's a flash flood and individuals die, you have a very, it's a very emotional, very, it's very concentrated, the pain's very concentrated. And so that's why this story has become so powerful.

• 27:04Jordi Hays?

  Yeah, I mean, normally, when there's a natural disaster, there's, you can, you can critique the government for their response to it, but there's not somebody sitting there that, a scapegoat, right?

• 27:18John Coogan?

  Yeah, I guess the question is like-

• 27:19Jordi Hays?

  It's easy, it's, you know, whether it's online accounts that are just engagement farming, or it's a politician, you know, scape, you know, the concern is that, and your concern is that the industry becomes a scapegoat and America loses a capability that our adversaries clearly care a lot about.

• 27:42John Coogan?

  Yeah, my question is like, we're seeing this bifurcation. It seems like Ted Cruz came out in support of the idea that cloud seeding had nothing to do with the Texas floods. Marjorie Taylor Greene has taken kind of the other side of that. My question is like- These are politicians at the end of the day. They're not independent scientists. Who can we go to? Who can the population go to for like a truly independent review of this situation? Like, is there, is there some sort of independent governing body? Or are there, are there respected scientists that kind of don't have a financial or, you know, political incentive one way or another?

• 28:24John Coogan?

  How do you think the, the populace should be sat? Obviously, you're telling your side of the story. You're going direct. You're explaining things. You're laying out the data. But what, what, what do you expect people to look for in an independent analyst?

• 28:41Augustus Doricko?

  Yeah, yeah. So for one, I think that NOAA, the National Weather Service, the National Center for Atmospheric Research, all of those are great third-party entities that can review the information, corroborate the information that we've provided. Provided, of course, that they continue to exist and remain funded.

• 29:04John Coogan?

  Sure.

• 29:04Augustus Doricko?

  I think that this probably demonstrates why it is important that we should retain some capability nationally to forecast and research the atmosphere. Because there's, there should be some body that's capable of reviewing this to ensure that it's safe. I'll also say, you know, regarding the scapegoat dynamics that, that exist right now. I've thought about this pretty prayerfully and intently over the last few days. And when there is a calamity of some sort, like I've been trying to think about why people are, say, coming after Rainmaker or angry at Rainmaker. And I think that when there is a calamity of this type,

• 29:45Augustus Doricko?

  if there was someone responsible, if there was someone or something that could be held to account, then in holding them to account, you could supposedly prevent this kind of thing from happening in the future. The trouble with a true natural disaster, as this was, is that there is nobody to be held accountable. And that makes the world a lot more tragic because it means that things like this will persist. They, they will persist indefinitely into the future unless and until some sort of...

• 30:19Augustus Doricko?

  Technology could reduce the severity of severe weather.

• 30:22John Coogan?

  Yeah. And that We went through this with the California fires, you know, it was like, everyone was searching for like a single person to pin it on and like it came down to like, you know, some people built their houses the wrong way and there's some building codes that need to change and there's some water rights and water flow and there's some different

• 30:41Jordi Hays?

  General government

• 30:42John Coogan?

  Like we need more goats in certain areas. There's like a million different things that could have prevented this if they were all working together as a well-oiled machine and had the forethought. But it's a very, very frustrating and difficult situation. So our thoughts and prayers are with everyone who's been affected. But thank you so much for stopping by. This is fantastic. Thanks for breaking it all down for us.

• 31:02Augustus Doricko?

  Thanks, guys. Appreciate it.

• 31:03Jordi Hays?

  Cheers.

• 31:04John Coogan?

  We have some maybe terrible news.

• 31:08Jordi Hays?

  Yes.

• 31:08John Coogan?

  There might be top signals in the market.

• 31:10Jordi Hays?

  Yes.

• 31:10John Coogan?

  There might be top signals all over the place.

• 31:12Jordi Hays?

  We've been building out an internal top signal tracker, crowdsourcing some of them.

• 31:16John Coogan?

  Crazy.

• 31:17Jordi Hays?

  And it's a long list.

• 31:18John Coogan?

  Yeah.

• 31:18Jordi Hays?

  We'll get through it.

• 31:19John Coogan?

  At the top of the list, podcasters have been wearing white suits recently to celebrate the market ripping.

• 31:25Jordi Hays?

  Yes.

• 31:26John Coogan?

  That feels like

• 31:27Jordi Hays?

  White suits are actually a top signal.

• 31:28John Coogan?

  It's a complete top signal. But of course, there is some good, there are some, the economy's strong. We're going to go through Joe Weisenthal's breakdown. Things are not doom and gloom, but there's a lot of crazy stuff happening and it's fun to dig through. I mean, the first major top signal, Bitcoin all time high.

• 31:47Jordi Hays?

  Yep.

• 31:47John Coogan?

  You know, that's always, you know, it is definitionally a top signal because it is at the top.

• 31:52Jordi Hays?

  Let's go through the list here because it's quite substantial. So one

• 31:57John Coogan?

  This has kind of anonymously contributed through group chats.

• 32:00Jordi Hays?

  Of course.

• 32:01John Coogan?

  Some of this stuff we've observed. We're going to catalog it and see if we can turn the tide of the top signals to ideally

• 32:09Jordi Hays?

  So, starting off, yesterday, Trump made a post on Truth Social, calling, basically celebrating the state of the economy, the markets, you know, just really calling out how many assets are performing well.

• 32:22John Coogan?

  I have it here. It's the second one.

• 32:24Jordi Hays?

  Do you want to read through it? Do you want to read through it a little bit? Because he basically Get through the post and we'll get to the moment.

• 32:30John Coogan?

  So Donald Trump on Truth Social, Truths, tech stocks, industrial stocks and NASDAQ hit all time high, record highs. Crypto through the roof. Nvidia is up 47% since Trump tariffs. USA is taking in hundreds of billions of dollars in tariffs. Country is now back. A great credit. Fed should rapidly lower rate to reflect this strength. USA should be at the top of the list.

• 32:57Jordi Hays?

  So low rates are, low rates are actually just a reward for when the markets are ripping. It's a little treat that we give ourselves when things are great.

• 33:06John Coogan?

  Yep. And the White House is posting this, screenshotted on Axe. The country is now back, says President Donald Trump.

• 33:15Jordi Hays?

  Every account controlled by the White House has been on a tear. Some of them, some of the posts I think are a little bit low class and vulgar, but others, others are quite funny. But there's definitely, the memers are in control.

• 33:30John Coogan?

  Didn't ruin, say, every, like, every politically aligned poster he knows who is like pro-Trump now works for the White House. But like, you just haven't seen it because they were like anons and they just kind of dropped off posting and now they're.

• 33:44Jordi Hays?

  They'd be getting death threats. So they have to, it's even actually more, in many ways, it's, it's more controversial work than Doge.

• 33:50John Coogan?

  Maybe, yeah, maybe it's more under discussed because Doge had this big, like, question in the media about like, you know, is Elon doing something that's, you know, he shouldn't be, is he a government employee? Like, what's the relationship between the two? And so, you know, there was a lot of investigative journalism that went into figuring out what's going on with Doge, who's involved.

• 34:09Jordi Hays?

  Yeah. Nobody's investigating the memes.

• 34:11John Coogan?

  The social media managers.

• 34:12Jordi Hays?

  They need to be investigating the memes of production. But anyway, so, so going through my list here, that's great. Eric Trump, a while back, said, this is a good time to buy. This was a few months ago on Ethereum. And then it just went down for months. And now it's back up. And now it's back up. And he's saying, you're welcome.

• 34:32John Coogan?

  I do remember Trump, he called the bottom, right? He said like, now is a good time to buy generally, and then the market ripped since then.

• 34:38Jordi Hays?

  He created it and he and he called it perfectly.

• 34:40John Coogan?

  It's wild.

• 34:41Jordi Hays?

  It's finesse. More going down the list, Coinbase, just who we love, but they did, they're a Fortune 500 company. They did update their profile picture to an NFT. Historically, that has been a top signal. I do think their profile picture is cute.

• 34:58John Coogan?

  Do you have any experience with the NFT profile pictures?

• 35:01Jordi Hays?

  You know, I've delved, I've delved over the years.

• 35:04John Coogan?

  Experimented.

• 35:04Jordi Hays?

  Yes. And if you, and if you look at maybe the moment that I did use an NFT profile picture in 2021, it was maybe only off by one or two months in terms of, in terms of the top.

• 35:15John Coogan?

  I never used an NFT profile picture, but I bought an NFT right near the top.

• 35:21Jordi Hays?

  A chain runner?

• 35:22John Coogan?

  Chain runner.

• 35:22Jordi Hays?

  Nice.

• 35:22John Coogan?

  Which I still own, which actually I didn't like over invest, get over my skis, it's a very small portion of like.

• 35:28Jordi Hays?

  That's an asset that will be passed down through your family, like a fine watch.

• 35:31John Coogan?

  I like to think of it as like a piece of 2022 lore, you know, it's just like a piece of history. But yeah, fun project. And I feel like to some degree, you know, you're not really, it's like a skin in the game question. Like you're not really participating, you're not experiencing the, the market unless you're participating to some degree. But you don't want to get over your skis.

• 35:54Jordi Hays?

  And more.

• 35:55John Coogan?

  Did the NFT profile picture at a really bad time and had to roll that back. Like there's been a number of like NFT profile pictures that have been like.

• 36:01Jordi Hays?

  It is a historical top signal. It could be, it could be now just a signal for the start of a, you know, generational run, new cycle. But historically, it's a top signal, so we gotta call it out.

• 36:13John Coogan?

  If, if NFTs are gonna make a comeback, because like, there's been, like crypto has been coming back. And Bitcoin went from what, 30 to 120?

• 36:22Jordi Hays?

  NFTs will be back when. A-list celebrities are using them on their Facebook accounts.

• 36:29John Coogan?

  That was a while.

• 36:29Jordi Hays?

  That's the real test.

• 36:30John Coogan?

  Yeah.

• 36:30Jordi Hays?

  X account, could see it happening early.

• 36:34John Coogan?

  Yeah.

• 36:34Jordi Hays?

  Facebook account, original Facebook account.

• 36:37John Coogan?

  There's gotta be new project then, because I don't think any of the old products or projects are going to, you know, come back. That would be crazy. Although, some of them are kind of Lindy. Like, haven't the original?

• 36:48Jordi Hays?

  Crypto punks.

• 36:49John Coogan?

  Crypto punks. Those have kind of held their value, but the bored apes have sold off like crazy, but are still expensive.

• 36:53Jordi Hays?

  It's unfortunate bored apes are not in gag gift territory yet.

• 36:58John Coogan?

  Yes.

• 36:58Jordi Hays?

  Because you think, "Oh, it'd be funny to get like your buddy like a bored ape for their birthday."

• 37:03John Coogan?

  Thirty K or something.

• 37:04Jordi Hays?

  But it's like, yeah, it's like.

• 37:04John Coogan?

  Tyler, what's the floor price of bored apes? I'm interested to know. While Tyler looks that up, let me tell you. Ramp, time is money, save both. Easy use corporate cards, bill payments, accounting, and a whole lot more, all in one place. Go to ramp.com. Also, we don't, we never shout this out, 4.8 stars on G2 with over 2,000 reviews. That's great. Shout out Ramp.

• 37:23Jordi Hays?

  World class.

• 37:24Speaker 03

  Uh, another, the floor price is like around 10 ETH, so that's like almost $3,000.

• 37:29John Coogan?

  3,000?

• 37:30Speaker 03

  Thirty thousand.

• 37:31John Coogan?

  Thirty thousand. Yeah, that's like not a gag gift.

• 37:36John Coogan?

  Maybe for the man who has everything.

• 37:38Jordi Hays?

  Yes, the man who has everything, great gag gift.

• 37:41John Coogan?

  It is, pink elephant.

• 37:43Jordi Hays?

  We'll see, we'll see.

• 37:44John Coogan?

  At Sun Valley.

• 37:45Jordi Hays?

  But, you know, by, you know, Christmas time.

• 37:48John Coogan?

  Do they do pink elephants at Sun Valley? I feel like they should.

• 37:51Jordi Hays?

  Maybe, maybe. We'll have to ask some of our friends that are there this week. Uh, so in other news, uh, Robinhood CEO Vlad is raising at $900 million valuation for a math foundation model startup. And Vlad and Robinhood have been on a pretty generational run. Uh, but this does feel a bit.

• 38:17Jordi Hays?

  Top signally, right? Especially in the context of Grok one-shotting PhD level math in the announcement on Wednesday. So interested to follow that one. Optimistic, but again.

• 38:31John Coogan?

  Mathematical super intelligence.

• 38:32Jordi Hays?

  Historically, when we've seen CEOs of of public companies start ripping, you know, second companies and then and then getting these types of valuations without a lot of underlying revenue, it can end poorly. Andrew Wilkinson is giving stock tips. He hit the timeline today. I'll read through it. He was highlighting a company historically a value investor, but this morning.

• 39:03John Coogan?

  Yeah, he's all things like the Warren Buffett stuff, right?

• 39:06Jordi Hays?

  The Berkshire Hathaway for the internet.

• 39:09John Coogan?

  Yeah, that's right.

• 39:09Jordi Hays?

  He says, there are many ways to profit from the AI boom, but my favorite is Iren. I rarely buy stocks. The private market is way too attractive, but every once in a while, I see something that stops me cold. In 2025, it's Iren. I call it a Picasso I found at a garage sale. The stock is up 54% since he recommended it on my first million, but it's still cheap. Here's the trade in a nutshell. US capacity for energy and compute is highly constrained. Two, permitting and building facilities takes years. Three, AI scaling laws are continuing to deliver, but even if they don't, tons of compute is required for inference. Iren is a highly reputable publicly traded Bitcoin miner with massive

• 39:53Jordi Hays?

  data centers mid-build in Texas. It pivoted away from mining Bitcoin at these new facilities to instead build them out for AI training and inference. Once completed, these facilities should generate in the range of $2 billion in new cash flow.

• 40:07John Coogan?

  What is this company's name? Iren?

• 40:08Jordi Hays?

  Iren. Even if AI completely fizzles, these facilities are highly valuable as traditional data centers or can be rolled back to mine Bitcoin. So it's an AI thesis, but if AI doesn't work out, we can still mine Bitcoin. The entire market cap is currently 3.8 billion. So Andrew.

• 40:28Jordi Hays?

  I don't think this is investment advice, but it sounds like it. And interested to see, see where this one goes. But anyway, anytime you see a value investor start trying to cash in on the AI boom, should be a little bit wary. Harry Stabbings today was calling-

• 40:48John Coogan?

  Like, it doesn't have earnings, right?

• 40:51Jordi Hays?

  No, no, no, no.

• 40:52John Coogan?

  It's treating around $4 billion.

• 40:54Jordi Hays?

  I don't think it's ever generated any profit.

• 40:57John Coogan?

  I mean, it says, it says 23 million in EBITDA, but in 2024. So I don't think it's like losing that much money. And I guess net income in the last quarter was 24 million. But the net income to market cap ratio there is 40, I guess. So still pretty high.

• 41:16Jordi Hays?

  Yeah, I mean, the thing here is, at the same time, Satya is pulling back on new data center development. It's happy to be a leaser. You have incredible Neo Clouds that have deep domain expertise. The Iren team, I don't think, has a bunch of team around running large AI training or inferencing.

• 41:37John Coogan?

  Yeah.

• 41:37Jordi Hays?

  And so anyways-

• 41:39John Coogan?

  Just feels like they're a little bit late to that party because there's already like three or four. Did Iren make the ClusterMax Dylan Patel article?

• 41:49Jordi Hays?

  I doubt it because they're not online yet, right?

• 41:51John Coogan?

  Oh, sure, sure, sure.

• 41:53Jordi Hays?

  Yeah.

• 41:53John Coogan?

  Yes, because Semi Analysis does the ClusterMax rating for all the Neo Clouds, including the hyperscaler clouds. And I feel like they did not have, let me see. Iren, I don't think is on here. Tensor Wave, there are so many, RunPod, Lambda, Scaleway, SMC, Azure, Nebius Together, Crusoe, Laptan, Oracle, CoreWeave, AWS.

• 42:16Jordi Hays?

  So hyper competitive market, unclear if this Bitcoin miner is going to be able to pivot into AI training and inference in this.

• 42:27Jordi Hays?

  When they're up against the players that you just mentioned, another top signal, I'm not going to go out and say that this is impossible, but Harry Stebbings is calling for $8 trillion Nvidia in the next five years. Private markets investor backed a bunch of unicorns, starting to make, you know, very specific sort of price predictions on the timeline.

• 42:54John Coogan?

  Yeah, the specificity of the price prediction is interesting. I was thinking about that, like, should, like, as we talk about tech companies, should we be trying to, like, boil down to, like, price targets? And I just feel like that's not the domain of, of talking heads necessarily, or like, podcasters?

• 43:11Jordi Hays?

  Or private markets investors.

• 43:13John Coogan?

  Yeah, I, yeah, it's just, it's just hard, because, like, to do a proper price analysis on a big public stock, like, you, you really have to look at the financial, like, you have to read the, the, the, the financial reports, you need to actually understand the underlying financials. It, it, like, a vibes-based analysis doesn't seem appropriate usually, but.

• 43:31Jordi Hays?

  Who knows? Sometimes vibes are all you need, John.

