Meta Drops New Model, Mythos, RoboLamp | Luther Lowe, Dan Primack, Lior Susan, Feross Aboukhadijeh, Qasim Mithani, Jaleh Rezaei, Jeremy Philip Galen

(00:44) - Meta Launches Muse Spark (18:24) - Anthropic's Mythos (30:19) - 𝕏 Timeline Reactions (36:12) - Robo-Lamp (41:13) - Luther Lowe, Head of Public Policy at Y Combinator, discusses the challenges small tech companies face due to the control exerted by major platforms like Apple and Google over app distribution. He highlights the restrictive nature of app stores, likening Apple's App Store to "the worst DMV in the world," and emphasizes the need for policy interventions to curb anti-competitive practices. Lowe also mentions Y Combinator's support for the BASE Act, aimed at preventing self-preferencing by dominant platforms, to foster a more competitive and innovative tech ecosystem. (58:30) - Dan Primack, a journalist specializing in business and finance, discusses the legal landscape of prediction markets, highlighting a recent New Jersey appeals court decision favoring Kalshi, a prediction market platform. He anticipates the issue may escalate to the Supreme Court, with potential congressional intervention being necessary for significant changes. Primack also notes the bipartisan nature of opposition to such markets, citing concerns from both casino interests and anti-gambling advocates. (01:20:42) - Lior Susan, founder and Managing Partner of Eclipse Ventures, discusses his firm's focus on investing in physical industries by supporting companies like Cerebras and VulcanForms. He highlights the importance of wafer-scale integration in chip design and the use of multiple lasers in metal part manufacturing to drive innovation and scalability. Additionally, Susan emphasizes the significance of disciplined company-building practices in capital-intensive sectors and expresses optimism about the future of real asset companies in public markets. (01:33:21) - Feross Aboukhadijeh, founder and CEO of Socket, a developer-first security platform, discusses how Socket rapidly detected a malicious update to the widely-used Axios npm package within six minutes. He explains that Socket's system downloads and analyzes every open-source package across 19 ecosystems, employing static analysis, maintainer behavior analysis, AI, and human researchers to identify supply chain attacks and cybersecurity threats. Aboukhadijeh also details the sophisticated social engineering tactics used by North Korean state actors to compromise the Axios maintainer's account, leading to the publication of poisoned package versions that installed Remote Access Trojans, enabling attackers to remotely control infected devices and exfiltrate sensitive data. (01:50:24) - Qasim Mithani, co-founder and CEO of DepthFirst, discusses the company's mission to build AI capable of detecting, triaging, and remediating software vulnerabilities at scale. He highlights their recent $80 million Series B funding, raised less than 90 days after a previous round, driven by significant customer traction and the need to enhance research efforts. Mithani also emphasizes the importance of security in the AI era, noting partnerships with major AI labs and the development of in-house models to address complex enterprise environments. (01:57:57) - Jaleh Rezaei, CEO and co-founder of Mutiny, discusses the company's AI agent that assists businesses like Rippling and Snowflake in creating personalized customer-facing materials to streamline the sales process from initial contact to deal closure. She explains how the agent generates tailored content such as landing pages, battle cards, and ROI proposals, enhancing efficiency and effectiveness in customer engagement. Additionally, Rezaei shares the origin of Mutiny's name, emphasizing its mission to challenge traditional go-to-market dependencies, and recounts the story behind their raccoon mascot, Achoo, highlighting the company's culture of authenticity and spontaneity. (02:05:53) - Jeremy Philip, after 12 years at Meta focusing on trust and safety, left to address AI-powered scams by founding Charlemagne Labs, which developed Agent Charley, an on-device AI agent for real-time threat detection. He discusses the increasing sophistication of phishing attacks, emphasizing that AI enables scammers to craft highly personalized and convincing messages, making traditional phishing indistinguishable from spear phishing. Philip highlights the necessity for proactive, real-time defenses like Agent Charley to protect users from these advanced threats. 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.

• 0:01John Coogan?

  You're watching TVP. Today's Wednesday, April 8th, 2026. We are live from the TVP Ultradome, the temple of technology.

• 0:08Jordi Hays?

  The fortress of finance.

• 0:09John Coogan?

  The capital of capital. We've got white suits on. You know what that means. The stock market is booming. The Dow Jones is up 2.68%. The S and P 500 is up 2.46%. The Nasdaq's up 2.9%. And there's a bunch of other stocks that are moving within that. Of course, this is on the back of the very good news that there has been a ceasefire, that the street might be opened. Of course, it's all back and forth. The front page of the Wall Street Journal is covering all of the geopolitical moves. But we're here to talk about tech and business, of course. And the big news today is that Meta Platforms

• 0:48John Coogan?

  has launched a new AI model. Alex Wang, the chief AI officer at Meta Platforms, announced a new large language model today. It's first major new artificial intelligence model in more than a year. The rollout of the model, called Muse Spark, is a critical moment for Meta, which is up 7.5% already, which has spent billions of dollars hiring AI talent in a bid to catch up to OpenAI. Anthropic and Google DeepMind, the leading labs, have been putting out models at an accelerating pace. In a departure from its previous models, which were open source, Muse Spark is a closed model that will power Meta's AI chatbot and AI features within it. John Ludwig has a very interesting post about open source AI

• 1:32John Coogan?

  and sort of predicted this. I can pull that up at some point. We can find.

• 1:36Jordi Hays?

  Predicted that Meta would eventually bail?

• 1:38John Coogan?

  Yeah. Let me find it. "The future of foundation models is closed source." Let me see if we have this here. He said, "Given Meta is the primary deep-pocketed, large, open-source model builder, open-source AI has become synonymous with Meta AI." He wrote this maybe three or four years ago. "So the operative question for open-source AI is, what game is Meta playing? In a recent podcast, Zuckerberg explains Meta's open-source strategy. One, he was burned by Apple's closeness for the past two decades and doesn't want to suffer the same fate with the next platform shift." It's a safer bet to commoditize your compliments. He likes building cool products and cheap, performant AI enhances Facebook and Instagram. That's 100% true. We've seen this in the ads product and the growth there.

• 2:20John Coogan?

  There's some call option value if AI assistants become the next platform. And that makes sense in Manus and the Meta AI app. He bought hundreds of thousands of H100s for improving social feed algorithms across products. And this seems like a good way to use the extras. That all makes sense and Llama has been great developer marketing for Facebook. But Zuck also suggests several times that there's some point at which open source AI no longer makes sense, either from a cost or safety perspective. When asked whether Meta will open source the future $10 billion cost model, the answer was, as long as it's helping us. At some point, they'll shift their focus towards profit. And that's what John Ludwig wrote. When did he write this? 2024. That was 2024. Man, time flies. Barely, just under two years ago.

• 3:05John Coogan?

  He says, unlike the other model providers, Meta is not in the business of selling model access via API. So while they'll open source, as long as it's convenient for them, developers are on their own for model improvements thereafter. That begs the question, if Meta is only pursuing open source insofar as it benefits themselves, what is the tipping point at which Meta stops open sourcing their AI? Sooner than you think, he says. Exponential data frontier models trained on the corpus of the internet. But that data is a commodity model differentiation over the next decade will come from proprietary data, both via model usage and private sources. Exponential CapEx, he highlighted this two years ago. A lagging edge model that requires just a few percent of Meta's $40 billion in CapEx is easy to open source. No one will ask questions. But when you reach $10 billion or more in CapEx spend for model training,

• 3:49John Coogan?

  shareholders will want clear ROI on that spend. The Metaverse raised some question marks at a certain scale, too. Diminishing returns on model quality within Meta. There's a large upfront benefit for Meta building an open source AI model, even if it's worse than the frontier closed source counterpart. There are lots of small AI workloads, think feed algorithms, recommendations, and image generation where Meta doesn't want to rely on a third party provider like they had to rely on Apple. And so the news has been, back in December, there was a reporting that Alex Wang disclosed an internal company Q and A. That his team is working on two new models. One was this text-based LLM codenamed Avocado. And then a separate model that was for image and video.

• 4:34Jordi Hays?

  Mango.

• 4:35John Coogan?

  Yeah. And so have they clarified if this is Avocado? This feels like what Avocado should be, this Muse Spark. Is that what it's called?

• 4:43Jordi Hays?

  Yeah.

• 4:44Speaker 02

  I assume it is. I don't know what else.

• 4:47John Coogan?

  So the image model should be coming soon. The question that I had was, will a code-focused agentic coding harness be a separate model, a different train? It feels like it's not a coincidence that this news is dropping on the heels of Anthropic's new model Mythos, which sort of was announced loosely and the model card dropped yesterday, even though the model is not available yet to play around with.

• 5:12Jordi Hays?

  Yeah, so going through, I think it's worth pulling up the actual model card here.

• 5:18John Coogan?

  Sure.

• 5:18Jordi Hays?

  So we can have it on the screen. But they break out Muse Spark thinking against Opus 4.6 Max, Gemini 3.1 Pro High, GBD 5.4 X High, and then Grok 4.2. And the way that they position it, it looks, there was of course some people saying that it was somewhat of a chart crime. But if you look.

• 5:42John Coogan?

  Why?

• 5:42Jordi Hays?

  When you basically look at the top and you see that Muse Spark gets an 86.4.

• 5:47John Coogan?

  Yeah.

• 5:48Jordi Hays?

  And it's in blue.

• 5:49John Coogan?

  Yep.

• 5:50Jordi Hays?

  And then you look over and it's outperforming all the other models on that benchmark.

• 5:54John Coogan?

  Okay.

• 5:55Jordi Hays?

  You just sort of assume that like the highlighted blue means that it's.

• 5:58John Coogan?

  Oh, yeah, but it's not Frontier at MMLU.

• 6:01Jordi Hays?

  Because there's a bunch of them as you get further and further down. So like Arc AGI 2.

• 6:06John Coogan?

  Yep.

• 6:06Jordi Hays?

  Muse Spark dramatically underperforms.

• 6:09John Coogan?

  Oh, interesting.

• 6:10Jordi Hays?

  The other leading models.

• 6:12John Coogan?

  Yeah.

• 6:13Jordi Hays?

  And there's, again, a number of others where it is, there's plenty where it's overperforming.

• 6:21John Coogan?

  Yeah.

• 6:22Jordi Hays?

  There's plenty where it's underperforming. Of course, we started asking it jokes right away. So I'll pull up the joke. I said, tell me a joke.

• 6:35John Coogan?

  Okay.

• 6:36Jordi Hays?

  And it said, gotcha, here's one for you. Why don't skeletons fight each other? They don't have the guts.

• 6:43John Coogan?

  Okay.

• 6:43Jordi Hays?

  But then it doesn't even let me react. It just says, want a different vibe? I've got dad jokes, nerdy ones, or Malibu appropriate surf puns too. And so I'm like, wait, why would you think I want Malibu appropriate surf pun?

• 6:57John Coogan?

  If you look in your previous chats.

• 6:58Jordi Hays?

  I have no previous.

• 7:00John Coogan?

  No previous chats. What about, uh, because Meta AI crosses up Instagram. So when you search on Instagram, sometimes that prompts Lama or previous.

• 7:10Jordi Hays?

  Yeah. So I'm trying to get to the bottom of it.

• 7:12John Coogan?

  Yeah.

• 7:12Jordi Hays?

  Like this feels like an oddly specific.

• 7:15John Coogan?

  Yeah.

• 7:15Jordi Hays?

  Uh, type of joke to ask me. Uh, and so I said, why would you think I want Malibu appropriate surf puns? Ha, ha, fair call. Toss that in without you asking for it.

• 7:24John Coogan?

  Hmm.

• 7:24Jordi Hays?

  I try to mix in different flavors of jokes and surf puns just popped into my head as a random option. No special reason behind it. Uh, I just said, I don't believe it was random. And it says, you got me.

• 7:36John Coogan?

  You got me?

• 7:37Jordi Hays?

  That wasn't my smoothest moment, but then it denies it again.

• 7:40John Coogan?

  Weird.

• 7:40Jordi Hays?

  It says, it's just like, what kind of, what kind of joke do you actually want? No hidden motives here. I said, you gave a hyper specific example based on my life. So I have to assume you were looking at my other account for inspiration.

• 7:52John Coogan?

  Instagram.

• 7:53Jordi Hays?

  Uh, I get why, I get why that felt weird. I'm sorry it came off that way. And then it denies it again. It said, you're clearly lying.

• 8:00John Coogan?

  I mean, you have talked about being in Malibu on the internet for a full year. It's possible it got baked in the pre-training or something. I don't know. Um, yeah, this also, I mean, that, that, that feels like.

• 8:10Jordi Hays?

  But when I said, what can you tell me about myself? It said, I don't actually have access to personal details about you beyond what you share with me right here in this chat.

• 8:17John Coogan?

  That's very odd because the whole thesis of like personal super intelligence should be, hey, we're the best model that actually does plug into your entire life and your DMs and your Instagram and your likes and your preferences and everything that you have done across meta platforms for a very long time. We're going to bring that in a really fun and delightful way and, and telling a joke that is tailored. I used to get jokes like that where I would ask for a joke and it would be, I've talked about this, it would be something like oddly specific about my car. And I was like, I don't, that's, that doesn't actually make the joke better, but it's cool. You're remembering this whole personalization boom happened last year.

• 8:53Speaker 02

  Yeah, I get those about like AWS.

• 8:56John Coogan?

  Really?

• 8:57Speaker 02

  Like specific services.

• 8:58John Coogan?

  Oh, because you've been like querying, asking questions about AWS.

• 9:01Speaker 02

  When I was like debugging stuff.

• 9:02John Coogan?

  Yeah, yeah.

• 9:03Speaker 02

  But so I ran, you know, my favorite benchmark.

• 9:06John Coogan?

  Yes, yes, shrimp fried rice bench.

• 9:08Jordi Hays?

  By the way, Noah Hirschfield said, uh, does it know your name? I said, what's my name? I don't know your name unless you tell me, smiley face.

• 9:17John Coogan?

  It definitely knows your name.

• 9:20John Coogan?

  But yeah, I mean, what is personal superintelligence if it doesn't even know your name? Like that, that, that feels like they haven't dialed in the, the, the, the harness or whatever the tuning is to actually.

• 9:31Jordi Hays?

  Yeah, and of course Meta is going to be hyper aware. We don't want a PR cycle.

• 9:36John Coogan?

  Yeah, yeah, yeah.

• 9:36Jordi Hays?

  They trained on your data, right?

• 9:38John Coogan?

  Like everyone's been, oh, that ad was a little bit too close to home.

• 9:42Jordi Hays?

  And you remember every, every once in a while, one of those like thing, a screenshot that's been screenshot like a thousand times, like goes viral. And it's like, I do not give Mark Zuckerberg.

• 9:52John Coogan?

  Oh, yeah. Yeah, yeah, yeah. Like that works. It's hilarious. This is, uh, is this a rebuttal to the bench hacking allegations that happened last, uh, last week, so, or last year? So, uh, where was the, the, so according to, according to Meta's internal benchmark test, Muse Spark outscored Google Gemini on some tests and was competitive with models from OpenAI and Anthropic on others. It significantly outscored XAI's Grok on most tests. Wang's, uh, Alexander, Alexander Wang's hiring followed the disappointing release of Meta's previous model called Lama four. The company was accused of and later admitted to gaming a third party benchmark that it

• 10:36John Coogan?

  used to rank various models against each other on performance. It also delayed the rollout of its biggest model called Behemoth, which it never ultimately released. And so when I look at a model card like this, where you could call it a chart crime, where, you know, it's highlighted in blue and it feels like it's the best, but it's actually, you know, doing better on some, uh, it does well and health bench hard. It underperforms on the R K G I two, as you mentioned. But this maybe is the, the bull case here is that they have at least moved on from the culture of like optimizing for the benchmarks, right? Isn't that a good thing?

• 11:10Speaker 02

  Yeah, I mean, I remember there are rumors about them, like, there was like extra bonuses if they if they got number one at L M Arena.

• 11:16John Coogan?

  Sure.

• 11:17Speaker 02

  That was like something like the rumor.

• 11:18John Coogan?

  Yeah.

• 11:19Speaker 02

  But yeah, I mean, you've seen a lot of the labs kind of move away from benchmarks generally because I think they're just not that meaningful anymore. Like, a lot of them are like basically so saturated, they're all, it's like they're competing between eighty-nine and ninety-one percent.

• 11:31John Coogan?

  Yeah.

• 11:31Speaker 02

  And they're just like not very meaningful, like you see.

• 11:33John Coogan?

  And you won't like actually feel that in the product necessarily.

• 11:36Speaker 02

  Yeah, you you kind of need to talk to these things for a long time before you can actually get the vibe.

• 11:39John Coogan?

  Yeah.

• 11:39Speaker 02

  But I do think this news is very interesting in the context of the, you know, Claude economic stuff.

• 11:45John Coogan?

  Dashboard, yeah.

• 11:46Speaker 02

  Because like, okay, what does it mean if if the entire company has been like maxing their their Claude tokens?

• 11:52John Coogan?

  Yeah.

• 11:53Speaker 02

  Uh, over the past month, it means that they weren't using this model.

• 11:57John Coogan?

