Arm’s $15B Chip Bet, Sanders & AOC vs Datacenters, Meta & YouTube Lose Trial | 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 https://ramp.com/ AppLovin - https://axon.ai https://axon.ai/ Cisco - https://www.cisco.com https://www.cisco.com/ Cognition - https://cognition.ai https://cognition.ai/ Console - https://console.com https://console.com/ CrowdStrike - https://crowdstrike.com https://crowdstrike.com/ ElevenLabs - https://elevenlabs.io https://elevenlabs.io/ Figma - https://figma.com https://figma.com/ Fin - https://fin.ai https://fin.ai/ Gemini - https://gemini.google.com https://gemini.google.com/ Graphite - https://graphite.com https://graphite.com/ Gusto - https://gusto.com/tbpn Kalshi - https://kalshi.com https://kalshi.com/ Labelbox - https://labelbox.com https://labelbox.com/ Lambda - https://lambda.ai https://lambda.ai/ Linear - https://linear.app https://linear.app/ MongoDB - https://mongodb.com https://mongodb.com/ NYSE - https://nyse.com https://nyse.com/ Okta - https://www.okta.com https://www.okta.com/ Phantom - https://phantom.com/cash Plaid - https://plaid.com https://plaid.com/ Public - https://public.com https://public.com/ Railway - https://railway.com https://railway.com/ Restream - https://restream.io https://restream.io/ Sentry - https://sentry.io https://sentry.io/ Shopify - https://shopify.com/tbpn Turbopuffer - https://turbopuffer.com https://turbopuffer.com/ Vanta - https://vanta.com https://vanta.com/ Vibe - https://vibe.co https://vibe.co/ 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?

  Big news of the day of the week, this has been going on all week, is that ARM, the intellectual property developer that creates intellectual property designs for CPUs, is now getting into the chip game and they got a big ARM pump in the stock market. So the company is up 15% over the last few days on the news that they will sell their own chips. This is new for ARM. ARM is a very old company, fascinating history. I actually made a 25-minute YouTube video all about the history of the company back in 2023, but we'll recap a little bit of it today. They normally just license out their intellectual property

• 0:38John Coogan?

  and that is a phenomenal business. 97% gross margins. 97% gross margins. Yeah, let's give it up.

• 0:46Jordi Hays?

  There we go.

• 0:47John Coogan?

  That's amazing. And, you know, it's a big business. $4 billion in revenue last year, nearly 800 million of net income. This new move, they're expecting to ramp revenue to $15 billion by 2031. So they're expanding the market significantly. Now margins will be different, but the market cap for ARM is now around $166 billion. So it's a big company. Trades at a very high multiple.

• 1:11Jordi Hays?

  Yeah, $4 billion last year, currently trading at $165 billion.

• 1:15John Coogan?

  But very, very high gross margin. This is a big shift in strategy. ARM is not an AI loser by any means, but it hasn't gotten the attention that other GPU makers have received, like Nvidia. CPUs are far from dead, though. In fact, we are in, we are currently in what seems like a little bit of a CPU crunch. Intel can't make CPUs fast enough. Nvidia is starting to sell their Grace CPU that goes with their H100 and you pair it with the Grace CPU. You get the GPU and the CPU all on one system. Well, now you can buy the CPU by itself if you're CPU constrained. So you don't want to just be GPU-rich and CPU-poor. You got to be rich in both camps and a lot of companies are jumping in to fill this gap.

• 1:59John Coogan?

  Agents, and a lot of this is because of agents. Agents need CPUs. You need to fill the GPUs constantly with new data and tasks. Also, all of the agents use CPUs to make web queries, search the web. Run Python, spin up web servers, interact with anything. Uptime is going down for non GPU accelerated workloads. Like you go to a SaaS product that is basically just a web server that's running on a CPU somewhere in a data center. And you're like, ah, this thing isn't loading today. Or like there's downtime. And a lot of that's just because we're writing more software. We're using more software as a society, as a country. And we need more CPUs as well as GPUs, even though GPUs are like the the hot thing to talk about.

• 2:41John Coogan?

  So ARM has a very interesting backstory, but you can think about it basically as a joint venture between three groups. Apple, Acorn Computer, and VLSI. And so they needed to design a low power CPU for mobile devices. Before phones, you know what was hot, Jordy? PDAs. And have you ever seen a PDA, Tyler?

