Sama's BG2 Appearance, Ilya Sutskever Deposition, Porsche 911 Turbo S Reactions | Mark Gurman, Daniel Roberts, Erica Brescia, Benjamin Witte

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

• 0:00Jordi Hays?

  You're watching TVP.

• 0:01John Coogan?

  Today is Monday, November 3rd, 2025. We are live from the TVP and Ultra Dome, the Temple of Technology, the Fortress of Finance, the capital of capital. Uh, the timeline has been in turmoil over the Brad Gersner podcast with Satya Nadella and Sam Altman. Uh, interesting dynamic, lots of hype, you know, people continue to uh, call tops on bubbles and there's a whole bunch of other stuff.

• 0:28Jordi Hays?

  Bub talk.

• 0:29John Coogan?

  Uh, on the topic of bub talk, um, you know, if you want to get ready for the collapse of the bubble, you gotta save time and money.

• 0:36Jordi Hays?

  That's right.

• 0:37John Coogan?

  Go to ramp.com. Easy use corporate cards, bill payments, accounting, a whole lot more all in one place. Get started for free. Um, there was this article in Bloomberg, the AI build out is so big, even a haunted house owner wants in. The co-owner of Pennsylvania's Penhurst asylum has big plans for a data center about an hour's drive northwest.

• 0:58Jordi Hays?

  He's like, we gotta get through Halloween and then I'm all in on AI.

• 1:02John Coogan?

  It is funny that Halloween is-

• 1:04Jordi Hays?

  We gotta get through spooky season.

• 1:05John Coogan?

  I mean, that's basically what's-

• 1:06Jordi Hays?

  Then I'm going all in.

• 1:07John Coogan?

  I think that's basically what's happening because um, what, what's that famous Halloween store? Uh, do you know what I'm talking about?

• 1:13Jordi Hays?

  Spirit Halloween?

• 1:14John Coogan?

  Is it Spirit?

• 1:15Jordi Hays?

  Like it pops up.

• 1:16John Coogan?

  It pops up, it comes into town for like a day or a month and then it disappears. And it's always like, how do they even set up a store so quickly? But they're clearly just really good at like short-term leases.

• 1:26Jordi Hays?

  You ever been to a Spirit Halloween, like at like 6:00 PM on Halloween?

• 1:31John Coogan?

  No, is it packed?

• 1:32Jordi Hays?

  It's an absolute nightmare.

• 1:33John Coogan?

  Oh, it's probably crazy because people get last minute.

• 1:35Jordi Hays?

  Cause they just let it get destroyed, basically. Like the employees are just like, all right, it's basically over.

• 1:40John Coogan?

  It's over. We're just gonna pack up and leave tomorrow.

• 1:42Jordi Hays?

  It looks like a stampede of horses just running through it.

• 1:45John Coogan?

  It's interesting that they can't ride that into like Spirit Thanksgiving, Spirit Christmas. They just gotta get in and out around Halloween. Um, but apparently haunted houses are converting into data centers. Uh, we actually heard-

• 1:58Jordi Hays?

  This is bull.

• 1:59John Coogan?

  We heard a rumor through uh, the makeup artist that did the makeup on the Friday show, that there are a number of Hollywood sound stages, studios that have been set up in-

• 2:11John Coogan?

  Atlanta, I think she said, Georgia, and they're not monetizing well as studios. And so they're converting them into data centers. And it's sort of the same crypto boom.

• 2:21Jordi Hays?

  She basically said she knew somebody that was walking around one of these lots and poked her head in the door.

• 2:28John Coogan?

  And he was all server racks. Or maybe they were filming the social network too. You don't know. Or the OpenAI.

• 2:34Jordi Hays?

  You don't know. But the greater conspiracy theory there is they were using the tax incentives provided to the film industry in order to just.

• 2:43John Coogan?

  Well, I mean, if they're generating Sora, that should count as film.

• 2:46Jordi Hays?

  Maybe.

• 2:47John Coogan?

  Tax deductions. You're like, we need to film it. We need to film the social network too. Or I do hope that a lot of the OpenAI documentary takes place in a data center. I hope it's about the minutia of racking the servers to do the GPT three training run. I want to know, that's the core drama. I want to know where the, where the GPUs seeded properly, where the racks working, was the power continuous, was the delivery continuous? Or were there brownouts, were there blackouts? What was going on in the data center? That's where I want the most of the tension to occur. And then I want them to take the movie and restream it.

• 3:23Jordi Hays?

  That's right.

• 3:24John Coogan?

  To put it on restream, one live stream, 30 plus destinations, multi-stream, reach your audience, wherever they are.

• 3:31John Coogan?

  So it's here where real estate developer Derek Strine has been scaring locals for years. His haunted attraction, Penhurst Asylum, every fall hosts tens of thousands of villagers for a well-controlled fright. But Strine has a new idea for the property, one that some locals even more, that has some locals even more disturbed. He wants to turn the nearly 130 acre grounds into a world-class data center, the kind of massive service server facility that is central to the artificial intelligence boom. Never mind that his first foray into, never mind that this is his first foray into such an investment, one that would require more cash than any of his past projects.

• 4:13John Coogan?

  He's also not fretting about corralling the necessary electricity, which would be enough to power as many for, as many as 400,000 homes. And he can even see past the.

• 4:24Jordi Hays?

  So I was a little bit skeptical of people just hardcore pivoting and.

• 4:31Jordi Hays?

  We're having the CEO of Iron on today.

• 4:33John Coogan?

  Yep.

• 4:34Jordi Hays?

  Who was doing Bitcoin mining, had a lot of energy.

• 4:37John Coogan?

  Yep.

• 4:38Jordi Hays?

  And now just signed a nearly $10 billion deal with Microsoft that got announced this morning.

• 4:43John Coogan?

  Yeah.

• 4:43Jordi Hays?

  Stock's way up. CEO will be on the show around in about an hour.

• 4:49John Coogan?

  Yeah.

• 4:50Jordi Hays?

  Excited to meet him.

• 4:52John Coogan?

  Well, let me tell you about Privy, wallet infrastructure for every bank. Privy makes it easy to build and crypto rails securely spin up white label wallets, sign transactions and integrate on-chain infrastructure all through one supply and pay.

• 5:03John Coogan?

  You know, I think he knew that people were going to take shots at him. Oh, what are you doing pivoting from a haunted house to a data center? And he said, how do you eat a whale? One slice at a time, right?

• 5:18Jordi Hays?

  Is that a, is that a common phrase?

• 5:20John Coogan?

  It's a real quote. What I've heard is how do you eat a dinosaur? One bite at a time? That's, that was the SpaceX motto when they were saying they're going after the legacy industries and it's going to take a huge amount of time to actually unseat NASA. Or if you're Anduril, to unseat Lockheed. Like it's just, it's not just going to happen over, like it's not like the internet distribution where you're trying to displace all of these systems and structures and, and political incentives and voting blocks in certain and contracts and, and manufacturing prowess. Like it's just, it's just not an overnight, it cannot be an overnight success, even if you have a stacked team.

• 6:01John Coogan?

  We're still going to play for you. So you have to eat the dinosaur one bite at a time, but I just think it's funny.

• 6:06Jordi Hays?

  Eating whale one slice at a time.

• 6:08John Coogan?

  One slice at a time. It's, it's much more visual. It's very funny. A horde of investors, developers and speculators are racing to put picks and shovels in the ground for a technological revolution. They are betting is here to stay. Artificial intelligence infrastructure spending could surpass $3 trillion in the next three years by one measure. Trump hailed more than $92 billion in AI and energy deals from the likes of Blackstone and Brookfield during a visit to Pennsylvania this year. Many say there's too much money flooding in, but our intrepid Haunted House proprietor sees the challenge as part of the value proposition. His bet is that if he does the grunt work, getting a grid connection and securing the town's blessings, another developer will pay a premium to come in alongside him.

• 6:52John Coogan?

  That, he expects, will bring in new equity and expertise. "We're gonna de-risk for the deep-pocketed guys," he said. "The big value play is getting this ready for a hyperscaler to go vertical in less than a year." So he's just setting it up. He's just setting a little layup.

• 7:08Jordi Hays?

  I've seen enough. He should spec based on his Halloween revenue.

• 7:11John Coogan?

  For sure.

• 7:12Jordi Hays?

  And then use that capital to go all in.

• 7:17John Coogan?

  Ooh, some of this stuff's crazy. Anyway, very, very fun story. He should also be vibe coding. He should also...

• 7:27Jordi Hays?

  He's gonna need to get over to Google.

• 7:30John Coogan?

  AI Studio. He should. He should head over to Google AI Studio, create an AI-powered app faster than ever. Gemini understands the capabilities. You need to automatically... And automatically wires up the right models and APIs for you. Get started at ai.studio/build. Let's go through the timeline. Boogoo Capital...

• 7:49Jordi Hays?

  Yeah, did you want to read your post to give some context?

• 7:52John Coogan?

  Yes.

• 7:53Jordi Hays?

  Start there.

• 7:54John Coogan?

  So my question was, how sticky are these deals? So the timeline's going pretty crazy on the BG squared. Although, is he gonna rebrand the Brad Gersner?

• 8:09Jordi Hays?

  BG.

• 8:09John Coogan?

  Yes. Maybe just BG?

• 8:11Jordi Hays?

  Or he could mirror, he could just have two videos of himself.

• 8:15John Coogan?

  Hmm.

• 8:16Jordi Hays?

  And then the guest.

• 8:17John Coogan?

  It was good that it feels like a sequel. He can do the prequel. Just the BG1, maybe.

• 8:23Jordi Hays?

  Yeah.

• 8:24John Coogan?

  But he had Sachin Adella and Sam Altman on the show. And everyone is debating whether or not a $14 billion revenue company, OpenAI, can afford to pay 1.4 trillion. And Brad asked this question directly. And it was kind of a crazy moment because a lot of people were saying like, "Well, he's an investor. This should be like the softest ball interview possible." It's like deeply conflicted. Like, a lot of journalists were like, "How is this happening? Like, how is it that Sam Altman's like getting... It's like a harder interview with a direct investor than with a traditional media journalist, which is just interesting." But...

• 9:01Jordi Hays?

  Yeah, and I don't I don't think it was I don't think Brad meant meant for it to be a tough question.

• 9:06John Coogan?

  Yes, I agree.

• 9:08Jordi Hays?

  Like, the whole interview was a layup. You could argue you could argue that it was it was.

• 9:13John Coogan?

  Yeah.

• 9:13Jordi Hays?

  Brad is, like you said, he's heavily aligned with OpenAI. This wasn't meant to be a gotcha. And Sam just might have woken up in a bad mood that day because the answer that he gave was absolutely horrible.

• 9:26John Coogan?

  Yeah. Well, so what's interesting is that I think that, are you familiar with that story of JFK and Nixon, the debate?

• 9:33Jordi Hays?

  No.

• 9:33John Coogan?

  So there's a presidential debate between JFK and Nixon, and it was right around the time. Tyler, do you have the actual like date or details of like of like when this happened? But it was right around the time that they first started televising presidential debates. And so.

• 9:52Speaker 02

  So this was nineteen sixty?

• 9:53John Coogan?

  Nineteen sixty. So nineteen sixty, JFK and Nixon. JFK and Nixon are going at it at the presidential debate, but what what happens? Nixon didn't want makeup or something?

• 10:07Speaker 02

  Yeah, so yeah, it's like one of the first televised ones. Nixon doesn't want to wear makeup because like I think.

• 10:14John Coogan?

  He just didn't like makeup?

• 10:15Speaker 02

  Anti-makeup.

• 10:16John Coogan?

  He's anti-makeup, okay.

• 10:17Speaker 02

  But he like looks really bad because he had been doing, he had some speech that like that day and he was like.

• 10:23John Coogan?

  So he's tired?

• 10:24Speaker 02

  He like looks not great.

• 10:25John Coogan?

  Okay.

• 10:25Speaker 02

  And then JFK is like this very like preppy guy. He looks very nice.

• 10:29John Coogan?

  Yep.

• 10:30Speaker 02

  And then so it's like, the whole thing is like, some people hear the the debate just on the radio or just or on TV.

• 10:36John Coogan?

  Yep.

• 10:36Speaker 02

  And then their ideas of who won is like totally different based off, like JFK like looks way better physically.

• 10:41John Coogan?

  Yep. And so so it was this famous moment where like JFK mogged in the visual medium, but Nixon mogged in the audio medium. And when I first listened to the BG squared podcast, I was just listening to the audio. And I was like, oh, like, that's like a totally reasonable answer. But when you watch the video and you see the body language and you get into all that, I feel like.

• 11:02Jordi Hays?

  Issue is Sam, right when Sam got pressed, he went.

• 11:05John Coogan?

  See, you don't you don't hear that on the audio. You don't hear that on the audio.

• 11:11John Coogan?

  And so you see what I'm saying, how like you can win in one medium but lose in another?

• 11:15Jordi Hays?

  Anytime I'm, anytime I don't like something you're saying, John, I'm just gonna go.

• 11:20John Coogan?

  Well, the, well, the audio listeners won't know.

• 11:22Jordi Hays?

  Yeah.

• 11:22John Coogan?

  Won't know.

• 11:23Jordi Hays?

  Shout out to the people on Apple Podcast.

• 11:24John Coogan?

  And the timeline was also fixating on this fact that, uh, at, at some point, uh, Brad takes a step back from the microphone. They were reading into that, like that's something that just doesn't come across in audio. And so you hear it and you're just like, okay, yeah, this actually sounds like pretty reasonable.

• 11:40Jordi Hays?

  And Satya, Satya's just sitting back laughing, basically.

• 11:43John Coogan?

  Yeah, yeah, exactly.

• 11:44Jordi Hays?

  It was like, it was the, one of the most strange. I was actually surprised that, that they released it. I was surprised that, like, nobody basically caught, or at least like they could have easily edited it out.

• 11:57John Coogan?

  Edited or killed it.

• 11:58Jordi Hays?

  Uh, I think it's good that it was released.

• 12:00John Coogan?

  Yeah.

• 12:00Jordi Hays?

  Because this is the question that is on everyone's mind.

• 12:04John Coogan?

  Yes, yes.

• 12:05Jordi Hays?

  Everyone's mind, right? And Sam's answer, I summed it up by saying, his answer, he says, how will you afford 1.4 trillion in spending with only 12 billion of revenue? And Sam was like, actually, we have more revenue than that.

• 12:20John Coogan?

  Yep.

• 12:21Jordi Hays?

  Of course, they lost 10 or so billion dollars last quarter. So they have a lot of revenue, they have a lot of losses. Sam's answer was basically, sell your shares.

• 12:31John Coogan?

  Yep.

• 12:31Jordi Hays?

  We're automating science and we're gonna release a hardware device and we're gonna need a lot of compute for that.

• 12:37John Coogan?

  Yep.

• 12:38Jordi Hays?

  Which was like, you know, obviously I'm summarizing and he, he was more drawn out than that, but, but I, I can't think of a more, uh, poor answer when people deserve to have, I think, a bit more clarity around it.

• 12:52John Coogan?

  It does feel like it's getting to a point where it's systemic.

• 12:56Jordi Hays?

  The new deal with, uh, Amazon that got announced this morning.

• 13:00John Coogan?

  Yep.

• 13:00Jordi Hays?

  Right? I think the question that.

• 13:04Jordi Hays?

  Even all these different partners are running the calculus on is like, how, how real are these commitments?

• 13:09John Coogan?

  Yep.

• 13:10Jordi Hays?

  Because I don't think that like, Sam is smart enough to not sign up for 1.4 trillion dollars of like liabilities. Right? He.

• 13:21Jordi Hays?

  There, there is a world where he can thread the needle.

• 13:25John Coogan?

  Yep.

• 13:25Jordi Hays?

  And, and spend all this money that he's sort of soft committing. But everything has to go perfectly. Agentic commerce has to, has to be massive. Ads need to be massive.

• 13:38John Coogan?

  Yeah.

• 13:38Jordi Hays?

  Subscriptions need to keep growing at the same rate. People need to not turn off of their $200 a month plan because they realize they can get a very similar product experience for $20 a month elsewhere, free elsewhere. And so a lot of things need to go right. And it was just a really weak answer.

• 13:58John Coogan?

  Yeah.

• 14:00Jordi Hays?

  And, and here's the other thing. The only person that I saw defending the answer in the whole interaction was Brad.

• 14:09John Coogan?

  And one of his colleagues.

• 14:12Jordi Hays?

  Two people at Altimeter.

• 14:13John Coogan?

  Yeah, not, not, yeah, not a lot of people.

• 14:15Jordi Hays?

  I, I did not see, there was not even a single other OpenAI investor that was like, that's willing to stick their neck out and say, like, here's how we actually can.

• 14:24John Coogan?

  Okay. Well, you know, it, it's that time. We gotta steel man this thing.

• 14:31John Coogan?

  We gotta steel man this thing. It's the only way. This is how the show works. We can't, we can't be, we can't be one sided. This is a, this is a, this is a bull and bear show.

• 14:41Jordi Hays?

  Can you bring me the tinfoil hat?

• 14:43John Coogan?

  We're strapping this in. Okay. So, so first off, uh, cognition makers of Devon, the AI software engineer. Crash your backlog with your personal AI engineering team.

• 14:58John Coogan?

  Okay. So I really need to get a better like strap because this thing just flips back like this.

• 15:03Jordi Hays?

  Just put the strap on.

• 15:04John Coogan?

  I guess I could, oh, if I balance it, maybe it feels better. Okay. Anyway. So first off, uh, okay. So Sam said that the revenue was incorrect. It's not 14 billion. It's higher.

• 15:19John Coogan?

  That's point one.

• 15:21John Coogan?

  Point two.

• 15:21Jordi Hays?

  Okay.

• 15:22John Coogan?

  Satya Nadella said that OpenAI has never missed projections. They've never missed projections.

• 15:27Jordi Hays?

  It's worth noting that the losses are dramatically greater than the revenue.

• 15:31John Coogan?

  Yeah, but that doesn't matter for the for the deals. Because you pay the you pay the deals from the revenue. Like, like, the, the, when you bring in the revenue.

• 15:39Jordi Hays?

  Yeah, yeah, yeah, sure.

• 15:40John Coogan?

  That's what you need to pay.

• 15:41Jordi Hays?

  Losses factoring in stock-based comp.

• 15:42John Coogan?

  Well, the losses are from the are from the contracts. Like, like, like, you, you, you don't need to find new money to pay your cloud bill. Because, like, that's the reason there are losses. The losses exist because they're paying these deals. Like, so it's not really fair to be like, like, yes, of course, if you're a shareholder, you want higher, you want profits, obviously. Like, that makes total sense.

• 16:02Jordi Hays?

  Yeah, but I think.

• 16:03John Coogan?

  But if you're Amazon, like, or if you're, if you're Azure, and you're like, and you're like, how are you going to pay me a billion dollars? It's like, well, if they bring in 2 billion of revenue, like, I'm at the, I'm at the top of the capital stack. I'm at the top of the, I'm, I'm higher than the, than the debtors. I'm higher than the equity. Like, I get paid out first because I'm, I'm a supplier.

• 16:23Jordi Hays?

  I'm sending you real live invoices.

• 16:25John Coogan?

  I'm cogs, yeah, I'm cogs. So I'm, I'm above everything. So, so I, I, I think that that, that matters a lot, last, genuinely. Satya Nadella said that OpenAI has never missed projections. They've never, they've never put a projection forward that they haven't beat. So if history repeats, you're good. Also, OpenAI's revenue growth has been insane. Look at this ramp. Look at this ramp. In 2020.

• 16:48Jordi Hays?

  This is, this is, this is the thesis that I, that I like.

• 16:51John Coogan?

  This is the bullish, this is the most bullish thesis.

• 16:53Jordi Hays?

  The bullish thesis is just extrapolate.

• 16:56John Coogan?

  Extrapolate, extrapolate. So, look, in 2020, how much did OpenAI make in revenue? 3.5 million. What'd they do next year? 28 million. What'd they do the next year? 200. Then 1.6 billion, then 3.7 billion, now north of 14 billion. What are they doing? They're tripling revenue every year. Do you understand the value of compounding?

• 17:16Jordi Hays?

  I do, John.

• 17:18John Coogan?

  So what happens if you compound OpenAI's revenue at 300% for a decade?

• 17:23Jordi Hays?

  They get into the quadrillions.

• 17:24John Coogan?

  They get into the quadrillions, that's right. And so the question you should be asking is not, how can a 14 billion dollar company pay for 1.5 trillion of?

• 17:33Jordi Hays?

  How can a multi-quadrillion revenue business not pay for a simple 1.4 trillion?

• 17:40John Coogan?

  0.1% of the revenue will go over there. It's not a big deal. It's not a big deal. If you get into the quads, you're good.

• 17:46Jordi Hays?

  And they're automating science.

• 17:47John Coogan?

  And they're automating science.

• 17:48Jordi Hays?

  And they're gonna launch a hardware device.

• 17:50John Coogan?

  But, but, but, but truly like, like, the, the revenue ramp has been in, insane. It really has been insane. And so it's not that crazy to actually think that, like, it will continue to grow. And, and so a lot of it is like, how fast will it grow relative to how fast do these contracts grow? And so if the growth continues, like, the cloud deals really can work out. But the question is, how perfectly do the next few years have to go? Because, interestingly, revenue growth right now is accelerating. They are growing faster, at least according to these basic numbers, like, 2025 will be higher growth revenue-wise than 2024.

• 18:31John Coogan?

  Because in 2024, they went from 1.6 to 3.7. That's like 200% growth. Or, uh, like, like, they basically, like, a little over-doubled. Now they're more than tripling. And so they've actually, they're actually accelerating revenue. Now, if that, if they're, if they're, you know, expecting continued acceleration forever and there's a hiccup, could be an issue. But it's not that crazy because they have so many irons in the fire. There's a whole bunch of things that could hit. You got ChatGPT could grow. API business can get big. It already is. Can get bigger. Sora, Agentic Commerce, Scientific Discovery, new hardware. Some of those feel crazier than others.

• 19:11John Coogan?

  Like, the API business, you're not gonna like, oh, there's no way they can make a billion dollars off of API. It's like, yeah, they're gonna, no problem. They're making more than that now. New hardware, it's like, that could be three years out and it could be very slow. It could be a complete flop.

• 19:24Jordi Hays?

  Yeah, I just, I didn't like the saying, we were gonna have a hit consumer hardware device is not, doesn't make me feel that comforted.

• 19:35John Coogan?

  Totally.

• 19:36Jordi Hays?

  When, when you're becoming too big to fail, right? When you have so many different businesses

• 19:42John Coogan?

  Yeah.

• 19:42Jordi Hays?

  where their market caps are riding on their partnership with you.

• 19:45John Coogan?

  Yeah.

• 19:46Jordi Hays?

  And you're just saying like, yeah, we're gonna just, uh, hit a grand slam with a new consumer hardware device.

• 19:51John Coogan?

  Yeah.

• 19:51Jordi Hays?

  And every other attempted it so far has not managed to make anything even really that useful.

• 19:59John Coogan?

  Yeah, yeah.

• 19:59Jordi Hays?

  And so I'm excited, I'm excited to... I'm excited for OpenAI's hardware device. I think it will be, I expect it to be somewhat like Sora.

• 20:10John Coogan?

  Yep.

• 20:10Jordi Hays?

  In that you're taking, not necessarily the most transformative, like Sora was an app, but at least it had, it, and it was a feed and you could create content with it, but at least it had some like novel, some novel things about it, specifically the cameo feature was like novel and great and viral and cool. And I expect their consumer hardware device to be like a fresh take on,

• 20:35Jordi Hays?

  on, on an exist somewhat existing form factor and I expect it to be cool.

• 20:39John Coogan?

  The hardware ramp feels so hard.

• 20:41Jordi Hays?

  Like, don't worry about a $13 billion, you know, given the benefit of the doubt, like $20 billion revenue, revenue run rate company committing to 1.4 trillion of spend. Don't worry about it because the, the product that we haven't launched yet is going to be such a smash hit that we're good for it.

