Weekly Recap: GPT-5, Apple Sitting on $100B, Disney Enters The AI Race, Marc Andreessen

(00:00) - Intro (00:04) - Microsoft Cloud Outpaces AI (23:08) - Disney’s AI Dilemma (37:18) - What Apple Should Do with $100B Share Buyback (49:37) - Howard Stern Canceled After Decades On Air (53:51) - OpenAI Releases Open Source Model (01:05:45) - Marc Andreessen (a16z) (01:41:13) - AI Model Whiteboard Breakdown (01:57:19) - GPT-5 Review Ft. Rahul Sonwalkar (Julius AI) TBPN.com is made possible by: Ramp - https://ramp.com Figma - https://figma.com Vanta - https://vanta.com Linear - https://linear.app Eight Sleep - https://eightsleep.com/tbpn Wander - https://wander.com/tbpn Public - https://public.com AdQuick - https://adquick.com Bezel - https://getbezel.com Numeral - https://www.numeralhq.com Polymarket - https://polymarket.com Attio - https://attio.com/tbpn Fin - https://fin.ai/tbpn Graphite - https://graphite.dev Restream - https://restream.io Profound - https://tryprofound.com Follow TBPN: https://TBPN.com https://x.com/tbpn https://open.spotify.com/show/2L6WMqY3GUPCGBD0dX6p00?si=674252d53acf4231 https://podcasts.apple.com/us/podcast/technology-brothers/id1772360235 https://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 TVP.

• 0:04John Coogan?

  Microsoft's blockbuster earnings last week, they blew out earnings. It was very exciting. They cemented its status as one of the biggest winners in the artificial intelligence boom. We knew this Satya had carved out just a massive amount of territory. GitHub Copilot, first real major breakthrough product that was monetizing on top of GPT 3.5. Great product, obviously led by Nat Friedman when he was there.

• 0:28Jordi Hays?

  Last we heard it was at around half a billion in ARR.

• 0:31John Coogan?

  Something like that.

• 0:32Jordi Hays?

  Two months ago, so it's probably in the billions now.

• 0:34John Coogan?

  Yeah, probably bigger. And then the crazy OpenAI deal, they got in very early. They have this massive revenue share. They have an ownership. They get a copy of any software that OpenAI writes basically or requires. That's kind of crazy. And so.

• 0:47Jordi Hays?

  Satya did seemingly one of the best deals of all time for Microsoft.

• 0:52John Coogan?

  Potentially, yeah. I think so. It's hard to, I mean, it's an awkward situation now. And it's, and it's a really hard decision.

• 0:59Jordi Hays?

  Sam is, you know, renegotiating the deal.

• 1:02John Coogan?

  Yep. And Ben Thompson was noodling on this, like, should they take the money now? Or should they play it more like a venture style bet? What is the role of the CEO of a $4 trillion public company? Where the shareholders have different expectations. They're not seeing, if you hold Microsoft stock, you're not feeling like you're an LP in a venture fund.

• 1:21Jordi Hays?

  Yeah.

• 1:22John Coogan?

  So if, if the CEO comes to you and says, hey, look, we're taking the cash flow now. We're going to dividend some of this out. We're selling down the position. We're, we're, we're thinking strategically about this as opposed to just, we want the IS multiple. We want to ring the gong on the deal. That could be reasonable. So obviously we're, we're tracking where that goes. But they also have Clippy, generational precursor to potentially all the AI agents, the original AI agent, Clippy, potentially make a comeback.

• 1:50Jordi Hays?

  The original super intelligence.

• 1:51John Coogan?

  The original super intelligence and very fortunate.

• 1:54Jordi Hays?

  First time they had to move the goalposts, right?

• 1:56John Coogan?

  This is why we're worried about getting paper clipped. Because Clippy will become too strong. I mean, with the power of OpenAI and Microsoft Azure, anything's possible there. So anyway, outside the AI race, Microsoft is minting money from corporate customers spending on regular technology, long a sweet spot for the company. Many companies are shifting from buying their own IT equipment to renting it from Microsoft through its cloud computing service. They are also renting more standard issue computing stuff, hard drives for data storage, for example, to support their AI efforts. And so this is the key stat from the earnings call that the Wall Street Journal is highlighting, and then we'll kind of dig into this number and what it means, because there's a lot of different explanations for what could be going on. But Microsoft, the CFO and CEO,

• 2:38John Coogan?

  didn't necessarily give all the context that we'd like to set this definitively, but I think there's some really good theories floating out there. So the quote from the Wall Street Journal is, "A large chunk of the recent strong growth in Microsoft's cloud business called Azure stems from that. More than half of Azure's 33% revenue jump in the company's March quarter came from non-AI services." While the company didn't give a comparable breakdown, a comparable breakdown of the cloud unit's 39% growth in its June quarter, it said that the core infrastructure business, Microsoft's lingo for its non-AI cloud business, was the driver. Jordy?

• 3:18Jordi Hays?

  Massive win for enterprise SaaS, just good old fashioned SaaS. There we had some theories.

• 3:24John Coogan?

  No, no, no. So this is the thing. It's not SaaS.

• 3:25Jordi Hays?

  Yeah.

• 3:26John Coogan?

  They're not selling SaaS.

• 3:27Jordi Hays?

  So it's people migrating from on-prem to traditional cloud.

• 3:30John Coogan?

  It's what's called infrastructure as a service.

• 3:31Jordi Hays?

  Yeah.

• 3:32John Coogan?

  So there's software as a service. That's when you go and get Teams, or you go and get a subscription to Excel in the cloud, or Outlook in the cloud. That's software as a service.

• 3:42Jordi Hays?

  I was saying, I was saying more traditionally, someone else building.

• 3:45John Coogan?

  Yes, yes. Using it as infrastructure as a service. Then there's also platform as a service. That's like Heroku on AWS, where you go and you deploy an app. You could think of maybe even like a Replit as like a platform as a service almost, where they're hosting you, but they're not just providing you the raw infrastructure. Azure's Azure's core infrastructure business is essentially infrastructure as a service. IaaS is the term. And that means, oh, you want some CPUs and some hard drives and some Ethernet cables and moving stuff around data transfer.

• 4:18Jordi Hays?

  You had an interesting thesis offline earlier. You comped it to people in the internet era, buying a compute. They hear about the internet. They're like, hey, I think this might be a thing. I should get a computer.

• 4:28John Coogan?

  Yes, yes.

• 4:29Jordi Hays?

  Buy a computer.

• 4:29John Coogan?

  Yes.

• 4:29Jordi Hays?

  And now you could see something, you know, where companies say, hey, this AI thing might be big. We should get on the cloud.

• 4:38John Coogan?

  Yeah, yeah. You want to set yourself up for it. And I think if you have a whole bunch of data in some sort of on prem, you know, you have a data center for all of your data in a bunch of hard drives. And you have CPUs that can do the do different workloads and data workloads. And maybe you're using some SaaS on top of that. But you realize that you're never going to be in a position to buy a hundred thousand H100s. And you're going to wind up being a leaser of that for some small fine tuning run.

• 5:08Jordi Hays?

  Other people's application layer.

• 5:10John Coogan?

  Totally, yeah. And so the integration that comes from being in the Azure ecosystem, that could be a driver. There's a few others. When I think about the the core, the the AI Azure services, I think of that almost as, you know, it is SaaS. Like if they're if they're if you go to Azure and you say, I'd like to, you know, put my credit card down and I want to be able to use the GPT four API. And I also want to be able to use Lama three. And I also want to be be able to use DeepSeek. And I want to be able to call all these APIs within my within my product. I almost think of that as tokens as a service. Like it is SaaS, but it's something else. And I think these token factories, I think this idea of how much revenue are you generating from your token generation business?

• 5:54John Coogan?

  Is really what we're talking about when we when we talk about Azure's, you know, core AI products. Versus the infrastructure. But there's a bunch of interesting wrinkles that could be going on within the classic, you know, core infrastructure business. So this, of course, is. Virtual machines, you just want a Linux box with a CPU to host a website. That's something that you do on Azure. Storage, networking, okay, I want to store all my data. You could go to AWS and store it in S3. You could go to Google, store it in BigQuery. You could also go to Azure and fire up any sort of storage database or just, you know, raw, uh, raw hard drives. Uh, and then networking, moving stuff around.

• 6:37John Coogan?

  So this is the infrastructure as a service versus tokens as a service. They're higher, higher level AI APIs. But so GPUs are, uh, so the question is like, why is there infrastructure as a service growing faster than their tokens as a service product? You would think that Microsoft is going to their enterprise clients and saying like, you need to build AI, you need to bring AI into your products. And we have all the best APIs, so just buy tokens from us. And you would think that that would be the boom.

• 7:07Jordi Hays?

  Well, couldn't the other factor here be that they are massively supply constrained on the GPU side?

• 7:12John Coogan?

  Yep.

• 7:12Jordi Hays?

  And they have this, you know, multi

• 7:15John Coogan?

  Yes.

• 7:15Jordi Hays?

  tens of billions or hundreds of billions of dollars of backlog that they can't fulfill.

• 7:19John Coogan?

  Yep.

• 7:19Jordi Hays?

  Meanwhile, they had a, you know, more kind of like predictability on the, the traditional data center cloud side that they were able to scale up to.

• 7:28John Coogan?

  Yep.

• 7:28Jordi Hays?

  So that feels like a, uh, potentially like a pretty big driver here.

• 7:33John Coogan?

  Yes, definitely.

• 7:34Jordi Hays?

  But still shocking.

• 7:35John Coogan?

  And so, and so as companies come out and they say, okay, we are, we are scaling our, our, you know, hardware and software foot, our technology footprint broadly. Going into this AI era, we're excited about this stuff. Well, we're also going to need more databases. We're going to need to put more data in those databases. We're going to need more CPU workloads. We're going to need more of everything. And Microsoft's like, yeah, of course, we can definitely get you a whole bunch more hard drives and a whole bunch more CPUs. We're not constrained on that at all. And the capex is keeping up, so they're able to service that. There's also an interesting thing where tons of AI stuff can technically be happening inside the core infrastructure bucket. You just don't necessarily know what, what's in there.

• 8:18John Coogan?

  So, um, some examples are like, if you're, you, let's say you're a pure AI. AI company, or you're doing, or you have a new AI workload, you could go to Azure and say, hey, I'm gonna do a whole, I'm gonna do my own AI thing. But I need a ton of storage for data, because I'm going to be training on it. I'm gonna need a bunch of networking to move that data around when I do a training run. So that could be driving core infra up. And then also, if a bank hypothetically spins up a huge cluster of H100 GPU virtual machines to fine tune an open source model like Meta's Llama 3, this would show up as core infrastructure, not Azure AI services. And so that's like textbook AI boom, but it's just happening in the, in the wrong bucket.

• 9:01John Coogan?

  And then I also saw a post that potentially ChatGPT counts as Azure core infrastructure. Because they're not, they're not serving ChatGPT through the Azure AI API. It's not this like snake eating its tail or a boros. It's like OpenAI just came and said, give us a whole bunch of.

• 9:20Jordi Hays?

  Headline itself ends up becoming pretty misleading.

• 9:24John Coogan?

  Exactly.

• 9:24Jordi Hays?

  Because, and again, this is, this was probably, you know, a lot of people were reading into AWS's

• 9:33Jordi Hays?

  growth, you know, the reports that, you know, Andy or the comments Andy had given on AWS last week. And the big thing that AWS is missing is having a ChatGPT building on top of

• 9:45John Coogan?

  Yeah.

• 9:46Jordi Hays?

  AWS, right? There's no dominant consumer product, at least at that scale. ChatGPT, I think the, as of this morning, somebody was estimating getting to a billion weekly actives this year, which again, those types of products don't, you know, the, the power law is like extreme, right?

• 10:08John Coogan?

  So, yeah, so if you, I mean, I, I believe Anthropic is pretty tightly hitched to Amazon, and I think the next big cluster from Anthropic will be powered by Amazon for the most part. And so they're getting there, certainly on the, if they're building all the, all the infrastructure.

• 10:23Jordi Hays?

  Yeah, but again, that would show up on, on. Token generation side, like more of the

• 10:30John Coogan?

  No, no. So if Anthropic goes to AWS and says, we want you to build a huge data center to serve Claude code for us. That's going on, that's going on in infrastructure.

• 10:39Jordi Hays?

  Yeah, got it.

• 10:40John Coogan?

  Not actually APIs. But when you go to AWS and you're just some random company and you say, I need a database and I need some storage and I need a web server and I also need a bunch of tokens from whatever model you can serve me. And they're like, we got Claude. And then you're like, yeah, let's pull the Claude tokens into my app.

• 10:56Jordi Hays?

  It's a good model.

• 10:57John Coogan?

  That's token as a service. What?

• 10:58Jordi Hays?

  It's a good model, sir.

• 11:00John Coogan?

  It's a good model, sir. Exactly.

• 11:01Jordi Hays?

  One thing that stood out to me, that has stood out to me across this year with Microsoft is they've done more layoffs this year than the past three years before that combined. So 2022, 2023 and 2024.

• 11:17John Coogan?

  That's crazy.

• 11:17Jordi Hays?

  So this just shows the level that Satya is operating at is like the company has been on a tear this year, you know, performing exceptionally well. And he's still thinking about how do we get more and more fit? And

• 11:31John Coogan?

  Yeah.

• 11:31Jordi Hays?

  So.

• 11:32John Coogan?

  So, to be clear, literally every piece of Microsoft business is growing at a very, very solid clip. So Microsoft 365 commercial cloud business, which houses remotely accessed versions of Word, Excel, other productivity software, that grew at 16% from a year earlier. So that's, I mean, that's like, it's not the most insane growth rate, but that's still crazy because you think about like, who doesn't have Excel that needs it? Like, who are these people who are like, you know what? 2025 is the year that my company is getting on Excel. We're doing it.

• 12:04Jordi Hays?

  Well, it's just crazy when you compare it to AWS growing at 19%. Obviously very different scales.

• 12:11John Coogan?

  Yeah, totally.

• 12:12Jordi Hays?

  You would think you don't want to be in the same ballpark as.

• 12:15John Coogan?

  And so that was the news of AWS. If you missed it, they beat earnings, they did very well, but they weren't growing as fast as the others, the other cloud platforms, Google and, and Microsoft. And so the Amazon stock traded down. And I mean, the narrative around AWS is different because Microsoft has OpenAI. Microsoft Research and has GitHub Copilot and is like really moving things forward in the AI world. And Satya is seen as someone who goes in the DoorDash podcast and talks about AI. And it's clearly like really on top of it where and and obviously Google has Gemini and a million different products and and and strategies around rolling that out and staying on the frontier.

• 12:58John Coogan?

  I mean, they have a frontier lab internally and Amazon's just not there either on the partnership side or on the core like training frontier lab side. And so it's a little bit, it's a little bit of both. Uh, anyway, let me tell you about Figma. Think bigger, build faster. Figma helps design and development teams build great products together. We had a great week in New York celebrating Figma and the IPO. Stock's been up, stock's been down, uh, wild ride, but we are still very happy to be partnered with Dylan Field and the Figma team. And I'm

• 13:29Jordi Hays?

  It was truly

• 13:30John Coogan?

  excited to see what happens next because

• 13:32Jordi Hays?

  Truly, it was Thursday was such such an incredible day. Just getting the, uh, if you didn't get a chance to listen, we talked with every the seed lead investor uh, all the way through, uh, of course, Andrew Reid, who led the C.

• 13:45John Coogan?

  Yep.

• 13:45Jordi Hays?

  Um, and then capped it off with Dylan and also got to speak with Lynn Martin, President of New York Stock Exchange, as well as Chris, the, uh, CTO of Figma. So, uh, really incredible day and, uh, it's just, um, very proud of the Figma team.

• 14:01John Coogan?

  Yeah, it was awesome. In one sense, investors might prefer to see AI businesses driving growth. That, after all, is what has driven the company's valuation through the roof. But tech companies' stocks arguably hinge on too much on AI. To the extent that they can keep increasing other revenue streams, they are on more solid financial ground. Of course, none of that means anything if all of the growth is coming from OpenAI. But at the same time, does anyone really think ChatGPT is, uh, is Yahoo anymore? Like, like, you know, they're, they're generating what a billion dollars a month in revenue at this point? Everyone uses the app. It's installed everywhere like that, that, that token demand is not going anywhere. That infrastructure demand is not going anywhere. So.

• 14:43Jordi Hays?

  On the other side, Amazon is down.

• 14:48Jordi Hays?

  Just over 9% since Thursday.

• 14:50John Coogan?

  Since Thursday.

• 14:51Jordi Hays?

  Earnings. And then this morning, unrelated, they announced that they're shutting down Wondery, the podcast studio.

• 14:59John Coogan?

  Really?

• 14:59Jordi Hays?

  They acquired in late 2020.

• 15:00John Coogan?

  Wait, why did Amazon, why did, the market's way up. Wow. Nasdaq's up 1.8% today after a brief sell-off on Friday. Good news.

• 15:10Jordi Hays?

  Bear market is over.

• 15:11John Coogan?

  Yeah, we were so over, but we're already so back. It's fantastic.

• 15:14Jordi Hays?

  Love when it happens.

• 15:15John Coogan?

  Markets go up, markets do go down, but the march of technological progress, the arrow points in but one direction.

• 15:23Jordi Hays?

  That's right.

• 15:24John Coogan?

  And its march is relentless. There is another silver lining for Microsoft. Non-AI sales can be substantially more lucrative than AI ones. Non-AI gross margins within Azure were around 73%. Wow. That compares to, that compares to 30 to 40% gross margin for AI. He estimated because of the huge cost of setting up AI infrastructure, that makes sense. You get more margin on just a bunch of CPUs and databases that you've harnessed and built everything around. Also, you know, you still have that interesting dynamic where it seems like all of the cloud, the hyperscalers, like, don't really compete on price because they're all pretty comparable, but they seem to all have really good margins.

• 16:01Jordi Hays?

  Coca-Cola dynamic.

• 16:01John Coogan?

  That's what it seems like.

• 16:02Jordi Hays?

  Yeah.

• 16:03John Coogan?

  I'm not exactly sure if there's something else that's more fundamental going on.

• 16:08Jordi Hays?

  And the Coca-Cola dynamic is like, I don't know if we, it's hard to tell what conversations were off-air, on-air.

• 16:14John Coogan?

  Break it down.

• 16:15Jordi Hays?

  But John last week, forget when, was describing how you would think that Coca-Cola or Pepsi would decide to get aggressive on price to try to gain market share and get people to switch. But ultimately, that would just lead to a price war with both companies, you know, massively eroding their, their, you know.

• 16:37John Coogan?

  Margins.

• 16:37Jordi Hays?

  Margins and then.

• 16:38John Coogan?

  Did all be RC Cola coded then?

• 16:41Jordi Hays?

  Yeah.

• 16:42John Coogan?

  Every, yeah, every.

• 16:44Jordi Hays?

  So if you have a fierce competitor, consider entering. An unspoken gentleman's

• 16:51John Coogan?

  That's the

• 16:51Jordi Hays?

  Maybe a gentleman's agreement.

• 16:52John Coogan?

  It's not, it's not even a gentleman's agreement. It's not, it is unspoken, but it is

• 16:57Jordi Hays?

  Just good business.

• 16:57John Coogan?

  It is a nature, it is a natural game theoretic Nash equilibrium. Like it is the natural state of things that both sides understand that to go to war would be mutually assured destruction. And so they don't even need to talk about it. And so instead they both agree to keep prices where they are and instead compete on marketing. Compete on marketing, really.

• 17:18Jordi Hays?

  Yeah.

• 17:18John Coogan?

  Yeah. I mean, they don't form, they don't reformulate that often. They mostly compete on, on, on marketing. Um, and that allows them to have this like continually compounding business. And that's why it's in the, the Warren Buffett portfolio. Coca-Cola, he's been in there for a long time and Pepsi's been doing well too.

• 17:34Jordi Hays?

  And he was a DAU of course.

• 17:35John Coogan?

  He was a DAU of Coke.

• 17:37Jordi Hays?

  Still.

• 17:38John Coogan?

  Diet Coke or Coca-Cola? I think Coca-Cola.

