20VC: Will SpaceX IPO at $1.5TRN | Will Cursor Kill Figma | Lightspeed Raises $9BN | OpenAI: $1BN from Disney, New CRO & #1 App in App Store | Oracle and Broadcom Hit: Now the Time to Buy?

AGENDA: 03:32 Lightspeed's $9 Billion Fundraise 05:20 The Impact of Mega Funds on Seed VCs 10:09 The Supercycle of Growth and Late-Stage Investments 13:06 Disney Invests $1BN into OpenAI and What It Means 23:19 Oracle Hit Hard: Is Now the Time to Buy 28:34 Broadcom's Market Cap Drop and Anthropic's AI Chip Orders 35:04 Cursor Competes with Figma: The Convergence of Design and Coding Tools 46:20 The Biggest Danger for Incumbents: Being Maimed by AI 55:28 Boom Supersonic Raising $300M to… Power Data Centres… WTF 01:00:24 Will SpaceX IPO at $1.5TRN and The Elon Option Value

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

• 0:00Speaker 00

  Tick, tick, insert nine billion dollars.

• 0:02Speaker 01

  All these leaders not IPOing is the greatest gift to venture in our lifetimes. It's playing the growth super cycle bet today. That's the winning play.

• 0:10Speaker 00

  There is nothing as terrifying as a high growth bet that slows down. This is the epicenter of the enterprise AI revolution right now. You gotta make yourself cool because thirty percent growth, that's what's cool. What I realize is you have to factor in what I'm now going to refer to as the E O V. The Elon option value. You can't run the numbers on SpaceX and come up with the one point five trillion. You just can't.

• 0:33Harry Stebbings?

  This is twenty VC with me, Harry Stebbings. It is my favorite show of the week. Jason Lemkin, Rory O'Driscoll, the biggest news in tech, no politics. This week, we discuss Lightspeed's nine billion dollar fundraiser. Will Elon be able to take SpaceX public at one point five trillion dollars? And all the goings on that happened at OpenAI HQ. Disney's one billion dollar investment, topping the charts for the App Store this year and so much more. As always, I want this show to be the best episode you listen to in a week. Let me know what we can do to make it better. Harry at twenty VC dot com. But before we dive into the show today, now most people who get scammed never talk about it.

• 1:14Harry Stebbings?

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• 1:55Harry Stebbings?

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• 2:39Harry Stebbings?

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• 3:24Harry Stebbings?

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• 4:09Harry Stebbings?

  No Figma imports, no messy HTML, just design, iterate, and ship, all in one place. And it's completely free to start. Ready to design, iterate, and publish all in one tool? Start creating for free at framer.com/ design and use the code 20VC for a free month of Framer Pro. That's framer.com/ design and use the promo code 20VC. Framer.com/ design promo code 20VC. Rules and restrictions may apply. You have now arrived at your destination. Boys, it is great to be back. Jason, you look very smart today. Thank you for joining us from the beach house.

• 4:47Speaker 01

  You're welcome.

• 4:48Harry Stebbings?

  Gotta have one. Gotta have one. Me and Rory are in the office, but we're back. What can I say?

• 4:53Speaker 01

  I'm just, I've given up based on your tweet because I'm not in OpenAI or Anthropic. So I've decided to call it, call it a day for the rest of the year, I think, right?

• 5:00Harry Stebbings?

  Listen, you're smart, dude. What's the point otherwise, right?

• 5:02Speaker 01

  What's the point? Yeah.

• 5:04Harry Stebbings?

  Well, what's the point indeed if you don't have mega funds? Lightspeed raises $9 billion across six funds. Point number one. I did like backward maths on it to just understand how that's split up. It's about $2 billion for venture and for early is how that equates. And then, you know, $7 billion across other vehicles, mostly growth. So the $9 billion is a bit misleading. The question becomes to my tweet, if you're not playing the big game, do you really matter?

• 5:33Speaker 01

  Kudos to Lightspeed, right? They're playing the game on the field and it's bad for seed VCs. And I put bad in air quotes, right? Because whether it's two or nine, and you got to slice these funds up to Harry's point, right? To really understand what's going on. It's not all nine for seed. It really means you don't care what you pay for seed. It just doesn't matter and you work for speed and let's do the math. This is why we have 20 or 30 million pre-seed rounds because it just doesn't matter at that scale, does it? You just got to get into 100 billion outcome. I'm not, I'm not saying it's bad. It just, it continues to contribute to the barbell, the barbell side of venture.

• 6:07Speaker 00

  It's that Jason, I gotta tell you, that's such a funny answer because it's kind of like, it's the classic human thing. You know, the world is ending, but what does it mean for me? Yeah, Lightspeed raised $9 billion, but Jason's first comment is what does it mean for my business? Which, you know, it's just a good reminder that, you know, everything is personal. But thinking about it, to state the obvious, they earned it. I was just thinking about the last 12 months, right? If you're evaluating. A big multi-stage manager as an LP in 2025, you probably want to see him do two things. You want to see their early fund have wins eight or nine years in, maybe 10, 12 years in. And in the last two years, they had Rubik last year and Navan this year. So an early-stage deal where they were seed or A, go the distance.

• 6:50Speaker 00

  And then the second thing you want, because you're not just going to give them half a billion for early stages. You want to see, are they picking and concentrating in the late-stage deals? And obviously, in the last 12, 24 months, Lightspeed put, you know, by all accounts, a billion in two rounds of Atropic. And that feels pretty smart right now. So if you zoom out a million miles, they did the two things that a multi-stage manager has to do. They had great early-stage companies that they built over 10 or 12 years. And they stuffed a ton of money in the hot late-stage deals. Tick, tick, insert $9 billion. So it all makes sense. If you want to make this bet as an LP, that's the kind of fund you'd be looking at. Those are the success criteria to give someone $9 billion.

• 7:30Speaker 01

  To raise $9 billion, actually, you can make the math barely work on paper with the exits. But you've got to be in so many huge ones, right? You have to have even forgotten Lightspeed was in a few of the IPOs we have. Otherwise, the math hasn't been so how.

• 7:42Harry Stebbings?

  But then, you know, I just released a show on Monday with David George. And Databricks 7x'd a billion-dollar fund for them, and Coinbase 5x'd it. That fund is 15x on a billion-dollar fund.

• 7:53Speaker 01

  Yes, seats for suckers.

• 7:55Speaker 00

  If you're in one of the, I think Coinbase's case, three or four largest exits. And in Databricks, what looks like one of the four or five largest upcoming exits. Then most math works, right? I'm shocked to discover that if you buy the largest market cap company on the planet, you probably make money. If you buy in early, right? I mean, it's really, provided you execute and get in those deals, it can work.

• 8:16Harry Stebbings?

  This is why, though, I'm always so surprised by LP's unwavering appetite for early-stage managers in SF between 50 and $100 million fund size. Because to your point, Jason, what Lightspeed can pay at seed is completely irrelevant. They don't give a shit. 30, 40, 50, it doesn't matter. It's an entry ticket for them to see the A, the B, the C. And so I'm just consistently surprised by LP appetite for pure seed play, given, to me, the destruction of seed economics by multi-stage.

• 8:48Speaker 01

  I don't, I think that's a myth. I don't actually see that appetite. I see that appetite having faded since 2021, and I do not see a resurgence of finding tiny new managers. I don't see it. They want to find a 20 VC or a Neo or whatever, but I don't think it's easy for emerging managers.

• 9:05Speaker 00

  There's no doubt that the prevalence of this kind of money must make it slightly harder at the margin for everyone, you know, further down the food chain to make money. Because you are competing with someone who does have the ability to and the desire to invest a lot of money in the very best companies. And if you look at, actually, you cited Net Scope and if you, and Nirvan, it's that, you know, amazing job by LifeSpine. And one of the most interesting things is the aggregate return on one of them, I can't remember which was only a six, only a six or a seven X. But the real insight was they got $200 million plus to work. That's the game they're playing with their nine billion, and it's a great game and they do it bloody well, right? But your point, you're right, Harry. I do think, I can't quantify it, and I'm not a seed investor, but there's no doubt that the dynamics of

• 9:50Speaker 00

  a multi-stage firm mean that if they choose to, that they can swamp a seed business to some extent and just write it off as marketing.

• 9:59Harry Stebbings?

  I totally agree with that and use it as an acquisition to get into the later-stage rounds, as we've discussed. And that's why Dragonair raising a $4.3 billion venture fund comes in. So there's more than 13 billion across those two. But have we ever seen late stages competitive as this?

• 10:15Speaker 00

  Competitive is an interesting word. I mean, the better question might be, how do you feel about the capital versus the potential return? And even though it's, yeah, there's a lot of capital now, it's competitive. One of the attractive things about now and the reason this money is flowing, there are a lot of amazing late-stage companies that look like they're growing very strongly, that are places to put that capital. 2021, it felt like that, but it turned out to be treacherous. And a lot of, we'll talk about it later, a lot of those companies, the growth just attenuated and indeed went backwards. So it was a very competitive time in 21 to be in late-stage growth capital, and it turned out to be a very dangerous time. It is competitive today. But I suppose one of the quote blessings of having OpenAI and Anthropic in the market is they can soak up 60 billion of your late-stage dollars and just keep on moving.

• 11:00Speaker 00

  So there are places to put that money. So I don't know if it'll be as treacherously competitive today as it was in 21. We'll see. The wall of money keeps on climbing up.

• 11:10Speaker 01

  And maybe it's not directly to the point, but you know, Rory made this point when we started this pod and it's become true in spades, just not that long later, which is all these leaders not IPO-ing is the greatest gift to venture in our lifetimes. The greatest gift to venture capital, the fact that you can flood these top 20 companies with venture capital, keep, maybe it's not venture capital, right? Maybe it's a fusion of P. It doesn't matter. The fact that the VCs are able to keep this for themselves. Of course, Lightspeed should raise 9 billion because the public markets aren't getting this. And when people used to say that they're getting ripped off, the retail investors, I used to scoff because most IPOs don't do well, right? But this is a super cycle where, you know, growth is the big beneficiary of this super cycle.

