Trump-Musk Fallout Recap, Circle IPO Post-Game with CEO | Dylan Patel, Jeremy Allaire, Kat Cole, Dana Settle, Anastasios Angelopoulos, Patrick Blumen, Blake Scholl

(05:24) - Elon-Trump Crashout Recap (27:59) - Timeline (43:34) - Patrick Blumenthal. Patrick discusses his experiences at New York City Tech Week, highlighting the diverse range of industry events and sponsorships. He provides insights into Ukraine's recent military operations, emphasizing the strategic impact of targeting Russian airfields to degrade their nuclear triad and the challenges posed by Russia's porous borders. Blumenthal also shares his perspective on the evolving landscape of drone warfare, noting the rapid advancements and the complexities involved in counter-drone technologies. (01:00:05) - Jeremy Allaire, CEO and founder of Circle, has a background in building internet software platforms and infrastructure. He discusses his journey from founding Circle in 2013 with the vision of creating a protocol for digital dollars on the internet, to the company's recent successful IPO, which he views as a significant milestone for mainstream adoption of digital currency. Allaire emphasizes the importance of trust, transparency, and compliance in Circle's operations, highlighting the company's role as a market-neutral infrastructure platform that enables other institutions to build upon its technology. (01:20:35) - Anastasios Angelopoulos, a Ph. D. candidate at UC Berkeley, discusses Lumarina, an open platform for evaluating AI models through human preferences. Users can input prompts to compare responses from leading LLMs like Google's Gemini, OpenAI's ChatGPT, and Anthropic's Claude, voting on preferred outputs to generate leaderboards across various tasks. Angelopoulos highlights Lumarina's recent $100 million funding round, emphasizing its role in guiding AI development by capturing diverse human opinions. (01:32:49) - Dylan Patel, Chief Analyst at SemiAnalysis, is known for his sharp analysis of AI chips, compute infrastructure, and global supply chains. He explores the technical and political forces shaping AI—from OpenAI’s scaling bottlenecks and China’s industrial edge to the risks of centralization and the potential of decentralized, open-source alternatives. (02:32:23) - Dana Settle, co-founder and managing partner at Greycroft, discusses her extensive experience in venture capital since 1998, highlighting early investments in networking equipment and semiconductors. She emphasizes Greycroft's focus on AI infrastructure and applications, as well as their sustainability fund in partnership with companies like Coca-Cola, addressing the intersection of AI and energy consumption. Settle also shares insights into the evolving IPO landscape, citing the recent public offering of Mountain, a company Greycroft invested in back in 2011, and discusses the impact of celebrity partnerships, such as Ryan Reynolds' involvement with Mountain, on business growth. (02:48:28) - Kat Cole, CEO of AG1, has a rich background in the consumer industry, having previously served as President and COO at Focus Brands, overseeing brands like Cinnabon and Jamba. In the conversation, she discusses her journey from starting as a hostess at Hooters to leading global brands, emphasizing the importance of customer experience and operational excellence. Cole also highlights AG1's strategic growth, including expanding manufacturing to the U. S., investing in clinical trials, and entering retail partnerships like Costco, while maintaining a focus on product quality and customer trust. (03:15:33) - Blake Scholl, founder and CEO of Boom Supersonic, discusses the recent reversal of the 1973 ban on supersonic flight over land, highlighting that technological advancements now allow for supersonic travel without disruptive sonic booms reaching the ground. He explains that Boom's XB-1 demonstrator achieved supersonic flight without generating audible booms, paving the way for their Overture airliner to operate over land. Scholl also shares plans to build the first full-scale pre-production prototype of Overture next year, aiming to revolutionize air travel with faster, more efficient flights. (03:29:45) - Timeline TBPN.com is made possible by: Ramp - https://ramp.com Figma - https://figma.com Vanta - https://vanta.com Linear - https://linear.app Eight Sleep - https://eightsleep.com/tbpn Wander - https://wander.com/tbpn Public - https://public.com AdQuick - https://adquick.com Bezel - https://getbezel.com Numeral - https://www.numeralhq.com Polymarket - https://polymarket.com Attio - https://attio.com Follow TBPN: https://TBPN.com https://x.com/tbpn https://open.spotify.com/show/2L6WMqY3GUPCGBD0dX6p00?si=674252d53acf4231 https://podcasts.apple.com/us/podcast/technology-brothers/id1772360235 https://youtube.com/@technologybrotherspod?si=lpk53xTE9WBEcIjV

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

• 0:00Jordi Hays?

  You're watching TVPN.

• 0:02John Coogan?

  Today's Friday, June 6th, 2025. We are live from the TVPN Ultra Dome. The temple of technology.

• 0:10Jordi Hays?

  The fortress of finance.

• 0:12John Coogan?

  The capital of capital. We have an exciting show for you today, folks. We're going to be continuing to react to the Trump Elon breakup. I haven't seen a ton of new news, but we'll cover anything that's popped up most recently.

• 0:27Jordi Hays?

  There's no facts, but there are vibes.

• 0:29John Coogan?

  Yeah, there are. There are definitely vibes, plenty of them. But I wanted to give a little recap on what's happening, what happened this week on TVPN? Because we are launching a new product. Every week, we will be doing a recap video.

• 0:48John Coogan?

  Trying to boil down the 15 hours that we produce into something that's, you know, one hour, two hours, something like that. Yeah.

• 0:54Jordi Hays?

  Groundbreaking, John.

• 0:55John Coogan?

  TVPN. And so this week, what were the top stories? What were the most interesting things that we learned?

• 1:00Jordi Hays?

  Favorite interviews.

• 1:02John Coogan?

  The, the, the Ukraine drone attack. That was huge. Operation Spiderweb. A whole ton of, of drones were smuggled into Russia in shipping containers. They emerged and went out and attacked bombers. We had Soren Monroe Anderson from Neros on the show to, to break that down for us. We also talked to Connor Love at Lightspeed, who does a lot of defense tech investing. And of course, a couple of weeks ago, we had Eric Prince on the show, the founder of Blackwater. And he had kind of predicted that the Ukrainian military was perhaps underrated. And, and we might be seeing like something like this in the future. And so that was interesting to see, to see play out.

• 1:44John Coogan?

  So we will take you through those kind of interviews, recap some of those. Then obviously we had the absolute meltdown between President Donald Trump and Elon Musk. That unfolded on X and Truth Social, the two leaders.

• 1:57Jordi Hays?

  Dueling.

• 1:57John Coogan?

  Dueling social media.

• 1:59Jordi Hays?

  Social platform.

• 1:59John Coogan?

  Exactly. And although it's a highly political story, there are big business implications.

• 2:05Jordi Hays?

  Totally.

• 2:06John Coogan?

  Talking about what's going to happen in space between NASA, Boeing, different launch providers.

• 2:11Jordi Hays?

  Yeah, the implications for Tesla, SpaceX, Neuralink, even the Boring Company, right?

• 2:16John Coogan?

  There's a lot of stuff that needs to be.

• 2:17Jordi Hays?

  Many of Elon's businesses are heavily regulated.

• 2:20John Coogan?

  Yep.

• 2:20Jordi Hays?

  And the potential impacts are substantial.

• 2:24John Coogan?

  Yeah, then we also had had some earlier stage founders on the show. Roy from Cluli came on and went pretty viral, put on a show.

• 2:33Speaker 02

  You're surrounded by journalists. Hold your position.

• 2:35John Coogan?

  Cluli is a is a service to help you cheat on everything. We got to actually try the app. Someone was asking, was pushing us to try it and see how good the product is. But regardless of the product, he's also a phenomenal marketer and he came on and put on an absolute show.

• 2:53Jordi Hays?

  And he's printing, apparently.

• 2:55John Coogan?

  Yeah, he's doing great.

• 2:56Jordi Hays?

  He can't spend all the money that they're bringing in.

• 2:59John Coogan?

  And so we'll give you an update on Roy and see where that business is. And then Keon from Nucleus came on to launch Nucleus Embryo, which he calls the first ever genetic optimization software that helps parents give their children the best possible start in life.

• 3:15Jordi Hays?

  Quite a lot of controversy there on the timeline this week. A lot of people hate it, a lot of people love it. And we'll let you kind of decide for yourselves.

• 3:24John Coogan?

  And then we had a whole bunch of AI experts on the show from Google, OpenAI and Anthropic, got to the

• 3:30Jordi Hays?

  John's.

• 3:30John Coogan?

  front leading edge of the debates around AI, AI, LLM.

• 3:35Jordi Hays?

  Poor John yesterday. You were fighting as long as you could. You didn't want to talk about drama. You got dragged into it, but we did get some great coverage from Mark Chen at OpenAI, as well as Shulto over at Anthropic.

• 3:49John Coogan?

  Yeah, it was a lot of fun. Anyway, let's go into ramp. Time is money. Save both. Easy to use corporate cards, bill payments, accounting and a whole lot more, all in one place. No, let's go into the secondary reaction to the Trump Elon meltdown.

• 4:06Jordi Hays?

  Well, first, we can call out Tesla's up 5% today.

• 4:09John Coogan?

  After being down, they were down 17 or they closed down 12?

• 4:13Jordi Hays?

  I mean, they're down 12 and a half percent over the past five days. So still not a great week.

• 4:19John Coogan?

  Okay.

• 4:19Jordi Hays?

  Just hovering on that hovering under that $1 trillion market cap.

• 4:23John Coogan?

  Got it.

• 4:24Jordi Hays?

  But. Could be worse.

• 4:26John Coogan?

  And there's, you know, the timeline is still filled with Trump Elon post, Jason Calacanis from the All In Podcast. It's a must-listen episode this week. This is, this is what they were built for. He posed just a dejected meme. Although I don't even know, is this for Mountain Head? Is this a screenshot from Mountain Head, this, this post by J Cal?

• 4:46Jordi Hays?

  Uh, yes, it is. That, that I think is the character that J Cal most sort of sees himself in, and that is the, uh, the friend in the group that, um, it's funny. So this friend in the group has like a meditation app.

• 5:01John Coogan?

  Yeah.

• 5:01Jordi Hays?

  And one of the other characters acquires it for $2 billion to get him into the billion dollar club.

• 5:06John Coogan?

  Wait, isn't J Cal an investor in Cal? That's hilarious. Wow. That's awesome. Congrats to them. Fred Delicious says, reminder that this all started with him carrying a sink. Shows Elon carrying the sink into X and then one thing led to another.

• 5:22Jordi Hays?

  I gotta say, he looks younger and happier in that photo than we've seen him in a while.

• 5:27John Coogan?

  It was, it was crazy.

• 5:28Jordi Hays?

  Politics will wear on you.

• 5:29John Coogan?

  Definitely ages you. You've seen those photos of like Barack Obama before and after.

• 5:33Jordi Hays?

  Yeah.

• 5:33John Coogan?

  It's like eight years and he's like gone gray.

• 5:35Jordi Hays?

  Yeah.

• 5:36John Coogan?

  Like his 40s.

• 5:37Jordi Hays?

  Absolutely brutal.

• 5:37John Coogan?

  Uh, this was, this was a fascinating, this was genuinely a fascinating discussion.

• 5:41Jordi Hays?

  Yes. When we were live yesterday.

• 5:42John Coogan?

  Yeah.

• 5:43Jordi Hays?

  We were covering, "In light of the president's statement about the cancellation of my government contract, SpaceX will begin decommissioning its Dragon spacecraft immediately." We had Delian react to that. Um, and, uh, some random tiny account that just looks like, I guess they're verified, so it's a real account.

• 5:59John Coogan?

  Yeah.

• 5:59Jordi Hays?

  Says, "This is a shame. This back and forth, you're both better than this. Cool off and take a step back for a couple of days." Elon says, "Good advice. Okay, we won't decommission Dragon."

• 6:10John Coogan?

  It's so great that he's just reacting this. I mean, the funniest thing about all of this is that, um, you know, it was like, it was like, this is the only news story. Like you have to react to this. This is the most important thing. And I was like, oh, like we get the Financial Times every day. Like if this is a business story, like it should be on the cover, right?

• 6:28Jordi Hays?

  Yep.

• 6:29John Coogan?

  The top, the top, the top story in the Financial Times today is Trump and Xi Jinping dial down rhetoric and agree to new round of trade talks. U.S. President says meeting will be soon. State invitations extended. Investors remain cautious.

• 6:44John Coogan?

  And then also, there's a story in here from the failed startup Builder AI owes cash to intelligence firm and litigation lawyers. And so, you know, the global economy marches on while...

• 6:57Jordi Hays?

  Yeah, I mean, there was something else...

• 6:59John Coogan?

  The kings of drama in...

• 7:02Jordi Hays?

  I mean, the fact that somebody was calling this, I forget the account, but they said, "We effectively had the political equivalent of a tactical nuke yesterday, and the S&P is up almost 2% over the past five days."

• 7:16John Coogan?

  What's up? We're wearing white suits for it.

• 7:17Jordi Hays?

  So, let's give it up for the stock market.

• 7:20John Coogan?

  We have two individuals coming on, two guests coming on to talk about IPOs.

• 7:24Jordi Hays?

  Yeah, we didn't even talk about our white suits.

• 7:25John Coogan?

  Yeah.

• 7:26Jordi Hays?

  The Circle IPO has been a tremendous success.

• 7:29John Coogan?

  Huge demand for stablecoins.

• 7:31Jordi Hays?

  Except for Bill Gurley, but, you know, very, very excited IPO window is open, at least if you're a pure-play stablecoin company. I believe Circle is now valued at about a third of Coinbase.

• 7:43John Coogan?

  Yep.

• 7:43Jordi Hays?

  Which is fascinating, considering that a large amount of Circle's revenue actually goes to Coinbase.

• 7:51John Coogan?

  Yeah.

• 7:52Jordi Hays?

  But, that said, great for Circle and the whole team, and good for the market, and I'm very excited to talk with Jeremy in a little bit.

• 8:02John Coogan?

  And if you're designing the next product that you plan on taking public, go to figma.com. Think bigger, build faster. Figma helps design and development teams build great products together. Get started at figma.com. Simone Said says, "Deeply hope someone remembered to put Luke Ferrator on a chopper out of Saigon." Let's hear it for Luke. Scroll "Respector." You know he's going to be on to something bigger and better soon. Out of the swamp, into the valley.

• 8:28Jordi Hays?

  At this point, I think he could do 100 on 500 at the gates. Like, I think he could get that round done. I think he could get that round done.

• 8:37John Coogan?

  I think he's somehow, like, I don't know, too humble to do that or something?

• 8:40Jordi Hays?

  No, I know. He's a humble, humble guy.

• 8:41John Coogan?

  But he could.

• 8:42Jordi Hays?

  But he could. All that matters is that he could.

• 8:44John Coogan?

  Yeah. It'd be amazing. And so, there's a couple Polymarkets that we should pull up. I have a screenshot here of one that I'd like you to pull up.

• 8:51Jordi Hays?

  The bigger news, we got to give it up to the Polymarkets. Polymarket is the official prediction market of X.

• 8:58John Coogan?

  Very exciting.

• 8:58Jordi Hays?

  We had heard something like this was in the works, but I didn't.

• 9:01John Coogan?

  Well, it went back and forth because there was the Kalshi rumor and then it wound up.

• 9:04Jordi Hays?

  No, it wasn't a Kalshi rumor. Kalshi preemptively announced something. And then X retracted it.

• 9:11John Coogan?

  Okay, okay.

• 9:11Jordi Hays?

  And X from the main account said, "We are not partnering with Kalshi."

• 9:14John Coogan?

  Okay.

• 9:15Jordi Hays?

  And then a week later, they announced this big partnership with Polymarket. So congratulations to the Polymarket team. I'm super excited to see how this gets integrated into the product.

• 9:24John Coogan?

  So I want you to pull up, "Will Elon Musk unfollow Donald Trump before July?" That's an interesting market. Also, there's a market on, "Will there be a reconciliation by the end of the week?" I think. And then the other interesting one is, "Does this make it more likely that Elon becomes, stays CEO of Tesla?" Or less likely? I saw the market spiking yesterday to above 20%. Seems like he might have more time on his hands to focus on Tesla. So we'll see how that one goes. So pull up some of those Polymarkets and I'll read some more posts.

• 9:56John Coogan?

  There's a whole bunch of silly posts in here. Elon Musk rushing home to have a generational crash out. And somebody put a Cybertruck, I guess, in GTA or something. That's fun. "Who gets custody of Joe Rogan?" I think he's the perfect moderator for all of this.

• 10:09Jordi Hays?

  I mean, there were so many of these that went extremely viral. You had, "Who gets custody of David Sacks?"

• 10:15John Coogan?

  Who gets custody of J.D. Vance?

• 10:17Jordi Hays?

  Of J.D. Vance. J.D. Vance actually came out yesterday, you know, and was pretty clearly picked a side. Which I think is good, right? You should probably, you know, side with the guy that you're in the White House with.

• 10:30John Coogan?

  Of course.

• 10:30Jordi Hays?

  And then work behind the scenes to kind of massage things, hopefully.

• 10:34John Coogan?

  Improve the, improve the relationship. I mean, the coverage of this has just been fascinating to me. So The Wall Street Journal has an entire, entire article dedicated to just one post. So yeah, thank you, guys. Let's, let's look through some of these Polymarkets. "Will Elon Musk create a new political party by December 31st?" 24%. I wonder. I mean, he could put up the same amount of capital as some of the major parties, right? But when was the last time America had a third party? Like, it seems unfathomable. And also, I was talking to somebody about this, uh, who had, uh, one of my friends was predicting that the Elon Musk and Trump relationship with sour.

• 11:19John Coogan?

  And I was like, I don't know, maybe it'll wind down soft. I was kind of, I was a soft landing guy. I look really stupid in hindsight. Uh, but, uh, but he was, but he, uh, but I was, I was wondering, like, just in terms of, like, not necessarily political capital, but like popularity, like who's more popular, Trump or Elon?

• 11:38Jordi Hays?

  I think Trump is wildly, wildly more popular.

• 11:41John Coogan?

  Wildly more popular. Just generally, right? And they do polling on these things. Um, because yes, you have the tech people that like Elon, but that's a much smaller segment of the market than, I, I think there were a lot of folks, like, one of the weird things about the election was that, like, you would have, like, a tech guy voting alongside, uh, like, you know, uh, like a, a, a MAGA supporter from 2016, who, who was probably deeply skeptical of Elon back then.

• 12:06Jordi Hays?

  Trump is a very successful social media entrepreneur, right? He has a billion dollar, multi-billion dollar social media app.

• 12:12John Coogan?

  He has two and a half billion in Bitcoin treasury in that company now, I think.

• 12:16Jordi Hays?

  Um, I mean, yeah, you, you, you called this morning or texted, I don't even remember at this point, but you're, you, you know, your big question was, you know, who's more AGI pill?

• 12:28John Coogan?

  This is the big question.

• 12:29Jordi Hays?

  And you had, you know, a pretty clear answer. You said that, um, your thesis, if, if I can, if I can, um, spell it out, is that Trump, uh, is not concerned with the deficit because he read AI 2027. He's a fast takeoff guy.

• 12:45John Coogan?

  Yeah.

• 12:45Jordi Hays?

  And in his mind, he's like, with, uh, you know, AGI, you know, just a quarter away.

• 12:52John Coogan?

  Yeah.

• 12:52Jordi Hays?

  It's very likely that the 2028 deficit and the federal sort of debt broadly just won't.

• 12:58John Coogan?

  It's immaterial.

• 12:59Jordi Hays?

  Immaterial.

• 12:59John Coogan?

  Yeah, immaterial. And you just play it out, right? So, so, yes, there's a huge increase in, in spending and there's not a commensurate increase in tax,

• 13:08Jordi Hays?

  Massive, massive.

• 13:09John Coogan?

  In tax returns, right?

• 13:10Jordi Hays?

  Yeah.

• 13:10John Coogan?

  And so the government is going to be spending more money than it's making and that's going to result in, in a budget deficit and over time that grows and grows and grows and we're going to be spending trillions of dollars on interest. But if you truly believe in AGI, in superintelligence.

• 13:26Jordi Hays?

  Yeah.

• 13:26John Coogan?

  You're going to see 10% of electricity being used on AI. You're going to see an incredible amount of economic value created by these AGIs.

• 13:34Jordi Hays?

  Yep.

• 13:34John Coogan?

  And the government will be able to tax that like any other income, like the rest of the economy.

• 13:38Jordi Hays?

  Yep.

• 13:39John Coogan?

  That will drive, you know, Sachin Adella said, hey, I'm waiting for GDP to grow 10% a year.

• 13:43Jordi Hays?

  Yep.

• 13:44John Coogan?

  If that happens, if you believe that happens, if you're AGI pilled, you don't need to worry about the deficit.

• 13:49Jordi Hays?

  Yeah.

• 13:49John Coogan?

  And so I think that what this debate.

• 13:50Jordi Hays?

  Trump's a Stargate guy, right?

• 13:52John Coogan?

  He is. He's big into Stargate.

• 13:53Jordi Hays?

  He announced Stargate, right?

• 13:54John Coogan?

  And so I think what this reveals is that potentially Trump is more AGI pilled than Elon.

• 13:59Jordi Hays?

  It's very possible.

• 13:59John Coogan?

  You wouldn't expect that to have been the result of this dust up, but I think that's what we learned.

• 14:05Jordi Hays?

  Totally. I think that's definitely a big takeaway.

• 14:07John Coogan?

  Definitely a big takeaway.

• 14:10Jordi Hays?

  Oh, wild times.

• 14:12John Coogan?

  Uh, the Wall Street Journal has a whole, has a whole write-up, but we've covered most of this. Uh, once allies, they had a public flaring out after Musk criticized Trump's legislative agenda. Musk attacked, attacked Trump alleging his name appears in the Epstein files and suggesting he should be impeached. Trump responded by threatening to cut off government contracts to Musk's companies. Um, just six days ago, senior Trump aides swallowed their irritation with Elon Musk and planned a chummy Oval Office send-off to him. They briefed the president on allegations of Musk's drug use. So Trump should be ready to defend the billionaire if reporters raised the issue at his goodbye event. As late as Wednesday evening, Trump played down any conflicts with Musk in a meeting with Republican senators, according to people familiar with his remarks, even.

• 14:57John Coogan?

  Though the billionaire had spent the past few days disparaging the president's legislative agenda over the weekend after Trump dumped Musk's ally as the head of NASA. So that feels like maybe one of the turning points in this whole kerfuffle. The president made it clear that he wasn't planning a high-profile confrontation with his former adviser, according to a person who talked to the president. That goodwill disappeared on Thursday. Thirteen minutes into an Oval Office meeting with German Chancellor Friedrich Merz, the poor German chancellor is just sitting there and being like, wait, this is supposed to be about Germany. I'm here to pitch Germany. And now you're talking to me about Elon Musk drama.

• 15:40John Coogan?

  I just want to talk about German stuff. Cars, Mercedes, or how are we going to sell more Mercedes in America?

• 15:46Jordi Hays?

  Yeah.

• 15:47John Coogan?

  Let's keep it focused. Let's not put the attention on Tesla. Let's talk about the Taycan. How are we getting more of those over here? How are we getting EQSs over here?

• 15:58Jordi Hays?

  Yeah, yeah.

• 15:59John Coogan?

  Anyway, Trump laid out his frustrations with Musk, marking the start of a whirlwind day in which two of the world's most powerful men went from friends to foes. By Thursday night, Trump had publicly toyed with cutting off government contracts to Musk's companies, said the billionaire, went crazy and suggested that he is suffering from Trump Derangement Syndrome. It was very hard as an ex-user to actually understand what Trump was saying because the Truth Social screenshots were so easy to fake and the community notes was like a little bit slower. And so it was always hard to understand. You kind of had to read for it and kind of read through the lines and understand, okay, this is clearly a joke. But Elon Musk kind of closed it out by saying, whatever, keep the EV solar incentive cuts

• 16:43John Coogan?

  in the bill, even though no oil and gas subsidies are touched, very unfair, but ditch the mountain of disgusting pork in the bill. In the entire history of civilization, there has never been legislation that both big and beautiful, everyone knows this, you either get a big and ugly bill or a slim and beautiful bill. Slim and beautiful is the way. And so Elon's kind of closing it out with like what he wants it to do.

• 17:09Jordi Hays?

  Adapting Donald's posting style there.

• 17:12John Coogan?

  Yeah, yeah, yeah. I do, I do wonder like... Like, how, how big of a deal is the, is the, is the government spending thing? Like, we've, we've just been hearing rattling about these, like, the deficit hawks have been pushing on this for decades, like, going back to like the Bitcoin people, right?

• 17:31Jordi Hays?

  Yeah.

• 17:31John Coogan?

  Like, when did Michael Saylor start talking about this? Like, and so, it's a little bit of like, uh, whenever I hear tech people say this, it's always like a little bit of like, boy who cried wolf. I, I get, I get convinced very easily by Joe Weisenthal saying like, we issue debt in dollars, we print dollars, like, we can inflate the debt away, there's like a million ways out of this, and like, America's still the number one economy, and I'm just kind of like, okay.

• 17:52Jordi Hays?

  Yeah, still, the chart is deeply concerning. It's the kind of chart you want to see in an investor update.

• 17:59John Coogan?

  Yep.

• 18:00Jordi Hays?

  Not, you know, tracking, uh, debt, right?

• 18:03John Coogan?

  Yeah.

• 18:03Jordi Hays?

  It's exponential, uh, and...

• 18:05John Coogan?

  Yeah, it's rough. Anyway, um, anyway, let's tell you about Vanta. Automated compliance, managed risk, improve trust continuously. Vanta's trust management platform takes the manual work out of your security and compliance process.

• 18:18Jordi Hays?

  Give it up.

• 18:19John Coogan?

  And replaces it with continuous automation, whether you're pursuing your first framework or managing a complex program. Um, The Wall Street Journal goes on to write, "The Trump-Musk blow up was long predicted. Even people close to both men privately believed that their relationship was destined to implode, but the fast-paced rat-a-tat escalation still came as a shock to a White House that has grown used to curveballs and a president who often defended Musk as his aides grew frustrated. White House officials and other allies of the president spent the day refreshing their social media feeds, watching as the situation escalated, and texting Musk's posts to each other. It was a matter of time before all this shattered because two giant egos can't be there together", said Mark Short, who is chief of staff to Vice President Mike Pence.

• 19:02John Coogan?

  "It's hard to imagine, uh, seeing it collapse as fast as this, but you can't be surprised by this." Mike Pence went there.

• 19:08Jordi Hays?

  Yeah, the only, the only person that, that had the truly perfect call on it was

• 19:13John Coogan?

  Yeah, the kid.

• 19:14Jordi Hays?

  That guy, working analyst. I got in trouble once before for calling a 24-year-old a kid, and I believe he's exactly 24.

• 19:21John Coogan?

  Oh, no.

• 19:22Jordi Hays?

  So.

• 19:23John Coogan?

  I mean, wise beyond his years. He's clearly has the chops of a

• 19:26Jordi Hays?

  Perfect call.

• 19:26John Coogan?

  grizzled 60-year-old political analyst, and so, congrats to him for the perfect call.

• 19:31Jordi Hays?

  The perfect call.

• 19:32John Coogan?

  Really fantastic.

• 19:33Jordi Hays?

  He didn't see it yesterday.

• 19:36Jordi Hays?

  I think it's working, the account is working analyst on X, and

• 19:41John Coogan?

  He crushed it.

• 19:41Jordi Hays?

  John, production is asking you to move that out of your screen, by the way.

• 19:46John Coogan?

  Thank you, guys.

• 19:47Jordi Hays?

  And he basically called back in October of last year that, that the partnership would result in the largest Twitter battle in history.

• 19:57Jordi Hays?

  And yesterday was, it was a very chaotic, crazy day on X.

• 20:03John Coogan?

