Apple Looks to Anthropic and OpenAI for Siri Upgrade, Senate Passes Trump's Megabill | Zak Kukoff, SWYX, Matthew Prince, Luca Netz, Julia Steinberg, Joel Hron, Mackenzie Burnett

(02:32) - Apple Looks to Anthropic and OpenAI for Siri Upgrade (04:06) - Senate Passes Trump's Megabill (08:46) - Grammarly Acquires Superhuman (12:08) - Amazon on the Cusp of More Robots Than Humans in Factories (15:20) - Microsoft's AI Diagnoses Beat Doctors (19:31) - Apple Eyes Anthropic, OpenAI to Power New Siri (49:01) - Timeline Reactions (57:02) - Zak Kukoff, a Washington correspondent, discusses the Senate's recent removal of a proposed 10-year moratorium on state-level AI regulation from President Trump's comprehensive tax and spending bill. He highlights the bipartisan opposition to the moratorium, noting that Senator Marsha Blackburn of Tennessee led the amendment to eliminate it, emphasizing the need for states to protect their citizens in the absence of comprehensive federal legislation. Kukoff also touches on the broader implications of the bill, including potential Medicaid cuts and the political dynamics surrounding its passage. (01:12:41) - Shawn Wang, also known as Swyx, is a developer experience leader and angel investor who has led developer tooling at AWS, Two Sigma, and three devtool unicorns (Netlify, Temporal, Airbyte). He is the founder of Smol AI, which produces AI News, a widely read AI industry newsletter. In the conversation, he discusses Meta's aggressive recruitment of AI talent, the resilience of OpenAI despite key departures, and the evolving landscape of AI development, emphasizing the strategic shifts companies are making to stay competitive. (01:31:30) - Matthew Prince, co-founder and CEO of Cloudflare, discusses the challenges publishers face as AI-generated summaries reduce traditional search traffic, threatening their business models. To address this, Cloudflare is developing tools to prevent unauthorized content scraping and aims to establish a system where AI companies compensate content creators fairly. Prince emphasizes the need for a balanced approach that rewards original content while fostering a sustainable digital ecosystem. (02:03:25) - Luca Netz, CEO of Pudgy Penguins, discusses the transformative potential of stablecoins in driving mainstream crypto adoption, emphasizing their role in enabling consumer-friendly applications beyond speculative investments. He highlights the importance of blockchain's censorship-resistant payment systems in reducing transaction costs and barriers, particularly for entrepreneurs facing challenges with traditional financial intermediaries. Netz also shares insights into leveraging community incentives to achieve significant retail success, exemplified by Pudgy Penguins' strategic product launches and partnerships with major retailers. (02:19:15) - Julia Steinberg, a recent Stanford graduate and writer for *Palladium* magazine, discusses the evolving job market for elite university graduates, highlighting a shift from traditional high-status roles to positions in venture capital and entrepreneurship. She observes that the proliferation of AI technologies is rendering certain careers obsolete, leading to a sense of economic nihilism among her peers. Steinberg also notes a paradox where students feel entitled to prestigious jobs yet are unwilling to pursue roles they perceive as less elite, contributing to underemployment and dissatisfaction. (02:33:12) - Joel Hron, Chief Technology Officer at Thomson Reuters, discusses the company's integration of artificial intelligence across its services, emphasizing the legal industry's rapid adoption of AI technologies. He highlights the use of Retrieval Augmented Generation (RAG) to ground large language models with reliable content, reducing errors and enhancing accuracy. Hron also underscores the importance of human expertise in developing AI solutions, ensuring they meet the high standards expected by professionals. (02:46:37) - Mackenzie Burnett, CEO and co-founder of Ambrook, a financial management software company for American family-run businesses, discusses the company's mission to enhance profitability and resilience in agriculture by providing comprehensive financial tools tailored for farmers and ranchers. She highlights the challenges faced by producers, such as managing complex financial records and accessing capital, and explains how Ambrook's platform addresses these issues by offering accounting, payments, banking, and card services designed for those who spend more time in the field than the office. Burnett also announces Ambrook's recent $26.1 million Series A funding led by Thrive Capital, emphasizing the company's commitment to supporting sustainable and resilient farming practices. 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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.

• 0:00Jordi Hays?

  You're watching TVP.

• 0:02John Coogan?

  Today is Tuesday, July 1st, 2025. We are live from the TVP ultra dome. The temple of technology, the fortress of finance, the capital of capital. We have the current thing hot off the presses. It's Siri V2.

• 0:18Jordi Hays?

  Apple is making moves.

• 0:19John Coogan?

  Apple's making moves. They are weighing.

• 0:22Jordi Hays?

  They are listening.

• 0:23John Coogan?

  They're listening. They're weighing using anthropic or open AI to power Siri in a major reversal. Everyone thought they were going to do it in-house.

• 0:31Jordi Hays?

  Can you imagine the actual like customer feedback that they get on the Siri product? It's like people try to get Siri to do a simple thing. It fails and they're just hearing somebody swearing or something while they turn it off.

• 0:44John Coogan?

  I hadn't even thought about that.

• 0:45Jordi Hays?

  It's like, we've heard you loud and clear.

• 0:47John Coogan?

  At scale, yeah.

• 0:48Jordi Hays?

  We've heard you loud and clear.

• 0:49John Coogan?

  Yeah.

• 0:49Jordi Hays?

  You guys are mad.

• 0:50John Coogan?

  I don't even know if that's, is that really, I feel like people, the expectations for Siri have also been low because it was introduced a decade ago and it was like the, the thing that sets the timer and the thing that you ask to get the weather and that's it. And so people haven't been asking for super intelligence or chat, the chat GPT like experience. And so.

• 1:09Jordi Hays?

  Or even a companion. Certainly not.

• 1:10John Coogan?

  Yeah, certainly not.

• 1:12Jordi Hays?

  You don't hear about people falling in love with, with Siri.

• 1:14John Coogan?

  It was kind of pitched like that though, back in the day.

• 1:16Jordi Hays?

  Yeah.

• 1:16John Coogan?

  It was very much like Siri, we're giving it a human's name because it will be as integrated into your life as a human. And that was the original pitch. And now it's possible, but not possible with the team they have on staff. So they're partnering with anthropic or open AI.

• 1:30Jordi Hays?

  Or they're exploring.

• 1:31John Coogan?

  Bidding war.

• 1:32Jordi Hays?

  Bit of a bidding war.

• 1:33John Coogan?

  Yeah.

• 1:34Jordi Hays?

  And, uh, Apple allegedly has been balking at some of the prices being thrown out.

• 1:40John Coogan?

  Okay.

• 1:40Jordi Hays?

  Uh, anthropic, anthropic wants.

• 1:43John Coogan?

  How much?

• 1:43Jordi Hays?

  Billions a year and, and ramping up over time.

• 1:46John Coogan?

  Yeah. What's interesting is that like, it could go the other way, right? We're like, we're like anthropic or open AI could pay Apple, like Google pays Apple.

• 1:54Jordi Hays?

  No, I imagine knowing, knowing Tim.

• 1:56John Coogan?

  Yeah.

• 1:57Jordi Hays?

  He'll figure out a way to make it a profit center.

• 1:59John Coogan?

  I would think so. Yeah. I mean, the, the, the data.

• 2:01Jordi Hays?

  But the issue is there's real costs to running these products.

• 2:05John Coogan?

  For now, yeah. But I mean, it, it seems like the cost will come way down. And I mean, I, I believe that the current chat GPT, open AI, Apple. Deal is revenue neutral for both. I don't think there's any money changing hands, but it's also kind of a mess of a product because you have to say, hey Siri, go to chat GPT and look this up. And then it pops up a prompt that says, would you like to use chat GPT even though you just said that and I don't understand what you said? And then you have to click yes. It's like, come on, Apple. Like you know what I want to do.

• 2:38Jordi Hays?

  Forward progress. The markets like it. It's up 2%.

• 2:41John Coogan?

  Mark Gurman has the story in Bloomberg. We will be diving into that. Said it's sidelining its own in-house models and potentially a blockbuster move aimed at turning around its AI effort. We should go to the mag seven market caps to track the horse race of the biggest tech companies in the world. Let's pull them up on the screen and see where people are tracking. So Apple's in third at 3.1 trillion. Good to see that they're over 3 trillion. Stock's up 2% today. Nvidia and Microsoft.

• 3:12Jordi Hays?

  Meta is climbing as well. And one of these companies is not like the other.

• 3:17John Coogan?

  Meta does not.

• 3:17Jordi Hays?

  Measured in Tesla.

• 3:19John Coogan?

  Oh.

• 3:20Jordi Hays?

  Measured in the in the paltry billions.

• 3:22John Coogan?

  Congratulations to Apple. 2% up. You'd love to see it. They're up 2%. Yeah, Meta being in sixth doesn't feel like a sixth company to me based on the team and the and the moves they've made this week, which we will continue to dive into. We have SWYX on the show today to break down some of the AI talent moves. We have a bunch of other folks coming on the show today. Talk about that. Anyway.

• 3:48Jordi Hays?

  Other news, the Senate passes Trump's mega bill, the big beautiful bill after an all night session. They went all night.

• 3:56John Coogan?

  I like that.

• 3:56Jordi Hays?

  And it's got to get through the house still, but Elon is fuming.

• 4:02John Coogan?

  Play the Ashton Hall sound effect for Elon coming coming for the bill. It's an absolute war on the timeline. The timeline's in turmoil because Elon Musk said, "Anyone who campaigned on the promise of reducing spending but continues to vote on the biggest debt ceiling increase in history will see their face on this poster in the primary next year."

• 4:22Jordi Hays?

  Pinocchio mode.

• 4:23John Coogan?

  Liar voted to increase America's debt by five trillion.

• 4:27Jordi Hays?

  It's actually never been easier to make your enemies look like Pinocchio.

• 4:30John Coogan?

  Yeah, but I feel like if you put like, I don't know, I don't even know who voted for it. Let's just say like Ted Cruz or something. If you put like Ted Cruz's face on here, like, are you going to lose the Pinocchioness?

• 4:42Jordi Hays?

  AI will find a way.

• 4:43John Coogan?

  I feel like it could be a little bit, a little bit rough. Anyway, Elon's upset. He's trying to start a new party.

• 4:50Jordi Hays?

  The America Party?

• 4:51John Coogan?

  He said vox popula, populi, vox dei. He wants to start the American Party.

• 4:55Jordi Hays?

  And he is pissed because Polly Market is showing that the, is expecting the reconciliation bill, the big beautiful bill, to pass by July 4th.

• 5:09John Coogan?

  Seventy percent by July 5th and sixty-two percent, oh yeah, sixty-two percent by July 4th and almost certainly by the end of the month.

• 5:15Jordi Hays?

  So this will be the one to watch. They're voting, I guess the first vote is tomorrow.

• 5:19John Coogan?

  Yeah.

• 5:20Jordi Hays?

  We'll be following that.

• 5:21John Coogan?

  Yeah, it'll be interesting. Lots of pork. But if you're AGI-pilled, it doesn't matter.

• 5:27Jordi Hays?

  Yeah.

• 5:28John Coogan?

  We are going to be printing at 10% GDP, folks, in just, just a few thousand days when superintelligence arrives. These debts are going to matter.

• 5:36Jordi Hays?

  We're weeks, if not days, away. Many people are saying.

• 5:39John Coogan?

  And so if you're, if you're against this bill, you're just telling yourself about your AGI timelines. You're like, "I don't really think that superintelligence is coming."

• 5:46Jordi Hays?

  Yeah, it is. I think Teal was pushing, generally pushing on Elon a bit in the interview he did last week around like, "Okay, so are humanoids..." Humanoids are going to be important. You're obviously making them. Are they going to impact the economy? Are they going to accelerate growth?

• 6:06John Coogan?

  Yeah.

• 6:07Jordi Hays?

  You know.

• 6:07John Coogan?

  This is the post 1970s stagnation. You know, we've been growing at 2%. Satya Nadella is asking the question of will AI accelerate GDP growth? Because if GDP growth accelerates a lot, it changes the dynamic around everything. Like, not just this debt, which we've been kind of lightly joking about, but also like redistribution.

• 6:26Jordi Hays?

  To Elon's credit, he's also said, when he initially exited Doge, and just stopped being a special employee, he did say the only way out is growth. So he knows this too.

• 6:36John Coogan?

  Yeah.

• 6:37Jordi Hays?

  But I think he can hold both of these ideas, which is we need to grow, but he's also frustrated.

• 6:42John Coogan?

  The Hegelian dialectic, of course. Yeah, I mean, if GDP is growing really, really fast, you could even keep tax rates the same or lower them and still pay down the debt and do more redistribution. Like, you could be paying people, like, you could have, like, something that feels like a massive social safety net, something that feels like UBI or socialism, but actually tax people less because the growth is so significant. So, it all changes when superintelligence arrives.

• 7:09Jordi Hays?

  Maybe, maybe Zoron is just so AGI-pilled himself.

• 7:12John Coogan?

  That's true.

• 7:13Jordi Hays?

  That he's like, yeah, we're gonna have plenty.

• 7:15John Coogan?

  You have plenty to go around.

• 7:17Jordi Hays?

  We're gonna have such high levels of production that sure the state can just seize a little bit.

• 7:22John Coogan?

  Or, alternatively, maybe he's a hardcore Bitcoiner. And so if he wants, if he wants there to be no billionaires, no, it is impossible mathematically to be a billionaire in Bitcoin because there's only 21 million of them. So the richest you could possibly be is a millionaire if you owned over 5% of the Bitcoin supply, right? So there will never be a Bitcoin billionaire because there aren't a billion of them. Whereas there are billions of dollars.

• 7:47Jordi Hays?

  Maybe he doesn't want people in the network to vote to expand the supply.

• 7:50John Coogan?

  Yes. So he's probably against the expansion of the Bitcoin supply, but maybe he's a hardcore Bitcoiner.

• 7:55Jordi Hays?

  He's a hardcore Bitcoiner, but he's against inflation.

• 7:58John Coogan?

  Yes, yes, exactly, exactly. Anyway, you know the news?

• 8:01Jordi Hays?

  We're getting somewhere.

• 8:02John Coogan?

  We gotta hit that gong, Jordy, for Rahul Vora.

• 8:05Jordi Hays?

  Where's the hammer, John?

• 8:06John Coogan?

  The founder.

• 8:06Jordi Hays?

  You got the hammer?

• 8:07John Coogan?

  Of Superhuman. He has sold his company to Grammarly for an undisclosed sum.

• 8:15Jordi Hays?

  Nothing like hitting the gong for an undisclosed sum. You just don't, you don't know what's going on.

• 8:21John Coogan?

  Could be a million, could be a billion, who knows?

• 8:22Jordi Hays?

  Um, no, but I've used, uh, Superhuman for many, many years now. How many, when did they really get out? Was it like six years ago?

• 8:29John Coogan?

  I think it was, it had been older. I, I feel like it came on the scene like 2018.

• 8:33Jordi Hays?

  I remember I was, I think, yeah, I was graduating college and there was this concept that the Thread Boys at the time were talking about luxury software.

• 8:40John Coogan?

  Oh, this was it, yeah.

• 8:41Jordi Hays?

  The idea of, the idea of charging thirty dollars for email, which was just default free. They grew really quickly. Uh, apparently at the time of this acquisition, they have about thirty-five million of ARR, very impressive.

• 8:53John Coogan?

  Of ARR. Okay. So that's like, what, a hundred thousand users paying roughly? Something like that?

• 8:59Jordi Hays?

  Something like that.

• 9:00John Coogan?

  Between a hundred and two hundred thousand users paying thirty dollars a month. Got it. Pretty cool. I mean, yeah, serious business, that thirty, thirty-five mil, you know, if it's run effectively, could have been, you know, kind of a lifestyle business, throwing off a couple million dollars in free cash flow.

• 9:15Jordi Hays?

  Probably could have done a lot more than that.

• 9:17John Coogan?

  Yeah, potentially.

• 9:18Jordi Hays?

  Yeah, I'm really interested. We should have the CEO of Grammarly on because I want to understand. So they acquired Coda. That was surprising. Coda was another company that had a lot of, uh, you know, meaningful traction, a lot of fans, it was a great product, but I, I don't think it was breaking out, right? It wasn't, you know, on a path to being a, a public company itself or, or a billion dollar outcome. And then, um, now they're adding Superhuman, uh, to the network. I don't see yet exactly how these tools all interconnect, right? Grammarly, uh, helps you with grammar in the browser. Superhuman, uh, does have some AI functionality. I'm sure, I'm sure, uh, and I know Coda does as well.

• 9:59Jordi Hays?

  Unclear to me yet how, uh, if it's like the same user that's going to be using all of these things, if it's truly a productivity suite.

• 10:07John Coogan?

  Yeah.

• 10:07Jordi Hays?

  Or it's a basket of...

• 10:09John Coogan?

  I mean, selling a point solution in the enterprise is hard with, when you look at the, the story of Slack versus Teams, like Microsoft just has so much dominant distribution there. Actually having someone rip out their productivity suite and say, as a company, we're using Superhuman for email and Grammarly for writing and, you know, this other product for docs and, uh, and then not to mention the fact that Notion's running somewhat of a similar playbook with Notion Mail and Notion Docs and, and then Google has a similar productivity suite. So I mean, it's a tall, it's a tall order, but will be cool to see how these different products interact because they're clearly excited about tying them all together in some interesting way.

• 10:48Jordi Hays?

  Yep.

• 10:49John Coogan?

  Very cool. Anyway, you mentioned humanoid robotics and you know, there's another player. It's not just Elon, it's Jeff Bezos as well. Amazon now has as many robots as employees in its warehouses. So the number of-

• 11:04Jordi Hays?

  Let's give it up for the hardworking robots.

• 11:07John Coogan?

  Robots, yes.

• 11:08Jordi Hays?

  They haven't striked yet. They haven't striked yet.

• 11:11John Coogan?

  The number of Amazon employees per facility over the last 10 years has kind of oscillated from 750, 800 employees per facility went up to 1,000. Now it's down around 700, down 30% over the last five years. That's the post-COVID era. And the packages handled by Amazon end to end per employee has skyrocketed over that time from, from zero to over 4,000. And so the robots are taking over. They're about to cross their 1,000,000,000 robot deployed in an Amazon warehouse. So congrats to Jeff Bezos. Hope you enjoyed the wedding. Yeah, we should hit the gong for that. Maybe the gong sounded-

• 11:49Jordi Hays?

  Yeah, I saw a post, somebody, maybe it ended up in the timeline, but I'll say it now. It was like, a lot of people have opinions on Jeff Bezos' wedding. I ordered a phone last night at 10:00 PM and I got it this morning. I think he should be able to celebrate however he wants. So I'm happy for him and-

• 12:06John Coogan?

  Built a huge business. Very helpful. This was Kyle Towns.

• 12:09Jordi Hays?

  And even looking at, like, Amazon puts up over $100 billion a year of profit.

• 12:16John Coogan?

  Yeah.

• 12:17Jordi Hays?

  Let the man have a $50 million a year wedding.

• 12:21John Coogan?

  A year, not a year.

• 12:22Jordi Hays?

  Not a year. Hopefully not a year. Hopefully not a year.

• 12:24John Coogan?

  He's only done it twice.

• 12:26Jordi Hays?

  Some guys get to that stage of life and they just enjoy weddings, right? So they just have, you know, frequent-

• 12:33John Coogan?

  There was this narrative around the wedding, actually, that, oh, he only invited celebrities because like Sydney Sweeney went and everyone was like, oh, is he really tight with like Sydney Sweeney? Like, and but, but, and I was saying like, look, he invited 200 people. You're seeing Sydney Sweeney because like, if you're a, if you're a celebrity, like, you know- Paparazzi photographer, you're not taking a picture of like RJ Scaringe from Rivian, who Bezos invested in and might have been there, I don't know. Or like Andy Jassy, the current CEO of Amazon, probably got the invite, but is doesn't get in the paparazzi.

• 13:06Jordi Hays?

  Also, he's having a party.

• 13:08John Coogan?

  Yeah.

• 13:08Jordi Hays?

  He's having a party.

• 13:09John Coogan?

  But you're gonna invite your boys, your business.

• 13:11Jordi Hays?

  Yeah, I'm sure, I'm sure he did. Yeah, yeah, the media is obviously gonna fixate on who are the biggest stars there.

• 13:15John Coogan?

  Exactly.

• 13:16Jordi Hays?

  They are who drive clicks.

• 13:17John Coogan?

  But that's why we need to send our paparazzi.

• 13:19Jordi Hays?

  And you know, people don't.

• 13:20John Coogan?

  Andy Jassy.

• 13:23Jordi Hays?

  That's true.

• 13:23John Coogan?

  Yeah.

• 13:24Jordi Hays?

  That would, Andy Jassy spotted.

• 13:27John Coogan?

  And then it's just, yeah, yeah. And then it's just like Sydney Sweeney off blurry in the left. And it's like, everyone's like, you missed the most important person at the wedding?

• 13:36Jordi Hays?

  We did not.

• 13:37John Coogan?

  No, we didn't. Andy Jassy is the most important person at that wedding potentially, if he wins. Uh, anyway, in other news, Commonwealth Fusion Systems, a fusion startup, uh, has struck a deal with Google. Historic news. We've signed a landmark agreement with Google, a multifaceted partnership that dramatically advances our commercial fusion energy mission. Google signed an off-take agreement for 200 megawatts of power from our first arc power plant. Google is increasing its corporate investment in, uh, in Commonwealth Fusion Systems. Google has the option to procure power from future arcs. The deal is very strong signal that the world wants clean, secure power that Fusion offers. Together, we're catalyzing the fusion market. So there's a couple players in this space, but all the.

• 14:17Jordi Hays?

  Interesting use of hashtags as well, dating themselves a little bit. They maybe have a veteran social media manager.

• 14:23John Coogan?

  Maybe, maybe.

• 14:24Jordi Hays?

  On board.

• 14:25John Coogan?

  Maybe more for like the academic world.

• 14:26Jordi Hays?

  Fusion energy, hashtag.

• 14:27John Coogan?

  Power moves, because people are searching that. Didn't Elon ban hashtags recently?

• 14:32Jordi Hays?

  But from ads.

• 14:33John Coogan?

  Okay, so you can still rip them in, in hard posts. Uh, yeah. Uh, anyway, beautiful video. Good luck to them.

• 14:39Jordi Hays?

  And if you want to learn more about Commonwealth Fusion Systems, go to hashtag.

• 14:45John Coogan?

  Stop it. Stop it.

• 14:47Jordi Hays?

  No, this is great, super exciting.

• 14:49John Coogan?

  So, I mean, this is, uh, this is like the flip side of the Sam Altman Helion deal where OpenAI and Sam Altman, he's clearly thinking about power being very, very important for the long term. Crusoe has been very important in finding stranded energy, building natural gas plants and helping scale up Stargate in Abilene, Texas.

• 15:09John Coogan?

  And Commonwealth Fusion Systems is kind of the other side of that and they're partnering up with Google. So good to see it. In other news, Microsoft claims that their new AI framework diagnoses four times better than doctors. And people are kind of putting this in the truth zone, says Dr. Dominic Ng, I'm a medical doctor and I actually read the paper. Here's my perspective on why this is both impressive and misleading. There were some interesting things where in the control set, I believe the doctors couldn't use Google. So it wasn't necessarily like a current doctor versus the Microsoft AI system. It was like a, like a, like a doctor, just completely-

• 15:49Jordi Hays?

