Anthropic Drama, Meta Now Tokenminning, Fox's $22B Roku Deal | Diet TBPN

Diet TBPN delivers the best of today’s TBPN episode in 30 minutes. TBPN is a live tech talk show hosted by John Coogan and Jordi Hays, streaming weekdays 11–2 PT on X and YouTube, with each episode posted to podcast platforms right after. Described by The New York Times as “Silicon Valley’s newest obsession,” the show has recently featured Mark Zuckerberg, Sam Altman, Mark Cuban, and Satya Nadella. TBPN is made possible by: Ramp - https://ramp.com Public - https://public.com Cisco - https://www.cisco.com Console - https://www.console.com CrowdStrike - https://www.crowdstrike.com Figma - https://www.figma.com MongoDB - https://www.mongodb.com NYSE - https://www.nyse.com Railway - https://railway.com Shopify - https://www.shopify.com/ Follow TBPN: https://TBPN.com https://x.com/tbpn https://open.spotify.com/show/2L6WMqY3GUPCGBD0dX6p00?si=674252d53acf4231 https://podcasts.apple.com/us/podcast/technology-brothers/id1772360235 https://www.youtube.com/@TBPNLive

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

• 0:00John Coogan?

  Obviously, Mistral is in the news. Incredibly bullish for Mistral. Obviously, very unfortunate drama happening in the anthropic world. We'll go through all of that. But if the if the sovereign AI thesis could not get any stronger right now, this weekend really showed a lot of countries, hey, maybe we do want a national champion. Hey, maybe we do want someone that will provide us models forever. SpaceX IPO, we have Gavin Baker joining in 30 minutes. And we're recapping UFC Freedom 250. It happened at the White House last night. Jordy, take us through your reactions. Introduce our first guest to the show.

• 0:39Jordi Hays?

  Okay, quick intro on the event overall.

• 0:42John Coogan?

  Yeah.

• 0:43Jordi Hays?

  I am a UFC fan.

• 0:45John Coogan?

  Yes.

• 0:45Jordi Hays?

  It's one of the few sports, maybe the only sport, where I actually know the names of the people that are competing. Our guest in just a few minutes is is one of those people.

• 0:55John Coogan?

  Now, are you more of a fan of the UFC or more of a fan of the government? Because a lot of people were watching just because they're fans of the government. And they're and they're said, oh, I will watch any. I watch C-SPAN all day.

• 1:05Jordi Hays?

  I'll put on any show.

• 1:06John Coogan?

  Anything that happens if it involves the government. This was an interesting cross.

• 1:10Jordi Hays?

  No, more more seriously. I, as a UFC fan and as an American, I'm excited for the for the UFC to do well. I'm excited for the fighters to have a platform. I was a little bit wary of this event overall.

• 1:25John Coogan?

  Sure.

• 1:25Jordi Hays?

  Just because the aesthetics of putting on this crazy party.

• 1:30John Coogan?

  High stakes.

• 1:31Jordi Hays?

  In this moment, when there is a ton to black pill about.

• 1:35John Coogan?

  Yeah.

• 1:35Jordi Hays?

  Not after, less after yesterday.

• 1:38John Coogan?

  All this other stuff going on.

• 1:39Jordi Hays?

  And yeah, so war raging, gas prices are high, house prices are high, rates are going up.

• 1:45John Coogan?

  Having a party.

• 1:45Jordi Hays?

  A lot of people in America are not having a good time.

• 1:48John Coogan?

  Yep.

• 1:49Jordi Hays?

  And it really felt like a bread and circuses moment.

• 1:52John Coogan?

  Sure.

• 1:52Jordi Hays?

  But the bread and circuses, John. It worked on me.

• 1:56John Coogan?

  Top notch.

• 1:56Jordi Hays?

  It worked on me. Some of the best ever. It was, uh, it was.

• 2:00John Coogan?

  Why was it so good compared to a normal UFC event?

• 2:02Jordi Hays?

  Well, you didn't watch, so I guess it's, uh, I guess it's hard.

• 2:06John Coogan?

  Was it the aesthetics or the actual?

• 2:07Jordi Hays?

  Well, so one, the production value, one, the card was absolutely stacked. It was eight fights.

• 2:12John Coogan?

  Yeah.

• 2:12Jordi Hays?

  No filler.

• 2:13John Coogan?

  Yeah.

• 2:14Jordi Hays?

  Wall to wall.

• 2:15John Coogan?

  Yeah.

• 2:15Jordi Hays?

  Uh, really, really, uh, fights that had a lot of, um, they carried a lot of weight, right? So like the, the main, uh, title fight, Gagey versus Iliya Tapuria.