• 3:01Jordi Hays?

  No.

• 3:01John Coogan?

  You've never seen a PDA?

• 3:03Jordi Hays?

  I don't think so.

• 3:04John Coogan?

  Okay, so before the iPhone, you know, everyone had flip phones, but before it's not.

• 3:09Jordi Hays?

  This is not a pager?

• 3:10John Coogan?

  It's not a pager. You don't know what this is either?

• 3:12Jordi Hays?

  No.

• 3:12John Coogan?

  Wow. So there's something called a Palm Pilot. And basically it was iPhone sized screen and it has stylus and you could write on it and you could make notes. And PDA stood for Personal Digital Assistant. And I feel like that brand is just itching to come back in 2026.

• 3:29Jordi Hays?

  Everyone is working on a PDA.

• 3:31John Coogan?

  Yeah, Personal Superintelligence Assistance. There's a whole bunch of things. We're building PDAs, folks. They just live in the cloud and it's not a physical device. But these PDAs back in the 90s were physical devices. This was post pager, pre smartphone. And it was the it was the device that you carried to take notes and do things that you do today in apps. You would do on your PDA. But it wasn't always on, internet connected, none of that. It was it was it was a Palm Pilot. And this was like a fantastic business for a while. But there were a lot of problems with this because for the first time, you needed a CPU that could live within a plastics. Like shell, basically, these were like, you know, plastic enclosures. You need to run on a battery.

• 4:13John Coogan?

  It needed to be, you need, needed to be able to do some things, not crazy compute. But the CPU industry in the 90s was very focused on mainframes, servers, desktops. There were a few laptops popping up, but it was not the mobile phone revolution that's happening now. Where you have Apple silicon chips and those are of course based on ARM architecture. But that's where all this came from. People said, Okay, we need a lower power chip that can actually run off a battery, not overheat, melt the plastic, do all of this. And it can be somebody, can be, can power a device that you carry with you as a personal digital assistant, a PDA.

• 4:48Jordi Hays?

  Chicken in the chat says PayPal started on PDAs.

• 4:51John Coogan?

  That's right. That's right. So PayPal started, originally, the idea was, these PDAs had, they didn't have like Tap to Pay or anything like that, RFID. They had basically the same device that you'd see on a TV remote, so IR. And it would flash a light that could be seen by another sensor. And if you flash the light at a certain rate, you can send a message. You can, basically, it's like advanced, what's that SOS thing?

• 5:20Jordi Hays?

  Morse?

• 5:20John Coogan?

  Morse code? It's like a more advanced version of Morse code. And so you could send a specific packet of information from PDA to PDA. And this was the original idea for PayPal. That's correct. That's a great, great piece of lore, tech lore. ARM starts to, you know, build these. Later, there's Robin Saxby, who was the CEO of ARM at the time. He wanted ARM to become the global standard for CPUs. And so in the 90s, there were lots of different CPU makers, lots of different architectures. There's this whole CISC versus RISC debate. There's the x86 architecture that Intel pioneers. And slight differences in architectures can limit interoperability. You see this with what's going on with

• 6:00John Coogan?

  Mac, where a whole bunch of applications have needed to be rewritten for Apple silicon. Because previously, you would have an Intel Mac, before we got to the M1, M2, M3, M4, M5 chips. Those are Apple silicon, those are ARM-based. And sometimes you'll go to a website and it'll be like, oh, do you want to download this for a Mac? Like, what do you have? Do you have an Intel Mac? Or do you have an Apple silicon Mac? Well, it's important because when you write the software that runs on the Mac, You need to use specific instruction sets. Now, there are ways to abstract that and run on either, but there are lots of pieces of software that interact with the CPU at a low enough level that they need to be aware of the instruction set. So ARM sets out to be the global standard for CPUs,

• 6:43John Coogan?

  and they create the ISA, the instruction set architecture, and that ultimately let Apple design their own chips, but within the architectural guidelines set forth by ARM. So, Apple pays a license to ARM for every chip Apple sells. It's a very small license fee, because Apple does a lot of design work. They do the manufacturing, the TSMC fabs it, and like, there's a million other pieces of the value chain. But for this one little slice, they have to pay ARM, and ARM just takes that and says, "Thanks. Cool." Like, you used their intellectual property successfully.

