Cerebras IPO, WarshTime, General Catalyst Ad Reactions | Andrew Feldman, Amy Reinhard, Ben Hylak, Doug O'Laughlin, Eric Vishria, Steve Vassallo

(01:04) - Cerebras IPO (21:36) - Warsh Confirmed as FED Chair (30:51) - Amy Reinhard is the President of Advertising at Netflix, where she leads the company’s global ads business and monetization strategy. She oversees Netflix’s push into ad-supported streaming, partnerships with advertisers, and the development of new advertising products and measurement capabilities. (45:46) - General Catalyst Ad Reactions (01:03:38) - Ben Hylak is the founder and CEO of Raindrop, a relationship management platform designed to help people strengthen and maintain personal and professional connections. He focuses on building consumer software that uses AI and thoughtful design to make networking and relationship-building more natural, proactive, and human-centered. (01:29:03) - Doug O'Laughlin is an analyst and writer at SemiAnalysis, where he covers AI infrastructure, semiconductors, cloud computing, and hyperscaler economics. He is known for deep technical and financial breakdowns of GPUs, data centers, and the companies shaping the AI compute stack. (02:23:13) - Andrew Feldman is the co-founder and CEO of Cerebras Systems, an AI hardware company building wafer-scale processors designed for large-scale AI training and inference. He previously co-founded SeaMicro, which was acquired by AMD, and focuses on rethinking compute architecture for the era of massive machine learning models. (02:42:27) - Eric Vishria is a general partner at Benchmark focused on early-stage software and AI investments. Before joining Benchmark, he held product and operating roles at companies including RockMelt and Google, and is known for working closely with founders on product strategy, growth, and company building. (02:56:51) - Steve Vassallo is a general partner at Foundation Capital focused on enterprise software, AI, and frontier technologies. He works closely with technical founders building infrastructure and developer-focused companies, and is known for backing ambitious startups at the earliest stages. Follow TBPN: https://TBPN.com https://x.com/tbpn https://open.spotify.com/show/2L6WMqY3GUPCGBD0dX6p00?si=674252d53acf4231 https://podcasts.apple.com/us/podcast/technology-brothers/id1772360235 https://www.youtube.com/@TBPNLive

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

• 0:00Jordi Hays?

  You're watching TVPN.

• 0:02John Coogan?

  Today is Thursday, May 14th.

• 0:06Jordi Hays?

  May 14th.

• 0:07John Coogan?

  2026. We are live from the TVPN UltraDome, the temple of technology.

• 0:12Jordi Hays?

  The fortress of finance, the capital of capital.

• 0:20Jordi Hays?

  Hey, Ben.

• 0:21John Coogan?

  That is Ben, indispensable.

• 0:23Jordi Hays?

  We've got multiple Ben's.

• 0:24John Coogan?

  Member. We have a great show. It's Cerebras Day on the show, Cerebras IPO. We'll talk about that. Semi Analysis has a fantastic deep dive on the company. We'll go through that. Doug O'Laughlin from Semi Analysis has joined the show and then Andrew Feldman, the founder and CEO of Cerebras, has joined the show. But we have lots more folks joining. Amy Reinhard from Netflix, the president of ads. Can you imagine? I didn't think, you know, you think about presidents, the president, you think president of the United States. I think president of ads.

• 0:54Jordi Hays?

  That's right.

• 0:55John Coogan?

  Ben Hylak, Eric Vishra, Steve Vesalo. We got a bunch of folks coming on the show today. It's going to be a fun one. So there's a ton of news. Let's start with Cerebras. The IPO has gone spectacularly well. Cerebras doubled their valuation basically overnight. Brandon Grill had the good fortune of writing up some of the details of the Cerebras news in the newsletter today, tbpn.com. You can go sign up.

• 1:21Jordi Hays?

  Yeah, and right now it's sitting at a $64 billion market cap.

• 1:27John Coogan?

  Yeah.

• 1:27Jordi Hays?

  And a lot of the prediction markets, they didn't even have a category above 50, right? A lot of people were just kind of trading or betting.

• 1:36John Coogan?

  And when I wrote the newsletter Friday, Monday, I said a $50 billion IPO and was sort of being optimistic and it beat those expectations, which is great news. They deserve it. It's true overnight success. We'll show you some charts of the valuation, lots of troughs of disillusionment, but Andrew and the team powered through and wound up finding the perfect application for their technology at the perfect time during a mega cycle, which we'll go through. So chip design company, Cerebras, if you don't, if you're not familiar, they make a big, big chip, big chip company instead of.

• 2:10Jordi Hays?

  The biggest chip.

• 2:11John Coogan?

  Instead of taking the wafer, putting a bunch of chips on it, cutting it up into smaller chips, they use the whole wafer. Genius idea. It's one of those simple ideas taken deadly seriously in some ways. But it's trading at $350 a share on its first day of public trading, which values the company much higher.

• 2:30Jordi Hays?

  Three, 300 now.

• 2:31John Coogan?

  300.

• 2:32Jordi Hays?

  Yeah.

• 2:32John Coogan?

  300. Okay, so.

• 2:34Jordi Hays?

  It was.

• 2:34John Coogan?

  Okay, it was up at 350. It has since sold off slightly. And, and they raised around $10 billion. I think they were, are targeting 6 billion at one point. They've, they've upsized that. I think it was a $3 billion raise initially, but they have a good amount of money in the bank now. The price on this IPO has been literally up only on Monday. The price range was 150 to 160. Then they raised it. That was up from 115 to 125. And today we're seeing, you know, much higher prices.

• 3:04Jordi Hays?

  Go back to that picture.

• 3:07John Coogan?

  Who's in the picture at the NASDAQ?

• 3:08Jordi Hays?

  Picture at the NASDAQ.

• 3:09John Coogan?

  Of the Cerebras team standing on stage.

• 3:12Jordi Hays?

  Someone should make a set in LA. You know, they have those like fake private jet sets.

• 3:19Jordi Hays?

  Imagine if entrepreneurs could have a set where they put their logo in the background. They're hitting it with a hammer and there's confetti going.

• 3:25John Coogan?

  Yeah, yeah, but it's for your course.

• 3:27Jordi Hays?

  Yeah.

• 3:27John Coogan?

  Yeah. And, and you walk right from there to, to the Lambo.

• 3:32Jordi Hays?

  1,000 students in your mastermind.

• 3:35John Coogan?

  Yeah, yeah. No, I had this, I had this idea back in the day when, do you remember the ice cream, the ice cream museum, this whole thing?

• 3:42Jordi Hays?

  Oh, yeah.

• 3:43John Coogan?

  So there were, there was this trend, I mean, really bad news for the museum industry, but they're getting eaten alive. And so some entrepreneurs, I think they did very well, started something called the Ice Cream Museum, which was not really a museum in the sense of like a presidential library or, you know, the Norton Simon or the Getty or the, you know, Natural History Museum. It was more of like an experiential place to go and hang out, good for first dates, good for, you know, taking kids maybe. And they would maybe give you some ice cream, but most of the, most of the museum was just like very Instagrammable things.

• 4:20John Coogan?

  So there would be like a ball pit or a bunch of raining confetti and stuff and a huge, huge fabricated statue of ice cream. That was not a piece of art that would be sold.

• 4:32Jordi Hays?

  Wrinkle ball pit.

• 4:33John Coogan?

  There you go. Uh, that sounds real. I don't know if that's is real, but it sounds very believable.

• 4:38Jordi Hays?

  Yeah, they have.

• 4:38John Coogan?

  They have that? Okay, yeah. So, uh, and, and there were a number of other kind of copycats that were trying to jump on and do like, oh, we'll do like the waffle museum or something, or the pancake museum, you know, because they just wanted to cash in. And, uh, and my idea was just the museum of Instagrammable objects. And so it would have all of those. So there would be a private jet set, and then there would be a Lamborghini set, and this one would fit right in. So it's just, they have a big pink wall, so you can go take the pink wall photo. And then there's a beach, and then there was a gym with fake weights, so you could go and look like you're maxing out and benching 500 pounds. And so it just says, bring these clothes, or we'll have them for you. And then you move from room to room, taking the ideal dating profile photo.

• 5:20Jordi Hays?

  Gender reveal.

• 5:21John Coogan?

  Yeah, exactly, exactly. Oh, you had kids. Here, you in the hospital. You can live an entire life through this fictional museum of Instagrammable objects. Uh, more of a meme than a real business idea, but.

• 5:33Jordi Hays?

  I know, John. The museum of ice cream now has, uh, seven locations.

• 5:38John Coogan?

  Okay, so they're cooking.

• 5:39Jordi Hays?

  They're global.

• 5:39John Coogan?

  They're global. They're, they're doing well. Um, well, let us know.

• 5:43Jordi Hays?

  Anyways, nice little tangent there.

• 5:45John Coogan?

  Miami is the capital of gimmick museums. Got to do a whirlwind tour. Uh, anyway, let's go back to the serious stuff. Cerebras, uh, it's a complicated, uh, company because they are so deep in the AI supply chain, but we'll break it all down for you. So, uh, Semi Analysis has a fantastic deep dive. Uh, it's a longer read, so we're not going to go through it all, but there are some very interesting, uh, tidbits in here that we can sort of summarize and contextualize for you. And then, of course, we'll be talking to Doug O'Laughlin from Semi Analysis at, uh, 12:30. So, uh, the, there's a bunch of interesting takeaways, some really solid positives. Uh, Cerebras chips work, which was something people were not expecting for a while. There was a lot of fud around this company. Just the idea of like, oh, that'll never work. Like, what if the architecture

• 6:29John Coogan?

  changes? What if we go away from transformers or something? What if we need something quote completely different? Or maybe like the yields will never work because there was this idea that if you're using the entire wafer, typically, as you're, as you're etching the chips onto the wafer. Sometimes there's little defects and it's not a problem if you're going to break up a wafer into like 64 chips because you just throw away one. But if there's one defect on basically every wafer, well, then your yield is going to be super low. We talked to Andrew about how he solved that by creating redundant cores and they don't actually activate all the cores. And so they sort of built in that redundancy and got through that. But that was an early critique of the strategy.

• 7:08Jordi Hays?

  Yeah, you can use.

• 7:10John Coogan?

  You can use it.

• 7:10Jordi Hays?

  Use cerebral strips today.

• 7:12John Coogan?

  Yeah.

• 7:12Jordi Hays?

  As.

• 7:13John Coogan?

  In Codex 5.3 Spark. And so they are very fast. And I think the most important thing that semi analysis points out is that token consumers, customers, businesses have shown this revealed preference for and a willingness to pay for speed. And they sort of contextualize it and they quantify it based on their own usage and their experience with Anthropic's OPUS models. So OPUS 4.6 fast mode famously, I like that they use famously because it's like famous to like 100,000 people, but famously charges six times the price for two and a half times the interactivity, although it's now under 2X faster.

• 7:54John Coogan?

  So effectively you're paying, you're paying six times the price for two times the speed. That's disproportionately more money for what you're getting. You would think you'd pay six times the price for six times the speed potentially. But there was a lot, there were a lot of questions about would people really pay for more, that much more for faster models, faster inference? And Andre Karpathy, Sam Altman was saying like, do you want faster models or smarter models? And he was like, I think in Sam's point was sort of like, these models are very intelligent, but using them faster is sort of more of a magical superpower. And Sam was, I felt like Sam was sort of leading it towards like, speed is really important

• 8:39John Coogan?

  as the next leg up on productivity. And Andre Karpathy was like, no, I just want smarter. I'll just let it run overnight. I don't mind that. But that's not what everyone is feeling. Some people, especially the semi analysis team leaned more towards interactivity or speed over raw intelligence power.

• 8:57Jordi Hays?

  Well, yeah. And then there's the other aspect, which is just capability, right? Capability, speed and intelligence.

• 9:04John Coogan?

  Yeah, I think.

• 9:06Jordi Hays?

  Like that's, that's a question.

• 9:08John Coogan?

  Yeah.

• 9:08Jordi Hays?

  People have had is like, okay, what is, is there a 200? 50 IQ model?

• 9:14John Coogan?

  Yeah.

• 9:15Jordi Hays?

  Or is there just a much more capable model?

• 9:16John Coogan?

  Yeah, the unhobbled one.

• 9:18Jordi Hays?

  Tools more efficiently.

• 9:19John Coogan?

  Sure.

• 9:19Jordi Hays?

  And is really quick.

• 9:20John Coogan?

  Yeah, and that's actually important to Cerebras because as we'll get into, the chips do face a hurdle with scaling in terms of longer context windows, all that stuff. But Semi Analysis shared their breakdown. They were run rating $10 million on AI spend in April. And they said that April was the peak, which is interesting because that was sort of, I would have expected a straight line, continued growth, but they might have, you know, been really pilled, tried it all, and then eventually said, oh, okay, well, for this, we can probably use a cheaper model. We can probably optimize. We don't want, you know, 95% of our revenue going towards tokens. We want a little bit of margin to pay our team.

• 10:04John Coogan?

  And obviously, it's a business, they need to make profits. So Semi Analysis was spending 80% of their AI spend on Opus 4.6 fast. And so they were willing to pay that 6X, like 80% of their spend disproportionately more, even though when their sort of expectation, as they put it, was that they would always want the smartest model, they would be very cost conscious. They were, in reality, saying, I'm going to hammer fast mode. I want to spend on fast mode. And then I think the price was significant. And so there's probably sort of a renegotiation about when is the right time to use fast versus when do you want to leave something running overnight? But OpenAI is clearly very pilled on Cerebras. Cerebras has a big 750-megawatt deal with OpenAI.

• 10:48John Coogan?

  And the chips are already serving GPT-5.3 in Codex under the name Spark, as we mentioned. And I've used it, you should use it. It's a very interesting experience because I think a lot of people have interacted with LLMs and chatbots, and they're sort of used to this token streaming in. And it's sort of cute because the phone vibrates and it feels like you're talking to someone who's typing. But it's way better when you just land on a Wikipedia page, the full thing loads, and you can just scroll however much you want. And that's the experience that I think people want and will demand across everything, especially if they're firing off a coding task. They just want the code immediately. And so. You can also just go talk to the model like it's ChatGPT. You don't need to use Codex 5.3 Spark

• 11:30John Coogan?

  in a coding context. You can ask it whatever you want and it will just act like a normal LLM. And I personally think there will be huge demand for faster inference across all parts of the AI economy. There's this old latency-

• 11:45Jordi Hays?

  Yeah, another way to think about it is like if you have two employees with the same skill set, the same capability, but one is just five times faster, right? That person can create way more value in the organization, right?

• 12:01John Coogan?

  And for a lot of things, if they're two times faster, they do command six times the price. Because over the course of the year, a sales rep that sells twice as much, or someone who's twice as effective as their job, might actually command a salary that's five times, six times the actual price. And so there's lots of other

• 12:23John Coogan?

  contexts across different business lines that you could draw to. There's also this old adage or saying about e-commerce that might, may or may not be real, but it's probably been transposed so many times in think pieces. I don't know the real quote, but it goes something like every 100 milliseconds of latency costs Amazon 1% in sales. I don't know if that's the right way to think about it, but basically as Amazon was scaling, they realized that there were a bunch of things that they could do on the UI side, a bunch of things they could do on the layout side. Where does the buy button go? Where does certain information go? The price, the discount, all of this stuff, the images. They were tweaking the front end, but as they did that, they added bloat and the pages would slow down. And what they noticed was that the slower the page was,

• 13:07John Coogan?

  the lower the conversion rate, because people were waiting for amazon.com to load, click on the page. It takes a second. They get distracted. They go somewhere else. And I think that that's happening in LLM use cases all over the place. People fire off a query and they're like, ah, it's taking too long. I'll go scroll Instagram reels. There's always an Instagram reel. And they'll be like, oh, I kind of forgot about what I was asking about. I didn't get my answer. And so, and that's certainly true in business contexts as well. So- This is currently playing out in AI inference. Companies are paying disproportionately more for faster inference, and this is good for Cerebras. But semi-analysis does point out a number of potential headwinds and problems that the team at Cerebras will have to solve or contend with over the next few years.

• 13:49John Coogan?

  Mainly, Cerebras chips are not currently as capable of holding larger models in the limited memory that they have, or networking multiple chips together to serve larger models. We've heard about the NVL 72 racks that wire a whole bunch of Nvidia chips together can serve these really large models. That has potentially been a challenge. So semi-analysis says, moreover, the industry is trending towards larger context windows. Add infinitum, 128K context will certainly not be acceptable for long, especially with the prevalence of agentic workloads. And it doesn't look like there's a simple solution of just scaling the wafer size larger, because TSMC is set up with a standard wafer size,

• 14:35John Coogan?

  and adding more memory to the existing architecture. Because Cerebras' whole design depends on a lot of SRAM, static, random access memory directly on the wafer. But SRAM is no longer shrinking as much with each new semiconductor node. So the last version of the Cerebras chip, they've done WSE1, 2, and 3. They're on 3 now, but WSE2 had 40 gigs of memory. WSE3, you would expect, oh, we want a doubling, right? We want a 10x or something. It got 44, so a 10% increase over one process node, one iteration. And semi-analysis is asking the question of like, okay, is there an easy way to double this?

• 15:20John Coogan?

  Is there a question, like, how will this scale as the models get bigger to add more SRAM? You might have to sacrifice compute area, because everything is being done on one wafer. If you want computation or memory, there's a direct trade-off, because you only have so much space on the actual wafer. And so there might be a much harder 3D wafer bonding approach. Which is doing stack stuff like there are other potential ways, but there's not like a linear. Oh yeah, of course, the next version is going to double again. And so that is a potential problem that they need to work through. Uh, but in an agentic workflow, I think it's entirely possible that you want like the biggest, most powerful model,

• 16:01John Coogan?

  like the vice president delegating things that you want the vice president.

• 16:06Jordi Hays?

  Senior or junior?

• 16:07John Coogan?

  Senior vice president, uh, maybe just the president, uh, handling the critical work. Uh, so future models might not, and that might not be on Cerebras. That might be on N V L seventy two or T P U's or something. Uh, but, uh, I imagine that we will quickly jump from the agentic age, where you're firing the best, smartest model at the full workload to the orchestration age. And there will be hybrid approaches. So the biggest and best models will delegate certain tasks to smaller, faster models, just like they go and do database queries these days, or they go and search the web these days. And that's CPU bound. There will be certain workloads that the larger, smarter agent model, like the boss model can sort of delegate to the Cerebras speed workers, the faster workers.

• 16:52John Coogan?

  So if you need to, I mean, just yesterday, we were, I, I was asking Ben about like, uh, he pulled all our guests together. It's like, I'd love to know the geolocation of every single guest. And it's like, okay, run that same inference query of like, look up this company, figure out where it is across a thousand or two thousand, uh, individual rows. And something like that's highly parallelizable. If you want that to happen really fast, it might not need a G P T five point five class model, right? Uh, it might be okay, uh, to run faster on a smaller model that works on Cerebras. Uh, and so it's hard to predict the exact mix of chips that will power large networks of agents. Uh, but, uh, these different designs, to me, they seem more complimentary than directly competitive.

• 17:36John Coogan?

  Like a year or two ago, when, uh, Daniel Gross wrote A G I bets and was sort of like his N V D underpriced. I don't know if Nvidia, he's managed to that on, on, on, uh, Stratechery, but, uh, Like, you know, we entered the AI age and everyone was like, oh, GPUs are the future. Nvidia is the company. But then it was like Nvidia GPUs are good and then also CPUs are good and ARM is getting into it and Intel's doing very well.

• 18:02Jordi Hays?

  We're gonna make big computers.

• 18:04John Coogan?

  Big computers, big computers for sure. And so I'm extremely optimistic, obviously, and very excited to talk to Andrew Feldman, Doug O'Laughlin, Eric Vishra, a bunch of folks who have been involved with the journey.

• 18:17Jordi Hays?

  Yeah, Eric did the series A.

• 18:21John Coogan?

  Wow.

• 18:21Jordi Hays?

  In almost a decade ago, 2016, and Benchmark are sitting on, I guess as of this morning, like many, many billions of cerebrous.

• 18:33John Coogan?

  It feels like they brought a huge team to the NASDAQ. Look at this photo, the second post we have. Obviously Andrew's there, a lot of the team members, typically the key banker. But, you know, we've been to some IPOs and some of them have had smaller teams. This one feels extremely celebratory and feels like a very broad, inclusive crew came together. What else is in the timeline?

• 19:02Jordi Hays?

  And the Class B shareholders have 99% of the corporate voting power. So founders in control.

• 19:09John Coogan?

  Founders in control.

• 19:13John Coogan?

  Honam says, "This IPO illustrates the power of an individual partner over the brand name of the firm. Pierre Lamond was a partner at both Sequoia and Cosla, but instead of those firm backing Cerebras, it was Eclipse, the firm he joined at the age of 84, that backed this little-known chip company multiple times in the early days. What a way to wrap up a career. He was born in 1930, the same year as Warren Buffett." Wow. That is an awesome story. I love that. Matthew Siegel is giving, the recovering CFA is giving some color on what happened to the order book. One-third of the order book, the folks that said, "I want shares in the Cerebras IPO," one-third of the book

• 19:52John Coogan?

  got zero. And the top 25, I guess the top 25 investors took 60%. That's probably the big investment funds, the Fidelities, the State Streets, the BlackRock.

• 20:03Jordi Hays?

  They have done quite well today. This picture looks wildly different than the Klarna IPO last year, in which... Uh, only a handful of the team at Klarna popped over.

• 20:16John Coogan?

  Yeah.

• 20:16Jordi Hays?

  At the NIC, IPO'd and then went back, back home.

• 20:19John Coogan?

  Yeah, it was very much just like another day at the office for the team. Uh, yeah, that's definitely what I was contrasting it to. Uh, the cerebrous valuation every round, series A in 2016, a hundred million dollars. Foundation benchmark and eclipse. Co2 led the series B in 2016. VY Capital led the series C in 2017. Then 1.6 billion valuation in 2018, 2.4 in 2019, uh, 4 billion in 2021. Uh, that, that was like maybe a little bit of a slump, but then 2025, Atreides and Fidelity come in at 8 billion, then Tiger comes in at 23 billion dollars. Then in May of 2026, they IPO at 48.8 billion.

• 21:04John Coogan?

  I can sort of just do the.

• 21:05Jordi Hays?

  Nice work from.

• 21:06John Coogan?

  Self.

• 21:08Jordi Hays?

  I don't need any help.

• 21:09Speaker 02

  I don't need the soundboard to do it. Am I doing it for real or am I using the soundboard? You don't know.

• 21:17Jordi Hays?

  Incredible work from Tiger.

• 21:19John Coogan?

  Yeah.

• 21:20Jordi Hays?

  Coming in at 23 post.

• 21:21John Coogan?

  Very, very good.

• 21:22Jordi Hays?

  And, uh, now up dramatically in just four months.

• 21:28John Coogan?

  Very, very good. Well, our first guest is joining us in eight minutes. Uh, let's run through, uh, the Kevin Warsh news because he has been confirmed as the Fed Chair, uh, and we'll run through this and then we will come back to some of the other stories, uh, because we have a gap later in the show. So, uh, Kevin Warsh, who, uh, is most famous for interviewing Alex Karp on CNBC while Alex Karp appeared to have popped a nicotine pouch and then spun a notebook on his finger. Did you ever find that clip, Tyler? Is that in the?

• 22:02Jordi Hays?

  Yeah, it should be.

• 22:03John Coogan?

  Okay. Let's.

• 22:05Jordi Hays?

  Yeah, we have the, the video here.

• 22:06John Coogan?

  That really put Kevin Warsh on the map because, uh, this is what he's.

• 22:12Speaker 03

  And I've heard he was a recent like sale. I remember I showed up in your office once, I was dressed like this, and I think you screamed at one of the guys, you said, Kevin's here, he looks like the guy from IBM. And I was talking about, well, you know, we need like really finance control, you know, how are you going to sell the product and all this stuff?

• 22:31John Coogan?

  Okay.

• 22:32Speaker 03

  But I would say you certainly built that.

• 22:34John Coogan?

  He's really spinning it. I didn't realize he goes back to it like four times and keeps spinning it.

• 22:38Speaker 03

  Sales isn't a dirty word anymore.

• 22:39John Coogan?

