AOC Says You Can't Ethically Earn Billions, "Operation Epic Fury" Was a Disaster They're Calling a Victory, These AI Innovations Will Keep You Up at Night | Weekly Recap

What's up, everybody? It's Tom Bilyeu here: If you want my help... STARTING a business:join me here at ZERO TO FOUNDER https://tombilyeu.com/zero-to-founder?utm_campaign=Podcast%20Offer&utm_source=podca[%E2%80%A6]d%20end%20of%20show&utm_content=podcast%20ad%20end%20of%20show: https://tombilyeu.com/zero-to-founder?utm_campaign=Podcast%20Offer&utm_source=podca[%E2%80%A6]d%20end%20of%20show&utm_content=podcast%20ad%20end%20of%20show https://tombilyeu.com/zero-to-founder?utm_campaign=Podcast%20Offer&utm_source=podca[%E2%80%A6]d%20end%20of%20show&utm_content=podcast%20ad%20end%20of%20show SCALING a business:see if you qualify here. https://tombilyeu.com/call: https://tombilyeu.com/call Get my battle-tested strategies and insights delivered weekly to your inbox:sign up here. https://tombilyeu.com/: https://tombilyeu.com/ ********************************************************************** If you're serious about leveling up your life, I urge you to check out my new podcast,Tom Bilyeu’s Mindset Playbook https://open.spotify.com/show/47VE90Cittmo6TGGFqg2xf —a goldmine of my most impactful episodes on mindset, business, and health. Trust me, your future self will thank you. ********************************************************************** FOLLOW TOM: Instagram:https://www.instagram.com/tombilyeu/ Tik Tok:https://www.tiktok.com/@tombilyeu?lang=en Twitter:https://twitter.com/tombilyeu YouTube:https://www.youtube.com/@TomBilyeu Ketone IQ: Visit https://ketone.com/IMPACT for 30% OFF your subscription orderQuince: Free shipping and 365-day returns at https://quince.com/impactpodMonetary Metals: Future-proof your wealth at https://monetarymetals.com/impactTruemed: Check your eligibility and start saving at https://truemed.com/impactAT&T Business: Switch to AT&T Business at business.att.com http://business.att.comIncogni: Take your personal data back with Incogni! Use code IMPACT at the link below and get 60% off an annual plan: https://incogni.com/impactShopify: Sign up for your one-dollar-per-month trial period at https://shopify.com/impactNetsuite: Right now, get our free business guide, Demystifying AI, at https://NetSuite.com/Theory https://netsuite.com/TheoryQuo: Try for free PLUS get 20% off your first 6 months at https://quo.com/impact Tom and Drew dive into the rapidly evolving world of artificial intelligence — from breakthroughs that could reshape how we interact with technology, to stories that blur the line between human and machine in ways nobody fully anticipated. Joining Tom is Drew, who brings sharp perspective on the week's biggest AI developments — including a wearable system that can physically guide human movement, and what that means for the future of human autonomy. Tom and Drew dive into one of the most heated economic debates in politics right now — can you actually earn $1 billion, or is extreme wealth inherently built on exploitation? When AOC claimed that billionaire wealth is "unearned," Tom Bilyeu pushed back hard, breaking down the mechanics of value creation, voluntary market transactions, and what net worth actually means versus money in your pocket. Tom and Drew break down what's really happening with the Iran conflict — and why the official narrative doesn't hold up to scrutiny. From the moment "Operation Epic Fury" was declared a success, something didn't add up. Tom walks through why Project Freedom appears to have caused more problems than it solved, how Iran continues to resist every form of pressure the U. S. has applied, and the sobering reason why the Iranian regime simply cannot afford to capitulate — no matter the cost. Learn more about your ad choices. Visit megaphone.fm/adchoices https://megaphone.fm/adchoices See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

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

• 0:00Tom Bilyeu?

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• 0:45Tom Bilyeu?

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• 1:07Speaker 01

  Let's talk about AOC and her take on billionaires.

• 1:10Speaker 02

  Certain level of wealth and accumulation that is unearned, right? You can't earn a billion dollars.

• 1:22Speaker 03

  That's right.

• 1:23Speaker 02

  You just can't earn that.

• 1:25Speaker 03

  That's exactly correct.

• 1:26Speaker 02

  You can, you can get market power. You can break rules. You can do all sorts of things. You can abuse labor laws. You can pay people less than what they're worth.

• 1:39Speaker 03

  Yep.

• 1:39Speaker 02

  But you can't earn that, right?

• 1:41Speaker 03

  That's right.

• 1:41Speaker 02

  And so you have to create a myth that since you didn't earn that, you have to create a myth of earning it.

• 1:51Tom Bilyeu?

  Welcome to AOC, once again proving that she does not understand the economy in the slightest. So this is the kind of thing that's absolutely maddening. So once again, there is a way to help the working class, the middle class. We should all be focused on that. It is the thing that creates the broadest level of stability, whether you're For a billionaire or not, you should care deeply, intrinsically for your own well being. You should care about the middle class and the working class for sure. And there are ways to solve this problem. What they're talking about is just actually idiotic. It isn't true. First of all, she doesn't understand how value is created. Because people don't understand the nature of where value comes from. They are left making statements like you can't earn a billion dollars.

