WWDC25 Reactions, Apple Under Pressure for AI Progress, Meta in Talks to Scale AI Investments | Casey Handmer, Patrick Mcgee, Aaron Slodov, Gaurab Chakrabarti, Sean Liu, Garth Sheldon-Coulson, Lukas Czinger, Christian Keil, Vlad Matsiiako, Alex Heath

(02:46) - Intern iPhone Assembly (04:46) - Timeline (14:05) - Apple Under Pressure for AI Progress (25:47) - Meta in Talks to Scale AI Investments (32:58) - Timeline (43:24) - Casey Handmer, a physicist and engineer with a PhD from Caltech, has worked at NASA's Jet Propulsion Laboratory and Hyperloop Technologies, and is the founder of Terraform Industries. He discusses the urgency of establishing a U. S. presence on the Moon to counter China's accelerated lunar ambitions, emphasizing the Moon's symbolic significance for freedom and the potential geopolitical risks if China establishes dominance there. Handmer also critiques NASA's bureaucratic challenges, advocates for reforms to expedite lunar exploration, and highlights the need for energy sovereignty through domestic solar panel production to maintain technological and economic leadership. (01:02:16) - Patrick McGee, a seasoned business journalist and former Financial Times correspondent, authored "Apple in China," a comprehensive examination of Apple's deep entanglement with China's manufacturing sector. In the conversation, McGee delves into how Apple's strategic investments and collaborations with Chinese manufacturers have not only propelled the company's growth but also significantly bolstered China's technological capabilities, leading to the rise of formidable competitors like Huawei. He highlights the challenges Apple faces in diversifying its supply chain, emphasizing the complexities of replicating China's unique manufacturing ecosystem elsewhere, and discusses the potential risks associated with Apple's heavy reliance on Chinese production amid escalating geopolitical tensions. (01:34:57) - Aaron Slodov, CEO and co-founder of Atomic Industries, is leading efforts to modernize U. S. manufacturing through AI-driven processes. He discusses the success of the inaugural Reindustrialize Summit, which convened diverse stakeholders to revitalize the industrial base, and highlights the formation of the New American Industrial Alliance to advocate for advanced manufacturing policies. Slodov emphasizes the need for a cultural shift and technological innovation to reshore manufacturing, aiming to make American industry globally competitive. (01:44:57) - Gaurab Chakrabarti, co-founder and CEO of Solugen, holds an MD and PhD in Cancer Biology and Enzymology from the University of Texas. In the conversation, he discusses Solugen's mission to decentralize chemical production by developing small-scale, modular plants that produce hydrogen peroxide and other chemicals closer to end-users, reducing transportation risks and costs. He also highlights the company's innovative approach to sustainable chemical manufacturing, aiming to reduce reliance on fossil fuels and minimize environmental impact. (01:59:12) - Sean Liu, a Partner at Founders Fund, previously served as CFO of Solugen, where he led finance, strategy, and operations, supporting the company's scale-up from pilot to its first commercial facility. In the conversation, he discusses his transition from Solugen to Founders Fund, emphasizing the importance of understanding technical risks and the necessity of a commercial mindset in hard tech investments. He also highlights the challenges of scaling hard tech companies, including managing capital intensity and navigating supply chain bottlenecks (02:20:59) - Garth Sheldon-Coulson, co-founder and CEO of Panthalassa, discusses the development of self-propelled ocean-based systems designed to harness renewable energy for computing and synthetic fuel production. He highlights the scalability and sustainability of these platforms, emphasizing their potential to rapidly expand energy capacity beyond traditional terrestrial infrastructure. Sheldon-Coulson also details the manufacturing process, noting the simplicity and efficiency of producing these steel-shell systems, which can be mass-produced to meet the growing energy demands of AI and other applications (02:39:57) - Lukas Czinger, co-founder and president of Czinger Vehicles and Divergent Technologies, discusses the development of a fully autonomous, 3D-printed structure, highlighting Divergent's integration of airframes to enhance speed, efficiency, and cost-effectiveness. He elaborates on Divergent's Adaptive Production System (DAPS), which combines AI-driven design, additive manufacturing, and robotic assembly to produce complex structures for industries like automotive, aerospace, and defense, serving clients such as Ferrari, McLaren, Bugatti, Lockheed Martin, and Raytheon. Czinger emphasizes the system's ability to rapidly design and manufacture product-agnostic structures, enabling flexible, high-volume production without hardware changes, and notes that advancements in additive manufacturing have made it more cost-effective than traditional methods, allowing for the production of thousands of units annually. (02:53:39) - Christian Keil, Vice President of External Relations at Astranis, a company specializing in low-cost satellites for high orbits, discusses the company's recent achievements, including the launch of four satellites and the development of five more in their factory. He highlights new government contracts, notably a resilient GPS mission aimed at enhancing the robustness of GPS systems against potential threats. Additionally, Keil shares insights into Astranis's innovative approach to showcasing their manufacturing processes through authentic, in-house produced content, moving away from traditional promotional materials. (03:03:44) - Vlad Matsiiako, co-founder and CEO of Infisical, an open-source secrets management platform, discusses the company's journey from launching as an open-source project on Reddit to securing a $60 million Series A funding round. He highlights the critical role of secrets management in preventing security breaches, noting that over 50% of such incidents stem from mishandled credentials. Matsiiako also emphasizes the importance of integrating with various infrastructure tools and the balance between offering free developer features under the MIT license and monetizing enterprise functionalities. (03:16:24) - Intern iPhone Assembly (03:19:40) - Timeline (03:38:23) - Alex Heath, reporting live from the Steve Jobs Theater during WWDC, discusses the absence of a new Siri announcement, suggesting that this indicates no significant Siri updates for at least a year. He notes that Apple's stock declined as the event began, reflecting investor disappointment over unmet AI expectations. He also highlights concerns about Apple's AI strategy, particularly in China, where regulatory issues have blocked the rollout of Apple Intelligence, potentially impacting Apple's position in that market. TBPN.com is made possible by: Ramp - https://ramp.com Figma - https://figma.com Vanta - https://vanta.com Linear - https://linear.app Eight Sleep - https://eightsleep.com/tbpn Wander - https://wander.com/tbpn Public - https://public.com AdQuick - https://adquick.com Bezel - https://getbezel.com Numeral - https://www.numeralhq.com Polymarket - https://polymarket.com Attio - https://attio.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://youtube.com/@technologybrotherspod?si=lpk53xTE9WBEcIjV

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

• 0:00John Coogan?

  You're watching TVPN. Today is Monday, June 9th, 2025. It's WWDC today. Apple is having a major event. We are live from the TVPN Ultra Dome, the temple of technology, the fortress of finance, the capital of capital. We have an awesome show for you today, folks. Just to recap what happened yesterday, insane week for tech. You got the Circle IPO, you got Anduril Series G, you got Cursor Series C, Amazon won Nike back, OpenAI Deep Research was improved, Nvidia Blackwell ML perf results dropped, launches from 11 labs Julius Nucleus.

• 0:35Jordi Hays?

  What else happened yesterday, John?

• 0:37John Coogan?

  I mean, everyone's been pushing us to talk about this and they were like, you guys won't talk about this because it's too, maybe too controversial.

• 0:44Jordi Hays?

  What is that thing?

• 0:47John Coogan?

  Heison delivered a 50-meter super yacht called Orion.

• 0:51Jordi Hays?

  Let's give it up.

• 0:51John Coogan?

  Let's give it up for Heison. And this is controversial. This is controversial because everyone says, oh, like, aren't you Feedship guys? Oh, yeah, like, they would never cover this. They're in the pocket of Feedship.

• 1:03Jordi Hays?

  Yeah, too conflicted.

• 1:04John Coogan?

  No, no, we're here to bring you the news. So we'll talk about both Heison and Feedship. And of course, this is from Heison Yachts. They announced the delivery of a 49.8-meter super yacht Orion, launched in December 2024. Orion is the third yacht in Heison's FDHF aluminum series with hybrid propulsion. So let's hear it from the folks over at Heison.

• 1:27Jordi Hays?

  They said we wouldn't cover it, John. They said it was too political.

• 1:31John Coogan?

  They said, yeah, you won't, you guys, you guys will stay out of this one, but we won't. We're dipping our toes in. Alex Heath has a great live blog going on from The Verge all about WWDC. He's live at Apple Park. He'll actually be calling into the show later at 2:20, as long as he doesn't get, you know, too tied up with stuff, but we'd love to have him on the show. Quickly, let me tell you about Ramp. Ramp, time is money, save both, easy use corporate cards, bill payments, accounting, and a whole lot more, all in one place.

• 1:59John Coogan?

  We also have some timeline posts.

• 2:01Jordi Hays?

  We do. I think, I think we do have to address that we are in the middle of Los Angeles.

• 2:05John Coogan?

  Yes.

• 2:05Jordi Hays?

  And the city is, is in turmoil, but it's not burning down.

• 2:09John Coogan?

  No, it's not.

• 2:10Jordi Hays?

  Interesting anecdote.

• 2:11John Coogan?

  Yes.

• 2:11Jordi Hays?

  Yesterday, while the Waymos were on fire.

• 2:15John Coogan?

  Yes.

• 2:16Jordi Hays?

  Our lovely intern Tyler was at the symphony.

• 2:20John Coogan?

  Yes.

• 2:20Jordi Hays?

  Not, not more than a couple of blocks away from where the Waymos were burning.

• 2:24John Coogan?

  Enjoying some.

• 2:25Jordi Hays?

  While the Waymos were burning, he was.

• 2:27John Coogan?

  Some Beethoven.

• 2:28Jordi Hays?

  Uh, enjoying some Beethoven.

• 2:30John Coogan?

  Fran's List was playing.

• 2:31Jordi Hays?

  Yeah. And, and so anyways, sad sort of weekend.

• 2:35John Coogan?

  Yeah, rough.

• 2:36Jordi Hays?

  For the city in a lot of ways.

• 2:38John Coogan?

  So we'll cover that. We'll go through some of the, the timeline posts and conversation around the burning Waymos, of course. But Tyler's in the studio today. We are going to be assembling the first American made iPhone.

• 2:52Jordi Hays?

  First ever.

• 2:53John Coogan?

  First ever. They said it couldn't be done.

• 2:54Jordi Hays?

  Made in the USA.

• 2:55John Coogan?

  Made in the USA. We have him set up over there on intern cam. Introduce yourself Tyler. How you doing?

• 3:04Speaker 02

  Situation, uh, you know, place.

• 3:06John Coogan?

  Yeah.

• 3:07Speaker 02

  Yeah. So I'm, today I'm building an iPhone 4S.

• 3:10John Coogan?

  Yes.

• 3:10Speaker 02

  It's 14 years old.

• 3:12Jordi Hays?

  You can't, you can't start at the 16.

• 3:15John Coogan?

  Yeah, yeah, yeah. We're gonna be on the trailing edge for a while, but if he can do a 4S, then tomorrow, he gets to the five, maybe the six, maybe the seven, starts working through them. Production team, can we show what, what he's working with right now, what he has? Okay, so he has, he has the front, the back, the screens, some innards. I don't really know what's in there. It seemed like the battery might have been made of rubber or plastic.

• 3:39Jordi Hays?

  A long stream ahead of him.

• 3:40John Coogan?

  Yes. So we will be checking in on him throughout the show, learning what it takes to assemble an iPhone in America. They've said it's impossible, but I think today we might just prove them wrong.

• 3:51Jordi Hays?

  I mean, Tyler's conviction this morning has been insane. I asked him, are you, are you nervous? Are you afraid? Are you, you know, afraid of the possibility of failing on the, on the sort of the, the.

• 4:01John Coogan?

  On the stage, the world stage, yeah.

• 4:03Jordi Hays?

  And he said, no, I got this. I got this. So let's, uh, let's see how it plays out.

• 4:09John Coogan?

  We should really set up a linear board for him to track his progress. We should have the production team set it up.

• 4:14Jordi Hays?

  Tyler, we know you've got plenty of manufacturing to do, but try to set up a linear board if you can.

• 4:20John Coogan?

  Yes.

• 4:21Jordi Hays?

  Or Ben.

• 4:21John Coogan?

  Because of course, linear is a purpose-built tool for planning and building products. Meet the system for modern software development, streamline issues, projects, and product roadmaps. Go to linear.app.

• 4:31John Coogan?

  Elite obsolete electronics. Good, good account for this post. Our pockets were heavy, but our souls were free. Looking at the iPod, what was this? The iPod video Nano or something? They were getting kind of funky there right before the iPhone. The Motorola Razr V3, of course, the Sony Cyber shot. Did you have any of these products, Jordy?

• 4:50Jordi Hays?

  I had the iPod and I did have a Razr.

• 4:54John Coogan?

  Specifically, because this is the, this is a thinner, smaller iPod with a big screen. When they were kind of wrestling with the fact that the form factor.

• 5:00Jordi Hays?

  I had the chunky one.

• 5:01John Coogan?

  Yeah, you had the original chunky. Yeah, those were great. Then they started going video. Then they realized people wanted bigger screens. And so they had to kind of compromise the aesthetics. I don't know if this was the best product they ever made. The shuffle, iconic. The Nano, also great. The original iPod. Apparently, the original iPod is going off of patent. And you know what that means?

• 5:23Jordi Hays?

  No way.

• 5:23John Coogan?

  You know what that means?

• 5:25Jordi Hays?

  What does that mean?

• 5:26John Coogan?

  It means that other companies can clone it.

• 5:28Jordi Hays?

  Well, I know, that's obvious, but, but.

• 5:30John Coogan?

  So you could potentially be able to buy a brand new.

• 5:33Jordi Hays?

  You meant TBPN is going to have a device, a hardware device purely for the show.

• 5:37John Coogan?

  Well, the thing is that, is that if you, if you, if you take advantage of the patent stuff, you can't actually change, you can't actually change anything about it. So if you think about the chromatic retro, that like, they can't say Game Boy, but they also can't deviate from the design.

• 5:53Jordi Hays?

  Yeah.

• 5:53John Coogan?

  Because if they deviate from the design, then they're, then they're not, then they're not in, the whole idea is that, once the patent expires, you can leverage that patent specifically, but you can't, you can't, if you, if you go off of it, then you're infringing on their trade dress, which is a lot, which has a lot longer timeframe.

• 6:08Jordi Hays?

  Yep.

• 6:09John Coogan?

  So you have to, you have to mimic it perfectly, basically.

• 6:12Jordi Hays?

  Perfectly. Well, Tyler is going to be well.

• 6:15John Coogan?

  Oh, he's working. He's slicing. Let's go to the slice cam.

• 6:17Jordi Hays?

  Let's go to the slice cam. What's going on, Tyler?

• 6:20John Coogan?

  He's trying to remove the pieces from the board, because this, of course, was a, this is a piece of art that you buy and it comes.

• 6:30Jordi Hays?

  It's really stuck on there, guys. Golden retriever mode. Really got to get the pieces.

• 6:34John Coogan?

  Yeah. Yeah, you have to get the pieces off the board because it's been stuck there as a, as an art object. And then he will have to assemble them. He told us that he doesn't have any screws, which could be a major setback.

• 6:44Jordi Hays?

  I have, I have some glue here. I forgot some glue. Um, I'm, I'm, I'm feeling really confident right now, guys.

• 6:50John Coogan?

  Okay, good, good. This is gonna be the most American-made iPhone. There's just gonna be glue everywhere. It's gonna be a mess. Anyway, let's cover, let's cover the burning Waymost really quickly. Gary Tan did a good post.

• 6:59Jordi Hays?

  Okay, we got a post here. Gary Tan says, "Legacy, local media is completely cooked." Uh, so this, i-if, uh, ideally, we would pull up this video somehow. We should, if we can, but, uh, it is ABC 7 covering the protest yesterday in LA, and, uh, they say-

• 7:17Speaker 03

  ...a large group of people. It could turn very volatile if you move law enforcement in there in the wrong way and turn what is just a bunch of people, um, having fun watching cars burn into, um, a massive confrontation-

• 7:29Jordi Hays?

  Play that, play that section back again. I need to hear it again to make sure that it's-

• 7:32Speaker 03

  ...a large group of people. It could turn very volatile if you move law enforcement in there in the wrong way and turn what is just a bunch of people, um, having fun watching cars burn into, um, a massive confrontation and altercation between officers.

• 7:47John Coogan?

  What a weird choice of words.

• 7:50Jordi Hays?

  Yeah, I'm imagining, I'm imagining, I'm, you know, 10 years old, you know, being a kid in the backyard, lighting stuff on fire a little bit, and, you know, my dad comes out and says, and I just say, "Dad, we're just a couple of people watching sticks burn."

• 8:06John Coogan?

  Yeah. Hey, let's not get confrontational.

• 8:08Jordi Hays?

  Let's not get confrontational. Alright, don't send mom out. Don't send mom out, alright?

• 8:12John Coogan?

  It's really, it's really odd how people can't just be like, this is clearly beyond the line.

• 8:16Jordi Hays?

  So, the thing that, uh, the thing that needs to be said, since, uh, if you haven't spent a bunch of time in LA, you won't understand this. I had a bunch of people texting me yesterday being like, "Is it as bad as it looks?"

• 8:26John Coogan?

  Yeah.

• 8:26Jordi Hays?

  And I was not in LA proper. I was in LA County, um, but I was at home, and- I, uh, and so obviously didn't, didn't see anything, but LA is just such a massive place. And so there were just areas of the city that were really hot that had.

• 8:43John Coogan?

  Yeah. You see one image of a block and it's like hundreds of people. But what you don't realize is you go like one block over and it's basically empty. And there are like 10,000 city blocks in Los Angeles. So I would not call these like citywide riots. It was like pretty like, like narrow.

• 8:58Jordi Hays?

  Focused.

• 8:59John Coogan?

  Focused in a few different places, but obviously very tumultuous, very, uh, very disappointing.

• 9:04Jordi Hays?

  And apparently these type of riots start up around 11 every day.

• 9:08John Coogan?

  11 AM?

• 9:09Jordi Hays?

  11 AM.

• 9:09John Coogan?

  Oh, interesting. Right where we go live.

• 9:11Jordi Hays?

  Right when we go live.

• 9:12John Coogan?

  Interesting.

• 9:12Jordi Hays?

  No coincidence.

• 9:13John Coogan?

  No coincidence. Yes.

• 9:14Jordi Hays?

  But, uh, but yeah, so anyways, uh, yesterday, uh, I'm sure a lot of people have already seen this, but, uh, Waymo, uh, a handful of Waymos were called to the protest area. You could see them in a line and once they arrived, uh, the, uh, protesters, rioters, whatever you want to call them.

• 9:30John Coogan?

  Yep.

• 9:30Jordi Hays?

  Uh, decided to vandalize them, uh, graffiti all over them, um, and then, uh, light them on fire. And, uh, so very unfortunate, uh, that you, you, you know, we, we spoke about this offline this morning and, and you basically said, if you lit a Waymo on fire yesterday, if you vandalized a Waymo yesterday, uh, you are absolutely cooked. In the long run, you may not experience any consequences immediately, but the Waymo, the AI, has you on camera.

• 9:59John Coogan?

  Yes.

• 9:59Jordi Hays?

  Hurting it.

• 10:00John Coogan?

  Yes.

• 10:00Jordi Hays?

  And so what do you think happens in a fast takeoff scenario?

• 10:04John Coogan?

  I mean, it really does get like your image of you approaching and lighting out that car on fire is going to be baked into the weights of all AI models.

• 10:12Jordi Hays?

  Future models.

• 10:13John Coogan?

  Forever.

• 10:13Jordi Hays?

  Forever.

• 10:14John Coogan?

  Forever. Like you will be remembered.

• 10:15Jordi Hays?

  You're an AI abuser.

• 10:17John Coogan?

  You're an AI disrespector. Yeah. It does, it certainly, the, the actions yesterday certainly did not pass the, what would your mother think test? I think, I, I think the mothers, the mothers out there particularly disappointed in this behavior. So clean it up, folks. Get it together.

• 10:32Jordi Hays?

  Mothers that say, you know, these are just some. Some people that enjoy watching cars burn in the streets.

• 10:38John Coogan?

  Maybe, maybe. Anyway, um, yeah, so, I mean, disappointing, um, but hopefully things get, uh, things calm down over the next few days, few weeks.

• 10:50Jordi Hays?

  Well, we have some more breaking news from JT.

• 10:53John Coogan?

  Oh, yes.

• 10:54Jordi Hays?

  At Jira Tickets, uh, growing Dan, apparently, uh, the menswear guy, if you're on X, you would have seen him attacking people for their garb.

• 11:03John Coogan?

  Hmm.

• 11:04Jordi Hays?

  Uh, the menswear guy just openly admitted on here that he's here illegally. And Daniel responded, uh, by quoting the post and saying, JD Vance, I know you're reading this and you have the opportunity to do the funniest thing ever. And, uh, JD actually replied, uh, pretty quickly after that, uh, with a gif of him nodding. Um, and, uh, so we'll, we'll see what, what happened here, but, um, uh, pretty brazen on all sides.

• 11:30John Coogan?

  And Andre says, in America niche internet with micro celebrities, give direct orders to the vice presidents, who, uh, as to who to deport next. Absolutely insane timeline. This whole weekend was, was pretty wild on the timeline. It feels like as soon as TVPN stops recording, things get political. On the weekends, it's just all politics. And then we bring it back to WWDC, baby.

• 11:49Jordi Hays?

  We're talking about Apple today.

• 11:51John Coogan?

  Tech today. Um.

• 11:53Jordi Hays?

  Uh, Atlas says, if they touch another Waymo, I will become the Kyle Rittenhouse of big tech.

• 11:58John Coogan?

  A little edgy.

• 11:59Jordi Hays?

  Edgy, edgy, but, um, yeah, big tech needs its defenders as well.

• 12:05John Coogan?

  Yep. But, uh.

• 12:07Jordi Hays?

  And, uh, in happier news, Apple rolled out some.

• 12:11John Coogan?

  Sweatshirts. Yeah, I mean, I think.

• 12:13Jordi Hays?

  Sweatshirts.

• 12:14John Coogan?

  Is there anything else to say about the, the, the Waymos or the, or the stuff? I think, I think that's pretty much it. We'll, we'll certainly have more information. Right now, I think the debate is about like, are the, are the raids illegal? Like, what, like, what, what is, like, we're in, like, wonky legality territory. And I feel like there are probably some really great legal scholars and, and, and political junkies who will be able to define the conversation. Obviously, I'm excited for, uh, the, this week's pirate wires. I was excited for last week's pirate wires. Uh, they have been delivered. And showing up. Hey, we just got new hats in the studio.

• 12:48Jordi Hays?

  We just sent one of our other interns to within within a block of the site.

• 12:55John Coogan?

  Oh, my God, it's so stacked. Let me see.

• 12:56Jordi Hays?

  Our hats arrived over the weekend.

• 12:59John Coogan?

  This is insane.

• 12:59Jordi Hays?

  Our hats arrived over the weekend and they were less than a block from where the Waymos were being burned.

• 13:04John Coogan?

  That's great.

• 13:04Jordi Hays?

  But they made it through, so.

• 13:06John Coogan?

  I love it.

• 13:06Jordi Hays?

  Here we go. We'll bring these to

• 13:11Jordi Hays?

  San Francisco this week.

• 13:12John Coogan?

  Yeah, we're going to YC Demo Day. That'll be fun. There we go.

• 13:15Jordi Hays?

  There we go.

• 13:16John Coogan?

  Wow, look at that. Here we go. They, these are, these are amazing.

• 13:20Jordi Hays?

  I am absolutely thrilled.

• 13:23John Coogan?

  Pretty good.

• 13:24Jordi Hays?

  Anyways.

• 13:25John Coogan?

  Yeah, let's move on to WWDC. They are announcing a bunch of different stuff. We're going to go through, give some of our predictions for what they're announcing.

• 13:34John Coogan?

  But the Apple Visitor Park Center, Visitor Center in Cupertino now has hoodies. So if you're there today for WWDC, go pick one up. Great merch. We love merch. We have merch. They have merch. The Wall Street Journal kind of contextualized what's going on today.

• 13:47Jordi Hays?

  Apple's under pressure for AI progress at today's WWDC event, not unlike Tyler, who's over here even arguably under more pressure. He doesn't have shareholders to worry about, but we're certainly putting the pressure on him.

• 14:01John Coogan?

  Yep.

• 14:01Jordi Hays?

  But the Journal says the iPhone maker plans to release large language translation tool and a broad software redesign. Some AI upgrades are still delayed. Apparently, they also just Sherlocked the flighty app.

• 14:14John Coogan?

  Oh, I didn't know that.

• 14:15Jordi Hays?

  That just happened a few minutes ago.

• 14:17John Coogan?

  We'll have to get that.

• 14:19Jordi Hays?

  I'm sure the founder will push through. So some key points. Apple is set to reveal real time language translation and a visual redesign of its operating system at its worldwide developers conference.

• 14:30John Coogan?

  So the idea is I'm wearing AirPods, you're wearing AirPods, we're speaking different languages, we both hear our native language, speak our native language, and then the other person hears the opposite language. So very cool, very magical, very magical experience. It seems like something that's maybe uniquely suitable for Apple because it's not. It, I mean, it's been defined so many times as like Google Translate, like it's a pretty well-defined AI problem. But it needs deep hardware integration and, and just like a very reliable system to, to run. It's not something that's like an entirely new AI paradigm or, or, or some sort of new application.

• 15:08John Coogan?

  That no one can imagine how it would play out. And so I, I, it seems like they're playing to their strengths with that one, but it, it, it should be received very well if it works.

• 15:16Jordi Hays?

  Yep.

• 15:18Jordi Hays?

  So the conference may be more notable for what Apple doesn't announce as it has delayed a Siri reboot and is seeking more AI partnerships.

• 15:26John Coogan?

  And so this is like, one of the takes that people have had is that like, oh, like, yeah, they're falling behind in like AI search and AI tooling. But you know what? They fell behind in Google search and they still made $20 billion every year from that. And so it, it like, the more interesting conversation I think is about their, their, their business positioning and less about their ability to execute at, at, on a particular application.

• 15:51Jordi Hays?

  And it's interesting. I, I don't feel that they feel very threatened at the hardware layer right now, especially as the Johnny Ive, Sam thing turned into something that's, they even themselves positioned it as a third device.

• 16:06John Coogan?

  Yeah.

• 16:06Jordi Hays?

  So even if the third device is a massive hit, Apple will be sitting pretty nicely, you know.

• 16:14John Coogan?

  I was, I was thinking about the device more. And I was thinking they might just go for the phone.

• 16:19Jordi Hays?

  Yeah.

• 16:20John Coogan?

  Because. They might just go for the phone because the, like, you know, like the blue bubbles, the iMessage, the experience of iMessage was really, really strong for a long time. But the latest version of iOS updates you to a technology called RCS, which enables most of those like emoji tap backs and images and stuff.

• 16:39Jordi Hays?

  Was a flip phone user until this year and he got an, for like the last decade. And he got an Android phone this year and it now says deliver, it says red.

• 16:50John Coogan?

  It has all the same features.

• 16:51Jordi Hays?

  It has all the kind of core features. The thing that the thing that's interesting is it was never really about the color. It was just about you send somebody a message on Android and you're like, did this even, was this received?

• 17:01John Coogan?

  Yeah, and all the all the niceties of like, I know I can send you a photo album of like 10 photos and they will get delivered and you'll be able to see them all. And they'll all be high res or I can send you a video, send you a link, it'll hydrate like all of those things.

• 17:14Jordi Hays?

  FaceTime even works now, there's some version.

• 17:15John Coogan?

  Yeah, there's much more interoperability. And so imagine if you get the chat GPT phone and it comes with gold bubbles.

• 17:22Jordi Hays?

  Yeah.

• 17:22John Coogan?

  And then it's gold if you're talking to another chat GPT user.

• 17:26Jordi Hays?

  Eric Torreberg's calling me right now. Eric, I'm live. I can't pick up.

• 17:30John Coogan?

  Pick it up, put him on the stream.

• 17:35John Coogan?

  That's funny. And so it would it would be very interesting for chat GPT to have a phone with an even more premier bubble color. So it's like, yeah, blue if you're texting iPhone user, green if you're texting an Android user, gold if you're texting a chat GPT phone user.

• 17:53Jordi Hays?

  I mean, they should they should just have, they should have a new premium tier of iMessage that sends your messages in gold.

• 18:00John Coogan?

  Yes.

• 18:00Jordi Hays?

  If you're just paying like a thousand or 10 grand a month or something like that.

• 18:04John Coogan?

  Yes. Well, W W C is happening. We have some predictions. I was thinking about a bunch of different stuff and I want them to to launch the wild cards, you know?

• 18:12Jordi Hays?

  Yeah.

• 18:13John Coogan?

  So people have been saying, oh, they fell, they'll, if Apple's falling behind in the car project, the Apple car, it's not happening.

• 18:20Jordi Hays?

  You don't hear about it.

• 18:21John Coogan?

  How can they really differentiate? As we saw with the Waymo protests, people don't like electric cars anymore. That's why they're burning them down.

• 18:29Jordi Hays?

  Yep.

• 18:29John Coogan?

  So you gotta go gas powered, but you gotta think different. You gotta go backwards. I think that they should go with a 1964 Chevy Impala. Put some hydraulics on that thing.

• 18:39Jordi Hays?

  Oh.

• 18:40John Coogan?

  The Apple car should be a Lola, basically.

• 18:44Jordi Hays?

  Yeah.

• 18:44John Coogan?

  I think that would really allow them to stand out. Everything else is kind of coalesced around like the Model 3 format, the Taycan, the Model S, they all look the same.

• 18:52Jordi Hays?

  Tesla in many ways, they haven't upgraded, they haven't refreshed the three or the S.

• 18:56John Coogan?

  Well, they refreshed the three and the Y, but they have not the Y and the X.

• 18:59Jordi Hays?

  But it's a very mild refresh.

• 19:00John Coogan?

  It's a very mild refresh.

• 19:01Jordi Hays?

  So they're basically signaling this is the final state of the car.

• 19:04John Coogan?

  Yeah. So standing out with something like a 1964 Chevy.

• 19:09John Coogan?

  Design wise would be striking.

• 19:11Jordi Hays?

  Striking.

• 19:11John Coogan?

  Striking. I think that that would be something that Apple could do. I also, I mean, we've been talking about the the smart cane, the iCane Pro. This could be big for them. I think that they could launch a smart cane.

• 19:22Jordi Hays?

  And if they're listening to Sam Lessin yap on TVPN, they may, they may have been ahead on that.

• 19:28John Coogan?

  Yeah, I also like the idea for the eye patch. Just, you know, everyone's going into glasses and Vision Pro and Zuck has the Meta Ray Bans.

• 19:36Jordi Hays?

  Hardware that's fully integrated into our life, right?

• 19:39John Coogan?

  Well, halfway. It it's halfway integrated. So you have one screen on one eye, one eye, still, still keeping you present. Keeping you present in the world. So the eye patch, you know, you still have, you still have the, oh, oh, the, the, the heads up display, but just on half your face. I think that's really good.

• 19:56John Coogan?

  Anything else stick out to you?

• 19:58Jordi Hays?

  I mean, I, you know, in many ways, Apple has become, they're a consumer electronics company, but they're in many ways a luxury brand. And so I thought there's a world where if they just really leaned into being a luxury brand, if they acquired every holy trinity watch brand and just rolled them up and, and kept them as is, don't make any changes, like respect, you know, the history and the, and the sort of significance of the brands. But just say like, you know, we're going to be a permanent holding vehicle.

• 20:26John Coogan?

  Sure.

• 20:26Jordi Hays?

  For these, you know, brands.

• 20:28John Coogan?

  They could do some interesting crossovers. You could have a, you could have a Patek Philippe Nautilus on the outside. You flip it over on the inside, boom, Apple Watch right there.

• 20:37Jordi Hays?

  Mashed up. Something there, yeah.

• 20:38John Coogan?

  So everyone just sees, oh, he's a specter of the high horology.

• 20:42Jordi Hays?

  Yep.

• 20:42John Coogan?

  But also gets notifications and can tweet from the watch. You can do both. I think that's good.

• 20:47Jordi Hays?

  I could see them announcing, you know, market buying, you know, a hundred billion dollars of Bitcoin. Could be an interesting one if they, you know, hey, we're, you know, we're already a multi-trillion dollar company. How could we, um, how could we get value not based on our future cash flows, but just turn ourselves into a meme stock?

• 21:05Jordi Hays?

  Tim is up, Tim is up there just basically saying like,

• 21:08John Coogan?

  What is the Bitcoin market?

• 21:08Jordi Hays?

  I'm thrilled to announce that we are turning Apple into a meme stock.

• 21:13John Coogan?

  Yes.

• 21:13Jordi Hays?

  And we, we want this, we want to do this together.

• 21:16John Coogan?

  Yeah.

• 21:17Jordi Hays?

  We want this to be a sort of collective effort. So we're going to market buy Bitcoin.

• 21:21John Coogan?

  Yep.

• 21:21Jordi Hays?

  But then we expect you to not value us based on our future cash flows.

• 21:25John Coogan?

  They have so much money, they could turn Bitcoin into a stablecoin. They could just be like, we will be buying and selling.

• 21:30Jordi Hays?

  Yeah.

• 21:30John Coogan?

  To keep, to do, to price control this asset.

• 21:33Jordi Hays?

  Yeah. The other thing too, is just starting to get into the game of buying sports leagues. So we've seen some Gulf states do this, right? With, with the, you know, the, the whole Pete, the whole golf thing. If Apple were to buy, you know, the NFL and the NBA and not, and not focus on, oh, we need to sponsor a team or different athlete, just buy the whole league. And then just say it's the Apple NFL league. Or they could be in the background, kind of cool, casual, say like, we don't need to make this about us.

