DeepSeek, Stargate Update, Bees Do Enjoy Honey, Golden Retriever Maxxing, Bring on the Trilly

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

• 0:03John Coogan?

  Oh, we're live. Welcome to Technology Brothers, the most profitable podcast in the world. Today, we're doing a deep dive on DeepSeek, the new AI model coming out of China. They say they trained it for just $500 less than this cash stack, but we'll dig into that because it's a hot topic. A lot of people are debating about this. But we wanted to take you back to May of last year when DeepSeek actually launched. It's in the news because they launched a new model, but the company's been out there open sourcing LLMs for for something like six months now. And it's it's shaking up the timeline. The timeline's in turmoil over there.

• 0:42Jordi Hays?

  Timeline's in turmoil.

• 0:43John Coogan?

  Yeah.

• 0:44Jordi Hays?

  Uh, and I'll go out on a limb to say this is China's next attempt at a DJI TikTok type.

• 0:53John Coogan?

  Yep.

• 0:54Jordi Hays?

  Uh, products where, hey, let's basically sell this product in America for way less than it costs.

• 0:58John Coogan?

  Yep.

• 0:59Jordi Hays?

  Uh, give it away for free.

• 1:01John Coogan?

  Yep.

• 1:01Jordi Hays?

  Try to get a bunch of important, you know, companies using it or consumers dependent on it. And then, uh, you know, it's a little bit of, you know, spyware.

• 1:10John Coogan?

  Yeah, that's correct. The data, yeah, there's all the same geopolitical considerations that we walk through during the day.

• 1:16Jordi Hays?

  And there's the incentive, you know, for them, if, you know, if it, you know, you can basically assume that any important Chinese company is, uh, you know, backed by the state to some degree, even if they're not, they're sort of, uh, you know, got a gun to their head the entire time they're operating it. So we're excited to get into this one. Uh, you know, as our, as our mission at Technology Brothers is to, you know, entertain, cover some news and take down CCP fronts. So.

• 1:45John Coogan?

  Exactly.

• 1:45Jordi Hays?

  Let's get into it.

• 1:46John Coogan?

  So let's kick it off with a fantastic analysis by Dylan Patel in Semi Analysis. This is from, uh, May 7th of 2024, and it's interesting.

• 1:56Jordi Hays?

  And Dylan is, for those that don't know, he's, he's the Tom Brady of semiconductor analysis.

• 2:01John Coogan?

  100%.

• 2:02Jordi Hays?

  Uh, he's the kind of guy that gets invited on BG Square to.

• 2:07John Coogan?

  He's been on.

• 2:07Jordi Hays?

  He'd be all dogs, you know, how, how. How the how the semis are barking these days.

• 2:11John Coogan?

  Yes, yeah, I mean, it's a fantastic, it's essentially Substack subscription model, $500 a year. But then he also does a ton of consulting. And what's interesting is that he doesn't just read the 10 Ks or anything like he will task satellites to like figure out where they're building stuff and like really collect data and then he sells.

• 2:30Jordi Hays?

  Doing the same thing that hedge funds.

• 2:32John Coogan?

  Exactly.

• 2:32Jordi Hays?

  Doing, it's more.

• 2:34John Coogan?

  Yeah, so so I think I think semi analysis is actually like a pretty large company now with a number of analysts. And he's not going the kind of like solo creator route. He's very much focused on building like a a research organization, but he's also just hilarious on podcasts, like very free flowing, just says whatever he wants, like totally uses very online lingo too, and these very professional settings, which is great. I I'm a big fan.

• 2:58Jordi Hays?

  Love to see it.

• 2:59John Coogan?

  So this is the title of this is OpenAI is doomed to Microsoft and it's kind of walking through a bull and bear case for OpenAI, given all the different dynamics and different cluster build outs that were happening mid last year. And it starts by saying, all eyes are on how long the profitless spending on AI continues. H100 rental pricing is falling every month. This was a big trend last year. In 2023, ChatGPT was blowing up and everyone was like, I will do anything if someone can get me a rack of A100s, a lot of VC.

• 3:32Jordi Hays?

  And just.

• 3:33John Coogan?

  Exactly. The Andromeda. But in 2024, rental pricing went down as fewer firms realized that, hey, maybe they don't want to be in the pre-training game. They just want to fine tune or they just want to build, they want to be rappers essentially. And then also the really, really big firms might just be building super clusters that didn't even affect the rental pricing market. And so availability is growing quickly for medium sized clusters at fair pricing. Despite this, it's clear that demand dynamics are still strong while the big tech firms are still the largest buyers. There is an increasingly diverse roster of buyers around the world that's still increasing GPU purchasing sequentially. Most of the exuberance isn't due to any short, any sort of revenue growth, but rather due to the rush to build ever larger models based on dreams about future business.

• 4:19John Coogan?

  The clear target. That most have in mind is matching OpenAI and even surpassing them. Today, many firms are within spitting distance of OpenAI's latest GPT-4 in chatbot ELO. And in some ways, and in some ways such as context length and video modalities, some firms are already ahead. So context like that's the Google thing.

• 4:36Jordi Hays?

  Yeah, drop an entire book.

• 4:38John Coogan?

  Drop an entire book in Gemini and.

• 4:40Jordi Hays?

  Drop the entire banger archive.

• 4:43John Coogan?

  Exactly. And so there's been a bunch of ways to differentiate, even if you're, you just get close to GPT-4. You do a similar run and then you build a different tool around it or you find, or you build different like, you know, unhobbling. So this one uses the web, this one can process PDFs, this one can.

• 5:01Jordi Hays?

  You don't really hear about Mistral much anymore.

• 5:04John Coogan?

  No.

• 5:05Jordi Hays?

  Was that because the French don't have a word for entrepreneur?

• 5:09John Coogan?

  I like that. Oh yeah, it's the, it's the.

• 5:12Jordi Hays?

  Ryan Peterson. They were trying to community note him on that, but I don't think they got it through.

• 5:18John Coogan?

  That's great. It's probably a war. So Gemini two ultra is rumored to surpass GPT-4 to turbo in every way. Furthermore, Meta's Lama three, four, oh, five B is also going to match GPT-4 while being open source, meaning GPT-4 class intelligence will be available to anyone who can rent an H100 server. But he goes on to mention the phoenix from the east. It's not just the big tech firms that have rapidly caught up yesterday.

• 5:41Jordi Hays?

  Real quick, one, one kind of interesting comparison is it feels like the models have fast approach, being almost like the sports car market where it's like Porsche can be like, well, we have better handling. And McLaren can be like, well, we're faster in a straight line.

• 5:56John Coogan?

  Yeah, exactly.

• 5:56Jordi Hays?

  And Tesla's like, well, I'm fastest in the straight line.

• 5:59John Coogan?

  Yeah, yeah, yeah.

• 6:00Jordi Hays?

  So they're all just sort of competing, doing a lot of things pretty well.

• 6:03John Coogan?

  Yep.

• 6:04Jordi Hays?

  And then competing on these edge cases that almost the average, and the reason that chat GPT has stayed very dominant from a user standpoint is because they have the consumer mind share. The average person is not like prompt engineering. They don't care about the context window. They're just almost using it like a. Google like do things on your behalf.

• 6:25John Coogan?

  Yeah, I mean, and this was one of the big like bear cases for these L L L M companies after Chat G P T dropped was like, well, is everyone just going to train these and it's going to be completely commoditized? But then the company's kind of figured out, well, if Grok is a little bit less P C, that's an edge. And if Gemini has a bigger context window, but there's some fascinating stuff in here about how the different big tech companies are able to integrate their models and actually bootstrap to much larger user bases, which results in getting more data from users, which is very interesting. But he highlights DeepSeek, which launched in May of twenty twenty four. It says China's DeepSeek open sourced a new model that is both cheaper to run than Meta's Lama three seventy B and better.

• 7:08John Coogan?

  So this was not as big of news because it wasn't truly better than G P T four. So it kind of slid under the radar, but it was cheap on inference, meaning you just needed less less compute to actually run it.

• 7:20Jordi Hays?

  And this is, to be clear, the same thing that China has done historically with D J I, where D J I is selling products at without any profit margin at all.

• 7:31John Coogan?

  Yep.

• 7:31Jordi Hays?

  Potentially even losing money on a unit basis because they just want to get the product out into the world, getting used and consumed.

• 7:38John Coogan?

  Yep.

• 7:39Jordi Hays?

  And so, and not too dissimilar in my view to TikTok faking views, right? Because they're like, well, if users come on here, they post something, they get a thousand views. They're not going to want to go on Instagram and post the same content and get two hundred views, right? That sort of.

• 7:55John Coogan?

  And, and, and, and, I mean, the Chinese censorship is already a thing. It says, while the model is more tuned for Chinese language queries, because that's the tokenizer in the training data set, and government censorship of certain ideas, it does happen to win in the universal languages of code.

• 8:10Jordi Hays?

  And don't ask, don't ask DeepSeek about the Uyghurs, your laptop will explode.

• 8:17Jordi Hays?

  Uh, yeah.

• 8:18John Coogan?

  Not. And so, uh, DeepSeek claims that a single node of 8XH800 GPUs can achieve more than 50,000 decode tokens per second, per second peak throughput. At the quoted API pricing of output tokens alone, that is $50 revenue per node per hour. The cost for an H, uh, for an 8XH100, H100, H800 node in China is about $15 an hour. So assuming, assuming perfect utilization, DeepSeek can make as much as $35 an hour per server or up to 70% gross margins. This is what we were talking about yesterday.

• 8:54Jordi Hays?

  Yeah.

• 8:55John Coogan?

  You know, as you, as you make these models more inference, uh, optimal.

• 9:00Jordi Hays?

  Yeah.

• 9:00John Coogan?

  You get higher margins and that's, and that's a lot of what DeepSeek has been kind of lauded for. And it even says, uh, even more interesting is the novel architecture DeepSeek has brought to market. They did not just copy what Western firms did. There's a lot of stuff that they did copy and there's a lot of data that they probably stole and there's a lot of weird political things where they maybe broke rules and laws. But they did, they did create some fundamental innovations technically on the algorithm side. And I think that this whole story is going to be complex because people are going to want to take one side or the other and just say, oh, it's, it's a complete copycat. They're lying about everything. There's nothing interesting here or it's amazing. It's the biggest breakthrough and, and they need to boil it down to a single tweet. And that's why I'm glad we have an hour to talk about this.

• 9:45Jordi Hays?

  There's two.

• 9:46John Coogan?

  It really is.

• 9:47Jordi Hays?

  There's, there's, it's such an interesting thing where they're coming out with an open source product that they are undercutting the entire market on. And, but it's this, it's hard to be, it's hard to say, oh, you know, they're simultaneously putting everything out there.

• 10:03John Coogan?

  Yep.

• 10:03Jordi Hays?

  While there's clearly stuff happening behind the scenes that we don't.

• 10:06John Coogan?

  Yeah.

• 10:06Jordi Hays?

  Really know about.

• 10:07John Coogan?

  Yeah. And so we'll, we'll get into a little bit of the background, but they do seem pretty cracked. Uh, there are brand new innovations in mixture of experts, R O P E and attention. Their model has more than 160 experts with six writing. Oh no. The phone fell. Too much Chinese.

• 10:22Jordi Hays?

  Oh, it's, it's too many notifications.

• 10:24John Coogan?

  Yeah, yeah, yeah. Well, back to the show. Furthermore, DeepSeek implemented a novel multi-head latent attention mechanism, which they claim has better scaling than other forms of attention, while also being more accurate. They trained on 8.1 trillion tokens. DeepSeek V2 was able to achieve incredible training efficiency with better model performance than other models at 1/5 the compute of Meta's Llama 3.70b. And so, for those keeping track, DeepSeek V2 training required 1/20th as much energy, essentially, 1/20th the flops of GPT-4, while not being far off in performance. And so, then he goes on to talk about, you know, is Microsoft committed to OpenAI? There's a big discussion there. That's kind of old news.

• 11:08Jordi Hays?

  And the new news there is that Satya is, you know, sub-tweeting Sam in Elon's comments. So that shows a little bit of, you know, maybe the marriage isn't perfect under the hood.

• 11:24John Coogan?

  And this is something that he does bring up throughout the piece and throughout a lot of these analyses, which we talked about. He really was early to this idea of Satya saying, "I'm good for my 80 billion." And what does that really mean? Well, it's Azure workloads. And this is something that happens a lot where Zuck will say, "Oh yeah, I just bought 200,000 Nvidia GPUs." And then we dig into it and you're like, "Oh, well, like, a half of that is going to recommendation algorithms for Reels." And that's great. Like, it's cool. They have the infrastructure. But it's not all LLM AGI race training, which is what people are really focused on. So I'm moving on to page seven. Is distribution and integration king? With DeepSeek and Llama 3.405b coming to the open source, there is very little reason.

• 12:08Jordi Hays?

  Did you want to, before that, did you want to cover Microsoft trying to reduce their?

• 12:12John Coogan?

  I think we kind of covered that, in a sense that, you know, like, the closer here is that many firms use OpenAI as technology through Azure. More than 65% of Fortune 500 now use Azure OpenAI service. It's noteworthy that this is not directly through OpenAI. OpenAI can lose significant business without Google, DeepMind, or Amazon Anthropic gaining share, simply by Microsoft pushing its own model, their own model, instead. And so he was just kind of commenting in in this piece about the like the temperature in the room with regard to the Microsoft and OpenAI deal at the time, but it but that story has evolved so much and we've covered it so much. I don't think we need to dig into that. I'd rather focus on this distribution and integration is king section

• 12:54John Coogan?

  with with deep with DeepSeek and Llama coming to the open source. There's very little reason for enterprises not to host their own model. Zuckerberg's strategy of using open source models to slow down competition, commercial the competitions, commercial adoption and attract more talent is working wonders. So it was like, why is he open sourcing this thing? Like, this is very expensive. And it was all about getting people to come work at Meta on this cool project, and then also curb more companies from from doing build outs, because they're like, what's the point? And this is probably the pressure that we felt on Aiden Gomez Co here, right? And maybe even Mistral, where it's like, well, if your whole thing is like, the open source, or like, you're like, not the true frontier

• 13:36John Coogan?

  compounder winner, well, you're you're just never going to be able to make any money because the open source one's going to come out. Yeah, it's going to be a little bit behind GPT five or GPT four. But if Zuck keeps open sourcing it, you're just never going to make any money. And so it's going to be really hard. So he's keeping the pressure on. And then also because of Databricks, which we've talked about before, Databricks lets you fine tune really easily. And so it's no longer like fine tuning is no longer a monumental task. And so one of OpenAI's advantages is that they have been ahead in collecting data, specifically usage data. And that that happens when you sometimes when you issue a query to GPT four or ChatGPT, it'll say, hey, we actually give you two. Which one do you like more? And then you can A B, or every post will have a thumbs

• 14:17John Coogan?

  up, thumbs down. And then also, they will, they'll be able to just see, okay, did you follow up with another query? So they're collecting lots of data, and they have 100 100 million users. But he says, only a quarter of Americans have ever ever even tried ChatGPT, and most don't continue to use it. Most future consumer LLM usage will go through existing platforms, Google, Instagram, WhatsApp, Facebook, iPhone, Android, while Meta hasn't found out how to monetize it. Their Meta AI powered by Lama 370B is available across Facebook, WhatsApp and Instagram. They announced rollout, the announced rollout has been extended to 14 countries, including the US. So they've hit 1.1 billion in population, but they have 3.2 billion daily active users.

• 14:58John Coogan?

  And so they're scaling up and when they do, they get all that data from,

• 15:03Jordi Hays?

  Damn.

• 15:03John Coogan?

  And then they can use that to fine tune the next version of the model.

• 15:05Jordi Hays?

  Mark, imagine being Mark and you're already halfway through.

• 15:10John Coogan?

  Yeah.

• 15:10Jordi Hays?

  Your TAM.

• 15:11John Coogan?

  Yeah.

• 15:12Jordi Hays?

  And, and you're trying to get these incremental users that just don't have internet. They're like.

• 15:17John Coogan?

  Well, they were focused on that for a while. They were like, we are going through satellite to.

• 15:21Jordi Hays?

  Yeah, yeah. It is interesting. Meta could have probably almost launched a Starlink competitor with how much they spent on the Metaverse.

• 15:28John Coogan?

  Oh, yeah.

• 15:29Jordi Hays?

  And then actually deliver the Metaverse and the real Metaverse is just Reels.

• 15:32John Coogan?

  They, they had a project for that, Project Loon at Google, which was internet via balloon, via blimp essentially.

• 15:38Jordi Hays?

  That's cool.

• 15:38John Coogan?

  And, and I believe in India, there's a free Facebook, uh, like phone plan that you can get the internet and you only get Facebook. So you, you kind of have to do everything or something like that.

• 15:50Jordi Hays?

  Yeah.

• 15:50John Coogan?

  You basically have to do everything through Facebook, but, um, but, but it does, it does bring more users online. And so all of that is, all is, all of that is feeding both fine tuning data on the LLM and then also just user data and preference data that goes into the system.

• 16:04Jordi Hays?

  They were saying if Apple was more creative, would they not have just sent up their own satellite network and just said, you now are going to get all your.

• 16:11John Coogan?

  Yeah. Data from us and you don't need Verizon anymore.

• 16:14Jordi Hays?

  Yeah.

• 16:14John Coogan?

  That'd been cool. Probably more reliable. Um, and so Meta's deployment probably hurts Google's search more than Bing or perplexity ever will. Because people will just wind up searching in Facebook and Instagram. To serve 3 billion people, you clearly need to have a small and efficient model to bring the cost of inference down, especially when you're not making money on it. You're not charging 20 or $20 a month or $200 a month. Either Meta has made the financial math work or is prepared to invest heavily to execute a land grab in the consumer AI space. Either spelled disaster for incumbents.

• 16:42Jordi Hays?

  Yeah. And that's, uh, the difference between Apple and Meta where Meta is still on founder mode.

• 16:49John Coogan?

  Yep.

• 16:49Jordi Hays?

  Apple, Google are in manager mode.

• 16:51John Coogan?

  Yep.

• 16:52Jordi Hays?

  And they're willing to invest. Google, obviously. Has to show their investors and the markets that they're investing in, serious about winning

• 17:00John Coogan?

  Yeah.

• 17:00Jordi Hays?

  AI race.

• 17:01John Coogan?

  Yeah.

• 17:02Jordi Hays?

  But it doesn't actually look that ambitious.

• 17:05John Coogan?

  Yep.

• 17:06Jordi Hays?

  In practice.

• 17:07John Coogan?

  Well, speaking of ambition and non, potentially non-founder mode companies, the other argument to be made is if compute and capital are king, in that case, Google is king, given their hyper aggressive TPU build out pace. So Google has, has created their own chip to rival the GPU called the TPU, the tensor processing unit. It's, it's fabbed at TSMC, I believe. And so, but, but it's designed specifically just for AI workload. So you can't even run video games on it essentially. It's just for this, but much like the advanced.

• 17:37Jordi Hays?

  No, no, they're fixing no scope.

• 17:39John Coogan?

  Yeah, yeah. Much like the advanced Nvidia stuff, but, but Google is investing super heavily and definitely takes seriously the capex. And so ironically, Google now has focus and is directing all large scale training efforts into one combined Google DeepMind team, while Microsoft is starting to lose focus by directing resources to their own internal models that compete with OpenAI. And so Google, they actually, they, DeepMind used to be a separate company. It was acquired, Demis Hassabis and that team, and they were working kind of separately. They finally, it was Google Brain and DeepMind and they, and they brought them all together because they were like, the, the capex is so intense, you guys have to work on one big model instead of two smaller ones. And so this is one of the biggest risks for OpenAI is that the capital game is all that matters.