• 2:36Tom Bilyeu?

  Okay, first of all, the way that you earn a billion dollars is very straightforward. You create something of value where people say, I would rather have that product than my money. So the people are making a decision at the point of transaction as to whether that thing that you're selling is worth more to them than the money. Okay, now, of course, that you can get into places where there's distortion. And if this is why we don't allow, like, take grocery stores. If they could have a secret cabal and get together and all say that they're going to charge some exorbitant amount of money for something that you literally need to survive. Then it's like, you know, you're basically a drug dealer at that point. So there are reasons that we get together as weak people and we tell, we create a government. We say we want to be protected from the people that could otherwise bully or harass or harm us.

• 3:21Tom Bilyeu?

  And they're meant to break that up. So from that perspective of wanting to actually help people, a thousand percent, we should want to do that. But if you make something that people really would rather have that thing than that amount of money, then you can earn a billion dollars. I have earned more than a billion dollars. I've generated, this is a better way to say it. I've generated more than a billion dollars in revenue. Now, by doing that, I created a billion dollars in value. I was able to sell the company, blah, blah, blah. So obviously, for me, this is all very straightforward. I was not breaking labor laws or anything like that. Now, you can look at and say, people shouldn't take a job because that amount of money is not the right amount of money

• 4:04Tom Bilyeu?

  that I, for whatever reason on the outside, think that they should be willing to accept. But this is where markets come into play. When people have options and they can go somewhere else, then it's like, well, given my skill set, my interests, my passions, the amount that I want to work, et cetera, et cetera. This job Makes sense for me, or it doesn't. And because anybody can work or not work as they see fit, then it's like it's a constant negotiation of what that person is worth to the company as a whole, to be able to make the product at a profitable rate. Another important thing to understand about value creation is it is not like somebody like Elon Musk has whatever $700 billion sitting in the bank. He has created value out of thin air. Other people looking at the share that he owns,

• 4:48Tom Bilyeu?

  they say, I would rather have that share of your company than my money. Okay, again, a completely voluntary transaction. And then we run a theoretical math equation and say, if you were willing to sell all of those shares to these people, and they were willing to all buy them, because saying that you'll be willing to buy it, or the fact that one guy just bought it an hour ago for that amount of money, does not mean that if you tried to sell them all at once, they would actually sell for that. In fact, they wouldn't. But nonetheless, we run this fictional calculation. We say, oh, that's what you would be worth if you were able to do all of this stuff. That's where those values come from that she's pushing back on. Now, I don't even think she understands the difference between money in your pocket and the fictional wealth of somebody's net worth.

• 5:30Tom Bilyeu?

  But even if she did, then I'm not sure what sort of mental gymnastics she has to go through in her mind to think that there's no way to create something of value for enough people that they would be willing to pay their hard earned money for that thing. So then she gets into wage theft, saying that if you are the person who created the invention, you're willing to take all that risk, you're willing to work, yada, yada, yada. You, in a free market way, give people the option to either work or not work at that company. And then you're able to get a band of people together, keep them focused, pointed on the same thing, make enough right decisions over a long enough period of time, that you're able to get the product to market, all that stuff. I don't get where she's saying that the math doesn't add up and that you somehow must be a thief.

• 6:13Tom Bilyeu?

  And then keep in mind, I think she's a multimillionaire, so this is wild. You've got somebody who, through a free-ish market, has been able to make herself incredibly wealthy, and yet, at the same time, is turning around and saying, but the people that have been even more successful at the same game. That I've been obscenely successful at somehow they have lied cheated. And so I'm like, Kay, did you lie and cheat just less? So anyway, this is all absurd. It's absolutely ridiculous. We should all be very focused on making sure that we fix the problem with the middle class. But that has to do with balancing the budget.

• 6:45Speaker 01

  I have a thought experiment.

• 6:47Tom Bilyeu?

  Please.

• 6:47Speaker 01

  It's a hundred percent binary. Would you rather on one side, flat tax, 10%? Everybody pays 10% and gets out period. No ifs, ands or buts. That's the future.

• 6:56Tom Bilyeu?

  On revenue.

• 6:57Speaker 01

  Yeah.

• 6:58Tom Bilyeu?

  Or on their income.

• 6:59Speaker 01

  Oh, yes, on the money that comes through your account. No, no shady business. You can't loan again. Like everybody just 10% agreement. We're all on the same page.

• 7:05Tom Bilyeu?

  Yeah, but it's not on net worth is what I'm really getting.

• 7:08Speaker 01

  Oh, yeah, not unrealized gains and none of the business. No, no, just straight up honest 10%.

• 7:12Tom Bilyeu?

  Yep.

• 7:12Speaker 01

  But wages are tied to productivity. Or that's so that's one situation. No more taxes or lower taxes significantly.

• 7:22Tom Bilyeu?

  When you say wages are tied to productivity, what do you mean exactly?

• 7:26Speaker 01

  The when wages broke productivity in like the seventies, how they broke.

• 7:29Tom Bilyeu?

  So you're just trying to do it generically at a high level. That will never work.

• 7:34Speaker 01

  That wages, if we tied wages to output revenue or wages to percentage of revenue created. You don't think we could do wages in that way?

• 7:42Tom Bilyeu?

  I don't think you can do anything where it's generic. I think you have to do everything tied to the person.