  It, it certainly was. It's very entertaining times. The Fisher has reverberated inside the White House. Musk's top aide, longtime Trump advisor Katie Miller, left the White House with him last week, according to people familiar with the matter, and now works with Musk. Miller, who held, who held special government employee designation, was with Musk at almost all times in the White House. She didn't respond to requests for comment. Her husband, Stephen Miller, is one of Trump's most loyal invisible aides. He has defended Trump's legislative agenda and from Musk's broadsides in recent days, and Musk unfollowed him on X this week. The Millers have spent, had spent extensive time with Musk, even outside the White House. The public clash between Musk and Trump also jeopardizes the Department of Government

• 20:45John Coogan?

  Efficiency. The billionaire's trademark cost-cutting effort, Doge-affiliated staff, some of whom were responsible for pushing out thousands of federal workers, texted one another on Thursday about whether they would be fired next, according to administration officials. The blow-up Thursday caught top White House aides off guard. Shortly before noon, Trump sat down in the Oval Office with Murres to chat about predictable topics: the NATO alliance, the war in Ukraine. There really is so much else going on, too. It's a chaos. It took about 13 minutes for the president to unload about his billionaire benefactor, expressing irritation that Musk had been critical of his legislative agenda as too costly. It started gently. "I've always liked Elon," said Trump when asked about Musk's

• 21:27John Coogan?

  criticism of his big, beautiful bill. "I'd rather have Elon criticize me than the bill." But before long, Trump ratcheted up his rhetoric. "Elon and I had a great relationship. I don't know if we will anymore," Trump said. And yeah, there's this interesting take that like

• 21:41Jordi Hays?

  I can see them recovering.

• 21:44Jordi Hays?

  I could see them recovering. It's bad right now, but they've dialed it back. I'm glad, I'm glad they've both at least dialed back the posting today. Yesterday, yesterday, you could basically refresh and see one of them firing. But today is the 81st anniversary of D-Day, of the landing.

• 22:01John Coogan?

  And we got a fantastic poster from Anduril. We should share a picture once we take a good one, but they sent us one. And so thank you to the Anduril team for sending that over. Anyway, let's tell you about Linear. Linear is a purpose-built tool for planning and building products. Meet the system for modern software development, streamline issues, projects, and product roadmaps. Is that a, is that a golden retriever I hear?

• 22:25Jordi Hays?

  Nothing makes me bark like efficient product management and product planning. And that's what you get out of Linear.

• 22:34Jordi Hays?

  Yeah, when John's using Linear, this is all you hear.

• 22:38John Coogan?

  The sound is getting crazy. It's amazing. There's some posts from Donald Trump here. Elon, these are from Truth Social, and they've been posted in the Wall Street Journal, so I believe that they're real. I'm very skeptical of the screenshots I see.

• 22:53Jordi Hays?

  I was actually pretty disappointed with people just, just making, I guess I shouldn't be too disappointed with fake news.

• 23:01John Coogan?

  It's nothing new.

• 23:03Jordi Hays?

  Yeah, nothing really new. But, but yeah, it's, it's good.

• 23:07John Coogan?

  Elon was wearing thin. I asked him to leave. I took away his EV mandate that forced everyone to buy electric cars that nobody else wanted, that he knew for months I was going to do. And he just went crazy. The easiest way to save money in our budget, billions and billions of dollars, is to terminate Elon's governmental subsidies and contracts. I always, I was always surprised that Biden didn't do that. Is there an EV mandate that forced everyone to buy electric cars? Like, I don't remember that ever being a thing.

• 23:37Jordi Hays?

  I mean.

• 23:37John Coogan?

  I thought it was just subsidies and you would just get like seventy five hundred dollars if you bought an electric car, but I don't remember there ever being a mandate, maybe, maybe at the state level.

• 23:46Jordi Hays?

  There's a bunch of state and local subsidies at the city level across a bunch of the different companies.

• 23:50John Coogan?

  Yeah, I guess there's like EPA stuff where automakers need to have a blended MPG across their entire fleet. And so you see that that funny, there's that like Aston Martin smart car that they make.

• 24:03Jordi Hays?

  So I can give a quick break down to the different companies. So with SpaceX, they have ten different NASA awards, a bunch of DOD launch, and then lander awards through 2031. There's twenty two billion dollars roughly under contract. Trump could put pressure on the Pentagon, NASA to kind of slow roll things, right? There's, there's a bunch of, or, you know, push, push them to give contracts to rivals like Blue Origin, ULA, et cetera.

• 24:32John Coogan?

  Yeah.

• 24:32Jordi Hays?

  Tesla, they have clean car credits. Apparently it's about 1.2 billion a year in potential lost EV tax credits.

• 24:43John Coogan?

  Trump's saying that like, like, I always was surprised that Biden didn't do it. I thought that Biden was like very much in the process of doing it. And so part of the reason why Tesla stock like mooned so much after the election was that there was the expectation that those wouldn't be canceled, but like that, that was, that was in the plan before.

• 25:01Jordi Hays?

  Yeah. Starlink already has up to three billion in rural broadband subsidies.

• 25:08John Coogan?

  Oh, really?

• 25:08Jordi Hays?

  That, that, that are kind of pending. And then this is smaller, but both Neuralink and the Boring Company obviously are in highly.

• 25:19John Coogan?

  Regulated.

• 25:20Jordi Hays?

  Yeah, FDA and then Department of Transportation and then a bunch of other.

• 25:25John Coogan?

  So you don't exactly want enemies in the, in the White House.

• 25:28Jordi Hays?

  It's like, basically Elon has more exposure than anyone on earth to a hostile government.

• 25:35John Coogan?

  Yeah, yeah, yeah, yeah.

• 25:36Jordi Hays?

  Which is why I just, I seriously hope it doesn't matter if you like either of them. You know, I, I hope they can work it out because I would hate to be sitting here doing moments of silence for any of these companies.

• 25:50John Coogan?

  Or their shareholders.

• 25:51Jordi Hays?

  Or their shareholders. That's right.

• 25:53John Coogan?

  For sure. Trump was taken aback by Musk's escalation, according to his advisers. Trump told advisers he didn't believe he was harsh about Musk in the Oval Office, and he was surprised at how aggressive Musk became. Trump's aides spent some time Thursday trying to figure out what Musk's goal was. The president told advisers Musk was just being a child, according to a White House aide. Around the same time, Trump walked into a White House meeting with the Federal Fraternal Order of Police and made remarks. He ignored reporters' questions and didn't mention Musk. White House staff huddled with Trump in the early evening. Yeah, I remember that. I remember seeing a clip of he's there

• 26:33John Coogan?

  to celebrate the police department and they're immediately asking him about Elon, and he has to move on. As of late Thursday, the shiny red Tesla that Trump purchased during a high-profile photo op with Musk was still in its parking lot, just yards from the Oval Office. White House aides joked Thursday evening that they hadn't decided what to do with the vehicle. So, interesting to see where that goes. What a saga. What a saga. Back to work, back to build. It's time to build, baby.

• 27:02Jordi Hays?

  I will remember yesterday forever because we were live, sitting exactly like this, and I could tell you had no real idea of what was going on, and I was coordinating with like 50 different people, the production team, other people were texting me.

• 27:20John Coogan?

  I'm too AGI-pilled for this stuff.

• 27:21Jordi Hays?

  We were getting angry messages.

• 27:23John Coogan?

  I'm so AGI-pilled.

• 27:24Jordi Hays?

  People that I care about, being like, I do not care about AI.

• 27:28John Coogan?

  And I'm like, I do. I do. I actually just want to talk to Mark Chen and Shota. AGI is, this is the situation of the steamroller, and these guys are, now it's Elon and Trump picking up pieces of legislation in front of the steamroller that is artificial intelligence.

• 27:47Jordi Hays?

  Yeah. Well, in other news, any sphere, the startup behind AI coding tool Cursor has surpassed 500 million in annualized revenue and has raised 900 million in Series C funding from Thrive, Excel, Andreessen Horowitz, and DST.

• 28:07John Coogan?

  Absolutely huge week for Cursor. Very interesting media rollout here, so.

• 28:11Jordi Hays?

  Well, this round has gotten announced like five times by now.

• 28:14John Coogan?

  That's true. Okay, so that's why Kate Clark at Bloomberg is writing about the revenue instead of the raise, because the revenue milestone is the new data point, and we already kind of knew about the raise. But there were a bunch of stuff. I mean, there was this Bloomberg piece. The CEO of Cursor went on Ben Thompson and did an interview that was fantastic. And Ben spends half the time just marveling at how young the founder is and trying to kind of relate.

• 28:41Jordi Hays?

  No, it's so crazy. Think about, it felt like six months ago, we were talking, and people were saying Sam Altman should be Gen Z, right?

• 28:50John Coogan?

  Oh, totally. I said that.

• 28:53Jordi Hays?

  Where's our Gen Z Decacorn? Where's our Gen Z Decacorn CEO?

• 28:57John Coogan?

  I mean, Alex Wang, but there just aren't as many. And it just, it did feel like Gen Z was taking a while to find its footing in the private markets.

• 29:07Jordi Hays?

  Find their footing and get to a billion dollar revenue run rate.

• 29:12John Coogan?

  Let's go. That's the expectation in this economy.

• 29:15Jordi Hays?

  And the other data point, just two other data points. They're already being used by more than half of the Fortune 500, including Nvidia, Uber, and Adobe. And they say this scale will help us push the frontier of AI coding research.

• 29:28John Coogan?

  I mean, I want to know what's going on at the other half. Like, are the other half on windsurf, or are the other half just raw dogging their IDs?

• 29:38Jordi Hays?

  I mean, they could be using, I mean, there's so many different options. GitHub Copilot.

• 29:43John Coogan?

  But they better be using some.

• 29:44Jordi Hays?

  Somebody, Swix was saying earlier this week that GitHub Copilot is also at a $500 million.

• 29:51John Coogan?

  That's crazy. Yeah, that's a public company if it was out in the market. It's pretty remarkable. But yeah, Ben Thompson was talking to the Cursor CEO, and they're talking about how he got into software engineering. He's like, oh, well, like, you know, I was a kid and I wanted to build, I wanted to build video games, specifically mobile games. And Ben Thompson's like, this is a huge mark for like how young you are, because there's tons of entrepreneurs that got into programming through video games. Oh, I was playing, you know, like, this is me.

• 30:20Jordi Hays?

  Yeah, or they built a PC to play Counter-Strike.

• 30:22John Coogan?

  Yeah, I played Counter-Strike, I built a PC, and then I would like modify the levels and... Modify the skins and the spray paints and like edit some config files and then eventually like scale up from there. No, Cursor CEO started with, uh, started with mobile games. And he actually built one that was like really, really viral and really successful amongst software engineers. And so, uh, he's had a, he's had a storied career.

• 30:41Jordi Hays?

  Stripe account.

• 30:41John Coogan?

  Yep, yeah.

• 30:42Jordi Hays?

  What was their, what was the activity in their Stripe account when they were in high school?

• 30:46John Coogan?

  Yeah.

• 30:47Jordi Hays?

  That's the investment thesis.

• 30:48John Coogan?

  I mean, yeah, it would have been a good one. Uh, who is, who is the first investor in Cursor, I wonder? We gotta, we gotta figure that out, but.

• 30:55Jordi Hays?

  I'd say Neo was early.

• 30:56John Coogan?

  Oh yeah, Neo, that's right. Uh, but Thrive, Excel, Andreessen Horowitz and DST are all in this series C. They raised 900 million dollars.

• 31:06Jordi Hays?

  Tish was also super early.

• 31:07John Coogan?

  David Tish, let's hear it.

• 31:08Jordi Hays?

  Let's give it up for David Tish.

• 31:10John Coogan?

  Let's go.

• 31:11Jordi Hays?

  Round of applause.

• 31:14Jordi Hays?

  He's not going to post about being early as much as the rest, but we, we're gonna, we're gonna talk about it.

• 31:20John Coogan?

  Absolutely.

• 31:21Jordi Hays?

  And of course, um, Sam Bankman Fried, also early into Cursor.

• 31:27John Coogan?

  I thought it was Windsurf, but it's Cursor?

• 31:28Jordi Hays?

  No, it's Cursor.

• 31:31John Coogan?

  Wow, SBF, what a, what a picker, what a stock picker. I really wonder like.

• 31:36Jordi Hays?

  So yeah, uh, FTX had a.

• 31:39John Coogan?

  Had a stake.

• 31:41Jordi Hays?

  Had invested, I guess 200K.

• 31:44John Coogan?

  Oh yeah, we heard about this, it had like insane valuation, right? Or insanely low valuation, but it was kind of rumored and the deal might've changed hands a few times or like the stake might've changed hands.

• 31:53Jordi Hays?

  They invested 200K and they sold the position for 200K.

• 31:56John Coogan?

  Yeah, I wonder how well those FTX.

• 31:58Jordi Hays?

  Probably gonna get re-litigated or something.

• 32:01John Coogan?

  Fund, right? If that, if, if you just looked at the FTX private markets, like startup investments as a VC fund, like they probably did pretty well. What was the other one that they had a ton, oh, Anthropic, yeah, they had a huge stake in Anthropic.

• 32:12Jordi Hays?

  They were also in WorldCoin.

• 32:14John Coogan?

  Oh my God, wow, Sam.

• 32:18John Coogan?

  Should have just raised a fund, not had to deal with any of the dealing with crypto. Should have just gotten mad at crypto, pivoted to crypto to AI.

• 32:25Jordi Hays?

  Yeah.

• 32:26John Coogan?

  Could have done it.

• 32:26Jordi Hays?

  Yeah, or told FTX users, do you want to be in part of Sam's slush fund?

• 32:32John Coogan?

  Yeah, that was rough.

• 32:33Jordi Hays?

  Instead of.

• 32:34John Coogan?

  Anyway, I think the story with him is not over. We'll see as it evolves. Apparently he did get in a ton of trouble for that podcast he did from jail. Apparently you can't just podcast from jail.

• 32:44Jordi Hays?

  Yeah, that was wild.

• 32:46John Coogan?

  He did that. Anyway.

• 32:49Jordi Hays?

  Did you see this post?

• 32:50John Coogan?

  Says, "Sales tax on autopilot. Spend less than five minutes per month on sales tax compliance." Numeral HQ.

• 32:56Jordi Hays?

  The golden retriever gets on Numeral.

• 32:58John Coogan?

  That's true.

• 33:01John Coogan?

  You want to get a will or?

• 33:02Jordi Hays?

  Yeah, I just thought this was hilarious. Will, obviously of OpenAI fame, says, "This was the motivation I needed. Thanks, SFO Airport." It's just like billboard, "Win the AGI race. Dominate the leaderboard. Win vibes." He's just standing seriously in front of it.

• 33:21John Coogan?

  Yes, this is great.

• 33:21Jordi Hays?

  Made me laugh.

• 33:22John Coogan?

  Win the AGI race. Don't care about the budget. Don't care about the pork. AGI does not concern itself with pork.

• 33:28Jordi Hays?

  The lion does not concern himself with deficit spending.

• 33:31John Coogan?

  Absolutely not. Absolutely not.

• 33:36John Coogan?

  We can skip this semi-analysis post because of course Dylan Patel from Semi Analysis is coming on the show today. And we will ask him about Jensen's new math rules and have him break it down for us. This is a very fun post. But anyway, let's move on to Uber is evaluating stablecoin's potential for payments. CEO Dana Khosrowshahi says.

• 33:55Jordi Hays?

  Yeah, I wanted to throw this in here mostly so we'd remember to ask Jeremy about that.

• 34:01John Coogan?

  Oh, yeah.

• 34:02Jordi Hays?

  Like all these different massive companies looking to adopt stables.

• 34:05John Coogan?

  Yeah, yeah. Apparently payroll companies should, might be adopting stablecoins for, for like all of these different wire transfers that they do. Both to speed up payroll, which is already pretty fast, but there's also a whole bunch of stablecoins that if you put stablecoins inside. A payroll company, you should be able to earn yield on the, on the, the, like, the, the, all the dollars that you're holding. Now, you don't actually hold that many dollars just from running payroll because it comes out of the company's bank account, goes for like one day into the payroll company's account, and then it goes out to the employees, right? It just gets split up. So there's not actually that much float there.

• 34:50John Coogan?

  But for tax withholdings, there actually is a ton of float. Because every paycheck, you're taking out a thousand dollars and you're going to send it to the IRS. But you send it to the IRS nine months down the road or six months down the road on average, right? Because you're, you're, you're, you're, you're waiting, you, you only pay taxes once a year. So then, you know, half the year, you're like, on average, sometimes it's, you're holding it for 12 months. Sometimes you're holding it for one month, but on average, that's like six months of cash and it's a lot. And so, so right now, that's, that's held in the accounts, but with stablecoins, you could potentially get more direct exposure to the, to the underlying treasuries. And so there could be some sort of boon for stablecoin, or for both stablecoin providers and payroll companies.

• 35:32John Coogan?

  So B2B SaaS undefeated, another beneficiary of modern technology. Just wait until quantum computing hits. Once quantum computing hits, everything changes in payroll.

• 35:44Jordi Hays?

  Every payroll company, especially global payroll companies are, you know, are really at the forefront of quantum.

• 35:50John Coogan?

  Oh yeah, this is another thing. So what does the Elon Trump dust up tell us about Elon's quantum computing timelines? Because as you probably are familiar, quantum computing can break encryption. So guess what happens when quantum computers are ubiquitous? Oh, there's Epstein files. Everyone's going to have access to them. And so, and so if he really believed it.

• 36:10Jordi Hays?

  Quantum stocks should be down tremendously today.

• 36:13John Coogan?

  Exactly. This is the trade. Stay out of Tesla. Stay out of, stay out of Rivian and Ford.

• 36:20Jordi Hays?

  You gotta look at the second or.

• 36:21John Coogan?

  You gotta look at the second and third order effects. What does this tell us about quantum timelines? Probably that they're further out than we think. Because as soon as they crack those, boom, who's the, who, what, what's the first, what's the first file you're decrypting? The Epstein files, obviously.

• 36:36Jordi Hays?

  Of course, of course.

• 36:37John Coogan?

  Of course. I liked Mike Solana's post about that. He's like, "I honestly can't believe that we didn't know that."

• 36:46John Coogan?

  It just felt like internet lore that like, of course Trump was in there because there's like pictures. But I guess like, it's a different thing to be in the files than be in a picture, but the picture seems more damning.

• 36:54Jordi Hays?

  When I got at home yesterday,

• 36:58Jordi Hays?

  Sarah was like, "Hey, how was your day?" And I was like, "Uh, did you see the news?" And she was like, "No, I've just been with the kids." Like, all afternoon. Just been bouncing around, swim lessons, music class, all that stuff. And I was like, "Oh, well, like Elon, you know, accused Trump of like being in the Epstein list." And she was like, "Wait, like, I thought like, there's a bunch of, everybody's seen the pictures of like them hanging out." Like, having, you know.

• 37:25John Coogan?

  Yeah, there's video. There's video of them having a party together. And it was just kind of like assumed, I thought, but, you know, anyway. Anything to get the, to get the internet riled up. Elon's master, master poster. He owns it. Anyway. Regardless of your view on quantum computing, you know, you can express your view on it on public.com. Investing for those tickets seriously. They got multi-asset investing, industry-leading yields. They're trusted by millions. Go to public.com.

• 37:53John Coogan?

  Uh, let's go to Naval. He says, "The majority of voters are retired either by age, disability, or make-work jobs." Paying for mass retirement requires crushing taxes, mass immigration, or rampant inflation. The only way out of a risky bet is on tech-driven growth. AGI will save us. But yes, the make-work jobs is interesting.

• 38:14Jordi Hays?

  The AGI-pilled lion doesn't concern himself with deficit spending.

• 38:18John Coogan?

  Or, or unemployment. I mean, this is one of my questions for most of the, the truly AGI-pilled people. I try and formulate it as, uh, US unemployment over or under 10% by 2030. Because the US has rarely had higher than 10% unemployment.

• 38:39John Coogan?

  But AGI seems like something that could do a lot of jobs. And so even in the Tyler Cowen model where yes, medicine is resistant to AGI. Yes, like, you know, farming and land and plumbing and all these different things are maybe resistant to just like LLM based agents, right? But even with that scenario, you should, you should experience some, some pretty significant dislocation. And this is what that latest Dwar Kesh debate with Sholto was all about. How quickly can white collar work be automated? Some people have very aggressive timelines, some people don't. But I always try and formulate it in like, let's put it in a con, in concrete, something that's measurable 10% by 2030. And a lot of the AGI pill people, when they go, when they really unpack it, they start

• 39:24John Coogan?

  thinking about like, well, wait, like, we're really good at creating fake jobs. Like, we could just have 10 more TSA type programs. And all of a sudden, people are, you know, still employed. And it's like, yeah, my job is pretty chill. I, I mostly just like, watch YouTube and like oversee an AGI that does my job, but I still get my paycheck that way.

• 39:42Jordi Hays?

  You did a speed run to leadership in the census here in college, right? This is some incredible Coogan lore.

• 39:50John Coogan?

  Yeah, this was, I mean, the government's fantastic at this. So during the 2008 recession, there was a desire to pump money into the economy. More in the, the modern way we do that is basically with UBI and just sending checks to everyone, but it wasn't always that way. We used to have to come up with an excuse.

• 40:08Jordi Hays?

  Schemes.

• 40:09John Coogan?

  Schemes. And so.

• 40:10Jordi Hays?

  So this scheme was basically counting.

• 40:13John Coogan?

  Counting.

• 40:13Jordi Hays?

  It was a counting.

• 40:14John Coogan?

  Counting scheme. It wasn't an accounting scheme. It was a, just a counting.

• 40:17Jordi Hays?

  It was a government backed.

• 40:17John Coogan?

  It was a counting scheme.

• 40:19Jordi Hays?

  Operation.

• 40:19John Coogan?

  Yes. And so the census in 2000, the economy was ripping. It was the dot com boom. And so all the census workers were basically volunteers. My mom actually volunteered, went around and asked people in the neighborhood. It's actually kind of a nice thing to go meet your neighbors and ask them like, hey, like, fill out the census form, like, we'll be able to get more votes for, you know, the upcoming election. And, and it's very nice to use people and people are happy to do it. But in 2008, the, the economy had just crashed. 2010, the economy was in, in the sham, in, in, in shambles after the, after the recession. And so they decided to pay everyone like $20 an hour to do a job that people were previously doing for free and throw like way more resources at it to get like better census data. But of course.

• 41:00John Coogan?

  You you can only spend so much. And so I wound up getting like a management job there and getting paid a ton of money to do like basically nothing.

• 41:07Jordi Hays?

  You were managing hundreds of people.

• 41:10John Coogan?

  Not quite hundreds, but dozens. And it was it was actually my 21st birthday. And I remember going out and being like, yeah, guys, like, I can't really like, fully take advantage of this and like, drink that much tonight, because I have to go to work tomorrow.

• 41:24Jordi Hays?

  Got to look after your team.

• 41:25John Coogan?

  And and do an orientation for 40 people that range.

• 41:30Jordi Hays?

  A scaled counting operation.

• 41:31John Coogan?

  From five years older to me than 50 years older than me. Like, there was truly no one even close to me, still in school.

• 41:39Jordi Hays?

  I would pay a lot of money to have a video of you up in front of all of them talking.

• 41:44John Coogan?

  It was a wild time, wild time. Learned a lot about the government. Anyway, we have Patrick Blumenthal in the studio. Let's do one more ad read. Let's talk about out of home advertising. Adquick.com. Out of home advertising made easy and measurable. Say goodbye to the headaches of out of home advertising. Only Adquick combines technology, out of home expertise and data to enable efficiency in buying seamless ad buying across the globe.

• 42:07Jordi Hays?

  Wrong screen share, wrong screen share. But we can talk about Eight Sleep 2.

• 42:12John Coogan?

  Get a Pod 5 Ultra. Pod 5 has all this. I had a brutal night's sleep. It's been chaos. I think I think the two I think the two one year olds took the Elon Trump breakup really, really hard.

• 42:25Jordi Hays?

  Yeah.

• 42:25John Coogan?

  I think the four year old as well, very, very difficult. Like, it clearly like, he can't really articulate if he's a Trump guy or an Elon guy, but he didn't let that on. But it was it was a dark moment for him.

• 42:39Jordi Hays?

  Well, they're all America guys.

• 42:40John Coogan?

  Exactly. Exactly. They were kind of like, daddy, China won. China won. China won.

• 42:48Jordi Hays?

  The twins' first two words. China won.

• 42:51John Coogan?

  China won. Yeah, yeah, yeah. They're disappointed.

• 42:54Jordi Hays?

  Dada, China won.

• 42:55John Coogan?

  Yeah, but rough night of sleep. I got like a 64. He crushed me.

• 42:59Jordi Hays?

  I mean, I didn't do much better, Johnny. I got a 73. If you want to get on the official matchers of TBPN.

• 43:06John Coogan?

  Go to eightsleep.com/tbpn. They got a five year warranty, 30 night risk free trial, free returns, free shipping. Let's bring in our first guest, Patrick Blumenthal. I've been on a podcast with him before. We did tire wires together. Good to have you here in the studio. Welcome to the show. Long overdue. How are you doing? Thank you so much. Break us down. Actually, first, let's kick it off with an intro. What are you doing? Where are you? Are you in America finally? Last time I was on a podcast with you, I think you were halfway across the world.

• 43:34Speaker 03

  I am in New York City right now.

• 43:37John Coogan?

  Cool.

• 43:37Speaker 03

  For the illustrious, decadent, incredible New York City Tech Week.

• 43:41John Coogan?

  Oh, fun.

• 43:43Jordi Hays?

  Fun fact, I created New York Tech Week.

• 43:46John Coogan?

  Co-founder, right here.

• 43:47Jordi Hays?

  Yeah.

• 43:48John Coogan?

  Yeah.

• 43:48Jordi Hays?

  Yeah, passed it off to Andreessen after the first year, but, uh, but yeah, the very first New York Tech Week was by yours truly.

• 43:58Speaker 03

  One of the biggest.

• 43:58Jordi Hays?

  Still on, still on, still on the domain.

• 44:01John Coogan?

  Yeah. Uh, yeah, break it down for us. What, what, what have the best events been? Is it mostly VCs, entrepreneurs? Is there a lot of pitching? Is there, uh, how are the ads? Are there good sponsorships?

• 44:12Speaker 03

  There's a lot of ads and I think the like attendee to event ratio has like shifted massively compared to previous years. I only went to two events, by the way. So everything that I say, take it with a grain of salt. I'm actually just in New York and then it happens to be during Tech Week.

• 44:24John Coogan?

  Cool.

• 44:25Speaker 03

  Um, there's a lot of events, a lot of sponsors, virtually for every single industry. Like there's a million NatSec events. There's a million.

• 44:32Jordi Hays?

  Interesting.

• 44:32Speaker 03

  At tech events. It's like virtually every industry, uh, every type of person.

• 44:36John Coogan?

  What's the reaction?

• 44:37Jordi Hays?

  You seem a little tired, Patrick. Were you up a little late last night?

• 44:41Speaker 03

  I've been up late a lot this week and the previous week and the week before that, to be honest. New York is an exhausting city. It's not quite, uh, uh, the same as San Francisco.

• 44:50Jordi Hays?

  Do you sleep more when you're in Ukraine or New York?

• 44:54Speaker 03

  Dude, I actually sleep really well in Ukraine. I find the food to be so much better too. So you can like somehow smoke a bunch of cigarettes and drink a lot and still sleep really well. It's a true meme. The meme is real.

• 45:05John Coogan?

  Nice. What's the reaction been in, at these cocktail parties to the Trump Elon news?

• 45:11Speaker 03

  Uh, it's a good question. It came up a lot last night. It wasn't actually a Tech Week party, but, um, you know, part of the, it was a, it was a couple of dissident right events, we might call it that.

• 45:23Speaker 03

  I think, I think, uh, people don't care as much as Twitter, to be honest. Uh, no one, no one really had like any strong takes, no one's taking sides, I guess.

• 45:31John Coogan?

