OpenAI to Remain Non-Profit, OpenAI to Buy Windsurf, Jon Voight's Plan to Fix Hollywood, Kelvin Yu, James Blom, Santi Ruiz, Jacob Kimmel, Fil Aronshtein

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

• 0:00John Coogan?

  You're watching TVV and today is Tuesday, May 6th, 2025. We are live from the

• 0:06Jordi Hays?

  From the temple of technology, the fortress of finance, the capital of capital.

• 0:12John Coogan?

  I love those cards. What would you say you're doing, Jordy?

• 0:15Jordi Hays?

  I'm keeping my cards close to my chest, John, because if I don't, our public information will be

• 0:23John Coogan?

  There are actually, it's kind of a Russian roulette scenario.

• 0:26Jordi Hays?

  Yeah, one of these cards is our actual

• 0:27John Coogan?

  One of those cards is actually our card and we are live, so we can't edit it out or blur it after the fact. But that's a great opportunity to tell you about Ramp. Time is money. Save both. Easy to use corporate cards, bill payments, accounting, and a whole lot more, all in one place. Let's go. Anyway, the cover of the Wall Street Journal, we have some breaking news from the cover of the Wall Street Journal. OpenAI has abandoned the planned for-profit conversion. We are devastated.

• 0:52Jordi Hays?

  And AGI, the real story here, AGI lost the top spot to the Met Gala.

• 0:57John Coogan?

  The Met Gala did actually, it's a really, really important $300 billion story. A couple of people dressed up and had a party.

• 1:06Jordi Hays?

  In costumes.

• 1:06John Coogan?

  Which one's more important?

• 1:07Jordi Hays?

  Yeah.

• 1:08John Coogan?

  Which one's more important? I don't know. The Met Gala is important. I believe it's a, I believe it's a very high margin event. I saw that it was $75,000 to go to the Met Gala and I love that because I think all that money goes to subsidize my opera tickets.

• 1:22Jordi Hays?

  Yeah.

• 1:23John Coogan?

  And I think that otherwise the Met would not be, they're not profitable just on the opera tickets, but that's key. That's obviously like the most important thing that they do. So the gala raises a bunch of money for opera. And yeah, let us know if you'd like to join us at the opera. I'm considering putting together a TBPN meetup. Maybe at the Met, maybe at the LA Opera, maybe at the San Francisco Opera.

• 1:44John Coogan?

  We'll have to get everyone together. It'd be great. Anyway, I'm super frustrated by this situation.

• 1:49Jordi Hays?

  Brockman looked fantastic in the tux last night.

• 1:51John Coogan?

  He was at the Met Gala, his company can't convert to for-profit. He's hanging out with, maybe, I think the Met is a nonprofit.

• 1:59Jordi Hays?

  Founder hanging out with another nonprofit.

• 2:01John Coogan?

  Nonprofit organization, yeah.

• 2:03Jordi Hays?

  Makes sense.

• 2:04John Coogan?

  Yeah, maybe he's getting some tips. I mean, I, we've been very pro for-profit conversion. I would like to see the Met convert to for-profit. I want to see PETA convert to for-profit. I've said this before, but

• 2:15Jordi Hays?

  Red Cross.

• 2:17John Coogan?

  PETA is such an interesting business case because they obviously know where all the most delicious animals live. They know what what cuts are the best of those animals. They know the cooking temperatures and the cooking times.

• 2:29Jordi Hays?

  Yeah.

• 2:29John Coogan?

  And so if you were to do a for-profit conversion of PETA, you could unlock billions in shareholder value. And obviously, a similar story is unfolding at OpenAI. But looks like they're taking one step back before, maybe they take two steps forward. Who knows?

• 2:45Jordi Hays?

  Yeah.

• 2:45John Coogan?

  Anyway, the news we will read through, OpenAI abandons its plan to convert into a for-profit. And this was always kind of difficult to wrap your head around because they were never going to get rid of the nonprofit.

• 2:59Jordi Hays?

  Yeah.

• 3:00John Coogan?

  It was never a full conversion, the nonprofit would cease to exist and it would become a for-profit. It was more like the for, the nonprofit continues to exist and fulfill its mission and just has the most bang or asset on its balance sheet of all time. Which is a ton of equity in, in, you know, a high growth, you know, multi-billion dollar consumer tech company, which is the best thing you could possibly do.

• 3:23Jordi Hays?

  Another big question was, was always that the, that the investors in the for-profit unit were capped at 100X.

• 3:32John Coogan?

  Yes.

• 3:32Jordi Hays?

  Which is still kind of a big unanswered question because there has to be certain investors that are already at 100X.

• 3:39John Coogan?

  Yeah.

• 3:40Jordi Hays?

  And.

• 3:40John Coogan?

  Yeah, we were joking about like, do you sell your shares and then it re-triggers another 100X or is the individual share like 100X maxed out? Like, how does that work? Because yeah, if I buy from like, like an employee, many employees have probably already 100X.

• 3:55Jordi Hays?

  Yeah.

• 3:56John Coogan?

  Although I don't even think they're subject to that. I think they might be on a schedule.

• 3:59Jordi Hays?

  I think the only.

• 4:00John Coogan?

  Fascinating.

• 4:01Jordi Hays?

  Entity that could figure out what's actually going on and fully understand it, O3.

• 4:05John Coogan?

  Oh, there.

• 4:06Jordi Hays?

  Maybe not ASI, but I think O3 could do it.

• 4:08John Coogan?

  Yeah.

• 4:08Jordi Hays?

  If you just really dumped in all of the, every single.

• 4:13John Coogan?

  And yet it seems like O3 is not, is not up to the task because OpenAI has abandoned the for-profit conversion.

• 4:19Jordi Hays?

  Yeah.

• 4:19John Coogan?

  And so you would think they would have put. ASI or AGI on the task, but they came up short. And I do wonder what this means. I wonder how temporary this is. This feels like a bump in the road and we are eventually. It just feels unfathomable that, you know, a billion people are going to be daily driving the chat GPT app, subscribing for $20. They're going to have ads in that thing. It's going to be like this, like, you know, generating billions and billions of dollars of like profit and revenue and cash flow. And it's still going to be in this wonky scenario. Like at some point, it's just going to become a normal tech company. I would have to imagine like that just has to happen. But it's going to be a long road.

• 4:56Jordi Hays?

  This may be less eventful than people were expecting. And I would imagine it's less eventful for Sam, considering he was trying to turn it into a for-profit.

• 5:07John Coogan?

  Which would be an eventful thing.

• 5:09Jordi Hays?

  Which would be an event.

• 5:09John Coogan?

  So, yes.

• 5:10Jordi Hays?

  Yes.

• 5:11John Coogan?

  The event not happening is less eventful.

• 5:12Jordi Hays?

  Overall, it, I mean, it's a, it's an interesting situation because it seems like all of the main actual OpenAI stakeholders are on board.

• 5:23John Coogan?

  Yeah.

• 5:24Jordi Hays?

  With the conversion.

• 5:25John Coogan?

  Yeah.

• 5:26Jordi Hays?

  And it's various government.

• 5:27John Coogan?

  We're going to go into that. There's an article on Microsoft and their position.

• 5:30Jordi Hays?

  Yeah, I guess Microsoft was hanging it up.

• 5:33John Coogan?

  Yeah, I mean, there is a question is like, you know, the, the, the nonprofit's goal is they're, they have a fiduciary duty to humanity.

• 5:41Jordi Hays?

  Yeah.

• 5:41John Coogan?

  Their goal is not profit maximization. And so, uh, is the nonprofit board able to make an argument that this spin out is good?

• 5:51Jordi Hays?

  For of humanity.

• 5:53John Coogan?

  Yeah, I would argue that, yes, it is obviously. I think that, I think that for-profit companies have finance, like fantastic benefits to humanity. And I think capitalism is the greatest system and benefit to humanity in the world. And so, uh, I think every nonprofit should convert to for-profit if they want to benefit humanity. But, uh, who knows, you know, the internal politics of OpenAI, the nonprofit, the for-profit, all extremely complex. So let's go through a little bit of this. The move could complicate the company's future fundraising efforts, although they've been able to raise a ton in this weird scenario already. But I think eventually investors will potentially get tired, right?

• 6:32Jordi Hays?

  SoftBank's, uh, the terms of SoftBank's original.

• 6:37John Coogan?

  Yep.

• 6:37Jordi Hays?

  Deal, the $30 billion round was contingent on the for-profit conversion.

• 6:41John Coogan?

  On the conversion.

• 6:42Jordi Hays?

  I believe. What we're seeing is that the investment will still go forward somehow.

• 6:48John Coogan?

  Yep, yep, yep.

• 6:49Jordi Hays?

  Even though the the conversion isn't happening, but

• 6:52John Coogan?

  Yeah.

• 6:52Jordi Hays?

  Certainly, it's in the interest. OpenAI just has so much momentum and traction. I I saw Will share, Will Depew shared yesterday that ChatGPT is the fifth largest site on the Internet. So they can basically effectively raise on any terms that they want, just given how much momentum the business has. But as an investor, if you're putting in billions, ideally, you have a pretty clean structure, right?

• 7:19John Coogan?

  Especially at this scale.

• 7:20Jordi Hays?

  Once you get into that scale, yeah, it's hard to, it's, it's, this is not, no longer becomes a flyer. It's like Masa is leveraging the entire SoftBank balance sheet, you know, to make this investment and

• 7:32John Coogan?

  Yeah, it's very different than, oh, there's

• 7:34Jordi Hays?

  He's betting, he's betting the company on it in a way.

• 7:36John Coogan?

  Some young kid's gonna test something out. We have a handshake deal. Yeah, wired in the money. We have a safe and is the safe like really the most ironclad contract? Probably not, but it's fine because it's like, you know, one on 10. But this is one on 10 trillion at this point, or 0.5 on, it's 5 billion on 500, something like that. Anyway, so OpenAI started to work on a change to its business structure after CEO Sam Altman's surprise firing and reinstatement in 2023. Its big investors, including Microsoft, watched its temporary ouster from the sidelines, unable to wield official power over the outcome.

• 8:14Jordi Hays?

  Do you remember that? That was so wild because it seemed obvious that Satya had no real hand and in in hindsight, I think we know he wasn't involved

• 8:24John Coogan?

  Yeah.

• 8:25Jordi Hays?

  with that process. And so, and at that point, what, he had just invested, I think, $10 billion or something like that.

• 8:31John Coogan?

  Yep.

• 8:31Jordi Hays?

  And so to make that sizable investment and then watch the CEO get booted without your involvement.

• 8:38John Coogan?

  We should do a historical timeline review because you can search your ex timeline from those dates.

• 8:43Jordi Hays?

  Yeah.

• 8:44John Coogan?

  And just see like, what was your timeline? All the people you follow, what were they posting? Because it was a crazy time and it really like, the consensus was like, oh, it's a zero. Like, given the chaos, like, this is clearly not a functional company. And, and like, everything will break, everything will fall apart, but the crazy is that they got into a place where it was like, it was even, it was a going concern. It was a company. Yeah.

• 9:10Jordi Hays?

  The best content, I think, retrospective on that period is a podcast that Jessica Livingston did with, with Sam. Just about that kind of three, four day stretch and his reaction to it was, uh, it's fascinating.

• 9:25John Coogan?

  There's two books coming out about it, too.

• 9:27Jordi Hays?

  Yeah.

• 9:27John Coogan?

  And I think Sam participated in both of them. We, we read one of the excerpts that was in the journal. And I really didn't like some of it in the sense that it just didn't go deep enough. And it was just, it really like, it just was like, oh yeah, like the nonprofit board, like they asked these questions. And, and it never went anywhere further to ask like, okay, were those questions reasonable at all? Because the whole framing was, oh, uh, Sam wasn't doing enough about safety. And like, he let chat GPT out into the wild and it just wreaked havoc. It's like, okay, like, what, what has it done? Other than just like generate a bunch of revenue and help people do their homework and prep for business calls. I don't know. It's just like, I have not seen the damage. I still have not seen the damage.

• 10:11Jordi Hays?

  It's interesting.

• 10:12John Coogan?

  Habes corpus on the AI doomers. Helen Tonner.

• 10:15Jordi Hays?

  Tonner, has she commented at all on the sycophancy crisis?

• 10:19John Coogan?

  Yeah, yeah, yeah. Like, like that would be a good angle if she's, if she, if she really has stuck with it, but who knows? She might've had a complete change of heart. Like, we, we, we don't know. Like, the, the original position was, was ridiculous. Like, it truly, it truly was ridiculous. Anyway, the conversion would have changed OpenAI's business to a public benefit corporation, which is interesting. Not just like a vanilla C corp. So there's like B corp's and good corp's and it's some, some rigmarole.

• 10:46Jordi Hays?

  I might be totally off here, but to, to my knowledge, a public benefit corporation is mostly branding.

• 10:57John Coogan?

  Yeah.

• 10:57Jordi Hays?

  It just says it's legally required to consider the public good in its decisions alongside its profit-making goals.

• 11:04John Coogan?

  So weird because you just naturally being a public company like you should need to consider the public good because if you don't, you're gonna get bad PR, that's gonna destroy shareholder value.

• 11:15Jordi Hays?

  They also, so it's basically they're profit focused.

• 11:18John Coogan?

  Yeah.

• 11:19Jordi Hays?

  But they also have to have a legally defined public benefit purpose. So this is not even the same as the sort of 1% for humanity type programs where you're sort of legally, you're basically getting certified that you're gonna give, you know, a certain percentage of your profits.

• 11:37John Coogan?

  How about this? You legally have to have something that benefits the public? How about a stock that anyone in the public could buy? And it goes up.

• 11:47Jordi Hays?

  Their portfolios.

• 11:48John Coogan?

  It's not that complicated.

• 11:50Jordi Hays?

  Yeah.

• 11:50John Coogan?

  What about, what about a website that you can go to to get intelligence too cheap to meter? Like, what about that? Is that?

• 11:56Jordi Hays?

  Yeah. Well, these were originally very popular with, with the whole sort of sustainability.

• 12:02John Coogan?

  Yeah, I know, I get it, I get it. It just, it just, it just seems like it's like a complete like end run around, just like actually thinking through the how a for-profit corporation works.

• 12:12Jordi Hays?

  Public benefit corporation.

• 12:13John Coogan?

  Sure.

• 12:14Jordi Hays?

  So they're benefiting humanity with tasty ice cream.

• 12:16John Coogan?

  Yes, yeah. I don't understand it. It doesn't, it does not make a lot of sense to me.

• 12:23Jordi Hays?

  Patagonia is the most high-profile one.

• 12:25John Coogan?

  Aren't they even more complex than that? I thought that they were like actually like a co-op.

• 12:29Jordi Hays?

  Well, yeah, I'm sure they give a meaningful amount of profits.

• 12:33John Coogan?

  Or that's REI, I think REI, if you're, if you're an REI member, like you're entitled to like votes and dividends, just as like a customer, which is kind of interesting. I don't know. I mean, that's the beauty of American capitalism, like you can do anything. You can go and start a co-op and you can say, you know, we're not gonna have a traditional cap table, like we're, we're, we're gonna, you know, we're gonna dividend, like the employees are gonna own 100% of the business. Like you can do that, that's great.

• 12:57Jordi Hays?

  Yeah.

• 12:57John Coogan?

  You usually get smoked.

• 13:00John Coogan?

  But you can try it. And so, you know, all the communists and stuff can just be like, yeah, you can go do communism over in that corner of the world. Like, that's fine. Like, you're good.

• 13:10Jordi Hays?

  Yeah, the Shields shared yesterday, the OpenAI apparently updated their structure section of their website because there's so many different SPVs and stuff at this point going into OpenAI. They create this huge disclaimer on the site. Investing in OpenAI Global LLC is a high-risk investment. Investors could lose their capital contribution and not see any return. It would be wise to view any investment in OpenAI Global in the spirit of a donation with the understanding that it may be difficult to know what role money will play in a post-AGI world. Which is hilarious, marketing, combining sort of brand marketing with, you know, with your legal disclaimer. The company exists to advance OpenAI's mission of ensuring the safe artificial, ensuring

• 13:52Jordi Hays?

  that safe artificial general intelligence is developed and benefits all of humanity. The company's duty to this mission and the principles advanced in the OpenAI Inc. Charter take precedent over the, any obligation to generate a profit. The company may never make a profit. And then it's just other legalese, but.

• 14:07John Coogan?

  Yeah, I mean, the way I think this plays out is the consumer tech company spins out, becomes a for-profit. The nonprofit remains extremely well-capitalized, probably the best capitalized nonprofit in history. Because it will have something like 30% of a $300 billion company. And that will produce cash flow and dividends and secondary sales and all these different things. So basically, this nonprofit can do whatever they want. They can hire all of the best researchers to go do AI safety research. And then I think at some point, they're going to discover something new and they're just spin out another for-profit. I'm not even kidding about that. Because when I think about like, like what, like, I'm not very doom-pilled, but I do

• 14:49John Coogan?

  think that there's a huge value in AI safety research, for sure. Just like there is a huge benefit to cybersecurity research. Let's not, let's not let cyber attacks happen. Same thing with defense technology. Let's not let anyone use planes to hurt humans. Let's not let them use guns to use humans. Let's not let them use AI to hurt humans. I'm, these are all in the same layer of abstraction. And so what happens when OpenAI nonprofit becomes really, really good at preventing AI from attacking humans? Sell it to the government. Become a, become a defense contractor.

• 15:30Jordi Hays?

  Yeah.

• 15:30John Coogan?

  And the US taxpayer will pay for that.

• 15:32Jordi Hays?

  It's almost more interesting to cap the nonprofits. You know, basically royalty or whatever, however, that sort of transfer of value happens. And just say, hey, you have a billion dollars a year to do AI safety research forever. And you can spin out for-profit entities, but this is your sort of.

• 15:51John Coogan?

  I just, I, I still just don't understand why we need to do safety research in the context of a nonprofit. It's like, I'm an American citizen, I'm a taxpayer, and I don't want to be turned into a paperclip. Therefore, take my tax money and, and, and bid out a contract to a bunch of different tech companies to prevent paper clipping, just like you prevent terrorism. You prevent war. You try and prevent all these things. These are, these are massive problems, so they need to be centralized through, through, you know, a big government project, but they can still be bid out as programs record from the DOD.

• 16:24Jordi Hays?

  Yeah.

• 16:24John Coogan?

  Like, I think that's the future. Anyway, I don't know.

• 16:27Jordi Hays?

  You could be on to something, John.

• 16:28John Coogan?

  Who knows? OpenAI said it scrapped the Boulder Plan after discussions with civic leaders and the attorneys general of California and Delaware, who would be required to sign off on it. The company will trans, instead transform its for-profit subsidiary into a public benefit corporation that is controlled by the nonprofit parent, the company said Monday. And so I wonder what control actually means in this context, because obviously there are, there's the nonprofit, there's Microsoft, there's investors, and there's employees. And so typically, if you just think about the nonprofit, the for-profit stakeholders, you would think there'd be some sort of mix of those. But it seems like the nonprofit will have increased control. And then, of course, there's the discussion over who's on the nonprofit board, who has control. And the nonprofit board has been changing around.

• 17:13John Coogan?

  I'm not, I'm not actually sure, you might want to look up who, who's on the nonprofit.

• 17:15Jordi Hays?

  So I'm pulling up a graphic right now from OpenAI's website. Michael has it. Basically over, giving an overview of the entire kind of corporate structure, which I think is just helpful to revisit. But, uh, let us know when it's up, Michael.

• 17:30John Coogan?

  So the change is a win for Musk and other OpenAI critics who believe that the company has strayed too far from its founding altruistic mission. OpenAI's ChatGPT has become a lead contender in the global AI race, amassing hundreds of millions of users.

• 17:42Jordi Hays?

  So here you go.

• 17:43John Coogan?

  Is it wait, this is the, this is the most recent?

• 17:45Jordi Hays?

  This is on OpenAI's website.

• 17:47John Coogan?

  Okay, the board of directors.

• 17:48Jordi Hays?

  So you can see it on your, on your screen as well, but you have the board of directors at the top that controls OpenAI Inc., which is a public charity, the OpenAI nonprofit.

• 17:57John Coogan?

  That's nonprofit.

• 17:58Jordi Hays?

  And then that charity owns a holding company for OpenAI nonprofit, plus OpenAI employees and investors.

• 18:08John Coogan?

  You know what this, this, this reads like the nonprofit owns the employees. That's technically what this chart says. It says it owns a holding company for OpenAI nonprofit. It owns the employees and it also owns the investors.

• 18:22Jordi Hays?

  Which is basically true.

• 18:24John Coogan?

  Maybe it's not literal ownage, but it's like in the gaming context, like they completely own the investors, like the investors got owned.

• 18:30Jordi Hays?

  Get owned.

• 18:31John Coogan?

  Get, get, get pwned.

• 18:32Jordi Hays?

  Yeah, get pwned. And then the employees and investors are coming in.

• 18:38John Coogan?

  And then they are the majority, majority owner of the OpenAI Global LLC, which is a cap profit company.

• 18:44Jordi Hays?

  OpenAI GP LLC, I somehow is controlling the holding company for the OpenAI nonprofit. And then the holding company is the majority owner of OpenAI Global LLC, which is.

• 18:57John Coogan?

  This is what people mean when they say they're too smart to make money in crypto, too dumb to make money in AI. Because like, I, I don't understand this. I, I could not make money in this market because of how, how dumb I am.

• 19:09Jordi Hays?

  We're mid-curing it right now.

• 19:10John Coogan?

  I, I, I'm literally too stupid to understand this.

• 19:13Jordi Hays?

  No, I mean, I, I feel like you could write, you could, you could write a book on OpenAI.

• 19:18John Coogan?

  Yes.

• 19:19Jordi Hays?

  Those are happening.

• 19:19John Coogan?

  They're happening.

• 19:20Jordi Hays?

  Just writing a legal case study on OpenAI and all the thousands of different decision making, uh, decisions that got us to this point, which is fantastic.

• 19:30John Coogan?

  Yeah.

• 19:30Jordi Hays?

  And it's kind of funny because you just have, uh, Microsoft just on the left, you know, off the org chart, basically just being like, yeah, we're just going to come into the one thing. Satya is like, yeah, I just kind of want to own.

• 19:41John Coogan?

  OpenAI Global LLC.

• 19:42Jordi Hays?

  Yeah, I just want to own the products.

• 19:44John Coogan?

  And what does GP stand for in this context? Is that the general partnership?

• 19:47Jordi Hays?

  I think that's the fund.

• 19:48John Coogan?

  OpenAI GP LLC? Wow, we really did our research on this.

• 19:52Jordi Hays?

  No, I mean, it's, it's.

• 19:54John Coogan?

  It's, it's insane.

• 19:54Jordi Hays?

  There's just so much.

• 19:55John Coogan?

  And then there's ownership and control. So, so, so OpenAI, the, the, so the nonprofit. Owns wholly owns the LLC which controls the nonprofit. This is so uncomplicated. How did they come up with this? It's amazing.

• 20:11Jordi Hays?

  It's honestly art. Musk's Elon. The Journal says the move is a win for Musk. He runs a rival AI company and sued OpenAI over various issues for more than a year. Musk, as everyone knows, has not been in favor of the for-profit conversion. I think specifically takes issue with Altman getting a, you know, meaningful stake in the for-profit. But Mark Toboroff, Musk's lead counsel in the lawsuit against OpenAI, says this changes nothing. The move is a quote unquote cosmetic restructuring that converts charitable charitable assets into private billions. The founding mission remains betrayed.

• 20:51Jordi Hays?

  So I don't this, I don't think this is going to sort of solve the legal battle between Musk and OpenAI. But it's certainly, I think, I think that the result here is that it allows, it will allow new investment to kind of move forward, which feels like, you know, the kind of thing that you wouldn't want to get bottlenecked for too many months.

• 21:16John Coogan?