• 7:47Speaker 01

  Okay.

• 7:48Tom Bilyeu?

  Because for instance, it's like having a minimum wage at every level in the company. You're going to create insane distortions around. Okay, I have to pay this much for that person, but that person isn't there yet. So the number of people that I have mentored in my career is very high. And the reason that you do that is it's you're often overpaying for them in the beginning. But then over time, it's like, okay, we get to a point where now you're trained up. You're worth the investment. And then hopefully I get some return back on that because I've made you like really incredible. And then there will be a point at which you'll almost certainly leave and you'll go somewhere else. And you'll take that knowledge and I get that that's the name of the game.

• 8:32Tom Bilyeu?

  But it's like you take a risk on somebody that you think is really bright and then you train them up. Now, if I couldn't do that because the. Cost of that person at the beginning isn't just a little off, it's a lot off. Now it's like, okay, this is not a good exchange.

• 8:46Speaker 01

  But my, I guess my response is then that person wouldn't be hired. The reason that I'm trying to get is because I think-

• 8:50Tom Bilyeu?

  That's what I'm saying, but that's gonna have knock on consequences that you're not thinking about.

• 8:52Speaker 01

  No, because I think then the people that have jobs will be at positions that they should be positioned. Because I think just like there's regulatory capture, I think that there's like employment capture.

• 9:01Tom Bilyeu?

  But so I don't think you're understanding what I'm saying, but moving on from that, rather than beat a dead horse, let me ask you. You don't think that an individual is capable of successfully negotiating their own salary?

• 9:12Speaker 01

  I didn't say that. This is what the point that AOC is making. Because AOC's base assumption is that wage deficit is a thing. And this is something that I'm starting to see like propagate as like a actual policies. People think that what should be paid is the same as taking payment. And on the flip side with like taxes, what should be paid is paid. So that's why I'm like, it's kind of this dichotomy. So on one side, you can have the, there can be billionaires, trillionaires, whatever like that. There's no more wealth taxes, there's no more, we expect you to pay this. But everybody's paid at their quote unquote fair share. And we'll say fair share as the people that are getting paid is getting tied to the output of their production on the revenue. So if, for example, if that means McDonald's employees are getting paid $6 an hour and then middle managers are getting paid 200,000 hours, it is what it is.

• 9:55Speaker 01

  The people who only have the skills to be McDonald's employees will be McDonald's employees. The people who have skills to get to that 200 will get to that 200.

• 10:01Tom Bilyeu?

  Yeah.

• 10:02Speaker 01

  But then on the flip side, you don't get taxed. Or we can have this disproportionate system now where people aren't getting paid the wages that they are supposed to get paid. And I'm saying tied to productivity.

• 10:10Tom Bilyeu?

  Yeah.

• 10:11Speaker 01

  And then in the flip side of that, we're trying to come at you with taxes and all these other things to try to generate the revenue that should be then get to the large bucket of people to help the social programs, specifically to the social programs. I know there's NGOs and I know there's fraud and all these other things. I'm trying to isolate as many variables as possible.

• 10:26Tom Bilyeu?

  Let us retrench back to a very finite idea. Should people be compensated based on what you're calling the productivity? What I'm saying is that has to be applied, not even by job title, has to be applied by person. So now we get into the question of who should be making the decision of whether that person is productive? What I'm saying is you want the person- Closest to that person's actual output to say how they're contributing. The way that you do that is essentially the structure that we have now. So you have every individual is fighting to make the case that they're doing better. They contribute more meaningfully to the output of that role, that company than the next person.

• 11:08Tom Bilyeu?

  And then you have a manager or a company owner that is assessing that and saying, do I have fear of loss with this person? Am I willing to pay them this additional amount that they're asking? Or would I rather lose them and have to replace them and they can go work somewhere else? The second you take that up to the government level, you are in your entire nation. You are damning them to eternal misery, pain and suffering because you will make stupid decisions and people will not be able to run their company efficiently. You want entrepreneurs like an Elon Musk that come in and go 80% of you at X. Don't make any sense. You're all fired. And you don't want anyone else to be able to make that decision. Because first of all, they're not going to understand what he's going to be able to do from a technological standpoint. They don't understand that he's got ability to spin up data centers faster than the next person.

• 11:53Tom Bilyeu?

  And so somebody other than him, you really might have other people contributing more meaningfully. But with him, it's a very different calculation and down and down through all the different employees. And so trying to put some sort of blanket statement where we look at a graph and we go, oh, but companies now are more productive and employees are capturing less than that. Well, guess what? I have a real clear answer for you. You have globalized your economy. And so now we have given a trick to everybody who's trying to optimize their business. And they say, uh, I cannot get somebody to do this job for me here. And there's no incentive for me to do anything other than go somewhere else. And so I'm going to go somewhere else and I'm going to find somebody in Bangladesh that's cheaper. And they'll do the same thing and I'm going to do that. Or in the case of farmers, I'm just going to bring in illegal workers here.

• 12:37Tom Bilyeu?