  Yeah, there's just not that much to go on, like, it's, it's, it's still like, it's like crazy, but then in and out in a few minutes, but, uh, certainly something to track. Uh, but let's move on to the reason we wanted to have you on. Uh, can you give us your reaction and breakdown to the Ukrainian operation that I believe happened last weekend? Uh, we covered a little bit on the show, but I'd love to get your take and, uh, maybe just introduce exactly what happened. And then we can go into some of the history and implications.

• 46:00Speaker 03

  Yeah, so at a high level, what happened, obviously everyone heard about it, but, um, you know, specifically, um, Russia had a very, very big part of its nuclear triad, uh, get degraded. So they lost like 33% of their kind of air launched cruise missile capacity. Um, it's a bunch of strategic bombers that they manufactured during the Soviet Union, um, completely irreplaceable. And so one of the kind of big asymmetric advantages of Russia during the war has been that they can just launch a massive amount of stuff from really far away, like way beyond the range of Ukrainian fighters, Ukrainian air defense systems. Um, they use cruise missiles, which obviously have a, uh, propulsion on the munitions. So it goes much further, um, than it otherwise would.

• 46:44Speaker 03

  And they also have glide bombs that they've been using for the last, uh, you know, three years of the conflict, which is basically just taking dumb bombs and making them fly much further than they otherwise would. Um, and so really all Ukraine has been able to do is destroy the platforms. Like, there's just no way that they're, they're going to shoot down every single cruise missile. They're not going to shoot down every single head. And so, um, this is essentially the best thing they can do. It's just like go to their airfields and blow things up when they're still on the ground.

• 47:09John Coogan?

  You mentioned the nuclear triad, so these bombers that were destroyed were actually capable of carrying and dropping nukes, even though that's not directly relevant in this conflict, at least not yet.

• 47:18Speaker 03

  They're all nuclear capable, or a lot of them, yeah. And so, um, you know, you have ballistic missile submarines, you have strategic bombers, you have ground launched ICBMs.

• 47:27John Coogan?

  Yep.

• 47:28Speaker 03

  Um, and ideally you want all three, because the idea is essentially that. You have too many nuclear assets in too many different places that you know you want essentially deterrence. So even if the US were able to first strike with you know hypersonic missiles, every single ground silo that the Russian Federation has, they'd still have a bunch of strategic bombers on station, a bunch of submarines on station. So we would still be screwed, basically.

• 47:56John Coogan?

  It's crazy to think of Russian nuclear submarines like just trolling around the ocean. I feel like they've been like so pushed back, so contained, but of course that's obviously.

• 48:07Jordi Hays?

  Well, that's the point of nuclear submarines. You can go and just hang out for quite a long time. How, what do you think the, is this type of attack a one and done? They operated it on cellular networks, which was a surprise. Do you think that Russia will make changes that make that a lot harder in the future? What's your kind of reaction there?

• 48:33Speaker 03

  I think the reality is that Russia is a very porous country. Like it's exceptionally easy to get things in and out to their advantage and to their disadvantage. Like people don't realize how many Western components are in like every single Russian drone. Like they're still heavily, you know, using Western companies and components for virtually everything. They get in through a wide variety of ways. But to our advantage, obviously, the Ukrainians can do the same thing as they've demonstrated in this case. I think, you know, the future attacks are going to rhyme. They're not going to be exactly the same. Like what Russia is probably going to do is improve their jamming operations at airfields that traditionally have not been subjected to Ukrainian drone strikes. They're going to change their procedures around daytime operations. So generally, one-way attack

• 49:18Speaker 03

  munitions, both on the Russian and Ukrainian side, happen at night. It's kind of random that like on a Sunday morning, basically, you know, there were a couple hundred Ukrainian drones sitting all these airfields. It's like quite uncommon. And we don't know where the failure was on the Russian side. Like were the jammers online? And the Ukrainians just knew what frequencies the jammers were working on. And so they just operated outside of that. Was the Russian jamming guy who just sits there with a big red button, just not at his station at the time because he wasn't expecting it. Um, there's kind of a lot of open questions around that, and I'm sure there's going to be like procedural changes. Um, but when you, when you kind of step back from the specific attack of like

• 50:00Speaker 03

  big trucks with garden sheds that are containing all these drones near air bases. Um, and you just look at the basic kind of formula there, which is civilian infrastructure, near military assets. Um, the attack surface is just really wide. So like it could be a railcar, it could be a truck, it could be a van, um, it could be a ship in a port. Right? The military facility doesn't have to be an airbase. It could be a factory, it could be the Kremlin, it could be any logistics depot, it could be a base. Uh, and so when you multiply all that complexity, basically, across the eleven time zones that Russia has territory with hundreds of critical facilities, it's, it's kind of unstoppable, to be honest.

• 50:37Jordi Hays?

  Yeah. That's interesting. How are, um, how are you thinking of investing in drones as a category? You've been on the ground in Ukraine, you've seen, I'm sure, a lot of the stuff that they're doing, which is evolving constantly. Sure, you've met a lot of the American drone startups and obviously, you know, there's a huge range of players from Nero's to uh, you know, Anduril to, you know, counter drone startups like ACS. Uh, but how are you, how are you looking at the category and, and where, where do you think it's investable?

• 51:10Speaker 03

  So I think, um, Ukraine is interesting specifically, and then I'll, I'll answer your question. Ukraine's interesting specifically because you have a lot of like consolidation around the same exact ideas. So like I've seen a lot of drone factories spread out around Ukraine. They're all making generally the same stuff. Within FPVs at least, and like you have different components like, oh, this FPV, we're going to use fiber cable for it because this area is jammed. Um, but at, at a high level, every FPV in Ukraine is like exceptionally attributable. It's like 3D printed. Very cheap components from China are now some, sometimes domestically produced, but like very, very cheap. Those are not really what I think of as venture backable. Um, you also have all, obviously all the added unique risks of

• 51:52Speaker 03

  their factory might get blown up by a cruise missile. The founders in many cases are also active duty soldiers. So you have to kind of underwrite the additional risk of them getting killed on the front. Um, not to be so morbid, but it's true. In the US ecosystem, more like a traditional startup, obviously, like there are no founders who are active duty in the US. Um, there isn't exactly the same set of risks and they're much more focused on selling to kind of the creme de la creme customer, the DOD. So the capabilities are just much more exquisite. Um, and so there's a lot of stuff to bite off because the US, similar to, you know, Russia operating in 11 time zones. The US operates in every time zone because we have bases literally all over the world.

• 52:32Speaker 03

  And so every single climate, every single, uh, potential adversary, Iran, China, North Korea, Russia, et cetera. They demand different solutions, uh, in each theater. They demand different solutions for different operations, uh, during different times of the day, different weather, like all these different things. Um, and so the reality is that there's actually a lot to invest in. Specifically with drones and counter drone stuff. Um, I think the future of like the integrated air defense system, like, you know, we think of as like the Iron Dome. It's going to be much more heterogeneous, right? So like Israel now has like five or six different types of missiles they use. They're testing lasers, they're testing a kind of other couple of stuff. But it's like a much more stationary and static type of system.

• 53:15Speaker 03

  The integrated air defense system of the future is going to be like three or 400 different things. Like this is going to jam this one thing, this is going to intercept this one thing. This, you know, is just hitting an FPV, so it can be a small gun, like in the case of ACS. Um, and then other things, you know, you need, uh, ballistic missiles to destroy other ballistic missiles. So you basically are going to have this system, like a command and control system that senses all these different things and then essentially triages.

• 53:42John Coogan?

  What is, uh, Russia doing on the FPV drone side? We've heard that Ukraine is producing, I think, millions a year now. It seems like really, really mega scale. Has Russia been able to match that at all or do they take a different tact?

• 53:58Speaker 03

  I don't know where the official numbers are, to be honest, but I would be surprised if Russia was producing less, to be honest. I mean, I think certainly within the same order of magnitude. Um, obviously, there's very poor fidelity on the Russian side. But one thing that you can just look at, um, and this isn't just FPV drones, this is just drones broadly. One of the things that you can look at is like, how many she heads are attacking, uh, Ukraine every single night?

• 54:20Jordi Hays?

  Sure.

• 54:20Speaker 03

  It's in the hundreds. Like, they're literally just lobbing hundreds of she had drones at Ukraine every single night of the week. Um, and so I don't know if you guys saw, but they did their quote unquote retaliation last night. It was basically like any other night. They just logged a bunch of drones at Ukraine. Um, you know, the Russian economy now is like literally entirely a war economy. Like, I don't know what it would look like as, you know, defense as a percentage of GDP like.

• 54:45Jordi Hays?

  Yeah, that's, that's one of the big issues with peace, at least, uh, on the Russian side is what happens to the economy? If you no longer need to be producing, you know, huge volumes of tanks and drones and missiles and all these other things.

• 55:00John Coogan?

  So depressing. So many great mathematicians there. They should just be building hyperscale data centers and racing for AGI. You know, they, they have the talent and they're focused on, you know, kinetic warfare.

• 55:13Jordi Hays?

  Death.

• 55:13John Coogan?

  Fighting, fighting the last war.

• 55:16Speaker 03

  Well, that's probably got to end the war so that we can do joint AGI development with Russia.

• 55:20John Coogan?

  Exactly, exactly.

• 55:21Speaker 03

  And the war first.

• 55:22John Coogan?

  Yeah, or maybe just more brain drain. I wonder if there are more Russian scientists that are leaving because of, uh, uh, how crazy the war effort is and if that'll make it easier to recruit, you know, brilliant scientists.

• 55:33Speaker 03

  There's a lot of people just hiding to mostly on the Ukrainian side because Ukraine obviously has the draft. But a lot of Russian scientists left in the first few days of the war. Through like Georgia and Armenia, and now they're just like refugees. And then a lot of Ukrainians within AI and tech, um, obviously a tremendous amount of them have joined the military and they're now developing drones. But there's still a lot of Ukrainians that are just like hiding in their houses, basically. And their wives just do all their errands for them. Like, they're, they're not allowed to leave the house because they're going to get conscripted.

• 56:01John Coogan?

  Yeah.

• 56:01Speaker 03

  Uh, so their wife gets groceries and everything.

• 56:04John Coogan?

  Can you talk to me about? What is actually involved in visiting Ukraine right now? Is this something where you need to fly to a different country and take a train in? Is the airspace dangerous? Do you need a visa? What does the State Department think about visiting Ukraine right now? If anyone in the audience is considering going? What's the vibe on the ground? Where do you stay? How do you actually get connected? Can you walk me through your experience visiting Ukraine?

• 56:29Speaker 03

  Yeah, it just kind of depends on what you want to do. So I don't know how specific I should be about my next trip, but the more east you go, the more difficult things become, obviously, both in terms of getting approvals, but also just like transportation and then also your risk tolerance would have to go way up. So like, you know, hypothetically, if I go to Kharkiv, which is very close to the Russian border, it's basically on the Russian border, the risk considerations are just very different. In terms of what to expect every night from Russian strikes, what to expect in the context of the war, like there is always some kind of an offensive going on around Kharkiv. And so you do have to be careful. You know, what I would say is that I obviously have a high risk tolerance.

• 57:11Speaker 03

  What I would say is it's not as dangerous as people think statistically. So like, you know, the likelihood that you're going to get killed even in a drone strike when like if you're in Kiev, let's say, or Kharkiv, and they're striking it hundreds of times per night, these are big cities, you know? So likelihood that you actually get hit by anything is pretty low. In terms of getting it in the country, you have to fly in through Poland, basically. So you go into Poland and then you drive into Ukraine. And it's a big country. So it's like 14 hours from Poland to Kiev.

• 57:41John Coogan?

  Yeah, I mean, we've heard, I mean, we saw during the global war on terror, like there were plenty of journalists that made it in and out. Obviously, it's extremely dangerous, but it is doable if you're careful enough. Can you talk about the public relations strategy around the Ukraine attack on Russia? I found it interesting that we were getting like high fidelity video, really detailed analysis.

• 58:04Jordi Hays?

  Yeah, first party video.

• 58:05John Coogan?

  Exactly. And the sentiment in the early war was very much like support Ukraine. Then there was recently some pushback about are we spending too much on this? Is this even our war to be fighting? And that was a kind of political football that went back and forth, both on the left and the right in some ways. This makes, this feels like.

• 58:26John Coogan?

  It feels like the takeaway is that the Ukrainians are innovative and they're adapting and they're not letting down and so maybe it's not time to back down in supporting of them. Is that deliberate? Where do you think this goes from here in terms of support from America?

• 58:41Speaker 03

  I think there's like different groups of people that the Ukrainians want to kind of attract or get attention from. These kinds of attacks and the reason why they're so public about it, including posting footage, is that they're trying to basically convince the rest of the world that they're worth supporting in a very pragmatic way. It's like, forget about the fact that Russia started the war, that Ukrainians are being killed, any of that's kind of irrelevant. The main calculus is, hey, yes, we are, you know, one fifth the population of Russia, we have a much smaller economy, you know, we have manpower issues, all these things are true. You know, Russia historically, you don't want to fight a land war against over an extended period of time. We do these operations, the Ukrainians do these operations because it's a way of showing that they've essentially found asymmetric

• 59:26Speaker 03

  ways to offset it. And that if you send them money, if you send them weapons, if you provide intelligence support, they're going to keep finding new ways to do it. So it's just them basically showing every six months, really, we're going to find a new way to reinvent ourselves and to keep Russians on their feet, basically.

• 59:41John Coogan?

  Very cool. Well, good luck on your next trip. Stay safe out there and enjoy the rest of New York Tech Week.

• 59:47Speaker 03

  Appreciate it. I will. Thank you guys so much.

• 59:49John Coogan?

  Be safe, Pat. Great talking to you. Bye. Next up, we have Jeremy from Circle.

• 59:57John Coogan?

  I'm so excited for this. I'm still learning about quiet periods and when folks can talk, but we nailed this one and we're so excited to have Jeremy on the show. Welcome to TBPN. How are you doing? How are you feeling? Great to have you. Congratulations.

• 1:00:13Jeremy Allaire?

  Thank you. Thank you. I'm feeling good. It's been a really intense couple of weeks and obviously a really exhilarating last couple of days.

• 1:00:24John Coogan?

  You get any sleep last night?

• 1:00:26Jeremy Allaire?

  I did, I did. I managed to, my family was able to join me for the ceremonies here in New York and got dinner with my family and got some rest, yeah.

• 1:00:36John Coogan?

  We talked to Brian Armstrong about the initial rollout of the Circle partnership years ago. This has been a classic overnight success, very clearly.

• 1:00:48Jeremy Allaire?

  Call it your overnight success, yes.

• 1:00:50John Coogan?

  Yeah, but, uh, we love an overnight success on this show. But can you give us a little bit of the history and the story you told about the company when you were taking Circle public?

• 1:01:02Jeremy Allaire?

  Yeah, absolutely. I mean, look, you know, my background had, you know, prior to this, been building internet software platforms and infrastructure from like programming languages, developer tools, digital media platforms. And I was always interested in sort of how the open internet and open networks could change the way different parts of society work. That was what animated me. And in 2012, I got deeply into the technology behind crypto. And 2013, really formulated this idea that, you know, it would become possible to build a protocol for dollars on the internet, where you could issue a, what I thought of as a full reserve dollar digital currency, that could be made accessible in a protocol like

• 1:01:46Jeremy Allaire?

  HTTP. So you could have a protocol for dollars on the internet. And I believe that we could do that on these blockchain networks, which were super nascent at the time. And there's no legal framework for any of this. And it was like, you know, totally crazy. But we believed we could do it. And, you know, I think the belief was that, over time, these networks would become scalable, the infrastructure would work, we could come up with laws and regulations. And that once we achieved that, that basically, the storage and transmission of value would become like a commodity free service on the internet, and money velocity would explode. And then, in particular,

• 1:02:22Jeremy Allaire?

  I was really excited at the founding of this idea of programmable money and smart contracts, which was like ideas on napkins at the time. And that ultimately, not only would you just sort of have this explosive way to and low cost way to move value around, but actually the utility of money could increase dramatically. And that you could actually rebuild the financial system into a internet financial system, which is how we founded the company, Circle Internet Financial originally. And so, you know, we've just been pursuing that and now like it's actually happening. Like the infrastructure works, there's laws and regulations. We have these full reserve digital dollars that have like central banks and prudential regulators looking at them and the technology is sort of starting to kind of go into the background.

• 1:03:07Jeremy Allaire?

  It's no longer crypto, it's stable coins and it's digital currency. And so, and we've, you know, we've built, I think, right now, a really interesting business to bring that. And so that's sort of the origin of it. And so, kind of, it's been, you know, it's been a long road for sure.

• 1:03:24John Coogan?

  Congratulations. I have like 12 more questions.

• 1:03:26Jordi Hays?

  I know, we don't have, we don't have a ton of time. You know, I want to get into, you know, some of, kind of two angles, how you're thinking about partnerships on a go forward basis with institutions and partnerships with, you know, other large, you know, public companies, it seems. We saw Uber in the last 24 hours in the headline, talking about, you know, exploring stable coins.

• 1:03:47John Coogan?

  Payroll companies potentially.

• 1:03:48Jordi Hays?

  100%. And I feel like this gives every, you know, I, my last company was a fintech company. We enabled you, stablecoin investing with USDC. And so I've been a big, you know, believer for a long time, but you know, you guys being public now, the market reaction to it, it feels like it gives every single institution in the world permission to say, hey, let's adopt this technology in a meaningful way. And so it truly feels like you guys are on day, this is like day zero.

• 1:04:16Jeremy Allaire?

  Yeah, I mean, look, I think this is like a mainstream moment for the adoption of this technology. We're classically crossing the chasm, right? From early adopters to like mainstream acceptance, to technology usability, the laws and regulations. And, you know, having a publicly traded company like this, I think it really does matter to trust, transparency, compliance, governance, things that really matter when when other major companies want to figure out who to build with. But, you know, at the core of our business, our whole model is we're a market neutral infrastructure company. We're like a platform that people can build on top of. We have banks and neo-banks and payments companies and fintechs and exchanges, custodians, like every type of institution we work with already.

• 1:05:01Jeremy Allaire?

  And they face us as a market neutral platform. And that's really, really important. We're not competing for end users. We're not competing for businesses. We want to let other people build on top of both the kind of public utility that we put out on the internet, like our public protocols, and like the the kind of market infrastructure of the money issuance side of it. And so it's now, it's definitely getting to a point where, yeah, I think major public companies, commerce firms, internet firms, financial institutions of all types really can, you know, build on this now. It works. It's liquid. You can connect to it around the world. And we have the ability through innovations like CPN, our recent product that we launched,

• 1:05:42Jeremy Allaire?

  to abstract away from an end user perspective, a lot of the things that are, you know, tend to be barriers to entry and make it work compliantly as well. So it is a really, I think, significant moment. And I do think that, you know, lots of mainstream companies can now really feel like they can do this and there's a and there's a great platform company to work with.

• 1:06:05John Coogan?

  I'm wondering about other real world assets on change, programmable money. A lot of the conversation around, I want something that's low cost, high speed, programmable, and stable supply. That makes me think. Gold, stable gold coins, basically.

• 1:06:21Jeremy Allaire?

  Yeah.

• 1:06:22John Coogan?

  I'm sure you've gotten this question before, but why didn't the market evolve that way? Or even that original, like 1999 Peter Thiel talk about?

• 1:06:29Jeremy Allaire?

  Yeah.

• 1:06:30John Coogan?

  You're going to be able to transfer $1 worth of S and P 500.

• 1:06:33Jeremy Allaire?

  Right.

• 1:06:34John Coogan?

  To someone else. And there seems to be some demand for that type of stuff, but the market didn't just break that way. And so what's actually going on?

• 1:06:41Jeremy Allaire?

  Yeah. Well, I mean, look, I mean, the dollar itself has extraordinary network effects. Like 65% of trade is settled there.

• 1:06:47John Coogan?

  Sure.

• 1:06:48Jeremy Allaire?

  And frankly, like a huge, a huge driver in our business right now is demand for digital dollars around the world. People, households, firms want to hold these safe, full reserve digital dollar instruments that have the utility of the internet. It's like when people woke up and said, hey, I can use WhatsApp and I can communicate with others. I don't have to pay my carrier these SMS fees and it's over the top internet money. And so people have figured that out and, and people want dollars, even though there's a sell America trade or whatever you want to talk about, or there's a fiscal cliff or whatever it is, like all these things that are there. People still want a unit of account and they want the power of the internet as a medium of exchange. And, and relative to almost every other fiat currency, the dollar still remains super preferred.

• 1:07:32Jeremy Allaire?

  And so I think that's, that's certainly going to be the case for, for a while. And, and so I think that's there. But the programmability piece is the really exciting next step, right? What, you know, how can you intermediate financial arrangements, commercial arrangements, labor arrangements, arrangements between AI agents, like all of these things that can be machine mediated with provable code, you know, tamper resistant provable code on the internet, which is what smart contracts give us. We're just starting to see the unlocks there. And it's going to be an entrepreneur and developer driven phenomenon for sure.

• 1:08:06John Coogan?

  That's amazing. You, you mentioned AI agents. Ben Thompson was reacting to the MCP standard and the lack of a payments layer in there, at least in this version of the specification. Is there, is, do we need a V2? Is this?

• 1:08:22Jeremy Allaire?

  Well, you know, you know, it's, it's a great question. We're working with all kinds of teams on agentic payments and. I'll tell you, you know, we worked on a new, a new standard. Actually, it's reusing an old standard. We worked on it with Coinbase and a couple of others, which is X402, which is essentially an un- it was a, it was a protocol extension of HTTP, which was originally a protocol extension to support payments native to HTTP. And no one ever did anything with it.

• 1:08:49John Coogan?

  Yeah.

• 1:08:49Jeremy Allaire?

  And so it is essentially the payment request, like, feature of HTTP. So that's been reincarnated and where stablecoin is the payload. And so now you actually have built into HTTP an extension, which is a stablecoin payload. And so it's like literally designed for AI agents.

• 1:09:08John Coogan?

  Yeah.

• 1:09:08Jeremy Allaire?

  That need to basically, you know, handle these and, and it kind of abstracts away what chain you'd use underneath. And so it's, it's pretty cool and we're pushing it into our dev products, so is Coinbase and others. And so I think actually, like, that was part of like, you know, early on, Marc Andreessen complained.

• 1:09:25John Coogan?

  I was about to say.

• 1:09:26Jeremy Allaire?

  Yeah, I mean, that's a famous thing. Hey, we had this thing there, no one did anything with it. Well, now we have something to put in there. And now we have the demand, which is like machines that talk to each other. And so it's, it's interesting how a lot of these things kind of come together at the same time.

• 1:09:40John Coogan?

  Yeah. Do you have a view on that idea of micro payments on the web? It just feels like we have microtransactions that happen across APIs. They just get bundled and reconciled at the end of the month. There's still a ton of value in, in stablecoins. I'm not saying that like, oh, the narrative is bust because that might not be the end game. But we saw this with Bitcoin where people were saying, oh, there's four different ways that this could break, privacy, blah, blah, blah. It wound up in having a very strong narrative. It kind of narrowed down the focus, but it's still a wildly successful technology.

• 1:10:11Jeremy Allaire?

  Well, I mean, look, at a high level, right, we think about the TAM here as legal electronic money. And then narrowing that down a little bit, you have cash and non-interest bearing demand deposits, which globally is like $60 trillion of the money supply. And so if you can have a digital cash instrument that has the superpowers of the internet and, and the like, that can basically move and transact at almost no cost, there's an enormous amount to, to grow into. Now, the other part of the TAM is all of the different utilities that we have for storing it, moving it around. And those are being reconstituted on chain. And so you, you start to think about like, okay. You know, cross-border payments is one that we talk about a lot and we're seeing a lot happen there.

• 1:10:55Jeremy Allaire?

  The kind of point I like to make is like, when's the last time you sent a cross-border email? And sort of like, whoa, that doesn't make any sense.

• 1:11:01John Coogan?

  Yeah.

• 1:11:02Jeremy Allaire?

  We're like, we're entering that era with money, right? Where basically like stablecoin money, and that could be a business that's got a $10,000 payment to buy something from someone in Asia to, you know, get product in Latin America. It could be an investment, right? I want to make a $10,000 investment in a startup in, in, in emerging market or in the US. Or it could be, and as we see today, like the biggest electronic trading firms in the world are moving hundreds of millions of dollar transactions over blockchains using USDC to settle bilateral trades. The exact same transaction is being used to do, buy a 25% digital, a 25 cent digital object in a web three game. And it's the same, right?

• 1:11:45Jeremy Allaire?

  Just like if I send you an email with a picture of my breakfast and you send me an email with a CAA dossier, it's, it's, it's the same payload. It's whatever it is, 25 byte or, you know, byte of data or whatever, you know, it's the same thing. And so, you know, that's the cool thing about this, very, very scalable. And so you don't need like streaming payments or micropayments as like, uh, uh, like killer use case. You just need to be able to support all these different kinds of, of, of value exchange, just in an internet native architecture.

• 1:12:14John Coogan?

  Can you talk a little bit about the geopolitical environments internationally that are most receptive to stablecoin adoption? You could see demand for crypto products track or correlate with authoritarianism, but then you have the pushback of a lot of authoritarian countries might want to ban or restrict or make something illegal.

• 1:12:34Jeremy Allaire?

  Yeah.

• 1:12:35John Coogan?

  So, so will we see more, uh, count, almost counterintuitively, or like as a second order effect, will we see more stablecoin adoption, adoption in more democratic countries first?

• 1:12:44Jeremy Allaire?

  Yeah. Well, what's interesting is the, the demand for, for stablecoin money is very global. And, and we do see it, for example, in, in, in, um, countries where there's weak regimes or the banking system isn't as adequate, or there's not as, as effective access to dollar banking.

• 1:13:00John Coogan?

  Sure.

• 1:13:01Jeremy Allaire?

  And, and so that's a, that's a valuable thing for the people and businesses in those markets. But, but it is sort of this, again, this over the top phenomenon, like, you know, WhatsApp came over the top and like, all of a sudden everyone was a Facebook customer and then you're dealing with Facebook for. Whatever issues in your country or, you know, the Arab Springs were an example of like, hey, everybody could like share media with each other and like, whoa, we just lost control of things. And so I do think there are geopolitical dimensions to this. I think we're in the very

• 1:13:30Jordi Hays?

  But then you guys have partnerships in Japan that allow you to launch USDC there,

• 1:13:35Jeremy Allaire?

  We do, and that's our philosophy, right, is if a government is going to have rules around, you know, stable coins in their, in their society, you know, we want to make sure that, like, those rules are fair, obviously. And we want, you know, that, stable coins that are allowed to be used to be held to really high standards, right? High standards of trust and transparency and compliance and governance and things like that. So that's important. And what we're now seeing is in markets where stable coins have exploded, Korea, Brazil, Turkey, South Africa, Kenya, like, all of those governments are working on stable coin rules right now. And, you know, so I think it's, it's a, it's a space where that's intersecting.

• 1:14:16Jeremy Allaire?

  And, and so, you know, we've dealt with this in the history of the internet, right? It was, when the internet started, like, you needed a broadcast license to have a radio show in Italy, right? It was like, or there were national monopolies that were the only entities that could actually do radio shows in Italy. Well, now, here we are, right? So I think there are these kind of transformations in society, ultimately votes, you know, on what they want to adopt, but it is still a political economic negotiation. And monetary sovereignty is not something that the internet has really faced off against, you know, in a big way. But, you know, people talk about Bitcoin as doing that, like, as this non-sovereign store of

• 1:14:57Jeremy Allaire?

  value. But then when you have kind of exportable digital fiat, then it does become a slightly different issue.

• 1:15:04Jordi Hays?

  Can you talk quickly about the competitive dynamics on a go-forward basis? This IPO was massively successful. It seems like there are, right now, from my point of view, infinite excitement for Circle and USDC. That's obviously going to inspire a lot of different groups, whether it's early-stage startups to other institutions to compete. And I can imagine myself why you guys will continue to dominate, but I'd be curious to hear from you.

• 1:15:33Jeremy Allaire?