  Sort of acting like a human GPU.

• 15:51John Coogan?

  Yeah, yeah. Just being like completely pen and paper, which isn't really the benchmark that you need to go against, but still impressive. Maybe the Forex is a little overstated.

• 16:00Jordi Hays?

  Cause the average doctor in the United States, when they're sitting with a patient is Goog-

• 16:05John Coogan?

  They have Google.

• 16:05Jordi Hays?

  The whatever's happening and then Reddit at the end. And then going to Reddit and then OpenAI is scraping that.

• 16:12John Coogan?

  Yeah, yeah, yeah.

• 16:12Jordi Hays?

  And, you know, summarizing it.

• 16:14John Coogan?

  Yeah. But it is cool because now we have a Pareto Frontier. We have a graph of the average total diagnostic care per case, how much it costs versus the diagnostic accuracy. And Microsoft with this team, this is led by Mustafa Suleyman, who had, in an interesting trade deal, was over at Google in DeepMind, co-founded DeepMind.

• 16:35Jordi Hays?

  Yep.

• 16:36John Coogan?

  Then did Inflection AI and got like Aqua hired in one of those like zombie deals to go to Microsoft. He's now the head of AI at Microsoft. And he has been leading this, this, um, this push that's much more, it feels maybe more Microsoft coded than what Apple's, or than what Google is doing on the DeepMind team where Google is focused on like solving these very fundamental questions in, in science and health. Like, how do you do protein folding? That's not something that you go into like your primary care doctor and say like, my shoulder hurts and like they need to know how to fold proteins, right? But if you go into your doctor and you say, my shoulder hurts, like having an AI tool, basically like a great fine tuned-

• 17:19John Coogan?

  That bot that's HIPAA compliant and works within the Microsoft Teams ecosystem to pull the patient records in appropriately, fine tune on the right data and then and then suggest a bunch of things that the human doctor can then go investigate. That's super valuable. And this feels like something that Microsoft is equipped to roll out to the network of doctors and clinicians that probably are already on Microsoft toolsets and Microsoft stacks. So, good stuff from Microsoft. We'll have to get somebody on the show to talk about that since AI in healthcare is all the rage. Anyway, hit that sound effect, Jordy, as we move to our next important news item, which is that ramp.com is available now for you to

• 18:02Jordi Hays?

  Time is money.

• 18:03John Coogan?

  Save both. Easy use corporate cards, bill payments, accounting and a whole lot more all in one place. Go to ramp.com.

• 18:08Jordi Hays?

  Ramp.

• 18:09John Coogan?

  Anyway, we have a fun post here from vivid void says, I'm literally plotting on your rise, bro. I'm literally up in the lab scheming on beautiful abundance for you. I'm cooking up ways for a rising tide to lift all of our boats. I'm praying on, I'm praying for your gains. I'm lighting a candle to your inevitable splendor, dude. GM.

• 18:31Jordi Hays?

  And we mean that from the bottom of our hearts.

• 18:33John Coogan?

  Yes.

• 18:34Jordi Hays?

  To all of you.

• 18:35John Coogan?

  Well, if you're looking to design a meme like this, head over to figma.com. Think bigger, build faster. Figma helps design and development teams build great products together. And you can get started for free at figma.com. Signal had a post breaking down Mark Gurman's analysis of Apple weighing Anthropic or OpenAI in the major power shift in the Siri game. Signal says, absolutely astonishing. Apple used to own the full stack, silicon to software to services. Now they're outsourcing the one layer that will define the next decade of computing. It's a metaphysical betrayal of their own DNA. Anthropic and OpenAI don't need Apple, but Apple desperately needs one of them. This puts Apple under the models. It's integrating wild reversal. Whoever they choose, they now owe existential dependency

• 19:18John Coogan?

  to. And finally, if it consumes, if consumers realize Siri does not equal Apple anymore, that it's powered by OpenAI or Anthropic, then what exactly is Apple's IP? Thin shell over someone else's mind? That kills the aura of vertical magic.

• 19:32Jordi Hays?

  I

• 19:36Jordi Hays?

  It's exciting.

• 19:37John Coogan?

  It's certainly exciting.

• 19:38Jordi Hays?

  It's exciting. I would, I would push, push back and say OpenAI and Anthropic don't need Apple. I would say that OpenAI, sure, they don't need Apple, but integrating deeply at the hardware layer is going to be important. Otherwise, they wouldn't buy Johnny Ive's Love From. They wouldn't spend billions of dollars trying to develop their own hardware device. Obviously, they're trying to figure out what's after phones or what, what could complement phones.

• 20:05John Coogan?

  Yep.

• 20:06Jordi Hays?

  But ultimately, I think it is a, for both companies, extremely important relationship in the context of consumer, right? Is this going to impact Anthropic's code gen business? No. But will this?

• 20:20John Coogan?

  It might. It might in the sense that if I'm asking Siri to do tasks that require writing code and the models are generating more code, that's more training data, right? Like that example of like, I took a photo of Pat McAfee. I took a screenshot from the Pat McAfee Show and asked, how tall is his desk? And ChatGPT 303 wrote like a thousand lines of Python to go through and calculate how tall that desk was. And then I was able to say, basically by thumbs up or thumbs down, or asking another question, I was able to give it human feedback on whether or not that code path was the accurate, if it got me the answer I wanted.

• 21:02John Coogan?

  And if I, if I walk away from that, that's a signal. If I ask another question, that's a signal. If I give it a thumbs up or a thumbs down, that's another signal. And so there actually is a world where if you need to test a ton of different real world

• 21:15Jordi Hays?

  Yeah.

• 21:16John Coogan?

  code generation tasks and, and is the code that you're writing actually useful to the consumer? The average consumer, the person who's just asking Siri for random stuff, maybe that is valuable. And so I, I don't know. I'm still, I'm still curious as to like,

• 21:29Jordi Hays?

  Maybe, but at the same,

• 21:30John Coogan?

  What is the flow of value accrual here?

• 21:31Jordi Hays?

  At the same time, obviously, are they going to get better, more valuable data from just having tens of thousands or hundreds of thousands of developers? Building on

• 21:39John Coogan?

  True, true.

• 21:40Jordi Hays?

  Claude code daily.

• 21:41John Coogan?

  Yeah.

• 21:42Jordi Hays?

  The other, the other thing is, is what, what, what's completely unclear so far is will consumers just be talking to Siri and it's still the relationship, just like Siri might be running on some cloud somewhere. Consumers aren't saying, oh, Siri's not Apple because it's not their own servers.

• 22:02John Coogan?

  Well, Apple does push on that point very precisely because they say around privacy. They say, yes, when you use our models, it is on our cloud and it is super private and it is on device.

• 22:12Jordi Hays?

  Yeah, but they can still partner with an AI or an anthropic and figure out how to deliver that same end

• 22:19John Coogan?

  Yeah.

• 22:19Jordi Hays?

  value prop.

• 22:20John Coogan?

  Yeah, it seemed like a lot of the privacy narrative at Apple was about control of the ecosystem and the ability to, to, to really push on the Apple tax and justify it, right? And, and maintain that leverage. Um, I don't know. It, it's interesting.

• 22:34Jordi Hays?

  And also remember Siri was an acquisition.

• 22:36John Coogan?

  Yeah.

• 22:36Jordi Hays?

  Consumers didn't have an issue with that saying, oh, this isn't Apple code.

• 22:42John Coogan?

  Yeah, yeah, yeah.

• 22:43Jordi Hays?

  You, you, this isn't

• 22:44John Coogan?

  Homegrown.

• 22:45Jordi Hays?

  This isn't farm to table. This isn't handmade.

• 22:48John Coogan?

  Can you imagine if consumers cared about that? It's like, this was technically an aqua hire, not an acquisition. Oh no, I don't want to wear beads. Like the, the earn out structure wasn't at to my liking. Like only one board seat changed hands? I wanted, I wanted three board seats in the acquisition. No.

• 23:07Jordi Hays?

  Yeah, it was telling though, that, uh, uh, Presh here has a post.

• 23:12John Coogan?

  Yes.

• 23:12Jordi Hays?

  Claude gave Tim Cook sticker shock. I was referring to this earlier in the show.

• 23:17John Coogan?

  Yes.

• 23:17Jordi Hays?

  Uh, anthropic have asked Apple for a multi-billion dollar annual fee that increases sharply each year. Very acceleration pill.

• 23:25John Coogan?

  Yes.

• 23:26Jordi Hays?

  Anthropic.

• 23:26John Coogan?

  Yes.

• 23:27Jordi Hays?

  Uh, but, uh, yeah. So, so ultimately I think that.

• 23:33Jordi Hays?

  That feels like, you know, Apple having a cost center that can scale exponentially with usage is not going to be something they're super excited about because at the same point in time, they're trying to show we are this ecosystem of software products. Yes, hardware is important, but really, you know, we're growing services revenue. And so if their costs are growing sharply, as defined here, but the surprising thing is, is yeah, you could imagine a world where a part, you know, OpenAI says, we'll give it to you for free for the first five years or something like that, right?

• 24:09John Coogan?

  I mean, it could even be that

• 24:11Jordi Hays?

  Because if Apple wants to actually

• 24:13John Coogan?

  OpenAI is paying Apple because if they are able to drop the inference costs low enough that it's similar to serving a Google search and they're able to stuff ads in it, that would be incredibly valuable. Like, imagine if you go to Siri and you say, I'm looking for a new backpack and ChatGPT can dynamically insert out ads into that response within Siri. That should be extremely valuable. And so that, I mean, that's the, that's the current structure that Google has, that's the current arrangement that Google has. I'm, it's unclear to me how much, how much different the market will be going forward. I don't know. Anyway, let's read through some of this Mark Gurman report in Bloomberg, Apple

• 24:55John Coogan?

  Ways Using Anthropic or OpenAI to Power Siri in Major Reversal. I'll read through some of this and then I'll want your reaction, Jordy. Apple is considering using artificial intelligence technology from Anthropic BPC or OpenAI to power a new version of Siri, sidelining its own in-house models in a potentially blockbuster move aimed at turning around its failing AI effort. The iPhone maker has talked with both companies about using their large language models for Siri, according to people familiar with them. It asked them to retrain versions of their models that could run on Apple's cloud infrastructure for testing, who asked not to be identified, discussing private deliberations. Interesting. So, I mean,

• 25:37John Coogan?

  I don't know that Apple's cloud infrastructure has a lot of H200s and is ready. I mean, they certainly could not serve 4.5, like a truly large model like that.

• 25:45Jordi Hays?

  Another $100 billion customer for Jensen.

• 25:47John Coogan?

  For Jensen. I mean, realistically, like, Apple has enough of a relationship with TSMC that they could go and do kind of like, you know, the A3, the A, or the, the Apple silicon, you know, the M2 chip, the M3 chip, like, the M4 chip. They could do a different run with TSMC that's more optimized for inference of large models in the data center context. But it does seem like it'd be a very different muscle for Apple since they have not been. I mean, when you think Apple's cloud infrastructure, it's like storing photos. It's like iCloud. Like, that's probably their biggest service. Or like, I guess, like, Apple Music, Apple TV, like, they serve files. They don't do a lot of machine learning inference versus, say, Meta, that already

• 26:31John Coogan?

  has a, you know, $100 billion data center that just does recommendation algorithms and machine learning and inference. It's not fully like a transformer, a large transformer model, but it is, you know, multi parameter model for deciding what ads go where and what reels get served to you. So it would definitely be a new.

• 26:50Jordi Hays?

  They're working overtime to serve you the perfect reel right now.

• 26:52John Coogan?

  For sure, for sure. And, and, and Apple just doesn't have that scaled GPU cluster that I'm aware of. So they'll have to call up Dylan Patel and some folks to get it done. Call up Jensen, maybe, who knows. If Apple ultimately moves forward, it would represent a monumental reversal. The company, the company currently powers most of its AI features with homegrown technology. It calls Apple foundation models and had been planning a new version of its voice assistant that runs on that technology for 2026, but it seems like they're backtracking. Switch to Claude or ChatGPT models for Siri would be an acknowledgement that the company is struggling to compete in generative AI, the most important new technology in decades. Apple already allows ChatGPT to answer web-based search queries in Siri, but the assistant itself is powered by Apple.

• 27:37John Coogan?

  Apple's investigation of third, into third-party models is at an early stage and the company hasn't made a final decision on using them. Marking a change. Which is under discussion for next year could allow Cupertino based Apple to offer Siri features on par with AI assistance on Android phones, which you don't hear about that much. I see the Gemini demos on-

• 27:58Jordi Hays?

  You don't, your friends that use Android phones don't, don't talk about how they're-

• 28:02John Coogan?

  You know the Lone Rangers on Android.

• 28:04Jordi Hays?

  The Lone Ranger-

• 28:04John Coogan?

  You know, we got one in our group chat, but other than that, it is rare. But even then, I feel like there would be more like viral X posts about cool Android features if they had really done well on the Gemini product, like implementation. And it's just like, maybe not quite there, but Gemini is great. The models are really top tier. The Gemini app on iOS is not amazing. Like the, the text to speech is really, really rough. Like you click, you click dictate and then it will just stop dictating when you pause and then just submit their query.

• 28:42Jordi Hays?

  Yeah.

• 28:42John Coogan?

  And so you can be with ChatGPT, I love it because I open it up and I hit that button and I think and I say, okay, I'm trying to do a research on the Mag 7 and I want to look at Mag 7, their performance over the last decade. So go back and pull what their market cap was 10 years ago and then what it was today and then create a table. But then if I pause, like Google will just submit that. And I'll be like, whoa, no, I wanted to add more and I wanted to give you more context, but ChatGPT waits until I push the button to finish that. And so it's just like minor, minor UI.

• 29:10Jordi Hays?

  Yeah.

• 29:11John Coogan?

  But that's more important to me than like, does it have 150 on MMLU versus 149? Like I care more about the UX of like, am I, did I just waste 10 minutes by sending like a query that isn't complete and I know I'm going to get a bad answer on?

• 29:25Jordi Hays?

  Yeah.

• 29:26John Coogan?

  And so I, I, I don't know, but again, Android is clearly ahead of Siri here. So it's not even a competition. The competing project internally dubbed LLM Siri that uses in-house models to, uh, remains in active development. So representatives for Apple declined to comment, shares closed up over 2% after Bloomberg reported on the deliberations. So Wall Street clearly likes the idea of one of these deals getting done, but very big question as to the structure of those deals. And I keep triggering Siri because I'm talking about it on my phone. It keeps popping up. Fantastic.

• 30:04Jordi Hays?

  Incredible.

• 30:06John Coogan?

  The project to evaluate external models was started by Siri chief Mike Rockwell and software engineering lead Craig Federighi. They were given oversight of Siri after the duties were removed from the command of John Giandrea, the company's AI chief. This was a spicy little trade deal going on over there.

• 30:23Jordi Hays?

  Giandrea Federighi.

• 30:25John Coogan?

  A spicy meatball over at Apple in Cupertino. He was sidelined in the wake of a tepid response to Apple intelligence and Siri's feature delays. Rockwell, who previously launched the Vision Pro headset, assumed the Siri engineering role in March. After taking over, he instructed his new group to assess whether Siri would do a better job handling queries using Apple's AI models or third-party technology, including Claude, ChatGPT, and Google's Gemini. Interesting. After multiple rounds of testing, Rockwell and other executives concluded that Anthropic's technology is most promising for Siri's needs. That led Adrian Perica, the company's vice president of corporate development, to start discussions with Anthropic about using Claude. What's interesting is that

• 31:09John Coogan?

  SSI not in the conversation here yet. Also, thinking machines not in the conversation yet. And when you think about thinking machines, that recent information article about Mira Maroti wanting to do fine tuning RL for businesses, it's like, there's very few bigger businesses than Apple. That's a pretty good client to go win. And so if you have a foundation model, you have to assume she's raised, what, two billion? So she can do a...

• 31:37Jordi Hays?

  Just a pre-seed, yeah.

• 31:38John Coogan?

  Yeah, the pre-seed.

• 31:39Jordi Hays?

  It could be a thing Apple doesn't really work with a lot of pre-seed companies.

• 31:46John Coogan?

  Yeah, yeah, yeah. They're like, call us when you're like, Series C.

• 31:49Jordi Hays?

  I'm sorry, like, you know, I can't bet my career on a, on a pre-seed company. But call us if you can get a seed round done.

• 31:56John Coogan?

  Yeah, yeah, but I mean, I think the I think the fact of the matter is like $2 billion is enough to do a GPT four level run, to do a deep seek style run. And so you if you take all the best practices from deep seek V three and R one, like the reasoning model, and you spend the money to go do the training and you pull all the data together and maybe you're not completely stealing the data from the GPT for API, but you're getting it somewhat legitimately through, you know, these these data brokers like Merck or and scale and whatnot, like you should be able to get a, you know, near the frontier level model done.

• 32:34Jordi Hays?

  The issue is Apple isn't set up to comp top AI researchers.

• 32:38John Coogan?

  Exactly.

• 32:39Jordi Hays?

  So in some ways, in some ways, it's

• 32:41John Coogan?

  It's not a money issue.

• 32:42Jordi Hays?

  They're not willing to spend the money to put together to say, hey, we're getting kind of cooked in AI.

• 32:48John Coogan?

  Yeah.

• 32:48Jordi Hays?

  We should spend $5 billion like Zach just did to to put together, you know, an incredible team.

• 32:54John Coogan?

  Yep.

• 32:54Jordi Hays?

  But they'll have to pay for it by it sounds like they may end up paying annually to get access to the technology that those types of teams.

• 33:02John Coogan?

  It's crazy.

• 33:03Jordi Hays?

  Built.

• 33:03John Coogan?

  Yeah.

• 33:03Jordi Hays?

  And so you you got to pay for it somewhere.

• 33:05John Coogan?

  It's the capex opex which ru the CFO is like, OK, yeah, like, we don't want, we don't want to spend a bunch of money upfront to reap this reward endlessly, but we will pay a billion dollars a year, I guess. I don't know.

• 33:18Jordi Hays?

  Yeah.

• 33:19John Coogan?

  They they they seem not fully AGI pelled over there. The Siri Assistant, originally released in 2011, has fallen behind popular AI chatbots, and Apple's attempt to upgrade the software has been stymied by engineering snags and delays. A year ago, Apple unveiled new Siri capabilities, including ones that would let it tap into users' personal data and analyze on-screen content to better fulfill queries. I do wonder if Apple is thinking about thinking machines. You have to imagine that Zach is thinking about buying the company, right?

• 33:49Jordi Hays?

  Sure they talked?

• 33:50John Coogan?

  It's only a couple billion dollars and by all accounts.

• 33:55Jordi Hays?

  I think, I think to be honest, it sounds like Zuck had offered somewhere around the last private market valuation for SSI.

• 34:03John Coogan?

  Yep.

• 34:04Jordi Hays?

  And he probably, even though all the investors had a 1X pref.

• 34:08John Coogan?

  Yep.

• 34:08Jordi Hays?

  Right? He probably needed to do that to get at least the early investors comfortable with it. So.

• 34:14John Coogan?

  But Ilya is a true missionary, true believer, wants to take the straight shot to SSI. He doesn't, he doesn't care about. Ilya doesn't care about the debt ceiling. Let's put it that way. Mira, on the other hand, is doing reinforcement learning for businesses. So you throw, you throw a 15 billion dollar aqua hire her way with that team, maybe it gets done? I don't know. If I'm Apple, what, well, let's pull up the Mag7 market cap again. What do they have? 2 trillion? 3 trillion? They're up there. And, and Apple is, you know, it feels like they could afford even 15 billion for thinking machines.

• 34:58Jordi Hays?

  Sure.

• 34:59John Coogan?

  Do you disagree?

• 35:00Jordi Hays?

  No, I mean, they totally could. But they'd be looking at it as talent acquisition, I think.

• 35:04John Coogan?

  Yeah.

• 35:05Jordi Hays?

  Because the team is, I mean, it's such a young company.

• 35:07John Coogan?

  Yeah.

• 35:08Jordi Hays?

  And.

• 35:09John Coogan?

  But if you were, if you were in, in the big man's seat.

• 35:12Jordi Hays?

  But then, so you would do that?

• 35:14John Coogan?

  What would you do?

• 35:14Jordi Hays?

  You think Mira is going to be cool just clearing 74 million? She's not going to make more than Tim. You think she's going to be down to sell now and then just make, have total comp less than the average AI researcher going to Meta?

• 35:30John Coogan?

  I don't know. I mean, the, the beauty of an acquisition is that like, you can be structured to make more than the CEO, at least in a short amount of time. Like, that certainly was the case with the Beats acquisition, right?

• 35:42Jordi Hays?

  Sure.

• 35:42John Coogan?

  Like, for those years, when that earn out was active, they made more than the CEO. And that's okay. Anyway, people with knowledge of Apple's AI team say it is operating with a high degree of uncertainty and a lack of clarity with executives poring over a number of possible directions. Apple has already approved a multi-billion dollar budget for 2026 for running its own models via the cloud, but plans for that beyond remain for beyond that remain murky. Still, Federighi, Rockwell, and other executives have grown increasingly open to the idea that embracing outside technology is the key to a near term turnaround. They don't see the need for Apple to rely on its own models, which they can, which they currently consider inferior. And this makes a lot of sense because Apple is not

• 36:26John Coogan?

  great at, at software that needs to be updated, you know, 25 times a year. We're in this crazy AI model horse race. You're, you don't want to be waiting around for, oh yeah, like the next WWDC, they're going to improve it when Sam Altman shipped like 25 updates.

• 36:42Jordi Hays?

  Sam's gonna have 40 buzzy announcements between now and then.

• 36:46John Coogan?

  Exactly.

• 36:46Jordi Hays?

  So Beats was Apple's largest ever acquisition.

• 36:51John Coogan?

  Yes.

• 36:51Jordi Hays?

  Paid $3 billion, including 4 million of, 400 million of Apple's stock. But Beats at the time was doing a billion dollars in revenue. They only paid like a 3x revenue multiple.

• 37:03John Coogan?

  Wow.

• 37:03Jordi Hays?

  And then Intel's modem business.

• 37:06John Coogan?

  Yeah, yeah, yeah.

• 37:06Jordi Hays?

  Uh, which was in 2019 for a billion.

• 37:08John Coogan?

  Okay.

• 37:09Jordi Hays?

  And.

• 37:10John Coogan?

  It was doing 2 billion in revenue, probably.

• 37:13Jordi Hays?

  Yeah, probably.

• 37:13John Coogan?

  Yeah, you look that up. I'll keep reading. Uh, they don't see the need to rely on the own, own models. Licensing third party AI would mirror an approach taken by Samsung. While the company brands its features under the Galaxy AI umbrella, many of its features are actually based on Gemini. Anthropic, for its part, is already used by Amazon to help power the new Alexa Plus, which I haven't seen rolling out into the Amazon Alexas. Maybe the Alexas aren't wired up properly and you have to get the next batch, the next revision.

• 37:42Jordi Hays?

  Yeah, so Intel's modem business was doing it over a billion.

• 37:46John Coogan?

  So less than a 1x revenue multiple.

• 37:47Jordi Hays?

  Yeah, basically a 1x.

• 37:48John Coogan?

  Okay.

• 37:49Jordi Hays?

  And you remember in 2018, they acquired Shazam.

• 37:51John Coogan?

  Oh, yeah.

• 37:52Jordi Hays?

  For 400 million.

• 37:53John Coogan?

  How much were they doing?

• 37:54Jordi Hays?

