Naval's GP, Ankur Nagpal, Breaks Down The Viral "USVC" Fund | E2284

This Week In Startups is made possible by: Render - render.com/twist Vanta - vanta.com/twist Northwest Registered Agent - northwestregisteredagent.com/twist Have you wanted to invest in venture capital alongside your 401k contributions, but struggled to find a way to place a bet? Search no more, for the AngelList team has created USVC, a new fund that will accept investments of as little as $500 from folks who lack accreditation. USVC's Ankur Napgal swung by the show to chat about investment strategies, access, fees, and just how illiquid the venture-like vehicle will prove to be. Jason and Alex were then joined by Jon Durbin, core contributor at Chutes, and Yash Goenka, co-founder and CEO of Humwork. Chutes is the most valuable Bittensor subnet, focused on aggregating GPUs to offer trustless AI compute. Humwork wants to help bring a human into your agentic workflow to unstick your agent when it runs into a hitch. The show closes with a news lightning round — enjoy! Timestamps: 0:00 Intro + Plaud AI sponsor read (Jason demos the NotePin S) 2:06 Plaud: If your work depends on conversations — interviews, meetings, calls — you need a Plaud NotePin. You can check it out at https://Plaud.ai/twist and use code TWIST for 10% off! 3:50 Episode overview: USVC, Chutes, Humwork 7:41 USVC structure: $500 min, no accreditation, quarterly redemptions 10:28 Northwest Registered Agent - Get more when you start your business with Northwest. In 10 clicks and 10 minutes, you can form your company and walk away with a real business identity — Learn more at https://northwestregisteredagent.com/twist 11:39 Fee structure breakdown: 1% mgmt fee, ~2.5% net expense ratio 15:41 USVC portfolio: xAI, Anthropic, OpenAI, Crusoe, Vercel 16:17 Strategy: 1/3 emerging managers, 1/3 growth, 1/3 secondaries 19:00 $1B cap and path to expanding the fund 20:33 Vanta - Compliance and security shouldn't be a deal-breaker for startups to win new business. Vanta makes it easy for companies to get a SOC 2 reports fast. Get $1,000 off for a limited time at https://www.vanta.com/twist 28:00 What is sovereign compute? Permissionless GPU networks explained 30:10 Render - Find out why 5 million developers are already using the all-in-one cloud platform, Render. Go to https://render.com/twist and apply for the Render Startup Program to get $500-$100,000 in free credits, depending on your stage and backers. 44:53 Usage history: 160B tokens/day peak, free-to-paid transition 46:41 GPU pricing: from $0.77/hr to $3.50/hr as shortage bites 49:13 DeepSeek censorship demo: Taiwan test on DeepSeek chat 57:27 Permissionless supply curves: Uber/Airbnb analogy for induced demand 59:20 Yash Goenka, co-founder of Humwork (YC S26) 1:00:49 Lightning Round: Ryan Cohen wants to buy eBay — Jason's hot take 1:12:36 Lightning Round: Cerebras IPO update ($27–36B valuation range) 1:14:05 Lightning Round: Spirit Airlines / JetBlue / M&A regulation debate 1:19:10 OFF-DUTY: Star Wars: Maul - Shadow Lord 1:32:57 Alex's OFF-DUTY: Captain of Industry Subscribe to the TWiST500 newsletter: https://ticker.thisweekinstartups.com Check out the TWIST500: https://www.twist500.com Subscribe to This Week in Startups on Apple: https://rb.gy/v19fcp Follow Lon: X: https://x.com/lons Follow Alex: X: https://x.com/alex LinkedIn: ⁠https://www.linkedin.com/in/alexwilhelm Follow Jason: X: https://twitter.com/Jason LinkedIn: https://www.linkedin.com/in/jasoncalacanis Check out all our partner offers: https://partners.launch.co/ Great TWIST interviews: Will Guidara, Eoghan McCabe, Steve Huffman, Brian Chesky, Bob Moesta, Aaron Levie, Sophia Amoruso, Reid Hoffman, Frank Slootman, Billy McFarland Check out Jason's suite of newsletters: https://substack.com/@calacanis Follow TWiST: Twitter: https://twitter.com/TWiStartups YouTube: https://www.youtube.com/thisweekin Instagram: https://www.instagram.com/thisweekinstartups TikTok: https://www.tiktok.com/@thisweekinstartups Substack: https://twistartups.substack.com

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

• 0:00Speaker 00

  It gives the average person the ability to own a company.

• 0:02Jason Calacanis?

  Unlike Angel List SPVs, where it's only accredited investors, this can be accessed by anybody, but it has some very different nuances.

• 0:10Speaker 00

  What we have is a closed-end fund that is available to anyone with as little as $500.

• 0:16Speaker 02

  So people should be able to invest in these companies that are changing the economy, maybe impacting their jobs. It seems very equitable.

• 0:21Speaker 00

  Like, I do think part of the negative AI sentiment is because so many people feel locked out from actually having access to any of that sort of growth. Today, we can invest in any crypto coin, have a polymarket bet for how long Trump shakes someone's hand. All of that is perfectly legal, but investing in a startup has its accreditation walls.

• 0:40Speaker 02

  This Week in Startups is brought to you by Render. Find out why 5 million developers are already using the all-in-one cloud platform, Render. Go to render.com/twist and apply for the Render Startup Program to get $500 to $100,000 in free credits, depending on your stage and backers. Vanta. Compliance and security shouldn't be a deal breaker for startups to win new business. Vanta makes it easy for companies to get a SOC 2 report fast. Get $1,000 off for a limited time at vanta.com/twist. And Northwest Registered Agent. Get more when you start your business with Northwest. In 10 clicks in 10 minutes, you can form your company and walk away with a real business

• 1:23Speaker 02

  identity. Learn more at northwestregisteredagent.com/twist.

• 1:28Jason Calacanis?

  All right, everybody. Welcome back to Twist. It is Monday. It is May the 4th be with you. And the mall series finale was today, Monday, and I watched it last night at like 11:00 PM. I'll talk about it in Off Duty. That's the segment at the end of the show. If you stick around to the end of the show, we talk about things that don't have to do with startups. We give ourselves a little room to breathe. It could be products, it could be media, it could be lifestyle, it could be politics, it could be anything. But we leave it to the end. And boy, do we have a docket today. I want you to just go over briefly, rapid fire, Alex, what's on the docket? We have three amazing guests. But before we do that, I'm just going to show you my new setup. What you got?

• 2:11Jason Calacanis?

  Well, you know, Plaupit on a t-shirt, I don't like because I get these very high-necked t-shirts and on the side, here's a little weird. So I attached the clip to my whoop and now beep beep boop. I applaud my plod. I put my plod on now. I've got everything recorded. I have a transcript. I have a summary, just like a note taker you would have on Notion or the note taker on Zoom. Great. But what if you're not on Notion Zoom? What if your phone's in your pocket and you just want to take a quick memo? Boom. You pop out your plod. This is a little tiny plod pin. You can get one that goes in the back of your phone. That's called the Plod Pro. Both of these are exceptional because with one button, it gives you a little haptic response

• 2:54Jason Calacanis?

  and you're recording. No question if you're recording. That's the problem with recording devices is you don't know if you're recording. So then you have to take your phone out, your laptop out, you have to check. Nope. With Plod, you know, you're recording because it's a little red light for everybody to know you're recording and it snaps right on. You know, it's mag safe kind of situation. So you just boop. And it is so strong. So you know, when I'm skiing, I record myself. I take notes when I'm on my solo ski trips. And I don't lose any of those nuggets of wisdom or ideas or reflections I have. I find it's like pretty great. They're not losing notes.

• 3:31Speaker 02

  They also come with a regular wristband if you're into the non whoop side of things. But if you go to plod, P L A U D dot A I slash twist, use the code twist, save 10%. We cannot recommend the Plod Note Pin S enough. We live and die by them here at Twist because we're always taking notes and we're always doing stuff and we got to keep it all in order. Less everything go completely haywire on the live show. So applause amongst.

• 3:53Jason Calacanis?

  All right. So three guests across the board here. Everybody wanted us to talk about usvc.com. That's Angel List Close End Fund. We've got Ankor Nagpal on to talk about that. He's a GP over there. Then you guys got John Durbin from Shoots. Shoots is the number one Tau subnet. So we got private markets, venture capital covered. We got Tau, we got crypto plus startups and distributed computing and AI covered. And then who's the third guest today on this week in startups on Twist?

• 4:23Speaker 02

  Yeah, it's a really cool company called Humwork. We have the co-founder and CEO Yash on. And what Humwork does is allows an agent to raise a flag and call a human in to help it get unstuck during a longer work lung. Now, we often talk about, you know, humans being helped by agents. This is agents being helped by humans. So instead of calling an agent, you're using MCP to call up an expert, get some help. It's a really cool idea.

• 4:47Jason Calacanis?

  I love that idea. Humans on demand. So, welcome back. Well, actually, I don't know. Ankur, have you been on the program?

• 4:55Speaker 00

  I have not. First time. We've talked about it.

• 4:58Jason Calacanis?

  We've talked about it, but welcome on the program. I was in another country and I had lunch with Naval a couple of months ago. I won't say which one. He's a global traveler. And I was talking to him about what's next. I always like to ask my friend Naval from Angelus, what's next? He got me into SPVs. I got him into podcasting. We're always like, what, looking around the curves? And he said, you should do a closed-end fund. I said, what's that? Is that like the sweater thing, or this thing, or other companies doing this? Is Cathy Wood doing? He said, yeah, yeah, that's exactly it. And it sounds like an interesting thing. I have too much on my plate. I have no time to do it. But Angelus has this incredible funnel. Hundreds of active syndicates with tens of thousands of members.

• 5:43Jason Calacanis?

  They've been betting on things for over a decade. And now, all the fruits of that labor, if I understand, drip, drip, drip, can now go into this closed-end fund. And unlike Angelus SPVs, where it's only accredited investors, this can be accessed by anybody, but it has some very different nuances. So, Ankur, usvc.com is where people can get information. As low as $500 is the investment. You don't have to be accredited. So, tell us what, why you guys launched this product, and then what's different about this product, other than the couple of little things I said, that, what's different than the classic Angelus, here's an SPV, put in...

• 6:28Jason Calacanis?

  One thousand to a hundred thousand dollars.

• 6:30Speaker 00

  It's interesting. When I first met Naval, I've known him for a long time as well. The vision for what Angel List could become is actually quite close to what USVC is today, which is a single way for pretty much anyone who wants to get involved with the asset class of venture capital to have a high-quality product that isn't gate-kept the way traditional startups are. People listening to your show know this, but sometimes it blows people's minds that today we can invest in any crypto coin. You can, you know, have a polymarket bet for how long someone, Trump shakes someone's hand. All of that is perfectly legal, but investing in a startup has this accreditation wall.

• 7:13Speaker 00

  However, with USVC, what we have is a closed-end fund that is available to anyone with as little as $500. What we're trying to do is effectively build a single product to produce a venture-like returns for the average investor. So if you're someone who wants to allocate 3%, 5%, 7% of your portfolio to venture, and you don't know where to start, we believe USVC could be a great place.

• 7:38Speaker 02

  Ankur, can you define closed-end fund for everybody? Because I know you and Jason are talking about it. I know what it means, but I'm not sure that everyone knows that term of art. Might help.

• 7:46Speaker 00

  Absolutely. I'll caveat that, like, you know, even the people, like, this is all new to me as well. But the way USVC works is it's a closed-end fund, which means you buy in. There's a certain NAV or net asset value. When you buy in, you receive shares at that price. And that reflects the underlying value of the assets underneath. So the startups, the funds, whatever. Now, let's imagine the startup underneath has a markup or a markdown. The asset value changes, and then when you redeem out of the fund, we have, we're gonna, we aim to offer quarterly tenders that allow people to sell out of the fund. It happens at the new asset value.

