GPT-5.6 Sol Reactions, Coatue Bets Big on Blue Origin, Cheaper Vision Pro Delayed | Vincent Weisser, Ben Thompson, Rodrigo Liang, Alana Palmedo, Byron Boots, Will Mayer, Tucker Brown

(00:41) - Coatue Bets Big on Blue Origin (05:39) - Cheaper Vision Pro Dead (14:04) - Getty x Shutterstock Deal Dies (21:17) - Empty IBM Campus Goes Viral (28:52) - 𝕏 Timeline Reactions (32:44) - OpenAI Launches GPT-Live (36:21) - GPT-5.6 Goes Public This Week (41:16) - Vincent Weisser, co-founder and CEO of Prime Intellect, announced the company's $130 million Series A funding at a $1 billion valuation, aimed at building an open superintelligence stack. He discussed how Prime Intellect provides a comprehensive platform for training, deploying, and continuously improving AI models, enabling enterprises to develop their own AI agents without relying on closed-source frontier models. Weisser highlighted the company's rapid growth, achieving an annualized revenue run rate of over $100 million, and emphasized the importance of decentralized AI development for broader accessibility and innovation. (01:01:31) - Ben Thompson, founder of Stratechery, discusses Microsoft's Xbox strategy, highlighting the company's shift from traditional console sales to a subscription-based model with Xbox Game Pass. He critiques this approach, noting that while it aimed to attract a broader audience, it primarily cannibalized existing sales without significantly expanding the market. Thompson suggests that Microsoft's substantial investments in acquisitions and Game Pass have not yielded the expected growth, leading to internal challenges and strategic reevaluations. (01:29:28) - Rodrigo Liang, co-founder and CEO of SambaNova Systems, announced the company's completion of a $1 billion Series F funding round at an $11 billion valuation. He emphasized the growing importance of fast AI inference in enterprise applications and highlighted partnerships with major firms like JPMorgan Chase for secure, on-premises AI solutions. Liang also discussed the company's focus on delivering high-performance, low-latency AI infrastructure that integrates seamlessly into existing data centers. (01:40:54) - Alana Palmedo, Managing Partner at Paradigm, co-leads the firm's investment and research efforts, focusing on frontier technologies such as crypto, AI, and robotics. In the conversation, she discusses Paradigm's recent $1.2 billion fundraise aimed at investing in emerging technologies, the firm's expansion beyond its initial focus on crypto to include broader frontier themes, and the importance of supporting both early-stage founders and larger, later-stage companies. (01:50:14) - Byron Boots, co-founder and CEO of Overland AI, discusses the company's development of autonomous ground vehicles for defense applications, highlighting their modular design capable of integrating various payloads, including remote weapon stations and drones. He emphasizes the advantages of wheeled vehicles over robotic dogs for military operations, citing their payload capacity and energy efficiency. Additionally, Boots shares that Overland AI secured a $20 million contract with the U. S. Marine Corps to produce autonomous ground vehicles supporting the Marine Air Defense Integrated System (MADIS). (01:57:18) - 𝕏 Timeline Reactions (02:01:08) - Will Mayer, co-founder and high priest at Cold Holdings, began his career creating skateboard films for companies like Vans, which sparked his passion for brands and their cultural significance. He discusses his work with Polymarket, highlighting the rapid development of a viral campaign featuring Rick Rubin, and emphasizes the importance of doctrine, ritual, symbols, charismatic leadership, and identifying an enemy in building cult-like brand followings. Mayer also shares insights on the oversaturation of advertising content, the value of contrarian perspectives, and his approach to scaling creative ventures by incubating startups and accepting equity as compensation. (02:17:43) - Tucker Brown, managing partner of Compound Creative Holdings, discusses his 15-year tenure at Creative Artists Agency (CAA), where he led significant transactions, including a $100 million investment in Dude Perfect. He highlights the evolution of creators into enterprise builders, emphasizing the need for appropriate capital structures and operational support to foster sustainable growth and lasting value in creator-led businesses. 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 Codex - http://openAI.com/codex Follow TBPN: https://TBPN.com https://x.com/tbpn https://open.spotify.com/show/2L6WMqY3GUPCGBD0dX6p00?si=674252d53acf4231 https://podcasts.apple.com/us/podcast/tbpn/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.

• 0:00Jordi Hays?

  You're watching TVPN.

• 0:02John Coogan?

  Today's Wednesday, July 8, 2026, and we are live from the TVPN Ultra on the Temple of Technology, the Forces Finance, the capital of capital. Let me tell you about Ramp. Time is money, save both. Easy to use corporate cards, bill payments, accounting, and a whole lot more all in one place.

• 0:23Jordi Hays?

  That's right. It's great to be back.

• 0:26John Coogan?

  Yes, the Invest Like the Best hype song really, it really has, I don't know, it's just burned its way.

• 0:33Jordi Hays?

  It puts me into an incredible.

• 0:36John Coogan?

  Yeah.

• 0:36Jordi Hays?

  Mental state.

• 0:37John Coogan?

  Uh, 100%, 100%. You know who else is in a good mental state? Jeff Bezos, because he's getting a markup on the 25 billion he's put into.

• 0:46Jordi Hays?

  He's marking himself up.

• 0:47John Coogan?

  He's marking himself up.

• 0:48Jordi Hays?

  Alongside Kotu.

• 0:50John Coogan?

  Yeah, the news is that Blue Origin is raising outside capital for the first time. He's participating, a fund Kotu, who he has also invested in through his family office, is also participating, but there will be an opportunity for some other true outsiders to get their first slice of, of Blue Origin. Andrew Ross Sorkin had the scoop in the New York Times today. You have to wonder if this is gossip coming out of Sun Valley. The company is raising $10 billion. This is the first outside fundraise. It's hilarious to think about this 25-year-old company as being previously bootstrapped, but that's technically what it is, basically. One founder's capital, just chipping away at a really hard problem for a quarter century.

• 1:35John Coogan?

  And now we are here. Bezos has been funding this basically solo on his quest to visit the stars. He's doubling down.

• 1:45Jordi Hays?

  People can't really complain about the valuation because he's a big.

• 1:49John Coogan?

  Yeah.

• 1:49Jordi Hays?

  Part of, uh, setting the price.

• 1:51John Coogan?

  Yeah, yeah. So, uh, he's doubling down. He's putting in $2 billion directly and Kotu is getting twice as much allocation, $4 billion. There's another interesting Kotu tidbit I alluded to earlier, uh, from the New York Times piece. Bezos's family office is a major investor in Kotu's Innovative Strategies Fund, which is focused on emerging technology startups. So I'm not sure if the money's coming out of that fund specifically, but there is a connection there. He's been building a relationship with Kotu for a long time and they are optimistic about Blue Origin's prospects. The valuation is expected to be $130 billion. Big for a private company. I was, uh, listening to Gavin Baker and Travis Kalanick talk about how crazy it was when Gavin

• 2:35John Coogan?

  was at Fidelity and that he wanted to value Uber at 14 billion and everyone thought he was crazy. The valuation turned into an auction, came in at 17, and everyone was like, this is unprecedented. We've never seen a private company this big. And now, uh, 17 billion, even 60 billion in the private markets looks quaint by modern standards in an era where we have, uh, several trillion-dollar private companies, uh, many up in the 100 billion plus range. It's a wild, wild time.

• 3:05Jordi Hays?

  Brian wants us to warm up the gong.

• 3:07John Coogan?

  We gotta warm up the gong. Warm up the gong for Bezos. Give it a couple of warm-up hits just to get it warm, just to get it warm. Here we go.

• 3:23John Coogan?

  Fantastic.

• 3:25Jordi Hays?

  Nice and warm.

• 3:26John Coogan?

  Yes, so, uh, the Elon bulls are saying, oh, SpaceX is underpriced now because you have to imagine, I don't know if there's an exact revenue figure that's leaked for Blue Origin, but based on the size of that business, it has to be small. And so this has to be a very high multiple, but you're not really valuing this company on cash flow or even revenue. You're valuing it on the capability, which is it's the second company in the world, I believe, to, uh, bring a rocket to orbit, land it successfully, you know, prove reusability. They got there before China, which has been trying to copy SpaceX for years. And so lots of really solid progress. Of course, there was that setback with the, uh, Launchpad that exploded, but they figured

• 4:11John Coogan?

  out a solution to that and things are chopping along just, uh, just fine. The company is estimated to burn $5 billion this year. So this looks like a pretty standard 12 to 18-month fundraise at $10 billion. And it's burned something like 27 billion to date, which, you know, a billion a year on average over 25 years, not too bad for such an ambitious project, still a lot of money, uh, but a big opportunity. And, uh, and you have to imagine, um, there are a number of other comps like AST Space Mobile, as you like to call them. AST Space Mobile.

• 4:46Jordi Hays?

  I've owned AST Space Mobile.

• 4:47John Coogan?

  ASTS.

• 4:48Jordi Hays?

  It's 27, 28 billion dollars.

• 4:50John Coogan?

  30 billion dollar company, and I don't believe that they've gotten much to orbit yet. They've done some experiments, some tests, they're still early, but it's a huge market and we've seen how fast.

• 4:59Jordi Hays?

  They have concepts of mass to orbit.

• 5:01John Coogan?

  Yeah, and, and we've seen how fast Rocket Lab and various, uh, it's a big, really, it's a really, really big market. And so when you're going after a big opportunity and you've been working on it a long time and you got Jeff Bezos funding it, uh, lots of reasons to be optimistic. Let me tell you about MongoDB. 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.

• 5:25Jordi Hays?

  Another comp, uh, investors would certainly look at would be Rocket Lab, sitting at just under 50 billion and, uh, there'll be multiple players in launch. That is for sure.

• 5:38John Coogan?

  Well, we have some heartbreaking news, heartbreaking news. Apple has scrapped plans for a cheaper Apple Vision Pro display and is winding down work at Samsung. This is from Mac rumors. Really hits me and the other three Apple Vision Pro fans particularly hard.

• 5:56Jordi Hays?

  Brutal.

• 5:57John Coogan?

  I did, I, who did I talk to? I talked to somebody who said that they, they actually are a daily user of the Apple Vision Pro. I thought I was in the top 1%.

• 6:04Jordi Hays?

  Was it the, the founder that's making?

• 6:07John Coogan?

  Yes, that's right. Yeah, he says he watches it, he watches, he uses it every night or something like that. That's a lot of Apple Vision Pro use. Obviously, the, the, the product never really found product market fit, uh, although we have one in the studio, we've been having fun with it. I still think it's a, it's, it's an incredible piece of technology, but, uh, little bit of a chicken and egg problem. The developers never showed up and it was very expensive, very heavy, very cumbersome. It requires a lot to put that thing on to watch Lawrence of Arabia, but when you do, it's worth it. It's worth it. What did I watch most recently? I watched Dunkirk in it and I watched Godfather Part Two and Master and Commander. Master and Commander, that's a great movie, especially in Vision Pro.

• 6:49John Coogan?

  Really, you want to be in the cinematic feel, feel like you're on a, on a, on a warship. So Apple has, has reportedly stopped development on a cheaper display for a low, lower cost Vision Pro. This feels like what the industry needs to move forward. The actual display was fantastic. It just needed to be cheaper and lighter so more people could get them. That at least was my thesis, but Apple disagrees with me. What do I know? So the supplier Samsung Display expected to formally end the project by September. And if you remember, there were rumors of the crazy hoops that Apple had to jump through to get that incredible display because they really leapfrogged Meta, who had been working with the acquisition of Oculus and they'd been improving the, uh, the, the display fidelity.

• 7:34John Coogan?

  They got rid of the screen door effect. They were increasing the resolution per eye. Everything was getting better about that display, but on a very linear trend. And allegedly, uh, what Apple did was they went to Samsung and said, we know that you are working on next year's display. You're also working on displays two years out, three years out, four years out. Now what's the problem with the one that's four years out? Well, it's amazing, but it's not ready for manufacturing at scale. It's not on an automated line. It needs a lot of manual work to get it to actually produce. And there's crazy low yield. So in, in, in chips, in displays, yield rules everything.

• 8:14John Coogan?

  If you run the machine a bunch of times, you want to get 99.9% yield, 90%. In the early days, when you're prototyping a new technology, you might be getting just a few percent yield. And Apple said, that's fine. We'll just jack up the price and pay a ton for these cutting-edge displays, jump to the front of the category with the best display technology. We'll charge a fortune for it, but we'll have the best product and that will be our market entry strategy. And so I was waiting for that display technology to commoditize because it's been a few years. Uh, I thought it would just naturally get cheaper. It probably has, but it has not solved the problem of virtual reality, augmented reality. We haven't seen someone pick up.

• 8:54Jordi Hays?

  Do you think they're just bearish on the near term of people watching movies?

• 9:00John Coogan?

  Maybe, yeah.

• 9:01Jordi Hays?

  In, in, uh, in VR, because I don't, they're, they're certainly not stopping, uh, R and D on their specs and their, and their sort of everyday glasses product.

• 9:13John Coogan?

  Yeah.

• 9:13Jordi Hays?

  And so it might just be that, that they studied you and found that you're built different.

• 9:19John Coogan?

  Yeah.

• 9:19Jordi Hays?

  You're one of one, the only person on earth.

• 9:21John Coogan?

  Yeah. No, no, I mean, truly like sitting down and watching a full movie is a, is a rare experience today. People aren't reading, they're watching movies, they're just scrolling and people seem to be satisfied with their phone. And also the, the nature of a doom scroll is, is somewhat interactive, somewhat multiplayer. Although obviously people see it as brain rotting and very isolating, there is a game to, uh, to be played by, uh, actively scrolling, which is something that doesn't require virtuality, certainly not enhanced by virtual reality. But then also sometimes you want to read the comments, sometimes you want to send it to a friend. Sometimes you want to fact check it and ask AI about it, or spin off and do something else and go to someone's profile.

• 10:03John Coogan?

  So I, I think that the number of taps and user interaction experiences in a doom scroll session are obviously much, much higher than watching a film, which you just put on and hopefully you don't pause it at all, because you're engrossed the entire time from start to finish. Uh, and so if that becomes, as scrolling means more and more, maybe the, the VR experience is less, less and less relevant. So, uh, the cheaper display on the Apple Vision Pro, or maybe the Apple Vision Slim or Mini or something, I don't know. They could have used a different name. Pro always, always left the door open to just the regular Apple Vision at a more, uh, approachable price point, but the cheaper display that they were working on, uh, would have cut the headset's pixel density roughly in half.

• 10:48John Coogan?

  That's not what they need to do at all. They need to keep that pixel density because it's, that's the best part of the experience. Uh, the move likely reflects Apple's broader shift towards smart glasses. Bloomberg's Mark German previously reported that Apple, uh, paused work on a lighter, cheaper Vision Air. Yeah, that's the term, uh, in October 2025 to fast track its Ray-Ban style glasses effort. Uh, this does not mean the Vision Pro itself has been canceled. Apple refreshed the headset in October 2025 with an M5 chip, which does very little, slightly better tracking. I think you can run some applications, uh, at slightly higher fidelity, but it is, uh, by all accounts, essentially an identical device.

• 11:30John Coogan?

  But they are long overdue for a proper refresh if they were taking this seriously and thinking about this as a, as a true growth driver. I think they, they have recognized that this was, uh, an experiment that needs to be put on the back burner for at least a little bit. Uh, and so this report only suggests the cheaper display project is no longer moving forward. So the Vision Pro fans have hope. They, it's not fully canceled. Maybe there's something else going on, maybe there's more in the works. But, uh, anyway, it's, uh, it's, it's interesting. I, I, with all the acceleration and AI, I was hoping that we would get some, some, uh, you know, advancements in this, since it is an adjacent technology, but, uh, we've been few and far between on the updates.

• 12:13John Coogan?

  We gotta get an update from the big screen VR team because

• 12:16Jordi Hays?

  That's right.

• 12:17John Coogan?

  They have done a great job creating high fidelity VR that's also lightweight, but it needs to be tethered to a PC. It's a little more prosumer, a little more dev kit styling.

• 12:27Jordi Hays?

  VR really attracts these, like visionary, visionary chats

• 12:35John Coogan?

  coolest guys.

• 12:35Jordi Hays?

  That are willing to go, that, that seem, no, no, I, I'm, I'm actually, uh,

• 12:40John Coogan?

  Yeah, yeah.

• 12:40Jordi Hays?

  I could make that joke, but I won't, but just, just people that are willing to just continually look silly for a long time to ride through the hype cycles and just like

• 12:52John Coogan?

  Sure.

• 12:52Jordi Hays?

  keep building. I think big screen is in, is an example of that. The founder that we had on that has a very cool glasses, uh, demo product. He's, I, from my understanding, probably using, uh, AR and VR more than anyone else on the planet. Like so committed to just like winning.

• 13:08John Coogan?

  Yeah.

• 13:09Jordi Hays?

  Um, and so I really appreciate that about the category.

• 13:11John Coogan?

  Yeah. Let's see how Apple's doing on the news. Are they trading up or trading down? I pushed the button. Will it come up? We'll see next time. Anyway, let me tell you about Figma. Figma agents, agents meet the canvas. Your AI agents can now create and modify your Figma files with design system context.

• 13:29Jordi Hays?

  Production team swearing at the team chat.

• 13:32John Coogan?

  Well, uh, here is a crazy story. I mean, it's such a minor story, but, uh, it certainly grinds my gears. I think we're going to dig into it and see what you think, what I think, once we dig into it. But, uh, Getty Images, we know and love them from their trove of silicon, of Silicon Valley Titans photographed

• 13:51Jordi Hays?

  At Sun Valley.

• 13:52John Coogan?

  At Sun Valley, which is happening now. If you don't have a Getty Images subscription, sign up now because you're going to be first to know when the new Josh Kushner, uh, paparazzi photo drops. Um, but Getty Images was planning to merge with Shutterstock. These are two essentially stock photo sites. In theory, they should be absolutely decimated by AI image generation. Meta put out a new one, Muse, Muse Image, uh, Nano Banana Pro has been fantastic. Images two from OpenAI has been really good and like they're, they're honestly getting to the point where a lot of the example images are just like, okay, that's just a photo.

• 14:34John Coogan?

  I saw Adam Mosseri posted some on Instagram and I was like, is this AI or did you just take this photo? Like it's just you. And then he did a couple with filters and hair and crazy hair. And those are cool and, and that breeds creativity. So I think there's a lot of value in the technology. But in terms of just like, I'm trying to illustrate, I'm trying to make a point visually. Uh, I need a picture of a forest. AI image generation is very, very competitive with the stock image industry. And this should have, this should be a business that's sort of affected like the way, um, you know, uh,

• 15:08Jordi Hays?

  Yeah, I imagine a lot of, a lot of these businesses

• 15:10John Coogan?

  A cheating website check.

• 15:11Jordi Hays?

  Their net new revenue over the last couple of years is just working with labs that need

• 15:17John Coogan?

  Licensing, yeah, all sorts of things. So, um, certainly in the face of growing competition, consolidation of an industry is very normal. That makes a lot of sense. This doesn't, this doesn't seem like it should raise any regulatory flags. And yet it did in the United Kingdom. Uh, Getty Images has called off the Shutterstock deal after the UK, uh, created some, uh, barriers around it. So the $3.7 billion deal would have created a visual content company able to offer a more expansive library to users, says the Wall Street Journal. So on Tuesday, Getty delivered a written notice to Shutterstock terminating their planned tie up, which was first announced in January of 2025 and was, and received clearance from the Justice Department in America in April.

• 16:01John Coogan?

  So pretty quick turnaround in the United States. Uh, the $3.7 billion deal would have created a visual content company able to deliver a more expansive library to users, helping meet booming demand for licensed images and videos as artificial intelligence disrupts the business of content creation. Getty stock slipped 1.7% in pre-market trading. Uh, shares of Shutterstock ticked up 1%, so maybe the Shutterstock shareholders are happy about remaining an independent company. The termination came after Getty last week said that its board voted to not proceed with the deal if it meant shut, selling Shutterstock's editorial business, a condition required by the UK Competition and Markets Authority.

• 16:44John Coogan?

  So the decision to, uh, by Getty to abandon its merger with Shutterstock was ultimately a commercial choice, said the Chair of Independent Inquiry Group that led the CMA's investigation of the deal. The inquiry group found that a loss of competition between the two businesses would reduce choice for UK media outlets and could lead to higher prices. And I would, I would assume that this would give them some sort of pricing power in the face of, you know, essentially unlimited free editorial images in the form of AI generated images. If you want to go with the real thing, you have to pay a little bit more, but that sort of offsets all the pressure of the customers that are leaving and no longer paying because they don't need to pay because they're generating them with generative AI.

• 17:28John Coogan?

  So this felt like a very logical story, um, and I'm, I'm a little bit, uh, uncertain that this is a good decision for the UK to help these businesses. It feels like it's just going to wind up hurting both of them.

• 17:43Jordi Hays?

  Yeah. Are UK media outlets not allowed to use AI content?

• 17:48John Coogan?

  I don't think that there's any broad rule against it. No. So they, you would, it would be a deliberate choice. And I'm sure there's plenty, I, I can imagine that the Financial Times does not use AI images and that's by choice. And they make that very clear and there's probably a disclosure. And if they, of course, they will use an AI image if they're talking about the AI image industry. But in terms of what you see on the front page of the Financial Times, it's almost always editorial images.

• 18:14Jordi Hays?

  Yeah, that image.

• 18:15John Coogan?