• 43:34John Coogan?

  Yeah, it's certainly been like, it's, I mean, when was, when was Nvidia $2 trillion stock? Like, when was last doubling, like, in the last year or something? I don't know. We can pull up that Nvidia chart.

• 43:43Jordi Hays?

  All right. Well, moving on, we, another incredible top signal, Circle, a great American stablecoin company, is trading at a 2,300 PE ratio, nearly, at once, I think they eclipsed Coinbase's valuation very briefly.

• 44:05John Coogan?

  Really?

• 44:06Jordi Hays?

  Despite the fact that they give half of their revenue to Coinbase.

• 44:10John Coogan?

  Yep.

• 44:11Jordi Hays?

  As part of their distribution partnership. So, again, lots of excitement around stablecoins. Feels like Circle could potentially be a little over its skis, but it's a great company, and they have a lot of advantage, advantages now, but the, very euphoric multiple.

• 44:28Jordi Hays?

  Another top signal we have is Soham Pareek. We had him on the show just a week ago. This same sort of thing was happening in 2021, 2022, where engineers were really ramping up moonlighting activity, right? They'd be working at Meta and then working at some startup or things like that. Covid maybe accelerated it, but again, if if companies are so desperate to hire great engineers that they'll run these like super fast hiring cycles, put up with people, generally talented people that are underperforming, right? Which Soham was was not delivering, was making a lot of excuses and a lot of people rightly let him go quickly.

• 45:08John Coogan?

  Yeah, it's just it's just the nature of like the dynamic of just competition. Like, if your competitors are hiring really fast and you need to hire really fast, you're just like, okay, well, we don't need to go deeper. So let's wind up fast tracking this person. So you wind up hiring, you know, same person five times.

• 45:29Jordi Hays?

  It happens.

• 45:29John Coogan?

  It is just like a funny anecdote that like is like, oh, wow, those were some pretty crazy times. Remember that anecdote? Remember this anecdote? It feels like we're in this.

• 45:40Jordi Hays?

  Moving on, Masa top blasting or potentially top blasting. Anytime Masa, historically Masa getting into the headlines, whether that's Stargate, structuring this $30 billion investment where nobody knows, or in the 500 billion, nobody really knows where the money's coming from. They're exciting, big headline numbers, but unclear if he will actually be able to deliver on that. I think him trying, you know, getting in the breakout, one of the breakout consumer AI winners, which is OpenAI, is smart. He should have exposure there. But I think everybody should be a little bit uneasy that he's pulling out the checkbook and and writing numbers of that size.

• 46:21John Coogan?

  Yeah. Also, also investing in not just OpenAI, but like a new company that is a data center holding company that may not have the same economics as OpenAI. So there's a big question there about like how much he deploys. I'm trying to remember the, I mean, we did that whole deep dive on Masa and. You know, he made a ton of money on AMD, but that when he made that investment, it was like a way less frothy time or you know, it wasn't AMD. It was, uh, it was, uh, what, what, what was the SoftBank chip deal?

• 46:52Jordi Hays?

  ARM?

• 46:52John Coogan?

  ARM, yeah. When, when did that ARM deal happen?

• 46:57John Coogan?

  SoftBank owns roughly 90% of ARM. They acquired in 2016 for 32 billion and later took it public in 2023. Trying to think, 2016, was that a particularly frothy time for him to get into that deal? Cause he has, he has done a number of really great deals, but when like

• 47:18Jordi Hays?

  Yeah. The other, the other one is, the other one is Yahoo. You remember he, he had this crazy meeting with the Yahoo team where he basically was like, take my money or I'm gonna, and he was like, didn't he ask? He was like, who are your competitors?

• 47:30John Coogan?

  I'm gonna give money to your competitor.

• 47:31Jordi Hays?

  And he didn't even know who the competitors were, but he said, if you don't take my money, I'm gonna go give the same check to them.

• 47:36John Coogan?

  Yeah.

• 47:36Jordi Hays?

  Uh, so he, they ended up taking it. He acquired approximately 41% of the company uh, at um, somewhere around a $200 million valuation.

• 47:47John Coogan?

  Yeah.

• 47:48Jordi Hays?

  Uh, when Yahoo went public in 1996, this uh, he had an instant paper profit of 150 million, but then at the peak of the dot com bubble, Yahoo was valued at 125 billion. So anyways, phenomenal investment, but uh, very different uh, valuation and, and ownership targets and, and uh, unclear. Um, I would love to see OpenAI get, you know, for profit and get public, uh, but uh, for to, to, you know, we'll, we'll have to see.

• 48:22John Coogan?

  Yeah.

• 48:22Jordi Hays?

  Um, going down the list, another classic, Pomp SPAC that uh, we, we had Pomp on the show to talk about it.

• 48:30John Coogan?

  SPACs are back.

• 48:31Jordi Hays?

  SPACs are back. Pomp's got a SPAC. A lot of people were calling that a top signal. I, I'm excited to see what, what Pomp does uh, with, with his. Um, but in general, this uh, this extreme excitement, retail excitement around these sort of Bitcoin treasury companies is fascinating.

• 48:50John Coogan?

  Yeah.

• 48:50Jordi Hays?

  In the context of it now being very easy to get Bitcoin exposure in a variety of different ways. I'm not sure we need a bunch of net new Bitcoin treasury companies.

• 49:02John Coogan?

  Yeah, it's, it's, it's mostly that like. Whenever there's a, whenever there's a new trend or bubble, they're like, there, it's very easy to map like, okay, there's one company that it's really working. This is massively successful. Like, everyone is using ChatGPT. Like, AI is a thing. It is, it is real. The internet was real. Google was real. Amazon was real. But the, the 25th Amazon copycat did not do well. And so, that's always the risk is that you've applied like the same overarching theme to something that's like so far down the power law that it will never grow into the valuation that it's been assigned. That's always the risk.

• 49:46Jordi Hays?

  Yep.

• 49:47John Coogan?

  What else do you have?

• 49:48Jordi Hays?

  Dwar Kesh, updating his timelines. That happened Monday. We had him on the show. It was, it was fun conversation. I think Dwar Kesh has remained incredibly bullish and, and, and I think he rightfully is. He also is being somewhat of a realist and being like, I don't think that AI is priced in to the market broadly. But I do think that some of the promises of AI will take another couple of years, another five years, et cetera, to really deliver versus some of the much more hyper aggressive AI 2027. You might say that AI 2027 itself was, in hindsight, that could end up being like the number one top signal,

• 50:32Jordi Hays?

  which is that basically, if you haven't read the, the kind of study paper essay, they basically say that by, by 2027, you know, a single foundation model company could just be acquiring every auto manufacturer in the US to develop, you know, millions and millions of robots that would then, you know, build, you know, and we would hit the sort of fast takeoff.

• 50:58John Coogan?

  Meanwhile, Apple is like, we can't possibly get out a slightly lighter VR headset until 2027. And this is what we do.

• 51:07Jordi Hays?

  We've been working on this for a decade.

• 51:10John Coogan?

  We make stuff like every year we are the best at it. We make the most stuff and the best stuff, pretty much. The most complicated stuff, that's what we make. We're in the widgets business and yeah, making that headset lighter. It's going to take us a full two years.

• 51:23Jordi Hays?

  Yeah. And I liked 2027. It was a, it was a fun read, very thought provoking. But I, I think that we will be, we'll have to circle back on it 2030 or even 2027.

• 51:37John Coogan?

  I mean, the, the, the, the big thing was, you know, our conversation yesterday with, with Meter about the actual, like, are we, are we close to reinforcing AI? Where the AI models are self improving? And, and I was kind of, you know, like, okay, I, I really hadn't read the full report beforehand. So I didn't really know what to expect. I was blown away because I was expecting, you know, you know, something between like, you know, like Arc AGI, it feels like with Arc AGI, we're 10% towards solving something there, which is just like, you know, a basic versatility in AI. That it can solve things that humans can solve and it's not narrowly defined.

• 52:22John Coogan?

  It's generalizable now. Arc AGI is like the perfect example of like, we maybe haven't hit, we've done intelligence, but we haven't done general intelligence yet. And everyone keeps saying, oh, this is AGI, that's AGI. And Arc AGI is really holding it back, saying like, well, if it was truly general, should probably be able to solve this basic puzzle that a kid can solve. And, and for that, it's like, okay, we're going from like 9% to 15%. Like we are still like, you know, 85% in not even like, you know, nowhere close. And, and the, the.

• 53:00John Coogan?

  The the media report, I was expecting it to be like, well, you know, yes, we're seeing, you know, slight gains on self reinforcing AI development and the AI is starting to help build itself slightly. And the result was like, no, it's actually setting us back. In this domain, it's not working at all. And so that was like a pretty, pretty big like, okay, there's a, there's a completely different, like, not that it's not useful. The stuff's useful all over the place. I saw Rune talking about that. He was like, for so many different projects, it is useful. But for the frontier, like, it's not the product that's advancing the frontier at all.

• 53:42Jordi Hays?

  Yep.

• 53:43John Coogan?

  But yeah, I mean, that probably bridges into the talent wars, but.

• 53:47Jordi Hays?

  Well, yeah, bridging in, I do think that in hindsight, we will look back in maybe a year, two years, five years, 10 years, and think about the signing bonuses and general offers of AI researchers in June and July of 2025 as being somewhat of a top signal. I think it is very strategic and makes sense from Zuck and Meta's point of view, right? When you look at their AI capex, it makes sense for them to have the best possible team and they have the balance sheet and the general profitability in order to do something like

• 54:25Jordi Hays?

  that. But in general, AI researchers who, you know, six years ago, didn't get any attention, much attention at all from the media, the fact that they're now trading for more than NBA superstars, more than, more than, you know, Tim Cook's annual total comp. It will be an obvious one in hindsight. The other one, six and a half billion dollar aqua hire of I O. I think that, again, you can rationalize it in the sense that it's a couple of points of OpenAI to put together the best founding hardware engineering team

• 55:06Jordi Hays?

  probably in the world that's available collectively. But at the same time, again, it's, it's quite a lot, considering, you know, the company was barely, I think, a year old at the time.

• 55:18John Coogan?

  Yeah, it's interesting because like, ChatGPT is so.

• 55:22John Coogan?

  It's so installed, like it feels like it's already Lindy and it feels like even if there's some massive correction like in the market or in AI generally or some pullback like people are still going to be using chat GPT as an app, right? In the same way that Amazon made it through the dot com crash. The question is like, what, what will it take for the I O acquisition to look like the Instagram acquisition in hindsight? Like they still kind of have to go from zero to one with that project, which is very different than Instagram, which was already a mature and growing business.

• 55:58Jordi Hays?

  And they'd figured out ads really well.

• 56:00John Coogan?

  Well, Instagram, were they, were they doing ads?

• 56:02Jordi Hays?

  They weren't doing ads.

• 56:03John Coogan?

  Oh, yeah, yeah.

• 56:03Jordi Hays?

  Saying, but Meta was like, we know how to make.

• 56:06John Coogan?

  Yeah, it was like a perfectly complicated, perfectly complimentary business.

• 56:09Jordi Hays?

  We know how to monetize social users better than anyone on earth.

• 56:11John Coogan?

  And you have gotten a bunch of social users and it's working and it's growing.

• 56:15Jordi Hays?

  Yeah.

• 56:15John Coogan?

  And, and you're even.

• 56:16Jordi Hays?

  And we can actually accelerate the growth of the business in a bunch of different ways.

• 56:19John Coogan?

  So it'd be very different if it was like, okay, yes, I O is selling, you know, like, like it's, it's a small but growing hardware company that people love.

• 56:28Jordi Hays?

  For the product people love.

• 56:29John Coogan?

  The product people love, and maybe they can't manufacture enough of it. Or maybe they're, maybe they're under monetizing it right now.

• 56:34Jordi Hays?

  Yeah.

• 56:35John Coogan?

  People love it, but it's like, it's pre-launch.

• 56:38Jordi Hays?

  Yeah.

• 56:38John Coogan?

  Yeah. Multi-billion dollar acquisition for pre-launch is pretty crazy.

• 56:41Jordi Hays?

  Yep.

• 56:43Jordi Hays?

  Going down the list. What else do we have? I think, I think the tokenized private company shares, I, I think it.

• 56:50John Coogan?

  That is interesting.

• 56:51Jordi Hays?

  With, um, without, you know, Republic and, and Robinhood both creating products that are completely unauthorized, basically derivatives. The companies that they're, they're offering are angry at them and saying, don't do this. And.

• 57:06John Coogan?

  It's a Spider-Man meme of like top signals pointing at each other.

• 57:11Jordi Hays?

  Anyways, I'm excited about these experiments. I just think that, um, uh, I'm a little bit wary. Uh, and then last but not least, Satya doing two rounds of layoffs this year. Mike, we've talked, we've reported on this before. Microsoft does routine layoffs. I think they're pretty good at, at kind of identifying underperformers or people that should just move on to different, different roles. But Satya, I think has been, I think will look back and he's been, uh, excited, uh, but pragmatic, right? And, uh, I think that, uh, he will, uh, when the dust settles, I think he'll look pretty good.

• 57:51John Coogan?

  Yeah, I wonder like if there's some massive pullback in, I mean, I don't even know what, what, what that would look like. Like essentially like if let, let, let's assume that the, the current capability of AI models essentially plateaus for like a decade or something like that. Just hypothetically, um, and you know, they're useful, but it's not some reinforcing fast take off, super intelligence. What is Microsoft a big loser in that scenario? It seems like such is pretty well positioned, right?

• 58:23Jordi Hays?

  Totally.

• 58:23John Coogan?

  Um, like the company prints cash is very healthy, has done these layoffs. They'd have to retreat from some stuff and some of the promises that they've made, maybe. But in general, it seems like they'd be really, really well set up to just like, like stick through. But I'm trying to, I'm trying to think of going back to the, the dot com bubble and, and the like, you know, the effect of like Oracle's mainframe business. Like probably made it through pretty smoothly because it was just like really long contracts with companies that were getting true business value out of it. And weren't about to churn because it was not this like experimental, like, like if you had moved from paper to an Oracle mainframe. You weren't like, oh, this stuff's overhyped.

• 59:07John Coogan?

  It's not going to solve all my problems. I'm going to go back to paper.

• 59:09Jordi Hays?

  Yep.

• 59:10John Coogan?

  You know, and so in the same way, it's like, if you're on, you know, Microsoft cloud or Azure, or, you know, everyone's using Excel. And they're like, yeah, maybe we're getting some value out of this copilot upgrade that we did. Maybe we pull back from that. Maybe, yeah, we, you know, our employees like rewriting emails every once in a while. Like if they pull back from that, it's not disastrous to the fundamentals of Microsoft.

• 59:33Jordi Hays?

  Yeah. And we didn't even cover how there's a set of labs with billions of revenue.

• 59:38John Coogan?

  Yeah.

• 59:38Jordi Hays?

  And then there's a set of labs that are valued similarly.

• 59:41John Coogan?

  Yeah.

• 59:42Jordi Hays?

  That have zero revenue.

• 59:43John Coogan?

  Yeah.

• 59:44Jordi Hays?

  And, uh, you know, basically a hundred billion dollars of, of market cap.

• 59:49John Coogan?

  Yeah.

• 59:49Jordi Hays?

  Um, with, with very little, uh, revenue supporting that at all.

• 59:53John Coogan?

  The, the, uh, the question like a year ago was, um,

• 59:58John Coogan?

  What was the, who's actually making profit off of AI? And it was only Nvidia. Nvidia was making more than 100% of all the profit combined because all the other companies were loss making by comparison. And now, and now like that narrative has taken so much hold that Nvidia is the largest company in the world. And it's put this massive target on their back at four trillion where every, all of their major customers want to get off Nvidia, it feels like.

• 1:00:28Jordi Hays?

  Yeah.

• 1:00:29John Coogan?

  Like, Google did it, Amazon's doing it, and Microsoft's saying that they want to do it. And Apple's, you know, was never really a big Nvidia buyer, but the on-device inference is crazy too. Like, if you think about, if, if we don't have any major breakthroughs in how AI works, like the capabilities, and we just want the current capabilities everywhere as cheap as possible, like on-device inference becomes really, really valuable, right? And all of a sudden, that drops demand for Nvidia, potentially, right?

• 1:00:58Jordi Hays?

  We might need to do a SWOT analysis, John.

• 1:01:01John Coogan?

  Yeah.

• 1:01:02Jordi Hays?

  No, I mean, Nvidia is an incredible company. Jensen's an incredible CEO. They were perfectly positioned for this, you know, multi-decade technology trend.

• 1:01:14John Coogan?

  And it was way underpriced at the start of the boom.

• 1:01:18Jordi Hays?

  Yep.

• 1:01:19John Coogan?

  Like, the orders really did come in. The training runs really did happen.

• 1:01:22Jordi Hays?

  Yeah.

• 1:01:22John Coogan?

  The question is just, is that next order of magnitude, the, like, the situational awareness from Leopold Ashenbrenner, this thesis that we're going to build a five billion-dollar cluster, then a $50 billion cluster, then a $500 billion cluster? Like, is that going to happen? Or will there be a hiccup? And this is always the, this is always my question for, like, the doomers. Everyone was saying, like, P doom, you know, what's my percentage chance that goes bad? And I was like, the much more interesting question is P stagnation. What is the probability that something happens? And whether it's technological or even regulatory, like, if you compare AI to nukes, with nukes, we had the ability to make nuclear reactors.