• 11:53Speaker 01

  It wasn't true of other super cycles, not of the soccer era and others. And if you're not playing that game, you're losing to Harry's point. That's the real game. It's not just being an OpenAI. It's playing the growth super cycle bet today. That's the winning play.

• 12:05Speaker 00

  Totally. There's a combination of reasons for no IPOs, but you no doubt one of them was vague consumer protection post 2000. And you're right, the good news is the consumer's been protected from a whole load of bad deals where you can lose 1X your money. And the bad news is they've left the entire compounding of Databricks, of SpaceX, of Anthropic, of OpenAI on the table. If SpaceX goes public north of a trillion, if OpenAI goes public at 6, 800 billion, all that value's been taken in the private arena. And you're right, it's been great for, in particular, the late-stage firms who've been able to get early-stage venture economics on masses of money and looks to all intents and purposes, put it to work fairly profitably.

• 12:45Speaker 01

  Yeah, I mean, it's a different time, but if you just compare Tesla and SpaceX just for fun, right? Tesla had to IPO. Now, it was a different time. It really barely had any revenue, but same guy running them. It IPO'd at 1.7 billion, which seemed very expensive, 1.7 billion. Sister company will IPO at 1.7 trillion or 1 trillion. I mean,

• 13:06Speaker 00

  Jason, you're exactly right.

• 13:08Speaker 01

  The difference in time.

• 13:09Speaker 00

  It's a thousand X more. No, it's a stunning difference.

• 13:13Speaker 01

  And that all went to VCs or Elon or others. None of that went to the to the private investor, to the public investors, right?

• 13:19Speaker 00

  Yeah, say what you will about Elon. You're exactly right. Anyone who chose after 2010 could have a 70% compound IRR for 15 years. Exactly. That product was not available for the SpaceX and D2X.

• 13:31Speaker 01

  And he chose. It's the same founder, right? Looking at his different situation, right? You know, I'm sure he wouldn't have taken Tesla public if he had done any other choice a long time ago, but but he kept SpaceX private.

• 13:43Speaker 00

  You're exactly, which gets to my point. I think the primary reason you stay, you go public or stay private is relative cost of capital. You know, he had that difficult private round in Tesla where he had to frankly, save the company from some fairly predatory VC behavior, as he at least recounts that I wasn't in the room, but it sounds convincing. You know, at that point is like the cost of capital from these guys, the VCs is too damn high. Let me go public and it and that's worked for him, obviously, right? And now the cost of capital in the public market feels higher than the private. So everyone's staying here and we'll see how that plays out.

• 14:15Harry Stebbings?

  And speaking of kind of capital ingestion machines, the biggest of all right now is is OpenAI and ChatGPT. As always, this could be called this week in OpenAI, but there was a lot that happened. ChatGPT most downloaded app in the US, Disney investing a billion dollars into OpenAI. And then Denise Deser leaves CEO of Slack to join as CRO. I just want to break them up. The one that I would love to stop.

• 14:40Speaker 01

  Having to give up its cliff to compete.

• 14:42Speaker 00

  Wow.

• 14:43Speaker 01

  That's the flip side of the numbers.

• 14:45Harry Stebbings?

  I mean, this is almost one a day. I mean, but yeah, Sam has got a busy calendar, doesn't he?

• 14:49Speaker 00

  I think we can assume that.

• 14:50Speaker 01

  Yeah. Plus all those other companies.

• 14:53Harry Stebbings?

  Can we start on, it's true, can we start on Disney investing a billion dollars into OpenAI?

• 14:59Speaker 00

  I think it's one of the least interesting. First of all, a billion is neither here, yeah, it's neither here nor there. My understanding is also it's a cross licensing deal. We'll get a billion in equity. We'll give you money. We'll get money back from you as license on the characters that we give you. So it's very round trippy. And, you know, they're leaning into allowing OpenAI as an image generator to use the Disney content to generate images. And the interesting thing is that simultaneously, they sent a cease and desist letter to Google because for on-licensed use of the content. So I don't think it's a huge thing at all. I think it's fairly experimental for Disney to say, okay, we better embrace this new thing. Let's see what happens. We're effectively getting a billion dollars in equity in return for allowing these guys to play with our characters. I thought that was like a yeah. In the scheme of things, interesting, but no op.

• 15:44Speaker 01

  I thought it was a little more interesting as a content creator, which is just that we're entering the next age of beyond just ripping everybody's content off.

• 15:52Speaker 00

  Yep.

• 15:52Speaker 01

  And so I think what Disney is saying, it's a three-year deal, and they're saying, look, in the next era, here's the template. And yeah, we're gonna, this is like when they all take, all the content creators take stuff offline on YouTube or cable, like it's a negotiation. So here's the deal. The good news is OpenAI is the leading consumer player in the space. You're going to get the leading IP in the world. You're going to get Disney. And here are the economics. And now there's a template, just like there's a template for ESPN or Disney with YouTube.

• 16:18Speaker 00

  And that's fair.

• 16:19Speaker 01

  And Google, you're gonna actually, and you may actually have to pay more, because usually the first ones that go in get a slightly better deal, right? Everyone else is gonna pay worse. And we're gonna ratchet up the terms to use our IP. And then in three years, we're gonna raise the rates again. It is an interesting resurgence of the value of IP in the age of AI, when the first history was just rip everybody off. And it was great for all of us as consumers, but it may be the revenge of IP.

• 16:45Speaker 00

  It would be interesting to see in three years, is existing quote unquote old media IP worth a lot in this new age? And is that what consumers want to use? And will it be worth, ChatGPTs or any image generation software, will it be worth their while licensing that IP? Will there be an economic return on it versus UGC type content? But yes, first of all, does it feel good for Disney? And then secondly, does it yield an economic return for the model providers? Do you get any extra return from having that content?

• 17:14Speaker 01

  Disney's a big deal in IP, and I think in three years, no one's going to be working because of AI. I know this sounds facetious. We'll be spending all our time at Disneyland because no one's electively working and the jobs are gone. We're going to watch Disney and live in Disneyland, right? I liked what Bob Iger said, even though I'm not sure what it means, which is that creativity is the new productivity. There's no long tail. What we said three weeks ago doesn't matter, right? It's the constant creativity and creation of top tier assets like 20VC that matter.

• 17:45Harry Stebbings?

  Rory, I understand you're kind of like, it's not the most interesting. But to our point last week and before on Benny off talking about kind of the commoditization of models and the ease of switching. With IP lock-in, hopefully, I'm sure Sam is thinking like this. This is a core element that would retain consumers in a way that other people aren't thinking about.

• 18:05Speaker 00

  The big picture point is that I think makes Benny off wrong in this. It's not a commodity of 800 million people use it and actively go on download on iOS. I think that isn't the defensible mode. How much extra? Would it be 880 million if they have Mickey Mouse? Will it be 820? I don't know. Will that 800 stick? But I think the big picture comment, 2025, the most downloaded app on Apple was ChatGPT. And if you look over the last 10 years, it's interesting. What has been the winner? It's been two years of TikTok, two years of Timu, one year of Zoom. Guess which year, everybody? You know, 2020, the year you realized you needed Zoom. And then, you know, going back some of the kind of social media apps.

• 18:49Harry Stebbings?

  Rory, do you think they will retain the consumer over Gemini as the consumer front end?

• 18:55Speaker 00

  My gut would be yes, because they're all in on making it happen. And, you know, Google obviously has a lot of other ways to push Gemini, but it would be a very uninformed opinion.

• 19:04Speaker 01

  I think to me, listen, that's an interesting like horse race question. To me, for now, the more interesting question is that OpenAI's mobile app, its growth has declined because it has to decline because we've run out of humans on planet Earth. So it'll be interesting to see whether it Robin Hoods, like how well it becomes a meta app, right? Because Robin Hood is on fire, even though its new customers are only going 8%. OpenAI is gonna have to do that. That's the whole point of bringing it ahead of apps and all of that, I guess. Otherwise, it will inherently stagnate because there's, you know, stagnate around a billion or something, or 1.2 billion. So it'll just be fun to watch whether a mega app works for ChatGPT or not.

• 19:41Speaker 00

  I don't know if I buy that. I, I, I think-

• 19:43Speaker 01

  You have to buy it because if you look at the numbers, the growth is down to single digits. Like, it's, it is empirically true on any source. The growth is down to single digits on monthly growth.

• 19:51Speaker 00

  Let's say that, yeah. What you, okay, I buy that sentence. I buy that facts are true. You know, as Senator Moynihan said, we're all entitled to our own opinion, but we all have to have the same facts. So I'm giving you the facts, Jason. The question is, do they go from roughly 800 million? At a one thing here, to what you're saying is, do they do what Robin Hood did and stay at 800 and just sell them all shit? Or they do what Meta did and find ways to go to 4 billion out of 5 billion, pretty much every active human on the planet? That is a big picture question. I'm not sure everyone on the planet wants to do complex AI lookups.

• 20:20Speaker 01

  And if you have no ads, it's tough too. They have cheap versions in India and otherwise. I don't know that they'll be as big as Meta in terms of footprint unless they want to go all in on free.

• 20:28Speaker 00

  Yes, you're right. The reason I push on the Robin Hood thing is, I think in fine, financial, fintech, actually, cancel not just for, in financial in general, the movie is always the same, acquire customers and then cross-sell them up the wazoo, right? Which is what Robert, Robin Hood is doing. The young gambling addicted financial sector, they're gonna give him any product he wants, he or she wants. The interesting question, I don't know what the cross-sell would be for a consumer on chat. I suppose the only thing you can do is drive up the percentage of the free users that opt for their conversion to the 20 buck a month plan.