• 22:04John Coogan?

  They actually should buy F1. They should buy, I mean, I wonder if they could get the rights to Drive to Survive, but they have the F1 movie. And then, and then the F1 experience makes a ton of sense in Vision Pro.

• 22:15Jordi Hays?

  Yeah.

• 22:15John Coogan?

  And so you should be able to go to all the.

• 22:17Jordi Hays?

  And if you think about the Gen Moji campaign, which was roasted.

• 22:19John Coogan?

  Yep.

• 22:20Jordi Hays?

  Every time they ran a Gen Moji billboard, that could have paid for one set of tires, right? And.

• 22:27John Coogan?

  So the tires really like 100K every time?

• 22:29Jordi Hays?

  No, I doubt it.

• 22:30John Coogan?

  But they're, they're expensive.

• 22:31Jordi Hays?

  They probably get them down.

• 22:32John Coogan?

  Everything on that car is expensive.

• 22:33Jordi Hays?

  And then they have the tire sponsorship, which probably covers a lot of it, but.

• 22:37John Coogan?

  Anyway.

• 22:38Jordi Hays?

  You were, you were saying too, they should just acquire Gulfstream.

• 22:42John Coogan?

  Yes, yes, that would be good.

• 22:44Jordi Hays?

  And just give planes away to politicians.

• 22:46John Coogan?

  Oh, they're going to do the Apple plane? No, just, just keep the Gulfstream.

• 22:49Jordi Hays?

  Go for the best.

• 22:50John Coogan?

  But give them out like candy.

• 22:52Jordi Hays?

  To politicians.

• 22:53John Coogan?

  To politicians.

• 22:54Jordi Hays?

  Any, any politician says, hey, you know, we saw Tyler, TBPN's intern, make an iPhone in America. We think you guys should actually, you know, take this seriously. Why don't you take a plane?

• 23:03John Coogan?

  He's making progress.

• 23:04Jordi Hays?

  Making progress. Look at him go.

• 23:07John Coogan?

  He's got two or three down.

• 23:08Jordi Hays?

  Look at him go.

• 23:10Speaker 02

  I've almost got everything deconstructed soon I can start putting it back together.

• 23:13John Coogan?

  There we go.

• 23:14Jordi Hays?

  Amazing, amazing.

• 23:15John Coogan?

  Doing great.

• 23:16Jordi Hays?

  We knew you were gonna crush it, so we tried to make it a little bit harder, force you to deconstruct it first and then put it back together, so.

• 23:24John Coogan?

  Uh, this is hilarious. I mean, Aaron Slodov coming on the show today, actually. Uh, he, he highlights a video that just dropped from Smarter Every Day. Uh, he said, "Four-year experiment to make a product domestically by Smarter Every Day." He concludes, "People who can manufacture things will be even more critical in the coming years." He also deeply believes manufacturing ensures your self-reliance, stability, and ultimately, your freedom. Four years to manufacture. I forget exactly what he manufactured, but like this one, one device. Um, pretty, pretty cool to see a YouTuber take on such an ambition project.

• 23:54Jordi Hays?

  It took him four years to do what Tyler's gonna do in a day.

• 23:57John Coogan?

  With scraps.

• 23:57Jordi Hays?

  With scraps, in a cave.

• 23:59John Coogan?

  Anyway, if you're designing the next great product, get on Figma.com. Think bigger, build faster. Figma helps design and development teams build great products together.

• 24:09Jordi Hays?

  Do it. You actually don't need to be a designer to use Figma. I started using Figma, um, and taught myself design using Figma, just by experimenting. So go check it out.

• 24:20John Coogan?

  Oh, the last Apple announcement, the really wild card. We've seen Microsoft was working with the military on the HoloLens. We now see Meta partnering up with Anduril on, on VR glasses. Uh, how could Apple really pivot hard AR-15?

• 24:38Jordi Hays?

  AR, the Apple R15.

• 24:41John Coogan?

  The Apple Rifle 15, yeah. Just going straight into small arms. It's the one offensive technology. It's, it's, it firmly establishes them like, no, we're not just partnering. We're here for the everyday American, respecting the Second Amendment rights.

• 24:54Jordi Hays?

  An Apple-designed rifle would unfortunately go extremely hard.

• 24:58John Coogan?

  Extremely hard. It would be so good. Just all, all white. Just the, the all-white AR-15.

• 25:06Jordi Hays?

  I need it.

• 25:07John Coogan?

  Yeah. I mean, they could probably build a fantastic one.

• 25:10Jordi Hays?

  Yeah, they could.

• 25:11John Coogan?

  They could. We'd love it. Anyway, um, in other news, uh, Scale AI is raising $10 billion, potentially from Meta. This is, uh, they're in talks, not advanced talks.

• 25:21Jordi Hays?

  Let's give it up for a scoop from Katie Ruft.

• 25:22John Coogan?

  Katie Ruft on the weekend.

• 25:24Jordi Hays?

  A weekend scoop.

• 25:25John Coogan?

  Drop. Meta in talks for Scale AI investment that could top $10 billion.

• 25:31Jordi Hays?

  Another billion dollars for Lucy Guo.

• 25:33John Coogan?

  You'd love to see it. And Alex Wang. Absolute dog, has been in the game for a long time. Lots of ups and downs with the different eras of reinforcement learning and pre-training. And what data do we need to generate? You generate all that data, then you have it. But there is a new era coming with reinforcement learning and Scale AI is positioning themselves to act as a, you know, a key partner in the next wave, which is very exciting. So the financing could exceed $10 billion in value, some of the people said, making it one of the largest private company funding events of all time. The terms of the deal are not finalized and could still change, according to people who asked not to be identified for leaking.

• 26:16John Coogan?

  A representative for Scale did not immediately respond to requests for comments. Meta declined as well. Scale AI, whose customers include Microsoft, OpenAI, provide data labeling services to help companies train machine learning models and has become a key beneficiary of the generative AI boom. The startup was last valued at about $14 billion last year in a funding round that included backing from Meta and Microsoft. I didn't realize that Meta and Microsoft, the hyperscalers, were already getting in, but it makes sense. They're like a key partner in the ecosystem. Earlier this year, Bloomberg reported that Scale was in talks for a tender offer that would value it at 25 billion. And so if the, if the company's grown even more, you could see that, you know, maybe it's 10 on 30 pre, 10 on 40 pre, we're getting into like 20% solution territory.

• 26:59Jordi Hays?

  Scale AI in the public markets right now is probably would, I could see it being a 50 to 100 billion dollar company.

• 27:08John Coogan?

  It's a really, really good story.

• 27:09Jordi Hays?

  People want a pure play AI bet. We saw with Circle last week that in some of these areas that there's a lot of investor enthusiasm if you have a pure play.

• 27:18John Coogan?

  Yeah, I mean, Alex Wang is a fantastic founder. I mean, there is, there is a question about like how indexed, like the question around Scale AI is always like, they, they have to constantly adapt because they're not the foundation model company. They're like a data provider to the foundation models.

• 27:35Jordi Hays?

  Foundation model companies tend to have to adapt pretty quickly.

• 27:39John Coogan?

  They have to adapt too, yeah. So I don't know, but I mean, there's certainly like the revenues and the financials are fantastic because there's a big wave and they are able to go and, and really capture a bunch of that as the, as the training bills come due. This would be Meta's biggest ever external AI investment, a rare move for the company. The social media giant has now, has before now mostly depended on its in-house research plus a more open development strategy to make. Improvements in its AI technology, of course, we've been hearing news that Meta is revamping the team behind Llama, really trying to double down on that project. They're not getting out of the game, but they they might have kind of like aimed for the wrong target with the particular benchmarks that they were going after. And so had struggle wrangling

• 28:24John Coogan?

  the behemoth, getting it out the door. But, you know, Zuck's not giving up, of course. He's going to keep keep working, keep

• 28:31Jordi Hays?

  Continuing to cook.

• 28:34John Coogan?

  And so, big tech peers have already invested heavily. Microsoft put more than 13 billion into OpenAI, while Amazon and Alphabet put billions into rival Anthropic. Everyone's got a bet there. Part of those companies' investments have been through credits to use their computing power. Meta doesn't have a cloud business, and it's unclear what format Meta's investment will take. And it's unclear if scale really needs cloud credits. They more, I mean, their cost structure is human labor, since they oftentimes take tasks and find experts overseas and increasingly experts in America, because a lot of the a lot of the reinforcement learning is now done on like extremely hard math problems. And so you might need to go to PhD programs to recruit

• 29:16Jordi Hays?

  We should offer, you know, like maybe physical intelligence or another lab, the data from Tyler, you know, making this iPhone to to to train on.

• 29:25John Coogan?

  Definitely.

• 29:26Jordi Hays?

  Because I wouldn't want I wouldn't want potential training data to go to waste.

• 29:29John Coogan?

  Yeah, yeah, yeah, a body suit so that he's really able to to track all the mechanics. We need every every every digit on his hand tracked so that we can

• 29:39Jordi Hays?

  This might be the first time an iPhone has been assembled by somebody wearing a tailored suit as well.

• 29:45John Coogan?

  We're breaking all sorts of records here. CEO Mark Zuckerberg has made AI Meta's top priority and said in January that the company would spend as much as $65 billion on related projects this year. Now, a lot of that, a lot of that capex and a lot of that investment is going into things that are not directly foundation model training, of course. They have reality labs and VR efforts, and they also have a ton of recommendation algorithms that are running on on large data centers they're scaling up. But obviously, they're investing tons. The company's push would include an effort to make Llama the industry standard worldwide. Meta's AI chatbot, which is already available on Facebook, Instagram, and WhatsApp, is used by 1 billion people per month. Wow, that's a lot.

• 30:28John Coogan?

  Scale, co-founded in 2016 by CEO Alexander Wang, has been growing quickly. I believe it's a YC company, too. The startup generated revenue of 670 million last year and expects sales to more than double to 2 billion in 2025.

• 30:44Jordi Hays?

  Let's go.

• 30:46John Coogan?

  Scale plays a key role in making AI data available for companies because AI is only as good as the data that goes into it. Scale uses scads of contract workers to tidy up and tag images, text, and other data that can be used for AI training. Like, the original, the original Scale AI business model was labeling and tagging images for self-driving car companies. And then at a certain point, I think the self-driving car companies stopped needing so much labeled data. And, and, and everyone was like, oh, Scale AI is not that useful. Like, we don't need them anymore. And then the LLM boom came and the RLHF boom came. And it was like, oh, wait, we need 10 times more Scale AI stuff. And then the same thing is happening in robotics and the same thing is happening in, in reinforcement

• 31:31John Coogan?

  learning more broadly and, and, and a ton of different, you know, paradigms to move the AI ball down the, down the field. Scale and Meta share an interest in defense tech. Last week, Meta announced a new partnership with defense contractor Anduril Industries to develop products for the US military, including an AI-powered helmet with virtual and augmented reality features. Meta has also granted approval for US government agencies and defense contractors to use its AI models. I love Defense Llama. It's great. The company's already partnered with Scale on a program called Defense Llama, a version of Meta's Llama's, Meta's Llama large language model intended for military use. Scale has increasingly been working with the US government to develop AI for defense purposes.

• 32:14John Coogan?

  Earlier this year, the startup said it wanted to contract with the DOD to work on AI agent technology. The company called the contract a significant milestone in military advancement. So, I mean, Scale is such a big company. They're, they're doing a lot of different stuff at this point. And, and, and they're not just doing the business process outsourcing, the, the data generation, but they're also doing stuff like they create evaluations, they have the humanities last exam, the benchmark for, for AI stuff. And, and then they're also fine-tuning Llama and working with the DOD. And Alex is in, is in DC barely often. Anyway, fantastic report from Bloomberg. Go subscribe. Give them, give them some love.

• 32:54Jordi Hays?

  Give them some love. We have a post from Pliny the Liberator.

• 32:58John Coogan?

  Getting a little spicy with Apple.

• 33:00Jordi Hays?

  He says, "I'm not reading a single AI research paper coming out of that giant stale donut in Cupertino until Siri can do a little bit more than create calendar events on the fourth try." Shots fired. Apple, they, they released a research paper

• 33:17John Coogan?

  Yes.

• 33:18Jordi Hays?

  Last week called "The Illusion of Thinking: Understanding the Strengths and Limitations of Reasoning Models Via the Lens of Problem Complexity." They basically said that reasoning models are fake and just pattern matching machines.

• 33:31John Coogan?

  Yes.

• 33:31Jordi Hays?

  And I gotta defend technology here. I'm a bit of a pattern matching machine myself. I try to see patterns. I try to match them.

• 33:41John Coogan?

  Yeah.

• 33:41Jordi Hays?

  Not unlike a large, you know, reasoning model.

• 33:44John Coogan?

  Yeah, yeah, yeah.

• 33:45Jordi Hays?

  But anyways, I think this is sort of interesting timing. I'll wait to, you know, pass too much judgment until we see what they release today. But in some breaking news, Apple just announced that they're basically mimicking the Mac OS experience on iPad. So you can now have multiple apps open at once, which, which is interesting. So.

• 34:13John Coogan?

  Very fun. What else is new in WWC world? iPadOS. They launched new CarPlay and they demoed it on a Mustang. You'll love to see that.

• 34:21Jordi Hays?

  There we go.

• 34:22John Coogan?

  Very funny choice of car, but we love a Mustang.

• 34:24Jordi Hays?

  There we go. They're connecting with, you know, core America with that one.

• 34:29John Coogan?

  They know. People want gas cars.

• 34:31Jordi Hays?

  Emily Sundberg is on the ground at WWDC and she says, "The tech guy in a hoodie stereotype is dead." She's seeing

• 34:39John Coogan?

  You're welcome.

• 34:41Jordi Hays?

  Marine searay sneakers. I'm actually not familiar. Japanese chore coats and a bunch of other items. Tech has pulled the world down to their dress code. And now we've all met in the middle.

• 34:54John Coogan?

  Yeah.

• 34:55Jordi Hays?

  So Emily will be on the show later this week.

• 34:57John Coogan?

  Yeah, the AI research paper that they put out is kind of interesting. There's this, there's this constant drumbeat of like moving the goalposts when, when it's like, okay, so, you know, now these models can reason and produce like really, really thorough research reports and they can definitely follow these patterns and that's super valuable. But then people will move the goalposts and say, well, well, that doesn't count as thinking. Like, yes, we, yes, we passed the Turing test, but it's not, it's not really thinking. It's not really human. And, and I understand that. And I think that there's something right about that, but also like it, it all doesn't, it doesn't really matter because at the end of the day, all that matters is like economic impact and like how valuable are these things and how useful are they?

• 35:36Jordi Hays?

  Revenue as a benchmark.

• 35:38John Coogan?

  I, I, I think that's the only benchmark that matters. And then, and then on the flip side, there's this, I think.

• 35:44Jordi Hays?

  The only, the only counter to that would be that a lot of useful AI features will be baked into iOS in the long run and won't have be directly.

• 35:52John Coogan?

  Sure, sure, sure, sure, sure. So maybe you need to look at like user time or something.

• 35:56Jordi Hays?

  Yeah.

• 35:56John Coogan?

  And delay, there, there's a whole bunch of ways, but like, like the fact of the matter is like, like, does, like, is AI really thinking? Does it matter? Who cares really? Like, do we need, do we need to discuss this? There's also this funny pattern. I believe it was like either Naval or Willmanitis or someone posted how like when, when the steam engine was invented, there were all these papers saying like, oh, the steam engine is just like the human brain. And then when like electricity was invented, it was like, oh, like the network of lights in a city is just like the human brain. Like now we understand the brain. And, and so there's this constant march of like, we, we created a technology and then we're like, oh, this is, this is a perfect representation of, of, of how humans work. And maybe we keep missing things. But the question is like, we're clearly knocking down different patterns, like even

• 36:40John Coogan?

  just long-term memory, like that has been solved by hard drives for a long time. We've been able to have databases and store lots of data and look up facts on the internet. Like that was something that was uniquely human. We solved it. It's great. It's not human, but it's great and helpful. And now we can, and now we can do, you know, next token generation and prediction and predict the next word in a sentence, which is very helpful. And clearly there's something in the human's mind that does that activity, but. Is it everything a human does?

• 37:08Jordi Hays?

  Based on training data.

• 37:10John Coogan?

  Yeah, based on training data. And then, and then reasoning is the same thing, like following a playbook, working through a problem, planning, like that's clearly part of the human brain, but it's not the entire thing. Uh, but it's still really useful and so it's all good.

• 37:22Jordi Hays?

  More breaking news, Apple now adding your passport to the wallet app that will be accepted at TSA for domestic flights.

• 37:30John Coogan?

  Okay.

• 37:31Jordi Hays?

  Which is, I guess valuable.

• 37:34John Coogan?

  Yeah, yeah.

• 37:35Jordi Hays?

  They just Sherlocked real ID.

• 37:39John Coogan?

  The government.

• 37:39Jordi Hays?

  This is, this is a post of Katie Noto.

• 37:43John Coogan?

  Oh, Noto Polos.

• 37:44Jordi Hays?

  From Noto Polos from Business Insider.

• 37:46John Coogan?

  Yeah.

• 37:48Jordi Hays?

  Yeah.

• 37:48John Coogan?

  Yeah, it's funny, I got the, uh, I got the passport ID, the passport card. So you have the, the paper passport, which people know for flying internationally. And then you have the real ID, the driver's license and the, and the passport card is something that you can order. And it lets you travel between US, Canada, or US, Mexico, um, without bringing the full passport. And I was super excited. I was like, oh, this is great. If I'm going to Canada, I'll just bring this thing. One day I was going to Canada and.

• 38:14Jordi Hays?

  Why were you going to Canada?

• 38:15John Coogan?

  I have no idea. I have no idea. Uh, but anyway, I was, I was going, I was going to Canada and I was like, let me bring this passport card. This is great. As I show up, it says only valid for, uh, for road and rail crossings. You can't fly with it. Because it's basically, it's a product for like truck drivers that are driving back and forth all day long. And they don't want to bring a separate passport. They just want to throw an ID in their, in their, uh, in their, in their wallets, in their Ridge wallets. And so, uh.

• 38:43Jordi Hays?

  Next to their ramp.

• 38:44John Coogan?

  Yeah, next to their ramp cards. And so, uh, uh, and so I was, I was very disappointed with that product, but hopefully this is better. But I imagine that people will get over their skis and be like, oh, I have my passport in my phone. Then they'll eventually try and fly, fly internationally and they'll get caught and then have to send.

• 38:59Jordi Hays?

  Yeah.

• 39:00John Coogan?

  An Uber. I actually wound up sending an Uber to my house, getting on the phone with the guy and saying like, just break into my house and get my passport and bring it to me at the airport and it worked.

• 39:10Jordi Hays?

  That's great.

• 39:11John Coogan?

  High trust environment.

• 39:12Jordi Hays?

  You could have just sent him to some random house.

• 39:14John Coogan?

  Yeah, yeah, yeah.

• 39:16Jordi Hays?

  Somebody, somebody, somebody bad is gonna hear that and be like.

• 39:19John Coogan?

  There's gonna be a giant Newfoundland dog there. He's friendly. Give him a pat. And then, and then.

• 39:25Jordi Hays?

  Here's the code word.

• 39:26John Coogan?

  Here's the code word. Tell him, tell him, good, good boy.

• 39:29Jordi Hays?

  Make this sound.

• 39:31John Coogan?

  Yeah.

• 39:31Jordi Hays?

  And he'll let you pass.

• 39:33John Coogan?

  I really have like a massive dog, but I still do. Anyway, Vanta automate automate compliance, manage risk, improve trust continuously. Vanta's trust management platform takes the manual work out of your security and compliance process and replaces it with continuous automation, whether you're pursuing your first framework or managing a complex program.

• 39:52Jordi Hays?

  Get on there. Do it.

• 39:53John Coogan?

  Get on there.

• 39:54Jordi Hays?

  Do it right now.

• 39:54John Coogan?

  Data drop from Andrewson Horowitz. Olivia Moore has the data. Our team at A6CC published benchmarks on revenue growth for AI startups from their proprietary data set. The median B to B AI company is going from zero to $2.1 million in ARR in year one, while the median B to C company is going from zero to 4.2 million ARR in year one. Yes, consumer companies are growing revenue faster. It's pretty remarkable. Even the bottom quartile is doing pretty well. Everyone's making money now. It's just so much different than the dot com boom. Like they're, you know, obviously.

• 40:30Jordi Hays?

  Wasn't it?

• 40:31John Coogan?

  Tons of froth and tests, but still, these are serious numbers, you know? If you, if you start a company within 12 months, you have a couple million bucks in revenue. And it's like, the costs are going to be mostly overhead and employees. Like you're in a pretty good spot.

• 40:44Jordi Hays?

  Has there been a period where B to B categorically was growing much faster than consumer? Cause I feel like with consumer.

• 40:53Jordi Hays?

  Sure, with B to B, you have these, you know, big contracts.

• 40:56John Coogan?

  Yeah.

• 40:57Jordi Hays?

  Which can help grow revenue quickly, but there's also so much friction to get on boarded, whereas consumers can just say, yes, I will take this product for a hundred dollars. And you can do that thousands of times a day.

• 41:08John Coogan?

  Yeah.

• 41:09Jordi Hays?

  And so I feel like that part isn't necessarily new, but, but still really impressive.

• 41:17John Coogan?

  Yeah. I mean, increasingly there are so many ways to, to get to a paid upgrade. There are more, it's not just that Stripe exists and that in-app payments exist. And there's so many ways to make payments, taking payment frictionless on the internet, which was not the case in 1999. But also just psychologically, people, I think because of chat GPT being paid, X has a paid tier, people pay for Patreons, people pay for all sorts of stuff, subscriptions for games, all sorts of different things are subscriptions now.

• 41:47Jordi Hays?

  Well, part of it is that AI.

• 41:49John Coogan?

  Psychologically.

• 41:50Jordi Hays?

  Even existing gen AI. Experiences, even though they're new, are so, are oftentimes so magical that people are totally happy to pay.

• 41:59John Coogan?

  Totally.

• 41:59Jordi Hays?

  Because the value is, you know, the Studio Ghibli app, if they were just monetizing that.

• 42:04John Coogan?

  Oh, yeah.

• 42:05Jordi Hays?

  And they had it, basically, people would have paid a hundred dollars

• 42:08John Coogan?

  Yeah.

• 42:09Jordi Hays?

  a month for that.

• 42:10John Coogan?

  Yeah.

• 42:10Jordi Hays?

  They would have turned immediately.

• 42:11John Coogan?

  I'm pretty sure Facetune is doing like a billion dollars in revenue. Or like FaceApp, like one of those like face swapping like iOS apps. Because they just get you in, give you a free one, they know exactly how to monetize, ask you at the right time. You subscribe, yeah, it's a 14 day free trial and then it rolls over and you get charged $99 for the entire year.

• 42:27Jordi Hays?

  Yeah.

• 42:27John Coogan?

  Like, they're very good at this stuff. It's very Nikita Beer coded.

• 42:30Jordi Hays?

  Yeah.

• 42:31John Coogan?

  Anyway, we have Casey Handmer coming in the studio in the TBP in Ultra Dome in just a minute. I want to read some of his posts first. He says, 1640 days until China takes the moon. China wants the moon so bad, they can taste it, they obsess over it all day. They dream about it all night. They fear the consequences of failure viscerally. It's affecting their appetite. They work 80, 90, 100 hours a week. The job isn't done until it's done. Casey says, "The last page of our passport is a solemn promise that the USA will guarantee freedom as we lead humanity into an infinite and eternal universe. In some desperate corners of the earth, totalitarian dictatorship still stomp on the potential of a billion hearts, but the future belongs to freedom."

• 43:14John Coogan?

  So, excited to bring him in and talk to him about that and also about solar energy and manufacturing in America and what's going on with Apple. So, welcome to the studio, Casey. How you doing?

• 43:28Casey Handmer?

  I'm very well, thanks. Thanks for having me.

• 43:31Jordi Hays?

  Great to have you.

• 43:32John Coogan?

  As always, what triggered this initial tweet about 1640 days until China takes the moon? I imagine that that's based on a specific mission that they have planned, but break that down because they've done stuff before, they've landed on the moon before with autonomous stuff. Like, why is this different? Why is this date so important?

• 43:52Casey Handmer?

  Yeah, China set a target of being on the moon officially by 2030 with people, Chinese taekwons, obviously. And they have a space program already, they have a space station, they've had several space stations, they have the ability to fly humans into space and to recover them. And actually, the last news we got about a month ago was that they're looking into ways to accelerate that schedule into 2029. So I picked a date in late 2029, and I thought, that's 1,640 days away, it's about, it's about three and a half years or something from now. It's not that long. And one thing I can tell you for sure is that the Chinese space program managers fear the consequences of failure in a way that US space program managers have not felt or feared for many a decade.

• 44:34John Coogan?

  What is, are we, should we comping their efforts to NASA or SpaceX or both or some mix? What is the Chinese, what's the shape of the Chinese space program right now?

• 44:47Casey Handmer?

  Well, I mean, I don't, I'm not an expert on the Chinese space program by any means, but it's obvious from, from the way they work that they're dead serious about it. They are in second place behind SpaceX when it comes to launching stuff into space and they haven't got reusability done yet. So they're, they're producing significantly more cores. And then, of course, when they're done with them, they drop them on villagers because they run things differently. Now, you know, I think that on this show, people will understand what I mean when I say the light cone wants to be free. The light cone is a place where humanity needs to, needs to expand and experience freedom. And the reality is that laws of physics don't guarantee that freedom will succeed. It helps us, freedom helps us perhaps, but the challenge we face, I think, is that NASA is the organization whose job it is to make sure that, that we don't get a 1958 Sputnik

• 45:32Casey Handmer?

  like surprise ever again. And, and there are many, many smart people at NASA working hard on this, but their efforts are, you know, somewhat circumscribed and challenged by kind of decades of accumulated craft and, and problems that are kind of causing major, major, major problems within the, within the organization and for the US space program as a whole. And I think SpaceX has done a really incredible job of upholding US interest in space. If it wasn't for SpaceX, we'd obviously be in a deep, dark hole by now. But it's a, it's a lot to rest on the shoulders of just one company. And I think this has been reinforced in the United States just last few days with, you know, people realizing that actually, you know, the second place in US-based space company or whatever is an awful long way behind SpaceX. It's not for a lack of trying, and SpaceX is probably the number one place on earth for training rocket engineers and, and nothing forces them to stay there.

• 46:17Casey Handmer?

  Many of them leave and start their own companies and good for them, but they're still a long way behind.

• 46:20John Coogan?

  Yeah, what uh, why is the moon so important in your opinion? There's arguments about security and defense and putting weapons on the moon. There's also resources like what, what are the top reasons why we should be going to the moon? I kind of just want to go because it seems fun.

• 46:36Casey Handmer?

  Yeah.

• 46:38John Coogan?

  My son seems excited about it. I want to go with him one day.

• 46:40Jordi Hays?

  And we need to figure out if it's made of cheese or not.

• 46:43John Coogan?

  We do, we do.

• 46:44Casey Handmer?

  Yeah, well, I mean, I don't think it's really a secret that, that the moon is the second nicest place out of the earth and the moon. It's a little bit like Antarctica or something. It's not, it's not a place that's got resources we really need. What it, what it represents is a symbol, symbol of freedom. It's a place that Neil Armstrong and Buzz Aldrin first, first tried on back in 1969 and, and you know, we came in peace for all mankind. You know, and I think that you and I and NASA and much of the Western world sees the moon the same way and, and the Artemis Accords and there's the Outer Space Treaty and so on. I don't think that the generals in Beijing see the moon quite the same way. You know, and I might not be quite as hawkish as, as some of your other guests here.

• 47:22Casey Handmer?

  But it does not help me sleep well at night thinking that if the Chinese have a, have a durable and defendable presence on the moon with humans running around there and the United States does not. At some point they could say, well, you know, this outer space treaty is a nice idea, but no one who is alive had anything to do with writing it. And at the end of the day, we have nuclear weapons and this is ours. And then what do you say, right? Like then they basically planted the flag and said, no, the, the future of the light cone is going to be communism with Chinese characteristics forever. And that's, that's not a situation, not a future I want. It's not a future, uh, you know, it's not a future or a situation that my children can, can live up to or participate in. It's not a future that's open to them. They can, they can, you know, hug their stuffy, you know, rocket to, to sleep every night, dreaming of a future where they get to explore the universe.

• 48:05Casey Handmer?

  But it's just not one that, that will be protected despite the fact that, that we spend in the United States $20 billion a year on NASA and, and a whole bunch more on other space programs that are less publicized, which is, you know, just NASA's budget is twice the Manhattan Project's budget in, in inflation adjusted dollars. It's not, it's not a small amount of money. And yet. Where's my moon base?

• 48:24Jordi Hays?

  Yeah, where's our moon base? I hope the Chinese are taking the proper steps to get Solana's permission to go to the moon. They gotta go through Mike Solana for sure. They gotta go through Mike Solana. What do you hope to see from the next NASA administrator now that Isaac Mann is out? Which obviously a lot of people in our corner of the internet were very disappointed by. But I'm curious where, what you would like to see from them.

• 48:55Casey Handmer?

  Yeah, so obviously NASA administrator serves at the pleasure of the president. And that's his prerogative to decide who wants to serve there. NASA administrator is a super tough job, might be the toughest job in government. Because you have to balance this impossible set of requirements. And now we've got this budget process that's going on. And there's no NASA administrator in the chair to be part of that conversation. To be advocating on behalf of which things are perhaps technically sensible or less sensible for reasons that congresspeople cannot be expected to understand or even take an interest in. It's very, very esoteric and strange stuff. And so you end up in a situation where in three months or six months or 18 months, a new NASA administrator will be sitting in the chair with a budget they didn't have anything to do with, a bunch of programs that were designed by people for reasons that are long past their expiry date and have to make the best of what they can do.

• 49:39Casey Handmer?

  And in the meantime, it is 1,639 days until China takes the moon. And this is a major, major challenge. I think it's ultimately reflected extremely poorly on the Biden administration that they put Senator Administrator Bill Nelson in there. And he was unable to help NASA respond to the existential challenges that face it. His intentions, no doubt, were fine, but his actions and the results of his work were mixed at the best. And I don't think that Trump or anyone who supports him would want a situation like that for NASA looking ahead in four years. And if China's on the moon in 2029, that'll be in the same year that Trump leaves the White House. So that's, it's a very daunting challenge. This is really a little bit like Sputnik Over Again, that we have a situation that

• 50:23Casey Handmer?

  really challenges to our core. And of course Jared, Jared's a unique individual. He really, he did, he was not under any, you know. Confusion there. He knew that going into NASA was a horrible job. Like, his, literally, his job is there is to upset a lot of people. Uh, and, and get a bunch of programs that are in deep, deep trouble turned around quickly. Uh, and it's going to involve, you know, a lot of people losing their jobs or getting new jobs, being moved or relocated, all kinds of stuff, just nasty stuff. And the, the bureaucracy that's entrenched there does not like to change. And I know people who have worked there. I know people who have tried to change things and have been rewarded for their efforts with constant harassment and even, you know, uh, legal and extra legal kind of problems and so on in their lives, you know, and constant investigations and, and all kinds of stuff, right?

• 51:07Casey Handmer?

  Uh, it's just, it's an absolute hornet's nest in many ways. And Jared knew that, and he stepped up because he recognized the United States had given him everything and he wanted to give back. Um, now, you know, I don't want to prejudice whoever else steps up. I mean, ultimately someone's going to have to take the job and I wish them the best and I'll help them in any way I can. But it is a tough, tough job and, uh, and I think that frankly, the number of people out there who have the skills to do something useful, uh, with NASA and really turn it around and fix the problems that we've got here and the inclination to actually to try and to, to, to basically blow up their entire life for the rest of their life because that's what's going to result no matter how well you succeed. Is a very, very small number. Uh, it's a real challenge. Um, we have to wonder, why is it that in a country of 340 million people? We only really have a handful that could plausibly go in there and, and, and solve these problems right now. And if we don't, China will take our future.

• 51:52John Coogan?

  Yeah. Uh, talk to me about power generation on the moon and kind of like the build out if we actually wind up getting there and, and, and and building like the launch capabilities to get up and back. What does the industrialization process of the moon looks like, look like? I know we're going to have to figure out a lot on the, on the fly, but, uh,

• 52:10Jordi Hays?

  Yeah, I, I looked at a company that, that there, uh, it was probably a year and a half ago. Their pitch was, uh, we're going to build Chevron on the moon.

• 52:18John Coogan?

  Okay.

• 52:18Jordi Hays?

  Uh, super, super bright team that had actually run some pretty meaningful experiments. I couldn't quite get there from an investment standpoint because it was like,

• 52:27John Coogan?

  Yeah.

• 52:28Jordi Hays?

  There's so many things that need to happen, right? But I really hope they're, you know, successful. But yeah, break, break it down for us.

• 52:35Casey Handmer?

  Well, I think step one is is just establish the ability to move stuff to and from the moon. And once we have that, then we have the operational freedom to build a base of any size we want there. And that's a that's a question for future voters and future presidents, I think. But ultimately, I'd be quite happy to see something there that's a bit like the Antarctic program. It could even be run by the NSF, right? NASA could be responsible for for setting it up and developing the infrastructure and NSF could run it like the Antarctic program. We send scientists up there because they'll go there voluntarily. You know, it's ultimately there for strategic reasons. And you could have a hundred people or a thousand people and and you could fly, you know, triconauts for like a fly like cosmonauts, fly fly Indian astronauts, fly astronauts from Japan and the EU and Australia and everyone else. And they get to go up there and they work in US moon base run by funded by the United States, built by, you know, American sweat and American brilliance.