  I mean, look, I think the way we think about our business is that we've built a stablecoin network and it's an internet-scale platform and network utility. And we take very much like an internet platform mentality. We want to build open public infrastructure. We want developers to build on it. And developers build applications that integrate it to it, which adds utility, which then expands interoperability. And so you create these really great, classic developer flywheel effects. And that's what we've done. And we've done that with liquidity as well. Like, it's got to be available, the digital dollars, et cetera. So, this is a, you know, it's a business that has network effects.

• 1:16:09Jordi Hays?

  Yep.

• 1:16:10Jeremy Allaire?

  And those are, I think, strong network effects. And then, it's a business that, there are these very significant hurdles we've had to work on for 10 years to become licensed, to become regulated, to become supervised, to become trusted, to integrate into these different government regimes and the like. And that's a lot of work. And it's definitely work other people can do. So, I have no doubt that, given the TAMS that we're talking about, that there are going to be a lot of great, you know, companies. And what I've sort of said is, I think this is a winner-take-most, not a winner-take-all market.

• 1:16:43Jordi Hays?

  Yeah.

• 1:16:44Jeremy Allaire?

  And you sort of see that in the market structure a little bit today. And I expect that market structure to persist. And I think three to five years from now, within that, you know, set, that market structure, there's probably a couple of players that don't exist yet, but will exist and will be double-digit players, right? So, it's just hard to know exactly, you know, who that's going to be. But I think at the end of the day, like, we want to build things that are useful for end-users, for developers, for businesses, and provide that and keep innovating. We're a product-led company, a technology-led company, so we want to just keep doing that. And as long as we do that, I think we can continue to grow and thrive.

• 1:17:21Jordi Hays?

  Yeah, you guys are in an incredible position. Personally, John bought a car this week.

• 1:17:27Jordi Hays?

  And were the dealer able to accept stables, he probably, it would probably be getting delivered today.

• 1:17:34Jeremy Allaire?

  Spread the word.

• 1:17:35Jordi Hays?

  It'll be Monday, right?

• 1:17:36John Coogan?

  I've actually paid people internationally with stablecoins years ago. It was fantastic experience. It was in Argentina. I have one last question.

• 1:17:42Jeremy Allaire?

  Once you've had stables, you'll never go back, right? It's like, oh, wait, I can't believe this.

• 1:17:47John Coogan?

  Yeah, I have one last question, then we'll let you go. Sorry for going too long, but I want to understand the shape of your business. I'll give you some examples. There's the Silicon Valley muscle. There's the Washington DC muscle and there's the Wall Street muscle. And when I think about the Bitcoin project originally, it was almost entirely technology, no regulation, no financial work. The grayscale Bitcoin ETF was very little technology, almost all lobbying and regulation and Wall Street financial. Are you a perfect blend of all three? Is there some focus? Has it shifted over time? Are you out of the woods on the DC stuff and now it's just finance from here on out?

• 1:18:28Jeremy Allaire?

  Well, I mean, look, I mean, you know, the best way to look at a company is to look at its OpEx. And within its OpEx, you know, the largest piece of it is labor. And so when you look at the labor OpEx of Circle, like approximately 45% is product and engineering. So we are very technology driven and that is leadership from amazing, you know, engineering and product leaders, mostly out of Silicon Valley, mostly based in Silicon Valley. And so that's by far the biggest because we're operating this infrastructure and platforms and software and the like. And then the second biggest, which is maybe 20% is what I'll broadly call like our control functions.

• 1:19:08Jeremy Allaire?

  And so that's like risk, governance, compliance, you know, financial controls. Cause we're like this digital currency, you know, market infrastructure, right? So the control piece is really, really key. And then you have like, yes, we have a legal policy and regulatory team that is much larger than a tech company. And is expanding because we're now needing to work with and collaborate with governments all over the world. Yeah. So that part doesn't slow down. I think as this scales, like the work that we need to do with governments only increases. The control infrastructure, the product and engineering should kind of. Kind of chug along, but yeah, that's

• 1:19:51Jordi Hays?

  Yeah, I think about the compounding advantage of, yeah, you can compete with us, just, you know, get, hire a team that can interact with every government on earth.

• 1:20:01John Coogan?

  Make sure it's perfectly regulated and perfectly custody.

• 1:20:03Jeremy Allaire?

  Oh, you know what, though? I say this, which is like, you know, I've done the yeoman's work of like, legal bills for like a decade. And so like, you know, everyone gets to ride on top of all the legal and regulatory

• 1:20:15John Coogan?

  Yes, Satoshi had it so easy. He just had to write elegant algorithms. Satoshi had no legal bills. Well, thank you so much for coming on. Congratulations.

• 1:20:23Jordi Hays?

  I'm so excited for you and the team. Classic 10-year, 12-year overnight success.

• 1:20:27John Coogan?

  Love to see it. Have a great rest of your day. We'll talk to you later.

• 1:20:30Jeremy Allaire?

  Awesome. Thank you.

• 1:20:32Jordi Hays?

  Cheers, Jeremy. Come back on soon.

• 1:20:33John Coogan?

  We have Anastasios from LM Arena. We're going to get to the bottom of what the best LM is, what the best LLM is. Welcome to the stream, Anastasios. How are you doing?

• 1:20:43Speaker 02

  Pretty good. How are you?

• 1:20:45John Coogan?

  I'm great. Congratulations. You have news. Can you first introduce the company, the news and, and everything that's going on in your world?

• 1:20:54Speaker 02

  Sure. So LM Arena is an open platform for evaluating AI via human preference. What it is, is you can go to the website lmarena.ai and you can type in your prompt and what you'll see is responses from two anonymous LLMs.

• 1:21:11Speaker 02

  And the LLMs are, you know, some of the best. Gemini from Google and ChatGPT from OpenAI and Claude from Anthropic and they're sort of randomly sampled from a pool. And not only do you see the responses, but you can also battle them against one another to see which one sort of win for your vote. And then if you choose, you can vote for the one that won. And then we use that data in order to construct leaderboards. So we have a leaderboard of, you know, the performance overall, but also in subcategories like math, coding, instruction following, creative writing and so on.

• 1:21:41John Coogan?

  Yeah.

• 1:21:41Speaker 02

  And we sort of see it as like the people's voice on AI progress, right? Because you can go there, you can express your opinion. A lot of the tasks AI is doing is subjective. And by doing so, you can sort of guide the field.

• 1:21:51John Coogan?

  Yeah. So you raised money recently, is that correct?

• 1:21:54Speaker 02

  Yeah, we raised 100 million in a round that was, yeah, thank you so much.

• 1:22:01Speaker 02

  It just speaks to the strength of our community and our duty to continue to improve the product for them.

• 1:22:06John Coogan?

  Yeah, so what is the business model? Yeah, what is the business model? Because I think people might not be so familiar. There's a lot of benchmarks out there, but you're actually building a huge business around this.

• 1:22:17Speaker 02

  Absolutely. The business model is to help. You know, one of the biggest problems that we see with AI-driven software today is people just don't know how to build it reliably. They don't know how to pick the right model that to use for them. They don't know how to build like an agentic system with multiple subcomponents in such a way that they're going to be able to ensemble it together into a piece of software that's like reliable and performant. And it's hard even to define what these words mean because a lot of the job of AI is to interact with humans. And so when you're interacting with humans, you know, a lot of the responses that people give are subjective. So how do you make sure that you are using your models in a way that like ends up satisfying your users? Ends up making your product better and better. You know, we're hoping to be able to address that problem because we have such a big community.

• 1:23:01Speaker 02

  Millions of people come into the site and giving their preferences. And we have a whole competition landscape of all the different models against each other on all sorts of diverse tasks. Not just in tech, but also in, you know, medicine and real estate and school and so on.

• 1:23:13John Coogan?

  So talk to me about the death of traditional benchmarking and the rise of big model smell. Have you been able to quantify the unquantifiable yet?

• 1:23:22Speaker 02

  Sure. So I wouldn't really describe it as the death of traditional benchmarking. I would just say that benchmarking is entering a new age where there are different types of benchmarks that are needed. So what does a traditional benchmark do? Just zooming out. What you do is you say, hey, here's like a particular vertical that I want to evaluate. Let's say I want to evaluate image classification. Well, then I'm going to go collect a bunch of images. I'm going to classify them and then I'm going to basically give models a test. I mean, and grade them based on how well they do on like a held out set of classified images. So what is the problem with this in the current day and age? Well, these days, the way people are using AI is like so broad that you could never. Like annotate all of it with data sets.

• 1:24:07Speaker 02

  Like you could collect a data set. It's all it's going to evaluate that thing, but not everything. And you could collect 20 and that's going to, you know, evaluate 20 things. But really, there's like a million different things that you should be evaluating. And, you know, arguably, even every individual has their own point of view on like, you know, all these subjective tasks. And so that's why things like LLM Arena come in as sort of a different orthogonal signal. Yeah, maybe it's still useful to say, how was my model doing on image classification or multiple choice question answering. But maybe I also want to know, you know, whether people like this model, why they like this model, whether they're using it in the ways that I intended to be used, which and which parts of the space is it good and bad? And our perspective is those are the questions that we can answer by gathering a massive

• 1:24:50Speaker 02

  data set of human preferences and then going backward, basically inverting the problem and saying, let's mine that data for all the analytics that we can get so that we can tell you which model is best for you and for your use case. And that's where I think the power is in this sort of new age of benchmarks.

• 1:25:05Jordi Hays?

  What about humor? Can we expect any type of benchmarking from LLM Arena around just making the user laugh?

• 1:25:14Speaker 02

  That's a great idea. We should have a leaderboard for that.

• 1:25:17Jordi Hays?

  Because I think I think that's I think that that's like a potential trap that humanity can fall into is is LLMs get so good that you just refresh the button and laugh over and over and over and over and then and then, you know, all productivity is lost and it's just the laugh button, you know?

• 1:25:33Speaker 02

  Yeah, if you're if you're making people happy, you know, making people laugh, that's not a bad thing.

• 1:25:37Jordi Hays?

  Yeah.

• 1:25:38Speaker 02

  Sometimes I also scroll YouTube like looking at my favorite comedians and I think they're they provide me value.

• 1:25:43Jordi Hays?

  Totally.

• 1:25:44John Coogan?

  Yeah, I have I have a post here. I want I want your reaction to. I said, now that AI can beat every every intelligence test, we need new evals for the other human traits. Specifically, I'd like to quantify courage, fortitude, gallantry, mirth, equanimity, yearning, stout-heartedness, gravitas, panache. This would help me pick what LLM to use. How close are we to be able to being able to quantify courage in an LLM?

• 1:26:11Speaker 02

  I love that so much. We need your vision. Yeah, I don't know how close we are to courage. Maybe we need them to we need to up the stakes. We don't have to compete in the real arena where they have some risk. We have some chips on the table, you know?

• 1:26:22John Coogan?

  Yeah, yeah, our, our intern said, you could probably do this using control vectors. And I said, I don't want to put the courage mask over the Shoggoth. I want to understand the base level of courageousness for the Shoggoth as a whole. Is that still, so we went back and forth on that.

• 1:26:38Speaker 02

  We're getting, we're getting biblical here. I love it.

• 1:26:40John Coogan?

  Yeah.

• 1:26:41Jordi Hays?

  How, how, where are you guys going to be, you obviously raised a hundred million dollars. Where, where are you going to be investing? What are, what are kind of some things coming down the pipeline that, that you're excited about?

• 1:26:51Speaker 02

  Well, the majority of our effort these days is going towards taking the platform that we already have and making it a lot better for our community. Basically inviting more people in because as you can imagine, how does our platform work? Like people come to the platform, at this point millions, but we're hoping tens of millions or more of people will come to the platform and vote for the AIs they like best. And then we take those votes and turn them into a number, right? So what's the most important ingredient here is getting people into the platform and loving the platform to play with all these different AIs and like ranking them and toying with them and so on and so forth. And we want to build great product features for them so that they continue to, continue to love it and come. So just investing in elmarina.ai, that's like where we're really targeting a lot of our energy.

• 1:27:31John Coogan?

  We have Dylan Patel coming on next. He recently dropped the AI mandated heaven tier list. He's got OpenAI up at the top, followed by Anthropic, DeepSeek, Google, XAI down at B tier. Meta and Apple are struggling a little bit lower down in D tier and L tier. Does that track with you? What are you most excited about in the recent developments out of the foundation model labs? What, what, what, what do you think is underrated right now in, amongst the various foundation models?

• 1:28:05Speaker 02

  Well, I think in general, the thing that excites me most is that there's a lot of competition these days. And there's also a lot of new modalities that are coming out. So like, you know, all the time we're seeing that the models are improving, improving, improving, and the pace is not slowing down. These things are getting way, way better. And there's a lot of the most brilliant people in the world that are just here like in the crucible, developing like the best AI models. And then we're going beyond text, right? It's going from text to people are now doing audio and people are doing video. And I don't know, there was a, you know, a big video model release, you know, last week with BO3. That was huge.

• 1:28:42John Coogan?

  Are you already doing tests against the different video models? Because right now, I mean, I put the same prompt into Sora and VO3 and it wasn't even close at this point, obviously. The next iteration will be maybe more competitive, but it feels like we're kind of too early to do those types of evaluations where people would just immediately identify a VO3 video. But then there are some other labs out there like Runway that are doing cool stuff in video and maybe it's harder to tell than people think.

• 1:29:10Speaker 02

  So we have an initial cut of a video arena that we're going to continue improving that was built by some awesome graduate students at Berkeley. So we have that and we're going to continue building it. But I think one benefit of some of these strategies like arenas is that they can actually provide kind of a touchstone for the field to come together and say, hey, here's what we're going to try to improve, let's go. And then maybe it would motivate some labs to actually continue to like build better and better video models because they want to be winning the game.

• 1:29:49John Coogan?

  What has been your take on the Llama journey? There was some accusations of like benchmark hacking. A lot of people have been saying, well, it's like never bet against Zuck. He has a capital cannon and a huge incentive to stay in the game. And so we could be seeing some exciting things out of Meta in the coming weeks or even coming months. I mean, all this stuff moves so fast, the leaderboards are constantly shifting. What's your reaction been there?

• 1:30:19Speaker 02

  So I would just say that we should all be gunning for Meta. We should all be rooting for them because they are releasing open models. And so I think open models are really great for the ecosystem. So I think I and everyone else should want them to succeed. Now, there was a little bit of weirdness in the last release. I think it's okay. They have a big group of really talented people, they're going to move on. And the models they released, they're good, they're getting better. And I hope the trend continues for them.

• 1:30:52John Coogan?

  Yeah. How has the AI safety debate shifted recently? It feels like Meta almost could have had a little bit of an out by, you know, years in years past when a model wasn't performing up to standard. You could never really tell if the foundation labs were really worried about safety or they just didn't want to release the product yet. It was an easy kind of out. We didn't see them take that this time. We didn't see them say, hey, we're delaying because of safety concerns. Has that kind of melted away from the discourse in your community? Or do you think that there's a world where what you're building could be used to evaluate safety? Because there's so many different dimensions of safety now.

• 1:31:33Speaker 02

  I completely agree, and we definitely want to make safety a priority in evaluations. We have a red team arena now that, you know, has been out for a little while and it's still, you know, it's still a bit of a prototype, but we're going to keep working on it. And I think it's really critical. I don't know about like, you know, the initial question about, you know, whether or not that's used as an excuse or not. That's kind of, I don't know, that might be above my pay grade. I don't hear a lot of those internal conversations. But I certainly think that like, subjective evaluations are going to be important for safety.

• 1:32:02John Coogan?

  Jordy, anything else?

• 1:32:03Jordi Hays?

  No, this is great. I'm excited.

• 1:32:05John Coogan?

  Yeah, thanks so much for coming on.

• 1:32:06Jordi Hays?

  Congratulations on the milestone.

• 1:32:08Speaker 02

  Great to meet the two of you and keep in touch.

• 1:32:10Jordi Hays?

  Yeah, come back on again when you have news.

• 1:32:12Speaker 02

  See you guys later.

• 1:32:12Jordi Hays?

  Bye. Cheers.

• 1:32:14John Coogan?

  Really quickly, while we have our next-

• 1:32:15Jordi Hays?

  I feel like humanity has a duty to, everybody should be required, it should be forced. You gotta go on Ellen Arena daily, five minutes a day, every, every person on earth. What do you got, John?

• 1:32:28John Coogan?

  We got bezel. Getbezel.com. Your bezel concierge is available now to source you any watch on the planet. Seriously, any watch. And our next guest is here, Dylan Patel from Semi Analysis. We'll bring him in. Welcome to the show, Dylan. How you doing?

• 1:32:42Jordi Hays?

  Boom. What's going on?

• 1:32:45Dylan Patel?

  Dude, this live audience is fantastic.

• 1:32:47Jordi Hays?

  I mean-

• 1:32:48John Coogan?

  We actually do have a bit of a live audience. We have four people in the studio today, but we also have a soundboard going, a giant gong.

• 1:32:55Jordi Hays?

  Let's go.

• 1:32:56John Coogan?

  If you want to drop a big number.

• 1:32:57Jordi Hays?

  Yeah, if you have any big numbers to throw out, we'll hit this gong. Why don't you just hit it, John? Dylan's been on a generational run.

• 1:33:02John Coogan?

  Yeah, yeah. Just give us a big number.

• 1:33:04Jordi Hays?

  Hit it for Semi Analysis. There we go. We got the gong cam.

• 1:33:08John Coogan?

  The gong cam is so loud, I'm sorry.

• 1:33:12Jordi Hays?

  What's happening? How are you?

• 1:33:14John Coogan?

  Good to meet you.

• 1:33:17Dylan Patel?

  It's fantastic. I'm having a fantastic day.

• 1:33:20John Coogan?

  That's awesome. I really enjoyed your China Talk episode, the update to the AI lab tier list. I wanted to, I asked some folks about that. I have, I have some follow-up questions, so maybe that would be a good place to start. OpenAI, I mean, it sounds like they're, they're not backing down from bigger and bigger training runs. But can you give me a little bit more insight into what it means to do a big training run now? Because they're still pre-training, like the RL stuff is scaling up. Like, what is the shape of the next big run, if that's even the right term to use in this era?

• 1:33:57Dylan Patel?

  Yeah, so there's, there's efficiency gains on multiple layers, right? So, pre-training, you're not, you're not simply just going to scale it larger and larger as your only avenue of spending resources, but you are constantly getting efficiency gains, right? Something that lets your model be 10% more efficient to run or train,

• 1:34:17Dylan Patel?

  but, but involves changing the algorithm. So people are still doing pre-training constantly, but they're not, you know, OpenAI's Orion or GPT-4.5 was a run so large that they literally can't scale it up any larger until like end of this year, when Stargate starts being operational, right? They literally just don't have a cluster that's bigger. So, so it's primarily them evolving their model architecture, continuing to get efficiency gains, right? So, for example, GPT-4.1 was an efficiency gain over 4.0, and they're going to do another one of these sort of efficiency gains, step up in model size somewhat, but not as far as 4.5. So that's on the pre-training side, but all the eyes are on the reinforcement learning side, right? That's where they're doing all these crazy things or cool things, right?

• 1:35:01Dylan Patel?

  Whether it be, you know, 0.3 specifically for just regular reasoning, and 0.4 is coming out soon enough, or it's deep research, or it's multi-agent systems. There's tons of work they're doing, spending, training, compute on, on training larger and larger models in terms of more compute spent on RL, not necessarily model size, right? Because your model size is baked in at pre-training.

• 1:35:26John Coogan?

  Yeah. With Stargate coming online, is, like, is there really no other way around that? Like, I feel like AWS is really big, there's like other big clusters out there. Can they just not get access to those, or do they truly not exist? And will Stargate be like first of its kind?

• 1:35:43Dylan Patel?

  You know, I think it's funny that my little autistic obsession became the most political thing in the world, right? And so like, you know, you have, you have, you know, obviously US, China, now Middle East, like, there's all these geopolitics here. But of course, like, the politics are between the companies too, right? So there's the whole, like, OpenAI, Microsoft breakup, right? There's a reason Stargate is not in Wisconsin, right? Microsoft had a huge data center they're building in Wisconsin, that's where it was gonna be. But now Stargate is in, you know, Texas, and it's not being done by Microsoft, because OpenAI and Microsoft had all these politics, right? A lot of which were really well-reported, but a lot of which have been sort of silent. But, you know, and it's like, okay, well, is Amazon gonna give OpenAI compute? Absolutely not, right?

• 1:36:27Dylan Patel?

  Is like, Google gonna give OpenAI compute? No way, right? You know, it's like, it's like, there's companies getting bought by OpenAI, the deal hasn't even closed, and they're cutting, and Microsoft's cutting off access, right? You know, sort of with the whole windsurf thing. So it's like, you know, it's like, these things are so political, and little nerdy autistic boys don't know what to do with politics.

• 1:36:48John Coogan?

  Yeah, yeah. How much of that dynamic is driven by just like, true AGI pilling at the top level of the hyperscalers, versus just, this is potentially a multi-trillion dollar...

• 1:36:58Dylan Patel?

  Competitive, doggy dog.

• 1:36:59John Coogan?

  Yeah, this is potentially multi-trillion dollar outcome, and like, we need to have a player, we need to cut off a competitor. Is there a dynamic there?

• 1:37:06Dylan Patel?

  I mean, I don't think those things are mutually exclusive, right? Like, whether you're like, truly AGI-pilled, like, OpenAI-anthropic-type people, where, you know, you want it for the benefit of humanity, or you're like, you're like Andy Jassy, or like, like Sachin Adella, or, you know, whoever it is, right? You're, you're, you're, you know, whoever you are at the hyperscalers, you know, at the end of the day, it's, profit is AGI, right? If you have AGI, you hope you can profit off of it, right? The people at the labs would like, be like, "Well, I don't know if AGI would let us profit off of it." But, but in the meantime, as we're building towards AGI, that is a, you know, trillion-dollar, ten trillion-dollar, multi-trillion-dollar thing that you're, you have under your control.

• 1:37:47John Coogan?

  Yeah. Do you think we'll be able to tax the profits of AGI even if we can't reap them? Because I was looking at the Trump Elon breakup and I was wondering, what does this say about their AGI timelines? Because if you really-

• 1:37:59Jordi Hays?

  Yeah, the AGI-pilled lion does not concern himself with deficits.

• 1:38:02John Coogan?

  Yeah, if you believe AGI 2027 or AI 2027, like the budget deficit doesn't matter, right? Like, we're gonna be printing 20% GDP growth. We'll be able to pay back trillions of interest in just a couple of years.

• 1:38:16Dylan Patel?

  So I think it's, I think it's quite funny, you know, this, this OpenAI, I'm sorry, this Elon and Trump sort of drama. Like, you know who's, you know who's like sitting there like, yes, yes, it's Sam Altman is like, yes, let's go. Cause he's like, you know, like for a long time Elon was like, I'm not gonna allow OpenAI to become a nonprofit or become a for-profit, right? And he's suing them, right? And, and part of his like, I'm sure part of his calculus for like going all in on Trump and, you know, saying he loves him more than a man can love any other man, like, you know, you know, four months ago was like him thinking he could, you know, convince Trump and the IRS to not let them convert, right? Now, like, it's like very obvious, like, what's the impediment? Like, they're gonna get, gonna be able to convert to a for-profit.

• 1:39:01Jordi Hays?

  Well, at the same time, Trump was always a Stargate guy. He's a big Stargate guy. He announced the project, right?

• 1:39:06John Coogan?

  Is that just because he loves big things?

• 1:39:07Dylan Patel?

  Trump is a big number guy, right?

• 1:39:09John Coogan?

  Big number guy.

• 1:39:10Dylan Patel?

  You get the 100 billion and he's like, hell, yes.

• 1:39:13John Coogan?

  Hell, yeah.

• 1:39:14Dylan Patel?

  Cause this is, this is what it's about, right?

• 1:39:16John Coogan?

  Yeah. Wait, before we move on from the OpenAI, the next big run, how real is the narrative of like, they're going to pull ideas from DeepSeek? The, I think it was like FP8 was one of the innovations. There were a bunch of other innovations. Some of those were specific to the restrictions of chips, but it felt like some of them might be generalizable to just more efficient training runs. Are there real learnings for the American labs that aren't GPU poor or GPU restricted from DeepSeek?

• 1:39:44Dylan Patel?

  So I think, I think there's certain things that DeepSeek did that the rest of the industry had already done in terms of like the OpenAI's, right? FPA training was one of them, right? OpenAI's been doing FPA training since at least 2023, perhaps earlier, right? Now, on the flip side, there are certain things that like DeepSeek did that were a bit beyond what the labs had done, right? And so, one of those things is like how sparse a model is, right? You know, you have a mixture of experts model, you have, you have so many experts in the model, but you don't activate all of them for every forward pass of the user, right? And so, GPT-4 was 16 experts, two of them active, right? So that's a 1 to 8 ratio. GPT-4O ended up being like a 1 to 32 ratio, but DeepSeek actually went even further. They were 1 to 64.

• 1:40:29Dylan Patel?

  I wouldn't say that that's something that like the labs weren't planning to do, but definitely DeepSeek did leapfrog a little bit, right? Went a little bit further as far as like publicly available models. And I know, I know Google's models aren't as sparse as, as, as OpenAI's, right? And so, everyone is headed that direction, but DeepSeek definitely went a little bit further. So I think it's like, I think some of the more interesting stuff that DeepSeek did was around sort of like, you know, making it open what the reinforcement learning, verifiable reward paradigm is. Making it open how, how to do really efficient inference systems, right? These are the sort of things that I think DeepSeek did that a lot of people can learn from. And also, there, there, there are special attention mechanisms. There's some interesting work there.

• 1:41:13Dylan Patel?

  Even as far back as mid last year, when DeepSeek released a paper, everyone was like, wow, this DeepSeek company has really good research, right? So it's, I think, I think there's things people can learn, but also there's a lot that like the labs had already done. They just weren't like, maybe they didn't go as far, or they did it, but it wasn't like they were passing on all the cost savings to the user, right? Because they like to have margins.

• 1:41:32John Coogan?

  Yeah. How much of the DeepSeek narrative around like it happened because China banned high-frequency trading is real? And should we ban high-frequency trading in America if we want to pull AGI timelines forward?

• 1:41:47Dylan Patel?

  This is, this is great. I think like, like, some of the most cracked people I know at Anthropic and OpenAI are ex, like, quants, right?

• 1:41:57John Coogan?

  Yes.

• 1:41:57Dylan Patel?

  Like Anthropic's best performance engineer who like writes all of the like, like, you know, improves the performance of their, whether it's Trainium or TP or GPUs. He's, he's from Jane Street, right? And it's like, they, they like-

• 1:42:08John Coogan?

  They're missionaries. They're still mercenaries over in the high-frequency trading bucket. With a few laws, we could move those mercenaries over. I'm not saying we should do it. I'm just, I want to know your take.

• 1:42:21John Coogan?

  You there?

• 1:42:23Dylan Patel?

  Yeah, I think, I think, um, I think, I think that the, um, with, you know, with the mercenaries, right? It's like, well, the labs could just pay more money, right? And they did, right?

• 1:42:32John Coogan?

  Sure.

• 1:42:33Dylan Patel?

  They're luring over the people they want with these crazy salaries.

• 1:42:41John Coogan?

  I think we're kind of going back and forth on the, uh, can you hear us okay? We good?

• 1:42:47Dylan Patel?

  Yeah, I can hear you.

• 1:42:48John Coogan?

  Okay, perfect. Um, uh, let's, uh, maybe let's move on to Google.

• 1:42:55John Coogan?

  What was your reaction to, uh, the Google I/O news? And, um, and I mean, you put them in A tier. They have this incredible VO3 model. How much of that is due to the cornered resource of YouTube? Is that a durable advantage? We kind of saw the open web get scraped by every single LLM, uh, foundation model company. We saw all the code in GitHub kind of get exfiltrated one way or another. Is, is that something that is going to be a sustainable advantage for them, at least in video generation?

• 1:43:32Dylan Patel?