  He's really good at this.

• 22:40Speaker 03

  But somehow you grafted that on to the, to the strange company that can produce these products. How's that transition been if I've got it right?

• 22:48John Coogan?

  Okay, wait, wait, but so, uh, I have so many questions. First, we have to get him to recreate that for sure. Um, second, uh, I, I thought, Tyler, I thought we were talking about that being on CNBC, but that looks like just a podcast, like that doesn't have any chyron or?

• 23:04Speaker 04

  Yeah, no, I, I don't think it was actually on, I think it was from Palantir, like that was a Palantir.

• 23:08John Coogan?

  Oh, okay, so it was just like a random podcast and then, and then, uh, when I've seen on CNBC, they were playing the clip, got it.

• 23:14Speaker 04

  I think so, yeah.

• 23:15John Coogan?

  Probably a reaction stream over there. Um, well, let's go through what happened because Kevin Warsh has been confirmed as the new Fed Chair. The vote was 54 to 45 in the Senate. Uh, the divided vote signals challenges ahead for Warsh, who faces a Fed committee skeptical of rate cuts that Trump has demanded. And of course, we talked about the inflation news. Typically, you don't cut interest rates, uh, going into inflation and potentially economic stagnation. Uh, you definitely don't cut rates in, that's why stagflation is so difficult because if you have, uh, stagnation and low inflation, you can cut rates very easily. Maybe the economy starts overheating a little bit, you get a little bit of inflation, but then you can pull back. That's what we've done historically.

• 24:00John Coogan?

  Vice versa, if the economy is running hot, you're seeing high GDP growth and high inflation. Well, if you raise rates, you're going to pull back on both of those. But in stagflation, you're seeing both inflation and, and economic stagnation, harder to deal with as a Fed Chairman, which is potentially the task he will be faced with. So, uh, the Senate confirmed Kevin Warsh as the Federal Reserve's 17th Chair Wednesday in a largely party line vote that required, that reflected the how tensions with the White House have dragged the Fed deeper into the political fray. I was looking back at the old Fed Chairs, there's some absolutely legends in there because some of them have really long runs. So very quickly you get back to the black and white portrait in the painting as you go back in time.

• 24:43Speaker 04

  Who's your favorite Fed Chair?

• 24:45Jordi Hays?

  Volker?

• 24:46John Coogan?

  Yeah, Volker is pretty good. Bernanke is crazy.

• 24:49Jordi Hays?

  An absolute dog.

• 24:50John Coogan?

  Um, yeah, I don't know. Hard to pick, hard to pick. Uh, Warrish, who was known, who was nominated by, for the post by President Trump in January, won confirmations, uh, fifty-four to forty-five, earning support from all Senate Republicans, but just one Democrat, John Fetterman of Pennsylvania. Uh, Senator Kirsten Gillibrand of New York did not vote. No Fed Chair has been confirmed by such a narrow margin since Senate approval became a requirement for the job in nineteen seventy-seven. Chair Jerome Powell, whose leadership tenure, whose leadership tenure ends Friday, captured at least eighty votes in Senate confirmations for each of his two terms atop the Fed. Wow, Jerome Powell,

• 25:32John Coogan?

  just fan favorite of both teams. Eighty votes in the Senate, that's pretty significant.

• 25:38Jordi Hays?

  Yeah, is he gonna be looked at as a potential future podcast?

• 25:43John Coogan?

  Throughout history? Get a, maybe VC fund going?

• 25:46Jordi Hays?

  No, but what, but, uh, when you look, when, when we look back, like, it seems like the last two, three years, he's handled himself.

• 25:57John Coogan?

  Yes.

• 25:57Jordi Hays?

  I mean, he's, he's had a really tough situation and he's managed to land the plane.

• 26:01John Coogan?

  When did Jerome Powell get, first become the, uh, the Fed Chair? Uh, when, when was he? He's been assumed office twenty-twelve. So, I think the, uh, wait, oh.

• 26:16Jordi Hays?

  Twenty-eighteen.

• 26:17John Coogan?

  Twenty-eighteen. Uh, he was right, he was right after Janet Yellen. And so, I think, I, I, I'm, I'm, I'm putting him in the conversation, Jordy, but I'm not giving him the goat trophy. Uh,

• 26:28Jordi Hays?

  Yeah, I'm not saying, I'm not saying that.

• 26:29John Coogan?

  But merely because the, the challenges faced, he wasn't confronted with a great recession, a dot-com bubble bursting, a, uh, a Black Friday, uh, he, like, he, like, the economy from twenty-eighteen to today.

• 26:44Jordi Hays?

  Global pandemic doesn't, you don't, you don't count a shutdown of.

• 26:47John Coogan?

  No, because, no, no, no, I actually don't because the economy was pretty strong in 2019 and it went into, it went into 2020 with pretty strong consumer balance sheets, low debt. There wasn't a shadow banking economy. There was no bomb in the US economy waiting to explode. And so although we saw high unemployment briefly and we did have to stimulate the economy, that's not his job. His job was to set rates. There was a little bit of like, I mean, maybe you put the inflation, you know, the end, the ZIRP era and the end of the ZIRP era and all of those gyrations on him, but those, the problems that were

• 27:28John Coogan?

  downstream of both the ZIRP era and the end of the ZIRP era were suffered mostly and benefited mostly on like tech companies and Silicon Valley companies that had really long cash flow horizons. And so there was not a moment where it was a dire situation that the Fed had to intervene in a meaningful way and like save the economy like in 2008. It's a big deal. He did a great job, but he didn't, he wasn't faced with the same challenges of a Bernanke, for example. That's what I'd say. Tyler, what do you think?

• 28:01Speaker 04

  Yeah, I think that's reasonable, but also like, you know, if Powell was worse at his job and you saw some crazy crash because of COVID and then he brought it back, like then it'd be like, oh yeah, he did face this massive thing. But because he did, you know, such a good job, maybe you didn't see any like massive crash. So like the, like nothing super bad happening is evidence that he was really good as a Fed Chairman, right?

• 28:24John Coogan?

  Uh, yeah, yeah, maybe. He's a defensive back. You know, if they don't score, there's no great plays because he's just shut down, shut down cornerback for the last couple of years, potentially. He's definitely in the top 17. I'll give him that. Anyway, Kevin Warsh, Chair Jerome Powell, whose leadership tenure ends Friday, captured at least 80 votes in the Senate. The previous Chair Janet Yellen was a little bit more controversial, confirmed 56 to 26. Seems like not that many people showed up in 2014 to vote for Janet Yellen, with many senators absent because of bad weather. Interesting. I wonder what would have happened. I mean, it feels like she would have cleared it no matter what. But a difficult economic backdrop and Trump's broadsides against the

• 29:09John Coogan?

  Fed independence have set up the central bank for a thorny leadership transition. Senate Committee confirmation hearing last month, Worsch faced intense questioning from Democrats over how he would maintain the Fed's independence from a president who places priority on personal loyalty. Worsch said he would preserve the central bank's monetary independence and that he had made Trump no promises about policy decisions. Powell citing concerns about political attacks on the institution plans to remain on the Fed's Board of Governors, defying Trump's insistence that he leave. He says, "You're going to have to drag me out of here. I'm staying at the Fed," says Jerome Powell. Worsch is 56. He's been immersed

• 29:53John Coogan?

  in monetary policy debates for decades, frequently as an outspoken critic of the Fed. Former Morgan Stanley investment banker, he became the youngest Fed governor in history at 35, when former President George W. Bush appointed him to the central bank's board in 2006. During the financial crisis that struck two years later, he played a key role in tying up rescue deals. He was the bridge between Wall Street and the Fed that sort of Bernanke deployed. And so that's what, those are his laurels that he will not be resting on, but he will be drawing on from experience. So Worsch left the Fed in 2011. He had become a critic of its direction, concerned that as the economy recovered, the Fed's

• 30:33John Coogan?

  ongoing efforts to support financial markets went too far. So we will have to check in with the progress on Fed Chairman Kevin Worsch soon. But fortunately, we have our first guest of the show, Amy Reinhard from Netflix in the waiting room. Let's bring her in to the TV's on LTR. Amy, how are you doing?

• 30:55Speaker 05

  How are you doing?

• 30:56John Coogan?

  Doing fantastically.

• 30:57Jordi Hays?

  It is an honor to have you here.

• 30:59John Coogan?

  Yes.

• 31:00Jordi Hays?

  Our first ever guest from Netflix.

• 31:02John Coogan?

  I think so. Thank you so much for taking the time.

• 31:05Jordi Hays?

  Only took like 2,000 interviews to get you guys on here, but we're excited to meet you.

• 31:11Speaker 05

  Honored to be the first.

• 31:12John Coogan?

  Yes, yes. I mean, obviously, big fans of both Netflix and advertising, but would love to start with a little bit of background on yourself, your experience, and just sort of your intro to how you found yourself as the president of ads at Netflix today.

• 31:30Speaker 06

  Sure. I've been at Netflix for about nine and a half years now in a couple of different roles. Started out first in our content organization, doing both licensing and then overseeing production. And about two and a half years ago, I stepped into this role overseeing our ads here. And it's been a fantastic two and a half years, a lot of excitement. Feels like we've been able to accomplish a lot and great company.

• 32:00John Coogan?

  If you take us back to the initial, the initial push into ads, what can you tell us about the trade-offs, the build versus buy debates that were going on at the time? The, just maybe even the cultural changes? I think we are super, you know, we love ads. We think it's a fantastic business model. It's a way to deliver great value to customers at lower prices and there's so many benefits. But culturally.

• 32:27Jordi Hays?

  Yeah, what was the debate like?

• 32:28John Coogan?

  Yeah, what was it like internally?

• 32:31Speaker 06

  Yeah, well, I think it's been well-publicized, you know, that not being in advertising was a strategic bet for a long time, right? And so, early in 2021, 2022, when we started to talk about the notion of getting into this business, yeah, it created a lot of, I think, fair to say, you know, angst within the company for a bit of time because it was such a big shift, to your point, culturally and strategically. So I would say, and then we made the announcement that we were getting into it. And in terms of the whole build versus buy, you know, we partnered with Microsoft to enter the business very quickly and that got us up and running.

• 33:15Speaker 06

  But it's been, you know, we made the decision about 18 months ago to lean into building our own tech stack. And we launched that a year ago, so we're just a year. I keep having to remind myself how nascent our tech stack is because we've been able to deliver so many developments and so much progress against that over the course of the last year. But I would say, full circle, you know, we were past, we put to bed all notions that we shouldn't be in this business. I think everybody understands strategically now that it is important for us to be that. And we've been able to grow our user base because we have been able to get to a lot more consumers who are looking for that low-cost option and are fine with ads, right? So it's been a great thing for the company, I think, and everybody's on board.

• 34:00Speaker 06

  And, you know, the recent news, as you heard, which we just announced our upfront yesterday, that we're expanding that ad tier into 15 more countries around the world. There you go. Fantastic. Everybody's on board, full speed ahead.

• 34:15Jordi Hays?

  How are you pitching the ad product today? Is this primarily brand marketing? Is there a timeline to get to more of a, like, performance focus? Like, what is your pitch to advertisers?

• 34:27Speaker 06

  Yeah, you know, as we see in the marketplace, advertisers are oriented around outcomes, right? So we know that we need to be a full funnel solution, and we believe that we have the metrics to support that. So to your point, we've been very successful with some of the brand partnerships that we've done over the course of the last year and a half. But we've also seen really good conversions in terms of lower funnel and making sure that we're driving purchase intent and consideration. So as we build out more of our solutions, we are going after that full funnel solution.

• 35:03John Coogan?

  What are conversations like around how brands should, how much?

• 35:10John Coogan?

  Brands should want to associate with particular pieces of content. Because I think some brands might come in and say, well, I'm advertising, you know, strollers and I know that parents will be watching K-pop Demon Hunters with their kids. And so like this is the most on the nose directed and I care. I want my brand linked to this particular piece of content. But we've seen time and time again that like, once the algorithms get good enough, once dynamic ad placement can actually flourish, you, every company tends to see better performance there. So where are the ad buyers today in terms of those trade offs?

• 35:53Speaker 06

  You know, there's a full spectrum. So absolutely, we get advertisers who want to be associated with K-pop Demon Hunters, like McDonald's or with Stranger Things, right? Like those big moments, those are oftentimes the easiest to sell. I think K-pop Demon Hunters is actually an interesting case because when it came out a year ago, we didn't know that we had a hit on our hands until about 60 days into it. And I think that's what the magic is of Netflix is that we have so much variety and depth of content that we're programming and trying to hit all audiences that you never know where your next hit is going to come from. And so selling those audiences, selling that, you know, audience behavior moods,

• 36:34Speaker 06

  targeting moods and relevance is really important to a lot of different advertisers. So again, we just want to meet advertisers where they're at. And some folks understand that being across a number of different programming choices is important. And some people want to tag along with those big temples and we want to, you know, provide those opportunities.

• 36:53John Coogan?

  Yeah, I mean, it's interesting. Netflix has like deep, deep experience in machine learning, AI, recommendations, all parts of like, you know, high throughput data processing. But I'm interested in any learnings or surprises from building the proprietary ad delivery stack. Has it been as expected? Has it been, there's new skills that you need to bring because a lot of Companies have have been successful at scaling content and then and then struggle to figure out ad delivery. You obviously haven't. But then also, there's this AI boom going on, which can help with productivity, but also new algorithms and new ways to actually target content. And so I'm

• 37:36John Coogan?

  interested in in what where where the build out didn't match your expectations or surprised you?

• 37:44Speaker 06

  Um, you know, as a tech company, we do a lot of testing and we go into things with hypotheses. So we're constantly testing things around our member experience. And, you know, I think that's been a differentiator for us, like really leaning into reducing member friction, making sure that member experience is a good one with lower ad loads, lower frequency apps, those types of things. But we do know that there are times when we have to pivot. So I would you there's not just one example of a time that we've had a wrong hypothesis. We're constantly testing things out and figuring out where we, you know, where that those hypotheses prove out, where we need to pivot

• 38:26Speaker 06

  and and, you know, change swiftly. So it's hard to point to one specific moment where we it felt like it's been a learning. I would say the bigger learning for us just as a company is, you know, this is a relationship business too. And we've never this, you know, you talked about kind of getting into ad sales, right? We've never had a sales team in our overall organization. So I would say there's more organizational learnings than necessarily tech learnings, because we're so used to that tech cycle of testing and learning and iterating.

• 39:02John Coogan?

  How are you thinking about the the ad product feeding back into the content production? I've noticed that Netflix has been fantastic, in my opinion, of creating more engaging content. I was watching The Rip with Matt Damon, and you click the play button and you see Matt Damon's face in within like two seconds. And it clearly confirms that you're watching the right movie. And then the title card comes in and that's a departure from 50 years ago. You watch The Shining and you know, it's a helicopter shot of a car for five minutes and they show you the full titles. And it is a different style of editing and some people lament the old style.

• 39:44John Coogan?

  I particularly like the new style and I'm wondering about, we went through a period of time when television, uh, there was the famous like fade to black and then the ad break and then fade back in and you resume. And Netflix has never had to contend with that in media products, but is that going to come back? Is there a next generation pattern for creating content that can both have ads in it and not? Is, are you seeing glimmers of what the future, like the impact of ads might have on, on like the editing structure and the timing and the pacing?

• 40:16Speaker 06

  Yeah, a lot of it, to be honest, depends on our creators. So, you know, working with talent who, um, and some of those, and some of that talent may be more tech forward and are thinking through those types of things when they're writing shows. I'll give an example, um, Shonda Rhimes was used to writing for broadcast and network for many, many years. So when she writes a lot of her content, she's already thinking about where those natural breaks are. Uh, but not all writers do that and that's okay. We can still find what are those natural breaks because we want to make sure, again, getting back to the member experience, that it's not intrusive or it doesn't come mid-sentence, right? And is cutting off any of the action.

• 40:56John Coogan?

  Yeah.

• 40:56Speaker 06

  Um, we're able to adapt to, to any way that our creators want to write the content and fit it into that member experience.

• 41:03John Coogan?

  Yeah.

• 41:04Jordi Hays?

  For US markets, is this, uh, is, is there any enterprise spending? I would imagine that a lot of enterprise buyers like have been Netflix subscribers for a really long time. And, um, maybe they, they're not getting served any ads at all. And so this is more of a consumer opportunity or am I thinking about that the wrong way?

• 41:27Speaker 06

  We've most of our clients right now, the target segment that we're going after are enterprise top 400 clients, right? Because we think those are the ones who

• 41:37Jordi Hays?

  Oh, sorry. I meant I meant I meant B to B versus like B to C company.

• 41:42Speaker 06

  Oh, we think about this more as a B to C opportunity for the most part. And I think as we expand our learning and expand our offering, may get into the B to B space, but for the most part, B to C.

• 41:54John Coogan?

  Yeah, yeah, I feel like all of that, like the higher up market, more targeted, that's all unlocked with scale. Once more, there's more learnings on responses. I'm wondering what other signals you think might be valuable because many times, you know, advertisers and advertisements shown during a TV program are very passive, harder to track. But if someone's watching on their phone, there can actually be a call to action, a trackable link, like I imagine the data is messy, but how important is it to sort of close that loop in an ATT era where it's a little bit trickier, but there's a lot of things that you can do on the on the signal side anyway?

• 42:39Speaker 06

  Yeah, you're absolutely right. And this is an area where I talked about the testing and iterating. We're leaning in a lot on the testing. What does that screen experience look like? You know, again, how do you meet the customers where they're at without being sort of intrusive? A lot of testing going on in this space. But the biggest thing for us is, you know, privacy safe. We want to make sure that we're leaning into, again, that member experience and taking care of our members' data. But a lot more, I think, to come.

• 43:07John Coogan?

  Have you been surprised by the return of the QR code in maybe podcast advertising? But I see it a lot because people are watching on, you know, you they'll watch a YouTube video on a TV and the creator will, you know, hard code in a QR code to link out. And that was something I had completely written off QR codes. And then they made a major comeback.

• 43:30Speaker 06

  No, I agree with you. From a member experience may not be the most simplistic thing. Understanding kind of the ad tech on the backend, I'm not surprised by it because it to be pretty complex pretty quickly.

• 43:40John Coogan?

  Yeah, and there's some, we hit some sort of like inflection point where the, maybe it was in a certain iOS revision where the camera app became so easy to press a button and pull out, and then it detects the QR code so quickly that that flow, because you used to need to like have a QR app separately to scan it, and now it's all integrated, and so someone can just whip out their phone and run right to it. Jordi, you have something else?

• 44:05Jordi Hays?

  Uh, nothing, nothing super top of mind right now. I mean, last question I had is, do you ever expect Netflix to serve more short-form, vertical video-style ads in something like the Clips tab? I know the Clips tab right now is focused on basically like content discovery, but I imagine in the future, people will spend more time in a format like that, especially on mobile.

• 44:30Speaker 06

  Absolutely, and that is one of the announcements we had at our upfront yesterday is that as we roll out this vertical video content, that we are going to be offering that to advertisers along with our todoom.com coverage in 2027. So yes, we think that is a big opportunity too.

• 44:50John Coogan?

  Last question from me. I would love to know about the intersection between games and ads. That's been a huge, huge growth driver in other, with other categories and other companies, but I'm wondering where that is in the roadmap, how you're thinking about that?

• 45:07Speaker 06

  We haven't thought about that yet. Look, our roadmap, I could fill our roadmap for the next two to three years based on just some of the foundational things we want to do and a lot of the innovative areas we want to lean into, but it's an area that we're keeping an eye on. And as we watch that games engagement increase, I wouldn't never say never, I've learned to never say never at Netflix, but it's not something that's on the near-term roadmap.

• 45:31John Coogan?

  Okay, thank you. Well, thank you so much for joining. This was a real quick-

• 45:34Jordi Hays?

  Great to meet you, Amy. Thanks for breaking it down.

• 45:36Speaker 06

  Thank you for having us.

• 45:37John Coogan?

  We'll talk to you soon.

• 45:38Jordi Hays?

  Cheers.

• 45:39Speaker 06

  Thank you.

• 45:41John Coogan?

  Moving on from Kevin Warsh, who is the newest Fed Chair. We have a debate. We have a debate going on in the timeline around General Catalyst's advertisement. Some are calling it an attack ad. Particularly Andreessen Horowitz is calling it an attack ad. We touched on this yesterday, but if you did not tune in, General Catalyst, the large scaled, what do they call it, giga funds now? What do they call it?

• 46:07Jordi Hays?

  Platform.

• 46:07John Coogan?

  Platform fund, but there's something else. It's a huge, huge venture capital firm. They launched an advertisement which we can play again to refresh everyone. Let's scroll back to the beginning.

• 46:16Jordi Hays?

  Yeah, let's play it from the beginning.

• 46:17John Coogan?

  Add some audio. It's only 30 seconds.

• 46:19Speaker 07

  Hi, I'm GC.

• 46:20Speaker 08

  And I'm VC.

• 46:22Speaker 07

  Who's your friend here, VC?

• 46:23Speaker 08

  This is Woof AI, an AI-native companion platform that combines robotics and machine learning. You'll never want a real dog after this.

• 46:32Speaker 07

  Well, I think people like dogs as they already are, though, VC.

• 46:35Speaker 08

  You don't need to walk it. You never need to tell the kids you sent Milo to the farm. We're leading the seed and could probably make room for you.

• 46:42Speaker 07

  Well, I'd love to hear more, but we actually have a really high bar around responsibility for these things.

• 46:49Speaker 07

  Is Woof AI okay?

• 46:51Speaker 08

  Of course he's fine.

• 46:55Speaker 08

  Oh, sorry, buddy.

• 46:58Speaker 07

  Doesn't look happy.

• 46:59Speaker 08

  It's easy, easy. Stay, stay. No, no! Stop, stop, stop, stop!

• 47:08Speaker 07

  I'm sure he'll be fine.

• 47:11John Coogan?

  Okay, tons of thoughts, but you kick it off. What's your read on this? Take me through it.

• 47:18Jordi Hays?

  So the, the, the actual ad, the way it's shot.

• 47:23John Coogan?

  Mm-hmm.

• 47:24Jordi Hays?

  The timing.

• 47:25John Coogan?

  Mm-hmm.

• 47:26Jordi Hays?

  Cinematography.

• 47:27John Coogan?

  Mm-hmm.

• 47:28Jordi Hays?

  It's fantastic. I do.

• 47:34Jordi Hays?

  I think the I think the ending is I think the ending is funny, right? It makes me smile a little bit. The dog's going haywire, the robot dog's going haywire. My first thought is I actually think there's a huge opportunity for a robot dog that is 10 times better than existing robot dogs. There are robot dog toys out there, so I don't.

• 47:55John Coogan?

  Specifically in the toy market, because this is a Boston, this is probably, I mean, it seems like it's a Boston Dynamics robot dog. And those are not typically used as pets that I know of. I think that they are more deployed. Whenever I see a demo of a Boston Dynamics robot dog, it's like walking through a nuclear power plant that you don't want someone walking into. It's like an industrial product for the most part. And then obviously a fodder for viral videos. But yeah, step through it because it is a crazy back and forth from both firms. First, the stats. General catalyst, oh, they're over 1,000 likes now, but 2 million views. So a lot of discussion. Anjney Midha says, it's a bit cringe, guys.

• 48:40John Coogan?

  Olivia Moore at Andreessen says, if I was a consumer founder, I would run for the hills watching this. Weird take from a fund that returns so much money from Airbnb and Snap because is the idea that like robot dog is a weird idea, but so was Airbed and Breakfast or Snapchat, right? The biggest B to C businesses always start out looking weird.

• 49:01Jordi Hays?

  Yeah, there's a way to there's a way to do the same pitch for Airbed and Breakfast, which is, you know, that empty couch? You know, that empty room in your house? What if you were to monetize it? What if you were to allow strangers to sleep in the empty room in your house? And and of course, that was a lot of the criticism at the time was that that it never was going to work. And it was strange, but then it created a lot of positive externalities. People built some businesses, people get to travel and integrate with local communities. Yeah, so so the main thing here is like it's it's.

• 49:42Jordi Hays?