• 2:26John Coogan?

  Mm-hmm.

• 2:26Jordi Hays?

  Uh, that changed both fighters' careers.

• 2:29John Coogan?

  Mm-hmm.

• 2:29Jordi Hays?

  Like, full stop.

• 2:30John Coogan?

  Yeah.

• 2:30Jordi Hays?

  Right? Uh, and even with Bo Nickel joining, uh, uh, in just a few minutes, you know, Bo, that was the biggest possible stage.

• 2:39John Coogan?

  Yep.

• 2:39Jordi Hays?

  That any athlete could be on, and especially in the UFC, at least here in, in America. So anyways, going into it, I thought the aesthetics were bad. I was excited to watch the fights.

• 2:49John Coogan?

  Yep.

• 2:49Jordi Hays?

  Turned out, it was just really cool.

• 2:51John Coogan?

  Yeah.

• 2:52Jordi Hays?

  Uh, and sure, there's still gonna be people that are upset that the, the, that the, the president, uh, and the admin is like platforming something like this. Turned out to be really fun. It was, it was a cool night. Uh, and I think America kinda needed it.

• 3:06John Coogan?

  Yeah.

• 3:06Jordi Hays?

  Uh.

• 3:07John Coogan?

  A lot of people are saying that it's not unprecedented because Teddy Roosevelt held a boxing match in the White House, uh, almost a hundred years ago, around that time, and apparently he fought in the boxing match, which is crazy.

• 3:19Jordi Hays?

  Yeah, he was a big, big boxer.

• 3:21John Coogan?

  He was a big boxer, and so.

• 3:22Jordi Hays?

  Imagine, imagine.

• 3:24John Coogan?

  So this is like a light, a light craziness. Uh, anyway.

• 3:27Jordi Hays?

  But anyways.

• 3:28John Coogan?

  We have a guest.

• 3:28Jordi Hays?

  Yeah. I, you know, the, the event was, was incredible, and I came away thinking that big parties and sporting events are potentially the most underutilized political strategy.

• 3:40John Coogan?

  Huh.

• 3:40Jordi Hays?

  Right? I would actually expect, uh, the, the admins' like overall popularity.

• 3:46John Coogan?

  To go up.

• 3:46Jordi Hays?

  Approval rating to go up based on.

• 3:48John Coogan?

  Interesting.

• 3:49Jordi Hays?

  Uh, based just on this event, because there were so many iconic images. Funny enough, the most iconic image

• 3:53John Coogan?

  Yeah.

• 3:54Jordi Hays?

  is of a Brazilian named Diego, Diego Lopez, which we had up on the screen there.

• 3:58John Coogan?

  Standing up on the.

• 3:59Jordi Hays?

  Um, but, uh, but anyways, uh, really, really wild.

• 4:02John Coogan?

  So, the other big, uh, topic over the UFC?

• 4:07John Coogan?

  Was the fact that Dario Amade was not in attendance. He was in front row. Mark Zuckerberg was. And it sort of underscores this odd situation that Anthropic's in where like, they just got dealt this weird hand where like, they're doing so well and the admin could not be more misaligned aesthetically with Anthropic.

• 4:27Jordi Hays?

  Their whole brand.

• 4:28John Coogan?

  Yeah, but the whole brand, a very, very different.

• 4:30Jordi Hays?

  And, and I was, you know, I read the article yesterday that, that Anthropic staff were going to Washington DC.

• 4:37John Coogan?

  DC.

• 4:38Jordi Hays?

  And it's funny, some people were like, oh, this, this, this is, you know, this is bad. Like if it was, they could, if they could solve the issue easily, they could, they could do whatever the phone. Not how this works.

• 4:46John Coogan?

  You always.

• 4:47Jordi Hays?

  Serious issue.

• 4:48John Coogan?

  Everybody goes.

• 4:48Jordi Hays?

  You know, yeah, you would obviously go. But going to Washington, flying to Washington DC to try to solve an issue on a Sunday, there was not a worse.

• 4:57John Coogan?

  They'll be here, they'll be.

• 4:58Jordi Hays?

  No, no, I know. But you can imagine you land there, you're like, okay, like, where is everyone? Let's, let's like, meet is a big issue. Let's meet.

• 5:04John Coogan?

  Let's go have some meetings.

• 5:05Jordi Hays?

  This is important. The national security is on the line. Like, let's figure this out. And they're like, where is everyone?

• 5:10John Coogan?