• 7:15Jordi Hays?

  You know who else says "thanks"?

• 7:16John Coogan?

  Who?

• 7:17Jordi Hays?

  Masayoshi Son.

• 7:18John Coogan?

  That's true.

• 7:18Jordi Hays?

  Because they own 90%, roughly 90% of the company. It was a full buyout in 2016.

• 7:25John Coogan?

  That's right.

• 7:25Jordi Hays?

  They bought the entire company for something around 25, 30 billion USD.

• 7:31John Coogan?

  Yeah.

• 7:32Jordi Hays?

  Buy the entire company. They still own 90% today. So, their, like, SoftBank's holdings, just in that one company, are somewhere in the range of 140 billion.

• 7:46John Coogan?

  It's great.

• 7:46Jordi Hays?

  When I was looking at.

• 7:47John Coogan?

  It's the...

• 7:48Jordi Hays?

  And of course, they've massively levered...

• 7:50John Coogan?

  The second time he's made 100 billion.

• 7:51Jordi Hays?

  Well, and they've massively levered up against that position.

• 7:54John Coogan?

  Yes, yes.

• 7:55Jordi Hays?

  They've used, they've raised debt against their holdings in ARM.

• 8:01John Coogan?

  Yep.

• 8:01Jordi Hays?

  But certainly, Masayoshi is somewhere out in the world, seeing it go up 15%, just smashing a gong.

• 8:08John Coogan?

  I hope so. I hope so. Although everyone knows Apple, my clickbait for my YouTube video was like, "Did you know the iPhone is secretly British?" I think it's funny because it uses ARM deep inside. But ARM licenses to a ton of different tech companies. So, Amazon uses ARM for the Graviton chips. A lot of Android phone makers have ARM-based chips. Tons of other tech companies license ARM's technology to build chips. But now ARM is going to be making the chips themselves. And they're going to be working with Meta Platforms and OpenAI. This means a shift in the economics of the business. So, 97% gross margins for just those licensing ISA contracts. This will be closer to 50%. But it is, should be offset by the huge gains in market size and revenue potential.

• 8:53John Coogan?

  So, the company has one of the highest multiples in semiconductors, roughly 90x forward earnings. So, there's a lot to live up to. But there's a lot of value coming from AI agents that have access to plentiful CPU resources. The industry dynamics are also particularly interesting. Ben Thompson pointed this out in Strategery. So, Nvidia sells an ARM-based CPU, that Grace CPU. Nvidia is sort of competing with ARM. Jensen showed up and gave like a remote talk at this ARM event where they announced this chip. And so, they're competing, but they're also in some ways working together because they're challenging x86 options from Intel and AMD that are still really popular. If Nvidia sells a bunch of chips for, you know, AI workloads, well, then that actually makes ARM

• 9:37John Coogan?

  more likely to sell their chips as well because whatever software is built for the Nvidia ARM-based chips will probably run on the ARM ARM-based chips. So, there's some sort of like integration there. The x86 mote is not as strong as the CUDA mote, but there's still this like dynamic of, Nvidia and ARM are going up against Intel and AMD in the same way that different GPU makers are going up against the CUDA mote. So, there's like this, all these different interactions there. But it'll all be interesting to follow. Let's, let's move on. The big news that drove this was, of course, Meta Engineering at Meta said, "Today, we're announcing a new partnership with ARM to collaborate on the development of multiple generations of purpose-built CPUs to support compute and AI infrastructure."

• 10:20John Coogan?

  ARM called it the ARM AGI CPU. What a great name. The Wall Street Journal has another good write-up. Of this story, talking about how this, the timing is good, there is a boom in CPUs right now, but the stock is already priced very highly and everything has to go perfectly because it trades at one of the highest multiples of all the semiconductor companies.

• 10:43Jordi Hays?

  Let's talk about this data center moratorium bill.

• 10:45John Coogan?

  Yes.

• 10:46Jordi Hays?

