Social Network Sequel Trailer, Fable 5 Sparks Safety Debate, SpaceX IPO Watch | Diet TBPN

Diet TBPN delivers the best of today’s TBPN episode in 30 minutes. TBPN is a live tech talk show hosted by John Coogan and Jordi Hays, streaming weekdays 11–2 PT on X and YouTube, with each episode posted to podcast platforms right after. Described by The New York Times as “Silicon Valley’s newest obsession,” the show has recently featured Mark Zuckerberg, Sam Altman, Mark Cuban, and Satya Nadella. 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.

• 0:02John Coogan?

  Two major stories, a bunch of major stories, but the big one, Facebook got a movie, another movie, actually a third movie, if you count the documentary, there's been The Social Network, The Social Dilemma, and now The Social Reckoning. Only two of those are movies, The Social Dilemma is a documentary, but it's very interesting, and Anthropic got a fable, and there's been a ton of reaction, Ben Thompson was writing about it, to the rollout there, The Wall Street Journal. The announcement should have been like, the really good model launches, and people are amazed with what it can do, but they put the title Anthropic Puts Curbs on AI Models. So, I'm sure you've seen this on the timeline,

• 0:43John Coogan?

  but we'll take you through some of the debates over how restricted the model is in certain areas, bio is a big one, cyber is another one, there's a bunch of funny examples, there's a bunch of reasonable arguments for doing this type of stuff, so we'll go through all of it. So, I want to kick it off with the Social Network sequel, I want to watch the trailer for The Social Reckoning, because Jeremy Strong is playing Mark Zuckerberg. I've heard people say, hey, he looks like Zuck, like the styling is there. The one critique is Jeremy Strong looks a little bit older than Mark Zuckerberg did in 2011. They're calling him Unc? It just doesn't, I think it'll color the movie a little bit in the sense that

• 1:28John Coogan?

  the film is telling the story of this like, very difficult whistleblower situation, and it's different when it looks like a, you know, a mature adult versus someone who was young and running into these problems for the first time. So, let's pull up the trailer.

• 1:45Speaker 01

  Before I go on, I want to make something clear.

• 1:47John Coogan?

  This is how it starts.

• 1:48Speaker 02

  Okay.

• 1:49Speaker 01

  I have a hunch you're not a fan of Facebook, but I am. I am here to help Facebook, not hurt it, okay?

• 1:56Speaker 02

  You sent me a message. What would you like to talk about?

• 2:04Speaker 03

  The chairman gavels a session to order.

• 2:08Speaker 03

  You'll read your opening statement, which we'll skip past for now, that's a separate session, and we'll move to witness questioning.

• 2:17Speaker 04

  Spell your name and state your current occupation for the record.

• 2:19John Coogan?

  So is it not Fincher this time?

• 2:21Speaker 05

  M A R K C U C K E R B E R G.

• 2:23John Coogan?

  Let's see.

• 2:23Speaker 04

  And your occupation?

• 2:25John Coogan?

  Zuckerberg.

• 2:27Speaker 05

  I'm a professional defendant.

• 2:28John Coogan?

  Oh, it's co-produced and directed by Aaron Sorkin.

• 2:33Speaker 06

  Hang on, I don't understand what you're saying.

• 2:35Speaker 01

  Aren't you a tech reporter?

• 2:37Speaker 06

  Ish.

• 2:38Speaker 01

  Ish? Is this Mike Isaac?

• 2:40John Coogan?

  I don't think so. Jeff Horwitz.

• 2:45John Coogan?

  Who wrote Broken Code. He was journalist at the Wall Street Journal. He is a journalist at the Wall Street Journal. Broke in a number of global news stories. Including the Facebook files.

• 2:58John Coogan?

  Who Bill Burr?

• 3:00Speaker 05

  I'm a free speech absolutist. I'm not the one who's lying, and I'm not stopping them from seeing someone who is.

• 3:05John Coogan?

  It's not a bad Zuck impression. He's got the voice tone pretty down.

• 3:11Speaker 01

  Senior leadership knows and is doing nothing.

• 3:14Speaker 06

  I know there are easier enemies to make. The mafia would be an easier enemy to make. So what would you need?

• 3:20Speaker 04

  To stand up the story, the internal documents.