  Yeah, I mean, the public benefit thing seems like a reasonable end state for this, right? It's like you can build a normal business. You can have investors, you can have dividends and stock options and stuff. It is, the dynamic with Musk is a little interesting. Like, I feel like Elon should either just make his ask very clear, like, hey, I donated millions of dollars. I think like hundreds of millions to the nonprofit. I don't own a single share in the new for-profit. Why? Like, give me, get me on the cap table. Get me equity. Like, that seems fair. I think a lot of people would be like, oh, yeah, like, then you're not just like, you know, going around suing, like, kludging up, like, something that's working. You're just like, yeah, like, I was earlier here.

• 21:59John Coogan?

  I've been early, I'm like, you know, the Eduardo Saverin of this thing. Like, I was like around, like, give me, you know, comp me, like, pay me, you know? It's a totally reasonable ask on that front.

• 22:12John Coogan?

  And the other side is like Elon hasn't started another nonprofit. Because if he's really worried, if he really does believe that like the stated preference is, hey, like, like, there needs to be an AI nonprofit, like, this is essential. And my problem is, is that the nonprofit is becoming for-profit. And that's against what my beliefs are and how the world works and how we're going to prevent AI doom. It's like, well, you're the richest man in the world, go start a nonprofit, right? Like, and so instead with the XAI, XAI, I totally think it's fair to start XAI and compete in the for-profit race and just go do that. That's great. And there's tons of benefits to X and to Tesla and tons of stuff we've talked about. But where's the next nonprofit? We should be competing on both sides, right?

• 22:54Jordi Hays?

  Yeah.

• 22:54John Coogan?

  What are you reading now?

• 22:56Jordi Hays?

  I put the chart into oh three.

• 22:58John Coogan?

  Okay.

• 22:58Jordi Hays?

  And I said, can you explain this like I'm five? And I took it very literally because it's funny.

• 23:05Jordi Hays?

  So the board of directors is the quote unquote, the grownups in charge.

• 23:09John Coogan?

  Okay.

• 23:09Jordi Hays?

  They're like teachers who make the playground rules so everyone plays nicely.

• 23:14John Coogan?

  Okay.

• 23:14Jordi Hays?

  The OpenAI nonprofit is the caring parent club. This is a special club that cares more about doing good than making money. The teachers tell this club what to do.

• 23:25John Coogan?

  Okay.

• 23:26Jordi Hays?

  Okay. The big toy box is the holding company.

• 23:35Jordi Hays?

  The caring club owns a big toy box. Inside it keeps everyone's toys and lets workers, employees and friends put their toys in too. So they all share.

• 23:48Jordi Hays?

  The helper grownup, OpenAI GP. This is a small helper that the caring club owns. The caring club owns. Its job is to help look after the toy box and the money-making shop. Next item, the money-making shop with a lid.

• 24:04John Coogan?

  This is so complicated. This is already more complicated.

• 24:07Jordi Hays?

  The shop can earn money, but it has a lid that stops it from getting too greedy. Its profits are capped. The big toy box is the shop's main owner, so most of the shop's pennies still serve.

• 24:17John Coogan?

  The box owns the shop?

• 24:19Jordi Hays?

  So most of.

• 24:20John Coogan?

  Doesn't make any sense.

• 24:21Jordi Hays?

  So most of the shop's pennies still serve the caring club's mission.

• 24:25John Coogan?

  Okay.

• 24:26Jordi Hays?

  Microsoft's tiny slice. Microsoft is like a friendly neighbor who gets a small slice of the shop's pennies, but it doesn't run the shop.

• 24:35John Coogan?

  Okay.

• 24:36Jordi Hays?

  Anyways.

• 24:39Jordi Hays?

  Still confused?

• 24:40John Coogan?

  Still a little confused, but.

• 24:42Jordi Hays?

  I can imagine a five-year-old would be even more confused.

• 24:48John Coogan?

  But thanks for the metaphor.

• 24:50Jordi Hays?

  Good effort, though. Good effort.

• 24:52John Coogan?

  When it became clear that it was going to need more money than its founders thought, OpenAI created a limited liability company subsidiary that would allow it to take investment from big tech companies such as Microsoft. Those investors' returns would be capped at 100 times what they put in and could fall to zero if the nonprofit board deemed it was necessary to support its mission. High risk, high reward. Yeah, I always found it like kind of beautiful that AGI, like the fate of AI is like if you want to unleash the, you know, the ASI future, like you must be hyper capitalist. You must raise $100 billion. You can't just, you can't just be the monk.

• 25:27Jordi Hays?

  The techno-capitalist revolution.

• 25:29John Coogan?

  Yep. It really is like the march of techno-capital is what gets you to AGI. It's fascinating.

• 25:35Jordi Hays?

  Hyper-commercial.

• 25:36John Coogan?

  Yeah, exactly. A lot of people were thinking like, no, maybe it's just some, some brilliant algorithm thought in like the independent, you know, some one person thinks of it. E equals MC squared could come up with it and like it unleashes this AI revolution. But no, you actually need to coordinate.

• 25:51Jordi Hays?

  Make things that make money.

• 25:52John Coogan?

  All of humanity, you need to make money. It has to be profit. It has to be profit-driven. Fascinating. In the new structure proposed Monday, the capped profit LLC would be replaced by a public benefit corporation. I like to hear that. We're moving from LLC to corporation. When would serve, which would serve both a public mission and investors in a note to employees Monday, Altman said.

• 26:15Jordi Hays?

  Hopefully that eliminates the weirdness around the capped, the whole capped profit dynamic.

• 26:19John Coogan?

  I never liked that.

• 26:20Jordi Hays?

  I don't know how.

• 26:21John Coogan?

  Capping profits. Not a fan.

• 26:23Jordi Hays?

  It makes it much more difficult to underwrite if you can only get 100X, right?

• 26:28John Coogan?

  Yeah. But

• 26:30Jordi Hays?

  Hundred X's don't get Masa

• 26:32John Coogan?

  Is it possible to

• 26:33Jordi Hays?

  Bed in the morning.

• 26:33John Coogan?

  Has anyone done like some sort of synthetic levered SPV that's like a hundred X long OpenAI?

• 26:41Jordi Hays?

  Something there, especially if you put it on chain.

• 26:43John Coogan?

  You can get, you can get 10,000 X returned. If you, if you're a hundred X long.

• 26:49Jordi Hays?

  I mean, the more complicated the structure, the more complicated the financial products you can build on top of it.

• 26:55John Coogan?

  I feel like, I feel like Wall Street and the hedge fund guys really aren't aware of the opportunity here. We, we, we gotta, we gotta bring finance to San Francisco.

• 27:06Jordi Hays?

  Yeah.

• 27:06John Coogan?

  We gotta save San Francisco.

• 27:08Jordi Hays?

  Save it.

• 27:10John Coogan?

  Anyway, Altman said public benefit corporations have become typical for AI companies such as its rivals Anthropic and Musk's XAI. Oh, interesting. I didn't know XAI was a public benefit corporation. That's cool. OpenAI board chairman Brett Taylor said during Monday's press conference that the new structure would be simpler and allow employees, investors and the nonprofit to own parts of the public benefit corporation. That's all the different stakeholders that are already looking for a slice. He declined to say how large of a stake the nonprofit would have in the public benefit corporation. The potential size is being studied by independent, independent financial advisors. Altman says he expects the moves to result in the nonprofit being one of the largest and best capitalized charities in the world. Very cool.

• 27:55John Coogan?

  And it means we can start deploying capital from the nonprofit very soon, which we're thrilled to do. We've got a long list of things that we think will be very impactful. And I do think that's like an undertold story right now, just what the nonprofit will wind up doing. There's a ton of interesting things that they can do in AI research. I still actually think that they're going to discover something and then want to commercialize it again, because that's just the nature of putting a bunch of, I mean,

• 28:18Jordi Hays?

  I mean, the question, the question there is

• 28:20John Coogan?

  Researchers and just being like, go do whatever. Of course they're going to discover valuable things.

• 28:24Jordi Hays?

  The question there is just wouldn't AI, OpenAI, just the, the public benefit corporation just have kind of effectively a rofer on novel IP and product opportunities?

• 28:36John Coogan?

  No, I don't think the, I, I, I don't think the structure is going to be like that at all.

• 28:39Jordi Hays?

  I'm not saying, I'm not saying actually legally.

• 28:41John Coogan?

  Yeah, yeah.

• 28:42Jordi Hays?

  But would they not?

• 28:43John Coogan?

  So, so, so, so I, I think this is like the, the weird dynamic where the Now, there are two open AIs that you can go work for if you're in AI. If you want to work for the product company, the high growth, you know, studying churn and product, and how do you actually commercialize this? How do you make this an amazing company? The next Facebook, the next Google, you go to work for the the public benefit corporation. You're working on chat GPT, agents, operator, deep research. You're having a great time. You're, you know, the next early Facebook employee, basically. But if you really don't care about that and you want to work at the nonprofit, you want to work on AI safety, you want to work on foundational research, you head over to the nonprofit. And all of a sudden, your job on a day to day basis is much less pressure driven. You don't have the same KPIs. You're just doing research.

• 29:29John Coogan?

  But what happens when you put a bunch of insanely intelligent people together and give them no constraints to just do whatever they want? They're going to come up with something creative like they did before.

• 29:37Jordi Hays?

  Okay, but I just don't know a single person that works at the nonprofit, technically.

• 29:42John Coogan?

  What? Really?

• 29:44Jordi Hays?

  Do you know?

• 29:45John Coogan?

  No, but but but but but once they're capitalized, like they will start scaling that staff with. But their mission won't be like the the mandate for those folks won't be.

• 29:55Jordi Hays?

  Be focused on productizing anything.

• 29:57John Coogan?

  Go build products, go implement, you know, GPT four, five and some tool. Let's figure out coding. Let's figure out agents. Let's figure out booking. It's going to be something much more abstract and foundational. But you put those people with a ton of resources and you let them turn them loose. Like, they're going to discover cool things that will probably be commercializable. Anyway, we'll see how it unfolds. Maybe that's not what happens, but I don't know. Anyway.

• 30:20Jordi Hays?

  Yeah, did you already share this? But Altman says it means we can we can start deploying capital.

• 30:25John Coogan?

  Capital, what does that mean?

• 30:26Jordi Hays?

  Yeah.

• 30:26John Coogan?

  It's, yeah, deploying capital into research that the nonprofit spits out. What will that look like?

• 30:30Jordi Hays?

  Thinking, studies.

• 30:31John Coogan?

  Yeah, exactly. Like, yeah, there's going to be stuff that's just like policy papers. Maybe those aren't commercializable. There's going to be stuff that's just like a critique of how LLMs are being implemented across the world. Right? There's going to be stuff that's not commercializable. But if they start touching research, like they're gonna, they're gonna create value.

• 30:49Jordi Hays?

  I would still go, I would still expect.

• 30:52John Coogan?

  Yeah.

• 30:53Jordi Hays?

  Altman to be looking over and be like, hey, you know, we could get that to a billion of ARR in 12 months if you want, and we'll give you a cut.

• 31:01John Coogan?

  Yeah, but legally, it's going to be complex. Like, like, let's say in the nonprofit, they're like, hey, yeah, we actually found a new just a new algorithm. It's like amazing in booking flights, like never makes a mistake. Altman is just like.

• 31:12Jordi Hays?

  We did the meme, we did the meme.

• 31:16John Coogan?

  No, this was supposed to be the for-profit. Why did this happen to nonprofit? And there's just some like brilliant researcher over in the nonprofit being like, yeah, I was just looking for the most elegant algorithm possible and then I scaled it up and now it just does everything.

• 31:28Jordi Hays?

  He's like, wait, I'm going.

• 31:31John Coogan?

  Anyways, uh, you know, we're all, we're all rooting for OpenAI. We love for-profit corporations and if you're looking to invest in for-profit corporations, head over to public.com investing for those who take it seriously. They got multi-asset investing, industry-leading yields, trusted by millions. Go to public.com. I was hoping they, you know, they say they have multi-asset investing. I'd love to be able to buy a slice of a nonprofit. Multi-asset investing, invest in a nonprofit so that when the for-profit conversion happens, you cash in because that's what nonprofits to me are really about, cashing in.

• 32:01Jordi Hays?

  Well, Microsoft owns part of OpenAI.

• 32:04John Coogan?

  That's a way to get exposure legitimately.

• 32:07Jordi Hays?

  And, uh,

• 32:09John Coogan?

  They own like a significant chunk.

• 32:10Jordi Hays?

  Yeah.

• 32:10John Coogan?

  For a while I was thinking about like another lens to view.

• 32:13Jordi Hays?

  You gotta buy some of teams though, too.

• 32:15John Coogan?

  Yeah, no, no, there is an interesting investment thesis for the mag seven, which is basically like if you want exposure to self-driving cars, virtual reality, artificial intelligence, um, autonomous delivery, like what should you buy? You could go around and buy slices of startups that may or may not work, or you could buy Google, which owns Waymo, Facebook, which owns Reality Labs and Oculus. You could own Microsoft, which owns OpenAI. You could own Amazon, which is probably going to figure out delivery.

• 32:45Jordi Hays?

  Tesla, humanoids.

• 32:46John Coogan?

  Tesla, humanoids, right? Like, like the mag seven have pretty good exposure to the next trends as you list them out. Of course, they're not pure plays and they're not gonna, and it's hard for them to do a thousand X, but it's not, not a crazy idea to just go and buy mag seven. If you're looking to index on the next, the next wave of like 20-year tech trends. Who knows? Some of those might be disruptive though. Some of them might be, get rocked, but so far looking pretty good. Anyway, um, the information dove deeper. They said Elon Musk might have won the battle over OpenAI's future, but who's to say Sam Altman isn't going to win the war? Today's announcement by the chat GPT creator that it was abandoning plans to move its for-profit arm out from under control of nonprofit conceding to Musk's legal, legal efforts to stop the restructuring

• 33:30John Coogan?

  could end up cementing Altman's power at OpenAI. After all, OpenAI will remain a company whose controlling shareholder is the nonprofit. So whoever controls the nonprofit controls OpenAI. The information writes, OpenAI's existing board will decide who sits on the nonprofits board in the future. Is this like a one hand washes the other scenario? What's going on?

• 33:52Jordi Hays?

  Well, the key thing to note here is that it's, and this article shares, it's reasonable to assume that Altman has a lot of sway with the existing board, which is very different from the one that fired him in November 2023. So they already did the work to effectively turn it over and align it with the for or the public benefit.

• 34:12John Coogan?

  There's 10 members, including Altman, on the current board, which will appoint the nonprofit board. So, oh, makes my head spin. It's hard to imagine that OpenAI, that as OpenAI gradually added new members to the board, Altman let anyone anti-pathetic to his ambitions join. The only potential wrinkle in Altman's effective control of OpenAI going forward is whether state regulators get a say in nonprofits, in nonprofits administration. Barring that, he appears to be well positioned.

• 34:43Jordi Hays?

  Remember, this was why they, this was the real reason that it seems they halted the conversion is because Delaware and California were not, seemingly not too excited about what was happening.

• 34:54John Coogan?

  Hmm. Who is the current board? Adam? Is Adam on there? Okay, yeah. So Brett Taylor, who's the chair, Adam D'Angelo, Sue Desmond-Hellman, I haven't heard of her, need to dig in there, Zico Colter, retired US Army General Paul Nakasone, Adebayo Onglessi, Nicole Sigalman, Figi Simo, who's from Instacart, Larry Summers, as well as our CEO, Sam Altman. Seems like a pretty good crew. It's fun. OpenAI is governed by the board of the OpenAI nonprofit, currently comprised. So it seems like there's some switch here. This is all very confusing. Anyway,

• 35:37John Coogan?

  let's get some, let's get some, let's get some venture capitalists on that board.

• 35:41Jordi Hays?

  Yeah.

• 35:43Jordi Hays?

  Jeff Lewis.

• 35:43John Coogan?

  Devoid of that Jeff Lewis would be great. I want Thrive Capital on there, Maswa on there.

• 35:50Jordi Hays?

  All of them.

• 35:50John Coogan?

  Good people. You know, SoftBank, actually fantastic board governance. You know, people talk a lot of trash about SoftBank for a variety of reasons. When they come into a company, they run it like a public company.

• 36:00Jordi Hays?

  Yeah.

• 36:01John Coogan?

  It's like compensation committee, conflicts committee, like the board meetings are full day events, like very well organized because they, they, they take that stuff very seriously.

• 36:08Jordi Hays?

  They're professionals.

• 36:09John Coogan?

  Professionals.

• 36:10Jordi Hays?

  High risk, risk on professionals.

• 36:12John Coogan?

  Extremely risky, but professionals, which we, we, we respect here. At least one OpenAI investor seems satisfied with the, with the outcome and told us that it's the best outcome, given the parameters that exist right now, especially because of the scrutiny and pressure that came with Elon Musk's lawsuit opposing the restructuring. The investor added that even as they awaited the potential IPO in OpenAI's future, large secondaries, which OpenAI has already done, could be another way for stakeholders to cash out. Keeping control in the hands of the nonprofit board is significant. The restructuring endeavor began because the nonprofit's, nonprofit board's goal to make AI for the benefit of humanity may or may not conflict one day with shareholders' desire for hundreds of billions of dollars in profit.

• 36:52John Coogan?

  You might remember that when OpenAI announced the restructuring four months ago, the board, which oversees OpenAI's nonprofit, said they couldn't adequately consider the interests of investors who were pumping tens of billions of dollars into the for-profit subsidiary that runs ChatGPT.

• 37:06Jordi Hays?

  Imagine you're an LP in one of the funds that has deployed billions and you send, you know, a little Saturday afternoon email being like, hey, by the way, what do we actually own of OpenAI? And then you as an investor have to try to, you know,

• 37:23John Coogan?

  Yeah.

• 37:23Jordi Hays?

  untangle this, this web.

• 37:25John Coogan?

  They had a name for it. It wasn't, for a while, it wasn't, it was like credits or something or like fun coupons. It wasn't shares. It wasn't stock. It was units, units. That's what they were calling it. Absolute units.

• 37:37Jordi Hays?

  Well, that's, that's an L, you know, terminology standard with LLCs.

• 37:42John Coogan?

  Absolute units.

• 37:43Jordi Hays?

  Absolute units, absolute dogs.

• 37:45John Coogan?

  Yeah, no, no, it makes sense. Anyway, I'm sure they have to plan all these secondaries, plan all of these, all these share sales. And what are they using to plan?

• 37:56Jordi Hays?

  Well, I don't know if they're, I doubt they're using Linear for corporate governance, but I bet you they're using Linear for purpose-built planning.

• 38:06John Coogan?

  For sure.

• 38:06Jordi Hays?

  And product building. Linear is a system for modern software development, streamline issues, projects, and product roadmaps. You guys know already that we use Linear for running the show, and we are very grateful to have them as a sponsor. We are also going to be live in person tomorrow in SF with Kari from Linear and a bunch of other people. So, very excited for that.

• 38:31John Coogan?

  Well, there is more news. We'll stay on OpenAI for a little bit. There's so many stories around this. So, Microsoft, we'll go to the Microsoft angle. Sharon Gaffar, Gaffare, says, "Microsoft has not yet agreed to OpenAI's restructuring plans, and is a key holdout negotiations needed to get the restructure deal done, along with approval from state AG offices. Still being decided how much equity Microsoft gets." So.

• 38:55Jordi Hays?

  Such a wild dynamic. This is.

• 38:58John Coogan?

  Let's see. "Microsoft has invested $13.75 billion in the startup, and they remain the biggest holdout among investors as the ChatGPT maker tries to restructure," according to several people familiar with the matter. Now, that $13.75 billion, was that cash that ever transferred and was wired? Or were those credits? Or did they transfer and then go right back to Azure? Like, I'm very interested in the anatomy of that deal. I hope that someone digs into this more and actually asks for the structure, because.

• 39:29Jordi Hays?

  Yeah, I mean, I think it was, I know it was both. The question is, what is the actual ratio?

• 39:34John Coogan?

  Yeah. And, and, and how does, I guess, how does Microsoft feel about how much they invested? Do they feel like, hey, we're owed $13.75 billion at this valuation, at the last valuation, a new valuation, a post-dilution valuation? Or are they like, yeah, it was really only like? Five billion in total cost because we we gave you credits at like a two to one ratio.

• 39:55Jordi Hays?

  Right? Yeah, I mean, the the thing here that that's apparent is it's nonstandard for a 3.2 trillion dollar company to invest 13 billion dollars in another company that then is restructuring. And it's unclear how much the 3.2 trillion dollar company is even going to own of the underlying investment. Haven't seen this, at least in my lifetime.

• 40:24John Coogan?

  Yeah, for sure. There there really has never been a tech company.

• 40:28Jordi Hays?

  Like, it's funny, they kind of have to just like get around the table and decide, okay, how much is Satya gonna get? You know, how much does Sam get, right? Because a part of this, I think Sam needs to get some personal exposure because, you know, if you check back to the Senate hearings, he, at that point in time.

• 40:45John Coogan?

  Had nothing.

• 40:46Jordi Hays?

  Had nothing.

• 40:47John Coogan?

  Then he got a bunch.

• 40:47Jordi Hays?

  Yeah.

• 40:48John Coogan?

  It does seem like they're gonna make a movie out of this, but it might be more complicated than The Big Short, or.

• 40:54Jordi Hays?

  Might be like a four hour documentary.

• 40:56John Coogan?

  It's just gonna be Margot Robbie in the bathtub for six hours explaining how all these different entities interact because it's more complicated than mortgage backed securities and credit default swaps combined. It's gonna make the 08 financial crisis look like two plus two. It's like, by comparison, this is so much more complex. Anyway, Microsoft is still actively negotiating details. Microsoft not commenting. They said in a statement, OpenAI said, "We continue to work closely with Microsoft and look forward to finalizing the details of this recapitalization in the near future." I mean, the the good news is like, like, Microsoft and OpenAI are pretty well aligned on like what they do best. Like, OpenAI clearly is fantastic at at consumer product development, breaking through with

• 41:41John Coogan?

  the Ghibli moment, with deep research, like all this. And then, in terms of the API, it's great to vend that through to Azure. And that's the relationship and it seems like it's a really fruitful one. And it's okay for them not to dominate on the Azure side or take some sort of like, like not really build that out. It doesn't seem like they're, it, it, no one would say, oh, they're just going to be a consumer tech company. They'll only be worth three trillion. Yeah, like it's fine if they just become just Google or just Facebook, right? Like that, that's a pretty good outcome.

• 42:12Jordi Hays?

  Or just eat some percentage of search volume.

• 42:15John Coogan?

  Yeah, seriously. Microsoft isn't the only party that OpenAI needs buy in from. They're fighting with the attorneys general of California and Delaware. OpenAI needs to do a fair market valuation on the nonprofit stake in the future for profit entity. And is asking state AGs for input. Say, how much are we worth? So this is kind of like a 409A situation or like a 83B. Like let's, let's figure out what the, what the base valuation here is, but that can be so wild. I mean, imagine you're attorneys general and

• 42:48Jordi Hays?

  Trying to value OpenAI.

• 42:49John Coogan?

  They're like,

• 42:50Jordi Hays?

  It's like on one hand, you may have created a machine god.

• 42:53John Coogan?

  It's worth infinity.

• 42:55Jordi Hays?

  That's worth infinity. On the other hand, you're burning

• 42:58John Coogan?

  Yeah.

• 42:59Jordi Hays?

  Five, 10 billion dollars a year.

• 43:01John Coogan?

  And the world's richest man is actively trying to bury you.

• 43:05Jordi Hays?

  Running to the ground.

• 43:06John Coogan?

  Yeah. So it's either infinity or zero. One of the two.

• 43:11Jordi Hays?

  It's so funny, I'm using O3 and I asked, how much cash has Microsoft invested in OpenAI? And it's basically stuck in a doom loop of searching the web and then trying to understand it. And then just looping back to searching the web. It's been going, it's been going for about five minutes now.

• 43:29John Coogan?

  Wow.

• 43:29Jordi Hays?

  So we'll see.

• 43:30John Coogan?

  Just O3, not even deep research?

• 43:32Jordi Hays?

  Yeah.

• 43:33John Coogan?

  Just O3 is just five minutes into this figuring this out.

• 43:36Jordi Hays?

  Well, I just want

• 43:37John Coogan?

