Are We in an A.I. Bubble? We're About to Find Out.

“This is the first pure-play L. L. M. company to go public, to open its books so we can actually look at the underlying business of this A. I. boom.”

• 0:00Speaker 00

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• 0:34Speaker 01

  In a few weeks, we're finally going to get some answers on whether we're in an AI bubble. That's because the Frontier Lab Anthropic is going public.

• 0:41Speaker 02

  Anthropic gets ready to make its Wall Street debut as the AI giant.

• 0:45Speaker 03

  AI giant Anthropic, that's the company.

• 0:47Speaker 04

  San Francisco-based AI giant Anthropic filed papers today.

• 0:51Speaker 01

  It might raise $100 billion at a $2 trillion valuation and rescue a whole slew of companies floundering in the debt market. Or it might raise a lot less and send the entire stock market into a tailspin, which is to say, a lot is riding on this IPO. The near future of the American economy, the medium future of the tech industry, and, given that the risk factors in Anthropic's S1 include catastrophic and existential risk to humanity, maybe even the long-term future of the human race. At a minimum, the Anthropic IPO will mark the end of an era. The venture-investment-driven, hyper-cumulating startup phase of the AI century is nearing completion. But what comes next? In today's episode, we're going to try to wrap our minds around the most important

• 1:35Speaker 01

  company in the economy, at least for now, and look at what's at stake in its big moment. Are we in a boom or a bubble? Will tech's big bet on data centers work out or fizzle? And can Silicon Valley's most militant AI believers be a normal public company? Or are we entering a new era of AI hype and mysticism? I'm Max Reed. This is Hard Fork.

• 2:05Speaker 01

  We are live in studio with.

• 2:07Speaker 03

  We're not live.

• 2:09Speaker 01

  OK, that's a really good start. We are here in studio with Erin Griffith. It's so good to see you in person.

• 2:16Speaker 03

  Yeah, likewise.

• 2:17Speaker 01

  There are two big developments in the Hard Fork universe this week. First is that you finally followed me on Instagram.

• 2:24Speaker 03

  Oh, yeah.

• 2:25Speaker 01

  We can get to that later, maybe in a segment.

• 2:27Speaker 03

  Yeah, I was on the fence.

• 2:28Speaker 01

  Yeah, well, there's a lot of referendums that we're going to talk about today. I think that was an important one. The second thing I want to talk about is that Anthropic announced its intent to go public, which means the rubber is finally hitting the road after however many years it's been of hype and doomsaying and argument. You have been reporting on Anthropic and the AI world for a long time, and I wanted to sort of pick your brain about this company today because this feels like a huge inflection point for AI, for tech, for the stock market, the economy, humanity.

• 2:58Speaker 03

  Yeah, just the stakes are only that high.

• 3:01Speaker 01

  Yeah, exactly. So what is riding on this?

• 3:03Speaker 03

  I mean, everything, everything. I mean, I think that was our headline, was nearly everything. Practically speaking, this is the first pure-play, like LLM, large language model company to go public, to open its books so we can actually look at the underlying business of this AI boom that has been going on for four years and attracted trillions of dollars in investment and sort of reoriented our entire economy around itself. And Anthropic, alongside OpenAI and arguably Gemini from Google, are kind of the companies that are driving this, are like the pillars that are, you could call, I've heard many metaphors, OK, you could call them the bottom piece of the Jenga tower. I've heard them described as like the tip of a pyramid with like an entire ecosystem

• 3:48Speaker 03

  of companies supporting it. But either way, like they are sort of the quintessential AI companies. And now, for the first time, we have kind of a look at the underlying business model that so much money has gone into.

• 4:00Speaker 01

  So are the investors you're talking to, are they nervous about the IPO? Are they worried about what might come out of it?

• 4:05Speaker 03

  Well, I mean, last week, they were definitely nervous. Now, we've had a day or two to kind of look at these numbers and see, and some of them have leaked already along the way. So we had kind of a sense, but this is the first time we see, like, in a 300-plus-page document, the full picture of what Anthropic's business looks like.

• 4:23Speaker 01

  So let's go there. What are the sort of big, important things that we can take away from the S1?

• 4:29Speaker 03

  OK, well, first of all, I guess it's OK to say the business looks kind of healthy. I mean, it's arguable, there are people that have made the case that it's not, but I think, like, generally speaking, people have been kind of pleasantly surprised to see that this company is capable of making money. And, I mean, when we've seen how much money these companies have raised over the years, we've seen how much they've been spending to build their AI products, I think the general consensus has been like, these companies can never make money. And just to be clear, Anthropic posted an $80 billion net loss. So maybe let me unpack that a little bit. An $80 billion net loss seems insane, but it's actually kind of a weird accounting quirk

• 5:12Speaker 03

  where they have to count some convertible debt that they issued to some of their shareholders as a net loss, and that will essentially be cleared in the next quarter or by the time they go public. And so that's not a reflection of the health of their actual business. What we've actually seen is that they, in the first half of this year, had an operating loss of around $600 to $700 million. And that's shrinking from the same period last year where it was like over $2 billion. So they're shrinking their losses of the actual business that they're operating. On the flip side, they are still shelling out enormous sums of money, and they're on the hook for enormous sums of money to build out their AI infrastructure. So this is the data centers, the chips, the compute power, the very, very expensive

• 5:54Speaker 03

  stuff that they need to keep training new models and to support the old models. So like, it's this kind of, and Dario has talked about how the company is sometimes on a knife's edge when it's making these decisions and signing these deals. And so they have signed so many contracts in anticipation of the demand. And it's like a very high-risk game. If the demand's not there, then they're going to be sitting on all these contracts, and many of them are non-cancelable. If the demand is there and they don't have enough, then they're going to be losing business. And so that's kind of what's like underlying all of this, is like, how much AI are businesses and people going to be using? And has the company, you know, basically laid the groundwork for that?

• 6:32Speaker 01

  Right. I mean, it's interesting because, on the one hand, the S1 seems to confirm that there's an enormous amount of demand. I mean, we're talking about $16.3 billion in revenue for the first half of 2026.

• 6:41Speaker 03

  And that is an enormous amount of growth, too. Like, we're seeing a company grow 14X? I mean, that is insane, especially for a company of this size. So we've never, I mean, I hate to like say unprecedented, but it feels like we haven't seen a company growing like this ever before.

• 6:57Speaker 01

  Right. So we can say there's demand for this, right? But with the question that you're saying is, we don't actually know how much it is. And it might be that there's more even than we've already seen. It might be that there's actually less. But we're building a certain number of computers, I mean, to be very simple about it, no matter what.

• 7:12Speaker 03

  We're building a computer.

• 7:13Speaker 01

  We're building a lot of computers out there in the desert, and Anthropic has committed a ton of money to those computers. And so is that the biggest risk they're facing?