  And like, if you take safety seriously, cybersecurity seriously, biosecurity seriously, export control seriously, like, like, UFC could not be less aligned with that, the stakes there. And so, like, there is this big gap between the administration and Anthropic. And I think that everyone should, like, every American should care about bridging this gap. Like, private enterprises should be able to flourish in the United States. Everyone agrees with that. And the government should be able to enact reasonable regulations to protect America's interests. And both of those need to find a way to play together. But there is just a really, really broad gap between these two organizations. And so, everyone's hoping that things resolve quickly. And it seems like the right, you know, wheels

• 5:55John Coogan?

  are in motion. The flights have been booked or already taken and things are moving along. But just to recap on the play by play. March 4th, Anthropic received a Department of War supply chain risk letter that of course got rolled back eventually. April 7th was the Mythos preview announcement alongside Project Glasswing. June 9th was the Fable 5 launch last Monday. Mythos with guardrails around cyber, bio, and AI research. And on June 12th, just five days after the end of the week, Fable 5 gets suspended after the Commerce Department issues an export control directive. So Anthropic explained in a blog post that the US government is restricting both Fable 5 and Mythos 5 from being used by any foreign national, whether

• 6:38John Coogan?

  inside or outside the US, including foreign national Anthropic employees. And so that's a huge compliance burden, very sudden, and that led Anthropic to completely suspend the use of those models for all users, not just, not just foreign national employees, because they need to, at least if they want to comply with this, do all the KYC, understand how different organizations are using the model, who at those organizations has access? If something's being vended through an API and it's showing up in another product, does that product do all of the proper, you know, authorizations? And so it's a big, it's a big wrench in the gears of the rollout of this model. Then the information reported

• 7:21John Coogan?

  that Andy Jassy at Amazon had raised concerns with the senior administration officials about jailbreaking, the risk of jailbreaking Fable, getting access to all of Anthropic. Anthropic countered in their blog post, saying, quote, "We reviewed a demonstration of this specific technique being used to identify a small number of previously known minor vulnerabilities. These vulnerabilities all appear relatively simple, and we have found that other publicly available models are able to discover them as well without requiring a bypass." So they're saying, "This isn't that big of a jailbreak. This isn't that big of a deal. We can move forward safely. We've taken safety seriously." But that is the debate that's going on between the admin and Anthropic. So as everyone knows, the

• 8:03John Coogan?

  rollout of Fable 5 has been a bit rocky. Incredible demos, incredible benchmarks, but offset by the odd decision to silently degrade the quality of the answers related to Frontier AI. Development, instead of just refusing the requests like cyber and bio prompts, which that was the main thing that everyone was really confused about. The actual rationale behind AI development refusal is pretty sound. Like, people are upset about that if they're working on machine learning systems, recommender systems, anything that requires, you know, like instantiating an AI product, let alone if you're just, "Hey, I'm just doing open source AI research and I'd love to use the latest and greatest models to help me." Now it's not an option. But at the same time, just think about the logic.

• 8:46John Coogan?

  If a model doesn't let you hack a system, just have the model build you an unrestricted model that does let you hack that system. And so, clearly, in that scenario, it makes sense to restrict, if you want to restrict hacking or bio, you also have to restrict the tool that makes the tool that hacks the system or develops the bio weapon, in theory. And so, but the choice to silently degrade responses was not well received. These are important issues, and there's another timeline where AI leaders are cut from the same cloth as America's elected officials. But we're in a world where Anthropic has to make their case for safety in an age of RSI during a UFC fight on the White House lawn. It's a very bizarre timeline, but here we are. Most of the big tech CEOs, they have figured out how to work with the administration effectively,

• 9:30John Coogan?

  showing up to large dinners, photo ops, the occasional movie screening to make their case about hot topics. Many of these CEOs also have business relations with Anthropic, either on the customer side or on the investor side, and that's what's really complicated about the Amazon relationship. Obviously, Amazon uses Anthropic models, also is an investor in Anthropic, also provides compute to Anthropic, and so they have a very hairy, complex, circular relationship. And so, that clouds the discussion over whether or not is Anthropic going to try and help Anthropic get through this? Are they doing everything above board? At the same time, you know, people were sort of putting out that like, oh, did, did Amazon like spike the ball on this?

• 10:10John Coogan?

  And at the same time, if the government comes to you and asks like, hey, you're a big tech company, you've been using this model a lot.

• 10:16Jordi Hays?

  Their close partner to Anthropic.

• 10:18John Coogan?

  Were you able to jailbreak it at all? And your security team just issued a report like, yeah, we actually were able to jailbreak it a little bit. Like, you're not going to withhold that from the government. You're going to turn that over. That's different than calling and saying, hey, I, I really think it's dangerous. You gotta put pressure on them. So there's this wide range of levels of interaction. They can go both ways. You can be a lab partnered with a big tech company. That big tech company can have a really established government regulation, government relations group that is actually helping you get through to the admin. On the flip side, you could have a big tech company that is competing with you or frustrated by your, your, your, your business and is actively trying to, you know, put their thumb on the scale the other way.