  I wrote in the newsletter today, yesterday, Senator Bernie Sanders and AOC introduced a new bill, the AI Data Center Moratorium Act of 2026, that if enacted, would require all current and planned data centers to halt construction slash production. It even, it would even block upgrading existing data centers. So if you have an asset and you want to make changes to it, as this bill is written today, it would be blocked. They, they sort of like define data centers based on power demands, cooling capabilities, like how much power you can get to each individual rack. So they have been fairly specific, but trying to be like.

• 11:25John Coogan?

  Because I was, I was thinking I was fine with this. I was thinking like, I don't need any more AI data centers at this point. We can freeze those. I just want to build AGI data centers and ASI data centers. And so as long as I can just build tons of those, like it should be fine. But it is interesting that they, they seem to have figured out the semantic loopholes that might happen if it's defined AI.

• 11:44Jordi Hays?

  Yeah, the bill would halt all new data, new data center construction and upgrades until more legislation is put in place to guarantee the following. And these will be tough to guarantee. So from Sanders' site, they want AI to be safe and effective, preventing executives in the AI industry from releasing harmful products into the world that threaten the health and well-being of working families, our privacy and civil rights and the future of humanity. The economic gains of AI and robotics will benefit workers, not just the wealthy owners of big tech. And AI does not increase electricity or utility prices, harm communities or destroy the environment.

• 12:19John Coogan?

  Some of this stuff seems good.

• 12:21Jordi Hays?

  Yeah, all generally good, but.

• 12:23John Coogan?

  But no one wants unsafe and ineffective AI.

• 12:26Jordi Hays?

  Well, yeah, and the bigger problem is, is anytime you're creating, I don't think we've created a technology ever that didn't have.

• 12:36Jordi Hays?

  Some negative impact.

• 12:38John Coogan?

  Car crashes as an example.

• 12:40Jordi Hays?

  I'm sure this will be rewritten and debated and obviously it has a long way to go before becoming law, but this set of requirements seems completely impossible to actually achieve.

• 12:52John Coogan?

  It depends on how you define it. I mean, AI does not increase electricity or utility prices like the ratepayer protection pledge and behind the meter stuff could.

• 13:00Jordi Hays?

  I'm more talking about number one.

• 13:02John Coogan?

  Number one, safe and effective. It's all in how you define that. Like some of the, some of the parental controls are a good example of like how to take that overarching thesis and then boil it down into something tractable. And when I hear that, I think like, oh, like I don't know how we are defining safe. I don't know how we're defining effective. Like this feels like this could be like some sort of very vague thing where like if one particular administration likes this company, they just approve it or not or whatever. But then when we actually talk to lawmakers and you hear something like, oh yeah, we're going to, you know, require parental controls. So if your, if your offspring has a, you know,

• 13:43John Coogan?

  an AI account, you can say, hey, like they are this age. Don't show them anything that's inappropriate for that age. That seems good. So I don't know.

• 13:50Jordi Hays?

  Overall, at least this, this first bullet point, preventing executives in the AI industry from releasing harmful products in, in the world.

• 13:58John Coogan?

  Yeah.

• 13:58Jordi Hays?

  That feels like you could end up having something like an FDA that's like every product you create needs to go through years of, of studies in order, in order for the government. And it's like, hey, I just wanted to create like a slightly more AI native version of the SAS tool.

• 14:17John Coogan?

  Yeah.

• 14:18Jordi Hays?

  Do I really?

• 14:18John Coogan?

  I want to make SAS.

• 14:20Jordi Hays?

  I just want to make SAS, Senator.

• 14:21John Coogan?

  At the same time, like the, like the, the bull case, I mean, I, I think we're, I think the FDA model would really slow things down based on how long the FDA takes to approve things. At the same time, what is the definition of harmful here? Is it net harmful products? Because that is the goal of the FDA. They release drugs all the time that have side effects. You take those to cure your cancer, but it's going to make you throw up. Or it's gonna make you lose your hair. And people are like, yeah, I'll take that. I'll take that trade. And so, you know, if you, if you went through the government, you said, okay, yeah, I'm gonna give you this tool that can like, write code, but sometimes it's gonna hallucinate and like, you might get a code, you might get some code that doesn't pass tests. I'd be like, yeah, okay, like, it speeds me up on, on average, I'm, I'm in, like, that's fine. And having some of those disclosures, and it's the same thing with knowledge retrieval.

• 15:05John Coogan?