• 7:21Speaker 03

  Definitely. I mean, this is, I think, what everyone's looking for. And so the S1 that we saw did not have Q3 numbers in it, and they've already kind of previewed those numbers to their investors and our reporting, and others have shown that the growth is actually slowing in the third quarter. And that's because, first half of the year, Claude Code just was growing like crazy. They basically took the entire industry by storm, and everybody's using their coding product. Now, competitors like OpenAI are starting to catch up. Companies are trying to pull back on how much they're spending on tokens because they realized that token maxing got out of control. And so the growth is a little bit slowing, and they're getting some competition from open-source models or cheaper options. And so I think in Q3, they grew 44%.

• 8:03Speaker 03

  And so that's a pretty significant slowdown from, again, gangbusters growth, down to like just, just great growth. But is that going to continue on that trajectory? In that case, OK, the growth story isn't like as exciting, and perhaps demand isn't going to be through the roof forever. So that's one question investors are looking at. And I think just in general, they're looking to see how Anthropic explains that slowdown because if Anthropic just comes in and says, like, the whole market is pulling back, that's very, very bad for this whole ecosystem, the Jenga tower or the pyramid that I'm talking about, for like, you know, all of the demand and all the investments that everybody is making, all the debt that everyone's taking out to build this stuff out. If the reason that the growth is slowing is just because of competition, because OpenAI

• 8:45Speaker 03

  or open-source companies are kind of eating market share, but the demand is still growing, then like, great, party on, the AI boom continues to boom.

• 8:54Speaker 01

  So they're looking for new avenues for growth, potentially. They're trying to sell different stories about what the next big product is.

• 9:02Speaker 03

  Yeah, and I think we're going to see this on the road show. I'll be watching that pretty closely. I think that's going to kick off in probably a week or so.

• 9:07Speaker 01

  Before you start, what is a road show?

• 9:09Speaker 03

  So in a week or so, Anthropic is going to basically go on this tour where they meet with all the public market investors and kind of tell their story. And they call that a roadshow. The bankers like kind of take them around on a little private jet and they're, you know, meeting with like insurance companies in Iowa or whatever and telling, telling them about the machine god. So that's going to be just like kind of amusing on its own. But, you know, they need to tell, I think, a new growth story because they're going to say, okay, we had this like coding product that's incredible, but like it's already kind of showing slowing down in growth. What's our next growth story? Well, they believe that AI is going to, you know, solve many, many, many problems in the world. And so one of the stories that they're pitching to investors now is this bio thing, you know, AI is going to cure cancer, like AI is going to develop new drugs. So that's like a big story they're going to probably be pitching.

• 9:54Speaker 03

  And then they have other products too, like, you know, legal tech or like other, other ways that AI is going to kind of disrupt the economy beyond just coding, which has been, again, like a blockbuster hit for them.

• 10:04Speaker 01

  Right. One thing I want to talk about with the S1 is the 93-page risk factor section. So you've read a lot of S1s before. Are they?

• 10:12Speaker 03

  Every, every word of everyone, just to be clear.

• 10:14Speaker 01

  Obviously, in your capacity as a reporter. Are they usually 90 pages long?

• 10:18Speaker 03

  I mean, they're usually pretty long and it's a lot of legalese. It's just like a lot of ass covering, basically. I mean, it's like, it's basically anticipating all the potential things that shareholders could get mad and sue over and saying, we warned you.

• 10:30Speaker 01

  Right, exactly. And there's a lot of those for Anthropic. I'm just going to read a couple of them right now.

• 10:34Speaker 03

  They're, they're very unique in their specificity, let's just say.

• 10:37Speaker 01

  Yeah, and I would say too, it's funny reading them if you've been following AI for a while, like, it's kind of like getting six years of Twitter and blog posts and Substack like compressed into like a document of legalese because they're listing everything from, you know, the resource constraints on building out compute to the various sort of AI safety problems to just sort of like your, your basic business problems with, you know, customer satisfaction. But the ones that caught my eye, for example, are concerns have been raised both within our organization and by other researchers that sufficiently advanced AI systems could, if not developed, deployed and operated with appropriate safeguards, oversight and security measures pose catastrophic or existential risks to humanity. This is a pretty rare kind of thing to do.

• 11:21Speaker 01

  Another one that I was really, it was really fast.

• 11:23Speaker 03

  But wait, can we just go back to that really quick, though? Because one thing that the great Matt Levine at Bloomberg pointed out was that this is written in passive voice. It's not Anthropic saying, we think

• 11:33Speaker 01

  Right.

• 11:34Speaker 03

  that our products, it says like, some people may be saying.

• 11:38Speaker 01

  Within our organization, some people, I don't know if it's our founder and president, Dario Amadei or anybody, but some people have raised this question.

• 11:45Speaker 03

  Who could it be?

• 11:46Speaker 01

  Yeah. Another one that I, I like is, in addition, considerations relating to model safety, interpretability, alignment and welfare may lead us to limit or delay the deprecation of older models. So just to translate that a little bit, when they're talking about model welfare, that's they think the models might be alive and they're not ever going to shut down some of the product lines because they want to make sure that they get taken care of.

• 12:07Speaker 03

  What? I missed this one.

• 12:09Speaker 01

  Yeah, I, I have to credit Joe Weisenthal at Bloomberg for picking this one up. They're not, they're not saying this out loud, but they're saying considerations relating to welfare may lead us to limit or delay the deprecation of older models. This is a little like Apple saying the iPhone 12 is alive, so we're just going to keep making it forever or something like that.

• 12:25Speaker 03

  Imagine trying to explain that to some, like, you know, analyst at Goldman Sachs and be like, we need to put this in here.

• 12:32Speaker 01

  I mean, the thing that I wonder about a lot is how much people who are spending their time talking to chatbots all day start to buy into and belong to this stuff. And so you actually will have activist investors who are saying, you know, we have to make sure that we're taking care of model welfare and whatever else. This is a future coming soon.

• 12:48Speaker 03

  Well, the activist investors won't have a whole lot of ability to do much because of the governance of the company.

• 12:55Speaker 01

  Yes, let's, I actually want to get into this. Well, but let's start, before we get there, let's start with just a quick word about the founders because this is a company that has a really specific philosophy around AI risk and AI safety that's sort of at the core, not just at the core of the business, but it's kind of their origin story. I'm sure a lot of people familiar, but will you just give us the 22nd version of where Anthropic comes from?

• 13:14Speaker 03

  Sure. And this is kind of the story of AI also, you know, Google's working on AI, Elon Musk and Sam Altman see it and they're like, man, I don't think they care enough about the future of humanity. So they start, split off and start OpenAI and they're like, we're going to build AI, but we're going to do it for the good of humanity. We're the principled ones. And then within OpenAI, Dario and all of his friends are looking around and saying, wait, Sam doesn't care enough about the future of humanity. We need to build the safe AI before they can. So they split off and do that. And that has like kind of continued on down the line. So that's where Anthropic is. Their roots are truly in like AI safety and they are the probably most extreme on that spectrum of like their fears inside the company, at the top of the company and, you know, around it.