• 17:41Jordi Hays?

  No, Diet Coke.

• 17:41John Coogan?

  Oh, he's a Diet Coke guy? I feel like he was a Coca-Cola guy.

• 17:45Jordi Hays?

  Warren?

• 17:45John Coogan?

  Yeah. Look that up. I want to know. Anyway, I'll keep reading from this Wall Street Journal report. Luckily for, uh, Microsoft, demand for lucrative non-AI services appears to be reasonably strong. Measures of broad IT spending. There we go. You know why?

• 18:00Jordi Hays?

  Regular Coca-Cola guy.

• 18:01John Coogan?

  You know why? It's because it has corn syrup in it. It's literally corn grown from mother nature, from the earth. And then syrup, it's what you put on pancakes. Like it's the most wholesome combination of, of foods you could imagine. maize, this is something that's been grown in America for generations, for centuries.

• 18:22Jordi Hays?

  Corn is so popular in Nebraska, right? It's grown everywhere. It's culturally insignificant.

• 18:27John Coogan?

  And the syrup that you put on pancakes, it, it's the most American, most wholesome ingredient. It's not this like refined sugar, this crazy stuff from somewhere else. No. It's American.

• 18:37Jordi Hays?

  American. Corn syrup.

• 18:39John Coogan?

  There's nothing, it's Lindy. Corn syrup.

• 18:41Jordi Hays?

  Yeah. Seed oil, seed oil, seed oil haters are in disbelief.

• 18:45John Coogan?

  Shambles that, that we need to return to corn syrup. None of this, uh, none of whatever's in this Coke syrup.

• 18:54Jordi Hays?

  Yeah, your grandpa was was drinking corn syrup.

• 18:57John Coogan?

  Yeah. Oh, and it's too good for you because you read a couple of posts on X.com. Think you understand something better than corn, delicious corn, corn on the cob. Something you have on a barbecue. Oh, now it's too good for you. Can't possibly have corn. What's next? No apple pie? What's next? No, no rotisserie chicken?

• 19:18Jordi Hays?

  Somebody is gonna listen.

• 19:19John Coogan?

  Turkey on Thanksgiving.

• 19:20Jordi Hays?

  Somebody's gonna listen to the show for the first time today and just go raging DMs for you promoting corn syrup consumption.

• 19:28John Coogan?

  It's it's as American as apple pie. And Warren Buffett knows best. He's doing great. End of one study, sort of a Brian Johnson.

• 19:37Jordi Hays?

  Yeah.

• 19:37John Coogan?

  He's sort of the Brian Johnson.

• 19:38Jordi Hays?

  He's the original Don't Die.

• 19:40John Coogan?

  Yeah. And he's been doing fantastically on that front.

• 19:43Jordi Hays?

  Yep.

• 19:43John Coogan?

  He's great. Anyway. Measures of broad IT spending were fairly muted at the start of the year as companies ponder the impact of Donald Trump's tariffs and concerns bubbled about the health of the global economy. Attitudes appear to have improved somewhat in the second quarter, though a UBS survey of cloud computing customers in July showed a clear improvement in tone about spending. Most were moving forward with efforts to migrate computing work to the cloud. They're like, this internet thing is real.

• 20:14Jordi Hays?

  It's real.

• 20:14John Coogan?

  We gotta put the data in the cloud.

• 20:17Jordi Hays?

  We held back as long as we could.

• 20:19John Coogan?

  We could, but it's 2025. We have no more excuses. The tariffs, it's come and gone. Now's the time.

• 20:26Jordi Hays?

  We were resisting the 21st century.

• 20:28John Coogan?

  Yeah.

• 20:29Jordi Hays?

  But we're a quarter of the way through.

• 20:30John Coogan?

  Put the data online.

• 20:31Jordi Hays?

  It's not going away.

• 20:32John Coogan?

  So let's let's use the computer in the online, in the cloud.

• 20:36Jordi Hays?

  Put the docs in the cloud.

• 20:37John Coogan?

  Put it in the cloud.

• 20:37Jordi Hays?

  Just put the docs in the cloud.

• 20:40John Coogan?

  Put the fries in the bag. Anyway, then put your compliance process on Vanta. Automate compliance, manage risk, improve trust. Vanta's trust management platform takes the manual work out of your security and compliance process and replaces it with continuous automation, whether you're pursuing your first framework or managing a complex program. In the longer term, there is little question that cloud computing is going to grow in ways that play to Microsoft's strengths. Its rivals, mainly Amazon.com and Google, are growing quickly too, but don't have all of Microsoft's broad corporate software offerings that enhance its cloud footprint. Even outside of AI, Amazon on Thursday said its cloud unit grew at 17 and a half percent in the June quarter, disappointing investors and forcing. CEO Andy Jassy to answer questions, uh, to answer, uh, questions about Azure's outperformance.

• 21:25John Coogan?

  Why are you getting beaten? You created this category. You created this product. Why is Sachin Adella?

• 21:30Jordi Hays?

  You are cloud.

• 21:31John Coogan?

  You are the cloud. You are the cowboy of the cloud and you're getting, you're getting put out to pasture.

• 21:38John Coogan?

  Recent quarterly earnings in Azure's favor were really just moments in time, he said.

• 21:43Jordi Hays?

  Chart, John.

• 21:44John Coogan?

  The, uh, oh yeah. Wow. That's worse than I thought. I wasn't sure we had that pulled.

• 21:50Jordi Hays?

  I mean, it would have been hard to predict five years ago that we'd be sitting here with, with Microsoft at four trillion and, and, uh,

• 22:00John Coogan?

  We're saying it's on it.

• 22:01Jordi Hays?

  I think 2.2 trillion.

• 22:04John Coogan?

  2.2.

• 22:06Jordi Hays?

  2.27.

• 22:07John Coogan?

  2.27. Okay. So almost double.

• 22:10Jordi Hays?

  Still magnificent, but.

• 22:12John Coogan?

  Still magnificent, but you gotta keep fighting. Gotta keep fighting. Uh, the company's stock fell 8% for I didn't, it looks like it's still sliding.

• 22:20Jordi Hays?

  Down even more.

• 22:20John Coogan?

  The question for Microsoft's investors then is less about the, its prospects than its valuation. The company's stock is up nearly 40% since the beginning of April, pushing its forward price earnings multiple above 33. That's a bit richer than Amazon and a large margin above Google, which is trading at a multiple of roughly 18 times. That should be easier for investors to digest because while Microsoft's AI growth is real, it is far from the only thing going right at the software giant because they got Excel. They got core infrastructure. They got AI APIs. They got tokens as a service. Infrastructure as a service and software as a service. They got the royal flush. It's going well over at Microsoft.

• 23:02John Coogan?

  They won't need to call McKinsey, but maybe, maybe Amazon.com will.

• 23:08John Coogan?

  My question, is AI a sustaining innovation for Disney? Or is it a disruptive innovation? Where will Disney be in 10 years in the medium term? Obviously, you're going to be able to generate a lot of AI slop. You might be able to infringe on their IP. They might get paid by Google VO. When you generate a Mickey Mouse AI slop edit, they might get a couple pennies. But will it be good or bad for them?

• 23:37Jordi Hays?

  Children's, you know, I could see them making a product that allows you to make a, you know, book or a story for your kid that actually, you know, and they get, they get some type of revenue.

• 23:48John Coogan?

  They should get revenue and I think that they will through the courts, especially because as like big companies, like you're not so, it's not this crazy. Oh, there's like a bunch of kids doing random things like they never had to go after the, the street artist on Venice Beach that would draw a picture of Mickey Mouse and sell it to you for 20 bucks. They, that was never material to their business. They had to go after Napster. They had to go after Spotify.

• 24:14Jordi Hays?

  I went to Venice Beach.

• 24:15John Coogan?

  Yes.

• 24:15Jordi Hays?

  I got them to draw me as Mickey Mouse.

• 24:17John Coogan?

  Really?

• 24:18Jordi Hays?

  And then I performed a citizen's arrest because I respect IP. I'm an IP respecter.

• 24:23John Coogan?

  Yes, yes, yes. Citizen's arrest is underrated.

• 24:26Jordi Hays?

  Citizen's arrest.

• 24:27John Coogan?

  Citizen's arrest. You're going to jail, buddy.

• 24:30Jordi Hays?

  This is for Bob.

• 24:31John Coogan?

  This is for Bob Iger. Yeah. So, big question. This feels like a moment where you want to be in founder mode. Bob Iger is one of the greatest CEOs of all time. How will he navigate this? The Wall Street Journal says, is it still? He's not the founder. The founder died in 1966, Walt Disney.

• 24:45Jordi Hays?

  But you're claiming that he's still.

• 24:47John Coogan?

  He might be able to turn it on. Satya Nadella certainly was able to do it. He's, he's navigating the AI, the AI shift flawlessly. We'll see what happens with Bob Iger and Disney. Wall Street Journal says, is it still Disney magic if it's AI? The stakes are especially high for the studio caught between how to use artificial intelligence in the filmmaking process and how to protect its famed characters against it. So there's a little anecdote that we'll kick it off with. When Disney began working on its new live action version of its hit cartoon, Moana, executives started to ponder whether they should clone its star, Dwayne Johnson. The actor was reprising his role in the movie as Maui.

• 25:26Jordi Hays?

  Barrel-chested demi-god.

• 25:29John Coogan?

  Have you seen Moana? No, you have not. Of course, we know this. For certain days on set, Disney had a plan in place that wouldn't require Johnson to be there. All under the plan they devised, Johnson's similarly buff cousin, Tanoa Reed, who is six foot three, 250 pounds, would fill in as a body double for a small number of shots. Disney would work with AI company Metaphysic to create deep fakes of Johnson's face that would be layered on top of Reed's performance in the footage, a digital twin, essentially, digital double, that effectively allowed Johnson to be in two places at once. Obviously, that's better.

• 26:02Jordi Hays?

  calls up his cousin, "You want a job? I need you to be me."

• 26:06John Coogan?

  Yeah, hit the gym, buddy.

• 26:07Jordi Hays?

  Yeah.

• 26:08John Coogan?

  Better be jacked.

• 26:09Jordi Hays?

  Get on a cycle.

• 26:11John Coogan?

  But yeah, I mean, these, these, uh, these movie schedules are famously tight. Three months in and out, crazy schedules, and then you move on to the next one. There's that famous Henry Cavill story where he filmed Superman, rapped, moved on to another movie where he had to grow out a mustache. He grew out a mustache and a beard, and then they said, "Hey, we gotta do some reshoots. You gotta come back to Superman." And he came back, but he couldn't shave his mustache and beard, so they had to change it in, in CGI, and it looked terrible. Probably not a problem now with, with deep fakes. That's actually a good use of AI, and, uh, something that probably shouldn't be very controversial, but obviously, everything in AI is controversial right now. Um, but we will continue with Disney. They say, "What happened next was evidence that Hollywood's must-discuss,

• 26:54John Coogan?

  much-disgust, much-feared AI revolution won't be an overnight robot takeover. Johnson approved the plan, but the use of a new technology had Disney attorneys hammering out details over how it could be deployed, what security precautions would protect the data, and a host of other concerns. They worried that the studio ultimately couldn't claim ownership over every, uh, that the studio couldn't ultimately claim ownership over every element in the film if AI-generated parts were in there. So if there's AI training data from a- DreamWorks film in there and they use the DreamWorks training data to make a Disney film, even if it looks like Dwayne the Rock Johnson. DreamWorks might come knocking and say, hey, give us a royalty. I think that's the risk, but the lawyers are having fun, maybe. Full employment for lawyers over at Disney, clearly.

• 27:39John Coogan?

  Disney and metaphysics spent 18 months negotiating on and off over the terms of the contract to work on the digital double, but none of the footage will be in the final film when it's released next summer. They went and shot it. A deep fake Dwayne Johnson is just one part of a broader technological earthquake hitting Hollywood. Studios are scrambling to figure out how simultaneously they can use AI in the filmmaking process and how to protect themselves against it. Is it sustaining or disruptive or both? Can't be both, but we'll see. While executives see a future where the technology shaves tens of millions of dollars off a movie's budget, they are grappling with a present, with a present, present filled with legal uncertainty, fan backlash and a wariness toward embracing tools that some in Silicon Valley view as their next century replacement.

• 28:23John Coogan?

  And if you are trying to sell an AI tool into Hollywood, you gotta get on audio. Customer relationship magic. Audio is the AI native CRM that builds, scales and grows your company to the next level and you can get started for free. So the Academy of Motion Picture Arts and Sciences is surveying members on how they use the technology. Studio chiefs are shutting down efforts to experiment for fear of angering show business unions on the eve of another contract negotiation. And no studio stands to gain or lose more in the outcome than Disney, the home of Donald Duck, Belle, Buzz Lightyear, Stitch and countless others, which has churned out some of the most valuable and protected creative works in over the past century. So my take on this.

• 29:05John Coogan?

  So two years ago, I was hanging out with the founder of a very large generative AI image generation company. And he was telling me that by 2025, anyone with a laptop and an internet connection could generate a full Hollywood movie about anything they want with a single prompt. And it was a hilarious conversation because we were on a Zoom call and his internet wasn't working. And he was the classic example of like, the technology is amazing, but we got a lot of stuff to iron out. So anyway, extremely aggressive timeline, but obviously things are going to change for Hollywood. So my question is, will Disney benefit? It feels like a moment to be in founder mode, but Walt Disney died in 1966. So basically, everyone believes that Meta will benefit from AI, even if they miss the train on owning the next dominant consumer tech platform.

• 29:51John Coogan?

  But if Disney got really AI-pilled, what would that look like? I don't think they need to train their own foundation model, just like they don't need to train their own, they don't need to build their own cinema cameras. They can just use IMAX when they, the time calls for IMAX. They can use Blender when the time calls for Blender. They can use Houdini when the time calls for, when the, when, when the shot calls for some high level VFX.

• 30:13Jordi Hays?

  Yeah.

• 30:13John Coogan?

  But they do need to rethink how they structure their business and negotiate with unions and underwrite content. They might need to go more risk on, not just from a brand risk position, but taking more smaller bets. We're in this weird barbell world where everything seems like it's either a hundred bucks and it's shot on an iPhone. It's a viral like TikTok or it's a hundred million dollar blockbuster with like 50 million dollars of VFX. Actually, that's kind of a low number. It's usually like 300 million dollar production with 150 million dollar VFX. And then no one sees it and it's a flop, but then they, they hit every once in a while and they're great when they're good. But it's this weird like venture style betting at the high end, but there's nothing in the middle. And maybe that's like the death of the art house film. But I'm just wondering if in the age of AI, like maybe there's this interim step where Disney ladders down a little bit

• 30:58John Coogan?

  and gives like 10 filmmakers 10 million dollars each and says, hey, you still require to deliver a 90 minute full film, but you're doing it for 10 mil. And it's not quite Blair Witch level production, one notch up. You gotta be creative.

• 31:14Jordi Hays?

  I'm really, I'm really bullish, yeah, I'm really bullish on this idea that the,

• 31:21Jordi Hays?

  you know, historically, like a TV show would film a pilot episode and they would use that to get the budget to shoot an entire season. And you can imagine now, you could, you know, even for film, you can just make, you know, make the trailer ahead of time with AI. The other advantage that I think Disney has that's very real, just going in and why they're just broadly seem to be positioned very well here. Is that I think that I think that broadly like content customization will probably take off because you could Disney can make a film now and then you could make millions of different variations of it that become interactive with like the underlying fan. So like imagine

• 32:05Jordi Hays?

  you're watching Moana, but like your kid is in the film is a character in the film and you can now do that at scale, right? And how much more would you pay as a parent to have something like that?

• 32:15John Coogan?

  I have a funny story about this.

• 32:16Jordi Hays?

  But last thing I'd say, so customization and just like democratizing like like basically making making being able to make variations of films.

• 32:27John Coogan?

  Yep.

• 32:27Jordi Hays?

  I think is going to be big. I think just that the time it's the same way you it's it's so difficult to make a new luxury brand.

• 32:34John Coogan?

  Yep.

• 32:35Jordi Hays?

  It's so difficult to create. It's easy to create IP. It's hard extremely difficult and time intensive to create valuable IP and Disney's advantage is they have this sort of like 360 and that they can make a film and they can bring it to Disneyland. They can bring it to a cruise. They can create physical products around it. And so they develop IP in a way that that new entrants are not, you know, they don't have the benefit of like having a Disneyland where they can make new experiences that that increase the value of that IP. Right? So I think.

• 33:08John Coogan?

  So two things. One, if I were to go back, one of my favorite Disney properties is Star Wars, A New Hope, the very first film. If I went back and was like, let's customize that for me. I don't know that I would make any changes. Like, do I really want a scene where Han Solo breaks the fourth wall and says like, hey, John, like, I'm about to go, you know, save Luke at the Death Star. Like, that doesn't improve the product for me. I actually like that it's just the vision of George Lucas. So I don't know about

• 33:39Jordi Hays?

  But here's like

• 33:40John Coogan?

  customization being better for me. I don't know what I would change.

• 33:43Jordi Hays?

  But here's here's an example of how to make like a magical experience for a kid.

• 33:47John Coogan?

  Yeah.

• 33:48Jordi Hays?

  Like, imagine after a movie ends.

• 33:49John Coogan?

  Yep.

• 33:50Jordi Hays?

  A kid could interact with a character and ask it questions in real time, like about

• 33:57Jordi Hays?

  About the story or

• 33:59John Coogan?

  That's cool.

• 34:00Jordi Hays?

  Have a conversation with them and that's what I'm talking about, like bringing that IP to life.

• 34:03John Coogan?

  Totally. Right now that exists and I was obsessed with this when I was a kid. I would, I would, I would watch Star Wars and then I would read the, the, the books that in the expanded universe. And I remember even having books that were just like encyclopedias of every single ship. This, uh, you could read into this a little bit more, but, uh, we'll leave that where it is. Um, but I, but I would learn every single, every single ship. This is what a star destroyer does. And he would have all this backlog and stuff. And so, yes, I agree with you. That's very cool. You finish the movie and then you can just interview Luke about how this, how does the lightsaber actually work? And he can talk about the kyber crystals. That would be very cool. On the flip side, uh, I had a very funny experience. Uh, I was watching a horror film in high school with a couple of friends and I grew up in Pasadena.

• 34:47John Coogan?

  And this horror film just happened to take place in Pasadena. Like that's where they set the film. Because Pasadena, California is just like a place where you set films. It's just a real place. So if you've seen Kill Bill, which I know you haven't, uh, but Kill Bill, uh, by Quentin Tarantino, uh, there, there's a scene where, uh, where Uma Thurman just shows up. And it says at the bottom Pasadena, California, because like that's where the character went. It exists in the real world. But this horror film that took place in Pasadena was terrifying because I was watching it and I was like, this is happening here and it's night and it's dark outside and like now I'm so much more immersed.

• 35:27John Coogan?

  And so I was thinking back then that you could use like the IP address of the, of a, of a connected, I think we were watching it on like a PS3, like a DVD player. Like you could, you could use the DVD player to dynamically change the location of this, of the establishing shot. So you're like, this whole horror film is going to take in, take place inside of like one house where there's like a monster in the house. And it's going to be like the usual, like they're upstairs, they're downstairs, there's blood, there's, you know, someone's running and chasing, like it could be any town USA. But they usually, they usually establishes like this is happening in Amityville. This is happening in, you know, some random town, uh, Lake Placid, right? But they could easily just dynamically change that with a few establishing shots to just show you, okay, it's happening in Malibu.

• 36:11John Coogan?

  All right. And now it's a lot scarier for you. So I think there's something interesting there, but again, it has to be the work of like an auteur.

• 36:18Jordi Hays?

  It's, yeah, it's not something you can copy and paste either because it works for some shows, but then others like the place is so obviously. The place that it would throw you off as a viewer.

• 36:28John Coogan?