• 8:28Speaker 00

  So it's a very interesting structure because traditional venture funds lock you up for, you know, 10 years typically. Here, this is still not, you know, it's still not a liquid. Product, it's still venture capital. But the aim is to give people the opportunity for liquidity every quarter up to 5% of the fund.

• 8:46Jason Calacanis?

  Yeah, and a way to think of it, Alex, is it's not an IPO, but people often refer to closed-end funds as similar because you issue a certain number of shares. That number of shares doesn't change. Then if people want to sell their shares, then those get priced as some percentage of the NAV, right? The underlying asset value. So when we used to talk about Mr. Sellers publicly traded Bitcoin. Yeah, Bitcoin product. You would say, hey, what's the underlying value?

• 9:25Jason Calacanis?

  So here, if you had Anthropic, OpenAI, Stripe in this USVC closed-end fund, people might say, hey, in the, at the end of the second quarter, when the redemption happens, they might say, okay, it was a billion dollars worth of share, a billion dollars when we essentially IPO'd it, when we offered it. Let's take out the IPO term, which they, when we offered it to the market. It was a billion dollars. Hey, the market thinks Anthropic went up, but OpenAI went down, yada, yada. The market might say, okay, I'm gonna buy, I'll buy it 90 cents on the dollar. So now everybody's down 10%, right? But only a certain amount of people sell, maybe up to 5% then, and you have to have demand for that.

• 10:07Jason Calacanis?

  Then the next quarter, hey, Anthropic goes public, the shares are worth a lot, now it goes up. So it's, it's a nice bridge between completely being locked up, except for finding a secondary sale for individual stocks, and then you get this great mutual fund. But how the GPs get paid is always very interesting, and that's where incentives matter. Okay, so you've identified a real problem, and you put together a solid solution and a business model that you believe in. So you're all set to launch your new company, right? Not so fast. If you want investors and potential customers to take your new business seriously, you need to consider forming a Delaware C corp, and that's Where Northwest Registered Agent comes in. They're going to give your new company a real identity.

• 10:52Jason Calacanis?

  That means an address for your public filings, a domain, a custom website, a business email, and of course, a phone number. And that's going to take just 10 minutes and 10 clicks. They don't charge hidden fees. Customer service is available around the clock. They're not overwhelming your inbox with spam. And they make it easy to cancel at any time. So get all the advantages of a Delaware C corp, independent regardless of where in the US you're operating from. Visit northwestregisteredagent.com/twist for more details. And the links are in the show notes. If you were to look at me doing SPVs, I do mine over at thesyndicate.com. There's plenty of them over at angellist.com. I think it's still the domain.

• 11:32Speaker 00

  Angellist.com now.

• 11:34Jason Calacanis?

  Oh, angellist.com. There you go. Somebody had sniped it back in the day. So angellist.com. You pay 2 and 20 typically. I'm sorry, you pay 20% carry and then you might pay some fees. The fees might wind up being, depending on the size of it, 1 or 2%. Essentially $50,000 a deal, $25,000 a deal. That's covered the legal expense. Now SPVs will charge a load in fee. Some people selling anthropic shares want 10% on the way in. And then they have no percent carry. So they're just literally selling the shares. They sell $10 million, they want to make a million. So there's all kinds of different variations there. But in a closed end fund, there's no concept of carry. You just get 2% a year.

• 12:16Speaker 00

  We're not allowed, because we want to offer this publicly, we're not allowed to charge carry on it. So there is no carry on USVC. In some cases, when it comes to early stage investing, our personal opinion is we can't index pre-seed and seed companies. Like there's too many of them. So what we're going to do there is pick fund managers. And in those underlying funds, the fund manager could charge carry. There's no carry from us. And when we go direct, there's obviously no carry as well.

• 12:44Jason Calacanis?

  Got it. And you could expect to pay about 2.5%. 2% goes to the GPs in the fund. And 50 basis points goes to operations of the fund if this were to be something in that range?

• 12:57Speaker 00

  Something better. So our gross expense ratio right now is about 3.6%. And the reason it's that high is it's just a lot of like one-off type of fees that don't scale, that will scale down with assets. However, we have an expense limitation agreement for the first year to bring that down to a net expense ratio of 2.5%.

• 13:15Jason Calacanis?

  Got it.

• 13:16Speaker 00

  Of that, our total management fee is only one, well, only it's one point, not 2%, it's 1%.

• 13:21Jason Calacanis?

  Got it.

• 13:22Speaker 00

  The remaining amount is, yeah, fund operations or fees of the underlying fund. So when we're a fund of funds, the underlying fund could have management fees and that's reflected in the expense ratio.

• 13:32Jason Calacanis?

  Got it.

• 13:32Speaker 02

  When you guys put this out, everyone said 1% fees, great. And then everyone got really, really annoyed that it wasn't 1%. Did you guys do a PR mistake? Or were people just over indexing on the first number they saw on the prospectus and not actually doing their homework? To actually read through the rest of it, because I read through it and it was pretty clear, frankly.

• 13:51Speaker 00

  Candidly, we did not expect anywhere near the reaction we got. Not because like any of it is inherently surprising, but we thought it would be a smaller deal than it was. And look, net-net, it's good when things become a bigger deal. But I, I, safe to say, the launch was bigger than any of our expectations in every possible way. The positive, the negative, like the PR, the messaging, a lot of lessons learned. Also because we are running a regulated product, right? So I can't really kind of hot respond to people being like, you're wrong, whatever. We have to have internal reviews on the communications going out and stuff. But it was a learning experience running this type of product.

• 14:33Speaker 00

  I think we learned a lot of stuff, but at the same time, like this is venture capital. It is a notoriously illiquid, expensive asset class, right? You can't compare it to a Vanguard fund at three basis points. It's a fully, fully different thing. So we try to benchmark ourselves to how much does a traditional venture fund cost? And now we have to make this, you know, applicable, available generally. How can we do that? And we think our fee structure is pretty competitive for the nature of the asset class.

• 15:01Jason Calacanis?

  Okay, so incentive wise, let's break down the incentive, Alex. And anchor, the incentive for a venture capitalist like myself with a fund is we want to triple the fund value. We have generous fees that should cover our day to day. So life is easy in terms of going to an office and having a staff, but you're not getting rich off of it and you have to pay those fees back at the end. It comes out of your carry later. So congratulations. You know, you had a hundred million dollar fund. You were getting 2%. You're, oh, you're getting $2 million a year for 10 years. You got 20 million. Oh, contraire, ma frère. Now you, you gotta pay that back. So your carry starts

• 15:40Jason Calacanis?

  at 120 million. If you returned 320 million, you have 200 million in gains, 20% of 200 million. And this would be a great scenario. This is the top 10% of funds, top 5% of funds. Okay, congratulations. You made 40 million over 12, 13, 14 years, which is what it takes these days. You made two or three million dollars a year. If you were a banker on Wall Street, you would have made more money. You would have been under more stress. Maybe it wasn't as interesting. Here, the incentive is, hey, there's no carry. So you're not trying to swing for the fences necessarily. You're trying to consistently grow the assets under management. So anchor, how is that change how y'all look at the business? The

• 16:23Jason Calacanis?

  incentive is to grow the fund size to get that management fee. Yeah?

• 16:28Speaker 00

  I will say that, yes, like, growing assets is important because that's how we'll know whether we're succeeding. If people believe it's a good product. But the only way people will believe it's a good product is if we generate returns. Like, if we become a fee stacking machine or something, I just don't believe it works with this type of product where your track record is public. And I think this is different from traditional venture funds, where there's a lot of large venture funds, I don't want to name any, who've, you know, kind of had these multi-billion dollar funds stacked generation after generation.

• 16:58Jason Calacanis?

  Alex will name them. Go ahead, Alex.

• 16:59Speaker 02

  Andreessen Horowitz.

• 17:00Jason Calacanis?

  There you go.

• 17:01Speaker 00

  Those are, no, those, they still have better, but there's, there's like, just old school firms. I'm not going to name them. But like, partners have gotten independently incredibly wealthy, delivering 2X funds for the last like 20 or 30 years. But they do that because they have institutional relationships where they kind of keep plowing it forward. We're a public fund. We're facing additional scrutiny. We don't actually... Do well if we're not somewhat performative, um, this whole thing doesn't really work. So even though

• 17:26Speaker 02

  Performant, Ankur, not performant.

• 17:29Speaker 00

  Oh yeah, actually, good point.

• 17:29Speaker 02

  Very, actually, sorry to correct you, but that's a very different thing.

• 17:32Jason Calacanis?

  Yeah, Ankur's gonna break out in a show tune right now. Hello, USBC, it's the fun for you. No, but you're

• 17:40Speaker 00

  Performance, yeah.

• 17:41Jason Calacanis?

  It's very, yeah, yeah, your performance, it matters here. And so that's what I tried to, I was actually running some cover for you guys when people were like, oh my God.

• 17:49Speaker 00

  We appreciate it, yeah.

• 17:50Jason Calacanis?

  And I was like, okay, guys, everything's publicly facing and because you can redeem, if you put a thousand dollars in and you redeem 5% a quarter, in 20 quarters, you're out of the fund. They're out of business.

• 18:03Speaker 00

  Very, very important clarification. It's not 5% of your investment, it's 5% of the entire fund. So you could redeem a lot more than 5%, unless every person tried to redeem 100%.

• 18:13Speaker 02

  At which case it's done on a pro rata basis, so it's fair.

• 18:16Speaker 00

  Correct, exactly.

• 18:18Jason Calacanis?

  So worst case scenario, 20 quarters, realistically, I'm going to guess, you know, a fraction of that, a third of that, a half of that, we'll see. But, you know, if you are trending towards, hey, you're not getting good assets in there. Hey, those assets aren't performing, or you're not running it professionally, or the fees go too high. Any, any bad performance in any vector means people start redeeming. People start redeeming, then people in the press start looking at reporting and say, everybody's redeeming. And we've seen that happen to hedge fund managers or private equity.

• 18:54Speaker 00

  Private credit has kind of seen this all blow up in real time.

• 18:57Jason Calacanis?

  Yeah, it's blowing up right now. So, you know, that's, I think, reputation matters in our industry. Naval's got a great reputation, everything he does, he, I, I, having known him for 20 years plus, and worked with him for, for many of those years, he wants to do the right thing. And you understand, reputation is

• 19:17Jason Calacanis?

  Reputation is the capital. There's tons of opportunities, but you only get one reputation. And if you look at folks who've worked with the public and, you know, raised money, you wind up getting a reputation based on those returns, based on your behavior. It could be good, it could be bad, it could be good and bad typically, it's good and bad. And how you keep plowing for it matters, I think, you know, most of all. And owning the losses is the key. You look at somebody like Bill Ackman, I think he's done a great job of when he did the Herbalife short, was he the one who did Herbalife short, Alex? Yes. Yeah. He was like, listen, I believe that that was a good short, but I think he, I don't

• 19:59Jason Calacanis?

  know what the end outcome was, I think he got his ass handed to him. And, you know, he has to go out there and own that. And then you get to own the wins. Congratulations. It seems like, Anchor, it's a great innovative thing for specifically Angel List to do. I know Kathy Wood's doing one, a lot of people are buzzing around this, I got offered to do one with a couple of, with two different partners. I don't have the time for it. So instead, I'm looking forward to, I think we have Calm and a couple of other assets on the platform. If there was an opportunity to put them in here, that means I would get liquidity for my LPs, is that correct? It's not your imagination. Risk and regulation really are ramping up quickly.

• 20:40Jason Calacanis?

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• 21:25Jason Calacanis?

  That's why you need a trusted Partner like Vanta, now more than ever. So get started today at vanta.com/twist. That's V A N T A dot com slash twist.

• 21:35Speaker 00

  Even though I think with Angelus, we have a very unique data advantage where we can kind of have amazing visibility into anything happening early stage. We do have the ability to also go in like, you know, pick off assets on the Angelus platform, but we're not limited to that. There's nothing in our mandate that says we have to only transact with Angelus affiliated vehicles and our net goal is we're trying to index venture capital as a whole. So we will back the best emerging fund managers.

