The AI Industry Is Becoming Like Professional Sports

When it comes to tech startups, you often hear about VCs making a ton of money, or founders experiencing life-changing exits. But something is changing in the world of AI. Now it's the engineers themselves getting pay packages that can be in the 9-figure range. Why is this? Why is it happening? How is it changing the culture of Silicon Valley and business more generally? On this episode, we speak with John Coogan and Jordi Hays, the co-hosts of TBPN, a daily show about technology, which covers the industry in a sports-like manner. We talk about the economics of these transactions, why they make sense, and who are the industry's top superstars. Read more:Meta Seizes Its Moment to Spend Aggressively in the AI RaceApple Rebound Looks Elusive as AI Woes Draw Investor Scrutiny Only http://Bloomberg.com subscribers can get the Odd Lots newsletter in their inbox each week, plus unlimited access to the site and app. Subscribe at bloomberg.com/subscriptions/oddlotsSee omnystudio.com/listener for privacy information.

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

• 0:00Speaker 00

  Finance is increasingly being built on digital rails. But as the adoption of virtual assets, tokenization and stable coins grows, can regulation not only keep pace but help accelerate it? Find out more later in the podcast.

• 0:16Speaker 01

  This is the Bloomberg Tech Minute brought to you by ChatGPT. I'm Carol Muster. Getting hired at SpaceX requires exceptional ability and may include having Elon Musk review a candidate's resume. So writes Bloomberg Business Week's Lauren Grush. She reports that the company culture is defined by Musk and job candidates must understand that a commitment to SpaceX means adhering to this culture and exhibiting loyalty to Elon Musk. To get hired, candidates must demonstrate their achievements from past jobs and hands-on experience matters more to recruiters than advanced degrees, with the company looking for people with raw innate intelligence. A spokesperson for SpaceX didn't respond to a request for comment on its recruiting and hiring practices.

• 0:59Speaker 01

  But according to recruiters, advisors and those who've interviewed for jobs there, it's the space exploration dream that draws people to the company. And Musk invokes that dream regularly to remind workers why they're there. Prospective hires are told that the job will require stamina, including in job ads that candidates quote, "must be willing to work extended hours and weekends as needed." One major perk for all that hard work? Employees' access to equity, either the right to buy shares or payment in the form of restricted stock units that vest over time. That's the Bloomberg Tech Minute brought to you by ChatGPT. Get started at chatgpt.com.

• 1:39Speaker 02

  For big business, AI opened up a world of promise, but that world of promise turned into a world of pain. Costs spiraling, data trapped, security and governance risks multiplying, and ROI out of reach. That's why enterprises turned to Boomi to connect data, apps and AI, helping them operate securely, efficiently and at scale. Boomi turns a world of AI pain into a world of AI gain. As Boomi says, "We got you." Head to boomi.com. That's B-O-O-M-I dot com.

• 2:11Speaker 03

  Small businesses are the pulse of every community. They bring people together, create opportunities and drive growth. Chase for Business helps business owners like you with personalized guidance and convenient digital tools all in one place. With that guidance and your determination, you can take your business farther and help build a brighter future for your community. Learn more at chase.com/business. Chase for Business. Make more of what's yours. The Chase mobile app is available for select mobile devices. Message and data rates may apply. JPMorgan Chase Bank, N.A., member FDIC. Copyright 2026, JPMorgan Chase and Company.

• 2:51Speaker 04

  Bloomberg Audio Studios. Podcasts, radio, news.

• 3:07Joe Weisenthal?

  Hello and welcome to another episode of the Odd Lots Podcast. I'm Joe Wissenthal.

• 3:12Tracy Alloway?

  And I'm Tracy Alloway.

• 3:13Joe Weisenthal?

  Tracy, I love doing the podcast, but I'm kind of thinking about becoming a PhD level AI researcher. If I do a career pivot, it seems something I'm considering.

• 3:24Tracy Alloway?

  That's the place to be.

• 3:24Joe Weisenthal?

  Have you seen, have you seen like the salaries? Supposedly, I still don't actually believe them, but have you seen like the salaries and comp packages that supposedly Meta and a few others are paying for top AI talent?

• 3:37Tracy Alloway?

  I have seen some of the headlines. I have also learned a bunch of new words, like exploding offer and aqua hire.

• 3:43Joe Weisenthal?

  Oh, yeah.

• 3:44Tracy Alloway?

  And I always thought exploding offer sounds dangerous. What you want is an explosive offer that you can't turn down.

• 3:49Joe Weisenthal?

  But I take it the exploding hire is like one that lasts like five minutes?

• 3:52Tracy Alloway?

  Yeah, so you have to make a decision right away and the company that you're currently working for can't counter offer.

• 3:58Joe Weisenthal?

  So I read these headlines about some engineer or something getting paid 100 million or 250 million. I actually literally don't believe them. Like, I actually literally think that's fake news.

• 4:07Tracy Alloway?

  Really?

• 4:07Joe Weisenthal?

  No, but I kind of don't.

• 4:09Tracy Alloway?

  Don't you just think it's probably made up of like all this weird equity structure?

• 4:12Joe Weisenthal?

  Yeah, comp, but I'm sure it's not all up front. Anyway, we sort of seem to be in a moment, and it's actually not just AI. I would say journalism, finance, et cetera, where it's like the sportsification of a lot of different industries. Individual talent, the demand for individual superstars on anything doing very well.

• 4:32Tracy Alloway?

  I have a bunch of questions when it comes specifically to AI such as what makes an AI talent? Because I assume if you're Mark Zuckerberg and you're trying to assemble your AI dream team or something, okay, sure, you have like a level of technical insight and maybe you hear people talking about, oh, this one guy is fantastic. But I assume it's not like you can look at their like individual levels of code and you can't see what they're doing on like a daily basis. I don't know.

• 4:59Joe Weisenthal?

  I don't know either. I don't know anything about this stuff. But I'm really excited to say we do have the perfect guests, a couple of guys who are right in the middle of all of this and also who have sort of been ahead of the curve in terms of this, like I said, the sportsification of the industry. We're going to be speaking with John Coogan and Jordy Hayes. They are the co-hosts of TBPN. It's a live show podcast. It's become one of my favorite new media properties. It exists and I'm really excited. We have them both in the studio here with us today. So, John and Jordy, thank you so much for coming on Outlots.

• 5:34Speaker 07

  Thanks for having us.

• 5:35Joe Weisenthal?

  We're so excited to be here. I love, by the way, you guys like make these like baseball cards every time. So it's so clever. For those who are not paying attention, why don't you sort of give the high level overview of like what you see happening in this like crazy talent war? For people who don't know about this, what is actually going on? This talent war for people who know how to do AI or train a model or whatever it is?

• 5:58Speaker 07

  Yeah, the league or the mag seven, the serious teams are all worth over a trillion dollars. Tesla's in a different kind of boat some days, but pretty much there's multi- there's seven trillion plus dollar companies now. So there is an inordinate amount of money to flow around. And if you think about investing 0.1% of your market cap to make your business potentially 5% better, that's a trade you take all day. The number is staggering. But now you're seeing companies pay hundreds of millions of dollars. I think you mentioned that, you know, there's a lot of debate over whether that was fake news or not. They seem like they are very real offers and they are indeed happening. And there's a whole bunch of different ways that you can kind of underwrite that. But we could start with going through

• 6:43Speaker 07

  just a little bit of the history here of how we got into this place or what these AI researchers are actually doing. I'm happy to kind of answer any question.

• 6:51Tracy Alloway?

  Okay. Well, why don't we start with the baseball analogy then? If I was collecting AI engineer cards?

• 6:59Tracy Alloway?

  Who's the most valuable? Like, who do I actually want to have? And then, secondly, what are the stats that are printed?

