Microsoft Chases the Frontier, SUNO on Fire, Project Solara | Mikey Shulman, Samir Chaudry, Tom Farley, Nikesh Arora, Henri Stern, Alex Good

(00:35) - Microsoft Chases the Frontier (05:00) - Project Solara (16:19) - Mikey Shulman, representing Suno, discusses the company's recent achievement of raising over $400 million, led by Bond, highlighting significant traction and progress in user engagement and retention. He emphasizes the importance of retention as a key metric, noting that improvements in the product have led to increased user engagement and a broader audience. Shulman also addresses the evolving perception of AI-generated music, suggesting that as more people experience the product, acceptance grows, and he envisions a future where AI tools like Suno become integral to creative processes in the music industry. (35:20) - 𝕏 Timeline Reactions (43:28) - Samir Chaudry is an American entrepreneur and co-host of the YouTube channel "Colin and Samir," where he interviews creators and discusses the creator economy. In the conversation, he explores the evolving collaboration between YouTube creators and Hollywood, emphasizing the emergence of internet-native filmmakers and the significance of community-driven intellectual property. He highlights the success of horror and animation genres on YouTube, noting their potential for adaptation into feature films, and underscores the importance of development support for creators transitioning to larger projects. (01:08:47) - Tom Farley, CEO of Bullish and former President of the NYSE Group, discusses his career trajectory from traditional finance to the digital asset sector, highlighting his early investment in Coinbase and the evolving role of blockchain in financial markets. He reflects on the maturation of the cryptocurrency industry, noting its transition from speculative hype to a more stable and institutionalized market, and emphasizes the potential for blockchain technology to revolutionize global securities by enhancing transparency and efficiency. Farley also addresses the challenges and opportunities in integrating digital assets with traditional financial systems, underscoring the importance of regulatory clarity and technological innovation in driving future growth. (01:32:48) - Nikesh Arora, an Indian-American business executive born in 1968, has been the chairman and CEO of Palo Alto Networks since June 2018, following senior roles at Google and SoftBank. In the conversation, Arora discusses the challenges AI models like Anthropic's Mythos face in cybersecurity, emphasizing issues such as high false positive rates and the lack of real-time enforcement capabilities. He also highlights the importance of focusing on detection and remediation over mere protection, given the evolving AI-driven threat landscape. (01:56:04) - Henri Stern, co-founder and CEO of Privy, a blockchain infrastructure company, discusses his participation in the Money 2020 fintech conference in Amsterdam, where Privy launched new products in partnership with Deel to enable contractors to receive stablecoin payments globally. He highlights the growing adoption of stablecoin cards that allow users to spend stablecoins directly through traditional payment networks like Visa and MasterCard, facilitating seamless transactions for merchants. Stern also notes the significant adoption of stablecoins in regions like Latin America and Southeast Asia, while acknowledging the regulatory restrictions in countries such as China that limit stablecoin usage. (02:11:13) - Alex Good, a former Army officer and experienced professional in finance and technology, has transitioned into the crypto and AI sectors, focusing on developing protocols that integrate these fields. He discusses the challenges at the intersection of crypto and AI, including increased hacking incidents due to AI's ability to evaluate human-written code, and emphasizes the need for secure protocols to prevent unauthorized transactions. Good also shares his "doom thesis," suggesting that AI might accelerate the emergence of surveillance states, prompting capital to move into privacy-focused cryptocurrencies like Zcash. TBPN is made possible by: Ramp - https://ramp.com Public - https://public.com Cisco - https://www.cisco.com Console - https://www.console.com CrowdStrike - https://www.crowdstrike.com Figma - https://www.figma.com MongoDB - https://www.mongodb.com NYSE - https://www.nyse.com Railway - https://railway.com Shopify - https://www.shopify.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.

• 0:00Henri Stern?

  You're watching TVP.

• 0:01John Coogan?

  Today's Wednesday, June 3, 2026. We are live from the TVP ultra dome, the temple of technology, the fortress of finance.

• 0:11John Coogan?

  Wow, that's loud. Ramp.com.

• 0:20John Coogan?

  We're having fun today. We've got the air horn. Yeah, we got a physical air horn. And when Nick fired that thing off unexpectedly, it really did some damage. But once you're prepared for it, it's It'll grow on you. Pretty satisfying. Pretty satisfying. Anyway, Microsoft Build is satisfying for a number of reasons. They're in the foundation model game. They train a bunch of models. MAI code one flash MAI thinking one, the company's first coding and reasoning models, respectively, with several, several speakers played up as super efficient on a cost per token basis in the ROI race. You got to be efficient. Microsoft Scout is an agent. They're open claw pilled now, powered by open claw, open source technology that operates across

• 1:05John Coogan?

  cloud, desktop and web, connecting to Teams, Outlook, OneDrive and SharePoint and to the data that powers your day, including chats, emails, calendar, contacts, good news if you're all in on the Microsoft ecosystem. And then we talked about this a little bit with the Jensen announcements from Nvidia. They're going into the PC market more. The Surface RTX Spark Dev Box is sort of the answer to Apple's Mac Mini custom silicon designed for agentic AI. There's also a new Android based OS operating system designed to run agents instead of apps called Project Solara. And there's a pretty cool demo. So we should play the video. The verge always does a cut down of these keynotes. They take

• 1:49John Coogan?

  you through Microsoft Build in 25 minutes, but we're only going to play a couple of minutes of this because it's a long presentation.

• 1:55Speaker 02

  I'm really excited about in order to tap into all this compute power is to expand the scope of Windows ML and Windows AI. We are also announcing two very cool new models that are all going to run on Windows in box.

• 2:12John Coogan?

  Okay, let's jump to

• 2:15John Coogan?

  Eight minutes. Because this is where Satya introduces Project Solara, which Ben Thompson said, "Project Solara is, to be very clear, vaporware at this point, although the company did show real devices and has signed up Qualcomm and MediaTek as chip partners. It's also extremely compelling, so Ben Thompson likes it. Let's listen to Satya Nadella introduce it.

• 2:34Speaker 03

  Two very broad categories. The first is stationary and the second is portable. The first device is designed for your desk and it's built on MediaTek silicon.

• 2:43John Coogan?

  Like, concept cars for consumer technology.

• 2:46Speaker 03

  With hello for business, just walking up to the device, securely signs you in, giving you direct access to your agents.

• 2:51John Coogan?

  And Amazon and Google Home have similar products at this point with screens for more smart home?

• 2:59Speaker 03

  ...you think, plan, and even act by delegating tasks to your agents with a simple tap or just using your voice. It even supports experiences like handoff between devices, acting as a companion to...

• 3:12John Coogan?

  Still tricky to imagine when you wouldn't want to use your phone for this, since people carry their phones everywhere. Firing off an agent isn't the most cumbersome thing, but I do love consumer hardware, so I'm excited to see if there's any unique things that you can do only with this product.

• 3:29Speaker 03

  ...lightweight form factor designed for agent interactions.

• 3:32John Coogan?

  This is a very interesting thing. It's not a phone. It looks more like a smart key card or badge. Yeah, it even has his face on it, like it's a badge that you'd wear.

• 3:42Speaker 03

  And using my fingerprint, I tap to unlock the device and I've accessed now to all my agents in a secured manner. And would you look at that? I already have a task. And it says, "Gather content for your social media posts."

• 3:54Jordi Hays?

  Sorry if I missed it. Why would you want this over having an application?

• 4:00John Coogan?

  On your phone?

• 4:01Speaker 03

  Camera is recording. I'm gonna pan across.

• 4:03John Coogan?

  I'm not sure.

• 4:04Speaker 03

  I'm gonna take a shot. Yes, thank you.

• 4:07John Coogan?

  That's a good question. Does anyone have an answer?

• 4:10Jordi Hays?

  There's a new meme, the two-phone meme. Maybe some people feel left out. They want a second device.

• 4:17John Coogan?

  There's like the dumb phone route, where you don't want everything in the phone, but you do want to kick off agents that go do things for you. You want to be more like delegating instead of like consuming. Like, you're not going to be scrolling TikTok on that thing, but you might be firing off work tasks that you can come to later on your desktop and sort of lock in on. I don't know.

• 4:40Jordi Hays?

  Yeah, so I could, I could, I could prompt it and say, write a 20,000-word message to John, telling him that I would like to hang out on Saturday afternoon. Make sure it's easy enough to digest so his agent can summarize it into a few bullet points.

• 4:56John Coogan?

  Yeah, ideally just one sentence, want to hang out. Let's see, Ben Thompson broke it down a little bit. He said, first off, note the framing, the PC is old tech with agents. What about new tech uniquely enabled by agents? And note the classic Microsoft hook, could that new tech sit on top of the new platform? So, he says, there was one brief moment in the promotional video that preceded his appearance that made the concept click for him. The problem with wearable devices is the interaction model. They are only useful when you are interacting with them when the human is in the loop. But being in the loop with a wearable is annoying and inefficient. What is being demonstrated here, however, is a brief interaction and then the agent doing work in the background. In other words, the usefulness happens in the cloud without the human needing to be

• 5:41John Coogan?

  involved because an agent is doing work. That's what Ben Thompson finds compelling. On one hand, you can make the case that, of course, Microsoft would be interested in a device model that uses the cloud as a platform, given that Microsoft doesn't control a mobile device like the iPhone. What occurs to Ben Thompson, however, is that even if Microsoft doesn't succeed with Project Solara, this model where the cloud is the hub and multiple devices are the spoke, instead of the phone being at the center is clearly a better one for agents. Agents work best in the cloud and across apps and devices. Yes, the phone might be one of those devices, but when it comes to agents, it shouldn't be the hub because it's too locked down. And he says, again, this is vaporware and it's very much in Microsoft's interest. So, take Project Solara with an appropriate grain of salt.

• 6:25John Coogan?

  It's a vision of the future, however, that does make a lot of sense, particularly in an enterprise scenario where all of the context and compute is already in the cloud and Project Solara is focused on enterprise, not consumer. So, you can mandate effectively that all of your employees carry these as their badges and then they have a sort of like secure on-ramp to their... To their enterprise agents in the cloud that all run in the Microsoft Azure ecosystem, in the Microsoft 365 ecosystem. He says it's also something completely different from the past and Fitz. Ben Thompson's thesis that in the age of AI, thin is in because the compute is so constrained to the data center on device compute is maybe going to happen, but there's a lot that you can do on in the cloud that you can't do locally.

• 7:09John Coogan?

  So just have a very thin client and that that little key card device is basically the thinnest client you can have. It's sole purpose is to just interface. It looks a lot like the Rabbit R1, sort of that form factor, which a lot of people were taking a little victory laps on behalf of the founder of the Rabbit R1, saying he was just a little bit too early because the actual decision to offload all the compute to the cloud, do something useful up there, have a very minimal device that maybe you could take out with you, that could do some basic stuff. But it's always hard because people like the phone. They like being able to just watch a full movie on their phone if they want. And you never know.

• 7:48Jordi Hays?

  Has anybody been running down making a smart AI-enabled cowboy hat?

• 7:53John Coogan?

  That'd be a good one.

• 7:54Jordi Hays?

  Cowboy hat, you potentially have a lot of room up here for onboard some local compute, right? Maybe you could build a Starlink into it.

• 8:03John Coogan?

  I feel like you would not wear the smart cowboy hat, just frying your brain with the Mac mini on your head. You're going to be against that. There's no way you're picking that up.

• 8:13Jordi Hays?

  Underexplored, underexplored hardware platform.

• 8:16John Coogan?

  Anyway, whether you're bullish or bearish on Microsoft, you got to get on public.com. Investing for those who take it seriously. Stocks, options, bonds, crypto, treasures, and more with great customer service. Alex Heath, friend of the show, summed up the embrace of OpenClaw in a post. Scout is what it's called at Microsoft's first proactive AI agent for Copilot. Buried the news that Satya Nadella is fully embracing OpenClaw when Scout is released more widely this summer, really powered by OpenClaw and Microsoft will contribute to its security guardrails back to the project's open source ecosystem. A lot of people that got excited by OpenClaw sort of saw the rough edges, and we saw this

• 8:57John Coogan?

  with the Meta AI, the Instagram account theft that was going on. You can imagine that if you have something that's as powerful as OpenClaw, but still constrained within your Microsoft ecosystem, your all your cloud accounts, you could do things that are useful. Pull together spreadsheets, PowerPoints, databases, all this different stuff, but not run roughshod over everything. And so if you're all in on one walled garden, the walls are actually somewhat safe. I don't know.

• 9:25Jordi Hays?

  Totally.

• 9:25John Coogan?

  So Microsoft getting in bed with OpenClaw makes a lot of sense, says Alex Heath. You only welcome a growing open framework onto your turf when you're confident you can control the ground it stands on. In this case, Microsoft is doing what it does best, being a platform company rather than trying to own too much of the stack. Microsoft also gets to ride the agent wave in a way its main hardware rival won't. Even with OpenClaw's initial buzz driving a surge in Mac mini purchases, it's highly unlikely Apple will create a white glove experience for Microsoft, for OpenClaw, like Microsoft has with Scout. And so, Apple, you know, you're in the Mac

• 10:00Jordi Hays?

  Yeah, one of the, one of the primary beneficiaries, OpenClaw, boom.

• 10:05John Coogan?

  They really did sell out. They really, they really have sold out all over the place, but...

• 10:09Jordi Hays?

  But not going to embrace it. Not, it's just not a...

• 10:12John Coogan?

  They just don't have the enterprise motion necessarily.

• 10:14Jordi Hays?

  Well, that, but also the security, privacy.

• 10:18John Coogan?

  Yeah. But W W C is next week and who knows? Maybe we will see an OpenClaw competitor. Maybe we will see something that's, that's, you know, a great leap forward for Apple in the AI and the Apple Intelligence feature set. I don't know. I, I'm, my predictions are something that are, look a lot more just like, okay, Siri works now. It can do the basic shortcut integrations. It can answer questions at a near frontier level. It's running Gemini under the hood. And so it's probably going to be pretty good at just answering basic questions, doing basic things on your phone. I'm not expecting it to go and like worm its way into every other app like OpenClaw has.

• 10:59John Coogan?

  So there's a few other observations that Alex Heath had from Microsoft Build. Nadella is trying to tamp down the data center backlash. You know it's getting bad out there when a Mag 7 CEO is debunking water usage fears. The quote was, "In fact, the daily water usage over the course of the entire year is roughly equivalent to what a single restaurant would use." So he's giving more context there. The Copilot Super App is not... Ready. Alex Heath showed off what the new autopilot tab with Scout looks like, but it wasn't shown on stage, so that is delayed as it rolls out to become the copilot super app that will sit alongside all of the Microsoft apps. Microsoft is still not at

• 11:42John Coogan?

  the frontier, according to Alex Heath. He says it didn't make a big deal out of the benchmarks for its new family of models. There were other comps, they were comping it to older models from Anthropic and OpenAI. There were some, obviously, some great cost benefit trade offs. It's important to be in the game. Do you have more context on how these models are performing?

• 12:00Speaker 05

  Yeah, I think the interesting comparison here is not with Frontier Labs, but I think with Meta, right? Because they had Muse Spark like pretty recently. And the thinking model, like MAI Thinking One, is actually like quite competitive with Meta, which is interesting, because I feel like I just have not heard that much about the MAI team. Like, obviously, they have Mustafa, and that's kind of like the big name at Microsoft. But like Meta, you hear like the over and over.

• 12:22John Coogan?

  They went through all the coaching, talent, Nat Freeman, Daniel Gross, Alex Wong. You have so many people that have like, you know, have done podcasts, have Aura and have Clout and the industry coming together, not to mention like the actual researchers that they recruited.

• 12:36Speaker 05

  Yeah, so it's interesting that they're actually like, these are pretty solid models. The researchers would actually be more important than.

• 12:42John Coogan?

  Yeah, but in terms of like building hype around whatever you're working on, like Meta has definitely built the aura of MSL and TBD Labs. There's a whole article about Alex Wang and in the Journal or the Financial Times today. We can get to that later. But Alex Heath says, "Agents are the new OS. I'm not sure if an AI access badge with a screen will do it." He's skeptical. Are you putting on the badge?

• 13:08Speaker 05

  I'll throw on the badge.

• 13:09John Coogan?

  I would throw on the badge for a little bit. I wonder how often I would actually reach for it versus a phone. Also, I'm not, although I love PCs and I love Windows for gaming, I don't, I've never been like a, run my whole life in Outlook and Microsoft Teams and all of that. So I feel like I would get 1% of the benefit of that. You got to be all in on that ecosystem.

• 13:32Speaker 05

  Be all in. You got to be pushing your.

• 13:34John Coogan?

  Pushing your chips in. For sure, for sure. Well, we will keep tracking that. What else is going on? Okay, live reading reacting thread from Stokasm. There's a ton to go through on MAI thinking. Was there anything interesting in this thread? Stokasm says, I also have to wonder how much of this report is informed by what they know about IP, OpenAI's IP. So of course, they have access to intellectual property from OpenAI for training, and they have access to the models. But one of the things that kept coming up in this presentation is that Microsoft is sort of touting like a very clean pre-training data set so that you as a company who are using this model can be very confident that it's not going to get you in any trouble down the

• 14:19John Coogan?

  road because if the New York Times doesn't want to be in there, or Harry Potter books don't want to be in there, it's not in there because Microsoft has done all the hard work to sanitize all the training data. And they also made a very big point that they did not distill on another lab, which has been accusations that have been thrown around a bunch. During the Elon Musk OpenAI lawsuit, Elon was on the stand and mentioned that he might have, or XAI folks might have done some distillation on either Anthropic or OpenAI models at one point. And so that was sort of like not the cleanest thing and might lead to problems down the road. Microsoft saying, hey, we're getting out in front of this. There's no distillation involved at all. And then they also launched a lot of features

• 15:04John Coogan?

  for companies to be able to fine tune these models. Slightly different than what Amazon does. Amazon does mid-training. They give you a checkpoint of the pre-training, and then you can add data that is relevant to your business and fine tune it from a mid-training checkpoint. Microsoft is offering more of a reinforcement learning, RLE, post-training step. But all of these lend themselves to, there is a model that has a bunch of great capabilities at the baseline and good price per performance, and it runs on Azure, and they've already optimized this for the systems. And then you can take it. Tweak it, fine tune it, and then you can deploy it on the same hardware and you know it's going to run, you know how much it's going to cost, bur token, you're good to go. But it's going to answer your particular questions, work for your particular business

• 15:49John Coogan?

  a little bit better. At least that is the pitch. That is the hope. We will see what adoption is like. Microsoft clearly has a strong go to market team, strong enterprise sales team. So we will hear how this is being deployed in the near future. Before we bring in our first guest to the show, let me tell you about CrowdStrike.

• 16:05Speaker 06

  No business is AI. No business is security. CrowdStrike secures AI and stops breaches.

• 16:11John Coogan?

  I don't know if you can actually hear that. The filter might be a little bit too much, but anyway, we can deal with that later. We are very, very fortunate to be joined by Mikey from Sounow. Welcome to the show. How are you doing?

• 16:23Mikey Shulman?

  On a massive day.

• 16:24John Coogan?

  He's here live with us in the TVP in Ultronome. Amazing that you can be here. How are you doing?

• 16:29Mikey Shulman?

  I'm doing great. I'm excited to be here. This place is awesome.

• 16:31John Coogan?

  Thank you. Give us the news. What happened today? Hit the gong.

• 16:34Mikey Shulman?

  I hit it.

• 16:35John Coogan?

  Hit the gong. Tell us what happened. And then come back. And then come back and tell us. Whoa. I kind of shakes the entire camera. Anyway. That was by far the strongest hit from a guest. Yeah. A lot of people come in and they don't, they don't want to break the gong. It's almost like you have a bit of practice. It's meant to be.

• 16:54Mikey Shulman?

  You told me to go at it. I went.

• 16:55John Coogan?

  I know. That was perfect. Well, it's a good day for that. That's the new bar. So take us through. Why are we hitting the gong?

• 16:59Mikey Shulman?

  We're hitting a gong. We raised a little over $400 million, announced today. Very exciting. Led by Bond, a history of investing in really category defining consumer businesses, which is really, really cool. Lots of new investors joining, all of our old investors participating. So really, really excited about that.

• 17:18John Coogan?

  IBP, Forerunner, Union Square, Matrix, Quiet, Lightspeed, Menlo. Wow. Murderers Row. Good job. What unlocked this round? Why do this round? Are you spending a ton on inference? Are you spending a ton on training? Is there a huge cost? Or is there just so much traction that that unlocked the round? Like, what's the thesis?