  I gotta ask. I gotta, this is.

• 37:56John Coogan?

  In the future, if its own technology improves, the executives believe Apple should have ownership of AI models, given their increasing importance of how product.

• 38:04Jordi Hays?

  What do you think Shazam's annual revenue was at the time of acquisition?

• 38:07John Coogan?

  I want to say 80.

• 38:10John Coogan?

  How much?

• 38:10Jordi Hays?

  Waiting.

• 38:13John Coogan?

  The company is working on a series of projects, including a tabletop robot and glasses that will make heavy use of AI. I'm really excited for the Apple tabletop robot. That doesn't get enough coverage these days. I think that's a really cool idea.

• 38:25Jordi Hays?

  So, Apple paid 400 million. The app was pulling in roughly 38 million a year.

• 38:30John Coogan?

  Oh, so over 10x revenue multiple, okay.

• 38:33Jordi Hays?

  So, anyways, not a long history of making massive aqua hires.

• 38:39John Coogan?

  Yeah.

• 38:40Jordi Hays?

  Actually, no history at all.

• 38:42John Coogan?

  Well, whatever Apple's planning, they gotta do it on linear. Linear is a purpose-built tool for planning and building products, meet the system for modern software development, streamline issues, projects, and product roadmaps.

• 38:53Jordi Hays?

  If Apple wants to be more like OpenAI, one way they could do that is by getting on linear. Because OpenAI uses linear.

• 39:02John Coogan?

  Oh, here we go. We get to, we get to thinking machines. Apple has also recently considered acquiring Perplexity in order to help bolster its AI work. It also briefly held discussions with Thinking Machines Lab, the AI startup founded by former OpenAI Chief Technology Officer Mira Maroti, but nothing really more than that in the story. Apple's models are developed by a roughly 100-person team, maybe two, two times big, too big? Who knows? Maybe 50?

• 39:27Jordi Hays?

  That's a lot of pizzas.

• 39:28John Coogan?

  A lot of pizzas. Run by Ruming Pang, an Apple distinguished engineer who joined from Google in 2021 to lead this work. He reports to Daphne Luong, a senior director in charge of AI research. Luong is one of Giandrea's top lieutenants, and the foundation models team is one of the few significant AI groups still reporting to Giandrea. Even in that area, Federighi and Rockwell have taken a larger role. Regardless of the path it takes, the proposed shift has weighed on the team, which has some of the industry, AI industry's most in-demand talent. Some members have signaled internally that they are unhappy the company is considering technology from a third party, creating the perception that they are to blame, at least partially, for the company's AI shortcomings. They

• 40:11John Coogan?

  have said that they could leave for multimillion-dollar packages being floated by meta platforms in OpenAI.

• 40:17Jordi Hays?

  Yeah, if you are a great AI researcher, the idea of being responsible for just integrating the work of OpenAI or Anthropic is going to be much less exciting than trying to build frontier models.

• 40:30John Coogan?

  Totally. And also, like... I don't know, just in terms of missionary work, like the idea of building like the the the most advanced god that you can talk to in this crazy AI like that is exciting. But there's also something that's like, I think, potentially like a really strong missionary pitch for you're you are going to you're going to build models that are used at massive scale by every iPhone user. And you can actually, you know, surprise and delight the customer to the tune of hundreds of millions of people. Like, I think that is, I think that is actually like, pretty, pretty laudable work and very, very cool.

• 41:05Jordi Hays?

  Even going to work at superintelligence at Facebook, knowing or at Meta, knowing that, knowing that your work will be integrated into the Meta Ray-Bans.

• 41:15John Coogan?

  Yeah.

• 41:15Jordi Hays?

  And you're gonna have like a Clue Lee like experience.

• 41:17John Coogan?

  That's cool, yeah.

• 41:18Jordi Hays?

  Just, you know, wearing glasses.

• 41:21John Coogan?

  Yep.

• 41:21Jordi Hays?

  Like, that is a cool, that is like a new dimension that you can build on.

• 41:26John Coogan?

  I remember the initial Siri build out, they they did a bunch of magical things, like you could say like Siri, tell me a joke. And it would come up with these like funny zingers that were like tuned to Apple's brand, but still actually pretty funny. And they hired comedy writers to work on it. And so like, I think that there still is a world where you you find, you you develop the model, you own it. And you're doing the foundational like serious AI research, but you're still productizing it in the Apple way, creating something special. You know, you already hear about this with the the Claude is different than ChatGPT, like the vibe test. Like, we haven't seen the vibes fork out really all that much.

• 42:05John Coogan?

  But there's definitely a world where the Apple LLM performs at a similar scale and speed and the reasoning and it's doing well on the benchmarks. But then you know you're talking to the Apple model and it has the Apple feel to it. And like, that could be cool if you if you can actually solve the task.

• 42:21Jordi Hays?

  It could be so cool.

• 42:22John Coogan?

  It could be very cool.

• 42:22Jordi Hays?

  It could be so cool.

• 42:24John Coogan?

  Yeah.

• 42:24Jordi Hays?

  Like if they brought, if they could bring back some of the like flair from the brand campaigns that you could, that you remember Apple by nineteen eighty-four. The like original iPod, like these things that were just iconic.

• 42:37John Coogan?

  Yeah.

• 42:38Jordi Hays?

  And if you could think about how to like embody that that original Apple.

• 42:42John Coogan?

  It's like Steve Jobs' voice, basically. Yeah, bicycle for the mind and and like encouraging that that that wonder. I I keep going back to that idea of like, what would Steve Jobs have thought about? Vibe coding and it's like he would have loved it. He loved GarageBand. He loved giving everyone the tools to be an artist. Everyone's a musician. Everyone's a programmer. Like these, these things, this like this giving someone the ability to do really, really interesting things with Siri. Awesome. I think, I think it's very, very on brand for, for Apple. Anyway, let me tell you about Vanta. 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

• 43:27John Coogan?

  pursuing your first framework or managing a complex program.

• 43:30Jordi Hays?

  Head over to vanta.com and tell them the technology brothers sent you.

• 43:35John Coogan?

  There are some more trade deals in this, in this report in Bloomberg. One of Apple's most senior large language model researchers, Tom Gunter, left last week. He had worked at Apple for about eight years and some colleagues see him as difficult to replace given his unique skillset and the willingness of Apple's competitors to pay exponentially more for talent.

• 43:53Jordi Hays?

  That's what I'm saying.

• 43:54John Coogan?

  Apple this month also nearly lost the team behind MLX, its key open source system for developing machine learning models on the, on, on the latest Apple chips. After the engineers threatened to leave, Apple made counteroffers to retain them and they're staying for now. That's dramatic. Wow. In his discussions with both Anthropic and OpenAI, the iPhone maker requested a custom version that could run on Apple's private cloud compute.

• 44:19Jordi Hays?

  Yeah, Apple, Apple's such an interesting culture because it's counter to a lot of other cultures and tech that are like, oh, I might work at Meta for five years and then go to Google for a few years and then dabble at a startup and then go back to Meta. And Apple, you see more of the, the somebody who's been there for 15 years, but then at a certain point, even if you've been there a long time, you're looking around and you're saying people with my exact same skillset are making five, 10 times. This article highlights that, that the Meta pay packages have been between 10 and 40 million annually.

• 44:56John Coogan?

  And I would trust you a little more on that.

• 44:58Jordi Hays?

  That feels more realistic than what the New York Times had been saying about a hundred million dollar signing bonuses and all that good stuff.

• 45:11John Coogan?

  Well, you know, the source is not conflicted at all. The guy that hates the fact that these pay packages exist.

• 45:17Jordi Hays?

  Yeah.

• 45:17John Coogan?

  Is quoting them.

• 45:18Jordi Hays?

  Yeah.

• 45:19John Coogan?

  Yeah. So funny, this source, a podcast between two brothers doing Psy Hops. Come on, come on, New York Times. Step it up. The company already has already internally tested the idea of running these LLMs, other models, other companies' models on their own Apple-controlled cloud services. Obviously, that's very important for the data privacy narrative. Other Apple intelligence features are powered by AI models that reside in consumers' devices. These models, slower and less powerful than cloud-based versions, are used for tasks like summarizing short emails and creating gen emojis. It's here for gen emoji.

• 46:00Jordi Hays?

  Underrated.

• 46:01John Coogan?

  Just bake down Ghibli. Just bake down Ghibli, have it be a filter in the iPhone app. Boom, you're done. Like, you have a banger product there. Something like that. Just like, you know, you can go in and make any photo in your camera roll black and white. You can make it Hollywood, like teal and orange. You can make it, you know, super moody, or super cool, or super warm. Like, you can adjust the contrast and the color temperature. Turn it into a cartoon. People will love that. Everyone will be using that. Apple is opening up the on-device models to third-party developers later this year, letting app makers create AI features based on its technology. Very excited for that. Very bullish for Apple on that amazing.

• 46:40Jordi Hays?

  Yeah, which is why the fact that they almost lost the team working on that.

• 46:44John Coogan?

  Yep, rough. They need that team badly.

• 46:46Jordi Hays?

  Is, would have been crazy.

• 46:47John Coogan?

  Because if that product stagnates.

• 46:48Jordi Hays?

  I saw a founder, I saw a founder, I forget their name, posting, hearing that, you know, the team that you're based, he was building a product based on MLX. And then he heard the MLX team almost left.

• 47:02John Coogan?

  He was freaking out.

• 47:03Jordi Hays?

  He was like, whoa.

• 47:04John Coogan?

  Oh, no. It's rough. So last year, OpenAI offered to train on-device models for Apple, but the iPhone maker was not interested. They said, we got it handled. Turns out they didn't. Since December 2024, Apple has been using OpenAI to handle some features. In addition to responding to world knowledge queries in Siri, ChatGPT can write blocks of text in the Writing Tools feature. Later this year, in iOS 26, there will be a ChatGPT option for image generation and on-screen image analysis.

• 47:31John Coogan?

  While discussing the potential arrangement, Apple and Anthropic have disagreed over preliminary financial terms, according to The People. The AI startup is seeking a multi-billion dollar annual fee that increases sharply each year. The struggle to reach a deal has left Apple contemplating working with OpenAI or others if it moves forward with a third-party plan. They said if Apple does strike an agreement-

• 47:53Jordi Hays?

  It's so interesting. You can imagine OpenAI being more willing to strike some type of deal because they're, they want to be effectively the next Google, right?

• 48:05John Coogan?

  Yep, totally.

• 48:06Jordi Hays?

  In terms of this dominant consumer internet company.

• 48:10John Coogan?

  Yep.

• 48:11Jordi Hays?

  But at the same time, OpenAI is building devices to try to kill, you know, Apple. You can imagine. They wouldn't say that. They wouldn't say that.

• 48:19John Coogan?

  Yeah, they would say it's complimentary.

• 48:20Jordi Hays?

  I do believe that consumers, there's like a finite amount of devices that they're willing to have. And so if they want to compete in hardware, it's a little hard for Apple to get excited. Although they partner with Google and Google has-

• 48:34John Coogan?

  I have been surprised by the number of devices that people carry. I mean, like, I'd say like a decent chunk of San Francisco tech people carry AirPods, an iPhone, an Apple Watch, and an Apple Laptop basically everywhere they go. That's four devices. That's like a lot.

• 48:51Jordi Hays?

  Yeah.

• 48:51John Coogan?

  And then, yeah, maybe VR heads eventually. Well, if they do wind up buying a device, they gotta pay sales tax. They gotta get a numeral HQ sales tax on autopilot. Spend less than five minutes per month on sales tax compliance. Anyway, in other news, John Mu, the inventor of Mewing, has passed away at 96 in his castle. Rest in peace to John Mu.

• 49:12Jordi Hays?

  In his castle.

• 49:14John Coogan?

  Professor- John Mu, visionary orthodontist and founder of Orthotropics, passed away peacefully in June 2025 at the age of 96. In his castle, a pioneering figure in the facial growth and development. John Mu challenged the status quo of traditional orthodontics, arguing that environment, posture, and function, not genetics alone, shaped the face. His philosophy, Orthotropics, aimed not only to straighten the teeth, but helped promote healthy jaws, open airways, and confident faces. Through his work, though his work was often met with fierce resistance from the establishment, John stood firm in his convictions, driven by a lifelong commitment to prevention, integrity, and science, and giving every child a fair chance at full facial development.

• 49:58John Coogan?

  Today, his legacy works on through, lives on through the work of his son. John Mu will be remembered not only as a clinician, but as a courageous truth seeker who dared to ask better questions and never stopped looking for better answers. So, if you're chewing some Mastic gum, say, pour one out for John Mu.

• 50:17Jordi Hays?

  I wonder how he processed the explosion of Mu's popularity on social media.

• 50:24John Coogan?

  It must have come as a surprise because it was the last, like, few years of his life. He'd been working on it for probably, I mean, he's 96. And somebody probably printed out a tweet for him and said, "Look, some trad influencer has gotten 10,000 likes on your, on your work and a million views."

• 50:44John Coogan?

  Anyway, we have some trade deal news. Ring that gong, Jordy. Mary DiNofrio has joined Crosslink Capital as a partner and a leader of the Burm's crossover strategy. She will be focusing Series B-plus venture investments across software categories. She, Fortune Magazine has the story. She was a longtime Bessemer investor, and now she's heading over to Crosslink Capital to cross over into private growth equity deals. So, congratulations to Mary DiNofrio.

• 51:15John Coogan?

  In other news, Mira Maroti's Thinking Machines is offering top dollar to technical talent, much higher base salaries than Anthropic and OpenAI. Thinking Machines will give you 500K. Anthropic, how about a safe 400K? OpenAI, best we can do is 300K. No wonder everyone's jumping ship. I think we're looking at two different things here. Like, this is like, not necessarily for the top researchers who are these like star athletes. This is maybe more for just like, the general folks who are joining as like, software engineers and developers and kind of like, members of technical staff. But it is interesting to see that Mira is

• 51:53Jordi Hays?

  Getting aggressive.

• 51:54John Coogan?

  Yeah, getting aggressive and offering generous pay packages because there's obviously a lot of work and it's a very small team. And even though Thinking Machines has some great, great AI researchers on board, they gotta have some folks to chop wood. And now that Mira is in the, is in the business of selling to businesses, B2B, fine tuning, reinforcement learning for businesses to drive profit, she's gotta get Thinking Machines on Adio. Customer relationship magic. Adio is the AI native CRM that builds, scales, and grows your company to the next level. You can get started for free.

• 52:24Jordi Hays?

  attio.com/tbpn. You can try it out for free on us.

• 52:29John Coogan?

  So, the 462.5K average salary Thinking Machines Lab offered for technical hires is considerably higher than more established language model competitors Maroti is aiming to compete with. So, the, the competition in AI talent rages on. We will be joined by Swix in just a few minutes to discuss the AI talent wars in more detail. Aidan McLaughlin, who's been on the show, says, posts the Survivorship Bias photo of the plane with the red dots, and Benjamin, this is in response to Benjamin de Cracker, who says, "The OpenAI brain drain poaching by other labs kind of confirms that the smartest minds in AI don't actually believe OpenAI is on the cusp of AGI."

• 53:14John Coogan?

  But rather that it's going to be a drawn out slugfest for several years at least, and the economy still matters. In other words, if you really believed that OpenAI was right around the corner from AGI, and once there, AI disrupts the entire economy to a post scarcity economy, why would you leave that organization right now in exchange for money? It's a good question, but Aiden is of course saying that the true believers are still there. They haven't left. It's only the mercenaries that left.

• 53:41Jordi Hays?

  We gotta have, we gotta have Aiden back on the show.

• 53:43John Coogan?

  Get him back.

• 53:44Jordi Hays?

  That was, that was a really fun conversation.

• 53:46John Coogan?

  He's a great guy. It's fantastic. Also, in other news, they're saying Meta is now preparing a huge pile of cash to acquire Sweet Baby Ray.

• 53:54Jordi Hays?

  Sweet Baby Ray.

• 53:56John Coogan?

  I would love to see that.

• 53:57Jordi Hays?

  Has been identified as a potential acquisition target.

• 54:00John Coogan?

  Yeah, I mean.

• 54:00Jordi Hays?

  I wonder what their AI talent pool really looks like.

• 54:03John Coogan?

  I mean, Elon sells the Tesla tequila. Chamath has tequila. Maybe Zuck, you know, he.

• 54:09Jordi Hays?

  The Meta Sweet Baby Ray.

• 54:11John Coogan?

  Says he doesn't use caffeine, you know, maybe.

• 54:13Jordi Hays?

  I just discovered something. Sweet Baby Ray.

• 54:16John Coogan?

  Bands.

• 54:17Jordi Hays?

  Ray Bands.

• 54:18John Coogan?

  Sweet Baby Ray Band Metas. There we go.

• 54:22Jordi Hays?

  They come with sauce in the glasses, so you can get AI.

• 54:25John Coogan?

  No, no, no, no. When you're barbecuing, that's the ultimate augmented reality use case.

• 54:30Jordi Hays?

  That's right.

• 54:31John Coogan?

  It can take a picture and say, okay, I've set a timer automatically, check the temperature. How long, oh, how long should this particular steak be cooked? Sets the timer, lets you know.

• 54:41Jordi Hays?

  Starts buzzing, little reminder when it's, when it's ready.

• 54:43John Coogan?

  This is actually a killer application.

• 54:45Jordi Hays?

  The perfect, the perfect ribs.

• 54:47John Coogan?

  This is actually.

• 54:47Jordi Hays?

  You can only make perfect ribs with the Sweet Baby Ray Bands.

• 54:51John Coogan?

  Well, if you're interested in, in getting in on the action of the MAG7, the public companies, head over to public.com, investing for those who take it seriously. They got multi-asset investing, industry-leading yields, and they're trusted by millions. So Elon Musk is starting a new party. Says Vox Popula, Vox Dei, 80% of people voted for a new political party that actually represents the 80% in the middle. Interesting. So we'll see if he actually does it. There is a poly market tracking whether or not he will do it. It has been surging. We will be tracking that. Third parties, not very successful in American history, but.

• 55:28Jordi Hays?

  Not yet.

• 55:28John Coogan?

  We're in a new era. Maybe Elon will, will chair it. It's unclear if he wants to be the. Head because he can't be the president because he's not a native born citizen. So who would he put in charge or who would he back? Andrew Yang was running a third party for a while, the Forward Party. Do you remember this whole thing?

• 55:45Jordi Hays?

  That whole, that whole thing. I do remember it at a high level.

• 55:49John Coogan?

  Yeah, I mean, he had the backing of like Sam Altman, some really big tech people. And he was running as a Democrat and then he, and then he dropped out and kind of like was seen as like an outsider and then he started the Forward Party. So not left, not right, but forward and didn't really get that off the ground fully. But.

• 56:08Jordi Hays?

  Good branding.

• 56:09John Coogan?

  Yeah. I wonder what the Elon Musk, I wonder what the Elon Musk Party will be called.

• 56:15Jordi Hays?

  I think the, I think it's called the America Party.

• 56:17John Coogan?

  Oh, the America Party, okay.

• 56:19Jordi Hays?

  He said, he called it, that was his words. What Elon Musk's America Party could look like. Yeah, he seems, he clearly hated politics.

• 56:31John Coogan?

  Yes.

• 56:32Jordi Hays?

  Got out, but he's angry enough about the state of things that he wants to potentially get back in the game. But one, we're going to have Zach Kukoff on the show in two minutes. He's going to be breaking down the big, beautiful bill for us. What's happening on the ground in Washington. One thing that was included was the Invest America Act, which got approval from the Senate as part of the bill. It's on the verge of becoming law, the first country on the planet to make sure that every child has a stake in the game, real private account ownership compounding in our best companies from birth.

• 57:07John Coogan?

  Very cool.

• 57:08Jordi Hays?

  So very, very cool. Great work from Brad Gersner. And otherwise, we have some breaking news from TVPN, which is that we have partnered with Graphite. Graphite.dev is the website, let's pull it up, team. I've been very excited about this. I was a happy Graphite customer at my last company. Entire engineering team was running on it. Graphite helps teams on GitHub ship higher quality software faster. It is the platform trusted by 45,000 developers at top engineering orgs like Harvey, Asana, Ramp, Replit. Who else we got? We got a bunch more.

• 57:50John Coogan?

  Harvey, Asana.

• 57:52Jordi Hays?

  Datadog for sale.

• 57:53John Coogan?

  Datadog?

• 57:54Jordi Hays?

  The browser company. Duck, duck, go.

• 57:57John Coogan?

  Let's go.

• 57:59Jordi Hays?

  A lot of them, but if you're building on GitHub, like I'm sure you are, go and get on Graphite. Graphite.dev is the website and we'll have to have Merrill, the CEO, on the show very soon. But very excited to partner with them and Tyler will be running our TVPN engineering org on Graphite as well.

• 58:21John Coogan?

  Love it.

• 58:22Jordi Hays?

  More to come.

• 58:22John Coogan?

  Well, we have our first guest of the show, Zach Kukoff.

• 58:26Zak Kukoff?

  Thanks for having me.

• 58:28John Coogan?

  Live from Washington. Washington correspondent.

• 58:31Zak Kukoff?

  Mr. Washington, I even set up, I don't know if you can see, that's the monument right there.

• 58:38John Coogan?

  Wow, no way.

• 58:39Jordi Hays?

  There we go.

• 58:39John Coogan?

  Beautiful.

• 58:40Jordi Hays?

  There we go.

• 58:41John Coogan?

  It's great.

• 58:41Jordi Hays?

  We'll just have our production team zoom in, zoom in just on the monument, so you won't be on camera.

• 58:47Zak Kukoff?

  Perfect, I'll get out of the way, but you can see the good stuff behind me, that's the important thing.

• 58:52John Coogan?

  So yeah, break it down for us, the Wall Street Journal has a story, Senate passes Trump's mega bill after all-night session. Tax cuts and Medicaid spending reductions head to the House with a July 4th deadline reachable. What's interesting in the bill, how likely do you think it is to pass? What are the major reads on this? And then we want to get your takeaway from like where the dividing lines are around the bill.

• 59:15Zak Kukoff?

  Yeah, so there's a couple trip lines. The first trip line, I would say, you guys have been tracking the moratorium, the 10-year moratorium on AI development. This was on AI regulation. This was the first it was in, Ted Cruz put it in, then it was out, then it was back in, there was a compromise, there was a five-year agreement, instead of a 10-year agreement. And Blackburn has been sort of the key driver of getting it back out again. It's out, now it was done 99 to 1 in the Senate, almost unanimous in the Senate to get this out. This was a big win for Dario of Anthropic, probably the number one beneficiary. And by the way, somebody who certainly used a fair bit of political capital pushing for this, that's fault line number one.

• 59:58Zak Kukoff?

  I would say fault line number two.

• 1:00:01John Coogan?

  Really quickly, stay on that, it's a potential ban on AI regulation that was removed. And so the current bill does not have a, has a, does not have a moratorium on regulation.

• 1:00:16Zak Kukoff?

  There is no moratorium on federal regulation. That's right. So you can have California,

• 1:00:21John Coogan?

  Yeah.

