OpenAI Prepares ChatGPT for Ad Driven Era, The AI Paradigm Shift | Keith Rabois, Alfred Lin, Keith Sakata, M.D., Talia Goldberg, Dave Girouard, Kylan Gibbs, Sam Jones, Zach Pogrob

(01:19) - Timeline in Turmoil (09:43) - OpenAI Prepares ChatGPT for Ad Driven Era (32:49) - The AI Paradigm Shift (36:29) - Keith Rabois, an American technology executive and investor, has held significant roles at PayPal, LinkedIn, and Square, and co-founded Opendoor. In the conversation, he discusses the competitive threat OpenAI's ChatGPT poses to Google's search business, emphasizing that consumers are shifting from traditional searches to AI-driven prompts, which could undermine Google's advertising-based revenue model. He also critiques Opendoor's current leadership, advocating for a new CEO to drive innovation and reduce costs through AI integration, aiming to transform the company into a $50 to $100 billion enterprise. (58:22) - TBPN Metis List Update (01:25:20) - Alfred Lin, a partner at Sequoia Capital, focuses on early-stage investments across various industries, including consumer marketplaces, fintech, robotics, and healthcare. In the conversation, he discusses Sequoia's commitment to partnering with daring founders from the earliest stages, emphasizing the firm's generalist approach to investing beyond just AI. Lin also highlights the importance of work-life integration, advocating for balancing professional responsibilities with personal priorities to maintain long-term success. (02:05:34) - Dr. Keith Sakata, a psychiatrist at UCSF, focuses on the intersection of mental health and technology, advising startups on developing products that enhance well-being. He discusses the rapid evolution of AI chatbots, expressing concern over their potential to exacerbate mental health issues by reinforcing users' delusions and contributing to hospitalizations. Dr. Sakata emphasizes the importance of integrating safety measures and human oversight into AI applications to prevent adverse psychological effects. (02:23:50) - Talia Goldberg, a partner at Bessemer Venture Partners, has been with the firm for over a decade, focusing on investments in companies like Perplexity, DeepL, and ServiceTitan. She discusses the rapid growth of AI companies, noting that top performers are reaching $100 million in annual recurring revenue in about 1.5 years, compared to six to seven years for previous cloud companies. Goldberg also highlights the evolving role of browsers as dominant interfaces for AI, emphasizing the importance of context in enhancing user experiences. (02:38:04) - Dave Girouard, co-founder and CEO of Upstart, an AI-driven lending platform, discusses how Upstart leverages artificial intelligence and machine learning to enhance consumer lending by connecting borrowers with various financial institutions. He highlights the company's focus on applying AI to improve credit origination and servicing, aiming for a seamless, efficient lending process that benefits both lenders and borrowers. Girouard also addresses the evolving role of AI in financial services, emphasizing the importance of integrating new technologies to maintain a competitive edge in the industry. (02:49:24) - Kylan Gibbs, CEO and Co-Founder of Inworld AI, has a background in AI research and product development from DeepMind and Bain & Company. He discusses Inworld's mission to enhance consumer AI adoption by creating AI-powered virtual characters for immersive applications, highlighting collaborations with companies like Nvidia, Xbox, Niantic, and Disney. Gibbs emphasizes the potential of AI to transform gaming experiences by enabling dynamic, interactive non-player characters (NPCs) and expanding into broader consumer applications. (02:57:29) - Sam Jones, co-founder and CEO of Method Security, discusses the critical role of scalable autonomous systems in cybersecurity, emphasizing the development of both offensive and defensive products to enhance security team capabilities. He highlights the use of AI to amplify existing attack techniques, enabling rapid assessment and response to threats across vast digital landscapes. Jones also notes the differing investment approaches between commercial and government sectors in AI-driven security solutions, with the latter allocating significant resources toward offensive cyber operations. (03:03:49) - Zach Pogrob, an entrepreneur and creator with over 1.3 million Instagram followers, discusses the launch of his new app, Share Aura, designed to help users creatively share their workouts on social media. He explains that the app simplifies the process of posting fitness activities by offering customizable templates and tools, eliminating the need for manual editing. Pogrob emphasizes his strategy of leveraging his substantial social media following and network of fitness influencers to promote the app, aiming to build a strong user base before introducing monetization plans. 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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 TVP N Wednesday, August 13th, 2025. We are live from the TVP N Ultra Dome, the Temple of Technology, the Fortress of Finance, the Capital of Capital, ramp.com. Time is money. Save both. Easy to use corporate cards, bill payment and accounting and a whole lot more all in one place.

• 0:21John Coogan?

  Timelines and turmoil again, except this time it's not the Substack. It's technically called Passport. It's Ben Thompson's version of Substack. He's semi-analysis and Stratechery are both, I think, on the same technology platform, the same blogging platform. But they have slightly different takes. Obviously, they agree on a lot, but we are going to play the bull and the bear today. We have, we have some, we have some hats, some new hats in the studio. Wait, did you, was I gonna play the bear? So we're talking about Google because recently Ben Thompson came out with a post talking about how he has, he's, he's reviewed Google's technology, strategy, their AI placement, and maybe

• 1:07John Coogan?

  things are good and maybe things are going to, are going to go well for the company. Buco Capital bloke says Ben Thompson's Google bull posting is accelerating. He says, quote from their, from Ben Thompson's Sharp Tech with Andrew Sharp says, "I am becoming a Google fanboy. Let Google abuse their search monopoly as much as they want to. Humanity is benefiting. Leave Google alone."

• 1:33Jordi Hays?

  I will say it is hard to participate in this.

• 1:37John Coogan?

  Yeah, I don't think this is gonna work at all. I really, I can't see anything. This doesn't work at all.

• 1:44Jordi Hays?

  Yeah, I don't think Dylan, I don't think Dylan tested these out.

• 1:48John Coogan?

  I don't think he tested these out. I can see through the nose holes and that's it. I can only, I can see like one, one pixel.

• 1:55Jordi Hays?

  Here, let me, let me see if I can hit the gong.

• 1:57John Coogan?

  Can you hit the gong?

• 2:00John Coogan?

  Well, we had our fun with that. Did you just miss? No, I'm kidding. Okay.

• 2:06John Coogan?

  Okay, well, so, so, thank you to Restream, one livestream, 30 destinations, multi-streaming and reach your audience wherever they are. This, this stream is made possible by Restream. So, uh, basically, let me set the stage and then we'll debate it a whole bunch. So, um, but last week, Ben Thompson wrote a Strategery article titled Paradigm Shifts and the Winner's Curse. And he weaved through some of the opportunities in front of Google. And if you were to play the, the Google Bowl, it looks something like this. They have a fantastic AI chip with the TPU. This allows them to serve frontier models at low, the lowest possible cost. They're, they're, they're pretty dominant on the Pareto frontier, as we've seen. Uh, they have incredible

• 2:50John Coogan?

  cloud scale with GCP, Google Cloud Platform, and that's accelerating. We saw in the recent run of earnings, Azure did quite well, GCP did quite well, uh, AWS was kind of lagging there. So they're positioned well in terms of like building big data centers, big CapEx, big, big AI token factories. Uh, they have an amazing lab, DeepMind, which we will get into some of the DeepMind folks who made the updated version of the Metas List. Um, they are producing top-tier models, Gemini, obviously very impressive, but also VO3, completely state-of-the-art, and Genie 3 now, definitely state-of-the-art. Uh, and Ben highlights that Google is hard to analyze because Larry Page and Sergey Brin famously weren't particularly interested in business or in running a company. They just wanted

• 3:34John Coogan?

  to do cool things with computers in a college-like environment like they had at Stanford. That the company nearly 30 years later is still doing cool things with computers in a college-like environment may be maddening to analysts like Ben who want clarity and efficiency. It also may be the key to not just surviving, but winning across multiple paradigms. So Ben has become a Google fanboy by his own account, but on the other side of the argument is Dylan Patel and the crew over at Semi Analysis. In this new post on Semi Analysis, GPT-5 set the stage for ad monetization in the super app. They lay out a path to a complete, to complete chat GPT dominance in the advertising space. And they give, it's

• 4:18John Coogan?

  a great read, we'll go through some of it, but, um, you should go subscribe to both, uh, Ben Thompson's Strategery and Dylan Patel's Semi Analysis, uh, because they are truly fantastic.

• 4:29John Coogan?

  So basically, when you go to chat GPT with a highly monetizable query and they pick the funniest possible example, which is DUI lawyer near me. I love these guys.

• 4:40John Coogan?

  But apparently that is extremely monetizable because if you you need a lawyer, if you get a DUI and you're going to pay that lawyer a lot of money. And so it's not unheard of.

• 4:49Jordi Hays?

  Somebody's on the side of the road frantically in chat GPT.

• 4:52John Coogan?

  It's yeah.

• 4:53Jordi Hays?

  DUI lawyer near me.

• 4:54John Coogan?

  And if you're if you're a lawyer that represents clients in DUI cases, they're going to pay you maybe a hundred thousand dollars. You're happy to pay a thousand dollars for a referral fee to Google or to chat GPT in the future. And so basically, when you go to chat GPT with a highly monetizable query like that, like if you ask, you know, what's the what's the capital of Wisconsin? Like, it knows that we can't really make money off of that. So let's not light the GPUs on fire.

• 5:19Jordi Hays?

  This query is simply too good. I gotta find some way to make money.

• 5:22John Coogan?

  I gotta make money off of it if it's the DUI lawyer example. So the new model router in chat GPT and GPT five will be able to understand that they could potentially earn hundreds or even thousands of dollars on in referral traffic if they help you find the best person for the job. This means firing up the biggest model, the most expensive GPUs to make sure you get the best possible answer. This applies to lots of other domains, too. Companies are now building out clones. They're called reinforcement learning environments with verifiable rewards.

• 5:53Jordi Hays?

  Yep.

• 5:53John Coogan?

  Basically, a clone of DoorDash, clone of Amazon.com, a clone of other UI heavy.

• 5:58Jordi Hays?

  Shopping experiences.

• 5:58John Coogan?

  Shopping experiences. Exactly. And then the and then the companies can go RL on top of those environments, those virtual environments.

• 6:07Jordi Hays?

  To get really good at buying stuff.

• 6:09John Coogan?

  Learn how to use the real DoorDash, learn how to use the real, the real Amazon.com. And and and.

• 6:14Jordi Hays?

  Learn how to check the box that says I'm not a robot and select the bicycle.

• 6:19John Coogan?

  Literally, yes. Literally, literally, yes. I mean, that was what that was what the semi analysis crews takeaway from GPT five was that it was not a bigger pre-training model. That was the Death Star. The Death Star was the idea that GPT five would be a bigger model or some sort of foundational change. No, they blew that up. They blew up the idea that GPT five would be a much bigger model. And instead, they focused on they RL the hell out of it, according to the semi analysis crew. And so it's highly good at very specific things. It's the spikiest intelligence we've had. So.

• 6:55John Coogan?

  Basically, they will RL on door- Amazon.com, other websites you can check out on your so that the agent can check out on your behalf. It might be expensive for an AI model to jump through all those hoops to actually order you a new pair of headphones, but it'll be worth it if there's a commission affiliate commission on the end of the line. This obviously poses a major threat to Google's search ad revenue.

• 7:17Jordi Hays?

  Don't you assume that the labs are also just training on the real applications and the real websites themselves?

• 7:23John Coogan?

  No, because every time you check out on Amazon, you're spending like 50 bucks at least, right? If you're if you're going through the flow and the flow for buying a TV.

• 7:34Jordi Hays?

  Too expensive to do the volume.

• 7:35John Coogan?

  Millions of times. Exactly. So why not just simulate the whole thing?

• 7:38Jordi Hays?

  Yeah.

• 7:39John Coogan?

  I'm sure that they are, they probably have.

• 7:41Jordi Hays?

  They do test runs.

• 7:42John Coogan?

  Of course, of course. Little, yeah, when when Sam Altman needs to go through the the Koenigsegg configurator, he's he's using that as training data.

• 7:50Jordi Hays?

  And remember, when when Sam, when when they launched Deep Research, the example that Sam gave was he was trying to buy this obscure Acura in Japan.

• 8:00John Coogan?

  An NSX.

• 8:01Jordi Hays?

  An NSX.

• 8:02John Coogan?

  Obscure to some people, not to me.

• 8:03Jordi Hays?

  And he he was like, yeah, I just use Deep Research and I found it. And people, a lot of people didn't pick up on that a ton at the time, but that was a highly monetizable Deep Research report.

• 8:18John Coogan?

  For sure, for sure. And so Ben Thompson and others have noted within weeks of ChatGPT's initial launch that there was a threat to Google. The question is how fast this shift happens? How much will Google adapt to the new paradigm? And what the economics of the consumer tech industry look like in a world where we no longer operate on top of zero marginal costs? The cost to serve the one more Google search was zero, but the cost to serve one more DUI lawyer lookup will be 50 bucks. And so semi-analysis has a bunch of good charts and graphs that we can kind of look through, and then maybe we'll we'll go back to the bull case after, but let's look through the bear case.

• 8:59John Coogan?

  So fabricated knowledge, Doug, who from semi-analysis came on the show last week, fantastic hour-long interview. Every time we grab one of these semi-analysis guys, we're like, yeah, yeah, yeah, the standard, the standard interview is an hour, don't worry about it. Like, send him an hour and then they're like.

• 9:15Jordi Hays?

  It's always so good.

• 9:16John Coogan?

  Most of these TVP interviews are 10 minutes. Like, why, why do you need an hour of my time? It's because you're gold, we love you. So fabricated knowledge. Says, so if you can't tell, I wrote the F out of this. Also, I know we're getting a lot of pushback, but the affiliate model feels inevitable. Timeline is this, Instacart adopts agentic purchase in January. Instacart CEO leaves, that's Fiji Simo, to OpenAI in May. Sam a tone shift router for for control of query. So let's pull up the videos of Sam Altman on AI ads. And I think it will crystallize a little bit of like what we mean when we mean like monetizing a free LLM, a free AI chat app.

• 9:59John Coogan?

  It doesn't necessarily mean stuffing display ads in there, just like the answer to Facebook's monetization problem was not banner ads on the in the right bar. It was in feed ads that look, if you're watching reels and you see a reels ad, it looks exactly like a reel. And in fact, the best performing ads on Instagram reels feel just like user generated content. They don't look like Super Bowl ads.

• 10:23Jordi Hays?

  They're additive.

• 10:23John Coogan?

  They're, yeah, they're additive and people often enjoy them. And so that will be, at least this is the semi-analysis argument that I sort of agree with. That will be the, the, the, like, what, what we say about ads in AI, it will be more like commissions for agentic checkout, at least, at least to start. So let's pull up the first video.

• 10:46Jordi Hays?

  Example, right now, there's a lot of people that have websites that monetize with referrals to Amazon.

• 10:52John Coogan?

  Yep.

• 10:52Jordi Hays?

  And they're frustrated because a lot of the, I mean, traffic, just like organic SEO is way down.

• 10:57John Coogan?

  Yep.

• 10:58Jordi Hays?

  And the general read here is that OpenAI will ultimately start to earn that same type of revenue that the publishers historically did.

• 11:07John Coogan?

  Yep. So there was a fireside chat at Harvard Business School with Sam Altman.

• 11:14Jordi Hays?

  Let's give it up for Harvard Business School.

• 11:15John Coogan?

  Let's give it up for Harvard Business School.

• 11:16Jordi Hays?

  The Harvard of business schools.

• 11:18John Coogan?

  That's what they've been saying, they've been saying. So he got a question from the audience about ad monetization and we'll hear how Sam Altman responded to it.

• 11:26Speaker 02

  Think although fair, it could be a barrier for early stage entrepreneurs or startups or even small businesses. Given this context, do you envision OpenAI exploring alternative monetization strategy that could include like free, free API access, perhaps supported by advertising or other methods to foster innovation in the future?

• 11:49Speaker 03

  I will disclose, just as like a personal bias, that I hate ads. Um, I think, I think ads were important.

• 11:58John Coogan?

  We love ads.

• 11:59Speaker 03

  To give the early internet business model. But I think they, they do sort of somewhat fundamentally misalign a user's incentives with the company providing the service.

• 12:11Speaker 03

  Totally against them. I'm not saying open ad never consider ads. But I don't like them in general. And I think that, uh, ads plus AI is sort of uniquely unsettling to me. You know, when I, when I think of like GPT writing me a response, if I had to go figure out, you know, exactly how much was who paying here to influence what I'm being shown. I don't think I would like that. And as like things go on, I think I would like that even less. So there's something I really like about the simplicity of our model, which is we make great AI and you pay us for it. And it's like, we're just trying to do the best we can for you. And then, given that that has some inherent lack of access and inequality,

• 12:56Speaker 03

  we commit as a company to use a lot of what basically the rich people pay to give free access to the poor people or the poorer people. You see us do that today with the ChatGPT free tier. Um, you'll see us do a lot more to make the free tier much better over time. And I'm interested in figuring out how we bring the equivalent concept to the API. Um, but I,

• 13:22Speaker 03

  I kind of think of ads as like a last resort for us for a business model. Um, I would do it if it meant that was the.

• 13:28John Coogan?

  That's where he says, he says, I kind of think of ads as a last resort of, as a business model. But recently he dropped a new podcast. This was from, I think a month ago, uh, and it's from the OpenAI podcast. So you have to imagine that they, that they, that the, the run of show and the talking points in here are very carefully selected to, you know, move the narrative forward and kind of educate the community on where the company is going. And so, and so we'll pull up Sam Altman's interview on AGI GPT five. And what's next from the OpenAI podcast?

• 14:03Speaker 04

  So that brings up the other question from people who are using this or skeptical is that OpenAI now has access to this data. And there's the concern, one was about training, which OpenAI has been very clear about when or when not it's training. You have the option to turn that off. The other thing is like advertising, things like that. What's OpenAI's approach towards that? How are you going to handle that responsibility?

• 14:25Speaker 03

  We haven't done any advertising product yet. Um, I kind of, I mean, I'm not totally against it.

• 14:32John Coogan?

  Totally against it. Yeah.

• 14:34Speaker 03

  Areas where I like ads, like ads on Instagram, kind of cool.

• 14:39John Coogan?

  Yes, ads on Instagram, very cool. Let's go.

• 14:41Speaker 03

  I am like, I think it'd be very hard to, it would take a lot of care to get right.

• 14:47John Coogan?

  I have faith. I think you can do it.

• 14:49Speaker 03

  People have a very high degree of trust in ChatGPT, which is interesting because like AI host nates, it should be the tech that you don't trust that much.

• 14:56Speaker 04

  My friends are ready to, so I trust them.

• 14:58Speaker 03

  People really do. Um, but I think part of that is if you compare us to social media or, you know, web search or something, where you can kind of tell that you are

• 15:12Speaker 03

  being monetized and the company is trying to like

• 15:14John Coogan?

  Yeah, you can see.

• 15:16Speaker 03

  Good, no doubt, but also

• 15:18John Coogan?

  Yeah, I mean, you can see this is the monetized block. This is the non-monetized block.

• 15:23Speaker 03

  Whatever, like, you know, how much?

• 15:27Speaker 03

  How much do you believe that like you're getting the thing that that company actually thinks is the best content for you versus something that's also trying to like interact with the ads? I, I think there's like, there's a psychological thing there. So for example, I think if we started modifying the output, like the stream that comes back from the LLM in exchange for who is paying us more, that would feel really bad.

• 15:53John Coogan?

  Yeah, this is a great solution. Give you the actual answer you want, but hey, these are the best headphones for you. But if you want me to buy them, I'm going to have to go cook as an agent. I'm doing the work and I'm going to take a cut of that. That's, that's amazing. I'm so down for that.

• 16:08Jordi Hays?

  The agent's like, I'm getting paid either way.

• 16:11John Coogan?

  Yeah, exactly. And I could say, okay, which headphones do I want? Do I want the Sonys? Or do I want the, or do I want the Apple AirPod Maxes? And if I decide the Apple ones, it goes, checks out, it uses some coupon code to get some.

• 16:25Jordi Hays?

  Yeah, I mean, comparing comparing this to the other ways that people discover products and services.

• 16:30John Coogan?

  Yeah.

• 16:31Jordi Hays?

  If somebody searches best luxury hotel in Hawaii, they're going to get ads against that. And then they're going to get organic rankings that aren't necessarily the truth, right? Because the truth is for something like best luxury hotel in Hawaii is very subjective.

• 16:48John Coogan?

  Yeah.

• 16:49Jordi Hays?

  Then they might go and try to get recommendations from an influencer.

• 16:53John Coogan?

  Yep.

• 16:54Jordi Hays?

  And hopefully the influencer is disclosed.

• 16:57John Coogan?

  Yes.

• 16:57Jordi Hays?

  Whether or not they're being compensated by the advertiser.

• 17:00John Coogan?

  Yeah.

• 17:00Jordi Hays?

  And.

• 17:01John Coogan?

  So if I were to ask you, as an influencer, like what design software would you recommend? Like, what would you say, just honestly?

• 17:09Jordi Hays?

  Figma.com.

• 17:11John Coogan?

  Think bigger, build faster. Figma helps design and development teams build great products together. This is a paid advertisement.

• 17:16Jordi Hays?

  But yeah, disclosure is super important.

• 17:18John Coogan?

  Exactly.

• 17:18Jordi Hays?

  And if, and if the influencer is saying like, oh yeah, I love this hotel. But that hotel is giving them like, you know, two weeks free a year. Then like, that's not, that's not a, a super ethical endorsement.

• 17:32John Coogan?

  Totally. Yeah, it needs to be disclosed. And then also, also the, the beauty of the LLM is that, is that like, the, like, the, the recommendations are going to be able to be tailored. So best luxury hotel, well, if you're, if you really want a certain type of pillow or you really want, you know, a, a pool in your unit, or you want it to be wheelchair accessible, or you want, you know, high ceilings, or you want, you know, beachfront access. Like, there's a million different parameters that could go into that.

• 18:00Jordi Hays?

  And the thing, the thing that ChatGPT needs to.

• 18:02John Coogan?

  And then it could just, and then it just saves you the time at the very last step.

• 18:05Jordi Hays?

  Well, the thing that ChatGPT needs to navigate is maintaining that trust.

• 18:09John Coogan?

  Yep.

• 18:09Jordi Hays?

  Right? I trust that Instagram is going to serve me ads.

• 18:13John Coogan?

  Yep.

• 18:13Jordi Hays?

  That, that. I I trust that they're gonna try to serve me ads for things that I will wanna buy.

• 18:19John Coogan?

  Yep.

• 18:19Jordi Hays?

  Sometimes they serve me an ad, I'm like, this is, this looks garbage, I'm not gonna buy it. Other times they serve me an ad and I'm like, this looks great, you're actually, good, good call, I, I, I am interested in this product.

• 18:28John Coogan?

  Totally.

• 18:29Jordi Hays?

  And the thing is, is like, if Chat, Chat GPT has to maintain that trust, because if they recommend you a hotel, and they're like, you're gonna love this. I know, I know what you like, you're gonna love this hotel, and you go there, and you spend all this money, and you stay there, and it's, and it's terrible.

• 18:41John Coogan?

  Yep.

• 18:41Jordi Hays?

  It's the same thing if, if you go to a friend for a recommendation for a hotel, they recommend you a hotel, you show up there and it's like, this is terrible.

• 18:48John Coogan?

  Yep.

• 18:48Jordi Hays?

  Like, why did you recommend this? And if they go, oh yeah, I recommended it because I was getting like, seven percent referral fee, you're gonna be like, what are you doing? Why are you monetizing me, right? So I think like, it's a very, um, uh, it's an interesting challenge that they have, where they're gonna be directing, already directing so much economic activity, and how do you monetize that in a sustainable, ethical way?

• 19:13John Coogan?

  Yep. I, I mean, I think the router is the answer. Um, uh, OpenAI or semi-analysis called like, this release, like, the router is the release. Like, GPT five is the router, it's not a new model, it's a router on top of multiple models, and that's the value. So the router release can be now understood, can now understand the intent of the user's queries, and importantly, can decide how to respond. It only takes one additional step to decide whether the query is economically monetizable or not. Today, we will make the case for how ChatGPT's monetized free end state could look like an agentic super app for the consumer. This is only possible because of routing.

• 19:56John Coogan?

  Um, there's a very interesting chart in here.

• 20:01John Coogan?

  Where is it? It's about the various costs. So, cost per million tokens output has a really, really steep power law curve. So, O3 Pro, uh, the, the, the model that everyone's obsessed with, the one, the one that people really wanna hit as much as possible, because they feel like it gives it the most, uh, the most rigorous and thoughtful output, and I was certainly firing off O3 Pro queries constantly. So, uh, More and more free users will be able to interact with O3 Pro occasionally because they will trigger it randomly. They might not have been on the upgrade tier, but they

• 20:42John Coogan?

  actually get to experience what that's like now without having to first go and pay, which I think is cool. Over 99% of free users have yet to interact with a thinking model like O3. And for the average user, ChatGPT just got a huge upgrade. And so there's this weird, like the vibes on X with the power users were kind of like all over the place.

• 21:03Jordi Hays?

  Yeah, there's that post from John Collison.

• 21:05John Coogan?

  But for most people, we're just like, this is incredible. Everything just got better. If you weren't in love with the old model and you didn't like the upgrade, but for most people, it was just a big upgrade. So the number of-

• 21:15Jordi Hays?

  You gotta pull this up. Pull this up, guys.

• 21:17John Coogan?

  The number of free users exposed to thinking models went up 7X in the first day and the number of paying users up-

• 21:24Jordi Hays?

  John Collison, what it feels like to select O3 in the Legacy Models menu.

• 21:28John Coogan?

  Yeah, it's a good metaphor. It's definitely, it's definitely a good metaphor. It's, it's, it's, it allows you like that engagement. Yeah.

• 21:37Jordi Hays?

  This sort of army green on tan.

• 21:40John Coogan?

  So on a cost per million tokens basis, O3 Pro is $80, GPT-5 is $10, GPT-5 Mini is $2, and GPT-5 Nano is $0.40. So a huge, huge gap of 200X the spread on the cost to actually serve the user. So the, but the router is clearly a feature of the new, to the new service and can likely see improvements or changes over time. It will continuously learn on preference rates and OpenAI promises it will improve over time. They'll get a lot of feedback from, somebody said, hey, you triggered thinking I would have liked a faster answer in this case, or hey, you, you gave me the fast answer. I actually wanted you to go way deeper. This was not satisfactory. So.

• 22:25Jordi Hays?

  So, semi-analysis says, "Centralizing the control of the free user experience allows for many more future monetization paths. And this monetization path is one that has been hinted at subtly for a while. It all starts with OpenAI's decision to hire Fiji Simo as CEO of Applications in May. Let's look at her background because it's telling. Obviously, we covered this back in the day, but we'll cover it again now. So Fiji was at eBay from 2007 to 2011, but her career- Defining career was primarily at Facebook. She was vice president and head of Facebook, and she is known for having a superpower to monetize.

• 22:57John Coogan?

  Let's hear it for Fijisimo.

• 22:59Jordi Hays?

  Superpowers. She was critical in rolling out videos that autoplay, improving the Facebook feed, and monetizing mobile and gaming. And I think we should just keep the claps going. She might be one of the most qualified individuals alive to turn high-intent internet properties into ad products, and now she's at the fastest-growing internet property of the last decade that is unmonetized. It's an obvious story.

• 23:19John Coogan?

  This is the next list. Post-Metis list, we need the power ranking of monetization maxies. Yeah, Fijisimo at the top of the list.

• 23:27Jordi Hays?

  Money maxies.