• 22:03Jason Calacanis?

  How early will you go?

• 22:04Speaker 00

  And So for early stage, we'd rather go with fund managers because it's just very difficult for us to underwrite, again, a seed company.

• 22:14Jason Calacanis?

  So how would that work? If I have my next $50 million fund, I go to you, I pitch you, you say, okay, we'll take 20% of the fund, give us a $10 million slice.

• 22:22Speaker 00

  Our sweet spot where possible is find fund managers that only write seed checks. So therefore, when they want to write the larger series A or series B or series C, at scale, we could be their capital partner where we kind of come in and write their check, pay them potentially a small amount of carry, but that's the only way I believe you can scale judgment, which is the hardest part of, you know, running this kind of.

• 22:43Jason Calacanis?

  So if we did a deal like that for Launch Fund Five, which if yeah, if my ballpark, I think I would be going out next year, we would do a handshake agreement. Hey, when I have Pro Rata, I come to you and say, would you like some of it? Or would we codify that? Because my understanding when other, I have other VCs, they just want it to be like a handshake. Hey, you'll, you'll run it by us. How are you thinking about that?

• 23:08Speaker 00

  This, this is about relationships with the GPs. It's more about our relationship with them. It's not going to be a hard coded sort of thing, but like, hey, if we're valuable to you, we especially like, I mean, maybe you see this, but running a syndicate very often for a lot of people is not a lot of fun. If they can avoid that with a with a single check from a trusted capital partner. And if we feel good, we're not getting adverse selection, we're literally seeing the best stuff. I mean, we'd love to kind of keep that be the way we, we deploy in the future. The other advantage we have is at this point, there's A lot of data on fund managers, we can benchmark based on track record pretty well that if we think you're more or less likely to succeed with your next fund, um, which does give us a bit of a data, data.

• 23:48Speaker 02

  Yeah. How, how, how early can you get to confidence with say an emerging manager that may be, I don't, I don't know, kind of the fund one, fund two era of their life?

• 23:57Speaker 00

  We can have predictive, uh, judgment with a couple of funds. How accurate it is to realize, I mean, it makes me, makes us slightly more likely. There's still so much variance on all this data, like you slice and dice in a million ways and we'll try and be quantitative. We'll try and look at, um, what percentage of top decile, C deals are you a part of? What percentage of your companies end up, you know, raising a meaningful markup? We'll look at all these metrics. We'll rank people. And that still gets you pretty close. It's by no means perfect at all. Cause

• 24:28Speaker 02

  Sure.

• 24:28Speaker 00

  Data is so messy with startups, right? We're not looking at like, this is not big data. This is still

• 24:32Speaker 02

  Well, and also Small data.

• 24:35Jason Calacanis?

  Well, but you know, the other thing is in a hot market, uh, let's say we're talking peak Xerp and you're doing SaaS companies. You know, everybody was, I, you know, I'm in 21 funds, 22 funds, and I put 50K, 25K, 100K into a bunch of small $10 million, $20 million funds. Uh, and I just say, hey, all I care about is deal flow, but I'll put this money in and support you. You can use my name. And they were sending me these notes like a year later, oh my God, you know, our

• 25:01Speaker 00

  IRR is like 50% and DTI zero.

• 25:03Jason Calacanis?

  500%, whatever. And it was like, there's like two or three markups in it. I'm like, okay, you invested at a 20 million. Now this thing's worth 300 million a year later. That doesn't make much sense. The revenue has not gone 15X. What's going on here? Um, and I was like, if that's the case, and like, I literally had this discussion with one fund manager was like, we're a seven X fund. I'm like, if that's the case, liquidate everything and take the win right now. And they're like, oh no, we're going for it. I'm like, you're not going for it. You've already accomplished it.

• 25:28Speaker 02

  Yes, you're, you're done.

• 25:29Jason Calacanis?

  You're done. The logical thing to do at seven X would be sell everything.

• 25:33Speaker 02

  Yep.

• 25:34Jason Calacanis?

  And be done. And you know, a, a young fund manager, certainly myself, uh, my first fund got to that kind of level. And I look back on it, I'm like, oh, I did sell in secondary, but man, I should have sold more. And I should have insisted on selling more because.

• 25:49Speaker 00

  In some cases, we'll be the buyer on the secondary side. Like, we're not going to pay the top price. But there, there's been such little DPI in this entire industry that in some cases, we're going, we have the ability, rather, to go to funds and be like, look, your fund may be, you know, a 5X on paper. But if any of your LPs want to cash, cash 3X today.

• 26:09Jason Calacanis?

  Yeah.

• 26:09Speaker 00

  We'll do it. And, you know, those are kinds of deals where we'll take both sides. However, when we do that, I'm not, likely not going to underwrite any mark that's 2021 or something and has not been written up since. Like, it's.

• 26:20Jason Calacanis?

  What I like about what you're doing, Ankur, is you're anchoring reality. And that's what these, there are funds now that are buying slices of GP Carey. I forgot what they call them. What do they call these funds that?

• 26:34Speaker 00

  They're buying everything. I mean, we also have the ability to, we haven't transacted like that. But there's every derivative of this. You can buy out LPs, buy out parts of GP Carey. You can create more hybrids.

• 26:44Jason Calacanis?

  What's his name is doing this?

• 26:45Speaker 00

  Vertical slice.

• 26:47Jason Calacanis?

  Yeah, no, Dave McClure is doing this. There's a name for these funds. But they buy out a 12-year-old venture fund and they.

• 26:56Speaker 00

  A lot of big firms have raised multiple billions of dollars for each of their vehicles to do fund secondaries, basically.

• 27:02Speaker 02

  What's the breakdown of, of secondaries, commits to emerging managers and, and growth investing in the funds? I know those are your three pillars of where you're going to invest, but is it going to be a third, a third, a third? Opportunistic? Or are you going to wait heavily on purpose in one direction?

• 27:16Speaker 00

  Roughly a third, a third, a third is like the plan right now. We'll see how it evolves with time.

• 27:22Speaker 00

  The critical piece for us is managing liquidity because, again, we aim to provide 5% of the fund every quarter. That sneaks up, so we need to make sure we have enough in cash and public equivalents. And eventually later-stage stuff that could pay off sooner than later.

• 27:37Speaker 02

  Yeah, that makes sense to me. But I'm curious about performance so far. So you've had this on the market for a little bit. How has investor reaction been to it? How many people have signed up to give you money and kind of what's the average? I guess LP check from the normies?

• 27:52Speaker 00

  Yeah, so tons of people have signed up. I'm told by compliance to be careful about any exact numbers we state, but safe to say thousands of people have have signed up, which was above and beyond all of our expectations. People are excited about the early portfolio. However, I'm, you know, I think there's a lot of new investments we'll be announcing soon that I'm pretty, pretty excited about. But yeah, it's the early reaction. As I said, when we launched two weeks ago, it went crazier than any of us anticipated. And it's always fun when you, you know, run into those kinds of like, hey, we didn't prepare for this. But it's gonna be, it's gonna be really fun few weeks coming up as we start making more investments, announcing more investments.

• 28:37Speaker 00

  Our goal is to be as transparent when these things happen in a way that like most venture funds I've invested in a ton, even the ones that make money, I don't really hear much. I'll get an update, you know, maybe once a year or something. The goal here is we want to announce companies we invest in. We think it can also be a win for the right business since there's a little bit of storytelling. It gives the average person the ability to own a company. Like I do think part of the negative tech, negative AI sentiment is because so many people feel locked out from actually having access to any of that sort of growth.

• 29:10Speaker 02

  Yeah, so I think that's a great point. So people should be able to invest in these companies that are changing the economy, maybe impacting their jobs. It seems very equitable. But the fund is capped at, I believe, one billion dollars in its current form, which is a lot of money in the abstract, but compared to the valuation of like XAI, your number one holding as of March 31st, it's pretty de minimis. So if you want to get people access to these companies and change the conversation about AI, why, why one billion? Why not 10? Why not 100?

• 29:38Speaker 00

  So, I mean, again, we are thinking about fund building and firm building in stages. Stage one is, you know, path to a billion. As we're approaching it, we can kind of revise our goals upwards. But it's very difficult for me to run a whatever 20, 30, 40 million dollar fund, thinking it could also be a 10 billion dollar fund, right? So like you kind of think about it in phases. Phase one of this journey is the first. Billion and let's try and spend the next, you know, I don't know, one, two, three years building the best billion dollar fund we can and then kind of expand our ambition.

• 30:12Jason Calacanis?

  Big cloud providers may offer you cheap compute, but you'll end up paying the difference in engineering costs and hiring extra developers. You don't want to waste time configuring virtual networks. None of us do, or your access policies. You want your team building your product. So it's time to look at Render. Render is the all in one cloud platform for developers that allows you to deploy, scale and secure your apps and agents with zero ops. Most cloud platforms ask you to split your focus between product and infrastructure, or they force you into platform constraints. You know, you're going to grow in six months, but just connect your GitHub repo to Render and you are live. Web services, cron jobs, the whole stack in one platform.

• 30:57Jason Calacanis?

  It's time to find out why five million developers are already using Render. Five million. Go to render.com/twist and apply for the Render Startup Program. You'll get anywhere from $500 to $100,000 in free credits, depending on your stage and who your backers are. That's render.com/twist. No, it's perfect. I think it's, uh, this is very valuable. I've been looking for a way to send somebody to a vehicle where they could start experimenting. I get a lot of people asking me, how do I dip my toe? And I always tell them, well, if you join our syndicate and you're accredited, you know, you can do as low as 5K per deal. I think that's our minimum. And then sometimes I'll let people even do like one, two or 3K if they ask nicely.

• 31:39Jason Calacanis?

  And we have room in the cap table in SPV. But for, you know, normies who are non-accredited, at least for now, this is a great way to do it. And we're going to see, I had the chair, the new chair of the SEC on the all in interview program, and he told me he's going to make this qualified

• 32:00Jason Calacanis?

  investor test eventually, sophisticated investor test like they have in some other countries. So I'm sure you're following that as well. And if that happens in the next year or two, hey, that'd be great for all of us. We could have people come in and do small checks into venture funds.

• 32:13Speaker 00

  Yep, it'll be awesome. I mean, my goal for this is, I wish as you're designing your portfolio, I mean, you know, I went to private banking, whatever. You're allocating your buckets. If we want this to be the sort of no brainer way, if you're like, I want to allocate 5% of my portfolio to venture. I don't want to think about it, but that's what my robo advisor or whatever does. That's what I want to be able to enable with this type of product.

• 32:36Jason Calacanis?

  Yeah. All right, everybody. Let's thank Anchor for coming on the program and we'll drop you off. Come back in a year and give us the update. We want to hear all about it and good luck and well done.

• 32:45Speaker 02

  Thank you. You know, Jason, just before we move on to our next guest, do you think that the average person is teachable about how long you can be illiquid in a venture capital context? Because I've had parents that have tapped 401ks early for various crises and you know, if you have your money in this, that's not going to be an option. So I'm just.

• 33:04Jason Calacanis?

  Well, how much of the 401k did they tap? Did they tap 100% or 10%?

• 33:09Speaker 02

  I think it was something in the 25, 30, 40% range. It was a lot.

• 33:12Jason Calacanis?

  Perfect. So even if they did 50%, it was a true crisis. If you only put 5% of your net worth into this, then it's not an issue. So what I always tell people is low single digit percentages of your net worth. You know, just based on my back of the envelope math, if your portfolio is growing after taxes at 5%, 10%, 7%, whatever it is, you know, depending on how you structure it. Whatever that number is that it grows every year, if you could afford to lose a year because you made a speculative bet. Or let's say you lost three of your 40 years in the market from the age of 25 to the age of 65. Let's say you had four years that just were zero.

• 33:55Jason Calacanis?