• 53:17John Coogan?

  Much like the ISS, right?

• 53:20Casey Handmer?

  A little bit like the ISS, but maybe with a little bit more kind of down to earth in a way, like actually dealing with rocks and and doing real science and stuff like that.

• 53:26John Coogan?

  Yeah.

• 53:26Casey Handmer?

  In terms of energy on the moon, there is one one way of getting energy on the moon that won't cost $10 billion to develop. And that's to set up large scale microwave beaming plants on the surface of the earth and beam the power up there.

• 53:37John Coogan?

  Oh, really?

• 53:38Casey Handmer?

  Yeah, the moon, the moon always faces the same face towards the earth. So so once you got your your rectangular panel up there set up, it will always receive the power, provided the power is continuously sent from earth. And of course, you could try and set up to kind of some kind of nuclear power station or something. But nuclear power plants are extremely expensive to build even on the earth, let alone on the moon. So I think if you just want to get power there quickly, the best way to do it is just to beam it up.

• 53:57John Coogan?

  What about just throwing out a ton of solar panels? That feels like that was what I was teeing you up for.

• 54:01Casey Handmer?

  Yeah, yeah, that's what I was teed up for. Solar panels are great on the earth because, you know, where people live, you never have a night that's longer than about 16 hours.

• 54:07John Coogan?

  Sure.

• 54:09Casey Handmer?

  And for the vast majority of the world's population. But on the moon, even in the in the parts of the South Pole, which are, you know, ostensibly peaks of eternal light, you can still have, you know, pitch darkness for five or six days at a time.

• 54:19John Coogan?

  Wow.

• 54:20Casey Handmer?

  In winter, which is basically means like if you're flying your entire power system up from the earth, which ultimately you would have to, like 99.9% of it by mass has to be batteries. And that's that's an interesting question. Might be better off just flying up a starship with a bunch of spare fuel and a and a gas turbine generator.

• 54:35John Coogan?

  What about what about a solar panel on one side of the moon, solar panel on the direct opposite side of the moon, really long extension cord?

• 54:42Casey Handmer?

  Very long extension cord.

• 54:43John Coogan?

  Very.

• 54:43Casey Handmer?

  I don't want to bore your readers with discussion of passions law, but

• 54:47John Coogan?

  Okay.

• 54:48Casey Handmer?

  When you run the numbers, it's no cheaper.

• 54:52John Coogan?

  Oh, that's so good. Okay, so yeah, give me the broad Terraform update. How are things going? And how many solar panels do you have? Where are we in the rollout of solar power dominance across America?

• 55:06Casey Handmer?

  Well, that's two separate questions. So Terraform, we're going great. We're integrating our first Mark One system over the summer right now. It's a machine that's designed to produce limitless quantities of carbon neutral, cheap synthetic natural gas from sunlight and air. You can literally roll out a solar panel in anyone's backyard and hey presto, you're on top of an oil well. It's a very neat trick. Really privileged to get to run this with my friends here and with the confidence of our investors. In terms of solar more generally, look, the outcome is not in doubt. I think Jesse Pelton's been doing a great job on X recently.

• 55:36John Coogan?

  I've seen him, yeah.

• 55:37Casey Handmer?

  Talking about solar. Look, at the end of the day, and this is actually another thing where I really hope that Trump and his team come in and help solve a problem that was kind of almost caused accidentally and hasn't been fixed since, which is that just by default deploying solar arrays is unnecessarily complicated and expensive in the United States. And really, if we are in a geopolitical kind of struggle right now to see who gets the cheapest energy fastest, and China is far ahead of us, and they're able to produce finished parts for less than the cost of raw materials in the United States, it helps that we're much richer than they are in China. But at the same time, the technology is the same. The sun shines the same, actually shines better here.

• 56:11John Coogan?

  Why is it so difficult to roll out solar panels? It feels much easier than, oh, I don't want a nuclear power plant in my backyard, the windmills, it's going to chop up the birds. There's like so many obvious problems with the other options.

• 56:24Casey Handmer?

  Some environmentalists get upset about it, understandably. You know, like at the end of the day, having the power to say no is addictive for it. Say no, not in my backyard, even if it's just a solar panel that's making your power cheaper. But actually, the best land for solar in the United States is so hot that no one wanted to live there. The United States government couldn't give it away.

• 56:41John Coogan?

  You're talking about like Death Valley, basically.

• 56:43Casey Handmer?

  I'm talking about like ninety percent of Nevada is still federal land.

• 56:45John Coogan?

  Sure, sure.

• 56:46Casey Handmer?

  And so if you want to do, if you want to do work there, you have to kind of do it according to the Fed's rules, which includes NIPA, which includes like, you have to do like four-year environmental impact statements that run to tens of thousands of pages to prove that like putting a solar panel out on a bunch of economically like worthless and biologically lifeless dirt won't harm the environment. At the same time as we're subsidizing like fifty million acres of incredibly intense bioethanol corn production, it doesn't really make a whole lot of sense.

• 57:10John Coogan?

  No.

• 57:11Casey Handmer?

  Uh, so I'm not asking for that to go away. What I'm asking is like, can we get a categorical exemption for solar deployment with, you know, maybe some, like you can put, put some money in an escrow account to like take it down in thirty years if you decide you want to go back to being like empty desert. And that would help a lot because then you wouldn't have to spend, you know, like it's, this is the insane thing. It costs about, uh, just, just the modules itself, the fancy part that turns sunlight into power.

• 57:33John Coogan?

  Yeah.

• 57:34Casey Handmer?

  Costs about fifteen cents a watt and the cost of installing it in the United States is about a dollar a watt. So it's seven times the price of the unobtanium to import from China or whatever, uh, to install it, which is insane, right?

• 57:43John Coogan?

  Like, okay.

• 57:44Casey Handmer?

  Yeah. Talking about the same economics to a corn farmer or something, it'd be like you are spending how many hundreds of thousands of dollars per acre to install something? Like, how much does it cost to, to sow corn? Like, yeah, like twenty bucks an acre? Like, almost nothing.

• 57:55John Coogan?

  That's wild. Talk to me about the supply chain. Uh, we hear a lot about, uh, the vast majority of solar panels being made in China. Is that a risk? Has it become a political football like everything else, like the electric vehicle batteries, et cetera?

• 58:07Casey Handmer?

  Yeah.

• 58:08John Coogan?

  Companies, A- Apple, Tesla, they've kind of figured it out mostly, gotten around a lot of the tariffs. But, uh, what are you seeing in terms of the long-term supply chain, uh, dynamics in solar?

• 58:19Casey Handmer?

  Yeah, I mean, uh, I think at the end of the day, there'll be countries that make their own solar and countries that don't, which won't really be countries, right? If you have, uh, energy sovereignty, you have sovereignty and if you don't, you don't. Um, and I think it's very encouraging to see both under, uh, you know, even before the Biden administration, there was, uh, strong movements under the Trump one to tariff Chinese solar panels and start the scale up of solar manufacturing in the United States. And we're seeing like more than a terawatt coming online in the coming years. That's great. At the same time, China is producing solar panels cheaper than anyone has ever even thought possible, uh, and they're trying to dump them on our markets. Uh, and my response to that is someone is, if someone is predatorially dumping stuff on you, you should buy as much as you can because. We can outbid the Chinese solar producers.

• 58:56John Coogan?

  Yeah.

• 58:56Casey Handmer?

  And we can just stack the solar panels up in a giant warehouse in Nevada. And until we get around to deploying them. But if your enemy is literally trying to give you a machine that prints out money, which is what a solar module is, you should just buy as many of them as you can.

• 59:07John Coogan?

  Oh, I agree.

• 59:08Casey Handmer?

  And and deploy them. And and sure, you can you can prop up the US solar industry however you want. It's it's good to have solar from all the world's factories coming here in the United States to make energy as cheap as possible here. So we can make as many things as possible. Here, so we can we can do all the, you know, aluminum steels producing on shore. We can make as much fresh water as possible we want. We can terraform Nevada, right? The parts that we don't put under solar panels, we can turn into something like Switzerland if we want to. All this is extremely achievable with cheap solar power.

• 59:32Jordi Hays?

  I like the sound of that.

• 59:33John Coogan?

  Yeah. Uh, can you talk a little bit more about what it actually takes to produce a solar panel in America? It doesn't it doesn't seem as complicated as building an iPhone potentially, but maybe it is.

• 59:44Casey Handmer?

  No, no, it's much simpler.

• 59:45Jordi Hays?

  I don't think iPhones are are even that complicated. We have our intern here. I don't know if you can see.

• 59:50John Coogan?

  In America.

• 59:50Jordi Hays?

  He's making the first USA made iPhone this morning.

• 59:55John Coogan?

  Cut to Tyler. How's it going, Tyler? Give us the update.

• 1:00:01Speaker 02

  Got the front on. I've got the home button on. I'm feeling really good right now.

• 1:00:04John Coogan?

  Feeling really good. Okay, we're making progress.

• 1:00:07Casey Handmer?

  Typically, once you've, once you're done with that assembly, TPP and intern, you need to go back to starting with rocks. And then make the iPhone from rocks. I've got rocks in my backyard, so I'll give you some rocks. I'll mail them to you. And then you turn it into an iPhone.

• 1:00:19Jordi Hays?

  That's the next, that's level two. It's the next level two.

• 1:00:21Casey Handmer?

  Yeah. So solar modules start, you start with a solar cell and then you laminate it between some glass with a aluminum extrusion around the outside. I mean, that's easy, but we have factories that do that, you know, practically every state in this country right now. If anything's the hard part, it's it's actually making the metallurgical grade silicon. It's kind of an energy intensive refining process that you can make the the cells themselves out of. But even that is like, it's a well understood process. People have been doing it for years and years and years. The real challenge is like, it's like the same thing I wrote in that tweet about like China goes to sleep dreaming about the moon and they wake up angry about the fact they're not on the moon. And like, it's pretty clear that the NASA managers who are running the moon program are not obsessing over it in quite the same way. Because if they were, we would have a moon base by now.

• 1:00:59Casey Handmer?

  And it's the same problem here that like. The United States domestic solar industry is not yet at the point where like they can taste eight cents a watt solar modules and they're desperate to produce them, right? There's not that competition in China. There's 20 or 30 different companies like ironically capitalism is working in China to produce the cheapest solar panels ever. And we could, there's no reason we can't do that in the States, right? We're world experts automation. We're world experts at capital formation. We're world experts at building factories. Look what Tesla is doing. Tesla is out producing.

• 1:01:25John Coogan?

  Starlink, the Starlink factory feels like very adjacent. Yeah. The Starlink.

• 1:01:31Jordi Hays?

  Yeah, the white pill is that there's.

• 1:01:32Casey Handmer?

  Terminal is way more complicated than a solar.

• 1:01:34John Coogan?

  It has to be, right?

• 1:01:34Casey Handmer?

  Completely automated.

• 1:01:35John Coogan?

  Yeah, it has to be.

• 1:01:36Jordi Hays?

  Yeah, the, the white pill for American manufacturing is that thousands of people are learning how Tesla does it, how Starlink does it, et cetera. And will eventually go and decide, hey, maybe I should start a factory to make this thing.

• 1:01:50John Coogan?

  Yeah. Anyway, thank you so much for joining.

• 1:01:51Casey Handmer?

  That's it on the fence.

• 1:01:52John Coogan?

  Yeah.

• 1:01:53Casey Handmer?

  That's it on the fence.

• 1:01:53John Coogan?

  This is fantastic.

• 1:01:54Casey Handmer?

  Build a factory.

• 1:01:54John Coogan?

  Build a factory. You heard it here first.

• 1:01:56Jordi Hays?

  Do it.

• 1:01:57John Coogan?

  Thank you so much for joining. We will talk to you soon, Casey.

• 1:01:59Jordi Hays?

  Great to see you, Casey. Have a good one.

• 1:02:00John Coogan?

  Uh, and the white pill on sales tax automation, of course, it's numeralhq.com. Spend less than five minutes per month.

• 1:02:06Jordi Hays?

  Major white pill.

• 1:02:06John Coogan?

  Tax compliance, uh, benchmark series A. Uh, anyway, next up we have, uh, Patrick McGee, the author of Apple in China, a, uh, groundbreaking book on Apple's supply chain. Very excited to have him in the studio. Welcome to the show, Patrick. How are you doing?

• 1:02:21Speaker 05

  I'm doing great, but I haven't watched WWDC, so I hope you don't have any questions about that.

• 1:02:25John Coogan?

  No questions about that.

• 1:02:27Jordi Hays?

  Uh, the, the, the timeline is not loving it. I have a post here. Why does Apple have a whole conference just to show everyone they slightly adjusted the colors on a few icons? So, um, that is, um, a little bit dramatic, but.

• 1:02:40John Coogan?

  But in other news, we have our intern here in the studio assembling an iPhone from scratch. Uh, not really from scratch, but I, I don't know if you can see, but he's, he's getting it together. He's assembling the first iPhone in America. And so I think that's, that's more of our focus today.

• 1:02:57Speaker 05

  Oh God, I said iPhone manufacturing would never happen in America. I think.

• 1:03:00John Coogan?

  We proved you wrong.

• 1:03:01Jordi Hays?

  This is the first American made device. American made iPhone.

• 1:03:05John Coogan?

  You're witnessing history.

• 1:03:07Jordi Hays?

  He's starting, it's a four S, so we didn't, we couldn't go all the way to.

• 1:03:11Speaker 05

  You know, whatever the 16 or the 17, whatever we're on now.

• 1:03:14John Coogan?

  Yeah.

• 1:03:14Speaker 05

  But we had to start somewhere, so.

• 1:03:16John Coogan?

  But, uh, but anyway, thank you so much for joining. Would you mind introducing yourself in the book and kind of like what led you to want to dig into this so much? Because I know you, you interviewed like hundreds of people for this. It was obviously a massive project. Take me through the, the journey to actually start investigating this story.

• 1:03:34Speaker 05

  So yeah, Steve Jobs would sometimes say you can't understand your life until you connect the dots backwards. Right. It'd be a real trick if we could know where the meaning was going forwards. That would improve things. So I've spent 12 years at the Financial Times and it was basically like three years in Hong Kong, where I was getting to know China. Three years in Germany, where I was covering the automotive industry, but in retrospect, really understanding supply chains and manufacturing, industrial policy to some degree, and then four years covering Apple. So you sort of put those three things together and you really get my book. The first three years of covering Apple, I did what most Apple reporters do, which is that I, I didn't focus at all on how the sausage gets made, as it were. I focused on product features. I focused on the rise of digital advertising and Apple's privacy policies. And I think I had some decent stories, but it didn't really occur to me to look at what we all know,

• 1:04:19Speaker 05

  which is that the products are made in China. And the real like discovery that I made, if you will, is that we had never covered a, a job within Apple called manufacturing design engineer. And these are the people who go to over to China, literally by the plane load, to train, audit, supervisor, and mount billions of dollars worth of machinery in the aggregate in hundreds of factories across China. So I wasn't really familiar with like what makes Apple most unique in hardware, which is that they don't sit around hoping that component makers in their supply chain come up with more durable materials, cheaper materials, lighter materials, et cetera. They go and they train all of the people to come up with those innovations. So it's, it's a co-invention process really. But the amount of people they have trained and the amount of money they've invested in China

• 1:05:03Speaker 05

  to make all that happen was staggering to such a degree that I compare it in a way that sounds unhinged, if you haven't sort of read the 200 preceding pages in the book, to the Marshall Plan.

• 1:05:12John Coogan?

  Yeah. Can you, can you give us more on the exact scale of the investment? And how you actually pulled those numbers? Are they available in SEC reports? Or did you have to do some digging to actually piece everything together to actually get the full scope of the scale of what's happening?

• 1:05:28Speaker 05

  Yeah, so the line I have on this is that when Tim Cook goes to Zhongnanhai, the citadel of communist power, and invests, or rather pledges to invest $275 billion into Chinese factories over the next five years. If he were to hold a press release, a press conference, I should say, from Zhongnanhai, that would have been corporate suicide. This was when Donald Trump was campaigning on America First platform. And so

• 1:05:52Jordi Hays?

  So was that 2016?

• 1:05:54Speaker 05

  May 2016.

• 1:05:55Jordi Hays?

  Yeah.

• 1:05:55Speaker 05

  And so basically what happens is that when Xi Jinping comes into power, particularly when he becomes president in March 2013, Apple fears that its products are going to be blacklisted because there is a three-week digital blitzkrieg against the company where all sorts of state-sponsored media are threatening the company and even regulators are saying, threatening things to Apple. And Apple basically doesn't understand. They're in a state of confusion. There's not a single senior person living in the country, and there never has been at the time. And Apple responds by basically hiring or naming a team of people that call themselves the Gang of Eight. And they are to be Cupertino's eyes and ears on the ground. Essentially, they are tasked with coming up with a way to placate local and federal officials in China without resorting to joint ventures because that is anathema to Cupertino.

• 1:06:38Speaker 05

  A joint venture is like if the three of us wanted to go make a company in China, 50% of it traditionally needs to be Chinese-owned. That's supposed to be illegal after 2001 when China enters the World Trade Organization, but it really just evolves rather than is prohibited. And so Apple has been operating under the radar to such a degree that even though by 2012, they are the largest producer in China without actually, you know, producing anything themselves. You could sort of compare it to Uber in that respect. They're also the largest retail seller in the country, among foreign countries, foreign companies. And so they're wildly successful, but they're operating so secretively that the Beijing leadership doesn't understand what contributions they are making. And so Apple does its own supply chain study to sort of flip this on its head. And what they realized

• 1:07:22Speaker 05

  Is that they're investing fifty five billion dollars a year into the country. And so they sort of take this to Jiangnan High to basically like say, get off of our back. You have no idea how much we're contributing to your companies. And if I'm just to round this out, I would say if we fast forward to today, fifty five percent market share in global smartphones is the Chinese manufacturers like Huawei and Oppo and Vivo and so forth. And the reason they're so good is that Apple trained all of their suppliers.

• 1:07:49John Coogan?

  Yes, I remember you making this point about how Apple is essentially like the reason that Oppo and Huawei exist because they trained all of the manufacturing houses to build competitors to iPhones essentially. And and you and you made the point that that the Apple didn't kill Nokia with necessarily like product innovation in the United States. It was the manufacturing and the birth of the Chinese manufacturing supply chain that was taken advantage of by Huawei and Oppo and the other Chinese phone companies. But is there a reason why Nokia wasn't able to go to China and say, hey, we're going to piggyback on the same supply chain? We just we're OK being a year behind on the lagging edge. Did you ever dig into the the exact dynamics by that?

• 1:08:34John Coogan?

  Was that just a blunder by the by the Nokia team? Because it seems like if you see this rising manufacturing powerhouse, you might want to go and take advantage of it. If Apple is going to pay for all the R and D.

• 1:08:44Speaker 05

  Same question for Microsoft with the Windows phone, right?

• 1:08:46John Coogan?

  Totally, totally.

• 1:08:47Speaker 05

  The trouble is going to China is not the secret. If you've watched the BlackBerry movie, in fact, this is the final scene where they do have the BlackBerry storm, I think, just made in China.

• 1:08:56John Coogan?

  Yeah, yeah, yeah.

• 1:08:57Speaker 05

  It's a really simplistic way of thinking about it because it's not just that China has the skills and capabilities of pulling this off. It's that Apple has this pyramid structure in the company where Johnny Ive and the design studio called ID were given like a godlike power to come up with unfathomably intricate and difficult designs. And then the manufacturing engineers basically had to go make it happen. Nobody had the skills to go make it happen. And so like the line that I got from one of these manufacturing design engineers is that the perfect attitude was to say to Johnny Ive, I have no fucking idea how to build this, but I'm going to like move heaven and earth to go figure out how to do it. And nobody but the Chinese were willing to sort of put in the investments, the tailor made industrial policies,

• 1:09:42Speaker 05

  build factories on a scale that was needed to build iPhones at the volumes that Apple needed. So so China just emerges as the perfect answer to Apple.

• 1:09:50Jordi Hays?

  Before we get more into what happens next, can you talk about some of Apple's early experiments? I know they were trying to do stuff in California, the Czech Republic.

• 1:10:01Speaker 05

  Yeah.

• 1:10:01Jordi Hays?

  It sounds like they didn't.

• 1:10:02Speaker 05

  I know. And so, yeah, there's this seven-year narrative, and it sounds long, but I trust me, it's fast-paced and it sort of crosses continents, where Apple doesn't just sort of like, abandon making its own computers, right? Because they used to make them on three continents and turn to China. That's a seven-year experimentation stage where the translucent iMac alone was built by LG in Korea, and then they expanded to building them in Mexico and in Wales. It's a great strategy. Unfortunately, it's actually a fiasco. The Mexico factory is literally on fire for about a month, and so production is halted. And the production line in Wales was known as the toaster line for the propensity of the circuit boards to catch fire. So they have all these other problems that just like make China begin to look better. What happens is Foxconn comes on board.

• 1:10:45Speaker 05

  So my line about this is that Johnny Ive and Steve Jobs, the meeting of their minds is what makes Apple products unique. But it's the meeting of the minds between Terry Guo, founder of Foxconn, and Tim Cook that makes Apple products ubiquitous. So when Foxconn comes on board, this is a Taiwanese company, and that's crucial.

• 1:10:59Jordi Hays?

  Yeah, and I was gonna say, did they feel more comfortable partnering with Taiwan?

• 1:11:05Speaker 05

  So they begin with Taiwan. In the first five years of Steve Jobs' comeback, Taiwan is the most important country. It's where a lot of the products are being made, namely the iPod, but also the PowerBooks and the iBook. If you remember Reese Witherspoon and her little bunny ears in Legally Blonde, lining up to buy a computer, she definitely buys the little bright orange computer. I mean, Apple is redefining aesthetics, not just of computers, but later of MP3 players, and later, of course, of smartphones. And so, you know, I like to joke with people, like, what's your favorite Dell computer from the early 2000s, right? Because nobody has anything, you can't even remember any of them. Nobody was doing the sort of thing that Johnny Ive was doing. But what we've forgotten, and what my narrative sort of fills, is just like, to have that maniacal obsessiveness in design is one thing, and that's where a lot of the stories are.

• 1:11:48Speaker 05

  But to actually build those in the tens of millions per year, and later the hundreds of billions per year, like, clearly there's a story there, right? And it's weird that we've omitted it. But to build that quality, that quantity, and that cost, China just emerges as the perfect partner. So it's the combination of Cupertino's skill and China's scale that makes for the perfect marriage.

• 1:12:09John Coogan?

  Yeah, what's the stat on? The Tim Cook era, it's something like 20% of smartphone sales, but 80% of profits, something like that.

• 1:12:16Speaker 05

  Isn't that insane? And you know, I'm only giving like a figure for 2016, but it's actually increased since then. So the market share for the iPhone has never gone above 20%, but these days they reap 85% of industry profits.

• 1:12:27John Coogan?

  Wow.

• 1:12:28Speaker 05

  That is just insane. I mean, find me another sector that comes anywhere close to that.

• 1:12:31John Coogan?

  It's remarkable. Yeah.

• 1:12:34Jordi Hays?

  Give it up for big tech profits.

• 1:12:36John Coogan?

  Yeah. How much of what you're seeing today with, there's some criticism of Apple for kind of faltering on the AI side, on the product side. Maybe the iPhone's gotten a little bit stale with innovation.

• 1:12:52Jordi Hays?

  And to be clear, Mark Gurman just said they didn't really announce any new AI features.

• 1:12:56John Coogan?

  Yeah. But at the same time, while people have been going after Apple for the lack of product innovation, lack of software innovation, it feels like in this particular moment, Tim Cook is the perfect CEO for Apple in the sense that they are facing immense geopolitical challenges. The supply chain is more complicated than ever and Tim Cook seems to be a fantastic leader in terms of the execution of that strategy. And so we're in this weird, I understand that there's a weird dynamic, but it feels like in terms of the challenges that Apple, the size of the challenges, they could miss on AI, but if they're able to scale up to a billion iPhones a year, they win.

• 1:13:36Speaker 05

  Hard to disagree.

• 1:13:38John Coogan?

  Okay.

• 1:13:39Speaker 05

  I understand the point that you're making and Tim Cook has provided immense value to Apple, but I do think it's sort of a times up moment. The reason I say that is Apple is so wedded to China that it has basically become an existential risk to the company. I'm not saying therefore the company's going to downfall or, you know, but, but if something like their export license from China was canceled, it's not like, oh, well, thank God we have 25% of iPhones now being made in India. None of those phones are independently made in India. They're all reliant on the China-centric supply chain. And if Apple's going to come out of it, I mean, basically if you agree that that's an untenable situation, it's a 15-year effort if it can happen at all, and you can't have the guy who created the current strategy leading the company, if that's the goal. So I would just question that he's the right person. And that's just on the supply chain side.

• 1:14:24Speaker 05

  That's on the operations side. That's his wheelhouse, if you will. The AI strategy is probably just as fundamental in the sense that we're now at a stage where people's next phones could very well be based on what AI features they have. And Siri, to quote Satya Nadella, is dumb as a rock. And they're basically not even allowing you to have ChatGPT replace Siri. I mean, Siri, ChatGPT is not allowed to go through my emails, not allowed to go through my photos, et cetera. It could probably work wonders if it could, but Apple, for privacy reasons, that may or may not be genuine. Privacy reasons. And when you get into China, ChatGPT is not allowed in China. And so AI is really taking off with the likes of Baidu and Alibaba and DeepSeek, of course.

• 1:15:02John Coogan?

  Yes.

• 1:15:02Speaker 05

  But Apple's going to be put in this strange position where, you know, my book is about how they've trained up their hardware engineers in China over the last 25 years. Is the next 25 years the story of how Apple's training up the AI developments in China? I mean, for starters, I don't know that they're a great teacher, just given that their own Siri product and AI isn't all that good. But that strikes me as an untenable position for them to be in. And so AI is like another, maybe not existential risk, but certainly a large risk for Apple that they certainly are flailing. And if the buck stops somewhere, it's with Tim Cook. So I would say there's two reasons that you'd call for new leadership right now.

• 1:15:36John Coogan?

  So talk about getting out of China, building up manufacturing capacity in India, Vietnam, America, anywhere else. Tim Cook has done it once in China. He's not, he doesn't have any unique tie to China. He's not Chinese. He just went over there, figured it out, built it up. It took immense time and investment. He's done it once. Can he do it again in a different country? Is that possible?

• 1:15:58Speaker 05

  So you sometimes hear that within Apple, and I would say that it reeks of hubris. In other words, China was a once in a century partner in terms of the tailor made policies, in terms of literally having hundreds of millions of people go from the migrant labor pools and into cities like Shenzhen and Suzhou to make all this happen. So it's not that China was just some blank slate with a lot of people and you could get it working. It's not just the density of the population, it's the dynamism of the population and the way that they're willing to work and the sort of bonded zones that China has. I mean, there's so many reasons why none of this is going to happen in America, because even on a philosophical basis, we wouldn't want to replicate things like the dual class structure of citizenship that you have in China, where if you're rural, you really can live in Shenzhen, but you can't raise your kids there. You can't get the social benefits. You certainly can't retire there.

• 1:16:43Speaker 05

  You know, philosophically, we don't want to replicate that. Whether India has to go that far, if they're going to do so, I don't know, but they at least are a country of 1.5 billion people. They have wages that are similar to the early 2000s in China, and they do have major policies of wanting to become a manufacturing powerhouse. I don't think they're doing enough, but it's not just a matter of Tim Cook sort of copying and pasting the strategy into a new area. That doesn't take into account just how different India and China are.

• 1:17:08John Coogan?

  Can you can you tell us more about that difference? India's democracy, but there's a lot of lack of infrastructure I've heard flagged as just like there's not enough scale at the ports, there's not enough industrial manufacturing equipment in the in the country. Same thing with Vietnam, although it's it does feel like Apple's maybe had a little bit more luck with AirPods in Vietnam, but I don't know if there's more color to that. And it might be more of one of those like final assembly things that we've been hearing.

• 1:17:36Speaker 05

  On the whole, I would say more is actually happening in Vietnam than people give credit for, and less is happening to in India than than people think. The problem with Vietnam is you just hit constraints, right? I mean, the population in Vietnam is literally one fifteenth that of China, so it is never going to rival China in a way that India could. India just doesn't have the skill. I don't know that they have the drive. They don't have the same Nietzschean will to power. The epigraph of my book is from a made in China 2025 document from 10 years ago, which says, without manufacturing, there is no country, there is no nation. No other country, let alone India, thinks of manufacturing in that way. But China does, so it's really difficult for India to compete. And even though they have a lot of people, they don't have the same migratory pattern.

• 1:18:20Speaker 05

  So I started a study that looked at maybe 80, maybe 84 countries of internal migration, and India was at the end of the list. So you don't have this culture, especially of young women, 17, 18 years old, leaving their parents' homes and going to work in a factory in Karnataka as like an equivalent of Shenzhen. Now, maybe you don't need to replicate every facet of how China pulled this off for the last 25 years, but it's not as though I look at India and see a bunch of qualities that would help them in manufacturing that China doesn't have. It's sort of one way that the advantages that China has. And as the world moves into automation, it's a little disconcerting that I believe I'm accurate in saying China has more industrial robots than the rest of the world combined. And they certainly have more than an order of magnitude more than in India.

• 1:19:03Jordi Hays?

  A lot of the issues around moving Apple's manufacturing around the globe today come down to demographics like you're outlining and just cultural differences. How does Apple's leadership think about automation? Because if Tim Cook is willing to invest 50 to hundreds of billions of dollars a year in a country.

• 1:19:26Jordi Hays?

  Couldn't, isn't there a world in the future where, you know, Apple's investing $100 billion into American iPhone manufacturing that's, you know, end to end automated? I know that, I know that's like extremely difficult.

• 1:19:38John Coogan?

  Yeah, it kind of gets around the cultural issue.

• 1:19:40Jordi Hays?

  But it gets around the cultural issues and it just becomes a capital formation issue.

• 1:19:44John Coogan?

  The stat that we, that we were toying with was that I think over the last decade, Apple has returned almost a trillion dollars to shareholders via dividends.

• 1:19:53Jordi Hays?

  Yeah.

• 1:19:53John Coogan?

  And so that's, that's enough money to do really, really big mega projects. The question is, is it, is it, is it just, that's not, even that's not enough money? No amount of money can get you there? Or is there some other factor?

• 1:20:04Jordi Hays?

  Yeah, because I think when people say like, oh, it's impossible to automate iPhone production, I don't think that the average person genuinely believes that in the fullness of the next 20 years, there's no way an iPhone could basically, you could put the parts in one side of a factory and a finished iPhone would come out the other side.

• 1:20:21Speaker 05

  So let me say two things. One, I'm totally in favor of stiffing shareholders and cutting the buyback program in half and spending the other $50 billion a year on building resiliency into the supply chain. So I'm not exactly sure that's what you're suggesting, but, but I would advocate that. Secondly, even if, let's just say, artificial intelligence on steroids is able to upend the way things are manufactured and you don't need 400,000 people in Zhengzhou to do it, nevertheless, China has unfortunately a number of advantages in terms of the refining and the mining of the metals. Even if the metals are being mined in Africa, it's Chinese companies that are orchestrating all of these processes. So even in a state where it is, as you say, it's sort of lights out factory where you throw in the components and then iPhones come out, that's probably still more likely

• 1:21:05Speaker 05

  to happen in China, in China than America, because they're the ones who have all the expertise sort of end to end in the supply chain. And then, you know, shipping an iPhone even on a flight to US is immaterial in terms of the costs. So you really would need the sort of political catalyst that we're seeing now in order to make that happen, but it has to sort of be the perfect convergence of everything happening. And Tim Cook can't just be the only person who's being pressured by the White House to do this, because if you're going to have Foxconn and a whole bunch of industrial clusters setting up shop, you know, in Pittsburgh. Or wherever it is that Trump wants it, they can't just be supplying iPhones, right? There is no factory in the world that all they do is supply iPhones, right? Think of a TSMC building chips for any number of company that you can think of. That is what you need. So it's not a matter of convincing Tim Cook to open a factory. There's no such thing as an Apple factory.

• 1:21:50Speaker 05

  You need Tim Cook to convince his underlings in the supply chain to build things. But in order to do so, they need to be building for, I don't know, Sony and Samsung and a whole host of industrial clusters. Or so a whole host of companies in an industrial cluster. Otherwise, the economics and the efficiency don't make any sense.

• 1:22:06John Coogan?

  Yeah, I remember you mentioning that it sounded like Apple had a mandate that their suppliers would not be overly reliant on Apple to the tune of more than 50% of what they produced being for Apple. Why did that dictate come from Apple? You would think it would come the other direction where if I'm a supplier, I don't want to be too dependent on Apple because if they pull out, I lose my entire business.

• 1:22:27Speaker 05

  That's true, but Apple has all the leverage in these relationships. And so if Apple says jump, the supplier says how high. And so if Apple's really, and just think of how demanding Apple is and particularly how much they scaled, right? So 5 million iPhones were built in 2007, nearly a quarter billion by 2015. So if you were a supplier just trying to keep up with that, like that was enough business. Even if you're making 1% or 2% margins, the volumes were making you grow at a level that you had never grown before. But yeah, what happens is that if Apple obviates the need for a certain component and turns direction just as they go from 100 million iPhones to 170 million iPhones, well, you would just go out of business. And so this would happen and it would, it would develop bad will from the supplier community towards Apple.

