Gemini 3 Reactions, Cloudflare Outage, The Upsides of Bubbles | Byrne Hobart, Glenn Hutchins, Yogi Goel, Sam Jones, Ali Madani, Amit Jain

(01:04) - iMessages in Gemini 3 (10:52) - 𝕏 Timeline Reactions to Gemini 3 (28:29) - 𝕏 Timeline Reactions (01:05:11) - CloudFlare Outage (01:16:16) - Byrne Hobart on the Upsides of Bubbles (01:30:12) - Byrne Hobart is an investor, consultant, and writer, best known for his newsletter "The Diff," which explores inflection points in finance and technology. He is also a partner at Anomaly, a frontier tech investment firm, and co-authored "Boom: Bubbles and the End of Stagnation," published by Stripe Press in November 2024. In the conversation, Hobart discusses the role of financial bubbles in driving innovation, arguing that while often viewed negatively, bubbles can coordinate market participants to overbuild infrastructure, thereby laying the groundwork for future technological advancements. (02:06:34) - Glenn Hutchins, co-founder of Silver Lake Partners and chairman of North Island Ventures, discusses his career trajectory, highlighting his roles at Thomas H. Lee Partners, the Clinton administration, Blackstone Group, and the founding of Silver Lake in 1999. He emphasizes the evolution of private equity, noting key financial innovations like the capital asset pricing model and Black-Scholes option pricing, which enabled the valuation and financing of technology companies. Hutchins also addresses the rapid growth and capital demands of AI infrastructure, comparing it to historical technological shifts, and underscores the importance of strategic investment and adaptability in the face of evolving market dynamics. (02:35:17) - Yogi Goel, founder of Maxima, an enterprise accounting platform, discusses their recent $41 million funding round and how their AI-driven system integrates with existing ERPs to automate financial processes and detect anomalies, aiming to reduce errors and inefficiencies in accounting. (02:40:40) - Sam Jones, CEO and co-founder of Method Security, announced the company's $26 million combined seed and Series A funding from Andreessen Horowitz and General Catalyst. He discussed the increasing use of AI in cyberattacks, emphasizing the need for autonomous systems to enhance cyber resilience. Jones highlighted Method Security's dual-use approach, serving both government and commercial sectors, and shared his background in cyber operations with the U. S. Air Force and experience at Palantir. (02:47:50) - Ali Madani, founder and CEO of Profluent Bio, discusses his background in machine learning and biology, highlighting his PhD from UC Berkeley and his leadership in developing language models for biology at Salesforce. He explains Profluent's mission to make biology programmable by using AI to design bespoke medicines, moving away from traditional random discovery methods. Madani also shares the company's progress, including the development of OpenCRISPR-1, an AI-generated gene-editing protein, and mentions securing $106 million in funding from notable investors like Jeff Bezos. (02:56:08) - Amit Jain, CEO and Co-Founder of Luma AI, announced that the company has raised a $900 million Series C funding round led by Saudi Arabia's state-backed AI firm HUMAIN, valuing Luma AI at over $4 billion. Additionally, Luma AI and HUMAIN are collaborating to build a 2-gigawatt compute cluster in Saudi Arabia, named Project Halo, to train multimodal artificial general intelligence (AGI) models. Jain emphasized the necessity of integrating text, audio, video, and images to develop AI systems capable of understanding and simulating the physical world, highlighting the importance of multimodal models in advancing AI capabilities. TBPN.com is made possible by: Ramp - https://ramp.com Figma - https://figma.com Vanta - https://vanta.com Linear - https://linear.app Eight Sleep - https://eightsleep.com/tbpn Wander - https://wander.com/tbpn Public - https://public.com AdQuick - https://adquick.com Bezel - https://getbezel.com Numeral - https://www.numeralhq.com Polymarket - https://polymarket.com Attio - https://attio.com/tbpn Fin - https://fin.ai/tbpn Graphite - https://graphite.dev Restream - https://restream.io Profound - https://tryprofound.com Julius AI - https://julius.ai turbopuffer - https://turbopuffer.com fal - https://fal.ai Privy - https://www.privy.io Cognition - https://cognition.ai Gemini - https://gemini.google.com Follow TBPN: https://TBPN.com https://x.com/tbpn https://open.spotify.com/show/2L6WMqY3GUPCGBD0dX6p00?si=674252d53acf4231 https://podcasts.apple.com/us/podcast/technology-brothers/id1772360235 https://www.youtube.com/@TBPNLive

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

• 0:00John Coogan?

  You're watching TVP. Today is Wednesday, November 19, 2025. We are live from the TVP and UltraDome. The Temple of Technology, the Fortress of Finance, the capital of capital. Ramp.com. Time is money. Save both. Easy use corporate cards, bill payments, accounting, and a whole lot more all in one place. Thank you to the good folks over in Australia.

• 0:21Jordi Hays?

  Ben Sand.

• 0:22John Coogan?

  Ben Sands from Strong Compute sent a whole crate of Violet Crumble.

• 0:27Jordi Hays?

  John's favorite.

• 0:28John Coogan?

  This is my favorite piece of candy in the world. It comes from Australia. It's their greatest export. It's why we need to defend them at all costs. It's why they belong in AUKUS. It's the backbone of geopolitical protection in the Pacific. So Strong Compute for TBPN. Visualize every data center announcement interactive in real time for GPU cluster users. See and control all GPUs in all clouds. Ben Sand sends this from there. Says visualize any cluster. Thank you to the team for sending.

• 0:59Jordi Hays?

  Very thoughtful.

• 1:00John Coogan?

  Enough Violet Crumble for a lifetime. What a crazy.

• 1:03Jordi Hays?

  What do we got today, John? What's your take?

• 1:06John Coogan?

  My take is, does, do you want iMessage in Gemini 3? Do you want iMessage in your AI assistant, in your personal superintelligence? After MetaConnect, we left saying, wow, the virtual reality, the Call of Duty heads up display is here. It's arrived. The Meta Ray Band display. And the technology was really cool. Like, like, the glasses didn't look that crazy. And the heads up display, like the actual HUD, was really high quality. Like, you could actually read what was going on there. But where we left it was, wow, if it doesn't work with iMessage, I can't imagine wearing that because my whole life is iMessage. And, and I, and I was just kind of reflecting on this idea that like, iMessage has kind

• 1:50John Coogan?

  of emerged as my personal ERP system. Remember when VCs used to be like, oh, we need a personal CRM? And it was like, You've just turned every one of your personal relationships into a business relationship. And now you should be using an actual CRM. And many VCs do use actual CRMs, even if it's like catching up with coffee with a buddy from their MBA program or whatever, like people will track that because it makes sense. These are professional relationships, so they should be professionally managed. Maybe in a CRM like Adio, attio.com.

• 2:25Jordi Hays?

  The AI native CRM.

• 2:26John Coogan?

  The AI native CRM. Where is Adio here? I have a new, I have a new list.

• 2:32Jordi Hays?

  I'm getting, I'm getting the blood flowing this morning.

• 2:35John Coogan?

  I'm glad, I'm glad to see it.

• 2:36Jordi Hays?

  Some movement.

• 2:37John Coogan?

  But personal CRMs never took off. And I noticed that like iMessage has kind of become like my personal data lake, my personal ERP system. Like it's my single pane of glass. Like if it's, it's the, it's the source of truth.

• 2:51Jordi Hays?

  Yeah.

• 2:51John Coogan?

  It's like the, it's like the system of record for my personal life. And also we use it for business and stuff. I don't know how unique I am. I feel like a lot of people are, are stumbling into this world, sleepwalking into this world where they, they bought the iPhone. They were like, yeah, it's cool. It's got all these apps like I, I could switch to a different phone. And like truly you can't if your whole life is an iMessage because there's so many different chats. There's so many different like, you know, the images and like iMessage has really, really grown to the point where it's not just like one-on-one text messages. It's all these group chats. It's sharing of locations and, and documents.

• 3:25Jordi Hays?

  Files, files that were shared, you know, PDF that was shared over a year ago.

• 3:29John Coogan?

  Totally, totally. And so, and so my question is like, it seems like, like iMessage is important for the heads up displays, for the, for the smart glasses. Will it be important for Gemini? We were debating this, like right now, iMessage, when you go in there, like the, the only AI experience you see is like those Apple Intelligence summaries, which are sometimes very funny. I was laughing about it. It's summarizing one is it declared over because if someone says it's so over. It will just like rewrite these. It doesn't get the jokes. Other times it'll just say PNG image shared. And like sometimes those funny, sometimes it's a little bit useful, but. In general, I think that all the Apple Intelligence features will get better with Gemini 3.

• 4:14John Coogan?

  We saw on the benchmarks, we demoed the product. Gemini 3 is definitely a great model, the best model potentially right now. Apple will be able to implement that all over the place and they just won't have to worry about, like, do we have a good foundation model to build on? So they'll be able to stuff it everywhere. But what does the actual flowback look like? Because Google and Apple are famously like walled gardens. Like you can't really just interface with them.

• 4:39Jordi Hays?

  Some of the best walled gardens of all time.

• 4:41John Coogan?

  Some of the best walled gardens of all time. And I was wondering about if you, if I'm, if I'm using, so the average consumer will just see Apple Intelligence and they'll really just see Siri and they'll be like, when I ask Siri the history of the Roman Empire, it does a great job giving me the history of the Roman Empire. It doesn't necessarily get confused and hallucinate because it's using Gemini 3 under the hood. But the, the consumers, I don't think will, will expect if they wander over to Gemini 3 hosted on Google Cloud Platform or Google AI Studio. Go to AI dot, go to Gemini 3 Pro, Google's most intelligent model with state of the art reasoning,

• 5:25John Coogan?

  next level vibe coding and deep multimodal reasoning. AI.studio slash build, that's the URL. The, I, I, I think, I think people won't necessarily expect that, that if they're interfacing with Gemini over in Gemini World, in the Gemini app or in Gmail, they won't expect it to connect to their iMessage, even though it's the same model that's powering both of those. And Apple will say that that's for privacy reasons and consumers won't know to ask. But I'm kind of curious about that because that would be an interesting feature. And I don't know if you would even want that. Like, would you want to be able to go to the Gemini app and have it be able to pull a, you know,

• 6:10John Coogan?

  a file that was shared with you in an iMessage group chat? And then do something with that in the Gemini app. Is that a feature?

• 6:18Jordi Hays?

  The only thing that I can think is I feel like my entire life runs on iMessage. And it doesn't feel like Apple is super motivated, like actually building for power users. And so if there was a way to get more value, having that data within Gemini, right? Like, hey, draft me text message responses to people that I've texted, you know, more than, more than one day that I haven't responded to in the last two weeks. And I have to draft a bunch of messages that I can then just go through and at least like look over and respond to.

• 6:54John Coogan?

  Yeah.

• 6:55Jordi Hays?

  But I don't know, I'm, I have zero faith that there will be any portability.

• 7:01John Coogan?

  Any jumping of the wall.

• 7:02Jordi Hays?

  And the reason for that is Apple's paying Google.

• 7:05John Coogan?

  To white label.

• 7:06Jordi Hays?

  To effectively, yeah, white label the model, leverage Gemini in the next version of, of Apple Intelligence.

• 7:12John Coogan?

  Yep.

• 7:13Jordi Hays?

  And they're just going to be focused on integrating it within their ecosystem deeply. And I think if, if they weren't paying for it, Google would have been able to negotiate for quite a lot more and potentially more interoperability between, between the products.

• 7:28John Coogan?

  Yeah, I, I feel like there, there might be some magic that comes out of, you know, like a deeper integration between these two things. It does feel very different than Google Search because the models are actually intelligent and could, it's, I, I think that the, the obvious, like, you know, draft a summary, like the example that you gave, draft a response to a text message, I don't know if anyone would even want that. And, and I do think that Apple Intelligence will be able just to do that out of the box. I, I'm imagining more of like, of like, when I, when I go to an LLM to prompt it for a gift guide, if it has access passively to iMessage, it can understand, oh, like,

• 8:11John Coogan?

  people have been sharing these links with you to things that could be gift. Here's the context around the context. Maybe they shared that link with you being like, lol, I would never buy this someone for Christmas, or they could have been from a family member saying, you know, this has been like, I would write to Santa for this. And they're like alluding to the, to you actually wanting to buy them for that. So Tyler, what do you think?

• 8:34Jordi Hays?

  I, I think like.

• 8:37Speaker 02

  When I think of like AI in like communications generally, I think it's more like the vision is like, let's say I'm trying to set up a meeting with Jordy. It's like I have an agent, my agent talks to Jordy's agent.

• 8:47John Coogan?

  Yes.

• 8:48Speaker 02

  They sort everything out, if we should meet, when we should meet, where we should meet. And then it's kind of like done completely separately from like iMessage even.

• 8:54John Coogan?

  Yeah.

• 8:54Speaker 02

  So I, I think that's more of like my kind of ideal vision of like what LLMs and messaging like look like. Where it's basically like, I'm not even doing the actual messaging. So I'm not sure how important it actually is that it interfaces with iMessage. I mean, obviously it's like good to search through your messages, that's like useful, but.

• 9:11John Coogan?

  Yeah, I just wonder like, like the reality of everyone's life is that they use multiple messaging systems. They use email and WhatsApp and Signal and then iMessage and Twitter DMs. And there's never been a successful unification of these. But I was laughing to myself thinking about like a humanoid robot because like a humanoid robot, you could literally just like be like, here's the phone, here's the passcode. Go respond to every message on my phone. And like it could do that and it would be impossible to like, there's no like data wall that you can put up at that point, really.

• 9:45Speaker 02

  Yeah.

• 9:46John Coogan?

  I mean, maybe if you're like world coin scanning constantly to, you know, like eyeball scanning to get into the actual, the actual app or something. But it reminded me of like George Hatz was saying that like, at a certain point, the, the, the full self-driving, like it's like, you don't need to worry about car compatibility because it's just a humanoid that gets in the driver's seat. You want a driver? I thought that was such a funny take. Because it's like, yeah, like right now Toyota, I believe it's Toyota, but a few of the carmakers are basically saying like, no third-party self-driving kits. Like we are encrypting our OBD2 ports, like the actual port where you control the car. We're not going to let anyone build on top of us because we want to own the self-driving stack on top of our vehicles.

• 10:28Speaker 02

  Yep.

• 10:29John Coogan?

  So no, no third-party.

• 10:32John Coogan?

  Kits and it's just very funny to imagine like, well, how are you going to stop a robot from just sitting in the driver's seat and shifting the gears and pushing the pedals? Anyway, Restream, one livestream, 30+ destinations. If you want to multi-stream, go to Restream.com. Lisan Al Daib has more Gemini context, said Gemini 3 Pro is the first LLM to beat professional human players at GeoGuessr. Wow. We gotta watch. Who's that? Who's that? The amazing GeoGuessr guy? Does he just go by GeoGuessr?

• 11:07Jordi Hays?

  Oh, I know who you're...

• 11:08John Coogan?

  You know what I'm talking about? The greatest game of GeoGuessr. This is the guy he's in the thum-

• 11:14Jordi Hays?

  Rainbolt.

• 11:15John Coogan?

  Rainbolt. Yeah, GeoRainbolt. I want to see his reaction to that and see how he's doing.

• 11:22Jordi Hays?

  He's just crying, crying on stream.

• 11:26John Coogan?

  He's done a few like-

• 11:27Jordi Hays?

  This is one of those things that I think is actually still going to be wildly entertaining. Even when, even when like chess, right? Like watching him figure out where something is down to a single street is still going to be impressive and probably entertaining.

• 11:44John Coogan?

  It's a pretty cool benchmark. I'm surprised by this. But what is this? Oh, so it got a higher score but lower country percentage than a professional player. That's fascinating. I wonder, I wonder what that says. So, so it outperformed on score, but it underperformed on guessing the country. And I wonder if that's something like, it's using different heuristics that are like less intelligible. Because a lot of the heuristics that you'll watch the GeoGuessrs use, the really good professionals, is that they will be able to identify like, this color of signpost is only used in this country. So even though it looks like it's a tropical, like that helps me understand it's this country and

• 12:28John Coogan?

  not that country. And that might be something that Gemini 3 Pro is not picking up on, but it's still doing a better job of understanding just the references. Also, I mean, this feels like it has to be like overfit- On geo guessing because like didn't Google create all the geo guessers like data source.

• 12:48Speaker 02

  Yeah, it's all just Google Maps.

• 12:49John Coogan?

  It's Google Maps and like it has to be in the training data like perfectly. So even if it's like not intelligently thinking like the beauty of watching someone play geo guesser is that they're they're not just doing memorization. They're not just like, oh, I know that street. I know every street because I've memorized every street. They're they're actually applying a whole bunch of heuristics and patterns and matching.

• 13:09Speaker 02

  Yeah, that's probably true. But also, I remember with the, I think it was the GPT five release. People would would like submit just a picture they took like on their phone of like themselves. It's like, where am I? So that's not like actual, I mean, that's not from.

• 13:22John Coogan?

  Yeah, it's not over.

• 13:23Speaker 02

  And it would still do like.

• 13:24John Coogan?

  Okay, yeah, yeah.

• 13:25Jordi Hays?

  Also, this is. Yeah, they nerf that pretty quickly because there was so much there was it was could easily be abused. I remember I uploaded a picture of of outside of my house and I could I could tell. I could tell by its response that it knew exactly where it was, even though there's no street view. Because it's a private neighborhood and like I it was basically like saying where what like I knew it knew exactly where we.

• 13:49John Coogan?

  I knew it knew.

• 13:51Jordi Hays?

  But it was it was just wasn't giving like specifics, but it was so much like it was within like like at least like a mile.

• 13:58John Coogan?

  Yeah, 2.6 M says we should play a round of geo guesser on stream. We should we should get we should figure out how to actually wire up like games. We've done it once before and it was pretty fun.

• 14:09Speaker 02

  I'm also curious where the deep think model ends up on this because this is still just this is just three pro.

• 14:14John Coogan?

  Deep think must be do even better, right?

• 14:17Speaker 02

  Yeah, I mean, you would imagine, yeah.

• 14:17John Coogan?

  So, yeah, how would you benchmark the the three pro versus GPT five? Because it seems like three pro is not equivalent to to five pro. Five pro is more like deep think.

• 14:33Speaker 02

  Uh, yeah, if you're looking at like price and like the

• 14:36John Coogan?

  How long it takes for?

• 14:37Speaker 02

  Yeah, how long it takes to generate an output, yeah.

• 14:39John Coogan?

  So three Pro is like five instant, or is it like five thinking?

• 14:45Speaker 02

  Uh, it's five thinking.

• 14:46John Coogan?

  It's five thinking.

• 14:46Speaker 02

  And then three flash if that comes out.

• 14:48John Coogan?

  That will be instant.

• 14:49Speaker 02

  Yeah, like 2.5 light or flash, or there's flash light also.

• 14:53John Coogan?

  Yeah, okay.

• 14:53Speaker 02

  Uh, that's more the instant model.

• 14:55John Coogan?

  So it feels, yeah, it feels like most of the labs are coming out with like three variations on speed right now, maybe something along those lines.

• 15:03Speaker 02

  Yeah.

• 15:03John Coogan?

  And then maybe a deep research product adds like a fourth to the end. Uh, but that's like more, more of a specific, uh.

• 15:09Speaker 02

  Yeah, like Anthropic has, uh, Sonnet, Haiku and Opus. Those are like the three and then there's like thinking on all of those, but it's kind of a similar breakdown.

• 15:18John Coogan?

  Yeah.

• 15:21John Coogan?

  I wonder, I wonder if Gemini will do a model switcher at some point, like right now, I mean, I guess like AI mode has some of that, but uh, maybe they just are, they, they, they just don't have to worry about the actual uh, GPU cost at this point, so they're not optimizing.

• 15:37Speaker 02

  Yeah, Tori needs it. He couldn't figure out how to find the, the thinking model.

• 15:40John Coogan?

  Oh yeah, you need the, you need the switcher. You need the switcher. Uh, it is, it is funny that, um.

• 15:47Jordi Hays?

  To, to, I asked the model, what model are you? And then it said that it didn't have access to Gemini 3.

• 15:54John Coogan?

  Yeah. It is, that is something that they should like hard code in because it is very frustrating. It's happened a number of times where.

• 16:02Jordi Hays?

  It just makes it feel not intelligent.

• 16:04John Coogan?

  Yeah, where, where, where it's like, okay, like, like, like I want to use the latest and greatest. How do you actually do this? They should, uh, they should definitely like make that URL or that explanation like available in the prompt so that it, it can answer questions. Like you need to sort of like bake in an FAQ since you imagine that people will be interacting with the chat directly.

• 16:23Speaker 02

  Yeah, well, it seems like there's some difference between the naming conventions, right? Where like, uh, the, the like lab, like, uh, DeepMind wants to come out with, it's like a new model, right? So it's three, it has a number, but then on the product side, you see, it's like numbers are kind of confusing, so they want the consumer to just see like fast or thinking.

• 16:39John Coogan?

  Yep.

• 16:39Speaker 02

  But then for people who like want to use the new model, but they're using the consumer product, it's like pretty confusing.

• 16:44John Coogan?

  Yeah. I mean, the, the, the, the name scheme is, is very funny right now. There's, I mean, everyone has like different. Different models, fast and thinking, but then there's also like, uh, deep research, which is deep. And then there's deep thinking, deep thinking and deep research. And that's very hard to communicate the difference between there unless you're following this stuff very closely.

• 17:05Jordi Hays?

  Yeah.

• 17:06John Coogan?

  And then the create videos with VO, but then instead of create images with Nano Banana, it's the Nano, it's the banana emoji and then just create images. And so there's like not a lot of, uh, like symmetry in the, in the way the UI is laid out because, um, I think everyone's moving so fast in this category that it's like, just get it out, ship the code word. Oh, the code word leaked. We gotta go with it. Like, there are still people who know strawberry in the context of OpenAI, which is like a wild thing, uh, to, to be at the level where like, no one knows like the code word for the next iteration of the Diet Coke can or whatever. Like I'm sure that internally there was some project for this, but like, there aren't like diet people following the industry that closely. Maybe there are, but certainly not on the consumer side.

• 17:50Jordi Hays?

  So, uh, yesterday, Google announced, uh, Google Anti-Gravity, their new, uh, Agentic Development Platform. Marvin Von Hagen, uh, one of the most powerful names in tech, said, which IDE did they use to build Anti-Gravity? Windsurf or Cursor? Uh, and Silas over at Cognition said, so Google just forked the Windsurf codebase and they even forgot to remove the Cascade branding in some places. Cascade, uh, isn't, is a, is a part of, uh, Windsurf's product, which is obviously now by Cognition. This is funny, uh, that, that, that they kind of missed this. And I think it's fair for the Cognition team to dunk on it.

• 18:31John Coogan?

  Yeah.

• 18:32Jordi Hays?

  That being said, uh, they of course, uh,

• 18:33John Coogan?

  They paid a lot of money for it.

• 18:35Jordi Hays?

  Google did buy, you know, spend, uh, however many billions, uh,

• 18:38John Coogan?

  Yeah.

• 18:39Jordi Hays?

  On, on acquiring the, the Windsurf IP. So,

• 18:41John Coogan?

  Yeah.

• 18:42Jordi Hays?

  Not super surprising.

• 18:43John Coogan?

  But yeah, I mean, you'd think like, like step one is find and replace, you know, just find and replace and just like anywhere in the codebase, remove the old branding and put in the new branding. Do you have any?

• 18:56Jordi Hays?

  Arun was moving quick.

• 18:57Speaker 02

  I think it's actually kind of hard to do this. I remember like, I mean, it should be really easy, but I remember like months after the, um, Twitter X takeover.

• 19:05John Coogan?

  Yeah.

• 19:06Speaker 02

  You would still find on, on docs, Twitter branding. I mean, that was still like,

• 19:08John Coogan?

  That's true.

• 19:09Speaker 02

  Months ago, I would, I would see.

• 19:10John Coogan?

  That is, that is true.

• 19:12Jordi Hays?

  Yeah, but less imperative. To actually make those changes, in my opinion, right? It's like.

• 19:18John Coogan?

  Also, that's a living, that's a living, breathing service. And like, that might be a little bit difficult if it's like, you know, twitter.com is baked into some DNS and you switch it live, like you're gonna have a bunch of downtime or something like that. Like, like, this is a new product. Like, you can, you could just like, the codebase is just dead. It's just sitting there, like, waiting to run. And then you're just about to ship it. You'd think you'd do control.