• 21:01John Coogan?

  Yes, yes. If, if there really is a scenario where all of these other bets have to hit in some epic parlay, like that is extremely nerve wracking. I agree with you. But the question is, how solid are these deals? Like, I remember, we were live on Liberation Day. Remember April 2nd of this year? Like, it was the largest global market decline since the COVID era 2020 stock market crash. And at the time, it seemed like a complete disaster. Remember Jordan from China Talk coming on being like, this is the end of the world, basically. And I was like, but what if Trump just reverses it? And he was like, oh no, this trade war is going to be way worse. And like, he was kind of right. Like, the trade war was more significant this year than the previous administration.

• 21:46John Coogan?

  But at the end of the day, it really was possible for Trump to just roll back a lot of the tariffs. And he did that. And so the question is, if, if, if, if OpenAI doesn't accelerate to a trillion dollars in revenue or a quadrillion dollars in revenue, and all of a sudden, there's a whole bunch of folks who are like, wait a minute, like, how are you going to pay us for our cloud stuff? And they're able to say, okay, well, let's actually Find this back or let's stretch this contract out. Let's make this five year contract. Let's make it a 10 year contract. Like if all of that can happen smoothly and efficiently with just the stroke of a pen, like it's not that big of a deal. It can

• 22:24Jordi Hays?

  Except if you're Oracle and you spend tens of billions of dollars building infrastructure that you ultimately can't monetize in the way that you thought you were going to monetize.

• 22:33John Coogan?

  And so the reason

• 22:34Jordi Hays?

  Too. And they have massive debt.

• 22:36John Coogan?

  Yep.

• 22:36Jordi Hays?

  And so the reason I'm wearing the tinfoil hat is I would like to propose the the glut theory, which is that I believe I believe there's a chance.

• 22:45John Coogan?

  Yeah.

• 22:45Jordi Hays?

  That Sam actually wants to create a massive overbuild.

• 22:49John Coogan?

  Yeah.

• 22:49Jordi Hays?

  So he can, he can ultimately

• 22:51John Coogan?

  He predicted a glut.

• 22:52Jordi Hays?

  Because he controls the demand.

• 22:54John Coogan?

  On the show.

• 22:55Jordi Hays?

  Yeah.

• 22:55John Coogan?

  Glut pilled.

• 22:56Jordi Hays?

  He's glut pilled.

• 22:56John Coogan?

  He said

• 22:57Jordi Hays?

  And he's gonna, he's gonna

• 22:58John Coogan?

  Know if it's gonna happen in 26 or 27 or 28 or 29 or something, but he was like, it's coming.

• 23:03Jordi Hays?

  And I would just say like, I think OpenAI will be a beneficiary of a compute glut.

• 23:08John Coogan?

  It certainly seems like that. It doesn't seem like they have a lot of debt. It doesn't seem like I, I, we don't know. We, that, that's the thing is that we don't know how these contracts are, are written. Like there could be a, an easy mutual out. It could just be like for, for convenience. These contracts can be revocable for convenience.

• 23:25Jordi Hays?

  Yeah.

• 23:25John Coogan?

  And it's like, okay, well then it's completely different conversation than, than if you don't pay your AWS bill, OpenAI, there's 37 billion.

• 23:32Jordi Hays?

  Yeah.

• 23:33John Coogan?

  If you don't pay it, we own the company. You go into receivership. You go bankrupt. Like they're wildly different contracts and we don't know. There's, there hasn't been any reporting on where, where

• 23:42Jordi Hays?

  And I think Sam, Sam is smart enough to know that he's like, I'm going to give you this commitment.

• 23:48John Coogan?

  Yep.

• 23:49Jordi Hays?

  And your stock's going to pop massively.

• 23:50John Coogan?

  Yep.

• 23:51Jordi Hays?

  And you're going to be able to use that to raise

• 23:53John Coogan?

  This is the tale as old as time. Everyone loves press releases.

• 23:56Jordi Hays?

  Because I know what I'm going to do for you. You gotta give me an out.

• 24:00John Coogan?

  Yeah.

• 24:01Jordi Hays?

  And

• 24:01John Coogan?

  Everyone loves press releases. That that just doesn't, it doesn't tell you.

• 24:05Jordi Hays?

  Press release economy.

• 24:06John Coogan?

  But it doesn't actually tell you anything about the where the risk sits. So we don't actually know. We don't actually know. We just know that like, you know, if the revenue, if AI revenue slows down, it's gonna be bad for some.

• 24:19Jordi Hays?

  But it but it's worth noting that OpenAI, I believe, will be a massive beneficiary of a glut and an overbuild.

• 24:27John Coogan?

  Maybe. Not in the case where their business, yeah, well, yeah, where where where they go into receivership and Oracle and.

• 24:34Jordi Hays?

  Yeah, and I just, I think, I think the people around the table are smart enough to know how much leverage they have right now and wouldn't be signing up deals that require the company to burn a hundred to two hundred billion dollars a year and not have any way to get out of that. Like, like eventually.

• 24:51John Coogan?

  I don't know. I don't know. It it it's, I mean, Sam has a lot of leverage. So these could be, these could be very favorable deals for OpenAI. At the same time, it could just be, you know, a very rough deal and it could wind up being a situation.

• 25:07Jordi Hays?

  I think, I think Sam went from having low leverage pre chat GPT, which is how you get these and and, you know, needing ten billion dollars, needing to do a ten billion dollar training run. He had low leverage. That's how he gets into this deal with Satya, right, where he's giving, not only is he's gonna spend two hundred and fifty billion dollars, or says he's gonna spend two hundred and fifty billion dollars with Microsoft, he's gotta give Satya twenty percent off the top first, right? So that was the interesting. That this interview was just absolutely wild because they're both, they're both.

• 25:40Jordi Hays?

  You know, you know, you have Brad in the middle, who's like, I'm, I'm, I'm friends with both of you guys. I'm sure he's invested in in both companies.

• 25:47John Coogan?

  Clearly, one of them, someone in on that podcast is the crying Wojak with the smiling Wojak face.

• 25:52Jordi Hays?

  And it was Sam.

• 25:54John Coogan?

  Maybe, I don't know.

• 25:55Jordi Hays?

  I mean, I mean, it certainly wasn't Satya.

• 25:58John Coogan?

  It might be Brad, you don't know. It all depends on how it plays out.

• 26:02Jordi Hays?

  And Satya said, Satya said one thing that-

• 26:03John Coogan?

  I mean, Ben Thompson's take is that it is Satya. That's the Ben Thompson's take right now. The Ben Thompson's take is that, is that Microsoft should not be winding down this partnership. They should not be getting out of it. They're not winding it down. They are getting out of it. They have all these clauses that allow them not to have access to the technology in the future. Post AGI or post 2032. Like, they can just wait. Like, even if, even if the, the, the tech just plateaus and, and there's no AGI and expert panel never says AGI, like, in 2032, it just becomes OpenAI's property and, and, and once they pay their $250 billion cloud, which is crazy, but let's say it happens, then Microsoft is just a shareholder on the cap table. And from Ben's perspective, he's like, there is an opportunity for Microsoft to have a much deeper relationship with this company

• 26:48John Coogan?

  and have them be like a really solid R and D arm for the business, like, forever. That was on the table and that was not taken. So-

• 26:56Jordi Hays?

  Yeah, and remember that, that was a scenario during the, during the, during the coup, uh, which we'll get into.

• 27:01John Coogan?

  Oh, yeah, we gotta read that.

• 27:02Jordi Hays?

  We're gonna be doing a table reading of, of some of the deposition.

• 27:06John Coogan?

  Yeah, yeah.

• 27:06Jordi Hays?

  But that was an oper- that was a scenario where it seemed like a lot of the OpenAI team and Sam were gonna land at Microsoft and just keep working on a lot of the same things.

• 27:14John Coogan?

  Oh, yeah, that was a crazy moment.

• 27:15Jordi Hays?

  The, a couple of other things that stood out. Satya had a quote, I, I wrote it down. Uh, I, I may, it may not be perfectly accurate, but it was something to the effect of,

• 27:27Jordi Hays?

  uh, how he was deciding, uh, which of OpenAI's compute kind of wishes they would prioritize. And he said something, there's cer- he basically was like, there's certain requests that make sense for OpenAI that doesn't make sense long-term for Azure. And so these are, he gave the example of, uh, you know, building a data center, data, building a data center for a specific training run, which he has done in the past, but as you scale these things up, he's like, I want fungibility of the fleet. I want diversity across-

• 27:59John Coogan?

  Yep.

• 28:00Jordi Hays?

  -geographies, right? He's trying to set up Azure for the long-term. He's clearly extremely ROI-focused.

• 28:05John Coogan?

  That's super interesting, yeah.

• 28:06Jordi Hays?

  And what I read into that is like, there's very, there's a very real scenario where Oracle is massively levering up, doing things that are to get in the AI game-

• 28:16John Coogan?

  Yeah.

• 28:17Jordi Hays?

  -because they were somewhat sidelined. And they're going to do things that are really good for OpenAI and maybe not so great for Oracle over the long term. But uh.

• 28:30John Coogan?

  Yeah, it's the job of the CEO to be the fox, not the hen. It's the job. Uh, should we play any clips from the actual podcast? I realize we should.

• 28:39Jordi Hays?

  Let's play this. Let's, let's pull up this post from Buco Capital right at the top.

• 28:44John Coogan?

  It's just a reaction video, right? What does this guy say?

• 28:47Jordi Hays?

  It says, Sam Altman, if you ask him how 1.4 trillion is spending with only.

• 28:53John Coogan?

  Oh, this is rude. Let me go to an ad read. Figma, think bigger, build faster. Figma helps design and development teams build great products together and get started for free. Uh, let's play the actual clip. Uh, I, I want to play the one that, uh, compound, uh, compound 248.

• 29:09Speaker 03

  How can the company with 13 billion in revenues make 1.4 trillion of spend commitments? You know, and, and, and you've heard the criticism.

• 29:18John Coogan?

  Also, 1.4 trillion.

• 29:19Speaker 03

  Well more revenue than that. Second of all.

• 29:21John Coogan?

  That's not such a red flag. This is sort of a.

• 29:28Speaker 03

  You know, people are, I, I think there's a lot of people who would love to buy OpenAI shares. I don't, I don't think you.

• 29:33Mark Gurman?

  Including myself, including myself.

• 29:36Speaker 03

  Who talk with a lot of like breathless concern about our compute stuff or whatever, that would be thrilled to buy shares. So I think we, we could sell, you know, your shares or anybody else's to some of the people who are making the most noise on Twitter, whatever about this very quickly. We do plan for revenue to grow steeply.

• 29:51John Coogan?

  Yeah, the step back is.

• 29:52Speaker 03

  Is growing steeply. We are taking a forward bet that it's going to continue to go.

• 29:55Jordi Hays?

  So pause, pause for a second. One thing is, I think it's possible to still have a lot of questions on the 1.4 trillion of spend and not be bearish on a OpenAI at 500 billion.

• 30:09John Coogan?

  Totally.

• 30:09Jordi Hays?

  And so I think when I, when I, uh, Sam is entirely right. He's actually smart to say, focus on, let's focus on demand for the stock, right? If you want to get out, I'll help you get out.

• 30:20John Coogan?

  Yep.

• 30:21Jordi Hays?

  And, uh, I think there's some people on the timeline that are seeing this answer and they're bearish on OpenAI 500 billion, when I don't think that's, I don't think that's necessarily.

• 30:31John Coogan?

  I mean, like if you comp OpenAI to Palantir, it's like remarkable, just on terms of, uh, top line growth and market cap, like you get to 500 billion, no problem. No problem.

• 30:44Jordi Hays?

  Yeah, and Palantir is trading at 666 times earnings.

• 30:48John Coogan?

  And OpenAI is losing money, so infinity PE.

• 30:52Jordi Hays?

  There we go.

• 30:52John Coogan?

  So, it's like, it's terrible. But, I mean, it's just like a crazy, crazy revenue ramp. And I think that, I think that's what has everyone like so excited. And, and there's like, even if, I, people are just so, like, underwriting the 500, the 500 billion is like pretty, pretty simple. Because you can just say, okay, if it just keeps growing.

• 31:18Jordi Hays?

  Yeah, and, and I think if you're an investor with, in any of the companies that Sam has announced these spend, these like press releases with, it's totally fair to say, I'm not bearish on you, Sam.

• 31:33Jordi Hays?

  I'm bullish on OpenAI.

• 31:34John Coogan?

  This is the interesting hypoth-.

• 31:35Jordi Hays?

  I'm bullish on OpenAI, but I have capital deployed in all the companies that you've committed spend to.

• 31:41John Coogan?

  Sure, sure.

• 31:42Jordi Hays?

  And I want to know.

• 31:43John Coogan?

  Oh, yeah, yeah, Brad's a big Nvidia holder too, right?

• 31:46Jordi Hays?

  He, I'm sure he's invested in all these.

• 31:47John Coogan?

  He's probably invested across.

• 31:49Jordi Hays?

  So it's a fair question to say, what's, what's the, like, there were so many other ways to answer.

• 31:54John Coogan?

  Oh, that is interesting. Yeah, yeah, yeah, yeah. It could be like, it could be like, are you going to nuke my portfolio and I'm going to be fine on your deal? But all, the rest of my portfolio is getting cooked. That's kind of a funny, funny outcome. Yeah.

• 32:07Jordi Hays?

  That's, that is the, that's.

• 32:09John Coogan?

  That's the risk. That's one risk.

• 32:11Jordi Hays?

  That's why, that's why people want to know about this.

• 32:13John Coogan?

  Sure, sure, sure.

• 32:14Jordi Hays?

  It's, it's, what, how, how real is the backlog? Right?

• 32:19John Coogan?

  Sure, sure.

• 32:20Jordi Hays?

  Like, is, is, is this Oracle 300 billion commitment, how much actually comes through?

• 32:28John Coogan?

  I mean, no one knows. It's predicting the future.

• 32:30Jordi Hays?

  I know, but usually, usually when companies would come together.

• 32:34John Coogan?

  Yeah.

• 32:34Jordi Hays?

  And announce a deal like this.

• 32:35John Coogan?

  Yeah.

• 32:36Jordi Hays?

  There is, is, is a lot more, like, you could have done a few of these press release, press releases. And there wouldn't have been as many questions. Like, there's a lot of big numbers that you could throw out.

• 32:50John Coogan?

  Sure.

• 32:50Jordi Hays?

  Before people are, like, would say, like, OpenAI's revenue ramp is insane. They have the biggest consumer product.

• 32:58John Coogan?

  Yeah.

• 32:59Jordi Hays?

  Created in the last.

• 33:01John Coogan?

  Yeah.

• 33:01Jordi Hays?

  10 years.

• 33:02John Coogan?

  Yeah.

• 33:04Jordi Hays?

  Everyone, people love this product, right? It is, it is entirely mainstream, it is magical. It's the first real thing that can compete with search. And I just think that it's still like when you announce a hundred billion dollar deal, a two hundred billion dollar deal, another hundred billion dollar, a fifty billion dollar deal, and then less than seventy-two hours after this interview releases, there's another thirty-eight billion dollar deal announced.

• 33:31John Coogan?

  Sure.

• 33:32Jordi Hays?

  And now is, now is a, is an appropriate time, I think, for people to just press, press them harder on this because the, the joke of like OpenAI is holding up the stock market is incredibly real right now.

• 33:48John Coogan?

  I mean, I, I don't know what more people want, though. Like, it, it is, it is like, like, the logic is there, which is just like, we've been growing three, three acts every year. We project that we're going to continue to grow three acts. The quadrillion number is a joke, but clearly they back at the envelope to being a hyperscaler.

• 34:11Jordi Hays?

  So say that. Don't say we're automating science. Sell your shares.

• 34:15John Coogan?

  Uh, yeah.

• 34:17Jordi Hays?

  You didn't have to answer, like, I, I think that the fact of the matter is Elon, Elon does, Elon does very similar things, right?

• 34:26John Coogan?

  Yeah, totally. We're gonna go Mars, and we're gonna have a flying car, and we're gonna have a trucking.

• 34:30Jordi Hays?

  And we're gonna do data center in space. The thing, the difference is that Elon, Elon is probably ten to fifty times more likeable than Sam.

• 34:43Jordi Hays?

  And I'm just saying that based on the timeline. Like, he-

• 34:46John Coogan?

  It is Elon's app, but yeah.

• 34:48Jordi Hays?

  I, I think in general-

• 34:50John Coogan?

  Yeah.

• 34:51Jordi Hays?

  People, like, you know.

• 34:54John Coogan?

  Yeah, yeah, I mean, it's hard to tell, like, you could go to the comments of the Rogan episodes, because they've both done Rogan. I mean, Rogan clearly likes Elon more than Sam. Like, if you listen to the Rogan interview with Elon, Elon's been on a bunch, and he's like, he's, he's echoing that sentiment. Um, there are certainly people that like Sam more than Elon, but-

• 35:13Jordi Hays?

  Sure, sure, sure, sure. I'm just saying, like-

• 35:15John Coogan?

  Yeah.

• 35:18Jordi Hays?

  In general,

• 35:18John Coogan?

  Yeah.

• 35:19Jordi Hays?

  Elon is more likeable and so people give him the benefit of the doubt. He also has a longer

• 35:25John Coogan?

  Yeah.

• 35:26Jordi Hays?

  Like longer track record of delivering on, you know, there's the, there's a thing of like Elon, you know, gets the timing wrong, but he delivers.

• 35:35John Coogan?

  Yeah, yeah, yeah, yeah.

• 35:36Jordi Hays?

  And so

• 35:37John Coogan?

  I don't know. I don't know. It's weird because like I, I do feel like there's a benefit to not going like private equity guy mode on this answer. And actually doing the Elon mode and saying like curing cancer and new hardware device. And we have these really grand ambitions. There is a different flip on this, which is just like, like, yes, like, like revenue has been growing. We expect that it'll compound at, you know, 50% and then 40%, then 30%. And so we projected our revenues and we projected our COGS. And it looks like in five years, our revenues will be 500 billion and our COGS will be 300 billion. And so where are we going to get the COGS from? We're going to get the cost of goods sold from Amazon and Oracle and, and AWS and Azure.

• 36:21John Coogan?

  And so we went and did deals to supply, you know, our infrastructure for those. Like, like that's a totally reasonable, like spreadsheet answer. But like it's just going to be

• 36:31Jordi Hays?

  Yeah, I just think, I just think that we're, we're going to cure cancer.

• 36:36Jordi Hays?

  Answer, we're automating science answer.

• 36:38John Coogan?

  Yeah.

• 36:39Jordi Hays?

  Isn't good enough anymore at this scale. When there's this many trillions of dollars on the line.

• 36:46John Coogan?

  I mean, yeah, it does. It does feel like a pivot away from just like, hey, we're just going to make a ton of money off of chat GPT. Because like I, I feel like there's a world where it's like, hey, yeah, actually like chat GPT is going to make the same amount of money as Google search. It's going to be at that, at that tier, at that, in that league. And, and that justifies the investments. Google spent a ton of money on CapEx. I mean, Google's spending, all, all the hyperscalers are spending 60, 70, 80 billion a year. So he could have just, like, there is a world where he just says, hey, look, uh, the reason you're seeing all these numbers is because we're building a hyperscaler. And our, our products are going to make the same amount of money and get the same amount of attention, have the same amount of users as Facebook and family of apps and Google

• 37:30John Coogan?

  and all the different Microsoft products. And so we need servers to serve those up. And so we went around and got all of those. And you know how all of those other hyperscalers spend, you know, fifty, sixty, seventy, eighty billion a year? Yeah, we're gonna do that, too. And so you add that all up and you get to one point four trillion over the next decade. And that's the plan.

• 37:50Jordi Hays?

  But he's projecting more spend than that.

• 37:52John Coogan?

  One point four over the next five years, something like that. We don't even know.

• 37:56Jordi Hays?

  So he's growing faster, much lower revenue base.

• 37:58John Coogan?

  I mean, it's like, how much are they on the hook for some of these? Like, I was looking at the, I was looking at one of the breakdowns. Included included in the one point four trillion is Stargate, which is like, straight up not on OpenAI's balance sheet.

• 38:12Jordi Hays?

  Yeah.

• 38:13John Coogan?

  It's like, just a new, it's an entirely new company, new thing, new project, like, OpenAI has some, some, some loose structure to it.

• 38:21Jordi Hays?

  Counting, counting, yeah.

• 38:23John Coogan?

  But basically, we are, we are at a, like, I, I, I agree with you on, on the assessment of the timeline. But we are definitely in a moment where every single time one of these deals gets announced, they just, everyone mentally just takes the headline number and puts it as a liability on OpenAI's balance sheet.

• 38:40Jordi Hays?

  Yeah.

• 38:40John Coogan?

  And that's just like, not the way these things are structured. Because they can be like, they can have get out of jail free clauses.

• 38:45Jordi Hays?

  I think it's, I think, so, so here's one thing. Certainly,

• 38:49John Coogan?

  Yeah.

• 38:50Jordi Hays?

  Going private equity guy answer and just laying out all the numbers.

• 38:53John Coogan?

  Yeah.

• 38:54Jordi Hays?

  Then there's the kind of more product oriented answer, not the hand wavy, like, we're automating science and we're gonna have a hit consumer product. But there's like, hey, like, agentic commerce, we think is gonna be, is a multi-trillion dollar opportunity. And we're not monetizing there yet, but we will be soon. That kind of asks the follow-up question of like, okay, well, like, what if it doesn't pan out? And I'm not betting against agentic commerce. Like, I think that people are gonna buy a lot of products through ChatGPT.

• 39:26Jordi Hays?

  But it, it opens up a follow-up question of like, okay, well, what if that doesn't happen? Are you on the hook for all this, all this spend? And then Sam can say like, if he answered honestly, he'd have to say, well, I imagine it would be some of the effect of like, we have certain minimums that we have to hit. But we're not on the hook for, you know, the full deal sizes.

• 39:47John Coogan?

  That's what people want.

• 39:48Jordi Hays?

  Nukes, I'm just saying like, every, every hyperscaler involved, every company.

• 39:53John Coogan?

  Yeah, yeah, because you don't get credit for fake PR, for fake press releases, right?

• 39:57Jordi Hays?

  Well, yeah, so the Amazon deal, Amazon, Amazon announced a deal, it's $38 billion over seven years.

• 40:04John Coogan?

  Yeah.

• 40:04Jordi Hays?

  Stock went up 150 billion.

• 40:08John Coogan?

  What?

• 40:09Jordi Hays?

  So, the press release.

• 40:11John Coogan?

  Wow, okay, so, uh, I don't know.

• 40:15John Coogan?

  It's, yeah, it's, it's odd because it's like, these games are clearly working in the public markets, like, there are investors, like, the marginal investor on Wall Street apparently thinks the value of $1 of OpenAI revenue is $10 or something like that. What was the ratio you said? It went up 130 bucks or something for, for 40? So, so they're applying like a three or four times multiple on a dollar of OpenAI revenue, which again is only 30% margin. It's only 30% margin, like, it's not, it's not 99% margin. I, I think it's like 30, maybe 40.

• 40:51John Coogan?

  So, so it is very weird to apply.

• 40:53Jordi Hays?

  Pull up this post from Grant Hawkins.

• 40:57Jordi Hays?

  How can a, how can a company with 13 billion in revenues make 1.4 trillion of spend commitments? Brad, if you want to sell your shares, I'll find you a buyer.

• 41:05John Coogan?

  A low tan banger, 13 likes.

• 41:08Jordi Hays?

  Good stuff, Grant.

• 41:09John Coogan?

  12, we're liking it while we're.

• 41:12Jordi Hays?

  Hey, man, how are you going to pay for the 1.4 trillion of spend you promised proceeds to crash out?

• 41:19John Coogan?

  I mean, the timeline, the memes are fantastic, they're impeccable all day. You know what else is impeccable? Vanta, automate compliance, manage risk, and accelerate trust with AI. Vanta helps you get compliant fast, and we don't stop there. Our AI and automation power everything from evidence collection to continuous monitoring.