• 17:35Mikey Shulman?

  Really, really more the latter. There's been a ton of traction and a ton of actually progress since the last time I was on. And so just to zoom out here.

• 17:46John Coogan?

  Where is the company right now in terms of the products?

• 17:49Mikey Shulman?

  So. Every time we release new products, we release new models. More people come to the product, but more people stick around. And so the engagement metrics that we track, let's say it's usage retention, what fraction of our users come three or more days a week, session time, all of these are getting really, really good. All of these are up like about 50% in the last six months, which is huge. And this is just like constant, making the product better, making more people fall in love with being creative. And so it's been incredible to see. And yeah, it's like a lot of hard work from the team, but it's really paying off.

• 18:22John Coogan?

  What is the North Star metric on retention? Like DAO, monthly churn? Like, how are you thinking about actually like, what is the correct metric to measure for your particular business?

• 18:33Mikey Shulman?

  You know, yeah, different businesses are going to be different. We like, we like retention. I think all of these are kind of very, very similar. The thing that's like really important here is just to remember, yeah, like revenue is a trailing metric for how good is your product? And retention is really the best way to think about, people are coming to my product over and over again. They're falling in love with it. There's no real hacking that, basically.

• 18:57John Coogan?

  Yeah. And are you early, are you, are you far enough along to see like smiling curves in the retention?

• 19:03Mikey Shulman?

  Yeah, for sure. So it's been, it's been really exciting. So there's also there's two retentions, there's usage retention, there's paid retention. So remember, we have a pretty generous free tier. And so our free users are also still coming back over and over again. And so all signs point to, I think the thing that we've thought about for a long time, which is everybody's creative, everybody will enjoy being creative if we can make the experience right for them. And we've known this deep down because when you demo the product for somebody, you take out your phone and you guide them through having that magical moment, their eyes light up. And so it's really around, how do we let people do that themselves and really feel creative by themselves?

• 19:36John Coogan?

  Walk me through the paid tier philosophy. Single tier, how, like, do you have, like, are you thinking or do you already have like ultimate pro plans? Where someone can spend a lot of money if they're using this as like more of a prosumer tool? Enterprise, like how, how striated is the, is the monetization at this point?

• 19:59Mikey Shulman?

  It's a great question. I think the short answer is we haven't really changed our pricing all that much in a long time. And so it might not even be appropriate. But what we have now is there's a free tier, there's a $10 a month tier, there's a $30 a month tier. A $30 a month tier gets you not only more usage, but some different power features.

• 20:15John Coogan?

  Yep.

• 20:16Mikey Shulman?

  And then You know, AI is this weird thing, doesn't really fit neatly into SaaS pricing. And so a lot of sub companies are trying different things. A lot like everyone else, when you reach your cap, you can buy overages. And so we've got lots of people who they spend hours and hours a day on it and they hit their caps and they keep paying for more.

• 20:34John Coogan?

  Yeah, it's such a weird dynamic in the modern era where you will have customers that are effectively gross margin negative potentially, depending on exactly where you set the thresholds. And then you will have customers that are, they want the best product, they're happy to pay, but they come once a month with something and they're probably much higher gross margin. And there's just this blend because we're in this like, you know, real marginal cost era, no longer the zero marginal cost era.

• 20:59Mikey Shulman?

  You know, a few things there, like actually our margins are pretty okay. And music models are small.

• 21:03John Coogan?

  Yeah.

• 21:03Mikey Shulman?

  And so it's not really the same cost structure. But the other thing is, it's really interesting. There's not really a lot of consumer businesses being built right now, and certainly not a lot of consumer entertainment businesses being built right now. And there's a real different, I think, interaction that the average user has when I'm sitting down at cowork and my boss is paying for it. And so I don't really think or care about how much money this is costing me. And when you're building for consumer entertainment and you're paying for it and it's not for doing a task, it's actually for enjoying yourself, you actually do think a lot about it. And so A, it makes our jobs harder, we actually have to deliver more. But B, you want to make sure that you provide the right experience where you're not constantly thinking about, oh gosh, how many credits do I have left before I hit paywall?

• 21:46John Coogan?

  If Ben Thompson were here, he'd probably ask you about advertising. I feel like consumers want to be entertained, they don't necessarily want to be productive. It's very hard to get consumers to pay at scale. Obviously, the AI era is like a big narrative violation of that because there's tens of millions of consumers that are paying for AI tools across the entire industry. But there does seem to be a limit to how many consumers will pay even $10 a month. Are you thinking about trading credits while you're waiting for a song to generate ads? How are you thinking about that?

• 22:22Mikey Shulman?

  We're not thinking at that scale yet. I actually kind of disagree with Ben here.

• 22:26John Coogan?

  Okay.

• 22:26Mikey Shulman?

  I mean, he's awesome. He's brilliant, but I just, I just think about like 800 million people about streaming music. A little less than half of them pay for it. That's actually a lot of people. Like 300 million people pay for streaming music. That's a lot.

• 22:41John Coogan?

  Yeah. I just think that like the history here.

• 22:43Jordi Hays?

  So there's billions and billions of people that don't listen to music online whatsoever? Is it really only 800 million?

• 22:51Mikey Shulman?

  Accounts.

• 22:52Jordi Hays?

  Or is that like accounts on Spotify that does maybe count YouTube?

• 22:56Mikey Shulman?

  That's, to my knowledge, that's like Spotify, YouTube, Apple, and maybe like five others.

• 23:00John Coogan?

  There's like a billion vinyl record DOUs now.

• 23:04Mikey Shulman?

  Vinyl's gonna make a big comeback. And I mean, I think as we change the place of music and culture, as the product gets better, we change the place that music has in culture, we see these creative moments happening. And so you see them digitally now, where maybe you saw the Puerto Rico song.

• 23:18John Coogan?

  Yeah.

• 23:18Mikey Shulman?

  Saw an amazing creative trend where people are making like their cringey text messages into songs, make it viral on TikTok. And I think you'll start to see that penetrate actually the IRL world as well. And so I, I'm long vinyl.

• 23:30John Coogan?

  Yeah.

• 23:32Jordi Hays?

  I was talking to someone who wanted a job at Cino, and they were, they were asking me what I thought about the business. And obviously, I've been bullish for a long time, like this new entertainment form factor. People love the product. You guys have real revenue. You're growing really quickly. The, my unsophisticated view was that, I told the person, I can easily imagine this as like a $10 billion company. It's hard for me to see the world in which this is a $100 billion company. Why am I, why am I wrong? I know you're insanely ambitious. You're not gonna, you're not gonna 2X from here and then be like, job's done, everybody.

• 24:12Mikey Shulman?

  No, the job, the job's not done. I think, this is one of those things, actually. I think you've just been hanging around investors too much, you know, which is the thing that, you know, you have to be right for a long time while, while a lot of people are wrong. And the thing is, every, every revenue scale we hit, every usage scale we hit, the question is like, but how many people really want to create? And that was, we got those questions at $100,000 in revenue. We get those questions at $100 million in revenue. And The lived experience we have playing with the product with people, but also the metrics and looking at our growth curves and seeing that every time we make the product better, yes, things inflect up, but we appeal to a broader and broader audience. And so I feel very

• 24:48Jordi Hays?

  Yeah, I mean, the same, the same thing would have been said with early creative tools on the internet.

• 24:54Mikey Shulman?

  Absolutely.

• 24:55Jordi Hays?

  Was, you know, how big, you know, with Figma was always how big could Figma be? You know, there's only so many designers, professional designers, then of course, like the rest of the organization, same thing with, with Canva. I'm sure a lot of people passed early on because they just thought like, yeah, there's just not that many people relatively that, that do design. And then of course, like you make the tools more accessible. And, and so, so anyways.

• 25:18Mikey Shulman?

  So, yeah. And so there's a couple of things here. One is, I think actually we'll have a very large fraction of those 300 million subscribers to streaming also subscribe to Suno in the long run. But the other thing that's amazing is that for the first time in a long time in music, there's innovation on the end user experience. And so you can have something where there are multiple products out there. Like right now, the end user experiences for music all look the same. They all look like a, a streaming provider, right? It's just like, I have all of the world's music living on my phone and I can listen to it and that's it. In the future, when you can do more things and play with it, you probably subscribe to multiple video games. You probably subscribe to multiple video streaming platforms. Why can't you subscribe to multiple music things? And I think the answer is in 10 years you will.

• 26:00John Coogan?

  Yeah.

• 26:01Jordi Hays?

  Do you think Apple would ever make a play in this space?

• 26:04Mikey Shulman?

  I think lots of people are going to make plays in this space. It's almost validating to see that people finally think of music as a growth area again. And so, but again, I think that there's so much room for innovation here. There's so much green field to build upon that I'm actually really excited.

• 26:20Jordi Hays?

  Yeah.

• 26:20John Coogan?

  Can you take me through the story of the Puerto Rico song? What happened there? Like, what were the key inflection points?

• 26:27Mikey Shulman?

  I don't, I, I don't know is the answer. You know, this is like a song from a creator and, and it hits the right cultural moment and the right vibe. And, and I don't want to say it's a good song or it's a bad song, but it is a platform where so many people can be creative on top of it. And that is really fulfilling to see. And that stuff that it's like new use cases for music that haven't been around for a minute.

• 26:47Jordi Hays?

  Is AI music becoming less controversial? Or are there still people discovering it and getting angry? Because I could imagine there was a wave over the last Two years where people were like, wait, they're making music with AI. This is a, this is meant to be a human creative pursuit or whatever criticisms they've, they've thrown at it. But I imagine over time, people start to realize that these are fun entertainment products and tools and before you form an opinion, you should just try using it and form an opinion based on your experience, not, you know, internet comments or things like that. But my expectation is that it will actually become less controversial year over year as it sort of normalizes.

• 27:30Mikey Shulman?

  It is definitely becoming less controversial. There are still plenty of people who have preformed opinions and then, you know, actually playing with the product is the best way to change their minds. The thing that has become apparent in the music industry is that so many people are using it without talking about it. And as people realize that everybody knows that everybody knows, it certainly normalizes there. And then as a consumer, either when you play with the product and you realize how fun it is, or when you realize, actually, there's some AI music in the music that I love, all of a sudden, you're not so anti-AI. I think this is a lot like people being anti-AI and then they realize that ChatGPT can help them with their homework and they kind of soften a little bit.

• 28:07John Coogan?

  Yeah, as a useful tool, I mean, Martin Scorsese came out yesterday in a Black Forest Labs video, talking about the value of AI in the filmmaking process. But the video demos, we'll watch it later on the show, but it, it demos sort of like a pre-visualization step, almost like a storyboarding step. He's describing this Alpine town and it's generating visuals for him. He's not taking it end to end. Of course, that, that, that's happening more and more, but, but he, I, I think having a filmmaker like Scorsese kind of step up and say like, yeah, this is useful. I can see this working.

• 28:43Mikey Shulman?

  Absolutely. There's an analog in music, actually, which is that you'll have songwriters make beautiful songs and instead of making demos for an artist, they can make low fidelity songs, like low fidelity productions, which are demos with Suno so much easier.

• 28:56John Coogan?

  Yeah.

• 28:57Mikey Shulman?

  And it will get ripped out and produced. Without AI or with minimal AI when it's produced for the last time.

• 29:03Jordi Hays?

  Yeah. But do you think there's still an opportunity for major artists to be a first mover in the space? We were talking, I think, a mutual friend of the three of us, and I was telling him, he loves Suno. He uses it all the time. And I was telling him, like, why don't you just be the first one to take like a proper leap and do this? And like, the first person that goes and says like, hey, this is okay. It's not so scary. I used it in the creative process. We still use a bunch of, you know, traditional producers, singers, songwriters, et cetera. I think that person will get a lot of like credit and potentially, you know, a lot of attention.

• 29:43Jordi Hays?

  It will obviously be polarizing, but then the fourth, fifth, sixth mover won't really get any potential benefit. It'll just be normalized by that point.

• 29:53Mikey Shulman?

  I think that's totally possible. Like, we've, you know, there are people, there are a few people who are outspoken about it, but I don't know if we've had like the moment yet.

• 30:01Jordi Hays?

  I want like the project.

• 30:02Mikey Shulman?

  Yeah.

• 30:02Jordi Hays?

  Somebody has to make like a hit record.

• 30:05Mikey Shulman?

  There have been, I think what you're gonna-

• 30:07Jordi Hays?

  And they have to, they have to go out and say, they have to be just very upfront. And I, what I want is them to document the whole process. Like, I want a video camera.

• 30:16Mikey Shulman?

  How much is enough Suno in there, actually?

• 30:18Jordi Hays?

  It, that's, that's the whole point. It's like, like, a guitar might have only been like one little riff in a song, and it could have been some, originally, like, somebody recorded it on their phone, and then they brought it into the studio, and then like, maybe it got transformed- Or they're using electronic drum hands. Yeah, exactly. And so to me, to me, there just needs to be, it's, it's always gonna be a spectrum, right? There's gonna be songs that are heavily Suno, but I would expect for like major artists, even if like the original kind of idea or some element of the song was made on Suno, like you said, it'll just get transformed and adapted and evolved. And so I think it's just positioning it as not like a replacement for anything,

• 31:02Jordi Hays?

  but another kind of individual artist in the room, another instrument in the room that's contributing to the project.

• 31:10Mikey Shulman?

  Here's how I think of it. We, we, we haven't hit that moment, but at some point, somebody will really- Document and celebrate the use of these tools in making things like we're already in a lot of very popular music, but at some point, somebody will really do that actually proactively, and that will be a huge cultural moment. And then the next amazing cultural moment will be an artist releases an album that is meant to be sunoed by their fans.

• 31:33John Coogan?

  Yeah.

• 31:34Mikey Shulman?

  And this is the new format. This is the thing that will pull people in that deepens the artist fan connection. And that will be a very, very important moment.

• 31:42John Coogan?

  How spiky is Suno's intelligence? I want to know about the training process.

• 31:49Mikey Shulman?

  And we know you have to leave, so final, final question.

• 31:51John Coogan?

  Maybe this is the last question. But the, there's this like famous story about, I think Andre Karpathy told it about like GPT-4, 4.1, some iteration where at a certain checkpoint, it was terrible at chess. And then all of the AI researchers just were really interested in chess. And they were like, there's no reason it should be bad at chess. And so they added a bunch of chess training data. And then all of a sudden, the models got pretty good at chess. And it seems like we're in this spiky intelligence race where coding is really valuable. There's a lot of money there. So the models are getting better at coding. But if you look at the models, like, it doesn't really feel like they're getting that much better at copywriting right now, because that's not where the boom is. They're getting

• 32:33John Coogan?

  really good at coding. And I'm wondering if you're seeing like, okay, there's an opportunity for us to nail jazz in the next iteration, or us to nail EDM in this iteration. Like, is it, is like, what fingerprints is the team leaving on the model versus just, we're scaling up and it's getting better at everything and there's surprises and it's very indeterminate?

• 32:53Mikey Shulman?

  We actually try not to leave our fingerprints on it. And we have a, like, the approach is, we should not be the arbiters of good and bad music, you know, like a file corrupt or low quality sound recording. But like, you can go and you can listen to a song that has 10,000 YouTube plays or 10 million YouTube plays, and you won't actually be able to tell the difference. And so we should not be the arbiters of that. The thing that's different here also is that.

• 33:18Mikey Shulman?

  In the chess and the coding examples, there are objective right answers and that's why the models are so good at getting spiky there.

• 33:23John Coogan?

  Yeah.

• 33:24Mikey Shulman?

  Music has no right answers.

• 33:25John Coogan?

  Yeah, there's no verified rewards.

• 33:27Mikey Shulman?

  Not at all. Yeah, and so all of those techniques actually don't work.

• 33:31John Coogan?

  Yeah, you can't do RLVR.

• 33:32Mikey Shulman?

  So we're actually in the regime where it's much less spiky and actually when we find a hole, an anti-spike, then we actually try to fill that in.

• 33:38John Coogan?

  Okay.

• 33:38Mikey Shulman?

  Like, it's not like we're amazing at jazz. It's like, you suck at jazz or you suck at country and now we have to go and figure that one out.

• 33:43John Coogan?

  Okay, last question, we'll let you get out of here. What about adding on to the viral fuel when I hear about turn your text messages into a Suno song? I think, why can't I just screenshot my text messages and then you edit the video for me and I get a viral format? That feels like very tool UC, very like, each video format's gonna be a whole process for you. It's gonna be hard to like one-shot the full end-to-end, but what do you think about that?

• 34:11Jordi Hays?

  I want, personally, I want the Slack integration. I want a Suno song at the end of each day.

• 34:16John Coogan?

  Yeah, why weren't you on the stage at Microsoft Build?

• 34:18Jordi Hays?

  I want my, I want the workday at the office summarized.

• 34:22John Coogan?

  You want a workday integration?

• 34:23Jordi Hays?

  No, I want, I want the Slack summarized and I want to be able to listen to an hour-long song on my drive home about what's happening at work.

• 34:30Mikey Shulman?

  We'll try, we'll try to make that happen. We're not doing a workday integration, but I will say, the thing that's amazing is actually, this is a platform where people are creative on top of it.

• 34:37John Coogan?

  Of course.

• 34:37Mikey Shulman?

  And so we're not gonna come up with the right cringey text message videos. Like, somebody is gonna do that.

• 34:42John Coogan?

  Well, that's a challenge for you at home. Go make the cringey text message. Go make the workday integration. Prove Mikey wrong. He says he won't build it. You can. You can go and build, you can go and build the workday integration yourself.

• 34:58Jordi Hays?

  Imagine keeping, imagine keeping up at work.

• 35:02John Coogan?

  Yeah.

• 35:03Jordi Hays?

  Through music, John.

• 35:04John Coogan?

  It'd be fantastic.

• 35:04Jordi Hays?

  What's more powerful than that?

• 35:05John Coogan?

  You know what's more powerful than that? Console.com.

• 35:09John Coogan?

  Console builds AI agents that automate 70% of IT, HR, and finance support. Giving employees instant resolution for access requests and password resets. So, uh, we can talk about, uh, the, uh, there, there's a bunch of funny posts in the time and we gotta go through. Before our next guest, uh, Samir from Colin Samir joins us to talk about Hollywood. Uh, you can tell when a coworker got nothing going on outside of work. Why did it? Why is that in here? 220,000 people like this.

• 35:38Jordi Hays?

  Is are you, is this, did you put this in to kind of sub tweet me, Tyler? I didn't, I didn't send this in. The team, uh, the team always asks Monday morning, what did you do this weekend?

• 35:49John Coogan?

  Always have the same answer. 6 million views. Uh, anyway, uh, there's some news on the timeline about GOP rep in Michigan Senate candidate, Mike Rogers. There's an actual photo from the campaign trail and then a photo put out by the staffer. Let's compare these. Uh, it's one of those, can you tell, can you spot the differences video? They made him a little bit bulkier. They, they just added just a couple pounds of muscle.

• 36:14Jordi Hays?

  Just a couple.

• 36:15John Coogan?

  No, he looks huge in this, in this photo.

• 36:19Jordi Hays?

  I mean, he looks like he's ready for the Olympia.

• 36:22John Coogan?

  Yeah. Uh, I don't think they went for far enough, so I, I took it upon myself to generate a, an even more accurate photo. We can pull up, uh, because I think this is what he should look like. I think I, like, if you're gonna AI your photos, just go full, just go all the way.

• 36:36Jordi Hays?

  Stringer.

• 36:37John Coogan?

  Yeah, get yourself in the stringer and make sure you're looking like you walked off of the Olympia stage.

• 36:43Jordi Hays?

  And still claim natural.

• 36:44John Coogan?

  Absolute mass, uh, absolute mass monster. Yeah, you can.

• 36:47Jordi Hays?

  Typical politician thing to do would be to claim natural.

• 36:50John Coogan?

  I'm not performance testing drugs. I just run every single photo through images too and chat GPT. Um, people are having fun. It was funny. I thought I was so original for doing this, but if you scroll down the comments, uh, everyone had the same idea and made him way, way more jacked. If you scroll down, there's 25 others and there are some.

• 37:07Jordi Hays?

  Enhanced, uh, politics. Jack says the enhanced Senate.

• 37:11John Coogan?