  Yeah, to me, it means they need to commoditize their complements, right? They need to bring down that cost potentially and the and if they're, I mean, we we we sort of, you know, dug into are they spending a billion dollars a month, seems like absolutely not, but they're clearly spending a lot. And if you can turn that OpEx into CapEx and train your own model and then inference it much cheaper on your own hardware, that feels like just an economic opportunity that makes a ton of sense in the context of just ten thousand, twenty thousand engineers writing a lot of code.

• 12:28Speaker 02

  Yeah, I think there's basically like two ways, two ways to like square those two things happening, like either one, this model is like not that good because the engineers aren't using it or, you know, your theory that they're just distilling Claude. So one of those is.

• 12:42John Coogan?

  That is not my theory, that is, that is the schizo theory.

• 12:45Speaker 02

  I believe the former one, right?

• 12:47John Coogan?

  Yeah.

• 12:48Speaker 02

  This model still doesn't feel that big, I think Alexander Wang talked about.

• 12:51John Coogan?

  Yeah.

• 12:51Speaker 02

  They're gonna train bigger models, they're training them right now.

• 12:54John Coogan?

  Yeah.

• 12:54Speaker 02

  So I'm yeah, excited for this, I think I'm especially excited for the video models.

• 12:57John Coogan?

  Yeah, they should have incredible training data, we've seen really good progress from V three.

• 13:01Speaker 02

  This model is like very competent, right? It's with the frontier models, maybe it's not the best one, but it's like among the top five or whatever. And none of the other big labs have, I guess, that's not true, like, Google right now is definitely ahead in in images.

• 13:15John Coogan?

  Yeah.

• 13:16Speaker 02

  OpenAI, I think, is is. They're releasing a new Image World soon. It seems like there's been rumors of this.

• 13:21John Coogan?

  Yeah. The Image 2 popped up on the arena.

• 13:25Speaker 02

  Yeah, on the arena. It's always like the code name coming out.

• 13:28John Coogan?

  The photos just looked photoreal. It didn't look like AI imagery anymore.

• 13:31Speaker 02

  Yes. So if like Meta has like similar capabilities, but they have this like incredible data set.

• 13:36John Coogan?

  Yeah.

• 13:37Speaker 02

  You know, very excited to see what comes out there.

• 13:39John Coogan?

  Yeah.

• 13:40Jordi Hays?

  The news this morning, Meta Platforms and the information, Meta Platforms has taken down internal employee-built leaderboard, tracking how many tokens staffers were using.

• 13:49John Coogan?

  Yeah.

• 13:50Jordi Hays?

  Showed total usage over a recent 30-day period, amount of over 60 trillion tokens. The dashboard now displays a message that is offline. It says, "We've really enjoyed building this app on Nest for everyone. It was meant to be a fun way for people to look at tokens, but due to data from this dashboard being shared externally, we've made the decision to shutter it for now."

• 14:09John Coogan?

  It seemed like a fun side project. Mike Isaac was reporting on it here. He said, "It's down. Unclear to me if this was a homespun one by employees or an official one. Employee projects come and go frequently. Conspicuous timing, though." But yeah, you don't want to have, you want to measure the output, the impact, not necessarily the input and how much is going on there. What else is going on? Lisan Al-Gaib says, "Meta might actually be back with Mew Spark, still behind OpenAI, Anthropic and Google, but ahead of XAI and Chinese labs."

• 14:43John Coogan?

  Mew Spark soars 52 on the artificial intelligence analysis index behind only Gemini 3.1 Pro, Gemini GPT 5.4 and Claude Opus 4.6. Mew Spark is the first new release since Llama 4 in April 2025, and also Meta's first release that's not OpenWait. So a huge jump up in performance across a variety of benchmarks. So all good stuff there. Where, what else is?

• 15:07Jordi Hays?

  And the market is

• 15:09John Coogan?

  Tanking?

• 15:10Jordi Hays?

  Thrilled.

• 15:10John Coogan?

  Oh, thrilled.

• 15:11Jordi Hays?

  Absolutely thrilled.

• 15:12John Coogan?

  I just saw, I just saw the news that the Wall Street Journal is reporting that the straightforward moves might actually be closed again. So I would imagine a kangaroo market for the new

• 15:23Jordi Hays?

  I know. The market is thrilled that Meta has released a, a close to frontier

• 15:28John Coogan?

  Yeah.

• 15:29Jordi Hays?

  level model, right? This is a new group. They've been at it for less than a year. The stock is up almost 8% today. And again, you know, so, so much of the pricing pressure, the downward pressure on Meta has just been Kind of uncertainty on what all these tens of millions of dollars will actually go towards and what will be accomplished and still unclear like, you know, is this, are they going to go after code gen at all? Are they just going to try to compete on the consumer LLM side? Very, very.

• 16:03John Coogan?

  And can you economically go after code gen if you're just using it for internal models? If you're not selling it externally? Can you justify the capex just purely on the internal usage?

• 16:14Jordi Hays?

  Seems so.

• 16:15John Coogan?

  Having, having this model be vended into all the different family of apps makes a lot of sense because they have billions of users that will wind up interacting with this in one way or another. The code gen thing, you have to wind up being more in this personal super intelligence. We've talked about Manus and like what it might be able to do for you across Instagram, across Facebook, across WhatsApp. I don't know.

• 16:37Jordi Hays?

  Yeah, the question is, will they try to send meta vibes?

• 16:42John Coogan?

  Again, with the new model?

• 16:44Jordi Hays?

  All the way up to the, to the top of the app store charts.

• 16:46John Coogan?

  Yeah. I mean,

• 16:47Jordi Hays?

  I'm curious.

• 16:48John Coogan?

  The, I mean, the previous actual model was mid journey under the, under the hood, right? And so that was sort of a quick launch to demo what they were thinking, you know, mixing the music library, which was cool.

• 16:59Jordi Hays?

  Yeah. Like that had nothing to do with the, the new like class of AI researchers.

• 17:03John Coogan?

  Mango. Yeah. But, uh, yeah, I mean, there was a lot of weird back and forth and news about is, is Alex Wang getting kicked out? You know, there was a quick debunk on this. Andrew Bosworth came up and said, no, this is completely incorrect. We're very happy with the, with the progress and the team and what we're building there. And so it seems like they got it out the door and, and it's been doing well. Meta's new family of AI models can reach the same performance as Kimi K2 with only 30% of compute and only 10% of the compute to reach Lama for Maverick. So a much more efficient, efficient computing frontier here. They completely rebuilt their pre-training stack with improvements to model

• 17:44John Coogan?

  architecture optimization and data curation. And so more, more facts. Meta, Meta Spark is an early data point on our trajectory and we have larger models in development. So the, the, the mythical 10 trillion parameter model, that, that is the 10T is what everyone's working on right now. 10 trillion?

• 18:05Jordi Hays?

  Uh, yeah, probably in that range.

• 18:07John Coogan?

  Yeah, it's all rumored at this.

• 18:08Jordi Hays?

  Yeah, rumored GPT-4 was something like a trillion.

• 18:11John Coogan?

  Yeah.

• 18:12Jordi Hays?

  Right? You remember those memes where it's like a small circle and then the big circle?

• 18:15John Coogan?

  And then a huge circle.

• 18:15Jordi Hays?

  GPT-4, GPT-5.

• 18:16John Coogan?

  Yeah. But yeah, lots of, lots of other work that went into it. Uh, Martin Casado has, uh, has a little bit more context on like what actually unlocks, uh, new capabilities in, uh, AI models. Uh, he says Mythos appears to be the first class of models trained at scale on Blackwells. Then there will be Vera Rubens, pre-training isn't saturated, narrative violation, RL works, and there's so much computing coming online soon. That's a narrative violation. Buckle your chin straps, it's gonna be wild. Uh, the scaling laws.

• 18:48Jordi Hays?

  And you know Brad Gerson had to come in with a hundred of them.

• 18:51John Coogan?

  A hundred, yep, for sure. Uh, yeah, there's a, there's a crazy bull case for Nvidia in the information, uh, arguing it should be worth, what, 22 trillion dollars? That is a wild move. Uh, there's, there's a lot going on. Uh, the scaling laws holding is the most important part of this.

• 19:07Jordi Hays?

  Articles from the information finance, Nvidia worth 22 trillion? This old school financial model says yes.

• 19:16John Coogan?

  Uh, so, um, uh, yeah, the big news on, uh, uh, yesterday was, um, uh, Anthropic's new model Mythos. Uh, some really impressive statistics and anecdotes yesterday, both the model card, the benchmarks, and some, uh, stories about breaking out of, uh, of, a variety of, uh, uh, what, what, what do they call them? Wild gardens or, uh, test environments? Uh, what, what, what are those called? Uh, breaking out of the, I don't know, the simulation.

• 19:48Jordi Hays?

  Sandbox.

• 19:49John Coogan?

  The sandbox, yeah, breaking out of sandbox, sending emails, all sorts of stuff like that. Uh, the model preview is only available right now to about 50 companies that maintain critical infrastructure because the model is particularly good at finding zero days, uh, bugs and, uh, exploits in, uh, technical systems. And if they, uh, you know, they, they lead that, they leak that out before big companies have a ti- have time to go and address all the bugs, there could be serious, uh, uh, you know, serious ramifications for cybersecurity. And so, uh, key partners include Apple, Google, Microsoft, Amazon, Nvidia, JP Morgan Chase, Broadcom, the Linux Foundation, uh, Cisco, CrowdStrike, and Palo Alto Networks. They're all listed on the cybersecurity focus page for Project Glasswing.

• 20:32Jordi Hays?

  Chris Backy was having a little bit of fun because he noticed Anthropic put their own logo on the partner page, which is a little bit funny, but at the same time, it's kind of smart because a lot of people are just going to see the image quickly. And it's good to position yourself with the other companies.

• 20:47John Coogan?

  Yeah. So yeah, it is interesting. I mean, people have predicted that AI models would be particularly good at cyber attacks. And this was one of the main sort of vectors of AI fears. It feels like this is what maybe what Dario was referring to when he was talking about the end of the exponential, finding and exploiting software bugs is it's sort of perfectly in the sweet spot for coding agents and reinforcement learning, combing through piles of code tirelessly trying different exploits to find bugs, having a clear verifiable reward. Did you crash the system or not? Did you break into the system or not?

• 21:26John Coogan?

  This is very, it's a very clear binary signal that you can send to the model to determine, were you successful in breaking into that system? And it requires basically no time delay. There's no lag. So there was one snarky tweet I saw that was something to the effect of like, okay, then if it's so good, go cure cancer. But any application that requires a real world feedback cycle, even if it's just a few minutes of human interaction in the cancer example, you know, you're going to need to be testing the drugs in vitro in mice, in monkeys and humans at some point. Or even if you're just sequencing DNA or doing anything in the lab, pipetting anything.

• 22:09John Coogan?

  If it's even just a few minutes, all of a sudden, every iteration, every attempt is going to take a few minutes. And that's going to put you on just a wildly different exponential as opposed to being able to spin up a virtual machine with basically every single piece of software out there and then try every single exploit against every single piece of software. And you wind up with a ton of exploits and very, very bullish for cybersecurity that this is being done preemptively. There's a whole bunch of different discussions. Ben Thompson has a good piece on the whole decision to to release the model or not and stage it out and the go to market there, but it's.

• 22:50John Coogan?

  It's even even if the the bio research, the other impacts are on sort of a slower exponential. There's still so much opportunity in even a software only singularity. There's also risk in a software only singularity. We've seen this story before, though, a model that's too powerful to release, but then works its way out and has pretty moderate impact on the world. This was the story of GPT two, the story of of chat GPT. The question of, you know, is this the is this the model that's dangerous to put in the hands of people?

• 23:24Jordi Hays?

  Yeah, headline a headline from February twenty two, two thousand and nineteen by Aaron Mack. OpenAI says its text generating algorithm GPT two is too dangerous.

• 23:35John Coogan?

  Yeah, so there is there is a, I think Ben Thompson called it like the the boy who cried wolf syndrome. But the the mythos wolf, he says, there's a lot of skepticism about Anthropic's announcement. This tweet was representative from Bucow Capital bloke. Anthropic Anthropic's marketing strategy is so funny, like, ah, the government is treading on me. Ah, our models are so good, we can't release them. It would be too dangerous. Ah, someone stop me. I'm going to destroy the economy. The rolling of the eyes is exacerbated by the fact that Anthropic has reasons to make to not make Mythos widely available beyond a lack of compute. Another factor is surely trying to avoid having Mythos distilled by Chinese model makers.

• 24:14John Coogan?

  So there's actually two good reasons to to gate to gate access. And when you're looking at those logos, when you're looking at the world's largest tech companies, there's much more ability to to scale rollout, demand, set pricing. These companies might be able to pay more. The model is very expensive, but if you're justifying that against bug bounties for zero day exploits in your most critical system, when you look at like JP Morgan Chase, it's a bank like what is the price of finding an exploit in that system? It's pretty high. It's probably clears the token hurdle a lot. And and and if the rollout is is paced like evenly across all the different companies,

• 24:59John Coogan?

  they'll all sort of understand. That they're getting allocation inference allocation at the efficient price that that clears the cost to actually serve the model. So I do think the the systems, all of these 10 trillion parameter models will be released soon broadly. Then the main reason that an AI that's smart enough to find zero day exploits should be able to recognize that it's being used by a bad actor to find zero day exploits. And it's only been it's only been a few months since the last flurry of competing models from OpenAI, Anthropic and Google. And the next cycle is already off to an aggressive start. We had Meta. And then the other news is that Elon Musk announced that he is

• 25:41John Coogan?

  getting ready to do another larger model with XAI.

• 25:47Jordi Hays?

  He's got a few.

• 25:49John Coogan?

  He's doing seven models in training. Wow. That is a lot. Imagine V2, two variants of 1 trillion, two variants of 1.5 trillion, a 6 trillion model and a 10 trillion model. He says there's some catching up to do, but he says he will never give up, never. So he is continuing to grind and train more models. What else was in the reaction? There was a whole bunch of other back and forth. People seem split on.

• 26:16Jordi Hays?

  Mike from Also Capital, former guest, says, "We've decided not to release our latest investment strategy. It's so powerful. Releasing it might end the entire venture asset class as we know it."

• 26:28John Coogan?

  Yeah. And.

• 26:30Jordi Hays?

  Packy says, "You should release it to a handful of trusted partners so that we can harden ourselves."

• 26:35John Coogan?

  And George George Hott says, "Anthropic's marketing strategy, it's amazing. It's so powerful. It's terrifying. And the best part is you can't come. By the way, if Anthropic had any way to ship this, they would. Trained AI models are the fastest depreciating asset in history. GPT-4 cost $100 million to train two years ago and is now worth less than Qwen 3.5 B, Qwen 3.5 27B, 1 million. Sending the FOMO back. Clock is ticking, boys. It needs something like an NBL 72 to run at decent speed and even absurd API price. Doesn't cover it. There's more to be made on investor hype than API access. I just wish for honesty instead of a whole fake spiel about safety.

• 27:18John Coogan?

  Who remembers when GPT two, uh, 1.5B was too dangerous? And so, uh, lots of back and forth. Dean Ball has some more thoughts on Mythos. It's a longer post, so we'll let you go and read it. But, um, the main, uh, the main take is just, uh, the, you know, this is, this is technology that whether it comes from Anthropic or another lab, like clearly needs to go into the supply chain of the world and in the US government and the US, uh, economy, because, um, no one is doubting, even though some of the exploits were somewhat minor, uh, no one, no one disagrees that we need less cybersecurity. We want the most secure systems possible and we probably want a lot of competition between different companies to provide that service to the government.

• 28:00John Coogan?

  And so hopefully with, if the war comes to an end and there's, you know, different, uh, discussions can happen and, uh, you know, ice can thaw and there's a way to, uh, for these companies to work together. Even if, even if the, uh, even if the supply chain thing doesn't go through and then, uh, Anthropic can vend technology through Project Glasswing, through CrowdStrike, through, uh, Oracle and other partners, um, to, uh, to Cisco, so that at least the systems are secure because everyone wants that. So, uh, Dean Ball's been on an absolute tear. We should have him back on the show and talk more. Uh, he says, "A lot of people, including people in positions of authority, told us recently that models of Mythos's capability wouldn't be a thing,

• 28:43John Coogan?

  that models with obvious national security implications would not be forthcoming. Those people were wrong. There's nothing to do about it, but you should remember it." Uh, Mythos is the first model where theft of the weights by an adversarial actor feels like it would be a major deal. You better believe they will try and if they don't succeed with Mythos, they will eventually. "We are thoroughly in the era of the lab's best models. Way may well not be in public the way they used to. This is because of a combination of compute constraints, economic reality, competitive advantage and safety concerns. Three means the most relevant models may be decreasingly legible to the general public. And depending on the extent and duration of the coming compute squeeze, we could enter a market dynamic where the best models are only available to the highest bidder. And of course, that makes sense from a KYC and security perspective.

• 29:26John Coogan?