• 1:00:21Zak Kukoff?

  states, whatever, who want to, Marsha Blackburn, her home state, Tennessee, passed last year something called the Elvis Act, which was cutely named, but basically said, look, if you are building like a, you know, an AI audio business, you cannot use any likeness of a real performer's sound. So if you want to have John singing the blues or Dory singing the blues, I cannot do that without a prior deal. That's because in Tennessee, Nashville is a dominant industry, the music industry is a dominant industry. And so part of Blackburn's opposition to the moratorium, which would have prevented bills like that from taking effect, is that it ended up superseding the work that her home state has done to protect

• 1:01:05Zak Kukoff?

  its dominant industries. By the way, net, net, this moratorium, the time that they got to a compromise was so watered down, it really wouldn't have impacted Tennessee or California anyway. But it was a very dramatic swing from in, outs, in, and now out once again for good.

• 1:01:23John Coogan?

  And

• 1:01:24Jordi Hays?

  What do you, what do you expect at the state level around AI safety going forward? Is this gonna, is the fact that this was removed gonna inspire certain governors to say, you know, make this a part of their platform?

• 1:01:40John Coogan?

  And I guess like, I want to know more about like, if I'm Eleven Labs and I'm, and I'm training a voice agent and I can't be sure that some clip from, you know, Elvis or, you know, some Justin Bieber worked its way in there. Does that mean that I just turn off Tennessee at like the DNS level or do some geo fencing? Or is it more risky than that? Where I have to, I have to comply kind of at the national level and they're kind of forcing me to comply everywhere? Or can I just pull back out of that state? Because we've seen this with, with Apple Intelligence not being available in China, not being available in Europe, for example. But yeah, what would the impact on something like that be?

• 1:02:21Zak Kukoff?

  Well, thinking about states in two categories, right? There are some states that are so large. And by the way, the analog that I would think about here is what happens in the textbook market. So if you're a textbook publisher and you want to write some textbook about biology or whatever. If the largest states in the country, it's category one, pass a law mandating something needs to be in a textbook. Suddenly you're going to comply nationally because they are so large, they warp the market. Exactly. You have to. That's right. And so if California tomorrow says, look, we're passing a European style bill to severely curtail, which I think would be a disaster, to severely curtail AI development. That would in effect be a national bill.

• 1:02:59Zak Kukoff?

  And part of the, in my view, mistake that's happening tactically right now is this self-imposed July 4th deadline is so restrictive that it forces all of these more nuanced negotiating points to fall by the wayside. Right? It becomes blanket, either it's in or it's out. There's just not time to get to a more nuanced middle ground. So 11 labs at Tennessee have the Elvis Act probably says, look, we just turned around Tennessee. I don't, I haven't spoken to 11 labs, but if California passes, then suddenly you have the whole country warped by this. And Gavin Newsom and the California legislature are certainly ambitious enough to try, as they did last session, to try to pass something that would impact the whole country.

• 1:03:40Jordi Hays?

  Yeah. Wasn't, wasn't there news out of California this week or, or last week around some of this stuff?

• 1:03:47Zak Kukoff?

  Yeah. Yeah. There's, there was a huge fight, which had an unlikely set of bedfellows where you saw Andreessen and others leading the anti-legislative, anti-regulatory brigade against some other folks who are much more pro curtailing. By the way, I, I will just say the other interesting takeaway for tech, not to totally dovetail away from your question, but the interesting, other interesting takeaway for us, I think, in this is the deciding vote in the Senate on the overall package, the reconciliation bill, was J D Vance. And so if you're a Vance head looking at 2028, right? You already see that Akasio Cortez and others, AOC and others, are going to use his deciding vote on this bill,

• 1:04:26Zak Kukoff?

  which includes huge amounts of Medicaid cuts that Tom Tillis from North Carolina, in particular, thought were politically toxic as a wedge against him when he comes and runs for president in four years. So sorry, that was, you didn't answer, you asked a question about California and I dovetailed it back to the federal level.

• 1:04:41Jordi Hays?

  No, that's super interesting.

• 1:04:43Zak Kukoff?

  Yeah, yeah, that's the big, the big shock. So you asked about tripwires, the AI tripwire was one. Medicaid cuts, which are politically really toxic, right? Because who wants the idea that you voted for the government to take away your healthcare? That's another huge tripwire. And then there's a package of things that maybe we care about that are nuanced, like, for example, IRA tax incentives for clean energy, right? Or new taxes on wind and solar from China. These are all things that might enrage the Republican, the very conservative Republican faction in the House, which now has to still pass the bill and now complicates the negotiating posture because the Senate watered down. The Senate preserved the IRA tax incentives and watered down some of the tax cuts, got rid of some of the tax cuts on Chinese imports,

• 1:05:28Zak Kukoff?

  which means basically you have a bill that's actually financially harder to pass because it's less balanced. And at the same time, you now alienated a huge faction of the GOP, the super conservative GOP side of the party, who still have to vote for the bill to happen. So it's up in the air if it passes or not.

• 1:05:45John Coogan?

  Can you tell me about the EV tax credits? I know Americans are struggling more than ever to buy naturally aspirated V12s. I'm hoping that there's some move there to subsidize things like the Ferrari 12 cylinder, the Dolce Trillendi. It's a multi hundred thousand dollar car. Even if we can't subsidize that, maybe we can just take away the subsidies from electric cars to tilt the, to tilt the playing field in favor of the, of the larger engines, the supercharged V8s, the twin turbos, the G63s, these types of cars that Americans, you know, deserve to be driving. So what's the news on the EV credit front?

• 1:06:21Zak Kukoff?

  I agree with you that the backbone of the American economy is the Ferrari, right? It's impossible to me to imagine a world, thank you for the laugh track, I appreciate that. Where a blue collar factory worker cannot own a sports car is beyond me. This bill doesn't address that. I wish it did. It'd be great if it did. It's not going to solve that huge unsolved problem.

• 1:06:42John Coogan?

  Yeah.

• 1:06:42Zak Kukoff?

  What it will do, by the way, is continue to drive a wedge between Elon and Trump, right? Then you saw Elon take the Twitter. I imagine you guys probably mentioned it earlier. You saw Elon take the Twitter and start to really crusade against people voting for this. That is in part because at least the House version of the bill was much worse on a lot of the subsidies for electric vehicles than the Senate version. The big challenge is going to be going into now the conference committee. It's going to be how do they reconcile these two challenges so that they can hopefully tilt the market back in favor, of course, of Ferraris and supercars nonetheless, while also not alienating one of the two power centers of the GOP, at least today, in Elon, who could easily primary somebody who votes against.

• 1:07:22John Coogan?

  Yeah, that makes a lot of sense. What about, how are the Democrats feeling about EVs these days? Because it used to, I used to feel like it was a Democratic cause to be pro EV incentive. Let's save the environment. Let's get people out of the gas cars. I'm joking about the V12s, obviously, but now it's become maybe let's punish Elon, but is this a cut your nose to spite your face situation for the Democrats?

• 1:07:47Zak Kukoff?

  I think it's a rough spot. I mean, you guys remember when Elon wasn't invited to the big EV summit under the Biden administration, right? That's part of what kicked off his political awakening, is he hasn't, he hasn't used unionized labor, and so he was excluded from this EV summit. There's been a huge polarization, a negative polarization against EVs among not only Dems in office, but the Democratic base too, which is, to all the points you brought up, quite ironic. You're not going to find many Dems willing to cross the aisle in support of electric vehicles to save this bill. This is a bill that will live or die by Republican whip count and Republican unity. If the whip count isn't there, it's going to be really hard to get it done before July 4th.

• 1:08:25Jordi Hays?

  What about Elon's America Party? You think that's real or just exciting?

• 1:08:34Zak Kukoff?

  Are those my only two options, real or exciting? There's no door, there's no door number three.

• 1:08:39Jordi Hays?

  Yeah, I mean, it's obviously like, you know, we were talking earlier, third parties haven't, haven't historically done well.

• 1:08:46John Coogan?

  Well, he has the America PAC, so when you say Elon could primary someone, he could potentially primary a Republican on the Republican ticket with the American PAC and he could almost like be kind of like a head fake, like, oh, this is part of the America party, but it's not really a third party. Is that more what we're thinking here?

• 1:09:05Zak Kukoff?

  Yeah, maybe, maybe one historical analog, it's not perfect, but think about like a Theodore Roosevelt, like a Teddy Roosevelt with the Bull Moose Party, right? You think about, it's a faction within a larger established party, to your point, that can serve as an engine to primary people who are in disagreement.

• 1:09:20John Coogan?

  Like the Tea Party.

• 1:09:21Zak Kukoff?

  Exactly, like the Tea Party, or frankly, what's happening now, look at Zoron in New York.

• 1:09:26John Coogan?

  MAGA is also like a wing of the Republican Party.

• 1:09:29Zak Kukoff?

  That's right, that's right, MAGA, the Tea Party, and now on the left, the polarization from the Zoron and democratic socialist world. All of these folks are new factions in a way that, by the way, we haven't seen before. The same way that 50 years ago, you basically watched MASH on television, that was your only option. And now I tune into TBPN while I play Subway Surfers and have 30 other things hitting me at the same time. This is the political version of that, right? Where you say, okay, it used to be my options were a platform that I accepted wholesale on the Republican side or the Dem side. Now I can be a MAGA guy, I can be a tech right guy, I can be a populist guy, and I'm a new right guy. Now on the left, I can be a democratic socialist, I can be an abundance bro. I have an infinite menu of things. The America party is more likely, if it sticks, one more menu on the side of the right.

• 1:10:13John Coogan?

  Sure, sure, yeah, that makes a lot of sense.

• 1:10:15Jordi Hays?

  What, what, what time, what do you expect out of the next 24 hours?

• 1:10:20Zak Kukoff?

  So tomorrow morning at nine, House Rules Committee votes. That's going to be a key vote to see how this thing does. What I would say is, if this gets done by July 4th, the thing that you're going to have to look to is that 9 a.m. Eastern vote to see how much unity is there in the Republican Party. They can barely lose any votes if this thing goes through the House in its current form. But I think it's unlikely that it's going to happen immediately. It'll happen, this will get passed, but on their timeline, I don't know. The next 24 hours, if you see more senators like Murkowski from Alaska, who are saying things like, "The bill is flawed, please send it back to the Senate so we can work on it again." That's a key indicator this thing may not have the legs it needs the next couple of days.

• 1:10:59John Coogan?

  Yeah, we heard about, I mean, everyone's saying like, it's the biggest bill. There's all this pork.

• 1:11:02Zak Kukoff?

  Yeah.

• 1:11:03John Coogan?

  Are there any like green shoots where there's some random startup out there that's just super excited? Because maybe it's not a headline grabbing, you know, $10 billion thing, but it's like, that's $100 million that I can go after in energy or in defense.

• 1:11:19Zak Kukoff?

  Yeah.

• 1:11:19John Coogan?

  In shipbuilding or anything. Have you seen any of these like, they're called riders, right?

• 1:11:24Zak Kukoff?

  Yeah, yeah. It's a good question. Biden was famous for stacking a lot of these, like the Inflation Reduction Act had a million ways you could go participate. This one's got fewer. I'll say one funny piece of pork, and I'll say one actual opportunity. The real opportunity, I would say, is for fintech folks who are looking at the Trump accounts, right? Which is now giving huge amounts of new Americans who are underbanked or not banked before, access to capital for the first time. If I'm Robin Hood, I am loving. That's a big change for me. Funniest piece of pork in the bill. Murkowski, who was the key holdout in the Senate from Alaska, got a tax exemption for Alaskan, native Alaskan whalers. She said basically native Alaskan

• 1:12:04Zak Kukoff?

  whalers need to be, yeah, that was honestly a big delivery for her constituency of people who kill whales in Alaska, I suppose.

• 1:12:12Jordi Hays?

  Let's give it up for the whalers. They don't get enough attention in Washington.

• 1:12:15John Coogan?

  Well, I mean, we've talked about it before, but you know, energy is really important for the AI data center race. Whales, they produce oil that you can burn and throw.

• 1:12:25Jordi Hays?

  Wasn't it Chase who said he would, he would burn whale blubber?

• 1:12:27John Coogan?

  He didn't say he would do it. He said that the hyperscalers are so desperate for energy right now that they would burn whale oil if they could.

• 1:12:34Jordi Hays?

  It's more fun to think about Chase personally.

• 1:12:37John Coogan?

  Launching Crusoe for whales.

• 1:12:40Zak Kukoff?

  Yeah.

• 1:12:40Jordi Hays?

  Crusoe blubber.

• 1:12:41Zak Kukoff?

  Well, VCs are the new whalers.

• 1:12:42John Coogan?

  Yes, yes. And the old whalers.

• 1:12:45Zak Kukoff?

  And the old whalers, that's true.

• 1:12:47Jordi Hays?

  Zach, this was so much fun. We'll have to have you call in tomorrow or Thursday.

• 1:12:51John Coogan?

  Yeah, when there's more news.

• 1:12:52Zak Kukoff?

  Please, I'll be, it's my first wedding anniversary, so I'll be around.

• 1:12:55John Coogan?

  Congratulations.

• 1:12:55Zak Kukoff?

  Plenty of time to call in. Thank you very much.

• 1:12:57Jordi Hays?

  Incredible. Incredible.

• 1:12:58John Coogan?

  We'll talk to you soon.

• 1:12:59Zak Kukoff?

  Thanks for having me, boys. See you soon.

• 1:13:00Jordi Hays?

  Yeah.

• 1:13:01John Coogan?

  Bye. Up next, we're going back to the AI talent wars, talking trade deals, talking hundred million dollar offers with Sean SWYX. How are you doing?

• 1:13:12Jordi Hays?

  There he is with the suit.

• 1:13:13John Coogan?

  With the suit, looking fantastic. We, you wore a suit last time and we didn't give you enough credit because you were at your own conference, AI World Fair.

• 1:13:24Jordi Hays?

  This is a sign of great respect.

• 1:13:27John Coogan?

  This is a great respect. So, thank you. Thank you. And it's always great to, great to catch up with you. How, how did you process the news over the weekend? What jumped out at you? I saw a couple of your posts. You were breaking it down, but, but how would you tell the story? How, how, how big is this for Meta? How bad is this for OpenAI? How are you feeling about the trade deals that we've seen break loose over the last few days?

• 1:13:53Shawn Wang?

  I feel like people who have been in discussing like sports trades, I might be way more equipped to, to discuss this. This is like relatively new in AI land and like honestly, just like absurd, you know, like no, like get that back guys. Like, you know, like I'm happy you're getting paid, but like also it definitely feels like for the, a lot of the AI researchers I talked to, like, like this is a little bit sort of like a panic move and in some extent warranted, right? Like I think that Meta has felt like it needs to do something different than what it has been doing, especially leading up to Lama four, and this is different. This is very, very different.

• 1:14:37Shawn Wang?

  This is something that only Isaac can do.

• 1:14:39Jordi Hays?

  Yeah. So there was just, just for some extra context, there was new reporting from Kylie over at Wired just now saying that, you know, the, there's been some back and forth, what are the actual offers? Obviously a lot of them are different, right? It's not just like a set offer that everybody is getting.

• 1:14:58John Coogan?

  If you join Meta, you get $100 million immediately.

• 1:15:01Jordi Hays?

  In a briefcase, hand delivered.

• 1:15:03John Coogan?

  I don't think that's what's going on.

• 1:15:04Jordi Hays?

  Apparently some of them are up to 300 million over four years with more than 100 million in total compensation for the first year. This is Wired's report.

• 1:15:11John Coogan?

  Okay.

• 1:15:12Jordi Hays?

  Mark German was saying.

• 1:15:13John Coogan?

  They must have seen, she said she needed to see an offer letter to put that.

• 1:15:16Jordi Hays?

  But the funny thing here is there's an OpenAI staffer who was responding to this anonymously. And they said, that's about how much it would take for me to go work at Meta. So shots, shots fired.

• 1:15:28John Coogan?

  Wow.

• 1:15:29Jordi Hays?

  But.

• 1:15:29Shawn Wang?

  I mean, they have set the, right? So now they have, unfortunately, they have set their own price. It is public now. I think there was some back and forth between like whether or not Sam appearing on his brother's podcast was like a very calculated move and like was dishonest. This is not my words. This is a.

• 1:15:46John Coogan?

  It seems like he might have been honest based on this reporting. Like it seems like it's real.

• 1:15:50Shawn Wang?

  I think it, look, it's in that ballpark, right? Like whether or not it's exactly a hundred plus minus. Like it is at least eight figures.

• 1:15:56John Coogan?

  Yeah.

• 1:15:57Shawn Wang?

  And that is like far and be, far and beyond what any, anyone else had, had been getting prior.

• 1:16:01Jordi Hays?

  And, and.

• 1:16:02Shawn Wang?

  Basically.

• 1:16:03Jordi Hays?

  And it is in there, at least in the relative range of what Tim Cook and Satya made all of 2024.

• 1:16:11John Coogan?

  Yeah. Which is crazy. Also, the hundred million number, it's so round that it just jumps out to you. And I think it's much more viral than 112 or 89, like 100 is just such a round number. It's such a big amount of money. It's just instant generational wealth.

• 1:16:27Shawn Wang?

  Uh, for sure. Uh, I, I think like that's exactly, um, it's weird that the calculus of like, does this make sense for Meta? Yes, it does. Because I think you guys covered my analysis before that like basically they just cut VR spend and reallocate to AI spend and they have the funding. They have the equivalent of Anthropic's entire annual spend.

• 1:16:49Jordi Hays?

  Yeah. And Meta's at all time highs right now, right? The, the market likes the aggression.

• 1:16:53John Coogan?

  Yeah.

• 1:16:53Jordi Hays?

  And so, and so it doesn't really matter if you, if you could move a, a 1.8 trillion dollar company market cap by a couple of points. You're doing pretty well.

• 1:17:04John Coogan?

  Yeah.

• 1:17:04Shawn Wang?

  Yeah, Zuck is no stranger to betting like 1% of his company, right, to

• 1:17:07John Coogan?

  Totally.

• 1:17:08Shawn Wang?

  Against the future. And he like, I think of uniquely of a lot of the sort of Fang or what is it? I think a lot of people are trying to come up with like new acronyms for like the magnificent seven. So I like the one that's Among Us.

• 1:17:21John Coogan?

  Among Us, yeah.

• 1:17:22Shawn Wang?

  Among Us is the best acronym.

• 1:17:24Jordi Hays?

  There have been some wild acronyms.

• 1:17:26John Coogan?

  When you're talking about.

• 1:17:28Shawn Wang?

  Zuck is uniquely empowered as like, you know, founder mode of the of the trillion dollar companies to actually do this. And like, so like, it's really amazing that the leaders he's hired and the people that he's managed to hire. I would say that, you know, to one part of your opening question, like, how affected is OpenAI? I would have said no, not that affected. You have a super deep bench. Even like the people that you don't really hear about, like, are actually like fantastic leaders in their own right. And so like, in some extent, OpenAI is like very robust to already sort of like departures already. But the email from Mark Chen over the weekend, I think, was also like, oh, like, I wouldn't, I wouldn't say that if I were him. I don't know if you, you guys have the

• 1:18:12John Coogan?

  Oh, yeah, we saw it.

• 1:18:14Jordi Hays?

  Oh, yeah, that knowing that that memo would immediately leak, it felt emotional and defensive versus, hey, John's phrasing was, was, or at least the way that you, you said, if you phrase this as, hey, guys, we have billions of people coming to our website monthly. We have hundreds, we have billions and billions of revenue. We are the category leader in this space. We are doing something different than Meta is doing.

• 1:18:46John Coogan?

  Yes.

• 1:18:46Jordi Hays?

  And we will continue to dominate.

• 1:18:48John Coogan?

  And also, this is the fourth time this has happened, maybe fifth time this has happened. So we survived Anthropic and Dario leaving.

• 1:18:56Jordi Hays?

  Don't forget surviving Elon leaving.

• 1:18:58John Coogan?

  Leaving. We survived Ilya leaving and we survived Mira leaving. And there's four spin out direct competitor, co-founder companies. This is a couple people leaving. We're going to get through it. We've been, you look at the growth chart, we're growing, growing, growing. I would have, yeah, definitely gone from a source of strength there. I don't know. But yeah, what is your thought on like the narrative that like, OpenAI seems Lindy at this point incredibly resilient, able to lose key people and just keep plodding forward with, you know,

• 1:19:31John Coogan?

  Iterative releases, models get a little bit better, UI on the app gets a little bit better, deep research comes out. They're just always staying on the frontier, just one step ahead of everyone else in that core chat product. And yeah, maybe they, maybe they might not be able to dominate in, you know, the, the Claude code ecosystem immediately. They gotta make some plays to make that happen.

• 1:19:53Shawn Wang?

  They definitely want to, by the way.

• 1:19:54John Coogan?

  They want to, yeah, for sure. But in terms of the core thing, that's clearly dominant and huge and like game changing and profitable, like they're doing great and they should, and they should kind of, they should lead from a source of strength there because they've been through so much and continue to deliver on that front. And, and, and this doesn't seem like a cause for, like, the narrative around this, this leaving is that, okay, Meta's going to catch up to a frontier LLM reasoning model. They're going to have great image generation. But does anyone think that, you know, in three years' time, people's, people's home screens are going to switch from ChatGPT to Meta Chat? No, I don't think so. But what about you?

• 1:20:39Shawn Wang?

  Yeah, yeah. I, I don't think so. Keep in mind also Meta has its own institutional issues with AI products. I think they launched this like AI chat feature that where every chat was public. I don't think, I still think it's still there.

• 1:20:53John Coogan?

  I think it was like a box, you had to check. Yeah, people were accidentally sharing it, but it kind of speaks to like, yeah, when you're dealing with a trillion DAUs, like you're gonna have weird stuff happen. But yeah.

• 1:21:04Shawn Wang?

  I would say that Sam would be the first of many people to acknowledge that there's such a thing as a 10,000x engineer and 10,000x AI researcher. But they, they also have a very deep bench and it's not just about the bench, it's also about the data, it's also about the infrastructure that they've accumulated. That, you know, the TM, what's their, what's their acronym? MSL. Meta Superintelligence is going to have to build up effectively from scratch because effectively, Yann LeCun has failed in his, in his leadership of Meta AI there. And I think like, that's fine. Like, that's, that's a pivot. Like, that's, that's something that only Zuck can do. But like, yeah, OpenAI has a very deep bench and like, I think they are.

• 1:21:45Shawn Wang?

  Like they're good there. I would say, though, that it's a really interesting like how well diversified is this landscape is. Most people, when I talk to, you know, there's often, you know, in the AI circles, there's discussion of who has the mandate of heaven. Mandate of heaven, meaning they're just like most likely to achieve AGS.

• 1:22:04Jordi Hays?

  Swift, obviously.

• 1:22:07Shawn Wang?

  Of the big labs, myself excluded, of the big labs, a lot of people are mostly saying DeepMind is actually not OpenAI. So I think like OpenAI is like intensely aware that they're being, you know, poached. They're being outcompeted on pricing. Yeah, I'll be outcompeted on some metrics like LMS for DeepMind. And OpenAI is like extremely competitive. Like whenever I talk to them, I'm so impressed that like they're not just arrogance. They're not resting on the laurels. They're actually just like, we will win on every single front. And I think it's just a very impressive company that way.

• 1:22:43John Coogan?

  Then let's flip over. I mean, MSL is a very, it's a cooler acronym than Lama. I always loved Lama because it's a fun name, but it didn't have the same like seriousness.

• 1:22:53Shawn Wang?

  It used to be fair.

• 1:22:54John Coogan?

  Fair, and fair felt also just like it's a little nice. It's not hardcore team.

• 1:22:59Shawn Wang?

  No, we don't. We don't care about fairness. We drop safety from.

• 1:23:02Jordi Hays?

  MSL is like going to the majors.