• 19:42Jordi Hays?

  Also, I think this was in their launch.

• 19:44John Coogan?

  AI, if you got the best AI, you'd think you'd say, hey, go and fix this. Go make this change.

• 19:50Jordi Hays?

  I also think this was a part of, wasn't this a part of Google's launch? Was it in the launch video? I'm pretty sure the screenshot is from the launch video.

• 19:58John Coogan?

  Oh, really?

• 19:59Jordi Hays?

  Which makes it.

• 20:00John Coogan?

  No, no, no, no, I don't think so. I, I, I, I don't think this is in the, the launch video. The launch video is like, very minimal. Uh, and, and, and this is like, clearly has like a streamer in the corner, like, looking at it. But, anyway, whether you are, uh, excited and bullish or bearish on Google because of this, head over to public.com investing for those that take it seriously. They got multi-asset investing. They're trusted by millions. Kyle Chan says, this is the big story here. Google trained Gemini 3 Pro on Google's own TPUs. No mention of Nvidia chips. This is pretty crazy. I mean, they've been doing this for a while, but, uh, Nvidia is announcing earnings today. And, um, it's pretty crazy.

• 20:43John Coogan?

  Like, the biggest store in AI is not, is not really relevant to the biggest company in AI.

• 20:48Jordi Hays?

  Best model ever created.

• 20:50John Coogan?

  Yeah.

• 20:51Jordi Hays?

  From a benchmark standpoint.

• 20:52John Coogan?

  Yeah.

• 20:53Jordi Hays?

  Didn't use,

• 20:56Jordi Hays?

  didn't use Nvidia chips, which are supposed to be a monopoly. Right?

• 21:01John Coogan?

  Yeah.

• 21:02Jordi Hays?

  And, uh, and so, yeah, I don't know. I, this doesn't feel fully priced in yet. To either company.

• 21:09John Coogan?

  Yeah.

• 21:09Jordi Hays?

  But then again, right? It's so hard to predict demand over the next five, 10 years that, uh, maybe, maybe it doesn't even matter.

• 21:16John Coogan?

  Yeah. I wonder, I wonder how much, because if, if TPUs are not for sale, Nvidia does have a monopoly.

• 21:24John Coogan?

  Like, you can, if there's, you know, a monopoly on, if Nvidia truly is the only seller in the market because Google is not a seller, then yes, they still extract, they still extract monopoly power from every other buyer. Because every other buyer said, "Yeah, I'd love to buy TPUs, but I can't." So, you're the only game in town still. But it's a very weird dynamic where you do have two very clearly performant products that are not, that are not actually driving down cost. It must be very frustrating if you're somebody else, but that's why every other, all the other labs are working so hard to, to develop their own chips, or, you know, bring AMD online. There's a whole bunch of different efforts in this.

• 22:05Jordi Hays?

  Do you know the background here on, from this post? It's extremely Google that a flagship consumer product is named as a reference to interorg drama that happened three years ago?

• 22:15John Coogan?

  Well, there's lots of people saying that they require context. Let's see if anyone...

• 22:20Jordi Hays?

  Anti-gravity.

• 22:21John Coogan?

  No, oh, oh, is anti-gravity the reference? Zodiac, the Zodiac Gemini refers to twins, Google's Gemini is a reference to two formerly distinct labs, Google Brain and DeepMind, that were merged into one lab, Google DeepMind.

• 22:36Jordi Hays?

  There we go.

• 22:37John Coogan?

  I think that's it. Yeah, and I guess the interorg drama that happened three years ago was just this idea of, you know, DeepMind was acquired in, but Google Brain was still running. Isn't this a reference to Gemini as in the constellation of the Gemini twins referring to the consolidation of twin organizations? I like that. That's actually a pretty good name. And, I mean, it, this original post makes it sound much more dramatic, like interorg drama. But in fact, it's, it's, it's sort of a way to keep, keep the lore going, basically. Anyway, let me tell you about adquick.com, out-of-home advertising made easy and measurable. Say goodbye to headaches about out-of-home advertising.

• 23:21John Coogan?

  Alex Heath has a Q and A with Demis over at DeepMind. He says world models are the thing.

• 23:27Jordi Hays?

  Alex is on a tear.

• 23:28John Coogan?

  He's on a tear.

• 23:29Jordi Hays?

  He's averaging, like, the challenge when writers go and journalists go independent

• 23:34John Coogan?

  Yeah.

• 23:35Jordi Hays?

  is actually figuring out a way to get enough scoops

• 23:38John Coogan?

  Yep.

• 23:39Jordi Hays?

  to justify a subscription business model

• 23:41John Coogan?

  Yep.

• 23:41Jordi Hays?

  as a standalone company. Alex has been, it's basically been at least a scoop a week or like

• 23:48John Coogan?

  Big stuff, too.

• 23:49Jordi Hays?

  very interesting content.

• 23:50John Coogan?

  Big stuff, too.

• 23:51Jordi Hays?

  Yeah.

• 23:52John Coogan?

  And, I don't know, just like, it's interesting seeing, like, there's a bunch of, there's a bunch of interesting things. I mean, he did that interview with Mark Zuckerberg that was like seeded hour-long, you know, in-depth interview. There were some big scoops that came out of that, some funny takes about the, about the bubble, basically. I think Mark was saying like, "Yeah, we might overspend." And that was sort of a viral moment. And then, doing some Q and As also, it feels like maybe great timing to, just, you look at the stats on this, 57,000 views, 477 likes, link in the core image.

• 24:34John Coogan?

  I mean, I get it, it's like, it's an important scoop, it's an important story, but it feels like a year ago, this post would have been buried by the algorithm. And so

• 24:46Jordi Hays?

  We will show it to three people.

• 24:48John Coogan?

  Like, really, really great timing on that as well. So, just catching, you know, different opportunities and capitalizing constantly. So, very, very exciting. But, the actual quote that Alex Heath is sharing from his piece in sources.news, which you can go subscribe to, is, he says, "World models are the thing I'm spending most of my research time on. I'd love more TPUs. You look at seed rounds with just nothing being tens of billions of dollars, it's not quite logical to me."

• 25:20John Coogan?

  Taking shots, shots fired. Do we have the gun?

• 25:23Jordi Hays?

  No, we removed that.

• 25:24John Coogan?

  Oh, we removed it. Okay.

• 25:25Jordi Hays?

  Might have to add it back.

• 25:26John Coogan?

  I like that. We need a taking shots one.

• 25:28Jordi Hays?

  Jumping in, just a note on TPUs. Alex says, when you talk about the constraints, Google has more computing access with TPUs than most companies. I would think that Google could just go all in on your team's work, but Google also gives TPU access to other startups and even rival AI labs. Do you ever just go, give me all the TPUs? And Demme says, I love more, but there are business requirements to balance. There's short term and long term revenue and all of these things need to be balanced and smoothed out. It's a huge advantage. We have TPUs in our own stack and we co-designed the TPUs with the TPU team based on where we know we're going software wise. But yeah, there isn't enough compute in the world, as we all know, for everything that we want to do. There are always competing things. And then there's the question of what is the return on that amount of compute? It can be a research return, a new product investigation

• 26:13Jordi Hays?

  return, or direct revenue. Genie is still in the exploratory phase in terms of what we may eventually do with it. So anyways.

• 26:22John Coogan?

  Well, if you're looking to manage a bunch of TPUs, get Linear, meet the system for modern software development. Linear is a purpose-built tool for planning and building products. Greg Brockman, looks like he's hanging out in DC. This has to be Washington DC.

• 26:35Jordi Hays?

  Yeah, this was last night.

• 26:36John Coogan?

  This was last night. So he says, the future is bright. And he's pictured with David Sacks, his wife, of course, Elon Musk, Jensen Wong. What a fantastic photo.

• 26:46Jordi Hays?

  Tyler did a green line analysis on this.

• 26:49John Coogan?

  I think Tyler was getting a little wild with this one. It's barely, barely a failure.

• 26:54Jordi Hays?

  Jensen is not beating the.

• 26:56John Coogan?

  I don't know. I think he's standing up pretty straight. He's a little leaned over, not fully.

• 27:00Jordi Hays?

  Pull it. We gotta pull it up.

• 27:01John Coogan?

  Elon is the, is standing up extremely straight with some wild shoes. People are saying, what are those shoes for?

• 27:08Jordi Hays?

  It's Nvidia earnings day. You gotta look for any signal they can possibly get.

• 27:13John Coogan?

  Yes.

• 27:14Jordi Hays?

  Pull it up. It's at the bottom of the timeline. Squad. Here we go. Here we go. So everyone is, is, is pretty done. That is a very accurate line.

• 27:23John Coogan?

  You did him dirty with that line.

• 27:24Jordi Hays?

  I drew the line perfectly along the axis. I'm with Tyler. He's, it's all about center of gravity, right? Center of gravity? Anyways, I, I'm, I, I, I think. Jensen will put on a show later, right after the show ends, so we will look forward to finding out more.

• 27:45John Coogan?

  Okay, well Elon was pictured wearing some very, very crazy shoes. These are his SpaceX shoes. I don't know who made these. Look at these.

• 27:55Jordi Hays?

  Whoa.

• 27:55John Coogan?

  Would you rock these? Could you pull these off?

• 27:59John Coogan?

  The team likes them. I'm not, I'm not, I don't think.

• 28:02Jordi Hays?

  Are these, are these like, were they made in collaboration with some, another brand or are these just?

• 28:08John Coogan?

  I don't know.

• 28:09Jordi Hays?

  Is he vertically integrating Drip?

• 28:11John Coogan?

  I don't know. Yeah, did he make his own shoes? I have no idea.

• 28:16Jordi Hays?

  These would, these would go for, I have a feeling they'd go for quite a lot.

• 28:21John Coogan?

  Yeah, they seem pretty cool. Let me tell you about Fall. To build and deploy AI video and image models trusted by millions to power generative media at scale.

• 28:32Jordi Hays?

  Bobby says they look like Yeezys.

• 28:35John Coogan?

  They do look like Yeezys. That's right. Quarter, the Quarter app has dropped the, oh, I gotta follow them. Why am I not following them? Quarter app has dropped a, an announcement that the Nvidia earnings call will be tonight at 5:00 PM Eastern Time. As soon as we log off this stream, you can head over to Quarter and start streaming the Nvidia earnings call. Jensen is there pictured, all eyes on Wong. And they've done a fantastic job developing this image style. I feel like it's been 2025, the meta on X has been exploding in terms of like image macros.

• 29:17John Coogan?

  We've had a ton of fun with the trading cards. These have done extremely well. Anything where you can bring design and just tell a little bit more of a story, give a little bit more context, texture, something breaks through. And every time they post one of these 3,000 likes, people love them.

• 29:37Jordi Hays?

  Scroll down if you can, because somebody ran this graphic through mid-journey and it's crazy.

• 29:44John Coogan?

  So bad by comparison.

• 29:45Jordi Hays?

  I mean, it's it's still goes pretty hard.

• 29:47John Coogan?

  Yeah, so I mean.

• 29:49Jordi Hays?

  The arm there is looking a little.

• 29:50John Coogan?

  It's also an interesting testament to like, I I know that the quarter designers use mid journey. They use AI, but they are really, really deep in the SRAF. They obviously have a whole bunch of different stylized prompts. And then it seems like they're also doing a ton of work in post processing, layering text on top of it. They've they've created like a visual style that's distinct. I'm sure people will copy it, but it's definitely created its own its own sort of style and broken through. And at the same time, like it it doesn't feel like, yes, there's AI involved, but it doesn't feel like if you just threw, you know, this this prompt at a random person.

• 30:34John Coogan?

  Okay, hey, go make one for, you know, Coca-Cola next week. I don't know that they can necessarily pull it off, even if they had a mid journey subscription. Like, there's still a lot of like inspiration to understand, like, what is the texture? What is the what is the style?

• 30:47Jordi Hays?

  Right now on Polly Market, will Nvidia beat quarterly earnings is sitting at an 87% chance. The real question is, how will it trade?

• 30:57John Coogan?

  Yes, yes, it it feels like we're in this weird market where you can beat on earnings and then sell off because nothing is ever good enough for the street right now. But but we we will see the the Nvidia Nvidia is such a big story now that just the fact that they are going to have earnings is essentially front page news, at least of the business and finance section. Nvidia and jobs data coming. Reports will provide key signals for investors after a market pullback. The fog masking the direction of the American economy and future of the artificial intelligence boom is starting to lift. After mounting scrutiny of stratospheric tech investments,

• 31:39John Coogan?

  as well as a blackout of federal data during the longest government shutdown in US history, Wall Street awaits two reports that stand to reshape its outlook for the months ahead. AI poster child Nvidia is due to report earnings after the closing bell Wednesday, offering a snapshot of demand for chips that are in that are a linchpin in the tech mania that has lifted markets and helped buoy the economy. Also, with the Nvidia news, it's like, how much can you actually read into AI demand based on Nvidia earnings? Because I feel like we're projecting out like these deals five years in advance. We buy the chips, then we install them. Like, are we really seeing like, like that whole rumored, you know,

• 32:24John Coogan?

  decline in or deceleration in chat GPT growth? Like, if that is real and that's happening and and chat GPT usage is starting to plateau from 800 million weekly to, hey, next year it's going to be like 900 million, a billion. Like, it's not going to be 5 billion next year. If that's happening, are we expecting that to show up in the Nvidia data this quarter? Like, probably not, right? Because like, OpenAI has projected out five years of demand for GPUs. So, I don't know. It seems hard to actually read into Nvidia's earnings as a, as a, as a real snapshot of demand. I mean, I guess demand for chips, certainly.

• 33:04Jordi Hays?

  Yeah.

• 33:04John Coogan?

  A sell-off in Nvidia has dragged down indexes with Peter Thiel's macro hedge fund and others dumping shares.

• 33:12John Coogan?

  Sort of crazy that that's in the journal.

• 33:15Jordi Hays?

  Yeah, especially, especially when it's the equivalent of, you know, the average person in tech selling like a $10,000 position in the company.

• 33:23John Coogan?

  Yeah.

• 33:24Jordi Hays?

  It's like not, not like super notable.

• 33:26John Coogan?

  With no statement either. It's not like, oh, yeah, he was also on Rogan talking trash. It's like, nothing. The tremors extended beyond other AI names into crypto, gold, and more. Even Warren Buffett's latest big bet on Alphabet hasn't staunch the bleeding. America's richly valued stock market has retreated in similar fashion several times during its years-long run-up. In every instance, bargain hunters snapped up stocks, tech companies out profits, and the economy kept on motoring ahead.

• 34:00John Coogan?

  The fact that there's, yeah, we can move on.

• 34:03Jordi Hays?

  Yeah, I mean, the reason there's fixation Nvidia is currently, it's like 8% of the S and P 500.

• 34:11John Coogan?

  It's crazy.

• 34:11Jordi Hays?

  So like, it, it just, it matters more than any other. This, this feels like the most important earnings call of the year. Given, given the sell off in Neo Clouds, given the, the just like pressure and debate around OpenAI, given, given Google's investment and progress with the TPU. I mean, there's so many different factors. In related news, it got announced this morning, Musk's XAI and Nvidia to develop a data center in Saudi Arabia.

• 34:45Jordi Hays?

  It's a 500 megawatt data center in Saudi. XAI is working with Nvidia and a Saudi Arabian partner to develop a data center in the Kingdom. Musk said Wednesday at an event with the Crown Prince. They're teaming up with Saudi Arabia's AI company Humane. This can be 500 megawatts or enough electricity to power several hundred thousand homes for a year. The announcement came at the US Saudi Investment Forum. Of course, the Crown Prince announced a trillion dollars of investment in the US yesterday. President Trump touted Saudi's investment in the US and the partnership between the two companies, countries.

• 35:25Jordi Hays?

  My question is, like, there's no information here on, on how this data center is going to be used. Is this, do we expect XAI to be operating and competing as like an AI cloud? Or is this going to be something that they're, they, they want to have a local version of Grok, right? And I would, and to me, it seems much more likely that they're just going to be in the. Like they just want to be in the in like the data center business.

• 35:55John Coogan?

  Yeah. Oh, that. Yeah, that's a very interesting.

• 35:58Jordi Hays?

  And to me, that's always made sense because Elon is clearly better.

• 36:01John Coogan?

  Fantastic at that.

• 36:01Jordi Hays?

  Pretty much best in the world. I mean, he was. He was mugging Microsoft for bragging about how many million work hours, 15 million work hours, like more than more than. And so clearly very good at like large scale physical infrastructure build outs, getting getting access to energy, doing things on a ridiculous time horizon. And so in order to support XAI's valuation, I could see them trying to get into get into that game.

• 36:29John Coogan?

  Yeah, yeah. I mean, there's also the the possibility that if there is strong US inference demand, but latency is not an issue, like it might be valuable to actually just co locate the the data center next to the oil. So because maybe the energy is cheaper. Midjourney is, I believe, been doing that for a very long time, doing inference internationally because the data center demand during peak hours in the United States is more expensive than across the world.

• 37:00Jordi Hays?

  Let's pull up this.

• 37:00John Coogan?

  Let's pull up this video. And while we do, let me tell you about graphite dev code review for the age of AI. Graphite helps teams on GitHub ship higher quality software faster. Let's go to Elon Musk saying AI and humanoids.

• 37:15Speaker 03

  Eliminate poverty.

• 37:16John Coogan?

  Eliminate poverty.

• 37:17Speaker 03

  Tesla won't be the only one that makes them. I think Tesla will pioneer this, but humanoid robots. But but AI and humanoid robots will actually eliminate poverty. And Tesla won't be the only one that makes them. I think Tesla will pioneer this, but there will be many other companies that make humanoid robots. But there is only basically one way to make everyone wealthy, and that is AI and robotics.

• 37:41Speaker 04

  And we can't talk about robotics without AI.

• 37:46John Coogan?

  What do you think?

• 37:47Jordi Hays?

  All. All problems in the world solved by one product. I love it.

• 37:54John Coogan?

  I mean, it's not the craziest take over a long period of time, you know, you'd give everyone the ability to sort of marshal anything. It, you know, I wonder if we'll redefine poverty at that point.

• 38:10Jordi Hays?

  Yeah.

• 38:11John Coogan?

  Poverty will be not having a beachfront property, a beachfront mansion or something. Something that's truly scarce that even, even.

• 38:18Jordi Hays?

  This is my land thesis.

• 38:19John Coogan?

  Even an army of humanoids can't necessarily give everyone their own island.

• 38:25Jordi Hays?

  This is, this is, you know, we joke about land a lot. We joke about it being the most undervalued asset by the current generation of investors. But land is the one thing that even with an army of humanoids, like you can't as easily like copy and paste, right? Like it's just, it's just, it truly is scarce. It's not like land. It's not like land on the blockchain where people are like, no, like you can buy this plot of land on the blockchain and that's yours forever. And somebody's like, what if I just make another blockchain?

• 38:52John Coogan?

  Exactly.

• 38:54Jordi Hays?

  And I can also get from this piece of land, I can get from this piece of land on this blockchain to this other piece of land on this blockchain in a second.

• 39:01John Coogan?

  Yeah.

• 39:02Speaker 02

  If you have enough humanoid robots though, then land is actually not that hard to get.

• 39:06John Coogan?

  Why?

• 39:07Jordi Hays?

  You're saying like you would just put enough dirt in the ocean and like, it's like, oh, I'm sorry, you had this ocean property, actually I'm putting.

• 39:14John Coogan?

  Robot army? Oh, and then you just steal?

• 39:16Jordi Hays?

  Then you just take.

• 39:17John Coogan?

  But, but I think, I think what Elon's saying is like, if you assume a universal basic humanoid army, everyone gets 10 humanoids. And so the humanoids can cook for you, they can give you shelter, they can clothe you, they can give you healthcare. So you get everything that, you know, would typically be bucketed in poverty, but there's still scarce resources. There's only going to be one Mona Lisa. And so you gotta fight over that.

• 39:43Jordi Hays?

  Orange is in the chat says the humanoid form factor is silly, make it an R2-D2. I'm actually surprised, yeah, so one Matic. I gotta, I gotta give a shout out to Matic.

• 39:52John Coogan?

  He'd be crushing it.

• 39:53Jordi Hays?

  My Matic's been running in my house. No, no. Personally, been running it in my house daily for months now.

• 40:01John Coogan?

  That's fantastic.

• 40:02Jordi Hays?

  And it has worked flawlessly.

• 40:03John Coogan?

  Yes.

• 40:04Jordi Hays?

  I had like, you know, I feel like everybody's been disappointed by like a vacuum robot over the years. And so I didn't have the highest expectations, even though setting it up was like fast and it got to work quickly, but I've been shocked at how just well it's worked and haven't had to think about it. You replace the little bag every once in a while and it's great. But R2-D2 form factors, would love to see more of that.

• 40:32John Coogan?

  What do you want out of an R2-D2 though? Because the Roomba form factor, the Matic form factor where it goes and cleans, like that's pretty useful. But if you, like, is it an R2-D2 that it can fold your laundry, do your dishes? Like, you need to sort of define a few different, because clearly we're going to be in the age of like spiky intelligence and also like spiky humanoid usage. Like, they're going to be good at some stuff and bad at other stuff.

• 41:00Jordi Hays?

  So I think an R2-D2 form factor, you could reduce the number of motors that you need.

• 41:04John Coogan?

  Yeah, but what does it do?

• 41:05Jordi Hays?

  Potentially carry more weight, right?

• 41:06John Coogan?

  Carry? So it's going to carry you? Are you going to ride it?

• 41:09Jordi Hays?

  No.

• 41:10John Coogan?

  Explain what it's doing. Because in the classic Star Wars, R2-D2 is like, basically just like a hard drive that like carries like a video. Like, that's all he does, the whole movie.

• 41:22Jordi Hays?

  Yeah, but you can imagine it has a number of different...

• 41:26John Coogan?

  What does it have? What does R2-D2 have? Have you seen the movies?

• 41:29Jordi Hays?

  Doesn't it have like a screwdriver?

• 41:30John Coogan?

  It has a screwdriver. It's basically a USB cable that comes out and like plugs in, when it's like, you could just use wireless to hack the network or whatever.

• 41:40Jordi Hays?

  That's true. No, the other challenge with that form factor is, you have, so it's great if you have like a one-story home, if you have a second floor, R2-D2 is kind of cooked. R2-D2 starts asking like, he's like, hey, we're going to need some more CapEx. I need some...

• 41:55John Coogan?

  Can we get an elevator?

• 41:57Jordi Hays?

  Elevator, please. Elevator, please.

• 41:59Speaker 02

  I think if you're going Star Wars, I think the opt, if you want to talk about like Star Wars form factors, I think the optimal is General Grievous, or whatever the one that has a bunch of arms. Because basically, it can walk around like a normal human, except it has more arms.

• 42:11John Coogan?

  No, I completely agree with that. Bunch of arms form factor is...

• 42:14Jordi Hays?

  Yeah, everybody wants to make a humanoid. Nobody's trying to make the General Grievous.

• 42:21Jordi Hays?

  Six.

• 42:22John Coogan?

  Way better.

• 42:22Jordi Hays?

  Six.

• 42:23John Coogan?

  Way better.

• 42:23Jordi Hays?

  Or lightsabers.

• 42:24John Coogan?

  You, you distilling R2D2 as it has a screwdriver. It's like the most, it's completely mugged. Uh, but I mean, truly, other than just being like cute, R2D2 can't even speak English. Think about that. R2D2, it just goes beep boop beep boop boop boop again.

• 42:41Jordi Hays?

  I mean, the implication was like the general form factor of something that can roll around.

• 42:46John Coogan?

  Yeah.

• 42:47Jordi Hays?

  And has a lot of different capabilities built in. It doesn't have any capability.

• 42:52John Coogan?

  It has no capability.

• 42:53Jordi Hays?

  What are the capabilities? Can we pull up, can we pull up General Grievous on the screen?

• 42:58Jordi Hays?

  We need to be Grievous Max.

• 42:59John Coogan?

  R2D2 hacked the Death Star and saved Luke from the garbage disposal. Yes, two things that could have been done with wireless networking. It didn't need to plug in for that. Why, it is a hard drive. I'm, I'm getting into battle with the, with the chat right now. Um, we, uh, uh, can, can we tell the story of us risking our lives yesterday? We really should.