  Yeah, there are some that are absolutely crazy here. The enhanced said it. Okay, we got a debate on our hands. We got a debate on our hands. So Philip Johnston, friend of the show, founder of Star Cloud, says, founders, before you go out and raise, ask all the best AI models this. Play the role of a venture capitalist and give each startup in the XYZ category of your startup space a ranking from one to 10 on how much they would want to invest in them with one don't want to invest at all and 10 desperately want to invest. Do deep research and give reasons. All the VCs are doing some version of this. He's claiming that the VCs are just AI psychosis, letting AI do their job. Maybe it's true. We don't know. Maybe it's but advice for founders. He says, all the VCs are

• 37:56John Coogan?

  doing some version of this. And if you're not at the top of the list, you're going to have problems. So it might make sense to delay the raise until you can get closer to the top. So if if the frontier models don't approve your startup pitch, take go back to the drawing board, build a little bit more before you go out on that fundraising journey. Seth Bannon at 50 years says, founders, do not listen to this. You should in no way time your raise based on how an LLM ranks you. The best VCs are not sitting around asking AI, who should I invest in? And then doing that? Well, that's a different question. Are you trying to raise? Or are you trying to raise from the best VCs? These are two different things.

• 38:28Jordi Hays?

  Yeah, I think the LLM would would do a pretty good job of figuring out like the relative interest and excitement, right? You can look at you could if an agent was running a pretty interesting metric is like, you know, headcount growth on LinkedIn, right? Are people leaving? You know, how many people are leaving the company? Yeah, all these things. So I actually think it has has this fund. Has this fund's competitor done another deal and they're excluded from and that competitor is excluded from your round, but they're looking for something

• 39:07Jordi Hays?

  in the category. Also, also, you know, pedigree, right? This is whether you like it or not, a big factor in especially like king making right now. So if you're in a category. And you're you're a smart individ talented individual, but you're you're at the seed stage and then there's another

• 39:28John Coogan?

  Did you talk about the pet food company, Pedigree Pet Foods?

• 39:31Jordi Hays?

  No.

• 39:32John Coogan?

  That's what I know of.

• 39:34John Coogan?

  Dog food and treats.

• 39:35Jordi Hays?

  And you have another company, your same stage, where, you know, all three founders just came out of SpaceX after being there for 10 years and you're both competing,

• 39:46John Coogan?

  Yeah.

• 39:46Jordi Hays?

  you know, in some adjacent category, right? Like, I actually think the model is going to do a pretty good job and say like, hey, VCs, very likely, might be, you know, three times more excited to invest in

• 40:00John Coogan?

  Yeah.

• 40:00Jordi Hays?

  this team than you. And and that is just, that's just reality.

• 40:04John Coogan?

  Okay, so Philip Johnson says, I'm glad I provoked, I'm glad I provoked a reaction. This will age badly over the coming few years. He's saying Seth is wrong. He says, also, I'm not talking about timing arrays based on AI opinion. I'm talking about actually improving your startup, get more customers, for example, which will at some point be picked up in the AI rankings, which is a lot of what you were getting at. So I guess the question is, should you delay a raise based on AI opinion? And would you actually listen to a clanker tell you how your business is doing? Or are you going to say, I know better? What do you think? I, I, I, I think you're arguing it's a good source of feedback.

• 40:49John Coogan?

  It's worthwhile. But at the same time, I can't see you doing this. I can't see you actually going to a model and being like, yeah, they're right. I am washed. No way. No way. Zero shot.

• 41:01Jordi Hays?

  I think, I think when I was, I think I was, I, I think that earlier in my, a decade ago, this actually would have been super helpful.

• 41:10John Coogan?

  Yeah.

• 41:11Jordi Hays?

  Because I wasn't fully aware of all the different factors that made, that went into, that went into making a company.

• 41:17John Coogan?

  This is a good point. Yeah.

• 41:18Jordi Hays?

  So I talked to a founder.

• 41:19John Coogan?

  Early on, early on, I, like, there was like a checklist from zero to one.

• 41:22Jordi Hays?

  Yeah.

• 41:22John Coogan?

  Peter Thiel, zero to one, you, and you could go through it and say like, okay, do I have defensibility? Am I building something that will have staying power? How many of these boxes do I check? Because when I go out to raise, a lot of the VCs are going to be thinking the same thing. It's worthwhile and and an AI can sort of help you do that checklist. So that's valuable.

• 41:40Jordi Hays?

  Another, another thing I was talking, I, I

• 41:42John Coogan?

  I don't think you're taking no for an answer.

• 41:43Jordi Hays?

  An LM, a smart enough model would be able to do this.

• 41:49Jordi Hays?

  If it was trained on enough VC blog posts, maybe, which certainly I think some are quite well-trained on PG's blog and others. But I was talking to a founder yesterday, two-year-old company has gone through a pivot, figured out a much more interesting opportunity than they originally started with, have a bunch of pilots, a lot of positive momentum, revenue is growing, but I had to tell the founder, like, "Look, you are the VCs that you're going to talk to, if you got to raise right now, are talking to companies that are adding what the revenue you will add in the next year, they're going to add it in the next 30 days." So even though you have a super exciting opportunity, it's going to be really

• 42:33Jordi Hays?

  hard to invest right now, just because they have a limited amount of capital, they want to be making bets against oftentimes momentum. And that's just the game.

• 42:44John Coogan?

  Yeah, and a really, really good model, a really good model could say, "Look, your startup is very mid, you don't even bother pitching founders fund, top-tier firms, but I got some guys who, they got crazy ASI psychosis right now, they'd love to invest. So you should definitely DM this person, because he's been posting crazy slop on the timeline, non-stop, and they're just ripping checks at anything. And so you fit that category. So go get the bag from them. This is possible. This is possible with superintelligence." Anyway, our next guest is in the waiting room. But first, let me tell you about the New York Stock Exchange. Want to change the world, raise capital at the New York Stock Exchange.

• 43:25John Coogan?

  And we are very lucky to be joined by Samir from Kyle and Samir in the TVP and LTR. How are you doing?

• 43:34Jordi Hays?

  Our cabin in the woods.

• 43:35John Coogan?

  That's right. It's been ages. It's been too long. I missed you. Want to see the view? Yes, I want to see the view.

• 43:41Jordi Hays?

  There we go.

• 43:42John Coogan?

  This looks amazing.

• 43:43Jordi Hays?

  Take me home. Take me home.

• 43:45John Coogan?

  How off the record is this conference? Can you describe what you're actually doing?

• 43:49Samir Chaudry?

  Never. Whenever you come to Montana, you can't tell anyone.

• 43:52John Coogan?

  Yeah.

• 43:52Samir Chaudry?

  I mean, I did, I did just tell you I'm in Montana, but no, I'm actually.

• 43:56John Coogan?

  GeoGasser knows exactly where you are.

• 43:58Jordi Hays?

  Yeah, it's over for you.

• 43:59John Coogan?

  GeoRainbow on next and we'll dox you fully.

• 44:03Jordi Hays?

  What happens in the woods stays in the woods.

• 44:05John Coogan?

  I imagine, I imagine you're, you're there for good reason. Hopefully there's been someone there that has provided more context on a story that we've been hunting around.

• 44:16Jordi Hays?

  First, thank you again for hosting us at your event last week.

• 44:19John Coogan?

  Press published LA was fantastic.

• 44:21Samir Chaudry?

  Dude.

• 44:22Jordi Hays?

  Incredible execution.

• 44:24Samir Chaudry?

  Thank you guys for coming. Also extremely relevant weekend, you know, to, to have that event. I mean, we knew Backrooms was coming out the next day, but obviously we'll get into that.

• 44:35John Coogan?

  Yeah.

• 44:35Samir Chaudry?

  What, what a time for Hollywood and creators.

• 44:37John Coogan?

  Yeah, yeah. And yeah, it was funny because I was telling you, oh yeah, the Markiplier story is so cool. And you're like, I just talked to him on the stage.

• 44:44Samir Chaudry?

  Yeah.

• 44:45John Coogan?

  And so obviously you've been tracking this for basically your entire career. You've seen this coming, but has it felt overdue to you? Ben Thompson was taking a victory lap, saying he sort of predicted this in 2017. It's been a decade and it feels like this intersection of YouTube and Hollywood. It's been very combative, but my, my takeaway is that this feels like the first moment when we're seeing glimmers of real cooperation between the two separate communities and a way that, that traditional Hollywood can work with YouTubers in a way that's mutually beneficial within the current system. But how are you processing this? How overdue is this? Like, how have you been processing the current moment?

• 45:25Samir Chaudry?

  I don't know if it's overdue or if it's just happening as it's unfolding, like in, in real time where, you know, Kane, when I started on YouTube, Kane was five years old. So like, you know, these are internet native filmmakers.

• 45:38John Coogan?

  Yeah.

• 45:39Samir Chaudry?

  And, and I think there's three reasons why it's happening right now. You know, what, one really important thing when we think about Backrooms is Backrooms, you guys talked about this. Backrooms started as a four chan image that then became like a collaborative story. I think the reality is, is Gen Z IP is not legacy IP like the Mandalorian. It's IP that is collaboratively created on the internet. So Backrooms feels like something that everybody on the internet had a hand in creating, right? Or millions and millions of people on the internet had a hand in creating. So when that comes out in theaters. I want a thing that I had a hand in. Yeah. I, I, I think the other thing is that cutting your teeth as an internet filmmaker, it teaches you a lot about how to earn attention.

• 46:23Samir Chaudry?

  Currie Barker, the director of, of Obsession, talked about this in an interview. They said, what did YouTube teach you about directing movies? He said, um, the reality is when you make something for the internet, the audience is begging and you have to convince them to stay. And I think historically in Hollywood, there's been an entitlement of, hey, we have George Clooney in the movie. We spent a lot on marketing. You're going to buy a ticket and you're just going to sit and enjoy it. But I think internet filmmakers know when you're making something for YouTube that like the audience can click away at any moment to something more interesting. So I better tell you a, a great story that's unfolding frame by frame. Yeah. I think the third thing is. Third thing, because I know we both, we all love lists. Uh, and the third thing will blow your mind, by the way.

• 47:06Jordi Hays?

  It'll shock you. It'll shock you.

• 47:09Samir Chaudry?

  The third thing is that Hollywood talent is, I actually think like the linchpin in this moment in time, that there's a lot of talent that's available that are like crafts people in Hollywood who have focused on specific crafts, whether those are DPs or, um, screenwriters.

• 47:24Jordi Hays?

  Or set design.

• 47:26Samir Chaudry?

  Or set designers, like when that is paired with the acumen of internet storytelling, it's, it's, it's proven to be very powerful. So I, I think there's been this like narrative, of course Hollywood is dying. Uh, but I think it just looks very different now. Like, we didn't know theaters were available. Like Markiplier put his movie himself, he picked up the phone and put his movie in 4,600 theaters. Theaters are available and they're, they're great. Um, you know, like Hollywood talent is available. They don't have other jobs and they're great. So I think these worlds finally coming together, um, there's, there's been a lot that's happened, but it's, it's super exciting to see. Yeah.

• 48:03Jordi Hays?

  Yeah, I look at it as like the last 15 years has been a story. There was collaboration happening. But it was overwhelmingly a disruption story. You look at the market cap, the value creation of the platforms, you know, the YouTube's, the Instagrams, et cetera. How much, how much, the explosion of enterprise value in these new platforms, the overall reduction in EV in some of these sort of like more legacy entertainment.

• 48:33John Coogan?

  Sure.

• 48:33Jordi Hays?

  But now we're meeting at a point where there can, both sides can say like, hey, we've, now is the opportunity to figure out how to both win because clearly there's a place for both, right? We still, we still want to see the, I mean, I don't, but John would like to see that the blockbuster.

• 48:51John Coogan?

  Jordy's gonna see movies. You're gonna see, this is gonna be the tipping point because you were never a movie guy, but once the new creators, once there's a wombo film and a whole cinematic universe around Professor Sendy, you're gonna be.

• 49:03Jordi Hays?

  I'll be there.

• 49:04John Coogan?

  Insane.

• 49:05Jordi Hays?

  But, uh, but yeah, so, so this is the moment where I think the, I, I expect digital platforms to consume more and more and more and more attention. That just seems to be, they're frictionless, right? They're free, they're available everywhere, but now is the moment of, hey, both sides should be, you know, actively trying to do more and more stuff together.

• 49:28Samir Chaudry?

  Yeah, the reality is also, it's important to note that this has all happened in horror, right? And this has happened once before with the Rocket Rocket Brothers, you know, signing with A24 and making Talk to Me for about four million bucks that ended up making just about a hundred million. These are outsized returns, like Curry Barker making something for a million dollars. You know, Obsession was made for about a million dollars. Focus purchased it for around 15 million and then generating 148 million dollars not even a month in is absolutely insane. And so horror has historically been cheaper to produce, right? If you even remember in the nineties, The Blair Witch Project was like this cheap indie horror movie that ended up exploding. And I think, um,

• 50:10Samir Chaudry?

  There's something to explore about like the absurdity of horror and the absurdity of these movies and the absurdity of our world right now. And maybe the comfort in going to see something that is more absurd than the world around you. That's just a hypothesis I have around, you know, horror, but horror has historically been cheap to make. I think we're about to see every agent in Hollywood ping their creator talents and say, "Do you have a horror script? Because it is that moment that's going to happen." There will be likely an overreaction, you know, to this in Hollywood. But I do think like what was proven over this past month is that internet native storytellers can tell a story that reaches millions of people, that fills theaters, and potentially

• 50:53Samir Chaudry?

  better than, you know, the storytellers that cost you in the hundreds of millions of dollars. The Mandalorian cost $265 million all in, and it's made $247 million right now. So it's like, it's super hard to make a big blockbuster movie like that. And, you know, even Markiplier making something like he made independently for under $5 million, you know, is pretty incredible.

• 51:18John Coogan?

  Okay, talk about the state of horror on YouTube or fiction on YouTube. It's somewhat interesting to me that I would put Backrooms, like the actual content, as it's horror and the movie is a direct adaptation of that. The original Backroom series on YouTube is creepy. But Obsession, Currie Barker, that was comedy. And Markiplier was horror, but video gaming. He wasn't creating the fiction himself. And so I'm wondering about how, if we will see a shift, does this give, basically, does this give YouTubers permission to do things that are more fiction-based versus explainer videos, podcast interviews, reactions, commentary, which is like the bread and butter of most

• 52:02John Coogan?

  YouTube comedy as well? Or will we see more people pulling, "Okay, this person's talented, but horror is ROI positive, so we should just give them a crack at this, even though they're a commentary channel," as opposed to someone coming through, "Okay, they've been telling love stories in a fictional context. They have a rom-com series on YouTube. Let them make a rom-com."

• 52:28Samir Chaudry?

  I think animation will be the other space outside of horror and it's already happening. The Amazing Digital Circus is a great example from an animation studio called Glitch. You know, their first few episodes crossed half a billion views of Amazing Digital Circus. They didn't know that was gonna happen, but it did and a community, you know, gathered around them. I think horror and animation and anything video game adjacent works really well on YouTube. I think some of the other stuff is harder. I think that stuff may emerge more on like Instagram and TikTok. And whether it can be adapted into feature-length stuff, I think will be up for debate. But I do think both things will happen. I think YouTube will be looked at now as a real incubator of IP and a real incubator of talent.

• 53:14Samir Chaudry?

  And I think that's always been like a concept, but it was never like, like I think when you meet with Hollywood execs, they're like, yeah, but we can't make any money off of it, right? Like, yeah, they can make money through brand deals and a couple million bucks here and there, but like, we can't make real money. These movies have proved you can make real money. And so I think that's where both things will be true. I think creators who upload to the platform and, you know, incubate IP. Backrooms was found by a 27-year-old, you know, basically staffer who was just poking around and seeing what was going on on YouTube and Reddit. I think that will be like, everybody will have a young person just perusing Reddit and YouTube to go, what's catching? And I think if I was giving advice to those people, I would say,

• 53:58Samir Chaudry?

  really take a hard look at Reddit and see where things are being built in real time by big communities. Another great example of this is like in the Minecraft community years and years ago, the Dream SMP.

• 54:10John Coogan?

  Yeah.

• 54:10Samir Chaudry?

  Was this like collaborative Minecraft story that had so much lore to it that a bunch of people were involved in. So I think the reason why video games is such a right place for IP to build is because it's interactive storytelling and interactive world building that a lot of people are involved in.

• 54:26John Coogan?

  Yeah.

• 54:26Samir Chaudry?

  And that then, more than just a like large audience, that guarantees like a mobile audience because they're invested in it.

• 54:34John Coogan?

  And then there's, there's red versus blue with Halo and GTA. ARP like there are rich sources and it's interesting. There's been so many video game adaptation flops. Basically Detective Pikachu is the only one I think that has a Metacritic score above eighty. Last of Us did well, so it feels like we're hitting a tipping point there. But you go back to the original like Doom adaptation, a lot of the Resident Evil films. Some of them made money, but none of them were critically acclaimed or really became like cultural moments in the way the video games did. But if you have a creator who actually really deeply understands the community, the content, the lore, and then they build their audience on top of the IP,

• 55:15John Coogan?

  potentially some of these video game companies that are maybe not as internet, not as like, not as linear storytelling native. If they have someone in the mix who's already sort of pre-vetted, this can work as a two-hour film, then they can unleash them, turn them loose. But of course, it's an IP negotiation.

• 55:33Jordi Hays?

  Is there any missing part of the stack right now to meet this moment? You have the, you know, the CAAs, the talent, you know, the talent agencies that can, you know, wear a lot of different hats and help make plays. You have production companies, but is there any, is there any part, is there like financing component missing? Maybe it's too risky to create some type of vehicle just to back creator-led films, but at the same time, maybe having domain expertise would be actually.

• 56:10Samir Chaudry?

  I think the missing piece, and this has been historic in our industry, is development. I think there is a lot of assumption that creators with big audiences know what works, and part of that is true. But, you know, Kane got signed at sixteen years old and 824 kind of mentored him from, from the age of seventeen to the age of twenty. And I think, you know, 824 has a history of making great movies that are culturally relevant and knowing how to make something iconic, knowing how to make us all feel something. And so that, I think, should not be overlooked is the development step. Like, surround me, if I'm a filmmaker, surround me with people who have done this before. Help me write the script, which Kane did have a lot of help in in screenwriting. He's looking for a collaborator for for part two.

• 56:54Samir Chaudry?

  But give me the the development support to make it long lasting IP or big global IP. And I think that happened with Kane. I think Curry is like a a really great talent and what he's done in in comedy historically has led him here. But I think development is going to be the missing step because what's going to happen is it's going to be a very quick reaction. Let's get creators with scripts. Let's put money behind them. Let's move fast so we can also make a hundred and fifty million dollars. But, you know, you have to remember, this is years and years and years of these storytellers cutting their teeth and having good people around them to help them learn how to tell a good story. So I think the financing will not be a problem because you can finance create. Creators know how to make stuff for cheap.

• 57:36Jordi Hays?

  Last, last question.

• 57:37Samir Chaudry?

  Twenty days that Curry made that movie, which is crazy.

• 57:42Jordi Hays?

  Somewhere out there, someone is sitting in a dark room for like eighteen hours a day, trying to prompt their way to a hit movie. I don't know if I don't know if the models are good enough yet. I have a feeling they might be, and it really is about figuring out the storytelling component and piecing it all together to be cohesive. But do you have any sort of personal timeline to that kind of moment where some one individual takes, you know, an idea through a, you know, even a thirty minute film that actually gets a, you know, positive reaction from critics or, you know, something like twenty million views, something like that.

• 58:29Samir Chaudry?

  I mean, I, you know, obviously, we all live in L.A. I feel like the first thing that comes to mind for me is the Spencer Pratt mayoral ads, because those are like a lot.

• 58:36Jordi Hays?

  Yeah, but ads are. Ads are so much easier to make.

• 58:41John Coogan?

  It's a glimmer.

• 58:42Samir Chaudry?

  They're much easier to make, but I'm saying that's where we are in the timeline, right? Like, those ads are clearly AI, but they got shared a lot and they did do millions of views. And people just accepted them for the story that he was telling, I think. And so I think if you look at that, like, maybe it'll be in a year or two. And I think it'll start in animation with short films because we'll accept that more. But I don't know, all things, I think another element of this whole story is I do think, maybe you guys feel this, maybe you don't. I think there's a bit of internet fatigue that is allowing theaters to come back. I think maybe I'm just overstepping there, but I do feel it. I personally feel.

• 59:24John Coogan?

  We started to see the data with Gen Z's screen time finally sort of dropping off a little bit after.

• 59:29Jordi Hays?

  Yeah, I thought about like running over my phone with my car on purpose. Just to have a little bit of forced time offline.

• 59:38Samir Chaudry?

  So like the models are really good, like we've been playing around with Gemini Omni. Obviously we had them at Press Publishing LA, but like they're really good models. They're crazy good. Uh, you know, whether you can, that'll probably happen in the next two years. We'll probably watch something like that.