• 1:23:04John Coogan?

  Exactly. It sounds like major league LLM, major league AI training. But, but I want to talk about the historical analogy because Zuck has been in this position before with the shift to mobile. So when Meta or when Facebook back in the day was a web browser, they initially moved over to, to an iPhone app. And the iPhone was growing and they kind of made a mistake going a little bit too far into the HTML5 route, wrapping it in an iOS shell, but they didn't build the app natively and they were kind of falling behind. But then, you know, from 2012 to 2015, Mark was extremely aggressive about acquiring Instagram and WhatsApp,

• 1:23:49John Coogan?

  rebuilding the team, hiring some great people. This is when Adam Mosseri and Andrew Bosworth came in and really, really built out monetization in the feeds. They had more money flowing through the system to actually pay for all this stuff.

• 1:24:02Jordi Hays?

  Yeah, we were covering yesterday that Zuck did a talent raid in the 2010 era of Google because he just wanted to get better at ads, basically. And then he built the greatest ad engine of all time.

• 1:24:15John Coogan?

  Yeah. So yeah, I mean, yeah. How are you? How are you interpreting like the comeback story and the fact that like Mark has also been here before?

• 1:24:22Shawn Wang?

  I think that it's interesting how you have like Zuck has almost has to fail first and then he overcorrects and and goes really, really hard and wins. In contrast, I think like VR never really had a failure because it didn't really, you know, have that had that

• 1:24:41Shawn Wang?

  that much of a success to begin with. But yeah, like MSL could only have happened after the comparative disappointment of Lama four. If Lama four had had proportionally the same traction that Lama three had, I don't think we'd be sitting here today. So actually, this is like net positive that we went through that because they were like, oh, like this, like we proved out that this is we've tapped out in this direction. And we just need a whole new team and we need to scale things in a very different way. And probably we just need to poach from the other labs.

• 1:25:15John Coogan?

  Yeah. What do you think?

• 1:25:17Shawn Wang?

  I mean,

• 1:25:18John Coogan?

  Oh, sorry. Yeah.

• 1:25:18Shawn Wang?

  It's interesting. It's also interesting, though, that what their their current strategy was their third choice. And somewhere in the middle, either first or second choice was Perplexity. And that would have led that would have led Facebook or Meta in a very, very different direction, more consumer-y than right now, which is building a lab.

• 1:25:40John Coogan?

  What do you think the postmortem on Lama four is? Is it just that they over rotated towards pre-training, massive model, behemoth, these like, you know, not focused on reasoning, not focused on all the little tricks and tool use and stuff that actually creates a delightful LLM experience or chat experience these days? Or is there something else going on there? Like, how do you tell the story of of what they got wrong with Lama four, if anything?

• 1:26:10Shawn Wang?

  I don't want to bag on Lama four too much. By the way, I put in a thing in the chat for people to compare. Scout and Maverick were great. And then the the shenanigans around LM Arena were Regrettable, but like understandable, honest mistake, whatever.

• 1:26:24Jordi Hays?

  Yeah.

• 1:26:25Shawn Wang?

  Um, but it seems that behemoth will just never be released.

• 1:26:28Jordi Hays?

  Interesting.

• 1:26:29Shawn Wang?

  The assertion, again, behemoths never released, so this is all rumors. Was that they tried to basically adopt whatever that DeepSeek did for their large fine-grained mixture of X-Force model, and it just didn't work. They didn't, they didn't put it in enough, whatever. We will never really know the answer. Uh, I, and I think like, there's probably also organizational issues around what data they can use. Uh, I, I know this for a fact, just because like, I, I've heard issues around like, honestly, like, at a big corp, when your lawyers get into the mix of training data issues, that can get very inconvenient.

• 1:27:09Shawn Wang?

  Um, when, uh, you know, I think like comparatively Anthropic, when they won their recent case, uh, they were more like, you know, seek, uh, you know, bend the laws and seek.

• 1:27:21Jordi Hays?

  Founder mode, founder mode.

• 1:27:24Shawn Wang?

  I think now that we actually have a little bit of ruling around like, okay, like, pre-trading on, on copyrighted data is actually transformative, use therefore it's fair, use therefore it's fair game, go ahead. Actually, we'll see.

• 1:27:34Jordi Hays?

  Yes, but you, the, the case is still trying whether you need to buy the underlying thing, which could still be egregiously, you know, it could be incredibly expensive to, to acquire the copyrighted material.

• 1:27:47Shawn Wang?

  Not at all.

• 1:27:49Jordi Hays?

  You don't think, you don't think that'll go through?

• 1:27:52Shawn Wang?

  No, no, no, yeah, whether or not your body underlying thing is fine, it's actually just the, the issue of copyright, whether you have to pay per use, uh, actually, uh, pay per inference. Now that that issue is out.

• 1:28:01Jordi Hays?

  Yeah, but I, I was saying the Anthropic case is still like, they had seven thousand, seven million books that they obtained through, that they don't, that they didn't purchase. And the case is.

• 1:28:13Shawn Wang?

  The pirated ones.

• 1:28:14Jordi Hays?

  The pirated ones. And so it will be interesting if labs have to effectively strike deals with publish, you know, I, I don't know, it's, it's still in the courts.

• 1:28:25Shawn Wang?

  They, they are doing that, uh, they, they probably just, just should do that. Uh, it's a one-time cost comparatively, compared to the value that they can extract out of the books, the books are just guaranteed to be underpriced, because the books are priced as though they're sold to one person. Whereas, you know, a model is going to be used by millions. So like, there is, there's just, there's just no, like, it's fine, just pay it. Um, the, the piracy thing is a, is a legacy of Books Three, which is a data set that was created in a. By, let's say, someone who was very pro piracy.

• 1:28:54Shawn Wang?

  It was a copy of Book Zwan and Books Two, it was actual licensed public domain books. Anyway, so, so, long, long story short, like, I think, I think those cases will be resolved and like, I don't, I, I think that Lama and Meta's strategy there would probably be affected by the quality of the data that they had. And the fact that they just couldn't, they, they like, sort of tied, they were playing one hand tied behind their back, whereas all the other labs were not.

• 1:29:18Jordi Hays?

  Yeah, interesting.

• 1:29:19John Coogan?

  Well, this has been fantastic.

• 1:29:20Jordi Hays?

  Last, last, one, one more question, any reactions to the news that Apple is working with, you know, potentially working on a deal with Anthropic or OpenAI, Anthropic wants potentially billions out of it.

• 1:29:31Shawn Wang?

  Very, very convenient timing for the open model release, which is rumored to be soon. But like, I, no reactions yet, I think, Apple, there's a lot of news around Apple that never materializes. I think Apple hasn't shown that it has gotten the memo like Zuck has shown. So, until, until it wakes up, like, I don't know. I think, like, around the time of the Apple intelligence launch last year, I think a lot of people, I, I was, I was commenting that, like, basically, Apple wanted to be the first layer of intelligence and then it wanted to route. So it always wanted to keep, wanted to be Switzerland, wanted to play nice between OpenAI and Anthropic and all, and whatever other labs, probably not Google.

• 1:30:13Shawn Wang?

  But I think you kind of have to make a bet. I think you, I think you had to have to go all in. Like, I'm, I'm not that interested in, in Apple making deals with OpenAI or Anthropic. I still want OpenAI to do an OpenAI iPhone. I don't feel like, I don't like the in-year device.

• 1:30:29Shawn Wang?

  And I, and you know, I, I just, I just wish they just went all in and, and took Apple on head on. Because, like, all of these are half-measures, man. Like, the, like, you're, we're gonna be sitting here like five years from now and Siri's still gonna like, kind of suck. Like, it's the same deal as, like, Amazon making a deal with Anthropic for, like, smarter Alexa. Where is that today?

• 1:30:47John Coogan?

  Yep. No, no, I was just asking. Yeah, I haven't, I haven't actually seen it in the wild.

• 1:30:50Jordi Hays?

  Great point.

• 1:30:51John Coogan?

  This is really good.

• 1:30:51Shawn Wang?

  One more breaking, one more breaking news for you guys, I don't know, you probably, that's probably missed it, but Cursor has hired the Claude Code people from Anthropic.

• 1:30:59Jordi Hays?

  What do you mean, what do you mean? Like, how many of them?

• 1:31:02John Coogan?

  I heard they hired the Notion Mail team. I didn't realize that they hired the Cloud Code team.

• 1:31:06Shawn Wang?

  That's an, that's an interesting commentary on like the, like, what is, what is Notion able to keep its people? Because the Notion Mail team was, you know, they, they just launched it.

• 1:31:14John Coogan?

  Yeah, they just launched it.

• 1:31:15Shawn Wang?

  And now they have left.

• 1:31:16John Coogan?

  Trade deal.

• 1:31:17Shawn Wang?

  But like Cursor, so Cloud Code, developers have been talking about it nonstop. I think people who are like adjacent to developers really pay attention to this one. This is as close as anything is to the new, being the new Cursor. It is Cloud Code. People are going absolutely nuts and spending a huge amount on it. Anthropic's revenue is up 4X since the start of this year.

• 1:31:39Shawn Wang?

  And like Cloud Code only launched in February. And now Cursor has poached the top two people from Cloud Code, like the creator and the PM. I'd like, it's, it's breaking news.

• 1:31:50John Coogan?

  I love it.

• 1:31:51Shawn Wang?

  In terms, in terms of, in terms of like talent trades, this is a really interesting one because it's at the engineering level and not the model level. And it's starting to spread out. It's starting to be like extremely competitive here. And I think it's very exciting.

• 1:32:04Jordi Hays?

  Wow.

• 1:32:04John Coogan?

  Well, yeah, we'll have to have you back soon since this is, this is the top story every day now. This is, this is real life. Thank you so much for joining.

• 1:32:13Jordi Hays?

  Great to see you, Sean.

• 1:32:13John Coogan?

  Great to see you.

• 1:32:14Jordi Hays?

  Cheers.

• 1:32:14John Coogan?

  Have a great rest of your day. And next up, we have Matthew Prince from CloudFlare coming in to TBPM. Welcome to the stream. Some huge news from CloudFlare. We'll let him tell us the story. How are you doing? Good to meet you. Nice to meet you. Welcome to the stream. I would love to start with the news today and then I want to go into some of the, the history of the company and, and when you faced similar junction points and kind of turning points in the past. So why don't you kick us off with the big announcement, the big news today from CloudFlare?

• 1:32:54Matthew Prince?

  Sure. So about eighteen months ago, we started getting approached by a number of content creators saying that they faced a new threat online. We spend most of our days, most of our business, trying to fight cyber hackers, Iranians, Russians, North Koreans. And so I was surprised when the new threat was AI companies. And frankly, I kind of rolled my eyes at publishers. I was like, publishers are always complaining about, you know, the next new technology. And they said, just pull the data, look at what is going on. And it was really striking that over time, you could watch as the sort of deal that publishers had made with Google, you know, starting thirty years ago, which was, you can copy all of

• 1:33:36Matthew Prince?

  my content and in exchange, you send us traffic. That deal just didn't hold up anymore, where they were copying the content, but because they were providing answer boxes, AI overviews, they just weren't sending nearly as much traffic. And that was the good news. As you looked at OpenAI, it was about seven hundred and fifty times harder than with the kind of Google of old to get traffic with something like Anthropic, it's thirty thousand times harder. And the reason why is because people are reading the derivatives, they're not reading the content. It'd be effectively like, if I asked an AI system, you know, summarize what happened on the Technology Brothers show today, I have less incentive to actually go and watch your actual show. And that means that if you're making money through advertising, if you're making money through subscriptions, if you're just, you know, getting value out of the ego of knowing

• 1:34:21Matthew Prince?

  that people are watching your show, that's going away in an increasingly AI-driven web. And we worried about that quite a bit. And more and more, as we talked to publishers, we realized there was something that we could do about it. Because CloudFlare runs one of the world's largest networks, a huge amount of the internet already sits behind us, we could partner with literally publishers, everyone from Adweek to Ziff Davis and everything in between, to say that, let's change the way that the internet works and let's change the sort of model where if you're going to take content, you should actually compensate the content creators for it. And so, starting on July first, we flipped the script. We made it as a default that if you're using CloudFlare, that you

• 1:35:04Matthew Prince?

  Can by default for free block any AI crawlers from taking your content without compensating you. And I think now the hard work begins where we have to figure out now the business model around how we get compensation back to these content creators. And make sure that folks like you who are creating real original content can continue to be compensated for the hard work that you're doing.

• 1:35:25Jordi Hays?

  Yeah, well, we used to joke saying that the labs are welcome to scrape our content because we want to influence. The outputs of the model, but no, it's a serious, it's a serious issue. We were covering one of Ben Thompson's pieces about this whole debacle a few weeks ago. And it was funny because at the time we were like, this is, there's so many different stakeholders here. Who could possibly try to figure out a solution to this problem? And I obviously the answer, you guys are a key player in this and you have the scale in order to kind of make changes happen. Can you, yeah, can you, I guess, like break down more kind of like the, kind of the market structure between and how you see this actually.

• 1:36:10John Coogan?

  Yeah, I mean, I guess what deals have been done in, over the past year, because I know, didn't News Corp do a bespoke deal with OpenAI? For that exact thing, it sounds like you are more equipped to kind of handle like the longer tail, but also some of the bigger publishers. So talk to me about kind of the state of the art of what those deals look like when they're one to one. And then what things might look like going forward?

• 1:36:34Matthew Prince?

  Yeah, so I think that, first of all, I think for some time to come, large publishers will do deals with large AI companies. Where there might be places that people need help or either small publishers or small AI companies, you know, and figuring out what has to happen there. But I think even in the case of places where deals have been struck, what the challenge is, is. You know, someone like OpenAI is paying a lot of publishers for their content. And doesn't actually object to the the basic idea that they should pay for the content that they're using. Um, but but they do object to the fact that they're paying where all of their competitors are getting content for free. Any market that exists has to have scarcity.

• 1:37:19Matthew Prince?

  And the problem, the reason why there hasn't been a market in this place, space, is that there isn't scarcity. And so what changed yesterday is scarcity was introduced really for the first time. And I I think the closest analogy is if you think back to, you know, before iTunes launched. Um, we're all downloading music on Napster and, you know, all the the free pirate services. That's effectively how the AI companies are taking data from any content creators today. And what you need is an iTunes. You need someone to come in and say, okay, let's provide a way where people can pay for that content and then can go back. Now, now that's evolved over time. I think our first version of the marketplace will probably be relatively naive and will figure it out. And I we didn't know it's paying 99 cents for songs anymore.

• 1:38:03Matthew Prince?

  Uh, we've moved to something that's closer to a subscription model like a Spotify. Um, and and and I think that that's what what we will evolve to have over time. And and if we do it right, you know, I think that we can have a large number of sellers of content, obviously. But also a large number of buyers of content, both the big sort of general purpose models, but then also very specific models. And we've got to make sure that new entrants uh can come into this market and have have a vibrant way of of participating and competing. And so I think that for now, most of the deals will be one on one bespoke deals between publishers and AI companies. You'll need to have some way of enforcing those deals and making sure that if you're charging someone, they can get access, but their competitors can't.

• 1:38:44Matthew Prince?

  And then over time, I think we'll develop something that looks much more like a robust marketplace where um uh content providers can set sort of what their price is, there can be a bid for maybe getting that that content exclusively for some period of time or or or whatever else. And that's going to develop uh over over the next uh over the coming months.

• 1:39:03John Coogan?

  Is that the correct, is that the correct model to think that the, the content producer would set the price? I mean, that's certainly what happens on Substack and, you know, the, the New York Times and the Wall Street Journal set their price. But I've always thought that this might evolve a little bit more like YouTube or like Spotify, where there is a pool of dollars that are going into ChatGPT subscriptions. I personally pay $200 a month and occasionally I fire off queries that probably land on the Wall Street Journal or the Financial Times and I would be happy for them to send 10 cents or a dollar or split off 50% of what I'm paying. So you have a hundred dollars to kind of parcel out in the pool and then you see how much inference pulled what data from what, what sources?

• 1:39:48John Coogan?

  And, and kind of have it all be driven by the, like kind of the same volume,

• 1:39:56John Coogan?

  like the volume algorithm that you see on, on, on YouTube or Spotify. Does that seem like kind of what the long-term outcome might look like? Or do we need to also get to some sort of like ad-driven marketplace? Because that's ultimately where YouTube, how YouTube prices these things.

• 1:40:14Matthew Prince?

  Yeah, you know, I think it's gonna be, I, I think that there's, there's a lot that we still have to figure out. I, I last week traveled up to Stockholm to meet with Daniel Ek, the founder of Spotify. And, and it was, you know, it was really, it was, it was interesting. He said, you know, that the ultimate model that Spotify settled on, and I think it's, I don't want to put words in his mouth, but, but he was basically like, it was, it was sort of the most naive of all of the different options that he had come up with. And it is, works as, it is a pool of funds and then they divide it up based on basically how many minutes of, of content you, you consume and there are different rates for music versus podcasts versus audiobooks.

• 1:40:55Matthew Prince?

  And, and it was fascinating to, to see. So you could imagine a version where Cloudflare effectively negotiates on behalf of all of the content that sits behind us with the big AI companies. People can opt in or opt out of being a part of that pool. The more content that's part of that, the more valuable it is to the AI companies. And then we would look at how we could split that up across how much crawling is actually done across that. I think one of the real keys will be, how can we give? Hints to the AI companies on what is the content which is the most valuable to them. So for instance, if Taylor Swift releases a brand new song, maybe does an interview about it. That's incredibly valuable content if you're a chatbot for teen lonely teen girls, right?

• 1:41:40Matthew Prince?

  On the other hand, it's probably not so valuable if you're sort of a chatbot trying to be the world's best doctor. You know, maybe there's some value in sort of bedside manner, but largely, you know, that's not going to be a big deal in your in your care. On the other hand, if a research study comes out on acetaminophen's effects on on, you know, different types of chemotherapy. Very little value for the chatbot for teen girls, but incredibly valuable for the doctor. And so what we have to do is actually, I think, on a on an LLM or an AI model by AI model basis. Be able to give them signals back to say, this is the sort of thing that you should be paying attention to, that you should be indexing. That you should be actually scraping and paying for. And the same way that in, you know, the music industry, we've got reviews.

• 1:42:25Matthew Prince?

  We've got different types of music that that people are, you know, that you might be into country, you might be in a classical. And it kind of allows you to compartmentalize that. I think that whole ecosystem has to develop, but once that does. Something very much like Spotify could be the right answer long term. And again, I think we're in a unique position to pull it together.

• 1:42:44Jordi Hays?

  Talk briefly about stable coins. I remember in this Ben Thompson piece, he was the people have been suggesting this idea that stable coins could be some part of the solution to. Or a backbone for a new business model for the internet. At the same time, while I'm bullish on stable coins, someone like a CloudFlare can set up the infrastructure to just use traditional financial rails to. Process payments, so I'm guessing that it's not part of what you're.

• 1:43:13John Coogan?

  This was Ben's reaction to the the original sin of the internet was advertising and this idea that. Marc Andreessen, when he built the browser, didn't build in payments because it was this multi-party discussion to figure out how to actually integrate payments into HTTP. Didn't happen. The first MCP spec, that's the model context protocol spec for AI agents to interact with each other, doesn't include payments. But he was kind of saying that it might be on the horizon, but would love your take.

• 1:43:41Matthew Prince?

  Yeah, you know, I think the answer doesn't have to be 100% one or the other. And so I would guess that there are going to be very traditional kind of traditional financial rails that will be ways to pay people out. But there will also likely be something that is blockchain based or stablecoin based. And again, I think we're looking at all of the different providers that are in this space, including potentially creating our own stablecoin that would be part of how these transactions, you know, take place. And I think you're exactly right that there's a natural extension from what we're doing here to how we figure out around what the payment rails look like for MCPs.

• 1:44:22Matthew Prince?

  Because as your agent is going around interacting with things, that's also going to be something that is either, you know, charged for or that you actually get paid to do. And there's got to be a way for those transactions to take place. And to the extent that you can reduce the transaction costs for those transactions as far as possible, then that's a pretty interesting way of being able to process, you know, very high volume, low dollar amount transactions. So I think that's right. My only one quibble is that I think that the original sin of the internet is not that it didn't include payments, it's that it was that there was no privacy built into it and your IP address reveals far too much about you as and who you are.

• 1:45:07Matthew Prince?

  We don't even have to get to cookies, but that's a...

• 1:45:10Jordi Hays?

  No, we totally can. What about, we've talked about content creators, publishers. What about the apps of the world, the Ubers, the Instacarts that actually have really meaningful advertiser businesses, you know, businesses built on top of them? Do you expect there to be any type of this functionality rolled out to them over time? Or is that something you think they're thinking about quite a bit? Because if I can go into ChatGPT and that's my default daily assistant, let's say in a few years from now, and I'm like, hey, order me groceries and order me this Uber. You know, I'm not in the app seeing ads potentially, you know, being upsold. And that could be a problem for those types of companies.

• 1:45:53Matthew Prince?

  Yeah, totally. And I think that, I mean, you know, robots don't click on ads. And so, and so the sort of model that, that part of the, you know, revenue stream to support these services has to come from, from somewhere. And if today, you know, Uber is able to monetize the time where I'm, I'm waiting for a car to come by showing me an advertisement, that, that means that they can effectively charge me less for the ride. And so it may be that if that ride is booked through an agent instead, and they don't get that, that advertising experience. And again, I don't know enough about, you know, Uber's business model to know how, how important that is to them.

• 1:46:37Matthew Prince?

  But if they don't get that, then maybe it is that there's some sort of premium that an agent booked ride receives versus a human booked ride. And again, I think that that's, that, that, that's just, we've got to figure out what that, what that, what that looks like. I think that's going to be less up to CloudFlare. I think it's going to be, you know, our job will be, how do we provide those payment rails? How do we provide the systems? How do we make it so, so that we can have guardrails on as agents interact with applications that are there, that you as the application provider can set those, those rules and controls? And then, and then agents can interact within, within that system. And MCP is sort of the leading candidate for providing that.

• 1:47:20Matthew Prince?

  But you're, you're right that it's a sort of draft version of that, that specification. And there are a lot of things that have to, you know, mature in order for that to be something that is the, the real kind of agent to agent system that runs, that is likely to run what will be an increasingly AI-driven web.

• 1:47:38John Coogan?

  Yeah. Can you talk about any previous crucible moments for either CloudFlare or just like the internet history broadly? This feels like a moment where you're potentially trying to

• 1:47:51John Coogan?

  I mean, deal with a shift in the in the overall internet structure or the incentive structure, but it's a reaction, but it's also an action that should reshape the the the relationship between different parties on the internet. Are there different moments in the history of CloudFlare or the history of the internet that you think we could draw on as historical analogies to learn from to see how this might play out?

• 1:48:18Matthew Prince?