• 43:20Jordi Hays?

  Yeah, this was, this was truly incredible stuff. So, uh, we were looking, uh, we're, we're in the UltraDome here for at least another year. But, uh, we're starting to think about our, our second, uh, the, the next UltraDome.

• 43:34John Coogan?

  UltraDome V2.

• 43:34Jordi Hays?

  We want to get slightly more space. There's a number of different things that we want.

• 43:38John Coogan?

  There's General Grievous. That is the ideal humanoid form factor. And if you're not building that, it's a zero. What are you thinking? I think, I, I think Optimus would look way better with six arms. Not scary at all. It is crazy. They, they, they do the quadrupeds, but no one's, no one's really working on like the six-legged, six-arm, like the really crazy creepy stuff. There's been a couple humanoid robots that look really scary where they were like, wow, let's put it up on the meat hooks. Remember that one? That was crazy. That was a wild one.

• 44:09Jordi Hays?

  Was that the video where it started going?

• 44:11John Coogan?

  No, no, no, that's a different one. But this was a company that was like, here's our, here's our presentation. Like we're, we're ready to release our humanoid. And they were like hanging it up on meat hooks and, uh, and it looks so spooky. Spooky, because it was using muscle fibers, basically.

• 44:24Jordi Hays?

  Nathaniel Smith is, uh, very bearish on R2D2. A cellphone can do most of what R2D2 can do.

• 44:29John Coogan?

  Completely agree. I, R2D2 cute for sure. Like definitely like fun to have around, uh, but more of just like a toy companion. And, and you know, we, we looked at that lamp and that lamp, we, we were kind of like, what is that lamp? And I think there's just like, it's just delightful. Like it's just nice to have around. It's like this, this turbo puffer here thing. Search every byte. You know, service vector and full text search built from first principles on object storage, fast, 10x cheaper and extremely scalable. Like the turbo puffer, I mean, obviously we're sponsored by them, but this is something you might have in your house just because it's cute. People like having cute things around.

• 45:03Jordi Hays?

  Many people have asked.

• 45:04John Coogan?

  And having an R2-D2 in your house would be cute until it runs into a stair and goes tumbling down and smashes into a million pieces.

• 45:11Jordi Hays?

  Anyways, so we're looking, so we found a space that we love. It's dome-like. We're looking for a space in LA that is fit for the UltraDome. There's not a lot of things that qualify. And so we had looked at the space a couple times. I had seen it with Ben. John and I drove by it and then we went back to look, do another walkthrough.

• 45:33John Coogan?

  You were excited.

• 45:34Jordi Hays?

  And we're getting like, I'm like extremely excited about this space.

• 45:36John Coogan?

  You were pitching me.

• 45:37Jordi Hays?

  I'm pitching John on it.

• 45:38John Coogan?

  Oh, don't you think this is gonna be amazing?

• 45:39Jordi Hays?

  Here's where this thing goes.

• 45:40John Coogan?

  You made us, on the way to the show in the morning, you make me poke my head through the window.

• 45:45Jordi Hays?

  I was really selling John on it.

• 45:47John Coogan?

  Then we go back at the keys, we go in.

• 45:49Jordi Hays?

  Really selling John on it. It's a beautiful, beautiful space. It's like a few minutes from where we are now. Made a lot of sense.

• 45:55John Coogan?

  Sorry, sorry, sorry. Ethan says R2-D2 is the original digital guy.

• 45:58Jordi Hays?

  True.

• 46:00John Coogan?

  Yeah, digital guy is incredible, for sure. Sorry, anyway.

• 46:06Jordi Hays?

  So anyways, we go for the third time to this space and I'm just selling John on every, every inch of the space. I'm like, this is what we're gonna do here, this is what we're gonna do here, here's where the trust is gonna go, here's where the production team's gonna go. And we're just walking around, kind of getting, getting a feel for it. And we're basically wrapped up, like, we're super excited about it, not necessarily ready to make an offer on it, but certainly like, we're like, okay, this is by far the best option that we've found. We've looked at a bunch of spaces.

• 46:35John Coogan?

  It checks a bunch of the boxes.

• 46:36Jordi Hays?

  Checks a lot of boxes. And right as we're about to leave, John like looks over and there's like a closet. Door with a key in it and you just like walk over, I just walk, watch you walk over and like open it up and you start looking, looking around and first I make the joke, I'm like, oh, this is like the, the intern closet. Cause it's like this really long, narrow, like hallway thing that's just like a, it's, it's like the worst room you can imagine. And, and so the idea of putting Tyler in it was, was, uh, was at least entertaining. Uh, and then we're like, wait, what's that humming sound? And there's like this box that's like covered up and it's just like this, like not super loud, but just like constant humming sound. And we asked the, the broker, we say-

• 47:14John Coogan?

  Super weird because it was drywalled. Like you walk into this, to this big room, it's a big room. And then within that big room is a massive drywalled box.

• 47:23Jordi Hays?

  With no entrance.

• 47:24John Coogan?

  No entrance to the box, but it's drywalled. Like you don't usually see drywall inside of a room that's not, doesn't go all the way to the ceiling. And so it was very clear-

• 47:32Jordi Hays?

  And so we walk into this room that has-

• 47:34John Coogan?

  They were hiding something basically and you couldn't see.

• 47:36Jordi Hays?

  There's no purpose to the room.

• 47:38John Coogan?

  Yeah.

• 47:38Jordi Hays?

  Other than it just stores the box.

• 47:40John Coogan?

  It stores the box.

• 47:40Jordi Hays?

  That has no entrance.

• 47:41John Coogan?

  That has no-

• 47:41Jordi Hays?

  And it's humming.

• 47:42John Coogan?

  Yes.

• 47:42Jordi Hays?

  And, and we look around and John's like, what's in the box? And the real estate agent- The broker says, the broker says, oh, that's just the machine that cleans the soil. And we were-

• 47:53John Coogan?

  No, no, no. She said, she said, uh, that's just the machine.

• 47:59John Coogan?

  That's just the machine. And we're like, oh, like-

• 48:02Jordi Hays?

  What kind of machine?

• 48:03John Coogan?

  What kind of machine is in there?

• 48:04Jordi Hays?

  And she's like, don't worry about it.

• 48:05John Coogan?

  She's like, don't worry about it.

• 48:06Jordi Hays?

  It's not a big deal.

• 48:07John Coogan?

  Yeah. Just like, you know, buildings have machines sometimes. There's a machine in there. It's a machine.

• 48:11Jordi Hays?

  It's always on, but you don't, it's, it, we took that out of the square footage. So don't worry.

• 48:15John Coogan?

  Oh, yeah. That was a wild one. We took it out of the square footage.

• 48:17Jordi Hays?

  We wouldn't bill you for it.

• 48:18John Coogan?

  And, and so we're like, okay, what type of machine is it?

• 48:20Jordi Hays?

  And then she goes, it's a machine that cleans the soil.

• 48:23John Coogan?

  And we're like, is this on like some sort of haunted burial ground or something? Like what are we doing down there?

• 48:28Jordi Hays?

  Is this a hazardous waste site? And she goes again, really not a big deal. I would worry about it if you were going to buy the place, but since you're just planning to lease, don't worry about it. And then we were like- Okay, like, the more you tell me not to worry about it, like, I kinda wanna know more. So what's it cleaning up? And she's like, oh, I mean, there's, it's 85% of the way clean. We're like, what's, what's getting cleaned?

• 48:55John Coogan?

  When did this process start? How long will that go? Has it been going for 100 years?

• 48:59Jordi Hays?

  And we're like, will the box, will the machine?

• 49:01John Coogan?

  It didn't start an hour ago, and it's just gonna be 15 more minutes? Like, you gave us no context to actually project out what 85% of the way means. And, and finally, she's like, there was a laundromat here ago, and we start piecing it together. And we kind of like, don't wanna press her on it too much. So we leave and start doing some Googling. We figure out that it's not a super fun site, but apparently, there was a, there was a laundromat there that was using toxic chemicals that leaked-

• 49:30Jordi Hays?

  No, it was a machine shop.

• 49:31John Coogan?

  Oh, a machine shop? Oh, that's what we figured out. So they said laundromat, and apparently, laundromats can give off toxic chemicals that if they get in the ground, can be very cancerous for a very long time. This was apparently a machine shop, like, almost 100 years ago or something? And they're working on cleaning the soil. But I still don't even understand how you clean all of the soil under an massive building, without causing a collapse. Is it like, a whole bunch of tunnels that are digging around under there?

• 49:57Jordi Hays?

  It's a bunch of R2-D2 robots.

• 49:58John Coogan?

  Maybe it's a bunch of R2-D2s, honestly.

• 50:00Jordi Hays?

  Anyway, so, so she's still saying, "Yeah, I really wouldn't worry about it. It's just like, not that big of a deal. It's just a machine. It just runs. You won't even know that it's running. We'll keep the door closed." And granted, the machine would be like, 10 feet from the set. So we'd be sitting here doing the show, and you just have the death machine running, right there, always. So anyways-

• 50:22John Coogan?

  It was very, very bizarre. It was one of the funniest, like, just, like, jump scares ever. Very, very good.

• 50:28Jordi Hays?

  It was just, it was such a good bit, too, because I'm, I'm far more health-conscious, I think, than you. And even you were thinking, "There's no way we're gonna lease an Ultra Dome that has a death machine that always needs to run."

• 50:43John Coogan?

  I I just I I found it so fascinating that it could sit there and clean the soil for years with a massive machine the size of a giant room. I want to learn more. I want to know what that machine is. I want to know what company makes it.

• 50:59Jordi Hays?

  I want to invest in that company.

• 51:00John Coogan?

  Exactly. That's what I want to know.

• 51:01Jordi Hays?

  We got to figure out how to make money on that machine.

• 51:03John Coogan?

  We got to have the CEO of whoever makes that machine on the show. I want to get to the bottom of it. We need to do a deep research report. Tyler, can you fire off Gemini 3 Pro Deep Thinking Max 24/7 mode where it works for ages, works for eons?

• 51:18Jordi Hays?

  So, so I found two groups, CDE group, soil washing equipment.

• 51:22John Coogan?

  Okay.

• 51:23Jordi Hays?

  Our wet processing equipment extracts maximum value from hazardous soil.

• 51:28John Coogan?

  But so is it just that corner that has the hazardous soil? What I want to know is, is it going under the building and then over so that underneath us over here, the machines here, is it digging a tunnel that goes underneath the building and then washes over here too? Are there, is there a network of tunnels under that building? I have to know. We have to go back. We have to lease this thing. We have to buy the building just to get to the bottom.

• 51:58Jordi Hays?

  Just to get to the bottom of it.

• 51:59John Coogan?

  I have to know. I I I'm I'm ravenous for information.

• 52:02Jordi Hays?

  Yeah, the cool thing is they use physical and chemical methods to separate heavy metal from soil.

• 52:08John Coogan?

  That's super cool. That's super cool.

• 52:09Jordi Hays?

  That's exactly what we want.

• 52:10John Coogan?

  That's exactly what we love. Well, in in other news related to water.

• 52:17Jordi Hays?

  I think I found the machine. We got to pull it up. I can't, we can't leave people hanging.

• 52:21John Coogan?

  Machine stream.

• 52:22Jordi Hays?

  Yeah, I dropped, I dropped one of the makers of these machines.

• 52:24John Coogan?

  It sounds like fracking. Yes. If we could, if we could frac directly some natural gas out of the soil and then use it to power a natural gas turbine that we use to, you know, run the show and power us, I'm I'm down for that. While you're looking that up, let me tell you about fin.ai, the number one AI agent for customer service. If you want your AI to handle customer support, go to fin.ai. So in the water news, okay, you want to pull up that and then we can go into the water news. I got to talk about Andy Masly at some point this show. I.

• 52:58Jordi Hays?

  I just, I want to see a reaction when you start to see.

• 53:01John Coogan?

  The scale of this.

• 53:02Jordi Hays?

  The scale of this contraption and how it pretty much perfectly fits into. The box.

• 53:08John Coogan?

  Yes, yes, yes. Fracking with extra steps. Language, please. Was someone swearing? I don't know. Anyway, let's pull that up. Let me also tell you about Profound. Get your brand mentioned in ChatGPT. Reach millions of consumers who are using AI to discover new products and brands.

• 53:27John Coogan?

  Let's see about this water story Andy Masley is going back and forth with.

• 53:35John Coogan?

  What's her name? Karen?

• 53:39John Coogan?

  The AI and the environment somewhat related to our own environmental story that we could kind of go through.

• 53:47Jordi Hays?

  How we doing, boys? There we go. Look at this, John.

• 53:51John Coogan?

  Okay, okay.

• 53:52Jordi Hays?

  This is from GN Separation. Core equipment for contaminated soil washing. And you just look at this machine. This is pretty much exactly what would have been in the, in the, in the room.

• 54:04John Coogan?

  Soil washing. You have to wash all the soil.

• 54:09Jordi Hays?

  And there's a graphic if you scroll down a little bit more.

• 54:12John Coogan?

  I want to know so much more.

• 54:13Jordi Hays?

  Look at this.

• 54:16John Coogan?

  It's a simple process. It's 85% done. It's 85% done.

• 54:21Jordi Hays?

  We just need to get the hazardous waste into the decanter centrifuge and then get it into the non-acceptable solid second wash. Then take the acceptable solid up to the coarse screen into the washing fine screen. And then take the washing chemical and bring it up into the washing reaction tank. Put it back in the centrifuge, push it down into the soil, filter press, de-watering screw press. And then move it back up through the hazardous waste, John, and you're good.

• 54:49John Coogan?

  Doug, so Doug is asking if it's behind drywall, like is that because it generates fumes? We have no idea. Maybe it does generate fumes.

• 54:57Speaker 03

  We still don't know how they access it without knocking down all the drywall.

• 55:00John Coogan?

  Yeah, we don't know how they access it. Is the drywall just up? And also, I really want to know, like, was there another entrance that someone could go into? Like, what if the machine breaks while we're there? Does someone come by and change out something? Does this machine need to be turned off at night? Does it require, is it fully automated? Does it just run for years? Would we have never seen a technician come by? What if it gets jammed? Like, is it just the most flawlessly built machine in the world that never breaks? That seems unfathomable. All machines break. All machines need some level of, of attention from time to time. But maybe it's the most perfect machine.

• 55:36Jordi Hays?

  And the machine is of course made by Hebei GN Solids Control Co., which is a China-based company.

• 55:43John Coogan?

  Wow. Well, we don't know that this is the actual machine, but who knows? Anyway, let's go over into the environmental impact of artificial intelligence. There was a very funny post from Henry Thunberg, who says, "Whoa, I had no idea that AI uses 5,329,584 water per year. That's insane. Like, it uses just one water." Yeah, people are all over the place with the water thing. It's so interesting because no one is debating that it uses a lot of energy. Like, you could just have all the same discussions about energy. Like, we're actively burning natural gas for a lot of this AI stuff.

• 56:27John Coogan?

  Like, all of the old-school "don't cause global warming by burning fossil fuels." Like, all of those, all of those, like, claims apply to AI today. Like, you could just make those claims. But instead, everyone seems to have been, like, caught up in this water. "Oh, the water usage is so bad." And it's like, you had a layout right here, which was like, "We're burning fossil fuels, and that's bad."

• 56:50Jordi Hays?

  Is it because water feels more scarce to people than electricity?

• 56:55John Coogan?

  Maybe.

• 56:55Jordi Hays?

  Energy in general?

• 56:56John Coogan?

  It's like, if I can't drink water, I die. But if I can't access natural gas, like, I can still live, maybe?

• 57:02Jordi Hays?

  Yeah, or the sun beams energy on the Earth daily.

• 57:06John Coogan?

  Yeah, and maybe it's easier to spin move out of that, being like, "Well, we're doing nuclear and solar tomorrow. Next year, we're doing nuclear and solar." So, like, you don't, it's not a gotcha that I'm using natural gas today, because tomorrow I'm going to be using nuclear and solar. Maybe, maybe. Whereas the water issue might be, like, more, like, it's not as concise to wrap up in a bow. But anyway. We covered this story yesterday a little bit, and I wasn't able to pull up the original post. Andy Masley called me out, he put me in the truth zone. He said, "John, you follow me. How do you not know where the story broke? I broke the story." And yes, Andy Masley, you did break the story. And so, we wanted to run through a little bit of this post to actually understand the

• 57:49John Coogan?

  claim about what he's saying went wrong here. And basically, the high level is that, he says, "This is the single most massive factual error in a major book I've ever personally noticed on my own, and I think I'm the first person to notice it. Empire of AI asserts that a data center is using 1,000 times as much water as a city. In reality, it's 22% of the city's water." And so, the chapter turns to Chile. We talked about this a little bit. It's a unique combination. Look at this line again. So, the line says, "In other words, the data center could use more than 1,000 times the amount of water consumed by the entire population of Cerillos," that Chilean city, "roughly

• 58:32John Coogan?

  80,000 residents over the course of a year. How justifies this number? In the notes, saying, "In other words, the data. The Google Environmental Impact Report to SEA stated that the data center could use 169 liters of potable water a second or 5 million..." Oh, it's right there, that's the same number. "5 billion liters a year." According to the Water Service Authority in Cerillos, the municipality consumed 5 million liters in all of 2019, the year Google sought to come in. 5 billion liters a year divided by 5 million liters equals 1,000. Something isn't adding up here. It doesn't make sense that you could use 1,000 times the amount of water used by that city.

• 59:16John Coogan?

  And so, Andy Masley has successfully put this book, Empire of AI, in the truth zone. And we thank him for his service.

• 59:27John Coogan?

  Let's go back to the timeline, but first, let me tell you about numeralhq.com. Let numeral worry about sales tax and VAT.

• 59:35John Coogan?

  numeralhq.com. New product from Travis Kalanick. That's exciting.

• 59:39Jordi Hays?

  Big.

• 59:40John Coogan?

  Try picnic.com slash request picnic. Travis says, I'll come out of Twitter retirement for this one. Picnic at work. LFG. Great job with.

• 59:50Jordi Hays?

  Picnic is delivering lunch directly to your office floor with no fees and no tips. Every day from 50 plus restaurants. Sign up your office for free.

• 1:00:00John Coogan?

  Okay. There's only one benchmark for this stuff. We gotta look at the benchmarks. What's the max amount of protein? Is it over 200?

• 1:00:08Jordi Hays?

  Are they protein maxing?

• 1:00:09John Coogan?

  Is it over 200? Because we saw the, a major, major jump in, in, uh, in the amount of protein in a bowl yesterday with Sweetgreen. Sweetgreen's at 108 now. This is the most important benchmark in the bowl economy, which I'm a huge fan of. But are we seeing acceleration? Are we seeing a fast takeoff in the amount of protein? I want to be seeing 200 grams of protein, then 1,000, then 10,000, then 100,000. It should be 10x-ing every year, just 10x that. Yes, exactly. So.

• 1:00:40Jordi Hays?

  Everyone's always talking about fast takeout, but we need to be talking about a fast takeoff.

• 1:00:45John Coogan?

  Casual takeoff.

• 1:00:46Jordi Hays?

  No, just a fast takeoff in, in protein per serving.

• 1:00:50John Coogan?

  Yes.

• 1:00:51Jordi Hays?

  Anyways, I think this is smart.

• 1:00:53John Coogan?

  What does this actually mean?

• 1:00:54Jordi Hays?

  This has to be built on top of.

• 1:00:55John Coogan?

  Ghost kitchens?

• 1:00:56Jordi Hays?

  Cloud kitchens.

• 1:00:57John Coogan?

  Cloud kitchens.

• 1:00:57Jordi Hays?

  I wonder if it's a separate company or it's just a subsidiary, kind of a front end for cloud kitchens. And, uh, but either way, I think people just don't like paying delivery fees. And, uh, and tipping too is still, uh, you know, debated.

• 1:01:17John Coogan?

  Yeah, so you get sort of one.

• 1:01:19Jordi Hays?

  And part of it, part of it is like, I feel like a lot of, a lot of these things, if you just build it into the cost of the food, people feel better about it. But when you're. When people are forced to make the decision around tipping for something they want to do every single day and it's like, well, you know, maybe, maybe it's great sometimes, maybe it's not, but you're setting these things oftentimes before.

• 1:01:39John Coogan?

  Yeah.

• 1:01:40Jordi Hays?

  So.

• 1:01:40John Coogan?

  Yeah, a lot of the tipping stuff, it just, it needs to be like injected in the UI at the right time and a lot of the apps don't necessarily like, like prompt for the tip at the right time. Like if you ask, if you ask for the tip before the service is rendered, it's hard to use the tip as a, as a quantitative feedback mechanism.

• 1:02:01Jordi Hays?

  Exactly, exactly. So, so I will, when I order, I order delivery from a grocery store.

• 1:02:06John Coogan?

  Yeah.

• 1:02:07Jordi Hays?

  And I tip like.

• 1:02:10John Coogan?

  Up front.

• 1:02:10Jordi Hays?

  Up front.

• 1:02:11John Coogan?

  Do they see the tip?

• 1:02:13Jordi Hays?

  That's the other thing. I don't know. I don't know. In theory, I'm like, I'm gonna tip because I want you to not throw the drinks a bunch.

• 1:02:19John Coogan?

  Exactly. Exactly. I do that. But, but then, yeah.

• 1:02:24Jordi Hays?

  Getting the, the fact that we've just normalized getting, getting an exploded bag of drinks in a, in a, in a bag is just, is funny.

• 1:02:32John Coogan?

  Uh, back to the press release economy. Today's press release is out. Brookfield today announced the launch of a $100 billion global AI infrastructure program in partnership with Nvidia and the Kuwait Investment Authority. There are tons of press releases going out every single day. Uh, Daniel Tenereau says, running a business is all about partnerships, all about announcing partnerships.

• 1:02:56Jordi Hays?

  It's not even about, you don't even necessarily do, need to do the partnership. You just got to announce the partnership.

• 1:03:00John Coogan?

  I mean, the partnership economy is going crazy right now. Like the prediction markets are obviously the, the, the, the most heinous offenders with a new, a new partnership like every single day. Uh, it's hard to keep up with. We obviously are partnered with, uh, Polly Market and we want to celebrate them when they do great things, but, uh, there's a lot of these things going on. Uh, and so we tend to give you a little bit of a higher level review.

• 1:03:23Jordi Hays?

  On the prediction market front, somebody just leaked a bunch of screenshots from Coinbase's upcoming prediction market.

• 1:03:31John Coogan?

  Yeah.

• 1:03:31Jordi Hays?

  Uh, everybody's getting into this game. There's different approaches. Some are, some are like partnering with existing prediction markets. Others are building it, you know, entirely themselves.

• 1:03:40John Coogan?

  Yeah.

• 1:03:41Jordi Hays?

  I'm interested, I'm more interested to see if, when Coinbase does their prediction markets product, how are they actually running it under the hood? Are they taking on the responsibility of actually like? Managing the markets, being a market maker, what is that actually going to look like?

• 1:03:55John Coogan?

  They should just hire a guy on the other side of every trade. Where you just go to Coinbase and you say, look, I want, I want 50 bucks on the Eagle. And the other guy says like, yeah, I'll take that. I think they're going to lose. And that's how it goes. It should be a guy that you call.

• 1:04:08Jordi Hays?

  Almost like a bookie.

• 1:04:09John Coogan?

  They should acquire mybookie.ag.

• 1:04:11Jordi Hays?

  Maybe mybookie.ag should pivot to not having any digital experience and just lean into being. No, no, no. Lean into just the guy.

• 1:04:20John Coogan?

  Oh, the guy. Yes. Actually become a guy. Become a guy company.

• 1:04:26John Coogan?

  Cloudflare unfortunately had an outage yesterday. We were not affected. Although Tyler, do you want to take us through how we seem to be dodging exposure to internet outages lately? What's going on?

• 1:04:40Speaker 02

  Well, so I mean, to be clear, all my systems were fine, but I recently moved some of the kind of backend processes we use onto like a local machine.

• 1:04:49John Coogan?

  Yeah. You went on-prem?

• 1:04:50Speaker 02

  Yeah, on-prem. And then I used Cloudflare Tunnels to like help do like API stuff.

• 1:04:55John Coogan?

  Okay.

• 1:04:56Speaker 02

  So I was worried for a second that I, the stuff that I moved off AWS onto on-prem was actually going to go down because of the cloud.