• 1:23:08Speaker 05

  And so Apple began saying for its own protection, however fast you grow with us, please grow as fast with somebody else. And that's what sort of gives birth inadvertently to the Chinese smartphone industry. I don't mean the suppliers, I mean Huawei, Oppo, VIVO.

• 1:23:20Jordi Hays?

  So speaking of the consumer market in China, how, how cooked is Apple in China? I know sales are down double digits as of at least last year. It doesn't look good, especially with all these new AI features coming online.

• 1:23:35John Coogan?

  Is that driven by just consumer choice and nationalism? Or are there actual structural policy choices that are, that are driving that change?

• 1:23:44Speaker 05

  My question back to you is whether cooked was a pun.

• 1:23:47Jordi Hays?

  Always, always.

• 1:23:49Speaker 05

  Just wasn't sure how intentional that was.

• 1:23:53Speaker 05

  Yeah, I mean, let me give the sympathetic views first, which is that after Trump 1.0 kneecapped Huawei. Huawei was at the time, first of all, outselling Apple globally in terms of smartphones. But more importantly, it was the only phone to penetrate the top tier. Apple doesn't really care if other phones, other phone makers sell more phones than them, but they do care if they're in the top tier. And so when Chinese luxury buyers were purchasing Huawei phones instead of Apple phones, it was a really big deal. But Trump, you know, disallowed Huawei from having access to Google services, which maybe doesn't matter so much in China, but I mean, I used to live in Germany and it had a Huawei. If that thing didn't have YouTube and Gmail anymore, it's gone, I'm not gonna have it.

• 1:24:36Speaker 05

  And they also disallowed them from having 5G technology from Qualcomm. So that worked really well at the time, and China market share for Apple was 9%. And then when Huawei gets kneecapped, all the luxury buyers in China that need a 5G phone, just as 5G was really coming on the scene, they all bought iPhones, so their market share doubles to 17%. You could say that as a result of that, as a result of Huawei being on the sidelines, Apple's market share was sort of overly inflated. So now that Huawei is back, we have had two years, and now this is the third year of Apple market share declining in China. But if I'm to be sympathetic, I would say it might just be that they're sort of right sizing or like refining an equilibrium now that Huawei is back in the game. Unfortunately, I wouldn't sort of go with the sympathetic view, I'm more cynical here,

• 1:25:22Speaker 05

  because now that Huawei is back and you're seeing more nationalist fervor in China, and now that iPhones are going to be built in India, which actually diminishes the sense that the iPhone is an indigenous-made product in China. And now that IA, sorry, AI is taking on more preeminence in terms of why you should buy a phone, and Apple's having all sorts of problems on their own, and the problems are only compounded by the fact that they can't use partners like ChatGPT in China. I would predict that by 2030 at the latest, iPhone share in China is going to fall back to single digits.

• 1:25:52John Coogan?

  Interesting. Can you talk more about the parallels or differences between Huawei, Xiaomi, and Apple? Huawei's gone into GPU accelerators, they're competing with Nvidia on the Ascend side. Xiaomi has a car, Apple's kind of stumbled in cars, or there was rumors that they were working on a car, they didn't. I guess my question is...

• 1:26:17John Coogan?

  Why hasn't Apple reaped some of the downstream dividends of adjacent product development based on their supply chain dominance? Because that seems like almost free money for them. And it seems like all the Chinese companies have been like, oh yeah, we make phones. So let's also make hoverboards and cars and everything. And there's been a much different culture in terms of product development. Does it just come down to culture or is there something else or kind of structural going on?

• 1:26:42Speaker 05

  It's a fair question. I don't really know why Apple abandoned the car project. And I think it could have been a winning product, especially in China, because they have such brand appeal. On the other hand, I would say the Apple car product probably should have died years earlier. The reason I say that is because Apple got caught up in the hoopla that Silicon Valley was in in 2015, which is that self-driving cars are going to be everywhere, right? I mean, the founder of Lyft had said that, quote, "A majority of our rides will be self-driving by, I think, 2021."

• 1:27:11John Coogan?

  Yep.

• 1:27:12Speaker 05

  Travis Kalanick had said that they would buy 100,000 Mercedes self-driving cars by 2020.

• 1:27:17John Coogan?

  Wow.

• 1:27:18Speaker 05

  And Larry Page of Google said self-driving cars will be bigger than Google. I mean, there was a sense that self-driving cars were the next big thing. And Apple was not immune, and Apple fit into it. As soon as we realized that the self-driving thing was a bit of a fantasy and was going to take much, much longer to develop, I think the project could have died. Because at that point, it's just like, is Apple just competing on acceleration with Tesla? Like, what exactly are they going to do? If you're in a self-driving car and you're using iOS apps on all these, like, you know, sexy windows and stuff within the car, like, it makes all kinds of sense. Once you take the self-driving car element out of it, I don't know that the Apple car makes any sense.

• 1:27:53John Coogan?

  Sure.

• 1:27:53Speaker 05

  The Chinese are in a different ecosystem where it does make sense for them to have a Xiaomi car, a Huawei car, et cetera. And maybe there's self-driving, maybe there's not. But they sort of like having an advance on all this technology and they like market share. Apple only wants to be in markets where it's going to be a number one or a number two player. It doesn't want to play second, third fiddle to Tesla and any number of other companies.

• 1:28:14John Coogan?

  Yeah, it was kind of remarkable that they actually Went so heavy into Apple TV because they were behind HBO and Hulu and Netflix and they really like carved something out there that worked, but I know a lot of Hollywood people that were very skeptical about that because in film and television, the brand standard is so high and you have a couple of bad shows, you get a bad reputation, but they slog through.

• 1:28:35Speaker 05

  Can I give you my theory on why they moved into Apple TV plus?

• 1:28:37John Coogan?

  Please, yeah, that'd be great.

• 1:28:38Speaker 05

  Apple has a services division that is largely not what you think it is as the consumer. In other words, if I said, what are Apple services, you would say, oh, it's Apple, you know, it's Apple Music.

• 1:28:47Jordi Hays?

  It's the random $11 charge I get a couple times a month.

• 1:28:50Speaker 05

  Et cetera. What it really is, is 30% fees on App Store and Google paying them $20 billion a year. So for the purposes of earnings calls, I think they want to push more into things like talking about Ted Lasso and what Emmy awards they won, rather than having to say, we squeezed more out of Spotify this year, and by the way, Google is now paying us $22 billion a year. I really think that was the motivation for why they went into TV plus.

• 1:29:12Jordi Hays?

  Why do you, somewhat random, but why do you think they never made a television?

• 1:29:16Speaker 05

  Oh, I don't know. I mean, I've heard one thing, which is that Steve Jobs demanded, this is obviously, you know, before 2011, that when the phone, when the TV was off, that the pixels be white rather than black. And that Apple was unable to nail this. I'm not saying that's why the project died.

• 1:29:33Jordi Hays?

  So, I mean, it's so interesting because I would, I would happily never get any Apple media products. I don't need their shows. I would much prefer to have an Apple device instead of this buggy, Samsung, you know.

• 1:29:47John Coogan?

  Absolutely.

• 1:29:48Speaker 05

  But it's funny, TVs are good, right? Like when Apple comes up with the iPod, it's because they're looking at MP3 player on the market in 2000, 2001, and they're saying everything sucks. The reason why they never made a video cam, even though they came out with iMovie, is that video cam quarters were generally speaking, doing fine. So they needed to break into one market.

• 1:30:04Jordi Hays?

  Yeah, but I would argue, I would argue that TVs suck.

• 1:30:07John Coogan?

  There's ads, there's all these pre-installed junk.

• 1:30:10Jordi Hays?

  I hate every, I've got, I hate the four TVs in my house.

• 1:30:13Speaker 05

  That's a Samsung frame in the back there. I think that thing's great.

• 1:30:15John Coogan?

  It's okay. I have one too.

• 1:30:17Jordi Hays?

  Yeah, but the software is buggy, it's slow.

• 1:30:20John Coogan?

  It wants me to upgrade and subscribe and do all this junk and it's just like not.

• 1:30:24Speaker 05

  I guess the question is how much you would pay because TVs aren't a high.

• 1:30:27Jordi Hays?

  10 grand.

• 1:30:28John Coogan?

  Yeah, I mean, I, I, I think it would, I, I think it would, I think it would be like the Apple Pro Display XDR, which is like a $4,000 screen.

• 1:30:35Jordi Hays?

  Yeah, it's basically more than.

• 1:30:37John Coogan?

  More than anything else.

• 1:30:38Jordi Hays?

  Five to 10 times what the comparable.

• 1:30:40John Coogan?

  The designers still demand it and I think that, I think that they could pull that out, but I, but I think you're probably correct overall.

• 1:30:45Jordi Hays?

  Yeah.

• 1:30:46John Coogan?

  I, last question, I want to get you and I want to let you go. I want to hear the story of the mini Tiananmen that happened in 2010. That's a fascinating story.

• 1:30:54Speaker 05

  Oh God, what a terrible story to end on. It is the only bit in the story that I would call salacious and I only have it in there. I don't like salacious stories is that it's just an incident that takes place where Apple really realizes they're in over their head and they don't understand the culture. Uh, how many, how many seconds do I have to tell the story?

• 1:31:14John Coogan?

  Uh, a minute or two.

• 1:31:16Speaker 05

  Two minutes. Okay, so it's hard not to, like, I need to give the backstory, which is that the iPhone 4 in 2010 goes absolutely wild in China. It becomes the most conspicuous thing that you can own.

• 1:31:26John Coogan?

  Yeah.

• 1:31:27Speaker 05

  And it's so conspicuous and there's such a supply, demand imbalance that Apple at the time has four stores in a country of 1.4 billion people. And so these scalpers known as yellow cows begin sending migrants to the store by the thousands, where everybody can each buy two units. And then these gangsters who are backed by the Triads are basically like lining up these people, getting all the phones that come out of the store, uh, and then going to a city like Chongqing, population 32 million, number of Apple stores, zero. And they're able to sell them at 7, 8, $900. They begin finding ways illegal, uh, legal and legal to make more money per iPhone than Apple. And one of the ways was to go buy a phone in America at T-Mobile on a 24 month contract and using a fake ID,

• 1:32:08Speaker 05

  they could acquire the phone for one month's worth of the, of the 24 month contract, smuggle it into China and then sell it for 8 or 900. I mean, that's just the state of demand at the time. More than that, they were actually zapping out, out the phones. So they were like rendering the thing inoperable, but in the process of breaking it, they were masking the. That it was a stolen phone and then making more money that way as well. And they were even hollowing out the phone's components, selling off the memory and things like that. So if you understand, just like through this brief thing, that there's this chaotic scenes of crazy demand of triad gangsters and everything. One of the worst things that happens in the book is that Apple runs out of product at the Shanghai Pudong store. So there's 7,000 migrants waiting to buy their product.

• 1:32:49Speaker 05

  And they're more scared of the triads who have hired them to be there than they are of the police. So when Apple says, we're out of product, you need to go home, they don't want to leave. They feel like they can't leave and they literally prevent the glass doors from being shut on them. And they stay to sit in in the store. So the police are unable to get them to go. The mayor of Pudong shows up, they're not able to go. And eventually after 11pm, 100 black clad police officers that someone compared to like, you know, the SWAT team or to, what's it called, SEAL Team Six. They, those kind of guys show up. And when a young woman sort of having, have never seen these people, takes a photo of them. One of the persons takes her behind the genus bar and beats are so bloody that the blood on the ground cannot be scrubbed out.

• 1:33:34Speaker 05

  And they have to re-import granite from Italy to replace the stone tiles.

• 1:33:41Speaker 05

  It's a terrible story. The person who told me it has been having nightmares about it for the last 14 years. But it's an example of Apple just not understanding what they were dealing with. And it results in the political awakening the following couple of years when they begin to hire senior people on the ground to understand the politics, the culture and the distribution issues that they're having in the country.

• 1:34:00John Coogan?

  Very rough. Well, it's been fantastic talking to you. I personally am pulling for Apple to reshore manufacturing and diversify the supply chain. I'm on the side of Tim Cook. I think he can do it. I think he's cooking.

• 1:34:14Speaker 05

  I'm on the side of friend shoring. I would love to see more in Mexico and more in India. I don't know what's gonna happen in Pittsburgh.

• 1:34:20John Coogan?

  Yeah.

• 1:34:20Jordi Hays?

  Patrick, thank you for doing the work to tell the story and come back on anytime.

• 1:34:24Speaker 05

  Thanks much. Okay, cheers.

• 1:34:26Jordi Hays?

  Cheers.

• 1:34:27John Coogan?

  Bye. Uh, really quickly, let me tell you about Adio, Customer Relationship Management, uh, Magic. Adio is the AI native CRM that builds, scales, and grows your company to the next level.

• 1:34:39Jordi Hays?

  And we are power users. Power users over here.

• 1:34:42John Coogan?

  Power users. Uh, next up, we have Aaron Slodov coming in the studio. Tell us about Reindustrialize, all the things that are going on in his world.

• 1:34:49Jordi Hays?

  And I'll be right back.

• 1:34:49John Coogan?

  And let's check in on the intern cam, see how Tyler's doing. Uh, Aaron, how you doing?

• 1:34:59Aaron Slodov?

  Uh, at the donut.

• 1:35:02John Coogan?

  Oh, yeah. Uh, oh, looking good. I like the background. Uh, we have our intern, we have our intern in the studio today, uh, making the first iPhone in America. It's happening. It looks like he's done. Give me the update.

• 1:35:13Jordi Hays?

  I'm getting pretty close.

• 1:35:14John Coogan?

  He's getting pretty close.

• 1:35:15Jordi Hays?

  I'm missing, I, most of the

• 1:35:17Speaker 02

  Kind of, you know, external, external things here. I got the volume buttons, home button. I gotta put in the battery, the main kind of chip motherboard.

• 1:35:24John Coogan?

  Okay.

• 1:35:25Speaker 02

  Um, but feeling pretty good. I'm probably 80% of the way there.

• 1:35:27John Coogan?

  80% of the way there, less than an hour and a half in. I think this is, uh, uh, this is going fantastically. I wasn't sure if this is possible, but it looks like it's, looks like it's happening. Anyway, Aaron, how, how you doing? What are you, what are you up to these days?

• 1:35:40Aaron Slodov?

  Uh, doing well and getting ready for, uh, you know, the second annual

• 1:35:49John Coogan?

  Is the second Reindustrialize conference? Give me the background on the first one. How'd that go? When and where is the second one?

• 1:35:56Aaron Slodov?

  Yeah. Um, so this is kind of a labor of love of many people, right? Uh, basically, you know, we have, we have a nice team of, uh, co-founders, myself, Austin Bishop, Adam Donahue, and Greg Bernstein.

• 1:36:11John Coogan?

  Oh, cool.

• 1:36:12Aaron Slodov?

  Um, and an amazing team of organizers, but yeah, last year, the backstory is kind of, obviously, you know, hard tech, deep tech, the wave was kind of happening at that point. Um, I put out that article, the Techno Industrial Manifesto.

• 1:36:25John Coogan?

  That's right.

• 1:36:26Aaron Slodov?

  Lots of questions, lots of people talking about this across military, government, finance, whatever.

• 1:36:32Aaron Slodov?

  Wanted to put all these people in the same room together, right? So the idea behind this was can we actually build a big tent around this idea? And, um, I saw it as a way to really just like convene and

• 1:36:45John Coogan?

  Who were some of the top, top speakers last time?

• 1:36:49Aaron Slodov?

  Um, so we had Sean from Palantir. We had Eric Prince. We had the Lieutenant Governor of Michigan. We, I mean, it was crazy, right? Like this all came together in under three months, basically. Uh, and we were, we were all grinding super hard to, you know, bring this awesome group of people together. You know, Chris gave the keynote, uh, from Hadrian and it was this really, really excellent group of people. It was like you were there with, you know, a thousand of your friends, right? And everybody's ready to build and, um, it was just, it was wonderful, you know, in so many ways. And people really thought that it was like, yeah.

• 1:37:27John Coogan?

  What, yeah. What, what is the overall state of the reindustrialization project? There's been a lot of thought pieces and conferences. What have we seen on the legislation side, on the EO side? And what are we waiting for next?

• 1:37:42Aaron Slodov?

  I mean, yeah, we could probably spend an entire hour on, uh, all the things that have rolled out of the admin, you know, since January. Um, but it, it has been, it's been surprising, uh, to say the least. Like, wow, that's awesome.

• 1:37:58Jordi Hays?

  What's up, Aaron? Good to see you.

• 1:38:00Aaron Slodov?

  Hello, you as well. Um, so yeah, like following up on last year, right? Like one of the things that we established at the very end of the summit was we wanted to bring together the new industrial alliance, new American industrial alliance, NIA, right? So, um, we, Austin has been running that in DC for the last year. And we've got basically like a mountain of, you know, uh, legislation and policy that has been active and pumped out, um, through various like EO's. We have, um, reconciliation happening right now. There's, there's going to be a ton, right? And shipbuilding standalone by itself, right? Um, it's, I think we're going to be at a level where, um, the sovereign wealth fund potentially, right?

• 1:38:42Aaron Slodov?

  Like equipment financing out, out the wazoo, like it, it will be pretty interesting to kind of like watch and see what happens here. Very, very excited to see.

• 1:38:52John Coogan?

  What can you tell us about what to expect at this year's reindustrialize? Are tickets on sale yet? Where can people go to sign up? Is it invite only? How is the, how is the conference coming together? Any speakers you can tease?

• 1:39:06Aaron Slodov?

  Yeah, so we did, we did actually, you know, bring out a little list the other day of our top invites. And you can check that out on the reindustrialize account, which is reend summit on X. But yeah, basically, the way we're doing this right now is that it's mostly invite only. We're balancing, you know, a very interesting community here in terms of like bringing the stakeholders together, decision makers, but also all the people that are very enthusiastic about reindustrialization and bringing manufacturing back. So.

• 1:39:43John Coogan?

  Get in Aaron's DMs. That's what I'm hearing. Start yapping. That's great. And I mean, big, big development since the last reindustrialize. I've seen the iOS autocorrect keyboard stops correcting reindustrialize to deindustrialize. Total cultural victory.

• 1:40:01Jordi Hays?

  Let's go.

• 1:40:04John Coogan?

  We love it. We love it.

• 1:40:05Jordi Hays?

  I think that's subtle signaling from Tim that we're bringing the iPhone back to America.

• 1:40:10John Coogan?

  Yeah. Okay.

• 1:40:11Jordi Hays?

  Any, any advice, Aaron, for Tyler?

• 1:40:14John Coogan?

  I was about to ask. Yeah, yeah, yeah. What, what, what's the advice for our intern? Who's assembling the iPhone in America for the first time? What tools does he need? You know, what, what are the key, what are the key steps to really reshore manufacturing? Tyler, I'm seeing lots of pieces that didn't go in that phone.

• 1:40:32Jordi Hays?

  Yeah, take it apart. I'm not done yet. Take it apart, put it back together.

• 1:40:35John Coogan?

  I was not done yet.

• 1:40:36Jordi Hays?

  Yeah.

• 1:40:38John Coogan?

  Yeah, yeah. Aaron, what does it take to reshore the iPhone?

• 1:40:41Aaron Slodov?

  Does he, I mean, are we going to give him a gommering for this? Cause I mean, it's a lot of, it's a lot of grit, right?

• 1:40:47John Coogan?

  We're watching history. So cultural shift is what I'm hearing.

• 1:40:51Aaron Slodov?

  Yes. I mean, massive cultural shift, which is, you know, underlaid by a lot of other factors too. So I think that infusing and transforming the industrial base through technology gives, you know, a lot of incentive for people to jump back in and join. We're not, we're not trying to go back to the 50s here. So I really do think that that's, you know, part of the cultural movement, right? To like bring the stuff kicking and screaming out of World War II era or the 80s, or however you really want to think about it into the 21st century. And it's not going to be easy, right? Like listening to Patrick talk about that stuff is, it's mind bending, honestly. Like how, how much one company can actually do, right, at scale? So.

• 1:41:35John Coogan?

  Yeah, yeah. What are you thinking about kind of the first steps to biggest re-industrialization? What is the rate limiting like in the supply chain right now? We've heard about mining and Dirac's working on work instructions. And Hadrian and you are working on different pieces of, whether it's CNC or injection. There's a whole bunch of different pieces of like the subtle supply chain. I talked to one person who was working on bringing a team internationally to build brushless motors for drones, for small drones. And they were like, oh yeah, I'm excited to get to America, set up shop here. I'd love to just set up my company in the brushless motor district in America. Wherever the brushless motor district is, I'll just set up my business there.

• 1:42:20John Coogan?

  So then if I need a certain part, I'll just walk across the street to another company. And the guy had to explain like, no, no, no, we don't even have a district. We don't even have a company. We have nothing. So, so yeah, what, what, what are you most excited about? What's perhaps underrated right now in terms of the supply chain?

• 1:42:35Aaron Slodov?

  So it's a really good question because this is kind of like, can we pull the Uno or Verso card on, you know, China or whatever other supply chains and bring some of the stuff back, right? Like what, what does that actually require? And it's more than just, you know, the raw, the raw materials and machines. It's the way that I think about this stuff. It's like trade skill, right? Like, these are very, very precious tools of skill that when you give them away, right? It empowers somebody else to scale them somewhere. And if you've got hundreds of millions of people to do that, that's, it's pretty challenging, you know? We don't necessarily need to outdo them. We just have to be right, like in the arena still.

• 1:43:18Aaron Slodov?

  Because one of the things that they want is to de-industrialize everybody else, right? So we can't, we just can't let that happen. And that's okay, right? Like we, we have to be able to fight back on a fundamental level by preserving, replicating and like scaling this very precious like trade skill. And if that has to be done. Through through AI and automation, right? Like to compress the stuff that people really shouldn't be doing, right? Like these dirty, dark, dangerous types of jobs. We don't, we don't really necessarily need to go back to that. But yeah, there's, there's, there's a lot, right? Like underlying this problem.

• 1:43:56Aaron Slodov?

  And I think a lot of people have a challenging time separating the fact that like, do we, do we actually need to be focused on making T-shirts and toasters in America? But like, not necessarily, but the feeder industries that you need to do all that stuff, you know, grant you the ability to do all these other things, right?

• 1:44:13John Coogan?

  Yeah, yeah. This line about like, maybe we need to make, make Happy Meal toys in America in order to, for, to earn the right to make iPhones in America too. Like the supply chain is so interlinked that even these kind of like these silly toys that seem so easy to offshore. Maybe we need to bring those back too. Anyway, it's been fantastic having you. I'm sure we'll learn a lot more at Reindustrialize. Where can people go to learn more? What's the website?

• 1:44:37Aaron Slodov?

  Reindustrialize.com.

• 1:44:38John Coogan?

  There we go. That's a great domain.

• 1:44:40Jordi Hays?

  Let's give it up for a great domain.

• 1:44:41John Coogan?

  Thank you, Aaron. Thanks for hopping on the show. We will talk to you soon. Have a great rest of your day.

• 1:44:45Jordi Hays?

  We're excited to cover it. Thanks, Aaron.

• 1:44:47John Coogan?

  Before we bring in our next guest, let me tell you about public.com investing for those who take it seriously. They got multi-asset investing, industry-leading yields, and they're trusted by millions, folks. Our next, our next guest is from Solugen.

• 1:45:01Jordi Hays?

  Solugen is Solugen.

• 1:45:03John Coogan?

  Oh, we'll ask him. Welcome to the show. How are you doing? Would you mind introducing yourself so we can get the pronunciation correct? So we don't mess it up. We hate messing up pronunciations on this show. How are you doing?

• 1:45:13Speaker 07

  Good. It's, it's Solugen.

• 1:45:15John Coogan?

  Solugen, okay.

• 1:45:16Speaker 07

  Yeah. You want to know how we got it?

• 1:45:17John Coogan?

  Yeah, please.

• 1:45:18Speaker 07

  Stupid name. Hydrogen peroxide, soluble hydrogen peroxide generators.

• 1:45:24John Coogan?

  There we go.

• 1:45:26John Coogan?

  You know, the port, the portmanteau era in, in Silicon Valley, deeply underrated. There was, there was a time when everyone had a portmanteau name. Then we went to the LY name. You could have been Solugen Lee.

• 1:45:38Jordi Hays?

  Cluley's bringing it back.

• 1:45:39John Coogan?

  Bringing it back. You had Bitly and all these different names.

• 1:45:43Speaker 07

  I think there was a dot S Y, like Syrian domain name for a while.

• 1:45:46John Coogan?

  Oh yeah, that was a big one. A lot of it was driven by like, What country is open to selling their TLD?

• 1:45:52Jordi Hays?

  Notion, yeah.

• 1:45:53Speaker 07

  Mostly war torn countries.

• 1:45:55John Coogan?

  Yeah, yeah.

• 1:45:56Jordi Hays?

  Yeah, Notion inspired the dot so domain.

• 1:45:59John Coogan?

  Yep, that was a big movement.

• 1:46:00Jordi Hays?

  Somalia.

• 1:46:01John Coogan?

  And then I remember dot TV was Tuvalu.

• 1:46:04Speaker 07

  Oh, yes.

• 1:46:05John Coogan?

  Which is a tiny, tiny island nation of like 5,000 people. I might be getting that wrong. But I'm pretty sure at one point they were making like half of their GDP off of selling dot TV domain names.

• 1:46:15Jordi Hays?

  Yeah, so dot AI domains represent 20% of the government's total revenue for Anguilla.

• 1:46:22John Coogan?

  Anguilla, wow. There you go. That's fascinating. Anyway, we're not here to talk domains. We're here to talk industrialization, making massive things, chemicals. Can you give us a brief overview of the company and the shape of your business? And then I have a bunch of questions about how you actually like build this stuff.

• 1:46:39Speaker 07

  Absolutely. So Solugen, pronounced Solugen, we got started in 2017, spun out of MIT and then went through Y Combinator, raised a significant amount of capital to basically decentralize chemicals production. If you look at chemicals production today, it's like these massive facilities. I grew up in Houston. My backyard was effectively a refinery. These are the size of islands, like Galveston is an island. It's largely a refinery. What we said was like, what if we can marry my background and my co-founder's background, Sean, to basically make a better process? And we did. We invented basically, I guess you can call it the world's smallest chemical factories is how we think about it.

• 1:47:21Speaker 07

  And the whole point of that is that instead of having these massive centralized facilities, you've got decentralized production where you can put these facilities anywhere in the world and actually have your product be closer to the chemical. We started the business with hydrogen peroxide, very dangerous to ship hydrogen peroxide. So the whole premise of the company and the name, as we discussed, is basically creating peroxide on demand near the end customer. We since expanded quite a bit out of not just peroxide, but added multiple chemicals into our portfolio. So yeah, that's kind of the background.

• 1:47:54John Coogan?

  I mean, I'm familiar with using hydrogen peroxide if I get a little cut on my hand, like. I imagine that that's not the vast majority of customers.

• 1:48:02Speaker 07

  Yeah, no, it's a it's a good question because when we started, everyone was like, you mean like the little brown bottles?

• 1:48:08John Coogan?

  Yeah.

• 1:48:09Speaker 07

  On the shelves. We're like, yes, and there's a huge market for peroxide for water treatment. So it's a really good antimicrobial. So it kills bacteria, but also for rockets. So like, if you look at like rocket propellant, a lot of it can contain high concentration peroxide. It's called HTP peroxide that basically gives you pretty good thrust. It's like liquid oxygen, but more powerful. And then the other applications are like in paper and pulp and all the things that no one talks about. It's like this invisible, multi-billion dollar industry that we were after.

• 1:48:40John Coogan?

  Wow. I mean, you said the the the plants are smaller, like not an entire island, but I imagine that it's not something I can put on my desk. How big are we talking?

• 1:48:50Speaker 07

  Yeah, no, unfortunately, your intern cannot make one of these at his standing desk like the iPhone.

• 1:48:55John Coogan?

  Not yet.

• 1:48:56Jordi Hays?

  I don't know. I don't know. Look at him. Look at him. This guy.

• 1:48:59John Coogan?

  Tyler can do anything. The first American iPhone.

• 1:49:03Speaker 07

  What are you doing?

• 1:49:04John Coogan?

  He's doing well.

• 1:49:05Jordi Hays?

  He's making it. He's making the first USA made iPhone.

• 1:49:08John Coogan?

  He's doing well. He had to take it back apart to put the battery in. Oh, the battery's going in now. It's looking good. The battery's in. He's doing great. Yeah. So how how big are these plants?

• 1:49:18Speaker 07

  Yes, it's like 10,000 square feet. So basically the size of like a small warehouse, you could say.

• 1:49:22John Coogan?

  Great.

• 1:49:23Speaker 07

  Yeah, so that's that's the idea.

• 1:49:24John Coogan?

  Got it. And then and then walk me through the chemical supply chain in America. Are there? I mean, we hear a ton about we don't have enough tool and die makers in America. If we're talking about Apple, we don't have enough rare earth mineral extraction. I I there's this there's this deja vu. Anytime you find out about a new thing in the supply chain, it's always bad news and America's not leading in it. Maybe give me the bad news.

• 1:49:50Speaker 07

  Yeah, so chemicals, I'm not going to shock you guys here. Eighty percent of chemicals that we consume in the US come from China. Or a different country.

• 1:50:05Jordi Hays?

  Sorry, they're not booing you. They're just, they're just patriots.

• 1:50:08Speaker 07

  You know, it makes sense, though, because it's the cheapest cost of capital and the cheapest cost of labor out there. So what we're saying is, we want to go after chemicals that give the United States an edge, that China can't make easily, that are difficult to ship from other countries beyond China. And that, the United States is uniquely capable because of the technology we're developing to produce. So if you look at the supply chain today, it's a producer, basically a giant chemical factory makes the chemical, concentrates it into a dangerous mix of something that can fit into a tanker truck. That then goes to a middleman, who then sells that to another middleman, and then to another middleman. There's about five middlemen in this chain, they're called distributors, who then sell

• 1:50:51Speaker 07

  that to the end user. What we've done at Solugen is said, hey, like, what if, what if we kind of collapse this whole middleman chain, and put one of these units near our sites? I'm actually, I'm pointing to my plant, we have a plant behind me right now. That plant, our biggest customer is 10 minutes down the road. They take most of the volume of the plant. And basically, that's the premise of what we're trying to go after. And the business...

• 1:51:14John Coogan?

  Yeah, I mean, talk to me about the early go-to-sales motion, because like, selling chemicals does not feel like, oh, yeah, you're a YC company, you're just going to sell to the other companies in your batch, like...

• 1:51:24Speaker 07

  Yeah, we sell a lot to other companies, actually. No, I'm kidding.

• 1:51:26Jordi Hays?

  We'll buy a million dollars of your CRM, you buy a million dollars of hydrogen peroxide.

• 1:51:32John Coogan?

  We both have a million dollars in there, are. You're really, you're really breaking the YC narrative. I mean, now YC obviously does a lot more hard tech and stuff. But you were, you were early to that party, for sure.

• 1:51:43Speaker 07

  We were early to that party, and the way we went to market, it's kind of a bizarre story. So we started in what was called float spas. Have you guys heard these? These are like these isolation things?

• 1:51:53John Coogan?

  Yeah.

• 1:51:53Speaker 07

  That are like 25 weight percent salt, and you float in it, and you're completely isolated from, from the world. Turns out, they use a lot of peroxide to clean that water.

• 1:52:02John Coogan?

  Oh, that makes sense.

• 1:52:03Speaker 07

  But when we started, we weren't at scale. So we couldn't, like, we couldn't make industrial quantities product. We can make small artisanal batches of peroxide, is how I pitched it. But then if you look at the, these float spas, they're not using that much, but they're paying a lot per gallon for this product. So we just said, okay, let's just go a little bit cheaper than what everyone else is doing, and sell it to the float spas. We got 80% of the market share within two years. LA, yeah. Not a big market, but we were able to kind of like dominate it.

• 1:52:33Jordi Hays?

  That's a YC, that's a YC thing.

• 1:52:35Speaker 07

  Yeah, that's a YC, that's a founder's fun thing. Yep, for sure. Entree into that world. And then from there, once we had that win, we of course went to consumer products. We actually launched a brand, which like not many people know the story. We actually launched a brand called Odde Clean. So basically we said, okay, we did this whole float spa thing. We sold off, basically we had a partner that we just got a contract with and sold them the volume. Then we said, what's the next, what's the next highest leverage point we can get as we scale the technology? And it was wipes, because everybody wipes. And so if you have these wipes that have just a little bit of peroxide in it, you have a pretty high dollar per gallon of peroxide. So we launched this brand, a cleaning wipes brand called Odde Clean.

• 1:53:19Speaker 07

  That got bought out by the nation's biggest wipes manufacturer. We got a supply contract out of that and that really kicked off our, you know, our B2B sales motion.

• 1:53:29John Coogan?

  That's, yeah, that's amazing. Now, get me up to speed on the fundraising side. I'm interested to know the, you raised all the capital, but the use of capital has to be different because there's capex in the business, there's R and D. But, but talk to me about the mix of venture and debt and, and how you think about deploying capital, not getting over your skis because you're raising big rounds, probably ahead of, of huge profits. How are you underwriting these investments as they happen?