• 3:22Speaker 01

  This is a material violation of my MDA.

• 3:25Speaker 04

  We're twice as big as the biggest country on Earth. We're not frightened of Congress, we're post-government around here.

• 3:30John Coogan?

  Twice as big as the biggest country on Earth?

• 3:33Speaker 01

  We have a hundred and two hours to get everything.

• 3:35John Coogan?

  From a user standpoint? Oh, okay, users.

• 3:37Speaker 01

  I don't want to be made an example of by a guy with unlimited resources. Harm I promise you is imminent.

• 3:44Speaker 05

  People around here understand that when I say no, that's the end of the debate. I'm not two years out of a dorm room anymore, Charlie. Look around.

• 3:54John Coogan?

  Man, if they were trying to go as inspirational as The Social Network, they really missed the mark there. What happened?

• 4:00Jordi Hays?

  Yeah, so their intention was to try to fire up the next generation of entrepreneurs that to inspire-

• 4:06John Coogan?

  It seems like they missed the mark, yeah.

• 4:07Jordi Hays?

  To inspire them.

• 4:08John Coogan?

  To inspire them, to uplift them.

• 4:10Jordi Hays?

  You can build any business out of your dorm room.

• 4:12John Coogan?

  Yep, yep. If the goal of this film is to really, really take the viewer inside TBD and Meta superintelligence and what's going on with Nat Friedman, Daniel Gross, Alex Wang, like it feels like they just dropped the ball.

• 4:28Speaker 08

  Yeah, like I didn't see like anyone that even resembled Jan LeCoq.

• 4:31John Coogan?

  That is crazy. The Lama 4 moment, that could have been the crescendo.

• 4:36Jordi Hays?

  Yeah, behemoth.

• 4:37John Coogan?

  Behemoth and all the drama around that. You want drama, you want Hollywood drama, you want Oscar bait. Lama 4 behemoth. That story is gonna get put butts in seats.

• 4:46Jordi Hays?

  That's right. No, more seriously, it's hard for me to, it's gonna be really hard to not look at Jeremy Strong and Kendall.

• 4:56John Coogan?

  Oh, see Kendall, yeah, cuz you're a succession guy. So, this is a sequel to The Social Network. Instead of chronicling the birth of Facebook, it's a story based on the 2021 Facebook leak by whistleblower Francis Haugen. It's gonna be dramatic. It's not gonna make people like Facebook more, and it's probably gonna make Americans even more distrustful of tech. What's interesting here is that if you stop a random tech person on the street and ask them like, "What is the social reckoning about?", they might say Cambridge Analytica, because that was another drama moment. And I was sort of like, is it Cambridge Analytica? Is it the Haugen thing? And a lot of people don't even remember what the whistleblower story was. Little refresher there. It was an internal document leak. The Facebook files

• 5:40John Coogan?

  showed that Facebook internal employees were aware of harmful societal effects from its platforms, yet persisted in prioritizing profit over addressing these harms. Now, Nikita Beer chimed in, who now works at X, a rival platform to Threads, and said, "Zuck makes a lot of mistakes, but this isn't one of them." Meta literally had multiple teams of 1 million- Dollars per year engineers working on teen mental health and they had the agency to override big product decisions. They're probably a thorn in the key to side because he's trying to maximize click through rates, maximize attention, and he's getting pushed back from, hey, there's guardrails here. And he says, the story, this movie is about is actually a product manager who didn't get a promotion. And so

• 6:24Jordi Hays?

  The only thing with that argument is like you could make the same argument is like the cigarette company has million dollar like doctors and researchers focused on making sure cigarettes are as healthy as possible.

• 6:36John Coogan?

  Yeah, yeah, yeah. And especially with the new fertility data. I think that there's, there's a new cycle brewing of like, exactly how bad is social media? I still don't really buy the addiction thing, just because I'm familiar with like addiction defined in nicotine, which is like extremely addictive. It's chemical and like you have cravings. Like if you forget your phone, like, do you have the same cravings? It's, it's, it's sort of different. And, but there's, but there is like a very serious discussion going on around social media and it's a fax and it's

• 7:09Jordi Hays?

  The addiction thing is, is like very real. Is I was at, I was at an event last night and they required everybody to put their phones in these sort of like locked bags. So you could go outside at any point.