• 41:36Jordi Hays?

  Compound 248 was just going off.

• 41:38John Coogan?

  Oh, yeah.

• 41:39Jordi Hays?

  How, can we afford it? Who knows? But what I do know is you can sell your shares.

• 41:45John Coogan?

  It's so ridiculous. What a bizarre, what a bizarre clip. Yeah, uh, I don't know.

• 41:51Jordi Hays?

  Les Shrubs says, I'm sorry, Brad, but if CEO of one of my holdings spoke to me like that, I wouldn't be a quote buyer. I would be a seller of all my shares.

• 41:59John Coogan?

  That's a weird like vibes based analysis. I don't, I don't like that one.

• 42:03Jordi Hays?

  I, I've invested in a lot of companies.

• 42:05John Coogan?

  Yep.

• 42:06Jordi Hays?

  Post investment, I have realized that some of the CEOs.

• 42:10John Coogan?

  Yep.

• 42:10Jordi Hays?

  I don't like.

• 42:11John Coogan?

  Sure.

• 42:11Jordi Hays?

  But that doesn't mean I'm actually bearish on the company.

• 42:14John Coogan?

  True.

• 42:14Jordi Hays?

  Sometimes it's just like kind of a personal judgment and I think, I, I think it's okay to be invested in a company with, with a, with a management team. You're not necessarily a fan of.

• 42:24John Coogan?

  But I don't think, I don't think Brad was offended by how Sam answered the question, not at all. Like I, I think, I think they were kind of, I don't know, they, they, they're trying to have a public conversation about the relationship of a CEO with an investor. Like, and they're, it's almost like they're, they're like, there's some realness there, but then there's also some like, we're trying to show what our, what our perception of each other is. It's a very complicated dynamic. It's an, it's very, it's, it's, it's ultra neo media. It's neo corporate media. I don't know. There's something weird. It's a very, it's unprecedented. It's a very interesting, interesting piece of content. Um, do you want to read any of Brad's breakdown?

• 43:08John Coogan?

  It's pretty interesting. He says, he says, people are reading too much into Sam being feisty. Yeah. Who would spend 30 minutes on a show talking about this? It's like, not that big of a deal. I love, I love that about him and in our founders. Uh, we laughed about it afterwards. Uh, if you listen to his words, here's what he said. A lot more than 13 billion revs in 2025, which is insane considering they were doing less than four last year. They're going to quadruple revenue, quintuple revenue off of a $4 billion base. Like that is crazy. But so are the spend commitments. Hundred billion dollar, hundred billion revs sooner than people expect. So they got to get there pretty quick because once they get to a hundred billion, that's still,

• 43:52John Coogan?

  they have to do 14 years at a hundred billion to pay for 1.4 trillion, if that's what they were actually on the hook for. Spending commitments aligned with revenue expectations, risk of too little compute far greater than risk of too much at that growth rate. Could be 200 billion revs in 2030. Match that against 200 billion of CapEx and you have an absolute juggernaut agree. If revenues come in slower. Okay, Tyler, we need to map these against our, our different projection, our different timelines. So, so we need the Brad Gersner tab of the spreadsheet next to Leopold Ostenbrenner's projections, next to what we've heard from OpenAI in the past. You know what I'm talking about?

• 44:36Speaker 02

  Yeah, yeah. AGI 2027 has that too.

• 44:40John Coogan?

  Yeah, I think we also need a quick exchange rate between dollars of CapEx to gigawatts to flops and, and be able to exchange rate between all of them to really understand in apples to apples. Like, like is this, is this more, is this, is this more bullish than what we were hearing before? Because I, I feel like the general vibe is a deleveraging of the bullishness in the AI economy. Every time I hear a new number, it's always like pushed out a year and like a little bit less than the previous projection. And so we're getting, and we saw this first with like the, we could reach superintelligence in a few thousand days, soft singularity, right?

• 45:23John Coogan?

  Like that felt like a stepping back in the aggression, right? And so, so I feel like there's a lot of these things where, where the actual read on this could be, oh yeah, like they're going to hit, they're going to hit 200 billion revs in 2030. Like that could be way off of the previous projections based on like exponential fast takeoff, right? What do you think?

• 45:46Speaker 02

  So AGI 2027 has a hundred billion dollar revenue by June of 2027.

• 45:53John Coogan?

  Sick. Let's make it happen. It's gotta happen. Wait, 100 billion across all the laps?

• 45:58Speaker 02

  Uh, no, that's just like, well, so in that story, that's like the big, it's like Open Brain or-

• 46:03John Coogan?

  100 billion, wait, 100 billion rev 2027?

• 46:07Speaker 02

  Yeah.

• 46:07John Coogan?

  That actually seems pretty doable.

• 46:09Speaker 02

  It's totally reasonable.

• 46:10John Coogan?

  Yeah, I know, you're, you're-

• 46:11Speaker 02

  I'm bullish.

• 46:12John Coogan?

  Yeah, because, because wait, if, if they're tripling, if they're tripling this and, and they're gonna close 25 at 20, and then they're gonna close, they're gonna close 20, 26 at 60, they're gonna be at 180. Yeah, extremely bullish.

• 46:28Speaker 02

  Yeah, it's, I mean, it's-

• 46:30John Coogan?

  Dude, take, take 500 days off the singularity clock. The singularity is only 2,000 days away now.

• 46:37Jordi Hays?

  Yeah, I mean, what it comes down to is that whether or not, like, whether or not Brad, like Brad obviously is, is-

• 46:48John Coogan?

  Yeah.

• 46:48Jordi Hays?

  Like, from what I know about Brad, he's not, he's not, he's, I can't, it would, he would be in such a dark place if Brad was trying to offload OpenAI shares, pre-IPO, like, things would be so bad, right?

• 47:01John Coogan?

  Uh, yeah, yeah. I do think this, this-

• 47:04Jordi Hays?

  But it has nothing to do with, but the question is not, again, the question is for people that are not invested in OpenAI, but invested in all the companies that they're partnered with.

• 47:14John Coogan?

  Sure. Yeah, yeah, yeah.

• 47:16Jordi Hays?

  So, sell your shares is just not a good-

• 47:19John Coogan?

  Game of musical chairs. Uh, yeah, that would have been an interesting way to flip it around. Would be like, hey, Sam, I'm still bullish at 500 on OpenAI, I'm still a buyer, but should I be bullish on Broadcom or Oracle?

• 47:33Jordi Hays?

  Yeah. And this just goes back to my overbuild thesis of like, who's a beneficiary of the overbuild?

• 47:38John Coogan?

  Yes, the Jordi Hayes overbuild thesis, trademarked right now. When it happens-

• 47:43Jordi Hays?

  We're glut maxing.

• 47:44John Coogan?

  We're taking of it.

• 47:44Jordi Hays?

  We're glut maxing.

• 47:46John Coogan?

  We're also going to tell you about graphite.dev code review for the age of AI. Graphite helps teams on GitHub ship higher quality software faster. Not gonna lie, if a CEO's response to, hey, how are you gonna pay for all this stuff? You don't have cash for is you're welcome to sell your shares. You should probably take them up on that offer. Lots of the timeline is just going crazy. Got to give it to Altman, very forward thinker, itching to go public for the sole purpose of crushing the hypothetical short sellers that don't exist yet. Can't wait for the S1. I love that. I mean, I, it's, I, I thought the short seller thing was, was, was fine. It was good, good point. People, this Wojak, this is all crazy. Who is this candidate dread? So you're doing 11 billion or 13 billion in revenue, but making 1.4 trillion dollars in spending commitments. How does that work?

• 48:30John Coogan?

  First of all, we're making 13.1 billion revenue and second of all, short seller. That's hilarious.

• 48:38Jordi Hays?

  Yeah, there was not, there was not, no one came to Sam's defense on this one.

• 48:43John Coogan?

  Okay, okay. So from a media perspective, I am interested in this because, uh, uh, do I have this right? That, that altimeter is a hedge fund. They're, they're not like long only buy back the founder, like never sell your shares, hold forever. Like, like it is a different type of fund. And so there is like, if you do, uh, if you do a podcast with a portfolio company and you're a series and you're a series A founder and you walk into a podcast that's run by a venture capital firm, like there's no scenario where they like walk out of that podcast and they're like, we gotta sell this. I mean, maybe a little bit, but like not, there isn't that, there isn't that tension.

• 49:23John Coogan?

  Like in general, the critique of, of fund media is that they're long only. And so they'll never, they're, they're only.

• 49:32Jordi Hays?

  They'll never give you an accurate view into the company.

• 49:35John Coogan?

  Exactly. Because they're just always, they're always, they're turbo bulls or turbo lungs or whatever the word, permabulls, they're permabulls. But altimeter is not, right? And so you could wind up in a situation where you're doing a podcast and you actually walk out of that meeting and you're like, oh, wow. Like he sold after that, like figure that out.

• 49:55Jordi Hays?

  So altimeter and.

• 50:00John Coogan?

  It's making me so bullish on B G two.

• 50:02Jordi Hays?

  There's gonna, yeah, so I love Brad.

• 50:05John Coogan?

  Yeah.

• 50:05Jordi Hays?

  I love altimeter. I, and, and there is a class of funds right now. That, like, there are going to be plenty of funds that don't make it through the AI capex trade. Like, we're in the midst of the AI capex trade.

• 50:19John Coogan?

  Okay.

• 50:20Jordi Hays?

  If you get this wrong, and you get this wrong enough, you just won't, you'll, you'll, there, there will be funds that shut down over being, being long into, into a correction.

• 50:32John Coogan?

  Hmm.

• 50:32Jordi Hays?

  And so I view this, this question, in my view, is, is for, more so for the hedge fund community, to try to get a sense of like, okay, what, what actually happened, you know, and obviously they have other sources besides listening to a, to a podcast.

• 50:50John Coogan?

  Yeah.

• 50:50Jordi Hays?

  But what happens in a scenario where OpenAI can't, can't meet the, meet the kind of soft commitments it's made to all these partners? Like, if OpenAI growth, like.

• 51:01John Coogan?

  So, so I believe that if OpenAI came out and said, hey, guys, actually, everything, all of our special bets, we're, we're not going to do the hardware device, we don't like that, SOAR is not really working, we're taking it out of the App Store. Uh, we're doing the $200 a month plan, the $20 a month plan. Uh, we're basically guidance for next year, we're going to do 15 billion, and then maybe next year we'll do 16, and then 17. And like, it's going to be like an eight, 20 billion ru- run rate business. And so we're canceling all the spend commitments. I believe that the market would just re-trade right back to where it was. And I believe that, that Amazon, if they got 130 billion of credit, they just lose that. And we just see exactly what happened at liberation day.

• 51:43Jordi Hays?

  Yeah, or so Oracle traded up 30%.

• 51:45John Coogan?

  Yep, and I, and I think it trades down 30%. I don't think it trades down 60%.

• 51:49Jordi Hays?

  But now they have a, a 5X the debt.

• 51:52John Coogan?

  They, they don't have 5X the debt, that's just not true. They didn't actually go and issue that.

• 51:56Jordi Hays?

  Maybe it's not 5X, but they have, have significantly more.

• 51:59John Coogan?

  No, no, no, no, no, it's not even significantly more yet. Like, it will be like little, a drip of debt, like, at every quarter, more and more and more. It's not just going to pop up all of a sudden. Like it's not just like if you go and you have 300 billion in suspense.

• 52:14Jordi Hays?

  You're basically saying.

• 52:14John Coogan?

  You're not just getting it like overnight. Like, I mean, there's this news about about Meta. Like Meta is also doing this and and they uh and and like they so they Meta increased uh spending on CapEx 71 billion up from 69 billion previously. And their guidance is that they will be notably larger in 26 than 20 than 25. And so like, yes, that's like a couple more billion. That's significant, but it's a big company. And so they're doing this bond deal. It's 30 billion. That sounds huge. It's a 2 trillion dollar company.

• 52:51Speaker 02

  It's like 10 AI researchers.

• 52:52John Coogan?

  Exactly. It's like nothing. It it really is like not that big. Bank of America tallies 75 billion of AI related public debt offerings in the past two months. So in the past two months, 75 billion of AI AI related debt offerings total. Like, it's a lot, but it's not like it's not like destroy the global economy yet. It's just not there.

• 53:12Jordi Hays?

  AI AI Morgan Stanley had it AI AI CapEx related debt is already between like 1 and 5 trillion. So there's there's over a trillion dollars of debt already tied to.

• 53:25John Coogan?

  I think I think people are reclassifying. It's like it's like when people change their dot com to dot AI and they're like, oh, okay.

• 53:31Jordi Hays?

  I'm an AI company.

• 53:31John Coogan?

  I'm an AI company. It's like, actually, this is an AI loan. This is an AI debt debt instrument. This is an AI. This is an AI debt instrument. Okay, I have I have a few more things. One, uh, I got some bad news from Polly Market. There's a 36% chance of a US recession by the end of 2026. So uh, we could be looking basically 30 36% chance that it's 1999 right now, which I don't like.

• 53:56Speaker 02

  What's the definition of recession?

• 53:57Jordi Hays?

  Yeah, what's their definition?

• 53:59John Coogan?

  Uh.

• 54:00Jordi Hays?

  Because it doesn't need to be.

• 54:01John Coogan?

  It's seasonally adjusted. Uh, uh, so you you have two consecutive quarters of negative economic growth. So less than 0.0 GDP growth. So GDP goes negative in real GDP terms. So not inflation adjusted. So inflation adjusted basic basically. So you're taking economic growth for two consecutive quarters in real terms, not in not in nominal terms. Um, it needs to be negative for two quarters and it also is seasonally adjusted. So you don't get like a little Christmas bump.

• 54:39John Coogan?

  And this data will come from the National Bureau of Economic Research and they will publicly announce that a recession has occurred in the United States at any point during 2025 or 2026 with the announcement made. So the NBER, they just, they call it when they call it, but it's based on economic, economic contraction, basically. And you can't contract for just one quarter. You get one free one before you get called a recession. So you can have a little blip in your economy for one quarter. As long as you make it back the next quarter, you double down, you parlay, you do something crazy to get out of the hole, then you're good. But if you go down two quarters in a row, you got a gambling

• 55:23John Coogan?

  addiction and you're put in the recession hole. You gotta get back in. Anyway, I wanted to share that. Then I wanted to talk about Bucho Capital Blokes assessment of this. Sam breaks people's brains, just like Elon.

• 55:37Jordi Hays?

  AB in the chat says, don't believe the recession hype until the price of a nautilus drops to sub 100K. I think that is.

• 55:44John Coogan?

  That's a great analysis, AB. Welcome to the stream. New name, but fits right in here, honestly. Thank you for chiming in. Also, if you're looking for a nautilus for under 100K, you gotta go over to getbezzled.com. Your Bezzled Concierge is available now. Source you, Andy, watching the planet. Seriously, Andy, watch.

• 56:00Jordi Hays?

  Might be able to get a boys' size nautilus for 100K, but.

• 56:05John Coogan?

  Yeah, ladies' nautilus, that could go.

• 56:07Jordi Hays?

  Yeah.

• 56:08John Coogan?

  So Sam breaks people's brains, just like Elon. There's a thin line between grifter and visionary, and creating true believers to harvest their capital requires rhetoric that makes non-believers recoil. Sam hates, Elon hates Sam, not just because he stole his company, but he stole his whole playbook. And so I always like this idea of, is Elon Barnum and Bailey the circusman? Or is he Thomas Edison or Nikola Tesla? Well, he's both. And why he has such a power loss, such an incredible impact on the economy is that not only is he the inventor and not only can he lead engineers to invent the thing and build the thing, but then he can also promote it and he can promote it really, really well.

• 56:52John Coogan?

  And so he's both the grifter and the visionary. He's both the real deal and the fake guru. And when you put those together, it's really, really powerful. Sam seems to be doing something similar. The question is, in the Tesla and in the, this is my question for you, maybe it is different. I know, I know that your position is that it is different, but in, in the, in the build out of Tesla, in the build out of, of SpaceX, there was never a moment where it was like, if, if Elon goes bust, everything is dead. Right? It was never like, if Tesla doesn't hit earnings or continue to grow, like Ford and all these different supply chain companies will be out.

• 57:36Jordi Hays?

  The global economy will collapse.

• 57:36John Coogan?

  Yeah, exactly. Elon has never really held up the global economy.

• 57:39Jordi Hays?

  The other big difference between the two is like, one, going back to the likability thing, like, you know, not, not saying this from, from, like, speaking generally.

• 57:49John Coogan?

  It's a timeline assessment.

• 57:50Jordi Hays?

  Elon is more likable than Sam. He has also made tens of thousands of retail investors so much money for believing in him. Right?

• 58:00John Coogan?

  That's true.

• 58:01Jordi Hays?

  And so not only is he just generally, people listen to him and they like, they like listening to Elon talk more, but so many people believed in the Elon crazy vision and a lot of it has come true. Some of it hasn't, but at least tens of thousands, maybe a hundred thousands of people have like made money because of Elon's vision and believing in him. And so Sam doesn't have the benefit of having like, there's no retail army defending. Sam, even the V even even that the thing that was notable is

• 58:32John Coogan?

  Brad is his retail army.

• 58:33Jordi Hays?

  Brad is a one man retail army.

• 58:36John Coogan?

  He's a retail army.

• 58:37Jordi Hays?

  Uh, and so there was not a single other VC that I saw that stood up and said, no, actually they're they're good for their 1.4 trillion. Here's how they're going to hit it.

• 58:45John Coogan?

  Yes.

• 58:46Jordi Hays?

  Like, nobody put their.

• 58:47John Coogan?

  So Sam actually did say that one of the reasons why he maybe wants to go public is to actually have a retail army to basically, was it, was it what you were gonna say?

• 58:56Jordi Hays?

  Yeah, yeah.

• 58:56John Coogan?

  Yeah, yeah, break it down. What, what?

• 58:57Speaker 02

  Uh, yeah, I mean, basically, uh, they were talking about IPOs and then, because there was that thing, I think, from from Reuters about how they were maybe planning on IPOing mid 2027.

• 59:06John Coogan?

  Yep.

• 59:06Speaker 02

  Or or late 2027.

• 59:08John Coogan?

  Yep.

• 59:08Speaker 02

  And then Sam was like, oh, that's just like, maybe in the future. But one of the reasons we would want to.

• 59:11John Coogan?

  He said, I don't know why people write those pieces. And it's like, dude, everyone knows when they write them. It's amazing. It's so entertaining.

• 59:19Speaker 02

  Yeah, but basically, he says, like, one of the reasons he would want to IPO is so that he could basically bring, uh, you know, not just venture capitalists, but the entire economy with him, you know.

• 59:27John Coogan?

  Yes, yes.

• 59:28Speaker 02

  So he clearly, he wants the retail army.

• 59:30John Coogan?

  Yeah. I mean, uh, it is UBI. Everyone should get one share of OpenAI in the, in the.

• 59:36Jordi Hays?

  He prices, if the IPO gets priced too high, he'll get a.

• 59:39John Coogan?

  Yeah, everyone just needs to be riding with him. Uh, anyway, let me tell you about Julius, the AI data analyst. Connect your data, ask questions in plain English and get insights in seconds, no coding required. The undefeated king of the application layer, Rahul from Julius. Go use it. They have a Slack agent, so you can ask your data questions in Slack. Highly recommend Julius. Uh, Elon and Sam were also beefing on the timeline. This is interesting. So Elon says, you stole a nonprofit. Sam Altman says, I helped turn the thing you left for dead into what should be the largest nonprofit ever. You know as well as anyone, a structure like Open, what OpenAI has now is required to make that happen.

• 1:00:26John Coogan?

  You also wanted Tesla to take over OpenAI, no nonprofit at all. And you said we had a 0% chance of success. Now, you have a great AI company and so do we. Can't we all just move on?

• 1:00:39Jordi Hays?

  Somebody was giving, pushing back a little bit of the can't we all just move on? Because Sam, like a day earlier.

• 1:00:46John Coogan?

  Oh, yeah, was posting this.

• 1:00:48Jordi Hays?

  Was saying a tale in the next post.

• 1:00:50John Coogan?

  Yeah.

• 1:00:51Jordi Hays?

  Uh, Vittorio posted 9/11, 9/11, I'd like to report a murder. And it's, and it's Sam, um, Sam basically giving shit to Tesla for not being able to do a refund. And so the follow-up to you stole a nonprofit and you forgot to mention act four, where this issue was fixed and you received a refund within 24 hours, but that is in your nature. So, again, uh.

• 1:01:11John Coogan?

  Elon refunded him.

• 1:01:12Jordi Hays?

  They.

• 1:01:13John Coogan?

  Refund confirmed.

• 1:01:15Jordi Hays?

  Yeah, so Sam obviously keeps poking.

• 1:01:17John Coogan?

  We need the Dark Souls overlay refund granted of Elon paying Sam. Um, no, why, why this was interesting to me was that, uh, uh, the nonprofit, I was told that OpenAI was going to convert from a nonprofit to a for-profit. And I feel lied to because what we actually got was the nonprofit is still in existence and there's now a new for-profit and they're actually separate. I wanted the nonprofit to fully convert and now you have this nonprofit that's sitting there with a $136 billion of OpenAI shares. I want to finish the job.

• 1:02:01John Coogan?

  Let's go back to the nonprofit. Let's convert it to a for-profit. Let's take that public as an OpenAI hold co. So you have 136 billion in the treasury. Let's get that rip in in the public markets while we wait for the real OpenAI IPO. What do you think?

• 1:02:20Jordi Hays?

  Two IPOs.

• 1:02:22John Coogan?

  Two IPOs. You could have two companies and then they could merge and then they could demerge. It is interesting.

• 1:02:27Jordi Hays?

  Two is a bigger number.

• 1:02:28John Coogan?

  Yeah.

• 1:02:29Jordi Hays?

  Than one.

• 1:02:29John Coogan?

  So there's this funny thing that like,

• 1:02:30Jordi Hays?

  Like big numbers.

• 1:02:31John Coogan?

  Sam keeps saying like, oh, the nonprofit is like gonna be so well-funded, like, uh, it's the, you know, i- i- it's the largest nonprofit ever, but he hasn't really unpacked like, will it be a, what kind of nonprofit will it be? Will it be a good nonprofit or a bad nonprofit?

• 1:02:45Jordi Hays?

  Cause there's some bad nonprofits out there.

• 1:02:47John Coogan?

  I, I don't, I, I really think that people are skeptical of nonprofits now. Like, people do not just assume, oh, it's a nonprofit. Everything's gonna go perfectly, for sure. 100%. Oh, good. It's a nonprofit. Nothing bad can happen. It's ridiculous.

• 1:03:00Speaker 02

  I think the best case for the nonprofit is they kind of create some sort of like research arm, and then they start making products and then, you know, maybe, maybe it'll become like a consumer product.

• 1:03:09John Coogan?

  Yes, yes.

• 1:03:10Speaker 02

  That they can have, just the nonprofit.

• 1:03:11John Coogan?

  I love it. I love it.

• 1:03:12Speaker 02

  And then they can turn into a for-profit.

• 1:03:14John Coogan?

  Yes. The, the, the nonprofit is basically just spinning out endless for-profit companies. This is...

• 1:03:20Jordi Hays?

  That could be the greatest nonprofit of all time.

• 1:03:22John Coogan?

  That would be the greatest nonprofit of all time.

• 1:03:24Jordi Hays?

  Yeah, a lot of, lot of, I mean, there's so many.

• 1:03:26John Coogan?

  But they really should wind it down. Like, I was promised a for-profit conversion. I feel lied to. Anyway. Uh, get over to Fall, the generative media platform for developers. The world's best generative image, video and audio models all in one place. Develop and fine tune models with serverless GPUs and on-demand clusters. There, oh, speaking of cars, there's a review for the new Porsche 911. It's a hybrid. And the review in the Wall Street Journal in Off Duty, uh, says, yes, it, and it's the fastest, most powerful, best handling 911 yet. And Jordi Hays, as a former Porsche 911 Turbo S owner,

• 1:04:08John Coogan?