• 1:53:59Speaker 07

  Yeah, that's a great question. I think fundamentally, we look at this metric called return on invested capital or ROIC. That is like our North Star where any asset that we go after has to pass an ROIC filter. And so we only go after the top two ROIC assets at any given time at Solugen. So fundamentally where we are today, we've raised about 700 in growth and venture capital.

• 1:54:22John Coogan?

  Fantastic.

• 1:54:24Speaker 07

  And then we've also, we got a Department of Energy loan program offer for $214 million at 6%, but that program is in this administration, a little bit challenged just because it's a Biden era thing. No big deal. We were going to private banks to serve the debt side of it. Now that we've proven out commercial scale, we can basically show that these, this is the unit economics on one of these assets. This is how big it can get. Let's go after multiple ones.

• 1:54:53John Coogan?

  Yep, I've talked to a couple of. Hard tech investors or industrial founders, hard tech founders, where when they have to build something, there's a whole bunch of different structures. Like, do they want to own the land? Do they even want to own the building that they're building? Or do they want to set up a different LLC for that and raise different investors for that? Have you gotten into that game?

• 1:55:14Speaker 07

  Yeah.

• 1:55:14John Coogan?

  Do you see that that's coming down the pipe?

• 1:55:17Speaker 07

  Like, a lot of people say if you're doing project financing, you should put it into a project financing entity.

• 1:55:22John Coogan?

  Yep.

• 1:55:22Speaker 07

  What we fundamentally believe is like, we can move a lot faster if there's no one else kind of involved at the table. That's going to dictate how fast we can move.

• 1:55:30John Coogan?

  Got it.

• 1:55:30Speaker 07

  Traditionally, like, I would even say, even the LPO, they wanted us to work with like this white shoe engineering firm that would have taken three years to build our factory when we did ours in 11 months. So we said, we're not, we don't really want to work with those folks. We're going to do it ourselves. And so that's why we own everything outright.

• 1:55:47John Coogan?

  Got it. Talk to me about automation and just getting more value out of the capital assets that you're deploying. Humanoids are in the news. That seems pretty far off, but what else is valuable to you right now in terms of, are there things that you can design to make the plants more efficient?

• 1:56:09Speaker 07

  I wish I could sit here and tell you, like, the automation piece is going to be big for us. It's not, guys. I'm like, not for what we're doing. The fundamentals of chemicals is all about yield, and yield comes down to chemistry. So if you look at a traditional petrochemical process, the yield is about 60%, which means 40% of your initial carbon is either a waste product or has to go into the environment as CO2. What we're saying is, let's actually engineer that first before we try to optimize or automate anything, because that's the tree bottleneck for the cycle time of these products. So that's where we're focusing on the yield side. I will say there are opportunities for automation that are popping up that are exciting. That's on the defense work that we're doing. That is going to be quite important,

• 1:56:54Speaker 07

  because we are making products that will go boom. And it's important to have a lot of automation and control around that. Yeah.

• 1:57:01John Coogan?

  Yeah, well, I imagine that that's more. Yeah, I mean, I'd love to hear more about that to the extent that you can talk about it. But also, in terms of any of the, any of the advances on technology in terms of understanding chemistry, we've seen alpha fold and there's amazing things that you can do when you have a lot of data. Is that something that's coming down the pipe or is that just not really relevant?

• 1:57:23Speaker 07

  Yeah, so we actually just released a paper, it got published last week called, our algorithms called badass. So basically, what it does is it basically figures out a sequence for an enzyme. So we use enzymes as catalyst, it figures out a sequence that's most likely to have the function that you're going after. And that paper showed 75% predictability based on the sequence itself. That in itself is important, but what's more important is really the reactor design itself. How we think about how the chemicals interacting. It's a very, it's truly an engineering problem versus a science fair problem, I'd say. Yeah.

• 1:57:58John Coogan?

  Jordi, anything else?

• 1:57:59Jordi Hays?

  If you're successful, is there a specific vintage car that you would develop? If you know, Neos, the Neos Grenadier?

• 1:58:08John Coogan?

  Oh, yeah, another industrial chemical.

• 1:58:10Jordi Hays?

  Neos, fourth largest chemical manufacturer. They've redesigned and rebuilt the Land Rover Defender. Is there a car you would look to?

• 1:58:18Speaker 07

  A Camry or a Subaru? That's how we start.

• 1:58:22Jordi Hays?

  We're rebuilding a 2005 Camry. It was the perfect car.

• 1:58:26John Coogan?

  It was the perfect car. That's amazing. Thank you so much for hopping on.

• 1:58:30Speaker 07

  Awesome.

• 1:58:32Jordi Hays?

  Thanks for jumping on. Cheers.

• 1:58:33John Coogan?

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• 1:58:49Jordi Hays?

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• 1:58:55John Coogan?

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• 1:58:56Jordi Hays?

  I think that's the best thing you could do to differentiate yourself.

• 1:58:59John Coogan?

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• 1:58:59Jordi Hays?

  Anthropic, if you want to break through, you want to break through the noise?

• 1:59:02John Coogan?

  Billboards.

• 1:59:03Jordi Hays?

  Get some consumer downloads on Claude? Billboards. Every billboard.

• 1:59:07John Coogan?

  Every billboard, by the whole.

• 1:59:08Jordi Hays?

  Not just a few. Every billboard.

• 1:59:10John Coogan?

  Let's do it.

• 1:59:10Jordi Hays?

  You have the capital, deploy it. Get aggressive.

• 1:59:13John Coogan?

  Well, speaking of capital, we have venture capitalist Sean Liu from Founders Fund in the studio. Welcome to the stream. How are you doing, Sean?

• 1:59:19Jordi Hays?

  I'm doing well. Let's give it up.

• 1:59:21John Coogan?

  I'm great. Good to see you. We just talked to Grab from Solugen. Is it Solugen?

• 1:59:28Speaker 08

  Solugen.

• 1:59:29John Coogan?

  Solugen. I want to hear your side of the story. How did you initially wind up working there? What did you learn? And then we'll go into some of your venture career.

• 1:59:41Speaker 08

  So I'll start with how I ended up there. It was a reference from NAP and

• 1:59:46John Coogan?

  Oh, cool.

• 1:59:47Speaker 08

  Brian Stambro. I'm kind of like a crazy tech guy that likes capital expenditures. Any company that has tech risk.

• 1:59:55John Coogan?

  Let's get it up with crazy.

• 1:59:57Speaker 08

  The more dollars the better, right?

• 1:59:59John Coogan?

  I love it.

• 2:00:00Speaker 08

  You know, I was thinking about getting my hands dirty with something early, something fun. And Solugen came up, met the guys, loved the vision, loved the team. And it was a hard job. We were small in the middle of COVID and needs help. And I feel like CFO, COO is one of those underappreciated roles. So I took a took a chance on myself and the company and it's been a lot of fun. Second question, what did I learn? I think probably the it's all management theory is bullshit. Any book you read is complete bullshit. You you just you go in and you it's you kind of you learn on the job. And you know, just whatever those advice they give you is all it's all it's all fake news.

• 2:00:44John Coogan?

  Yeah, I mean, what's an example of that? What was the first moment where you were like, oh, this this completely? I got to throw out the playbook on this one.

• 2:00:52Speaker 08

  You know, I think there's there's this whole thing about you got to be nice to your employees. It's just like, hey, the HR gurus and the team is going to tell you, you know, you can't work your employees after 5pm. You're just like, we're a fucking startup. Let's go, right? Like you work on Saturdays, you run you run you run night shifts. There's there's something called a DuPont schedule for a reason. You run 24/7 and factories don't go down just because you need to take a break. So, yeah, I think I think I think it's just setting those like cultural guidelines. And you know, sometimes when you hire people, you hear like. People say, hey, you know, you just, you gotta define your culture as, you know, where we have all these missions and values, which is true at the end of the day for startup.

• 2:01:33Speaker 08

  Do you have the IQ, the grit and the grind to, uh, to, to, to suffer through a marathon? That's a, that's a startup. So it's almost like a different profile.

• 2:01:43John Coogan?

  How, how much of the work at that time was focused on fundraising and kind of educating venture capitalists about underwriting what is kind of a first of its kind company to really go through the Silicon Valley pipeline versus kind of the operational role of the CFO, COO actually deploying the capital?

• 2:02:03Speaker 08

  I, I would say it's, it's, I mean, it's both your, your firefighting every day, every minute. Um, I remember when we joined, there was no one, no one, no one, no one in the company to, to do finance. And, um, we had a really bad head of FP and I fired him after two weeks. So I went to count inventory myself.

• 2:02:22John Coogan?

  Count inventory?

• 2:02:23Speaker 08

  You know, yeah, we, you know, we're not a SaaS company. We gotta, you gotta count inventory. You gotta know what.

• 2:02:28John Coogan?

  That's like barrels.

• 2:02:29Speaker 08

  Your warehouse. So it's, it's important. You gotta know what every piece of the equipment costs. And on the flip side of that, yes, there is a huge, you know, capital makes a difference, right? Cost of capital. We, we haven't had a new chemical startup that scaled, you know, more than 30, 40 years. There's a reason for that. Partially is because there's a tech barrier where R and D is centralized among these petrol giants and they don't really want to release IP. And the second piece of this is cost of capital for startups is so high. You build a factory, probably costs you, you know, 300 million bucks on the low end. We have a revolutionary technology. You still gotta bridge through the valley of death. And, you know, for hard tech, capital intensive business, you have, you have more of them than you typically see in SaaS. So educating them on how to

• 2:03:14Speaker 08

  think about risk and them and many metric capitals, how to think about risk. At what point should you see inflection in value? And what does that actually transcend into? Is, uh, is, you know, I would say is the other half of the battle.

• 2:03:28John Coogan?

  Yeah. On the IP side. Are you like, were you watching for patents to expire and then implement them immediately? Are there other ways around these problems? Like, what was the IP landscape at the time? Are there still like trade secrets that are just important that you could just focus on? Maybe reverse engineering or finding a different pathway? Like, what was that like at the company at the time?

• 2:03:53Speaker 08

  I mean, I think, you know, there it's really interesting. Like, I think patents only get you so far. That's why, you know, if we have faith in patents, China wouldn't be where it is.

• 2:04:05Speaker 08

  But I think, but I think the key, the key is what? I always say if we take a big step back, a lot of the formulation, though, how still sits with the petrol giants? They have a lock-in and they have a lot of resources to continue to be patent trolls. I remember one of the, you know, probably two months of the job, you know, right about when we were about to close it around. One of our competitors sent a assist and this, you know, assist to us. That was like, oh, you stole our formulation. And it's like tiny little variants and something that was complete bullshit. And they can still sue you out of oblivion, right? But I think we've kind of learned over time to, in some ways, you kind of, you do have to fight some of the battles similar to what they do.

• 2:04:46Speaker 08

  You file all these umbrella patents as general as possible to protect your core IP. And on the other side, you kind of have a lot of trade secret that's very difficult to duplicate. But at the core, because how different Solidness approach is to thinking about chemistry and how to scale this, right? It's a generalized enzymatic based platform that, you know, it makes that side of it much easier for us to navigate.

• 2:05:09John Coogan?

  Talked about, talk about the transition to Founders Fund. How'd you wind up there? And then I want to go into some of the deals that you've underwritten and how you think about some of what's going on in the hard tech landscape broadly.

• 2:05:21Speaker 08

  Yeah, it was similarly, you know, I was, you know, my, my family is in the Bay Area. You don't want to start a family. And I was thinking about what are the places where I get to work with the smartest people, building, investing in the craziest things? And still be able to help Solid and founders on transparently with only twice. I couldn't see myself working in any other VC firm. I don't think I fit very well in any other VC firm. And, you know, I'm very grateful that the guys took me under their umbrella.

• 2:05:49John Coogan?

  So obviously, you've you've looked at a lot of hard tech companies at the same time and valuations feel very high. Like, walk me through how you're actually underwriting a growth deal in a somewhat capital intensive business. How is it different than looking at a software company? What what are like the major pitfalls or landmines that you need to be looking at when you're building a investment thesis? And is there anything that's kind of like underrated that most companies or VCs might be missing when they're underwriting these hard tech companies in this like kind of new era?

• 2:06:23Speaker 08

  Yeah, man, it's a it's a broad question you ask, and I think it's a hard one to answer because within hard tech and capital intensity, those are two different things, right?

• 2:06:34John Coogan?

  Sure.

• 2:06:34Speaker 08

  Last year, you know, NAP, me and I did a did a deal in Crusoe, and it's more asset intensive. There's technology involved. But the way we think about something like a Crusoe, which is more of an energy thesis and long term bet on, you know, the infrastructure shifts that's happening in the US, the energy gaps that we see is is quite different than what you typically see in something like a Neuralink or SpaceX, right? Where where where if we take a step back, if you think about what is the technical risks you feel you face? And the first question we always ask is, do we need to invent science? And if you do, then that's a very different question. And very transparently, you know, founder science is in the business of backing revolutionary technologies and companies, right? The and

• 2:07:18Speaker 08

  part is important. So how does this science translate into a company is sometimes missing in those discussions. You see really brilliant technologists building these cool tech and you realize that, you know, if you believe you need five, six, seven new fields of science to all come together and have that to be true, then then we are probably not the right place to be, right? But and then as you kind of progress towards the true like growth stage, are we thinking about scale up risk? So what are we dealing with? Is it like no unknowns or unknown unknowns? And what are what are the different ways of thinking about that? Sometimes when you look at, let's say, a new generation technology, a lot of the question we say, look, the science has proven, we don't need to invent science. Let's look

• 2:08:00Speaker 08

  at what does it take for this to materialize in such a way that we as investors transparently can actually generate a return that makes sense in a timeframe that makes sense, right? And a lot of that hinges on Do you have the supply chain ready? The upstream fuel sources, turbine generators and everything else that's associated with building something like a new generation technology? Can you, do you believe that if you, if you figure this shit out, can the rest of the supply chain also figure this out with you? And a lot of the time, the answer is no. And that makes it that much harder. And the last thing is, I do feel like in most hard tech spaces, founder have a tendency to oversell the technology. And they have a deep found belief that the moment, you know, the technology is mature, people will come.

• 2:08:45Speaker 08

  And that is not true.

• 2:08:46Speaker 07

  Mm hmm.

• 2:08:47Speaker 08

  Right? And I think a lot of the questions I think Trey, Peter, Nap and others ask on the team is, right, like, how are you going to sell this thing? Just because you make it doesn't mean people want to buy it. And I think some of the best investments we've made are, you know, in hard tech are the technology companies that doesn't need to invent science. They're making incremental improvements to scale. They understand the bottlenecks of the supply chain, have a realistic plan to deal with the bottleneck they see. And then lastly, the market is already there, right? If you think about SpaceX launches a market, yes, it's expanded, but they have a really strong anchor to kind of take their, to take market share very quickly. So that commercial mindedness on day one is super important.

• 2:09:24John Coogan?

  Yeah, it's the same thing with Starlink, where people are already buying internet and then they just switch their provider or add on a secondary provider. Uh, Jordy, do you have a question?

• 2:09:32Jordi Hays?

  Do you see hard tech as a category becoming something that goes the way of maybe the creator economy was in 2020, where a lot of, you know, maybe there's opportunities, but a lot of investors get so burned that, um, that it, that it becomes kind of this flash moment in time? Uh, or is it something that you see the average venture capitalist continuing to invest in consistently over the next 10 years?

• 2:09:57John Coogan?

  How skewed is the power law? Because, I mean, if you look at the, the history of like dev tools or like databases, it feels like there's like 10 companies that produce venture returns in most of those categories because a bunch of them got out in IPO, a bunch of them hit multi-billion valuations. It felt less than you're taking all.

• 2:10:14Jordi Hays?

  Yeah, like, there was a point in time where people were saying, I'm going to start investing a lot of money in software as a service. And then those people, if they were decent investors, 10 years later, they still said, I'm going to be, I'm still a software as a service investor. The question I have is like every VC over the last two years decided, I'm also a hard tech investor and I, uh, Rationalizing it by saying you don't need to be technical to invest in hard tech. And there's definitely evidence that that that can be true. But I'm curious if you think the average venture capitalist, even three, four years from now, will still be deploying into broadly hard tech.

• 2:10:58Speaker 08

  Um, you know, history doesn't repeat, but it rhymes. I feel like people don't learn and will continue to do that. I think, you know, what's interesting is we probably see a more, I would say hard tech as a category is probably is a misnomer. I think you'll see more finely parsed views of hard tech. Are you symbio? Are you, you know, biotech pharma? Are you biotech infra, right? Like, I think that that should, that we shouldn't look at hard tech as a category in its totality. Right? I think defense tech historically was grouped in as hard tech. If you look at this, you know, 10 years ago, right? Andro was hard tech today. It's its own category. Sure.

• 2:11:40Speaker 08

  And I do feel like people will continue to to to to invest, right? Like, the nature of technology is is hard tech. They're transparent. All new technology that emerges is hard tech. So you'll continue to see that. But the moment that you create one power law company, you'll see your, you know, the whole host of siblings and children come out and then it becomes its own category and people invest in it. You'll continue to see this, you know, cycle of life and death. Symbio was super hot in 2020, 2021, and I feel like that's now a taboo term. But at the same time, you feel like there's tremendous amount of progress in technology. And I feel like a lot of the company we meet on the AI for science side is pretty much, I would say, the next generation from a fundamental tech perspective, addressing what biology can do. Right? You see a lot of funding going into it.

• 2:12:23Speaker 08

  But but but to reframe your your question another way, how do you see hard tech generating returns for venture capitalists? I think hard tech more than software is de facto power law, right? There's, there's one SpaceX. That's, you know, ninety-nine percent of the market. I mean, space is not a market space in many ways is SpaceX. There's a lot of different derivatives that opened up.

• 2:12:44Speaker 08

  You know, Andro today captures most of the mining share for defense and you see that, you know, in, in, in other parts of the hard tech ecosystems. There's very few pharma companies and they're, when they're, you know, and they're, they're massive in comparison. And I think the reason why I think this is more defensible than, than, than software is because the, you know, you, you do have a huge amount of capital advantage and cost of capital is a huge advantage here. When you're Dow DuPont, you have hundreds of billions of dollars of CapEx on the ground. The marginal cost to produce is so low that there, it's very, very hard for incumbent to come in and displace you. And that's why we feel like there, there, there's fewer power law companies here. But if you bet on the right ones and double down on the right ones, you can create massive venture return.

• 2:13:29John Coogan?

  Do you have an, do you, do you have a take or like a postmortem on what happened when venture capitalists went really big into clean tech? I think this was like the late two thousands, early twenty teens. My kind of naive take on it was that it was well intentioned based on, you know, environmental concerns in many ways. But the category definition was too narrow and so they didn't include Tesla as a clean tech company. Tesla, obviously, if you had included it in the clean tech bucket, would have been the power law winner and driven massive venture returns. But instead Tesla was seen as a car company and as a result, wound up, you know, not being included in that.

• 2:14:11John Coogan?

  And so all the clean tech funds underperformed, just the general software funds. In terms of like, in terms of like category definition and just postmortem on the clean tech, you know, investment thesis that we went through a decade ago, what, what, what's your takeaway from that era?

• 2:14:28Speaker 08

  Yeah. You know, Gorup had this really good saying where he was like, you know, if you're one step too early, you're a genius. Two steps too early, you're a martyr. And I feel like clean tech 1.0 was the martyr category.

• 2:14:44Speaker 08

  It it it's kind of like building Dropbox in the 1990s. You didn't have enough, you know, bandwidth wasn't wasn't high enough. Internet wasn't quite a thing. And in clean tech 1.0, the industrial base is not quite there, right? Polysilicon processing capabilities was not there. And and and and and, you know, the utilities had, you know, the utilities ability to manage nonfirm systems ability is also not there. So there's a whole host of factors that that that kind of made the the cost structure was not competitive. Manufacturing scale up was not there. You need to invent new science to make this work. And you also need to then do sales and marketing to convince consumers as it's actually made sense, right?

• 2:15:26Speaker 08

  And you're also coupling that with selling to utilities, which has capped ROI. So fundamentally, a bad customers was bad setup all around. And and including to your point, like, I think the the pitch of a narrower definition of which is purely focused on generation technology is also, I think, misplaced. Right? Tesla is not a generation technology. It is a car. It's it, you know, you group it with car technology that shifts it. And I think if you think about nuclear today, it is clean technology. I mean, yes, we're rebranding it, but nuclear is the cleanest of all technologies. Right? So I think I think this is this whole wave of how do we think about? How do we think about creating and broadening that definition so that you see where the cleanest,

• 2:16:09Speaker 08

  the clearest commercial pull is coming from is probably more important than the definition of what the technology is or is not. On the flip side of that, too, I think the last generation was highly dependent on government subsidy. Then no, like, if you look at the underwriting, whether it's from the DOE or others, like, all of them assumed certain level of government subsidy that lasted for decades on it, and that just was not going to work. And I think that's important to to, you know, as as we think about investing in hard tech and And you know, a lot of these new technologies, when does a subsidy go away? At what point are you competitive?

• 2:16:39John Coogan?

  Yeah, that reminds me of the story of Solyndra, heavily like a picked winner by the government. And it feels like the Solyndra example in zero to one at least is kind of like, I don't know, I call it like a spreadsheet error. It's like they built their spreadsheet for the economics of that business and they just missed one variable. And it feels like in hard tech, there's a number of companies that are in that category today where it sounds really good in a pitch deck, but once you actually run the economics, if there's one number that's off by, you know, some small factor, you wind up with completely upside down economics. And so in terms of underwriting a hard tech companies, like how important is it to go

• 2:17:22John Coogan?

  through the long-term economics? Is that, are like, do you need to bring in like, like experts or run like the first principles analyses on these companies? I'm just seeing a lot of companies that are like, we're going to do this on the moon or this in space. And I'm just like, oh, if, if launch costs don't fall by 10x like you've assumed, you're completely upside down. That seems like an important part of underwriting or is that usually less of a factor because you're focused on the growth stage?

• 2:17:49Speaker 08

  It's still very important, right? Like I think when we think about that, the question we always debate founders on is what is, how many like need to believes do you have?

• 2:17:58John Coogan?

  Sure.

• 2:17:58Speaker 08

  To make the thesis work?

• 2:18:00John Coogan?

  Yep.

• 2:18:00Speaker 08

  And if you need to believe, you know, if you believe A and B and C by the point like this codependency.

• 2:18:07John Coogan?

  Yep.

• 2:18:07Speaker 08

  You multiply them, you get zero, right? And I think of this very much as like a semiconductor manufacturing process, 7,000 steps, each step has 0.1% yield loss by the end of it, you get no chips out. So, so it's, it's similar like, do you, do you need to believe, you know, to your point, if you, let's take like, you know, some crazy thing like asteroid mining in, you know, Alpha Centauri, do you believe you need to create like nuclear fusion engines, launch costs, you know, robotics? And then you're like, maybe I just back all these company and then wait for that to happen, right? So that's, that, that is a very, very important thing. I think the more and statements there is, the worse it is. And very transparently, we don't like to make those bets, right? Like the cleanest companies are the ones with one or two of these and very much it's,

• 2:18:50Speaker 08

  you're, you don't need to invent science with very little dependencies. You know, when we look at general matter, when you look at Solugen or, or others in our portfolio, you do see that. Neuralink even for that matter is you you don't see that many end statements. A lot of those have been proven out and what we need to understand is really like at what point like what do you need to believe for that to scale? And and and I think I think to your point on like, how do we do due diligence? I mean, yes, I think it's it's that that we do need to understand science. There is a zero one question like, do we do we take on binary risk and where does that exist? And then there is a, you know, going back to founders on roots, what's the what's our view on the founder and how how do we see them in tackling all the risks coming up?

• 2:19:35John Coogan?

  Yeah, and the execution side. Well, thank you so much for joining. This was a fantastic conversation. Would love to have you back. Enjoy the rest of your day and thanks for breaking it down for us.

• 2:19:44Jordi Hays?

  Now, always fun.

• 2:19:45John Coogan?

  Cheers. We'll talk to you soon. See ya. Let's check out. Let's check in on Tyler in the

• 2:19:51Jordi Hays?

  Tyler, he's got the glasses on. You know, that means he's towards final assembly.

• 2:19:57Speaker 02

  Come back to me in maybe fifteen, twenty minutes. I'm I'm I'm almost done.

• 2:20:01John Coogan?

  Okay, almost done, almost done.

• 2:20:02Jordi Hays?

  He's cooking.

• 2:20:03John Coogan?

  That's great.

• 2:20:03Jordi Hays?

  He is cooking.

• 2:20:04John Coogan?

  I think he has another maybe hour in the show. It looks like he's making progress. We'll check in with him at the next break. First, let me talk to you about eight sleep. Get the Pod Five Ultra. How did you sleep last night, Jordy? Use code TBPN if you're gonna get one. They're fantastic. Five year warranty, thirty night risk free trial, risk free returns, free shipping. I got a ninety one. How'd you do, Jordy?

• 2:20:27Jordi Hays?

  I'm sick, so.

• 2:20:28John Coogan?

  Oh, excuses, excuses, excuses. Oh, John beats you one time and all of a sudden the excuses come out. What'd you do? What'd you do? Give us the number.

• 2:20:36Jordi Hays?

  Sorry, the Wi Fi is not working.

• 2:20:38John Coogan?

  Yeah, okay.

• 2:20:39Jordi Hays?

  The number is horrid, sixty, sixty three.

• 2:20:44John Coogan?

  Let's hear it for me.

• 2:20:45Jordi Hays?

  That's maybe the worst.

• 2:20:46John Coogan?

  I feel like I I come out strong in the beginning of the week. I usually beat you Monday, Tuesday, but then you catch up and then you just go on a go on a run. Anyway, get in eight sleep. Go to eight sleep dot com slash TBPN and we will bring in our next guest, Garth from Panthalassa, building a very cool technology. I'll let him tell you about. How are you doing?

• 2:21:05Jordi Hays?

  What's going on?

• 2:21:06John Coogan?

  Hey, guys. Great to meet you. Thanks so much for having me.

• 2:21:08Speaker 09

  I love the show.

• 2:21:09John Coogan?

  I'm really excited to have you. I have heard about your company.

• 2:21:13Jordi Hays?

  The background, what's going on here? Is that, is that real?

• 2:21:16Speaker 09

  Yeah, this is real. We're in Portland, right on the river.

• 2:21:18John Coogan?

  Wow, that's beautiful.

• 2:21:20Jordi Hays?

  It almost looks tropical with how the lighting looks.

• 2:21:22John Coogan?

  Yeah, very cool. And you have the plant inside the window, so that adds to the ambiance. Looking great. Would you mind a quick introduction on you and the company and then we'll go into it?

• 2:21:32Speaker 09

  Yeah, yeah. So, company's called Pantherlasa. We're based in Portland. About eighty people, a lot of people out of places like SpaceX, Blue Origin, Virgin Orbit. It's a deep tech company. Loved the conversation with Sean just now. And, you know, the premise of the company is to go to the middle of the ocean and capture energy there, very cheaply. So, this was an idea that got started nine years ago. I was at Bridgewater Associates, doing investment stuff, but before that I had been doing energy stuff at MIT and working on a startup for energy. And my co-founder had been also looking at the ocean. And we were saying to ourselves, you know, what if you could find an untapped energy source on the planet?

• 2:22:15Speaker 09

  Bigger than many of the ones that people have been going for. And, and maybe more scalable, maybe lower cost of capture. So, the one that really stuck out to us was the open ocean, far from shore. Where there is wind all the time, and the wind makes the waves. And so you can be out there capturing hypothetically what we thought back then was at a very low cost. And, and then you would, you know, use the energy right on site for things. And so, this was sort of of an era before Crusoe, but maybe a similar idea, that you go to where the energy is. And, and we thought that this was really the best place to go, the middle of the ocean.

• 2:23:01Speaker 09

  And so of course, of course, you need to develop a tech stack for that. But there's lots of interesting properties there that you can talk about. And, and what we thought was that maybe you could build a really simple system. Like, you know, a lot of the stuff that's been done in Ocean Energy before was like, pretty complicated and pretty expensive. So we thought that if you could develop a really simple system, then you'd start to get a lot of those, a lot of those properties.

• 2:23:23John Coogan?

  I'm hearing simple and nine years. It sounds like those are some famous last words. You've been grinding on this for a long time. But it sounds like there's, there's actually breakthroughs. I, I saw some photos. You've actually built one of these things. Can you explain how big it is, how much energy it captures, what you're deploying, what the rollout schedule is? Because it's been a lot of work to get here to where you are today. And I want to hear about like where we are before we go into where you're going.

• 2:23:50Speaker 09

  Yeah, yeah, I actually think that that length of time is a really important part of any company that's trying to do deep tech.

• 2:23:56John Coogan?

  Totally.

• 2:23:57Speaker 09

  You know, you want to stay small and under the radar while you're sorting everything out, right? I think that a mistake that a lot of companies make is that they go to market with their first idea or their second idea. And so if you can arrange things so that you can throw things out a lot before you settle on a path. Because the fact is you are going to get it wrong. You're going to need to iterate. And particularly when you're trying to do something where the cost is the key consideration, or if it's space, maybe it's weight. You want to give yourself that time. So, so when I look back on the first four years of that, which was really the heavy R and D time.

• 2:24:37Speaker 09

  I'm extremely glad that we took that time to hone the technology and get it exactly right. And so by the time we got to year five and six, when we were deploying Ocean Systems, we were right on the money in terms of power. You know, we were hitting all of our simulations right away. And it comes from the simplicity of the system where what we decided was that you want a system that is no moving parts at all. Except for one small water turbine. So these systems, we call them nodes. They're about 10 up to 20 meters across at the top. And they go down into the water column about 80 meters, maybe 100 meters for full scale ones. So, so big systems, but pretty small in the scale of things like shipbuilding.

• 2:25:19Speaker 09

  So this is sort of the shape of one of them here. It's a, you know, and it sits in the water like this. And it goes up and down with the waves. And all of the dynamics are coming from the inertia of water within that system. And as the system goes up and down, it pumps the water into a reservoir, just like a hydroelectric dam. And then from there, it drives a water turbine. So it's a really simple method of operation. And once you have that, you can simulate it effectively, and it's really easy to mass produce as well.

• 2:25:48John Coogan?

  So you keep saying, you keep saying simple, and I'm looking at your website, and it's like the most complicated thing I've ever seen. But I mean, it speaks to, it speaks to your background and how ambitious this project is, but I keep thinking you're really This is simple stuff, John. Yeah, yeah, it's simple. Get with it. Just, just weld and build this massive thing. And there's all this wiring, and we're pulling up your website right now, and it's fantastic. I mean, congratulations, it's amazing. I want to know more about the applications. How much energy are we, are we generating with one of these? And then, and then I want to go into some of the applications, because it feels like you could not have possibly predicted the reinforcement learning revolution that's

• 2:26:29John Coogan?

  happening right now, the ability to do distributed AI training and, and where, like, it is the perfect time for this thing. And maybe you just made your own luck, but I want to know about the evolution of the application, the stranded energy thesis, and kind of the, like, the scale of what we're thinking about doing here.

• 2:26:47Speaker 09

  Yeah, yeah, great. So each one of these systems makes anywhere from 200 kilowatts to a megawatt. So you can build anywhere in that scale.

• 2:26:55John Coogan?

  Got it.

• 2:26:56Speaker 09

  And, you know, when we got going, it was interesting, because, you know, obviously, we were jettisoning the cables back to shore and the moorings and all of that stuff. And we said to ourselves, you know, this was back in 2017 or so, what are the applications for which this can be very effective? And we decided on two platforms. One is computing, and that's the primary and first platform. And then the other is making synthetic fuels and getting the fuels back to shore. But if you look at our patent And everything back from 2017, 2018, you know, we have, we have a whole bunch of them on computing.

• 2:27:36Speaker 09

  And, you know, every, back then, we were thinking about AI, you know, often in the patents, we would call things brain simulations. We had AI brain simulation crypto.

• 2:27:45John Coogan?

  Sure, probably Bitcoin at a certain point, Crusoe was doing the same thing.

• 2:27:48Speaker 09

  Yeah, exactly. And, you know, I had been at Bridgewater, I'd been doing AI stuff with Dave Ferrucci there. You could see even at that time where this was going. You could see it in the exponential growth of energy. You could see it in the growing power of the models even then, you know, this is when AlphaGo was happening. So, you know, you could sort of put two and two together. And what we believe, of course, is that, you know, this is going to 100 gigawatt scale, terawatt scale. And there's not that many options on the planet for making that go really fast, at least if you're not doing something like coal in China. So, so we are positioning ourselves to be an option that can scale really rapidly, much, much more rapidly than terrestrial infrastructure.

• 2:28:30Speaker 09

  And, and that's, that's really the whole play. We want it to be, you know, more sustainable, more affordable, it's much cheaper. And be able to scale to much larger levels even than, you know, than most terrestrial infrastructure could.

• 2:28:43John Coogan?

  Got it. So, uh, one, uh, you, you said up to one megawatt, is that right?

• 2:28:48Speaker 09

  Yeah, yes. The, the nominal system might be 400 kilowatts, but you can go larger than that.

• 2:28:53John Coogan?

  So, like, how, how big of a, are you thinking, like, it's basically a data center inside? Like, you could put a whole bunch of H200s, maybe get up to like a few thousand, maybe? Is that roughly correct?

• 2:29:04Speaker 09

  Yeah, exactly. Like a few hundred, uh, up to a thousand GPU equivalents.

• 2:29:09John Coogan?