  In other words, where compute is a seller's market rather than a buyer's market." Interesting. Imagine competing firms in the economy bidding against one another for access to the best and most tokens and the frontier labs as in essence, kingmakers. The governance regime I have described above in four is not designed to stop that dynamic. And so there is a, there's a plenty of more takes. This was a full current thing cycle. People, Tenebra says, people keep talking about this like it's not blatantly obvious. Anthropic clearly has a system that's auditing open source repos for vulnerabilities using their unreleased higher power models and sending fixes for them without revealing their current level of capabilities. So they've been going around on GitHub and contributing

• 30:09John Coogan?

  pull requests to, to, to, to, you know, patch any vulnerabilities without disclosing exactly what model was being used.

• 30:19Jordi Hays?

  Uh, Bern Hobart.

• 30:22John Coogan?

  Yes.

• 30:23Jordi Hays?

  Is not excited about Fundrise. We had the founder on running ads for VCX, the public ticker for private tech. This is, he says, paying for an ad encouraging people to pay 6X net asset value for a closed end fund where the cost of bar is 400% is one of the things people will remember during the next bear market. Uh, yeah, I asked, I asked the, uh, the founder of Fundrise about this, like how you kind of like, is there another iteration of the, of the product that can solve for this? Fundrise like very clearly made a bunch of really good bets.

• 30:59John Coogan?

  Yeah.

• 31:00Jordi Hays?

  A few years ago.

• 31:00John Coogan?

  Yeah.

• 31:01Jordi Hays?

  And the fund has performed incredibly well. But the issue now is like, if you want access to these names and the only way that you have is to go through VCX, you're paying 6X what like the actual private market investors are paying?

• 31:18John Coogan?

  Yeah.

• 31:18Jordi Hays?

  And that just is like, I mean, it's a. I don't know, it depends how bullish you are on the names, but it's gonna be very, very hard, assuming that normalizes over time. It seems extremely unlikely that it trades at, you know, an insane premium forever.

• 31:33John Coogan?

  Interesting that they're running this ad on X. I haven't seen, I have X premium, so I don't see a lot of ads, I don't see any ads, but that does seem like the reasonable place to go to advertise a product like this. But yeah, it is, it is always, there's been a whole bunch of these like treasury companies that have traded above net asset value and it was always just a weird supply and demand dynamic. People want them and they're willing to pay way above. Hopefully they know the net asset value multiple and they're doing that willingly. I think, you know, consumer education, investor education is more of the critical, the critical question here.

• 32:16John Coogan?

  Well, Tebow over at Kodak is unreasonably excited about things. The next few weeks will be intense and fun. And yeah, Michael Greenwich says weeks, years, you know, it's gonna be an ongoing model mayhem.

• 32:33Jordi Hays?

  Vague maxing.

• 32:34John Coogan?

  Vague maxing and a lot of stuff going on.

• 32:36Jordi Hays?

  Yesterday was about token maxing, today is about vague maxing.

• 32:39John Coogan?

  Yes, yes.

• 32:40Jordi Hays?

  Let's go. Mickey Friedman says the current fear is that AI homogenizes culture and turns humans into passive consumers. One counterpoint in Go, human play showed very little improvement from 1950 to 2016 until AlphaGo beat Lee Sedol. Then, human decision quality jumped. Players started developing moves that were distinct from both previous human moves and from the novel moves introduced by machine intelligence. This seems more likely to me, fun times ahead.

• 33:07John Coogan?

  Lee Sedol is now a professor at UNIST. He is a special professor on a three-year term to conduct artificial intelligence research on Go specifically. He, yeah, if you haven't seen the Go, AlphaGo documentary, it is fantastic.

• 33:26Jordi Hays?

  Lee Sedol Go to Smoke.

• 33:28John Coogan?

  Yes, Lee Sedol. It is, it is such a wild. Ride watching the DeepMind engineers like, you know,

• 33:36John Coogan?

  it seems like they're genuinely surprised by the performance, like no one really expected it. But yes, this is a very interesting chart to see how much things changed in the post-AI era as people discovered new and interesting ways to differentiate from the models effectively.

• 33:56Jordi Hays?

  Yeah. Scoop from Steven Nelson, CIA used a secret tool called Ghost Murmur to find airmen in Iran.

• 34:05John Coogan?

  Yeah.

• 34:06Jordi Hays?

  Ghost Murmur pairs long-range quantum magnet- magnet- magnetometry.

• 34:12John Coogan?

  Yeah.

• 34:13Jordi Hays?

  How do you say that? Mag- sensors with AI to find human heartbeats. I was wondering this while they were, over the weekend, there was, you know, a search going on. It was like, how do you, how do you find someone? How does, how does somebody like, you know, an airmen that's down, send a signal that can be picked up by one group, but not?

• 34:34John Coogan?

  This is very odd. So there are some, there are some community notes on this, saying that quantum magnetometry.

• 34:41Jordi Hays?

  Magnetometry.

• 34:42John Coogan?

  I imagine that's how you pronounce it. Detects heart magnetic fields, and I believe this technology works in labs, but only up to a few meters, not 40 miles as claims. Has claimed fields decay with one over R cubed, making long-range detection implausible. So unclear if this is what worked, but isn't there, isn't, there has to be some sort of device that you could carry on your person, like in your shoe, like an air tag that can talk to a satellite almost? Like, you look at the Starlink receiver dish, it would fit in a backpack, but that's very high bandwidth. I imagine if you had something, I mean, there's sat phones that are the size of large cell phones.

• 35:26John Coogan?

  That was available in the 80s and 90s. You have to imagine that if you're just trying to put out a signal to GPS or a Starlink network, you must be, you must be able to shrink that down significantly to the place where it could be carried on your body. But it's probably classified, so I would be surprised if, if. It's just very hard to read into like what's real and what's not here. There is a different community now pushing back saying, "No note needed. This new technology is a classified system developed in secret by Lockheed Skunk Works and the CIA that was just used, revealed publicly for the first time. Naturally, its reported capabilities far exceed the known public state of the art. The note is relevant."

• 36:08John Coogan?

  So, it's, uh, yeah, it's very, very interesting. But good to see.

• 36:13Jordi Hays?

  All right, let's go over to Aaron Tan's post. Says, "Introducing Loom, a lamp that does your chores. Order now, shipping this summer." Let's see the video.

• 36:38John Coogan?

  That bed already looks fully made. What chores are you gonna do?

• 36:41Jordi Hays?

  Just dropped some laundry off.

• 36:43John Coogan?

  Oh, okay, you have to drop the laundry first? Wait, they can do that? Wait, does it have fingers in that? Like, what is it put on the record? Yeah, what is in the...

• 36:54Jordi Hays?

  You can see it has a little claw.

• 36:55John Coogan?

  Oh, it has a claw inside? Oh, okay. That is so funny to have a humanoid robot play music on a physical record.

• 37:12John Coogan?

  The folding t-shirt is the touring test of humanoid. It's for real.

• 37:18John Coogan?

  Pixar lamp quaking in its boots right now.

• 37:34John Coogan?

  Nice video. Good color grade, nice warm tones, friendly. Doesn't feel dystopian. Feels delightful. Did you get one of these?

• 37:43Jordi Hays?

  I think, I think we should get one.

• 37:45John Coogan?

  Yeah, like I, I, not in my house.

• 37:48Jordi Hays?

  I think we should get one. We should get one as a team.

• 37:51John Coogan?

  You have some clothes over there on the wardrobe rack.

• 37:54Jordi Hays?

  Rooting, rooting, rooting for Aaron and the, and the Loom team. Uh, very, very unique form factor. I mean, I just think the, uh, and, and impressive timeline for shipping. Uh, hopefully, yeah, shipping, I'm reading this as like actually shipping, not shipping like another, uh, site to order because you can order already. But yeah, it'll be, uh, very interesting if it can, if it can reliably fold clothing. It could be, it could be enough, right? So the, the, the benefit here is like people already want lamps, I'm assuming for their, their bedroom. If you can buy a lamp that's reasonably priced and then it could also has the benefit of just a simple thing like folding clothes, there could be, there could be a market here.

• 38:37John Coogan?

  Yeah. I feel like, I don't know, even just putting pillows back on the bed, uh, even just like really basic things. I mean, even, uh, there are probably applications like the Roomba did so well with such a minimal, such a minimal scope. There's, there, there must be something, uh, I would, I wouldn't be surprised if even, even in between this and fully folding the clothes, just remaking the bed properly feels like, uh, something that consumers might actually pay for and, and allow for, you know, the flywheel to start spinning. Um, obviously lots of security considerations since there's a camera there and whatnot. They'll have to do a lot of cybersecurity and figure out that,

• 39:19John Coogan?

  but people already have cameras all over their homes from Manit and child monitors, baby monitors and that type of stuff. So, uh, I'm, I'm optimistic about this and I think they did a great job promoting it. Uh, there is a story in the New York Times from none other than John Kairu, who, uh, who blew the, blew the story wide open on Theranos. He, uh, says the mystery of Satoshi Nakamoto, the Sudonimus, uh, Sudonimus, uh, inventor of Bitcoin has remained unsolved for 17 years. Not anymore. Read my 18 month investigation to find out who Satoshi really is. And he says it's Adam Back who says, who posted directly, "I am not Satoshi, but I was early in laser focus on the positive societal implications of cryptography,

• 40:04John Coogan?

  online privacy, and electronic cash. Hence, my 1992 onwards active interest in applied research on e-cash, privacy, tech, on cypherpunk lists, which led to hashcash and other ideas." John Kerry ruined his New York Times research finds like Aaron Van in his Genesis Block book, "Many interesting Bitcoin analogues in the early attempts to create decentralized e-cash, in effect, prototype ideas, trying to figure out a Bitcoin-like thing, including P2P, BGP, and proof of work." For his quote, "I'm not saying I'm good with the words, I'm not saying I'm good with words, but I sure did a lot of yakking on these lists, actually." The broader context was my observation that because I was talkative on the list

• 40:48John Coogan?

  and known to have an active interest in e-cash, there is some confirmation bias in finding my comments frequently on e-cash topics. So he has, he has said, "We are, we are all Satoshi. I am not Satoshi." But it's a, it's a very interesting story that we'll have

• 41:02Speaker 02

  You just created a million Satoshis.

• 41:04John Coogan?

  Truthfully, How I Yelled Harry's joke and Steve Buscemi has been revealed as the Bitcoin founder, not Satoshi Nakamoto. Well, we have our first guest in the waiting room, Luther Lowe from Y Combinator. He is the head of public policy and we are going to be talking to him about Vibe Coding. Luther, how are you doing?

• 41:20Speaker 03

  Hey, guys. Great to see you. Congrats on the acquisition.

• 41:24John Coogan?

  Thank you.

• 41:24Speaker 02

  Thank you. Great to have you on.

• 41:26John Coogan?

  Can you kick us off with a little bit of an introduction on yourself and what you do day to day at Y Combinator?

• 41:31Speaker 03

  Sure. So yeah, I'm the head of public policy for Y Combinator. I'm based in Washington. And Gary created the role when he started at YC and really his observation many years ago was we, Gary and I had actually met in Washington. We were sitting around the table at some kind of White House meeting and he said, you know, You go to Brussels, you go to Washington, and the largest tech companies have lots of representation. But little tech doesn't have a seat at the table. And that was actually the first time I'd heard that phrase, little tech. And Gary actually kind of coined that phrase. You went back and you look on X Twitter, he had said that a number of times years ago.

• 42:14Speaker 03

  And so, you know, my role is to really like help the founders navigate Washington, Brussels, the state capitals, advocate for pro little tech issues in the broader ecosystem. And yeah, just really do everything I can to help the founders.

• 42:31John Coogan?

  And what's the, what is, what is your view on, on vibe coding, the app store, the boom? I was, we were talking about it yesterday. There's, you know, there's a whole bunch of stories of where it feels like we're getting close to the one person, absolutely massive company, whether that's GMV or revenue or something. It's like, it's starting to happen. But I was looking at my home screen. I don't have an app that is new or vibe coded. Maybe it'll come in a boom in video games. But how have you been tracking? I mean, I'm sure you see this at Y C, just the, the, the growth of broad app development.

• 43:09Speaker 03

  Yeah, I mean, I think I would almost kind of take a step back. It sort of reminds me of when I first started geeking out on the internet like 25 years ago, where you saw the, the rise of sort of what you see is what you get HTML based or browser based HTML editors. And that allowed anybody, that kind of democratized the process so anybody could create a webpage or a website. And now we have tools that allow anybody to create a web service or an app. And so. The difference, though, between now and 20 years ago is that today we have basically

• 43:50Speaker 03

  these two bottlenecks in the form of Apple and Google that sit between the creation and the potential users of those services.

• 43:59John Coogan?

  Yeah.

• 44:00Speaker 03

  The Apple App Store is basically like the worst DMV in the world. And so we're seeing not only sort of, you know, there's reports all over X about this, but if you just barely kind of look around for it, you're going to encounter lots of folks that are trying to develop apps and services that are not being accepted or getting kicked out. And then it's not only that kind of like app layer, it's sort of the layer up of the tools like Replit and anywhere that are facing, you know, the inability to update their apps. And so it's a real problem.

• 44:37John Coogan?

  Yeah. What, when you say the worst DMV in the world, are you actually referring to, we saw a chart where the number of App Store submissions is spiking, it's going exponential, and that feels very logical because people, I mean, we've been building vibe-coded web apps here. The next step was, hey, maybe we should actually get one of these in the App Store. But very quickly we realized, okay, well, it's at least a two-week review process. It could be a lot of back and forth. It's a new hurdle. We need to, you know, actually compile it to Swift or Objective C. It's a whole different process, probably doable on a technical side, but we might be hung up there.

• 45:15John Coogan?

  But are you seeing an issue with actually getting just a one-off vibe-coded app approved? And then I think we should talk about the apps that help you vibe-code new apps, because that's a whole separate thing.

• 45:30Speaker 03

  Right.

• 45:31John Coogan?

  But just in terms of like, I want, you know, a special recipe app and I vibe-code it and I want to get it on my phone and I want to send a link to the App Store page to a friend. Is that slowing down? What's slowing that down? Is that going to be a permanent thing or do you think Apple can just adjust there?

• 45:49Speaker 03

  Well, I think the problem with Apple, I mean, it's, this is a sort of perennial issue with Apple is their culture is one of just absolute control. And I think that we have reached this inflection point where, you know, if I've got my MacBook in my lap, I can open it up, I can download any app I want, I can open terminal, I can do all kinds of crazy mods, but the second that that form factor fits in my pocket, all of that freedom goes away. And I'm living in sort of North Korea in terms of what I can do with my, with my stuff, with my property.

• 46:22Jordi Hays?

  Yeah.

• 46:22Speaker 03

  And so I think the, you know, this is, you know, sure, I could, I could launch something in test flight if I want some kind of little bespoke,

• 46:30Jordi Hays?

  Yeah.

• 46:30Speaker 03

  uh, you know, training app or something, but God forbid, if I want to share it with friends or I want to, you, you know, make some money, uh, because I've created sort of a differentiated product that's actually interesting that people want, um, I've got to pay this ridiculous vig to Apple. So for them, it's actually about, the reason they want control is because it's, it's about App Store revenue. Uh, and also they have competing products. It's an anti-competitive thing because they've got Xcode and they've got their own dev tools that they're starting to kind of, uh, kind of roll out their own sort of vibe coding services. So the longer that they can kind of, uh, delay and slow roll, uh, both the developers and the, the tools that allow the vibe coders to create stuff.

• 47:14Jordi Hays?

  Your, your theory is that they'll, they want to basically make their own version of Replit or anything that they have in, you know, total control over. And they can make the argument, they could probably make the argument that this is better for users, it's more secure, it's better for privacy, less like malware risk, whatever, whatever it is, uh, but they,

• 47:39Jordi Hays?

  yeah, anyways, I mean, they, they give you, there's already like, they give you like pretty. Meaningful autonomy over like shortcuts and other things like that. It's not that unbelievable that they would want to actually make something here.

• 47:51Speaker 03

  But but it's like embarrassing like, I mean, Syria is embarrassingly stupid. We've had sort of LLM consumer facing services like, you know, Sam brought them down from the mountain, you know, whatever. Are we almost three years ago? And I, you know, like Siri still can't do like basic subtraction. The other day I asked it for like, what was like, you know, 17 days from, you know, this particular date. And it was like, do you want Google to consummate that query? Do you want ChatGPT to do it? It's like, why can't Siri do it? And and so you've got all these, this just lots of energy. There's lots of Y C companies that are trying to take a crack at creating kind of Siri alternatives.

• 48:33Speaker 03

  But until kind of this self preferring is addressed, I think at the sort of policymaking level, and it's not just Apple self preferring, it's Google, it's all of them. Then we're not going to really be able to see the the fruits of this sort of LLM revolution diffused into the hands of consumers.

• 48:51John Coogan?

  Do you think the the the side button to trigger the helpful assistant that is currently mapped to Siri and can interface with ChatGPT and is, you know, reportedly going to interface with Gemini soon? Do you think that there's any actual chance that that becomes remappable at like a, you know, pick your browser, search engine level in the in the OS, even if it's a even if it's defaulting to Apple's stack? Do you think there's any motion there? Because that feels like the logical analogy and what as an Apple consumer I would like, I'd like to be able to pick my assistant, but be able to assign the hardware button. But where do you think that actually goes?