• 59:53John Coogan?

  Uh, one somewhat related cut on this that I want your reaction to is I found it very interesting that Backrooms started as a purely CGI VFX effort. And in Blender and After Effects. And what's interesting is there's actually a whole discord for modeling different 3D models that are shared so the community can build around it. And the assumption, if you are worried about the relentless march of technology is like, well, of course they had everything modeled. They already had the Blender assets, like just hand that off to the VFX team and you got yourself a CGI movie. Put all Chihuahua Edge of Four on a green screen and it's done. But they didn't do that.

• 1:00:35John Coogan?

  They built 30,000 square feet of physical set design. And it's interesting that I feel like the CGI wound up being like the audition for actually building.

• 1:00:48John Coogan?

  underwriting the the build out of that set and I imagine that that might happen in AI where you get someone that has some interesting idea that they were able to prompt and then they take that into a CGI that's a little more polished and then they can go build the actual sets and it's all just this extra underwriting process but I was wondering if there was anything else that stuck out to you about the fact that they that they sort of went light on CGI when you think the fans of back rooms are are they're already blender they they love blender like they're not upset about CGI

• 1:01:19Samir Chaudry?

  but if it was CGI then I would be like just make it for YouTube like the the reason why it's an event is because of all that and I think eight twenty four and you know I don't know who yeah I don't know who whose call it was but eight twenty four is very good at making things iconic all the interviews of the cast are done in the back rooms there was a DJ set from the back rooms there was people who visited the back room it's like the fact that it was tactile and real makes it an event

• 1:01:44John Coogan?

  I don't I'm not even 360 experience I like that

• 1:01:46Jordi Hays?

  yeah I've seen five movies but I can tell when I can tell just based on with hardly paying any attention I can tell when a movie is an eight twenty four movie from like the first video that I see the first fifteen seconds of a trailer like there's just something about it

• 1:02:04Samir Chaudry?

  yeah it's the same with you guys like you can like there's you know countless shows that try and be TPBN but you can see TP you could yeah I could like see something for a split second even without you guys on screen and know if it's TPBN and I think eight twenty four has that and that is really hard to do it takes a lot of focus and it takes a lot of discipline but um you know I think eight twenty four has done it again like this is this is incredible and and pulling someone like Kane into this and beating Marty Supreme which had like a crazy marketing push shows you the power of the internet

• 1:02:41John Coogan?

  yeah yeah

• 1:02:41Jordi Hays?

  they they overpowered the blimp

• 1:02:43Samir Chaudry?

  powerful man uh the internet's powerful and and uh the communities are powerful

• 1:02:48John Coogan?

  okay last question

• 1:02:50Samir Chaudry?

  I'm assuming we're about to leave and I just wanted to say I'm thrilled to see ads back I couldn't tell you uh how great this looks to me yeah I'll give it up for that I'm thrilled

• 1:02:59Jordi Hays?

  it really is part of the brand

• 1:03:01Samir Chaudry?

  it's part of the brand

• 1:03:02John Coogan?

  it is part of the brand uh do you have time for one more question

• 1:03:05Samir Chaudry?

  I got time, man. I'm just here in Montana. You guys have to go properly. Doing mysterious things.

• 1:03:11John Coogan?

  Yes.

• 1:03:13John Coogan?

  Next question. Where are you? And don't dodge the question.

• 1:03:18John Coogan?

  I want advice for YouTubers in the context of passion projects. There's a lot of YouTubers that have grown off of a single format. They know what works, the title, thumbnail hook, the format, the the the structure of the video. They know they can put up a million views for every video that they do in that series. But they get sort of bored and they want to do their their passion project, their series. And then they do it, they take the time off, and then it just doesn't quite perform. Maybe the 200,000 true fans show up, but it's not getting the viral hooks. I I noticed this with Johnny Harris did this fantastic series on Cyprus and he went around these islands. But it just, it wasn't financially the same as all the other videos that he does. And I'm wondering if there's a new format where you should

• 1:04:02John Coogan?

  sort of give YouTubers the permission to keep that special project in their back pocket and take it to a different place. Take it to Hollywood where that type of project can live and flourish and go through development as opposed to trying to stuff it down the same funnel that is very optimized for a particular type of video.

• 1:04:23Samir Chaudry?

  I I think monetizing your passion projects is almost like an oxymoron. Oh, right. Like if if if it's if it's a passion project, you care about it. Yeah, you should not get other people involved. Like, we are in the business of media. You can sell media. You can you can come up with your media product. You can sell your media product. You can sell your ad integrations into your YouTube videos. But you have something you deeply care about that you just know how to make it. You know what it should be. I call it. You add a bunch of, yeah, yeah, you go. Or you have a financier that you trust. Yeah, you got a financier that you trust that's not going to hinder it. And again, Curry, I think the danger with these creators now is actually having too much money. You know, like Curry making that for 750 is what makes it special.

• 1:05:07Samir Chaudry?

  It's what actually gets less strings attached. Yeah. Uh, and why it's good. Markiplier making something no strings attached. Like, that's just his money. He gets to make something really special. So I think. Markiplier is a great example. Like when you have a passion project, you ideally have the cash to do it or can get it from someone you trust who's not gonna intervene with it. But I think that is a danger. I think too much money can kill creativity very quickly. And it just becomes a product, of course. And so I would caution.

• 1:05:38John Coogan?

  I have one last hot take that I want your reaction to.

• 1:05:44John Coogan?

  We need to bring the host read mid roll ad to the cinema. Movies should have host read mid roll. Because if you look at the if you look at the budgets of some of these films, 750, a million dollars. If you're watching Obsession and then just at the one hour mark.

• 1:06:01Jordi Hays?

  And then you get an ad for Chase Sapphire Reserve.

• 1:06:03John Coogan?

  Chase Sapphire Reserve.

• 1:06:05Jordi Hays?

  Not just product placement. I want the I want the characters to sit down.

• 1:06:08John Coogan?

  No, no, no, no, no. The whole point is that it's not product placement. Because everyone goes to product placement in movies. This is this is separate. This is a host read ad.

• 1:06:17Jordi Hays?

  I agree and disagree with you. I want the characters to sit down and not just use like a Chase Sapphire card to pay. I want them to look at the camera and deliver.

• 1:06:28John Coogan?

  Because I'm actually sick of seeing James Bond use the Samsung Galaxy S26. I would rather just James Bond tell me about it separately. And then I can go back to enjoying the movie with whatever phone he would use, the whatever phone the character would normally use.

• 1:06:41Samir Chaudry?

  I love you guys. And I love how you speak about advertising. I disagree wholeheartedly. I don't want that at all. I'm happy to have the theatrical runs sponsored by someone like Chase. If you have a Chase Sapphire card, you get in for free. And like, you get perks for something if you have a Chase Sapphire card. The one thing, my hot take is I want movies to be like 90 minutes and under again. I can't do the two hour movie. Like, I just cannot do it. I would prefer like 90 minutes and under I got time for. Two hours feels like, and I think all of our attention spans are being trained to like, be way shorter than that. Even an hour and a half is like working out. Like it's hard.

• 1:07:20John Coogan?

  Maybe go shorter, 90 second movie. Vertical.

• 1:07:23Jordi Hays?

  Well, John and I are gonna start.

• 1:07:26John Coogan?

  Twenty bucks is twenty bucks, but I, you know, I checked the box. I saw a movie. Yeah, I went to the theater.

• 1:07:31Jordi Hays?

  That would be good for me.

• 1:07:32John Coogan?

  Ninety seconds and about.

• 1:07:32Jordi Hays?

  That'd be good for me.

• 1:07:33John Coogan?

  That'd be great for you. You'd be able to catch up. You'd be like, yeah, I've seen hundreds of movies.

• 1:07:35Jordi Hays?

  Yeah, well, we can agree to disagree on ads. John and I will start a media buying company called Fourth Wall, and it's just focus on breaking down.

• 1:07:45John Coogan?

  That's not a real agency.

• 1:07:46Jordi Hays?

  Breaking down the fourth wall and delivering ad impressions during your most sacred moments of entertainment.

• 1:07:53John Coogan?

  Yes, yes, yes. The next Godfather will be sponsored fully. Anyway, enjoy Montana. Thank you so much for taking the time on a busy day to come chat with us.

• 1:08:01Jordi Hays?

  Great to see you, dude.

• 1:08:01John Coogan?

  Great to see you. Again, not that busy, but appreciate it.

• 1:08:05Jordi Hays?

  Okay. See you guys. My mysterious activities.

• 1:08:07John Coogan?

  Goodbye. Let me tell you about Cisco. Critical infrastructure for the AI era. Unlock seamless, real-time experiences and new value.

• 1:08:17Jordi Hays?

  Hey, team, is this, Ben, is this real?

• 1:08:20John Coogan?

  What is real?

• 1:08:21Jordi Hays?

  Did you take a screenshot of?

• 1:08:22John Coogan?

  What happened?

• 1:08:24John Coogan?

  What is this?

• 1:08:25Jordi Hays?

  Look, look in the chat.

• 1:08:25John Coogan?

  No, no way. No way.

• 1:08:28Jordi Hays?

  Target. Just off that one screenshot, our intern Ben was able to find Samir's exact location.

• 1:08:36John Coogan?

  Okay, we will not dox it, but we do know exactly where it is, potentially. I don't know. This might be a losing, but it looks pretty, it looks pretty accurate. Anyway, we've been keeping our next guest waiting. We have Tom Farley from Bullish in the waiting room. Let's bring him in to the TDP and Ultra Dome. How are you doing?

• 1:08:53Jordi Hays?

  What's going on?

• 1:08:54John Coogan?

  Good to meet you. Welcome to the show. Can you hear us?

• 1:08:59Jordi Hays?

  Cannot hear us.

• 1:09:00John Coogan?

  Okay, we're turning on the audio. Hopefully, we'll hear him. In the meantime, let's go to this debate. Okay, Becky Quick at CNBC is getting in trouble because she claimed the GLP-1s are responsible for school budget shortfalls. When I saw this, I was like, what could possibly be the connection? And BioInvesting Five said she's so misinformed, she fact-checked it. Turns out it's true.

• 1:09:26John Coogan?

  School budgets are paying for GLP1s. They're very expensive and so that's driving up healthcare costs in a lot of, in a lot of schools. Welcome to the show. Anyway, welcome to the show. Thank you so much for taking the time. How you doing?

• 1:09:38Speaker 03

  Sorry about, sorry about the audio issue.

• 1:09:39John Coogan?

  I'm good.

• 1:09:40Speaker 03

  I, I, I found the, uh, the little bit about Becky interesting. She's, she's not interesting. Speak about somebody else, somebody on a, on a different network, but, uh, she's a pro. She's a serious journalist.

• 1:09:50John Coogan?

  No, we're huge fans. Well, everyone in CNBC, we love the Squawk Box crew. They pioneered this whole format, invented television over there. Anyway, uh, let's go to you. Tell us about Bullish. Give us the update. Take us through what's recent in the business and, uh, let's get started.

• 1:10:05Speaker 03

  Yeah, sure. Just, uh, before I do, just to follow on on that, you said you're Fantasy NBC. I, I too am a Fantasy NBC, but also we have our own media business here.

• 1:10:15John Coogan?

  No way.

• 1:10:15Speaker 03

  And I've watched with some, as, as both, both a practitioner and a, and a fan of some, somebody who's done a lot of it. I've watched with some astonishment the success that you guys have met with.

• 1:10:24John Coogan?

  Thank you.

• 1:10:24Speaker 03

  By just, just creating a, a fresher, more interesting format. You guys do an awesome job. Thanks.

• 1:10:29John Coogan?

  Yeah.

• 1:10:29Speaker 03

  Thanks for having me on.

• 1:10:30John Coogan?

  Thanks for saying that. It's a lot, yeah. It's been a really wild rise, really fun and, uh,

• 1:10:34Speaker 03

  Wow.

• 1:10:35John Coogan?

  Best part is getting to talk to people like you all day long. Like, and, uh, and, and again, again and again, and, and talking to six people a day. Uh, a lot of people start podcasts because they want to talk to interesting people, but then they talk to one a week. We get to talk to seven a day. It's great.

• 1:10:49Speaker 03

  Yeah, yeah. Super cool. I'm, uh, I'm happy for you and happy for me. Yeah. What can we talk about?

• 1:10:54John Coogan?

  Uh, well, why don't you, uh, take us through like the shape of the business currently and then some of the new deals that you've been working on. Wait, can we get some backstory? Yeah. Oh, yeah, yeah. Let's start there. That's You were at, uh, you were at NIC, right?

• 1:11:06Speaker 03

  Yeah, I was, uh, I was born in, uh, Bowie, Maryland, just outside of, uh, DC.

• 1:11:11John Coogan?

  I thought you were gonna say you were born on the stock exchange. I was born on the floor. Born on the trading floor. On the trading floor. That would be amazing lore.

• 1:11:19Speaker 03

  I actually didn't know, like, I wasn't born with any, like, pre, uh, any, any destiny. I didn't, I didn't know. I was, I was always interested in business and money and, uh, uh, no, I wasn't, it wasn't, nothing was pretty ordained, but so.

• 1:11:33John Coogan?

  Yeah.

• 1:11:39Jordi Hays?

  A lot of people are afraid to say that. I was never afraid to say that.

• 1:11:42John Coogan?

  Yeah.

• 1:11:43Speaker 03

  Yeah, no, I could tell. My mother would shake her head sometimes. My mom, my mom was a nun for five years. And, uh, and, uh, worked in, uh, you know, I grew up in a place called PG County and, and she worked at Elizabeth Seaton High School, which, you know, by and large had kids from a different socio-economic strata than me. And then she would come home and I would talk about making money. And, uh, you know, she looked at me like, oh, he's the black sheep.

• 1:12:05Jordi Hays?

  Yeah.

• 1:12:06Speaker 03

  But, uh, met my, met my wife at Georgetown. I need a dollar to buy a Gatorade. And, um, she lent it to me and now we have, we have three kids in, in New York City and I just fell in love with business. And, uh, first couple of years I, I did like banking and private equity. Honestly, I love that too. But when, when I really kind of hit, hit, got, got my mojo is, is in the markets industry because it's the intersection of tech and business. And that to me is, is my happy place. And I've been there ever since. I, I started when I was in my twenties. I'm, I'm like granddad now in the digital asset space. I'm, I'm 50. And I've been right there at that kind of overlap of the, the Venn diagram of, of technology and markets.

• 1:12:46Speaker 03

  I, um, I, I, I had, I had these friends, the Romeros and, uh, and I love them. I love them all. Stay in touch with all of them. There's four brothers and, and they're all super smart, super successful. And three of them are just like meatheads, like, you know, always had their shirts off and, and wrestling and playing, playing hoops. And then Danny was always like reading Java coding for, for dummies when he was like 10 years old. And I would always keep an eye on him. And so in 2013, I'm like, Danny, are you going back to Duke? And he said, no, I'm going out west to start a blockchain company. And I'm like, all right, I don't know what the hell that is, but if you're doing it, I want in.

• 1:13:24Jordi Hays?

  There you go.

• 1:13:26Speaker 03

  You know, a few days later, uh, New York Stock Exchange, where I was at the time, we, we agreed to put $10 million into a, a little bitty, maybe pre-revenue company called Coinbase.

• 1:13:34John Coogan?

  That's good.

• 1:13:35Speaker 03

  And so I, I got this bird's eye view of the digital asset space.

• 1:13:40Jordi Hays?

  Oh, Dan Romero.

• 1:13:41John Coogan?

  Yep.

• 1:13:42Jordi Hays?

  Whoa.

• 1:13:42John Coogan?

  Yeah, we know him well. He's been on the show.

• 1:13:44Jordi Hays?

  That's a crazy, that's a deep cut.

• 1:13:47John Coogan?

  That's so good.

• 1:13:48Speaker 03

  That was great. It was great. Literally, literally I'm like, Danny, going back to Duke? He's like, no. He's like, no, Tom, I actually graduated this past May. You're a year off. I'm starting this blockchain company. Meanwhile, I know I'm going in to run the New York Stock Exchange. He does not.

• 1:14:00John Coogan?

  Yeah.

• 1:14:01Speaker 03

  And I'm like, hey dude, you got, you got a couple of minutes? Come sit on the porch. And he comes up. And he starts telling me about blockchain and I'm like, wait, you know, I'd heard of Bitcoin, but this is early, right? It's like smart contracts and I'm like, but what use is there for these smart contracts? He's like, oh, it's gonna be amazing. It's gonna disintermediate. It's this layer of programmable finance. It's gonna disintermediate all the kind of big institutions like the New York Stock Exchange.

• 1:14:26Speaker 03

  And I'm like, what? What are you talking about? It can't be. And so I said, I gotta put some money in. He said, oh, well, my roommate Fred is gonna be in New York tomorrow. Why don't you meet with him? And so I met Fred Ursam. I ended up meeting with Fred at Union Square. And we put that dough in and it was like the best money we ever invested. We got lucky on the return. Just dumb, you know.

• 1:14:49Jordi Hays?

  Was this like this series A stage like?

• 1:14:53Speaker 03

  I don't know. I can't remember last Tuesday, let alone 2013.

• 1:14:56Jordi Hays?

  But early, but early.

• 1:14:57John Coogan?

  I mean, Coinbase was in my YC batch in 2012 and summer 2012. So I think seed or series A was right around.

• 1:15:05Speaker 03

  We should punch it. We should punch it in, you know. Anyway, it was a long time ago. Punch in New York Stock Exchange Coinbase, it'll come up.

• 1:15:12John Coogan?

  That's crazy.

• 1:15:13Jordi Hays?

  That must have been, what kind of reaction did you get on Wall Street from that investment at the time? I don't know how public it was, but I imagine you still had some of your peers that were saying, you know, what the heck is Tom up to?

• 1:15:26Speaker 03

  You know, it's actually, I think if you ask Brian or Fred, um, or Fred at Union Square, I think they would all say, um, with humility, it has nothing to do with me. It has to do with the NYC brand, that it was hugely valuable for Coinbase. It was not only public, it was massively public. So in other words, if you were to look it up, you're gonna find story after story after story after story, which is, hey, traditional bellwether, a traditional bellwether, you know, firm, New York Stock Exchange validates crypto firm Coinbase. So on the, on the West Coast, it was, it was like a lot of celebration and,

• 1:16:09Speaker 03

  you know, hey, this is finally the coming together of these two worlds. On the East Coast, it was like, what the hell is this? You know, what a weird investment from these guys. Uh, and it wasn't as, it wasn't as celebrated. I will say just.

• 1:16:24Speaker 03

  My thesis was this was a programmable layer of finance for institutions.

• 1:16:30Jordi Hays?

  Yeah.

• 1:16:31Speaker 03

  Like, that was the thesis. It was dead wrong. If I'm honest, you know, there were no institutions.

• 1:16:36Jordi Hays?

  Well, was that just?

• 1:16:37Speaker 03

  Until.

• 1:16:38Jordi Hays?

  Yeah, was that just a, you had the timing wrong. You didn't.

• 1:16:41Speaker 03

  Yeah, but pretty darn wrong, right?

• 1:16:43Jordi Hays?

  Yeah.

• 1:16:43Speaker 03

  Pretty darn wrong.

• 1:16:45John Coogan?

  Yeah.

• 1:16:47Jordi Hays?

  Yeah, but you're only off by, only off by, what, a decade?

• 1:16:50Speaker 03

  A decade plus.

• 1:16:52Jordi Hays?

  And just missed, but missed that retail would be the, the, the early adopters.

• 1:16:58Speaker 03

  Yeah.

• 1:16:58Jordi Hays?

  And even some of the late adopters.

• 1:17:00John Coogan?

  Yeah, I guess, how, how do you synthesize the fact that crypto did not disrupt the traditional finance system like entirely, like, you know, JP Morgan, Morgan Stanley, these firms still exist, they're chugging along. New York Stock Exchange is still chugging along, NASDAQ and many others. And yet crypto firms have been very successful. It was sort of a, like, heads I win, tails you lose situation, like, both, both sides did well. There was not total destruction of the traditional financial infrastructure and institutions. But crypto was, was, you know, wound up flourishing. Like, what does that say about everyone's preconceptions, I guess?

• 1:17:44John Coogan?

  Because there were two sides a decade ago. Either crypto is a zero, or it's going to take over everything. And it, and we, we wound up with the middle road.

• 1:17:56Speaker 03

  Yeah, I don't.

• 1:17:58Speaker 03

  I agree, I agree, and I'm going to challenge it a little bit.