  So to some extent, it's like, everyone trains on YouTube, right? Like every company takes, makes you, takes YouTube and makes it into transcripts, trains on it, or even takes the videos and trains on it, right? Every video model company is ripping stuff from YouTube. Uh, this is like very well understood and known. But, you know, there's, there's limitations on how much you can steal from YouTube, right?

• 1:43:51John Coogan?

  Right.

• 1:43:51Dylan Patel?

  Uh, I think my favorite sort of clip of all time, one of my favorite clips of all time is like when someone's like, hey, Mira, did OpenAI train on YouTube? And she's just like,

• 1:44:00Dylan Patel?

  You know the beep, you know the beep.

• 1:44:02John Coogan?

  There's definitely some data that got out, but, but, but there's the scale of data. Like with YouTube, it feels like just if you were to tokenize it and then compare it to GitHub's tokens, like you're looking at orders of magnitude and that seems important in terms of just.

• 1:44:15Dylan Patel?

  Right, right. I don't think you can just rip all of YouTube like that, right? Like they have, they have protections against that, right? Sure, you can get engineer ways around like pulling some videos, but like YouTube gets 500 hours of video uploaded every, is it like every minute?

• 1:44:29John Coogan?

  It's like every second or something. It's insane. Yeah. And I mean, just the storage costs alone, like you would be able to see the storage center for the copied YouTube like from space.

• 1:44:38Jordi Hays?

  Well, speaking of scraping, I'm curious, so, so Reddit and Anthropic are in a lawsuit right now around Anthropic scraping Reddit. I was surprised that they didn't have a deal in place. Do you think there was, you know, meanwhile Gemini has a deal, OpenAI has a deal with Reddit. Do you have any insight into why Anthropic would, you know, not even make something happen when clearly it's sort of a valuable and important platform to, to train on?

• 1:45:06Dylan Patel?

  I mean, like, like the data is the vote, right? And if, if you can get away with using the, getting the data without paying for it, then you're going to do that, right? And I think like, you know, I don't know about the legalese, but like, isn't OpenAI's deal with Reddit like a hundred million dollars? Like a year or something insane?

• 1:45:25Jordi Hays?

  Yeah, Gemini is like 60.

• 1:45:26John Coogan?

  Yeah, they're like, they're both around a hundred million a year and that makes up about 20% of Reddit's overall revenue. But of course that revenue is super high margin.

• 1:45:35Jordi Hays?

  70 million, 70 million a year.

• 1:45:36John Coogan?

  Yeah, from, from both.

• 1:45:38Jordi Hays?

  Google is 60.

• 1:45:39John Coogan?

  Yeah, okay.

• 1:45:40Dylan Patel?

  Right. So, so like, if, if that's the case, like what is, what does that like lend you, right? Like 70 million dollars a year is, is a ton of either, you know, it's, it's like 70 researchers, right? Or it's like, it's like thousands of GPUs, right? So it's like, you know, which, would you rather, you know? Like YOLO and just not pay for the data. Uh, and now like Anthropic can probably just like, you know, fight it out in court for a couple of years before they finally pay Reddit, right? And it's like, and then are they gonna have to pay as much as Google and OpenAI? Well, that would like seem unfair, right? So like, they're kind of gonna get away with like, having not spent the money. So maybe that's a good, good sort of view. Obviously, there's also the view of like, well, it's not actually like stealing data because it's like training on it, you know, whatever.

• 1:46:24John Coogan?

  Yeah, yeah, yeah.

• 1:46:25Jordi Hays?

  Totally.

• 1:46:25John Coogan?

  Um, on XAI, you put them in B tier. Uh, there's a world where Elon being on the outs with Trump draws more scrutiny to some of his companies like Tesla and SpaceX. XAI feels like completely off of the political agenda in Washington. So maybe this is a bull case for XAI because they have, Elon has more time to focus on it if he's not spending less time in Washington. Uh, what's your view?

• 1:46:50Dylan Patel?

  I have a fun anecdote, right? So, uh, I have a buddy who works in like manufacturing optimization, uh, at Tesla of like specifically how they like press the steel parts and like, you know, make, make the body, right? Um, and he's like, dude, I haven't had a meeting with Elon in like nine months. I'm fucked, right? Like, I just like, what am I gonna do? Like, he's gonna come in. So, so the thing is like Elon's amazing because he comes in and he's like, why are you doing it this way?

• 1:47:15John Coogan?

  Yeah.

• 1:47:16Dylan Patel?

  Why? Why? Why? Do it this way. And then, and then you, you have to like either do it that way or come up with a really freaking good reason why not. And he's just such a first principles thinker. But now, but, but for like nine months, it was like, well, I'm gonna continue to drive down the path that I think is best.

• 1:47:30Jordi Hays?

  Yeah, ideally you want that rapid iteration, right? It's like, you want him to come and just like get angry at you every day instead of once every nine months. It's actually better.

• 1:47:38Dylan Patel?

  I mean, I mean, like, it depends, right? Like, maybe it's not every day, maybe it's not every week, but like, there is a level of like, he comes in, he resets all your priors and you like reset your roadmap, kind of.

• 1:47:48John Coogan?

  Yeah.

• 1:47:48Dylan Patel?

  Um, and, and like, the flip side is like, you know, for the, for the employees, it's like, well, I might now have to go back to working like 100 hours a week, whereas like when he was gone, I could work like 40 to 60, right? And it was great. Um, so, so, so I know Tesla definitely had a lot of neglect. Uh, I know Neuralink had a little bit. Um, XAI, uh, some, but XAI still had like quite a bit of interaction from Elon, but obviously that's just gonna grow more. Um, and so.

• 1:48:15Dylan Patel?

  I think it's probably a good thing that these companies have Elon coming back and devoting all his time and effort. The flip side is that XAI does have a government facing sales, as does Anthropic, as does OpenAI, and now XAI is going to lose out on those sort of government sales. But at the end of the day, government sales are pretty small relative to private industry.

• 1:48:38Jordi Hays?

  Where do you expect most of XAI's revenue to come from a year from today?

• 1:48:48Dylan Patel?

  That's a great question. I don't think it's consumer, right? Because probably most of their revenue today is Twitter subscription, right? I guess because XAI is X now, right?

• 1:48:59Jordi Hays?

  The categories that matter, it's consumer, developers, and then traditional enterprise. Right? And is there like...

• 1:49:08John Coogan?

  People don't seem to be plugging Grok into Cursor or Windsurf, and we haven't seen people then Grok. But it's just so early that maybe they could win in certain you need anti-woke receipt processing or something.

• 1:49:21Jordi Hays?

  Yeah, so at some point, there's going to need to be a lot of revenue on the XAI side. X, the everything app, can do a lot of work. Maybe they add payments and things like that. I'm curious if you think that the merger is actually net good for X, the social media platform, in the long run, because my concern is that it's actually X, the social side of the product, that will really suffer over the next few years. But I'm curious what your read is.

• 1:49:52Dylan Patel?

  I think it was clear before the acquisition that X had a lot of debt, and they didn't generate enough profit to pay it off. So their EBIT was bad, not EBIT, sorry, just their earnings, period. Obviously, before interest and taxes, it was fine, but they just had so much interest payments. And so that's why I think XAI acquired it. It is beneficial, right? XAI does get access to a data source that no one else has, and the fastest data source out there, right? X is way faster than any other data source out there. So I think that's hugely beneficial. But as we think about what is the highest value ways of organizing the world's information and acting upon them, and it's like, today,

• 1:50:36Dylan Patel?

  everyone's highest revenue thing is code, right? Cursor just hit 500 million ARR, right? Um, and, and you know, you know, all these other, Windsurf just got bought for this crazy amount of money, right?

• 1:50:47Jordi Hays?

  Anthropic is growing revenue.

• 1:50:49John Coogan?

  Even, even Copilot at GitHub, at, at Microsoft and GitHub, apparently is it doing 500 million a year in run rate?

• 1:50:55Dylan Patel?

  Yeah, but like, like code is like where all the money's being made today. Um, and the question is like, I think, I think all of the labs sort of like, at least OpenAI, Anthropic, uh, especially Anthropic, believe that like code agents, software agents is where the most money and most progress is going to be made over the next six months. Um, I think XAI also believes this to a large extent, but they also believe some other things, right? Um, but, but you know, I think, I think automating businesses and helping them become more efficient is going to be where most of the money is made, not consumer.

• 1:51:24John Coogan?

  Hmm. So yeah, I mean, I, I guess you kind of, I can maybe guess your answer, but do you think Anthropic needs a dance partner or any dance partners? Cause you could see them going out and getting Pinterest or Snapchat. I don't know if that would be valuable, but, uh, they're kind of the one L L M that doesn't have a huge consumer front door to their product. And maybe that doesn't matter on the revenue side, but maybe it matters on the data side.

• 1:51:50Dylan Patel?

  Yes, I think, um, I think they're just too AGI pilled to think consumer matters at all, right? Like they don't care about voice modality, right? Like they just don't think it matters. And it's like, voice matters a lot, right? Um, at least for like consumer applications, right? They don't, they don't care about like image generation, right? So it's like, do they need a, do they need a dance partner? Uh, there's a really good Mexican song called Asia by Baila Solo. Uh, and so like, I don't know if you know it, but it's like got a freaking trumpet and everything. It's such a good song. Uh, and it's like, no, they're gonna, they're gonna stay, they're gonna dance alone.

• 1:52:21John Coogan?

  They're gonna dance alone.

• 1:52:22Jordi Hays?

  Are you staying in the Elon verse? Are you worried that cheap robotic arms will take the jobs of humanoid robots?

• 1:52:30Dylan Patel?

  Uh, so, so I think like colloquially, like everyone just talks a lot about humanoids. Um, humanoid robotics, uh, but it's like, most of the applications that I think are automatable in the next two, three years do not require legs, right? Like if I go to a warehouse, if I go to a data center, if I go to a factory, the floor is a flat slab of concrete.

• 1:52:51John Coogan?

  Yep.

• 1:52:51Dylan Patel?

  Right? I do not need to spend all this weight and energy and power on legs when I could just throw wheels on it, dude. Like, come on. Uh, and so like, that's, that's like one side of it. And the other side is like, human manipulation. Um, it's, it's actually funny, like. AIs are gonna be way better at us than like software than they are gonna be at like just manipulating, right? Like picking things up, right? Like it's like, it's like eh eh eh, hands are freaking incredible and no, we we aren't even close to, you know, human level hands on um on on a physical basis, let alone the AI that we have in our brain that's eh you know, developed over thousands and millions of years versus, you know, the the sort of language capabilities which have only evolved over the last 5,000, right?

• 1:53:35Dylan Patel?

  Um, so I think, I think um, it's gonna be hard for humanoid robots to be like, take off immediately, but there's tons of applications where um you know, humanoid robots will still be able to do basic things, things that are um capable, like low low risk of getting it wrong, so you can try again. Uh, and then the other aspect is, you know, what about, what about like, I cut the cost of a humanoid robot in one tenth because I have wheels, and so I cut weight down dramatically and it's way more efficient. And instead of having fully formed hands, I just have like three gripper fingers, right? And that's all I need for like, you know, data center automation. I just gotta plug in things and take them out, right? Unscrewing things. Maybe my arm is just a screw and then the other one is like a three finger, right? And it's like, this is way, way cheaper and specialized to the task than a humanoid.

• 1:54:18Dylan Patel?

  Uh, not that I'm like against humanoids, but as far as like, you know, robot arms, yes, that's part of it, right? Like, a lot of tasks, it can be a stationary robot arm. Um, but the important thing to consider here is that literally all of this will be made in China. Uh, none of it will be made in America.

• 1:54:33John Coogan?

  Why is that?

• 1:54:34Dylan Patel?

  Uh, the supply chain for Chinese robotics is...

• 1:54:41John Coogan?

  Sounds very pro. We're very pro-America here.

• 1:54:45Jordi Hays?

  Yeah, the the the audience is very America-pilled.

• 1:54:49Dylan Patel?

  It's sad, but it's like, you know, the the supply chain here is like, China's, China makes more robots. Eh eh eh, you know, if you go back five years ago, China made as many robots as roughly Germany, uh, South Korea, Japan, and the US, right? Now China makes more robots than all of them combined, right? Um, and the cost that they do that at is way lower. And like, well, the Japanese companies argued that they're, that the Chinese robots are shit. Yeah, but like you speed run up like quality faster than you speed run down on cost. Uh, and like the same applies to like Germany, although Germany sold some of their best robotics companies to China and all the tech got transferred, but like, you know, it's like... We don't have the manufacturing supply chains to turn, you know, raw goods into motors

• 1:55:29Dylan Patel?

  or into actuators. And if we can, you know, or when we do, it's like it costs 10x as much. And so it's just like, it's impossible, at least in the, without like some huge industrial policy for the US to compete here.

• 1:55:43John Coogan?

  So, I mean, it seems like there's almost an analogy there to the semiconductor industry where China has been lagging there for decades, but has done a lot to at least catch up to the lagging edge. Are there any policies that, or investments or industrial policy that China did to at least stay in the game to the degree that they did, that we should be stealing from them and doing here for robots and manufacturing?

• 1:56:10Jordi Hays?

  10 five-year plans back to back.

• 1:56:12John Coogan?

  Yeah, we need 10 five-year plans.

• 1:56:14Dylan Patel?

  I think the funny thing is that when you look at industrial policy, the way China does it sometimes is more capitalistic than the way we do it. Now, obviously, like, you know, giving a bunch of money to an industry is not capitalistic, but the, like, the exact policy mechanism of the CHIPS Act versus what China does is like so much better, right? So like, China does like, oh, you just get like X subsidy for manufacturing a certain amount, right? Rather than like, oh, it's a company by company deal and this company gets this money for this plant, right? Or, or like, hey, we're just going to subsidize the land in general for this. Or, hey, if you build a fab that is 28 nanometer, you don't have taxes for 10 years, right? And so stuff like this is what China's done and that's had them like dramatically increase their semiconductor spend. You have things

• 1:56:59Dylan Patel?

  like the National Railway Company is now making power semiconductors, right? Because, because they make profit and they're like, well, if I make fabs, then I can blow all my profits from the railway in that and then all my, all my fab profits will just be profits without tax, right? And so now, one of their largest railway company is like the third largest power chip company in China and like top 10 in the world. And, and over the next few years, they're going to be top five, period, right? Across the whole world. And it's, I think like, things like this are like interesting industrial policy and probably we can get like the car companies, you know, and various, you know, like John Deere and like all these like.

• 1:57:40Dylan Patel?

  Automation, like these mechanized things to get them to get, start pushing into robotics, right? Cause like BYD is pushing into robotics and like, obviously everyone knows about Unitree, but like, you know, Xiaomi is making cars and getting into robotics, right? Like, all these companies are getting into robotics in China because of industrial policy. And, and they did the same with autos, right? EVs, they went into EVs because of industrial policy, or they went into semiconductors because of industrial policy. Like, America doesn't have that, right? Like, we just have, maybe, you know, we have the startups who are mostly just buying Chinese equipment and repackaging it and pretending like they make it here, like Figer. Or, you know, like

• 1:58:19Jordi Hays?

  Well, we also, we have, we have American VCs who put American flags in their offices. That's gotta count for something, you know?

• 1:58:25Dylan Patel?

  I mean, I'm not saying it's not noble, it's just like

• 1:58:28Jordi Hays?

  No, I'm just joking.

• 1:58:29John Coogan?

  On, on Unitree, what do you think the perception of Unitree is in China? Because if you're, if you're a believer in the wheels and the different actuators, it feels like they could be more like China's Boston Dynamics, where it's like, oh, a bunch of cool videos, but not a lot of actual applications. But the reaction in America to Unitree videos is, oh my God, there's this crazy wave coming. But, but maybe that's a misperception.

• 1:58:58Dylan Patel?

  I love that every video of them is just like, doing war things. Like, you really wanna scare the West?

• 1:59:04John Coogan?

  Totally.

• 1:59:05Dylan Patel?

  Why don't you just have it like petting bunnies? Like, you know, trust us, the Chinese robots are not dangerous.

• 1:59:10John Coogan?

  They should be doing that. Yeah, I was wondering, like, I, I fully expect that there will be one of those like North Korea style military marches with a hundred, like a hundred thousand humanoids, and it will just be terrifying, even if the capabilities aren't actually there for real warfighting, just the demonstration.

• 1:59:27Dylan Patel?

  Did you, did you, did you see the humanoid marathon in China?

• 1:59:31Jordi Hays?

  Yeah, yeah, yeah.

• 1:59:32Dylan Patel?

  But anyway, so to answer your question, right? Sure. Unitree, yes, we see the like the humanoids, the robot dogs, but they've actually released a robot dog, but with wheels. And so it's just like two, it's like sticks and it has wheels. And they're releasing a humanoid with wheels. Actually, they just showed it off at this conference in Singapore that one of the guys on my team was at. And so like they're coming with the mobile manipulators. But also you have to recognize like for the cost that they make in $10,000, Western companies making like $75,000 or $100,000, right? So like the quality of hardware they can make. So that's also like an important consideration. Yeah.

• 2:00:13Jordi Hays?

  You said, you said something earlier around all the, you know, the next value in models coming from automating businesses. Is the right framework for that agents? Is that how you, how, how someone should conceptualize it? Or is it an entirely new paradigm? That that's less about, you know, agent, human kind of collaboration and more so just like full autonomy?

• 2:00:36Dylan Patel?

  Yeah, I mean, I mean, the, the dream is always multi-agent systems, right? Many different agents working together and just doing the job. And then, but today, you know, the time horizon for human model interaction has been growing rapidly, right? Initially, it was like seconds, right? It's getting to minutes or if you use deep research, like 30 plus minutes, right? And, and, and this is going to start extending to many places like code. You know, if you use Claude code, you know, the, the time interaction is like minutes, not, not second, uh, not seconds. And so I think it's, it's, and it can even extend to tens of minutes. I think, I think these agent systems will, it'll be, it won't be like a hard like hit, right? Like everyone's expecting sort of like, oh, we have chatbots.

• 2:01:19Dylan Patel?

  Now I have agents, but really it's going to be like a blended curve of like, yeah, you know, like, just like the amount of interaction the human has with the system, it becomes less and less and less over time.

• 2:01:29John Coogan?

  Hmm.

• 2:01:30Jordi Hays?

  That's a good framework.

• 2:01:31John Coogan?

  Uh, sorry to move back to China, but Alibaba, Quen, um, what, uh, I, I mean, it seems like they're just pumping out like a million different open source models. What's the reaction been to the American research labs? Have we actually learned anything from that? Uh, we've had some folks on the show have been just generally excited to play with so many different research tools, but, um, but are they trying to commercialize that? And I guess my big question is like, what is the actual chat GPT of China right now? Like, what is the, what is the consumer front end?

• 2:02:06Dylan Patel?

  So, so on the, on the latter point, the consumer front end is, is, is DeepSeek offered through the clouds, right? So some of the cloud companies like Baidu, Tencent, et cetera, offer, uh, DeepSeek, uh, the model, but through their own platform rather than through DeepSeek's. Uh, and some of them will offer it through DeepSeek themselves directly. Uh, but the interesting thing to note here is that we sort of have a very big dichotomy here. Part of the reason DeepSeek costs so much less on inference than, you know, US models is because the speed of DeepSeek's models, right? And there's this curve, right? Of like, how, how fast does the model respond to you versus how many users you can batch together, right? So if I have like, and it's a system and I'm only serving one user, it's going to be screaming fast, right?

• 2:02:50Dylan Patel?

  But if I'm serving hundreds of users, each individual user is going to be slower. Now, the total collective number of tokens I'm generating is much higher, but this is interesting because when I use OpenAI, I get 100 tokens per second. I get 200 tokens per second, right? Same with Google, same with Anthropic, XAI, et cetera, right? Like you type the query and it goes like maybe twice as fast as you can read, so you can skim it, right? Uh, but if you do that to DeepSeek, it's like 20 tokens a second, right? And I can read faster than the model outputs. And that's a conscious decision because they're limited on compute on, hey, I want to serve as many users as possible. And so the chatbot style applications are actually very like bad. And that's why, that's why Chinese, uh, people tend to use like OpenRouter a lot to access like OpenAI and Anthropic models through, uh, in China, even though they're not supposed

• 2:03:35Dylan Patel?

  to, or, you know, accessing, you know, other companies. Models like through other methods. So like, I wouldn't say that there's truly a one consumer front, uh, front end rather than it's, it's that the, as soon as DeepSeek came out, the, the governments started pushing all the companies to o- offer DeepSeek. But there, there still isn't a good consumer, uh, experience, right? In China, Moonshot is probably the most, uh, popular one, uh, but their models aren't that good, right? So it's like, there, I don't think it's won out yet.

• 2:04:04John Coogan?

  Yeah. How much of an, how much of an issue is, uh, owning the application layer? If you're, uh, an, uh, an independent country that doesn't want to rely on American or Chinese foundation models? Like what we've seen with Mistral and LeChat. There's this world where you spend all this money to build this data center in your country. You spend all this money to train a model. Maybe you're not at the frontier, but you're, you're, you're close, you're in the game. But everyone just by default in your country just goes to chat.com. And so unless you're willing to ban ChatGPT and you're not going that far, like you haven't truly won in terms of deploying your model with your view on free speech into your populace.

• 2:04:44Dylan Patel?

  Yes, I think, I think that's, that's going to be challenging for, like, there, there are sovereign AI efforts in all these countries. But like you mentioned, right? Uh, LeChat is not like that successful in France. Um, you know, there, and, and this, and, and Mistral is the closest of any like sovereign AI besides China and the US. So like, you know, you're going to get all these models, but people are just going to use the consumer like, you know, it's like, am I going to use like, like, like Google's models are so popular in India? Or like perplexity is like ridiculously popular in Indonesia for some reason. Like, I don't know why, but like, uh, uh, these are just like frontier models instead of like from American companies rather than like, um, the, the domestic model that could, could be made. And so I don't expect any sovereign AI efforts. So, so, uh, that to like truly succeed on the model level.

• 2:05:29Dylan Patel?

  I do think that like, you know, sovereign AI can mean many things. It could mean I'm making a bunch of data centers. It could be mean, I'm making a big Neo cloud company. Or it could mean like, I'm going to make the full stack with the model. But at any point, if it doesn't get economical, you can always just like rent out, like most of the cost of the GPUs, you can just rent them out to someone else. Right? Uh, and then like try and recuperate your cost.

• 2:05:48John Coogan?

  But you can't really do that with a foundation model that you've trained that has like mediocre weights, right? So that is kind of.

• 2:05:53Dylan Patel?

  Right. It's like, it's like you just, you burned all this money and floss on something that's effectively useless because Meta's open source model and DeepSeek's open source model and Alibaba's open source models crush you.

• 2:06:03John Coogan?

  Yeah, yeah. Speaking of Meta, I'm try, I've been trying to work through what's going on there. There's obviously kind of the dust up around Lama four launches, but somebody asked me like, what is the bull case? And everyone always says like, oh, recruiting or, you know, some beneficial thing or benevolent thing. But I was wondering if there's a reasonable case to be made that if you try and just project out what Meta's LLM spend would have been on other vendors oh, in five years, it would have been so big that even if they're constantly on the lagging edge, they're still recouping the investment in training Lama just because they will be able to serve it internally.

• 2:06:45John Coogan?

  Is that a reasonable, like, like thesis? Or is there something else going on there? Like, what, what do you think of like the motivations and, and problems with that project?

• 2:06:55Dylan Patel?

  I mean, they have like internal Lama models too, that are trained on their internal code base that they can use internally, right? So that sort of stuff is like something they could just never get elsewhere. But I think it's, I think it's a multi-factor thing, right? Like, uh, the bull case is obviously a personalized AI assistant on my glasses. And that's just always on my head, always serving me up slop. But like.

• 2:07:16John Coogan?

  So truly waiting in the consumer use case, like, like.

• 2:07:19Dylan Patel?

  Right. Like truly.

• 2:07:19John Coogan?

  That's the real work star. Yeah.

• 2:07:21Dylan Patel?

  That's, that seems to be what Meta is actually going for. But as far as like, you know, today, they roll out WhatsApp, Instagram and Facebook models, uh, Meta Lama models to everyone. And they claim they have 500 million monthly active users, right? Which is a lot, right? Now imagine if they didn't offer that, right? Would people start, uh, using ChatGPT instead? And now they're out of that meta ecosystem and their screen time goes down and they get look at less ads. Or does like Apple Intelligence, uh, become more powerful and that people go to Apple Intelligence for their AI? Because that's the, that's the AI that's most accessible. Um, and now all of a sudden Meta, who already has been screwed by Apple multiple times on advertising is now getting screwed even harder because all of the like.

• 2:08:05Dylan Patel?

  Like more and more of the data keeps going to Apple and there's no way for Meta to get access to it. So it's like, there's an existential threat here too, right? Uh, and so I don't think, I think it's like prudent that Meta spends on these models. I'm also like a lot more bullish on Meta long-term than like most people are. People are like looking at Lama four as like a single point in time of like, wow, this really sucks.

• 2:08:25John Coogan?

  Yeah.

• 2:08:26Dylan Patel?

  Uh, but there's like two models there, right? There's like Maverick and there's Scout. Uh, one of them is really bad and one of them is pretty good, right?

• 2:08:32John Coogan?

  What about Behemoth? Isn't that another, they don't have a third?

• 2:08:35Dylan Patel?

  Rough name.

• 2:08:36Jordi Hays?

  Yeah, but they didn't release it.

• 2:08:36Dylan Patel?

  Rough name.

• 2:08:37John Coogan?

  Oh, they didn't release it?

• 2:08:38Dylan Patel?

  Uh, yeah.

• 2:08:38John Coogan?

  Yeah, yeah. It is a weird name because it's like very demonic and it's like you're unleashing this demon, but.

• 2:08:44Dylan Patel?

  Well, the funny thing is the architecture is super similar to GPT-4.

• 2:08:47John Coogan?

  Oh, really?

• 2:08:47Dylan Patel?

  But like, yeah, it's a, it's like extremely similar.

• 2:08:51John Coogan?

  It was just like a very funny naming scheme because like the behemoth is like the untamable beast. And like they couldn't tame it to get it out the door. And so like the name really mimics like what, what happened with that project, but, um. So, yeah, I mean, what are, are, are they gated by, uh, scale or they're, uh, I mean, the cap expense seems to be growing, but similarly to all the other hyperscalers, uh, is there anything that's unique about, uh, Meta over the next couple of years? That could kind of give them a compounding advantage there and, and allow them to kind of come from behind?

• 2:09:24Dylan Patel?

  I, I do think they are still spending less on Gen AI than other hyperscalers. Uh, note that like 60, 70% of their GPU spend is on recommendation systems and like standard business. And like nowadays, that means like creating Gen AI ads and those have more click through rate. Like that's the, that's the holy grail for the next six months for them. Um, so it's not like there, there's no Gen AI in there, but like, uh, a lot of it is on their classical business. Um, but generally like they are a player to be reckoned with, right? Like OpenAI has Stargate, uh, Meta has their Louisiana project. I don't know if there's a fancy name for it. Um, and like everyone, everyone has like their big projects. And so when we get to 26, 27, everyone's going to have these gigawatt scale data centers with, you know, uh, close to a million chips. Right?

• 2:10:08Dylan Patel?

  Um, and, and the game continues to fight on. I don't think that like, this is a temporary setback for Meta, but they continue to recruit. They continue to have, um, you know, good talent. Um, they'll be reorganized, right? Like without pain, you don't like get better, right? So this is, this is a learning experience for them.

• 2:10:24Jordi Hays?

  So on Meta and Scale, they partnered with Constellation on this sort of basically agreeing to purchase nuclear energy from Constellation for the next 20 years. What's your updated take on nuclear? We obviously have these new EOs to help support it, yet it still feels pretty far out, at least for bringing new energy online. How are you thinking about the category?

• 2:10:50Dylan Patel?