  You know, I think that, you know, Google really 30 years ago defined what was the business model for the web, which was you you create content, search drives traffic, and then you monetize that content through advertising or subscriptions or ego. And ego and monetization, not quite the right thing, but you drive value from it in one of those three ways. And that that's held up for the last 30 years. I think that this is the first time that I've I've seen something where I thought, wow, there there are really going to be very, very, very fundamental changes to the structure

• 1:49:02Matthew Prince?

  of how the internet works if we move from a search-driven model to an AI-driven model. And and I think that what I hope is that we can actually make this something where what gets rewarded is not what gets rewarded today, which which largely is, you know, who can write the headline that produces the most, you know, sort of inflammatory response in in all of us, you know, who basically drives the most cortisol, you know, gets the most clicks and and therefore the most ad revenue or the most subscriptions. That's that's not a that's not a healthy way of looking at the world. I think, you know, the alternative is if you imagine that kind of all of the AI models

• 1:49:47Matthew Prince?

  together are a good kind of assemblage of an approximation on human knowledge, if we can identify where the holes are and then create incentives for content creators to actually fill in those holes, that actually is going to move humanity forward, it's going to make the AIs better, it's going to it's going to be a much more interesting thing. And that's, I think, how we're going to we're going to be creating it. I can't think in the last thirty years of a seminal moment. I think there are some things that are along the way. I think 2016 was a really a big turning point year for a lot of reasons. It was sort of the year that it went, you know, technology went from being able to do no wrong to being able to do no right. And sort of rise in populism around the world. You have Brexit in the EU. You have the first Donald Trump election.

• 1:50:32Matthew Prince?

  You've got Xi and Modi consolidating power in Asia, the Filipino election. And I think that that was a point in time where, you know, also driven by Snowden shortly before that in 2015, that a lot of the world lost faith in kind of the US model of internet governance. And it wasn't quite ready to adopt the Chinese model, but that's definitely been a shift, which is substantial. And I think we're still watching that play out. That, I think, is probably still remains the biggest threat to the overall internet. But this shift to AI as well, you know, again, I think is a real challenge, but it's also an incredible opportunity.

• 1:51:11Matthew Prince?

  If, again, we can make the rewards incentives for content creators not be who can produce the most cortisol, but who can produce the biggest sort of incremental improvement in human knowledge, that'd be an incredible win and something that, you know, I don't quite know how to get there yet. But I think yesterday or today, and, you know, we took, in July 1st, we took a real step in moving in that direction and making sure that content creators can be compensated for really producing information which is valuable to advance human knowledge.

• 1:51:49John Coogan?

  What do you think about the future of investigative journalism? There's been a big shift in just content creation into independent creators, but a lot of that is actually downstream or separate from the type of work that investigative journalists do. I'm thinking of like Seymour Hersh hanging out at a local army bar for a year before he gets one scoop that he can write a book about. And these investigative journalists, they tend to, you know, John Kerry was On the payroll of the Wall Street Journal for years, he was writing stuff, but then he blows the Theranos case wide open, eventually a book and then a movie. And and I imagine that with artificial intelligence, the value of a scoop could actually go up because

• 1:52:33John Coogan?

  you could use an LLM to read through the clickbait repurposed version of the article to find, wait, they're sourcing, actually, this person posted it on the internet earlier. They're the one that actually did the hard work to get the scoop. They should get 90% of the value and 10% should go to the repurposed rage bait version as opposed to the economic model now, which is maybe you get 90% more clicks on the on the viral, you know, repurposed content and the scooper actually gets 10%. Do you think that's possible? Or how do you think that investigative journalism will evolve?

• 1:53:07Matthew Prince?

  Yeah, I don't know. This is an answer to a question, but but it but it's I thought it was that was interesting. As I said, I met with Daniel Ak up in Stockholm and and he told me, he said, you know, we were talking about this. And he said, you know, one of the things we do at Spotify is we actually surface all of the different queries that are sent to Spotify that we don't feel like we have a really good response for. So if somebody searches for, you know, I want a song to a reggae kind of beats with, and it's all about how much it sucks when your sister steals your car and your dog, like Not to get too specific.

• 1:53:50Matthew Prince?

  I'm not, I mean, I don't know what these are, but there are musicians who take this list and they actually write songs based on what people are looking for.

• 1:53:59John Coogan?

  No way.

• 1:54:00Matthew Prince?

  And that they make tens of millions of dollars a year doing just exactly that. And there's something about that that I think is really beautiful, as opposed to the alternative of just, you know, just trying to do a little more me too of what everybody else is doing, like taking a different twist, using signals from the market in order to go find that. So, you know, again, that's not investigative journalism by any means, but I think it is actually advancing kind of the sort of good of humanity, where it's taking what a place where there's a missing need and it's filling that missing need. And so I am hopeful.

• 1:54:38Matthew Prince?

  You know, and I'm a relatively optimistic person and I'm hopeful that if we get this right, that we might be on a golden age of of content creation where people actually are rewarded for doing things that advance human knowledge as opposed to just doing things that produce as much cortisol as possible.

• 1:54:55Jordi Hays?

  Yeah, the idea of a knowledge bounty, right? It's like, hey, there are there's there's groups of people or a single entity online that will just pay you to produce really high quality information around this specific topic. Yep. And this, the internet always did this sort of organically, but it would just be somebody spinning up a blog or maybe an Instagram account or something like that. And they would just start blogging about something that was niche and then an entire network would form around it and other people would contribute to it. So I think there's quite a lot of precedent, but it would be exciting to like put that reward out before and not saying, hey, you have to do this and then maybe you'll get some ads associated with it later. But like basically like the pool of capital is here and you just have to deliver that

• 1:55:39Jordi Hays?

  knowledge that that people already want and we know it because they're searching it on L L Ms and things like that. Can I throw you?

• 1:55:45Matthew Prince?

  I think I'll tell you the sort of Black Mirror kind of dystopian outcome if we don't get this right, which is I don't think that I don't think journalism goes away. I don't think that research goes away, but you could imagine a world in which we go back to something kind of like the Medici's where there are five big AI companies and they basically employ each of them, all of the journalists, all the researchers, all the academics to be able to do the research to feed their systems because you're still going to have to have original content. People are still going to have to be able to produce that in order for the AI systems to, you know, fill in the holes in their kind of effective block of Swiss cheese or that is that is their model. But but I think that that's that's a bad, that's a pretty bad world where where again,

• 1:56:30Matthew Prince?

  because you then probably have like the conservative AI and the liberal AI and I mean, all these things that we've kind of that the internet kind of broke apart, you could imagine AI is a system that is just this massive consolidator in the future. And I think that's a bad outcome and I think a better outcome is if we can figure out. How can we reward people for, again, driving knowledge, but not get to a place where all of them have to be employed by one of the five?

• 1:57:00John Coogan?

  Yeah, I actually talked to somebody very high up at one of the AI labs who said that, was saying that like, if you take the total salaries of all the journalists in America, it would be a fraction of what the AI labs are spending right now just acquiring data. And so it's not a financial question. It is a political, cultural question. It's interesting.

• 1:57:21Matthew Prince?

  That's also the argument why I think that, and I've been really positively surprised as we've talked with, because we've talked with all the big tech companies, all the AI companies about this, and they all, like, with maybe one or two very small exceptions, they all say, yes, we understand over the long term, we have to pay for content. And so they get that. What's key, though, is it has to be a fair playing field. And that fair playing field, everyone sees that slightly differently. So if you're a new incumbent, you want to say, well, Google can't be advantaged. If you're Google, you have to say, you know, well, we have to be respected for the ecosystem that we've helped build and flourish, and we should be able to, you know, so everyone's got a slightly different take on this.

• 1:58:04Matthew Prince?

  But I'm actually encouraged that the dollars are there, that there is an acceptance that this is something that needs to happen, and that if you ask them, everyone says, yes, we need to do this as long as you can create a level playing field. And then, again, that's where I think our role comes in, is how can we create that level playing field? How can we create scarcity? And then how can we make sure that content creators are being compensated for the hard work that they're doing?

• 1:58:33Jordi Hays?

  Zooming out just for a second, what is the state? How's the internet been for the last few weeks? It's been a busy month, or last month in geopolitics. And I know that makes your job a bit harder, or at least I would imagine things get a little bit busier.

• 1:58:49Matthew Prince?

  Keeps it interesting. I mean, whatever. Whatever you see sort of in the sort of kinetic side, the physical side of a conflict is usually replicated in the cyber side of the conflict. And so, you know, we, as the hostilities ramped up between Israel and Iran, first of all, we saw very clear signals that something was coming ahead of time, which is, it's interesting how there's sort of a digital residue, which shows when there's going to be kinetic action taken. And so, we were watching that pretty carefully. Big attacks targeting both Iran.

• 1:59:30Matthew Prince?

  One of Iran's largest banks was hacked by what looked like a group of Israeli hacktivists. The largest cryptocurrency exchange in Iran was hacked and all its funds were drained. Again, looking like it was either by the Israelis or Israeli sympathetic attackers. Iran has tried to do the same thing against Israel. Israel's cyber defenses are much stronger, but we're starting to see that Iran is targeting other largely US financial services firms, critical infrastructure firms, to try and see, to sort of try and strike back from what is, you know, how do they strike back

• 2:00:13Matthew Prince?

  against the US in a way that is harmful but doesn't start World War III? And I think that increasingly, unfortunately, cyber will be a big piece of that. And so, we're, you know, we're doing everything we can to stay in front of that, make sure that anyone who needs it has protection and that we can keep the lights on everywhere in the world.

• 2:00:31John Coogan?

  Last question for me.

• 2:00:33Matthew Prince?

  Go for it.

• 2:00:34John Coogan?

  There's a number of larger overarching tech narratives. I'm interested in if you're losing sleep over any or tracking any in particular focus. The AI talent wars and kind of pay inflation for top performers, is that an issue or something you've been tracking? Or the difficulty to build larger data centers and infrastructure, the GPU shortage, the chip wars? Any of those topics kind of particularly relevant to you or your business or kind of keeping you up at night?

• 2:01:06Matthew Prince?

  Yeah, you know, I think we're not trying to build a foundational model LLM. So we're not as much competing for the bleeding edge AI researchers. I will say that I've been really amazed at both from an academic side and then also just, you know, pure talent side, how many people are interested in working on that problem of something like, how do you score content in order to be able to create a marketplace? And so that's something that's been pretty exciting. We're very excited about the people who are coming to apply to work for CloudFlare, to work on problems like that. And like today has been a record applicant day for us. On the

• 2:01:46John Coogan?

  Congratulations, record.

• 2:01:47Matthew Prince?

  Sorry, I hit the air horn for you on the record applicant day.

• 2:01:51John Coogan?

  But it's good, it's good news.

• 2:01:53Matthew Prince?

  And then, you know, I think, you know, we've, we tend to put a little bit of equipment in a lot of places. And so that we don't tend not to have kind of massive, multi-

• 2:02:04John Coogan?

  Yeah, you're not running into like power constraints or rare earth element constraints or water rights and strengths.

• 2:02:09Matthew Prince?

  We do, but in kind of a micro way where, you know, we put GPUs at the edge of our network, we have to live with a power envelope that we're given by an ISP. And so we're doing things to try and figure out how to just get the best power efficiency out of the GPUs there. The answer to, you know, more and more need of GPUs can't be everyone has to turn up their own nuclear power station. So I do think the place where we're pushing suppliers and AMD is doing some really interesting things in this space, Qualcomm is doing some interesting things in this space, Fruit Company down in Cupertino is doing some interesting things in this space, are how do you focus on, yes, performance, but performance per watt? And we've seen this game before with Intel saying, oh, that doesn't matter. Like just get the most performance possible.

• 2:02:53Matthew Prince?

  You can water cool things, all kinds of things. That tends to not be the winning strategy over the long term. And so we do think that there will be a renewed focus on just energy efficiency around GPUs. And we're really pushing that in a way that, because again, we can't build our own data centers in the business that we're in. And then chip shortage, the chip shortages are funny. Like it's- There's never been a chip shortage in any time in the history of silicon that doesn't turn into a glut.

• 2:03:24John Coogan?

  Hey, but this time it's different.

• 2:03:26Matthew Prince?

  This time it's totally different. So I think that I think you're gonna see both.

• 2:03:32Matthew Prince?

  You're gonna just see shifting demand that's there and and and a lot more. It's Nvidia is not going to be the only chip supplier of GPUs. There are some really, again, great, great other providers that are out there.

• 2:03:43John Coogan?

  Yeah, well, thank you so much for stopping by. Really enjoyed the conversation. Congrats on the launch and come back on again soon. Yeah.

• 2:03:48Matthew Prince?

  Yeah, thanks.

• 2:03:49John Coogan?

  Congratulations. Good luck filtering through all those job applicants. We'll talk to you soon. See ya. Bye. Really quickly, I got some breaking news. The best performing AI agent now comes with a $1 million guarantee. That's right. fin.ai, the number one AI agent for customer service. Number one in the world. Number one in performance benchmarks, number one in competitive bake offs, number one ranking on G2, and you can start a free trial. Don't try to bake off with fin. You don't want to be baking off with fin.ai. From Intercom. From Intercom. Head over to fin.ai to get started. I'll be right back and kick it off. Yeah, we'll bring in Luca from Pudgy Penguins. We're going to talk about what's going on with the market structure bill, what's going on with the Genius Act, what's going on with his business. So we're very excited to catch up with him.

• 2:04:34John Coogan?

  It's his second time on the show. He came on during Crypto Day, fantastic conversation, and now we're excited to have him back on to talk about the state of crypto. How are you doing, Luca? Good to see you.

• 2:04:45Speaker 05

  I'm doing good. How are you doing?

• 2:04:47John Coogan?

  I'm great. What is that behind you? The Igloo? Is this part of the Pudgy Penguins' expanded universe?

• 2:04:54Speaker 05

  Yeah, the holding company that holds Pudgy Penguins, Abstract, and a couple other companies we've got to announce that we've acquired is called Igloo. So everything lives within the Igloo.

• 2:05:03John Coogan?

  That makes sense.

• 2:05:05Speaker 05

  There you go.

• 2:05:06John Coogan?

  Has there, is there a, is anyone riffing on the meme of like selling ice to an Eskimo yet? I feel like that's, you know, I know that you're good at doing deals with old line retailers, but can you sell ice to an Eskimo?

• 2:05:20Speaker 05

  I can, I can sell ice to an Eskimo. I can sell fish to a penguin.

• 2:05:26John Coogan?

  That's good.

• 2:05:26Speaker 05

  I can sell land to a mammal.

• 2:05:29John Coogan?

  Yeah. What is, what, what is the latest? I mean, we caught up on crypto day a couple of months ago. What's the latest in your world? How are you feeling? We've been in this kind of kangaroo market for the high level L1s. Prices are up, prices are down. Everyone's kind of waiting for the next big crypto catalyst, but maybe that's the genius act. The market structure act, maybe that's legislation, but what else are you tracking? Stablecoins have been really hot with the Circle IPO. What's been top of mind for you?

• 2:05:56Speaker 05

  Yeah, our big thing at the Igloo is actually like, we feel like we are one of the most well-positioned organizations for consumer and culture in crypto. And it was actually a little fascinating because I actually felt like I missed a piece in terms of what I felt like was needed for this consumer crypto revolution. And I think it's really prevalent around this genius act, which is, I think you're going to see crypto breakthrough mass off the backs of stablecoins. Because if you look at all of the consumer crypto applications and really their barrier and bottleneck.

• 2:06:33Speaker 05

  You know, I, I, I thought it was product builds and I do think that is true to a certain extent, but I think the product builds are a byproduct of the current environment that rewards builders for building in. And I think that gets completely flipped on its face when average consumers are now transacting in dollars that are on chain. It opens up a whole new vertical of product builds that I think are more oriented around maybe providing a service or an experience and not providing a scheme to return your dollars two or threefold as like a financial mechanism for you to kind of speculate on.

• 2:07:13John Coogan?

  Yeah.

• 2:07:13Speaker 05

  And so I think like the genius act is quite literally going to kick off the consumer crypto revolution. And that is really apps that are built around, I think, the best properties of blockchain, which is like on its face. I think a lot of people listening, specifically around your audience, like maybe look at. Blockchain is like maybe speculative vehicles or like programming languages. But I think the best frame to look at it as is like a blockchain is a censorship resistant version of a Stripe or a PayPal that taps into global composability and global liquidity, which basically means that like anybody with an internet connection can transact, you know, using these payment rails without some sort of intermediary.

• 2:07:55Speaker 05

  And that at scale, if you actually understand like consumer product builds, you know, every, every guy that I know that's building an AI or building consumer product goods at one point has had their account locked up or their funds withheld or are paying a huge premium on these transactions, whether it's 3%, in some cases 5% to 8% if it's a higher risk product. And I think this, you know, blockchain is very useful when you think about removing that middleman for those applications. I think we've just been pigeonholed as an industry around like these builds that are solely around speculation and making the end user more money, right? Like I go buy this, I should return a 2X or a 3X or a 5X.

• 2:08:37Speaker 05

  And I think we're slowly transitioning into more traditional builds where it's like, hey, consumer crypto is really around this idea of removing these, these layers that I think today make it so hard to build, you know, fun and robust applications that are, you know, segmented either geo, from a geography perspective, whether it's certain regions, et cetera. And, and I think it's kind of transitioning to like more real product builds that I think more serious entrepreneurs are interested in. So the genius act, I think is going to change everything because the, the floodgates for stable coins are here. And I think that was the missing piece to the consumer crypto revolution that I think crypto very much desperately needed.

• 2:09:20John Coogan?

  Okay, I want your reaction to this older analysis by Ben Thompson during the first NFT boom, where he was talking about the value of NFTs as a, as a, as a disintermediated membership program essentially. So basically the, the, the link I see to stable coins is if you have a community. And you're a creator, you might not want to have someone have a super fluctuating financial interest in your community. And so when I think about the folks who are big on Patreon and it's $5 a month or $10 a month, but when I pay $30 a month for the

• 2:10:04John Coogan?

  Wall Street Journal, I get access to WSJ.com, I can comment there. There's a bunch of other things that you could imagine, but I can't really go around the internet and carry my Wall Street Journal login to their YouTube account and get custom YouTube videos, like the videos have to be embedded on the Wall Street Journal website. So it can't really follow me around the web. And Ben Thompson was talking to Adam Mosseri at Instagram about this idea that Instagram might be open to a bring your own membership type of integration with Web3. And so I think that we were almost there, but there was no one that really broke out into mainstream adoption where both you gotta get YouTube and you gotta get Instagram

• 2:10:46John Coogan?

  to say, yes, we are, we are, you know, integrating this membership card as a native, as a primitive on our platform to allow, you know, creators to create, you know, subscription level content. Instead, we wound up with every social media app has their own subscriptions. So I can go get YouTube, YouTube premium subscribers who subscribe to me, pay me $5. Then on X, I can have subscriptions, $5, they subscribe to me there. But you gotta follow me around. You can't just subscribe to me as the creator. That felt like something that Web3 could do, but we weren't quite there with stable coins. Is that something you think is a reasonable dynamic that could play out post Genius Act? Is there still some sort of countervailing

• 2:11:28John Coogan?

  force where the big tech companies might just want, not want to give it away because, hey, they're earning a cut on those membership revenues directly? How do you see that playing out?

• 2:11:37Speaker 05

  They're they're definitely not going to want to give it away, right? Like, those guys are pretty good at capturing and trying to keep revenue. I think like one of the big, you know, bull cases around Web three is like these universal logins and identities, right? That like follow you all over the internet. Like that, that's going to take a lot of pieces to put together, but like things like the genius act, right? And everyone transacting in stable coins makes that so much more possible and feasible. That I don't know of anyone who's really mastering that build just yet. And to the point of NFTs, I think there's two bull cases for NFTs. One, which is the one that you referenced, which is access, right? And that is a more mundane, probably less exciting, but probably bigger TAM. Cause you could replace the entire ticketing industry and OnlyFans and Patreon, like you'd mentioned.

• 2:12:23Speaker 05

  And info, right? The WAP guys can go and plug that in. So I, you know, I, I, I think there's that. And then there's also the TAM of digital collectibles, which is, you know, physical collectibles today have a total addressable market of about 600 billion. 1% of that 600 billion is digital, yet digital collectibles have a slew of pros that physical do not, right? They are, they have no friction when buying or selling. They have no insurance issues. They have no storage issues. They have no inauthenticity issues, right? And, and so I think there's a, there's a gap in value to capture in terms of, you know, in a $600 billion market. It's kind of like gold to, you know, physical gold, the digital gold, you know, Bitcoins captured 10% of it.

• 2:13:03Speaker 05

  I believe that digital collectibles are, you know, whether you argue what side of the spectrum they're on, they're not 1%. They shouldn't have 1% of that market share. And so I think there's going to be value to capture between that spread.

• 2:13:15Jordi Hays?

  The other, the other, the other thing that stands out to me as a, as just an observer is that I think when people are frustrated with the NFT market broadly, it's frustration with 90. It's basically saying like, yes, 99% of attempts to create new IP are going to fall flat. Cause it's really hard to create IP that is actually like, it's easy to create IP. It's hard to create valuable IP, right? And most people don't see the random scripts that are floating around Hollywood.

• 2:13:47John Coogan?

  Ninety percent of scripts in Hollywood don't go anywhere.

• 2:13:49Jordi Hays?

  Fall flat.

• 2:13:50John Coogan?

  But one percent of them become Star Wars.

• 2:13:51Jordi Hays?

  They just hit the chain and they're, they're, they're, you know, people assume that there should be some value tied to them. And so I think it's just very possible that, that NFTs become bigger and bigger and bigger, but it's just a handful of really select projects. That, that, you know, become these sort of centers for gravity and get developed in all these different ways, but you're not going to have a hundred thousand projects that each have movie offshoots, video game offshoots, you know, physical toys attached to them. And that's exactly the way it happens in the real world where people, people in Hollywood, like you said, will spend their entire life trying to develop a cartoon. That actually turns into a franchise and many people will try and fail.

• 2:14:34Jordi Hays?

  And the difference with crypto is like the expectation is immediate value creation and I just don't, I don't see that happening.

• 2:14:43John Coogan?

  Yeah.

• 2:14:44Speaker 05

  The, the tokens, whether it's fungible or non-fungible, there's a superpower behind it. It's a kryptonite and it's a superpower depending on how you harness the power. The financial alignments can be your greatest weapon or your greatest weakness. Right? And how you harness that, right? Like us being able at pudgy to galvanize this group of 10,000 people. To go and hit algorithms. Our big breakthrough at pudgy was I told all of them that Walmart had turned us down. That we were going to go live on Amazon and that I needed everybody to buy. And if they bought it, right? All at the same time. We would trigger Amazon algorithms. We'd be number one across all of these different categories. And that did give me a lot of leverage to go do a deal with a major retailer.

• 2:15:29Speaker 05

  Well, what happened was exactly that. We launched within, you know, 30 minutes of launching on Amazon. I'm across, I'm number one across basically every consumer product category. Every toy category. And then, and then Laura Rush, who was the head of merchandising at the time at Walmart pinged us and said, we want to stock you. You've got three months. We're going to put you in a pallet in the center of the store in 2,000 locations in quarter four. And that was like the big paradigm shift for pudgy where people are like, oh shit, you know, these kids, you know, came out of nowhere and did it. And the rest is history. We've basically, you know, carried that momentum up until where we are today. But that was our big breakthrough. And that was because I think of that alignment and that incentive. Everyone was incentivized to go and create this headline in this moment for pudgy, at least the core community members who had

• 2:16:13Speaker 05

  quote unquote, bags or collectibles or tokens within the ecosystem. And if you can harness that and if you can respect that, it can be a superpower. It can be your greatest kryptonite, as you've seen 100 times over. And there's, you know, plenty of horror stories which we won't get into.

• 2:16:28John Coogan?

  Yeah, bit of a wild card question, but I don't know if you saw, OpenAI has a deal with Mattel to make a chat GPT enabled Barbie potentially. We don't really know the shape of the deal.

• 2:16:40Jordi Hays?