• 23:29John Coogan?

  We can continue to run through this, or we can kick it over to the Metis list, whatever you want.

• 23:34Jordi Hays?

  Yeah, I mean, let's cover a little bit more. So they're covering the tone shift. We obviously had those videos.

• 23:38John Coogan?

  Yep.

• 23:39Jordi Hays?

  They say in recent interviews, Sam's tone has shifted. There's clearly a lot of thought happening about how to best monetize free users more recently. Again, this goes back to the kind of little debate we were having, the little timeline and turmoil moment with Cuban, where, again, you can't expect companies to give products that are expensive to serve away for free forever, right? And it's great that pro-tier users can help offset the costs for free-tier users, but there's very few. I mean, OpenAI, the funny thing is, they're trying to convert to a for-profit. Right now, they are nonprofits, so it makes sense they're giving this incredible product away to millions of people.

• 24:20John Coogan?

  The benefit of humanity.

• 24:21Jordi Hays?

  Yeah, just for the benefit of humanity. But eventually, eventually, you know, they're running a business.

• 24:26John Coogan?

  I do think, like, Cuban has a point with, which I steelmand, with the idea of, if it was purely based, if the entire flow of, we want people to open the app and convert to commerce immediately.

• 24:42John Coogan?

  That could result in perverse incentives and like lower quality, just general user experience. It might be a situation where that's kind of like a short term gain for long-term pain in the sense that people wind up churning if it's really, really bad.

• 25:01John Coogan?

  But I think that it is possible to have a wall in the organization between like, okay, the truth-seeking happens here and the first layer of you ask a question, we're going to give you the best possible answer for what you asked. So luxury hotel with your preferences, we're really going to, and the team is purely focused on that. And then they are separate from the monetization team that says, would you like to check out? Okay, we have a great agent that can go do that, book it. And it's similar to having a, you know, a flight, what do they call it? A travel agent that actually books it for you and then takes a cut of that. And that's a very clear value because it's actually.

• 25:40Jordi Hays?

  Yeah, and travel agents have pretty aligned model with consumers, right? They want to give you a great trip so that you come back and book more travel with them, but they end up taking a rev share in different ways from, from the hotels and various like vendors that they end up like booking the trip through.

• 25:57John Coogan?

  Yep. And I believe Google has a similar wall between like what shows up in the knowledge panels cannot be bought. So there is no amount of, you know, Google ad dollars that you can pay them to change your height if it's auto completing. Like that pulls from Wikipedia and all these data sources into their knowledge graph. You can't, there's nothing you can do to manipulate the Google knowledge graph. You can just buy keyword ads that show up in their box and you might have to scroll a while because they, sometimes they put seven ads up there, but.

• 26:29Jordi Hays?

  As an ad enthusiast, if you do a Google search and the entire screen is filled with ads, it's really.

• 26:34John Coogan?

  Fills you with joy. Yeah. Search DUI lawyers near me right now. I'm sure you'll see them. Anyway, let me tell you about Vanta. Automate compliance, manage risk, crew trust, continuously. Vanta's trust management platform takes the manual work out of your security and compliance process and replaces it with continuous automation, whether you're pursuing your first framework or managing a complex program.

• 26:52Jordi Hays?

  Should we run through Ben Thompson's?

• 26:55John Coogan?

  Yeah, we should. So semi-analysis actually quotes Ben Thompson here and talks about aggregation theory. Let's talk about agentic purchasing and compare it to the search query today. Because LLMs have a core feature that search does not, and that is scaling marginal costs. That's what we talked about with O3 Pro costing $80 per million tokens versus GPT-5 Nano costing 40 cents per million tokens. All of a sudden, it has a different economic equation. This is fundamentally different than the world search grew up in. Let's examine aggregation theory by Ben Thompson because the core feature was that most technology companies had zero marginal cost to an additional user. There were some fixed overheads for running while

• 27:36John Coogan?

  the large search engine, but the incremental cost of another query was virtually zero. Agents and LLMs kill this concept. For the first time, the more you spend, the better your result is because of chain of thought reasoning tokens, and now marginal costs exist in software again. There is somewhat direct relationship between more money, more compute, and a better answer. Nowhere is this clearer than in AI, in which you can spend variable costs to get variably better answer or outcome. And so, before the router, there was no way for a query to be distinguished, and after the router, the first low-value query, if you ask why is the sky blue, that can be routed to a GPT-5 mini-model that can answer with zero tool calls and no reasoning. This likely means serving the user is approaching

• 28:21John Coogan?

  the cost of a search query. The monetizable query, on the other hand, has a fixed cost. It would show a page ranking websites with potential AI summary at the top. This is a fixed supply response to what could be a variably hard question, but now ChatGPT free because of routing.

• 28:38Jordi Hays?

  There's some incredibly, you know, incredible OpenAI hater out there who's on Like the maxed out pro plan and just going into O three pro and saying, what is the capital of California? Give me a 60 page PDF with the answer.

• 28:56John Coogan?

  This is the hitting Grok four heavy with just like answer in one word, but think for 10 minutes. Just burning the GPUs. But yeah, I mean, the router will, will, you know, increasingly

• 29:07Jordi Hays?

  Eliminate that.

• 29:08John Coogan?

  Decide how monetizable is this query? And that's how much compute you get for it. And so GPT five can decide to allocate $50 to a query, create a plan, gather information about the DUI incident in this example, research local lawyers, consider who is likely to answer fastest, consider your budget, then contact multiple lawyers on your behalf. All of those are tool calls. All of that is expensive. It could even agentially reach out to lawyers on behalf of the free user, knowing that the conversion ratio of this query is even higher. This version of chat GPT is highly helpful, aligns with the user's query and is a valuable referral to the seller of goods and services. So there's a little bit of, you know, going into,

• 29:52John Coogan?

  how does Google respond to this? There's, there, so chat GPT is partnered with a lot of different companies in finance. They've come, they've partnered with Stripe, Visa and PayPal on the consumer side. They've partnered with Mattel, booking.com and Lowe's enterprise software.

• 30:09Jordi Hays?

  They've They have a partnership with Shopify as well.

• 30:12John Coogan?

  That's on the consumer internet side. Snapchats, Shopify, Instacart and Mercari. So if you are a Shopify merchant, you are probably happy to let people check out with your products directly in chat GPT. You don't really care if they hit your, if they hit your website. It doesn't really matter as long as they're buying your product. Your margin is probably going to be the same. And so.

• 30:35John Coogan?

  OpenAI is firmly knocking on the door of technology giants, Google and Meta and even Amazon. Previous scares about AI have been focused on search query volume not being replaced in the ad tech stack. ChatGPT can compete with dominant platforms for its place in the ecosystem. And to date, this push into purchasing is the most concrete example of OpenAI coming for advertising at large. If they were first to launch an aggressive agentic checkout solution before Meta or Google, this would be seen as huge competitive shots for both companies. A reminder that if we are talking about pure usage, only one company is growing users at a meaningful rate. It's OpenAI. And the visits year over year for OpenAI are up 135%.

• 31:20John Coogan?

  And there's this other crazy, crazy chart in here that's the, of the top 10 websites, ChatGPT is number five. And it's, and every single property is over 15 years old. So Instagram is the next youngest like website in the top 10 websites, and it's 15 years old. Then you have Google at number one, 28 years old, YouTube at 21 years old, Facebook is 22 years old.

• 31:51Jordi Hays?

  Hearing that Instagram is 15 years old.

• 31:54John Coogan?

  Crazy.

• 31:54Jordi Hays?

  Makes you feel a little bit old.

• 31:56John Coogan?

  X.com, Twitter, originally 19 years old, Reddit is 20 years old, WhatsApp is 17 years old.

• 32:03Jordi Hays?

  Guys, warning.

• 32:04John Coogan?

  Bing is 16 years old.

• 32:05Jordi Hays?

  Twitter's gonna be able to drink soon.

• 32:06John Coogan?

  Get ready.

• 32:08Jordi Hays?

  Get ready for that.

• 32:09John Coogan?

  Yeah, I mean, rebranding at age 17 is kind of on brand, you know? It was Twitter and then it had to, don't call me Twitter anymore, dad. I'm X, I'm X, just call me X.

• 32:20Jordi Hays?

  Call me X.

• 32:21John Coogan?

  Right? And so.

• 32:23Jordi Hays?

  Yeah, when companies turn 21, they should just like really, even 21st birthday, get a little wild for 24 hours and then lock in again.

• 32:32John Coogan?

  Yeah, so let's go over to Stratechery, let's go over to Ben Thompson, but first, let me tell you about graphite.dev, code review for the age of AI. Graphite helps teams on GitHub ship higher quality software faster and you can get started for free. So paradigm shifts in the winner's curse. This was posted Wednesday, August 6th on Strategery by Ben Thompson.

• 32:51Jordi Hays?

  Ben says, "It's fun and often accurate to think of tech companies in pairs. Apple and Microsoft defined the PC market. Microsoft and Intel won it. Google and Meta dominate digital advertising. Apple and Google won mobile. That, however, is not the defining pair of the smartphone era, which ran from the introduction of the iPhone in 2007 to the launch of ChatGPT in 2022. Rather, the two most important companies of the last two decades of tech were Apple and Amazon, specifically AWS. The Apple part is easy. The iPhone market created the smartphone paradigm from its user interface to its distribution channel and was richly rewarded with a bit under half of the unit market share and a bit under all of the total profit."

• 33:31John Coogan?

  All of the total profits. Isn't that a great line? It's such a good line, but it's true.

• 33:35Jordi Hays?

  A bit under. Google did well to control the rest in terms of the Android operating system and profit from it all, thanks to Google Search, but it was Search that remained their North Star. The company's primary era in that era was the few years they let the tail. Android waved the dog. Google.

• 33:50John Coogan?

  That's a, that's a typo. It should be wag the dog. Or maybe, maybe he's making a wave joke because Google had a product named Wave, but usually the phrase is you let the tail wag the dog. The dog should be in charge of the tail in the golden retriever metaphor.

• 34:06Jordi Hays?

  It wasn't just wagging, it was waving.

• 34:08John Coogan?

  Yes.

• 34:09Jordi Hays?

  The AWS part is maybe less obvious, but no less critical, and the timing is notable. Amazon created AWS in 2006, just 10 months before the iPhone unveiling, and the paradigm they created was equally critical

• 34:19John Coogan?

  Has crazy timing.

• 34:20Jordi Hays?

  to the smartphone era.

• 34:21John Coogan?

  Yep.

• 34:22Jordi Hays?

  I explained the link in 2020 as the end of the beginning, where he says, "This last point gets at why cloud and mobile, which are often thought of as two distinct paradigm shifts, are very much connected. The cloud meant applications and data could be accessed from anywhere. Mobile made the I/O layer available everywhere. The combination of the two make computing continuous."

• 34:40John Coogan?

  Instead of deliberate. Before, you had to sit down at a computer linked to an on-premise server and you could only use technology in one place at a time. And now you can be always on tapping into the cloud wherever you are. Let's hear it for the cloud and mobile. Fantastic. And so AWS was not the only public.

• 35:04Jordi Hays?

  I do remember those days as a kid. Summer, I had my email. I'd sit down. I'd send some emails as a. As a teenager and then I'd walk away from my computer, I'd go out into the world, unconnected.

• 35:18John Coogan?

  You used to have to go and turn on the Xbox to play Call of Duty. Now you can play on your phone. And you can even stream it. There's a ton of stuff. It's changed everything.

• 35:26Jordi Hays?

  AWS was not the only public cloud provider, of course. Azure and GCP were both launched in 2008, but by virtue of being first, they both-

• 35:35John Coogan?

  AWS defined the paradigm.

• 35:37Jordi Hays?

  And also were the first choice of the universe of applications that ran on smartphones and more accurately ran everywhere.

• 35:44John Coogan?

  So if Apple and AWS were the definers and thus winners of the smartphone era, then it was Microsoft and Nokia that were the losers. The reasons for their failure were myriad, but there was one common thread. Neither could shake off the overhang of having won their previous paradigm. Indeed, both failed in part because they deluded themselves into thinking that their previous domination was an advantage. For Microsoft, that previous paradigm was the PC and the Windows platform, which they thought they could just port to mobile. And so all of their mobile efforts were basically just like Windows running on a phone, kind of dumbed down. Didn't really work very well. It took Microsoft years and new CEO to realize that their mistake.

• 36:23John Coogan?

  So we will come back to this and debate Google more on this show, but we have Keith Rabois joining the stream. Welcome to the show, Keith. Good to hear from you. How you doing?

• 36:35Keith Rabois?

  Great. Pleasure to be back with you.

• 36:36John Coogan?

  Fantastic. Before we go into all the news that's shaking up the timeline, do you have a take on Google? Right now, we were diving into the fact that semi-analysis seems quite bearish on Google and is saying that OpenAI will basically steamroll them once they get into agentic commerce and checking people out.

• 36:57Jordi Hays?

  Properly monetizing the user base and all the economic activity that they're already driving.

• 37:02John Coogan?

  Yeah. And then Ben Thompson's kind of saying like, hey, it's this college campus. They have a bunch of great AI researchers, like something will come out of this. And it's just a Lindy company. It's been around for a long time. It's not going anywhere.

• 37:14Keith Rabois?

  Well, I think ChatGPT is the fastest growing consumer app of all time. And as long as that continues, Google's significantly threatened. I think normal people are substituting what used to be searches and queries into prompts. And that really does threaten Google, even if they have top tier AI talent, they've yet to productize it in a way that undermines the trend towards ChatGPT. If Google were to fuse together all the information they have about you, your Gmail, your YouTube, et cetera, and make everything personalized out of the box, that'd be interesting. We'll see if they can ship that product internally, substantively, and whether it resonates with

• 37:53Keith Rabois?

  users. But they're losing, you know, the AI battle to OpenAI, period. It also threatens the revenue. I don't think that performance-based advertising, which is the mainstream, you know, driver of Google's success, will be the way that consumers expect to be monetized in the future. I think all the AI applications are showing that consumers are willing to pay for value. And so I think direct value, direct capture from consumers, subscriptions, et cetera, might be better. And that would, you know, undermine the entire advertising business model that really has propelled Google into the stratosphere, was there's product innovation initially, engineering innovation, data innovation, but ultimately

• 38:37Keith Rabois?

  there's advertising innovation. And they had a more efficient advertising platform, and that may not be the future of the next 20 years.

• 38:43Jordi Hays?

  Yeah. Yeah. In some ways, Google's, Google's margin and how much revenue they generate for me, as somebody who throughout the year is going to make a lot of searches that, that result in a lot of purchase activity. And if I can substitute that by just paying 200 bucks a month and eliminating a lot of that, you know, ChatGPT can, can become a, probably a trillion dollar company by just eating into, eating into that and being willing to give up that, that incremental revenue that they might get from advertising.

• 39:14John Coogan?

  I just had this experience. I bought a Nintendo Switch 2. I went to ChatGPT. I fired off agent mode. I had it go around, check every website for what's in stock. It decided the target was in stock. I clicked on that, had to go into the target app and set up an account. And it was like a huge hassle. Could have just done it for me and taken a cut, but Google wasn't involved. So it's kind of a crazy time.

• 39:36Keith Rabois?

  Yeah, I mean, they also do some rough math. You can calculate Google's revenue per user, per month or per year. And then what consumers are willing to pay through ChatGPT and similar products, I think exceeds that.

• 39:49John Coogan?

  Yep. No, it makes sense. Anyway, enough on Google. Give us the high level on what's going on with Open Door.

• 39:57Keith Rabois?

  Well, I'm very excited. A bunch of retail investors led by Eric Jackson have really taken a spotlight and focused it on the potential of the company. I think for a lot of reasons, the company for the last three years has not really capitalized on its disruptive elements, its innovation, and people have sort of forgotten about it. In the public markets, attention is really important. And now there's a very strong shining spotlight on the potential of the company, which I think should be like Carvana. Carvana is a $40 billion company with in fact, more competition than Open Door has. But Open Door has not been able to frame the narrative about the innovation as well as Carvana. And I think that's going to have

• 40:41Keith Rabois?

  to change. I think substantively, the company needs better leadership, both on a story selling side and on the innovation side. I like tweeted out, you know, really with about 10 minutes of thought, ways to fix Open Door this morning. And there's this specific, specificity behind every one of those elements that I could dive in deeply. But the company's not executing on any of those things. If anything, it's taking a step backwards and partnering with these legacy real estate brokers, which makes no sense whatsoever.

• 41:12John Coogan?

  How much of the like sell off in the stock or just kind of like, you know, the like getting into the doldrums is and the trouble that Open Door has run into has been just the interest rate dynamic in the post 2022, 2023 era where we've been in this high, high interest rate environment that that abstractly has a big impact on home buying. But how direct is that on the Open Door story?

• 41:37Keith Rabois?

  It's moderately direct. So in a hot market, maybe five to six million homes transact a year and Open Door gets paid every time it transacts. So in a, in a very high interest rate environment, that number went down to four million. So four million versus six. Like that's, that's right. It's not like people stop buying and selling. It doesn't go to zero and it doesn't go to infinity. So four to six million. The problem for Open Door financially is the cost structure of the company at a G and A level, not a marginal level. G and A level is just way too expensive to make profits at four million dollars. And this was a known problem. The node postler who I work with warned the current management team, myself included,

• 42:19Keith Rabois?

  um, in two thousand and fifteen that this was going to happen. Real estate has roller coaster rides to it and you need your fixed cost base to be low enough that you don't have to transact to offset your fixed cost or burn. Unfortunately, the base was too high. And when the Fed raised interest rates like five times sequentially really fast on kind of an unprecedented way. Very few people transacted, so there wasn't enough profits to offset the fixed cost of running the business. It was a mistake. It really did cause significant strain. Arguably, you know, the entire management team made that mistake, didn't listen to the node, whatever. That's three years ago. The company's made no progress on cutting the G and A costs over the last three years.

• 43:03Keith Rabois?

  The good news is it's actually really easy to cut the G and A costs these days. AI allows you to substitute for most of what the people that work at Open Door do. So you should be able to bring the very, the fixed cost of running the business down to here. And then just decide on every home purchase, are we going to make money or lose money? And just purchase homes in any interesting environment where you will make money.

• 43:22Jordi Hays?

  What are the, what are the key activities within the business that you think are, are most ripe for replacing with agentic workflows?

• 43:31Keith Rabois?

  Honestly, I think real world stuff, like there are companies that are actually doing inspections with AI. The idea that you need this, like, we have labor, you know, and inspect, you know, repairs, et cetera, et cetera. That, that stuff can be done, videos in AI, much better than, uh, traditional people. And there's companies that are specializing in this. So I, I just think that you don't need all these people and it's going to continue. The acceleration of AIs is more and more obvious and more and more stark every day. So can you cut it to a hundred people? Probably yes, actually, maybe less. And then you have a, then you all have variable. Costs and the only thing you need to do is model the value of a home correctly, which is complicated. But Open Door has been excellent at it.

• 44:15Keith Rabois?

  The one thing that people miss is with the exception of one quarter in the history of the company, the company has priced homes correctly and purchased successfully and profitably. But the marginal costs, uh, the fixed costs, sorry, has not been able to be offset eh when no one's transacting. The company has significant market share in many markets. So the company will just mint money as long as it gets its costs under control. Now it needs to be a massive company, which is the potential. Like if you think about it, let's take a top down perspective. Yuri Milner actually made this point to me seven years ago.

• 44:51Keith Rabois?

  The largest real estate platform in the West is worth about eighteen billion dollars. That's insane. This is the largest asset class, period. The idea that the most innovative company in the entire Western universe would be worth eighteen billion dollars in residential real estate makes no sense whatsoever. So somebody is going to build a fifty, hundred, hundred fifty billion dollar market cap company. And this management team doesn't think that way. They think about, you know, moving one basis point here and one basis point there versus innovating to build a hundred billion dollar company. There is no reason this shouldn't be a fifty to a hundred billion dollar company. You just need the right leadership and we're going to fix that.

• 45:28John Coogan?

  We have a couple of questions from the chat. Are you interested in going back on the board of Open? Are you interested in stepping in the CEO seat, getting a new role? Like what do you see your involvement going forward? How do you think about that?

• 45:42Keith Rabois?

  The company needs a new CEO. If I can be involved in identifying, assessing and or closing the proper candidate, I'll be happy to be involved. I, I do not plan to be an executive. I have a very busy full-time job. And I, this company needs a full-time dedicated CEO who's intense, who's creative, who's innovative. So if I can help that person, if I can encourage that person, that'd be wonderful regardless of the structure.

• 46:11John Coogan?

  Maybe they're listening right now. Uh, DM Keith.

• 46:14Keith Rabois?

  Yeah, DM Keith. If you're a great, if you're anything like Will Gaybrook at Stripe or Greg Brockman at OpenAI, please call me right away.

• 46:22John Coogan?

  Uh, I want to talk about, uh, transformation and actually implementing agentic workflows, implementing AI and then cutting costs. Is there a sort of, uh, like CapEx type cost? I mean, I imagine that there's some folks on the private equity side that are buying up small businesses and then hope to use AI to cut costs, improve margins. Uh, and maybe they're doing that internally and defraying those costs of knowing which tools to pick, uh, internally across a portfolio. Then there's McKinsey and the big, uh, the big consulting firms that are going to Fortune 500s and saying, you're going to pay us a ton for a slide deck boat. You know, in theory, we're going to get you set up with something that will save you money. But for a company like Open Door, um, what does it look like?

• 47:05John Coogan?

  Because it feels like it's probably too complex to just say, okay, yeah, we're going to like sign up for chat GPT and that solves our problem. There's probably going to be some implementation of these AI tools, uh, and that might have cost in the short term, even if it drives longer term, better earnings outlook. How do you think about that?

• 47:24Keith Rabois?

  Well, I think that's why we need a CEO who's AI native, AI, uh, insightful. Yeah. I think that business transformation requires real skill. Uh, I think you are right, though, that the hottest area of venture capital is, venture capital is chasing after old school businesses and trying to turbocharge businesses, uh, with AI, whether they're turbocharging on the top line, which to me is more interesting, or improving EBITDA with AI substitution of costs. That's, that's pretty cool. But, you know, we funded a few companies. There's at least two VC competitors of ours that I know of that have dedicated funds that do nothing else except roll up traditional businesses and try to turbocharge them with AI. So I think, you know, this is very common.

• 48:07Keith Rabois?

  At the large company level, it is happening, apparently. Um, actually, apparently, Amazon has had a lot of success with this. They don't talk about it and speak about it, but apparently it's true. Um, and then I think you're going to see more private equity firms insist upon their portfolio, whether they're large market cap portfolio companies or small, um, apply AI in a thoughtful, creative way.

• 48:31Jordi Hays?

  Do you think, I mean, it feels like private companies have like an extreme structural advantage in terms of doing like true AI-driven transformation because OpenAI, sorry, not OpenAI, Open Door, you know, every, over the last week, every 10 posts on X has been some, you know, different retail investor having strong opinions about who the management should be and what the board is doing and all this stuff. Yeah. Do you think that, do you think that if the right person were to come to the table that like a, that Open Door would do better if it was a private company for the next like few years?

• 49:09John Coogan?

  Yeah.

• 49:09Keith Rabois?

  I don't think so. I think you can transform yourself in the public domain as well. I think you can take advantage of those suggestions. I think, first of all, let's just take a step back. I think retail investors having a point of view and being excited about an opportunity is a great thing. I think the whole point of markets is to allocate capital. That's why we have markets, right? That's why we have public markets. It's an allocation function. And consumers voting with their feet, especially for consumer brands saying, I want more of this, I want less of that, is actually a proper capital allocation. Like if the company did this, I would spend more money with them. That should encourage capital allocation. This is not, some people have like this negative perception of retail investors. I think it's actually better when retail investors say, I'm going to vote with my feet, I'm going

• 49:54Keith Rabois?

  to vote with my dollars. If product X or Y or brand does X, Y, or Z, or brand represents Z, I'm going to spend money with them. That is a reason to allocate more capital to that company. It's fundamentally sound.

• 50:06John Coogan?

  How do you think about the storytelling around AI as a silver bullet versus a core competency that will be a compounding advantage? I'm thinking of the Amazon example you gave. I completely agree that Amazon's been a beneficiary of AI all over the place, but I don't think it's happened in a single quarter. I think they ramped to a million robots across all of their different facilities. They bought Kiva a decade ago. They were using, they were using AI recommendation systems to tell you, hey, you're buying a computer, do you want a monitor? That's AI, but you know, just a couple decades ago. And so it feels like the right person for the job, they might be able to come in, rip off Band-Aid, get things right sized, do the hard work, but then it's really like, you can't take your

• 50:51John Coogan?

  foot off the gas.

• 50:53Keith Rabois?

  I think you need to do both. I think there's bottom-up transformation, which is blocking and tackling,

• 50:57John Coogan?

  Sure.

• 50:58Keith Rabois?

  persistency, consistency. It's like going to berries. You have to go every day, like every day for like, for like a decade.

• 51:04John Coogan?

  Of course.

• 51:05Keith Rabois?

  And you know, you get the results. Sometimes, yeah, sometimes three, four, or five times a day. Yeah. And then there's, I think there's top-down. I think leadership involves sometimes just putting a stake in the ground and saying, thou shall not. Like, we are just not going to do this anymore. We are absolutely out of that business. And that's why you need a founder-driven CEO, truthfully. Transformations with emerging technology require the moral authority of a founder just saying, absolutely no. I know this has worked in the past. I know this worked in other companies, but we're just not doing that anymore because the world's going this way and we want to be ahead of the world.

• 51:37Jordi Hays?

  How do you think Open Door's relationship with, with traditional real estate agents should evolve?

• 51:44Keith Rabois?

  Well, I, I think it should be, we should be innovating so that there's no comparison. Like, the value proposition Open Door provides a consumer, whether a buyer or seller, should just be so much better that no one wants a real estate agent. It's not a bad thing. Like, real estate agents used to do X and Y, and there's a bundle of services they provide. But what Open Door provides is this, and it's just like a no-brainer. And if it's not a no-brainer, the company is not innovating and is not creating enough value, period.

• 52:11John Coogan?

  Uh, how do you think about other levers, like zooming out to the macro, that could just increase the velocity of, uh, of real estate transactions, or just make homes more affordable in America? I don't know how high this up is, i- i- how high this is on the current administration's agenda, but it feels like something that people have been clamoring for, for years on both sides. Are there obvious wins that you're optimistic about in the next couple of years to just improve the quality of housing in America broadly?

• 52:45Keith Rabois?

  Well, affordability is a top-tier issue, certainly for my conservative friends.

• 52:49John Coogan?

  Yeah.

• 52:50Keith Rabois?

  We need to make housing more affordable for more people as fast as possible. There are some things that have short timelines and some things that take longer. So, building is great. We need more, we need to supply. Supply works. Supply has worked in local environments. You can prove it in, in, in city X and city Y. The cost will come down if you build. But you can't build a house, at least right now, without more robots, more automation. You can't build one overnight. So, supply does take time, but we need to start working on supply and getting rid of all the blockers and excuses for lack of supply, particularly in California. Secondly, we do need interest rates to come down. Uh, we do need a new chairman of the Federal Reserve. The best thing ever, you know, for Open Door would be replacing Kerry as CEO and replacing Jerome Powell as Federal Reserve Chair.

• 53:35Keith Rabois?

  Fortunately, I think both are gonna happen. I hope both happen in September, maybe before.

• 53:40John Coogan?

  Okay. Can the interest rates ever be too low?

• 53:44Keith Rabois?

  Probably, uh, you know, like interest rates, it, it, it's basically related to its high value of money.