• 7:04Speaker 08

  Sure, sure, sure. So, taking a little bit of a step back, talking about kind of this sportsification of tech and business, which has been a huge catalyst for our show. I think we realized early on, people would call TBPM the sports center for tech, or some analogy like that. We were a little bit, it sounded cool, we didn't really know what that meant. John and I don't watch sports at all, but from, for, for basically, for basically like two decades now, I'm in my late twenties, John mid thirties, and we've followed tech and business the way that our college friends follow sports. So, the comp, in sports, you have players, personalities, coaches, managers, leagues, teams, and, and people obsess over all the details. I never fully understood that.

• 7:49Speaker 08

  I mean, I, I understood kind of the draw, but it just was never for me. Whereas John and I would pick up the newspaper as teenagers, and we were tracking the, the talent, the CEOs, the companies, the markets, the industries. And it's just something that we obsessed over. And so, this year has been amazing as these AI researchers have been getting these sort of superstar max contracts, which is what we would call them. We would start joking on the show and be like, look, this guy just went over to Meta. It's probably, you know, four-year contracts, you know, one-year cliff. And it just got more and more and more real as the kind of demand for world-class AI researchers completely outstripped the supply. And we actually put out something a couple of days ago called the Metis List,

• 8:34Speaker 08

  and John can go a little bit more into, into the name behind that. It was kind of our take on the Midas List, which was, we built a list of top roughly 100 AI researchers and ranked them on a bunch of different factors. And so, when you talk about what goes into, what makes a great, you know, AI researcher, there's a bunch of different factors. One, that you can get right into the numbers with is like citations. So, if somebody's a researcher, they've been publishing, you know, studies, papers, et cetera, for quite a while at this point, and you can just see quantitatively what their contributions have been to the industry. And so, that's like a good starting point to understand. And historically, Elon even said earlier this week, honestly, it was like an hour after we posted the Metas list, probably unrelated, but who knows?

• 9:19Speaker 08

  He's basically saying that AI researchers and engineers, we're just going to call them engineers now. And that makes a lot of sense for someone like Elon to do as somebody who's always been very engineering focused, less focused on entirely net new innovation, more so how do we make the best possible versions of products that exist? And it's not to say that he hasn't innovated in a bunch of different ways, but it is a really wild moment in time. And it's been a fun moment because historically you hear about this Midas list investor making $2 billion of carry on some deal, or this founder IPOing today, we have the Figma IPO.

• 10:01Speaker 08

  And there's a bunch of people that are going to make billions of dollars there, but you don't hear about the 100th engineer that was hired making a $100 million signing bonus. And all of this makes a ton of sense in the context of what John said, because you look Metas up, I checked this morning, $195 billion new market cap. And think about how many $100 million signing bonuses you can make against that kind of market cap.

• 10:30Speaker 07

  Should we answer your question about who the?

• 10:32Tracy Alloway?

  Who's the best?

• 10:33Speaker 07

  Who's the white whale?

• 10:34Tracy Alloway?

  Who do I want to have in my collection?

• 10:35Speaker 07

  Who is the Michael Jordan?

• 10:37Tracy Alloway?

  Did you say white whale? Don't. From the novel Moby Dick. Don't say anything about whales or whale products or hunting large mammals. I'm tired of me hearing about Moby Dick.

• 10:47Speaker 07

  Perhaps he's the white whale, perhaps he's the Michael Jordan of AI researcher. But Ilya Sutskever is really, he's at the top of our list for a variety of reasons. And he, if you're not familiar with Ilya Sutskever, he is an AI researcher who was at OpenAI for a long time. And There's a few different ways to characterize him. He is both coming up with new ways to implement AI algorithms, the way you train the model. But he's also very good at, for a long time, identifying which, the shortest path in the tech tree. So there are, there are branches of choices that you need to make as you develop the new AI models.

• 11:28Speaker 07

  And he was very early at, while he was at OpenAI, he identified that the transformer paper from Google, he didn't invent that, it was at Google. But the transformer technology was extremely important and that it had the ability to do remarkable things when scaled up massively.

• 11:44Tracy Alloway?

  Yeah.

• 11:44Speaker 07

  And so he was the driving force between kind of identifying the transformer as a, as the correct path. Now we look back on Attention Is All You Need, which is the name of the paper that defines the architecture that is used in these modern large language models that you use when you're in chat GPT. There were 25 other potential paths that we could have gone down. He, you know, the story goes is that he really identified that and said, let's go really, really hard on that.

• 12:11Tracy Alloway?

  So he can sort of identify the innovation, what's new, and then also identify the most efficient path to actually execute on it.

• 12:18Speaker 07

  Yes. And if you're familiar with what the more, the more modern, so the first arc of LLMs and these chatbots scaling up, were really this, pick the transformer paper, understand that that's the correct architecture, and then scale it up really, really big. So you need to be able to not just write the code to implement that, that particular algorithm. You need to marshal the capital to say, we're going really, really big and we're going to build a big data center. We're going to spend a lot of money, but it's going to be worth it because we understand the trade offs here. Then the second kind of innovation or correct call he had was during the Sam Altman ouster and return, he was working on a project that was codenamed Q Star. And there was a lot of speculation about what Q Star was, was it the secret super intelligence?

• 13:03Speaker 08

  Everybody was saying, what did he see?

• 13:05Speaker 07

  Yes. Yeah. Because he, he was going back and forth in support of Sam Altman and then leaving. And then, and then he was back and forth and there was a lot of drama there.

• 13:12Tracy Alloway?

  Always keep them guessing.

• 13:13Speaker 07

  Always keep them guessing. For sure. And so there was, there was a lot of rumors, but what it wound up being was just reasoning, which is now what is available in, if you use any of the O three models in ChatGPT, or you use DeepSeek R1, and it's, it goes by a number of different names. The project was rebranded Strawberry and then the O series. And you can think about this as the test time inference is the other buzzword. But basically, the LLM, you're using the same foundation model, but you're running it a ton more to come up with a bunch of potential answers to questions and then narrowing that down and essentially applying what's called reinforcement learning to the transformer architecture and the pre-training that's happening.

• 13:57Speaker 07

  And so he was very critical in leading that project. And so that's allowed him to eventually, once he left OpenAI, go start a new company called Safe Superintelligence, SSI. And he's gotten that company to what a $30 billion valuation.

• 14:10Speaker 08

  Thirty-two billion dollar valuation. Which ties into the talent war because I think it's, I don't know that it's been officially announced yet, but people are expecting Daniel Gross to join Meta.

• 14:21Speaker 07

  Who was the CEO and co-founder of that company, SSI. And so back to your, back to the white whale question.

• 14:28Speaker 08

  Think about the dynamic here.

• 14:28Joe Weisenthal?

  Yeah, yeah.

• 14:29Speaker 08

  If you guys get together, they start a company. Within a year, it's worth $32 billion.

• 14:34Joe Weisenthal?

  Yeah.

• 14:34Speaker 08

  And one of the people on that team decides to actually leave and go join Meta. It sounds insane, probably leaving billions of dollars on the table. But you can kind of trace this talent war actually back to the OpenAI founding team. When you think about all the different players, right? You have Mira Maroti, who's now with Thinking Machine. She was the CTO of OpenAI. You have Ilya Sutskever with SSI. You have Elon with XAI. And not to mention, you have these sort of hyperscalers who are also competing for the same talent. So yeah, that's really kind of the origin story in the genesis. And it's been amazing to see OpenAI's progress despite, you know, the recent reporting is around, you know, losing a bunch of top researchers, which is real.

• 15:18Speaker 08

  But it wasn't that long ago that they lost like two very, very, very key senior execs in Ilya and Mira.

• 15:42Speaker 00

  What's next for virtual assets? I'm Jacob Rees, host of Economy Scale, a series exploring growth in key global sectors. And in this episode, we're diving into the digital forces shaping finance. Sean McHugh from Dubai-based Virtual Assets Regulatory Authority has this to say.