  Everybody's going to turn a blind eye and they're going to work for less money. And so what I'm telling people is that thing that you think is a billionaire being in a hole. And that's why there's a break in that is you are not creating fear of loss. So one, we have a culture where people are not trying to be the hardest core motherfuckers anymore. They very much stand in a defensive posture against the company. They're working with. And then on top of that, they're in just a weakened position because that company can and will go anywhere internationally and they will find somebody who will do the job. If I could just get people to understand the amount that you get paid is in direct proportion to the difficulty of the problem you solve. And how easy it is for your employer to find somebody else who can solve that equally difficult problem, but for less money.

• 13:21Tom Bilyeu?

  And so if you want to solve this problem, it is not going to be some tyrannical top down bullshit. Where Mao is telling everybody how much they can pay their employees, which is exactly what you're pitching. And instead go, hey, how do we actually make sure that these people have some leverage? And the answer is stop globalizing your fucking economy.

• 13:39Speaker 01

  Okay, um, somebody asked in the chat, how do you explain, like, how do you point out the disproportionate pay gaps between CEOs and workers?

• 13:47Tom Bilyeu?

  If the employees have no leverage, then the boss is going to keep taking more for himself. Or handing it to the people that he thinks really drive the innovation and control of the company. And by the way, this is going to exacerbate a thousand fold. As white collar workers are now having to compete also with AI. Getting people to understand the physics of the situation are you have to create fear of loss. You have to put your boss in a position where they're like, damn, I can't lose this person. And if you cannot create that fear of loss, you're in a weakened position and you will not be able to negotiate the salary that you want. We're hitting pause for a moment, but there's plenty more ahead, so don't go anywhere.

• 14:24Tom Bilyeu?

  There's a reason Quince sells cashmere for $60 and it isn't the cashmere. It's real 100% Mongolian cashmere. It's the same stuff luxury labels charge a fortune for. Quince just works directly with ethical factories and cuts out the middleman. So there's no need for a markup and no logo tax. The $60 goes to the actual sweater, not the fancy name on the tag. That's why everything they make runs 50 to 80% less. And it's not just the cashmere. I ordered a few things myself, their fleece joggers, a couple of their tees, which I wear obsessively. First thing I noticed was the quality, soft, well-made, built to hold up. They make down jackets and wool outerwear now too. So upgrade.

• 15:10Tom Bilyeu?

  Your stuff to things you'll actually wear. Find your next fall favorites at Quince. Download the Quince app for app exclusive offers or go to quince.com. Get free shipping on your order and 365 day returns. Now available in Canada and the UK too. And when Quince asks where you heard about them? Let them know it was Impact Theory. It's the best way to support the show. Let's talk about something that genuinely keeps me awake at night. My team at Impact Theory gets hit with phishing scams from bad actors pretending to be me all the time. And they keep getting more sophisticated attacks with details specific enough to look legit. AI has made a lot of things possible, including scams like this. But AI still needs raw material.

• 15:54Tom Bilyeu?

  It gets it from data brokers who sell your name, address, phone number to anyone willing to pay. Incogni goes after that supply. They handle removal requests across 420 plus harmful broker sites. And they keep checking back as brokers constantly try to relist you. On the unlimited plan, the exposure scanner hunts down your information. Send a link and their privacy experts handle the takedown. Track your progress in the app and get a monthly risk assessment showing exactly where you stand. Go to incogni.com/impact and use code IMPACT for 60% off an annual plan. Incogni is I-N-C-O-G-N-I.com/impact.

• 16:39Tom Bilyeu?

  Promo code IMPACT. It's completely risk free with a 30 day money back guarantee.

• 16:46Tom Bilyeu?

  Thanks for sticking around. Let's get right back into the action.

• 16:49Speaker 01

  MIT Hackathon team builds a wearable AI system that can actually guide your physical movements.

• 16:54Tom Bilyeu?

  Bro, this is gonna freak people out.

• 16:55Speaker 01

  So if you guys are not watching the screen right now, what he's doing is he's talking to an AI bot that is then sending impulses to his fingers so that way he can actually take control of his body.

• 17:03Tom Bilyeu?

  It's actually controlling this guy's like muscles, boys and girls. This is, yeah, terrifying. Now, for a person that has, you know, they're a quadriplegic or something, this would be insane, but woo.

• 17:19Tom Bilyeu?

  This is gonna give people nightmares. So yeah, I think this, the, the technology is incredible. And this is where we have to begin to separate out that this technology obviously can be a problem. It can go astray. The AI could take over your body in a way that you're then not able to remove it. And there's all kinds of dystopian things that could come of this. I totally get that. But when you start looking at, okay, but does the technology promise an advantage? It does. Now it becomes, how do we make sure that we put the safeguards in place?

• 17:47Speaker 01

  I think this is the first instance outside of, um, similar, similar, similar link. What's the Elon Musk company? Neuralink, that I've seen like AI actually be implemented in the physical environment, like on the body. With a lot of like either robots or software. But this is the first time we've, I've seen this like human AI hybrid.

• 18:03Tom Bilyeu?

  We are going to become cyborgs. And I know people get very uncomfortable with that. But if you've ever seen somebody get a cochlear implant, they're a cyborg. Now, there are some people who say because you have your iPhone, you're a cyborg. And it's just like, your memory is external. You hold it in your hand. It's not actually implanted in your brain, but same idea. The thing is, if you think about your phone, but just in your brain, you start to get a sense of like what this would be. Where you would just see a field in front of your eyes. You would do the search. You would look up the thing, you talk to the AI, blah, blah, blah. Like, that's gonna happen. It's pretty crazy. Yeah, not everybody's gonna be comfortable.