• 13:58Speaker 01

  Well, let's talk about how this relates to governance because they have this very unique governance structure.

• 14:03Speaker 03

  I'm like losing my voice now and hopefully they can use some AI to like make my voice sound less gravelly. Yeah, so Anthropic is kind of following a trend that has been happening for the last 15 years at tech companies, which is that founders want to retain control even while selling shares, which would in general, you know, the classic form of governance means that if you sell shares, those shareholders get more control. This started kind of goes back to Mark Zuckerberg and his multiple class of shares, but Anthropic has taken it even a little bit further. They have five classes of stock. Their seven founders have 50.1% voting share.

• 14:44Speaker 03

  You know, they're going to be in charge of electing all the directors to the board. And then they also have this like independent trust that controls a majority of the board seats. And so it's like a little bit convoluted and I think it's, no one's going to push back on this because over the years, every time startups have tried to do this, investors have made a big stink about it, like, oh no, we hate this. And then they just go along with it anyways. And so like, it hasn't, yeah, there has, there has not been a line in the sand. Even with SpaceX, they were a little bit more extreme about that. Some of the exchange or some of the indexes tried to put their foot down and then at the end of the day, they're just like, ah, fine.

• 15:19Speaker 01

  So this is not necessarily new in Silicon Valley, but it is for Anthropic, seems to be distinctly sort of connected to the AI safety philosophy at the heart. Which we should say, I'm not sure if we said it out loud, but like really specifically, Anthropic is the company that believes most strongly in the possibility of total AI annihilation, Armageddon, and additionally believes most strongly in the possibility that the LLMs are alive or conscious or sentient in some way.

• 15:43Speaker 03

  And they lay out that they believe their founders are best suited to sort of shepherd this into the world in a way that, you know, is, is a little self-aggrandizing. When I was reading it, I was like, wow, you guys are special. And I guess you are because you're at the helm of a potentially $2 trillion company. But, you know, they, they are even able to like name their successors. They have a secret list of successors that they all have to approve if like somebody leaves the board. And so they're setting this up to be in control of it forever. They don't want to lose control of the AI or of the company.

• 16:14Speaker 01

  Yeah. I want to return to the philosophy, the sort of question of the philosophy, because one of the questions I have about Anthropic is, you know, beyond this governance structure here, to what extent is there, are there philosophical commitments around AI safety? Like, how do they inform the company itself or inform the business decisions? Or do they?

• 16:33Speaker 03

  Well, I think in the beginning, it was a huge piece of the company because it was the only place where they could get money. Regular Silicon Valley investors were kind of viewed the company as a science project for the first couple of years and the only place that they could find money was from people like Sam Bankman-Fried, Yon Talan, people who were like deeply enmeshed in the, in the EA kind of philosophy in that world. And then their first product was very specifically and purposefully like an enterprise business product. They weren't building something for consumers. They weren't trying to build an AI companion necessarily. And that has proven to be an incredible business. And then when, when the VCs got word of that, they were like, oh, great, like let's dump all the money in. And most of those VCs that came in later are looking at this as an enterprise, you

• 17:17Speaker 03

  know, software, SaaS business. And they're not really that hung up on the philosophy. They're like, yeah, we like that we're back in the good guys, the good guys. But they, they don't really like buy into this, like sort of the stuff that's a little bit more weird about.

• 17:32Speaker 01

  The woo-woo stuff.

• 17:33Speaker 03

  They don't, yeah, they don't, I mean, is there a word for like AI woo-woo?

• 17:36Speaker 01

  No, I don't think there is, really.

• 17:38Speaker 03

  We should come up with one. We should, we should point it out. It could be like a hard fork signature.

• 17:41Speaker 01

  Yeah, exactly. I mean, it's very interesting because you could look at all the decisions that they've made from the governance structure on down to like the specific things that they're doing. And you could tell a story where it's all about their philosophy. It's all about their fear of AI or their belief in AI. But you can also tell a story that this is just a very straightforward, smart Silicon Valley company that wants, founders want to retain control. It wants to be very efficient, wants to clear path to profitability through, you know, enterprise sales and not trying to become the next Facebook or whatever. And it seems like investors, they don't.

• 18:09Speaker 03

  Certainly what the investors that I talk to say, like, I remember like when, when Jacob Cox quit and then everyone was kind of freaking out about like AI is going to kill us all and mentioning this to some of their investors and then sort of being like, oh yeah, you know, hacking, that's a big risk. We're definitely worried about cybersecurity, but like, I don't really know what you're talking about on the other side. Like, we're not worried about that.

• 18:28Speaker 01

  Let's zoom out a little bit. So, you know, this feels, as we were saying before, like an inflection point. Like we've spent the last half decade in this, in this big time hype moment, VCs, executives, researchers are selling this crazy story of a technology that's going to change everything. Now we have a big document with a lot of real numbers in it and pretty soon we're going to know what the stock price of Anthropic is. So how would you characterize this? What is happening right now with the IPO? What questions are being asked and what questions are being answered?

• 18:56Speaker 03

  I mean, it is sort of like a demystifying moment because we have, you know, seen these companies in the private market get these trillion dollar valuations in such a short time. And it's kind of being set by like a handful of VCs, right? And so like, yes, VCs believe in the, in this company, but they also believed in the metaverse and like a lot of crypto stuff and that has not worked out. And so this will be the first time that we have like Wall Street and public market investors and, you know, pension fund investors, all, all the professional money managers like modeling out the financials of this company and deciding whether it's worth investing at a true $2 trillion valuation or maybe 1.5 trillion. And so that's part of it is like, we're actually going to see like some, some real evaluation of, of the company.

• 19:39Speaker 03

  Although I guess you could also argue that Wall Street sometimes invests on hype and momentum too, as we have seen from many stocks. So like, who knows? But in general, this is like a time when we're finally getting like to look inside the business that's underlying the AI boom and decide whether or not it is, you know, a valuable contributor to our economy because there are a lot of people out there that, that think it's not.

• 20:00Speaker 01

  Yeah. So what are you looking for in the weeks after the IPO?

• 20:04Speaker 03

  Um, whether or not AI kills us all.

• 20:08Speaker 03

  Big question still on everyone's mind. You know, I doubt that that's going to be talked about too much on the road show. I mean, I'm sure that there are some advisors at Goldman and Morgan Stanley who have been telling Dario, like, let's reel it back on the old extinction talk.

• 20:24Speaker 01

  I mean, should I invest in a company that has a 10% chance of killing everybody?