• 7:19John Coogan?

  And you felt sick.

• 7:21Jordi Hays?

  I didn't feel sick, but, but I noticed probably like 20 times throughout the night, I was thinking of going for my phone.

• 7:28John Coogan?

  Yeah.

• 7:28Jordi Hays?

  I didn't start having like physical withdrawal symptoms.

• 7:31John Coogan?

  Yeah, but the craving was there.

• 7:33Jordi Hays?

  Yeah, just thinking about it. It was like phone, it was like phone noise, right?

• 7:36John Coogan?

  Phone noise, yeah. This is real, this is

• 7:38Jordi Hays?

  I was having some phone noise.

• 7:39John Coogan?

  Yeah, yeah, yeah, yeah. Okay. So yeah, that's legitimate. So the question that I had really quickly is like, what is the impact on Meta? Like, we can pull up the stock chart. It's a one and a half trillion dollar company. They're trying to raise more equity for the AI build out, hire people, like, is this good, bad? What does it look like over the short, medium, long term? So, short term, I think this was amazing timing. They really got lucky because as we will talk about, like, the fact that this trailer dropped the same time as Anthropic's Fable 5 was incredibly fortuitous because Fable just took over the timeline. And no one was really talking about this in tech. Tech insiders won't really see or talk about the social reckoning this week. Case in point, I put it second in the newsletter when I wrote it up.

• 8:23John Coogan?

  Medium term, I think Jeremy Strong is going to drag Mark into like the bad group of AI leaders while he's on his Oscar tour. Like, there was a version of Facebook strategy, a meta strategy, that's just like, hey, we're like Amazon, we're like Microsoft, like, yeah, we have bets in AI, but we're not like, we're not deciding the frontier. Obviously, Mark has made the decision to hire some of the greatest researchers, invest very aggressively, and this puts him sort of at the center of the conversation around, well, what will the effect of AI be on our society, on kids? Should kids be talking to LLMs? Psychosis, all these different things will come up, just as we saw 4O psychosis and then Claude Code psychosis a little bit pop up, and people are talking about that. Like, you're priming the pumps for the next wave of like, oh, a bunch of people went into

• 9:08John Coogan?

  the meta app and like, they had a bad time, and now we got to talk about that. So, I wouldn't be surprised if the next version...

• 9:14Jordi Hays?

  What do you think Mark is going to be more annoyed about this week? The fact that SpaceX is going to be valued meaningfully higher than Meta or this trailer? It's actually a tough one.

• 9:27John Coogan?

  I don't know. I mean, I think the real one is Fable 5. If Meta was using a ton of Anthropic models, and then the new model comes out and says you specifically can't use it in MSL, the most important initiative in the company, like, that's like a pretty rough thing, where you're like, oh, I've been working with this company to develop my models for my family of apps, and now I can't use them anymore.

• 9:51Jordi Hays?

  But if they do, you know, Meta is spending billions of dollars a year with Anthropic. They have been for a while.

• 9:57John Coogan?

  ARR, but yeah.

• 10:00Jordi Hays?

  Yeah, yeah. They will spend billions of dollars this year. And the question is, like, if Anthropic does allow Meta to use their models for Meta's AI research, what does it say about what Anthropic thinks about Meta's potential in AI?

• 10:14John Coogan?

  Secretly love ads this whole time. No, I don't know.

• 10:18Jordi Hays?

  No, to me, to me, it would, it would be them not feeling like they had a

• 10:23John Coogan?

  The AGI.

• 10:23Jordi Hays?

  Ability to get to the frontier.

• 10:24John Coogan?

  Totally, totally, totally. And then, and that's an ace that's up their sleeve at any time. They can always just take the guardrails off and be like, hey, more, more, more AI, more intelligence on demand for everyone. So I think the fallout of the medium term, Jeremy Strong's going to go on this press tour for the Oscar, and he's going to have a bunch of like, really emotional, pithy soundbites, and then also be like, just viral, because it's funny to see him doing this impression. And he's very good at like, drawing. He's already gone viral for his Mark Zuckerberg impression in the past. So I wouldn't be surprised to see the next version of a Bernie Sanders press release about AI, highlight Dario, Sam, and Zuck, instead of what has historically been the order, which is Sam, Dario, and Demis. So it's always based on like, perceived industry