  This is from Reuters. And that is an editorial distribution and something that is licensed and occasionally they need a photo for to illustrate something and they might use AI.

• 18:28Jordi Hays?

  Okay, so I was trying to figure out why the headline number here was 3.7 billion. Because it was based on the January 6, 2025 share prices, not today's prices, which are far, far, far lower. Shutter stock is sitting at 329 million dollar market cap. Getty is at 340 million dollar market cap. So these businesses have been really, really beat up. So over the period since they decided, hey, we should tie up.

• 18:59John Coogan?

  Interesting. So is there, is there a potential?

• 19:02Jordi Hays?

  So the UK, I think regulators are actually trying to just kick these companies while they're down.

• 19:07John Coogan?

  Is that what's happening? Or is it a situation where Getty, I mean, that is possible. I mean, it could just be like a, just a complete mistake. I mean, as you go back to Meta and you think about the, the, the, the UK, the US regulators blocked Meta from buying a VR fitness company that they said would create a monopoly in the VR fitness industry. And of course, like the VR fitness industry like never happened. Like it's not, it's not, not an industry worth monopolizing. And so if you think about, you know, the business model of Quest, like would it have been advantageous? Maybe, but it's worth letting Meta take a shot at that and see if having a VR fitness

• 19:48John Coogan?

  company in the portfolio will actually get that product to, you know, to scale. Tyler, what do you have to say?

• 19:54Speaker 02

  Another interesting anecdote is the UK blocked Meta from buying Giphy in 2022.

• 19:59John Coogan?

  Yes.

• 19:59Speaker 02

  So to prevent a monopoly in GIFs, I presume this could be pretty dangerous.

• 20:04John Coogan?

  Yes, which is also odd. Does Giphy power the GIFs that you see in iMessage? You know what I'm talking about? When you go to, you, you go to, there's Genmoji, there's stickers, and then there's also hashtag images and you can find images and you can send, you know, different pictures and GIFs. I wonder if these are from Giphy or?

• 20:28Jordi Hays?

  It's powered by Bing, not Giphy.

• 20:31John Coogan?

  Okay, so there's competition in this market.

• 20:33Jordi Hays?

  Yeah.

• 20:33John Coogan?

  I don't know. It's, it seems like.

• 20:36Jordi Hays?

  Canva doesn't label AI and their stock images are so annoying. So yeah, I didn't even know Canva was a player here. But it would make sense to like.

• 20:45John Coogan?

  You're, you're in Canva and you want to, you know, have a picture of a forest on your greeting card and you can pick from a library. Some of them will be generated, some of them won't. And they probably also have a, a generative AI tool where you can generate a new image. But if you're just looking for a generic stock image that's already been described, you can probably pull from whatever libraries out there. Anyway.

• 21:05Jordi Hays?

  Yeah, Canva partners with Getty Images, but then they're also featuring generated images.

• 21:10John Coogan?

  Anyway, let me tell you about CrowdStrike. Your business is AI. Their business is securing it. CrowdStrike secures AI and stops breaches. There is another interesting article in the Wall Street Journal on the cover, the front page of the main section, the, what do they, what do they actually call, what do they actually call the main section? There's the business and finance section. Is this just world news? I don't know. Anyway, on the cover of the Wall Street Journal, it's the world's creepiest office and people won't stay away. This is the New York complex vacated by IBM has become a magnet for urban explorers. We have a video of this place and if you're a scrappy startup looking to expand, this

• 21:55John Coogan?

  might be the key to success. The ultimate lock-in factory in sort of rural New York, I think. We'll, we'll get into it. So this is in Summers, New York. I don't know exactly how far away that is from Manhattan.

• 22:10Jordi Hays?

  Yeah. So if you were like a Neolab and your name was like ominous intelligence.

• 22:14John Coogan?

  Yeah.

• 22:15Jordi Hays?

  This could be a great sort of HQ, potentially, you know, your first little micro data center. Very James Bond villain sort of vibe.

• 22:28Jordi Hays?

  And yeah, it looks, it looks like you could make it, you know, really, really homey.

• 22:33John Coogan?

  How far is it from Manhattan? Let's see. Okay. It is one hour. You can be in the city in an hour.

• 22:39Jordi Hays?

  And imagine walking these halls late at night after a long day at work.

• 22:45John Coogan?

  Yes.

• 22:46Jordi Hays?

  It wouldn't be, it wouldn't be creepy at all.

• 22:49John Coogan?

  Yes. Robert Carlton was getting the mail one day in April when he saw a group of teenage boys sprinting away from nearby woods. He cut them off at the road and raised his arms. I just said, stop, it's over. The 62-year-old retired engineer recalled soon, he said, three pursuing New York State Police Troopers emerged from the tree line and arrested seven juveniles. The criminal charge, trespassing on the former IBM campus here, disrespecting international business machines. Don't do it, folks. The long vacant site has become a magnet for so-called urban explorers who prowl abandoned malls, hospitals, power plants, amusement parks, factories, and any other unused, disused

• 23:33John Coogan?

  structure that can breach.

• 23:36Jordi Hays?

  Enough of the graffiti.

• 23:37John Coogan?

  Yeah. Do you think put a?

• 23:39Jordi Hays?

  How dare they?

• 23:40John Coogan?

  Here, we got to figure out how much power this building is.

• 23:42Jordi Hays?

  All over the former office of.

• 23:46John Coogan?

  Yeah, exactly.

• 23:49John Coogan?

  What was the, what was the IBM AI Watson? Watson, the machine intelligence was probably.

• 23:55Jordi Hays?

  Still at the frontier.

• 23:57John Coogan?

  It's still at the frontier. It was super intelligent at, at Jeopardy. The global Urbex, which is short for urban exploration phenomenon. Urbex isn't new, but it's been turbocharged by artsy videos on Instagram and TikTok that spur others to create their own posts, luring more curiosity seekers. Police in Livingston, New Jersey recently warned people to stay out of the closed Livingston Mall property, Jacksonville Beach, Florida. Police issued a similar caution in April about the shuttered Adventure Landing Amusement Park. Going into an abandoned amusement park, that is thrill seeking at its best. We are aware of a TikTok challenge to explore, to explore the property. Who's doing these TikTok challenges?

• 24:41John Coogan?

  Should they, should they be allowed to post those? This is, this is dangerous for some people. I mean, seriously, you go in there, there's a lot of broken glass and, and you know, who knows about the structural integrity of a building that hasn't been inhabited in years or decades could be very risky.

• 24:54Jordi Hays?

  Is it on the market?

• 24:56John Coogan?

  Well, we have some news about that. I don't know if it's actually on the market, but I imagine if you make them an offer, they can't refuse, this property could be yours. So Sebastian Capital, the Manhattan company that manages the 723 acre site, that's a lot of size, says it has beefed up security and appreciates helps from, from police.

• 25:17Jordi Hays?

  So I'm shocked by the YouTube comments.

• 25:19John Coogan?

  Yes.

• 25:21Jordi Hays?

  That are wholly coming to the defense of this building. They're saying, I hate there's a class of people who see something like this and feel compelled to start breaking things. Why do people vandalize these kinds of places?

• 25:33John Coogan?

  Interesting.

• 25:33Jordi Hays?

  I can't believe, these are all the top comments. I can't believe people go in there busting up the place.

• 25:37John Coogan?

  That's crazy. I would have sort of expected people to be on the side of the urban explorers, on the side of the TikTok challenge, challengers. Andrew Proto, a defense lawyer, said, a 15-second clip isn't worth a criminal record. Don't do it. If you've already been arrested, you're not the first call we've taken this month and you won't be the last. Proto says he has represented or advised several minors arrested on the campus. The Summers Town Court, Town Court Clerk said some defendants received a six-month adjournment in contemplation of dismissal, meaning charges will be dropped and their arrest will be sealed if they avoid trouble. Some explorers who have posted about the IBM site say they follow and observe and preserve ethos and reject vandalism.

• 26:20John Coogan?

  They say they're driven by curiosity, the thrill of roaming forbidden spaces and a zeal to document discoveries and that they're careful and know their limits. Quote, "It actually gives me hope when I hear that kids are out there getting into trouble," said Bradley Garrett, a cultural photographer and author of the book, "Explore Everything: Place-Hacking the City," about his own Urbex of adventures. He sees urban exploration as a gateway drug in a good way, sometimes into intellectual curiosity about history and culture. So you go, you break into this abandoned building and then next thing you know, you're an IBM consultant, driving enterprise value for S and P 500 companies, traveling businessman. Could happen. Who knows?

• 27:03Jordi Hays?

  Could happen. Ragav wants to turn it into an Aman.

• 27:05John Coogan?

  Aman would be good. Data center seems obvious, depending on the power.

• 27:09Jordi Hays?

  What about the first Aman with a data center? With some local AI.

• 27:15John Coogan?

  Both. So quickly, you asked about the price. In 2016, IBM sold the property for $31.75 million and it's owned by a LLC that shares a Fifth Avenue address with Sebastian Capital, so everyone suspects Sebastian's in on the deal, a plan to convert it to a private school, founded during COVID. And Sebastian said it is considered.

• 27:39Jordi Hays?

  Floundered?

• 27:39John Coogan?

  Yeah. Foundering is like failing, but yes, founded. So floundered would be, you know, another appropriate term for what happened, but it did not, it was not successfully converted into a private school, obviously. But if you, if you want to take a wild swing, go pick it up, make Sebastian Capital an offer, let's see. I wonder what it would trade for today. Lots of work to be done.

• 28:05Speaker 02

  Car and driver.

• 28:07John Coogan?

  Quickly, Tyler had something on the IBM complex.

• 28:09Speaker 02

  Yeah, so, okay.

• 28:10John Coogan?

  You planning to go?

• 28:11Speaker 02

  1.1 million square feet.

• 28:12John Coogan?

  Okay.

• 28:13Speaker 02

  Historically, you'd see, like, I think, something like around 10 watts per square feet.

• 28:17John Coogan?

  Okay.

• 28:18Speaker 02

  Um, maybe it's a little bit higher tech, but it's IBM.

• 28:20John Coogan?

  Okay.

• 28:20Speaker 02

  It is, um, I, an estimate, I think, is reasonable, is around 20 megawatts.

• 28:26John Coogan?

  20 megawatts?

• 28:27Speaker 02

  Yeah, so you're looking at a small data center.

• 28:30John Coogan?

  Is there any natural gas in the ground? Can we frac? Can we put solar panels on the roof? Can we build a nuclear reactor there? What are our options if we want to get this thing churning out tokens? Turn it into a token machine? Interesting. We should go check it out. Anyway, let's move on to the New York Stock Exchange. Want to change the world? Raise capital at the New York Stock Exchange. Just do it. And Jordy.

• 28:54Jordi Hays?

  Car and driver says 2026 Lucid Gravity available with no interest due to no interest.

• 29:02John Coogan?

  What?

• 29:03Jordi Hays?

  Uh, several months after launching the 2027 Gravity, Lucid still has plenty of 2026 models, so it's offering customers an interest-free loan incentive.

• 29:13John Coogan?

  Okay. I wonder how long there's no interest on the loan. Uh, that seems like a good deal. The Lucid is a very well-reviewed car, very luxurious interior, very polished product. Uh, for some of the higher, more performance-oriented trims, incredible 0 to 60 times, incredible range. I think Larry David has one. Um, they're, they're, they're well-reviewed cars, but it's a electric vehicle, which has high depreciation, and then you're, uh, signing up to work with a company that a lot of people think might not be around forever. So what does the maintenance and repair and flow of products and new parts look like in a decade? And so that is a risk factor for a lot of people.

• 29:58John Coogan?

  But, uh, the Lucid Air Gravity, I think it looks sort of cool. It's sort of like a, it's a little bit like it wants to be a minivan, it's trying to do the job of a minivan, but they didn't just lean into the sliding doors. At least the Model X realized that what makes the minivan great is the, is the accessibility of the doors, and they made them cool doors by making them gullwing or butterfly doors.

• 30:22Jordi Hays?

  Yeah, the problem here is that when I looked up Lucid Gravity for sale, I'm seeing a 2026 with just 3,000 miles, that's selling for 125,000.

• 30:33John Coogan?

  That's a lot of money.

• 30:33Jordi Hays?

  Dollars. That's a lot of dollars. And regar, even if you're paying no interest, it's probably losing, you know, it's depreciating thousands of dollars, uh, a quarter. And so it's still gonna be a rough ownership experience.

• 30:50John Coogan?

  Yeah. Yeah. Um, it will be interesting to see where they end up. I know they already have some big investors and potentially some corporate partners. Uh, it could eventually be rolled into another, uh, organization as sort of the EV strategy of a larger automotive group. Who knows? Um, did you want to, did you, did you want to look at End of Stay? Did you see this? We gotta pull up this video because we were talking about exactly this. The 964 Cabriolet Junior is a Porsche 964 that has been shrunk, actually shrunk, exactly what you said. Look at this video, Jordy. This is what, this is what you asked for.

• 31:34John Coogan?

  Uh, fully customizable, and look at this, it looks normal size, but wait until this guy gets in it. This is amazing. So it is a go-kart that has the bodywork of a Porsche, and so you can get one of these, they go like 60 miles an hour or something like that, like they're pretty fast. Um, yes, so I think if you put a, a governor on this vehicle, you'd have what you want, which is the, the, the vehicle for the kid that is fun, engaging, and, uh, highly stylized and made with precision. The group behind this is called End of Stay, S-T-A-Y, has, uh, periods after it, so I imagine it's some sort of acronym, but, uh, what a while.

• 32:19Jordi Hays?

  They did it.

• 32:20John Coogan?

  Yes.

• 32:21Jordi Hays?

  They did it.

• 32:22John Coogan?

  They did it.

• 32:23Jordi Hays?

  I, I'm interested.

• 32:25John Coogan?

  You can see the YouTube video here, the preview of the 964 Turbo Junior High Performance version. It's an absolutely, uh, crazy, crazy video that I, uh, got organically served to me, and I was like, this is what we've been looking for, for sure. This is exactly what we were talking about.

• 32:43Jordi Hays?

  I need one.

• 32:44John Coogan?

  I think you do.

• 32:45Jordi Hays?

  I need one.

• 32:46John Coogan?

  Anyway, uh, GPT, uh, GPT Live, a new generation of voice models for natural human AI interaction, launched today from OpenAI, rolling out to ChatGPT starting today, taking shots at that guy on Instagram who's unsatisfied with legacy voice models. Uh, it's a lot smarter.

• 33:05Jordi Hays?

  I have a feeling he's gonna find a way to keep using the old models.

• 33:09John Coogan?

  Oh, maybe, or he'll just become, uh, who's the Pliny the Liberator? He's sort of the Pliny the Liberator of voice models, in that I know he's taking shots and he's like very unhappy with the quality of the voice models, but at the same time, he does a great job of actually exposing and finding limitations, not necessarily jailbreaks, but he, he, by watching those videos, you can very clearly understand, okay, I understand what's going on here, it's not, it doesn't have tool use, so it can't count, it can't set a timer, it doesn't have, uh, you know, a long-running context window that can stay with you for a long time, so it gets, it gets lost, can't talk to each other, there's a whole bunch of different ways, and once you have all of those documented by just a, uh, he's basically like a white hat hacker, he's, he's.

• 33:53Speaker 02

  He found a bunch of benchmarks.

• 33:55John Coogan?

  Oh, wait, what?

• 33:55Speaker 02

  He found a bunch of like good.

• 33:56John Coogan?

  Yeah, yeah, yeah, basically benchmarks, like if you can satisfy his, his videos and run those experiments again in a satisfying way, you probably have a better product at the end of the day. So, I don't know, I think it's, uh, I think it's cool, I'm excited.

• 34:09Jordi Hays?

  Very, yeah, I'm super excited for this one. I, I wonder if the, yeah, the real-time nature unlocks, like, under, unlocks, like, almost like a new kind of like pod, like real-time, like podcast format, where you can just actually have a conversation about a topic.

• 34:26John Coogan?

  Yeah.

• 34:27Jordi Hays?

  Right?

• 34:27John Coogan?

  Yeah, we should have it sitting right here. Uh, it has a full duplex architecture, which means that it can listen and speak at the same time, so it can jump in appropriately.

• 34:37Jordi Hays?

  And it can also route, like, certain questions to smarter models.

• 34:41John Coogan?

  Yes.

• 34:42Jordi Hays?

  To run in the background, you can still have a conversation.

• 34:44John Coogan?

  Yes.

• 34:44Jordi Hays?

  Very cool.

• 34:45John Coogan?

  Which is great, because my default flow, like, if I'm driving, which I don't think I should be doing, but I will tap the record button, not the voice mode, and I will dictate a really long prompt, and then I will click send, and then I will wait for it to cook, and then I will have it read that back to me, and that's all just like a couple extra clicks, a couple extra steps to get what I really want, which is, um, a conversation. I was interested about the idea of, uh, where this goes, like, is there, is there a world where you are talking to a model and you can have sort of multiple threads of conversations going within one conversation?

• 35:27John Coogan?

  So you can say, hey, I need you to go and do a deep research report on, uh, you know, IBM Watson, and it goes and cooks on that, and then while it's doing that, you're still talking to it, and you're still having a conversation, but then you also might say, well, catch me up on the latest news, and it has that at the fingertips, so it can talk to you about the latest news, and then you can go, and it can say, hey, by the way, I'm done with the report, or I'm done with the, the code that I wrote, but you're talking to me about other problems in your organization, other decisions, other research projects that you have, and it's all done in one continuous conversation, like, you know, me interacting with you, like, you know, we might, we, you might, uh, delegate something and then continue the conversation and then move on.

• 36:10John Coogan?

  Oh, I gotta text this person, okay, I'll text them, they'll do that, they'll come back to me in 20, 20 minutes with a revision to the, the thing that we're working on, but in the meantime, let's talk about whatever else we got going on today. So, interesting to see where this goes. In other OpenAI news, GPT 5.6 Soul, along with Tara and Luna, will, will launch publicly this Thursday. Preview access is expanding globally, lots of people having fun with this, some people got early access, other people were joking about, uh, clearly not getting early access, but wanting early access, um, but a lot of people are having fun.

• 36:44Jordi Hays?

  Tyler Cowen. What did, uh, what did John Palmer say?

• 36:47John Coogan?

  What'd he say? He's in here?

• 36:49Jordi Hays?

  No, he, he had a.

• 36:51John Coogan?

  He has one, he says, uh, it seems I'm allowed to talk about 5.6 now. I wasn't one of the testers, but I heard it's really good. Again, I haven't used it yet, but this will probably be my default model from here on, when I get access. It's a good one. Uh, people are having a lot of fun. Uh, Kid Langton says, uh, I can finally talk about GPT 5.6, I've been using it for many months, if not decades, and what is glaringly obvious to me now as I look back on my life is that you did not have access to it.

• 37:19John Coogan?

  It's very fun. People are very happy with it. Interesting, there's a, there's a little bit of a fork around like when, how the vibe around 5.6 is different than Fable 5, when, how interactive it is versus, uh, somebody said like, uh, Fable is like light speed across the galaxy and, uh, and Soul is like a Porsche on the Nürburgring, more engaging. I don't know. Uh, it seems like we're, we're entering, uh, some, some fragmentation in like the right tool for the job.

• 37:51Jordi Hays?

  Yeah. Ethan says, my big takeaway is that both Soul, Ethan had access. So he says, both Soul and Fable represents, represent jumps over previous models and have opened a large gap with the next best AIs. People will have preferences for one or the other, but if you're doing any work where better intelligence matter, uh, these two, those two models are your only choices. Dean says, I think for me, the main takeaway with Soul and Fable is that I can't remember a time when the leading models were A, so decidedly ahead of everything else and B, so distinct from one another. So, um, so yeah, a lot of people are talking about how they're using the models together.

• 38:26John Coogan?

  It's probably a function of, uh, just tighter, tighter distillation protocols. Like there's less pollution, like also like not everyone's training on the exact same data anymore because, uh, it used to just be everyone just trains on the entire web corpus. And now, uh, each company has different data sets, different data brokers, different usage patterns that they can train on, and then get different sort of research tastes. So go give it a try.

• 38:53Jordi Hays?

  Theo says, I forgot to mention this, GPT 5.6 Sol's world leading in computer use. It made me use it 100x more. When we lost access to 5.6, I quickly started to go insane without it. So yeah, people in the early access program obviously lost access for a couple of weeks.

• 39:07John Coogan?

  Sure.

• 39:08Jordi Hays?

  Uh, due to the DC action. Um, but yeah, I saw some people saying like, what are some good uses for computer use? And it's like, anything on your computer. What do you use your computer for? They're not all going to be great uses, but yeah, I'm curious.

• 39:25John Coogan?

  I still think it's worth, it's worth, it's always worth like popularizing those like, uh, genuinely useful, um, patterns. I mean, like deep research was that in many ways, just, uh, a very, like, it gave you a 20-page PDF report on the topic that you were asking for, and it did a lot of the work for you. And I still think the, the, uh, come up with a good prompt idea, find the right, uh, reason to use AI is a problem for a ton of people. There, there are, there are plenty of people that adopt the latest AI tools, immediately find what the model's good at, how to use it, how to use it profitably, effectively, not waste tokens, not waste their time. Um, but other people need ideas. They need to know that there's a new capability.

• 40:10John Coogan?