• 20:29Speaker 03

  I mean, it's in the risk factor, so you can't say they didn't warn you.

• 20:33Speaker 01

  There was a Wall Street Journal headline arguing, the headline is "The Bull Case for AI Armageddon." For investors mulling-

• 20:40Speaker 03

  The bull case.

• 20:41Speaker 01

  Exactly.

• 20:41Speaker 03

  The bull case.

• 20:42Speaker 01

  "For investors mulling the Anthropic share offering a 10% chance of extinction may be a 90% win for your portfolio." How can you argue with that, really? If you're going to die, you're going to die, but if you can-

• 20:52Speaker 03

  Die rich.

• 20:53Speaker 01

  Yeah, exactly. Aaron, thank you for coming into the studio and talking to you at Anthropic. We're going to take a break and then we'll be back with Mike Isaac and Jasmine Sun to talk about the rest of the week's news in tech.

• 21:31Speaker 00

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• 23:11Speaker 01

  We're back with Aaron Griffith and joined by tech writers Mike Isaac and Jasmine Sun. Mike and Jasmine, we were just talking about the Anthropic S1. Mike, what was your big takeaway from the filing?

• 23:23Speaker 07

  I thought it was like way front-loaded with rosier sort of paintings of AI at the top compared to the past, you know? Like, you guys tell me, but I feel like Dario Amadei is painted as like the biggest like doom and gloom guy of AI in the valley. And my perception was everyone around him was like, hey, you need to like pump the brakes on this a little bit, especially as we're getting the average person or trying to get the average person excited about it. So like the whole top was like, hey, by the way, we do want to cure cancer. We do want to like create these amazing drugs. And then like they back into, oh, and has like a, you know, 10% chance of blowing up the entire world, basically. But I don't know.

• 24:08Speaker 07

  Someone told me to jazz hands a little bit at the top, right?

• 24:11Speaker 01

  Yeah, I mean, how much do you think it was like worked over? Like, I was interested that the adjective they use at the very top is, he says, "We believe that AI is one of the most consequential technologies in human history," which is a very funny, neutral adjective, right? Consequential goes a lot of ways and it's not necessarily how I would be selling my product.

• 24:28Speaker 07

  We should do like a real close reading of all the language in this because I do feel like Dario is like definitely a micromanaging, control, control enthusiast, let's say. And like every word probably has a few different nested meanings in there for sure.

• 24:45Speaker 01

  Jasmine, what was your big takeaway from the S1, if you had one?

• 24:48Speaker 02

  Yeah, I mean, kind of similar to what Mike said. I was just thinking about how Anthropic has a very odd relationship to money and being a for-profit company. Like the founders, when they broke off from OpenAI, they spent a bunch of time debating whether they should be a nonprofit or a for-profit. Of course, they have invented some crazy multi-layered governance structure, as they all do, which is something they reinforced a lot in the letter that the founders have pledged 80% of their equity to charity, that employees have all this interesting matching. There's a famous CultureFitt interview that all of the Anthropic employees go through where they say, hey, would you work here if your equity went to zero? And they make sure that everybody says yes before they accept the job. And so mostly it just made me think about how weird they are about like the status

• 25:32Speaker 02

  of being a sort of profit-seeking corporation.

• 25:35Speaker 01

  I know, I can only imagine what the meetings with the bankers were like, you know? I mean, I assume the meetings with the investors are very similar.

• 25:40Speaker 07

  How do you tell a labor union that we're going to be post-money in like three, four years? I think that's hard, so.

• 25:48Speaker 01

  This is coming, by the way, like in the midst of a little bit of anxiety and let's call it a jittery moment in the market. The elections are next week and I really want to talk to you guys about what we're looking at and what we're waiting to see. Jasmine, what are you tracking for the midterms next week?

• 26:06Speaker 02

  Yeah, I mean, these are interesting midterms because I think it's the first election where people's feelings about AI, about data centers could plausibly have shown up. I mean, I think the top level on it is, even though we saw a lot of discourse, a lot of anger about data centers in particular, that's been building up over the last year. I did some reporting on it over the summer in Wisconsin and Michigan, two states where data centers were actually a really big factor in the primaries. In the majority of states, I don't think they are yet shifting people's votes. They're an extremely, they're an 80/20 issue in the sense that people feel very negatively about data centers. People feel very negatively about AI. This is bipartisan. And in that sense, it seems like a unicorn. But it's also not something that is quite salient yet.

• 26:47Speaker 02

  I've looked at, you know, a million polls and AI usually ranks like 22 out of 39 issues.

• 26:53Speaker 03

  Oh, my God.

• 26:55Speaker 02

  It's like even in states like Ohio or Pennsylvania where data centers are a big issue, I think it's usually something like between 1% or 5% of voters will list it as their number one thing. And so while we're seeing data centers really impact like your mayoral election, like we're seeing recall campaigns, city council reshuffles, I don't think like a big senate race is going to be determined by data center sentiments.

• 27:16Speaker 01

  Right. It's like, I mean, this came across in the reporting you were doing, that this is really a municipal issue and it's going to get a lot of town managers voted out and council board selectmen or whatever else. But it's interesting because this was, at least in the summer, it felt like this was a focus of some senate campaigns. Some senate campaigns were in fact putting a lot of resources into being anti-data center. Do you think that was wasted money or is it just not ultimately the issue that matters?

• 27:39Speaker 02

  I mean, I think it really depends. I think there are races where there's, they're close enough and rural voters in particular, you can get a lot of normal rural Republicans or low turnout voters to maybe turn out if there's a data center in their backyard. I think the races that people are really concerned about, Sherrod Brown in Ohio might stage a comeback in particular because of data centers. Or a big motivation for Greg Abbott to restrict approvals and connections to the electricity grid, even though he's been very, very pro-build. He's been welcoming the data centers for years, but because of a potential threat from both his Democratic opponent, plus all of these rural Texan farmers who are like, what's up with these power lines and data centers? He actually did a pseudo-moratorium, which because he was worried about the midterms.

• 28:24Speaker 02

  So, you know, I think there are a few elections in purplish states where data centers could swing things. But the other thing I'm tracking is like, data centers are very concrete, whereas AI generally is still feels so abstract to people that I'm not really sure if like data centers are barely swinging some elections. I'm not sure that like AI in general is going to be a voting issue yet, even though some people suspect it.

• 28:49Speaker 01

  Yeah, I mean, it's a very funny, you know, as you say, if you're on Twitter or if you're, if you're like reading too much about this, it does feel like a life or death issue. Certainly it is for some people. Some people writing, you know, introductory letters to S1s. But it hasn't, as you say, it hasn't really trickled down, except in a sort of indirect way through the effect on the economy of AI. Mike, what about you? Are you tracking anything on the election next week?