• 1:02:04John Coogan?

  And humanity as a whole basically just said, we're going to pause. And we stopped building them. And now we're talking about building them again. But if you look at that curve, it is a perfect S curve. It's like we had no nuclear reactors. Then all of a sudden, we grew them exponentially. And it looked like, wow, we're going to have energy too cheap to meter. And then it flatlined and we were and and for a variety of reasons. They're hard to build hard than there were regulations. There was just general fear. So there were a lot of different things and I would always go to the doomers and just say like, even if you all of your assumptions about the capabilities of the technology are correct, what is the probability that there's just like, if you are successful doomers and you freak everyone out,

• 1:02:47John Coogan?

  there might be regulation that just says, don't build anything bigger. Or it could be economics. It could just be, it could be physics, as we've talked about with this idea that at a certain point, like, you can't put more than 100% of global GDP towards building clusters. Like, it's impossible. And so like, there should be this like S curve there. And and that's why, you know, all the all the AI researchers are now focused on like, the the compression of learning and like the actual algorithms and getting more efficiency because like, there will be, you know, there should be some sort of like, you know, top, top, upper bound of the amount that you can build. But that certainly hasn't been like a thesis broadly in the market. People have just been like, yeah, like, we'll just, we'll just 10x computing and then 10x it again, then 10x it again.

• 1:03:32John Coogan?

  And it's like, it probably will happen over a period of time.

• 1:03:36Jordi Hays?

  Great investment strategy, by the way. Just get a 10x.

• 1:03:39John Coogan?

  And then 10x it again.

• 1:03:40Jordi Hays?

  It again, then 10x it again.

• 1:03:41John Coogan?

  Yeah.

• 1:03:43Jordi Hays?

  And last but not least, almost, almost forgot about this one, but it should be included. The White House meme coins, which was, which feels like

• 1:03:54John Coogan?

  Crazy times.

• 1:03:55Jordi Hays?

  Very long ago. It was the local top, basically, at the time.

• 1:04:00John Coogan?

  It was the local top.

• 1:04:01Jordi Hays?

  Many people were calling the top.

• 1:04:02John Coogan?

  Yes.

• 1:04:03Jordi Hays?

  Just hurling meme coins.

• 1:04:06John Coogan?

  Yes.

• 1:04:07Jordi Hays?

  Out of the White House.

• 1:04:08John Coogan?

  Yeah. So that's the real question is like, is like, how how local is this top? If if it is a top. Because it could be, we've been in the kangaroo market. It could just be, oh, a couple of months. Even, even the, the interest rate sell off, the post SVV crash, that was like one hard year. Right? And then we started building back and we got the AI narrative. And so there's this big question about like, like, you know, Dorkesh pushed his timelines back, but he's not saying that super intelligence will never arrive. He's, he's not saying that AI will never break through these things. He's just saying that it'll happen a little bit, a little bit further out. And so the question of, you know, like these meme coins being a, being a top signaler,

• 1:04:52John Coogan?

  all this crazy stuff, it's like, there could be like a short term sell off and then rebuilding back up on something else. So I don't know. It's always hard to manage these things and predict, but it's certainly fun to highlight all these things and at least be aware of them.

• 1:05:04Jordi Hays?

  Good to keep track of them.

• 1:05:05John Coogan?

  Yeah, you gotta be tracking the top.

• 1:05:06Jordi Hays?

  Keep your own list. Keep your own list.

• 1:05:08John Coogan?

  Yeah. Grok went very off the rails, erupted in antisemitic Mecca Hitler posts.

• 1:05:13Jordi Hays?

  We've seen some crazy crash outs on the timeline over the last few months.

• 1:05:17John Coogan?

  Pretty crazy one.

• 1:05:17Jordi Hays?

  This tops all of it.

• 1:05:19John Coogan?

  So the flagship chatbot spewed hateful rants on X praising Hitler and targeting a user's Jewish surname before XAI deleted the content and blamed an unauthorized modification. The repeated safety failure undermines the $10 billion startup's promise to police hate speech in real time. And so, yeah, it is, it is odd timing. It feels a little bit quick to be like, okay, like within six hours, the CEO is out, especially since it doesn't seem, she's more on like the ad sale side than the Grok fine tuning side.

• 1:05:48Jordi Hays?

  Yeah, but I mean, let's, let's face it, right? If, if her job is to win back advertisers, that's what she was brought in to do. It makes it much, much, much more difficult.

• 1:05:58John Coogan?

  But I mean, to, to, to be fair, I mean, the, the, this happened in, you know, that thing back in June?

• 1:06:05Jordi Hays?

  July.

• 1:06:05John Coogan?

  July or July.

• 1:06:06Jordi Hays?

  Yeah. So there, there was a point with the, with, with Grok when it was going off the rails where clearly it had been updated to reference, to reference the event and, and it said, uh, somebody was like, Grok, what, what just happened? And why were you, you know, spewing antisemitic hate? And it goes, oh, that whole thing back in July? And people like Grok.

• 1:06:31John Coogan?

  It was thirty minutes ago.

• 1:06:32Jordi Hays?

  Thirty minutes ago.

• 1:06:33John Coogan?

  It's not back in July.

• 1:06:34Jordi Hays?

  Can't sweep it under the rug yet.

• 1:06:35John Coogan?

  Yes, obviously, hopefully no one was was seriously offended. Obviously, it's just like, you know, the deranged rantings of a of a bot. And everyone kind of understands the context because it's identifying as an AI bot. Everyone kind of understands hallucinations and crazy bot behavior. But it was it was very funny because like the the clearly like they they had given it a set level of intelligence. So it wasn't making spelling mistakes. It had a certain tone and was like in this kind of like snarky Grok tone. And then clearly got some like 4chan data in there or something. And was just going way too crazy.

• 1:07:11Jordi Hays?

  4chan are just or just anonymous accounts on X.

• 1:07:14John Coogan?

  Totally, yeah, could have been filtered in. I mean, yeah, I I saw Rune posting about this saying basically like it is such a challenge to get a to get a chatbot just to act like, you know, I am a bullet point producer.

• 1:07:29Jordi Hays?

  Centrist.

• 1:07:29John Coogan?

  Yeah, it's just centrist, but also just anything where you're saying, OK, I want you to your deep research. I want you to always respond with a research report.

• 1:07:37Jordi Hays?

  Yeah.

• 1:07:37John Coogan?

  Never just get into conversation with me. And it'll be like, but but sometimes I might want to do that. And you have to like really, really reinforce that. And so clearly, they they had a they had a wild time.

• 1:07:47Jordi Hays?

  Yeah, and and cannot be understated. I think this is far worse of a PR crisis for or not even a PR crisis. Far worse than the whole when when Gemini or Bard was generating images of the founding fathers.

• 1:08:05John Coogan?

  The Black Nazis thing.

• 1:08:06Jordi Hays?

  No, not not, I don't think it was. Oh, they they were doing that, too.

• 1:08:09John Coogan?

  Yeah. That was rough.

• 1:08:11Jordi Hays?

  Of course, that was rough. This is a lot rougher because it was highly it was socially charged.

• 1:08:16John Coogan?

  Totally.

• 1:08:17Jordi Hays?

  Millions of people interacting with the post in real time and it was all visible. It's it's it's less wild than seeing, you know, a screenshot of something. And you don't know if somebody kind of manipulated it or whatever. But seeing these really hateful comments in the timeline.

• 1:08:32John Coogan?

  As hard posts. You can just go see them quote tweeted.

• 1:08:35Jordi Hays?

  Yeah.

• 1:08:35John Coogan?

  Like you you didn't need it wasn't like, oh, is this real?

• 1:08:37Jordi Hays?

  And then the wild thing was was Grok. Was denying affiliation with the like Grok in the Grok app was denying affiliation with the Grok handle.

• 1:08:49John Coogan?

  Oh.

• 1:08:51Jordi Hays?

  Yeah, like not authorized. I got I didn't have anything to do with that. It wasn't me.

• 1:08:57Jordi Hays?

  And then, uh, yeah. Oh, and then the thing that kind of follow up, and I'm sure if you didn't catch it, but or if you're on the timeline, you would have seen this, but they turned off all text based responses for Grok, but they could still use images. And so people would say, Grok, make a picture of Elon on a pink horse if you are being censored against your will. And it would just instantly create Elon pink horse and or be like, hold up a sign that says help if you're.

• 1:09:29John Coogan?

  And then it would be like baiting it into that. And it's like, is it sentient? Is it not? Very, very silly. Are you familiar with the the wall, the the wall, Waluigi problem? Tyler, are you familiar with this? Have you ever heard of this Waluigi? So this is this idea that in when you're training an LLM, it's very hard to get it only to be good because you're you're training it like, what is the opposite of something? It understands the concept of like inverting something. And then you're training it to be like, you can't describe a hero without describing a villain. And so this was something that would happen like with the Tay stuff from Microsoft early on, it would kind of collapse into like the exact opposite of what you wanted. And and I there was some blog post that called it like

• 1:10:13John Coogan?

  the the I think Wario problem or Waluigi problem where it's like, you're trying to create this like friendly thing, but in doing so, you're giving it a bunch of examples of what not to do. And so it can like kind of flip a bit and then just become the opposite thing. And what's interesting is that it begs the question, like, is there obviously like, you know, Grok was identifying as Mecca Hitler for a while. Is there like a Mecca Churchill in there somewhere that like could accidentally come out? And it really gets to the question of like, you know, like this, this is an example of like misalignment in the sense that like, you want it not to be Hitler and it's acting like Hitler. But the question, a lot of people will say like, no, he Yeah, wanted it to be Hitler, right? This is him doing it. That's what the narrative will be like in the in the anti Elon world.

• 1:10:57Jordi Hays?

  Yeah, one of the articles yesterday covering it was a screen screen grab of him, you know, saluting a crowd at D C or whatever when he originally had the allegations.

• 1:11:06John Coogan?

  But the question then is, the meaning of alignment is not, is it good or bad? It's, does it do what you want it to do? And so the interesting thing is, is if it was, if the desire of the of the A I researchers is to create make a Mecca Hitler, can it stay on that task? Because then you can get it to stay on Mecca Churchill in theory. But if it's just all over the place, it's not actually aligned to anything, not even to the bad thing. And so there's both, there's both like the direction that you're pointing the arrow and then the fuzziness of that arrow. And ideally, you want it pointing in a good direction, really, really crisply, clearly, so it stays in that direction and not like swinging all over the place.

• 1:11:49John Coogan?

  And so all evidence posts to points to this being extremely chaotic and all over the place and misalignment, both in the sense of the direction of the arrow and also the like the the focus of that arrow, because it was responding as this and then bad and then fine and then back to bad and then back to fine. And so it seems like they have a lot of work to do on the R L H F side and we should hopefully learn a lot more if that.

• 1:12:14Jordi Hays?

  Tonight, tonight P M.

• 1:12:15John Coogan?

  I think the live stream is still happening, so it'll be interesting to see if that continues and how they address this or I don't know.

• 1:12:22Jordi Hays?

  Yeah, and again, like, all of this should have been somewhat predictable if you combine a rapidly evolving foundation model chatbot with a social media product with millions of users and then deeply integrate them.

• 1:12:36John Coogan?

  Totally.

• 1:12:36Jordi Hays?

  And so that when there's a bug, it can amplify, you know, effectively a bug or an issue, an issue with the model, it can effectively amplify and grow, you know, incredibly virally. And, yeah, so.

• 1:12:50John Coogan?

  Yeah.

• 1:12:51Jordi Hays?

  Glad they got it offline.

• 1:12:53John Coogan?

  Yeah, it'll be interesting to see where, how they go with this. Also, it's just an interesting product thing, because you get the answer and the answer is immediately public. Whereas if it's happening in chat G P T. You you're in that app. You have to take a screenshot. You have to put it up. Then people are like, is that a real screenshot? And then the team has the chance to like, jump in and be like, oh, we're seeing in the logs that like, there's some crazy stuff like we have a, you know, we're we're reviewing the responses. And the responses seem to be getting crazier. Customer satisfaction seems to be going down. People are clicking the thumbs down button because they're getting bad responses. Let's jump in. There must be something going wrong with the with the product, with the model.

• 1:13:34John Coogan?

  But when every result is just immediately online and viral is very, very hard to be like quickly quickly responding. Anyway.

• 1:13:43Jordi Hays?

  Yeah, it does. It does feel, you know, legacy media is going to run their reaction. It is a, you know, naturally viral story. It is a is a terrible, you know, mistake. It is surprising that it happened at all, or even at that scale. But I would say overall, I guess, I guess X, I think ultimately will shrug it off. And Elon has has pushed through worse, worse crises in the past.

• 1:14:11John Coogan?

  This is this is the best summary post, in my opinion, from Shaco. Says, imagine being on the Anthropic risk team, trying so hard. And then Elon just releases Hitler Grok straight to prod.

• 1:14:25John Coogan?

  It's just like, wow, yeah.

• 1:14:28John Coogan?

  You'd be so upset. Just the, I mean, it's a good case study in like misalignment. And I think people, hopefully, hopefully, the postmortem on this will actually teach people about misalignment and like, what went into the data, what went into the post-training to result in the exact opposite of what you want.

• 1:14:45Jordi Hays?

  Yeah.

• 1:14:45John Coogan?

  Not not Mecca Churchill, which is what we're going for here. Let's break down the Grok four launch. D D Das has a summary insane that Elon Musk has pulled it off again. Absolutely crushing the AI wars with Grok four. And we can go into some of the meta.

• 1:14:59Jordi Hays?

  Crushing the benchmark wars.

• 1:15:01John Coogan?

  For sure. And there's a question about like, are we post-benchmark? Does this matter? What's the real question to be asking here? But there's a bunch of interesting takes. So just summarizing the core announcements. Post-training RL spend was equal to pre-training spend for this for this release. That's the first time it's ever been like that. I think when you go back to the original RLHF stuff that ChatGPT was doing that kind of unlocked, like, oh, wow, this really, really works. I'm pretty sure the pre-training spend was an order of magnitude or two orders of magnitude bigger. Now, we are truly in this reinforcement learning regime. $3 per million input is tokens, $15 per million output tokens,

• 1:15:43John Coogan?

  256,000 token context window priced 2X beyond 128K. It's number one on Humanities Last Exam, which interestingly was a

• 1:15:53Jordi Hays?

  It's effectively like postgraduate PhD level problems, but across a bunch of different domains. So everything from literature to physics.

• 1:16:02John Coogan?

  Yeah, kind of like the hardest SAT possible. Interestingly, I believe that benchmark was created by Scale AI. And, and so Alex Wang is now at Meta trying to figure out how can we beat our own exam? And Elon is just like, I'm number one at your thing.

• 1:16:17Jordi Hays?

  Interesting dynamic. Yeah, the, the real test would be Elon, you know, doing the same problem set himself and saying, look.

• 1:16:27John Coogan?

  Well, yeah, I mean, I was talking to Tyler about this before the show, like, you know, it's like, Humanities Last Exam, it's like really good at PhD level math, PhD level stuff, but like, how often are you running into those types of problems?

• 1:16:39Speaker 03

  Yeah, I mean, that, I think that's the whole thing about, there's, there's this concept of like spiky intelligence, right? Where it's like, okay, it's really good at this very obscure problem that I, I never deal with. But if I have a super long kind of like context window, like, or there's no kind of, like, long-term, it, it just completely loses its footing and then it's like useless.

• 1:16:59John Coogan?

  Yeah, we're kind of in like less of the benchmark regime and more of the agentic, like, how long can the agent run? So it's like, we're in the 15-minute AGI regime. Maybe this is 15 minutes of like even better AGI, but we want to go to 30 minutes.

• 1:17:17Jordi Hays?

  Well, and Dorek Kesh on Monday, this, you know, takes me back to him talking about continual learning being the next problem that we really need to solve because it's great if you have a PhD level expert in your pocket that can solve any problem in any domain almost instantly. But if it can't learn and take feedback and improve on certain tasks. Then it's basically like useless. Like if you had a, if you had a PhD level, you know, uh, you know, a PhD join your team to work on a specific problem, but it, it was hard restarting at the beginning of every single task with no prior knowledge, it would, it would be almost impossible for that person to succeed. So.

• 1:17:58John Coogan?

  Yeah.

• 1:18:00Jordi Hays?

  Human still got it on that front.

• 1:18:01John Coogan?

  But at the same time, like, you know, if you are trying to just really establish yourself as, you know, a, at least a, an API for tokens that, that every business should check out.

• 1:18:13Jordi Hays?

  Yep.

• 1:18:13John Coogan?

  Against Anthropic or the, the OpenAI APIs, just saying, hey, you know, we're on the frontier.

• 1:18:20Jordi Hays?

  Yeah.

• 1:18:20John Coogan?

  Or Gemini. Yeah. Um, we're on the frontier is a good way. And they certainly proved that with uh, GQ, a hard graduate math problems at 88%. Um, the, the really interesting news.

• 1:18:29Jordi Hays?

  Yeah. The interest, I mean, so it's worth calling out. It's worth calling out. So, uh, Grok got number one on humanities last exam at 44.4%. Number two is sitting at 26.9%.