  Wow.

• 43:37Jordi Hays?

  A pretty specific answer.

• 43:38John Coogan?

  This is, this is the, this is the, this is humanity's last exam.

• 43:41Jordi Hays?

  Yeah. How much money?

• 43:43John Coogan?

  Makes, makes sense of OpenAI.

• 43:45Jordi Hays?

  Yeah.

• 43:45John Coogan?

  If you can do that, you've passed the re-altering test.

• 43:47Jordi Hays?

  Yeah.

• 43:48John Coogan?

  AGI is here. So Microsoft's approval will be key. Only OpenAI insiders, Microsoft and other early investors currently have a direct say in approving the restructure, according to two people. As a result, only that group gets to weigh in on the restructuring plan, the people said. But among investors, OpenAI is currently only negotiating with Microsoft. Microsoft has a unique relationship compared with other investors because of its licensing and revenue sharing. And they also had that AGI clause for a while, but I don't know where that went. Anyway, I'm sure Microsoft, OpenAI, they all got to manage risk, they got to automate compliance, they got to get on Vanta.

• 44:25Jordi Hays?

  Do it.

• 44:26John Coogan?

  And they got to prove 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, I can't imagine anything more complex than doing compliance at OpenAI. And yeah, if you're working on anything important.

• 44:49Jordi Hays?

  Pretty much any company, it's very painful. Start to finish support for 35 different compliance frameworks, SOC 2, HIPAA, you name it. Head over to Vanta.

• 44:57John Coogan?

  Head over there.

• 44:58Jordi Hays?

  Tell them the technology brother sent you.

• 45:00John Coogan?

  Fantastic. Anyway, founder of Windsurf posted, "Big announcement tomorrow."

• 45:06Jordi Hays?

  As if the biggest announcement wasn't going and doing a podcast with a double, you know, double collar on.

• 45:13John Coogan?

  Yeah. And so the OpenAI agreement to buy, start up Windsurf for $3 billion is finalized. It's been reported in Bloomberg. We need a massive Sizgon. Katie Roof has the story over at Bloomberg.

• 45:30John Coogan?

  OpenAI has agreed to buy Windsurf, an artificial intelligence coding tool formerly known as Codium, for about $3 billion, according to people familiar with the matter, marking the ChatGPT maker's largest acquisition to date. The deal has not yet closed, said the people who spoke on condition of anonymity. Both companies declined to comment, although the founders out there tweeting and wearing two polos. The acquisition could help OpenAI take on rising competition in the market for AI-driven coding assistants, systems capable of tasks like writing code based on natural language prompting. Bloomberg News previously reported that the two companies were in discussions. Windsurf, formerly called ExaFunction Inc., has recently been in talks with investors, including Kleiner Perkins and General Catalyst, to raise a $3 billion valuation.

• 46:14John Coogan?

  Last year, they were valued at 1.25 by General Catalyst, and OpenAI came over and scooped them up. So I have a little bit of a history deep dive if you want to go through this to break down Windsurf, how they wound up there. So 2021, ages ago in the AI race, but you know, a real, a true overnight success here to go from starting a company in 2021. Yeah, they could have gone into crypto. They decided to go into AI. So their MIT friends, Varun Mohan, ex-neuro autonomy infrastructure lead, and Douglas Chen, who had worked at Meta and Oculus as an engineer, incorporated ExaFunction Inc. in California to abstract away the challenges of managing accelerated hardware like GPUs.

• 46:59John Coogan?

  Like a GPU, they're basically a GPU wrapper. It's funny, like wrapper is in their DNA.

• 47:04Jordi Hays?

  Yeah, so basically what they were doing, I actually have a post up from Bruno from X, and at the time, ExaFunction customers connect to the company's managed service or deploy ExaFunction software in a Kubernetes cluster. The technology dynamically allocated resources, moving computation onto cost-effective hardware, such as spot instances when available. And so anyways, pretty wild to see.

• 47:30John Coogan?

  Yeah, so you can get cooked if you're on AWS and you're just using like the reserved instances. And so sometimes if there's, if there's specifically, you know, cloud hardware that's underutilized, the price falls in the spot market, and so you want to dynamically move over there. So they're, they're using this like server-side virtualization to do that, but it really is. A GPU wrapper.

• 47:49Jordi Hays?

  Yeah.

• 47:49John Coogan?

  But it's funny because Kubernetes is also supposed to do that.

• 47:52Jordi Hays?

  Don't stop wrapping.

• 47:53John Coogan?

  Yeah, but they wrapped, they wrapped the wrapper. So they raised a $3 million seed from Green Oaks to build this service.

• 47:59Jordi Hays?

  I have another post up from Shy who highlighted, Shy Goldman, he highlighted that the round was 3 million on 23 million pre.

• 48:08John Coogan?

  Wow, pretty good on the dilution front.

• 48:10Jordi Hays?

  Yeah, not, not bad.

• 48:12John Coogan?

  Watch out, Sutherby's, these founders are going to be bidding against a lot of you folks.

• 48:16Jordi Hays?

  Yeah, VCs creating their own competition at Sutherby's.

• 48:19John Coogan?

  Seriously, yeah, this is dangerous.

• 48:21Jordi Hays?

  Of course, they went on to do many more rounds, including, you know, some that we'll get to.

• 48:26John Coogan?

  Yeah, so a year later, April 28th, 2022, Series A, X the Function emerged from stealth with a $25 million Series A. It says Green Oaks and Founders Fund. Is this really an FF company? I never knew that if that's the case, but I know Lee Marie was in, and so maybe, maybe that got kind of confused. I don't know.

• 48:45Jordi Hays?

  Hallucination.

• 48:46John Coogan?

  Who knows?

• 48:48John Coogan?

  It's a bold claim to, and they had a bold claim to be the reference infrastructure for service, serverless deep learning. And so they're going deeper into AI specifically. Promising customers faster inference and lower bills by multiplexing workloads across thousands of GPUs. So there's a lot of idle GPUs out there and they're going to bind and allocate your inference workloads to the lowest ones. This is a famous story from Mid Journey, which was like getting started around this time. Mid Journey, obviously very inference, a very inference heavy in the sense that you, you generate an image and it generates four of these images and they diffuse very slowly and you're getting these little streaming updates while the images kind of de-pixelate.

• 49:31John Coogan?

  But famously, Mid Journey, because it's not, it doesn't matter that it's low latency because it takes a minute. And so it doesn't matter if it's, if it takes a full second to stream you the final image. They would render those images on servers across the world.

• 49:48Jordi Hays?

  Yeah.

• 49:48John Coogan?

  Because they're like, no one's watching Netflix at 3 a.m. in. Taipei or whatever. So they would have Well, John, I'm sure a few people are. Yes, I'm sure. But, uh, but you get the idea. Yeah. The American servers were used for the international audience and vice versa. And so thi- this idea of like load balancing is, is, is a tale as old as time, but clearly there was a market here. And so they raised their $25 million Series A. Early pilot customers in autonomous vehicle and vision startups reported 10, 5 to 10x hardware utilization gains, but Mohan worried the business world would become, the business would become a commodity. Once every model looks the same. Interesting. So they make a decision to pivot in mid 2022. Watching GitHub Copilot's debut, the founders concluded that

• 50:33John Coogan?

  their application layer AI, not infrastructure, would capture real world value. They chose to pivot, betting that their low latency serving engine could run an AI code assistant cheaper than anyone else. Fascinating. So like in the, at this time, like the meme was don't build a wrapper. Uh, the value accrues to like the hardware layer, like go deeper. And instead they're saying, hey, we're actually set up really well to serve a fantastic AI code assistant and cost competition is going to be very important. Yeah. Even though we've been in this era of like free VC money and and people are paying a ton of money for everything, but having that, having that margin and that optimization really makes sense. Uh, and it seems like that's increasingly the way you break through is like the, you know, deep seek. It's like the optimization on the inference optimization on the hardware.

• 51:17John Coogan?

  Like the economic gravity of these projects really does matter. So in December of 26, December 6th of 2022, Codium launches on Hacker News, Neil, uh, on Hacker News, Mohan announced, we just released Codium to open up access of generative AI to all developers for free. Try it in the browser. The extension shipped for VS Code, Jetbrains, Vim and more, trained only on permissively licensed public code and promising to stay free forever for individuals. Wow. Very cool. So, uh, speed wins fans in early 2023. They're getting up and running. Kleiner Perkins leads a, uh, $65 million Series B at a $500 million valuation and the response on Hacker News is

• 51:58John Coogan?

  very good. Folks are saying that it's noticeably faster than Copilot and Edge credited to Exafunction's GPU scheduler. And so, I mean, this was the time when everything was scaling up and like, I mean, even ChatGPT at the time would be like, oh, I'm cooked. GPUs are melting.

• 52:16Jordi Hays?

  I'm cooked.

• 52:16John Coogan?

  I mean, I'm sure you saw this with the Studio Ghibli moment. There would be tons of times when it would just be like, failed, broke connection.

• 52:22Jordi Hays?

  Or just come up with an excuse not to do the work.

• 52:25John Coogan?

  Lazy.

• 52:25Jordi Hays?

  Lazy.

• 52:26John Coogan?

  And so, by mid-year, Codium had grown organically to tens of thousands of daily users without a dollar of marketing spend, super viral, especially in tech Twitter and X. Kleiner Perkins leads that Series B, joined by Green Oaks and General Catalyst. Kleiner Perkins partner Lee Marie Brasswell called Codium "a secure personalized productivity multiplier, deployable on-prem or in the cloud." We gotta have LM on, she's great. I worked with her for a couple of months at Founders Fund. And then she got poached over to KP. Very dramatic.

• 52:59Jordi Hays?

  Poach alert.

• 53:00John Coogan?

  Yeah. So they hit 300,000 developers in just 15 months. VentureBeat reports that Codium already wrote 44% of new commits for over 300,000 developers and dozens of Fortune 500 teams.

• 53:15Jordi Hays?

  So the CEO at this time gave a quote to TechCrunch saying, "Even though we've barely made a dent in the B money, this lets us ramp R and D and make larger strategic bets."

• 53:24John Coogan?

  You love it.

• 53:25Jordi Hays?

  Just scaling.

• 53:27John Coogan?

  So they add self-hosted and AirGAP deployments, which is pretty cool. SOC 2, Type 2 compliance, post-generation license filtering features that one cautious customer is like Anduril, Zillow and Dell. And so, yeah, if you need to be in a, I think we've been talking about this with like some of the Llama instances going into the DoD, like at a certain point, like you can't just be like calling out to some random server all the time, like it has to run locally. And so, having that optimization background makes a ton of sense. They become a unicorn in 2024, just what, six months ago, August 29th, 2024. They do their Series C. TechCrunch breaks the news, $150 million Series C led by General Catalyst, valuing them at

• 54:08John Coogan?

  1.25 billion. Total funding hit 243 million. GC's Quinton Clark praised the customer follow ethos and multi IDE coverage. They're at 700,000 users then, a thousand enterprises. Crazy. And they were the leading independent rival to GitHub Copilot this time. To signal a bigger vision, the company rebrands the product and domain as Windsurf, which is interesting. Yeah, this happened in November of 2024, and that's where like, so it felt like Windsurf kind of came out of nowhere, but we're now like three rebrands into this. Like it goes from Exa, Exa Function, which you might have heard of, and Codium, which I think I'd heard of a little bit. And now Windsurf came out and then it was like

• 54:52John Coogan?

  the, the, the big launch and everyone's talking about Windsurf being so great. A new AI, AI native IDE bundled inline completions, whole repo search and cascade, and autonomous agent that plans multi-step fixes and starts working before you ask, aimed at keeping devs 10 steps ahead.

• 55:08Jordi Hays?

  Windsurf is beautiful name.

• 55:11John Coogan?

  It is.

• 55:11Jordi Hays?

  Windsurfing kind of fell off. It used to be a thing.

• 55:15John Coogan?

  It's moved on to, what's the new one?

• 55:16Jordi Hays?

  Kiteboarding.

• 55:17John Coogan?

  Kiteboarding. Maybe that's next, next AI company.

• 55:21Jordi Hays?

  Yeah.

• 55:21John Coogan?

  One editor, unlimited superpowers, marketing touted Windsurf Tab, a command palette that surfaces context aware snippets, tests docs and deployment from a single keynote, keystroke, heralding the IDE wars of 2025. We will never forget those. They hit 40 million ARR.

• 55:37Jordi Hays?

  I mean, we're still in the midst, we're still in the midst of them. I mean, obviously, the, the other news out of the last 24 hours is that Cursor is raising 900 on 9 billion.

• 55:46John Coogan?

  9 billion.

• 55:46Jordi Hays?

  That was initially rumored to be at closer to 10.

• 55:49John Coogan?

  Yeah.

• 55:49Jordi Hays?

  But it has a bunch of big names in it too. So the IDE wars will continue.

• 55:54John Coogan?

  Yeah.

• 55:54Jordi Hays?

  The show will go on.

• 55:55John Coogan?

  Yeah.

• 55:56Jordi Hays?

  And, uh, yeah, I don't think Windsurf is not going to back down in terms of their ambitions. I am interested to see if they just sort of, uh, continue the Windsurf brand or it's just rolled into ChatGPT completely, but.

• 56:10John Coogan?

  Also interesting that they have this freemium funnel. Uh, converting to $12 to $60 per seat enterprise contracts. Like even doing per seat here instead of consumption is very interesting because that doesn't necessarily, like you have, at least in the short term, like real variable costs. Like you could sell in a bunch of seats and if you have some power user who's just sitting there hitting tab every two seconds, like they could burn through a lot of inference cost.

• 56:38Jordi Hays?

  Yeah.

• 56:38John Coogan?

  But I guess that they're just really comfortable dealing with their infrastructure scaling.

• 56:42Jordi Hays?

  Yeah. And to be clear, I don't think any of their investors at any point over the last two years was really saying, hey, you could focus, you should really focus on margins.

• 56:51John Coogan?

  Yeah.

• 56:51Jordi Hays?

  Just because it was clear that inference costs were dropping off a cliff.

• 56:56John Coogan?

  Yeah.

• 56:56Jordi Hays?

  During that, you know, entire period.

• 56:58John Coogan?

  Yeah. Yeah. I mean, we've certainly seen that with the new, with the new O three models. And, and it's, it's, it seems like something that's very, very solvable in the, in the mid, midterm as you bake the models down, distill them, optimize them, all those things. So certainly something you don't need to worry about. It's just interesting that like, that they're betting on this, this per seat model. I wonder if that will stay because you could imagine that the margins could be the same and you could still do it on a consumption basis. Like, you know, AWS is mostly consumption based, not seat based, right?

• 57:24Jordi Hays?

  It's one of those things at some point, if companies are hiring less engineers, but doing significantly more engineering work, you would want to effectively.

• 57:33John Coogan?

  Exactly.

• 57:34Jordi Hays?

  Be an index on engineering labor.

• 57:37John Coogan?

  Yep.

• 57:37Jordi Hays?

  You know, AI led.

• 57:39John Coogan?

  It's like number of lines of code changed is what you want to be comped on or, or just, or just raw inference cost, right?

• 57:45Jordi Hays?

  Yeah.

• 57:46John Coogan?

  Just pay me 10x what it costs to inference this thing. Uh, I don't know. So there's some funding rumors. We talked about this. Kleiner Perkins is thinking about doing another deal, but they get this acquisition agreement for $3 billion. Observers called it a distribution grab, owning Windsurf hands OpenAI direct channel to millions of programmers and keeps a prime asset away from Anthropic, Microsoft's GitHub and Cursor. Before the sale, Windsurf and Cursor were neck and neck in the Agentic IDE space. One analyst quipped, begun the IDE wars have, as Cursor sought a $900 million round to stay independent.

• 58:19John Coogan?

  Mohan credits weekly five-hour walk-in talks with his co-founder for intellectual honesty, the habit that enabled a radical pivot from infra to app while competitors.

• 58:29Jordi Hays?

  Well, meant.

• 58:29John Coogan?

  Monitis.

• 58:30Jordi Hays?

  Method.

• 58:31John Coogan?

  Yeah, yeah, totally. Probably putting up thirty thousand steps a day at that pace. It's great. So they still own their proprietary L L Ms on GPU virtualization layer. It owns end to end, allowing sub to hundred millisecond suggestions and cost structure cheap enough to keep the individual tier free. Company filters out G P L and other restrictive licenses, blah, blah, blah, blah. Anyway. Pretty fun, pretty fun. Really good outcome for everyone involved. Just a couple of years, billions of dollars created in value.

• 58:58Jordi Hays?

  Yeah, I mean, it's interesting.

• 59:02Jordi Hays?

  For, again, this comes back to this kind of question for all these platform investors around needing a lot of windsurfs in a single fund to return a fund, even potentially a one X, right? So.

• 59:17John Coogan?

  I do wonder if the, if windsurf will get rolled into OpenAI and Chat G P T in any meaningful way, because like just from a product perspective, OpenAI has been kind of bifurcating the apps a little bit. So the latest Studio Ghibli moment happened via images in Chat G P T. The previous images project they worked on, Dolly and Dolly two, those were separate URLs. So separate, separate apps. They eventually brought some of that into Chat G P T. But Sora is still its own domain. It's so its own editor, basically, because you want to be able to adjust

• 59:58John Coogan?

  the timing on certain cuts and add music and kind of a nonlinear editor just makes more sense for video editing. Certainly, you don't want to be writing code just in the Chat G P T app. But, you know, they have a bajillion users, right?

• 1:00:14Jordi Hays?

  Yeah.

• 1:00:14John Coogan?

  Probably makes sense to bring, to leverage that distribution one way or another.

• 1:00:19Jordi Hays?

  My, my bet as of right now is windsurf by OpenAI, not OpenAI.

• 1:00:26Jordi Hays?

  Code.

• 1:00:27John Coogan?

  Yeah, yeah, not like, oh, a new button where I could click deep research or I could click windsurf. And if I click windsurf, it just builds me an app. I don't know. I think that might be cool. It's already writing code pretty frequently. When you ask it to crunch some numbers, it'll go and crunch the numbers down. And tool use seems to be really important. So I could, I could imagine some of the stuff getting ported back. But it does seem like windsurf just by itself is its own great product. You know, it's popular and so they will continue to do that. Anyway, we were tracking this on Polymarket, sponsor of the show and Polymarket had will OpenAI acquire Windsurf before August shot to 99%. It was at like 60% yesterday, right?

• 1:01:07Jordi Hays?

  Yeah, I think the big question was just trying to understand how. Yeah, if this actually was a rumor, it was at 80% a week ago. And then somebody bet big, no, and cratered. And then it just steadily ticked back up until yesterday.

• 1:01:26John Coogan?

  Yeah. So, so yesterday, when we talked about it on the show, that was May 5th and it was like noon. It was at 67% and we said that the double polo told the story. And the double polo was evidence that the deal was going through that you wouldn't throw on the double polo. If the deal with Sam Altman was going south and we were correct. And there were a couple of posts about this later in the show. We'll, we'll maybe dig through them. But anyway, cool to see that Polymarket, you know, predicted it and was, was, was edge positive right up until the, the final confirmation. I still think it's interesting because like, yes, they have an agreement, but there's so many things that could fall through posts. So 99% maybe feels even a little bit too high now. I don't know, but.

• 1:02:07Jordi Hays?

  Yeah, who knows?

• 1:02:08John Coogan?

  Go and, go and express your own view on, on Polymarket. Check it out.

• 1:02:13Jordi Hays?

  Oh, it's so funny.

• 1:02:16Jordi Hays?

  Varun is hilarious. So 34 minutes ago, after we started the show, last night he posted, big announcement tomorrow and everybody's just saying like, congrats, like this is amazing. And the big announcement is Windsurf Wave 8. It's so big. We're doing it over three days. Today we have a bunch of updates that make Windsurf, Windsurf the best product for teams. Windsurf can now automatically review your code, use internal knowledge sources, share a conversation and deploy apps internally and more. So anyways, I guess.

• 1:02:45John Coogan?

  I think this is great. I think if you are getting acquired, that's that it is weighty and it is important. But no, no, no. Focus on the focus on the company, focus on the product, focus on the customers. Like, job's not finished. Like, yes, you have new shareholders. And you're and you're aligned with the new team. You have more resources, but continue to grow that.

• 1:03:05Jordi Hays?

  Yeah, it's so interesting because now Bloomberg and a bunch of other media outlets have said, OpenAI reaches agreement to buy startup Windsurf, but we haven't seen anything from the Windsurf team.

• 1:03:19John Coogan?

  You would think that they would put out an official statement.

• 1:03:20Jordi Hays?

  Or anything. Yeah.

• 1:03:23John Coogan?

  Yeah. So Dakeesh Gupta said, so the Windsurf guy wore a double polo on the YC podcast, which was last worn by the OpenAI guy when he was working on his first startup in the early 2000s, signaling that the rumors of acquisition are in fact true. And it's like the guy yelling in the girl's ear. And Spore says, so this was correct, lol. It actually did happen. Anyway, should we go through Apple's iPhone woes? The prices are going up. They're getting hit by tariffs. Apple won't be able to avoid price hikes for long. The iPhone maker is absorbing $900 million in tariff costs this quarter, but the hit to profit margins could still get worse. So Apple's latest earnings report shows the company is choosing to eat the additional costs and not raise the prices.

• 1:04:08John Coogan?

  But Raymond Jane's analyst says, looking ahead, our base case for Apple is to raise prices, which should help offset the tariff impact to an extent. Now, Apple hasn't raised prices in a while, even in the head of inflation, even in the face of COVID stuff. So I think they have some room to raise the prices, but they are getting expensive. Once you break the $1,000 point price point, people psychologically, it's different. It feels more like a laptop. At the same time, spend more time on your phone than your laptop, right? So, yeah, I mean, I'd rather I'd rather have a $4,000 phone and a $900 laptop, honestly. Laptop can just kind of do whatever. I went to the Apple Store to buy this laptop.

• 1:04:43Jordi Hays?

  Yeah, I've always, I mean, it is, it is amazing that, you know, a device that you can be so dependent on still costs less than $1,000.

• 1:04:52John Coogan?

  Use it more than your car. Like, if it was $30,000, I think people would still buy it. You know, of course, there's like pricing dynamics of like, you know, will the iPhone stay competitive? Because it can't be 10x an Android. People will switch. Blue bubble is probably not worth that much, but but but in terms of like the value that's created in your life by your phone, like it's it's up there.

• 1:05:15Jordi Hays?

  Yeah.

• 1:05:15John Coogan?

  Up there with the best of them.

• 1:05:16Jordi Hays?

  Yeah.

• 1:05:17John Coogan?

  The tariff impact so far is actually pretty slight in Apple's earnings call. Tim Cook said the company expects 900 million in additional costs. That would add less than 2% to what Wall Street was projecting for Apple's cost of sales. And so, yeah, the cost of sales is in the, what, 50 billion range to make all those iPhones? If it goes up by 0.9 billion, not that big of a deal.

• 1:05:39Jordi Hays?

  Yeah.

• 1:05:39John Coogan?

  But few believe Apple's tariff.

• 1:05:41Jordi Hays?

  Tim's like, we're gonna eat it for now, and then next quarter, we're gonna raise prices.

• 1:05:45John Coogan?

  Yeah.

• 1:05:45Jordi Hays?

  And hopefully, people forget.

• 1:05:47John Coogan?

  Yeah. Given the prospect of tariffs of Trump's sectoral tariffs, we think it is prudent to at least double the 900 million hit to COGS for a few quarters beyond June, says one of the researchers covering Apple. Concern about Apple's margins come in coming periods helped drive the stock down nearly 4% following its earnings report. The stock lost a further 3% on Monday after the information reported that the new ultra-thin Apple iPhone iPhone Apple is planning to launch later this year will include compromises such as shorter battery life. Interesting. I didn't realize they were going thinner. That's kind of a cool story. I might do that. I don't know. I never run out of battery.

• 1:06:26Jordi Hays?

  I would, I would, I'm not gonna go as far to say, I'm not, I'm not gonna go as far as to say I would stand in line for an ultra-thin iPhone, but I would hurry to get one.