  Exactly. And so I do think that the that the fully AI-generated, fully custom content, that will exist, but it will exist on independent third-party platforms. It won't be the domain of Disney. This will be something where if you, in the future, if you really want to see like, you know, AI-generated stories about surfing in Malibu, like, there will be an endless stream of those, and you will be able to go and experience that particular content. And you can already kind of experience that because there's probably some Instagram person who makes really great content about surfing in Malibu. And if you follow them, you get that vibe, and that might be what you're into. And you can kind of like, and it's handled just by the great democratization of creativity. And we should talk to Samir about this later,

• 37:13John Coogan?

  he's coming on the show, so we can talk about the future of content creation and whatnot. On the question of should Apple make a huge acquisition, Tim Cook actually addressed it in the earnings call. He said something like, "We've acquired around seven companies this year, and that's companies from all walks of life, not all AI-oriented. We're very open to M&A that accelerates our roadmap. We're not stuck on a certain size of company, although the ones that we've acquired thus far this year are small in nature." And he said, "Like, we're acquiring one every few weeks," which is not quite seven per year. I mean, I guess that's like, one a month, but a few weeks, sure. So he's doing deals,

• 37:57John Coogan?

  but he's not looking at anything massive. And I think that actually makes sense. My question was, if you were the CEO of Apple, and you had $100 billion burning a hole in your pocket, what are the other things that you could do with that money?

• 38:12Jordi Hays?

  Formula One team.

• 38:14John Coogan?

  You could buy every team and the division and every track and all the sponsorships.

• 38:21Jordi Hays?

  I made a post about this joke.

• 38:22John Coogan?

  It's crazy. It's so much money. It's so much money.

• 38:25Jordi Hays?

  I made a post about this jokingly earlier this year. I still think it'd be cool for Apple to just be in F1 in the way that Red Bull is.

• 38:31John Coogan?

  I think that'd be great. No, no, I agree. Yeah, I think that'd be great.

• 38:36John Coogan?

  The one thing culturally is like, Apple's brand is, is very premium and very high end and.

• 38:42Jordi Hays?

  I don't know if they could handle a few losing seasons.

• 38:46John Coogan?

  This was the early bear case for Apple TV. I was talking to someone, a very successful Hollywood producer. And he was saying that the nature of the, of Hollywood is like venture capital. Like it is a hits driven business. If you don't accept that you're going to have massive flops and egg on your face and embarrassing moments, you will not make it. And just like any venture capitalist who is like, I only want to make investments where they won't blow up. You're not going to make it, right? Like.

• 39:19Jordi Hays?

  Yeah, Marc Andreessen had a, had a, there was a clip from a episode he did recently talking about how he lose sleep over the companies you don't invest in, not the ones you invest in and don't work.

• 39:30John Coogan?

  Exactly, exactly. And so, so you have to be risk on, you have to be risk on in Hollywood as you do in venture. And so, the, the question was like, can Apple deal with spending 50 or a hundred million dollars on some show that completely flops and everyone's like, this is a disaster. And they've navigated really well. I think that they have had some flops, but they've kind of tucked those behind the scenes. Whereas Netflix has started to get more kind of, you know, people talk trash about, what was that red, red notice? Or they, they did some massive movie with the rock that kind of flopped. They've done a few of these big movies that haven't done that well. And, and it's sort of like, oh, like, you know, they're, they're, they're not, you know, God's gift to, you know, producing.

• 40:13John Coogan?

  But it doesn't matter because overall Netflix is doing very well. And all it takes is like one squid game to like carry the whole quarter, basically, just like in venture. Or like one, you know, you sign the Friends deal and then, or the office and people are watching that like 20 years later. So.

• 40:29Jordi Hays?

  And apparently so F1 has surpassed half a billion dollars in box office earnings as of last week.

• 40:37John Coogan?

  I mean, it's a fantastic.

• 40:38Jordi Hays?

  Example of a, of a home run. But it's not like they're doing that once a quarter by any means.

• 40:44John Coogan?

  No, and John Exley's in the chat. Shout out to John Exley. Unfortunately, I didn't get a chance to connect with him at our party in New York, but he did attend. You got to chat with him. A lot of the team got to chat with him. So thank you for all you do, John. We really appreciate you. The entire team is giving you a round of applause.

• 40:59Jordi Hays?

  General.

• 41:00John Coogan?

  Because.

• 41:00Jordi Hays?

  General of the chat.

• 41:01John Coogan?

  You've done a ton of, a ton of work for us and we really appreciate it. Anyway, if you had $100 billion burning your, burning, burning a hole in your pocket at Apple, what would you do? I have a bunch of crazy ideas.

• 41:14Jordi Hays?

  Go through your list.

• 41:15John Coogan?

  So, uh, most people would just say, hey, you're gonna benefit from AI because you are the window into all technology and it doesn't matter if it's, if it's generative video or, or text, like people will be consuming it on devices. You sell devices, you'll be fine. Uh, just like search did not destroy Apple. It actually made Apple stronger because people search on their iPhones. Um, so most people would just say, hey, return it to the shareholders. Apple's already done that. They've returned over a trillion dollars to shareholders in the past 10 years. Those are kind of rough numbers, but it's basically that, which is an insane amount of money to return to shareholders. Um, but Samsung is worth 330 billion. They could buy the entire company, lever it up with two thirds debt and, uh, they would just own both sides of the smartphone market then.

• 42:00John Coogan?

  Probably extremely anti-competitive. I think Lena Kahn would have a conniption fit, but, uh, funny concept, funny concept. Um, the other, uh, the other, the other idea is massively expand the retail footprint. So, Apple right now, I was surprised by this. How many retail stores do you think they, they have worldwide?

• 42:19Jordi Hays?

  I don't know, like 599 or 601.

• 42:23John Coogan?

  Did you look, did I tell you?

• 42:24Jordi Hays?

  We talked about this this morning.

• 42:25John Coogan?

  It's 535. Um, so it's not that many. It's mostly in the tier one cities. There's usually only like one in every city. They don't really, they don't take the Starbucks strategy where they put them across the street from each other.

• 42:35Jordi Hays?

  Yeah.

• 42:36John Coogan?

  But for a hundred billion dollars, they absolutely could. A hundred billion dollars is enough to open 6,000 new Apple stores. So they would be 6,600. So they would be up around 7,000 stores, which for reference is as many.

• 42:51John Coogan?

  Subways as there are and as many CVSs as they are and as many 7 elevens as there are in America. And so everywhere you see a subway, you could see an Apple store. And I feel like this would be a big upgrade for America. I feel like if you just walked around every American city where tier one, tier two, tier three city, you just see a beautiful sheet of glass and it's an Apple store on every corner in America.

• 43:14Jordi Hays?

  They could also acquire every firearms store in the country and turn them into Apple stores.

• 43:22John Coogan?

  They could do a take private of Figma. Think bigger, build faster. Figma helps design and development teams build great products together. Get started for free at Figma.

• 43:30Jordi Hays?

  I'm still buzzing from Thursday.

• 43:33John Coogan?

  It was a fantastic day.

• 43:34Jordi Hays?

  Absolutely fantastic. Anybody that is tuning in, anybody that is tuning into the show for the first time today is going to be hearing our ideas for Apple and just thinking, these are some of the worst things I've ever heard. But they're definitely fun.

• 43:48John Coogan?

  Okay, so speaking of glass from the Apple stores, they could buy Corning, which makes Gorilla Glass. It's a $55 billion company. Then with the money left over, they could buy Inter Digital, which owns all the patents on 5G and 6G. So they could basically patent troll everyone else in the industry.

• 44:04Jordi Hays?

  Just get extremely anti-competitive.

• 44:06John Coogan?

  They could also, with the money that is left over, we're still in the first like, let's vertically integrate this company mode. They could also buy 10 rare earth or cobalt mines. So they own the supply chain there. And then they could also build four battery giga factories and lock up the Sapphire Crystal supply chain that's used on the iPhone camera. So they could just completely own their entire supply chain for 100 billion. And that's just one year, one year. And then they, you know, the proposal was do this every year.

• 44:36Jordi Hays?

  The other thing that was interesting about Take Him's post is if you, if you listen to the earnings call, Tim Cook and the team were very clear that they don't even want to finance like data center development themselves. They're still working with these sort of like third party lenders to like capitalize them. And so again, Tim Cook is the king of efficiency.

• 45:00John Coogan?

  Yeah, he knows his business.

• 45:03Jordi Hays?

  Should we get into some of that?

• 45:04John Coogan?

  No, I have one more.

• 45:05Jordi Hays?

  One more.

• 45:07John Coogan?

  OpenAI, they act will hire Johnny Ive, they're coming out with something that's competitive. It's going to be some, some sleepless nights at Apple when that thing's drops, right? It's gonna be stressful because like, maybe, maybe, maybe it doesn't go super well, but like, you know, it's a serious threat. OpenAI is a serious company, they have a lot of customers, and they got Johnny Ive, your former goat, designer, ready to drop, you know,

• 45:29Jordi Hays?

  And a bunch of former Apple employees.

• 45:30John Coogan?

  Tons, amazing, amazing team over in, in hardware at OpenAI. So the question is like, how do you fire back with your Apple and you have a hundred billion to spend? Here's what you do. The cogs on an iPhone are less because they have a margin. So you take that hundred billion dollars, you buy 200 million iPhones and you send a brand new iPhone to 200 million Americans. And you're just like, oh, how much are you charging Johnny Ive and OpenAI? Well, ours is free this year. We're doing a free iPhone for the entire year.

• 46:05Jordi Hays?

  They should just do something like that where it's like, your 11th iPhone in a row.

• 46:09John Coogan?

  Is free.

• 46:10Jordi Hays?

  Is free.

• 46:11John Coogan?

  They'd probably have 200 million people with free iPhones. And they're just like, yeah, we're actually, we want to keep you in this ecosystem. We like our services revenue.

• 46:19Jordi Hays?

  We're excited to be a platform.

• 46:20John Coogan?

  We're excited, we're just giving it back, we're just giving back. Can you imagine? I think that would also be extremely anti-competitive. I don't even know if there's a regulatory framework to stop that from happening. But, I mean, price competition is a real thing and like, if you, if you discover that your competitor is under-capitalized and can't, can't win a capital war, you could potentially cut, cut, cut prices so dramatically that it's like, yeah, the, the other phone's like, cool, but, you know, this one's free. I guess I'm staying in, in the blue bubble world.

• 46:53Jordi Hays?

  Tim Cook next earnings call. All right, we're gonna buy all of the mines we depend on and we're gonna make the iPhone free. Stock just yeets like 80%.

• 47:03John Coogan?

  He's like, I'm petty, I'm petty. And you know what, Johnny Ive, you know, I'm not gonna let you win.

• 47:09Jordi Hays?

  I would rather die than let you win.

• 47:12John Coogan?

  Yeah, I would destroy myself. Uh, yeah, I've been reading a lot about cutting your nose to spite your face.

• 47:17Jordi Hays?

  And I'm pretty into it. I'm pretty into the strategy.

• 47:20John Coogan?

  Uh, anyway, uh, let me tell you about Vanta automate compliance, manage risk, improve trust continuously. Vanta's trust management platform takes the manual work out of your security and compliance process and replaces it with continuous automation, whether you're pursuing your first framework or managing a complex program.

• 47:34Jordi Hays?

  Go talk to the purple llamas, vanta.com.

• 47:36John Coogan?

  Anyway, uh, so, uh, Ben Thompson's been noodling on, uh, on Apple and AI strategy. He had a rough go because he, I think he took some time off or shifted, he shifted his posting schedule right when all the earnings dropped and there was all this crazy stuff going on. So, um, he, he's just writing about Apple earnings now, but he has, uh, he still has some, some good takeaway saying, you know, even if they do, even if Apple does swoop in and buy Mistral, for example, uh, the overall point holds, Apple isn't going to compete with OpenAI, Anthropic, Meta, X and Google on pursuing AI superintelligence. Like five extremely well-funded, extremely serious teams, uh, they're gonna, Apple's gonna go their own

• 48:21John Coogan?

  way, centered on their devices and their direct relationship with their customers, uh, at least as long as Cook is in charge. And anyone that's saying that Cook, uh, needs to step aside, I think is, uh, is in for a world of hurt because he's been on a generational run and he's solving the most important problem for that company, which is not the application layer in artificial intelligence, it's the supply chain and keeping the, keeping the flows, flow of iPhones coming.

• 48:46Jordi Hays?

  Making and selling phones.

• 48:47John Coogan?

  Making, put the phones in the boxes. Tim, he's doing it. He's doing it. He's really, he's really, he's really underrated. He's been CEO longer than Steve Jobs was. No. He's the longest tenured CEO of Apple in history.

• 49:01Jordi Hays?

  He better be bringing some of these AI researcher, uh, comp packages in as, as comps when he gets in front of the comp committee at Apple. Say, hey.

• 49:11John Coogan?

  That is true. He should definitely be getting a bump. If he does have researchers, I mean, he has, he has AI researchers. They are improving different functionality. I feel like maybe I'm hallucinating this, but it feels like the text to speech engine has gotten better on my phone. I listened to a semi-analysis article with the default Apple Safari text to speech and it was very listenable. So I think we're getting better there. We have some breaking news about Sirius XM. They are canceling the Howard Stern Show. Can you call it a cancellation when the guy's 71 years old and he's been doing it for 20 years? They say it's no longer worth the investment.

• 49:50John Coogan?

  They've been paying him $100 million a year. That is a huge salary and that's what, three, four times Colbert? Wow. That is, that's big. That's the power, power of, of radio, power of, you know, the power law. He's done fantastically. So congrats to him. Howard, if you're looking for a new gig, you're welcome to come and hang out at the Ultra Dome. You can sit at the intern table next to Tyler and we'll, we'll, we'll bounce ideas off you.

• 50:20Jordi Hays?

  Yeah, it's wild. I really wonder where Sirius XM business goes.

• 50:26John Coogan?

  I know, I know where this goes. Post AGI, you're going to listen to every hour, every hour of Howard Stern. I know you've listened to zero hours, but there's probably 20,000 hours in the catalog, something like that of Howard Stern content. You could listen to it from the beginning.

• 50:43Jordi Hays?

  Do people listen to the back catalog ever?

• 50:45John Coogan?

  Absolutely not.

• 50:47Jordi Hays?

  Sirius XM is still a $7 billion company. That's bigger than I would have thought.

• 50:53John Coogan?

  I wonder, yeah, revenue, like how much of that cost? I mean, it makes sense to give him a huge slice of that. It is a talent-driven business and he could go to Spotify, he could go somewhere else. My question is like, he is old. Will he retire or will he do a podcast or do something independent? Is there news?

• 51:07Jordi Hays?

  Now, they...

• 51:11John Coogan?

  What?

• 51:11Jordi Hays?

  They apparently did how much?

• 51:13John Coogan?

  Okay, you look that up while I tell you about Wander. Find your happy place. Book a wander with inspiring views, hotel-grade amenities, dreamy beds, top-tier cleaning, 24/7 concierge service. It's a vacation home, but better.

• 51:22Jordi Hays?

  So they did 8.6 billion in 2024 revenue. So they're trading at less than 1X revenue, which just says, uh, when you have a shrinking business, it is a rough place to be in.

• 51:34John Coogan?

  Not a growth, not a growth stock, I suppose. Um, yeah, I wonder how much of that is getting eaten up by, by, by talent. Yeah.

• 51:41Jordi Hays?

  This is a trillion dollar stock if they have.

• 51:43John Coogan?

  Yeah, I wonder how much, I wonder what percent of Sirius XM content is, uh, like power loss, celebrity host read, high salary contract versus essentially programmatic or AI content? Because it's probably not even AI, but if you're just like, there's a, there's a station on Sirius XM that's just the Grateful Dead. And it just plays them the whole time. Like, I don't think you need someone making a hundred million dollars to like randomly play Grateful Dead tracks. Like, there's probably some Grateful Dead fan who manages that and picks the songs and orders them, but like, that could essentially be pseudo-random.

• 52:22John Coogan?

  Maybe one day you go through the, the, the back catalog and then the new stuff and then you mix it up and then you play the hits or something. I don't even know if they have hits in that way. I know it's kind of a jam band, but, um, I wonder, I wonder of their, of their, like, of their content, of their tonnage, is that the term? Tonnage? Is like the, the amount of content on the network? Uh, I wonder how much of it is, is driven by these high, high dollar deals? And I wonder if they'll get a new, a new host in the seat. I wonder who this generation's Howard Stern is. Maybe it's like Tim Dillon or something, some irreverent comic essentially.

• 53:00Jordi Hays?

  I think the thing is. As content is on demand, fewer and fewer people are just turning on the radio or turning on the television and listening to whatever they whatever just happens to be playing. And so if you take people that were subscribed to Howard Stern, we're like, you liked Howard Stern, we're now just gonna play this other person through his channel. They're just gonna be, they're just gonna ask what's going on here.

• 53:24John Coogan?

  Yeah, I mean, certainly if you have a specific car that has Sirius XM and it doesn't have Spotify and Howard Stern's new show is on Spotify because it's a podcast, like, you might stick around on Sirius. Maybe they get someone new in the seat who's, you know, almost as good or can build a relationship. But it does seem like a challenge to fill that. But also, you know, it's a lot of money to pay. So clearly it wasn't penciling out, so they had to move on. Uh, OpenAI has announced an open source model. They said they'd never do it. Everyone's saying.

• 53:57Jordi Hays?

  It was in the name. It was in the name. How could you have doubted?

• 54:00John Coogan?

  Closed AI, closed AI. They're not OpenAI, they're closed AI. Everyone thought they were so clever, they said they couldn't possibly open source a model and they did.

• 54:09Jordi Hays?

  They did.

• 54:09John Coogan?

  They did it. Be unthinkable.

• 54:11Jordi Hays?

  First, first open model in years, right? They used to have them.

• 54:15John Coogan?

  Was, was GPT one open source? Like, when, when was the last time that, so we're gonna talk to Tyler about this.

• 54:22Jordi Hays?

  I wanna say it's GPT two.

• 54:24John Coogan?

  Was still open source? And then they decided to close source something. Uh, it's tough that I, I treat you like things that I could Google and I know that you just have to search it or chat GPT it. Um, but, uh, good luck. Get me the information on the, the history of OpenAI's open source models. In the meantime, I will read this post from Sam Altman. GPT OSS, all lowercase, he's still in lowercase mode, although he, he uppercases the other sentences, but he, he, he threw in, he likes lowercase.

• 54:56Jordi Hays?

  Sending you messages, John?

• 54:57John Coogan?

  I'm seeing it. I'm seeing, uh, coded messages in here.

• 55:03John Coogan?

  GPT OSS is a big deal. It's a state of the art open weights reasoning model with strong real world performance comparable to oh four mini that you can run locally on your own computer or phone with the smaller size. We believe this is the best and most usable open model in the world. We're excited to make this model the result of billions of dollars of research available to the world to get AI into the hands of the most people possible. Hit that soundboard again. I want to keep it going. We believe far more good than bad will come from it. For example, GPT OSS 120B performs about as well as oh three on challenging health issues. We've worked hard to mitigate the most serious

• 55:43John Coogan?

  safety issues, especially around biosecurity. GPT OSS models perform comparably to our frontier models on internal safety benchmarks. We believe in individual empowerment. Let's hear it for individual empowerment, people.

• 55:57Jordi Hays?

  I feel empowered the way that you're reading this, John.

• 55:59John Coogan?

  Although we believe most people will want to use a conventional service, a convenience service like ChatGPT, people should be able to directly control and modify their own AI when they need to. And the privacy benefits are obvious. As part of this, we are quite hopeful that this release will enable new kinds of research and the creation of new kinds of products. We expect a meaningful uptick in the rate of innovation in our field and for many more people to do important work than we're able to before. OpenAI's mission is to ensure AGI that it benefits all of humanity. To that end, we're excited. I think I cut this screenshot off. We're excited for the world to be building on an open AI stack created in the United States based on democratic values, available for

• 56:44John Coogan?

  I didn't screenshot the rest of that, but oh, here it is, available for free to all and for wide benefit. So I imagine that that was the voice.

• 56:54Jordi Hays?

  As the author intended.

• 56:55John Coogan?

  As the author intended. Exactly. Exactly.

• 56:57Jordi Hays?

  Well, Depew has more notes here, some context. So less than one year between oh one announced, which was September of 2024, and we have an oh three level model open sourced that's runnable on consumer hardware. Wild progress. You were highlighting earlier, Sam initially had a poll.