  I want your review of this review. And I'll read you some of this. So, it's a hybrid 911.

• 1:04:13Jordi Hays?

  Review of the review.

• 1:04:14John Coogan?

  Still seething, now smoother, more refined. A few days before I left Spain, I got a note from my name, uh, from my friend Dave Scrivner, a producer for the television show Motor Week. Did I want to share a car on Porsche, uh, did I want to share a car on Porsche's 911 Turbo S test drive? I'd love to. I knew from past outings that Dave is not only an excellent, is, not only is Dave excellent company, he's a father of 12, funny as hell, but a superb driver. Let's hear it for Dave.

• 1:04:49John Coogan?

  And on this trip, he put on a masterclass. With me in the right seat, looking like Chewbacca in the asteroid field, Dave utterly thrashed the Porsche 911 Turbo S Cabriolet assigned to us, attacking the granite switchbacks of the Andalusian hill country like he hated them. We actually went faster and harder getting to the Circuto Asgari racetrack than we did when we were on it. I have pretty good car control. I can generally keep it together on a racetrack.

• 1:05:22Jordi Hays?

  Yeah, it's crazy.

• 1:05:23John Coogan?

  But Dave, the senior driver for the television show, Motor Week, and pro-level road racer is fearless, death-defying even. "I might have preferred not to test the Turbo S's biggest-ever carbon ceramic brakes while pointed over a cliff at 100 miles per hour." Dave reasons, "When else would they matter?" "To the untrained eye, the Turbo S might look just like another 911, one of dozens of variants with inscrutable nomenclature: GT2, Carrera 4S, Cabriolet. But this, dear friends, is the big one. The quickest, most powerful, most versatile, most luxurious car in the 911 lineup. The legend, the proverbial gorilla in a tuxedo."

• 1:06:08John Coogan?

  Did you ever refer to your car as a gorilla in a tuxedo?

• 1:06:11Jordi Hays?

  It was black. It was black on black on black.

• 1:06:13John Coogan?

  We never introduced it as the gorilla in the tuxedo, and that's why you were like, "I gotta get out of this thing." Now it's a hybrid, notwithstanding the 200 mile an hour top speed, the goal...

• 1:06:23Jordi Hays?

  I'm actually about to crash out.

• 1:06:25John Coogan?

  You are? Okay, break it down.

• 1:06:26Jordi Hays?

  Because I was not aware until we were reading this that they were making the Turbo S a hybrid.

• 1:06:32John Coogan?

  Okay, and why are you crashing out?

• 1:06:34Jordi Hays?

  I thought they were gonna have a... I mean, no Porsche owner is sitting there being like, "I want them to make the cars heavier, and I want them to depreciate." "They hold their values so well, I want them to depreciate. I want you to make it a hybrid."

• 1:06:52John Coogan?

  Okay.

• 1:06:55Jordi Hays?

  Anyways, continue and then I'll give you more thoughts.

• 1:06:57John Coogan?

  So, so I can give you some more details on the actual impact of this move. So, uh, it still has a twin turbocharged 3.6 liter flat six, uh, and it has, uh, and it has, it's a brand new engine, has fuel injectors all the way up, uh, with no belt driven accessories. The unit is a few inches more compact. Uh, the turbos themselves are also smaller. These adjustments make just enough room on top of the engine for the pulse converter and the DC DC converter. Uh, I don't know why they, I'm, I'm, I'm, I don't know enough about, uh, engines to understand what's going on there, but, um, I will tell you that, uh, Porsche invented an entirely new flat six, uh, different bore diameters and everything, just to clear

• 1:07:40John Coogan?

  11 centimeters under the engine cover, but it's not like the engineers had a choice. Nobody was going to tinker with the turbo S's silhouette, were they? Likewise, the eight-speed PDK transmission is totally changed, wrapped inside. The transmission housing is an electric motor, uh, 80 horsepower, 139 pound-feet of torque, connected to the crankshaft via a dual-mass flywheel. Um, there's some more information here. These can add up to, there's also, uh, electrically powered turbochargers. These add 38 horsepower of electric boost on their own, as well as recovery energy from engine braking. Uh, the car's 590 pound-feet of electrified torque is sustained from 2,300 RPM to 6,000 RPM. The acceleration is terrifying.

• 1:08:23John Coogan?

  Uh, it can get up to 701 horsepower, shaking its fist at the sky. Um, the e-turbos, so, uh, this is, this is the point that I want you to react to. Uh, purists, that sounds like you, Jordy. Are you a purist? Purists may sniff that the hybrid turbo S weighs 187 pounds more. Fair point, but what is also staggering? It's 14 seconds faster around the Nürburgring. And they say, hell, the audio system probably weighs more than 187 pounds. So what do you think? You get 14 seconds faster around the track, but you get 187 pounds heavier? Why is this so upsetting to you?

• 1:09:07Jordi Hays?

  I think you just feel the weight as a driver.

• 1:09:10John Coogan?

  Sure.

• 1:09:10Jordi Hays?

  Doesn't matter if it's like slightly faster in a straight line or improved in a number of different ways. Like driving a super heavy car fast is just, I don't know, it's less, it's less enjoyable. I, it's hard because this, this is the most dentist coded car I've ever seen in my life. A white Turbo S.

• 1:09:33John Coogan?

  Pulling the top down while you're driving though, that's pretty sick.

• 1:09:36Jordi Hays?

  So I mean, I, I really dislike the, I really dislike Cabriolets in general.

• 1:09:42John Coogan?

  If this is the car that getting a dentist gets you.

• 1:09:44Jordi Hays?

  No, no, no shade to dentists, but this is a great car. If you were, if you're buying a sports car to drive to work at your dentist's office, this is a great option. But in general, I, I, it would have been cool to see them test something.

• 1:10:00John Coogan?

  Dude, if I, if I pull up to the dentist's office and I see a white Turbo cab, I'm, I'm like, this is going to be a good teeth.

• 1:10:07Jordi Hays?

  So yeah, I guess, true, but no, my, my issue here is that this is not what customers want.

• 1:10:15John Coogan?

  Well, we'll see how it sells. We'll see the depreciation. I don't, I, I think I disagree with you in that like the depreciation shouldn't be nearly as extreme as it with like the fully electric cars. Like.

• 1:10:25Jordi Hays?

  Yeah, but, but we've already seen that hybrids depreciate horribly compared to.

• 1:10:31Jordi Hays?

  SF90.

• 1:10:33John Coogan?

  True. Yeah, good point. Yeah. I mean, yeah, it, it does feel like it's a, it, it is, is the, is the rationale here some sort of a blended emission standard? I've heard, I've heard that's a big thing in, in Europe where you need to have a variety of cars. Did you see that? Like, so it's like 10% of your cars that are on sale need to be electric. Or, or 30% need to have better than 20 miles per gallon, something like that. So like.

• 1:11:03Jordi Hays?

  No, they are certainly getting, regulators have a gun to their head.

• 1:11:06John Coogan?

  Yeah.

• 1:11:07Jordi Hays?

  And they're saying ruin, take away everything.

• 1:11:11John Coogan?

  So you realize that this is just an option. Like, like the, the 911 is not a hybrid now. The 911 has a hybrid option. The Turbo S, you can just get a, I'm pretty sure you can just get a normal.

• 1:11:22Jordi Hays?

  The refreshed 99 2.2.

• 1:11:26Jordi Hays?

  Introduces a hybrid powertrain.

• 1:11:28John Coogan?

  So you cannot get it without one?

• 1:11:30Jordi Hays?

  Is hybrid, the new Turbo S is hybrid only.

• 1:11:33John Coogan?

  Oh, that's not.

• 1:11:34Jordi Hays?

  So this is not an option. You're forced into doing this.

• 1:11:37John Coogan?

  Ooh.

• 1:11:38Jordi Hays?

  And so I'm sure it's still going to be amazing driving experience.

• 1:11:41John Coogan?

  Yeah.

• 1:11:42Jordi Hays?

  Like it's one, it's probably the greatest car in history.

• 1:11:45John Coogan?

  That's rough.

• 1:11:46Jordi Hays?

  All around, but it's not what customers want and it's unfortunate that.

• 1:11:51John Coogan?

  You know what customers do want? They really want turbo puffer. They want to search every byte. They want serverless vector and full text search built from first principles and object storage. They want it fast. They want it 10x cheaper and they want it extremely scalable.

• 1:12:04Jordi Hays?

  We.

• 1:12:05John Coogan?

  That's why they go to turbo puffer.

• 1:12:06Jordi Hays?

  Uh, yeah, we will, we'll see on this run. We were, we were at the track yesterday.

• 1:12:12John Coogan?

  Yes.

• 1:12:13Jordi Hays?

  And seeing there was, there was a, there was an interesting group that was also at the track, uh, taking a different approach to their track day.

• 1:12:21John Coogan?

  Which dentists?

• 1:12:23Jordi Hays?

  It seemed like they were, I mean, they were having fun, uh, but watching that Turbo S go around the track.

• 1:12:30John Coogan?

  Yeah.

• 1:12:30Jordi Hays?

  It made me never want to buy a Turbo S again.

• 1:12:32John Coogan?

  Interesting.

• 1:12:33Jordi Hays?

  It just didn't look, it was, somebody had a red Turbo S that they were tracking and it just was the most.

• 1:12:38John Coogan?

  I mean, it was one of the craziest, like, okay, I, I have put, I've put a decent amount of value on like sports cars and just like having a fun car to drive daily or on the weekends and seeing a track car truly was like, there is no value in sports cars at all, actually. Track cars are the only thing that matters.

• 1:12:58Jordi Hays?

  Yeah.

• 1:12:59John Coogan?

  They are 100% the only thing that you should ever get if you want a fast car or have a fast car experience.

• 1:13:05Jordi Hays?

  Yeah, the G, just, just comparing, there was a, there was also GT4 RS that was going around at, at, at some of the same times as the Turbo S.

• 1:13:13John Coogan?

  Yeah.

• 1:13:13Jordi Hays?

  And it, and it's, it looked and sounded remarkably.

• 1:13:16John Coogan?

  Such a half measure. Even, even the, uh, I was, I was talking to our, our new friend about the, uh, the, the, the Formula Mazda series where Mazda makes the engines. And he was saying, you can get one of these race cars for, I think it was like 20K. And the entire season is like 10K to run or something like that. And, uh, it.

• 1:13:38John Coogan?

  And like just the speed, the actual handling, like the track times are just way better than any street car.

• 1:13:44Jordi Hays?

  Yeah.

• 1:13:44John Coogan?

  It's it's just night and day. So, yeah. Uh, but speaking of cars that might be able to do well on the track, I want your review.

• 1:13:52Jordi Hays?

  WMW Y M W L M says, play it, play a clip of a GT3 RS with a Gintani exhaust. I would love to. I think it might blow out everyone's ears. We'll save that, save that for later.

• 1:14:06John Coogan?

  Uh, anyway, um, the, uh, speaking of cars, Elon Musk teased on the Joe Rogan experience that the Tesla Roadster will be a flying car. He danced around it. He didn't say that exactly.

• 1:14:21Jordi Hays?

  He implied that it would fly.

• 1:14:22John Coogan?

  But he did say, my friend Peter Thiel says we should have flying cars and I think we should give him one, which is about as clear an indication.

• 1:14:30Jordi Hays?

  Let's play this clip.

• 1:14:31John Coogan?

  We gotta get better about playing the clips before we just run into it. But let's play the clip from the beginning, full, full audio.

• 1:14:37Mark Gurman?

  Are you still doing the Roadster?

• 1:14:39John Coogan?

  Let's go.

• 1:14:41Jordi Hays?

  Yes.

• 1:14:41John Coogan?

  Let's do it.

• 1:14:41Mark Gurman?

  Eventually?

• 1:14:43John Coogan?

  Eventually.

• 1:14:44Speaker 05

  We're getting close to demonstrating the prototype.

• 1:14:50John Coogan?

  It's been seven years.

• 1:14:53John Coogan?

  Look at that.

• 1:14:54Speaker 05

  I, I, I, one thing I can guarantee is that this product demo will be unforgettable.

• 1:15:00John Coogan?

  I love it.

• 1:15:02Speaker 05

  Unforgettable.

• 1:15:03Mark Gurman?

  How so?

• 1:15:07Speaker 05

  Whether it's good or bad.

• 1:15:10John Coogan?

  Whether it's good or bad.

• 1:15:11Speaker 05

  It will be unforgettable.

• 1:15:15John Coogan?

  The stakes for bad or it could be really bad.

• 1:15:18Speaker 05

  Well, you know, my friend Peter Thiel, um, you know, uh, once reflected that the future was supposed to have flying cars, but we don't have flying cars.

• 1:15:27John Coogan?

  It's amazing.

• 1:15:30John Coogan?

  So you're gonna be able to fly?

• 1:15:31Speaker 05

  Well, I mean, Joe's face. Uh. I think if Peter wants a flying car, we should, he should be able to fly one.

• 1:15:40Jordi Hays?

  Okay, pause it right there.

• 1:15:41John Coogan?

  It's like the, uh, the, the, the PR team. I don't know if they even know if there is a PR team. But like, like whoever's Andy L. at Orbit is like, please don't leak the full roadmap right now.

• 1:15:51Jordi Hays?

  What if it just actually is a flying car?

• 1:15:53John Coogan?

  It could be. It could be. Totally.

• 1:15:56Jordi Hays?

  Uh, okay. I want to keep talking about.

• 1:15:59John Coogan?

  Get your brand mentioned in chat GPT.

• 1:16:01Jordi Hays?

  There you go.

• 1:16:01John Coogan?

  Reach millions of consumers who are using AI to discover new products and brands. What do you want to talk about, Jordy?

• 1:16:05Jordi Hays?

  We got to talk with, uh, Dan, CEO of Iron. Coming in right now.

• 1:16:11John Coogan?

  Bring him in. Massive deal. Dan, how you doing?

• 1:16:14Jordi Hays?

  What's happening?

• 1:16:14John Coogan?

  Welcome to the show.

• 1:16:15Speaker 06

  Hi, guys. Good to see you. Thanks for having us on.

• 1:16:18Jordi Hays?

  Great to see you. Massive, massive day today. We saw you announced, uh, a pretty big deal.

• 1:16:25John Coogan?

  How big is it?

• 1:16:26Jordi Hays?

  What better day to have you on the show?

• 1:16:28John Coogan?

  Yeah.

• 1:16:29Speaker 06

  Yeah, that was a big weekend. So a lot of, uh, sleep deprived iron bodies around, but it's, uh, it's super exciting.

• 1:16:36John Coogan?

  What? Give us the headline number. We like to ring the gong around here when there's a big deal that gets inked.

• 1:16:44Speaker 06

  All right. Iron and Microsoft, 200 megawatts, 9.7 billion dollars in revenue, 2 billion dollars in annualized.

• 1:16:54Jordi Hays?

  Absolutely massive. Absolutely massive. Um, break down, break down the year for us. We, we've, uh, we've covered, uh, Iron's rise a little bit. Uh, we kind of figured you had some type of deal like this in the works, but what, what catches up to speed, uh, on the last sort of six months?

• 1:17:12Speaker 06

  Yeah, look, it's been super busy. Um, so AI popped up really in force probably last April. And since then, we've been building out our, um, GPU cloud business, which basically involves us buying the GPUs and providing access to those via cloud rather than an alternate model, which is colocation where you build the infrastructure and you allow one of these tech giants to lease it back. So we believe in owning the compute and providing that, uh, to the end customers. Um, it's been a journey talking to a number of the, uh, the large global technology companies, but really, uh, happy to consummate it with, uh, Microsoft.

• 1:17:51Jordi Hays?

  Yeah, I remember it was earlier this year Satya had a line that's something to the effect of, "I'm happy to be a leaser." And so I'm sure you guys, you guys picked up on, picked up on that. Can you give us the? What, what? Sorry. So, so, uh, yeah, one thing that Satya's, I guess, been saying over the last couple of years is, maybe not a couple of years, but over the last years, he feels like he's more, uh, energy constrained than he is, uh, GPU constrained. What kind of advantages has Iron had, uh, on the, on the power side that, that made a deal like this possible?

• 1:18:28Speaker 06

  Yeah, that's absolutely right. And I think it's almost a little bit more nuanced than just power constrained. I think it's actually data center constrained as well, but let me come back to that. I think when my brother and I set up this business seven years ago, our underlying thesis was that the real world can't keep pace with the digital world. So the digital world is driving all these exponential demand curves. You know, adoption goes from zero to one overnight, whether it's Bitcoin, nothing 15 years ago, to 15 trillion dollars today, whether it was AI, uh, not really spoken about two years ago, to the latest humanity-defining technology. And at the center of that is these exponential growth and demand,

• 1:19:10Speaker 06

  but the ability to service that is constrained and limited by the real world. So when we started this business seven years ago, we explained to people, it sounds simple. You can't plug a computer into a high voltage transmission line. It takes years and years of permits, approvals, dealing with risk adverse utilities, giving you access to that network. So yes, having access to power and having put in the groundwork very early is now paying dividends. But it's actually going a step further than that where you might have access to power, but do you have the framework to go and build the data center? Do you have the governance regime and the flexibility of a, of a corporate to give you that decision to go and build and start building ahead of the curve?

• 1:19:53Speaker 06

  Do you have the internal know-how on how to build these new generation data centers? Because fundamentally, they're a different asset class. These are not metropolitan data centers providing corporate shared drives, doing cat videos. Like they're fundamentally different.

• 1:20:10John Coogan?

  How do you think about the like the predictability about the shape of compute workloads going forward? How important is it for you to project those out? I'd love some like history of like, what was the first compute workload that you were doing? Because I imagine it wasn't L L M inference. There was probably crypto mining in the business. There's all these different workloads that were super valuable at certain times, then changed. Now we're in the reasoning era. We might be in a completely different paradigm. How much do you want to bake onto ASICs? How much do you want to, you know, use Nvidia GPUs, more generalized chips versus flexibility? Like, how do you think about projecting out the future?

• 1:20:52Speaker 06

  So I would just bring it back to a really big picture and say, as society, do we believe that we're becoming more digitized? Do we believe that we're going more online? And that's going to grow. And again, during our seed investment round, we quoted movies like The Matrix, like Ready Player One, Wreck it Ralph. And directionally, I think humanity is heading that way, which is going to drive this appetite for high performance compute. None of us have a crystal ball. We don't know what's going to be next. We had AI in our seed deck. We also had a whole heap of other stuff that hasn't eventuated. But what it means for us from a business perspective, is a number of small scaled bets along the way, creating optionality. To go and pay an option fee on

• 1:21:36Speaker 06

  500 hectares of land in West Texas, is a really, really small exposure. To go and pay 10, 20 million dollars to get the grid connection is now a relatively small exposure for our business. So it's right size in your bets, to a point where you get to sign a Microsoft deal, underwriting 9.7 billion dollars of revenue. You go, okay, that justifies more CapEx.

• 1:21:57John Coogan?

  Yep, yep, that makes a lot of sense.

• 1:21:59Jordi Hays?

  What other are you looking at other opportunities and sites in other areas? Or is Texas the focus going forward?

• 1:22:08Speaker 06

  Look, Texas was the focus early on because we did the lap of the world, worked out the best place to get power, low cost excess renewables, lots of land, cheap power, ease of grid connections, lots of fiber backbones, and now the world's there. We do have additional sites, we've publicly announced three gigawatts, but we don't talk about development sites that aren't 100% secured by virtue of a connection agreement. So there is a multi-gigawatt pipeline behind that, outside Texas and globally.

• 1:22:40John Coogan?

  Yeah. How, how do you think about the, like, the current playbook for companies that are doing partnerships with hyperscalers or OpenAI? Like, what are the do's and don'ts of announcing a big partnership? Because we're hearing so many of them, and I think a lot of people are having trouble-

• 1:22:58Jordi Hays?

  We're in somewhat of a press release economy right now.

• 1:23:00John Coogan?

  Yeah, people are having trouble handicapping them. Like, you can just throw out a big number, you could, you could date it 100 years in the future and get really crazy numbers. Like, what does the market actually want to get out of a press release?

• 1:23:12Jordi Hays?

  Yeah, and this, this deal feels significant-

• 1:23:13John Coogan?

  Yeah, this-

• 1:23:14Jordi Hays?

  -in some ways because Satya has been so much more conservative than other, let's say, like an oracle, right?

• 1:23:21John Coogan?

  Totally, totally, totally.

• 1:23:22Speaker 06

  Yeah, look, I think it's good to be skeptical, right? The world works in memes and headlines and public markets. I come from a private market background, infrastructure funds management. And going into the public markets, there is a lot of narrative, there is a lot of hype. We've tried to keep it very limited to binding contractual deal announcements. So this is binding, this is real revenue-

• 1:23:44John Coogan?

  Sure.

• 1:23:45Speaker 06

  -just like we don't talk about made up-

• 1:23:46John Coogan?

  Let's give it up for real revenue. That's amazing. Yeah, I honestly think that needs to be clarified, but thank you. Like, that is very, very helpful.

• 1:23:52Jordi Hays?

  Yeah, we're in a, there's so much incentive for, for two parties to announce the biggest possible number without any real underlying commitments. And so, yeah, I was excited to see you guys get this done and announce it with such a great counterparty.

• 1:24:08John Coogan?

  Yep. Well, we'll let you go. We know you have a busy day, but thank you so much for stopping by the show.

• 1:24:14Jordi Hays?

  Yeah, congrats to the whole team. Massive, massive milestone.

• 1:24:16John Coogan?

  We'll talk to you soon.

• 1:24:17Speaker 06

  Anytime. Thanks, guys.

• 1:24:18Jordi Hays?

  Cheers, Dan.

• 1:24:20John Coogan?

  Elon Musk says a large solar powered AI satellite constellation would be able

• 1:24:26Jordi Hays?

  Would fix him.

• 1:24:27John Coogan?

  Would be able to prevent global warming by making tiny adjustments in how much solar energy reached the earth. That would be, I wonder how much, how much capex does that cost? Yeah, it's interesting that Elon, I don't know, there's just like, when he says something like that, it hits just as like sci-fi techno optimism. And it doesn't, it doesn't hit as like, I mean, people still trade the stock off of this, like news. People will look at this and be like, oh, well, like, you know, like, maybe Tesla will get a piece of that, right? And it becomes a little bit of a narrative, but people don't, people don't dig in that far.

• 1:25:08Jordi Hays?

  One thing, one thing that was super notable to me, or standout kind of section of the, Elon was on All In Friday, and he was talking about the shareholder vote around his compensation, but also the, the voting power that he'll have. And one of the things that he said was, I don't want to create a robot army if I don't have, if I can be like fired by ISS or any of these voting groups. And I thought that was, I think it's just like the most Elon way, way to, to.

• 1:25:43John Coogan?

  Who should control the robot army? It's a good question.

• 1:25:46Jordi Hays?

  He's like, yeah, he basically was saying, I don't want to be fired for political reasons.

• 1:25:50John Coogan?

  Typically, typically armies are controlled by democratically elected leaders. Like, we have a system for electing who is the commander of chief of the army. Very interesting question. If you actually wind up with a company that has control over a robot army, that's a, that's an interesting philosophical question.

• 1:26:11John Coogan?

  Also, you know, you're going to need to manage that army. You got to get on Linear. Linear is a purpose-built tool for planning and building products. Need the system for modern software development, streamline issues, projects, and product roadmaps.

• 1:26:22Jordi Hays?

  So, we have Mark Germain coming on in just a few minutes. But we had a question, a message to us. I thought it'd be good to get into, kind of break it down. So here is the question. Advice for my friend's company. He has around 400 million DAU, but he's been diluted by 90% since the IPO. He still has full control of the company, but he can't sell because of antitrust. Should he bail?

• 1:26:49John Coogan?

  I think no. I think stick it out. I don't know. There's nothing about that that's identifiable. I think that you stick with it. I think it's got to be fun to run such a big company with that many DAU. Even if you've been diluted, you know, you're probably rich. You've sold a lot along the way. You're post-economic, but it's better to be post-economic and have control over an interesting organization than post-economic and just kind of retired. That's my take.