• 29:11Speaker 07

  You talked about this in last week's episode a little bit with the head of policy at Meta leaving and sort of imagining which new regime of like, you know, Democratic operatives they might replace them with. But I just want to see if there's a wipeout. No, of course, I am a loyal Hard Fork listener.

• 29:28Speaker 01

  That's right. That's what we like to hear. We've got one. You've got one. Let's get to two by the end of next week.

• 29:34Speaker 07

  I'll get my wife to listen. I do, I do, I really, really want to see the theater of all the tech companies that have been trying to cater to Republicans suddenly be like, actually, we love the new Democratic, potentially Democratic regime in all of these states. And because they have a hold on, again, potentially have a hold on Congress, this is what we really believe in, you know? And I think these swings are valuable because it sort of shows, you know, these are corporations that don't necessarily believe in anything except self-preservation a lot of the time.

• 30:07Speaker 01

  Yeah, I mean, what do you, are you seeing any indications besides, say, so we're talking about Joel Kaplan, who is the head of policy at Facebook. For 15 years, he's been a sort of conservative whisperer. He announced his departure last week. Are you seeing any other kind of movements that suggest a little bit of, I don't know what, I don't know how to put it, team switching or sort of, you know, trying to, trying to make inroads among, you know, among Democrats?

• 30:27Speaker 07

  I think all of the companies are looking hard at their, their DC teams and saying, who do we need to sort of elevate and put out front? They're never going to like cut all of their conservative sort of, you know, relations people or whatever. But it's sort of like, actually, look at this guy, the guy who wears a blue pen instead of a red one or whatever. That's like, that is, that's all the companies and like, that's just the game. I guess I shouldn't be so cynical, but it is worth looking at and seeing.

• 30:57Speaker 01

  Why wouldn't you be cynical? This seems like exactly the right thing to be cynical about. And do you feel like there's a shift? I mean, I think we all are aware of what felt like, I'm sorry to use such immaterial language here, a vibe shift in Silicon Valley a few years ago.

• 31:12Speaker 07

  Vibes are important, buddy.

• 31:13Speaker 01

  Is there a vibe shift swinging back? I'm interested if any of you feel like that might happen? Or is it, is this, was that, was the first vibe shift in illusion?

• 31:21Speaker 03

  I mean, I've seen headlines to that effect, but I think, like Mike said, it's going to be a little bit more on the DC side of things because, I mean, just from my perspective, a lot of the VCs were really excited to be able to not care about stuff like that Democrats care about, like DEI. Culturally, it seems like we're kind of going to be still in that vibe.

• 31:45Speaker 01

  Yeah, it doesn't seem like that's changed. Jasmine, we were talking before we were taping about like a sense that there's a question about how Republicans are going to react to this. They're likely to lose the House of Representatives. There's going to have to be a shift in how they approach AI regulation in Silicon Valley.

• 32:00Speaker 02

  Totally, yeah. I mean, this is one of the big open questions I have about the 2028 primary, too. I mean, primary season is going to start basically two weeks from now. And are J.D. Vance and Marco Rubio going to break from Donald Trump's extremely, extremely unpopular positions on AI regulation and data centers, right? Like, in spite of the vast, like, the majority of Republican voters do want to regulate AI. They would prefer slower with more safeguards versus some kind of abstract and material beat China narrative. And yet, basically, every Republican in Congress or every Republican leader has been unable to say any of that because the president sort of sets what the party line is.

• 32:42Speaker 02

  And if the Republicans think of beating in the midterms, I could imagine some more folks deciding to break off and say, like, actually, like, our constituents are angry at data centers, they're worried about kids' safety if they're social conservatives. But I am starting to see a bit of a split in the Republican Party between the more traditional libertarian, free-market, letter rip types who are still very excited about deregulation versus some of the more new right folks. I was, I spent the weekend with some folks from American Compass, the new right think tank, and they are all thinking, actually, maybe after the midterms, this is a time for the Republican Party to get serious about AI regulation on kids, jobs, safety, things like that.

• 33:24Speaker 01

  Were they saying AI or were they saying SI?

• 33:26Speaker 02

  It was actually really funny. It was a chat in House workshop, but there's a split in the room, and then you could tell there's a bit of internal tension between the folks from the admin and other places who were saying SI and the folks who were a little bit too staunchly, like, we're not caving to that. So it was really funny.

• 33:44Speaker 03

  I've never seen a better metaphor for like, people talking over each other and like, not being able to communicate than like, not even being able to agree on what we're calling this thing.

• 33:54Speaker 02

  It was kind of amazing.

• 33:55Speaker 01

  Yeah. So one of the issues on the ballot next Tuesday is this tax in California on billionaires. Aaron, can you explain what the proposition is, what the measure is? And why? I mean, I think we can all guess, but why are Silicon Valley so interested in this tax on billionaires?

• 34:13Speaker 03

  Yeah. I mean, it's been actually pretty fascinating. Prop 40 is a proposed one-time 5% billionaire tax on wealth, including unrealized gains. You know, that means like, you know, private startup stock for billionaires in California. And as you can imagine, the billionaires are a little bit mad about it. And so what better way to fight back than to use their vast wealth? And so they've gathered, this group that we reported on, Building a Better California, has gathered $333 million, which is so, so, so much to fight a state proposition, mostly from, you know, Sergey Brin, but then he brought in John Doerr and Patrick Collison, the founder of Stripe.

• 34:56Speaker 03

  John Doerr is a very famous VC investor from Kleiner Perkins. And so, and they have then, over the last couple of months, recruited this like, kind of who's who of Silicon Valley, like, very high-powered, famous VCs, founders, many of whom are not even billionaires. There's some like, mere 100 millionaires.

• 35:16Speaker 02

  Temporarily embarrassed billionaires.

• 35:17Speaker 03

  Yeah, right? Yeah, and, you know, aspiring billionaires. But they are, they're mad about this for a number of reasons. You know, they think it's poorly written, that they don't believe that it's going to be a one-time tax. They don't like how the money's actually gonna, like, the money's not, you know, specifically earmarked well enough to do the things that they say they're going to do and they don't trust, they basically just don't trust the politicians to do the right thing with it. And so they're really mad about it, and they don't like the precedent in a sense because California is kind of known for, you know, as being a trendsetter. And so they're worried that it's going to turn into this cat and mouse game where other states are going to do it, and because a lot of them have already left the state. But they're mad about essentially the principle of it.

• 35:57Speaker 07

  The principle of the matter.

• 35:58Speaker 03

  Yes. Yeah, they believe that, you know, this is going to hinder aspiring billionaires, founders, builders, from moving to California and wanting to, you know, get rich. And so I think, you know, there's a lot of reasons that they're fighting it, and they're all kind of like banding together and getting on these weekly calls and like, talking about their strategy. And like, one of the really interesting things that we found in our reporting was like, they are aware of how it looks. They, there was this quote in one of the documents that they're circulating to other donors that says, billionaires are seen as having a net negative impact across issues. So they're not trying to be the face of this. They don't want to be out front.