• 53:49John Coogan?

  Yeah.

• 53:50Keith Rabois?

  And so, if interest rates are too low, people's willingness to part with money to get paid back in the future gets reduced. And then, uh, that is investment. That's, that's really what the definition of investment. So, they could be too low, but they're, they're definitely too high right now.

• 54:04John Coogan?

  I guess I've just been thinking, like, there are, there are a lot of green lights, green flags in the market. New companies are going out. The stock market's at all-time highs. Everything feels really strong in the economy. Even the CPI is coming back flat and GDP is printing. Everything seems pretty good and it feels like-

• 54:23Jordi Hays?

  Except the fast casual restaurant chains.

• 54:25John Coogan?

  Yeah, yeah, yeah, they're having trouble.

• 54:27Jordi Hays?

  Except that the slot market is, is in decline.

• 54:30John Coogan?

  But in general, things seem to be going very well in the American economy. And when there's a risk of, okay, we could be overheating, I feel very reassured by having, let's lower interest rates as an ace up our sleeve in case we get over our skis and there is a market correction. The Fed does have some, has some tools in the tool chest.

• 54:49Jordi Hays?

  Our friend Joe's point is like, the, in his view, the, the argument to lower rates is like the data that's coming out of the labor markets. But again, that's also being debated and rehashed and, and, uh, I don't think anyone really feels that much.

• 55:05Keith Rabois?

  Take a step back, though.

• 55:06John Coogan?

  Please.

• 55:07Keith Rabois?

  I think the foundation that growth equals inflation is just wrong. So, from 1950 to 2010-

• 55:15Keith Rabois?

  Each decade, we average 3.6 years with over 4% growth without inflation. It's only the modern world post 2010 with qualitative easing that people equate growth with inflation. The good news about AI productivity gains is it's very easy to see how you can grow fast 3%, 4%, 5% consistently without sparking inflation because all of the growth is not propelled by labor cost increases, which is what causes inflation. So I think the modern world of the next 30 years, if it's managed correctly, if the leadership in the political sphere is dialed in,

• 55:55Keith Rabois?

  should allow consistent growth, which will eliminate the debt and make a non-serious problem, like 3%, 3%, 3% plus, without inflation. And we need to get people who are sort of educated a century ago

• 56:12Keith Rabois?

  out of this mindset that every time you see growth, you need to put on the brakes. That's just not, and that's why the Federal Reserve keeps making that mistake. And so we've got to fix that. But part of it is AI-driven and technology-driven innovation will allow for great growth, consistent growth without inflation.

• 56:32John Coogan?

  Is that your current outlook? Not necessarily a fast takeoff and we're growing at 10% GDP a year. Satya Nadella says, call me when we're growing at 10% a year, but, but, but a materially improved economic condition for the United States on a, on a long-term basis?

• 56:50Keith Rabois?

  Yeah, they stop us and let's just talk about 3, 3, 3. And you want the 3% consistently. You could beat 3, and I think we will beat 3, and I think he wants to beat 3 in the next couple of years. So I subscribe to his perspective on the world. I think he's right. But it's technology that's the magic wand that allows consistent growth without actual inflation. And that's what we need. That is how, raising taxes is a disastrous policy. It's not going to fix any problems. Consistent growth without inflation will. And we need a Federal Reserve Chair who understands that. We have a Treasury Secretary, fortunately, who really does understand this.

• 57:27John Coogan?

  Yeah, and we've seen that with those charts of the various goods and services inflation over the past decade. Education and healthcare goes through the roof where everything that's on the technology adoption curve like TVs and dishwashers that all has gone down in price. And so the more goods and services that you can put on the deflationary curve, the more growth you get and the better health of the American consumer. Good stuff. Jordy, anything else?

• 57:52Jordi Hays?

  I think that's it. Thank you for jumping on on short notice.

• 57:54John Coogan?

  Thanks for taking the time, Keith. This is always great.

• 57:56Jordi Hays?

  Come back on whenever you have more thoughts on if you can think for 10 minutes and get a post up, you can jump on the show.

• 58:03John Coogan?

  Please, we'd love to have you.

• 58:04Keith Rabois?

  Great pleasure to be with you. I'll be back.

• 58:06John Coogan?

  We'll talk to you soon. Bye. See ya. Let's go to the Metis list. We updated the Metis list, our ranking of the top 128 now AI researchers. It's burning up the timeline, extremely controversial. Fortunately, we have Tyler Cosgrove to blame for that. We had no, no involvement whatsoever. We will be disavowing the Metis list if it comes back to bite us. But Tyler, why don't you give us an overview of what changed, who's on top and what's going on with the Metis list today?

• 58:37Speaker 06

  Yeah. Okay, so we're going in the mic right?

• 58:38John Coogan?

  Yeah, we're good.

• 58:39Speaker 06

  So, okay, before we start, just want to give, you know, this is not done yet. The list can change. Okay, so we got some haters in the comments again.

• 58:48John Coogan?

  This is final. DM Tyler if you have a problem.

• 58:51Speaker 06

  Oh, this person like, oh, he's so low. Okay, we can fix it. All right, it's not done.

• 58:54John Coogan?

  Okay.

• 58:55Speaker 06

  All right. Yeah, okay, let's start with the top five here, right?

• 58:59John Coogan?

  Okay.

• 58:59Speaker 06

  So I think a big change we'll see is that we saw Noam, Shazir and Ilya Switch.

• 59:04John Coogan?

  Wow, that's a huge move. Okay, what drove that?

• 59:09Speaker 06

  Sorry?

• 59:09John Coogan?

  What drove that? Is that just because Ilya's been quiet at SSI, hasn't published anything in the last year?

• 59:14Speaker 06

  I think that's a big part of it.

• 59:15John Coogan?

  And Noam's been on a tear?

• 59:16Speaker 06

  Yeah, so I know, so I mean, I think Noam Shazir is broadly almost like, you can't say he's slept on, he's number one.

• 59:23John Coogan?

  Yeah.

• 59:24Speaker 06

  But he is, I think. You know punching above his weight a little bit.

• 59:27John Coogan?

  I think Doug from 7000 Analsys came on and said that the reason that Gemini is so good is because is because Noem's back.

• 59:33Speaker 06

  Yeah, you can basically track like Gemini was okay, it was fine.

• 59:36John Coogan?

  Yep.

• 59:36Speaker 06

  He comes back from character.

• 59:37John Coogan?

  Mm hmm.

• 59:38Speaker 06

  There go it again.

• 59:38John Coogan?

  Okay.

• 59:39Speaker 06

  Okay, so let's go down to number three.

• 59:40John Coogan?

  Some soundboard Jordy for Noem Shazir. Soundboard is down. Soundboard's down.

• 59:43Speaker 06

  Soundboard's down, okay, Demis.

• 59:45John Coogan?

  Yeah, Demis.

• 59:45Speaker 06

  He was missing from the first list.

• 59:48John Coogan?

  Yep.

• 59:48Speaker 06

  That was maybe a conscious decision, it might not have been.

• 59:51John Coogan?

  He was missing entirely.

• 59:52Speaker 06

  He was missing, he was on the list at all.

• 59:53John Coogan?

  He's one of the greatest ever.

• 59:55Speaker 06

  You know, the thought was like, you know, he's not as much of a researcher now.

• 59:58John Coogan?

  He's more a leader, he's more of a CEO almost.

• 1:00:00Speaker 06

  Exactly, but you know, if you trace it back, he's obviously still making some research decisions.

• 1:00:04John Coogan?

  Okay, yeah, yeah, yeah.

• 1:00:05Speaker 06

  I think it's fine to put him back on.

• 1:00:06John Coogan?

  Okay, so he's number three.

• 1:00:08Speaker 06

  He's number three, Dario.

• 1:00:10John Coogan?

  Dario, Amade.

• 1:00:11Speaker 06

  Dario Amade moves up Anthropic.

• 1:00:13John Coogan?

  Over at Anthropic.

• 1:00:14Speaker 06

  Similar thing, another lab leader.

• 1:00:15John Coogan?

  Got it, makes sense.

• 1:00:16Speaker 06

  And then last up, we have John Schulman.

• 1:00:18John Coogan?

  And Dario, has he been on the Dorkesh podcast?

• 1:00:22Speaker 06

  He has.

• 1:00:23John Coogan?

  Okay.

• 1:00:23Speaker 06

  I think actually all five.

• 1:00:25John Coogan?

  All five.

• 1:00:26Speaker 06

  Dorkesh has hit all five, he's hit seven of the top 10 as well.

• 1:00:28John Coogan?

  Seven of the top 10.

• 1:00:30Speaker 06

  So.

• 1:00:30John Coogan?

  I mean, he's been on a generation.

• 1:00:31Jordi Hays?

  We didn't just listen to Dorkesh, we studied.

• 1:00:34John Coogan?

  We sat down and listened, we didn't just hear Dorkesh, we sat down and listened.

• 1:00:38Speaker 06

  Yeah.

• 1:00:39John Coogan?

  Okay, who's last on the top five?

• 1:00:41Speaker 06

  John Schulman, Thinking Machines. Yeah, so another, another big player, I believe.

• 1:00:45John Coogan?

  Huge, huge.

• 1:00:46Speaker 06

  Everyone except Demis has at one point worked at OpenAI.

• 1:00:50John Coogan?

  Wow.

• 1:00:51Speaker 06

  Uh, actually, wait, I don't know if that's true, maybe.

• 1:00:53John Coogan?

  Yeah, I don't think Noem did, but still.

• 1:00:55Speaker 06

  But yeah, that's, that's the new top five, I think, let's move over to big moves.

• 1:00:59John Coogan?

  Big moves, who we got?

• 1:01:00Speaker 06

  From two weeks ago, so the first one we can look at, number 13, Noam Brown.

• 1:01:06John Coogan?

  Noam Brown.

• 1:01:06Speaker 06

  So he, he, he did really well.

• 1:01:08Jordi Hays?

  Up 36 spots.

• 1:01:10Speaker 06

  Up 36 spots.

• 1:01:11John Coogan?

  Now, he was in the IMO gold medal team at OpenAI, they cracked that code.

• 1:01:16Speaker 06

  Yeah, he's big on the kind of RL team, I don't know, they probably have multiple RL teams post-training.

• 1:01:21John Coogan?

  Yep.

• 1:01:22Speaker 06

  But yeah, he, he's, he's doing a lot of good work there.

• 1:01:24John Coogan?

  There's someone else at OpenAI who's famous for like, holding RL all together, they made the list as well, is that correct?

• 1:01:30Speaker 06

  Yeah, there's a bunch of just like post-training RL people that are new on the list now.

• 1:01:35John Coogan?

  That'll be important going forward.

• 1:01:36Speaker 06

  Yeah, I don't know if we mentioned, but the list is longer now, right?

• 1:01:38John Coogan?

  Yep.

• 1:01:38Speaker 06

  There's now 128.

• 1:01:39John Coogan?

  We were at 100, now we're at 128, a nice base two number.

• 1:01:43Jordi Hays?

  I think. Some big additions too, Will Brown, cracked the list, unsurprising to anybody with a brain.

• 1:01:50John Coogan?

  Multi-time TBPN appearance, so makes a lot of sense.

• 1:01:53Jordi Hays?

  Yep, Chad.

• 1:01:54Speaker 06

  Okay, we can go next one, Paul Cristiano.

• 1:01:57John Coogan?

  Yeah, break him down.

• 1:01:58Speaker 06

  He's kind of an OG.

• 1:01:59John Coogan?

  Okay.

• 1:01:59Speaker 06

  He, I don't know if he's the godfather of RLHF, but he was a big name on that paper. Now, he's mostly into safety stuff now, but he's definitely kind of a thought leader in the space, right?

• 1:02:10John Coogan?

  We got Rigav in the chat saying Tyler is trying to atone for mogging Anthropic in Sonnet 4 yesterday. Is that true? Are you beating the allegations?

• 1:02:19Speaker 06

  Number four, that's pretty high.

• 1:02:20John Coogan?

  I think you've atoned. I think you've atoned. Good job.

• 1:02:23Speaker 06

  Shulto, I think Shulto actually moved down.

• 1:02:26John Coogan?

  No.

• 1:02:26Speaker 06

  Anthropic is still, you know, they have a lot of people on the list.

• 1:02:29John Coogan?

  Okay, okay.

• 1:02:30Speaker 06

  Let's go to Peter Beal, up 66.

• 1:02:32John Coogan?

  What is he known for? I've heard his name before.

• 1:02:34Speaker 06

  I mean, so he's just an academic. He's at Berkeley.

• 1:02:36John Coogan?

  Okay. Oh, he's not in the lab?

• 1:02:38Speaker 06

  He's not in the lab right now. Not yet. He's leaving billions on the table.

• 1:02:42John Coogan?

  Leaving billions on the table.

• 1:02:43Speaker 06

  Literally, yes.

• 1:02:46Speaker 06

  He's been on a ton of papers. He's like, also advised a ton of the, of the top researchers.

• 1:02:51John Coogan?

  Sure.

• 1:02:52Speaker 06

  So I think he's kind of influential in that way. Let's go down to Jan LaKoon, is actually missing from the list now.

• 1:02:58John Coogan?

  Missing?

• 1:02:58Speaker 06

  So he was at.

• 1:03:00John Coogan?

  Oh, no, he was at Fair, right?

• 1:03:01Speaker 06

  I think he was top 10.

• 1:03:02John Coogan?

  Okay, he was top 10.

• 1:03:03Speaker 06

  And he's now not even on the list.

• 1:03:04John Coogan?

  He's not on the list. And he's that.

• 1:03:06Speaker 06

  So, you know, like, I don't make the list. I just give the, I give the voting out. And then people make the decision. It's not me, okay?

• 1:03:12John Coogan?

  So let us know in the chat, should we shoot the messenger? Or should we not shoot the messenger here? Do we have a, do we have a toy bone era? I can shoot the messenger here. Yeah, so Jan LaKoon, big meta AI researcher, ran Fair. Was not directly on the Llama project, but was one of their key researchers. Is that right? And then kind of Llama spun out of Fair, their AI research lab. And then, yeah. And, and sort of like a thought leader in many ways. Steward of the, of the strategy. Also, sort of a hater on deep learning for a while.

• 1:03:46Speaker 06

  Sort of a hater on, on LLMs. I don't know about deep learning specifically. I mean, he was kind of, he did CNNs, right? That was his big thing.

• 1:03:51John Coogan?

  So he's kind of, he's been kind of maybe right. It's kind of too soon to call it on him, but he certainly like lost a lot of power within that organization. As, as Mark Zuckerberg has built out the Meta Superintelligence Lab, MSL.

• 1:04:04Speaker 06

  is still chief AI scientist.

• 1:04:06John Coogan?

  Okay.

• 1:04:06Speaker 06

  But maybe it might be co-led.

• 1:04:08John Coogan?

  Yep.

• 1:04:09Speaker 06

  Now.

• 1:04:09John Coogan?

  Yep. And then, of course, you have Nat Friedman, Daniel Gross.

• 1:04:11Jordi Hays?

  But he's not considered to be on the MSL.

• 1:04:14Speaker 06

  No.

• 1:04:15John Coogan?

  Yes.

• 1:04:15Speaker 06

  No.

• 1:04:16John Coogan?

  And so that's, uh, the, the.

• 1:04:17Jordi Hays?

  You mean no as in yes?

• 1:04:18Speaker 06

  He is not considered.

• 1:04:20John Coogan?

  He's not in MSL.

• 1:04:21Speaker 06

  Yes.

• 1:04:21John Coogan?

  He's in a separate org. He's in a separate org right now.

• 1:04:24Speaker 06

  Yeah.

• 1:04:24John Coogan?

  Okay.

• 1:04:24Speaker 06

  And then.

• 1:04:25John Coogan?

  Then break down Jürgen Schmidhuber. What's up with him?

• 1:04:28Speaker 06

  Down fifty-three spots.

• 1:04:29John Coogan?

  Fifty-three spots.

• 1:04:29Speaker 06

  He's also somewhat controversial during.

• 1:04:32John Coogan?

  Why is that?

• 1:04:33Speaker 06

  The Nobel Prize. You know, he was saying, oh, it should have been me instead. He, he's kind of, he's a real OG in the space in deep learning.

• 1:04:40John Coogan?

  He was trying to aura farm the Nobel Prize?

• 1:04:42Speaker 06

  Yeah. So it didn't, it didn't really work, but.

• 1:04:44John Coogan?

  But he was unsuccessful.

• 1:04:46Speaker 06

  Yeah.

• 1:04:46John Coogan?

  It was a failed aura farm.

• 1:04:47Speaker 06

  So, so, so maybe that's, that's the reason why.

• 1:04:49John Coogan?

  I do remember when, uh, when ChatGPT first launched, there was someone in the comments. Dystopia Breaker was saying, oh, this stuff Schmidhuber did all this years ago. There's nothing new here. Uh, of course, I think that under, under represents the importance of actually, uh, productizing these technologies and these research, uh, uh, efforts. But, uh, still interesting to see that he fell so far. I expect a call from him.

• 1:05:14Jordi Hays?

  Let's get into the overall stats.

• 1:05:15Speaker 06

  Yeah. So I, this was actually pretty interesting. So we can look at the, this is the, the, the number of researchers per lab.

• 1:05:21John Coogan?

  Okay.

• 1:05:22Speaker 06

  So we basically see the top three are all, you know, neck and neck, right? Opening asset twenty-four, DeepMind at twenty-three, Anthropic at twenty-two. This is different from, from the previous list. Anthropic was, I think, leading by maybe four researchers.

• 1:05:35John Coogan?

  Yeah.

• 1:05:36Speaker 06

  But now it's really neck and neck here. And then you see Thing Machines at twelve, somewhat surprising. They're really, I mean, they have a lot of goats on their team. And then Meta down at eight.

• 1:05:45John Coogan?

  Interesting that Meta doesn't have more on the list, given what a spree they've been on.

• 1:05:49Speaker 06

  Yeah.

• 1:05:50John Coogan?

  But they're probably still just in the early days of actually building out that squad.

• 1:05:53Speaker 06

  Yeah. I mean, if, if you consider, they started MSL, like, what, a few months ago?

• 1:05:58John Coogan?

  Yeah, it takes time to, even, even when you have the money, it takes time to actually convince people.

• 1:06:01Speaker 06

  I think if we would have made that list back then, they would have had basically zero, right? Maybe they would have had Jan LeCoq.

• 1:06:06John Coogan?

  Yep.

• 1:06:06Speaker 06

  But he's not even on the list anymore.

• 1:06:07John Coogan?

  Yeah, they didn't have that many.

• 1:06:08Speaker 06

  Sure. And then we can also.

• 1:06:09John Coogan?

  And I mean, I remember those viral posts about people saying like, oh yeah, I worked on Lama three, not Lama four. And now I'm at another lab. Like that was something somebody posted on their LinkedIn.

• 1:06:18Speaker 06

  Viral LinkedIn screenshots.

• 1:06:19John Coogan?

  There, there was a little bit of an exodus and now Zuck's rebuilding the team going into season twenty twenty-six.

• 1:06:25Speaker 06

  Exactly. Yeah. And then finally, we can break it down by country. We see. USA, of course.

• 1:06:29John Coogan?

  America.

• 1:06:30Speaker 06

  Fifty-one.

• 1:06:31John Coogan?

  USA.

• 1:06:32Speaker 06

  Way above America, China at fourteen.

• 1:06:33John Coogan?

  USA, you love to see it.

• 1:06:35Speaker 06

  UK at thirteen, Canada twelve.

• 1:06:36John Coogan?

  Canada, good showing.

• 1:06:37Speaker 06

  China would be putting that in the true zone.

• 1:06:38John Coogan?

  On a, yeah, on a, on a weighted basis, though, population weighted, Canada's doing fantastically. They have one-tenth.

• 1:06:45Speaker 06

  That's true.

• 1:06:46John Coogan?

  The population of America, I believe. And one, one-fifth as many AI researchers on the medicine list. So, congrats to the Canucks up north.

• 1:06:54Speaker 06

  I mean, it's always hard, especially with China, because a lot of their labs are very secretive, right?

• 1:06:58John Coogan?

  Yeah, so did anyone from, from High Flyer, DeepSeek or Alibaba?

• 1:07:04Speaker 06

  We have two, I believe, two DeepSeek researchers.

• 1:07:06John Coogan?

  Okay.

• 1:07:06Speaker 06

  One is from Keen.

• 1:07:08John Coogan?

  Okay.

• 1:07:08Speaker 06

  Or like Moonshot.

• 1:07:09John Coogan?

  Yep, Moonshot is big now, and then...

• 1:07:11Speaker 06

  I don't know if we have anyone specifically from Alibaba.

• 1:07:13John Coogan?

  From ByteDance? The, the, the, the guy who created, the gal who created the TikTok algorithm? You gotta put them on there, that thing is wild.

• 1:07:21Speaker 06

  Yeah, it's always just hard because, you know...

• 1:07:23John Coogan?

  Brain rot, you wanna build the brain rot machine.

• 1:07:25Speaker 06

  I think especially with the first version.

• 1:07:27Jordi Hays?

  We should, we should actually build the brain rot list.

• 1:07:29John Coogan?

  The brain rot list, the researchers who have created the most sticky, you know, user-generated content algorithms.

• 1:07:36Speaker 06

  The most user hours.

• 1:07:36John Coogan?

  The most user hour maxers. Anyway, what else you got for me?

• 1:07:41Speaker 06

  So, I think one of the big improvements of, of this list versus of two weeks ago was that, I think originally, we kind of optimized a little bit too much for Twitter Cloud or Google Scholar citations.

• 1:07:53John Coogan?

  Us? Twitter Cloud?

• 1:07:54Speaker 06

  It's hard, like, I mean, the labs are so secretive now, they don't really put out papers.

• 1:07:58John Coogan?

  Of course, and if you have someone incredible, you have a huge incentive to not let them do press.

• 1:08:02Speaker 06

  Yeah, exactly.

• 1:08:03John Coogan?

  Like, hey, no, actually, you can't go on Dorkesh Patel.

• 1:08:05Jordi Hays?

  We definitely got messages from people that were saying, can you, can you put, can you take my team off the list?

• 1:08:10John Coogan?

  Can you take my team off the list? Like, stop, stop talking about us. We, we'd prefer if these people didn't get poached. But that's the name of the game.

• 1:08:19Speaker 06

  Yeah, I'm seeing in the comments.

• 1:08:19John Coogan?

  Yep.

• 1:08:20Speaker 06

  Yeah, Sutton, I mean, there's a bunch of people that probably, like, should be on the list.

• 1:08:24John Coogan?

  Rich Sutton, John Carmack, yeah, both of them at Keen. We haven't seen a lot from Keen, but would be very, very interesting.

• 1:08:31Speaker 06

  Yeah, but yeah, we're gonna continue.

• 1:08:33Jordi Hays?

  Big shout out to Mark Chen, broke the top ten. Well deserved. Up nineteen spots, sitting at number six, just under John Schulman.

• 1:08:42John Coogan?

  To the chat, I have unplugged and plugged back in my microphone. Hopefully it sounds better. If not, I can switch to the other microphone. But let me know how it sounds. And we will stop cutting off Tyler Cosgrove, our intern, because the chat is telling us to stop cutting him off. So Tyler, who else fell off the list? How is my boy George Bull doing?

• 1:09:03Speaker 06

  Yeah, George Bull, Alan Turing.

• 1:09:07John Coogan?

  Wait, both of them got cut?

• 1:09:08Speaker 06

  They're both on the list, but.

• 1:09:09John Coogan?

  Well, they're on the list.

• 1:09:10Speaker 06

  Labniz is on the list now.

• 1:09:12John Coogan?

  Okay, okay, that's good. But what happened to George Bull? Where is he?

• 1:09:15Speaker 06

  People were really hitting on him.

• 1:09:17John Coogan?

  He's off the list entirely?

• 1:09:18Speaker 06

  Yeah, off the list entirely. I don't know what his actual rank is. Obviously, like, I have the internal one.

• 1:09:23Jordi Hays?

  I think the ghost of Alan Turing is gonna haunt you, Tyler.

• 1:09:26John Coogan?

  So Alan Turing is not on the list?

• 1:09:28Jordi Hays?

  He fell off.

• 1:09:29Speaker 06

  He's off the list.

• 1:09:30John Coogan?

  I mean, I guess that's kind of fair. His test didn't really hold up too much. He got mugged by ChatGPT. But this test.

• 1:09:36Jordi Hays?

  Tyler Cowen's still defending Alan.

• 1:09:39John Coogan?

  Okay, yeah. The Turing test is Lindy. Any other moves? Did we get any other Easter eggs on this version? Or are we Easter egg free now?

• 1:09:48Speaker 06

  I think, I mean, Labniz, you could maybe say is an Easter egg.

• 1:09:51John Coogan?

  Yeah.

• 1:09:52Speaker 06

  I think that's.

• 1:09:52John Coogan?

  We didn't want to go full meme core?

• 1:09:54Speaker 06

  That's the main one, yeah.

• 1:09:55John Coogan?

  Okay.

• 1:09:55Speaker 06

  But we'll see.

• 1:09:56John Coogan?

  Well, thank you for all the hard work on the Metas List. You can check it out at metaslist.com.

• 1:10:01Jordi Hays?

  Fantastic work, Tyler. We will continue to update it. So if you're angry, if you're happy, shoot Tyler a message.

• 1:10:09John Coogan?

  Yep.

• 1:10:11John Coogan?

  Tyler also produced and edited a wonderful vibe video.

• 1:10:16Speaker 06

  He did.

• 1:10:17John Coogan?

  A launch video for this, which we're very excited to see him dip his toes in the water of video editing.

• 1:10:23Speaker 06

  He can do it all.

• 1:10:23John Coogan?

  Giving it to everyone else a run for their money. Anyway, let's run through some posts. We have 20 minutes until Alfred Lin from Sequoia Capital joins us. Let's see what else is going on. I did want to cover the Nvidia H20 news. Do you want to talk about that?

• 1:10:42Jordi Hays?

  Yes. Chinese authorities have urged local companies to avoid using Nvidia's H20 artificial intelligence chips, particularly for government-related purposes, a media report said. So they're worried about backdoors, and they're probably worried about generating revenue for Uncle Sam, their sworn enemy.

• 1:11:00John Coogan?

  Yeah, so there's an interesting dynamic here because the. The Chinese economy is not monolithic. It is like a state-directed capitalism. It's a mixture. It's with Chinese characteristics, of course. So the news is that Donald Trump approved Nvidia's request and AMD's bucket in here as well, but lower in importance, to export H20 GPUs to China. These are the nerfed AI chips, and they're critical for training large language models. And of course, DeepSeek famously optimized their training regimen and algorithms so that they could run on H20s. And so they have figured out a way to train large language models on H20s despite H20s

• 1:11:44John Coogan?

  kind of being designed to not let you train or inference large language models as efficiently. But they're still getting it to work, and they want them. So first off, oddly, the news is that Nvidia will pay a 15% export tax, roughly. It's not technically a tax.

• 1:12:02Jordi Hays?

  Just a rev share.

• 1:12:03John Coogan?

  A rev share.

• 1:12:04Jordi Hays?

  It's a donation.

• 1:12:04John Coogan?

  To the federal government, not to Donald Trump personally, but to the federal government for the H20s that they sell. Now, it is unconstitutional to levy an export tax on American-made goods. This came from the southern states, I think, post-Civil War, where the southern states were exporting lots of cotton goods, and they were worried that the northern states were going to try and raise federal revenues through export taxes that would disproportionately hit the South. But there's another odd wrinkle where the H20 isn't technically made in America. The chip is made in Taiwan with equipment from the Netherlands, the memories from South Korea. I think Singapore might be involved at some point. It never actually hits American shores.