• 15:58Speaker 09

  We're seeing a lot of institutional players come in, digital asset dedicated hedge funds, high-frequency traders and that sort of thing, and folks who service institutional clients.

• 16:06Speaker 00

  As more capital enters the market, adaptive regulation is likely to become increasingly key. Reese Merrick of Ripple says.

• 16:14Speaker 10

  A lot of regulators globally would like to keep the industry at arm's length. That's the opposite here. I think also what you'll find is that regulation and frameworks can come out, but some of them are maybe a slight iteration on some 80-year-old policy and not actually in line with what the technology can do and offer. And again, that's very different in Dubai.

• 16:33Speaker 00

  Listen to the full episode wherever you get your podcasts. This series is brought to you by Bloomberg Media Studios and the Dubai Department of Economy and Tourism.

• 16:44Speaker 01

  This is the Bloomberg Tech Minute, brought to you by ChatGPT. I'm Carol Muster. Getting hired at SpaceX requires exceptional ability and may include having Elon Musk review a candidate's resume. So writes Bloomberg Businessweek's Lauren Grush. She reports that the company culture is defined by Musk and job candidates must understand that a commitment to SpaceX means adhering to this culture and exhibiting loyalty to Elon Musk. To get hired, candidates must demonstrate their achievements from past jobs and hands-on experience matters more to recruiters than advanced degrees, with the company looking for people with raw, innate intelligence. A spokesperson for SpaceX didn't respond to a request for comment on its recruiting

• 17:25Speaker 01

  and hiring practices, but according to recruiters, advisors and those who've interviewed for jobs there, it's the space exploration dream that draws people to the company. And Musk invokes that dream regularly to remind workers why they're there. Prospective hires are told that the job will require stamina, including in job ads that candidates quote, "must be willing to work extended hours and weekends as needed." One major perk for all that hard work? Employees' access to equity, either the right to buy shares or payment in the form of restricted stock units that vest over time. That's the Bloomberg Tech Minute, brought to you by ChatGPT. Get started at ChatGPT.com.

• 18:07Joe Weisenthal?

  So a few stats, we're recording this, by the way, July 31st. Meta came out with earnings last night. The stock is up like 10% and it's up like 150 billion more dollars. The other thing is, and I think this gets ties into the logic behind the comp. So they're going to spend like something like another 70 billion on CapEx and stuff like that. So we know these are incredibly computationally intensive things. They're electricity intensive things. You mentioned paper citations, but also actually having the experience of one of these runs. And it does seem very highly intuitive to me that if you've done it before, and if you could even cut down the cost of a training run or set up a big computer rack for You could pay for yourself very quickly.

• 18:52Joe Weisenthal?

  5% less, right?

• 18:54Speaker 07

  This is exactly what just happened in Meta.

• 18:56Joe Weisenthal?

  Then you instantly pay for your salary. I could say because, and this is different from the B2B SaaS era, right? Because you can, there's these huge CapEx costs. If you could just marginally improve the efficiency of that, that pays that 100 million seller's salary, doesn't it?

• 19:10Speaker 07

  And so this, this literally just happened right before Mark Zuckerberg went on the talent acquisition spree that he's been on for the last few months. Meta's main AI model is called Llama, and they've released a series of versions of that model. And Llama 4 was the latest and greatest, and it didn't go very well. And the rumors about why it kind of failed to deliver on expectations was that they kind of went down the wrong path in the tech tree. And they focused a little bit too much on pre-training and scale.

• 19:43Joe Weisenthal?

  Insanely costly. Make that error.

• 19:45Speaker 07

  So they've released a part of Lama four, but they have yet to release Lama four behemoth, which is their biggest model, the most, the most aggressive. And they had just like little details in the implementation, little choices of how you chunk the attention in the transformer model. You know, we're operating in this level of abstraction up here, talking about, you know, it's a prediction model. And then we talk about transformers a little bit. There are sub algorithms within these systems that you make the wrong decision and you could get a vastly different outcome.

• 20:16Joe Weisenthal?

  Electricity bill goes up by a hundred million.

• 20:18Speaker 07

  Exactly. So all of that money that was spent on that electricity and that, and that build out, of course, Meta can absorb that. But when you think about the cost of getting it correct.

• 20:27Speaker 08

  One thing is, is a lot of these projects will be energy constrained too. So efficiency is going to matter a lot. It hasn't been the core focus today. If you talk to anybody at the big labs, they are focused on maxing out intelligence at the cost of efficiency because they know they can, you know, you want to be on the bleeding edge. You want to have the smartest model. You want to be, you know, there's debates around which benchmarks actually matter, how important AI benchmarks really are. But energy is going to, you know, a lot of people are saying Zuck won't even be able to spend as much as he wants to spend on data center development purely because of the energy constraint.

• 21:06Tracy Alloway?

  Can you talk a little bit about what happened with Wind Surf? Cause this is, this is the one that seems to have like captured everyone's attention in part because there was the drama of, it almost seemed like it came out of like a Silicon Valley, um, the show script or something where all the employees were gathering, expecting to hear that they were going to be bought by OpenAI. And then they find out that actually their CTO has just been bought by someone else completely different and they're sort of left in the lurch.

• 21:31Speaker 08

  CEO.

• 21:32Tracy Alloway?

  Oh, was it CEO?

• 21:33Speaker 08

  And top fifty engineers.

• 21:35Speaker 07

  CEO and top fifty. Well, how about I give some prehistory on aquires and you can take, take us through that actual weekend. So there has been a trend of sort of these zombie aqua hires. Everyone has different names for this, but effectively when a very large company, usually a hyperscaler wants to go and acquire a company that has AI talent, they used to just buy Whole company and this was part of the Silicon Valley social contract that even if I am in operations or sales or finance or HR. If I join a hot startup and it gets acquired, I'm coming along for the ride.

• 22:07Tracy Alloway?

  You get the exit.

• 22:08Speaker 07

  And I get the job at Google, at least for a little bit. And then, yeah, if I underperform Google or Meta or Amazon, they might lay me off. But even if I'm somewhat redundant, I'm coming along for the ride and I'm cashing out my shares and these, the reason that you go and take the risk and take the little bit of the rougher ride that is a startup, you don't get as many amenities, but you get the lottery tickets in the form of stock options that hopefully pay out. But there's a big question about how much of this is the acquirer just not wanting to deal with the de-duplication of the back office. There's also the question of the FTC. A lot of the FTC rulings have made it much harder to get these, these big acquisitions across the finish line.

• 22:47Speaker 07

  And even if they, even if the FTC does approve, they can often hold it up for six months. And we're in a race where if you deliver the best model today, you're going to make more money, you're going to be the hot company, you're going to acquire, it's all this big snowball. So companies, this started with, there were a few, but Character AI was the big one with Noam Shazer, who was.

• 23:05Speaker 08

  And very, very interesting situation where, so Noam wanted to go back to Google, which made sense. Google wanted him there as well.

• 23:14Speaker 07

  He's one of the greatest AI researchers of all.

• 23:15Speaker 08

  Yes. And so having him go back there made a lot of sense. I think he had built this platform. He built like the first at-scale AI companionship platform. If you look at Character AI's site traffic today, I mean, it's, it's one of the largest sites on the internet still, which is wild. But I think he realized, I want to work on AI research. I don't want to work on AI girlfriends, boyfriends, that, that kind of thing. And as part of that deal, Character AI effectively became entirely employee owned. And they had a really strong balance sheet. They had a crazy amount of users. They weren't monetizing maybe that well yet. But I think a lot of the employees in that situation were like, this is pretty cool. We're basically running a co-op where we all own a lot of this company.