  Like, I, I, I do a deep research report, I get something that's 99% of the way there. Maybe there's something in there that's like, oh, that's actually like misattributed, or that number's, I, I know that that number's from this report online that was wrong, and they, and the model doesn't, and so I need to fact check it. Like, I still see that as like net beneficial, but there are, of course, like, like flaws in every system. And so, you know, again, it's like, where, how does this get defined over time? That's like, important.

• 15:33Jordi Hays?

  One thing I noticed from the announcement was that they are using AI leaders' own statements against them. And it's easy to see how this would resonate with their constituents.

• 15:42John Coogan?

  This is really powerful.

• 15:43Jordi Hays?

  Uh, so they, on Sanders' websites, he included this quote.

• 15:47John Coogan?

  Okay.

• 15:47Jordi Hays?

  "In December, Elon Musk, who leads XAI, said he had, quote, 'a lot of AI nightmares,' and would, quote, 'certainly slow down AI and robotics if he could.'"

• 15:56John Coogan?

  It's so interesting, because Elon doesn't talk about that with like, the rollout of electric cars, or the rollout of, of space travel. He's not saying like, oh yeah, like, you know, 2030 is too soon to get to Mars. We need to slow down on the, on the race to the moon, like, let's really figure out the, the spacesuits first.

• 16:13Jordi Hays?

  Yeah.

• 16:13John Coogan?

  You know, he's like, let's just go.

• 16:14Jordi Hays?

  And then another one, in January, Demis, the head of Google's DeepMind, said he would support an AI pause if he knew other countries and companies also paused development. In February, Dari Amade, the head of Anthropic, said he was absolutely in favor of trying to slow down AI development if other countries also slowed down.

• 16:32John Coogan?

  That was Davos, I believe, both in January and February.

• 16:35Jordi Hays?

  So continuing.

• 16:38Jordi Hays?

  I wrote, but the problem, of course, is that there is zero movement on getting other countries to slow down. I can imagine some companies that would be like.

• 16:43John Coogan?

  There's already comments in the chat about like, yeah, let China win.

• 16:46Jordi Hays?

  Yeah, I'm not going to name the countries that would be down to slow down, but I think we all know that China, even if they agreed to something like this, wouldn't just automatically do anything about it. But the problem of course.

• 16:59John Coogan?

  Are there any countries that are like, yeah, we definitely should, we're ready to slow down, like we're France.

• 17:04Jordi Hays?

  Well, I think if you're way behind, if you're way behind, there's kind of a benefit, right? Elon had said, I think in 2023, that he supported like a six month pause. At that moment, that would have been awesome, because hey, if I could just have six months to like get my.

• 17:19John Coogan?

  I feel like if you polled people in the south of France or the Amalfi Coast, like those folks would say, we should just slow down generally, like AI, but also just slow down our lives, enjoy a glass of wine, hit the boats.

• 17:31Jordi Hays?

  Yeah, or even like a summer break.

• 17:32John Coogan?

  Just a summer break, yeah.

• 17:33Jordi Hays?

  Four weeks.

• 17:34John Coogan?

  Yeah, or even like during the workday, like taking a break, taking a nap, just taking, just slowing down generally. I think, I think there's a lot of people that are just in favor of that.

• 17:41Jordi Hays?

  Doesn't that mean that China should be more in favor of slowing down?

• 17:44John Coogan?

  That is interesting.

• 17:45Jordi Hays?

  Well, I'm just saying, I can imagine in the same way that like for as many chips as we give them, advanced GPUs as we give them, you can assume they're still going to put an immense amount of pressure to kind of stimulate the local semiconductor industry.

• 18:00John Coogan?

  Yeah.

• 18:01Jordi Hays?

  In the same way here, I'm sure they would love for the United States to just pause all new data center construction. I think it's possible that they would like generally say like, yeah, like this seems good, but then what would they actually do? They would just use that as an opportunity to catch up, right?

• 18:18John Coogan?