• 11:01John Coogan?

  So I'm sure we'll learn more in the future. Many of these CEOs have business relationships with Anthropic, so we'll see how all of this develops. And they're always renegotiating these contracts too, which makes things more complex. And they're competing across multiple markets. So expect the 4D chess to be on full display all summer long in Washington. Anyway, what else is going on? Meta is doing a 180, according to Amir over at The Information, trying to be the vanguard of token minimizing. I think the token maxing, token minimizing thing is so silly because do you know where maxing comes from really? Like, it comes from gamer lingo usually and.

• 11:43Jordi Hays?

  Adopted by looks maxing community?

• 11:46John Coogan?

  I, I don't know if looks maxing community was the first one. They certainly made it really, really viral.

• 11:51Jordi Hays?

  Popularized like, I feel like through.

• 11:54John Coogan?

  Yeah.

• 11:54Jordi Hays?

  Effectively through Clav's clipping.

• 11:56John Coogan?

  Yeah.

• 11:57Jordi Hays?

  Maxed the idea of like doing anything like, oh, I'm, I'm computer maxing today. Yeah. Isn't it from like min-maxing?

• 12:03John Coogan?

  Min-maxing, and that's what I'm getting at. Like, you shouldn't be token maxing or token minning. You should be token min-maxing. And the idea of min-maxing is when you're in a video game, you want to get the most resources for the lowest cost. So if you're playing League of Legends, you're going to put just the right amount of, of gold into this particular item or this particular stat point in an RPG. And you're going to try and find the optimal build based on your resources. You have confined resources and somehow. It feels like these like tech and all these companies went through some sort of hallucinatory hallucinatory period where they lost sight of that they should always have been min-maxing because that is the goal of business at all times in all things. You would never say like,

• 12:47John Coogan?

  oh yeah, we're ad-maxing this quarter. We're gonna buy as many ads as possible. Oh no, it didn't work. We spent way too much on ads. They were not effective. We need to add min, spend as little as possible on marketing. It's like, no, you always want to be spending, you always want to be getting the most return on ad spend, the highest leverage output.

• 13:03Jordi Hays?

  Yeah, there was, and again, unsubstantiated posts.

• 13:08John Coogan?

  Yes.

• 13:08Jordi Hays?

  But somebody was saying they talked to somebody at Meta, and there was one engineer that spent $90,000 in one day.

• 13:15John Coogan?

  Ooh.

• 13:15Jordi Hays?

  And was quickly terminated.

• 13:17John Coogan?

  Oh, really?

• 13:19Jordi Hays?

  Terminated within three days. So again, could just be entirely fake news, but it seems somewhat informed.

• 13:26John Coogan?

  The crazy thing is that, is that like, the lesson from that?

• 13:29Jordi Hays?

  This guy's like, I'm not getting fired. I'm gonna use AI more than anyone else in the whole company.

• 13:33John Coogan?

  Run loops.

• 13:34Jordi Hays?

  $90,000 bill.

• 13:36John Coogan?

  The, I mean, so, so the lesson that will be learned from that is, is don't spend $90,000 a day. But the Super Bowl is liter- for a marketer, the Super Bowl is spend $5 million in one day. And it works sometimes. And sometimes, Super Bowl ads deliver $20 million.

• 13:50Jordi Hays?

  Yeah, but, but what do teams do when they run Super Bowl ads, right? We ran our Super Bowl ad. We trained our own model in order to...

• 13:57John Coogan?

  Yeah, yeah.

• 13:57Jordi Hays?

  Kidding. No, but teams are gonna run-

• 13:59John Coogan?

  No, we made sure that ours was ROI positive. And we only bought the ad in a small market, and we did it before the game.

• 14:04Jordi Hays?

  Where we already knew our audience was.

• 14:06John Coogan?

  And so, for a very low cost, we were able to get a very high of val- high value. So I believe we got a very high return on investment. We min-maxed the Super Bowl. Now, there were some companies that sort of just Super Bowl-maxed, and they just spent a ton of money. And when you looked at the data on how they were received by audiences, it seemed like, oh, they definitely didn't get $5 million in brand value back. In fact, maybe that ad was poorly received. Some of the AI-generated ads.

• 14:32Jordi Hays?

  Yeah, I gotta, I gotta give it up to the UFC for the, for the level of advertising during the event yesterday.