• 23:56Speaker 08

  We don't have investors. We don't have the same kind of pressure to perform. And that space is competitive, right? You've even Elon is, is competing there now. Chat GPT gets used as a companion, but not competitive like CodeGen. And so that was the dynamic here that was insane because Google clearly cares about code generation. They see Anthropic adding, they went from one to $4 billion in run rate. This year, they're pacing to be somewhere around 10 at the end of the year. And so that's a Google sized market, right? Google's going to ultimately care about CodeGen. So it made sense for them to say, hey, let's get, you know, 50 more hyper talented engineers. This is windsurf. This is windsurf we're talking about. The issue, though, is if you didn't get brought over to the Google ship,

• 24:41Speaker 08

  you were on what I was calling a ghost ship.

• 24:44Speaker 07

  Well, everyone who was pro the, this strategy, they would call it the remain co.

• 24:49Speaker 08

  I was calling it a ghost ship. But imagine you're at a company and the dynamic with windsurf was fascinating because the company, if you had joined in August of last year, windsurf, you could have, the product hadn't launched yet. So you could have worked and worked up to the product launch, launched it, seen this meteoric growth, the last reported number they had was something like 80 million of ARR. You have a term sheet to get acquired from OpenAI for $3 billion. And that falls through and then all these employees are looking around and they're like, wait, I didn't even hit my, I haven't even hit my one year cliff yet. I don't actually have a right to, I mean, they might technically own shares or options, depending on how it was structured, but they, as I'm sure everyone here knows,

• 25:34Speaker 08

  you oftentimes, like sometimes founders would, would try to accelerate their employees, get them compensated as part of a transaction like that. But there's not necessarily a contractual right to do that and it's part of a negotiation. And so in this case, you have this team that's effectively split up. And we were covering the whole thing live because we were hearing that, you know, employees that Friday were like crying and there was a ton of confusion and chaos and everybody was learning facts kind of over that 48 hour period. Luckily, our friend Scott Wu at Cognition, the company that ultimately bought the remain co, flew to meet the windsurf team, the new CEO windsurf and basically spent the weekend doing this insane deal. And it ended up being a great outcome, I think, for everybody involved.

• 26:19Tracy Alloway?

  Didn't like windsurf have their like marketing department in the room or something when they made the announcement? The initial announcement and everyone was like, because they were expecting to be bought by OpenAI, right? So they're like, we're going to film this for posterity. And then it turns out to be something completely different.

• 26:35Speaker 07

  Yeah, I believe the timeline is that, you know, Windsurf launches a year ago is in a knockout drag out fight with Cursor. Cursor is doing very well. They're also growing to 80 million or so.

• 26:47Speaker 08

  I mean, Cursor is in the hundreds of millions of revenue. And so Windsurf was very clearly the number two player in the AI IDE market.

• 26:55Speaker 07

  And so Cursor is staying independent, but OpenAI wants to continue to get a foothold in this space. So they make an offer. That falls through. The rumor was because Microsoft would have had IP look through exposure via the more complex OpenAI structure.

• 27:13Speaker 08

  Which is ongoing.

• 27:14Speaker 07

  Which is, can't be ongoing. And then when when Google came through, they said that they wanted just to buy the team, leave the remain co because it's potentially cleaner from an FTC perspective. But there's a whole bunch of different reasons and no one really comments on exactly what happens. But when these deals happen, this just happened with Scale AI and Meta. The CEO, even though there's some sort of amorphous FTC risk, the the CEO, if they're going through one of these zombie acquisitions, does have the ability to kind of set the team up with certain expectations and say, hey, we're going to take care of you. Trust me. You're going to get a check that you would expect based on your ownership. So if you own 0.01% of the company, you you would expect that you get X of the headline number.

• 27:59Speaker 07

  And yes, it's coming to you. The weird thing about the Windsurf deal was that that was not messaged. And so there was there was like this, the zombie ship was more zombified.

• 28:10Joe Weisenthal?

  So like.

• 28:10Speaker 08

  Well, yeah. And imagine, imagine you're in a, you're in a hyper competitive market where you're competing with Google and Anthropic and Cursor and all these different players. And then you lose your CEO and your top 50 engineers. And they're like, you guys are going to do.

• 28:25Joe Weisenthal?

  Against Cursor.

• 28:25Speaker 08

  Don't worry. You guys have a strong balance sheet. You guys are going to do great. And we're also going to be, we're also going to be competing with you at at at Google, but you guys are going to be fine.

• 28:35Joe Weisenthal?

  Good luck, guys.

• 28:35Speaker 08

  And so, and.

• 28:36Joe Weisenthal?

  Great. Thanks. Thanks for the help.

• 28:37Speaker 08

  Yeah.

• 28:38Joe Weisenthal?

  But but this, but like, okay, cognition came in. It sounds like all the employees will get something. It's not the end of the world.

• 28:44Speaker 07

  Yes, because there was cash on the balance sheet that got divvied out.

• 28:47Joe Weisenthal?

  But it didn't have to be that outcome. And so there's two things here that strike me. One is, again, this does not seem like the B2B SaaS era where it's like, if you created the hottest billing product for dentist offices.

• 28:59Speaker 07

  Yeah.

• 29:00Joe Weisenthal?

  And that was gathering traction. No one would like just buy the talent that built that.

• 29:04Speaker 07

  Totally.

• 29:04Joe Weisenthal?

  So that's really different, right?

• 29:05Speaker 07

  Totally, totally.

• 29:06Joe Weisenthal?

  Because the ability to take value out via the talent channel rather than buying the product itself. But then also, and I'm just, you know, the knock on effects. Okay, fine, the Windsurf employees did fine. But going forward, there's no guarantee that they could have. And so I'm wondering from either a VC perspective or a future employee's perspective, how this is going to change the sort of calculation that anyone makes when participating in a new AI startup, the fact that the enterprise may not be where the value actually is.

• 29:34Speaker 07

  So the first question is like, this kind of is the example you gave of like buying the team that built the dentist B2B SaaS because Windsurf does not train foundation models and Google is exceptional in training foundation models with Gemini and DeepMind. The DeepMind team is extremely well staffed on AI researchers and continually seems to push the frontier, both in qualitative and quantitative metrics.

• 30:00Joe Weisenthal?

  And if they were weak anywhere, it was maybe product.

• 30:02Speaker 07

  Exactly. And so this is the, like, I don't want to be like, they're just product people. Windsurf has some amazing AI researchers, some amazing AI engineers. But what Windsurf really did, they did not train a frontier model that was about to disrupt Gemini.

• 30:18Joe Weisenthal?

  Yeah.

• 30:18Speaker 07

  DeepMind's foundation model. They were going after, you know, would you use a Google product? No, you would use Windsurf on top of Anthropic or another foundation model.

• 30:29Speaker 08

  And ultimately, I don't, I don't think it's a systemic risk to the social contract of our industry. And the reason for that is that when you see a deal like the Google Windsurf deal get done, it was very concerning. A lot of people were extremely angry. It ended up being a good outcome. A lot of employees were looking around, probably concerned about, you know, is the million dollars of stock that I've been working for for years worth anything at all? I think that was a good question to ask, but. I think there's two things. One is this AI is a category and of course it's touching kind of every category of venture in the private markets, but we're not seeing you're not seeing a defense tech founding team or engineering group get there's no real

• 31:13Speaker 08

  aqua hire value there. The aqua hires that are getting done in hard tech are hey, you clearly have good engineering capabilities. We're happy to have you join the team, but there's no like real premium being placed on that kind of talent might be able to get a great comp packages, but they're certainly not getting these sort of multi hundred million dollar premiums. The other factor here is like, we have a set like, right now, if you are one of the top hundred AI researchers, you could probably get a hundred million dollar comp package like within a week if you really wanted it, right? And there's even people that are at thinking, you know, the reporting from this week was that, and it was kind of hotly debated, but that people at Thinking Machines, Mira Marathi's company, former CTO of OpenAI, were turning down these sort of hundred million, multi hundred million

• 31:58Speaker 08

  dollar. There was a rumor that somebody had turned down a billion dollar, five year contract. And I don't believe that those deals will be getting done in three years. Now, I might be wrong, and there's going to be like probably some exceptions, but the idea that the 30th AI researcher on your team is going to make more than a mag seven CEO, like that doesn't feel hyper sustainable.