  Yeah, so like even like in general, building new nuclear reactors is still going to take a really long time. And if you're a believer in AI 27 or AI 2032, whatever the number is, that's too long of a time scale to matter, right? Like, you know, this is still in the deficits can be large as possible timeframe. I think with regards to like nuclear, that's the case for standard, you know, Gen 4 reactors. But when it comes to like SMRs, they didn't ease the most important regulation, right? Which is that like the concrete containment zone, you know, this containment zone for the SMRs still has to be like monumentally big, right? Even though it's like a much smaller, much safer thing.

• 2:11:34Dylan Patel?

  And so they didn't ease that regulation, so I'm not that bullish on SMRs yet either. And basically like, yes, you can sign these deals for nuclear power, but that's nuclear power that was already being used by residential. And now those residential or like industrial, whatever it was, just turns to gas. Or on the flip side, right? If you look in like Louisiana, Meta's data center uses gas, right? Or if you look at Stargate, it uses gas. Or if you look at Memphis, Tennessee XAI, it uses gas, right? Like, you know, you look at, you look at Amazon's Indiana facility, Project Rainer, it uses gas, right? Like, everyone just uses gas and like...

• 2:12:09John Coogan?

  Are the ESG commitments that the hyperscalers made in kind of the prior era, like informing any of like, are they acting as like handcuffs or shackles or like leg weights going into this next energy build out?

• 2:12:22Dylan Patel?

  So the funny thing is, some of them have backed off a little bit, like Meta and Microsoft have backed off some. But the other thing you can do is just like pretend like you're still green. And so what you do is you do this thing called a PPA, right, which is a power purchasing agreement. So you can set up like solar panels like 100 miles away and they'll generate power only during the day. But that power generated during the day is enough to cover the entire night of the data center as well. But the actual electrons being consumed are not from the solar panels, right? The solar panels are just selling it to the grid, but you purchased it and sold it to the grid. Whereas the power that you're buying from the grid is like coming from a gas plant. The actual electrons you're consuming are from there. So then you're pretending to be green because you have this solar PPA backing it up, or you have this wind PPA backing it up.

• 2:13:06Dylan Patel?

  But in terms of actual electrons being consumed and new plants being built, it's gas.

• 2:13:11John Coogan?

  Yeah.

• 2:13:11Dylan Patel?

  And so I think this has, their regulatory ESG stuff is like malleable enough that this is allowed.

• 2:13:18John Coogan?

  They're working through it. Um, let's talk about some of the other sci-fi concepts for energy generation. Uh, people are starting to talk about data centers in space. Uh, people are talking about data centers in the middle of the ocean with tidal energy. Basically go where the energy is basically free or you get something for free. Maybe you get cooling for free or land for free. Uh, is any of that relevant to what you've been focused on?

• 2:13:40Dylan Patel?

  Um, so Microsoft's tried putting a data center in the water before for cooling, right? Uh, and that didn't, that didn't work. Uh, and it's the same reason why space data centers won't work anytime soon.

• 2:13:51John Coogan?

  Okay.

• 2:13:52Dylan Patel?

  Um, and as far as tidal energy, tidal energy is like interesting. I think it could work, but like, you know, it's a bit of ways. Uh, the main thing on why data centers don't work, whether they're, you're sticking them underwater or you're sticking them on a barge in the middle of the ocean, or you're sticking them in space, is that GPUs are really, really unreliable, right? So we, we have, we've done a bunch of like testing of GPUs. Uh, we, we reviewed 40 different clouds, up to, you know, thousands of GPUs. In fact, in some cases, but hundreds usually, um, or, and, and many times, it was called ClusterMax, right, where we tested like 40 different clouds, including like Amazon, Google, et cetera. Everyone's GPUs are unreliable because they're inherently unreliable. And what happens when a GPU is unreliable? Sometimes it's as simple as... Oh, turn off the server, turn it back on, right?

• 2:14:37Dylan Patel?

  Sometimes it's unplug an optical fiber, you know, a transceiver and plug it back in, right? Um, sometimes it's like, take the GPU out of the socket, put it back in. This is like the vast majority of fixes. I don't know why you need to do this, but like, that's, that's how tech works, right? You unplug it, you plug it back in and, and, and like, you need people to do that, right? Um, yes, robots could potentially do it, but we're not there yet. Um, the space of a data center, like the physical size of it isn't that large, really. Um, and like, they're big in an individual basis, but like, they're not even covering like a basis point of American, uh, land, even in like a decade, right? It's like, they're very small. So, so like GPUs are really unreliable, which we've sort of proven with like cluster max. Um, and then the other aspect of space data centers that's really dumb is like, how does heat get removed, right?

• 2:15:22Dylan Patel?

  Heat gets removed because like, you have atoms contact the heat, they, you know, whatever's hot, they take the heat away and they're more excited as they leave, right? You're, you're taking cold stuff, you're making it hotter and you're sending it away, whether it's water or, um, air, right? But at the end of the day, you're radiating that heat, um, out of an evaporation tower or chillers or whatever into the general air around you, uh, on land. But in space, there's no medium for you to like, like, how many particles are hitting your spacecraft and carrying away heat? And also those particles that are hitting your spacecraft are generally quite excited anyways. Um, but there's just like very few of them. And so like, there's no way to radiate heat away and these things consume tons of power. So like, they're unreliable, they consume tons of power. Power is cheaper in space, right?

• 2:16:07Dylan Patel?

  Solar panels, you can, you can have them like constantly having sun, but like, it's like, you know, what about the fact that like, you gotta radiate the heat away? Uh, like people, people try and put like tiny little piece, uh, computer chips in space and satellites and they have a hard time cooling those, right? So it's, it's a, it's a problem that I don't think is like feasible, uh, something that's feasible in the next sort of, it within the deficit spending is okay timeframe.

• 2:16:31John Coogan?

  Hello, going back to that.

• 2:16:33Jordi Hays?

  Are you bullish at all?

• 2:16:34Dylan Patel?

  It's a really good joke.

• 2:16:37Jordi Hays?

  Are you bullish at all on new consumer hardware, you know, dedicated hardware for AI, you know, Johnny Ive joining Friend.com? You might be calling in from a Rabbit R1 and we don't even know. Are you excited at all about kind of a third device outside of the phone or the computer?

• 2:16:57Dylan Patel?

  Yeah, I think like the Johnny Ive, Sam Altman video is so cinematic. It's so good. I'm excited for the product simply because the video is so good, the quality of it. But like, like, I don't know, like there's, I've seen, I've seen this Apple device that has like a, it's, it's, it's basically an AirPod with a camera, right? And like that, that's pretty cool. Or like the AR glasses, right? With the cameras on them, like the Meta Ray-Bans. Or, you know, all the other iterations of that. I, I think that a new device is definitely coming. With how good AI is getting, it means that the form of human computer interface can change. And it can be more natural and more seamless, right?

• 2:17:42Dylan Patel?

  It's not going to be typing on a computer in front of a, on a desk. It's not going to be, you know, it's, you're still going to have that. You're still going to have your phone, right? But really, I think like this like hands-free compute device is coming and, and it's enabled by AI. Now will Meta win? Will Apple win? Will OpenAI and Johnny Ive win? Yeah, I like, I like Friend, the founder's really cool. Will they be a runner at all, right? Like, it's, it's, it's a hard space. But I think like, there's three companies that like seem to have a shot. And it's like Apple, Meta, and maybe OpenAI, Johnny Ive.

• 2:18:15John Coogan?

  Yeah.

• 2:18:15Jordi Hays?

  And Avi, of course.

• 2:18:16John Coogan?

  Yeah, and Avi coming from behind.

• 2:18:18Jordi Hays?

  The domain is just, we got to give it up for the domain.

• 2:18:20John Coogan?

  The domain is so good.

• 2:18:21Jordi Hays?

  Friend.com, you got to appreciate it.

• 2:18:23John Coogan?

  He spent a fortune, it's worth every penny. On Apple, you put them in L tier. If Warren Buffett can learn to love Apple at age 75, can we AGI pill Tim Cook at age 65? Or however old he is? Is it possible? What needs to change for Apple to become dominant? They have so many advantages. They have tons of line time at TSMC.

• 2:18:44Jordi Hays?

  They're dominant in humor. It's the AI that's made me laugh more than any other model.

• 2:18:47John Coogan?

  That's true. The tech summaries that go crazily wrong and hallucinate weird things. Very entertaining product. Seriously underrated as a consumer product. But what's your experience? Break down what's happening at Apple? What changes you predict? What changes you would recommend?

• 2:19:02Dylan Patel?

  So I think they're clearly not, you know, that AGI pill. They haven't spent a ton on data centers and things like that. Now, they do have like hundreds of megawatts going online in the next two years versus like the hyperscalers have gigawatts, right?

• 2:19:17John Coogan?

  Yeah.

• 2:19:17Dylan Patel?

  So it's like, you know, it's like, okay, they're still an order of magnitude off in like how much they, you know, want to boom. And then like the flip side is that Apple has started building an accelerator. They hired some of the best people from Google. They already had a good chip team anyways because their chips for their phones and their Macs were good. But it's like, it's like getting the talent they didn't have. They're partnering with certain companies and they're like, they hired some of the best people from Google, you know, including their like head of rack design, right? Like rack architecture. So it's, it's, Apple's definitely keeping far enough behind that at any point they could leap into action. But the challenge is always going to be like, how are you going to get people to join this company?

• 2:19:59Dylan Patel?

  And so this is sort of like my bull case for like, or not my bull case, but like a possible scenario for like thinking machines is that they just get acquired by Apple, right? Like because at some point, Apple will realize, oh God, we need talent. And it's like, there's no talent out there for us to hire. When we try and hire, they're like, no, screw this.

• 2:20:17Jordi Hays?

  And Tim, Tim barely makes 70, he doesn't even make 75 million. He makes 74.6 million, which is like a junior OpenAI researcher if they joined two years ago. So it's like, how can they compete?

• 2:20:27Dylan Patel?

  Dude, that's, that's OpenAI's janitor, bro.

• 2:20:29John Coogan?

  Yeah.

• 2:20:30Jordi Hays?

  Uh, is Lisa Su cooking? She acquired Bream earlier this week. Can you break down that acquisition? Was it exciting to you? What's going on over there?

• 2:20:43Dylan Patel?

  Yeah, so they actually acquired two companies.

• 2:20:46John Coogan?

  Okay.

• 2:20:46Dylan Patel?

  This week, they acquired Bream, which is more like a little VM compiler people. I think it's more of like an aqua hire. It's like 10 people or something like that, I think. It's not that crazy, but it's more commitment that they care about acquiring software talent.

• 2:21:01John Coogan?

  Yeah.

• 2:21:02Dylan Patel?

  And what's funny is when they acquire aqua hire a company, the people at that company are getting paid a fair salary, right? You know, like a very good salary, whereas like sometimes their hiring process, they don't pay people enough, which is why they don't always get the best talent, which is something that we've sort of mentioned. But yeah, yeah. So Bream is like an ML compiler and things like that. And then Untether is another one, which was like making an AI chip. And they aquihired them as well, mostly for the staff on the hardware side, I imagine. Because they just need to move faster to be able to release chips as fast as Nvidia's. Because Nvidia is just like clockwork spinning out new chips. They're trying to go to that yearly cadence and such, right? So I think Lisa Su is waking up to, you know, how important this opportunity is and that she needs to spend a lot more.

• 2:21:47Dylan Patel?

  But note, they're still spending a ton of money on buybacks when they could be spending. I mean, so is Nvidia, but like Nvidia is also making like, you know, godly amounts of money. AMD is making good money and then they could turn around and reinvest that, but they're not reinvesting as much as they should. I think, you know, these are good aqua hires, both Untether and Bream, which are like both aqua hires. They also bought like Not AI, right? A while ago. Not AI is where AMD is sort of like god of GPU AI software is. Anush, he came from there, like he's the king. And that acquisition was really good because they have like, again, like really good software talent that they were able to pick up. It's just, you know, we need them to move faster if we want to take them like, you know, super seriously.

• 2:22:32Dylan Patel?

  But the right direction.

• 2:22:34John Coogan?

  What was your read on the Nvidia earnings and kind of the lack of guidance around the training to inference switch over? Do you have a better idea of what's going on? It seemed like they had quoted a 40% number earlier. They didn't include a new number. But this seems like an important narrative, or maybe it's not around the actual workload shift. And then I want to know if that's like relevant to AMD at all. Is there an opportunity there?

• 2:22:59Dylan Patel?

  Yeah, so I think that Nvidia is gonna have a hard time knowing.

• 2:23:03John Coogan?

  Hmm. Oh, really?

• 2:23:05Dylan Patel?

  How much compute is going to inference versus training? It's actually just like hard for them to know.

• 2:23:09John Coogan?

  Sure.

• 2:23:09Dylan Patel?

  Right? They don't get to know what workload their customer's running. They can guess. They have the most data to guess, but like, they can guess.

• 2:23:15John Coogan?

  Would people not want to tell Nvidia? I feel like if you're buying, you know, a hundred million H200s, you might just be like, yeah, sure, I'll tell you what I'm doing with them right now. Like, no problem. I'll fill out your survey. Here's my NPS.

• 2:23:25Dylan Patel?

  I think, I think these companies are very secretive, right? Like, you know, people, like, OpenAI won't tell Nvidia what their model architecture is, even though if they just told them what their model architecture is, Nvidia could optimize their next generation chip to it way better, right? And so Nvidia just has to guess, right? And like, hope that they know what OpenAI is doing, but they don't, right? Like, they, they have a good idea, right? And so like, I think, I think that's one aspect of it. The other aspect is that the lines between training and inference are blurring, right? In the days of pre-training, your cluster would be training, training, training, and then you deploy in inference clusters. But now, with reinforcement learning with verifiable rewards, one interesting thing is that, you know, traffic is not usual, right? It's like, it oscillates.

• 2:24:07Dylan Patel?

  And actually, on the weekends, chat, chat GPT is used very little relative to weekdays. During work and school hours, chat GPT usage is huge. During night, it's not really, right? Except for when like Ghibli slop like is like trending. That's the only time you have like usage, you know, higher during non-peak hours, which is like work day, right? And so what's interesting is that these clusters have lower utilization, but now I can turn around and start using these clusters at night. For example, I can spin down a percentage of them, and I can turn them to reinforcement learning with verifiable rewards. I can generate a bunch of data, verify it, see if it's good or not, you know, whether it's math problems, coding, or some other reinforcement learning paradigm like computer use.

• 2:24:50Dylan Patel?

  I can do it, and then I can throw, I can, I can keep that data then. If I ever need to switch over to, back to inference, its usage is picking up, I was like, okay, stop, you know, no more of that. Here's, you know, put the normal model on there and start doing inference. And that can take like a minute or less, right? Like, so it's like. There is, there is a blurring of lines of what is training versus inference. And then, and then the other aspect is like, can AMD get in there, right? What's interesting is that, you know, AMD has generally taken this approach of like, hey, we're like 80% of the cost and we're the same performance, right? That's, that's sort of where MI300 sort of shakes out. Some scenarios it's higher, some scenarios it's lower, but we're like 80% of the cost.

• 2:25:32Dylan Patel?

  Now, when you look at this new generation of GPUs they're launching, I think next week, MI355, it's, it's two thirds of the cost of Nvidia's Blackwell. But performance wise, is it two thirds or is it, is it less, right? Or is it more, right? And so this is going to be a challenge, it's going to be, it's going to rely a lot on their software. Meta's really excited about it, but like, not too many other customers are. And so the question is like, can AMD get in there? They're targeting inference mostly, but Nvidia's moving the game really fast, right? They're coming up with these new software libraries that don't just like, it's not just CUDA, right? It's like, they're building the entire inference engine, right? And AMD can't plug into that, it's called Dynamo. So what Nvidia's doing around Dynamo is really locking AMD out from inference

• 2:26:16Dylan Patel?

  at the non-hyperscalers and labs. Because it just doesn't make sense for anyone else to try and replicate the software that Nvidia's giving away for free on Nvidia GPUs.

• 2:26:25Jordi Hays?

  What do you hope to see out of companies like Prime Intellect over the next one to two years? I, I believe you're an investor in Prime Intellect, is that correct? But, but, so, I'm sure a little bit conflicted, but, but yeah.

• 2:26:41Dylan Patel?

  Yeah, I mean, I invested in the seed, but like, to be clear, like, I'm pretty impartial, right? Like, we had this ClusterMax review and we didn't give them the best review, even though I invested in them personally, right? So it's like, you know, this is, I think, but I think what they're doing, I'm really excited about, right? AI is super centralized, right? And, and this is the only path I see forward, mostly for, is like that. AI continues to be more centralized, there's fewer and fewer players, they have more and more control over our data, over automation of the entire world's economy. You know, this is, this is potentially quite scary for someone who likes decentralized power systems and like capitalism and such, is that centralization begets, you know, tyranny. And not, not that I'm like being that dogmatic, but like- They're like, their technology is mostly a technology reason, right?

• 2:27:26Dylan Patel?

  They had cool demos around decentralized training. They've trained models in a decentralized way. They've done reinforcement learning with verifiable rewards now in a decentralized way. I'm very excited about the research they're doing there and they're open sourcing everything, right? Which is the cool thing, right? You could just go look at what they open source. You don't have to like, trust, you know, anything. It's like, they have some pretty good software. I'm hopeful that there's a path to all AI and power not just continually being centralized until we, you know, are like enslaved by the machine god.

• 2:27:57Jordi Hays?

  Except if, except if semi-analysis were to centralize it, I feel like, you know, that'd be an exception to the rule. People should be able to trust you, benevolent sort of dictator, world leader.

• 2:28:07Dylan Patel?

  I could, I could live in that world. Call me the Lee Kwan Yu of AI.

• 2:28:11John Coogan?

  Sure. I wanted to go more into the, those like Studio Ghibli moments. When, when people say-

• 2:28:18Jordi Hays?

  Quick, quick, fire off. Would you hire somebody with a Studio Ghibli profile picture? Is that a negative signal?

• 2:28:25Dylan Patel?

  In our Slack, someone has a Studio Ghibli profile.

• 2:28:28John Coogan?

  Okay.

• 2:28:29Jordi Hays?

  Okay.

• 2:28:29John Coogan?

  I like it.

• 2:28:30Dylan Patel?

  And his public, his public profiles are also Studio Ghibli.

• 2:28:34Jordi Hays?

  Okay. Wow.

• 2:28:34John Coogan?

  That's good.

• 2:28:35Jordi Hays?

  Wow.

• 2:28:35John Coogan?

  But you know, whenever there's like these big meme moments, like they, everyone says the GPUs are on fire. Obviously they're not literally on fire, but what is breaking? Because is it, is it that there's actually more unplugging and plugging it back in, in the data center? Like, like when, when we see Studio Ghibli go out and like, you know, the queries are clearly failing. What's, what is it, what do you think is happening internally? Is it just too much load? Because I feel like the chips are under incredible load during training, right? So like that, they're used full times, but, but why are we seeing so much failure during these like spikes? What's actually going on there?

• 2:29:12Dylan Patel?

  With training, we know what's happening, right? We're saying, hey, in this iteration, you're going to process this many tokens, you're going to update the weights, you're going to exchange them all. Okay, here's more data for you to train on, right? And you just keep iterating, you know, many, many times, you know, every 15 seconds or 30 seconds or 60 seconds, you update the weights and you do it again. And you know how much data you're sending. With inference, you know, you have these clusters and it's like, it's that curve again, right? If I just have one user, it happens really fast, great user experience. If I have tons and tons of users, happens really slow. And while I am serving more users and I'm getting more output, each individual's user experience is worse. But at some point, it gets so bad- That you either run out of memory, or hey, a GPU does break, now all of a sudden, you're dropping requests constantly, right?

• 2:29:55Dylan Patel?

  So not only does the user experience get bad because it goes from fast to super, super slow, right? Like, look at how fast Ghibli is processed now, right? It's a crazy fast compared to what it was initially.

• 2:30:04John Coogan?

  Yeah.

• 2:30:05Dylan Patel?

  But also, like, when something bad does happen, you can't just be like, oh, take all these requests, route them to this other GPUs, right? It's, oh, all these queries failed, right? Like, oh, like, I got, I got more requests than I'm able to handle, well, these users, I'm just not gonna let, I'm just not gonna start processing their requests. I'm gonna say, uh, sorry, it doesn't work, right? And so that's sort of, when the GPUs are on fire, that's what happens, right? Now, also, um, I think, I think it's mostly, it's mostly that dynamic of like, you add that incremental user and things break, or if something breaks, all those users now have their stuff broken.

• 2:30:39John Coogan?

  Well, thank you so much for coming on. Everyone in the audience should go to semianalysis.com if you're not already subscribed, and we would love to talk to you again. This was a fantastic conversation.

• 2:30:51Jordi Hays?

  Super fun.

• 2:30:52Dylan Patel?

  A million, a billion, a trillion, I wanna go.

• 2:30:54Jordi Hays?

  A billion. Hey, add a, add a, yeah, hit the size goal. Go, um, add a, add a new plan on semianalysis, uh, five million a year.

• 2:31:04John Coogan?

  Yeah.

• 2:31:05Jordi Hays?

  And, uh, we'll, we'll ask some of our VC buddies that just have a bit too much management.

• 2:31:09John Coogan?

  We will shame them into, oh, you're not on the pro plan yet?

• 2:31:11Jordi Hays?

  Yeah, yeah, yeah.

• 2:31:12John Coogan?

  The max here?

• 2:31:13Jordi Hays?

  The presidential, the presidential plan.

• 2:31:15John Coogan?

  You're on semianalysis ultra max? Wow, you must not be serious about artificial intelligence.

• 2:31:21Jordi Hays?

  Oh, you're not, you don't really invest in AI.

• 2:31:23John Coogan?

  Oh, you're not about the AI thing. You're, you're, you're more just like software.

• 2:31:26Dylan Patel?

  You're more of a tourist, I get it.

• 2:31:27John Coogan?

  Yeah, more of a tourist.

• 2:31:28Jordi Hays?

  Yeah, you're B2B SaaS guy.

• 2:31:30John Coogan?

  Yeah, it's cool, it's cool, it's great. I'm sure you make a good living. Sure you make a good living. But, anyway, this is fantastic.

• 2:31:36Dylan Patel?

  It's great having, thank you guys for having me on, it's super fun.

• 2:31:40John Coogan?

  We'll talk to you later.

• 2:31:41Jordi Hays?

  Talk soon.

• 2:31:42John Coogan?

  Bye. That was a lot of fun.

• 2:31:44Jordi Hays?

  All right, uh, you're gonna love this, John.

• 2:31:46John Coogan?

  Yes.

• 2:31:47Jordi Hays?

  I think you were too locked in. We're gonna have, um...

• 2:31:49John Coogan?

  Blake from Boom Supersonic.

• 2:31:50Jordi Hays?

  Blake, calling in at 2:15, 45 minutes to talk about the new EO.

• 2:31:53John Coogan?

  Oh, oh, is it political? You know I can't, I can't pay attention to politics when I'm talking to an AI person. You know, I just get too, too locked in. But that is fantastic news, very exciting. I see your post. Blake will be joining TBPN live at 2:15 PM PST to discuss the new Supersonic EO. Very excited to talk to him. And, uh, we have Dana Suttle from Greycroft coming in the studio. How are you doing, Dana? Good to see you.

• 2:32:17Speaker 06

  Hi. Great to see you too.

• 2:32:19Jordi Hays?

  What's going on?

• 2:32:20John Coogan?

  Thanks so much for joining. Very exciting times. The IPO window is squeaking open and it's opened more every day. We talked to the founder of Circle today. Very good showing. Would love to talk to you about that, what's going on in the markets, what you're investing in today, but would you mind introducing yourself for the audience members?

• 2:32:40Jordi Hays?

  For anybody that's been living under a rock.

• 2:32:42John Coogan?

  Yeah, living under a data center, as you like to say.

• 2:32:43Jordi Hays?

  Yeah.

• 2:32:45Speaker 06

  Yeah, Dana Suttl, co-founder and managing partner at Graycroft. Been a venture capitalist for a very long time. Started out in 1998 on Sand Hill Road. So, seen a few cycles. Yeah.

• 2:32:58John Coogan?

  What was the first, what was the first big deal that you kind of really, really tracked or invested in or followed? Like, were you, were you tracking, like?

• 2:33:07Jordi Hays?

  Yeah. What, what deal allowed you the right to be a VC for more than maybe four years? Because it's, you know, the first four years, it's kind of like, you know, fair game.

• 2:33:17John Coogan?

  You can make some bets, but eventually, you know, there needs to be some results.

• 2:33:22Speaker 06

  Yeah, it's a, it's a good question. So, you know, when I first started a venture, we were investing in all kinds of things, but more, you know, it was like networking equipment and semiconductors and storage and, you know, sort of that was building the, the last, you know, the, really the first generation of the internet. And so, some of the companies from that era were, are no longer exist. They're actually bought by much larger networking equipment, you know, companies, et cetera, but a similar dynamic, you know, where we would invest. I didn't, wasn't expecting this question, so I'm basing on the name of this company, but literally, it was like, you know, from, oh, Qterra. God, that's an optical equipment company. And it was, you know, in like 18 months, sold for $2 billion. Yeah.

• 2:34:07John Coogan?

  Wow. Wow.

• 2:34:10Jordi Hays?

  There we go. There we go.

• 2:34:11Speaker 06

  Just to be clear though, I was, you know, I was the number two on it.

• 2:34:15John Coogan?

  Of course, of course.

• 2:34:15Jordi Hays?

  Yeah.

• 2:34:16John Coogan?

  Yeah, but that's great. It is fascinating how much the networking equipment space has kind of come back into focus with the AI. But we talked to Kevin Weal over at OpenAI. He's on the board of Cisco now, right?

• 2:34:26Jordi Hays?

  Yeah.

• 2:34:26John Coogan?

  And, and so, and we've talked to another founder who is working on optical cabling in the network, in the data center, because as we scale these models, and so everything old is new again. But what is most new for you? What have you been focused on? What's been, what's been in the news in the last couple of weeks?

• 2:34:43Speaker 06

  Yeah, well, I mean, in terms of what's new and what we're investing in is certainly in all of the you know, sort of AI, everything from infrastructure up through applications. So that's not, nothing terribly surprising there. But it is interesting to really look back to the history, you know, sort of history of the internet and see how much things are repeating. Now, in terms of what's being built. The other thing that we do is we actually have a sustainability fund. And we've done that in partnership with some strategic partners. So Coca-Cola and eight of their largest bottlers globally. And what's been so interesting about that is we are, there's such a huge intersection essentially between AI and sustainability.

• 2:35:24Speaker 06

  People don't really think about it, but you know, if you look at energy consumption doubling by 2050. I mean, something's, something's got to give.

• 2:35:32John Coogan?

  It's all oil and gas right now.

• 2:35:35Speaker 06

  But I think that's where we see a lot of, a lot of opportunity, not just in renewables, but actually in like the, you know, software and hardware for sort of reimagining how all of that's consumed.

• 2:35:44John Coogan?

  Yeah, you imagine that all the hyperscalers are going to need to kind of reevaluate the ESG mandates. There's already a lot of companies in the space like Crusoe Energy started by flaring natural gas plants that were, there was wasted energy and there's obviously a ton of news in, in solar and nuclear and all, all sorts of stuff. The energy landscape has been fantastic. Would you mind taking us through the, the latest IPO experience? How was that? I'd love to hear that story, kind of from start to finish because it, we, like, there's so many VCs that have been in the game for a long time and not actually been through that process because the companies love staying private.

• 2:36:22Jordi Hays?

  Other reasons too.

• 2:36:26John Coogan?

  There's been a lot of pressure to stay private, right?

• 2:36:28Speaker 06

  Well, it's really interesting. I mean, I don't know, that's like a whole other tangent and I'm kind of obsessed with it because it is really interesting. If you look at, you know, the, what the public markets are today, which I think is really interesting. It's just really different and it's almost going back to. Potentially what it what it used to be, you know, where it was like smaller IPOs and it was actually, you know, access to growth opportunities to more retail investors. So, so anyway, but but our most recent IPO is a company called Mountain. And it's a pretty amazing story, incredible founder, serial entrepreneur, technical background. And really, you know, he essentially started the business. I mean, we invested actually in 2011. So this gives you a little bit of a sense of

• 2:37:13John Coogan?