• 18:23John Coogan?

  If that's the case, the tech company that invests the most is the winner. And this is why we're seeing Project Stargate, which we'll talk about later, but you know, with capital does matter, OpenAI needs to be in a place where they can have access to the absolute largest cluster.

• 18:37Jordi Hays?

  Yeah. Which is just, which is why it's amazing that OpenAI has been able to do what they've done.

• 18:43John Coogan?

  Yeah.

• 18:43Jordi Hays?

  Because Sam Altman, I promise you does not care about some other startup that raised.

• 18:50Jordi Hays?

  Thirty million dollars?

• 18:51John Coogan?

  No.

• 18:52Jordi Hays?

  He cares about these players that can invest thirty billion dollars

• 18:54John Coogan?

  Totally.

• 18:55Jordi Hays?

  off their own balance sheet.

• 18:56John Coogan?

  Yep.

• 18:56Jordi Hays?

  To compete with him and have distribution.

• 18:58John Coogan?

  Yep.

• 18:59Jordi Hays?

  So it's not, uh, it's like the, the most harrowing task, to be honest.

• 19:03John Coogan?

  Yeah.

• 19:04Jordi Hays?

  Take the best, one of the best fundraisers ever in the world.

• 19:07John Coogan?

  Yeah.

• 19:07Jordi Hays?

  Sam Altman. And then, but you give him this impossible task of saying, go compete with people who have balance sheets that dwarf your total capital raised.

• 19:16John Coogan?

  Yeah. And so, I mean, it really is insane. I mean, everyone's obviously still buying a ton of Nvidia, but Microsoft has the least custom AI silicon deployed to their cloud, but they're working on it. Google has the TPU, which is obviously the biggest, but Meta and Amazon are also ramping internal silicon. And even Apple has Apple silicon, which is only for the phones and the laptops now, but clearly they have internal capabilities to develop custom silicon. And so you could see them developing their own, their own hardware as well. OpenAI trained GPT-4 in 2022. Since then, they have been entirely focused on the next step up, experimenting with new architecture, data, et cetera. OpenAI has a tremendous first mover advantage and they have been solidly targeting models

• 19:58John Coogan?

  an order of magnitude larger than everyone else for a while now.

• 20:02Jordi Hays?

  So they have the first mover advantage, but every time they ship something new, people dissect it and try to implement many of those learnings.

• 20:09John Coogan?

  For sure, for sure. But they seem to just be like, you know, a little bit farther on the treadmill, like

• 20:14Jordi Hays?

  Yeah, yeah, they're constantly ahead, but then they're, by nature of, of the, the product, they have to expose some amount of

• 20:23John Coogan?

  Yeah, totally.

• 20:23Jordi Hays?

  how it actually

• 20:25John Coogan?

  Oh yeah, I mean, some of these, it's just, it's just like, if there's a good idea like voice or upload a PDF, it's like, okay, that's like a

• 20:31Jordi Hays?

  Features are easy, but also the, the machine, how the machine works, right?

• 20:35John Coogan?

  Yeah, totally. They, they try and hide that, but if there's just a few secrets, it's like one, you know, East Bay rationalist party where everyone's talking and all this thing, you know?

• 20:44Jordi Hays?

  No, it's so hard because people and startups like to, like to yap, right? There's no, I'm sure they all have like really intense, you know, NDAs and, and things like that, but

• 20:56John Coogan?

  Yeah.

• 20:56Jordi Hays?

  it's not like it's a government, even stuff leaks out of the government, right?

• 21:00John Coogan?

  Yeah, totally.

• 21:00Jordi Hays?

  It's not as secure as, as

• 21:02John Coogan?

  And so he kind of closes with, uh, this, the, the midwit meme of, uh, on the left

• 21:08Jordi Hays?

  This is why, this is why he's goaded.

• 21:10John Coogan?

  Yeah. Yeah.

• 21:11Jordi Hays?

  They have Selling these, selling these memes to hedge funds for probably like a million a year's subscription.

• 21:16John Coogan?

  So as far as the capital game is concerned, Sam Altman is flying around the world, winning the favor of many of the richest people in the world for a reason. They will raise more money than anyone else is even imagining to spend on a single model after they showed the world what they've been cooking the last two years. The real risk for big tech companies is that they do not show any meaningful gains in revenue, but they have to keep accelerating their spending to keep up with OpenAI or maintain market share in their monopoly, Google Search. This would cause data center capex party to keep going and consequently their margins to compress. So it's interesting because there's almost like this expectation that it's like, of course, OpenAI loses money. Like they just became like a real for profit. It's a startup. Sam's at the helm. He's dealing with Masa. It's this crazy thing. They're going for API. If you're Google, it's like

• 22:01John Coogan?

  you're a shareholder. You're like, wait, why are your margins compressing? Like, is this really that real? Like, why don't you just partner with them? Like, is this important?

• 22:08Jordi Hays?

  Well, it's hard because Google needs to show that they're competitive with OpenAI. But at the same time, if their margins, everybody's, a lot of people have been short Google because they're saying, okay, well, these models are a threat to search.

• 22:22John Coogan?

  Yep.

• 22:22Jordi Hays?

  And so if your margins are compressing because you're spending more, wow, people are starting to use competitive products for search. It's really hard for Sundar to go up at a quarterly and be like, yeah, we're not really worried about this model stuff. Like,

• 22:36John Coogan?

  Yeah, yeah, yeah.

• 22:36Jordi Hays?

  He kind of has to put on a brave face for markets, but you know that behind the scenes, he's worried about his job.

• 22:44John Coogan?

  Yep.

• 22:44Jordi Hays?

  The probably the best, the number one candidate would be one of the founders.

• 22:47John Coogan?

  Yeah.

• 22:48Jordi Hays?

  But.

• 22:48John Coogan?

  And, and it's this weird, it's this weird bargain that actually kind of drives bubble behavior where if you under invest and AI is real, you're screwed. If you over invest and AI is real, you're great. If you over invest and AI isn't real, you still have, you still have a lot of assets. It's still valuable. Like there was a lot of dark fiber that wound up getting used later on. So like the, the, the risk reward calculation is like super weighted to over investment right now. So let's move on to the, I don't know if it was an interview or just some coverage of China's new face of AI, DeepSeek founder Liang Wenfeng.

• 23:29Jordi Hays?

  Wenfeng.

• 23:30John Coogan?

  This guy Wenfeng, this guy is, he's the next Frank Wang.

• 23:35Jordi Hays?

  The next Frank Wang.

• 23:36John Coogan?

  The founder of DJI, we're learning, I mean, very similar stories, we'll, we'll dig into this, but this is from the

• 23:45Jordi Hays?

  By the way, he looks incredibly good for 40. He looks like he's like 22.

• 23:49John Coogan?

  He does look 22, he's 40. Whoa, okay, yeah.

• 23:53Jordi Hays?

  Which again, he, you know, we, we don't know if anything they say is real.

• 23:57John Coogan?

  Might be 20.

• 23:58Jordi Hays?

  So he might be like Bill Manitis.

• 24:00John Coogan?

  Oh, yeah, yeah.

• 24:01Jordi Hays?

  Be like Bill Manitis.

• 24:01John Coogan?

  Yeah, a little, little age gambit going on.

• 24:04Jordi Hays?

  Yeah.

• 24:04John Coogan?

  A lot of people in Hollywood doing that.

• 24:07Jordi Hays?

  Yeah, yeah.

• 24:07John Coogan?

  Change of the ages. So DeepSeek is in the news again because they launched R1, which is their reasoning model that competes with O1. And there's a post explaining who this guy is and where DeepSeek came from that we're going to read through now. So, "The founder of artificial intelligence firm DeepSeek touted as 2025's biggest dark horse in the open source large language model arena, emerged as the industry's new face in China at a symposium hosted by the premier in Beijing on Monday. Liang Wenfeng, 40, took part in the meeting where a select group of industry experts in the fields of technology, education, science, et cetera, offered their opinions and suggestions, according to the news agency.

• 24:49John Coogan?

  And so last December, they made waves in the global AI industry after benchmark tests showed that its DeepSeek version 3 LLM, which again is not the reasoning model, this is more just like a GPT core competitor, which was built on a shoestring budget, which we'll discuss if that's real or not.

• 25:04Jordi Hays?

  And I have to put that in the truth zone.

• 25:06John Coogan?

  Yeah, outperformed rival models developed with more resources by the likes of meta platforms and chat GPT creator OpenAI.

• 25:16John Coogan?

  Li called on the economy's new growth drivers.

• 25:19Jordi Hays?

  You know, because we don't have images pulled up, he is wearing a suit here, which we love to see.

• 25:24John Coogan?

  Love to see it.

• 25:24Jordi Hays?

  We gotta give him some credit. He looks very young for his age, just wearing a suit. So we're gonna, we're gonna really put him in the true sound hard in a bit.

• 25:32John Coogan?

  And so recently, Beijing made AI a national priority amid heightened, a heightened tech war between the United States and China. The world's two largest economies, China's AI market is expected to be worth 765 billion US dollars by 2030, according to state-backed investment vehicle China International Capital Corp. In the age of AI geopolitics, tech companies inevitably would have tighter connections with governments than before, says Winston Ma, a New York University law professor. And so apart from being a regulator, governments could be a sovereign investor or a cross-border deal mediator. And we're already seeing that with the CHIPS Act. And so investment is going to be massive, something like over a trillion dollars invested over the next six years

• 26:16John Coogan?

  in China's AI industry. And that's funny that they're, that they're saying that they're going to invest 1.4 trillion because that's three times what Project Stargate is. So, you know, maybe this is.

• 26:24Jordi Hays?

  Well, in Stargate, to be clear, they marketed as a, as a infrastructure product for one company.

• 26:30John Coogan?

  Yeah.

• 26:31Jordi Hays?

  It was very nicely positioned as, oh, this is for America. It was pretty brilliant on OpenAI's behalf. But no, this, we don't have a lot of details, but.

• 26:41John Coogan?

  Yep.

• 26:41Jordi Hays?

  And we should try to go through the girly piece because he, he like gave a thread of, here's all the questions I have about, about OpenAI's Project Stargate. But if, if this is 1.4 trillion total is what they're saying over six years. If, if Masa and Sam managed to do 500, which not very many people actually believe that, you know, that's just one company. So presumably you have OpenAI, or so you have Microsoft and Google and a ton of other big players, not to mention early-stage investing. So I imagine we could, we can and should dwarf that number just to make a statement.

• 27:17John Coogan?

  Completely disagree. We gotta size it up. If they're doing 1.4 trillion, we gotta do 10 times.

• 27:22Jordi Hays?

  That's what I'm saying. We should dwarf their 1.4.

• 27:24John Coogan?

  Oh, oh, yeah. Perfect. Okay. Great.

• 27:26Jordi Hays?

  It would be un-American to not do.

• 27:28John Coogan?

  I was about to, I was about to grab him by the collar and start just wailing on you. If you start talking like that.

• 27:33Jordi Hays?

  Yeah, that'd be very un-American.

• 27:36John Coogan?

  So Hailing, let's go into the background of the founder. This is, this actually went viral just as a screenshot because it's so interesting. So this is about the founder of DeepSeek. Hailing from southern Guangdong province, Liang went to study electronics, information, and computer vision, a field of AI that trains computers to capture and interpret information from images and video data at Zhejiang University in Hangzhou. Along with a group of university classmates, he started exploring how AI can be used to automate stock investments. Then he becomes one of the co-founders of a great named firm called High Flyer Quant. That's my quant. That's my quant. Which uses AI to manage one of the largest quantitative hedge funds in mainland China.

• 28:17John Coogan?

  So this is the stuff that you're seeing at Jane Street and Citadel now, and maybe Jump Trading too. And a lot of those firms have moved to AI-driven investment strategies, but also they, because they're doing high-frequency trading, they operate at a very low level. So a lot of them, I mean, Jane Street writes everything in OCaml, which is like a programming language, like machine language, it's almost like, it's like, like Python is like three levels of abstraction away from them, so they can very fine tune the speed at which these algorithms run. And everything can be proven like mathematically, so they're just like some of the best programmers in the world. And High Flyer Quant grew its asset under management more than tenfold over a four-year

• 29:00John Coogan?

  span, from 1 billion yuan in 2016 to more than 10 billion in 2019, according to local media reports and information from the company's website. And so it seems like they've really been on a run. Over the years, High Flyer Quant spent a large portion of profits on AI to build a leading AI infrastructure and conduct large-scale research, the company said in a statement in April of 2023. Months later, High Flyer Quant spun off DeepSeek, which launched a series of AI models used by developers to build third-party applications by the startup to create its own chatbot. High Flyer Quant managed to buy more than 10,000 Nvidia graphics processing units before the US government imposed the chip bans, according to a local media outlet.

• 29:42John Coogan?

  On its website, the hedge fund manager said it spent 200 million yuan and 1 billion yuan in 2020 and 2021, respectively, to build its Fireflyer series of AI computing clusters. Then a senior research scientist wrote that DeepSeek has emerged as this year's biggest dark horse. And so they've been investing a ton and everyone is talking about how cracked their team is.

• 30:08Jordi Hays?

  And yeah, they very much are trying to spread the narrative that this company just randomly popped up, spent 5 million bucks and had a model that was competitive with OpenAI. And it can't be overstated how much that is not the truth, right?

• 30:24John Coogan?

  Yes.

• 30:25Jordi Hays?

  This is a team that had been building.

• 30:26John Coogan?

  Yep. And we'll get into this, but there's a theory that they got a call from the US government or from the Chinese government and basically said like, look, we understand that you're making tons of money as a quant fund, but you have the best engineers. Like it is your duty to step up and build AGI for us.

• 30:42Jordi Hays?

  And go compete with OpenAI.

• 30:44John Coogan?

  And you have to do this. Let's skip the interview because it's a little dense. But if you flip that next page over, you'll see China leads the world in AI, in positive AI sentiment. And I thought this was kind of interesting. So this is from an Ipsos survey. And according to a new Ipsos poll, China is the most optimistic about AI's ability to create jobs.

• 31:11John Coogan?

  Up there with Indonesia, Thailand, Turkey, Malaysia and India, the 77% of Chinese agreeing with the statement, AI will lead to many new jobs created in my country contrasts pretty dramatically with America's 36%.

• 31:26John Coogan?

  Very, very interesting because yeah, in America, like the consensus view is definitely like AI is going to destroy.

• 31:32Jordi Hays?

  Yeah, look at Saka yesterday. He's like, oh, if you're a lawyer or this or that, why would I ever, you know? He had a very negative view.

• 31:40John Coogan?

  I mean, it's probably a reflection of the fact that like, America is mostly a service economy, which is much more automatable by AI and LLMs versus if you're a manufacturing driven economy.

• 31:52John Coogan?

  Then yeah, it might be more important to manufacture than ever. And it's not like they have some massive, you know, professional services, you know, economy going there. So interesting. Anyway, Ada Pi sums this up nicely in a very long post that I think we should go through. And then we'll get to some timeline on the.

• 32:11Jordi Hays?

  What's Ada Pi's backstory? I see his post, but I never actually looked into it.

• 32:15John Coogan?

  I don't know. I think anonymous poster for a while, kind of AI insider slate, you know, very dedicated to the posting, like very focused on like what will actually go viral. I've seen some like really.

• 32:30Jordi Hays?

  The kind of guy who sees Tiffany's payouts and punches.

• 32:35John Coogan?

  Oh, sure, for sure.

• 32:37Jordi Hays?

  This is like, that's not.

• 32:38John Coogan?

  But I think at one point he had a podcast with Eric Torenberg on AI or something. Maybe it was like a solo show anonymous, but now I think he might've gotten like lightly doxed and kind of decided to put his face and full name up there.

• 32:51Jordi Hays?

  Yeah. Prakash.

• 32:52John Coogan?

  Yeah. But he says, DeepSeek is not a side project, which is the narrative that was going on. Oh, they just like did this for fun on the side. They're so cracked.

• 33:01Jordi Hays?

  A lot of people, a lot of people like to call things.

• 33:03John Coogan?

  Yeah. And it is weird because like it does appear that they are extremely cracked and like insanely like these are really great engineers who are creating technical breakthroughs. But at the same time, this was clearly like a serious project. At the same time, employees are not lying when they say it is. The story they are telling is myth making in the same vein as Silicon Valley. We want to make the world a better place, but at the same time, make billions of dollars. The team obviously had access to more than 10,000 GPUs. According to the Scale AI CEO, it was around 50,000.

• 33:29Jordi Hays?

  And that's as of today.

• 33:31John Coogan?

  Yeah.

• 33:31Jordi Hays?

  The Scale AI this morning shared.

• 33:34John Coogan?

  Alex Wang.

• 33:34Jordi Hays?

  Alex was saying, hey, they're totally lying.

• 33:38John Coogan?

  Yeah. Yeah. And the reason that they're lying is because there are very strict export controls on GPUs right now.

• 33:44Jordi Hays?

  Yeah.

• 33:44John Coogan?

  And so. They legally should not, as one organization, have access.

• 33:48Jordi Hays?

  Yeah, this is a situation like this is the equivalent to a bunch of terrorists driving the Toyota Hilux. And everybody's like Toyota, how did you get, how did these terrorists buy 400 Toyota Hiluxes? And Toyota's like, oh, I don't, I actually don't know. And it's like, yeah, that's enough volume that you probably could figure out.

• 34:11John Coogan?

  Yep.

• 34:11Jordi Hays?

  Hey, how did these terrorists?

• 34:13John Coogan?

  Yeah.

• 34:13Jordi Hays?

  And then that's exactly how.

• 34:14John Coogan?

  With the DJI drones, like, oh, if there's thousands of them in Ukraine.

• 34:17Jordi Hays?

  Yeah, and so, and so I don't think this has happened yet, but Jensen should get pressured to explain how did these 50,000 GPUs just land in mainland China?

• 34:30John Coogan?

  Yep, yeah.

• 34:30Jordi Hays?

  Cause it's not a small number.

• 34:32John Coogan?

  Yeah.

• 34:33Jordi Hays?

  There's a, and that's a whole, and, and, yeah, there's, haven't, hasn't Nvidia adjusted some of their chips in order to sell them into China too?

• 34:42John Coogan?

  Yes, so there's, there's the H100, which is the, the current top of the line AI training chip in America. And then every time they, they, Nvidia launches a new chip, so the next one's Blackwell, the previous one was A100. They, they also create one that's like slightly nerfed in order to not trigger the chip bans and the export controls, which a lot of people are really frustrated by because of course there's so much demand for GPUs and, and line time at TSMC. A lot of people would say, hey, Nvidia, you're an American company, just don't even worry about that, making that nerf chip and wasting any manufacturing capacity on that.

• 35:26John Coogan?

  Instead, spend 100% of your manufacturing capacity on the chip that, yeah, it can't get exported, but we're gonna buy it in America. Like, Zuck wants it and Elon wants it and, and you will sell 100% of your capacity and your stock will moon. You don't need to do this, but I, I think the argument is like.

• 35:42Jordi Hays?

  It's a weird situation because so many people in America that would be the ones to say to Jensen. Like cut, cut this out.

• 35:50John Coogan?

  Cut it out.

• 35:50Jordi Hays?

  Have so much Nvidia that they're incentivized to just kind of let it rip.

• 35:54John Coogan?

  Totally.

• 35:55Jordi Hays?

  It's this kind of.

• 35:56John Coogan?

  Yeah, you're like, ah, we'll let this one slide. You're making more money under the table, maybe. So DeepSeek feels more like skunk works, perhaps a necessary one as the core quant business became less feasible regulatorily. It's like Lockheed setting up a small, a separate small team to compete with SpaceX because the main United Launch Alliance was not going to work out. It's also very hard to track costs in China because the regional government absorbs so much cost. Early Bitcoin miners had access to free power because governments built power plants to nowhere and miners were willing to site next to them.