  So my question is like, where does China actually stand on this? I'd be very interested to know, maybe you could look it up. Like, has the Chinese Communist Party actually put out any statements about whether they want to accelerate or pause AI development? Because there, I think that they might refrain from taking that stance because it would discourage local indigenous development. If the government is coming out and saying like, we want to slow down, then a lot of entrepreneurs are going to be like, okay, I'll go back to. Commerce, I'll go back to manufacturing. Like, I'm not going to work on this because the government doesn't want me to. And, and so I feel like there's this tug and like, even though I agree with you, like it would be in their advantage to say,

• 18:59John Coogan?

  hey, we want to slow down. Everyone should slow down. We're pro slowdown. If they actually said that, it would have an immediate slowdown effect on the local AI progress. Does that make sense? Yeah, because even, even if they, even if they, if they just take that stance because it's authoritarian country, like there's like this, like, like the Bernie Sanders comment stands in opposition to other politicians who are saying like, no, actually, things are going well. And here's how we're going to, you know, like advance energy and to build more. But if you don't have that and it comes down as like a dictate, like this is the stance from the government, it's much harder for local entrepreneurs and local AI labs to like push back against that because it feels like they're all of a sudden in opposition to the government.

• 19:38Jordi Hays?

  So just to kind of finish my thought, all these quotes like must go extremely hard. If you're not kind of acknowledging the full picture, which is that, yeah, leadership is saying, yeah, if you get other countries to agree to slow down, we'd be open to it.

• 19:53John Coogan?

  Yep.

• 19:53Jordi Hays?

  But that is like the big elephant in the room. They don't mention any even conversations or dialogue with other countries around slowing down. And I don't think there's been any. So anyways, the act has a long way to go. And it seems like the odds of it getting into law are low, but not zero. Safe to say that as written, the requirements in the bill would be an incredible gift to America's adversaries and catastrophic for overall AI progress. The question becomes if anything like this were to become law, what are the effects of that, right? Space, right? The space data center people are saying like, space data centers don't seem so silly now.

• 20:31John Coogan?

  Yeah.

• 20:31Jordi Hays?

  Taking that angle, although I'm sure they would also be like, you can't put them up there either. We're gonna, we're gonna try to.

• 20:37John Coogan?

  Yeah, I mean, there's also, there's also just like the globalization process that happened based around environmentalism.

• 20:45John Coogan?

  In like the 90s WTO Ascension for China, like the reason that a lot of the mining happens in China is because like we said like we don't want that here, right? It's dirty, it's gross, there's chemicals, there's pollution. And so like out of sight, out of mind, let's push it abroad. And we could do that again with data centers. We could just be like, they're all in Canada or Mexico, or they're all in some, you know, Australia, or you know, there could be a receptive country out there that just is like, we would love, we are an ally now, and we'd love to get all these data centers. And then you have to ask the question of like, well, what does that look like in 30 years?

• 21:17Jordi Hays?

  Data centers generate, they don't create a lot of jobs locally. They create a meaningful amount of work during the development process. But then they continue to generate massive amounts of tax, local tax revenue.

• 21:31John Coogan?

  Yeah, I actually don't know how you tax.

• 21:33Jordi Hays?

  The data center that was blocked, I think in New Jersey, was going to be generating like tens of millions of dollars of local taxes.

• 21:40John Coogan?

  That seems pretty good.

• 21:41Jordi Hays?

  Yeah, and the environmental concerns. I think everybody should want to make sure that if we're investing hundreds of billions of dollars into these things, that we're not destroying our lovely mother earth. But, and the energy costs, again, real concern, but we're making, we're making progress there.

• 21:59John Coogan?

  Yeah. Meta YouTube found addictive, harmful. It's like one of the hardest hitting headlines I've ever seen on the front of the Wall Street Journal. For two companies that are usually relegated to the business and finance section, they made it to the front page because they were found guilty or, you know, by California jurors. California jurors say the tech companies designed their apps to cause injury to kids. Very, very bad. But Brandon Gurrell had a take and a write-up and some explanation of what's actually going on here. The total damages are 3 million each company, roughly 6 million total. And I had a friend who's a lawyer who texted me and sent me the number and was like, hey,

• 22:42John Coogan?

  I'm predicting that it'll be like 3M. And I didn't read the M and I was like, okay, 3 billion, like what do I do? This is not that big of a deal. And then it was 3 million. And I was like, that's extremely low compared to like the numbers that we normally see from big tech companies. But this has much broader implications because this is precedent setting and there will be a flood of other

• 23:02Jordi Hays?