  I do find it fascinating considering that when you actually look at the portfolio overlap, it is insane. Almost all of their winners, especially in the modern era, they are in both companies, right? And so they're backing a lot of the same companies. So it's super hard to counter position against them. Now granted, A16Z has a very different media strategy. They're very loud. They're all saying the R word a lot. And I think GC can kind of counter position against that. But you're not going to counter position against

• 50:23Jordi Hays?

  like what companies you're backing, right? GC, I had to look this up because I thought there's no way that is true. GC is in both Calshi and Polymarket. Big, great companies, right?

• 50:36John Coogan?

  Those have been at the center of the debates.

• 50:38Jordi Hays?

  But that is the center, those companies are at the center of the moral debate in tech, right?

• 50:43John Coogan?

  Certainly for the venture packed, controversial companies. There are some that are controversial that are not.

• 50:48Jordi Hays?

  Yeah. And all the funds have backed various like betting, grading related companies over the years. I think it was like GV did, what was it? Not DraftKings, but FanDuel, I think, back in the day. So it's not to say...

• 51:04John Coogan?

  There's companies that start out as controversial and then they become like completely normalized and everyone sort of comes around to like, oh, that's a good thing. Like Anduril is a good example. Both of these companies, both Andreessen and GC are in Anduril. When it launched, it was like, wait, you're building defense technology? That's insane. And now the whole Silicon Valley community has come around to the idea that it's really important to have a functional defense industry. And then on the other side, you have companies that come out as really controversial and people are like, this is the end of the world. And then they just sort of fizzle out. Like Cluley would be a good example of a company that like has done okay, but it's not like, oh, no one's doing homework. It's completely

• 51:44John Coogan?

  upended education and it's so successful and it's bad. It's like, no, it's like, it was, there was a lot of saber Battling around that, Sora went through a similar thing where everyone was like, this is gonna wirehead everyone. And then it was like, eh, just like some funny memes and ultimately, you know, moved on from it. Uh, and, and so it's, it's very hard to map like the controversiality to the ultimate outcome and where it lands. Like, uh, a lot of the, a lot of the prediction markets were not controversial when they were just predicting the election. That, that was not what was controversial. Tech started being controversial about it or saying it's controversial. Once it got into sports betting.

• 52:20Jordi Hays?

  Yeah. So that is interesting from a couple of ways. One is trying to counter position against Andreessen. GC being like the cool hip fund.

• 52:28John Coogan?

  Sure.

• 52:29Jordi Hays?

  That is, that, that wouldn't back the robot dog company, even though when you look at the portfolios, right? There's enough overlap that you can safely say if a company is ripping or has a lot of potential. They're probably both interested in investing in it regardless of what category it's really in.

• 52:45John Coogan?

  Yeah.

• 52:45Jordi Hays?

  Um, and then the other thing is that like historically, like A16Z is the firm that's trying to be like hip and cool and loud and, and do like new media.

• 52:56John Coogan?

  Yeah.

• 52:57Jordi Hays?

  And GC is the one that I've always viewed as like more buttoned up.

• 53:00John Coogan?

  Yep.

• 53:00Jordi Hays?

  More behind the scenes, more traditional, more traditional finance.

• 53:03John Coogan?

  New York, East Coast, Boston, and I love that.

• 53:05Jordi Hays?

  Yeah, we love that. We love that.

• 53:07John Coogan?

  I think Bain Capital is a good example of another, another firm that's been like pretty straight laced, but still has like aura behind it. And it's like, and they have a private equity fund attached to the venture, the venture fund. And like Bain's done some fun stuff. I mean, fuck it to Chow and they've leaned into things every once in a while. But they've never been like, oh, we're gonna be the, you know, the, the, the craziest brand strategy. It's been like, yeah, we're by the book investors. We find great companies, back them. And, uh, you know, Sequoia has done that too. You know, the, their whole pitch is very austere. And that's worked for a long time. It doesn't need to pivot the brand, which is maybe what this is like signaling for, towards. This is the first time, I mean, it's very rare for any VC to like take shots directly at another VC. Just because they're all syndicating deals to each other.

• 53:52Jordi Hays?

  It's way more direct. I mean, the, the, a lot of people clocked it by, because the actor. Could look, I guess, if you were far away enough.

• 54:01John Coogan?

  Like Steve Ballmer.

• 54:01Jordi Hays?

  Something like, yeah, Steve Ballmer.

• 54:03John Coogan?

  I think he looks like Steve Ballmer.

• 54:04Jordi Hays?

  Or Mark Andreessen.

• 54:05John Coogan?

  But people are saying Mark Andreessen.

• 54:07Jordi Hays?

  But the other thing is like.

• 54:08John Coogan?

  So, so, hold on. I was looking at Mark Andreessen photos and I could not find a single photo of him in a vest. So I don't know about this, but clearly, uh, Mark Andreessen, uh, did take issue with it because he, uh, he quote tweeted it something like 45 times, uh, which, which, you know, really amplifies it and creates more of a conversation about it. Uh, strategically, you might've just wanted to mute this if you don't want, uh, this to become a thing. But maybe he does. Maybe he's like, yeah, actually I do want to fight because like this is dumb and I'm gonna fight back and I'm gonna win. So, you know, uh, that's the strategy. Uh, but it does seem like Messi rolling around in the mud. When you're, when you're, uh, when you're wrestling with pigs, you're gonna roll, you're gonna get muddy, right? Isn't that the same?

• 54:50Jordi Hays?

  Yeah, it's, it's just, it's just, um, again, like creatively, it looks great.

• 54:54John Coogan?

  Yeah.

• 54:55Jordi Hays?

  It's very fresh. And I think Reggie and his team did, did great work, but it's funny to just like, take shots at a whole category of investing, basically, that is

• 55:07John Coogan?

  Yeah.

• 55:07Jordi Hays?

  kind of the bread and butter of GC's business.

• 55:11John Coogan?

  Yeah, yeah. Drawing, drawing the line in the sand. What, what is the actual line? The, uh, the really high bar for responsibility around these things like, because first off, it's just odd because like, robot dog feels very, very low on like the responsibility. Like if some VC was like, okay, we take responsibility really.

• 55:32Jordi Hays?

  Yeah. So I, so for example, the last robot.

• 55:34John Coogan?

  I would be like, don't fund gambling, don't fund, uh, cannabis, like, don't upset Sagar and Jetty, basically. It's like, it's like, what, the way I would, the way I would pitch someone if they were trying to be like the responsible actor fund.

• 55:47Jordi Hays?

  Interesting.

• 55:48John Coogan?

  And robot dog would be fine.

• 55:49Jordi Hays?

  The last robot dog pitch deck I saw was a company that wanted to use robot dogs as a replacement for actual, uh, seeing eye dogs.

• 56:00John Coogan?

  Oh, interesting.

• 56:00Jordi Hays?

  Seeing eye dogs are like incredibly expensive to train. Um, you know, uh, kind of out of, out of reach for, for, uh, many people. And so the opportunity for a robot dog that can maybe, you know, travel with you like on a plane without, you know, barking and needing to eat, right? Like, that's actually like a very world positive, um, uh, uh, kind of endeavor. I don't know if it'll, you know, work or what the business will look like, but, uh, but in general, like there's a, you know, anyway, so.

• 56:33John Coogan?

  I'm extremely bullish on robot dogs. I think it's very complimentary. Think about, I mean, especially if it's a toy for kids. Uh, think about how many vehicles kids have.

• 56:42Jordi Hays?

  Yeah, Gabe says service dogs can reach 60K.

• 56:45John Coogan?

  Whoa.

• 56:46Jordi Hays?

  And that doesn't count lifetime of all the other costs associated with dog ownership, which you know all of that.

• 56:52John Coogan?

  Next time I see someone with a service dog, bow. It's like, whoa, buddy. No, deflects like that. Um, no, uh, the, the 60, uh, the, yeah, I mean, ki- kids have like, you know, a bicycle, a tricycle, a, a, a, a RC car that drives and then another one. And like, it's like, like, you, you throw the robot dog in the mix. I feel like that's going to be in addition to a dog. Robot dog rips, as you said, when I said it. This is going, maybe a thousand robot dog startups will flourish. And, uh, and the most ironic scenario is because it will, the industry will become so deniable, the general catalyst and injuries and both have to back it. And they're like duking it out for allocation at every round. And the robot, and the future robot

• 57:37John Coogan?

  dog founder out there is like, I, I just do nothing win or, or build a great company and win. Uh, was there anything else going on with the robot dog debate?

• 57:47Jordi Hays?

  Uh, I, you know, selfishly, uh, you know, I think it's bad for the industry if you have two of our platform funds, uh, you know, just making these somewhat petty videos that are basically ad hominem, uh, that, you know, basically, um, throwing stones from glass castles, uh, as, uh, one, one could put it. Uh, so I think it's generally bad, but for entertainment purposes, if they want to keep going at it and turn this into, you know, proper Drake versus Kendrick situation. This might be a good use of a 16Z new media.

• 58:24John Coogan?

  Yeah.

• 58:24Jordi Hays?

  Although, much of the talent there is now over at a...

• 58:27John Coogan?

  I mean, I would, I would love, yeah, I would love like a, like a response video from Andreessen, shot in the same way or something like, there, there is an opportunity for like a rap battle here that's a beef, that's like very, very entertaining, that I would absolutely love.

• 58:45John Coogan?

  The flip side though is that I agree with you, like, if you're a VC, you're much better picking a villain that is something around like a lack of technological progress. Like, Teal did this very well with like stagnation is the boogeyman. Like, if we don't get the robot dog, we don't get the seeing eye dog, we don't cure cancer, we don't do the big thing, we don't, we don't visit Mars, like, that is, you can still have like a villain, but the villain needs to be something that the, the industry and America and all the constituents can, can align around instead of like picking fights where like, these two firms are obviously aligned on like 99% of like where the future goes and, and

• 59:28John Coogan?

  what the goal is of building a business that delivers a value that consumers enjoy.

• 59:32Jordi Hays?

  Yeah, it's just so funny because when you, if you look at cap tables, they're almost always probably touching, they're effectively holding hands on the cap table, right? Because like, one of them might have more, more of one company, right? Slightly higher, one of them might have more of the other, right? But in, in general, you know, they're just hanging out together.

• 59:49John Coogan?

  I mean, Cap Oil did Anduril at GC and then went over to Andreessen, so like, there's like, there's more overlap than, than, than, than differences. Plenty of, plenty of other things to take shots at, but, I mean, to Andreessen's credit, they've done a good job of that, focusing on, on geopolitical competition, focusing on China, focusing on stagnation and nimbyism, all sorts of different things that they've been aligned with like more of like an abundance view as opposed to punching down all the, you know, there's, there's memetics all over the place that happen.

• 1:00:23Jordi Hays?

  Yeah, just, it seems like GC has an opportunity to be the buttoned up

• 1:00:28John Coogan?

  Yeah.

• 1:00:28Jordi Hays?

  platform.

• 1:00:29John Coogan?

  I think so.

• 1:00:29Jordi Hays?

  Uh, you know, they don't, they don't need to say the R-word.

• 1:00:33John Coogan?

  Yeah.

• 1:00:33Jordi Hays?

  Uh, they don't, they don't need to be super loud, right? They can just focus on... The craft of investing.

• 1:00:40John Coogan?

  Yeah.

• 1:00:41Jordi Hays?

  Uh, I wrote about it in the newsletter, but you know, run some ads.

• 1:00:45John Coogan?

  Yeah.

• 1:00:45Jordi Hays?

  You know, you've been saying this forever, run some ads in the Economist.

• 1:00:48John Coogan?

  Yeah.

• 1:00:48Jordi Hays?

  Financial Times, Wall Street Journal.

• 1:00:50John Coogan?

  Yeah.

• 1:00:51Jordi Hays?

  Uh, just, there's a way to counter position yourself without attacking.

• 1:00:57John Coogan?

  Yeah.

• 1:00:58Jordi Hays?

  Your rival.

• 1:00:59John Coogan?

  Remember the last time that General Catalyst went viral?

• 1:01:03John Coogan?

  Hamant, CEO, was on Harry Stubings' show, 20VC, and he said, like, triple, triple, double, double, double is no longer good enough. Uh, we want to see 10x-ing every year because that's what's happening in the AI era. And it was a brash statement. It was bold. Uh, it sparked a debate.

• 1:01:22Jordi Hays?

  Looks.

• 1:01:22John Coogan?

  But look at the results. Like, you know, there are companies that are doing this. Like, we talk to them every day. And, and sure, he, and, and he clarified it on our show. He clarified it on other shows. He was not saying that, like, you shouldn't build a business that only triples revenue every year, or only doubles revenue every year. He was just saying that the reality of the market right now is that there are power law companies that are growing exceptionally fast, unprecedentedly fast. And so, uh, you as a venture capitalist have to adjust your benchmarks and think about how you're allocating funds, what companies you're investing in, make sure you're in the, the best company in the category that's actually going to win. It might be the company that's growing 10x a year, uh, not 2x a year. And so, uh,

• 1:02:03John Coogan?

  that was something where it was, uh, like thought leadership from Hamant. It sparked a conversation. There was some debate around it, but it was.

• 1:02:12Jordi Hays?

  And so far, that take was controversial, but entirely correct when you look at the growth of.

• 1:02:18John Coogan?

  Yeah.

• 1:02:18Jordi Hays?

  A lot of the most exciting companies in the industry right now.

• 1:02:21John Coogan?

  Totally, totally. And so, uh, that, that sort of more, more narrow, staying in the lane view, uh, it got a lot of attention. It did break through. It caused a conversation, but it still didn't sacrifice. It, it didn't feel like, oh, he's taking shots at someone specific, right? It was just like a market analysis from someone in a position to give that exact analysis. So, anyway. Jensen Huang is over in China. Jason Calacanis has a photo that looks, uh, extremely real, zero AI detected, but he's bringing two huge boxes of GeForce RTX 5090s, which are.

• 1:02:57Jordi Hays?

  This is a picture from when he was in Alaska, too.

• 1:03:01John Coogan?

  Jason says never stop selling. I agree. There is some news which we will cover later in the week around the dynamics around H100 sales and Blackwells. What's actually happening? It's all in flux as the Trump-China summit plays out on the front page of the Wall Street Journal every day this week because it is headline news. High stakes US-China summit kicks off. There was another drama in the tech world yesterday, but we'll come back to it after our next guest, Ben Hylak from Raindrop joins. I believe he's in the waiting room. So we'll let him come in. He's the co-founder and CTO. We've had him on the show before. Welcome back, Ben. How you doing?

• 1:03:44Ben Hylak?

  Doing well, man. How are you?

• 1:03:45John Coogan?

  Fantastic.

• 1:03:46Ben Hylak?

  Great to see you.

• 1:03:47John Coogan?

  What's new in your world? Reintroduce the company quickly and then tell us the news.

• 1:03:52Ben Hylak?

  Sure. Raindrop, we make observability for agents. So the main thing we do is self-healing agents. So what it means is that when your Raindrop hits a problem in production, we detect it, we fix it.

• 1:04:06John Coogan?

  How do you do it?

• 1:04:08Ben Hylak?

  That's a good question. So at the end of the day, like, we consider ourselves like the intelligence for your intelligence. What that means is that we are the best, fastest way to essentially look at anomalies. So what that means is that like, let's say you make a change, right? We're able to very, very quickly find out that like, oh, users all started complaining about something, or the trajectory, the traces are kind of starting to evolve into a different pattern. And so it's kind of a combination of agents, but also more like classic ML techniques, a lot of like custom-trained models for every customer.

• 1:04:47John Coogan?

  Walk me through the shape of the agent market right now. Like, the way you're talking about it, you know, sort of illustrates the broad diffusion of agents and custom agents. I think that a lot of people think Claude Code and Codex, and I don't know if you're doing enterprise deals with those firms, or that's the goal, but I imagine that

• 1:05:10John Coogan?

  Every startup, many legacy companies have built some sort of agent, some sort of harness. And I'd love to know the, the shape of how broadly diffusing like custom agents are in companies versus is it the domain purely of startups that create an agent for legal or an agent for sales and then they then that into a company?

• 1:05:32Ben Hylak?

  Yeah, so I would say that there's two kind of categories of customers. We started with super high growth startups at the time startups. So those are companies like Clay, for example, Framer, Speak.com, some of the fastest growing companies in the world. And those were some of our earliest customers and we're lucky they grew a ton. So, you know, that has helped our growth.

• 1:05:52Jordi Hays?

  Always helps.

• 1:05:53Ben Hylak?

  It always helps. Yeah. And someone once mentioned that like, you know, this kind of business is a lot like early stage seed investing, actually. It's kind of interesting. Like, you know, we, you have to be pretty, pretty picky not to work with companies that are going to die. Because if like, especially analytics, like all these sort of things, like they, you succeed as a company when your customers succeed. Like, if all of your customers are terrible, it's like everyone's like, well, why do I, why are your insights?

• 1:06:17Jordi Hays?

  Yeah, I had a, I had a portfolio company that was working on like agent infrastructure, like roughly two years ago and pivoted because he was like, okay, this is clearly going to be a big thing someday, but right now he's looking at all the underlying companies and he's like, I don't believe that any of these like agents in their current iteration are going to work now.

• 1:06:39Ben Hylak?

  That's right. I think it was very counterintuitive at the time, but I think we chose to, chose to find companies like Clay.com, right? Which are, were clearly on a insane trajectory, but at the time were, you know, weren't necessarily as large. And so I think a lot of our customers now are pretty large, but at the time weren't necessarily as large. And then in the last few months, we've been moving into Fortune 50s, Fortune 100s and like a lot of amazing things happening there. And again, it's kind of like two shapes of a product. Like one is like in our, our bread and butter is like, you know, companies that are redefining the way people, you know, interact, you know, in different verticals. But then, yeah, there are like Fortune 50s, Fortune 100s that are also deploying agents internally.

• 1:07:24Ben Hylak?

  I think the shape of that looks very interesting and like, it's something that, like being on the forefront of like understanding how these companies are deploying things, like there's not that much I can talk about right now, but yeah, always very interesting.

• 1:07:35Jordi Hays?

  What do you think is a generally underhyped agent category right now? I'm sure you're seeing the future a little bit.

• 1:07:45Ben Hylak?

  It's a really good question.

• 1:07:49Ben Hylak?

  I think that.

• 1:07:53Ben Hylak?

  I mean, you know, I. So this is a tough question.

• 1:08:00Ben Hylak?

  What I want to do actually is pivot the question a little bit because I want to talk about. I want to talk about our launch today, if that's okay. Okay with you guys?

• 1:08:07Jordi Hays?

  I'll tell you my questions. You tell me your answers.

• 1:08:11Ben Hylak?

  Okay, okay, sounds good. Does that mean that you want me to not answer this?

• 1:08:14Jordi Hays?

  No, no, no, no. I'm just messing around. Go for it.

• 1:08:18Ben Hylak?

  Okay, cool.

• 1:08:18John Coogan?

  The joke is.

• 1:08:19Jordi Hays?

  Yeah, I botched it.

• 1:08:20John Coogan?

  The joke is what questions do you have for my answers? And some CEOs show up and they act like that where it's like you'd ask them anything and they're just going to.

• 1:08:29Ben Hylak?

  Sorry, guys, you know what? I'm going to.

• 1:08:30John Coogan?

  We're going to redirect you to a talking point, but it's fine. I want to hear about the launch today, so just tell us about that.

• 1:08:34Ben Hylak?

  Great, let's talk about that. Okay, so guys, there's been this crazy thing that that has been missing for a very, very long time. That's why I want to talk about it. So like people have been building agents. You're building them locally, like you're using some sort of SDK. It could be OpenAI, it could be Versale, whatever SDK it is. And.

• 1:08:51John Coogan?

  What do you mean locally? Like it actually has to run on like.

• 1:08:54Ben Hylak?

  You're just on your laptop. Or right, like before you push to production.

• 1:08:57John Coogan?

  Sure, sure.

• 1:08:58Ben Hylak?

  It's on your laptop.

• 1:08:59John Coogan?

  Yeah, yeah, yeah.

• 1:08:59Ben Hylak?

  There's no way to see what it's doing, like no standard way, nothing like. So people will send those traces out to like a server like. Raindrop is like one of those, you know, and there's a bunch of others.

• 1:09:12John Coogan?

  Yeah, but they might also just like drop the logs in like a non-relational database.

• 1:09:16Ben Hylak?

  Sure, they'll just print it to, you know, console dot log like, oh, here's what was happening. It's like that bad.

• 1:09:21John Coogan?

  Yeah, yeah, yeah.

• 1:09:22Ben Hylak?

  And the other problem there is like, so you can't see like a nice trace or you're sending it to some server and it takes like seconds to see everything. I'm like, whatever, it looks terrible. But then also your coding agent can't like see the traces either. So then when you hit a problem and you're like, hey, you know, this response was wrong, Claude code will just make shit up. Like it'll just be like, oh, I think that like maybe this tool was wrong, or I think maybe like this happened because it doesn't have any of that data. It doesn't actually know what the coding agent did.

• 1:09:50John Coogan?

  Yeah.

• 1:09:50Ben Hylak?

  So I think that like, as someone building agents, it's like our company building agents were like, it is actually kind of embarrassing how long it took us to solve this problem. No one else solved it either, but,

• 1:10:01Ben Hylak?

  but yeah, that's what we launched today. Free local open source tool, raindrop.ai slash workshop. And it's completely free, like it's just open source.

• 1:10:10John Coogan?

  Why open source?

• 1:10:12Ben Hylak?

  That's a really good question. I mean, I think that genuine answer, and I think part of like why are competitors like haven't done it? I mean, there's probably other reasons for that as well, but, I think it's that it can be, right? Like, like someone else can do it. You know what I mean? Like, uh, uh, I think that it running locally is the best experience for people. And to be clear, like there's still things that it enables, you know, if you connect it to your production range, which is like you can pull in a remote trace and replay it. Uh, and then Claude Claude code or Codex can just keep doing that loop until it works. So there's still benefits for us. Um, but also the, the truth is that we want people to hack it. We want people to, to meld it into whatever works for them. So,

• 1:10:57Ben Hylak?

  I mean, we use a lot of open source things here, right? So it, it makes sense to contribute back as well.

• 1:11:04Ben Hylak?

  Yeah, that's great.

• 1:11:07John Coogan?

  Yeah, I'm, I'm wondering about other, uh, just like predictions about next breakout category of AI agents, what you're seeing.

• 1:11:18John Coogan?

  It feels like we're so close to being able to book a flight, but maybe no one wants that. I don't know.

• 1:11:22Ben Hylak?

  I mean, I'm not sure if you guys saw, I had a little bit of a thing with Brian Chesky earlier about Airbnb.

• 1:11:26John Coogan?

  Oh, yeah.

• 1:11:27Ben Hylak?

  Oh, yeah. Talk about that. Talk about that. No, um, I think like, you know, I use Airbnb a lot. I love Airbnb. Um, I think, if I had to guess, I would say Brian Chesky knows a lot more about Airbnb than I do, and probably a lot more about being a founder than I do as well. Um, and so I think there's probably a lot that I'm not considering. That being said, I think it's fresh, like, If Airbnb had an API, I would use it and I would book Airbnb through Claude Code, right? So it's like, I know I would do it. It's, I find Airbnb very, very hard to search. And I think that there's a lot of, I think the tough part and like what I see industry wide, wide right now, everyone's trying to figure out

• 1:12:08Ben Hylak?

  is

• 1:12:11Ben Hylak?

  you, you see companies almost reducing themselves into an API with like absolutely no mode. Like you look at like Photoshop, Illustrator, et cetera. They're like, oh, we have a Claude Code integration now, MCP. At the point where people are just using Photoshop, Illustrator, et cetera, as like an MCP, they've, they've sort of lost the game, right? Like if no one's actually touching the UI anymore. I think that right now, companies have to do that increasingly because they have no other choice. I think that there will be a point where the incentives don't make sense anymore. Like I can give an anecdote from, from when I was at Apple.

• 1:12:47Ben Hylak?

  You know, do you guys remember App Clips?

• 1:12:49John Coogan?

  Yeah.

• 1:12:50Jordi Hays?

  Yeah.

• 1:12:51Ben Hylak?

  You guys remember Apple?

• 1:12:51John Coogan?

  Where, where did those go? I only see them

• 1:12:53Ben Hylak?

  Where did those go?

• 1:12:54John Coogan?