• 14:39John Coogan?

  They're running full, full ads? In the middle?

• 14:42Jordi Hays?

  No, so one, the interesting thing, with the new Paramount deal, there's a lot of ads.

• 14:46John Coogan?

  Okay.

• 14:47Jordi Hays?

  But one, Dana White was in a lot of the ads that were running. So, so like Dodge was doing a TRX ad. It was Dana White driving. There was another ad, I forget the brand, so I guess it was a bad ad, but Dana White was, they faked a podcast set where it was with an insurance company and Dana was having a conversation about business insurance with the CEO of the company.

• 15:11John Coogan?

  Interesting.

• 15:12Jordi Hays?

  So it looks like a podcast. So I thought it was interesting. They were casting Dana in all them. Then second, the, the, the level of advertising just in the octagon was out of this world. There was so many different ways to gamble. Every, there was like, there's no like, UFC cannot do like a gambling exclusivity deal with anyone, right? Cause it's like they have, it's crypto.com, it's polymarket, it's bet365, like any possible way that you could wanna like gamble.

• 15:39John Coogan?

  Bet365. So the only day you're capable, you're taking off is leap day. Every four years, you take one day off of gambling. That's the, that's the mission. One day off every four years.

• 15:50Jordi Hays?

  And then, and then Kelsey's running ads during the event.

• 15:53John Coogan?

  Oh, so Kelsey and polymarket are duking it out?

• 15:55Jordi Hays?

  So polymarket is in the octagon, but Kelsey's running a bunch of ads.

• 15:58John Coogan?

  Against it?

• 15:59Jordi Hays?

  Against it.

• 15:59John Coogan?

  And they're buying directly through Paramount? Because you streamed it on Paramount? Is that correct?

• 16:03Jordi Hays?

  Yeah, I don't.

• 16:04John Coogan?

  Did you have to pay for it in addition to?

• 16:06Jordi Hays?

  No, no, no.

• 16:06John Coogan?

  Okay. So you pay for Paramount on a monthly basis and then you get UFC for free?

• 16:11Jordi Hays?

  Yeah.

• 16:12John Coogan?

  Gambling is just min-maxing done poorly. That's true. So the, the, the news around Meta is Meta's doing a 180, trying to be the vanguard of token minimizing. Two months ago, Meta epitomized token maxing on trend, on track to spend billions a year on Claude, et cetera. We've seen an exponential increase in AI usage and we are tracking to spend billions on internal use alone in 2026. The memo said, at the same time, individuals and teams have limited visibility into and control over how they use AI. In 2027, we expect Meta will move towards managing AI tokens in a more structured way with bullet budgets, allocation decisions and supporting tools. That makes sense. You have a marketing budget. You should also have a token budget as part of it.

• 16:52Jordi Hays?

  I also saw something they have like meta code, which is their internal.

• 16:57John Coogan?

  That makes sense. I mean, they're like, you know, catching up to the frontier with.

• 17:00Speaker 02

  Yeah, I mean, like I talked about this, there's a bunch of like these leaked calls where Suck is like, you know, you should imagine that Met employees are going to be better than like the average open source contributor. So it's like the basically quality of coding data within Meta should be super good. You can train some model on that.

• 17:15John Coogan?

  It's the same pitch as take a frontier model, bring them in through some sort of consulting partner. They fine tune on your business workflow. They automate your business process. But your business process in this case, if you're Meta, is generating code that makes your social networks better.

• 17:31Speaker 02

  Yeah, it's especially good because like in Meta, all of the like, you know, internal business, like whatever data, it's already in like code format. You don't have to like scan in a bunch of papers into, you know.

• 17:43Jordi Hays?

  I still, I still don't know what Meta is actually building. And I think there, there comes a time soon that they should probably communicate that to the market.

• 17:54John Coogan?

  Personal superintelligence, baby. What's not to, what's there not to understand?

• 17:57Jordi Hays?

  No, it's just, it's just, okay, what is that? What does that mean?

• 18:02John Coogan?

  Seventy-five percent is valuable to SpaceX, buddy. Come on.

• 18:06John Coogan?

  It's crazy.

• 18:06Jordi Hays?

  SpaceX, well.

• 18:08John Coogan?

  SpaceX is 2.3.

• 18:09Jordi Hays?

  Well, if things keep going the way they're going, we'll see even more of a divergence. No, but I think like it's so unclear.

• 18:16John Coogan?

  You should be able to put a lot of the SpaceX bull case on Meta, right? It's like, sure, they, maybe Colossus was built a little bit faster, but Meta is pretty fast.

• 18:24Jordi Hays?