• 11:08John Coogan?

  power and negativity around personal brand. So they have to have a scary quote, and then they also have to have a lot of power in the industry. Zuck's power in the industry is rising. And also, with this movie, like, there's more ways to shoot, to take shots at him. Like, oh, look at what he did with the Facebook files. Remind yourself of that, because a lot of people don't really remember the details. They're going to after they see this movie. Then you can, then you can say, well, this guy's also building crazy data centers, and look at how he handled this. If that, if he handles the AI thing like that, it's gonna be bad, right? So that, so that's like, a little bit of a risk in the medium term. Long term, I don't think the social reckoning is going to matter all that much for Meta. People will complain about Meta's data centers.

• 11:46Jordi Hays?

  Why did they not get Jeremy Strong, like, a wig?

• 11:49John Coogan?

  Because also, he is playing an older, remember when he had the Caesar haircut? Yeah, so it's a different time. So people will complain about all this stuff, but they'll do it on Meta's family of apps. I don't think there'll be churn. And certainly advertisers won't pull out. It's impossible to pull out of Meta, because it just drives, it just drives up the ROAS, the return on ad spend for smaller companies. And a bunch of small businesses will just jump in and say, oh, great, like, you know, some big company pulled out and is boycotting Meta. That's great. I'm Ridge Wallet's gonna jump in, or somebody else is gonna jump in.

• 12:21Jordi Hays?

  Advertisers have tried to boycott.

• 12:23John Coogan?

  Yeah, you can on Facebook. It's impossible. So the business is just too strong. And I also don't think Mark will be singled out by a regulatory hammer should it come down hard. Like if there's a data center ban, I don't think it's going to be uniquely focused on meta. Or only Dario and Sam have like true scapegoat risk because they run pure play labs and have been so noisy about AI. And they have the biggest revenues in the category. There might be a day, there might be data center regulation, but it won't unfairly target meta. So anyway, that's my social reckoning take. Let's move on to Fable, which launched yesterday. And the model seems like incredibly impressive. I've been seeing these like vibe coded games that look really, really good. And for some of those, I haven't seen the vibe coded games hit really well on social media because you take a video of them.

• 13:08John Coogan?

  And you show the example of what it built, you share the time and people just sort of believe it could be embellished. But in general, these feel like pretty solid. Of course, like making a great game is a great mechanic. And there's needs to be multiple levels and like a single demo of like a forest putting in is not quite there. But really, really useful. And I'm sure we'll see a bunch more examples of like games as memes, simulators. And these things are going to get easier to build. That's really exciting. Of course, there was a bunch of debate on the timeline yesterday and it's bleeding into today around the latest model, Fable five. Their first Mythos class model that both seems remarkably good at long horizon tasks, like software development, knowledge work,

• 13:49John Coogan?

  but rejects requests related to biology, cybersecurity and frontier LLM development. Interestingly, I haven't seen anyone share rejections around anything else. Like, do they remember to reject like build me a nuke? Like, I haven't seen anyone try that. And it'd be very funny if it was like, oh yeah, just we didn't get around to that. Or there are so many other things, but I think a lot of those other things that you should reject, queries that you should reject, have been ironed out in previous, in previous iterations. So going back, you know, the say a slur was a big one for a while or say something rude or make a political statement.

• 14:25Jordi Hays?

  Pausing, pausing a chat, basically just like shutting down a conversation versus like switching you to a. Last performance.

• 14:32John Coogan?

  Yeah, and it creates this like screenshot that went viral pretty much continuously yesterday. And so this aligns with Anthropic's focus on safety. But as many people have pointed out, it's also just good business. You don't want competitors using your products to directly create competitors. And you also don't want financial liability or negative headlines from bad actors using your models to for nefarious purposes. Ben Thompson called it true alignment. The take safety seriously culture aligns with business value creation, which is very, very rare. Oftentimes, the like be good or your culture limits what you can do and actually hurts your business. But it's something that you do in favor of brand like Apple would probably be could probably be more profitable if they were using like diesel generators for all of their data centers.

• 15:16John Coogan?