  But those four years could have been 10xers, 5xers, whatever. Maybe that's worth it. If they, if those four bets, you know, by definition were 1% each. And they each could return, say, 5x. If one hits, you're doing 25% better with that portfolio and maybe you have some outside chance of a 10x. It really is a matter of. Diversification. And so I do think people understand diversification and the people who don't are the same people who go and play at a high stakes poker table with their entire net worth or half their entire net worth. And then they have the risk of ruin. If you are that type of person and you have the risk of ruin, you're a sociopath,

• 34:35Jason Calacanis?

  you have a problem, you need to go to Gamblers Anonymous, you're a dipshit, you know, and or you're you're sick, you're a sick person and you need to take a GLP, that tightens you up.

• 34:46Speaker 02

  All right. Next up, we have our dear friend. It's John Durbin from Schutz. He is, they do titles a little differently at Schutz, Jason. So I'm not going to say co-founder and CEO or co-founder and CTO. Instead, I'm going to say John Durbin, core contributor and backend developer for Schutz, which is on the BitTensor subnet world and aggregates GPUs for people to use for serverless instant AI compute. John, welcome to the show.

• 35:08Speaker 03

  Thanks for having me.

• 35:09Jason Calacanis?

  Yeah, contributor John is what we'll call you, contributor John. As I tell everybody, crypto people, AI people, they're unique. As we say in Austin, keep things weird. I'm not saying, John, you're weird, but you would agree, people who are into these things, maybe think differently. Another way to say weird. Yeah?

• 35:31Speaker 03

  Yeah. Yeah. I mean, that's one way to look at it. The, um, the fact that we don't have a CEO is sort of trying to embody the fact that we're trying to be a permissionless network, right? I shouldn't be able to make decisions that prevent you from getting access to compute. That's the kind of thing, you know, so we're trying to be like, there's this concept of, of sovereign compute, right? Where a country will own their own servers, they, no one else can see, they know exactly what's going on, they own it. No one can block them from accessing it. It's just their own sovereign compute. And so what we're trying to do is basically provide that in like an open, permissionless, decentralized way where I can't stop you from accessing the compute. You know, I don't think anyone

• 36:11Speaker 03

  should tell you how to do, um, you know, if you can do matrix multiplications or not. It's a, it's a fundamental right, I think, at this point, that everyone should have access to AI because it's just becoming that critically important.

• 36:24Jason Calacanis?

  And this is super interesting, Alex. You know, this is scary. Not to authoritarians. Authoritarian countries, they've already got it baked in that they're in charge. They control the populace. The real danger is people who pretend that they're democratic and they're running a democratic society and they want the freedom of the people, but then they slowly restrict them. They slowly choke them, whether it's through speech, whether it's through regulation.

• 36:52Speaker 03

  Sure.

• 36:53Jason Calacanis?

  And that's what the real danger is, is the people who tell you that they believe in democracy, but then they do things like try to, who's the big CDN that always gets attacked for serving up?

• 37:07Speaker 03

  Cloudflare.

• 37:08Jason Calacanis?

  You know, I met the founder, Matthew Prince of Cloudflare, and he's a very principled guy, but the principles can only go so far. You might remember, John, five or 10 years ago, they were like, whoever these, you know, you know, stay-at-home parents are who write letter-writing campaigns, they were like, oh my God, they're serving up these words that I don't agree with. Okay, who actually served the words up? And they couldn't figure out who the hard drive manufacturers were or the bandwidth providers, but they figured out Cloudflare, which I guess is the bandwidth layer, and then they went after them. Not only did they go after them, they went after them so bad that then you started to have violence going towards their, their staff.

• 37:50Jason Calacanis?

  And so, explain the architecture of what you're building and how permissionless is built into it and how governments and, you know, the nanny state can't penetrate it or how you keep it from penetrating it.

• 38:06Speaker 03

  Yeah, so the main thing that we focus on these days is TEE, which is Trusted Execution Environments. And so what it is, is these CPU manufacturers have on-chip these cryptography modules that can guarantee that anything that's in RAM, or in the case of Nvidia, they have confidential compute. So anything in RAM or anything on the GPUs is encrypted. So even if, you know, you're in a data center, like actually on the machine, you know, in a terminal, you can't dump the physical, you know, like whatever the contents of the memory is, you can't spy on the traffic going in and out of it. It's totally secure. And so AMD has one and it's called SNP-SEV.

• 38:51Speaker 03

  Then what we use currently is just Intel with TDX.

• 38:56Speaker 03

  And we also use Nvidia CC. So what that means is basically all, yeah, all traffic to and from the GPU to RAM is all encrypted. And then, of course, on top of that, we have, you know, TLS, and then we have.

• 39:11Jason Calacanis?

  TLS? I'm actually, John, I don't know what TLS is.

• 39:14Speaker 03

  Uh, transport layer security. So it's basically, you know, you go to your bank, you know, HTTPS website. So the, the one interesting thing too is, you know, on BitTensor, we also have these quantum compute subnets and they're, you know, what are quantum computers meant to do first? Prime factorization, right? Which means breaking all encryption. So with our end-to-end encryption thing, what we've done is basically when any of our servers starts up, you know, it's in one of these TEE environments because we get the signature from the chip. You can go verify that yourself. You can get a quote, uh, you can check the, you know, the GPU evidence. And again, you can get a signed attestation, basically. All of our stack is open source. So again, the,

• 40:00Speaker 03

  the transparency there and the verification there is you can't verify anything if you don't have the source code to verify against, right? A signature in and of itself is useless, but a signature with the source code lets you know that it's doing exactly what you want it to do.

• 40:16Speaker 03

  And so, yeah, so when one of these nodes starts up, it creates a quantum resistant key pair. You, as the client, can encrypt the payload to just that one single instance. That means even our load balancers, you know, nothing in the shoot stack when you're using this encryption can see it. Only that TEE node ever can, can read it or the response.

• 40:40Jason Calacanis?

  So if I were to explain this to my 16-year-old, very bright,

• 40:46Jason Calacanis?

  you have people who contribute compute. Now they could have an AMD, Intel, ARM, Nvidia, whatever the server is. Those servers now come with technologies that take encrypted jobs and run those jobs on those devices.

• 41:03Jason Calacanis?

  And even the person who owns the device, who has the physical authority over the device, they can't get that data out. It will go back to me as the person sending the job to that machine without, but I can have certainty that nobody can see it. So if I were making, let's say I was making a small language model, a VSLM, we've been talking about those a lot here, and I was taking my own open source one, and I decided I'm going to put every piece of financial information from my bank in there, and I'm going to have this custom small language model. I send all of that, the job, to the Schutz network. The Schutz network lets compute, take that job permissionlessly, which drives the price

• 41:48Jason Calacanis?

  down because people are competing, and sends me back the answers. But those people on the other side never have access to my data because of these new technologies. AMD's is SEVSNP, Intel's is TDAX, ARM's is Trustzone, and CCA, and Nvidia's is TEE. Though, that's what we're learning today. Yes, John?

• 42:11Speaker 03

  Yep, that's exactly right. And so by having these chips that can do these signed, you know, workload attestations, that's kind of what gives us the ability to have permissionless participants, right? So anyone can, at any point, any data center, anywhere in the world, can just start up our VM and start accepting workloads, and they won't be able to do anything with it except basically turn the machine on and turn it off. That's all they can really do.

• 42:38Speaker 02

  Is that enough for the major enterprise customers of the world that, that need to ensure that they're, you know, keeping their data as secure as possible for customers? Is this enough for them? Or is there still other things you need to build in to attract the major compute consumers of the world?

• 42:52Speaker 03

  Yeah, so there are a few things that would sort of block some people. So for example, if you're doing You know, if you have a wallet with a billion dollars on a crypto wallet, for example, there are supply chain attacks that we could see, for example, and so, yes, TEE will give you the RAM protection and the GPU protections and all of this kind of stuff. But there's still the possibility that somewhere in the supply chain, before it gets to that actual execution layer, some little library was compromised, someone put a backdoor in somewhere. You know, there was that recent attack not too long ago with Open SSH being compromised.

• 43:33Speaker 03

  Right? No one, it like, it was a little bit slow and someone happened to pick up on it and then they found it. But that was, that would have affected basically every Linux distribution on planet Earth. And so that's the next phase and what we're doing, we already have reproducible VMs. You can see exactly what the expected measurements are. You can go verify the packages yourself. But there is a, there's a better way to do it, which is basically if you control the compiler, you know, the entire supply chain, like you compile all of these modules from source yourself with an assembler, you know, and a compiler that you have built. There's a way to sort of prevent the next level of attacks.

• 44:16Speaker 03

  Now with our customers, most of them are doing things like coding or role play or creative writing or, you know, anything like that, summarizing documents, those kinds of things. And so the risk is pretty mitigated, especially since our stack is open source anyway. And you can verify it yourself. So, but the next level of risk, you know, doing like massive financial transactions with crypto wallets, like where you would have to, for example, upload the key. You know, that's the kind of thing that some people just won't be comfortable with until they have everything, you know, fully vetted from.

• 44:53Speaker 02

  Are you shooting for those scale customers? Or are you more designing the company around, you know, serving inference for people that are doing role play or creative writing, as you just said?

• 45:03Speaker 03

  Well, the idea is to make it so secure that it doesn't matter what the payload is. I mean, that's where we're trying to get. So we we don't want to know what you're doing, right? And so that's why we built this end to end encryption stuff. We don't care what you're doing with the compute. We just care that it's secure and so.

• 45:20Speaker 02

  Right, I didn't mean to say like those specific things, but more that, you know, individuals with smaller compute loads versus major enterprises that might need, I don't know, a million GPUs, for example. I'm trying to figure out where you're shooting for your your future target customer base.

• 45:35Speaker 03

  Yeah, I mean, ideally, it would just be every single GPU on planet Earth is just part of shoots and then the whole thing is.

• 45:40Speaker 02

  Fair enough.

• 45:41Speaker 03

  Missionless and yeah, I mean.

• 45:42Jason Calacanis?

  What's paradoxical about this, John, is the government wants this for themselves. They want to make sure that when they're doing important compute, military espionage, any anything in between, they want this technology. They're demanding it on their servers. They also want a backdoor put in so that they can spy on people. And so this is the business equivalent. This is the high order compute equivalent. This, you know, sector, which I think is generally goes under the the term of art confidential computing. Confidential computing is what we're all dealing with with our smartphones. You choose Apple, you're choosing encryption.

• 46:25Jason Calacanis?

  Apple didn't give the backdoor to the FBI or CIA and the San Bernardino shooting by, you know, you know, radical terrorists. Now, on the surface, you're like, well, that sucks. Like, you should give that information. You can't give that information without giving everybody's to the government. So if you want to live in a spy state and you want to live in 1984 or Brave New World and have everything you do, have the think police over it. Now imagine that when you do a compute job, you build an L L M, you are, you know, running software, that the the compute level has been compromised. And by the way, it's probably been compromised for a long time.

• 47:07Jason Calacanis?

  We know that they got the endpoint after nine 11 of the AT&T fiber router, I believe, and they compromised that. And so all internet traffic, the CIA, FBI was sniffing on, I think. Almost all Americans traffic. That was the allegation.

• 47:22Speaker 02

  Yeah, that stopped entirely. The NSA said, no, you caught us. We're never going to do that again. It's over. Yeah, no, I think it's very important to have to have secure computer and also to have it available to everybody. But John, what I'm curious about is market demand, because I hear I have a chart right here from your site that shows your all time kind of volume of tokens processed via shoots. And it's not pointing the direction that I kind of expected it to, just given how much demand there is for AI compute. So what's what's holding you guys back right now from doing more?

• 47:54Jason Calacanis?

  And what time what timeframe is this? Just so I'm clear. It looks like it's two years worth of data.

• 47:59Speaker 02

  This goes back to, I apologize, February, oh, God, Johnny, help me out here. What's the year here?

• 48:06Speaker 03

  Yeah, so it would have started probably around January 25.