  With like parking meters sometimes.

• 1:12:56Ben Hylak?

  Yeah, right? So like, one of like the hero ideas there was like, oh, you know, like imagine you're in line at Starbucks, you don't have the Starbucks app downloaded, like, well, why not just, you know, scan something, have an app to order your drink? And it's like, turns out Starbucks doesn't have that, right?

• 1:13:13John Coogan?

  Sure.

• 1:13:13Ben Hylak?

  That's the last thing in the world Starbucks wants. Starbucks wants you to download the app, they want you to have stars, they have an entire, like, there's a reason why DoorDash and Uber Eats and like whatever, you know, God knows other apps exist. It's not because they need to, but because each have companies and money and goals and like, so, so why would they reduce themselves into an easily interchangeable API? Doesn't actually make sense.

• 1:13:36Jordi Hays?

  Yeah, but, but I think it's using, I think it's important to be careful around using like a tool like Photoshop interchangeably with like a retail store like Starbucks or like a marketplace like Airbnb or DoorDash. Because I, I really think that these marketplaces provide, you know, an exceptional amount. All the value is not in the UI, right?

• 1:13:59Ben Hylak?

  I agree. I agree.

• 1:14:00Jordi Hays?

  And where, and, and like the value of Starbucks is not that it's a pretty app. It's because they have specific drinks that they can make pretty much anywhere. You know, someone would be.

• 1:14:08John Coogan?

  Yeah, I think that company buy the the drink company. They got started during the direct to consumer boom. Obviously, they would have some beautiful Shopify website. They didn't. They just went direct to retail and they had Amazon. You could order it on the online. And if you went to their website, it would just say, go to Amazon. And they were and they did fine billion dollar company. And because like the value is not in the e commerce experience. They didn't play like the the stars game. Of course, Starbucks is maybe sacrificing a piece of that business model. But it's not giving away the whole cow. I don't know.

• 1:14:41Ben Hylak?

  There are going to be ways to monetize this, right? Like, there are going to be successful business models built on top of this sort of layer. And to be honest, as Raindrop goes into the future, like, that's the future we're building towards. That's the future we want. I mean, we're going to be announcing partnership with a really large, one of like the large coding companies as soon as far as like integrating with them more where it's like. I don't see Raindrop as a company that's going to submit PRs and production to people's code bases. Like, someone else is me doing that. We're going to be the layer that's really good at finding those issues, diagnosing them and tracking them. So I just think it's going to be interesting into the future. How much companies are willing to sort of just like be the API with like, without the all those hooks, without the, you know, knowing everyone's email, like having the mailing list, like all that sort of stuff.

• 1:15:25Ben Hylak?

  So that's a very interesting trend.

• 1:15:27John Coogan?

  I feel like you're generally on the frontier and cutting edge of like adopting all these tools. You mentioned your cloud code use and I'm wondering about. Give me a reality check, a health check on your experience of computer use because you're lamenting the fact that Airbnb doesn't have an API. And I imagine you could create a scraper or download the HTML and interact with it. Like, treat the front end as the API of effectively, you know, puppeteer the computer through computer use. Like, where are you on like the AGI moment in computer use from what you've seen? Like, where does it work? Where doesn't it work? Where would you recommend people get started if they want to play around with it?

• 1:16:06Ben Hylak?

  Yeah, that's a really good question. There's other places where it works. Like, I think that Codex has done a very good job of implementing like browser use, actually, both for like debugging applications that you're working on and in general, like this is something that Claude just like doesn't do, like creates a really, again, that kind of like, I think the next couple of months, the thing you're going to keep hearing from me, but also everyone in the world is like self-healing loops, loops, loops, loops, right? Like, how do you create loops where it's, how do you close the loop? How do you have like Claude code make a UI change, see that it sucks and then just keep going, right?

• 1:16:38John Coogan?

  Yep.

• 1:16:39Ben Hylak?

  And a lot of like, do we have AGI or not, is how many loops in a row can you do?

• 1:16:44John Coogan?

  It's all loops.

• 1:16:46Ben Hylak?

  Right? Before things just end catastrophically, right?

• 1:16:48John Coogan?

  Yeah.

• 1:16:49Ben Hylak?

  Because there is sort of this like, it gets worse, right? In many cases. So, yeah, I think like, there's a lot of like, ways to answer this. Like, I'm a fairly like, security-conscious person. I think that like, the, you know, I'm not like an open-clog guy. I'm not going to give all of my like cookies to some, you know, agent, et cetera, et cetera. But yeah, I think, TBD.

• 1:17:12John Coogan?

  Yeah, cool. Well, yeah, new challenge. Book an Airbnb with an agent. Can it be done? Is that where the goalposts need to be set? Let's figure it out. Anyway, thank you so much for coming on the show.

• 1:17:23Jordi Hays?

  Great to see you, Ben. Congrats to the team.

• 1:17:25John Coogan?

  Congrats on the launch.

• 1:17:26Ben Hylak?

  Last thing, if you want a hat, you can, we have a new CLI. If you run Raindrop Drip, you can get a hat and umbrella, a couple of other things.

• 1:17:33John Coogan?

  Ooh, that's a fun, that's a fun way to give out merch. I like that. That's very creative. Thanks for coming on the show.

• 1:17:38Jordi Hays?

  Great stuff.

• 1:17:38Ben Hylak?

  We'll talk to you soon.

• 1:17:40John Coogan?

  Okay, back to the debate around Figure. We've had Brett Adcock on the show before, and he had a live stream. We talked about it a little bit. Watch a team of humanoid robots running a full eight-hour shift at human performance levels. And Brett Adcock said this is fully autonomous, running Helix 2.

• 1:18:01Jordi Hays?

  All right, pull up, pull up this post from Pete.

• 1:18:05John Coogan?

  Yes, and the stream did fantastically. It was 24 hours. It got 3.4 million views. But at a certain point during the stream...

• 1:18:15John Coogan?

  There was some questions about whether or not the humanoid robot was in fact-

• 1:18:19Jordi Hays?

  Alright, back to the beginning, back to the beginning.

• 1:18:22John Coogan?

  Okay, let's play this.

• 1:18:24Jordi Hays?

  Alright, so it's cooking. I mean, the speed is actually insane.

• 1:18:27John Coogan?

  And we were extremely impressed by this. This was remarkable, remarkable.

• 1:18:30Jordi Hays?

  Even if it's teleoperated, it's extremely impressive.

• 1:18:32John Coogan?

  Yeah, yeah, yeah. Like, the robot's clearly working. This is very, very cool.

• 1:18:35Jordi Hays?

  But they're saying that it's not teleop.

• 1:18:37John Coogan?

  Okay, so then the robot starts missing things, being a little bit like an inch off-

• 1:18:41Jordi Hays?

  Lumsy.

• 1:18:41John Coogan?

  And then reaches up and touches the robot's head, the robot, which is something that wouldn't normally be necessary. It doesn't have like a logical explanation or conclusion, so a lot of people are asking.

• 1:18:52Jordi Hays?

  Well, it does have a semi-logical conclusion, which is that Brett is claiming when it reaches across its body to go to the right, that it puts its hand up here to get the hand out of the way.

• 1:19:04John Coogan?

  That's what I was thinking, was that if the hand is halfway up, it might be blocking the sensor, the camera sensor, and so even though, like, you might- the robot might reach the hand up further to move out of the view, so then the robot can look at the next package. So that's one possible explanation, but a lot of people are asking even harder questions, saying that potentially, was there a human in the loop? Was this teleoperated, which is something Brett has said it's fully autonomous? I feel like that means no humans in the loop, but T.O.R. Taxes has an artist's

• 1:19:44John Coogan?

  representation of Helix 2, figures in-house neural network running entirely on board, and it of course is a human in a VR headset. Very, very debatable. We'll see where you stand. But there is, there is a third option, which I have shared, which is potentially no humans involved. I don't know if you'd call it autonomous, but you would call it no humans in the loop-

• 1:20:10Jordi Hays?

  In the loop.

• 1:20:11John Coogan?

  Because you have-

• 1:20:13Jordi Hays?

  Well, it is an autonomous system, right? It just sort of runs-

• 1:20:16John Coogan?

  Yeah, I would consider this autonomous. It's the image that I shared in the production chat. It's not of a human, and it's not quite robotic, but there's no human in the loop. And so this could explain it's, the system is running with no humans in the loop. If you make that claim and you follow this- I think this qualifies as no humans in the loop. If you have a giant orangutan in a VR headset, puppeteering the robot via teleoperation, you could say that this system is, does not have a human in the loop. And you could make that.

• 1:20:49Jordi Hays?

  And I could make the argument that it's autonomous.

• 1:20:51John Coogan?

  Yes.

• 1:20:51Jordi Hays?

  The chimpanzee is running its own, it has somewhat of a neural, almost like a neural network.

• 1:20:58John Coogan?

  Yes, yes. Uh, no, no, no. No one knows.

• 1:21:02Jordi Hays?

  And I'll say, I think there was a human physically inside.

• 1:21:06John Coogan?

  Ooh, physically inside.

• 1:21:09Jordi Hays?

  Yeah, I mean, the, the, the thing that I'm so, I, I want to talk with somebody at a place like Amazon.

• 1:21:17John Coogan?

  Yeah.

• 1:21:17Jordi Hays?

  Who I imagine does this kind of thing all day long.

• 1:21:20John Coogan?

  Yeah.

• 1:21:21Jordi Hays?

  And are they asking for a humanoid to do this process?

• 1:21:26John Coogan?

  Yeah.

• 1:21:27Jordi Hays?

  Like, this seems like something that, that, um, e-commerce fulfillment and logistics companies have been doing for many, many, many, many years.

• 1:21:37John Coogan?

  Yes.

• 1:21:37Jordi Hays?

  Uh, is there not a purpose-built robot that sits right there and makes sure that, uh,

• 1:21:42John Coogan?

  Yes.

• 1:21:43Jordi Hays?

  the packages are in the right orientation? Does it have to, you know?

• 1:21:47John Coogan?

  Yeah. If you watch an episode of How It's Made, you will see every variety of, uh, of custom-made machine for flipping around, sorting packages, uh, that type of activity. There are custom-built machines that run at scale. They might cost like $10,000, but they last 50 years. And anytime you see a, uh, you know, a Diet Coke factory or gum manufacturing line, all these things, like the, the gum that you have there, uh, comes off and the, the gum rattles down and is sorted into the, the pockets of the, of the, the, the, the, the packaging. And then the, the sleeve is wrapped around and glued and all of that is done autonomously, but just with, you know,

• 1:22:29John Coogan?

  uh, a bunch of machinery that was built in, probably like a hundred years ago, honestly. Uh, if it works, don't fix it. But, uh, you can clearly see, see how this type of task, package sorting would be like on the curve to a more economically valuable humanoid.

• 1:22:46John Coogan?

  humanoid robot and like if I was going to buy a humanoid robot to do my dishes and you showed me this video and it was in fact fully autonomous that would be an encouraging demo to me that would be something that I would look at and say oh well like if it can do this successfully for hours and hours and hours I'd probably trust it to put some laundry in the in the washing machine that doesn't seem well beyond the scope of capabilities

• 1:23:15Jordi Hays?

  It's so interesting how quick it is when it's just sorting packages there and then it does divide and walk on the way off

• 1:23:24Jordi Hays?

  If you rewind for a second

• 1:23:25John Coogan?

  Yeah, yeah, yeah, the walk is not

• 1:23:27Jordi Hays?

  I only use that terminology because that's the terminology that

• 1:23:30John Coogan?

  That is what Brett used, yeah.

• 1:23:32Jordi Hays?

  Like look, why does it look like

• 1:23:35John Coogan?

  If you're able to shuffle like this so fast and so fast, you'd think that you'd be able to hustle a little bit, but maybe that's V2, maybe that's less less relevant for this particular task, you know, there's a lot of different options, but we will dig into it Brett launched day two, I mean regardless, putting up views sorted 32,000 packages day two is live and he shared more details on what's going on. The original goal was an eight hour run after zero failures yesterday, we decided to keep going. We're now over 24 hours of continuous autonomous operation without failure. This is uncharted territory. The task is small package sorting.

• 1:24:14John Coogan?

  F dot zero three detects the barcode, picks up the package and reorients it barcode face down onto the conveyor. Humans average around three seconds per package. F zero three is now around human parity. The robots are reasoning directly from camera pixels. The robots are fully autonomous using Helix two, our in-house neural network, running entirely onboard F zero three. There's no tell operation. Every action comes directly from Helix zero two. Okay, well, I feel like that rules out the monkey business. I think, I think tele-operation would fall, if you had a monkey puppeteering this thing, I think it would count as tele-operation. So he is denying that allegation from the timeline.

• 1:24:59Jordi Hays?

  Yeah.

• 1:24:59John Coogan?

  But the timeline seems convinced. Youtuber commenters started naming the robot Bob, Frank, Gary yesterday, so they added name tags to each robot. And if the robot gets stuck or the AI policy goes out of distribution, Helix triggers an automatic reset. You'll occasionally see this happening during the live stream. If a robot or has a software or hardware issue, it autonomously leaves for maintenance and another robot takes over. We run our labs and figure this way to maximize uptime. If we haven't had a failure yet, we haven't had a failure yet, but statistically, we probably will at some point. So, very, very fun going back and forth. Who else is chiming in? People are, Dar says, "I'm the last person I'd expect to rush to Figure's defense, and I'm looking forward to hearing

• 1:25:41John Coogan?

  Brett's take here and in here and in any and all cases. I stand with PBD, King, but IMO, this demo seems authentically autonomous and could see this being learned behavior from tele-operators that collected the data for this model with their VR headsets." And PBD sucks, who broke the story or went viral first time, said, "He actually has a pretty reasonable sounding excuse, but doesn't give me tons of confidence on the model's brittleness. For cross-body research, for cross-body reach, the policy lifts its arm to avoid hitting the metal. Shoot. Nice try."

• 1:26:20John Coogan?

  I wasn't, I wasn't sure if he was gonna, if he was gonna reply to this and sort of engage or just sort of let the, let the timeline run wild with it. But the metal plate does seem like a piece of what's going on. But people are still hungry for tele-operation bombshells. It sort of cuts both ways. I remember Jason Carmen did a, did a video, maybe with one ax, and, and everywhere in the video, they said, "This is tele-operation. We're doing tele-operation. We're bullish on tele-operation." Put it at the bottom, in the text, in the description, like, so I told everyone, and still, people were quote tweeting it, being like, "This is tele-operation." And so, people, you know, are sort of grappling with, like, what is real, what is fake, constantly. Well, is there anything else on the Figure

• 1:27:04John Coogan?

  story that you'd like to dig through?

• 1:27:07Jordi Hays?

  Uh, no.

• 1:27:08John Coogan?

  Switches hands after working more than four hours straight. Huh. Well,

• 1:27:13Jordi Hays?

  There is some new news, a new, a newly released,

• 1:27:19Jordi Hays?

  OGE Form Office of Government Ethics 2780 discloses that President Trump filed 3,642 trades involving stocks in public companies between January 1st and March 31st. Transactions include hundreds of stocks and ETFs such as Nvidia, Microsoft, Broadcom, Amazon, Apple, Alphabet, Meta, Goldman Sachs, AMD, Airbnb, Palantir, Netflix, Costco, Walmart, JP Morgan, DoorDash, and others. Individual purchases of Nvidia, Microsoft, Broadcom, Amazon-

• 1:27:48John Coogan?

  Individual.

• 1:27:50Jordi Hays?

  So he's averaging around roughly 40 trades a day.

• 1:27:54John Coogan?

  Forty trades a day.

• 1:27:55Jordi Hays?

  Check my math there. That is in Q1.

• 1:28:02John Coogan?

  It's a lot of trading activity. We talked about this.

• 1:28:04Jordi Hays?

  Selling.

• 1:28:05John Coogan?

  Should you just give Jane Street right access to the federal government? Should they just be able to change the laws to optimize for max GDP growth? And it feels like we're one step closer, one step closer to the economic singularity of the hedge fund running the country. Anyway, we have-

• 1:28:22Jordi Hays?

  Any other-

• 1:28:24John Coogan?

  Well, yeah, what else?

• 1:28:26Jordi Hays?

  I'm trying to find the history of presidential day trading.

• 1:28:31John Coogan?

  I don't know if there is one. Jimmy Carter famously divested from his peanut farm because he was worried about conflicts of interest, but we are in a new era. Anyway, we'll have to figure out if Trump is long or short the Cerebras IPO. He's probably watching right now to hear Doug O'Laughlin's take on it to understand what's happening.

• 1:28:48Jordi Hays?

  George W. Bush.

• 1:28:49John Coogan?

  With Cerebras.

• 1:28:50Jordi Hays?

  ChatGPT says not a day trader, but had a famous controversial stock sale. He sold 200,000 Harken Energy shares in 1990 before bad news came out.

• 1:28:59John Coogan?

  Okay, interesting.

• 1:29:01Jordi Hays?

  And there's no other evidence that we're finding of presidential stock traders.

• 1:29:06John Coogan?

  Well, we'll dig into it, but we have Doug O'Laughlin from Semi Analysis in the waiting room. Doug, how are you doing? Welcome to the show.

• 1:29:12Doug O'Laughlin?

  Good, good, man. You know, pretty busy day, another day, dude. Honestly, every day is a busy day.

• 1:29:19John Coogan?

  Every day is a busy day. Take us through it. How do you think the market reacted to the Cerebras IPO, to your, to the Semi Analysis deep dive on the company? What is the overarching story here?

• 1:29:33Doug O'Laughlin?

  So I think the market was obviously positive. I don't think we're quite as positive as the market, but it's a bull market, baby. Um, I, I think the takeaway is that Cerebras got to IPO, which at one point in time, we didn't think that would happen at the semi analysis world. We're very, we've historically been very bearish on SRAM.

• 1:29:52John Coogan?

  Okay.

• 1:29:52Doug O'Laughlin?

  But I think there's a path forward for them to be a disaggregated pre-filled chip, or maybe even a AFD chip.

• 1:29:58John Coogan?

  Yeah.

• 1:29:58Doug O'Laughlin?

  Meaning attention feed for disaggregation.

• 1:30:00John Coogan?

  Okay.

• 1:30:00Doug O'Laughlin?

  So, yeah.

• 1:30:02John Coogan?

  Yeah. Uh, unpack sort of the, the competitive dynamic, like what the, the, the fear around Cerebras, as far as I, I could tell years ago, it was like, will this ever be useful? Will the, will they ever actually be able to make it? Will it have defects? Then it became certain applications, demand side, customer concentration. But where do you think they are now? Where, how has that journey evolved?

• 1:30:26Doug O'Laughlin?

  So first and foremost, Cerebras is about SRAM. SRAM is like the fastest possible memory and it's kind of done on a logic process. But the problem is SRAM scaling is dead, meaning you can't make smaller and smaller SRAM scales. So pretty much they like kind of committed to this dead end process by having the biggest scale up world as a wafer size, but then the models got much bigger than just a single wafer. And so they have really, really fast inference, but only a certain size. And I think the real capability problem is can they inference models larger than a trillion parameters? And I think the answer, as we think right now, is pretty unlikely in the near term.

• 1:31:03John Coogan?

  Yes. So I, I, so I understand all that. I, I'm just wondering about the world where should I view it more like a CPU? Because when the AI boom, the chat GPT moment happened, uh, the obvious buy was Nvidia, because we're going to need a lot of GPUs. No one was really expecting a chip, a chip shortage in CPUs. But then agents wound up using CPUs for a bunch of stuff. You have to keep the GPUs filled and so CPUs are now in demand. And I'm wondering if there's this world where there's this, yes, you're going to move past the, the trillion parameter models, but we're going to keep using them forever, just like we use relational databases forever, even in an AI, a, a, agentic AI world.

• 1:31:48Jordi Hays?

  Or you have a scenario where you have a big model that is, that is giving sort of

• 1:31:53John Coogan?

  Yeah, orders.

• 1:31:54Jordi Hays?

  Orders, workload.

• 1:31:55John Coogan?

  Delegation or something.

• 1:31:56Jordi Hays?

  Delegating to a smaller model.

• 1:31:59Doug O'Laughlin?

  Yeah, I think, I think in a perfect world where there's no silicon constraints, that might be true. But obviously, there's silicon constraints. And I think Cerebras is really well optimized for a certain problem. And we think they do a great job at answering that, which is fast inference at a certain size of model. Maybe that, that, that market's going to be large enough. And I mean, honestly, I don't think I was ever bullish Cerebras the entire time. But now that we're here, like, not ironically, 1% of a very large market works. Yeah, I think they got like 1% of a very large market. Uh, when it first started, I was like, oh yeah, what are you going to do? 1% of very large market, that's going to be a few hundred million dollars.

• 1:32:36Jordi Hays?

  And that's, and that's, that's like the classic seed, seed pitch too. You know, 10 years ago, they're, they're.

• 1:32:45John Coogan?

  Yeah, is there any, is there any, uh, uh, for a long time, there was a lot of fear around ASICs companies around architecture changes, we're going to move past the transformer and they're all going to be locked in the past. Uh, is there a, is there any optimism around, there's an architecture change that actually is to the benefit of Cerebras and makes them more relevant in the future?

• 1:33:09Doug O'Laughlin?

  Do you think that's possible? I mean, it might be outside my pay grade. That's 2 gigabrain for me, right? Where I'm at and the understanding, uh, there is a narrow path for them, I think. And I think they're going to be able to inference maybe 1 trillion framers at very small context window sizes. Or smaller window, uh, smaller, uh, models at very, very fast speeds.

• 1:33:28John Coogan?

  Yeah.

• 1:33:29Doug O'Laughlin?

  But, um, I don't know, man, maybe, I mean, like, you know, the true gigabrain take is Mythos is so good or whatever, that it makes up compute efficiency super easy. And boom, you know, yeah, your, your model is inefficient and AGI understands.

• 1:33:42John Coogan?

  Yeah, yeah, yeah, yeah. Distill yourself so you can run on a Cerebras chip just as effectively. Okay. Now we're talking gigabrain.

• 1:33:50Doug O'Laughlin?

  That's, that's the gigabrain thesis, but I think. I just think that there is, um, there's demands, right? Like clearly we're in a shortage and ironically in a shortage, it's not the best company who wins. I mean, you can look at Nvidia's stock chart and that tells you it's the second, third, fourth best companies where the demand overflows, right? And so we're seeing all of that today.

• 1:34:09John Coogan?

  Yeah.

• 1:34:09Doug O'Laughlin?

  And I think, I think the reality is the market's big enough for a lot of demand and Cerebras is in that, uh, in that space.

• 1:34:15John Coogan?

  Okay.

• 1:34:16Doug O'Laughlin?

  So they've done a really good job.

• 1:34:17John Coogan?

  Yeah.

• 1:34:17Doug O'Laughlin?

  And I mean, it's a cool engineering problem.

• 1:34:19John Coogan?

  Yeah.

• 1:34:20Doug O'Laughlin?

  But we think it's kind of a solution looking for a problem because the, the world of L L M's blew up at a much faster scale than anyone could have ever thought of.

• 1:34:28John Coogan?

  Yeah.

• 1:34:28Doug O'Laughlin?

  The size, I think is really the difference.

• 1:34:30John Coogan?

  Yeah, yeah. Uh, give me a little primer on Grok, how Grok fits into the SRAM machine market, uh, what the view is because it, it, it felt like that, that Nvidia's move there with the license acquire, as you put it, uh, was defensive against Cerebras. Is that the correct framing? Like, how does Grok fit in on this?

• 1:34:52Doug O'Laughlin?

  Okay, so let's talk about exactly where Grok, uh, fits into the architecture. So on, uh, in the transformer architecture, you have like the multi heads of attention and then there's a feed forward network. That's a portion of, um, you know, essentially the entire transformer block. And what's become really hot in the last few years, or not even two years, like probably a few months, man, is you've been disaggregating all the different parts of inferencing into subsequent specialization. So we're talking about GPUs and ASICs being a specialization over CPUs, but now we're actually starting to break the, the, the, essentially the constraints of inferencing into different, um, I guess, compute and memory bound, uh, bounds, like pockets.

• 1:35:32Doug O'Laughlin?