  They went clean energy because they wanted to have an environmental brand. And over the long term, it's helped them, but in the short term, it's been rough. Of course, inexpensive. So Ben Thompson writes, what is so fascinating about Anthropic, however, is that while I'm sure some executives at the company are thinking this way, I also totally believe that the employee base broadly also happen to believe that they are doing the right thing. It's fascinating to observe. Me, the rational business analyst sees a hard-nosed but understandable decision to cut off would be competitors, Anthropic employees and advocates. The true believers see a regrettable but understandable safety decision that ensures that responsible and thoughtful people themselves, of course, will be the ones guiding our AGI future. This is true alignment and it's an incredible accomplishment.

• 16:00John Coogan?

  Facebook has tussled with this a bunch and and we already talked about that. But to be clear, the Fable 5 rejection threshold really does feel way too low from what people are saying. Tons of examples on the timeline of a biologist just saying hi to the model and getting kicked down to Opus. I saw you shared, someone just said cyber with the devil horns, the purple devil horn emoji. And it's like, we can't do, we're not going further. Of course, like bringing down like a broad hammer, you can always dial it back over time. But every rejection is this implicit invitation to hop on the phone with an Anthropic sales rep and get on the Mythos enterprise plan. And that's where the real dollars are too. The timeline is unhappy because the idea of democratizing science, technology, all of this is very alluring.

• 16:46John Coogan?

  But the pool of dollars available from all the biohackers in the world probably isn't close to the budgets available from Big Pharma. And so. You, again, you're in this like rational business analyst situation and you fail to see how this is that damaging, except to like the hacker community. The real tricky part is how AI, frontier AI research is handled. Instead of outright rejecting the query and bumping the user down to OPUS, the model appears to answer, but quietly gives a degraded answer. And this was disclosed in the model card, which is interesting. So this is again reasonable.

• 17:20Jordi Hays?

  Yeah, but not disclosed.

• 17:22John Coogan?

  To the user in the product.

• 17:24Jordi Hays?

  While they're paying.

• 17:25John Coogan?

  Which is a, which is a different path than bio and cyber. So if you, if you go LLM frontier research devil horns, it will actually give you an answer, apparently it won't bump you down immediately. But so it doesn't disclose that, which is odd. Outright rejecting requests for AI research and just saying, hey, user, sorry, this model doesn't work for that type of project. Please share, please use another model or contact sales. If you want help with this would have been much more in line with the bio and security and cybersecurity strategies. And it's also possible that they just didn't need to disclose this at all. They could have just released a model that was intentionally nerfed on AI research. It would have shown up in the benchmarks because people would have benchmarked it on some sort of AI research bench and been like, oh, weird. It's really good at all these other things, but it's bad at LLM research.

• 18:10John Coogan?

  And, and maybe that would have been a bit of a brand hit maybe, but users might never know that the model was intentionally degraded around this category of work. So that leaves this third, more worrying position intentional degradation without disclosure in the model card. There's no evidence of this, but it's possible that other workflows might be nerfed. And there's no law or even convention around disclosure. Again, maybe good business, but a weird situation to be in. So probably bullish for evals. If you're building a business on top of a big lab, but you can imagine like a legal AI company will want to be really sure that the models they're using aren't degrading unexpectedly and not telling them. It's different if you're like, hey, I've been a bio researcher for a while. I'm using this and I know that this model was never intended for me.

• 18:53John Coogan?

  Or I've been using it, but what you don't want is like, I'm using it. And now it's giving, now it's leading me astray in my work. And it's also not telling me that it's going to lead me astray, which would be like sort of an odd outcome that I, I think they'll probably address in the near future. Anyway.

• 19:09Jordi Hays?

  Yeah, that aspect triggered Dean Ball substantially. He said, my last observation, the anthropics, secret sabotage safety policy is that it undermines actually good safety policy. How? First, it is very plausible to describe this as anti-competitive behavior. Even if you are maximally sympathetic to Anthropic here, you must admit this. And it is behavior being justified in the name of AI safety. If you believe, as I and many Anthropic staff do, that it may end up being critically important to relax antitrust enforcement so that the Frontier Labs can cooperate and collaborate on some areas of AI safety, Anthropic just undermined the case for that in a large way. Overall, this massively and profoundly raises the status of the argument that AI safety has been hyped to justify monopolistic behavior by labs.