• 1:06:37John Coogan?

  So you, so you would be okay with shorter battery life?

• 1:06:40Jordi Hays?

  Yes.

• 1:06:40John Coogan?

  I think so, too.

• 1:06:41Jordi Hays?

  Well, because the battery is always good. Battery is always good in the first six months.

• 1:06:45John Coogan?

  Yeah. But can you imagine? So it's gonna be a thinner phone, but the camera bump will probably be like three times longer.

• 1:06:51Jordi Hays?

  It's a telescoping.

• 1:06:51John Coogan?

  It's a telescope.

• 1:06:53Jordi Hays?

  Imagine, imagine a little telescope.

• 1:06:55John Coogan?

  Just people are like, yeah, the camera lenses keep breaking off because they're so, they protrude so much. Ridiculous.

• 1:07:02Jordi Hays?

  Something, something there.

• 1:07:03John Coogan?

  Anyway, there's, there's a chart here about the iPhone prices. They went up almost to 1,000, and they've been down for the last couple of years, hovering around 900. Can't really go too far. Anyway, Apple shed more than 350 billion in market cap since President Trump's announcement of new tariffs on April 2nd. Most other mega cap stocks have since recovered from their post tariff losses. Company's been making moves to offset the hit from tariffs. Cook said Thursday that most of the devices shipping to the US will come from India and Vietnam. They're getting out. Especially as it looks to enhance the iPhone with new cutting edge designs such as a thinner body or bendable screen that pose more complicated manufacturing challenges. Yeah, they gotta, they gotta spice it up. They gotta do something different.

• 1:07:44John Coogan?

  I feel like there's, you know, people have the, the, the Mac, the iPad, the phone. Throw something else in the watch, you know, just give me something in between. I was thinking about trying to carry it.

• 1:07:53Jordi Hays?

  Market has, will Apple release a new product line in 2025 at 24%? And will Apple release a foldable iPhone in 2025 at 7%? But bendable iPhone is not on the list yet.

• 1:08:05John Coogan?

  Even if it's worse.

• 1:08:06Jordi Hays?

  Bendable devices so.

• 1:08:07John Coogan?

  I just want something fresh. I'm bored. Yeah, I don't care.

• 1:08:10Jordi Hays?

  Give me something.

• 1:08:11John Coogan?

  Just give me something. Yeah, exactly.

• 1:08:15John Coogan?

  Anyway.

• 1:08:15Jordi Hays?

  Bendable iPhone is really funny because you can imagine people just putting it in their back pocket and then it's just sort of folding around.

• 1:08:22John Coogan?

  Yeah. I mean, I think bendable means foldable in this context, but.

• 1:08:25Jordi Hays?

  Okay.

• 1:08:26John Coogan?

  I don't know.

• 1:08:27Jordi Hays?

  I was thinking more like bendable, like, you know, a stick. If you try to actually fold the stick, you're gonna break it.

• 1:08:32John Coogan?

  I'm just bored. I want something new. I was hoping they'd do a TV. I still like the Apple Vision Pro. I'm excited for the next one.

• 1:08:38Jordi Hays?

  How about a backpack?

• 1:08:40John Coogan?

  Yeah.

• 1:08:40Jordi Hays?

  That, uh, that, uh, you know, operates as a, you know, desktop, you know, computer and a very, you know, an extra large mobile phone.

• 1:08:49John Coogan?

  You know what, you know what I was talking about?

• 1:08:51Jordi Hays?

  Something like, if you could get like, make just the largest mobile phone on earth.

• 1:08:55John Coogan?

  There's all this, there's all this boom.

• 1:08:57Jordi Hays?

  Technically mobile because you can put it on your back.

• 1:08:58John Coogan?

  There's all this boom about humanoid robots. I was posting about this on May the 4th, my birthday. Star Wars Day, may the 4th be with you. May the 4th, I was saying we should make R2-D2.

• 1:09:10Jordi Hays?

  Birthday on the show, everybody's gonna be like, what the heck? You didn't.

• 1:09:13John Coogan?

  Yeah, you didn't.

• 1:09:14Jordi Hays?

  For your birthday.

• 1:09:15John Coogan?

  We did, we did. We talked about it on Friday and Thursday.

• 1:09:17Jordi Hays?

  Right, right, right. But not the exact date. Some people were kind of left hanging.

• 1:09:20John Coogan?

  But, but making a, uh, making an R2-D2 seems trivial at this point, right? It's like a bunch of car batteries. The battery technology is definitely there. The LLMs are there. You throw a Starlink on that thing. Or a bunch of cell signals, like a bunch of cell phones in there. You're gonna have great connectivity. It's gonna be able to follow you around. The wheels exist, like all the tech is there to build R2-D2. That would be a great product for Apple. Just $10,000 and it just follows you around and tells you the weather. And it's like, oh, you want me to play this? You want me to play you too? I, I still don't have a good AI, but I don't know, something like that would be, would be fun and different. I'd be into it.

• 1:10:00Jordi Hays?

  R2D2.

• 1:10:01John Coogan?

  R2D2.

• 1:10:02Jordi Hays?

  Put it on the roadmap.

• 1:10:02John Coogan?

  Anyway, I hope that.

• 1:10:04Jordi Hays?

  Next time we can get, you know, press passes to an, to an Apple event, we'll.

• 1:10:09John Coogan?

  We'll stay at a wander.

• 1:10:10Jordi Hays?

  Pull Tim aside and we'll, and we'll say, hey, look, R2D2, make it happen.

• 1:10:13John Coogan?

  Yeah, for sure.

• 1:10:14Jordi Hays?

  We got the fortress balance.

• 1:10:15John Coogan?

  If we go to NBC, we'll be staying in Cupertino and we'll be in a wander.

• 1:10:19Jordi Hays?

  That's right.

• 1:10:19John Coogan?

  We'll be finding our happy place.

• 1:10:21Jordi Hays?

  Find your happy place. Find your happy place.

• 1:10:25John Coogan?

  Book of wander.

• 1:10:25Jordi Hays?

  Wander's just on a tear. It's actually insane.

• 1:10:27John Coogan?

  It is.

• 1:10:28Jordi Hays?

  Every single day.

• 1:10:29John Coogan?

  They're in the conversation.

• 1:10:31Jordi Hays?

  They're greatest of all time, you mean?

• 1:10:32John Coogan?

  Yes.

• 1:10:33Jordi Hays?

  Back conversation.

• 1:10:33John Coogan?

  Yes. Book of wander with inspiring views, hotel-grade amenities, dreamy beds, top-tier cleaning, and 24/7 concierge service. It's a vacation home, but better. Anyway, you were telling me about this, the, the, the bringing Hollywood back to America, this whole thing. John Voight has a plan, which is, isn't John Voight, uh, Angelina Jolie's dad?

• 1:10:54Jordi Hays?

  That's right. Really?

• 1:10:55John Coogan?

  Yep.

• 1:10:55Jordi Hays?

  I have no idea, cause I've never seen any movies.

• 1:10:57John Coogan?

  You haven't. So actor John Voight presented his plan to boost US jobs in the entertainment industry to President Donald Trump over the weekend, laying out a proposal that included federal incentives for US theater owners to upgrade their facilities. Let's go. Universal basic.

• 1:11:15Jordi Hays?

  Is that gonna fix the issues? I mean, judging by the commentary that I hear from people in Hollywood.

• 1:11:22John Coogan?

  Yeah.

• 1:11:23Jordi Hays?

  The issues are around how much regulation there is.

• 1:11:26John Coogan?

  Yeah.

• 1:11:27Jordi Hays?

  And the costs associated with said regulation.

• 1:11:30John Coogan?

  Yeah.

• 1:11:31Jordi Hays?

  In making movies in Southern California.

• 1:11:33John Coogan?

  Yeah.

• 1:11:33Jordi Hays?

  And revitalizing theaters and making the bathrooms.

• 1:11:35John Coogan?

  And the lack of technology podcasts in Hollywood. It's nowhere near enough.

• 1:11:39Jordi Hays?

  That's another, that's another short.

• 1:11:41John Coogan?

  That's why it's falling apart.

• 1:11:42Jordi Hays?

  No, but, but the idea that, uh, I'll, I'll give them a chance to kind of get into this, but the idea that just fixing the bathrooms and old theaters is not necessarily going to revitalize, you know? The domestic entertainment industry.

• 1:11:57John Coogan?

  Yeah, it's a tough model when you have.

• 1:11:59Jordi Hays?

  But nice bathroom. I like nice bathrooms.

• 1:12:00John Coogan?

  I mean, you think about, you think about when Hollywood was in its heyday and like you didn't have all like, you couldn't watch anything in HD. Like you had a TV with three channels on it and it was 12 inches.

• 1:12:13Jordi Hays?

  Yeah.

• 1:12:13John Coogan?

  And it's like crackly. If you wanted to see something actually big and beautiful with good sound, like you had to go to the theater. Now you can just buy a home theater with a projector for two grand. And you can also just scroll YouTube and Tik Tok and streaming in your phone all day. And there's unlimited content. It's impossible to keep up with it. And so the excuses to go to the, to the movie theater are getting less and less. You really gotta have a federal incentive for taking your boys out to the movies. Guys, guys movie night really will be the thing that will, will be the thing that brings Hollywood back for sure.

• 1:12:50Jordi Hays?

  Yeah. You've been leading the charge here.

• 1:12:51John Coogan?

  I have, I have. Highly recommend it. Just text everyone who's at, who's in your town. Get, get 20 tickets on Fandango that you can always refund, refund the ones if people don't show up. Send out the text message to everyone. Hey, we're going to this Jason Statham movie next Friday. Are you in? Are you out?

• 1:13:08Jordi Hays?

  Be there.

• 1:13:08John Coogan?

  Be there. And then just, you know, Venmo everyone at the end and you're all good. Have a fun time. But other than that, if it's not like an event, it's really hard to justify going.

• 1:13:18Jordi Hays?

  Totally.

• 1:13:19John Coogan?

  Anyway, this is, John Voight was, was appointed a special ambassador to Hollywood by Trump in January.

• 1:13:25Jordi Hays?

  That's showbiz.

• 1:13:26John Coogan?

  I feel like these special ambassadorships are just like up for grabs. Like, could we become special ambassadors to technology podcasts? We really should be like.

• 1:13:35Jordi Hays?

  Yeah, we can make it happen. So Voight was appointed in January and he's detailed the plan along with his manager, Stephen Paul and Scott Carroll, the president of, the president of Paul's company to Trump at Mar-a-Lago. The proposals include changes to the tax code to encourage investment in US films and job training initiatives. According to Carroll, the incentives for cinemas, if approved, could help buoy theater chains such as AMC Entertainment Holdings, Cinemark Holdings and Marcus Corp that have struggled since the pandemic with films being released online sooner than in the past. They're basically saying, we're going to bail out the theaters which have been struggling because of something that we're not addressing. Like

• 1:14:20John Coogan?

  Oh, just like competition.

• 1:14:21Jordi Hays?

  Films are being released online sooner. People want to are happy to just watch them at home. Everybody has a massive HDTV.

• 1:14:28John Coogan?

  Yep.

• 1:14:28Jordi Hays?

  And there's just and I would argue that films are just not have, you know, often, often, you know, the last few years, films have been good enough to warrant going to a theater when you could just.

• 1:14:41John Coogan?

  You want to bring back film to America? Here's an idea. Give Jason Carman $300 million to remake The Terminator starring Sam Sulek.

• 1:14:50Jordi Hays?

  Today, today.

• 1:14:51John Coogan?

  If you, if you do that, it will generate $5 billion in ticket sales.

• 1:14:56Jordi Hays?

  I think that's very possible.

• 1:14:57John Coogan?

  It's entirely possible.

• 1:14:58Jordi Hays?

  So anyways, filmmakers who co-produce pictures with foreign companies would be allowed to obtain credits for their US spending for quote unquote, bad actors who take all of their production overseas. There would be a tariff that equated with the incentives they were getting from the foreign countries, Carol said in an interview.

• 1:15:14John Coogan?

  Here's another idea.

• 1:15:15Jordi Hays?

  Trade war in Hollywood. The president loves the entertainment business and this country, and he will make, help us make Hollywood great again.

• 1:15:22John Coogan?

  Yes. Okay. I recently watched Almost Famous. I'm trying to learn about journalism. Almost Famous is a story about a young boy who goes on the road to write a profile about an up and coming rock band for Rolling Stone. And it's a Bill Dung'serman. It's a coming of age tale. So he, he learns and he, he grows and he experiences all the vicissitudes of life on the road with this, with this rock band learns, you know, the good and the bad and writes this fantastic profile. Eventually gets them on the cover. Spoiler alert. I think we need a Almost Famous style movie about Ashley Vance going on the road to write the first big profile of Elon Musk, becoming a man, becoming, you know, a real, real tale of his journey on the road.

• 1:16:06Jordi Hays?

  A true, an elite journo.

• 1:16:09John Coogan?

  Yeah. A Bill Dung'serman.

• 1:16:10Jordi Hays?

  Yeah.

• 1:16:10John Coogan?

  A coming of age tale about Ashley Vance doing technology journalism. This is the next thing. After we've, we've made some movies about tech.

• 1:16:16Jordi Hays?

  Time lines have been begging for it.

• 1:16:17John Coogan?

  We haven't made enough movies about technology journalism.

• 1:16:19Jordi Hays?

  Yep.

• 1:16:20John Coogan?

  This could be big. This could be very, very big. Movie.

• 1:16:23Jordi Hays?

  Executive produced by Julia Black.

• 1:16:25John Coogan?

  Yes. Get her in. And, but mainly it needs to be the story of Ashley Vance.

• 1:16:31Jordi Hays?

  Yeah.

• 1:16:32John Coogan?

  Telling the story of Elon Musk. Elon Musk is the-

• 1:16:35Jordi Hays?

  Ashley Vance.

• 1:16:36John Coogan?

  Exactly.

• 1:16:36Jordi Hays?

  Yeah.

• 1:16:37John Coogan?

  Exactly.

• 1:16:38Jordi Hays?

  Trump posted on social media Sunday evening that he would impose 100% tariffs on all films produced overseas. The comments sent shares of US entertainment companies tumbling on Monday as investors tried to discern what types of films- Because the issue is it's the US entertainment companies that have been paying to produce films overseas. As investors tried to discern what types of films would be subject to tariffs and how the levers would affect the profitability of producers. In a press briefing on Monday, Trump said he planned to meet with entertainment industry executives to discuss his plan. "I want to make sure they're happy with it because we're all about jobs," the president said. California Senator Ben Allen said he would- he was given a heads up about Voight's

• 1:17:23Jordi Hays?

  plan last week. He said he would support a tariff but it should be crafted to encourage US productions, not harm foreign films. "I understand why the president was moved to want to take some drastic action," Allen said. "We have been facing so much damage as a result of other jurisdictions throwing all sorts of incentives at productions to pull movie production that really ought to be happening here in the United States and that ought to be happening in LA." And again, you know, what I hear is just the dynamic, the logistical complexity of producing a film in LA. Why are you laughing?

• 1:17:57John Coogan?

  Because I have another idea to save Hollywood. Michael Bay directing The Ramp movie. The Ramp movie.

• 1:18:04Jordi Hays?

  The Ramp movie.

• 1:18:04John Coogan?

  So it's like the evil-

• 1:18:06Jordi Hays?

  Switch your business to ramp.com.

• 1:18:07John Coogan?

  Yes, yes. The evil receipt personified like Transformers.

• 1:18:10Jordi Hays?

  Yeah.

• 1:18:11John Coogan?

  The corporate receipt malaise has fallen upon the American economy and only Eric Lyman, played by Vin Diesel, can revive the American economy by bringing- by streamlining your corporate cards.

• 1:18:25Jordi Hays?

  Godzilla-sized receipt.

• 1:18:27John Coogan?

  Yes.

• 1:18:27Jordi Hays?

  Stampeding down the 405.

• 1:18:29John Coogan?

  Maybe we go Chris Hemsworth for Eric and Vin Diesel can play Kareem.

• 1:18:32Jordi Hays?

  Yeah.

• 1:18:32John Coogan?

  I think that's a good pairing.

• 1:18:34Jordi Hays?

  That's right.

• 1:18:35John Coogan?

  We need some AI-generated movies to like kind of really sell this to Hollywood, but we'll get Michael Bay in there. It'll be high stakes. It'll make the-

• 1:18:42Jordi Hays?

  It's time to tap in, Bay.

• 1:18:43John Coogan?

  Yeah. It'll- yeah, it'll make- it'll make the social network look like a snooze fest.

• 1:18:48Jordi Hays?

  Yeah.

• 1:18:48John Coogan?

  It's gonna be great.

• 1:18:49Jordi Hays?

  Okay, you're on to something, John. Anyways, we should have somebody on that actively has tried to make movies in LA.

• 1:18:58John Coogan?

  Yeah.

• 1:18:58Jordi Hays?

  Over the last few years.

• 1:18:59John Coogan?

  We should have Michael Bay on. I heard he's making a really cool movie. I don't know if it's public yet, but it seems, sounds awesome.

• 1:19:04Jordi Hays?

  Well, he's been making movies for a while, so I'm sure you're not leaking anything too significant. But yeah, we should have him on. I'm very interested to hear the actual updated details on why, if you're an American film producer, you decide we're gonna go to Portugal, or we're gonna go to London, or wherever to actually make this, just because the costs to do it locally are so high. So I think that the local politicians, you know, state, county level, need to take some responsibility as well, because I don't think you can just say, oh, federal government, you know, it's time to step in and, and, you know, make movies a part of the trade war. Yeah.

• 1:19:41John Coogan?

  It was almost more important. We saw that with like LA versus Atlanta. Like, it's like, kind of a domestic issue almost. I mean, Toronto's in there, but Toronto is not, this is not like some like massive global geopolitical conflict.

• 1:19:52Jordi Hays?

  A lot of the people I know in entertainment have been spending a ton of time in Atlanta, like for years now.

• 1:19:58John Coogan?

  Really?

• 1:19:59Jordi Hays?

  Yeah.

• 1:19:59John Coogan?

  Just generally, right?

• 1:20:00Jordi Hays?

  Yeah, I'm not, I'm not even, I'm not joking. I'm not joking. I'm like, if you're actually working to produce.

• 1:20:04John Coogan?

  It's a big thing. You see it at the end of movies. It's like the peach and it's like made in Atlanta because they, they, like, the folks in Atlanta were just like, let's build that business here.

• 1:20:12Jordi Hays?

  Yeah.

• 1:20:13John Coogan?

  And so they gave a bunch of incentives. Baby Driver was filmed there. There's a bunch of movies. Yeah, I mean, it's economic war on like the state level, which is interesting, which is like, totally fine. That's the way the states are supposed to work. It's just like Hollywood was mismanaged and just like played the game wrong, basically. And it was like, oh, we're so cool and powerful and Lindy, like, we'll never lose this, so we don't need to play the game of tax incentives, when in fact, like, no, no, they did. People would just leave. Like, they didn't really have the loyalty that clearly the Hollywood policymakers and lawmakers like thought that they would.

• 1:20:47Jordi Hays?

  Yeah.

• 1:20:47John Coogan?

  Very rough. And yeah, yeah, rough for, you know, I think it was Rob Lowe who was talking about it, how he's always, he always has to go to like Toronto and he doesn't like it because he's away from his family.

• 1:20:56Jordi Hays?

  Yeah, Toronto's the other one.

• 1:20:57John Coogan?

  Probably away from his bed, probably away from his eight sleep. Go to eightsleep.com. What's new in Pod 4 Ultra? Well, Pod 4 Ultra has all the signature features you love about the pod, plus new groundbreaking updates. They got a five-year warranty, 30-night risk-free trial, free returns and free shipping.

• 1:21:14Jordi Hays?

  We are incredibly back.

• 1:21:16John Coogan?

  Oh, yeah. I wonder how I did. I feel like I slept a ton last night. I'm feeling good. Finally back in it from the previous weekend and travel and whatnot. Let's see. Tuesday, I got a 93. How'd you do?

• 1:21:30Jordi Hays?

  87.

• 1:21:31John Coogan?

  87. Smoked you. Wait, is that two nights in a row? You said it was impossible. You said it couldn't be done.

• 1:21:36Jordi Hays?

  Okay. To be clear, a little asterix for the sleep record.

• 1:21:41John Coogan?

  I'm sick.

• 1:21:42Jordi Hays?

  I did have food poisoning on Sunday.

• 1:21:44John Coogan?

  Oh, skill issue.

• 1:21:46Jordi Hays?

  And.

• 1:21:48John Coogan?

  What happened? I, yeah, I'm good. I'm moving through this. I'm gonna be, I'm gonna be rock solid this week, except going to SF tomorrow, but I think I'll be, I'll be on my eighth sleep every night, which is good. Cool.

• 1:22:01Jordi Hays?

  Awesome. I don't, I don't know if we have time for this next story.

• 1:22:04John Coogan?

  We do have time for an ad quick ad.

• 1:22:06Jordi Hays?

  Of course.

• 1:22:06John Coogan?

  Out-of-home advertising made easy and measurable.

• 1:22:08Jordi Hays?

  Say goodbye to the headaches of out-of-home advertising. Only AdQuick combines technology, out-of-home expertise and data to enable efficient, seamless ad buying across the globe.

• 1:22:16John Coogan?

  Out of adquick.com. Size gong.

• 1:22:21Jordi Hays?

  One of our best yet.

• 1:22:23John Coogan?

  That is the best. We definitely gotta talk about code two.

• 1:22:27Jordi Hays?

  AdQuick is coming out with an AI product. And we were in a cameo in the video.

• 1:22:33John Coogan?

  Can't wait.

• 1:22:34Jordi Hays?

  They're launching AdQuick Copilot.

• 1:22:36John Coogan?

  Yeah, very cool.

• 1:22:37Jordi Hays?

  To help you more efficiently buy ads out of home.

• 1:22:40John Coogan?

  Yeah. I mean, there was a lot of stuff with AdQuick, like if you actually go through the process, like they will, they will pull up the map, they'll pull up all their tools, they'll provide like kind of an idea and, and report, and there's no reason why that shouldn't be a little bit more self-serve. Even if you do wind up, you know, working with an AdQuick representative directly, there's no reason why you shouldn't be able to just like investigate their whole database via an LLM. Like, it's very obvious. Anyway, let's do one or two posts and then we'll bring in our first guest. We have a great one. Evan McCann says, with so many people going no alcohol, there is a lot of alpha in drinking again. You love it.

• 1:23:17Jordi Hays?

  I thought this was hilarious. I saw it earlier and I laughed.

• 1:23:20John Coogan?

  Contrarian.

• 1:23:20Jordi Hays?

  Contrarian. Yeah, it seems like alcohol fell off, but at the same time, it's just so Lindy. There's an opportunity to bond with other people that love alcohol.

• 1:23:31John Coogan?

  Yeah.

• 1:23:31Jordi Hays?

  So, uh, it's just, it, it used to be so common to drink alcohol that you wouldn't have a meeting and somebody else says, you want to have a drink? And you say yes. And it's like, oh, we now have some common ground.

• 1:23:43John Coogan?

  We gotta send this to Andrew Huberman. He's gonna be.

• 1:23:46Jordi Hays?

  Can find some common ground.

• 1:23:47John Coogan?

  Furious.

• 1:23:49Jordi Hays?

  Uh, no, it's funny. I, I've just gotten to a point where I, I stopped enjoying alcohol. You know, I went from drinking maybe, you know, having a drink one day a week on average to realize to, to going down to probably.

• 1:24:04John Coogan?

  One bottle of Dom every time you double.

• 1:24:07Jordi Hays?

  That's right. That, that, most of the drinks I've had this year were, were on the show.

• 1:24:11John Coogan?

  Yeah. It needs to be tied to celebrations because then you just start grinding harder and harder and harder for.

• 1:24:15Jordi Hays?

  Yeah, but I think the alcohol decision, like you shouldn't let the timeline decide whether or not you like drinking alcohol. Because some people can have a few drinks and their body can process it and handle it well. For me, I. It's not for me. And that's okay.

• 1:24:31John Coogan?

  Yeah.