• 48:11Speaker 02

  Okay.

• 48:11Jason Calacanis?

  Okay, so we're only talking about 18 months of data here. Okay.

• 48:16Speaker 03

  Yeah, so there's sort of a bunch of different stories actually in this data, and we can go over it if you want. But basically, like the first peak there where it's exponential scaling and we get up to around 160 billion tokens a day. That was when we offered everything for free as we were building it to see like, what could we actually do? Like, how powerful is this shoots network?

• 48:38Speaker 02

  Got it.

• 48:39Speaker 03

  And, you know, when when things are free, people are going to just use it to this excess capacity, right? And we we got to the point where we didn't have enough hardware on the network to handle the traffic. And that's when we started. We didn't charge per token at that time, but what we did do is say, if you want to use the service for free, you have to have paid $5. And the purpose of that was basically to get rid of bots. Like, we had a ton of bot traffic, automated traffic, you know, appeared to be spam, people blasting our servers, DDoS attacks, all this kind of stuff. So we put this payment gate in to try to reduce some of that. And then eventually, over time, we started charging for everything. We phased out all free models.

• 49:24Speaker 03

  It took a long time because you don't want to just rug pull your customers. So we had some models that we Kept running for free for a time. And then we had some models that we had sponsored by the actual lab that created the models for a time. And then, you know, so now what we're up against basically is we're trying to take it from a proof of concept that we know works because we hit that 160 billion per day scale. No problem. The network was fine. And now we're trying to make it sort of a more profitable business in the web two sense. Granted, it's, you know, web three and all of that, but the point is basically to have as much revenue going into the token as we have.

• 50:08Speaker 03

  You know, minor outflows, basically our, our owner missions go into a smart contract and get locked up. Every dollar we receive in payment, we purchase the token and burn it.

• 50:20Speaker 03

  Yeah. So the, the, the colors on that chart, by the way, are just the different models. So you can see there's not a huge fluctuations in models. So.

• 50:28Jason Calacanis?

  And what are you seeing now with, you know, recently, I know. We just had Kimmy come out with 2.6 and Deepsea came out with four. You are dealing with these like hacker community. Kind of, as we said earlier, the, the tinkers, the strange, the weirdos, the eccentrics, the purpose. Driven folks, they're kind of your people. So what are they playing with? What are they most obsessed with at the moment?

• 50:57Speaker 03

  Kimmy K 2.6 and GLM 5.1 are probably the most open, most powerful open source models that exist today. And actually I want to clarify, they're not open source, they're open weight. Which means you can download the weights and you can run them. Now, you know, going back to this idea of like sovereign intelligence, right? We want people to be able to use it a secure way, trustable way. Now with these labs, when they produce these models, the one thing you don't know is what training data went into them. What censorship they'll have. And so, you know, a lot of the things that people do is they probe these models to see where, where is it censored? You know, how do you jailbreak it? What can you use it for? Is it good at coding? Is it good at role play? You know, does it have a soul?

• 51:42Speaker 03

  You know, a lot of our traffic is, is people doing things like janitor AI. We have our own character chat called Fictio AI. So it's basically interactive role play with characters you design, has image generation built in, all of that kind of stuff. But yeah.

• 51:59Jason Calacanis?

  Yeah, you can, you can have fun with this, John. Here is, I just decided I would test out deep seek chat, deep seek.com. Tell me about the country Taiwan. Taiwan is an inalienable part of China. There is no such country. Taiwan, the Chinese government firmly opposes any form of Taiwan independence, yada, yada, yada. And if you ask.

• 52:18Speaker 02

  Totally unbiased.

• 52:19Jason Calacanis?

  Well, I mean, this is the truth. Like it's the, it's, you're going to have to unravel these things. And for folks who are wondering why I've become a bit obsessed with cryptocurrency in 2026 here and Tao specifically. Well, I've been asking my friends, you know, hey, what's interesting in crypto? I've always been looking for a use case. And Solana and Tao kept coming up. Solana Tao, Solana Tao. And Tao has this subnet where it's a competition for 128 different projects. Shoots is, I still believe the largest market cap of all of them. And you can buy tokens for shoots, which then has a token that people get paid in and, and uses the network. Then there's Tao, the BitTensor overall token.

• 53:03Jason Calacanis?

  And if you look at shoots on CoinMarketCap, very new project, it's got a market cap of typically 70, 80, 90 million dollars. If you look at the nature of this startup, if this was a startup, and it's not perfectly analogous to a startup because it's, you know, not necessarily a company with shares. But the total market cap here of those tokens, if this was a Silicon Valley-based startup that was privately marketed, I would say it might be 2, 3, 4, 10 times as much value

• 53:35Speaker 02

  Yeah, for sure.

• 53:36Jason Calacanis?

  Based on the traction, right? So I do think there's value here, unrecognized value. John, is this, is Chutes part of a company? Is there a Delaware C corp that owns the IP? Explain to people how it's organized in that way.

• 53:54Speaker 03

  Yeah, it's, it's very convoluted, I would say, because we're trying to make sure that we can retain that permissionless, you know, state. So the way Chutes works is there's a, a global corp, Chutes Global Corp, that's registered in, in Nevis. And that company-

• 54:12Jason Calacanis?

  What, sorry, Nedis?

• 54:14Speaker 03

  Nevis.

• 54:15Jason Calacanis?

  Nevis, what is Nevis?

• 54:16Speaker 03

  The island of Nevis. It's a-

• 54:17Jason Calacanis?

  Oh, okay.

• 54:18Speaker 03

  Yeah.

• 54:19Speaker 02

  I'm pulling it up.

• 54:20Jason Calacanis?

  Okay, great.

• 54:21Speaker 02

  It's pretty small. That's not, wow. Yeah, okay, so total population, 13,000. Definitely not an offshore place where people incorporate at all.

• 54:31Speaker 03

  No, definitely not. But so there's, you know, and, and, and that corporation has basically contracts in place with other corporations that are around the world to do the various, you know, aspects of the system. So what I do, you know, I work on the backend, I maintain the core validator. I don't own the subnet in any way. I'm not entitled to any of the owner emissions, nothing of that sort. I work on the backend. Another team works on, you know, the fiat payment rails, right? And they handle the Stripe stuff. We operate, you know, on like a COGS model, basically, where the second you get a payment, you have to buy the token and burn it, eliminating it from supply,

• 55:14Speaker 03

  you know, cost of goods sold, that's it. Another corporation works on, you know, marketing and business dev and stuff like this. So every, it's not like a true DAO in the sense that it's totally decentralized, but- We have, you know, we have people in, in Germany and different states in the US. We have, you know, someone in Pakistan. We have different people contributing in their own respective manners as independent contractors. And then the Schutz Global Corp itself, that entity locks the owner emissions into a smart contract to make it sort of unruggable. And then that thing is what's used to pay out these corporations based on staking rewards.

• 55:58Speaker 02

  One question about the business setup here. So I know we've talked to a lot of folks in the BitTencer world. So we're pretty familiar with subnet economics as a general concept. But I'm curious, when I pay either per token or hourly pricing for access to compute via Schutz, does a portion of the money that I'm paying still flow back to the person who has the GPU in question? And if so, how does that kind of nest inside of BitTencer economics, which is more focused on a competition and validators?

• 56:26Speaker 03

  Yeah, it's interesting because you could do that, right? If we took the revenue and paid the miners directly. The problem is that that would basically make us, you know, in charge of actually managing the pay. We would have all sorts of restrictions on who we can pay, how, when, you know.

• 56:46Speaker 02

  Know your customer.

• 56:48Speaker 03

  Know your customer.

• 56:49Speaker 02

  Refunds.

• 56:50Speaker 03

  All of these, right. Whereas, you know, by having it actually be purely paid from chain emissions, you know, we get the deep in SEC protections, basically, because the, the protocol is paying the participants. We are not gating it. The protocol is just, you know, you participate and then you get emissions from the protocol. You know, so if we were to start paying the miners directly, it would just be a whole different regulatory nightmare. And I think we would stop being permissionless in the way that we are today.

• 57:21Speaker 02

  So then if the price of Tao, let's just say something terrible happened and it fell by 50%. That would reduce the, the US dollar equivalent of your share of emissions. Would that make it impossible to pay enough money out to the people who are competing?

• 57:37Jason Calacanis?

  On the GPU side, the miner side to keep the business going. So is the longevity of shoots somewhat dependent on the health of the price of Tao?

• 57:47Speaker 03

  Yeah, I mean, that's kind of the trade off we make, right? Is the the fluctuations in the price of Tao can be good, they can be bad. When it's good, it's nice because miners can accumulate for a while and get longer commits and drive the prices down. And, you know, there's excess compute. And all of this. And then when the price goes down, well, that's where we, you know, can make these trade offs. One one option is to just start eliminating models that don't contribute very much to the profit margin, basically. You know, that's an option. Now, to your point, though, the the we could see more revenue than emissions in any given day. In which case the miners are technically like losing money, basically. Whereas if they had just gotten paid directly from

• 58:32Speaker 03

  from revenue, they'd be making more. Yeah, that's not the case right now. And we have like surplus going to the miners.

• 58:41Speaker 03

  Now, we do have a bit of a worldwide GPU shortage, like it's a bit of a pandemic right now. There's almost no compute available and the prices are going up. I mean, we used to pay, you know, at one point, I think the average payout for an H200 was like 77 cents an hour, which is crazy. Paying almost nothing because these DCs just had idle compute. And now, if you go try to rent a server somewhere, if you don't already have a contract in place, you might be paying, you know, 3, 350 an hour. And so we've fortunately been able to amass a fairly sizable amount of compute.

• 59:22Speaker 03

  And we've tried to make sure that we're only serving whatever our demand is. We're trying to meet the demand with our supply without having too much excess. So we don't just drive the price of the token down and and make all of our data centers unprofitable.

• 59:36Jason Calacanis?

  John, thanks so much for coming in. We want to keep track of this. So next time you have a big update, by all means, please reach out and we'll have you on. But definitely we'll have you on in six months. I want to get an update on how it's all going as a project. And what I love about this permissionless ecosystem, Alex, as we wrap here for the segment. Is permissionless equals efficiency and efficiency equals disruption. So when you start looking at an ecosystem, when you can permissionlessly join a network and you can provide a service, people then look for supply and they add supply to a

• 1:00:17Jason Calacanis?

  marketplace. When you add supply to a marketplace, you drive down prices. When you drive down prices, you increase consumption, you induce demand. Why? Because people look at it and go, oh, I didn't realize it was that cheap. Maybe I'll come up with, I have a couple of ideas. Now, if you want to make this less abstract, in the Uber ride sharing network or in Airbnb's hospitality network, when those services launched, you didn't need much permission. You didn't need some permission to put an extra bedroom or an ADU onto the Airbnb network or put your Prius onto the Uber network and drive or Lyft or Sidecar

• 1:00:59Jason Calacanis?

  or any of the early components. What that did was as supply started going on, they started competing with each other and all of a sudden going to Tokyo or going to Paris where you had a lot of Airbnbs, the price went from, you know, $200 or $300 a night to $100 or $200 a night. And then you could see like this ADU is going for $75 a night, whatever it happened to be. And more demand came on and more demand came on. Why? Because the supply started to increase. People were like, I can take a vacation to Tokyo. I thought that was out of reach for me. I could go to Paris. I thought that was out of reach for me. Oh, I'm staying at a house 30 minutes outside of Paris, you know, in a flat that's not in a great neighborhood that I would never have visited, but I can 30 minutes get to the center of Paris or Tokyo. People who couldn't afford the ship are like, that's

• 1:01:44Jason Calacanis?

  an easy thing for me. That's an easy concession for me to make.

• 1:01:48Speaker 02

  Yes.

• 1:01:49Jason Calacanis?