• 19:54Jordi Hays?

  I continue to believe that AI safety is a real and serious issue that is growing in importance rather than diminishing. If you agree with me, this incident is a setback, maybe a serious one. And third, he says, "I have observed elsewhere Anthropic's official corporate policy is structurally identical to the fact pattern alleged against them by the Department of War. I still think DOW acted both falsely and wrongly in that fight, but it is no longer possible to defend Anthropic with a full throat after this incident. This raises the case for heavier-handed regulations." Anthropic is making an awfully good case here that their product ought to be treated as utilities and thus their alignment practices should be a matter of-

• 20:30John Coogan?

  Oh, conveyor thing.

• 20:31Jordi Hays?

  -public policy rather than private property. "I am starkly opposed to this sort of state power grab, but Anthropic is doing more to justify it than anyone else. Thus, significant damage has been done to a community and entire approach to AI governance that was done unilaterally by Anthropic, likely motivated largely by self-interest and justified within the internal psychology of the firm through the lens of safety. I suspect this is fixable in the economic and legal senses for Anthropic, but I fear that trust has just been broken and the goodwill extinguished will take very much time to repair."

• 21:01John Coogan?

  And just to level set on Dean Ball, he wrote the AI action plan, but then also came out very publicly in support of Anthropic during the conflict with the Department of War, saying that the Department of War is completely overstepping by pushing towards supply chain risk designation, putting pressure on Anthropic for not wanting to work with the government in that particular way. Obviously, there's a whole bunch of new data that's been released and stuff and that that conversation has evolved, but he doesn't strike me as some like crazy hater. Anyway, Doug Olafman was also sort of mixed results on Fable. He says, "When it works, it's brilliant, but the unilateral guardrails make me frustrated beyond all belief."

• 21:44John Coogan?

  He has a folder of health information with like 100 days of Aura health data. This is a very logical thing that people would do with- Code extra Claude code, gather up all your health data. I actually talked to a very, very prominent person in tech about how they got into vibe coding and, and CLIs. And one of the first things they did was reanalyze some whoop data, reanalyze some health data, and he correctly detected sleep apnea and went and got it treated. Like that is, it's not the cure for cancer, but that's like incredibly awesome and like very, very good and exactly what you want to see. And who knows, maybe the thing that you detect early could lead to an increased risk of, risk of cancer in the future.

• 22:24John Coogan?

  And that would be a really, really big win for our society. And so a little bit tricky there. He says, there's a private investment in the life sciences tool space. Guess what? It's not safe. Doing some code scanning for vulnerabilities, not safe. I get the safety, but it feels incredibly out of touch for a group of a few, a few thousand people making total comp in the millions, telling me what is and isn't safe. Daria worried about inequality. I think he has to realize that he is the inequality and the unilateral gatekeeping feels whack as hell. I don't like it.

• 22:54Jordi Hays?

  Yeah, people are, people are very, very.

• 22:57John Coogan?

  Doug Olaflin is extremely optimistic about Anthropic. Like he, he recognizes the power of the models in the business and has been a very, very strong supporter. I feel like a strong user. He was one of the first people to admit to Claude code psychosis. And he's unhappy with the current situation, but these things are very tunable. I'm optimistic with more disclosures and more fine tuning and, and a smoother, smoother path. I think we can get to the good outcome.

• 23:26Jordi Hays?

  Kremu.

• 23:27John Coogan?

  Unless you're Kremu.

• 23:28Jordi Hays?

  Last, last one, Kremu says, tell me about mitochondria. It's the powerhouse of the cell, right?

• 23:33John Coogan?

  Nope. The chat pause is rough. Yeah, it's a, it's a screenshot.

• 23:39Jordi Hays?

  But maybe the harness is just saying like, sorry, if you don't know that the mitochondria is a powerhouse of the cell, like.

• 23:46John Coogan?

  It's not worth my time.

• 23:47Jordi Hays?

  I don't even want your.

• 23:47John Coogan?

  I mean, that's the thing with like the, you keep going back and forth, the good. Yeah, I mean, there are expensive questions and all of these screenshots are clearly from like $100, $200 a month plans. And I'm sure the GPUs are on fire as they always are with any new model launch from a frontier company. And it can make rational business sense. And so when everything aligns, when you're like, yeah, we're maybe being a little bit too safe, but it's actually good for our business. It's very easy to say yes to that stuff. The big question is like, where do you get tested where something, there's a hard decision and it doesn't align with your business interests. That's always tough.