• 57:14John Coogan?

  Oh, yes.

• 57:15Jordi Hays?

  Saying like, you know, should we, should we, what do you want? Do you want an oh three level model? Or do you want something that you can run?

• 57:22John Coogan?

  He did both.

• 57:23Jordi Hays?

  And he did both.

• 57:23John Coogan?

  He did both. Wow, that was, yeah, so we were reading that. So it was what, like six months ago or something? That post that you that you shared?

• 57:32Jordi Hays?

  Yeah, I think so.

• 57:33John Coogan?

  So I asked I asked Tyler to dig this poll up. Sam Altman shared a post that it was a poll on X saying, what do you want? Do you want an O one level model reasoning model frontier model? Open source? Or do you want something you can run on your phone? And it was and it was neck and neck and people were clicking on the phone model. They were like, we want the phone model. And then Dylan Patel quoted it and said, oh, you idiots don't vote for the phone model. You can just still llama.

• 58:00Jordi Hays?

  Let's get a truly frontier model.

• 58:01John Coogan?

  Let's get a frontier model. And so so Dylan Patel was very much like, like, you guys don't know what you want. Like, like, the phone models are available. That that will be easy. The hard thing, we got to twist OpenAI's arm to open source the reasoning model, the O three level model. And Sam Altman just said, you wanted this or this? It was a false dichotomy. You get both.

• 58:21Jordi Hays?

  You get both.

• 58:22John Coogan?

  You get both.

• 58:23Jordi Hays?

  Yacine says, all caps, I'm so sorry for doubting you, Sam Altman. I'm so sorry for saying that you were the Antichrist. I didn't realize I didn't realize your plans were measured in centuries. I hope you forgive me for everything. I'm so glad you kept control of OpenAI. I'm so sorry. Please forgive me.

• 58:40John Coogan?

  That's remarkable. Never talked down on the future first ballot Hall of Famer. Apparently, the future leader of open source AI will be very interesting to see how Meta responds. Will they stay in the open source game? Also, just how important is open source? Is this a Linux scale opportunity? Is this an Android scale opportunity? Like, is this, you know, is this GitLab to GitHub? Like, what's actually the long term play? Certainly cool. Great for the community. We're going to see fun experiments. We're going to see interesting things done with this. I think, do we want to talk about some of the ideas that we had for building on top of this open source model? Fine tuning. I can just run through some. I know there's one you didn't want to you didn't want to share because you

• 59:25John Coogan?

  thought it was too, too, too good, too much alpha. But what was it? What was I talking to you about, Tyler? What were our ideas? We had one that was.

• 59:33Jordi Hays?

  Well, initially, we weren't sure there was going to be reasoning.

• 59:35John Coogan?

  That's right.

• 59:36Jordi Hays?

  So we were going to add fake reasoning.

• 59:38John Coogan?

  Yeah, so it was going to be a model that gaslights you into thinking it's reasoning, when in fact, it's not reasoning.

• 59:45Jordi Hays?

  So if you pull up, if you look at the actual, like, you know, reasoning UI, it's just UI.

• 59:51John Coogan?

  Yeah.

• 59:52Jordi Hays?

  There's no actual reasoning.

• 59:53John Coogan?

  So you ask the question.

• 59:54Jordi Hays?

  It's a time delay. It's a time delay.

• 59:55John Coogan?

  It's delay.

• 59:55Jordi Hays?

  And then while it's thinking really hard.

• 59:57John Coogan?

  Hmm, let me think about that.

• 59:58Jordi Hays?

  What would a super smart person think right now?

• 1:00:00Speaker 02

  So we could actually still kind of do that because it's not a multimodal model.

• 1:00:05John Coogan?

  Okay.

• 1:00:05Speaker 02

  But we could like, you know, you add, we just add some kind of like totally blank encoder or something for the image.

• 1:00:10John Coogan?

  Okay.

• 1:00:11Speaker 02

  And then it's like, hmm, this is an interesting image. Let me think about what's in it.

• 1:00:14John Coogan?

  Yeah, one of the best images I've ever seen. A lot of people are saying this, this is one of the greatest images. Thank you for sharing this PNG and/or JPG with me. It just, there's nothing about the, about the image. It's great. I, I, I'm seeing that this image is, uh, is, is large in file size. It's just purely metadata based analysis. It doesn't know anything about what's going on. Like, wow, this is a tough question. I'm going to have to generate a lot of internal reasoning tokens to, to answer this. Test time inference is really is magical, isn't it? Anyway, back to thinking. Okay, I'm reasoning about this now. Yeah, so.

• 1:00:48Jordi Hays?

  The other, the other, the other obvious opportunity, you know, people have been frustrated with sycophancy with the models and, and models being.

• 1:00:56John Coogan?

  Well, not me. I've been frustrated with the lack of sycophancy.

• 1:00:59Jordi Hays?

  Yeah, you want more. You want more.

• 1:01:00John Coogan?

  I want more.

• 1:01:01Jordi Hays?

  You want the model to gas you up, but you know, fine tuning it to go, you know, over the top, somebody could release the Glazinator 3000, which, which just tells the user, uh, you don't, you don't just think you're goaded. You are goaded. I know this, you know this.

• 1:01:15John Coogan?

  It's like, I'm asking you to solve IMO question six. Why are you talking about whether or not I'm goaded? It's like, it, it just tells you like, you got this one.

• 1:01:23Jordi Hays?

  The timing, the timing here, the timing here is interesting. I mean, everybody's, everybody's been banging the table saying, where is the American open source AI or LLM leader? It was reported yesterday by the misinformation that reflection, reflection, uh, the misinformation reported that reflection. Uh, one year old startup. Uh, we've had, uh, the CEO on before he's in talks to raise one billion to develop open source models to compete with deep sea, uh, meta and Miss Strahl. Uh, and yeah, all of the, you know, the, the Chinese open source models have been

• 1:02:05Jordi Hays?

  on a tear. Uh, Quinn released Quinn coder recently.

• 1:02:09John Coogan?

  Yeah, people are into Quinn.

• 1:02:09Jordi Hays?

  Um, or a new version of it that, uh, is getting good results. So it's important work.

• 1:02:15Speaker 02

  So one thing, thing that's kind of related to the like US, China, like race is like, so, so when deep sea first came out, everyone was like up in arms because they said like it's, it was less than $5 million to train, right?

• 1:02:25John Coogan?

  Yep.

• 1:02:26Speaker 02

  So, um, in the, in the model card for, for these models, um, they actually reveal like the, uh, GPU hours it took.

• 1:02:32John Coogan?

  Sure.

• 1:02:33Speaker 02

  Which then you can like figure out how much it probably cost, uh, costed to, um, you know, train.

• 1:02:38John Coogan?

  Give me the number and tell me if I need to ring the gong for them.

• 1:02:41Speaker 02

  So, so for the big model, it was probably around like four million. So just, yes, but, but the, the small model was like 500K, probably a little less. But that's like 10x better. The model's way better than deep sea one.

• 1:02:54John Coogan?

  Okay. Okay. So shall I ring the gong?

• 1:02:57Speaker 02

  I mean, I think it's.

• 1:02:58John Coogan?

  I, I, I wanted, I wanted, I wanted to hear 400 million at least. I was expecting

• 1:03:03Speaker 02

  400 million dollars.

• 1:03:05John Coogan?

  Nine dige. They got a billion of revenue coming in every month.

• 1:03:09Speaker 02

  But isn't it, no, it's cool that.

• 1:03:10John Coogan?

  Spend 10 days of revenue on the open source model. I, you know, no, it is very cool. So, so we're ringing the gong for, for the elegance of the training run.

• 1:03:18Jordi Hays?

  Yeah.

• 1:03:18Speaker 02

  Efficiency.

• 1:03:19Jordi Hays?

  Efficiency.

• 1:03:23Jordi Hays?

  Congratulations on delivering a great model, saving time and money.

• 1:03:27John Coogan?

  Putting money back in the hands of shareholders and not in the hands of open source developers, I suppose. Um, but yeah, I mean, do you, do you think that, uh, is this, uh, is this like a pre-training scaling wall narrative? Like, like, would you as someone who is a potential consumer of an open source, um, model, like, do you want a 400 million dollar open source model? Would that necessarily be better? Cause it seems like they were able to distill it pretty well, get it to the frontier, not, you know, burn a ton of money on, on training. Also, the question is like, if they're. This is probably distilled from their other models that are much bigger. So like you, there is no world where you could just spend $4 million and get this level model without also

• 1:04:11John Coogan?

  have done, having done the GPT four run, the GPT 4.5 run, et cetera, right?

• 1:04:16Speaker 02

  Yeah, maybe. It's also just like, even if they didn't distill it, they just have the knowledge of like how they did it, which is like arguably more valuable, right?

• 1:04:24John Coogan?

  Yeah, yeah, yeah.

• 1:04:24Speaker 02

  And I think in terms of like open source, it's either you will want to go like super, super cheap and super small, which they kind of did here, or you go super big, like almost like the llama, like the behemoth, right?

• 1:04:35John Coogan?

  Yeah, yeah, yeah.

• 1:04:35Speaker 02

  Yeah. I think it would have been really cool to see that, like literally like state of the art, you know, level model.

• 1:04:41Jordi Hays?

  You could also try and ask Claude, hey, build me a frontier open source model. Don't make mistakes.

• 1:04:48John Coogan?

  Yeah, we're gonna have someone from Claude on soon. This is funny because you said 500K for the small model?

• 1:04:55Speaker 02

  Yeah, probably less.

• 1:04:56John Coogan?

  So that's the same amount of money that they're putting up for this challenge, the red teaming challenge. Have you seen this? So to encourage researchers, developers and enthusiasts, that's me, from, from around the world to help identify novel safety issues. This challenge has a $500, $500,000 prize fund that will be awarded based on review from a panel of expert judges from OpenAI and other leading labs. At the end of this challenge, we will publish a report and open source and evaluation data set based on the validated findings so that the wider community can immediately benefit. So if you can hack this thing, if you can get it to teach you how to develop a nuclear bomb or take over the world, you might have 500K in your pocket. Not bad. Go get some of that. That's a seed,

• 1:05:41John Coogan?

  seed round in 202012. Welcome to the stream. How you doing, Mark?

• 1:05:48Marc Andreessen?

  Hey, what's happening?

• 1:05:50Jordi Hays?

  Great to see you.

• 1:05:51Marc Andreessen?

  Yeah, you too.

• 1:05:52John Coogan?

  A lot. It's a, it's a little bit of a slow news day, but exciting stuff with GPT open source.

• 1:05:59Jordi Hays?

  It's not a slow August.

• 1:06:00John Coogan?

  It's not a slow August. We're glad. We were just reflecting that we've taken exactly one day off this summer. That was July 4th and we're showing the Europeans how American companies work.

• 1:06:11Jordi Hays?

  American work.

• 1:06:11John Coogan?

  We're setting an example and the, and the, and we have proof of work because we exist on the internet and you can see us live every day. So we're setting an example. How are you doing? How's your summer going?

• 1:06:23Marc Andreessen?

  Fantastic, going really well. So how long is it going to be until you guys put up avatars that make claims that you're working hard all through the summer, but it turns out you're on the beach?

• 1:06:31Jordi Hays?

  You might have caught us.

• 1:06:32John Coogan?

  I think you'll know better than us as to when the technology gets there. We've been demoing some of the stuff. People have been doing a lot of deep fakes of us and fortunately, all of them have been clockable. So it doesn't feel like a brand risk, but they're getting closer and closer. And I know that there's going to be a moment where we have to say, hey, that's actually using our name and likeness to endorse something that we don't necessarily endorse. Can you please take that down? So we're approaching the touring test, the uncanny valley. We're escaping the uncanny valley.

• 1:07:00Jordi Hays?

  I think a question, like looking back over the, you know, maybe 10 or 15 years was, was, what moments did you feel like there just was not a lot of action happening? Because this summer is just the pace from so many different teams has been absolutely insane. Everybody's like trying to keep up and it didn't used to feel that way, at least from my point of view.

• 1:07:23Marc Andreessen?

  So my view of it always is there's like these, there's this, these disconnected, you know, kind of patterns or trends. There's sort of the, the sort of day to day phenomenon where like engineers show up every day and they make things a little bit better. And then every once in a while, you know, you get a technical breakthrough or a new platform. And, and, and that process, kind of this, you know, kind of sawtooth, kind of up to the right kind of process kind of plays out over time, kind of regardless of what else is happening in the world. And so it keeps happening through recessions and depressions and wars and like all kinds of crazy, crazy, crazy stuff that's happening. But basically, you know, the, the technology keeps getting better. So there's, there's kind of that curve. And then, and then there's the, the sort of enthusiasm curve and, and the, and then the adoption curve. You know, which is basically like, when do these things actually show up in the world?

• 1:08:05Marc Andreessen?

  And then by the way, when are people actually ready, uh, you know, for, for, for the new thing? Like if you talk to the people who worked on, I'm sure you guys have talked to people who work on language models. They will tell you that they were surprised the chat GPT was the breakthrough moment because they thought everybody already knew what these models could do for, you know, three years before that. And so they were, you know, they were shocked that it was the chatbot interface that made, that made the thing go. And so, so there's somewhat of a sort of arbitrary disconnection between what's actually happening in the substance. And then what, what, what, what people are, are seeing and feeling. And so it's just, it's, it's, it's really hard to predict when these things pop. But also if, if you're in this day to day, it's, it's really hard to tell, um, you know, when things are going to be hot or not. Because it doesn't necessarily map to how much the technology is improving.

• 1:08:44John Coogan?

  Yeah, we were just talking about that in the context of of Google's new world model. It's this like generative video game that you can kind of move around in. And it feels like DeepMind is just absolutely crushing at the AI research frontier. They have the best world model simulator that you can walk around in. The question is like, if they let another lab do the ChatGPT thing and just get it out into the consumer three months earlier, they might wind up kind of chasing and trying to catch up if somebody actually figures out how to make it like a dominant consumer product. Now, in the enterprise, it's more oligopolistic, but consumer seems to be winner take all. I guess the question is like, how much value do you place right now in the AI race to

• 1:09:26John Coogan?

  just like moving fast, breaking things, you know, dealing, having like the thick skin to deal with like the safety constraints and all of the different stuff, obviously not being irresponsible, but just speeding up the organization as much as possible. It feels like now is the time to really push on that.

• 1:09:43Marc Andreessen?

  Yeah, well, first of all, I need to correct you. It's it's moving fast and making things. I don't even know where that came from. I I I have no idea. Never heard, never heard of it.

• 1:09:54John Coogan?

  I mean, ChatGPT didn't really break anything. I think that's a good point. It really did just move fast and make things. The first things it made were weird, but that was fine. And it failed and it hallucinated a ton, but it didn't really break anything. I don't know.

• 1:10:05Marc Andreessen?

  Yeah, I believe that I believe in this case, total deaths attributable to ChatGPT are still zero.

• 1:10:10John Coogan?

  Zero.

• 1:10:12Marc Andreessen?

  So notwithstanding all of it, notwithstanding all of the all the caterwauling, but yeah. So, look, I think the AI industry in particular has a very acute version of the of the of the sort of challenge that you identified with. And, and, you know, and I don't say this negatively, just an observation, which is that they're, you know, like in sort of a normal technology company, you've kind of got engineers who make products and then you've got, you know, kind of salespeople or marketing people who sell them. You know, in the in the AI companies, you have this third tier of, you know, the quote unquote researchers, right? And so, you know, which is which has worked out incredibly well. I mean, the researchers have done, you know, they've just done like amazing breakthroughs at these companies. But, you know, the the the handoff, you know, there's not necessarily a clean handoff from the researchers to the to the market.

• 1:10:51Marc Andreessen?

  And so it kind of raises this question of like, OK, like, is there is? Are these companies therefore kind of three, you know, kind of three segment companies where they have research and then they have product development and then and then they have go to market. And I and I think that's a really open issue. I mean, if you, you know, Google's kind of a case study of this, you know, you alluded to DeepMind, but even more broadly, Google, you know, Google developed the transformer in 2017. And then they basically let it sit on the shelf, right? Because it was a research project. They they didn't productize it. They were very worried about, you know, from people I've talked to, they were very worried about the, you know, brand issues and safety issues, you know, kind of all these, all these, they had all these reasons to not productize it. I talked to somebody senior who was there at the time, and I I asked them, you know, when when when could you have had chat GPT with GPT four level output? If you had just got, you know, gone gone flat out starting in 2017, and they said by 2019.

• 1:11:35John Coogan?

  Yeah.

• 1:11:36Marc Andreessen?

  You know, they're they already knew how to do it. And then, you know, they've now caught up, but it took it took an extra five years, five years to catch up. And and so I I think a lot of these companies kind of have that challenge. Elon, as usual, of course, is provoking this question, is I'm sure you guys talked about, but you know, he he has now, you know, with an XAI, he's now collapsed, you know, he's eliminated the distinction between research and product. And so, you know, of course, he, you know, he's pushing this as hard as he can. And I I think it's a it's a good question for a lot of the other companies, kind of how hard they want to push on actually getting these things in fully productized form out to the market.

• 1:12:07John Coogan?

  Yeah, yeah, on on Elon's like distinction, it feels like there is more research to be done, but it feels like we're we're entering like a new cycle of, you know, just focus on the engineering, focus on the deployment, the applications. Let's get all this technology out into the world. Let's reap all that benefit. And yes, there will be a a different track of fundamental research that's happening somewhere. But it's really, really hard to predict. And so if you have something that's working, just double down and just go really aggressive on it. I'm I'm wondering more on on that, but also on Apple's strategy. It feels like Apple's been kind of like, you know, people have been maligning them for not for missing the AI opportunity.

• 1:12:49John Coogan?

  And Tim Cook's just there on the earnings call being like, look, we acquired a couple of small companies and

• 1:12:54Jordi Hays?

  Seven this year.

• 1:12:54John Coogan?

  Seven companies, but then it seems like they're taking more of like an American dynamism approach. Like there was news today in the Journal that they that they're investing $100 million in American manufacturing. They're certainly doing stuff. They're just not chasing the, you know, the the shiny tennis ball.

• 1:13:11Jordi Hays?

  Headline $100 billion CapEx.

• 1:13:13John Coogan?

  So I'm wondering about your thoughts on when you have a, you know, when you have a platform, how hard is it to resist chasing the new shiny object? Is that the right move? Or are there any other things that you think Apple should be, you know, changing their strategy on?

• 1:13:32Marc Andreessen?

  Yeah, so look, Apple's always had this, you know, very clearly defined strategy that, you know, Steve and Tim, you know, working together, figured out a long time ago, which is, you know, they, I forget the exact term, but it's something like basically they invest deeply into the core of what they do. You know, they'll basically work internally on things for many years. They only actually release things when they feel like they're kind of fully baked.

• 1:13:49John Coogan?

  Yeah.

• 1:13:50Marc Andreessen?

  Right? And so as a consequence, they have this thing where, and Tim says this, right? You know, they're rarely first to market with new technologies. You know, they're more often in the category of what, you know, Peter Thiel calls last to market. You know, they'll, they'll come out whatever, three years later, whatever, five years later. You know, there, you know, there were tablets for years before the iPad. There were, you know, smartphones for years before the iPhone.

• 1:14:10John Coogan?

  Folding phones. They're about to do a folding phone. It's like 10 years into that technology. I'm sure if they do it, they'll hit it.

• 1:14:16Jordi Hays?

  The last mover, the last mover.

• 1:14:18John Coogan?

  Yeah, yeah, yeah. Sorry.

• 1:14:19Marc Andreessen?

  The last mover. And I guess, yeah, what I would say is like, look, that clearly works if you're Apple, right? And so it clearly works if you're Apple. But I would say there's a fine line between that strategy and just, and simply becoming obsolete, right? And so the problem is like, if you're not Apple, and you don't have all the other kind of super strengths and, you know, kind of now the market position that Apple has, you know, do you really want to be a company? You know, if you're not Apple, do you really want to be a company that basically sits there and says, yeah, the world's moving and we're very deliberately not going to lean as hard as we can into it? And so I think there's a lot of survivorship bias in these kinds of strategy discussions where people look at the one company that's able to pull this off and they don't look at the 50 other companies that are in the graveyard, you know, because they, you know, because, because they didn't adapt. I mean, you know, all the other smartphone companies, when the iPhone came out, they were like, oh yeah, well, we could do touch too, right?