• 36:41Speaker 03

  They're not like, you know, talking publicly about this like they might if there was some other, like, you know, any issue, like, including data centers. They are trying to go through other groups that they're partnering with, like, Planned Parenthood is a really big one that they're working with to kind of, that's opposed to it.

• 36:59Speaker 01

  Why, sorry, why is Planned Parenthood opposed to it?

• 37:01Speaker 03

  I mean, for some of the same reasons. It's not sustainable. This one-time tax thing is like, supposed to make up for some of the Trump administration cuts. And they don't believe that it's, you know, it's not setting them up in a position to like, be sustainable going forward. So they just think it's poorly written. I think a lot of the people that are opposed to it are not opposed to the idea of a wealth tax, including actually some people that I spoke with for this story. They, they just think this is a crappy one, and they wish that it was better, like, that it was just structured better and made more sense.

• 37:34Speaker 07

  But do you feel like they're always going to say that? I feel like it's always a, well, this bill is poorly written, and if they could only legislate it better. I just feel like I've heard that from Andreessen or whoever a million times, you know what I'm saying?

• 37:47Speaker 03

  Totally. It's, I mean, it's almost sort of like respectability politics, where it's like, I like, I agree with your message, but I don't like how you're doing it.

• 37:53Speaker 01

  Yeah. I was interested to learn that about Planned Parenthood, though, because I hadn't, I hadn't realized that this was more than just a cabal of billionaires plotting against it.

• 38:01Speaker 03

  No, there's like, a bunch of, I mean, my, ever since I wrote this story, weirdly, my phone has been blowing up with like, you know, political text messages from different groups. And there's like, a lot of healthcare groups that have lined up against it.

• 38:14Speaker 07

  That's interesting.

• 38:15Speaker 01

  Yeah. I mean, from a Democratic point of view, this is a nonpartisan podcast, of course. From a Democratic point of view, it's sort of nice to put one of these ballot measures on every year so that the billionaires all get distracted and focus on that instead of putting money around the country, the way Elon Musk is.

• 38:30Speaker 07

  That's pretty good, game theory.

• 38:31Speaker 01

  Yeah, there you go. Feel free to call me, you know, Senate Local Action Committees. There's one other big thing I want to talk about today, and that is the, is what is being called Black October, the Volnepocalypse, the PHP vulnerability discovered last week. Mike, I'm going to put you on the spot. Can you explain, obviously, we all know what PHP is, we know what's going on, but just for anybody who doesn't know this stuff, can you explain what happened last week and why it made everybody who works in information securities life hell for the, I mean, it continues to be hell?

• 39:03Speaker 07

  Well, look, I think the way I like to think about it is how the entire, let's say, internet and infrastructure that computers run on to this point is pretty Byzantine and built on a lot of old code that has, let's say, a lot of holes and stuff in it, right? And that's, that's just the nature of computing. You figure out what are called Volne's vulnerabilities, and you fix them over time. You know, Microsoft has dozens of fixes to their main software a year. Now it's ranging up into the hundreds because AI is finding more of them. What happened, though, Black October is not trying to get a Furby for your shopping, for your kids.

• 39:44Speaker 01

  That was, Mike, come on. Was that on the spot? You gotta do better than that.

• 39:49Speaker 07

  No, no, no.

• 39:50Speaker 01

  I hope you didn't workshop that.

• 39:51Speaker 03

  We're on Squishies, we're on Squishies now, Mike.

• 39:53Speaker 01

  It's Dumpling Squishies. My son did his birthday wish list this week, and Dumpling Squishies, that's the big, that's the big new thing.

• 40:00Speaker 07

  I'm showing my lack of children on this podcast.

• 40:03Speaker 01

  You're showing your age is what you're showing, brother.

• 40:06Speaker 07

  So, but it is, it is, it is essentially a vulnerability that goes far wider than just any one little system tweak that you have to update your individual software on. This is stuff that, you know, folks in the industry said could break the internet, it could like, affect how we get on websites and use websites and have them be, have our accounts taken over. You know, it was like, it's much wider. My big takeaway is like, this is the type of stuff that's going to be much easier and more commonplace to find in the age of AI, where you can have these programs just scrape the internet in on that.

• 40:39Speaker 01

  We should say specifically what we're talking, so PHP is a programming language that, who that, God, this is, every time I start talking like this, I think about the dozens of men with huge beards that are going to be chortling and emailing me the meanest things they can say.

• 40:53Speaker 07

  Do you see why I pawned it off on you?

• 40:55Speaker 01

  Like, half of them are my friends. Like, I'm thinking about specific people who are going to, who are going to be like, texting me about how wrong. PHP is a programming language that's used on a ton of different websites.

• 41:02Speaker 07

  Yeah.

• 41:03Speaker 01

  And it is, as Mike is saying, it's much easier to find vulnerabilities in these sort of infrastructural languages with AI, which can sort of run a bunch of different ideas and figure out what, you know, what the exact problems are. And when that happens, all of a sudden, you have these really intense, really serious vulnerabilities that now need to be fixed, not from the top down, but across a bazillion websites. And so, you know, I don't want to make this podcast about me, but on one day last week, I do a daily logic puzzle called Clues by Sam. And Clues, I wasn't able to record my score that day because Sam was fixing the PHP.

• 41:38Speaker 03

  The real victim.

• 41:40Speaker 01

  Well, you know, I'm just trying to bring this down to earth for everybody listening so they really understand what's going on.

• 41:44Speaker 07

  Imagine if you couldn't do your Wordle every day. That is what you need to be using as an illusion.

• 41:50Speaker 01

  Yeah, exactly. I mean, are you talking to people, are you guys talking to people who are, who are in the midst of this? What, like, I'm interested in whether this is, like, either from the perspective of cybersecurity people or from AI people in general, like, how much we think this is just the new normal, that every month is now just, you know, 85-hour weeks for people who work in security and, and all the AI companies throwing up their hands and being like, we told you so.

• 42:13Speaker 07

  I mean, I love to hear what you guys think, but I think the flip side or the counterargument, and this kind of happened in the open versus closed source debate a few weeks or months ago, was like, well, guess what? AI is also going to enable us to solve all these problems and to quickly defend against them and to fix them faster. And these vulnerabilities already existed. It was only a matter of time for someone to find them. So there are arguments from folks saying these fixes can happen. We just sort of need to enlist the advanced tools we have now to fix them faster rather than, you know, random websites across the internet not being able to do that in enough time. But like, I don't know, that feels a little rosy to me. I do feel like we're

• 42:58Speaker 07

  gonna just see this more often and the old internet breaking much faster than than before is my is my point of view, at least.