• 1:05:02John Coogan?

  Because AWS was down, what, two weeks ago, three weeks ago or something?

• 1:05:05Speaker 02

  Yeah, I think it was longer than that.

• 1:05:07John Coogan?

  Maybe longer. That one was rough. I feel like, I feel like that day, we actually did cancel a bunch of guests. There was, there was a lot of stuff going on. We've had a few, we've had a few rough outages, but let, let's read a little bit of the, of the postmortem from the Journal, because it did make front page news. Obviously, sending our best to Matthew Prince over at Cloudflare and the team, hoping for a swift recovery because we love the internet and we love them. An outage that knocked swaths of the internet offline was resolved Tuesday after drowning social media sites, disrupting retail sales and stalling transportation networks. Users visiting sites including X, ChatGPT, DoorDash, IKEA, Metropolitan Transport Authority in New York City,

• 1:05:49John Coogan?

  were met with error messages related to Cloudflare, a cloud provider used by major companies for security tools that's protect from cyber attacks and traffic surges. A spokesperson, a spokeswoman. From CloudFlare, said an unusual rise in traffic to one of its services at around 6:20 a.m. Eastern Time caused traffic passing through the company's network to experience errors. The bug was fully resolved by 9:30, she said in an update. For several hours Tuesday, users were unable to access sites and services from retail and social media to financial services. The outage echoes problems with AWS. CloudFlare and AWS services were effectively invisible to users, but their tools underpin many people.

• 1:06:32John Coogan?

  So, I don't know if there's a full breakdown here. Last year, a bug in a tool used by cybersecurity company CrowdStrike upended computer systems across the world. There's just a lot of these going on, but I don't think we have like a full postmortem. I would love to know exactly what happened. It's always interesting. We failed our customers.

• 1:06:52Jordi Hays?

  I'm interested to know what happens to the business when they have these outages. Because on one hand, it's a great way to tell the world that the entire world runs on CloudFlare, or at least like a large amount of it.

• 1:07:02John Coogan?

  Sort of a Super Bowl ad.

• 1:07:03Jordi Hays?

  Yes. It's like, very much so.

• 1:07:06John Coogan?

  Yeah. You just like give everyone the all.

• 1:07:08Jordi Hays?

  And then you talk about the stress from the CloudFlare team where anybody that's built a software product has experienced the product going down and the stress around that. But it's like when your product goes down and then, you know, many of the services that people use and love across the country and the world also go down, it's even more stressful. But it also probably brings like a ton of, you know, ton of traffic to the site and people might start evaluating some features and say, hey, maybe this is a good solution. I'm gonna watch, I'm gonna sign up and see how they kind of react to this.

• 1:07:37John Coogan?

  Well, I mean, the CloudFlare team reacted very well. They got a lot of praise for their response. Dane Connect here says, or Nect, he's the CTO of CloudFlare. He says, "I won't mince words. Earlier today, we failed our customers and the broader internet when a problem in CloudFlare's network impacted large amounts of traffic that rely on us, the sites, businesses and organizations that rely on CloudFlare, depend on us being available. And I apologize for the impact we caused to transparency about what happened, and we plan to share a breakdown with more details in a few hours. In short, a latent bug in a service underpinning our bot mitigation capability started to crash after a routine configuration change we made."

• 1:08:20John Coogan?

  That cascade into a broad degradation to our network and other services. This was not an attack. That issue impacted caused and time to resolution is unacceptable. Work is already underway to make sure it doesn't happen again. But I know I caused real pain today. Ooh, I know I caused, I know it caused real pain today. The trust our customers place in us is what we value most. Just taking full responsibility here. Lulu says, well done. Response and the comments reflect that. People in the comments are very happy.

• 1:08:55John Coogan?

  Mert, of course, always having fun. Okay, thanks, Dane. But have you considered that blockchains handling 0.000001% of your load did not go down? Very funny.

• 1:09:06Jordi Hays?

  There was another company.

• 1:09:07John Coogan?

  And Zach Hunter has a picture here from, from Shogun, I think. Says CloudFlare's comms playbook. I ask permission to commit Sapoku. Because they're just like fully throwing themselves down, just being like, yeah, we're 100% responsible. We won't mince words. Pretty sweet.

• 1:09:25Jordi Hays?

  We should get into Mr. Hobart's piece.

• 1:09:29John Coogan?

  We should. He's joining the show in just a few minutes. Tyler, what you got?

• 1:09:32Speaker 02

  Before I, there are breaking news. OpenAI new model.

• 1:09:35John Coogan?

  New model.

• 1:09:36Speaker 02

  Yeah, GPT 5.1 Codex Max.

• 1:09:38John Coogan?

  Okay.

• 1:09:39Jordi Hays?

  They're firing back.

• 1:09:40John Coogan?

  They're firing back.

• 1:09:41Jordi Hays?

  We were debating, did they have the juice?

• 1:09:43John Coogan?

  Well, what's interesting is that Gemini 3, the one benchmark that it didn't outdo Anthropic on, it was better in a lot of benchmarks, but it wasn't better at Sui Bench, correct?

• 1:09:55Speaker 02

  Correct.

• 1:09:55John Coogan?

  And so, and so that was, of course, a testament to like Anthropic being really, really great at doing just something special in code. Obviously, that's aligned with their mission of reaching superintelligence through self-replicating code essentially. But a fascinating like, you know, durability of their business that even with this Gemini 3 thing that's so good at all these different things, Anthropic's still on top in Sui Bench. But do we know how OpenAI is faring in this bench? Is there any reaction? What can you tell us about the latest model from OpenAI? Because we got to get to the bottom of it. And while you look it up, I'm going to tell everyone about Vanta, automated compliance and security with the leading AI trust management platform. Also, Suno raised $250 million to build the future of music.

• 1:10:40John Coogan?

  I'm going to hit the gun while Tyler pulls up the reaction.

• 1:10:47Jordi Hays?

  Great hit to open up the day. While Tyler gets into that, there is some breaking news. Glu has hit the public markets. Christian Tech Group tests investors' faith in AI deals on Wall Street debut. Shares in a company backed by former Intel chief Pat Gelsinger waiver after scaled-back IPO. I didn't realize that Glu was IPO-ing.

• 1:11:15John Coogan?

  No, I didn't know.

• 1:11:16Jordi Hays?

  Pat's company. Shares in a company developing AI software to connect Christian organizations across the US wavered in its Wall Street debut.

• 1:11:24John Coogan?

  Oh.

• 1:11:24Jordi Hays?

  Following a scaled-back initial public offering.

• 1:11:27John Coogan?

  That's very cool.

• 1:11:28Jordi Hays?

  Glu counts Pat Gelsinger as exec chair and video rental store Blockbuster's former chief operating officer Scott Beck as chief executive. Rose as much as 5% after it began trading on Nasdaq on Wednesday morning, having raised 73 million from investors. The average share price pop for a US IPO that has raised 25 million or more this year is nearly 25%, according to Renaissance Capital Management. Founded in 2013, Glu hopes to pull the Christian faith into the digital age by using values-aligned generative AI to distribute content and sell marketing services to ministries and community outreach groups. "There's an imperative to shape technology for good. On its own, it isn't

• 1:12:09Jordi Hays?

  good or bad. The question is what it's used for," Beck told The Financial Times. And anyways, so, wasn't tracking this one, but really enjoyed having Pat on the show a while back.

• 1:12:23John Coogan?

  Yeah. No, he was amazing. I'm very excited for him. He's just like, I don't know, just fun to talk to. Let's run through Bern Hubert's Economist piece. But first, Tyler, did you give us any?

• 1:12:38Speaker 02

  Yes. So, previously, the Codex, a Sweetbench verified, was 73.7. And now, with like the highest reasoning, it's at 77.9.

• 1:12:47John Coogan?

  Okay.

• 1:12:48Speaker 02

  And then, Sonnet 4.5 is, it's always kind of hard to tell like what exactly it is because people measure it differently.

• 1:12:55John Coogan?

  Yeah, don't they just take some of the questions out sometimes?

• 1:12:57Speaker 02

  Yeah, sometimes they do that. So, Sonnet 4.5 is like officially 77.2, so that's lower. But then, with parallel test time compute, it's at 82%. So, it's kind of unclear what that like really means. But it's definitely better.

• 1:13:13Speaker 02

  This is a big improvement.

• 1:13:14Jordi Hays?

  Isn't parallel test time compute just a real guy who's just kind of sitting there being like, "Oh, don't, actually, don't do it like that. Do it like this."

• 1:13:22Speaker 02

  I think that the main headline is that they said.

• 1:13:26John Coogan?

  Yeah, tool use. You kind of find, you find a dude who's a bit of a tool and you tell him, "Hey, I can't solve this. You gotta do it, human. I gotta kick this one out to you. Do this arc puzzle for me."

• 1:13:35Jordi Hays?

  AJ, our incredible brokers in the chat, he's talking about the office debacle. He said, "LMA, I still can't believe that happened. Maybe something landlord brokers should disclose before tour."

• 1:13:47John Coogan?

  I can't believe he's in the chat watching.

• 1:13:51Jordi Hays?

  AJ's been incredible finding us every, every possible, every possible space in the greater Los Angeles area for the next UltraDome. Highly recommend if you're in the LA office market.

• 1:14:05John Coogan?

  Yes. I also recommend Figma. Think bigger, build faster. Figma helps design and development teams build great products together. So, we have our update. We will keep monitoring the GPT 5.1 Codex Pro Max.

• 1:14:18Speaker 02

  One more thing, there's an interesting headline. They said there was some task they found that the model worked for more than 24 hours.

• 1:14:25John Coogan?

  Ooh.

• 1:14:26Speaker 02

  Which is like, that's, you know, if you're, if you're following that, that one meter chart.

• 1:14:30John Coogan?

  Yeah, yeah, yeah.

• 1:14:30Speaker 02

  Where it's the time horizon.

• 1:14:33John Coogan?

  That's super interesting.

• 1:14:34Speaker 02

  Definitely a good sign.

• 1:14:35John Coogan?

  Okay.

• 1:14:35Jordi Hays?

  Have you ever worked for 24 hours straight?

• 1:14:40John Coogan?

  Buckle up, buddy.

• 1:14:41Speaker 02

  It depends on how you.

• 1:14:41John Coogan?

  Time to take it for a spin.

• 1:14:42Speaker 02

  Yeah.

• 1:14:43John Coogan?

  See what that brings.

• 1:14:44Jordi Hays?

  Tyler Bench.

• 1:14:46John Coogan?

  I would love to know what it actually is doing for 24 hours. I want to know the prompt and I want to know the output.

• 1:14:52Speaker 02

  Yeah, that's what people are asking.

• 1:14:53John Coogan?

  Yeah, of course.

• 1:14:53Speaker 02

  They didn't say that in the press release.

• 1:14:56John Coogan?

  Because, I mean, it's like, just, just sit there like.

• 1:14:58Speaker 02

  It was working on the easiest problem, just trying to debug it because it's so.

• 1:15:01John Coogan?

  Yeah, or, I mean, I mean, there is a world where it's like, hey, the prompt is like, just go take a crack at every single open GitHub issue on every repo for as long as you can and work on it. And then you're basically just wrapping another for loop around it. And it's like, is that one, like, there's obviously a lot of.

• 1:15:19Speaker 02

  Yeah, but even if it is that.

• 1:15:20John Coogan?

  That's cool.

• 1:15:21Speaker 02

  Like having a task that you can continuously work on.

• 1:15:23John Coogan?

  Totally.

• 1:15:23Speaker 02

  Just having a, like, kind of plan that you can maintain and you don't get lost.

• 1:15:27John Coogan?

  Totally.

• 1:15:27Speaker 02

  Is still like a.

• 1:15:28John Coogan?

  Yeah, yeah, yeah. Yeah, no, I mean, in general, I would imagine that there's maybe some SaaS productization, but there's also just some, a ton of value to having agents that sort of roam through your organization continuously and clean up data or look for different errors or just do opportunistic tasks. That seems very bad.

• 1:15:49Jordi Hays?

  Trey, Trey says, count for 24 hours. Yeah, Tyler, do you think you could count for 24 hours?

• 1:15:53John Coogan?

  Mr. Beast has literally done that. Count, there's a YouTube video up. It's 20, I think it's 24 hours.

• 1:15:58Jordi Hays?

  What about, what about doing one rap of 135 every five minutes for 24 hours?

• 1:16:06John Coogan?

  That would be hard.

• 1:16:07Jordi Hays?

  That would probably get absolutely brutal by, I don't know, I don't, I don't know if that would, I think, I think you would, I think most people, it sounds like, doesn't

• 1:16:17John Coogan?

  Yeah, it sounds very easy, but I imagine it'd be very difficult.

• 1:16:20Jordi Hays?

  Anyways, we have to talk about.

• 1:16:22John Coogan?

  Byrne Hobart.

• 1:16:23Jordi Hays?

  Byrne Hobart, the legend of bubble talk.

• 1:16:26John Coogan?

  The king of bubbles.

• 1:16:27Jordi Hays?

  King of bubble talk.

• 1:16:27John Coogan?

  Yeah.

• 1:16:27Jordi Hays?

  He wrote the book on bubbles.

• 1:16:29John Coogan?

  He wrote the book on bubbles. Yes.

• 1:16:31Jordi Hays?

  In, he's in The Economist. He says, how I learned to love financial bubbles by the author of a book on bubbles.

• 1:16:38John Coogan?

  So, it says, tech stocks have sold off this week over fears of frothiness and artificial intelligence, AI. I love that.

• 1:16:46Jordi Hays?

  Economist adding that in.

• 1:16:47John Coogan?

  Some investors were no doubt surprised by this, but for the others.

• 1:16:51Jordi Hays?

  Some, some, some, some reader out there is just like, I never, I never put that together. That artificial intelligence was the thing that people were talking about.

• 1:17:00John Coogan?

  They have a very broad audience of The Economist, but I, I absolutely love The Economist. I've been a subscriber for probably over a decade. The signs of an AI bubble have been there for some time. Cluley, whose original product was a tool for using AI to cheat during Zoom job interviews, raised $15 million and then dropped its cheat on everything tagline and pivoted to being a more benign AI meeting assistant. More serious AI labs have been able to raise 10-figure sums and 11-figure valuations, not just pre-revenue, but pre-product. Individual researchers have reportedly been offered nine-figure signing bonuses, and in the past year, the spending commitments made by a single company, OpenAI,

• 1:17:42John Coogan?

  total about 1.4 trillion, a sum equal to 1.2% of global economic output.

• 1:17:48John Coogan?

  A frenzy like that is enough to make you long for the relatively sane and responsible days of the pets.com sock puppet or the synthetic CDO squared. You want to continue reading?

• 1:18:01Jordi Hays?

  Yeah, but bubbles are tricky things. The default school of thought is that they're driven by irresponsible speculators who aren't trying to invest in great companies, but to buy something they can flip to someone more gullible. A more benign theory is that there are wealth transfer from rich investors to everyday consumers, people who bought telecom firms, junk bonds in the late 1990s, lost their shirts, but the rest of us were blessed with bandwidth cheap enough to support the likes of YouTube and Netflix.

• 1:18:26John Coogan?

  This is one of my favorite takes of his is that, is that in the bubbles, like when bubbles pop, rich people actually get hurt more than Main Street, which I think is not how it's framed most of the time. It's because yes, there are some retail traders that go crazy and put, you know, they have a five-figure net worth and they put it all in the most risky NFT and they do lose it. Like there are some anecdotes like that, but in general, most people have a pretty diversified, you know, you know, asset base, whether it's their house or their, you know, their stocks in a retirement fund and those fluctuate a lot less than someone who's in the most risk on positions.

• 1:19:10Jordi Hays?

  Yep.

• 1:19:11John Coogan?

  We're Doglar, the first AI-native dating and vibe coding platform for dogs. We've raised $150 million as part of our seed.

• 1:19:18Jordi Hays?

  As part, as part of our seed.

• 1:19:22John Coogan?

  Doglar is a good name. It's hilarious.

• 1:19:26Jordi Hays?

  There's some truth to this. To this day, America and Britain benefit greatly from rail networks whose construction turned out very badly for the original investors, but there's another way to look at bubbles. The participants in the AI race are all building products that are economic complements to one another. You need the turbines to power the grids, the power the chips, that run the models, the power the products, and you need firms to build their growth and hiring plans around the expectation that ever more of their work will be done by AI, but that every company and every employee will be automating different sets of tasks. If TSMC builds hugely expensive chip factories, but the big AI labs all decide they've spent as much as they need to, those factories are a stranded asset.

• 1:20:08Jordi Hays?

  But when asset prices are loudly signaling that the technology is real and the economics will be compelling, it encourages those complementary investments that actually make it happen. There are countless historical examples of this. The car industry's growth implicitly subsidized oil production and vice versa. Electrification followed a similar path. Appliance manufacturers had to operate on the assumption that utilities would wire up more households and those utilities had to bet that once power was available, G E, R C A, and the like would give people something to plug in. During the heyday of Moore's Law, chip companies raced to build ever more powerful chips and software companies rushed to ship products that would use them. It's hard for any of this to happen without entrepreneurs getting excited about a business

• 1:20:51Jordi Hays?

  based on its hypothetical future rather than its present profits. And it's impossible for this process to keep going unless investors too get excited. Naturally, one side or the other will overshoot. This hasn't been a technological revolution in history. There hasn't been a technological revolution in history that didn't at some point get overhyped. There's always, that's always obvious in retrospect, but less so when we are in the cycle. An investment researcher once circulated in S A called "A Home Without Equity Is Just A Rental With Debt," warning that house price appreciation was driven by loosening underwriting standards and would inevitably lead to collapse, but it was dated June 2001.

• 1:21:28John Coogan?

  Wow, that's crazy.

• 1:21:30Jordi Hays?

  Even at the post-

• 1:21:32John Coogan?

  This call is so early, because it's true. It's seven years too early, or six years too early.

• 1:21:39Jordi Hays?

  Even at the post-crisis low, a decade later, the Case-Shiller Index of American House Prices was still 18% above its level when that piece was published.

• 1:21:47John Coogan?

  Wow. I mean, this is like the Bitcoin bubble stuff. Where it was like, "Yeah, it's going to crash." And it's like, "Yeah, crash from 100 down to 90," or whatever. It's like-

• 1:21:55Jordi Hays?

  Similarly, media coverage of dot-coms described trading as nutty and quoted an investor saying, "I don't really know anything about the company." But that article, The Wall Street Journal's on the Netscape IPO, was published in the summer of 1995. At its post.com low in 2002, the NASDAQ 100 was still 40% higher than it had been then. Signs of a bubble aren't necessarily signs that it's time to sell because they precede the peak of the mania by an unpredictable amount. Anyone who read the quite cogent arguments against buying a house in 2001 or buying tech stocks in 1995 would have benefited financially from completely ignoring them. The famous dictum

• 1:22:36John Coogan?

  Apocryphal

• 1:22:37Jordi Hays?

  Apocryphally attributed to John Keynes is that markets can remain irrational longer than you can remain solvent.

• 1:22:45John Coogan?

  Keynes didn't say that? That's funny. I always thought that.

• 1:22:48Jordi Hays?

  Really?

• 1:22:49John Coogan?

  Yeah, I mean, that's

• 1:22:50Jordi Hays?

  That's like his

• 1:22:51John Coogan?

  Well, no, it's not.

• 1:22:52Jordi Hays?

  No, I know.

• 1:22:52John Coogan?

  Apocryphally attributed to him. We'll have to get to the bottom of that.

• 1:22:56Jordi Hays?

  But this presupposes that everyone has the same information and that irrational traders are simply ignoring it. It's more in the spirit of Keynes to argue that the economic growth is partly a matter of believing that it will happen, recessions, and when people and companies start to spend as if they're over.

• 1:23:10John Coogan?

  Animal spirits.

• 1:23:11Jordi Hays?

  And booms persist when some participants are building the infrastructure that others need to make that boom happen. When OpenAI announces a splashy new scale up or Meta declares that it has found yet another opportunity to raise its planned capital expenditures, they're signaling to AI users, coders, lawyers, writers, whoever, that they'd better be prepared for smarter models. The more people and organizations gear their behavior towards a world in which AI is even more powerful and ubiquitous, the more they're locking in the demand that justifies all of those eye-popping expenditures. In the end, a bubble functions like an industry cluster that exists in time rather than space. If you want to be a movie star, you move to Los Angeles.

• 1:23:49John Coogan?

  Of course.

• 1:23:49Jordi Hays?

  If you want to start a hedge fund, you move to New York. And if you want to be, if you want a part of being first to something in AI, first to build, first to use, first to profit from, asset prices are insisting that now is the time to act.

• 1:24:03John Coogan?

  I love it. Fantastic.

• 1:24:06Jordi Hays?

  Someone in the chat was saying earlier they were expecting Nvidia to beat and then trade down five to 10%, which I feel like is the consensus view now, which means that I think we might see something else.

• 1:24:22John Coogan?

  Something else happen, who knows? It's all been very unpredictable. Well, I'm very excited for Bern to join the show. I'm also excited to tell you about Julius.ai, the AI data analyst that works for you. Join millions who use Julius to connect their data, ask questions and get insights in seconds.

• 1:24:39Jordi Hays?

  It really is like a UAV for your business.

• 1:24:42John Coogan?

  It is, although that's night vision. That's not a UAV sound. Play the UAV. That's the UAV for your business, baby.

• 1:24:53John Coogan?

  Crazy, crazy times in the telehealth world.

• 1:24:55Jordi Hays?

  While I was reading, Ben got me this. What do we got here, Ben?

• 1:25:00John Coogan?

  That's bub talk, baby. Wow, that's actually a lot of bubbles. I like that.

• 1:25:03Jordi Hays?

  Oh, all right.

• 1:25:04John Coogan?

  So.

• 1:25:05Jordi Hays?

  We will be ready to go when Bern joins the show. Hopefully those don't get on the camera.

• 1:25:11John Coogan?

  There is a, there's some pretty crazy news. The founder of an ADHD startup is found guilty of conspiracy in an Adderall case. What a crazy story. Ruthia He.

• 1:25:24Jordi Hays?

  Got to give credit to Will for predicting this like years ago at this point. He was just saying like all this stuff is like seems deeply wrong.

• 1:25:33John Coogan?

  So back in 2021, Will Manitis said on October 3rd, 2021, so four years ago, he said, "Telemedicine psychiatry startups have driven an unprecedented wave of amphetamine abuse." So he was worried, he was sounding the alarm bells four years ago about ADHD medications being overly prescribed, too easy to prescribe. He said, "After tweeting this, an executive at helloahead.com DM'd me from an anonymous account, details of my care history with them, asking that I delete the tweet or caveat that they are not bad. This is an unimaginable violation of patient privacy and an odd threat."

• 1:26:17Jordi Hays?

  Just the worst person to do that.

• 1:26:20John Coogan?

  It's also insane because he didn't specify, he didn't call anyone in particular out, but then he got a threatening message from one person in particular. So that was very rough.

• 1:26:28Jordi Hays?

  Just say you're responsible.

• 1:26:31John Coogan?

  And so Will has followed it up and said, worth remembering that in 2021, 2022, many major healthcare venture investors funded a cabal of internet pill mills that operated with mafia tactics to silence regulators and drive an unprecedented wave of amphetamine dependence in the United States. Well, today, there has been some justice done, I suppose, for these ADHD startups. And so a jury found Ruthia He guilty of conspiring to distribute controlled substances after her startup Dunn Global became a ready source of Adderall prescriptions for more than 100,000 patients. The jury found He and Dunn's former top doctor, David Brody, guilty on two conspiracy counts and four counts of distributing controlled

• 1:27:13John Coogan?

  substances. The former CEO was found guilty of conspiring to obstruct justice. So the company was the subject of a series of articles in the Wall Street Journal from 2022 to 2024. Maybe they got, maybe they were reading Will and I's tweets first.

• 1:27:27Jordi Hays?

  It's interesting that tech and venture basically decided doctors were a bug, not a feature. It's like, yeah, why waste time talking to a doctor just to get the medication that you want and that you know you need? It's like, oh, actually, having somebody that is like, you know, even if it's slower, like having somebody that's there and actually understanding the patient and having like some personal connection with the patient feels very much more and more like a feature.

• 1:27:55John Coogan?