• 32:23Speaker 07

  Tim Cook has to make more money.

• 32:25Speaker 08

  Yeah, so Tim Cook has to make less.

• 32:26Joe Weisenthal?

  Tim Cook is looking dramatic. There have been existences on Wall Street where like a top trader, top dealmakers consistently make more than or will often make more than the CEO.

• 32:35Speaker 07

  Yeah, citadel.

• 32:35Tracy Alloway?

  Oh, absolutely. Because they're the ones that got the money in the door.

• 32:37Joe Weisenthal?

  Yeah.

• 32:54Speaker 01

  This is the Bloomberg Tech Minute brought to you by ChatGPT. I'm Carol Muster. Getting hired at SpaceX requires exceptional ability and may include having Elon Musk review a candidate's resume. So writes Bloomberg Business Lauren Grush. She reports that the company culture is defined by Musk and job candidates must understand that a commitment to SpaceX means adhering to this culture and exhibiting loyalty to Elon Musk. To get hired, candidates must demonstrate their achievements from past jobs and hands-on experience matters more to recruiters than advanced degrees, with the company looking for people with raw innate intelligence. A spokesperson for SpaceX didn't respond to a request for comment on its recruiting and hiring practices, but according to recruiters,

• 33:39Speaker 01

  advisors, and those who've interviewed for jobs there, it's the space exploration dream that draws people to the company, and Musk invokes that dream regularly to remind workers why they're there. Prospective hires are told that the job will require stamina, including in job ads that candidates quote "must be willing to work extended hours and weekends as needed." One major perk for all that hard work? Employees' access to equity, either the right to buy shares or payment in the form of restricted stock units that vest over time. That's the Bloomberg Tech Minute, brought to you by ChatGPT. Get started at chatgpt.com.

• 34:18Speaker 02

  This is the Bloomberg Market Minute, brought to you by Comcast Business. The markets faced plenty of challenges this year. Rising energy costs, higher interest rates, pushback to massive artificial intelligence spending. But through it all, stocks keep breaking records, and some analysts think they still can with a focus on the fundamentals. Nadia Lovell is head of Global Equity Strategy at UBS.

• 34:39Speaker 11

  Earnings has been good and continues to be good. And while, you know, we might be past the peak in earnings growth, we're not past the peak in earnings level.

• 34:48Speaker 02

  But others like Miller Tabak strategist Matt Maely say those challenges could eventually lead to a downturn.

• 34:53Speaker 12

  Whenever we see a significant rise in bond yields like we have, and a significant rise in oil prices like we have, the stock market always, or pretty much always, ignores it for a while.

• 35:04Speaker 02

  And Wall Street may be starting to take notice. A recent Citigroup index shows more analysts cut rather than raise their earnings forecasts for corporate America for the first time in more than five months. That was the Bloomberg Market Minute, brought to you by Comcast Business, one partner powering 90% of the Fortune 500 and millions of small businesses. When you add it all up, no one does business like Comcast Business.

• 35:31Tracy Alloway?

  Can you talk a little bit more about, I guess, the fungibility of the IP here in both the practical and legal sense? So if I'm a VC or some sort of investor, I invest in an AI company because I get to own that technology, that intellectual property. But then, let's say, the main guy walks out the door, gets hired by Google or whoever. Like, how much of what he learned at his original firm or developed is immediately going to be replicated at Google?

• 36:00Speaker 07

  Almost all of it.

• 36:01Tracy Alloway?

  Yeah, I guess this is like, this is a long-winded-

• 36:03Speaker 07

  And that's exactly why they're paying that much money.

• 36:04Tracy Alloway?

  This is a long-winded way of saying, how many lawsuits are we going to get after all these aqua hires?

• 36:10Speaker 08

  So I think one way you can look at some of Zach's deals are like unauthorized aqua hires. It's like the other CEO is not even participating in the deal, but, you know, Zach is able to come in and be like, would I pay, if this, if these 10 people were working on a company independently, would I pay a billion dollars to bring them on to my team? 100%. Okay, let's do the deal. It doesn't matter that you're kind of piecing it all up from a, I think, going back to like the kind of Wall Street example of like a top trader who maybe is like putting up consistently incredible returns with some sort of like differentiated approach, that person can go and as long as they have capital at the new company, they're going to be able, I imagine, to continue to just follow that same type of strategy. I do think that AI and large language models are somewhat different

• 36:54Speaker 08

  in that you have to look at what is the AI product that these companies are going to sell, how much of an impact is that individual engineer researcher going to have. And, you know, it's fairly obvious with OpenAI, they're a consumer tech company, right? They sell subscriptions to ChatGPT. They have some other use cases. It's obvious at companies like Anthropic, where they're in the code generation business, they don't really have a consumer business. And at Meta, it's a little bit less clear right now because the sort of ongoing product strategy is not entirely clear yet. The thing that is obvious is that if you can make a $20 billion training run more efficient, then you pay for yourself pretty quickly.

• 37:33Tracy Alloway?

  We should just point out, the Wall Street analogy is not perfect, right? Because if you're a high flyer at a Wall Street firm, either client-facing or if you're trading, if you join someone else, you usually have a non-compete agreement in one form or another. You can't take all your existing clients with you. And then B- You're often on an enforced gardening leave for a really long time.

• 37:52Joe Weisenthal?

  Oh, yeah.

• 37:53Tracy Alloway?

  I imagine in the massive race that is AI at the moment, there's no gardening.

• 37:58Speaker 07

  Also, the nature of the intellectual property, I believe, is a little bit different still. I think of this, I think it's a 2012 example from Citadel in Chicago where a high-frequency trader stole some code.

• 38:10Tracy Alloway?

  Yep.

• 38:11Speaker 07

  And they sent, and he had it on his hard drive. You know this story?

• 38:15Tracy Alloway?

  Yes, it was really famous when it happened. He like sent it to himself or something.

• 38:18Speaker 07

  Yeah, yeah. So he exfiltrated some code, some very, you know, definitive code of how to make money in the market and get an edge. And they, he figured out that they were on his trail and he threw his hard drive into the river and they sent scuba divers into the river and got it back.

• 38:33Tracy Alloway?

  I didn't know that part.

• 38:34Speaker 08

  The other high-profile SV example was the guy going from Google self-driving to Uber.

• 38:40Joe Weisenthal?

  Oh, yeah.

• 38:41Speaker 07

  Yeah. And so, and so taking specific code, that's not happening.

• 38:45Tracy Alloway?

  Okay.

• 38:45Speaker 07

  I mean, there's probably going to be like one example of this that pops up, but mostly it's just you get someone who says, I understand that at my previous job, we scaled up the transformer a little too far and we didn't focus on reasoning enough. And so we need to shift this spend to test time inference. And it's almost like you're leaving, you're leaving a company and you're, and you're just, you're, you're leaving with like a mindset of, of like the right balance of capex to opex or something like that.

• 39:11Speaker 08

  What was the recent Jane Street example that came out in that lawsuit around, was it the trading strategy?

• 39:16Speaker 07

  Oh, yeah.

• 39:17Speaker 08

  It only, we, we only really all learned what was happening because there was this lawsuit over, over basically the team bringing over some type of IP or methodology.

• 39:28Speaker 07

  Yeah.

• 39:29Joe Weisenthal?

  Can we talk about like the broader sort of economic world right now? Cause there's a bunch of other sort of things going on and things that you talk about, touch on them.