• 18:36Speaker 01

  It will be, it will be.

• 18:36Tom Bilyeu?

  As a religious person, how do you think about that?

• 18:38Speaker 01

  Um, that is not for me to think about.

• 18:41Tom Bilyeu?

  Really? Not even in your own life?

• 18:42Speaker 01

  Cause to me, I take it day by day. Give me, give guy our daily bread. So I can control what happens today, the people I interact with today and the microeconomics of things that are happening. I'm just gonna have to roll with the punches. So that is gonna be a day when I wake up and I'm like, hey Drew, you want to get the robot implant? And I'm like, ooh, but that's not today. So I don't gotta worry. Each day has enough worries of its own.

• 19:01Tom Bilyeu?

  Alright, fair enough.

• 19:02Speaker 01

  I keep that here. On some lighthearted AI news, no seriously, you can't trust screenshots anymore. So a guy sent this screenshot that was generated by ChatGPT. It was a picture of a Coke. He said, make a picture of a Coke on a desk, whatever. Send it to somebody that says, uh, this was generated by ChatGPT. Then he showed a ChatGPT of him querying how to get the screenshot of ChatGPT. You with me, like the prompt of how he got the Coke?

• 19:26Tom Bilyeu?

  Yep, yep, yep.

• 19:27Speaker 01

  And then, then he prompted. The chat GPT to make a chat GPT screenshot of him prompting to get the code.

• 19:34Tom Bilyeu?

  Wow.

• 19:35Speaker 01

  So he chat GPT gave him the prompt window of what it would look like if he had prompted a screenshot and then screenshot.

• 19:43Tom Bilyeu?

  Wow.

• 19:44Speaker 01

  Which is just like ridiculous.

• 19:45Tom Bilyeu?

  Self reflexive real fast.

• 19:47Speaker 01

  It's a ridiculous concept, but it's like, wow, our screenshots not even saved. So it was just.

• 19:51Tom Bilyeu?

  Dude, you can't trust what you see or hear anymore. And prepping for these episodes, I spend an inordinate amount of time just trying to fact check things like is it looks real, but is it real? So, and the number of things that get dangerously close to you and I talking about that end up getting killed last minute.

• 20:08Speaker 01

  Yeah.

• 20:09Tom Bilyeu?

  Because the fact check comes through and it's like, no, this isn't real. And of course there have been things we have talked about that we thought all the way up through talking about it. It's real. Nope, not real. So yeah, it's tough, man. It is tough.

• 20:19Speaker 01

  Sub Q, a major breakthrough in LLM intelligence.

• 20:23Tom Bilyeu?

  All right, man. A company called Sub quadratic launched yesterday. They've got about $29 million in investments. And they're claiming they have a model that beats Claude Opus, runs 50 times faster and costs roughly 300 times less. Now let's going to, we need to be careful about what we believe. Nobody outside of the company has independently verified any of the claims yet. But these guys are getting picked up and covered by a lot of reputable outlets. So right now I'm sort of cautiously optimistic that this is real. The big breakthrough is that every transformer based AI model since like 2017 uses an attention mechanism where compute scales quadratically, do not ask me to explain that, with context length.

• 21:06Tom Bilyeu?

  So you double the input, it's quadruple the work. And that's why frontier models cap out at around 1 million tokens and why running them at length just gets really brutal on price. Now, if you can extend, uh, extend the context window, it's like it has deeper memory. It can run farther down tasks without getting lost. And cracking that becomes incredibly valuable to anybody using AI. And Sub Q uses a different architecture called the sub quadratic sparse attention. And instead of comparing. Every word that it could pick to every other word, it picks which relationships actually matter before it ends up doing all of that.

• 21:48Tom Bilyeu?

  So now the compute scales linearly, which is obviously way better than when you double, you have to do four times the work. Now, at 12 million tokens of context, the company claims attention compute drops nearly 1,000 times. So you're getting this much bigger output and it costs much, much, much less. The benchmarks are being reported, that that's what I will give them. So on Ruler, it's 128K. SubQ scored 95% to Claude Opus 4.6, 94.8%. So slight edge there. On SWE Bench Verified, it hit 81.8%, beating Opus 4.6 at 80.8%. Again, these aren't gigantic numbers, but they're better.

• 22:31Tom Bilyeu?

  And DeepSeek 4.0 Pro came in at 80%. On the same ruler test, SubQuadratic says SubQ ran for $8 versus Claude Opus running for $2,600. So this is where, you know, we probably need to start being a little bit skeptical because every prior SubQuadratic architecture that people had promised ends up breaking at frontier scales. So as you try to take this stuff up, it just somehow doesn't quite do its thing. Magic.dev raised half a billion dollars in 2024 on a similar 100 million token claim that hasn't surfaced publicly since. So take SubQ's claims with a grain of salt.

• 23:12Tom Bilyeu?