• 1:18:01John Coogan?

  Okay, please.

• 1:18:04Speaker 03

  I'm not sure it was, it, it has been up to this point such a big win for crypto. There's actually relatively, relatively, for all the money and attention and time and, and, and, you know, ink spilled and for all that has gone into digital assets, there's actually relatively few successful companies.

• 1:18:24John Coogan?

  Yeah.

• 1:18:25Speaker 03

  And certainly the disruption to traditional finance has been relatively small and very small, actually.

• 1:18:34Speaker 03

  I, I, and, and, and look, it hasn't always been great. Just, I'm not a cheerleader. I call, I call, I call balls and strikes. Like, not only were there winters, but there were frauds and scams and, you know, like, I'm not in it for the fart coins and monkey drawings. I'm just not, and I respect it and I understand why they're there. And, and just to pivot to that, like, the nice thing is, they've brought a lot of attention into the industry, a lot of money into the, into the industry. And I think it's all been a warm-up act. And, you know, you remember, like, blockchain's going down. In some, in some cases, once a day.

• 1:19:07John Coogan?

  Yeah.

• 1:19:07Speaker 03

  And, none of that happens anymore. And they, they've been battle-hardened. And regulators have now come around and, and you've seen broad acceptance of blockchain rails for serious use cases in Asia, in Hong Kong and Singapore, in Europe, in Br- you know, in Brussels, Europe, but then in the individual countries. And now, in the US, not just with Genius, which is the state, you know, it ratifies stable coins, kind of gives them papal blessing, but hopefully the Clarity Act, we can talk about how to handicap that, but if that gets passed, that, that'll be perhaps the biggest regulatory or legislative step ever. And so I am very, very optimistic that I come on this show a decade from now and the global securities market is, it's on blockchain rails.

• 1:19:52John Coogan?

  Yeah.

• 1:19:53Speaker 03

  And that's a $270 trillion market. So, I, I, I, there's no mission accomplished banner behind me in terms of crypto, um, up to this point, but it's, it's coming and it's, it's coming, it's coming in, in real time. That's kind of how I view it.

• 1:20:09Jordi Hays?

  Yeah, crypto, you know, the, the, the cycles and the hype cycles are so vicious. And yet it keeps creating these opportunities where the true believers, if you just maintain that conviction, uh, like this window right now, where there's some, at least, you know, we, we primarily cover private, private markets. And so there's so, there's some interest at the intersection of AI and, and crypto. There's been a decent amount of investment there. But I don't see, you know, hundreds of new companies focusing at the intersection of what you guys are doing, which is that, like, true institutional adoption.

• 1:20:53Jordi Hays?

  Across global equity markets and other asset classes. And so I do, I can, I can, you know, thinking on that 10-year time horizon, I very much can see how the best days are yet to come and huge opportunity to just like, you know, be in the foxhole and, and focus on the opportunity.

• 1:21:14Speaker 03

  Yeah, and I, I think agentic commerce will intersect with blockchain technology. And I'm not one of those who says, oh, and 100% of, you know, agentic commerce is going to happen on blockchain rails and fiat rails will, will see their share. But that's, that's going to be a big driver as well. But you're absolutely right, Jordi, and thanks for doing the prep work and learning up on bullish because you're absolutely right. We are focused on institutions, really institutions exclusively in our exchange business, over in our CoinDesk and consensus business, of course, we're a media business, so we service all sorts of people and customers. But we focus on, on institutions exclusively.

• 1:21:56John Coogan?

  Yeah, I'm reflecting on the, the question of like the, should there be a mission accomplished banner behind you? And I, I take your point. At the same time, yeah, there has been a lot of success in crypto, trillions of dollars in market cap, a lot of that captured by the, the coins themselves, but there's a number of very successful companies, yours is among them. But I'm interested in, in where you think we are in 2026. A lot of the prices are, we're not in some insane falling knife scenario, but stable coin volumes are sort of stable, even though they were growing very quickly. The Bitcoin price is fairly stable, which is, what?

• 1:22:40Jordi Hays?

  Fairly stable, MicroStrategy started selling.

• 1:22:43John Coogan?

  But, but it just doesn't, it doesn't feel like, oh, there's, this is the FTX moment all over again, like crypto is about to fall into zero and like people are panicking. It, it's more just like, you know, this is a mature, stable industry that's, you know, there's some, there's some growth, there's some companies that are beating earnings, there's all sorts of different stuff happening. It feels very mature and so I'm wondering.

• 1:23:04Jordi Hays?

  Yeah, well, it's mature, but still feels like there's an opportunity for pretty parabolic growth as you get real institutional adoption, not just, hey, we're going to hold some,

• 1:23:18John Coogan?

  Yeah.

• 1:23:18Jordi Hays?

  you know, Bitcoin on our treasury.

• 1:23:21John Coogan?

  Yeah.

• 1:23:21Jordi Hays?

  Et cetera.

• 1:23:22John Coogan?

  So, yeah.

• 1:23:22Speaker 03

  I agree. I agree with everything you both just said. I think, you know, what John said is kind of feels like a more ordinary industry. And by ordinary, I don't mean that in a pejorative sense, but it's no longer based on hype. It's based on real use cases like stable coins. And stable coins are being used for trading and stable coins are being used for payment and stable coins are being used for lend borrow. And they've gone from zero to 300 billion. And, you know, the whole industry is now 2.7 trillion. And yes, Bitcoin's more stable. Now, we happen to be sitting here at a moment in time when Bitcoin's down, you know, 15% over the last two weeks or something of that nature.

• 1:24:04John Coogan?

  But there were times when these, when like, there was like, the whole crypto industry is down 50% and, and like, people are actually penning the take, everything's going to zero. And it's being, and it's being debated seriously. And that's not happening right now.

• 1:24:19Speaker 03

  No.

• 1:24:19John Coogan?

  And so it is a different time.

• 1:24:21Speaker 03

  And then what, and then what Jordy said that I agree with, so, you know, you mentioned, John, that crypto is a couple trillion. The last time I looked, coincidentally, I'm not that good at math in my head. It, it, it made, the numbers made it real easy. 2.7 trillion and the global securities market is 270 trillion.

• 1:24:39John Coogan?

  Oh, yeah.

• 1:24:40Speaker 03

  So, and that, and that is coming, right? Money market funds have already moved on to blockchain rails.

• 1:24:48Speaker 03

  U.S. equities have already moved on to blockchain rails. You know, you look at all the industry bigwigs from the, you know, my old haunt, the New York Stock Exchange or DTC, the Clearer, or many of the electronic brokers, Kraken or Binance put out an announcement yesterday. They're all tokenizing stocks. You're seeing more examples of tokenizing fixed income. And so you're looking at the, the parabolic growth that Jordy referred to, I believe, is going to come from the so-called tokenization of the global securities industry.

• 1:25:18John Coogan?

  What's more important there? Cost or speed? Because, and when I mean speed, I guess I mean like 24/7 trading. That seems like it's crazy. We don't have that yet everywhere. It seems like a purely technical issue. And yet I've talked to folks at hedge funds that are like, yeah, like we actually can't get traders who want to work at 2 AM Eastern on a Sunday. It's hard to recruit the best to actually make that market and provide liquidity at that point in time. But then on the other side, you have, you know, fees and all of the different things that happen with crypto potentially dropping costs. Like, what are the different pieces of adoption?

• 1:26:01Speaker 03

  Yeah, the 24/7, what people miss sometimes is actually the investing demand, especially for the most liquid US-based securities, like think Nvidia stock.

• 1:26:12John Coogan?

  Yeah.

• 1:26:13Speaker 03

  Comes, the incremental buyer comes from abroad. And, you know, Singapore, where we have an office is 12 hours away. And they don't want to trade some crappy derivative, or they don't want to trade some like IOU, they want to trade the actual stock. And so by going 24/7, you can bring on new liquidity, which drives down the cost of equity of those companies. And so there's a real incremental benefit. I think, to answer your question, like, what is the benefit that's most attractive? You have to look at the particular constituent. The issuers, they hate little things, like what, you know, I say little, they're not little to them, but like this issue of naked short selling, which is illegal, but is possible

• 1:26:54Speaker 03

  in a world where trading is obfuscated in a Russian, series of Russian dolls of brokers or other intermediaries. With blockchain rails, there is no naked short selling. You just look, are the shares in a wallet or are they not in a wallet? Like, it's done. But also issuers want the ability to pay stable dividends and stable coins. Issuers want the ability to be able to reward long-term holders. Imagine you're a company, say, hey, we're going to pay a dividend of a dollar, but we're going to give an extra penny for every quarter you've held our stock.

• 1:27:23John Coogan?

  Hmm.

• 1:27:24Speaker 03

  There was a whole exchange on the West Coast that started that was really great.

• 1:27:29John Coogan?

  Eric Ries, Long Term Stock Exchange, right?

• 1:27:32Speaker 03

  Exactly. Mark Andreessen introduced me to Eric Ries, maybe it... 10 years ago, 15 years ago, and I remember the first meeting I had with them, I thought, this guy's on to something. Like, yeah, we should, we should reward that. We should reward long-term holders. Well, it turns out, you can't do it if you don't know who owns the damn thing and it's buried within, you know, five Russian dolls. Well, blockchain technology, again, you just, you just look at it. Oh, they own it. It's in that wallet, it hasn't moved. So, um, so for the issuer, it's, it's actually incremental functionality as opposed to cost or speed. And then for, for the investors, it's just the ability to do things at a, at a lower cost. So I guess that's more, uh, that's, that's more cost. But then on the, on

• 1:28:13Speaker 03

  the speed perspective, being able to settle instantly is interesting. Um, so it kind of depends, depends which constituent.

• 1:28:21Jordi Hays?

  Short on time, couple of questions. Uh, people on the West Coast who know nothing about finance have been, uh, excited about compute futures, markets, or treat, treat and compute like, uh, like, uh, like, you know, trading it like a commodity. Uh, is that something, you know, how, how do you think about that, you know, potential market? Is that something that you think could start on, um, on blockchain rails because it is a, a new type of commodity in some way?

• 1:28:54Speaker 03

  Um, yeah, two, two questions embedded in that. One is, will compute futures actually be a successful product? I, I think it will be. Um, the, the issue is standardizing it and commoditizing it. Um, successful, the, the real successful futures contracts with lots and lots of open interest, all come down to the question of, are you able to standardize it and commoditize it and come up with the cheapest deliver that has value in the world and everybody agrees upon? So that's not going to be dead easy. It's still probably going to take a couple of years, but I suspect that, that will happen. Uh, the second question is-

• 1:29:25Jordi Hays?

  Is that because, is that because like an onion is an onion, but a GPU is not necessarily a GPU? Like an A100 is not a, is not a blackwell? So then do you need?

• 1:29:35Speaker 03

  Exactly. And, and the providers-

• 1:29:36Jordi Hays?

  Submarket, you know, basically submarkets?

• 1:29:39Speaker 03

  Yeah. And the providers have a vested interest in not being commoditized. Um, so sometimes it, it takes time for, for the market to commoditize, but it's, it's, it's exactly what, what you just described.

• 1:29:50Jordi Hays?

  Got it.

• 1:29:51Speaker 03

  Yeah. Um, go ahead.

• 1:29:53Jordi Hays?

  One more random question. Uh, Friday IPOs, we're looking at a SpaceX IPO next Friday.

• 1:30:04Jordi Hays?

  My sense is like that's, does that not introduce like more chaos? Because you have like one, you know, real trading day. There's going to be so much retail activity and then you go into a weekend. Of course, you know, people will be trading it over the weekend in different ways. But I know there was Alibaba and Uber that both went out on the NICE on Fridays. How did, how did those goes? Does that make it, you know, more complicated or chaotic? Or is it, is, you know, are the exchanges set up to handle that?

• 1:30:40Speaker 03

  I, uh, that was one, the Alibaba IPO in particular was one of the best days of my career, maybe even my life. Um, but it was also.

• 1:30:49Jordi Hays?

  Coming from the guy who, as a young boy, knew he loved money.

• 1:30:55Speaker 03

  I also was so friggin nervous that honestly, when you just said that, I like was tingling remembering it. I was, I was, we were in our beautiful ballroom that morning and Jet Li was there, Masa and Jack and Jimmy Lee, who's departed. Um, was an iconic and legendary JP Morgan banker. He kind of sidled up to me, he's like, hey, uh, Tom, did you guys test this thing at all? Like, is this actually gonna work? Cause you're about to get a gazillion retail orders. Good God, next Friday? It's gonna make Alibaba look like child's play. So, uh, Adina at the NASDAQ is fantastic and the NASDAQ is fantastic.

• 1:31:39Speaker 03

  Oh man, it still makes me nervous. Um, but to answer your question, I think a Friday's fine. There will be awesome price discovery on Friday and you're going to see extreme volatility for the first hour. It's, that's nobody's fault. That's that's called markets. Could it be better? Could there be better mechanisms that could be put in place to smooth it out? Yes, and we should all strive to get there. I just went through an IPO. I have a thousand things that need to change. I think blockchain technology can be very, very helpful in the future, and I think you're going to see more capital formation on blockchain rails because it can do just that. But high volatility to be expected. It's going to calm down dramatically through the day, and it won't be a problem getting through the weekend because there's not going to be any substantive substantive new news.

• 1:32:24Jordi Hays?

  Right.

• 1:32:24John Coogan?

  Thank you so much for coming on the show.

• 1:32:26Jordi Hays?

  Yeah, it was fun. Maybe you should come back on, maybe you should come back on, on, on next Friday.

• 1:32:30John Coogan?

  Yeah, we gotta do it.

• 1:32:31Jordi Hays?

  This was super fun.

• 1:32:33John Coogan?

  This is fantastic. We'll talk to you soon.

• 1:32:35Jordi Hays?

  Yeah, great.

• 1:32:35John Coogan?

  Great to meet you. Have a good one. Let me tell you about Railway. Railway is the all-in-one intelligent cloud provider. Use your favorite agents to deploy your web apps, servers, databases, and more. Well, Railway automatically takes care of scaling, monitoring, and security. Our next guest is Nikesh Arora from Palo Alto Networks as the Chair and CEO, friend of the show. Welcome back, Nikesh. Great to see you. How are you doing?

• 1:32:58Speaker 09

  I'm doing great, gentlemen. How are you?

• 1:33:00John Coogan?

  We're doing well as.

• 1:33:01Jordi Hays?

  We're doing great.

• 1:33:02John Coogan?

  It's been too long.

• 1:33:03Speaker 09

  Let me see those watches.

• 1:33:04John Coogan?

  Uh, ooh, I have a Rolex Submariner in TBPN green on. We got them for the whole team.

• 1:33:11Jordi Hays?

  Yeah, not gonna be happy to say that.

• 1:33:13Speaker 09

  What about your favorite guests?

• 1:33:15John Coogan?

  Our favorite guests, we, we, we do have some of those, but.

• 1:33:18Jordi Hays?

  We do, we do. I actually, I can't wear watches when I'm using a computer.

• 1:33:22John Coogan?

  Really?

• 1:33:22Jordi Hays?

  It's too annoying to me to have it clacking against, uh, it's just, I can't do it. Total skill issue.

• 1:33:28John Coogan?

  Skill issue.

• 1:33:29Jordi Hays?

  Total skill issue.

• 1:33:30John Coogan?

  Well, no skill issues over at Palo Alto Networks, thankfully. Incredible progress. Take us through it. What's the latest in your world?

• 1:33:40Speaker 09

  Well, the good news is we can officially declare the Assassin's Caliphs dead for cybersecurity.

• 1:33:51Jordi Hays?

  Why?

• 1:33:52Speaker 09

  Why is it dead?

• 1:33:53Jordi Hays?

  Like, uh, did, are, were you surprised?

• 1:33:55Speaker 09

  Who killed it?

• 1:33:55Jordi Hays?

  That it, that it took so long? It, it, uh, it obviously has only been, what, a couple of months? But still.

• 1:34:02Speaker 09

  Oh, I think it gave every one of our happy shareholders a buying opportunity. This is good. Yeah. So. There you go. It took a few months because I think, look, the general tendency in the market was AI is gonna eat every piece of software and it's gonna be amazing and it's gonna take care of it. Now, AI is good. Yeah. But even now, the false positive rate on unaided models is 25%, right? Yeah. So if I don't explain the harness, if I don't explain the context, if I don't explain what the code is trying to do, the model still gets one out of four wrong. Yeah. In cybersecurity, our business will get everything right. Yeah. If I get one out of four wrong, I don't think I'm gonna get replaced anytime soon. Yeah. It's like, it's like having your car driven by OpenAI because I don't need a Waymo. I don't need to have all the machine learning code that tells you everything.

• 1:34:46Speaker 09

  So it's just stick a model in a new car and go drive off. It doesn't work like that. So I think what the market is beginning to realize is cybersecurity is gonna get enabled with AI. Yeah. And if you wanna get it enabled, you have to go with the people who've been doing this for a long time, who sit at various enforcement points, because we sit at north of 125 million enforcement points. You need AI to enable the enforcement points with new techniques to go suss things out that allows us to do a better job. But it's not gonna come away and take my enforcement point away and replace me. So are we gonna use all this future? Yes.

• 1:35:19Jordi Hays?

  There's an alternate reality where the world wakes up to AI being good at, you know, hacking computer systems and all of the cyber stocks just like rip like off of that news. But it was interesting.

• 1:35:32Speaker 09

  Yeah.

• 1:35:33Jordi Hays?

  Uh, interesting.

• 1:35:33Speaker 09

  Well, if you saw, you know, one of the core skills of MITOS is this ability to daisy chain vulnerabilities and develop an attack. So yes, it is not. In alternate realities, not hypothetical, it is true, it is the capability exists and that's why they were being so careful, rightfully so, in making sure they don't release the model at large because they know the model unconstrained has the ability of determining attacks based on vulnerabilities.

• 1:35:58John Coogan?

  Yeah.

• 1:35:58Speaker 09

  So I think it's the right thing for them to do is to make sure they do that in a measured fashion, but what you're beginning to see more and more capabilities getting embedded in the core models, OpenAI has one now, Anthropic has another one, I'm sure Google has one too.

• 1:36:11John Coogan?

  Yep.

• 1:36:11Speaker 09

  So just play this movie forward, six to nine months from now, it'll be impossible to put the genie back in the bottle or constrain them.

• 1:36:18John Coogan?

  Yeah.

• 1:36:18Speaker 09

  We have six to nine months to make sure that if somebody's able to use AI to attack somebody, the infrastructure on the customer end is equally fast to be able to repel it or block it at the same speed.

• 1:36:30John Coogan?

  Yeah.

• 1:36:30Speaker 09

  Now, you don't get that without modernizing your stack, without, of course, buying a lot of Palo Alto and having us help you get to a place where we can defend in real time, just the way AI can attack in real time.

• 1:36:43John Coogan?

  So the cancellation of the SaaS apocalypse is clearly, it was a referendum on

• 1:36:50Speaker 09

  For cybersecurity.

• 1:36:51John Coogan?

  Yeah, for cybersecurity, for cybersecurity. But the claim was AI will make Palo Alto Networks' business worse, and I think that's been disproven. We've discussed that. The bigger question I have is, how does AI make your business better? Is it just the demand side because there are more threats than ever, so people have to buy more Palo Alto? Or are there other things happening internal to the organization that are making you more efficient, higher growth? Like, what are the other levers that are being pulled in the AI era?

• 1:37:22Speaker 09

  Well, like, AI will impact in multiple places, right? The first place is the amount of build-out that's happening across the world on AI means that more bits are going to be traveling across networks, right? Everybody's trying to deploy AI, collect more data. Remember, cybersecurity is the inspection business. We inspect every bit.

• 1:37:40John Coogan?

  Mm-hmm.

• 1:37:40Speaker 09

  We're the TSA of the internet, right? Every bit has to go through a firewall, every bit has to go through a product that looks at the bits, say, good bit, bad bit, bad bits stay away, good bit can go.

• 1:37:50John Coogan?

  Yeah.

• 1:37:51Speaker 09

  If you're gonna Explode the amount of traffic in technology in the world, you're gonna need more cybersecurity capabilities. That's one. That drives more, more traffic drives more demand. And the other part is capability.

• 1:38:02John Coogan?

  Yeah.

• 1:38:02Speaker 09

  AI models are good at certain things. The question is, how can we take them, take their false positive rate from 25% down to zero, and leverage them in what I do, what we do? And that's happening right now. We're all looking at how to take certain categories of cybersecurity, embed AI into them to make sure we build a better product for the customer from a protection perspective.