• 39:38Speaker 08

  Last, last thing, because I think it's pretty interesting. So we put out the Metis list, I think it was Monday. And we immediately had a ton of inbound from a lot of these researchers, basically like. Critiquing like the ranking, right? And the ranking was like, we got, we got people that work in AI to kind of like rank them.

• 39:55Joe Weisenthal?

  This is the beauty of ranks. You do, you get so much sourcing.

• 39:58Speaker 08

  It's amazing. I understand like every capital puts out market maps now.

• 40:01Joe Weisenthal?

  This is the beauty of ranks.

• 40:02Speaker 08

  And there's one, uh, there, there was one example that was interesting where somebody that was ranked fairly high that I know has gotten one of these nine figure comp packages. And somebody that worked with him basically said, this person was kicked off of every team they worked on. And just like effectively like over a multi-year period, like consistently demoted over and over and over. And now, now like got, you know, this incredible.

• 40:29Tracy Alloway?

  Please can you factor in soft skills into your rankings?

• 40:32Speaker 08

  Well, yeah. And, and it was, it was more of like a technical ability thing. It was not even, cause I, I think soft skills.

• 40:37Tracy Alloway?

  It wasn't just he was a jerk.

• 40:38Speaker 08

  Soft skills are getting a little bit, uh, you know, they don't, they don't.

• 40:41Tracy Alloway?

  No one cares about those anymore.

• 40:43Speaker 08

  You don't care that LeBron James like might get a little angry at somebody if they underperform, right? Yeah, sorry.

• 40:48Joe Weisenthal?

  No, no, no, no, no. That's great. So this phenomenon of like superstars, like it's not just, it's not just in tech. And like we see it, I mentioned in journalism where, you know, the sort of like median reporter job in a newsroom. A lot of that's hollowing out, but you have some people who've become insanely well compensated either because they're really smart and they write a great newsletter, or they're really good looking and they can do front-facing video, et cetera. Or, you know, like the four of us, you know, like can do something on video or something like that. You see it in a range of areas and then like the amount of betting that's going on, which of course adds to this. And so the fact that all of these events, there's some market out there that you can bet on that.

• 41:28Joe Weisenthal?

  And I'm curious, like from your coast, you know, you're here in New York, but from your coast, what does the world look like in terms of just like the state of this economy?

• 41:36Speaker 08

  Yeah, there's something interesting going on in tech where.

• 41:39Speaker 07

  The idea of a company going from a hundred billion to a trillion seemed unfathomable.

• 41:43Speaker 08

  Yeah.

• 41:44Speaker 07

  And there's this take that in fact, that was the easiest 10x of all.

• 41:48Speaker 08

  Huh.

• 41:48Speaker 07

  Where the hardest 10x was going from zero to one, from going to zero to a million dollars and getting these systems, inventing PageRank. And then, once you had Google humming at a hundred billion dollar market cap, getting to a trillion, not to, you know, knock on the work that they did to get that.

• 42:04Speaker 08

  Sure.

• 42:04Speaker 07

  But, but these, the, the, the numbers have just kept growing and growing at internet scale, at internet speed. And so the, the leverage that you're getting from an AI researcher is ever more increasing. And it just adds 10x every couple of years.

• 42:19Speaker 08

  Yeah.

• 42:19Speaker 07

  And so you're seeing the comp packages increase that way.

• 42:22Speaker 08

  We have a couple of things, like the internet is the greatest distribution engine for information and digital products and apps and services ever. And so at least in venture, that just means that everything is faster now, even in media too. If you're, if you are, somebody's working at, at a, at a legacy media company and they set up a Substack, they can get a million dollars of ARR on the first day that they launch. If somebody is working at a media company and, and really good at a certain type of YouTube video, they can launch and immediately the YouTube algorithm will serve that video to all of their fans within the first week.

• 42:58Joe Weisenthal?

  Hmm.

• 42:58Speaker 08

  And that, what that does is it, it, it just changes, you know, the power dynamic between media companies.

• 43:04Speaker 07

  So you see this, you see this leverage come in through financial markets. If you can lever up or, or just marshal more capital, one idea can generate billions of dollars in value. Same thing in technology, but we aren't seeing it everywhere. I don't think we're seeing it in hard skills woodworking, like unless you get into true like art territory. But there is this interesting question about like, what's up next? And we were kind of noodling on like, there might be a law firm in the future that's extremely high leverage in the same sense that you might have a lawyer who's so good at what they do and they are so good at resolving these and then, and then the connections and everything that they're doing, they're making billions, but they have a very, very lean team. And so you see a much, a much steeper power law in, in law.

• 43:49Speaker 07

  And there's a, there's a number of other professional services that are going through like a transformation with technology, bringing increased leverage to the profession. And that could drive more of that power law outcome in terms of earnings.

• 44:02Speaker 08

  Yeah, the, the thing, you know, in the private markets on, on the West Coast, which is the dynamic right now that's fascinating is like, I feel like a lot of people have like a little bit of PTSD from the 2020 to 2022 era, where many of the things that in hindsight were incredible top signals are like all popping up again right now. And like, we like, we like trap, we track them just for fun. We're not in the business of like calling, calling the top or anything like that. And in many ways, it feels like, you know, there, there's so many positive indicators, but the interesting dynamic in, in venture is like, as, as an angel investor, I've invested in probably 65 or so different companies at the pre-seed to series A stage.

• 44:43Speaker 08

  And there was a bunch of deals that I did in 2021, 2022, that ultimately like I paid too much or just like the team wasn't good enough to execute against the vision they had. But there was also just like a handful of deals that I did that, that have been, you know, performed so well that it doesn't matter that I did a bunch of silly deals. And so venture right now is this interesting kind of dynamic where everybody knows that it's crazy, right? You have hundreds of billions of dollars of, of value created in the private markets that there's a lot of real revenue growth, but there's also hundreds of billions of dollars of value tied to zero revenue, right? And I think that there's something that we've been tracking is like this underlying kind of feeling from people that are maybe under 30 of, there's like this meme that's become very prevalent.

• 45:28Speaker 08

  And I think it explains a lot of economic activity today, which is young people feel that they have two years to accumulate capital to escape the permanent underclass. And so I think that drives a lot of investing activity today in that, you know, you'll see young people on the timeline saying that, like, you'd be stupid not to use leverage, you know, and they're, and they're just like, you know, they're not a professional investor in any capacity.

• 45:55Speaker 07

  Don't do it.

• 45:57Speaker 08

  And, you know, any, anytime you have people in venture making public market stock predictions, we get a little concerned.

• 46:05Tracy Alloway?

  Are we going to get AI talent agents? Not AI agents, we have those already, but AI talent agents? Because like

• 46:11Speaker 07

  We do.

• 46:11Tracy Alloway?

  So

• 46:12Speaker 07

  We do. They're called venture capitalists.

• 46:14Tracy Alloway?

  Oh, well.

• 46:15Speaker 07

  But yes.

• 46:16Tracy Alloway?

  This was gonna be my next sentence. So if the money is no longer in, you know, I invest in a startup and eventually they get the exit. They get acquired or they list or whatever. If the money is in, eventually the guy that started the startup gets bought by someone like Meta or whoever. Wouldn't I invest my money in that person versus in the startup itself?

• 46:36Speaker 08

  indentured services.

• 46:37Speaker 07

  Yeah, you can't quite do that, but there are a ton of roles that are indexed to these high performance packages. And yes, there are people right now in Silicon Valley who are effectively talent agents who get a cut of those big packages. And they help negotiate.

• 46:52Tracy Alloway?

  What are they called? Just talent agents?

• 46:54Speaker 08

  Called venture capitalists.