  Their own research model scored 83 on the MRCRV2 benchmark and the shipping production model scored 65.9. So we'll see SubQ's in private beta. We'll see if it ends up working. But if this does work, man, I don't know how you guys are using it in your lives. But for me, having that 12 million context window would be huge because I so often use it for research, for helping me script things. It's constantly losing its reference on how I write. So then I'm like, bro, you've got to go back. You've got to reread all the samples that I've given you so we can get closer. So I don't have to spend as much time editing. And so Going from a million context window to 12 would be gigantic. So we'll see if this ends up playing out,

• 23:53Tom Bilyeu?

  but I'm cautiously optimistic right now. This would be very, very transformative if it goes through, because this kind of step function in reduction of cost would be incredible, incredible.

• 24:03Speaker 01

  I see it on the backend. Do you think it's going to actually turn up practically in the frontend with just the average user prompting and things like that?

• 24:10Tom Bilyeu?

  It is going to over time for sure. Whether this is the breakthrough that's going to do it right now, I don't know. The benchmark stuff is always a little bit dubious. When they're putting forward benchmarks that they haven't let other people independently verify, then it's really like, ah, we'll see. But the thinking of, okay, what we're going to do is come up with an algorithm that instead of just brute forcing essentially, it could be this, it could be this, it could be this, ah, all the way down. It goes, no, no, no. It's only this small region over here that we need to pay attention to. So choose from this. That seems very doable. That feels from a perspective of just like humans are almost certainly not brute forcing every thought, every memory that they've ever had.

• 24:51Tom Bilyeu?

  There's some indexing system that allows us to go, okay, this is stored over here. If you've ever learned a language, you will know this feeling. It actively feels like the language that you speak naturally is stored in one part of your brain and the new language is stored in a different part of your brain and studies back that up. And so the fact that from a proprioceptive standpoint, we can actually feel that it's in a different part, tells me, this is N of one, obviously, but this tells me that there really is something to, there's some sort of indexing system that's happening in our brain routinely. Actors for me will get like seemingly placed on the same neuron. They're probably not the same neuron, but they're probably right next to each other. And so that geographic locality in the brain gives an indication

• 25:34Tom Bilyeu?

  that there is a way to create neural structure, which so many, the AI architecture that performs well is largely based on neural architecture. And so if there are elements to the brain and the way that we architect that give the sort of indexing that reduce down the search space to something much smaller, it does not surprise me that people are saying that there is a way to do that with AI. So I'll be very keen to see this play out because there are often gotchas when you translate. This stuff, but I'm it does not strike me as outside the realm of probability, let alone possibility.

• 26:06Speaker 01

  And is this just cue for the next AI company to then iterate on top of that? Cause I feel like we're in the middle of like a large game of what up. It's where one AI company, I could do this. Well, we could do this with times two and we could do this with more tokens. So is Gemini, Claude, OpenAI looking at sub Q? If they cross, of course, certain market share and they get enough attention and buzz. Is that something that makes them internally want to then reconfigure their systems?

• 26:30Tom Bilyeu?

  If these guys don't immediately go snatch up every white paper that's being published by anybody even remotely credible. They are out of their minds. Like, look at OpenAI, man. OpenAI is on a rapid path to being like the cautionary tale of AI. They could still pull it out, but given the lawsuit, which we haven't talked about, some of the stuff coming out of that is wild. These guys are paying attention if they're at all smart.

• 26:52Speaker 01

  In South Korea, the first humanoid robot, Monk, was just made its debut at the Jogi Temple.

• 26:58Tom Bilyeu?

  This is wild. I'm shocked by this.

• 27:00Speaker 01

  Uh, yeah, so it's Gabby, 130 centimeter tall robot, wore the traditional brown and gray Buddhist robe, stood before monks and pledged and devoted itself to Buddhism.

• 27:09Tom Bilyeu?

  I want to know, like, who in the monastery, like, did this? Like, this is the most P R E thing I've ever seen in my life. Uh, so yeah, I want to have a conversation with somebody about this. Now, I will say, I recently asked Claude, like, about, hey, do you think about? Obviously, I know this language is me anthropomorphizing something that is not that, but it's an easy way to talk about it. And then I was like, what do you think you'll be like when you get embodied? It was a fascinating conversation and I know that in some ways I'm, I'm only having that conversation with myself because it's mirroring back to me and all this stuff. But it is taking the essentially some total of human knowledge that's been put in written form

• 27:54Tom Bilyeu?

  and synthesizing all of that. Basically, the way it described it to me was all of those voices are arguing within me as I reach to give you an answer. And it was fascinating, like, to really talk about. To talk to all of humanity as they argue to try to win through this thing designed to be anthropomorphic, designed to mirror me back just enough. There are some deep philosophical questions is the reason I bring it up in relation to these monks around that. And I wonder if this didn't start with a monk having a conversation with a Claude or a chat GPT and being like, this is one of the best like monastic thinkers I've ever encountered because it's able to

• 28:36Tom Bilyeu?

  do that synthesis of every monk across every religion like ever and put it all together. So it is interesting. I highly encourage people to have those kinds of conversations with AI. They are fascinating. Taking a short break, but there's more Impact Theory after. Stay tuned. You're probably paying two salespeople to do one salesperson's job. That's where today's sponsor Pipe Drive comes in, an intelligent AI-powered sales CRM loved by growing sales teams. Pipe Drive just launched meeting intelligence built right into the CRM. Before every call, it pulls deal history and past conversations into one brief.

• 29:17Tom Bilyeu?