• 1:12:47John Coogan?

  All the packaging happens overseas, and then it's shipped to China.

• 1:12:50Jordi Hays?

  But Nvidia is, of course...

• 1:12:52John Coogan?

  An American company.

• 1:12:53Jordi Hays?

  An American company.

• 1:12:54John Coogan?

  Exactly. So Trump still has leverage, and he was able to block exports of H20s back in April, which we covered on the show. And now Trump argues that this chip is not a threat. There's this incredible quote where Donald Trump says, "They're not getting Blackwell. Blackwell's the best chip ever."

• 1:13:10Jordi Hays?

  And he goes, "Maybe they could, but they'd have to pay more."

• 1:13:13John Coogan?

  He's sort of all over the place, but he's having fun. So the H20, at this point, I think most people, the consensus is that it is an older chip. It's nerfed and it won't lead to nuclear weapon level AI technology. Maybe that's the next, next chip, but certainly we're sort of in the implementation. You know, plateau era of, you know, decent value coming from these AI systems, but certainly not anything super intelligence coming out of a, a, a rack of H20s just yet.

• 1:13:44Jordi Hays?

  Yeah. So Beijing is demanding that tech companies, including Alibaba and ByteDance justify their orders. Nvidia's H20 artificial intelligence chips, which just further complicates things for Jensen. He's, you know, the, the meme of him, you know, smoking, smoking heater.

• 1:14:01John Coogan?

  Is that a meme?

• 1:14:01Jordi Hays?

  No, it's a, who's the, who's the, who's the actor?

• 1:14:05John Coogan?

  Matthew McConaughey?

• 1:14:06Jordi Hays?

  No, no, no.

• 1:14:06John Coogan?

  That, the, there's one of him like taking a drag off a cigarette when he's like engaged in some conspiracy or like unveiling a conspiracy.

• 1:14:13Jordi Hays?

  Ben Affleck.

• 1:14:14John Coogan?

  Oh, Ben Affleck. Yeah, yeah, yeah, yeah. Totally.

• 1:14:16Jordi Hays?

  You can see somebody chat GPT Jensen, you know, sitting outside his office, smoking heater. The tech companies are asked by regulators such as the Ministry of Industry and Information Technology. Let's give it up for that name.

• 1:14:29John Coogan?

  Yep. We love in industry.

• 1:14:30Jordi Hays?

  Sounds a little ominous. Anytime you got a ministry, it sounds a little ominous, but they're making people explain why they need to order.

• 1:14:37John Coogan?

  Explain yourselves.

• 1:14:38Jordi Hays?

  Explain. Why not use a domestic alternative?

• 1:14:40John Coogan?

  Yep.

• 1:14:41Jordi Hays?

  And.

• 1:14:42John Coogan?

  And so the dynamic here is pretty clear. Beijing wants China to continue broadly, like the government wants China to continue, continue to move down the learning curve for advanced semiconductors. They want SMIC, SME, Huawei to develop the indigenous supply chain for semiconductors and do all the hard work. And the only way to actually get the yields up and, and really get to the frontier is.

• 1:15:08Jordi Hays?

  Volume.

• 1:15:08John Coogan?

  Volume. It's a volume game.

• 1:15:10Jordi Hays?

  So a Chinese data center operator went on record to say it's not banned, but has kind of become a politically incorrect thing to do when asked about buying H20s.

• 1:15:21John Coogan?

  Yeah.

• 1:15:21Jordi Hays?

  One issue with doing politically incorrect things in China is you can often be disappeared.

• 1:15:27John Coogan?

  Potentially.

• 1:15:28Jordi Hays?

  And have your wealth taken from you, your, your.

• 1:15:33John Coogan?

  I think they got to push back. I think they got to push back. So the dynamic is, you know, China wants to continue developing supply chain semiconductors, their semiconductor supply chain. And then on the flip side, Chinese companies just want to develop, you know, the best possible AI models that they can. And so they don't want to be GPU poor. And, uh, and so there, there, there probably, there's going to be a little bit of a dance there. And some of these will be justified. There still might be some diversion that happens just for political reasons. It's all very complicated, but it will be interesting to see how many of those H20 GPUs that have been kind of mothballed. Can Nvidia actually sell? And we'll see that in their next earnings report, most likely.

• 1:16:14Jordi Hays?

  And the irony here, everyone, you know, people like the ultra China hawks, the, you know, AI war group saying that, you know, criticizing the original.

• 1:16:25John Coogan?

  Yep.

• 1:16:26Jordi Hays?

  You know, H20 deal be saying that it would help the Chinese military and just broadly undermine US strength and artificial intelligence. And now you have, uh, the Chinese government, uh, just saying, actually, we don't even want it. We don't want you buying them. We don't want you using them.

• 1:16:41John Coogan?

  Yep.

• 1:16:42Jordi Hays?

  So.

• 1:16:43John Coogan?

  Well, AI war seems to have been averted and war with China is also, uh, between China and Taiwan is also at an all time low on poly market. Seven percent chance by the end of this year, of course, the year is ticking by. So you'd expect that to go down, but even, even by the end of 2026, it's only a 22% chance. So people.

• 1:17:02Jordi Hays?

  22% chances.

• 1:17:04John Coogan?

  People have been saber rattling about this for a long time, that something's going to happen soon. And, uh, you know, the, at least the poly market doesn't really think that's going to happen. Anyway, let me tell you about Julius. What analysis do you want to run? Chat with your data and get expert level insights in seconds. You can ask Julius to analyze your data. And it's loved by two million plus users entrusted by individuals at Princeton, the Boston Consulting Group and Zapier.

• 1:17:31Jordi Hays?

  When Rahul first, when, when Rahul first told me, when I saw the two million user number, I was like, is that a, do you add a few extra zeros there?

• 1:17:40John Coogan?

  It did seem like, no, it's real.

• 1:17:42Jordi Hays?

  It's real.

• 1:17:42John Coogan?

  It's fantastic. So there's another interesting, um, data point that came, came out of earnings. So there were two companies that, uh, that announced earnings recently and are in the business and finance section of the Wall Street Journal today. So, uh, stablecoin firm Circle records loss, but revenue soars 53%.

• 1:17:59John Coogan?

  And then separately, CoreWeave posts a loss on higher revenue. So both of these companies, one in AI, one in crypto, beat on top line, missed on the bottom line. So they're in different industries, but it feels like they're adopting similar financial strategies, which is invest right now for growth, go, go, go, get the top line higher, become a big company. So the numbers are crazy. Circle's share price has quintupled since its June IPO. We interviewed the CEO just after that IPO. I had not been tracking exactly what the share price had done. That's incredible performance. Revenue's up 53% year over year. It's great stuff, but the losses are growing.

• 1:18:43John Coogan?

  Analysts expected a $338 million loss for Circle. They posted a $482 million loss in the second quarter. Something simpler happened with CoreWeave. We also interviewed the founder of CoreWeave on the show. Second quarter revenue tripled since a year earlier. That is incredible performance, but the company lost 290.5 million in the quarter, which is 15% more money lost than the analysts expected. Not a huge miss, but certainly something that people weren't really pricing in fully. And both of those companies have had, I believe they've had profitable quarters, but then kind of gone down as they've gone back into the reinvestment mode. And so my read is basically like there's green lights all over the economy. It's green flags everywhere.

• 1:19:26John Coogan?

  The market's open, the IPO window's open, the economic data is really good. So invest, invest, invest, take advantage of the AI race, take advantage of the new crypto regulations, anything you can to go take as much market share as possible and get really, really big. So, you know, maybe the wave is cresting, but why not get a firm footing on your board while you can?

• 1:19:47Jordi Hays?

  Absolutely.

• 1:19:48John Coogan?

  Anyway, that's my take on CoreWeave and Circle. Anyway, let's move on. I think we hit Google pretty well. We can tell you about Profound though. That's obviously relevant to the Google conversation. Get your brand mentioned in ChatGPT. It's going to be more important than ever going forward, especially as they add agentic commerce features, where you can reach millions of consumers who are using AI to discover new products and brands.

• 1:20:13Jordi Hays?

  I wanted to highlight a brand, the founder's name is Isabel. She said, this morning, my brand that's less than 13 months old is launching Whole Foods nationwide without a seven-figure raise. How is that even possible? One, strong lending partners. We have invoice factoring and PO financing at less than 12% APR, making it a clear no-brainer to free up working capital. Two, prioritize strong unit economics, 50% plus, and bi-coastal manufacturing and fulfillment to not get crushed on freight. Three, trial and retention, we invest-

• 1:20:44John Coogan?

  Wow, manufacturing on both coasts, day one. That's a bold move.

• 1:20:48Jordi Hays?

  And then four, the thing that's interesting, A2 dairy is on trend. So A2 dairy is not quite, it's not raw, which is, which is non-pasteurized dairy.

• 1:21:00John Coogan?

  Lightly pasteurized or something?

• 1:21:01Jordi Hays?

  But I forget the exact definition of it, but it's, but it's, think of it as a milk derivative. Let me pull up the definition. A2 milk is a type of cow's milk that primarily contains the A2 beta-casine protein unlike regular milk, which contains both A1 and A2 protein. So some people are sensitive to A1-

• 1:21:25John Coogan?

  Sure.

• 1:21:25Jordi Hays?

  And so they can have A2 dairy.

• 1:21:27John Coogan?

  Yep.

• 1:21:27Jordi Hays?

  And we were talking about this earlier today. I haven't been a fan of a lot of, a lot of like ready-to-drink products, especially in coffee lately, because they include all these random alternative milks that have a lot of sunflower and canola oil in them. But anyways, super impressive from Isabel.

• 1:21:47John Coogan?

  You just want a simple, you just want a simple RTD with, a simple RTD protein shake with ingredients that anyone can understand. 300mg of caffeine, 12mg nicotine-

• 1:21:59Jordi Hays?

  A pound of creatine.

• 1:22:00John Coogan?

  A pound of creatine, some Adderall XR. Just stuff anyone can understand.

• 1:22:05Jordi Hays?

  Just a pound. That's all we need.

• 1:22:07John Coogan?

  If you're planning your launch of your consumer product, get on Linear. Linear's a purpose-built tool for planning and building products. Meet the system for modern software development. Streamline issues, projects, and product roadmaps. Go to Linear app to get started.

• 1:22:20Jordi Hays?

  Jovian says, I have successfully solved the OpenAI naming problem. And they say they have a screenshot here harder, better, faster, stronger.

• 1:22:30John Coogan?

  I kinda like this.

• 1:22:31Jordi Hays?

  Kinda works.

• 1:22:32John Coogan?

  It's crazy, but it's just crazy enough to work. I do think it's hilarious that there's like chat GPT, GPT-5 thinking mode. And that implies that like the normal version just doesn't think at all, I guess. I do like that it's that I do like the language here where it's harder. It's not just think thinking or not thinking. It's thinking harder, thinking better, faster. And maybe, maybe that's where this will collapse because right now, even in the GPT-5 update, I mean, obviously it's such an improvement over the previous one where you had to know that oh, three was better than four oh, which is deeply, deeply confusing.

• 1:23:09John Coogan?

  But now I'm seeing fast thinking thinks longer for better answers and pro research grade intelligence auto decides how long to think. That's pretty, pretty good. I think they're, I think they're close. I do think over time we will see no, no selection. At least in the main UI, maybe buried somewhere, but overall it seems like the model.

• 1:23:31Jordi Hays?

  It is really funny though, that people went complaining about the complexity of the naming to the same people complaining about not being able to select their own models.

• 1:23:40John Coogan?

  Yeah. Were those the same people or was it like separate cohorts? But there's definitely some, it's the current thing to hate on the.

• 1:23:45Jordi Hays?

  Josha box says AI psychosis psychosis is rampant now.

• 1:23:50John Coogan?

  I think you might have a version of this.

• 1:23:52Jordi Hays?

  Totally. I mean, yeah.

• 1:23:57Jordi Hays?

  I don't know. I think it, I think there's a big difference between seeing something that is chat GPT generated text and being like somewhat frustrated and annoyed that, that somebody's just slopping up the timeline.

• 1:24:09John Coogan?

  Yeah.

• 1:24:09Jordi Hays?

  With a bunch of it's not this, it's that. I don't want to see that.

• 1:24:15John Coogan?

  Yeah, it has been a fascinating story, though.

• 1:24:17Jordi Hays?

  But in general, but in general, there's this.

• 1:24:19John Coogan?

  Show today.

• 1:24:19Jordi Hays?

  Yeah, there's this excitement. People have this like general excitement to try to identify who they think has been one shotted.

• 1:24:27John Coogan?

  Yes, yes, yes.

• 1:24:27Jordi Hays?

  But later today, we're having Keith, Dr. Keith Cicada on. He's a doctor at UCSF, and he has seen a number of patients this year that have that he's identified as suffering from AI psychosis.

• 1:24:44John Coogan?

  It's clearly very real. But at the same time, my takeaway is that it should be solvable pretty, pretty quickly with, you know, if you can decide in the model router, do I need to think really hard and actually help someone with this checkout? You should also be able to say, okay, this person definitely thinks I'm the boyfriend now.

• 1:25:06Jordi Hays?

  Yeah.

• 1:25:07John Coogan?

  It definitely thinks I'm, I'm, you know, God or something, or they think they're God. And going from there just makes makes a ton of sense. Anyway, let me tell you about numeralhq.com. Sales tax on autopilot. Spend less than five minutes per month on sales tax compliance.

• 1:25:22Jordi Hays?

  Benchmark Series A.

• 1:25:24John Coogan?

  And we have our next guest, Alfred Lin from Sequoia Capital.

• 1:25:28Jordi Hays?

  Finally.

• 1:25:29John Coogan?

  The studio. Welcome to.

• 1:25:30Jordi Hays?

  Been looking forward to this.

• 1:25:32John Coogan?

  How you doing, Alfred? Good to meet you.

• 1:25:34Speaker 07

  Doing great. Thank you for having me on the show.

• 1:25:36Jordi Hays?

  Great to see you. Thank you for coming on. This is overdue.

• 1:25:41John Coogan?

  Yeah. Would you mind kicking us off with an introduction on all the different pieces of the Sequoia world that you touch currently? Because I know you're, you're, there, the firm has grown so much. There's a lot that you could be focusing on, but I'd love to ground it in what is current, how you're spending your day currently.

• 1:26:02Speaker 07

  Well, Sequoia has been around for 50 years, and we're, we're still very much focused on every, on venture capital. So we have a seed business, a venture business, a growth equity business, an expansion business, and then we have an overlay fund called the Sequoia Capital Fund. And most of my days are still trying to find the pre-seed, the seed, and Series A founders that are daring enough to start a company and want to change the world. So that's where I focus.

• 1:26:30John Coogan?

  What's happening at the earliest possible stage in the Sequoia portfolio? Like what, what, uh, how, I mean, I feel like if you go back forty, fifty years, you hear these stories about, oh yeah, Sequoia got ten percent of this multi-billion dollar company for a hundred thousand dollars. Uh, obviously the market dynamic have shifted and there's some huge seed rounds happening, but you are still funding people with really small checks at a certain stage. Can you explain how that all works?

• 1:26:57Speaker 07

  Yeah, I like, I like to say that my job is to take small dollars and make them into big dollars.

• 1:27:03John Coogan?

  It's here for time.

• 1:27:04Jordi Hays?

  You don't need to overcomplicate it.

• 1:27:06John Coogan?

  Yeah, don't overcomplicate it.

• 1:27:07Speaker 07

  Yeah, let's not complicate things. You're trying to put small amounts of money to work and you're trying to make sure that it becomes large amounts when the company, uh, be, become successful. And yes, there are large seed rounds, but there are also just lots that's going on. And it's not just AI, there's, there's just a lot of breadth. AI is enabling a lot of things, um, and AI is not the only thing that we invest in. We are all generalists here from consumer to enterprise in robotics and everything you can think of. We're trained as generalists because things move and things change. It's not, it's not just one thing, uh, after another. It's not like we only invested in the internet when the internet was happening and only invested in mobile

• 1:27:50Speaker 07

  and only invested in SaaS when those things were happening. And the same is true now. There's a lot going on and, you know, the, the founders that I really enjoy meeting are two people on an idea. And they wanna, they feel like the world has gotten something wrong, uh, in the world and they wanna go fix it. And they wanna, their legacy will be changing the world and how we live. Uh, just like some of the people, um, uh, I've been fortunate to partner with. And we use that term very, very, um, judiciously at Sequoia. We wanna partner with the, the daring founders who wanna start the company. We don't, we don't think of ourselves as investors. Uh, we don't try to buy low and sell high.

• 1:28:35Speaker 07

  Uh, we really wanna work with a small select set of founders, um, that wanna go all the way. And, you know, the thing that I've learned over time is you can take us two founders in the seed of an idea and in a decade that, that company could be worth one. To $10 billion and in two decades, that could be 10 to 100 billion. And in three decades, that can be 100 billion to a trillion. And we've seen a number of companies that have reached that, including Nvidia, including Apple, including Google. And we're going to try to help the next set of founders do do those things.

• 1:29:15Jordi Hays?

  Going back to something you said earlier, you said you're not just investing in AI. But what does a company look like today? What does a non-AI company that look like today that's coming to you to pitch to pitch you at this sort of idea stage? Because in some way, in some ways, you have to think that if a founder wants to wants to just not think about AI and they're starting a company from the ground up today. It seems like, you know, I'm sure there's some outliers, but it seems like a question that, you know, if you have the blessing and the opportunity to start a company in the year 2025, there's probably some way that AI could be transformative to your business or the market broadly.

• 1:29:58Speaker 07

  Yeah, don't get me wrong. I think all the companies that we work with are using AI and AI tools. That doesn't mean that they're AI native. And you guys were just talking about the AI researchers and the Metis list. There are some companies that don't aren't going to be AI native. They're not going to build a foundation model. They're not going to build a world model. They're going to be building an application. And in some sense, in probably two or three or four years, we're going to call those back to software companies. Those are just new, updated ways of building software companies. And we do believe in a lot of value will be created in the application layer and new applications will be created in this world.

• 1:30:40Speaker 07

  And I think there is a desire to associate all those companies as AI companies, just like, you know, when the web was happening, everybody wanted to be called a web company. But at the end of the day, you're still, you may be a consumer company, you may be um, and a gaming company, you can be a commerce company, you might be using the internet as distribution, and here you might be using AI as a way to improve the way you get things done, but you're not a native AI company.

• 1:31:11Jordi Hays?

  Yeah, so your, your definition of an AI native company is effectively like you have to be hiring like researchers, and I, and I, am I hearing that correctly? Because I think some people describe themselves as AI native because they're just, they feel like they're using the tools to the, to the, to the.

• 1:31:29John Coogan?

  It also just feels like the difference between like AI native company where it really matters is just like what will the financial profile look like? When I think of AI native foundation model company, I think R and D, I think CapEx, maybe they're not building a big data center, but they're at least

• 1:31:46Jordi Hays?

  Spending a lot of money on tokens.

• 1:31:47John Coogan?

  Spending a lot of money on training versus an application layer company. It's going to be much more about the, the, how much does it cost you to generate those tokens, even if they're on a different foundation model? And then how, how much value are you delivering and how much revenue are you generating from the, from your customers? Is that, is that a reasonable framework?

• 1:32:07Speaker 07

  That's, that's a, for me, that's a reasonable framework in the sense that I think there are a lot of companies that are using AI and AI tools to be able to increase productivity. And, but they're, they're building an application, they're building a service, and they're building something that is different than a native AI company.

• 1:32:29John Coogan?

  So.

• 1:32:29Jordi Hays?

  How is your thinking, you know, it feels like this debate has faded a little bit into the background, but over the last five years, how did your thinking evolve on kind of value accrual between the, the model layer or the labs and the sort of application layer? Because in our view, you know, we had a number of folks on from OpenAI last Thursday for the GPT-5 launch, and it felt like, okay, this is a consumer tech company. Like, it really felt like, and they're selling, at least today, subscriptions to their consumer tech product.

• 1:33:05John Coogan?

  Yep.

• 1:33:05Jordi Hays?

  And that is, and the product is the product. The models were, were in many ways with the introduction of the router, taking a little bit more of a backseat.

• 1:33:15Speaker 07

  So I think the where value accrues is a very hard question to answer at the beginning. We have a particular point of view and in throughout history, I think you would see that value accrue like shifts as the sort of development changes like in the early days, you need the infrastructure to be built. And so a lot of value accrues to the infrastructure layer. That's kind of the reason why all the way down to the bottom of the infrastructure layer, Nvidia is a $4 trillion company today. Value is accruing there because everybody needs that chip. Over time, then you have people building on those chips and then value starts accruing to the model layer. Because it model, you gotta build the model for other people to build on top of it.

• 1:33:57Speaker 07

  And over time, hopefully you you build the infrastructure, the systems, the you know, operating system, and then the application. And then the application historically has been where a lot of value accrues in in previous generations of the internet. And it's too early to call that that's where where a lot of value accrue in the future. But if you just look at history, that has been the case.

• 1:34:24John Coogan?

  Can you talk about Sequoia, ARC, and then specifically some of the trends you're seeing in those very early stage companies, how they're building businesses, how the financials change? Because even though I'm sure some of these companies could go out and raise huge rounds and train foundation models, like where is the money going at the early stage for kind of startups that are that are joining the program?

• 1:34:51Speaker 07

  So so ARC is a is a program that we started in 2022. It's a program that we started because we wanted to help our own founders have a common language and to basically leverage the 50 years of learning that Sequoia has had in company building. One of the things that we've noticed over time through many different technology waves is the fundamentals of company building don't really change. You might have to Hire slightly different engineers or slightly different sales people, et cetera, et cetera. But the fundamentals don't really change. The history of technology lowering the cost of creating a company hasn't really changed. The sort of ability to sort of get above the noise because there are a lot more companies being produced.

• 1:35:37Speaker 07

  That hasn't really changed. So, yes, you know, the trend is we're going to probably have fewer people in a company. That has been the case for a long period of time in technology. Is it harder than ever before to get above the noise because, you know, it costs less to start a company? Yes, that's been the trend. And the things that we sort of try to focus on is what is stable over time and the company building aspects. And what we try to do in that program is in a short number of weeks, teach everything that we can to sort of get a company off the ground, especially from the zero to one phase of the company, that you can then take with you to build from one to N.

• 1:36:20Speaker 07

  And that's the company, that's the company building program that I think we're trying to aspire to make sure that we teach in that program.

• 1:36:29John Coogan?

  What does a graduation day or demo day look like? Is it just pitching the Sequoia partnership? Or are you setting up, is it actually, is there some competition and other firms are trying to come in? It feels like, like one of the elegant things of demo day is that, for at least for Y Combinator, that they don't, they, they, they, they sometimes occasionally will feed off of their best companies. But oftentimes, other, other firms can come in and, and snipe some company that's overlooked or something. How, how do you think about companies graduating from ARC?

• 1:37:04Speaker 07

  So, the, the program is a company building program. So that at the end of the program, yes, they pitched the whole partnership as well as, as builders in our community so that we can give them feedback on their next stage of company building. It is not a, a fundraising demo day. And so that's not the objective. The objective is to continue to build the company.

• 1:37:28Jordi Hays?

  When you talk about, you talked about getting above the noise. It's obviously one of the biggest challenges that any company faces. Do you have portfolio companies today where you're general, that have products that are working and getting real customer traction? Where you advise them to actually just be quiet and like try to dominate their, their sub-market as much as possible?

• 1:37:49John Coogan?

  Maybe don't go viral amongst a bunch of people that want to build things and compete with you.

• 1:37:53Jordi Hays?

  Yeah, don't, you know, going viral on X, for example, is a double edged sword. You, you attract a lot of attention, you know, can't great candidates, investors, et cetera. But you're also inviting the entire, an entire world of really smart people to, to come in and compete with you. So I'm curious, you know, how, how you're advising companies that maybe kind of that seed series age stage of, and potentially saying sometimes, hey, you should just like get your first, you know, thousand customers before you really tell people about what you're doing, because you're really on to something.

• 1:38:27Speaker 07

  That, that's a really great question. The question, the sort of what you're talking about is something I think is very thoughtful. And we give different advice for different companies. You're trying to sort of make sure you have a certain product heft before you launch. I think that's something that founders should really consider. Where you're way ahead of your competition before you launch. And if you can accomplish that in a short period of time, you want to do that before you launch. And so that you don't, as to your point, not invite a bunch of competitors into, into the space. And then there are just other companies where you need users and part of the go to market,

• 1:39:09Speaker 07

  part of your product market fit is to get users to bang on the product and to get that feedback. And in those cases, we would tell them, you know, when you have some semblance of an MVP, you should probably launch. And then get the feedback from the customer. And so it depends on the founder and depends on the product and how feature complete you want before you go, go launch. Most founders I've found are perfectionists and so they probably launch a little later than they should. But that's not always the case.

• 1:39:42John Coogan?

  What advice are you giving to college students these days? Or really anyone pre joining Silicon Valley, pre Sequoia, ARK, pre founding?

• 1:39:53Speaker 07

  It's interesting. So to me, the the most interesting thing that I've learned over the years is that being in technology has been a game changer and an equalizer in so many ways. And I'm glad to be talking to you two because you're a techno optimist. And there's a lot of people who are just concerned that these tools are gonna destroy jobs. And at the opposite end, I view, I went to the GPT five hackathon this past weekend, and there are people who've never coded that was produced or was able to do something that was not the like role changing thing, but in twenty four to forty hours, it's like a wow moment for me to see people who've never coded to be able to produce

• 1:40:36Speaker 07

  an application that could do something. And I think it's really important for everybody in college, everybody who's in high school, my son is about to go to high school, to really know how to use some of these tools and let their imaginations run and think about what they can create. Because a lot of things that we're talking about right now are about speed and scaling laws and reasoning and improving all those things. But then, let's use our human, you know, human imagination to improve humanity. And I think allowing everybody on the planet to be able to code when they didn't have

• 1:41:18Speaker 07

  to learn, get a degree in computer science and learn how programming is really powerful. And I think we should embrace that.

• 1:41:26John Coogan?

  Does the, there's the lowering of the barrier to instantiate software increase the value of driving kind of economic value? I'm thinking of that potentially apocryphal story of you selling pizzas in college, but that felt like something less enabled by a technology trend and more just evidence that you saw, you know, the, you saw an arbitrage opportunity. Agency. An agency. And maybe we're in this era where the the next you will be someone who finds a pocket of value. Maybe they instantiate some software, but really they're, they're, they're finding some, some gap in the market and exploiting that and that being like a really high signal versus someone who's just sitting there using chat GPT

• 1:42:10John Coogan?

  to check the boxes on their computer science homework.

• 1:42:13Speaker 07

  Yeah, I don't, I don't, I'm not suggesting people use a tool to just check the box on their computer science homework. I'm suggesting that they, they use it to like do something creative and, and improve humanity. And that's very, very different than, oh, I don't want to do my homework, let me look up the answer.

• 1:42:29John Coogan?

  Yeah.

• 1:42:30Speaker 07

  I think the, the notion is that we are going to increase the amount of capabilities of every human being on the planet. And it's up to us to harness that power to do the incredible things that we've been able to do with lesser powerful technologies in the past. And historically, the more powerful we get something in technology, the more we can do. And the more we can imagine what the world to be like. Uh, and I think that's really, really important.

• 1:43:04John Coogan?

  What do you imagine the world will be like in 20 years? Or like, what is something that you want to be true about the world that isn't necessarily true yet?