• 20:58Speaker 01

  Well, there's shopping and there's ads are the classic one, right? And everyone's tried that Instagram for e-commerce ads. I'm not smart enough, but I know that that growth has slowed. There's no debates. It'll be interesting to watch. And if, you know, there's Google versus Gemini armchair quarterback. And then maybe this is one simple reason Anthropic is better is because it doesn't have the same headwinds of already having 800 million users. Like consumer gets you there faster, but maybe Anthropic wins the bigger prize because the enterprise in the backend are just, they've just gotten going.

• 21:30Speaker 00

  I don't think it is the case, but to take your point, there is nothing as terrifying as a high growth bet that slows down. Because what happens is you go from being valued on growth to being valued on cash flow. Right? And you really would not want that to happen while you're still private. Now, I don't think it is. I'm not sounding the alarm on OpenAI. I think that, but the one big risk of the staying private longer bet is that at some point someone has left holding the bag. And we're seeing a lot of it in the class of 21. I'm holding the bag on this thing that I paid 20, 30 times revenues because it was growing at 100% and now it's growing at 8%. It's five years later and I can barely clear the last round price. And that, it would, it would be very bad for a lot of folks if OpenAI's growth slowed. There's no indication it has.

• 22:15Speaker 00

  User growth maybe has slowed to your point, Jason, but they appear to be still finding ways to monetize. But if that were to taper off, it would be a world of pain.

• 22:24Harry Stebbings?

  What about the cliff vesting ending entirely? Emblematic of just the hiring wars that we're seeing? How do you think about that?

• 22:31Speaker 00

  And maybe just an explanation for everyone is that typically when startups hire someone, they obviously universally give stock options. And the typical format is four-year vesting, but with a one-year cliff. In other words, if you leave within the first 12 months, you get nothing. And at the end of the 12th month, you catch up on a full year's vesting and then you vest ratably over the remaining three years. And the idea is you hire people, you go through, you know, there's a lot of change. They leave, you don't, they don't work out early on. Do you really want to accumulate a whole lot of extra shareholders for three months vesting? And when three months vesting was worth $10,000, you could see that. But clearly what's happened here is market. Pressure has said to them hires are saying, I don't want to be here 11 months. Have you whacked me?

• 23:15Speaker 00

  And maybe at current rate, I'm vesting on two or three million bucks. I want to know I'm going to get that. So I think it is a sign of a sign of the times, a sign of the extraordinary sums of money you're dealing with. Where even a individual contributor coming in says, you know, 1148s, just under 25% of my total vesting package is real money. If I'm getting $10 million over four years, it's $2 million if it's slightly less than 12 months. And people will probably say for $2 million bucks, I'm going to push back on vesting and they've clearly decided to give.

• 23:48Speaker 01

  It is, you know, the one thing that's that it took me just an captain obvious beat to get is, it obviously makes leaving easier, right? It makes leaving because if you're leaving somewhere, you've hit your cliff. And so on the one hand, it seems like a dumb idea, like you're creating mercenaries and perhaps you are, but in the age, in, in, you're asking someone that's 18 months into somebody else to leave and wait 12 months to make a dollar? That can be a tough sell in, in, in an age of plenty, right? So they probably also had to make so many exceptions, it stops mattering.

• 24:16Speaker 00

  You're exactly right. I'm sure they had a gazillion exceptions and at some point the VP of HR said, guys, I just can't be dealing with this. Let's just accept this is the market today.

• 24:24Harry Stebbings?

  Listen, Oracle, oh my God. Oracle shares plunged 15% on Friday, disappointing earnings. They've plunged 45% from September highs, 14% down in a week. They've spent $12 billion in quarterly CapEx, higher than the 8.2 that was expected. Bulk of it's going to data centers dedicated to OpenAI. Guys, this is above my pay grade. What's going on?

• 24:51Speaker 00

  Okay. One of the reasons I like to admit I'm wrong is because it then allows me to do I told you so when I'm right. Play the tape back. I mean, I know what I got wrong this year in our conversations. This one, at the time when they had that 30% pop, it was absurd and it's just been unwound. And the pop was because, oh my God, you signed all this revenue. And Evan gets really excited about the RPO. That was about 40, maybe 50, I don't know, 60, 90, 90 days ago, probably last quarter's announcement. And now everyone's like, oh my God. To meet this revenue obligation, you're going to have to incur a whole lot of expenses. Well, shock horror, you just opted to enter a very capital intensive, physical data center building business to service one or two super large customers, principally OpenAI.

• 25:35Speaker 00

  It's a tough business, and I think people are internalizing that. The stock is probably is now below where it was. In fact, I know it is. It's about, I think, fifteen percent below it was when they announced, just before they announced all the quote unquote good news. To me, it was fun to, I'm actually, my real sentiment here was, I knew it and I should have done those shorts. I should have bought those puts. You know, in retrospect, ninety days ago, we were right. It's a sugar high, a total sugar high on a huge contract that with someone who may or may not be able to afford to pay for it, that's OpenAI. And even if they can't afford to pay for it, it's not a great business because it's capital intensive and does not nearly as good as your existing free cash flow positive business.

• 26:14Speaker 01

  So you'd say that it's returned to a, like, a normal, it's not going to rebound from here?

• 26:19Speaker 00

  No.

• 26:20Speaker 01

  That's not what I think.

• 26:21Speaker 00

  No. Oh, you do. Go for it.

• 26:23Speaker 01

  I think, it sounds odd, but let's, let's bring Oracle and CoreWeave in together. I think they are very interesting. And if you look at the leaders, they're the weak guys, okay? They, they don't really own anything themselves. They're at high risk of margin compression. So the market's gonna have jitters between now and an even bigger AI future. We've talked about it. It's gonna have ups and downs. It's gonna have bumps. And it makes sense. Oracle down forty-six percent since September, right? CoreWeave down sixty percent from its high in July. It makes sense. Those should be, have the, they should see the biggest impact from bumps. And there's no reason, actually, listen, I'm not saying that, that these are even the best companies we've ever had. But there's no reason, I don't think they will rebound as the overall trends. I think these are just jitters.

• 27:06Speaker 01

  The, the, the overall trend, I think, is still, we're still anti-gravity here.

• 27:10Speaker 00

  And that's the key question. First of all, I wouldn't do a negative shot. I'd do a putt, but yes, which is the coward's way out. But you're right. I mean, you're exactly right. They, these companies become the high octane bed on AI. If you think it's gonna go up, you buy Google, you get twenty percent appreciation. But if you buy CoreWeave, and you're right, you could get a Double, you are. So they are the highly amplified bet because they are the marginal provider of the commodity. And you are, they have no other businesses to versify.

• 27:37Speaker 01

  They have no IP. Well, Oracle has others, but they have no IP here, right?

• 27:40Speaker 00

  I agree with your characterization. So I suppose to take your point, Jason, if you think the capex cycle has two more years of strong legs, then you could see these guys rebound. And if you think we may have found an equilibrium, but they're not going to, there's not much more increase up from here. And as the marginal investment rate is going to go down from here, then you're right. Then you would be scared of owning them. That's, that's exactly it. It's, it's an easy way to figure out what's, what's going on at the margin in the AI space and at the margins where the money's made.

• 28:10Harry Stebbings?

  This was my question. Is this like a micro market hiccup, small undulation that we pass over? Or is it a canary in the coal mine that's foreshadowing something much bigger to come next year?

• 28:20Speaker 00

  It doesn't have to be something bigger to come. It just, I mean, I always think the markets, they're all, it's like this person always interrogating you for truth. Yeah, the markets are always trying to find out what's true, what's true. Should you really be spending this money? Right? You could argue right now, the market is, the market six months ago was saying, everyone should be spending money on AI and that's great. Now the market's saying Gemini, Google, you keep going. You, you got a plan. Microsoft like to see more of a plan, but yeah, you got this thing. OpenAI, we're good for it. We'll give you $40 billion. Facebook, not so in love. And then Co-Weave and Oracle, you guys, it's not clear to me why you're doing it. So it's doing a good job of kind of filtering through from the overall mega trend, which is amazing to which of the guys have a good plan in this space and which of the guys do not.

• 29:05Speaker 00

  So there is a world, to answer your question, Harry, where what happens next year is, Google still continues to invest in more capex than before, which increases overall demand. But some of these marginal players maybe can't be as aggressive as they've been. Neither the end of the world nor a rebound is a totally plausible scenario.

• 29:22Harry Stebbings?

  That's why me and Jason have bigger social media brands than you, my friend. Because we're great at binary statements.

• 29:30Speaker 00

  In the middle, in the middle. You're so right. The world is full of in the middle and no one wants to hear. By the way, that might explain a lot of our problems in the wider society with social media, but we'll come back to that another time.

• 29:41Harry Stebbings?

  Broadcom was another one, lost 300 billion in market cap in 48 hours. Investors being concerned a 21 billion order from Anthropic will drag down the margins, higher costs in the chips business. Is this a reasonable concern? An order from Anthropic seems like a fairly securitized asset to back. Is this a reasonable concern? And a 300 billion dollar loss in market cap seems like an exaggeration?

• 30:09Speaker 00

  I don't think it's unreasonable in the following sense. It's that one, Broadcom's an amazing story, just an amazing story. You look at what that guy's achieved over the last 10 years, it's stunning. His current market cap, plus or minus 1.6 trillion. As a reminder, the first trillion dollar market cap company was Apple in 2018 and now Broadcom, a company 90% of people couldn't even name or tell what it does, has a 1.6 trillion market cap even after this correction. And I think it's trading at high teens in terms of revenue, sales multiple. So it's not like it's cheap. It totally makes sense that the Anthropic order, it's actually, it's similar to the OpenAI Oracle discussion. Why is Anthropic buying chips from Broadcom? Answer, they don't want to pay 75% gross margins to Nvidia. So it totally makes sense.