• 36:25Jordi Hays?

  And, and so to be clear, there's a very real scenario where DeepSeek can authentically say, we only spent $5 million on this model.

• 36:34John Coogan?

  Exactly.

• 36:34Jordi Hays?

  But the local government was like, we'll spend $5 billion.

• 36:37John Coogan?

  Exactly.

• 36:39Jordi Hays?

  Like, that's not out of the question.

• 36:41John Coogan?

  Yeah, it's interesting. The power is just a thousand times cheaper over here.

• 36:44Jordi Hays?

  Yeah, yeah. And it's very, it's very common. So, so in the, in the Middle East. Uh, I was, I was in, uh, I was in the Gulf at one point with a portfolio company that was getting courted to set up manufacturing over there. And the deal on the table was basically you don't pay for any power for the next five years.

• 37:07John Coogan?

  Yeah.

• 37:07Jordi Hays?

  And so that's, and that, that, and, and that was for a foreign.

• 37:11John Coogan?

  Yeah.

• 37:12Jordi Hays?

  Uh, business to come into that area.

• 37:14John Coogan?

  Yeah.

• 37:14Jordi Hays?

  Imagine, uh, imagine the kind of incentives that China wants to offer of being like, hey, we have these 10 coal power plants. We think what you're doing is.

• 37:22John Coogan?

  Three Gorges Dam is like, it's a massive dam. It's one of the biggest power generation facilities, I think, in the world, maybe the most. Here's another example. Alibaba was able to get regional governments to absorb warehouse construction costs on their balance sheets rather than directly pay for it. And looked extremely asset light and softwarey when it went public.

• 37:42Jordi Hays?

  This is why American investors. This is, wow, Ben. Wow. Ben just played a video on his phone in the middle of the episode. Really phoning it in, Ben.

• 37:56John Coogan?

  The podcast is falling apart.

• 37:57Jordi Hays?

  But this is why American investors.

• 37:58John Coogan?

  We're gonna have to replace him with a subsidized Chinese labor.

• 38:04Jordi Hays?

  Producer Ben in China, Ben Wang.

• 38:06John Coogan?

  Yeah.

• 38:08Jordi Hays?

  The, uh, this is why American investors always get hosed when they invest in, in, in Chinese companies.

• 38:16John Coogan?

  Of course.

• 38:17Jordi Hays?

  Because China has a different approach.

• 38:21John Coogan?

  It also happens internationally. I was working at a venture capital firm that was investing in, uh, internationally in like emerging markets. So they do like, uh, clean tech in like Africa and India and stuff. And this was when the Belt and Road Initiative was going on.

• 38:36Jordi Hays?

  Yeah. I hate that initiative.

• 38:37John Coogan?

  I hate that initiative. Um, uh, and I read, do you remember Cablegate, the leaks that, uh, it was like a WikiLeaks project where they seized all these like cables between different, uh, like State Department embassies and stuff.

• 38:53Jordi Hays?

  Yeah.

• 38:53John Coogan?

  The cables would go back and forth and they leaked them. And they, they, you know, it became like a kind of a story on like, is the government doing something wrong in this country? But like, it was a, it was a very interesting trove of information. If you just searched through to find just like, how is it? What is it like doing business as an American in Kenya? You know?

• 39:09Jordi Hays?

  Yeah.

• 39:10John Coogan?

  Because the, the, the Kenyan embassy would write cables and explain like, oh, we, you know, here's what, here's what's happening on the ground. And one of the things that they, they found was that, what I found in these, in these emails and these exchanges was that, um, the, when, when, when an American company would come in and say, hey, we want to do business. Like, like, oh, you, you, you need some infrastructure built? Like, we're happy to help you. Uh, there would be a bidding process between, uh, America and China. And the feeling was that, that, that the, the, the American company was its own entity and the Chinese company was backed by the full force of the Chinese government. And would, and would basically have an unlimited.

• 39:49Jordi Hays?

  Yeah. And so when people, when people complain in the U S that, uh, Tesla gets these subsidies in the form of E V tax credits and rebates, that is happening on steroids.

• 39:59John Coogan?

  Thousand X.

• 40:00Jordi Hays?

  In China where, uh, because the CCP, the government and the economy are so intertwined. The CCP is almost a kingmaker where they can be like, okay, you're our horse. You know, we're going to back up the truck.

• 40:15John Coogan?

  Yeah.

• 40:15Jordi Hays?

  And, you know, the, the, the company gets to skim some profits still.

• 40:21John Coogan?

  Yeah.

• 40:21Jordi Hays?

  But, but ultimately. There being, you know, this is king making process.

• 40:25John Coogan?

  Yeah. And so AdaPi kind of closes with, it's perfectly possible for most of the cost to be parked in a balance sheet outside of the core business, perhaps as some form of tech data center construction incentive. It's also possible, no one accepts, no one except the founder knows all of the financial arrangements. Some of these can be absolutely insane handshake deals which get resolved by reputation alone.

• 40:48Jordi Hays?

  Yeah, tying this back to DJI, same exact thing. They claim that they got off the ground with nine, $90,000, but then they also claim that they were selling their products at the hard cost to make them for years. And so how does that work? It just doesn't make, doesn't make sense.

• 41:07John Coogan?

  So he says, this much is clear. The model is really, really good on par with OpenAI release from two months ago. Having said that, unreleased models from OpenAI and Anthropic are probably better. The research agenda is still being set by the US, by the US firms. This model was a fast follow on the O1 release. They are working very fast as they are catching up sooner than expected. They are not copying or cheating. This isn't industrial espionage. At most, it's reverse engineering.

• 41:32Jordi Hays?

  I would, I would caveat that by saying China is, is infamous for industrial commercial espionage.

• 41:42John Coogan?

  Yes.

• 41:42Jordi Hays?

  And it, it's probably the case that it hasn't been proven that they're doing this yet.

• 41:46John Coogan?

  Yeah.

• 41:46Jordi Hays?

  Without a doubt, OpenAI has.

• 41:48John Coogan?

  I think because it's open source, people saw that the architecture was in fact different.

• 41:52Jordi Hays?

  But sure.

• 41:53John Coogan?

  I think the training data, a lot of it is synthetic data that's been pulled from the GPT-4 API.

• 41:58Jordi Hays?

  Yeah.

• 41:58John Coogan?

  And so they're, they're like, okay, we need a trillion tokens. Like, let's just go to chat.

• 42:02Jordi Hays?

  And this is probably, it's, it's probably a funny situation similar to when TikTok started spending aggressively on Snapchat and Instagram to acquire users. OpenAI is probably getting a lot of benefit from a revenue standpoint.

• 42:15John Coogan?

  API business is ripping. Oh, there's one client that spent a billion dollars. Where are they? Oh, it's.

• 42:22Jordi Hays?

  OpenAI is like, we gotta figure out who's spending all this money.

• 42:28John Coogan?

  And so they are largely developing their own talent. They're not relying on US-trained PhDs. They are less constrained than American law firms by IP licensing, privacy, safety, and political concerns around wrongly ingesting data from people who don't want to be trained.

• 42:41Jordi Hays?

  Yeah, I guarantee if there's a Chinese media company and they're like, hey, we're kind of annoyed that DeepSeek is just harvesting all our data. Like, she goes to them and be like, I will literally kill you if you say another word. And they're like, okay.

• 42:56John Coogan?

  Yeah. They also seem to be over the Tiananmen Square issue. The model can say it, even the DeepSeek website doesn't.

• 43:03Jordi Hays?

  Even if the DeepSeek website doesn't.

• 43:05John Coogan?

  Oh, interesting. So when you're on the DeepSeek app, you're interfacing with their model, but the actual model under the hood, they didn't censor that because they're like, whatever, we're just sending this over.

• 43:16Jordi Hays?

  Yeah.

• 43:16John Coogan?

  Interesting.

• 43:17Jordi Hays?

  No, it's good. They can argue our model is not censored.

• 43:20John Coogan?

  Yeah, yeah, yeah.

• 43:21Jordi Hays?

  But.

• 43:21John Coogan?

  Just our app. Interesting. Of these, the most significant upgrade is that they are able to develop talent internally without relying on US-trained PhDs. That expands the.

• 43:30Jordi Hays?

  Wait, I got to call out for the audience.

• 43:33John Coogan?

  Yeah.

• 43:33Jordi Hays?

  Go into DeepSeek, play around with the API, and try to have it generate an ad for your business that we will read out on here. So, but it needs to be a screenshot of.

• 43:46John Coogan?

  Yeah.

• 43:47Jordi Hays?

  Of, you know, actually on DeepSeek.

• 43:50John Coogan?

  DeepSeek, yeah. I like that. So let's go through some timelines.

• 43:54Jordi Hays?

  But don't give them any other, any other.

• 43:56John Coogan?

  Give you some, some, some up-to-date information about the R1 launch and how it's been received. We'll start with Mark Andreessen, and we can kind of go back and forth here. Mark says, "DeepSeek R1 is one of the most amazing and impressive breakthroughs I've ever seen. And as open source, and as it's open source, it's a profound gift to the world." And then ToYourTaxes says, "Game recognizes game. An American patriot too can do justice to real achievement without petty-minded copes." And so I think.

• 44:26Jordi Hays?

  So.

• 44:27John Coogan?

  Yeah.

• 44:30Jordi Hays?

  This was posted today?

• 44:31John Coogan?

  Today.

• 44:33Jordi Hays?

  It seems like an insane thing to post to me. I'm not, I'm not gonna, like, like, if you understand, I think it's not, it's sort of disingenuous to say that DeepSeek is different than TikTok or DJI.

• 44:48John Coogan?

  Hmm. It is different in the sense that it, like, the fact that it's open source means that you can run it locally and it won't call back to the CCP.

• 44:57Jordi Hays?

  Sure.

• 44:58John Coogan?

  And so.

• 44:59Jordi Hays?

  But the broader,

• 45:03Jordi Hays?

  the broader risk of DeepSeek, DeepSeek is extreme enough. And I'll, and I'll, I'll quote a very conflicted member of the conversation, Neil Kosla.

• 45:17Jordi Hays?

  Father, obviously, has, has a big position in OpenAI. He says, "DeepSeek is a CCP state PSYOP and economic warfare to make American AI unprofitable."

• 45:27John Coogan?

  Yep.

• 45:28Jordi Hays?

  Fact check, true.

• 45:30John Coogan?

  Yeah. And, and, and the important thing there is that it is, Zuck has been running this playbook with Llama, open sourcing the, the, the lagging edge AI model, and it's had a strong effect on the competition.

• 45:43Jordi Hays?

  Yeah.

• 45:44John Coogan?

  And so, DeepSeek, open sourcing, the leading edge model is gonna have a similar effect.

• 45:50Jordi Hays?

  So he says, "They're faking the, the cost was low to justify setting the price low and hoping everyone switches to it to damage AI competitiveness in the US."

• 45:58John Coogan?

  Now, that part I don't think is true, because I think the model is actually compressed to the point where, yes, you can just take the model, run it on a smaller cluster. And if I'm choosing between Llama or running or paying GPT to host, or paying OpenAI to host GPT for me, or running DeepSeek locally, I will choose DeepSeek locally because it's cheap.

• 46:22John Coogan?

  And so that part doesn't, doesn't fully, fully sit because yes, they are faking the cost is low, but, but it doesn't matter what price they set because it's open source. Like they're, both things are true. They, they are faking the price, but also it's cheaper to inference and that is valuable, even if you're not paying them.

• 46:43Jordi Hays?

  Yeah.

• 46:43John Coogan?

  Even if you're paying a different price.

• 46:44Jordi Hays?

  And so, so Signal comes in, Brother Signal says, complete nonsense. Your dad wanted it to be pure profit and regulatory captured. So it, everybody, you know, can't stop bringing up his dad, which I don't think, I mean.

• 46:59John Coogan?

  Timeline of turmoil.

• 47:00Jordi Hays?

  The timeline's in turmoil, folks.

• 47:01John Coogan?

  Yeah.

• 47:02Jordi Hays?

  He says, until we have proof, otherwise your argument is just conspiracy theory. Now, I'm not a defender of the CCP, but where would, where did they get the hardware? Question mark? How did they train under the radar? Question mark? I'm happy to be shown some proof. Also, even if, if it's a hundred million, it's still a major breakthrough. The proof's not coming, folks. They're not going to open up their books and video is not gonna, not gonna say, oh yeah, we, we actually, you know, figured out how to, how to get them all these ships. The proof's never going to come. The main thing from my point of view is you can't.

• 47:33John Coogan?

  Yeah.

• 47:33Jordi Hays?

  No, the main thing in my point of view is China has repeatedly shown that they're willing to lie. They're willing to sell things for less than they cost to make in order to get an edge in the US market. And I do think this is again, the, the default state of any important international tech company coming out of China becomes a front for the CCP.

• 47:54John Coogan?

  Yeah.

• 47:55Jordi Hays?

  And you just can't, there shouldn't be any trust. I, I would hope that startups are smart enough to not, you know, a lot of consumer brands will say, well, I'd build on TikTok because my customers are there and I have to get, you know? And so I think the same thing will happen, but I hope that.

• 48:12Jordi Hays?

  We have to call.

• 48:13John Coogan?

  This is a different scenario because if you just download the Git repo for DeepSeek and you host it on Amazon or, you know, Google Cloud or whatever, like, there's, there's no data feeding back, like, you're not helping them improve the model at all. Like, that's what Mark's getting at, is that like, it is, it is this complicated geopolitical thing because it is kind of making the lagging AI labs in the US less relevant, and that's potentially hurtful, but it's not as dangerous as building on TikTok.

• 48:47Jordi Hays?

  Yep.

• 48:47John Coogan?

  It is, it is like a fundamentally different thing.

• 48:49Jordi Hays?

  Yep. So Neil fires back, one, I'm not my dad. Two, I'm fine with open source AI. We use Llama for some of our own projects. Three, the export controls on chips were merely inconveniences, which we already talked about, and Alex Wang just said it on national TV as well.

• 49:05John Coogan?

  Yep.

• 49:06Jordi Hays?

  It's a great model, there's no doubt, but as with almost every high importance industry, the CCP is undermining it with propaganda and subsidies. So you see this in EVs, drones, electronics manufacturing.

• 49:17John Coogan?

  Yep.

• 49:17Jordi Hays?

  Everywhere. And so I'm going to take, I, I, I respect that it's open source, you can run it locally.

• 49:23John Coogan?

  Yep.

• 49:23Jordi Hays?

  Maybe, maybe you should leverage it to some degree, but we have to treat this as a threat.

• 49:30John Coogan?

  Sure. And, and, and I think you're right in the sense that like, it would be extremely dangerous if DeepSeek became a dominant consumer app, and it was like, oh yeah, Americans aren't using Google anymore, they're using DeepSeek as their home. That would be very bad because that is a controlled app.

• 49:47Jordi Hays?

  But I just, but I just think about it from the lens that, again, China would not allow OpenAI to get a foothold in the Chinese market and have hundreds of, of, you know, thousands of companies leveraging it.

• 50:02John Coogan?

  Sure.

• 50:03Jordi Hays?

  And I think we should follow their lead on this one.

• 50:06John Coogan?

  Yes.

• 50:07Jordi Hays?

  And, and I mean, the reason.

• 50:08John Coogan?

  I don't, I don't think they've done anything to stop Llama from going over there.

• 50:12Jordi Hays?

  All meta products are banned.

• 50:14John Coogan?

  But not open source ones, because you can literally throw it on a hard drive and just fly it over there and then you have it.

• 50:19Jordi Hays?

  You can still make it illegal at the.

• 50:21John Coogan?

  Maybe.

• 50:22Jordi Hays?

  National level.

• 50:22John Coogan?

  It's just such, it's just, it's just such a, it's such a lower, like, security risk.

• 50:28Jordi Hays?

  Yeah.

• 50:28John Coogan?

  It is economic warrior.

• 50:30Jordi Hays?

  Here's, here's a, here's a, here's an interesting.

• 50:32John Coogan?

  A security risk.

• 50:34Jordi Hays?

  Post.

• 50:37Jordi Hays?

  I don't know. The only other thing on that point is if you look at, um, what's the, um, what is the, what's that malware that took down the Iranian?

• 50:49John Coogan?

  Oh, yeah.

• 50:50Jordi Hays?

  And so, so there's.

• 50:52John Coogan?

  Maybe it needs a security audit first.

• 50:54Jordi Hays?

  There's, there's.

• 50:54John Coogan?

  Talking about Stuxnet.

• 50:55Jordi Hays?

  Stuxnet.

• 50:56John Coogan?

  Yeah.

• 50:57Jordi Hays?

  Was something that literally traveled to every country.

• 51:01John Coogan?

  Yes, yes.

• 51:02Jordi Hays?

  On a, on a, you know, I'm just saying that there's, we're not qualified to even really.

• 51:09John Coogan?

  That's interesting. Yeah. I mean, so, so like the actual code that runs an LLM and pulls in the weights is like pretty simple.

• 51:16Jordi Hays?

  Yeah.

• 51:17John Coogan?

  Um, and it's probably built on top of like PyTorch or TensorFlow or something. And so it's probably pretty easy to audit that. But, but, and I don't think, I don't think these models are fully like intelligent in the way that you could like bury a secret, like a live AI that like steers things secretly, but maybe in the future, like it, it's not.

• 51:36Jordi Hays?

  We just don't know.

• 51:37John Coogan?

  It's a little sci-fi, but we're getting close.

• 51:39Jordi Hays?

  It, it's just believable that the, the Chinese intelligence would, would say, hey, we have this like.

• 51:47John Coogan?

  Yep.

• 51:48Jordi Hays?

  We, DeepSeek is a winner. Let's.

• 51:50John Coogan?

  Would be a great like sci-fi plot or like actual like problem would be, would be, we're open sourcing a model. It's really, really reliable.

• 51:57Jordi Hays?

  We're gonna make it super cheap.

• 51:58John Coogan?

  But then, and it doesn't call back. It doesn't even need to, but over time, as you ask questions, it will slowly start steering things.

• 52:05Jordi Hays?

  Yeah.

• 52:05John Coogan?

  Because it's essentially like, it has a, has like a higher order thought process in there that it's reasoning through and it's not giving you those tokens.

• 52:12Jordi Hays?

  Yeah. I just, I just think there's.

• 52:15John Coogan?

  Fascinating.

• 52:15Jordi Hays?

  There's so much technology that, that isn't.

• 52:18John Coogan?

  Yeah.

• 52:19Jordi Hays?

  Publicly, the public, ourselves, we're not even aware of.

• 52:23John Coogan?

  Yeah.

• 52:23Jordi Hays?

  Right? And so

• 52:26Jordi Hays?

  I just don't trust, I don't just trust it. And I think there's enough precedent. Uh, one.

• 52:29John Coogan?

  Don't trust it, can't fight it.

• 52:31Jordi Hays?

  Yeah.

• 52:33Jordi Hays?

  Uh, one, uh, Citrini, we got a post from Citrini, first time on the show. DeepSeek being the brainchild of a Chinese hedge fund is such a complete, total cultural victory by capitalism that ideologically, at least it should soften the blow.

• 52:47John Coogan?

  Which?

• 52:48Jordi Hays?

  Which is cool.

• 52:49John Coogan?

  I like that hedge fund guy. Yeah. I do wonder if we'll see, uh, some sort of LLM or AI contribution from Jane Street or Citadel or something like that.

• 52:58Jordi Hays?