  You see this with the, with the chat app. You see this in the voice mode where people are like, uh, you know, like judging a model based on hallucinations that disappeared a year ago, or judging a model based on some, oh, it has a cutoff window and that hasn't been a thing for a year, but it's still burned its, burned its way into like the, the memes of the online culture. And thus, uh, people need to be updated on that. And so, uh, I'm, I'm in favor of coming up with good computer use, uh, demos. The real one is just, can it play Counter-Strike effectively? That's the real computer use test. Can it rank me up to global elite? Can it downrank me so I can smurf a little bit? This is, this is the future. This is what I want. Anyway, let me tell you about Railway.

• 40:57John Coogan?

  Railway is the all-in-one intelligent cloud provider. Use your favorite agent and to deploy web app, service databases and more, while Railway automatically takes care of scaling, monitoring and security. I'm extremely excited to welcome our next guest to the show. We have Vincent Weisser from Prime Intellect. He's the co-founder and CEO, and he has some amazing news for us. Tell us what happened, then we'll dig into the news, the market, the story, the company. But first, give us the news because Jordy's already warming up over here.

• 41:31Vincent Weisser?

  Amazing. Yeah. So, um, we've announced that we've raised 130 million, um, at a billion with Prime Intellect.

• 41:37John Coogan?

  Wow.

• 41:38Vincent Weisser?

  To build, um, the open super intelligence stack.

• 41:43John Coogan?

  Fantastic. Congratulations. Uh, yeah.

• 41:48Jordi Hays?

  What I, what we were talking about before the show is, is the, the, the, the ratio between dollars raised to run rate.

• 41:55John Coogan?

  Yeah.

• 41:56Jordi Hays?

  Absolutely, uh, incredible.

• 41:59John Coogan?

  Yeah. How much have you raised before this round?

• 42:03Vincent Weisser?

  Um, just 20 million total. So I think we've actually got to this run rate on like less than 20 million spend.

• 42:09John Coogan?

  That's crazy.

• 42:10Jordi Hays?

  Which is north of, which is north of 100.

• 42:14Vincent Weisser?

  Yes.

• 42:14John Coogan?

  That's amazing.

• 42:15Vincent Weisser?

  Yeah, we, we doubled it, I think, since we actually closed the fundraise.

• 42:19John Coogan?

  Yeah.

• 42:19Vincent Weisser?

  Um, to 100. So basically, um, yeah, on track to, um, grow much more from here on.

• 42:25John Coogan?

  Okay. So, uh, reset me on the latest and greatest in the actual product offering. What customers are coming to you? Is it, I have used a frontier model to, you know, figure out that AI can in fact do some agentic workload within my organization. I want to cut costs and you're going to RL an open source model for me, fine tune it. And then am I paying you for tokens? Am I, are you getting me GPUs? What is the full suite of products that you offer customers these days?

• 42:55Vincent Weisser?

  Yes. So basically it is kind of like the full stack to do training, deployment and continue improvement of models. I think customers basically come, um, to us for anything ranging from compute to inference to the full RL and post-training stack to, to train models. And I would say it's like, if I, customers coming from different buckets and categories, a lot of them are like the AI natives who are basically, um, starting out and oftentimes also like being multi-model, right? Like they, they use like the frontier models, they use open models, um, for different use cases. Like good examples, like, uh, RAM, for example, uh, as one customer, um, more in this like AI native bucket, um, a lot of the big AI native startups. But then we've also increasingly, um, been able to track a lot of the, uh, new AI labs, like a lot of the Neo Labs.

• 43:42Vincent Weisser?

  So, um, a lot of those are using our full stack from like large scale clusters to our pre-training and post-training and RL stack. Um, but then also increasingly like traditional enterprises and even sovereigns coming to us, um, who want to have their own end-to-end, um, stack that they can run like on-prem. So how I see this is to some extent, it's like, there's just increasingly, I think, like a demand for having your own like sovereign AI stack, right? It's like your own open end-to-end stack. But I think this is almost like complementing in many cases, like, um, the other like frontier, like models and, and stacks.

• 44:18John Coogan?

  And you're using sovereign in not just the geopolitical sense, but also if you're a Fortune 500 company, you want to own your stack from start to finish potentially.

• 44:28Vincent Weisser?

  Exactly. Yeah. I think like there was a lot of reasoned, uh, talk about this. Obviously like folks like Satya and Alex Carr, uh, were like also making, making those, those points and arguments over the last few weeks. And I think it's increasingly something I think where like a lot of like enterprises, um, want to basically build this like compounding data mode and flywheel, where ultimately, I think the future that we're starting to see is a lot of these companies want to build basically self-improving agents. And the way to do this, I think is generally you, you have an RL environment for you, you scale on it, and then you ultimately deploy that, um, into production and then continuously improve with the user interacting with that agent. It's almost like the, the Tesla autonomy, um, like levels, but like for knowledge worker agents.

• 45:14Vincent Weisser?

  So I think like the RAM example, I think was one that people, um, um, really resonated with, but basically then being able to, uh, within a, a week and less than 50K of, of training spend.

• 45:25John Coogan?

  Wow.

• 45:25Vincent Weisser?

  Uh, out compete a frontier model at, uh, automating spreadsheets and then finance, um, at a fraction of the cost of, of running the cheapest, uh, models. Basically it's like they were able to outperform Opus at a fraction of the cost of Haiku and, and like 30% faster, like much more tailored to the use case. So I think in many ways, like these like specialized agentic use cases are a big unlock. And I think, uh, in many ways, you still need the godlike, uh, big mega model to, to do the orchestration of planning. But then I think oftentimes execution, I think, happens, uh, can happen with these specialized sub-agents. So I think, um, yeah, those have been extremely, I think, uh, like fruitful and, and useful for a lot of, uh, the companies adopting and, and training their own agents. Um, then I think the other big trend is just like an explosion and, and new entrants that are like taking, uh, model training seriously.

• 46:15Vincent Weisser?

  Obviously hundreds of Neo Labs really got stood up in the last probably 12 to 24 months. Um, so we started powering a lot of those, like with our full stack, including with also large compute clusters. So like, and we also joined us as part of the round and, uh, we've been like, we've since day one, basically operated, uh, large clusters. And, and this is in, in a lot of part why we need so much money, right? It's like to basically be, uh, standing up, um, more and more reviews. Like right now we run like 15,000 reviews and scaling to like over 30,000. And so this is like a lot, a lot of the capital needs even.

• 46:50John Coogan?

  And walk me through when you're pressing the huge cluster button. Is that because there's broad demand for, uh, specific models that you need to inference at scale? And so there's just a lot of inference demand? Or is it that for the level of training that you're doing, you need to be cluster scale to even kick off the training run?

• 47:12Vincent Weisser?

  Yeah, so basically it's like for for all the needs like from training to inference, you need obviously compute and in a lot of ways like our customers like are doing a lot of these like large scale training runs without like leveraging our post like including our compute, right? So it's like pre-training for a billion parameter models like what we did with RC like Q four last year or a really large also post-training runs and RL runs, right? So it's like increasingly basically we abstract all that infra away. So basically people can just like hit a button and to do a post-training run without having to like log into GPU cluster and managing the bare metal GPUs. So we basically abstract a lot of this like GPU complexity away for but but yeah, like for that,

• 47:55Vincent Weisser?

  we basically also ramping up our own clusters to basically just like serve hundreds and thousands of customers like in parallel on those.

• 48:03John Coogan?

  Yeah, so what you're saying is like there might be a situation where I have a I have a 50K budget like you gave with the ramp example, I have a 50K budget to do some post-training and and I need to deploy that 50K into like thousands of GPUs, but only for a short amount of time. And so the budget's actually going to be relatively small, even though if I were to buy all of that, it would be way more than 50K, millions, millions of dollars. So you sort of absorb some of that cost, orchestrate it, abstract it away, and then you can deliver for the customers, just a slice.

• 48:37Vincent Weisser?

  Yeah, so basically I think this is like also big unlock like also on the inference side where customers don't need to like front load hundreds of minutes and capex expense for large data center commitments.

• 48:49John Coogan?

  Yep.

• 48:49Vincent Weisser?

  So we basically also increasingly serve a lot of inference. So it really is the full stack and I think a lot of the compute like we have like quite a clear like visibility into the demand, just because like people come with us with large requests or large contracts to basically do larger training runs and deployments. So we basically just like need to secure the compute to yeah, to be able to fulfill all of those. And I think like right now, we'll probably be at like many orders of bank to more compute, like compute, but also revenue if compute wouldn't be as constrained as it is right now. So it's like right now, I think like in the current environment, it's like basically GPUs are pretty

• 49:29Vincent Weisser?

  sold out for the next few months and for almost like the rest of the year, especially if you want to like stand up data centers in the US. So I think this is actually like I think the the main bottleneck to to scale right now for anyone in AI. And this is, I think, what we've been able to really scale through extremely well because we've basically partnered with almost every data center out there since like over two years. So basically able to stand up like data centers in different geographies and orchestrate them globally.

• 49:59John Coogan?

  Yeah.

• 49:59Jordi Hays?

  Uh, any predictions, forecasts for American open source over the next six months?

• 50:07Vincent Weisser?

  Yes, that was a really good question. We joined also like NVR to help them train Nemetron. So they're doing the Nemetron alliance and collision. And so we were one of like, I think, 10 or so partners. So it's like, so like, like I can't speak about something like all the things there. But I think like in general, both on that front and other things.

• 50:27Jordi Hays?

  We won't tell any, we won't tell.

• 50:29Vincent Weisser?

  Exactly.

• 50:31Jordi Hays?

  Anything between us, just three of us.

• 50:33Vincent Weisser?

  Um, so basically, I think like, like in in some ways, like the leading American efforts actually are Nemetron and actually like RC with the Trinity models. So both of those we're like very deeply involved in. And so I think those will continue to to like lead like with like American open source. Like with like some of our own models cooking and and then like we help a ton of customers over there. So I think there will actually be like a huge resurgence of like frontier open models coming out of the US, also led by players like NVR itself and a lot of our customers and partners. So, yeah, I think like in in general, I think the interesting geopolitical question is actually what happens with Chinese open models, right?

• 51:15Vincent Weisser?

  It's like, like obviously we've seen news that like China might consider like export restricting them like and and like there might be policy interventions on both the Chinese and the US side, right? So it's like, I think this is, I think, actually in some ways like the motivation to build a stack and and to also push American open source forward is to have like less reliance on models that might get banned any day, be it all more close, right? It's like, I I think this is something increasingly like a lot of enterprises are starting to to realize that like there's actually huge dependence, right? In a sense on like mainly from the policy side. So this is something I think where we want to just like enable everyone to have like their own

• 51:57Vincent Weisser?

  end-to-end frontier open stack to be able to create their own models. And ultimately, I think like there there will be like, there's obviously a lot of like now, like also Neo Labs and and lots of them are actually like thinking about things quite in a quite open way. So I think we'll be surprised that this may be one of the hot takes is to see more Neo Labs release open models. Like a good example that we also partnered with recently was a pool site, for example. And people were expecting them to be closed, but they actually opened up their models. So I think there will be more of those, especially given they're like hundreds of well-funded Neo Labs now. I think there will be huge resurgence, just like of like the age of research in terms of like these, these Neo Labs like pursuing truly novel directions, right?

• 52:40Vincent Weisser?

  It's like going where like the big labs almost can't go necessarily, taking big like bold bets that also might not pay that pay off for all them. But like if you have hundred shots on goal, like some of them will probably pay off and result in interesting outcomes. So I think this is like really also, I think, what we are empowering, right? It's kind of like helping these new Neo Labs and and big AI natives and enterprises to move much faster and not have to basically all build the same stack each by themselves in-house. Because almost a lot of them are like tiny teams of like tens of people instead of like thousands. So like we're able to like help them move much faster, basically, but I'm adopting our stack.

• 53:20Jordi Hays?

  Uh, when you hear of a, you know, major American tech company, let's say someone in the Mag Seven that has extra capacity, do you reach out to them? Do you do you ping them? Are you at the scale yet that that a deal would be interesting to them? Or are they really searching for these, you know, $10 billion plus opportunities?

• 53:47Vincent Weisser?

  For sure, like we already are like sourcing like like pretty large clusters. So it's like sometimes like up to like five to 10,000 GPUs. So it's like, we we're basically like looking at every source and pocket of supply that we can find. Like we've literally turned every stone to find like the last GPU available on earth. And like we've been quite good at that. So it's like in some ways, like I think we're like, that has been like one of the core tenants almost like since the beginning is that like we really wanted to like orchestrate like the global compute supply efficiently. So we did a lot of like optimization for tolerance and distributed training even in early days to like train across like distributed compute. So it's like definitely, I think to this question, it's like, I think it's something

• 54:31Vincent Weisser?

  that we're definitely like considering, like if there's any, anyone with some spare GPUs, you can always.

• 54:40John Coogan?

  That's great. All right, back on on China, do you agree with my perception that if there is some sort of lockdown on Chinese open source export controls, that would not affect?

• 54:55Jordi Hays?

  Yeah, are they mad that American companies are distilling on or or post-training their open source models?

• 55:03John Coogan?

  It was by design, it was a goal of the project. But what I'm what I'm interested about is is would they try and claw back access to Kimi or GLM, any of those models that are already been deployed? Because there's an element of like, once the the weights have been downloaded, it's sort of just out there. Of course, you could go and try and like sue every company, but that's very hard if you're in an American jurisdiction and you're a Chinese company. But how would you see that playing out? Would it just be going forward, no more open source? And that's the CCP telling Chinese companies or some other shape of of of like restriction?

• 55:43Vincent Weisser?

  Yeah, I think it's really hard to know. I think like a good example was like in something like the most popular Chinese models already has been closed for example, which is Coin, right? Like in some ways, like they've actually like changed the licensing, stopped open sourcing. So I think there will be both like companies changing their policies, right? But then also, I think, like probably like state intervention, right? It's like in different shapes or form. So I think basically one can't rely on the steady stream of frontier open like releases out of China in many ways. But it's like from different perspectives. And I think similarly, a lot of other sovereigns, like obviously including the US, also doesn't want to build on on necessarily Chinese open models. So it's like, I think a lot of American enterprises, obviously also like sovereign use cases like

• 56:27Vincent Weisser?

  need American open models, but I think similar for other continents. So it's like, I think there's been a lot of work, obviously, and we're like collaborating with people also across Europe, across India, across other geos. So it's like, I think we'll we'll see a much more like multipolar, I think, open like ecosystem of like open frontier models. So I think that's like a healthy like balancing away from just relying on Chinese open models, even though they've obviously like been a great accelerant of like open source progress. I think it's also unhealthy to rely just on an ecosystem. And yeah, like I think we'll be like, there will be, I think, a bunch of like quite unpredictable changes similar to all like the last few months have been quite unpredictable, I think, to everyone involved.

• 57:12Vincent Weisser?

  So I think this will continue to be the case in the sense that it will be like quite a dicey policy, like AI policy landscape for the next few years.

• 57:20John Coogan?

  Mm hmm. Last question. Data centers are data center construction, new data center construction, deeply unpopular in America domestically. Simultaneously, the workloads that are being done in AI data centers are basically latency is basically irrelevant for training, certainly, for most inference tasks. If you're waiting a couple of minutes for a result, an extra 500 milliseconds to get across the world isn't going to matter. This feels like a recipe for global competition, for aggressive data center expansion in a country that does see it favorably, that does see an economic boom from it, or does have a lot of energy.

• 58:02John Coogan?

  What is the state of the non-domestic, non-US data center build out?

• 58:09Vincent Weisser?

  Yes, so we're certainly like building a lot of data centers and partnering with a lot of them like outside of the US as well. But like, I think there's still a lot of demand actually for data centers in the US. I think like even from a data perspective, like there's a lot of now like the financial industries and highly regulated industries like also adopting, obviously, uh, more and more agents and computer. I do think influence still matters, I like speed in a sense like maybe not for like long running agents, but like for a lot of use cases, people I think still really care about like having extremely snappy like responses. But I think, um, like there's definitely, I think, like a general boom and data center build outs outside of the US as well. I think there's just like a limited set of countries who are like strong, like allies with like ample amounts of like,

• 58:51Vincent Weisser?

  um, like geopolitical stability, but then also like, um, like energy and, and, and green, like, like greenfields and enough space.

• 59:01Jordi Hays?

  Yeah, US has unique access to natural gas, which is if you're trying to bring energy online super quickly, it's hard to beat.

• 59:09Vincent Weisser?

  Yes. And I think like we, we're seeing this across Europe, even where like there's specific regions, right? Like that are like much more active and data center build outs than others. And, and those are generally the ones that like have their own like money internationals and them and like cheap energy. And, and a lot of like also local support for it. Um, so I think like in general, from what we're seeing, I think there's like, there, there is new entrance, almost like to, to the data center build outs. But it's like even places like Australia and New Zealand, like, and, and like a small, much smaller place, right? Like Armenia, Kalas, and others who like have a huge amount of energy and, and huge like, and making huge bets also on data centers. But while also being like allies of the US. So I think those are the countries, I think generally which will see the biggest movement data centers.

• 59:51Vincent Weisser?

  I think at the same time, like, I think we'll also continue to see a boom in US data centers. But yeah, there's, it's definitely harder to get data centers in the US than outside of the US. And, and so it's something we think we'll, we'll see both continuously expand. And then I think there might also be obviously like to your point, like a policy, uh, like, I like updating for, like what was it? Upcoming elections and in midterm things of, I think like this, this whole almost like populism in the US around like data centers. And like a lot of the, the kind of, I think, public sentiment as, as potentially also like sovereign influences and other things like from other nation states who are trying to harm almost like the US data center build out.

• 1:00:33Vincent Weisser?

  So I think there's like a lot of things at stake for the US, right? It's like to, to not pull back on, on their data center build out. But I think there will also be specific states or like leaning in much more heavily than others, right? Like, I, I think this is already what we're seeing where like, exactly. So it's like there's specific states in the US that are just like much more well suited to really ramp up data centers from here. And, um, yeah, and I think we'll, we'll see them ramp up globally and hopefully also, uh, outside of, uh, like beyond earth. And I think, um, like, I think this is the only way to really properly scale.

• 1:01:09John Coogan?

  I love it. Well, thank you so much for coming on the show. Congratulations. Incredible progress.

• 1:01:13Jordi Hays?

  We love seeing you and the team win.

• 1:01:15John Coogan?

  Yeah, it's fantastic. Have a great rest of your day. Say hello to Will for us and we'll talk to you later.

• 1:01:20Jordi Hays?

  Cheers.

• 1:01:21John Coogan?

  Go bye. Let me tell you about Cisco. Critical infrastructure for the AI era unlocks seamless, real-time experiences and new value with Cisco. Our next guest is Ben Thompson, the founder of Stratechery. He's been on an absolute tear during a slow news cycle. Does it feel like a slow news cycle to you?

• 1:01:41Ben Thompson?

  I don't know. It, it, the summer is always slow. Um, I, you know, I take a couple of days or I, I slow down a little bit myself.

• 1:01:48John Coogan?

  I feel like you've done a good job of like providing really insightful and interesting pieces during a slow time where I didn't know that I wanted to hear you.

• 1:01:57Ben Thompson?

  I'm doing you a favor.

• 1:01:58John Coogan?

  Yeah, you are. Yeah. I didn't know I wanted you to adopt the voice of Mark Zuckerberg for 20 minutes and go on a tear. But it's not like that was driven by like a specific, okay, there's a Wall Street Journal article where like Bloomberg has a scoop and like, we need to know this. It's more just like resetting on the meta narrative. Uh, I want to talk about the meta narrative, but, uh, can we start with Xbox?

• 1:02:20Ben Thompson?

  Sure.

• 1:02:21John Coogan?

  I want to know first, let's go back in time a little bit and I want you to reality check me on the, the, the story I tell myself about how Microsoft wound up in the situation it wound up in with Xbox. And I think it stems with DirectX, the, it's the graphics layer that allowed games to be run on multiple graphics cards. So that was a Microsoft licensed piece of property. So this is why we don't have the Chrome box.

• 1:02:51Ben Thompson?

  You ought to go, you ought to go really far, far back.

• 1:02:54John Coogan?

  Like, like maybe because we didn't, we didn't get an Amazon gaming console. We didn't get a, a Google gaming console, right?

• 1:03:01Ben Thompson?

  Right.

• 1:03:01John Coogan?

  Like, why?

• 1:03:02Ben Thompson?

  Well, DirectX is interesting. So you, well, you go back way back. I mean, we can go really far back here.

• 1:03:06John Coogan?

  Please.

• 1:03:06Ben Thompson?

  Um, I mean, back in the day, the main technology for doing 3D was coming along was OpenGL. And OpenGL had, uh, various pluses and minuses. Uh, it was, you know, we're way back in history, but they're like, this is the origin of the Nvidia story. Making cards to do 3D graphics. Uh, you had like the Riva, the 128, then you had the TNT, then you had the GeForce. And like, we're talking back in the nineties when I was, you know, your guys' age or whatever, in college. And, um, you know, making, uh, the first, you know, Quake comes out, like the real first 3D game, you know?

• 1:03:43Ben Thompson?

  There's actually a really interesting Twitter back and forth with the old id people talking about Quake and how basically they obliterated the company by burning everyone out by launching it. But, um, super fun, super fun back and forth. But, uh, Microsoft comes out with Direct 3D as an alternative to OpenGL. That was, I think, and this is a little out of my area of expertise, but I think was a little easier to use, had more niceties, was more tied into the platform. But this is all sort of PC gaming.