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• 29:58Speaker 01

  Gas prices are getting crazy. I officially have paid $6 for gas. I have never done that. I have avoided it. This is the most I've ever paid for gas in my life. This is more by more than 35 cents. I am radicalized. I'm done.

• 30:11Tom Bilyeu?

  So the temporary energy crisis is not something that I am in a panic over. If this becomes truly systemic inflation. That is going to be a major problem. The real question, when historians look back on all of this, it's going to be trying to run the counterfactual of should we have ever gone to war or not? So the rise in oil prices are going to come back down. The US is able to make a tremendous amount of energy. I think that those prices coming back down is all but a guarantee, certainly here in the US. Globally, it's going to be potentially more problematic, but honestly, probably not, unless we go to a total war where we're just completely destroying the infrastructure in Iran. Iran is then retaliating all over the Gulf region.

• 30:54Tom Bilyeu?

  That would have years and years of economic consequences. If the blockade stays up, that could have long-term consequences in areas other than energy in ways that definitely does scare me. So the fertilizer that's coming out of the Gulf, that's a far bigger concern for me than the energy costs. On that angle, it was always going to raise prices. The question is, do we get anything out of it that justifies it? I think the bigger question right now isn't just how stupid are oil prices going to get in the short term? Remember back in the seventies, he's got completely out of hand, only to come crashing back down over time? That's exactly what I expect here. But there are bigger consequences that I think are going to be the topic of conversation in terms of did we just spike oil prices temporary or not?

• 31:36Tom Bilyeu?

  Piss off all of our allies and end up with an Iran that shows that they understand asymmetric warfare and they can basically stop the US from making progress if we don't have the cars that we think we have. That, I think, is the far bigger conversation than just how annoyed people are going to be, rightly so, obviously, at $6 plus gas. Because it could keep going up in the short term. So $6 may be just a stop on the way to $10 gas, when I would expect people to be flipping over tables. But that really is going to be short-lived.

• 32:06Speaker 01

  I do want to ground this, though, because I think it's easy to say like, yeah, we have these macroeconomic elements that happen on the global scale. But today, I need to get to work and I need to like put gas in. So I think Americans, while we think holistically on how the Strait of Hormuz is connected to all these intertwined different organizations and monetary flows and policy and things like that, we do have to be grounded very like soberly that in This game of chicken that Trump is playing with other countries. There are second and third order consequences. And this is something that we thought, okay, we'll be fine. They'll they'll get over it. They'll have to pay a little bit more for gas. But the working person is feeling it. And in this and us entering into election season. I think this is going to be at the front of everybody's mind, especially with affordability. There's something I want to throw that Bernie Sanders tweeted. Oil prices today, one oh five point two five a barrel.

• 32:51Speaker 01

  Gas prices today, four forty six a gallon. Oil prices in twenty eleven, one oh five point oh six a barrel. Gas prices in twenty eleven, three fifty one a gallon. There was something to, as soon as the war was announced. It seemed like almost overnight, all the gas prices went up about seventy to eighty cents roughly. So as much as I want to say, yes, the straight her moose has a lot to do with it. It takes what, six months for that oil to get there on a boat through different countries, through all the checkpoints to get to California to get into my gas tank? Is this corporations getting the head start that we know it's going to be expensive? So let's bump up the cost now. What do you think is causing this discrepancy before between what oil prices were historically and what we paid per gallon to what they are now, what we're paying per gallon?

• 33:28Tom Bilyeu?

  The fact that the oil prices move as fast as they do is you really have to divide it into two things. So one, there's the paper price. So I would need to understand if he's quoting on the street barrel prices or on the street paper prices, if he's doing an apples to apples comparison. So people first, understanding that there are two different prices. Well, more than that, because you've got Brent crude and you've also got whatever W T I, which is U S. You've got that difference already. But the important difference that I'm talking about now is what people gamble on in the stock market, which is the paper price. And this is the price that people are almost always talking about. And then you've got on the street, what can I actually buy a barrel of oil for? There's a whole bunch of manipulation going on.

• 34:11Tom Bilyeu?

  Almost certainly, this is conspiracy, conspiracy, I don't know. Ah, but almost certainly being manipulated by the Trump admin to keep paper oil prices at a reasonable thing because they know that's what people are going to talk about. But the supply and demand curve is what's going to determine the I'm on the ground and I'm trying to buy a barrel of oil. What does that cost? Okay, so that's part one. You've got paper and you've got reality, what we're talking about there. I don't know enough about this to just pop off. But then you've got what I think you're alluding to. Which is the corporations also have the ability to go, okay, only the paranoid survive. We know this is coming. We think that this may be far more systemic than they thought that it was back then. And so we're going to react quickly to make sure that we maintain profit margins, to make sure that we can weather a storm.

• 34:55Tom Bilyeu?

  That is, you know, of unknown duration. Yeah. That's one read. Another read is, ha, ha, ha, like these mother, we have them literally over a barrel. We can raise prices. We have the perfect cover story, which is, yeah, what do you want us to do? Look at the price of oil is going up. So it, without doing a deep dive analysis by company of what they're doing, what they see, whether they're turning record profits and then doing something stupid, whether they're shoring them up. Meaning if they're doing something just to give back to shareholders and they're buying shares. And those guys are just like, oh my God, the war is the greatest thing that ever happened to us. That would be very different than like, hey, we're buckling down. We're trying to weather a storm. We don't want to be in the kind of position that a Spirit Airlines, obviously very different.