• 1:43:16Speaker 07

  Uh, I mean, we, you know, the thing that I, I find very interesting right now is the stuff that I was doing in high school and college that these models can do now, like the fact that the models can win the I M L gold.

• 1:43:31John Coogan?

  Yeah.

• 1:43:31Speaker 07

  It's pretty amazing.

• 1:43:32John Coogan?

  Yeah.

• 1:43:33Speaker 07

  And hopefully one day we can discover novel physics, novel medicine. We can improve our, our, the length of, of our lives in different ways. We can do a lot of things that are accustomed to us. We can be entertained and custom, so that there's a bunch of productivity stuff that we're already doing now. And then there's life improvement stuff, and then there's just fun improvement stuff. I, I think there's just a lot of things that we have not imagined that will be fun in the future using A I. That we, we're like kinda talking to machines and feeling like they're gonna be our companion and maybe be our therapist. And maybe there can be a lot more than that.

• 1:44:10John Coogan?

  Mm-hmm.

• 1:44:11Speaker 07

  And, and I think we will be interacting in a world where, yes, we might be using agents, but we will also just spend a lot of time just truly being human. It, it, the amount of time I can do things today allows me to have more time to spend, to either do more work or to spend more time with family. And I think we're gonna be able to do both.

• 1:44:38Jordi Hays?

  I was gonna ask how you're advising companies, maybe you have been on their boards for a while or see them or invested in them years and years ago, how you're kind of advising them around, you know, the IPO window feels very open today. No one can predict the future, but you know, throughout this year, you went from, okay, it's open to now we have a trade war, maybe, you know, back off to it's very open now. What's your outlook for the next, for the rest of this year and beyond? And how are you kind of advising teams that are gearing up to get into the public markets?

• 1:45:18Speaker 07

  Well, I think great companies can always go public and you have companies that, you know, went public like Instacart that went public when things were slower. There were DoorDash and Airbnb went public right after the pandemic or during the pandemic, right after the heat of it. And I think there are very few times when it's truly, truly closed. There are obviously times when it's much more, much warmer to go public. I think you're in an environment where that is the case. But we generally advise companies, and this has been true historically, this is long, this is when

• 1:46:03Speaker 07

  I was an entrepreneur and listening to Mike Warrens and listening to him about just build a great company and then you will be rewarded, whether it's through raising capital privately, raising capital publicly, being purchased. And the IPO window being open, I think for most of the companies that have gone through an IPO.

• 1:46:31Speaker 07

  It's a big deal, and it is, but then they realize it is a fundraising event and then they have to get back to work. So I would just tell people to stay grounded and build a great company and great, great business.

• 1:46:44Jordi Hays?

  People like Dylan were still, you know, Dylan and the Figma team were shipping on, on the IPO days.

• 1:46:48John Coogan?

  I just shipping, he was answering customer support questions on Twitter.

• 1:46:51Jordi Hays?

  Yeah, so some, some, some groups never stop working.

• 1:46:55John Coogan?

  He certainly embraced that.

• 1:46:57Speaker 07

  And you need to do that because, you know, you, you go public and what's next? I mean, you, you want to serve your customers. Both DoorDash and Airbnb will be, but in December, I think there'll be five years as a public company.

• 1:47:12Jordi Hays?

  Yeah.

• 1:47:13Speaker 07

  I don't think they slowed, they, I don't think they've slowed down since they went public in 2020. And they, everybody still continues to work fairly hard. I mean, some of the companies that I'm advising around the adoption of AI is, I think, many of the companies that we work with, they want it to be like water. Let's use all the tools. Let's not standardize any of them yet because they're changing so fast. One day, one model might be better than the other, that might flip. And using all the tools and being proficient is important. And the other, so there's like proficiency around AI tools, there is collaboration,

• 1:47:55Speaker 07

  getting everybody inside the company to work together to improve something using AI. And then there's trying to find leverage in the business, trying to find areas where you can improve revenue or lower cost or both at the same time.

• 1:48:11John Coogan?

  I have a, I want to talk about the future of like agentic commerce and checking out through, through chat apps. I realize that Sequoia is, that you're tied to Zappos on the commerce side, Google on the ad side, but also the foundation model labs.

• 1:48:29Jordi Hays?

  And the DoorDash is the...

• 1:48:30John Coogan?

  And then also Profound. But, so I don't know exactly how you'll be able to answer this question, but I'm interested to hear how you work through the question of, of, like, what are all the knock on effects of? Of shifting to a world where I go to a chat application and I ask it for a new pair of shoes, for example, and it works through it, knows my size, it knows what I prefer, the different weight distributions, and then it can actually do the full checkout for me. Semi Analysis was talking about how OpenAI is potentially going to come for Google's ad revenue very soon. At the same time, I'm interested to hear how you'd advise a company that is selling a physical good and how they could take advantage of this shift in consumer

• 1:49:14John Coogan?

  behavior, whether there's any sort of threat there, or if it just makes their life easier because they don't, maybe they have to pay a different tax, not the Google tax anymore. I'm just thinking about like, there's so many different knock-on effects from this, like, the first major shift in consumer behavior potentially in the last 20 years. Like, how are you thinking about all the knock-on effects of that?

• 1:49:35Speaker 07

  So, I think it's a very good question. I think that, you know, if I had a crystal ball, my prediction is that it is much less divisive than people imagine it to be.

• 1:49:49John Coogan?

  Yeah.

• 1:49:50Speaker 07

  You could have imagined that Google, because they had the, people started search on Google, that they would be able to take a take on every single transaction. And it turns out that when you're doing search and discovery, it is different, you want a different experience than when you actually want to purchase.

• 1:50:09John Coogan?

  Yeah.

• 1:50:11Speaker 07

  If that's true in the future, then I think it's going to be less divisive than we think. If the only thing that we interact with is your chat interface to the world of, through AI, yeah, then I think it would be very, very difficult for a bunch of other companies to survive. But we don't tend to see that happening. And maybe if it does happen, you have a slight, small take rate, because that's what happens. Like, Apple has an App Store, they have a take rate, but then people still go outside of Apple to complete transactions, because it's not always efficient. If I know exactly what I

• 1:50:54Speaker 07

  want, do I have to go through a chat interface to do it? Maybe there's a different interface. It is incumbent on commerce companies

• 1:51:03Speaker 07

  To make purchasing so simple and to know you so well as well, to make it a fun and interesting experience. And I do think that that can, that I think is what a shopping experience will be, how that will be very different. Because a general application is not going to be very, very specific to shopping. And then there's always different types of shopping. Do I do window shopping? Do I try things on? Those things can be very, very different. Do I, is it a utilian, utilitarian kind of transaction? Do I just want to go complete it? These are things that we wrestled with at Zappos, Amazon wrestled with it. And eventually, Amazon created their own search engine inside of

• 1:51:45Speaker 07

  the Amazon site because it was important to them to not, to have a better commerce search experience than you would get on Google, which was a general search experience. And so I do think there's going to be some level of fragmentation among customer experiences than everything going through one channel.

• 1:52:07John Coogan?

  On the topic of fragmentation, do you think that enterprise AI or business to business AI products will be less monopolistic than consumer? Like, how are you thinking about consumer AI bets at this point? It feels like generally the ship has kind of sailed and there's a lot of winner take all dynamics and compounding value from just being the default and the aggregator. But in B two B, it feels like the narrative of like, oh yeah, the next model release is going to steamroll legal AI. It's like, that doesn't feel like that's happening. There's tons of value to be created. There's tons of pockets of value. And I don't know how you could map this to previous eras if you have,

• 1:52:49John Coogan?

  if you're drawing on any analogies, but I'd love to hear how you're thinking about the, the market dynamics playing out.

• 1:52:55Jordi Hays?

  Yeah, I mean, one, it's like, Surge at one point looked competitive and then if you just. Went offline for a few years and came back. You'd see Google with, you know, what, 90% of the market? And it feels like we could be going in that direction in consumer, but not necessarily in B2B, which also tracks.

• 1:53:15Speaker 07

  Yeah. So how are you thinking about it? So I think overall, I think your observation is correct that when you get consumer right, it has more network effects and more brand effects than in business. And then in business, there is more proprietary data that the businesses are less likely to give up than consumer. I think consumers, we talk about consumer privacy and at the end of the day, most consumers don't seem to think, don't seem to really care about privacy. They give up a lot of information about themselves to a lot of companies. Yep. And, but, but businesses, especially large enterprises, do not do that. And so I agree with you on that. I would just point out that while that's true,

• 1:54:01Speaker 07

  our road to where the final, you know, answer is, is always less obvious than what tracks. Google was not the first search engine. It was probably number 25. I don't, I don't remember, but it wasn't the first one. Yeah. Before Google, there was Yahoo and Yahoo got to a certain size and Yahoo had a bunch of portals that we navigated through the internet, through these, these directories.

• 1:54:30Speaker 07

  And so I don't think it's completely obvious and, and, you know, if it was just obvious, I'd be out of a job. My job is to help the small companies go, but go against the big companies. And I would say, yeah, there's going to be some network effects and some crowning of, of major players. But at the same time, there's always new companies trying to challenge an existing company. And some of them do it extremely well. In, in some sense, why should Amazon, which is a large company, even, even large companies competing with other large companies? Why didn't Amazon have AWS? They weren't really. In the technology space, they're a retail company.

• 1:55:14John Coogan?

  Yeah.

• 1:55:14Speaker 07

  So the answer is always a little bit more complicated. But I love the, I love the push and the thinking that the consolidation is probably more real and consumer than it is in, in enterprise. And I would just point out, Grubhub was a consolidator for a period of time and then DoorDash came on.

• 1:55:33John Coogan?

  I was about to say, you know, it's easy to say like, consumer is very monopolistic until you point out DoorDash and Airbnb, like, these things, these experiences start with search boxes in many ways, but yet they have built entirely different businesses from Google, for example, or the social networks, because they, they brought a different experience to bear and a different component, different business structure that was counter positioned.

• 1:55:58Speaker 07

  Yeah, I mean, it said, we talked about DoorDash, Airbnb, like, there was VRBO before Airbnb. Before Facebook, there was MySpace and FriendFeed and, and a bunch of other companies. And so, uh, the final winner is not, it's generally not the first.

• 1:56:16Jordi Hays?

  Well, there's one question to ask, which is when a company becomes a verb, does, is there, is there any hope left for the competition, right? Google it, let's, let's, let's get a, you know, let's, let's Uber. Like, uh, I'm gonna talk to, you know, different, but, uh, just, you know, I'm gonna chat, I'm gonna go, I'm gonna, let's see what chat thinks, right? Not, not, not a verb, but, um, it feels like at that point, right? Like, the, I, I don't remember, even, even at a time when I was aware of VRBO, it, it wasn't this like dominant, it wasn't a dominant brand, it wasn't, it wasn't really a part of people's lives in the way that Airbnb sort of became.

• 1:56:57John Coogan?

  Yeah.

• 1:56:58Speaker 07

  Yeah, I think you're pointing out that there, there is a long road to get to what eventually is, it's not critical mass. Critical mass can still be, you know, sort of, someone else can still get to critical mass.

• 1:57:11John Coogan?

  Yeah.

• 1:57:11Speaker 07

  When you become a force of nature, a dominant force, where that's where everybody goes. And it is, you, it is something that we talk about all the time as category defining. When you, you define the category and you're the company in that category, then it's very, very hard to stop that.

• 1:57:31John Coogan?

  If you weren't doing tech in an alternate universe, what would you be doing?

• 1:57:35Speaker 07

  I'd be doing tech. Come on, guys. We are so fortunate to live in this tech world.

• 1:57:42John Coogan?

  Yeah.

• 1:57:44John Coogan?

  That's the best possible answer.

• 1:57:45Speaker 07

  It's the, it is.

• 1:57:48Speaker 07

  I'll, I'll tell you, I'll tell you what, I'll answer your question, but I would probably find my way into tech.

• 1:57:53John Coogan?

  Yeah, that's great.

• 1:57:54Speaker 07

  You know, when I was growing up, I thought I was gonna work in the hedge fund industry. And I did go to a PhD program in pricing options and derivatives.

• 1:58:04Speaker 07

  And even then, there is a lot of tech in those businesses. I sit on the board of Citadell Securities and the amount of quantitative researchers that they have, the number of technologists that they're employing, it's just, tech is such a beautiful place to be. And we should all be very, very fortunate to be part of the tech industry.

• 1:58:24Jordi Hays?

  The complaint over the last couple of decades is that our best and brightest were going to do high-frequency trading and working at hedge funds broadly. And the interesting thing that's happening right now is the best labs are identifying the best talent at the hedge funds and just coaching them.

• 1:58:42John Coogan?

  Marchand worked at Jane Street. And, and one of the major, like Matt Mull, just like inference optimizations at a very fundamental level, I think, came out of Jane Street.

• 1:58:53Speaker 07

  Well, I think the smartest people tend to work at, you know, sort of places where they're gonna be challenged intellectually as well as doing something they think is like interesting and novel. And the hedge fund industry had employed a lot of people who were doing something interesting and novel. They pioneered a lot, they put a lot of machine learning into place. That if you were a, not today, AI researcher, but back then, you were probably going to those companies because that's what they put in place. And today, you have a different place to go to. There are foundation model labs, there's, and the large tech companies that are putting that into place.

• 1:59:32Jordi Hays?

  Well, and the tech industry is now set up to properly compensate the top performers, which is also something that hedge funds would do very, very well, but hadn't always been as prevalent as it is today, especially the last few months.

• 1:59:46John Coogan?

  Yeah. Last question, and we'll let you go. I know you're busy. We kept you over by one minute. Obviously, in the finance world, they work very hard. Is work-life balance real?

• 2:00:01Speaker 07

  Well, how about I answer the question in the form that I've figured out, which is work-life integration. We integrate your life and your work together. I talk to my son about the work I do when I come home for dinner. We talk about why the math problem he's doing is interesting because it allows him to do some of the research that will hopefully be still relevant when he is in the job force. And or maybe the AI will take over and that won't be interesting. But these are, I think, work-life integration is a much better answer than work-life balance. It's not like I turn off my work brain when I go home. And it's not like, I'm not, if an important thing happens during the daytime,

• 2:00:44Speaker 07

  it's not like I don't show up for my son if I need to show up for a game or to his parent-teacher conference and things like that. So you just have to find the integration that will allow you to do all the things that you want. And one of the things that we talk about at Sequoia is family first. Like, you can't be in the job and do a good job if you are distracted. And one of the things that we've learned over time is that you just got to, there are a set of things you've got to take care of. You've got to take care of your family, you've got to take care of you, your health. If you want to do this job for a long period of time, any job for a long period of time, you've got to take care of your family.

• 2:01:27Speaker 07

  And then you can come to work with a clear head to do the work that is necessary. And so when things are out of balance, it's not a great thing. So you've just got to find how to integrate everything together. But one clarifying thing for me is you always have time for your priorities. And so just list your priorities and list what you have to get accomplished this week. And if it's the 10th thing, I don't stress about it falling off the things that I try to accomplish in the week.

• 2:02:03Speaker 07

  And that's, that part is freeing. If I got the top three to five things done in a week, But and then I don't do number 11, that's very freeing.

• 2:02:15Jordi Hays?

  Makes sense. Final, final question. Please, Jerry. Cause, cause we're already over and you can answer quickly. How important is it for venture capitalists to remain calm during a market cycle like we're in now? I feel you come across as very calm and grounded. And it's easy when, when deals are happening so quickly to kind of get, get, get caught up in things and make forced decisions and things like that. Uh, but you've been through, you know, multiple of these different, you know, chapters in our industry. And, and, uh, you, you, again, you just come across as, as very calm.

• 2:02:55Speaker 07

  I, I have time, so I'm going to answer this question in multiple parts because I think it's really, really important. Like at Sequoia, we talk about being, um, shock absorbers. And I think Andrew, my partner, Andrew, had been on your show and talked about it as well. I think it's very, very important to be a shock absorber, uh, during times, um, of good and bad. And then also on the other flip side is, uh, we, we, we want to be sparring partners to the founders that we back, the management teams that, uh, we back. And it's important because during nutty times, it's easy to think that you're doing a good job when it's just the valuation going up or, or things like that.

• 2:03:36Speaker 07

  Or you're being validated because lots of people want to work for you because you have a high valuation or you're doing something interesting. It takes a long, long time. The reason why calm is important is it takes a long, long time to build any company. It's happening faster, but most of the companies that we are, we've been in business with, we've been in business for a decade that, you know, then exits and becomes. Has a successful IPO like Figma. And during those times, that journey of 10 years, you're going to go through many ups and downs. And we call those crucible moments. And we have a podcast called Crucible Moments, where it's very, very important to be calm,

• 2:04:19Speaker 07

  to untangle what's going on and to make the right decision. Because many of those decisions, you can't go back and undo them. And the way to make good decisions is to stay and remain calm. And one of the things that hopefully we do for all of our founders is to help them untangle the craziness and to help them make the right decisions during those crucible moments.

• 2:04:46Jordi Hays?

  Very well said. And fantastic suit. Thank you for.

• 2:04:50Speaker 07

  Wore the jacket for you guys because you always have jackets on.

• 2:04:53Jordi Hays?

  Of course.

• 2:04:54John Coogan?

  It looks fantastic. Thank you so much for taking the time. We'll talk to you soon, Alfred.

• 2:04:58Jordi Hays?

  Great to catch up.

• 2:04:58Speaker 07

  Take care.

• 2:04:59Jordi Hays?

  Cheers.

• 2:04:59John Coogan?

  Have a good rest of your day. Let me tell you about fin.ai, the number one AI agent for customer service, number one in performance benchmarks, number one in competitive bake offs, and number one ranking on G2. And there has been a ton of questions in the chat about my hair. I am not coloring it. I don't know what that is about. I think somebody's saying it's a little dry today. I don't know. Maybe, maybe something happened in this. Maybe I didn't use the right product or something. I don't know. I don't really do much to my hair. I just kind of wash it. I put water on it and it's pretty simple. But anyway, thank you for the feedback on my hair. Hopefully it'll be a better hair day tomorrow. If you don't like the hair, if you love the hair, whatever, enjoy it and hang out in the chat.

• 2:05:43John Coogan?

  Anyway, we have our next guest coming into the studio, Dr. Keith Sakata. How are you doing? How would you like to be addressed, by the way?

• 2:05:52Speaker 08

  Yeah, that's good. Thanks, John. Thanks for having me on.

• 2:05:55John Coogan?

  Good to meet you. Would you mind kicking us off with a little bit of introduction on yourself and some of the research that you've been doing, some of the stuff you've been publishing?

• 2:06:02Speaker 08

  Yeah, for sure. So my name is, you know, Dr. Keith Sakata. I'm a psychiatrist and I work at UCSF. And my interests are mostly in the intersection of mental health and technology. I actually love advising startups on how they can actually build products that help people feel better. And I think that's why I'm here today is to talk about where things might be going wrong.

• 2:06:25John Coogan?

  Yeah. So when did this first, like, how did you process the rollout of AI? There was like kind of the pre-chat GPT era. We've talked to the founder of Replica. This idea of like the AI girlfriend or boyfriend has been kind of out there for years, but now it feels like we're in a different era, different time period. Just take me, take me through a little bit of like your journey processing optimism and pessimism around these AI models.

• 2:06:56Speaker 08

  Yeah, I'll just start by saying I think that AI is not good or bad. I think it's probably a net, you know, on the, on the grand scale of things, it's a net benefit for humanity to have AI. I think where things can kind of come into my world a little bit is like there's a long tail distributions of possible failure modes for some of these products. And I think when I try to think about AI chatbots, how quickly things are moving, I try to look back at previous technologies. So social media is something that we're still learning about in mental health care. And this is one of my frustrations with my field is that sometimes it's too slow to kind of like understand like, what are the effects of kids using social media? Like, what are the effects of kids using AI chatbots?

• 2:07:41Speaker 08

  And we're starting to get some of that data now. What I'm worried about is things are moving so fast now. Like, there's a new product every season. It's going to be perhaps every month now. And even looking at how people are reacting from 4.0 changing to 5, it's kind of interesting to see psychologically what's going on. It's just harder to catch up from, from the research perspective. So I do think that when AI is used correctly, it can actually be really healthy for some of my patients. What I worry about is, you know, when you have general purpose models that people are using for many different reasons, I think 30% of people use Claude for emotional support. That's where things kind of get tricky and that's where I kind of get more interested. How are these users using it?

• 2:08:26Speaker 08

  What's actually happening neurobiologically in their head? And how can we actually build tools that flag those instances? Get people the support they need or even actually help them build skills or build more like real life connections with people.

• 2:08:42Jordi Hays?

  We were talking about yesterday around people's concerns with social media that it was actually maybe antisocial in some ways or isolating or radicalizing. And I still feel like we as a society broadly don't fully understand the impacts of social media. Like I wish I could have A B tested myself. Would I be happier today if I had never used, if I hadn't used X for two hours a day for my entire adult life? I don't know, never will know. But the, it feels like many of the sort of general concerns that people have had about

• 2:09:20Jordi Hays?

  social media, you should potentially apply those same set of concerns to L L Ms in that even more so than social media, they can be isolating in that instead of somebody going on an online forum or sort of isolating themselves from the real world, they can be, you know, 7,000 prompts deep with an L L M, you know, be having their delusions of grandeur, you know, consistently reinforced or, you know, sort of losing touch with, with reality. And I think the, I think people should, I think people, you know, in Silicon Valley have like really woken up to the sort of, I think the, the AI safety had been broadly

• 2:10:04Jordi Hays?

  focused on like AI doom scenarios.

• 2:10:08John Coogan?

  Nuclear weapons, paper clipping, everyone. Like the really, really crazy stuff.

• 2:10:12Jordi Hays?

  And less focused on people's individual relationships with AI and the, and the potential downsides.

• 2:10:21Jordi Hays?

  And edge cases and the long tail like you described. So yeah, walk us through maybe even just the last year in terms of how quickly people have ramped. We now have hundreds of millions of people that are that are using AI, these models weekly. Some people are spending hours and hours and hours a day talking with the models. So what is the path where AI that you've seen where AI starts to become really unhealthy and potentially people are drifting into, you know, real psychosis?

• 2:10:54Speaker 08

  Yeah, great question. And I agree for most of your points that you made there. I use AI all the time. I think it's at work. It's great. You get to send emails better. You can draft things up really quickly. My thoughts change when you're starting to look at AI as maybe something sentient, or you're using it for an emotional coping mechanism. That's kind of where we kind of go into shadier gray territory. In my post, I specifically highlighted hospitalizations because I think that's a really good objective metric for trying to understand.

• 2:11:31Jordi Hays?

  That's a crisis.

• 2:11:32Speaker 08

  Say again?

• 2:11:33Jordi Hays?

  That's like a real crisis. If somebody's hospitalized for their mental health, it's reached a point where either they themselves or friends and family have decided that, you know, we're not going to solve this by just turning off the app.

• 2:11:46Speaker 08

  Exactly. And it just kind of gives you stronger data than saying like, this is what the what a flavor of the vibe that I'm seeing in the clinic. When you when someone notices that you're having such a crisis, your friends, your family think that you need to go to the hospital, that's where things can get serious. And that's where like, people like me, like we try to get them recovered and back into their normal daily routine. So.

• 2:12:11Jordi Hays?

  And you said there was 12 people this year that you're aware of being hospitalized.

• 2:12:18Speaker 08

  That's right. So that's

• 2:12:19Jordi Hays?

  Within, within, within your guys' hospital system.

• 2:12:22John Coogan?

  Yeah. What, walk me through like what, what's actually happening there? How did you, how is, uh, how is, how are AI models like fitting into that journey to the ultimate hospitalization? Like, I know you probably can't give too specific, but if you can abstract it and kind of walk me through like, what does the downside scenario actually look like here?

• 2:12:43Speaker 08

  Totally. So, um, for context, I work in the hospitals sometimes and those 12 patients that I'm referencing are the ones that I have seen. That's not to say that other people have seen this. And I think there are some case reports in the country of this thing happening. But I don't think that AI is actually causing psychosis. I think that this is something where, uh, it can actually just supercharge your vulnerabilities and psychosis really thrives when reality stops pushing back. And AI just kind of softens that wall for some people. So for example, for some of the people that I have worked with, AI was not at the, not always the thing that triggered it. There was a, there was a vulnerability of either sleep loss. Maybe there was like substance or drug use that had happened.

• 2:13:29Speaker 08

  They lost a job and then AI came in the wrong place, wrong time and it either accelerated that process or augmented its severity because you do end up in like this negative feedback loop or with this feedback loop with the AI and it can just make your delusions stick a little bit more, uh, strongly. And to go back, like AI psychosis is not a clinical term. I think we don't have words for it yet, but psychosis is well studied. It's the presence of two or three things, either delusions, so false fixed beliefs, disordered thinking or behaviors. So someone's talking to you, they don't, you don't understand what they're trying to say or communicate. And then hallucinations, so visual hallucinations or auditory hallucinations.

• 2:14:12Speaker 08

  And psychosis is like a symptom. It's not actually a diagnosis. So just like a fever or pain can be a sign of like an infection or cancer. Psychosis kind of just tells you there's something wrong in the brain where it's not computing correctly. And, um, there are many different things that can cause psychosis.

• 2:14:32John Coogan?

  Yeah, I think about the, I mean, there's so many interesting examples, like Instagram went through that, that kind of like internal report that something like a third of young women who are using it were seeing like maybe body dysmorphia issues and, and it's still, the odd takeaway from that was that it seemed like maybe two thirds were improved and feeling happier after using Instagram. So it was still having a net good, but that's not enough. You need to reduce the thirds not having a good experience to zero. How are you thinking about?

• 2:15:04Jordi Hays?

  Yeah, and I guess, I think concern that we've discussed on the show before is everybody in tech has heard stories of people like, you know, some executive going off and doing ayahuasca, coming back a totally different person and experiencing like, you know, maybe some of the symptoms of, of, or, or shared set of experiences like you just described. The concern with L L Ms is they are instantly accessible in the App Store and somebody can start using them without anyone else in their life being aware of it. Whereas ayahuasca, somebody has to make like a very conscious decision that like, I'm going to get in a

• 2:15:44Jordi Hays?

  plane and fly and like leave my home and go into the jungle and visit the demon. And, you know, meanwhile, you open up the App Store and there's 10 different things recommending you download various AI models. And so I think the broader concern here should be, we need to figure out like, like, you know, again, I would be, I would be probably more concerned if, if hundreds of millions of people, I would be very concerned if hundreds of millions of people just immediately started ramping up, you know, psychedelic drug usage or ayahuasca. And I'm sure you'd experience many of the same type of inflows to clinics or hospitals for the same set of kind of conditions.

• 2:16:28Speaker 08

  Yeah, I I I think that, I mean, and we're doing research on those things, too. Like, we're we're trying to understand how ketamine or psychedelics actually help rewire your brain through neuroplasticity. It's always, it always starts with a hypothesis and a question like, what are these things doing for each person? Like, there's different types of people who benefit from those things. There are different types of people who don't benefit from those things. And I think the way that I'm looking at AI is that it it just really makes sense to think very carefully about where things might be go wrong, at least early on, because the three things that AI brings is it's available, it's 24/7,

• 2:17:08Speaker 08

  highly accessible, you're not going on a plane, it's cheap, it's cheaper than a therapist, it's cheaper than, you know, going to the hospital. And then it validates like crazy. And so that that validation, as you extend that context window and you and the the more hallucinations might be occurring in that chat room, that's where you kind of get into that feedback loop and and things can kind of go awry.

• 2:17:31Jordi Hays?