• 1:04:11John Coogan?

  Yeah.

• 1:04:11Ben Thompson?

  Uh, the Xbox, the way I think about it, and a lot of gamers kind of get annoyed about the gaming stuff because I don't really care about the game part of it. I'm more interested in like the, the strategy, uh, in how that fits in the overall company.

• 1:04:24Jordi Hays?

  What is your review?

• 1:04:25John Coogan?

  Yeah, can we get a GTA 6 review?

• 1:04:28Ben Thompson?

  No, well, I feel, I feel compelled. Number one, I feel, uh, Rockstar I think is charging way too little for this game. They're charging what? $80?

• 1:04:36John Coogan?

  Yes. Oh, you're, this is, you're gonna get canceled for this. This is a nuclear take.

• 1:04:41Ben Thompson?

  No, they should be charging like $200 for this game.

• 1:04:44John Coogan?

  I know.

• 1:04:44Ben Thompson?

  GTA 6 is like the last great game.

• 1:04:47John Coogan?

  Yeah.

• 1:04:48Ben Thompson?

  Like you think about every, it was mostly all made pre-AI.

• 1:04:52John Coogan?

  Yeah.

• 1:04:52Ben Thompson?

  Like it is the pinnacle of this AAA craftsmanship, years and years and years of blood and sweat and tears. To the extent where you have like the Twitter analysts like counting cigarette butts outside of the offices to see like how much crunch are they in right now?

• 1:05:10John Coogan?

  I don't even think he's trading the stock. I don't even think he's trading the stock. I think he just wants to know what GTA is saying. The love of the game, literally the game, the, the GTA game.

• 1:05:18Ben Thompson?

  Gamers are insane. So I always tread in this water like very, very carefully. But, uh, no, so I feel compelled to buy GTA 6 just in honor of it existing.

• 1:05:28John Coogan?

  I like that.

• 1:05:29Ben Thompson?

  Even if I don't know if I'm ever gonna play it. So I'm definitely gonna do that and I'd be happy to pay, yes, I, $200. Like $80 is ridiculous. They should charge more. Anyhow, um,

• 1:05:37Jordi Hays?

  Yeah, we had, the youngest person on our team was commenting on people online complaining about the price and said something like, you didn't have, you, you had 10 years, you couldn't save up 80 bucks?

• 1:05:50Ben Thompson?

  Seriously?

• 1:05:51Jordi Hays?

  Like whoever, whoever you are, like, like I know kids that do lemonade stands and they clear like a hundred bucks, you know?

• 1:05:58Ben Thompson?

  Oh, absolutely. I want, you know, they're all $20, I'll keep the change. Nothing will make a kid's day better than that. Although unfortunately with inflation, I think now it's sort of like expected. It's unbelievable how expensive things are these days.

• 1:06:08Jordi Hays?

  It's bad.

• 1:06:09Ben Thompson?

  Um, so anyhow, GTA 6, but we're, we're back. Oh, so the, the console, the console era. So the way I think about Xbox is you go back to Microsoft and Microsoft had this whole thing, this is pre iPhone. This is idea of their corporate strategy was three screens in the cloud. And the idea that we're going to, we already own the desk via the PC. We're going to own the pocket via the phone. And people always used to say Microsoft missed mobile. Microsoft did not miss mobile. They like, they came out with a Windows CE in like 1999. Like they were in mobile. They just had the totally wrong conceptual model because they were basing it around, you know, as an extension of the PC.

• 1:06:50John Coogan?

  Yeah.

• 1:06:50Ben Thompson?

  But then the third screen was the living room. How do we get in the living room? Well, people have consoles plugged in their TVs. If we can get in and own the console, we can own sort of the gateway to the living room. And we need to earn permission to be in the living room. We will do that by creating a, the Xbox, the game console. And what's interesting about this is, uh, this is a strategy that totally failed. And it failed for a kind of an obvious reason in retrospect, which is first and foremost, people buy consoles to play games, not to have a portal to the internet in their living room. And so you're selling a multi hundred dollar sort of console to people who want to play games.

• 1:07:35Ben Thompson?

  But people who don't want to play games aren't going to randomly start buying consoles. What actually ended up taking it over was things like the Fire Stick or, you know, Apple TV may have played this. I still think it's like probably the, the best solution, but it's way too expensive. Now, the Apple TV's poor price got jacked to the moon with this recent memory increase. Uh, but the Fire Stick is probably a big one. You had the Chromecast, you had Roku TV, uh, you had, you know, these, which ended up being, it's not that, it's a classic Microsoft thing. They were actually right. There was this new front page to online services to be built. They just took totally the wrong approach with Xbox. And what's funny is that this approach actually became this urbores of self mutilation mutilation.

• 1:08:19Ben Thompson?

  Because the Xbox didn't succeed in achieving this because the games console is way too expensive to achieve this. But then also they killed the Xbox where Xbox 360 was pretty competitive. And it's that generation is actually the most interesting console generation. I'm happy to expound on that if you want to. But they come out after that with the Xbox One, I think, which was super expensive because it had the Kinect built in. That sort of like wave your hands around sort of thing. And it had all much more like restrictive DRM things. It's gonna be more digital. It was basically that console was designed around, we're gonna realize our vision and own the living room. And gamers hated it. So they rejected it. So their vision, which they didn't achieve,

• 1:09:03Ben Thompson?

  also killed their console. And so, and the, so my, I wrote over a decade ago. And the whole Xbox saga is filled with regrets, I think, first and foremost for Microsoft, but also for me. Because I, from the beginning is like, They need to kill this program. They need to spin it out or get rid of it. The stated goals, which made sense from a corporate perspective, were not achieved. And it is continuing to exist because it exists.

• 1:09:34John Coogan?

  Yeah.

• 1:09:35Ben Thompson?

  And I was actually sympathetic to that. I worked at Microsoft from, from 2011, 2013. When Microsoft was in the dumps and you know, they were still had a great business, but their stock had been like $40 for like a decade. And, uh, and the one thing the employees has like, well, at least you have Xbox, all the cool kids over there. Like it was such an important thing to corporate culture to have Xbox. Even though this was a totally failed division in terms of achieving corporate goals and also was sort of self-immolating because it was trying to achieve corporate goals that it was not going to achieve.

• 1:10:09John Coogan?

  Yeah. What do you think the naming scheme says about that project? I always found it very odd that they went from Xbox to Xbox 360. That sounds like the third. It's actually the second, then Xbox one is the third, but it's one. And then now they're on series X, which feels like the 10th, but it's the fourth. And then they have a bunch of sub names. It feels like they just didn't, they never leaned into just like Xbox two, Xbox three, Xbox.

• 1:10:36Ben Thompson?

  Yeah. Um, well, you're asked, I mean, maybe it shows I worked at Microsoft. You're asking the wrong guy about naming things, I think. But, uh, yeah, total mess. They called it the 360 because it was coming out the same generation as the PlayStation three.

• 1:10:47John Coogan?

  And they wanted to.

• 1:10:48Ben Thompson?

  And so they wanted to, well, they wanted to be on the same level.

• 1:10:51John Coogan?

  Yeah.

• 1:10:53Ben Thompson?

  So what's interesting about the PlayStation three is the PlayStation three was Sony's big misstep in terms of the whole PlayStation era. What they had this crazy processor called the cell processor that had all these capabilities. And they had, uh, up to that point, consoles were differentiated by hardware. And so Sony famously helped. One of the reasons they beat Nintendo was they had discs. So they could have much larger like media and things along those lines. And whereas Nintendo was sticking with cartridges and there was like other, like they were much more favorable to third party developers. Just in general, they, they had sort of taken over PlayStation one and two. PlayStation, uh, three comes along, they produce this, oh, they wanted to get Blu-ray off.

• 1:11:37Ben Thompson?

  That's another example of consoles getting screwed up by trying to attempt to other corporate priorities. They, it worked.

• 1:11:44John Coogan?

  Yeah. Well, didn't they win? And, and didn't Xbox go with HD DVD and they lost?

• 1:11:49Ben Thompson?

  They did, but at the end of the day, what happened was the PlayStation three was way too expensive. Uh, I think it ran super hot, if I remember. And all these extra capabilities were not used. And the reason they weren't used is that was the first HD generation. And you had this shift to 3D games and high definition graphics. And what happened was it used to be games differentiate themselves by how well they wrote the game. Like how did it perform on your Super Nintendo, on your Nintendo? Now we move to a world of actually all the actual game was offloaded to engines, game engines. Like, you know, it had one, obviously it was epic, got super big with the Unreal Engine. And so you no longer did that. What a game company did was actually design the game and then asset creation.

• 1:12:33Ben Thompson?

  And asset creation at HD was way more difficult, way more expensive than it was for, for standard definition TVs. And so the economic imperative for developers came, we can't just be on PlayStation. We need to be on everything. And so that was the ultimate generation and almost every game was made to run everywhere. Run on PS3, run on Xbox 360 and run on the PC. And that was

• 1:13:00Ben Thompson?

  also the Xbox 360's best, best generation. That was the one they were the most competitive on because they had all the games, because all developers were making them sort of run everywhere. They had a very simple to develop for architecture. The 360 was very PC like, even more so than the one sort of previously. And that was their best generation. And then they come back, the next generation shoving connect on people's throats. We're gonna own the TV. And meanwhile, Sony learned their lesson. They're like, okay, we can't differentiate on hardware. We need to create sort of generic hardware that is easy to develop for. And the way we will differentiate is through exclusives. They bought a bunch of small studios in contrast, like buying Activision.

• 1:13:40Ben Thompson?

  So you get to a little bit, they bought a bunch of small studios and pushed all those studios to developing killer games for the upcoming PS4. And so you got things like, like the Spider-Man, like, uh, that was a huge game.

• 1:13:53John Coogan?

  Naughty Dog, Last of Us, that type of stuff.

• 1:13:56Ben Thompson?

  Exactly. Yeah. I mean, and so the PS4 was an unbelievable generation. And in, and a lot of the reasons unbelievable was because it had these exclusive games and they just crushed Microsoft. Because for all the cross-platform games, the Call of Duties, the Maddens, things like that, those are always ran everywhere. And so what you do is you limit the economic potential of your studios because you're only building for your platform. And you make it back by all the licensing fees you get off the EA's of the world and the Activision's of the world. Because 80% of gamers are on your console, not on the other guy's console. And so they just wiped out Microsoft in that generation. And that really just continued to the PS5.

• 1:14:39Ben Thompson?

  And this is where we sort of get to the, the game pass disaster.

• 1:14:42John Coogan?

  Okay. Yes. So, uh, yeah, I wanna, yeah, let's just jump forward to that.

• 1:14:47Ben Thompson?

  All right. I didn't want to ramble too long. That's gonna be a chance.

• 1:14:50Jordi Hays?

  No, we love it. We love it. Yeah. I have a bunch of other questions, not related to gaming, but I like, I love this.

• 1:14:58Ben Thompson?

  Oh, I think the console, the console history is fascinating. It's really interesting how sort of, because it tracks technological change to such a large extent. And it totally shifted sort of strategies. So.

• 1:15:07Jordi Hays?

  And I think you can draw, I think you can draw a lot of real parallels, even just model releases over the last couple of years. How, you know, certain decisions around one model sets you back a certain, you know, they're, they're iterating a lot faster. But I'm, I'm seeing parallels.

• 1:15:22Ben Thompson?

  Yeah. The, the sort of development of, of, yeah, it's interesting. You could always just sort of draw, draw, draw lessons. So you get to Microsoft at this point. Again, I think I wrote at the time, oh, wait, time to give up.

• 1:15:35Ben Thompson?

  I wrote multiple times through the years, they should give up on Xbox. And, uh, and at this point, Microsoft.

• 1:15:40John Coogan?

  Was there ever an option after they bought Activision just to make Call of Duty a console exclusive? Or would that have been an FTC problem?

• 1:15:48Ben Thompson?

  Well, we, we, we'll get to that. That's part of the story here. So Microsoft decides, okay. What we, we're gonna actually try a new business model. It's true Xbox sort of selling a console, selling, uh, you know, licensing it. We kind of do that, but we're actually moving to being a services company. The stock's doing much better now. You know, like we have Azure, all the, all these things. What we need to do, and the way we compete with Sony is we need to have the exact opposite of the Sony strategy. And we need to lean into services, lean into subscriptions. We're gonna do Xbox Game Pass. And the idea of Xbox Game Pass is instead of buying every individual game for $60, $70, $80.

• 1:16:31Ben Thompson?

  Gaming pricing, by the way, really has stayed suppressed probably far longer than it should have been, particularly for the AAA games. But we already got to that with Rockstar. So they're, they're like, you pay one price per month and you get access to all the games and game paths. Well, of course, no publisher wants to partake in this because they make all their money upfront by selling games to their biggest fans. You, you know, it's kind of like the movie model. You make a bunch of money upfront and yeah.

• 1:16:59Jordi Hays?

  Were they looking at like, at, at what happened to the music industry as an example of saying like, yeah, it's cool to make your product more accessible. You get, you know, more listeners by bundling.

• 1:17:09Ben Thompson?

  Right. Well, that was, that was the bet. You had to make it up in volume, right? And so this old, this why the series S came about, there's the series X and the series S. The series S was a more underpowered, but much cheaper model. I think it launched at $300 versus the X was I think $600 or maybe 500. And that was also a problem because you're kind of neutering the X because developers build to the lowest common denominator. That's not sort of the highest one. So that was one problem, but the idea was we're gonna expand the market. And they have these package deals where you get an S and you get game pass for a year and it's this sort of thing. And, uh, we will make it up. And the problem is no, no independent developer is gonna go for that.

• 1:17:50Ben Thompson?

  So they had some of their own games, but they went out and started buying a bunch of developers. So they bought Bethesda, which included, I think it at that point, uh, and, and Zenimax.

• 1:18:03John Coogan?

  Like they, they have a bunch of like great IP libraries. Those, uh, but those developers just aren't releasing like incredible titles annually, except for Activision, which does have.

• 1:18:14Ben Thompson?

  Well, so exactly. And so the issue, the, so the issue with buying these companies is their, what you're paying for is you're paying for their existing business plus the premium. And their existing business was selling single copies of games to all platforms. And what they were saying is we're going to basically force all these studios to take a bath. To lose a ton of money by putting all their games on game pass. We'll still sell on PlayStation because we have to, because that's a lot of money. It'd be massively economically destructive not to, but what we think's gonna happen is gamers are gonna realize I could be paying $70 a pop on PlayStation or I could go to Xbox and I could pay

• 1:18:59Ben Thompson?

  $20 a month and I can get all these games and that's it. What a better deal. And by the way, we'll get new gamers. People are gonna come in and realize, wow, I can get all these games for $20 a month. None of that happened. All they did was cannibalize their existing business. They didn't expand the market for console gamers. All they did was have gamers who would have paid way more to play these games, pay way less to play these games and Microsoft ate it. And they, I think they, you know, the recent reporting was they expected to have 75 million game pass subscribers by this year. They have like 30 million and that number is actually decreasing. It's not going up. And so it's just been, uh, and so that, that's sort of the context of what's happened here.

• 1:19:43Ben Thompson?

  Uh, Phil Spencer got, uh, retired, which if you retire at that level of a company, um, you're probably canned. Probably too late. The whole strategy was disaster. They brought in new leadership. And now there's sort of like a reset going on. They're, they're laying off a few thousand people. They, they say all games production are going to continue, but there's a real sort of critical decision here. What do we do? Because we ended up getting stuck in the middle, like, and we're just, it, it, this doesn't work.

• 1:20:17Jordi Hays?

  What, uh, what did you read into their approach of laying off 1600 people now and keeping a 1600 person riff?

• 1:20:26Ben Thompson?

  I mean, it's a terrible idea.

• 1:20:29Ben Thompson?

  Everyone there for the rest of the year is like.

• 1:20:32Jordi Hays?

  Like every VC would tell you to like, cut hard, cut deep.

• 1:20:36John Coogan?

  And then move forward with the team. If you're on the ship, we're going to Valhalla together.

• 1:20:41Ben Thompson?

  I think I, I do have some sympathy because, uh, the reality is.

• 1:20:47Ben Thompson?

  I appreciated the note, um, because they are in big trouble. And there's an, there's an aspect of just stating it clearly. We're not sugarcoating it. And if they laid out how much trouble they were in and then only cut 1,600 people, then everyone kind of knows they're going to be cutting more people. All right. And so I, I think they're just in a bad spot. So of course it's not great. It's going to destroy morale. It's going to destroy everything for the next year because everyone's waiting to get fired. But there's a bit of, they did, I think, tear the Band-Aid off to the extent they could. And now there's just a, now they can be very overt. They could go through and actually talk to employees about what are you working on? Why should you still be here?

• 1:21:29Ben Thompson?

  And, uh, it's a reflection of the employment climate, like, like people in general are more, they're just not going to bail. Microsoft, you know, they're going to want to keep their job. And so they can probably, hopefully, fingers crossed, do better cuts by virtue of doing them in the open. Um, but I don't know. I mean, I don't envy, I don't envy Xbox's leadership at all. It's going to be a very tough thing, but I, I, I could totally understand how they are where they are.

• 1:21:55John Coogan?

  Probability of a spin out.

• 1:21:58Ben Thompson?

  I mean, I think it, I think it needs to happen like I, I, but you know, this is, again, the regret is this was my take for years and years and years. I'm like, okay, fine. Xbox game pass, that kind of seems kind of interesting. Let's go for it. It should have stuck to my guns. They're like, no, stop. This is going to be a disaster. Um, I think, yeah, I don't, I, I, I don't get it. Um, I just don't, I didn't see it before. The thing that got me to say, okay, let's give it a chance, didn't work. I don't see it now. I mean, I think it does give me pause. They hired Matthew Ball, who had Valance Strategery multiple times. Uh, as their chief strategy officer. I have a lot of respect for, you know, his takes. So I'm curious what he's thinking about. This gets to the question before, is there a bit where they just write off these acquisitions?

• 1:22:43Ben Thompson?

  And say, actually, all this stuff's going to be exclusive now. We're like Call of Duty, buy an Xbox. Uh, like basically giving into the FTC's worst fears, which, uh, but they, those fears didn't make sense at the time in the context, uh, because it's by writing off.

• 1:23:03Jordi Hays?

  What's funny, what's funny is that would test.

• 1:23:04Ben Thompson?

  We lost billions and billions of dollars.

• 1:23:06Jordi Hays?

  Yeah. And it would, it would test, it would, it would be a good pricing test for the power of a triple A game to say, okay, you can only get Call of Duty on Xbox now. And you would see like, how, like, how many incremental Xbox sales do you get? Because that means the real value of the game is actually in the hundreds of dollars. If people have a PlayStation. And then they'll try something new. Uh, switching gears a little bit, uh, we keep having this experience where there's a company, you know, an AI company, let's say an application layer company that is, or lab, that is, you know, hot, but then you don't hear very much for a few months and you write them off and then they come out and they've like added hundreds of millions of dollars in revenue and are doing a crazy up round.

• 1:23:50Jordi Hays?

  And it's this weird thing where like even, you know, historically, you know, there's power laws everywhere, but I feel like in this moment, we're seeing more and more examples where like the 10th best company in the category is still having the financial performance that a company that would have been the leading company in their category five years ago. What do you make it? What do you make of that?

• 1:24:13Ben Thompson?

  This is just a thing in tech in general that, that is always sort of stuck out at me. I mean, I, I think I.

• 1:24:19Jordi Hays?

  Has it been, has it been though? But like, like CRM, for example, like if you go back to like 2015 was like the 10th best CRM company, like actually printed.

• 1:24:30Ben Thompson?

  No, the, the, the example I always go back to is, um, I think it was 2014 or so and Apple bought Beats and they bought Beats for $3 billion. And everyone's going, the tech press is going crazy. Everyone's writing thought pieces about it. And I'm like, you know, of course writing about it. I'm like, $3 billion, like Apple is a $500 billion company. What does $3 billion matter? And what's funny about that take is number one, it was right. Who cares about $3 billion? That's in our couch cushions. Like people were spun up on something that didn't really matter. Number two, Apple is only a $500 billion company. Like the, the astronomical increase in valuation and numbers around this is absolutely crazy. So to your point, yeah, a 2019 CRM company, number one, there probably wasn't a number 10 even then.

• 1:25:13Ben Thompson?

  But yeah, the numbers are not even remotely tied to like any, I just sort of let them go and be like, I write down the numbers and they don't really mean anything to me. Um, but it's very hard to keep track of, like the inflation in tech numbers specifically. You know, you think that, uh, what was I complaining about pricing before? Oh yeah, lemonade stands are bad. Uh, Silicon Valley lemonade stand inflation is absolutely the worst in the world.

• 1:25:37John Coogan?

  Um, on mergers and acquisitions, uh, there's this news today about Getty Images calling off Shutterstock deal after UK regulators said that they would have to sell the editorial business for the merger to be approved. And it seemed very odd to me that a merger would be blocked by a regulator when that industry that is consolidating and is maybe becoming more monopolistic is under such insane attack from generative AI. I can't imagine a better defensive move than putting Getty Images and Shutterstock together.

• 1:26:14Ben Thompson?