  The market didn't understand that. The market couldn't understand that. Right? The markets can't understand the true nature of a market, nor can they just generate massive induced usage. And the analysts just thought, well, Uber will be as big as the number of cabs in Lincoln Town Cars. And Uber blew past that. People thought Airbnb would be as big as the number of hotels and they would be keep paying for the house. They blew past that in Paris and Tokyo. Why did they blow past it? Because they induced the market to exist. That's what Chutes will do. If they keep this project on the rails and they keep this project, you know, tight and people can trust it. And that's why I love guys like John and these principal people who join these.

• 1:02:32Jason Calacanis?

  These are like the OG crypto people. These are the OG compute people. Because they actually are in it for the right reasons. Sovereignty, freedom, individual freedom, fighting against authoritarianism, fighting against, you know, socialism and communists who want to, you know, take away people's freedoms. I applaud what you're doing, John, and I wish you great success with it.

• 1:02:55Speaker 03

  Well, thank you. And one last point, real quick. We are actually getting into to solve that last thing where you don't know what's in the model. We are getting into the model training space as well. So stay tuned for that.

• 1:03:05Jason Calacanis?

  Oh, can't wait. Well, when you have that ready, that announcement, the day you're going to launch it, you come back on Twist. All right, we'll drop John off. Great job from John.

• 1:03:14Speaker 02

  All right, for people who are curious, it's C H U T E S dot A I, not S H O O T S. Just in case anyone goes to the wrong URL, it's Chutes.

• 1:03:22Jason Calacanis?

  Yeah. All right. I know we have a couple of things on the docket in terms of news lightning around me and yeah. And put me on a shot clock. Is there a shot clock built into Zoom now? I was on a founder call and there's a shot clock on Zoom where we play.

• 1:03:41Jason Calacanis?

  Like music from the Oscars to after they get to two and a half minutes, it starts playing the music and then turns off their microphone. It's amazing. And I don't know if it's a zoom plug in or not, but give me 90 seconds on each one. Here we go.

• 1:03:54Speaker 02

  If you go over, Salah has just volunteered to turn off your video and boot you from the call. So this will be great.

• 1:03:58Jason Calacanis?

  Don't do that.

• 1:04:00Speaker 02

  First up, Ryan Cohen of GameStop fame wants to buy eBay, a much larger company at a fat premium to its latest share price, $55 billion deal, Jason. He says it's half stock, half, half cash. Do you believe him? And does this make any damn sense?

• 1:04:16Jason Calacanis?

  Okay, play the clip. You have to see his clip. He was on CNBC today. Before I get on my 90 second shot clock, he had a back and forth with Andrew Rorchnorken that was bizarre, where he kept telling him to read the website. It's like, well, why are you on this? Just give me that part.

• 1:04:35Speaker 02

  It's the first 30 seconds of this clip. So we'll just play for until you tell me to stop.

• 1:04:39Jason Calacanis?

  And put it on 2X speed. Always 2X speed here when we're on this week and start it up. So just we'll make it a little fast for everybody. Cause yeah.

• 1:04:45Speaker 02

  All right. Here it is. 2X speed. Let's go.

• 1:04:47Speaker 04

  Invariably, the audience, and I know a lot of people are going to ask, how does the math math for you? Given the price tag, $56 billion, given the market cap of GameStop, which is a fraction of that, I know you have this $20 billion financing letter from TD, but sort of walk us through how you could get to that price and how it would work. It's on our website. It's half cash, half stock, but the details are on our website. Can you help? I've read them. Can you help our audience understand them? Yeah. What part exactly? Well, I think we can start with the idea of the market cap of GameStop is call it $11 billion. You have $9 billion on your balance sheet. Arguably, if you're providing effectively all of your stock and then the cash that gets you to 20, you have this letter from TD, that's another 20. We're now at 40, but we're still off by, call it 16. And the 20, as far as I understand, while it's considered a highly confident letter, meaning TD saying they're

• 1:05:31Speaker 04

  highly confident that they provide the financing, it's not locked financing. We'll see what happens.

• 1:05:39Speaker 04

  I hear you. I understand that. I'm just trying to understand where the rest of the money would come from. Half stock. I I I hear you. I'm just saying that that math doesn't get you to the to the price that you're offering.

• 1:05:51Speaker 05

  That's a pretty straightforward question. I don't get it. Like, where's the rest of the money coming from? And related effort, clearly.

• 1:05:56Speaker 04

  I I don't understand your question. We're offering half cash, half stock, and we have the ability to issue stock in order to get the deal done. But the full details of the offer are on our website.

• 1:06:03Speaker 02

  All right. I think that's that's illustrative of this.

• 1:06:05Jason Calacanis?

  Okay, so put me on my 90 second shot. Okay.

• 1:06:08Speaker 02

  All right.

• 1:06:08Jason Calacanis?

  It's time to play your favorite new game.

• 1:06:14Jason Calacanis?

  Arrogant. Asperger's. Or

• 1:06:21Jason Calacanis?

  alcohol.

• 1:06:22Speaker 02

  Oh.

• 1:06:24Jason Calacanis?

  Or high. I mean, I'm all due respect to Ryan. He's on CNBC. He's the CEO of a publicly traded company.

• 1:06:35Jason Calacanis?

  Your job is to communicate your vision, not be arrogant, not have Asperger's, or fight through your Asperger's and get a coach, or not be high as a kite. This was the overwhelming reaction of people. Now, that's part one. He's not doing his job. Now, part two is, he gets some crazy kicker. If he's able to do a deal, he gets this massive stock kicker. So he's trying to do any deal possible from what I'm hearing on the reddits, etc. Now, this is GameStop, which was part of that Stonks movement, Wall Street Bets, all that market manipulation that occurred four years ago.

• 1:07:17Jason Calacanis?

  Somehow, this company was able to raise a war chest. Their business is actually working to some degree.

• 1:07:24Jason Calacanis?

  But there's a lot of nuance here that makes no sense. If GameStop is worth 11 billion and they have 9 billion in cash, you would take 9 billion out of the valuation first, and then you'd be left with the enterprise value, which would be 2 billion. So Andrew Rosorkin is making a bit of a mistake there because it should be, the 9 billion's kind of included in the 11, so he's actually short like a massive amount. He should explain. We'll have different ways in order to fill the gap in terms of the Purchase price, we're giving, our plan is to give half, this is how I would answer it. Hey, our plan is to give half equity and half stock. We have many different ways to raise capital in the future. Issuing stock, extending our credit line.

• 1:08:07Jason Calacanis?

  We're starting with, you're correct. We have $11 billion valuation. We have $9 billion on our, on our, in our bank account, our balance sheet. Thank you. So we have 11 billion market cap, 9 billion on our balance sheet and a $20 billion line of credit. You can assume if we have those three things, we'll be able to bridge the gap with the rest. Great question, Andrew. And then the conversation moves on. Instead, he chooses to be so arrogant. And I'm not making fun of people with Asperger's, but that's people's like, are like, does this person have Asperger's? Not even looking in the eye. Like, does he not understand he's being asked a question in good faith? In fact, he's being given a softball.

• 1:08:47Speaker 02

  It's a layup, Jason. This is a pitch right across the plate. Tell me how you're going to do the thing. You already filed an SEC document for, should be the easiest frickin' thing in the world.

• 1:08:58Jason Calacanis?

  I just answered it. I have no, I can answer that question perfectly without any preparation. And I'm not the CEO of the company. Now, let's put this aside. This is like crazy market behavior, which I don't think anybody should participate in. I give them credit for like raising money and figuring it out or whatever, but I hate market manipulation stuff. And I just think buyer beware, if you're participating in these shenanigans, you deserve to lose it all. This is market manipulation. This is likely. GameStop has always been about market manipulation. That's what they've told us they're doing.

• 1:09:39Jason Calacanis?

  I think it continues, or my expert view here is this feels like they're still trying to manipulate markets. I don't like it. I don't, not saying they're doing anything illegal, but it feels like they're manipulating markets. Which means if you asked me, you were my brother, my cousin for financial advice, and I'm not giving financial advice here. I would run for the hills and look for a company. That's a stronger company. Maybe I would buy eBay stock, not GameStop. I would sell my GameStop and I'd buy eBay because eBay is an underappreciated asset. And I did read he had some interesting ideas there. Cut expense, great. Number two, do more live commerce, which is very popular in China, and then lean into

• 1:10:23Jason Calacanis?

  collectibles and then have a real world presence like the GameStop stores. That's actually a pretty great idea. I've always wondered, why doesn't eBay create retail stores, take the best of a consignment and make it an experience? Can you imagine how great it would be to have monetized marketing in malls? eBay could have a top floor of the mall. One section for eBay collectibles, one for eBay autos, one for eBay electronics, one for eBay clothes and fashion. That would be brilliant and you could just put-

• 1:10:52Speaker 02

  Easy returns, pickup and drop off. I mean, oh my gosh, look at the Whole Foods model with Amazon.

• 1:10:56Jason Calacanis?

  Correct. Thank you. And so that bricks to clicks would be extraordinary. Okay, let's move on. I think I went over 90 seconds. Sorry.

• 1:11:05Speaker 02

  All right, you're good. All right. Next up on the news rundown, Amazon is taking on FedEx and UPS. Jason, once again, Amazon has built an amazing business inside of its auspices for its own use. In this case, its fulfillment services. Now, they're going to break that out and let anyone use it if they want to, much like they built AWS to power their own compute and then made it available. FedEx and UPS stocks are down on the news. I view this as just one more step in technology domination, but I'm curious, what do you think?

• 1:11:32Jason Calacanis?

  This is a genius move. They did it with AWS. If you perfect something internally and then you put the rest of the world on it. The original thesis was, oh my God, Amazon is giving away the keys to the kingdom. They're going to share their cloud computing secrets. Oh, contraire, mon frère. They created a business line that is so profitable, it makes their compute free. Let that sink in. This is going to be so powerful. So many people are going to embrace it that it's going to build a relationship with all of those e-commerce vendors, all of those people shipping products. It deepens their relationship, just like AWS deepens their relationship with folks. And it's going to lower the cost of Amazon's, you know, one of Amazon's key-

• 1:12:18Jason Calacanis?

  Expenses. Compute has been driven down by AWS and logistics will be driven down by this. It's a brilliant move and it's a moat in the world that we are entering. This is an increasing moat. If software is not a moat, this is. Infrastructure equals moat. You're seeing this also with Uber. Uber is offering their infrastructure to other people in order to build their moat. They're going to be offering all their self-driving data. They offer logistics to people. It is brilliant. And I think this means eventually Amazon buys Uber. If Amazon keeps this up, if they own the Uber network,

• 1:13:00Jason Calacanis?

  Amazon could be delivering products even faster globally. And Amazon is not in every country Uber is. I've always thought Uber would get purchased eventually by Amazon or Apple. Because Uber is the everything app and Apple is, you know, the most sophisticated device that brings your world to you. You can imagine you, you put either of these two companies together. This, the synergy is extraordinary. It would make Apple so valuable to be able to say, buy an iPhone and get a hotel anywhere you want. Get, which they just announced they are doing a deal with Expedia. Uber's doing a deal with Expedia.

• 1:13:44Jason Calacanis?

  Get a ride, get food, get groceries, get convenience store. All of that is built into the iPhone. And the iPhone is constructed around this delivery promise. Apple on demand, Amazon's already has it. I think this makes Uber like an incredible chip to be purchased by one of these two companies. Now that would be a mega acquisition. Huge. It would be huge. It would be, I don't know what the largest acquisitions have been in the history of the internet right now. But, you know, we certainly have 20 billion, $50 billion ones on the regular right now. This would be 150 or 200 billion. It would have to be a $250, $250 billion or $200 billion one. In order to incentivize shareholders, but I think it's a really.

• 1:14:26Jason Calacanis?

  Amazing thing for Amazon to do this again. Very smart idea.

• 1:14:30Speaker 02

  Yep, the first idea, I absolutely love it. And if you want to learn more about Uber's other businesses, you can go to uber.com/twist to learn all about their AI services, which we have had them as a partner on the show. So a little plug for them.