• 49:38Speaker 03

  Look, there is no technical reason why we shouldn't have a flourishing ecosystem of third-party AI assistant developers competing to do all kinds of interesting stuff. You guys should check out a YC company called Blue. It's heyblue.com. They have this amazing demo on their website and they talk about, and basically the guy's sitting in his car, and he's driving up the 101, and he's saying, "Hey, go through my Slack messages from last night." "Okay, cool. Jerry needs a document. Share it. Get into Google Docs and share that with Jerry, but make it read-only." I mean, look, I like my third-button having perplexity and being able to queue that, but if I can't access those deeper OS API

• 50:22Speaker 03

  commands, then it stops being that interesting pretty quickly. Anyway, the Blue guys, what you learn, you're like, "God, this is magic. How'd they do this? How'd they figure this out?" You realize it's a USB-C dongle that they've, basically 70% of the company is hardware. They're doing soldering irons. They're flying to China, negotiating with distributors. It's like, why is this a hardware company? There should be 50 different companies like this duking it out to create something that's better than Siri, because Siri clearly is not cutting it. And I think the antidote to this, frankly, is, you know, we just announced yesterday a coalition of 275 startups and VCs in support of the BASE Act. Yeah.

• 51:07Speaker 03

  It's the Banning Anti-Competitive Self-Preferencing by Intrenched Dominant Platforms Act bill. And 1074 by Scott Wiener, not to be confused with Scott Wiener's ill-fated bill 1047 from a couple of years ago that had to do with AI regulation. This one we're really excited about, because basically it calls upon companies that are a trillion in market cap or above, 100 million US users, to end this type of egregious forms of self-preferencing. We're totally fine with innocuous forms of vertical integration. In fact, most of the time, that's like a great thing in technology products, but...

• 51:47Speaker 03

  Yeah, when you've got, you know, the GitHub COO last week said that commit rates, if they stay linear, are on track to be 14x what they were last year.

• 51:58John Coogan?

  Wow.

• 51:59Speaker 03

  Like, you know, something's got to give here.

• 52:01John Coogan?

  Yeah, there's going to be more software. Everyone's building software. There's going to be a ton more software. How do you think the vibe coding apps, apps that go in the App Store and allow you to build more apps with that particular app, how do you think that will shake out? Because that is a place where it feels like Apple has spent a lot more time making the case. When I think about the Siri button, I feel like they haven't made a strong case for why that can't map to a different app that's already gone through approval. But when I think about the consumer protections and privacy that comes with knowing that the software that you download from the App Store has been audited, they've made a pretty strong case there. What's the counter argument for why Apple should open the floodgates of apps that allow

• 52:46John Coogan?

  anyone to vibe code an app and deliver it to anyone else's device sort of willy-nilly?

• 52:53Speaker 03

  Look, I don't think that anything is gonna, in terms of creating consumer outcomes that maximize privacy, competition, all the great things that you want, I don't think any mechanism is going to work better than good old competition. And so that means allowing for sideloading. It means allowing for alternative app stores. You know, we make fun of a lot of European regulation, but the Digital Markets Act has actually done a pretty solid job with that. And so like in places like Japan and Europe, if you don't, if you are just hitting a wall with the worst DMV in the world, you can just go to the alternative app stores and I as a consumer can decide to download one of those and use that as a way to access a whole other ecosystem of services. And they have their own vetting processes.

• 53:38Speaker 03

  And I think, again, competition is going to be the mechanism that actually enables better privacy, better consumer protection. And I think what we found historically with with Apple, and we saw this a lot a few years ago with Beeper, which was a YC company that had interoperable messaging. It saw the blue bubble. Exactly. Eric Majakovsky solved the blue bubble, green bubble thing, basically made it where it's not awkward for you to buy an Android and like, you know, Kool-Aid Man into your, you know, college group chat and turn the whole thing green.

• 54:10John Coogan?

  Yeah.

• 54:10Speaker 03

  He fixed that. And of course, you know, what does Apple do? They said, no, you were, you know, Android users don't get that. We've got to basically reduce security to this lowest common denominator.

• 54:20John Coogan?

  Sure.

• 54:20Speaker 03

  Like, you know, SMS, RCS standard. So there's no, it's pretextual. Like, we can have choices. We can have nice things. And little tech's trying to build it. But I think policymakers have got to do a better job at, you know, ensuring that the biggest players are not kind of egregiously putting their thumb on the steel.

• 54:39John Coogan?

  Yeah. Last question. What else are you tracking in DC? It feels like with the AI boom, there's a lot of new company formation. I'm sure you're seeing that on the YC side, but we see it every day on the show. Are there, are there policy initiatives to encourage entrepreneurship that you're tracking? Is there anything else on like the small business side that you find interesting these days?

• 55:01Speaker 03

  Yeah, I think, you know, there's, I would say where I think the Trump administration's doing a good job is, you know, they've done a lot to sort of advocate for the American AI stack and sort of encourage entrepreneurs to like interface with government and become, and they've, you know, put out sort of bids for the, where the government is a buyer of these tools. And they've been very proactive and have a great relationship. You see like lots of renewed interest in defense tech and dual-use tech. I think where I wish that

• 55:43Speaker 03

  there was more work, and I think they could probably be doing a better job, is thinking about how do we make sure that the United States is brain draining the world and bringing in the top talent and making sure that the smartest people in the world are building companies here. I think that that

• 56:03Speaker 03

  That's where if I could change anything, I would say, oh, they could do a little bit better. But I would say, you know, they have been, they've been very thoughtful. The president's talked about little texts in his tweets like, and, and I think, you know, this is not a partisan issue. We want to have a thousand flowers flourish. But it is, yeah, I mean, I think getting the tech, the tech talent piece with the sort of being bullish on AI that, that I think is going to get, and, and also the competition piece, getting those things right, I think that's going to put us in a position to be really amazing here.

• 56:41John Coogan?

  Yeah, I love it. Well, thank you so much for coming on the show.

• 56:44Jordi Hays?

  Yeah, great to meet you.

• 56:45Speaker 03

  Thanks for having me, guys.

• 56:46Jordi Hays?

  Appreciate the hot takes.

• 56:47Speaker 03

  All right, you too.

• 56:49John Coogan?

  And before we bring in Dan Primack from Axios, we have an exclusive clip from his interview with Kalshi CEO Tarek Mansour on the Axios show, which we will be discussing with Dan after we play it here. It's about a minute and a half, so let's listen to this.

• 57:06Speaker 04

  For customers to lose. Actually, the proof of that is that, you know, when a customer wins on a traditional sportsbook, they block that customer.

• 57:16Speaker 05

  The CFTC chair, who supports prediction markets being legal, supports federal framework, et cetera, said recently that one of the, when he was asked about this, he said, well, part of the difference is that when you walk into a casino, there's all sorts of entertainment, right? There might be shows, there's food, there's drink. Said so casino, betting in a casino is different than, than betting in Kalshi, but it's not necessarily different than betting on a sportsbook app on my couch. There's no entertainment difference.

• 57:38Speaker 04

  There's big fundamental differences, goes back to the market mechanic. Like, one of them is essentially a product that is designed for customers to lose. Actually, the proof of that is that, you know, when a customer wins on a traditional sportsbook, they block that customer because those winnings are coming from the business model, the business itself.

• 57:55Speaker 05

  If they win enough, yeah.

• 57:55Speaker 04

  If they're enough, or if they win, really, if they win consistently, if they do research, if they get informed.

• 58:00Speaker 06

  If they're good.

• 58:01Speaker 04

  If they're good, exactly. And if they're not, actually, you get them promos and you figure out how to bring them back. And there's kind of a bit of this sort of like, I think, we call like kind of marketing tactics to bring these people back. It could be like entertainment or promos and so on and so forth. That does not exist in prediction markets. It is a fundamental difference in structure, where actually a lot of the people that win, the people that are doing research, are getting informed, that are traders, do come to prediction markets. This is where the value proposition is strongest, because prediction markets do reward them for being right.

• 58:31John Coogan?

  Well, we have Dan Primack here with us today. Dan, how are you doing?

• 58:37Speaker 05

  Doing well, guys. Not as well probably as you are, but I'm doing well.

• 58:40John Coogan?

  Thanks for being here.

• 58:42Jordi Hays?

  See you.

• 58:42John Coogan?

  So, give us an update on this interview, what you were looking to learn from it, what you think the conversation, where you think the conversation around prediction markets will go from here.

• 58:55Speaker 05

  I think it was interesting, the day we did this, we did this on Monday in New York City, and it was really making hour or two after New Jersey, a judge in New Jersey, and basically an appeals court judge, so kind of the highest judge so far that's dealt with this, basically gave Kalshi the green light to go forward. I mean, I think ultimately, prediction markets are going to go to the Supreme Court. I think both Polly Market and Kalshi thinks that. I also think they're probably going to win in the Supreme Court. The law really is on Kalshi's side. They have done a pretty good job, kind of being in step with regulators, and granted, they were, it was a little more complicated with the Biden administration, but they sued the CFTC. They won that lawsuit, it's the reason why they have elections on the platform. I think if something is going to stop or change the way prediction markets work, that's going to have to come out of Congress.

• 59:40John Coogan?

  So, yeah, what's the next step?

• 59:42Jordi Hays?

  Yeah, and they benefit from having their adversary are casinos and sports books, which are not exactly the kind of groups that Americans want to stand up to defend. You know, in March, it's time to hit the streets and march for the legacy sports books.

• 59:59Speaker 05

  I mean, that's some of it, right? So, obviously in Nevada, which is one of the few places where Kalshi is actually banned, because the judge upheld an injunction. Yeah, that's the casinos, that's maybe some regulatory capture. The other folks who are against this, though, are folks who are just anti-gambling in general. And I do think you are seeing a bit of a groundswell of that politically, and I think it's bipartisan. You know, some of the bills that have actually come out have been coming from Democrats. But, for example, the state of Utah doesn't want this, and they don't want it to protect casinos. They don't want it because they don't want people betting, period. And they sure don't want it. On phones where it's so easy to do and we did in this interview on the Axios show which drops tomorrow, we did talk about the addiction piece of this and kind of the broader societal

• 1:00:40Speaker 05

  issues, which isn't to say what Calci is doing illegal. There are questions about is it promoting, not immorality, but is it enabling addiction?

• 1:00:48John Coogan?

  And what are the proposals for, because this is not regulated as gambling and it seems like it will continue on that path, is there any motion to bring some of the restrictions that apply to traditional gambling over into this new regime?

• 1:01:06Speaker 05

  No, no, and I mean, that's the complicated thing here. And I did ask them, is this basically a loophole? For example, in California, in Texas, the two biggest states in the country in terms of people, right? You can't try to open DraftKings or FanDuel, it doesn't work for you because it's not allowed there. Calci will allow you to bet and you know, I think Tarek or Luana said about 70% of their volume last month in March was sports betting, which is lower than it had been in February, but you're still talking about $13 billion of volume last month. So it's a big number. You know, it's a loophole. They have figured out a way to basically get around sports betting laws and I appreciate that the backend is different. They make a very compelling argument for why legally they're allowed

• 1:01:49Speaker 05

  to do it and I agree with them. But the reality in the end is, if I'm betting on the Celtics-Nicks game tonight, I don't really care what the backend looks like. I care about my money if I win and the fact that I'm able to do it.

• 1:02:05John Coogan?

  So is federal preemption like sort of baked in at this point? Or is there some sort of hybrid rule set where this could go back to the states and states could make their own rules? Because it does feel like there's a pretty wide set of opinions state by state on how different communities want to engage with this particular product.

• 1:02:28Speaker 05

  Right now, it appears federal preemption is going to win the day. For starters, the Trump administration, specifically the CFTC, which is what regulates this. This isn't regulated by the SEC, it's the CFTC. They are all in unpredicted markets. Mike Selig, who is the current commissioner, he is on the side of CalGy. I assume will be on the side of polymarket when they eventually really come to the US. And it does make a certain amount of sense, and there is some historical precedence here. A lot of commodities which are traded, and that's kind of what they're arguing, that these are kind of commodities in a different name. There were lawsuits 100 years ago arguing the same thing. This is crazy speculation. The reason why I say this could go to Congress, there are two carve-outs to that. One is a weird one. It is onion futures.

• 1:03:12Speaker 05

  Onions, not pork bellies or something else, onions. Because at one point, a long time ago, there was a ridiculous speculatory like

• 1:03:20John Coogan?

  Bubble.

• 1:03:20Speaker 05

  A lot of people lost a lot of money on onions. So Congress passed a law saying you can't trade onion futures. And I think I'm right in saying the other one is related to box office returns, which is why if you're on CalGy, you can't bet that a movie is going to make 20 million bucks, but you can bet on its rotten tomatoes.

• 1:03:35John Coogan?

  That's so funny because I've never been like a sports better at all, but I did participate in a fantasy movie league for a while that had no financial incentive whatsoever, but you would construct a hypothetical movie theater, pick, okay, Project Hail Mary is going in the first slot, and then they would have the box office returns. But it was all just for fun with a bunch of friends.

• 1:03:55Speaker 05

  And maybe it still exists, but back in the early, you know, 2000s, there was something called the Hollywood Stock Exchange, which again, wasn't for real money, but people did that. It looked like a stock market.

• 1:04:04John Coogan?

  Yeah, yeah.

• 1:04:04Jordi Hays?

  Do you, so other countries have created rules like, you know, you can't advertise gambling during, you know, these hours, and there's a bunch of different kind of rule sets around it, even in places where gambling is legal. Do you expect any states to pass laws that say you can't advertise commodities trading platforms

• 1:04:27John Coogan?

  Yeah.

• 1:04:28Jordi Hays?

  during

• 1:04:29John Coogan?

  More like FCC as opposed to CFTC.

• 1:04:32Jordi Hays?

  Yeah, basically like not targeting like sports trading, which, you know, the CalGy's and the polymarkets are doing, but effectively saying like, hey, we know these are going to be the biggest spenders,

• 1:04:40John Coogan?

  Sure.

• 1:04:40Jordi Hays?

  and we don't want to tolerate. Or encourage this type of activity.

• 1:04:46Speaker 05

  I mean, you you may see that and then that gets fought out in court. I you know, I obviously, again, you know, you on the federal side, you know, it's interesting. It's not just Calci fighting back against these lawsuits. The CFTC itself, there's three states, Arizona, I'm gonna mess up the other two. I think Connecticut is one. There were three states who have tried to ban Calci and the CFTC itself has come in to sue. So I could see the FCC coming in to try to sue i- if such laws were passed. It would be interesting. I mean, I do think part of, well, part of a lot of betting, despite what we saw several years ago with DraftKings and FanDuel, you know, on every billboard and every advertisement, an enormous amount of this is still word of mouth. You know, people talking about it. People, I will tell you, when we were doing this interview, most of the crew, you know, the camera folks and the and the sound folks hadn't heard of Calci before we did this.

• 1:05:29Speaker 05

  And when it was over, I I was in the corner, kind of packing some stuff up, and I heard them at the table having lunch. They were all not making bets, but they were flipping through the app and they were talking about different bets that were on there and they were fascinated by it. It's, I I don't even, forget addiction, it definitely fascinates people because people have always, you know, in our lifetime has been able to buy stocks. You can trade on, you know, the price of oil, not on, you know, not on who's gonna win an award or really events, you know, non, non securities related events.

• 1:06:00John Coogan?

  Yeah. How do you think about that that bifurcation between securities related events, non securities related events? Has there been robust enough research on how much of prediction market activity is is sports related or sort of less like positive sum, more zero sum situations? Because I would have to imagine that the the the level of engagement varies by category. Like, there were a lot of people that were interested in tracking the presidential election, but that's not something that someone's doing every single day, whereas there's always a sports game somewhere.

• 1:06:38Speaker 05

  There is. So they said again about, during the interview, they said about 70% of their volume last month was sports. In February, that number was higher. There was obviously a Super Bowl in February. That changed. There was March Madness last month, but not as big a deal as the Super Bowl. 70%, that's a lot, right? That's the volume. They make the argument in the interview, you know, that one of the reasons why, I mean, obviously for Cal She, that's good, right? That's more users, that's more fees. That's how they do it. They also argued that the sports volume creates more liquidity on the platform for the more esoteric bets and thus you need sports in order to have the other stuff. I will tell you, I do get the sense that if they could have the same valuation and the same revenue and have no sports, they'd be fine with that and probably thrilled with

• 1:07:21Speaker 05

  it. But it's not how it works. The last thing I'd say about this, the problem or where sports could become a little legally complicated for them is this issue of entertainment, right? The, Mike Selig, the CFTC Commissioner, and I mentioned this during the interview, he on CNBC the other day, made a comment about how, well, this is different than a casino because a casino is providing entertainment, you know, and it was in that clip, right? There are shows and all the stuff. Well, there's not a huge, but a sporting event is by definition just entertainment, right? Whoever wins that basketball game tonight, except for the players and the gamblers, it doesn't mean anything. No, Goldman Sachs isn't making trades based on if the Celtics win tonight. You know, nobody's buying.

• 1:08:02John Coogan?

  I think, doesn't Point72 have a desk? Or there's some hedge fund that I think does have a sports trading desk.

• 1:08:08Speaker 05

  Right, and that's kind of part of the argument they make. But in terms of this idea that the Cal She will put forth, which I agree with, that understanding events and events market can help people better understand the world. There's what, 15, 18 baseball games tonight? None of those are going to change the world, even in a tiny way, except for the people who are in the ballpark, maybe be happier or sadder by a couple more songs.