• 1:27:15Jordi Hays?

  My mind's just racing on what company could this possibly be? And it feels like at 400 million DAUs, it's got to be Snap.

• 1:27:23John Coogan?

  Maybe. Could be something else, though.

• 1:27:25Jordi Hays?

  Somebody should look into it and see if, see what the dilution has been like over there. I think Snap is a company that, I think if you run the numbers, it's like every 10 years, they just give away the entire company to the team.

• 1:27:41John Coogan?

  It was a billion in stock-based comp last year, something like that.

• 1:27:44Jordi Hays?

  And it's a what is it?

• 1:27:45John Coogan?

  $10 billion company, so giving away 10%. Absolutely crazy.

• 1:27:51Jordi Hays?

  Well, we have the legend, the Germinator, in the waiting room.

• 1:27:57John Coogan?

  Welcome to the show.

• 1:27:58Jordi Hays?

  Welcome to the show.

• 1:27:59John Coogan?

  Mark Germain, how are you doing? Thanks for having me. Thank you so much for joining.

• 1:28:03Jordi Hays?

  You know, this has been, you're kind of like our, like, this is the guest we've been waiting for since the very beginning. We were like...

• 1:28:13Jordi Hays?

  We've been waiting for this moment for so long, so we're super excited to have you on.

• 1:28:17Mark Gurman?

  Here I am.

• 1:28:18John Coogan?

  Thank you so much. Maybe since this is the first time we've actually met, I'd love to go a little bit back in time, just to set the table. Like, how did you land on Apple? How did you become, you know, so focused on Apple? Was this like a gradual thing? I mean, I know you from your reporting. It's been fantastic for as long as I can remember, but I imagine that there was a time when you were, you had to make a decision.

• 1:28:43Mark Gurman?

  Well, I was an Apple fanboy back in the day. I remember when I was very young, I wanted an MP3 player for the holidays that year. And I was lucky enough that, you know, my parents were able to get me one. And the local mall, there was a mall in LA called the West Side Pavilion. It's actually closed now. And Google, I think, actually bought the mall to turn into headquarters in LA. And that whole place fell apart, the whole deal fell apart. But it's neither here nor there. Outside of, I think, Bloomingdale's or Macy's or whatnot, they had a cart, a Dell cart, believe it or not. And they were touting at the time what

• 1:29:25Mark Gurman?

  they called the Dell DJ. And that was the MP3 player of note at that time. And so I wanted a Dell DJ for Hanukkah that year. And so I was gonna get a Dell DJ. And so my dad, you know, went to Best Buy, went out, he's like, I forget the Dell DJ, he got me a blue iPod mini instead. And I got that iPod mini, it was my first Apple product, and I fell in love with it. So over time, came an Apple family, got an iBook. Then, you know, it became an iMac and MacBook Air and whatnot. And so I just fell in love with Apple. I was a huge Apple fanboy, always glued to the forums and the rumor mill and whatnot. I was a commentator and sort of fell in love with it and started wanting to do my own reporting on it. And I joined a website

• 1:30:10Mark Gurman?

  back in the day called 9 to 5 Mac. It still exists. I left that when I graduated from Michigan in 2016 and joined Bloomberg, and I guess the rest is history.

• 1:30:21John Coogan?

  That's amazing. How do you think you're perceived by the folks at Apple? Because in one way, like, you know, you're promoting Apple, you're a real fanboy, but at the same time, it feels like every time you get a scoop, I'm like, oh, they must not be happy.

• 1:30:35Jordi Hays?

  Yeah, it's a hard company to be a critic of, even a critic that wants the best for the company. Because I feel like they, I, I just have this sense that, that they're like, they kind of want you to ride with them no matter what. But.

• 1:30:52Mark Gurman?

  I think they love me personally. I mean, they, they should love me. I mean, I'm here talking about their products all the time. Uh, I think I usually have a pretty good attitude about it. I think I'm balanced and realistic and, you know, I try not to go down the, the, the angle of, you know, the sky's on fire, everything is burning. Tim Cook should be out of there as, you know, some other news outlets like to do, whether it's, it's fair or not. Talking about their products, keep up, keeping people interested in their products and, you know, clearly some people there like me because, you know, this information just doesn't come off trees, right?

• 1:31:26Jordi Hays?

  Yep.

• 1:31:26Mark Gurman?

  So definitely, uh, I think it's nuanced.

• 1:31:29Jordi Hays?

  Do you think Tim Cook's underpaid?

• 1:31:33Mark Gurman?

  Do I think Tim Cook is underpaid?

• 1:31:35Jordi Hays?

  So he barely, he barely, he makes about the same amount as this baseball player that plays for the Dodgers. Yeah. Annually.

• 1:31:42Mark Gurman?

  Well, maybe the question is, are athletes overpaid, right? I mean, LeBron is getting like 55 million a year on his contract. And then you think about how much money do they bring in from ticket sales because of him? They're probably making, I don't know, two or 300 million a year because of him. So, you know, what's the margin? What should a margin be, right? And you have Tim Cook, he's, what is he making? 70 million a year?

• 1:32:04Jordi Hays?

  75.

• 1:32:04Mark Gurman?

  He was make, 75, he was making a hundred million a year a few years ago. Then everyone flipped out and he had no choice but to cut his pay because they were kind of sick and tired of the backlash. Right? So he was making a hundred million. I mean, what is the value that he brings to the company? I mean, obviously it's multiples of billions.

• 1:32:24Jordi Hays?

  I completely agree. We, we were very close to taking a break from the show and going and just doing a hunger strike outside in Cupertino. To raise his pay. Would get his pay up because we're on your side. We think he's clearly created. Just the trade war, like just the fact that he's been so masterful in not becoming a target or staying out of politics, like that level of. The only real critique you could, you could make, in my view. Yes. Is the way he waved the F1 flag. Like it just wasn't, it was somewhat, it was somewhat lackluster.

• 1:33:00Mark Gurman?

  I saw that.

• 1:33:01Jordi Hays?

  It was just a rough wave, you know, he was. Maybe he's off there thinking about supply chain, you know? Maybe he's focused at work. His mind's at work. He's not focusing on.

• 1:33:09Mark Gurman?

  He's thinking about. He's thinking about how was that flag produced? Yes. Could have I gotten better pricing on it? Exactly, exactly.

• 1:33:17Jordi Hays?

  Okay, uh, what, uh, what, what's, uh, what's your update, updated take on, uh, the new suite of iPhones? John and I, uh, I had a very funny experience because I ordered my phone. Uh, I, I tried to just order a phone online, walk into the store, be able to pick it up immediately. Wasn't able to, I, I paid and they said they were going to ship it to me. John, like a week later, just walked in the store and bought one here in LA. I was like, I was like, what is going on? Uh, and we've both been, uh, we're not really case guys and we've both just been amazed at how they could release a phone that, uh, that just gets damaged so intensely, so quickly.

• 1:33:56Mark Gurman?

  Wait, wait, so you have a case, what case is that? It's the Apple clear case. I, I rotate between the case and not using case. So here's what happened. So, uh, last year they F'd around and found out. Launched this terrible AI service, Apple Intelligence, that didn't really work well. Uh, and what they found out is that it didn't resonate with customers as much as prior iPhones. This year, they did not F around and find out. They did exactly what customers want. Market research data, man on the street conversations tell you what customers want. They don't want their phone to overheat. They want the camera to be incredible. They want the processing speed to be fantastic.

• 1:34:41Mark Gurman?

  Uh, they want battery life to be better. And so what Apple did for the phone this year is they focused on the core competencies. Battery life is through the roof. The phone doesn't require you to use an oven mitt to hold it for extended periods of time. The camera is amazing. I think they hit them, hit right on target with the colors. I think the new design is terrific. They did everything the consumers wanted. They did everything customers want in a phone upgrade. It came at the right time, which is five years after the COVID influx. You know, I get a new phone every year. You guys might get a new phone every year. Your viewers may get a new phone every year or two. But vast majority of people are not getting new phones

• 1:35:25Mark Gurman?

  for every four or five years. And so they set themselves up for a pretty nice upgrade cycle. And you're going to see that with their first $140 billion quarter when they report at the end of January, early February. So I think, all things considered, it's terrific.

• 1:35:40Jordi Hays?

  What about the iPhone?

• 1:35:40Mark Gurman?

  The iPhone is still the center.

• 1:35:42Jordi Hays?

  Yeah. What about the iPhone Air? Were you, did you expect it to sell better than it has? Or were you always kind of bearish?

• 1:35:50Mark Gurman?

  I've been extremely bearish on the iPhone Air. I don't think that there's a significant market for it. See, Apple, because of their large numbers, have reinvented what a significant market is. For Apple, the iPhone Air is not a significant market. If that was a Google phone, I mean, Google would be doing a lot to sell pixels and the numbers that the iPhone Air is selling. Samsung would be happy if their iPhone Edge sold in the quantities the iPhone Air is selling. It's a beautiful piece of technology, but that's what it is. It's a technology exercise to really set the stage for an eventual foldable iPhone. They have to create thinner form factors, thinner batteries, more advanced materials like titanium

• 1:36:33Mark Gurman?

  for the casing, in order to create something like the foldable phone to compete where Google has been for three years, where Samsung has been for seven years. And so the iPhone Air gets you on that trajectory. But in terms of overall sales, they didn't even really mention the iPhone Air as a key driver, nor is it mentioned in their 10K.

• 1:36:50Jordi Hays?

  That makes sense. I guess the follow-up question would be, how important do you think the foldable market is?

• 1:36:59Mark Gurman?

  I think it's TBD. I think they don't know yet. I think Apple is in a position right now where they basically have to pull every lever possible to keep people in the ecosystem. If you somehow have a market of, I don't know, 10, 20 million people who demand foldable phones, and they're willing to leave Apple to Google or Samsung because they want a foldable phone, that is a bad thing for Apple. Not because you're losing those 20 million customers on that one device, but because Google has an excellent ecosystem now with all sorts of peripheral products and operating systems. Samsung has the same. The Chinese players have the same. So if you lose a customer because of one product, you risk losing them across the board. You risk

• 1:37:40Mark Gurman?

  losing them for entertainment services. You risk losing them for your laptop, your tablet, your smartwatch. Because everyone has everything now, you kind of need everything.

• 1:37:49Jordi Hays?

  Yeah.

• 1:37:50John Coogan?

  How do you think about the change from titanium to it's aluminum on the new phones? Does that fit within the framework of like, revealed preferences, man on the street interviews? People say they wanted an iPhone that doesn't scratch, but in practice they'll just put on a case? Or is there more thought to that?

• 1:38:09Mark Gurman?

  It's, okay, so people aren't asking for aluminum, but aluminum is tried and true. They've used it on laptops for many years. The benefits of titanium is the durability. If you've seen a bend test of the iPhone Air, that thing does not, you can't manipulate that.

• 1:38:24Jordi Hays?

  I have a story. I have a story. I have a story you'll appreciate. We were having dinner with a group a couple of weeks ago, and one person in the group had an iPhone Air and was bragging to the whole room of how strong it was. They were saying, this is the most durable iPhone ever made. It's impossible to break. And he's going like this. He's like, he's showing, showing the group. He's like, I can't even bend it. He's like, I dare anyone in this room to try to break my phone. And this guy raises his hand and takes the phone and puts it down here and just breaks it in half in a second. And the guy's just sitting there in disbelief, saying like, I'm gonna, I'm gonna email Tim Cook right now. This is ridiculous.

• 1:39:10Mark Gurman?

  Well, first of all, I love that story. I'm all for stuff like that. But to your point, you know, aluminum dissipates heat so much better. And it was like a big mistake that they moved to titanium with the 15 Pro and 16 Pro lines a couple of years ago. You could do some interesting color treatments on it. They had some cool colors like the natural titanium, the gold titanium, stuff they're not doing with the aluminum.

• 1:39:36Jordi Hays?

  I personally.

• 1:39:37Mark Gurman?

  Looked nice.

• 1:39:38Jordi Hays?

  I like that I could drop it without a case on to cement and it would be.

• 1:39:43John Coogan?

  It was so durable.

• 1:39:44Jordi Hays?

  It was absolutely incredible.

• 1:39:45Mark Gurman?

  Yeah, the durability was great. And that's why I used it for the iPhone app. But if you have to make that trade off, which clearly there is a trade off.

• 1:39:52John Coogan?

  Yep.

• 1:39:52Mark Gurman?

  Titanium more durable, aluminum, you know, it's not as durable. You drop this thing, you're gonna get a big gash in it.

• 1:39:59John Coogan?

  Yep.

• 1:39:59Mark Gurman?

  Uh, the way the color is anodized, it doesn't stick like it does on titanium. Uh, but it's not going to overheat. And as the performance of these things improves, as the chips get better, you need better and better heat dissipation. And so this was a reversal, uh, that they had no choice but to make.

• 1:40:15John Coogan?

  Uh, we had this framework for, uh, Apple's, uh, strategy right now, which is do nothing win with regard to the AI race. Like, cause people have said like, yes, they lost and you mentioned it with Apple Intelligence and I agree with you. I've taken that. I've been like, ah, Siri doesn't work as well as I want. I doesn't even, it doesn't even have whisper APIs like.

• 1:40:34Jordi Hays?

  Yeah, the main thing was, was promising this magical experience and everyone being underwhelmed. The one thing they overdelivered on was humor. They're the first AI company to reliably make people laugh through the summarization of.

• 1:40:48John Coogan?

  Summarization is very funny, but, but basically they didn't get over their skis. They didn't invest a trillion dollars in CapEx and it's a four trillion dollar company now. Like they've done nothing in AI and they've won basically. But is that narrative click with you? Is that taking hold in Cupertino? Are they happy with the way it's played out?

• 1:41:09Mark Gurman?

  I think they recognize that it's been a disaster. I mean, still the biggest thing to me is they were completely caught off guard by, uh, ChatGPT, Gemini, Copilot.

• 1:41:18John Coogan?

  Yep.

• 1:41:18Mark Gurman?

  Back at the, the end of 22 into 2023. And a company that does this much, uh, research, a company that has supposedly this kind of understanding of where the world of technology is going to just completely like, it's like. They had no idea the Internet was coming. It's completely unbelievable to me. It's sacrilegious that a company like Apple could have had that bigness. Apple Intelligence, like, they brought it out and their marketing scheme is always just like, we're the best, we're Apple, we're gonna do it better, we're correct, everyone else is wrong. And that's sort of the message they put out about AI when they launched Apple Intelligence. But it turns out, no, Apple, you were completely wrong. And I think any observer would have understood that people want chatbots, they like chatbots.

• 1:42:03Mark Gurman?

  It is a winning formula. And to date, they have been completely anti-chatbot, which I think has been a very big mistake. The integration of ChatGPT into Siri is very much subpar. Still, they support all the chatbot apps, but they really need first-party stuff. The big AI thing for Apple is the revamped Siri coming out in the spring. They're using a Google Gemini model to power it, which I think is going to make it pretty top-tier. I mean, Gemini's models are, you know, pretty excellent, as we know, for anyone who's used, you know, the Google AI services. But what really you have to understand is that the brand damage that has been done to the Siri name over the last fifteen years, there's a big question with whether or not it's insurmountable.

• 1:42:48Mark Gurman?

  In my viewpoint, if they've gotten Siri to a point where this thing actually meets the promise of this AI voice assistant, they have to change the name. On the other hand, Siri, as damaged as the brand is, it is still a ubiquitous name. So I'd be curious to see. I don't think they're gonna make a name change, but they should.

• 1:43:08John Coogan?

  So Gemini powering Siri under the hood, who pays who in that scenario?

• 1:43:14Mark Gurman?

  Apple is paying Google.

• 1:43:17John Coogan?

  Do you think it stays that way forever? Because Google provided a wonderful search engine in the Safari iOS browser. And Google paid Apple for the right to do that.

• 1:43:31Mark Gurman?

  Well, it's more of a revenue share for the the payments there in the search engine. So this is completely separate. This is like you're developing something for me. You're my supplier.

• 1:43:41John Coogan?

  Yep.

• 1:43:42Mark Gurman?

  And I am paying you for it.

• 1:43:44John Coogan?

  Yep.

• 1:43:44Mark Gurman?

  Like, I'm paying you for it.

• 1:43:46John Coogan?

  Yep.

• 1:43:46Mark Gurman?

  Whereas it was revenue share because Google is making a ton of money by getting people through the Apple interface.

• 1:43:55John Coogan?

  But won't that be the, won't that be the long term state of affairs with these?

• 1:44:00Mark Gurman?

  I don't believe so.

• 1:44:01John Coogan?

  You don't think so?

• 1:44:01Mark Gurman?

  This is, this is, no, I think, what I know is that this is an under the hood, white labeled model. They've developed the model here. But if it wasn't for my reporting, no one would probably know that this is, this is a Google model. You can be

• 1:44:16John Coogan?

  Sure.

• 1:44:17Mark Gurman?

  pretty sure that Apple's not going to advertise this as a, as a Google model.

• 1:44:21John Coogan?

  Sure.

• 1:44:21Mark Gurman?

  You can also bet at some point, they'll probably figure out their own model to replace the Google thing. So I don't think it's a long term bet.

• 1:44:27Jordi Hays?

  Yeah, how, how competitive was that process? I remember it was probably your reporting, talking about how Anthropic was in the running as well. And they wanted

• 1:44:37Mark Gurman?

  It was a bake off.

• 1:44:38Jordi Hays?

  It was a bake off. They, Anthropic wanted a huge number for it.

• 1:44:42Mark Gurman?

  Anthropic wanted multiples of billions. I believe, starting in a billion in year one and doubling every year thereafter, at least for the next three years. OpenAI wanted things like an investment and a steak and all sorts of stuff. And so, you know, the, originally we're talking to OpenAI, then they were talking to Anthropic, then they were talking to Google. They did a bake off of all three. I think they kicked OpenAI out of the running pretty early on. Until about two months ago, it was going to be Anthropic. And then, once they got into the financial terms, it quickly pivoted to, to Google. My belief is that the quality of the Google engine and the Anthropic engine are pretty much on par. So I think

• 1:45:25Jordi Hays?

  So what, what do you think is the, is this, in your view, a threat to? ChatGPT usage, is the ChatGPT Siri integration gonna exist after this next release? Are people gonna be using this as as a replacement for web search?

• 1:45:43John Coogan?

  Oh yeah, that's weird, because even though the ChatGPT Siri integration is a little weird, if there are people that are love that, then you take that away, that's like.

• 1:45:50Mark Gurman?

  They're not, they're not taking that away, they're not taking it away. So again, it's an underlying, under the hood model to enable the existing Siri functionality and the new Siri functionality. So Apple, let's talk about what is the new Siri?

• 1:46:03Jordi Hays?

  Yeah, so the new Siri is what I'm getting at, because if I can suddenly use Siri to do deep research and do web searches and stuff like that, that feels pretty significant.

• 1:46:13John Coogan?

  Yeah.

• 1:46:13Mark Gurman?

  So, so what is, what is the new Siri? Well, the new Siri, so far what Apple's announced is three things. Uh, one is on-screen awareness. So you see something on your screen, you can ask, uh, the voice assistant about it. Uh, the second thing is personal context. So the ability to, um, ask questions and have it search through your personal data in order to answer those questions, like make an itinerary, uh, based on conversations I had with someone who's, uh, visiting me in town. Uh, and there's a few other bells and whistles related to the new Siri that Apple has, uh, previously announced. What they haven't talked about

• 1:46:53Mark Gurman?

  is AI web search. And so the new Siri is also going to have a ChatGPT perplexity competitor for things like deep research and summarizing, uh, search. That is going to be an Apple-built, an Apple-powered system. What is that?

• 1:47:09Jordi Hays?

  That's just this little sound effect we use. That felt, that feels significant.

• 1:47:13John Coogan?

  Wait, wait, wait, there's something super dramatic.

• 1:47:15Mark Gurman?

  Your significant button.

• 1:47:16John Coogan?

  Exactly, you play it again. It's like, we're going to war.

• 1:47:20Jordi Hays?

  We're going to war.

• 1:47:21John Coogan?

  The companies are fighting.

• 1:47:24Mark Gurman?

  Yeah, so this is Apple going after ChatGPT perplexity, at least for web search.

• 1:47:28John Coogan?

  Yep.

• 1:47:28Mark Gurman?

  Uh, I think it's going to be pretty useful. It's very necessary. It's one of the main use cases. Uh, and you'll see them eventually embed things similarly into Safari and other parts of the iPhone operating system. So it's gonna be a big year for Apple AI. And uh, that's just the beginning with the rolling out in March, April.

• 1:47:46Jordi Hays?

  Do you think, do you think? Do you think there's any world where Apple wants to monetize commerce off of this assistant? They obviously because that's I can see the exact same thing that ChatGPT wants to do.

• 1:48:00John Coogan?

  Siri, order me a new pair of shoes. Order me some paper towel.

• 1:48:03Jordi Hays?

  Yeah, find me, find me, find me. Yeah, exactly.

• 1:48:06John Coogan?

  Book me a hotel. Book me a flight, Siri.

• 1:48:07Mark Gurman?

  AI is just not good enough. You're not good. So it comes down to this.

• 1:48:13Mark Gurman?

  Will Uber, Postmates, Uber Eats, Amazon, whatever? Right now, you can integrate all of those apps. It's called an extension into Siri. In fact, this has been a feature for 10 years. Nobody uses it because it's unbelievably terrible and unreliable. You cannot trust your iPhone to call you an Uber via Siri. Like, you'd have to be out of your mind to need to call an Uber in a pinch and use Siri versus using the app. And so there's really no way for-

• 1:48:41Jordi Hays?

  Take me from point A to point B with Uber.

• 1:48:43Mark Gurman?

  Yes.

• 1:48:44Jordi Hays?

  Taking you to Antarctica. You cannot cancel.

• 1:48:48Mark Gurman?

  So there is really, there's really no way for Apple and these companies to come to some sort of financial agreement around that. That's why they haven't yet.

• 1:48:54John Coogan?

  Sure.

• 1:48:55Mark Gurman?

  But when this new Siri starts working, when it has those upgraded technologies that mean that I can call an Uber from my phone and know that it's actually going to happen, then they'll be able to come to those financial agreements because people are going to start using it. Right now, there's no point in monetizing $0. But once the real money starts flowing through in Siri, you're talking about a big business for Apple and AI. And really what the future of apps and services revenue is for the company.

• 1:49:22John Coogan?

  Yeah.

• 1:49:23Mark Gurman?

  I'm pretty bullish on this.

• 1:49:24John Coogan?

  Yeah, no, that makes a ton of sense. I guess the question is just like, it feels like Apple, the reason Apple is paying Google is because they don't want a situation where I click the Siri button and say, hey, Order me and order me some paper towels and then Gemini under the hood says, "Yeah, we'd love to process that through Google Payments and Google Shopping and all of our under the hood stack."

• 1:49:49Mark Gurman?

  That's not what's happening.

• 1:49:51John Coogan?

  Yeah, that's not what's happening.

• 1:49:52Mark Gurman?

  How? It's, it's like, hold on a second. It's like, you guys are really, really good at what you do. So I'm paying you to, uh, to, to, to, to write my, to create my podcast for me.

• 1:50:05John Coogan?

  Sure.

• 1:50:05Mark Gurman?

  But you guys have, nobody knows I paid you to do it and I'm the presenter and everything.

• 1:50:11John Coogan?

  Pure, pure white label. Yep.

• 1:50:12Jordi Hays?

  How, uh, what, what's your, been your read on Apple's kind of M and A strategy? They've bought a number of companies this year. Most, almost all of them are, are, I think to my knowledge, very small companies that are probably, uh, talent focused. There had been some rumors that I have to imagine were, were kind of like leaked by perplexity that Apple was like taking a look at that. That never felt real to me. When you look at Apple's history and M and A, they'll buy, they bought Beats for like one or like two times revenue, like they, they, when they buy comp, that, that, the only times that I've seen them buy a company that for a large price was like a relatively like conservative.