  And also having the economic incentive of the doctor being like, they get paid a lot of money and live a great life just to give great advice and follow the Hippocratic Oath and be like a pinnacle, like a member of their society.

• 1:28:10Jordi Hays?

  Not to increase conversion rate.

• 1:28:12John Coogan?

  Exactly. As opposed to like piecemeal, how many scripts did you write? That's the pill mill model. And so defense lawyers argued that he and, so during a seven week trial, prosecutors argued that he sought to enrich herself by making it easy to get Adderall and other stimulants while the government classifies.

• 1:28:31John Coogan?

  This is a controlled substance with high potential for abuse. The startup collected more than a hundred million dollars in revenue. And, and the defense lawyers argued that they just wanted to make it easier to get the drugs when there was a shortage of providers. Quote, "I think the goal we want to optimize is to help patients manage their ADHD in a convenient way." And there's some good reasons for that. Not everything, sometimes you actually can't get to a doctor. There were good arguments on both sides, but in this case, it does seem like they, they pushed it way too far. There's some crazy, crazy quotes in here. Whoever is the first person to get arrested, "I'll buy you a Tesla," Ruthie told concerned

• 1:29:12John Coogan?

  staffers, saying like, "Don't worry, you know, bend laws."

• 1:29:17Jordi Hays?

  Wait, wait, don't, if you get arrested?

• 1:29:19John Coogan?

  A former company executive.

• 1:29:20Jordi Hays?

  I'll buy you a car?

• 1:29:21John Coogan?

  Testified that the CEO encouraged staff to quote unquote, "bend laws." Okay, I'm encouraging everyone here who works for TVPN, never bend the law at all.

• 1:29:30Jordi Hays?

  Operate within the laws.

• 1:29:31John Coogan?

  Operate within the law.

• 1:29:32Jordi Hays?

  Tyler?

• 1:29:33John Coogan?

  One hundred percent.

• 1:29:34Jordi Hays?

  Looking at you.

• 1:29:35John Coogan?

  Tyler.

• 1:29:35Jordi Hays?

  Operate within the laws of physics.

• 1:29:37John Coogan?

  Yeah, don't bend the laws of physics.

• 1:29:39Jordi Hays?

  You're studying physics, make sure to operate within the laws of physics always.

• 1:29:43John Coogan?

  Yeah, whoever is the first person to get arrested, "I'll buy you a Tesla." That's a crazy thing to say.

• 1:29:49Jordi Hays?

  Was that in writing or was that just like a quote from, from one of the employees?

• 1:29:53John Coogan?

  No, that was the former custom, former executive testified on the stand that this was said by the CEO, which is pretty, pretty crazy. Anyway, fortunately, the bubble in ADHD medication is winding down as the justice is being served. We have Byrne Hobart in the Restream waiting room. Let's bring him in to talk about other bubbles, more positive bubbles, more beneficial bubbles.

• 1:30:20Jordi Hays?

  It is great to have you here.

• 1:30:22John Coogan?

  Great to have you on the show.

• 1:30:23Jordi Hays?

  We brought the bubbles.

• 1:30:25Speaker 05

  Awesome. You brought bubbles. Great to be here.

• 1:30:27John Coogan?

  Bubbles.

• 1:30:28Jordi Hays?

  The bubble king.

• 1:30:29John Coogan?

  It really goes everywhere. For those who don't know you, please, can you kick us off with a little bit of an introduction on yourself? And then thank you so much for taking the time to be here.

• 1:30:37Speaker 05

  Yeah, absolutely. So, hey, everyone. I'm Bern. I am probably best known for writing the newsletter, The Diff, which you can check out at thediff.co, covering topics in tech, finance, everything adjacent to them, everything in between. Also a partner at Anomaly, an early-stage frontier tech venture capital firm. Also co-authored with Anomaly Partner, co-authored the book Boom: Bubbles and the End of stagnation, published late last year by Stripe Press. So, yeah, I'm the Bubble Boy.

• 1:31:05Jordi Hays?

  The Bubble Boy. On a roll.

• 1:31:09John Coogan?

  How can we talk? How should we set the table? Do you want to talk about just, it feels like you've been sort of defined as like pro-bubble. So I feel like asking you the question, are we in a bubble, is a little bit irrelevant. But would you agree that we're in the bubble, in a bubble, maybe at the start of a bubble, maybe at the end of the bubble, but we are, it feels like we're in a bubble, and it's safe to say it now?

• 1:31:30Speaker 05

  Yeah, totally. It's great. Yeah, that is like, that is the curse of co-authoring a book that is trying to rehabilitate the image of bubbles, is that every time the NASDAQ hits a new high, people start calling you and asking you if that's good. And yeah, my obligation here and the model advanced in the book is to say that, yeah, it is pretty good. Like, not to say that stocks will always go up forever, not to say that everybody's options or their weird quasi-equity participation units will all be valued at their present prices. But yeah, so the general argument we advance in the book, I guess you can rewind a little bit and say, you can, you can go through these different ways of talking about

• 1:32:12Speaker 05

  bubbles. One is just say, they're stupid. It's when people are, they just get overexcited about some new technology, or in the case of like housing, they get excited about some very old technology that is newly easy to finance, and they just lose their heads. And by the end, everybody knows they're overpaying. Everybody assumes someone else will overpay more in the future. And just when you run out of stupid people, prices collapse. So that's like the bubbles are really Stupid vein of thought. And then there's one which is a little bit more nuanced, which is, hey, yeah, they're stupid, but they're actually a wealth transfer from hedge fund people, venture capitalists, et cetera, to everyday consumers. So I lived in San Francisco in 2015. I remember I I long for the incredibly cheap, you know, universal basic Uber where every, you know, you could get anywhere for like $8. It was amazing.

• 1:32:56Jordi Hays?

  Gorgeous.

• 1:32:57Speaker 05

  That was, yeah, it was great. It was like, you know, wonderful wealth transfer from the Saudi Arabian Sovereign Wealth Fund to me, and I really appreciate it. Thanks, guys. But but that.

• 1:33:08Jordi Hays?

  Well, it's also notable that they they they've, you know, done fairly well, even though there was like, it was, it was, it was a bubble. It wasn't necessarily sustainable, but it created a enduring business, or at least one out of the, out of the, out of the two.

• 1:33:24Speaker 05

  Yeah, and that's, that's often what we get. Now, Uber's a little bit of an abstract case. What we often get from bubbles is we build too much infrastructure, but that means we have the infrastructure and we have enough infrastructure to build the next thing. And that was the case in the 19th century with railroads. That was the case in the late 90s with telco infrastructure. And, you know, that that could end up being the case today with GPUs, but there is the pro bubble argument, which is that what bubbles really do is they coordinate different market participants, founders, employees, investors, regulators, customers, suppliers. They convince everyone that this is happening. It's happening right now. And that if you build something, if you overbuild for today's demand, you will still have underbuilt for future demand.

• 1:34:05Speaker 05

  And if everybody's doing that at every layer in the supply chain, then you actually do build enough to satisfy future demand. And so like, making it more concrete, if if TSMC does not buy into the idea that AI is a really big deal, they're not going to build enough fabs. Nvidia will not be able to ship enough chips. The next model will not be quite as good, or will have to do more of a trade off between training and inference, and the whole thing slows down. But if everyone is wildly optimistic, then they do build all of that infrastructure, you know, all the way from the power generation to the end use cases. They're building all of that and it all, it's kind of like just in time manufacturing of the future. And the prices, like the crazy prices, they are the signal that this is the time, like it's happening now.

• 1:34:46Speaker 05

  If you build something on the assumption that OpenAI is going to keep shipping better models and that they will need a lot more compute and that will need a lot more power to make those models work. If you operate on that assumption, you're making the right call.

• 1:34:57John Coogan?

  How have you been processing some of Ben Thompson's maybe jitters around the idea that the infrastructure that gets left behind in this particular bubble might not be something that's with us for 100 years? He's been advocating for, hey, let's do energy, let's do nuclear, solar, let's build out a lot of energy. But if we're just like, yes, we way overbuilt like a bunch of H100s and then, you know, years later, we're like, those actually aren't that valuable, they don't, they maybe depreciate over a few years. That's sort of how he's articulated some of the fear of the overbuild not being as durable. Does that resonate with you or how have you been processing that?

• 1:35:38Speaker 05

  Yeah, I think, I think you can look at these different lags and you also look at how generalizable the use cases are for these products. And so it is true that GPUs depreciate, but depreciation, it is this economic concept that's tied, or it's an accounting concept that's tied to an economic concept. And it actually ties in a couple of different things, one of which is just if you use a machine, there is friction, it can break, it can overheat, whatever, and so eventually it's trash. And then the other piece, more on the economic side and much more relevant to GPUs, is if the GPU is producing fewer tokens per watt and that just relative to newer ones, it can be economically worthless even though it can still actually do something useful. And so if the GPU build out slows down, that actually decelerates the depreciation for

• 1:36:23Speaker 05

  all of the world's existing GPU fleet. And power is harder to slow down, the, just the lags are a lot longer. It takes a long, long time to build a new power plant and to build all the equipment that goes into it. So you could have this case where bubble pops, OpenAI has to do some weird recap at a much lower valuation, NASDAQ's down by half, or probably not down by half, but down by a lot. And, you know, a lot of, a lot of people who felt very smart as of like a month ago looked pretty stupid, myself included. And, you know, we could have that, but. There will still be this increase in power generation capacity because that stuff is locked in. And the like the gas turbine companies, they they can really lock their customers in because there are just not that many places you can go to buy one.

• 1:37:06Speaker 05

  And so if you're going to buy one and they say, okay, but you have to actually guarantee that you'll pay for it, even if you really regret this. That's pretty much what you'll have to do. So you could have this case where what actually happens in the aftermath is power costs decline. And so these GPUs actually become higher margin when they're doing inference. And so you get really, really cheap abundant intelligence at today's model capabilities. And that that is still.

• 1:37:29Jordi Hays?

  Yeah, the GPU is fully depreciated and power costs have come down, which would make them, you know, the the concern around appreciation is you just get a chip that is so much better, that is just non economical to to run one of these old GPUs. But there the scenario that you're pointing out, you could they could potentially be valuable for for much, much longer.

• 1:37:52Speaker 05

  Yeah, so if you look at a company like CoreWeave, where their business model is, we stack a bunch of GPUs in a data center. We lease them out to various people on varying terms. That is actually kind of a bet on this narrow slice where AI is not a complete flop. We don't find out that it was actually just Sam Altman typing those answers really fast all along. But it's also, you know, doesn't completely revolutionize things because that like if there's another generation or two of GPUs or if TPUs take more share of inference, then maybe those GPUs end up being economically stranded. But if there's a world where we're not building many more GPUs, but we are using, we do find all the use cases for the ones we have. That might be a world where actually CoreWeave is, you know, reporting pretty nice GAAP profits and and their investors are happy.

• 1:38:35Speaker 05

  And when you look at CoreWeave, one of the interesting things about them is on their cap table. So they, one of their big backers is this hedge fund, Magitar, which does incredible, has done incredible things with structuring various bets. Like if you control F in their their prospectus, Magitar is actually mentioned more often than Nvidia. And Magatour likes to make interesting bets on like the relative volatility of different things, or the time, relative timing of things. And so you could see this as them making this kind of esoteric bet that AI is actually both a really big deal and somewhat overhyped. That's always, always hard to, you know, read into, like what you're reading into is Magatour is involved in this. They have done a bunch of really interesting deals throughout the core reef cap structure. But it is, it is still striking that they are very sophisticated about this exact kind of trade.

• 1:39:21John Coogan?

  That's interesting.

• 1:39:22Jordi Hays?

  What is, like, what is the right way to view a bubble? Is it this monolithic structure in which they're, or are you viewing it as like, because in my view, it's like, we just read your article, or essay in The Economist, right before you

• 1:39:37John Coogan?

  Congratulations, by the way.

• 1:39:38Jordi Hays?

  It's great, great kind of summary of everything. But

• 1:39:41John Coogan?

  High, high honor to be in

• 1:39:42Jordi Hays?

  But you're, you're saying like, there's pieces of a bubble that are feeding into each other and making the possibility for durable value creation to be higher and higher because you have all these parts combining. I feel like another view maybe is similar, but slightly different is like you have these rolling bubbles that are all kind of like building up. And right, right now, there's like, we have a private credit bubble, maybe there's a NeoCloud bubble, maybe there's an LLM bubble, right? Like, do we, it's unclear if we need, you know, the 50th closed source LLM, right? I don't know. Maybe we do, right? It's, it's hard to predict. But what, what is like the right kind of like way to even just visualize the bubble, the AI bubble broadly?

• 1:40:25Speaker 05

  So, like a lot of other bubbles, it starts out as this really differentiated, unique thing, where most people do not know, you know, like, five years ago, most people did not know or care that much about AI. It was kind of this thing where you would listen to the quarterly call from Google, or from the company then known as Facebook, and they would talk about how they're an AI company. And you'd think, okay, like, I'm glad you have your science project nerds, but I really care about more ad clicks and more dollars per ad click. So, good luck with whatever, whatever robot experiments you're doing. And then, when it starts growing, what it starts doing is actually connecting with the rest of the economy. So now like the marginal dollar of AI capex is increasingly going into general purpose

• 1:41:07Speaker 05

  power generation infrastructure. So and meanwhile, AI is getting much more broadly distributed like initial initial use cases were, one, it was a really good autocomplete for coding and two, if you needed to create original content in order to spam people, or if you were replacing like the lowest value bloggers, you could do it and it was cheaper. But then it became this thing where it's like a lot of, there are just a lot of things where you wish you could apply a little intelligence to it. It's really not worth your time, but if you can get the right answer easily, then you should do it. And just like a lot of, a lot of cases where you'd want to like, I use it a lot when I'm writing as a research tool where it's like, I want examples of this phenomenon, or

• 1:41:47Jordi Hays?

  It's a research tool, not a writing tool.

• 1:41:49John Coogan?

  Yeah.

• 1:41:50Speaker 05

  Right.

• 1:41:51John Coogan?

  Are you even using it as a first draft? Or is it more like you have a bunch of facts here? And then you are actually typing out the sentences that you

• 1:41:58Jordi Hays?

  We're like bloodhounds for AI content and we did not, and no, no alarm bells went off when we were reading.

• 1:42:04John Coogan?

  Oh, yeah. The Economist article is like

• 1:42:06Jordi Hays?

  I've just been, I've been surprised.

• 1:42:07John Coogan?

  The most clearly human written

• 1:42:09Jordi Hays?

  It's so, it's extremely notable that like using AI for writing has become the most low status thing that you can do on the internet.

• 1:42:17John Coogan?

  It's like, it just feels like disrespectful.

• 1:42:19Jordi Hays?

  It is lower status than making just like sloppy memes. Like

• 1:42:24John Coogan?

  There are lower status things you could do.

• 1:42:27Jordi Hays?

  Yeah, okay. Adult content, adult content.

• 1:42:31John Coogan?

  Use my coupon code to sign up for prize picks.

• 1:42:35John Coogan?

  Here's my parlay. Who's riding with me?

• 1:42:37Jordi Hays?

  But still, it just communicates, it, it, it, you know, people feel disrespected by it because it's like, hey, you put this out, you wanted me to read this. And if it's completely obvious that, that a computer generated it, it's like, well, was this even worth my time? Right? Like if you couldn't have said it in your own words.

• 1:42:56Speaker 05

  So there is this dynamic where they're just sometimes when there's increasing efficiency with something, we find out that some of the effort was load-bearing, and that doesn't mean the technology is bad. It means we do have to adapt. And so in the case of writing, one of the things that used to be the social norm was if you can produce a grammatically correct lengthy document about some topic, that is an indication that you probably know what you're talking about. And to get into a position where you can do that, you have to read a lot. So you acquire knowledge. And if you want to write something persuasive, you probably have to talk to a lot of people and find out what's persuasive to them, what's persuasive to you, et cetera. And if you can just ask a model to admit that, then you can basically write at a level that is much higher quality than your ability to think. You can write well beyond your wisdom.

• 1:43:39Speaker 05

  It's kind of like when people use some peptides and steroids, they end up getting weird injuries because they're just like mechanically, their body is not actually suited to lift the weights that their muscles can move. So they do get serious injuries unless they train pretty rigorously. So I have a nine-year-old who has in the past used ChatGPT to write emails to me explaining her side of a fight that she had with one of her siblings. And the email is very clear, very articulate, lots of M dashes, lots of it's not X, it's Y. And it's, you know, that I think if someone that age sat down and write this coherent letter explaining their side of an argument, that would actually be impressive. Like you'd say, okay, this person's actually thinking seriously about what happened. But in this case, it's like she can write two sentences in ChatGPT

• 1:44:23Speaker 05

  and, you know, answer some follow-up questions from it and then produce this nice coherent-looking document.

• 1:44:28Jordi Hays?

  So. Do you, how much do you worry, how much do you worry about a new, we have kids younger than that, but how much, how much do you worry about potentially a generation of young people never, like, you know, maybe in a classroom setting, teachers can be like, put your phones in this box and you guys are all going to write a paper on this. And it's possible that writing will become like highly supervised because the only way to prevent somebody from just generating the written word.

• 1:44:55John Coogan?

  It literally already is at many schools, but.

• 1:44:57Jordi Hays?

  Yeah, yeah, yeah, yes. But, but, but even, even then, it's like when I think about.

• 1:45:03Jordi Hays?

  Growing up and being forced to think deeply about topics. Oftentimes, it was because I was assigned to write an essay on something and I didn't have the world's best autocomplete tool. And I just had to sit there and wrestle with an idea and actually learn about it. And I had to read a book or read a bunch of essays and really put it together. And I think it's possible that just a lot of time spent deeply thinking is just fully lost forever.

• 1:45:28Speaker 05

  Yeah, I think it comes back to that load-bearing effort question. So I do tell my kids that there is just a qualitative difference. And also that when they get an assignment at school, it's not because the teacher has this burning desire to read an essay about, you know, whatever, about Charlotte's Web or something. It's not like the teacher is absolutely, you know, they have been pining for this. It's like, the point is the effort and the point is the way that you think about things. And that writing is actually just a very useful way to think something through. I don't really understand why that is. Like, I don't know why it is that if you just try to talk to yourself for 20 minutes straight about a topic, you won't get to the same level of clarity that you do if you type it out, even though the typing it out process is just really similar.

• 1:46:13Speaker 05

  It is one word after another and then a little bit of editing sometimes. So I think some of what the education system has to do, which different schools do to different degrees, is actually explain to kids what the purpose of what they're doing is, so they understand what that purpose is. And then, we also do have to make this adjustment of, sometimes there are things that it is, it used to be necessary for basically every adult to be able to do, no longer as necessary, and fewer people will be able to do it. And maybe the ones who do it will still take a lot of pride in their craft, but they won't strictly have to. So I think of it as like, I don't know, things like manual labor and, I don't know, wilderness survival skills, things like that.

• 1:46:55Speaker 05

  There was a time when being physically strong and knowing how to, like, being able to navigate in space and figure out which way is north if you're lost, was actually a pretty important skill that a lot of people had to have.

• 1:47:06Jordi Hays?

  You'd probably be mocked. You'd be mocked if you could.

• 1:47:09Speaker 05

  Right, right. And so then you go through this generation where there is a lot of mocking, there is a lot of bullying, but the nerds are actually probably right that this thing is not so important. And then the next generation is only the hobbyists who do this. Thomas Sowell had this argument about, I think it's in his book on knowledge and decisions, where he's talking about how if you live in a really, if you live in a subsistence level tribe somewhere, you actually have to have this incredible breadth of knowledge. Like, you've got to know all landmarks, how to get from one place to another, all the signs of danger, everything you can eat, everything you shouldn't eat, and, you know, which local tribes are friendly, which ones aren't. And you just don't need nearly that level of knowledge to survive in a modern city today. There are all kinds of things

• 1:47:51Speaker 05

  about where your food comes from, and what is safe to do and not to do, that you simply don't have to know, because you're not exposed to any of the risks. And so, we actually have just a much lower knowledge requirement in more advanced societies. On the other hand, we have much higher returns from having that, having unique kinds of knowledge, because now that whatever value you can create can be amortized over a much larger number of people, and there's just more stuff to go around. So, the rewards from being really, really smart are a lot higher. And, you know, I hope that when I talk to my kids about this stuff, and I basically say, like, there's going to be a cognitive overclass and a cognitive underclass, you can opt into one of them, and it's super easy. You tell your kids that, that's amazing.

• 1:48:32Jordi Hays?

  You must escape the cognitive underclass.

• 1:48:34Speaker 05

  I don't phrase it quite that way. It is true, like, it is so easy to go through life without thinking, and it will only get easier. And so, you have to decide, knowing that the thinking part is increasingly optional in a larger and larger number of domains, do you want to be the kind of person who thinks because you like thinking, and you like creating and discovering new things, or do you want to be the kind of person who has just a much easier, more relaxing time, because they don't?

• 1:49:00Jordi Hays?

  Very, there's, we could continue on this conversation for a long time, but I wanted to ask you about what scares you about this current bubble? Like, things that are not necessarily, like, bad today, but could get bad. To me, like, tech, you know, indulging in, in, in leverage for the first time, maybe as an industry, or as like, a lot of the leadership has not, they weren't, they weren't participating in the telecom bubble, they didn't get blown up, maybe they've never gotten blown up by leverage, and maybe that's a concern, but I'm curious how you think about it.

• 1:49:38Speaker 05

  Yeah, I'm, I'm less concerned about that. I, I think the current generation of tech leaders, there's a lot more tech history that they can know about, and they just seem more interested in tech history. You can actually go back and see that the people who were more obsessed with tech history tended to do better. Like, Steve Jobs was obsessed with the story of Polaroid. It's this beautiful consumer device, changes everybody's behavior, really simple tool, you look at it, you know exactly how to use it, you know what it does, and it does what it's, what it looks like it's supposed to do. Jeff Bezos gave a TED Talk when that was a much cooler thing to do. I think right after the dot com bubble had rolled over, where he's talking about the early days of electrification, and how the internet is like that, partly in the sense that we did not know how to use it, we didn't know all the applications.

• 1:50:23Speaker 05

  And he, I think he, he said, I think that's where I, I heard that the original appliances, like, if you bought an iron, originally it would actually plug into a light socket. Like, you'd unscrew a light bulb, screw in the iron, and then iron your clothes in the dark, and then screw in the light bulb again. Or, I guess you'd iron your clothes during the day. But, anyway, like, we, it was very janky, and so you could have looked at it at that time and said, like, this is just a clown show. Like, okay, sure, electric lighting, I get it, but what are you doing with all these other weird gadgets? And who needs that? Like, we already had irons, they were fine. So, I, I, I think that a lot of tech people are actually pretty keenly aware of history. And a lot of them are just, they're, they're way more obsessed than you would think with the prospect of their company becoming irrelevant in six months and a total failure in two years.

• 1:51:08Speaker 05

  So, I think we're, you know, it is riskier to borrow than not to borrow, but we're probably safe on that front. I think one thing that could go wrong is some combination of... Corporate behavioral norms and regulatory norms and investor assumptions where we decide that this stuff is really dangerous, we should not touch it, it will blow a giant hole in somebody's balance sheet because we know it happened and it will happen again and it just becomes untouchable for a while, which did kind of happen in the dot com space. And I think people underestimate that when they look at things like Mark Zuckerberg starting a social network in 2004, is that that was, you could have looked at that as really, like now it looks really forward thinking. At the time, it kind of looked dated. It

• 1:51:48Speaker 05

  kind of, like the example I use is like if you, if in 1999, you moved to Seattle to start a grunge band, like you missed it. You were, you were way out of date and that's what it looks like. So it was still a kind of contrarian thing to do and it was still a company that was started in the aftermath of this dot com bust when people were cautious. So, but with AI, the capital requirements are so high that it is actually a really big deal. If investors decide that the space is uninvestable, progress actually stops. Whereas you just don't need a lot of capital if you're in your dorm room on your laptop just slinging PHP.

• 1:52:25John Coogan?