• 1:08:31John Coogan?

  Yeah, at the same time, yeah, I mean, I completely, I completely agree with you. But there is something about when you're about to turn on the Super Bowl and you want just a really clear read on who's more likely to win. Like, it is easier to understand just a straight percentage than like a line and points and all of that, like, just for a complete novice. But that's a different.

• 1:08:53Speaker 05

  It is. And they'll make the, and they make the argument correctly that they are not, they're just taking a piece of all of the action, right? They're not betting against you. They don't care if you win. Cal She doesn't care if you win or lose. They just care that you play. Sportsbooks obviously want you to lose.

• 1:09:06John Coogan?

  Yeah, yeah.

• 1:09:07Jordi Hays?

  Yeah, I I had a very eye opening conversation with the the CEO of a unicorn company who I of course will not name, but I was shocked at how how invested they were in sports gambling broadly. Like at like, we just had dinner, we were hanging out and they had like, tons of different parlays across every different app.

• 1:09:30John Coogan?

  Sure.

• 1:09:30Jordi Hays?

  And they and they would show me like, well, when I'm in this state, I use this app. And when I'm in this state, I do this app and this app. I have to take my funds off the platform every night because I don't trust that it's not going to get, you know.

• 1:09:42Speaker 05

  They win money doing this?

• 1:09:44Jordi Hays?

  I don't know. I don't know. I was just like, I was just like, wow, I embarrass on this company because the CEO is spending all their time, you know, doing, you know, 10 leg parlays on all these different apps and you guys haven't raised a round in in years.

• 1:10:01Speaker 05

  Can I say though, one thing I I learned in the research for this and we talked about it a bit and I should have probably known this, one kind of user difference between the prediction markets and the sportsbooks is that parlay issue and specifically, every bet on Kalshi goes to the CFTC and has to get approved and CFTC has 24 hours to approve it. What that means practically is while you can take a bet on the game tonight, because you know, there's going to be a game tonight, you can't do what you can do on DraftKings, say, the next pitch is going to be a ball, the next pitch is going to be a strike. Because there's obviously you have that 24 hour, they don't know there'll be a next pitch necessarily. So there's a little less real time sports betting than there is on the sportsbooks.

• 1:10:39John Coogan?

  But but they are because they know the Super Bowl is going to happen and they get that contract approved in advance, you can live trade that contract up till the last second of the game. And so that that does satisfy a little bit of that, which is again, much higher frequency than, oh, I want to gamble on the Super Bowl, I'm going to fly to Las Vegas, place a bet at a counter, wait in line, sit down, watch the game, go and collect my winnings. It's a very, very different equation. How have you processed just so it feels like we all just agree that gambling is addictive.

• 1:11:14John Coogan?

  And I think that's reasonable. I don't know where that comes from, whether that comes from like science or law, but it all feels reasonable. But we're going through this again with social media, whether social media is addictive. How have you processed the social media addiction trials? And then the new gambling app addiction question, like, are these linked at all in your mind? Or how have you been processing the social media question?

• 1:11:36Speaker 05

  I mean, I'm obviously not a doctor. I don't think you guys are doctors. I mean, there's definitely, we've all, I think, read about kind of the dopamine hits and look, that you get from not posting on social media, but when you get a like or when you get a reply on social media. Gambling, I mean, there's obviously a dopamine hit when you gamble, right? You know, your person hits the basket, you win the game, you get excited. I mean, obviously, if you have a lot of money on it, you get excited for different reasons. But just even, you know, I'll admit, I use some of these sports betting apps sometimes when I, if I'm watching like my hometown team play. Dirty dad, dirty dad.

• 1:12:07Speaker 05

  Maybe, maybe a few times, but the leagues, the leagues knew what they were doing, right? They knew that if there's a blowout, you generally turn it off. But if you're waiting for your guy to get 20 points, well, you might stick it out a little bit more.

• 1:12:20John Coogan?

  I didn't realize that. I didn't realize that. But so back to the social media question, have you been tracking any of that and what that means for the venture community or startups? Or really, any knock on effects that you've tied to the trial? Because there was that decision in Los Angeles, the actual fines for YouTube and Meta seemed very low, but it was the whole chain of more cases coming. And it just feel, it just felt like the first time we actually had a full decision that the judge said, yes, this is addictive.

• 1:12:52Speaker 05

  Right. So, right, the lack of money is notable, right? Because it was also a single plaintiff, right? So I mean, for theory, that's a lot of money for one person. The big question going forward is, can an attorney or can a group of attorneys get a class together? And you've seen a bunch of advertisements, I've seen a bunch of advertisements all over the place, you know, were you harmed? Were you under 18? They're clearly trying to put a class together. A judge would have to certify that class. That's, I think, what Meta, YouTube, etc. are worried about, understandably worried about, because it's one thing to have a single plaintiff, but that sets a little bit of a precedent. If you can have that same case with 100 plaintiffs, or 1,000 plaintiffs, or 10,000 plaintiffs, that money then starts to become real. And I think that's kind of the next step here. And we have to see if lawyers can get that class together, if a judge

• 1:13:35Speaker 05

  will certify them, and then whether another jury and judge will go along with what we just saw.

• 1:13:40John Coogan?

  What are you tracking in the venture markets broadly? We were going back and forth on the impact of

• 1:13:45Jordi Hays?

  Yeah, last time we were on, yeah, we were asking you about potential impacts to

• 1:13:51John Coogan?

  Fundraising.

• 1:13:52Jordi Hays?

  Fundraising outside of, in the Middle East even, and you said, I believe, like, well,

• 1:13:58John Coogan?

  We're in sort of a new cycle of like, the AI is not a bubble thing, but how are venture funds processing and how are LPs thinking about it? Like, what are you tracking?

• 1:14:06Speaker 05

  Yeah, on the Middle Eastern side, it does not seem that money flows have really stopped. It's been explained to me is calls sometimes take a few more days to come back than they were. Things aren't quite as instant, but there's been nobody who's said, you know what, we're shutting off the spigots for a while. Call us, call us in June. Like, that hasn't happened. And to be honest, even the last week or two, you've seen some deals and agreements that have come, like with Saudi PIF, not just limited partners into venture capital funds. There was a big private credit partnership that got announced yesterday, I think, with Saudi PIF. So clearly, deals are still happening. Venture fundraising as a whole, though, has become, it's not even become, it is still really bifurcated, right? You still have the haps and the have-nots and these massive multi-stage firms that are

• 1:14:48Speaker 05

  gobbling up most of the money. And on the AI bubble side, I mean, every, it's funny, almost every venture capitalist, and certainly the industry as a whole, is just looking at three things, right? The IPOs of SpaceX, Anthropic, and OpenAI this year, right? Because that can, those, if successful, can solve all the problems that they've had for the last several years. And SpaceX goes first.

• 1:15:09Jordi Hays?

  Gambler's mindset. Make it all back in one trade.

• 1:15:12Speaker 05

  Well, it used to be VCs used to talk about home runs. This is now like the grand slam in the bottom of the ninth to win the World Series, right? And everything else. And that's what they're banking on. And there's not a huge IPO pipeline, for example, other than that. You know, we had a story meeting this morning, and somebody asked me, you know, well, with the ceasefire, does that mean companies that were prepping IPOs are going to, you know, start back up again? I didn't see a huge number of companies that were prepping IPOs. There were some, but it's not like there was, it's not like from Liberation Day last year when you had five or six companies that were ready to price and then stopped.

• 1:15:44John Coogan?

  Yeah.

• 1:15:44Speaker 05

  There's not that much out there right now. Again, outside of those big three.

• 1:15:48John Coogan?

  Yeah, yeah.

• 1:15:48Jordi Hays?

  Yeah, I mean, the ones that I can think of that that are maybe more at the Figma scale are just looking at Figma's track record in the public markets and thinking like, I'm not as good of a business as Figma and I don't expect to be treated any differently.

• 1:16:06John Coogan?

  And when the stock popped, a lot of founders were thinking, oh, if I can get that multiple, I should be public today.

• 1:16:11Jordi Hays?

  Yeah, I'm thinking like the riplings and the deal.

• 1:16:14John Coogan?

  Yeah, all those companies.

• 1:16:17Speaker 05

  Deals got its own issues, I think, which might be separate, but like, but by the way, this isn't just a venture issue, though.

• 1:16:22John Coogan?

  Yeah.

• 1:16:22Speaker 05

  Private equity firms, which, you know, more mature slower growth, but more mature companies, they haven't been taking their stuff out either. And they don't have anywhere else to go except sell to other private equity firms. It's just this broader non-IPO issue right now.

• 1:16:36John Coogan?

  Yeah.

• 1:16:38Jordi Hays?

  How much, how much are you spending, are you spending time tracking the data center ban that Sanders has sort of proposed?

• 1:16:49John Coogan?

  It's also in a bunch of different states. Yeah.

• 1:16:51Speaker 05

  It's a bunch of different states. We had a, we had a big AI event in DC two weeks ago and I wrote about this a little bit. And on the sidelines, I spoke to the CEO of Constellation, which is one of the big electricity providers, the data centers. And I asked them, this was whatever, three weeks into the war and oil prices were spiking. And I said, how much, you know, what's this doing to energy deal making in the United States right now? Just the rise in oil prices. He said, it's having a little impact. He said, it's the data center ban proposals that are having the really big impact. That's what has people freaked out. I mean, Sanders on the national level, you're not going to get anywhere nationally on this, but on a state by state level, you don't need much. You need a couple of states to do it.

• 1:17:29Speaker 05

  It is, it is something that, that opponents have done a really good job on the PR and the industry has done a very bad job on the PR on this.

• 1:17:38John Coogan?

  Yeah.

• 1:17:39Speaker 05

  And it doesn't help that everybody's gas prices and home heating oil prices and places where that's relevant and electricity prices are all going up. Iran is obviously exacerbating it. So, but you know, if you're looking at your bill and this is something that is top of mind, well, the bills are only getting, getting higher.

• 1:17:54John Coogan?

  What do you think the impact of the war in Iran will be on defense tech investing?

• 1:18:00Speaker 05

  I wrote about this today. We have to see what happens, right? It's a pretty fragile piece. It's unclear whether Hormuz is even open or not now. It was, maybe it's not. You know, what I wrote this morning was, I mean, I thought a lot yesterday after Trump's civilization tweet, right? That if he really went through with what he said, and I know some people are making some odd arguments that, oh, well, it's either a nuke or not a nuke. No, there's a lot in between, right? You bomb some major power plants that are for civilians or desalination plants or the power to desalination plants and people don't get water anymore, let alone can't do crops or feed animals, et cetera. Um, I, you know, defense tech has boomed in terms of venture capital, which is such, there was almost none of it, you know, seven or eight years ago, and there's so much of it now.

• 1:18:42Speaker 05

  I think it could have turned Silicon Valley again back against defense tech if the United States had done something that a lot of people viewed as a war crime or at least as inhumane. Sure. I think the fact that we have a ceasefire and Trump didn't go through with that, I think is probably a bit of a save for defense tech in the midst of a boom. I think you've got this, this huge upsurge in all sorts of defense companies that could have actually come to a halt pretty quickly. Not all firms entries and still would have invested, founders funds still would have, but that, that broader swath of venture capital that fills out those rounds, I think, might have slowed down if the military had done something, the Pentagon had done something that, that a lot of people viewed as morally indefensible.

• 1:19:21Jordi Hays?

  Yeah. Something I thought was notable is that the, the American version of the she had was a government program and they use some private, you know, contractors for it, but the smartest, the smartest defense tech play three years ago was just to make the she had. Copy the she had. And make a lot of them. And it seems like no company actually had the, had the foresight to do that. And it ultimately had to be led from, from the DNW. I guess, yeah.

• 1:19:51John Coogan?

  Interesting.

• 1:19:52Speaker 05

  And by the way, I haven't looked to see what's happened with the stocks, but I mean, something that is going to have to happen, no matter what happens in Iran, ceasefire, no ceasefire, the standard munitions stockpiles are going to have to get refilled, right? We are using a lot of bombs and a lot of, a lot of stuff that's going to have to all get refilled. And I know, you know, Palmer Lucky and all others have talked about how we don't have enough of that prior to all of this happening. And that, you know, that, that, you know, that stuff has to get done and there's going to be people who sell that.

• 1:20:18John Coogan?

  Yeah, yeah, that makes a lot of sense. Well, thank you so much for taking the time to come chat with us. The Axios show is live and available everywhere, I'm sure. Go check it out and we will talk to you soon, Dan. Yeah, thanks for giving us the scoop. Great to see you. Thank you. Up next, we have Lior Susan from Eclipse. He's the founder and CEO. We'll be talking to him about Eclipse's 1.3 billion dollar raise as industrial tech shifts from innovation to scale production with companies like Cerebras and Well, what's going on? How are you doing?

• 1:20:50Speaker 06

  Doing well. Thanks for having me.

• 1:20:52John Coogan?

  Welcome to the show. Please kick us off with an introduction. First time. And, and some background.

• 1:20:58Speaker 06

  Yeah, it's great to be here. First of all, I love your show. Yeah, we started the firm 11 years ago. We are all operators that left their job building companies in the physical world to build a firm that we can build more than one company at a time. As you can guess, it was fairly controversial 11 years ago to talk about defense manufacturing chips, mining, etc. It feels like a little bit less controversial right now. And yeah, we grew the firm roughly to a $10 billion AUM and we just announced our raise of 1.3 billion.

• 1:21:33John Coogan?

  Let's hit the gong.

• 1:21:39John Coogan?

  What was the, what was the prehistory of the, of the firm? What, how did you get into investing? What was the first deal? How big was the first fund? Tell me some background.

• 1:21:48Speaker 06

  Yeah, first one, one hundred and twenty-five million dollar, feels like many moons ago.

• 1:21:52John Coogan?

  That's not bad, though. How did you set that up? I feel like a lot of people start with twenty or fifty. One twenty-five is not bad.

• 1:21:57Speaker 06

  Yeah, the ignorance was the power. I never invested a dollar before a claim, so it might be that one. I grew up in the military, went to the special forces, then I did a company in the networking space. Cisco bought it, they moved to live here, spent three years with McNamara while he was the CEO of Flextonics. Fall in love in US manufacturing and felt all of my friends in Silicon Valley can only spell the words enterprise software. And I know nothing about enterprise software, I don't like enterprise software. And eighty-five percent of the world GDP is physical industries. And I felt it's kind of weird that everyone is telling me you need to go after big markets, after big terms. But everyone is following their friends into the enterprise software,

• 1:22:40Speaker 06

  while those eighty-five percent of the world GDP don't have a platform and left to start a platform.

• 1:22:46John Coogan?

  Yeah. Talk to me about the cerebrus investment. How did you meet the founder? It was one of these companies that I'd heard of and I'd seen a lot of negative takes, saying that it was the wrong path, that it wouldn't apply to where the current models are going. And then I tried it and it was really fast and it just felt like magical. And so I was all of a sudden converted to be very excited about the company, where before I was sort of uncertain about how it would pencil out. It felt like there was a lot to be done, but you obviously invested early. How did that come together?

• 1:23:20Speaker 06

  Yeah, we've been around the company for now ten years, so it's been a moment.

• 1:23:24John Coogan?

  That's remarkable.

• 1:23:25Speaker 06

  Yeah, exactly. But you know, like a lot of our companies, and I think a lot of those companies in that space, it starts by a fundamental view.

• 1:23:35John Coogan?

  Sure.

• 1:23:36Speaker 06

  That wafer scale integration, basically the short version, you take the entire wafer and you interconnect between the core. You know, when we have an idea of a chip, essentially it's a square, but it don't come from the machine like that. It's actually come as a round thing and then we cut it into squares, into chips.

• 1:23:53John Coogan?

  Yeah.

• 1:23:54Speaker 06

  The idea here is you take the entire wafer and you connect it to a lot of The chips and you create essentially one very large chip. And naturally, when we made the investments in 2015, we didn't know AI will be exist. What we did know, because we built by ourselves as an operators, chips and factories and fabs. We knew that Moore's law is going to hit the limit from physics point of view. We're going to, we're in two nanometers already. You know, let's assume we can do one nanometer, that's about it. There is nothing after that.

• 1:24:22John Coogan?

  Yeah.

• 1:24:23Speaker 06

  And we were looking for new physics and then new physics mean, hey, should you? Can you connect to a lot of those cores in order to create a one big chip? And we decided that we are going to take over companies like Nvidia and others. And it was not easy, but I think now we're extremely excited about the company and the growth of the business.

• 1:24:44John Coogan?

  Yeah, yeah, it seems like it's in a fantastic position now. Talk to me about Vulcan Forms. What was the back history there?

• 1:24:51Speaker 06

  Yeah, in some way, same story. Physics, start with physics of, in the case of Vulcan Forms, we are manufacturing high-precision metal parts.

• 1:25:00John Coogan?

  Sure.

• 1:25:00Speaker 06

  And, you know, historically, a lot of those machines been using one, two, three, maybe four lasers. We are using 160 laser fiber into a single head and we melt powder really, really fast. And the hard part there was like how to control something that is so powerful. It's actually, we got a call from the US DOW many years ago and asking ourselves, basically start to investigate why we are buying all of these lasers. Because it looks suspicious for them. We're like, no, no, we're just building metal parts, nothing too sketchy. And yeah, company booked multi-billion of dollars deals last year and a billion dollar deal the year before.