• 1:50:54John Coogan?

  They don't just take swings at $20 billion companies with like 100 million in rev. It just doesn't happen.

• 1:50:58Jordi Hays?

  With no underlying.

• 1:51:00Mark Gurman?

  Here's what I can tell you. First, on the perplexity, when I was the one who, who broke that, that was real. That did not come from perplexity. The idea there was Apple was sort of scared out of its mind that it was going to lose this Google search deal. Um, it was a very real possibility. The judge was going to tear that thing up and Apple would be out of billions of dollars. And so buying perplexity when it wasn't as big of a, a, a price tag as it is today for that company would have made sense. It could have been a pretty easy plug and play to replace Google search on the iPhone and, and have an Apple revenue stream there.

• 1:51:34John Coogan?

  Oh, yeah.

• 1:51:34Mark Gurman?

  That's out of the picture because A.

• 1:51:37Jordi Hays?

  Wait, where would, where would the revenue have come from?

• 1:51:41Mark Gurman?

  Oh, they would just integrate their Apple.

• 1:51:43John Coogan?

  Ads in perplexity.

• 1:51:44Mark Gurman?

  Yeah.

• 1:51:45John Coogan?

  And so.

• 1:51:45Mark Gurman?

  Ads in perplexity.

• 1:51:46John Coogan?

  Yeah, you go to, you go to default search on iOS. It hits perplexity and then there are a whole bunch of advertisers that are buying to be at the top of those results.

• 1:51:55Jordi Hays?

  So similar to the App Store.

• 1:51:57John Coogan?

  Yeah.

• 1:51:58Mark Gurman?

  Yeah, you know, it would have been a pretty buying perplexity would have been a quick plug and play, painless replacement for Google Search. But that deal wasn't torn apart, giving Apple more time to build its own in-house AI web search product. In terms of the M and A strategy, so they really, to your point, have not veered from their strategy. Biggest acquisition to date, even post inflation, appears to be that $3 billion Beats deal back in 2014. I do believe they continue to be on the hunt for smaller AI M and A deals. In addition to perplexity, they looked at Mistral, which developed their own L L M's and related technology out of Europe. But.

• 1:52:36Jordi Hays?

  But Mistral would never, like, I can't imagine France would be like, yes, buy our national AI champion. We'd love to sign this.

• 1:52:43Mark Gurman?

  Well, stranger things have happened, but given the situation with the EU, I'd be shocked as well.

• 1:52:48Jordi Hays?

  Yeah. What about, what can you say about their reaction to the new Meta Ray-Bans release and VR broadly?

• 1:53:00Mark Gurman?

  Well, the Apple Vision Pro, have you guys used one? Do you guys have one?

• 1:53:03John Coogan?

  I had one for two weeks and then I returned it. But I did find it's like, it was remarkable in terms of screen fidelity, but content library wasn't there and weight wasn't there. I like that they put the battery in a pack. It was, it was a mixed bag and at five grand, it was like, why am I doing this?

• 1:53:22Mark Gurman?

  So I got the Vision Pro on the day it came out back in February of 2024.

• 1:53:26John Coogan?

  Yep.

• 1:53:29Mark Gurman?

  A friend of mine, for the first time, got one. Does that make sense? It's been a year and a half and finally a friend of mine got one.

• 1:53:34John Coogan?

  Totally.

• 1:53:35Mark Gurman?

  Totally. And so I had my first Vision Pro to Vision Pro FaceTime experience, actually a few nights ago.

• 1:53:42John Coogan?

  Oh, wow.

• 1:53:43Mark Gurman?

  And we tried out this new personas thing. You can literally like turn on a movie and sit side by side and see the person sitting next to you, watching a movie together. It's fricking unbelievable.

• 1:53:52John Coogan?

  It's crazy.

• 1:53:53Mark Gurman?

  Here's the problem, most people don't want to put a pound and a half helmet on your, on their head. Right? And so. Apple is limited by a combination of price as well as people just not wanting to use that form factor. I also think they've done a pretty terrible job marketing it because I'm ingrained in this ecosystem more than anyone else I know and probably most people in this world. And despite the fact that I've had a Vision Pro, despite the fact that I'm totally tuned into this, I had no idea what that experience was like that I experienced the other night. And so all that tells me is they've just done a terrible job marketing these features. Obviously, they've done some, you know, executive interviews about personas in the last few days or whatnot. People don't really care about that.

• 1:54:37Mark Gurman?

  They care about TV ads and they care about demos and what have you. So they need to up their game. Anyways, long story short, they're full steam ahead on smart glasses. The first version won't have displays like the older metal Ray-Bans or the base level metal Ray-Bans. Those are coming out in 2027. I think they'll be out early enough.

• 1:54:57Jordi Hays?

  Smart glasses without a display will come out in 2027?

• 1:55:00Mark Gurman?

  Yeah, early. And I think it'll be early enough in 27 where there's a possibility, they haven't decided yet, there's a possibility they'll be able to announce it before the end of next year.

• 1:55:11Jordi Hays?

  And people will want to buy that because the Apple Assistant is so good that it's suddenly...

• 1:55:18Mark Gurman?

  Well, I thought you were gonna say because of the Apple brand, people are not gonna want to buy it because of the Apple Assistant.

• 1:55:22Jordi Hays?

  No, but theoretically...

• 1:55:23Mark Gurman?

  But the Apple Assistant being good unlocks that product.

• 1:55:25Jordi Hays?

  Yeah, because if it's not good, like, I don't need to wear a pair of glasses.

• 1:55:30John Coogan?

  But it's a pitch as you don't need to wear AirPods anymore. It's like a substitute for AirPods potentially.

• 1:55:35Mark Gurman?

  It's like AirPods with souped up battery life.

• 1:55:38John Coogan?

  And cameras on there.

• 1:55:39Mark Gurman?

  With cameras, yeah. You know, they've also been working on AirPods like I'm wearing with cameras in there as well. And so I think there's actually a bake off going on internally too.

• 1:55:49John Coogan?

  Yeah, between the two factors.

• 1:55:51Mark Gurman?

  Well, between the four factors or if you need both. I would bet that they'll do both.

• 1:55:56John Coogan?

  Weird.

• 1:55:57Mark Gurman?

  And then in 2028, they'll have glasses with the displays.

• 1:56:00Jordi Hays?

  Well, yeah, because if you need glasses... Like for your vision, a pair of smart glasses that have a speaker built in, you can do phone calls, you have a camera and you have prescription lenses, like that, there's a over a billion people that wear, that need prescription eyewear and those people will probably be like, this is amazing. I get to wear, I, I get to fix my vision and I get all these added features. I'm already wearing glasses. I'll pay the $2,000 to where have another kind of like device on my, on my, on my person.

• 1:56:34Mark Gurman?

  And, and the bet is that the Apple brand is stronger than the Ray brand, uh, Ray ban brand. And I would guess the Apple brand is stronger. And if you had to choose between Ray ban glasses and Apple glasses, especially with the context that Apple has severely limited the ability for the meta glasses to sync with your iPhone and the iPhone and the Apple glasses will sync perfectly. I think most people are going to lean in the, in the Apple direction, but Meta deserves so much credit for creating a category and making a category so terrific. I have the Ray ban displays that Meta gave me to test out. Those are amazing. And they're like two, three years ahead of whatever Apple's.

• 1:57:14Jordi Hays?

  Yeah. Do you, do you, so I was with a, with the Ray ban displays, I could imagine that being, having like pretty real product market fit for people in the world that are dependent on WhatsApp and already need glasses, like they need to wear glasses for their eyesight. Cause if you have those two things and you can get WhatsApp messages, just like popping up, you can do phone calls, like that feels like pretty compelling. And so I can imagine the kind of person that is, maybe it's a European executive or some Gen C person in, in Europe, that's just a WhatsApp power user, but.

• 1:57:55Jordi Hays?

  But I, what's your read on it? I know it's not your kind of cover.

• 1:57:59Mark Gurman?

  Well, they feel like a prototype. No, I cover all hardware too. They feel like a prototype if I'm being honest.

• 1:58:06Mark Gurman?

  But like a good prototype, I think they're priced perfectly. I think $800 is totally reasonable for what their features are. You give it a generation or two, they're going to be amazing. The trick for Meta is beating Apple by a year on something that's a bit lighter and better displays and what have you. See, the current Metas, they have one screen in them. The second generation version will have displays in both eyes, maybe making it a little bit more expensive, but Meta's on to something. They have a multi-year head start. What you're going to see is Google come into this space too. They're going to launch, you know, their smart glasses with Samsung in a few months, their glasses with Warby Parker and a few other glasses brands in a few months.

• 1:58:49Mark Gurman?

  And there's going to be a lot of competition in this space. I think this is going to be really hot across 26 to 28.

• 1:58:55John Coogan?

  We have a question from the chat. Could you get us up to speed on the John Prosser situation?

• 1:59:02Mark Gurman?

  Uh, this one I'm not, this one I'm not terribly read up on.

• 1:59:05John Coogan?

  Okay. Yeah. Well, we'll, we'll, we'll need to revisit it at some other point.

• 1:59:08Mark Gurman?

  How about this? Put it this way, I, I lied. I'm very read up on it. I don't want to get into it. It's not my, it's not my, uh, it's not my problem to deal with.

• 1:59:16John Coogan?

  That's totally fine.

• 1:59:17Jordi Hays?

  What did you, what did you read into, uh, there, maybe, maybe this was your reporting. This is why we were so excited to have you on the show. It's like, it's been so many stories that you've originated, but, uh, Evan Spiegel and Snap, Snap were saying that they might be spinning out specs

• 1:59:37Jordi Hays?

  and raising capital for it. I was a bit surprised to see that, given that I haven't seen a pair of specs, you know, out in the wild, like in years. And if I'm an investor, kind of looking at this category, and you can, you can get exposure to smart glasses through Meta, Google and Apple, like it's hard, it would be hard to kind of underwrite. But I'm curious if you're more up to speed on, on what they've been cooking on.

• 2:00:06Mark Gurman?

  I like Evan a lot, I'll just tell you that. And I think that they're trying some pretty cool stuff. And their big differentiator there is what these glasses are going to be used for in the social integrations. In my mind, they might be just better off sort of lowering their R and D on these things by focusing on their hardware, partnering with a company like Google and putting their own social layer over Android XR. But obviously, they have their own Snap OS. They're trying to get this consumer version of the glasses out on the market next year. They look quite a bit different than what you've seen from Meta and Apple and some of the Google prototypes. So we'll see what happens. It's going to be a multi-horse race here.

• 2:00:45John Coogan?

  Is true VR just kind of dying or something? Because you have like camera glasses at Snap. It seems like all the focus is on camera glasses at Meta. And then Apple may be pivoting away from Apple Vision Pro. And then Google's really focused on the Samsung glasses that are again see-through with a camera on there, maybe a little overlay, a little HUD. But is there anything exciting going on in just like vanilla VR? I want to watch an IMAX movie on my face.

• 2:01:15Mark Gurman?

  Well, vanilla VR is just incredible. Like, there's no better video watching experience than what you get on Apple Vision Pro. I've tried all the VR headsets. I've had all of them. I have all of them. It's just a remarkable category. But it's only a remarkable category for the people who want it. I mean, there's very few people where VR, I think, works. I'm out and about all day. I have a family. I go to an office, too. And when do I have time to put this thing on my head to watch a movie? The answer is almost never. Because I have people in my life, I have needs around me, I have things I need to do, and it just does not fit into my life. For people who can put on a headset and be secluded from the world for two hours, there's nothing better.

• 2:01:59John Coogan?

  Yeah.

• 2:02:00Mark Gurman?

  Glasses. You can wear them and use them throughout your day, really, no matter what you're doing. That's, that's the big difference. So there's nothing wrong with VR. It's just the use cases and the people who could use them is just quite a bit more limited.

• 2:02:13Jordi Hays?

  Last, last question. I know we're over time, but uh, do you think Apple thinks about OpenAI and their hardware ambitions a lot? Sam was pressed pretty hard on, on his spend commitments on Friday. And one of the justifications that he gave for why, like, basically like how they were gonna be able to spend that kind of dollars was something to the effect of like, we have a consumer device coming up and we need a lot of compute for that. I'm kind of botching the, the exact uh, language that he used, but he was seeming to imply like, we have a hit consumer device coming.

• 2:02:52Jordi Hays?

  And just kind of be right, like, I can't say more, but he, he certainly is telling the market that they're really cooking. But I wonder what Apple's read on it is.

• 2:03:05Mark Gurman?

  Based on what he's saying, this device has to be so amazing that he's confident that they're really gonna need that compute. And to date, we have not seen a single AI device that has either not been a failure or has needed the kind of compute that these dollar numbers are talking about.

• 2:03:21Jordi Hays?

  That's what exactly what I said, that's exactly what I said earlier. I'm like, every single crap, like, you can have the, every single crack at this so far has not managed to be remotely as

• 2:03:34Mark Gurman?

  Yes.

• 2:03:34Jordi Hays?

  good of an experience as like an iPhone with even a, a physical headset. Like, if, like, I use wired earphones, like.

• 2:03:42Mark Gurman?

  All right, that's ridiculous, but um, the Meta, the Meta glasses are far and away the most successful AI device brought to market in this era over the last two or three years. And in terms of the users, probably is using what, 1% of the amount of compute that Sam Altman is talking about here? So we will see. In terms of Apple worried, I think Apple looks at this as something where they can be a fast follower. I don't, I think there are hardware products that OpenAI can bring to market that are innovative before Apple. But I don't think there's a product out there that if Apple wanted to copy, that it can't copy.

• 2:04:21John Coogan?

  So, let's see. It's fascinating. Well, this has been a fantastic conversation. Thank you so much for the time. We would love to have you back on the show soon. Anytime. We could have spent another 25 hours talking about this. This is fascinating. I hope you have a great rest of your day.

• 2:04:35Jordi Hays?

  Yeah, I really enjoyed it, Mark. And thank you for, thank you, thank you for all your hard work.

• 2:04:39John Coogan?

  Tireless work. Thank you. Yeah. Do you guys do in-person? If you do in-person, maybe we can.

• 2:04:43Jordi Hays?

  Are you in LA?

• 2:04:46John Coogan?

  I'm in LA. Come by. Yeah. You guys are in LA? We're in LA. We're in Hollywood.

• 2:04:51Jordi Hays?

  Yeah.

• 2:04:52John Coogan?

  Oh, great. Okay, next time.

• 2:04:53Jordi Hays?

  Yeah, come by next time. We have a seat here ready for you.

• 2:04:56John Coogan?

  Center seat.

• 2:04:57Jordi Hays?

  Yeah.

• 2:04:57John Coogan?

  Yeah.

• 2:04:58Jordi Hays?

  Can't wait.

• 2:04:58John Coogan?

  All right. Okay, we'll talk to you soon. I'm Mark Gurman. All right, see you guys. Equivalent yappers. We love it. Thank you. We'll talk to you soon. Let me tell you about numeralhq.com. Sales tax autopilot. Spend less than five minutes per month on sales tax compliance. You can get started for free. Up next, we have Erica from Redpoint Ventures. Very excited. Welcome to the show, Erica. How are you doing?

• 2:05:23Jordi Hays?

  Welcome.

• 2:05:24Speaker 07

  Hey.

• 2:05:25John Coogan?

  Happy Monday.

• 2:05:26Speaker 07

  Guys, same to you. I have to tell you, I was watching the show from Friday this morning and I can't into the costumes. Rockin', like, very impressive.

• 2:05:35John Coogan?

  Having the hairline back is.

• 2:05:37Jordi Hays?

  What was your read? Did you think that John looked much more like Ilya than I looked like Mark? Because that was our read. I kept John with.

• 2:05:44Speaker 07

  I think so. I think so, but I saw it start to crinkle up over time and I'm like, it's starting.

• 2:05:50John Coogan?

  After three hours, I'm surprised it wasn't just falling off.

• 2:05:52Jordi Hays?

  It's a very weird thing to be under like 10 layers of just stuff.

• 2:05:57John Coogan?

  It's crazy.

• 2:05:57Jordi Hays?

  And just be inside this.

• 2:05:59Speaker 07

  Think about wearing makeup every day as a woman. What must that feel like?

• 2:06:02Jordi Hays?

  No, this is a level, this is a level beyond that. We were in the chair for like three and a

• 2:06:07John Coogan?

  Three hours.

• 2:06:08Jordi Hays?

  Three and a half hours where they applied light. It was like they basically had spray paint. They were spraying, doing a layer, doing another layer.

• 2:06:14John Coogan?

  Literally spray painting. Anyway, thank you so much for helping on the show. Could you, could you give us a little bit of a, little bit of backstory on, on how you wound up at Redpoint? And then I have a bunch of particular questions about, about Redpoint and, and the current markets.

• 2:06:29Speaker 07

  I call myself an accidental VC. I do think venture is the best job in the world, but I actually had no interest in being a venture capitalist. I met my partner Satish Darmeraj like 17 years ago. He was building this company called Zimbra. I had a startup that was trying to sell, we're trying to close him as a customer. It was like our first year of sales and he was the only customer we didn't close, which really pissed me off. And we became friends, stayed in touch. Funny enough, like he introduced me to Satya Nadella, who I know you had on last week, who was awesome too. And that like changed their trajectory of my company years and years ago. And then he called me and said, hey, I want you to, to come to Redpoint. And I was like, no, no, that seems like

• 2:07:13Speaker 07

  a terrible idea. And he'd done so much for me. He like convinced me to come and hang out with the team. I fell in love. I left GitHub. I was COO there for a couple of years and never looked back.

• 2:07:26John Coogan?

  You were COO at GitHub like right around Copilot launching, right before you saw glimmers of Copilot?

• 2:07:33Speaker 07

  Oh yeah, I was there when we launched. Yeah. I, so I came in following the Microsoft acquisition. I was there with Friedman, was there through launching Copilot and then lived specifically to, to join Redpoint and had a couple of companies.

• 2:07:49John Coogan?

  You saw what was happening internally and you were like, the big tech approach is doomed to fail. I gotta go fund startups instead. Is that what happened?

• 2:07:56Speaker 07

  It was amazing to be part of Copilot.

• 2:07:58John Coogan?

  Everything here is a zero. I'm going out into the private markets.

• 2:08:02Speaker 07

  Startups are so much more fun.

• 2:08:05John Coogan?

  So much easier, notoriously easy too.

• 2:08:10Jordi Hays?

  Yeah, I was saying, I, I still, I mean, I still think Copilot is so, I was saying on the show, it's, it's, it's underhyped because they're not announcing a fundraise every six months.

• 2:08:22John Coogan?

  Yeah, you don't realize how big the business is because.

• 2:08:23Jordi Hays?

  People have no idea of like, you know, that was, you know, when, when Carpathy was on Dwar Cash and like saying like, this isn't the year of agents. Like one argument against that point was that you see this explosive growth of, of products like Copilot. And in many ways, agents are working, even if it's like primarily in a, in a coding capacity.

• 2:08:46Speaker 07

  Yeah, it probably doesn't get the the credit it really deserves for the reason that you mentioned, but I also think there's just been so much innovation in the ecosystem since then. Lot of changes on the on the GitHub side, too, but it was a pretty remarkable thing to be a part of. And honestly, after we shipped it, I went through like a little bit of a darkness. I have a son who's 12, who's like super into coding. And I'm like, what is my son gonna do? Like, what is what are his jobs gonna look like in the future? Um, it's been really transformative. It was it was very cool to get to be a part of like the early days.

• 2:09:19John Coogan?

  Yeah, we were we were spending the early part of the show reflecting on Sam Altman and Sacha on Brad Gersner's show. And just this question of the 1.4 trillion in spending commitments versus 14 billion. And I'm wondering.

• 2:09:33Jordi Hays?

  Yeah, what did you think of Sam's answer?

• 2:09:35John Coogan?

  Yeah, I mean, that's a great place to start, but I do have more questions about impact for startups. But yeah.

• 2:09:39Jordi Hays?

  Not to not to. Yeah, do you want to? I was looking for just one person besides Brad and the altimeter team to defend Sam's answer. John John defended it. He put the.

• 2:09:49Speaker 07

  Yeah, I mean.

• 2:09:53John Coogan?

  I have a steel man helmet. I can defend anything.

• 2:09:56Speaker 07

  Look, we are going through such an extraordinary period in human history. I think with every other shift we've ever seen, we tend to like overestimate how quickly it will change things and then underestimate the long term impact that it will have on society. I think there's a bunch we don't understand. I'm certainly not betting against Sam right now as being one of the major players in this space. And I guarantee you, there's so much detail in these contracts about like, you know, outs and rolling things back and everything. I've seen what these things look like.

• 2:10:30Jordi Hays?

  I just thought the question was not you could ask that question without being bearish on OpenAI. And like, I look at that as I if I'm an investor in any of the company, any of the counterparties to OpenAI.

• 2:10:43John Coogan?

  Yeah.

• 2:10:44Jordi Hays?

  I want to know, like, how how are you? How are you gonna do? How are you gonna do this?

• 2:10:49John Coogan?

  Let me reformulate this. So if if if the if there is like, risk of OpenAI not hitting 1.4 trillion, there's tactics that you could do if you're a hyperscaler who's on the other end, right? Like, like the outs of the contracts, maybe you don't build as aggressively if you don't think that the demand's actually going to materialize, even though you have a contract. There's a bunch of strategies that you could do if you're running those companies. What's less clear to me is. What are you talking to folks in your portfolio about? What advice do you have for founders where you say, hey, the future's a little hard to predict? What, how can, how this compute build out? There might be this big glut. Like, you don't want to get caught in front of the steamroller.

• 2:11:31John Coogan?

  You want to be drafting and riding the big wave and catching the wave at the right time. How do you, how are you thinking about that with founders in the portfolio? Because we've interviewed some folks that you've backed. Legora came on. It's incredible. The, the, the growth rates are so fast.

• 2:11:45Speaker 07

  Yeah. Yeah, look, I, I don't believe there's going to be any time, kind of material glut. I think there's just too much happening. I mean, look at what Poolside is doing, right? Building out their own data center. This was like a plan from the day zero. You know, a lot of people think those guys just like got caught off guard. Oh, we need to go build this to get, you know, control over our own destiny. That's totally not true. Like, they have seen this coming for a long time. I think, you know, if you're at the model layer, the smartest thing to do is to have control over the full stack. And the reason I believe that's to be, that's true is because people, uh, there's going

• 2:12:26Speaker 07

  to be so much demand and it's so hard to get access to not just the chips, but the power that you need. Like, I, I am just not worried that we're going to run into any kind of a glut. And at the application layer, what we're telling people generally is like, I know this is such a VC cliche, I don't care about margins at all right now. Like, I care about winning in the market.

• 2:12:49Jordi Hays?

  Let's give it up for not caring. Give it up for growth, for burn. Let's give it up for aggression.

• 2:12:55Speaker 07

  I know. I never, I never, I never thought I would be that person, but I, I, I genuinely believe that. I think like, it's very clear that we're at like day zero and figuring out how to wield these super powerful instruments. The costs of inference are going to come way down. We're getting better at building more efficient models for like task-specific models. I think what you need to do is figure out like, what is the UX? Like, how are humans going to get work done? What does that look like? How can you build some kind of defensive ability into your product? And I think we're seeing a lot of kingmaking happening across the market in different categories, where companies are just getting out in front of the market, raising a bunch of money,

• 2:13:37Speaker 07

  building their brand, and being seen as the winner, even if the product is really early. And, you know, I know there's a lot of folks that are talking about the recklessness that's happening across VC. And on the one hand, I get it. But on the other hand, I think in a market shift like this, you've got to play to win. And like, you know, you, some of these are going to flame out. But if you get one or two that really makes it, all of your crazy wild bets are gonna, gonna have paid off.

• 2:14:02Jordi Hays?

  Yeah, the CEO, the CEO of Fireworks AI came on the show last week and said she was worried some people were going to scale into bankruptcy.

• 2:14:10John Coogan?

  Scaling into bankruptcy was the quote, which is hilarious.