• 1:38:22John Coogan?

  Yeah.

• 1:38:22Speaker 09

  And of course, like you said, there's a third aspect where we can all use AI internally in our business to make it much more efficient. And I always maintain, as I said perhaps last time I was with you, that AI will democratize intelligence.

• 1:38:33John Coogan?

  Yeah.

• 1:38:33Speaker 09

  Which means the average.

• 1:38:35John Coogan?

  Yeah. Yeah, you said, you said efficient, efficient. And it feels like you're a leader in this efficiency moment where so many companies are token maxing. We've saw 500 million dollar bills going out. When I saw the Palo Alto Networks headline of using AI, using mythos to, uh, to find critical bugs. The bill was token mint. I don't know what happened, but you only spent a million bucks. Uh, what, what's going on? Is this a cultural thing? Are you already looking at ROI? Are you head of the ball there?

• 1:39:04Speaker 09

  No.

• 1:39:04John Coogan?

  Or are you being, is it more like a scalpel? You use it just where you need? Like, what is the actual token maxing, token leaderboard, token ROI maxing? What are you doing?

• 1:39:15Speaker 09

  Well, remember, we have, we have, we have parsed our efforts into what is extremely critical and crown jewels.

• 1:39:22John Coogan?

  Sure.

• 1:39:23Speaker 09

  And we can't let open source models, open models touch them.

• 1:39:26John Coogan?

  Yeah.

• 1:39:26Speaker 09

  Because we don't want our code to ever train anything in the public domain. It doesn't matter whatever they tell us. I don't want my code training public domain. So for that, we built our own harness. People are all, we're using our own open source sequestered model, which can't talk to the, to the external world.

• 1:39:41John Coogan?

  Got it.

• 1:39:42Speaker 09

  So we know it's safe.

• 1:39:43John Coogan?

  Oh.

• 1:39:43Speaker 09

  So how our code is going through that, we're not paying anyone for it.

• 1:39:46John Coogan?

  Okay.

• 1:39:46Speaker 09

  We're using it ourselves and built it ourselves. Is it going to be 100% of what's out in the public domain? Probably not, but it's probably 85 or 90% there, and that's okay. I'll go deal with that.

• 1:39:54John Coogan?

  And on that, is, is inference cost an issue yet? Are you burning GPUs to the max and?

• 1:39:59Speaker 09

  No, no.

• 1:40:00John Coogan?

  Dealing with a half a million dollar bill?

• 1:40:01Speaker 09

  We're just using trained models to run it through.

• 1:40:03John Coogan?

  Okay.

• 1:40:03Speaker 09

  Because we're using our task, we're not using them to go generate new stuff, right?

• 1:40:06John Coogan?

  Got it.

• 1:40:07Speaker 09

  So, uh, uh, that's one part of it. The other part is. When it's tough, that is, I don't need to spend expensive tokens for an IQ of one hundred and eighty to solve a customer support problem. I can use a smaller language model. I can use an open source model to solve that problem because it's task specific. So we're trying to be judicious about the use of AI, but at the same time, I think we're not using it as well as we should be using it. I don't think anybody in the world, except unless you're a frontier AI model company, has got it perfectly right in terms of how we need to use it. So we've got to get up the learning curve, and we'll get there. I think the part which I was trying to say to you earlier, I think it's a very important point. What AI is doing for me internally is, as I said, is democratizing intelligence.

• 1:40:48Speaker 09

  The biggest risk in businesses is you hire a hundred marketing people, not all of them are equally good. So you all gravitate towards the ten good ones, and you got to find a way to deal with the ten really at the other end of the spectrum and, you know, eighty in the middle. Good news is, if I train my, my in model right with all my marketing data, I can increase the average intelligence of all hundred of them to ninety-five percent. And I just need the judgment of the five percent from them, which means, you know, it's a rising tide, lifting all boats from an average and average intelligence perspective. If I can get the outcomes of three thousand customer support people to be amazing, and there's no disparity, no standard deviation, I become highly effective, highly efficient, and pretty good at what I do.

• 1:41:30John Coogan?

  Yeah. Uh, Jordy, do you have something, or can I keep going?

• 1:41:33Jordi Hays?

  Uh, what's your, what's your point of view on AI psychosis in, in the, in the enterprise? John and I have been talking, there, there's a handful of our friends that we believe do have AI psychosis. They're, uh, heavy, heavy users of the tools, and you ask them what they've actually made, and they can't give you a good answer. Now, certainly, there's an entire other category that, uh, is being very productive, making useful. Things, but there's sort of a

• 1:42:06John Coogan?

  Like Tyler on our team. Tyler's extremely productive. Very low AI psychosis. You ask him for something, he just builds it immediately and it's there, usable, tangible.

• 1:42:14Jordi Hays?

  But it feels like

• 1:42:16John Coogan?

  But there's a lot of make work.

• 1:42:17Jordi Hays?

  There, yeah, there's at least one model that has created a sort of psychosis in the enterprise over the last six months. And

• 1:42:25Speaker 09

  Tyler, which one?

• 1:42:27Jordi Hays?

  Uh, we don't need to name the specific model, but there's like, um, there's a, there's the, the same maybe sycophancy that you saw with 4O with the consumer. Uh, I think is at touch the enterprise in an interesting way.

• 1:42:43John Coogan?

  Well, there's just this risk of having the AI model, uh, an employee goes to an AI model, says, help me with this. And then the AI model responds in a sycophantic way. Oh yeah, you're, you're, you're, you're, you're making a major breakthrough. You're making a huge impact at this company. And it's just shuffling, you know, spreadsheets around re, recontextualizing data, building endless dashboards. It's not actually moving the needle. Again, it gets back to the ROI question. And I feel like as a leader of a large organization that's very AI forward, this is something that you'll have to contend with. Uh, you know, are my employees, uh, using AI tools effectively? It's another question on just the effectiveness of embedding these tools.

• 1:43:19Speaker 09

  That's a great question. I think we're past that stage at Palo Alto. So what we did was we let people use AI models and AI tools to experiment. To understand the art of the possible, train themselves. Thankfully we did it without token maxing. So people have a good sense. They use all kinds of tools to understand what they are. But when it comes to enterprise efforts, we're past the stage that, you know, we've got one great Tyler. I'm sure Tyler's amazing. But I have 21,000 people, you know, one great Tyler doesn't change my, move the needle for 21,000 people in the company.

• 1:43:48John Coogan?

  I think he could. I'm going to take the other side of that, but I, I take your point.

• 1:43:52Speaker 09

  But you don't want to take Tyler away. So what's, why don't you tell me about it?

• 1:43:55John Coogan?

  That's true. Yeah. No.

• 1:43:56Speaker 09

  You told me last time, I was like, don't take my boy.

• 1:43:57John Coogan?

  Keep your hands off.

• 1:43:58Speaker 09

  Exactly. So, right. So I'm sure we have our own Tyler's. Don't worry about that. We'll be fine. But the more important part I'm trying to make is that now we sit and understand what are the 20 things we could do and how much scale impact would they have?

• 1:44:11John Coogan?

  Yeah.

• 1:44:12Speaker 09

  Right? What if I say, let's refactor customer support. I have three thousand people. Let's train model, let's train intelligence, let's build harnesses, let's build diagnostic agents, let's understand the problem using AI instead of human beings trying to diagnose it. Now that, that's not a usable model. That's almost like a business transformation project. What data do I need to do? How should my product behave? You know, what's the first agent that you want when you get the data? What data does the customer have to give? So it's reimagining how we do the whole activity is a business transformation project. I've got thirty people working on it. They're not using AI tools. They're embedding the LLM in a certain place. They're they're sort of complementing it machine learning. They're complementing with new knowledge bases. They're complementing with new data that comes from my product.

• 1:44:56Speaker 09

  So I'm trying to reduce my false positive down to low single digit, right? I can't run enterprise business AI with high false positives. So to get it to low single digits, a lot of programming goes around it.

• 1:45:06John Coogan?

  Yeah.

• 1:45:07Speaker 09

  So so the psychosis works, it it or happens if you're just randomly arbitrarily using models to do certain things. We're not doing.

• 1:45:16John Coogan?

  Yeah.

• 1:45:16Speaker 09

  We're building harnesses, building contracts.

• 1:45:17John Coogan?

  Most importantly, the psychosis sets in when you're letting the AI evaluate itself or tell you if it did a good job instead of you knowing the ground truth. If you know that what it you're looking at a false positive, you're going to remain in reality. If you ask it, is it a false positive? It says, no, it's not a false. This is the best.

• 1:45:35Speaker 09

  Dude, yesterday I was doing my earnings, okay? I had Gemini up in my script. I don't like the way it reads. Can you just give me alternate ways to say this? So it has this feature called refine. So I didn't look at it. I said refine. And I'm reading both of them. My team had written that in we simulated a cyber attack and it was possible in twenty four minutes using new for trigger AI models. When I refined it, he said, we attacked in twenty four minutes. I'm like, shit, that's what I'm gonna say. Right? So I can't let AI lose and not pay attention to what it's doing. I still need the human supervision. I need the guardrails. So.

• 1:46:11John Coogan?

  Yeah, you have to know the ground truth, the reality.

• 1:46:14Speaker 09

  That's the basic thing that it can do wrong.

• 1:46:14John Coogan?

  Yeah, exactly. Talk to me about.

• 1:46:18John Coogan?

  Not the crazy AI Doom Terminator scenario, but just I think that there is some anxiety around AI and cybersecurity, where you see these powerful models, they're able to find vulnerabilities effectively. And there's a fear that there might just be, you know, a rash of exploits that result in like, you're some emails leaking, or some social network data leaking, and just a leakier internet that causes people to be like upset. But my white pill on this, and I don't know if this is correct, is that the gap between private closed source frontier models and open source models appears to be widening. And that feels like there's going to be an increase,

• 1:47:03John Coogan?

  maybe it's six months right now, that you have access to the frontier models before it commoditizes. If that grows, that gives me more confidence, because I know you're going to go and clean up the internet and police it and be the TSA for longer. If that gap was closing, and all of a sudden it was, you know, open source and closed source model, you know, gets a new capability, and the hackers have it next week, I'm a little bit worried. I think you could do it in a week, but it's much better to have you have six months. But is that, am I interpreting that information correctly? How afraid should normal people be about the risk to a leakier internet, a less safe, less cyber secure internet in the future?

• 1:47:45Speaker 09

  So let's step back, you know.

• 1:47:47John Coogan?

  Please.

• 1:47:48Speaker 09

  All of us test our software on a constant basis before we launch it. We don't want to have vulnerabilities in our software. Now, you know, guess what? Humans write bad code sometimes.

• 1:47:57John Coogan?

  Yeah.

• 1:47:58Speaker 09

  Surprise, surprise. So what AI is doing is discovering that bad code. And we've been testing our products, and so has everybody else in the industry, and every company does that. And on average, we used to find four or five issues every month, and we'd go build a patch, and we'll fix, you know, 108 products, we'll fix the patch every month and put a patch out there. What we found in the last six weeks was what would have taken us five to seven years to find. Right, so huge dilution of vulnerabilities. Now, of course, we have people, we redirected them, we patched them, we had to put out a bigger patch and go patch all of our customers. So, a- and the point of that is that there'll be a lot of testing happening in the next three to six months, already is, with Opus 4.8 or, you know, OpenAI 5.5 and other models out there. There's a lot of testing going on in the industry, across the board. Everybody's testing their code.

• 1:48:43Speaker 09

  All that code is going to get patched in the next few weeks, months, that's what have you. Now, there'll be huge influx of patches to every IT department because you've got to patch everything right away. Everybody showed up with all these patches, so it's gonna be bumpy. But I think what we're going to be doing in the next three to six months is paying off a lot of technical debt we've accumulated over the last many years. It's bumpy, but it's a better starting point six months from now than it is today. So I'm an optimist. I think if you're a better starting point six months from now, the next model is gonna find a lot fewer things than the last one found because we had to deal with all the stuff that we found. Will the next one find something? I'm sure it will, right? But it may go back to finding five, and we seem to have survived in a world where there were five vulnerabilities found every month by software vendors.

• 1:49:27John Coogan?

  Yeah.

• 1:49:28Speaker 09

  Now, the second problem, like you said, is AI might be able to concatenate them or daisy chain them and find a way to attack them faster.

• 1:49:35John Coogan?

  Yeah.

• 1:49:35Speaker 09

  For that, it's a different problem. You know, the vulnerabilities already always exist. When somebody attacks you, the question becomes how quickly can you find it and shut it down? Now, that is a slightly longer term problem because that requires to have a much more modern stack, requires you to have way more data to analyze anomalous behavior and be able to defend against it. But we'll get there.

• 1:49:55John Coogan?

  Pay down all the technical debts, start building technical equity. I like to hear it.

• 1:49:59Jordi Hays?

  Well, it's, I mean, like, this is why AI is so exciting. You can do five to seven years of work in a month.

• 1:50:07John Coogan?

  Months, yeah.

• 1:50:08Speaker 09

  It's amazing. I think it's amazing. The only thing we have is we have to find a way of getting 21,000 people transformed without AI psychosis to amazing leveragers of AI. So they're using it in their day to day life and trying to treat it as their assistant as opposed to be afraid of it.

• 1:50:24John Coogan?

  Yeah, I love it. Last question.

• 1:50:28John Coogan?

  I don't want to get too geopolitical, but I want to know about America's compute advantage or the AI race in the context of cybersecurity, because there has been this debate over are our data centers the nuclear bombs or are the weights the nuclear bombs? If the if the weights were stolen by a North Korean hacker firm, they could wreak havoc. But I don't know if that's real, because I think you have to actually go and inference these massive models, you know, millions of times and test every little system to find the actual exploits, to actually do the hacking. And so another maybe white pill for, you know, America and the American Internet remaining

• 1:51:09John Coogan?

  secure is that as we build more infrastructure, more data centers, more GPU racks, we are able to do more of good guy inference, more cybersecurity, more testing, and our systems become more secure relative to the near peer competitors that might want to hack us but are have not invested enough in energy and compute capacity.

• 1:51:34Speaker 09

  Well, let's back up like, look, we're all internal technology optimists, right? We all live in Silicon Valley, we hang out here. Ninety-nine percent of use cases we talk about AI are good use cases. AI is doing amazing things, going to drug discovery, it's going to do a whole bunch of positive stuff, it's going to get rid of mundane things that we don't have to do. So generally, being an AI optimist is a good thing. Does America has an advantage? Yes, we are building on the last lead in the technological revolution from last round go around, right? Where all the hyperscalers live, where do all the large consumer tech companies live? Where do all the cybersecurity companies live? Ninety percent live in the United States, right? So we have the core of building the next wave of technology on the back of the last amount of success we've had. And I think all the efforts you're seeing, whether you're seeing it from the recent executive

• 1:52:18Speaker 09

  order on cybersecurity, whether you're seeing it around investment in chips, whether you're seeing it around investment in electricity, everything else, we are trying to build the underpinnings of building an amazing future with AI with us. Now, does it mean there will be an edge case of, you know, single digit percentage of where people will try and use for bad things? Every technology, every invention has had people using it for bad things. Can we protect cases? Yes, we will have protections. Will there be some? Notable mishaps, most likely, you know, it's happened. We have 2,000 ransomware attacks a year.

• 1:52:49John Coogan?

  Yeah.

• 1:52:50Speaker 09

  Why? We move on, we go solve them, life moves on, we fix them, we move through it. So I think you have to take an optimistic outlook. Now, can models be distilled? Yes. Can weights get re-appropriated? It doesn't look like you need to. Because every three months, somebody seems to build the same capability open source, they're picking it out. So. And do they need the three-month advantage or not? I think they'll get the advantage. I think the key is going to be is we have to keep sort of marching along and making sure that our infrastructure is up to speed so we can actually match sort of defense with the speed of this offense can happen. And it's always been an asymmetric battle. Cybersecurity has always had to be right 100% of the time, and the bad guys are right once. They don't need a lot of compute. They can go rent compute and come after an enterprise if they so choose to do so. And this game of cat and mouse will continue.

• 1:53:36John Coogan?

  Last question. How much of your time is spent on quantum?

• 1:53:41Speaker 09

  A lot. So what's interesting is we launched a capability where we can assess people's quantum cryptography readiness.

• 1:53:49John Coogan?

  Yeah.

• 1:53:50Speaker 09

  And we built capability where we can wrap your traffic with quantum secure keys. So even if you haven't upgraded infrastructure to quantum yet, there's a fear that quantum is succumbing, and there are nation states who might be collecting data which they're going to harvest later.

• 1:54:07John Coogan?

  Yeah.

• 1:54:08Speaker 09

  When quantum becomes a reality, hoping they can hang on to classified data and break the keys afterwards. So we're already wrapping the traffic now. Yes.

• 1:54:15John Coogan?

  That's really cool.

• 1:54:15Speaker 09

  If you know there's classified data.

• 1:54:17John Coogan?

  Yeah.

• 1:54:18Speaker 09

  And you can start sucking the data. I don't know what's in it, but it's classified. But I'm going to break it as soon as quantum's ready. And I'm pretty sure nation states will have quantum capability much before it's commercially available.

• 1:54:27John Coogan?

  Wow. That's amazing. I love that you're already working on that. That's so.

• 1:54:31Speaker 09

  We have a quantum wrapper. You can buy a wrapper from us. You can go look at do full cryptographic inventory. We can encrypt the traffic with quantum secure today across your sort of traffic nodes and make sure that your data can be intercepted.

• 1:54:43John Coogan?

  I love it. Thank you. Thank you for doing that. And then also, thank you for coming on the show. It's fantastic to catch up with you.

• 1:54:50Jordi Hays?

  Great update.

• 1:54:51John Coogan?

  Congratulations on all the progress and thank you

• 1:54:53Jordi Hays?

  Great to see you.

• 1:54:54John Coogan?

  for canceling the SaaS apocalypse, at least in cybersecurity. We're going to cancel the SaaS apocalypse everywhere. We're going to cancel all apocalypses eventually.

• 1:55:02Jordi Hays?

  Sounds like a plan.

• 1:55:04John Coogan?

  Have a great rest of your day. Thank you so much. We'll talk to you soon. Goodbye. Speaking of a company that canceled the SaaS apocalypse, we got Figma. Agents, meet the canvas. Your AI agents can now create and modify your Figma files with design system context. And we got a timeline post here somewhat related to Figma Design. Teddy said he couldn't decide on art to hang on his apartment walls. So he built a drawing machine to decide for him. This is a very cool little hack project, I guess, that it will move the weights so that it can draw on an X and Y axis. It can generate an image and then it can draw it with a pencil or a pen that you reload and it can pick an image and draw a different thing every day.

• 1:55:48Jordi Hays?

  I was calling it a generative pen train transformer.

• 1:55:51John Coogan?

  Yeah, theodore.net. What a good domain name for just

• 1:55:57John Coogan?

  an individual like solo creator. It's a generative pre-trained transformer. Pen train transformer, of course. We'll go check it out. But we have our next guest in the waiting room. We have Henry Stern from Privy back on the show. Welcome back. How you doing?

• 1:56:14Jordi Hays?

  Are you at the Rainforest Cafe?

• 1:56:16John Coogan?

  Are you at the Rainforest Cafe?

• 1:56:17Henri Stern?

  The Rainforest Cafe. I'm in Europe because in fact, TVPN is the TVPN of Europe. But I'm calling in from Amsterdam. Yeah.

• 1:56:27John Coogan?

  Fantastic. What brings you to Amsterdam?

• 1:56:30Henri Stern?

  Money 2020.

• 1:56:31John Coogan?

  Okay.

• 1:56:33John Coogan?

  And

• 1:56:33Henri Stern?

  This is a fintech conference.

• 1:56:35John Coogan?

  Yes. And I imagine you're speaking networking?

• 1:56:38Henri Stern?

  I, yes. All of the above. We, we, we, we launched a few products. We had a great launch with, with Deal today to enable contractors to basically receive stable coins globally and do a number of things with them. And then speaking, meeting customers, all that.

• 1:56:55John Coogan?

  Yeah, yeah, that makes a lot of sense. Deal's been really ahead of curve on that.

• 1:56:59Jordi Hays?

  So Deal's been dealing with stable coins for quite a long time.

• 1:57:03John Coogan?

  Oh, yeah. Did they have their own like in-house solution? Like, what, yeah, what, what, what is the nature of the partnership? How does it change? Like, what, what was the, what was the before era like?

• 1:57:13Henri Stern?