• 1:25:42Speaker 06

  And Kevin Kaskel and the team there is doing phenomenal job. We are building now four factories in the US, scaling the operation to build high-precision metal parts for medical devices, consumer electronics, aerospace and defense and others.

• 1:25:56John Coogan?

  So, yeah, it's a big, I mean, it's a big fund, you're using we, I imagine you take board seats, you lead rounds. Is that roughly correct? Like where, how many companies do you want in the portfolio? How deeply do you want to be involved? Do you try and pick a single winner in a category? Or do you look at more like secular trends and try and get, you know, a broad exposure to the whole category? What's your thesis?

• 1:26:18Speaker 06

  Yeah, we, so we, you know, our LPs put us in the venture bucket and then in the growth bucket. When they're thinking about how they are allocating capital, those US endowments and foundation. We call ourselves operators with capital. We are all operators and founders. When we build those businesses alongside the management team. So we actually do very few deals every year and we have actually a small amount of position in each fund. And also roughly, we incubate one third of the companies and two thirds who will lead seed, series A, series B, series C, series D, whatever it is.

• 1:26:56Speaker 06

  We only lead, we always take a board seats and walk very, very closely to the management team. And to tell you the truth, I'm enjoying more building companies than investing in companies. So regardless if I end up investing, and maybe it was not my idea to start a company. I want to feel like I'm part of the management team building those businesses. That's my passion. Jordi?

• 1:27:20Jordi Hays?

  Very cool. Where do you think robotics is overhyped and where do you think it's underhyped right now?

• 1:27:28Speaker 06

  Yeah, actually, I wrote, I wrote something on my LinkedIn maybe last week that say it feels a little bit 2021 in Eclipse sectors. We are starting seeing some of the bad behavior that maybe was in the enterprise software in 2021 happening now in our sectors. You see those companies raising a billion dollar out of the gate or some crazy valuations.

• 1:27:49Jordi Hays?

  Yeah, or doing, I'm assuming there's instances where a company, you guys may have backed a company in a category, you know, eight years ago, and then a new company gets formed in the category. And within, you know, six months, they're valued at the same price, even though there's wildly different from a kind of technical progress standpoint.

• 1:28:15Speaker 06

  There is some of that. I mainly, it goes back to first principles. As a company, as a person, as an entrepreneur that like to build companies, I think, you know, there is a way to build companies. There is for sure a way to build companies in the physical world. You talk about building factories, you talk about supply chain, you talk about CapEx. You cannot all, like, you know, push at full max out of the gate, burn really fast, because you believe the contracts will come and you believe that always the markets will be there to fundraise you. So we're just, you know, trying to bring some sort of a discipline of how to build those companies. But, you know, goes back to your questions on robotics. We've been doing robotics for 11 years now as out of Eclipse.

• 1:29:00Speaker 06

  And we, a lot of us did robotics much before in our operating life. And I think, you know, we are now crossing the chasm with robotics, moving from a control-based PLC, very accustomed to a much more general purpose, much more using physical AI. And as a result of that, we are starting seeing adoption on the commercial side that is super exciting.

• 1:29:23John Coogan?

  From your position on boards, I don't know how much you can talk about this, but I'd love to know your view and expectations for the IPO window we were just talking about with Dan Primack. A lot of, a lot of attention paid to the big three, SpaceX, OpenAI, Anthropic. But what else are you seeing in terms of how companies are gearing up for the IPO window?

• 1:29:47Speaker 06

  I mean, I think it's interesting, right? Of course SpaceX, I think arguably even OpenAI and Anthropic have a much closer part of the business to what I built, to maybe their traditional software that kind of was leading the chart. I think real assets going to have a great moment in the public market.

• 1:30:08Speaker 06

  I think people value, you forget, it goes back to the eighty-five percent of the world GDP. The reason SpaceX can have that type of an IPO is because they solve something that it's really, really hard.

• 1:30:20John Coogan?

  Yeah.

• 1:30:20Speaker 06

  So it's really, really hard for the second person to solve it as well. I think the reason you are seeing the correction in the SaaS world is you had a lot of companies. The entry is very easy.

• 1:30:31John Coogan?

  Yeah.

• 1:30:32Speaker 06

  The TAM is not too big, and as a result, the public market correct. So I do believe we are going to see quite a lot of companies in the semiconductor world, in the space, in the AI infrastructure, in the data centers worlds going public in the next eighteen months or so.

• 1:30:48John Coogan?

  Yeah, what are you tracking in terms of trends in the lunar economy? It does feel like we're at a turning point moment with SpaceX and Starship coming online. There's lots of interesting.

• 1:31:00Jordi Hays?

  You mean space economy, right? The lunar economy does.

• 1:31:03John Coogan?

  Oh, yeah, it's not lunar economy, it's orbital economy is the buzzword.

• 1:31:06Speaker 06

  It's fine, it's a Eclipse name, confuse you.

• 1:31:09John Coogan?

  Yeah, yeah, any variation from low Earth orbit to beyond. Some of this stuff, when you talk about mass driver on the moon, it starts to seem ten years away, twenty years away, harder to underwrite, harder to think about, but maybe as a venture capitalist, you can start thinking about it. What are you looking for in just space broadly?

• 1:31:29Speaker 06

  Yeah, I mean, I think when you think about Henry Ford, when we created cars, there is so much economy that is being developed and so much GDP that is being developed by the ability to move people much faster than you could move before. I think, you know, we are going to see something similar with the increase of our ability to travel to space and lowering the cost significantly. And as a result, we're just going to see a lot of new businesses being built. We are partnering with an amazing company called True Anomaly that building space defense prime. So you know, it's not only you're going to travel to space, you're also going to have conflict in space.

• 1:32:11Speaker 06

  We are seeing a live one, maybe a ceasefire with Iran right now. But, you know, I think since I mentioned his name, I said on an interview yesterday, I used to say that this is the best time to build in this country from Henry Ford and Carnegie or post-World War II. And I actually changed it to this is the best time to build in this country pre-IT. And the companies that I'm passionate about. So we're just extremely excited to have the capital and the relationships to go and build as many companies as we can.

• 1:32:44John Coogan?

  Well, congratulations on the fundraise. Congratulations on the progress and thank you so much for taking the time to come chat with us. We'll talk to you soon.

• 1:32:51Jordi Hays?

  I really appreciate it. Great to hang.

• 1:32:52Speaker 06

  Thanks, folks.

• 1:32:53John Coogan?

  Have a good one.

• 1:32:53Jordi Hays?

  Cheers.

• 1:32:54Speaker 06

  Take care.

• 1:32:55John Coogan?

  Up next, we will be revisiting the Axios NPM package hack that happened, the supply chain attack. NPM, of course, Axios NPM was downloaded 100 million times per week and it was compromised by North Korean threat actors. We talked about it a little bit on the show last week, revisiting it with Faras Abukadijja.

• 1:33:16Jordi Hays?

  You discovered?

• 1:33:17John Coogan?

  I hope I pronounced that correctly. What?

• 1:33:18Jordi Hays?

  Discovered the problem? Is that right?

• 1:33:20John Coogan?

  Uh, yes. So, uh,

• 1:33:21Jordi Hays?

  We can ask him.

• 1:33:22John Coogan?

  Yeah, we can ask him. Socket detected the malicious update within six minutes and we are lucky to have Faras join us.

• 1:33:28Jordi Hays?

  What were you guys doing for the six minutes?

• 1:33:31John Coogan?

  The six minutes.

• 1:33:31Jordi Hays?

  So, sleep at the wheel? No, I'm kidding.

• 1:33:33Speaker 07

  No, no, no. Definitely not asleep at the wheel. It takes time to download packages, scan them, put them through our battery of tests. So I think six minutes is actually pretty good.

• 1:33:44John Coogan?

  Yeah, that's incredible.

• 1:33:45Jordi Hays?

  No, it's fantastic. I'm just best.

• 1:33:47John Coogan?

  But yeah, maybe zoom out and tell us about like the actual process that Socket runs, your business, how the system works and how you're able to detect supply chain hacks and cybersecurity threats so quickly.

• 1:34:00Speaker 07

  Yeah, totally. So Socket was among the first to detect and report on this incident. We built a system that, you know, goes out and downloads every open source package in existence within a few seconds. So we support about 19 ecosystems and this includes really all sorts of third-party code that might be, you know, used to build applications today. Includes things like your AI models, your, you know, your open source dependencies, even your editor extensions, your Chrome extensions, like really any code coming from, you know, third-party sources. And we put it through a battery of, you know, really intense static analysis, maintainer behavior analysis, and then of course a bunch of AI and then human researchers as well. And we try to help kind of make a determination, is this

• 1:34:44Speaker 07

  something safe that you want to use, you know, within your application or within your organization?

• 1:34:50John Coogan?

  So can you, can you talk about the shape of the threat that was posed by the Axios supply chain attack like because there's a wide range of, you know, zero day exploit that gives you full access to someone's device or computer or system all the way to just something that, okay, it would crash if this was, if this exploit was used, right?

• 1:35:11Speaker 07

  Yeah, I mean, maybe we just start from the beginning and summarize the attack for folks. Yeah. So, I mean, there was a North Korean state actor that socially engineered the lead open source maintainer of the Axios package. And it was honestly quite a sophisticated and impressive effort. They posed as a founder of a fake company. They created a fake Slack workspace, invited this, you know, invited the maintainer to join it. They staged a fake Microsoft Teams call and the, the website was made just incredibly compelling. They used the official SDKs from Microsoft Teams to create like really realistic components in the page.

• 1:35:52John Coogan?

  Oh.

• 1:35:53Speaker 07

  They joined the call and, you know, by the way, this is, they also developed a relationship over the course of, you know, weeks, right? So this wasn't like a, like a, you know, a situation in which you would expect to be on guard or on defense. And at some point in the call, the call just cuts out and the, the browser says, hey, you know, you got to install an update. And it gives them a, a binary file that they're, you know, told to install. And so this, this, this maintainer thinks, okay, I guess, you know, I guess I got to install this update real quick so I can get back into the call. And it turns out that's how they compromised, you know, their device. So, you know, it's, it's not just like, you know, a phishing link or something like that. I mean, this was a targeted attack. They also targeted me and a bunch of people at our company as

• 1:36:36Speaker 07

  well. So they targeted a whole bunch of the top NPM maintainers who, you know, have access to a lot of packages.

• 1:36:43John Coogan?

  Interesting. Then, then in terms of, once they get control over, they fish a particular credential, a particular device for a developer who has access to push changes to a package like Axios, what are they actually changing in Axios to create a vulnerability in the supply chain, in the software supply chain?

• 1:37:01Speaker 07

  Yeah, so they publish poisoned versions of the package that silently install what's called remote access Trojan, which is basically a way for the attacker to just remotely control your device and basically do whatever the attacker wants. It's like they're sitting in front of your computer on the keyboard, you know, typing whatever they want onto your, onto your system. And it, what they did, what they did with it was they kind of pulled all the, you know, most interesting files and credentials off the system. So things like if you have a crypto wallet, like they're taking the keys for that, they're gonna definitely want the crypto. If you got, you know, if you're logged into NPM, right, they pull those credentials so they can spread like as a worm and kind of continue to infect the next set in the attack, right? So it's, it's actually like this self-replicating

• 1:37:46Speaker 07

  kind of cycle where they, they get these credentials and then they use them to go on to the next stage. And, you know, yeah, and then, you know, this is, I mean, the thing I think I want to emphasize here for people is this isn't just an isolated incident because this has been kind of the, the most recent blow in this kind of series of, of compromises and attacks against the software supply chain that has been happening really over, over the last six months in a really intense manner. And we've seen it really pick up in the last month with, with, with Team PCP compromising Aqua Security and the Trivii Scanner, and then that cascaded into Light LLM being compromised, another security company Checkmarks was compromised.

• 1:38:24Jordi Hays?

  Yeah, what, what happened with Light, Light LLM and, and how, like, do you have a good sense of how that contributed to the breach at Merkle?

• 1:38:38Speaker 07

  So it's, it's part of the campaign of Team PCP. So they dropped the same kind of self-propagating worm called Canister Worm into the package. And what you have to realize is once you run a compromised open source package on your system, you know, you kind of have to rotate all your credentials, like all your tokens and keys and passwords. And, and it's a really hard thing to do very thoroughly and very completely. And so I think that we're going to see a long tail over the next. You know, probably 12 months of follow-on attacks from this, from this set of compromises. Because the group claims, Team PCP claims that they've stolen 300 gigabytes of compressed credentials.

• 1:39:21Speaker 07

  So that's, you know, that, I mean, think about that, 300 gigabytes of stolen passwords, API keys, Git action tokens. I mean, they, they're sitting on so much, it's like a goldmine in terms of like, what's gonna, what's gonna follow on from this. So I think it's, it's not surprising that, you know, that you're seeing companies affected, right?

• 1:39:41John Coogan?

  Yeah. So why, why the boom in the last six months? Is it, it feels like it must be tied to vibe coding or, or AI agents. Is this that they have more powerful tools, so they're able to do more damage? Or is it because our systems are getting weaker because we're pushing more vibe code to production? Is it both? Like, what are, what, what, what got us to this place where we see this takeoff in cybersecurity threats?

• 1:40:07Speaker 07

  Yeah. Well, you're absolutely right. It's definitely become a top concern. I think we're hearing at a lot of our customers and prospects that are contacting us that this has now become a board level concern. You know, everybody is asking, how are we not going to be affected by the next one? So I would say that, you know, fundamentally, like, if you really zoom out and ask, why is this a problem? Why is this happening? It's because the whole software supply chain is built on blind trust. I mean, you're downloading code from random people on the internet that you've never met. You don't know who they are. And you're like, let's just run it, right? Like, let's just hit run and like, I hope it's fine, you know, I hope, hope it's, you know, and I'm gonna give it full access to my system, right? No permissions model, right? No review. And I mean, no one looks at the code, right?

• 1:40:50Speaker 07

  Before they run it. And unlike an iPhone app or, you know, mobile phone app where it has to ask for permission to do sensitive things like access your camera or your microphone or your location or your contacts or your files, right? Open source packages just get everything. You know, you just run them, they get everything. So, you know, also, there's this asymmetry in security, and this has always been true. So this is, you know, kind of more of the... Bigger picture, I know part of the bigger picture here is that defenders have a much harder job than attackers because they have to guard against really all the ways that you can possibly get attacked. And the attacker has to just find one way in, right? So it's asymmetric and so when attackers realize, hey, look, you know, open source,

• 1:41:34Speaker 07

  the way that companies use it has changed in the last decade. We no longer use, you know, just a handful of components like WordPress, Apache, PHP, you know, these kinds of big components. We actually pull in, in some cases, it's like a thousand open source libraries just to get Hello World to show up on the screen, right?

• 1:41:52John Coogan?

  Yeah.

• 1:41:52Speaker 07

  It's crazy, the diffusion in the number of these things. So, you know, they realize, look, I could just attack one of these things, one of these libraries, and I can get into a company. Like, that's so much easier than attacking head on and trying to hack the company directly, right? I can find one of, you know, and we have customers, by the way, they have 500, 500,000 plus open source components in their environment. So just think about that, right? Any one of those is a way into the company.

• 1:42:16John Coogan?

  Yeah, the funniest package is even. It just tells you if a number is an even number. And it's, and it has one dependency is odd because it's a turtle stacked. Exactly. It's a great example. Tell me more about the shape of your business. I mean, it seems like you're getting a lot of calls from companies and boards. Like, what does it look like to work with you? How are you plugging into companies? Or do you have a, do you have a business line around going and hunting bug bounties? Like, how, how should I think about the business of Socket these days?

• 1:42:49Speaker 07

  Yeah. Well, look, people contact us when they want to get their software supply chains under control, right? So right now, what that looks like is companies that are deploying AI agents and AI coding assistants across their companies have one big question in their mind, which is, you know, how do I know what my agents are doing?

• 1:43:06John Coogan?

  Yep.

• 1:43:07Speaker 07

  How do I know what my developers are doing with those agents?

• 1:43:10John Coogan?

  Yep.

• 1:43:10Speaker 07

  And that is the, the problem that we help them get under control. So the way to think about Socket is we are a software supply chain defense company, right? We protect your software supply chain. So When an AI agent is making a decision to go and install something in order to accomplish the task that's been given to it, you know, it will go through Socket first. So we are the guardrail to ensure that no malicious components get installed. And if you take a concrete example, Axios, the attack we've been talking about, that malicious package was live for about three hours, meaning, you know, anyone who was asking their agent, like, hey, go build me whatever, right? Doesn't matter what. The one of the first

• 1:43:53Speaker 07

  things is probably going to grab it because it needs to do HTTP requests. It's going to say, oh, Axios, right? And, you know, so the question is, how do we, how do we, before that gets taken down, right, before the, or even before the community is aware, how do we defend our organizations and our applications from those, those packages that have had these implants, right? And, you know, and, um, yeah, it's, it's really top of mind for people. I would, I would say it's, it's kind of become like a, you know, number one concern for CISOs and for boards.