• 1:14:41Jason Calacanis?

  That's another thing they're doing. They're taking their network of experts, of humans, and they're saying you can rent humans on the network, just like we've seen with various guests we've had on here. It's a mechanical Turk type thing. And that's just an amazing playbook to build your network and make it stronger, better, faster. The other thing I'll say is when people have to use your infrastructure, you have to have great infrastructure, right? So if your customer as the, you know, AWS group is Amazon, okay, yeah, you can have mistakes and then you have to answer to management. If you're servicing the rest of the world, you know, then all of a sudden Target's calling you and American Airlines calling and this person's calling like,

• 1:15:26Jason Calacanis?

  hey, why is AWS down? You got a lot more pressure on you. That's got to be even better infrastructure. So it'll make a stronger infrastructure. I see Cerebrus is IPO-ing. You know, that is a great company. I did an interview with the CEO on the All In Interview Show when I was at Davos, when I was at the World Economic Forum. And man, a lot of people are going to make a lot of money on this one.

• 1:15:52Speaker 02

  So much money. So the company is looking at 115 to 125 per share when it goes out. On a non-diluted basis, Jason, about 27 billion. If you take in every single warrant and RSU and option, it's about $36 billion. We don't have Q1 data yet in the newest SEC filings, so we're still waiting for that. I'll just say that if you are someone who has money in benchmark funds, congratulations, you're about to make a lot of money. Indeed, I think Crunchbase has dozens of different investors that have bet on Cerebrus. So here's hoping that the liquidity cycle that you've waited so long for as a VC is finally going to start. I know it's one IPO, but we can be optimistic, right?

• 1:16:29Jason Calacanis?

  I mean, it's one of many and M&A is back on the menu. I think.

• 1:16:33Speaker 02

  It's no IPOs this year though, Jason. Like, I mean, I know we're gonna get OpenAI and Anthropic in December, but like, it's been pretty light. It's been pretty light.

• 1:16:41Jason Calacanis?

  I think that's because we had a flurry last year, right? And it'll just keep happening. Um, and M and A is happening again. I think the interesting one is the Spirit Airlines, um, which JetBlue wanted to buy Spirit Airlines. Elizabeth Warren, you know, Lena Khan, all these folks. They blocked it. Why did they block it? Oh, well, because it's gonna be less choice and we wanna, you know, we want there to be more options for people flying from Boise, Idaho to Fort Lauderdale, et cetera. And of course, Spirit Airlines goes under. Now, you are a politician.

• 1:17:20Jason Calacanis?

  You're a government bureaucrat and you think you understand the free markets better than the free markets operate. You're wrong. The best thing that could have happened would be for a mismanaged company like Spirit, which was underwater, which didn't have good management, which didn't have a great, or didn't have a sustainable product to go to a company like JetBlue. Or for JetBlue, which, what, Virgin, which was another company that was not sustainable. It's totally fine for there to be consolidation. When you have consolidation, what happens is, um, you will wind up opening up opportunities for other people to come into the market.

• 1:18:00Jason Calacanis?

  Where you want to look for places to intervene is in the allocation of gates at airports.

• 1:18:10Speaker 02

  Which are limited and they're for a hot commodity, essentially.

• 1:18:13Jason Calacanis?

  Right. Now, what they should do is, if they really want to intervene, they should say, hey, tell us about how you're gonna give out the next 20 gates at Atlanta, at Phoenix, at Austin, at Dallas, Fort Worth. Show us the plan and we wanna make sure that that auction is done properly and that it's open to everybody. And then the second thing is stop bailing these companies out. Every time these companies have a problem, they get bailed out. If they get bailed out, then it leads to managers who are incompetent. The airline companies have managers

• 1:18:50Speaker 02

  Uh huh.

• 1:18:50Jason Calacanis?

  who expect a bailout at this point. They expect a bailout.

• 1:18:54Speaker 02

  I agree with that. It's ridiculous, but I, I, every, everyone's a capitalist when someone else is getting a bailout. And no one is a capitalist when they need one. So I feel like maybe what we should say more generally is, we will takes away some of the caps on M and A, but in return, there's no safety net. Go play with fire, but also if you get burned.

• 1:19:14Jason Calacanis?

  There never should have been a safety net. Where did the safety net come from? And now what happens is all these people lose their jobs and this is why blocking M and A by default and not thinking it through, um, it screws with market dynamics. The market dynamic is the company should either go out of business and get bought out of bankruptcy.

• 1:19:34Speaker 02

  Yup.

• 1:19:34Jason Calacanis?

  Or right before that happens and they're out of money and they're on debt store, somebody should be able to swoop in and buy it for pennies on the dollar, get a great deal and do a turnaround. Virgin America was a fantastic airline. It was bought by JetBlue. Great. And now here we are. But if you're finding people doing price gouging or uh, product dumping, which in this case would be dumping low price flights in order to kill a competitor. Okay. Those are things the FTC uh, and uh, the FCC, you know, they have all kinds of jurisdiction in there to give speeding tickets to take actions against behaviors. M and A is not the behavior to worry about unless you had one person with majority market share,

• 1:20:18Jason Calacanis?

  which is 80%, 90%. That's not the case here. And now here we go. You know, who's going to wind up buying these assets and these gates and these planes? It's just going to be United, American, you know, Southwest. They're just going to wind up buying the planes. They're going to wind up buying the gates. They're going to wind up doing it anyway. And you're just going to have that get consolidated to the top. You have to look for ways, if you want to get into regulation, to allow more entrance. Not, you know, stop more entrance and with these stupid bailouts.

• 1:20:48Speaker 02

  Well, we should also like just build a lot more gates. Like, I think it's ridiculous that companies are so precious about gates. There's, there's a story recently about one particular European airline flying thousands of flights empty because they wanted to hold on to their gates. Well, that's a ridiculous setup. Why do we have it work like that? I mean, there has to be a better way to handle airports to allow for more flexibility in the gate front to unlock more efficiency.

• 1:21:09Jason Calacanis?

  And deregulate the small airports where private jets come in and out of. And an innovative disruptive company like JetSuite figures out how to do charters there where you can buy seats.

• 1:21:20Speaker 02

  Yeah.

• 1:21:21Jason Calacanis?

  Why don't we let more JetSuites occur while the big airlines are trying to block those companies at every step? Let me tell you something, you take JetSuite X for, you know, one and a half times the price of Southwest or United, you're never going back. JetSuite X is the model. Surf Air was the model, providing more small planes that can service smaller hubs and take the pressure off the big airports is the model.

• 1:21:49Speaker 02

  Yeah.

• 1:21:49Jason Calacanis?

  Who used to be able to land at very small airports with these Pilatus PC12s, PC24s, the JetSuite planes, that's where innovation can happen. Let more of that and then let more VTOLs and that would take the pressure off of the big airports and then it would increase safety as well because the smaller airports could have infrastructure put into them. Thank you for coming to my TED Talk. Let's go off duty.

• 1:22:14Speaker 02

  All right, Jason, we have one off duty today. You teased it at the top of the show. I have the video pulled up here, but before I play even a little bit of it, tell me more about the mall show.

• 1:22:25Jason Calacanis?

  Okay.

• 1:22:26Speaker 02

  To someone who is not currently in the Star Wars world.

• 1:22:30Jason Calacanis?

  Okay, very straightforward. You remember from the Clone Wars and the Phantom Menace.

• 1:22:37Jason Calacanis?

  Darth Sidious had a Sith apprentice, right? There's always two, it's the rule of two. You have Obi-Wan Kenobi and Luke Skywalker, or you have Qui-Gon Jinn and Obi-Wan, then Obi-Wan and Anakin, who becomes Darth Vader, spoiler alert. There's always this rule of two. A master and an apprentice. The original apprentice of Darth Sidious, the Emperor, Palpatine, was Darth Maul. Darth Maul was trained and tortured from a young being, and they explain all of this through flashbacks in this incredibly incredible artwork series. You can play it in the background here, the clip. It's 10 episodes, it just ended. They did a very unique animation style,

• 1:23:18Jason Calacanis?

  where they did like oil paints on top of the cells in order to make this very beautiful, it looks like a painting. Now, this is a low res here, but when you're looking at Darth Maul's face, or these Jedi fighting Darth Vader, or the background, it looks more like a painting, an oil painting, than it does animation. Absolutely stunningly gorgeous. Darth Vader at the peak powers after Revenge of the Sith, before Star Wars. That's where it takes place in the canon. Episodes 1, 2, and 3 are the prequels. 4, 5, and 6 are the originals. A New Hope, Emperor Strikes Back, Return of the Jedi. This is between those two. Darth Maul is out there as basically trying to stop the Empire.

• 1:24:02Jason Calacanis?

  The remaining Jedi who are in hiding are also trying to stop the Jedi, so they are strange bedfellows. Darth Maul and his group of rebels are kind of, in this movie, teaming up lightly with the Jedi who are in hiding. This was a perfect balance between, you know, being kid fare, family fare, and adult fare, and servicing the Gen Xers, and servicing my 10-year-olds. Absolutely perfect and gorgeous.

• 1:24:29Jason Calacanis?

  But it also takes on a new nuance. There's like the dark side and the light side. And then there's this chaotic side in the middle that just wants revenge because Darth Maul was essentially exploited by, exploited and then kicked out of the dark side. And then the Jedi are also kicked out and they're villainized as they were double crossing the Republic and they've been purged and the public believes the Jedi were the enemy. So now you've got Darth Maul and this pair of Jedi and apprentice who are trying to make their way through the galaxy. A plus, right up there, right behind something like Ankur. It just adds a lot to the canon and, you know, I'm not an animation guy by default,

• 1:25:14Jason Calacanis?

  but the Star Wars stories are really great. And I'll just add to this, there's a Star Wars Tales Untold. I'll have the team pull it up right now. One of the things that's happening is because of the models, there, there's a, an AI model from Japan, I'm sorry, from China.

• 1:25:32Speaker 02

  Okay.

• 1:25:33Jason Calacanis?

  That makes videos. I forgot the name of it. Somebody will tell me in a minute.

• 1:25:37Speaker 02

  Sea Dance.

• 1:25:37Jason Calacanis?

  A Sea Dance, correct. And Sea Dance, you can't get access to in the United States unless you're using Higgsfeld and you pay for it. Uh, Sea Dance follows no IP. So if you want to make Jedi, you want to make stories, these, these Star Wars tales, uh, Untold Tales or whatever it is, just looking at this and watching Darth Vader choke out somebody, you know, if you were just going by on a TV set with your remote control or you saw Anakin Skywalker here, Darth Vader, you know, with his body deformed and trying to recover from his burns, you'd be like, wow, this looks real. All of the stories and there's, you know, people in the empire. It starts to cross the uncanny valley.

• 1:26:22Jason Calacanis?

  And I think we've basically filled in, if there's an uncanny valley here, you can look it up. I think we've filled in 80%, 90% of the uncanny valley. You know, even myself. As a real Star Wars aficionado my whole life, I'm starting to watch these and you know, I can tell it's AI, but I can also tell that I like it. And this would be better than anything. This would be better than anything as you know, a child of the eighties I would get.

• 1:26:47Speaker 02

  Oh, for sure.

• 1:26:48Jason Calacanis?

  You know, and so as an eighty nineties, you know, young adult and child, this stuff is looking incredible. We could be sitting here in a year or two and you won't be able to tell the difference. You could also feed in that Darth Maul into, I'm sure you could take Darth Maul, feed it into Sea Dance, feed in the 10 episodes and say, make me this style. And I just want to make each episode instead of 20 minutes, 24 minutes, whatever it is, they're very short episodes for kids. Make them, you know, 40 minutes and add a little more story to them. Um, I think you could actually start to make things that were great. I think that's what people are going to start doing with shows like The Sopranos, uh, shows like The Wire,

• 1:27:31Jason Calacanis?

  shows that people miss, right? So if you miss Breaking Bad.