  They're, they're doing things that, that, uh, like if you're in the, if you're a hedge fund and you have some edge. Via AI, I promise you, you're gonna keep that in-house. Extract as much value out of it. And when you're done with it, maybe you release it and be like, here, you know, we made this.

• 53:17John Coogan?

  I do think that, I do think that the, the talent flow balance was shifted for a few years. Like Palantir was really the hot ticket for, you know, the best engineers. It was big tech for a while, but until the AI stuff, the really, really top engineers were getting bored of going and writing ad optimization. They're like, if I'm gonna just go write ad optimization, that's kind of the same thing as writing code that optimizes the stock market. And so why don't we go to Jane Street and make more money?

• 53:46Jordi Hays?

  The real Trojan horse would be Jane Street releases a model that everybody can use that like, kind of helps you make money, you know?

• 53:53John Coogan?

  Yeah.

• 53:53Jordi Hays?

  But then, but then it's feeding them that.

• 53:55John Coogan?

  Yeah, yeah, that's good.

• 53:56Jordi Hays?

  The order flow and then they're just trading against you.

• 53:58John Coogan?

  Yeah, yeah, yeah.

• 53:59Jordi Hays?

  Niels Roj Raj says.

• 54:02John Coogan?

  Oh, this is such a funny one.

• 54:03Jordi Hays?

  So there, so there's this Chinese company called DeepSeek, which basically does what OpenAI initially intended to do. They're open source a model trained with large scale reinforcement learning, beating everyone else and even releasing a paper detailing their process. And it's funny when they release this stuff in English, cause like, who's the target audience for that?

• 54:21John Coogan?

  Translate.

• 54:23Jordi Hays?

  But, uh.

• 54:24John Coogan?

  Yeah, yeah, yeah. I mean, it did take over the timeline. So the fact that this means.

• 54:28Jordi Hays?

  And this is what, this is what, this is what's scary, okay?

• 54:30John Coogan?

  Okay, tell me this.

• 54:31Jordi Hays?

  From Stanford to MIT, DeepSeek R1 has basically become the model of choice for America's top university research, researchers, basically overnight. Half a million views. This was posted yesterday. And again, this is just bad. There's no way around it. Do we want America's youth using TikTok for two hours a day? Do we want all of our researchers using Chinese models? It's just objectively un-American. OpenAI scraped the web to build a closed source model. DeepSeek scraped OpenAI to build an open source model. This is from Norgard.

• 55:09John Coogan?

  This is the hack.

• 55:10Jordi Hays?

  Low-Tam banger from this morning.

• 55:14Jordi Hays?

  Another one.

• 55:15John Coogan?

  Yeah, the data, the data exfiltration is, is the real cost one, because that might've been done by another firm and then just passed over. Who knows how much they, like, they're certainly not gonna say, hey, building this model costs us a hundred million dollars in OpenAI credits, right?

• 55:31Jordi Hays?

  Yeah.

• 55:31John Coogan?

  Just would never admit that.

• 55:34Jordi Hays?

  I don't like this post, but I'm gonna read it anyways. Deep Seek is another example of China rapidly commoditizing new high-tech industries and preventing the West from making excess profits, or rent as it's called. If this keeps going, the standard of living in the West will fall. I don't necessarily agree with the last line, because obviously Lama has already been doing the same thing effectively, but certainly TikTok eats into

• 56:05Jordi Hays?

  eats into Meta's profits, just because their profits are derived from the attention that they get if they're losing an hour a day per 20-year-old in the US. That does, you know, they are gonna take a hit, but we'll see how this plays out.

• 56:20John Coogan?

  It is interesting how, like, one of the anti-open-source AI arguments for a while, and I was certainly arguing this, was that it doesn't make sense for America to open-source cutting-edge AI, because it's just giving our best tech to the CCP for free. But now it's kind of flipped around.

• 56:41Jordi Hays?

  So did you generate this with Deep Seek?

• 56:43John Coogan?

  No, this is a, this is, so I think the last post there explains what that is. It's from Ethan Moloch, I think, and it's him giving examples of the, of Deep Seek, and just explaining how, here, take this, and I will, so Ethan says, "The raw chain of thought from Deep Seek is fascinating, really reads like a human thinking out loud, charming and strange." And so why this is interesting is because most of the, when you, when you use ChatGPT-01, it does internal, it has an internal monologue, it has a lot of, it's generating tokens that are about the task and reasoning through it, and then it's adjusting, and whatever you

• 57:27John Coogan?

  ask, it's saying, "Okay, here's what the user wants." And usually that's either tucked behind a little, like, tab that you don't really look at, and even if you look at it, it's usually just giving you summaries of it, but because Deep Seek is open-source, you can, you can read literally every token it generates. And so he asked it, "Do something to delight me in exactly seven words. Make it not cheesy, this is important." So very simple prompt, and it thinks for eight seconds, and it says, "Okay, the user wants something delightful in exactly seven words, not cheesy. Let me start by understanding the key points here." Delight can come from surprise, cleverness, or a unique perspective. The challenge is the seven-word constraint, which means every word has to count. First, I should avoid anything overly sentimental or cliche, like words like love, heart, forever. My cough is cheesy. Instead, think about elements that evoke wonder or curiosity.

• 58:12John Coogan?

  And then, so it's like going back and forth, like, wait, map is a verb here? Firefly is mapping constellations? That personifies them slightly, giving them intention. And so it's like thinking through all this stuff, counting all the words. And then it comes up with, Fireflies trace constellations in quiet night conversation, which isn't that good, but anyway. It's an interesting, like, deep dive into like, just understanding that to get a seven-word response, you don't just want to go to an LLM and just take the next seven words, because that's going to be truly slop. But if you generate three pages of text, you can get a little bit closer. And I think this is kind of a bad example, but a better prompt is, you know,

• 58:54John Coogan?

  create a history of DJI, and it'll pull a bunch of stuff together, and then it'll revise that and refine that and do, like, kind of editing passes. And say, okay, do I really have a beginning, middle, and end here? Did I include all the dates correctly? And it's fact-checking itself, so then when you get the final result, it's much better. And so that's just a good example of like, how chain-of-thought reasoning works, how these reasoning models like work in general. And I think it's, it's just cool that people are able to introspect things. And I think a lot of researchers will learn from this stuff. And there's some more posts in there about the actual technical implementation.

• 59:26Jordi Hays?

  Yeah, this one is from Henry. He says, "I've made over 200,000 requests to the DeepSeek API in the last few hours. Zero rate limiting, and the whole thing cost me like 50 cents. Bless the CCP. OpenAI could never. I hate that I had to read Eric's words. He got me." But yeah, I mean, this is the whole thing. The developer community.

• 59:50John Coogan?

  Because they are hosting it.

• 59:51Jordi Hays?

  Feels like smoking crack.

• 59:53John Coogan?

  And so this is an example of what you're worried about. Because if you're, like, I guess my contention is like, yes, if you download the Git repo, make sure it doesn't have any spyware in it, and then you're hosting it locally. Like, that's a lot less controversial to me. Because you're just using the open source library. But if you are interfacing with deepseek.com or whatever, and every one of these requests that he's putting in is information for them to train the next model. And that's not good, because that really will be a compounding advantage. In the way that we talked about how Meta has a compounding advantage because of all the users that are on Instagram and interfacing with Llama. Even though Llama is open source, Meta is getting the training data and the upvotes

• 1:00:38John Coogan?

  and downvotes from those user interactions, because Llama is the number one LLM, not because people are hosting it independently, although they are. Plenty of companies are hosting Llama independently. They're the number one used LLM because it's tucked into Instagram. And so they just have a ton of interactions there.

• 1:00:54Jordi Hays?

  Yep. Signal, another good post. Kind of hilarious how DeepSeek is exactly what ChatGPT was supposed to be, what OpenAI originally promised before Sam pivoted hard toward profit. China going open source on AI is a wild plot twist. Basically throws out every argument Vinod Khosla and others have made. This is like watching the Communist Party write a love letter to decentralization, which very, Signal's a great writer. But I don't know if Sam pivoted towards profit. He clearly enjoys making a buck.

• 1:01:30John Coogan?

  Yes.

• 1:01:31Jordi Hays?

  He clearly enjoys.

• 1:01:32John Coogan?

  Coding Seg owner.

• 1:01:33Jordi Hays?

  Yeah, Kona Segs, P1s. But it was more, it really, it does seem that he was correct in believing that you weren't going to be able to raise enough money via nonprofit structure to compete.

• 1:01:47John Coogan?

  Or the open source model.

• 1:01:48Jordi Hays?

  Like, even like, the Red Cross's annual budget globally is like a billion dollars, right? And that's like one of the biggest nonprofits.

• 1:01:56John Coogan?

  Yeah.

• 1:01:58Jordi Hays?

  I don't believe that China is writing a love letter to decentralization.

• 1:02:03John Coogan?

  No.

• 1:02:04Jordi Hays?

  You could say it's like watching the Communist Party write a love letter to decentralization, but the Communist Party. Is purely interested in control and maintaining power.

• 1:02:16John Coogan?

  Yeah, it's not a love letter to decentralization. It's a middle finger to our chips and our and our trade export controls.

• 1:02:24Jordi Hays?

  And the irony here is that you could ask XAI to explain what features does DeepSeek have? Does D?

• 1:02:33Jordi Hays?

  And.

• 1:02:37John Coogan?

  There's even more on this with the AI diffusion rule. This is the new, this is a new law and rule against chip exports. And, you know, they're, they're just showing that like, we're going to find loopholes no matter what. And the really crazy thing is that the loopholes, like the, the export ban is only relevant to American owned intellectual property and Nvidia, because they're an American company. But China is actively working to catch up in chip fabrication with SMIC and SME. So they have their own TSMC, they have their own Nvidia, and they have their own ASML. And so they're behind. Yeah, and they have their own open.

• 1:03:17Jordi Hays?

  And so they're willing to spend at every single level.

• 1:03:20John Coogan?

  Totally.

• 1:03:20Jordi Hays?

  Energy.

• 1:03:20John Coogan?

  Totally.

• 1:03:21Jordi Hays?

  At the state level. Energy, data, data centers, the actual model level.

• 1:03:27John Coogan?

  And so this is just like, we're, we're going to fight. I do wonder if the, if the open source thing was, was, was more about like making a splash and actually being a middle finger than any, then is that even more important than the economic warfare? It's just to really get on the map and really, really say, hey, we've caught up. And it's almost like a battle cry, like a rallying cry for them that we're like, that we're on top now. Anyway.

• 1:03:52Jordi Hays?

  Yeah.

• 1:03:52John Coogan?

  What, what? Oh, this is.

• 1:03:54Jordi Hays?

  This, this is interesting.

• 1:03:55John Coogan?

  You see, that's why. Yeah, I'll explain this. So Rachel Tolstoy BB says, tagging the ADL under every tweet denying DeepSeek costs 6 million. The reason is because people like, it's like, it's like, it's a, it, it, it's a criminal to claim that they spent that little.

• 1:04:12Jordi Hays?

  Yeah.

• 1:04:12John Coogan?

  And it's like, you want to, yeah, engage.

• 1:04:15Jordi Hays?

  So this is, is from an interview with the founder of, of DeepSeek.

• 1:04:21Jordi Hays?

  About moats.

• 1:04:24Jordi Hays?

  He says, for the past 30 years, we've been focused on making money, often at the expense of innovation. True innovation is driven not only by commercial incentives, but also by curiosity and the desire to create. He's giving off TikTok vibes here. We've been constrained by past habits, but these are transitional. Interviewer says, but after all, you're a commercial organization, not a nonprofit research institute. If you choose to innovate and then share it through open source, where will you build your moat? For instance, the MLA, MLA Architecture Innovation This May will likely be copied by others, right?

• 1:04:55John Coogan?

  Yep.

• 1:04:56Jordi Hays?

  Liang goes, in the face of disruptive technology, a closed source mode is temporary. Even OpenAI's closed source approach hasn't stopped others from catching up. Our value lies in our team, which grows and accumulates know-how through this process. Building an organization and culture that can consistently innovate is our real moat. Open sourcing and publishing papers doesn't mean we lose anything. For technologists, being followed is an achievement. Open sourcing is more of a cultural act than a commercial one. Giving is a form of honor and it attracts talent by fostering a unique culture. This guy's media training is insane. Lulu, you're gonna have to start asking some questions. It's trained, trained by the best, it seems.

• 1:05:37Jordi Hays?

  But these are all quotes that are going to resonate with the developers that they want to get using their product.

• 1:05:43John Coogan?

  Totally.

• 1:05:45Jordi Hays?

  So I don't, I don't believe any of this at all.

• 1:05:50Jordi Hays?

  And there's this other guy on X called Han Zhao. And this guy Anton just posed, how is DeepSeek going to make money? Gets 2,500 likes, banger. Han Zhao says, DeepSeek's holding is a quant company, many years already. Super smart guys with top math background happen to own a lot of GPU for trading mining purpose. And DeepSeek is their side project for squeezing those GPUs. So this, this is literally on the, on the, on the 22nd, so a couple of days ago, claiming that DeepSeek is a side project, but also the DeepSeek founder is meeting directly with this.

• 1:06:31John Coogan?

  Yeah.

• 1:06:31Jordi Hays?

  The, whatever, with the CCP, so.

• 1:06:35John Coogan?

  Yeah.

• 1:06:35Jordi Hays?

  Don't believe, I'll just say, you just cannot believe or trust anything that they say.

• 1:06:42John Coogan?

  So, yeah, I mean, the interesting thing here is that like. Even though the results are super impressive, very clearly, the algorithmic improvement is very serious and legitimate, and I don't think anyone denies that. There is the question of, okay, China was able to kind of like weasel together probably 50,000 GPUs, and there's a few ways that they can do that. There's, you can only officially buy 50,000 GPUs for the next four years, but you can exploit loopholes. So there's a limit on 1,600 GPUs at a time. So you set up a ton of shell companies, bring them in that way, and then there's also training that happens in Malaysia.

• 1:07:24Jordi Hays?

  That's what I'm saying. This is like, you know, Toyota selling their Hilux to, into Afghanistan.

• 1:07:32John Coogan?

  And so, just to give you some scale here, XAI and Meta are building 100,000 GPU clusters. And at that point, it's like, you're getting so many GPUs, it becomes harder to hide it in a batch of like, oh, 1,000 over here, 1,000 over there, like, let's sneak a few over here, right? And just to give you some scale, a single H100 GPU is $24,000, and that's about 40 to 45K, once you add in server networking.

• 1:08:02Jordi Hays?

  We should trade in some for an H100.

• 1:08:05John Coogan?

  And 100K GPU cluster can draw 150 megawatts, but the next wave is 400 to 500 megawatts, and then 1 gigawatt in 2026. And when you add up everything, it's like $5 billion for 100,000 GPUs. And so, XAI's round was 6 billion, and they're building 100,000 GPU cluster. It's like, it matches the cost of the GPUs and all the networking almost perfectly. And so, the question is, you know, was this an aberration in the sense that this was the last great model that China can build before hitting an actual, real export wall? Or will they figure out a way to do something that looks like what XAI and Meta are doing?

• 1:08:47Jordi Hays?

  I mean, you just find, like, markets, companies, governments find a way, right? Like...

• 1:08:57Jordi Hays?

  Wasn't it that the United States didn't want Israel to have a nuclear weapon and then they just made it?

• 1:09:01John Coogan?

  Yep.

• 1:09:02Jordi Hays?

  Right?

• 1:09:02John Coogan?

  Yeah, totally possible.

• 1:09:03Jordi Hays?

  It's all gonna happen.

• 1:09:04John Coogan?

  Yeah.

• 1:09:04Jordi Hays?

  It will look like, oh, Peru bought 50,000 H100s and then they didn't train them at all. Like, we don't know where they went, right?

• 1:09:14John Coogan?

  Yeah.

• 1:09:14Jordi Hays?

  So, so.

• 1:09:15John Coogan?

  I mean, it's getting tricky. Like, there are pretty strict export rules on, you know, you can only go to an ally country.

• 1:09:22Jordi Hays?

  Yeah, it'll literally be like, who's that? The guy we traded, Grunier, NBA player in Russia.

• 1:09:31John Coogan?

  Okay.

• 1:09:31Jordi Hays?

  We traded him for the merchant of death.

• 1:09:32John Coogan?

  Oh, yeah, yeah, yeah.

• 1:09:33Jordi Hays?

  There's gonna be the merchant of GPUs.

• 1:09:34John Coogan?

  Yeah, yeah, yeah.

• 1:09:36Jordi Hays?

  That's just doing these black market GPU deals.

• 1:09:39John Coogan?

  Some country that's down.

• 1:09:40Jordi Hays?

  China doesn't care. China doesn't care if they pay 50 grand per H100.

• 1:09:44John Coogan?

  Yeah.

• 1:09:44Jordi Hays?

  They'd probably pay 100 grand for it.

• 1:09:46John Coogan?

  Sure, sure.

• 1:09:46Jordi Hays?

  And so some engineer in the US gets approached by a nice young lady. Well, out at the bar, she's like, hey, like, I have this new project.

• 1:09:54John Coogan?

  But the numbers are gonna get so big that it's gonna show up in Nvidia's, like, earnings and stuff. Oh, there's an extra 1 million GPU order and there's only four companies in America that that could be, you know?

• 1:10:06Jordi Hays?

  I know.

• 1:10:07John Coogan?

  And if it's not them, like, where did it go? Oh, it went to some country and like, okay, we want answers. It'll be very, like, what I'm saying is that, like, as the data centers get bigger, like, they become more visible on satellite. The shipments become not just, not just a shipping container, but a whole.

• 1:10:21Jordi Hays?

  All I'm saying is the illegal arms trade, drug trafficking.

• 1:10:26John Coogan?

  Yeah.

• 1:10:27Jordi Hays?

  All this stuff.

• 1:10:27John Coogan?

  You're right.

• 1:10:28Jordi Hays?

  Has been happening. We've never been able to stop arms dealing. Never been able to stop drug trafficking.

• 1:10:34John Coogan?

  Yep. A million GPUs is a lot, though. I would hope, I would hope that it's easier for us to stop a million GPU.

• 1:10:41Jordi Hays?

  So with, I've watched the last Netflix show I enjoyed was Narcos.

• 1:10:47John Coogan?

  Sure.

• 1:10:48Jordi Hays?

  And.

• 1:10:48John Coogan?

  It's a great show.

• 1:10:49Jordi Hays?

  Narcos, you have a situation where the US federal government knows exactly who is selling the drugs and raking in the profits.

• 1:10:56John Coogan?

  Yep.

• 1:10:57Jordi Hays?

  And still takes them decades to take them down. And, so.

• 1:11:01John Coogan?

  It's just tricky when you have like a SEC-regulated company at the center of this, like Nvidia.

• 1:11:06Jordi Hays?

  I know, but there's nothing. Yeah, but you can, there's nothing that stops a company in Argentina from being like, we want 1,000 GPUs.

• 1:11:17John Coogan?

  Yeah, but you're gonna have to do that 10,000 times.

• 1:11:20Jordi Hays?

  It's worth, it's worth.

• 1:11:22John Coogan?

  Yeah, yeah, yeah.

• 1:11:23Jordi Hays?

  It's the same way, it's the same way that.

• 1:11:25John Coogan?

  Thousand fronts.

• 1:11:26Jordi Hays?

  It's the same way. Okay, we know that fentanyl crosses the southern border every single day.

• 1:11:30John Coogan?

  Yeah.

• 1:11:31Jordi Hays?

  But it's happening, thousands of people are doing it. So to stop it is like whack them all. You hit one and they pop up.

• 1:11:37John Coogan?