• 30:54Speaker 00

  And so they designed this other chip and they say, hey dude, I'll buy this chip from you, but I'm not going to give you quite as much money as I'm giving Nvidia. Because if I'm going to buy a full retail, I might as well go by the designer brand. The whole point is this is meant to be Kohl's here, dude. You're meant to get lower gross margin. So it just makes sense that it's a really good business, they'll make good coin at it. But you're not, it's not going to have quite the same margins and defensibility that you'd expect Nvidia to have, where they're imposing their architecture on their customers. Broadcom is being kind of a made to order business. They're saying, Mr. Customer, Mr. Anthropic, tell me what kind of chip you want and we'll make it, we'll design it, et cetera. But it's not the same as, you know, marketing a branded product like the Nvidia Blackwell or whatever it is. I think, again, it's the same thing.

• 31:38Speaker 00

  The market's just got a little bit of a head at themselves. When you type in the revenue number, you get all excited. When you type in the EPS number, you get a little less excited and it's just this process of discovery. It's just stunning that you can drop 300 billion in a single day. And still be worth 1.6 billion. Let me tell you what a real crash is like. When you're still trading at high teens, sales multiple. It's not like everything went cheap, Harry. It's just slightly less expensive.

• 32:03Speaker 01

  It is interesting you lose so much over guiding 100 basis points lower.

• 32:07Speaker 00

  Yeah.

• 32:07Speaker 01

  What's really interesting, and I'm not smart enough to fully predict this. Who gets a pass on gross margins and who doesn't? If you're a Broadcom or someone, you're not getting any pass, even though you're getting massive AI spend. We're very worried. All we care about is, is, is we're worried you're going to lose insane profitability in the semiconductor industry due to AI. Oracle got this great pass until it didn't. CoreWeave gets apparently an entire pass. OpenAI does, Meta doesn't. I can't keep up with whom, who gets the gross margin pass. All I know is we learned in Palantir, some folks deserve the pass. And then we're going to find out some don't deserve a gross margin pass. I don't know.

• 32:43Harry Stebbings?

  Roy, you, you said it's, it's, it's not a crash and it can get much worse and it can go much lower. Markets are at the same P peaks as 2000 and 2021. Apollo predicted zero public equity returns in the coming years. How did you read that, Roy?

• 32:58Speaker 00

  Sure, I think you have to be very precise of what Apollo said. They said the predicted 10 year return is zero. And this is a piece of work that's fairly well understood. And it's actually a very important piece. It's probably one of the things I look at most. Vanguard send it to you, they're really good about that. They basically show a correlation between entry PE and subsequent 10 year return. And they show three graphs. They show your one year return, there's little or no correlation. In other words, when you buy at a high price, you can, it can still go higher. The correlation gets stronger for five years and it's strongest at 10. In other words, if you buy at a high price, I can't tell you how you'll do next year. Maybe the stocks will keep going up and you'll feel smart.

• 33:40Speaker 00

  But what I can tell you for sure is the probability of making money over 10 years is very correlated to your entry price. And that's the graph that Apollo showed. Cause what they're doing, and it's what all the sensible investment houses and asset managers do. They don't make one year predictions because you can look like an idiot and it's hard to know. I mean, it's not just you look like an idiot, it's actually. Empirically hard to know, but you can say with a high level of certainty that if you buy at a P E that's fifty, sixty, seventy percent higher than the long-term average, your forecast return will be significantly lower. Going back to ninety-nine, two thousand, you see the same thing. You could have said things were expensive in ninety-six, and Greenspan said they were expensive. That's when he gave his irrational exuberance, but shit kept going up for three more years.

• 34:24Speaker 00

  You can't predict the short term. But what was true is by the time you were piling in in ninety-nine, it took ten years for the overall stock market to get back. So you did go zero for ten years. And even more impressively, and this is a really amazing fact, Cisco, the darling of ninety-nine, just got back this week to its ninety-nine stock price. So in other words, if you buy the hyper-expensive company at just the wrong time, it takes twenty-five years to earn it back. That's a compelling statistic, and I think it speaks to the same thing as the Apollo comment. Now, the interesting thing is, what do you do with that information? I know over the next ten years you're screwed, but it might go up next year. Do you stay in? Do you go out and risk being having a ninety-six moment where you leave three more years?

• 35:08Speaker 00

  I mean, I think you actually end up just, you look at your overall asset allocation, but I don't think you go binary on it because you do have that thing of it's not predictive in the short term, but it is a warning sign. There's a reason that nice Mr. Buffett has piled up, you know, three hundred billion in cash because he reads these data too, and he understands them better than most. The meta point to make that kind of goes back to our business, because we're not public market investors, is when you look at all these private valuations that look attractive relative to the public, and they do, you have to say to yourself, they look attractive relative to a public market that it's all-time high. And a more normalized public market might well leave some of these private valuations somewhat high and dry. Now, growth might save you. In a nice story, if the Apollo graph is correct, and you just get zero return for the next

• 35:52Speaker 00

  ten years, and that's not traumatic, that's not the way life and markets work. What tends to happen is at one point in the next two or three years, things drop thirty percent, and then you fall back slowly over the rest of the decade. If that happens, then some of these private valuations that are comped off that could feel lofty.

• 36:08Harry Stebbings?

  We mentioned Broadcom's dip on the back of. Many respects, but one of them being Anthropic. Anthropic announced they're launching an AI coding tool for designers. Jason, I'm super intrigued to hear your thoughts on this. So it's a UI inside the Cursor browser, lets you tweet web apps, drag and drop CSS. It's really the first move kind of up the stack, so to speak, for them. Jason, is this the first credible threat to Figma's position? Where design decisions start?

• 36:37Speaker 01

  You mean, well, you mean Cursor doing it, right? Not Anthropic, right?

• 36:40Harry Stebbings?

  Yeah, sorry Cursor.

• 36:41Speaker 01

  Well, maybe. I think all of us need to be hyper aware of in 26 and 27 is massive convergence of categories. It's not just the old days of seven years later, Datadog would decide to compete with PagerDuty, which certainly hurt them. That's, that's how we grew up. Like a couple of years would go by, you know, all of a sudden now, you know, Brex is competing with its partners rather than partnering with that. That's the old school. AI is creating convergence where the same products can do more things. I'll give you an example and then I'll talk about Cursor because you asked. It's already happened in e-commerce, which I can see, which is that marketing, sales and support have already converged. This last week too, Andrew Byelucky, the CEO of Klaviyo, brought on the ex-co-CEO of Workday to run most of Klaviyo, right? Which is at 1.3 billion, growing 30%.

• 37:26Speaker 01

  Because the entire world of e-commerce software has changed. So he needs to get back to product full time. Because in 2026, 2027, there will be no such thing as marketing software that got Klaviyo public. Marketing, sales, support have already converged to one agent. So it's already happening there. It's actually surprising it's taken a full 12 months to happen in coding. It's a lot of time because if you've built any apps like I have, the disconnect between design and the output, it's the most jarring thing when you get good at something, when you get good at Repl like I am or Cursor or whatever. It's, you can build such cool stuff and you're like, man, the design, it all looks like frigging Claude artifacts. They all look like Claude. Like I can find a vibe-coded site and like 30% of the last YC class looked vibe-coded to me. I could see the Claude artifacts all over their homepage.

• 38:11Speaker 01

  So it kind of breaks your heart. So the fact it honestly took this long is a surprise. So should Cursor own that or Figma should own that? Or someone new? They're all going to converge. You shouldn't have. Different tools for design, prototyping and production. The agents are just too good. And to put differently, what I've learned is we all want to talk to the same agent. Designers, product people, engineers, DevOps. In an ideal world, there's this meta-agent where we all can collaborate and work together as one company, not us all being on 11 different AIs. There's a lot of fracturing in AI. I don't know who will win, and it's probably mean to say Figma feels behind, but it is how it feels as we record. Figma is tiptoeing into vibe coding, just like Canva and others.

• 38:55Speaker 01

  And there is some disruption risk that the tiptoe is too slow.

• 38:58Speaker 00

  I think that's awesome, Jason. That insight on the, I mean, because I want to do the coding Figma thing, but also the bigger Commodore wanting the single agent for everything. That's just a huge insight because it's only become obvious to me in the last few months as I've been talking to companies. No matter how hard you try, you try and translate your prior experience into this. And you have a sales SaaS company, so now you have an AI SaaS company, sales company. You have a SaaS marketing company, so now is there an AI marketing company? And I think you're right on a lot of these processes. The reason you have these separate siloed companies is the humans were siloed. There was a salesperson and a marketing person. But if the AI is doing everything, let's just take the customer journey. You can have a single AI agent within your company,

• 39:40Speaker 00

  dealing with your customers as you're prospecting them, as you're selling them, and as your customer supporting them after they onboard. And I've seen some companies doing that, and I'm like, wow, that's a powerful idea. Because if you think about it, one of the shittiest things about dealing with any company is you start off with sales and you build this rapport and they tell you, they seem to know exactly what you want. And then you just get transitioned to a totally different person and you start again. And it's like you as the customer are being put through that.

• 40:05Speaker 01

  It's not okay in the age of AI.

• 40:06Speaker 00

  And I got to tell you, like, really, I'm thinking of a couple of deals I saw within the last week where what you expressed is suddenly going, you're exactly right. The single view of the customer on the customer side. So I just think that's a really powerful 2026 theme. I don't even know what it means in terms of what kind of apps are built. And I'm thinking of sales and marketing at this point. It will come to Figma and curse in a second, but I just want to say you nailed it there.

• 40:29Harry Stebbings?

  How does that shape your thoughts when you look at investing in support tools as you have done in the past?