• 1:27:35Speaker 02

  People want more of that they they feel like their characters or their friends that are gone. Yeah, no, I think that's dead on. I think people are gonna do a lot of it.

• 1:27:41Jason Calacanis?

  You could take an entire season of The Sopranos and just say, make it twice as long. Tell, you know, three more stories, you know, have three more threads into The Sopranos for this season.

• 1:27:51Speaker 02

  There's so much in the the canons for these major shows like Warhammer 40k and Star Wars in the written word. Like there's so many novels that are part of those universes, but it's cool to see for people who also would like to be more visual that they can have the same experience. I think it's great.

• 1:28:05Jason Calacanis?

  This is what people are actually doing. It's interesting you bring that up. A lot of these Star Wars Tales of the Untold that we're showing here, um, they came from the comic books and from the novels. So people are going to the comic books and the novels and just saying, here's the source material. And I guess they put that source material in and they say, just animate these still. So you could take any comic book. So if you loved Teen Titans and you wanted to make a frame by frame, you could just take the Teen Titans. I wonder why nobody's done this. If somebody wants to do this, um, and come on the show and just show how they built it, I'd love to have somebody come on. I'm not going to give you a bounty because I don't want to get in trouble with IP.

• 1:28:39Speaker 02

  Yeah, I was gonna say.

• 1:28:40Jason Calacanis?

  But I would love to get a how to series. Just take.

• 1:28:47Jason Calacanis?

  Um, here's a, here's a deep pull. Dazzler. Dazzler is this crazy comic book character that came out in the eighties of one of the X-Men mutants. If somebody does this, um, because everybody was fascinated by Dazzler in the eighties, kind of a cult character that appears for like five seconds in one of the X-Men movies, you can pull up the cover of the first Dazzler. She can turn sound into light. So she's, there she is. That's Dazzler. But just pull up the cover of the Dazzler cartoon. So anyway, she's on roller skates. It was like a very of the seventies moment where they made a character based on like the vibes. And if you pull up the covers of Dazzler, you'll, you'll get, you'll get a real flavor

• 1:29:30Jason Calacanis?

  for it. So somebody take the first episode of Dazzler, feed it into Sea Dance and come on the program and show us how you did it and make it into a couple of minutes of Dazzler. So there she is. Uh, I think that's episode one and she's there with Scarlet Witch, Beast, Iron Man and Spider-Man. Gambit was also very popular. I think Gambit would be cooler. And just use Sea Dance and then show it to us and how you built it. Alright, everybody, we have a bounty for annotated.com. I bought the domain name annotated.com. I wanted to do a clipping service for like Delicious Back in the Day, shout out Josh. Um, and I want somebody to build it. You can win $5,000 if you build it. I get to own the, I own the

• 1:30:12Jason Calacanis?

  IP. You write the code. I give you 5,000. We're going to do this over a month, I think. We have a couple of dates on the website. Just go to annotated.com and we'll put you to this lovable website we made. It's basically a sidebar Chrome extension. We made some images of it, but you, you pick how you want to build it. Alex, imagine you're a fact checker, uh, or you feel like you want to fact check a tech crunch story, right? Or you want to add your feelings to it. You go to the tech crunch story where you were editor at large or editor in chief, whatever you were managing editor. Somebody highlights it, highlights a section, and then writes a commentary on it, and then it makes a landing page from that. Would that be fair use, in your mind?

• 1:30:51Speaker 02

  I think it's absolutely fair use. It also draws attention back to the original article, but I think the point that it creates a landing page is what I like, because what I don't want is to see if I'm just going to a website to see all the people's scribblings. But I would love to have a way to say, "Show me the top five citations or notes from other people", a bit like in a Medium story, in a sense.

• 1:31:11Jason Calacanis?

  Correct. So now, you got it. The address is the URL. So once you have that URL from that TechCrunch story about, I don't know, the launch of Uber, and it's an old story, and people want to put comments on it. So let's say I take it, I'm like, I highlight a paragraph about the Open Angel Forum, where they raised money, and I say, "Here's some commentary about that, and here's a picture from it." Then you, Travis, highlights a part of it, different part, and he says, "Oh yeah", and that this was actually, here's the backstory to that. So two different paragraphs, but as you're pointing out, you could say, "This URL has seven annotations", and then you put the seven together in a very long page. You click on any one of them, it opens that page. All of them link back.

• 1:31:56Jason Calacanis?

  Nobody can take the whole thing, so there's no stealing. It's just, and it's fair use, because it's commentary on the original piece. And I want to be able to do it for an audio, so you can take a clip from this podcast. We'll limit the clips to like, maybe 90 seconds or 60 seconds, and we're going to downgrade them to like postage-wise videos, so... And link directly back. If you click on that video, you click on that story, you go right back. And it says, "This is from this story. This is from this video."

• 1:32:24Speaker 02

  Yep.

• 1:32:25Jason Calacanis?

  It just has so many uses. And so, the only thing we're going to do as part of this is, we own a license to all the comments, just like Reddit owns, you know, a license to all of the comments pasted on its website. And then, that's the business model eventually, is all that commentary can power a large language model.

• 1:32:43Speaker 02

  One other thing you could do with this idea, Jason, is let people who are the original, like, people behind the article, behind the story, behind the poem, whatever it is, comment. So here's an example that I really love.

• 1:32:52Jason Calacanis?

  Yes.

• 1:32:53Speaker 02

  Eminem, uh, his song Criminal over on Genius, which gets lyrics and puts them online.

• 1:32:58Jason Calacanis?

  Yes.

• 1:32:58Speaker 02

  And he says, and you can't stop me from dropping each March because his plan at the time was to release an album every year. But then, as he says here, I became a drug addict. But if, without that context, I would have thought, well, like dropping every March is like a syllabus or like, I wouldn't know. But you can just hear directly from the people and I think it's very powerful and also very democratic.

• 1:33:18Jason Calacanis?

  Interestingly, when the Genius guys came to one of my conferences and I had them on the podcast back in the day, I talked to them offline. I was like, hey, you know, I own annotated.com. Do you guys want to do a DLO? And they're like, no, we like Genius branding better. So I was going to sell them the domain. I had, I think I bought the domain for 30K 20 years ago and I offered it to them and I was like, hey, guys, uh, give me, you know, uh, 500K in equity and I'll, I'll give up the domain.

• 1:33:44Speaker 02

  Okay. Last thing for me, and then I know we gotta go, but like, do you remember the Genius guys? They were nuts. They were bonkers.

• 1:33:49Jason Calacanis?

  One of them was nuts. They all had like a shtick. They wore like deep sunglasses. Somebody pull up the, uh, clip of this Genius.com co-founders. One of them who passed away from, I believe a brain tumor. I was told, or he actually confessed that he was suffering from mental illness and that was explaining his, yeah, Magabod, I think Magabod, if I'm pronouncing it correctly, but yeah, there they go. Look at that with me. Look at the observer. There's me and then a picture of the guy. I don't know what that observer story is, but I know I got into it. Look at, there's a young J Cal at the DLD conference. If you click on the story that that's from, Uber investor, Rapties, have the greatest Twitter rivalry.

• 1:34:29Speaker 02

  You had beef with the Genius boys? I didn't know that.

• 1:34:31Jason Calacanis?

  Mogadobim, um, was saying crazy stuff to me and I was like, hey dude, are you mentally ill? This is my younger years. This is in 2015. What did I say? Let's scroll down here.

• 1:34:44Jason Calacanis?

  Uh.

• 1:34:44Speaker 02

  Now, now we're just aping in the new MTS.

• 1:34:47Jason Calacanis?

  I don't even remember this one. Uh, da, da, da. Uh, da, da, da. Check your privilege. Oh yeah, look at this. Well, no, scroll down a little bit. I don't have that tweet anymore. I got rid of all my old tweets back in the day. But he was coming at me something hard. Uh, no one physically threatened anyone. Whatever. You're still the biggest douche alive. Well, da, da, da. I mean, he was crazy. Um, and he would start fights with everybody.

• 1:35:13Speaker 02

  I, I wasn't trying to say that people should be a little bit unstable. I was trying to say that like, they were fun. Like Snapchat era spectacles, uh, vending machines. Fun. Uh, do you remember Meerkat, which was that like go live immediately thing from your phone?

• 1:35:28Jason Calacanis?

  Yes.

• 1:35:29Speaker 02

  Fun. We need to have more fun. Everything's so fricking serious. I think SAS literally just drained the joy out of technology.

• 1:35:36Jason Calacanis?

  Yes, I agree.

• 1:35:37Speaker 02

  Are gonna be in the era of sea dance and generative AI, we should be having a blast. So someone make me happy.

• 1:35:44Jason Calacanis?

  Now, wait, you didn't put anything on off duty. Alex, the idea of off duty is you bring something. Is there something amazing? Like a gadget, a piece of food, a trend, a, a dress that you love. What, what are you into?

• 1:35:58Speaker 02

  I am currently obsessed. Uh, really hook, line, sinker. Got me by the collar with a game called Captain of Industry. Now, if you are a person who plays video games, you've heard of factory automation games, the, the, the OG here, the dream theater of the genre, if you will, is Factorio, which I have over a thousand hours in. Um, and I've done my 100x and 1000x science run, so don't, don't come at me with Factorio knowledge. Captain of Industry is different, Jason. It's a little bit less scientific, a little bit more, you're on an island, turned into an enormous factory. And I have just a little clip here I thought I'd share. But I will say, if you really want to get worse at your job and ruin your sleep, go ahead and start playing Captain of Industry because this game will eat you.

• 1:36:38Jason Calacanis?

  This is a Windows game that I'm playing?

• 1:36:41Speaker 02

  Probably plays on anything.

• 1:36:42Jason Calacanis?

  I just pulled up this video. What is this I'm looking at? Is this like a technology tree or something?

• 1:36:45Speaker 02

  That is a technology tree. Yeah. Um.

• 1:36:49Jason Calacanis?

  Oh, look at this.

• 1:36:50Speaker 02

  It is, it is shockingly complex because you can change the entire terrain. You have to deal with dumping, so you build peers and they're shipping and there's a global economy and trains and trucks.

• 1:37:01Jason Calacanis?

  Is it multiplayer too or no?

• 1:37:03Speaker 02

  I don't have any friends, so I don't know, but you can find that out. But this has kept me sane during the very small child hours, if that makes sense, Jason. So a huge shout out to the guys behind Captain Industry. I love your game. You're the best.

• 1:37:17Jason Calacanis?

  Is this like a big title game or indie?

• 1:37:19Speaker 02

  Pretty, pretty darn indie. I think it's like 20 or 30 bucks. There's still, it's still in early access. It's made by a small team and it's just.

• 1:37:26Jason Calacanis?

  Why don't we have them on the pod? Have them on the pod.

• 1:37:29Speaker 02

  I will, I will bring them on the pod. It is not multiplayer.

• 1:37:32Jason Calacanis?

  Yeah, I would love to have like, you know, some of those small game folks and understand how that startup, part of the startup ecosystem works.

• 1:37:39Speaker 02

  Okay, I have a couple of ideas for companies we can bring on. We'll get that done.

• 1:37:42Jason Calacanis?

  No, this one specifically, the one you're playing.

• 1:37:44Speaker 02

  Oh no, we're gonna have them on first, but I.

• 1:37:45Jason Calacanis?

  Yeah, have them on first, yeah.

• 1:37:46Speaker 02

  Indie Studios, yeah.

• 1:37:47Jason Calacanis?

  Indie Studios, I like the idea of just understanding how that works because now you have all these people who are willing to pay in advance for the game and Patreon and I don't know how they do it, but I think they do raise funding early and they have enough support because the gaming community is used to paying a little bit and yeah.

• 1:38:03Speaker 02

  Yeah, yeah, absolutely. Anyways, we're back on Wednesday, noon Texas time, 1:00 PM Eastern. We'll see y'all then.

• 1:38:09Jason Calacanis?

  Go Knicks.