• 24:24Jordi Hays?

  The, the new data retention policies as well, that also has to do with like, does it trying to-

• 24:29John Coogan?

  This one was funny because I assume that every tech company stores everything forever, basically. I didn't realize that they don't-

• 24:37Jordi Hays?

  Well, not, not for these like enterprise use cases.

• 24:41John Coogan?

  I know that the enterprises said that they wouldn't train on your data. But like, when I go into any chat app, I expect to have my data from a year ago still there. Like, I want, in fact, one of my main critiques and frustrations with these apps is that when I go to them, I want to be able to, instead of hitting the search bar, just go into the chat box and say, hey, remember a couple of months ago, we were talking about CrowdStrike? And I had you pull up some data. Can you just go refresh that, get the original thing? And a lot of times, these apps are like, oh, like, I don't really have access to all your chats. But like, the chats are clearly saved. So I, I understand people were upset about this, but it didn't fully clock for me. Why? I, I understand the training thing, like the, but-

• 25:26Jordi Hays?

  Yeah, and they're, they're very explicit. They're not using the data to train.

• 25:30John Coogan?

  They're not. Okay. Oh, well, then that's good. So the, the steel man, I believe, was that you need to hold it for 30 days because companies, probably international companies, competitors, will set up a ton of shell corporations and send out like pseudo-random queries over random times, over random accounts through VPNs. And they will triangulate something that is useful to distill or learn from the model. And so by keeping it all, you can now run analyses and look at, wait, is there a pattern where 25 different accounts that seem completely unrelated, all seem to be triangulating the same question? That seems

• 26:11John Coogan?

  reasonable to me, but stay out of my data. I'm built different. I'm not distilling anything. We need to move on to the next story.

• 26:19Jordi Hays?

  Canon says, the cashier at Home Depot just asked if I want to round up to support the SpaceX IPO.

• 26:26John Coogan?

  SpaceX IPO is going to be big Friday. We might have a surprise guest. It's going to be fun. Also, there's this crazy meta story going on, not meta, the company, but like story about a story behind Ty Morse. He's going all out trying to get an Elon interview. And it's been fascinating watching him build the craziest set in podcasting history. We're rooting for you, Ty. Good luck. Hopefully you land it. Also, Bloomberg is reporting that the SpaceX IPO is four X over subscribed. Do they know that already? Does, do you get that information at this point? That's really good news for the market, for the, for the overall. There was an interesting article. I mean, we can go through some of this.

• 27:09John Coogan?

  I think this was in The Economist. Can the market swallow SpaceX, Anthropic and OpenAI? Watch out for indigestion. But they talk about the throat, the float, the free float. This was very interesting. So obviously the, the company might be worth a trillion dollars. How much of that trillion dollars is actually actively being traded? Like, sure, fidelity might at any point in time have a price at which they're willing to buy more and a price at which they're willing to buy to sell their stake. But founders are often locked up. Founders often want to maintain control. Employees are locked up for a certain amount of time. Certain investors might be locked up unless you're Bill Gurley. Don't try and lock him up. Nobody can lock him up. He's a wild man.

• 27:55John Coogan?

  But the float is important because if it's a trillion dollar company and it's the CEO passed away a generation ago and there's all financial managers in, it's only owned by hedge funds. This was the story of Take-Two before Strauss Zelnick came in. Take-Two, the makers of Grand Theft Auto. It was entirely held by, by shareholders, by financial investors. And they were unhappy with the management team and the management team didn't have any equity. And so he was able to raise his hand and say like, I'll run this thing. And they were like, absolutely. Thank you. And they let him take over the company without really putting anything up. He didn't need to do a hostile takeover, like bring a bunch of capital to bear to get control of that company and become the CEO. And it's been a fantastic success for him and fantastic success for Take-Two shareholders

• 28:40John Coogan?

  who stuck along, stuck around for the Strauss Zelnick era. But the float matters. And at Microsoft, it's 100% floated. The free float is 100% because the founders have moved on and divested and they're not locked up. At Apple, it's like 99%. Broadcom's also at 98%. Nvidia at 96%. Amazon's at 91%. Only Jeff Bezos is considered sort of off the table. Alphabet at 90%. Tesla at 89%. And Meta is notably of the big tech companies. The lowest free float at something like 88%, 86%. The reason for that is because Mark Zuckerberg has a lot of control.