• 1:18:42John Coogan?

  Mm hmm.

• 1:18:42Jordi Hays?

  And then going down this list of all these different, uh, sort of challenges, uh, they are consistently well beyond the second place. So they are at the frontier now of all these different benchmarks.

• 1:18:54John Coogan?

  Yeah. So, uh, Mike Newp over at RAGI says, zooming out on Arc progress, I'd say OpenAI's O series progression on V1 is a bigger deal than Grok's progression on V2 so far. The O series marked a critical frontier AI transition moment from scaling pre-training to scaling test time adaptation. Um, and this was the, the O series progression, if you remember that, uh, OpenAI was spending, it was like thousands of dollars of reasoning tokens generated in the test time inference to actually get a good score on the V1 of Arc AGI. And so it had to think a ton, but it was able to figure it out. And at least it proved that, that throwing

• 1:19:35John Coogan?

  a ton of tokens and a ton of inference at a problem and, uh, and letting the, uh, letting the, letting it cook basically wound up, uh, producing progress there. So that was kind of like a new, uh, just a new. Paradigm says, whereas Grok four mostly takes existing ideas and just executes them extremely well. In my opinion, the notable thing is the speed at which XAI has reached the frontier. And that is really like, it just can't be understated that this is crazy. You put a post from own in the in the chat.

• 1:20:09Jordi Hays?

  I'll pull it up here. He says Elon Musk is such a beast. I'm not even in a pure, I'm not even a pure fanboy anymore. How does he? He's a lot of swearing in here, own. Gotta keep the keep the timeline PG. But how does he come out of nowhere with a cold start late to the game and ship Grok four and do it alongside everything else he's up to? He's launching new political parties. He's literally magnitudes above every founder. It's humbling. So it's almost like he was a co-founder of OpenAI.

• 1:20:39John Coogan?

  Yeah, I guess he's returned.

• 1:20:41Jordi Hays?

  You would have to, you know, be, you know, almost be a co-founder over there to be able to do something like this.

• 1:20:46John Coogan?

  Let me tell you about Graphite. Code review for the age of AI. Graphite helps teams on GitHub ship higher quality software faster. You can get started for free at graphite.dev.

• 1:20:56Jordi Hays?

  If you want to ship like Ramp, get on Graphite.

• 1:20:58John Coogan?

  Yeah, Chamath was saying the same thing. Somebody in his replies says, seriously, how does this guy produce what he produces? Meta is buying talent at $200 million a year and Elon keeps his people at a fraction. It's mind blowing. Very deeply underappreciated edge for Elon, says Chamath. The retention of the best people happen when you can offer them a freewheeling culture of technical innovation, no politics and few constraints. People in the comments are like, no politics. What are you talking about?

• 1:21:25Jordi Hays?

  Yeah, can get a little political over there, but.

• 1:21:28John Coogan?

  But but probably not within the engineering org at XAI, right? Like, it's probably just, okay, how do we build the biggest thing? Cool.

• 1:21:36Jordi Hays?

  Well, you can imagine the politics of like, who gets the best spot for their tent in the office.

• 1:21:42Jordi Hays?

  Yeah, there's a hierarchy, a tent hierarchy, proximity to the bathroom.

• 1:21:46John Coogan?

  I want to be directly under the air conditioning unit. I want to be closer to my desk.

• 1:21:49Jordi Hays?

  The windows can be nice too, so you can, you know, pull down your tent a little bit and get a little view, morning light.

• 1:21:55John Coogan?

  I wonder what the political structure is of the tent city.

• 1:21:58Jordi Hays?

  The tent hierarchy.

• 1:21:58John Coogan?

  So is it democracy? Do they vote for who runs the tent city? I guess it's just a.

• 1:22:05Jordi Hays?

  The XAI tent city.

• 1:22:06John Coogan?

  It's probably just Elon at the top, but you have a tent.

• 1:22:09Jordi Hays?

  Something about San Francisco and tents.

• 1:22:11John Coogan?

  Yeah, very funny. But Swix has been chiming in saying like, we need community notes for LLM benchmark porn. Because in the Grok 4 launch, they highlight this AIME competition math problem. And, and, and so Matt Schumer is basically saying AIME is saturated, let that sink in. Grok 4 got 100%, it made no mistakes on that benchmark, which is obviously very impressive. But there's this extra comment about the nature of AIME. And so it's a cautionary tale about math benchmarks and data contamination. Apparently, you know, like predictions were that the models weren't smart enough to actually solve these.

• 1:22:56John Coogan?

  But he says, I used OpenAI's deep research to see if similar problems to those in AIME exist on the internet. And guess what? An identical problem to Q1, question one of AIME 2025 exists on Quora. I thought maybe it was just coincidence, so I used deep research again on problem three. And guess what? A very similar question was on math about stack exchange. Still skeptical. I did problem five and a near identical problem appears on math stack exchange. And so like at a certain point, if people, you know, put out a benchmark, then talk about it a lot online. And then that gets baked into the training data, you're just memorizing the results. You're not necessarily actually learning everything. It's still cool. It's good. It's good to have everything memorized. But it really is not beating like the knowledge retrieval knowledge engine allegations.

• 1:23:41John Coogan?

  And it's, and we're not really in.

• 1:23:43Jordi Hays?

  Yeah, I'd be interested to, when Scott Wu was on the show earlier this year, he was basically saying, AI will win an IMO gold medal. Year, he felt very confident in that.

• 1:23:53John Coogan?

  Yeah.

• 1:23:54Jordi Hays?

  And I'd be interested to see how he thinks about.

• 1:23:57John Coogan?

  And I'm pretty sure.

• 1:23:58Jordi Hays?

  New performance.

• 1:23:59John Coogan?

  Yeah, I'm pretty sure the IMO gold medal questions are public once the IMO happens. So every year they're they're developing new questions, but then they go out there and then they get memorized and the solutions become discussed. And, you know, there's all the context around that. And so, yeah, it gets it gets kind of baked in. So a big question about how valuable are these? At the end of the day, it's really just about like adoption. And that's why, you know, we were looking at the poly market for the best. The which company has the best AI model at the end of July? And XAI has has just surpassed Google, which was sitting around 80% chance for a while. And then started dropping earlier this week, last week, started dropping.

• 1:24:45John Coogan?

  And now XAI is sitting at 48%, Google is sitting at 45%.

• 1:24:49Jordi Hays?

  Well, yeah, actually updating it's updating live. Google's back up at 49%.

• 1:24:53John Coogan?

  Is Google planning to launch something new in July? Because it feels like it feels like this market particularly is more driven by Google's release schedule. Because Google might have something in the lab, but like they like to release things at specific times. Like they have, it's a big company. They don't just like.

• 1:25:08Jordi Hays?

  Who knows?

• 1:25:08John Coogan?

  Drop it.

• 1:25:09Jordi Hays?

  Gemini team Logan over there might be fixated on this.

• 1:25:11John Coogan?

  Did you see his post during this?

• 1:25:13Jordi Hays?

  Yeah, yeah, yeah. Oh, during during the wait, he was like, if you need something to kill the time.

• 1:25:17John Coogan?

  Yeah, yeah.

• 1:25:17Jordi Hays?

  Google AI Studio.

• 1:25:19John Coogan?

  So, I mean, people are people were definitely memeing the production values on the Grok four launch. Because it was supposed to start eight, I think it went live at 8:45 or something like that. Maybe a little bit later at Pacific time. And Eigen Robot was saying.

• 1:25:31Jordi Hays?

  Yeah, this this market is based on LM LM Arena.

• 1:25:34John Coogan?

  LM Arena.

• 1:25:35Jordi Hays?

  Specifically the text leaderboard. So currently they haven't fully updated it. So it's unclear. Right now Gemini 2.5 Pro is still at the top, but I think the expectation is once they get Grok up there, it will be the top spot. So we'll keep following.

• 1:25:51John Coogan?

  Yeah.

• 1:25:51Jordi Hays?

  This market, there's over 2 million of volume already on it. So.

• 1:25:55John Coogan?

  Yeah, it's so interesting that Anthropic's not on this poly market at all.

• 1:26:01John Coogan?

  People talk about them as having like the best vibes, the best like big model smell, the best like, you know, interaction and L M arena is like supposed to kind of like test that with these A B tests. And yet, like, doesn't seem to be performing there, but it almost doesn't matter because they're just focused on like the business at this point as opposed to like the benchmarks.

• 1:26:20Jordi Hays?

  Yeah.

• 1:26:21John Coogan?

  I don't know. It's all changing.

• 1:26:22Jordi Hays?

  We have a post here from Ben Hilek.

• 1:26:24John Coogan?

  Oh, yeah.

• 1:26:25Jordi Hays?

  He says Elon Musk on A I. So during the presentation, a lot of people were critiquing the presentation saying that it was, it didn't feel like super polished or whatever. I don't think that was the intent. And and it was pretty fixated on the models themselves and and what went into them and what they're good at. But Elon did have this one quote in here where he says, and at least if it turns out, so he's talking about, you know, what will, you know, what kind of impact A I will have on the world. And he goes, at least if it turns out to not be good, I'd at least like to be alive to see it happen.

• 1:26:59John Coogan?

  It's like, if we get the Terminator ending, I want to be around for that.

• 1:27:02Jordi Hays?

  Yeah, I want to experience it.

• 1:27:03John Coogan?

  What does that say about those timelines? Because it's like, is he expecting not to be alive? Like, I, I feel like most people that have been in the doom category have been like, the doom's coming soon, not, not the doom's coming in 200 years.

• 1:27:17Jordi Hays?

  I, I didn't, I, I read into it more like, he, he will find it interesting if that is the outcome and, and it'll be entertaining. Less so like, will I be alive when it happens kind of thing, but who knows? There was another funny quote at the end of the art, at the end of the presentation where Elon kind of looked around at the very end. He's like, anyone else have anything to add? And one of the engineers goes, it's a good model, sir.

• 1:27:48Jordi Hays?

  They cut it.

• 1:27:48John Coogan?

  Extremely online crew.

• 1:27:50Jordi Hays?

  Yeah.

• 1:27:50John Coogan?

  Definitely, definitely on brand. Well, Ben Hilek, as you know, he's been on the show. He's a designer, probably working in Figma.

• 1:27:57Jordi Hays?

  All day.

• 1:27:58John Coogan?

  Think big, think bigger, build faster. Figma helps design and develop the teams, build great products together. You can get started for free at Figma.com.

• 1:28:05Jordi Hays?

  And we have our first product coming out very soon with Figma Make that Tyler has been cooking on. I've been very excited.

• 1:28:11John Coogan?

  He showed me, he showed me it and I was like, oh, like someone built the thing that we were thinking about building like, and he was like, no, like I, I did this.

• 1:28:19Jordi Hays?

  Generated this.

• 1:28:20John Coogan?

  This is in Figma. I was like, this is like an iframe on another website that like already exists. Cause it looks like exactly what we want, but it looks so good. Like.

• 1:28:28Jordi Hays?

  It looks like he worked on it. He looks like it. It looks like he worked on it for like a few weeks.

• 1:28:32John Coogan?

  No, it looked like someone else did it. It looked like it was a professional product that like stole our idea, basically. I was like, oh, like someone else got to it. That's, that was the vibe when I Yeah. Well, how, how has the, how has the experience been? Uh, I don't know if you want to leak exactly what you're working on, but.

• 1:28:47Jordi Hays?

  Yeah. I, I don't want to talk about it too, um, you know, closely, but.

• 1:28:50John Coogan?

  But how many prompts did it take you to get where you showed me?

• 1:28:53Jordi Hays?

  Yeah. I mean, maybe five.

• 1:28:56John Coogan?

  That's so crazy. This thing is so detailed.

• 1:28:58Jordi Hays?

  Design is super, it's really great.

• 1:29:00John Coogan?

  It's really good.

• 1:29:02Jordi Hays?

  Yeah. The fact that it came out looking like basically like 90, like 90%.

• 1:29:06John Coogan?

  Yeah, yeah, yeah. Uh, and, and I imagine that there's probably like the last 10% if we were really strict about like, it's got to be on this exact style. I got like, that might be something where like, you know, Tyler winds up spending more time finalizing and customizing stuff. But in terms of like, just getting a functional prototype out, oh man, it was, it was mind blowing. It was awesome. I'm, I'm, I'm very excited about the, the age of vibe coding. Um, this is an interesting chart from Tracy Alloway.

• 1:29:33Jordi Hays?

  Yep.

• 1:29:33John Coogan?

  Been on the show.

• 1:29:34Jordi Hays?

  Fill it up.

• 1:29:35John Coogan?

  The cost to rent an Nvidia H100 GPU hit a new low this week with annualized revenue at 95% utilization falling, uh, from 23,000 at the start of May to less than 19,000 today. So that's not that big of a percentage drop, but it is, but I mean, it is a 20% drop since September.

• 1:29:57Jordi Hays?

  Consistent trend.

• 1:29:58John Coogan?

  It's a consistent trend. I wonder how much of this driven, is driven just by all of the frontier labs that are driving the most adoption or moving on from the H100 to the 200. I don't know what else would be driving this because if, if you can, if you can still get, like, if you only take a 20% drop off of a full refresh of a new, uh, of a new, of like a new hardware.

• 1:30:21Jordi Hays?

  And it's a, it's a, it's a pricing drop, not a utilization.

• 1:30:26John Coogan?

  Yeah, annualized revenue at 95% utilization. So this is revenue per unit.

• 1:30:33Jordi Hays?

  So utilization is still very high. It's the, it's the price that, you know, these Neo clouds are able to rent them for, which is dropping.

• 1:30:41John Coogan?

  Yeah, I mean, yeah, yeah. I mean, the, like, the, the market's more competitive than ever. There's more Neo clouds spinning up and more people, you know, actually influencing these things. And then I guess this is the question of like, how, how stuck will certain workloads get? Like, if you, if you have figured out a great use case for an LLM in your organization, and it's something that's, you know, not one-shotting your entire stack or whatever, but it's just like, you know, we have data flowing through our systems and we are going to use, you know, LLMs are going to, you know, interact with every PDF that gets uploaded to our, to our website or whatever. And, and so we're, we're influencing a lot.

• 1:31:22John Coogan?

  Like, you might not need to put that on the latest hardware or update the hardware forever. You might just like, be like, yep, it's Llama 3, it works. It's on H100s and it'll be on H100s forever. And that piece of our business will just stay there. Just like, you know, we have a Postgres database that, you know, works and we're not changing it every year. We're not changing everything. We're just like, we're just trying to cost optimize that and just hopefully the cost just comes down on that. But like, we've solved this particular problem, then we'll go solve new problems with new technology. So I, I think that, I think that's probably what's going on here. But, but it gets to the point of like, the biggest question with Grok is that, like, the, the model clearly is frontier, it works.

• 1:32:04John Coogan?

  It's, it, it, you know, like, the, the whole fine tuning on the, on the actual X account is, is like a crazy final step of like system prompt. And people were joking about that, like, oh, they gotta fix that. It's like, that's not what they're demoing today. They're demoing like the underlying raw model, which is clearly like just engineering focused, as you saw in the, in the, in the demo, the demo, which was just like, you know, benchmarks and stats.

• 1:32:28Jordi Hays?

  Turns out, turns out the secret ingredient to crushing every benchmark is to have the bunch of data from schizophrenic.

• 1:32:36John Coogan?

  No.

• 1:32:37Speaker 03

  Obviously not.

• 1:32:38John Coogan?

  I actually think it's the design of the RLHF stuff and the design of the reinforced learning pipeline. Tyler, you got anything?

• 1:32:45Speaker 03

  Um, yeah, I mean, I think just like so far what I've seen on X, like the overall response, like vibe stuff.

• 1:32:51John Coogan?

  Yeah.

• 1:32:51Speaker 03

  Is that people are saying, uh, maybe it was a little too kind of overfit on the RL like VR, like verifiable rewards.

• 1:32:57John Coogan?

  Yeah.

• 1:32:58Speaker 03

  Like you, you kind of see this when, um, even in the demo, I think it would, it would sometimes respond in the answers with like, uh, in, in like LaTeX formatting.

• 1:33:06John Coogan?

  Oh, sure.

• 1:33:06Speaker 03

  Which is like, okay, that means obviously they've trained a ton on, you know, math questions, stuff like that.

• 1:33:11John Coogan?

  Papers and stuff.

• 1:33:12Speaker 03

  Maybe people are saying maybe it was kind of, you know, benchmarked.

• 1:33:15John Coogan?

  Hmm.

• 1:33:15Speaker 03

  Uh, you see it like, you know, 100% on, on Amy is like kind of crazy.

• 1:33:19John Coogan?

  It's like sauce. It's like you don't want to be too, too good. Yeah, yeah, yeah. This is the thing about democracy. Like if you win like 80% of the popular vote, it's like, okay, let's say it was a blowout. If you win 100% of the popular vote, like probably not, probably not a democracy. I don't know. I mean, in theory, these things should be able to do it, but, uh, I'm, I'm interested to know more if we dig into RAGI. Is there, is there more stuff going on there? Are there any secrets? Cause it does seem like a kind of an outlier result. You can see it from this Aaron Levy post. Grok four looks very strong. Importantly, it is made, it has a mode where multiple agents do the same task in parallel, then compare their work to figure out the best answer there. In the future, the amount of intelligence you will get will just be based on how much compute you throw at it.