  This happens, this is, this happens every single time. Like the, the natural response to your overall category being threatened by an external force is consolidation. Like it's the only way to defend yourself to sort of, you know, you get synergies, like, like all these companies are pretty established. So it's actually fairly easy to price. You know exactly what things are. It's a much like, if you have growing companies, you want to merge them or acquire them. It's really unclear because how do you sort of price out the future? These companies are declining, so it's very easy. Like you could do a discounted cash flow and understand exactly how much they're worth. It's a very straightforward negotiation. It makes total sense for them to consolidate. But precisely because they're knowable and understandable, it's very easy for regulators to block them.

• 1:26:59Ben Thompson?

  And you see this happen again and again. You see like pushback on, you saw this with TV and like, like different networks getting together and the various pushbacks happen to that or in telecoms. Like the, this happens, this is a natural pattern. The moment that a company, an industry wants to consolidate, needs to consolidate, is the moment regulators are most likely to stop them consolidating. And whereas the actual time when action would matter, like when it, when it's growing and a company is making the right acquisitions to take over an industry. Regulators don't do anything and also rightly don't do anything because you're dealing with the future and it's unknown. You don't want to screw it up.

• 1:27:41Ben Thompson?

  Um, it raises the question of what you do regulators sort of do anyway. In broad, broad strokes, I used to be, I've sort of, you know, I think that they probably do more harm than good as far as a lot of these sort of blocking mergers and things go. But, um, I don't know. I'm the one that just said, maybe Microsoft should take Call of Duty exclusive. So, so who knows? Uh, maybe all.

• 1:28:03Jordi Hays?

  Yeah, we had a funny moment because we were looking, it's a $3.7 billion deal. But I'm like, how is this a $3.7 billion deal? Both these are two, 300 million ish market cap companies. And it was because they, the deal was like priced back in January of 2025. And so both companies had declined so much.

• 1:28:22John Coogan?

  Combined market cap's under a burden now.

• 1:28:24Jordi Hays?

  Over the last 18 months.

• 1:28:25John Coogan?

  And so maybe they should do the deal anyway. I don't know.

• 1:28:27Ben Thompson?

  I mean, it could be worse. You could be Netflix and have the stock market and sort of like make a bid for Warner Brothers that the stock market hates, abandon the deal, but they already decided you did the deal because you're desperate and you're screwed anyway. So, um, yeah, they, you don't even get what you bid for. So, uh, maybe that's what happened here. I don't know.

• 1:28:43John Coogan?

  Oh, well, well, thank you so much for taking the time to come chat with us. Have a, uh, have a great summer, uh, enjoy the break and we'll see you soon.

• 1:28:52Jordi Hays?

  Yeah. Good luck with the lemonade stands.

• 1:28:54John Coogan?

  Yes.

• 1:28:55Jordi Hays?

  Try to, try to make it through summer.

• 1:28:57John Coogan?

  Stay solvent, don't go into debt. You're going to run up on a kid that has Klarna.

• 1:29:00Ben Thompson?

  Raise some money. Yeah. Yeah. Klarna and a lemonade stand.

• 1:29:04John Coogan?

  Klarna and a lemonade stand. Five easy payments. Interest free, interest free it might. Well, thank you so much and have a great rest.

• 1:29:10Jordi Hays?

  Great to see you.

• 1:29:11John Coogan?

  We'll talk to you soon, Ben.

• 1:29:12Ben Thompson?

  Talk to you later.

• 1:29:12John Coogan?

  Have a good one. Let me tell you about Shopify. Shopify is the commerce platform that grows with your business and lets you sell in seconds, online, in store, on mobile, on social, on marketplaces, and now with AI agents. And our next guest is Rodrigo Liang from Samba Nova, the co-founder and CEO is here with us in the TV van. Rodrigo, how are you doing?

• 1:29:34Speaker 05

  I'm doing good. How are you guys?

• 1:29:35John Coogan?

  We're doing fantastically, but it sounds like you're doing better. Give us the news. What happened?

• 1:29:40Speaker 05

  Uh, you know, we're super excited. We did a big, uh, big funding announcement today with a billion dollar uh, round that we did a first close on at an 11 billion valuation. So super excited about announcing that.

• 1:29:53John Coogan?

  Incredible.

• 1:30:00Jordi Hays?

  This reminded me, there was somebody posted like a couple of weeks ago, something to the effect of like every day there's a new billion dollar deal and chips from some company you've never heard of and uh, I guess the trend, uh, the trend continues.

• 1:30:17John Coogan?

  Yeah. Uh, yeah. Is this an overnight success? When did you start the company? How long has this been overdue?

• 1:30:23Speaker 05

  It's an overnight nine year success. You know, I've been, I've been do, I, I've been building chips for 30 years. High performance product. And we started this company in 2017. So, no, but it's been, it's, it's been a great journey to, you know, again, it's so noisy. There are so many companies out there doing also all sorts of awesome things, but uh, look, then you know inference, inference is now right in front of us. It's kind of broken everything open. It's what we do. And it's been what we've done for a long time. And so it's the new training run. And so people that are kind of been thinking about building chips for training. Well, now it's the time for inference and this is where we shine and we shine, you know, and, and investors are putting all their money behind that. And so we're excited about that.

• 1:31:05John Coogan?

  How, how, uh, walk me through the, the phases of, I mean, you have some of the biggest uh, companies in the world you're working with. J P Morgan Chase selected you uh, for secure on-prem AI inference. And I'm interested in the thought process that large Fortune 500 companies, Fortune 100 companies are going through right now. I imagine that there's a lot of explore with, uh, with frontier models, very expensive, they're token maxing. Then they shift to, uh, okay, this agentic workflow is working. Let's use a open source model for it. That is, you know, with the, the, either the, the open source frontier is caught up and can do this particular task.

• 1:31:46John Coogan?

  Maybe there's a fine tune or some RL on some private data that makes the, the, the system perform better. When is the conversation shifting to actually, uh, actually optimizing the inference stack, the hardware? What are, what, what's, what's the conversation like there? What are the savings that people are focused on?

• 1:32:05Speaker 05

  Well, I think what people are starting to realize after they started using chat G P T and the topic, the frontier models is, look, there's a bunch of things I can do there and it's great, you know, we'll use it and it's going to be part of their business for a long, long time. Right. And hyperstars are offering all sorts of different services with different T P U's and G P U's and, uh, and training. They're offering different things there again, on the cloud. What, what's happening now is this next phase of production is people starting to realize, okay, what happens to the stuff that I'm not comfortable releasing to these models? Like my private data, my security, the stuff that I want your models to learn and then somehow become part of the global knowledge, right? And so what happens with that? Right? And so I don't know if I have, you know, you know, my, my clients in banking information, you know,

• 1:32:49Speaker 05

  my have, you know, some, some very regulated information. What do I do with that? Right? And so people are starting to realize, okay, there is a whole nother class of workloads, whole nother class of, you know, of, of applications that you gotta go and do private. And so, uh, with someone, someone like J P Morgan, which is fantastic, you know, I mean, they are the top of the top when it comes to enterprise and I T, right? And so, and technology and so fantastic partners. So they've selected us as the ones that can come in and go into an environment like J P Morgan, do full on-prem secure private. They can bring their open source models. They can fine tune into it. They can deploy that privately, securely and control the models and control it forever. Right? And so, so I think, I think we're starting to see the,

• 1:33:28Speaker 05

  the landscapes aren't too, too steady, right? There's some things you use, uh, the tropics for this, some things that you're going to use the hyperscale clouds for. And there's some things you're going to say, hey, let me run on-prem and let me, let me control the outcome and, and especially since I know, I don't know how the regulatory environment is going to settle, let me just be secure for that. Let me just be safe and just run those things on my own models in my own environment with my own security around it and then be done.

• 1:33:54Jordi Hays?

  Yeah, you can think, you know, pharma company being like, I would love for all the other large pharma companies to share their data with a frontier lab, uh, but uh, I'll pass.

• 1:34:05John Coogan?

  What does, uh, what does partnership with you look like for a large organization? If I have, you know, a large I T footprint already, I probably have data centers, but they might be uh, more CPU based workloads. Maybe I have some G P U's, but I'm not doing, you know, frontier inference. I'm not fully scaled up, but I have some, are, are you consulting with them at the level of like where they should be buying land for their next data center? How they set up a powered shell, who they should partner with? Like, how deep in the stack will you go with a company that you're working with?

• 1:34:42Speaker 05

  Well, look, you know, I mean, if you look at the, the, the AI ecosystems up to date, you know, you've, we've been really focused on hyperscale clouds. But you know, the, the Neo clouds, uh, the, um, the frontier models will really focus on building those out. You know, gigawatts here, megawatts there. I mean, just, you know, just this large scale, uh, large scale deployment. And then what you're still going to think about is, well, how do I get as many tokens out per, you know, megawatt per kilo, you know, kilowatt, megawatt and gigawatt that I have, right? And so that's kind of, we're very focused on that. Some of the work played into that are really, really efficient models. We run the big models really fast. That's really what we're known for. Huge models, right? You know, the battleground for power and data center and all that is about huge models.

• 1:35:22Speaker 05

  It's not about the little models. It's about the trillion, multi-trillion per model. That's what we focus on and run that faster than anybody else in the world. So, but then you flip it over to the enterprise and for them, it's not as much about how many thousands of racks is going to fit into an environment. It's about data privacy. It's about security. It's about having the capacity when I want it. It's about low latency. It's about these things that again, you go back to traditional computing. It's what they've always wanted, right? They always wanted low latency, all high performance, all security and privacy. They always wanted that. And so what we're going to say is that because our rack, our rack's a 10 kilowatt air cooled rack compared to what traditional G P U's are 140 kilowatts per rack, right? Where 10 kilowatt air cool rack producing state of the art AI.

• 1:36:07Speaker 05

  Now you can go into your existing data centers. You don't need to go buy new data. You just, you already have data center, roll out the old gear, bringing the new gear, off we go, right? And you're running the latest and greatest models at, at great performance. So that's kind of, uh, what's exciting about it. And you know, they're first and foremost, our customer, you know, they're buying racks, deploying them. But then broadly, they're really also a co-developer, you know, when it comes to enterprise, new secure AI for enterprise, right? Because they are the most knowledgeable when it comes to deploying these types of applications and they're just so smart about this stuff. And so we can partner with them and figure out how to bring the enterprise on board, which again, you know, if we all think about it, there's three classes of AI clients.

• 1:36:46Speaker 05

  You've got the model makers, right? You've got the clouds and people forget enterprise is just waking up. And historically, they have been a massive amount of spend, mass, right? And so they're just looking up when you see a J P Morgan, some of the banks and some of the, the other retailers, something to come on board. And I think that's going to be a part of the ecosystem. I think it's going to be something that's going to be around.

• 1:37:08John Coogan?

  Yeah. Last question from me. Jordy, you can take whatever after, but um, walk me through the pre-chat G P T era for your company. I imagine that since 2022, 2023, it's been on fire and, and, and demand has been through the roof. But how did the company survive from 2017 to 2022? What were you doing? Who were the customers? Uh, did you have revenue? Like what was, was it all R and D and venture funding? Like what was the, what was the early history of the company? Cause that felt, that feels like a, a very potentially rough period. But how did you get through that, that, that time?

• 1:37:43Speaker 05

  Well, look, I know, I mean, you know, I've been in design for a long time, well, and I always know that the long-term investment. And so, I mean, back in 2017, we're still trying to recognize cats and dogs on the web, right? It's like a cat or a dog. That's what we're doing, right? We're trying to figure out, you know, what, what do we do with this thing, right? And so, um, and we're building recommender models, we're also different people. But the reality is this, the pre, what, what, what OpenAI did, it just flushed out all of that noise pre-open AI. And focus all the value around, let's start here. It doesn't mean that images aren't important. It doesn't mean voice, you know, all these other things are important. But what it did is focused us as a global market to say, let's start here. Let's just start with language.

• 1:38:26Speaker 05

  And it's a very good place to start and it allowed us to actually, all of us can come, come together to say hardware, software, models, everybody's sort of focusing in on language as the use case. And now you've got so much production traction and now you can focus on other things. Like we're doing great in voice. We're doing great in, in, in, in video. And these are things that are also coming, but the ability to sequence these things in production so that you can actually see value has been incredibly important.

• 1:38:51Jordi Hays?

  On, on that note, going forward, how are you thinking about, you know, reacting to customer needs? Like this partnership with, with J P M and some of your other, you know, new customers feels like reacting to this like real time need of like, okay, we understand the potential. We're willing to invest a lot here, but we have certain kind of criteria around how we want to roll these products out versus skating to where the puck is going and trying to make predictions around R and D that you do today that will pay dividends, you know, three, four, five years out.

• 1:39:22Speaker 05

  Yeah, well, when you're chip design, as you guys know, right, it takes you two years to design, and you got to go through DSMC, you got to build these wafers, and you got to build the systems. I mean, there's a three or four year cycle, right? And so you're always, it's a it's a blend between engineering and fortune telling, right? And so you're kind of mixing those. But but the reality, the reality is, you're always doing that. But here's the difference when it comes to enterprise. And we not only we have JP Morgan, but last month, we announced a huge partnership with Vista Equity, which has 94 companies building all these applications. But so what is the biggest thing that we run out with AI is we don't have off takes. We don't have off takes. And so now what you're seeing is the JP Morgans of the world, the Empress of the world, the Vistos of the world, all these

• 1:40:03Speaker 05

  applications, all turning SaaS companies into AI first companies. And you're seeing the demand pull through. And so what we're excited about this is not only the chips, and you got connected with the data center that are there. Oh, the next thing is connected with the end user, the end off take that applies AI into something that's useful to your businesses. And so so we're super excited about the JP Morgan, the Vista, all of these applications. That's our that's our mentality is what are people using it for? Solve that problem. Everything underneath follows.

• 1:40:34John Coogan?

  Thank you so much for coming on the show. Congratulations on the massive round.

• 1:40:39Jordi Hays?

  Nine year overnight success.

• 1:40:40John Coogan?

  Can't wait to talk to you again soon. Have a great rest of your week. We'll talk to you soon. Goodbye. Let me tell you about public.com. Investing for those to take it seriously. They got stocks, options, bonds, crypto, treasuries, and more with great customer service. Our next guest is Alana Palmedo from Paradigm.

• 1:40:58Speaker 06

  Hey, guys. What's up?

• 1:41:00John Coogan?

  What's up? Welcome to the show. Our last guest raised 1 billion. You had to one up them. You had to two up them with 1.2. Tell us about the new fund.

• 1:41:11Speaker 06

  Oh, man. Thanks for having me, guys. Really great to be here. We're super excited about it. We we raised 1.2 billion to go after the new opportunity set frontier.

• 1:41:25John Coogan?

  Thanks for warming that up for me. It sounds nice and warm. Fantastic. So

• 1:41:31Jordi Hays?

  All right, continue.

• 1:41:32John Coogan?

  Continue.

• 1:41:33Jordi Hays?

  1.2 billion for?

• 1:41:34John Coogan?

  Investors.

• 1:41:36Speaker 06

  All right, guys, we're going big. We're going after all frontier tech. We're really excited about it. Obviously, you guys know, we got our start in crypto back in 2018. This is our fourth fund. Yeah, pretty, pretty excited about it.

• 1:41:50John Coogan?

  But I feel like, I don't know, this is being somewhat positioned as like an expansion of the vision or the thesis. But I feel like Paradigm's been investing in broader frontier themes for years now. Like, can you talk about some of the the history of expanding beyond crypto and and the key moments in the fund's history that sort of woke you up to broadening the thesis?

• 1:42:14Speaker 06

  Yeah. Well, I think in 2018, crypto was the most interesting frontier to be investing into. And like, that really was the heart of how we started building the firm. And it was the it was the thesis behind being the sort of researchers, builders first, how do you get really close to the tech to be able to understand and underwrite these things from first principles? And then I think over time, it's it's become pretty obvious that it's not the only frontier and really hard to ignore what's happening in AI. But actually, like, I would say it's more than that. It's like, the world itself has started to blend together. And drawing these concrete lines is like, no longer applicable. I think that like, even something that called itself a crypto project years ago, today, like, things

• 1:42:59Speaker 06

  that are right on the periphery, tech is just all touching each other. And when you think about trying to separate it, it just doesn't work that way.

• 1:43:07John Coogan?

  How are you thinking about the early stage? There's been some chatter on the timeline about, oh, like, every VC just wants to pile more money into the biggest private companies, the trillion dollar private companies. Why would I waste money or time talking to early stage founder? How are you thinking about opportunities at early stage, mid-stage, late stage? What even is mid-stage now? Is that 10? A mere $50 billion company? Early stage at this point? Who knows?

• 1:43:34Speaker 06

  Yeah, I think, well, I think stages is a hard thing to define, because like, what are we really talking about? Are we talking about the stage of the company, the valuation? Like, I think it's it's impossible to to not be backing some of the earliest founders and folks who are, you know, coming out with new great ideas. And so for us, it's like talent led, I would say, like, you find great people. Oftentimes, they're in their early 20s. So I don't think you can ignore the early stage, but you also can't ignore the dynamic that you're describing, which is like, the power law of what's happening with these larger later stage companies, and how much they're able to capture in the compound rate of growth. So I think it's, I think it's like, you have to do both.

• 1:44:14Jordi Hays?

  From an actual product standpoint, are you breaking out the fund? Is there some amount, you know, segmented for the early stage, some for growth, some for incubation? How should founders be thinking about the new vehicle?

• 1:44:29Speaker 06

  It'll be truly stage agnostic. So we're going to invest in everything from super early seed stage, even pre-seeded in some cases, all the way into growth markets. We also, you know, are, we have a core flagship fund, which is an open ended vehicle. And so we invest into public markets, too.

• 1:44:47John Coogan?

  Oh, interesting.

• 1:44:48Jordi Hays?

  Very cool.

• 1:44:48John Coogan?

  What is the effect of this year's IPOs? What have been the internal learnings from the the the height of the opening of the of the IPO window? It feels like it's sort of open, but maybe not fully wide open. We've got a lot of exciting IPOs that have done well. But how is that affecting the fund and your your feeling around the market right now?

• 1:45:10Speaker 06

  That's a good question. I think it's a hard thing to answer. One of the one of the interesting dynamics happening in IPOs is like, Hyperliquid and some of the some of the trading activity we've seen in advance of the IPOs. It's been pretty fun to see, like, the 24/7, 365 markets really come alive, which has been a long term thesis that the crypto markets have had. And I think Jeff Lowe at Hyperliquid has just done an incredible job pulling it off. And and Jeff Lowe at trade.xyz and Jeff Yon at Hyperliquid. And so like, the Cerberus IPO, SpaceX IPO, like, all of these now, like, we had all of this trading activity going into those. And so there was a lot more transparency on pricing in advance of the IPO event itself.

• 1:45:54Jordi Hays?

  Yeah. How how accurate was the like, on chain pricing relative to what these IPOs actually opened at? And do you feel like

• 1:46:05Speaker 06

  Surprisingly accurate. Yeah, surprisingly, like, quite accurate, actually.

• 1:46:10Jordi Hays?

  And have you heard of any institutions, like, starting to, you know, bigger, like, firms on Wall Street that you think will, if they're planning to invest in the IPO or or trade it after it opens, actually start their activity on chain? Is that something that you see happening in the future as we get sort of more evidence that on chain trading tracks, you know, real life after these IPOs actually happen?

• 1:46:37Speaker 06

  Yeah, it's a good question. I mean, if I were them, I would be doing that. I don't know what the rules are and and what the playbook is for them today, and like, what the liquidity and depth of those books looks like. But I mean, I think that's the thesis for what 24/7, 365 markets look like in the future, is you're going to have a lot more institutional activity. Certainly, we're seeing that in perps as a derivative product themselves. Like, I think they're just a much more efficient pure play product for big hedge funds to come in. And I would even say, like, the same thing can be true in prediction markets. Like, what we're seeing is, you know, some people are relating to prediction markets as an institutional product for getting exposure to things and bets that they want to place that is much more precise than we've had in the future, or excuse me,

• 1:47:21Speaker 06

  in the past. And so the future, I think, holds like, still a lot of white space in terms of how these markets are going to evolve. But we continue to be really excited about it.

• 1:47:30Jordi Hays?

  What do your internal meetings look like? Do you have, like, you know, a meeting once a month where you guys pitch new frontiers that you're kind of kicking around? Like, at what, like, what is what is forming a thesis look like? Is it is it all partner driven? Or is it more collective? You guys have kind of a general idea of a category that you're excited about, and then you work together?

• 1:47:55Speaker 06

  Well, say, top-down, like thematically, we're investing into areas where that are structurally long AGI, first and foremost. So what are the things that are going to have a natural tailwind to come out of that? We don't run like necessarily a top-down process, though, down to an investment and say like, let's go do a deep dive or a particular theme. I think that oftentimes you try to gain conviction and do sprints on individual areas in the market that were maybe like there's a particular founder that we are excited about. But the process, yeah, I would say it's more organic. Like, each individual partner may have a different thing that they're excited about and digging in on. I do think,

• 1:48:39Speaker 06

  like, you know, fundamental to our thesis is like, we have to be close to the tech. And so we ourselves have to be able to go really deep and like, understand these things down to, you know, lines of code. And a lot of folks on the team are computer scientists or physics.

• 1:48:59Jordi Hays?

  What about down to the metal? You guys have a little data center in the office?

• 1:49:03Speaker 06

  No data center in the office. Yeah, I mean, like orbital data centers, are they the future? I don't know. What do you guys think?

• 1:49:11Jordi Hays?

  I don't know. I think you guys should should get some, get on, get on the next SpaceX rocket and run a little experiment.