  And Zach's like, I did spend all of my free cash flow on data centers, but if you give me another two seconds, I will have the cash flow to cover this. So just give me like two seconds.

• 23:15John Coogan?

  Yes. But it is, it is a very important case, even though this particular ruling is not changing the cash flow structure of these businesses, because it has a lot of ramifications and there's a lot more plaintiffs that are in the queue. So yesterday, a Los Angeles jury, both Meta and YouTube liable for a 20-year-old woman's mental health crisis in a bellwether trial that treated platforms as, quote, defective products and potentially marks the end to the absolute immunity nature of Section 230. In the case, the plaintiff's lawyer, Mark Lanier, argued that Meta and YouTube built, quote, "digital casinos that use neurobiological

• 23:55John Coogan?

  techniques similar to those employed by slot machines." Fun fact about ARM throwback, the first chip that the company, the precursor company, ever built was a chip that went into a slot machine. They call them fruit machines in, in England.

• 24:09Jordi Hays?

  Fruit machines?

• 24:10John Coogan?

  Fruit machines. They call them fruit machines because they have like the cherries and the strawberries and the bananas and you line them up. The jury found that specific features of Meta and YouTube are designed to be addictive. Infinite scroll creates an environment where there are no natural stopping points. Algorithmic recommendation feeds users, feeds users highly engaging content. Autoplay removes users' agency in choosing whether or not to watch the next video. Notifications pull users back in by exploiting their need for validation. Instagram beauty filters contributed to the plaintiff's body dysmorphia. Features like the like button exploit users Biological need for societal approval. This is what the lawyer argued.

• 24:54Jordi Hays?

  Shake Shack exploited my biological need for food.

• 24:59John Coogan?

  Yes, there is this question. There was Taylor Lorenz had some great takes here. She said.

• 25:04Jordi Hays?

  So Taylor has come out in the last like 48 hours.

• 25:08John Coogan?

  Protect.

• 25:08Jordi Hays?

  I'd say is like the number one defender of big technology.

• 25:11John Coogan?

  Yeah. She had a take that was like, is it Spotify addict you to music by playing like good songs for you on demand?

• 25:18Jordi Hays?

  This DJ, this, this AI DJ is simply too good.

• 25:22John Coogan?

  I mean, that's kind of the argument. They didn't obviously go after Spotify. They went after Meta and YouTube. But yeah, there's a question about like, you know, what UI features? What are dark patterns and how do we regulate those? And it's very interesting, but the bellwether nature of the outcome has significant implications for social media. There are over 10,000 individual personal, personal injury cases, almost 800 school district claims and 40 state level cases pending nationwide that are similar to KGM versus Meta and YouTube. More broadly, the social media industry's reliance on section 230, which has up to now shielded them from liability for user generated content, may no longer be enough to protect them from litigation like this.

• 26:05John Coogan?

  To be clear, this case is not, is not attacking section 230 because it's not making the argument that someone uploaded a video to YouTube that said, you should be sad, you should be afraid. It's over. And that made someone sad. That is the content that is user generated. That is protected under two, section 230. You might be able to go after the individual creator of that video. If I make a video that says like Jordy Hayes sucks and should be sad. And then you get sad, you might be able to sue me, I think. But this is different because they went after the like button, the infinite scroll, the recommendation feeds, the features that are built by the platforms themselves. So if the decision makes it through appeals, and this might go all the way to Supreme Court, we'll see.

• 26:46John Coogan?

  Platforms may be forced to redesign their user experiences and algorithms, put up age verification, even deprecate infinite scroll. Obviously, changes like this would have an effect on both these platforms ad based revenue models. Meta and Google plan to appeal the decision. It's not hard to imagine this one making it to the Supreme Court. We have to start apologizing to the schizophrenic community. There was a surveillance drone. Reportedly flown by infiltrator elements and disguised as a natural bird such as an eagle that has been spotted in Iran. This goes back to Taylor Lyons because I believe she worked with the folks behind the viral stunt Birds Aren't Real. That was sort of a commentary on the conspiratorial nature of the internet.

• 27:28John Coogan?

  And in that stunt, they make the argument that birds need to be recharged and they're all spying on you and no birds are real. Of course, that is very satirical and funny. But apparently someone made a drone, some, you know, organization made a drone that looks like a bird so it can sneak behind enemy lines and spy during the conflict, which is remarkable.