  Overnight success.

• 2:37:14Speaker 06

  The journey and patience.

• 2:37:20John Coogan?

  We have a soundboard here.

• 2:37:23John Coogan?

  It's every founder we talked to. I mean, we talked to the Circle founder and it was the same thing. He's like, yeah, I've been doing this for a decade and you know, today's the focus.

• 2:37:30Speaker 06

  Well, it's funny to see Jeremy LaR, you know, talking about, I mean, I remember when he had a video search startup in the last, you know, generation. And so it's really interesting to see these, you know, things sort of come full circle. Incredible entrepreneur.

• 2:37:44John Coogan?

  No pun intended.

• 2:37:45Speaker 06

  Yes.

• 2:37:47John Coogan?

  But anyway, back to the story of Mountain.

• 2:37:48Speaker 06

  Back to the story of Mountain. So, so Mountain, Mark Douglas, you know, really, again, incredible founder. He had started one type of an ad tech business essentially back in sort of the display days. And when we first invested, just to give a sense, it was a $4 million Series B.

• 2:38:06Jordi Hays?

  Wow, no way.

• 2:38:08Speaker 06

  Think about like what that means today.

• 2:38:10John Coogan?

  Now it's like four billion.

• 2:38:12Jordi Hays?

  It's a series that's around for ants.

• 2:38:14John Coogan?

  It's around for ants, but you needed the capital and it worked.

• 2:38:18Speaker 06

  Yeah. And so, and really, you know, that market changed pretty dramatically when all of the regulation around cookies, et cetera, you know, happened. And Mark had the foresight to take what was 100 million plus dollar revenue business, super profitable, and essentially build an entirely new business, saw that connected television would be the next major ad platform. I mean, and again, seems very obvious now, but wasn't, definitely wasn't consensus at the time. And he essentially just built that out of cash flow from the old business, sunset that business, and built this one up to now the company that went public two weeks.

• 2:38:53John Coogan?

  We're talking to the founder of AG1 next. I'm interested to hear your take on celebrity partnership. There's so many different configurations, whether it's just the celebrity investing, just like any other investor, and then maybe they've add some value to co-founding the company, incubations. What is your view on the on the roles of celebrities or people that bring differentiated value add in the startup ecosystem?

• 2:39:19Speaker 06

  Well, I think what you just said is the key, which is differentiated value add. And, you know, in the case of Mountain, we did partner with Ryan Reynolds and his marketing agency. And, you know, and that was sort of a fortuitous connection. But, you know, it really just, I actually was introduced to Ryan and his team as they were sort of thinking about what to do with their agency. And it was just in this moment where I was like, wow, what you guys are trying to do in terms of really making ads that sort of, you know, move at the at the pace of culture. Like, I have the perfect platform for you. And, you know, really Mark and Ryan just sort of saw eye to eye on really how to build this business. But again, that was so really authentic to Ryan and his team.

• 2:40:04Speaker 06

  It's just like what they want to do. They want to make really cool ads that really resonate with people, not to just make ads, but really, you know, to sort of make them at the pace of culture. And Mountain is the perfect platform for that. And that's why I think it's worked so well. And we saw, literally, I mean, the crazy thing is when you think about, I think about celebrity or influencers being largely marketing. I mean, it's, and so if you sort of look for like a dollar for dollar replacement.

• 2:40:28John Coogan?

  Totally.

• 2:40:29Speaker 06

  Mountain's inbound leads went from like 2% to over 60%.

• 2:40:35John Coogan?

  Wow, that's crazy.

• 2:40:37Jordi Hays?

  Well, it's also interesting to think in a B2B business like Mountain, like somebody like Ryan Reynolds effectively acting as a sales rep and just like messaging a CEO and being like, hey, I'd love to set up a demo with you. And it's like that, just that impact alone in terms of bringing spend on the platform.

• 2:40:51John Coogan?

  I mean, we've been kind of joking about this. We talk about ourselves as like enterprise influencers, because all of our sponsors are basically B2B companies for the most part. And it's just like, it's kind of a new era, but it's working and Ryan's clearly carved out just a very unique position. He's not just somebody you just pay to show up for an ad. And there are celebrities that have built great businesses on that, but he's taking a very different tact.

• 2:41:13Jordi Hays?

  I'm curious, when you made the Mountain investment, was there any, was there people maybe in the investment committee or other investors that were friends that sort of were writing off TV at the time, digital was exploding? And now, you know, looking back, it's like TV advertising has exploded, it's continuing to grow, even in the US, I think in 20, sometime past 2030, it'll be well beyond, you know, $100 billion in spend just here in the United States. So TV advertising is clearly not going away, but I could imagine 10 years ago, a lot of, you know, a Facebook PM that became an investor would probably have written a memo that said like, this market is going to, you know, go away, or at least shrink.

• 2:41:58Speaker 06

  Yeah. And I would clarify, I mean, a couple of things. I think 10 years ago, for sure, I think TV advertising has changed. I mean, this is largely advertising on connected television, streaming television. So really, the distribution has fundamentally changed. But yeah, I mean, we actually had investments in some companies that, you know, like 15 years ago, that were actually, you know, improving the process for television ads. And we sold those businesses gratefully and made a profit on them. So, but, but, so when Mark proposed this, I think what was counterintuitive is all of those businesses were subscription. I mean, the idea was not to have ads in those streaming services, right?

• 2:42:40Jordi Hays?

  Yeah.

• 2:42:41Speaker 06

  And so what's happened in the last five years is now all of those streaming models have moved to where the majority of subscribers that are coming on, I mean, if you look at the public earnings from, you know, Netflix and, you know, Disney, et cetera, that the majority of new users are coming on to their ad platforms.

• 2:42:59John Coogan?

  Yeah.

• 2:43:00Jordi Hays?

  Yeah.

• 2:43:01John Coogan?

  Do you have, I mean, I'm sure, I'm sure, you know, investing and being in LA often, like, there's probably celebrities that come to you with like, hey, I want to get into venture. I want to have exposure one way or another. And there's so many different models. Do you have any, any recommendations for all the celebrities that are listening? For, for the, the best way to get, to get exposure to tech or, or just patterns to avoid? So that they don't get over their skis.

• 2:43:29Speaker 06

  Yeah, I mean, look, I think it's like anything, like whatever you're truly, really curious about and you really want to dig into. I mean, that's where you should spend your time, right? I mean, I, I think if you're just sort of dabbling, I mean, I guess if you want to have investments to sort of talk about because you think it's like just in the zeitgeist, then great, like invest in some funds, you know?

• 2:43:49John Coogan?

  Exactly. I was saying to say more, more so if she's just LP.

• 2:43:51Speaker 06

  Yeah.

• 2:43:52John Coogan?

  Either LP or like be deeply involved in the company. But yeah, exactly.

• 2:43:55Speaker 06

  Or if you just want to, you know, kind of learn about investing, like that's a great way to do it. I think if you want to actually be, you know, direct investing, angel investing, you know, I think actually, again, just sort of following like your true curiosity and the areas where we're also where you can really make an impact. And that's why I think like with, you know, again, going back to Ryan and his team, I mean, they're amazing marketers. I mean, like best in class. And so I think that's where, you know, I would just sort of like encourage any, any celebrity to do what they're truly passionate about. And I think if you, you know, look at where things have really worked outside of, you know, Ryan, I mean, I think, you know, what Gwyneth has done with Goop.

• 2:44:37Speaker 06

  I mean, I think it's just, these are just very natural to, I mean, there, there are things in Goop Kitchen, which is another, you know, sort of spin off from Goop. I mean, it's, it's the food side of it. And it's again, it's just what's so natural to her. It's what people expect her to be, you know, sort of recommending and excellent at, right?

• 2:44:54John Coogan?

  Yeah, yeah, yeah, totally.

• 2:44:56Jordi Hays?

  What about, what's your, how, what are your thoughts around the evolution of LA's ecosystem on a personal level? I think my last five LA county investments were in the gundo.

• 2:45:10Jordi Hays?

  And haven't done, haven't done much outside of that, but I'm curious, are you, are you disappointed? Are you accepting? Are you still excited? Do you, do you see a lot more growth here? It seems like San Francisco has certainly sucked a lot of the oxygen out of LA. If you want to be, I, I had one portfolio company that was, you know, a consumer AI business that

• 2:45:36John Coogan?

  Yep, I know the one.

• 2:45:37Jordi Hays?

  Was in LA and just like had to bail almost within two months, just because of the talent.

• 2:45:43John Coogan?

  A $350 billion company popping up in San Francisco will do that. But yeah, what is your, give us the temperature check on.

• 2:45:51Speaker 06

  Yeah. I mean, you know, look, I think there's no question. I think there's a sucking sound back to, to the Bay area. And, you know, again, it's sort of like early days of any major technological shift. You know, I think that's naturally going to happen. It's Silicon Valley. And so we actually opened an office up there for the first time last year. We've hired a new partner up there, team up there, and we're all spending a lot of time up there. I, I mean, for us, I mean, I love LA. I moved here. I did spend 10 years in Silicon Valley before moving here, but I moved here almost 20 years ago. I think LA is an incredible market and I think having access to this market and really having a deep understanding of a lot of the industries and network here is super valuable.

• 2:46:34Speaker 06

  But the talent density from a, you know, just technology standpoint right now, Silicon Valley is just a super important place to have a strong network. And so we're, you know, we're spending time both places. We've also, I mean, we are spending time also in, you know, the gundo and in other, and you know, on other things, which are certainly big growth areas in LA. We also led an investment that we think is super exciting called Whatnot, which is LA based company, you know, fastest growing, largest live streaming shopping, you know, platform in the United States. So. I mean, we think that there will always be great companies here and continue to be, but there's definitely a AI talent density in the Bay Area.

• 2:47:18John Coogan?

  I think we were talking to Gary Vee and he told us to put it on.

• 2:47:21Jordi Hays?

  Yeah, when whatnot exits, it'll be like LA's back. LA's back. And then people will be like, oh, I never lost faith.

• 2:47:26John Coogan?

  I never lost faith. Yeah, that's hilarious.

• 2:47:28Speaker 06

  Well, we had Scopely also last year.

• 2:47:30John Coogan?

  Yeah, Scopely was fantastic.

• 2:47:31Speaker 06

  That's a pretty, pretty, pretty great story and continue to have a good theme here.

• 2:47:35John Coogan?

  And Snapchat and Service Titan.

• 2:47:36Speaker 06

  Mountain is based here.

• 2:47:38John Coogan?

  SpaceX. Yeah, there's a couple. It's not the worst place in the country. But I think LA kind of surprises people when you dig into the numbers as opposed to, it's not as loud because Hollywood is the thing. It's the Hollywood town that happens to be above expectations in tech and hasn't made as much noise about it. Anyway, this has been fantastic. Thank you so much for hopping on.

• 2:48:02Jordi Hays?

  Yeah, super fun.

• 2:48:03John Coogan?

  Congratulations on the big win. We'll talk to you soon.

• 2:48:06Speaker 06

  Great to see you guys.

• 2:48:07Jordi Hays?

  Cheers. Have a good one.

• 2:48:08John Coogan?

  Any other breaking news that we need to cover in between our guests?

• 2:48:12Jordi Hays?

  No, let's bring.

• 2:48:13John Coogan?

  No, we're good. No politics? Yes, we're set back. Let's talk about AG1. Let's talk about consumer packaged goods. Let's bring in Kat from AG1. How are you doing, Kat? Good to see you. Welcome to the show.

• 2:48:27Jordi Hays?

  Boom, welcome.

• 2:48:29John Coogan?

  Jordi, I'm going to let you take the intro. Thank you so much for joining.

• 2:48:31Jordi Hays?

  Well, it's happening. How are you?

• 2:48:33Speaker 07

  I'm great. How are you guys?

• 2:48:35Jordi Hays?

  We're doing great. It's Friday. We wish it was Monday. We like podcasting a lot here, so the weekends are always tough. But how are you busy?

• 2:48:44Speaker 07

  I'm sorry for your wind down.

• 2:48:45Jordi Hays?

  I know, I know.

• 2:48:46Speaker 07

  Monday, open here soon enough.

• 2:48:46Jordi Hays?

  I know, I know. I'm sure you feel the same way. Why don't you give a quick intro, a brief history? We don't like to do, make this biography, but I'd love to have you kind of give your background for the audience.

• 2:49:01Speaker 07

  Sure. I'm Kat. I'm the CEO of AG1. I have spent several decades in consumer. I started opening franchises around the world when I was a teenager and had incredible opportunities in restaurants, food and beverage, and franchising for the first 20 years of my career. By the time I was in my early twenties-

• 2:49:25Jordi Hays?

  So teenager, teenager, got a backup. What were you doing as a teenager? You just sort of sprinkled that in there, but I'm sure it's a good story.

• 2:49:36Speaker 07

  Yeah, I started working at Hooters Restaurants as a hostess when I was 17, putting myself through school. I'm the oldest of three girls. We loved my dad when I was nine, helped raise my sisters. And so restaurants are a very common place for young folks who need to work to start to work. And I grew up in Florida and so-

• 2:49:55Jordi Hays?

  I used to pick, my first real job after soccer refereeing was picking up cigarette butts at a nightclub in the morning. I would get there at like 6:00 a.m. and that was, that was my job. So very familiar with the sort of restaurant grind and it certainly, it allows you to bring, it's easy to bring the sort of service culture mentality into startups when you're responding to like tickets online if you got your start in restaurants.

• 2:50:25Speaker 07

  Yeah, I mean, that closeness, right, that proximity to the transaction, to the customer experience, if you're paying attention, it never leaves your bones and your soul. And so I stayed in that industry for many years. I was with Hooters for 15 years, helped grow that business around the world, and then moved on to O'Rourke Capital, a really big private equity firm in restaurants and franchising, owned portfolio company called, at the time called Focus Brands. Took over Cinnabon when I was 30 years old as president to turn it around out of the Great Recession. And then built that business into a billion dollar global revenue business, then built a licensing CPG division out of that parent company and eventually ran Focus Brands, the parent company, a couple billion, eight brands, 80 countries.

• 2:51:09Speaker 07

  Uh, for four and a half years, so 10 years at Focus total. And all throughout that time, I was just becoming more passionate personally about nutrition and fitness. I had kids later in life, I'm 47, I have a five and seven year old, my mom had breast cancer when I had my second, my daughter, and so health became this personal obsession. And so while I was running these big mass market brands, some of them were sweet treats and fun for you, but some were better for you, Jamba, Mose, Schwarzkies, McAllisters. I wanted more, like more bleeding edge of health and nutrition. So I started angel investing in better for you businesses quietly on the side. That eventually coincided with when I left Focus after a 10 year career running those global franchise businesses.

• 2:51:54Speaker 07

  I was introduced to the founder of then called Athletic Greens, AG1. I had been a customer for a few years. And, you know, here we are. That was four years ago.

• 2:52:04Jordi Hays?

  Amazing. What was your personal process diligencing AG1, given that I'm sure, you know, you looked at hundreds of businesses around these sort of massive organizations. Well, I guess what were the qualities? Because I think if I remember correctly, the time you joined AG1 was when almost everybody was writing off direct to consumer as a category broadly. They just said it didn't work, the economics weren't there, you were giving all of your, you know.

• 2:52:30John Coogan?

  You would eventually have to pivot to retail and then completely change the business model. And you couldn't really get to scale.

• 2:52:35Speaker 07

  Yeah. There were a few things. One, I did similar diligence to some of our investors, which is we were customers. I was a customer for two years. And when you have a personal experience with a product and real passion, for me, it was energy, immunity, gut health support. It made a big difference for me as a, as a busy professional mom. So I was a bit of a fan girl of the product itself. But that's just one layer. The second was I actually advised the founder for. Half a year before I joined. And so, talk about diligence. I had the opportunity to get inside the business, get close, meet the team, understand product. And as every layer I lifted, what I learned was even better than I could have expected. And I had a bit of an ego moment where

• 2:53:19Speaker 07

  I'm like, oh, this company is so much smaller, you know, than the other ones that I've run is, is this really what's right and best for me, even though I love it? And very quickly, I got over that to this is actually a brilliant time to jump on a health and nutrition rocket ship that's better than anyone knows and has incredible upside. So after advising, I joined in November of 21.

• 2:53:41John Coogan?

  So what were the first challenges when you came in? It sounds like a lot of things were going right, but there's probably some area that you were focused on.

• 2:53:49Speaker 07

  Yeah, there, I mean, there was a ton going right on the outside. Everyone said, oh, you guys are crushing it. We did this fundraise, right? 120 billion, 120 million raised at a 1.3 billion post. It was still the end of the frothier era, like end of 21, beginning of 22. And the business had done 160 million that year in revenue and bootstrapped up to that point. So the founder was an incredible capital allocator, incredible subscription business, 90% subscription, growing at, you know, multiples, not percent. So that's what was good. That's what was great. Fresh round of capital, the only round of capital we've ever raised, and a lot of tailwind in the category and the industry and a clear leadership position. What was wrong is that we had scaled

• 2:54:34Speaker 07

  so quickly and we only had one manufacturing plant in New Zealand. So all of that green powder was being blended in New Zealand and most of our business had grown in the US. And so job one was scale the operations to support growth. I wanted to launch a few additional products sooner. I wanted to go into retail sooner, but we had no business doing anything new until we really built the infrastructure and that was expanding manufacturing to the US, which we did immediately to support the US business. So now New Zealand supports the rest of world, other.

• 2:55:15John Coogan?

  Yeah.

• 2:55:16Speaker 07

  Source, we own our source, source highest quality ingredients globally, then blend in those countries. And certainly that's helped us in the tariff volatility moment. And so that was job one. The second was then it was very clear pretty early on that even though there were, there were so much energy and tailwind and growth in the supplement category of wellness. And a lot of that was getting piped up and promoted on podcasts and with influencers and creators. And we were certainly a part of early, very early in that trend. We were fortunate that some of our early customers became thought leaders and had famous podcasts. Uh, but it was very clear that science was going to be a critical part of marketing for this category where it historically had not been.

• 2:56:00Speaker 07

  So a few years in first shore up operations. Second, actually pull back marketing a bit and reinvest millions into double and sometimes triple blind randomized placebo control clinical trials, which take years to build a PhD team, to scope the trials, to conduct, to analyze, et cetera. And so those were the first two things. Site operations, supply chain in particular, which includes like QA, maintain our NSC for sport, third party certifications, a lot of like high quality standard we needed to protect. As we moved manufacturing and expanded it, which was a little scary as we put our product in the hands of other blending facilities, but the team did it beautifully. And then make massive industry leading investments that would take an annoying amount of time

• 2:56:45Speaker 07

  to be completed and pay off. And then use those two things as the foundation. Once we got them in place to then innovate. So we wrapped up last year 600 million in annual revenue, one product, one channel.

• 2:57:01Speaker 07

  Yes.

• 2:57:05John Coogan?

  That's amazing.

• 2:57:06Jordi Hays?

  Crazy.

• 2:57:07John Coogan?

  Congratulations.

• 2:57:08Jordi Hays?

  Yeah, the scale is just wild.

• 2:57:10Speaker 07

  Let the gun have its waves.

• 2:57:12Jordi Hays?

  Yes.

• 2:57:13Speaker 07

  Yes, we deserve it. Our customers deserve it.

• 2:57:16John Coogan?

  That's fantastic.

• 2:57:17Speaker 07

  But it is time, and it was time a year ago, to make some thoughtful, large, focused moves outside of that single product, single channel model. So just this last week, we announced a direct-to-national partnership with Costco. So we are now a multi-channel company, went straight from no retailers to in all of the largest.

• 2:57:42Jordi Hays?

  I don't think, I don't think people realize how significant winning in Costco is because I've, I'm an investor in a company that expects Costco, like in the first, I think, 18 months to do, add 50 million revenue to the business. It's like extremely significant. It could easily be into the nine figures. And so it's, it's great if you can just go from, you know, one channel to adding retail as like this individual, you know, channel that you can really focus on.

• 2:58:14John Coogan?

  If you're running a small CPG company, our recommendation is just, just go into Costco.

• 2:58:17Jordi Hays?

  And win in Costco.

• 2:58:18John Coogan?

  Just win in Costco. It's easy.

• 2:58:19Jordi Hays?

  It's that easy.

• 2:58:21John Coogan?

  For anyone out there with like a $2 million CPG business.

• 2:58:23Jordi Hays?

  I'm curious like how much, I'm curious if you think like most of the issues in D2C and consumer brands broadly are just operational? Because like when I think of the best.

• 2:58:36John Coogan?

  Versus structural.

• 2:58:37Jordi Hays?

  When I think of, yeah, versus structural, where it's like, hey, you have a good product, it'd be a good brand, and you're just, or a brand that could be good.

• 2:58:45John Coogan?

  Yeah.

• 2:58:46Jordi Hays?

  And it's just a lack of pure leadership abilities internally. Cause like, we're very close with the Ridge Wallet team, and that's a business that like shouldn't be a multi hundred million dollar revenue business, right? It was, the original product was a,

• 2:59:01John Coogan?

  This should be podcasting.

• 2:59:03Jordi Hays?

  In the early days, the LTV was like, the LTV was like the first, the value of the first order, the first purchase, right? And so you would think, there's no way this business could really scale or be massive. And they have against, against the odds. But I'm curious, as you look at other D2C businesses, how often are you thinking, this could be great, but it's just not, like, it's actually just like a operational lack, effectively?

• 2:59:32Speaker 07

  You know, it's interesting in D to C is I I've seen both ends of the spectrum where something is actually demonstrating outsized growth, but there's not a lot of there, there underneath, and it's a window of time before they hit their cackwall.

• 2:59:44Jeremy Allaire?

  Yep.

• 2:59:44Speaker 07

  And they end up having a lot of unit economic challenges. And it doesn't mean retail will solve those challenges in particular. And then you see others that have beautiful products, incredible retention, but just haven't mastered the art of e-commerce marketing. And so for for us at least, early on, I I think people gave us way too much credit for being amazing D to C marketers. We were not. We had a phenomenal product that it didn't matter what type of marketing we use to have people learn about it. Right? Any marketing is just awareness and trial. What keeps people ordering months and years? I've got over 500 customers that have been with us for a decade.

• 3:00:28Jeremy Allaire?

  Wow.

• 3:00:28Speaker 07

  A decade. They've been drinking AG1. That is not because a podcaster told them something. It's not because of a billboard or sponsoring a sports team. It's their experience. And so I don't think we can remove consistent quality and that compounding resulting both growth from those customers individually, but we call it the referral quotient. Our number one driver of customer acquisition, our post-purchase survey, how did you hear about us? How did you first hear about us, friends and family? Number one, by a mile, bigger than podcasts, bigger than bigger than influencers, bigger than television. We're full funnel. We're pretty well distributed from our marketing strategy. I was just listening to you guys talk to Dana. She's amazing and our portfolio is phenomenal.

• 3:01:10Speaker 07

  And, you know, whether it's television or community and activations, it's all a part of our approach. But D to C really has to have that incredible experience to have its chance. I mean, we were rewarded for our focus, right? Pretty unusual to get to 600 million with a single product.

• 3:01:28Jeremy Allaire?

  Yeah.

• 3:01:28Speaker 07

  And we weren't even on Amazon. This is just drink AG1.com. And that's unusual. Um, and, and I do think that might be part of a, a challenge for some D to C businesses is if they don't get traction or they're not seeing that retention or the LTV they want, then they go wide, like SKUs and offerings and you get distracted. But if you can focus and really differentiate, then that, that traction is there and the unit economics perform to the best that they can as the algorithms change and as the structure of, to your point of structure of digital marketing changes. On the other side, retail, yes, it's a revenue channel, but it's brutal and your product is in the hands of someone else and, uh, but it is marketing, right?

• 3:02:12Speaker 07

  It is eyeball, the shelf is a billboard. And so if you can do it well, I believe it is synergistic with D to C, not the, uh, maybe predicted or feared cannibalization that some might think going into retail. I'm glad we didn't go in early. This is our time. This is the right time for us, uh, but we have an unusual business and that people stick with, uh, with AG1 for so long.

• 3:02:37John Coogan?

  Yeah. Uh, do you have a reaction to the news, uh, this week or last week that Nike is going back on Amazon, sort of a pivot away from their direct to consumer strategy?

• 3:02:48Jordi Hays?

  Yeah, I think Nike got a little too inspired by you guys.

• 3:02:51John Coogan?

  I think they might have been trying to copy you guys. They saw you putting up phenomenal numbers.

• 3:02:55Speaker 07

  They're like, AG1 was the last holdout. They're the last holdout. If they're there, all bets are off.

• 3:03:00John Coogan?

  Yeah, exactly.

• 3:03:00Speaker 07

  Welcome back Nike.

• 3:03:02John Coogan?

  Yeah.

• 3:03:02Jordi Hays?

  No, they, they, they seriously said, we're, we're pulling, you know, we're not going to do Amazon. We're going to focus on our own Nike.com and direct response marketing. And that's the other thing you guys have blended. You guys do, I'm sure the vast majority of your budgets around direct response, but when you came on board, suddenly the AG1 brand was aspirational.

• 3:03:24John Coogan?

  Totally.

• 3:03:24Jordi Hays?

  It was like, you know, cool. And it was leveled up. It felt like almost like fashion.

• 3:03:28John Coogan?

  And that's been a critical part of the Nike brand is putting the celebrities front and making the athletes the heroes. And that kind of fell by the wayside during the direct response era. Hopefully they're getting back to it. People were talking about Caitlin Clark has, is signed with Nike, but most people don't even know it because the particular shoe that she wears is like a limited release. And so they've gone this like very odd strategy. So just general lessons from Nike or reactions to the relationship with Amazon there?

• 3:03:52Speaker 07

  I mean, look, it's similar to us and may we be in Nike one day. What a phenomenal brand. But they've had their bumps as all scaled companies do. And we, several years ago, as part of that pullback and that lower funnel marketing and investment in human clinical trials to raise the standard in research, we also moved the marketing spend we protected to more upper funnel, right? Building brand, brought an incredible CMO recently, former CMO of Yeti, is a creative genius and really deeply believes in community. He always says niche to be mass, like go to your people, be deep, be there for them. And we have a lot more ground game happening now. And so that investment in full funnel marketing, you get a greater return

• 3:04:37Speaker 07

  if you're in workplaces, including the world's largest e-commerce retailer being Amazon. So for us, and I know this was a part of Nike and even some other brands calculus and either going off or never being on, for us, there was so much tailwind in organic search and growth. We didn't need to be there to grow the way we grew and we could barely keep up with the growth that we had. It got to a point where three things changed for us, and I can't speak for Nike, but I'm assuming this is a piece of the pie. One, there was a growth of counterfeits and resellers. And to protect our brand at scale, and you know, this isn't a shoe. It's something people put in their bodies. That's a safety issue. That's a brand issue. So when part of our thinking of getting

• 3:05:22Speaker 07

  back on was seeing the programs that Amazon in particular, transparency and others that they put in place to take down either those fraudulent products, people infringing on IP, or you know, unauthorized resellers, that was critical for us. We would not have come back on in the way that we did as in as big of a way if those programs were not in place for this category in particular. It's about quality. We added, we had to add holograms to our box with randomized unique numbers on all of our packaging. We did this pre-Amazon because the, you know, it wasn't just Amazon, all the marketplaces. There were, I'm talking real counterfeits, like weird typos

• 3:06:05Speaker 07

  and Grinch green powder, dark green powder, getting caught by customs. And imagine getting a phone call from your general counsel and she's like, We just got a call from the feds.

• 3:06:17Speaker 07

  Something that says N S E for sport.

• 3:06:20Jordi Hays?

  And you're being you're being a very, you know, like a politician about this. But when I talk to portfolio companies in the supplement space about Amazon, it is just their number one, one of their biggest pain points and just a massive source of frustration around counterfeiting, around, you know, all this sort of issues that you're

• 3:06:42Speaker 07

  When we got back on, it was gone.