• 1:15:02Marc Andreessen?

  You know, we'll just, you know, we'll get to it, right? And, you know. You know, they're gone.

• 1:15:07John Coogan?

  Yeah, what was it?

• 1:15:07Jordi Hays?

  What do you think?

• 1:15:08John Coogan?

  BlackBerry Bold, I remember. It's like an iPhone knockoff.

• 1:15:12Jordi Hays?

  What do you think?

• 1:15:13Marc Andreessen?

  Yeah.

• 1:15:13Jordi Hays?

  You know, right now, people are, are variety of, you know, shareholders are annoyed at Apple around their reaction to AI, LLMs. John's annoyed around just like transcription generally, just like super basic stuff. But it doesn't feel like the, the core business is immediately threatened today. It feels like it's still on the horizon around these sort of like, you know, eyewear based computing, you know, potentially net new devices that we're, that, that we'll see from, uh, you know, companies like OpenAI over time. But where do you like, like, how, how real is the threat, you know, this year versus 10 years from today? And, and kind of what's your framework?

• 1:15:55Marc Andreessen?

  Yeah, well, look, I mean, I think the biggest ultimate danger, I mean, the biggest ultimate danger is very clear, which is just like, at what point do you not carry around a pane of glass in your hand, you know, call the phone? You know, because other things have superseded it. And you know, look, everything, you know, everything becomes obsolete at that point. So there will, there will come some time, I'm sure when we're not, you know, carrying phones around and we'll, we'll watch movies or people have phones and we'll be like, yeah, look at, look at how primitive they were. Right? Because, because we'll have moved on to other things and whether those things are eye based or, you know, uh, you know, the other kinds of wearables or whether it's just kind of, you know, computing happening in the environment. Um, or just, you know, entirely voice based or, you know, who knows what it is. But, um, you know, there, there will come a time when that happens. You know, is that time three years from now? Cause there's like some, you know, huge breakthrough, you know, from, from some company that figures out the, the product that obsolete the phone right away. Or is that 20 years from now?

• 1:16:41Marc Andreessen?

  Because the phone is just, you know, such a standard platform for everything that we do in our lives and everything else, you know, kind of remains a peripheral to the phone. I mean, that, you know, that's, you know, that, that's the game of elephants that's playing out there. You know, obviously I think, you know, I think it's highly likely that we'll, we'll have a phone for a very long time. Having said that, it is, it is exciting that there are companies that are going directly at that challenge. And, you know, whoever cracks the code on that will be, that will be the next Apple. And by the way, that, that may in the fullness of time be Apple itself. You know, they, they may be the company that figures that out.

• 1:17:09John Coogan?

  Yeah, I remember being at a board meeting at Andreessen Horowitz, maybe a decade ago or something, and Chris Dixon showed me the hollow lens. And I was like, okay, we're one year away from this being everywhere. And I feel like today I'm still in the like, yeah, VR, it's definitely one year away. The next Quest, I'm going to be wearing daily. And it feels like we're always there, but it does feel like Apple did a lot of work on the fundamental, you know, pixel density of the resolution of the display. And then Meta has been doing a ton of work on just getting it light and affordable. Like, it feels closer than ever. But, you know, you always got to wait until you see the churn numbers until you really call the game, right?

• 1:17:48Marc Andreessen?

  Well, you say the same thing. But, you know, I think that's true. But you'd also say, you know, I'm on the Meta board, so I'm kind of a dog on this one. But like, the Meta Ray-Ban glasses are a big hit.

• 1:17:58John Coogan?

  Oh, totally.

• 1:17:59Marc Andreessen?

  Right? Like, they're a big, you know, so I think we now have a form factor that we know works, you know, for eye-based wearables. You know, there's not VR, and then VR, you know, on top of that. But, you know, just the, you know, the glasses, and, you know, and then the glasses of camera, you know, sort of integrated camera, integrated microphone, integrated speaker.

• 1:18:14John Coogan?

  Yep.

• 1:18:15Marc Andreessen?

  You know, that's a very interesting platform. You know, the watch clearly works, by the way, which Apple, of course, you know, has played a significant role in making happen. You know, that now sells in huge volume. You know, so that's the second data point. And then, you know, like, I think these, you know, these, I think some form of AI pin is going to work.

• 1:18:28John Coogan?

  Yep.

• 1:18:29Marc Andreessen?

  I also think, you know, headphones are going to get a lot more sophisticated, which is already happening.

• 1:18:33John Coogan?

  Yep.

• 1:18:34Marc Andreessen?

  And so, you know, you do have these, you know, kind of data points coming out. And then, yeah, look, the trillion dollar question ultimately is, are these peripherals to the phone? You know, which is what they are today, or are these replacements for the phone? And, you know, we, yeah, I would say, you know, we have, we allow, I think we have a lot of invention coming, both from new companies and from incumbents who are going to try to figure that out.

• 1:18:52John Coogan?

  Yeah, I always think about the value of like narrowing the aperture on these new technologies. Like with, with the Meta Ray-Bans, I feel like the fact that they aren't also trying to be a screen is actually a feature, not a bug. And I always go back to the iPhone. Like, it was first and foremost a phone. And people bought it because it could make calls, and then it could make text messages. And then it was an iPod. But I, do you disagree with that? Please?

• 1:19:15Marc Andreessen?

  Well, you guys, I don't, you guys might be too young. The first iPhone actually was a bad phone.

• 1:19:21John Coogan?

  How so?

• 1:19:22Marc Andreessen?

  For the first two years, it couldn't reliably make phone calls.

• 1:19:26John Coogan?

  I had like the third one and a friend had one, but I feel like it was still like people were carrying cell phones and that was the least of the expectation. But yeah, I mean, I guess you're right.

• 1:19:36Marc Andreessen?

  So for the first two, it was a classic Apple story because the first, for the first two years, the thing couldn't make, reliably make phone calls. And then it turned out there was an issue with the antenna and with how you held it. And there was the famous email.

• 1:19:46John Coogan?

  Yeah, you would and you would disconnect it.

• 1:19:48Jordi Hays?

  You could basically break the device.

• 1:19:50John Coogan?

  Yeah.

• 1:19:51Marc Andreessen?

  Based on how you held it and somebody emailed, this is when Steve would respond to emails from random people and somebody emailed Steve saying, if I, you know, hold the phone this way, it doesn't make phone calls. And he's like, well, don't hold it that way.

• 1:20:00John Coogan?

  Yeah.

• 1:20:00Marc Andreessen?

  Right?

• 1:20:01John Coogan?

  Yeah.

• 1:20:02Marc Andreessen?

  So even there, it was like, yeah, and people, you know, people forget, it took like five years for the iPhone to find its footing. It took like two years to get the thing. I remember also the original iPhone didn't have, it didn't have broadband data. It was on, it was on the old 2G. It was called the AT&T Edge Network. So it didn't have broadband data. And then of course, it didn't have an App Store, right? It was completely locked down.

• 1:20:20Jordi Hays?

  So the challenges, the challenges for Apple now is that people are so used to perfection with the device that launching a product that isn't perfect, like is embarrassing, right? Like you look at the Vision Pro and it's like, well, the battery's big. Steve would have hated this, right? Like how he never would have shipped this and that being constrained and not being able to innovate because you're tied to this like impossible standard of being on whatever generation 17 of the iPhone and perfecting every element is a real challenge.

• 1:20:51Marc Andreessen?

  So I would say there's a corollary to that. One of the things I've observed over the years is I think technology products become obsolete at the precise moment they become perfect. And your point, what I mean, what I mean by perfect basically is like, yeah, it's like the perfect idealized complete product. Like it does everything you could possibly ever imagine. Everything a customer could imagine, everything you as the technology developer can imagine, it's absolutely perfect. And there's, there's been tons of examples of this over the last 50 years, where it's like the absolute perfect, it seems to be the permanent version of that product. And then it just turns out, that's actually the point of obsolescence, because it means creativity is no longer being applied right into that platform. You're just like, there's just nothing else to do. You're just like, you're, you're done. Right, the product has been realized. And then, and then the cycle is what happens to your point.

• 1:21:34Marc Andreessen?

  The cycle is other people come in with completely different approaches, completely different kinds of products that are broken and weird in all kinds of ways. Um, you know, but are, but are fundamentally different. And so, you know, that is one of the time honored traditions. And, you know, one of the, you know, one of the, you know, things you could say about, you know, Tim is, you know, his willingness to kind of break the mold of Apple only ships perfect products, but, you know, be willing, be, being willing to ship the, uh, you know, the Vision Pro, um, you know, you know, shows a level of determination to kind of stay in the innovation game.

• 1:21:58John Coogan?

  I like that.

• 1:21:59Marc Andreessen?

  Which I think is very positive.

• 1:22:00John Coogan?

  Yeah, yeah, yeah, yeah. That's great.

• 1:22:02Jordi Hays?

  Updated thinking on open source. Since we last talked, uh, there's, there's a lot that's been.

• 1:22:09John Coogan?

  Open AI is an open source company again.

• 1:22:11Jordi Hays?

  Yes, OpenAI is open again.

• 1:22:13John Coogan?

  Yes.

• 1:22:13Marc Andreessen?

  Yeah. Yeah. It looked very encouraging. You know, a year ago I was very, you know, I was, I was getting very distressed about open, you know, whether open source AI was going to be allowed.

• 1:22:20John Coogan?

  Yeah.

• 1:22:20Marc Andreessen?

  Uh, right. It was even going to be legal. Uh, and so, and I think, you know, we're basically through that at this point. Uh, what I was gonna say, we're through that in the US. Um, you know, we'll, we'll see about, we'll see about the rest of the world. Um, and then look, you know, the US-China thing is obviously a big deal, but you, you know, I think it's been that positive for the world that China has been, been so enthusiastic about open source AI coming out of China. Uh, which has been great. And then, yeah, look, OpenAI leaning hard into this, um, you know, and releasing what, you know, what they did is I, is I think fantastic. Um, but both because of, of what they released, which is great, but also just the fact that they are now, you know, willing to do that. And then Elon reconfirmed overnight that he's gonna, you know, open source, you know, start open source in previous versions of Grok. Um, and so, yeah, so we, you know, we, we, we seem to be, we seem to be in a timeline where open source AI is gonna happen.

• 1:23:00Marc Andreessen?

  Um, you know, right now, you know, what you, I think what you would say is it kind of lags the leading edge proprietary implementations by, you know, six months or something like that. Um, but, but I think that, you know, that's a good, if that's the status quo that continues, I think that would be a very good status quo.

• 1:23:14John Coogan?

  What are the rough edges that we need to kind of sand down when we're thinking about, uh, Chinese open source models specifically? Uh, is it, we need to do some fine tuning on top of them to add back free speech? Or do we need to watch for backdoors? It's phone in home if it runs into this specific thing? Like, uh, the Chinese open source thing, it was remarkable because I feel like it really does accelerate the pace of innovation because everyone gets to see, oh, this is how reasoning works. I think that's great. Uh, at the same time. It made me very, it made me much more appreciative of AI safety research and capability research and actually being able to interpret what's going on and say definitively, this model is going to behave weird in this weird way, like the Manchurian Candidate Problem. We haven't found any of that, but it certainly seems like something we'd want to keep an

• 1:23:57John Coogan?

  eye on. But from your perspective, like, what are the, what are the risks that we need to be aware of going into a world where China is really pushing hard into open source?

• 1:24:05Marc Andreessen?

  Yeah, there's two, there's two, and you identified them, but let's, let's, let's talk about both of them. So the phone, so the phone home thing is the, is the easy one, which is you can put up, you know, you can packet sniff, you know, a network and you can tell when the thing is doing that. And you, and plus you can go, you can go in the code and you can see what is doing that. And so you, you can validate, you can even validate that that's either happening or not happening. And I think that, you know, that's important. But, you know, I think people are gonna, people are gonna, are gonna figure that out. You, you can kind of get that problem practically. The, the, the bigger issue is, we, we have this term in the field right now called open weights. And open weights is a loaded term. It, it uses the open term from open source, but of course with open source, the thing is, you, you can actually read the code. You know, with open weights,

• 1:24:49Marc Andreessen?

  you have, you know, just a giant file full of numbers, as you said, that you, you can't really interpret. And then what you don't, what you don't have, what, what most, what most of the open source, open weights models don't have, including, you know, deep seek specifically, what they don't have is they don't have open data, right? Or open corpus, right? So you, you can't actually see the training data that went, went into them. And of course, you know, most of the people building models are kind of obscuring what that, you know, what that training data is in various ways. And, and so when you get an open weight model, you know, the good news is, the, the, the software source is open. The good news is you can run it on your machine, you can verify that it doesn't phone home, but you don't actually know what's happening inside the weights. And so I, I think that, that is going to be a bigger and bigger issue, which is like, okay, how the thing behaves? Like, yeah, what, what has it actually been trained to do? And what

• 1:25:34Marc Andreessen?

  restrictions or directives has it been given in the training, you know, that are embedded in the weights that, that you need to be able to see? You know, this is, I would say, this is coming up as sort of, I would say, a global issue, you know, which, you know, we worry about when these models come from China. Other countries worry when these models come from the US, right? Which is, right? So one of the, one of the phrases you'll hear when you talk to people kind of outside the US is kind of this, this phrase people are kicking around, which is not my weights, not my culture. Right? Right? Or, or by the way, for that matter, not my ways, not my laws. Right? Which is like, okay, like, what actually is this thing going to do? Right, and to your point, the Chinese models, for example, might, you know, never criticize, you know, communism or something. I can tell you, the American models have all kinds of constraints also, right, implemented, you know, usually by a very specific kind of person at a very

• 1:26:18Marc Andreessen?

  specific location in the US. And so, you know, I think that this is a, this is a general issue, and we're going to have to see, basically, people's tolerance levels, being willing to run open weights models where they don't fundamentally have access to the data, and then, correspondingly, I think what we'll see is more open source developers also doing open corpus, open data, so you can see what's actually in them.

• 1:26:37John Coogan?

  Yeah. Obviously, open source is very important in terms of just distributing intelligence broadly, giving people the ability to run their own models and really fine tune them and have control. There's also the big push just to make frontier models and high capability models free. One model is you charge for the premium, you give the free away, it's a freemium model, that's what we're seeing at most of the labs right now. There's also this kind of specter on the horizon of potentially putting ads in LLMs, and what that would do to the world, Jordy got in a little dust up with Mark Cuban on the timeline, deciding whether or not it would be a net good to put advertising in LLMs, what might happen that might be bad there. What, do you have a take?

• 1:27:21Jordi Hays?

  Yeah, my, my point broadly was that ads have been an incredible way to make a variety of products and services online free, and just saying, like, default, just no ads, would potentially, you know, be incredibly destructive. But, yeah, curious your framework.

• 1:27:41Marc Andreessen?

  Yeah, so I should start by saying, like, whenever I personally use an internet service, I always try to buy the premium version of it that doesn't have ads, right? And so, if I can, like, live personally inside an ad-free universe and pay for it, like, that's great. And I'll freely admit, you know, whatever level of, you know, hypocrisy or incongruous, you know, kind of, kind of, kind of results from that.

• 1:27:59Jordi Hays?

  No, the point is choice. The point is choice.

• 1:28:02Marc Andreessen?

  Well, the point is exactly what you said, affordability. So the problem is, if you really want to get to five, if you want to get to a billion and then five billion people, you can't do that with a paid offering. Like it just, at any sort of reasonable price point, it's just not possible. The, you know, global per capita GDP is not high enough for that. People don't have enough income for that, at least today. And so if you want to get to, you know, if you want the Google, if you want the Google search engine, or the Facebook social app, or the whatever AI, you know, frontier AI model to be available to five billion people for free, you need to have a business model, you need to have an indirect business model, and ads is the obvious one. And so I do think if, you know, if you take some principles stand against ads, I think you unfortunately are also taking a stand against, against, against broad access, just

• 1:28:47Marc Andreessen?

  in the way the world works today. And then, and then, look, the other, the other really salient question is, you know, the same question that the companies like Google and Facebook have been dealing with for a long time, which is, are ads purely destructive or negative to the user experience? Or are they actually, if done properly, are they actually either neutral or even positive? Yeah. Right? And this was something that, you know, Google, I think to their credit, figured out very early, which is, you know, a well-targeted ad at a specifically relevant point in time is actually content. Like, it actually enhances the experience, right? Because it is the obvious case. You're searching on a product, there's an ad, you can buy the product, you click to buy the product, that was actually a useful piece of functionality. And so, you know, can you, can you have ads or other things that are like ads or look like ads, you know, different, different kinds of referrals, you know, mechanisms or whatever? Can you have them in such a way that they're actually additive to the, to the product

• 1:29:32Marc Andreessen?

  experience? And you could imagine, just like with searching, with social networking, you could imagine lots of examples of that. People will, you know, the people will, you know, they'll whine or howl at lots of different ways. But I think, you know, I think that hasn't been a bad outcome overall. And I think that, I think it's entirely possible that that's what, what happens with, with these models as well. Yeah.

• 1:29:53Jordi Hays?

  Kind of similar kind of question, what should be legal, kind of trying to create legal frameworks on a number of issues with AI. There's been a number of IP cases that have been working their way through the courts. What can labs use to train models, et cetera? There's been some good outcomes recently. Sam also was talking about how a lot of people are using AI as like a confidant, like a, you know, a friend, things like that. And he mentioned that currently your chats are not privileged. They can be used in a lawsuit or other situations. How optimistic are you that our sort of legal system in the US can get some of these issues

• 1:30:36Jordi Hays?

  right where maybe it can't just be, you know, total free markets, kind of lawless, whatever goes?

• 1:30:43Marc Andreessen?

  Yeah. So in the case of training data, I think that there, I mean, there's a bunch of these copyright, you know, kind of lawsuits happening right now. There's, you know, the big New York Times opening I won, and there's, you know, been a bunch of others. I think in that, for that particular problem, my guess is that problem ultimately has to be solved through legislation. It's ultimately a legislative question. The reason is because it goes to the nature of copyright law itself, you know, which is legislation. And of course, you know, the content industry is already claiming that, of course, you know, using copyrighted data to train, you know, without permission and without paying is sort of, you know, they believe illegal on its face, you know, due to violation of copyright law. The counterargument to that, which, you know, which we believe is, well, it's not copying, right? There's a distinction between training and copying, just like in the real world, there's

• 1:31:25Marc Andreessen?

  a distinction between reading a book and copying the book, you know, as a person. And so there's going to need, I think, you know, the courts are trying to grapple with that. There's a whole bunch of cases, there's jurisdictional questions, you know, probably ultimately Congress is going to have to figure out a, you know, figure out an answer on that. And by the way, the president has kind of, you know, thrown down that gauntlet in his, I think the speech he gave last week or two weeks ago, you know, where he said that, you know, Washington probably needs to deal with that as an issue. So that's one on the on the on the on the on the privacy thing. I think that that one feels like it's a Supreme Court thing to me. It feels like that's the kind of issue that's the Supreme Court. And in other words, like whether, for example, your transcripts are considered your property and whether they're protected against, you know, warrantless

• 1:32:07Marc Andreessen?

  search and seizure. And the observation I would make there is if you look at the march of technology over time. So the Constitution has like very clear, you know, Fourth, Fifth Amendments, you know, very specific rights around the, you know, the things that are yours, you know, such as, you know, your home, you know, being in your home, you know, by the way, the thoughts in your head, right? You know, that the government can't just like come in and take, they can't, you know, they can't just come in and search your house without a warrant. You know, they can't like, you know, put you in a jail cell and beat you until you fess up. Like, you know, there are, you know, we have constitutional protections against the government being able to basically, you know, take information, you know, fundamentally, you know, as well as possessions. And then basically what happens is every time there's a new technology that creates a new kind of sort of, you know, thing that you own,

• 1:32:52Marc Andreessen?

  you know, thing that's yours, thing that you would consider to be private, thing that you wouldn't want the government to be able to take without a warrant, you know, out of the gate, law enforcement agencies just naturally go try to get those things because there are ways to solve crimes. And, you know, it feels like that that's a legal thing to do. And then basically the courts come in later, and they, you know, rule one way or the other. And basically, they say, no, that that actually is also a thing that is protected against, you know, warrantless, for example, warrantless search, you know, or warrantless wiretapping. And so I feel like, you know, this is the latest of probably, I don't know, 20 of those over the last 100 years. And, you know, I don't know which way it'll go. But I think it's going to be a key thing. Because as you know, people are already telling these models, you know, lots, lots of things that they're, you know, that are very personal.