  I think they're wildly, I think they're, they're, couldn't be more different. With Meta right now, it's, the bull case is it's potentially the greatest business in the history.

• 18:32John Coogan?

  Yeah.

• 18:33Jordi Hays?

  That is not threatened by AI.

• 18:34John Coogan?

  Totally, totally.

• 18:35Jordi Hays?

  That actually is accelerated by AI.

• 18:38John Coogan?

  Yeah.

• 18:38Jordi Hays?

  And, and I don't think, anyways, but I do think, I do think I would expect some communication from Meta around what their real strategy is.

• 18:50John Coogan?

  Yeah.

• 18:50Jordi Hays?

  Over the next month or so, because it's killing them that they just keep saying, oh, we're personal superintelligence. But wait, they're building like a coding harness and they're, and they're working on coding. Like, are they going to sell that externally or is it going to be internal?

• 19:05John Coogan?

  Coding.

• 19:05Jordi Hays?

  Are they gonna, are they gonna try to?

• 19:07John Coogan?

  Coding seems like it makes sense. Like they're spending so much money on it.

• 19:09Jordi Hays?

  Are they gonna try to sell their model on an API and get into enterprise? Like, the big question is like, do they take the leap? They kind of did that with Manus.

• 19:16John Coogan?

  Yeah.

• 19:16Jordi Hays?

  But that's getting unwound.

• 19:18John Coogan?

  Fox. Is buying Roku, the streaming service, for $25 billion. It's in the Wall Street Journal.

• 19:26Jordi Hays?

  25 or 22?

• 19:27John Coogan?

  25 billion in the Wall Street Journal here. Let me refresh the page, see if they updated it. It still says 25.

• 19:33Jordi Hays?

  Weird. Barron's is reporting 22 billion.

• 19:36John Coogan?

  Okay.

• 19:36Jordi Hays?

  But, who knows?

• 19:37John Coogan?

  Somewhere in the north of a billion, sub 100 billion. Let's be very conservative with our estimates.

• 19:44Jordi Hays?

  Yeah, CNBC also 22 billion.

• 19:46John Coogan?

  Okay.

• 19:46Jordi Hays?

  Weird that the Journal is...

• 19:48John Coogan?

  The Journal, I mean, I have inside information, given that it's a News Corp. property, related there, right? Anyway, let's read through the Journal piece. Let me just give you some facts, and then you can sort of give me some takes and contextualize it with more information. So, Fox Corp. said it's acquiring Roku in a deal valued around 25 billion. So, the Wall Street Journal's saying around, is 22 around, maybe? Making a major bet on the future of ad-supported streaming. Ad-supported streaming, obviously Netflix pivoted to ads after saying, "We don't, we're not going to do ads." Turned out to be a great business. Ads are undefeated and more people want...

• 20:25Jordi Hays?

  They're down with ads.

• 20:25John Coogan?

  They're just down with ads, especially if they're good ads. Anyway, the Fox, the deal. The deal is Fox's largest to date. It brings together a media company known for its live news and sports programming with the biggest provider of streaming platforms for connected TVs. It will add scale to Fox's streaming business, currently home to free ad-supported streaming service Tubi, which the company bought for $400 million in 2020 and subscription-based Fox One and Fox Nation. In addition to distributing...

• 20:55Jordi Hays?

  Tubi, from my understanding, has been a home run.

• 20:57John Coogan?

  Yes.

• 20:57Jordi Hays?

  Like, I don't remember exactly what their revenue is, but they bought it for 400. It's in the billions now.

• 21:03John Coogan?

  And all the metrics about actual audience size are huge. And getting to tens of millions of dollars in revenue, hundreds of millions of dollars in ad sales against a big audience like the Tubi viewership, when you have the Fox machinery behind it, makes a ton of sense.

• 21:17Jordi Hays?

  Yeah.

• 21:17John Coogan?

  In addition to distributing other streaming services through connected TVs and devices, Roku has its own ad-supported Roku channel. The combined company will better compete with the likes of amazon.com and Netflix for ad dollars. Bringing these two companies together will really help define the future of television in the United States and in many other markets around the world. Fox chief executive Lachlan Murdoch told investors on a call Monday. Fox will pay around $160 per share, 96 in cash and .9693 Fox Class A shares. The deal is valued at around 22 billion on an enterprise basis. Fox expects to fund the cash portion of the transaction with 12 billion in new debt as well as cash on hand. The combined company expects to cut around 400 million in annual costs.

• 22:02John Coogan?