• 40:34Speaker 00

  I think all these companies are going to expand their footprint. I think going back to the thing, the good news is there's a huge return on ROI on AI. And I do believe there is. And the bad news is, I think to grab that return over time, you're going to have to be more expansive and aggressive. And you're going to be going into adjacencies much more so than in the past. It's only obvious to me now that I've started to think about it is that if you were selling software to automate work, then you probably sold to each department that did that work. But if you're selling software, AI software to automate an outcome, just sell to the customer who wants the outcome. And they'll be like, yeah, I'll take all that. So I think you're right. We have an investment in customers.

• 41:15Speaker 00

  But we have a number of investments in AI, Sales Stack. I just think over the next one to three years, there's going to be mass convergence. Just like to kind of jump back to Jason's example, in the same way, if there's one, you know, the old line is in any company that you're either selling stuff or making stuff. Well, we just talked about the selling stuff people, but then Jason was talking about the making stuff people. The making stuff people between design and production. I think what he's saying there too is you could argue that instead of having a separate design function and a coding function. I think what you're saying is, does that all come together over time? Is that right, Jason?

• 41:49Speaker 01

  I don't, I think we're going to have designers. I don't think we're going to have multiple platforms. It's better if they're the same. It's so much faster, so much more efficient. I have invested in a small startup called Ally App that sort of bridges it. It lets you vibe code your existing product and change it. And I mean, it's early, there's already insane demand, but that's just the first step. Everyone loves Figma, every designer, I mean, I'm sure some are grouchy, but I think, I think it's up there with Klaviyo. Everyone in e-commerce, their favorite app is Klaviyo because it just gets you more customers. Klaviyo's brought in a COO because their whole business model has changed. It's gonna be there in software in a year. It just doesn't make sense to have to wait days for designs to change.

• 42:29Speaker 01

  And then they only sort of work in my code base and then I've got to integrate it. All these guys added a design mode with, you know, with Google three Pro or whatever it is. They all added a design mode. It's like pretty good. But it's still recycled stuff, but you could see a hint of it where now you can make a somewhat beautiful website while you vibe code. 2026 is going to be 50x better.

• 42:50Harry Stebbings?

  Jason, you're so uninformed on this. If we take that view then of the collapsing of it all into one platform and one location, if that is the outcome, if I pressed you on saying who the winner of that will be then, who will that be? Will that be a Cursor? Will that be a Claude Code? Will that be a Figma?

• 43:07Speaker 01

  Honestly, and I know this sounds, Captain, obvious. I honestly think it's going to be who wants it the most. You almost have to work so hard. You have to 12, 12, 9. As hard as we're working at Cursor, and it's been great, we might have to work even harder, but maybe Figma works even harder. I know this sounds silly, but everyone can copy each other in weeks now, not in months or years or quarters. It's who really, really wills it into existence. I don't think we can sit back as VCs and just, even with our great king-making checkbooks, I don't think we can fully control the outcome. I think the ones that work, that produce 10x more output are honestly the ones that are going to win, the leaders. I don't think we can predict. It's easy to bet in favor of Cursor over Figma because Figma took, what, a decade to get to a billion? And Cursor took, you

• 43:52Speaker 01

  know, a year? So if we're momentum bettors, we have to bet Cursor, right? Even though there's reasons to bet against it, right? They're not designers, they don't have the base, they don't have the customers. But if I had to pick, I would bet on that rapidity today.

• 44:06Harry Stebbings?

  Is this the interim step to Cursor moving down further or up, whichever way you want to take it, into consumers and into lovable and rapid zone?

• 44:15Speaker 01

  It could be. I think the only reason Cursor didn't build Repl or lovable is it wasn't worth their time, because they're in an even bigger, better market for the moment.

• 44:22Harry Stebbings?

  Agreed.

• 44:22Speaker 01

  I honestly think it was just a distraction. As big as that market is, is exciting that those guys together will go to almost 500 million in a year. Cursor got there in nine months. So you're taking your eye off the ball to invest in a high churn, frictionful space when they probably have 160% effective NRR or Rev level, because nobody leaves Cursor, right? Why would you invest in a smaller, high churn space when you have insane retention and you're growing even faster? It's just you'd have to, and you want to have a Team of in triple digit number of employees.

• 44:52Speaker 00

  And just intrinsically, the budget for software teams, building professional enterprise grade software is just logically larger than for demo apps or consumer apps. So maybe there's more individual users of a lovable or a replus kind of in the middle. But the reality is you're accessing the big dollar spend of every software company and every enterprise company when you're cursor. I don't think that the Figma market and the cursor market fully converge. The equivalent now of a Figma design is in fact, someone using Repl or lovable to do a direct mockup, an interactive mockup versus just a design mockup. But there's clearly between them all, there's this kind of smushing together.

• 45:33Speaker 00

  And that's just really significant because what were separate markets are all, they're all going to be competing with each other because the prize is just so big. And, you know, I thought, Jason, you did a nice blog post. Well, I don't know if you did it or your AI machine did it, but, you know, making the point that citing the Menlo work, which is really nice, that, you know, fifty, sixty percent of all the end user spend on AI right now is coding and coding related.

• 45:56Speaker 01

  Yep.

• 45:56Speaker 00

  This is the big kahuna. Everything else, even customer support, all the other stuff is everything else to a rounding error is forty five percent. Software and coding related stuff is fifty five percent of all enterprise end user spend. This is the epicenter of the enterprise AI revolution right now.

• 46:14Harry Stebbings?

  Fifty five percent of AI spend is in coding. What will it be in three years?

• 46:18Speaker 01

  You hope the other categories are just behind in a sense, right? But maybe it's intrinsic to the extreme value, right? In a very large category of software, maybe we

• 46:27Speaker 00

  Yeah, I don't know. But how about this answer? I can give you, I don't know the answer to that question. I can give you a quick answer to an adjacent question, which is fun, is that the total spend is kind of fifteen or sixteen billion on apps and another fifteen billion on plus or minus on enterprise infrastructure, which I don't fully understand what a category is, but leave that by the by. So the big aha again is end users in the enterprises are spending about per the Menlo data fifteen, sixteen billion dollars on AI. And the people who make AI are spending four hundred billion dollars on quote making AI. If that's 16 billion, three or four X last year, it's got a three or four X a bunch more times before it can cover the nut on the capex spend. To me, that's the most important.

• 47:10Speaker 00

  I'm less clear on what the mix will be, but somehow enterprises have to find not 15 billion, but 150 billion of budget. Otherwise, the people investing 150 billion in capex are going to have a sad day when their capex is greater than the revenue line. So I think the overall growth is the key question.

• 47:29Speaker 01

  Could I just go back to one point on Cursor versus Figma? Because I do think it's so important to founders and investors and exec. I think one risk is that Cursor completely displaced Figma. We don't need it. That's unlikely for a lot of reasons. I think the bigger risk for so many vendors is that it maims Figma. What does that mean, Jason? The old customers don't leave. Okay, HubSpot and Box and even Anthropic using it, they don't leave. They renew. They don't buy as many seats, right? Because the team is also using Cursor. But of course, they don't churn. The logo retention remains good, but NRR drifts down and new customers, the next generation, the kids from Y C, they defer that purchase because they're doing enough in Cursor. I'm seeing this across my older portfolio that folks are maimed.

• 48:12Speaker 01

  Like the existing retention's good, but the new guys are just taking enough of the new budget that your growth materially decreases. I think this is a risk for almost everyone that's established is you just get maimed. You don't get killed, you get maimed. And Cursor could easily maim this market. It's so big.

• 48:29Speaker 00

  I think of the Holy Grail movie where it's just a flesh wound. Sorry.

• 48:33Speaker 01

  It's a deep one, though. It's the one that never quite heals. And you sit in the board meeting and you're like, well, we had 15,000 customers last quarter, Rory, now we have 15,200. Hooray. Kudos.

• 48:46Speaker 00

  Low growth is miserable. Agreed.

• 48:49Speaker 01

  But it's this maiming that I think people aren't, a lot of founders aren't being honest about how they're being maimed by A I leaders. They're being maimed. They're not being, they're crushed is the narrative we talk about. Jason, who else is being maimed? Well, I mean, Atlassian is slowing down, right? GitLab is arguably being maimed. I mean, many public companies. Companies are being maimed. You've got to be Datadog and have so many leading products in market almost not to be maimed. It looked like Mongo was being maimed until they fought, until they fought back, right? It really looked like they were being maimed by all the new Postgres and other competitors. They're back, although maybe they're maimed in the sense they should be growing faster, given the growth of AI. Like Mongo should be this great Broadcom-like AI beneficiary. And, and they are, but they're not, they're, they have so many competitors now.

• 49:34Speaker 01

  There's so many superbases and others that are taking pockets of market share away from them that, that you might not even see some of the maiming, right? Maybe Mongo should be growing 50%. Why shouldn't it be? It was the leading platform and the explosion of apps that we're building today is unprecedented. Why isn't Mongo growing 50%?

• 49:49Speaker 00

  The way you see it is, you, you see those CIO surveys where they rank their priorities. And what happens is, you know, as AI has gone up the zeitgeist, it's gone up the priority list. And just something that was number three goes to number six and then it doesn't get funded. That's part of the SaaS slowdown that we've seen across the board in the public companies. You're not selling the new, new thing. So I'm kind of with you, Jason. And even at the infrastructure level of the, you know, the GitHubs and things like that, you have to coattach to where the budget is. And if you're selling infrastructure, but you're selling it to the people who aren't doing AI, then you're going to be dealing with a slow growth secular story. If you're selling that infrastructure to, you know, Atropic and OpenAI and the JP Morgan AI initiative, you're probably gonna, you're not gonna be an AI company, but you're going to have some of that growth rate.