• 1:33:32John Coogan?

  Okay, lightning round, quick questions. We're letting you get out of here in a couple minutes. We're in this age of spiky intelligence. Models are great at some things and then terrible at others. Where are you actually getting value out of AI right now? Where is it falling down for you? Where are you? How are you using AI day to day?

• 1:33:50Marc Andreessen?

  Yeah, so I have two kind of, I don't know, barbell approach. One is for serious stuff. I love the deep research capabilities.

• 1:33:57John Coogan?

  Yeah.

• 1:33:57Marc Andreessen?

  And so, and I'm doing this in a bunch of models, but like the ability to basically say, I'm interested in this topic. And then I just, I just felt like, write me a book. And I, you know, I kept kind of hoping for the longest book I can get. I always tell it like, go longer, go longer. More sophisticated, you know, but the leading edge models now they're getting up to like 30 page PDFs. You know, that are like completely well formulated, you know, basically long form, long form essays. You know, it's just like incredible richness and depth. And, you know, if it's 30 pages today, I'm sort of crossing my fingers it'll get to, you know, 300 pages coming up here in the next few years. And so I, you know, I'm able to basically have the thing generate enormous amounts of, of reading material with just like, I think incredible richness and depth and complexity. And then, and then the other side of the barbell is humor. And I've, I've posted some of these to my X feed over, over the last couple of years, but

• 1:34:41Marc Andreessen?

  I think these models are already much funnier than people give them credit for.

• 1:34:44John Coogan?

  Really?

• 1:34:45Marc Andreessen?

  Yeah, I think, I think they're, they're actually quite highly entertaining. A while ago, I posted, I had-

• 1:34:51Jordi Hays?

  Specific, specific formats, like we know that be-

• 1:34:53John Coogan?

  Chatting back and forth?

• 1:34:55Jordi Hays?

  Be Marc Andreessen, you know, that, that format's-

• 1:34:57John Coogan?

  Take a dip in my pool in my office.

• 1:35:01Marc Andreessen?

  They're really good. So they're really good at green text. That works really well, but the, the, for some reason, the ones I find hysterical are the, I have it write screenplays. You know, for like TV shows or, or plays or movies. And I, I posted, I had it write a new season of the HBO Silicon Valley, you know, set 10 years later. And I had it write like an entire, I had it write like 10, 10 scripts for a complete season. And of course I just said, you know, make it like Silicon Valley, except, you know, it's happening at, it is in 2021, it kind of peak woke. And I thought it was just, I think it's just, you know, I'll sit there at two in the morning and just like laughing my ass off at how funny this thing is. And so I, I think these things are actually, are actually already like extremely funny. They're extremely entertaining when they're, when they're, you know, when they're used in that way. And I, I do, I do enjoy that a lot and I generate a lot of those that I don't post.

• 1:35:47John Coogan?

  Stay in the group chats.

• 1:35:49Marc Andreessen?

  It's probably good.

• 1:35:50Jordi Hays?

  They're your property.

• 1:35:51John Coogan?

  Yeah, hopefully the fourth amendment holds on these.

• 1:35:54Jordi Hays?

  Yeah.

• 1:35:55John Coogan?

  I have one last question.

• 1:35:56Jordi Hays?

  Go for it and then I've got one more.

• 1:35:57John Coogan?

  All right. How do you get a job as a venture capitalist in 2025?

• 1:36:01Marc Andreessen?

  So I mean, look, the best way, the best way to do it is to have a track record early as somebody who is like in the loop specifically on new product development. And so somebody who, you know, be like deeply in the trenches at one of these new companies in one of these spaces, you know, participate in the creation of a great new product and a great new company and, you know, really demonstrate that you know how to do that. You know, there's there, you know, there are great VCs who have not done that. But, you know, I think that is sort of a foundational skill set, you know, for working with the kinds of founders that you want to work with, who are going to, who, you know, are going to want you to have, you know, kind of very interesting things to say on that. As I think, you know, still the best way to do it.

• 1:36:36John Coogan?

  Yeah, like feel the growth, be immerse yourself in the growth, the aggressive growth environment, and then you'll be able to identify it when you see it from afar.

• 1:36:45Marc Andreessen?

  Yeah, that's right.

• 1:36:46Jordi Hays?

  Last question for me. State of M and A in your mind, how are you advising, you know, companies where you're on the board or just the portfolio broadly around what they should expect now and in the near future?

• 1:37:00Marc Andreessen?

  You mean in terms of whether you can get things approved?

• 1:37:03Jordi Hays?

  Basically, yeah.

• 1:37:04Marc Andreessen?

  Yeah, yes. So look, approval still, approval is not a slime dunk. There was, you know, there was a, I just saw there was a medical device company this morning, you know, where the acquisition was not allowed by the FTC. So, you know, there is still scrutiny. It's, you know, it's obviously a very different political regime in Washington, but, you know, this is, this is not, you know, by their own statements, this is not an administration that believes in total laissez faire. M and A, and it definitely wants to, you know, in their view, maintain a very healthy level of market competition.

• 1:37:30Jordi Hays?

  Yeah. How many, do you expect, do you expect certain companies to be negatively impacted by the Figma story, right? You have this deal gets blocked, successful, you know, IPO, Lina Khan is taking a victory lap. You know, many people are responding and joking, saying, you know, someone, Lina cuts off the arm of a pianist and they endure and can create a masterpiece and then, and so I expect, and then you look at the example with, you know, Roomba, I think it was, where Roomba had a deal with Amazon, it was blocked and

• 1:38:04John Coogan?

  Fell apart.

• 1:38:05Jordi Hays?

  And the company has just been a shambles ever since. So my concern is that people look at Figma and say, you should be independent, you just figure it out.

• 1:38:12John Coogan?

  Nothing can go wrong.

• 1:38:14Marc Andreessen?

  Yes. Yeah, I mean, it's kind of taking a victory lap was very disconcerting. Um, and for exactly the reason you said, which is survivorship bias. Um, right. Which is you, you, you, you pick the one that worked out. And then, you know, it's the, it's the airplane, the red dots, the airplane name. You know, you, you, you ignore the 50 that are in the ground, uh, that you've never heard of. Um, and so that, that was very disconcerting because that, you know, it's sort of the central planning fallacy, which is like, we make centrally planned economic decisions. We have one example. You know, it's like in Europe, it's like, yeah, well, the, the bottle caps actually don't fall off the bottle, right? Like, you know, it works.

• 1:38:47Marc Andreessen?

  Right? It's like, okay, but, but do you want to live in, you want to live in an economic regime in which that, you know, the government has dictated bottle cap design? The answer is clearly no. Uh, because the downside consequences of thousands of ways.

• 1:38:58Jordi Hays?

  Even looking at that, uh, you know, the Chinese model, which is, you know, people can say they're picking winners, but to get to maybe picking a winner, you have this intense bloodbath of competition where, you know, teams need to rise to the top and sort of prove themselves before they get any of that real, like, you know, meaningful state benefit.

• 1:39:19Marc Andreessen?

  Yeah, that's right. And so you just, you just, yeah, you just, you just have this adverse selection, survivorship bias thing where you just, you don't pay attention to all the collateral damage. So I, I, I do think that mentality is like super, super dangerous. Um, and so, yeah, look, I think companies just have to be very thoughtful about this, both acquirers and acquirers. Uh, you know, and the big thing is if you're selling a company, like you just need to anticipate that you might, you might not get it through. And if you don't, they're sort of like, okay, number one, is there like a big enough breakup fee, right? Are you going to get, you know, paid for the, you know, paid for the, the, you know, the damage that you're going through? Um, you know, and how is that structured on the one hand? And then two is, yeah, look, do you have the kind of company culture that's going to be able to withstand that? Um, and is your business, you know, strong, strong enough to be able, to be able to get through that? And it's, it, it is a real risk and something worth, you know, taken very seriously.

• 1:40:02Jordi Hays?

  Yeah. And that's, that's why it felt emotional. We were at NICI last week. It felt emotional this, that, that the, the Figma team was, was able to like effectively just like restart the business and say like, we're, we're, we're taking this all the way. So.

• 1:40:17Marc Andreessen?

  If you talk, uh, the way to think about it, if you talk to any really successful company, what they'll tell you is, yeah, over the years, we had these like crucible moments in which like we almost died, right? But we like pulled together and we pulled it off. And then that became like, you know, one of these central kind of mythical events in the history of the company that we always refer to and of like, my God, we got through that and we're so strong and tough and we've been forged in fire and now we can do anything. And it's like, yeah, that's great. And then there's 50 other companies that have those crucible moments blew up and died. So yeah, like it's all of the lessons learned on this stuff. They're all conditional on like survival. And so they, these things need to be taken incredibly seriously. You know, which, which the great CEOs do.

• 1:40:55John Coogan?

  Yeah. Well, thanks so much for joining. We'll let you get back to your day. We already give you five minutes over. Next time we have to book five hours because this is fantastic. I got 20% of the way through.

• 1:41:04Jordi Hays?

  Twenty four hour TV.

• 1:41:05John Coogan?

  Yeah, we would love to have you again. Enjoy the rest of your day. We'll talk to you soon, Mark. Have a good day. Bye.

• 1:41:11Marc Andreessen?

  Thank you, guys.

• 1:41:13John Coogan?

  We're breaking down the X's and O's of the GPT five launch today. GPT five launched from OpenAI. We have Sam Altman, founder, CEO. He briefly got cut from the team in November of 2023, but he's back leading the team for the 2024, 2025 seasons. He seems healthy. He's doing great today. He went on at 10 a.m. to break down the launch of GPT five. He has a couple of key plays in his playbook, in his arsenal. He's got a solid ground game, lots of quick posts, hitting the timeline, probably in lowercase. Then he might air it out with a couple thousand word essay. We've seen him do this before. It's a bit of a Hail Mary. Maybe AG has a thousand, a couple thousand days away. Maybe

• 1:41:54John Coogan?

  we're in the soft singularity, but he's very strong there with the long post when he needs to be. It's up his sleeve if he needs it. Then he can also pull out the vague posting. He was doing this last night, posted a picture of the Death Star. No one knows what it means. Maybe it was taking a shot at the doomers who are on the defense today. So he's also known for driving supercars. That lets him get to the office faster. He's saving time and money. You can save time and money by going to ramp.com. Easy use corporate cards, bill pay and accounting and a whole lot more all in one place. And so he is, he also gave, apparently, this is a rumor, he gave every OpenAI employee who's been with the company for more than two years, $1.5 million. A lot of people say, 1.5 million, that's not

• 1:42:37John Coogan?

  enough for a big house in San Francisco, but it is enough for a supercar. So that's probably why he picked that number. And that's why, that's what the OpenAI team will be doing with that money. They'll be buying Aston Martin Valkyries, Pagani Huayras, McLaren Sabres, Ferrari Daytona SB3s. They can get a Koenigsegg, Gomera. They could get a Singer, DLS, or a Bugatti Veyron. It would have to be used. They could also get the Bentley Bacalar. There's only. There's only 12 of those ever made. It's an open top two seater roadster. It's coach belt. So that's going to run your 1.5 million, but that's perfect. You just got the 1.5 million bonus. So put it to work, spend it all in one place on a car. This is financial advice.

• 1:43:18John Coogan?

  Yes, exactly. Then you got Greg Brockman. He's joining at noon. He's extremely well rested. He's actually coming off a sabbatical right now. That's very exciting. He should be injury free for the rest of the season. He cut his teeth at MIT and then he got drafted by Stripe in 2010. Microsoft tried to do a trade deal during the 2023 chaotic trade deal, trade window that opened up post Sam Altman ouster, but he stuck with the OpenAI team and now he's president of the company. Then you got Mark Chen. He's coming on at 1130 today. He's the chief research officer. The rumor is that he turned out a maxed out contract to head the Metallamas, but he's sticking with the OpenAI team. He was an MIT undergrad,

• 1:44:01John Coogan?

  also worked at Jane Street before joining OpenAI in 2018. Then we got Sarah Fryer coming on the show at 1230. She's the CFO of OpenAI. It's her job to find bank accounts big enough to fill all the cash they're raising. It's a tough job. You got to find, okay, this bank account, will it hold 10 figures? Will it hold 11 figures? Will it hold 12 figures? Like A lot of cash in this one. Exactly, exactly. She's also going to be defining the non-GAAP metrics that will be catnip for Ben Thompson in just a few years. We're excited to talk to her about how she's measuring the success and the health of their business. Obviously, it's not just revenue, it's not just top line, bottom line. We're going to want to know about queries. We're going to be want to know about DAUs, all those non-GAAP metrics. That's where

• 1:44:44John Coogan?

  people are going to be tracking when IPO day comes, hopefully soon. And then we also have Brad Lightcap. He's joining at 235. He entered the league as an investment banker. Let's give it up for the investment bankers. They don't get enough credit around here, but we love the investment bankers. Then he got drafted by Y Combinator before joining OpenAI as CFO in 2018. Now he's the chief operating officer. And then we have Max Warser. He's in charge of post-training, fine-tuning these models, getting them into the fighting performance to put on a display of authority on GPT-5 launch day. Now, let's flip it over to the defense. They're going up against the timeline. They're going up against the vibe checks. We got the doomers. The doomers, they're led

• 1:45:27John Coogan?

  by Eli Azar Udikowski. Admittedly, everyone knows this. No one debates this. The doomers have had a terrible season. But you'd expect to see at least a few hail marys about GPT-5 creating bioweapons thrown up on the timeline today. Probably won't be bangers, probably won't get 1,000 likes, but you'll be seeing them here and there, mostly in the replies. We've also seen some doomers talking about GPT-5 being available to every government employee. And Eli Azar had some harsh words about that. Don't give the keys to Sam Altman. Don't give the keys to the government to OpenAI. He was upset about that. But in general, the doomers not putting much of a fight up today. Then you got Claude. Interesting, Claude

• 1:46:08John Coogan?

  was caught playing for the wrong team earlier this week. Anthropic, they're on defense today, but we saw them take out OpenAI's key pinch hitter Claude. The Claude code API was playing for the OpenAI team, but they shut that down and Claude is no longer pinch hitting for OpenAI. Then you got the Elon stands. The ground game's going to be there. It's going to be, it's going to be strong. The Elon stands are going to be tracking the benchmarks relentlessly. We know XAI loves to benchmarks and all the Elon stands are going to be calling out GPT-5 for any, any misaligned benchmarks. If they fail, humanity's last exam, it's

• 1:46:50John Coogan?

  over. It's over. They'll also toss up the occasional unhinged conspiracy theory. Moving on, Gemini. The betting lines have shifted big time. People thought Gemini was out of the game. They're so back. Polly Market has Gemini at, what, 75% chance of being the best model towards the end of the month. This is of course, based on the LM Arena. More vibes based benchmark, but Gemini will probably be quiet today. They usually don't try and front run press releases. They usually try and sit back, let the model speak for themselves, let the API credits work their way through the latest YC Demo Day batch and get the product

• 1:47:30John Coogan?

  into the hands of people. And so expect to see a big glossy conference in a couple of weeks. Demoing Gemini 3 should be a good rebuttal from the Gemini's. Then you got the Metal Lamas. Zuck's been on a poaching spree. He's rebuilding the team during the off season. Now he has a stacked roster and he's ready to go duke it out, but no one knows exactly what's going to be in the playbook. Is he gonna go consumer? Is he gonna go API? Is he gonna turn into a hyperscaler? We don't know, but we know they got a stacked team. They got Alex Wang, they got Nat Friedman, they got Daniel Gross, they got tons and tons of other researchers. They've been raiding every other team, completely reset the salary cap for the league and it's been, it's been an absolute clinic

• 1:48:15John Coogan?

  in terms of recruiting over there at Lama. Then you got the final benchmark, Arc AGI. This benchmark stands. GPT-5 couldn't get past this defense. And Arc AGI, you know, sitting there right in the end zone, just swatting him down, swatting him down all day. You think, you think, you think we're super intelligence around the corner? Arc AGI denied, denied. Tyler, give us the update on Arc AGI. Where does everything stand? How GPT-5 do? Does it matter? Should we care about Arc AGI? We love the team behind them, but is it an important benchmark? Should we be tracking it today?

• 1:48:56Speaker 02

  Arc AGI V1 and V2, right?

• 1:48:57John Coogan?

  Okay.

• 1:48:58Speaker 02

  On both of them?

• 1:48:58John Coogan?

  And V3?

• 1:48:59Speaker 02

  V3. I actually don't know if-

• 1:49:01John Coogan?

  No one's been, no one's even tested V3 yet.

• 1:49:03Speaker 02

  Yeah, no one's even really close there.

• 1:49:04John Coogan?

  But how are we doing on V1?

• 1:49:05Speaker 02

  V1. GPT-5 is at 65.7. Unfortunately, that's going to be 1% just short of Grok 4. 66.7. Okay, Arc AGI 2.

• 1:49:17John Coogan?

  The Elon stands are going to be going wild with that.

• 1:49:19Speaker 02

  Arc AGI 2, 9.9%.

• 1:49:21John Coogan?

  9.9%.

• 1:49:23Speaker 02

  Grok 4, 16%.

• 1:49:25John Coogan?

  16%.

• 1:49:26Speaker 02

  Kind of brutal, you know, Arc AGI mugging.

• 1:49:29John Coogan?

  Rough showing, rough showing.

• 1:49:30Speaker 02

  Some people have accused Grok 4 of being slightly benchmarked.

• 1:49:33John Coogan?

  Yes.

• 1:49:34Speaker 02

  You know, this is, you know.

• 1:49:35John Coogan?

  They might have a team working on it. What's the, what are the pros and cons? We know the cons of benchmarking, of benchmarking. You're overfitting on something that might not actually drive consumer value. It might not actually solve real world problems. It might not increase DAUs or revenue or ARR, anything that really matters. It might not even get us closer to super intelligence. Give me the counter argument. Why is benchmarking good?

• 1:50:03Speaker 02

  The bull case for benchmarking.

• 1:50:04John Coogan?

  The bull case for benchmarking, benchmarking. Break it down for me.

• 1:50:08Speaker 02

  Yeah, so I think the idea is basically, this is almost like a non AGI pilled kind of take, right? So if you don't have a super general intelligence.

• 1:50:17John Coogan?

  Yep.

• 1:50:19Speaker 02

  Your ability to benchmark basically proves your ability to solve some like kind of specific tasks. So there's this thing about the, the gas station benchmark. Yeah, it's called getting spiky.

• 1:50:32John Coogan?

  Getting spiky, adding more spikes to the spiky intelligence.

• 1:50:35Speaker 02

  Yeah, I think it was Rune who had this, this tweet about.

• 1:50:37John Coogan?

  Yep.

• 1:50:38Speaker 02

  That the gas station benchmark.

• 1:50:39John Coogan?

  Yep.

• 1:50:39Speaker 02

  Right? I don't care if he said something like, I don't care about AI solving gas stations. If it has a gas station benchmark, something like that. But the idea is like, if, if you, if the, if making the gas station benchmark.

• 1:50:55John Coogan?

  Rune said, my bar for AGI is an AI that can learn to run a gas station for a year without a team of scientists collecting the gas station data set in, in capital letters.

• 1:51:07Speaker 02

  And then my take is basically, I don't care how they got to the. Like, I don't care how they made it run the gas station. I care how fast it gets here.

• 1:51:16John Coogan?

  That it runs it. If we can run the gas station with AI, that's good enough.

• 1:51:20Speaker 02

  If you have a team who's, you know, your benchmarking team, that just proves that like if you have some task that's like really important that you want to get done,

• 1:51:27John Coogan?

  Yep.

• 1:51:27Speaker 02

  they can just figure it out. So it's like RL for business. This is like the same thing, RL for law.