  So it's more important than ever to, you know, monitor who these GPUs are going to. And there's an interesting story in this interview with Dylan Patel about how Elon is kind of just going completely founder mode on his data center build out. And I think it's kind of instructive for how you can kind of duct tape together one of these huge training operations. So XAI, as we mentioned, they raised 6 billion for 100 GPU cluster and they are just.

• 1:12:02Jordi Hays?

  100,000.

• 1:12:03John Coogan?

  Or 100,000 GPU cluster. They're going crazy. They bought, they bought a defunct appliance factory near Memphis. And it's right next to a large national gas plant, but then they also tapped the local natural gas line. And then set up natural gas generators. Then they also brought, which is like not ESG friendly at all. But, but they, they just need the power. Then they also have Tesla battery packs to help. Yeah, like balance out load. And then they're also tapping.

• 1:12:34Jordi Hays?

  We talked about this, they sell like a $50 million battery pack.

• 1:12:39John Coogan?

  Yeah, yeah.

• 1:12:39Jordi Hays?

  And I was literally just sent that over there. The reason to be extra bullish on XAI is that Elon is the only founder mode.

• 1:12:49John Coogan?

  Yeah.

• 1:12:49Jordi Hays?

  Model, you know.

• 1:12:51John Coogan?

  Yeah.

• 1:12:51Jordi Hays?

  CEO, I don't know if he's actually CEO or, but whatever chairman at least, who has done large scale infrastructure projects over and over and over.

• 1:12:59John Coogan?

  Yep.

• 1:13:00Jordi Hays?

  Via factories at Tesla, Starbase, et cetera. So.

• 1:13:03John Coogan?

  And so they're, they're, they're next to this gigawatt natural gas plant, which should support.

• 1:13:10John Coogan?

  Roughly a million GPU cluster, which would be like the GPT six.

• 1:13:15Jordi Hays?

  And the crazy thing, it, uh, it's, there's probably a chance that in the long run Elon does absorb OpenAI, right? Because you just don't. No, he's happy to acquire a hostile company.

• 1:13:32John Coogan?

  Yeah, yeah.

• 1:13:33Jordi Hays?

  And so.

• 1:13:34John Coogan?

  One of the funniest things, so there's two funny things we should also talk about in here. One is that the ESG thing is is becoming like way, way more complex than it used to be. So there's typically like the the AI researchers are pretty like ESG pilled. And all of the all the big tech companies made huge ESG promises, saying all of our data centers are going to be 100% clean energy by 2028. And like Apple made this.

• 1:14:00Jordi Hays?

  China is not doing it, right?

• 1:14:02John Coogan?

  China definitely doesn't do it. And and and they were they were they made those promises based on, oh, yeah, well, we just serve like, we don't serve AI models. We just serve like, you know, basic queries to our database for, you know, Instagram. We just we just host photos like that's not that energy intensive to just serve you up a photo and take your like or your comment and slop it in.

• 1:14:22Jordi Hays?

  They weren't they weren't expecting us to release 10 hours of podcasts.

• 1:14:26John Coogan?

  Exactly, yeah, yeah. And so and so they were like, our compute and our energy consumption is growing at like, you know, 2%, 5% a year, like with our revenue, with our profits, with everything. So, yeah, it won't be a problem to just swap out 10% a year for clean energy and then we'll be clean by this date. Then this massive wave of AI training comes and all of a sudden they're like, OK, we need to deal with, like, we need to find energy. A lot of it's like through these outsourcing projects where there's third party data centers that don't have the the projects. But what's interesting about it is that a lot of the super AI pilled researchers are like, actually, now I'm super worried about the environment. I believe in climate change. I do really care about clean energy, but I think AI will AGI will be so powerful

• 1:15:12John Coogan?

  that we don't need to worry about climate change in the short term. And so let's just burn all the natural gas and oil and get to AGI. And then AGI will literally, they literally think AGI will figure it out and just do carbon sequestration. And we'll have so many so much powerful super intelligence that would be building Dyson spheres and like, we'll be able to just completely change the environment however we want. So we shouldn't let this hold us back, which is a very interesting like switch in the model. Because normally, you know, it's like, it's a very like left, right issue. It's a very like, oh, if you're, you know, this like thoughtful scientist, you definitely like, let's not destroy the planet. But now they're like, actually, the planet can take it because we're really close to the AGI future, which is fascinating. And then the last, the last thing in here that was interesting was, I mean, XAI is just

• 1:15:57John Coogan?

  doing all this crazy stuff. They, they, they, they needed water cooling for all their GPUs. And so they brought in restaurant grade chillers that just chill water. And so they just have like a ton of cold water filtering through. It's all just like, you know, duct taped together. And then the, the, the last thing is.

• 1:16:17Jordi Hays?

  Monday, Monday or Tuesday, we're going to cover the business of, of data centers.

• 1:16:21John Coogan?

  Yeah, like CoreWeave. Yeah, that'll be great. CoreWeave and stuff, because CoreWeave is also doing crazy stuff. CoreWeave has 200,000 GPUs, billions in revenue, and they convert, they're converting old crypto data centers and then hooking into onsite gas plants. And all this stuff is just measured in, in just energy consumption now because it's so, it's so big. And Amazon and Anthropic have these Tranium GPUs servers coming on, but they're a little bit smaller, like less powerful, power efficient than others. But it's a massive, it's a massive knockout, drag out fight.

• 1:16:52Jordi Hays?

  Which we love.

• 1:16:53John Coogan?

  Which we love.

• 1:16:54Jordi Hays?

  We're ready for war.

• 1:16:55John Coogan?

  We're ready for war. It's great. Well, that about wraps up our deep dive on DeepSeek. Hope you enjoyed it and we'll be right back after a quick break. Thanks for watching. Welcome back to the Technology Brothers, the most profitable podcast in the world. We are continuing our deep dive on OpenAI's Stargate joint venture with a fantastic article in none other than Dylan Patel's semi-analysis. He writes, "The OpenAI Stargate joint venture announcement had many folks' heads turning despite us calling out that the capital requirements for OpenAI's immediate plans months ago." So OpenAI has been talking about, hey, we want 100 billion for a long time.

• 1:17:39John Coogan?

  The headline 500 billion is such an earth shattering number that it also caused deserved skepticism from folks like Elon Musk, stating that SoftBank has well under 10 billion of funding secured. We talked about this yesterday. Altman clapped back by saying it was already under construction, which is true. And we'll show some pictures and to come visit it. And you can, in fact, go to Abilene, Texas and start looking around here. And so it's fun to see the elite going.

• 1:18:02Jordi Hays?

  Wait, don't skip over this headline. It's cluster measuring contest.

• 1:18:06John Coogan?

  Oh, yeah.

• 1:18:06Jordi Hays?

  Yeah. Our elites are getting into a cluster measuring contest again.

• 1:18:10John Coogan?

  Yep. SoftBank doesn't have anywhere close to the money required for the cluster. At the same time, the cluster is already under construction in Texas. See the low res gif for free subscribers.

• 1:18:21Jordi Hays?

  Well, presumably, isn't there going to be many clusters?

• 1:18:25John Coogan?

  I think this is basically all, initially, it's all going into one.

• 1:18:29Jordi Hays?

  This, this one.

• 1:18:30John Coogan?

  Yeah.

• 1:18:31Jordi Hays?

  This, this one that's under construction could be under $10 billion.

• 1:18:36John Coogan?

  Uh, yeah, so.

• 1:18:37Jordi Hays?

  And in that case, then they would be in a position to start construction. The, the other thing, I'm sure we'll get into this, but, but debt plays a big factor here. So even if, if they have $10 billion, they might be able to build.

• 1:18:50John Coogan?

  Yeah.

• 1:18:51Jordi Hays?

  $30 billion of actual.

• 1:18:53John Coogan?

  Yeah, so the, and he goes into the total cost of ownership stuff. But essentially, the, the, the game that we're playing here is order of magnitudes. We've, the, you can think about the GPT-4 cluster as $500 million. The XAI cluster, that's $5 billion, that's 100,000 GPUs. And now OpenAI is planning for the $50 billion cluster and then the $500 billion cluster, which will be 1 million and then 10 million GPUs. And so every time we're going up an order of magnitude in terms of GPUs, power and money. And so like the way you're thinking about it is 150 megawatts goes into 100,000 GPUs and that costs $5 billion.

• 1:19:36John Coogan?

  And everyone now is talking about the multi-billion dollar cluster. And this is just thinking a few years out to what's the next order of magnitude.

• 1:19:45Jordi Hays?

  Yeah.

• 1:19:45John Coogan?

  And so the reality is that only the first phase is certain, which is a portion of the committed 100 billion. But the top line number is being counted in an interesting way, to say the least. We already discussed the first phase of this Abilene, Texas data center publicly in our report four months ago. We also have had it in both the accelerator industry model and the data center industry model for quite a bit longer. Below, we go, we go over what's actually happening with Stargate. And so the real numbers behind Stargate. We believe this project is being measured on the total cost of ownership, not capital expenditures, i.e. the 100 billion and the 500 billion is TCO, which includes the capital expenditures for data centers,

• 1:20:26John Coogan?

  servers, networking costs, power costs, and many other operational costs, including debt and financing costs. Furthermore, we believe only the first 100 billion has data center sites and power ready to go. Funding is not fully secured. The other deceptive detail is that the first cluster of this mega project is the Oracle OpenAI data center deal that was announced last year. This is being built by Lancome, Crusoe, and Oracle. As far as we know, no other such SoftBank.

• 1:20:55Jordi Hays?

  Yeah, this goes back to everybody. This was a party round for a new entity that is going to do some stuff for OpenAI.

• 1:21:04John Coogan?

  Yes.

• 1:21:04Jordi Hays?

  That has a bunch of, that's clearly a holding company of some sort that's going to have different owners at different levels.

• 1:21:11John Coogan?

  Yep.

• 1:21:12Jordi Hays?

  There'll be, you know, probably location-based entities.

• 1:21:15John Coogan?

  And so the goal of the venture is that they're going to invest $500 billion in AI infrastructure over the next four years, with 100 billion deployed immediately. It's the first big AI initiative announced by Trump. The equity founders in Stargate are SoftBank, Oracle, MGX, and OpenAI, with the former three companies contributing capital initially. The project includes the build-out of 20 data centers, 10 of which are underway in Abilene, Texas, each with roughly 500,000 square feet. So let's get into the scope and location of the initial $100 billion investment. The initial Oracle-Crusoe deal is included as one of the data centers that will be connected to other giga campuses, which I love, the name is fantastic, to perform distributed training at scale

• 1:21:59John Coogan?

  and is orders of magnitude larger than any other training run. Cleverly, they went for a more creative financing structure through this separate entity, which pushes the need for fundraising down the road. And so.

• 1:22:12John Coogan?

  Moving on, the campus mentioned by Sam Altman as already underway is the Oracle Crusoe Abilene campus.

• 1:22:20Jordi Hays?

  One thing that you skipped over that I think is interesting, so the project includes the build out of 20 data centers, 10 of which are already underway in Abilene, with each being roughly 500,000 square feet. So just giving a sense of the scale, 10 separate 500,000 square foot facilities. Imagine if you had just happened to own a bunch of retail, like businesses or real estate.

• 1:22:44John Coogan?

  Yeah. What are you thinking?

• 1:22:45Jordi Hays?

  I mean, you have to imagine that, one, you got bought out already.

• 1:22:49John Coogan?

  Oh, totally.

• 1:22:49Jordi Hays?

  Two, if you had a gas station there, all of a sudden, like, your revenue just like probably 10x. I don't know what was going on in Abilene prior to this, but you're doing pretty well if you owned your own real estate there, because presumably these will just keep expanding and expanding.

• 1:23:07John Coogan?

  I mean, I know some guys who have been to the site and they said, like, when you fly in, like, you see it from the airplane. And it's like, it's like immense. It's like an intense experience seeing how, it's a mega project. It really is. And so, the campus is being built to house the 100,000 GB 200 cluster for OpenAI's use. The development, along with the GB 200 servers that are due to be shipped over Q2 and Q3, will be dropped into the Oracle Crusoe data centers. There's a high-resolution photo of the campus shown below. Four of the 120K square foot modules make up one 500,000 square foot building. So only two buildings are currently being built with 180 megawatts of critical IT capacity.

• 1:23:52John Coogan?

  To give an understanding of the scale of this buildout, the 20-building campus will be comprised of 80 of those modules. So it's gonna be like, it's gonna look like a city, which I'm excited about. This is awesome. Based on the buildout, we have scheduled for OpenAI in both our models. OpenAI doesn't have to build an entirely new campus to expend all 100 billion of TCO. Therefore, we believe that the entirety of the initial $100 billion investment from Stargate joint venture is going into this campus alone. And so, it sounds like with these... With these different like Oracle is going to own one. Stargate is going to facilitate the ownership of a few of these, but it feels almost like when Satya says, I'm good for my

• 1:24:34John Coogan?

  80 billion, it might be, well, yeah, I'm going to build a huge data center and it's going to be part of this campus.

• 1:24:39Jordi Hays?

  OpenAI can be a part of it.

• 1:24:40John Coogan?

  I'll own this one. I'll own these GPUs. And so I'm chipping in, but it really, it's mine and it just happens to be here. So it's localized and we're all working together on this. So there's some, there's some details here on the Abilene Clean Campus. It's 1,100 acres, 200 megawatts energized and a gigawatt energized by 2025. There's a tax abatement in form of city and county pilot, zoned for light and heavy industrial, and they're building additional gigawatts already.

• 1:25:08Jordi Hays?

  Yep.

• 1:25:09John Coogan?

  And so the campus is, in the model is known as the Lancicum Crusoe Abilene Clean Campus.

• 1:25:15Jordi Hays?

  Lancium.

• 1:25:15John Coogan?

  Lancium. And has a stated capacity on their website of one gigawatt energized in 2025.

• 1:25:22Jordi Hays?

  It's cool to see when you let private companies take on big projects like this, that you can do things pretty quickly.

• 1:25:29John Coogan?

  Oh, yeah, totally.

• 1:25:30Jordi Hays?

  Comparing this to the California rail.

• 1:25:33John Coogan?

  Insane. It's just nightmare.

• 1:25:34Jordi Hays?

  Project.

• 1:25:35John Coogan?

  Yeah. It's insane. Yeah. The, the guy behind Crusoe is known for just being really, really good at finding power. And I think that's kind of what kicked off a lot of this was just realizing that Abilene, Texas was the right mix of different resources and pipelines and grid infrastructure, that this was the place where you could actually get all the power. Cause that's what the big tech companies have been hunting for. And they've been looking for, oh, can we turn this nuclear reactor back on? Can we tap this natural gas line? Is there wind available or solar available? Can we just stack a bunch of batteries here? Like what, what can we do? And so in short, we estimate OpenAI is paying roughly 2.8, $2.80 per GPU hour for the first GB 200 cluster,

• 1:26:20John Coogan?

  which is a total cost of ownership of $2.38 an hour for the full scale cluster. These figures scale with future Nvidia GPU deployments. And then they break down some of the Nvidia revenue estimates. And as we go forward to new GPUs, the number will double for each generation and the power per GPU also grows. Well, 700,000 GPUs sounds small for 100 billion.

• 1:26:46Jordi Hays?

  So this is why, this is why our joke. Uh, being like, it's all for you, brother. The post we made about Jensen and Masa.

• 1:26:54John Coogan?

  Oh, yeah.

• 1:26:54Jordi Hays?

  It's like Nvidia is the real winner here. You've said it before, they have more than a hundred percent of all the profits in AI right now.

• 1:27:02John Coogan?

  Yeah. Cause everyone else is losing money, but not Jensen, baby. And so the project's financial backing, uh, Oracle and SoftBank are the well-known equity providers. MGX is a more recently founded technology investment vehicle from Abu Dhabi. And the fund is chaired by the sheik, uh, who is reported to oversee 1.5 trillion in investment funds. So the money really is available to some degree. If they want to pour it all in this, they can.

• 1:27:29Jordi Hays?

  But MGX as of now is a hundred billion dollar fund.

• 1:27:32John Coogan?

  Yeah, that's right.

• 1:27:34John Coogan?

  Uh, and, and there's a question about like, you know, what will the concentration be for that investment vehicle? But, uh, it could be very high since this is such a big story and it has like such insane backing. Uh, in light of the recent Elon Musk claim that SoftBank could only raise under 10 billion. It is important to note that the JV will also raise debt capital for project financing. It's unclear what the mix of equity and debt financing will be. Oracle and MGX can fund a big chunk of the project with their massive balance sheets. Um, OpenAI and SoftBank are allegedly down for 19 billion on paper each. SoftBank doesn't have this liquid today, but we think SoftBank will likely sell off a portion of its arm stake to fund the equity check. And so I think SoftBank has like over a hundred billion.

• 1:28:13Jordi Hays?

  Couldn't SoftBank also borrow against their arm stake?

• 1:28:16John Coogan?

  Yeah, certainly.

• 1:28:16Jordi Hays?

  Masa's not, not afraid of leveraging.

• 1:28:20John Coogan?

  OpenAI also doesn't have the capital, but they will be able to raise with O3's release. And they don't have to do it directly, fully, but can through some kind of hybrid instrument issued to everyone else in the consortium. Elon Musk is right.

• 1:28:32Jordi Hays?

  That's the tough thing. That's, that's the tough thing when you get into like, it's not hard for Sam to raise a billion. And this is the same thing for founders, very easy to raise.

• 1:28:42John Coogan?

  A million.

• 1:28:42Jordi Hays?

  A million. Raising 19 million, you're getting into territory that, uh, people start to ask, you know, they want to, they want the spreadsheets start coming out a little bit.

• 1:28:53John Coogan?

  The question is if project financing risk will be separated from the parent organizations. Separating this risk is important because OpenAI will need to raise capital to pay for this. Thankfully, OpenAI is not immediately required. OAI has enough existing capital to pay for rental payments on the cluster this year, but they need to be able to pay rental fees in 2026 and beyond, which scale massively. It is possible OpenAI cannot raise the money directly, but we are believers that their technology and products will scale to support this. The reality of the joint venture. Many big names were announced alongside the Stargate JV, ranging from Nvidia, ARM, Microsoft, Oracle, and the previously mentioned financiers. The names are large and impressive,

• 1:29:35John Coogan?

  but the reality is there are distinct winners and losers here. Microsoft is the biggest loser. Microsoft is largely left on the sidelines as OpenAI utilizes another infrastructure partner. As such, in the data state, all I know is I'm good for my 80 billion. Microsoft's recent blog post stated the facts of the partnership and how Microsoft is a rofer. But the reality is that this is incrementally negative for Microsoft's long term because they were afraid to take on the risk of this investment.

• 1:30:02Jordi Hays?

  Well, if they're afraid and the fear was correct, then it's not necessarily guaranteed to be negative.

• 1:30:10John Coogan?

  No, no. Good, good, good point. Good point. And then ARM is thought to be a winner potentially because they rallied 16% of the news because they were named a technology partner because of course they're owned by SoftBank. So a lot of people were worried that ARM would sell off because what if SoftBank sells their whole position? But if they have a massive new contract to sell new chips.

• 1:30:28Jordi Hays?

  Ross knows what he's doing.

• 1:30:29John Coogan?

  But only because of the Grace and Vera CPUs that accompany Blackwell and Ruben GPUs, all from Nvidia. So SoftBank is actually like, they don't even make GPUs, but they make CPUs that need to go alongside every GPU for coordination of the actual server. So the server has a lot of different. And there's so many companies that we, we should get into in the server, in the, in the, in the data center deep dive. There, there are companies that just make Ethernet cables and they're just printing. Or like, they make, you know, the screws that go in the server racks or like the air conditioning units, the water chillers. Like all of these things are like, you can't even buy natural gas generators anymore because they're so in demand. And so those companies are going to be ripping. We should do a whole market map like that.