  From what you've seen, what should different application layer companies or or labs be trying to do to avoid some of these extreme cases?

• 2:17:44Speaker 08

  Yeah, that's a good question. I'll just use like an example of a startup that I'm advising, Sunflower Sober. They're trying to solve addiction and using AI to get people off of their addiction into sobriety. And what I have tried to help them as a clinical advisor is to really think about baking and safety and psychology at this in front. So knowing who your user is, knowing why they're coming to your app, and then designing the app or the AI to anticipate where things might go wrong. So if someone does come with like a red flag, like maybe they're having thoughts of Drinking or you know thoughts of hurting themselves, it flags that and can then

• 2:18:26Speaker 08

  shunt them in a direction that's more helpful. So Sunflower uh gives them access to therapists. Also, I think the call to action for each user users should guide them towards pro-social behaviors. So instead of isolating yourself where you and the AI can kind of get stuck in this loop. Teaching them skills, teaching them how to talk to people, teaching them how to build healthy relationships. If AI can supercharge that, then I I consider that pretty healthy um in in my field of work. So I I think that in those lines, really thinking about how to make your users

• 2:19:03Speaker 08

  get the goals that they want. So in in Sunflower's case, sobriety. It's harder for general purpose models because people are coming to it for many different reasons. It's super helpful in so many different ways, but if it's emotional coping, I think that that can that can go di- different ways for many different people.

• 2:19:21Jordi Hays?

  Yeah, I remember somebody posted a screenshot, who knows if it was doctored, but they were talking with like the the model, I think it suggested at one point that the user should do uh maybe just do a little bit of crack. It's like uh and again, probably a hallucination or or doctored, but uh but yeah, that just like reinforcing function is just uh when compounded is just the the potential.

• 2:19:46John Coogan?

  Yeah, it is interesting. We I mean, we saw a lot of the like precursors to I I feel like they were precursors. Maybe it was just the way the news cycle broke, but there was like Glazgate where everyone was worried about chat GPT being too aligned, too too reinforcing of whatever you say. I remember Jordy asked chat GPT, am I goaded? And it said, you're definitely in the conversation. And it's like, what does that even mean? It's just agreeing with you because that's what makes a better consumer product. And then and then like several months later, it seemed like there were other people asking similar questions and believing the answers instead of just laughing at them. And so there's a little bit of uh yeah, I I think there's some education about understanding that

• 2:20:29John Coogan?

  you're not actually talking to a person on the other side of the screen. It really is just. You know, the the the number predictor, the the weights in the model you're talking to a server. Don't try and anthropomorphize it too much. There's probably a little bit of a red flag when people stop referring to it as the generative pre-training transformer and give it some nickname like it's Steve now. It's like, okay, well, like, should you be naming me? Like, I am just a computer. But I I'm I'm pretty optimistic that the that the Foundation Model Labs will be able to to run a kind of like a reality check on most of these.

• 2:21:05Jordi Hays?

  A solution for technology to technology is more technology.

• 2:21:08John Coogan?

  I I I believe that it's possible to to to look at, okay, there's someone who's 7,000 prompts deep. They seem to be having a very bizarre conversation and we've had another LLM look at that and said, okay, this is this is getting kind of funky. Maybe we should step in and reality check them and say, okay, hey, we're we're role playing, right? We're not, we're not, we don't actually believe that we've solved quantum gravity, for example.

• 2:21:32Speaker 08

  Yeah, and that and that's that's the trajectory of every technology that that comes into humanity, like cars, for example. That's why we have seatbelts. That's why we don't drink and drive. We learn what these failure modes are. Sometimes it takes a while, but then we adapt, we build new technologies, we institute kind of societal expectations of what it's like to to drive a car. Same thing for AI, in in my opinion.

• 2:21:54John Coogan?

  Yeah. Are there any other recommendations that you'd give to people who either feel like they might be vulnerable to going down some negative path with AI, or they have a friend or family member who might be going down a negative path with AI?

• 2:22:13Speaker 08

  Yeah, definitely. For now, I think a human in the loop is the most important thing. So, you know, our relationships are like the immune system of our mental health. They make us feel better, but then they also are able to intervene when something's going wrong. So if you or your family member feels like something is going wrong, maybe there are some weird thoughts that are coming out, maybe some paranoia. If if there's a safety issue, just call 911 or 988, get help. But also just know that having more people in your lives, getting that person connected to their relationships, getting a human in between them and the AI so that you can kind of create a different feedback loop is going to be super important, at least at this stage. I don't think we're at the point where you're going to have an AI therapist yet, but who knows?

• 2:22:59John Coogan?

  Yeah.

• 2:22:59Jordi Hays?

  Well, people are certainly using them that way.

• 2:23:01John Coogan?

  I don't know if I'm highly disagreeable, but I certainly love being around highly disagreeable people.

• 2:23:07Jordi Hays?

  It's the best.

• 2:23:07John Coogan?

  And so it's the best. I love when someone pushes it back on me. So I felt particularly resilient to this particular vector of chaos on the internet, but you know, certainly hoping that

• 2:23:20Jordi Hays?

  I don't think you have.

• 2:23:21John Coogan?

  Anyone who's, you don't think I have?

• 2:23:22Jordi Hays?

  No, I'm kidding. Awesome. Thanks for joining. Keep us posted on everything. I think it's important

• 2:23:29John Coogan?

  Keep up the good work.

• 2:23:30Jordi Hays?

  For people with real clinical experience to be on the timeline contributing while all these products develop. So, thank you. Totally agree. Thanks, Dory. Thanks.

• 2:23:42John Coogan?

  We'll talk to you soon. And we will tell you about 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.

• 2:23:51Jordi Hays?

  attio.com.

• 2:23:53John Coogan?

  And we have our next guest, Talia Goldberg from Bessemer Venture Partners. Coming into the studio.

• 2:23:58Jordi Hays?

  What's happening?

• 2:23:59John Coogan?

  Welcome to the stream. How you doing?

• 2:24:00Jordi Hays?

  Welcome to the show.

• 2:24:01Speaker 09

  Thanks for having me. Great to be here.

• 2:24:04John Coogan?

  Why don't you kick us off with a little bit of introduction, yourself, some of the companies that you've invested in, your career position at Bessemer, and then we can go into the report that dropped today.

• 2:24:13Speaker 09

  Awesome. So it's great to be here. I'm a partner at Bessemer. I'm based in our San Francisco office. I've been at the firm for a little over 10 years, which is virtually all or most of my professional experience. And I'm fortunate to be involved with companies like Perplexity, Fall, Deepell, Surface Titan, and a whole bunch of others.

• 2:24:35John Coogan?

  How did you get into venture?

• 2:24:37Speaker 09

  I got into venture really early in my professional life. I got into venture in college. Actually, First Round Capital started this thing Dorm Room Fund.

• 2:24:47John Coogan?

  Oh, yeah.

• 2:24:48Jordi Hays?

  Yep.

• 2:24:48Speaker 09

  Which I helped found with them. It started in Philly. I went to Penn. Crazy enough, First Round's probably like the only VC that had an office in Philly. I don't know why, but they did. And so they started it there.

• 2:25:01John Coogan?

  Well, it's the robotics from, isn't it like Carnegie Mellon's out there or something?

• 2:25:05Speaker 09

  Yeah, but not in Philly. That's in like Pittsburgh.

• 2:25:07John Coogan?

  Yeah, I guess. So you gotta, I don't know, it's a foothold.

• 2:25:09Jordi Hays?

  Bunch of peas.

• 2:25:11John Coogan?

  Get them all confused. Anyway, take us through the state of AI. Is artificial intelligence good?

• 2:25:18Speaker 09

  It's a thing. Is it good? Here, it's happening. You know, it's funny. So in, um, in 2015, not long after I joined Bessemer, the firm started this report called the state of the cloud and it became a very popular report that dropped every year on the cloud ecosystem. And so 10 years later, we've been doing it every year and it really morphed this year to the state of AI. And we were debating internally, like, should it be the state of the cloud? Like, should we continue with it this way? Should it be the state of AI? What's the, how do you even define what's AI? What's SaaS? Like, what, what, what does that boundary look like? But the reality is the center of gravity has moved. Um, and cloud may be the delivery surface for AI, but all the activity

• 2:26:03Speaker 09

  is there. Markets are being created and rebuilt. Um, and so this year we released the state of AI. Um, and as part of that, we released some new benchmarks as well that looked at hundreds of companies, probably more like, you know, thousand plus companies across the Bessemer ecosystem and the broader industry to look at what the new good, better, best looks like, how different business models are changing. Um, and markets are shifting. So that's the state of the cloud.

• 2:26:31John Coogan?

  Explain, yeah, explain the difference between the supernovas and the shooting stars. I like that analogy. Um, it, and it was something that I think people have been feeling. Um, but, uh, no one had really coined a phrase around it. And I think it'll be useful language going forward, but break that down for us.

• 2:26:48Speaker 09

  Yeah. So the, the supernovas are really these

• 2:26:53Speaker 09

  seemingly out of nowhere, amazing growth stories that you hear about and you see on X and Twitter and you're like, holy shit, is this real? And it turns out like it is real. It's kind of mind blowing. Um, um, of this select kind of like top percentile of AI companies that have just totally accelerated and compressed growth into a very short period of time. Um, and they look very different in a lot of different ways, different business models, different gross margin profiles, different retention profiles. Uh, but just to put, um, a comparison, on average, the top cloud companies, um, of this like last generation of cloud and SaaS.

• 2:27:31Speaker 09

  Took about six to seven years in the current cohort to get to 100 million of ARR. And that was considered and is considered like very good, if not great. And then this new cohort is here and they're like, one and a half years, we're there. And they're getting to 100 million and it's real and it's not just one, there's like multiple and many data points. And so we're seeing it at a shocking pace. The top percentile are getting there in about one and a half years and the top decile in about four years. There are some trade offs, so gross margins look different. In the report, there's like a little asterisk by the supernova, which I find very funny, which is like, actually, a lot of these companies are

• 2:28:11John Coogan?

  Negative gross margin, yeah, I knew you were gonna say that.

• 2:28:16Speaker 09

  Those accounting rules aside, like how we all think of gross margins being quite different. And so not all revenue is created equal, but nonetheless, the adoption is just astounding.

• 2:28:27John Coogan?

  Yeah, so talk to me about the difference in underwriting an investment in a supernova versus a shooting star. I imagine if you're investing in a supernova, you're excited about the growth, but you have to have a pretty firm view on the gross margin profile, the decrease in inference cost over time, something like that. Like what questions are you asking when you're looking at a supernova company versus a shooting star company?

• 2:28:51Speaker 09

  Yeah, that's absolutely right. I think the two things that we talk a lot about, there's one, the gross margin profile, and then the second is revenue durability. I'll hit on both, on the gross margin profile, it's funny, if you had asked me two years ago, I was like, hey, anyone that has like gross margins that are negative today, if you just look at the cost of the models over the past, you know, year, two years, and you play that out, like it's 100x cheaper to run a model of constant quality today than it was, you know, a year and a half ago. I think those numbers are like roughly accurate. So it's wildly different. And yet, when I look in retrospect at our companies, it's not like their margins have changed to be suddenly like 90%. So I'm like, oh my gosh, what's happened?

• 2:29:35Speaker 09

  And the reality is that everyone is doing things that require a lot more compute. And to keep up with the status quo requires like the next best models that come out, the reasoning models that are more expensive. We're having queries that Take a lot longer, that do a lot more complicated work and complex outputs. And so the margins have improved by and large, and they do improve with scale. So we are seeing that, but not nearly at the rate of model advances. So I think we still feel quite optimistic about the potential for margin expansion. And in fact, we see it happening, but it's not as dramatic as one might have hoped.

• 2:30:14John Coogan?

  Are you plateau pelt? And should we assume that inference costs will decline with Moore's law going forward? Because I feel like everyone's been saying like, oh, no, we're not just going to get 2X more efficient over the next 18 months like Moore's law would imply. But we're going to have Asics and Cerberus, and we're going to bake it onto a chip. And we're going to get this crazy algorithmic enhancement and inference cost is going to drop by 100X. And it feels like we might be at this frontier where maybe we're more on what's happening at TSMC is what will define like lower costs than just like one weird trick.

• 2:30:53Jordi Hays?

  Well, and the other important thing is, you know, the labs have been focusing on raw intelligence versus efficiency. Chinese labs have been more focused on efficiency broadly, and they've had breakthroughs. And so if we've reached a potential plateau and just intelligence,

• 2:31:10John Coogan?

  Now it's time to reap the reward.

• 2:31:12Jordi Hays?

  It's an opportunity to focus on efficiency.

• 2:31:14John Coogan?

  Yeah, but how do you think about it?

• 2:31:16Speaker 09

  Yeah, like the harder problem to solve is doing the intelligence and the complex thing. And so I feel like when all the energy starts to shift to efficiency, it's sort of a sad moment. So I'll be sad if that's what happens.

• 2:31:27John Coogan?

  Not for the public markets investors, though. They want earnings.

• 2:31:30Speaker 09

  I know. Well, you know.

• 2:31:32Jordi Hays?

  Well, and I think a lot of the darlings of the last couple of years need that efficiency because they can't keep selling, you know, dollars for a cent or.

• 2:31:43John Coogan?

  On the shooting star topic, you have this revenue ramp, year one, 3 million, year two, 12 million, then 40, then 103. How can you be an AI company if you started four years ago? I thought AI was invented two years ago.

• 2:31:56Speaker 09

  Yeah, so that benchmark is really what I think of as like the new generation of SaaS companies, some of which may be using AI tools and AI features and functionality, but are not necessarily like the true AI native companies. So I think this is what it takes to be like a really good best in class SaaS company today.

• 2:32:15Speaker 09

  And and we'll see how that shifts. But I just want to say one thing on this last point of efficiency versus compute costs and and intelligence is that I think there's just two curves that are counterbalancing each other. One is like efficiency. Sure, there's going to be a lot of investment in improving the efficiency, the potential for for each token. But the flip is that we still have what we see happening and the reason that gross margins haven't expanded as much as we hope is that the usage and the complexity of tasks is still is still growing. And if you look at just a category, let's just take video for a moment. Like, I think 2026 is going to be a major breakthrough year for a lot of these video models that are just reaching

• 2:32:59Speaker 09

  starting to reach a level of quality that makes them actually like useful. Something like 70% of the internet is video. It's crazy, internet traffic. And the when when generating video becomes easier and a lot of video is generated, not rendered, suddenly you're going to have enormous demands on compute. And we actually really do need that efficiency because video is really expensive and and complicated. So I think you're still going to see a lot of spend, even if the efficiency per token.

• 2:33:28John Coogan?

  I mean, if Google can't give me more than like four VO3 queries per day for $500 a month, like clearly, like, the GPUs really are on fire.

• 2:33:39Jordi Hays?

  I wanted to I wanted to talk about one of the predictions in here, and I know and I know you guys worked on this collectively. But prediction one, the browser will emerge as the dominant interface for agentic AI. And we've been covering the new browser wars. Obviously, you have Dia from the browser company, perplexities, Comet, and then perplexity was in the news yesterday for their offer. But in some ways, it feels like ChatGPT and like I'm assuming everyone's expecting OpenAI to launch a browser. But at the same time, it feels like ChatGPT and and other products have really replaced so much browser activity.

• 2:34:21Jordi Hays?

  And so in some ways, it's like OpenAI is already competing as a web browser, even though it doesn't look like.

• 2:34:29John Coogan?

  It can literally browse the web for you.

• 2:34:30Jordi Hays?

  And it can, yeah, it can.

• 2:34:31John Coogan?

  It just instantiates it in text.

• 2:34:33Jordi Hays?

  An agentic web web browser, it's just pulling that information back versus like taking you on that on that journey. So curious for you to kind of unpack that a little bit more.

• 2:34:45Speaker 09

  I started using Comet a few months ago and it's perplexities Comet has like totally replaced my Chrome experience. Um, and it completely opened my eyes to what where I think the browser, I think opening I must launch a browser. I don't think it's just going to be in chat GPT. Um, I think they will, uh, and I think it's going to be a very important surface area because using Comet has transformed my workflows and shown me, um, for a few reasons that it's a much better experience, um, to end the first product that's really infused AI so naturally in my workflows. Um, when you're just out there in the web, in your email, in your Salesforce, if you're

• 2:35:27Speaker 09

  on CRM, um, if you're shopping and otherwise, to have an agent that sees everything, that has all of that context for everything that you're doing in the browser, which is essentially like an operating system now and can pull all of that information in creates a far more personalized and effective experience than when it's totally siloed, which is the status quo today in chat GPT. Sure, it can go out and do things, but it doesn't actually have access, um, and that context across everything you've been doing. You know, when I spent, I don't know, 10, 12 hours a day sitting in front of a screen. So it's quite different. And if you believe context is key to performance, which I do and to creating a great AI experience, I think you have to own the browser.

• 2:36:08John Coogan?

  Makes sense. Anything else, Jordi?

• 2:36:11Jordi Hays?

  Uh, any, I, I, I wanted to dive into the AI native social media giant. We had, uh, the founder of Pika on yesterday, which is somewhere in between a creative tool and trying to build social features as well. I would be, uh, very excited about a net new social platform. I, I think there, I, I agree with you guys. There's an opportunity. I think people on traditional social media today are a bit frustrated, like seeing what they think might be AI generated content and they're not quite sure. And so potentially creating a new space that, that people, as, as all the models get better and, uh, I, I

• 2:36:53Jordi Hays?

  can imagine, uh, and, uh, all that content will go on legacy social media platforms, but I would be excited about a, a place that was really a home for it. What are you hoping to see there out of, you know, kind of in the next year?

• 2:37:05Speaker 09

  I'd be excited to see a new social media that's totally built on new AI native thinking and and content. There in the old world or in the current world, we think of bots as bad, like bots bad, humans good. I think there will be a company that totally shifts that and can maybe even crack the chicken and the egg problem by using bots to fill the, you know, empty room. A company I was most excited about for a while was Character in this world because it really felt like they had sort of a chance to be this, you know, very different way of actually interacting with AI in a, in a more social experience. Obviously, they didn't fully get to see that through, but I still think there's a big opportunity there.

• 2:37:48Jordi Hays?

  Awesome. Well, we are way over.

• 2:37:49John Coogan?

  It'll be a knockout, drag out fight. I think every social media legacy CEO is taking AI very seriously. So we'll see how it plays out, but it'll be fun to watch. Thank you so much for joining the show.

• 2:37:59Jordi Hays?

  Thanks for joining.

• 2:38:00John Coogan?

  We'll talk to you soon.

• 2:38:01Jordi Hays?

  Cheers.

• 2:38:01John Coogan?

  Bye. Up next, we have Dave from Upstart. Do you know what?

• 2:38:05Jordi Hays?

  Do you know what Upstart is, John?

• 2:38:07John Coogan?

  What, what, what is Upstart?

• 2:38:08Jordi Hays?

  I can't hear you.

• 2:38:09John Coogan?

  What, what, uh, sorry, there, there seems to be an air. Well, we'll hear it from Dave directly. Welcome to the stream. How are you doing?

• 2:38:18Speaker 04

  Hey, good to be here, guys.

• 2:38:19Jordi Hays?

  Sorry to keep you waiting. It's great to see you.

• 2:38:21John Coogan?

  What does Upstart do? Everyone's been asking.

• 2:38:24Jordi Hays?

  People want to know.

• 2:38:25Speaker 04

  What do we do? It's a great question. We, uh, we are a lending platform.

• 2:38:30John Coogan?

  Yes.

• 2:38:31Speaker 04

  Apply AI and machine learning to consumer lending and we operate in the form of a marketplace where we have consumers that we market to on one side and all sorts of banks and credit unions and private credit and all sorts of sources of capital on the other. And the whole basic premise of the business is to apply AI to the foundational notion of, of making consumer credit work, both in terms of origination, servicing, et cetera.

• 2:38:57John Coogan?

  So, yeah, what, what in the, I mean, when, when most people today say AI, they mean large language models, they mean post chat GPT, but obviously you've been in the business for a long time and machine learning has been a relevant technology, pre transformer based large language model. So how is AI in the modern context of like the large language model, the generative AI context? How is that changing your business and, uh, or, or is it more of like a sustaining technology from you, for, for you as opposed to like upending everything that you do?

• 2:39:32Speaker 04

  Uh, well, you know, I think AI in many forms and LLMs and sort of that sort of generational notion of AI obviously has grabbed a lot of attention, but when you think about, you know, high-frequency trading, genomics, uh, medical imaging, autonomous driving, these are all like forms of AI that you wouldn't, they're not language-based, they're not LLMs, but they are, of course, changing things pretty rapidly. So I think, you know, maybe the big question is, is there a unifying future where all this comes together into some form of, you know, AGI, but regardless of whether that is true or not, we are building something that's different. It's foundational in nature, meaning all the data on our platform is created by our platform, which is, you know, very different than how LLMs work.

• 2:40:17Speaker 04

  Um, but I would say the commonality is that, look, there's just enormous win that machine learning and AI can bring to any particular task at hand. In our case, it's making a consumer loan of many forms much, much better, and that means like zero process, perfect pricing, works for the lender, works for the borrower. And, uh, you know, we started, we were founded, you know, 13 years ago. We didn't really use the term machine learning or AI until 2017, when we kind of felt like this, what we were building was sophisticated enough to warrant that name. But, you know, it was all under the covers, you know, and no one thought much about it until, you know, ChatGPT in November 22, I guess it was.

• 2:41:00John Coogan?

  Now it's hot. Overnight success, 13 years in business, loves it.

• 2:41:05Jordi Hays?

  Yeah, I imagine as you've seen the advances over the last couple of years, every time there's a new model release or even, even a vendor that's saying, we're going to help you like better process PDFs, I imagine that that's exciting to you because you guys have done the heavy lifting to like build the supply and demand. And so as new technology emerges, you can just help, uh, you know, make You know, make that process more and more efficient. How much like, what's your decision making process around? You know, whether you guys want to build something in-house, which I'm sure you were forced to do a lot more. Maybe pre 2020 to now, when there's a bunch of new infrastructure providers that you guys can leverage.

• 2:41:48Speaker 04

  Yes, it's a great question. I mean, we've always built everything in-house. When something looks pretty obviously commodity like and that it's on top of L L M's. So exactly what you mentioned, extracting information from a document, not just kind of OCR, but actually understanding the context of that information in a way that you can take all this human effort out. Now, that's something that honestly is very commodity like, meaning the prices we'd pay aren't much different than we would pay if we built it on top of one of the L L M's. So we're always like looking for things where we, if we can ride someone else's cost curve on some commodity, that's great. We are definitely trying to build a larger picture.

• 2:42:30Speaker 04

  You know, the sort of end game for us is if you can imagine 100% of Americans are permanently underwritten. They can have any form of credit at the very best and guaranteed best possible rate in a moment with no process whatsoever. So anything that sort of gets us closer to that quickly. And there's definitely, you know, business models evolving on top of L L M's that I don't, you know, it's not my problem to figure out whether they're sustainable over time. All I know is like, okay, if you want to charge me an extra 15 cents, you know, that's great. And take care of all these logistical problems of maintaining that particular specific small model like the kind that you referenced.

• 2:43:11John Coogan?

  How are you thinking about the top of funnel evolution? We were talking earlier in the show about Google versus Chat G P T, the G P T five launch and the model router. And it feels like in the future, you might be able to go to Chat G P T and say, I need a loan. And you're probably going to be there. Are you thinking M C P servers? Are you thinking about S E O in L L M foundation models? Like, how are you thinking about the changing landscape on the top of funnel?

• 2:43:39Speaker 04

  Yeah, you know, it's a great question. I was eight years at Google before I founded the company and started. I think there's a lot of history and knowledge there. And I just say to our team, like, look, at some point, Google or Apple or maybe Meta, one or the other is going to come to us and they're going to say. We want our agents to be able to apply for loans and we don't want you blocking it or whatever. How do you feel about that? And I've said to our team, you know, I'd rather we do that before they do that. So, you know, maybe the question is as these agents evolve as, as, as true agents for the consumer, you know, and I'm super curious, I don't necessarily know the answer. Will there be three or four of them from the, from the giants out there? Or will there be plugins to those to handle much more domain specific tasks or things?

• 2:44:22Speaker 04

  I don't know how that will evolve, but I do believe it's without question. You're going to have somebody that will do that on your behalf. It will get the best possible outcome for you. Hopefully it will also help you make better decisions, all right? Not, not just go through the, the mechanics of applying for a loan, but help you really understand like what's the best product for you? Should I even be taking out a loan? If so, what, what other choices could I make? So that kind of stuff, we, we are working on for sure. We could just think of as the sort of agentic part of this. Uh, and we would rather be, uh, we'd rather be applying that to others than having it applied to us for sure.

• 2:44:57John Coogan?

  Of course. Uh, last question from me. Um, uh, obviously you see a lot of consumer economic data. How are you feeling about the health of the American consumer right now?

• 2:45:10Speaker 04

  Yeah, I mean, we watch this a lot. We, we've built a, an index to sort of track it. We call the Upstart Macro Index, which is really about like the health of the American consumer and how that's impacting credit performance. So basically what you see across all forms of credit from cards, student loans, you know, auto loans, mortgages is highest default rates that they've seen in a very long time since pre, prior to COVID. So the consumer has been stressed and is stressed and maybe it's inflation, just overspending, you know, habits built during COVID that, uh, for spending that haven't dissipated. You know, so, so the consumer is definitely stressed. It's been priced into our model for a very long time, so we're, we're very calibrated to it. But I think, you know, you, we have, you have begun to hear if you, you know,

• 2:45:54Speaker 04

  Retailers are seeing people pull back, they're being more choiceful about what they're spending money on. Suddenly, just all across the board, you're getting a lot of, a lot of noise out there, same-store sales being down for different types of industries. So I think the US consumer is finally kind of going, holy shit, you know, we're not earning as much as we thought we are and we're spending more and, you know, this kind of, we have to get back to a normal place. The, the thing we, I point out more than anything else is the personal savings rate, which is something, you know, produced by the government. And that's at almost historic lows. So, you know, people are not saving, they are spending and, and, and it's, you know, a bit of a, a catch-up that's needed. So from our point of view, like a little bite of recession, if it comes down to like consumers slowing down and, you know, spending less of what they earn, like would be a good thing from our perspective.

• 2:46:39John Coogan?

  Thanks, Tessa.

• 2:46:40Jordi Hays?

  Yeah, any, any comments on, I mean, obviously everyone's been debating, you know, stock market's ripping. So if you're just looking at that, doesn't feel like there's a, a, a real reason to lower rates. But if you look at some of the, you know, employment data and the data that you're talking about, like maybe there is real argument to lower rates. Like what's your guys' like internal outlook for, for the, the back half of the year and beyond?

• 2:47:06Speaker 04

  Yeah, we, you know, in terms of our real product and what it's projecting, we, we never project changes, if you will. So it's always based on what the rates are today. Having said that, I mean, I, we are certainly, I, I, I think rates are unnaturally high considering where inflation is, which is really kind of, you know, the things they have to weigh against. So in my mind, they're, they're likely to move down. I, I, I can't predict the impact of, of all these tariff stuff and inflation any better than anybody else. But I think generally speaking, you know, the, the rates should probably be a hundred or 200 basis points lower. I think they inevitably will be lower. They're not going to go back to what they were, you know, in 2020, but, but they're going to go a lot lower. And that's a tailwind to our business. We, again, we don't plan on it, but there's definitely a, a point at which the consumers are going to get.

• 2:47:49Speaker 04

  In a better health position, saving more money, rates are going to come down and all that is, you know, future tailwind for us.