• 27:52Jordi Hays?

  Do you think there will ever be video games that are effectively, you're just remote piloting something in the real world?

• 27:59John Coogan?

  So I have heard of this years and years ago, that there was something along those lines that would allow you to hunt remotely. So you go to a website and you control a weapon that can hunt an animal.

• 28:14Jordi Hays?

  Do they close the loop, like help you actually get meat?

• 28:17John Coogan?

  Yes, yes. So after you down the animal, they will go and ship it to you. So you can mount it on your wall. The reactions to the Meta and YouTube trial continue. Ariel Givner says, this is disgusting and I can't wait for the appeals. The precedent set by YouTube being liable for screen time addiction is kind of scary. Treating algorithms like a defective product opens the door to endless lawsuits over addictive tech. What's next? Books? Video games? Junk food? Video games, we gotta do something about. Those things are too, too fun, too fun. Truly, we gotta make them.

• 28:50Jordi Hays?

  Except you ascended, you beat your addiction.

• 28:53John Coogan?

  Yeah, might have been playing a game earlier this week. Sneaky little 45 minutes.

• 28:58Jordi Hays?

  Really?

• 28:59John Coogan?

  Yeah.

• 28:59Jordi Hays?

  No.

• 29:00John Coogan?

  Yeah, it was good. Player obscura.

• 29:02Jordi Hays?

  I'm gonna go, I'm gonna go look.

• 29:03John Coogan?

  You gotta pull me out. I'm addicted. I don't know, it's depressing. It's making me sad thinking about these tech companies having to pay fines and it's just ruining my mood entirely. And it was like, you can tell that the, that the way the lawsuit was designed, was designed... To take an emotional toll on me, suck me in, make me read all of the, all of the transcripts from the court, all the, all the reporting, all the research. Should he be held accountable for what he's doing? I don't know. We'll see.

• 29:32Jordi Hays?

  Meta, of course, trading down massively today, almost 9% off of this. And, you know, it, it, there's some real concerns, right? If they, there's new legal risk, there's thousands of other kind of lawsuits floating out there. You might get more copycat lawsuits, class actions. And then the real question is like, do you, do they have to make any product level changes? Does that end up impacting time spent in the app, which will impact the advertising business? Yeah, this is a weird one on a personal level because like on one hand, my kids, I'm gonna keep away the infinite scroll machine as long as I possibly can, right? And I will, you know, I don't, I don't think back on the time that I've spent on social

• 30:17Jordi Hays?

  media and think, wow, I'm so glad I, I put in those, those long hours and I really put in the work.

• 30:23John Coogan?

  Yeah. It just doesn't seem that addictive to me. I can pull myself away like anytime.

• 30:30John Coogan?

  It's not a big deal. It's just not a big deal.

• 30:34Jordi Hays?

  We lost it.

• 30:37Jordi Hays?

  It just sounds like, it sounds.

• 30:43Speaker 02

  Ask you a question. If you follow me, I'll double your bank account. Wait, on Instagram? Okay.

• 30:47John Coogan?

  I mean, this is good kind of.

• 30:49Jordi Hays?

  The funny thing is, how addictive are the apps themselves? Can they argue that the apps themselves, it's really not us?

• 30:56John Coogan?

  Yeah.

• 30:57Jordi Hays?

  Right?

• 30:57John Coogan?

  I've seen some people's channels not very addictive.

• 31:00Jordi Hays?

  Yeah.

• 31:00John Coogan?

  You know, like.

• 31:01Jordi Hays?

  Yeah. In many, in many ways, like our, our content, right? We talk about niche subjects in technology and business. There's a lot of content on YouTube that is far, far, far more addictive.

• 31:13John Coogan?

  Yeah.

• 31:14Jordi Hays?

  But.

• 31:14John Coogan?

  Yeah. No, I, I've generally had a good experience on social media. Thank you for watching.

• 31:19Jordi Hays?

  Thank you for watching today.

• 31:19John Coogan?

  Apple Podcasts and Spotify. Sign up for our newsletter, tbpin.com and we'll see you tomorrow at 11 a.m. Pacific. See you tomorrow. Goodbye.