  So I think the before era, they had done a few products to enable people to, I believe, they'd experimented a lot in this space, but this is basically the coming together, I think, of the full package where they're doing three things, really. One is enabling any business to pay out their contractors in stable. So the contractor so chooses, they can receive basically stable assets as payment, no matter where they are. They're starting rollout in Argentina, but moving a lot from there. Two is they're basically putting out a wallet app. Doesn't look like that at all. It just looks like an account where you can receive your payment, but that allows you to basically hold a balance, earn on the balance, so really a savings account in many ways, and then basically spend from the balance.

• 1:57:58Henri Stern?

  And so this is, you know, sort of the whole package coming together in an exciting way. And then the third thing is that they are actually issuing their own stable coins so they can have a lot more control over how the underlying treasury is managed and so on and so forth. And so from the previous standpoint, I've been very focused on the wallets and how do you connect all of these pieces together. But then obviously across Stripe, we've been, we've been working with them on a number of products. So it's been kind of fun to watch all these products coming together really well.

• 1:58:25John Coogan?

  Yeah. So I imagine.

• 1:58:26Jordi Hays?

  So this is like the announcement from their side is really they are, they're in consumer fintech now.

• 1:58:33Henri Stern?

  Exactly.

• 1:58:34Jordi Hays?

  Very cool.

• 1:58:36John Coogan?

  I imagine internationally, there aren't, like, spending the stable coins. I understand, you know, receiving for contractor payments makes a ton of sense, earning on the money that's in the account, that makes a ton of sense. But I imagine actually, living your life in any country, even in America, it is still hard to go and spend stable coins? Or is it not because there's credit card infrastructure that can be tied in very quickly? Like, what does it actually take to, like, run your life if you're a contractor in Brazil or Egypt or Thailand and you make money from deal, they pay you in stable coins, you winds up in a wallet, you're very happy with your, your interest that you're getting, but then you want to go live your life?

• 1:59:20John Coogan?

  You want to pay your rent, you also want to, you effectively want to be able to send wires and, and peer-to-peer payments and also buy food and buy, you know, get money from an ATM at some point? Like, how does that all work?

• 1:59:33Henri Stern?

  Yeah, that's a great question. I think this is the part that's very exciting is kind of how the whole space is getting stitched together. So at a high level, at this point, there's just a huge explosion in the usage of stablecoin cards that enable you basically to settle directly on, you know, traditional rails like Visa and Mastercard from your stablecoin balance directly. So for the merchant accepting it, they don't have to think about this at all. It's the same experience as if they were getting a purchase from anyone else. And then obviously, in reverse, we're doing a ton of work at Stripe to make sure that merchants can also accept stablecoins directly if the user has, you know, the balance and so on. So we're kind of working on the platform from both angles to make sure that's completely multimodal.

• 2:00:15John Coogan?

  How high is the Great Wall of, Great Firewall in China? Like, is there any stablecoin penetration in China? Are people doing VPN stuff? Or is it, because there were some tech companies, Apple, obviously, wound up working with China effectively. Airbnb was over there for a while, if you wanted to rent a place, because, you know, it's not like the countries are actively fighting. It's, you know, it's a tense rivalry, but there are companies that have been successful there. At the same time, Facebook, not successful, Google, not successful, Uber, sort of, you know, was unable to get a foothold there. Tesla, doing very great. Model Y sell over there. So what is stablecoin adoption? Does

• 2:00:59John Coogan?

  China have their own ecosystem? Or is there some cross pollination?

• 2:01:03Henri Stern?

  No. So today, I think the situation has changed over time, but basically today, very much we're both, in a sense, and not an active part of what's happening. So we don't, for this particular, you know, speaking for Priti, we don't have customers that we serve there in terms of stablecoins, because very specifically, it isn't something that's running. So it's, you know, the approach is very much, the technology itself, in a sense, this is a file format for money, right? You're kind of sleeving your fiat into the draw set. And the way I like to think about it is like different, you know, stablecoins are like different formats. So, you know, we accept JPEGs and PNGs just the same. But

• 2:01:44Henri Stern?

  then ultimately, getting currency on the ground in every country depends on the local regulation. And in this case, China is very much not open to stablecoins today.

• 2:01:55John Coogan?

  Interesting.

• 2:01:56Jordi Hays?

  Yeah, more and more and more capital controls.

• 2:01:59John Coogan?

  Yeah, I mean, yeah, it makes a ton of sense because you load up a bunch of stablecoins and then you transfer all your money out of the country. Are you tracking any, like, is there like a mirror industry, like an indigenous Chinese, like digital yuan effort that's getting traction? Because there's been a whole, you know, open source AI movement. I'm wondering if there's, you know, Chinese versions of crypto projects that are actually maybe, you know, six months behind.

• 2:02:26Henri Stern?

  It's a great question. I mean, to be honest, I don't know. I think the honest take is twofold, which is, one, we've seen a ton of adoption in the US since Genius and, you know, with a lot of what's happening around Clarity. And so that's kept us quite busy likewise, you know, in Europe. And then the adoption in Latam and other parts of Southeast Asia is huge. There's a really vibrant set of communities in Singapore, in Korea. So there is a lot happening in the region generally, but I just haven't seen that much by way of companies working in mainland China, doing this sort of thing. So I couldn't tell you, to be honest.

• 2:03:02John Coogan?

  So in terms of maybe other countries that are the fastest adopters, it feels like America is on the frontier here. Clear regulations, some more coming down the pipe. A lot of the companies are based here. Is there, who's in second? Like, what country is leaning in the most to stablecoins broadly?

• 2:03:23Henri Stern?

  It's a great question, and I think part of it is that today, by nature, at least, it's a very cross-border technology. So it ends up being pairs, basically, as you go along. And so there's very good corridors. For example, US to Mexico, we serve a company called Felix Bago, is doing like 5% of the US to Mexico remnants corridor. And I think that's like $60 billion a year. So it's a really meaningful, the entire corridor, $60 billion a year, but it's a really meaningful pair. Likewise, I talked to a company not too long ago that was trying to help with remintances from the UAE to India. And so you've basically got these pairs as you go. The most leaned in, though, Mexico is doing a lot, and there's a lot of clarity there. And then we're seeing just generally a lot of activity in Latam.

• 2:04:07Henri Stern?

  So that's where a lot of the volumes are happening.

• 2:04:11John Coogan?

  Very cool.

• 2:04:11Jordi Hays?

  What does new startup formation look like in the stablecoin market?

• 2:04:21Jordi Hays?

  Broadly look like at this moment in time. I'm sure you get pitched all the time as an angel, but for a lot of these, it feels like in a lot of these categories, there is now a category leader and maybe less opportunity, even though we're getting so much adoption.

• 2:04:38Henri Stern?

  Yeah, it's a great question. I think basically there's like two types, right? There's very pure software plays and I think, I think Privy was such a company in that we run, you know, cryptographic infra to enable people to do things. And then there's a lot of people who want to take care of like the data piping on the ground in various countries. So I, you know, I think of these as money pipes in a sense, and you've got the software layer and then you've got the connections into local banking systems. And so we are seeing a lot of things happening, trying to build like better APIs, better abstractions on top of the aggregation. But I think there's actually a huge gap in building localized partnerships because this is really hard, obviously, in any of the individual countries that you can do. So that's one.

• 2:05:23Henri Stern?

  And then the other frankly is we're seeing a lot of stuff around agentic commerce with people basically trying to build better control systems for agents to actually take these assets and, and pay with them. So this isn't actually stablecoin specific. There's a lot happening in fiat as well and, and Stripes doing a ton in the space, but it's, you know, broadly around like service discovery. How can you find what you can pay for and actually connecting to it? It's around the actual protocols for delivering payment really easily via, you know, sort of agentic interfaces, LLMs and so on. And it's about being able to actually sort of meter spend so you don't get wrecked if your agent hallucinates. So those are probably like two of the super active areas that we're seeing. And then we're seeing just a lot more adoption is something that struck me at this, this,

• 2:06:07Henri Stern?

  you know, Money 2020 in Amsterdam, which is a lot more institutional adoption, including from like larger banks and, and players who historically have been, have been kind of waiting to come in.

• 2:06:17John Coogan?

  Amazing. Well, enjoy the conference. Thank you so much for calling in.

• 2:06:21Jordi Hays?

  Enjoy the Rainforest Cafe.

• 2:06:23John Coogan?

  Enjoy the Rainforest Cafe and we'll talk to you soon.

• 2:06:25Jordi Hays?

  Great to see you, Henry.

• 2:06:26John Coogan?

  Have a great rest of your day. Goodbye. Let me tell you about Shopify. Shopify is the commerce platform that grows your business and lets you sell in seconds in online, in-store, on mobile, on social, on marketplaces, and now with AI agents. You know, I think the AI agentic commerce could be big because if you get hit with like a $500 million bill for your agentic AI, you might not, it might be over the wire limit. So you might need to use, you might, you might need to transfer like tens of thousands of Bitcoin, low fees, this is valuable. That's the future of agentic commerce potentially.

• 2:06:59Jordi Hays?

  For all the, for all the people getting hit with half a billion dollar bills.

• 2:07:02John Coogan?

  It happens to the rest of us sometimes. Well, our next guest is Alexander Good from Post Fiat. Welcome to the show. How are you doing?

• 2:07:09Jordi Hays?

  What's happening?

• 2:07:09John Coogan?

  Hey, what's up? Not too much. On a Wednesday. Oh man, I can't hear you guys. Okay, we'll try and fix that. I want to tell everyone about MongoDB in the meantime. What's the only thing faster than the AI market? Your business on MongoDB. Don't just build AI. Own the data platform that powers it and let's see if Alexander Good can hear us.

• 2:07:32Jordi Hays?

  Hear us.

• 2:07:32John Coogan?

  We can hear you. We can hear you. He can't hear that. We need to put up text on the screen that says that we can hear him and then he will know. We need, update the Chyron, we can hear you.

• 2:07:44Jordi Hays?

  Joe Weisenthal is tracking the popularity of various running shoe brands. He says on r/runningshoegeeks, one out of 18 posts mentioned a major Chinese running shoe brand. Just last quarter, it was one out of 40. Li Ning is the big one. Li Ning, of course, signed a shoe endorsement contract with.

• 2:08:06John Coogan?

  Golden State Warriors star Steph Curry. Very interesting. I mean, haven't the basketball shoes been made in China for a long time? That was like the whole Nike thing, but I guess it's like the brand now is, is bigger.

• 2:08:17Jordi Hays?

  No, that's a big, that's, it's, it's a, Chinese companies have acquired, you know, a bunch of brands like Arc'teryx, things like that. And the next step is to actually get meaningful.

• 2:08:30John Coogan?

  What is the best Chinese consumer brand in America? The one that Americans like the most that comes from China?

• 2:08:39John Coogan?

  It's gotta be DJI, right?

• 2:08:41Jordi Hays?

  Yep.

• 2:08:41John Coogan?

  Drone, videographer.

• 2:08:43Jordi Hays?

  Yeah, Bernie was using.

• 2:08:44John Coogan?

  Like.

• 2:08:45Jordi Hays?

  Bernie was using.

• 2:08:46John Coogan?

  I know it's a controversial company because people see it as industrial capacity. But if you're just like, I, my only, I don't think about geopolitics, but I like that my wedding video had a drone in it and it was a DJI drone. You think about that very positively. Has sort of a GoPro aspirational brand. Is there anything else that pops up as Chinese brands that are loved in America? I can't really think of anything in particular. Obviously tons of stuff gets made there, but anything on the top of your mind?

• 2:09:15Jordi Hays?

  Every product on Amazon that has a name that.

• 2:09:18John Coogan?

  Yeah, but that's not, yeah, I, I was gonna say hoverboards, but they didn't have a brand. Uh, and a lot of the cars aren't here. I believe that they would be popular if you could get a hypercar for $20,000, like they make over there.

• 2:09:29Jordi Hays?

  Timu or Shein?

• 2:09:30John Coogan?

  Uh, are those like really loved brands in the same way that like?

• 2:09:34Jordi Hays?

  Marketplace.

• 2:09:34John Coogan?

  DJI feels a lot closer to like a Nike brand or an Apple brand than Shein or Timu. Uh, Timu seems more like a Walmart brand. I, I, I agree with you. It's popular, like it's certainly brand recognition is there, but in terms of brand admiration, I don't know. Can we play this video from Instagram explaining the new Call of Duty map format? They're getting into generative level design. It's not Gen AI. It's not fully Transformer based, but they're, they're creating a whole bunch of different pieces of the pie and they remix them. Let's play it.

• 2:10:09Henri Stern?

  Other three, like slabs.

• 2:10:11John Coogan?

  Look at this.

• 2:10:11Henri Stern?

  And we're able to randomize that at runtime when you're playing.

• 2:10:14John Coogan?

  Three slabs on the map. They randomize them every time you load in the map.

• 2:10:19Henri Stern?

  That is 100. We have the content to do upwards of 900. When you play a multiplayer game for a while, like you have this sense of discovery each time you play a new map, but that kind of quickly fades, right? You've played that map maybe five, 10 times. You're like, I get it. I know all the places. That never fades with Kill Block.

• 2:10:39John Coogan?

  I I I see this as an existential risk. I think this might be the end of TVPN. I think that once this goes live and we're playing this in the Ultra Dome, we're not going to remember to go live because we're just going to be gaming too much. It's entirely possible.

• 2:10:52Jordi Hays?

  I don't know. I keep coming back to Rust.

• 2:10:55John Coogan?

  Yeah? If it ain't broke, don't fix it?

• 2:10:57Jordi Hays?

  I'm so happy.

• 2:10:58John Coogan?

  Okay.

• 2:10:59Jordi Hays?

  Like Rust for me is like a vacation destination that you have so many good memories.

• 2:11:03John Coogan?

  Yeah, you don't want it remixed.

• 2:11:04Jordi Hays?

  And you're just like, no, I'm good. I like going to this beach, this place.

• 2:11:09John Coogan?

  Okay.

• 2:11:09Jordi Hays?

  And I'm happy to keep going back.

• 2:11:11John Coogan?

  He's a lot of it. He's a lot of it, folks. Uh, anyway, we have Alexander Good in the waiting room. Let's bring him in and see if he can hear us. How you doing?

• 2:11:20Speaker 10

  Hey, doing well. Can you hear me?

• 2:11:21John Coogan?

  Yeah, fantastic. How you doing?

• 2:11:24Jordi Hays?

  And fantastic, uh, green screen background or zoom background.

• 2:11:29Speaker 10

  Yeah, it's it's the new AI. It's uh, it's very powerful.

• 2:11:33Jordi Hays?

  Um, great to finally have you on the show. I've enjoyed your your, uh, posts and

• 2:11:39John Coogan?

  For a long time.

• 2:11:39Jordi Hays?

  And some of your rants. You're you're you have some of the best rants on the internet.

• 2:11:44Speaker 10

  Appreciate that.

• 2:11:44Jordi Hays?

  And I've been been looking forward to this.

• 2:11:46John Coogan?

  Yeah. Uh, how how would you introduce yourself these days? Like, how much of, uh, just, uh, yeah, I I mean, I guess it's at the table for people. Give us a little bit of backstory, uh, and, uh, and your thesis right now.

• 2:12:00Speaker 10

  Cool. Um, yeah, I used to be a normie. Uh, I worked at Citigroup, Palantir, Bally Asney, started a company, sold it. And then I got into crypto. Um, and AI changed a lot of, obviously, what I was working on and what many people were working on. And, uh, I was really just trying to figure out how to, you know, I I got very, very pilled early on on the idea that AI would just destroy people's work product. And a lot of people are getting on that train now, but I I guess I was on it in 2023. So a lot of the rants were uh, coming from processing that and going through my my own AI psychosis. And now I'm like, Now I'm like post psychosis. Now I'm just like in a code, I'm in a Codex terminal,

• 2:12:43Speaker 10

  working on building a protocol that hopefully can move the needle for, for people who, who own it and also, you know, just our investors.

• 2:12:53John Coogan?

  A lot of money like flow, a lot of like attention, money, everything flowed from crypto to AI. There was even that meme, like if you're in crypto, pivot to AI. Has, has AI strengthened your belief in crypto? Like, what do you think the intersection is? Because a lot of people jump to like, well, the agents will need, they wouldn't, couldn't possibly figure out Stripe, so they'll have to use a token. And I've never really believed that fully. I think that there's some opportunity there, but it feels like the AI trends, you're a believer in that, but also your faith in crypto broadly has not been shaken and you haven't like pivoted or like gone to like the hot thing, which is not, it's just less common these days, I think.

• 2:13:36Speaker 10

  Yeah, I mean, let's be honest, the intersection of crypto and AI has not been a particularly good intersection so far. There's been a lot of, you know, hacking events. Every human piece of code that's ever been written is being evaluated by agents right now, which is obviously created like an acceleration in hacking. X402 has kind of like gotten exploited, right? So, you know, there's been, you know, there's this kind of, you know, you can prompt engineer agents to send you money and that's like not a good thing if you're running a protocol. So it's like, do you really want a protocol that can just like send people money? I think the thing that's kind of kept me in the space or kept me excited about the space is I was always kind of fundamentally in this because of something

• 2:14:19Speaker 10

  I call the doom thesis, which is that, you know, AI might not cause productivity, productivity to accelerate. It might actually accelerate, you know, the kind of onset of the surveillance state or, you know, basically a type of world where capital is going to flee the system. And I think that thesis is very much intact. I think that's why you're seeing a lot of crypto like Zcash run very, very aggressively. And I think that's going to continue to be a story. You know, I think that's why Teal moved to Argentina. I think it's sort of like, you know, it's in motion.

• 2:14:56John Coogan?

  Where are you on Bitcoin versus other coins? I mean, obviously you mentioned Zcash. Like, how strong do you think the Bitcoin thesis is these days? And how how much maxiness needs to be considered in that thesis?

• 2:15:12Speaker 10

  The Bitcoin thesis is getting weaker by the day. You have privacy coins accelerating in terms of their adoption. I think it's notable. So, you know, the European Union and other countries tried to kill Monero, and we're not successful at that. You know, the tornado cash rulings in the United States have given clarity to coins like Railgun, which are smaller, but are good tech, and Vitalik uses it, and you know, they're big privacy summits. And Bitcoin is fundamentally not private technology. And it also has the unfortunate sort of leverage concentration from Michael Saylor, who has, you know, issued a lot of preferred and complex convertible financial instruments on top of it, which have kind of concentrated the ownership and the liquidity profile.

• 2:15:56Speaker 10

  And now is kind of driving a market downturn, right? So today's STRC drop, as well as MicroStrategy's equity situation, are driving down moves in Bitcoin. And unfortunately, like, it's hard to see that structurally reversing.

• 2:16:16John Coogan?

  Do you know if there's been a material impact on crypto from not just the capital markets moving around and founders and employees pivoting to AI, but the actual mining operations pivoting to AI? Because a lot of the neo-clouds that we know, they got their start in crypto mining, and they're sort of out of that market. Is that actually affecting crypto in any way? I haven't really followed it.

• 2:16:43Speaker 10

  Yeah, I mean, it's interesting. CoreWeave, you guys might know Vance at Framework. You know, he had a fantastic return for his fund, partly because, you know, CoreWeave literally pivoted out of crypto into AI. And there are the OG pivot stories. So they were like pre-Jason Calacanis. They did it.

• 2:17:03Jordi Hays?

  Yeah, you know, the JCal post, if you're in crypto, pivot to AI in like 2023.

• 2:17:10John Coogan?

  It was post ChatGPT, so it was a little bit late. But it turned out to be, you know, crack for a lot of people.

• 2:17:16Jordi Hays?

  Yeah.

• 2:17:16John Coogan?

  A lot of companies launched and did very well.

• 2:17:19Speaker 10

  So yeah, I mean, like, there is an interesting thing going on right now. You guys are probably going to hear about something called Pearl relatively soon. It's aggressively backed. There's rumors that thrive, isn't it? And, you know, the TLDR is that it's a proof of work AI coin. And basically, there is a paper that came out in late 2025 by SG Lang, which talks about determinism in, in basically GPUs, which allows you to use AI to mine cryptocurrency. And so this is something my, my brother started working on with Ambien, which got backed by A16Z. And then Pearl is an Israeli team, which is doing something kind of like similar.

• 2:18:02Speaker 10

  They're using map mall mining and they have a partnership with Together AI. They got tweeted out. Right? And so, so, you know, essentially the, the, the argument that a lot of these crypto AI protocols increasingly are trying to make is something called useful proof of work, which is the idea that, you know, you have a miner that can also deploy a service. So, you know, my brother is delivering verified inference. And then the Pearl argument is that you can basically buy GLM, not GLM, it's Gemma on Together AI for a 25% discount because the miners are subsidizing it. Now, the funky thing is that like, you can also buy it for like 50% less than their subsidized version on OpenRouter, right?