• 1:44:20Jordi Hays?

  Yeah. What, what, what is your view on cybersecurity as a category? I think a lot of, you know, we, we've talked to people on air, off air, that were surprised about the sell off in, in cyber due to, to LLMs, just because LLMs themselves are creating all of these new threat vectors. And so there was kind of a disconnect there. But what is your sort of more general outlook on the category?

• 1:44:48Speaker 07

  I think in the short term, security is going to get worse. It's going to get harder. So I think, actually, I think the, you know, the answer is really the opposite. Like, companies and products and, you know, things like Socket are actually more needed than ever before. You know, with, with Mythos coming out yesterday, you know, that's going to find a ton of vulnerabilities and, you know, it's finding vulnerabilities all across the software supply chain. And so, you know, the, you know, I think more vulnerabilities discovered means there's more urgency to fix the ecosystem and it goes from being a lower priority on people's lists to a higher priority. And so I think the short to medium term effect is going to be massive awareness. It's going to be supply chain security becoming more top of mind for everybody. That's obviously great for us as a business, great for the ecosystem, because I think

• 1:45:33Speaker 07

  it's hard to invest in things and get justification for budget if you're a security leader, if you don't have a fire or an emergency to point to. And so this really helps there. I think longer term, we have to see. I think ultimately, I think AI solves the asymmetry problem that we were talking about earlier, because for the first time, defenders now have an infinitely scalable army of AI agents doing their bidding and doing continuous security analysis. And that's all work that would have been way too expensive or impractical for their humans to do before. And so the attacker's advantage of only needing to find one way in starts to erode when the defender has the ability to continuously audit everything. And so I think longer term, once we get through this rough period, I actually am very optimistic about security improving.

• 1:46:18Speaker 07

  But one thing I will say is with security, one of the reasons I love the field and why it's such an exciting field to be in is that it's a cat and mouse game. So it's a dynamic system. So it's not like architecture or bridge building where you learn the rules of physics and you know how to build a bridge that's going to withstand gravity and these forces that don't change. In security, the minute you think you've got things under control, the attacker evolves, the attacker switches their strategy, and they have access to the same AI tools that the defenders have. And so it's really a field that is, I think, always going to be growing and always going to be a great business to be in.

• 1:46:54Jordi Hays?

  Has a cybersecurity company ever got caught, like sort of LARPing as a hacker group in order to drive demand? Sort of like hacking a popular company in order to drive demand for their product? Because you said CEOs oftentimes need to be able to point at a fire to justify budget.

• 1:47:14Speaker 07

  You know, that's super funny you ask, because that was always the conspiracy theory that folks had about the antivirus companies back in the 90s and the 2000s was that they were the creators of the viruses so they could sell you the antiviruses.

• 1:47:27Jordi Hays?

  Create the problem, sell the solution.

• 1:47:32Speaker 07

  I mean, you know, I, I think, I think that, uh, I'm not aware of any companies getting caught doing that. I think there's enough bad guys out there that have realized the opportunity sitting there in plain sight that I don't think that, you know, it, you gotta go to the, go to conspiracy theories to kind of explain why. No tinfoil hat needed. Yeah, no tinfoil hat needed. Yeah. I mean, uh.

• 1:47:53John Coogan?

  How do you think about the, uh, these economic impact assessments? Uh, when Axios, I feel like everyone jumped on it very quickly. Andre Karpathy shared that he, uh, he didn't have the repo pinned, but he hadn't updated. So he was able to dodge it for that three or six hours. Right? Um, so a lot of people got lucky, but do we have an idea of like the actual toll that that particular attack had? Because it felt like the number could have been very huge, but a lot of people were able to get to it fast enough that there wasn't necessarily a massive crypto breach or a massive PII breach. But do you have an idea of like how the industry is thinking about the size of, and the scale of the economic impact?

• 1:48:34Speaker 07

  Yeah. Well, I don't have an economic dollar amount for you, but if you look at the number of downloads per week of this package, it's a hundred million weekly downloads. Right?

• 1:48:43John Coogan?

  Yeah.

• 1:48:45Speaker 07

  That, you know, you figure, you do the math on that and you figure out like, what does that mean across that three hour window? I mean, you're, you're talking hundreds of thousands of people who installed it. Uh, and that's, you know, across C I C D environments, local laptops, uh, that's stuff that's been shipped into production. If you take, you know, another metric would be, you know, how many folks have reached out to Socket? You know, in the, in the 24 hours following that attack to become a customer and make sure that, you know, they could use our tools to assess whether they were affected and to protect themselves for future attacks. Um, we had, uh, almost 2,000 organizations, uh, sign up for an account in the, in the, in the 24 hours. Yeah. Um, which, you know, to put it in perspective, it's a, you know, it's a significant percentage of, of all, you know, our, our full user base.

• 1:49:29Speaker 07

  So, uh, um, you know, I think this is. Very, very widespread. And this is the thing about the supply chain, right? It's like, it's really not a matter of like, if you're going to get hit. When you're talking about these very, very widely deployed dependencies and, you know, including even some of my own code, right? I know I have these, you know, you picked on is even, you know, I have some code that is similar to that. A little bit less outrageous of an example, but, you know, and it's in, it's in every, it's in, you know, probably almost every Node.js app. And that's just how, that's just how the supply chain works today. So it's really not surprising that, you know, everyone is going to get hit by this eventually.

• 1:50:05John Coogan?

  Right? Yeah. Well, thank you for coming on the show and breaking it down for us.

• 1:50:09Jordi Hays?

  Yeah, really, really.

• 1:50:10John Coogan?

  Appreciate everything you're doing. It seems more important than ever. And so have a great rest of your week.

• 1:50:14Jordi Hays?

  Come back on soon.

• 1:50:15John Coogan?

  We'll talk to you soon.

• 1:50:16Speaker 07

  Thanks, guys.

• 1:50:17John Coogan?

  Goodbye. Up next, we have Kasim Mathani from DepFirst announcing a big round. Company also launched its first in-house model DFS Mini 1, focused on vulnerability detection and smart contracts. We'll bring Qasim into the TVPL. How are you doing?

• 1:50:34Speaker 08

  Hey, guys. I'm Paul. Thank you for having me.

• 1:50:36John Coogan?

  Of course. Good to see you. Nice step in repeat behind you. Are you at an event or is this just your normal background?

• 1:50:41Speaker 08

  This is like my background. You know, we had like an amazing event with the Miro San Francisco and we got this for that.

• 1:50:49John Coogan?

  That makes sense. Well, since it is your first time on the show, please introduce yourself and the company.

• 1:50:55Speaker 08

  Yeah, my name is Qasim Mithani. I'm the co-founders of DepFirst. We are building intelligence to discover triage and immediate vulnerabilities at scale in an enterprise environment. We just raised a $80 million Series B round from Veritex.

• 1:51:16John Coogan?

  When, when did you raise the last round before this?

• 1:51:20Speaker 08

  We raised in early January, so it's been less than 90 days. And the reason why we raised it was because we're seeing so much traction.

• 1:51:29John Coogan?

  Yeah.

• 1:51:30Speaker 08

  Customers are seeing so much value from our product. And then we're doubling down on our research efforts, like, like you mentioned at the top of the segment. So we are investing really heavily on training and fine tuning our own models.

• 1:51:43John Coogan?

  Let's talk about the customer impact first. What are the companies that are using your service and plugging in and getting value? And sort of walk me through the user journey of actually working with you.

• 1:51:57Speaker 08

  Yeah, that's a very good question. So we work with some of the largest companies in the world, Fortune 500 companies. We also work with really fast-growing startups, ranging from companies like Loveable, ClickUp, Superbase, like the top names in tech. And the way they use our product is that they connect their code repository and their environments, so their staging and their production environments. And then we go, our agents go and figure out how the application is supposed to run, and then deviations from the expected behavior. So they figure that out, they replicate it in production, and then they give remediation instructions to agents and developers.

• 1:52:36John Coogan?

  And on the research side, walk me through building an in-house model. What was special about that? Did you have to use, I imagine you didn't do a whole base pre-train yourself, but what is unique about the model and what were the keys to success?

• 1:52:52Speaker 08

  Yeah, so when we started the company almost two years ago, we really believed that software security is a very deep problem. Now, everybody in the market seems to realize that, but back then, people thought that the crowd strikes and the follow-up to a monopoly in the market. But in the age of AI, as code is being written faster than ever before, and attackers are already leveraging AI to exploit vulnerabilities, a new type of solution needs to exist, and that's what Deft is. So we invested very heavily in building a world-class research team. My co-founder Andrea Mucci comes from DeepMind, spent seven years building reinforcement learning there before LLMs were sexy. This is like back in 2019. And my other co-founder, Daniele, was a co-founder of Fair Wholesale, and before that, he led security at Square and Cash App.

• 1:53:37Speaker 08

  So that's our background as a founding team. And then we also have some of the top researchers in the world working with us. In terms of building our own model, we used GPT-OS as our base model, and then we took vulnerability data, we planted flags, and then we had the model try to find those flags, and then use an RL loop to basically improve the model's performance. And we were able to do better than OPUS 4.6 at one tender cost in this particular benchmark.

• 1:54:06John Coogan?

  That's very cool. What was your reaction to the Mythos news yesterday? It seems like really remarkable results in bug finding and vulnerability tracing, lots of partnerships. How did you process the news? What are the key takeaways?

• 1:54:24Speaker 08

  Yeah, I mean, I think it's amazing news. It's like validation that security is such an important area in the age of AI, something that we believed for two years. You know, the reason why I work 16 hours a day is because I believe that in the age of AI, like, you know, software needs to be secure. So I'm really happy Anthropic is investing in this. And Anthropic is also one of our partners. So we work with Anthropic, we work with OpenAI, we work with DeepMind, we work with all the labs. And our product sits on top of that. So we use the best model for the use case that the model's good at. So we use, you know, 4.6 for code analysis. We use like other products, other models for capturing the type of vulnerability deduction I mentioned. So it's good news overall. But, you know, in an enterprise environment, complex enterprise environment, you need to ingest all types of data. You need to figure out like the cloud

• 1:55:09Speaker 08

  environment, how like the software is deployed, you need to figure out if there's a firewall there, if there's a WAF there. And our product ingests all of that data and then gives like actionable vulnerabilities, the ones that really matter to our customers. And then with a click of a button, they can just fix it. So we see that as being a significant value add for product.

• 1:55:30John Coogan?

  Talk about the decision to plant the flags yourself versus what it appears Mythos did was was just look across every single open source project and just sort of maybe brute force a bunch of vulnerabilities until they found bugs all over the place. And it seems like they were able to find a lot of different stuff by just throwing every possible hacking technique at every possible open source repo. Is that the correct way to think about that strategy? And then do you think you'll wind up doing something like that in the future?

• 1:56:01Speaker 08

  So we did both, actually. So we run our product, our model on open source too. So like, we found hundreds of bugs. We're just monstrously disclosing them because we don't want to get them out there, you know, so attackers can exploit them. So we found vulnerabilities in Chrome, we found vulnerabilities in like Linux, like in really deep, you know, software that's existed. So like not very heavily used products. No.

• 1:56:25John Coogan?

  Only the most used products.

• 1:56:27Speaker 08

  Only the most used, yeah.

• 1:56:28John Coogan?

  Yeah.

• 1:56:29Speaker 08

  So, and that's helped us improve our product. And we have a team of world-class security researchers on staff.

• 1:56:35John Coogan?

  Yeah.

• 1:56:35Speaker 08

  So people who hack typhoons for a living. You know, thankfully they're working for us.

• 1:56:39John Coogan?

  Yeah.

• 1:56:39Speaker 08

  But like those types of folks who are going and validating the results.

• 1:56:43John Coogan?

  Yeah.

• 1:56:43Speaker 08

  And then helping us improve the model based on that and improve the product and the model.

• 1:56:48John Coogan?

  Well, thank you for everything that you do. We need more white hat hackers than ever. Very clearly, we were just talking about the Axios hack.

• 1:56:55Jordi Hays?

  One, one final question Tyler on our team wanted us to ask. Why not use, are you fine tuning on any of the Chinese open source models? Or do those scare you?

• 1:57:09Speaker 08

  Um, we, we are experimenting with some of them, but we would, you're an American company. We would love to use American models. I was actually, I met Jensen Huang yesterday and it was so amazing to see the investment that's going in, in this area, especially in training, um, open source models.

• 1:57:25John Coogan?

  He's going to do open source models too, right?

• 1:57:27Speaker 08

  Yeah, yeah. So we're very excited and we're partnering with Nvidia and he loved our vision.

• 1:57:30John Coogan?

  Okay.

• 1:57:30Speaker 08

  He thinks that in the age of AI, I mean, as agents are everywhere, security is going to be like extremely important. So he's completely bought in to our vision, to our vision, and he's really excited about it.

• 1:57:40John Coogan?

  Yeah.

• 1:57:41Speaker 08

  Very cool.

• 1:57:41John Coogan?

  Well, congratulations on the progress in the round. We will talk to you soon. Have a good day.

• 1:57:45Speaker 08

  Thank you.

• 1:57:45Jordi Hays?

  Talk to you.

• 1:57:46John Coogan?

  Goodbye.

• 1:57:47Speaker 08

  Thanks for getting here. Bye.

• 1:57:49John Coogan?

  Up next, we have the co-founder and CEO of Mutiny.

• 1:57:54John Coogan?

  Mutiny just raised 72 million dollars from Sequoia Capital and Y Combinator, reaching eight-figure ARR.

• 1:57:59Jordi Hays?

  Whoa.

• 1:57:59John Coogan?

  Bring in Jaleh Rose from the waiting room into the ultrasound. How are you doing?

• 1:58:05Jordi Hays?

  What's going on?

• 1:58:06John Coogan?

  Good, how are you? We're good. Thanks so much for joining the show. Uh, please give us an introduction of yourself and the company.

• 1:58:14Speaker 09

  So I'm Jaleh, I'm the co-founder and CEO of Mutiny. And yesterday, we announced the new Mutiny, which is an AI agent that companies like Rippling and Snowflake use to create anything customer-facing in order to get a deal from cold all the way to closed.

• 1:58:33John Coogan?

  Okay, yeah, walk me through, I mean, what does that actually mean? Add assets to landing pages, battle cards, like, walk me through the workflow of closing customers in the modern era?

• 1:58:46Speaker 09

  Yeah, absolutely. So, starting out, you probably want to warm up the accounts in a particular vertical. And so our customers will create personalized vertical campaigns. And then from there, once, you know, the SDR is involved, they want to start prospecting and get meetings with the right people, so they can make prospecting pages in Mutiny. The agent can even research the specific people that they want. They can pull in data from their CRM, any information that's available to them, the agent will access and create something really high-quality that will stand out to that prospect. As the deal progresses, now we're looking at things like curated customer case studies,

• 1:59:28Speaker 09

  we're looking at business cases, ROI reports, pricing proposals. Even after the deal closes, there's a ton of expansion that the customer success team will drive, so they can create impact reports in Mutiny for their customers, and they can do look-forward strategies, the whole works in order to maximize revenue.

• 1:59:47John Coogan?

  Okay, bunch of questions. Where does the name come from?

• 1:59:50Speaker 09

  You know, the mission of Mutiny was all about killing the dependencies and go-to-market teams. I've led marketing teams, sales teams, and the biggest blocker to growth is always speed. And the blocker to speed is all of the little dependencies that exist, inside of your team, outside of your team. And so it was really a mutiny against the status quo. That's where the name came from, and it just kind of stuck.

• 2:00:20John Coogan?

  And behind you, is that a raccoon mascot? Explain that.

• 2:00:24Speaker 09

  Yes, it is. This is our, this is our raccoon mascot. His name is Achu.

• 2:00:30John Coogan?

  Achu, where did that come from? How did you pick a raccoon?

• 2:00:34Speaker 09

  Um, do you want to know the real story?

• 2:00:36John Coogan?

  Absolutely.

• 2:00:37Jordi Hays?

  Yes.

• 2:00:38Speaker 09

  So we were all in a circle. This is when we were about four or five people and we're like, what are we going to name? The raccoon and one of our early employees.

• 2:00:46John Coogan?

  How did you get to raccoon? You're just like jumping.

• 2:00:48Jordi Hays?

  That's just the default.

• 2:00:49John Coogan?

  Of course, we're going to have a raccoon. No, I explained like, how did you pick raccoon?

• 2:00:53Speaker 09

  Okay, the raccoon.

• 2:00:54John Coogan?

  There's a million animals you could have picked.

• 2:00:56Speaker 09

  Yes, okay, so we were designing our brand and the designers asked me, okay, is there an animal that you guys really identify with? And there wasn't really anything coming, you know, off the top of my head. And then we took the whole team to Angel Island on a, on a camping trip. Um, and the entire time we were there, we had six bottles of wine with us and basically no supplies. So it was just, it was, it was awesome. Um, and every time we would turn around with our headlamps, we would see this gang of adorable raccoons just slowly approaching and then they would see the light and they would start backing up. Um, and so the next day, the designer asked me that question again, and I said raccoon. And that's how we ended up with the raccoon.

• 2:01:40John Coogan?

  There we go.

• 2:01:40Jordi Hays?

  Uh, what's going on with email? Are you, are you generating cold emails?