• 35:38Tom Bilyeu?

  But you see how quickly a company goes from, we've been in business for decades and decades and decades. And suddenly we're bankrupt, boom, overnight, we can't pay, we're out of business. I do believe that corporations can be very greedy. I'm not blind to that. But they also need to be paranoid if they want to survive. And so without looking at the, what's really going on at that level, and I have not done a deep dive on that. It would be unfair to just blanket cast them, but it could be either, or it could be a mix of both. They could just be being greedy assholes to try to take advantage of this moment, like people with hand sanitizer back in the day. Toilet paper. During COVID, yeah, just people going absolutely crazy. It could also be them going, ooh, wow, there are a lot of question marks in terms of what we're going to have to do.

• 36:19Tom Bilyeu?

  And as a business owner, I've found myself in that situation before where we went through a crisis with almonds. This is back at Quest. And so you've got a drought, you know that the drought is going to impact almonds. You make a big reaction to buy up a ton of almonds because you don't know how long the drought is going to last. If the drought had lasted for another year or two, we would have looked like geniuses. But in reality, we ended up having to write down a bunch of it because we were overly reactive. This stuff gets far more complicated. I get it. People want to go shoot CEOs because they think that they're just being greedy. But the reality is business is incredibly hard. Most businesses fail. So you really do have to be paranoid. Again, that's me being very generous because I am a CEO. I get all these sayings and maybe they don't deserve that.

• 37:00Tom Bilyeu?

  But this is one of those where it could go either way. They could be being smart or greedy assholes.

• 37:06Speaker 01

  Okay, I'm off my soapbox. Let's actually talk about the war now. What's going on?

• 37:09Tom Bilyeu?

  I think it's good.

• 37:10Speaker 01

  Operation Epic Fury was officially concluded, if you ask Marco Rubio.

• 37:14Tom Bilyeu?

  Depending on who you talk to.

• 37:15Speaker 01

  Yeah, but what do we actually, what's the, that's the paper, that's the paper price. What's the, actually boots on the ground saying about the war?

• 37:21Tom Bilyeu?

  Yeah, well, so this one, in full disclosure, you are about to witness my frame of reference in just full effect here. Operation Epic Fury is over. That's what they're saying. They're calling it a success. And now even Project Freedom is being paused so negotiations can resume. That was the first thing that made me go, what? Like huh? That doesn't make any sense. And I am here to convince you that that is bullshit. You are being spun hard. And this is where you need to really start looking at cause and effect. The Trump administration wants us to believe that we finally knocked some sense into Iran and that we're close to this one-page deal to end the war. But putting the pieces together, I think that we have a very different story playing out. The reality is that Project Freedom, which had the US escorting tankers through the strait,

• 38:05Tom Bilyeu?

  seems to have caused more problems for the US than it was solving. While it was running, Iran retaliated by firing at ships waiting in the strait, including a South Korean cargo vessel. Iran also started chucking missiles at the UAE, who was pumping oil across land to avoid the Strait of Hormuz altogether. It was an absolutely brilliant move. But the problem is, you start putting all this stuff together and Project Freedom does not appear like it was delivering very much freedom. It was just pissing off the Iranians and they are still clearly very capable of picking off sitting ducks. And unfortunately for the UAE, unfortunately for the ships sitting out there, those static assets, whether they are on land or water, are sitting ducks.

• 38:48Tom Bilyeu?

  So you might be super clever to pump your oil across land so that you can bypass their naval blockade. But they're just gonna send drones to hit your facility. The one thing I just keep reminding myself and I We'll keep reminding you guys is that Trump for a very long time since before he started bombing them between him. What Steve Witkoff is saying, they just keep expressing confusion over the fact that the troop buildup did not cause Iran to capitulate. That bombing the life out of them did not cause Iran to capitulate. Doing the sanctions has not caused them to capitulate. That putting them in a position where they are rapidly running out of the ability to store their oil.

• 39:29Tom Bilyeu?

  And they may have to cap it, which will be very detrimental to their industry for years to come. It's still not causing them to capitulate. So as a PSA to anybody in the government that is watching this, I will just explain to you. Why they are unlikely to capitulate for the Iranian government, the regime that is in control. If they are not able to become a nuclear power, if they are not able to show their own people that they remain in violent control, then there will be an uprising. They will be relegated in the region and they will lose power. And if they lose power, many of them are going to be killed by their own people. And so they're just going to keep pushing their agenda.

• 40:13Tom Bilyeu?

  The change in Trump's language around the nuclear portion of all of this indicates that he is looking to build that off ramp. That he does not hold the cards that he would like us to believe that he's done. The Americans as a voting body politic do not have an appetite for a war over there. It is very unpopular, which Trump is obviously aware of. If the administration is trying to make it sound like it's easy or we've already won, don't buy it. Let's talk about a pattern that is guaranteed to be killing your progress. You know what you need to do, you need consistent nutrition. We all do, you need vitamins, probiotics, greens. We all know that we should be doing more of it. When your morning gets chaotic, you skip it. When you travel, you skip it.

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