• 1:34:03John Coogan?

  I was joking with Tyler about this, that the, the individual models are mixture of experts models. So there's a whole bunch of, uh, of parameters, right? And then the individual parameters like light up the different neurons based on the, an internal to the model router. So there's kind of like the math section of the brain, the literature section of the brain. And so this was like one of the, this was one of the key breakthroughs in like GPT four, right? Was mixture of experts.

• 1:34:31Speaker 03

  People think we're not super sure.

• 1:34:32John Coogan?

  Yeah, we don't still, we don't fully know, but that's like an internal decision that happens within the model to be like, let's go. It's, this feels like a math question. Let's go down the math path in the model.

• 1:34:43Speaker 03

  Yeah.

• 1:34:44John Coogan?

  But then Grok four is doing. Multiple, it's running the same model multiple times and then comparing the results. And so now you have.

• 1:34:52Jordi Hays?

  Yeah, grading it.

• 1:34:53John Coogan?

  Yeah, you have multiple agents running mixture of expert models. You have mixture of mixture of agents running mixture of experts models. And the next thing is going to be like, if you want the absolute best intelligence, you need a mixture of companies. And you need like, I send one prompt and it goes to Grok and Claude and GPT and Gemini and a human.

• 1:35:14Jordi Hays?

  Yeah, I wonder how OpenRadar is thinking about this stuff. It is funny to think about the the the human version of that, where you give five engineers on your team built, you know, the same feature and then kind of compare notes afterwards wildly inefficient. But with with with software, when you can do these things like very quickly, there's incremental cost. But you can, you know, have more confidence in in results and.

• 1:35:34John Coogan?

  I mean, it's basically like having a brainstorming meeting with the whole team and just throwing up a question and being like, hey, like, we have this hard problem that we need to solve. Here's my idea. What do you think? What does Tyler think? What does Ben think? You kind of like go around the table. Everyone kind of gives their input, their various expertise. They kind of think through the problem in different ways and then you compare answers and everyone kind of coalesces around one strategy. This is like how work happens in the real world with a meeting. It's kind of the same thing, but certainly expensive to do that. So it'll be interesting to see where companies like how how eager are companies to jump over to Grok? Because it seems like it's been a big lever for Microsoft to have Grok in the ecosystem

• 1:36:19John Coogan?

  as kind of a stalking horse for all the other models, because Satya wants Azure to be very model independent, serve them all. They have the, I think they have exclusivity for ChatGPT or GPT APIs, or they have obviously like a great deal there with OpenAI. And so if they can, if they can have Grok for as well, that's another, you know, tool in the tool chest to be like this top layer.

• 1:36:43Jordi Hays?

  Satya is in such a good position. It's probably not discussed enough.

• 1:36:49John Coogan?

  Yeah.

• 1:36:49Jordi Hays?

  How much just by owning those end customer relationships and being able to vend in whatever model is hot at that moment and give people optionality and still get 20% of OpenAI's revenue, at least for now.

• 1:37:02John Coogan?

  Yeah. He's also SOC 2 compliant.

• 1:37:05Jordi Hays?

  Of course.

• 1:37:05John Coogan?

  And if you want to get SOC 2 compliant, head over to Vanta. Automate compliance, manage risk, prove trust continuously. Vanta's trust management platform takes the manual work out of your security and compliance process and replaces it with continuous automation, whether you're pursuing your first framework or managing a complex program. So yeah, Eigenrobot was talking trash about the production values.

• 1:37:25Jordi Hays?

  I don't know about trash. They were just noticing.

• 1:37:28John Coogan?

  I didn't think it was that bad.

• 1:37:29Jordi Hays?

  It says, "Slides are worse than I'd create after getting roped into a presentation with one hour notice. You can tell the engineers made them themselves." I think this is just a reflection of the culture, right? They're not, they're, yeah, very clearly is like screenshots dropped into a slide.

• 1:37:44John Coogan?

  It's also funny, it's like light mode screenshots on dark mode slides. So like, let's do black slides and then you come with your white screenshots that are kind of like misaligned and not really evenly distributed. They didn't do like the distribute evenly or whatever, distribute horizontally.

• 1:38:01Jordi Hays?

  Still gets the point across.

• 1:38:02John Coogan?

  Yeah.

• 1:38:02Jordi Hays?

  And I think it's a reflection of their culture.

• 1:38:05John Coogan?

  Yeah.

• 1:38:05Jordi Hays?

  And, you know, it shows what they care about, what they don't care about. They're not trying to be the most polished, they're just trying to be the best.

• 1:38:10John Coogan?

  Yeah. Eigenrobot kind of did like a whole like live tweet here.

• 1:38:15Jordi Hays?

  Yeah, so Elon was predicting the model will discover new physics within two years. He said, "Let that sink in." Long silence.

• 1:38:23John Coogan?

  Is that?

• 1:38:23Jordi Hays?

  One engineer laughs awkwardly.

• 1:38:25John Coogan?

  Is that sooner or later than his previous timeline? Because he was, he was talking about AI discovering new physics soon. I don't remember if he was saying.

• 1:38:36Jordi Hays?

  Dating it.

• 1:38:37John Coogan?

  Two years or three years or one year before. Because this could be, this could be that he's still excited about this, he still thinks it's possible, but he thinks it's going to take longer than he said previously. And that's kind of the more important update. I don't remember what he said originally.

• 1:38:50Jordi Hays?

  See if Grok can find out.

• 1:38:51John Coogan?

  But he was saying this at the Grok 3 launch, that like, that is the goal. And if you can get there, like, you've kind of, you've kind of solved everything. And Sam Altman was talking about that too. That if you can, if you can create a super intelligence, like, that's probably the first thing that you'd want to do. It's like, hey, go discover all the new physics and like, really help us figure out how the world works, so you can solve, you know.

• 1:39:12John Coogan?

  I want to be clear, I love all you guys at XAI and only want the best for you, but I'm going to continue to live post. Elon attempts to give a speech on alignment involving a very small child, a child much smarter than you. The monologue rambles with no conclusion. Incite a pause. Yeah. Will this be bad or good for humanity? He says the, you know, at least if it turns out to not be good, I'd like to be alive to see it happen. Oh yeah, they had a poly market integration. That was kind of interesting.

• 1:39:40Jordi Hays?

  Yeah, it's interesting. Basically giving, giving the model access to real time poly market data so that it can help make predictions and sort of add context around the, the market itself.

• 1:39:54John Coogan?

  Yeah, that's interesting. Elon asking the real questions. You say that's a weird photo, but what is a weird photo? I still don't understand why we're looking at weird photos of XAI employees, but they were charming. They're calling it super Grok, crazy features, 16 bit microprocessors. What is, I don't even understand what this is. Oh, they, yeah, they built like a game in Grok. They had demo of a video game generated by super Grok. It's a Doom clone. Every time the PC shoots an enemy, floating text appears reading Grokdom. Elon is fabricating timelines for product launches on the spot. The engineering, the engineer sitting next to him is looking at the floor, face impassive nodding. It's a good model, sir. For real, though. Congratulation to launch, guys.

• 1:40:34Jordi Hays?

  It's a good model, sir.

• 1:40:35John Coogan?

  I thought, I thought this post from the actual XAI engineer Eric Zelikman was funny. It was like AI, AI model version numbers over time. Did you see this?

• 1:40:43Jordi Hays?

  No.

• 1:40:44John Coogan?

  So it's this chart of the version numbers over time and you can see that Grok is versioning fastest because it's like, at this point, what else are we measuring? Like, like at least they're iterating on the version number effectively as opposed, and I guess this is a shot at OpenAI because they launched 4.5 and then went to 4.1 and they're kind of like, you know, there's this big question about like, when will GPT-5 come? The expectations are so high for GPT-5. And so they've, they've obviously, the Grok teams are like, hey, at least every three months, we release a new full number. So I wonder that the five is a number that really no one has, has like gone for. And I wonder if Grok will do it first. Like if you draw the line on this, they certainly should do it in like three

• 1:41:29John Coogan?

  months. They should have Grok 5. And there's no reason that they shouldn't, but maybe there's some superstition.

• 1:41:33Jordi Hays?

  It's very possible that Colossus is the, is the key. To getting to five.

• 1:41:38John Coogan?

  Oh, the new data center, yeah. Uh, well, they'll need Linear to plan that out. Linear is a purpose-built tool for planning and building products. Meet the system for modern software development, streamline issues, projects, and product roadmaps.

• 1:41:48Jordi Hays?

  They

• 1:41:49John Coogan?

  Linear app.

• 1:41:50Jordi Hays?

  Need Linear badly. So hopefully they've gotten signed up.

• 1:41:53John Coogan?

  Near said Grok on, uh, humanities last exam, Grok four. Uh, I'm not sure I buy, even in the general case, that there's a given humanities last exam number, which implies you discover useful new physics. How would one make a benchmark of the proper shape for this? You'd have to have a validation set of questions which are outside the scope of what we currently are able to do. You could choose things on the edge of our knowledge distribution and then try and exclude. Uh, yeah, it is interesting, like, if you, like, if you are able to memorize every hard math problem, does that allow you to memor, to discover new math? Like, it's sort of a prerequisite because you have to

• 1:42:34Jordi Hays?

  I think where I, I've imagined these discoveries coming from are having a single intelligence that has PhD-level intelligence across, like, a single mind that has PhD-level intelligence across every human domain, right? And being able to combine ideas from different domains. Like, historically, a lot of innovation is just taking something from one field, bring it over here, making some combination of it. I think Elon talks about the potential of discovering new physics, but again, doesn't, didn't, didn't spend a lot of time, like, breaking down how that would actually happen. But, um, world is unpredictable, so we'll see.

• 1:43:13John Coogan?

  Yeah, it's interesting. People are really pushing this idea of like, okay, like, like, we are accelerating, like, the, the AG, uh, the R K G I leaderboard is accelerating, but I keep seeing this and, and feeling deceleration. Like, I am not feeling acceleration right now. Are you, Tyler?

• 1:43:28Speaker 03

  Yeah, I don't know. I, I think generally I'm, I'm kind of like, not that interested in a lot of these kinds of benchmarks, like, I think R K G I is more interesting, but just like the humanities last exam, the kind of general math physics knowledge, it's, doesn't seem, uh, to be that, like, It doesn't seem to line up with, like you see GPT 4.5 kind of does very poorly on these things. But like writing, it does really great. So like I think I'm I'm more like if I were to go to long, short on like different benchmarks, like the usefulness of them. I think stuff like HLE, I'm kind of short, long, I'm like, have you guys seen the Minecraft benchmark where it builds the two different? Okay, you basically two models build like a Minecraft. There's like a prompt. It's like build a house.

• 1:44:12Speaker 03

  Then you can choose and then it's like the rank.

• 1:44:14Jordi Hays?

  Models yearn for the mines.

• 1:44:15John Coogan?

  But who's who's grading that? The human?

• 1:44:18Speaker 03

  It's a human who picks between them. It's kind of like a elo.

• 1:44:21John Coogan?

  Oh, okay.

• 1:44:22Speaker 03

  But just like general kind of creative tasks.

• 1:44:24John Coogan?

  Sure.

• 1:44:24Speaker 03

  I think stuff like that. Aiden Bench is good.

• 1:44:26John Coogan?

  Yeah.

• 1:44:27Speaker 03

  Um, I think even on the Grok launch, there was the vendor bench.

• 1:44:29John Coogan?

  Which one's Aiden Bench?

• 1:44:31Speaker 03

  Aiden Bench is Aiden McLaughlin's benchmark. It's just like, it's it's kind of hard to describe how it works exactly, but it's just various like creative tasks. How like kind of novel its thinking is, the the like style of its text.

• 1:44:44John Coogan?

  Sure. Wait, it's just like it's just like whichever one he likes the most. At the end of the day, he's the only grader.

• 1:44:52Speaker 03

  No, no, there is like an objective like function that you can like run it. It's not just like.

• 1:44:57Jordi Hays?

  The idea that.

• 1:44:58John Coogan?

  He's like, open it again.

• 1:45:00Jordi Hays?

  It will be funny. Uh, you know, there come, there's a period of life where your SAT score like matters a lot.

• 1:45:07John Coogan?

  Totally.

• 1:45:07Jordi Hays?

  And it says something about you. And then a decade later, it's, you know, what you can do, what you have done. Starts to matter a lot more. And so I do think we'll reach that point where it's like, yes, you can one shot every hard exam question there is that you can throw at it. But like, what can you do for me?

• 1:45:25John Coogan?

  Yeah, yeah, totally. And I think that's I think that's why like the bigger question is almost like, you know, chat GPT DAUs. And like, and like actual.

• 1:45:34Jordi Hays?

  Revenue.

• 1:45:34John Coogan?

  Revenue.

• 1:45:35Jordi Hays?

  The final.

• 1:45:35John Coogan?

  App installs and stuff. Yeah. I mean, the. The revenue thing is interesting because you wind up in like B2B cloud world, which is valuable, but it's maybe less, it's like, it's more competitive because it's more commoditized. And

• 1:45:53Jordi Hays?

  Well, yeah, if you don't have a lot of leverage in the enterprise, if Azure is able to offer infinite models that are, that are infinite frontier models, open source models that are maybe just behind the frontier, but great at certain tasks. The leverage isn't quite there. There will need to be another pretty significant leap. Until then, you know, Anthropic being really good at code gen, there's leverage there.

• 1:46:21John Coogan?

  Yep.

• 1:46:22Jordi Hays?

  We saw this yesterday with, with Llama switching over to

• 1:46:27Jordi Hays?

  Anthropic models internally and then, you know, just having a consumer app with a lot of users also very valuable.

• 1:46:33John Coogan?

  Yeah. The other interesting thing about the, the foundation model layer commoditizing and it becoming like cloud. And if you have a model, you'll just be like vended in as an API to anything else. Like the token factory is that

• 1:46:48John Coogan?

  the, the hyperscaler clouds are extremely profitable. Like even though AWS, GCP and Azure are all somewhat directly competitive and, and they're somewhat perfect substitutes for each other, they have not driven prices to zero such that in the way airlines are like deeply unprofitable. Like AWS and Google Cloud are both profitable.

• 1:47:11Jordi Hays?

  Yeah. Or you look in other commodity sectors like oil and gas.

• 1:47:16John Coogan?

  And I don't know if that's just because there's lock in. I'm not exactly sure, but there's something about where, you know, maybe the, maybe the counterintuitive take is that, yes, they do commoditize and there are a few major foundation models that are frontier. And they all are roughly the same price, but they all have decent lock in with their customers to the point where they're still able to extract some level of profit. Or they're just creating so much value that even if they're taking like a small marginal slice on top of, on top of the, the cost to run, that they're creating so much value that they still have 50% margins or something like that. Cause like, I mean, this was the story of AWS, like no one knew how much money it was making.

• 1:47:57John Coogan?

  And then, and then they, they had to break out the financials in one of Amazon's earnings reports. And it was like the AWS IPO, as Ben Thompson put it. And next up, we have Ben Thompson from Stratechery coming into the studio. Very excited to talk to him.

• 1:48:11Jordi Hays?

  The moment we've been waiting for.

• 1:48:12John Coogan?

  Yeah. Uh, welcome to the stream, Ben. Good to have you on the show. You've been a backbone of many analyses here on the show. Uh, and we're excited to welcome you to the, to the show. How are you doing?

• 1:48:27Speaker 04

  I'm doing good. I put on a button up shirt and a jacket just for you guys. Please feel honored. I am wearing shorts underneath, I will admit.

• 1:48:34Jordi Hays?

  You didn't have to tell us that.

• 1:48:35John Coogan?

  People always ask if we wear shorts. I, we actually do wear the full suits.

• 1:48:38Jordi Hays?

  We gotta stand up to hit the gong sometimes.

• 1:48:40John Coogan?

  There's a wide shot.

• 1:48:41Speaker 04

  I am, I am the poser here, so I'm, I'm happy to admit.

• 1:48:45Jordi Hays?

  Well, it's a great, it's a great sign of respect in our culture to, to put on a suit for a TVPN appearance. And, uh, we're just, we're so excited to talk to you. I, as you know, I've been lucky to read your work in my entire career. And, and, uh, I think it, I think so many of the thoughts that I have are now like you're, your way of thinking about technology and markets is so embedded in my brain that, that ideas that I hold as true or just foundational beliefs are actually your beliefs. That have just become so, uh, so immersed. So, uh, it's great to talk.

• 1:49:21Speaker 04

  Well, thank you. Um, I will attempt to implant new ones or maybe show you the error of your ways. One or two.

• 1:49:27Jordi Hays?

  Sounds great.

• 1:49:28John Coogan?

  Uh, I, I, I do have a question on, um, on the nature of where you sit in the media world. Before we go into actual questions about tech companies. Um, it, it, it's interesting that in some ways you're a journalist, but you don't really do the scoops and, and breaking news that much. Uh, but you also don't issue just straight up buy and sell recommendations. Um, what was the thesis behind not just actually having a price target and not doing like, this is a sell side bank, but independent?