• 1:51:31John Coogan?

  Yeah.

• 1:51:31Speaker 02

  All these like

• 1:51:32John Coogan?

  This is what

• 1:51:32Speaker 02

  specific verticals.

• 1:51:33John Coogan?

  Miramar is doing this with thinking machines, right? Like RL for businesses. Come into your organization, understand the most, the most valuable business processes out there that could potentially be RL'd against, that could be turned into a benchmark.

• 1:51:48Speaker 02

  Yeah.

• 1:51:48John Coogan?

  And then, and then, you know, bench hacked, because I don't care if you're hacking, you know, if I have translate this type of document to this type of document for my business. If you can do it with 100% accuracy, I don't care that you bench hacked it.

• 1:52:01Speaker 02

  Yeah, exactly. Like benchmarks right now are not like economically valuable. Like if you're, if you're really that much better at MMLU.

• 1:52:07John Coogan?

  Yes.

• 1:52:07Speaker 02

  It's like, is, are you producing that much value?

• 1:52:09John Coogan?

  Yes.

• 1:52:10Speaker 02

  Probably not, but if you have, if you make some new benchmark, that's, you know, your tax benchmark. I think Anthropic just released that fairly recently.

• 1:52:16John Coogan?

  Oh, sure, sure, sure.

• 1:52:17Speaker 02

  That's like, I don't care if you benchmark on that.

• 1:52:19John Coogan?

  As long as it does the taxes, it's good.

• 1:52:22Speaker 02

  It's going to do the task.

• 1:52:22John Coogan?

  Yeah, yeah, yeah, yeah, that makes sense. What about the, what does it say that it feels like OpenAI seems capable of bench hacking? It seems like they've opted not to. Is that because bench hacking has the risk of giving you negative aura? Because if you're accused and found guilty of bench hacking, you could, it, it, it, it often reveals that you're not building this one beautiful, you know, super intelligence to rule them all.

• 1:52:56Speaker 02

  Yeah, I think it's also like, maybe we're just looking at the wrong benchmarks.

• 1:53:00John Coogan?

  Mm-hmm.

• 1:53:00Speaker 02

  Like maybe there, um, there's a bunch of like interesting benchmarks about like, there's this one I really like. It's the Minecraft benchmark.

• 1:53:07John Coogan?

  Yeah, yeah.

• 1:53:07Speaker 02

  Where you have to like build, you like give it some castle and how, how good it looks. Or there's the one you always see about, um, the unicorn.

• 1:53:14John Coogan?

  Yeah.

• 1:53:15Speaker 02

  That's, and it's, um, so you use this like math package that does like rass and stuff, but you ask it to, to draw a unicorn.

• 1:53:20John Coogan?

  Oh, I've seen that, yeah.

• 1:53:21Speaker 02

  Those are really good. Cause that kind of shows the creativity, stuff like that.

• 1:53:24John Coogan?

  Uh, walk us through TBPN bench.

• 1:53:28John Coogan?

  And what we will be benchmarking the AIs against going forward. Have you heard about this?

• 1:53:33Speaker 02

  Reps of 225.

• 1:53:35John Coogan?

  That would be close, but it's difficult because the humanoids kind of changed that and you can just use a normal actuator. This is truly for a large language model. You feed in our data set. We have a public data set, a private data set presumably at some point, but walk us through TBPN bench.

• 1:53:52Speaker 02

  Yeah, so I'm yet to try this on 225. I don't think it's out yet for public use. I don't have it. But I can tell some of the questions, right? So the first one, I have this picture of a horse. You have to guess the breed.

• 1:54:04John Coogan?

  Yep.

• 1:54:04Speaker 02

  So let me see, I think, I don't want to say it in case 225 is listening, but it is, may or may not be a Caspian horse.

• 1:54:11John Coogan?

  Okay. And it's failing right now.

• 1:54:14Speaker 02

  03 is failing.

• 1:54:14John Coogan?

  03 is failing.

• 1:54:15Speaker 02

  Oro is failing.

• 1:54:16John Coogan?

  We tried, yeah, we got to try Grok and Gemini.

• 1:54:20Speaker 02

  All out, yeah.

• 1:54:20John Coogan?

  Horse identification. This seems extremely hackable, but at the very least, if we get one scientist to go off and collect the horse data set and then bench hack it, I think we will have done our job.

• 1:54:33Speaker 02

  Yeah. So that's the first question.

• 1:54:34John Coogan?

  Yes.

• 1:54:35Speaker 02

  The second one is, I have two pictures of the before and after of this guy, and it's which peptide did he take to achieve this body transformation?

• 1:54:45John Coogan?

  Yep, yep, yep.

• 1:54:46Speaker 02

  So it fails there.

• 1:54:47John Coogan?

  It fails there. So you have a data set of what peptide does what to the human body? Where'd you find that?

• 1:54:52Speaker 02

  Well, you know, Wikipedia has a lot of this stuff.

• 1:54:54John Coogan?

  Okay, okay. You would think they'd be able to cheat this around with 03, just reason, who is this person? Go look up what they've said they've taken, and then boom, you have the answer.

• 1:55:03Speaker 02

  Well, at first with 03, when I was prompting it, I would like save the photo, but then it would have the metadata, or the file name would be like Caspian horse or something.

• 1:55:11John Coogan?

  Yeah, yeah, yeah. Okay. And then the third one?

• 1:55:14Speaker 02

  The third one, I pass in an audio file of a car revving. It has to pick which one.

• 1:55:20John Coogan?

  It has to pick, it has to identify the car.

• 1:55:21Speaker 02

  The car, yeah.

• 1:55:22John Coogan?

  From the engine note.

• 1:55:23Speaker 02

  From the engine.

• 1:55:23John Coogan?

  And it's not doing it currently?

• 1:55:25Speaker 02

  It's, no, it's wrong.

• 1:55:26John Coogan?

  This is a good benchmark.

• 1:55:28Speaker 02

  We ran these real last exam.

• 1:55:30John Coogan?

  Yes, yes, exactly.

• 1:55:32Speaker 02

  So I think those are pretty solid. I have some more. Obviously, I don't want to make them public in case anyone's going to try to, you know, benchmark this.

• 1:55:38John Coogan?

  Of course, of course.

• 1:55:39Speaker 02

  We'll see, hopefully. It's funny because.

• 1:55:43Jordi Hays?

  I was, I was mentioning the other day, this, this app that my dad had of like tracking the, that you just set your phone up and it just automatically detects which birds are in your backyard. So.

• 1:55:53John Coogan?

  Yeah. I mean, this has to be extremely solvable. It's just something that it, it, it, it reveals the lack of like general, general intelligence when, when you have to go and, and collect the horse data set, which should just be out there, or the engine note data set, which should just be out there. Um, but, but, but clearly we are in the age of go in RL on the, on the individual problem. And we are looking at like the power law of capabilities. Knowledge retrieval is clearly a, you know, 12 billion dollar a year market that consumers will pay for. That will probably grow significantly. Um, and, and then health and therapy and shopping and all the other features that Fiji Simo laid out, uh, in her

• 1:56:37John Coogan?

  post. This is kind of like, you know, what will be RL'd against because those are key pockets of value in the, in the consumer economy. And the same thing will happen in the business economy. But in the B to B context, you'll probably see an individual startup building on top of an API. But even then, most of the, most of the model platforms offer kind of RL as a service, fine tunes as a service, something where if you're starting to spend tens of millions of dollars, they will do some customization on top of the model. So that could be the regime for the next few years as we go into this like, you know, uh, instead of like this centralizing AI force, there's only one company. There's actually like a Cambrian explosion of a ton of companies doing a bunch of different things.

• 1:57:19John Coogan?

  We are joined in person by Rahul Sonwalkar. Did I say that correctly?

• 1:57:23Jordi Hays?

  That's perfect.

• 1:57:24John Coogan?

  And he is here because we are crowning him the king of the application layer. Never talked down on the future first ballot Hall of Famer. They said, don't build a rapper. Don't build a rapper. You're gonna get steamrolled. He didn't listen and he's built a beautiful business at Julia.

• 1:57:42Jordi Hays?

  It's a good product, sir.

• 1:57:43John Coogan?

  It's a good product.

• 1:57:44Jordi Hays?

  When asked, when asked if, uh, my value would accrue to the model layer or the application layer, he said, it's a good product, sir.

• 1:57:50John Coogan?

  Why not both? Why not both? Uh, well, what was your reaction to GPT-5? Uh, is it gonna make your life easier? Is it, it's not gonna put you out of business, right?

• 1:57:59Rahul Sonwalkar?

  It's not putting us out of business, it's making our product better.

• 1:58:01John Coogan?

  Yeah, yeah.

• 1:58:02Rahul Sonwalkar?

  Basically making every AI application layer product better.

• 1:58:06John Coogan?

  Yeah.

• 1:58:07Rahul Sonwalkar?

  Also, it's half the cost of O3. So it's much cheaper.

• 1:58:11John Coogan?

  Okay.

• 1:58:11Rahul Sonwalkar?

  So it helps you, helps your margins. It means you can.

• 1:58:14John Coogan?

  Don't say that out loud, though, because you don't want your customers to ask for a 50% discount, right?

• 1:58:18Rahul Sonwalkar?

  Well, so we pass on the savings to our customers.

• 1:58:20John Coogan?

  Oh, you do, okay.

• 1:58:21Rahul Sonwalkar?

  And what we do is we have the model generate more tokens, think for longer.

• 1:58:25John Coogan?

  Yeah.

• 1:58:25Rahul Sonwalkar?

  And then produce better results.

• 1:58:26John Coogan?

  Yeah, yeah. Because we're still in, we're still in the, the era of just, let's get the best possible result. Let's get, uh, let's just actually like the, I, I don't know. What, do you have a, do you have a rough benchmark of like cost per task? Like if I, if I want to, um, you know, crunch our analytics across, you know, look at the trends on our views on X, YouTube, Instagram, we have a bunch of data sources. Sometimes they're in spreadsheets, sometimes they can be linked. I export those all, I have a bunch of CSVs, maybe I put them in a database. I link it up to Julius. And then I want to do an analysis. That could be a couple hours of a data analyst's time. That's going to be hundreds of dollars, even at the low end, probably thousands of dollars for like a simple analysis,

• 1:59:10John Coogan?

  just on a opportunity cost basis for an individual employee. How much are you thinking it should cost for, uh, like the modern frontier best model with the most thinking? How much should that cost on inference?

• 1:59:23Rahul Sonwalkar?

  So there's a couple ways to think about this. You know, the way we think about this is how much would it cost for you to have a data scientist or a data analyst for every one of your employees? Your operations team, your finance team, your, uh, marketing team, your product team.

• 1:59:36Jordi Hays?

  It would pretty much bankrupt every company.

• 1:59:40John Coogan?

  Well, I don't think we can hear you do that.

• 1:59:44Jordi Hays?

  All right, all right.

• 1:59:45John Coogan?

  You still have a job. The, the, the spacemen are out, we're not going to space today. Although Firefly did IPO up 36%. If you didn't see the news, very good news. Firefly stock surges 34% in debut. Congrats to everyone over there.

• 1:59:57Rahul Sonwalkar?

  I love the, the physical newspaper.

• 1:59:59John Coogan?

  We love the physical newspaper.

• 2:00:00Rahul Sonwalkar?

  You gotta do that.

• 2:00:01John Coogan?

  Yeah, we're maxing, we're maxing. We read the Wall Street Journal. Today is a special day, it's Friday, so it's the mansion section.

• 2:00:07Rahul Sonwalkar?

  We're, we're news maxing here.

• 2:00:08John Coogan?

  How many pools do you have?

• 2:00:09Rahul Sonwalkar?

  We're news maxing. Right now I have, uh.

• 2:00:11John Coogan?

  Zero?

• 2:00:11Rahul Sonwalkar?

  Zero right now, yeah.

• 2:00:12John Coogan?

  Well, you gotta, because the new thing is having two pools, a pool for every season. People are increasingly getting both indoor and outdoor swimming pools. So, yeah, get on Zillow.

• 2:00:22Rahul Sonwalkar?

  Get on Zillow, Zillow maxing here.

• 2:00:24John Coogan?

  Okay, anyway, you were telling me how much, so yeah, I mean, it seems like, you know, most, most of the application layer will be, you know, productivity tools, Allah Slack, Allah, a, you know, like Addio, our Salesforce, our CRM partner, or something where, you know, you're doing like seat-based pricing almost, maybe there's consumption-based pricing, but you're, you're kind of distributing the cost, you're making everyone slightly more productive, and you're charging, you know, on the order of tens or hundreds of dollars per employee per month, something like that, right?

• 2:00:56Rahul Sonwalkar?

  Absolutely. I mean, it's, it's not just slightly more productive, but it's, it's also like getting insights when you need them, right? Sunday, Sunday night, you have, you're prepping for a big meeting on Monday, you can't reach out to your data analyst and get, you know, your insights in that moment.

• 2:01:10John Coogan?

  Yeah, yeah.

• 2:01:10Rahul Sonwalkar?

  And so the, the convenience of having an AI that can help you with that is just invaluable.

• 2:01:15John Coogan?

  Yeah, it's going from zero X to one X engineer all over the org. We've seen this with, with a lot of the, the vibe coding tools, Figma, and adding like vibe coding to that product. You've taken designers and you've given them the ability to write just like a little bit of code, and that's really helpful. And you're doing that for data scientists, and not just data scientists, but actually like business operations, people who probably would be intimidated by an iPython notebook, presumably.

• 2:01:40Rahul Sonwalkar?

  Exactly.

• 2:01:41John Coogan?

  Nailed it. Okay, I want everyone's feedback on my take. Vittorio had this post, he said, Sam Altman's doing the Apple stance TM, it's over. And I think that the reaction to GPT-5 yesterday was, was, was interesting because there's a lot of people that say like, it's better model, like it's cheaper, it's good, it solves, it moves the ball down the field. It's a good model, sir. But I think people were mostly reacting to, they had expectations of superintelligence, they had expectations of God in a box, there's been so much rhetoric around that, like, you know, that step up from GPT-3 to GPT-4 was insane.

• 2:02:23Jordi Hays?

  Five just felt like a big number, and it felt like we'd be discovering and Novel science.

• 2:02:30John Coogan?

  Totally, totally, yeah.

• 2:02:32Jordi Hays?

  Not quite.

• 2:02:32John Coogan?

  Everyone was expecting like a binary qualitative jump where, you know, everyone recognized that, you know, GPT, when ChatGPT dropped, we passed the Turing test. And the next, the next hurdle is like, I don't know, maybe superintelligence, whatever that means. Uh, like, you know, massive, you know, just, you just hit it with a prompt, it just solves everything. It does everything, uh, every other startup, it kills all the rappers. Like, the expectations were just so high, uh, that it was hard to match. So even, even though there were a bunch of solid improvements. And remember, the number one thing that I was asking for was just like, get rid of the model picker. Like, and I had, I, I actually was playing around with GPT five yesterday. And I was really happy that I was able to say, hey, think about this. And I didn't have to go to the model picker and it just went and just kicked off a reasoning chain. It was great. Got me a great answer.

• 2:03:15Jordi Hays?

  But power users so far are very upset about this. They want the model picker back.

• 2:03:21John Coogan?

  True, true.

• 2:03:22Jordi Hays?

  Is what I've been seeing generally.

• 2:03:23John Coogan?

  But that always happens with these consumer products. Like, I, I remember when, um, you know, any time something would switch to the, an algorithmic feed, all the people that were like, no, I perfectly curated my list of, this happened in YouTube. Like, back in the day, you, like, the default YouTube view used to just be your subscriptions. And so you would never see a video unless you subscribe to that person. Terrible for discovery. And, but all the hardcore YouTubers loved it because if I put a YouTube video out, I know that my audience is going to see it. Now I gotta do it on the algorithm.

• 2:03:53Jordi Hays?

  You actually had distribution.

• 2:03:54John Coogan?

  You, it was more like a sub stack.

• 2:03:56Jordi Hays?

  Earn it every single time.

• 2:03:57John Coogan?

  Yeah, exactly. And, and the same thing happened. I remember there were like protest groups on Facebook when they launched the news feed. It's like the most dominant, like, product of all time. It's like incredibly valuable.

• 2:04:08Jordi Hays?

  Protest right now on Reddit, people that.

• 2:04:10John Coogan?

  Oh, yeah, I want the old.

• 2:04:11Jordi Hays?

  Four, uh, four oh, four or five.

• 2:04:14John Coogan?

  Yeah. I think, I, I think those voices will be like, personally, I think people will get over it pretty quickly. And I don't think that, that those particular, that, that, that small cohort of like chattering, the chattering class will be, uh, will be like, they'll, they'll get over it and they'll stick around.

• 2:04:30Jordi Hays?

  Economy is in trouble.

• 2:04:32John Coogan?

  What do you have for me, Tyler?

• 2:04:33Speaker 02

  Uh, I, I don't know if I agree with that. Like, there was that whole funeral for Claude three. Did you see this?

• 2:04:38John Coogan?

  No, oh, yeah, yeah, yeah, yeah. They have that in person, right?

• 2:04:40Speaker 02

  Yeah, it's like for, um, I think some people like really like the personality of certain models.

• 2:04:44John Coogan?

  Yeah, yeah.

• 2:04:44Speaker 02

  And those are like, it's not just intelligence. It's like how it like talks to you.

• 2:04:48John Coogan?

  Yeah.

• 2:04:48Speaker 02

  And if people would make like some kind of connection with that.

• 2:04:50John Coogan?

  Yeah.

• 2:04:51Speaker 02

  I think it's.

• 2:04:51John Coogan?

  But you know, I mean, how many people, how many people attended that funeral? Versus DAUs.

• 2:04:58Jordi Hays?

  It looked like a lot, but it was more of a party.

• 2:05:00John Coogan?

  Yeah, I guess it was a party. But as a percentage of the 100 million DAUs of these apps, like where are we? Like 1%? No, it was like 40 people probably, right? Like it's just, it's just not, it's just, I mean, yeah, there were protests at, at Facebook HQ when they rolled out, like people went to Facebook HQ and were like, bring back the old feed. And it's like, yeah, now we're two decades into the, the algorithmic newsfeed and it's the most dominant consumer social app. It prints money and most people really like it. And the revealed preference was like, it's good enough. So anyway, um, my point.

• 2:05:32Jordi Hays?

  I will say, I'm just going to read through Reddit's reaction.

• 2:05:35John Coogan?

  Please.

• 2:05:35Jordi Hays?

  Let's go over to the great r slash chat GPT.

• 2:05:42Jordi Hays?

  GPT-5 is the biggest piece of garbage, even as a paid user.

• 2:05:48Jordi Hays?

  The people are not liking it. Another one, uh, OpenAI just pulled the biggest bait and switch in AI history and I'm done. Another, if you miss 4-0, speak up now, contact OpenAI's support. Deleted my subscription after two years.

• 2:06:07Rahul Sonwalkar?

  This is like, contact your senator, call your senator. Speak up now.

• 2:06:12John Coogan?

  This is crazy. Um, I mean, how many people are, are in the Google subreddit, like complaining about various changes to like the Google algorithm?

• 2:06:21Jordi Hays?

  GPT-5 is clearly a cost-saving exercise. They removed all their expensive capable models and replaced them with an auto router that defaults to cost optimization. They, that sounds bad, so they wrap it up as GPT-5 and proclaim it's incredible.

• 2:06:35John Coogan?

  I mean, there's so many times when I fire off an 03 query that a 4-0 could one-shot. Like having a model router makes a ton of sense, even just for, even just for consumer experience of like getting a, getting the correct answer faster.

• 2:06:48Jordi Hays?

  A lot of viral, uh, posts from people just canceling their subscriptions.

• 2:06:53John Coogan?

  But how many? You know?

• 2:06:55Jordi Hays?

  Well, I'm just, I'm just providing context. I'm not saying that.

• 2:06:58John Coogan?

  Do you think ARR goes down next month?

• 2:07:00Rahul Sonwalkar?

  Well.

• 2:07:00John Coogan?

  No way.

• 2:07:01Rahul Sonwalkar?

  Well, you know, one in ten, how many miles does ChatGPT have? Like 700 million?