  Fox plans to keep Tubi and the Roku channel as separate offerings. Consumers are increasingly opting for free and lower cost ad-supported streaming options as the cost of subscriptions marches ever higher. Ad-supported streaming plans now represent almost 50% of all premium subscription ad video on demand signups in the US, up from 39% just two years ago. More than 100 million global households stream with Roku. Roku is the largest streaming platform for connected TVs with 25% market share. Samsung's Tyson is number two at 23%. And then I'm sure probably Amazon's Fire TV is not far behind. Fox remained on the sidelines during the heady early days of streaming boom, pouring money instead into programming for its cable channels and buying up sports rights.

• 22:47John Coogan?

  It launched Fox Nation in 2018 and introduced direct-to-consumer Fox One, which includes sports and Fox News. Last year, Fox said last month that Tubi had nearly 100 million monthly active users and its revenue had grown by 23% in the fiscal third quarter. And so Fox's stock is down today. Roku is down .2%, something like that. And the market doesn't like it. Take Him has a take here. We can read through his opinion. He says, "I don't understand how this Roku deal makes any sense. Bringing together the most valuable live..."

• 23:23Jordi Hays?

  I'll tell you how it makes sense.

• 23:24John Coogan?

  How does it make sense?

• 23:25Jordi Hays?

  No, so I think it makes sense. One, Fox, they have a great product in Tubi, right? It's again... There are certain people that are happy with their HBO or Netflix or whatever, but Tubi has a great niche. It's been a great acquisition for Fox, north of a billion dollars of revenue. That is a product. Roku is a platform. They have over 20% market share in connected TVs. I was looking at the data. They have over 40% of the engagement with connected TVs. So when you think about it from an advertising potential, right? It's not just that they have 20% of the connected TV market. They have over 40% of like the

• 24:10Jordi Hays?

  watch time effectively, right? So looking at the potential from an advertising standpoint and how many dollars are still yet to shift from traditional television to connected TV. So from that lens, I think it's great. Roku's also a much younger demo. So like a lot of media, a lot of media properties, right? Especially television related are going to be, you know, older demos that are eventually going to be aging out at least of like prime consumers. But these are consumers that are in their, you know, prime earning years, prime years as consumers. And so ultimately, I think it makes sense. I think it makes sense for

• 24:50Jordi Hays?

  Fox. Next, the thing that I hope that they can do as a consumer is re-bundle, right? We've just gone, we've gone through this era of unbundling and the fact that you get a new TV and you're like, okay, great. Let me log into, you know, 15, 10 different services, something like that. I would like to see them do, I would like to see them do something in bundling for a consumer. So again, looking at it from the lens of like having north of 40% of like watch time, right? That is a super valuable property and like with the right ad-driven approach, I think, I think it'll pay off.

• 25:28John Coogan?

  I wonder how windowing fits into this. Like, when I grew up, I didn't have cable, but you would get a prestige movie. Played on ABC like once a week and for a while that was the flow on Netflix and HBO was like its own premium subscription. You could open up the HBO app. It's all premium series and movies. And then some of that would trickle down, but then it feels like the ecosystem sort of branched a little bit where Netflix stopped getting like the James Cameron library for a while and Disney started hoovering up some of that, keeping some of the really popular movies, the Marvel franchise off of Netflix, even for later run, a year

• 26:11John Coogan?

  or two after, because there was more competition from the actual different pieces of the different studios. So I wonder if Roku will be able to to provide some sort of like neutral territory in some ways where where viewers can pick up something that's in the premium end, some things that's, you know, a sequel to a franchise that they know and love, but it's not seen as as competitive as as, you know, Disney versus HBO or whatever. We will see.

• 26:40Jordi Hays?

  Overall, real platform. They already have a product that sits on top of it, tons of of advertising potential. And I think that regardless of whatever the market reaction is today, I expect that people will will get it over time.

• 26:53John Coogan?

  Tyler Cowen shared some more thoughts on the recent mythos, brouhaha. It's a good term. We, this was all over. We talked about this earlier, but he says, according to not yet confirmed but likely true reports, it was shown that the model could be jailbroken. There's debate over this now. The released mythos, already restricted bio and AI improvement queries rather than strictly in fact, rather strictly in fact. So now we are back to the model not being available. Here are a few of the constraints on the US government, not the only ones I might add. One, it needs for the main companies to stay in business. On top of that, it wants their IPOs to go reasonably well. And it's now much harder for the top companies to recruit foreigners,

• 27:36John Coogan?

  which is a significant share of their highest quality workforce. Demis, Ilya, Andre, for a start, are all international engineers. It is much harder for the main competitors to drum up foreign business in a credible manner and sustainable manner. That's interesting. We haven't seen many breakout charts of how much revenue is domestic versus international, but we have seen reports of OpenAI and Anthropic doing big deals with international companies. Some of these companies, Fortune 500s, they just have global footprints. So they got to use the models everywhere, ideally, unless they do all of their software engineering in Silicon Valley. One B, how are American multinationals operating abroad supposed to use top systems moving forward? That's literally what I just said.