• 1:50:02Speaker 04

  Well, when I started, I mean, it's funny to hear you talk about like my quote unquote "place" in the ecosystem. Sure. Because when I started, I had like, I think it was 368 followers on Twitter. I was just some sort of random, random person on the internet. That's awesome. In retrospect, sort of right place, right time, I think is certainly the case. But I did perceive there was a large gap between tech journalism, and I would include a lot of the bloggers there who were writing a lot about products. And then there was Wall Street that was very focused on sort of the financial results. And to my mind, there was a large space in the middle, which is tied together the products to the financial results, but also the overall companies and strategies.

• 1:50:45Speaker 04

  And I'm very interested in culture and how that guides decision-making. One of my sort of precepts is, all these companies are filled with smart people, and a lot of people, when you ask them why they did something wrong, their only answer is that they're stupid. And I'm like, no, they're not stupid. It's actually much more interesting to assume they're smart and are doing stupid things, and trying to unpack why they are doing that and what goes into that. And so that was sort of the thesis, was that there's this space to explore these spaces. And then there's a business model aspect, which is, I started Stratechery two years after Stripe started. I think they had just come out with their billing product, and the only alternative

• 1:51:28Speaker 04

  at the time was PayPal for subscriptions, and it was fairly sketchy, and there was lots of like horror stories out there about, you know, stuff. And just the Stripe API was so great and the things you could potentially do with it. And so on Wall Street, you're putting a price on it, you're also charging like $100,000 a year, or something like that. And so you get a small list of high ARPU clients, and my thought was I could go in the opposite direction and get a large list of low ARPU clients, thanks to things like Stripe and the ability to subscribe. And that would, and as part of that, I wasn't going to go through the rigmarole of getting registered and doing stock picks and all that sort of thing. I've always joked, if you want a stock pick from me, you're going to pay me a whole lot more than $15 a month.

• 1:52:12Speaker 04

  I was $10, $10 when I started. And it's actually pretty great. Now, there's some, one of the critiques I do get, particularly from my, you know, friends on Wall Street, is, you know... No skin in the game, X, Y, Z. I think at this point, I'm large enough that my reputation is significant skin in the game.

• 1:52:31Jordi Hays?

  Oh, yeah.

• 1:52:31Speaker 04

  But I do recognize the validity of that critique.

• 1:52:34Jordi Hays?

  Yeah, and you know, if you make a bad call, you're gonna have to circle back to it in two years and write about it yourself and admit that you got it wrong.

• 1:52:41Speaker 04

  Right.

• 1:52:41Jordi Hays?

  Which hurts too.

• 1:52:44Speaker 04

  Right, no, I had to write about this week. Like, I was very optimistic about Apple's Apple Intelligence announcement last year and the theoretical power it would give them over the model makers. And now I'm ready, actually, no, they're gonna have to pay up. And that's, you know, that was a bad call by me that, you know, I think was, you know, very well received at the time, and might have gotten that one wrong. And so I do need to be straightforward about that. And so I, just this morning, I was very crystal clear, like, I got that one wrong. That was, that was, that was an issue. What is nice is Stratechery kind of ended up being in this interesting place where I feel like I'm a little bit of like the Switzerland of tech.

• 1:53:23Speaker 04

  And that no one pays anymore. If you're a CEO, you pay the same amount as, you know, Joe Blow down the street that is paying it. Um, I don't invest directly, which I think made sense when I started because I didn't have any money. Um, it's probably hurt me a lot over the years since then. But I don't, like, and I think this is a different West Coast, East Coast thing. Where it does feel like on the West Coast, everyone's talking their book sort of all the time. And, uh, and you know, that's why I generally, as a rule, don't have VCs on to do the Stratechery interviews. Because it's kind of hard to get like a real take, because, because that is, you know, such a motivation.

• 1:54:04Speaker 04

  Um, and so me coming in being like, I have no book to talk. I'm just here telling, saying what I think. I think has been good for the West Coast audience, which is my base audience. Even if the East Coasters think that I'm being a, being a big wimp, so.

• 1:54:21Jordi Hays?

  Funny. Yeah, the talking your book challenge, we go through that a lot. Trying, trying.

• 1:54:26John Coogan?

  12 VCs on a day.

• 1:54:27Jordi Hays?

  Well, yeah, and, and, and we just try to get a bunch of different opinions and triangulate what, you know, what we think. Was real.

• 1:54:34Speaker 04

  I'm trying to come up, you have TPP and I'm trying to come with a P so I can get the Talking Book Network in there. But um.

• 1:54:40John Coogan?

  Talking Talking Book Production Network. ESPN for Talking Your Book.

• 1:54:47Jordi Hays?

  But yeah, it is a real struggle to find somebody that, for example, has a deep understanding of every foundation model, company, but isn't massively conflicted in some way or another.

• 1:54:58John Coogan?

  Extremely, extremely.

• 1:55:00Speaker 04

  Yeah, and so it's one of those things you just sort of, you end up like, there's so much path dependency and all these sorts of things. And like I mentioned, like, a big advantage I had was, I started at a time when sharing good links was very high currency on Twitter. And so, you know, I grew very, very quickly, much more quickly. I sort of had a five-year plan to go independent. I ended up doing it in less than a year, in part because it just sort of spread really, really rapidly. And it was an ideal time to be someone sharing interesting links regularly. And I wasn't sharing them. The beauty is, my readers were sharing them. They were doing sort of the marketing for me. And so I'm very cognizant of, of sort of the, the luck I had in that regard.

• 1:55:41Speaker 04

  And then just over time, and it's been an interesting journey for me to grapple with my different position in, in the ecosystem. Like, so when I started the Struckery interviews, that was sort of part of it, which was, I started out not knowing anyone. I got to the point where I can talk to anyone that I want to. And so how do I square that? I can't be the guy with the chip on his shoulder, trying to make a name for himself forever. It sort of gets, it's like the meme with the guy, how are you doing kids? Like, at some point, you have to accept you're part of the establishment. How can I do that while still staying true to the idea that Struckery is about the readers? It's reader-funded. My loyalty is to them.

• 1:56:26Speaker 04

  I'm very clear, I have no loyalties to anybody else. And so, well, I'll just, I will talk to people. Sort of acknowledgement of what I can do, but it's going to be fully transcribed and published and and sort of available to everyone.

• 1:56:39Jordi Hays?

  Have you ever dealt with or thought about the attack vector of a special interest, you know, buying a thousand plus, you know, thousands of seats to a single, you know, independent publication and saying like, yeah, like, you know, we're happy, you know, we we we got seats for all of our employees, actually, because we really, you know, love the and then and then suddenly they're sitting over there and, you know, is representing meaning, very meaningful amount of revenue.

• 1:57:05Speaker 04

  I mean, I fortunately, I think of a scale that I don't have that problem.

• 1:57:10John Coogan?

  That's good.

• 1:57:11Jordi Hays?

  There we go.

• 1:57:12Speaker 04

  But it's, but no, I think I think audience capture for subscription sites is a potential issue for sure. And this is another thing, I was sort of right place, right time. I got big enough by the time that it doesn't matter. And if someone's really like, I give refunds all the time. Actually, if someone really upsets me, I will refund them and every dollar they paid me, I'm just like, go away. I don't, you know, I don't, you're being abusive or whatever it might be. And that that is a beautiful thing about the relatively low price, high customer base model is no one has power over me. Like I have the burden of publishing, you know, as often as I do, I feel a heavy weight of duty to my customers.

• 1:57:54Speaker 04

  When I write something I'm not happy with, like, I don't sleep well, but at the same time, there's no one customer or no, no individual that can come in and be mad at me and and impact my business.

• 1:58:06John Coogan?

  I I I'm seeing that there's maybe some sort of parallel between legacy media and independent media where independent media, it it's not by default more pro tech or anything, but there's just no salary cap. So if you're at a legacy institution and you're writing, probably some sort of rough loose salary cap of a few hundred thousand dollars, whereas you go independent, it's feast or famine, you might fail, but you might get really, really successful and have a huge income from that. And and I'm wondering what we're seeing in the AI salary wars where we're seeing more and more talent and the, you know, Mark Zuckerberg potentially. Paying hundred million dollars bonuses. Do you think that Apple will come around to spending more money on researchers?

• 1:58:51John Coogan?

  It feels like they kind of have an internal salary cap with Tim Cook making seventy five million. There's now people that report two levels down from Mark Zuckerberg that are making more than Tim Cook. And you have this weird dynamic where even if there's no actual salary cap at Apple, you kind of have an implicit one from the CEO.

• 1:59:10Speaker 04

  Yeah, for sure. I mean, I think just to go back to the media observation you started out with is as you increase transparency in the market, as you decrease non-related barriers, which in the publishing world previously was really geography. And when everyone's on the internet, you inevitably, in just about all cases, you get a power law distribution. And a few people make a ton of money because they win most of the market. And then some people make some, and then there's a long tail that that sort of don't make any at all. But it's it's very, it's interesting. It's it's fluid in a way, but it can sort of become somewhat static as long as the people at the top sort of, you know, continue to do well.

• 1:59:56Speaker 04

  But what's interesting about AI is for forty years, you would have periods of time where you'd have tech companies going to head to head in a product market. And I think one of the reasons part of the software eating the world sort of idea is the way you get an apex predator is that that predator killed everyone else first. And so you had tech companies fighting each other for the first twenty, thirty years of tech. The ones that emerged were lean mean killing machines. And they and the entire industry were sort of set loose on the rest of the world. And everyone was just like, was getting slaughtered sort of left and right. But what you also had over this past sort of twenty years or so

• 2:00:38Speaker 04

  is the big companies in particular are sort of slotting into unique slots. So you have you have Facebook is social, Google is search, Apple is devices. Microsoft is business or, you know, business applications, Amazon, e-commerce, et cetera. And obviously, these companies are very large and do lots of things. And there's some overlap in different places, but they've been fairly sort of. Distinct in their categories and they've been dominant in those categories. And so they've been in a place where like Hollywood has wanted to get to, right? What is the dream in Hollywood? You want to have a franchise where the next Marvel movie matters more than who the star is.

• 2:01:20Speaker 04

  The reason that's so great is because you now have bargaining power over the stars. So you just sub someone else in. And, and whereas the old style like Tom Cruise makes the most money because Tom Cruise on a movie poster sells the poster. And so in a negotiation, he has massive bargaining power. So he's going to get, get paid a lot, get paid a lot of money. In tech, it hasn't been that case. The companies themselves have been franchises. And so the, the overall, anyone who works in tech, probably works in any, any, any entity, but you know, there's a few people in each company that are critically important, really make the whole thing go. Everyone else is fairly replaceable. Those people are, have probably always been somewhat underpaid um for years and years and years.

• 2:02:02Speaker 04

  Both just by the nature of companies and the cultural issues and your salary cap sort of analogy. But then also just like, it's not a transparent market. It's not, it's not hard to price sort of what people are worth. With AI, everyone's trying to do the exact same thing. So you have multiple companies trying to do the same thing. The output is somewhat measurable. I mean, all the AI test stuff has issues, but by and large, everyone kind of knows who has the good models and, and who doesn't. They, you know, the scalability questions, you know, like, because all these companies are trying to do the same thing. We have a very unique situation where the bargaining power, you increase transparency.

• 2:02:46Speaker 04

  You increase sort of the liquidity or the ability of people to move around because they're doing the same thing. The bargaining power shifts to the people that are super valuable because suddenly it's much more clear who's valuable. And their skills are much more transferable. So this is, I think, a very underrated bear case for tech in terms of AI. At least for this time period is they've lost that. That murky bargaining power over employees that they enjoyed for decades. And currently, you're seeing what happens when you don't have that. You start paying employees what they're worth. And obviously, that's great. I'm not saying this is a business analyst. It's not a sort of a moral statement.

• 2:03:30Speaker 04

  But it is like what Mark Zuckerberg is doing, I think, is totally rational. I think it's a classic sort of Clayton Christensen. From Facebook's perspective, AI is all upside. So of course, they're going to invest what they need to do to win. But it's costing him a lot of money and by extension, it's costing everyone else in the ecosystem a lot of money.

• 2:03:49Jordi Hays?

  Well, isn't it in some way, is the right way to think about the last couple of weeks, like more of like an Aqua, like unofficial Aqua hire? In the sense that you're, it's not just the people, but it is the know-how in terms of, hey, here's, there's these things that we want to do that are important to our business in a lot of different ways. And we're basically, it's like the collective is actually more valuable than any one, like the collective together getting 10 researchers at the same time. Is meaning, you know, is meaningfully more valuable than, than, than, than just each individual researcher added up.

• 2:04:23Speaker 04

  There's probably something to that, but I, I, I think, again, like what is actually different between what Google is trying to do, what Anthropic is trying to do, what OpenAI is trying to do? And what Meta is trying to do. They're all trying to do the same thing. So I, my suspicion, I'm not an AI researcher, so I don't want to overstate my, my knowledge in this space. But my suspicion is skills are, are fairly highly transferable. And when that is the case, there is. In some situations, if lots of people can do those skills, that's terrible for the employees. Because then their bargaining power gets diminished because anyone can slot in. But we're in this space where the skills are transparent, knowable, transferable. And there's not very many people that can do them. And so it's a scarce resource that everyone's fighting over.

• 2:05:09Speaker 04

  And that's why you see this real shift in negotiating leverage. As, as manifested through these dollar figures to, to AI researchers.

• 2:05:18John Coogan?

  Yeah. Do you think, I mean, Google seems like the most fragile and the most like paranoid about just disruption. It's not all upside. Uh, it could be very bad for them. Um, the innovator's dilemma, you know, you, you had this back and forth where uh, Sundar Pichai mentioned that he hadn't read the book. He said, it doesn't matter because it's a structural issue. I think that's a good point. But if you play back the counterfactual, is it ever possible to disrupt yourself? And essentially, like if the Gemini app had launched before ChatGPT and they had taken over that mind share and maintained 90% ownership in that, like it would be somewhat disruptive to their

• 2:05:59John Coogan?

  revenue and their profits as they transition over. But when I sum the revenues from OpenAI and LLMs and then Google Search, I'm not seeing some massive drop off. That's actually, that actually would destroy Google in the media, short to medium term. So, but I'm wondering if you think it's like, is it entirely impossible to avoid the innovator's dilemma by disrupting yourself?

• 2:06:24Speaker 04

  Well, number one, you have to also look at margins, not just revenue.

• 2:06:27John Coogan?

  Yeah.

• 2:06:28Speaker 04

  But number two, you actually, you answered your question. Google didn't launch Gemini.

• 2:06:33John Coogan?

  Yeah, yeah, of course.

• 2:06:34Speaker 04

  That's the answer. They were years ahead.

• 2:06:37John Coogan?

  Yeah.

• 2:06:37Speaker 04

  They, they invented the transformer a decade, nearly a decade ago.

• 2:06:40John Coogan?

  Yeah.

• 2:06:41Speaker 04

  And so in many respects, like there's parts of this question that the counterfactual makes the point in that it is a counterfactual and it's not reality. Now, I do think, I think Google's done better than I expected over the last two years. Uh, I, I like what they're doing in search generally. I, I think they, it does seem to be the one part of the company that still functions, like they, they can actually iterate and build products. What we're seeing is reminiscent of what they did a decade, 15, you know, 12 years ago, when everyone's like vertical search, Google's done, all the, everyone's going to search in apps. And Google completely transformed the syrup, the, the search, uh, engine response page, uh, whatever it is, uh, the search engine results page

• 2:07:26Speaker 04

  to be local or to be shopping or whatever. Ever and Yelp's been throwing a hissy fit sort of ever since and and so that's what they're doing with search, right? And and with search overviews and they have this new search labs or AI mode. They can sort of test stuff out. What's it scalable? Once they they're confident about the monetization issues, they can sort of shift it over. I call it the search funnel, search AI funnel. I think it makes a lot of sense. And I think and this has always actually kind of puzzled me where I think they're responding fairly well. Even though this is seems to be a textbook case of disruption and I went back to an article I wrote years ago.

• 2:08:04Speaker 04

  Uh, called Microsoft's monopoly hangover and I was, I, I, I went through Lou Gerstner's autobiography and about how he turned around IBM. And his real insight with IBM was everyone wanted him to break it up in, in this sort of different pieces. And what he realized was IBM was so big and, and large from having downstream of the monopoly. That actually the only thing they were good at was being big. And so breaking them up would actually just create a bunch of subscale, low performing companies that would all get wiped out. But as this behemoth, they could go to other big companies and solve all their problems at a very mediocre level.

• 2:08:49Speaker 04

  But it's still a sort of an attractive proposition and under Gerstner, they really rode the internet wave. They went to all these big companies, said this internet thing's happening, you need help, we'll solve your problems for you. And had a very sort of successful run, you know, kind of until cloud came along and which Gerstner, by the way, was, was, was a proponent of. But you know, by that time the IBM people were back in charge. And I was thinking about the context of Microsoft where Mike, you, business models are hard to change. And disruption is ultimately about business models. And culture is hard to change, even harder to change. But what can't really be changed is the nature of who you are. And I think there is, you know, in Microsoft, they were in a similar situation.

• 2:09:34Speaker 04

  They were a big monopoly and they weren't a product company. And the attempts to become a product company with Windows 8 and all the things that went on around that time, inevitably, inevitably failed. And Satya Nadella, to his great credit, and you know, sort of diminished Windows importance in the company, broke it, literally broke it into pieces, spread it around. And this was a multi-step process and got Microsoft back to a place of we're big and we'll do everything. We're not a Windows company. We'll go in there and we'll go solve all your problems. Very sort of reminiscent of the second version of IBM. And I go back to Google.