• 43:08Speaker 02

  I mean, one of the crazier news stories from this week that I thought about was that startup Cathedral made of ex-Doge staffer, so our nation's best and brightest, literally hacking into Anthropic's Slack and IT systems. And Anthropic is supposed to be the ones that are building the best cyber defense internal models that they can't even release to the public. And yet their own technical systems were not secure enough to be able to block this crew of like, young startup guys from accessing trade secrets in their Slack. And so I don't even think, you know, before I would have thought like, man, some, you know, municipal governments are gonna really struggle if they get hacked by some people with an open source model. But now it's actually like, the best and most AI

• 43:52Speaker 02

  forward companies in the world are also as vulnerable. So.

• 43:56Speaker 03

  That's a great point.

• 43:58Speaker 01

  It's gonna be a very long few years, I think. I mean, I think the argument, I read a great piece that I want to recommend by Joshua Sacks, who's a former Meta AI guy. And his argument is basically that we are, as bad as it seems, we are still in a in a sort of defender's window, a defender dominant window, that even though there's all these vulnerabilities being discovered, it in fact, I mean, his, his point, which I admire because I think it's true, is that it takes cyber criminals actually a very long time to like, figure out how to do their jobs. Because generally speaking, they're not that smart and they're not that competent at like, running businesses. So we have, you know, a certain period where we can lock down defenses and, you know, prevent, certainly on the, on the level of cybercrime, protect against some of the worst vulnerabilities.

• 44:42Speaker 01

  But he says, on the other hand, you know, this is not a wholly positive story. You know, we're still thinking about nation state actors that have the resources and the will and desire to, as Jasmine says, like, hack into municipal government infrastructure and whatever else. So I suspect this is not the last time we're gonna be talking about AI discover vulnerabilities on this podcast.

• 45:02Speaker 03

  Great.

• 45:03Speaker 01

  That's right, exactly. Go back to Hawaii, Mike. That's where that's, there's, there's nothing, there's nothing left there. The one, the last thing I want to talk about is the sort of, I felt like it flew under the radar amidst a bunch of other news this week, but Microsoft offered buyout packages to 60,000 people. Aaron, what did you make of that?

• 45:24Speaker 03

  Well, I mean, that is an enormous number. And when you put in perspective of the fact that, you know, Microsoft has like, 230,000 employees, it just reminds you of how enormous these companies are. But just to be clear, buyout packages doesn't mean 60,000 people are gonna take them. They expect three to, three to 5% of their employees to actually take them. So in reality, it's gonna be like, at most, probably 3,000 layoffs. But that's still so many. And I feel like, like, to your point, Max, over the last three, four years, we've just become so numb to these rolling layoffs from the giant tech companies, because that is just the new reality that started kind of after the Zerp era

• 46:09Speaker 03

  kind of deflated, all these tech companies that got super bloated because they thought they needed a million engineers, decided, okay, now we're just gonna like, kind of be in this environment where we just like, cut 1,000 people every, you know, six months or something. And tech used to be this cushy job, especially at a place like Microsoft, which is, you know, very geographically focused, where you can just like, have a 30 year career. And there are a lot of people at companies like Microsoft, Amazon, you know, even like, Google and Facebook, which are a little bit younger, that have been there for so long. And that is no longer the case. That is, you know, maybe a sign of what's to come for the rest of the economy, because tech is sort of always a little bit out ahead

• 46:51Speaker 03

  on, on workplace trends as well. So that's a little bit depressing. And I guess the other thing that I'll add is like, something that, it's like, kind of darkly funny about the announcement, which is that Microsoft said it was part of their efforts to give employees more control over their future.

• 47:07Speaker 07

  Oh.

• 47:08Speaker 03

  What the?

• 47:09Speaker 01

  That's not the kind of control I'm looking for. That's not the control I want.

• 47:13Speaker 03

  Really, really, really grim.

• 47:15Speaker 07

  The silver lining in there, I would say, as far as your like, harbinger of what's to come, is like, a lot of this is because of their AI spend and infrastructure spend. And so like, perhaps like, whatever, Accenture or some, some like, giant employer that's not spending billions of dollars per quarter on AI is not gonna do the same level of layoffs. They're just gonna use the tools to justify different types of layoffs in lesser numbers.

• 47:39Speaker 03

  Oh, my God, Mike, Accenture is the worst example, because like, if there's any company in the world that's going to be fully taken out by AI, it's consultants, right?

• 47:47Speaker 07

  I'm sorry, good lord. See, I'm gonna get taken out by AI, because I can't even think of a good company.

• 47:52Speaker 01

  No, actually, your mistakes is, that's, that's what makes you human, Mike. That's what, that's what, that's what people love.

• 47:56Speaker 07

  I deserve.

• 47:57Speaker 01

  Okay, on that cheery bit of news, we're gonna go to break. When we come back, we're gonna be talking about stories that we're tracking this week.

• 48:15Speaker 00

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• 48:48Speaker 05

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• 48:50Speaker 06

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• 49:34Speaker 06

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• 49:53Speaker 01

  Welcome back. I'm with Aaron, Jasmine, and Mike. And we're going to be talking about stories that we're tracking this week. Mike, what story are you tracking this week?

• 50:01Speaker 07

  So I, this is kind of nerdy, but that's my thing. I found this memo from the VP and distinguished engineer at Amazon this week, that, you know, most normal people are not tracking. But I think it's really interesting, because it's essentially a very long manifesto on the use of AI among software engineers inside of the big companies. And what they essentially cop to is token maxing is kind of a terrible metric to measure how you're doing as an engineer, as is LOC, lines of code, the amount of line, of, of code you are contributing, building these products. Also, a messy metric, which basically means you're larding up these systems with a bunch of stuff that someone's gonna eventually

• 50:46Speaker 07

  have to delete. And so in this long memo, they essentially tell employees, look, what we care about are long term outcomes. This is like, what really matters in the end. And this is what, you know, we need to be judged by. The problem is, you can't really judge who long term outcomes on a quarterly basis, when you're trying to figure out who should still be employed here. So I think, after, you know, thousands of words, we end up kind of back where we started. And I'm very curious how they judge these engineers in the coming quarters.

• 51:15Speaker 03

  I mean, that's so interesting, because I feel like when the token maxing trend started, everyone with any common sense was just kind of like, this seems absurd. Like, just spending as much money as possible to, to write as much code as possible, like, playing the volume game, just, obviously, that's gonna end badly. And we kind of all knew is a short term bump. And the token mining, or whatever they call it, token mining, the reverse of that trend happened so fast, like, by the time we could barely get our first story up, it was already reversed. But like, it seems like they're, they're still struggling to figure out where the balance is. Is that like, kind of your upshot from this?

• 51:54Speaker 07

  Well, what better metaphor for the tech industry than spending billions of dollars to find out something is a terrible idea, and ending up back where you started?