• 1:49:21John Coogan?

  I think it's all just, yeah, I'm on the Elon timelines, which is take whatever he says and multiply it by three, and that's probably true, which is still going to happen, but just not next year.

• 1:49:31Speaker 06

  Yeah, I think Elon will will things into existence.

• 1:49:36John Coogan?

  Yes, with enough time, he will get there. Almost always. But it takes time. Anyway, thank you for taking the time to come chat with us and congratulations on the new fund.

• 1:49:46Jordi Hays?

  Yeah, and excited to meet all the new founders joining the portfolio.

• 1:49:49John Coogan?

  We've got a great portfolio already.

• 1:49:50Speaker 06

  Yeah, yes.

• 1:49:51John Coogan?

  True anomaly. I love Zipline.

• 1:49:53Speaker 06

  Evan Rogers, Keller is amazing, is Zipline. Yeah.

• 1:49:58John Coogan?

  Fantastic. Well, have a great rest of your day, and we'll talk to you soon.

• 1:50:02Jordi Hays?

  Yeah, great to have you on, Lana. Cheers.

• 1:50:04John Coogan?

  Let me tell you about Codex. Codex is a powerful workspace for getting work done with AI agents, whether you're writing code, analyzing data, creating content, or automating business workflows. Codex helps you move projects forward from start to finish.

• 1:50:16Jordi Hays?

  Our next up is Byron Boots.

• 1:50:18John Coogan?

  We've got Boots on the ground.

• 1:50:19Jordi Hays?

  Boots on the ground.

• 1:50:22John Coogan?

  From

• 1:50:23Jordi Hays?

  Here he is.

• 1:50:24John Coogan?

  Overland AI. Welcome to the show. How are you doing?

• 1:50:25Speaker 07

  Oh, great. Thanks for having me on, guys. It's really exciting to be here.

• 1:50:30John Coogan?

  Yes.

• 1:50:31Jordi Hays?

  Great to have you.

• 1:50:32John Coogan?

  Very excited. Can you reintroduce the product and then take us through the latest news and the contract that you just signed?

• 1:50:37Speaker 07

  Yeah, sure. So, good news is, I'm working here out of our factory in Seattle, so you can actually see the product that we have, right? So, we're building autonomous ground vehicles for defense. Basically, you think about that as like robots for the battlefield. So do you guys want to see it?

• 1:50:55John Coogan?

  Absolutely.

• 1:50:56Speaker 07

  Want to walk through it a little?

• 1:50:57John Coogan?

  Give us a tour.

• 1:50:58Speaker 07

  So, so here's, here's one of them. This is our Ultra product. You can kind of see the top part of it. It's a large off-road ground vehicle. You've got sensors in the front, so there's stereo cameras and LiDAR. You've got these big, big wheels here and long travel suspension. Down here is a payload deck, so you can think about putting, you know, big payloads on the vehicle. Right in here, there's onboard power, there's compute down below the deck, comms in the back. So, that gives you just a brief overview of one of the things that we're building. And then, you know, you asked about the contract, and we're super excited. So, we're the first ground autonomy provider to get a production

• 1:51:39Speaker 07

  contract with the US military. Twenty million dollar contract from the US Marine Corps.

• 1:51:45John Coogan?

  That's amazing. It's fantastic. That, you're thinking about, I'm thinking, that truck needs a guy. What does the payload look like on there? It seems very modular. It seems like you can put a lot of different equipment on that. Is that something that's delegated to the Marine Corps? They decide, they partner with other primes? Or do you have like, other relationships where you can bring the configuration to them?

• 1:52:09Speaker 07

  So, we've put 30 payloads, 30 different payloads on these vehicles. It's designed to be modular. You can see that there's L-Track down here that makes it really easy to attach things. So, this is everything from kinetic payloads, like remote weapon stations, drones, EW. So, it depends on what the customer wants. We can help them integrate anything onto this vehicle.

• 1:52:33Jordi Hays?

  Dogs as a form factor. There's been a bunch of sort of creepy

• 1:52:39John Coogan?

  Robot dogs?

• 1:52:40Jordi Hays?

  Robot dogs.

• 1:52:41John Coogan?

  Or actual dogs.

• 1:52:42Jordi Hays?

  Well, we should get into real dogs. But, there's been a bunch of videos circulating recently. There was one, maybe a week ago, of robotic dog, and it seemed like they had solved like, some of the recoil challenges. Do you think that's a, like, how are you thinking about that form factor? Obviously, you guys are focused on something else, but I'm sure you understand the trade-offs of both. I can imagine, like, your product is much better for high-range, you know, situations where you need a lot of range. But, but how do you think about it?

• 1:53:13Speaker 07

  Yeah, so, so one of the reasons why we love this form factor is that it's, first of all, large enough to put a serious payload on it. It can handle 1,000 to 2,000 pounds, depending on what the configuration is. It's got wheels, so, you know, it has really good use of energy. You can, you can drive it 100 miles. So, robot dogs are really cool, too. So, before I started Overland AI, I was a professor running a lab where we worked on machine learning and robotics, and we had a bunch of robotic dogs in the lab, and they're fun to work on. But I think wheeled vehicles are really the place where we can get, you know, the most

• 1:53:50John Coogan?

  You're saying the wheel is underrated, and it doesn't need to be reinvented?

• 1:53:55Speaker 07

  Well, it's just crazy. Yeah, I mean, so not only do you not need to reinvent the wheel, I mean, if you have squishy tires, you can do things like drive up and down stairs and do all sorts of stuff.

• 1:54:05John Coogan?

  I never thought about how simple that is. You can just drive up the stairs if your tires are big enough. How big are the tires on that truck?

• 1:54:12Speaker 07

  I think these are like 38-inch, so pretty big.

• 1:54:15John Coogan?

  38s. That's fantastic. I love it. What does the actual manufacturing process look like? Obviously, you're a very well-funded company, $100 million round recently. At the same time, there's probably a lot of experimentation, a lot of putting different parts of the supply chain together, a lot of modularity. So, how hand-built are these? What is the automation story over the future look like?

• 1:54:36Speaker 07

  So, the Ultra vehicle like this one is actually based on a Polaris Razor chassis and drivetrain. So, we get that from Polaris, and then we upgrade the suspension. You can actually see a great view of that here. We pull out the seats, we just add this flat payload deck. And, you know, we do all the work to add the compute and the sensors and wiring, power, all of that kind of stuff. So, we pull all that together in our factory here. We're also very field-forward, so we test these out in the fields all the time. You know, we're in the field every single day, working on the, you know, the software, the autonomy. And I think one thing which is really, really important about these systems

• 1:55:18Speaker 07

  is that this is a completely autonomous robotic system, right? Like, it has sensors that allow it to perceive the environment, plan through the environment, control it, so that a user can just tell it where it wants it to go, what payload to execute. It's not, you know, it doesn't have to be teleoperated. You know, a single user can control multiple vehicles. It's one of the things which is really cool about this tech.

• 1:55:42John Coogan?

  I imagine there's like, very high demand for both teleop and full autonomous mode, though, right? People want to be able to port in for a particular mission, and then also be able to just try and draw waypoints on the map?

• 1:55:54Speaker 07

  So, so one of the things that I think we see is when people first start to use a vehicle like this, like, oh, like, I want to teleop it and be able to precisely control where it goes. But they quickly realize that you can actually just tell it where to go on the map, tell it, you know, what orientation you want it to be in, and it will just go there and do it. And so, it's actually safer, more efficient, and allows you to get like, much more force multiplication if the operator just relies on the autonomy to get it there. And so, what we've seen is, is warfighters really embracing that and starting to experiment much more with that. So, we think autonomy really is the future.

• 1:56:33John Coogan?

  Any plans to make a dual-use version for Malibu? If you've got a bunch of surfboards, you want to get them down to the beach, you load them up and say, hey, I'll meet you there in five minutes.

• 1:56:42Jordi Hays?

  Some natural light?

• 1:56:43John Coogan?

  Some natural light.

• 1:56:44Speaker 07

  I mean, it sounds, it sounds awesome. We are, we are actually dual-use. We are using this for things like wildland firefighting and other things. So, who knows? I mean, maybe pretty soon, we'll be able to, you know, get you guys one.

• 1:56:57Jordi Hays?

  The day-party market.

• 1:56:58John Coogan?

  The Aman. Taking you around the hotel property. Well, thank you so much for coming on the show. Fantastic years. Congratulations and we'll talk to you soon. We appreciate it.

• 1:57:08Speaker 07

  Thank you so much. Really appreciate it.

• 1:57:10John Coogan?

  Have a great week. We'll talk to you soon. Goodbye. Let me tell you about Consol. Consol builds AI agents that automate 70% of IT, HR and finance support, giving employees instant resolution for access requests and password resets. There's a scoop. There's a scoop on the timeline. Perplexity is quietly building an AI coding tool that takes on Claude code and cursor and codex potentially. It's meant to build software end to end. The tool is being internally used for now under the code name teammate. Perplexity has been sort of bouncing around from different. So Steve who here says, what happened to the Bloomberg terminal killer? They were working

• 1:57:51John Coogan?

  on that for a while. Then they launched Bloomberg computer, which was sort of a computer use agent and, and saw incredible growth. Like you saw the ARR numbers went way up. It's a, it feels like one of those examples of a company that people were sort of like skeptical about and then all of a sudden there's some new good news.

• 1:58:09Jordi Hays?

  Perplexity has a ton of revenue.

• 1:58:11John Coogan?

  Yeah.

• 1:58:11Jordi Hays?

  They're taking a ton of shots on goal.

• 1:58:13John Coogan?

  Yeah.

• 1:58:14Jordi Hays?

  Just like every other company, to be clear, but I think the difference is that perplexity doesn't have a product that's being used heavily by tech insiders. And so people just see them as like running around with like, uh, they, it feels like they don't have something like that's a hit in enterprise that they can fall back on while they keep taking shots at some of these more.

• 1:58:36John Coogan?

  Sure.

• 1:58:36Jordi Hays?

  Enterprisey products.

• 1:58:38John Coogan?

  Yeah.

• 1:58:39Jordi Hays?

  And so, uh, yeah, it's interesting. I, it deals like it's gonna be.

• 1:58:44John Coogan?

  The fun prince. Remember they, they fired up the perplexity investment fund, investing in other startups.

• 1:58:51Jordi Hays?

  I don't know what they invested in.

• 1:58:52John Coogan?

  I don't know what they invested in, but.

• 1:58:53Jordi Hays?

  But it, but he has, he has good access.

• 1:58:55John Coogan?

  It's possible. Everything in that fund is just on fire because the market is doing so well. So many companies are getting marked up. That could be a pretty interesting portfolio to dig into at some point.

• 1:59:06Jordi Hays?

  I think that this is more, this teammate makes me think that it's maybe something else, but I could see them seeing lovable's growth and having a lot of overlap in audiences and raplet and saying like, hey, we want to make, you know, we, yeah, we want to make a more consumer leaning product. I, I, I think it'll be hard to really get a foothold.

• 1:59:27John Coogan?

  They are more adjacent than you think. You go to perplexity, look up some information. You get a nice, you know, UI design on the responses.

• 1:59:35Jordi Hays?

  They have the Joe Rogan partnership, which seems like it's crushing.

• 1:59:38John Coogan?

  Lewis Hamilton.

• 1:59:39Jordi Hays?

  And Joe can be like, hey, Jamie, build me a, build me a new CRM during the show.

• 1:59:45John Coogan?

  I don't think Joe Rogan has any interest in a CRM. I don't think he's in the market. I think he does everything over text messaging. You have to be invited. So you know if you're going to be on the show.

• 1:59:55Jordi Hays?

  Before we have our next guest, Grok four, five.

• 1:59:57John Coogan?

  That's right.

• 1:59:58Jordi Hays?

  Is out.

• 1:59:59John Coogan?

  Is out. Some reviews, some benchmarks.

• 2:00:02Jordi Hays?

  Looking good on the benchmark.

• 2:00:03John Coogan?

  Goes. Uh, I wonder how, does Michael Truell have a SpaceX AI badge yet? Is the cursor team involved in this heavily? Because I know they were doing some consulting work while the deal closed. Of course, the deal was announced, but they're still have to go through post merger integration. I wonder how deep that team was integrated, but excited to check it out.

• 2:00:23Jordi Hays?

  They're still going to be running under the cursor umbrella for a long time. I think it's much easier to sell cursor through the enterprise than.

• 2:00:30John Coogan?

  And they have composer, separate model, but.

• 2:00:32Jordi Hays?

  Yeah. Cursor did say that, uh, we've partnered with SpaceX AI to train Grok four.

• 2:00:36John Coogan?

  To train. Okay.

• 2:00:36Jordi Hays?

  So I think that there was a lot of collaboration.

• 2:00:38John Coogan?

  I really wonder if there'll be any gap in capabilities, like in the spiky intelligence sense of Grok will be good at a particular thing, writing or what, something that's a little bit more X native, Twitter native, uh, news, social media, like that's been the advantage there potentially. And then cursor will be more data code driven and there'll actually be sort of a bifurcation in the models. Or will we just see a consolidation where both models wind up, uh, offering like basically the same spiky frontier as every other model. Uh, anyway, excited to dig into that. Always love a new model launch, but we have our next guest in the waiting room. We have Will Mayer from Colt Holdings. Welcome to the show. How are you doing? Well?

• 2:01:18Speaker 08

  You're doing well. How are you guys?

• 2:01:20John Coogan?

  Thank you so much for taking the time.

• 2:01:22Jordi Hays?

  Great to have you on the show.

• 2:01:23John Coogan?

  Great to have you on the show.

• 2:01:23Jordi Hays?

  What, what have we got in the background here? Is that real?

• 2:01:27Speaker 08

  That is real. Yeah. That's like various artifacts from the past. So, yeah.

• 2:01:32Jordi Hays?

  Very cool.

• 2:01:33John Coogan?

  Webby awards, I think the spring, isn't that a Webby award?

• 2:01:36Speaker 08

  That is a, that is Webby award.

• 2:01:38John Coogan?

  Congratulations. Uh, give us a little background. Give us a little bit of the journey. Introduce yourself for those who are watching who might not be familiar with your work.

• 2:01:46Speaker 08

  Yeah, of course. I am Will Mayer. I'm the co-founder and high priest at Colt Holdings. Background came from making skateboard films at a young age when I was like 14 for companies like Vans, became deeply obsessed with brands and what they represented, moved from there into advertising, working with brands like Nike and Netflix, and then, uh, started working more and more with startups, incubating companies and fell in love with cults and religions and believe that many of the best brands are some form of a religion.

• 2:02:15John Coogan?

  I remember, uh, I remember early in Silicon Valley, I was working on, uh, a company and people were saying like, oh, like you don't want your product to have a cult like following. And I was looking at cult of Mac, like the, the website that tracks Mac, they, they, they refer to it as a cult. Uh, it's a great way to think about things. Obviously some negative.

• 2:02:35Jordi Hays?

  Case against not wanting a cult?

• 2:02:37John Coogan?

  Oh, just that like, you know, cults are bad. They often lead to like terrible outcomes in the literal sense. And also you probably don't want like psychos following you. You want just like normal customers in reality. And that's what Apple wound up getting. They got a huge amount of just normal consumers, but they do have a cult like fan base.

• 2:02:57Jordi Hays?

  Yeah. They needed, they needed the cult to get them through to the truly hit consumer product.

• 2:03:02John Coogan?

  Yeah.

• 2:03:03Speaker 08

  I've been before the like 1970s, the word cult was actually neutral. It just meant a new fringe group. There was a period in like the 1670s, people referred to as the fourth great awakening. It's like huge boom in spirituality, things like Amshamurkiyo, children of God, but also brands like blue ribbon sports, which became Nike or Apple from Jobs. Uh, in that period, the word cult went from being a neutral word to a negative and conservatives started to use it to demarcate and delegitimize new movements. So today, sociologists mostly refer to cults as NRM's or new religious movements.

• 2:03:35John Coogan?

  Okay. Got it. Interesting. But you're, you're reclaiming it. You're taking it back. Talk to us about, I mean, you have a couple of different, uh, a couple of different things going on in your world, but I'm interested particularly in, in advertising video production. Like what does it look like to work with you? How long are you on a particular project? The poly market ad went very viral and I'm wondering like, what does that process look like from start to finish?

• 2:04:00Speaker 08

  It really depends on the type of folks we work with. With poly market, we've been working with them since January and like a bunch of different capacities. The team and I have been working on strategy, a bunch of the brand work and out of home stuff. That campaign came together in an insane timeline and was driven a lot in partnership with their internal team. I got a call like three weeks before the world cup. And if you guys know, like people now are working on Superbowl ads.

• 2:04:21John Coogan?

  Yep.

• 2:04:22Speaker 08

  It's like a six month process. Normally that whole thing from like concept to production to post to being online and routed for TV was like three, three and a half weeks. So it was insane.

• 2:04:32Jordi Hays?

  Yeah. Uh, what, how, how did you process all the different reactions? I, I think I saw the Ruben ad like while watching UFC.

• 2:04:42John Coogan?

  I watched it too.

• 2:04:42Jordi Hays?

  And I was like, whoa, Rick Rubin, prediction market ad. Uh, the ad was obviously very cool. A lot of people were surprised by that. I brought it up to you. You were like, Rick Rubin came out of the rap game. Why is it surprising that he would do like a?

• 2:04:56John Coogan?

  Prediction market on UFC.

• 2:04:59Jordi Hays?

  So, so yeah, I feel like it was very, very mixed reactions to it, you know, not, not on the creative. I think that was universally like creative was awesome, but how did you process people's reaction to it?

• 2:05:09Speaker 08

  I mean, I feel like a lot of the best campaigns are pretty controversial. I mean, in our time with Equinox, we like banned membership sales on January 1st and that became like the most heated moment that business has ever had, uh, but also the most successful campaign in history for them. So I think with, with someone like Rick, what was great is there's nobody that represents questions better than him for those who feel like they're the creative actor, anything else. So he felt like a great fit.

• 2:05:31John Coogan?

  Yeah.

• 2:05:33Jordi Hays?

  I've been feeling over, you know, we're, we're sort of at like peak marketing content and yet like it feels like advertising has never been in a worse place. I don't know if you feel the same way. Uh, the, the, the campaign with poly market is like, it is a campaign. It feels like the, the, the craft of, of advertising. And that's why I think it broke through as much as like, again, the actual creative was good. Do you feel the same way? Uh, do you have launch video fatigue? Uh, it used to be like, you know, maybe a company would come out with a video, but they were really just hoping for like a tech crunch article. Now it's like, well, we're definitely doing a video, uh, and it'll look exactly the same as every other video. And then, yeah, maybe we get a tech crunch

• 2:06:17Jordi Hays?

  article, but it feels like people are trying to create their own artifacts.

• 2:06:21Speaker 08

  I mean, dude, I don't want to, I don't want to point it back at you, but you guys created like the OG launch video, I feel like for TV. I remember like that was my first experience to TVPN was like you guys on a helicopter or something. So I'd say.

• 2:06:34Jordi Hays?

  No, and we, you, you'll appreciate, we had 20 other videos planned and then it, it just started this sort of snowball where everyone was launching videos and we were like, this is no longer a good way to actually break through and get attention. So we just switched.

• 2:06:49John Coogan?

  We had, we literally had the whole production team here, like geared up for like weekly video shoots with ideas and different songs that we were going to play on. And then it just got so tired. We're like, ah, okay, let's not do that.

• 2:07:01Jordi Hays?

  Yeah, we should have, we should have made 10.

• 2:07:03John Coogan?

  We should have made, and then launched them like one day at a time or something like that. But I don't know. Well, yeah. What, what do you think about like the, the, the oversaturation of things? Like how fast the internet moves? When you want to jump on something? When you want to bring back something from the archive that hasn't been touched in years?

• 2:07:18Speaker 08

  It's tricky, man. I mean, again, like not to throw it back to the seventies again, but the average American, I think then saw like 500 ads a day and now it's more than 5,000. And who knows what it'll be in like a few years from now.

• 2:07:28John Coogan?

  Wow.

• 2:07:28Speaker 08

  I, we get hit up like every day for like countless launch videos.

• 2:07:33John Coogan?

  Sure.

• 2:07:34Speaker 08

  I'm not sure how long the trend's going to last. I think just like, it's cliche to say, but like taste and a contrarian point of view will cut through. The approach I would give to people to try is I think the poly market work resonated because we took somebody who would, the whole team, like from creatives on internally there to the photographer, to the talent normally wouldn't be a part of a prediction market campaign. When you think of like Equinox, every photographer we ever hired for Equinox had never shot fitness before. They only shot fashion. All of our design team came from museums that we would poach. So I think like hiring people out of category, you have enough subject matter experts in the business. So bring in people who don't know the category and can bring new things to it.

• 2:08:14John Coogan?

  Yeah.

• 2:08:14Jordi Hays?

  When you have a campaign that hits, where do you, do you think the value is primarily coming from a great idea or the execution?

• 2:08:25Speaker 08

  I think a lot, it's hard to say.

• 2:08:28Jordi Hays?

  The Equinox, the Equinox, the great, the great idea is like, let's make it impossible to sign up for a membership on January 1st, right? Like, that's the idea, and that's what sticks with people. I don't even remember, like, a lot of the visuals, but to me, that, that's what made it a great campaign.