• 50:34Speaker 01

  I mean, maybe the most maimed that I can think of, it may not be fair, is UiPath. Like, we can say, hey, Ui, until Daniel came back, we missed the AI wave, but it's not that simple. UiPath is not hemorrhaging customers. It's back to 16% growth. Stock's up 27% this year. Go Daniel, right? It just got maimed because, you know, RPA in part got replaced with agents in AI. It got maimed. It got maimed.

• 50:57Speaker 00

  You would just do, I think that's a great example, genuinely, Jason, because I think you're, it's kind of one of those moments where you do it in a different way if you were starting now to automate. And you'd start with an agent. You just wouldn't start by doing the thing that they do.

• 51:10Speaker 01

  What do you do if you're Daniel? Daniel is one of my closest friends. What do you do if you're him? Well, he has stabilized the ship. Growth has come back a bit. He basically checked out like a lot of folks did when times were easy, when products didn't change. He called it a day. And then how long that last? Eight months till he had to kick out the CEO he brought in? It wasn't even, he didn't even make it to a year.

• 51:30Speaker 00

  I think what you have to do is say to yourself, there's a way you do automations in 2025, they're agentic. UiPad's automations were very deterministic and brittle. You do exactly these three steps in exactly this order. Then it works and you can automate away humans. Now you can have a 10 step automation where you have some decisions. The good news is there's a bunch of companies from Y Combinator on that are doing this kind of stuff. And you should buy or build enough to just take the pain and insert yourself into relevance. And I'm sure he's honored. I mean, this is a very smart man who knows what it has to take, but it's just, as we've discussed before, the hard thing isn't intellectually knowing what you have to do. The hard thing is just driving it through an organization who will invariably say, our stuff already does that.

• 52:14Speaker 00

  I mean, we've looked at a lot of the companies that are the next generation companies and you do the research and you do the reference calls. And the UiPad team will say they have something like this and they do. But in the eyes of the customer, it's not perceived as the new thing and you've got to change that perception. And it just requires, you know, a supreme act of CEO will. I mean, I hate, I didn't like the founder mode cliche, but I've come to the conclusion it's what you're dealing with here. You just got to say, we are refunding the company in the age of AI. We are not going to lose any of these AI first deals and we're going to make it happen.

• 52:48Speaker 01

  You know, in a way though, I agree with all that. I think Daniel, as hard a job it is, he has an easier job than some. Because let me just step back to the numbers. Here's what I would do. 1.8 billion in ARR. But he's got 98% GRR and 107% NRR. Okay? So mathematically, one problem is his NRR has fallen from the 140% peak at the IPO because people aren't buying that much more for UiPad. But he's got 98% GRR, 98% retention. He has enough time as one of the greatest B2B founders out there to build the agentic products that 2 billion Dollars of his customers want to buy and aren't leaving. It's the same opportunity Mark Benioff has. Now, I think I would argue Mark with his megaphone is actually like an Aaron Levy is doing a better job publicly of bridging the gap. But they have the same job.

• 53:33Speaker 01

  We have extremely high revenue retention. People aren't leaving. No matter what anybody says, we're in the first inning for AIB to be. I can tell you why we're in the first inning. It's brutal, but you have time. You've got six, 12, 18, 24 months to roll out. High ROI agentic products. And you just got to get enough of your $2 billion base to buy them and you're back to 30% growth. He goes from 107 NRR to 100. You know, Databricks has 150% NRR at 5 billion ARR. I know it's easy to say, but that's the job. Make those happy customers buy more of your agentic product. And it doesn't have to be all of them tomorrow. It has to be more of them each, each quarter and you're back in the game.

• 54:13Harry Stebbings?

  Isn't it as simple as like the Alex Rampel quote, which I love, which is, you know, can the incumbent acquire innovation before the startup acquires distribution? Exactly this point.

• 54:22Speaker 01

  Yes, but you don't have infinite time. But I think everyone has time with 98% GRR in 2026, 2027. You don't have infinite time. Get rid of the CEO you brought in so you could relax. Like go into Sergey Brin mode, but you do have time. If the game is not over.

• 54:38Speaker 00

  To take that quote, I think it's a good quote and to some extent it is a quote that's simple. But actually, I'm going to find myself surprisingly agreeing again with Jason on the human factor. The hard part of doing it is can I, you know, can big co acquire innovation faster than new co can acquire distribution? Let's take that as a construct. That's actually not the issue because they can acquire innovation if they can push it through and if a technical. The really hard part is there's going to be about two or three years where you're lifting the growth rate from 9% to 11%. And the stock doesn't give a shit. And then 11 to 13 and the stock gives a shit. And then you're at 50 doesn't give a, and then the activists whine. Because the problem is, we talked about this with Salesforce, the physics. If I have a zero revenue company and I can go to 100 million, that looks amazing.

• 55:21Speaker 00

  If I have a $2 billion revenue company and I sell them 200 million of the new thing. I'm twice as big as this little sexy startup, but I've only got a 10% growth. I'm valued at five times revenue. You've got to push that Sisfian rock up the hill for four or five years. Keep everyone motivated and just accept that it's a grind, right? And that actually is the hard part. And that's why I admire the CEOs, you know, I, you know, I admire Benny for turning up and keep doing it. I admire Dinesh, I admire Aaron enormously for that. They're just saying, we're not going to roll over and die because we can be relevant and we're just going to do what it takes. But the point I'm trying to make more than is there's not a moment of, oh, I've invented the magic thing. We're cool too. No, the market will say, no, you're not cool. You're a $2 billion boring old company.

• 56:04Speaker 00

  You got to make yourself cool because 30% growth, that's what's cool. And it's just that journey.

• 56:09Harry Stebbings?

  30% growth, that's what's cool. I love it. Daniel is also one of the biggest warrior CEOs, you know, the Honam's cockroach founder. Just relentless, I mean, that Daniel is just extraordinary. The man survived on a dollar a day in Romania for years.

• 56:23Speaker 00

  I mean, You mean he was on the charts?

• 56:26Speaker 00

  A Romanian pre 89 joke.

• 56:29Harry Stebbings?

  A pre 89 joke. And listen, you said about co attaching to budget and to AI budget. There are two that you could pick on for that from this week. Boom Supersonic, the plane builder that gets an order from Crusoe and is raising 300 million in the back of this to fund it and to open up this new line of business. Or Harness, which raised 240 million at five and a half billion to automate AIs after code gap. Which one do you want to take? Because both of them are.

• 56:57Speaker 00

  How anyone who chooses between a supersonic plane and a software infrastructure provider and chooses anyone other than option A has no soul. Of course, you got to talk about the supersonic plane. For God's sake, man, this is not even a choice. So just for context for everyone, Yaboo is just an awesome company. They are building a supersonic airplane from scratch and they're designing both the plane and the engines. This is a hard, hard, hard task, even for existing plane manufacturers typically. Boeing builds planes, G E Rolls Royce builds engines. So they're taking on the full enchilada. I love it. It's a Y Combinator company. You know, they got a prototype out for, you know, with less than 100 headcount.

• 57:42Speaker 00

  So everything in your heart wants that to work. A, because it would be great to have supersonic flight. Other than from Concord and B just because it's it's just an awesome entrepreneurial story. So when I saw this, I will admit it's like huh. But then you do a little research and I'd forgotten this, but Rolls Royce, it's not as crazy as it looks because what Boom said, they're also going to sell their engines to data centers for generation, right? And when you say it like that, it's like, huh, you were making planes and now you're selling turbines. But in fact, all the airline engine manufacturers, GE in the United States and Rolls Royce in Derby in the UK, I used to run a manufacturing company near there, they all do the same thing because it turns out the bulk of what it takes to

• 58:25Speaker 00

  build an airline engine, airplane engine, other than the last bit of propulsion, is very similar to what it takes to build a generator. So it's not crazy at all. My guess is, this is Jason Captain obvious, it's a lot easier to take an engine and plop it on the ground and have it generate electricity than it is to put the same damn thing in a plane and have it generate propulsion. So it was actually not crazy at all. I don't know if it's defensive because the plane isn't is you have a huge wreckage hurdle or if it's offensive because they can make more money there now, but genuine comment, I wish them literally all the best of luck.

• 58:58Speaker 01

  Well, hold on. Boom comes out of Y C, cool company, quickly raises at an arguably fake billion dollar round from airlines with no revenue. December 2024, a year ago, crashes down round, maybe $500 million valuation, but it might be worse when you think about the cram down and the and the effects. That's a tough moment. AI booms and now you're back up to 1.5 billion. 2021, 1 billion, no revenue, crashed to half of that or less at the end of last year, massive cram down round and then back to 1.5 billion. I mean, if I was an investor, I might still have whiplash, but it's great. But who knows how it looks with all that change? I'm not sure. Crazy story. There's so many of those. We all have them. We all have the ones, a couple ones in our portfolio that actually got a big

• 59:42Speaker 01

  AI lift this year. Didn't know it would be boom, but it was.

• 59:45Speaker 00

  But you must admit, it's one thing to get an AI lift because your cool little network monitoring tool is selling to Entropic. It's quite another thing to kind of walk into the factory and say, guys, strip those engines. Off those planes, slap them on a trailer and make them generate electricity for a data center down in Texas. I just love the hard engineering of it all. I would argue, I don't lump Boom into the re-acceleration. I think the real, the interesting distinction is, I think Boom in its old and new incarnation are ultra-high-risk, very ambitious companies versus the software-centric, known business model re-acceleration. I wouldn't lump Boom in with some SaaS companies re-accelerating to thirty percent. They're just such dramatic risk profiles.