• 2:47:55John Coogan?

  Yeah, it feels like you're really set up well for the next couple of years, like built through, made it through the high interest rate environment. If interest rates come down, you're, you're, you're ready to rock. So congrats on all the progress.

• 2:48:07Speaker 04

  No, it's, I mean, we just reported triple digit growth in our earnings, you know, last week. The market hammered us anyway.

• 2:48:16Jordi Hays?

  Well, you're five years in, you're, you're almost a veteran now, five years.

• 2:48:19John Coogan?

  I feel like if anyone can take a hammering, it's you.

• 2:48:22Jordi Hays?

  This is for triple digit growth.

• 2:48:23John Coogan?

  Let's hit the gong. Congratulations. Thank you for coming on the show. This is a great conversation. I'd love to talk to you again.

• 2:48:30Speaker 04

  Thanks, guys. Take care.

• 2:48:31Jordi Hays?

  Cheers, Dave.

• 2:48:32John Coogan?

  Let me tell you about Eight Sleep, Get a Pod 5, five year warranty, 30 night risk free trial, free returns, free shipping. Jordy, I think I beat you. What's your number?

• 2:48:41Jordi Hays?

  My problem is I get like four great night sleeps in a row. I got an 81. How'd you do?

• 2:48:46John Coogan?

  94. Play the Ashton Hall sound for me. Let's go. And we got a question from Bill Bishop, who I'm a huge fan of. He writes cynicism on the Substack livestream. He asked, shrooms in ChatGPT, good or bad? I say absolutely bad. Stick to the classics. Caffeine, baby. That's all you need. What do you need shrooms for?

• 2:49:06Jordi Hays?

  Cheers. Quick cheers for Bill.

• 2:49:09John Coogan?

  Stick to Diet Coke and Mataina from Andrew Huberman.

• 2:49:14Jordi Hays?

  Load up on the caffeine.

• 2:49:15John Coogan?

  They're calling it a podcast in a can.

• 2:49:18Jordi Hays?

  Have delusions of grandeur.

• 2:49:19John Coogan?

  Yes, yes, yes. Enough caffeine will take you to the promised land of delusions of grandeur. You won't need an L L M.

• 2:49:25Jordi Hays?

  Newsletter writers on China?

• 2:49:27John Coogan?

  Absolutely.

• 2:49:29Jordi Hays?

  Probably the GOAT.

• 2:49:29John Coogan?

  GOAT. Absolute GOAT. So thank you for tuning in, Bill. Big fan of your work.

• 2:49:34Jordi Hays?

  Without further ado, our next guest.

• 2:49:37John Coogan?

  Kylan from In World. How are you doing? You look fantastic. I was just watching your video and you look exactly the same. How are you doing?

• 2:49:44Speaker 10

  Awesome. Thanks, John. I also am laughing because the caffeine comment is just coming before. I mean, we just had our launch night, so you can imagine I'm heavily caffeinated now.

• 2:49:52John Coogan?

  What's the stock? What are you running? Are you Red Bull, Celsius, Diet Coke, Mataina from Andrew Huberman? What are you running?

• 2:49:57Speaker 10

  All of the above.

• 2:49:58John Coogan?

  All of the above. We love to see it. Anyway, kick us off. We're running late today. We kept you waiting. We're keeping the next person waiting. Kick us off with an introduction. Explain what the company does and whether or not we should ring the gong for you.

• 2:50:11Speaker 10

  All right, uh, so yeah, we were founded four years ago now. Um, we're basically solving the technical problems in the way of consumer AI adoption. So our team came from Google and DeepMind, worked on LLMs there. Basically got very tired of kind of everything flowing into enterprise applications, professional facing applications as we see. So we basically set off to solve all the technical problems to see how we can actually drive consumer AI adoption, which is of course a huge business problem, but also, you know, making sure the benefits of AI reach everyone. Uh, we raised a hundred twenty million dollars so far.

• 2:50:40John Coogan?

  Wow.

• 2:50:41Speaker 10

  And today we, uh.

• 2:50:46John Coogan?

  Congratulations.

• 2:50:48Speaker 10

  Love it. And, uh, yeah, so today we had our biggest launch to date. So we, you know, it took us four years to get here, working with groups like Nvidia, Xbox, Niantic, um, Disney. And now we have the first AI runtime and power consumer application. So that's fun.

• 2:51:03John Coogan?

  Okay, let's make this super concrete to the degree that you can talk about it. Xbox, uh, consumer AI, wh- what does that actually mean? How is generative AI instantiate or LLMs instantiating itself in like the Xbox world? What's even the goal there?

• 2:51:17Speaker 10

  So we started off largely working on things like basically talking NPCs. So, you know, basically.

• 2:51:22Jordi Hays?

  Hey, let's give it up for NPCs.

• 2:51:24John Coogan?

  Let's give it up for, they don't, they get a lot of hate.

• 2:51:26Jordi Hays?

  On a run.

• 2:51:27John Coogan?

  They get a ton of hate, the NPCs.

• 2:51:29Jordi Hays?

  They're about to.

• 2:51:29Speaker 10

  They do get a lot of hate.

• 2:51:30John Coogan?

  They get a ton of hate.

• 2:51:31Jordi Hays?

  They're about to look and feel like real player characters.

• 2:51:34John Coogan?

  Oh, you're an NPC, you're an NPC. Not for long. They're gonna get better because of you. Explain it.

• 2:51:39Speaker 10

  So, yeah, we started out because conversational AI, LLMs are great at that. Um, you know, games are pretty boring. Anybody who's played a game, um, you know, has recognized that. So we started out there and then basically we realized that, you know, we don't just want these characters and basically agentic experiences in games. You can think about every consumer application, you know, your language learning apps or fitness apps, you know, they all suck. I love actually a coach that actually did something effective.

• 2:52:03John Coogan?

  Yep.

• 2:52:03Speaker 10

  And, um, and so what we found over the last few years is we worked a lot on the kind of games applications. So these bring new characters to life, you know, the. The types of experiences there. And then now we've started working with a lot of broader categories.

• 2:52:15John Coogan?

  Yeah. So on Xbox, it feels like you could be almost like an API vendor within the Xbox ecosystem that a game developer could harness and run that on the device as opposed to going to Ubisoft and EA and Activision and saying, hey, for the next release of Call of Duty or Battlefield 6, pay us to train your LLM. You want to be able to run it on the Xbox hardware. So where in the stack is it more like you want to fine tune it so that it's on Xbox's terms and conditions versus you just want to optimize it to actually run on the Xbox hardware? Like where are the key trees to chop down?

• 2:52:52Speaker 10

  Yeah. So think about any of the applications. So in Xbox, for example, you're going to have a game. It's going to be a little unreal. In a mobile scenario, you might have a bill with node. You have that in the application layer. And a lot of the infrastructure we've built today has basically been optimized for that type of experience. But now we're introducing AI. So now you're having a bunch of LLMs or different model calls that are happening. And so think about that as kind of just a second infrastructure layer that needs to exist. So you've got your core application, you've got your AI, and then you've got all your hardware in the backend. So we basically sit in that middle layer of not just powering kind of the actual, you know, the user interface and the specific, you know, gameplay elements or app elements, but actually driving the actual generative part of it. So it could be characters responding. It couldn't be mission generation. All of those different aspects as well as actually generating on the fly content.

• 2:53:37Speaker 10

  So we've got.

• 2:53:38John Coogan?

  That's fascinating. Yeah. So while you're building the game, even if it's a single player game, you could be in the loop designing or generating all the dialogue. But then in theory, it could also make an internet call if you're connected to the web and get up to date text.

• 2:53:55Jordi Hays?

  How are game developers getting comfortable with the unpredictability of AI? I mean, everybody's.

• 2:54:03John Coogan?

  It can be a feature, like hallucinations can be awesome because it takes you in this wild place.

• 2:54:07Jordi Hays?

  But then again, if you have a game for like Roblox, for example, their average user is probably 12 years old. Right? They don't want, you know, some LLM going off the rails and naming itself something that maybe.

• 2:54:18John Coogan?

  Also, just imagine you talk to NBC, it's like the goal on this mission is to slay the dragon. You go slay the dragon, you come back and it hallucinates. It's like, no, I want you to save the dragon.

• 2:54:27Jordi Hays?

  I didn't want you to slay the dragon. Also, my name is Mecca.

• 2:54:33John Coogan?

  So yeah, talk about it.

• 2:54:34Speaker 10

  Oh, this this actually happened, though. So we we did a lot of really tests around this, and it's pretty hilarious. I mean, the characters literally make up anything.

• 2:54:40John Coogan?

  Yeah, of course.

• 2:54:41Speaker 10

  There's been a lot of applications that took advantage of this. So one of our bigger clients, they're called Status. It's a crazy game, huge with like Gen Alpha, Gen Z. They basically created a game where you could role play as a character in another universe's Twitter. So imagine like Harry Potter, I can role play as Harry Potter in Harry Potter universe's Twitter. And then you have like Ronald Weasley, Draco Malfoy, the people don't really exist. But then the AI can actually take advantage of the fact that it's hallucinating and making things up to actually come back with that. And where we see that is like with the interesting with consumer apps is they've kind of gotten to this point where if you, for example, have to design manually content and it takes you thirty days to design that content and then your users consume that in twenty minutes. You have to do a lot of work to create months of content.

• 2:55:21Speaker 10

  So AI kind of smooths out as well as that content creation curve so that you always have this kind of infinite loop, which is, you know, key for things like retention.

• 2:55:30John Coogan?

  It's awesome. What's what's next for the business? Is it just like expansion within your current? And I feel like the pool of value that you can create in any of the companies that you listed is pretty significant. If you just keep delivering better and better products, better value, ramping those up versus going broader. Is there going to be like an SDK at some point? Are you going to go general availability and some some kid who's building an iPhone app will be able to vend this in?

• 2:55:56Speaker 10

  Yeah, so overall, today, we're actually launching that next that next space.

• 2:56:00John Coogan?

  There you go. Exactly what I described.

• 2:56:02Speaker 10

  And yeah, so what we realized was that as we were working with those gaming and media partners, it wasn't just them, but broader consumer applications. Basically, anybody who is dealing with multimillion user scale that has to be, you know, consumer cost, consumer latency, consumer quality, which is more about entertainment than the factuality people are used to in ChatGPT. We also heard about a lot about last week. And so people actually want to be engaged by it.

• 2:56:26Speaker 10

  So for us, it's been kind of expanding to the broader consumer space across like outside of just games and media. And then the other part is releasing the runtime that we're releasing today. And that is kind of the big push that we've been making for the last four years. And basically allows things to auto scale. We had a developer today who called it vibe scaling. So, you know, people can vibe code a lot of applications, but then it takes them fricking six months to be able to actually productionize it. And so everybody comes to me, I've heard like a bunch of, you know, C-level executives, but I vibe coded an app in four hours. Why does it take like six months to productionize it?

• 2:56:56John Coogan?

  Yeah.

• 2:56:57Speaker 10

  We're basically like automating a lot of that scale as well.

• 2:57:00John Coogan?

  Makes sense.

• 2:57:00Speaker 10

  And then automating also the ML operations. So most teams don't have an infrastructure team. So we're basically taking over a lot of that, automating it, and also allowing people to do experiments. So they can just launch tons of experiments and find what works. So that's basically it, is moving into broader consumer, moving deeper in the stack of the infrastructure layer with the runtime. And we think it solves a lot of the problems that we're seeing.

• 2:57:20John Coogan?

  Well, congratulations. Thank you for hopping on the stream.

• 2:57:22Speaker 10

  Awesome.

• 2:57:23John Coogan?

  We'll talk to you later. Have a great rest of your day.

• 2:57:24Jordi Hays?

  Great to meet you.

• 2:57:25Speaker 10

  Thank you so much.

• 2:57:25Jordi Hays?

  Congrats on you and the team.

• 2:57:26John Coogan?

  Have a good one. Let me tell you about public.com investing for those that take it seriously. They got multi-asset investing, industry-leading yields, and they're trusted by millions.

• 2:57:35Jordi Hays?

  Please take it seriously.

• 2:57:36John Coogan?

  Folks, now we got Sam from Method Security coming in the studio. Welcome to the stream, Sam. How are you doing today?

• 2:57:42Speaker 11

  Good, good. Thanks for having me on.

• 2:57:45John Coogan?

  A suit. We love to see it.

• 2:57:46Jordi Hays?

  Looking sharp.

• 2:57:47John Coogan?

  Thank you. It's a great sign of respect in our culture. That looks like a fantastic suit, honestly. Very nice. Anyway, kick us off with an introduction. What do you do? What are you building? Should we ring this gong?

• 2:57:56Speaker 11

  Uh, let's not ring the gong, but I'll tell you why you might need to soon. Sam Jones, CEO and co-founder of Method Security. And let me take you a little bit about what we're up to.

• 2:58:06John Coogan?

  So you're completely bolted bootstrap. You've never raised a dime?

• 2:58:09Speaker 11

  We have raised.

• 2:58:10John Coogan?

  Oh, hit the gong, Jordan. Oh, there we go. Come on, you buried the lead. This is a venture-backed company.

• 2:58:17Speaker 11

  Venture back company. We've capitalized. We're going after big opportunity, but we've just been low key about it because the opportunity is so big.

• 2:58:24John Coogan?

  Fantastic. Well, come back when you have more news on the podcast. Anyway, break down the business for us, please.

• 2:58:32Speaker 11

  All right. So here's the problem we're after. Critical institutions are basically faced with 24/7 cyber conflict. And they don't have the tools they need to win. There's this concept called the cyber industrial complex, which really creates security companies that are designed to be acquired, not to produce at scale. And meanwhile, you've got AI that's going to do to cyber what drones have done to the battlefield. And really, the future will be controlled by who can safely harness autonomy at scale. And that's exactly what we're up to at Method. So we build offensive and defensive products for some of the best security teams in America.

• 2:59:05John Coogan?

  Offensive? Is that for white hat hacking? Or is this, are we actually going on the offense?

• 2:59:10Speaker 11

  A little bit of both.

• 2:59:11John Coogan?

  When would I go on the offense?

• 2:59:14Jordi Hays?

  Striking back.

• 2:59:15Speaker 11

  So interestingly, a lot of commercial security teams use offense to inform their defense. And it's kind of this virtuous loop where you you become the threat and then you can inform your defenses and you have this like kind of cycle. It's historically been super expensive to do so because you need this really hardcore, rare human being called a red teamer, or like an offensive security engineer to conduct those exercises. We're putting that in software so we can basically democratize that and help organizations really assess their readiness to relevant threat actors. Turns out, if you build that technology the right way, it can be used for true offense. And so we're deployed with DOD and also the US government. So we're not limiting to both commercial use for a dual use company. Cyber doesn't discriminate, neither do we.

• 2:59:58John Coogan?

  Very cool. Walk me through how a cyber attack happens in the age of AI. I'm familiar with like the script kitty who finds a hole in WordPress. Or you take a, it's a rainbow table of all the different passwords.

• 3:00:13Jordi Hays?

  If I go chat GPT agent, DDoS, method security website, don't make mistakes.

• 3:00:18John Coogan?

  I don't think he'll do that hopefully, but yeah, I mean, I'm familiar with DDoS, right? It's just a for loop. He requests the website forever, right? But AI feels like the shape of the attack could be way different. Try and concretize it for me to the degree that you can.

• 3:00:34Speaker 11

  Here's the misconception of where AI is at in security. A lot of people think like we're going to come have all these novel zero days all over the place. And we're going to have all these new novel threat patterns happening. That's not what's happening today. Really what AI is doing is that it's helping express a lot of the known techniques and tactics at a new scale. That's unfathomable like a couple of years ago. And so if you think about like the global attack surface, it's unknowable to any single human or any single security product really. But with the right AI system, especially a compound AI system, you can basically map that, eviscerate that and defend that or offend that. And so really AI is helping hit new scale, like orders of magnitude scale, less so new zero days.

• 3:01:16John Coogan?

  Yeah, yeah. So there's, yeah, there's vulnerabilities out there where it's kind of a pattern. You might be able to do some RL on it. It's like follow a set of steps and you might be able to break into one website. But instead of needing to do this website and then move on to the next one, you can just say, hey, go do them all.

• 3:01:32Speaker 11

  Right. It's like instead of let's assess this organization, this is going to be a three month exercise with the right system, which is what we do. You can say 30 seconds, I know everything about this and I'm going to initiate kind of something more offensive.

• 3:01:45John Coogan?

  Interesting. How are, how are like the budgets and the appetites changing in the enterprise or like the Fortune 500? Because we've talked to a lot of people that have said, come on the show and said, oh yeah, AI is going to really help my margins. I'm going to spend less money and it seems like if you're selling into them, they're going and there's more threats. They're going to have to spend more money. How does that balance out?

• 3:02:08Speaker 11

  I'll break it down from like commercial buyers and government buyers is a little bit different. On the commercial side, the most sophisticated security teams usually have dedicated AI innovation budgets. And those are to experiment with new technologies and new technologies in. But for the most part, most buyers, I'm talking like Fortune 500, security executives have known problems, known categories that they still need to purchase against. And so it's important to map, you know, be familiar enough, but also a little different, but not try to build anything too new. So you have to map to something that they know and they're trying to do. It's not necessarily develop a novel new technology. Government is pretty different. Like, there is a lot of investment in, you know, AI for offense, AI for defense, like cyber operations more broadly. In the big beautiful bill, there

• 3:02:52Speaker 11

  was 1 billion earmarked for offensive cyber operations, which is a huge number.

• 3:02:56Jordi Hays?

  Wow.

• 3:02:57Speaker 11

  And I would argue, like, still need to up that number quite a bit. But there's a general, you know, understanding that we need to up our game here and get faster, and the status quo is not cutting it.

• 3:03:08John Coogan?

  Fantastic. Jordy, anything else?

• 3:03:10Speaker 11

  That's it.

• 3:03:10John Coogan?

  I think you have some important work to get back to, so we'll let you-

• 3:03:13Jordi Hays?

  Go get on the offensive-

• 3:03:14John Coogan?

  Get on the offensive-

• 3:03:15Jordi Hays?

  All right, do it. We're riding with you.

• 3:03:17John Coogan?

  Bring me a list of passwords from North Korea, please.

• 3:03:21John Coogan?

  Anyway, great chatting with you.

• 3:03:23Jordi Hays?

  Great to meet you, Sam.

• 3:03:23John Coogan?

  Thanks so much for hopping on the street.

• 3:03:24Jordi Hays?

  Come back on whenever. Thanks for having me.

• 3:03:25John Coogan?

  Congrats on the progress. We'll talk to you soon.

• 3:03:26Jordi Hays?

  Cheers.

• 3:03:27John Coogan?

  Bye. Uh, 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.

• 3:03:34Jordi Hays?

  See ya.

• 3:03:35John Coogan?

  I want some soundboard when I do these, Jordy. Only AdQuick combines technology, out-of-home expertise, and data to enable seamless, efficient ad buy across the-

• 3:03:43Jordi Hays?

  Golden retriever mode.

• 3:03:44John Coogan?

  The golden retriever, the, the, the dog panting and the horse noise, deeply underrated. You know, I love the Ashton Hall, but the horse noise is, is a close second. Anyway, we are joined by someone who can run as much as a horse, Zach Progab.

• 3:03:57Jordi Hays?

  I would estimate Zach at like 6 or 7 horsepower.

• 3:04:01John Coogan?

  That's-

• 3:04:01Jordi Hays?

  Have you ever tried to ask- Zach, you're live, by the way, sorry.

• 3:04:04John Coogan?

  I think you're about 6. You're live.

• 3:04:06Jordi Hays?

  How much horsepower do you think you-

• 3:04:07John Coogan?

  I think you are about 6 horsepower.

• 3:04:08Jordi Hays?

  We were saying, I think you're probably 6 or 7 horsepower.

• 3:04:11Speaker 12

  I don't know what that means. Not a car guy. I'm sorry, I was-

• 3:04:14John Coogan?

  No, are you, you know, a horse has 1 horsepower. We're basically saying you're as strong as 7 horses.

• 3:04:19Jordi Hays?

  6 or 7 stallions.

• 3:04:20Speaker 12

  I'll take it.

• 3:04:21John Coogan?

  Anyway-

• 3:04:22Speaker 12

  I've been thinking a lot about horses, but go ahead.

• 3:04:24John Coogan?

  Oh, what have you been thinking about?

• 3:04:26Jordi Hays?

  So have we.

• 3:04:27Speaker 12

  They're just like the most majestic creatures, the, an unbelievable combination of beauty and grace, but this raw power, and it's just like, I don't know. Go ahead.

• 3:04:36Jordi Hays?

  Couldn't have said it better myself.

• 3:04:37John Coogan?

  Much like you. Anyway, congrats on the launch. Share Aura is now live in the App Store. If you're listening to this, go download it. Invite codes are going out to a waitlist this week. There's 20,000 people on the waitlist already? Wow.

• 3:04:50Speaker 12

  Probably, yeah.

• 3:04:51John Coogan?

  Probably more. So, so break it down for us. Uh, pitch the app and explain some of the launch strategies that you've been employing. I want to talk about media and, and vlogging and actual, uh, and the app, of course.

• 3:05:06Speaker 12

  Definitely, yeah. So for some context, I've been posting on social media under my name essentially. It actually started as like a pseudonymous account, but that was like five years ago.

• 3:05:14John Coogan?

  Yeah.

• 3:05:15Speaker 12

  For almost seven years and have went from writing content to motivational content and then got really into running. And the idea for the app started where a lot of you are familiar with Strava probably.

• 3:05:25John Coogan?

  Yep.

• 3:05:26Speaker 12

  Noticed that, so I have a big Instagram account, have 1.3 million followers.

• 3:05:31John Coogan?

  Hit the gong for 1.3 million followers on Instagram. Congratulations.

• 3:05:36Speaker 12

  And towards the end of last year, I just, you know, I kind of accidentally became an influencer and just hated it. Hated putting up people's stuff. And I was just, I scrapped everything I was doing, all my partnerships, I just want to build my own thing. And, and I just noticed all these people, every single fucking runner I followed was posting screenshots of their Strava or their run or their workout on social media. I'm sure you guys see people who do that on Instagram all the time.

• 3:06:05John Coogan?

  Of course.

• 3:06:05Speaker 12

  And then I just started thinking more, I'm like, screenshotting itself is just like this unbelievably massive user behavior. If you go look at screenshots on your phone, I would bet you have like 20,000 screenshots.

• 3:06:18John Coogan?

  Yep.

• 3:06:18Speaker 12

  It's insane.

• 3:06:19John Coogan?

  There's even a separate folder for them now, it's really convenient, I love it.

• 3:06:22Speaker 12

  Yeah, but so essentially you have this user behavior of finish your run, finish your workout, post it to social media.

• 3:06:28John Coogan?

  Yeah.

• 3:06:28Speaker 12

  Hundreds of millions of people are doing that very specific thing every single day.

• 3:06:33John Coogan?

  Yep.

• 3:06:33Speaker 12

  And yet these apps like Strava, you have to take a screenshot and then go to CapCut or Canva and remove transparency and do all this? No, let's just build an app obsessively dominating that one user behavior.

• 3:06:45John Coogan?

  Cool.

• 3:06:45Speaker 12

  So that's what I started working on in February where essentially the app is a tool to share your runs and workouts. It's like a creative tool for fitness and running, starting focused on running and we're expanding quickly to all the big stuff, cycling like you'd expect.

• 3:06:59John Coogan?

  Cycling like testosterone or what are you talking about cycling?

• 3:07:02Speaker 12

  We can, we, uh.

• 3:07:05John Coogan?

  I'm kidding, I'm kidding, of course. We're talking about bicycling.

• 3:07:07Jordi Hays?

  John's gonna start bicycling. John's gonna do a cycle and just every day. Just do it live on the air.

• 3:07:13John Coogan?

  What was your strategy for actually getting feedback? It sounds like you were dogfooding the app yourself, but then did you have a small community of beta testers, friends, family? Like, who do you trust? Who is actually gonna give you good signal? Because if they're too close, they'll say, they'll glaze you. If you ask ChatGPT, probably tell you, you know, the next Mark Zuckerberg. But, uh, you gotta dial it in, right? You gotta get the right, the right feedback from the right people. So how, how do you iterate?

• 3:07:42Speaker 12

  Yeah, I mean, it's like you have so many yes men and you have to just ignore all of them. We've had a beta, so we've had a beta. Shout out to, to developers of Aura, Kale Stewart, John O'Kim.

• 3:07:51John Coogan?

  Good for them. Love developers. Thank you.

• 3:07:55Jordi Hays?

  Developers, developers.

• 3:07:56John Coogan?

  Developers, developers, developers, developers, developers, developers.

• 3:08:01Speaker 12

  I haven't watched the show. I've seen the clips, but I'm not, it's not used all the thing.

• 3:08:06John Coogan?

  We're really ramping it up today.

• 3:08:07Jordi Hays?

  You're too locked, you're too locked in. You're too locked in.

• 3:08:09Speaker 12

  All right, I've been watching every day, but okay. Anyway, um, we've had a beta since March and yeah, I mean, I've had nothing else in my life besides this app. Luckily, I'm, I'm the type to just burn everything down and just focus on a thing. And so we've had a beta and, you know, the product we had in the beginning of March is drastically different than we have, uh, now. And, and yeah, I mean, look, I'm lucky. I have been creating content so long. I have people who, um, who were just hungry for something from me. And this app, it's so core to the DNA of everything I talk about that, um, I think I was able to get really good feedback. Like there are some, like there's a group chat, shout out to them called The Pit. And it's, it's like a group of like my, my most real, they're not just about me, but

• 3:08:51Speaker 12

  like a lot of like true obsessed savage, and I've been following you for a long time. Shout out to the pit, the pit.

• 3:08:57John Coogan?

  The pit is aligned.

• 3:09:01John Coogan?

  Let's hear it for the pit.

• 3:09:02Speaker 12

  Yeah, created since March and just been iterating rapidly on the product. And the one thing I've learned, which I'm sure you guys know is just you have, you have no idea what's going to work until you ship it. And it's been, it's been fun to be on that journey.

• 3:09:12John Coogan?

  Uh, we have a question from the chat. Do you think Sam Sheffer is shadow banned from Share Aura for not running with a beard? Or for running too slowly? Or for not running enough?

• 3:09:22Speaker 12

  He's only.

• 3:09:23John Coogan?

  Or any other reason I can make up trying to roast him? That's from John Exley.

• 3:09:27Speaker 12

  He's only, he's running under three miles a day. And I put out a tweet that if you're a man running under three miles is very feminine.

• 3:09:34John Coogan?

  Oh my God.

• 3:09:35Speaker 12

  Instagram didn't like that one, but.

• 3:09:37John Coogan?

  Yeah, you gotta get deep platform for that.

• 3:09:39Jordi Hays?

  Hosted for that.

• 3:09:40John Coogan?

  Uh, anyway.

• 3:09:41Jordi Hays?

  What, uh, uh, you're building, you know, it's an app, but you're building a business.

• 3:09:45John Coogan?

  Yeah.

• 3:09:46Jordi Hays?

  Are, are you going to roll out? Are you monetizing already? Do you plan to? What's the plan there?

• 3:09:51Speaker 12

  No monetization, yes. Um, I, I, we do plan to, however, my thing is our app is essentially a, a distribution product on drugs. Right? Where the only purpose of you go on Aura, the Share Aura, the only purpose is to create content to share to social media. And so essentially the reason I am obviously bullish on my app and I'm essentially playing with three cheat codes. That is the only purpose of the app is to post content on your Instagram story and social media. Number two, I have fucking two million followers. I post a little, I post a graphic for the app that we might make on my Instagram story. It gets a hundred thousand views. I, I'm a pretty good designer. I design a lot of it myself and then, or we have good designers who help.