• 2:08:44Speaker 08

  Yeah, I think that we spent less than 1% of what we would normally spend on a January campaign that year for what we launched, which was We Don't Speak January. It was just black and white text, which is why you don't remember it. But, like, brand actions, I think, cut through more than anything now, especially with, like, I feel like AI is gonna democratize creativity and skill to so many people, that there'll be such an abundance of beautiful visuals over the next few years, that, like, the concept and what the company actually does will probably be the most important thing.

• 2:09:09Jordi Hays?

  Yeah. What action are you willing to take?

• 2:09:11John Coogan?

  Yeah, yeah, yeah. Actions speak louder than words, and maybe slop as well. Uh, how, how do you, how is working with Brian Johnson different? Because it feels like, uh, Polymarket, it's sort of like a standard playbook. You have a celebrity, you have a video, it's going in the World Cup. It's like, it's like standard inventory, obviously executed very well, but, uh, with Brian Johnson, it's like this massive owned media influencer-driven individual. He's huge on Twitter. It, it just feels like a different company. How did you approach that when you wind up working with him on?

• 2:09:43Speaker 08

  It's massive. Him and Kate hit us up, like, probably late 2024, early 25, because they heard we were focused on, like, building religions, and the brief was basically like, build a, build a religion for Don't Die.

• 2:09:53John Coogan?

  That makes sense.

• 2:09:54Speaker 08

  So, we spent a lot of last year, we had to, like, to basically collaborate with them on what the doctrine of Don't Die became, a lot of the rituals around it. There's like, uh, I don't know, like, five core tenants of, like, how to build a cult brand, and I think Brian's, like, done all of those completely naturally authentically on his own.

• 2:10:09John Coogan?

  Do you know?

• 2:10:10Jordi Hays?

  Were you, were you responsible for getting him on the cigarette box? You know about this?

• 2:10:17Speaker 08

  I was not responsible for that.

• 2:10:18John Coogan?

  In, in France, they have pictures of, uh, I think, cancer patients on the, on the boxes of cigarettes, and one of them looks exactly like Brian Johnson.

• 2:10:26Jordi Hays?

  Pulling this up.

• 2:10:27John Coogan?

  It's very funny. Yeah, we can share it with you, and you can see, um, I, I'm interested to know the, the five key, uh, tenants of building a cult brand. But first, we'll show you the image of the Brian Johnson on the cigarette box. Can we zoom in there? It looks just like him to me. This one?

• 2:10:46Jordi Hays?

  This would have been good guerrilla marketing.

• 2:10:47John Coogan?

  Yeah.

• 2:10:48Jordi Hays?

  You should have claimed credit.

• 2:10:49John Coogan?

  Yeah.

• 2:10:49Speaker 08

  I'm honestly surprised it's not, but, yeah, respect.

• 2:10:52John Coogan?

  But, well, yeah, what, walk us through the five tenants. How did they apply to Blueprint and beyond?

• 2:10:57Speaker 08

  Yeah, I think it, it comes down to, like, five core things. Uh, the first being doctrine, so having, like, identity before features, which is like, what is the sacred text that everybody abides by? Most brands have a tagline, but what can actually be, like, truly enforced and felt by the community? Brian's done this incredibly well. Um, think of things like, most religions have commandments or tenants. Brands have, like, think different, or, um, just do it. You have longer forms of doctrine, like the Technological Republic by Alex Karp, or, like, Zero to One. Brian used to write under the moniker Zero all the time, so he's been primed for that. Uh, the second is ritual, which, like, again, Brian, through the dinner series for Don't Die dinners, did such a beautiful job at. You guys have a ritual here every day, five days a week. Uh,

• 2:11:40Speaker 08

  but like, what are the initiations into your brand or into your community? Uh, and it's basically forming like a ritual that becomes a habit that becomes identity over time. So, like, you buy a pair of shoes, you join a run club, you are a runner. Uh, the third one is symbols and language. So, like, how can you take elements to create in-groups versus out-groups? What are the key features that signal people who are insiders versus outsiders to your brand? CrossFit has, like, it's not a workout, it's the wad. With Equinox, we never said gyms, we would say clubs.

• 2:12:12John Coogan?

  Yeah.

• 2:12:13Speaker 08

  So, elements like that are super important. The Catholic Church used stained glass windows to educate an overwhelmingly illiterate population in the 12th century to indoctrinate them into the church. Um, that's like another form of symbols for that. The fourth is a charismatic leader, which, again, you have in Brian, you have in folks like Palmer Lucky, where you almost icon yourself. So, like, Palmer, goatee, Hawaiian shirts, flip flops, things like that are so incredibly important. Uh, and then the fifth one is an enemy. I think, like, every brand needs a nemesis. A lot of people use, like, competitors. Apple started as IBM with the, like, 1984 campaign, but over time, it evolved to the concept of conformity, because when you get bigger than your competition, that enemy loses power. But if it's like an overwhelming thought

• 2:12:58Speaker 08

  that can never truly be defeated, the enemy always keeps power.

• 2:13:01Jordi Hays?

  If you were doing a brand for the dog breed Golden Retriever, and you needed to figure out an enemy for the Golden Retriever, what, what would, let's, let's workshop something.

• 2:13:11John Coogan?

  The tennis ball.

• 2:13:13Jordi Hays?

  No, it's not the tennis ball, because that's your friend, that's the thing that you wanna, that's the thing that you wanna, that you're desperately trying to find and get.

• 2:13:20John Coogan?

  It's hunger. I don't know. What do you think?

• 2:13:22Speaker 08

  It could be hunger. For, for my Australian shepherd, it's like every single loud car, so I would say, like, the opposite of peace. And in defining your enemy, you define yourself. So, like, I'd be interested, who, who's your enemy? Who's, like, the nemesis of TBN right now?

• 2:13:35Jordi Hays?

  Ooh. Uh, we, we've actually, I, we, we.

• 2:13:37John Coogan?

  Yeah, we mapped this all out. We actually did this experience. And, I mean, it was geopolitical, near-peer rivals, who you can guess. Uh, and then we had a bunch of, like, more, uh, satirical ones, like, uh.

• 2:13:48Jordi Hays?

  Like our ally.

• 2:13:49John Coogan?

  People who block data centers. Like, we love data centers, that whole thing.

• 2:13:52Jordi Hays?

  I mean, yeah, that, that was, that was early on. We would do things more like, who were, who were our allies? Like, if someone would mention private equity, we were just like, you know, clapping, because that was like, no one ever is, like, standing up for private equity.

• 2:14:05John Coogan?

  Short sellers. We hate short sellers, that type of thing, you know?

• 2:14:08Speaker 08

  Of course.

• 2:14:09John Coogan?

  Yeah. The, yeah, we have a sheet, the terms and memes.

• 2:14:12Jordi Hays?

  How do you, how do you think about scaling what you're doing? Uh, you know, in, in a craft business, it's, uh, it's exceeding, it's been done. Scale's been done in, in, in the creative field, uh, with, with, with agencies, but, uh, oftentimes, it's at odds with great work. But how do you think about it?

• 2:14:33Speaker 08

  I think the, the point of view, the way we work is different than most agencies. Like, I, I have no desire to scale the agency much larger than it is today. The way in which we work was, like, you can either grow an agency really large, try to sell for a pretty shit multiple down the road, or what we started doing, like, five years ago, was incubating startups. So, only a third of our clients pay us in cash, the other two-thirds pay us in some form of equity. We helped create a credit card company that is called Built Rewards. You might have heard of, this guy, Uncle Jane. Um, and I've done a bunch of stuff like that. So, we're working on a ton of those with firms like Index and other venture firms.

• 2:15:08John Coogan?

  I found, I found our actual, our actual list of enemies.

• 2:15:11Speaker 08

  Did you?

• 2:15:12John Coogan?

  HVAC repairmen. I don't know why they're on there. DJI drones, TikTok, Xi Jinping, under monetized podcasts, podcasts that don't have enough advertising.

• 2:15:22Jordi Hays?

  Which we solved.

• 2:15:23John Coogan?

  Uh, leaf blowers.

• 2:15:25Jordi Hays?

  Yep.

• 2:15:25John Coogan?

  Fantasy football. Why'd we put that on there? What's wrong with fantasy football?

• 2:15:28Jordi Hays?

  This is from the original printout of the TBN. So, we, we, when we were doing the show early on, we would have these bits, and if we had a good bit, we would write it down, and we would have the sheet that we would update, and I would just keep it here, and it would just remind me of, like, the, kind of, the core tenants as we were establishing.

• 2:15:44John Coogan?

  In, in, in allies, we had, uh, job creators and bubbles. Very good. Very good. Uh, yeah, it was a lot, it was a lot of fun. Yeah. Good exercise for any brand. Uh, but, of course, everyone should call you first, because you're clearly much better than most people. Uh, but fantastic progress. Thank you so much for coming on the show, breaking it down for us. Jordy, anything else?

• 2:16:05Jordi Hays?

  Yeah, next time you're, next time one of your founders is coming on, flag it to us.

• 2:16:10John Coogan?

  Yeah, be great.

• 2:16:10Jordi Hays?

  Excited to meet them.

• 2:16:11John Coogan?

  Yeah, we'll talk to you soon.

• 2:16:12Jordi Hays?

  Awesome.

• 2:16:13Speaker 08

  Sounds good. Have a good one, guys.

• 2:16:14John Coogan?

  Have a good one. We'll talk to you soon. Goodbye. Uh, the old term sheet, the size gong, timeline, some personnel news. We haven't done one of those in a while. We don't really do the trade deals. The, the, the trading cards really took the place of the trade deals. Um, but, speaking of advertising, I want to watch this SK Hynix advertisement that Tyler dug up. Let's play this, because I want your reaction, Jordy.

• 2:16:39John Coogan?

  To, this is an ad for SK Hynix? Okay.

• 2:16:48John Coogan?

  So, we're also being extorted.

• 2:16:50Jordi Hays?

  Exported.

• 2:16:52John Coogan?

  The time went by.

• 2:16:59John Coogan?

  He's dressed up as the chip, as the HPM? He's dressed up as the memory.

• 2:17:05John Coogan?

  Can't you just be cool?

• 2:17:09John Coogan?

  How have you been doing?

• 2:17:12John Coogan?

  Why is he frozen?

• 2:17:25John Coogan?

  Some prop comedy, I like it.

• 2:17:30Jordi Hays?

  Wow, I have no idea what that means, but I love S.K. Heinecker.

• 2:17:33John Coogan?

  Yeah, we don't know how to make.

• 2:17:34Speaker 09

  I think that ad has like 80 million views.

• 2:17:38John Coogan?

  Uh, for good reason, it's a good ad, makes me want HBM. Well, our next guest is live in the TVP on UltraGum with us. We have Tucker Brown from Compound Creative Holdings, he's the managing partner, friend of Paddy McCormick. And we're very excited to have him here on the show.

• 2:17:54Speaker 09

  We're back.

• 2:17:55John Coogan?

  We're back.

• 2:17:56Speaker 09

  This is quite a set.

• 2:17:57John Coogan?

  Yes, welcome. How was the rest of your trip to France?

• 2:18:01Speaker 09

  Uh, France was hot.

• 2:18:03John Coogan?

  Okay.

• 2:18:03Speaker 09

  It was, um, it was productive though. I think, you know, you guys probably saw the energy that there was.

• 2:18:09John Coogan?

  Yeah.

• 2:18:09Speaker 09

  And.

• 2:18:10John Coogan?

  Were you doing deals?

• 2:18:11Speaker 09

  I was trying to do deals.

• 2:18:12John Coogan?

  Okay, but when you do the deal, are you a back of the envelope guy or a napkin math guy?

• 2:18:17Speaker 09

  Um.

• 2:18:18John Coogan?

  Which one are you pulling out?

• 2:18:19Speaker 09

  You gotta kind of combine, I guess, both.

• 2:18:20John Coogan?

  Ooh, both. Is that just because like you're doing a DCF and it gets so big, you might have spreading comps on different tabs?

• 2:18:27Speaker 09

  It'd be, I mean, yes, I'm pretty understand, you know, the category that we're in.

• 2:18:31John Coogan?

  Yeah.

• 2:18:31Speaker 09

  Um, you gotta be creative with the deals.

• 2:18:34John Coogan?

  Yeah.

• 2:18:34Speaker 09

  So, anyway.

• 2:18:35John Coogan?

  Okay, so, uh, take us back.

• 2:18:37Jordi Hays?

  What was your first can?

• 2:18:38John Coogan?

  Hmm.

• 2:18:39Speaker 09

  What was my first can?

• 2:18:40Jordi Hays?

  Yeah, when, when did you go for the first time?

• 2:18:41Speaker 09

  It was this year. So I've been to film festivals.

• 2:18:43Jordi Hays?

  You waited until it was like actually going to be productive for you?

• 2:18:46Speaker 09

  Yeah, exactly. I want to make it worth the, you know, the money you gotta spend to get there.

• 2:18:50John Coogan?

  But, but yeah, take us back early in your career, how'd you get here?

• 2:18:53Speaker 09

  So I've been at CAA for 15 years, um, you know, the talent agency that represents biggest entertainers in the world, athletes and all of that. Uh, I was at Evolution, which is our investment bank, uh, working on large scale M and A, capital raising transactions across, you know, different categories. Um, so that for a long time, I like the applause on that.

• 2:19:13Jordi Hays?

  Um. For capital raising?

• 2:19:15Speaker 09

  Yes, for, yes. Um, worked with pro sports teams, worked with entertainment companies, TV, you know, TV studios, um, production companies.

• 2:19:23Jordi Hays?

  When does Evolution get, get tapped in for a transaction?

• 2:19:28Speaker 09

  So.

• 2:19:28Jordi Hays?

  Like, yeah, like I can imagine if a, if a sports team is going to transact or, or an emerging league or an athlete has a business that they want to sell, like, am I, am I in the right area?

• 2:19:42Speaker 09

  Yeah, it's where it depends, right? I mean, we're, we don't work on tiny deals. We like to focus on larger scale transactions. So in sports, it's probably going to be something 50 million plus. So if you're putting a check into a team and you got some money to spend and want to buy a piece of a sports team, we'll facilitate that transaction.

• 2:19:57John Coogan?

  Okay.

• 2:19:58Speaker 09

  Um, we'll work on, you know, team sales too. So entire teams that trade. Um, one of the earliest deals that we did was the sale of, uh, the Sacramento Kings of a big runaway in 2011. Um.

• 2:20:09John Coogan?

  And how much?

• 2:20:10Speaker 09

  Teams traded by the way for $500 million, so.

• 2:20:12John Coogan?

  How much does that organization look like a standard investment bank?

• 2:20:16Speaker 09

  A lot looking at, like, I mean, that's the service that we provide. I think the difference is we sit within CAA. So we have the strategic connectivity, the knowledge that might be a little different than other investment banks have.

• 2:20:26John Coogan?

  And, and probably less public markets coverage, no IPOs?

• 2:20:31Speaker 09

  Capital markets capabilities, we don't do public markets.

• 2:20:33John Coogan?

  But focused on M and A.

• 2:20:34Speaker 09

  Yeah, generally.

• 2:20:34John Coogan?

  Got it.

• 2:20:35Speaker 09

  Um, so probably a little bit smaller, our team's only about 20 people. Um, so kind of 50 to 500 millions are sweet spots, sports is going to be a lot larger than that. But I'd say for other, you know, deals, it's really in that kind of range.

• 2:20:47John Coogan?

  Okay.

• 2:20:48Speaker 09

  Um, so, you know, I was there for a long time and I came to, you know, how I've gotten to compound and what we just launched.

• 2:20:55John Coogan?

  Yeah.

• 2:20:55Speaker 09

  I started working around creator deals a couple of years ago. Um, kind of just by chance, you stumble across deals and companies that are interesting, that make sense. You want to lean in and figure something out. And that, that was the case with, uh, Dude Perfect.

• 2:21:08John Coogan?

  Yeah.

• 2:21:08Speaker 09

  Uh, you know, creator business that been scaling really nicely for a long time, built on YouTube.

• 2:21:13John Coogan?

  Probably 20 years in the making or something.

• 2:21:14Speaker 09

  Yeah, 16 years at the time.

• 2:21:16John Coogan?

  16 years at the time.

• 2:21:17Speaker 09

  Yes. Um, so they were ancient in YouTube, you know, lands.

• 2:21:21John Coogan?

  But, but consistent in their performance the whole time, like.

• 2:21:24Speaker 09

  I think they were growing at a 50% CAGR for that entire time.

• 2:21:27John Coogan?

  It's crazy. And, and no matter when you dip, a lot of people dip in and out of Dude Perfect content. Of course, you go through some binge watching, you watch a bunch of the archive, then you come back years later and you see that, okay, everything's evolved and all the great pieces are still the same, but they've added on a bunch more capability.

• 2:21:42Speaker 09

  Yeah, and their audience, I mean, they, they sort of eight to 16 year old boys, I'd say is the core of their audience, but they also grew up with them. So these guys are, they're 38 now, they have a big audience, you know, people in their 30s that are watching the content. So.

• 2:21:55John Coogan?

  That's great.

• 2:21:56Speaker 09

  I didn't know much about it other than what I'd seen on YouTube.

• 2:21:59John Coogan?

  Yeah.

• 2:21:59Speaker 09

  They built a big live entertainment business, they go on tour, they sell at NBA sized, you know, sized arenas.

• 2:22:04John Coogan?

  Yeah.

• 2:22:04Speaker 09

  Um.

• 2:22:05John Coogan?

  So what's unique about that deal? Because they're, they, they have multiple revenue streams at this point. They're doing advertisements, partnerships, they don't only have a partnership with Nerf and like a bunch of other deals in the works, tours. And then they were also talking about building like a Disneyland, basically.

• 2:22:19Speaker 09

  Dude Perfect's world, yes.

• 2:22:20John Coogan?

  Dude Perfect world, incredible.

• 2:22:21Speaker 09

  There was a big mock-up of that when I first went to visit their office in Texas.

• 2:22:25John Coogan?

  Yeah.

• 2:22:25Speaker 09

  A giant, you know, amusement park.

• 2:22:27John Coogan?

  To make a pilgrimage.

• 2:22:28Speaker 09

  So, um, yeah, listen, they wanted to build, and we've heard this a lot from creators, but a, you know, kind of a next generation Disney type business.

• 2:22:34John Coogan?

  Yeah.

• 2:22:35Speaker 09

  Um, for a specific audience around, you know, sports, kids, comedy, family, uh, very family friendly business. Um, and yeah, so I, I sort of got to know the guys, saw their business diversified across a bunch of different categories.

• 2:22:50John Coogan?

  Yeah.

• 2:22:50Speaker 09

  It wasn't just a YouTube business, it was a real media company.

• 2:22:53John Coogan?

  Yeah.

• 2:22:53Speaker 09

  Um, so we took that to market and executed a pretty large scale private equity transaction. It, it wasn't easy. Um, I was naive in the sense that I thought it would be because the financial profile was so attractive.

• 2:23:04John Coogan?

  Why was it not legible to?

• 2:23:07Speaker 09

  It, it just, it's, it's a new category, I think, generally for transacting. It's an opportunity that I see at this point in time.

• 2:23:13Jordi Hays?

  You don't have decades of like case studies in Harvard Business.

• 2:23:17Speaker 09

  There are no, there isn't a single comp pressed, and I looked at media company comps for it, I guess. Um, and you, you're, you're dealing with talent, you're dealing with key man risk in a way that's sort of unnerving to some private equity investors.

• 2:23:29Jordi Hays?

  Platform risk.

• 2:23:30Speaker 09

  Platform risk. I mean, with them, it was a little bit less, uh, contingent on the platform itself, which was an advantage. You know, their YouTube revenue was a small percentage of the overall business at that point in time. Um, but sure, you know, investors get spooked by algorithms, what could happen if it goes up or down or changes and how that impacts the business. Um, so it took, you know, to go, and by the way, you have to find the right partner too. And for, you know, for talent and for their business, they built it over 16 years, they owned it outright. They cared about what, you know, what the future looked like with their partners. So finding the right, you know, not just the right deal, but the right people behind the deal to transact with. I'd say in this category and the creator world is more important than in others.

• 2:24:09Jordi Hays?

  And so you came out of that feeling like you had a greater sort of understanding of these businesses as well as like an appreciation for their potential and their quirks. And so you decided to become the buyer? Is that the right way to think about it?

• 2:24:23Speaker 09

  I, I, there were many times during that process, and there were a couple of others that did after where I was, um, yeah. I, I would just wish I was the buyer in that situation. I feel like I was doing the work to structure the deals that made sense. I understood, you know, the talent behind the deals in a way that maybe others, you know, other buyers couldn't. And I came from the world of the agency at CAA where we had a whole suite of services and, and things we could provide for these creators in a way that, you know, typical buyer wouldn't be able to do. Um, so we pretty quickly started to think about what we could put together to basically be that unique buyer that we didn't see in the marketplace. Um, or we didn't see many of, didn't see really at scale, didn't see sophistication from, and started to iterate, um, you know, what, what that would look like and how it would come together. And do we do it through the agency proper?

• 2:25:09Speaker 09

  Do we set up something independently, which is what we did, uh, because I think it's important to be independent, um, in the way that it's structured. And raised, you know, a good amount of money and, you know, looking to do, um, you know, a lot of deals in the category and really become the, the first of its kind, you know, kind of becoming a buyer in, in this category. So, um, yeah, excited.

• 2:25:30John Coogan?