  How many LLMs can fit in a pudgy penguin?

• 2:16:42John Coogan?

  Yeah, yeah.

• 2:16:43Jordi Hays?

  That's what we want to know.

• 2:16:44John Coogan?

  I mean,

• 2:16:44Jordi Hays?

  Can fit a lot of LLMs in this bad boy.

• 2:16:46John Coogan?

  I mean, you're, you're, you're in some ways in the toy business. And what is the next generation of toys look like? What are you optimistic about? What will change? What technologies do you think will be integrated? What considerations will drive actual success instead of just like, yeah, we slapped AI on it. Like, we tried that with, with every toaster having Bluetooth. Didn't really work out, but the Nest thermostat, pretty fit, pretty, pretty popular. So, yeah, what, how does this play out?

• 2:17:15Speaker 05

  It's a great question. I saw this coming two years ago and I basically jumped for joy when I thought of it and I told the guys, because for those who are not familiar, the toys that we sell have the QR codes. So it's not just like selling toys that are, you know, IP related. We're actually putting NFTs in the hands of regular people. Cause you buy this toy, you scan this QR code, you redeem these NFTs through a gas experience. So it's like a whole crypto funnel, which is basically our product, our, our physical toys. But I jumped for joy because I was like, dude, what if these, these characters that you bought? And these NFTs that you created then became like your AI homeworker helper, right? And this was an idea I had two, two years ago. And Lorenzo, our president was like, you know, dude, you know, there's a 0.01% chance this homeworker helper tells a kid to kill himself.

• 2:17:57Speaker 05

  It's not worth it because we'll get de-shelved and it'll create a bunch of chaos. And we weren't, you know, AI guys. But we actually are doing a toy with Curio who recently raised pretty big over in the whole, you know, AI crypto or AI, you know, startup Twitter land, X.com land.

• 2:18:15Jordi Hays?

  That whole place.

• 2:18:17Speaker 05

  Yeah, we're that place.

• 2:18:18Jordi Hays?

  We're familiar. We've dabbled.

• 2:18:22Jordi Hays?

  That's great. Yeah, who's the musician that's involved with that?

• 2:18:29John Coogan?

  I don't know. I mean, yeah, I'm super bullish on this. You know, I have kids and, and I mean, I was thinking about this with the Rabbit R1, like, yes, the safety and security stuff is really, really important, but safety interpretability research and the ability to run an extra LLM, just filtering, is this a harmful response from the LLM? That seems to be getting better and better. And I'm pretty optimistic about having a watered down LLM that can't explain everything, but is really good at identifying plants and animals. That's going to be a big product for kids, I think. So.

• 2:19:04Speaker 05

  The trick to CPG is all about providing value for the customer. Like Walmart will tell you if you're trying to stock, like, they're always optimizing for the best deal. And so my mind frame is like, how much bang for your buck can you get for this purchase? Well, if you can buy it and redeem some NFTs, that could be worth some digital dollars, maybe you recoup your costs on the physical item, and then it's a net free good. And then maybe you can go in and ask it questions, and now it's a value add. And so I think this stuff is just changing. It's a complete paradigm shift. I think, I think no one's really ready for how I think the world is going to change. But in terms of a value add, you can plug in an LLM to a lot of physical products, just alpha for the room, you know, and create a ton of value for your end consumer, which is ultimately your goal as an entrepreneur.

• 2:19:46John Coogan?

  That's awesome. Well, thank you so much for stopping by.

• 2:19:48Jordi Hays?

  Always appreciate your perspective.

• 2:19:50John Coogan?

  We gotta have you back when there's more breaking news, and we'll keep, we'll keep catching up with you. Good to see you.

• 2:19:56Jordi Hays?

  Cheers, Luca. Have a good one.

• 2:19:58John Coogan?

  Really quickly, let me tell you about adquick.com. Out of home advertising made easy and measurable. Say goodbye to the headaches of out of home advertising. Only AdQuick combines technology, out of home expertise, and data to enable efficient, seamless ad buying across the globe. If you're going to be in Walmart, if you're going to be selling toys, you got to get on adquick.com. Anyway, our next guest is here. Julia, hey, how you doing?

• 2:20:19Julia Steinberg?

  Very well. I like the intro music.

• 2:20:22John Coogan?

  Yes, welcome to the stream. We are professional newscasters, as you know.

• 2:20:27Jordi Hays?

  You're one of a handful of people in the entire world that has actually visited the Temple of Technology.

• 2:20:32John Coogan?

  You've been into the Temple of Technology.

• 2:20:34Julia Steinberg?

  Yes, the capital of capital.

• 2:20:36John Coogan?

  Yes.

• 2:20:36Jordi Hays?

  That's right.

• 2:20:38John Coogan?

  Give us the latest and greatest in your world. New, new piece in Palladium. What was the thesis? What inspired it? Take us through the high level of the piece.

• 2:20:50Julia Steinberg?

  Yeah, so something I've been thinking about for a while, it was actually sort of inspired by this freshman at Stanford who I was talking to in the library, very, very sweet girl. And she was like, what are you doing post grad? And I said, well, I'm working for this magazine called Arena. They want to do books, so I'm going to be helping with that. I'm super excited. And she said, that's a 1930 ass job. And I was like, well, why is it a 1930 ass job? Well, it's like, you know, most people are like consultants or software engineers, but you're making like this very real thing. It's like you can touch. It's like, yeah, like maybe it is a 1930 ass job. I guess people, a lot of people in the 1930s didn't have jobs, but there were some people who were writing books and publishing books. So I was sort of thinking it's like, well, how do we get to this point where it's like,

• 2:21:36Julia Steinberg?

  you, it is sort of like this weird thing for people to be doing something real and tangible. And then I think it's also just, you know, I sort of feel like graduating from Stanford in 2025, in some ways, I'm like out on the last chopper out of NOM.

• 2:21:51Julia Steinberg?

  Like, ChatGPT was only like super ubiquitous, really my senior year. Like sometimes you just walk into the library and everyone had ChatGPT on their screens. And it was just, you go to section and the section leader would be like, please, like, I know it's really easy to use AI, but it would really make me sad if you used AI to write your weekly reading response. And then just sort of just like all these things that were just like, you felt like you're more practicing, like acting like a college student because just AI was just making a lot of the day to day like obsolete. And it's also just like, there's a pretty good chance that like AI is a better writer than I am. There's a really high chance AI will be a better writer than I am in five years.

• 2:22:35Julia Steinberg?

  And I think it's like, well, if what I wanted to be is a writer and that's going to be obsolete or AI is going to be better than that me. Or like if my friends who want to be lawyers are just going to be replaced by Harvey and my friends who want to be software engineers are going to be replaced by Cursor, like what does the future look like?

• 2:22:53Julia Steinberg?

  And I think I was also guided by this conversation I had with a wonderful professor at Stanford, Jennifer Burns. She's in the history department. She has written biographies of Milton Friedman and Anne Rand. I took a really great class with her in the fall called Thinking About Capitalism. And I've had a lot of conversations with her just because I found her work really interesting. And she asked me, she was like, you know, you're sort of like, pretty like enmeshed in like the current, you know, right wing intellectual moment. Who is like the defining like economic thinker? And this was back in like October, November, and I was just totally stumped. And when I, when I sort of published the piece with Palladia, my senator, and I was like, this is sort of my answer to like,

• 2:23:33Julia Steinberg?

  what, what is the economic thought of Gen Z or really of the 21st century? And it's economic nihilism.

• 2:23:41John Coogan?

  It's nihilism. So, yeah, are we cooked? Where are you most bearish? It seems like you're, you're worried about a lot of different trends. Is, is, is capitalism cooked? Is democracy cooked? Is, um, is technology the problem here?

• 2:23:59Jordi Hays?

  I'd be curious to get an anecdotal job market kind of update. It sounds like we got breakfast last week and you were saying that sure, somebody, uh, some of your classmates got offers from what was it like Timu or something, something to work in like a warehouse and they were all like super offended.

• 2:24:16Julia Steinberg?

  Yeah, it was Shein. And it was like, become this like Shein warehouse manager. And I was like, actually, that sounds like a really interesting job. Like if I didn't have something lined up, maybe I would apply to be like a Shein warehouse manager. And there's this app called Fizz, which is sort of like Yikyak 2.0. It's an anonymous forum for college students at particular campuses. And people got so mad that Shein like dared ask Stanford students to stoop to their level to become a warehouse manager. And I think there's It's sort of like a paradox because Stanford students believe that they are they are entitled to certain jobs and this is true of sort of like all Ivies or elite universities. But there are a lot of jobs that people aren't willing to do.

• 2:24:59Julia Steinberg?

  And I sort of wrote in the article for Pladium, it's like the line used to be, well, the hardest part about Harvard is getting in. And now I would say the hardest part about Harvard is getting a job that your peers deem elite enough to not feel any like social backlash or to feel comfortable in the rat race. And I think it's Peter Turchin, who's this phenomenal historian, has written a lot about how conflict rises in societies when there are more elite aspirants than there are elite positions. And I think especially as class sizes at these schools are expanding and the internet is democratizing access to education and democratizing access to power in some

• 2:25:40Julia Steinberg?

  ways, I think that these schools are in a really tough place because there it is not is no longer a guarantee that you can go to Stanford, you can go to Harvard, you can go to Yale and be upper middle class.

• 2:25:55John Coogan?

  Is are there really not that many jobs at McKinsey, Bain, BCG, the Wall Street banks, the big tech companies, the PMs? It feels like we're hearing a lot of nervousness about job loss and not hiring, but it feels like also McKinsey's printing a bunch of money just writing, you know, slide decks about AI transformation in the Fortune 500? Or has the actual shift in what is a high status job changed? And and if it has, what what is the high status job? Is it entrepreneurship now? Is it YC? Where are we sitting with that?

• 2:26:30Julia Steinberg?

  I think it's I think it's VC. I think it's entrepreneurship just regards to.

• 2:26:33John Coogan?

  VC? They want to go straight to venture capital?

• 2:26:36Julia Steinberg?

  Yeah, this is this is the golden ticket.

• 2:26:38Jordi Hays?

  Just kidding. We support venture capital.

• 2:26:41Julia Steinberg?

  I think like anecdotally, it seems that big tech is like that used to sort of be like, okay, everyone told you to study CS and if you study CS, you'll have like a 200K post grad salary and now that's not really happening anymore. Like, yeah, it's, I think there's definitely a shortage of, or especially in like more big tech firms, which offer more security than like startups. It's a lot harder to get those positions now than five or 10 years ago.

• 2:27:09John Coogan?

  Do you think that's more of a hangover from COVID and kind of Elon showing that he could run X at 1/5 the headcount versus truly AI disruptive to like replacing workers?

• 2:27:22Julia Steinberg?

  I think it's probably both. I think there is like the zero, well, there's a time in 2021 where just people were throwing money at anything that they could throw money at. And I think we're in very different times now, but I think, I think about it less in terms of just like, oh, what's the market like now and more in terms of like, how has the social contract changed? And I think for a lot of elite college students, the sort of social contract was for a time like, okay, if you study like these three things, then post grad you will have like, and you don't fuck up in college, you'll have like pretty easy access to these really important,

• 2:28:02Julia Steinberg?

  high paying jobs. But I think we've seen now that it's like maybe a job at Goldman Sachs as an analyst, isn't that important? You're just like changing font colors for 110 hours a week. But also just we're seeing underemployment rates in these sectors. I think the computer science underemployment rate is one in six, which is insane considering that pretty much every authority figure I had from ages like eight to 18 told me to major in computer science.

• 2:28:31John Coogan?

  Yeah.

• 2:28:33John Coogan?

  Do you, Sam Alden wrote this post about the soft singularity and his kind of thesis was that if you went back to 1930, they would think we all have fake jobs. And so we will maybe create new fake jobs. Are you optimistic about that at all?

• 2:28:50Julia Steinberg?

  Yeah, I don't think the fake jobs thing is necessarily going away. Like I'm in LA right now that's my parents live and every third person is an influencer. So it's not hard for me to see.

• 2:29:00John Coogan?

  Let's hear for the influencers.

• 2:29:02Jordi Hays?

  The hardworking content creators.

• 2:29:05Julia Steinberg?

  It's very hard to go and get them.

• 2:29:06Jordi Hays?

  Slaves to the algo.

• 2:29:08John Coogan?

  Yeah.

• 2:29:09Julia Steinberg?

  But I think what we're gonna see is just, there's a lack of, or what we're sort of seeing, it's like, they're having fake jobs for, I don't know, maybe, probably not eternity, but for like, recent history. And what we're going to see is just the fake jobs, it just, the work becomes more and more meaningless. It's like, I don't know what the fake jobs of like, five years, 10 years from now are gonna look like. But I think, like, a key thesis to my article was that, like, Gen Z is simultaneously like hyper-careerist, but like, there's no career at all. It's just sort of floating around from one job to the other. And because there's so much, like, hopping over from one company

• 2:29:54Julia Steinberg?

  to another one, firm to the next, there's never really any, like, real expertise that's developed. And there's this shallowness in the work. I think it's like, my parents, especially my dad, who just retired, he worked at one firm for like, the vast majority of his career. He was like, an expert in that, in that field. And that wasn't anomalous for people of his generation, some boomers at all. But I think now with Gen Z, it's just like, okay, you have one job for six months to two years, and then you move on to the next thing. And these big companies have like, incentive structures built in, like McKinsey, that has search time. It's like, okay, well, we're gonna, after one year, we'll give you six weeks off, so you can go and look for another job. And I think

• 2:30:36Julia Steinberg?

  in sort of doing that, it's admitting that it's a fake job, because it has no real tie to its employees, and no real tie to their employees sticking around.

• 2:30:46John Coogan?

  Yeah. For some of the new grad roles, at least the big three, they they'll very much encourage you to go take two years off to do an MBA, which feels like, I don't know, it just feels odd to me to like, lose an employee that you could be just nurturing internally and growing and stuff. What's the reaction on campus been to the the big AI trade deals, these massive offers? Are people, most of those folks who are getting hundred million dollar offers, they have PhDs, they're published papers, maybe the new advice should be, don't just get a CS job and then a CS degree and then try and go work in big tech, maybe it should say, actually stick in academia longer.

• 2:31:27Julia Steinberg?

  Yeah, I don't know, I can't say, just because like, I'm not a CS major, in fact, I never took a single CS class at Stanford.

• 2:31:34John Coogan?

  Yeah.

• 2:31:35Julia Steinberg?

  But I also think the people who go into CS PhD programs just like, love the subject. And I think like the Stanford in particular is very good at getting people to major in computer science, because they just teach the intro courses very, very well. But I think that's a very different demographic, the people you just sort of want to check out for college have like, an easy-ish major that a lot of people around them do so they can have a cohort, versus the people who are like, I'm really into systems, like, the thing is, like, if you met someone at Stanford who was like, a systems concentrator rather than an AI concentrator, they're like, really in it.

• 2:32:14Jordi Hays?

  Oh, you're a systems guy? Name every system.

• 2:32:17John Coogan?

  This is symbolic systems?

• 2:32:19Julia Steinberg?

  No, symbolic systems is a fake major, it's like, the systems crap in the CS.

• 2:32:23Jordi Hays?

  Shots fired.

• 2:32:23Julia Steinberg?

  I also did a fake major, so I'm not.

• 2:32:25John Coogan?

  That's so funny.

• 2:32:26Jordi Hays?

  The realest major is art history, higher employment than CS.

• 2:32:30John Coogan?

  You know, symbolic systems is like, like, literally every first employee at all the big tech companies who's worth like, a hundred million dollars now. They're all symbolic.

• 2:32:37Julia Steinberg?

  It's like, they probably have a higher average income than the average comparative literature major, which is what makes it.

• 2:32:44Julia Steinberg?

  Oh, well, well, thank you so much for stopping by. Jordan, do you have any other questions?

• 2:32:47Jordi Hays?

  Let's make this you're new. Our you're our Gen Z correspondent.

• 2:32:51Julia Steinberg?

  Oh, gosh. Okay.

• 2:32:53Jordi Hays?

  We need you. We need you. I want more updates reporting on the Stanford class of 2025. Where are they landing?

• 2:33:01John Coogan?

  We got a fake job for you. Gen Z correspondent on a live stream.

• 2:33:05Jordi Hays?

  Yes, new fake job alert.

• 2:33:08Julia Steinberg?

  New fake job. I had a funny idea when I was editor, but never got around to doing it. It's your one last thing. Was that we would compile the names and photos of everyone who got a job at Goldman Sachs. And it was just black and white portraits of all of them listed like vertically. And it was titled our best and brightest. Something like that for you guys.

• 2:33:27John Coogan?

  There we go. Let's see it.

• 2:33:29Jordi Hays?

  Love it. Well, very, very excited for you to be at Arena.

• 2:33:32John Coogan?

  Who's going to take the company's public if not Goldman Sachs?

• 2:33:36Julia Steinberg?

  I don't know.

• 2:33:37John Coogan?

  Who's going to issue the the massive debt to back these corporate titans if not Goldman Sachs?

• 2:33:44Julia Steinberg?

  Well, they are best and brightest. They're doing important things.

• 2:33:46John Coogan?

  They are. Anyway, this has been fantastic. Thank you so much for stopping by.

• 2:33:50Jordi Hays?

  Great to see you.

• 2:33:50Julia Steinberg?

  Thank you.

• 2:33:51Jordi Hays?

  Cheers. Talk soon.

• 2:33:52John Coogan?

  Up next, we have Joel from Thomson Reuters coming in the studio. He was supposed to be on AI Day. He's buddies with SWYX. It was introduced to me by Sean SWYX, who's been on the show earlier. We're going to dig into how Thomson Reuters is using artificial intelligence and what's going on in the enterprise. Welcome to the stream, Joel. How are you doing today?

• 2:34:13Speaker 07

  Guys, how's it going?

• 2:34:14John Coogan?

  It's going great. Good to meet you. Would you mind kicking us off with an introduction on yourself? And then I'd love to know a little bit about the shape of Thomson Reuters business. People are obviously familiar with the brand, but on a day to day basis, what's actually going on the technology side?

• 2:34:29Speaker 07

  Yeah, you bet. So I've been at Thomson Reuters a few years. I joined via acquisition. I was the CTO of an AI company TR acquired a few years back and have been with the company since then. I think a lot of people know Thomson Reuters from the news business. The obviously that's the most public facing part of the business, but from a revenue. Perspective and a technology perspective, it's really, I would say, a relatively small percentage of what we do. You know, we're one of the top two or three software providers in the world in the legal industry, in the tax industry, compliance, audit and risk.

• 2:35:09Speaker 07

  So we really cover, I would say, a pretty broad expanse of the information services industry. Um, for a lot of years, we were really seen as a, as a content provider or an information provider within these businesses. But uh, software and in particular like search has been sort of a foundational piece of the technology that has kind of underpinned delivering that information to customers. Again, across, across the sectors, legal, tax, compliance, et cetera.

• 2:35:41John Coogan?

  Okay. So walk me through uh, of those verticals, which one is seeing the most acceleration from the current suite of AI tools? Which ones uh, kind of maybe next up at bat and not really, uh, the models aren't really having as much impact as you expected so far. But where are we getting the most leverage in AI?

• 2:36:02Speaker 07

  Yeah, it's a great question. You know, if you look at all of those industries, you wouldn't necessarily look at anyone and immediately say they are uh, particularly eager to adopt technology or aggressive in that sense. But you know, for the last two, two and a half years, the legal industry has been on fire and I'm sure you guys have talked about it. There's a ton of capital coming into that, to the legal tech industry in general. Um, but really the customers too have been extremely hungry and eager to use this technology and it's having profound impact on uh, the way those professionals think about uh, doing their work and operating their businesses and underlying businesses, business models themselves.

• 2:36:47Speaker 07

  I think uh, you're starting to see more um, more progress being made in industries like tax though. I think sort of the quantitative capabilities of the models kind of lagged the, the language capabilities of the models. Um, but I think that's improved, but I also think if you look at like the tax or the audit industry, that particularly workflow kinda heavy. And I, I think as agents have really taken off in the last, you know, six to nine months and the tool calling capabilities of the models have improved, uh, it's really opened the door to,

• 2:37:26Speaker 07

  you know, deliver like real true automation and productivity uh, with some of these agentic frameworks and, and reasoning based models.

• 2:37:33John Coogan?

  Yeah. Talk to me about, I mean, I imagine you're not focused on pre-training a massive model to get to the frontier. You're probably a buyer of that capability. But we're seeing a lot of deals get done. OpenAI is fine tuning models for clients above $10 million. They have, they've even cheaper offerings. Palantir is doing fine tuning work now. We just heard Thinking Machines, Miramarati is doing some fine tuning reinforcement learning for business to business applications. Um, what are you a buyer of right now? What are you focused on? Uh, building internal applications around? Where do you want the various uh, pieces of the building blocks of a great artificial intelligence enabled product to sit?

• 2:38:18Speaker 07

  Yeah, um, this might be a little bit of a long-winded answer. I would say first and foremost, when we look about, look at shipping product into the market quickly, we're certainly a buyer of these models and, and we're, we're close partners with Anthropic, OpenAI, Google and others in, in that regard. You know, when those companies are working on their next versions of models, a lot of times they come to us to, to help them evaluate and test certain capabilities of the models because the, the type of work that's done in, in the legal industry in particular is, is, is challenging. It's not a simple like rhetorical response. It's, it's

• 2:38:58Speaker 07

  uh, a deeper level of reasoning that happens in terms of the, the types of problems that we're solving. So, I would say first and foremost, like we're, we're, we're buyers of the technology. We have done, you know, fine tuning engagements. Several of these providers, super excited about the sort of R F T uh trend that may be coming with with many of them in terms of being able to apply more R L based methods to to that fine tuning. Um, but we're also, I I would say builders in some sense, and we're not, you know, pre-training models of the size of of uh G P T four or or Claude uh Sonnet, but um but we do engage in that. So about a year and a half ago, we acquired

• 2:39:43Speaker 07

  a a small company with a couple of folks from from DeepMind who have come in and really built up our deep learning expertise and deep learning training expertise within our team. You know, we've got about one and a half trillion tokens of our own proprietary content uh in in legal and tax and news. And and like I said, that's been sort of one of our defining assets for a long period of time.

• 2:40:09John Coogan?

  Yeah.

• 2:40:09Speaker 07

  Uh, as R L really becomes kind of the the main mechanism for driving further improvements in the model. Uh, we see our talent, you know, our forty five hundred domain experts across legal and and tax and otherwise, uh, really being pivotal in that process of driving performance into the model. So uh, we're certainly a buyer, but we're definitely trying to exercise uh, the data and the content that we have proprietary to us, but also the the human experts that we employ to do.

• 2:40:41John Coogan?

  Can you give me some extra color on on all the different value kind of on the table with one of these deals between a big company and a foundation model provider? Because it can seem so simple. It's like I'm I'm I'm buying an A P I. But there's actually a lot more to it. And we were talking about this in the context of uh Apple potentially partnering with Anthropic or OpenAI. And there's actually kind of a, you know, an odd relationship there where if Apple's sending a bunch of users to ChatGPT, that could improve the model. And that could make their business stronger. They could wind up servicing ads in the responses like Google does and you could. Find up with a situation where, you know, Google is paying Apple, not the other way around.

• 2:41:26John Coogan?

  You can see chat GPT eventually paying Apple for the right to be on the Siri button. But in your business, you have over a trillion tokens. That's pretty valuable data. There's a question of, you know, what's what value are you bringing to that side of the deal? And so how are you thinking about doing a great deal that sticks and is aligned economically over the long term with a foundation model provider?