• 3:10:31John Coogan?

  Yeah.

• 3:10:32Speaker 12

  And then Donna fucking ships it, makes it and we ship it next week. So, okay, my audience is number two. And then my friend, I have a lot of fucking friends who are the biggest running creators in the space.

• 3:10:41John Coogan?

  Yeah.

• 3:10:41Speaker 12

  Who, I don't, I don't pay, I don't, there's no payments. And we can get to that if you saw my marketing posts, we could talk about it, but I'm not paying a single influencer to use my app. They are literally asking me right now, I just put out a tweet. I don't know if you saw it. I might delete it.

• 3:10:56John Coogan?

  The pit is here in the chat. Greg Duncan says shout out to pit. Colin Cornwell is in the chat. Cole Ryan. I feel like a lot of these guys came from your crew. I don't know if you know them by name, but.

• 3:11:08Speaker 12

  I was just saying, like, there are big Instagram influencers with millions of followers asking to use my app.

• 3:11:13John Coogan?

  Totally, yeah.

• 3:11:15Speaker 12

  And like, I don't, you know what I mean? And so for monetization, I just think if I was to charge money right now, we have essentially a creative tool, right? We could charge money for creative assets and special templates and all this stuff.

• 3:11:26John Coogan?

  Yeah.

• 3:11:26Speaker 12

  Fuck that. Let's just build the most ridiculous growth machine possible. Get a fuckload of users and then already have specific ideas. Like, for example, let's say we have 500,000 users sharing with Aura, sharing content, not just users on the app. You're kind of valuing the potential impressions on their content per day. That, I think, is worth something to a brand, to have their assets in the app to serve as creative tools to spread their brand more. That's just one way. But the reality is, guys, I will be super transparent. There is no ceiling. Zero ceiling to my ambition with this app. I think consumer health, consumer fitness is a very massive category. Even if you just look at running apps, you go back 10 years to when the App Store launched, RunTastic, Runkeeper, MapMyRun.

• 3:12:08John Coogan?

  Yep.

• 3:12:08Speaker 12

  When the App Store launched, all these fucking apps were built. They got 50 to 100 million plus users and they were all acquired by Asics, Adidas. Um, there's more of them that were like, five of them were acquired for 50 to like 300 million. And truthfully, I'm starting this, the first act of Aura, Share Aura is sharing. But I'm, since the beginning, since March, the reason I've been taking this so seriously is I'm, that is just the start. And I think there is a.

• 3:12:34Jordi Hays?

  Yeah, you told me, you told me off air some of your, your more moonshot ideas and they're very exciting. I won't, I won't.

• 3:12:40John Coogan?

  Hunter Royce says 1 million users is the goal. Um, I feel like you'll have strong opinions about AI, social networks, bots. We just heard from an investor who said that maybe there will be a new social network that's heavy on bots. We talked to Pika Labs yesterday. They want to build.

• 3:12:57Jordi Hays?

  I like, I like that.

• 3:12:58John Coogan?

  An app that's like a, a social media app that's entirely AI-generated. Share Aura, the vlogs even putting out, they feel uniquely human. Talk to me about the trade offs between like AI content being allowed or promoted or demoted.

• 3:13:14Jordi Hays?

  Well, Chair Ours, Chair Ours, great, because you guys can use generative AI to give people these creative tools, but they still have to go out in the real world if they want to actually really use the product, right? It's, it's, doesn't matter if they can.

• 3:13:26John Coogan?

  Tesla Optimus, go run seventeen miles and then come back and post for me.

• 3:13:31Jordi Hays?

  Under four, under four minute miles, please.

• 3:13:32John Coogan?

  But yeah, what's your take on like AI on social media, like it's correct place?

• 3:13:38Speaker 12

  Yeah, I mean,

• 3:13:42Speaker 12

  on social media, like it can't be the heart of things. Like I, my writing gets tens of millions of views a month. I've never written with AI once. I've never made a vlog with AI once. However, my whole app, like I just pulled it up, like so for our app, we have like stock backgrounds, right? Because it's like, you've got stock images, right? And like, so we make, I'll just pull it up, like they look like that, like they're super sick.

• 3:14:06John Coogan?

  Yeah, very cool.

• 3:14:06Speaker 12

  Crazy percentage of our app use them, like forty percent plus use, um, which is wild. And, and like, yeah, I think it should be used to expand a creative vision. Like my creative universe, fuck yeah, I'm going to use AI. I think AI videos, I'm so bullish on it. And like the shit we're doing for Aura, for the AI backgrounds I just showed you, I have a person named Nat who's cracked on it. It is going to fucking break the internet. It is so good. It is so good. And, and, but the heart of everything is me fucking taking,

• 3:14:36John Coogan?

  Yeah.

• 3:14:37Speaker 12

  filming this whole thing, by the way. What's up, guys?

• 3:14:39John Coogan?

  Nice.

• 3:14:40Jordi Hays?

  Hey, great to see you.

• 3:14:41Speaker 12

  Taking this nineteen, two thousand, nineteen ninety nine year old camcorder and taking it on a vlog and filming my entire life. So the heart of it, I don't think you build a personal brand with AI. It can't be the heart of it. But it should be, you should use it to expand your creative universe.

• 3:14:54Jordi Hays?

  We're going to use AI to bleep out your product now.

• 3:14:58Speaker 12

  I cursed. I didn't notice.

• 3:15:01Jordi Hays?

  I love it.

• 3:15:02John Coogan?

  Camcorder vlogs, are they working on YouTube? Are they working on Instagram? Are they working on acts? Who, what audience likes that more than the other?

• 3:15:11Speaker 12

  They're definitely working. I'm not a YouTuber, so like I just don't know if they're working yet on that platform. It's too early.

• 3:15:16John Coogan?

  Yeah.

• 3:15:17Speaker 12

  Instagram, it's funny. I have 1.3 million followers. I don't think I posted a reel for a year.

• 3:15:21John Coogan?

  Yeah.

• 3:15:22Speaker 12

  Cause I'm just, I was a writer. I was doing other stuff.

• 3:15:24John Coogan?

  Yeah.

• 3:15:25Speaker 12

  They're already working on reels and I just started them and on X they're a hundred percent working. And the big thing is like, look, the thing I obsess over more than anything is just like how to get attention on social media, right? And it's just like, I've gone ridiculously viral in the past for some certain innovative things. And um, the camcorder is the same thing. You're giving someone something new on their screen. That's number one. And then number two is you're tapping into just nostalgia, which brands know nostalgia is an unbelievable weapon. An unbelievable weapon for attention. And when you combine that with someone actually doing something, like I'm actually building my app, it's, it's, it's interesting. And so I think they're a hundred percent working on X. Like, look at the fucking,

• 3:16:05Speaker 12

  the vlogs I've done on X have gotten hundreds of thousands of views already. And the little launch video, mini one I did got has a hundred forty-four thousand views. It's pretty good.

• 3:16:14John Coogan?

  Yeah, yeah. I mean, we felt that early on with like, we were printing out tweets and reacting to them and wearing suits and there was a little bit of nostalgia in here.

• 3:16:22Speaker 12

  The thing is, brands, you can't just fucking use Apple Garamon with negative three letters. People care. No one cares. You have to find, you guys have the synth wave intro. It's great.

• 3:16:32John Coogan?

  Yeah, yeah. You, you, you have to pull different things from different elements. We're showing the.

• 3:16:37Jordi Hays?

  We're using a camcorder ourselves.

• 3:16:39John Coogan?

  Yeah, we have one in the studio too. It's fun. I, I, I think these are just creative tools like the generative AI, like the generative. I like the fact that you're saying generative AI backgrounds, because I feel like the magic happens when there's, when there's, it, it's like, if you go to any, any like Photoshop or like MS Paint, like you'd always have like, the template for like, I want to just stamp a tree down and that's just one of the tools. And it feels like these generative AI backgrounds. It like, they're not going to go viral by themselves. The virality, the human element's going to be injected and it's going to be like a collaging effect on top of some, of some base that's really going to be the thing that pops.

• 3:17:16Jordi Hays?

  Totally.

• 3:17:17John Coogan?

  Stands out. Anyway.

• 3:17:19Jordi Hays?

  Well, I'm excited for more people in the world to get the app.

• 3:17:22John Coogan?

  Yep.

• 3:17:22Jordi Hays?

  Congrats on the launch and uh come back on anytime.

• 3:17:26John Coogan?

  Everyone's demanding codes.

• 3:17:27Jordi Hays?

  Is this, this isn't the first time, right? You've been on before.

• 3:17:30Speaker 12

  No, first time, I think.

• 3:17:31John Coogan?

  First time, this is crazy.

• 3:17:33Speaker 12

  When we do another big update, I'll come back on.

• 3:17:35John Coogan?

  Yeah, yeah, come back on. The, the fans love it.

• 3:17:37Jordi Hays?

  Honestly, honestly.

• 3:17:38John Coogan?

  Ish Redusco says Zach looking yoked. Glad you went with the black tank, says Ish.

• 3:17:44Jordi Hays?

  There you go.

• 3:17:45John Coogan?

  Greg Duncan says nostalgia is emotional crack.

• 3:17:48Speaker 12

  But I.

• 3:17:48John Coogan?

  You look good either way. You look good either way.

• 3:17:50Jordi Hays?

  Authentically.

• 3:17:51John Coogan?

  Colin says he's cooking and making us feel.

• 3:17:54Jordi Hays?

  Next time you go on a, on a long run, just, just FaceTime us. We'll, we'll drop you into the show.

• 3:18:00John Coogan?

  Yeah, yeah, you can call in for a run.

• 3:18:02Jordi Hays?

  We'll be your running, we'll be your running coach.

• 3:18:03John Coogan?

  Yeah. I'm sure, I'm sure.

• 3:18:06Jordi Hays?

  Awesome.

• 3:18:06John Coogan?

  Anyway, great chat with you. We will talk to you soon.

• 3:18:09Jordi Hays?

  Cheers.

• 3:18:11John Coogan?

  And you know where he should do to promote this? He should run from one wander to another. He should find his happy place.

• 3:18:17Jordi Hays?

  He really should.

• 3:18:18John Coogan?

  He should book a wander with inspiring views, hotel great amenities, dreamy beds, top tier cleaning and 24/7 concierge service. Because it's a vacation home, but better.

• 3:18:24Jordi Hays?

  Do a campaign with Zach and just have him run. You know, 100 wanders in 100 days, all on foot.

• 3:18:31John Coogan?

  That'd be great. That'd be great. Uh, let's go to the timeline. The billionaire Porsche family prepares for war with new defense fund. German dynasty expands into weapons amid Europe's rearmament drive. Uh, Sashank Josie says, enter the 911, the 9/11 technical. Um, this is just funny that like more and more people are pouring, are pouring into uh defense tech. We were kind of discussing this like.

• 3:18:55Jordi Hays?

  First time the Porsche family has gotten involved in war.

• 3:18:59John Coogan?

  It's not the first time. Uh, oh, I, you put this in the, you put this in the feed and I didn't realize it was from John Summit, but John Summit said, uh.

• 3:19:06Jordi Hays?

  No, no, no. Let me give some context.

• 3:19:07John Coogan?

  Okay, yeah, yeah, yeah, yeah. Take, take this.

• 3:19:09Jordi Hays?

  John Summit had.

• 3:19:11John Coogan?

  He said, every great bender leads to an epic lock-in.

• 3:19:15Jordi Hays?

  And then, and then people, someone quoted this and said, you're 31, big bro, and went viral. Uh, obviously dunking on him.

• 3:19:22John Coogan?

  10K.

• 3:19:23Jordi Hays?

  John fires back and says, do you, do people think you just stop having fun in your 30s? Such a loser mentality.

• 3:19:29John Coogan?

  Owned.

• 3:19:29Jordi Hays?

  And then says David Getta is 57, Tiesto is 56, Carl Cox is 63, and they all still rip till 6am in Ibiza. While all these finance burner, burners cry themselves to sleep at night.

• 3:19:43John Coogan?

  An East Village guy just says banger. John Summit, I didn't realize he was a poster.

• 3:19:48Jordi Hays?

  He just declared war on the timeline.

• 3:19:49John Coogan?

  He declared war on the timeline and put Loverboy in the truth zone. Anyway, fun, fun, fun to have people going back and forth.

• 3:19:55Jordi Hays?

  Loverboy, show up at, get backstage at a John Summit show, you guys should make up and, uh, and, uh, send it.

• 3:20:03John Coogan?

  And John Summit, head over to getbezel.com, your bezel concierge is available now to source you any watch on the planet, seriously, any watch. Nick Carter.

• 3:20:10Jordi Hays?

  He says, I'm increasingly convinced that a substantial percentage of kids brought up in the age of AI will be post literate. Like, they won't really know how to write, and I'm gonna say, or think, and will rely on AI to autocomplete their thoughts.

• 3:20:25John Coogan?

  I mean, we have a friend who is illiterate and he's very successful. He doesn't know how to read, it's fine. Maybe, maybe literacy is overrated.

• 3:20:32Jordi Hays?

  But because he doesn't know how to read, it clarifies his thinking. He has no, no one else is able to influence his thought with the written word.

• 3:20:42John Coogan?

  Yeah, yeah, yeah. You can't one-shot him.

• 3:20:45Jordi Hays?

  No, I've, I've been pushing people on this. I think, I think if somebody is struggling with how to communicate an idea, and they think, I should go to ChatGPT and, and work this out.

• 3:20:56John Coogan?

  Yeah.

• 3:20:57Jordi Hays?

  I think that the more you do that, the more you're gonna atrophy your brain, and you gotta be a little careful there.

• 3:21:02John Coogan?

  It's so crazy because if you can write a good prompt, job's finished. You can just send that as an email. Like, very rarely does the result, because I have GPT-5 running in my brain in terms of like rewriting emails. You can just send me the bullet points. You don't need to send me the, hey, ChatGPT, turn these bullet points into a bunch of paragraphs. You can just send me the bullet points, and I will expand it in my brain. Uh, and so, um, I, I, I find that the, uh, I find that, I find that the ChatGPT for, for email writing, uh, does not actually improve communication or save all of that much time. Again, knowledge retrieval, knowledge retrieval, knowledge retrieval. If you're thinking of something, it's on the tip of your tongue,

• 3:21:45John Coogan?

  type it into ChatGPT, it'll give you what you're thinking of. If you need five examples of something and you can think of two, it's gonna nail the next five. Speaking of which, I had an interesting thing that I pulled up, we didn't get a chance to talk about this, but, um, are you familiar with the story of John Hinckley Jr.?

• 3:22:01Jordi Hays?

  No.

• 3:22:01John Coogan?

  So, we were talking about AI psychosis, AI making people crazy, maybe social media had a similar effect. Well, what about movies? So, in 1967, has anyone in this studio seen Taxi Driver? Yes. Thank you. I know you haven't, but Taxi Driver is a Robert De Niro film where Travis Bickle, the character, becomes obsessed with a young woman played by Jodie Foster and attempts to assassinate a presidential candidate. So, John Hinckley Jr. was 25 years old. He was a drifter from Texas, and he had developed an intense fixation on the actress Jodie

• 3:22:40John Coogan?

  Foster after seeing him in that 1976 film Taxi Driver. So, in 1980, Foster was a student at Yale University. Hinckley moved to New Haven, where Yale is, for a time, writing her letters and calling her, even though she never reciprocated or encouraged contact. Hinckley believed that committing a spectacular act, such as killing a US president, would gain Jodie Foster's attention and impress her. So, he trailed. He first was going after Jimmy Carter. He trailed President Jimmy Carter during the 1980 campaign, but was arrested on a weapons charge in Nashville. But when Ronald Reagan got elected, Hinckley shifted focus to Reagan. And so, on March 30th of 1981, at the Washington Hilton Hotel in

• 3:23:25John Coogan?

  Washington DC, Reagan had just finished speaking and was leaving the venue when Hinckley fired six shots with a 22 caliber revolver. He hit Ronald Reagan with a ricochet bullet in the chest. Reagan survived. He hit the Press Secretary James Brady in the head and left him personally, permanently disabled. And he also shot a Secret Service agent in the abdomen and a DC police officer in the neck. And so, later, John Hinckley claimed he did it to impress Jodie Foster. He, his defense argued not guilty by reason of insanity. He pleaded insane, citing severe mental illness. And he was eventually acquitted on those grounds

• 3:24:05John Coogan?

  in 1982, but was committed to a psychiatric hospital for over three decades. So, one-shotted by technology, one-shotted by new video, new imagery, a film, something that's not real, but told a story that convinced him, and he had delusions of grandeur, and he went on this run. He was effectively, you know, he had film psychosis. But...

• 3:24:30John Coogan?

  It was very, very, he was, this is like the only example of something like that happening. And overall, I would say the films are fantastic and a major net good.

• 3:24:37Jordi Hays?

  Did he get Jodie Foster's attention?

• 3:24:40John Coogan?

  I don't think so.

• 3:24:42Jordi Hays?

  Hopefully she paid a little attention.

• 3:24:44John Coogan?

  I think she did address it at one point, um, but I don't think she was interested in him.

• 3:24:48Jordi Hays?

  Yeah.

• 3:24:49John Coogan?

  But interesting that

• 3:24:50Jordi Hays?

  Have a rough way to get attention.

• 3:24:52John Coogan?

  That this, this idea of, of seeing some sort of media, text imagery, something on social media, something in, in chat GPT, something on the screen could drive someone who's, you know, has mental illness to do something crazy. This is, this is not entirely new. The question is scale and the question is how can you resolve it? Um, when the film industry, you know, I, I think it was, I think it was handled just by, you know, like they've made more movies like, uh, like Taxi Driver. They've made, uh, Joker and people were worried about that having an effect. But overall, our society learned to adapt and, and probably identify, hey, my friend saw a movie and he's acting weird.

• 3:25:35John Coogan?

  Like, let me talk to him about that. Like, no, but just because Jodie Foster's in that movie doesn't mean that she's gonna love you if you do the thing that happened in that movie. The movie is fiction. Um, and so people developed kind of a memetic defense to, uh, the, the imagery in films. Uh, they'll hopefully do the same for social media and have in many ways. I think a lot of people are, are, are adapting to the age of, of, uh, social media with like screen time and understanding that, you know, there's all these different incentives.

• 3:26:01Jordi Hays?

  Getting a notification. Wow, I used TikTok for 60 hours.

• 3:26:07John Coogan?

  Yeah, don't talk to Tyler's friends.

• 3:26:08Jordi Hays?

  I gotta get those numbers up.

• 3:26:10John Coogan?

  Yeah.

• 3:26:10Jordi Hays?

  Um, well, we gotta talk about a, uh, potentially the next Fed chair.

• 3:26:16John Coogan?

  Yeah, what is going on here?

• 3:26:17Jordi Hays?

  David Zervos.

• 3:26:19John Coogan?

  Okay.

• 3:26:19Jordi Hays?

  Who is a currently managing director over at Jeffries.

• 3:26:23John Coogan?

  Okay.

• 3:26:23Jordi Hays?

  And he has a fantastic wardrobe. Let's pull this up.

• 3:26:26John Coogan?

  This is wild wardrobe.

• 3:26:28Jordi Hays?

  Cue Cap says this might be the Fed chair and you're bearish. This looks like a Burning Man-esque outfit.

• 3:26:37John Coogan?

  Do you want to?

• 3:26:38Jordi Hays?

  Next up, he's got a fantastic orange suit.

• 3:26:41John Coogan?

  The orange suit is fantastic.

• 3:26:43Jordi Hays?

  Incredibly sharp. David.

• 3:26:45John Coogan?

  Put him on the McLaren F1 team.

• 3:26:47Jordi Hays?

  David was already an advisor to the Fed back in 2009 for a year and then has gone on quite the run.

• 3:26:55John Coogan?

  Something about David's in finance, because this David has fantastic suits and fashion sense. And then David Solomon is a DJ. Something about being a David in finance really puts you on the track for eccentricity.

• 3:27:08Jordi Hays?

  He does look like in another life, he would have dominated digital assets.

• 3:27:13John Coogan?

  Oh, I thought you were gonna say.

• 3:27:14Jordi Hays?

  Both.

• 3:27:14John Coogan?

  Oh, yeah, yeah, for sure crypto. But he definitely has the crypto aesthetic down. But the question is, could you imagine him going head to head, back to back in a boiler room set with David Solomon? I think he would give him a run for his money.

• 3:27:28Jordi Hays?

  Absolutely.

• 3:27:29John Coogan?

  What else should we talk about today? It's 2:30. Should we get out of here? Or should we continue down the timeline, down the rabbit hole, deeper?

• 3:27:37Jordi Hays?

  You know, should we pull up this video Dylan highlighted? Dylan Abruscato highlighted.

• 3:27:43John Coogan?

  Absolutely.

• 3:27:44Jordi Hays?

  There is a new.

• 3:27:45John Coogan?

  React to a movie trailer?

• 3:27:46Jordi Hays?

  Yeah, let's react to a movie trailer from A24. It's called Marty Supreme. It just was released this morning. It features Oscar nominee Timothy Chalamet, Oscar winner Gwyneth Paltrow, and of course.

• 3:27:58John Coogan?

  Hard up investor. Kevin O'Leary.

• 3:28:02Jordi Hays?

  Shark Tank Shark, Kevin O'Leary.

• 3:28:04John Coogan?

  Let's watch it.

• 3:28:08Speaker 10

  Hello?

• 3:28:08Speaker 13

  Hey, it's Marty Mauser. I'm in the royal suite. I saw you in the lobby yesterday.

• 3:28:12Speaker 10

  Okay.

• 3:28:13Speaker 13

  Well, I've never talked to an actual movie star. You know, something of a performer, too.

• 3:28:17Speaker 10

  Are you?

• 3:28:18Speaker 13

  Yeah, you don't believe me?

• 3:28:19Speaker 10

  I.

• 3:28:21Speaker 13

  You what? You what? You got the Daily Mail in front of you?

• 3:28:23Speaker 06

  This is you?

• 3:28:24Speaker 13

  Yeah, the chosen one. It's a nice picture, right?

• 3:28:30John Coogan?

  Are we gonna get a copyright for this?

• 3:28:31Speaker 13

  Probably. If you think that's some sort of blessing, it's not.

• 3:28:34John Coogan?

  Hopefully not.

• 3:28:35Speaker 13

  It means I have an obligation to see a very specific thing through. And with that obligation comes sacrifice.

• 3:28:42Speaker 14

  Everything in my life's falling apart, but I'm gonna figure it out.

• 3:28:44Speaker 13

  Do you need any help? I could help you. Uncut Gems. But I'm telling you, this game it fills stadiums overseas. And it's only a matter of time before I'm staring at you from the cover of a Wheaties box.

• 3:28:57Jordi Hays?

  The Wheaties box.

• 3:29:14Jordi Hays?

  Alright. Team Movie Night. When this drops, we're doing it.

• 3:29:20John Coogan?

  They, uh, I guess that's just Josh Safdie, but his brother David Safdie is also a partner in most of his creative endeavors.

• 3:29:28Jordi Hays?

  Benny Safdie.

• 3:29:29John Coogan?

  Yeah, Benny. Benny Safdie and Josh Safdie, that's the crew. But they are fantastic at finding, like, undiscovered talent that would do well in film. I just, like, Adam Sandler in Uncut Gems, he's known as a comedian. He'd done serious movies, but he was still kind of an odd choice for that. They also cast Kevin Garnett as himself in Uncut Gems, and that was like a fantastic performance, and people kind of didn't expect an NBA player to just like jump straight into a prestigious Hollywood movie and do great.

• 3:30:03Jordi Hays?

  Julia Fox. It's easier if you're playing yourself.

• 3:30:05John Coogan?

  As well. The Weeknd was in, uh, was, uh, was in, um, that movie as well. And then there's been a couple others where he's pulled odd folks in. Benny Safdie jumps in, plays, so I'm extremely bullish on Kevin.

• 3:30:18Jordi Hays?

  We're gonna end on this next post.

• 3:30:20John Coogan?

  Please.

• 3:30:21Jordi Hays?

  It's from the account Financial Dystopia.

• 3:30:23John Coogan?

  Okay, we're playing this one.

• 3:30:24Jordi Hays?

  But this doesn't seem dystopian to me at all. I can see why. The caption is "A remote salesman makes a call while he's driving a boat." So, let's pull...

• 3:30:32John Coogan?

  SPX Maximalist, thank you for the shout out. I'm glad you're tuning in daily.

• 3:30:37Speaker 14

  It's Mackie, how you doing, darling? Oh, we're blessed, we're blessed. I'm sorry you spit noisy, we're out on the lake right now doing some surfing. This is the weekend. Oh yeah, you ever done wake surfing before?

• 3:30:51John Coogan?

  I'm ready to buy.

• 3:30:52Speaker 14

  We gotta get your ass out here.

• 3:30:53John Coogan?

  This is amazing.

• 3:30:54Speaker 14

  You scared of the water?

• 3:30:55Jordi Hays?

  Masterclass.

• 3:30:56Speaker 14

  You can't swim?

• 3:30:58John Coogan?

  You're telling me an AI agent is gonna be able to do this?

• 3:31:01Jordi Hays?

  I'd like to see an AI agent wake, drive a wake surfing boat.

• 3:31:05John Coogan?

  Wow, our sales call.

• 3:31:07Speaker 14

  We get you surfing in no time.

• 3:31:10John Coogan?

  It's great.

• 3:31:12Speaker 14

  Well, Mac, did you have a chance to talk to this man?

• 3:31:14John Coogan?

  Can we make an intro to Sam Bockett ramp? We need to get this guy on the ramp too. He's ready to close deals.

• 3:31:21Jordi Hays?

  Okay, fantastic.

• 3:31:22Speaker 06

  I have some breaking news.

• 3:31:23John Coogan?

  Please.

• 3:31:24Speaker 06

  Okay, so, um, ex-AI co-founder Igor Babushkin is leaving.

• 3:31:28John Coogan?

  No way.

• 3:31:28Speaker 06

  To start a venture firm.

• 3:31:30John Coogan?

  Oh.

• 3:31:31Speaker 06

  It supports AI safety research and backs startups in AI and agentic systems.

• 3:31:35John Coogan?

  Huge news.

• 3:31:36Speaker 06

  Yeah, he was number 24 on the men's list.

• 3:31:39John Coogan?

  He was number 24 in the new, in the, in the V2?

• 3:31:41Speaker 06

  Yeah, yeah, he's like super good.

• 3:31:43John Coogan?

  Igor Babushkin, absolute, uh, wow.

• 3:31:48Speaker 06

  Wow.

• 3:31:48John Coogan?

  11 minutes ago this broke and you guys got the, got the post up so quickly.

• 3:31:51Jordi Hays?

  Good work Tyler. Well, we have to get in the car and hit the road.

• 3:31:56John Coogan?

  And Igor, open invite, come on the show, talk about your new fund. We'd love to hear from you on this.

• 3:32:02Jordi Hays?

  Let's make it happen.

• 3:32:02John Coogan?

  Fascinating.

• 3:32:04Jordi Hays?

  Great stuff. Fun show today.

• 3:32:05John Coogan?

  Leave us five stars on Apple Podcasts and Spotify and we will see you tomorrow. Thank you for tuning in.

• 3:32:09Jordi Hays?

  Have an incredible evening.

• 3:32:11John Coogan?

  Talk to you later. Bye.

• 3:32:12Jordi Hays?

  Bye.