• 2:18:45Speaker 10

  So, so you're like, you're kind of like market cap dependent. You need this thing to really, really move in order for it to provide a meaningful subsidy. But, you know, there's an argument that I think the compelling zoomed out argument is that, you know, TSMC back in 2017 or 2018, you know, 10% of their, of their product was Bitcoin Asics. And now it's like way less than 1%. And so if you're like, okay, you want to secure money with proof of work, very, very high level. It's like, why wouldn't you secure it with GPUs?

• 2:19:18Speaker 10

  You know, there, there are arguments why you wouldn't, right? Because you're like, it's because you're literally burning GPUs, which are productive assets to secure this thing, which is even worse than burning energy for Bitcoin mining. That's kind of a separate argument, right?

• 2:19:30John Coogan?

  How how separate is this from the render token, render network from Octane where individual computers or folks with compute would would render CGI frames and then earn a token? It was not nearly as decentralized. And then I know Prime Intellect was working on this as well, trying to sort of wrap spare compute and and put it on a on a network that was sort of transacted with a coin, intermediated by that coin. It sounds like this is at a much lower level. Is that correct?

• 2:20:04Speaker 10

  It's in a, yeah, it's an architecture level. One, render and a lot of these coins, including BitTensor, actually are are stake coins, right? So so they're not actually secured by the operation of a GPU. So so this is kind of like this pearl thing is a regime shift. And it's trading it, you know, like a $2 billion FTV on on private, you know, there's there's there's token sale. So it's starting to move. It's a it's a relatively new story in crypto AI.

• 2:20:33Speaker 10

  You know, I my my protocol is like a completely different bet, you know, my essential. I think the there are some interesting intersections of crypto and AI that people are probably less focused on, which is that, you know, all of crypto is open source. So actually, when you use Codex or you use these AI agents, they're like phenomenally good at, you know, crypto work because it's in the train because it's in the training data. And it's all open source. So if you screw something up, you can just be like, hey, can you just double check this with Railgun's implementation to make sure that we're doing the same thing? And then like, you know, five minutes later, you have like a working, you know, orchard shielded transaction on

• 2:21:11John Coogan?

  As opposed to like some fortran code that's locked in some old financial institution. It's never seen the light of day, not going to be in the training set whatsoever.

• 2:21:20Speaker 10

  Exactly. And so there's like an OpEx efficiency argument in crypto. Because historically, crypto crypto has been like a very wasteful industry. You know, there's like a lot of money spent on conferences and and just like, you know, the Ethereum Foundation is like a good example of like how not to run a company. And it's sort of like Uh, there's a lot of waste in crypto and AI is bait like crypto is like the ultimate software industry where you're like, okay, I could credibly reduce engineering by like, you know, 60% here.

• 2:21:49John Coogan?

  How are you thinking about AI psychosis? You said you went through it. You got to the other side. Like, what's the state of AI psychosis? Where's it showing up?

• 2:21:58Jordi Hays?

  Is it bearish if someone hasn't fallen in and then climbed their way out?

• 2:22:02John Coogan?

  True. A true Luddite versus the, you know, white pilled, uh, got through the trough of disillusionment is in the plateau of productivity.

• 2:22:11Jordi Hays?

  It's like a trough of, uh, illumination.

• 2:22:13John Coogan?

  Yeah, something. I don't know. But how are you thinking about it? Where, where's it cropping up? Where is it bad? What does it take to get out of it if you're in it?

• 2:22:21Speaker 10

  Well, you, you kind of converge on this like conclusion, right? You, you start with the, we start with the psychosis and the threat of the psychosis is that my work is not meaningful and that everything that I've done is basically meaningless because an AI will be able to do it better.

• 2:22:33John Coogan?

  Sure.

• 2:22:34Speaker 10

  And then you actually start encountering the tools and you're like, okay, in the areas I don't understand, AI is really good. But in the areas I deeply understand, AI is like pretty bad, right? You know, there's not like a TVPN where, uh, there's like two AI avatars that are doing a better job than you guys. I mean, maybe the new A16Z one is, is that? And we just don't realize it, right? It could just be that those guys are, are, are running a really, really advanced AI system. Um, uh, there's some evidence of that. I think, I, I think it's, there's some evidence of that. I'm not going to discount the possibility. Um, but, but, you know, essentially you're like, all right, this is a, this is kind of directionally going to obsolete my work.

• 2:23:12John Coogan?

  Yeah.

• 2:23:13Speaker 10

  And so I better be the first person to obsolete it, right? Like, that's sort of where, where you end up. So the way that you get out of AI psychosis is you say, like, the only way out is through, right? So you're like, all right, how do I, how do I literally automate everything that I did before? And then how do I also just like, start to think about network effects that were impossible previously? Um, so, so I'll give you an example, like, um, You know, I'm working with, there is a pretty robust community with my crypto project and we have what we call the data lake. And the data lake is basically like, you know, hundreds of contributors who are doing tasks all day and then their aggregate intelligence gets kind of like, you know, summed up by an AI and it comes up with actionable trade ideas, right?

• 2:23:57Speaker 10

  And, and it's sort of like, you're like, okay, you can make all kinds of alt data now. I think, you know, Palantir kind of inspired me originally when they started talking about how well they're doing with corporates when they're like, hey, like, we have the biggest strat, you know, we have the best demand story in history to take unstructured data and turn it into structured data. And like, okay, that's cool in a corporate and government context, but like, nobody's ever done that with our Wall Street bets, right? Or like, nobody's ever done that with trading information. And I'm like, okay, like, I'm just gonna do that. I'm gonna take, you know, the Palantir ontology method and apply it to, you know, a group of individuals who create, you know, market alpha. And so then that's how you get out of AI psychosis.

• 2:24:40Speaker 10

  You, you could sort of identify like, what new capability does AI enable that allows you to generate the, the type of edge that you would have historically, just with a new kind of data primitive? So it's like, okay, like, you need to have a story for how you use AI to get out. That's the short answer.

• 2:24:58John Coogan?

  Yeah, it's interesting. We're sort of at this moment where, yeah, the AI is, is replacing a lot of things, but I mean, at least as an entrepreneur, like, I don't know that the moats have actually changed because people are saying like, oh, like SaaSpocalypse, like your big pile of code is no longer a moat. But if you go back and look at the literature, whether it's zero to one or Hamilton-Helmert seven powers, like, big pile of code was never a moat. It was always cornered resource, brand, network effect, complex coordination, like, these other things that were not just, oh yeah, you were the first person to build a lot of momentum around a piece of SaaS and you've, you've accumulated so much technology and software that that is your mode.

• 2:25:43John Coogan?

  It was always something else. But I don't know, how are you, how are you thinking about entrepreneurship outside of trading, outside of, uh, just like the startup ecosystem?

• 2:25:52Jordi Hays?

  Before, I wanted to ask how you think market cycles are evolving?

• 2:25:58Jordi Hays?

  Uh, we were joking in Q4 of last year that uh, we were like, great, like the Bears win, like the bubble, the bubble did pop, right? It did feel like it deflated, you had a big sell off, and then you got a new paradigm that came, you know, it came at the right moment, uh, and kind of reignited a lot of, you know, um, excitement and, you know, revenue and, and all the, all the good things that you want to see during a technology cycle. Um, but it feels like, you know, everything's been massively sped up. Um, but I'm wondering, uh, I'm wondering how, how you're, what your kind of mental model is for market cycles today.

• 2:26:42Speaker 10

  Well, the interplay of AI and the market itself is kind of accelerated. So the way that people interact with markets has changed. So they're now very commonly pasting a transcript or pasting a company's earnings release into, uh, an AI system. And those AI systems have biases, right? That are quite separate from the biases that humans have. So I'll give you an example, like the, the company ASML, um, is extremely complex. Like as a human listener to the earnings call, you would be asleep halfway through the earnings call. If you paste that into Claude Opus 4.8, it loves it. It's like, wow, this is like the most interesting, cutting edge. Like, I don't even believe this is true. Let me web search that. You know, Claude is highly engaged

• 2:27:26Speaker 10

  with ASML in a way that a human kind of wouldn't be. And the really esoteric bottleneck.

• 2:27:32Jordi Hays?

  Well, there are, there are humans that would be. There's just like a very small number of them in the world. And now there's effectively infinite, right?

• 2:27:40Speaker 10

  There are. And, and so some of these stocks that are, that are pumping like HPE, you know, like I used to trade this thing back when I was at a hedge fund. It is the most boring company in the world. And this guy, David Gills, who lives down the street from me, you know, it's like, we were trading meme stocks and now he's trading HPE, right? And so it, it, it shows you, you know, this is like a buyback, like 70-year-old guys, like we're, you know, not, nothing against wearing suits or anything, but you know, it, it wasn't an exciting story. Now it's like, okay, now it has. Triple digit, you know, data center growth and it's it's the things that are going up are kind of historically stocks that retail would have never thought of and a lot of them like SanDisk and like Micron.

• 2:28:21Speaker 10

  You know, I know one woman who's like, you know, I inherited an account from my my grandparents that had a ton of Intel, Micron and SanDisk. And I'm like, yeah, it's like literally like, you know, 75 year old people were owning these stocks because they thought they were like reliable bellwethers. And these are the things that are up, you know, 300%. So, so I think, I think just like the market composition is really different. You know, if you look at Coinbase, it's like got substantial sequential revenue deceleration. So, you know, people are not investing in Solana, they're they're investing in HPE. And so, you know, the the sort of B to B focus of the markets has completely changed.

• 2:29:03Speaker 10

  And I think that's going to continue to be the case. Like, I think, I think people are going to continue to engage with extremely complex equity stories in like a way that they just never would have before. And I think that benefits like a lot of, you know, for example, in in my industry, I think it is going to benefit coins with more complex technology stories. I think Zcash is a good example. Where it's like, okay, like there are encryption technologies that are moving forward, that are esoteric, that are hard to understand, that wouldn't have generated engagement before, but now like the UX of the of the user interacting with is like, I just copied, pasted this into Claude and it says it's the best.

• 2:29:42John Coogan?

  Sure, sure. How does lore play into those stories? I feel like I heard, I don't know if it's Zcash, but there was one about like, they brought eight people together and they all had different pieces of the key. And they were all like, they brought a journalist with and there were different computers and they broke the computers. And it was like, building all this lore, obviously this Satoshi story is like extremely lore filled. Even the Vitalik story is like, you know, build something you want like, and it feels like the like, starting the perpetual motion machine of some of these projects is important. How does that change?

• 2:30:20Speaker 10

  You know, I want to say lore becomes less important, just because the stories that I just shared with you, you know, like HPE or some Intel, like, nobody knows who Intel CEO is, right? It's like, and it's like, nobody is like invested in this story.

• 2:30:37John Coogan?

  What are you talking about? Are you saying they still think Pat Gelsinger's around in the place, or what?

• 2:30:43Speaker 10

  I think people just don't know, right? I think that's the sort of real story is that Micron, like, I don't think people know what Micron does. It's like a trillion-dollar, you know, memory bottleneck company. And so I think lore becomes less important in one way. The more contrarian view that I have is that IP universes become a lot more valuable. And so, for example, you know, one of the, there's a lot of AI stuff about Harry Potter distills, right? So you can, like, extract 98% of Harry Potter out of DeepSeek or Claude if you're motivated. And so it's like, it wasn't supposed to train on it. There's the big libgen settlement with Anthropic, like, they did train on it,

• 2:31:23Speaker 10

  and there's a big multi-billion dollar payout. But it's like, that kind of multi-billion dollar payout creates a strong incentive to kind of have IP treatment in a proper way going forward. And so, you know, Games Workshop, for example, has, you know, the cinematic universe, which is World of Warcraft, that becomes infinitely generative when you combine it with an AI system. And actually, like, what you get from, like, AMD, or why this is, I think, interesting, is that you've seen, like, a big structural crowding out of entertainment because of the enterprise focus of AI. So Anthropic, for example, like, if you listen to Dario, he's like, "Yeah, I'm not going to ever generate videos or images, because, like, that's just a waste of time," right? Like, he's not, you

• 2:32:08Speaker 10

  know, OpenAI shut down Sora.

• 2:32:10Jordi Hays?

  Yeah, we had Mikey, we had Mikey from Suno on today announcing a big round, but he has had the blessing of a lot of his would-be, you know, the most intense competitors he could have, have had to just deprioritize entertainment, because it might be a $20 billion market instead of a, you know, $2 trillion market.

• 2:32:35Speaker 10

  Yeah, and that's sort of like the interesting Givon's paradox argument, in my opinion, is that like, uh, right now, for example, Nintendo is down, you know, forty percent over the last year, right? Or, or, you know, take two is like getting, even though there, you know, we've got a new GTA game, it's, it's getting smoked. And there was a narrative that like, for a while, that, you know, video games would be a big beneficiary of AI. Cause intuitively, we see all these like, like, wow, like, what if all NPCs were, you know, LLMs? Or, you know, what if you had in-game generative content? And the reality is, given the cost structures right now and the bottlenecks, you're like, okay, um, that's just not affordable, right? You can't generate real-time generative characters and expect to break even on that,

• 2:33:19Speaker 10

  because that would be like, you know, six dollars per game session, and that's not a good investment. And as AI gets cheaper, that, that story is actually going to change, right? So, so I think that's like an interesting kind of like, like where we're going is, I actually think we're going to get like a big acceleration in entertainment and stuff, because the cost of AI stuff is going to get

• 2:33:37John Coogan?

  Yeah, you'd have to imagine that, uh, like, the, the, the, the, the most like mildly bullish take on take two would just be like, yeah, the next GTA game's going to take seven years instead of ten, or like, uh, our DLC is going to be pulled forward by three months, and that's going to accelerate earnings, like, that seems very, that seems very believable. But, uh, yeah, people have been caught up in all sorts of, oh, maybe it'll just generate it all, maybe it'll all go to, uh, some foundation model, but that does seem further away. Uh, even when we see, you know, amazing demos from Google, but again, it's like six seconds here and there, very expensive, not really persistent, a lot of

• 2:34:18Jordi Hays?

  Yeah, how is, how is Roblox done over the last year? Cause that was always my thesis there.

• 2:34:23John Coogan?

  Yeah.

• 2:34:23Jordi Hays?

  It was just, it's going to be a lot easier for somebody to figure out how to make compelling games, but, uh,

• 2:34:30John Coogan?

  Down fifty percent the last six months.

• 2:34:32Jordi Hays?

  Yeah.

• 2:34:33John Coogan?

  Not good.

• 2:34:33Speaker 10

  Yeah, these, these things are very, very bleak.

• 2:34:36John Coogan?

  Very bleak. Shouldn't be. Anyway, hopefully they build back. I'm optimistic. I like Roblox. Uh, well, thank you so much for coming on the show.

• 2:34:45Jordi Hays?

  Yeah, it was great. Great to finally have you on.

• 2:34:47John Coogan?

  It was great.

• 2:34:47Jordi Hays?

  Let's do it. Let's do it again.

• 2:34:49John Coogan?

  Let's do it again soon.

• 2:34:50Jordi Hays?

  See you.

• 2:34:50John Coogan?

  Have a good one. Goodbye. Uh, there's one more announcement we gotta share. Andor and NASCAR are teaming up to sell a $14,000 VR racing rig simulator. Uh, Palmer Lucky's back in the VR business. Uh, I mean, he already was with the Eagle Eye headset, but he's back in the consumer entertainment VR industry with this. Of course, he's not making the actual headset. I believe it is a

• 2:35:13Jordi Hays?

  Really, three days after I just put down a deposit on my own sim.

• 2:35:17John Coogan?

  Really?

• 2:35:18Jordi Hays?

  Yeah.

• 2:35:18John Coogan?

  Did you actually?

• 2:35:19Jordi Hays?

  Yeah.

• 2:35:19John Coogan?

  No way.

• 2:35:20Jordi Hays?

  Uh, but, but I, I don't think that's gonna be

• 2:35:23John Coogan?

  This is very

• 2:35:24Jordi Hays?

  That's gonna be very specific, I imagine.

• 2:35:26John Coogan?

  Yeah.

• 2:35:27Jordi Hays?

  Uh, for, I imagine NASCAR simulation, right? Cause that's, that's where they're focused, but

• 2:35:34Jordi Hays?

  very, very cool. Matthew Prince over at CloudFlare

• 2:35:37John Coogan?

  What's he saying?

• 2:35:38Jordi Hays?

  Says, well, that happened faster than I predicted. Thought it would be end of 2027, then early 2027, but a gentic traffic growing so fast that bots have now passed human traffic online for the first time in the internet's history.

• 2:35:53John Coogan?

  That's crazy. Lots of agents running around on the internet.

• 2:35:58Jordi Hays?

  Yeah, bots are now, according to CloudFlare, 57 and a half percent.

• 2:36:03John Coogan?

  Every time you fire something off, it's, it's hundreds of pages. You see it in the reasoning traces and the tool calls. Uh, let's watch this demo from Eric Gleiman, friend of the show, sponsor of the show, introducing Stack, the AI operating system that lets accounting firms take on more clients without hiring, learns your firm's process, runs the close, posts the journals, fully audited, all auditable. Uh, we're living through the biggest shift in accounting since the spreadsheet. That's a good way to frame it. And they did a very cool, uh, video for this, all practically produced. I believe this is all shot with an actual camera. They got these actual pieces. They filmed this. Not CGI, not AI.

• 2:36:45Speaker 11

  And accuracy are not negotiable. These one-off experiments

• 2:36:49Jordi Hays?

  Such a calming voice.

• 2:36:50John Coogan?

  I love Eric doing the VO. It's great.

• 2:36:54Speaker 11

  One secure place to orchestrate AI coworkers for accounting from day one.

• 2:36:59John Coogan?

  This has been the vision of Ramp since they launched and it feels like, oh, this is the moment. Of course they have to do an AI thing, but they've been like pitching this exact thing since what 2020, 2019 and working on it longer. Honestly, you go back to Parabola.

• 2:37:16Speaker 11

  For every client and it learns over time, always giving you the final say before anything gets posted and every action it takes is fully recorded and auditable. The more you build, the lighter the work gets and the more clients you can take on. Stack.

• 2:37:35John Coogan?

  Ramp Stack. They're saying it's God mode. It's God mode for accounting. It's literally God mode for the back office. Well, go check it out. We should also watch this one last video from Martin Scorsese, Black Forest Labs. I alluded to it earlier. I saw this on Instagram and I really enjoyed it. 30 seconds of Martin Scorsese storied filmmaker. Jordy, name your favorite Martin Scorsese movie.

• 2:38:02Speaker 12

  Doesn't feel modern. A town, not a village, not a city, almost medieval.

• 2:38:07John Coogan?

  Mafia, the movie Mafia. Yeah. Isn't there, is it Godfather? There is a movie. Isn't it? The Godfather? No, it's a, you're thinking The Irishman, maybe? That is like a mafia movie.

• 2:38:21John Coogan?

  Gangs of New York. No, you think Goodfellas. Or maybe Casino or Goodfellas. Goodfellas. Goodfellas. Anyway, play this. I was not paying attention.

• 2:38:30Henri Stern?

  Let's try it and we'll go from, from what you think.

• 2:38:32Speaker 12

  You need a place that doesn't feel modern. A town, not a village, not a city, almost medieval. Even the, the streets are narrower, cobblestoned. The main road through the town is twisting and turning. Put the camera higher, looking down. DeMille would have his production designers do oil paintings. This is that in a sense, conveys a cinematic, a cinematic intelligence.

• 2:38:56John Coogan?

  Cinematic intelligence is a good tagline for Black Forest Labs. I thought that was, I thought it was really, really good. And yeah, what, what, what a way to like, you know, hammer, obviously filmmaking is deeply controversial, but you get Martin Scorsese talking about it and he's at least gonna. perk up people's ears and they're going to listen to what he has to say. Yeah. And think about it, is it a tool? Could it be useful in a workflow? Could it speed something up? Is it gonna make the next Martin Scorsese movie? Probably not this year, but will he potentially be using it when he's thinking about what to work on next? Sure. So fun, fun project and very cool video from Black Forest Labs.

• 2:39:37John Coogan?

  Anyway, tomorrow we have a special show, but we will still see you at 11 a.m. Pacific. Sharp. Sharp. And leave us five stars on Apple Podcasts and Spotify. Sign up for our newsletter, tbpn.com. And we will see you tomorrow.

• 2:39:53John Coogan?

  Love you. Goodbye.