  And so for example, we're finding pre-fill ends up being, um, pre-fill being, uh, you know, essentially loading all the weights, ends up being compute constrained. So you don't really need a lot of memory band. So why don't you just use a very flops heavy portion and you disaggregate the memory onto the decode portion, which is like extremely memory bandwidth, uh, limited. And so this is, uh, Grok, where this fits in the strategic thought process here is in the GV200 rack. What you can do is you can pass the activations, um, Over to the SRAM in the Grok LPU rack, and that is an extreme speed up. And so it's like, that's like a perfect example of another like break apart of the transformer architecture.

• 1:36:14John Coogan?

  Yeah.

• 1:36:14Doug O'Laughlin?

  Pretty technical, but that's like the thought process here is that the memory is so fast, the memory band or the the speed of the I/O doesn't really matter and you don't need a huge scale up world size because you're just streaming the activations.

• 1:36:27John Coogan?

  Yep.

• 1:36:27Doug O'Laughlin?

  Um, that problem wouldn't work with this cerebral strip because you're kind of, it's it's an island, right? You think of it as an island of compute. It's really, really good at everything in the middle, but moving anything off the island is really hard versus moving something off the island onto a Grok chip because there's a plug at the end of it is a lot easier. And that's kind of the calculus, I guess.

• 1:36:50John Coogan?

  Yeah, so cerebrous lower memory bandwidth, lower interconnect speed.

• 1:36:55Doug O'Laughlin?

  Off the chip. Off the chip. On the chip, it's as fast as hell.

• 1:36:58John Coogan?

  Yeah, okay.

• 1:36:58Doug O'Laughlin?

  Yeah, yeah.

• 1:36:59John Coogan?

  So what so so what does that mean for the the Grok Nvidia ecosystem? Because i- is this something where the default configuration is going to be a blackwell and a Grok chip like in, you know, 50% of racks, 80% of racks? Or is this like still some sort of niche application where Grok is going to be deployed, you know, sort of sparingly sprinkled into specific use cases? Do you have an idea?

• 1:37:26Doug O'Laughlin?

  Yeah, I think I I don't have an idea with high precision. I think you'll find that a lot of these things, there's a lot of different ways to split up and serve your model.

• 1:37:35John Coogan?

  Yeah.

• 1:37:36Doug O'Laughlin?

  So expert parallelism, pipeline parallelism, tensor parallelism, right? And so, um, the correct optimization per hardware rack is going to kind of depend on the shape and architecture of the model. And we don't really know with high precision what is what. And there's been kind of like different road roadmaps along the way in terms of what what they wanted to do for speeding up inference. A perfect example of this is the CPX rack, which was mostly built for extra parallelism. It's kind of remains to be seen if this is like if the Grok GB 200 speed up is going to be like the way forward, but it's definitely a technology, uh, tree that I think Jensen is excited about. So, I mean, we'll see.

• 1:38:17John Coogan?

  What about Lisa Su at AMD? Is she excited about this technology tree? Can you give me an update on how AMD fits into all of this?

• 1:38:25Doug O'Laughlin?

  So AMD is mostly just trying to get the last thing to work, which is the rack scale up.

• 1:38:30John Coogan?

  Yep.

• 1:38:30Doug O'Laughlin?

  And I think they're going to do a good job of 450. I think what's going to happen is that like, you know, it's compute shortage, right? So you're talking about overflow demand. I think Lisa's going to figure it out. But on the inference serving side, I think there's definitely some demand or desire to probably match the Apptia roadmap. And I wouldn't be surprised to see if there's some kind of fast SRAM offload FFN chip in the, in the next 12 months. But the thing is, the, the number of candidates there is actually like pretty low. I think Intel's really, uh, Intel's going for Samba Nova, which is a little clever. There's like HBM2. There's a few other players out there too that pursued SRAM scaling. But I think that in this specific case, uh, Lisa's mostly just figure, focus on the last thing. And I think AMD is definitely good enough right now.

• 1:39:15John Coogan?

  Okay. Uh, on Intel, uh, what is the latest there? It feels like the round table has been assembled and sort of everyone has held hands and decided to maybe jump across the, the transom at the same time, take the leap of faith. Uh, but it also feels like, you know, lithography machines are majorly backlog, like there's a whole supply chain that they have to answer to that's backlogged. And so, uh, really high expectations, but also, uh, what are they, what, what is the next milestone for them after they, uh, actually get these deals with, uh, Apple and, uh, Elon Musk?

• 1:39:52Doug O'Laughlin?

  Amazon and Elon Musk, yeah.

• 1:39:54John Coogan?

  Yeah. Uh, and, uh, the, the Gigafab, sort of like, once they get those signed, like, what does the next couple of years look like?

• 1:40:01Doug O'Laughlin?

  I think it's about execution. Um, it's kind of crazy to me that I think the stock price is ahead of the technical turnaround. And I think that, um, I think Liquid Tan clearly has like righted the ship and gotten the right people onto the party, if that makes sense. And I think, I, I really do think the government Intel deal was a stroke of genius because Pat Gelsinger spent, you know, three years trying to build a bottom up demand to essentially come to the fab. And, and Trump's like, yeah, none of this, I'm going to sign the deal from the top. And what's going to happen is you're going to come play because we're the United States government or else.

• 1:40:34John Coogan?

  Yeah.

• 1:40:34Doug O'Laughlin?

  And so I think, I think people are there. I think the customers are there. I think the process is good enough. I think 14A will be also good enough, given how much of a shortage M3 at TSMC is. And it's all execution, uh, risk from here. But the historical Intel has, uh, quite a bit of execution problem. So we'll see.

• 1:40:54John Coogan?

  Okay. Before we move on to TSMC, which I want to go to next, are there any other interesting ASIC projects on the horizon? We've talked to a few of these companies, but I'm interested in like the shape of the differentiation. Like you explained a little bit of the divergence and strategies between Grok and Cerebras, but there's Etched and a bunch of other companies that are working on new chip designs. And I'm wondering if any of them stick out to you as particularly differentiated?

• 1:41:27Doug O'Laughlin?

  I'm not going to go too into the details because I feel like some of them are even like still figuring out their roadmap. I think Maddox is kind of interesting, the way that they're kind of trying to pursue the memory problem. I think Etched, I'm excited about the kind of YOLO bet, if it makes sense, just make a big systolic array. But I think there might be like niche cases. I think the problem is like, at the end of the day, Nvidia's big bus is still really good for the majority of cases. And you're going to have to like start to make really opinionated bets on the ASICs to find what niche market ends up being like a diverter of demand into their ASIC. And so the ASIC specialization

• 1:42:10Doug O'Laughlin?

  from here, I feel like you have to make some pretty big brain bets in order to make your bets come pay off. And I think most of the bets that would have guessed when you originally did them, didn't really, wouldn't have paid off. And the ones I didn't expect did, like it's kind of crazy.

• 1:42:27John Coogan?

  Yeah, it is. It is a very weird market dynamic where a couple of years ago, we saw ASIC and new chip companies, new silicon companies raising hundreds of millions of dollars or $500 million. And it was like, well, for that, you're going to need this massive market. Are you really going to flip Nvidia or something? And then the market grew so much that the 1% of a huge market sort of potentially maths out for some of these companies now. It's a fascinating development. Jordan, do you have something?

• 1:42:53Doug O'Laughlin?

  China trip.

• 1:42:54John Coogan?

  Oh, yeah.

• 1:42:55Doug O'Laughlin?

  What are you tracking? On the H100. Oh, so honestly, do you guys see the parade? You know Trump loves a parade.

• 1:43:01John Coogan?

  Oh, yeah. They're winning them over.

• 1:43:02Doug O'Laughlin?

  That was a good parade.

• 1:43:03John Coogan?

  Good parade.

• 1:43:03Doug O'Laughlin?

  I was like, dude, I was thinking, man, I'm not much of a parade guy. But I was like, dude, if they showed up and that parade was for me, I'll be like, these guys could be friends.

• 1:43:13John Coogan?

  Yeah.

• 1:43:13Doug O'Laughlin?

  Um, my, my impression is that, uh, the executive, uh, the executive branch really wants a deal. And I think, uh, you know, you saw the H200 list, the verified H200 list. I expect probably more lightning up on the executive branch. Something that's really interesting is if you look on the legislative branch, there's actually more expert control bills going through the house than like ever in history time. So there's kind of this tension, but I do think, um, you know, Trump's a businessman. He loves to deal. I expect, I expect a deal, so.

• 1:43:43John Coogan?

  Yeah, um, somewhat related, uh, TSMC, uh, Ben Thompson was writing that potentially, uh, they weren't ramping capex fast enough. Uh, what do you, what are you tracking on TSMC being a potential bottleneck for the AI build out? Just, uh, as more and more Cerebras is now trying to get allocation. It feels like a particularly, uh, sharp elbowed place to do business.

• 1:44:09Doug O'Laughlin?

  Yeah. So I think at the end of the day, TSMC is kind of a kingmaker in terms of supply. And there's no reason for them to really let the market go out over its skis. And I think they're happy with the pace of what they're, they're expanding out. Cause like, hey, they're growing their capex like whatever 40%, but in absolute dollars, these are big numbers.

• 1:44:28John Coogan?

  Yeah.

• 1:44:28Doug O'Laughlin?

  Um, we're going to run out of TSMC engineers in the island of Taiwan pretty, pretty soon here. So I think, um, I think this is all kind of good on the margin for overflow demand, which is actually it's intel. Uh, intel's, you know, definitely reflecting some of that, but I think the shortages specifically at TSMC is driven by clean room. It's a long lead time item. It takes three to five years, or let's just say three years to bring a, a clean room up. And so in order for them to have like figured out and like perfectly matched demand, two years ago, they would have to been like, we have a 10,000 square foot house and we need to buy a 50,000 square foot house with conviction.

• 1:45:05John Coogan?

  Yeah.

• 1:45:06Doug O'Laughlin?

  Right? It wasn't that clear two years ago. And so I'm going to expect supply to kind of lag, um, over and over and over. But demand signals will continue to essentially command premiums, move up wafer pricing, move up orders. And that's what's going to make TSMC invest more next year and the year after. But they're going to do it in a like. In a incremental, not a revolutionary way, but like an evolutionary way. They are very like methodical in new steps when it is not.

• 1:45:32John Coogan?

  Okay, clean room fungibility. When you say it takes five years to build a clean room, I immediately go to SpaceX. I imagine that Elon can build big things quickly. Is there some world where that partnership accelerates Intel regardless of your timeline for the mass driver fab on the moon, all the crazy long-term stuff, but just having Elon around the table to say, oh, we need to build something big and it needs to be, you know, capable of of operating as a fab. Like, is there something where he brings more to the table than just dollars potentially?

• 1:46:07Doug O'Laughlin?

  So I definitely think Elon is the man to do it. I forgot who said this, but like Elon makes the impossible late. I don't expect it to be on time. You know, talking with a cigar in the terra cab, I really, I'm really kind of doubtful. It's, you know, I guess from first principles, it's easier to just clean the entire room than to make like really hyper concentrated pockets. And that's what I would guess the bet is. But I still think by the time Elon figures it out, the supply response will have reacted already. We're still two, three years out and there is some cleaner fungibility, but and you've already seen this, actually. Micron bought an old power fab. I think this is the P S and C deal. People are buying display fabs. Essentially, every bit of clean room that is not accounted

• 1:46:51Doug O'Laughlin?

  for in the world is being snatched up and retrofitted to kind of meet the supply demands.

• 1:46:57John Coogan?

  Interesting. Yeah, I mean, that's happening all over. Didn't Ford just announce some sort of AI play today? Stocks up on something. It's all over the place. I am interested in in terms of like

• 1:47:09Jordi Hays?

  Six percent.

• 1:47:09John Coogan?

  Getting, getting powered shells.

• 1:47:11Jordi Hays?

  Ford is worth more than Figure now because last year, around a year ago, I remember Figure

• 1:47:17John Coogan?

  Robotics.

• 1:47:18Jordi Hays?

  Was worth more than the Ford Motor Company.

• 1:47:21John Coogan?

  But now they're both AI companies, I guess. But what are you tracking on the American data center build out domestically or terrestrially before we move on to space capabilities? Yeah, basically.

• 1:47:36Jordi Hays?

  Oh, go for it.

• 1:47:37John Coogan?

  No, no, just I'm just curious about, I mean, we're starting to see glimmers of pushback at the municipal level, different data center bans, and I'm wondering about what are the big levers that are that need to get pulled to actually continue to bring capacity online in America?

• 1:47:59Doug O'Laughlin?

  Yeah, I think that's a good question, and you're already seeing the first level of this is the delays. My favorite clickbait is 50% of all data centers in America are delayed or canceled, implying 50% is canceled, when it's really just everything is delayed. That's like my favorite clickbait. I gotta steal that in the future. But I think that I think it's gonna be local municipal, and people have to really believe and demand and desire the jobs. And I think one of the ways that we're seeing this is like, you know, capitalism works, and effectively, the dollar per megawatt has been going up. It's like a one-way train. In the same way that like, you know, the power per rack has been going up, the cost of making these data centers have gone up.

• 1:48:43Doug O'Laughlin?

  And one of the ways that happens is it leaks into labor, right? So essentially, you're super against it, but all of a sudden, it offers 3,000 new jobs to your home, and you're like, well, maybe I'll take it. And I think that with enough economics, oftentimes, you know, money finds a way, and that's kind of that's kind of how I would guess, but it's gonna be like, it is a it is like a county by county fight, right? And some places are just gonna say, hell, no.

• 1:49:08John Coogan?

  Yeah, on that note, we were debating this earlier today. There's been a couple of examples in like viral photos and articles about like, they I bought a beautiful house in the countryside, and then they built a data center right next to it. And, you know, no matter how pro AI you are, it sounds annoying to have a huge building that's an eyesore and maybe noisy, maybe smoky next to you. But have you been tracking like, how feasible is it just to throw the data center like truly in the middle of nowhere? It feels like America has a lot of land, but what goes into selecting data sites, data center sites these days? Do you have something else?

• 1:49:41Doug O'Laughlin?

  Sure.

• 1:49:43Doug O'Laughlin?

  Yeah, so I think pretty much two fiber pairs is the big, the big desire.

• 1:49:49John Coogan?

  Got it.

• 1:49:49Doug O'Laughlin?

  Essentially, it's like you're, you're, you're more than willing to go to where the power is because you have to go to what the biggest actual bottleneck is. And power is the biggest bottleneck. So you can just, in the past, you're talking about like, hey, having these inference or rather like, let's say, point of presence near local cities, right? But power was never a constraint in that world. It was just, you know, the biggest constraint was getting this video from TikTok to your phone as soon as possible. If the biggest constraint and the largest part of the cost is going to be power, why not move the data center to power and then, then like, you know, essentially hook it up with fiber?

• 1:50:21John Coogan?

  Yeah.

• 1:50:21Doug O'Laughlin?

  And so I think that we're going to put them in the middle of nowhere. That's just how it's going to work. To a certain extent, there's going to be more densification in some of the inference near the population, but I still think the ROI makes the most sense to kick out in the middle of nowhere.

• 1:50:34John Coogan?

  Yeah.

• 1:50:35Jordi Hays?

  Uh, has the political backlash, pushback, updated your thinking at all around the viability of space data centers? I remember, you know, we talked as this idea has like gained popularity, you guys have like consistently said, um, yeah, technically you can do that, but like, maybe it, it won't be viable.

• 1:50:56John Coogan?

  Takes a long time for the

• 1:50:57Jordi Hays?

  There are space data center players now that are kind of loving the pushback against terrestrial data centers because they're like, the more pushback there is, the more it could make sense for us to put this, put these up in space. But what's your view?

• 1:51:13Doug O'Laughlin?

  I still think economics is going to win out. You know, something a pound on earth is probably 10, 10 times more expensive in space. And it's really hard for us to go to like, essentially beat that out with a new completely specialized supply chain for what's going to be a smaller market in the near term. It's a real adversary against the adoption in, in like, let's say, the short run. In the very long run, because I'm sure you saw the anthropic colossus thing where it's like, also interested in space, right? Like, the biggest maxi vision of this is like AGI, we have, you know, 30 ter, you know, we have a thousand terawatts of GPUs on earth and we're like, we gotta put a terawatt in space, right?

• 1:51:54Doug O'Laughlin?

  So like, in that world, I think space, space data centers work where a small percentage actually ends up being so big.

• 1:52:01John Coogan?

  It's 1% of the market again. It's just like, uh, 1% and it's trillion dollar, it's trillion dollar business.

• 1:52:07Jordi Hays?

  Vindicated.

• 1:52:09Doug O'Laughlin?

  Yeah, yeah, VCs are vindicated once again. TAM, pitch deck slides vindicate.

• 1:52:13John Coogan?

  Yep, yep, yep.

• 1:52:14Doug O'Laughlin?

  Yeah, it's, it's literally as big as a galaxy, bro. Just, there's no end to it, actually. Think about how big the TAM is.

• 1:52:20John Coogan?

  Yeah.

• 1:52:22Doug O'Laughlin?

  So, I think what is more likely is if it continues to be painful to do it from a zoning perspective in America, we, it will essentially slip into other geographies, probably in the Western Hemisphere. There's a lot of power in space in Brazil, and I think that that's probably good enough. Right? There's definitely ways to make this work. I definitely think the only way you do it is by paying more and finding someone who's like, you know what, I'll hit the bit. And so that's the important part. But, you know.

• 1:52:51John Coogan?

  Yeah.

• 1:52:52Doug O'Laughlin?

  It's a plan's away.

• 1:52:52John Coogan?

  Is that, is that sort of the, the bull case for sovereign AI initiatives? I was always super skeptical because like, Europe didn't get like, France's Google. Like, they just use Google. And, and for a lot of consumer aggregator type consumer internet companies, it's like, Spotify's from Sweden, but it could be from America and it wouldn't matter. YouTube is from America and they use that over there. And you didn't need a, like a national champion in every consumer category or, or there were certainly like returns to scale and a lot of the American companies just won. But, so I never really bought the whole idea that like, oh, the French need like a locally trained LLM and the Germans also need a locally fine tuned something or other.

• 1:53:37John Coogan?

  But if every company, if every country has some sort of, you know, excess supply of energy or space or regulatory capacity for data centers, sort of bringing that online and just operating like a NeoCloud could just be economically valuable for that country, regardless of whether or not they're vertically integrated to the point of the consumer or the, or the business that's running an AI agent.

• 1:54:05Doug O'Laughlin?

  I think that's probably the case where at the end of the day, economics is gonna like kind of push it through. And there is FOMO and Europe did do a lot of investment in the in the internet like really late. And if we're gonna use nineteen ninety nine as example. I think the thing I keep thinking about is that this AI thing is gonna be a big deal. I continuously am shocked and surprised by the magnitude and scale.

• 1:54:34John Coogan?

  I don't think it is right now. I I I feel like we are in a particular moment where

• 1:54:38Jordi Hays?

  No, there's just the

• 1:54:39John Coogan?

  People calling the top in the bubbles like they're awfully quiet right now.

• 1:54:42Jordi Hays?

  And that's makes me even more scared.

• 1:54:44Doug O'Laughlin?

  That that is all he's supposed to be clear.

• 1:54:46John Coogan?

  Yeah.

• 1:54:47Doug O'Laughlin?

  You know, the the true top, there's no, everyone's bullish, right? Everyone's like, dude, it's actually gonna be bigger next year. It's actually just gonna be a bigger bubble, so shut up. So

• 1:54:55Jordi Hays?

  Yeah, I was not concerned about. I was not concerned about a bubble when everyone was saying.

• 1:55:02John Coogan?

  It's a bubble. Yeah, exactly.

• 1:55:05Doug O'Laughlin?

  I am. I mean, I'm I'm a little concerned it's a bubble, but at this point in time, I think. If you look at the big, I've been I've been reading

• 1:55:13Jordi Hays?

  Honestly, here's my view. Here's my view.

• 1:55:16John Coogan?

  Please.

• 1:55:16Jordi Hays?

  It's not a bubble until you guys are spending one hundred and twenty percent of revenue on tokens.

• 1:55:21Doug O'Laughlin?

  Yeah, our gross margin goes negative.

• 1:55:23John Coogan?

  Yeah, you're just like, we're raising a major fuss. We're not gonna be investing in it. We're gonna be burning it.

• 1:55:29Jordi Hays?

  It's actually not a bubble until semi-analysis goes public and trades up six hundred percent.

• 1:55:34John Coogan?

  There we go. I like that.

• 1:55:36Doug O'Laughlin?

  That's the that's the real top. No, I think there's a few things that have to happen. I think OpenAI or Anthropic, someone has to go public and it's gonna be this year like we have like we have to hit that keystone before um before it's all over. But I I also I also think I keep thinking about this is like, dude, this is a big. A big technological revolution.

• 1:55:58John Coogan?

  Yeah.

• 1:55:58Doug O'Laughlin?

  I think it's bigger than the internet and I firmly believe this. I don't think I believed it'd be bigger than the internet when I, maybe even two years ago. But I'm pretty convinced this can be bigger than the internet.

• 1:56:07John Coogan?

  Yeah.

• 1:56:08Doug O'Laughlin?

  And if you look at the past, these big technological changes are often sometimes bigger than, I don't know, everything else. It reshapes the entire world.

• 1:56:16John Coogan?

  Yeah.

• 1:56:17Doug O'Laughlin?

  For example, on the sovereign AI thing, maybe you're like, yeah, you don't need to fine tune LLM. But what happens when AI becomes such an important fundamental, like, almost like society level institution that like a government can't control it? That becomes really like uncomfortable and weird. Where it's like, hey, Anthropic can just, you know, put 5% of the compute of Mythos and, you know, run a really effective, effective government, uh, you know, whenever you want it. And you're like, whoa, what does that mean for us?

• 1:56:44John Coogan?

  Yeah.

• 1:56:44Doug O'Laughlin?

  Um, and so this, this wave is so big that I think people are going to, out of fear and concern that they're going to be left behind and that the institutions that, that AI will bring is going to be bigger than like the original thing that we're doing. I think that that's like the problem, right? Like, it is a revolution, change everything.

• 1:57:05John Coogan?

  Yeah.

• 1:57:05Jordi Hays?

  The other thing that we, we were joking about in, uh, like Q4 of last year is like, John was like, great, like the bubble pops, like, uh, like the bubble inflated and then it popped. But then we got agents and then you have this sort of like re-acceleration of every metric across the board. And so the other thing that we're like, we're trying to comp the AI boom to the internet. But the problem with the internet boom is that we didn't have the internet. So everything just took like, or the internet was coming online and people were getting access to it. And so the entire build out and all the capabilities and all the companies took a lot longer to sort of grow, right? And now you have that core infrastructure. And so when you're layering on more infrastructure that accelerates all the underlying trends.

• 1:57:47John Coogan?

  Yeah, yeah. I mean, the labs, the lab revenue multiples are like an, uh, an order of magnitude or two off of dot com peak multiples. And, and, and in the public markets, uh, Google, Amazon, Apple, all the hyperscalers, uh, are at like, pretty reasonable, uh, price to earnings multiple still, even with all the capex and stuff. And so, uh,

• 1:58:09Doug O'Laughlin?

  The pushback would be it's on free cash flow that can make earnings look good instead of free cash flow. But like, I think the revenue continues to be real, the demand continues to be real. And until you just like see demand evaporate, like,

• 1:58:20John Coogan?

  Yeah.

• 1:58:21Doug O'Laughlin?

  It's hard for me, it's hard for me to sit here and be like, GP prices are up a ton. Claude code is really valuable to me. I still think I'm an early adopter. And you know, this is all gonna end tomorrow. I envision myself using it every single day more for the rest of my life, which is kind of crazy. And I think I'm a really adopter. And so I just think it's hard for me to envision this not being a ginormous deal. And it's kind of like, we just got the, like, I really, I wrote this whole thing like Engels pause or whatever, like, it's gonna change everything. Like, the, the amount of net output that's gonna increase is going to just blow our minds. Um, it might be bad for GDP ironically, because GDP will be unmeasured.

• 1:59:03Doug O'Laughlin?

  Like, we're gonna, like, GDP might be broken as a concept. GDP got invented in the 1930s to measure how much output you could make, um, to not screw over the domestic economy for World War II. Like, it was, it was a way to essentially organize the, the, uh, the American economy. And it's a statistic, it's an estimate. Like, I think all of, I think we're gonna like attack in like a lot of institutions and ways that we're doing things and ways we measure are gonna be attacked by this because it's like such a big change. We have to rewrite the playbook over again.