• 2:14:14Jordi Hays?

  It's probably a skill issue.

• 2:14:15John Coogan?

  Yeah. I mean, yeah, let's keep it focused on the advice for founders. I've been interested in this, in this question of like, in the previous era of Silicon Valley, like the, the founders, the founder archetype that you were looking for was somebody who could, who could find a problem, build a solution, learn to code. And it feels like increasingly, one of the skills, maybe not the only skill, but one of the skills that we need to add to the portfolio of great founders is dealmaker, is deal guy, deal girl, like becoming really good at aligning incentives. We see this with Sam Altman, but we see this up and down the stack. Are you seeing that in your portfolio, in the founders that are seeing breakout success?

• 2:14:55John Coogan?

  Just the ability for them to walk into a much bigger company, or much bigger, you know, financier and marshal capital or resources, get people around a table and get everyone to say yes to whatever the plan is?

• 2:15:10Speaker 07

  I mean, yes, to some degree. I think it depends on the category. I think go to market muscle and just sheer velocity matters a lot. And so from that perspective, the folks that can go out and start closing customers and like the storytelling behind it and the trust building, I think is super important. For most people above the model layer, like I don't know that like deal making in the, at least in the Altman sense of like, hey, we have to go secure data centers and chips and and like control our own supply chain. I think that's less important for most people. But I will tell you, we're more likely to back like really young, just insanely like

• 2:15:54Speaker 07

  high velocity founders that we think will like run through walls to win, that just have such dogged determination and are willing to go at it so hard that they might not even have like the founder market fit that we we used to look for pretty consistently in founders. And we're seeing these crazy, you know, 20 something founders who have never really had a job before that are building these companies that are scaling like crazy just because they're in at the right time, they can tell the right story and they just,

• 2:16:27Speaker 07

  they just ship so fast.

• 2:16:28Jordi Hays?

  Yeah. How are, you guys, I've always enjoyed Red Point's reporting on, on SaaS specifically and, and multiples and at, at times a disconnect between multiples in, in the public markets versus the private markets. How are you, how are you, what, what's your view on that with, with, like, how much do you guys read into, you know, traditional SaaS companies in the public markets being, I think it's like the average right now is like a seven X revenue multiple versus private markets. Obviously, if you're an AI native company, you're getting, you know, some, some. You know, massive multiple on top of that. Probably like 40. Does that, does that, is that, is that nerve wracking?

• 2:17:12Jordi Hays?

  Is that, uh, does that make sense?

• 2:17:15Speaker 07

  But I mean, I'm on the early side and so we're not looking at multiples as much as perhaps the growth folks that are coming in at later rounds. But I think the, the really key difference here is most of the companies that we're investing in are doing like direct labor replacement, right? This is no longer just like SaaS software that's going to make people X times more efficient. It's literally, you know, replacing an entire chunk of your workforce. And I think that, uh, those companies are able to grow so much more quickly because of the value that they can capture that, um, that like the velocity of the businesses ends up priced into the rounds and they're just growing to your earlier point so much

• 2:17:59Speaker 07

  faster than a traditional SaaS company. I think that's justified. You know, we try to be like very first principle thinkers and just in terms of like, how big can this business get and how quickly do we think it can get there? And, you know, we value companies based on that, not based on what's happening right now in the private markets with like legacy SaaS companies.

• 2:18:22John Coogan?

  We have to ask, Redpoint has been accused of manning the anonymous X account, R for Rock. Is it true? Are you behind, are you personally behind the R for Rock account?

• 2:18:35Speaker 07

  Maybe we're all R for Rock. No. Uh, it is not somebody at Redpoint. I, we would, uh, we would not take kindly to that. But yes, the, uh, the conspiracy theories.

• 2:18:49Jordi Hays?

  Yeah, I, I would, I would appreciate it.

• 2:18:50John Coogan?

  I think it's a compliment to be accused of having that much insight into the whole market. I, I, I read it as a compliment.

• 2:18:57Jordi Hays?

  It could be, it could be a shared account, right? It's like a handful, a handful of partners.

• 2:19:02Speaker 07

  It's, it's gotta be junior folks. It has to be associates because nobody senior would be that stupid and reckless. And I will tell you one thing that has shocked me getting into venture from, you know, the, the builder side is like. There's almost perfect information spread. Like, everybody knows everything instantaneously. It's absolutely wild. I don't, I don't know if we've ever been surprised by something that ended up on Arfa Rock, but we have been quite irritated when things have been leaked when they weren't supposed to be.

• 2:19:31John Coogan?

  Yeah, it, it does feel like it's a little bit of a hassle if you're a founder and you're planning and planning to do like a specific PR push. But also, there's this weird dynamic where it kind of takes some of the energy or some of the leverage out of the existing scoopers in the tech ecosystem. Yeah. Cause they're, they're, they're losing scoops to Arfa Rock, then they don't have as much cachet or power, soft power in the ecosystem.

• 2:19:57Jordi Hays?

  It might, it might inspire, it might inspire some media companies to try to basically plant spies.

• 2:20:03John Coogan?

  Maybe.

• 2:20:04Jordi Hays?

  Like plant, plant a spy at each tier one, and then you can just leak every single round.

• 2:20:09John Coogan?

  Yes. I, I don't know. That might be, that might be against like

• 2:20:11Jordi Hays?

  Probably extremely illegal.

• 2:20:13Speaker 07

  I think you'd be better off like hosting a party and

• 2:20:16John Coogan?

  I think so. Yeah. Yeah. Just, just grab some drinks with some people, get them to open up and you'll have

• 2:20:24Speaker 07

  Something else live. Yeah.

• 2:20:26John Coogan?

  Well, thank you so much for hopping on the show.

• 2:20:28Jordi Hays?

  Yeah. Great.

• 2:20:29John Coogan?

  This was fantastic. We'd love to talk to you again soon.

• 2:20:31Jordi Hays?

  And yeah, we'll talk soon.

• 2:20:32John Coogan?

  Have a great Monday.

• 2:20:33Jordi Hays?

  Wait, wait, before you leave, before you leave, you haven't hung up yet. What, are, are you in like a tower in a castle?

• 2:20:40John Coogan?

  Yeah. Wait, what? Whoa, this is awesome. What is this?

• 2:20:43Speaker 07

  My home office.

• 2:20:44John Coogan?

  Home office.

• 2:20:45Speaker 07

  It is not a turret, though. People think it's a yurt or a turret. It is, it is neither.

• 2:20:50John Coogan?

  It's just the corner of a castle. I just live in a castle. I am a venture capitalist. I've done very well. And, you know,

• 2:20:57Jordi Hays?

  It's somewhat of a, it's somewhat of a dome, so it makes sense to call into the

• 2:21:01John Coogan?

  It's a great sign of respect. We also, we also record the show from a dome, the Ultra Dome.

• 2:21:06Speaker 07

  There you go. I did this in deference to you guys.

• 2:21:09John Coogan?

  Yes, yes. That makes perfect sense.

• 2:21:11Speaker 07

  Waiting for this moment.

• 2:21:11John Coogan?

  Fantastic.

• 2:21:12Jordi Hays?

  Amazing. Well, so, so great to, so great to hang.

• 2:21:15John Coogan?

  Backgrounds.

• 2:21:16Jordi Hays?

  Yeah. Come back on again soon.

• 2:21:17John Coogan?

  We'll talk to you soon.

• 2:21:18Speaker 07

  Have a good one. Good seeing you guys. Take care.

• 2:21:19John Coogan?

  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, number one ranking on G2.

• 2:21:27Jordi Hays?

  Don't get in a bake off with Ben.

• 2:21:29John Coogan?

  Benjamin Witty from recess coming in the studio. How you doing?

• 2:21:35Jordi Hays?

  What's happening? Welcome to the show. We don't have audio from your side. Let's check in with the production team.

• 2:21:42John Coogan?

  Let's check in.

• 2:21:43Jordi Hays?

  Could be our fault.

• 2:21:44John Coogan?

  Let's 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 at Adio.

• 2:21:53Jordi Hays?

  Good opportunity to tell Ben about Adio.

• 2:21:55John Coogan?

  Yes, we gotta tell him. He's got a $30 million Series B. He needs a CRM. Let's get him on that. Maybe he needs an 8sleeve 2.

• 2:22:01Jordi Hays?

  I believe Coca-Cola, another beverage company, uses Adio.

• 2:22:05John Coogan?

  Wait, really?

• 2:22:06Jordi Hays?

  Yeah.

• 2:22:07John Coogan?

  That's awesome. Okay. 8sleeve.com.

• 2:22:08Speaker 08

  Can we now?

• 2:22:09John Coogan?

  We can hear you now.

• 2:22:10Jordi Hays?

  Yes, we can.

• 2:22:11John Coogan?

  How'd you sleep last night? You sleep well?

• 2:22:12Speaker 08

  I slept well, but I could sleep better with an 8sleeve.

• 2:22:15Jordi Hays?

  That's right. Thank you.

• 2:22:16John Coogan?

  There we go.

• 2:22:17Jordi Hays?

  Great to, great to finally meet. We share the day job guys.

• 2:22:23John Coogan?

  Fun fact, this is our second podcast together. Your first time on TVPN, didn't we do a podcast together like 10 years ago?

• 2:22:29Speaker 08

  Yes, but I forgot what, but what?

• 2:22:32John Coogan?

  It was like Lucy, like me and David Rattell hanging out with you. We did like five episodes of this thing. It was a total flop.

• 2:22:39Speaker 08

  That's right.

• 2:22:40Jordi Hays?

  No way.

• 2:22:41John Coogan?

  I was early to the neo corporate media strategy.

• 2:22:44Jordi Hays?

  Never stop podcasting.

• 2:22:45John Coogan?

  Didn't work, but yes, we should.

• 2:22:46Jordi Hays?

  Yeah, great, great, great to hang on the show. Why don't, why don't you give a quick intro on kind of yourself and the company if anybody's been living under, living under a rock?

• 2:22:56Speaker 08

  Yes. So, you know, I started myself. So I didn't come from the food or beverage industry. Actually started my career in Silicon Valley. So I was in San Francisco in the early stage tech world from 2010 to 2016. But I kind of knew I wanted to start a company in the consumer space. And so I went out on my own and around that time and kind of was led to the, you know, the origin of recess and kind of my observation in that 2016 era was, you know, we were entering this new period in history driven by technology and was going to leave us all kind of stressed out and anxious.

• 2:23:25Jordi Hays?

  Yep.

• 2:23:26Speaker 08

  And so I had this thesis that kind of led to recess that, you know, in the future that we were entering, kind of people would be prioritizing their mental wellness and looking for healthier ways to reduce stress and relax. And I kind of saw the, you know, the rise of these new types of functional ingredients such as, you know, magnesium, adaptogenic herbs, CBD at the time, you know, even THC. And kind of my conclusion was that they were gonna kind of, you know, serve as the inputs into this fundamentally new space, you know, of, you know, products that would emerge, you know, on the other side of kind of caffeinated beverages and alcohol focused on relaxation. And you know, I didn't know, and so the kind of the lightbulb moment was like Red Bull for relaxation. But I took a much more expansive view of the space that would emerge and the different

• 2:24:09Speaker 08

  kind of subcategories that, you know, the I could create a brand that could ultimately kind of extend into.

• 2:24:15Jordi Hays?

  I remember hearing you on a podcast back, it must have been in the kind of 2018 era, where you talked about how Red Bull, I believe you talked about how Red Bull like distinctly, they didn't necessarily want to make a drink that just tasted the best, but they wanted it to have like this specific, sorry, specific flavor that just was like, like extremely identifiable and like made you feel something and how you leverage that with recess, which I think you you did well from the very beginning. But yeah, I feel like, you know, looking back, it's interesting that there were so many, there were so many brands created during that, that, that initial boom, whatever, 2016

• 2:24:59Jordi Hays?

  to 2020, kind of I look as like the heyday when you had, everyone was like reading Lean Lux and 2PM, you know, and it was just like this, this so much investment in the category. And to me, recess stands out because it's the only, the only brand in that era that like was kind of riding the same wave, but didn't look like everything else at the time.

• 2:25:25Speaker 08

  Yeah.

• 2:25:27Jordi Hays?

  And yeah, just, obviously, yeah, like even, even the fact that like whatever pop-up you did in, in New York during that era, like still sticks out in my mind when I can't remember a single, I can't remember any of the other kind of marketing that was happening during that period.

• 2:25:46John Coogan?

  Yeah, the Instagram sticks out to me like crazy. I remember the, the Instagram, did that ever grow? Like, is that like the corner of the cornerstone of like the community? Is that still a, because I remember like the, the Instagram just popped up so quickly and grew so fast. Was there, like, did that turn into like a whole flywheel of the business?

• 2:26:07Speaker 08

  So what the twist in the business was like our first product line included CBD in it. And so we got off to this, you know, I never thought of the brand as like a CBD brand. I thought I always thought of it as like a relaxation brand. And we did a lot of like, I'd say a kind of groundbreaking, kind of marketing activities in that first year in 2019. You know, from our content strategy, which we can talk more about, the pop up in New York, you know, brand collaborations. But what happened was, you know, I saw the writing on the wall that the regulatory clarity for, you know, CBD was going to take a lot longer than everyone thought. And so I'd never, so I basically accelerated the vision of becoming a brand platform and bet on magnesium as this ingredient that we could use that could deliver the same effect. You know, in a fully compliant way, which was this incredible bet.

• 2:26:51Speaker 08

  Our recess mood line, which is what, you know, leverages that ingredient is kind of seeing velocities, you know, on par with poppy. And so that lines, you know, national and target Kroger, et cetera, et cetera.

• 2:27:02Jordi Hays?

  Yeah, you were early, you were, CBD was an interesting category because there was so, the growth of the category was so insane. That even though you guys were early in terms of like a CBD beverage, I'm sure you just like, I remember you guys.

• 2:27:17John Coogan?

  So noisy.

• 2:27:17Jordi Hays?

  Yeah, it was so noisy. You guys did such a good job marketing that a bunch, like something about CBD is fascinating because people just think like, you make a drink and sell it and it's just going to work. And you just put it on a shelf and people buy it. And obviously like the actual logistics of scaling a beverage brand are so much harder than that. That like so, so few of the companies ever, ever really, you know, even crack like a couple million of, of revenue. But, um, but yeah, the timing on magnesium as well, I thought I was supplementing magnesium like in that sort of 2016 beyond era. And then it was only like a few years ago that people started talking and saying like, hey, did you know that the average is like, you know, 70% of Americans are deficient in magnesium?

• 2:28:02Jordi Hays?

  And to me that had been just like, I, I knew that because of our food system and there's way less magnesium content and, and even vegetables and stuff today than there were, you know, decades ago. But you feels like nice and early to that. And that's an ingredient, like a hero ingredient that was quite a bit more durable in my opinion than this like initial CBD boom. And I don't, you know, I could call it a bust maybe because there's, I know a lot of people that have built brands, saw great revenue growth and then didn't figure out a way to kind of like, center themselves on a more durable kind of hero ingredient.

• 2:28:36Speaker 08

  Yeah, I mean, I just just to double click on that a bit like I think beyond the market that the smart marketing that we did in the early days, we're about to, you know, reaccelerate in a big way. I think I had the right kind of category view of the how the space was going to emerge. And, you know, just as simple, I inside, I'd always say like, I've never heard anyone call Red Bull a caffeine company. It was an energy company, just like we weren't a CBD company, or not a magnesium company, or or not even a mocktail company. I mean, the other amazing bet we made was on the RTD mocktail opportunity. And so we launched no mocktail line in 2023. Kind of what I saw there was, you know, when the when kind of athletic brewing was re-catalyzing the non-alcohol beer space, you know, my observation was like beer was flat to declining, right, in alcohol. So it's kind of fighting for

• 2:29:20Speaker 08

  a share of a shrinking pie. What was growing? It was RTD cocktails and hard seltzer. So my thesis was there's going to be like an RTD mocktail category, you know, on the other side of RT cocktails, just like, you know, non-alcohol beer existed on the other side of alcoholic beer. And

• 2:29:34Jordi Hays?

  Yeah, you want to bet on a feeling that humans are going to want for a long period of time versus a single ingredient, right?

• 2:29:42Speaker 08

  Yes. And so I this one framework I had is stimulation, intoxication, relaxation, that this really represented the emergence of this fundamentally new kind of value proposition, kind of in feeling that people would be seeking. And, you know, when I had the lightbulb moment for, you know, what became recess, you know, Red Bull was started in 1987, right? Like, you know, Red Bull, Monster, Starbucks, all rode this kind of secular tailwind of kind of consumers seeking stimulation. And again, my thesis was in the future that we were entering, you know, people would be basically figuring how to relax in the crazy world that we were living in. And that, you know, all these trends, whether it's, you know, focus on alcohol moderation, stress relief, enhancing sleep, you know, focus are all

• 2:30:26Speaker 08

  kind of connected and a part of kind of consumers prioritizing their overall kind of mental well being. And that's kind of why the recess platform strategy has been kind of successful. And I think there's a lot more kind of we can do, you know, beyond this in the in the in the next phase of the business.

• 2:30:41Jordi Hays?

  What are you? How do you think about marketing and brand building going forward? I feel I don't know if I have this correct, but it feels like Over the last few years, the focus has been like distribution, getting the right assortment of products, like laying the foundation so that you are and have the ability to scale. Because one of the challenges as a beverage brand, if you're doing, people like to buy beverages in stores. If you're doing like viral internet marketing, that doesn't necessarily translate to the sales growth that you want unless you have the distribution. And you know, my, the grocery store closest to my house has like recess, so I'll grab

• 2:31:22Jordi Hays?

  some from there. But I'm assuming it took a while to get the kind of saturation from a distribution standpoint, so that you guys can have the confidence to like, do a big celebrity partnership, or do a TV campaign and start doing these things that just are kind of a waste of money, unless you have that distribution.

• 2:31:40Speaker 08

  That's right. Like, and I think that's one actually the best parts of the recess story. As I've been kind of transitioning the business beyond the original CBD line with the addition of Mood and Mocktails, I've been focused on, you know, basically performance marketing to drive the Amazon business. We're still 50% Ecom. And then we just get so much organic kind of word of mouth, you know, basically testimonials. We probably get, you know, 100 to 150 organic tagged posts a day across Instagram and TikTok, primarily women, which is our kind of core, kind of consumer, spreading, you know, the word on recess. And that is super powerful. And so I look at this round, this next phase is fundamentally about, you know, scaling the team, scaling distribution, and, you

• 2:32:24Speaker 08

  know, really re-catalyzing brand marketing. Because, you know, John, what you guys were alluding to earlier, you know, the kind of groundbreaking content, the pop-up stuff like that, I really have turned off. And again, if you compare, you know, what we've, where we are, you know, compared to where Poppy, Liquid Death, brands like that, we've done really no levers on brand marketing yet. And so you're going to start to see a lot more of that in this next phase. And, you know, just to talk about Red Bull a little bit, like, I always kind of thought of Red Bull as like a media company that monetizes through selling cans. And I do think beverage is this very kind of underappreciated category, you know, especially, it has some similarities to even, you know, tech companies. Like when I, you know, when I had the idea for recess, I discovered this amazing fact, which is,

• 2:33:07Speaker 08

  you know, Monster Energy was the best performing stock of the past 20 years, right?

• 2:33:10John Coogan?

  And Celsius did incredibly well, too. It's happened like four times in beverage, and energy specifically. Like, tons of great outcomes.

• 2:33:19Speaker 08

  Exactly. And so it does have these like, you know, if you bet on, especially if you're creating a category or writing like a very large secular tailwind, like as this compounding, you know, effect to it. And, you know, obviously, brand marketing plays a critical role in that. And I think there's some, you know, a lot of new, you know, opportunities to do stuff in, in news, in new ways in this era with, you know, the role of, you know, Amazon and digital experiences, even. I think there's a lot of cool stuff we can do in the next phase of recess. So I'm excited to, you know, turn that back on.

• 2:33:47Jordi Hays?

  Yeah. Yeah. And you got a, I don't know, I don't know how much you, you still work with Day Job, but if, if you sat down for an hour, brainstorm with, with Ryan and Spencer, you could probably come up with like, at least 100 ideas that would, that would unlock that that next stage of growth.

• 2:34:04Speaker 08

  Yeah, they'll be back in the mix for sure.

• 2:34:06Jordi Hays?

  Well, we got to talk about the fundraise. We got a gong here that we would love to, to hit on your behalf. How'd the round come together? Who, who participated?

• 2:34:15Speaker 08

  Yeah. So the round was led by Cavu. It's a $30 million Series B. Cavu's

• 2:34:22Jordi Hays?

  Voice drowned out by the gong. You said Scott, you were getting into Cavu.

• 2:34:28Speaker 08

  Yeah. So Cavu was the main investor in Poppy, which they just sold to Pepsi for about $2 billion earlier this year and kind of where their next.

• 2:34:35John Coogan?

  It's Rohan Oza, right?

• 2:34:37Speaker 08

  Yeah.

• 2:34:37John Coogan?

  Yeah. He's a legend. He, he was like, top guy at Vitamin Water, sold that to Coke for $4 billion. Like truly the crowning achievement of the CPG beverage industry at, at the time and still today. One of the greatest bev deals ever. And then he's been on Shark Tank. He's just like a legendary consumer packaged goods investor.

• 2:34:58Jordi Hays?

  Uh, yeah. Quick lightning round of questions. I'm assuming that Cavu is not underwriting this, underwriting the business from, with any type of AI lens. But are you getting, are you getting any leverage out of AI? I would say like, we, we at the show unfortunately get very little. I would say it helps with, with some research and we build software internally. That's, that's helpful. But I'm curious if the chat was wondering if, if it's been, helped, helped move the needle at all.

• 2:35:32Speaker 08

  Not yet, but I'm starting to have conversations with different groups kind of building kind of AI-driven kind of content production. And I'm very excited to figure out how we can leverage that. And you have to pump out a lot of, a lot of content, you know, running a beverage business or any consumer brand today. And I think there's an interesting way for us to use it in a kind of a tongue-in-cheek way. I mean, the whole recess story and antidote to modern times is kind of, you know, was in response to the implications that AI would have, right? And I think so it's to like incorporate it into the content strategy.

• 2:36:04John Coogan?

  I feel like you could do something really fun with AI customer service where

• 2:36:08Speaker 08

  Yeah.

• 2:36:09John Coogan?

  the AI, like you need some customer service. People are going to have questions about the product generally. There's going to be a lot of back and forth, but you could probably do some crazy stuff with like fine tuning the LLM, bringing a unique brand voice in and kind of like go, that just feels like recess.

• 2:36:23Jordi Hays?

  There's also, I, I can imagine like, I, I would imagine a lot of your distributor relationships today are still like, somebody has to call somebody on another line and a grocery store has to call the distributor when they're, you know, and it's still like kind of analog. So I can imagine some opportunities there. Another question from the chat, uh, they're asking about the potential, like, are you excited about drone deliveries? I can imagine like beverage is something that people like, when people want to drink, they, you've built a big e-comm business, but when people want to drink, they don't typically think, let me go on my computer and order a drink. And we saw there was, uh, I don't know if this company is still around, but there was a company that was started in the same era as recess

• 2:37:06Jordi Hays?

  that tried to go really all in on, on e-comm. And I, I don't, uh, I think they, they partnered with Coke at some point. And I don't, I don't know that they're still around.

• 2:37:15Speaker 08

  I know who you're talking about. The name's escaping.

• 2:37:16John Coogan?

  Isn't it lemon something?

• 2:37:17Jordi Hays?

  Lemon, lemon perfect. No, not lemon perfect. Lemon perfect was like

• 2:37:21Speaker 08

  Dirty lemon, dirty lemon.

• 2:37:22John Coogan?

  Dirty lemon, yeah. They text messaging, they were like insanely good at e-commerce.

• 2:37:26Jordi Hays?

  But yeah, theoretically, if you can just, you know, say like, I want a six pack of recess mood and hit a button on your phone and a drone just drops it into your backyard, that should increase velocity, but curious.

