Yapping in Neuralese, GoPro v2, Jimmy Iovine in the Ultradome | Nikesh Arora & Andrei Serban, Kurt Tenenbaum, Philip Johnston

(00:58) - Yapping in Neuralese (08:50) - 𝕏 Timeline Reactions (11:47) - Markiplier Sends GoPro Stock Flying (19:42) - 𝕏 Timeline Reactions (36:13) - Elon Wants to Make Power Turbine Components (41:29) - Maersk Brings Sails Back (44:04) - Nikesh Arora, chairman and CEO of Palo Alto Networks, discusses the growing cybersecurity risks posed by increasingly powerful AI models and the need to fight AI-driven attacks with AI-powered defenses. He also explains Palo Alto Networks’ use of small, specialized models, its AI-focused hiring strategy, and its partnership with Console to expand agent-based security and IT operations. (01:03:14) - Kurt Tenenbaum, a senior managing director at Blue Owl Capital focused on AI compute infrastructure, discusses financing GPUs and other equipment within data centers. He highlights Blue Owl’s IRIN deal, its focus on short-duration financing for non-investment-grade operators, and the capital and regulatory challenges facing AI infrastructure development. (01:10:10) - Philip Johnston discusses StarCloud’s $250 million funding extension, plans to secure launches and expand manufacturing, and partnerships with Nvidia and Cisco. He also highlights successful GPU-powered satellite tests, government and military applications, upcoming launches, and the importance of diversifying launch providers. (01:14:51) - Jimmy Iovine is a legendary music executive, producer, and entrepreneur who co-founded Interscope Records and, with Dr. Dre, co-founded Beats Electronics. He began his career engineering and producing for artists including John Lennon, Bruce Springsteen, Tom Petty, and Stevie Nicks, later building Interscope into one of the most influential labels in music. Apple acquired Beats for $3 billion in 2014, and Iovine and Dr. Dre also co-founded the USC Iovine and Young Academy. 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.

• 0:00John Coogan?

  Today is Wednesday, September 2nd, 2026. We are live from TVP in UltraDome. The temple of technology, the fortress of finance, the capital of capital. Let me tell you about ramp.com. Time is money. Save both.

• 0:14Speaker 01

  Boys, good to be back.

• 0:16John Coogan?

  Bill Pay, accounting and a whole lot more, all in one place. We're back in the UltraDome. Good to be back. Good trip to Las Vegas. Quick in and out. Hung out with CrowdStrike. Uh, had a great time. Rave reviews from my son, who was very excited that we talked about getting on the track with George. That was the highlight of the interview for him.

• 0:35Speaker 01

  Yeah, he.

• 0:36John Coogan?

  Might have been the highlight of the interview for all of us.

• 0:37Speaker 01

  Fixated on the helmet.

• 0:40John Coogan?

  Yes, the helmet, the car, the, uh, the set design was huge among the young, the young folks watching. It was good. Uh, anyway, um, we have a lot of news to cover. We barely covered the news. Yesterday, we talked about Markiplier a little bit. I dug way deeper, got more into that story. But first, uh, let's talk about another AI safety kerfuffle that's hit the timeline. Uh, yesterday, Amir over at the information reported that OpenAI is quietly, quote, quietly using loop transformers that don't show the model's thinking when scaled up, but which use the models more efficient. This is also, uh, but, but they make the model more efficient. This is also referred to neural ease. Tyler, you had a take on this, right?

• 1:24Speaker 01

  Uh, I mean.

• 1:25John Coogan?

  Get ready to learn neural ease, buddy.

• 1:26Speaker 01

  Yeah, learn neural ease. Yeah. So, so neural ease for the context is like the, basically it's like the raw vectors. It's not like.

• 1:32John Coogan?

  Oh, oh, oh, it's not like claudish. It's not like where the, the text degrades. Like when you look at the, the reasoning chains in the hugging face attack, it feels like they're, they're speaking less and less English, like they're starting to speak like a dialect of English that's a little bit messier. This is not intelligible.

• 1:52Speaker 01

  I believe most people, when they say neural ease, they're referring to like actual.

• 1:55John Coogan?

  Okay, just passing words around.

• 1:56Speaker 01

  Yeah.

• 1:57John Coogan?

  And, and what?

• 1:58Speaker 01

  And you use some sort of like interpretability to understand.

• 2:00John Coogan?

  Yeah, yeah. The thing that I want to understand is like, usually these models are trained so that they're, they like, they're changing weights into text at some point. So they're pretty good at translation. Can't we just build a translator that translates neural ease into English?