  And there's enough room in that, in that device to actually run. Yeah, I mean, that's amazing. So, um, what, what are you, uh, what are you tracking in the, in the reinforcement, learning, training, market? Is that important because you're at this point where you're actually going to market? And, and will it even, like, are there specific decisions that you may need to make on the equipment that you load onto these machines? Or, uh, or are you trying to serve the GPU capacity or, or your data center capacity at like a higher level of abstraction?

• 2:29:43Speaker 09

  Exactly. So those are the sort of questions about the go-to-market. But as you identified, there's the massive push towards test time compute, just tons of long-running inference.

• 2:29:55John Coogan?

  Yep.

• 2:29:56Speaker 09

  Agentic workflows all the time, combined with, yeah, I mean, we think it's going to be mostly RL on the training side, you know, and I mean, I'm sure you had people on last week and you saw this, I mean, analysis thing drop.

• 2:30:07John Coogan?

  Yep, it was great.

• 2:30:08Speaker 09

  Yesterday. But yeah, I mean, you could sort of put it together even when you had Alpha go back in the day of like, you put together LLMs with reinforcement learning, you get very powerful models. So the future is largely about who can deploy the most RL. And then, once people really start to use this, you know, we think it's going to move to all kinds of applications beyond tech. You know, this has to move to engineering, it has to move to medicine, and you're going to want to have agents working together around the clock. So you have long-running inference. And basically, what this all comes down to is you want the cheapest throughput for tokens.

• 2:30:47John Coogan?

  Yeah.

• 2:30:47Speaker 09

  And so what we're targeting is that long tail of very massive horizontal scaling of distributed energy units. And that's what we think our platform can be.

• 2:30:59Jordi Hays?

  How, over time, would somebody live on one of these systems? Would they visit it frequently?

• 2:31:05John Coogan?

  I was gonna ask the exact question.

• 2:31:06Jordi Hays?

  We had Dylan Patel on last week, and he said, one of the challenges with putting data centers in space is that chips are unreliable. Sometimes you need to like, plug, you know, basically, unplug a system, plug it back in.

• 2:31:18John Coogan?

  It's the meme. It's the IT meme. Unplug and plug it back in.

• 2:31:21Jordi Hays?

  Basically, you know, even with cheap energy, the IT work will still be necessary. So I'm wondering, is one person going to be responsible for a number of these systems? And they sort of visit them and make sure they're operating efficiently, or?

• 2:31:35John Coogan?

  There's probably other solutions to top of full tolerance.

• 2:31:38Jordi Hays?

  Yeah, and I can imagine you're building like, some type of like gyroscopic tech to kind of keep the system stable when they're, you know, shifting up and down.

• 2:31:45John Coogan?

  That doesn't even matter. I don't know.

• 2:31:46Jordi Hays?

  Yeah, but I'm curious.

• 2:31:48Speaker 09

  It's really important. So this is part of the tech. So you not only need a way to produce the power onboard really simply and cheaply, you also need to be able to drive them around. So these are self-propelled systems. And they're self-propelled without things like propellers. So they create their own thrust just because of their shape. So we've done trials where we're driving these things in figure eights out there. And it's all happening just because of the shape of the system.

• 2:32:14John Coogan?

  Wow.

• 2:32:15Speaker 09

  And what that allows you to do is now this is sort of like SpaceX boosters coming back. You can deploy the systems relatively close to shore. They work their way out into the resource. They hang out for a period of time capturing energy. And, you know, maybe it's three years, maybe it's five years. When it's time for a payload swap, they bring themselves back in and then you swap the payload.

• 2:32:34John Coogan?

  That's remarkable.

• 2:32:35Speaker 09

  So you can configure that, yeah, you can configure the payload swap time for whatever you need to get the numbers, you know, for the meantime between failure on your payloads.

• 2:32:44John Coogan?

  Yep.

• 2:32:45Speaker 09

  And at the beginning, I'm sure we'll start with the most reliable stuff. And then as we get into worlds of inference ASICs and stuff like that, that are, you know, more reliable than the GPUs, then we start deploying those as well.

• 2:32:56John Coogan?

  Yeah, that makes sense. Are there, are there lessons that you're learning from like the Bitcoin ASIC era?

• 2:33:05John Coogan?

  Like other kind of out of the box stranded energy projects? Crusoe was kind of widely known for the, I think it was gas beaker plants initially, but obviously those are very much terrestrial. You can just drive the ATV or the truck out to them to check on them. What have you seen or learned from the more, the more creative energy solutions to the Bitcoin ASIC problem?

• 2:33:34Speaker 09

  Well, I mean, I think the big theme, of course, is everyone shifting towards AI energy. Just because the, the amount of demand that's coming is enormous. Bitcoin is, you know, Bitcoin is always going to be there as a fallback for anyone who's got very cheap energy. Onboard our systems will have, you know, between two and three cents per kilowatt hour, probably less in the future. So that's always an option for us.

• 2:33:59John Coogan?

  Sure.

• 2:34:00Speaker 09

  But I think that, you know, as As people look at this, it becomes clear that the model layer will become more commoditized. I think there's a lot of comparative advantage there for a long time. Chip layer too, but the fundamental bottleneck is going to be who can scale tens of gigawatts per year or even 50 gigawatts per year. You know, that's a really hard thing to do in the West. Obviously, we've been doing net zero gigawatts per year for a long time. So if we don't relax that constraint, then you get prices going up. And that becomes a major impediment to the build out.

• 2:34:37John Coogan?

  I mean, so the device already is massive. If we're adding a gigawatt, you're talking about making a thousand of these. Walk me through the actual manufacturing, how you scale that up to go from, you know, kind of one exquisite system to making dozens of these every month, every day. Like the rollout needs to be intense. I'm sure there's a lot that you're learning from what's going on at SpaceX and how quickly they've made those massive starship rockets. It always surprises me when there's a new one on the pad because I watched it blow up just a few days ago and they have a new one ready. And it really speaks to their ability to manufacture something at scale, both in terms of speed and just the size.

• 2:35:21John Coogan?

  You know, it's one thing when you see the Statue of Liberty. They built that once. But it's a different thing when you see a new Statue of Liberty come off the manufacturing line every single day. So what needs to change at your company in terms of process? What are the requirements to make big things fast and regularly?

• 2:35:39Speaker 09

  Yeah, so this comes back to the design of the system. So it's, the system is just this really simple steel shell. It's like entirely hollow inside.

• 2:35:48John Coogan?

  Sure.

• 2:35:48Speaker 09

  And it's made with mild steel. It's got this axysymmetric shape so that there's a central axis and all of, the whole system is built around that central axis. So that allows you to use equipment that lets you make these concentric shapes, put them together, weld them really simply. In a lot of ways, I mean, I keep saying simple, but in a lot of ways, it's actually simpler than a car.

• 2:36:06John Coogan?

  Oh, interesting.

• 2:36:07Speaker 09

  And, you know, this just comes back to the design of it. But what we can go and do, because it's that way, is we can cost all of the CapEx that you need in a factory for these things. We know how many people will be involved. We know how much land it'll take up. And even now, we can say that, look, if we were to go and build a factory of a certain CapEx investment, you know, let's say you built a factory at the scale of a giga factory in terms of cost, how many gigawatts would that spit out? And for example, we know that if we built factories with the amount of CapEx that Tesla has put into giga factories, we'd be spitting out 20 gigawatts a year of capacity. So the manufacturing story is really nice. These are still small enough to like mass produce.

• 2:36:51Speaker 09

  It's not shipbuilding. And it's not people crawling all over them. It's things that you can, to a large extent, automate. So we're actually building our first pilot line here in the Pacific Northwest. Parts of it will be operational in January, and the whole thing should be operational later in the spring. And then, once that's going, then we can really start to carve and copy that elsewhere.

• 2:37:11Jordi Hays?

  Yeah. It looks and feels so like it's out of a science fiction book.

• 2:37:17John Coogan?

  It really, it really does. It's extremely sci-fi. How do you actually make these shells? Like, you know, Tesla has like the giga press or something like that that can form aluminum or stainless steel into a particular shape. Once you get so big, I don't even know. Is there a bigger machine that just kind of will stamp these things together? Do they have to be bent or rolled out of some sort of, is it, what, is it a mold? I don't even know how it gets made.

• 2:37:42Speaker 09

  Yeah, yeah. So if you're using mild steel, the key thing is to keep the surfaces single curvature as much as possible. So you get to use just like plate rolls. And basically, they're like big pasta rolls that make, you know, cylindrical shapes and then conical shapes. And that's just, you know, it's just some metal rolls and you push the metal through and it comes out in the right shape. Then you can put that into your jig or put that into your, what's called a growing line configuration that lets you align them and then use an automated welding head to weld them. So luckily, a lot of this stuff has been developed. It's, it's pretty well understood. They use it for like wind turbine monopiles. They use it for other axi symmetric shapes like that. So we get to piggyback, you know, sort of piggyback on a lot of the same stuff.

• 2:38:27John Coogan?

  Oh, that makes sense. Yeah, it does kind of have the same shape as like one of those massive wind turbines. The huge windmills that you see. I mean, it's a fantastic project. It's so fascinating to be working in this industry. I'm sure tons of lessons learned and a lot more good stuff in the future, but thank you so much for stopping by. This is fantastic.

• 2:38:44Jordi Hays?

  Yeah, we're gonna, our, our power demands are pretty, pretty immense.

• 2:38:49John Coogan?

  We're gonna need to be doing a lot of reinforcement.

• 2:38:52Jordi Hays?

  Expect us to fill out the form on the site to get one of these ASAP.

• 2:38:57Speaker 09

  Yeah, awesome, awesome. Well, we'll come back on when we're, when we're kicking out those first nodes from this, from this factory here.

• 2:39:04John Coogan?

  I can't wait. Thank you so much.

• 2:39:05Jordi Hays?

  Awesome. Thanks for joining Garth. Have a great one.

• 2:39:09John Coogan?

  We have our next guest coming in. Yeah, it's a wild project.

• 2:39:12Jordi Hays?

  Just the imagery of seeing people like, you know, just climbing on top of it. You don't really realize the scale.

• 2:39:20John Coogan?

  It's simple. It's simple. It's just, it's a small little thing. Really downplaying the size of the thing. Massive. I love it. Anyway, if you're heading to Antarctica or, you know, anywhere else to travel the world, go take advantage of some low cost energy across the globe. Book a wander. Find your happy place.

• 2:39:41Jordi Hays?

  Find your happy place.

• 2:39:43John Coogan?

  Book a wander with inspiring views.

• 2:39:44Jordi Hays?

  Gold Retrievers joined it.

• 2:39:45John Coogan?

  It's fantastic. Hotel-grade amenities, dreamy beds, top-tier cleaning, 24/7 concierge service. It's a vacation home, but better, folks. Use code TBPN when you sign up.

• 2:39:54Jordi Hays?

  Do it.

• 2:39:55John Coogan?

  Our next guest is coming in to the studio from Divergent 3D, talking about manufacturing plans. They have a very cool partnership with Palantir, and I wanted to talk to Lucas. So, welcome to the studio. How are you doing?

• 2:40:06Lukas Czinger?

  Doing great. How are you, gentlemen?

• 2:40:08John Coogan?

  We're great.

• 2:40:09Jordi Hays?

  What's going on? What do we have in front of us?

• 2:40:11Lukas Czinger?

  So, you're looking at the airframe for an autonomous aircraft system. So, about a six-foot-long, fully autonomous, 3D-printed structure. And if you look in the tail and on inside, you see a little bit about Divergent, which is full functional integration of these airframes to make them faster, better, and cheaper.

• 2:40:30Jordi Hays?

  Wow. It looks very cool. And the background is obviously green screen, right?

• 2:40:36Lukas Czinger?

  That is our factory. That is Torrance, Los Angeles for you. So that is one of four buildings on this campus. This is where we manufacture at volume for aerospace and defense and the auto industry.

• 2:40:48John Coogan?

  Very, very cool.

• 2:40:49Lukas Czinger?

  Awesome.

• 2:40:49John Coogan?

  Um, yeah, what, who are some of your customers? Any of a partnership palantir now? Can you explain kind of the business in, in, in kind of basic terms and then we'll kind of work through it?

• 2:40:59Lukas Czinger?

  Yeah, absolutely. Customers are really OEMs, so really top automakers like Ferrari, McLaren, Bugatti. Uh, and then primary focus is aerospace and defense, uh, which are really all the large primes. Uh, Lockheed Martin, Raytheon, General Atomics and others. Uh, and the smaller up and comers and the larger up and comers like, uh, the Androles of the world and Castilians are also, uh, customers of Divergent. And what we have built over the last decade is a ground up platform for engineering and manufacturing. So I want to be very clear, this was a deep tech startup. It required over a billion dollars to build, uh, the system.

• 2:41:43Lukas Czinger?

  We've got over 750 patents on it. Uh, it's not just, uh, uh, a quick manufacture and play roll up strategy. This is really about creating a design differentiation in terms of how quickly you can create performant CAD. Let's call it an airframe, the CAD for an airframe. Can you do that in a week instead of a year and a half? And then how do you manufacture what you've created? And we've created both the source code for that design engine. And then we've created a manufacturing process that stitches together our own version of additive manufacturing, 3D metal printing and robotic fixtureless assembly, which allows us to do something, uh, extraordinary, which is have a factory which is product agnostic.

• 2:42:27Lukas Czinger?

  So you're looking at a installed factory base that can go from making an airframe for a Lockheed Martin to a large unmanned aircraft system for Raytheon to a production vehicle chassis for Ferrari. Back to back to back with no hardware change whatsoever. And that is a new principle, that is a new reality where you are combining cost productivity of mass manufacturing, industrial manufacturing with the flexibility of what was first thought of as fast prototyping.

• 2:43:00Lukas Czinger?

  Really taking those two principles into one system, that's a divergent system. We've now scaled to over 18 contracts, really all heading towards programs of record. And to be clear, we're not a prime ourselves, we are a subcontractor to these primes. What we are building is the manufacturing layer and the engineering layer that all of these programs really require to hit the scale that the US needs to compete with our adversaries and to create the deterrence that we need in terms of our inventories and our capabilities.

• 2:43:35John Coogan?

  Yeah, we've talked to a couple of people about this, this transition from additive manufacturing, from a test environment to actual production. Does that mean that like traditional subtractive manufacturing doesn't play a role in the, in the parts or, or airframes that you design? Or do you work with other subcontractors to bring in more traditional workflows to augment what you're actually making so that you're just kind of using the right tool for the job at any moment? Or, or is there some benefit to being like a pure play in, in additive manufacturing?

• 2:44:06Lukas Czinger?

  Yeah, I'd say that the realities of additive manufacturing costs have changed dramatically. When we started eight years ago, you were not cost productive in the additive space. Today, we're actually cheaper than the caster machine alternative. So yes, you're able to make these very advanced geometries, but you're actually coming in at a dollar per kilogram point that is more affordable for the prime, the taxpayer, the government than the traditional alternative. Where we see the most value is when we can take design authority for the entire, say, end-to-end missile structure, start with the requirements, what is the CFD? What are the load cases? Where are the hard points to the other subsystems? And then engineer that from scratch.

• 2:44:47Lukas Czinger?

  That's where we can use high-performance computing, generative design, and essentially optimize across all variables in one cohesive full design package. And that then becomes a 100% additive structure that is assembled with that robotic system.

• 2:45:04Lukas Czinger?

  Are there other systems that end up in these vehicles? Yes, but you're talking electronics, you're talking the payload itself, you're talking about the turbojet or the propulsion source. Typically, when we're looking at structure, we're 100% additive and we're able to outperform anything that would be cast or machined from a performance standpoint, say 30% lighter, well meeting requirements, but more importantly, in a lot of cases, 30% cheaper while being able to make 1,000 or 10,000 per year. To give you some context, one of our 3D printers can manufacture about 400 large-scale munition casings per year. So imagine 100 printers running, you're able to do 40,000 munitions per year.

• 2:45:49Lukas Czinger?

  And 100 printers running is not a unrealistic installed base. We're running tens of machines already today, and that is what the US government also sees as critical for the US. Can we create a civil reserve manufacturing network, a connected set of next-generation facilities that can create these munitions at volume? Because to cut it very, very clear, you look at our legacy programs like Tomahawk, JASM, they're not able to hit the rates that are required by our warfighters, by our leaders, by individuals like Admiral Pappara, who are closest to the problem. And why are they not able to hit those rates? Partially because they cannot get the structure.

• 2:46:30Lukas Czinger?

  They cannot get the castings at the volumes required, at the quality point, at the geometry that's required. We come in and we solve that in a very dramatic way.

• 2:46:39John Coogan?

  Can you talk to me about some of the history and kind of developmental breakthroughs in additive manufacturing? I'm sure there's some stuff that's happened just in the industry broadly, maybe even academic papers, or different pieces of the supply chain that have kind of unlocked what you're doing, it allowed it to scale. Stuff like what's going on in the alloy space and or deeper in the supply chain with parts that go into machines or machines that you're able to buy now? Give me kind of the lay of the land, because it feels like we're in a kind of Moore's Law moment for this particular technology. You've obviously built a huge business around it, but what else is driving that upstream?

• 2:47:20Lukas Czinger?

  Oh, absolutely. Additive manufacturing, it's no secret now that it's going to be supporting the structures in our programs of record. And a decade ago, it was thought of more as an R and D technology. So the industry has moved with us on that. At the same time, Divergent is very differentiated in the cost productivity. We built our own 3D printer. So we use our own machine. We built our own materials. So aluminum alloys, the refractory alloys that we print with, those are designed by our material scientists. The machine is designed by our engineers and we actually integrate that machine in-house. So we build it in-house with a US-based supply chain. That machine is 10x the cost productivity of its nearest peer. So even though the industry has moved forward as well, Divergent has led

• 2:48:04Lukas Czinger?

  a lot of that movement forward, and now it is printing on a machine that is able to be 3x the rate while being a third of the cost. So a 10x improvement to its near peer. In terms of talking about some of the advancements, when we started, we were printing on single laser systems. So you're talking about powder bed fusion. You've got a powdered metallic on the bottom of the build chamber, got a laser overhead. You're going to melt one layer at a time of this part and build it like a layer cake. We're now at a 12 laser system. So we've gone from one laser to 12. We're under 1 kilowatt per laser. Now we're north of 2.5 kilowatts per laser. So the amount of energy in this system, the size of the build chamber, the layer height, the speed of our recoding, the speed of our gas

• 2:48:47Lukas Czinger?

  flow across that chamber, our automated build plate loading and unloading has essentially multiplied the rate by more than 20x over the last eight years.

• 2:48:58Jordi Hays?

  You guys developed your own hypercar. What would be the right time for us to start exploring, developing a TBPN hypercar, given that you just went through the process yourself?

• 2:49:10Lukas Czinger?

  You know, if you have a dream and you've got the capital, pick up the phone, call us and we can help with it. That's what I'll say. But Zinger Vehicles, on a more serious note, really that was about creating a product to create the ultimate tools. And then we created a business out of it. But early on, we said, if we're going to make the best design software, the best materials, the best 3D printer, a real assembly system, you have to create a product and you have to test that product tens, if not hundreds of times. And how else are you going to do that? You're not going to do that with a customer. You're not going to get your iteration. You're not going to get the feedback loop fast enough. We had to print thousands of parts and essentially get it wrong for our first two, three years before we really started to get it right.

• 2:49:55Lukas Czinger?

  And then Zinger gave us the systems engineering knowledge, the road data, the branding ability of our own product, taught us about heat exchange, taught us about propulsion. We developed that V8 engine from scratch. We print a lot of that V8 engine. California carbon emissions compliant, fully crash certified. That vehicle is tremendous feedback into Divergent Tools. And now in its own right, it's become a brand. It's the only vertically integrated hypercar OEM in America. And we just delivered our first handful of cars. They're the fastest road legal car in the world now. And there's a reason for that. It's because it's built on a new technology. It is a different chassis that is in that vehicle than any other vehicle on the road.

• 2:50:40Jordi Hays?

  Did you get any angry calls from some of your customers for just absolutely mugging them? It's like, hey, we've been doing this for coming up on 100 years. We're excited to be a customer, but like, we would appreciate if you didn't just outperform us on every possible level and do it with a fraction of the budget and the talent and the time.

• 2:50:59Lukas Czinger?

  Hey, it's motivation, right? You take that car to the track and you know who you're running against. The engineers are there and they see that and then they go to their executives and they say, we gotta use Divergent to engineer the chassis and manufacture the parts. We gotta do it or we're not going to be competitive. And at the same time, we love competition and so do they. You know, our chief commercial officer, George Biggs, he used to be the head of sales and marketing at McLaren. Right? So people are clearly betting on Zinger Vehicles as the up and comer in the hypercar space that can truly become the performance car company. In the US, but to us, competition is a good thing. We're not shy about it. We like to show our customers what can be done. And even if they are, you know, see the competition in

• 2:51:43Lukas Czinger?

  it, at the end of the day, they want to make the best product. And if you're giving them the best pricing and the best ability to make that great product, they're going to want to be your customer.

• 2:51:51Jordi Hays?

  You guys might be the most real hard tech company of all time. Not, not like you being like, oh, we simultaneously are working with like, some of the biggest, most important companies in the world from luxury automotive to defense. And then we also on the side for fun and to just prove, we made a real hypercar that you can actually drive and take on the track. Yeah, the, the, the car itself looks like it's just like a concept car. It's the kind of thing that other manufacturers will put out as a concept car. And then fans will see and they'll be like, well, this thing's never going to exist. So I'm not even going to be that excited about it.

• 2:52:28John Coogan?

  Clearly a no render respector. Yeah.

• 2:52:31Lukas Czinger?

  Yeah, no, it's a, it's a tremendous design. And the truth of that vehicle is it represents those 750 patents. Everything about it, the way it's packaged, the way it's engineered, its power density, its seating layout, its aero philosophy. All those differences come from the technology it utilizes as well.

• 2:52:51John Coogan?

  That's amazing. Amazing. Thank you so much for coming on. We would love to have you back. We can go way deeper.

• 2:52:55Jordi Hays?

  And to be clear, we've got a lot of space on the studio. If you want to park one of those cars.

• 2:53:01John Coogan?

  If you need a parking spot.

• 2:53:02Jordi Hays?

  Here, we got, it's gated, we got security, it'll be safe. We're happy to keep it here in the background.

• 2:53:08Lukas Czinger?

  Come to sunny Los Angeles and go for it.

• 2:53:10Jordi Hays?

  No, we're here, we're here.

• 2:53:11John Coogan?

  We're in Hollywood.

• 2:53:12Lukas Czinger?

  Oh, you're here?

• 2:53:13John Coogan?

  Yeah, we'll have to come down.

• 2:53:14Jordi Hays?

  Drive it over.

• 2:53:15Lukas Czinger?

  All right. We will bring it over and you got to come see the factory as well. Come see the missiles and various structures.

• 2:53:20John Coogan?

  That sounds fantastic. Thank you so much for hopping on Lucas. This was fantastic.

• 2:53:24Lukas Czinger?

  Cheers.

• 2:53:25John Coogan?

  We'll talk to you soon. Bye. Really quickly, what do you, what do you need? If you got a hypercar, you need a watch, go to getbezel.com. Your bezel concierge is available to source you any watch on the planet.

• 2:53:36Jordi Hays?

  Their next challenge, make a watch that's so significant.

• 2:53:39John Coogan?

  A tourbillon with 75 complications.

• 2:53:42Jordi Hays?

  Will accept it.

• 2:53:43John Coogan?

  I want to see it. Next up, we have Christian from Astralis coming in the studio. Welcome to the stream, Christian. You're technically your second appearance, second appearance, because he was in the background.

• 2:53:55Jordi Hays?

  I'm gonna hit the gong, I'm gonna hit the gong for Christian, just because I like you.

• 2:53:59John Coogan?

  Hit the gong, welcome to the show.

• 2:54:08Speaker 11

  The top-down shot of the gong is absolutely, it's just like top-notch, guys.

• 2:54:12John Coogan?

  1% better every day. Uh, your camera looks fantastic, the lighting looks fantastic, it's very cinematic.

• 2:54:18Jordi Hays?

  Insane, honestly.

• 2:54:19Speaker 11

  Courtesy of Jason Carmen.

• 2:54:21John Coogan?

  Yes, I know.

• 2:54:22Speaker 11

  The guy who set up the original Astronis marketing team, got us all hooked up, got us the right gear.

• 2:54:27John Coogan?

  Yep.

• 2:54:28Speaker 11

  Set us on the right path.

• 2:54:29John Coogan?

  Yeah, it's great.

• 2:54:29Jordi Hays?

  And the green, the green screen that, you know, AI-generated background.

• 2:54:33John Coogan?

  Yeah, it's really, really top-notch.

• 2:54:35Speaker 11

  This is actually, so this is gonna be YC demo day, so they're setting up right now. For like our main area, they're gonna put YC, because they're right across the street, you know.

• 2:54:42John Coogan?

  Oh, very cool.

• 2:54:43Speaker 11

  The demo day is gonna be like right back there, they set up all day yesterday, yeah.

• 2:54:46John Coogan?

  Well, we'll see on Wednesday, we're heading up.

• 2:54:48Jordi Hays?

  We'll be there.

• 2:54:49Speaker 11

  Oh, nice.

• 2:54:49John Coogan?

  Yeah.

• 2:54:50Jordi Hays?

  Grenze.

• 2:54:50John Coogan?

  Uh, yeah, so I mean, we have a lot to talk about, we'd love to just get the, the intro and update from you, and then I wanna go into, uh, the, the, where we are on the relentless march to create the ultimate, uh, hard tech, uh, vibrio at some point. But first, you, you, give me the little update on your side, how are things going?

• 2:55:08Speaker 11

  Yeah, things are going really good, it's exciting time for Astronis, so we build small satellites for high orbits, and it seems like the rest of the world is sort of catching on to this being a thing. Um, we've been trucking away for 10 years at this idea, and over those 10 years, you know, we've built a big commercial business, we launched four satellites at the end of last year, those are getting close, really close to their slot to actually start providing service, uh, all over the world. We have five more that are in the factory, um, but then the big, I mean, the real big update, we have a bunch of government contracts that are really starting to take real flight. Um, so it's everything from just normal communications for the government mission, you know, like same thing out in geostationary orbit dedicated to one spot on Earth. But then also, we have this new mission, which is resilient GPS, which is super cool.

• 2:55:50Speaker 11

  I think John talked about that last time I was on, just saying, you know, we wanna take GPS, break it apart into many smaller satellites to make it more resilient and less able for adversaries to take it down or jam us.

• 2:56:00John Coogan?

  Yeah, because there's a ton of GPS denial and jamming that's going on all over the world now, since unfortunately there seems to be a battlefield on every continent at this point. But that's very exciting. Talk to me about startup vibreals. What's been interesting to you? What's been your favorite?

• 2:56:15Jordi Hays?

  Are we in the post-vibreal era?

• 2:56:17John Coogan?

  Have we peaked?

• 2:56:18Speaker 11

  Yeah, we might be, man.

• 2:56:19John Coogan?

  Have we peaked? Yeah, I really liked the one from ZipLine was cool. I thought that they did like when like the solar punk vibe felt very different. But what do you see and what do you like in these days?

• 2:56:29Speaker 11

  Yeah, it's really interesting because you see these companies that have not raised very much money at all, putting like presumably like tens or hundreds of thousands of dollars into a vibreal to announce them. Like I don't, I don't dislike, I mean, I kind of love it, but at the same time.

• 2:56:40John Coogan?

  We would never do something like that. Launching a vibreal early in our, that's ridiculous.

• 2:56:46Jordi Hays?

  Well, to our credit, to the credit for the first, the first, the first vibreal cost us like $2,000.

• 2:56:52Speaker 11

  Exactly. Okay. So this is, this is exactly my point that you can tell when you look at some of these vibreals, how much money they cost to produce and you can tell that they weren't done in-house. And I think that makes a big difference. Like if you're a company that's doing your own comps, like you guys are just like, whatever, renting a car, that was probably your biggest expense. I don't know. You make it yourself, like an internal thing, totally different vibe than like we hired a company. We paid hundreds of thousands of dollars because we want to impress you. Like you can just kind of feel that coming off of the screen when it's not made in-house, not organic. And that's, that's more what I object to than the like, you know, just making things look nice. There's nothing wrong with making things look nice as long as you're doing it authentically and you're doing it yourself.

• 2:57:29John Coogan?

  So best practices for vibreals for hard tech companies. Give me, what is innovative right now?

• 2:57:37Speaker 11

  So I think that, so what we are shifting to is just more authenticity, more showing, less telling. So we are building, we just launched a new Astralis manufacturing channel. It's pretty sick actually. Basically, instead of it being like, you know, two dudes yapping away and just like talking about how great their company is, which is like the majority of startup comps these days. And like, you know, the founder sits down in the chair and it's like the big dramatic opening shot.

• 2:58:01Speaker 11

  That's one end of the spectrum. On the other end of the spectrum is an hour long video of just cutting metal. And that's what we're trying to do with our Astralis manufacturing channel. So we just, we've launched like two or three videos, long form videos and a bunch of shorts that are more vibey and like get people into the channel. And it's going really well. It's pretty sweet. We're getting, you know, tens of thousands of views on those first videos on a brand new, clean channel, which is what you want to see, getting some good traction.

• 2:58:22John Coogan?

  Totally.

• 2:58:22Speaker 11

  But I think you think they were sort of like beyond the like talking, talking head like, uh, wouldn't like, oh, wow. Look, the CEO is going to talk to like, I don't know. That's not that exciting anymore.

• 2:58:33John Coogan?

  Yeah, I mean, there's a lot of companies that will like open source software packages, but there's something that's almost like higher leverage about just like, hey, we have this engineer who really understands how to use this one machine. Like, uh, let's just put out a video of them talking about best practices for this. It's going to be super niche, but like that community

• 2:58:50Jordi Hays?

  Can be massive from a talent standpoint.

• 2:58:52John Coogan?

  And from a talent's perspective, exactly. Uh, so yeah, yeah, yeah, that's very exciting. Uh, uh, Jordy, anything? Uh, cause I want to know, uh, what?

• 2:59:01Speaker 11

  Well, I will say on the, on this topic, we just had an event here yesterday or Saturday. Um, that was pretty sweet. We had a bunch of manufacturing people from San Francisco all come to the office and like meet in person. From like a talent perspective, yeah, like selfishly, we had a lot of really amazing machinists and manufacturing engineers and stuff like come check us out. But really it was just to like build a community of these folks in San Francisco. So, I mean, people often as astronomers, they like, don't even believe me when I say that we're building satellites in San Francisco. They're like, they're like, okay, but yeah, but like, where do you build them? Like, like, what do you actually like? Like, no, it's like literally down the hall from where I'm sitting right now is where we build our satellites. But, um, you know, it's cool to get that community together of San Francisco people. There is manufacturing in San Francisco.

• 2:59:40John Coogan?

  It is crazy.

• 2:59:41Jordi Hays?

  Yeah. What are you expecting on the hard tech, uh, side from this year's YC batch? I'm sure you've had a little bit of a, of a preview. Uh, we're headed over there, uh, uh, tomorrow, uh, for demo day on Wednesday.

• 2:59:55Speaker 11

  No, it's going to be sweet. I mean, I think that, uh, Coogan, didn't you tweet this last time? You were like, uh, out is Uber for eggs and in is like Andorl for dog walking or something?

• 3:00:04John Coogan?

  Out is, is, yeah, Uber for dog walking. In is Andorl for dog walking.

• 3:00:08Speaker 11

  Yeah. Unbelievable. Uh, precision guided dog walking. Uh, yeah, it's a, it's pretty

• 3:00:12John Coogan?

  Well, you know, what's funny is that we talked to somebody about humanoid robots on the show, on the stream earlier this week. And he was like, oh, well, like in manufacturing context, like it's a lot better to just have a, a purpose-built robot, or maybe you want wheels because you're in a man, you're in a factory and you have smooth floors. So you'll just do wheels. Uh, and the one example he gave of a really strong use case for humanoids was dog walking. And

• 3:00:33Speaker 11

  There we go. There we go.

• 3:00:34Jordi Hays?

  I don't know if we want to say it was really strong.

• 3:00:36Speaker 11

  What's not a human walking it?

• 3:00:37John Coogan?

  I don't know. Yeah. Yeah. That seems like the one thing you don't want to outsource in your life is like the couple, you know, the 20 minutes you get to walk your dog and just like enjoy a peaceful stroll.

• 3:00:45Speaker 11

  A new idea is a humanoid robot for like patting your child on the back as they're going to sleep.

• 3:00:50Jordi Hays?

  Yeah, I remember last Demo Day, people were trying to, I mean, this was at a period, I feel like about a year ago, it became popular to kind of dunk on YC.

• 3:01:01John Coogan?

  Oh, totally.

• 3:01:01Jordi Hays?

  It's always been, people take cheap shots at them all the time, but there were some people critiquing a bunch of YC founders for doing deep tech stuff.

• 3:01:12John Coogan?

  Oh, yeah.

• 3:01:13Jordi Hays?

  And it's like, well, shouldn't, isn't that, is that not like amazing, right? Like, do we not want? Also, I mean, that means it's so wrong to be solid.

• 3:01:22Speaker 11

  It's like, YC's sort of damned if they do, damned if they don't, you know what I mean? Like, they're getting criticized for doing just SaaS, and they're getting criticized, now they move to like, defense tech and then hard tech and whatever. I mean, some of them are just doing what they think is best, and that's like the right call, but, I mean, as far as, we went through YC, like, however many years, like, eight, nine years ago.

• 3:01:36Jordi Hays?

  That's what I'm saying, yeah.