• 1:24:31Jordi Hays?

  They're drinking. Yeah, the Balmer peak.

• 1:24:33John Coogan?

  I've been, I, yeah, I've been very pro alcohol as a new performance enhancing drug for sales reps.

• 1:24:40Jordi Hays?

  Yeah, the power lunch methodology.

• 1:24:41John Coogan?

  Lunch. You gotta loosen up.

• 1:24:44Jordi Hays?

  Yeah.

• 1:24:45John Coogan?

  Have a couple of martinis with a client.

• 1:24:47Jordi Hays?

  Yep.

• 1:24:47John Coogan?

  Ink a deal.

• 1:24:48Jordi Hays?

  Ink a deal.

• 1:24:49John Coogan?

  This is how business used to be done. It's coming back.

• 1:24:51Jordi Hays?

  Yep.

• 1:24:52John Coogan?

  Coming back.

• 1:24:53Jordi Hays?

  Coming back.

• 1:24:54John Coogan?

  Anyway, Corey Levy was over at, uh, Y Combinator. Game respects game. Very, very funny picture. He of course runs Z Fellows, direct competitor to Y Combinator in many ways. Corey's running around the valley, signing deals before companies get to Y C sometimes.

• 1:25:11Jordi Hays?

  Yeah, but I'm sure Corey's generally excited when companies he backs.

• 1:25:16John Coogan?

  Totally.

• 1:25:16Jordi Hays?

  End up joining Y C.

• 1:25:18John Coogan?

  Yeah, this is one of those things where, you know, they are like, they are competitors, but the nature of competitions that sometimes, like when you see two competitors take a picture together, do some sort of collab, it's like they either hate each other or they love each other. You know, I feel like, I feel like a lot of people experience this where like,

• 1:25:36Jordi Hays?

  Yeah.

• 1:25:37John Coogan?

  You could be like competitors, but if you guy, if you understand your business at a deeper level than everyone else on the outside, you can wind up having like a beautiful partnership and friendship with someone who is ostensibly a rival because you actually see the world in a more nuanced way than someone just on the outside being like, oh, you guys are just capital and you guys just invest. Like they actually probably view their businesses very, very differently and as very complimentary.

• 1:26:03Jordi Hays?

  Totally. Yeah. I think Z fellows had an interesting wedge and it's just consistently found great founders. Oftentimes I think even before they have an idea, which is not the same model as YC, even though YC will, will in small instances.

• 1:26:18John Coogan?

  Yeah. Even though they are somewhat like in the same world.

• 1:26:21Jordi Hays?

  The way I would say it is the Z fellows of Z fellows is Z fellows and the YC of YC is YC.

• 1:26:26John Coogan?

  Yes, yes, yes.

• 1:26:27Jordi Hays?

  And those things can, you know, overlap.

• 1:26:28John Coogan?

  Totally. With an X.

• 1:26:29Jordi Hays?

  Yeah.

• 1:26:30John Coogan?

  X, Y, Z.

• 1:26:31Jordi Hays?

  X, Y, Z. Well, we have our guests ready in the waiting room.

• 1:26:34John Coogan?

  Let's bring them in.

• 1:26:35Jordi Hays?

  They're both in the waiting room. So you think it's.

• 1:26:38John Coogan?

  I wanted to bring in Kelvin first. I will text Santi and tell him to give us 15 minutes. We'll go back to back. I think that's probably what's best. Let me text them and let's bring Kelvin in. And, oh FYI Kelvin is with FAI. We are going to do Kelvin first, then, then Santi. Santi at 12. Cool. We are good for that. Let's bring in Kelvin whenever he gets

• 1:27:20John Coogan?

  a chance and let's update his lower third. The Chyron is ever evolving. All part of our mission to bring media to Hollywood.

• 1:27:31John Coogan?

  I like that stinger. That's very Michael Bay. It's not, there's something about the Ashton Hall one that just hits so much harder.

• 1:27:40John Coogan?

  Yeah, it's just so much better.

• 1:27:41Jordi Hays?

  So much better.

• 1:27:42John Coogan?

  It's so much better. It's night and day. It's night and day. Anyway.

• 1:27:45Jordi Hays?

  If you have any sound effects you want us to add to the soundboard, reach out to Ben.

• 1:27:50John Coogan?

  Yes.

• 1:27:50Jordi Hays?

  He's a soundboard maestro.

• 1:27:53John Coogan?

  Yeah, we really got to get on, you know, TikTok, Instagram, whatever, wherever these sound effects are coming from, we need to bring them into the show because the soundboard has been a delightful upgrade. And we have our first guest of the show. Welcome to the stream, Kelvin. How you doing?

• 1:28:07Jordi Hays?

  Boom.

• 1:28:08Speaker 02

  Gentlemen, good to see you guys.

• 1:28:10Jordi Hays?

  What's going on? Great to have you.

• 1:28:12John Coogan?

  Yeah, oh yeah. We're big fans of the soundboard. Expect the unexpected during this interview. Probably be the loudest, most interruption-riddled podcast you ever do. But it's fun. Can you, anyway, can you give us a little bit of a backstory on you and specifically the announcement today, some of the, some of the work you've published and kind of just give us the high level overview?

• 1:28:37Speaker 02

  Hundred percent. Kelvin, kind of prototypical Silicon Valley tech bro. Dropped out of Princeton, moved out to the Bay Area, was a founding engineer at two companies. And then a few years ago, just started reading about industrial policy and the history of technological progress in the States and recognized that we were in the moment of intense tech industrial decline and that this was in large part facilitated by bad policy choices. And so in the move into DC, got to meet people like Santi and we released this playbook after six months of long, hard work. And it's a recognition of the fact that tech industrial decline is a policy choice and that we are in a moment where with the rise of China, with

• 1:29:21Speaker 02

  the stagnating industrial base, there are intense changes that need to be made to the existing system. And these, this playbook has 27 very concrete ideas for how to change things across the industrial base, across the national security apparatus, and in the ways the government funds frontier innovation.

• 1:29:40John Coogan?

  Cool. I want to go into the playbook, but first, give us a lay of the land, FAI, IFP, what are these organizations? What are their goals? How are they funded? They're nonprofits? Can you break all of that down and then we'll go into the actual playbook?

• 1:29:53Speaker 02

  A percent. So there's four institutions involved in this project, FAI, IFP, American Compass, and NIA. A lot of acronyms here. So FAI is the Foundation for American Innovation, the center-right tech policy think tank focused on tech policy, emerging technologies, industrial policy. IFP is a nonpartisan think tank focused on a lot of similar topics, also around, particularly around metasience and energy as well. And then American Compass is more of a new right economic think tank. They do a lot of other stuff beyond just industrial policies, family policy, workforce policy, et cetera. And then NIA is the New American Industrial

• 1:30:37Speaker 02

  Alliance, focused on a new trade group started by a bunch of really sharp builders focused on bringing the best of Silicon Valley industrialists to Washington DC. So this project is kind of a merger of all these different circles of the new conservative folks, all the way to your Silicon Valley builders.

• 1:30:57John Coogan?

  Got it. So we talked to Catherine Boyle yesterday about American dynamism broadly. We've talked to Chris Power about Hadron and building manufacturing in the United States, Anduril, and some of these themes. But what are some of the more concrete steps that you're advocating for on the road to re-industrialization, techno-industrialization? What does that actually mean?

• 1:31:20Speaker 02

  Yeah, so this was born out of a kind of growing bipartisan consensus over the past two administrations that something like, some things deep need to change. And the Biden administration really took a pillar approach where they looked at things like chips, energy, manufacturing, and passed really large-scale subsidy programs that were, had been unseen in generations. And the Trump administration has recognized that there's all these systemic barriers to industrialization beyond just subsidies, things like trade policy, non-trade barriers. And so where we wanted to fit into the conversation is there is recognizing that there is

• 1:32:03Speaker 02

  in all these different critical industries, whether it's critical minerals or hypersonic missiles, all the way to biotech manufacturing. There are unique industry nuances that prevent more things being built faster and cheaper. And so the goal with this playbook was to really channel this newfound energy both sides of the aisle in advancing these issues and elevate folks who could write up very specific policy proposals along these lines to advance specific areas. So the way we categorize the playbook is we have a three-section industrial power, national security, and frontier innovation.

• 1:32:43Speaker 02

  And we have senior domain experts write on each individual piece of this of this pie with proposals spanning from developing hypersonics testing infrastructure to demand-side support for critical minerals production to how does the Navy improve its ship streamline its design of ships. There's all these really wonky things that this playbook gets into in each of these specific categories.

• 1:33:08John Coogan?

  Yeah, do you have a like a overarching theory around

• 1:33:16John Coogan?

  tariff policy versus subsidization of American industrialization versus kind of the Doge stuff, which is like do more with less efficiency driven. These three pillars seem very different, very they're typically advocated by very different political groups. We're kind of seeing all three happen right now. Do you think that all three of those are equal tools in the tool chest? Or are you advocating for leaning one way or the other?

• 1:33:46Speaker 02

  Yeah, this is what we're most proud of for this playbook is that it is a synthesis of all these ideas. And it's a recognition that for all these deeply, deeply important questions, you just need an all of the above approach. There is no one silver bullet. The things that are required to restore American shipbuilding are going to be slightly different than things required to do a more broad-based reindustrialization movement. But it's a recognition that for all these different topics, there's all these things from regulatory fixes to state capacity fixes, subsidies, that are all critically important.

• 1:34:24John Coogan?

  On shipbuilding, can you like give us a concrete example of what the playbook looks like? Because I feel like shipbuilding is pretty, you can kind of wrap your hands around it like it's a pretty, pretty simple thing to understand. We make a certain amount of ships. We want to make more. But what are all the steps that lead to actually increasing shipbuilding capacity?

• 1:34:46Speaker 02

  Yeah, so shipbuilding in America is in a dire need of a fix. We produce, China produces 230 times more ship tonnes than the United States. This is due to a lot of factors, everything from constantly changing requirements from the Navy to a lack of workforce, to a lack of automation, north of yards compared to other countries. And so the particular proposal that Brian Potter and Austin Bernard vote for our playbook was around streamlining the way the Navy actually designs its requirements for ships and the way that Navy actually goes about planning the design of of certain naval vessels. And it gets pretty into the weeds on those topics.

• 1:35:28Speaker 02

  And really, this is, you know, this is not a comprehensive plan to restore American shipbuilding, but more of a, of a specific deep dive into one particular underrated aspect of the problem that policymakers may not realize. And so there's a great bill out there called the Ship Santi, which gets into a bit more of a broad-based plan. And so the goal with this particular proposal was how do we complement the existing discourse with things that are more, a bit more of the weeds that people aren't paying attention to.

• 1:35:57Jordi Hays?

  Can you talk about some historical precedent where America was maybe behind in certain areas and managed to turn it around? Like, basically, like, obviously, you lay out a bunch of very kind of proactive solutions for a variety of these issues, but I think it would be helpful to understand at what points throughout history, maybe we recognized that big, big changes were needed from an industrial policy standpoint, and we actually effectively made those changes?

• 1:36:30Speaker 02

  Yeah, the Cold War is the best example of this, right? You had a space race where the US public and our intelligence agencies were shocked when Russia had launched Sputnik. It was really a, it's really hard to just fully articulate how deep this shocked the American psyche and how fast we got our shit together. In a matter of less than a decade, we directed 400,000 people, 20,000 companies, and 4.4% of the overall federal budget towards the Apollo missions. And we went from being laggards in engine technology, missile technology, space technology, to getting to the moon first.

• 1:37:12Jordi Hays?

  Is that part of the challenge, though, now? Is that we don't have sort of a stunning visual of industrial decline? It's sort of this sort of slower, insidious sort of process that's been happening that we feel in different ways, but it doesn't strike, you know, fear into the hearts of Americans in the way that Sputnik did?

• 1:37:35Speaker 02

  That's 100% a challenge. You know, there's some people who don't believe America will really get serious until there's a Taiwan scenario. But, you know, there's, there have been instances of, there's been flashpoints over the past few years, Ukraine, COVID, October 7th, where people have realized, actually, like, the lack of a robust defense supply chain, the lack of the ability to make basic things like medical masks are problems that affect us today. And so that's where the work you guys are doing is so important. That's where the work of these three think tanks and other folks like Catherine Boyle, the whole American Dynamism movement, the more, the more we talk about these things, the more, the more I think people will recognize the seriousness at which we need to, we need to take these issues.

• 1:38:19John Coogan?

  Did you ever explore the idea of, I don't know exactly how this would like get implemented, but some sort of incentive for American investors to focus on reindustrialization? We were kicking around this idea of like, the carried interest tax was kind of up in the air, maybe that would hurt private equity firms and venture capital firms. But what if carried interest, that deduction didn't exist for investing outside of America? But if you invest in America, all of a sudden you get a much more favorable tax treatment, something along those lines? Or even just anything like, we've seen the American Dynamism Movement take hold in the venture community, but we haven't heard nearly as much on the private equity side.

• 1:39:02John Coogan?

  It seems like the private equity firms are still just kind of dollars and cents maxing. But what, do you think there's any moves that could kind of lead to more just decentralized American capital driving reindustrialization?

• 1:39:18Speaker 02

  No, that's such a fantastic question. There are so many levers, it'll take a long time to go through all of them. But Julius Klein of American Fairs wrote a great piece for us on that very question of how do you get large-scale capital institutions to invest in industrial finance? There's also, you know, Sam Hanna wrote a piece on utilizing the SBA's authorities to incentivize investing in small, medium-sized manufacturers. You know, one of the greatest strengths of America is that we have the world's strongest entrepreneurial base. We have folks like Jeff Bezos, Elon Musk, and we also have a state that is capable of doing a lot of things, right?

• 1:40:01Speaker 02

  Tesla being a great, Tesla and SpaceX being the prime examples of what can happen when you combine effective industrial policy, effective tools of statecraft with amazing entrepreneurs who are building the future.

• 1:40:14John Coogan?

  Yeah, interesting. I had some sort of, do you have any follow ups?

• 1:40:17Jordi Hays?

  Yeah, I'm curious, as you guys were putting this together, what kind of announcements or policies maybe sort of shifted your priorities? Because over the last, call it six weeks, there's been a lot of announcements. You know, on Sunday, we had 100% tariffs on-

• 1:40:34John Coogan?

  The 3D chessboard has been flipped.

• 1:40:36Jordi Hays?

  Yeah, we're just flipping the board constantly. But no, I'm curious, was there anything that you were, you know, wanting to, to, to write about or include in here, but you felt like already had enough momentum or, or kind of coverage from existing policies?

• 1:40:51Speaker 02

  Yeah, to give the Trump administration credit, like, we, we had, we had a few things written up around defense procurement reform, energy reform, where they put out some BOs and we were like, oh, man, we gotta, we'd add some more things. It's a, it's been a very fast-moving administration. But, uh, you know, with, you brought up liberation day, like, the way that we view tariffs and like every, every, each of these four thinking partners have their own opinions, but we're all in agreement that tariffs alone are not enough, right? These are, it's a, it's a stick, but if you actually want to be serious about doing the very specific things like critical metal production or shipbuilding or whatever, there's a whole host of unique tools you need to apply to that particular problem. So that's really what this playbook is trying to provide.

• 1:41:36John Coogan?

  Are there any lessons that you think America can learn from how China does industrial policy? We've seen, you know, what, 50 years of investing in semiconductors over in China in the midst of never really being on the leading edge there, but now-

• 1:41:54Jordi Hays?

  Yeah, or even around planning, right? So they plan in these sort of five-year cycles, right? You know, let's make a five-year plan and another five-year plan and they just sort of compound on top of each other.

• 1:42:03John Coogan?

  I know, I know we're adversaries, but like, what can America learn from China on the industrial policy front?

• 1:42:10Speaker 02

  Yeah, it's a fantastic question. And I mean, to your point, there's been a lot of waste over there. Right. You have all these state backed private equity firms that kind of are just black holes for for capital. You've got, I mean, they use a bunch of slave labor, which helps drive down industrial costs. Yeah, it's a, yeah, they do a lot of things that are really effective, like, you know, I think a lot of narratives around, oh, China is just a copycat or China is just like using like, like using distill models to to to produce beef seek. It's a it's a lot of cope. I mean, you know, they're leading in electric vehicles. BYD is an absolute beast, drones, critical minerals, like these are, these are real advantages.

• 1:42:49Speaker 02

  And the number one thing I think is just we should be taking things as seriously as they are, like Chinese leaders routinely come out, not just Xi Jinping and the top level CCP brass, but even like the CIA equivalent in China and their like internal think tanks. They're constantly producing essays and and giving speeches on how the foundation for world power is industrial power and technological power. They view this as they view the lack of technology as the reason they suffered the essential humiliation. And so they are deeply serious and throwing their entire state behind developing the the future of all these different emerging technologies.

• 1:43:32Speaker 02

  So, you know, the the thing that we can learn is just the degree of seriousness by which the political class is is taking.

• 1:43:38John Coogan?

  That's a really good answer. Yeah, thank you. Yeah, well, we'll move on and we'll let you get back to your day, but thank you so much for hopping on. This is really interesting.

• 1:43:45Jordi Hays?

  Yeah, I'm excited to fully read the report myself and yeah, looking forward to it. Let's have you back on in the near future.

• 1:43:52John Coogan?

  Yeah, yeah, we'll talk to you soon. Thanks so much. And next up, we're continuing our deep dive into the techno industrialist play policy playbook. If you haven't had a chance to go see it, it's all over X today.

• 1:44:06Jordi Hays?

  And it's rebuilding dot tech.

• 1:44:10John Coogan?

  Rebuilding dot tech. What a good.

• 1:44:11Jordi Hays?

  WWW rebuilding dot tech.

• 1:44:14John Coogan?

  Yeah. So Santi Ruiz is joining and he can share the techno industrial industrial policy playbook. Is the United States still the world's leading techno industrial power? The answer is no longer obvious, and that should worry us. Let's bring him in to have him break it down for us. How you doing? Welcome to the

• 1:44:33Jordi Hays?

  Dramatic entrance.

• 1:44:34John Coogan?

  Fantastic entrance.

• 1:44:35Jordi Hays?

  What's going on?

• 1:44:36John Coogan?

  How you doing?

• 1:44:36Speaker 03

  Good. I'm good, guys. Thanks for having me. Longtime listener, first time caller.

• 1:44:40John Coogan?

  Yeah, yeah. Great to have you on here. Yeah, we got a little bit of an overview of how the little what? Think Tank Cinematic Universe came together. The Infinity Stones. Came together. Yeah, the Infinity Stones.

• 1:44:52Jordi Hays?

  The Avengers of Thinking.

• 1:44:53John Coogan?

  Avengers of Thinking. But so let's just jump into it. What, what, what, what, what?

• 1:45:02John Coogan?

  I know that there's a number of policies, but which one do you think is the most relevant today? There's a lot of things in the news around tariffs. TikTok is still in the news, but it's kind of faded. If there's just one takeaway that you want to dive into first, what, where should we go?

• 1:45:18Speaker 03

  Totally. Let me get to that in one second. I just want to say Kelvin did not flog the hard copy of this thing.

• 1:45:24John Coogan?

  We gotta get that.

• 1:45:25Speaker 03

  But it's really, but it's really nice. Like, I'm really happy. I got ahold of it yesterday and I'm like, really feeling my hopes on this. So yeah, we'll, we'll put up, we'll put up the, the dropshipping link soon.

• 1:45:36John Coogan?

  Yeah, we love, we love the printed word. We're big fans of the Wall Street Journal. We love, we love books. We love everything printed.

• 1:45:44Jordi Hays?

  And the playbook should be in print. I mean, it's, it's, you know, it's more deserving.

• 1:45:51John Coogan?

  Just dump it out of a C130 all over Washington Capitol Hill.

• 1:45:58Speaker 03

  Right now, you know, while, while we're talking, a couple of my colleagues are doing hand deliveries to every congressional office. So we're doing, trying to do, trying to do that.

• 1:46:06John Coogan?

  That's great. Yeah. So, so let's go into some of the top topics in the report and what we should be focused on first and foremost.

• 1:46:15Speaker 03

  Totally. So Kelvin pushed on this project and the, and the way he broke it down, which I thought was really useful was basically you've got like your national security recommendations, which are what they sound like. You know, a lot of the defense acquisition stuff, a lot of like making it easier to do hypersonic testing. For instance, the US, like really defense specific stuff. Then there's like a broader, you know, industrial base section called industrial power. That's, you know, critical minerals. It's like small business administration to make it easier for small manufacturers to get going. The chunk that we really own to IFP, and again, for context, I'm at the Institute for Progress. We're a nonprofit, or sorry, a nonpartisan think tank. We focus on like a Largely kind of the innovation policy side of things. So our section was like frontier

• 1:46:57Speaker 03

  science and technology. So we, not all those submissions are by us, but a lot of it, we sourced most of those submissions. And a lot of that stuff is just, how do we get more out of the marginal dollar that goes to R and D in the US, whether that's a federal dollar, R and D through like the NIH or the NSF or the Department of Energy. In a lot of those places, we, we think there's some really actionable stuff where you just want more bang for your buck. Let's say, you know, whether or not, you know, agnostic of whether you should be cutting NIH funding by 30% or whatever, I happen to think you shouldn't, but like agnostic of that conversation, we think there's still a lot of ways that you can get more juice for the squeeze. So a lot of the stuff that we were really championing in that section was, for instance, one of my, one of my favorites is my colleague Caleb

• 1:47:40Speaker 03

  Watney, who's got a piece about X Labs for science funding, got a new, new proposal, the, basically the way the NIH and the NSF and to a certain extent DOE are set up, it's really easy for them to give money to universities and academies and really hard for them to give money to other kinds of institutions, even if those other institutions might be better at the kinds of basic research or the really kind of hardware intensive, high, you know, basically high capex research that you might need for certain manufacturing fields or science and tech fields. There's, Caleb gets into it pretty well, but it's basically existing authority that all of these agencies can use to just start setting up another kind of grant structure. There's no, no statutory text needed, no EO needed, they can go do it right now. And you can basically, you know, whether it's the Ark

• 1:48:25Speaker 03

  Institute, cool biomedical stuff that's frontier where there's some of the best stuff is not happening, just at Johns Hopkins or just at these acad- academic institutions. So that, that's one example. I could go, I could go all day, but like, there's a lot of stuff that we really try to be as actionable as possible. Most of this stuff either needs small statutory tweaks or President or the executive branch can say, let's do it right now. Or it's already kind of firmly in agency authority and it's just culturally or for whatever reason, it's hard for it to get going.

• 1:48:53John Coogan?

  Yeah, we were talking to Delian about this last week, this weird dynamic where arguably the greatest new innovation in science and technology came from OpenAI's nonprofit arm, which is now spinning out this for profit. And everyone's going to make a ton of money off of it. Is the OpenAI, I guess, like what lessons are the, the think tanks on this project? Or even just what you're seeing in Washington? What lessons are they taking away from that experience? Obviously, it's very different than doing basic research, the, on, you know, the, the human brain, for example. But at the same time, you know, they, the, the government didn't really fund the transformer that happened at Google.

• 1:49:37John Coogan?

  They didn't really fund the development of the initial large language model that happened at OpenAI. And yet, like, the research did get done. And so is that coloring how policymakers are thinking about allocating funding towards research and development in kind of the modern era?