  Yeah, or you can at least monetize much, much earlier and you see that with like the Google earnings, like pre-IPO is like massively profitable business, undeniable, didn't need any permission. What do you think about sovereign AI international, how bubbles spread internationally? I was listening to Tyler Cowen talk about one of the weird side effects of tariffs is that other countries might copy America's tariffs just for sort of memetic reasons and America might be in such a powerful position that tariffs might not actually wind up hurting America because of its position in the global economy. But if another country says, oh, let's copy that, they might be hurt more. I'm wondering about

• 1:53:07John Coogan?

  how bubbles propagate. At the same time, a lot of the telecom magnates in foreign countries that just kind of copied our telecom build out, well, they're the richest people in those company, in those countries now. So how are you thinking about like the bubble spreading internationally?

• 1:53:23Speaker 05

  Like, I think it is a, it is a really cool toy for PetroStates. It's definitely actually done some really impressive work. So, um, you know, I, I don't really begrudge them that. I'm not sure how many, how many general purpose models the world needs. I suspect what the world needs is lots and lots of special purpose models. And that could be the level of, okay, this model just knows Rust, but it is insanely good at Rust and it has not polluted its mind with any bad habits from C or C++ or anything else. It's just pure Rust. And then you could also have even more narrowly scoped models where it's like, this model is this one person and it will give you the best approximation it can of what this one person does. And if you have a lot of different models and you, and people who interact with models interact through a router where the first thing the router does is figure out which

• 1:54:07Speaker 05

  sub-model to send things to, and it can do many iterations of that. And eventually might be sending some things to, you know, maybe delegating some things to an agent that ends up talking to an agent at some third-party service. So like, I'm thinking of things like, if you are planning, I mean, everyone says if you're planning a trip, let's say you're planning a really complicated tax-sensitive global M and A transaction. So maybe you need like the French tax law bot to interact with the US tax law bot. And they both need to make sure that the economics of your weird tax thing also makes sense. In that world, you could actually have this great diversity of models with a great diversity of model use cases. But for the general purpose stuff, like, I don't, I don't think there is, I, I think

• 1:54:50Speaker 05

  that there is enough room for customization at the user level that we probably don't need 50 different models that are close to the frontier.

• 1:54:58John Coogan?

  Yeah.

• 1:54:58Jordi Hays?

  What are your labor displacement timelines? Because every CEO over the last year has, has used AI as the reason behind layoffs. And I think everyone has been calling BS on a lot of that. It's just like, they need a good reason to do a round of layoffs for other, more real reasons. And everyone, I think, has seen the chart by now of, of, of job openings versus, uh, you know, when ChatGPT was released. And at the same time, you know, if you've used these tools, uh, you know, you're not a, a lot of people-

• 1:55:35John Coogan?

  It doesn't feel like a drop in replacements for-

• 1:55:36Jordi Hays?

  Yeah. Meanwhile, you have engineers, like, you know, LMs are incredible at coding and you have engineer, if you're a talented engineer, or even a high-agency engineer, you probably have more opportunity than ever. And, but I'm, so I'm curious about, uh, how you're thinking about timelines.

• 1:55:52Speaker 05

  Yeah, like this stuff takes a surprisingly long time to deploy because one of the load-bearing inefficiencies is that if something required intelligence, there's a single, there's at least one human being whose judgment is implicitly tied to the output of that product. And it's really hard to go from there is some specific person to blame, like if a mistake was made, someone made it, to if you scale up your work by, you know, 100x and now 95% of the time you do just fine and 5% of the time you mess up. Is that your fault? Is that Claude's fault? We don't want to blame Claude. Claude's so nice to us. We don't know. So like, we actually have to rethink how people get judged. There's this sense in which everyone becomes a kind of engineering manager who, like everyone in software becomes this engineering manager,

• 1:56:37Speaker 05

  who is describing what needs to get done and vetting what has been done, but is writing less code themselves. On the other hand, LLMs are actually pretty good at doing the opposite, where you are the junior coder. You are doing the grunt work and what it's doing is looking at your overall architecture and telling you what things you missed and what design mistakes you have made that are just a lot easier to fix upfront. But like a lot of organizations, they, they don't want, they, they don't want the risk of their workers are massively more productive, but they're also producing some mistaken things and that's actually going to be a big hit to the company's reputation. So you'll, you'll probably see, what I think you'll see is that a lot of AI deployment is that there will be a legacy version of something.

• 1:57:19Speaker 05

  There will be an AI native version of that thing. The AI native version will sell to smaller customers. Those customers will grow faster than the legacy companies and then the AI native product gets sold to all the legacy companies. So this is kind of the strike model where they started out doing payments for early-stage companies that had pretty simple requirements and had some tolerance for error. And then they, as long as they stay good enough to maintain whatever their biggest customer is, they are necessarily building out the feature set for other companies the size of that biggest customer. So you get some deployment that way, but it has this, it, it actually takes a while because the big companies, they just, they want to be somewhat cautious on this. And you sometimes have this case where there's a top-down mandate at a big company saying, everybody's got to use AI.

• 1:58:01Speaker 05

  And there's also this bottom-up insurgency of, I can use AI and it makes my job more effective.

• 1:58:07Jordi Hays?

  Well, also, there's going to be a dynamic, there's a dynamic too where... We will see scenarios where employees say, well, I don't want to adopt this AI. This one's a little too good. I'd be worried about losing my job, right? And so I think we're going to see like more friction between even with tools that actually can replace labor, like truly not just being like a co-pilot and the friction to adoption because the people that would be adopting them and that's probably, you know, years out. Certain investors have been underwriting early-stage private market bets to, they're saying like labor is the TAM. Like, how do you view that framework? Is that like, it feels overly simplistic to just say like any dollar that is spent,

• 1:58:50Jordi Hays?

  you know, that goes out through any type of payroll system today is up for grabs. But there seems to be some, some element of truth to it.

• 1:58:58Speaker 05

  Yeah, there's a little truth to that, but I think it's in the same way that Netflix says that time is the TAM and their biggest competitor is sleep. Like, it is, it is broadly true.

• 1:59:08Jordi Hays?

  It's marketing.

• 1:59:09Speaker 05

  That, yeah, like it is marketing, but it's also a way to frame the scope of the opportunities. So what I would say is that when the labor in question is mostly delivering value by producing a sequence of tokens, whether that is writing a document or building an Excel model or writing some code, that that is the addressable market for an AI tool. But the real world just has enough complexity that models have to develop a really good world model. And what we can think of it is in software, they have a really good world model because that is their world. Like their world is this abstract world that is defined by whoever wrote the compiler. And to a lesser extent, that world has some complexities if you're actually working with real-world physical systems where someone can trip over a cord and unplug one of the

• 1:59:51Speaker 05

  servers in your distributed system and that is just not contemplated in the purely software world model. But as soon as you move out of pure software that is running on one machine for one user, you start to get some real-world complexity. And then when you're trying to automate something like building up a financial model, you need pretty tight feedback between what assumption works in the real world, what actually maps economic realities, and then what assumption is the, the most probable token in this cell that needs a token. And I think that will, like, as AI gets deployed in messier parts of the world, what you'll actually see is that more of the world will get structured in an AI-friendly way. And that more, more of GDP will be in that world that is already prestructured for AI.

• 2:00:36Speaker 05

  But then you still have the rest of the real world where it's just really hard to get eagle onboarded. And you can actually see that with things like when, when the company then noticed Facebook was growing internationally. One of the obstacles they ran into was in many places, almost nobody has a computer. So that's one of the reasons that they went into mobile early, but they also realized they could market themselves through internet cafes. And that apparently for a while in the developing world, if you went to any internet cafe, half of the unused computers would have the Facebook log out screen. And that was actually a huge source of user acquisition for them in developed, in developing markets. And then once smartphones came out, those people migrated onto smartphones. And then Meta was able to keep them and continue to sell them ads.

• 2:01:18Jordi Hays?

  Somebody would be on Facebook, they would use a computer in an internet cafe, they would get up and leave. And then somebody would sit down and they'd be like, what is, what is Facebook? And then they would just create.

• 2:01:26Speaker 05

  Exactly. Yes, there's, there's a great story in Chaos Monkeys about this and about how they wanted to have an ad on the log out page. Cause they were like, this is otherwise just wasted real estate. And it turned out the log out page is this mission critical thing in all the, in many of the non-US markets. So there was a big internal fight on that.

• 2:01:42Jordi Hays?

  Interesting.

• 2:01:43Speaker 05

  And they did end up doing ads on the log out page only in developed markets where growth had slowed down enough. And they were already a dominant market share. But like they, they needed the outside infrastructure to catch up with the product. And once it did, the product was already there, kind of waiting for that infrastructure and saturated it really quickly. But this, this is another thing that happens with bubbles in general, technology bubbles in general. It's like you, you don't consider the podcast an electricity company. Like you don't think of yourselves as that business, but the business doesn't really function. If you can't plug something into an outlet or use a battery and actually get power from it.

• 2:02:15John Coogan?

  Nothing can stop us from podcasting, let's be clear.

• 2:02:18Speaker 05

  Okay, you can yell, yes.

• 2:02:19Jordi Hays?

  Do without microphones, without cameras.

• 2:02:21John Coogan?

  We will just find a crowd of people and scream at them.

• 2:02:23Jordi Hays?

  Megaphone on the rooftops.

• 2:02:26Speaker 05

  But like, so in one sense, the 1920s bulls who were like, I'm all in on electricity. This is the future. They were absolutely right. But if you transport a trader, a stock trader from 1925 to 2025, and you're like, okay, go buy all the electricity stocks. It's like, well, that's everything. Like, every company uses this. So there is no real way to make a direct bet on it. And to the extent that there is, the direct bet is now a totally different bet. Now, actually, that that particular time traveler, if if he arrives in in 2023 instead of 2025, actually, his his 1925 thesis of just buy levered power generating companies and put all your money to that. It's actually brilliant. So these things, you know, the cycle does repeat itself a little bit. But they, as it as it disperses, you've got a little bit of AI and everything. And it's, you know, internet is the same way.

• 2:03:11Speaker 05

  Like, you don't consider Target an internet retailer. They do a lot of e-comm. All the physical, basically, all the physical retailers do a lot of online sales. The the fast food restaurants do a lot of their sales through apps and through kiosks. So there is just this convergence where by the time the bet is such a big scary bet that you're like, the whole economy is dependent on this. You're also like, well, it's just mixed in with the whole economy. Like, you can't actually take the AI part out of the US economy and the US growth story without completely breaking things. And at that point, it kind of converges. It settles.

• 2:03:43Jordi Hays?

  Yeah, makes a lot of sense. I have one more question that is probably worthy of like a 10 minute answer. But we'll see, we only have a few minutes. Okay. How how is it the CEO's job to disconnect the stock price from reality?

• 2:04:02Speaker 05

  Well, it's partly the market's job to tell employees where their equity, where they should go if they want to max out the value of their equity comp. And this is something that I I used to not really believe. And what happened with Meta in 2022 kind of converted me to this view, where Mark Zuckerberg did not actually have to care that his stock was under $100 a share. Like, he, it's not like the board is going to vote him out. Even if even if he didn't have voting control, they're just not going to kick him out. But it did mean that it was harder to recruit people. And so if your dream is we're all going to live in the metaverse, we're going to have this legless utopia. You can only hire the people who make that possible if they think your stock is going to go up. Otherwise, you have to pay them entirely in cash and then your stock goes down even more and suddenly you're in this position of making really hard decisions

• 2:04:45Speaker 05

  that you don't want to make. So sometimes you, yeah, you take a foot off the gas pedal in terms of massive capex for something investors were skeptical of. And as long as you're still in the lead, and this is what like investors would send like hedge fund people, there was a great hedge fund letter, there was a plaintiff, it was like, Mark, even if you cut your metaverse spending in half, you'd still be spending the majority of the world's metaverse money. Like, you're still a winner, you're still, you still get the trophy, but please just give us some free cash flow, buy back some stock, it's cheap.

• 2:05:13Jordi Hays?

  Yeah, it feels like such like disconnecting your stock price from reality, at least to the positive, can be like a massive advantage and you can see different like, like Palantir is like a good example of this, or Tesla is a good example of this. And if you can keep it going, it's like tremendously effective because investors want to be in companies where the stock price is not necessarily always going to be tied to fundamentals and even employees can benefit. And maybe like the opposite side of that is like, is like Dylan Field with Figma. Like, I feel like he just wants, he wants to be valued like, like fairly and like accurately and just wants to make the business better and better and better every day. But of course, it's a double edged sword and it's great when

• 2:05:57Jordi Hays?

  it's disconnected to the higher end. But anyways, this was super fun. Thank you. Thank you so much for joining. I would love to have you back on again soon.

• 2:06:05John Coogan?

  Let's do it again soon.

• 2:06:06Speaker 05

  Absolutely.

• 2:06:07John Coogan?

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

• 2:06:10Speaker 05

  Well, do.

• 2:06:11John Coogan?

  Before we hop on with our next guest, let me tell you about Privy. Privy makes it easy to build on crypto rails, securely spin up white label wallets, sign transactions, and integrate on training infrastructure all through one simple API. Our next guest is Glenn Hutchins. He is the co-founder of Silver Lake Partners.

• 2:06:27Jordi Hays?

  A legend.

• 2:06:28John Coogan?

  And the chairman of North Island, North Island Ventures. I believe he's in the restroom waiting room. We will bring him in the TVP N Ultra Dome. We were keeping him waiting just a few minutes.

• 2:06:37Jordi Hays?

  We'll keep the bub talk going. How are we doing?

• 2:06:40John Coogan?

  If he is on the line. Glenn, good to see you. Sorry for keeping you waiting. Welcome to the show. How are you doing?

• 2:06:50Jordi Hays?

  We don't have audio.

• 2:06:52John Coogan?

  Can we check?

• 2:06:53Jordi Hays?

  How we doing, team?

• 2:06:54John Coogan?

  The mute button, check on that and see if we are getting audio through the, um, the call. I will give some more context. Uh, he is the, uh, chairman of North Island, North Island Ventures, the co-founder of Silverlake, the vice chairman, lead independent director of Santander.

• 2:07:12Jordi Hays?

  There we go.

• 2:07:13John Coogan?

  He's also the lead independent director of CoreWeave. And he's here on the show.

• 2:07:15Jordi Hays?

  Welcome.

• 2:07:16John Coogan?

  Welcome to the show. Thank you so much for taking the time.

• 2:07:18Speaker 04

  Hey, I just want to say I'm a big fan of your show.

• 2:07:20John Coogan?

  Oh, that's amazing.

• 2:07:21Speaker 04

  Uh, so it's, uh, so much fun to be here. Really a real pleasure to meet you guys, uh, almost in person.

• 2:07:26John Coogan?

  Yeah. Yeah. Well, next time you're in Los Angeles, please, uh, feel free to stop by the, uh, TVP Ultra Dome here in Los Angeles.

• 2:07:33Jordi Hays?

  We are so excited to have you on. So much, so much to talk about.

• 2:07:37John Coogan?

  Yeah. Why don't we, uh, start with, uh, just a little bit of your career arc? I know we're going to want to talk about the, the dot com bubble, the dot com boom, your experience there, but walk me through, uh, your career up to co-founding Silverlake in, I believe it was 1999, right?

• 2:07:52Speaker 04

  That's right. Um, just really briefly.

• 2:07:57John Coogan?

  Please.

• 2:07:57Speaker 04

  Basically what I got by Silverlake was my third and now I'm on my fourth essentially startup.

• 2:08:03John Coogan?

  Yeah.

• 2:08:03Speaker 04

  In and around investing largely called private equity. The first one, I was a junior partner to a guy by the name of Tom Lee founding what people look back on now and say is one of the first private equity firms. Uh, then I, um, uh, took some time off, worked in the White House for Bill Clinton. Uh, and then was recruited to come to a young little firm called Blackstone.

• 2:08:24Jordi Hays?

  There, there we go.

• 2:08:25Speaker 04

  Uh, that was getting into the private equity business and wanted to build a private equity platform. Um, about five years later, the Blackstone guys helped me start, uh, Silverlake, which was the, they invested in it, uh, which was the first large scale organization to combine private equity type of investing with technology. Uh, and now I'm on my fourth, which is my platform called North Island, uh, which, um, has one very difficult limited partner, which is me.

• 2:08:53Jordi Hays?

  The best guy.

• 2:08:57Speaker 04

  And, um, and we're doing, and I'm doing, so it's my fourth startup in investing.

• 2:09:01John Coogan?

  Yeah.

• 2:09:01Speaker 04

  Uh, and you know, the, maybe we can get into this a little bit later, but you know, Uh, the origins of private equity might be something worth talking about at some point if you'd like, but we'll come back to that. What's your next question?

• 2:09:12Jordi Hays?

  No, let's start, let's start there. I'd love, I'd love your view on it. Uh, and, and it really is, uh, quite, quite funny to think that you couldn't have maybe picked better stepping stones, uh, across the whole, across the whole journey. Must have been, you must have had some good intuition.

• 2:09:27Speaker 04

  Yeah. You know, it's better to be lucky than smart. Um, but, um, so, you know, the one thing I would say is, can I, can I get a little geeky for you guys, with you guys for a moment?

• 2:09:38Jordi Hays?

  Um.

• 2:09:39Speaker 04

  Uh, we can come back to the more personal dimension, but there were four or five in real advances in largely quantitative approach to finance that enabled the creation of kind of what I've done over the years. Um, especially in the early eighties when we started thinking about private equity. And the first was the capital asset pricing model, which allowed us to really do very good in-depth evaluation of equities, which has not been done before. The second was, uh, was Black Scholes Option, uh, pricing model, which allowed us to value options and really understand what embedded options, how to value embedded options inside of equity securities. Oftentimes when you bought a private equity company, you paid for the company and then you identified something inside the company that had a real upside

• 2:10:23Speaker 04

  and how to value that and how to pay for that was the question. Second, or maybe third was understanding fixed income. A fellow named Marty Leibowitz came up with something called Inside the Yield Curve, which let us really value, um, fixed income. And then Mike Milken really understood, did really good work on understanding the risk reward associated with high-yield securities, which became a tool that we were able to use to, to build these companies. Michael Porter at Harvard Business School did a bunch of research using, uh, standard economic analysis, um, uh, about the five forces that you could use to extract value from companies, which wasn't being done in a very systematic way in those days. And then finally, modern portfolio theory, where sharp ratios and efficient

• 2:11:07Speaker 04

  frontiers were adopted by places like Harvard and Yale. Uh, and a key part of that was having, um, an allocation of private equity and as that model. Was rolled out across first pension funds and then sovereign wealth funds, a huge amount of money flowed behind us.

• 2:11:22John Coogan?

  That makes a ton of sense.

• 2:11:22Speaker 04

  We figured out how to value companies, we figured out how to use debt, we figured out how to extract value from the companies. And then we had a big flow of money coming into back us doing it.

• 2:11:32John Coogan?

  Fascinating.

• 2:11:32Speaker 04

  So that was, that's a kind of one way to think about what happened over the last forty years.

• 2:11:37Jordi Hays?

  How, how, how quickly did those ideas and methods actually disperse? And tying that to the present, it feels like, you know, with AI labs today, there'll be like some sort of innovation

• 2:11:49Speaker 04

  Really good question.

• 2:11:50Jordi Hays?

  That gets discovered and then one of those people gets immediately poached to another lab and suddenly then another lab is, you know, developing the same type of system or approach.

• 2:12:00Speaker 04

  That's a really good question. Now someone quote, you could look it up. Someone quoted, I read a quote recently, said, "The future is already here, it's just not evenly distributed."

• 2:12:08Speaker 04

  And so, you know, innovators try to, I've always tried to find the next way to be successful in investing and stay ahead of what people do.

• 2:12:18Speaker 04

  Who copy me. One of the things I say is that my very, my, my best ideas are ones that people dislike. And my very best ideas are ones they hate intensely.

• 2:12:30Speaker 04

  Cause I know if someone really hates something, I'm thinking about it and I know it's like, could be really good. And then by, cause by the time it turns out to be generally accepted, that's when I sell what I bought before to them.

• 2:12:42Speaker 04

  If you know what I mean.

• 2:12:43Jordi Hays?

  Yeah. So you're basically like if they, if they, if they think an idea is dumb or silly, that gives you a window of opportunity to.

• 2:12:50Speaker 04

  It's a signal. It's gonna be good.

• 2:12:51Jordi Hays?

  Yeah. Well, and it gives you a window to like, you know, get as much value out of that idea before it becomes common knowledge or an accepted approach.

• 2:13:00Speaker 04

  Occupy that territory before they get there. When they come there, then you sell to them the beachfront property that you've already purchased. That's right. Uh, uh, and then, but to go back to it, uh, the half-life of innovation on Wall Street, AI is a little bit different. But the half-life of innovation on Wall Street is the time it takes someone to read a prospectus. And then copy what you did. And so like, you know, someone does a SPAC and everybody does SPACs.

• 2:13:23John Coogan?

  Yep.

• 2:13:24Speaker 04

  Someone does a digital asset treasury thing and everybody wants to do a DAT. You know what I mean?

• 2:13:28John Coogan?

  Yep.

• 2:13:28Speaker 04

  Um, it's like on, uh, in, uh, on Park Avenue, New York City, as soon as it starts raining, the guys with the umbrellas come out. It's almost like they knew it was raining and then blocks on either side of Park Avenue, everybody's with umbrellas and you gotta figure out something else to sell because the umbrella's already there. But the, um, so, you know, when we first started doing in private equity was a way of exploiting value that was latent inside companies because you didn't have the financing to be able to purchase these companies. And you didn't have the, um, toolkit to extract value from them. That's, those are the issues that we resolved with what I just, what I talked about earlier. Especially when Mike Milken untapped this high-yield market that we could borrow from to finance these companies.

• 2:14:11Speaker 04

  Um, then, then people rushed in. Uh, and in part, the Blackstone idea, you'd have to talk to Steve Foresman, was to build a platform that you could take to scale where you could raise an amount of money that people who'd come into the space couldn't match you. And so you could like mine a different vertical layer of companies that were immune yet to private equity disciplines by getting to scale.

• 2:14:36John Coogan?

  Yep.

• 2:14:36Speaker 04

  In the enterprise. You see what I mean?

• 2:14:38John Coogan?

  Very controversial in Silicon Valley to call that out nowadays.

• 2:14:42John Coogan?

  There's a big discussion over platform funds and funds that might be doing exactly that.

• 2:14:45Speaker 04

  Yeah. Yeah. Okay, okay, we'll come back to that. And then, and then what I, and I decided that another, another path, that the technology industry had reached a point where there were scale companies where you could use debt and more private equity style skillsets to buy the companies. First big one we did was something called Seagate.

• 2:15:06John Coogan?

  Yes.

• 2:15:06Speaker 04

  Where we borrowed a bunch of money to buy a big tech company.

• 2:15:09John Coogan?

  Yes.

• 2:15:09Speaker 04

  Um, but if you look at companies like, so, and when I was coming up, people looked at companies like Microsoft and they said, oh, these are very risky companies. Uh, Steve Ballmer and Bill Gates were college classmates of mine, by the way.

• 2:15:21John Coogan?

  Yeah.

• 2:15:21Speaker 04

  Um, we're all.

• 2:15:22John Coogan?

  You're a lucky, you're a lucky guy.

• 2:15:24Speaker 04

  Class of seventy-seven at Harvard. Steve and I graduated, Bill did not, but he did better, so.

• 2:15:30John Coogan?

  On the financial innovation, it feels like a lot of what you identified, Black Scholes, Modern Portfolio Theory, Sharpe ratios, all of that, that's all pre 1999. I'm interested in understanding, what was the key unlock to bringing private equity to technology specifically? Were you thinking about Metcalfe's Law, network effects, zero marginal costs? Were you looking at businesses that fundamentally differed from the traditional widgets business or industrials business and had different structures? Or what else was going on there?

• 2:16:04Speaker 04

  Really good question. So at that point, technology was in a period of transition. This is like the future is here, it's just not evenly distributed.

• 2:16:12John Coogan?

  Yeah.

• 2:16:13Speaker 04

  It was thought to be an area, two things. One, it was thought to be an area of expertise, and it was true. You really had to have specialized expertise to understand the companies to invest in them successfully. You couldn't just wander off of, out of Wall Street with your pinstripe suit and sort of think you could figure, go to a couple of conferences and think you could figure out how to buy a technology company. Because the process of evolution was so rapid. And then secondly, to that point, people did not understand how technology companies had evolved. That point, technology companies were big, they consumed huge amounts of cash in investing in R and D to build the products. And they had very volatile earning

• 2:16:55Speaker 04

  streams as a consequence of being pioneers in a space that came and went very quickly. And so people looked at that from, it was a venture capital gig, but looked at it from a private equity perspective and say, you can't do it. But at that point, Microsoft, for instance, that's what I was talking about, Microsoft got to a level of scale where it was one of the greatest economic enterprises in world history. Where you make this piece of software that comes out of someone's brain, has almost no capital expenditures and associated with it, no kind of fixed cost, and sell it a billion times.