• 2:41:51Speaker 07

  Yeah, it's a really, it's a really hard question to answer. And certainly you have to kind of like have some crystal ball to project out what the next two years are going to look like. And it's, it's hard to project two weeks to do that effectively.

• 2:42:04John Coogan?

  So. We have a crystal ball here. We actually have a crystal ball in the studio for this exact reason.

• 2:42:08John Coogan?

  Helps quite a bit. It helps a lot. Yeah, it's important.

• 2:42:12Speaker 07

  I'll borrow that next time I'm out there. So, you know, for us, I think, like I said, our people and our experts and the data that they create. Ultimately, I think is is sort of core to our identity and core to what we believe is valuable to us. And we try to really hold on to that and extract as much value from it into our IP as we can. I think where where there's mutual benefit, like I said before, is we provide a lot of insight and direction to these foundation model providers in terms of like what the models are failing at. Sort of what kind of capabilities, you know, they have these public benchmarks that say, you know, every week one model is better than the other.

• 2:42:56Speaker 07

  But they don't really represent the real world. And in particular, they don't represent the real world of like how professionals do work on a day to day basis. And we spend a tremendous amount of time building real world evaluations into those kinds of things. And not only that, but we spend a tremendous amount of time and energy grading and evaluating those on like real world rubrics for how a lawyer would interpret this. So it's not like it's a right or wrong answer. It's, is it helpful? Is it harmful in some way to a lawyer? These are types of things that like create a require a tremendous amount of just domain understanding to do well. And so that insight is super valuable to the foundation model providers to understand

• 2:43:40Speaker 07

  how they need to adjust their data sets and it benefits us on the flip side. Because we get more performant models out the backend that are that are that are suited for our tasks.

• 2:43:52Jordi Hays?

  How much time are you guys spending just on preventing hallucinations when you talk about domains like law and tax? You know, it's not uncommon for a lawyer or a tax attorney to hallucinate themselves, put, you know, put the wrong number somewhere, you know, have the right, but, but usually there's, you know, hopefully checks and balances in terms of someone else reviewing it, the client reviewing it, making sure that it's getting to the right place. But that feels like the number, one of the bigger issues, kind of holding back LLMs from, you know, unlocking the full value. So I imagine it's a big focus for you guys, but, but what are your thoughts?

• 2:44:31Speaker 07

  Yeah, I mean, all, all the time. I mean, I think that that's one of the core things that we do. You know, and you're right that hallucinations existed before AI was involved here and they exist now and they, no matter how good these models will get, they will exist in the future. I think there's, there's some element of like, um, uh, that, that will be the fact. I mean, foundationally, the way the models operate, like it is a propensity and it can happen. Uh, so we spend a lot of time trying to build guardrails, trying to build, uh, methodologies to, to prevent that or at least mitigate it in, in as, as many ways as we can.

• 2:45:13Speaker 07

  Uh, I would say this is where though, the, the UX of the applications really becomes like more and more critical, like creating the environment where a lawyer like knows what they need to validate, knows how to do that validation, uh, and can do it quickly and efficiently so that they're still saving time in whatever they're doing, I think is a critical part of the, the design of the applications and how they operate. And as much time as we spend on the science side, trying to build algorithms that prevent that, we spend just as much time on the design side, trying to make sure we build experiences that allow lawyers to, to build that, that confidence and trust that, that they need.

• 2:45:54John Coogan?

  Very cool. Well, thank you so much for stopping by. We'll have to have you back when there's more news from your world. And we hope you have a great day and have a

• 2:46:01Jordi Hays?

  Thank you for joining.

• 2:46:02John Coogan?

  Happy July 4th, too.

• 2:46:03Jordi Hays?

  Yeah.

• 2:46:04John Coogan?

  Thanks.

• 2:46:04Jordi Hays?

  Appreciate the

• 2:46:04John Coogan?

  We'll talk to you soon.

• 2:46:05Jordi Hays?

  Cheers.

• 2:46:06John Coogan?

  Jordy, how did you sleep last night? I think you might have me beat. I was a little rougher. I got an 81. But how did you do? Go to 8sleeve.com/tbpn. Get a Pod 5.

• 2:46:19Jordi Hays?

  Actually unbelievable.

• 2:46:21John Coogan?

  Did I beat you? Did I beat you? Play the sound effect. You know, you know the reward I got. 81. What'd you get? 80?

• 2:46:28Jordi Hays?

  I'm not gonna believe it. 52.

• 2:46:30John Coogan?

  52? Oh my God. Wow.

• 2:46:33Jordi Hays?

  I'm, I said, I said-

• 2:46:35John Coogan?

  For what it's worth, you have put on a fantastic performance this show. I would have guessed 99. I thought you were locked in. I think you've been, I think you've done fantastically this show.

• 2:46:44Jordi Hays?

  I, I like need to hire a new head coach. I'm gonna like have a call with Matt.

• 2:46:48John Coogan?

  Well, we gotta have Brian Johnson back on the show. He, he says he's down to come in the studio. He can give us a coach. We'll bring Andrew Huberman back, too. He was, Andrew Huberman was saying there's a drug that can help you sleep better, something like that.

• 2:46:59Jordi Hays?

  I might need to get on PEDs to actually beat you.

• 2:47:02John Coogan?

  But then we're gonna have the drug test because if you're, if you're cheating and I'm, and I'm natty sleeping, this is not gonna fly.

• 2:47:08Jordi Hays?

  We sleep, we focus on our sleep to make the show better.

• 2:47:11John Coogan?

  We do.

• 2:47:11Jordi Hays?

  We should be able to do any type of-

• 2:47:13John Coogan?

  And there's no better, there's no better place to sleep than a Wander if you're on vacation. Find your happy place. Book a Wander with inspiring views, hotel, hotel great amenities, dreamy beds, top tier cleaning, and 24/7 concierge service. It's a vacation home, but better.

• 2:47:27Jordi Hays?

  We are gonna be launching a video of us in a Wander.

• 2:47:29John Coogan?

  Get ready.

• 2:47:30Jordi Hays?

  Get ready for that. I can't wait.

• 2:47:32John Coogan?

  Get ready. We have our next guest coming into the studio. I'm gonna let you take the intro.

• 2:47:37Jordi Hays?

  Mackenzie coming in from Ambrook, announcing some news. What's going on? Welcome to the studio.

• 2:47:43Speaker 08

  Hey, thanks so much for having me.

• 2:47:46Jordi Hays?

  Quick intro on yourself and the company, and then let's get into the news.

• 2:47:50Speaker 08

  Okay, sweet. So I'm Mackenzie. I'm the CEO, one of the co-founders of Ambrook. Our mission is to help American family-run businesses become more profitable and resilient. And yeah, the way that we do that is we're starting in agriculture, so building out financial management software, so accounting, like the full bundle. So accounting, payments, banking, cards for America's farmers and ranchers.

• 2:48:17Jordi Hays?

  How did you land on this idea? Where did it, where did it all start?

• 2:48:22Speaker 08

  Yeah, it was a pretty winding path, but we actually started during the pandemic helping a lot of producers try to get access to working capital. And if you talk to a lot of producers about their problems and sort of what they think software can help with, it almost always has to do with the all the way up the Masas hierarchy, so getting access to capital to take more risk. But the more that we dug into it, we helped a couple thousand producers access a couple billion during the pandemic. But when you really dig into it, it's just kind of, it kind of gets down to like accounting and financial record keeping, like it's just accounting all the way down.

• 2:48:59Jordi Hays?

  Non-existent was one of the issues you're like trying to underwrite a business, but they're like, well, I have this piece of paper and I have this piece of paper and maybe they have a quick fix account.

• 2:49:11Speaker 08

  Yeah, it's actually, it's a huge range, like you can imagine. But a lot of, you know, you have farmers that are running multimillion dollar businesses on pennant paper. And of course you have folks who are also using, you know, standard F and B accounting software too. But a real, the real issue is just that farming is actually so complicated. Like, you know, I don't know if you guys have ever been on a dairy or how to do, or how to do F and B for dairy.

• 2:49:38John Coogan?

  I don't know if you guys have ever farmed.

• 2:49:40Jordi Hays?

  Not a lot of, content farming.

• 2:49:42John Coogan?

  Content farming.

• 2:49:43Jordi Hays?

  No, I grew up in the country, in wine country, so I had some exposure. I also have some portfolio companies that have some end farms as customers. So I feel like I've had some exposure, but certainly not an expert. But from my understanding, I think the challenge is, one, you're actually on a farm and historically some farm, you know, maybe, I'm sure there's a lot of like Starlink adoption, which maybe is a catalyst. But at the same time, you're not at a desktop computer, so mobile, the explosion of mobile helped in farming because you could be updating a database or even sending an email. But all that is like relatively new and I don't think the like big accounting software

• 2:50:27Jordi Hays?

  providers of the world were necessarily like. Actually on the ground, talking with farmers, being like, what software do you want to run your business?

• 2:50:35Speaker 08

  Totally. Yeah, we, we ended up, so a lot of accounting and FPNA software is built for, for like office workers. So it's built as if they assume that you're going to be in an office, you know, eight hours a day. And we actually ended up flipping that very early on and building workflows that were built for folks who spend more time in the field than the office. And so from the very beginning, we had like cross-platform, across mobile and, and desktop, like sort of web-based. But over 50% of our users use the mobile app as their primary device to do a pretty complex bookkeeping, accounting, payments, receipt management and, you know, understanding their, their analytics and reports.

• 2:51:20Speaker 08

  And, and I think that speaks to kind of what you were talking about there.

• 2:51:25John Coogan?

  How consolidated is the industry? I feel like there's this narrative of like, private equity has rolled up every farm and there's like a few mega farms and the certain like billionaires own all the farmland in America. But then at the same time, it sounds, it seems like there's still, like, I personally know folks who have family farms that are still in this like single-digit million, maybe tens of millions of dollars business.

• 2:51:45Speaker 08

  Yeah, totally.

• 2:51:46John Coogan?

  Definitely SMB.

• 2:51:47Speaker 08

  There's a little under 2 million farms in the US and only, only, only something like 12 to 16,000 of them do more than 5 million a year.

• 2:51:57John Coogan?

  It's very long tail. Yeah, okay.

• 2:51:59Speaker 08

  So super long tail. Yeah.

• 2:52:01John Coogan?

  Yeah. So I mean, yeah, that's the market opportunity for you.

• 2:52:03Jordi Hays?

  Talk, talk about the, the new financing you guys announced today and maybe what was the inflection point that you, that, that made this round kind of possible?

• 2:52:14Speaker 08

  Yeah, totally. So we just announced 26.1 million Series A.

• 2:52:23Jordi Hays?

  Who's it from?

• 2:52:24Speaker 08

  Uh, so it's led by Josh at Thrive and Dylan

• 2:52:30John Coogan?

  Congratulations. He's on a tear today.

• 2:52:32Jordi Hays?

  Our guys.

• 2:52:33John Coogan?

  He got a trade deal done.

• 2:52:34Jordi Hays?

  Yeah.

• 2:52:35John Coogan?

  He got a new deal.

• 2:52:35Jordi Hays?

  It's been a busy, busy day for

• 2:52:37John Coogan?

  Busy day for Thrive?

• 2:52:38Jordi Hays?

  All three of you, so.

• 2:52:39Speaker 08

  Yeah, busy day for Dylan too.

• 2:52:41Jordi Hays?

  Yeah, I don't even think you caught this, but they released S1 just like an hour ago.

• 2:52:45John Coogan?

  Oh, yeah, that's right, yeah.

• 2:52:48Jordi Hays?

  More breaking news. But anyways, back to Ambrook.

• 2:52:50Speaker 08

  No, yeah, um, no, it was super, uh, yeah, I just, I, so the inflection, the inflection we brought was that we just thought, you know, I think once we realized that we actually did need to, because I mentioned earlier that we at first were just trying to solve this paperwork problem, uh, with getting access to working capital. And once we realized we actually had to just rebuild QuickBooks from the ground up, but that is not, that is a long build.

• 2:53:14Jordi Hays?

  Non-trivial.

• 2:53:15Speaker 08

  So, non-trivial, uh, and so we ended up sitting with a group of pilot customers, a couple dozen farms across the US for about two and a half years before we ended up releasing it, uh, and actually starting to market it more to the public. And so it wasn't until last year that we, uh, that we, um, launched and early last year, and that, that growth basically catalyzed, uh, catalyzed this round, so.

• 2:53:42Jordi Hays?

  That's awesome. And, and will, is the goal for working capital to still be a core part of the business in the long run, but you just had to solve the underlying kind of ledger first?

• 2:53:51Speaker 08

  Yeah, totally. And actually, I was, I was, what pushed me to this decision too, was just, I ended up talking to a lot of these ag, big ag tech players, uh, that, a lot of the executives there that were, uh, doing a lot of ag financing. And I asked them whether or not they could standardize it by pulling on QuickBooks, and they just said it was a garbage, garbage in, garbage out, um, problem. And so they couldn't even, like, they weren't, they themselves were going in and doing pretty specialized underwriting, uh, that was one off basically per operation. I figured if we were gonna have any shot at getting A lot of these folks are customers access to not just commoditized financing because a lot of these,

• 2:54:33Speaker 08

  a lot of ag bankers actually drive to the farm to put together.

• 2:54:37Jordi Hays?

  Boots on the ground. Boots, we need boots on the ground.

• 2:54:40Speaker 08

  Yeah, which is, I mean, the face-to-face relationships are really important, but what that also, what the cost is that it means that more capital can't flow into this ecosystem, right? And it's really a lot harder to do really interesting niche financing as well if you don't have that level of standardization. And so a lot of what Amber has been focused on is first just solving producers' problems. So making it easier to file taxes, making it easier to manage receipts. But now what we're starting to do is a lot of our producers, for example, are for the first time, understanding their managerial costs in real time and able to make a decision like one of our producers, you know, realized that actually replacement heifers was a much more profitable enterprise than his hay enterprise.

• 2:55:22Speaker 08

  And being able to make those decisions in real time and either, you know, because hay equipment is pretty expensive. And so he basically, he needed to increase the amount of income that was flowing through the hay enterprise to offset the costs or essentially, you know, stop growing his own hay and instead buy it. And those are the types of decisions that actually in real time affect profitability in the long run and build a more resilient operation. And that's just not something that, again, is, you know, farms are pretty complex. It's one of the only industries where oftentimes for manufacturing, you're usually assembling things, actually with agriculture disassembling. So like, what are the cogs on that?

• 2:56:01Jordi Hays?

  Yeah, it's exciting because to me, it's like you can level the playing field. And like, if you're a farm and you don't have access to capital in the way that these big, you know, sort of, you know, mega corporations have like really efficiently run businesses, plenty of access to capital because they're running sophisticated financial operations. It's just so much harder to compete. And with a business like farming where I think a lot of, you know, there's a bunch of different subcategories, but so much of the revenue comes in waves, seasonally, based on harvests and things like that. And so it's, if you're getting paid a couple of times a year and you can't really have consistent access to capital,

• 2:56:42Jordi Hays?

  it's like very challenging to actually run a business and stay in business and not be forced to just sell your land or do something else. So.

• 2:56:50Speaker 08

  Yeah, totally. There's, I mean, and there's a huge, the, the, the big trend that everyone talks about ag is just the generational transition, right? Seventy percent of land is supposed to change hands in the next fifteen, you know, ten, fifteen years. The average age of a farmer in the United States is fifty-seven, fifty-eight, only increasing, right? And so a lot of these operations are looking at generational transitions. And there's a knowledge gap there as well, because if everything is in, you know, if everyone's in someone's head about how all the finances work and how the operation runs, right? Like, that's fine, but what happens when, you know, what happens when you need to pass on to the next generation? Uh, and so a lot of what we think about is democratizing access to that knowledge. Um, democratizing access to capital, to knowledge, right?

• 2:57:35Speaker 08

  I think this is also our thesis on AI, which is AI should actually be the great, you know, it should be actually the, like, the, um, democratizing wave that the computing revolution promised, but ended up just actually hollowing out the middle class. I think you're actually seeing that come back in a real way, where you're able to tap in, you know, folks who don't necessarily have, you know, specialized skill sets or like have a, you know, are a CPA or something can actually understand more about their books in real time. They don't necessarily have that, yeah, background.

• 2:58:07Jordi Hays?

  You can get at least access to the intelligence of the average McKinsey associate, but for, you know, the cost of Amber, you know, you don't, you don't have to go hire McKinsey. Yeah, that's great.

• 2:58:18Speaker 08

  Yeah.

• 2:58:19Jordi Hays?

  Awesome. Well, super exciting. Thanks for coming on the show and come back on when you have news. Yeah.

• 2:58:24Speaker 08

  Yeah.

• 2:58:24Jordi Hays?

  Congratulations.

• 2:58:25Speaker 08

  Thank you.

• 2:58:25Jordi Hays?

  We'll talk to you soon. Awesome. The, uh, breaking news, of course, is that Figma has filed, publicly filed their S1 with the SEC today. What's this on the printer cam? Oh, is the printer? The printer's going. It's going? Okay. They have applied to list on the... Oh, don't, don't, don't, don't. There we go. Boom. Boom. They have applied to list on the New York Stock Exchange under the symbol FIG. Love it. It's got a great ring to it. That's a great ticker. FIG. Congratulations. The New York Stock Exchange, one of the best stock exchanges, if you ask me. Preliminary.

• 2:59:03Jordi Hays?

  I said, I said gone. Uh, John, I, I called you gone. Gone. John, gone. Gone. Um, anyways, the other interesting data point, Arfa Rock called this out. There's seventy million held in Bitcoin ETFs. On the balance sheet with board approval for another 30 million BTC purchase via USDC.

• 2:59:24John Coogan?

  Whoa Dylan.

• 2:59:25Jordi Hays?

  A little bit of a BTC treasury action going on.

• 2:59:28John Coogan?

  That's wild.

• 2:59:29Jordi Hays?

  What else?

• 2:59:30John Coogan?

  I would not have expected that.

• 2:59:31Jordi Hays?

  Also, Bill McDermott, who was formerly at Xerox, transformed SAP and is now leading ServiceNow, is joining Figma's board of directors.

• 2:59:44John Coogan?

  Congratulations.

• 2:59:45Jordi Hays?

  Dylan says, "Bill is a legend. In addition to his wisdom, I especially appreciate his humility and authenticity." So, great addition to Figma's board and...

• 2:59:55John Coogan?

  Well, you're heading to the New York Stock Exchange.

• 2:59:56Jordi Hays?

  We'll have to have somebody on.

• 2:59:57John Coogan?

  You gotta get a watch on Bezel. Go to getbezel.com. Your Bezel Cartier is available now to source you any watch on the planet. Seriously, any watch. Yes, this is very good news. Should we run through some timeline? Get out of here?

• 3:00:07Jordi Hays?

  What do you think? Some timeline.

• 3:00:09John Coogan?

  We got another trade deal, another massive trade deal. Jeff Berkovici is joining The Wall Street Journal. Starting July 28th, he'll be heading up Wall Street Journal's San Francisco team as deputy tech and media editor. Absolutely massive news. Congratulations to Jeff on the trade deal. We got another trade deal that we posted on the timeline. Samay is moving to Thrive Holdings to build exceptional businesses designed to compound over many decades.

• 3:00:37Jordi Hays?

  Massive signing from Thrive.

• 3:00:39John Coogan?

  Massive signing.

• 3:00:40Jordi Hays?

  Our friends over at Thrive. I mean, we're hearing the rumors.

• 3:00:43John Coogan?

  Maxed out contract.

• 3:00:43Jordi Hays?

  Maxed out, probably four years.

• 3:00:45John Coogan?

  Yep.

• 3:00:45Jordi Hays?

  Guessing a one-year cliff, but we'll wait for more details. A veteran of Ramp, an absolute dog. Congratulations, Samay.

• 3:00:53John Coogan?

  And in other news, Public, our sponsor, has the IRA triple play here. 1% match, plus 1% plant match, plus 1% match. That's 3%. So, go check it out at public.com.

• 3:01:05Jordi Hays?

  The absolute dogs over at Public. Do it again.

• 3:01:08John Coogan?

  Yes.

• 3:01:10Jordi Hays?

  Will Menides has a new law, new law alert. We got a new law.

• 3:01:14John Coogan?

  Oh, he's coining.

• 3:01:16Jordi Hays?

  He's coining.

• 3:01:17John Coogan?

  Citadel's law, any industry with sufficiently high stakes will end up mirroring the culture of hedge funds, massive cash comp for top performers, bid away dynamics where entire teams walk together, extreme litigation of non-competes, hard-to-work 24/7 culture, short 10 years. We are at most six months away from PE-style midnight recruiting coming to AI, at most 12 months away from undergraduates pre-interviewing for the job they want after a two-year stint in a frontier lab because they even start. There's a

• 3:01:49Jordi Hays?

  Will's just rambling now.

• 3:01:51John Coogan?

  Hawaii sagaponic pair trade here. It's fun to be aghast when Bally Asney or whoever pays 100 million to bring some PM, an unknown quantity of their loyalists that's portfolio manager, not product manager.

• 3:02:05Jordi Hays?

  Yeah, my favorite is when portfolio managers have their

• 3:02:07John Coogan?

  Their squad?

• 3:02:08Jordi Hays?

  No, no, no. On the LinkedIn gap where they'll add like, "I'm gardening."

• 3:02:13John Coogan?

  Gardening.

• 3:02:14Jordi Hays?

  It's like gardening for six months.

• 3:02:15John Coogan?

  Yeah, because they legally couldn't go work at another hedge fund. After a six-month cooldown, of course, over. But this is actually much purer expression of the kind of thing that is being attempted in the Wong-FB Nikita-Z deal, but this is actually much purer expression. This, at the margin, I think makes the capital environment for funding independent big AI things much worse. Not worth underwriting a team if you know they can do R&D on your dollar and then walk. In the same way, my sense is fund-staking terms got worse, not better, post-pod shops. He's getting in the weeds there, but it's a fun post.

• 3:02:52Jordi Hays?

  Deep cut, but

• 3:02:53John Coogan?

  Yeah, but this is the long-term impact of the AI tally wars.

• 3:02:56Jordi Hays?

  Yeah, I do think it's accurate to say that, you know, a lot of people over the last 24 hours have been saying, "Oh, nerds are being treated like athletes." I would just say this is tech, this is AI researchers being treated like PMs in the hedge fund world.

• 3:03:13John Coogan?

  Yep, totally. And the last piece of breaking news, I think you mentioned this briefly yesterday, but Andrew Zsuzsas is back in the mix to acquire TikTok, joining Oracle and Blackstone in talks to buy the United States business. It'd be fantastic.

• 3:03:27Jordi Hays?

  I would love to see that.

• 3:03:29John Coogan?

  Be great.

• 3:03:30Jordi Hays?

  Well, would be absolutely fantastic.

• 3:03:32John Coogan?

  End of the show, folks. Please leave us five star review on Apple Podcasts and Spotify, and stay tuned for tomorrow's show.

• 3:03:39Jordi Hays?

  If you leave a review on Apple Podcasts, we will read it on the show. You can put anything you want in there. You can put an ad for your business or your venture fund.

• 3:03:47John Coogan?

  We'll read it on the show. Have a great day.

• 3:03:49Jordi Hays?

  Have a great afternoon. We'll see you tomorrow.

• 3:03:51John Coogan?

  See you tomorrow.