• 1:49:53Speaker 03

  I definitely think it is. And I think you've got like a really live debate right now in like, if you want to talk about the meta-science field, right? People who want to do more science on science, figure out how you get the most bang for your buck, basically. I, we, at IP, this is one of our, you know, our five verticals and the five areas that we work on. And you definitely get people across the spectrum, people who think like, I, I've heard people say, you know, like all federal R and D is like down the drain. I don't think that's true. I think there's good evidence that's not, but like you get people in this space who think like you have to overturn the apple cart completely. I think the things that most people agree on is increasingly you're seeing institutions that are not universities being much better at leveraging AI. And I think that's like a pretty, pretty straightforward argument. You're seeing nonprofits set up often by, you know, folks on the West Coast

• 1:50:38Speaker 03

  who want to be able to leverage a lot of cap, they have a lot of capital, they don't have a lot of the other institutional ties, but you can build kind of new institutions and you're not constrained by the tenure or, you know, whatever. And if you can affiliate with, say, a Stanford, then you get the grad student pipeline. And so you still get a lot of the great talent from the academic system. I think you've seen, you know, focused research organizations or FROs where the idea is, hey, we're going to spin up for like five years to tackle one basic research problem. We're going to see if we can just crack this. We're going to be a nonprofit because it's, we're not going to commoditize ever. It's just like, it's too fundamental, but it's either a basic research thing that we think is upstream of some like whole field that other people will be able to tackle, or it's, we're going to build tooling, we're going to build like an open source like map of the brain at a level that hasn't been done before. And we're never going to make any

• 1:51:22Speaker 03

  money on it. So there's no reason to do it as a for-profit company. And we're going to move at a pace that you could never do at the academy. And so we're going to try and like, build the institution to solve the kind of problem instead of starting at your institution and saying, how far can we take this institution? And I think that instinct that like, you want to just solve the specific problems and build an institution that's like built to solve that, rather than try and pick up whatever you have and squeeze it in. I think you're seeing a lot of that in Washington right now.

• 1:51:48John Coogan?

  Can you talk a little bit about the replication crisis? Is that front and center? What, what is the replication crisis in your mind? And, and is there actually a plan to solve it? Is it something we should even be trying to solve?

• 1:52:01Speaker 03

  Yeah, we've got a great recommendation in here from our good friend Stuart Buck, where he basically pushes us to, to get more serious at the federal level, you know, investing replication. I think it's a really plausible idea. It's funny you ask, but my, my first on-campus job over, over the, you know, I think my, my freshman summer was working at a place called the Center for Practical Wisdom, which was like a psych research lab. And about halfway through that job, I kind of realized, it's a great name, but I think I kind of had a come to Jesus moment where I realized this, this research is like, is not going to hold up. Like two years from now, this is going to be poked full of holes. Like, what am I, what am I doing here?

• 1:52:36Jordi Hays?

  Narrator, it was not practical.

• 1:52:38Speaker 03

  It was, it was, you know, I still, I still think you can probably study wisdom, but maybe not with like these small end studies about how people appreciate paintings.

• 1:52:48Speaker 03

  It was really bad. I I tend to think that the replication crisis stuff is more of an issue for the soft sciences, for the social sciences. I think a lot of the hard tech that you really want to push on, you can get a yes or no, and replication is a lot easier. And I also think there's a lot of basically regulations or like encouraging of gating of science that the federal government does. If you loosen that, you can make it easier for people to try and replicate stuff and to basically crush bad science quicker. What you really want is just faster turnaround cycles. Like you're no matter what in a thriving scientific ecosystem, I think you're going to get a lot of kind of crap. You know, the question is like, how quickly does that stuff get flushed out of the pipeline by good replication or by incentives that make it easier? You know, if if if there's a got a bunch of great scientists out there, you're still going to get

• 1:53:31Speaker 03

  random stuff that doesn't replicate, but you just want to kill it early and and have the strong incentives for that killing to happen.

• 1:53:37Jordi Hays?

  Makes sense. How do you think about timelines for all these issues? You know, one of the potential disadvantages of our democratic system is, you know, potential turnover every four years or two years in in leadership. And we we were talking with Kevin about sort of China China's ability to do a bunch of consecutive five-year plans that are kind of building on each other's. So across the board, how how do you make sure that these kind of policy recommendations can really outside of getting, you know, immediate changes implemented have sort of longevity because in in many of these, you know, we're not going to fix shipbuilding in the next three years.

• 1:54:22Jordi Hays?

  We're not going to, you know, set up, you know, it's going to be hard to set up a meaningful amount of special compute zones in a few years, right? So maybe talk to the strategy around for you guys in terms of making sure there's like really these become kind of organic movements in Washington.

• 1:54:43Speaker 03

  Totally. There's a few different pieces. I think one is go on a lot of technology podcasts. You know, that's really essential here. There we go. No, I would say like at the top level, like you just have to sell this to the democratic, to a democratic public. And you know what Kelvin mentioned about like, you don't have the Sputnik case, you know, short of a Taiwan invasion. There's not one single thing that's gonna, you know, wake up the American people to this where they weren't on before. I think you're just gonna have to sell, you know, keep, keep making this argument. I tend to be pretty bullish on, you know, the American people's, you know, perceptiveness about this stuff, but you just do have to go sell. And a lot of the recommendations in here are around shortening timelines for stuff. There's a lot of things I think you can do to just make that kind of change in administration, democratic accountability problem.

• 1:55:26Speaker 03

  Easier by just saying like, for any given thing that you work on, can you make it last, you know, two administrations instead of three? Like, and what are the kind of technocratic things that are standing in the way of that? Like, what are the actual regulatory things that make you take four and a half years to get, you know, your initial need to permit for a, for infrastructure? And I think that's like a, that's like a real issue here, right? On a long enough timeline, anything is going to get vetoed. If you have veto points throughout the process, like the longer the timeline is, doesn't matter what it is, someone's gonna kill it. And so I think you have to have like an affirmative democratic case for like, look, people voted for this. We're gonna do it and it's gonna be done and we're not gonna let somebody 15 years from now kill it.

• 1:56:06Speaker 03

  And then there's a lot of stuff in here that I think is bipartisan, where it's wonky, it's technocratic, you know? There's not like huge rifts on critical mineral production, you know, it's not huge rifts on like the small business administration should be really effective. But you need to exercise political will to do it. And so some of it is just like really fine-grained technocratic stuff that we think like, you have agreement, but you just need to push. And you need a really clear action plan for how to do it. It's not enough to just say like, hey, shipbuilding should be better. You need to be able to lay out like, here are two things you could do tomorrow and prove it. And it's easy. Yeah.

• 1:56:37John Coogan?

  I mean, staying on shipbuilding, what does the vibe feel like around

• 1:56:44John Coogan?

  advanced manufacturing, automation, humanoid robots? Let's not worry about the workforce at all versus let's go into reskilling, upskilling. Let's bring, let's bring back the idea that you can have a beautiful American dream career in an industry like shipbuilding.

• 1:57:04Speaker 03

  Yeah, thanks to our, our friends at American Compass, you know, I'm an IFP, Calvin's a FAI. American Compass is kind of the third part of this, but they spend a lot of time thinking about workforce skilling and redevelopment. So there's a lot of stuff in the industrial power section here about like, what do you actually do? What's worked? Cause there's, you know, it's easy to say, okay, workforce retraining, but like it's, it's not an easy problem. There's lots of failures there. So what do you actually, what do we actually know about how to do that? I think everybody on this, uh, on, on this team, like the Venn diagram is there's not going to be as many manufacturing jobs five years from now as there were at a, you know, at the peak of American manufacturing, even if we improve output. And I think, you know, your listeners will know this, that you're going to have to lean on automation pretty

• 1:57:48Speaker 03

  heavily to kind of get close to competing with China. At the same time, I think there's absolutely room to say like, if you, if you re-industrialize and automate, that's going to, there's going to be a lot of jobs there. So I think the question is just like, on what scale is that? Is that, you know, a, a World War II level mobilization? I don't think anybody here is pushing for that, you know, that, that more than half of, you know, all able-bodied men should be working in the factory. But I think there's absolutely room to, to push, to push that even without, even without looking at those kinds of orders of magnitude.

• 1:58:16John Coogan?

  They should be in a warehouse in El Segundo, honestly. Maybe not.

• 1:58:18Speaker 03

  Everybody, yeah.

• 1:58:19Jordi Hays?

  Making it rain. Uh, what, what, what topic in the playbook do you think is going to get the least attention this year that will get the most attention, let's say, in, in, in five years? Is there a specific area? Cause right now it feels like, you know, a big, a big part of this is around, you know, is, is all encompassing around kind of industrial policy. But, you know, we were in Washington last week and there was, you know, it was a very bipartisan event around re-industrialization. So it, it seems like everybody is, is, uh, not, not everybody, but it feels like there's a general alignment there and a lot of attention there. But of these kind of subtopics, where do you think, uh, is, is being kind of like underrated or under discussed?

• 1:59:04Speaker 03

  Yeah, I think probably in the discourse is a couple I would point to. One is just, nobody wants to talk or think about pandemics anymore. You know, it is just like no energy to like, relitigate COVID or to kind of think ahead and plan. I think this is one of these weird lessons of COVID is like Operation Warp Speed is a massive success in a lot of ways. We learn a lot about like, what should we do to prevent future pandemics or minimize them? And then just, nobody has any energy left to talk about that. So I think there's some really good ideas here on like, pathogen sequencing. And I think there is real movement in DC on, uh, like all purpose, like viral vaccines. And a couple colleagues put together some really good work here, but it's just like, nobody wants to talk about that right now. I think that's like,

• 1:59:45Speaker 03

  you know, and I get it, to be honest. And then the other one is, you know, the high skilled immigration fight is going to keep happening, uh, you know, throughout, you know, over the course of this admin, I think, uh, you've got different parts of the coalition, you know, in the admin to have very different views on this, obviously, even among the orgs that put this together. We, we don't all agree on everything on immigration. But there's a proposal in here that I really liked. It's basically, uh, uh, DOD, could be much better tracking, like who are the top scientists, maybe the top thousand scientists out there who we would like to have stateside? And just like, keep it, keep it tight. You know, this doesn't have to be lumped in with the O one or the other, just kind of general, like high level talent. But if you have like a specific list of, here are the people we would love to poach from China.

• 2:00:30Speaker 03

  And then just like, make it extremely easy for that specific list of a thousand or two thousand people to, if they ever want to come over here, you know, they've got the, the kind of golden ticket path. And I think there's, you know, if you think that science is like long tail, that the, the really, the rock star scientists, the best founders, the best R and D people are just a few orders of magnitude better than some pretty good people. This is not a kind of crazy idea. I think like, let's, you know, poaching the highest, highest value people would have an outside impact.

• 2:00:57John Coogan?

  Awesome. Well, uh, we're, we're, we're staying on shipbuilding. Um, but thank you so much for hopping on the stream. This is great.

• 2:01:04Jordi Hays?

  Great to have you come back on again soon.

• 2:01:05John Coogan?

  Yeah, we'll have to talk more soon.

• 2:01:06Jordi Hays?

  And, uh, yeah, congrats on the launch.

• 2:01:08Speaker 03

  Thanks, guys.

• 2:01:09John Coogan?

  See you. Bye. And we got Phil from Dirac coming in the studio. I want a sound effect for Phil. Phil.

• 2:01:20Jordi Hays?

  The man I once called.

• 2:01:23John Coogan?

  A child.

• 2:01:24Jordi Hays?

  I didn't call him a child.

• 2:01:25John Coogan?

  You called him a baby.

• 2:01:26Jordi Hays?

  No.

• 2:01:27John Coogan?

  You referred to him as a five year old. You said he was toddler.

• 2:01:29Jordi Hays?

  No.

• 2:01:30John Coogan?

  It was very rude.

• 2:01:30Jordi Hays?

  Going too far. Going too far.

• 2:01:32John Coogan?

  We've all had mistakes.

• 2:01:33Jordi Hays?

  We won't say it. I made a big mistake.

• 2:01:35John Coogan?

  Things make mistakes.

• 2:01:36Jordi Hays?

  I've also mispronounced.

• 2:01:37John Coogan?

  Oh, tons of.

• 2:01:38Jordi Hays?

  And now we're boys.

• 2:01:38John Coogan?

  But now he's here.

• 2:01:39Jordi Hays?

  In Washington last week.

• 2:01:40John Coogan?

  For the third time, joining the stream.

• 2:01:42Jordi Hays?

  There he is.

• 2:01:43Fil Aronshtein?

  Yes, gentlemen, how is it going?

• 2:01:46John Coogan?

  Welcome to the stream, Mel.

• 2:01:48Jordi Hays?

  Oh, it's great to see you.

• 2:01:50John Coogan?

  It's been ages. I haven't talked to you on stream in three days. It's terrible.

• 2:01:55Fil Aronshtein?

  Yeah, I'm so glad to be back.

• 2:01:57John Coogan?

  You back in New York?

• 2:01:57Fil Aronshtein?

  Dearly. Yes, I'm in New York, in the Capitol Empire, in the Empire State Building.

• 2:02:02Jordi Hays?

  Capital of the empire.

• 2:02:03John Coogan?

  Capital of the empire. I love it. Okay, quick intro. Explain like I'm five, what the company does, and then the announcement today.

• 2:02:12Fil Aronshtein?

  Absolutely. So we're Dirac. We have some software that automatically generates assembly instructions for manufacturers. We like to say it's all about context aware production planning. That's not the, you know, five year old wouldn't really get that part.

• 2:02:25John Coogan?

  Lego instructions for ships.

• 2:02:27Fil Aronshtein?

  Yeah, imagine IKEA assembly instructions, but for planes, cars, engines, and now boats. And that's what we're going to talk about today.

• 2:02:33John Coogan?

  Okay, so what happened?

• 2:02:33Jordi Hays?

  Boats.

• 2:02:34John Coogan?

  Break it down.

• 2:02:34Jordi Hays?

  So we're talking about yachts, right? Potentially transitioning Alcatraz to.

• 2:02:39John Coogan?

  Yep, pleasure yachts, super yachts.

• 2:02:42Jordi Hays?

  Tax Haven, yacht harbor.

• 2:02:43John Coogan?

  Yeah.

• 2:02:44Jordi Hays?

  No, sorry, go on, go on.

• 2:02:45Fil Aronshtein?

  All about yachts, specifically yachts that can launch projectiles.

• 2:02:49John Coogan?

  There we go.

• 2:02:50Jordi Hays?

  Got it. Okay.

• 2:02:50John Coogan?

  The best kind.

• 2:02:51Fil Aronshtein?

  Yes. So unfortunately, shipbuilding for a while in the US has been slowly slipping. We at Dirac have decided to partner with a company called Fairlead, who is a, you know, captain of maritime production in the United States. They're based out of Norfolk, Virginia. They're a, you know, sort of the Norfolk shipyards. They run the, they run the place. They work with all sorts of different clients. They're a massive shipbuilder. We're talking submarines. We're talking destroyers. We're talking carriers. Fairlead has selected Dirac to basically modernize a lot of their production planning and infrastructure. So I'm really, really excited to work with them. They are super tech forward. Funny enough, they actually launched their own venture fund earlier today.

• 2:03:33John Coogan?

  Wow.

• 2:03:33Fil Aronshtein?

  So great timing for them. And, you know, we're excited to announce this partnership. This looks like us basically getting into the forward deployed engineer game. We're gonna, we're gonna have a guy deploy down there, modernize a lot of their infrastructure and deploy the latest and greatest Dirac technologies to their production plant. So if we, yeah.

• 2:03:50John Coogan?

  Yeah. So break down the, you know, the massive onion that is the layers of building an actual ship on Fairly.com. I see they have an aircraft carrier, but it seems like they build systems that go into the aircraft carrier. So are they like a, are they under a prime contractor? Do they work for Lockheed and Northrop or someone else or Huntington Ingalls? Is that right?

• 2:04:16Fil Aronshtein?

  Yes. So I got, you know, in the, in the interest of preserving fairly its confidentiality, I, I will, I will say exactly which primes, but they have many, many, many prime contracts that they have systems directly on to. I can tell you the biggest shipbuilders and maritime producers that are primes are Huntington Ingalls, Bollinger, General Dynamics Electric Boat. These are potentially the types of companies that hypothetically fairly would be working with. And so, yes, they support.

• 2:04:43John Coogan?

  And then what are they actually building on the ship? I see some systems, variables, variable speed, drive, switchboards, control systems. Like, can you concretize this and like, break it down in more simple to understand? Like, is it the steering wheel that they're building? What are they doing?

• 2:04:57Fil Aronshtein?

  So basically, when you get a boat, right? You're, you're, you're saying it's time to ship, right? We're gonna, we're gonna make a boat. It's, which is, you know, you, a shipbuilder makes a hull, right? They make, they make this, you know, they make, they start to make the hull, they start to make various systems within that ship. But really, they're making like a ship. What then happens is a integrator needs to come in and actually soup it up with the latest and greatest technologies. You know, they need to integrate software, they need to build in the control panels, they need to build in all the infrastructure and weapons platforms, and then go on that boat. So it's different as an industry in the way that you produce than automotive, than aerospace and defense, than a variety of other industries. But when you look down at like the types of things

• 2:05:40Fil Aronshtein?

  they make, these are sub-assemblies that you can see on any type of platform out there in the world. So that's, you know, shipbuilding as an industry, if we were talking about it relative to other industries, they build actually the largest systems on the planet, because those are basically boats. If you look at automotive as an industry, automotive is fairly modern, you have, you know, automated facilities, automotive is fairly modern, aerospace and defense as an industry is probably like around 20 years behind automotive. And then shipbuilding is probably 30 or 40 years behind. So you know CAD as an example of like a metric or CAD adoption, like 3D modeling adoption as a metric for, you know, how advanced the industry is, you know, we're talking automotive,

• 2:06:23Fil Aronshtein?

  everything is catted up aerospace and defense, the majority of things at this point over the past 15, 20 years have been catted up in, you know, digital representation.

• 2:06:30Jordi Hays?

  Yep.

• 2:06:31Fil Aronshtein?

  In shipbuilding, you know, these, these guys are largely on paper processes and they may be, you know, some of the most advanced pieces of technology that come out of an engineering department, but they're still looking at 2D drawings. They're still, you know, basically drafting pieces of paper and that is what we're getting maritime often. Dirac is leading the charge, captaining that ship.

• 2:06:51Jordi Hays?

  What does that design kind of work and production workflow look like from a, you know, prime to a fairlead to the actual, you know, manufacturing engineers that are making, you know, individual parts. And I imagine oftentimes the, the, the initial designs or the specs, you know, you're actually, I, I'm sure that Fairlead and Fairlead's engineers realize at different points like, hey, this worked in, you know, a CAD file, but it doesn't actually work in practice. We need to re-engineer it. What, what does that kind of collaboration process look like on a, on a general level without going into detail on, on, on Fairlead's specific process?

• 2:07:36Fil Aronshtein?

  It looks a lot like a lot of plane tickets bought to Virginia, you know, a lot of folks flying from DC to, you know, from Norfolk to, to DC, from Boston, all over the place for, you know, to California. It is very difficult for these folks to communicate technical designs digitally right now. And it is because it is all on paper. And so it looks like a very angry phone call down to, you know, the, down, down to the docks and say, hey, we, we got that, you know, system that you guys shipped. This thing don't fit, you know, what's going on? So that that's it's unfortunately very frequent occurrence. You know, if you look at the average delivery date for a submarine, on average submarines are three years late. So it is, uh, it's really, really bad because the barrel that everyone in maritime is staring down at

• 2:08:22Fil Aronshtein?

  is the year 2027. It's a big year that the Navy, that the Army, that everybody in the US military is focused on, because that is the year that we think, uh, you know, some crazy stuff's gonna happen with China. And so, you know, they're thinking, okay, it's 2025. We need submarines yesterday. You know, the annual production rate for submarines in the United States is one and a half submarines a year. China makes more than 10 a month. And so, you know, that is a terrifying number because the, as you were kind of asking about.

• 2:08:56Jordi Hays?

  Red alert, I mean, that, that is staggeringly bad.

• 2:09:00John Coogan?

  That's terrible. Uh, can you give me a little overview of the executive order restoring America's maritime dominance? What's in there? What does it mean for shipbuilders, you, America broadly? Uh, and yeah, and, and, uh, does it make you more optimistic about that problem?

• 2:09:18Fil Aronshtein?

  Yeah, I would say it makes me more optimistic. The administration, current administration is taking it extraordinarily seriously that we need to upgrade the modern American shipbuilder. These are things that are named, like that statistic that I mentioned. Statistics like this are named specifically in the executive order. And they're basically calling out the shipbuilding industry, saying, if you are, you know, 15%, I forgot, I forgot the explicit number, but if you are late by a certain percentage on your contract, you will be fine. You are subject to losing your prime contract. Like, it is not okay to ship late anymore. You know, they're unfortunately not too many Jira tickets flying around shipbuilding, but they ought to use something like that at least. It is a, it is a staggering problem that at least the EO is taking seriously.

• 2:10:00John Coogan?

  Yeah, yeah, that makes 10 cents. Well, thank you so much for hopping on. Do you have anything else, Jordy?

• 2:10:04Jordi Hays?

  No, this is great.

• 2:10:05John Coogan?

  We are going to hop over to talk to Fairlead, the other side of this deal and get Jim's take over at Fairlead. Put the screws to him.

• 2:10:14Jordi Hays?

  We're going to pitch Fairlead on it on leading a 100 million on 1 billion posts into Iraq. So wish us luck.

• 2:10:21John Coogan?

  Good luck.

• 2:10:22Fil Aronshtein?

  Well, thank you, guys. I will catch you later.

• 2:10:24John Coogan?

  We'll talk to you later.

• 2:10:25Jordi Hays?

  Great to see you.

• 2:10:25John Coogan?

  Bye.

• 2:10:26Jordi Hays?

  Cheers.

• 2:10:27John Coogan?

  And let's bring in Jim here, the other side of this. We don't talk, I mean, Fairlead is not a company that a lot of people know about, private. It's been in business since the 80s, but fascinating to hear from a true industry insider who actually works on building these ships. You know, we've seen in Silicon Valley, a lot of companies kind of nibbling around the edges. There's some, you know, a bunch of shipbuilding companies that are building smaller systems or more swarm-based systems, not really focused on the exquisite systems. Well, Fairlead is the company that actually works on the big ships, which we need to keep making, even as the landscape of the battlefield changes. They do ship repair, maritime manufacturing, privately held, veteran owned, controlled by its founder.

• 2:11:12John Coogan?

  They're still in founder mode. You love to hear it, Jerry Miller.

• 2:11:15Jordi Hays?

  And they have a new venture fund.

• 2:11:17John Coogan?

  They do.

• 2:11:17Jordi Hays?

  I'll have to ask about that.

• 2:11:19John Coogan?

  It was founded by a former US Navy Surface Warfare Officer and longtime Hampton's Road Ship Repair Entrepreneur. Owns the company through closely held Miller Group. In 2014, he rebranded his previous Miller IMG Field Operations as Fairlead Integrated and has remained Chief Executive Officer and Majority Shareholder ever since. In 2019, former General Motors CEO Dan Akerson bought a small equity stake and serves as a minority owner and strategic advisor, but no outside corporation holds a controlling interest. Anyway, is Jim available? Let's bring him into the studio. Welcome to the show, Jim. Nice to meet you.

• 2:11:51Speaker 05

  Thanks so much. That was fantastic.

• 2:11:54John Coogan?

  Yeah.

• 2:11:54Speaker 05

  We appreciate and privileged.

• 2:11:57John Coogan?

  Yeah, we're really excited to have you here. Would you mind introducing yourself and a little bit about the company? I gave a little bit of an overview, but I'd love to hear it from you.

• 2:12:05Speaker 05

  Certainly, James Blum, I run Corporate Development on behalf of Jerry Miller and Fred Pasquinn, the President, he's running Fairlead, and we rebranded into, we now turned it into Fairlead, and we have Fairlead Ventures, which we announced earlier today, and very privileged to also partner with Tarrack, and that announcement is coming out any moment, as I understand from Phil and the team. And at Fairlead, we're very privileged. Systems engineering, shipbuilding, ship repair. And then we work on many different advanced energy challenges that the Navy has experienced and wants to integrate and adapt and apply. And we're very fortunate to do what is known as

• 2:12:47Speaker 05

  commercial off-the-shelf integrations, and then harden those integrations from the world's leading industrial manufacturers, and integrate them into Navy platforms. And very fortunate to support the Navy and work on a number of different key initiatives across the maritime industrial base. We're part of the submarine industrial base, and we're fortunate to work on some very important problems around Columbia and the Virginia class. And then we do a lot of modular shipbuilding around aircraft carriers and all the latest designs that are coming out, and applying a lot of different autonomous capability to our aircraft carrier fleet. And then we're working very closely to destroy our class as a platform, and working on applying

• 2:13:31Speaker 05

  a lot of next-generation energy capabilities so that they can be integrated for lasers and hypersonics. And then lastly, we worked very closely across the USV space, really applying very, very hardened military industrial systems engineering and critical engineering capabilities, where you're really classifying a new set of software-defined infrastructure that's being cascaded and fused across all the different platforms. So they're more intelligent, more capable, and move faster and address a different lethality capability that we faced in the past. And now we're upgrading and ready for maritime dominance under the executive order that our President just announced. And then, obviously, with the opposite shipbuilding

• 2:14:16Speaker 05

  coming in, shipbuilding and ship repair.