• 52:03Speaker 03

  They're in the arena trying things, Mike.

• 52:05Speaker 07

  Yeah, that's true. I am a coward.

• 52:07Speaker 01

  This is, I have to say, this, you say this is nerdy, but this feels like the most relatable possible thing to me. Everybody has a job where they introduce a new metric, and you know the metric's stupid, and you fulfill the metric, and then your bosses are like, actually, we're gonna do the opposite metric. And so you do that, and you're like, this is still stupid. And then they're like, then they're sort of like, actually, our metric is the long term health of the company. And you're like, well, I'm still just gonna do my job. And let me know.

• 52:29Speaker 03

  Max, you're self-employed. What are you talking about?

• 52:31Speaker 07

  You are your own boss.

• 52:33Speaker 01

  Well, I am also self-hating, so I think I can.

• 52:37Speaker 01

  Jasmine, what are you tracking this week?

• 52:40Speaker 02

  Oh, man. I saw that this new research report that a team at Anthropic put out, they did a randomized controlled trial, trying to understand how much experts defer to AI systems. So they basically gave a bunch of professional, like statistical analysts, access to AIs to give them advice on a decision in a scenario. And what they found was that not only did the experts, I think over 80% of the time, make the same decision as the AI, which are split half-half, they also, over 70% of the time, use the AI's arguments to justify their decision, but only 15% of the time did they say, oh, yeah, I was influenced by this AI agent. And so you, we have this world, which I think is one that we're going to be in increasingly,

• 53:22Speaker 02

  where humans are oftentimes almost becoming like wrappers on AI agents and AI systems, where like all we're doing is like being the faces and like typing the thoughts. And like, I feel like what, like, there's all this concern about AI takeover and rogue AIs. And I think that a lot of the times, we're just gonna let the AIs take over because we'll just be outsourcing all our decisions and we won't even realize. So that's what I'm worried about.

• 53:46Speaker 01

  That is a cheery thought. I mean, as somebody who professionally takes other people's opinions and repeats them as though they were my own, like, I do, I do kind of sympathize. It's just, usually the people I'm stealing from are people, not, you know, not artificial.

• 53:57Speaker 02

  I mean, it's so funny. People say that, like, AI makes everybody a manager. Like, here we are.

• 54:01Speaker 01

  Yeah, exactly. That's exactly, this is exactly what managers do. Wow. Aaron, what about you? What are you tracking?

• 54:08Speaker 03

  So I cover venture capital, as, as you know, and, and one of the most famous firms, Andreessen Horowitz, recently made a big change to the branding and the name of one of their sub-funds, which is their A16Z crypto fund. They're one of the biggest crypto boosters and have been for many years. But now they are going by A16Z Frontier. And this was pretty notable to me. I mean, Hard Fork listeners might remember Chris Dixon, their, their top crypto investor, coming on for an interview a few years back, talking about, you know, the importance of the blockchain and crypto for the future of the internet. And so this would kind of make

• 54:49Speaker 03

  it look like they're backing away from that promise. And that's kind of a thing that happens in VC a lot, where, you know, VCs chase trends and they change. And, you know, it's not just a trend chasing business, it's also a marketing business, because all money's kind of the same. And so in order to stand out and get the entrepreneurs to come to you, you have to kind of put a stake in the ground and say, like, this is what we're interested in, or this is what we're really excited about for the future. And so they were really, really big bulls on, on crypto. And they, of course, despite the fact that crypto is super out of vogue right now, and that, like, you know, something like 80, 90% of all VC dollars are basically going to AI, they have, you know, been very careful to say, we're not backing away from crypto.

• 55:34Speaker 01

  I mean,

• 55:34Speaker 03

  we're just expanding our mandate.

• 55:36Speaker 01

  It's just all frontier now.

• 55:38Speaker 03

  Yes. Yeah. And like, this is something that other crypto funds have also been doing. They're not alone in this. There's a fund called Paradigm that, you know, was started by a Sequoia investor. In 2023, they very famously removed some of the crypto language from their website, and people noticed and freaked out. I will say, a big part of it is that there's probably just not that many people building crypto, investable crypto startups right now, because everyone wants to build an AI. So it kind of is necessary. Like, the crypto industries, like, one of their many problems with crypto is that without the hype, without the number going up, there's just less people that are interested in, like, working in this industry and, and building on this industry. So like, in order to find the opportunities to, like, deploy billions of dollars into startups,

• 56:22Speaker 03

  you, you have to kind of, like, change your mandate.

• 56:24Speaker 01

  Yeah. When, when crypto is too toxic even for Andreessen Horowitz, that's when you know the vibe has shifted.

• 56:30Speaker 02

  I mean, here at Hard Fork, we embrace our crypto-nominated bargain.

• 56:33Speaker 01

  That's right. Exactly.

• 56:36Speaker 07

  Our roots in the blockchain.

• 56:37Speaker 01

  We'll be sticking with this forever.

• 56:39Speaker 07

  Good lord.

• 56:40Speaker 01

  Wow. Well, guys, thank you for coming through. This has been a really fun discussion. I'm so glad to have you, and I hope you all come back soon. This has been Mike Isaac, Jasmine Sun, Aaron Griffith. I'm Max Reed. Thank you for listening.

• 57:05Speaker 00

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  This podcast is supported by Google. Ever notice how at conferences, every company's AI strategy sounds like a home run? Behind closed doors, it's a very different conversation. I'm Josh Spanier from Google, host of the Frontier CMO Podcast. Each week, I sit down with leaders from brands like Unilever, Liquid Death, and AT&T, to talk about which bets paid off and which pilots quietly died, all with the mics on. Search Frontier CMO on YouTube or wherever you get your podcasts.

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  This episode of Hard Fork was produced by Whitney Jones and Sawyer Roquet, and edited by Viren Povich. With additional editorial support from Brendan Klinkenberg, Lisa Tobin, and Brooke Minterz. We were fact-checked by Will Peichel and engineered by Daniel Ramirez. Original music by Marian Lozano, Alyssa Moxley, and Dan Powell. Additional video production by Chris Schott. You can watch this full episode on YouTube at youtube.com/hardfork. Special thanks to Sam Dolnick, Jessica Testa, Lu Wang Tam, Matti Masiello, Dave Mayers, Luke Mylander, Thomas Trudeau, Samantha Winter, Kyle Grandillo, Michael Cordero, and Dahlia Hadad. We love to hear from our audience. If you have any questions or comments, or want to give us a piece of your

• 59:10Speaker 01

  mind, find us at nytimes.com/hardfork. You can also email us, [email protected].

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  This podcast is supported by Chevron.

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  We rely on energy every day. But have you ever wondered what it takes to make sure it's there when we need it? I'm Tanner Faust, and the energy tailgate is back with straight talk about the energy our world depends on.