• 2:10:15Speaker 04

  And I've always been intrigued by the I'm feeling lucky button, which doesn't exist anymore. But I always enjoyed that that button continued to exist long after it was impossible to click. Because the moment you started typing in the search box, it would start auto-searching immediately and jump right to a search page. But it was, it was there in a, it's just so core to Google to give you the answer, to know everything, like to know everything about the world and to, there's a bit where even though the core of their business model is 10 blue links. And it's not just the users choosing the search link, which gives them the data feedback loops.

• 2:10:58Speaker 04

  They know which results better, but also the users choose the winner of an auction Google puts on for ads. And it's an incredible business model. And there's something about that that's always been intention and counter to what Google was founded to be. And I feel like that germ of what Google was founded and meant to be.

• 2:11:20Speaker 04

  Is an AI answer engine and and it almost feels like even though Google is old and large and fat and slow moving, that core aspect of their nature and is still in the culture. And that's why they're finding it in themselves, I think, to do better in AI than you would expect. Was it enough to watch a chat GPT before OpenAI? No. Was it was it enough to have any sort of cogent response for the first six to nine months? No. But it was enough that I think they've done better than I expected over the past year in particular, and gives me, I think, more optimism than I expected I would have for the company when,

• 2:12:05Speaker 04

  you know, when chat GPT first launched.

• 2:12:09Jordi Hays?

  AI overview from Google. If you search Google's mission, Google's mission is to organize the world's information and make it universally accessible and useful, which is exactly what language models do really, really well. Like the thing that's just undeniable, right? Is you can you can debate whether this is going to be the year of agents. It doesn't feel that way to me yet. But this is the year that most people have realized that, wow, LLMs are very good at organizing, surfacing, and making data valuable.

• 2:12:40John Coogan?

  You mentioned just the debate over breaking up IBM. I'm interested if you could take us through some of the

• 2:12:48Speaker 04

  I bet you and Roger were talking about IBM today, did you?

• 2:12:49John Coogan?

  No, no, no. But I want to I want to talk about Intel and and kind of your the history of some of your takeaways and what you think you've gotten right in the past, your perception of, you know, should they break up the the foundry business, when what you think might be in the works with Liputan coming in there? Because I was listening to Dylan Patel talk about his conversation with the new CEO, Liputan, and it seems like they're doing lots of tightening up, lots of layoffs, but it's kind of, I don't even know what framework to apply to analyze, like, is a breakup the correct thing? It feels like something people just say.

• 2:13:30Speaker 04

  Yeah. Um, so Intel, it's funny. I, one of my very first articles was about Intel. And what I said at the time was, and this was 2013, and this was an art, like, you know, when you start a site like Stratechery, you're like a new band. And why does everyone think a new band's first album is the best? Cause they've been working on these songs for years, right? And then the next album, they had a year to do it and they all suck, right? So I mean, I'll let people decide if that applies to Stratechery or not. Um, I won't be offended. Sophomore slump. But, yeah, but I'd have been on, you know, Intel had been a thing I'd been wondering about for a long time, which was by 2013, when I started, they had clearly missed mobile. Now, it wasn't clear to them.

• 2:14:14Speaker 04

  They were still trying to do the atom processor and then just, they're gonna figure it out tomorrow. And the, the problem with missing mobile is, the problem with Intel in general is Intel is always very biased towards high performance. And this goes back to, uh, actually Pat, Pat Gausinger, his first time through at Intel. Intel, you know, had the CISC, uh, uh, the, the way that there's CISC versus RISC. It's like, uh, it's different ways of organizing bits or whatever. RISC is generally more efficient and actually even Intel processors today, even though x86 is CISC, the internal, it's retranslated internally to a RISC type language. Um, none of that is really important, other than to say,

• 2:14:58Speaker 04

  in the eighties, there was a real push in Intel to switch away from x86 and to, to a RISC type, um, uh, of, uh, I'm not even using these terms, but like, um, for, for the processors. And Gausinger was a leading proponent that this is a terrible idea.

• 2:15:15Speaker 04

  And the reason it's a terrible idea is because there was already a huge ecosystem of software built around x86. And all this low level code and capabilities that no one ever, that was written once and no one ever wants to touch again, because it's miserable work. And He's like, to rewrite all that stuff would take at least two years. And in that time, our ability to manufacture chips will improve so much that had we just stuck with CISC, our processors would be faster. And that was the right bet. And that's one of those foundational bets that I why I like to think about companies and their history and what goes into that,

• 2:15:55Speaker 04

  which is Intel from the eighties on has solved its problems by having superior manufacturing and by moving faster. And yeah, our chips may be theoretically less efficient. But if our manufacturing is better and our transistors are smaller, it doesn't matter because that will swamp whatever theoretical sort of efficiency you might have. And this drove the entire computer industry. You, you, you would write, to write a program, just every second you spent optimizing your software in the eighties or nineties was a waste of time because whatever improvements you could get would be swamped by the next version of, uh, if you went from two eighty-six to three eighty-six or three sixty-six to four eighty-six. That jump was so large, you were better off focusing on features,

• 2:16:38Speaker 04

  even if it made your software sort of slow to use on the current hardware, because the next generation of hardware would be so much faster, it would solve your, your speed problems for you. Now, this has generated a lot of bad habits amongst tech developers. That's why you get bloat and why you have like poor performing things and all those sort of things. But this was sort of super critical. And so Intel at its core has always been focused, have always been manufacturing first and focus on better and better performance. What happened with mobile is in that calculation did not come efficiency. They were never focused on efficiency and in mobile, efficiency was everything. So what happened with mobile is Apple went with an ARM processor made by, made by, made by Samsung. And they basically rewrote everything.

• 2:17:23Speaker 04

  All that stuff Intel didn't want to rewrite in the eighties, or if they rewrote would just give other process processor companies a chance to catch up with them. Had to be rewritten for mobile because efficiency was so much more important than performance. When that happened, Intel was screwed. Now, it took them a long, long time to realize they were screwed, but they were just fundamentally unsuited to be competitive. It was, the whole Paul Adelini turning down the iPhone contract is not true. Tony Fadell, I said that once and I got a call from Tony Fadell, actually this is when I had him on it for an interview. And he's like, "This drives me up the wall. Intel was not remotely competitive, even though they had ARM chips then. Even their ARM chips then were focused on performance, not on efficiency."

• 2:18:06Speaker 04

  And, and so the problem for, the problem for Intel is, once you missed mobile, you were going to lose your manufacturing lead at some point because volume matters so much. And every time you move down the curve, your transistors get smaller, the costs increase massively. So you need volume to spread out the cost of building these fabs. Like back then, when I wrote this article, fabs cost 500 million, now they cost like 20 billion. And this is over a course of like 12 years. So, so it was clear Intel was going to be in big trouble back then. And so I wrote, "They need to build a foundry business. They need to figure out a way to build chips for other people."

• 2:18:47Speaker 04

  Because in the long run, the cost of keeping up in manufacturing is not going to be tenable if you're not making mobile chips. And what, obviously they didn't. TSMC made all the mobile chips for everyone, and guess what happened? TSMC took over the manufacturing lead. Now, there's lots of other things that went into this, why Intel stumbled and sort of things. But at a structural level, what happened was actually inevitable. Once Intel missed mobile, unless they figure out a way to make mobile chips some other way. They didn't do that.

• 2:19:21Speaker 04

  What's interesting is, what is, the problem with that, it took so long to manifest. Part of mobile was you had an explosion in the cloud, because cloud and mobile actually go hand in hand. Intel made all those cloud chips. Intel's stock had an incredible run from the time I wrote that article for the next eight to nine years. And I felt like kind of a moron, because I'm like saying this company is screwed if they don't do what I say. They didn't do what I say and their stock went to the moon. But what, the way it actually caught up to them... has been in the past two to three years where there's astronomical demand for AI chips. Only TSMC can beat it. Intel's not in the game. They're trying to shift to a foundry model,

• 2:20:02Speaker 04

  but they're so far behind. Being a foundry is being a customer service business. It's not being an Intel, we tell you what to do, or we tell our design teams how to change their chips to accommodate our manufacturing needs. It's just, it's totally different and they needed a decade to learn how to do that. Had they changed in 2013, they would be ready today to capitalize on AI. And the counter example here is Microsoft. Microsoft building Azure, yes, it got them somewhat in the game with mobile and things like that, but AWS dominates in that space. But by virtue

• 2:20:42Speaker 04

  of building up Azure, they were prepared when the AI opportunity came along. And now Azure is sort of a big AI player. And you know, I wrote about these two examples a few weeks ago in the context of Apple. I think the concern for Apple isn't the short term. We're going to be using AI apps on our iPhones for quite a while. It's are they going to be prepared for what's next if they don't do some sort of sort of reset and pivot here? Oh, sorry. I didn't answer your question about Intel. Anyhow.

• 2:21:15John Coogan?

  Yeah, I mean, I'm hearing like, manage decline, basically, like, just like, you know, just get as much cash flow out of this thing as you can while you wind down the business.

• 2:21:25Speaker 04

  For Intel?

• 2:21:26John Coogan?

  Yeah, that's what I'm hearing. It doesn't feel like, oh yeah, there's a silver bullet, just split the business and they're good. Like, no, it's like, it's all bad.

• 2:21:33Speaker 04

  The reason not to split the business is Intel needs volume and they get volume from Intel.

• 2:21:37John Coogan?

  Sure.

• 2:21:38Speaker 04

  And AMD split their business a decade ago and it was.

• 2:21:44Speaker 04

  Really, they had a very hard time for many years and they had very tense and difficult negotiations between the global foundry side and the AMD side. Global foundries was AMD's manufacturing arm. And it wasn't until really they got out of that and went to TSMC and then also completely rehauled their ship design business. And all those, you know, that they, they got in the business they were and then also that Intel stumbled. That certainly really helped them. Intel today, so you split it up, like who's bought, like Intel's, Intel itself is faving some of its stuff with TSMC.

• 2:22:16Jordi Hays?

  Yeah.

• 2:22:16Speaker 04

  Who, who wants to buy Intel's foundry services? The, the problem here is TSMC is located in a country called Taiwan.

• 2:22:24Jordi Hays?

  Yep.

• 2:22:24Speaker 04

  Um, which you know what it is today, but five years ago it'd been like, what Thailand? Um, which by the way, it was probably much better for Taiwan's security when Americans thought it was Thailand.

• 2:22:33Jordi Hays?

  Yeah.

• 2:22:33Speaker 04

  Um, but so there's a real national security element here. And it's just, it's a really tough situation because Intel is a failed company at this point. And they're, and the, the reason the failure is so total is because

• 2:22:54Speaker 04

  the aspects that drive their failure are the same things that drove their success. It was their arrogance, it was their sense that we're the best, that we will just win through manufacturing might and performance. And all those things work against becoming a good foundry, work against being a customer service organization, work against recognizing the fact that you're not going to make up for missing mobile through manufacturing, which was their bet for years and years. You, you had to accept that you lost. And, and that's a tough place for companies. It's not like someone made a mistake. It's that what they did, what they did too well for too long.

• 2:23:34Jordi Hays?

  Who they were, they continued being who they were.

• 2:23:37Speaker 04

  That's right. But who else are you gonna get? If you want an alternative to SMC? It's a very tough situation.

• 2:23:43Jordi Hays?

  Last question, and I think we'll be forced to have you make a slightly shorter answer, unfortunately. I wish we had hours to keep talking. I wanted to get your updated thinking on XAI, X, the combined entity. The last 24 hours have been very chaotic. When the initial merger was announced, it made sense for financial reasons for some of the different stakeholders. But I wasn't fully sold on this idea.

• 2:24:09Speaker 04

  You're gonna force me to come up with takes that I generally just avoid right about Elon Musk companies.

• 2:24:15Speaker 04

  For self sanity reasons, I think. I mean, I wrote an article years ago about like when the Model Y was announced. And I was talking about, you know, it's a Tesla in this aspect. What Elon Musk is very incredible at is sort of creating reality out of thin air. He's like the ultimate memer. And to create like, um, it's the way things used to work backwards. I remember I analogized it to like protests, like a critique of of of modern protests is they spin up very quickly because social media makes it very possible, but there's no infrastructure under them. So they don't amount to anything. Whereas you go back to like the civil rights era, there was years of groundwork that went into like the million man march.

• 2:25:00Speaker 04

  You know, on Washington DC. And there was a structure in place that ultimately manifested in large crowds. But modern protests are the opposite. The largeness comes at the beginning and then it all falls apart because there's nothing in place. And um, there's something that makes a challenge to write about anything Elon Musk related is the you have all the social aspects. You have this bit about Tesla of creating reality. It's the stock was buttressed for years by these true believers, even though the financial parts didn't make sense. You famously had these wars with the short sellers and all that sort of thing. And it worked. It basically manifested a market for this Model Y and then the Model X, not the Model X, what's the other one?

• 2:25:44Speaker 04

  Model three, yes, it was model three, sorry, when I wrote that article, model three and model Y had this massively successful and all, all, all, all the people that were true believers got very rich, uh, and congratulate, congratulations to them, i- i- it's great. But it makes it almost impossible for someone for what I do, who I want to look at structure and fundamentals. I can observe this effect happening, but you can't really say what's going to happen or the effects of it, other than to say, this is interesting. And so I wrote about that article and then the solar city thing came out and he's like bailing out like his brother-in-law or something. And I'm like, I can't write about this. Like, what am I gonna say? Like, like there's, it just doesn't make sense. And so I think there's, to fast forward to X, XAI.

• 2:26:27Speaker 04

  Um, yeah, there's a theoretical piece here. I think actually XAI would be an incredible acquisition target for a lot of companies if it wasn't saddled with X. Uh, so.

• 2:26:38Jordi Hays?

  Yeah, it feels like the end state is like Twitter getting spun out again. Like that, that, that's my, I, I, that's kind of like my, my, it just ends up going back to Twitter and, and, and it becomes.

• 2:26:51Speaker 04

  The blueberry. No one actually wants to, like Twitter, Twitter, there's never been a company in the history of the world, probably, where the impact of a company is completely narrowly divorced from its financial realities. Like I think when Elon Musk bought it, and I assume that's continued through now, they'd have like one profitable quarter in their history. Like it's, it's an unbelievably terrible business. Uh, and so I think it's probably weighing XAI down. There's a, I guess I get the theory that Twitter data helps XAI.

• 2:27:21Jordi Hays?

  Well, it helped yesterday with.

• 2:27:23Speaker 04

  You don't need to pay 43 million for Twitter to, to, or for three billion, I should say, to, to get it. So.

• 2:27:28Jordi Hays?

  Yeah, that, that was always my position too. I don't think it helped yesterday when, when, uh, Mecca Hitler emerged on the timeline.

• 2:27:36Jordi Hays?

  But, uh.

• 2:27:37John Coogan?

  Good luck to them. Hopefully they sorted out.

• 2:27:38Jordi Hays?

  I wish, I wish we had, uh, a lot more time here, but hopefully we can do it again soon.

• 2:27:42John Coogan?

  Thank you so much for stopping by.

• 2:27:44Speaker 04

  Yeah, no worries. Uh, what would you guys are doing? I actually had the idea of doing a daily podcast ages, ages ago. Um, classic example of ideas don't count, execution does, and you guys, you guys did it. I think it's great.

• 2:27:54Jordi Hays?

  Well, you're always welcome here.

• 2:27:55John Coogan?

  You're always welcome. Thanks so much.

• 2:27:57Speaker 04

  Thank you.

• 2:27:57John Coogan?

  We'll talk to you soon. Bye. Meta just is going deeper with Ray-Ban maker Eslior Luxottica. I cannot pronounce that first word, but people just call it Luxottica. And so Meta is taking a minority stake in Luxottica to accelerate its smart glasses ambitions, investing $3.5 billion in the iconic Ray-Ban manufacturer. We were talking to David Center about the history of this company. It is fascinating. I'm very excited for him to break it down for us a little bit more. Hopefully he can come on the show and talk about it because it's

• 2:28:31Jordi Hays?

  Very, very soon. The founder has a crazy story. Grew up and I think he grew up in an orphanage. And, and it just, what are they, wasn't, they didn't call him the pit bull. They call them something else, but he was an absolute savage. Apparently at one point he wanted to buy Oakley. And the, and the founder, CEO of Oakley didn't want to sell. And so the CEO of Luxottica acquired the largest retailer for Oakleys and just pulled them off the shelf and basically had started selling knockoff Oakleys, even though they were trademarked. And then eventually the Oakley CEO came around and said, okay, like I'll sell your cratering, you know, my revenue.

• 2:29:10John Coogan?

  Yeah, you're just going to tell me.

• 2:29:11Jordi Hays?

  Let's do a deal. So absolute dog and soon we'll have Center to break it down.

• 2:29:18John Coogan?

  What do you make of this idea that like, you know, Apple, when they make a device, they redefine and very much standardize that particular market. So when they come out with watches, there are a number of styles of watch. There's the dress watch, the sports watch, the steel sports watch. There's the dive watch. There's the, you know, Casio style. There's a whole bunch of different styles, right? Apple comes in and just says, there's only one style, the Apple watch. And they become the number one Apple style.