• 46:55Speaker 07

  No, no, no. So you can, you can, if you find, if you find a great researcher and you think that, okay, maybe they will build a business, but I'm sure that they are going to be worth hundreds of millions of dollars a year. And you can just invest in their company. You will almost certainly see a good return on that investment, even if the product never gets to scale. Because when they get an aqua hire, you will get a payout.

• 47:17Joe Weisenthal?

  Other scouts going to Carnegie Mellon.

• 47:19Speaker 07

  The I M O gold medal.

• 47:21Joe Weisenthal?

  And like going there and like finding the sophomores who are like.

• 47:25Speaker 07

  Oh, absolutely.

• 47:26Speaker 08

  No, it's now, it's now so normalized to invest in college dropouts that you actually see people like investing in high school students.

• 47:34Speaker 07

  I'm not kidding about this. So the I M O gold medal is the math Olympiad.

• 47:38Tracy Alloway?

  Yeah.

• 47:38Speaker 07

  And there are venture capitalists who will give calls to every single student that performs well on the, on the math Olympiad. And these are high school students.

• 47:46Tracy Alloway?

  So do they, what are these investments exactly? Like, are you funding their tuition or whatever?

• 47:51Speaker 07

  It's, it's, I am taking 10 or 20% of, of a company, of a Delaware C corp, most likely.

• 47:57Tracy Alloway?

  Yeah.

• 47:57Speaker 07

  That, that you will build something in and who knows where it goes. Maybe it turns into a great business. Maybe it turns into an aqua hire. But the downside is extremely limited because there's always this, at least right now, there's this aqua hire. There's this aqua hire on the table where. It used to be that if you

• 48:15Speaker 08

  But to be clear, that is only in AI.

• 48:17Speaker 07

  Yes.

• 48:17Speaker 08

  It's only for the the people that that you would consider to be the top 500

• 48:23Speaker 07

  Yes.

• 48:23Speaker 08

  in their industry.

• 48:24Speaker 07

  So to go back to the cursor windsurf thing, like Instagram was the power law winner, got the billion dollar acquisition from Meta. Hipstomatic was the second largest photo filtering app, did not get a billion dollar aqua hire from Google, right? But now we're in the market where if there's a leading product with a bunch of AI researchers over here and they get a multi billion dollar acquisition for the product and the product's working and it's growing and it is a great business and you buy it for the value of the business, then the second best team might get acquired just for talent, which is a completely different downside protection.

• 48:55Speaker 08

  Yeah, and there's a lot of talent acquisitions, traditional aqua hires where it's only the talent that benefit, right? In the sense that they get basically a job offer at the new company. Right. And VCs get some capital back or in some cases, a small amount of money.

• 49:10Joe Weisenthal?

  Um, can I ask a TBPN question? This should be like the ultimate compliment, which is that I got a DM from some random person, I had never seen them the other day. And he said, um, I can build TBPNs for X.

• 49:25Speaker 07

  Yeah.

• 49:26Joe Weisenthal?

  So like that's that stack, that sort of life thing, which means it's sort of like it's become like Kleenex.

• 49:30Speaker 07

  Yeah, yeah.

• 49:31Joe Weisenthal?

  Or one of these things where it's like a category.

• 49:33Speaker 07

  Yeah.

• 49:33Joe Weisenthal?

  And where are you going with it? What are your plans for it?

• 49:36Speaker 08

  It's so funny that people are calling it TBPN for X because our show, while it's unique in a variety of ways, looks very much like traditional television.

• 49:46Joe Weisenthal?

  Yeah, it does, which is interesting.

• 49:47Speaker 08

  And so we can't, we can't take credit for inventing business television.

• 49:51Speaker 07

  We invented TV, we invented media, we invented ads.

• 49:54Joe Weisenthal?

  But there has also been live streaming before and like, normally it doesn't really, I don't know, it's like, why would I watch cable news on online?

• 50:00Speaker 08

  I think the thing that's exciting is that in the private markets and venture and tech, if you had a podcast, there was one format, which was a once a week interview show. And it was a great strategy to do that 10 years ago, around the time that you guys were here. No, and it still works.

• 50:18Speaker 07

  Now you're living it, you're gonna stick around forever. You're locked in.

• 50:21Speaker 08

  Established talent.

• 50:22Speaker 07

  But if we, if we tried to clone this, everyone would be like, why is that a knockoff? There's nothing new about this, nothing fresh about this, like, why, why do I want to go on your knockoff? I just go on the real thing.

• 50:31Speaker 08

  Yeah. And so, so our edge in, in launching the show at the beginning of the year is that Media is not zero sum. Content is not zero sum. We have a friend that jokes that he's so competitive, he wishes media was zero sum. It was truly zero sum. But our edge early was that we just took it 10 times more seriously than anyone else. So, everybody that was creating content for the private markets was doing it as a part-time gig and we were happy to compete with a bunch of people that were part-time.

• 51:01Joe Weisenthal?

  Yeah. You know what actually I was wondering, in 2021 or 2022, that craziness, someone once reached out to me and they were like, you know what, you should like...

• 51:13Speaker 08

  Bitcoin treasury.

• 51:14Joe Weisenthal?

  No. You should go direct, it was probably the pitch. No, but this was the interesting thing. He said, you should go independent and what you should do is attach a VC arm to it. And because of the quality of the guests that you could get, you would get really good access to deal flow. But it seems like basically, it's very uncomfortable to me because I'm not gonna like, highlight startup founders and say, oh, you're the perfect guest. And it's like, because like, I have like 5%. Yeah, so we're obsessed with this idea. But I'm curious about, because you mentioned doing Angel, the sort of link, TBPN at some point would be like a...

• 51:46Speaker 08

  So, Angel Investing is...

• 51:48Joe Weisenthal?

  Connect to an investing platform.

• 51:49Speaker 08

  Angel Investing, I look at as a hobby. It's not a great financial activity, right? Locking up capital. Locking up, I mean, like, you can generate great returns, but it's not the most logical way to invest your time, but it's really fun. Like, we just enjoy supporting founders early when it's an idea and a team and it's just, it is genuinely addicting. I always joke about people in San Francisco with Angel, you know, people across the country, sports betting addictions, San Francisco, you know, Angel investing addictions are, I think, real. But for us, for us, that was, you know, as we started having some success, a lot of people, they would probably get a message a day, when's the fun coming? When's the fun

• 52:31Speaker 08

  coming? And that's been a way to monetize an audience within tech. If you have an audience, go raise a hundred million dollar fund, you get the fee stream.

• 52:39Joe Weisenthal?

  Some stackers do that.

• 52:40Speaker 08

  You get a bunch of upside. And we joke, because we have, the show's every single day, we go live at 11. We have to eat, we have to... Workout.

• 52:51Speaker 07

  Prep the show.

• 52:51Speaker 08

  We have to prep the show. We have to talk with partners. We have to manage our team. There's all these different things. And so somebody might immediately think, okay, these guys talk to six founders and investors a day. They have this like media property that like, I think everybody in venture now is going to see our content like once a week in some form or another, if they're, if they're online. But I joke with them. I'm like, so we're live for three hours every single day during the middle of the day. And so if, if you think that we with a show would, would effectively compete at VC is about winning allocation, right? You can be cool and, and connected and have an audience. That might get you a hundred K allocation.

• 53:33Speaker 08

  But if you have a hundred million dollar fund, you need to be putting size into deals. And so I know that if John and Jordy have a VC fund and we're competing with these other guys that have a live show, that they're live for three hours a day and they have a VC fund, we'd smoke them because we were like, okay, while they're live, I'm going to fly to the founder, I'm going to meet with them and we're going to win this deal. And we're going to be like, yeah, why don't, why don't you let them put in like 200K?

• 53:55Tracy Alloway?

  So the thing to watch out for, for when the VC fund is coming is when you start reducing your live hours. That'll be the sign.