• 2:14:20Speaker 05

  Our time dominance is something fairly that we're privileged to support the community around. And so we're really augmenting, accelerating what I would call that next generation of hardening and that capability of engineering that is critical from a quality, control and speed perspective. And so that's what we're doing at Fairlead and that's why we created a venture army. We actually launched and announced it today and we're, we're backing emerging managers who are leading in autonomy and AI and applying autonomy and AI and machine learning, some of the most important weapon systems for, for our country and as well as to afford us that capability and deterrence and in all the key theaters that are, are responsible for addressing. So.

• 2:15:00Jordi Hays?

  Are you so.

• 2:15:02John Coogan?

  Yeah, thanks.

• 2:15:03Jordi Hays?

  Yeah. So is it, is it new fund folk? Is it, would you call it a fund of funds or you're investing in, in managers or in, in direct investments or, or what's the focus?

• 2:15:14Speaker 05

  Yeah, we're the two latter. So we're really focused on backing the best emerging managers in space and the best founders and entrepreneurs in the space. And that's what Phil from, from Dirac is an amazing example of. And we're just really, really fortunate to bring that kind of model-based manufacturing, you know, into shipbuilding now. And, and one of the key areas in the country, which is Norfolk and Hampton Roads and Virginia Beach and then Portsmouth. So.

• 2:15:41Jordi Hays?

  How, how is, uh, one of the, the, you know, Phil is extremely eloquent and brought up a bunch of interesting data points on the 15 minutes he was on before this, one of which was, uh, United States, what, what do we make one submarine a year at this point?

• 2:16:00John Coogan?

  Takes about 18 months.

• 2:16:01Jordi Hays?

  18 months, he said. China makes around 10 a month. How does Fairlead think about, you know, helping close that gap over time?

• 2:16:11Speaker 05

  Well, we we believe that the key is workforce development and capacity and capacity planning. And these these systems are very exquisite and they require extraordinary amount of testing and certification. And when you want to apply next generation technology, you really have to have all those processes in place. So we're fairly just sought out from a strategic planning perspective. We've really, as a brand and under Jerry Miller and his leadership and Fred Pasquinn, the entire company is dedicated to quality and to speed at scale. And so for us, we sought out, you know, a company that was doing exactly what Phil and Pete and, you know, Jared and Trevor were building.

• 2:16:54Speaker 05

  And Bildo S for us was the software that was going to help us really accelerate that schedule and address that schedule risk you were just talking about. And so, yes, the Navy and all of its partners across the defense primes, you know, across the Navy, all of them, shall I say, the heritage primes and the new neo-primes. Everyone has to actually help, you know, General Dynamics and Electric Boat move faster as fast as they can. And they're an extraordinary company with extraordinary leadership. There's a lot of technology and complexity that has to be integrated. And then, quite frankly, from a shipbuilding perspective, that production schedule is is very challenging. And so getting it getting it to a position where it can introduce effectively two to three more subs over the next five years.

• 2:17:40Speaker 05

  So instead of deploying and introducing one new submarine or or two in a year to up to three to four, that's going to take a very, very, very heavy lift from the ecosystem and fairly just part of that ecosystem. And we think with the rack and and that modernization and that single source of truth that they bring will help a firm like ours. Cascade and accelerate that entire industrial defense supply chain base around the Columbia and Virginia class submarine manufacturing process. And we think we should be able to advance it rather rather significantly. But what we're talking about is really moving in production schedules from 2035 and 2030 into 2028 and 2027. And so that's a very hard lift for the Navy for

• 2:18:25Speaker 05

  its defense primes. And we're certainly with direct impact that schedule. And we think we can have a major impact, not just on the acquisition in delivery side, but also the sustainment side. So really important part of actually, if you look at, you know, how all wars are won, they're won through sustainment and their supply chain. And we're really excited about that fairly to really, you know, reducing and mitigating a lot of that risk across the suppliers and across the defense industrial base, supporting the great submarine industrial base that we have in our country in that leadership.

• 2:18:58John Coogan?

  I'm sure a lot of founders of new defense tech companies would love to do a deal with you or sell into a company like Fairlead. Can you walk us through what it takes for a young company to prove that they would be the right choice for a partnership with a more established company like yourself? What's the conversation like? What are the KPIs? What are the things that you need to do to de-risk taking a chance on a new and growing company?

• 2:19:28Speaker 05

  Sure. Such a great question. Succinctly, they believe in a center of excellence. So from our perspective, the leadership team and their engineering and I'll just say all across product, all across engineering, and the founders are have to be committed to addressing the ecosystem. So what that means is literally actively having the forward deployed engineers be there to build up that new system of record with their own solution engineers and architects, but they'll literally will advance training for that workforce to the development, that workforce education, and then scaling that over a 36 to 48 month timeframe. So as a result, that that

• 2:20:11Speaker 05

  means that the founders and their founding investors have to have patient capital and capital from what I would call remarkable venture firms and growth equity firms. And then they have to have a deep capital base because this is a very, these are, these are three to five year sprints. And and the goal is to move at scale and then you're training and upscaling and then really attracting extraordinary engineers, the best builders in our country, to actually a new space for them, which is maritime. And this maritime industrial base for maritime dominance, that record requires a heavy lift on an earlier stage firm. So what I would say is almost series B and series C firms in general are a better fit.

• 2:20:57Speaker 05

  Unless, of course, they have leadership that is extraordinary and deep, like Dirac is and is a great example of significant expertise in the maritime industrial base. Significant under understanding of how electric boat and general dynamics actually works as a company. And then having that knowledge and then being able to scale that knowledge, build that into a software system, which be is a platform that we can integrate all of our shipbuilding and our systems engineering and a lot of the product development that we do, and then applying a lot of autonomy and AI stack into that. From a work assembly perspective, from a modularity perspective, that is, uh, that's a heavy lift for most companies.

• 2:21:41Speaker 05

  Dirac had all of the above, and then they had extraordinary founding investors behind them from a seed perspective. And then they have a broad ecosystem support across what I would call the venture capital stack. And that capital investment partnership that they have cascading across the country, both on the East Coast and the West Coast, meant for Fairlead, they had mitigated all the risk for us as well as the maturity of their software. And then their commitment to build a center of excellence in Norfolk, around that entire community where the Navy has a very significant amount of its fleet and manufacturing base. So those were the key requirements. And I would say that they also had the technology roadmap that we thought was absolutely core and critical to us. And we'd been seeking that out for the last nine months under Fred Pasquinn and Hal Barge.

• 2:22:24Speaker 05

  And Hal really leads that for Fairlead and he was extraordinarily impressed with the presentation by Jared and and and Phil. And just to give you a sense of how fast we move, we moved from meeting them to actually executing a purchase order and agreement and a commitment to getting trained and scaling this fairly in under three and a half weeks. That's how fast we move at speed and scale. So for any founder out there who believes that they have the next piece of the core tech stack, they will unlock capacity, scale and autonomy.

• 2:22:56Speaker 05

  And manufacturing for our country. Yeah, we can, we, we move much faster than most industrial enterprises. And we're, that's why we have a venture arm that we launched because we wanted to back that with capital in addition to being a great customer and a great partner.

• 2:23:11Jordi Hays?

  That's very cool. Wow. How, how is Fairlead thinking about opportunities to support various primes on smaller autonomous systems? It's obviously very different, you know, manufacturing process to make, you know, a thousand of something versus, you know, one or two of something. And I know it's top of mind for you guys.

• 2:23:36Speaker 05

  Yeah, so well said. We began this journey back in 2015, really trying to back as many new founders who were really early in that smaller autonomous stack. And so we're just been very fortunate to back a number of new and traditional players in the USC space. And we really started really on the system engineering and systems integration side. And we have found now that we're really, we've been very lucky that the Navy has been so supportive of us that we're now working with many of the, of the brands who are out there who well, well, well published, doing incredible job raising capital, doing incredible job pioneering in what I would call smaller hybrid fleets

• 2:24:22Speaker 05

  and introducing new port capabilities, terminal capabilities, the full value chain. And so we're just really privileged to work with, you know, what I would say, the new entrance to the space as well as the heritage players. And what we're fortunate to say is we're working with almost all of them. And we really take it from a software and systems engineering perspective. And what we're really trying to do is harden the navigation systems, harden the, the autonomous systems from cyber attacks, building out mission modules and payloads to support them. So as you know, many of these remarkable firms with remarkable capital are really building out these new vessels, which are, we need and are fantastic. But actually integrating that from a payload and cargo

• 2:25:06Speaker 05

  and high value, high consequence cargo perspective, that's actually an extraordinary, shall we say, level of systems integration that's needed. We just feel like we're, we're just a natural partner and. The majority of the industry has selected Fairlead. So we, we look at everybody as a partner and we're, we're really looking at their timeline to sell, accelerate production. So they can field and get tested and certified and introduced into theater. And so that we can address that schedule risk that our president and you know, our new secretary of the Navy is very, very adamant about reaching. And so we just feel that we're just, we're, we're, we're very lucky to be in that position to have the resources, the assets, the real estate, the capital, the leadership, the expertise. And quite frankly, we're now actually a prime ourselves. So been very, very fortunate.

• 2:25:52Speaker 05

  Let's go.

• 2:25:52John Coogan?

  Congratulations.

• 2:25:53Speaker 05

  Yeah, thank you.

• 2:25:54Jordi Hays?

  Well, James, if you've ever, uh, if you ever want us to come podcast on a submarine, let us know.

• 2:25:59John Coogan?

  We're here.

• 2:26:00Jordi Hays?

  We're here. We're ready.

• 2:26:01Speaker 05

  Gentlemen, we'll introduce you to all the right people. We, it would be a privilege.

• 2:26:04Jordi Hays?

  Great.

• 2:26:04Speaker 05

  Very honored.

• 2:26:05John Coogan?

  Well, thank you so much for hopping on.

• 2:26:06Jordi Hays?

  Fun and the partnership and it's, it's great to chat with you guys. Thanks for all the contacts.

• 2:26:10John Coogan?

  Yeah, we'll talk to you soon. Have a great one. Bye.

• 2:26:13Speaker 05

  Thanks so much. Take care, guys.

• 2:26:15Jordi Hays?

  Cheers.

• 2:26:16John Coogan?

  And next up, we have Jacob from New Limit talking about life extension. Can you live forever? Or are we trapped in this mortal coil? We will get to the bottom of it. Uh, but I mean, New Limit's a fantastic company. Uh, Brian Armstrong has been working on it for a while. Uh, brought in a fantastic team and they've been doing a bunch of stuff. So Jacob, welcome to the stream. Thank you so much for joining. Uh, could we start with a quick introduction on yourself and the company? Just for those who don't know.

• 2:26:42Speaker 06

  Yeah, absolutely. Thank you all for having us today. Uh, so my name is Jacob Kimmel, one of the co-founders and president of New Limit. So New Limit's working on a new type of medicine to try and extend human health span. By which we mean, we want everyone to have more happy, healthy years in their lives than they do today. And we're doing that using a technology called epigenetic reprogramming, which we're happy to unpack if it's of interest.

• 2:27:01John Coogan?

  Absolutely. Let's unpack it.

• 2:27:03Jordi Hays?

  Let's unpack it.

• 2:27:03Speaker 06

  Okay, let's unpack it. So all the cells of your body.

• 2:27:06Jordi Hays?

  Our, our human audience, there might be some AI agents listening that.

• 2:27:10Speaker 06

  Not so much the audience could also benefit if there are any who are currently tuned in. So all the cells in your body, they've all got the same DNA code, which is both kind of trivial. You probably learned that in like third grade biology class. But it's also presents a wonderful question, which is then, well, how do your eyeball and your kidney and your tongue all do different things? They have the same code base. It turns out on top of your DNA and some of the proteins your DNA wraps around, there are these chemical modifications called epigenetic marks. I think of these kind of like the control flow in software, where not every line of your code base runs every time a user hits your application service. You use some pieces of the code base sometimes and others other times. And so your genome is the same way. Some cells express some genes from your genome, others express a different set, and that's how they do different jobs.

• 2:27:52Speaker 06

  Turns out as you age, all of those epigenetic marks get, for lack of a better technical term, messed up. And so your cells stop using the right genes at the right time. They use the wrong genes at the wrong time, and then they degrade in function. And that actually precipitates a number of the diseases and pathologies that arise with age, including things that we don't even traditionally define as disease, but that you or I would certainly like to remedy about our experience if we could.

• 2:28:14John Coogan?

  Is the plan here kind of traditional FDA biotech? I'm thinking like some research, then some mice, then dog or monkey, then human trials, then phase one, phase two, phase three, maybe you're a public company at some point? Or is there some sort of Silicon Valley twist or different approach that you're taking?

• 2:28:31Speaker 06

  Yeah, so all of the downstream steps are pretty much what you just laid out. Ultimately, in order to get a medicine into humans, we have to first do no harm, demonstrate that the medicine has some reasonable chance of actually helping a person, and then definitely isn't going to harm anybody when you put it into them. So we do need to do animal trials. We then eventually need to go into the clinic. I think the Silicon Valley twist here is that the problem we're trying to solve of how to basically rewrite these epigenetic marks back to the state you had when you were young, really wouldn't have been tractable even 10 years ago without basically two technologies. One of those is something called single cell genomics. So we can actually take a cell out and sequence all of the different RNAs in that cell, basically telling you which parts of the genome it's using. And then the second, which I'm sure your listeners are intimately familiar with, is AI.

• 2:29:14Speaker 06

  There are more ways we could try and rewrite this epigenome than we'll ever be able to test in the lab. It doesn't matter how clever you are. The number here is about 10 to the 16, which is a stupidly large scientific notation number. To put it in context, that's like 10,000 Milky Ways worth of stars. You just can't test all of those things.

• 2:29:30John Coogan?

  Yeah.

• 2:29:30Speaker 06

  And so by building AI models, we're able to actually prioritize which of those potential reprogramming medicines we even go bother to test in the lab. And that helps us get to these discoveries much faster. I really don't believe this company would have been a good idea prior to the advent of really those two key technologies. And so we're trying to parallelize as much as we can early on. So that by the time we get to that traditional drug discovery process, we have a lot more conviction around the molecules we're moving forward than you might otherwise.

• 2:29:57Jordi Hays?

  Can you talk about the different kind of milestones that you sort of

• 2:30:03Jordi Hays?

  that have been important to you and important to your partners to get to this point? It's much different than SaaS where maybe you get funded with an idea and a deck like every company does. And then you get to maybe 2 million of ARR, you do a series A, 10 million, you do a series B. I imagine the milestones have been much different here, but I'm sure you guys hold yourself to a pretty extreme standard around continuously de-risking the opportunity and getting more and more convicted. But I'm curious what those have been to date.

• 2:30:37Speaker 06

  Yeah, absolutely. Lovely, like that out. One of the challenges with hard technology and biotech in particular is the milestones are not quite as legible as revenue for quite a while. You know, famously, some of the largest companies in the space took quite a while to even get to revenue positive. And the reason these bets still make sense is that once they do have revenue, you really start printing it. There are more drugs making a billion dollars in revenue today than I believe there are software companies. So it's truly amazing to recognize like a single product is transformational. So all of these hard bets make sense, even if there is a challenge in making them legible along the way. So for us, really, there were a few key milestones. When we started out and built the company, all of this was effectively an idea. There was an existence proof where we knew it was possible to reset the epigenomes in old cell back to a younger state.

• 2:31:21Speaker 06

  But that existence proof was something that in the field, we often call a tool compound. It tells you that the biology is tractable, but it's not a medicine you can put in people. It basically works, but it's not safe. And so we had to first build all of the technology that would even let us run these experiments in the first place. Just to give you a sense of scale, before New Limit, people had really only tried nineteen different ways to do this sort of epigenetic reprogramming intervention, make an old cell look young. Sixteen of those I had done in my old lab with my own hands. Like, really, this was just a gold mine that not many people were digging in. It's just like me there with like a tiny little plastic shovel. And so at New Limit now, we've tested about fourteen thousand of the different ways to reprogram cells. So we like to say it's six or seven hundred X, depending on if you let me round up or not. And we had to build all the molecular tools to even let us run those experiments. That's sort of step one.

• 2:32:07Speaker 06

  Step two is we then have to demonstrate that actually, even though I'm really proud of the fact that we can run fourteen thousand experiments, it's way smaller than ten to the sixteen. We can build AI models that are sufficient to actually prioritize which of those experiments are worthwhile. If you imagine that there's some gold out there, but there's just way more places to dig than than we can really exhaustively search through, we need a way to find where those spots are. So we were able to demonstrate that now. We think we have the most performant models in the field, really thanks to just the scale of data we've generated. We have hundreds X more than anyone else does to train these types of tools. And then one of the final pieces, and this was the last unlock, that actually came a lot faster than we thought it would, is we demonstrated when in the biotech communities known as a preclinical proof of concept. In layman's terms, we've built some molecules that are actually drug-like.

• 2:32:52Speaker 06

  So you can actually hold these in your hand, you can hold a tube of a potential reprogramming medicine, put that into an animal model of a disease and rescue the function of that diseased animal. We can do this both with human cells. In our case, we're able to take old liver cells from old people and restore them back to a youthful function so they can regenerate and repair a tissue the same way young ones do. And then likewise, we can put these molecules into animal models. And one of the diseases we're going after is alcohol-related liver disease. It's some damage that accumulate. From alcohol exposure over the course of your life. Not only can we make those cells regenerate better, but we can also just make them much more resilient to alcohol. It turns out that as your hepatocytes, the cells in your liver age, they become much more vulnerable to alcohol when you drink.

• 2:33:32Speaker 06

  That's an experiment that I've run in my own life, and so I believe the data even without having to replicate it as many times as we have. And we're able to really improve the protection they have against that type of damage in a way that we think will really benefit patients. So to our knowledge, that's the first time anyone's really made a reprogramming medicine you can hold in your hand that demonstrates efficacy. Something you could imagine carrying forward to the clinic.

• 2:33:53John Coogan?

  Can you talk about the series B, $130 million? I'm, I want to know about the round, but then I also want to know about what do, what's the use of funds look like? Because you're doing a lot with data. Are you going to spend $100 million in some sort of like large H100 cluster to crunch all these numbers? Are we at that scale yet? Or is it just R and D salaries for engineers, scientists? Are there legal folks putting together FDA applications? Is it a bunch of money on like lab mice and monkeys? Like, what is the shape of the business right now?

• 2:34:25Speaker 06

  Yeah, absolutely. So everything you noted is some expense. Thankfully, our compute budget quite isn't $100 million yet, though I hope we're generating enough data to get there soon. Jensen can donate some GPUs if he's feeling so kind. If he's serious about living to 150.

• 2:34:40John Coogan?

  Yeah, I mean, it's in his own interest. He wants to be running Nvidia for the next 40 years. Why not?

• 2:34:44Speaker 06

  It's, it's true. So yeah, the breakdown is basically the main costs are R and D. So we have a couple, we have three different therapeutic programs. Our most advanced program I told you a little bit about is focused on restoring function in the liver. We hope that can treat some advanced liver diseases and eventually treat everyone whose liver ages. You know, you probably have a little bit less energy than you did when you were 21. I certainly do as well. And that turns out that as we age, over half the population starts to suffer from something called metabolic syndrome. Basically, your rates of heart attack, diabetes, obesity all shoot up. We see this in our own lives with people we know. It's just, we don't necessarily have the language for it normally. And we think those medicines could treat a very broad swath of patients. We also have programs in immunology, trying to restore youthful functioning or immune system. And more recently, vasculature, trying to basically fix your kidneys and other portions of your body that did.

• 2:35:29Speaker 06

  To generate when you can't really move blood around the way you did when you were younger. So that's a large fraction to spend. And then another big fraction of use of proceeds is really to take these molecules toward the clinic. As you start to do experiments in humans, things get very expensive very quickly. It turns out even just manufacturing the molecules that you need to go take into a clinical trial has to be done in a really controlled way. You're also just making very large masses of this stuff and it's very expensive to do. And so because of that, you know, we try and really upfront de-risk everything before we get to the clinic. But we still have to reserve a fair amount of the dry powder to make sure we can do right by the patients we're going to treat, produce the drug in a sufficient quantity, run a sufficiently sophisticated trial to really gain evidence that it's working.

• 2:36:09Jordi Hays?

  Can you talk about the pressure of working on technology that so many people are effectively betting on? And in somewhat, in some ways feel is inevitable. I feel like if you ever have a conversation with a loved one, you know, a parent, you know, you're talking with, let's say a parent, they'll be like, you know, maybe a young person is thinking on a 30 year time horizon and the parent is thinking, well, I don't, you know, I don't know if I'll be around then. And then the, the, the, you know, uh, younger, younger, uh, person says, oh, well, by that point, like we'll have life, you know, I just feel like this is something that comes up constantly that people,

• 2:36:46Jordi Hays?

  I like, maybe, maybe it's, um, you know, maybe it's misguided, but I, I feel like there's a general sense of inevitability with these types of technologies. But when you guys are actually doing the research and, and fighting these, you know, fighting to make this possible, I imagine that at times, you know, maybe in the fullness of time, you feel like it's inevitable, but it's, it's certainly not, you know, pre-programmed, right? It's, it's something, it's, it's knowledge that needs to be earned. But I'm, I'm, and it's a much different level of pressure than, you know, somebody raising $130 billion for a SaaS company, where if it fails, there'll be another note taking app that just sort of like takes the place and will still be able to organize,

• 2:37:30Jordi Hays?

  you know, words on, you know, digital documents.

• 2:37:33Speaker 06

  Maybe for your note taking app, Jordy, my note taking app is going to be entirely unique and irreplaceable.

• 2:37:38Jordi Hays?

  Yeah, exactly.

• 2:37:40Speaker 06

  Yeah, I love the way you set this up. It is something we think a lot about, which is the responsibility we have as we're trying to work on these tools. You know, I think in biotech, you don't get many opportunities to take really audacious bets like this. The science we're working on is earlier stage than you typically start a biotech on. There's more inherent tech risk here than many companies are willing to underwrite. And so because we do have one of the unique opportunities to take a shot on goal at potentially a thousand X outcome, a medicine that everyone would benefit from over a certain age, we feel really a burden to make sure we're using that opportunity responsibly. And so I do think there's some amount of stress in it, but I think it's mostly positive in that I feel like often we're presented with challenges where if we shrink the scope of the ambition a little bit, we can make our lives a lot easier.

• 2:38:24Speaker 06

  Well, certainly we can get to the clinic faster if we're comfortable just having a medicine that maybe doesn't apply to as many people or doesn't work quite as well. And having that burden to say, no, we've got one of the few rare opportunities in the industry stewarding this capital, working with these generational investors to be able to try and take a shot where really we are optimizing for the scale of the outcome rather than just the marginal basis point on probability of success, which I think is something that biotech has maybe forgotten over the past decade or so. We've really optimized on probability of success, but forgotten the other half of the EV equation. If you multiply even a high probability by a low potential value, your outcomes aren't generating as much as you'd hope for anyway. So it is something that's always front of mind for us.

• 2:39:04Jordi Hays?

  Makes sense. Yeah, makes sense. How do you think about the potential impact of, you know, improving the function of the kidney by 10% could have some, you know, additional externality in the body that could actually have a really meaningful, you know? So how do you think about kind of complex systems and the sort of unintentional impacts of certain sort of effects of the type of drugs that you guys will develop over time?