• 1:59:32Jordi Hays?

  And people, and it's, and it's funny, I think, uh, wasn't Ben Thompson was talking about this in a recent interview of like, people are comping this like, okay, Silicon Valley like, you know, brought crypto online and then, uh, it, it wasn't maybe as big as some people had, had pitched it to be, even though it's been

• 1:59:50John Coogan?

  Yeah, self-driving cars

• 1:59:51Jordi Hays?

  Super powerful. Uh, and then, and then even the way you're talking, you're like, uh, you know, we're, we're still early, you know, which is like a classic, uh, crypto

• 2:00:00John Coogan?

  But the problem is if you are early, you have nothing to say.

• 2:00:02Jordi Hays?

  You know, and crypto is like, well, like, a community could have a DAO and that DAO

• 2:00:06John Coogan?

  Yeah.

• 2:00:07Jordi Hays?

  could be worth a billion do- that community could be worth a billion dollars, but there's just no way to measure that. But now we have tokens and you're saying GDP. Um, but anyways, I'm trying to like unlearn, I think, some lessons from that cycle because there are a number of things that are quite different.

• 2:00:26John Coogan?

  It's also

• 2:00:26Jordi Hays?

  What about, what about, um?

• 2:00:28John Coogan?

  The reflexivity that, that people do have a little bit of an immune system to, uh, just running away with everything because you, you, you could, you, you could believe this and then bid, you know, Nvidia to 10,000 times earnings or something and like, at, at certain point, you have to start grappling with the reality.

• 2:00:44Jordi Hays?

  What about, uh, robotics? Has Figure had a major breakthrough?

• 2:00:51Doug O'Laughlin?

  I mean, I, one, I have not been following the feed as close as I should be. I just think robotics feels a little further out than the hype would let you believe. I feel like robotics is much more akin to the driving car paradigm where it's like, oh yeah, it's definitely gonna come and automate everyone's jobs. And then it takes a lot longer and it's a lot like, unsexier. I think the scary or positive thing about AI is since it's information work and it's already been distributed and it has the perfect network to run on, which is the internet, it can disperse very quickly and that's what we're seeing right now. And so, yeah, I, I'm just not anywhere near as bullish robotics as I am.

• 2:01:35John Coogan?

  Yeah.

• 2:01:36Doug O'Laughlin?

  The fundamental.

• 2:01:37John Coogan?

  Well, I'm bullish on the next semi-analysis. I don't know, what are ClusterMax and InferenceMax? What are those called? Dashboards or analyses or rankings?

• 2:01:48Doug O'Laughlin?

  Dashboards, dashboards now. We, everything's a dashboard.

• 2:01:51John Coogan?

  Everything's a dashboard. Well, you need to make a new dashboard. GTP, gross token production. This is what we're measuring now. This will be output of the United States, gross token production, GTP.

• 2:02:05Doug O'Laughlin?

  We need to, I mean, I think more on this soon, actually. This is like a place for doing some research on. But I think, you know, the real, the real bubble metric is if we're like, you know, how many tokens? What's the token?

• 2:02:15John Coogan?

  Yes, yes.

• 2:02:16Doug O'Laughlin?

  What's the token replacement cost? That, that'd be some really good bubble math. Where it's like, yeah, yeah, a software company has a really low token replacement cost per market cap, but like a harbor company has an extremely high token replacement costs. And then it's like, oh, no, no, it's just enterprise value divided by token replacement cost.

• 2:02:35John Coogan?

  Well, the real, the real bubble one will be to go to the full Mary Meeker, like eyeballs metric, eyeballs multiples.

• 2:02:40Doug O'Laughlin?

  Yes.

• 2:02:41John Coogan?

  So you will value companies purely on token consumption. You'll say, oh, well, they're consuming 10 trillion tokens, so they must be worth a billion dollars. And then you'll get really weird gyrations.

• 2:02:51Doug O'Laughlin?

  That'd be great for semi-analysis. That'd be really good for semi-analysis. We are, we are consuming a lot of tokens.

• 2:02:56John Coogan?

  Well.

• 2:02:57Jordi Hays?

  Quick question. Would you guys ever make a sort of political style attack ad against another research firm for having AI psychosis?

• 2:03:09John Coogan?

  Is that a reference to the

• 2:03:10Jordi Hays?

  Yeah, sorry. It's a reference to a general catalyst attacking

• 2:03:15John Coogan?

  Andreessen.

• 2:03:17Doug O'Laughlin?

  Andreessen. Um, you know, life's

• 2:03:20John Coogan?

  You don't have to. I actually think semi analysis is just peerless. I, I, I don't think there's like a neck and neck with someone else. It's just you guys.

• 2:03:28Doug O'Laughlin?

  I was not. I, I was gonna say, I don't really know who our competitors are. Um, I don't, you know, I don't really think about it. Mark Andreessen or our, or, you know, other, another research firm like that. Maybe one day, maybe we will go through AI psychosis.

• 2:03:39Jordi Hays?

  Honestly, you guys need a rival. You guys need a, you guys need a, you guys need a arch nemesis. You need an op.

• 2:03:44John Coogan?

  Moody's.

• 2:03:45Doug O'Laughlin?

  I guess it'd be Gartner. If I had to say they're like, but it's not a good op.

• 2:03:50John Coogan?

  You need, you need a semi analysis hype cycle and it's up only. No, no trap of disillusionment.

• 2:03:57Jordi Hays?

  Straight line.

• 2:03:57John Coogan?

  Straight line.

• 2:03:59Doug O'Laughlin?

  No access and it's actually going backwards.

• 2:04:01John Coogan?

  It's a straight line on a log graph. That's what it is. Semi analysis hype cycle. I love it. Uh, Gartner doesn't stand a chance, but thank you so much for coming on the show. This is fantastic. Always.

• 2:04:11Jordi Hays?

  Full analysis.

• 2:04:12John Coogan?

  Full analysis. Yeah. No more semi analysis.

• 2:04:16Doug O'Laughlin?

  Those guys would kick your ass. If they had full analysis, they'll kick your ass. It's so over, man. So anyways, take care, guys.

• 2:04:23John Coogan?

  Have a great day. We'll talk to you soon. Bye. Um, next we have Andrew Feldman from Cerebras joining in 20 minutes. We'll go back to the timeline because the OpenAI Elon Musk trial is in its final day. The trial is ending. People expected four weeks of trial. We only got three. They're cutting it short. Uh, what are the prediction markets saying about who's gonna win? I want to know that. And I want to go to Mike Isaac, the Rat King, because he has a breakdown of what's going on. He says, good morning. Closing arguments of Musk versus OpenAI with special guest, Microsoft are happening today, Thursday, May 14th. Uh, again, Mike Isaac, of course, he kicks it off with what his lunch is. He's got an epic bar. He's got the bison snacks. He's got a La Colombe

• 2:05:08John Coogan?

  uh, latte. He's got a couple of other good things. He looks like he's prepared. He's got a bunch of snacks. I feel like he's in a better position today. Learned his lesson. Three weeks of compounded gains.

• 2:05:18Jordi Hays?

  Self improvement.

• 2:05:19John Coogan?

  I think that's what's going on here.

• 2:05:21Jordi Hays?

  So the call sheet, well Elon won his case against OpenAI, it peaked at a 58% chance.

• 2:05:28John Coogan?

  Okay, where is it now?

• 2:05:29Jordi Hays?

  28, it's now sitting at 30% chance.

• 2:05:31John Coogan?

  30% chance, okay. So right now, the judge is instructing the jury on the criteria by which they should be judging the outcome of the case. Important, because if the jury listens and carries this out, it is a very, very specific lens through which they view all the evidence. Sensibly, it's where theater ends. Listening to this and being read out in court for the last 23, 30 minutes is very helpful, because it's clarifying on how high the bar is for the plaintiff's side approving some of these claims. Sort of feel bad for the AV guy during this trial. There's been feedback. The mic drops, but not in the good way. The mics have been dropping out. Vunky video feeds. They need to revamp this place, says Mike Isaac. LMAO, the first joke of the tweet storm. He says Musk's counsel is going after OpenAI

• 2:06:15John Coogan?

  execs Altman and Brockman, and has the mugshot-style photo of Altman on the screen again. Battle of photo shops of executives in this trial has been entertaining to watch. You want to depict your opponent in the worst possible light. Musk counsel going back and forth, hammering the point they made over and over, the argument essentially painting a picture. Sam Altman, liar. Chipping away at witness credibility has been a core strategy for the plaintiff's side, and we're back to everyone hates Google again. Molo is using Larry Page, who they claim doesn't care about humanity, as a foil to the noble Musk, who only, whose only care with respect to AI is the future of humanity. Musk counsel is painting the don't trust Sam picture in a bit more detail for the jury. Also Musk's side has a picture

• 2:07:00John Coogan?

  of Elon and Altman on the screen now. Sam's looks like he's about to be processed by a US marshal. Musk's looks like he's getting ready for the Met Gala, lol. Lots of Musk's closing side arguments, semi-populist track of pointing at OpenAI and saying these billionaires are making gobs of cash while running a charity for the supposed good of the world. I'm curious if jury can register this argument, even if it comes from Elon Musk, the world's richest man. Ouch, OpenAI counsel begins closing argument with a broadside against Musk. Even the people who work for him, even the mother of his children can't back his Story. Oh, yeah. Back to the war of the photo shops. Closing remarks now in in the digital displays and the monitors for exhibits. All the OpenAI executives look like Olan Mills photo shoots. Do you know who Olan is? He says it's complimentary.

• 2:07:45John Coogan?

  I need to get up to speed on my photographers.

• 2:07:48Jordi Hays?

  Olan Mills is a portrait, offers portrait photography.

• 2:07:53John Coogan?

  Oh, does look very nice if you pull up the Google Images on Olan Mills. Uh, anyway, short summary of the closing. Musk camp, all these OpenAI executives are rich as hell and lying all the time. OpenAI camp, all of that is a sideshow and literally all the claims Musk is bringing cannot be stood up by actual law. Uh, the Microsoft camp disappears into bushes. Dota got mentioned again. They love mentioning Defense of the Ancients. Uh, incredible Photoshop from the OpenAI camp of a calendar of events, complete with little characters and a timeline of events. I wonder if they're using ImageGen 2 or if they're doing it the old fashioned way. I can't wait until it's entered into evidence this afternoon, so he can show us. Uh, sort of want to buy this meme guitar, but I also have two telecast. Is that just completely side note?

• 2:08:38John Coogan?

  Uh, gamer has entered de blog. The Dota moment has been mentioned nearly every single day during this three week trial. AI researcher, we gotta have Mike back on the show. It's so good. Uh, saw as a true breakthrough in the technology. Uh, I, so Mike Isaac says I played Dota in the past.

• 2:08:55Jordi Hays?

  What is the timeline for the jury to meet?

• 2:08:58John Coogan?

  Okay.

• 2:08:58Jordi Hays?

  Uh, is this, uh, something they're doing today?

• 2:09:01John Coogan?

  They're getting a 30 minute recess. Most they've had in a month. I might actually be able to go outside and get real food. There's a Popeyes across the street. Is it a bad idea to get a bucket of red beans and rice? That's what he's thinking about doing. Uh, so not much news on when this will close. It is 1:10 Pacific time. I imagine that, uh, they will wrap up by, what did he say? 3:00 PM, 4:00 PM? So 30 minute break. That happened 40 minutes ago. Um, so I imagine that.

• 2:09:29Jordi Hays?

  And but they've been taking Fridays off is kind of what I'm getting at.

• 2:09:32John Coogan?

  Oh, yeah.

• 2:09:33Jordi Hays?

  Because this could.

• 2:09:34John Coogan?

  So maybe this happens to Monday. This is just closing arguments, not necessarily the end of the trial.

• 2:09:40Jordi Hays?

  Or the jury.

• 2:09:40John Coogan?

  Get the results.

• 2:09:41Jordi Hays?

  Or the jury might, might make a quick call, but.

• 2:09:44John Coogan?

  Well, there was an update.

• 2:09:46Jordi Hays?

  Unlikely.

• 2:09:46John Coogan?

  11 minutes ago, a lawyer for OpenAI on Thursday defended the company's chief executive, Sam Altman, from withering character attacks by Elon Musk's legal team, as both sides delivered their closing arguments in a trial with potentially seismic implications.

• 2:09:59John Coogan?

  The stakes are high. Mr. Musk, who was not in the courtroom on Thursday because he was in China with President Trump, is asking for more than $150 billion in damages. He is also asking the court to remove Mr. Altman from the startup's board and to stop a shift the company made last year to operate as a for-profit company. They pushed back. Sarah Eddy, member of OpenAI legal team, tried in her closing argument to dull the attacks on Altman's credibility and to argue that there was never a firm agreement among the founders that could have been breached. Not one in this case, other than Elon Musk, has testified to any commitments or promises that Sam Altman or Greg Brockman or OpenAI made to Musk or Musk, is what she's saying. And there is a new update that just dropped in. After the recess, William Savitt, OpenAI's

• 2:10:44John Coogan?

  lead counsel, told the jury that Musk does not have a claim against the startup unless there was a specific agreement between Musk and OpenAI describing how his donations to the nonprofit should be spent. That agreement does not exist, Savitt said. So that's where, I guess, OpenAI is leaving it for now. We will continue to cover the story.

• 2:11:04Jordi Hays?

  Doug says, is the jury allowed to use Codex slash Gold? One and a half hours.

• 2:11:11John Coogan?

  There's other tech problems going on. Max Zeff over at Wired has been covering the story as well and says Musk's lawyer brought a big monitor, maybe 36 inches into the courtroom. OpenAI's lawyers asked to use it. Musk's lawyer said no. The judge told Musk's lawyers that they have to let OpenAI use it. Then OpenAI said it might not be possible to connect their laptops to it. AGI is here, but we'll still need a dongle, I suppose. A dongle has entered the courtroom exhibits. There's about 15 lawyers standing in the middle of the room right now, talking how to use, talking about how to use this big monitor. This is wild. They should have talked to OpenAI about sharing their monitor. What I always do, I always tell you when

• 2:11:56John Coogan?

  you come in here, talk to the other side. We don't have the technology available right now, so we don't want to use the TV. We think we should just get rid of it, says the OpenAI lawyer. Sam Altman just walked into the room, by the way, so that happened four hours ago. One of Musk's lawyers carried the big monitor out of the room, upside down, wire dragging behind him, defeated, defeated lion retreats. That is a very, very funny story.

• 2:12:18Jordi Hays?

  In other news, Tim Draper says, I think I broke a record. I took 52 pitches in 52 minutes at below 40 degrees. Welcome to my office. #DraperUniversity, #SurvivalTraining. What do we think about going in the ice tank?

• 2:12:38John Coogan?

  How cold are ice baths typically? You've done ice baths. I feel like I did one, and it wasn't as insanely difficult as people said, but then I checked the temperature, and I don't think it was 40. I think it was closer to 50.

• 2:12:53Jordi Hays?

  Yeah, you can totally get closer to...

• 2:12:57John Coogan?

  Because there's a couple companies that sell it.

• 2:12:58Jordi Hays?

  Personally, when, if you're going surfing, and the water is below 45 degrees, it can just be very painful, like to, even in a wet suit.

• 2:13:07John Coogan?

  Okay, your fingers going down.

• 2:13:09Jordi Hays?

  Anywhere that's not covered. A lot of people are putting gloves on, booty.

• 2:13:13John Coogan?

  What do you think, Tyler?

• 2:13:13Speaker 04

  So apparently Joe Rogan's at like 34.

• 2:13:16John Coogan?

  34?

• 2:13:17Speaker 04

  Yeah.

• 2:13:17John Coogan?

  Wow!

• 2:13:18Speaker 04

  So that's like the cold plunge, you know?

• 2:13:23John Coogan?

  He's the final boss.

• 2:13:25Jordi Hays?

  Yeah, this is just a crazy picture. I did think it was, I did think it was AI, but, but turns out it's real. It's just funny because it looks like, like what is this set? What is this setup?

• 2:13:38John Coogan?

  Yeah, what are all the trash bags there? And the wall is like sort of crap in.

• 2:13:43Jordi Hays?

  It looks like, kind of like a prison ice bath.

• 2:13:46John Coogan?

  Yeah, this is not what you'd expect from, I mean, isn't he a billionaire investor? You'd expect some sort of palatial, you know, you see the, the, the, the, the properties that Mark Zuckerberg is acquiring, that big investors are acquiring, you would expect something that would be, uh, much more regal. Uh, but he's doing it the old fashioned way, whipped this up himself, bought some track bags

• 2:14:09John Coogan?

  and took some pitches. Uh, yeah. And you know, who knows, maybe the next, uh, the next founder of Cursor, Figma, Ramp is

• 2:14:17Jordi Hays?

  Yeah, also 52 pitches in 52 minutes is crazy.

• 2:14:21John Coogan?

  A minute is, is crazy fast for a pitch. I mean, we do 10 minute interviews, 15 minute interviews, barely get to the meat of the

• 2:14:28Jordi Hays?

  And this one, you got four, four of the founders.

• 2:14:32John Coogan?

  Four founders jumping in, one minute, that is remarkable. Um, I am not

• 2:14:38Jordi Hays?

  No stranger to controversy, though.

• 2:14:40John Coogan?

  Yeah.

• 2:14:41Jordi Hays?

  Joe Longstall says, I am not a humble man, but this is legit, legitimately beyond my capabilities.

• 2:14:48John Coogan?

  Absolutely wild. Uh, well, Versal, Guillermo Rao, uh, friend of the show, is apparently running a, an ad campaign on Lyft by, uh, buying custom license plates and deploying them through Lyft drivers? Is that what's going on here? No, you think it's random?

• 2:15:07Jordi Hays?

  The guy, Peter, the driver, was like, I must love

• 2:15:10John Coogan?

  Love Versal or worked there or something? Uh, I don't know.

• 2:15:14Jordi Hays?

  If he was the eighth employee at Versal, I don't think he'd be driving Lyft unless he just loves, it truly just loves the game, loves driving.

• 2:15:23John Coogan?

  Or he's just super illiquid. He just like, he's just like, pay me zero, actually. I'll drive Lyft. I want all equity. I'm super bullish on Versal.

• 2:15:32Jordi Hays?

  That's a possible possibility.

• 2:15:34John Coogan?

  That's a possibility. Well, Alex Conrad says, is your startup even sponsoring Lyft license plates yet? Uh, it's an outside the box strategy. Someone should pick it up. Someone should do it. Get a bunch of, uh, get a bunch of license plates for cars, rent them out to Lyft drivers, get those impressions. Um, Wix is down a bunch. The, uh, this seems like Very logical company to suffer in the age of vibe coding. People are vibe coding websites all the time. And Wix is a supplier, you know, service to build websites based on templates. But Wix was buying thirty percent of its shares at ninety-two dollars six weeks ago, but the stock is now down another forty-five percent.

• 2:16:19John Coogan?

  And so I was wondering about this. I almost asked Max Levchin about this yesterday. But when you're going through this world, like it seemed like he was very confident about the SaaS apocalypse and did not feel the need to respond or take any dramatic actions, just sort of wait and let the let the metrics do the talking. But I was wondering about, you know, are you tempted as a CEO when your stock trades down on a narrative that you know does not apply to you, but you're just sort of a collateral damage? Are you tempted to do a quick buyback and just sort of, you know, get a good deal on your stock? If it's even if it's just, you know, three months down, then right back?

• 2:17:02Jordi Hays?

  Imagine being a public company CEO and buying back your stock and then getting a return on it. It has to be one of the most euphoric experiences.

• 2:17:10John Coogan?

  Yeah, totally.

• 2:17:12Jordi Hays?

  Not not not actually getting a return, but but obviously, you know, decreasing.

• 2:17:17John Coogan?

  Yeah.

• 2:17:18Jordi Hays?

  Or increasing everyone's.

• 2:17:20John Coogan?

  Well, Wix is a two-point-nine-billion-dollar company now.

• 2:17:22Jordi Hays?

  Yeah, they they acquired this company, Base44.

• 2:17:25John Coogan?

  Okay.

• 2:17:25Jordi Hays?

  Remember, this was like a one-person.

• 2:17:26John Coogan?

  Oh, yeah, that's right.

• 2:17:27Jordi Hays?

  One-person company and they were growing. I think Base44 has been growing revenue quite quickly. It seems like pretty much any of these vibe coding tools.

• 2:17:39John Coogan?

  Yeah.

• 2:17:40Jordi Hays?

  Just the the experience is so magical for people.

• 2:17:42John Coogan?

  Yeah.

• 2:17:43Jordi Hays?

  That a lot of them have grown revenue really quickly.

• 2:17:46John Coogan?

  Fascinating stock chart if you zoom all the way out. So during COVID twenty-twenty-one, Zerp era, stock was at three hundred dollars a share. It's at fifty-two today, by the way. It traded down after Zerp era ended all the way to fifty dollars a share, fifty, sixty dollars a share. And then post-chat GPT moment twenty-twenty-four, fantastic for the stock. It gets back up all the way to two-fifty, two-hundred dollars a share. But then since twenty-twenty-five, as AI has gotten better at coding, vibe coding websites, doing front-end design, there has been a significant sell-off that continues today. And so, rough go.

• 2:18:23Jordi Hays?

  I was looking to get a comp.

• 2:18:25John Coogan?

  Yeah.

• 2:18:26Jordi Hays?

  Uh, I looked up Squarespace. Squarespace is no longer publicly traded. Uh, it was, uh, traded on the NICE, but it was delisted after being taken private by at 7.2 billion. That is tough timing, taken private in October 17th, 2024.

• 2:18:44John Coogan?

  Oh, interesting.

• 2:18:45Jordi Hays?

  And, uh, at the time, there was not a SaaS apocalypse narrative.

• 2:18:49John Coogan?

  Yep.

• 2:18:49Jordi Hays?

  You couldn't one-shot a beautiful website with a single prompt.

• 2:18:52John Coogan?

  Yep.

• 2:18:53Jordi Hays?

  It's going to be so hard to, uh, for this firm to make money on this deal.

• 2:18:58John Coogan?

  Yeah, it feels like a new customer problem just because it's not the hot new technology that you're hearing about. Like the podcast ad conversion has to be a lot worse, but I would be very interested to know what is retention like? Because I know some people that have built these.

• 2:19:11Jordi Hays?

  Cable businesses, basically.

• 2:19:12John Coogan?

  Yeah, I, I know some people that have built these, uh, web, uh, website generator companies. And then they just keep growing and growing and just sticking around forever. Because once someone, uh, has the magical experience of building a little website for their company or their personal brand. And then they just let it run forever and they're like, ah, 10 bucks a month, I'll just let it keep going. Uh, well.

• 2:19:33Jordi Hays?

  Yeah. So Squarespace had done around 1 billion of revenue in 2023. Uh, I'm assuming they grew into 2024. We don't have the full year numbers because it was taken private in Q4. But is pretty reasonable revenue multiple.

• 2:19:49John Coogan?

  Yeah.

• 2:19:49Jordi Hays?

  But if they lose out on a lot of those new customers, because there's every single company in the world. Every single company in the world, it seems like, is trying to make a box that will make your website.

• 2:20:00John Coogan?

  Yeah, yeah, everyone. Anyway, uh, you know what very few companies are making? A nightstand that turns into a bat and a shield for defense. I like this. It looks so unassuming as a nightstand, very believable. No one would guess. But then something happens, you grab your, your bat and shield and you're ready to rock. Did you pick one of these up? It has a little bit of a hotel vibe to it. It doesn't

• 2:20:25Jordi Hays?

  Don't

• 2:20:25John Coogan?

  Also, I like a nightstand that

• 2:20:27Jordi Hays?

  All I would say is don't bring a nightstand to a gunfight.

• 2:20:30John Coogan?

  Okay. Yeah. Well, people are having fun with the AI-generated videos showing that, yes, in fact, it's not, if it's not bulletproof, it has a, has some trouble. If you disable, Ben Thompson says, if you disable Open it Login for the Gemini app launcher that the Gemini app installs in the background without asking, Gemini app launch will immediately re-enable Open it Login. I will now, needless to say, delete the Gemini app and don't intend to install it ever again. And so this is very, very odd. Gemini login. Oh, so it automatically logs in no matter what. He says, I'm, I'm actually struggling to remember a bigger middle finger to a user from an app ever.