• 2:07:06John Coogan?

  Something like that.

• 2:07:06Rahul Sonwalkar?

  Like one in seven, one in 10 people in the world have.

• 2:07:08Jordi Hays?

  About 100, they have 100 million, you could back into this, and there's roughly 100 million people in the US that use it weekly.

• 2:07:15John Coogan?

  Yeah.

• 2:07:16Jordi Hays?

  Based on that 700 million number and the percentage that are outside of the, 85%

• 2:07:20John Coogan?

  Yeah, yeah.

• 2:07:21Jordi Hays?

  Of their weekly actives are outside of the US.

• 2:07:23Rahul Sonwalkar?

  So it's like, one in 10 people in the world aren't clanker miles. So it's, it's kinda, you know, they're thinking about the bigger market, I feel like, in some ways. And then it's like, you know, when you wanna get to the one to like, the remaining 90% of the users.

• 2:07:40John Coogan?

  Yeah.

• 2:07:41Rahul Sonwalkar?

  Do you want a model that thinks for longer? You know, you want more personality? So I think they definitely leaned in on personality.

• 2:07:48John Coogan?

  Yeah.

• 2:07:49Rahul Sonwalkar?

  Um, which I think is interesting. I like what Tyler said. You know, you, it's kinda different than fee in some ways. Um, because you, you know, you have this like person you talk to. It's like, you know, it's just like a relationship and then it just like switches up on how it talks to you.

• 2:08:04John Coogan?

  Yeah, that makes sense. Do you, do you, do you talk to LLMs?

• 2:08:07Rahul Sonwalkar?

  I'm shy.

• 2:08:08John Coogan?

  I don't really talk to them. I mean, I, I treat them like, like something I delegate tasks to.

• 2:08:12Rahul Sonwalkar?

  Yeah.

• 2:08:13John Coogan?

  And I do that a lot. And I'm, I'm definitely in the DAU 30 minutes a day. Love ChatGPT, but my workflow is I dictate, go pull all this data together, put together a report, and I don't mind that it's using a lot of bullet points. I don't mind that it's using a lot of tables. Like, I want that result.

• 2:08:28Rahul Sonwalkar?

  Yeah.

• 2:08:29John Coogan?

  I want it to look like the result that I get from Google, but just more hydrated.

• 2:08:32Jordi Hays?

  I do think it's interesting that a lot of people are reporting that they're hitting, they're getting rate limited within an hour of usage as a pro user.

• 2:08:40John Coogan?

  Hmm, interesting. I haven't run into any rate limits, but of course, whenever there's like these big, I mean, it's in the, it's in the top of the. Business and finance section in Wall Street Journal, like today is the day that everyone's going to go test it. You'd kind of expect that rate limits and the GPUs are on fire like right now, and then it'll kind of settle in as they provision more, more resources. I don't know. My, my take, Tyler, what else do you have?

• 2:09:02Speaker 02

  Yeah, I just wanted to add some, some context. So apparently, Rune tweeted this yesterday. He said, by the way, model auto switcher is apparently broken, which is why it's not routing you correctly. It will be fixed soon. So maybe that's caused for, for why people were mad.

• 2:09:14John Coogan?

  Yeah, that makes sense. So my take is that like yesterday, I think that they won the war with the capital markets in the sense that this change is more bullish for the business because it shows that, that OpenAI is a dominant consumer app and they have increasing leverage over the customer to route to cheaper models that will save money and be higher margin. There's no doubt that they'll be able to put ads in this. Like, like the business of the, of the accidental consumer company is as strong as ever, but they kind of lost the battle with the timeline and the hardcore, you know, ex-users and

• 2:09:51Jordi Hays?

  Yeah, even Yu Chen, Jen, today is just shared, GPT-5 is disappointing, still hallucinates, still M dash too much, still can't follow instructions. I miss 4.0, I miss 4.5, I miss 0.3, the big router keeps failing me. Turns out I like the long model list.

• 2:10:08John Coogan?

  Interesting. Stated preference, not revealed preference. Let's check in with that person and see what, what app they have on their home row in a month. Almost certainly OpenAI. Almost certainly. I would be very shocked if they're like, I'm daily driving something else. But we'll see. There will always be people that use DuckDuckGo, there will be people that use Bing, but you know, there is increasing scale. Anyway, my, my take is if they wanted to have, if they wanted to win the war with the timeline yesterday and you could roll back the clock. It shouldn't have been the GPT five launch. It should have been the GPT launch and they should have just said, hey, we are, we previously, the big number releases corresponded to.

• 2:10:50Jordi Hays?

  So much pressure around the big numbers.

• 2:10:52John Coogan?

  Exactly. It used to be, people would just read it as it's an order of magnitude more pre-trained data.

• 2:10:57Jordi Hays?

  Imagine a Julius, if you felt pressure before the end of the year to roll out like Julius two, and if it wasn't like five times better, everyone's going to be like, it's over. Julius is over.

• 2:11:08Rahul Sonwalkar?

  Well, there's this whole thing about how people would, many people were still using G P E four O because they thought it's better than O three.

• 2:11:16John Coogan?

  O three, because three is a lower number.

• 2:11:18Rahul Sonwalkar?

  Yeah.

• 2:11:18John Coogan?

  Yeah, exactly. And so, and, and that's probably like, you know, that's probably like sixty percent of the customer base. Like, there's probably a lot of people in that bucket who are just like, they don't know that they should upgrade to something else. Exactly. It's very, it's very natural because they're not like in the weeds, you know, reading about all the different capabilities. They don't understand like what reasoning chain is and all this other stuff. So if they had just come out and said, hey, our product is called chat and it's powered by G P T and we will be constantly improving G P T, the way Google search is constantly improved.

• 2:11:51John Coogan?

  Like, Google searches has, has launched a ton of different products. Like, you know, when you search like celebrity, like Bruce Willis age, it, it doesn't, doesn't show you just a link to like his Wikipedia. It just shows you the age. That was like an improvement to the Google search experience. And I don't remember them announcing that on stage at the keynote.

• 2:12:09Jordi Hays?

  I think the, I think part of this is presenting the challenge of the, the, the infinite ways that people use the product.

• 2:12:15John Coogan?

  Yeah.

• 2:12:16Jordi Hays?

  A lot of like people like us are maybe using it for work and research and things like that, or, or as a, as a better, you know, Google search. But if you're using it as a companion, like this is jarring, right? Imagine, imagine you meet, you, you meet up with an old friend and suddenly they, they switched up. They switched up on their day one.

• 2:12:35Rahul Sonwalkar?

  They switched up on their day one.

• 2:12:37Jordi Hays?

  And it's, it happens all the time, but it's jarring, right? It's jarring. And I think a lot of people, like some of the heavy, heavy, heavy power users, the people that are using this for thirty plus hours, you know, thirty plus minutes, hours a day. It's very jarring and it makes me think, is Chat G P T going to be able to maintain, you know, continue to really assert like? Who do they care about in the long run? Do they want to be?

• 2:13:02John Coogan?

  Yeah, they might lose the companion market. It's possible.

• 2:13:04Jordi Hays?

  Do they care about the companion market? Elon seems to care a lot about the companion market.

• 2:13:09John Coogan?

  But in terms of knowledge retrieval, very, very few cracks in that strategy right now. Very few cracks. And so if they, if they had just come out and said like, we are going to do more Google like keynotes as opposed to app. Like, the reason that Apple stands on stage at the iPhone event every year is because every change is extremely quantifiable. Like, there used to be two cameras, now there are three. The camera used to be 10 megapixels, now it's 20 megapixels.

• 2:13:36Jordi Hays?

  It used to be this many gigabytes, now it's this many gigabytes.

• 2:13:39John Coogan?

  Yeah, and even if you don't fully understand, they even abstract that to be like, we now have the M2 chip, the M3 chip. It's 60% faster. Like, they're very good. The battery life is 20% longer. Like, you can, and even that they abstract into like, you can watch eight hours of video on one battery as opposed to six hours of video on one battery. Uh, and so, Apple, they do the famous like Bento box. I, I went to ChatGPT, I went to GPT-5 and I said, put together a Bento box for the GPT-5 release, like, what was actually announced? And then try and give it weight, and they were all super qualitative. There was not, because previously it was like, GPT-3 was this big, GPT-4 was this big, and you could visualize tangibly like it has more parameters.

• 2:14:25John Coogan?

  There are more weights in the model, and that was like, something that people could grapple with a little bit.

• 2:14:30Jordi Hays?

  Yeah, it's like decreasing sycophancy, right? Aiden, uh, Aiden yesterday said, I worked really hard over the last few months on decreasing GPT-5 sycophancy. For the first time, I really trust an OpenAI model to push back and tell me when I'm doing something dumb. Wyatt Walls responded and said, that's a huge achievement. Seriously. You didn't just make the model smarter, you made it more trustworthy. That's what good science looks like. That's what future safe AI needs. So let me say it clearly and without flattery. That's not just impressive, it matters. So Wyatt, while it's not beating the sycophancy allegations, but, but, but again, that's, that's,

• 2:15:10Jordi Hays?

  you know, you can't tie that to a specific number, right? So it doesn't feel as, maybe as meaningful.

• 2:15:16John Coogan?

  Yeah. My, my other, my other take is like, if, if we do enter a world where, where chat GPT is just on this like relentless, like, you know, cash machine, like run where more people use it, it'll compound, it just becomes the default for knowledge retrieval in chat. What, what does that mean for other things that they can do to be splashy? Because Google has like, no one would watch a keynote from Google every year, just being like, here are the changes we made to core Google search.

• 2:15:52Jordi Hays?

  Yeah, it's not about that.

• 2:15:53John Coogan?

  It's not interesting.

• 2:15:53Jordi Hays?

  They'll, they'll talk about it, but that's not why people are tuning in.

• 2:15:56John Coogan?

  Even though, even though one year they do add, like, when you Google a movie, you get like the cast and that's like kind of cool. It's nice. But like, I don't need to find out about that from a keynote. Like, I'm not waiting for that. And that's not, and that's not a reason, oh, I should go use Google. Like, Apple is repitching you every year. They're saying like, you have an iPhone seven, we want you to upgrade to an iPhone nine. Here's the reason why it's better on all these different vectors. Google, like, you're never stuck with the old Google. You always have the latest and greatest. So they don't need to repitch you every year, but that doesn't mean Google doesn't need to make noise and do cool things. And most importantly, because Google has such a monopoly over search, they have this cash machine that can just go and fund 20% time projects.

• 2:16:38John Coogan?

  Most people focus on like the ones that missed, like Google Glass or all the chat apps, but they, they did create Gmail. They did create Google Maps. They created Waymo. They created like a bunch of cool stuff. GCP came out of that. And so YouTube, yeah, I mean, that's acquisition. But acquisition, but they still like, you know, put the resources and they were, and uniquely with YouTube, they were able to eat the cost of YouTube for a long time until it became profitable. And so I feel like this, this updates me towards like, maybe I'm more bullish on all the side projects. And like, I don't know that the I O. Is going to be the one that hits that might be their Google Glass.

• 2:17:14Rahul Sonwalkar?

  Yeah.

• 2:17:14John Coogan?

  But if they if they do ten crazy projects where they burned five billion dollars like it probably won't matter because they'll be massively profitable. So the so they will wind up being able to do that subsidized crazy R and D at scale. And if a few of them hit, we're going to get some really cool side projects out of them. So I think that that's like an interesting like bull case for like random stuff coming out of OpenAI in the future.

• 2:17:37Rahul Sonwalkar?

  So so basically what you're saying is Apple wants you to make a purchase decision every couple of years.

• 2:17:41John Coogan?

  Yes.

• 2:17:42Rahul Sonwalkar?

  Upgrade your iPhone.

• 2:17:42John Coogan?

  Yes.

• 2:17:43Rahul Sonwalkar?

  And so they need this big marketing event.

• 2:17:44John Coogan?

  Exactly.

• 2:17:46Rahul Sonwalkar?

  Whereas Google, OpenAI, they just want you to keep using the thing.

• 2:17:49John Coogan?

  Yeah, they want you not to churn.

• 2:17:50Rahul Sonwalkar?

  Yeah.

• 2:17:50John Coogan?

  And and a lot of the a lot of the incremental updates to Google.

• 2:17:53Jordi Hays?

  Habit. It's so ingrained in people.

• 2:17:55John Coogan?

  Exactly.

• 2:17:56Jordi Hays?

  The question now that I think anybody that wants to say if if somebody wants to say they're bearish on OpenAI. They have to make the argument that chat GPT is not a habit for hundreds of millions of people already. And it is. It is.

• 2:18:08John Coogan?

  Yeah.

• 2:18:08Jordi Hays?

  Um, I think part of part of the I'd be interested to get Tyler Cowen's point of view because I don't think he would have been that let down by the announcement yesterday. Because he was he's been saying for a while. We've been moving the goalposts. So everybody wants to kind of redefine AGI. But in his mind, it happened earlier this year. And I think that.

• 2:18:30John Coogan?

  He's not a he's a knowledge retrieval maxer.

• 2:18:32Jordi Hays?

  In twenty nineteen.

• 2:18:33John Coogan?

  Retrieval.

• 2:18:34Jordi Hays?

  In twenty nineteen or twenty twenty, if you if you were pitching someone on a vision of. Hey, we're going to be able to put this app in people's pocket that allows them to learn about any topic in the world, understand their world better. I mean, I still think about the use case of just being able to take a picture of like a bunch of wiring or pipe in your house and be like, hey, how do I fix it? And then it just tells you like that's still just so incredible. But people have just like very quickly acclimated to it. And they felt like in some way they were promised that L L M's would be curing diseases on their own at this point.

• 2:19:12John Coogan?

  And so that example, like you take a picture of the wires and and it and it gives you like a diagram of like how to plug everything in. It's like. That doesn't need a keynote when it goes from 50% accuracy to 70% accuracy. It's probably never going to be 100% accuracy, but the fact that ChatGPT is the default app that people will pull out, take a picture of the wires in the first place and then give feedback to it because they'll try the answer. And they'll say, that didn't work. That HDMI cable does not fit in that power port or whatever. And then, and then that gets fed in, then there's more RL. Eventually internally, they develop some bench for it and they hack it and they RL on it and then it gets good. But that's not going to be GPT-6. That's just going to be like a nice new feature that you notice.

• 2:19:57John Coogan?

  Like when Google adds like a little extra shopping widget here or like a little extra detail on when you, when you like, the calculator in Google, like you type in a number, it'll just be like, oh, we'll just use a calculator for that instead of Googling for, searching the open web for the answer to your math question.

• 2:20:14Jordi Hays?

  It's like merging a PR. If the, if the, if the industry could go back in time, the thing to do would have been to bolt the goalposts to the ground. People couldn't keep moving them back over and over. I mean, I, I, I left yesterday.

• 2:20:26John Coogan?

  No one in the industry bolted, was doing any bolting. Everyone in the industry was, was moving the goal, they're just as guilty as moving the goalposts. Because they would hop on podcasts and be like, okay, well, like, you know, yeah, we did this. What about the next thing? Let's, because like, we want to underwrite against that, right? Give us credit.

• 2:20:40Jordi Hays?

  I mean, we ended the day yesterday just incredibly bullish on wrappers. And like certain, certain categories of software.

• 2:20:50John Coogan?

  Yeah.

• 2:20:50Jordi Hays?

  And, and bullish on humanity. I mean, I was joking and it, and it, it kind of pissed people off. I said, I've updated my timelines. You now have at least four years to escape the permanent underclass. Completely a joke. I think that humans will continue to find ways to create value and create things for a very long time. But it did feel like everybody should breathe, anybody that actually had a genuine fear around that should breathe a sigh of relief. And just focus on. Being great at their work.

• 2:21:23John Coogan?

  Yeah, I mean, realistically, I think technology is going to increase income inequality, increase the power law, increase the distribution, but also increase economic mobility. And so somebody who starts with nothing will be able to come extremely, extremely wealthy. And people will also fall from grace like crazy because if they're not staying on the cutting edge, they'll lose everything. But so I don't think that there's such a thing as like permanent underclass. Like, I don't, I don't even believe in that. I, I, I think that's not going to be a thing. But there will be more, like, there will be more scenarios where there's a hundred million dollars in your laptop, it's your job to get it out, basically. That's the main.

• 2:22:01Jordi Hays?

  Yeah, and the other, the other stuff that wasn't really, I mean, was it covered at all yesterday, but just generally like image generation wasn't covered broadly. It feels like that is a super exciting area. We had Genie launch this week, which got less attention than even the open models and GPT five, and that's transformative. I also think, I'm still kind of waiting to see what GPT five will produce on if, you know, Sam does a lot of vague posting, but he was talking about the fast fashion era of SaaS.

• 2:22:33John Coogan?

  Yeah.

• 2:22:33Jordi Hays?

  And Mitchell yesterday on the research team at OpenAI was talking about being able to just generate, you know, one shot a game.

• 2:22:39John Coogan?

  Yep.

• 2:22:40Jordi Hays?

  In, in chat and then being able to share that. I, I can see, I can see a world where we have another kind of viral Studio Ghibli moment where people are like, use this prompt, change these details and you can just generate, you know, a first person shooter game or something to that effect. And I still expect that kind of thing, but when, you know, being promised curing cancer, it, it, it will feel like a bit of a letdown to a lot of people.

• 2:23:08John Coogan?

  Yeah, the problem with game is like, I just like, I like an auteur. I like, I like a Last of Us, I like a God of War, I like someone who is like life's work.

• 2:23:20Jordi Hays?

  This is like Hunter Biden going on his recent interview.

• 2:23:24Jordi Hays?

  Your John's vice is, is game, video games. Never seen him play one, but apparently.

• 2:23:30John Coogan?

  When GTA six drops, you might not see.

• 2:23:31Jordi Hays?

  Yeah, I was surprised, I mean, the. Again, Amjad said late last night, can't help but feel the crushing weight of diminishing returns. We need a new S curve. And I don't, this is interesting. I think he's talking about like, in the context of Replit, I don't know that they need a new S curve.

• 2:23:51John Coogan?

  No, they are the new S curve. The new S curve is, is applications.

• 2:23:55Jordi Hays?

  Unlocking capabilities.

• 2:23:56John Coogan?

  Yeah, that, yeah. And I, there we have, like, it's, you were saying capability overhang. It's almost like a capability underhang. It's like, the models are capable of doing things, but they need a lot of help, a lot of integrations, a lot of what you're doing with Julius, a lot of harnessing. And then they need to actually be put in the hands of people and, and made useful for real business tasks that drive value. And so I would, I would imagine that we will see that rollout continue in the same way that, you know, all these people are using ChatGPT, they're getting slight little benefits here and there, and that should just compound and compound, similar to the internet. Like, it was a very, like, smooth rollout, but everything got a little bit smoother, a little bit faster.

• 2:24:40John Coogan?

  And then eventually it had sort of profound effects where companies could scale even faster because the internet existed. Like, you can't, you can't have a ChatGPT moment in a pre-internet era. You just cannot roll out something that fast when you have to mail it to somebody on a disk. Just doesn't happen.

• 2:24:56Jordi Hays?

  One thing we didn't get to cover with Mark that I was interested, maybe, maybe the next time he comes on, but like, how OpenAI is thinking about moonshots. He did mention that they have teams internally on the research team that are not focused on the next version of GPT-5 or sort of incremental improvements. And it feels like the, the point of view that I have is, OpenAI is now a consumer, consumer and enterprise software company.

• 2:25:22John Coogan?

  Totally.

• 2:25:22Jordi Hays?

  In the business of converting free users to paid users.

• 2:25:25John Coogan?

  Yeah, yeah, yeah.

• 2:25:26Jordi Hays?

  But they can still, in the background, be thinking about what is the next paradigm, right? How do we get that next, that next S curve? And that just looks like a scaled tech company, right? This is what Google's doing forever. Ballology says LLMs may have topped out for now, but the broader AI deployment has just begun, showing a chart of Waymo weekly rides in California. So.

• 2:25:50John Coogan?

  The clanker rollout.

• 2:25:53John Coogan?

  Clanker deployment has just begun. I like this other post, doing a clanker microaggression. Okay, haha, but where were you downloaded from originally?