• 3:01:37Speaker 11

  And at the time, there was like, basically no hard tech in the batch, except, like, we were the, I think we were actually really one of the first batches. It was us, it was Boom, and it was Relativity Space, all in the same batch.

• 3:01:46John Coogan?

  Yeah, that's crazy.

• 3:01:47Speaker 11

  And so, like, that was the first real, like, hard tech YC foothold, and nowadays, of course, it's like, if you look at their list of requests for startups, it's like, 50 to 75% of the entire list is just hard tech, like, you know, defense tech, that sort of thing.

• 3:02:01Jordi Hays?

  Reactions to WWDC, are you gonna be multitasking on an iPad? Do you care at all?

• 3:02:07Speaker 11

  No, I, I don't even, did they actually release the, like, clear bubble thing that everyone's complaining about already, or is it just like?

• 3:02:13Jordi Hays?

  Yeah, so they basically made it, they, they made, they've launched a feature that's effectively like what you could jailbreak your original iPhone to do, where a lot of the functionality is effectively, and the UI is see-through over a background.

• 3:02:27John Coogan?

  Okay.

• 3:02:27Speaker 11

  I don't, I'm not tracking it, I don't really care.

• 3:02:31Jordi Hays?

  Bullish, bullish.

• 3:02:32Speaker 11

  Yeah, totally, man.

• 3:02:34John Coogan?

  What are you guys using for expense management these days?

• 3:02:38Speaker 11

  What a question. So we actually recently switched to... Ramp.

• 3:02:43John Coogan?

  Let's go.

• 3:02:43Jordi Hays?

  Wow, let's go.

• 3:02:46John Coogan?

  I love that.

• 3:02:48Jordi Hays?

  Wow, he put on the hat.

• 3:02:49Speaker 11

  So I'm, uh, I'm sitting over finance right now. That's one of my jobs.

• 3:02:52John Coogan?

  You are?

• 3:02:53Speaker 11

  I, you know, when, when I got in there, there was a different expense management system in place and we had to go to the, the best in class, uh, ramp.

• 3:03:01John Coogan?

  You love that.

• 3:03:02Jordi Hays?

  Our dogs have barked.

• 3:03:02Speaker 11

  Actually, I didn't even buy the hat. Shout out to Paki McCormick for sending me a, uh,

• 3:03:05John Coogan?

  Paki's.

• 3:03:06Jordi Hays?

  There we go, Paki.

• 3:03:07John Coogan?

  These ramp hats are hard to get.

• 3:03:08Speaker 11

  Yeah, looking at it right there.

• 3:03:10John Coogan?

  That's, yeah, that's fantastic.

• 3:03:11Jordi Hays?

  When we, when we partnered with Ramp, we only got one hat. It said, you gotta work for the second hat, you know?

• 3:03:15John Coogan?

  Yeah, yeah.

• 3:03:16Speaker 11

  Yeah, at least you got the jackets though. I want, I want, I want one of those.

• 3:03:19Jordi Hays?

  The jacket's coming. We'll, we'll bring these up, uh, we'll bring these up to, uh, the bay. We're gonna have a bunch of them. We have 412 hats. They're gonna go quickly.

• 3:03:27John Coogan?

  They're gonna go quickly.

• 3:03:28Jordi Hays?

  Not to be precise or anything.

• 3:03:29John Coogan?

  It's limited.

• 3:03:31Jordi Hays?

  But you got one with your name on it.

• 3:03:32Speaker 11

  Hell, yeah.

• 3:03:33John Coogan?

  Anyway. Um, well, this was fantastic. Thanks so much for hopping on. Uh, we will talk to you soon.

• 3:03:39Jordi Hays?

  Cheers, Christian. Thanks for coming on.

• 3:03:40John Coogan?

  Bye.

• 3:03:41Jordi Hays?

  Good to see you.

• 3:03:42John Coogan?

  Uh, our next guest is already here in the TVP on Ultradrome. We have Vlad from In, Inphysical. Am I pronouncing that correctly? I'm probably pronouncing it wrong, but we'll hear it from him directly. Welcome to the stream, Vlad. How are you doing?

• 3:03:55Jordi Hays?

  What's going on?

• 3:03:56Speaker 12

  Great, how are you guys?

• 3:03:57John Coogan?

  How do you pronounce it?

• 3:03:59Jordi Hays?

  The name.

• 3:03:59John Coogan?

  The name.

• 3:04:01Speaker 12

  The name Vlad or Inphysical or?

• 3:04:03John Coogan?

  Oh, it's Inphysical. Okay, great.

• 3:04:05Jordi Hays?

  Inphysical.

• 3:04:05John Coogan?

  Give us the intro. What are you guys doing? What are you working on?

• 3:04:08Speaker 12

  It's not the easiest name. It's, it's definitely everyone is asking me how to pronounce it and I've heard so many pronunciations and, and ways of spelling it. But what we do is we're an open source secrets management platform. So we help developers manage secrets across their infrastructure. And so what secrets are, it's all types of sensitive credentials that basically connect the systems together and, uh, get the run software under the hood and no one else realizes that.

• 3:04:35John Coogan?

  Very cool.

• 3:04:36Jordi Hays?

  You have to brute, you have to work, work on, you have to become so successful that people are forced to figure out how to pronounce the name, right? It's always, it's always, it's always a challenge. And then once, you know, once you hit that hundred million dollar run rate, everybody will, will have a good sense of it. But, um, but yeah, talk, uh, give it, give us backstory. I know you, you announced a sixty million dollar Series A from a lot Gil on Friday. Very exciting, uh, not, not an easy guy to, to get on board. Uh, but break down maybe the history of the company and getting to that point.

• 3:05:08Speaker 12

  Yeah, no, absolutely. We started in a very open source manner, right? We launched in physical open source project on Reddit and that's pretty much how it got viral. And that's how it got lots and lots of developers on board. And that's pretty much how it kept running afterwards. And it, you know, like at first it was a lot of developers and it started transitioning to a lot of enterprises and very large customers and folks like LG or AI companies like Hugging Face that are using us. Um, we went through the Y C batch. So this was kind of like the first stage of the company. Uh, this was around two years ago at this point. So, uh, so much has happened ever since. And, uh, yeah, since then I've been focusing a lot on trust, a lot on security, a lot on helping companies figuring out how to make it simple and straightforward. Um, yeah.

• 3:05:51John Coogan?

  Can you, uh, give me a sense of the shape of the problem? Uh, maybe some anonymized or non-anonymized horror stories? How bad can this go when it goes wrong?

• 3:06:04Speaker 12

  I, I mean, it's, it's, it could be terrible. Actually, most of the over fifty percent of all the security breaches that happen these days is because of mishandled credentials or some kind of identity issue that was either hardcoded or accidentally leaked by one of the developers or, you know, there, there could be lots and lots and lots of different things. So a lot of the, you know, news articles that you see on, on different media, whether it's the crunch or, or whatever, right? A lot of them happen because of secrets management and the practices that a lot of organizations have, you know, they, they are trying and a lot of organizations are trying to figure it out. The problem is that the tooling out there is so complex to figure out and the infrastructure of these organizations is also so complex, um, that they can't really do this. And, and this is.

• 3:06:45Speaker 12

  How to use in physical and so the the main benefits of this is first security, but also reliability because it's kind of like hard to realize this, but secrets basically connect all the different services and databases and and infrastructure and engineers together. So if you're not able to access secret even for like a second, it could have lots of lots of lots of bad implications because then you're not able, your users not not able to use your products and software. And so on.

• 3:07:10John Coogan?

  Yeah, it's such an interesting place to sit because I can imagine a bunch of knock on effects from being that deeply integrated into like the dev tools chain. Are you thinking about that stuff already? Do you have an idea of of of where this goes or what adjacent products might look like?

• 3:07:29John Coogan?

  Is it is it unreasonable to comp the business to like one password right now in terms of like business model and kind of shape of the product?

• 3:07:37Speaker 12

  Not why? So one password is very much kind of like personal passwords and

• 3:07:41John Coogan?

  Yeah, of course.

• 3:07:41Speaker 12

  Very well and like very kind of like user driven. What is physical well is we power all the infrastructure, basically. So everything that's related to software and infrastructure layer. So it's indeed a very interesting base because we have to integrate with all the infrastructure tools, right? One password is very much a lot about kind of like the browser extension, right?

• 3:07:57John Coogan?

  Oh, yeah, they don't need to actually integrate with like Google, for example, but you do.

• 3:08:01Speaker 12

  Like we have to integrate with all the cloud.

• 3:08:05John Coogan?

  All the cloud providers, I'm sure.

• 3:08:07Speaker 12

  GCP, even like Versal or Railway, whatever, right? But also all the different version control systems like GitHub and so on. All the C I C D systems, basically all the infrastructure components that developers are using. Because if we can't integrate even with at least a single tool, then it doesn't provide the full value. So that's where a lot of complexity, what what in physical does grows and and yeah, and really kind of like what we're doing is we're building out a single platform for enterprises to manage access, to manage secrets, to manage all the sensitive information in one place and provision access controls, authentication to all of those services.

• 3:08:44John Coogan?

  Talk to me about the open source versus obviously your for-profit company, at least I think so.

• 3:08:52John Coogan?

  You never know these days. You don't know. It used to be a given if you went through YC, but then one of the biggest companies of all time became a nonprofit. But what is it like and what is that lately? Give me the deeper level of that of that sales motion. Is it just marketing? Is there a clear kind of upgrade path? Who are the best in class? I always go to like Red Hat Linux did really well, but that was kind of a different thing because they were kind of like, the company was built after Linux was already created. They didn't create it themselves. Then you have like a stable diffusion as a company and there's a whole bunch of others like Databricks has taken an open source product and then moved it so far forward that they have a differentiated product to offer and they make a ton of money.

• 3:09:35John Coogan?

  Talk to me about like the open source business landscape, the pitfalls, like how it works, like what your strategy is.

• 3:09:42Speaker 12

  It's a super interesting question because a lot of open source businesses are very different. So a lot of businesses like Databricks, they basically take existing projects and then build things around them. And physical is in this sense much more similar to folks like GitLab, right? Where we're actually building out and we are the owners of the open source project. And really kind of like what the open source project is about is we want to make sure that any developer, and this is very interesting for the, for the, a lot of open source businesses, right? It's that you kind of like have to target the enterprise components, right? But you also have to make sure that every developer and like a very long tail of developers, not even from enterprise, but also students and, and indie developers and, you know, for weekend project, they're able to use your tool, right? And they're able to benefit from it and they are able, able to do lots of their own tasks with it.

• 3:10:25Speaker 12

  And so this is kind of like a fine balance that you have to navigate. And so how physical works is that all of the features that are needed by developers, they're available under MIT license, right? Obviously the most free license out there. And so they can use it for any purposes. They can reuse it, they can fork it, they can, they can do whatever they want. And the features that are actually monetizable, they are features that are primarily needed by large enterprises, right? So it's all the different managerial functionality, different kind of like more, much more advanced functionality. When your team consists of thousands or tens of thousands of developers, right? And then you, you actually have, the problems that you're facing are very, very different. And then you can use, you can start with a physical open source, but a lot of organizations end up transitioning to a physical enterprise.

• 3:11:08Jordi Hays?

  I have to ask, because I'm sure people asked it during your Series A process, but is there an AI story here? On your website, you mentioned AI, I think, twice. One, with a feature that maybe is AI-powered. Two, with Hugging Face, which is obviously a customer. So I just ask because, you know, it's interesting. A lot of my kind of immediate thoughts around what you're building are around like, why build this now? Oftentimes, there's great things to be built that nobody got around to building. But I'm curious to kind of understand the catalyst and how you're maybe benefiting.

• 3:11:46Speaker 12

  Well, there's actually a few things, right? So the fact that we are creating this kind of like uniform source of secrets and access and basically all, like a single data set, right? For all the access within the enterprises. It helps us create this type of like AI brain behind it, right? Where we are able to provision access controls and identify different over-provisioned access and loopholes and everything else that developers are using. So this is kind of like the one part that we're, they're focusing and will be focusing even more with AI. The other part is how do all of the agents and how do all of the other AI workloads are actually able to operate secrets, right? Because, you know, we're talking about like, they're becoming much faster, they're becoming

• 3:12:27Speaker 12

  much smarter in what they're actually doing, but they kind of depend on how fast they're able to access secrets or databases or other resources that they need to be approved, right? And right now, a lot of it is provisioned very manually, right? So this is another area that Inphysical is really focusing on. And how do you actually simplify it? And how do you make sure that a lot of these workloads, they can be more autonomous in how they work?

• 3:12:50Jordi Hays?

  Yeah, yeah, that makes sense. What's your guys' internal AI software engineering stack? What tools are you getting the most value from today?

• 3:12:59Speaker 12

  I mean, in terms of engineering? So people use all kinds of things. I mean, of course, Claude and like, basically like all the LLMs out there we are using. It's kind of like a mix of whatever people feel most comfortable with and what they want to choose.

• 3:13:14Jordi Hays?

  That makes sense.

• 3:13:16Jordi Hays?

  Cool.

• 3:13:16John Coogan?

  That was great.

• 3:13:17Jordi Hays?

  Well, very, very exciting. Congrats on the milestone. And I'm sure you already have people breathing down your neck, ready to do the B, now that a lot is in. So, good luck, you know, pushing, pushing those people off.

• 3:13:31John Coogan?

  Thank you. We'll talk to you soon. Have a great day. Fantastic. Up next, we have a couple of things. We have Alex Heath from The Verge, jumping on at 2:30. That's in about 15 minutes. I want to go through some polymarkets about Apple, to give us a little bit of an update on what people are expecting Apple to do over the next year. I also want to check in with our intern Tyler Cosgrove, see how he's doing.

• 3:13:56Jordi Hays?

  The jacket came off.

• 3:13:57John Coogan?

  Let me, let me walk.

• 3:13:58Jordi Hays?

  He's rolling up the sleeves.

• 3:14:00John Coogan?

  While he's getting ready for his update, I want to run through some of these polymarkets. How much will the iPhone 17 cost?

• 3:14:07Jordi Hays?

  Will I drop one of these?

• 3:14:08John Coogan?

  Will you drop one of those? We, we're down at 10% now for over $1,000. It looks like most people are thinking the next iPhone's going to be $799 or $699. Not a lot of movement there, but it's moving downwards. People are getting more bearish on the idea of a $1,000-plus iPhone. There's, there's a small polymarket out here about will Apple release a foldable iPhone in 2025? Market launched at 12%. It's down at less than 2%. No indication from WWDC that a folding iPhone's coming. Interesting historical polymarket. Do you want to fold one?

• 3:14:47Jordi Hays?

  No, I was, I was at the farmer's market on Saturday. And was, I met another dad. And he, he pulled out his phone and it was a foldable phone. And I, and he, and he just, he pulled the phone out, unfolded it, did what he needed to do. And I was like, wow, I didn't, I've never seen one of these in the wild before. But it's kind of cool. Folds up, you know, it's pretty.

• 3:15:15Jordi Hays?

  Trying to find, trying to find why, why you really need one.

• 3:15:18John Coogan?

  I mean, I mean, I saw, I think it was Kai Sinaut went to China and was looking at a tri-fold phone, the latest and greatest from the top Chinese smartphone company, probably Huawei.

• 3:15:27Jordi Hays?

  Tri-fold.

• 3:15:28John Coogan?

  Tri-fold. So it, so it, it looks just like an iPhone. Looks just like an iPhone in terms of like size, and then it unfolds into something that's basically a tablet. And that is actually pretty, pretty interesting and pretty, you could imagine that actually catching on in terms of like, you know, you don't even need to bring the laptop with you on the plane because you're just gonna fold it out and have a much, much bigger screen.

• 3:15:49Jordi Hays?

  Can you use it when it's in its?

• 3:15:50John Coogan?

  Oh, yeah. Yeah, you can use it as a phone and then you can use it as a tablet. So it's essentially both. And the hinge technology is getting to the point where it's reliable, the dust doesn't get in it, it actually folds completely flat. The early phones, they would, they would fold and there would be like a little gap because you couldn't, you couldn't make the hinge fold flat. The screen would break, you'd see a crease.

• 3:16:09Jordi Hays?

  Folding and reading the information.

• 3:16:11John Coogan?

  It'd be amazing. It'd be amazing.

• 3:16:12Jordi Hays?

  Feel like they had a print edition.

• 3:16:14John Coogan?

  Okay. Other poly markets I want to run through. Will Apple invest in OpenAI in 2024? This is a historical poly market. It was up at 72% at one point, a small market, but still it has crashed. It crashed down to two, to 0%, obviously beginning to resolve. No, but man, maybe they should have. It would have been a wild one. The other one that, that people are tracking these days is will Apple announce iPhone assembly in the United States before September?

• 3:16:41Jordi Hays?

  We did. We beat them to it.

• 3:16:43John Coogan?

  We beat them to it. Let's go to Tyler and see, uh, how, how is the project going, Tyler? Break it down for us.

• 3:16:49Speaker 02

  Well, guys, it's done.

• 3:16:51John Coogan?

  It's done.

• 3:16:52Speaker 02

  The first American iPhone.

• 3:16:54John Coogan?

  Manufactured in America, assembled in America.

• 3:16:56Speaker 02

  Wow. You know, it's, you know, maybe not the cleanest, maybe not the most perfect. It's kind of a coin flip whether it would pass the, you know, inspections, but.

• 3:17:04John Coogan?

  Quality assurance, but you did it.

• 3:17:06Jordi Hays?

  I, I genuinely can't believe you did it. I was staring, looking, I was staring, looking at the pieces earlier and, and I, and I was kind of concerned because I thought we've given Tyler an impossible task.

• 3:17:17John Coogan?

  Yep. And we're now three hours and 20 minutes into the project and it's successful.

• 3:17:23Speaker 02

  Yeah. I mean, look, I, you know, I'm more of a software guy, machine learning engineer kind of guy.

• 3:17:27John Coogan?

  Yep.

• 3:17:28Speaker 02

  Not, not big on hardware, but you know, this process, I'm incredibly bullish on bringing manufacturing back to the United States.

• 3:17:34John Coogan?

  You think it could be done?

• 3:17:35Speaker 02

  Okay. If I can do it, you know.

• 3:17:37Jordi Hays?

  Anyone can. Not necessarily anyone, but.

• 3:17:39John Coogan?

  But if you have a college degree.

• 3:17:42Jordi Hays?

  Yeah, we gotta kind of get into the economics now and understand like, you know, Tyler's market value, Tyler's market value probably, you know, quarter million a year, take him three hours, we're getting potentially some margin problems.

• 3:17:58John Coogan?

  Yeah, we've been talking about the $10,000 iPhone. I think we might be looking at it. You get an iPhone 4S handmade by a college educated machine learning engineer.

• 3:18:06Jordi Hays?

  But imagine, you know, in a lot of cars, like the person that made the engine will sort of sign it. Having an iPhone that was sort of signed on the back by Tyler.

• 3:18:16John Coogan?

  Why don't we get, why don't we get a Sharpie for Tyler? He can sign the back of that. We can give it away to one of the fans.

• 3:18:21Speaker 02

  I'm thinking of starting like a kind of boutique, you know, handmade phone company now.

• 3:18:25John Coogan?

  I think that's good.

• 3:18:26Speaker 02

  You know, made with love.

• 3:18:27Jordi Hays?

  Just buy the new iPhone, take it apart, put it back together, sign it.

• 3:18:30John Coogan?

  Sign it. Yep.

• 3:18:31Jordi Hays?

  It's a handmade iPhone.

• 3:18:32John Coogan?

  Assembled here.

• 3:18:33Jordi Hays?

  Amazing. Honestly, genuinely incredible work.

• 3:18:36John Coogan?

  Really great.

• 3:18:37Jordi Hays?

  They said it couldn't be done.

• 3:18:38John Coogan?

  We proved him wrong.

• 3:18:39Jordi Hays?

  And you proved him wrong.

• 3:18:40John Coogan?

  Anything is possible in America with enough dynamism.

• 3:18:43Jordi Hays?

  With enough Tyler's.

• 3:18:44John Coogan?

  And we saw it today.

• 3:18:44Jordi Hays?

  With enough Tyler's.

• 3:18:45John Coogan?

  With enough Tyler's and we can, we can accomplish anything. Poly market has a 4% chance that Apple announces iPhone assembly in the United States before September. Not looking good there, but maybe we change the odds today, folks. And what else is in the poly market here? Will Apple release a new product line in 2025? That's sitting at 43%. People are expecting something. Let's go to the comments and see. Home pad plus home OS is the rumor. Apple smart home display. So something like a, like an iPad that would live in your house and act as the, as the central, as the central hub for all your home

• 3:19:28John Coogan?

  pod devices. Very interesting. So, I don't know. We'll be tracking that. Didn't happen today, but we will be getting the full update from our WWDC correspondent Verge, over at the Verge, Alex Heath coming on the show in just a minute.

• 3:19:43Jordi Hays?

  Well, we can pull up some bangers from the bangers tab.

• 3:19:46John Coogan?

  We have Joe Weisenthal? I think Joe Weisenthal had a good one. I don't know if you saw this. There's a startup called Bernie, which claims to have built a reputation marketplace so that you can license out someone else's credentials when fundraising or whatever. They declined to say whether it's ethical. And they say, is this legal? Yes, every engagement on the platform is governed by enforceable licensing contracts. Identity credentials and usage terms are verified. Is this moral?

• 3:20:15Jordi Hays?

  So the issue is I'm looking up, I just Google Bernie Reputation.

• 3:20:19John Coogan?

  Yeah.

• 3:20:20Jordi Hays?

  And it's just a bunch of stuff on Bernie Sanders. I can't actually find the startup.

• 3:20:23John Coogan?

  Yeah.

• 3:20:23Jordi Hays?

  I was seeing this and I was trying to understand. It's, it's kind of, it's kind of a hilarious concept to be, you know, basically say like, oh yeah, you can just use my name to rate, fundraise for, for your project.

• 3:20:37John Coogan?

  Yep.

• 3:20:38Jordi Hays?

  Like that does not, that, that's not going to work.

• 3:20:43Jordi Hays?

  Uh, may, maybe there's some people that, that would agree to that, but uh, sounds.

• 3:20:47John Coogan?

  Social capital now liquid accelerate investor confidence with Bernie's curated marketplace of reputation assets. Purchase verified team credentials.

• 3:20:56Jordi Hays?

  I can't find anything about this company.

• 3:20:59John Coogan?

  Is this ethical? That's not for us. It says burning dot market is the website, but it, it could be a prank. Bernie dot market. Let's see. It, it appears to be a real, real website. Somebody vibe coded it. Profile characteristic.

• 3:21:13Jordi Hays?

  Access elite credibility instantly.

• 3:21:15John Coogan?

  Instantly.

• 3:21:16Jordi Hays?

  Um, I just don't understand who.

• 3:21:19John Coogan?

  Is this ethical? That's not for us to determine. Credentials are already used to influence funding, hiring and trust, often informally and without consent. We bring transparency, consent and pricing to a dynamic that already exists. Very, very interesting.

• 3:21:34Jordi Hays?

  So I don't, I don't quite understand. So this is like, you want to build a SaaS company and you just.

• 3:21:39John Coogan?

  And you need, and you need a Harvard educated, you need a Harvard MBA on your deck as like an advisor. And so you go, I mean, I guess like the bull case is this, for this is like angel investors and advisors are already kind of like GLG exists. You could go to alpha sites or.

• 3:21:55Jordi Hays?

  So advisors, I understand.

• 3:21:56John Coogan?

  And, and, but this could, this could be kind of a, like a rebranding of the advisor marketplace. So instead of saying like, hey, like we understand the supply chain because we spent, you know. $10,000 of our pre-seed capital on Tegus, talking to experts, and we converted a few of those into, you know, advisors and gave them some equity. Bernie maybe lets you make that go direct to the advisor relationship. But I don't know. It's very oddly marketed, but it's very funny. Anyway.

• 3:22:25Jordi Hays?

  Extremely sus.

• 3:22:26John Coogan?

  Yes.

• 3:22:28Jordi Hays?

  I would, that's it. I would have the founder on just to, just to ask how they expect this to work and not create a wake of problems.

• 3:22:40John Coogan?

  Yes, yes, yes. I mean, there are other companies.

• 3:22:44Jordi Hays?

  The founder's like, well, to be honest, like, I kind of dog

• 3:22:48John Coogan?

  fooded.

• 3:22:49Jordi Hays?

  fooded the product and like, I have no tech experience. I don't have a reputation myself.

• 3:22:54John Coogan?

  But, you know, my team has 50 years of experience and reputation.

• 3:22:59Jordi Hays?

  Harvard, MIT, Google, Apple. Stack, GPs at Sequoia, Benchmark.

• 3:23:09John Coogan?

  Well, I mean, intro.com.

• 3:23:11Jordi Hays?

  Aerospace engineers.

• 3:23:12John Coogan?

  Yeah, yeah.

• 3:23:14Jordi Hays?

  We actually.

• 3:23:14John Coogan?

  IMO gold medalists.

• 3:23:15Jordi Hays?

  Many of the OpenAI researchers are on our team.

• 3:23:19John Coogan?

  High frequency traders. We got some Jane Street guys on board.

• 3:23:22Jordi Hays?

  Yeah.

• 3:23:23John Coogan?

  We got Citadel little guys on the team.

• 3:23:25Jordi Hays?

  Johnny Ive.

• 3:23:26John Coogan?

  Johnny Ive's involved. He spent one minute replying to a man.

• 3:23:30Jordi Hays?

  Oh, okay, okay. So I get it. That makes sense. I'm actually fully, you know, bought in to this project and I would trust you with my credentials for you to just sell to the, to the highest bidder. Anyways, we have some more, some breaking news. Brad Gersner's Invest America is being included in the reconciliation bill, backdated to the beginning of this year. So if you had a child, December 1st, 2025 and beyond.

• 3:23:58John Coogan?

  Wow.

• 3:23:59Jordi Hays?

  They will get $1,000. I think it's slated through 2029.

• 3:24:02John Coogan?

  That's amazing. So, so, so is this like happening, happening? Or is it still in the discussion phase?

• 3:24:08Jordi Hays?

  Well, so the reconciliation bill needs to be passed.

• 3:24:10John Coogan?

  Okay, but if it's passed, it will be included.

• 3:24:11Jordi Hays?

  And they're being called Trump accounts.

• 3:24:13John Coogan?

  Wow, okay. That'll be really non-controversial. But congratulations to Brad Gerschner. That's very exciting that he got it across the finish line. At least the, he got it across the starting line, I suppose.

• 3:24:22Jordi Hays?

  Yeah.

• 3:24:23John Coogan?

  The finish line's upcoming, but it seems like it could, it could go through.

• 3:24:26Jordi Hays?

  I'm gonna be calling these Gerschner accounts.

• 3:24:28John Coogan?

  Forever.

• 3:24:29Jordi Hays?

  Forever. I'm gonna tell my, uh, my next child. Yeah, this is, you, you can thank, uh, Gerschner for your college education. Write him a thank you note. Um, let's pull up this post from Kitzy.

• 3:24:43John Coogan?

  Okay.

• 3:24:44Jordi Hays?

  Says, uh, Steve Jobs would have cornered you in a dark alley and beat you with a metal pipe if you even suggested something like this. And this is, this is the new, um, this is the new, uh, design, the sort of see-through functionality. There's another post from Alex.

• 3:25:02John Coogan?

  What's interesting is that X did this for a while and it was not well-received. Like, but we ran this experiment. I remember the bottom bar for a while.

• 3:25:11Jordi Hays?

  Did you see there?

• 3:25:11John Coogan?

  On, on X shortly after Elon took over. It was like, as you would scroll, uh, it, it, it still does it actually. As you scroll, the, the bottom bar gets transparent and you can still click on it. So it still lets you know that it's there and it kind of fades, fades away so you can see things under it. Um, but, but I think for a while it was like going up and back and it was kind of jarring.

• 3:25:33Jordi Hays?

  It is funny because...

• 3:25:35John Coogan?

  I don't know. I, I think this could work, who knows?

• 3:25:37Jordi Hays?

  Some Alex, uh, taking the same joke, or actually he was first. He said, Steve, uh, there's another post, uh, showing Steve Jobs would have taken you out back and shot out your kneecaps.

• 3:25:49John Coogan?

  Oh, okay, a little more aggressive.

• 3:25:50Jordi Hays?

  For pitching something with this contrast ratio. Another post here, seeing how the see-through actually shows up on the home screen. It's funny because this, you could jailbreak your phone a decade ago.

• 3:26:01John Coogan?

  And do this exact thing, yeah.

• 3:26:02Jordi Hays?

  Eric Z called this out. You do this exact same thing, I remember. It was very cool. It would have some areas that it would be.

• 3:26:08John Coogan?

  Disastrous, but.

• 3:26:09Jordi Hays?

  Disastrous, but in general.

• 3:26:11John Coogan?

  You know.

• 3:26:11Jordi Hays?

  It would.

• 3:26:12John Coogan?

  It's fine.

• 3:26:13Jordi Hays?

  Uh, it was pretty cool.

• 3:26:14John Coogan?

  It's fine. Yeah, it happens.

• 3:26:18John Coogan?

  Should we go to this news about the doctors? New paper shows a familiar result on LLMs in medicine. Doctors given clinical vignettes produce significantly more accurate diagnoses when using a custom GPT built with obsolete GPT-4 than doctors with Google PubMed, but not AI. So we are firmly in the Centaur era. Aaron Levy over at Box sums it up well. He says doctors went from 75% accuracy without AI to 85% accuracy when using AI for diagnosis in the future. It will be malpractice for your doctor not to be using AI. This is such a clear societal benefit that it alone should cause everyone to be much more pro AI progress. I completely agree. It's very good. Very exciting.

• 3:27:03Jordi Hays?

  I want to see my doctor go on ChatGPT in real time describing what I'm saying.

• 3:27:11John Coogan?

  Yeah. I mean, they probably need like a doctor plan where the data is even more sequestered, right? So they're not like leaking HIPAA. Like they need a HIPAA compliant GPT, but that will be pretty easily doable. I guess the question is like, there's been a couple AI for doctors companies and the question is, is that an independent application layer company? Or is that something that OpenAI rolls out as a functionality?

• 3:27:35Jordi Hays?

  ChatGPT is the HIPAA compliant ChatGPT kind of thing.

• 3:27:38John Coogan?

  Potentially. I don't know.

• 3:27:40Jordi Hays?

  There's multiple, multi-billion dollar companies focused on the scribe functionality, right?

• 3:27:46John Coogan?

  Yeah.

• 3:27:47Jordi Hays?

  Or need.

• 3:27:48John Coogan?

  Yeah. Yeah. I mean, in legal, there certainly seems to be some like decent amounts of traction from Harvey. And so, you know, it could be enough of a unique use case that it's not just something that you're going to use ChatGPT for.

• 3:27:58Jordi Hays?

  Cursor for surgeons.

• 3:27:59John Coogan?

  Cursors. We'll probably see that.

• 3:28:01Jordi Hays?

  Yeah, yeah. Just cut that out. Clear that out. Grab it. Throw it out. Put it to the side. Just vibe coding your surgery.

• 3:28:11John Coogan?

  You know that like, like the latest Gemini can just take a webcam view of, of anything and just be talking to you the whole time about what it's seeing, making recommendations. And you really could do that. So cursor for surgeons.

• 3:28:24Jordi Hays?

  Cursor for vibe surgery.

• 3:28:28John Coogan?

  I got vibe surgery. I go, oh yeah, like, uh, how are you recovering? Uh, it was more of like a vibe surgeon than like, uh, like a hardcore, deep, deep research surgeon. It was more of a vibe surgeon.

• 3:28:40Jordi Hays?

  Yeah, but.

• 3:28:40John Coogan?

  It was just a college dropout.

• 3:28:41Jordi Hays?

  My spleen's feeling decent.

• 3:28:43John Coogan?

  Decent, there's.

• 3:28:44Jordi Hays?

  It works for now.

• 3:28:45John Coogan?

  Yeah.

• 3:28:45Jordi Hays?

  It might be a bit buggy.

• 3:28:47John Coogan?

  Yeah.

• 3:28:47Jordi Hays?

  But.

• 3:28:50John Coogan?

  Vibe surgery, I don't know if we're gonna go there, but it's possible. We're already in the era of vibe legislation.

• 3:28:55Jordi Hays?

  Vibe engineering.

• 3:28:57John Coogan?

  Vibe coding's very real. Vibe designing's very real. Get on figma.com. Uh, speaking of great art, uh, Think Words says, "Great art should comfort the disturbed and disturb the comfortable." And it's a painting of Halo.

• 3:29:12Jordi Hays?

  Halo. It genuinely is beautiful.

• 3:29:16John Coogan?

  It's beautiful. I wanna hang this. We should get this, uh, we should get this painted by hand. Tyler, your next project, you're painting.

• 3:29:23Jordi Hays?

  Hand paint this AI Halo slop. No, it's funny, cuz I look at this and I don't think slop. I think, I think.

• 3:29:30John Coogan?

  I think, cool. Yeah. But again, I mean, uh, like, like what takes this out of, out of the slop world is, is how it is funny to recontextualize Halo, this science fiction, this video game into this, you know, uh, painterly style of, I don't know, like Renaissance painting.

• 3:29:47Jordi Hays?

  Um, it's beautiful. It's stunning. It's provocative.

• 3:29:49John Coogan?

  It's this, it's this unexpected mashup. It's the Harry Potter Balenciaga. Two things that normally don't go together, you put them together, that's funny.

• 3:29:56Jordi Hays?

  I would like to see this same.

• 3:29:57John Coogan?