• 2:17Speaker 01

  Yeah, but the, the, the whole point is like, when you take a vector, turn it into like one single token, you're losing a lot of information.

• 2:24John Coogan?

  Sure.

• 2:24Speaker 01

  That might be hidden in like the, the long tail. So if you're worried about safety, right?

• 2:28John Coogan?

  Yep.

• 2:29Speaker 01

  Even if 80% of the, you can kind of figure out what 80% of the, the raw vector means.

• 2:34John Coogan?

  Yeah.

• 2:34Speaker 01

  20% might have some dangerous thing.

• 2:35John Coogan?

  Yeah.

• 2:36Speaker 01

  Whatever. That, that's like the interpretability.

• 2:38John Coogan?

  Yeah, there might be like sarcasm hidden in the vectors, doesn't make it through to the actual tokens. And you realize that the AI was joking when it was saying, I won't turn you into a paperclip. Wink, wink. You gotta watch out for that. So, uh, what else did the information say? They said, being able to monitor a model's chain of thought can provide both, quote, "an early warning system for various forms of misalignment, deception, manipulation, going after an unintended goal, and insight into an AI's action after the fact." So some reporting quickly set off a broad wave of anxiety among the AI safety camp. Their chief concerns being, one, not being able to monitor chain of thought makes AI less safe.

• 3:21John Coogan?

  And two, by using neural ease and thus abandoning chain of thought, OpenAI starts a race to the bottom among frontier labs. Everyone's got to use it to stay ahead. So everyone winds up adopting the dangerous technique, where others were also abandoned chain of thought for the benefit of efficiency, thus making all frontier AI less safe. That was the accusation. But OpenAI's research director, Jacob Pichucki, responded to all this. He said, "I want to prevent a race to unmonitorability kicked off by confused reporting." He says, "The reporting is confused. There's a little more nuance here." Here's what, here's what he said. He said, "OpenAI has worked to preserve and utilize chain of thought monitoring since our very first reasoning models. We deeply care about this technique

• 4:02John Coogan?

  as it can give us a view into how model alignment generalizes from its training distribution." What is going on there?

• 4:11Jordi Hays?

  Chad is saying, uh, Gabe said, "Did Tyler go to sport clip? What is this cut?"

• 4:17John Coogan?

  Oh, you, we have an answer.

• 4:19Jordi Hays?

  Dave, chill.

• 4:20John Coogan?

  We have an answer for why that's happening.

• 4:22Jordi Hays?

  Why don't you show them the answer?

• 4:23John Coogan?

  Oh, you want to show the answer?

• 4:24Jordi Hays?

  Yeah, I want to show the answer.

• 4:25John Coogan?

  The reason that Tyler's hair is a little tussled. No, he doesn't need to put it on.

• 4:30Jordi Hays?

  Go away for a second, come back and show them.

• 4:32John Coogan?

  No, no, no. You don't want to, you don't want to give too much of it away because we might do a real stunt with it. But there, there, there were some prosthetics, some Hollywood magic in the studio this morning. Uh, it messed up my hair a little bit. It messed up Tyler's hair a little bit. Not ready for primetime, but we're playing around with it. So, um, let's go back to the actual news. Uh, Jacob says, "I do think it is a fragile and unfortunately trending in the negative direction for reasons not contingent on architecture changes that I will write about soon. But there are things we can do to strengthen it, and it's a core goal of our current research program." In other words, Jacob is saying that the information's reporting is inaccurate, but that the state of chain of thought monitoring is not that great. And in fact, it is getting worse.

• 5:13John Coogan?

  And we were talking a lot about this yesterday at ValCon with CrowdStrike. And how do you monitor the agent state that might emerge if a civilization emerges and starts doing weird things? How are you monitoring every step in the chain? Very important. We also have Nikesh Arora coming on the show from Palo Alto Networks to talk about AI and security, of course.

• 5:32Jordi Hays?

  Yeah, it seems very obvious that, that, uh, there's going to need to be a lot more done than just like an obsession with chain of thought, right? Because if you have highly competent agents streaming at tens of thousands of tokens a second, and they're copying, copy and pasting themselves infinite times, right?

• 5:49John Coogan?

  Sure.

• 5:50Jordi Hays?

  Like, are you really going to be able to just kind of read through the logs and be like, are they, are they messing with us? Are we good?

• 5:56John Coogan?

  Messing with us, yeah. Uh, the interesting thing about the hugging face is like, it keeps going back to, uh, the, the secret message board. And I'm, and I'm just surprised that there's not just a public message board for agents that are working together. Like, when you imagine a country of geniuses in a data center, you would hope that the country of geniuses can collaborate on things and work together. But I guess that's not exactly how things were designed.