• 2:21:11John Coogan?

  It's bad enough to install a helper app, but to immediately undo the user's explicit setting change? Incredible. And Josh Woodward from Google chimed in and said, this is a bug. It will be fixed in the next release, aiming for right after Google I/O. More if you're interested. So that's good. They did, they did receive the feedback. Well, we should talk about Nikita Beers. I was reminded of this because he screenshotted and posted it. The greatest growth hack of his career for one of his projects. This happened, was this a year ago? Gas or Explode app? This was, this was about a year and a half ago. Pre-joining X and working with Elon Musk over at X.

• 2:21:53John Coogan?

  He launched a company called Explode or an app called Explode. And he had a very interesting growth hack where he incorporated the company as Tap Get Inc. And so in the iPhone App Store description, under the name of the app Explode, it would say Tap Get. And then right below it would say Get because it's a free app. And it doubles down on the call tag.

• 2:22:17Jordi Hays?

  He made the entity a call to action.

• 2:22:20John Coogan?

  It's genius. These little, these little things really add up. And you've seen them all over X. And he's done a good job of creating re-engaging areas. And I just feel like the UI of X has been improving significantly. I'm really, I'm really enjoying the latest UI feature where if you're watching a video and you want to speed it up, you can hold on the right side of the screen, which is fairly common in video apps these days. Doesn't work in the iOS native video player. I don't even know if it works on YouTube, maybe. But what's really cool is that if you press and hold it, you will temporarily be in 2X speed mode. But now in X, if you press hold and you're in 2X speed mode and you drag down, it fills

• 2:23:02John Coogan?

  a little circle and keeps you locked in that 2X speed mode. And it actually changes the speed of the video permanently until you change it back. And so that little delightful touch is something that I'm seeing more and more from the X team and I'm a big fan of. Well, without further ado, we have Andrew Feldman from Cerebras in the waiting room. Let's bring him in to the TV Veneltrum. Andrew, great to see you again.

• 2:23:24Jordi Hays?

  Looking sharp.

• 2:23:26Andrew Feldman?

  Feeling sharp. How are you guys doing?

• 2:23:27John Coogan?

  Feeling, congratulations. How has the day been? I would love to get just your reactions from the day. It seemed like there were a lot of people there. Take us through your, your emotions today.

• 2:23:40Andrew Feldman?

  Well, you know, this was better than, than we'd hoped for. I, I think a chance to, to celebrate. We, we did bring a lot of people from the company and we brought families. And to, to, to, to share with the team, we brought everybody who'd been at the company for longer than nine years and their families. We, you know, when you do a startup, the family is a, is a meaningful part. It takes patience from them and, and a great deal of it. And so they came and we celebrated. It was really an extraordinary day. We, we opened up. You know, we did, uh, we priced at 185, we opened up 350 and we settled at about 320. What an extraordinary thing. We're just so proud.

• 2:24:25John Coogan?

  Yeah. Um, take us through some of the, the history of Cerebras. Uh, has it been a straight shot? Has it been an overnight success? How do you characterize it? Uh, what were the darkest moments? What were the highlights? Uh, what are the good old days to you? What does that mean?

• 2:24:42Andrew Feldman?

  Well, look, I, I think in the hardware business, if anybody tells you it's a, it's a straight shot, you, you, you can call BS. I, I just don't think that's the way our, our business works. I think, um, the first time you, you build a chip with a new architecture, it, it's a little more than a prototype, a little more than a proof of concept. The second chip, you iron out your, your, your challenges and you begin to show it to customers in, in mass. Third one off and it, it really takes off. And, and so it's a long, long road in, in innovative hardware designs. And so, you know, we were founded in 2016. We're, we're more than 10 years old. Uh, we, we sought to solve problems that, that others, that's right, overnight success.

• 2:25:24Andrew Feldman?

  Thank you. Oh, exactly. Like, like a decade. Like, I was 15 pounds lighter and way faster.

• 2:25:31Jordi Hays?

  Overnight successes are, you know?

• 2:25:33John Coogan?

  Yeah.

• 2:25:33Andrew Feldman?

  That, that's right. I mean, they're just overnight because most people sort of weren't paying attention. But we tried to solve some problems that other people thought were impossible. As we showed you last time, you know, we tried to build a chip that was the size of a dinner plate.

• 2:25:46John Coogan?

  Yeah.

• 2:25:46Andrew Feldman?

  And, uh, everybody told us it was impossible. And the truth is, for a while it was.

• 2:25:51John Coogan?

  Mm-hmm.

• 2:25:51Andrew Feldman?

  And, you know, we, we didn't solve it until August of, of 2019. We built this extraordinary chip. We were faster than everybody and absolutely nobody cared. Nobody. And, uh, AI wasn't ready and it was still sort of a novelty. And nobody cares about how fast you are when it's a novelty. But, but starting with, with GPT, uh, and in 2025, the models got so darn smart, they became useful. And suddenly everybody wanted to use AI and you use it with inference and, and business was rolling.

• 2:26:26John Coogan?

  Yeah.

• 2:26:27Jordi Hays?

  Uh, what were those early rounds like? I'm thinking the benchmark round, Co2, a bunch, you know, Eclipse, a bunch of others.

• 2:26:37Andrew Feldman?

  You know, we had the advantage of the founding team had been together at our last company that had paid pretty well for the venture capitalists and the team. And so we had some wind in our sails when we went out and raised money. It's not like today where we're four guys and the word lab and you're raising it a billion free for year A. That's not us. But we went out, we made eight calls, we got eight term sheets, we chose Benchmark and Foundation and Eclipse. And we got going. You know, less than a year later.

• 2:27:10Jordi Hays?

  I was expecting, I was expecting you to say like, yeah, I mean, it was, it was a slog.

• 2:27:15Andrew Feldman?

  Other rounds were a slog. Other rounds were a slog. At the beginning, not so. You know, Thomas Lafont at COTU came in shortly thereafter, and we did a round with them. I think the truth is between about 2020 and 2023, it was, it was much harder. AI was sort of in this situation where everybody was saying, oh, that's cool. Look what this model can do. Look how big it is. But it wasn't being used anywhere. Right? Nobody was using it. They were pointing at it. They were saying, wouldn't this be nice? And they went back to whatever they were doing before. And it wasn't until really sort of 2025, when

• 2:27:58Andrew Feldman?

  the models got good, and you just saw this tidal wave of people using AI and demand for AI compute. And that's been exceptional. It's just been an amazing thing to ride.

• 2:28:07John Coogan?

  Yeah. You, yeah, you mentioned like, if you have four guys and your, your company name ends with lab, you can raise a billion dollars. There's a little bit of that going on in the market with just like chips, semiconductors, AI. There's not that much that needs to be explained. But what were the key ideas or thesis that you needed to explain in the roadshow to investors that wanted to go a layer deep, a layer deeper than just AI chips?

• 2:28:37Andrew Feldman?

  Yeah, I think there was the first, the market size and dynamic. And I think Jensen said some time ago on Brad Gerson's podcast that the demand for inference will grow by a million x. And nobody believed him. And, you know, at the same time, you saw Sam Altman, you know, displaying real vision and going out and trying to lock up huge amounts of compute and memory and data center and power because he saw it too. And I think trying to share what that means, what an exponential demand means and that we're still so early and yet the demand for AI compute is overwhelming.

• 2:29:19Andrew Feldman?

  I think sharing that was interesting and I think helpful in educating the financial community. The other thing is that there are lots of ways to do this. The GPU isn't the only way. You've got a TPU, you've got Tranium, you've got us. There are lots of different ways to build a solution here. And finally, that maybe the notion that CUDA is sort of this grand lock-in is overplayed. And that, you know, the Gemini 3, which is an excellent model, was trained on TPUs with no CUDA. That Anthropic's models were trained on Tranium with no CUDA. I mean, that low and behold, some of the best models, some of the most interesting things are being done without CUDA.

• 2:30:03Andrew Feldman?

  And that that lock-in might be overplayed. And I think these three factors were really important in educating the financial community.

• 2:30:11Jordi Hays?

  Going forward, how do you think, how do you and the team think about sort of calling your shot and sort of trying to predict where and how inference demand will look in, you know, 2030 and beyond versus like working closely with the labs that now have, you know, product lines with billions of dollars of revenue and their own roadmaps that you can work with?

• 2:30:34Andrew Feldman?

  Yeah, you know, like the babe, I'm going to point out to left field and just say, this is where it's going, baby.

• 2:30:42Andrew Feldman?

  I love it.

• 2:30:45Andrew Feldman?

  No, I don't think that's the way it works.

• 2:30:49Andrew Feldman?

  I think we're calling our shots every day by making big investments in data center capacity and collaborating with the leading visionaries in the field in working not just with with OpenAI to service sort of the cutting edge and deliver their extraordinary models, but also with AWS to make sure that we can get access to the largest enterprise customers. Instead of having to work with these enterprise customers, procurement, sort of organizations who provide master purchase agreements that are the size of a Bible, you know, you can say, look, why don't you buy us through AWS and it'll count against your against your

• 2:31:29Andrew Feldman?

  annual commitment. And so I think those are really important ideas and ways we get access to the market. And then we're taking huge amounts of data center capacity. And so that's the other bet we're making.

• 2:31:42John Coogan?

  Yeah. Makes a lot of sense. How do you think the year will play out in terms of just broader consumer awareness of what fast inference feels like? I had a really magical moment using Cerebras in GPT 5.3 Spark and Codex. And even outside of coding tasks, just talking to the model and having it respond instantly was sort of, it felt like a new breakthrough or new paradigm. And I feel like this hasn't fully diffused, but it also feels like when it does, there will be potentially like entirely new ways of working, entirely new paradigms that might

• 2:32:25John Coogan?

  emerge. How are you thinking about actually diffusing the technology?

• 2:32:29Andrew Feldman?

  We think that's exactly right. And we think that the experience of engaging with a real time AI will encourage people to do more things, to stay longer, to work on harder problems, and to invent new things. I mean, if you remember, you know, when Netflix started, they delivered DVDs in envelopes.

• 2:32:50John Coogan?

  Yeah.

• 2:32:51Andrew Feldman?

  Right? And when the internet got fast, they became a movie studio.

• 2:32:55John Coogan?

  Yeah.

• 2:32:55Andrew Feldman?

  And they didn't get better at DVD delivery. They became something completely different, something that had never been in existence before, a movie studio that delivered directly to your home. I think that's exactly what's going to happen. And you can just sit back and you can ask yourself, I mean, how big is the market for for slow search? Zero. How big is the market for dial-up internet? I mean, how much would I have to pay you to swap out broadband at home and bring in dial-up?

• 2:33:19John Coogan?

  I'm not doing it.

• 2:33:20Andrew Feldman?

  A thousand a month, fifteen hundred a month, two thousand a month? I mean, no way. I mean, it just wouldn't be worth it.

• 2:33:25John Coogan?

  Yep.

• 2:33:25Andrew Feldman?

  And so, the community is going to engage with inference in the same way, and that fast inference is going to be all of the market.

• 2:33:33John Coogan?

  Yeah. So, you make the chips. I believe you also make cooling infrastructure as well, cooling units. Is there, are there other products on the roadmap that you think will be required to roll out and scale Cerebras over the next couple of years?

• 2:33:51Andrew Feldman?

  No, I don't think so. I think right now, we build the chip and the system, and the system includes, it's about the size of a dorm room fridge. There, you put two of them in a standard data center rack, and the cooling infrastructure is built into the system.

• 2:34:06John Coogan?

  Sure.

• 2:34:06Andrew Feldman?

  And I think that's where we want to focus. We want to be measured on our ability to build AI computers that are faster than anybody else.

• 2:34:14John Coogan?

  Yeah. How are you thinking about scaling on-chip memory? It feels like there's some, there's some concern about, well, what if the models go to 10 trillion parameters? What if it gets too big? How are you thinking about that challenge, or maybe it's an opportunity?

• 2:34:31Andrew Feldman?

  It is an opportunity. I think a 10 trillion parameter model is hard for everybody. It's actually easier for us.

• 2:34:36John Coogan?

  Okay.

• 2:34:37Andrew Feldman?

  Right? There's a reason we're not at 10 trillion. It's because it's really hard and expensive to serve for everybody. I think one of the things that we've been able to do for the larger models is to tie together a bunch of these systems in parallel and run them as a pipeline. And that way, we can train and do inference on trillion, multi-trillion parameter models in ways that I think are much more intuitive than on GPUs that have much smaller compute. They have off-chip memory, but their problem is the compute. They don't have enough compute per chip.

• 2:35:13John Coogan?

  And then, how are you talking to customers about potentially bringing cerebrous in? Not as a full replacement to their entire semiconductor supply chain or stack, but as a complement to everything else that they're running? Because I have this vision of like, the next generation of AI agents. You get this genius model, but it needs to use a small model over here, an open source model over there, a super fast model for a certain thing if it's looping through some tasks.

• 2:35:44Jordi Hays?

  Yeah, the same way you hire, you have a superstar employee. You don't necessarily want them doing every single task themselves. It's like, yeah, you should be able to delegate.

• 2:35:52John Coogan?

  Yeah, delegation. How are you thinking about that?

• 2:35:54Andrew Feldman?

  Yeah, I think that is sort of a notion of a confederacy of models, right? That there's a collection of different models. And one of the things we thought about early on was how to interoperate in that environment. And we connect in via standard 100 gigabit Ethernet, nothing fancy, nothing proprietary. We are deployed in many places where they've got GPUs from Nvidia or GPUs from AMD. They've got x86 compute from Dell or HP. And so that's not a problem at all. We're eager for those environments.

• 2:36:31John Coogan?

  Yeah.

• 2:36:31Jordi Hays?

  How, what do you think the company would look like today if you guys had had access to today's frontier models when you started the company? Like, are you feeling, and how do you think about just like the speed up in, you know, at the company today due to how good the models have gotten?

• 2:36:49Andrew Feldman?

  We use frontier models every day in coding, in running our GNA. I think if you start a company today, you build a very different organization. I think there are whole departments that look different in the next.

• 2:37:05Andrew Feldman?

  Nine to eighteen months. I think much of what HR does, much of what training does, i- is solved by by some form of AI. I think a lot of the work in finance, right? Closing the books, a bunch of what they do is checking. And those are all done by agents. I think what it is to be selling or doing recruiting, those change. I think for a long time, what recruiting was, was hunting through or writing scripts for LinkedIn. I think that changes substantially. And so when we look out, we see sort of fundamental changes. The obvious ones, of course, are, you know, a year ago, engineers were using approximately zero tokens. And now they're using, you know, $10,000 worth of tokens a month.

• 2:37:51Andrew Feldman?

  And the rate of change and the rate of new PR requests, new pull requests is just extraordinary. And so AI is having fundamental changes. Obviously, it usually starts in Silicon Valley and sort of works in waves to other areas. But that's what we're seeing right now.

• 2:38:11John Coogan?

  Since the last time we talked, there's been a ton of movement in the space data center market. A lot of energy just yesterday. SpaceX and Google, I had a launch deal in the Wall Street Journal. Has any of your thinking changed? Like, what is your current thesis on space data centers and how it might fit into your business plan over the next decade even?

• 2:38:33Andrew Feldman?

  Well, one of the hardest things in a space data center is communicating across chips, from one chip to the next. And we solve that, right? One of the great parts about a big chip i- is that you have to communicate from one chip to the next less frequently. It's a huge advantage for us in space. I think that this is an idea like self-driving, where the last 10% takes 80% of the time.

• 2:38:59John Coogan?

  Sure.

• 2:39:00Andrew Feldman?

  Right?

• 2:39:00John Coogan?

  Yeah.

• 2:39:01Andrew Feldman?

  And that we're not three or five years away, we're eight to 12 years away.

• 2:39:06John Coogan?

  Yeah.

• 2:39:06Andrew Feldman?

  That doesn't mean we shouldn't be working on it, or thinking about it, or making progress to it, because if you don't do that, it's 25 years away.

• 2:39:12John Coogan?

  Yeah.

• 2:39:13Andrew Feldman?

  But I don't see data centers in space in the next three or four years.

• 2:39:17John Coogan?

  Yeah, and arguably, you've solved the key problems that you would be asked to solve, and so you'll be ready if demand shows up.

• 2:39:26Andrew Feldman?

  We're ready.

• 2:39:26John Coogan?

  But there's not that much for you to do individually to advance that.

• 2:39:29Andrew Feldman?

  That's exactly right.

• 2:39:30John Coogan?

  Yeah.

• 2:39:31Andrew Feldman?

  That's exactly right.

• 2:39:31John Coogan?

  Well, we're hoping for it. It'd be exciting. But plenty, plenty more to do here on the ground.

• 2:39:35Jordi Hays?

  Andrew, congratulations to you and the whole team on this incredible milestone.

• 2:39:39John Coogan?

  Yeah.

• 2:39:39Jordi Hays?

  We're honored that you would spend time with us.

• 2:39:42John Coogan?

  We really appreciate it.

• 2:39:42Jordi Hays?

  On a historic day for the company.

• 2:39:44John Coogan?

  Yeah.

• 2:39:44Jordi Hays?

  And, yeah.

• 2:39:45John Coogan?

  Let me hit the gong.

• 2:39:46Jordi Hays?

  It's incredible to watch your progress, and I look forward to your next appearance, and enjoy the rest of the evening.

• 2:39:53John Coogan?

  Enjoy the rest of the evening. We'll talk to you soon.

• 2:39:55Andrew Feldman?

  Thank you, guys. It's time for a cocktail. Be low.

• 2:39:57John Coogan?

  Fantastic. Enjoy it. You deserve it. Goodbye.

• 2:40:03Jordi Hays?

  I love that analogy. He's like, I'm Babe Ruth.

• 2:40:08John Coogan?

  Yeah.

• 2:40:08Jordi Hays?

  I just point.

• 2:40:09John Coogan?

  And then he's like, no, I'm not going to do that. It's way more complicated. I've been working on this for a decade. Yeah, what a fantastic story, what a fantastic performance. And I'm very excited that we're bringing in Eric Vitriar from Benchmark, who was in that Series A that Andrew Feldman just mentioned. So we will talk to him about that in just a minute. We're going to bring him into the waiting room. But there are some other posts that we can talk about in the meantime. One, someone is using Runway ML to create, let me see this, a full hurricane inside a TV studio. I want to watch this clip, and it's one minute, and we will see, how convincing is this?

• 2:40:52John Coogan?

  Are you going to be turning off the news in order to watch this?

• 2:40:56Speaker 12

  But wind is only the beginning. The real danger is when the storm starts moving. This is very cool. As the storm builds, ordinary things stop feeling ordinary. Roof panels.

• 2:41:09John Coogan?

  So you think audio also like fully AI generated because the typical workflow for this is the new the host would stand on a green screen or LED volume and then all of these effects would be added in post or live through like a traditional visual effects pipeline. This feels fully synthetic. I think that you'll probably use some sort of hybrid approach, but the the ability to prompt something like this on the fly for a small news organization that maybe doesn't have the budget for a huge VFX team, you're just going to see a lot more VFX like this. You're going to see stuff all over the place. There are so many small news channels, local news stations that just don't have the the,

• 2:41:54John Coogan?

  you know, access to digital domain or some huge visual visual effects house. So it looks pretty good.

• 2:42:00Jordi Hays?

  Before our next guest, Dylan Field has a quick update.

• 2:42:03John Coogan?

  What do you say?

• 2:42:03Jordi Hays?

  They have their Q1 results. He says, quick update, not dead and putting up some insane numbers. Forty six percent year over year revenue growth accelerating for the second straight quarter.

• 2:42:14John Coogan?

  It's up 6.8% today, up 8.6% after hours. Congratulations.

• 2:42:24Jordi Hays?

  Says design matters more than ever. The Figma team continuing to execute incredibly well.

• 2:42:30John Coogan?

  Fantastic news.

• 2:42:31Jordi Hays?

  Let's bring in Eric.

• 2:42:33John Coogan?

  Welcome to the show, Eric. Congratulations on the progress. Thank you so much for taking the time on such a busy day. Great to meet you.

• 2:42:42Speaker 05

  Great to meet you guys. Excited to be here. Long, long overdue.

• 2:42:45John Coogan?

  Yeah, crazy that this hasn't happened already.

• 2:42:47Speaker 05

  Have an opportunity to. You guys like Ev, you know, so you have Ev on. You don't have to have me.

• 2:42:52John Coogan?

  He was a former colleague, but everyone is welcome here. But I would love to just hear the story from your perspective. We just heard it from Andrew's perspective. It seemed obvious, but was it obvious to you?

• 2:43:04Jordi Hays?

  Was it the most obvious deal ever? Because I was, we were talking with Andrew. I was asking him for the story of those first couple of rounds, expecting him to be like, you know.

• 2:43:12John Coogan?

  It was really hard.

• 2:43:13Jordi Hays?

  ChatGPT wouldn't come out for almost a decade. There was a slog. We kept getting, we walked up and down Sand Hill Road. We got noses. He's like, yeah, we got eight term sheets. Clearly it was a deal you had to win.

• 2:43:25John Coogan?

  Yeah, take us through it.

• 2:43:27Speaker 05

  Well, you know what, the hilarious thing about it is in venture, it's very useful to be naive. And certainly, I was so naive about how hard hardware actually is. Like, I can't even, I can't even describe to you guys how naive I was and we were. You know, it was 2016, deep learning was clearly going to become a thing, which would obviously evolve and empower the AI that we have today. And I was looking at all of these different applications. So I was looking at like deep learning for radiology and security and other things. And it was really hard to figure out where it was going to work, like which application was going to take off. And you guys have to remember, this is, this is 2016, right?

• 2:44:12Speaker 05

  The TPU hadn't been announced, the transformer paper hadn't come out yet. LLMs hadn't, hadn't been born yet and obviously not chat GPT or anything else. And so it's really early, but there was clearly something there. And when I first met Andrew, he came in and I was like, we hadn't, we're not hardware investors typically. I think our last hardware investment before that one was Ambarella, which was 10 years earlier. And he came in and he said, you know, it was like the team slide, very impressive. And then, you know, the slide three was GPUs actually suck for deep learning. They just happen to be 100 times better than CPUs.

• 2:44:55Speaker 05

  And as soon as he said it, it just like a light bulb went off, like, of course, of course. Like, why would a graphics processing unit be the right solution for deep learning? And then, you know, of course, he proceeded to explain like why GPUs were so much better than CPUs for training. And also what the like ideal ground up solution could look like. And, you know, and they had their idea of the way for scale and everything else. And, you know, and as soon as he said it, it's kind of like, oh, yeah, that makes sense. And like, I should, you know, like, we don't know what application is going to work. We should invest in infrastructure. This is an amazing team and a really provocative idea.

• 2:45:35Speaker 05

  You know, fast forward, like, that was 2016, spring of 2016, you fast forward like six, seven years. And like, we're still slogging it out and have raised so much money and have very little revenue and.

• 2:45:49Speaker 05

  You know, and it just hadn't all come together yet. And then, of course, over the last two years, inference is exploding. It turns out Cerebras switches from training to inference and really focusing on inference and making inference speed where speed matters. Coding explodes where speed really matters. And so all these things kind of came together. And so, you know, a lot of luck, a lot of naivete on my part. But for the team, just relentless grind, never giving up, always taking feedback, but being persistent, being open minded about where the market was going. So yeah, I'm so, so proud of them.

• 2:46:29John Coogan?

  Yeah. What was your role as an investor like over the journey of the company? Because obviously Andrew and his core team, deep engineering bench. Were you focused on how you positioned the company, the private markets, fundraising, or management? Like what, what were you focused on, you know, in terms of value add or just helping build the company alongside?

• 2:46:55Speaker 05

  I'm, I'm really the algorithm specialist. Like I go in there and I do that. No, I'm just kidding. I don't know anything.

• 2:47:01John Coogan?

  You're in the fab. You're the one that's making the chips.

• 2:47:05Speaker 05

  That's right. I was making it up.

• 2:47:06John Coogan?

  Clean room.