  For creators or media businesses that wind up with the Disney style business, the flywheel of multiple properties, multiple revenue streams. Do you find that those businesses are sort of organically grown by garden, like a garden or built brick by brick? Like, how often do creators have the idea of where they want to go? And they execute one step at a time? Because I always think of that Disney flywheel. And, uh, it's a beautiful napkin sketch.

• 2:26:02Speaker 09

  Yeah.

• 2:26:03John Coogan?

  And it's so cool and you understand how the business works, but when he drew that, it was like two years before he died. Like it was very much a reflection on a life's work.

• 2:26:11Speaker 09

  Yeah. Listen, the, the best creators really are creative geniuses, but there's not always cohesion with how they think about the future and what they're doing. So oftentimes I may see the whiteboard over there in, in the studio. You walk into their, their offices, the same way, you know, I walked into Dude Perfect's office in, in Texas and you see a whiteboard scattered with ideas.

• 2:26:30John Coogan?

  Yeah.

• 2:26:30Speaker 09

  And it's all brilliant. It's not necessarily put together and structured in a way that, um, that provides again, a lot of cohesion, but there's a lot of opportunity that they see. And I think first and foremost, what they've all done successfully is they focus on, um, building a pretty rabid audience and, and building engagement with that audience. And then once you have that and you have that captive audience, um, it really expands and opens up the world of opportunity beyond whatever that core product or offering might be. So for them, it was trick shots on, on YouTube and then, you know, you build an audience there, kids, family comedy, and you can extend that into live events, into products, into things they probably, you know, certainly in 2009 when they started, didn't think they'd have a line of products in Walmart necessarily, right?

• 2:27:13Speaker 09

  But then you start to dream bigger, once you realize that what you're doing is actually working and resonating with the audience.

• 2:27:18John Coogan?

  Yeah. Uh, so the fund that you've built, how permanent is the capital? Are you thinking about a certain fund life cycle? Is there a world where, maybe not today, but in 10 years, we are talking about capital markets, public markets, creators going public? There's been rumors about Mr. Beast and I could see that happening, but that might be like a exception that proves the rule. But is there a world where in a decade, we're looking at like, yeah, like the top 20 YouTubers and podcasts are public?

• 2:27:46Speaker 09

  Yeah, certainly possible. I mean, it's the, you know, it's the fastest growing segment of entertainment, people want exposure to that. Um, it's going to start with private capital. I think it will probably move into the public markets. Um, so yeah, I think we're moving in that direction. For us, I think permanent capital is an important part of our strategy. We want to, we don't want to be forced into an unnatural life cycle where we're forced to sell quickly. Creators don't, and you know, feedback.

• 2:28:10Jordi Hays?

  Yeah, they're like, hey, you're doing your life's work, but also we're going to try to just change up who you're partnered with in, in a decade. Whereas like a CPG business or a software company, like the management team might be fully turned over, over the fund life cycle.

• 2:28:24Speaker 09

  So we try to, again, in structuring this, we try to solve for what we heard was important to creators in the transactions I've been around.

• 2:28:32John Coogan?

  Yeah.

• 2:28:33Speaker 09

  And some permanence of the partnership or permanent capital is part of it. You know, letting creativity sit and remain with the creators even in a controlled transaction. So there's no interference in the creativity.

• 2:28:44John Coogan?

  Sure.

• 2:28:45Speaker 09

  Of what they've built. That's really important, even if you're selling equity control.

• 2:28:48John Coogan?

  Yeah.

• 2:28:50Jordi Hays?

  Yeah, to me, I look at it and I can see over time this just being a more and more and more important part of CAA's strategy because the challenge right now is you have creators. Historically, there was maybe, I don't, I don't, you know, you'll know much more about the history, but my feeling is that historically there was like maybe 500 stars that matter.

• 2:29:10Speaker 09

  Yeah.

• 2:29:11Jordi Hays?

  And then now in media, there's like 50,000 stars that matter across every single vertical. It was, it was maybe easier to run a business when you had, you know, you could just focus on like a smaller number of like really, really big stars who were running their own, you know, basically that they had their own individual businesses. But when you have 50,000 creators and all these sub niches, you can't like, it seems like there's probably a limit, like you can't scale the CAA team 10, 20x and expect to be running the same kind of business.

• 2:29:43Speaker 09

  You need too many agents to cover it all.

• 2:29:45Jordi Hays?

  Yeah, exactly. And so as a, as a sort of new strategy saying like, hey, we're going to try to service as much of that market as we can, but we're also going to try to find the best talent and businesses across all these different categories and then be a long-term partner to those and actually participate in their overall business.

• 2:30:04Speaker 09

  Yeah, you go deep with the ones you believe matter most and are positioned to scale the most.

• 2:30:10Jordi Hays?

  Yeah.

• 2:30:10Speaker 09

  Right, so we're not, you know, trying to transact with hundreds or thousands of creators. It really is to pick the businesses we believe in and categories that we think are exciting and scalable and go deep with them across the board on the capital side of things. Then, you know, we're.

• 2:30:25Jordi Hays?

  Yeah. How do you think about stages in a creator's life cycle? There's people that are going to be incredibly talented from a just pure talent standpoint, right? There's people out there that are like not even good at making videos, but have incredibly engaging content because they're so good. And then usually they graduate into having, you know, better and better teams and eventually maybe they get into products. But like, how do you look at the different stages? What's, what's too early?

• 2:30:55Speaker 09

  Yeah.

• 2:30:55Jordi Hays?

  When are you seeing a, an individual who's like showing all the potential, but is too early for maybe a transaction?

• 2:31:03Speaker 09

  Yeah, we don't like to be hyper prescriptive with, with how we look at it. I mean, there's certain things we do look for to assess whether it's the right stage for us to get involved. If it's an individual without a business, it's tough for us. And there's a lot of work to do, probably to pull it together and make it transactable. So we look for it to be an actual business that's been built and scaled to some capacity. Right now.

• 2:31:24Jordi Hays?

  Is that like multiple revenue lines, not dependent entirely on platform revenue?

• 2:31:29Speaker 09

  Yeah.

• 2:31:30Jordi Hays?

  Like those kinds of.

• 2:31:30John Coogan?

  Maybe an operator.

• 2:31:31Speaker 09

  Diversified to some extent, maybe an operator, not essential. I mean, there was no operator at D Perfect when we did that deal.

• 2:31:36John Coogan?

  Wow. Wait, they do everything themselves?

• 2:31:38Speaker 09

  I mean, there was, I think, 20 employees. The oldest outside of them was 24.

• 2:31:42John Coogan?

  Yeah, but they didn't have like a business guy who would do like the ad deals. That's crazy. I love that. That's awesome.

• 2:31:49John Coogan?

  Yeah, it's a different business.

• 2:31:50Speaker 09

  Yeah, it's 80 employees now.

• 2:31:52John Coogan?

  Yeah, of course.

• 2:31:54Speaker 09

  So you look for some sense of a business, achieve diversification in some, it doesn't need to be massive, but yeah, some off-platform monetization is, you know, is attractive. And then, yeah, scale of revenue, profitability. We really only like businesses that are profitable and that's, it's not, I don't want to say it's not hard to do, but in this category it is. You're used to seeing margins that are not common in traditional media.

• 2:32:17John Coogan?

  Yeah.

• 2:32:18Speaker 09

  50% plus margins.

• 2:32:19John Coogan?

  Sure.

• 2:32:19Speaker 09

  For a creator business is actually relatively, it's relatively standard.

• 2:32:23John Coogan?

  Sure.

• 2:32:24Speaker 09

  Yeah, look for profitability growth and again, categories that we think are positioned to scale.

• 2:32:29John Coogan?

  Yeah.

• 2:32:29Speaker 09

  And where we can be valuable and add additional value. So, you know, bring service.

• 2:32:34Jordi Hays?

  When you're, when you're underwriting a deal, are, like, how do you think about it, like, how do you, how do you think about a business where you know there's a ceiling? Like, and, and I imagine there's certain situations where you're totally, it's like there's certain creators, I would say that we've always said that if you, if you asked us to make content for 100 million people, we would just wouldn't enjoy doing it because we'd be covering topics that are not interesting, right? To us at least. And there's, I think, a lot of creator businesses where there's sort of like some TAM on, from a, from an audience standpoint in the category.

• 2:33:13John Coogan?

  You don't think we can get 100 million views on an S K Heineck's advertisement reaction video, Jordy? Have some faith. Have some faith.

• 2:33:19Jordi Hays?

  We'll see.

• 2:33:20John Coogan?

  We're talking about South Korean memory company advertising.

• 2:33:24Jordi Hays?

  But I can imagine you're talking to the creator and saying like, hey, I think that you're, you're a $5 million business today. I think that you can get to 40 and, and that's going to be enough for it to be a home run for you and us. Like, is that a conversation that you have or is it always like?

• 2:33:40Speaker 09

  Yeah.

• 2:33:41Jordi Hays?

  I need to see the path to superstardom and, you know, nine figures of revenue.

• 2:33:46Speaker 09

  I think, listen, there's a difference between how we might underwrite the deal and think about where there's a ceiling and then how you communicate that to a creator.

• 2:33:55Speaker 09

  If you're trying to justify, you know, value, maybe that's part of the conversation, but really they, you know, the best creators won't really cap their potential.

• 2:34:03John Coogan?

  Yeah.

• 2:34:03Speaker 09

  So, you know, even if it's a $10 million business today, they probably think this is a billion dollar business if we do it right.

• 2:34:09John Coogan?

  Yeah.

• 2:34:09Speaker 09

  We sort of serve the audience in the way that we can.

• 2:34:11John Coogan?

  Yeah.

• 2:34:13Speaker 09

  And so honestly, any of the businesses we look to transact with now, probably we ourselves believe could be billion dollar plus businesses. And if we don't believe that, we're probably not betting in the right categories with the right creators.

• 2:34:26Speaker 09

  It's early to maybe make that kind of call, you know, in this space. But to the earlier comment about public markets, you know, potential, I think we'll see many of these businesses scale to that billion plus dollar mark, potentially go public. And yeah, it's just, there's a lot, I think, that's left to.

• 2:34:43Jordi Hays?

  Would it end up, is, is a more likely, or one of the more likely paths where you end up with effectively an index of a bunch of top creators? Because to me, like creator business is like, I don't know that many creators, even like, look at the most sophisticated operations, like a Mr. Beast, right? You have these like nine-figure Amazon deals. You have these consumer packaged goods businesses. You have, you know, royalty streams effectively. But him running, him running his business being like, I gotta make sure that next quarter's good, otherwise we're going to nuke. Like, that feels challenging, whereas if you took a basket of, of, you know, 200 top creators that, that were, were, were trading, you could see that being like stable and

• 2:35:28Jordi Hays?

  growing, you know.

• 2:35:29John Coogan?

  You're looking for sort of like a Manosphere ETF for you. So you can have exposure to Rogan.

• 2:35:33Jordi Hays?

  Levicular and retained in one ticker.

• 2:35:39Speaker 09

  I did, listen, that's, that's partially what we're trying to do, right? I saw the difficulty from institutional capital partners to transact with single creator businesses or single assets.

• 2:35:49John Coogan?

  Yeah.

• 2:35:50Speaker 09

  They're all eager to get into the category. They want to put money to work. They talk about it all the time. You bring them a deal that's attractive and they're like, ah, we can't, we can't do this. There's too much risk. If you bring a basket though, right, I think it's a lot more attractive.

• 2:36:02John Coogan?

  And in some ways, D Perfect is a little bit of a basket. There's a number of on-camera talent. It's not single person, single name. And same thing with, with Midas Touch. They have a number of, of products in their portfolio and number of hosts and whatnot.

• 2:36:16Speaker 09

  Yeah, the more, the more layers to diversification you can achieve.

• 2:36:19John Coogan?

  Of course.

• 2:36:20Speaker 09

  More attractive.

• 2:36:20John Coogan?

  It's going to be easier.

• 2:36:21Speaker 09

  Right, so the business itself.

• 2:36:22John Coogan?

  Yeah.

• 2:36:23Speaker 09

  The talent maybe that's involved.

• 2:36:24John Coogan?

  Yeah.

• 2:36:24Speaker 09

  And for us, the portfolio that we build.

• 2:36:26John Coogan?

  Yep.

• 2:36:28Jordi Hays?

  How are you, how are you building out your pipeline of opportunities? Are you going, I'm at, you know, you're in Cannes, you're meeting a bunch of creators, but I imagine you're like, probably I, like, the beauty of creator businesses, they're out in the open.

• 2:36:42John Coogan?

  Yeah.

• 2:36:42Jordi Hays?

  Like an invisible creator business is not one. Whereas like some of the best deals in, you know, traditional private equity are like, you would have to like live in the town and know that this, you know, certain business was, was printing.

• 2:36:56Speaker 09

  Yeah, they're out in the open, but some of the flashiest ones don't always have the numbers you might expect that they would. Some that you don't think about as much, a little quieter, building actually really significant businesses in a different way. So you don't always know everything, even if it is quite visible. You know, I've had the benefit of living in the category for a little while, so I've seen a lot and have a good sense of what, you know, the immediate attractive targets might be. You know, we again, have the relationship with the agency at CAA. We've got a, I think, 308 creator clients. Not all of those would make sense for us, but a lot of them are, are growing and are looking to potentially think about capital partners. So there's a built-in pipeline there. And, you know, we're open for business. I've gotten a lot of great inbound opportunities that have come our way since we announced.

• 2:37:41John Coogan?

  That's great.

• 2:37:42Speaker 09

  So yeah, it's, there's a lot, a lot of activity and a lot, I think, for us to do.

• 2:37:47Jordi Hays?

  How much time are you going to be spending in New York versus LA?

• 2:37:51Speaker 09

  LA, yeah, so I've been back and forth over the last decade plus quite a bit. I spend the winter out here usually. Smart to do. February in New York's not always the, the most fun. So I'm usually here about twice a month. We'll have a headquarters probably in both, you know, both locations. And then, you know, creators are kind of everywhere too. So New York and LA have been the hubs of entertainment, London a bit internationally. But we see that much more dispersed with creators that are all over the place, so.

• 2:38:19John Coogan?

  Yeah.

• 2:38:20Jordi Hays?

  How, how has the influencer creator industry evolved in China? Is it similar, how does it, how is it similar versus how does it differ from the US?

• 2:38:31Speaker 09

  Yeah.

• 2:38:31Jordi Hays?

  It's like they were big and early in like live shopping, for example.

• 2:38:37Speaker 09

  Yeah, I mean, did you have a sort of massive, you know, massive population? All the numbers you see with businesses over there are pretty crazy from an audience perspective.

• 2:38:49Speaker 09

  It's, listen, transacting with China.

• 2:38:52Jordi Hays?

  Yeah, I don't, I can't imagine you could do deals there, but I'm saying like, is, is, is, when you, when you look at that market, is there anything that you see that allows you to feel like you're seeing into the future?

• 2:39:03Speaker 09

  It's tricky, right? Because if you do take that as a learning and you try to apply it to a different territory, it probably won't necessarily translate in the same way.

• 2:39:12Jordi Hays?

  Yeah, like live shopping has taken off in the US, but it's a lot of like functionally gambling, not like buying oranges.

• 2:39:19Speaker 09

  Yeah.

• 2:39:19John Coogan?

  Oh.

• 2:39:20Jordi Hays?

  Like a lot of these like live shopping platforms are like people live breaking open packs of cards.

• 2:39:26John Coogan?

  Yeah, unboxings and stuff.

• 2:39:27Jordi Hays?

  They're like shopping for apparel in the same way that in China, like a lot of these live shopping platforms, they would start with like, you could literally go and buy a new Kiwis and you can see the Kiwis and then you're just hitting.

• 2:39:39John Coogan?

  Apparently China doesn't have a Joe Rogan, like they don't have a really dominant just public commentator who just gives his random opinions about everything.

• 2:39:48Jordi Hays?

  Well, I think somebody like Joe Rogan that's commenting on that many things.

• 2:39:52John Coogan?

  It's a little risky politically, essentially. So, yeah.

• 2:39:55Speaker 09

  Yeah.

• 2:39:56John Coogan?

  What about Hollywood? What's been your update on the creator economy's interaction with Hollywood? Post the trifecta of creator-led movies, so obsession, backrooms, Iron Lung.

• 2:40:08Speaker 09

  Yeah.

• 2:40:09John Coogan?

  Three, Born on YouTube, Crossed Over. This was predicted like a decade ago. It's finally here. Is it, it feels like very high status, but maybe not actually moving the needle for some businesses? Not something reliable, like something low status like ads and merch, which might actually drive a business forward.

• 2:40:26Speaker 09

  Tough to, yeah, again, tough to rely on that and bet on that as a business model in and of itself. I think it's a component that's pretty interesting. For creator businesses, I mean, it was a big kind of narrative early on in podcasting, using podcasts as a cheap sort of IP development mechanism for long-form content.

• 2:40:43John Coogan?

  Yeah.

• 2:40:45Speaker 09

  You know, same thing with YouTube, right? A cheaper way to test and see if you've got an audience.

• 2:40:48John Coogan?

  Yeah.

• 2:40:49Speaker 09

  And then use that to sort of monetize in long form. So it's a, it's a great trend, I think, that we're seeing more and more of that. It'll continue.

• 2:40:57John Coogan?

  We were talking to Alex Hermosy about this yesterday and it was, it was interesting thinking about like, he was saying that he just doesn't reach the same audience as a

• 2:41:09Jordi Hays?

  Ramsey.

• 2:41:10John Coogan?

  As a Dave Ramsey, who, who just has syndication on so many radio shows. And if he were able to crack into that, it's not that that deal would make him that much money, it's that he would expose his overall portfolio, his overall business to a new tranche of clients and potential like customers, but also audience members. And so there's an interesting world where you could underwrite the, you know, high risk, maybe this person does the next obsession, or you could say, this person's on a track where they are going to crack distribution on radio or TV at some point and they're going to be on that channel and that's going to be a halo for the overall business. But obviously hard to predict.

• 2:41:47Speaker 09

  Yeah. And that's why it's hard to

• 2:41:50John Coogan?

  Yeah.

• 2:41:50Speaker 09

  underwrite against that, right? I mean, it's a, that moonshot.com could drive upside, but probably not going to be a base case underwriting situation.

• 2:41:58John Coogan?

  That makes sense.

• 2:41:59Jordi Hays?

  What about Substack and potential new platforms?

• 2:42:05Speaker 09

  A Substack, you know, you've seen some really nice businesses built and monetized on that platform. So in the same way that YouTube can be a core that you build off of in other areas, you could take YouTube, build into Substack. The same thing, I think we're seeing migration from Substack into video and other, you know, other platforms. So it's one of the, the kind of top platforms that we're actually looking at to evaluate if there are things for us to, to invest in there. And again, migrate that audience into other mediums. So, yeah, there's a, there's a lot, you know, to do in that category.

• 2:42:36Jordi Hays?

  Yeah, I was thinking like, why is there no Substack for video? You know, like, like a platform that was less algorithmic and of course, the Substack for video will almost certainly be Substack.

• 2:42:48John Coogan?

  Yeah, yeah, probably. You just gotta get the right people on there or something. It's hard because like, as soon as you make a video, you're like, well, this wants to be replicated everywhere on the internet. So let me throw it up on every channel.

• 2:42:59Jordi Hays?

  Timeline to first deal announcement. Any prediction?

• 2:43:02Speaker 09

  Are you to hold me to it? It's always hard to think that.

• 2:43:05Jordi Hays?

  I mean, but, but, but we know, we, we have, you know, friends with funds that have a unique strategy and sometimes they don't do a deal for 18 months after closing a fund. So like

• 2:43:16Speaker 09

  I think we, we benefit from a bit of a running start because we've been in conversation with creators. We've had this, you know, in the works for a little while.

• 2:43:22John Coogan?

  Sure.

• 2:43:23Speaker 09

  We have relationships that are, that are warm. So, you know, we're looking to move fast, but also want to be thoughtful. We know those, those first couple of deals are going to be really important for setting us up for longer term success. Love to think we get something done by the end of this calendar year.

• 2:43:38John Coogan?

  Oh, cool.

• 2:43:39Speaker 09

  These deals, at least the ones I've been around historically, they do take time.

• 2:43:42John Coogan?

  Yeah.

• 2:43:42Speaker 09

  There's a relationship element to it that involves a real-time commitment. You want to make sure it's, again, obviously structured the right way. So we're ready to go. Just want to be thoughtful about making sure that we're picking the right partners and setting up the right deal for ourselves.

• 2:43:57John Coogan?

  Makes sense.

• 2:43:57Jordi Hays?

  Amazing. Let's hit the gong for the fund itself. No, I want Tucker to hit it. Look at this guy. He's a giga chap. You can have at it as hard as you want.

• 2:44:07John Coogan?

  It's warmed up.

• 2:44:08Jordi Hays?

  It's warmed up.

• 2:44:08John Coogan?

  It's warmed up.

• 2:44:09Jordi Hays?

  Just break it, break it.

• 2:44:11John Coogan?

  There we go.

• 2:44:13John Coogan?

  Well, thank you for coming on the show. Thanks for coming on down. We can wrap the show there.

• 2:44:19Jordi Hays?

  You're welcome to do this with your first deal.

• 2:44:21John Coogan?

  Yeah, we're excited for that. Leave us five stars on Apple Podcasts and Spotify. Sign up for our newsletter, tbpn.com and we'll see you tomorrow. Goodbye.

• 2:44:30Jordi Hays?

  Cheers. Love you.