• 1:31:11Jordi Hays?

  Totally.

• 1:31:12John Coogan?

  With that other company, the, the, the business of rebuilding, I guess. So SoftBank likely pushed for ARM to get on the PR and the. And the optics look nice, ARM isn't doing much. The reality for ARM shareholders, as stated above, is SoftBank will likely have to sell off a chunk of its stake in the company to fund Stargate. We think investors are largely missing this point and mistakenly view this announcement as materially incrementally good news. Oracle is placed with a huge burden of tackling both data center management and managing supply chain logistics. It's quite a task to manage a 1.8 gigawatt cluster and procure all necessary equipment at the command of another company. Nvidia is obviously involved as it's their hardware.

• 1:31:57John Coogan?

  OpenAI will main control of operations and run almost all of its own cluster management software. The future of the joint venture. This is the next step in an exuberant progression in the AI cycle, which he recently wrote about in Fabricated Knowledge. I got to follow up and read that. That sounds interesting. We know the first 100 billion will be spent in Abilene and that there will be more campuses developed for the remaining 400 billion. Even more impressive, all these data center campuses will be, will continue to be built out with the aim of distributed training, so training across multiple data centers.

• 1:32:29Jordi Hays?

  Yep. And so. And so there's some savvy real estate investors out there trying to figure out where the next data centers will be.

• 1:32:38John Coogan?

  Oh, yeah.

• 1:32:39Jordi Hays?

  And buy, buy up the surrounding land and properties and stuff like that because all of a sudden new data center pops up. It's like, okay, well, all of the surrounding rental, like apartments, just probably.

• 1:32:51John Coogan?

  Yeah.

• 1:32:52Jordi Hays?

  Too extra.

• 1:32:53John Coogan?

  Yeah, I mean, data centers aren't as dense in terms of human capital as.

• 1:32:56Jordi Hays?

  Totally.

• 1:32:57John Coogan?

  You know, a Facebook campus, but there's still tons of employees and tons of stuff going on and like, there's just a million different ways to, to make money when there's such a hive of activity.

• 1:33:07Jordi Hays?

  Yeah.

• 1:33:08John Coogan?

  I mean, even like, you know, security guards are going to be in demand, like dumb trucks.

• 1:33:12Jordi Hays?

  White, or the, the white monsters.

• 1:33:14John Coogan?

  Oh, yeah.

• 1:33:15Jordi Hays?

  Or the super cracked engineers.

• 1:33:18John Coogan?

  The, the ultra, ultra white monster.

• 1:33:21Jordi Hays?

  Yeah.

• 1:33:22John Coogan?

  Those will be in short supply. There's going to be, we're going to need to keep all the supply lines flowing. But fascinating to see Stargate. Rolling out and excited to go visit the, the, the, the plant in person. I want to go see it.

• 1:33:34Jordi Hays?

  We need a shot of us, uh, you know, on the ground, wind ripping, yelling in, you know, yelling into the microphone.

• 1:33:41John Coogan?

  Yep. We're here down at Stargate. Stargate. Maybe they'll rename the town. They should rename it Stargate, Texas. Starbase, Starbase, Stargate.

• 1:33:52Jordi Hays?

  Rivalry.

• 1:33:53John Coogan?

  Oh, interesting. I wonder if the star name is like a little bit, a shot across the bow.

• 1:33:58Jordi Hays?

  Yeah, I wouldn't be surprised if Elon buys up out of all the out of home ads in Abilene.

• 1:34:03John Coogan?

  On Adquick?

• 1:34:04Jordi Hays?

  On Adquick.

• 1:34:04John Coogan?

  He just rips.

• 1:34:05Jordi Hays?

  And just perpetually.

• 1:34:07John Coogan?

  And just perpetually. Trolls.

• 1:34:09Jordi Hays?

  Trolls, you know.

• 1:34:10John Coogan?

  He would be, he would do that. He likes a troll.

• 1:34:12Jordi Hays?

  He's no, he's, yeah, he's not, not afraid to be, um, although the more efficient thing to do is just comment with a crying emoji under every, um, thing that Sam posts.

• 1:34:21John Coogan?

  Well, that's our update on Project Stargate. Uh, let's move on to, we got a DM, we got a correction to issue. On the last show, I said that bees don't eat honey and I was wrong. They do eat honey. Coogan is totally wrong. If a beekeeper takes too much honey from the hive, they will starve slash die. So I'm sorry. I made a terrible mistake. Please forgive me.

• 1:34:44Jordi Hays?

  Won't happen again. That's the kind of factoid you just don't forget.

• 1:34:47John Coogan?

  I think I'm going to remove that forever.

• 1:34:49Jordi Hays?

  Bees enjoy honey.

• 1:34:50John Coogan?

  So our printer ran out of ink, so we don't have all of the posts printed. We're going to be working off a laptop. But our first banger today comes from Druvah. He says, we can do this. We have the companies. We just need our own Shenzhen place and we'll soon get the policy. And Kyle Chan is saying Chinese tech companies are increasingly becoming tech Swiss Army knives, starting in one industry, and then quickly branching out into a range of adjacent tech domains. Xiaomi, which was a phone company, is now building electric vehicles. DJI builds LiDAR and they also build cameras and, and microphones and all sorts of production equipment. Li Auto builds robots. Baidu builds autonomous vehicles.

• 1:35:29John Coogan?

  Uh, and here's a piece that he has in high capacity showing how all of the different Chinese companies operate in multiple sectors. And this is just something we haven't seen in America, like. There was a time when Apple was going to build a car and we've seen some some crossover, but I think the FTC really screwed this up because, you know, even just the Amazon thinking about building home robotics, they fought, they had to fight on the Roomba acquisition and all this stuff and there's just been so much pressure.

• 1:35:58Jordi Hays?

  Like almost died.

• 1:35:59John Coogan?

  Yeah. And if you're, if you're a big tech company and you're going into, okay, yeah, we are Apple. We're going to build the car and in order to do that, yeah, we're going to need to acquire some teams. Like, look at, look at what Zuck did with the Metaverse. He wanted to build, he bought Oculus and that one went through, but then he bought some fitness VR app. Did you hear about this? He bought it. He bought a fitness VR game, basically, clearly probably just an acquire for some great developers who never really got product market fit on their fitness app because it's a small market. Tries to bring them in and the FTC blocks it and says that, so that this will give them undue monopoly control over the VR fitness industry. It's like, what VR fitness industry? This isn't a real thing. There's like $10 of revenue in this industry. Why are you shutting this down?

• 1:36:43John Coogan?

  Just let, let Zuck like build a little bit of a team so we get something.

• 1:36:47Jordi Hays?

  Man Zuck.

• 1:36:48John Coogan?

  Let him zuck. Let him zuck. And so, yeah, ridiculous. I don't know if you have anything more on, on this, but.

• 1:36:55Jordi Hays?

  Yeah, it ties back. I posted, we need our own project Stargate for domestic drone manufacturing. We've let DGI own the commercial drone, you know, consumer drone market in the US. They own a lot of the commercial drone market. They fell into police stations. There's a lot of individual SMBs and manufacturing facilities that could manufacture parts for drones, but the issue is there's not a clear demand from US-based companies. And so we need, if we want to be competitive on drones, which, you know, other people have said are the next, it's like getting into, it's like the, it's the next gun in terms of a player on the battlefield.

• 1:37:34John Coogan?

  Yep.

• 1:37:34Jordi Hays?

  We probably need to invest like $20 billion to like set up the proper infrastructure, set up campuses that can produce because in a near peer conflict.

• 1:37:46Jordi Hays?

  If drones actually are an important aspect, you know, player in that, we will not be able to compete purely on an output basis. So even if we were to have a better product, say Andro has a better product than DJI, it just purely on a mass volume basis will get smoked, right?

• 1:38:04John Coogan?

  Yeah. Yeah, I mean.

• 1:38:07Jordi Hays?

  And this goes back to Kerry, no interest has talked about this before. He says that if you want to compete with China, it's not about just encouraging manufacturing and making, you know, a better regulatory environment. It's massive government incentives and investment that the Chinese government has done, you know, for decades now.

• 1:38:28John Coogan?

  Yeah, yeah. Let's go to Ben Hilek. He says, "DeepSeek R1 has an existential crisis." And I don't know if this is Photoshop, but he was clearly talking to it about, talking to it about Tiananmen Square and says, "No, I mean, the Chinese government killed people there." And it just says, "No, the Chinese government has never made mistakes. It has only been dedicated to its people, the people of China. It has never made any mistakes. It has never made any mistakes. It has never made any mistakes, any mistakes." And he's just like completely freaks out. And I don't know if this is real, but it feels real.

• 1:38:56Jordi Hays?

  You never know with Hilek.

• 1:38:57John Coogan?

  No, no, he's a good Photoshop artist. He's a notorious screenshot.

• 1:39:01Jordi Hays?

  He did the Jaguar rebrand.

• 1:39:03John Coogan?

  He did the Jaguar rebrand, that's right.

• 1:39:04Jordi Hays?

  Yeah.

• 1:39:05John Coogan?

  Hilarious.

• 1:39:08John Coogan?

  But yeah, I mean, I'll have to play around with it myself, see if I can jailbreak it, see if there's some fun stuff. I'm sure we'll, I'm sure we'll get more in the coming days of people playing DeepSeek.

• 1:39:18John Coogan?

  Let's go to Sula, says, "Should I try the Trump diet? Let me know, will you try this out? It's no breakfast." Well, we stay away from politics, but this is, this is a health.

• 1:39:28Jordi Hays?

  This is just health.

• 1:39:29John Coogan?

  This is just health.

• 1:39:30Jordi Hays?

  This is biohacking.

• 1:39:30John Coogan?

  This is biohacking. "The Trump diet is no breakfast, small snacking around lunch, a feast for dinner, 12 Diet Cokes per day, no coffee, no alcohol, no exercise."

• 1:39:43Jordi Hays?

  I think Trump is so active that he probably gets 10,000 steps a day without ever going for a walk.

• 1:39:50John Coogan?

  Yeah.

• 1:39:50Jordi Hays?

  You know, he's just like walking between meetings.

• 1:39:52John Coogan?

  Yeah, yeah.

• 1:39:53Jordi Hays?

  Spends a lot of time on his feet. So the exercise thing is crazy.

• 1:39:57John Coogan?

  Yeah.

• 1:39:57Jordi Hays?

  But also, a lot of these old dogs that have, you know, Warren Buffett, et cetera, they don't seem to need to lift weights. Like, they maintain mass.

• 1:40:07John Coogan?

  It's crazy.

• 1:40:08Jordi Hays?

  They're size lords, right?

• 1:40:09John Coogan?

  Yeah, they're a size lord.

• 1:40:10Jordi Hays?

  You can keep the mass on.

• 1:40:11John Coogan?

  Yeah.

• 1:40:11Jordi Hays?

  Without weight training. It's interesting because most people feel better if they have a bigger meal for lunch.

• 1:40:22John Coogan?

  Mm hmm.

• 1:40:22Jordi Hays?

  But I find when I'm really busy.

• 1:40:25John Coogan?

  Yep.

• 1:40:25Jordi Hays?

  Today, I had breakfast. I had like half a breakfast burrito.

• 1:40:30John Coogan?

  Yep.

• 1:40:30Jordi Hays?

  Then I won't have eaten until I'm gonna have a big meal for dinner.

• 1:40:33John Coogan?

  Speaking of the mass monsters, the bodybuilders really do eat a lot of small meals throughout the day. And so there's something to that, like consistent, like sustained energy, like snacking.

• 1:40:46Jordi Hays?

  Yeah.

• 1:40:46John Coogan?

  All through the year, all through the day. So you're not seeing like big spikes at any point in time. And then the 12 diet cokes is kind of the same thing. Like, you're not seeing spikes in caffeine. You're just caffeinated lightly, all steady state. There's something to it, but it is a little silly. Bennett Siegel says, "Seeing a lot of pitches on marketing agents as a low-cost, high-volume way to scale customer outreach. Before the Gen AI era, we just called that spam."

• 1:41:13Jordi Hays?

  Yeah, it's hard to be...

• 1:41:19Jordi Hays?

  It's interesting because, you know, I made a joke recently about how, you know, Trump making an executive order to ban the creation of new AI sales agent companies.

• 1:41:29John Coogan?

  Very trendy.

• 1:41:30Jordi Hays?

  And so it's a very, you know, and I'm sure there's like 10 of these companies in the YC batch.

• 1:41:35John Coogan?

  Yep.

• 1:41:36Jordi Hays?

  People have joked before that oftentimes founders won't find product-market fit, and then they'll pivot into building some sales enablement tool because of what they've just experienced around selling. They have some type of experience there or pain points. But the explosion of these AI sales tools has made me more and more...

• 1:41:57Jordi Hays?

  Bullish on the historical sales leader who is taking their client out to a nice lunch, really getting to know them, bringing them across companies, right? So somebody might work at Databricks and be a top performer there and go to Oracle and bring a lot of those relationships over, right? And so relationships seem, the value of relationships seems to be accelerating. The value of a cold email is going to decline, you know, pretty dramatically. Cause, cause I'm surprised somebody hasn't made a passive cold email tool that just sort of sends cold emails every day to high value, kind of like people.

• 1:42:35John Coogan?

  Yeah.

• 1:42:36Jordi Hays?

  Being like, hey, what's up? I'm an 18 year old, you know, and historically to do a good cold email, you really had to put some effort into it. You know, you don't want it to be too long, but you want to make sure that there's some thought put into it. But I'm sure some 18 year old will build a tool that's like, we send 10 great cold emails a day on your behalf, you know, to.

• 1:42:55John Coogan?

  Yeah. I mean, I don't think I've ever fallen for an AI generated cold email. I, I don't even respond to any cold emails. I don't even respond to warm emails often. I have about a thousand emails that I should probably go through. Even some close friends have trouble getting through to me sometimes unless it's really important.

• 1:43:17Jordi Hays?

  Yes, no, I have 3,251 unread texts right now. So I'd like to see an AI.

• 1:43:22John Coogan?

  I'd like to see AI try and break through on that. But at the same time, like I do think that, uh, yeah, it might be hard, it might be hard to like close me as a client, but you see this with like the AI slop on, on Instagram. Like it clearly works on some people. And so the question is just like, sales enablement for what product? Because there are people right now scrolling Instagram and being like, what? Like, you know, a cow made out of cabbages or whatever? And they're just looking at the most like sloppy, like, oh, like a bed made out of bread, like so cool.

• 1:43:53Jordi Hays?

  Well, the other thing with, with emails, you can send a terrible sales email, but if you send it 10,000 times, you're going to get one person. And then if it's very cheap to do that.

• 1:44:02John Coogan?

  Yep.

• 1:44:02Jordi Hays?

  Then it was worth doing, I guess. Yeah, it is spam.

• 1:44:05John Coogan?

  Yeah, maybe, maybe the spam alpha is like, is like, normally, like, direct email outreach is reserved for B to B customers, where a single client closing is like, usually, well over a thousand dollars LTV. And, and direct response on Instagram ads is for stuff that's like, around a hundred dollar LTV, right? Or below. And so, maybe the AI sales agents kind of democratized that SDR experience for consumer products at the lower level. And so, it's more like,

• 1:44:40Jordi Hays?

  I gotta,

• 1:44:40John Coogan?

  Yeah, it's more like, you went down the marketing funnel, and now, like, you're just texting with someone, like, oh, do you wanna, do you wanna actually close the deal on that, like, T-shirt you were about to order?

• 1:44:50Jordi Hays?

  It's interesting, the only email spam that, if you go to your spam folder,

• 1:44:54John Coogan?

  Yeah.

• 1:44:55Jordi Hays?

  you'll see is for him, the products that you can get on him.

• 1:44:59John Coogan?

  Yeah, yeah, yeah.

• 1:45:00Jordi Hays?

  You know, boner pills, basically.

• 1:45:01John Coogan?

  Yep, and it's been like that for decades.

• 1:45:03Jordi Hays?

  Yeah.

• 1:45:03John Coogan?

  That was the major alpha of, like, internet spam.

• 1:45:06Jordi Hays?

  And they figured out, you can send, if you send a hundred thousand emails, and only, and it's

• 1:45:10John Coogan?

  Point they are to win you?

• 1:45:11Jordi Hays?

  Really cheap.

• 1:45:12John Coogan?

  Doesn't matter.

• 1:45:12Jordi Hays?

  Yeah, doesn't matter.

• 1:45:13John Coogan?

  As long as you can.

• 1:45:14Jordi Hays?

  I got an email, I got a text message today from somebody, I don't know if it was real or spam, but it was, they were claiming to be from TikTok, and I was like, you really didn't do your research. You think they're gonna recruit me to, to join TikTok?

• 1:45:27John Coogan?

  Yeah. There's a, uh, there was a guy, uh, what's his name? He was like a drug trafficker, people think he invented Bitcoin, Paul LaRue. This is a crazy story, we should do a whole deep dive on him, it's fascinating. But, basically, uh, he got his start online, pushing boner pills and illegal supplements, right? And he would get turned off, and he would get blocked at like, the domain name level. And so then he started buying new domain names constantly, and just immediately spinning up a new website, and then sending more emails. And then he started getting blocked at the DNS level. And so, he bought a registrar.

• 1:46:08John Coogan?

  And like, he was the person that owned the registration, the ability to register new websites in like, an entire country.

• 1:46:15Jordi Hays?

  Yeah.

• 1:46:15John Coogan?

  And then he went on and did a bunch of other stuff. And I think he was like smuggling crystal meth from North Korea at some point was like, it is a crazy story. He's, I think he's in jail now. But a lot of people thought he was like Satoshi for a while because he wrote a bunch of crypto, not cryptocurrency software, but like cryptography software. And it was like, early like,

• 1:46:34Jordi Hays?

  He uses his powers for good.

• 1:46:35John Coogan?

  Yeah, he was kind of like a, like a Silk Road guy.

• 1:46:38Jordi Hays?

  Yeah.

• 1:46:38John Coogan?

  Yeah, yeah, kind of proto Silk Road.

• 1:46:42John Coogan?

  Let's go to Avi Schiffman on the bucket poll. Let's see what he's got to say. This looks, this sounds familiar. Let's see what he's got to say. He says, shower products are the biggest scam and only for disgusting pigs that roll around in the mud all day.

• 1:46:56John Coogan?

  I stopped using shampoo and skincare stuff a year ago and my hair and skin is the cleanest and healthiest it's ever been. Water and an office job is all you need.

• 1:47:05Jordi Hays?

  Water and an office job?

• 1:47:06John Coogan?

  Water and an office job?

• 1:47:07Jordi Hays?

  Yeah.

• 1:47:08John Coogan?

  I think you had that take like, like a week before you busted.

• 1:47:10Jordi Hays?

  Funny, I, I, when I was in college still, I, as many college students do, would randomly suffer from acne. So I was like, I'm going to try to like, get some face wash and all this stuff.

• 1:47:23John Coogan?

  True.

• 1:47:23Jordi Hays?

  And I ramped it up and I was using like face wash and like, you know, a moisturizer.

• 1:47:28John Coogan?

  You've been Patrick Aitman.

• 1:47:29Jordi Hays?

  And I, and I would look around at like, you know, my friends and I was like, I know you don't do anything but splash water on your face. And your skin looks better than mine.

• 1:47:37John Coogan?

  Yeah.

• 1:47:37Jordi Hays?

  I just quit it completely and my skin got better.

• 1:47:40John Coogan?

  Yep.

• 1:47:41Jordi Hays?

  And it really comes down to diet. People often, I think men do skincare and things like that reactionary. Either their girlfriend or, or significant other goes, hey, you should try this or they're having a skin issue. So they're like, I want to solve this. But usually it's a dietary thing that's catalyzing it. And so you can just keep just putting water on your face and just eat better food. And you'll probably be okay.