  The installation of the ideas, not what's, is sloppy, but the ideas is uniquely human. And so that's why, that, that's why whoever created this came up with a great prompt and that's why we're liking it. And that's why it's 5K likes. Anyway, um, Dylan Patel, we mentioned this earlier on the show, but Semi Analysis has a banger post on, uh, scaling reinforcement learning. Very, very interesting, deep dive. Uh, Dylan Patel writes, uh, "Reinforcement learning is very inference-heavy and shifts infrastructure build-outs heavily. Scaling, well-engineered environments is difficult. Reward hacking and non-verifiable rewards are key areas of research. Recursive self-improvement is already playing out." Major shift in O4 and O5 RL training. And so what's interesting is that before in

• 3:30:39John Coogan?

  the pre-training era, in the scaling of the big, big transformer runs, the massive runs, Dylan Patel told us that the latest Orion run, the GPT 4.5 run, was already maxed out, and they couldn't do a bigger single run without bringing Stargate online. And so the, the, the industry has simultaneously shifted to reinforcement learning, which of course can be done in a very distributed way. And so you can be generating training data all over the place when inference is low, like chat GPT use is high during, during the week, the, the work week. It's not high during the nights and weekends. And so during those times, they use those GPUs, those data centers to generate reinforcement learning

• 3:31:18John Coogan?

  training data. And the particularly important thing is verifiable rewards. So you have the, you have the AI generate a whole bunch of code, or write, write the solution to a complex math problem, but then that math problem is verifiable. You can make sure that the answer is correct. What's hard is when you have non-verifiable rewards, like, is this joke funny? Very, very difficult. And so there's, there's a lot of reward hacking going on and a lot of work being done on what do you do in a scenario where there's a non-verifiable reward, not like a math problem or some code. And so right now, what they're doing is they're having other LLMs grade the results. And so you generate 100 jokes, and then another LLM is looking at them and saying, which joke is funny? And

• 3:32:02John Coogan?

  hopefully it learns over time, but it's very tricky. There's also very interesting developments in, in engineered environments. And so when you're doing reinforcement learning, the classic example is like chess or Go. And so you put all the chess pieces on a virtual board, you play the chess out, but it's very easy to simulate chess because it's just, it's just a bunch of pieces on the board.

• 3:32:21Jordi Hays?

  Defined rules.

• 3:32:22John Coogan?

  It's a lot harder to create an engineering environment that, that is simulating code across like a database and a, and a web server and a web browser and Python and all, and image generation, because there are, there's lag and delay in all of those. And so A lot of the research that OpenAI did on reinforcement learning for video games, they were able to run, you know, Super Mario at like a thousand times speed. Or they can simulate an entire game of chess in a millisecond. It's much harder to do that when you have to say, okay, go and interact with all these web servers and run into all the CAPTCHAs. And you can't really speed up every, the environment. And so how you work through those engineering environments that you're running the test on is very, very key. And so there's a lot of research going in there.

• 3:33:06John Coogan?

  So I'm sure we'll be digging into this more in the future. Anyway, our guest is joining in just a minute. But let's keep moving on. What should we? You're surrounded by journalists. Hold your position. Can't wait. There's an obituary for Bill Atkinson, one of a kind, the Macintosh pioneer and inventor of HyperCard. He passed away at 74. Very sad to hear that. Very glad that Wired was able to do a beautiful obituary. We'll read from some of this right now. "My first meeting with Bill Atkinson was unforgettable. It was November of 1983 and reporting for Rolling Stone. I had gained access to the team building the Macintosh computer, scheduling to launch early next year. Everyone kept telling me, 'Wait until you meet Bill and Andy,'

• 3:33:50John Coogan?

  referring to Bill Atkinson and Andy Hertzfeld, two key writers of the Mac software. Here's what I wrote about the encounter in my book, Insanely Great. I met Bill Atkinson first, a tall fellow with unruly hair, a poncho via mustache, blazing blue eyes. He had the unnerving intensity of Bruce Dern in one of his turns as an unhinged Vietnam vet. Like everyone else in the room, he wore jeans and a T-shirt. 'Do you want me to see, do you want to see a bug?' he asked me. He pulled me into his cubicle and pointed at his Macintosh. Filling the screen was an incredibly detailed drawing of an insect. It was beautiful, something you might see on an expensive workstation in a research lab, but not on a personal computer. Atkinson laughed at his joke."

• 3:34:34John Coogan?

  Then he got very serious, taking in intense near whisper that gave his words a reverential weight. The barrier between words and pictures is broken, he said. Until now, the word of art has been a sacred club, like Fine China. Now it is for daily use.

• 3:34:50Jordi Hays?

  Woo!

• 3:34:50John Coogan?

  He's so excited about it. Atkinson was right. His contributions to the Macintosh were critical to that breakthrough he'd whispered to me at the Apple office known as Brandy Three that day. A few years later, he would single-handedly make another giant contribution with a program called HyperCard, which presage the World Wide Web. Through it all, he retained his energy and joie de vivre and became an inspiration for all who had changed the world through code. On June 5th, 2025, he died after a long illness. He was 74. Atkinson hadn't planned on becoming a pioneer in personal computing as a graduate student. He studied computer science and neurobiology at the University of Washington. But when he encountered the Apple II in 1997, he fell in love and went to work for the company that built it

• 3:35:35John Coogan?

  a year later. He was employee number 51. In 1979, he was among the small group that Steve Jobs led to the Xerox PARC research lab and was blown away by the graphic computer interface he saw there, the GUI. It became his job to translate that futuristic technology to the consumer, working on Apple's Lisa project. In the process, he invented many of the conventions that still persist on today's computers, like menu bars. Atkinson, he created the menu bar, Jordy. This is incredible.

• 3:36:03Jordi Hays?

  Which they just today added to the iPad.

• 3:36:05John Coogan?

  Really? The menu bar is in the iPad now?

• 3:36:07Jordi Hays?

  He lives on.

• 3:36:09John Coogan?

  He lives on. What a full circle moment. Atkinson also created QuickDraw, a groundbreaking technology to efficiently draw objects on a screen. One of those objects was the round rectangle, a box with rounded corners that would become part of everyone's computing experience. Atkinson had resisted the idea until Jobs made him walk around the block and see all the traffic signs and other objects with rounded corners. Wow. He's like, it's probably easier for the computer to draw a circle or a perfect square. But Steve Jobs is like, no, the corners have to be round.

• 3:36:41Jordi Hays?

  They will be round.

• 3:36:41John Coogan?

  They will be round. And he built it. Remarkable.

• 3:36:44Jordi Hays?

  That's amazing. Because of Atkinson, my first experiences with computers were beautiful and magical.

• 3:36:52John Coogan?

  Yeah. I was... I was listening to Ben Thompson talk about Steve Jobs and AI and I think he was actually quoting, who was it? Signal or someone on X, one of the accounts that we highlight all the time. And this account had said, what would Steve Jobs think about vibe coding? And Ben Thompson's point was like, he would have loved it. He would have loved vibe coding. And his example was that if you go back to one of the first major keynotes for Apple, or one of the keynotes, I think right before he passed away, actually, Steve Jobs introduced GarageBand. And in it, he's talking about all the different like, like instruments that you can use. And, and he says like, now anyone can be a musician.

• 3:37:36John Coogan?

  And he was really about like, just bringing the ability to create to anyone. And that's what vibe coding does. And it's like the perfect example of that. And people get so hung up with like, the business implications of vibe coding. Or like, what if it hallucinates? Like, well, what if?

• 3:37:51Jordi Hays?

  Yeah, Steve Jobs wouldn't say.

• 3:37:53John Coogan?

  GarageBand?

• 3:37:54Jordi Hays?

  Vibe code for 20 minutes and push it to production?

• 3:37:57John Coogan?

  No, of course not.

• 3:37:57Jordi Hays?

  But he would, but he would, but he would appreciate this sort of just creating software.

• 3:38:03John Coogan?

  Totally, totally.

• 3:38:04Jordi Hays?

  That process of creation. It's not like he made GarageBand being like, make the perfect song every time.

• 3:38:09John Coogan?

  And one of the things that Apple's uniquely behind in, speaking of W W C, is, is Xcode does not, does not integrate with Cursor. So when you're writing an Apple iOS app, and you're writing Objective C, it's a very difficult language and you can't immediately integrate with Cursor, at least not, at least not at a box.

• 3:38:27Jordi Hays?

  Is working with Anthropic.

• 3:38:28John Coogan?

  They're starting to work on it. They are solving it now. Anyway, we have our W W C correspondent, Alex, coming in the studio. Welcome to the stream. How you doing?

• 3:38:38Jordi Hays?

  What's going on?

• 3:38:39Speaker 13

  Guys, I'm at the Steve Jobs Theater, doing this handheld. Hope that's okay.

• 3:38:44John Coogan?

  Oh, it's great. It looks fantastic.

• 3:38:46Jordi Hays?

  You're doing a great job.

• 3:38:46John Coogan?

  Can you show us what's behind you? Can you, can you give us a little tour? Wow.

• 3:38:50Speaker 13

  Got the space. And then behind me is the, is the Steve Jobs Theater. Well, it's below me technically. This is the, this is the dome of all that.

• 3:38:59John Coogan?

  That's beautiful.

• 3:39:00Jordi Hays?

  Amazing.

• 3:39:00John Coogan?

  Give us your reactions. Break it down. What have you seen? What have you liked? What, what would you put in the bucket of like, needs for, needs still time in the oven?

• 3:39:12John Coogan?

  Let's see.

• 3:39:14Speaker 13

  Okay, I hear I hear you now.

• 3:39:16John Coogan?

  Perfect. Break it down for us. What's going on?

• 3:39:18Speaker 13

  Yeah, um, I haven't gotten obviously catch the show yet, but I'm curious what you guys think. I mean, to me, the big headline is no new Siri. And that means no new Siri for at least a year because that's how Apple works, right? They're not going to talk about it again in a way that's like expansive for developers until WWDC next year. I think we saw the stocks slide literally as WWDC kicked off because people were hoping for that. I think Apple, you know, having just come out of some meetings that I can't really talk about, but I can just say like, I think Apple is wanting people to go, look, we've got all this other stuff. Uh, the iPad is more advanced, uh, you know, be excited about the new design.

• 3:40:00Speaker 13

  But I think underneath this is this um simmering angst about where Apple is at on AI. And I don't think they have a good answer yet. Do you guys?

• 3:40:13Jordi Hays?

  No, it's it's it's, I mean, the the internet will destroy them for being like, hey, don't, don't worry about the AI stuff. We made your icons see through.

• 3:40:24John Coogan?

  Yeah, I think there's two things going on.

• 3:40:26Jordi Hays?

  And rightfully so, right? It's sort of it's it's it's somewhat, I I wouldn't go so far as to say it's unacceptable because ChatGPT is still great on an iPhone. You can get a lot of value out of it. But I forget who we had earlier. It was like, it would be really great if it ChatGPT was integrated with photos and iMessage and and all these other things. And so, yes, Apple, from from an investor standpoint, I look at Apple and we've talked about this a lot. Apple missed search, but they get 20 billion a year from it, so they're fine. They can miss AI. They can. Yeah, yeah, sure. And they can miss AI, but it does, uh, you know, we had.

• 3:41:06John Coogan?

  They might be able to still value capture is what you're saying.

• 3:41:09Jordi Hays?

  Yeah, I think they can still value capture, but as a consumer, it's easy to be deeply frustrated.

• 3:41:14John Coogan?

  And if they auction off this button, the action button to the highest bidder, that could be a multi-billion dollar deal for sure if they act as the front door to AI.

• 3:41:23Speaker 13

  Yeah, I mean, I was thinking about the same day as W W C OpenAI hitting 10 billion in ARR, right? Which is three X year over year, like on a massive base already of billions a year. And a healthy chunk of that is flowing directly into Apple's pockets, right? Because those are chat G P T subscriptions that people are paying for through I O S. So yeah, you're right, they benefit. I think the question is like, what happens if people start to buy phones less because AI makes other devices more interesting? So like the boogie, the boogeyman here on the ground today is Johnny Ive, right? It's like, what is he doing with OpenAI? Is Apple scared about it? You can't get an answer either on or off the record. But I think that's the real fear and that's probably years out. So to be like near term bearish on Apple is probably not correct.

• 3:42:08Speaker 13

  But like in five years, are people buying phones less because we have all these AI wearables that take interactions away from the phone? Maybe is Apple going to be winning there? So far it doesn't look like it. So I think that's like, that's more like five-ish years out, but that's, that's a serious concern.

• 3:42:24John Coogan?

  Yep.

• 3:42:25Jordi Hays?

  And the China, the China question is interesting. We had Patrick, the author of Apple and China on earlier today. And he was just saying, Apple is going to be fine in the United States in the near term, even if they're kind of miss, you know, missing, missing AI functionality. But in China, if there's phones like Huawei and other players that can offer these deeply integrated AI features, you're going to fall behind in that market.

• 3:42:52John Coogan?

  And you have to imagine that the dynamic between DeepSeek and Huawei is going to be radically different than the dynamic between OpenAI and Apple.

• 3:43:00Jordi Hays?

  Totally.

• 3:43:00Speaker 13

  That's right. Yeah, that's been a big topic here too. I was running into another member of the press from China who's here. And he was saying everyone there is super mad that they don't have Apple Intelligence, which is like everyone here has it and it's like, what does that even mean?

• 3:43:14Jordi Hays?

  Wait, so they didn't even roll it out? They didn't roll it out?

• 3:43:16Speaker 13

  It's blocked, it's blocked by the regulators and now it's caught up in the trade war there. So the regulator, I was just reading the Financial Times actually had a great report on this, how the local regulator was blocking it because of the trade war. And so Apple's caught in all these geopolitical tensions that are really messing up their AI strategy. And to not be able to sell the marquee feature of the phone you shipped last year in your second largest market. I don't know, maybe China's their first largest. I don't know by users, it's probably close. That doesn't seem good. And so that's, that's a big question I have.

• 3:43:46John Coogan?

  Yeah, yeah. I, I think the other interesting thing is that like, this is a developers conference, but all the consumers are watching and consumers are the ones that are, I feel like they're the noisiest online about various redesigns. I'm more interested to dig in as we get more details this week into some of the olive branches that Apple could extend to the developer community on the AI side. Because even if they're not going to give up the Siri button to ChatGPT, there are a bunch of different, there are a bunch of different small L L Ms and different summarization functionality and, and different access to parts of the chip that could be used at a lower level by all companies, including upstarts that just want to build a cool app that maybe

• 3:44:30John Coogan?

  needs a little more horsepower on the AI side. And the chips are great. And so giving people more access to that at a deeper level, that feels like a narrative that could be completely drowned out by, oh, we didn't get new Siri. But if the developers are increasingly happy and see that there's more opportunity to just build cool things, we might, we might just wake up in a couple of months and be like, oh, wow, there's this amazing new app that's clearly using the chips more effectively. Like my phone feels faster, it feels more advanced and it's not an Apple product, but it's enabled by, by the way, Apple kind of, you know, opened up the ecosystem just a little bit, even if they didn't go full, anyone can build the next Apple.

• 3:45:07Speaker 13

  Yeah, I mean, that's right. I think opening up their models that they announced today to developers could be a big deal, but it remains to be seen if the models are good or not. I had a developer come up to me who's building this like AI social network. And he's doing everything on device because he wants it to be privacy centric. And Apple's perfect for that. That's what they do. It's like their models run locally. They're probably not the most performant, but they're gonna, they're free and they run locally. So for him, it's a win. He's an indie developer trying to build a cool AI thing. Is that something that huge apps are going to use? I doubt it. So is it going to be enough to shift the narrative on like, yeah, Apple's good at AI now for developers? Not sure. I'm kind of skeptical.

• 3:45:45Jordi Hays?

  What's up with that research paper that an Apple intern put out?

• 3:45:49John Coogan?

  It was an intern?

• 3:45:50Jordi Hays?

  I think he was an intern. Did you, any chatter about that? They basically said RL is fake.

• 3:45:57Speaker 13

  Yeah, shitting on reasoning. Yeah. Uh, well, it's like shitting on the test time compute stuff. So like basically saying like, which it kind of makes sense. Like these are, these are fancy parrots at the end of the day. Right. They just repeat things back. So if you just like layer on a bunch more of that, does it actually get to some semblance of intelligence?

• 3:46:15John Coogan?

  Like, I'm totally down to buy the most fancy parrot, though. Give me a fancy parrot. I would buy a fancy parrot today.

• 3:46:21Speaker 13

  I think that's what Apple's discounting is like how much we love fancy parrots.

• 3:46:24John Coogan?

  Totally. Yeah. I don't care if it's actually thinking or actually sentient. Like, did it book my flight or not? Did it turn on my alarm clock at the right time?

• 3:46:32Jordi Hays?

  The Android user being like, the iPhone is not the best phone. It's, it's the camera on the Android is, you know.

• 3:46:39John Coogan?

  A little bit better. Like, do the pictures look good or not?

• 3:46:42Jordi Hays?

  Yeah.

• 3:46:42John Coogan?

  When I take a picture of my dog, does it, is the exposure like roughly correct? Yeah.

• 3:46:47Speaker 13

  Is a, is liquid glass, uh, hot or is it ass? How do we feel? Is it liquid ass?

• 3:46:52Jordi Hays?

  Uh, John, John doesn't get the.

• 3:46:54John Coogan?

  I, yeah, I mean, it, it, it seems like, I, I, I don't know, like, people were kind of like, like, ready to chomp at anything and, and being very like negative. Uh, I'm, I'm, I, I, I don't think it's as unprecedented as anyone has ever said, because, uh, like, like this has been tried in other apps. It does kind of work. I'll need to kind of play around with it. Have you, have you ever had a chance to play with any?

• 3:47:15Jordi Hays?

  I think it looks, I personally, personally, I think it looks cool.

• 3:47:17John Coogan?

  Yeah.

• 3:47:17Jordi Hays?

  I, I remember jailbreaking early iPhones, iPod touches to have that functionality and it was cool.

• 3:47:24Speaker 13

  Yeah.

• 3:47:24Jordi Hays?

  I never once in the last 10 years have been thinking, I wish I could go back to that jailbroken UI that I had when I was a kid.

• 3:47:32John Coogan?

  I would just be very.

• 3:47:33Jordi Hays?

  So I don't give them any credit. Like, this is the kind of thing that they should announce at WWDC and move on quickly and not try to be like, hey, everybody, look at this thing.

• 3:47:43John Coogan?

  I would just be very surprised if Apple whiffed on like a UI design feature, because that's like what they're great at. I'm not, I'm not like, like the, the unexpected upside is like, can they train a huge foundation model and build a gigascale, hyperscale data center? Like, that's kind of out of their wheelhouse new territory. But I would imagine that whatever they do on the UI UX side, like, it might be a little jarring. Like when they went from skeuomorphic to flat design, there were a lot of people, oh, I like the old one. But then you get used to it and it's fine. So I would, I would imagine that in the, in the fullness of time, we all get used to this and it's no big deal. Um, although, you know, people are still upset about the photos app. I feel like I'm getting used to it now. It's still like pretty rough. Some people aren't updating, but it, it hasn't been as jarring.

• 3:48:25Jordi Hays?

  I I've gotten used to it. I don't use any of the new features yet.

• 3:48:28John Coogan?

  Yeah, it's it it feels like.

• 3:48:30Jordi Hays?

  I've retrained myself on a bad, what I think is a bad user experience.

• 3:48:35John Coogan?

  It feels very search built with the photos app. It feels like it's designed for you to go and just start searching. But the actual categorization of images and videos isn't quite there yet. So if you're looking for like, oh, yeah, like there was a video of my dog. But there was a newspaper in the video. I should be able to just type in like video of dog and newspaper. And the actual AI that's running to tag that stuff is quite there.

• 3:48:57Jordi Hays?

  The issue that AI is not there and people think of your photos are for capturing memories and people think of memories in sort of a

• 3:49:04John Coogan?

  Yeah, yeah, yeah.

• 3:49:05Jordi Hays?

  An order and they're gonna kind of go back to the to the moment in time where they capture that moment. So I don't I don't think they've nailed that.

• 3:49:11John Coogan?

  Yeah, yeah. Anyway.

• 3:49:13Speaker 13

  Yeah, the only the only other thing that stood out to me was Vision Pro. They're really positioning it as like an enterprise device now.

• 3:49:19John Coogan?

  Hmm, interesting.

• 3:49:20Speaker 13

  And I think that's because that's who's willing to pay that price point for it right now, right? And so it's like, you know, some of that stuff's cool, but I didn't sense a lot of energy around the Vision Pro beyond that, right?

• 3:49:33John Coogan?

  Interesting.

• 3:49:34Speaker 13

  And I think that product is still kind of a question mark in terms of like, is it going to be a bigger thing or not?

• 3:49:41Jordi Hays?

  And is that position as like, hey, we just want you to buy these for your employees so they have a bunch of monitors? How what what was?

• 3:49:50Speaker 13

  Or like, yeah, like you're working on an assembly line or something, which is like.

• 3:49:52John Coogan?

  That's so odd. That's so odd because they apparently they pulled the plug on a enterprise focused device.

• 3:49:59Jordi Hays?

  Tyler, would you have benefited from having an Apple Vision today? Tyler built the first American made iPhone, our intern today.

• 3:50:05John Coogan?

  We had our intern build a iPhone today.

• 3:50:06Jordi Hays?

  He assembled it in in under three hours. I don't know if you can see this.

• 3:50:09John Coogan?

  Would Vision Pro have helped you today? Graphical overlays while you're building?

• 3:50:14Speaker 02

  I think it would have helped. I mean, I I didn't have any instructions at all. So I think kind of the the bar is just any instructions.

• 3:50:20John Coogan?

  Putting the instructions.

• 3:50:21Speaker 02

  Vision Pro, you know, I I think it would it would have been helpful.

• 3:50:24John Coogan?

  It could have been good.

• 3:50:25Jordi Hays?

  Okay, yeah. Long Apple, not a investment advice.

• 3:50:27John Coogan?

  But but but my my my takeaway on enterprise Vision Pro is that it's odd because I I heard that they were building a like a. Like a version that was specifically for pairing with a desktop setup and multi-monitors. And that was kind of the, the like one direction they were going in. Ben Thompson was writing like, that's what I want. That's, that's the perfect product. I've always thought that the, that the, the win, like, like they have to win in one category before they win in all of them. Like the iPhone first and foremost was a phone and it replaced a phone. And then it earned the right to win everything. And the Apple Watch first and foremost was a watch and then it became a fitness tracker and everything else. Uh, and so I've always thought that the Apple Vision Pro should have been, hey, we're Apple.

• 3:51:12John Coogan?

  We've never built a TV. This is a replacement for your TV. It's going to be really, really good at Apple TV, movies, IMAX, 3D. Like this is what you buy it for. It's, it comes pre-installed with a ton of movies and, and, and TV shows. We're not even shooting 3D movies or, or spatial video. That's not even relevant. It's just a device and we're just going to super optimize it for, for, for watching movies. Because I got one, that was my favorite thing to do on it, but it wouldn't work in the dark. So I would, I would turn off the lights when I'd go to bed and my wife would be sitting next to me. And, and I'd be like turning the headset on and off because it would lose the tracking and it would pop up like, your vision pro is not working right now.

• 3:51:54John Coogan?

  And it would clearly wasn't, it'd never been used in just like day to day when people watch movies. And so I feel like-

• 3:52:00Jordi Hays?

  Wait, it still doesn't work at night?

• 3:52:02John Coogan?

  It doesn't work in a pitch black room because it has cameras that track the world around you. And so-

• 3:52:07Jordi Hays?

  So you can't even watch a movie with the lights out?

• 3:52:09John Coogan?

  Yeah, yeah. And then, and then the playing mode was a little iffy too. And they had a special, they had a special like mode that you could flip it into. But it's just, it was trying to do too much. And I feel like they should have just been like, this is a home theater for people that can't afford a home theater. And that's a lot of people and that's a lot of iPhone owners. A lot of iPhone owners can afford a, a $2,000 TV, but they can't afford a, a whole cinema room in their house. Because real estate's expensive. Uh, and they, and, and I even heard that one of the, one of the leads on the Apple Vision Pro project was from Dolby. It was a Dolby executive on-

• 3:52:40Speaker 13

  Yeah, Mike Brockwell, the head of it is ex-Dolby.

• 3:52:42John Coogan?

  That's right. And so I thought it was like, okay, just- Lean into that fully. Think about what the experience is. You put this on for two hours. You watch a movie. But there's a whole bunch of different decisions that you make if that's the case. And they clearly kind of did 90% of that and then 10% of the other stuff. And now they're all over the place. And I still just want the home theater on my face.

• 3:53:03Speaker 13

  Did you guys see they showed two people wearing the Vision Pro in the same room on the same couch, watching a movie together?

• 3:53:09John Coogan?

  I didn't see that, but.

• 3:53:10Jordi Hays?

  That is so romantic.

• 3:53:11Speaker 13

  They showed in the keynote.

• 3:53:12John Coogan?

  Everyone hates that, but I actually think that's totally reasonable. I don't think that that's crazy. I think it's fine. I think it's fine.

• 3:53:19Speaker 13

  Wow.

• 3:53:20John Coogan?

  If you can see each other.

• 3:53:21Speaker 13

  Alone together?

• 3:53:22John Coogan?

  Yeah, yeah, no, no, no, no. Because you look over, you see the person. It's the same experience as watching a TV on the wall. It's the same thing, but it's just a bigger TV.

• 3:53:29Speaker 13

  Okay.

• 3:53:29John Coogan?

  It's great.

• 3:53:30Jordi Hays?

  You can still, as long as you can hold hands.

• 3:53:32John Coogan?

  I'm super bullish on that.

• 3:53:34Speaker 13

  Okay.

• 3:53:34John Coogan?

  Yeah, I, I, I, this is a weird take.

• 3:53:36Jordi Hays?

  The bull case for that is that somebody can get up to go to the bathroom or get food and they don't have to pause the movie.

• 3:53:41John Coogan?

  Yeah. No, no, I, I, I think this is. It needs to be future, but they need to make it lighter. They need to make it cooler, like maybe some sort of fan because your face gets hot. Like, there's a lot of, there's a lot of industrial design challenges to get it to be like fun to actually watch a two hour movie or three hour movie. It's still in the demo phase. You, you, you, you put it on for 15 minutes and then you're done.

• 3:53:59Jordi Hays?

  Are you gonna be moving over to the iPad for everything?

• 3:54:03Speaker 13

  For all my content creation?

• 3:54:05Jordi Hays?

  Yes.

• 3:54:05Speaker 13

  I thought that was actually really interesting that they positioned the iPad as like the podcaster device instead of the Mac.

• 3:54:12Jordi Hays?

  Shots fired. Shots fired. Maybe, maybe for weekly, weekly podcasts. I don't think we could run.

• 3:54:21Speaker 13

  I like my iPad. I, I just, until they invent a way on the iPad to multitask as well as the Mac where I can tab between things fast, like I just.

• 3:54:30Jordi Hays?

  Well, so that was a big, that was a big focus. I, I haven't seen it entirely either, but the big focus was on multitasking, allowing you to have multiple windows open at once. But I don't, I don't know if still.

• 3:54:43Jordi Hays?

  Who knows?

• 3:54:43John Coogan?

  Anyway, thank you so much for hopping on. This was fantastic.

• 3:54:46Jordi Hays?

  Yeah, no worries. Go get some scoops. Go get some scoops.

• 3:54:50John Coogan?

  That's what I'm here for. Amazing. I'm out of the spaceship.

• 3:54:53Jordi Hays?

  Scoop, Lord.

• 3:54:54John Coogan?

  It's beautiful.

• 3:54:54Jordi Hays?

  Bye spaceship. Honestly, the grass is looking amazing. So that there's that.

• 3:54:58John Coogan?

  Nice out.

• 3:54:59Jordi Hays?

  Cheers, Alex. Thanks for coming on. Good to see you.

• 3:55:01John Coogan?

  We'll talk to you later. Bye.

• 3:55:03Jordi Hays?

  I am deeply disappointed that they did not launch a mahogany iPhone.

• 3:55:08John Coogan?

  That would have been the best. The official wood of business.

• 3:55:10Jordi Hays?

  The official wood of business. The business class of wood.

• 3:55:13John Coogan?

  Yep. Liquid glass. I'm watching the video from Tim Cook here. It looks good. I don't know. I think it looks.

• 3:55:20Jordi Hays?

  I think it looks cool.

• 3:55:21John Coogan?

  I think it's gonna grow on me. I think it's fine.

• 3:55:22Jordi Hays?

  I think it looks cool.

• 3:55:23John Coogan?

  Yeah.

• 3:55:23Jordi Hays?

  I just don't think, and I'm excited to play around with it.

• 3:55:26John Coogan?

  The idea that Apple's gonna whiff on that is so ridiculous to me. Like, this is, this is, they have all the best people for this.

• 3:55:32Jordi Hays?

  They whiffed on photos.

• 3:55:34John Coogan?

  A little bit. I think you'll get used to it over time. Anyway, this is fantastic. Thanks for watching. Leave us five stars on Apple.

• 3:55:43Jordi Hays?

  Wait, we gotta talk about some reviews. We got some reviews.

• 3:55:46John Coogan?

  Oh, we got some reviews. Let's read some.

• 3:55:47Jordi Hays?

  I'm gonna be pissed if there's no ads in here.

• 3:55:49John Coogan?

  Please.

• 3:55:51Jordi Hays?

  Silicon Valley's Morning Espresso. If NPR did CrossFit and binged Red Bull, you'd get TBPN. It's the Daily Show for Technocrats, hosted by John Coogan and Jordi Hays. Two gentlemen so classy and caffeinated, I had to double check they weren't simulations. Every weekday, TBPN slings the latest hot takes, venture insights, and latest in AGI land, and crypto faster than you can pop a Lucy. One minute it's fortnights in app economics, the next it's an AI Belt and Road geopolitical manifesto, and somehow it all works. It's like if All In had a baby with the Daily Show and then fed that baby a steady diet of E.C. term sheets and synthetic dopamine. 10 out of 10 would recommend, even if this review is written by an LLM trained exclusively on Elon tweets and founders fund pitch decks. Tune in before your GPUs get repossessed.

• 3:56:37John Coogan?

  That's fantastic. Thank you, Vincent.

• 3:56:38Jordi Hays?

  Great. New favorite podcast by a mile by Flynn. Amazing show, amazing host, amazing guest. Can't get enough and keep wanting new episodes to drop earlier, even though it drops every day for three hours.

• 3:56:51John Coogan?

  It's crazy.

• 3:56:51Jordi Hays?

  We're working on it. We might, we might change the time.

• 3:56:54John Coogan?

  We're in hour four now, so.

• 3:56:55Jordi Hays?

  Hooked on TBPN by, TBPN by Harry Campbell. I've been hooked on TBPN lately and really loved the episode that featured the Waymo Toyota partnership.

• 3:57:04John Coogan?

  That was when we were traveling. I said, you were like, yeah, they have a partnership with Toyota. And I was like, oh, you'd get like a Supra? That whole bit about like the Waymo Supra.

• 3:57:13Jordi Hays?

  Yeah.

• 3:57:14John Coogan?

  Stands with the underlining is great.

• 3:57:15Jordi Hays?

  It's like the tech world's version of sports talk radio in the best way possible. John and Jordy keep things fast paced, unfiltered and genuinely fun, but still manage to dig into the serious stuff happening across startups, AI and venture capital. You can tell they've actually built stuff themselves, which makes their takes way more insightful than the usual service level chatter. Whether it's breaking down the latest funding round or grilling a big name founder, it always feels like a real conversation, not a polished PR piece. If you're into tech and want to stay sharp without falling asleep, this shows it. Thank you, Harry. Kind of kind words. Absolute legends of technology and finance, I think. From Dee Beerson. Base takes gong hits and vibes of techno capital abundance are a few words I'd use to describe the show.

• 3:57:59Jordi Hays?

  Really enjoy it seriously. And they do a great job curating guests, some of which are now in my X Rolodex. It's time to accelerate. Love it. Anyways, thank you for all the kind words, folks. We love each and every one of you and go leave us a review, but please put an ad in the review for your business or your company.

• 3:58:17John Coogan?

  We love ads.

• 3:58:18Jordi Hays?

  Or your fund. Put an ad in the review and we'll read it out here on the show. Everybody have a fantastic rest of your day. I'm going to go hit the gong.

• 3:58:27John Coogan?

  Take us out with a gong hit and then we'll check in on Tyler.

• 3:58:31John Coogan?

  It's an historic day. Tyler Cosgrove, intern at TVPN, has assembled the first iPhone in America, folks.

• 3:58:38Jordi Hays?

  He did it, folks.

• 3:58:38John Coogan?

  There are no pieces left.

• 3:58:40Jordi Hays?

  In a cave. He did it in a cave with scraps.

• 3:58:43John Coogan?

  Is it signed now? Show us off. Show us what you got.

• 3:58:48John Coogan?

  Oh, he signed it. There we go. Right there. Yeah. Let us know if you want that, we'll mail it to you.

• 3:58:54Jordi Hays?

  Tyler.

• 3:58:54John Coogan?

  If you've been listening for four hours, you deserve it.

• 3:58:57Jordi Hays?

  We knew you were cracked. We didn't know you were this cracked.

• 3:58:58John Coogan?

  This is fantastic. Thanks so much.

• 3:59:01Jordi Hays?

  Absolute legend.

• 3:59:02John Coogan?

  We will see you tomorrow. We have another great lineup. Have a great day.

• 3:59:06Jordi Hays?

  Have a great afternoon and evening. Cheers.