• 3:06:44Jordi Hays?

  Yeah.

• 3:06:45Speaker 07

  And now we're meaningfully scaled business, right? So they've they really, this is not being diplomatic. I had a ton of risk to my brand and it is now gone on that platform. That's those are the facts. The other issue was that because the resellers were there, even if it was real product being resold, I couldn't tell you how old it was, the shelf life, the stability. So I still had a quality concern, but the as big of an issue for e commerce marketing was it was driving my ratings into the ground. So our brand ratings on Amazon were awful. And so if you would search AG1 on Google, you'd get these great ratings from our site or other sources and then Amazon, who stars, three star? I mean, it's horrific.

• 3:07:30Speaker 07

  And so as soon as we got back on, resellers are gone, counterfeits are gone. We have a limited product assortment there so we can be there meaningfully, but keep D to C is the place for expansive SKUs. Ratings went through the roof because customers are having a better experience. So it's search, it's about search and discovery as well for us.

• 3:07:49Jordi Hays?

  Where is your team getting the most leverage from AI? There was news this week from Meta talking about wanting to be, you know, basically help advertisers actually generate ads.

• 3:08:01John Coogan?

  Dylan Patel was talking about that.

• 3:08:02Jordi Hays?

  And in general, you know, when you talk to brands, like the number one thing, holding back their growth oftentimes and efficiency is creative. So it's very exciting.

• 3:08:12John Coogan?

  We're finally there with V O three where it's not, it's at least a drop in replacement for some B roll or stock footage that you might pull off a shelf. So yeah, that's a fascinating question.

• 3:08:21Speaker 07

  It's, God, the technology's unbelievable. It's unreal. Um, for us, the first place AI showed up in the business is our customer service and customer happiness. We partnered with, uh, with Sierra. We were very early with them and, um, I have no affiliation with them otherwise being a happy customer. And, uh, they partnered with us to craft what we needed and what we got out of efficiencies, we redeployed into human resources for concierge programs, for loyalty programs, which we were actually very late to develop as a subscription business. So I used, there was a, there was a financial benefit. There was a speed benefit for like, we learned that 50% of our customer inquiries were things, we already knew this, we just didn't have the solve that Sierra helped us with.

• 3:09:06Speaker 07

  Um, 50% were just manage my account, you know, like that, that stuff can be, that's prime for AI. So for us, AI was first there. Then we have tools that our team or supply chain team have brought in on, um, transparency and tracing for ingredient sourcing, since we own our sourcing. And so it's really helped us track and monitor and enable all, because we have pretty rare, high standard specifications of our ingredients and have unusual levels of testing of ingredients. And so to manage that through the supply chain has been very manual. And so AI has helped us there. Then to your point, marketing, um, we have some interesting thoughts on AI.

• 3:09:46Speaker 07

  We are using it for, as you said, digital background, digital B-roll, anything that isn't supposed to be real product and real human, because the supplement space has both good actors and not, we are holding ourselves to a standard of if we're putting a person on camera or if we're showing our product, right or wrong, it's going to be real. And but everything around it, the enablement, the editing, we are bringing every AI tool we can to make that more creative um, and more efficient.

• 3:10:20John Coogan?

  Yeah, we were talking to a food photographer earlier today who was very nervous about artificial intelligence and AI image generation, but was hoping that some of the rules around the way food is photographed from the FCC.

• 3:10:33Jordi Hays?

  Basically marketed.

• 3:10:34John Coogan?

  Yeah, marketed because you've seen those famous pictures of like, here's the burger. I wouldn't say the name of the company that does it, but you know, here's the, here's the photo and here's the actual burger and they don't look anything alike. And you can imagine that being a big, a big issue, even if AI can be used in the, in the post-process, there's probably still value to showing the customer exactly what they're, what they're actually getting.

• 3:10:55Jordi Hays?

  Last question from my side for now. Do you think that, do you think that people should be significantly more concerned with the supplements that they choose to put in their bodies? I, there's this, obviously in the Silicon Valley, the tech world, people will take any supplement if it's like, hey, this is going to make you 1% more focused today. They're like, I will buy this from some sketchy website and, and take it today. And, and you know, you keep coming back to this sort of like traceability testing, you know.

• 3:11:27John Coogan?

  We've seen this with the creatine dummies.

• 3:11:29Jordi Hays?

  Yeah, well, that's an issue too, but there's often.

• 3:11:31John Coogan?

  There's no creatine in it.

• 3:11:32Jordi Hays?

  But I mean, if you test supplements, it's like, yeah, you could be supplementing lead and not knowing it, you know? And so I think that not every supplement company has the same standards. And I don't think people fully appreciate the potential consequences of that today.

• 3:11:47Speaker 07

  Yeah, I, you know, the, the very fast answer is yes, people should be incredibly discerning while there are truly so many companies doing the good work. Third-party certifications, publishing certificates of analysis like us on their site, all kinds of third-party labs. It, there still are so many who, whether intentionally or not.

• 3:12:11Speaker 07

  On in the in the mildest form of of the issue, what is on the label is not what's in the product, right? So you think you're supplementing with X amount of this ingredient, and whether it degrades because of the shelf life and they are blissfully unaware, or their manufacturer pulled one over on them and they are unaware, I would say you're responsible in those cases if you're going to sell a product. That that could be happening. And in that case, it's just in it. You're not getting what you pay for. On the other side, to your point, there could be ingredients that you don't want or don't know are in there. And so what I would encourage people to do, whether they're in Silicon Valley or anywhere, is recognize this is a huge industry and where there is growth, there

• 3:12:52Speaker 07

  will be both good and bad actors. And the great news is there are ways to know who and what to trust. You got to look for third party certifications. And don't just take the words that someone types, third party certified. What third party?

• 3:13:06Jordi Hays?

  Yeah.

• 3:13:06Speaker 07

  NSF for Sport is the gold standard. They're incredibly expensive and a pain in our asses. Because if I change one thing in this formula, it has to go back through their process through shelf life testing to prove what's on the label is what is in that bag.

• 3:13:20Jordi Hays?

  Yeah, you actually have to go, you have to really verify too. I helped start a company in the water filtration space. And we went through the full NSF certification process. It costs hundreds of thousands of dollars. And then we have competitors that will put the NSF badge all over their website. And they're like actively getting sued by the NSF or in legal battles, but they just keep it up because it increases conversion rate. But if you go below the surface, it's like there's just nothing.

• 3:13:46Speaker 07

  That's right. I think the other piece to for for people to think about too, is this is unfortunate. Another layer of confusion is you also then have people doing what you just described, starting their own labs. And then they are testing product with some unknown methodology and then creating viral content around whatever they find. And that just makes it harder for the customer to know. So I would just say, this is not and anything you put in your body should not just be a listen to someone and click and buy and put it in your body. Go to the website. Look at the ingredients section. Look at the research section. Do those supplement companies have any research on human beings?

• 3:14:26Speaker 07

  At all. And I mean, you can imagine, you know, because you've got investments in the industry, having four double-blind randomized placebo-controlled clinical trials with over 100 people proving the same outcomes of supporting gut health, 10x gut bacteria, beneficial gut bacteria, covering nutrient gaps in four different populations. That's not cheap. And but we have to, right? We're the leader. We don't make claims. We can't substantiate. I could have done two studies and that's enough to say clinically backed. We did four. We're just, we have to lead because there is so much to be questioned with those in the middle. And I will offer, if anyone is starting a supplement business, and if they genuinely want to know how to do

• 3:15:10Speaker 07

  this right, I will help them. My team will help them. It is bad for the industry for people who don't take this stuff seriously.

• 3:15:17John Coogan?

  That's amazing. Well, thank you so much for hopping on. This was fantastic. Congratulations on the massive revenue numbers, all the progress. A classic overnight success. We love to see it.

• 3:15:27Jordi Hays?

  Yep. Come back on next time you have news. This is super fun.

• 3:15:30Speaker 07

  Love to. Thank you guys. Great to see you.

• 3:15:33Jordi Hays?

  See ya.

• 3:15:33John Coogan?

  We are shifting gears over to the supersonic world. We have Blake Scholl from Boom Supersonic. Is the speed limit lifted? Are we post-speed limit? I want to go 2,000 miles an hour tomorrow.

• 3:15:48Jordi Hays?

  Smiling.

• 3:15:49John Coogan?

  He's smiling. Something must be good happening.

• 3:15:51Jordi Hays?

  What happened today? We've been live for the last few hours, so.

• 3:15:54John Coogan?

  We got a text message. We got to have you on.

• 3:15:56Blake Scholl?

  Yeah, nothing, nothing, nothing big. We just actually, we actually broke the sound barrier today permanently because the super sonic band is reversed.

• 3:16:04John Coogan?

  No way. That's amazing.

• 3:16:06Jordi Hays?

  John's gonna hit the, John's gonna hit the gong.

• 3:16:11Jordi Hays?

  That's for you, Blake.

• 3:16:13John Coogan?

  Congratulations. We've been hoping for this for a long time.

• 3:16:18Blake Scholl?

  So the rules are going to change and you can go supersonic as fast as you want so long as the sound is a gong.

• 3:16:23John Coogan?

  Yep. Oh, that's great. I would happily let gongs ring upon the fields of America from sea to shining sea. I'd love to see it. I mean, I know this news is breaking, but how did you find out about this? Was there expectation that this was going to happen? Who are the folks who have been working on this? And then break down what actually happened?

• 3:16:47Blake Scholl?

  Yeah, well, I mean, it started since people have been working on this for decades, you know, since 1973, when it first went into place. And we've been working on it very intensely since February 10th, which is when we announced we could do, we could fly a supersonic without an audible boom.

• 3:17:02John Coogan?

  Yep.

• 3:17:03Blake Scholl?

  I think it was that, that night I left LA where our test flights were and went to DC. And by the way, it was horrible flight, much better supersonic. It was like, like left at 11pm, got it at like 4:30am. It's awful. It should totally be supersonic. And then by the time I landed, I had an invitation to the West Wing. So, um, the, uh, so we, you know, since then, uh, what we did, what to me felt like a very long, frustratingly slow campaign, but what everybody tells me in DC is actually supersonic. So, a bipartisan bill dropped, uh, three weeks ago in the House and the Senate, um, called the Supersonic Aviation Modernization Act, which by the way, I think we should still pass because

• 3:17:48Blake Scholl?

  that locks in all of today's goodness. Um, and, uh, you know, and we just sort of continued to educate people on that. By the way, we don't have to have the boom anymore. Uh, by the way, not all booms are created equal. Not all are bad. And, uh, that's something a lot of people can get excited about.

• 3:18:03John Coogan?

  So I, I mean, I know a lot of the technologies about, uh, flying at very specific speeds at specific altitudes, doing all the math to make sure that the boom bounces back into the atmosphere or something like that. Uh, what kind of speeds does that actually work at? What, what are we, what, what are we expecting? Because supersonic goes well past, it goes basically infinite, right?

• 3:18:24Blake Scholl?

  Right, yeah, exactly. So there are two ways you can kind of tackle sonic boom. And like, one is what you're just describing, make it go away entirely by making it make a U-turn and go up to space. And the great thing about that is that there's nothing to argue about whether it's too loud. The less great thing is it only works up to about Mach 1.3.

• 3:18:45John Coogan?

  Okay.

• 3:18:45Blake Scholl?

  It can go about 50% faster, but you can't go 100% faster or 200% faster.

• 3:18:51John Coogan?

  Put that in terms of like a commercial airliner, if you're like, I fly at like 500, 600 miles an hour, you're talking about like 700, 800 maybe?

• 3:18:58Blake Scholl?

  Yeah, well, let's talk about in terms of flight times. So with a 50% speed up, which is what's achievable routinely, you can leave New York at 9:00 AM and be in San Francisco at 9:30 AM. So it's a three and a half hour flight.

• 3:19:11John Coogan?

  Okay, wow.

• 3:19:12Blake Scholl?

  Which is like, that's a W, right?

• 3:19:14John Coogan?

  Yeah.

• 3:19:15Blake Scholl?

  Now, you know, if you want to go higher than that, faster than that, you have to convince yourself that some way or other the boom is not a problem.

• 3:19:22John Coogan?

  Yeah, okay.

• 3:19:23Blake Scholl?

  And I don't think, people don't agree about the answer to that. You know, I want to get out there, fly the airplane, I want to hear some real booms. I've heard a bunch of booms in Mojave, by the way, when we were doing our test flights, booms are commonplace down in the Mojave Desert, military mix them all the time. And there's some that kind of get your attention, you're like, wow, we probably shouldn't do that, at least not at nighttime. That would be, at most, that's a daytime thing. You know, but there are others that like, sound like somebody like dropped a book on the floor. And, you know, and those are, you know, so think of it as like the wake of a boat. The bigger the boat, the bigger the wake, the closer the boat, the more the wake you feel.

• 3:19:58John Coogan?

  Yeah.

• 3:19:59Blake Scholl?

  And so if you have a right-sized boat at a sufficiently faraway distance, it really ought to be considered a non-issue. So, you know, I think we're still kind of taking in exactly what's the language of the EO.

• 3:20:11Blake Scholl?

  You know, but my expectation is that this will be a one-two punch, where, you know, if there's no boom, there's nothing to argue about. And if there's a boom, there should be a way to sort of demonstrate. That it was an acceptable one.

• 3:20:24John Coogan?

  Yeah, yes, specific flight corridors where people are opting in or something like that.

• 3:20:30Blake Scholl?

  Yeah, I mean, that's just the you will hear and not if you're in kind of boom full mode that the boom corridor is actually like 50 or 100 miles wide.

• 3:20:40John Coogan?

  Very wide.

• 3:20:41Blake Scholl?

  I mean, you know, we can't build a railroad in this country.

• 3:20:43John Coogan?

  Yeah.

• 3:20:44Blake Scholl?

  Like, you know, which is like

• 3:20:45Jordi Hays?

  Well, so the positive thing is like, I imagine when you're traveling over oceans, we can, you know, have a little bit more flexibility.

• 3:20:54Blake Scholl?

  Yeah, there has never been a restriction over ocean. So that's the fortunately, there's nothing to do there. So the way our first airplane over to will do this is it'll fly boomless over land at like plus 50%. And then, and then when we get to the coastline, you know, he gunned the throttles.

• 3:21:08John Coogan?

  Yep.

• 3:21:08Blake Scholl?

  And then you go to full two act speed.

• 3:21:10John Coogan?

  Yeah, yeah, yeah. Yeah. And I'm sure that the economics change when you can do 1.3 Mach over land. Because that's just a there's so much more over land air travel generally. So it's just a bigger market. So it justifies everything on the investment.

• 3:21:25Blake Scholl?

  It does. Yeah. And the economics are actually really interesting. So if you fly sort of lightly supersonic, it's worse for fuel burn. But you can do so many more flights with the same airplane. You save a bunch of money on other things. And so go so on over to going right under the speed of sound and going boomless supersonic is actually the same dollars per seat mile. Right. Like the fuel size gets a little bit bigger.

• 3:21:47John Coogan?

  Yeah, the cost side.

• 3:21:49Blake Scholl?

  The cost side, like anything

• 3:21:50John Coogan?

  But the revenue is going to be, I'd pay 10 times as much to get from

• 3:21:53Blake Scholl?

  Oh, yeah. Obviously.

• 3:21:55John Coogan?

  I mean, time is money. Save both ramp.com. Also boom, boom supersonic. You can go to both. Time is money. They're everyone's going to save you for time. But if the boom comes down, reflects, bounces back up, and I'm in a plane there, is that going to break my plane's windows? What?

• 3:22:13Blake Scholl?

  Yeah. Okay. So if a few people ask that question, it's a good question. The answer is Concorde did that for 27 years and nobody noticed.

• 3:22:21John Coogan?

  Oh, interesting.

• 3:22:21Blake Scholl?

  And one time they tried to test it. We know the pilots that were doing this. They sort of arranged for like a 747 to be here while Concorde's kind of passing overhead. And they had told everybody on the 747 that they might get to hear something. And they didn't hear anything and everybody was super disappointed.

• 3:22:38John Coogan?

  Okay, so it just doesn't really affect.

• 3:22:40Blake Scholl?

  Like, maybe you feel something that feels like turbulence. I don't know. It's like, it's like, it's a nothing burger.

• 3:22:45John Coogan?

  But it's not gonna blow the windows out, which is like the worry, of course.

• 3:22:47Blake Scholl?

  No, I mean, if that was gonna happen, you know, Concorde have knocked out every other airplane in the sky.

• 3:22:52John Coogan?

  Yeah, of course.

• 3:22:53Blake Scholl?

  Airplanes fly above.

• 3:22:54John Coogan?

  Yeah.

• 3:22:55Blake Scholl?

  All airplanes fly below. So Concorde was booming for 27 years over the Atlantic, and like, nobody got hurt.

• 3:23:03John Coogan?

  Yeah.

• 3:23:04Jordi Hays?

  Wild.

• 3:23:05Blake Scholl?

  The way to look at this, by the way, is like, the, uh, the, the energy intensity and some of the physics of sonic boom are very similar to thunder. Right? So you could be like, oh, my gosh, like, you know, could, could boom over the water, like disturb the mating hables of like, I don't know, the aquatic spotted owl or something.

• 3:23:20John Coogan?

  Sure.

• 3:23:21Blake Scholl?

  Well, anything that was going to be put out of commission by a sonic boom was long ago put out of commission by a thunderstorm.

• 3:23:27John Coogan?

  Sure.

• 3:23:28Jordi Hays?

  Yeah.

• 3:23:28John Coogan?

  Sure.

• 3:23:30Jordi Hays?

  Was there anything, was there anything to you that was surprising about the EO?

• 3:23:37Jordi Hays?

  What, what, what, what, what, what did you maybe not anticipate?

• 3:23:40Blake Scholl?

  I mean, I had, I, I admit I haven't read it word for word yet.

• 3:23:42John Coogan?

  Yeah.

• 3:23:42Blake Scholl?

  Uh, I read, I read the fact, we had a party, and I need to like calm down and read it word for word. There's, there's a lot of stuff in it, um, uh, that, that appears to sort of like, not just say, great, you should be able to fly supersonic. But, you know, advances R and D, and, you know, there's, I, I gotta read all of it. I wanna say what it says when I read it.

• 3:24:01John Coogan?

  Yeah, yeah, yeah. I'm, I'm sure there's a ton of work to be done on like the licensing and approval and, and everything that happens with certification. Some of those things might need to change or to speed up. Some of them might need to stay in place if it's a safety issue, of course. Uh, but what's next for the company? What's the next milestone that you're tracking?

• 3:24:17Blake Scholl?

  Uh, is, we're, we're, we, let's go. So we're, we're building our first engine.

• 3:24:22John Coogan?

  Okay.

• 3:24:22Blake Scholl?

  Or the, you know, and that, that thing is like 60% uh, the parts are in the manufacturing process. Uh, and, uh, we'll go, uh, run that bad boy later this year. You know, the, the skeptics always say a startup can't build a jet in from scratch, so we'll find out.

• 3:24:36John Coogan?

  Yeah.

• 3:24:37Blake Scholl?

  And, uh, then we'll start building the first, uh, full-scale pre-production prototype overture next year.

• 3:24:41John Coogan?

  Very cool.

• 3:24:42Blake Scholl?

  Uh, it'll be roughly three years.

• 3:24:44John Coogan?

  Okay.

• 3:24:45Blake Scholl?

  From today to, to being back and like there's a bird in the air. But, you know, last, last time that, well, when we flew, it looked like a fighter jet.

• 3:24:50John Coogan?

  Yeah.

• 3:24:51Jordi Hays?

  Yeah.

• 3:24:51Blake Scholl?

  Next time, it's the, it's the overture, which it looks like a, it kinda looks like a Concorde and a 747 had a baby.

• 3:24:58John Coogan?

  Yep.

• 3:24:59Blake Scholl?

  It's got this little hump up at front, you know, it's not a double decker, but it's a really unique airplane.

• 3:25:05John Coogan?

  Not yet. We have to get the gold plated 747. Those are really hot right now. Lots of people giving them to their friends. And so I could imagine handing these out to world leaders being pretty effective.

• 3:25:16Jordi Hays?

  I have to ask, did you have any, did you get a chance to watch the rehearsal by Nathan Fielder? You give me a blank stare.

• 3:25:24John Coogan?

  He's probably too busy.

• 3:25:25Jordi Hays?

  I'm assuming you were too locked in.

• 3:25:26Blake Scholl?

  I don't, this sounds like a pop culture thing of which I'm ignorant.

• 3:25:30Jordi Hays?

  Yeah, well, the reason it's relevant is because this sort of comedian Nathan Fielder has a show called The Rehearsal. He learns how to actually fly a commercial aircraft to demonstrate to the FAA some of the issues they have around safety.

• 3:25:47John Coogan?

  Specifically on pilot communication. He identifies that the vast majority of commercial air crashes that have happened over the last few decades have been the result of a captain making a mistake and the second in command not having the kind of energy or confidence to stand up to them because they're meeting for the first time. And so he dissects this in a bunch of hilarious ways.

• 3:26:11Jordi Hays?

  My main takeaway from your answers is extremely bullish or boom that you have no idea.

• 3:26:19John Coogan?

  There's a certain class of hard tech founder, like I always notice Scott Nolan, he'll post like, he'll repost like their announcement like four days later because he's like so in the trenches that like, I'm like, Scott, like, you know, you launched three days ago. Like you should be retweeting at least like a post because he's so offline. But anyways, I have one last question about being online. You've been learning from Elon about manufacturing online. You had an interesting back and forth where you were talking about manufacturing parts. I barely followed it. Can you explain what did you learn from Elon about manufacturing?

• 3:26:56Blake Scholl?

  Yeah.

• 3:26:57John Coogan?

  And yeah, yeah, break that interaction down.

• 3:26:59Blake Scholl?

  So Elon has this thing he talks about called the idiot index. It's a beautiful Elon-ism, right? Where it's sort of a, you've got a final part and you divide it by the part cost. Like it's a turbine blade. It costs, I don't know. A real world example, we've got a set of turbine blades, costs a million dollars for a set of turbine blades. What is the raw material cost? Thousand dollars. What's the idiot index? A thousand X. Like the cost goes a thousand fold in the manufacturing process. And so it's a sort of measure of like, what's the money efficiency of the manufacturing process? There's another thing that I think is actually even more important that we call the slacker index.

• 3:27:39Blake Scholl?

  And the slacker index is how long it takes to get something out of the supply chain, divided by how long it actually takes to make it.

• 3:27:48John Coogan?

  Oh, so more time based.

• 3:27:49Blake Scholl?

  Right? Like, so we were getting these 3D printed turbine blades for our first jet engine. And we go quote them in the stupid old aerospace supply chain. And the quote comes back and it's like, it's six months and a million dollars. And I was like, wow, okay. Well, how long does it actually take to print the blades? Oh, like 24 hours. Like, so what's going on the other 179 days? You're like waiting for, and I was like, oh, it must be that the machine is like really hard to get and there are only a few. Well, no, turns out the machines are off the shelf. They've got them in inventory. You can get one in two weeks. And by the way, what do they cost? Two million dollars. So for the price of two engines worth of blades, we were able to buy a 3D printer and print our own blades. And so what happened, by the way, it compounds from there.

• 3:28:31Blake Scholl?

  Is if engineers can only make a new blade every six months, they like really work the blade design because they don't want to get it wrong. Because if they get it wrong, it takes six months to fix it. But if they print it the one the next day, then all of a sudden the rate of iteration goes up. And there's an engineering hand wringing and trying to get it right the first time goes away. You want low idiot index and you want low slacker index.

• 3:28:52John Coogan?

  I love it. I love it. Well, hopefully this EO unlocks a lot of that. And we can bring down the idiot index, bring down the slacker index.

• 3:29:02Blake Scholl?

  Flight man definitely had a high idiot index. So I'm glad that's been deep sexed.

• 3:29:07Jordi Hays?

  Well, we are one step closer to a supersonic podcast.

• 3:29:11John Coogan?

  I love it.

• 3:29:11Jordi Hays?

  And I cannot wait.

• 3:29:13Blake Scholl?

  Yeah, I haven't forgotten you're on.

• 3:29:15Jordi Hays?

  I know, I know. It's happening, it's happening.

• 3:29:17John Coogan?

  Well, congratulations. Enjoy the weekend. Hopefully you can advance the technology, but also celebrate a little bit. And we will talk to you soon, Blake. Thanks so much for hopping on.

• 3:29:27Jordi Hays?

  Thanks for jumping on. Congratulations.

• 3:29:29Blake Scholl?

  Bye.

• 3:29:31Jordi Hays?

  Let's give a little air horn for supersonic flight.

• 3:29:33John Coogan?

  Yeah, I love it. I can't wait to hop on a Boom supersonic, take it to an exotic locale, stay at a wander.

• 3:29:40Jordi Hays?

  Find your happy place.

• 3:29:42John Coogan?

  Find your happy place. Book a wander with inspiring views, hotel-grade amenities, dreamy beds, top-tier cleaning, and 24/7 concierge service. It's a vacation home, but better, folks. Any other posts we need to go through? We talked about Polymarket partnering with X. That is fantastic news. Shane Copeland has the news. He says, "Proud to announce Polymarket's partnership with X and XAI as their official prediction market partner." I'm very interested to see how this actually integrates. Obviously, Polymarket's gotten very good at sharing images with a very catchy image and then the market, not just the... Like, the Polymarket screenshots have been kind of a staple of X for... since the election. But they've gotten better at that. I'm wondering if we're going to see the data actually hydrate live, like community notes.

• 3:30:28John Coogan?

  So you can attach a Polymarket to a post and it will stay updated. That would be very cool. So you could be tracking it on the post. It'll all be very interesting to see where that goes. What else should we talk about today before we leave? I think we covered a lot of it. Scott Belsky's coming on the show next week. Very excited for that. He has a post that I was just enjoying because it's about product leadership. He said, "Underrated characteristic of top product leaders: compulsiveness. Obsessively capturing decisions, ideas that need to be taken, baked that would otherwise be fleeting." This is how I felt about reading this post. Incessantly iterating over options in mind, morning till sleep.

• 3:31:09John Coogan?

  This is what the Golden Retriever does. The Golden Retriever incessantly iterates over options. Should I get the ball? Should I get the snack? Should I roll over? Try and get a belly rub?

• 3:31:21Jordi Hays?

  High energy, high energy, trying to be efficient. Not always getting it right, but doing their best.

• 3:31:26John Coogan?

  World-class products are crafted via compulsion. There's no better example than the Golden Retriever.

• 3:31:31Jordi Hays?

  Golden Retriever never says, nah, I don't want to get the ball today.

• 3:31:35John Coogan?

  Yeah, no, never. So go out, get that ball, enjoy, be a Golden Retriever this weekend. Fantastic week, timeline in turmoil, lots of chaos in tech, but we're still here.

• 3:31:45Jordi Hays?

  We had an incredible IPO.

• 3:31:47John Coogan?

  We had incredible IPO.

• 3:31:48Jordi Hays?

  IPO windows open.

• 3:31:49John Coogan?

  Yep.

• 3:31:50Jordi Hays?

  Uh, we had some drama.

• 3:31:51John Coogan?

  Some drama on the timeline, but who knows, it's a new week. We might see completely new things. And the, and the relentless march of techno-capitalism and artificial intelligence, well, it marches on.

• 3:32:04Jordi Hays?

  And, uh, as always, we're news maxing. Uh, Ben is standing behind the camera right now, giving us a threatening look. He says, go leave us a five star review.

• 3:32:13John Coogan?

  Yeah, he does.

• 3:32:14Jordi Hays?

  Spotify, Apple Podcasts.

• 3:32:16John Coogan?

  Yes, please.

• 3:32:17Jordi Hays?

  It does help the show a lot.

• 3:32:18John Coogan?

  Thank you.

• 3:32:18Jordi Hays?

  And we hope you all have a fantastic weekend. We'll see you Monday.

• 3:32:23John Coogan?

  See you Monday. Goodbye.