• 2:37:38Speaker 08

  I mean, I'm a big believer in just omnichannel. I mean, Instacart's a huge channel for us. GoPro, DoorDash increasingly, kind of anywhere where kind of consumer products are sold, you know, we want to be. And so, you know, when that becomes a real, a real channel, I think we'll, we'll explore it for sure. But it's not, it's not something I spent a huge amount of time thinking about.

• 2:37:58Jordi Hays?

  Yeah. Got to stay focused. Awesome.

• 2:38:00Speaker 08

  Yeah, Walmart, Costco next before.

• 2:38:02John Coogan?

  Yeah, yeah. I mean, you get those and it's just like, okay, you've kind of won. And then the like, you'll just be in the place to take advantage of whatever thing comes next. So.

• 2:38:12Speaker 08

  Yeah.

• 2:38:12John Coogan?

  Yeah, lots of opportunity. Thank you so much for stopping by the show.

• 2:38:15Jordi Hays?

  Yeah, great, great to find me. Thank you for coming on.

• 2:38:18John Coogan?

  We'll talk to you soon.

• 2:38:19Jordi Hays?

  Congrats to the team as well. Cheers.

• 2:38:20John Coogan?

  Have a great rest of your day. Let me tell you about public.com investing for those that take it seriously. Multi asset investing industry yields trusted by millions. Uh, let's go through.

• 2:38:29Jordi Hays?

  Palantir, speaking of stocks, Palantir earnings, Palantir, according to CNBC tops estimates boost fourth quarter guidance on AI adoption. Uh, they issued a strong guidance attributing growth to adoption of its AI. Uh, government sales, which have been central to Palantir's ascent grew 52% from a year ago. Uh, and again, stock is not up a ton after hours. Um, but, uh, we can, uh, dig into this more, uh, probably tomorrow. Uh, did we want to try to do?

• 2:39:07John Coogan?

  Yeah, we got to go through a little bit of this.

• 2:39:09Jordi Hays?

  We got to do a little bit of a, a.

• 2:39:11John Coogan?

  I mean, we're just going to go through sort of like random segments, I guess. But basically, uh, a, the, uh, Ilya Sutskever, who I dressed up as coincidentally, uh, for Halloween, uh, last Friday, uh, he's the co-founder of OpenAI. He, they have shared new details on the internal conflicts that led Sam, led to Sam Altman's initial firing, including a memo, uh, alleging that Altman exhibited a consistent pattern of lying. There's a, uh, there's a deposition transcript that is going around that is now public, uh, from the Ilya deposition. Toucan kind of summarizes here. Ilya plotted for over a

• 2:39:51John Coogan?

  year with Mira to remove Sam. Dario wanted Greg Brockman fired and himself in charge of all research. That's Dario Amade, I believe, from, uh, Anthropic. Uh, Mira Maroti told Ilya Sutskever that Sam Altman pitted her against Daniela Amade. Uh, Ilya wrote a 52 page memo to get Sam fired and a separate doc on Greg. And there are some, there are some clips here that are absolutely crazy. Um, the witness, I believe the witness is Ilya, correct?

• 2:40:24Jordi Hays?

  Correct.

• 2:40:24John Coogan?

  And the witness says, one thing I can say is that the process was rushed. And the attorney says, well, I was rushed. And Ilya says, I think it was rushed because the board was inexperienced. And the attorney asks, inexperienced in what? And Ilya says, in board matters.

• 2:40:43Jordi Hays?

  We should, let's go through, let's go through a little table reading here.

• 2:40:46John Coogan?

  Let's go through some other stuff.

• 2:40:46Jordi Hays?

  I'm on page seventeen of the deposition.

• 2:40:49John Coogan?

  Yep.

• 2:40:50Jordi Hays?

  Tyler is going to be playing the attorney Agnolucci. And I will be attorney Molo.

• 2:40:56John Coogan?

  And what's the number in the top right?

• 2:40:59Jordi Hays?

  Uh, one sixty-eight.

• 2:41:00John Coogan?

  Okay.

• 2:41:01Jordi Hays?

  So let's pull this up. Uh, Tyler, kick it off.

• 2:41:03John Coogan?

  You're the attorney Agnolucci?

• 2:41:06Jordi Hays?

  Correct.

• 2:41:06John Coogan?

  Okay.

• 2:41:07Jordi Hays?

  Okay.

• 2:41:07John Coogan?

  And I'm Ilya?

• 2:41:08Jordi Hays?

  You're Ilya. I don't even know if you're gonna be.

• 2:41:10John Coogan?

  And you're Molo?

• 2:41:10Jordi Hays?

  I'm Molo.

• 2:41:11John Coogan?

  Okay, let's go. But first, let me tell you about iQuick.com, out of home advertising made easy, measurable. Say goodbye to the headaches of out of home advertising. Only iQuick combines technology, out of home expertise and data to enable efficiency in this ad buying across the globe. Okay, Tyler, go.

• 2:41:22Speaker 02

  Okay, Jordy, I think you should actually start because it starts a little bit down the page. So start at line five.

• 2:41:27John Coogan?

  Okay.

• 2:41:27Jordi Hays?

  Uh, line five. It certainly does matter how much.

• 2:41:32John Coogan?

  Keep going.

• 2:41:33Jordi Hays?

  What do you think the value of your equity at OpenAI was at the time Sam Altman was fired?

• 2:41:38Speaker 02

  And I have the same objection, and I'm instructing him not to put a number on it.

• 2:41:43Jordi Hays?

  What did you think the value was?

• 2:41:46Speaker 02

  You can answer the question that he is saying is relevant here, which is whether you thought you were going to lose value.

• 2:41:51Jordi Hays?

  It isn't my question. I have the right to ask a question. You can object to the question. My question is, what did you think the value of your equity in OpenAI was at the time of Sam Altman's firing?

• 2:42:04Speaker 02

  And I'm instructing the witness not to answer as to the money, money value.

• 2:42:09Jordi Hays?

  Are you going to not answer? I mean.

• 2:42:14John Coogan?

  What is this?

• 2:42:15Jordi Hays?

  John, that's you.

• 2:42:15John Coogan?

  Oh, I'm answering, okay. So you say, are you not gonna?

• 2:42:19Jordi Hays?

  Are you gonna, are you going to not answer?

• 2:42:22John Coogan?

  I mean, I have to obey my attorney.

• 2:42:25Jordi Hays?

  Okay, so you're not going to answer?

• 2:42:27John Coogan?

  I'll do what my attorney tells me to.

• 2:42:29Jordi Hays?

  Okay, were you concerned about possibly losing your equity at the time that? I withdraw the question.

• 2:42:38John Coogan?

  Eventually, you're gone.

• 2:42:40Jordi Hays?

  Eventually, the board agreed to resign and restore Sam Altman, didn't it?

• 2:42:43John Coogan?

  Yes.

• 2:42:44Jordi Hays?

  When was that?

• 2:42:44John Coogan?

  Later in the week.

• 2:42:46Jordi Hays?

  And why did they do that?

• 2:42:50John Coogan?

  Tyler?

• 2:42:50Speaker 02

  Objective four.

• 2:42:52John Coogan?

  There was a question of why the board did it.

• 2:42:56Jordi Hays?

  Correct.

• 2:42:57John Coogan?

  Or is this a question of why I supported this?

• 2:43:00Jordi Hays?

  First, I'm asking you, why did the board decide to resign and reinstate Sam Altman?

• 2:43:08John Coogan?

  Right now, my view is that with very few exceptions, most likely, a person who is going to be in charge is going to be very good with the way of power, and it will be a lot like choosing between different politicians.

• 2:43:23Jordi Hays?

  The person in charge of what?

• 2:43:24John Coogan?

  AGI.

• 2:43:26Jordi Hays?

  And why do you say that?

• 2:43:27Speaker 02

  Objective form.

• 2:43:29John Coogan?

  That's how the world seems to work. I think it's very, I think it's not impossible, but I think it's very hard for someone who would be described as a saint to make it. I think it's worth trying. I just think it's, it's like choosing between different politicians. Who is going to be the head of state?

• 2:43:50Jordi Hays?

  Looking back at the process that preceded the removal of Sam and Greg from the board, what's your assessment of that process?

• 2:43:58Speaker 02

  Objection, vague.

• 2:44:00John Coogan?

  Calls for speculation.

• 2:44:02Speaker 02

  Okay, that's the end of that scene, I think.

• 2:44:04Jordi Hays?

  End scene.

• 2:44:05John Coogan?

  We need, we should have rehearsed this. Okay.

• 2:44:09Jordi Hays?

  This is a, this is a table reading, we're riffing it out.

• 2:44:12John Coogan?

  Okay, should we go to 26? Because we already did the board's experience. Okay, let's go to 26. Where's 26? 26 starts, um, the witness. At least at one point, I expressed support.

• 2:44:25Jordi Hays?

  After Sam was removed, do you recall Helen Tonner telling employees that allowing the company to be destroyed would be consistent with the mission?

• 2:44:33John Coogan?

  I do recall.

• 2:44:35Jordi Hays?

  And what was the context of that comment?

• 2:44:38John Coogan?

  The executives.

• 2:44:41John Coogan?

  We need to be southern. Every, every law exchange is better when it's in a southern twang. Uh, the executives, it was a meeting with the board members and the executive team.

• 2:44:55John Coogan?

  The executives told the board that if Sam does not return, then OpenAI will be destroyed. And that's inconsistent with OpenAI's mission. And Helen Tonner said something to the effect of that it is consistent, but I think she said it even more directly than that.

• 2:45:11Jordi Hays?

  More directly than you've related here?

• 2:45:13John Coogan?

  Yes.

• 2:45:14Jordi Hays?

  Okay. And what was your reaction to that?

• 2:45:17John Coogan?

  I don't remember my reaction at the time.

• 2:45:21Jordi Hays?

  Did you think that would be consistent with the mission?

• 2:45:24Speaker 02

  Objective form.

• 2:45:26Jordi Hays?

  Objective form.

• 2:45:27John Coogan?

  Objective form. I could imagine hypotheticals, extreme circumstances. That answer would be yes. But at the time, but at that point in time, the answer was definitely no. For me, it would not be inconsistent with OpenAI's mission to destroy the, the, the, the business. Is that what he's saying? I'm kind of, I'm kind of lost on what his actual stance here is.

• 2:45:51John Coogan?

  What is he saying? Says, do you think that was, uh, uh, so what was the original criticism?

• 2:45:59Jordi Hays?

  Let's go to 28.

• 2:46:01John Coogan?

  Do you know Tyler, do you know what he's saying? Is he pro destroying? So the executives, it was a meeting with the board members. Okay. The, the executives told the board that if Sam does not return, then OpenAI will be destroyed. And that's inconsistent with OpenAI's mission. And Helen Tonner said something to the effect of that it is consistent, but I think she said it even more directly than that. So.

• 2:46:23Speaker 02

  Yeah. So that it, it doesn't have anything to do with Ilya's position on whether the company being destroyed is consistent with the, with the mission.

• 2:46:30John Coogan?

  Hmm.

• 2:46:32Jordi Hays?

  And you say here, there's reason to believe that Sam was removed from Y C in the past for reasons similar to the one that you identify in this document.

• 2:46:41John Coogan?

  Hmm.

• 2:46:44John Coogan?

  Um, who else has summarized this? I'm completely lost on the actual deposition. Uh, let's go back to the timeline typed female has a screenshot here. Says this is some social network type stuff.

• 2:46:57Jordi Hays?

  This movie, the movie is going to be incredible.

• 2:47:00John Coogan?

  We can, we can go back into reading these because they're a little bit more digestible. And what was your response to that? Ilya says, I was very unhappy about it. And the question for the law.

• 2:47:10Jordi Hays?

  Why?

• 2:47:11John Coogan?

  Why? Why? Uh, because I did not, I really did not want OpenAI to merge with Anthropic.

• 2:47:18Jordi Hays?

  Why not?

• 2:47:19John Coogan?

  I just didn't want to. What? That doesn't, that's actually not, this is creating more questions than answers. Um, G P P calls it the worst coup ever planned for a year without any P R strategy. As they say, if you go for the king, better get his head. Uh, first and foremost skill that any leader needs is to be able to survive. No feel-good management book will tell you that. Ilya is a great scientist and great human being, but not a practical leader. Ilya didn't have the skill to plot and survive and come out on top. Sama is the right leader from OpenAI employee perspective. You couldn't go this big without Sama. Or I guess he typed, uh, it is, it's so bad in so many ways, says

• 2:48:03John Coogan?

  Rune. I really hope one day Sam gets the credit he deserves. So they're saying that like, if you can't pull off the coup, you probably can't pull off the act two of the company. And so it's, that's a pretty reasonable, uh, that's a pretty reasonable stance. Um, what else? We talked about the Amazon deal. We didn't get the chance to talk about Wander, find your happy place, book of wonder with inspiring reviews, hotel great amenities, dream beds, top tier cleaning and 24 seven, uh, concierge service is a vacation home but better. I like this post from Buck. We almost kicked off the show with it. OpenAI? The compute purchase order press release company?

• 2:48:40Jordi Hays?

  I think, I think startups should start just announcing their, their planned cloud spend.

• 2:48:47Jordi Hays?

  Just, you know, startups always need, like, the more, the more times you can launch, the better.

• 2:48:51John Coogan?

  Definitely. Go through YC, get $100,000 in credits, and then project out, spend, spend 10,000 of those credits the first month, then spend 20,000 the next month, then spend 40,000 the next month. You're almost out of credits. You've spent 90,000 of your 100,000 credits, right? But you have exponential growth in your credit spending. You project that out a decade, and then you announce that, based on the trend, we will be spending a quadrillion dollars with AWS, if the trend continues. And then just share the data. Hey, we had 10K one month, 20K the next month, 40K in the third month. Do the math, folks. It's exponential growth. That is a good hack.

• 2:49:35John Coogan?

  I have another hack, because Sam Parr is in the timeline. Put the timeline in turmoil over whether he is a $40 million GigaChad or a popper at 17 million. That's the debate, basically, right? Someone, he, he has said that he sold The Hustle for 40 million. Someone quote tweeted him and said, "It was actually only 17 million." And everyone was debating the nature of his acquisition. I thought it'd be interesting to dive into some of the claims. I don't really care that much about whether it's 17 or 40. Both are big numbers. Congrats to him. The interesting thing is just the nature of acquihires, acquisitions, how these different things can play out, and how funky

• 2:50:18John Coogan?

  they can get. And, you know, he's in a unique position because he kind of has to talk about his business credentials for his business, right?

• 2:50:27Jordi Hays?

  Yeah.

• 2:50:27John Coogan?

  But, but the more, the more interesting thing is like, if you're negotiating with, to sell a business, what are all the levers you can pull? Because there's a ton of them. So... The headline number, I believe, was

• 2:50:38Jordi Hays?

  Strangely, like, the Hustle acquisition was kinda, it was like, two deals rolled into one. There's like, the core Hustle.

• 2:50:45John Coogan?

  I could say seven deals. There's so many deals.

• 2:50:47Jordi Hays?

  Well, yeah, there's the core Hustle business, there's the podcast, which was

• 2:50:51John Coogan?

  My First Million.

• 2:50:52Jordi Hays?

  A decent chunk of the revenue.

• 2:50:53John Coogan?

  Yep.

• 2:50:53Jordi Hays?

  And there's the talent. Like, the podcast is not really valuable without the talent.

• 2:50:58John Coogan?

  Totally.

• 2:50:58Jordi Hays?

  So there's a talent deal.

• 2:50:59John Coogan?

  Yep.

• 2:50:59Jordi Hays?

  And I think he was adding up, like, adding up a bunch of those numbers.

• 2:51:03John Coogan?

  Yeah.

• 2:51:04Jordi Hays?

  Rolling them into one.

• 2:51:05John Coogan?

  Yeah.

• 2:51:05Jordi Hays?

  And talking about that headline number.

• 2:51:07John Coogan?

  Yeah.

• 2:51:07Jordi Hays?

  Uh, and he broke it all down and explained it.

• 2:51:10John Coogan?

  Yeah, there's no, there's no real, like, established way to calculate, like, there's no real norms around how headline numbers and acquisitions are accounted for. Like, if you get acquired for, you know, a hundred million dollars, but half of it's on an earn-out, and you don't hit that earn-out, like, you probably should go back and say, like, "Hey, guys, I know I sold my company for a hundred milli- a hundred million, but it's actually, it was only fifty million, because we didn't hit the earn-out." Or, or vice versa. And what it feels like happened was, he sold the company for seventeen, but grew My First Million so much that he kept making a lot of money from it. So the thing that he built wound up generating thirty million.

• 2:51:51Jordi Hays?

  He was getting a lot of stock.

• 2:51:53John Coogan?

  And the stock went way up.

• 2:51:54Jordi Hays?

  He was counting some of the appreciation of that stock.

• 2:51:57John Coogan?

  Yep.

• 2:51:57Jordi Hays?

  To get to the headline number. And I can, yeah, he, he has, he created a podcast that is entirely focused on talking about wealth.

• 2:52:07John Coogan?

  Exactly.

• 2:52:07Jordi Hays?

  So I think he got maybe a little bit.

• 2:52:09John Coogan?

  The Hampton Show.

• 2:52:09Jordi Hays?

  Yeah, he got a little carried away.

• 2:52:11John Coogan?

  The Hampton Show. Yeah, you have to, you have to show the number. Uh, i- i- it is, I mean, it's like headline grabbing. Like, uh, if you want to go viral, especially on, like, YouTube, um, saying, like, "I sold my company." There, there's this guy whose, like, whole shtick is he sold his company for, or he's like, a hundred million dollar entrepreneur. Uh, Alex Hermosy is, like, really big into, like, the hundred million dollar branding. I think he has, like, a patent on it, or a trademark on hundred million. Uh, just because, like, that's a round number. And so, he, he will throw out, "I have a hundred million dollars. I sold my companies for a hundred million dollars collectively. I have a hundred million dollar this or that." And, and that really, it really works to get clicks. Like, it really works to get attention.

• 2:52:51Jordi Hays?

  Yep.

• 2:52:51John Coogan?

  Um, if you want to sell your company for forty million, seventeen million, I have a hack for you. So this is what you do. You, oh, Tyler's, Tyler's locked in. He's ready. This is, this is the number one resume builder right here. Okay, so.

• 2:53:03Jordi Hays?

  Tyler's not

• 2:53:04John Coogan?

  Here's what you do.

• 2:53:04Jordi Hays?

  Just listening. He's studying.

• 2:53:06John Coogan?

  You you you work maybe at some sort of podcast or something, you get together like $5,000 or something, then you lever up to get to like, you need to get to like $400,000, I think. Once you get to like $400,000 in in in debt, it doesn't really matter. You go and you sell your company, but you don't sell it. If you sell it for USD, the value of your bank account is only 400,000. And that's not going to be like, oh, turning heads. So what you have to do is you have to sell, you have to, you know where I'm going with this? You got to sell your company in a different currency, in a different currency.

• 2:53:45Jordi Hays?

  Maybe like Guayanes dollar.

• 2:53:47John Coogan?

  Yes, the Guayanes dollar. So the Guayanes dollar trades at 210 Guayanes dollars to one US dollar. So if you have $400,000 US dollars, if you've created $400,000 of assets here, and you can sell that in Guayanes dollars.

• 2:54:07Jordi Hays?

  It's an amazing multiple.

• 2:54:08John Coogan?

  So 400 times 210 is, it's 84 million dollars in Guayanes dollars. So $400,000 in cash in US dollars is 84 million in Guayanes dollars. And so what you do is you is you build your business to the point where you can sell it for 400, maybe with a bunch of leverage that'll have to get paid out. But you you sell it, the press release, we sold it for 84 million dollars. And you don't specify.

• 2:54:35Jordi Hays?

  No, but you can put in the fine print at the bottom of the press release. Super, super fine print.

• 2:54:40John Coogan?

  Guayanes dollars.

• 2:54:41Jordi Hays?

  The transaction occurred.

• 2:54:43John Coogan?

  Yeah.

• 2:54:44Jordi Hays?

  Using the Guay Guayan.

• 2:54:46John Coogan?

  Guayanes dollar.

• 2:54:46Jordi Hays?

  Guayanes dollar.

• 2:54:47John Coogan?

  This is actually just a hack for everything. If you if you want to become like a social media.

• 2:54:51Jordi Hays?

  OpenAI should start doing this. They should start announcing all their deals in Guayanes.

• 2:54:56John Coogan?

  Wait, wait, wait.

• 2:54:56Jordi Hays?

  Maybe they have been this whole time.

• 2:54:58John Coogan?

  What is, what is, what is 1.4?

• 2:54:59Jordi Hays?

  Maybe that was the answer that Sam needed is he's just, he's.

• 2:55:02John Coogan?

  He's pushing up on 300 trillion Guayanes dollars.

• 2:55:06Jordi Hays?

  Yeah, maybe, maybe he should.

• 2:55:07John Coogan?

  How, Sam, how is a company with only 14 billion in US dollars of revenue going to spend 294 trillion in Guayanes dollars?

• 2:55:20John Coogan?

  294 trillion Guineas dollars is his liabilities.

• 2:55:25Jordi Hays?

  Rigoff says Zimbabwean dollars are the real unlock. That's how you get in the quadrillions.

• 2:55:31John Coogan?

  Yeah. Oh, the, the other thing you should be like, oh, how am I going to pay for, how am I going to pay for 1.4 trillion, 1.4 trillion, how am I going to pay for it? Well, guess what? I got 2.9 trillion in revenue coming in right now, buddy. 2.9 trillion right now. That's my revenue right now, dollars.

• 2:55:52John Coogan?

  But OpenAI will cross 3 trillion in dollars, 3 trillion revenue dollars this year for sure.

• 2:56:00Jordi Hays?

  70 Guineas.

• 2:56:04John Coogan?

  7 trillion Guineas dollars. The Guineas dollar is the greatest.

• 2:56:08Jordi Hays?

  You can't get on any other podcast.

• 2:56:10John Coogan?

  Such good alpha because you can go do a press release and just take whatever you, whatever you did, whatever you achieved. Maybe you're making six figures for the first time in your life. Convert it to Guineas dollars. Now you're making 2 million a year. You know, oh, oh, you cashed out, you made a million dollars. How'd you make your first million? How'd you make your first 210 million?

• 2:56:30Jordi Hays?

  Startups are, are like to, like to, you know, flex how quickly they got to a hundred million dollar run rate. Huge opportunity to get there with the Guineas.

• 2:56:37John Coogan?

  Make it 210 times easier.

• 2:56:39Jordi Hays?

  Yeah.

• 2:56:40John Coogan?

  With the Guineas dollar.

• 2:56:42Jordi Hays?

  We should acquire some Guineas dollars and just have a, have a stack.

• 2:56:46John Coogan?

  We should, we should. The exchange rate will work in your favor, in your favor. Uh, anyway.

• 2:56:53Jordi Hays?

  Well.

• 2:56:54John Coogan?

  There's a bunch of other posts in the timeline. We'll have to get to them tomorrow. Uh, we're on the road tomorrow, but we're still doing a show 11 a.m. Pacific. We'll see you there. Uh, I don't think we'll be doing any guests. We'll see. It might be a little bit of a shorter show, but don't worry.

• 2:57:06Jordi Hays?

  A lot of timeline.

• 2:57:08John Coogan?

  Please leave us a five star review on Apple Podcasts, Spotify. We also have Diet TBN now, which you can listen to. Diet TBN is a summary show, uh, 15 to 30 minutes, just the highlights, cut down. If you don't have time for the full show, you can go listen to Diet TBN.

• 2:57:24Jordi Hays?

  Your commute.

• 2:57:25John Coogan?

  And also follow us on Substack, tbn.com. Drop your email.

• 2:57:28Jordi Hays?

  Thanks for tuning in today, folks.

• 2:57:29John Coogan?

  We'll see you tomorrow.

• 2:57:30Jordi Hays?

  See you tomorrow.

• 2:57:31John Coogan?

  Goodbye.

• 2:57:31Jordi Hays?

  Love you.