• 28:20John Coogan?

  I just predicted the next line. Whoops, I am a stochastic parrot. It wants to use model access as a tool of both hard and soft power. So model access has to be possible at some level, but it is very hard to control what foreign agents will do with partial model access when they get it in the future. Three, the US needs to stay ahead of China in the AI race. This is a big question. We have Aaron Gin from Hydrohost joining in just 10 minutes. We'll ask him for his perspective on this. Four, the US needs to issue restrictions that are actually enforceable, and US citizens only doesn't fit that bill. That's a good point. Furthermore, markets and everything, it is easy enough to hire a traitorous American to access tools of wrongdoing.

• 29:05John Coogan?

  That's a really good point. How can you verify that every American is loyal? Or for a matter, it is not that difficult to fake citizenship in various ways?

• 29:14Jordi Hays?

  Yeah, there's been, there's been people over the last 50 years that have gotten caught like passing on or basically selling, you know, secrets around our various military aircraft, for example.

• 29:27John Coogan?

  Yeah, there's a very controversial story of Virgil Griffith, cryptocurrency researcher who I actually met once. He worked at Caltech, was deep in math and very excited about cryptocurrency. And he went and gave a talk on cryptocurrency in North Korea, explaining how cryptocurrency works and how cryptography works. And that was seen as a violation of export controls, and he was sent to prison. And the crypto community is very upset about that because they they maintain that math should not be illegal. This information should not be illegal. The the government side is like helping.

• 29:59Jordi Hays?

  What was his defense? Was he like thinking that he was going to liberate the North Korean people by giving them access to effectively or explaining how code?

• 30:08John Coogan?

  Can be used to create a a a store of value that that is that is unsanctionable essentially. And so it was seen as a violation violation of sanctions by the US government.

• 30:19Jordi Hays?

  Do they have?

• 30:19John Coogan?

  And more importantly, it's seen as unpaid.

• 30:20Jordi Hays?

  Do they have a North Korean stablecoin?

• 30:22John Coogan?

  I don't know. I don't know. They have a lot of housing.

• 30:24Jordi Hays?

  They're calling it the most sanctioned stablecoin ever.

• 30:27John Coogan?

  Potentially, potentially. This one, number five by Tyler Cowen, was a little bit controversial. He says the US government cannot nationalize these companies and then proceed to run them effectively. And people were debating that, saying that it might be possible for the US government to to own the labs in some way and and and leave them to their own devices to actually roll these things out. What do you?

• 30:51Speaker 02

  Yeah, I mean, if you're like super RSI pilled, right? You don't need the employees at all because they just improve the stuff.

• 30:56John Coogan?

  So the government just says, continue to improve.

• 30:58Speaker 02

  Yeah.

• 30:59John Coogan?

  And that's it. So you don't actually?

• 30:59Speaker 02

  That's like, you know, the extreme scenario.

• 31:01John Coogan?

  Yeah, yeah. And then and then on the other side, it's that, okay, these systems are actually extremely complex. You look at the uptime of some of these systems, the guard, the research taste. In fact, you need so many employees to make these products effective. You actually need the international employees as well because they come up with great ideas. And so, yeah, those are the two sort of sides of the of the debate. Six is Chinese and open source models do in fact improve at some reasonable pace, even though they are right now considerably behind the best proprietary models. And that's something that I want to dig into more.

• 31:34John Coogan?

  It does seem like the pace of open source development in China is slowing. I'm not entirely sure what's driving it. It feels like there's a number of different things. Gavin Baker said it's about compute and they're and they're they're turning their backs on the black wells that they had the opportunity to buy. I think it might be research ideas that are more locked down now in in tighter controlled circles in San Francisco. It also might be the data, might be, but you'd have to imagine that they have lots of people that are writing code, lots of people that are inferencing those models and then full. Data and information capturing of those rollouts. There are a number of different reasons why that pace might be slowing. And we'll see, maybe there's a big jump in the graph. Maybe we have another deep seek moment in the next couple of months. We'll see.

• 32:20John Coogan?

  Leave us five stars on Apple Podcasts and Spotify. Sign up for our newsletter, tbpn.com, and we will see you tomorrow at 11 a.m. Pacific. Goodbye.

• 32:26Jordi Hays?

  Technology's Daily Show.

• 32:28John Coogan?

  Technology in motion.