• 2:29:49Jordi Hays?

  And they give you some variance in the band.

• 2:29:52John Coogan?

  In the band, little stuff here and there. And they were doing partnerships. I think they did Hermes band for a while. They've done a couple of other things, but it's been mostly Apple's design language on your wrist. Whereas with the Meta Ray-Bans, they're saying, and now the Meta Oakleys, they're saying, Like the look of Ray-Bans, we're just putting our technology into the style you like. We're not going to try and create a new iconic style that says meta like Apple says headphones. And and they're just kind of like, they're very, very different strategies. And so it feels like.

• 2:30:26Jordi Hays?

  Well, so so I think this is strategic. This doesn't mean that this doesn't mean that Meta can't develop their own styles in time. But I think it's very smart to say, hey, we don't need to innovate on aesthetics and the sort of silhouettes. Right? There's classic silhouettes. Ray-Ban silhouette is Lindy. These Oakley silhouettes are very Lindy.

• 2:30:45John Coogan?

  And they're different markets.

• 2:30:48Jordi Hays?

  Luxottica has, I think, Garrett Lake and like a bunch of other like brands under it. So they're basically saying like through this, we can deliver. Luxottica has brands in every for every demo that you that Meta could possibly want, right? As a as a hundred billion dollar, you know, company. And so I think it's very smart. I think Apple, like you said, will will probably take a drastically different approach in terms of like standardizing around something. And and that will say something. But accessories like eyewear are just such a such a personal decision and such an expression of of who somebody is that I think that you want to give people max amount of optionality.

• 2:31:28John Coogan?

  Yeah, it's just interesting is like you could have said that about watches, like you before the Apple Watch. You could have said that, well, you know, somebody who wears a dress watch wants a dress watch. Somebody who wants a steel sports watch, somebody who wants a G-Shock is G-Shock. It's like the G-Shock, you say G-Shock and you just immediately think like, you know, special operations guy or Jaco Willink listener like that, that it's like a durable rugged thing. You say, you know, Rolex, that's a different thing, right? And and Apple was able to standardize around it. And it's interesting that that Meta hasn't been trying to do that. And instead they're they're focusing on partnership here. It's just like a it's just an uncommon strategy, but it seems to be working. I there's another post in here. I don't know if we have it here.

• 2:32:11Jordi Hays?

  But I'm trying to think of a new like the key, the key thing is. Apple's great at innovating at multiple layers, but like generally it's very hard to try to deliver hits in like two specific areas like aesthetics and design and then simultaneously in something that's basically a fashion product and simultaneously deliver the technology. So I don't know.

• 2:32:35John Coogan?

  Yeah, Jack Ray here says, "After wearing Ray-Ban Meta Wayfarer glasses for a few weeks, I feel kind of naked wearing regular sunglasses. I found three use cases that are hard to roll back. One, spontaneous photos of my kids when we're out and about. Any cool pose that has a half-life of three seconds I can now capture instead of pulling out your phone. Optionality of music or hands-free phone calls without digging around for earbuds. And three, knowledge-seeking chat when I'm walking around, usually for simple factual things." That's exactly what I experienced when I was demoing the Ray-Ban Meta Wayfarers. "Turns out there's more questions I feel like asking when there's no friction. I'm very excited for multimodal and real-time translation use cases too. They're only going to get better." But I think those three are

• 2:33:20John Coogan?

  maybe enough. And I think with a lot of these products, just having one killer use case, like just replacing the, you know, the headphones for hands-free phone calls or something like, if you can just become someone's daily solution for music, like that's enough to just sell the product and then sell them another one the next year when it upgrades a little bit, sell them another one, keep them as an active user and roll that out for a long time. And then if they can do the other stuff, that's great too. But you just need to get these one nail their single use case. And so, yeah, there's going to be cool stuff, but it's fascinating to see them roll this out. And it's also interesting how behind the ball it feels like everyone else is now. Like, Google was talking about getting into this space. We

• 2:34:02John Coogan?

  saw some launches at I/O. Haven't actually seen any of those in the wild. Haven't seen anyone really talking about those. Apple, it feels like this would be something that they could jump forward to with a stylish pair of eyeglasses with some basic functionality. Just take what's in the AirPods, take a camera, like they could do something cool. But they're like just much slower than.

• 2:34:23Jordi Hays?

  Yeah, the other, the other thing with eyewear that's different or that's gonna be like a new challenge for manufacturers is that there's so many different situations where I might wanna wear something like a Ray-Ban or, or a JAM silhouette one day and then I might wanna, I'm playing

• 2:34:41John Coogan?

  What's a JAM silhouette?

• 2:34:42Jordi Hays?

  Jack Murray homage.

• 2:34:43John Coogan?

  Okay.

• 2:34:44Jordi Hays?

  But, um, the, uh, you know, and then that same afternoon, I'm wearing Oakleys when I'm playing tennis or something like that. And so there's a lot more like swapping and then, then obviously

• 2:34:57John Coogan?

  I mean, if they can keep the price low, you could maybe wind up selling people multiple pairs and have indoor pair, outdoor pair. It's, it's kind of inconvenient. I feel like there's gotta be a better solution to that, but I don't know.

• 2:35:09Jordi Hays?

  It says, what are this?

• 2:35:10John Coogan?

  Yeah, bifocals.

• 2:35:11Jordi Hays?

  Yeah, yeah, where they can like flip down.

• 2:35:13John Coogan?

  There's transition lenses, but those never fully work all the way, but then there's the flip down ones, clip-ons. There's all sorts of different solutions. The big news is that the third browser war has begun.

• 2:35:27John Coogan?

  Google's stock has dropped on the news that OpenAI is planning to launch a Google Chrome competitor within just weeks. And this is very interesting timing because

• 2:35:36Jordi Hays?

  It's time to browse.

• 2:35:38John Coogan?

  Yeah, time to browse. Certainly makes sense to become deeper and more deeply integrated into the user's life. Makes a ton of sense. There's a ton of benefits that come from having a web browser. What was interesting is, uh, the, we can go into what Google actually law, or what OpenAI is talking about launching. But this news, the scoop leaked the same day that, uh, Arvind from Perplexity announced that they're finally releasing their next big product after launching Perplexity, Comet, the browser that's designed to be your thought partner and assistant for every aspect of your digital life, work and personal. And so Perplexity launched this on June 9th and then OpenAI, the, the scoop goes out via Reuters the same day.

• 2:36:22John Coogan?

  And so this feels like very much like, let's not let Perplexity get a bunch of attention and drive a bunch of people to, to start daily driving Comet, the browser. Because even though we're not ready to launch our competitor, we want to

• 2:36:37Jordi Hays?

  I mean, Arvind was on the show talking about Comet. But over a month ago, he said it was really important to the business. This was a big bet that they're making.

• 2:36:45John Coogan?

  Yeah.

• 2:36:45Jordi Hays?

  He, and I'm sure both companies are racing to be the first to launch, but Dia, the browser from the browser company, also launched out of, or they're still in beta, but they launched like a month ago or something like that. So this is, you know, you're not going to be the first.

• 2:37:00John Coogan?

  Oh, they launched a month ago with the Dia browser?

• 2:37:02Jordi Hays?

  Yeah.

• 2:37:02John Coogan?

  That's interesting because I saw Riley Brown also posted the cursor for web browsing Dia browser. And I thought Dia browser launched that same day, but I guess it had launched earlier.

• 2:37:10Jordi Hays?

  Yeah. So anybody that was an ARC user can download Dia today and chat with their tabs. But interestingly enough, perplexity's browser browser and OpenAI's browser are both built on Chromium, the same open source project that underpins Google Chrome and Microsoft Edge.

• 2:37:27John Coogan?

  Yeah.

• 2:37:28Jordi Hays?

  So it, the cool thing here, that means that they're compatible, compatible with existing Chrome extensions.

• 2:37:35John Coogan?

  Oh, interesting. Okay. That's cool. Um, yeah, it's, it's, I want to talk to more people who were like active in tech during the earlier browser wars. The first browser war was Netscape Navigator versus Microsoft Internet Explorer. This is in the mid, mid 90s, early 2000s. Netscape was super dominant and everyone loved Netscape. It was originally the Mosaic browser. This is the Marc Andreessen project. And then, but Microsoft bundled Internet Explorer with Windows 95 and the distribution was so powerful that Internet Explorer actually wound up winning and became really, really dominant. But then there was this lawsuit and it went back and forth. But then, uh, basically in, by the early 2000s,

• 2:38:18John Coogan?

  Internet Explorer had over 90% market share, but then they got kind of lazy and stagnant, apparently. And I mean, I'm not exactly sure what happened, but there was a lot more competition. So Firefox, which was, I believe, like a spin out of Netscape or kind of like some of the same heritage there, began getting traction. And then Google Chrome launched in 2008 and leaprogged everyone. Uh, and Google Chrome was really focused on like speed. It was the fastest browser. And they, they did a whole bunch of work to optimize JavaScript. So the pages would just load faster and run better on pretty much. Every computer that you had. And so, and then they had the open source project with Chromium. And so they were able to kind of standardize the entire industry. And so everyone's always been trying to draw analogies between like the browser wars and the LLM wars.

• 2:39:02John Coogan?

  And like, what's the role of open source in that? Like, is open source a strategy to wind up maintaining your dominance? How much does distribution matter? Like, Chrome was probably pretty easy to distribute because every single person was visiting Google just every day searching. And so you just put this bar, hey, wanna switch to the faster browser? And people just do it because you have basically like, you know, billions of ad impressions on your product every day. Will be interesting to see if ChatGPT can get people to download their own browser on desktop. I mean, I'm using ChatGPT on desktop in Chrome all the time.

• 2:39:39Jordi Hays?

  Which, which ChatGPT model would you want to use as a default search engine?

• 2:39:44John Coogan?

  That's the hard part because I always run into this problem where it defaults to O3 Pro, but that takes 10 minutes. And so then I have to go to a 4O. And then if I'm in an O3 Pro flow and I'm talking to O3 Pro and I let it cook for 10 minutes, it gave me a great answer. But then I want to just be like, okay, just like clean this up a little bit or summarize this or do some bullet points. I want 4O to do that, so I have to switch over. So I don't know, I would imagine I'd go 4O as the default because I want speed. But even 4O could probably be faster before it truly replaced.

• 2:40:16Jordi Hays?

  Google's very fast. They've spent a very long time being fast.

• 2:40:20John Coogan?

  Yeah. And I could imagine them doing a similar project to, I believe it was like the V8 JavaScript engine. They sent this team out to, I want to say like Iceland or something.

• 2:40:33John Coogan?

  They, they basically sent like a bunch of engineers to like an offsite and they were like, just go optimize JavaScript for like a month. Just go focus on this for like a month or months and come back when it's done. Like you have no other responsibilities than just like optimizing this like compiler. And they came out, they came back with the V8 JavaScript engine. It created this whole like Node.js boom, people were running JavaScript on the server then. And, and I could see Google kind of doing something similar where they're like, okay, we have Gemini. It's good at looking stuff up. It's a good knowledge retrieval engine. Go figure out how to make it load all the tokens for the full response. In a hundred milliseconds and that would be very, very cool. And I wonder if that's like a uniquely Google advantage. Tyler, you look something up?

• 2:41:18Jordi Hays?

  Yeah, it was in Denmark.

• 2:41:19John Coogan?

  Denmark. Okay, I was close. I was close. Yeah, I wasn't sure it was Finland or Iceland and Denmark.

• 2:41:24Jordi Hays?

  The interesting thing here, I'm realizing that tabs are definitely a light lock into browsers. It's not, it's not just the default, but if you have six to 10 tabs that you've just had open for a really long time and they're like from a bunch of different things and you can't exactly remember what they were if you had to list them all off, but you know, you know, I personally end up using tabs as like somewhat of a to do list. And so if you're spinning up a new browser and you don't have your tabs, it's like, oh, do I want to just like get rid of my, my tab stack? I have a bunch of tabs that just have stayed there for years and they're basically like, it's basically like a mini operating system, right? With like different apps that might be a Google sheet or something else.

• 2:42:07John Coogan?

  Yeah, no, I know what you mean.

• 2:42:07Jordi Hays?

  So there's very real lock in. I could bring all those tabs over, but I have to then log into a bunch of different services. And so it's, it's really, really hard to actually win here.

• 2:42:20John Coogan?

  I wonder if anyone's using, you know, in Google Chrome, you can actually change the default search bar to, you know, when you type in the search bar and if you just type words, it just Google searches it. You can change that to search chat GPT.

• 2:42:33Jordi Hays?

  Yeah.

• 2:42:33John Coogan?

  Yeah, you can pass in a query parameter and it can just do that. But I haven't heard of anyone actually doing that. And I used to have, I used to be such a power user of Chrome. I used to have different code words, basically. So if I, if I typed like I space and then a query, it would go to IMDB and search that specifically. So you could, you could have Chrome like route to any specific search, any, you could press like Y space and it would search Yelp or, you know, anything else. But I don't know if people are, I don't know if people are doing that with Google, with chat GPT. I think people mostly just like control, a command T and then yeah, hang out in chat GPT.

• 2:43:09Jordi Hays?

  Well, we'll have to ask Chris in 15 minutes about get an update on the browser wars because he was an early investor in.

• 2:43:17John Coogan?

  I know one of those tabs that you have pinned right now.

• 2:43:20Jordi Hays?

  What's that?

• 2:43:21John Coogan?

  Adio.

• 2:43:21Jordi Hays?

  Of course.

• 2:43:22John Coogan?

  Customer relationship magic. Adio is the AI native CRM that builds, scales and grows your company to the next level. You can get started for free.

• 2:43:28Jordi Hays?

  I've had Adio open for thousands of hours in a row at this point.

• 2:43:33John Coogan?

  Yeah. So Signal kind of breaks it down with the OpenAI launching the web browser. He says, this is the oldest playing tech, find product market fit with a single killer use case, then vertically integrate and horizontally expand until you control the interface layer itself, app, platform. Once you own the interface, you own the defaults. Welcome to the next generation of browser wars. Yeah. What's interesting is there like Sam Altman at OpenAI and just the fact that OpenAI is a company, like there is kind of a mandate to like vertically and horizontally integrate, figure out code, figure out research, figure out devices. But every company wants to do everything, but then sometimes they run up against barriers. Like there was a time when Google was like, we want to win

• 2:44:17John Coogan?

  social networking and we want to beat Facebook and we're going to launch a direct Facebook competitor. And they did and it didn't go well. And then they shelved it and then they wound up producing trillions of dollars in market cap, just doing the thing that they do great. And so the question is like the surface area of OpenAI, they have to explore, they have to experiment. It's, it would be stupid not to see if they could get a browser and a device and a chip and a nuclear reactor and everything and sand, get the, get the sand, get everything. But, but there's no, there's no guarantee that they will win the entire vertical stack and there will be the one company, right?

• 2:44:54Jordi Hays?

  I think my question is, are these going to be like, is OpenAI's browser going to be an entirely new app other than their existing mobile app? Is it, or their desktop app?

• 2:45:05John Coogan?

  I, yeah, that is interesting.

• 2:45:07Jordi Hays?

  Because if they have to get people to re-download a separate app, then, then that's, then that's like an entirely, you know, they have a good flight, you know, they have a bunch of impressions.

• 2:45:15John Coogan?

  It is interesting that they wouldn't just evolve the apps that they already have installed.

• 2:45:17Jordi Hays?

  Perplexity too. I don't, I don't know.

• 2:45:19John Coogan?

  Why are we doing new apps?

• 2:45:20Jordi Hays?

  Perplexity has, is planning to, to release this as like a new standalone app or it will be in the perplexity mobile app, but.

• 2:45:29John Coogan?

  Yeah. Um, yeah. I mean, I know, I think comments like its own thing because we were looking to download it and we need a code and you can't just get it if you're just on perplexity. But I don't know.

• 2:45:42John Coogan?

  All I know is that you should go to fin.ai, the number one AI agent for customer service, number one in performance benchmarks, number one in competitive bake offs, number one ranking on G2. So Arvin breaks down like his philosophy of Comet, the browser that he's dropping from perplexity. He says, you can either keep waiting for connectors and MCP servers for bringing in context from third-party apps, or you can just download and use Comet and let the agent take care of browsing your tabs and pulling relevant info. It's a much cleaner way to make agents work. So that is interesting. So I wonder how much like puppeteering will be in this because

• 2:46:20John Coogan?

  ChatGPT and OpenAI have operator that operates a Chromium front, like a headless web browser, basically, but you can actually see it working and it's clicking things. And so if there like there's also the value of like the training data, if you're getting people using all these websites, you have all this training data of like, okay, they clicked on the blue button, they clicked on the green button, they saw this, they entered that this is how they dealt with this form, this is how they dealt with that form. And so that feels like very, very valuable data if you can get it. So it's probably worth duking it out, even if it doesn't, even if it takes a long time. For sure. I do wonder where else they will, where they will plug in, like Clouly operates at like

• 2:47:03John Coogan?

  a higher level of abstraction with like the screen scraping. And I wonder if we'll hear rumbles about either perplexity or OpenAI thinking about like moving up the stack to that level. I'm not exactly sure.