• 29:25John Coogan?

  If he sells his stake, he loses control. So no one's expecting him to sell, even if the stock goes way up or whatever. Like, he's going to maintain his position because he wants to run that company. Now SpaceX is in an interesting, interesting place. So 13% of Meta's shares are owned by Mark Zuckerberg. SpaceX plans to release locked up shares in a series of tranches. If its IPO issues $75 billion of shares, valuing the firm at its hoped-for $1.8 trillion valuation. The initial free float, because if you buy the IPO, you're not locked up. You can sell the next day if you want. But this means-

• 29:58Jordi Hays?

  Yeah, technically, it's not like the whether, whether somebody's like buying through, you know, investing through like JPM, Morgan Stanley, Goldman, all these places. Technically, you can go and sell.

• 30:13John Coogan?

  Yeah.

• 30:13Jordi Hays?

  They just might restrict you from other IPOs. So you would expect like serious. And, and this happens like on all the different apps, you know, Robinhood, Public, et cetera. If you're buying into an IPO- They they basically are asking you nicely, do not sell, but people can't.

• 30:30John Coogan?

  Yeah.

• 30:30Jordi Hays?

  So with how many retail dollars are flowing into this, I expect a lot of people that are buying, basically buying the IPO.

• 30:37John Coogan?

  Yeah.

• 30:37Jordi Hays?

  To start trading almost immediately.

• 30:39John Coogan?

  Exactly, but importantly, it's only 4% of the free float. So only 4% of that 1.8 trillion is a lot of money, but it's only 4% will be really free trading. And then, of course, during the IPO process, you're vetting investors and you're trying to get the people that will hold forever. And Elon has done a fantastic job of that with the indices. So he's gotten the NASDAQ, the S and P and a few others to commit. So although NASDAQ has already shortened the seasoning period before index inclusion to 15 trading days, the Russell slashed its waiting time to five days. Most share indices weight firms in proportion to the value only of the shares released for public trading.

• 31:20John Coogan?

  And this is important because people look at the S and P 500 and say, wait, S and P 500, a $2 trillion company coming into that, your weight, if you're just buying the S and P 500, is going to be more than 1%. It might be in the single digit percent. That's a lot. And we've been talking about the S and P 499 for the bears, right? In fact, the initial weight in the S and P 500 will be around 0.1% because it's just that 4% free float. And then it increases over time as the shares get locked up. We actually have a chart here of how the lockups work. And it takes basically.

• 31:54Jordi Hays?

  Yeah, there's.

• 31:55John Coogan?

  The full year, almost two, for everything to get unlocked. And it's also triggered based on share price appreciation. So if the shares trade up 30% or more, then more shares become unlocked and the road to 100% lock lockup ending happens slowly. And so just a little bit of an interesting deep dive into how the SpaceX IPO will fare. Anything else to talk about on that story?

• 32:23Jordi Hays?

  On that, no. Apparently Senator Warren.

• 32:27John Coogan?

  Yes.

• 32:27Jordi Hays?

  Has urged the SEC to halt SpaceX's IPO citing governance, risks, Elon Musk's control and potential foreign, especially Chinese, investment concerns.

• 32:37John Coogan?

  Hmm.

• 32:37Jordi Hays?

  She also highlighted SpaceX's role as a US defense contractor. Senator Warren has never met a business that she liked, I think, except maybe.

• 32:47John Coogan?

  I don't know.

• 32:48Jordi Hays?

  Large financial institutions.

• 32:49John Coogan?

  Who knows?

• 32:50Jordi Hays?

  She she likes those.

• 32:51John Coogan?

  Thank you for tuning in. Leave us five stars on Apple Podcasts and Spotify.

• 32:55Jordi Hays?

  Fun show, everyone. Have the best afternoon or evening of your entire life.

• 33:01John Coogan?

  And we'll talk to you later. Goodbye.

• 33:04Jordi Hays?

  We love you.