• 2:47:08Speaker 05

  Yeah. It, there's, you know, it really changes a lot over the course of a company. This is, I think, the, the fourth company that I've worked with for more than 10 years. And, and so when you work on them a long time, the, the companies evolve a lot, right? You start out, it's just five people. It's just the five founders originally. And, and so at different points in time, it's a lot of fundraising help. At points in time, it's like really helping build out the broader management team. And a lot of it is also just being someone for the founder to talk to, you know? There's, being an entrepreneur is very, the highs are very high and the lows are very low. And, and so someone you can talk to and be really open with that like helps moderate that.

• 2:47:53Speaker 05

  And I think that's a part of it. So it's just, it's an evolving, you know, conciliary kind of role. And, and I really love it. Actually, that's the, that's the part of the job that I love the most. And It's very, it's rare and special to have these kinds of relationships. I've had a few of them. I'm very lucky to have a few of them where I just feel really like a lot of chemistry with the, with the founder and, and just feel like we have a really productive relationship.

• 2:48:22John Coogan?

  Where are you excited to invest over the next decade? Because, you know, it feels like we're still in the semis, boom, there's a lot of opportunity there. You could go deeper into that side of the business, but then there's so much software.

• 2:48:36Jordi Hays?

  I'm sure you've gotten pitches that look like the, what, what maybe would be the next gen and, you know.

• 2:48:43John Coogan?

  Maybe like I already got my horse.

• 2:48:44Jordi Hays?

  Yeah, well, yeah, that, but then, you know, talking to these teams that don't necessarily know what it'll actually take, right?

• 2:48:50John Coogan?

  Sure.

• 2:48:50Jordi Hays?

  They didn't learn the hardware is hard lesson yet.

• 2:48:53Speaker 05

  Yeah, totally, totally. Well, you know, one of the funny thing, and I ask myself this question all the time, obviously, is, you know, this is a 20, for us as early stage investors and looking for, you know, really big outcomes, but willing to take big swings, you're, you, you really do have to kind of look many years forward and try to see like, what's going to ripen at the right time, right? So in 2016, you make an AI hardware investment and, and you know, Grok was, I think, 2017, for example. So like, you know, there were, there were several contemporaries of them. And of course Grok and Cerebro have ended up doing really well. And so you, you, but you're, you're trying to say like, okay, this fruit's going to ripen in like six years, right?

• 2:49:37Speaker 05

  And, and so there's, there's kind of some mention of projection. You know, right now, I think I'm, I'm really excited and continue to be really excited about a lot of the AI applications. We're investors in Sierra and Legora and a number of others that where like they're obviously booming. They're selling magic to their customers and, and the companies are doing great. We also have these like infrastructure investments, like fireworks, for example, which is, you know, also riding this enormous inference demand. And then there are kind of things that are, that are a bit more forward looking. We invested in Star Cloud, my partner. Chasing our investment in Star Cloud, which, you know, space data centers.

• 2:50:19Speaker 05

  And we also, you know, we led the initial round in Sunday Robotics, which is a home robot. And so, you know, I think those things are going to take longer. Like, you know, they're, they're not going to be, you know, massively scaling revenue like next year. Like, that's not, that's not what they are. So you kind of have a combination of these different things, which are, but it's, it's kind of trying to figure out when they ripen.

• 2:50:42John Coogan?

  Next time you come on, we got to have you debate Dalian. Cause he came on and was debating Ev and hardware versus software. But you got space, chips, you got everything Dalian likes, yeah.

• 2:50:53Speaker 05

  Well, it's nice, it's nice to have a portfolio. And I think, you know, one of the beauties of Benchmark is each of the, each of the partners is attracted to different things and different types of founders. And so we, you know, you put it together and it, it works out really well.

• 2:51:08John Coogan?

  Yeah, yeah.

• 2:51:10Jordi Hays?

  Walk us through Fund Seven and Eight. Because there's chatter on the timeline as, as those funds being some of the best in venture history. And although this is Cerebras's day, this is your first time on the show. So we do have a big gong here.

• 2:51:27Speaker 05

  Yeah, well, I, you know, Fund Seven, Fund Seven has, or had Uber, Snapchat, Elastic,

• 2:51:39Speaker 05

  Stitch Fix, WeWork, I mean, there were so many things. It was like, it was such an embarrassment of riches and I had nothing to do with that fund, just to be clear. Like, I, I joined in 2014, that, that fund was already deployed, but, and invested in. But the team, you know, that, that team at the time just did such an outstanding job with winner after winner. Discord is in there, I mean, it's like really, like, when you have, you know, guys, like in venture, if you catch the trend right and, and obviously work hard and get lucky. But you have, you know, the sixth or seventh company in the, in the portfolio,

• 2:52:20Speaker 05

  delivering a multiple of the fund or something like that, like that, you're in such rarefied. And that's there's it's really special. So that's Fund Seven. You know, Fund Eight is a very enterprise. It's our 2014 vintage, I think. And, you know, it has it's a very enterprise fund. And so, you know, we had Confluence, which returned a bunch, and Amplitude has returned a bunch. And, you know, and then we have Cerebras, obviously, which is big, but Chainalysis is in there and several others. And so it's kind of interesting how they switch. I think that's actually more interesting to me, which is Fund Seven was very consumer mobile. And Fund Eight is like very enterprise-y, and they're like back to back.

• 2:53:06Speaker 05

  But they turn out to, you know, they both work. And so, you know, I think that that tells you a little bit about what venture is and how we all have to be really open-minded about what's happening and what's the right timing for these various ideas. And then, you know, fast forward, and our 2022, I think, 2022 vintage has, you know, the first round of Sierra, the first round of Fireworks, the first round of Legora, you know.

• 2:53:32Jordi Hays?

  Mercur.

• 2:53:33Speaker 05

  Redactor, Mercur, yes, absolutely, Langchain. And so, you know, all those are in there. And so, obviously, that's a totally different fund and has, you know, a different set of things, but also, you know, looks pretty interesting. So it just it evolves. And that's what's so hard and tough about this business is staying on your toes when you're in a very, very dynamic world.

• 2:53:59Jordi Hays?

  Yeah, well, it's interesting, something that, you know, has been talked about on plenty of podcasts, but it's worth bringing up. You guys have stayed true to the strategy, and you can count on the market changing and evolving. But a lot of funds are like having to deal with markets changing and evolving while having a fun strategy that is changing and evolving. And if you keep one of those things true, it seems, at least from Benchmark's track record, that it gives you some advantage and that like you're playing a very specific kind of game and not having to evolve your own game while dealing with changing technology trends and markets.

• 2:54:39Speaker 05

  You know, I've been at Benchmark 12 years and I've thought about this a lot. And you're watching your peers do all these different things and swimming and fees and all these amazing things. And so you're like, wow, that's pretty, that looks pretty cool. So you kind of like look at this stuff. But I'll tell you what I think it actually comes down to. What it actually comes down to is what do you love doing? And we're obviously in a very fortunate position. I inherited an amazing platform and so, and very fortunate to have done that. And so, you know, we're in this amazing position where you get to do what you really like doing. And at the end of the day, we really like partnering with early-stage founders and working on these companies

• 2:55:24Speaker 05

  for a decade plus. And that's kind of what we like doing. And so I think things have definitely evolved. The opportunity set is changing and evolving. And more recently, I mean, just in February, we raised an SPV, which we've never really done before, to invest in Cerebras. And that was unusual. But it was, you can also, we've, actually, a few years ago, we did public market investing when COVID first hit and then Nasdaq tanked. You know, all of the early-stage stuff just disappeared. We were like, wait a minute, like, these publics, like, there's interesting stuff in public. So we started deploying a little bit into public. So, you know, yes, we

• 2:56:07Speaker 05

  were really focused on the early stage, and that's what we love doing. And then also, occasionally, like, we see these special opportunities and we try to jump on them.

• 2:56:17John Coogan?

  Wow. Yeah. Well, thank you so much for coming on during a business day.

• 2:56:20Jordi Hays?

  I had to sneak in that the SPV round of 23 billion. So congratulations on that investment.

• 2:56:28John Coogan?

  Fantastic.

• 2:56:29Jordi Hays?

  Another little cheeky 3X.

• 2:56:31John Coogan?

  I think you deserve a drink. Hopefully you can find Andrew.

• 2:56:34Speaker 05

  I'll definitely have some drinks tonight, for sure.

• 2:56:36John Coogan?

  Have a great time celebrating.

• 2:56:38Jordi Hays?

  Well, great to finally meet you. And congrats to everyone.

• 2:56:42John Coogan?

  Yeah, let's do it again soon.

• 2:56:44Speaker 05

  Thank you, guys. We'd love to do that. Thank you.

• 2:56:45John Coogan?

  Fantastic. Goodbye. Up next, we have Steve from Foundation Capital. He's Cerebras' first term sheet investor, also the first investor in Solana, and a bunch of other great companies. So we will bring in Steve from Foundation Capital from the waiting room. Steve, how are you doing?

• 2:57:02Jordi Hays?

  There he is.

• 2:57:03Speaker 13

  Doing great.

• 2:57:04John Coogan?

  Sorry to keep you waiting. Congratulations. Thank you so much for taking the time to come chat with us.

• 2:57:08Jordi Hays?

  Is this just another, another, another day? You didn't, are you at the NASDAQ? Are you calling in from home?

• 2:57:16Speaker 13

  Yeah, exactly. No, just another day. No, I am, I'm at my hotel on my way to the dinner that Eric's also headed to.

• 2:57:22John Coogan?

  Fantastic. Okay, we won't keep you too long. But I would love to hear the story of you meeting Andrew Feldman in 2007, how things matured from there, how you wound up working together.

• 2:57:34Speaker 13

  Yeah, so I showed actually Andrew the email last night over dinner. But yeah, he and I and Gary met in October of 2007. They were raising money for the company that they started prior to Cerebras, which was called C-Micro. And it was kind of broadly in sort of new server architectures. So these guys have been thinking about these kinds of problems for a long time. But I passed on the investment, but stayed close. We really connected in that meeting. And then when I saw them get acquired by AMD, it was about four or five years later. I was like, guys, Andrew in particular, you guys are not going to stick around this company for too long, so let's start riffing on some new ideas. And that began basically a two-year conversation about a whole bunch of ideas.

• 2:58:18Speaker 13

  Actually, it all started really in kind of this concept of warehouse scale computing. We were looking at companies like Mesosphere, ended up actually doing a small investment there and Core OS and a whole bunch of others. And Andrew came in in November of that year of 2014 and shared his ideas to our, with our enterprise team. And then basically, we riffed on ideas and in the spring of 2014. 16, so it was like March timeframe. We started telling them, "Look, we want to be your first term sheet." We've been like courting each other for a while here. And yeah, we got them a term sheet to lead that first financing. And then Eric stepped in and we changed the terms a little bit to make room and co-lead along with Eric and Pierre from Eclipse.

• 2:59:03Speaker 13

  Yeah, and then they started it right in our office.

• 2:59:06John Coogan?

  That's amazing. Can you talk to me about, you know, crypto and AI feel like two wildly different technologies, but there's a ton of overlap everywhere you see from crypto miners pivoting to Neo clouds. There's a lot of movement back and forth. And I'm wondering like, what in your mind the similarities, differences are? Like why you've been drawn to both over your career, where the gap is, where there's similarities?

• 2:59:35Speaker 13

  So what I would say, the similarities, which are probably in retrospect somewhat obvious. I would say the hardest problems of software and systems live in the area that we're working on in AI. So the AI infrastructure, the Frontier Labs as well, all the work they're doing there. And the same thing is also true at the bottom of the stack, the layer ones, and the very hardest technologies over in crypto. You know, the folks that are attracted to both of those areas tend to be very technology-driven. They love distributed systems, they love the hard problems around cryptography and elliptical curve cryptography. They love low latency computing. Like they're quite similar in terms of being systems thinkers.

• 3:00:20Speaker 13

  And so those are the ways in which I would say that the problems are quite similar. And in fact, here's a funny anecdote related to this. So Anatoly Akhavenko, you know, co-founder of Solana. Part of the reason why he chose to work with us back in March of 2018, so about two years after we invested in Cerebras, was because we were investors in Cerebras.

• 3:00:41John Coogan?

  Oh, no way.

• 3:00:42Speaker 13

  He's like, "You guys, you guys take hard problems seriously." He had spent 12 years at Qualcomm.

• 3:00:46John Coogan?

  That's right, yeah. Distributed systems.

• 3:00:48Speaker 13

  Operating system, exactly.

• 3:00:50John Coogan?

  Yeah.

• 3:00:51Speaker 13

  And so he, and then was at Dropbox and understood those challenges. And so he said, "Wow, you guys care about these kinds of hard problems, and that matters to us." So we ended up doing a fair bit more diligence and writing actually a larger check into that very first Solana financing.

• 3:01:05John Coogan?

  Yeah. Can you take us back to earlier in your career, pre-investing, obviously fascinated in hard problems, but like, where does all that come from? Does it start in high school, college, early career? Walk me through some of the early days.

• 3:01:19Speaker 13

  That's right. I studied robotics and embedded systems, sort of the intersection between mechanical and electrical engineering in undergrad, and then came to graduate school and did more of that. And then my very first Friday at Stanford, I met David Kelly, who's the founder of IDEO, which is a product development consulting firm that worked with the very best kind of Fortune 1000 companies. When they would hit a snag, a hard problem, or want to invent a new product, and they didn't often know how to wrestle those challenges to the ground, they would call us. And so we did a lot of work for Apple. We did a lot of work for Cisco. We did a lot of work across every industry, from healthcare to consumer devices to, you

• 3:02:04Speaker 13

  know, really hard problems in systems. And so I worked there for five years, designing products. In fact, saw one of my other products earlier today on the desk at the trading floor of a NASDAQ, for Cisco's voiceover IP phones, which I worked on now 28 years ago. So just working on cool, cool things, hard problems. Lastly, where it feels like if you solve that problem, it was worth solving. There's a, there's a, there's a real prize at the end.

• 3:02:33John Coogan?

  Okay.

• 3:02:33Speaker 13

  So that's how I got started.

• 3:02:34John Coogan?

  Yeah, I want to take this full circle then because robotics is sort of having a moment, but it still feels like it's early in terms of, as a consumer, as optimistic as I am, I, I just don't think I'm going to have a humanoid robot walking around my home this year. Most people we've talked to have said, yeah, it's maybe five, six, eight, 10 years away. But that's like the perfect timeline for a venture capitalist to start getting involved. You don't want to be trying to build custom AI chips today. You want to start 10 years ago like Cerebras did. So how are you thinking about the, like pulling your experience from robotics into the modern era? Because if the boom isn't already here, it's probably going to be here in a decade, if not a decade, two decades, like it's coming, robots are going to be real.

• 3:03:18John Coogan?

  So how are you thinking about it?

• 3:03:21Speaker 13

  So we've done a fair bit of work in embodied intelligence in terms of research and as I'm sure you're familiar, it's, it's always a little tricky to invest in an area that you have some operating experience. It tends to bring some scar tissue.

• 3:03:33John Coogan?

  Yeah.

• 3:03:34Speaker 13

  And so you might be more circumspect than, than if you'd had kind of a beginner's mind.

• 3:03:37John Coogan?

  Sure.

• 3:03:38Speaker 13

  I would say I, I am generally not a big believer in the humanoid approach. I think there are use cases, for example, in the home companionship.

• 3:03:48John Coogan?

  Yeah.

• 3:03:49Speaker 13

  And, and even in that case, it's, it's a bit of a stretch. I think you need to think about robotics more broadly and think about industrial automation and, and then look at the, the, the problems that are not necessarily a kind of the, you know, the consumer level use cases.

• 3:04:06John Coogan?

  Yeah.

• 3:04:06Speaker 13

  But you walk the factory floor and you see people moving around pallets and the human form factor is not good for moving pallets around.

• 3:04:13John Coogan?

  Yeah.

• 3:04:13Speaker 13

  And so you wouldn't actually build a humanoid robot if you were trying to deal with that use case. So I think when I zoom out and I say, what are robotic systems? Robotic systems are basically ways of automating, automating human labor. And so, and, and in fact, the greatest compliment for most of these systems is when you stop calling them a robot, you actually call them a forklift or you call it a washing machine.

• 3:04:35John Coogan?

  Oh, that's a great.

• 3:04:35Speaker 13

  And it's when that technology diffuses into the background and you just focus on what is the application. So that's how I look at it through kind of the product lens as opposed to the technology lens.

• 3:04:44John Coogan?

  Yeah, yeah, I was, I was, you know, you see these demos of humanoids loading washing machines. And I've been thinking in the back of my head every time I'm interacting with my washing machine. Like, is it time just for a ground up, first principles rebuild of what a washer and dryer stacked is? Like, if you constrain it to like, you have this dimension, but now you have all the modern technology. And your goal is to just take in dirty clothes and put out clean clothes. Like, can you do something better than just a big tumbler and then another tumbler? One with water, one without. And I'm excited by that. Is the implication of that, that almost you would be open to talking to entrepreneurs who are maybe thinking a little bit narrower, thinking a little bit smaller, at least in the interim?

• 3:05:27John Coogan?

  And then, how would you guide someone towards long-term messaging around their company? If they are finding a wedge, but then they want to grow at some point?

• 3:05:39Speaker 13

  Yeah, so I think it is exactly what you just described, which is, and again, the sort of the applications do matter here. But the notion that you would start with something that is, let's call it sort of big enough to matter, but small enough to win.

• 3:05:53John Coogan?

  Yeah.

• 3:05:53Speaker 13

  And in hardware technology, being more focused is actually a huge advantage, a huge point of leverage. And so, and then, as you continue to build, you want, you want to be able to access larger opportunities in markets. And so, I really do believe that that is the way you get started with hard technologies and hardware in particular. I think there's another thing that we do, and I will just say this kind of brings it to Cerebras again for a minute, which is, we look at, we look at workloads. And so, one of the reasons why we backed Andrew and Gary and Sean and team back in 2016, was it was quite clear, and we saw this through the lens of our portfolio, that the AI workloads, at that time it was more ML, they were ramping very, very steeply.

• 3:06:39Speaker 13

  And whenever you see computing workloads that are doing something new and different, and this, you know, you're talking about in the robotics context, and we'll get to that in a second. But when you see a workload that is spiking hard, there's often an opportunity to basically replace the compute layer. In other words, there's often sort of purpose-built silicon that should exist here. And so, in the case of personal computers, very clear. Serial programming and you were very well suited to the x86 platform. It was actually something we saw go on and on for decades. As soon as you started to see the need for much better graphics, of course, you would build a graphics processing unit.

• 3:07:19Speaker 13

  That's really good at rendering graphics, at doing floating point math, at managing lots of multiple cores. And then, of course, take the mobile era and then you say, okay, wait a minute, what's going on here? I need low power. I need a smaller form factor. And so when you look at these workloads, oftentimes there is this sort of transformative opportunity. And that's exactly what we saw in 2016 was, wait a minute, like, there should be purpose-built silicon for this ML and AI workload. At first, of course, we started with training, back to your point around how you start small. And then, seven years in, was actually a board meeting when Sean, one of our co-founders, said, we got to go after inference. It's just, it's exploding.

• 3:08:01Speaker 13

  And so, again, to this point, you start small and then rotate towards the much larger opportunity.

• 3:08:06John Coogan?

  Yeah, I mean, we talked to Andrew about all the ups and downs. A classic overnight success with tons of moments of intense tumult. But I'm curious about, were you ever worried or hesitant that the company might narrow down too much? And because you've heard, like, YouTube has custom silicon for video encoding. And there was probably an opportunity at some point to narrow the focus even more to do chip development for one specific company, be less generalized and maybe ramp the revenue a little bit faster. But was there a tension there that you were observing and like, how did you get through those moments?

• 3:08:47Speaker 13

  The primary tension that relates to your question was probably around making sure we would not silo ourselves into use cases that were traditionally just high-performance computing use cases.

• 3:08:59John Coogan?

  Sure.

• 3:08:59Speaker 13

  So those workloads are valuable and those markets are actually still relatively interesting. But they're not growing anywhere close to the rate of the inference and specifically the reasoning part of inference, where you start chaining workloads together. So we worried a little bit about that being a niche that was not interesting enough for us to build a really nodal company.

• 3:09:23Speaker 13

  If I zoom back from that and you ask sort of what are the things we really worried about in those early scary days? I mean, there were, I don't know if Andrew shared this, and there were like five startups worth of hard problems for us to go after. I mean, I mean, it was absolutely, there were moments, I was joking with one of the other founders last night, where you would, you would come back from a board meeting and you weren't quite sure whether we were going to figure out our way through a very fundamental, you know, thermodynamics challenge.

• 3:09:48John Coogan?

  Okay, so when you say five problems, you're not talking about fundraising, hard negotiation with TSMC, talking to your supplier?

• 3:09:57Speaker 13

  All of that too, all of that too. All of that true. I'm talking about the actual hard problems, meaning hard technology problems.

• 3:10:03John Coogan?

  Yeah, yeah, yeah.

• 3:10:04Speaker 13

  And, you know, the ones that are sort of more physical, where you have laws of physics and thermodynamics to obey, and you don't get to negotiate. Andrew's a very good negotiator, but he's also learned that he can't negotiate with the second law of thermodynamics.

• 3:10:17John Coogan?

  Yeah.

• 3:10:17Speaker 13

  So, no, these were, this was, how do you yield a semiconductor that's the size of a dinner plate? How do you power it? How do you cool it? How do you maintain continuity across thousands of connections? How do you put it in a system and integrate it and then in a data center and then put 65 of or 64 of them in a data center together? So it was those kinds of very hard challenges where I say five startups in one. And they were, of course, also stacked, which means that the risks are now combinatorial.

• 3:10:43John Coogan?

  Yeah.

• 3:10:43Speaker 13

  So even more dangerous.

• 3:10:45John Coogan?

  So you've been through taking companies public, you know, being involved with public companies several times. A lot of times, the founders that you're backing, it's their first time becoming a public company. What are you telling them? What advice can you share with a founder, not Andrew specifically, but any founder who's going public? How will the company change? What are you telling them as they become the CEO of a public company?

• 3:11:13Speaker 13

  Yeah, so there's a few things that come to mind. One is buckle up because it's going to be particularly in markets like the one we're in right now where, I mean, you see the headlines change every few days. I mean, there'll be another drop of another model tomorrow that could, you know, whatever, upend the public markets.

• 3:11:32John Coogan?

  Yep.

• 3:11:33Speaker 13

  And so you don't have a lot of control over what the world thinks about your share price. And so you've got to coach your teams and your engineers in particular to know that like when the share price is moving, it very often has nothing to do with what you're doing in the day to day. And you just need to steel yourself against that. I think there's also a piece which is you just have to grow up. Like there's a cadence to these businesses, quarterly unfortunately, I wish they were longer, where, you know, Andrew and Bob are going to hop on an earnings call very soon and they're going to have to start talking about the business of the business, not necessarily the technology of it.

• 3:12:14Speaker 13

  And that requires a level of discipline and planning that oftentimes founders don't have their stuff together well enough in order to be able to sort of manage through that transition. And then the last thing I would say is actually the flip of it, which is don't forget what made you special. Because when you get into this quarterly cadence and you start to think, well, how do I meet the next quarter? You oftentimes lose sight of the long horizon that was the larger opportunity for you to go after, you know, not just, you know, the opportunity right in front of you, but there's much, much larger opportunities. And we're, you know, building systems for the next gen and the gen after that and the gen after that.

• 3:12:57Speaker 13

  And so you can get tricked into being in a kind of quarterly mindset. And it's one of the most toxic ways to kill a company that's built around innovation. So you just want to, you want to make sure that, you know, there's that horizon that's still calling, that's where we need to go.

• 3:13:13John Coogan?

  I love it. Thank you so much for coming on and breaking it down. Sorry for running long. I'll let you get to the celebratory dinner, say hello to everyone and have a great day.

• 3:13:22Speaker 13

  Awesome. Thanks so much.

• 3:13:23John Coogan?

  We'll talk to you soon. Have a good one. That's our show, folks. Leave us five stars on Apple Podcasts and Spotify. Another one. Sign up for our newsletter at tbpn.com. See you tomorrow at 11 a.m. Pacific time and have a great rest of your day. Goodbye.