• 2:17:33Speaker 04

  Right, I mean, that's it, and it just this massive flywheel of cash comes into that company. And we, you know.

• 2:17:38Jordi Hays?

  When was that, when was that like lightbulb moment for you? No, but for you personally.

• 2:17:43Speaker 04

  I, I observed it in the 90s. Um, I had the benefit then of living in Boston and the venture capital business was pretty, pretty, um,

• 2:17:53Speaker 04

  vibrant there then. They moved later primarily to Silicon Valley, but there was a big footprint in Boston in those days. Uh, because you remember, um, data, general and digital equipment were kind of there, the, the micro companies. Uh, the, some of the mini computer companies. Um, and so you could watch it happen and you say, you know, that's a better way to make money. Than just trying to extract value from rationalizing a legacy industrial companies that have been poorly managed.

• 2:18:19Jordi Hays?

  Yeah, widgets business.

• 2:18:20Speaker 04

  Right, and then the other thing is, we remember is that people will, in thinking about exiting businesses. Uh, the market will pay you more for companies that have good, this was an insight of those days, it's not now. By the way, in those days to borrow money, you had to have assets to back it with. You know, like, um, you know, inventory, working capital.

• 2:18:40Jordi Hays?

  You couldn't use the, you couldn't use the company that, and, and, and then, yeah, you couldn't use the cash flows in this, in the, in a software business didn't, you know, maybe they had a, a lease for an office, but not a lot of like some servers.

• 2:18:52Speaker 04

  But so what we had to do was teach the markets to lend against cash flow. Actually lend against assets, so cash flow lending became this kind of new thing. Yeah. That we had to teach, teach people how to do, and when, then once you got that, then you realize that if you had a rapidly growing company like a Microsoft that had an extraordinary cash flow engine, huge barriers to entry. At that point, people, when I came in the investment business, people said tobacco is the best business to invest in because, I'm serious. Because it was very stable, it had stable cash flow, stable pricing, and it didn't vary with recessions. I said, let me get this straight, a business that addicts and sickens its customers is better than Microsoft? No, I'm sorry, I don't agree with that, right?

• 2:19:38Speaker 04

  Right, you gotta look at the modern world and understand that these cash flows are sustainable and these businesses are extraordinary because it doesn't, because the, the, the product comes from someone's head. It don't have to build a factory to build the thing.

• 2:19:51John Coogan?

  Fascinating.

• 2:19:52Speaker 04

  And so we just built this built this business that got that had that set of insights. And as a consequence, we were able to build a so the other idea there was to build a strategic competitive advantage at commanding heights that you could occupy that made it very hard for anybody to compete with you.

• 2:20:07John Coogan?

  So yeah, so help us bridge to some of the debt financing that's going on today. I think that there are a lot of folks in the tech community that are very used to a bunch of 20% dilution equity rounds, maybe a growth equity round. And the idea of bringing on a partner like Blue Owl for some massive deal, it just doesn't map to the traditional like tech startup like path. And yet folks who are trying to understand where AI is going and where the big hyperscalers are working start have to grappling with it with with debt and how debt is coming into this generation of this.

• 2:20:47Jordi Hays?

  And Sam Altman has said like, we maybe need new, he said, we need new ways.

• 2:20:52John Coogan?

  Like financial innovation.

• 2:20:53Jordi Hays?

  We need financial innovation, not just technological innovation. A lot of people have, you know, kind of shunned him for suggesting that. But I think based on what you've been describing of what enabled this wave of like value creation and unlocking the value of these private companies and the value of their cash flows.

• 2:21:11John Coogan?

  It can be done responsibly.

• 2:21:12Jordi Hays?

  It can be done responsibly. Yeah.

• 2:21:13John Coogan?

  Yeah.

• 2:21:15Speaker 04

  Wow, that's a really, really good question. And I don't know, maybe we'll have to do a second show just on that because

• 2:21:22John Coogan?

  Please.

• 2:21:22Speaker 04

  because this is a complicated topic, right? But it is, it technology is very, I like technology, you know, gotten into it full time for now, you know, 25 years ago. I still feel like I'm new to like, I'm still new to golf, even though I've been playing it about the same period of time.

• 2:21:40Jordi Hays?

  Yeah.

• 2:21:41Speaker 04

  The but one of the things great about it is it's constantly changing and you have to constantly adapt your thinking and develop new modes of sort of how of investing. And so this AI thing is brings us back to the future that which is it's technology, it's a technology, software driven LLMs, technology enterprise that requires a scale of capital investment that we've never seen before.

• 2:22:09Speaker 04

  And that's a really unique kind of challenge. It's one of the things that's drawn me into the kind of investments that I've made there. It reminds me a bit, historically, it reminds me a bit of when the semiconductors companies went fabulous about 25 years ago. And the industry split into companies that designed semis and basically TSMC, right? And TSMC succeeded largely because the country of Taiwan was willing to essentially lend them the credit rating. The scale of capital necessary to build a fab that could design these, that could manufacture these wafers with a nanometer scale that they had at prices

• 2:22:52Speaker 04

  that were cost competitive that could continue to drive adoption of technologies based on semiconductors was only approachable by a national credit rating. TSMC had a backstop. Basically, had the backing of the government of Taiwan to go get this done. There's a reason why it's in Taiwan. You couldn't do that in those days. The capital wasn't available to do something like that in those days at that scale for that kind of enterprise. It's very similar today, which is the scale of financing that's required to do, to build all these fabs, not fabs, I'm sorry, factories, data centers. I call them factories because they're factories manufacturing data now. And what I say to my people, what I say to

• 2:23:37Speaker 04

  my friends is, America's now the leader in the world in advanced manufacturing because we're building these data centers to manufacture data. Yep. Right. And that's kind of what it is. It's a massive factory manufacturing LLMs and applications for both training and inference. Yeah. But that's kind of one. The second point would be that people compare this to, so the question is, are we in a bubble? Sure. That's kind of underlying the thing you raised, right? What kind of bubble is it? And the question, you have to make a decision whether or not this is more like subprimes in a way, or more like the internet in 1999, 2000. You know, whether the subprime is just kind of something that's not real, it's going to collapse, and when you're left, you're

• 2:24:21Speaker 04

  just left with a bunch of debt and no value there because the home values all went down. I am more in the internet camp. Yeah. Which means that...

• 2:24:33Speaker 04

  Of course, there will be companies that will be formed that won't be successful.

• 2:24:39Speaker 04

  Of course, there will be investors who put capital in bad places and lose money. Of course, there will be some number of scoundrels and shysters who come in because money gets moved around and they get attracted to this, right? But there are one major, you mentioned Blue Owl.

• 2:24:57Speaker 04

  The one major difference today between the build up. So what was happening simultaneous with the Internet was being when the dot com companies were being built. Could say the L L M equivalent of today. The fiber optic networks were getting constructed all around the country, the C legs. And those all went to zero and people lost their money on it. The major difference between that, and people use that as analogy today. And maybe the railroads is another analogy, but the major difference between that and today is every one of these data centers, almost all of them. Has a counterparty, a solvent counterparty that is contracted to take all the output. They're built to suit, not if you build it, they will come. Yeah.

• 2:25:39Jordi Hays?

  Yep.

• 2:25:40Speaker 04

  Okay, Microsoft has, I think, the world's best credit rating. If you sign a deal with Microsoft to take the off put for your data center.

• 2:25:48Jordi Hays?

  Satya is good for it.

• 2:25:50Speaker 04

  He's good for it. Yeah. And by the way, Microsoft's gonna survive if that has a collapse at some point before it comes back again. That's a good point. It's a very different kind of financing structure. And the last point I would make and just finish this is that each of these deals, so far as I understand it. Is done in a way that essentially generates in the four to five year period of the deal. Generates about a two times multiple of money on the cost of buying the GPUs and standing at the data centers. Oh, interesting. Right, so the contract, and they're about four to five year contracts. Yeah, yeah, yeah. And the output, it has a, and then, and talk about, okay, embedded options and how you value those, right? And then the owner of the, of the GPUs in the data center.

• 2:26:34Speaker 04

  Has an embedded option on the value of the used GPUs, which will be worth something. I mean, your five year old iPhone is still worth something. Of course. Even though people are buying the new ones, right? Yep. And so the, each of the model, each of the business, each of the contracts and builds right now. Has a, has a, has a commercial proposition in it.

• 2:26:53Speaker 04

  And when done well, these companies that are doing this, like CoreWeave, are putting one of, building a wall with one of those bricks on top of the other.

• 2:27:01John Coogan?

  Yeah.

• 2:27:01Speaker 04

  Do you see what I mean?

• 2:27:02John Coogan?

  Yeah.

• 2:27:02Speaker 04

  So it's not, it's not analogous at all to the sea legs where they put a bunch of money in the ground and then went to get the customers and the customer weren't there.

• 2:27:10John Coogan?

  Sure.

• 2:27:11Speaker 04

  That's a very different thing.

• 2:27:12John Coogan?

  That's a really good point. I haven't, I hadn't considered that. That makes a ton of sense.

• 2:27:17John Coogan?

  That's great. Uh, yeah, I feel like a lot of people in, uh, in tech are just struggling to, you know, there's been this narrative for a while that, uh, chat GPT is the new Google. And then you look at how capital consumptive OpenAI will be before profit comes or cash flow comes versus what happened with Google. Where they were throwing off millions of dollars in cash, like well before IPO. And the prospectus just looked so clean, this like super high margin business, very fresh out of the gate. Uh, and it's just a very different world that we're in where we're delivering us something similar. It feels just like a website.

• 2:27:53Jordi Hays?

  Partly because, partly because OpenAI has to compete with Google.

• 2:27:57John Coogan?

  Yeah, maybe, maybe, but it's just a different, it's just a, it's a capital consumption. It, so the models change a little bit. Yeah.

• 2:28:04Speaker 04

  Each wave of technological innovation, companies are created that don't obsolete the company that went before them. They do something completely different.

• 2:28:13John Coogan?

  Yes.

• 2:28:14Speaker 04

  Right? And they're sometimes very different. Like, you know, so you've got, you know, the, the, the soft, the Microsoft software was unlike that was the operating system. The applications was unlike anything we had before, because we didn't have the PC.

• 2:28:27John Coogan?

  Yeah.

• 2:28:28Speaker 04

  And then Amazon was not anywhere near like Microsoft. It was a whole different kind of innovation that was based upon the internet that was built.

• 2:28:35John Coogan?

  Yeah.

• 2:28:36Speaker 04

  Uh, and then Google and was different, was something new and Facebook was something entirely new. So these aren't companies that say, I, I'm taking your business, your thing away from you.

• 2:28:46John Coogan?

  Yeah.

• 2:28:47Speaker 04

  Right? Each one is a very different kind of unique unicorn type of business that occupies a niche itself. And eventually obsoletes the other businesses because they stopped growing.

• 2:28:58John Coogan?

  Yeah.

• 2:28:59Speaker 04

  Right? Like Facebook might stop growing if consumers go to OpenAI. But it's not because they're going to OpenAI because it's a new social network.

• 2:29:08John Coogan?

  Yeah.

• 2:29:09Speaker 04

  It's because it has a different use cases valuable to them today.

• 2:29:13John Coogan?

  What's been the biggest learning, surprise, sort of update to your mental model from working with CoreWeave?

• 2:29:26Speaker 04

  That's a really good question.

• 2:29:31Speaker 04

  The pace of change, the scale that we talked about, I mean, the thing that just amazes me is the scale at which this thing is growing. And the rapidity that you have to have in order to act at, to be successful at this kind of scale with this kind of growth. It's unlike anything I've seen before. You saw the adoption curves of, you've seen the adoption curves of OpenAI versus Google versus other things, right? And it's just like this asymptotic thing going to 700 million customers right overnight.

• 2:30:13Speaker 04

  All the infrastructure to support that is like unlike anything we've ever seen before.

• 2:30:17John Coogan?

  Yeah.

• 2:30:19Jordi Hays?

  Yeah, it's still under discussed how much bigger and faster the outcomes can be when you have the internet as a distribution, as a distribution engine. So like during, when like, you know, you founded Silver Lake in 1999, I'm sure you've looked at a bunch of companies that had a lot of potential. That if there was already billions of people using the internet, they would have done very well. And the challenge at that point is there maybe wasn't enough internet users to support even ideas that were structured, maybe like structurally good ideas, just missing enough, enough of a, of a user base. How much time do you spend finding and, and meeting and backing new managers?

• 2:31:00Jordi Hays?

  I feel like every new technology cycle, you know, the hottest hedge fund of the year is situational awareness, or at least, at least on X. And that feels like, I imagine there will be more of those. And so I'm curious how many, how much like new fund formation you're seeing and what you're most excited about on, on the GP side.

• 2:31:22Speaker 04

  Yeah, so I've got, so I have investments, I don't do venture capital investing per se. So I've got investments in some of the major venture capital funds, you know, in my investment platform. And I know all the people and watch what they do, but my business model outside of that. is to find a small number of companies where I can put a fair amount of capital and be engaged helping to create the outcome.

• 2:31:50Speaker 04

  See, that's kind of where I spend my time. So I'm not doing the whole build the massive portfolio thing. I'm picking my spots. And you mentioned the European bank that I'm the lead and been a director of.

• 2:32:00John Coogan?

  Yeah.

• 2:32:00Speaker 04

  Um, you know, we've got that stock up 3.5X in the last three years since I Hit the gong.

• 2:32:06John Coogan?

  We have a gong here. We'd love to hit.

• 2:32:08Speaker 04

  Right. So, you know, there you go. Oh, that's great. Thank you. Thank you. I don't, but I did, I got to tell you, I didn't get founder mode, guys. I don't know what was going on here.

• 2:32:20John Coogan?

  Here we go.

• 2:32:21Speaker 04

  There you go. I didn't get founder mode. Come on. I've been waiting for that.

• 2:32:24John Coogan?

  You gotta do founder mode for you.

• 2:32:26Speaker 04

  I love it. I love that. I love that. The goat is also very important. I love it. You know, you know, I've got, um, uh, children about your guys age. I just love your generation. I love hanging out with them. Um, it's a lot of fun. Um, so by the way, you see this logo here on my shirt?

• 2:32:43John Coogan?

  Yes. What is that?

• 2:32:45Speaker 04

  That's binary code. See that? You know what that's binary code for? 1 0 0 0 1 1 0. What's that? 1 0 0 1 1 0.

• 2:32:59Speaker 04

  It's binary code for 70.

• 2:33:00John Coogan?

  70?

• 2:33:01Speaker 04

  70.

• 2:33:02John Coogan?

  What, what?

• 2:33:02Speaker 04

  It's my, it's my 70th birthday logo.

• 2:33:04John Coogan?

  Oh, very cool.

• 2:33:05Speaker 04

  There we go.

• 2:33:06John Coogan?

  Happy birthday.

• 2:33:07Speaker 04

  Thank you.

• 2:33:07John Coogan?

  Congratulations.

• 2:33:08Speaker 04

  Incredible. So as I say, I've got, I've got, uh, kids your age, uh, and I really love hanging out with your generation. It's been my, uh, a great pleasure for me.

• 2:33:17John Coogan?

  Yeah.

• 2:33:17Speaker 04

  Um, so So we love hanging out with you too. You were, you asked me another question that we got distracted from it. Oh, so what, what I'm trying to do is find a small number of enterprises in which I can engage. Get involved with them at a senior level in both cases, Core Weave and Sainte-Tene. I'm lead and been a director.

• 2:33:34John Coogan?

  Yeah.

• 2:33:35Speaker 04

  Uh, you know, it's another term for non-executive chairman. There's usually an executive chairman and I'm non-executive. Uh, and then really work with the enterprises to build value.

• 2:33:43John Coogan?

  Yeah.

• 2:33:45Speaker 04

  That's kind of how I think about it. And then I let venture capitalists who I invest with, and I still invest with Silver Lake, be on the rock face every day building these portfolios.

• 2:33:55John Coogan?

  The rock face? That's a funny analogy. I like that.

• 2:33:58Speaker 04

  Right. Well, you're the mountain climber, right?

• 2:34:00John Coogan?

  Yeah.

• 2:34:01Speaker 04

  Yeah. Right. So, um, although you're the height of a basketball player, I think you probably had the wrong sport.

• 2:34:07Jordi Hays?

  I think you're referring to like one of our early episodes where I was joking, remember about, about you climbing that those like,

• 2:34:14John Coogan?

  Oh, yeah, yeah, yeah.

• 2:34:15Speaker 04

  Yeah, I heard that. Yeah. I thought that was, you were just kidding him, right?

• 2:34:19Jordi Hays?

  Yeah, yeah, just messing around. Just because just the idea of John, a 6'8" guy scaling.

• 2:34:24Speaker 04

  Okay, yeah, I agree.

• 2:34:27Jordi Hays?

  You could do, I believe in you, but I'd be, I think that would, that would probably violate some key man insurance.

• 2:34:33John Coogan?

  Yeah, I know.

• 2:34:34Speaker 04

  I definitely want to be above him on the wall. I don't want to be blown, but. Anyway, so, you know, so I'm trying to pick my spots and really add some value.

• 2:34:42John Coogan?

  Yeah. Well, thank you so much for coming on the show. We have to have you back soon. This is fantastic. We could talk all day long.

• 2:34:49Jordi Hays?

  Uh, yeah, there's, there's so many, so many more questions I want to ask.

• 2:34:54Speaker 04

  Congratulations on the success of the show, guys.

• 2:34:56John Coogan?

  Thank you so much.

• 2:34:57Jordi Hays?

  You're welcome on, welcome on any day.

• 2:35:00Speaker 04

  When you're on the East Coast, come see me.

• 2:35:01John Coogan?

  Fantastic. Yeah, we will.

• 2:35:03Jordi Hays?

  Thank you so much.

• 2:35:03John Coogan?

  Let's play him off with some sound effects. Thank you so much, Glenn, for taking the time. We'll talk to you soon. Uh, let me tell you about, uh, getbezel.com, shop over 26,500 luxury watches, fully authentic, in-house by Bezel's team of experts. We're going to our lightning round. We got Yogi Goel from Maxima announcing a massive round. Let's bring him in to the TBP and Ultra Dump. Welcome to the show. What is your T-shirt? Introduce yourself. What do you do? Give us the news. What's the latest?

• 2:35:34Speaker 06

  Absolutely. So nice to meet you both, Jordy and John.

• 2:35:37Jordi Hays?

  Great to meet you.

• 2:35:38Speaker 06

  Yogi here, uh, from Maxima. We are an enterprise accounting platform focusing on waging the war on the month-end close process.

• 2:35:46John Coogan?

  Let's go.

• 2:35:47Speaker 06

  We are, uh, In a short focus, our AI agents are co-writing the monthly financial package and preparing the data for the accounting team. We've been around for now five, six quarters and helping incredible companies like Scale AI, Rippling, Spot On, Press Juice. So a lot of companies in both tech and non-tech world to make accounting sexy again.

• 2:36:13Jordi Hays?

  Very, very on-brand to count the time you've been in business by quarters.

• 2:36:21John Coogan?

  And what's the news today? Break it down for us.

• 2:36:23Speaker 06

  Yeah, so we just raised forty million dollars in C+ Series A. All right, there we go.

• 2:36:35John Coogan?

  Very exciting. Explain to me how this plugs in. Obviously, there's a lot of folks that have an accounting layer of record, a single pane of glass, an ERP, an accounting suite. Do you want to just plug into that? Do you want to rip and replace that? There's so many different folks eating around the edges, creating different solutions. I don't think anyone knows exactly how the market will play out, but what have you built?

• 2:36:57Speaker 06

  Yep. So we've built a system of action and system of intelligence which works with any system of record. So when you go to an enterprise company, asking them to replace ERPs is like asking them to do brain surgery. I was a pro, and I would not agree to that. And we say that, hey, your system of record is where your data should eventually sit. We do the, we help with automating the human work of grabbing the data from upstream systems, doing the manual, our agents do the automated work, and then eventually finding anomalies and errors. I don't know if you're following, but last year was the maximum number of companies in the US which had material misstatements and like up to forty percent

• 2:37:42Speaker 06

  stock drops, stock price drops.

• 2:37:44John Coogan?

  The most mistakes from accounting specifically last year? That's not good. Hopefully, we can fix that. I have one last question, and then we will let you go. I want to know, give me some examples of where the current crop of AI models really excels in finding these types of problems? And then where do you want to still leave the human in the loop? Where do you want the human? What's the really intractable problem that maybe we'll solve in a few years with AI? But for now, you'd leave it with the human?

• 2:38:14Speaker 06

  Yeah, so the- You gotta have somebody to fire.

• 2:38:20John Coogan?

  Who's the last guy in the accounting office, I guess, is the question. But, you know, I'd love some examples of problems that really excel for AI and problems that are maybe more intractable.

• 2:38:30Speaker 06

  Yeah, look, I'll just start with saying, a problem, we are not going after the human labor salary, we are going after errors, inefficiency and pain that I personally faced both as an auditor and as an accountant for 20 years. There are not enough accountants in the world that you can truly hire for the amount of work that's there. So, in terms of where AIs are very good at today, they are very good at taking a defined set of instructions and following things over and over again for a variety of transactions, provided you give them deterministic operators, which we have built, that they will only use those tools and then come up with the right answer.

• 2:39:12Speaker 06

  So we are using this hybrid approach, where agents follow Maxima tools to come up with the exact same answer. And so when Deloitte and EY comes knocking, looking at the work that Maxima produced, they will do two plus five and the answer will always be seven. It will not just be 15. So that's one thing we determined really well. Second, it's really good at finding anomalous behaviors and errors that might happen, because it is looking at millions of transactions over time within the company, it can just see that, hey, your legal bill used to be $50,000, suddenly it's $500,000. Turns out Jim had a late night and he had one extra zero, and that's why it went up.

• 2:39:53John Coogan?

  Yeah, and I mean, artificial intelligence has been used in fraud detection for years and years and years, and so applying that heuristic-based to stochastic-based, more less deterministic computing, more probabilistic computing, makes a ton of sense there.

• 2:40:08Jordi Hays?

  I love the positioning around pain and errors. You've got to talk to the venture capitalists who are yelling loudly to anyone that will hear, "We're going to replace all labor, give me more money to replace labor." It's like, no, you can just, you can show the sort of optimistic, like, positive, you know.

• 2:40:27John Coogan?

  Well, thank you so much for taking the time. Congratulations on the massive round. We will talk to you soon.

• 2:40:31Jordi Hays?

  Yeah, great to meet you. I'm sure you'll be back on soon.

• 2:40:33John Coogan?

  And have a great rest of your day.

• 2:40:34Speaker 06

  Thank you.

• 2:40:35Jordi Hays?

  Great shirt, too.

• 2:40:37John Coogan?

  Let me tell you about eatsleep.com. Exceptional sleep without exception. Fall asleep faster, sleep deeper, wake up energized. Our next guest is Sam Jones from Method. We will bring him in from the restream waiting room into the TV PM Ultra Dome. Sam Jones, how are you doing?

• 2:40:52Speaker 07

  Welcome. Good guys, great to see you guys.

• 2:40:54John Coogan?

  That sound effect kind of just, I don't know, it doesn't have enough of a crescendo for me. We need to work on that one.

• 2:40:59Speaker 07

  Yeah, we're working on our drum roll.

• 2:41:00John Coogan?

  Thank you so much for taking the time to hop on the show. Uh, please introduce yourself, introduce the company, tell us what the news is today.

• 2:41:07Speaker 07

  All right, I'm Sam Jones, the CEO and co-founder of Method Security. Our mission is to deliver cyber resilience to the US government and critical enterprises. Um, think of what we do as, uh, building the command and control layer for autonomous cyber operations across defense and offense. And the news today is that we are announcing our 26 million combined seed and series A investment from Andreessen Horowitz and General Catalyst.

• 2:41:33Speaker 07

  Incredible.

• 2:41:34John Coogan?

  Very good. Uh, I, I, I, obviously I want to jump in.

• 2:41:38Speaker 07

  Remember we hit the gong preemptively last time?