• 54:02Speaker 08

  Yeah. And I think, I think we, we didn't get into this to start a fund. And I think there's a lot of people that get into content because they see it as a way to do that. And we just love talking about tech.

• 54:12Speaker 07

  That actually was the key insight was that not enough people, yeah, it's very fun, but not, but very few people in tech were actually taking media seriously.

• 54:20Speaker 08

  Yeah.

• 54:21Speaker 07

  It, it was, everyone had a fund, everyone, that was the high status thing. And doing media was like lower status or people didn't think it, we could have as much of a power law outcome as it very clearly can. And so this idea of, of just what if you actually took it completely seriously and just made it the main thing and had no distractions.

• 54:40Speaker 08

  So we've had a bunch of people copy our format, you know, major legacy media companies all the way through friends of ours. It doesn't really bother, I mean, it bothers me more than John, but, but at the end of the day, if you want to spend. You're the Tracy, by the way.

• 54:55Tracy Alloway?

  Yeah, it bothers me too. I totally get it.

• 54:58Speaker 08

  And so it's like, we basically know, so, so John and I, John and I basically hang out for 12 hours a day and the entire time. Me and Tracy. The entire time we're thinking, we're thinking about the show. We're just talking about, the show doesn't look very different than when we're hanging out offline. And so I just joke, I'm like, okay, if you want to compete with us and you're willing to put a hundred hours a week in, by all means, go for it. Like this is probably your life's work. But if it's not, good luck.

• 55:26Joe Weisenthal?

  It doesn't matter. John Coogan, Jordy Hayes, thank you so much for coming on Odd Lots. Thanks for having us. And congrats and good luck and looking forward to continue watching TBN.

• 55:37Speaker 08

  We'll be live from Nicey later.

• 55:39Tracy Alloway?

  Oh, nice.

• 55:40Joe Weisenthal?

  This is for the Figma IPO.

• 55:42Speaker 08

  Figma IPO and Odd Lots in the same day.

• 55:44Joe Weisenthal?

  What a day. What a day. And in the wake of Meta.

• 55:47Speaker 08

  Pinch me.

• 55:47Joe Weisenthal?

  Yeah. All right. Thank you for having us. Thank you so much for having us.

• 56:04Joe Weisenthal?

  Tracy, that was a lot of fun.

• 56:06Tracy Alloway?

  It was. A little bit media navel gazing, but that's fun.

• 56:09Joe Weisenthal?

  A little bit media navel gazing. I mean, there is this thing that's happening. It's been happening in media for a while. And of course, it happens in Wall Street, but and now happening in AI where you just have a lot of talented people and they wonder about the degree to which they need their existing platform. They're, you know, like a star banker can take a book of business or a star lawyer can take a book of business. And in the case of AI, it's not taking a book of business, right? Because they don't have like their individual clients.

• 56:40Tracy Alloway?

  Right.

• 56:40Joe Weisenthal?

  But it's this knowledge and transport it and it's instantly worth a lot of money for someone somewhere else.

• 56:46Tracy Alloway?

  The thing I thought was really interesting about that discussion was the emphasis on how capital intensive all of AI is. And so that kind of changes the economics of why you're paying such massive money for someone who's able to like eke out even a slight efficiency ends up being massive.

• 57:03Joe Weisenthal?

  This is huge. This was like, this, it suddenly is what made it all made sense to me, right? Because we know about like how costly one training run is, right? And we know just the insane numbers for data center setup, et cetera. And I'm sure there's progress being made on the literal design of like how you string together Nvidia. GPUs, et cetera. And so if you could get some marginal, if you know, have that know how to get some marginal improvement out of it. And this is fundamentally what was

• 57:32Tracy Alloway?

  One trillion dollars for you.

• 57:34Joe Weisenthal?

  Maybe?

• 57:34Tracy Alloway?

  Not a trillion.

• 57:35Joe Weisenthal?

  No, not a trillion, but like, this was not the case when tech was not so capital intensive in the 2010s. Where, yeah, I'm sure talented people always made a lot of money and there's always improvements. But where it's so, that link between some sort of efficiency gain and instant cost savings is so linear and so straightforward.

• 57:55Tracy Alloway?

  Yeah. And I take their point that, okay, VCs exist and they're already investing in some ways in specific talent. But I do kind of wonder if you're going to get some sort of like specialized headhunters, at the very least, who are going to like seek out these big AI talents and try to like graft themselves onto them.

• 58:11Joe Weisenthal?

  Yeah, or just people whose expertise is in reading through underscited, underscited AI research papers.

• 58:20Tracy Alloway?

  Approach to AI research.

• 58:21Joe Weisenthal?

  Yeah, well, we can't give you Sam Altman, but what if we could replace Sam Altman in the aggregate?

• 58:25Tracy Alloway?

  This guy has 50 citations in the following papers. Um, should we leave it there?

• 58:30Joe Weisenthal?

  Let's leave it there.

• 58:30Tracy Alloway?

  This has been another episode of the Odd Lots Podcast. I'm Tracy Alloway. You can follow me at Tracy Alloway.

• 58:36Joe Weisenthal?

  And I'm Joe Weisenthal. You can follow me at the Stalwart. Follow our guest Jordy Hayes. He's at Jordy Hayes. And John Coogan at John Coogan. And check out TBPN at TBPN. Follow our producers, Carmen Rodriguez at Carmen Armin, Dashell Bennett at Dashbot, and Kale Brooks at Kale Brooks. And for more Odd Lots content, go to Bloomberg.com/oddlots. We have a daily newsletter and all of our episodes. And you can chat about all of these topics 24/7 in our Discord, discord.gg/oddlots.

• 59:04Tracy Alloway?

  And if you enjoy Odd Lots, if you like it when we talk about the sportification of AI talent, then please leave us a positive review on your favorite podcast platform. And remember, if you are a Bloomberg subscriber, you can listen to all of our episodes absolutely ad free. All you need to do is find the Bloomberg channel on Apple Podcasts and follow the instructions there. Thanks for listening.

• 59:55Speaker 13

  If you're a business owner, you need a card that can keep up. With the Delta SkyMiles Reserve Business American Express Card, everyday purchases transform into miles you can use towards future travel. So business as usual can lead to a well-deserved getaway. And for a limited time, card members can earn 200,000 bonus miles, the highest miles offered this year. Whether you're traveling for business or planning your next adventure, now's a great time to make every purchase go further. Apply today at www.delta.com/podcast. Offer ends November 4th. Minimum spending requirements and terms apply.

• 1:00:31Speaker 14

  A business gift should do more than check a box. It should reflect your brand and show someone they're appreciated, recognized, and truly seen. 4imprint offers thousands of high-quality customizable products, like premium apparel, drinkware, tech, and more, making it easy to create a gift that feels meaningful and on-brand. And with 4imprint's expert support and their 360-degree guarantee, you can be 4imprint certain your order will arrive exactly as intended. Explore gifting with confidence at 4imprint.com. 4imprint, for certain. If you listen to financial news, you know a lot of time is spent thinking about what's next, the next opportunity, the next investment, the next move.

• 1:01:14Speaker 14

  But sometimes what matters most is being ready for what you never saw coming. For more than 75 years, Cincinnati Insurance has worked with independent agents to help protect businesses, homes, valuables, and more. Because planning for the future isn't only about knowing what's next, it's about making sure you're ready for what you can't predict. Let Cincinnati Insurance make your bad day better. Find an independent agent at cinfin.com.

• 1:01:41Speaker 02

  For big business, AI opened up a world of promise, but that world of promise turned into a world of pain. Costs spiraling, data trapped, security And governance risks multiplying and ROI out of reach. That's why enterprises turn to Boomi to connect data, apps and AI, helping them operate securely, efficiently and at scale. Boomi turns a world of AI pain into a world of AI gain. As Boomi says, we got you. Head to Boomi.com. That's B-O-O-M-I.com.