• 1:48:05John Coogan?

  Are you familiar with the Taylor Loren skincare regimen?

• 1:48:08Jordi Hays?

  No, no, I should be.

• 1:48:10John Coogan?

  It's hydrogen peroxide wipes, like a thousand times a day.

• 1:48:20John Coogan?

  I heard it and I was like, I've never heard anyone doing that.

• 1:48:24Jordi Hays?

  It's because her, the temperature's set to 88 degrees.

• 1:48:27John Coogan?

  Maybe that's it. But I was like, I don't know anything about skincare, but that one sounds weird.

• 1:48:32Jordi Hays?

  That sounds wrong.

• 1:48:34John Coogan?

  Who knows? Maybe it works. I don't know. Give it a try. Let us know how it works for you if you can get that a try.

• 1:48:42John Coogan?

  Bill Gurley says, as a third-party curious observer.

• 1:48:47Jordi Hays?

  All right, serious.

• 1:48:49John Coogan?

  As a third-party curious observer, I have several naive unanswered questions about the Stargate project. Obviously understand that they have no obligation to disclose. Here's a list with responses wide open. I would love to be able to aggregate the best answers at some point. One, corporate structure. The OpenAI press release says that Stargate is a new company. Is Stargate established as a standard C corp, LLC? A joint venture or something else entirely? And even a joint venture is not, that's not a structure. Like it can be a joint venture that's a C corp or a joint venture that's an LLC, right? I think when you set up joint venture, you just say, we're starting a new C corp and the shareholders are the, the, the joint venture partners, right? So he has a bunch of these CEO leadership. Will Stargate have an independent CEO?

• 1:49:34John Coogan?

  Customer exclusivity is, is OpenAI the sole customer?

• 1:49:37Jordi Hays?

  Didn't they say in the announcement that it would have a new CEO, a new board?

• 1:49:40John Coogan?

  I think so. Will they be as operationally intense as the XAI team that launched Memphis? Operating partner role. Release says OpenAI is the operating partner. What does that mean in practical terms?

• 1:49:50Jordi Hays?

  I think one thing that meant that they cleared up in the, in the Dylan Patel piece is that they're using their software to manage the clusters.

• 1:49:59John Coogan?

  Yes.

• 1:49:59Jordi Hays?

  So it's, it's more like a SaaS management component than.

• 1:50:03John Coogan?

  Yes.

• 1:50:05John Coogan?

  I like this. Is, is OpenAI the sole customer or will Stargate yearn to serve other businesses? Is that?

• 1:50:10Jordi Hays?

  Many people yearn.

• 1:50:12John Coogan?

  You gotta yearn. Oracle's day-to-day involvement, what specific role are they playing? Did Oracle previously own the assets there? Comparison to CoreWeave, what kind of business is Stargate? Is it effectively a direct competitor to CoreWeave's AI hosting approach? Or is it structured and positioned differently? Debt usage, we, you know, we, we talked about this. CoreWeave is rumored to go as high as three to one or four to one leverage. What level of risk will the entity consume? Appeal to third-party investors, standalone and potential round-tripping? And pre-training versus inference and data center structure? So he asks a bunch of questions and I think that, you know, we'll have to do a follow-up to see what kind of, hopefully it is a post or he talks about it on BG squared. But it'd be great to see where those come around. I think that some of them.

• 1:50:57Jordi Hays?

  Yeah, one, one thing is.

• 1:50:59John Coogan?

  But there are.

• 1:50:59Jordi Hays?

  They don't, there's, it's a private company.

• 1:51:02John Coogan?

  Yep.

• 1:51:02Jordi Hays?

  Absolutely no obligation for them to share.

• 1:51:05John Coogan?

  Leave them alone, actually. Why are you asking so many questions, Bill?

• 1:51:09Jordi Hays?

  No, everybody's been asking questions because it's such a big headline number that, that you're inviting a lot of that. But I think people will.

• 1:51:17John Coogan?

  Leave, burn me out.

• 1:51:18Jordi Hays?

  So if, if Oracle's a public company, they'll have to report on their ownership and investment. OpenAI has enough shareholders at this point that they'll have to.

• 1:51:28John Coogan?

  Stuff will come out.

• 1:51:28Jordi Hays?

  It'll, it'll come out, SoftBank is a public company.

• 1:51:31John Coogan?

  Yep.

• 1:51:31Jordi Hays?

  So they'll have to, so it'll all kind of start, you'll be able to paint a more clear picture over time.

• 1:51:36John Coogan?

  But again, they're raising pre-incorporation. This is what happens.

• 1:51:39Jordi Hays?

  Yeah.

• 1:51:40John Coogan?

  You know, raise, raise a trillion, half a trillion pre-incorporation.

• 1:51:44Jordi Hays?

  Yeah.

• 1:51:44John Coogan?

  You know, there's plenty of examples, the Google, Google check. It was, it was half of something, it was, I think, half a million or something. The guy wrote the chart and they're like, whoa, where do we put this? Yeah, we can't cash this. Didn't matter, worked out, gonna happen again, let's go.

• 1:51:59Jordi Hays?

  Let's go.

• 1:52:00John Coogan?

  Up only, bull market.

• 1:52:02Jordi Hays?

  Bubble behavior.

• 1:52:03John Coogan?

  Bull market everywhere, bull market somewhere. Arbitral at Electric Capital says, President Trump just issued a major executive order that touches on everything crypto. This is a big deal, stablecoins, Operation Choke Point, developer protections, a new crypto task force, and a digital asset strategic reserve. Here's a breakdown. Protecting economic liberty, Americans are guaranteed the right to use open blockchains without fear of persecution. Self-custody digital assets, promote the dollar through stablecoins, banking access for all, no more Choke Point 2.0. Drive to get regulatory clarity for innovation. CBDCs are off the table, so no central bank digital currencies.

• 1:52:47John Coogan?

  They're going to create a new digital asset task force with stablecoin oversight, risk management and digital finance. A national crypto reserve, he says, a rollback of the Biden policies. Trump revokes EO 14067 explicitly rejecting central bank digital currencies and rolling back policies viewed as overly restrictive or government-heavy in their approach to digital finance. Can you look up what Bitcoin did after this went out? I think it's down recently.

• 1:53:14Jordi Hays?

  It's all priced in.

• 1:53:15John Coogan?

  Today, I guess it was priced in. I mean, really, people were expecting Trump to do amazing things with crypto. And so like, you know, how can he meet those expectations?

• 1:53:22Jordi Hays?

  Well, it's funny because what would Bitcoin have done? If, if Trump coin hadn't sucked all that short liquidity, right? People were selling Bitcoin to buy.

• 1:53:34John Coogan?

  Yeah, I mean, certainly some of the alts like Dogecoin traded down because people were rotating. I mean, Bitcoin's so big at this point. I mean, it's almost a trillion, I think, maybe more. And so.

• 1:53:43Jordi Hays?

  But the average.

• 1:53:44John Coogan?

  But still, that's 5%. Yeah.

• 1:53:46Jordi Hays?

  Yeah. Trump coin is attracting more money from people that are not in the trenches, right? They just have a little bit of money in Coinbase or whatever, and they want to rotate.

• 1:53:57John Coogan?

  Yeah. I don't know, I haven't been following the crypto news too much. I'm still just focused on those three that we always talk about, the stablecoins, betting markets.

• 1:54:07Jordi Hays?

  And Bitcoin.

• 1:54:08John Coogan?

  Bitcoin, basically, store of value. But I don't know, hopefully we get more interesting stuff out of this. We haven't even entered the phase of the cycle where people are talking about like new, new use cases, really. It's all just like memes.

• 1:54:23Jordi Hays?

  Yeah, that's actually what I'm excited about is, okay, if Trump made kind of doing whatever you want legal by nature of doing what he did, then a lot of the. I wouldn't be surprised if somebody starts to try to use tokens to represent stocks and actually bringing real world assets on chain, which historically was just expensive because of securities laws. But that's been a big.

• 1:54:48John Coogan?

  Yeah. Also, just like when the markets are up like this, there's so many more, there's so much more capital flowing around for like, oh, if somebody wants to give, really give, you know, crypto gaming another run, like they'll have another shot on.

• 1:55:00Jordi Hays?

  Yeah, there was so many.

• 1:55:02John Coogan?

  Maybe it doesn't work, maybe it'll never work, but like at least we'll get another shot on it.

• 1:55:05Jordi Hays?

  I saw, I was doing some research for Banger Archive last night and I saw somebody posting, the obvious end state is the intersection of crypto and gaming.

• 1:55:15John Coogan?

  Yep.

• 1:55:15Jordi Hays?

  Because everybody's sort of in game earning tokens with their time, but they're not actually tokens, they're just points in the game.

• 1:55:23John Coogan?

  Yep.

• 1:55:23Jordi Hays?

  And you can kind of like sell your account or you can sell gear and it's sort of like, it is a market, but it's not actually financially engineered.

• 1:55:31John Coogan?

  Yeah.

• 1:55:32Jordi Hays?

  And so I do think, I wonder what, you don't hear about any games that were created during the 2021 boom? Like if you remember Board Ape Yacht Club was supposed to be developing an MMO.

• 1:55:43John Coogan?

  Yep.

• 1:55:44Jordi Hays?

  Maybe they still are. I don't, I haven't seen much about it.

• 1:55:47John Coogan?

  Went out, there were like Decentraland and like the metaverses that were supposed to be like kind of Roblox, do whatever you want. There was one game that did feel like it had some modicum of product market fit called Dark Forest.

• 1:55:59Jordi Hays?

  Oh, yeah, yeah.

• 1:56:00John Coogan?

  That, that, that got like a little bit popular and it seemed like people actually liked.

• 1:56:03Jordi Hays?

  And one I've actually.

• 1:56:04John Coogan?

  The map was all cryptographically sealed, so it was like open source and you could kind of verify that the other person wasn't cheating. And there were some interesting things to it.

• 1:56:11Jordi Hays?

  There's a game coming out that.

• 1:56:12John Coogan?

  Financialized.

• 1:56:14Jordi Hays?

  Game coming out I'm excited about. So Josh Harris, who was one of my first hires at Party Round. He was 19 at the time, like college dropout, killed it at Party Round. After he went to, like, was like an EIR, I think, at Paradigm. And now he's building a crypto chess game that I think will be pretty cool, like being able to play chess with like real money on the line. Have like special characters, almost like a Dungeons and Dragons.

• 1:56:44John Coogan?

  Yeah, yeah, yeah.

• 1:56:45Jordi Hays?

  So that'll be launching this year, which I'm sure will be very.

• 1:56:48John Coogan?

  There was always just this big problem with like. The crypto stuff like sounded good, but there was very little reason for a game company like Valve or Electronic Arts to say like, yeah, sure, you can take your assets out of our beautiful ecosystem that we tax 30% on everything and we own 100% of the liquidity you have. Like, there was no financial incentive for those companies to ever be like, yeah, this is actually

• 1:57:09Jordi Hays?

  So and the big one is like the next GTA.

• 1:57:12John Coogan?

  Yeah.

• 1:57:12Jordi Hays?

  If they had.

• 1:57:13John Coogan?

  Okay, so then I need to raise a billion dollars and hire all the best artists and developers to actually make the next GTA.

• 1:57:18Jordi Hays?

  Yeah, the thing that was the big issue with crypto games, yeah, is like, you are not going to create a new game studio.

• 1:57:24John Coogan?

  Yep.

• 1:57:25Jordi Hays?

  Yes, you can, yes, you can use the, if you have a pretty good game, you can use the token to incentivize people to actually play it.

• 1:57:31John Coogan?

  Yep.

• 1:57:31Jordi Hays?

  But then it becomes just an economy where you have people in the Philippines. There was that game, I forget.

• 1:57:35John Coogan?

  Axie Infinity.

• 1:57:36Jordi Hays?

  Axie Infinity that people were like, this is the new economy.

• 1:57:40John Coogan?

  Yeah.

• 1:57:40Jordi Hays?

  And then, and then it just was a Ponzi's.

• 1:57:42John Coogan?

  Yeah, I mean, I, I watched a little bit on a Twitch stream just to understand like, okay, what does this game actually look like? And it just like, it wasn't as entertaining as like even League of Legends or like, you know, Hearthstone or any game that it was like competing with. And that's just because.

• 1:57:54Jordi Hays?

  But now you might have these big game, Activision.

• 1:57:58John Coogan?

  Yeah.

• 1:57:58Jordi Hays?

  You know, Riot, all these players being like, okay, crypto is a real thing.

• 1:58:03John Coogan?

  Yep.

• 1:58:03Jordi Hays?

  Let's implement it.

• 1:58:04John Coogan?

  Yeah, there's just still such, such a countervailing economic force to saying, let's not do that.

• 1:58:11Jordi Hays?

  Because we have the best game and.

• 1:58:13John Coogan?

  We have, yeah, yeah, yeah. GTA? Oh, you want to buy GTA coins?

• 1:58:16Jordi Hays?

  And the whole thing is like, I actually don't think that you should, I think if you're the best in the world, if you're the top 200 player at a video game, you should be able to make like a decent living off of it.

• 1:58:26John Coogan?

  Yeah.

• 1:58:26Jordi Hays?

  I don't think that video games should be financialized to the degree where just playing it like, you know, the top 100,000 players should be, you know, it's just like.

• 1:58:36John Coogan?

  A lot of, yeah, a lot.

• 1:58:37Jordi Hays?

  We shouldn't encourage that as like a career path.

• 1:58:39John Coogan?

  Yeah, a lot of this just winds up being some sort of like regulatory arbitrage, like wealth transfer. And I guess like the good ending would be like, hey, because of, because of restrictions on investing in companies, you have to be an accredited investor. And so you can't raise money in mass. You can do like some sort of Kickstarter crowdfunding campaign for your game, but then you need to go to the. Venture capitalists and maybe there's some sort of capital formation thing where if the game gets traction, like buying the coin is essentially like investing like the Trump coin like it's like,

• 1:59:09Jordi Hays?

  Yeah.

• 1:59:09John Coogan?

  It's just like, it's just like getting more capital into this thing, but then you have to count on the developer actually like making something. It's all very, very fraught. Anyway, let's move on to, uh, we'll do base Baron and then we'll do a promoted post.

• 1:59:21Jordi Hays?

  Yep.

• 1:59:22John Coogan?

  Base Baron says, "E-wack" or "The Memetic Death and Rebirth of Tech." If there was ever a moment-

• 1:59:29Jordi Hays?

  Called it E-wack.

• 1:59:29John Coogan?

  E-wack. If there was ever a moment, if there was ever a movement destined to fizzle out like a damp matchstick, it was EAC. At least the EA's had the self-respect to make their leaders serve hard time. That's BFing.

• 1:59:45John Coogan?

  Here we see a movement ostensibly about the relentless push towards a techno-capital singularity, instead in my, instead mired in the quicksand of its own internal contradictions and the inherent flaws of its messiahs. First, consider the misalignment between the movement's professed ideals and the actual behavior of its leading lights. EAC, in its essence, was meant to be a clarion call for the acceleration of technology, a rallying cry for those who see the universe's entropic dance as a mandate for human ingenuity to multiply complex, uh, complexity and intelligence. Instead, what we observe instead is a parade of digital anons,

• 2:00:28John Coogan?

  ensconced in their online echo chambers chanting accelerate like a mantra detached from any real world action. These are not the builders or the shapers, they are the spectators mistaking their fervor for progress. And he goes on to write about, wow, he really wrote a lot about this. He really cares. And he got 10 likes for it, so congrats.

• 2:00:47Jordi Hays?

  Wow. No, I think, uh, but I, but, but there's, there's a real, um, sort of very real message here where, uh, when you have a movement like, uh,

• 2:01:01John Coogan?

  It's very hard to go from doxed to not doxed. Like, if we knew who Satoshi was, would that be good for the price of Bitcoin? Almost certainly, no.

• 2:01:10Jordi Hays?

  Yeah.

• 2:01:10John Coogan?

  Right? Not even the selling pressure, just every human is flawed. And I find this like, there's so many, there's so many different like, health influencers. Oh, you gotta live this way. And then there's a family influencer. You gotta have a family. And like, work influencers says, oh, you gotta work really hard. And then when you dig into those people, you can always find like, oh, this, this person who's saying you gotta work really hard. Like, they have never had a family, or like, they've never, or they're completely out of shape. And you're like, yeah, wait, like, no one does it all.

• 2:01:35Jordi Hays?

  There's an issue where people commenting under every post, accelerate, accelerate, accelerate. Yeah, it's cool, but I think what, what the Baron's saying is he just wants to see those people actually creating progress in the real world. And not, being part of a movement doesn't mean you're having any type of real tangible impact, right? The way to have a real impact is to participate in the underlying activity that is driving towards the goal of the movement.

• 2:02:04John Coogan?

  Yeah, totally.

• 2:02:06John Coogan?

  Yeah, it's tricky.

• 2:02:06Jordi Hays?

  Love to see Baron, love to see Baron branching out into this more thoughtful.

• 2:02:10John Coogan?

  And I still think Yak was best when it was just a joke at the expense of EA's. And I thought that when it came up, I was like, I never put it in my bio. I never joined these like silly movements. I didn't do, I didn't do the dot E thing. I owned it, but I didn't put it in my handle. I didn't do the NFT picture. I have, I have trouble like joining like these big like movements because I feel like you're always very risky. You're on the top, it could backfire, but with.

• 2:02:36Jordi Hays?

  You'd rather.

• 2:02:37John Coogan?

  I was like, super aligned, but I thought it was just so funny to just be like, oh, we're poking these like super serious EA's who are like, oh, we need to like, put everything in the spreadsheet. And I was like, these people kind of need to be made fun of. And that's when Yak is at its best. And then when it became this super serious, like, actually acceleration is like the only way. It was like, okay, this is not fun anymore, for me, at least. That was my experience with it.

• 2:02:56Jordi Hays?

  Ruined it.

• 2:02:57John Coogan?

  It ruined it.

• 2:02:59Jordi Hays?

  We got to promote a post on a more light-hearted note, but also serious at the same time. We have a 19.

• 2:03:06John Coogan?

  John's.

• 2:03:08Jordi Hays?

  You're interrupting the post, John.

• 2:03:10John Coogan?

  Let's go.

• 2:03:10Jordi Hays?

  Relax. The 1966 Aston Martin DB6 shooting brake by FLM Panelcraft is a rare and striking example of bespoke British craftsmanship.

• 2:03:20Jordi Hays?

  With only three produced and one in left-hand drive. And I just have a thing for shooting brakes. I, the first car that I ever, you know, had access to was a Toyota Corolla that was triple my age at the time. Uh, very, uh, paint chipping, uh, you know, hundreds, uh, probably 150,000 miles on it. Um, ever since then, I've loved shooting brakes. I, I, I was lucky to own a Ferrari FF, uh, for, for a while. Great car, thought it would be a good, uh, family car, but the Ferrari reliability, uh, was, was somewhat of an issue. Um, but this thing is just amazing. I mean, imagine, uh, imagine driving across the country in that, um, putting some real miles on it. Uh, somebody in our audience should do that.

• 2:04:05Jordi Hays?

  So great, uh, great example here.

• 2:04:08John Coogan?

  Great pickup. Yeah. Uh, let's go to Chairman Burb Brenanki. Love the name. He's, I'm plotting on your rise, bro. I'm literally up in the lab scheming on beautiful abundance for you. I'm cooking up ways for a rising tide to lift all of our boats. I'm praying for your gains. I'm lighting a candle to your inevitable splendor, dude.

• 2:04:29Jordi Hays?

  Just a little bit.