• 2:41:39John Coogan?

  We did a preemptive gong.

• 2:41:40Speaker 07

  We preempted, it happened.

• 2:41:41John Coogan?

  But we got you in the Ultra Dome.

• 2:41:43Speaker 07

  We'll have to raise more money to pay you back for that gong. I'm sure, I'm sure you will.

• 2:41:47John Coogan?

  I would love for you to get me up to speed on how you're thinking about, uh, that, that story in the Wall Street Journal, uh, about Anthropic. I'm sure you know the one. Uh, is this something?

• 2:41:56Speaker 07

  AI on AI violence.

• 2:41:57John Coogan?

  Exactly. Uh, is this relevant to your business? Are, are you building a solution to that or, or do you even have a comment on it or anything? Can you just get me up to speed?

• 2:42:05Speaker 07

  Highly relevant.

• 2:42:06John Coogan?

  Great.

• 2:42:06Speaker 07

  Um, and that's kind of the moment that we've been, we've been building for, for a couple of years now. Like we've known this was going to happen. AI is effectively, um, you know, taking, at the limit, taking cyber offense to infinity and taking the cost to zero. And, uh, this is bad news for good guys, bad news for, uh, the defenders as our adversaries are essentially, uh,

• 2:42:29Speaker 07

  Eliminating their requirement or limitation on human headcount. So what we do is essentially allow organizations to safely become the threat to test their own defenses before some adversary does. And the best offense is the best defense has always been a notion in security, but AI is really the unlock to do it at scale. The hard part is you need to do so safely, ethically, legally, and that is the infrastructure that is like needed to do, and that's what we build specifically. So like in that report, it's almost like no news to anyone in the security trenches. Like, obviously, this has been happening. Obviously, that wasn't the first autonomous attack.

• 2:43:07Jordi Hays?

  Yeah, what are some other, without naming names or any details like on the individual companies that were attacked? Like, I'm assuming when you see, anytime I see a report like that, I'm like, okay, this must be happening like a ton and just a lot of it just never, never hits like headlines. But what are, what are some of the most like kind of common strategies that bad actors are using today in the context of AI to carry out whatever their goals are?

• 2:43:38Speaker 07

  If you think about pre-AI malware, it was already autonomous, but it was basically reliant on like if then decision making. What AI basically allows it to do is like a broader, non-deterministic path planning that allows it to harness a multitude of tools, thus do a lot more damage. That's what's different now, and I guarantee you, the most sophisticated actors are not using vanilla Claude code to run their operations. That's ludicrous. They have, our adversaries have better models at home that they make themselves that they're using that we have no, you know, telemetry on. And so they're essentially using it to scale and speed up their operations, which for us and why we have like a national cyber resilience urgency moment on our hands is

• 2:44:21Speaker 07

  that all of these exposures that we've left out on the internet and in our, you know, in our enterprises are now. You know, easy, easy takings for these types of attacks. And that's essentially why it's so urgent that we focus on resilience.

• 2:44:36John Coogan?

  Can you talk to us a little bit about traction? What unlocked this $26 million fundraise across these two rounds? Are you doing like, yeah, just walk me through how you actually show progress in, you know, you're building a product, but you're also trying to do deals with the government. That can be very difficult. What does progress look like?

• 2:45:00Speaker 07

  So we are deployed in production with a number of organizations to include the Department of War, US federal government and Fortune 500 organizations. That's probably the biggest hallmark of traction. And we're doing so across defensive and offensive use cases that get to the heart of resiliency. So that's the, I think, the unlock that we were able to do that. And we've had this hypothesis and mission from the beginning that in order to secure what matters, you need to be dual use. And we set out to basically pick what is the most intense, hardest government customer we could go after from the beginning and what's the commercial equivalent? Those are our first two customers. And then basically just continuing to build on that. You know, from the adversary's perspective, they do not discriminate between public and private, and neither do we.

• 2:45:46Speaker 07

  And that's why the, I think the ultimate game changer solutions will come from dual use companies like ourselves.

• 2:45:51John Coogan?

  Now I'm thinking about the hardest to hack Fortune 100 and government.

• 2:45:58Speaker 07

  It's not necessarily always the hardest to hack. A lot of times it's the hardest to sell to, hardest to deliver for. So if you think about the government done accreditation, deployability, like interoperability, huge technical challenges. That's why startups would never dare touch there. But when you think about what matters, they are what matters. And that's what we've built this company to serve.

• 2:46:18Jordi Hays?

  What were you doing before this again?

• 2:46:20Speaker 07

  So I started my career actually seeing this problem firsthand at the US Air Force. So I was a cyber operator. In many ways, we're building the tools that I wish I always had. I joined Palantir about 11 and a half years ago, you know, pre-product and building out both their cyber, commercial, and DoD business. And then I was also at Shield AI pretty early. And so you can kind of think of this company as we were the users. My CTO and co-founder also started his career at NSA. His last name is Hacker, by the way, if you want.

• 2:46:47John Coogan?

  Oh, there we go.

• 2:46:48Speaker 07

  About Destiny.

• 2:46:49John Coogan?

  And then also, I want an overnight success for being in this industry for 15 years.

• 2:46:56Speaker 07

  He had no choice other than to work at NSA, but we met at Palantir and did great work together. But we're combining our knowledge of like, we were the users. We know how to build hardcore, hardcore software and dual-use businesses. And then we built AI before, you know, it's become a meme and certainly in no-fail scenarios, which I would group security in for sure.

• 2:47:15John Coogan?

  Yeah.

• 2:47:16Jordi Hays?

  Very cool. Very bullish.

• 2:47:19John Coogan?

  Yeah, extremely bullish. Thank you so much for taking the time to come chat with us.

• 2:47:22Jordi Hays?

  Great to get the update.

• 2:47:23Speaker 07

  My background wasn't as good as Glenn's mahogany. I showed this startup.

• 2:47:29John Coogan?

  You brought a wood, which is good.

• 2:47:31Jordi Hays?

  Thank you for bringing. What's the biggest fish you've ever caught?

• 2:47:35John Coogan?

  Yeah.

• 2:47:36Speaker 07

  Yeah, probably a nice walleye, I'd say.

• 2:47:39Jordi Hays?

  There we go. Good answer. Good answer.

• 2:47:41Speaker 07

  Midwest shout out.

• 2:47:42John Coogan?

  Thank you so much.

• 2:47:43Jordi Hays?

  Well, I cannot wait for the bees. Congrats on all the progress.

• 2:47:46John Coogan?

  Yeah. Have a great day.

• 2:47:47Jordi Hays?

  Cheers.

• 2:47:48John Coogan?

  Talk to you soon.

• 2:47:49Speaker 07

  See ya.

• 2:47:50John Coogan?

  Bye. Let me tell you about wander.com. Book of wander with inspiring views, hotel great amenities, dreamy beds, top-tier cleaning, and 24/7 concierge service. Our next guest is already in the restroom waiting room. We have Ali Madani.

• 2:48:01Jordi Hays?

  Welcome to the show.

• 2:48:02John Coogan?

  How you doing? Thank you so much for taking the time to come chat with us. Please introduce yourself. Introduce the company. Tell us what the news is today.

• 2:48:09Speaker 08

  Sure, absolutely. My name's Ali. I have a PhD in machine learning from UC Berkeley. I've been working in the space of biology and AI for almost a decade now. Previous to this, I led a moonshot at Salesforce, pioneering language models for biology. And what started out as a purely scientific endeavor to develop Transformer models for sequence generation has led into profluent specifically, profluent specifically where our mission is to make biology programmable. And I'm happy to kind of break that down.

• 2:48:40John Coogan?

  Yeah, yeah, I I've seen, obviously, there's, there's a ton of just like momentum in the space. AI curing cancer is like a buzzword that a lot of people are throwing around.

• 2:48:53John Coogan?

  How are you thinking about concretizing what you're actually, how you're trying to fit in? Are you a tool? Are you a drug maker? Is it uncertain? Like, who are your customers? How, how much are you in like a science project world? Like, you know, you could be a nonprofit in another, in another era versus like you're ready to commercialize. You're going to market and not that there's one path that's wrong or the other, but I'd love to know how you're thinking about the business right now.

• 2:49:20Speaker 08

  Totally. Yeah, I think there's a lot to unpack there. I think the meme that came to mind specifically, I don't know if it's a self-marketing or otherwise, where it's, it starts with like, build something and then there's a dot, dot, dot, question mark. And it's make profit.

• 2:49:31John Coogan?

  Profit, yeah. Step one, step one, you know, make biology programmable. Step two, bro down with your boys. Step three, profit.

• 2:49:40Speaker 08

  And I, and I think a lot of folks, you know, right now, there's an incredible amount of excitement around AI. It's kind of like step one is make a chat bot, for example, right? And then it's question mark, dot, dot, dot, and then solve, you know, disease or cure cancer specifically. Whereas what we're actually trying to build here is actually tackle on the disease head on specifically. So what we do is we build language models. So the same language models that have enabled G P T two, three and four and chat G P T specifically, these incredible models and algorithms that can learn on sequences. What we can feed instead of words in a sentence is actually amino acids that are strung together to form a protein. And why that's actually important, why making biology programmable? Maybe we'll take a step back, like people usually shut off their brains when it comes to biology.

• 2:50:24Speaker 08

  And when it comes to like rockets landing on a platform in the ocean, we're amazed, right? And that makes sense, right? Like it's, these are man-made machines. We can see it. They're incredible. But honestly, biology is not that much different. There are these molecular machines called proteins that enable us to breathe and see. They're responsible for everything in human health and disease. And also they sustain the environment involved in daily, daily products, like even our detergents to begin with. And how, let's actually stick to drug discovery in particular. How we've gone about finding these solutions, these molecular machines that we utilize day in, day out, has actually been through random discovery. So you know, that that middle school example of Alexander Fleming coming across penicillin,

• 2:51:05Speaker 08

  right? He had a Petri dish, they molded, for example, and then they found the advent of antibiotics. And now, after you get a cut on your skin, for example, where bacterial infection happens, it's no longer a death sentence, right? That actually is not the exception. It's the rule in which we've gone about finding lifesaving medicines. Even fast forwarding to today, CRISPR-Cas9 was actually found in a Denisco yogurt facility, where people found these interesting bacteria doing these interesting characteristic, having these interesting characteristics. It was taken a molecule, plucked it from nature, and then crammed it within human therapeutic applications to actually save lives. And honestly, like, to put this really in rudimentary terms, that's that's kind of absurd. It's almost caveman-like in terms of our technique,

• 2:51:48Speaker 08

  our techniques that we have and methods that we have available for us for drug discovery. And what we're trying to do is actually move away from random discovery and finding a needle in the haystack and relying on nature altogether and using AI to design bespoke medicines from scratch. And that's, you know, like, that's our mission to really gain control and mastery over biology and perform bespoke design. So in terms of your question of like, where are we with respect to, you know, is this just a science project? Or how's the commercialization looking specifically? I would still say we're in early days, like the equivalent of GPT eras of like maybe GPT-1 and GPT-2. But we've already seen an incredible amount of traction. So we have this project called Open CRISPR specifically.

• 2:52:30Speaker 08

  What we took is, we took these these language models trained on gene editing proteins specifically and generated a novel protein from scratch called Open CRISPR-1 that thousands of people use now in pharma, large pharma, small biotechs, academics, industry users and scientists as well. And over thousands of people use this over worldwide worldwide today. And I think that's like, it's amazing to actually see us. Solving problems today that have lead to commercial traction and that we have partners, both from therapeutics to diagnostics to biomanufacturing, even agriculture that I'm utilizing today.

• 2:53:04Jordi Hays?

  Can you talk about like how you create feedback loops as a company? Because you know, there's no shortage of people in AI that talk about the opportunity of like curing various diseases. Many of them aren't saying that from the standing in an actual lab. You are standing in a lab. That makes me more excited about what you're doing because you're not just kind of, you know, like there's, you're not just saying like, oh, like the next version of the model will, will just do this, like, don't worry about it. It's like, no, like, we're going to run a lot of experiments. But yeah, I'm talking about, yeah, like, you know, using AI to, to, to learn and generate, you know, potential approaches, but then actually bring it into a lab setting.

• 2:53:50Speaker 08

  Absolutely, yeah. We operate within a pre-training and post-training paradigm within proteins, similar to NLP and natural language processing as well. So the pre-training step really involves, similar to how we have all of the internet that we can scrape from and can learn these underlying principles and grammar and semantics as to what makes human-generated texts. We've actually collected a tremendous amount of data of proteins that have naturally evolved through nature for selective reasons, selective pressures and evolutionary kind of pressures that have shaped those proteins specifically to make a functional protein. And just to put that into context, AlphaFold 3 was trained around, it was exposed to around two to three billion proteins. What we've actually trained to date so far at ProPoint is over 100 billion proteins.

• 2:54:32Speaker 08

  And to put that into tokens, that's over 20 trillion tokens, exactly. So there's, there's an incredible amount of data for pre-training purposes that we utilize. And then what you see behind me as well is the data that we're doing, the assay labels, labeled examples, meaning actually taking protein sequences and then measuring their function, not just in vitro and test tubes and vitro dishes, but in human cells and relevant cellular contexts and seeing how well they actually perform, and we can feed that back into our models. So I think that's, you know, the future is really an integrated future where you're building frontier AI models and having the, the, the closed loop specifically with respect to the wet lab, which is what, what's behind me today, to actually test these and feed them back into our models to get better and better over time.

• 2:55:18John Coogan?

  Well, congratulations. I want to ring the gong for you.

• 2:55:20Jordi Hays?

  And by the way, Gersner and Bezos, I mean, potentially the coolest cap table, the cap table of the year.

• 2:55:31Speaker 08

  Yeah, absolutely. Yeah, it's $106 million.

• 2:55:37Speaker 08

  And I, I think what's more important, what's more important than number are these legendary investors that we have. I mean, Jeff Bezos is a legend. He's transformed industries. And I think what's exciting for him and for us as well is that biology is the next frontier for AI specifically. That will have tremendous impact. And it really honestly is the most important question in our lifetime.

• 2:55:58John Coogan?

  Thank you so much for stopping by.

• 2:56:00Jordi Hays?

  I'm sure you will be back on very soon.

• 2:56:02John Coogan?

  And congratulations on all the progress.

• 2:56:03Jordi Hays?

  Great, great to meet you.

• 2:56:04John Coogan?

  We'll talk to you soon.

• 2:56:05Jordi Hays?

  Talk soon.

• 2:56:05John Coogan?

  Have a good one. Our next guest is already in the restream waiting room. We have a hard stop at two. We gotta run. We gotta hop on with New York. So let's bring in a meet from Luma AI with some massive news. How are you doing? It's been too long. Great to see you again. Welcome to the show.

• 2:56:23Jordi Hays?

  What's happening?

• 2:56:24John Coogan?

  Give us the news. What happened today? What happened? Break it down for us.

• 2:56:28Speaker 09

  Yeah, so we did two massive things. One, Luma raised a 900 million Series C.

• 2:56:37John Coogan?

  Okay, what was the second thing?

• 2:56:38Jordi Hays?

  I'm, I'm sorry. I'm sorry. What, like, was there not another 100 million lying around? You couldn't, like, you couldn't, you gotta, you're gonna make us wait for the Luma $1 billion round? Come on, dude.

• 2:56:51Speaker 09

  I'm very happy to accept friends and family checks.

• 2:56:54John Coogan?

  Okay. Oh, yeah. If you got 100 million for your, from your friends and family to round out, that'd be fantastic. And then what, yeah, what is the second thing?

• 2:57:02Speaker 09

  And yeah, the second thing is basically along with Humane, which is a, a, you know, this AI company being built in Saudi Arabia. We are building a two gigawatt compute cluster that we're going to use to train, you know, multimodal AGI.

• 2:57:17John Coogan?

  This is the big news. The money is one thing. This is much bigger. This is much more important. This is what we actually need, the compute.

• 2:57:23Speaker 09

  So, so you know, the TLDR of what happened here is basically, you know, so far, LLMs and LLM labs have had the right resources and multimodality, world simulation, these problems actually, you know, were side projects for most companies. Now, there is a lab and there is a company in the world that has this level of resources and is going right after AGI that can help us in the physical world, AGI that can help us simulate and, and, and, and, you know, generate the universe. So I think that's actually what happened, basically.

• 2:57:55John Coogan?

  Amazing. So.

• 2:57:57Jordi Hays?

  How do you think about, how, how, how do you explain the scale of two gigawatts? Because it sounds like two is not a big number.

• 2:58:03John Coogan?

  And, and is that, is it two gigawatts because you're expecting two gigawatts worth of inference? Or do you need a particularly big cluster for some sort of pre-training run that you're planning on doing?

• 2:58:16Speaker 09

  So it's both inference and training.

• 2:58:18John Coogan?

  Okay.

• 2:58:18Speaker 09

  But inference is actually, so, you know, majority of the workloads, as we go forward, right? Like, you know, as AI deployment goes forward, as we mature from just text-only models to models that are able to like, you know, generate videos, models that are able to explain things to us in video, what's going to happen is most of the workload and tokens will, will move to video understanding and video generation. And video tends to be, you know, computationally much more intense than, than, than language. So we need this level of compute to be able to deploy this technology and to be able to train. But this is mostly inference, honestly. Even today, Luma's inference to training compute ratio is two is to one already. And, and we are seeing that ramp

• 2:59:01Speaker 09

  actually growing further and further and further while we, we do deep research and, and train some, some of the largest models in our space. Inference is the one that is actually taking off.

• 2:59:11John Coogan?

  Okay. React to this, this take I got from someone who's also building a world model, a generative world model. He told me that he believes that it's more likely that AGI, something fully paradigm shifting emerges from world simulation than merely scaling up next token prediction, GPT five, four, five, six, seven, eight, nine. Getting away from text is actually somehow foundationally important to the next major breakthrough in AI as we know it as a whole.

• 2:59:47Speaker 09

  I think getting away from text is a mistake. Uh, we need to build models that combine audio, video, language limits. So like, you know, uh, we need to build things that like operate like human brain. If you remove text, you remove the entire interpretation of of the the the human logic and and like, you know, reasoning and those kind of things. So we need the physics that comes from video. We need the causality that comes from video. And we need the text, the which which actually makes all of this interpretable and logically connected, you know, across the world. So, no, I I think what we need to do is build these joint unified models. But uh, on the simulation side, I agree. And I think that's really, really important be- because. Think about robots or think about systems, you know, uh, uh, how they would operate, right?

• 3:00:32Speaker 09

  Like, they need to be able to understand the world. So this is world understanding, which is where world models are going to be very, very powerful and multimodal models are going to be very powerful. And second is simulation, being able to run the the process or idea in your head and and and drawing out conclusions, right? Again, what if I go twenty meters this way, uh, would I fall, right? This is a simple question, but as robots become more general purpose and day to day in our lives, we need this level of simulation capability in their heads. So generative models give you simulation capability, right? Simulation is extremely important. Second thing is, L L M's are really good at things that can be represented more or less fully in text code, uh, uh, analysis, these kind of things.

• 3:01:12Speaker 09

  But when we think of the physical world especially, acts like designing, uh, you know, manufacturing, these kind of uh, uh, topics. Like, one of the things we think a lot about at Luma is is manufacturing of a jet engine, right? Or manufacturing of a rocket engine. These are one of the most complex things humans do, and it takes a decade to build one. Imagine having models that are able to run these physical simulations and get to an answer. It's not about the visuals, it's about getting to the right answer. People do that in CAD, people do that in, in like, you know, software today, but it's like very uh uh um inaccurate. But if you're able to build models that can accelerate building of these complex systems, humanity has a chance at like, you know, uh uh building better and better things for ourselves, for, for our planet.

• 3:01:54Speaker 09

  So that is why simulation is really important, and that's why multimodality is really important. And text is just the first step. Text is like, you know, nineteen nineties internet. Then we got images on the internet, then we got videos on the internet. And today, like, you know, videos is the internet for humans at least.

• 3:02:07John Coogan?

  Yeah.

• 3:02:08Speaker 09

  AI will not be any different.

• 3:02:10John Coogan?

  Yeah. Um, last question from my side. Uh, what is the actual timeline for building a two gigawatt cluster?

• 3:02:17Jordi Hays?

  Yeah, and where, where, where, where will the majority of the infrastructure be?

• 3:02:21John Coogan?

  When can I see it? When can I go inside? I can be trusted.

• 3:02:24Speaker 09

  So some of it already exists. So by the way, we are building this uh in partnership with Humane in Saudi Arabia.

• 3:02:30John Coogan?

  Yep.

• 3:02:30Speaker 09

  And uh today it was announced here, so we, we are in DC right now uh for, for the um US Saudi uh investment forum.

• 3:02:36John Coogan?

  Oh, no way.

• 3:02:36Speaker 09

  Uh, it was announced uh by President Trump and, and Conference uh Mohammed bin Salman. Um, so the data center is going to be built in Saudi Arabia. Uh, uh, quite a lot of capacity is actually already available, and Luma is actually an active customer and using that today. But the deployment of two gigawatt is going to take time. That's an absolutely colossal amount of power and infrastructure that needs to be built. Starting with twenty twenty six and, and currently we believe that like, you know, by, by uh end of twenty seven or early twenty eight, we will have majority of the capacity at hand. And, and uh like, you know, we'll go from there.

• 3:03:10John Coogan?

  Fantastic. Uh, well, thank you so much for taking time while you're traveling to come chat with us and break down what's going on. Uh, congratulations on uh the amazing news and uh good luck with the next phase. I'm sure there's a lot going on.

• 3:03:24Jordi Hays?

  Next time you call in, come, call in from uh, from Saudi.

• 3:03:27John Coogan?

  That'd be amazing.

• 3:03:28Speaker 09

  Absolutely.

• 3:03:29Jordi Hays?

  From the desert, that'd be amazing.

• 3:03:30Speaker 09

  The first time, actually, I was on TPP and I was in Saudi.

• 3:03:33John Coogan?

  Oh, no way.

• 3:03:33Jordi Hays?

  There we go, we already did it.

• 3:03:35John Coogan?

  Well, check that box.

• 3:03:36Jordi Hays?

  Well, next time, next time, I want, I want, you know, one of those four by fours that uh, you know, call, call in from the desert, from, from Humane. I want, I want, I want to be live on the ground with you.

• 3:03:46Speaker 09

  For that.

• 3:03:47John Coogan?

  Yeah.

• 3:03:48Jordi Hays?

  Amazing. Good, great to see you again. Congrats on the progress.

• 3:03:51John Coogan?

  Thank you so much for jumping on. We have to hop on with New York.

• 3:03:55Jordi Hays?

  No, but first, we have one post we gotta pull up.

• 3:03:58John Coogan?

  One post, okay.

• 3:03:58Jordi Hays?

  And it's a post that I made.

• 3:04:00John Coogan?

  You made.

• 3:04:00Jordi Hays?

  Right when I saw that Nvidia beat.

• 3:04:02John Coogan?

  Nvidia beat earnings. They have traded up. The stock is up 3.8, 3.91%. Massive, massive news.

• 3:04:11Jordi Hays?

  It is at the very bottom.

• 3:04:12John Coogan?

  There were signs. This is your prediction. One of your, one of your many predictions, but this is the correct one.

• 3:04:19Jordi Hays?

  The only data that you needed to know.

• 3:04:21John Coogan?

  You know, you know, you said this. I think he's gonna beat earnings because he's drinking beers. And, and Ev was like, yeah, you belong in a pod shop. And he was saying it like sarcastically. Like, you know, to be in a real headshot pod shop, like you have to be much more quantitative than that. Turns out you don't.

• 3:04:36Jordi Hays?

  But, but.

• 3:04:36John Coogan?

  Turns out the vibe analysis works.

• 3:04:38Jordi Hays?

  You gotta take it all in. You gotta take it all in.

• 3:04:40John Coogan?

  Thank you to everyone for tuning in and watching our show. Leave us five stars on Apple Podcasts and Spotify and we will see you tomorrow.

• 3:04:47Jordi Hays?

  Global economy continues.

• 3:04:48John Coogan?

  Continues. The party continues, folks. White suits tomorrow.

• 3:04:52Jordi Hays?

  Gabe in the chat, Gabe getting drunk.

• 3:04:54John Coogan?

  Goodbye.

• 3:04:54Jordi Hays?

  Drunk responsibly. See ya.