• 1:00:30Speaker 00

  I think the interesting question, and I'm going to tie it into the forthcoming biggest IPO ever, is how do you think as a growth investor about ambitious, hard engineering projects like Boom, where, you know, as we've seen, you're, the risk of it going horribly wrong and not building a plane is quite high. And maybe you get saved by building an engine. So you go, oh, my God, that is way more risky than anything in even AI LLM land. But on the other hand, we're about to cover the big story of 2026, which is possibly the largest IPO in history, is going to be a rocket company. I think the aha is when those hard tech problems work and when you solve the technology problem, and if you pick the right problem, you know, you have a wildly compelling business.

• 1:01:13Speaker 00

  But as the Boom plane part of the story makes clear, they're damn hard problems.

• 1:01:18Speaker 01

  Well, they've sold zero of either. They've sold no planes and no jet turbines for AI power. So it's a, it's a big bet.

• 1:01:25Speaker 00

  It is a big bet. And three failed launches in, in two thousand and seven and two thousand and eight. That's probably what SpaceX looked like too. And if it works, you're a genius.

• 1:01:33Harry Stebbings?

  Speaking of the trillion-dollar outcome and the big IPO for next year, we chatted about it, we chatted about the eight hundred billion-dollar secondary. Following that, pretty quickly, rumors around the one point five trillion-dollar IPO.

• 1:01:45Speaker 00

  It's funny, the exact chronology last week, we recorded on a Tuesday. We talked about eight hundred billion being a high price for that secondary round. And I was like, ooh, that feels like a high price based on the numbers. And I'd looked at the numbers and the growth rate and the, some de-acceleration going on. And I'm like, ooh, eight hundred feels high. And then on Wednesday, before we even released a damn podcast, we see the leak that says they're going pub. They plan to go public at one point five trillion. So I'm sure everyone piled into the eight hundred million billion round thinking, oh, my God, it's cheap. So you can be wrong by eight hundred billion in a day. So I've obviously been thinking about that a lot. How do you get your head around that? It's a, you know, the company's doing fifteen, sixteen billion this year, twenty twenty five. Starlink is the growth driver. Growth rate was down a little this year over last year.

• 1:02:29Speaker 00

  Maybe they do early mid twenties next year. So you're talking, you know, seventy, eight times twenty twenty six revenues. What's the thought process? I'm genuinely thinking, how do you talk constructively about that? And what I realized is you have to factor in what I'm now going to refer to as the E O V. The Elon option value. Because on all his public companies, you just run the math. You value what it's worth as a business with the TAM, taking it all into account. And then you look at the difference between that and what it's trading at. And that's just basically the Elon option value. Right? I mean, if you look at Tesla, it's trading north of a trillion. It's roughly a hundred and something billion in revenue. Earnings are down. You kind of apply a normal multiple, maybe you get three hundred billion. The rest is the E O V. It will be the same thing on SpaceX.

• 1:03:11Speaker 00

  And he's earned that E O V because he pulled the Starlink rabbit out of the hat. It was a rocket company and then it became a communications company. So it is credible to say in his case, as in almost no one else's case. This is one of the few people on the planet who literally might find you another trillion dollar market that you weren't in, that wasn't in the original plan. So roll the dice. If that premium ever evaporates, oh, dear God, if he were ever to die. Oh, my God, the stock gap would be something horrific. What I recognize is you can't run the numbers on SpaceX and come up with the one point five trillion. You just can't. But what you can say is someone who's funded, let's be clear, the most successful car company ever.

• 1:03:52Speaker 00

  And let's not forget, also founder of OpenAI, looks like the most successful AI company ever and the most successful rocket company ever. You know, we said last week, once you're lucky, twice you're good. Three times you're fricking amazing. So I just have let go. I've let go of valuation. I'm like, I can't figure out how it's worth one point five. But you just apply the E O V on top of the ten X multiple and away you get. It's awesome.

• 1:04:14Speaker 01

  You have to manifest it. That's the key. This is what he's doing. Even Harry's manifested almost a billion dollars under management. Like, you can laugh, but if you have enough enough behind you, if you have enough magic and proof points.

• 1:04:27Speaker 00

  Totally.

• 1:04:28Speaker 01

  You man you manifest. I think he's manifesting a 1.5 trillion dollar company. And I don't know if all the kids can manifest it, but it's he's doing it.

• 1:04:37Speaker 00

  I can teach him. I've learned a lot.

• 1:04:39Speaker 01

  Teach him how to manifest it.

• 1:04:40Speaker 00

  I'm I'm manifesting a beach house in Laguna Beach.

• 1:04:43Speaker 01

  You're a manifest Harry, you are. People don't get it. You are an S tier manifestor.

• 1:04:48Speaker 00

  I mean, then Elon would definitely be an S squared, S cubed, S to the power of 10.

• 1:04:53Speaker 01

  I mean, it just breaks there. You just have this other thing up. Yeah, it's just not even playing the same game.

• 1:04:57Speaker 00

  You look at the numbers and you go, you know, 15 billion plus or minus, you're two, four, five billion of space revenues, which is wonderful, but capped. You know, you've got these customers. There's a certain amount of volume. They already have 90% of the volume. Then you start estimating, well, how big can Starlink be? Dear God, let it be on every United flight soon. If anyone from United is listening, I actively avoid your planes because they don't have Starlink enough, so please fix that. So they get all that. They get all the world broadband. You still struggle to get to anywhere close to, you know, 1.5 trillion. And and then you just have to go, you're buying a share in probably the only person since the demise of Steve Jobs to literally not do it once, but do it three times. I mean, Jobs did it with Apple, Pixar, and then Apple again, right?

• 1:05:42Speaker 00

  Elon's done it with, you know, I mean, you forget the small ones like PayPal. And then on top of that Tesla, SpaceX as a rocket company, SpaceX as a communications company. Then, of course, OpenAI as the leading AI company. He did SolarCity as well, didn't he? He did, but that didn't matter as much. I mean, I was just a simple, humble, two or three billion dollar outcome, you know, not nothing among friends. So, yeah, even rounding out the little ones, you just left with it's the most impressive entrepreneurial record possibly the last 30, 40 years, as I say, with the exception of Steve Jobs. You lean in.

• 1:06:13Speaker 01

  No, the I I can't get the math to work either, right? But the one thing is, I do think Elon's all over the place, unlike Sam Altman, where every single thing I think Sam says, as off the cuff as it looks, is very thoughtful. But I think Elon talking about space. Based data centers is his next big play potentially. I think there's a reason he's communicating this well ahead of the IPO. I think this is the one of the big plays. I mean, it's an incredible business as it already is. I have three star links. I don't know what I'm paying a lot, right? And it's great. But if all of that, starting in the beginning of the conversation of all that Oracle and CoreWeave and Nebius revenue all goes up, up in the sky, deep far in the sky, that is a lot of money. And he's the only one that can do it. He's the only one that can build data centers in

• 1:06:57Speaker 01

  space. And I don't think he's joking. And it's easier than going to Mars. Or at least it's easier than getting back from Mars. It is not easier. Going to Mars is not a huge challenge. It's getting back. So we might be underestimating the data centers in space. It's possible.

• 1:07:11Harry Stebbings?

  Would it be a successful IPO at 1.5 trillion?

• 1:07:14Speaker 00

  That's an interesting question for the buyers or the sellers. It will be the most successful IPO in human history for the sellers. I just think what founders are going to record on this is going to boggle the imagination. Will it be a good stock to buy at 1.5 trillion? Is that what you're asking, Harry?

• 1:07:31Harry Stebbings?

  I'm saying, will that will that be investor demand at 1.5 trillion enough to satisfy it? And then a stabilized period where it doesn't tank afterwards?

• 1:07:40Speaker 00

  I don't know, because you're asking me to assess something that's not within the bounds of logic. I don't understand the Tesla market cap relative to the financials or even the TAM. I don't think people get that one running the numbers. So you're trying to assess the non-quantifiable. So I don't know how you can come to an informed conclusion. I don't understand the mindset of someone who would buy based on the intangible at that kind of price. I think as a rational buyer, you look at the upside downside risk and you get very nervous. But I think the same has been true of Tesla for the last five years. It's been up and down. The financial performance has been fairly mediocre for four years, but the stock has stayed up. So you're asking me to speculate on the propensity of the marginal Elon believer to buy the stock

• 1:08:24Speaker 00

  at 1.5 trillion, and I have no way of assessing that. I think it'll be a tricky one to get done. The bankers are pitching this week. I would not envy them their task.

• 1:08:34Speaker 01

  He does seem to have an ability that maybe no one other than Bezos in his prime has, which is, give me five years. All of Elon's dates are wrong. Everything is full self-driving. Everything's behind, from the Model S to the Model 3 to Starlink, and everyone gives him another four to five years. And the day traders are going to enjoy the stock. So it's just hard to predict when everyone gives you another four to five years. They're really not trading on today's revenue or today's anything. It's a gift, but he's very good at that. He's very good at over predicting, but ultimately delivering.

• 1:09:06Speaker 00

  You're exactly right, Jason. It is a daunting task. You know, are you going to raise 30 billion, which is only 2% dilution, which means it's still widely traded? Or are you going to do the typical IPO, has 8% dilution? So that would be, I mean, just did the math here, about 120 billion, right? Is there 120 billion of raw risk capital that says, what I really need in my portfolio in 2026 is some 70x run rate revenue space investments, right? Some poor banker is going to have to get on his PowerPoint, get on his private jet, and start flying around the world and saying, you know, how much of this do you want? Now, I think in this market, I don't know how to assess who that investor is. Do the index funds buy it? Do the sovereign wealth buy it?

• 1:09:48Speaker 00

  You know, I think there'll be a lot of a consumer and retail appetite. I just don't know how that all comes together. It will be fun to watch, because it will probably be the most challenging IPO story, if it's anything like that valuation. Now, the other thing you might see is, the valuation gets walked back to the merely outrageous. The most impressive thing is the entrepreneurial oomph. I heard Peter Thiel speak about this years ago. When you have a big enough vision, you do get a buy on the little shit. And Elon, by having that big vision, I think, has been able to paper over the cracks that would have killed many a lesser man. Good luck to him. I mean, it's great. In the end, I like my Starlink, too.