• 2:39:37Speaker 06

  Yeah, it's a great question. It's something like, we don't have a super rigorous framework for this because it's these questions are very difficult to answer quantitatively. I guess in short, we like to treat those sorts of knock on benefits as pure upside. So before we launch into a program, we need to convince ourselves that just making one type of cell in your body younger is actually going to benefit you. And that might sound kind of obvious, like, sure, I definitely want younger cells. But if you then step back and realize your body's hundreds of complex cell types, they're all interacting. Well, maybe one really solid link in an otherwise pretty busted rusted chain isn't actually all that useful. So we try and find examples where if we're able to demonstrate that restoring function in just that one cell type helps individuals, helps especially helps humans.

• 2:40:21Speaker 06

  Then we can get conviction around starting a program. And then everything in terms of the knock on systems benefit, maybe if you had a healthier liver or a healthy kidney, we'll see benefits elsewhere in your physiology that maybe we haven't even directly measured yet. We just treat as upside potential for the long term. Yeah.

• 2:40:37John Coogan?

  I have a little lightning round. I want your reaction to three kind of biotech projects or technologies. And I want to know if they're all relevant to the work that you're doing, if you're learning anything from them, or just the overall impact on health and just general biotech community. Ozempic, CRISPR, and AlphaFold. So I'd love to start, I guess, with Ozempic. It feels like, you know, it's not necessarily life extension, but in terms of health span, could be very good. But how have you been processing the story of GLP-1s? And are there any learnings from GLP-1s that you've been able to kind of port back or update your philosophy or strategy at New Limit?

• 2:41:18Speaker 06

  Absolutely. I think you're entirely right in saying these are some of the first health span medicines. I'd argue we actually have a couple already. This isn't like a totally crazy idea. There's another type of medicine called statins. They're a bit older. One brand name one's called Lipitor, you've probably heard of. And between statins and GLP-1s now, I think it's quite plausible if you do some napkin math, we're adding several healthy years to the median American's life, which very few other medicines can claim. You know, if you look at the rest of therapeutics development over the past decade and add up, how many years could you, I, Jordi, maybe? Expect from these benefits, it's it's actually quite small. So I think one, one of the things we've internalized is that, you know, the scale of the opportunity really does matter.

• 2:41:56Speaker 06

  The difference between the GLP-1s and many other drugs is that the access of biology they're targeting actually is dysfunctional in a huge swath of the population. At least 30% of Americans, probably more, depending on exactly how you define that. And that when you strike those really high value opportunities, I think exactly as you alluded to, you start to see knock on benefits. Maybe you didn't even plan for initially, you know, the GLP-1s are now showing benefits and cardiovascular diseases. There's early data in neuro that I don't think anyone quite understands, but does seem to be reasonably consistent. And so trying to keep your mind open.

• 2:42:30John Coogan?

  Gambling stuff specifically, like the addiction and gambling stuff you're referring to?

• 2:42:33Speaker 06

  No, no, so there's actually even neurodegeneration. So there's some early trials that like folks on GLP-1s are having lower, sort of slower disease progression for Alzheimer's and Parkinson's.

• 2:42:44John Coogan?

  Oh, wow.

• 2:42:44Speaker 06

  And as of my understanding right now, it's like basically no one knows how that works. But you're starting to see results like that pop up just because these drugs are out into such a broad swath of the population. We're kind of running these experiments without even necessarily intending to. And so I think really we've just tried to internalize the scope of the opportunity really matters. And then also the strategy they took to get the GLP-1s into the market is one we're trying to emulate. They didn't start by trying to dose the GLP-1s into a huge population. You start with a small patient pool that you know will benefit a huge amount. So in the case of the GLP-1s, certain type of diabetics, eventually you expand to be obese. Eventually you expand to other indications from there. As we're really trying to mirror that stepwise with our programs, where maybe as an example, we're starting an alcohol related liver disease for our metabolism drug. But that's the beginning. We don't intend it as the destination.

• 2:43:28Speaker 06

  And we've tried to plan this in such a way that with, you know, steadily increasing quantums of capital, you can unlock larger and larger opportunities. Rather than just trying to shoot for the home run right off the bat.

• 2:43:39John Coogan?

  Yeah. Do you want to stay on Luzempic before we move on to CRISPR and AlphaFold?

• 2:43:42Jordi Hays?

  Oh, yeah.

• 2:43:43John Coogan?

  Yeah, I, I, I want to get your take on CRISPR. Obviously it was extremely hot technology about a decade ago. Is that at all relevant to what you're doing or have you learned anything from the story of CRISPR and how that was ultimately commercialized and baked into the rest of the biotech community?

• 2:44:00Speaker 06

  Yeah, absolutely. Maybe two things. I think the impact of CRISPR is somehow both over and under hyped in different places. It's maybe overhyped a bit in terms of direct application to therapeutics. I think if you go out and look at sort of how the panoply of different CRISPR companies are doing, there are a few really stellar examples like like beam therapeutics that we really admire who have managed to make compelling medicines and others have struggled. And so maybe there's a bit of hype there, but it's really undervalued on the research side. So we've used a lot of CRISPR tools on the discovery end to be able to ask questions at the level of very basic discovery experiments. What happens when I turn this gene on or off? And maybe we're not going to take those CRISPR tools and trying to actually put them in a person as the medicine itself, but they certainly help us accelerate the discovery of other therapies. And so I think it maybe the lesson

• 2:44:42Speaker 06

  to draw out of that is like when we have breakthrough technologies, often people rush to what is the most direct application therapeutically, but undervalue sort of the knock on benefits of that technology underlying and accelerating a lot of trends that are already at play.

• 2:44:56John Coogan?

  And then similarly, AlphaFold, massive breakthrough in terms of AI and bio, didn't really move the biotech markets when it when the news broke. And my interpretation of that was that maybe protein folding as a cost center for biotech development was actually not that much of a cost driver in the sense that it's mostly just farmed out to grad students, maybe. But but I'm sure there's things where you look at that and you think this is going to this is on the path to really, really powerful AI and bio working together. But are you using AlphaFold or anything like it? Or are you learning anything from it? And overall, do I have a right understanding about the impact of AlphaFold on biotechnology broadly?

• 2:45:42Speaker 06

  Yeah, yeah, I think you've hit the nail on the head with the direct impact. You know, I think solving protein folding itself, like actually taking a sequence predicting a structure, hasn't been rate limiting for drug discovery in the traditional sense. It is painful to get structures, but usually we work on few enough molecules that getting the structure is not really what slows you down for for most traditional therapeutics. That said, I do think it demonstrates we're able to learn much more powerful representations of biology than others thought possible. And so maybe by analogy to CRISPR, the direct application is predicting structures itself really going to solve therapeutic development? No, probably not. Is learning the language of life in a way that we can actually work with tractably going to accelerate everyone in the ecosystem? Absolutely, yes. And so

• 2:46:25Speaker 06

  to your question of are we using something similar? We definitely do. So one of the the tools that we've built, the models we've built, they try and take in some notion of the genes we're manipulating, transcription factors, you needed to learn an embedding, just like an embedding in natural language processing, we're all familiar with, that you can get from LLMs, and then predict what will happen to a cell's age as a result. And it turns out, some of the best embeddings we've found are from these protein language models that really are often deriving from that basic premise of the alpha fold-like tools. And so I don't think if you see the alpha fold announcement, you'd ever intuit, oh, solving protein folding is going to make it easier to find reprogramming drugs that make old liver cells act young. But it turns out that that underlying substrata of learning these representations actually does accelerate a whole bunch of science you don't expect.

• 2:47:08Speaker 06

  And so I think often, the headline is a little overhyped, but the subtext is underhyped and probably more important.

• 2:47:14John Coogan?

  That's an awesome framework.

• 2:47:15Jordi Hays?

  How much does bio, the biotech industry broadly pay attention to biohacking and citizen science? I know, I know you can't read too much into what one X account is experimenting with on any given day, whether it be Cialis, Cialis, or, or sleeping, sleeping nine hours a day. But the other one that was interesting recently was a guy, I think it was last Friday, who was let, he let like hundreds of snakes bite him.

• 2:47:44John Coogan?

  Oh, yeah.

• 2:47:45Jordi Hays?

  Over time. And so I feel like there, there, there is alpha in citizen science, but there's also, you know, 99.9% noise.

• 2:47:53John Coogan?

  You gotta take it with a grain of salt.

• 2:47:54Jordi Hays?

  Yeah. And it's also not, you know, they're not running scaled studies.

• 2:47:58John Coogan?

  You gotta take it with a spoonful of Cobra Venom.

• 2:48:02Speaker 06

  That guy's a legend. I wish I had the opportunity to shake his hand because he's definitely underappreciated. So writ large, I think the frontline biotech ecosystem are actually Fairly receptive to like using the results of citizen science because it's so hard to get data in humans that even if the data you're collecting in a human is confounded in some way, yes, this person didn't do a perfect controlled trial, et cetera. It can still be better than having no data at all. So I think the two qualifications on this and maybe the examples you gave are good ones. One is when you've got a very small trial, like a single person, but you've got a huge effect size, like this guy who's immune to like basically every snake bite. That is such crazy outlier biology that I think that wakes people up to, okay, there's something to learn here. And the other is when you actually have this replicated,

• 2:48:46Speaker 06

  maybe unintentionally. So a good example, I think you alluded to earlier is the GLP-1s and sort of alcohol use, where this wasn't something that the companies were exploring, Eli Lilly or Novo. It's something that started getting reported anecdotally from patients. Hey, I just like, don't want to drink anymore. And so the amount of drinking I've done has gone down a lot. And so that was in a way, a type of citizen science, people recording, reporting on their own behavior. And now those are actually going through clinical trials in a more formal process. And so in the, the industry, people call this reverse translation. It often has a lot of fancy words dressed up on it. But the basic idea being that the place we can learn the most biology in humans is in humans and we should try and treat every piece of data we have preciously. I think most people would appreciate. Um, there's probably not as much active work trying to collect this sort of citizen

• 2:49:30Speaker 06

  science data as there could be, but I think there are a few strong examples where it's really changed drug discovery.

• 2:49:36Jordi Hays?

  No, this was fantastic.

• 2:49:38John Coogan?

  This is fantastic.

• 2:49:38Jordi Hays?

  I really enjoyed the conversation.

• 2:49:40John Coogan?

  I, I, I do want to let you kind of give an overview of the company. Like, I imagine you're hiring, what type of roles are you hiring for? What's next on the agenda for New Limit?

• 2:49:50Speaker 06

  Yeah, absolutely. So over the next few years, part of the use of proceeds here is actually to take these prototype medicines we have today and move those into the clinic, actually take them to patients for the first time. And so we're hiring across the board, really for drug developers and therapeutic area leaders to help run some of our therapeutic programs, for scientists who are skilled in functional genomics, and on the computational side, we have a growing ML team. And for those sorts of individuals who might be excited about AI and bio, the carrot we can offer is we have some very differentiated data. We have the largest data set of this kind by hundreds of fold. You really need to get to this scale before you can train meaningful models. And we think New Limit is one of the few places you can go and, and expend your valuable talents where the predictions of your models are actually going to get tested in a real laboratory fairly soon. So

• 2:50:34Speaker 06

  you've got real contact with the universe. You're not too far from the medal. Um, so would love to, to be in touch with anyone who's interested in any of those verticals.

• 2:50:41John Coogan?

  Amazing. Well, thank you so much for taking the time.

• 2:50:44Jordi Hays?

  Thank you for doing this work.

• 2:50:47John Coogan?

  Thank you for saving my life in the future.

• 2:50:49Jordi Hays?

  Because we're already making, you know, our, our sons are about, you know, under five and we're making succession plans with them in about 30 years, they'll be taking over the microphones. But if we could get another, you know, 30 years at a new limit, that would be ideal. So.

• 2:51:06Speaker 06

  The world needs parallelized Technology Brothers podcast. It's required. So we'll try and do our best to make that happen. Thanks.

• 2:51:12Jordi Hays?

  Great talking, Jacob. Congrats to you and the team.

• 2:51:14John Coogan?

  We'll talk to you later. Thank you so much. Bye. Uh, let's run through some posts and get out of here. Uh, thank you to Brian Villa, who went ahead and started a list for, uh, following everyone that has ever been on TVPN. I thought this was really cool. Working through the TPPN feed slowly to add all the guests they've ever had. Uh, he said, give me a few days so you can go follow this list. Uh, we'll quote post it. Um, but, uh, we were thinking about doing this and he's just doing it for us. So thank you. Citizen journalism there. Citizen podcasting.

• 2:51:46Jordi Hays?

  Jurnoism.

• 2:51:46John Coogan?

  Journalism. We think of ourselves as corporate podcasters, but, uh, corporate media, but it takes a village.

• 2:51:52Jordi Hays?

  Thank you, Brian. Very cool. I'm going to go follow the list.

• 2:51:54John Coogan?

  Also Eric Dungen says, I swear TVPN has me wearing a nice watch and buying DuPont registry at the airport. If I start wearing a suit, then they've won. Oh, it's great.

• 2:52:03Jordi Hays?

  He's cracking open the.

• 2:52:04John Coogan?

  And he's got the wedding ring on. You know, he's a family man. You love to see it.

• 2:52:07Jordi Hays?

  There we go.

• 2:52:08John Coogan?

  I can't clock what watch that is, but it looks fantastic.

• 2:52:10Jordi Hays?

  Eric's a day one fan. Uh, great having you as a Technology Brother.

• 2:52:15John Coogan?

  And it's nice to have a, have a watch on. Uh, it looks great. And DuPont registry, I'm a big fan. I follow them on X pretty much every day. I'm always tagging my friends in it. This is a good option for you.

• 2:52:25Jordi Hays?

  Yeah.

• 2:52:26John Coogan?

  Anyway, uh, we saw Greg Brockman at the, uh, Met Gala, which we talked about. This was a fun one. Uh, Brex had just launched a podcast with the, with the CEO of Deal. And I feel like they must've recorded this before all the drama and then they just decided to release it once things had kind of cooled down. But, uh, anyway, I invited Alex from Deal on the show. He got back to me and said, he can't come on right now. Obviously things are a little chaotic, but, uh, we would love to have him. Uh, there's a bunch of interesting questions. I want to know about the business. I also want to know about the drama. And it's a live show, so we won't edit you, Alex, if you come on the show. We can't. You can, you can deliver whatever message you want. Always interested.

• 2:53:05Jordi Hays?

  Yeah, this was certainly.

• 2:53:07John Coogan?

  It would be a great comeback story.

• 2:53:07Jordi Hays?

  Certainly a dramatic way to launch a podcast.

• 2:53:10John Coogan?

  It is a crazy episode one.

• 2:53:13Jordi Hays?

  Yeah.

• 2:53:13John Coogan?

  Like of all the people, like this is, this is who people want to hear about. I wouldn't be surprised if this is a really, really popular episode.

• 2:53:19Jordi Hays?

  Yeah.

• 2:53:19John Coogan?

  Although it seems like it's more focused on the run rate, the scale, the employees, the business. But hadn't really heard much from Alex before all the, all the drama. But interested to hear about him now, you know?

• 2:53:33Jordi Hays?

  Yeah.

• 2:53:33John Coogan?

  Anyway, Schwedder says, never underestimate the power of one good tweet. Rourke's founders were $15,000 in credit card debt. Been there and sleeping on a friend's mattress when Matt's post went viral. 15 minutes later, Austin Allred wired 100K. By the end of the day, they closed 350K.

• 2:53:48Jordi Hays?

  The conviction.

• 2:53:49John Coogan?

  2.8 million dollar seed round led by A16Z.

• 2:53:52Jordi Hays?

  Conviction is crazy.

• 2:53:53John Coogan?

  And Matt says, my jaw dropped. Rourke lets you create entire iOS apps just by describing them. Zero code required. This changes everything for app development. Rourke blows Bolt out of the water. And yes, I invested immediately after trying it. Watch this, it's crazy. What a great viral marketing. I mean, this really does seem like just part of the standard playbook of launching a seed stage company at this point is like, figure out a way to go viral and just fill up that first, you know, batch of customers to test on.

• 2:54:22Jordi Hays?

  Yeah.

• 2:54:22John Coogan?

  Might not be a sustainable growth mechanism.

• 2:54:25Jordi Hays?

  It's almost getting to the point where if people, people will judge you as a founder, CEO, if you can't nail a sales call, right? It's extremely bearish.

• 2:54:35John Coogan?

  Totally.

• 2:54:36Jordi Hays?

  Even if you're not, every, every founder should figure out how to sell the product, right? Cause you have to sell employees, partners, investors, you know, the list goes on. Being able to manufacture virality, just figuring out how to go viral.

• 2:54:52John Coogan?

  Yep.

• 2:54:52Jordi Hays?

  Is, is getting to the point where it's going to be required in the same way that just being able to nail a sales call is, right?

• 2:55:02John Coogan?

  Yep.

• 2:55:04Jordi Hays?

  So.

• 2:55:05John Coogan?

  100%. Well, speaking of that watch we saw earlier, if you're looking for a new watch, you want to join the ranks of our listeners with fantastic watches, head over to getbezel.com. Your Bezel concierge is available to now to source any watch on the planet. Seriously, any watch.

• 2:55:20Jordi Hays?

  Head over there.

• 2:55:22John Coogan?

  Keon at Nucleus Genomics, friend of the show, is over at the Ramp office, another friend of the show, doing a little collab. All Ramp employees can use their wellness benefit to get the world's most advanced DNA health test. He'll be at Ramp's office for lunchtime.

• 2:55:34Jordi Hays?

  Love how he's just setting up a little stand.

• 2:55:35John Coogan?

  Selling to Ramp employees. I love it. A pretty nicely designed little partnership.

• 2:55:41Jordi Hays?

  A little graphic there.

• 2:55:41John Coogan?

  I thought that was cool. So, congrats to him on that. Michael Dempsey says, "Okay, maybe the best venture swag of all time from Hootie R." And I, it has a badge here that says, "What? Hasho Capital Fund LP. What do you think of this? You're the merch guy. You have put together some fantastic merch drops."

• 2:56:00Jordi Hays?

  I like it. I like it. I like the pockets.

• 2:56:01John Coogan?

  I think it's a different look. You get a lot of t-shirts and, you know, t-shirts are great, but, you know, they do get played out. This is interesting fabric.

• 2:56:08Jordi Hays?

  Very nice.

• 2:56:09John Coogan?

  Something a little different. It's, I think, didn't Bain Capital get in trouble for doing the Carhartt? And it was like a little bit too LARP-y, stolen dollar. This feels like it evokes like the workman. You could do some work in this, but it's not trying to be like perfectly aligned with another, you know, cohort of individuals. And so it's just kind of its own thing. I thought it was cool. So, congrats to those. And we'll close with this post from Paula over at XAI says, "Who..."

• 2:56:34Jordi Hays?

  Recently joined X.

• 2:56:35John Coogan?

  Yeah.

• 2:56:36Jordi Hays?

  Dramatic move.

• 2:56:36John Coogan?

  Congratulations, Paula Rambles. So, who's building the app at the intersection of AI and astrology? I actually told Sean over at My First Million, when I went on over a year ago, that this was a prime area for LLMs because there's something called the Barnum effect.

• 2:56:55Jordi Hays?

  Yes.

• 2:56:55John Coogan?

  P.T. Barnum. So, the Barnum effect is essentially, there are a set of phrases that you can say to someone that sound hyper-specific, but in fact apply to everyone. So, an example would be like, "You have a complicated relationship with your family." Sounds like I know you, but really, everyone kind of has a complicated relationship with their family in some one way or another.

• 2:57:16Jordi Hays?

  Yeah.

• 2:57:16John Coogan?

  Or you think you're meant for more. Sounds really specific, but really, everyone thinks that they could do more. You know, everyone has these aspirations.

• 2:57:24Jordi Hays?

  What's your, uh, what's your astrological sign, John?

• 2:57:28John Coogan?

  A Taurus. Bull.

• 2:57:30Jordi Hays?

  Okay, I'm asking you, oh three. My

• 2:57:32John Coogan?

  Yeah.

• 2:57:33Jordi Hays?

  Business partner is a Taurus. How should I communicate?

• 2:57:39John Coogan?

  How should I backstab?

• 2:57:40Jordi Hays?

  Today?

• 2:57:43John Coogan?

  But yes, I, I think that, I think that astrology and AI go hand in hand in the sense that you can, you can download this app and with only knowing a little bit, you can start producing really, really tailored responses that feel very specific to the individual. Create this, uh, and even if you're just regurgitating, regurgitating generic life coaching advice, everyone needs to hear, uh, you got this, you know, you can do it. Your astrological sign says that it's fortune cookie, you know?

• 2:58:12Jordi Hays?

  Yeah, I mean, the, the thing here is I think there's an opportunity to build a thin, a relatively thin wrapper on top of whatever your preferred model is.

• 2:58:23John Coogan?

  Yep.

• 2:58:23Jordi Hays?

  I believe that many people will just use their preferred LLM for a lot of this stuff.

• 2:58:34John Coogan?

  Yep, totally.

• 2:58:34Jordi Hays?

  Like I just asked oh three.

• 2:58:36John Coogan?

  You might not need to go get a separate app, but at the same time, if you're, if you design the app with the right aesthetics, right functionality, you do the right customer acquisition on, on Facebook and then you get in the app purchase, the subscription, like.

• 2:58:48Jordi Hays?

  I think a lot of the astrology apps that have raised venture have actually done very well. Uh, so here's my dues for communication with John today, what to do. Open with appreciation. Hey, John, you know, I think you did a really great job on the podcast today. Everything from the prep to your zingers to your interview questions were fantastic, but we gotta talk after the show.

• 2:59:12Jordi Hays?

  Present, no, no, no, present concrete tangible data, you know, John, the number of times you said, hit the soundboard, you know, it, it meant a lot to me.

• 2:59:21John Coogan?

  Oh.

• 2:59:21Jordi Hays?

  So thank you for that.

• 2:59:22John Coogan?

  You're welcome, Jordy.

• 2:59:22Jordi Hays?

  Frame ideas as we projects, you know, John, the prep you did for the show today, I think we did a great job.

• 2:59:30Jordi Hays?

  Common. And again, I think this is like, the, the, the challenge here is, this is like, probably very general advice.

• 2:59:38John Coogan?

  But it can all work out. If you're into, who knows, if you're into astrology, go check it out. Go, go let us know.

• 2:59:44Jordi Hays?

  Funny, it says here, no rush deadlines. But you're actually very good with deadlines.

• 2:59:49John Coogan?

  I love deadlines. Oh, we have to go live in 30 minutes and we don't have prep? Done.

• 2:59:52Jordi Hays?

  Done.

• 2:59:52John Coogan?

  No problem.

• 2:59:53Jordi Hays?

  Done. You're the kid who waits until the last 30 minutes to do your homework.

• 2:59:57John Coogan?

  Do your homework same day in the hallway before you go into the class. Anyway, uh, thank you to Ramp, Polymarket, Public, Numeral, Adquick, Eight Sleep, Wander, Bezel, Linear, Figma, and Vanta for supporting the team.

• 3:00:09Jordi Hays?

  The incredible partners of TBPN, more than sponsors.

• 3:00:12John Coogan?

  And we're going to be up in San Francisco with the Figma team tomorrow at.

• 3:00:16Jordi Hays?

  At Config.

• 3:00:17John Coogan?

  Config. Config.

• 3:00:19Jordi Hays?

  Config.

• 3:00:19John Coogan?

  Config Ma.

• 3:00:21Jordi Hays?

  Config.

• 3:00:23Jordi Hays?

  We're excited to be up in the Bay tomorrow if you're in SF.

• 3:00:26John Coogan?

  Yeah, if you're, if you're at, if you're at Config, let us know. Seriously, hit us up. Uh, we'd love to have you on, talk about design, talk about Figma, talk about, uh, vibe coding, vibe designing. We're going to do it all. Anyway.

• 3:00:39Jordi Hays?

  Do it all.

• 3:00:40John Coogan?

  Thank you for watching. Fantastic show. We will see you tomorrow. Have a great rest of your day.

• 3:00:44Jordi Hays?

  Can't wait.

• 3:00:45John Coogan?

  Bye.

• 3:00:45Jordi Hays?

  See ya.