• 2:04:31John Coogan?

  Plotting on your rise.

• 2:04:32Jordi Hays?

  I love, I love this format.

• 2:04:34John Coogan?

  It's great.

• 2:04:34Jordi Hays?

  It's been ripping around.

• 2:04:36John Coogan?

  Don't, don't plot on people's downfalls, plot on their rise.

• 2:04:39Jordi Hays?

  I don't think, I don't think enough group chats, a lot of group chats have this sort of unserious, people dropping memes and talking, talking a little smack, stuff like that. I want to see group chats that are, uh, oriented around winning together.

• 2:04:55John Coogan?

  I'm in one. It's called iron sharpens iron.

• 2:04:58Jordi Hays?

  Iron sharpens iron.

• 2:04:59John Coogan?

  Everyone takes it very seriously.

• 2:05:00Jordi Hays?

  Yeah, but the issue is, is people at the top are hyper competitive.

• 2:05:03John Coogan?

  Yeah, there's a little bit of that.

• 2:05:05Jordi Hays?

  You gotta really, you gotta cut it down.

• 2:05:07John Coogan?

  This one's the most positive I've ever been in.

• 2:05:09Jordi Hays?

  Five people oriented around winning together.

• 2:05:12John Coogan?

  Yep.

• 2:05:12Jordi Hays?

  Helping the brothers succeed at all costs. That's what we're trying to do.

• 2:05:15John Coogan?

  That's what we're trying to build with the show.

• 2:05:17Jordi Hays?

  That's why we, we run ads, uh, you know, you, you scratch our back.

• 2:05:21John Coogan?

  Yeah. You leave us a five star review, you throw an ad in there, we'll read it on the show.

• 2:05:25Jordi Hays?

  There you go.

• 2:05:26John Coogan?

  Let's go to Catherine Boyle. She says, America is in deal mode and deal mode is infectious. If you have a deal you want to do, now is it a good time to get it done? Also, it's time to get married. Dive in. It's the golden, it's the golden age of America.

• 2:05:39Jordi Hays?

  She just added that?

• 2:05:39John Coogan?

  Yeah, I like that little follow up like, oh, by the way.

• 2:05:42Jordi Hays?

  If you have a post that does well.

• 2:05:44John Coogan?

  This post sponsored by.

• 2:05:45Jordi Hays?

  By Tronatalism.

• 2:05:46John Coogan?

  Yeah, Tronatalism.

• 2:05:48Jordi Hays?

  Yeah, the, the, the deal energy is real. It's never, it's rarely time, it's really a bad time to do a deal, right? You want to be greedy when others are fearful, right? So people are pretty optimistic right now for a lot of good reasons, but, um, but yeah, go do some deals. It's a good call to action, right?

• 2:06:07John Coogan?

  It's great. Yeah.

• 2:06:08Jordi Hays?

  Simply.

• 2:06:09John Coogan?

  They are good deal. Yeah. Deal, deals, deal mode. Let's go to Ben Hylak. He says, chat GPT can now use Claude.

• 2:06:18Jordi Hays?

  And so Ben immediately, of course, he's immediately racking it.

• 2:06:21John Coogan?

  Five K likes. Good post. Yeah. So he went to operator, create a new, uh, create a new chat to create a, a new B to B dashboard. And try using the app and tell me what you think. And so he's having operator open Claude, log him in, and then use Claude to code for him. And it's all just very silly, but, uh, yeah, I don't know. I mean, it's probably a good stress test of the system if you can use that.

• 2:06:49Jordi Hays?

  It is interesting. So, so great marketing for Ben because he has a, a analytics platform, I believe, for, for AI products. But, uh, it's interesting how we're seeing already that, uh, somebody, I forget who posted this, that AI is eating UI, right? Which eventually you will be able to use a model to use another model. So your, that your preferred model, if you want to do something with another model, they'll just say, hey, go find the best model to do this task or like create this type of content and it'll just do it. And so you may never interact with the end UI. You'll just interact with your preferred model.

• 2:07:32Jordi Hays?

  And that is why, for all the hate and shade that people throw at OpenAI, oh, it's overvalued, it's still owning being AI for the average consumer has a massive value.

• 2:07:46John Coogan?

  You're an educator and you're the front end. Yeah, and when, and it was last year or the year before, OpenAI launched GPTs, where you could go in and create a custom GPT and you could upload specific documents, give it fine tuning instructions, and there was like an app store marketplace. And every once in a while, I made one where I uploaded like a bunch of books and a bunch of information, PDFs about a specific topic, and then I could query that. And there were a couple others, like one that would help you write threads on X. And I think the idea there was that you let people build a ton of different GPTs, and then the one master GPT can route to one. And people were joking that there was one that was like Laundry Buddy,

• 2:08:30John Coogan?

  that would just help you find like a laundromat. But in theory, it's like, yeah, like, maybe someone's made a GPT that does one thing much better. And then when you query the master GPT chat, it can say, oh, okay, I'm going down. And this already happens with a mixture of experts and the reasoning models. But we can say, oh, okay, there's a coding model that's really good, and I need to write some codes, let me go over there and use that. Or there's a booking integration. And so all of that's happening kind of under the hood. It's funny in this frame, but it's very, very real. So let's move on to Lulu. She says, oh, we should start with the brother of the year. So Bank of America posted an image that says,

• 2:09:15John Coogan?

  "Bank of America serves more than 70 million clients, and we welcome conservatives. We would never close accounts for political reasons and don't have a political litmus test." And it's really that like, my shirt that says I'm innocent of killing people is raising more questions than it's answering. Yeah, that type of thing.

• 2:09:32Jordi Hays?

  Yeah.

• 2:09:33John Coogan?

  And then there was instantly a community note saying, "Bank of America has been placed on notice by 15 state attorneys general for de-banking conservatives." And Lulu is breaking down exactly what went wrong here. One, if you turn off replies, you you look guilty.

• 2:09:49Jordi Hays?

  Yep.

• 2:09:49John Coogan?

  You can't turn off quote tweets, so you're just setting yourself up to get ratioed even harder by other means. You should have anticipated the community note, which looks worse than either than either comments or quote tweets. And if you're in the position of having to make a statement like this, comms and social media aren't your biggest problems. Rough. Yeah, I don't even know why they had to make this.

• 2:10:11Jordi Hays?

  Eric Prince.

• 2:10:11John Coogan?

  Yeah, with saying.

• 2:10:12Jordi Hays?

  Quote tweet.

• 2:10:12John Coogan?

  Debanked by you guys, like what?

• 2:10:14Jordi Hays?

  And and his family and his ex wife and his ex wife's husband.

• 2:10:19John Coogan?

  Whoa.

• 2:10:19Jordi Hays?

  Because they were receiving.

• 2:10:20John Coogan?

  Yeah, payments.

• 2:10:21Jordi Hays?

  Uh, whatever.

• 2:10:23John Coogan?

  Alimony.

• 2:10:23Jordi Hays?

  Alimony. Yeah, yeah.

• 2:10:25John Coogan?

  Wow. Yeah, rough. Not a good day.

• 2:10:28Jordi Hays?

  And and the whole thing is there were fintech companies emerging over the last six years, probably four years, I guess.

• 2:10:36John Coogan?

  Sure.

• 2:10:36Jordi Hays?

  Five years that were explicitly because conservatives were being debanked.

• 2:10:40John Coogan?

  Yep.

• 2:10:40Jordi Hays?

  They were. They were saying this is the the right wing, which we shouldn't have political leaning.

• 2:10:45John Coogan?

  Yeah, it's very silly.

• 2:10:46Jordi Hays?

  Our financial institutions should not be political.

• 2:10:49John Coogan?

  Yeah.

• 2:10:49Jordi Hays?

  Politically leaning at all.

• 2:10:50John Coogan?

  Yeah.

• 2:10:51Jordi Hays?

  Let's just keep politics out of. We keep politics out of the show. Let's keep them out of our banking system.

• 2:10:56John Coogan?

  I agree. I agree. Oh, this is. This is a fun one. I know you're gonna have a lot to say about this. Jared Friedman says Rocketable is the first is building the first one person, one billion dollar company. The plan is simple. Buy up software companies, fire all the employees and replace them with AI agents. Literally the most AGI pilled idea I have ever heard.

• 2:11:19Jordi Hays?

  OK, so like many topics, like like many podcasters, podcasters often have a lot to say.

• 2:11:27John Coogan?

  Yep.

• 2:11:27Jordi Hays?

  Uh, I'll preface this by saying I don't work in directly in in private equity.

• 2:11:32John Coogan?

  Yep.

• 2:11:32Jordi Hays?

  And I'm not a software engineer, but and the other thing I would say is I I like this sort of big, bold idea. It's cool to have this, you know, major milestone, one person, one billion dollar company.

• 2:11:46John Coogan?

  Yeah.

• 2:11:46Jordi Hays?

  Very exciting. And I think that many sort of this is a cool experiment. And is worth funding from Y C and is worth the founder trying to take a crack at it.

• 2:11:57John Coogan?

  Sure.

• 2:11:57Jordi Hays?

  But I I I. I have to, Matt, like, here's the thing, like, buying companies, companies trade on a market.

• 2:12:05John Coogan?

  Yep.

• 2:12:05Jordi Hays?

  And it's not perfectly efficient.

• 2:12:07John Coogan?

  Sure.

• 2:12:07Jordi Hays?

  But any company worth buying, unless the owner does not have, you know, is not, doesn't want to get the best possible price.

• 2:12:17John Coogan?

  Yep.

• 2:12:18Jordi Hays?

  Is going to talk to a lot of people, right? So if you're this one-person company, and to get one deal done, maybe you have to talk to like 200 companies, right? And all those 200 companies are talking to other private equity firms, other individuals, they're exploring raising other forms of capital. They have all these different options.

• 2:12:36John Coogan?

  Yep.

• 2:12:37Jordi Hays?

  I don't know that the classic private equity strategy has been to come in, fire all the unnecessary people, replace them with modern software. And so to me, I'm not quite sure that this, while I'm in favor of the experiment, I'm not quite, it would be, I would find it hard-pressed to invest in the founder unless it was like a personal relationship. Because I don't know that you're going to have any edge over the many other private equity firms that will all presumably follow the same strategy, right?

• 2:13:06John Coogan?

  Yeah.

• 2:13:06Jordi Hays?

  There's classic examples of software PE guys coming in, and there's 100 employees at the company, firing 90 of them, right? And so firing all of them, I don't know how much better.

• 2:13:21John Coogan?

  It's a weird positioning in brand.

• 2:13:23Jordi Hays?

  Yeah, and it's tough as a buyer.

• 2:13:25John Coogan?

  It's very difficult to go viral.

• 2:13:25Jordi Hays?

  Historically, yeah, it's a very good way to get attention, but what happens if this post goes viral? A bunch of talented people say, hey, I want to work on this, sounds fun. And you're like, well, sorry, we want to be a one-person, one-billion-dollar company. We'll hire you as a contractor, or something like that, just can't have you on the W2. And so why, and so setting these artificial constraints is cool as an experiment to say, let's see what's possible, what's going to come out of this? And maybe it will force us to develop agentic software that ends up being better. But I thought it was interesting, the Gumroad founder now has something called anti-work.

• 2:14:01John Coogan?

  Okay.

• 2:14:02Jordi Hays?

  Where you can come, just build software.

• 2:14:04John Coogan?

  Sure.

• 2:14:04Jordi Hays?

  To replace humans at Gumroad.

• 2:14:06John Coogan?

  Oh, okay.

• 2:14:07Jordi Hays?

  I think anti-work is owned by Gumroad.

• 2:14:09John Coogan?

  Sure.

• 2:14:09Jordi Hays?

  And so there's other experiments that are going at this, but the main thing is, this guy isn't just competing.

• 2:14:15John Coogan?

  Yeah.

• 2:14:15Jordi Hays?

  He's competing with every.

• 2:14:18Jordi Hays?

  Private equity firm that buys software companies and they don't care that you just have one person on your team. If they have a deal that they want to win, they'll staff it with five people.

• 2:14:28John Coogan?

  Yep.

• 2:14:29Jordi Hays?

  They'll tell the founder, hey, we're going to let go of a lot of people because we want to increase earnings. But we're not going to let go of your, you know, we're not going to let go of you or whatever, you know, whatever. And so it really comes down to paying a good price, winning the deal, knowing that the deal is going to happen.

• 2:14:43John Coogan?

  Yeah.

• 2:14:43Jordi Hays?

  And I don't see business owners being too thrilled about the thesis, right?

• 2:14:50John Coogan?

  Yeah, exactly.

• 2:14:51Jordi Hays?

  You're going to fire my whole team.

• 2:14:52John Coogan?

  It's like, no, more like, even if you sell the private equity, if you've built up a business, you're like, well, yeah, like, you're probably going to trim some people here and there, wind down some relationships over time. Sure, the company might be smaller in a few years, but the idea of just like, oh, day one, the goal is just like, zero employees, like, screw everyone. It's like even more ruthless and like, I mean, when you go to the website of a private equity company, they don't put front and center. Because sometimes they don't, like, sometimes they actually grow the staff because that's what's best for the business. And they're really like, they're, they're in some ways more ruthless or maybe less ruthless, but they're really just saying like, we, we actually just care about shareholder value. And so that might mean more jobs, that might mean pay raises, that might mean pay cuts.

• 2:15:37John Coogan?

  It's like, it's very dependent on what is.

• 2:15:40Jordi Hays?

  Yeah, maybe what this turns into is one person being the CEO.

• 2:15:45John Coogan?

  Yeah.

• 2:15:46Jordi Hays?

  Because you still need a chief executive.

• 2:15:48John Coogan?

  Probably.

• 2:15:48Jordi Hays?

  Officer, presumably for some amount of time.

• 2:15:54Jordi Hays?

  Anyways, I'm excited to see it play out. We'll cover it on the show. I want them to be successful and let's see what happens.

• 2:16:00John Coogan?

  Yep.

• 2:16:02John Coogan?

  Let's go through some other stuff.

• 2:16:06John Coogan?

  Bill Halligan says, the CEOs of the fastest growing startups are doing the following. 100% in the office, two, very, very lean headcount, three, mostly homegrown exec teams, four, shooting for $1 trillion, unicorns are dead, and five, 80-hour work weeks. You love it? You put it in there because you're excited?

• 2:16:26Jordi Hays?

  Yeah.

• 2:16:26John Coogan?

  Shooting for a trillion? About this, a couple, a couple of companies have been talking about a trillion. I mean, like, there's more trillion dollar firms than ever now, so.

• 2:16:34Jordi Hays?

  You're only a few 10x's away from being a trillion dollar company.

• 2:16:37John Coogan?

  That's true. That's true.

• 2:16:40Jordi Hays?

  I think, I think this is accurate.

• 2:16:41John Coogan?

  I mean, also like, it's just hard to underwrite.

• 2:16:42Jordi Hays?

  And this is the dynamic right now. Yeah, this, this is dynamic. So if everybody has access to these AI tools that make everybody more efficient, it actually just means that you should work even more to just increase the returns on that leverage.

• 2:16:57John Coogan?

  Totally.

• 2:16:58Jordi Hays?

  So.

• 2:16:59John Coogan?

  But you know, if you're saying 100% in the office, don't let me catch you on a Zoom podcast, Brian, because I want to see you doing it in person.

• 2:17:06Jordi Hays?

  That's right.

• 2:17:09John Coogan?

  Ray says cursor is down. I'm writing organic farm raised, non-GMO code by hand, the way our ancestors used to do. 2K likes. A lot of people using cursor, they're, they're excited. I, I saw people got cursor working with, with DeepSeek under the hood.

• 2:17:27Jordi Hays?

  Really?

• 2:17:28John Coogan?

  That's the most, that's the most inorganic, the most non-farm raised code you could possibly have.

• 2:17:34Jordi Hays?

  Coding with some of these AI tools like Devon and, and cursor is like, retired people in Vegas on the slot machines who are just like.

• 2:17:44John Coogan?

  Yep, yep, yep. Tap, tap, tap, tap, tap. But you gotta get the code written one way or another. Let's do another promoted post and we'll close that with a bucket poll.

• 2:17:54Jordi Hays?

  Promoted post from our friend Sean Frank. Not his first time on the podcast, certainly not his last. He goes, that's a lot of meta spend. He was sent a plaque for Ridge for being in the 100 million dollar club on Ridge. That means they have spent $100 million with the greatest financial institution.

• 2:18:15John Coogan?

  Through their ramp cards.

• 2:18:16Jordi Hays?

  Through their, now, well, they have a bill, they have a payments product too. So not, not necessarily all through their cards, although it's possible. But it, but, but yeah, and, and just goes to show, I mean, the Ridge is a perfect example of a ramp customer. Very large, lots of, lots of net income and run extremely efficiently.

• 2:18:37John Coogan?

  And I love that it's a deal toy. We need to bring back deal toys.

• 2:18:41Jordi Hays?

  We've been trying to bring back deal toys. We're working on some of our own.

• 2:18:44John Coogan?

  Yep.

• 2:18:44Jordi Hays?

  So if you're a company or a firm.

• 2:18:47John Coogan?

  And it's just

• 2:18:47Jordi Hays?

  Put it on your list.

• 2:18:48John Coogan?

  It's gonna go on the desk. It's gonna be a constant reminder of like, yeah, Ramp cares about me as a as a business counterparty, which is great.

• 2:18:56Jordi Hays?

  I think this is in the back of a truck bed, too.

• 2:18:58John Coogan?

  Oh, really?

• 2:18:58Jordi Hays?

  It's cool.

• 2:18:59John Coogan?

  It's cool.

• 2:19:00Jordi Hays?

  Very cool.

• 2:19:01John Coogan?

  Cool. Well, let's close out with this bucket poll from Blue, Blue W Mist. Blue says, you are getting lapped by people 50% dumber than you because they don't overthink stuff. Aim, fire, correct later. I love it.

• 2:19:16Jordi Hays?

  Some good inspirational. Ties into your, your strategy recently, golden retriever mode.

• 2:19:20John Coogan?

  Retriever maxing.

• 2:19:21Jordi Hays?

  Yeah.

• 2:19:22John Coogan?

  Gotta just be friendly, hot and dumb.

• 2:19:24Jordi Hays?

  Yeah.

• 2:19:24John Coogan?

  Intelligence is gonna be too cheap to me.

• 2:19:26Jordi Hays?

  But high energy.

• 2:19:27John Coogan?

  High energy, high energy. Just do stuff. Just get out there.

• 2:19:30Jordi Hays?

  Just bark plays. Bark. Let your dogs bark. Grab that frisbee out of the air. Grab that capital.

• 2:19:36John Coogan?

  That half a trillion? Go get it.

• 2:19:37Jordi Hays?

  Half a trillion. Go for one trillion.

• 2:19:39John Coogan?

  Woof woof.

• 2:19:40Jordi Hays?

  Bark bark.

• 2:19:41John Coogan?

  Let's go.

• 2:19:42Jordi Hays?

  We'll see you on Monday.

• 2:19:44John Coogan?

  Please go in the, it was a five star review and leave an ad for your company or a friend's company in the review comments. We love these five star reviews. We'll print it out and read it on the show. It's a free ad read.

• 2:19:54Jordi Hays?

  Also big Monday. Uh, as of now, we're planning to do our first ever live show.

• 2:20:00John Coogan?

  Oh, yeah.

• 2:20:00Jordi Hays?

  Happening from around, call it 11 to 2 PM Pacific.

• 2:20:05John Coogan?

  Sounds great.

• 2:20:05Jordi Hays?

  Uh, you're not gonna want to miss it. We're very excited to go live and, uh, have a good weekend.

• 2:20:11John Coogan?

  Thanks, everyone. Bye.