• 2:01:46John Coogan?

  Yeah.

• 2:01:47Jordi Hays?

  Is it a waste of time now? Like.

• 2:01:49John Coogan?

  Yeah, what's the equilibrium here? Cause I think a lot of people are getting more cold outreach than ever and it feels like we might be in this game theoretic.

• 2:01:57Jordi Hays?

  Yeah, because I could imagine you guys helping somebody make a great, a great cold email, but at the same time, you guys are also set up for the golf and steak GTM as well, which is you play a nice round of golf and you, you know, afterwards you pass them a PDF.

• 2:02:10John Coogan?

  Yeah.

• 2:02:11Jordi Hays?

  Uh, or a little, a little deck.

• 2:02:12John Coogan?

  Yeah.

• 2:02:13Jordi Hays?

  Gives them some more, uh, context on the conversation.

• 2:02:16Speaker 09

  Exactly, so email is a really tricky one. I think, um, you know, we see this in our own data, we hear it from customers, the results are, um, are really bad. Uh, most people don't really open emails anymore. Executives don't really open emails anymore. Um, and so the, the engagement rate on email is really, really low, which is why I think having a really personalized approach that's going to stand out, that's going to be different, that's truly and genuinely tailored to that person is going to be really important. Um, one of the things that I find really fascinating is if you look at an average salesperson, they spend about 30% of their time selling and 70% of their time following up with customers.

• 2:03:01Speaker 09

  Getting ready for tomorrow's meetings, creating all of those materials, nurturing the old deals that are going to convert hopefully one day. And when you talk to CROs, for the most part, despite all the AI investment in data, they haven't really moved the needle in terms of increasing quota per rep. The rep is largely closing the same amount as the previous years. And I think the reason for that is that that 70%, that's really skilled custom work per, per, you know, customer that you're going after. I was on a call a couple of weeks ago where it was a great call,

• 2:03:42Speaker 09

  great enterprise brand, the right decision makers in the room. And at the end of the call, they're like, please send me, based on the challenges that we told you we have, send us the three metrics that you can move for our business and relevant customer case studies for each of those. That would take a rep four hours to go create, right? You have to go look at hundreds of case studies, pull those things together. Whereas in the Mutiny Agent, they can just come in and it automatically will pull in the challenges from the Gong transcript. It will, it will go through all of their case studies. It will sift and pull out the right stats. It will curate the, the assets in there and then they can go ahead and send a really nice,

• 2:04:25Speaker 09

  beautiful, forwardable thing to their customer that's going to get shared with the whole buying committee.

• 2:04:30John Coogan?

  Yeah. The chat is asking for the name, where the name for the, for the raccoon came from, because I think we glossed over that. So sorry to go back to the mascot. But the mascot is a raccoon named Achoo. They demand answers.

• 2:04:47Speaker 09

  Yes. So we were, it was the same group of people that went camping. We said, what should we name the raccoon? And right as we were going to do that, someone sneezed and it just said, Achoo. And we all went, Achoo, that's actually a really good name. Let's go, let's go with that. I mean, in general, I would say the Mutiny brand, I think part of the reason people really like it is that it is raw, it's authentic. We don't really regulate what people can and cannot do. We hire people that are aligned with our values and we just let them be themselves.

• 2:05:23John Coogan?

  I love it. Well, thank you so much for taking the time to come chat with us. Congratulations. Uh, did you, did we hit the gong for you? You raised a $72 million round.

• 2:05:31Jordi Hays?

  Go for it.

• 2:05:31Speaker 09

  That was a

• 2:05:36Speaker 09

  That was a previous fundraiser, but yes.

• 2:05:38John Coogan?

  Yes, well, we're still happy to celebrate it. Thank you so much.

• 2:05:42Speaker 09

  So that's all that matters.

• 2:05:43Jordi Hays?

  There we go.

• 2:05:44John Coogan?

  We'll talk to you soon. Have a great rest of your day. Goodbye. And up next, we have Jeremy Galen from Charlemagne Labs. Uh, he spent 12 years at Meta in trust and safety and left last year to focus on AI-powered scams and building defenses. We're doing a whole security themed show.

• 2:06:02Jordi Hays?

  Look at this. Look at this. Suit it up.

• 2:06:05John Coogan?

  Wow, the matching suit. You look fantastic. Well, you really like, it is the mirror image of me. This is crazy.

• 2:06:11Speaker 10

  Nailed it. The memo came through. I was hoping that I'd get that Maybach right downstairs and bring you this.

• 2:06:17John Coogan?

  I'm so glad you're, you're, you're up to speed on the show. Uh, but for those who aren't up to speed on you, uh, give us an introduction and explain a little bit of your background.

• 2:06:25Jordi Hays?

  John's intro, you said, you said he left Meta to focus on AI scams, which kind of sounds, which kind of sounds like you're scamming, but I'm assuming it's the exact opposite.

• 2:06:36John Coogan?

  We're doing cyber scams.

• 2:06:36Speaker 10

  That would be too easy. It's much easier to be on the offense than it is to be on the defense today. I tell you, uh, it's, it's, it's wild out there. So yeah, I left Meta after 12 years to, uh, focus on Success. Threat. Uh, and, uh, basically my vision is that every employee of every company would have, um, a watchdog. So the company is named after my, uh, my dog Charlemagne. She goes by Charlie. So the product is called Agent Charlie.

• 2:07:02John Coogan?

  Yeah.

• 2:07:03Speaker 10

  The idea is like, you're using your, your computer and you're getting attacked now with, um, novel kinds of threats that resemble legitimate communication. That could be on messaging apps. It could also be, you know, the standard phishing.

• 2:07:16Jordi Hays?

  Yeah, we, we just heard about the, with the Axios attack. Uh, it was a basically a fake Microsoft Teams, uh, basically call that then cut out and trigger and, and, you know, suggested, hey, update Microsoft Teams.

• 2:07:32Jordi Hays?

  Whole thing wasn't Microsoft Teams, but

• 2:07:34Speaker 10

  Right.

• 2:07:35Jordi Hays?

  Uh, the individual just was like, you know, confused because it just seemed uh like it was

• 2:07:39Speaker 10

  So I think the nastiest trick is when it's the unsubscribe button is itself link. I think that's like the thing. So what I, what I, we've built, you know, the startup um has, has um been selling a product that will try and stop you from clicking. So it's like bad, bad employee. Do not click. Um, but the, the research that uh we've done to, to inform this commercial product is into the capacity, the capability uplift that's happening um with respect to offense. So it's important to remember that if you're an adversary, that's a threat actor um seeking uh, you know, financial gain or a state actor, you're availing yourselves of all this uh AI and agentic tooling that, that, that we are using, you know, the sales tools,

• 2:08:24Speaker 10

  the uh, you know, the automation. And so the, the core premise is that in, in an AI-powered world, all phishing becomes spear phishing. You're not going to get a Nigerian prince email, you know, much anymore. You're going to get extremely realistic, utterly compelling uh request from your boss or your manager or your friends, and it's going to be catastrophic in consequences.

• 2:08:46John Coogan?

  Uh, how do you think about uh actual deployment? Because this sounds useful in a consumer context. I'm just thinking about, you know, the, the, the email that's from your bank and has the unsubscribe button for some marketing email. You click it. All of a sudden you're logging in, giving away details. Uh, is there an important distinction? It feels like consumer and enterprise is blurring together in, in many places. Well, how do you think this all plays out?

• 2:09:09Speaker 10

  I think uh as employees of companies, we are using personal email and personal messaging apps on our, on our devices for sure.

• 2:09:17John Coogan?

  Yeah.

• 2:09:18Speaker 10

  Uh, I think as a business, we're a B two B SaaS company with a research arm, and I'm excited to tell you more about our, our research um effort. But um, yeah, I mean, my dream is that um if the AARP is listening right now and would uh give this, you know, for free to, I'd like to give our software for free to anyone who holds an AARP card because elder abuse is devastating and it has huge consequences, but it's very Difficult to market and sell to consumers, you know, product like this. People don't wake up and say, "Today's the day I'm going to improve my security posture." It's sort of after their attack that they have a problem and a mess to clean up.

• 2:09:54Jordi Hays?

  Well, you need to, you need to create the problem.

• 2:09:57John Coogan?

  No, stop with that. Stop with creating the problem. No one's creating the problem.

• 2:10:01Jordi Hays?

  We were just, we were just talking with Eris from Socket, who's saying like the, the old tinfoil hat theory with, with cybersecurity and like malware products is that, you know, they would create the bugs and then sell the, sell the malware.

• 2:10:15John Coogan?

  Create the viruses, sell the antivirus.

• 2:10:17Speaker 10

  I think that's unethical, but also we don't have to do that.

• 2:10:19John Coogan?

  Yeah, there's plenty of scammers out there.

• 2:10:21Speaker 10

  The bad guys are getting, you know, superpowers. And so all we have to do is wait. And like I said about, you know, this research arm, our, um, our team is, has done some work. Meta's, um, you know, model dropped this morning. We work with them. They're, they're, um, I think, you know, I'm quite proud actually of, of what they're doing in the, the cybersecurity space because beyond infrastructure and coding attacks, what we're, um, we all know and aren't really talking enough about is that humans are, you know, the weakest link. So when a company, um, wants to secure its perimeter, you know, it's critical that employees are trained. And today, you know, there are training exercises.

• 2:11:00Speaker 10

  Um, but, but the, um, social engineering attacks aren't studied as much. And so, um, yeah, I'm really excited that Meta's taken a lead in going beyond just, you know, infrastructure and code vulnerabilities to looking at the capabilities that, um, that models, frontier models might provide adversaries in the social engineering and scam space.

• 2:11:20John Coogan?

  Yeah. So explain a little bit more about, uh, the, the eval suite for Muse Spark. Uh, because, uh, like i- is it that the model is trying to, uh, is the model social engineering you or you're trying to social engineer the model? Like what are, what are the two parties in this, in this eval? Like actually, how are they interacting?

• 2:11:42Speaker 10

  Yeah, so we use an industry practice called LLM as a judge. So we don't test on human subjects. And our eval suite takes a model and has it role play as an attacker. And then we have a model that role plays as a victim.

• 2:11:57John Coogan?

  Yeah.

• 2:11:57Speaker 10

  And they're given instructions accordingly. And then we have an LLM judge whether it's the specific attacker is succeeding. And then we compare those attack different models to each other in the in the role of attacker.

• 2:12:11John Coogan?

  Got it.

• 2:12:11Speaker 10

  And that's how we measure the kind of uplift or capability.

• 2:12:14John Coogan?

  Yeah. Do you think that is there? Is there a world where these social engineers like I'm thinking of different vending points in where if someone's running like granola and they're recording that particular? It wasn't a zoom call. It was a Teams call for the Axios attack. And maybe an AI model could be listening in the background and sort of throw up a flag like, hey, it's not. It's actually there. I just checked. There's no update for Teams. You don't need to click on that binary. You don't need to install that. This person's trying to take advantage of you.

• 2:12:48Speaker 10

  That's exactly what the vision for our our commercial B two B security product. I want an agent that that, you know, the technology that we use is small language models. So that it is on device and thus it's limited in its capabilities.

• 2:13:02John Coogan?

  Oh, yeah.

• 2:13:02Speaker 10

  I I see a future where you have a real time AI for security.

• 2:13:08John Coogan?

  Yeah.

• 2:13:08Speaker 10

  Exactly like you described.

• 2:13:09John Coogan?

  Yeah.

• 2:13:10Speaker 10

  I think real time audio analysis with an SLM is is way too big an ask. But small language models are improving. You know, just like all of the large models. So, yeah, I mean, we need real time defense. I want it to be proactive, too. I think the biggest issue is that when scammers succeed, it's because even intelligent and well trained people, employees of companies that work in tech even are duped. Because it's it's as old as the Bible. Scamming is a is an ancient art and it has nothing to do with with preparation anymore. It has to do with we, you know, we're being attacked by a machine. We need machine defense.

• 2:13:44John Coogan?

  Yeah, no, that makes a ton of sense. Where how? Take me through the shape of the company. How big have you raised money? How long you been doing this all this?

• 2:13:52Speaker 10

  Yeah, so I I've raised money last. From the three investors that I'm really excited to be working with, they're Kevin Carter of Knight Capital and Chris Howard of Ritual Capital and Rafael Corrales of Background Capital. Collectively, they've backed more than 30 unicorns from idea stage. And so, you know, I tell them that I want to be the 31st. I'm ready to go.

• 2:14:16John Coogan?

  Good luck.

• 2:14:16Speaker 10

  There we go. Yeah. Love it. So we, you know, we were in a kind of stealth mode right now, working with design partners on the SLM's capabilities.

• 2:14:26John Coogan?

  Sure.

• 2:14:26Speaker 10

  And we're also, if you visit our site, you can actually self-serve for the real-time phishing defense. You could sign up right now if you have a, probably have a Centurion, but if you have, you know, a credit card that, that works, you could, you could put that into the, into our website right now. Don't get spearfished.

• 2:14:44John Coogan?

  Yeah. Well, thank you so much for coming on the show. Congratulations.

• 2:14:49Speaker 10

  Yeah, it was great to meet you.

• 2:14:50John Coogan?

  Good luck with the next phase.

• 2:14:51Speaker 10

  Thank you for suiting up as well.

• 2:14:52John Coogan?

  Yeah, we appreciate it.

• 2:14:53Speaker 10

  Yeah. I'm not wearing any pants, by the way.

• 2:14:55John Coogan?

  Well, have a great rest of your day.

• 2:14:59Speaker 10

  Well, happy to be back on soon.

• 2:15:00John Coogan?

  Goodbye.

• 2:15:01Speaker 10

  Goodbye.

• 2:15:02John Coogan?

  And people were disappointed that we didn't go more into the, the story about Satoshi. There is a full deep dive in The New York Times, "My Quest to Solve Bitcoin's Great Mystery." It is a long article, though, and so I think we'll have to touch on it another time. But, you know, we went through Adam Back's reaction, his, his disavowal of the accusations that he is Satoshi. But there's a bunch of interesting little segments in here from the, the forums and the message boards of the day, analyzing the different writing styles, trying to see. Did you dig into this at all anymore?

• 2:15:44Speaker 02

  I didn't read the whole thing, but like, people have speculated that's Adam Back for a long time.

• 2:15:47John Coogan?

  Yeah.

• 2:15:47Speaker 02

  It's like, kind of like him and Hal Finney is another one. These are kind of the two, like, main names.

• 2:15:51John Coogan?

  And there's one more, I think, that comes up all the time.

• 2:15:54Speaker 02

  There's Nick Zabo sometimes.

• 2:15:56John Coogan?

  Yeah, Nick Zabo, yeah.

• 2:15:56Speaker 02

  But yeah, I don't know if there was a lot of, like, new facts that came out with this, which I think is, is why it's like not, like, super, super crazy.

• 2:16:04John Coogan?

  Yeah. There was also an HBO documentary on Satoshi. I forget who, the, like, who, who did that Satoshi, who did they accuse in the 2024 HBO documentary directed by Colin Hoback? The firm suggests the Canadian software developer Peter Todd is Satoshi and Todd denied that. And so you have

• 2:16:29Jordi Hays?

  That's gotta be the worst kind of title in the world from a security standpoint is being accused of being Satoshi.

• 2:16:36John Coogan?

  Yeah. Because you're just gonna be attacked because you potentially have the keys to like fifty billion dollars or something, maybe more. I forget exactly what the number is. But yeah, that wallet is big. I still think it's possible that like the Satoshi wallet, like the keys were just lost and the person, it's like sort of a lose-lose because if you admit that you lost the keys, then like everyone's like, oh, how do you even prove that? You can't prove that you lost something, but there's no movement. I don't know.

• 2:17:04Jordi Hays?

  Yeah. Also, there's like you, you could have, someone could have created it and then had years and years and years and years to buy up, you know, an equivalent amount of supply, a bunch of different ways. And then you have the, basically, you can say like, well, I've never sold, right? If Satoshi's wallet did start selling, it would probably

• 2:17:23John Coogan?

  Yeah, from a lore perspective and the brand, you could potentially be making plenty of money from the other wallets. And then if that supply ever moves, the whole market's going to reevaluate the, basically, the liquid supply and sort of tank what you have. And also just the, like, the aura around Bitcoin is that it has an anonymous founder. And if it was, if the founder was ever truly unmasked, it would be so much less of like a special project. And I think everyone involved wants to keep it that way. Although these investigations will never cease to be interesting. And so you can go read it on the New York Times from John Kerry. Anyway, thank you so much for tuning in today. Bit of a shorter show. We're experimenting with different things. Obviously, we don't have

• 2:18:08John Coogan?

  ad reads anymore. And so we are going to be mixing it up with more stories, more interviews, different timing, and more flexibility. And so we hope you enjoyed this show and we'll see you tomorrow at 11 a.m. Pacific sharp. Goodbye.

• 2:18:22Jordi Hays?

  We love you.

• 2:18:23John Coogan?

  Leave us five stars on Apple Podcasts and Spotify. Sign up for our newsletter at tbpn.com.

• 2:18:28Jordi Hays?

  Thanks for hanging out.

• 2:18:29John Coogan?

  Goodbye.

• 2:18:30Jordi Hays?

  Cheers.