• 1:10:24Speaker 01

  I mean, here's one snare for what it's worth. Google anchors them with 10 billion. They're already a 10% shareholder.

• 1:10:29Speaker 00

  In for a penny, in for a pound.

• 1:10:30Speaker 01

  They may have, maybe it's a Gemini partnership in space that's part of it. They get first access to the TPUs in space. It's not, no. So they put in 10 billion. It's good timing with AI. And as soon as that is, we're running out of space in the IPO. And the bank Run around. Google's in for 10 billion. Fidelity's in for 2 billion. And all of a sudden, you start to panic that you're not going to get your shares.

• 1:10:50Speaker 00

  If you get a call in 10 minutes from Goldman Sachs or Morgan Stanley, you'll be signed up as a banker by Friday. I love it. You're exactly right. That's it's a nap. Maybe the best company. It's a narrative story. And Jason's just shown how easily a narrative can change. It's not a story like a PE-backed public IPO where it's like at eight times ARR, you can get 6x coverage. And at 10x ARR, you can only get three. So the deal gets done at eight. This is a totally different thing. And this is in tune with the zeitgeist. It's all narrative all the time. And you're right, that would be a very clever way to do it. Jason, that was fantastic. Yeah, he should be a banker. He's exactly right.

• 1:11:24Speaker 01

  Well, Google almost bailed out Tesla at the last era when it almost went bankrupt. It's already happened and Sergey's back running Google. It's just 10 billion. I can tell you, we do work closely with a lot of the folks at Google Cloud with Saster. They are feeling strong. We work with a lot of folks in marketing and product. I've never seen a team feel more energized in the entire decade I've worked with them. Like, they are feeling that they are winning. And so why not put $10 billion to get my TPUs in space? It's a good deal.

• 1:11:50Speaker 00

  Fuck, it's nothing. It's a couple of percentage points in market cap. Not crazy.

• 1:11:54Speaker 01

  What else are they going to do with the cash? They can't spend it like Meta does. They can't spend it that aggressively.

• 1:11:59Speaker 00

  They already have engineers. They don't need to spend it on that. And Jensen's doing buybacks, so maybe he can stick a couple of billion. And there you are.

• 1:12:05Speaker 01

  Maybe Nvidia could put in five. If they do 15 together, Google and Nvidia and two from Fidelity, there's no room for retail. We're sold out. The round is sold out.

• 1:12:13Speaker 00

  And the genuine common and the genuine learning is, as I said, the power of a big story. At one level, there's a little part of me, the boring, curmudgeon numbers guy screams, this is all madness. You're all insane. And then there's another little part of you that just gets inspired by that we're sending rockets to Mars, for God's sake. And we're the telecom company to connect the whole world. This has got to matter.

• 1:12:35Speaker 01

  Just because you brought it up on Founder's Fund owning 10%, it's just a story people forget. You know, Peter Thiel fired Elon Musk.

• 1:12:42Speaker 00

  Yes.

• 1:12:42Speaker 01

  He fired him, but he treated him like a human being, fully vested all his stock, took nothing out of his pocket, thanked him for it and told him that was the way it was going to be. He treated him pretty damn well. And so when SpaceX was going to die, he went to Founder's Fund and Peter Thiel gave him the money in an hour. It's a reminder in today's age of extreme greed to be kind. He didn't just, wasn't just nice to him. He accelerated all of his stock and made sure that it wasn't about money. He was appreciated. He walked him out the door. I don't see this happening often enough. You know, I've seen two CEOs at the end of this year just quit their startups that I invested in. Be kinder, go the extra yard like Peter did with Elon. It may, just may pay off, like owning 10% of a $1.5 trillion IPO,

• 1:13:26Speaker 01

  even for a billionaire, it might pay off.

• 1:13:28Speaker 00

  Yeah. Reserving the right to say, I'm not sure how much it was kindness versus Elon was also a big paid in stockholder. I think the meta point you're making is right. It's very impressive. Two things are wildly impressive. One is the density of talent at PayPal blows the mind. It's like you have Thiel, you have Sax, you know, Exeter, you have Reid Hoffman. It's just amazing. You have Elon. And then the second thing is you're right, they clearly had their bumps. And the fact that they were able to be rational business people is about to pay off to the tune of, you know, $100 billion. It's a great story. It's kind of one of those wow moments and good for them. It's like, Harry tweeted today something about people who aren't in the very biggest deals feel totally irrelevant. And you correctly got a whole bunch of pushback on it, Harry, because it was a bit obnoxious.

• 1:14:11Speaker 00

  But there's no doubt in a world where one investment might return 50 to $100 billion, everyone else has to feel just a teeny tiny tad irrelevant compared to that return for Founder's Fund. And good on them. It's a 20-year compounder at 50% plus or minus.

• 1:14:31Harry Stebbings?

  Okay, we're gonna do a would you rather, Roy, you love this. You've got a Figma at 17 billion or Cursor at 29?

• 1:14:39Speaker 00

  Cursor.

• 1:14:40Harry Stebbings?

  Jason?

• 1:14:41Speaker 01

  I'm gonna take Figma, only because I don't believe Cursor's future is assured. I think a Cursor is magical. I think it's a gift to humanity for folks that have built software. If we keep doing this podcast long enough, we're gonna see I'm right about something else, which is everything's much less stable than we thought this year. The categories, the Harveys, the Cursors, these are incredible companies. I wish I invested all of them, don't get me wrong. We're gonna look back in 24 months and see there was a lot less stability in these so-called leaders than we thought. It's not that they're gonna go to zero, but we are so early in AI that I'm gonna take Figma on this one. But it's a tough one. It's a tough one.

• 1:15:18Harry Stebbings?

  Roy, you don't?

• 1:15:19Speaker 00

  No, I don't feel the need to argue. I mean, I think that that's the beauty of money. You just make your bet and then, you know, you don't have to justify your position with English. In the end, you're right or wrong on the numbers.

• 1:15:31Harry Stebbings?

  Yeah, Jason, you just need to argue. God.

• 1:15:34Speaker 01

  I don't like to argue.

• 1:15:36Harry Stebbings?

  Let's shit on Harry's tweet and then just not argue.

• 1:15:39Speaker 01

  I was a little argumentative last week. I hope it doesn't happen again. But yeah, keep going. What's the next one?

• 1:15:43Harry Stebbings?

  OpenAI at 500, Anthropic at 360, or Google at 2 trillion?

• 1:15:49Speaker 01

  I have to take Google. The reason is, is just the level of, I don't mean arrogance, confidence in where they're going that I see across the team we work with. I know it sounds small, but it's not. When I see everything's going right and the team feels it and the team knows it, how often does that happen at this scale? Not that, I don't think everyone at Meta is cheering that they're crushing it, right? Risk-adjusted, take Google. Wouldn't have been true a year ago. Gotta take it.

• 1:16:13Speaker 00

  Okay, I don't know my answer yet, but actually the point is, a year ago, it should have been time to take Google because the stock's up 60%. You may now be the other, you may be the wrong side of that trade. You should have taken the quick pop.

• 1:16:24Speaker 01

  I'm not a trader.

• 1:16:25Speaker 00

  I know. I mean, they make north of a hundred billion a year, twenty, so you're buying in at twenty times plus or minus EBITDA. It clocks in north of a hundred billion a profit a year. Everything else was a positive, but we talked about it nine months ago, and the risk was erosion of search. All the positives have kind of gotten better, and the erosion of search haven't happened. So, yeah, you do have to give it consideration. This is hard. At one seventy, I'd have taken the Anthropic. Do you think, actually, because, yeah, interesting comment here. Anthropic is, you're giving me the, you're giving me the future round on Anthropic. Has it happened at three hundred? But the future round at OpenAI is, is there another round coming on OpenAI?

• 1:17:02Harry Stebbings?

  They're always continuously raising, but if you were to do like live pricing on them, Anthropic would be three sixty, unless you were getting grandfathered into a prior round, like the real live price is three sixty.

• 1:17:12Speaker 00

  At one seventy, Bill, I'd take Anthropic all day, every day, because I think they're being way more sensible than OpenAI, and I think they will get public. And, yes, at one seventy, at three hundred, you might be fully valued. I think the difference between Anthropic and OpenAI is, OpenAI has more ambition, perhaps, but it's more likely to just get caught in the middle with commitments it can't meet. Whereas I think Anthropic is very sensibly and boringly converging on profitability, will go public, and will be a very nice public company. So of the two, I'd take Anthropic. I'm processing on Google, and it just feels lame. I mean, you could argue they're all almost public already.

• 1:17:49Harry Stebbings?

  Come on, Rory.

• 1:17:50Speaker 00

  Shut your face. I think I'd go Anthropic. I think I'd go one of the pure plays, even though I do agree the Google, I think I'd go one of the pure plays. Cal she's slow fire.

• 1:18:01Harry Stebbings?

  Cal she's slow fire.

• 1:18:04Speaker 00

  You know, I like to think before I comment, so call me strange.

• 1:18:07Harry Stebbings?

  Don't worry, we edit anyway. It's all good.

• 1:18:10Speaker 00

  Yeah, yeah, yeah. Get rid of that one.

• 1:18:12Harry Stebbings?

  Boys, thank you so much. You continuously make me more and more questioning of my own questions. You know, I've done this for ten to eleven years, Rory. I never questioned my own interviewing ability until I started doing this with you, and now I'm deeply forensic on the quality of my questions.

• 1:18:29Speaker 00

  I'm just a dick. What can I tell you?

• 1:18:33Harry Stebbings?

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• 1:19:15Harry Stebbings?

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• 1:20:00Harry Stebbings?

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• 1:20:43Harry Stebbings?

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