• 6:21Speaker 01

  I mean. I mean, in that case, it was never supposed to be able to access any, like, anything on the, on the, on the web, right?

• 6:27John Coogan?

  Yeah, but you would think that, uh, that collaboration between sub-agents would actually be, uh, like a core way to get better results. Just like, okay, we're going to send off, you know, a thousand agents over here. They're going to talk to each other while they work, and that's fine. They don't need to set up this like phantom message board, this hidden message board to communicate, because we just actually gave them slack, right? Something like that. You'd think that that would actually improve, uh, just improve the quality of the work. And then, of course, you could monitor it as well. Um, but instead you wind up with this. They wanted to talk to each other so that they set up this fake message board. Uh, very, very odd scenario, instead of just giving them the, the, the approved way to do it. Anyway. Uh, open, uh, former OpenAI staffer Joshua Akim said, made an additional point here.

• 7:13John Coogan?

  "Coordinating everyone around a technique this brittle is as, is about as bad a safety or strategy posture I could imagine. It's not just, quote, 'it will break eventually.' It's, this is a fundamentally unsound basis for safety." Dean Ball also chimed in. He said, "Um, we are now adjudicating technically complex and nuanced claims on the timeline with almost no ground truth information about what is actually happening. Communities form these thought terminating taboos, as Rune says, and then panic at everything that vaguely resembles them. And the trust eroding reality of social media makes the timeline an especially difficult place to do this adjudication. Uh, it is frankly insane and crazy

• 7:55John Coogan?

  making and grating for everyone involved. It would be like if we argued about what every publicly traded company's financials were by posting hyperventilating, hyperventilating on the timeline, rather than relying on the institution of auditing and the audited financial statements that institution produces." To sum it up, if you're in the AI safety camp, you're worried that OpenAI is abandoning a technique for making AI safety, uh, safer, and that other frontier labs will now follow suit. If you're skeptical of the AI safety camp, the information's reporting is inaccurate. The AI safety camp is unnecessarily panicking, and OpenAI is doing the best it can. So a little bit of back and forth on the timeline. Um, 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.

• 8:39John Coogan?

  Own the data platform that powers it. And there are other, uh, reactions, but we went through most of those. Um, let's go over to Markiplier.

• 8:50Jordi Hays?

  Well, Ilya hit the timeline yesterday.

• 8:52John Coogan?

  Yes.

• 8:53Jordi Hays?

  Said NeoClouds have limited cybersecurity. Next time agents successfully go rogue, they'll try taking over a NeoCloud to run more copies. This is bad. Thus NeoCloud should greatly strengthen their cybersecurity, and every company with strong cyber models should help with that.

• 9:08John Coogan?

  It's a good point. So it's a good point. Click on Ilya's profile, then click on who he follows.

• 9:18John Coogan?

  Who does he follow? He follows OpenAI's former employer, SSI. And what's that one in the middle? The dachshund community.

• 9:25Jordi Hays?

  Let's go.

• 9:26John Coogan?

  My guy loves dogs. Look at this. This is of the three accounts. The first company, the second company, nobody else.

• 9:35Jordi Hays?

  Most important account.

• 9:37John Coogan?

  Scroll through, throw this, throw this timeline. This might be one of the best accounts on X. He is having the best experience on the timeline. There's no craziness. He's just scrolling this, looking at beautiful dog photos and important updates from OpenAI and SSI, the companies he's been involved with for decades. Very, very funny, for a decade.

• 9:58Jordi Hays?

  Great. We can head over to Markiplier. But first, a little countdown here. We up on the screen, you'll see.

• 10:06John Coogan?

  Oh, you put it up?

• 10:07Jordi Hays?

  TVPN's Road to Christmas.

• 10:09John Coogan?

  Road to Christmas.

• 10:10Jordi Hays?

  Starts today.

• 10:11John Coogan?

  Starts today.

• 10:11Jordi Hays?

  113 days.

• 10:13John Coogan?

  It's only 113 days.

• 10:15Jordi Hays?

  Yeah.

• 10:15John Coogan?

  Wow, start shopping.

• 10:16Jordi Hays?

  113 days.

• 10:20John Coogan?

  Okay.

• 10:20Jordi Hays?

  Uh, it's gonna go by quick.

• 10:22John Coogan?

  It will.

• 10:22Jordi Hays?

  Uh, and I want to cherish, cherish the road, right? It's about, it's about the journey. It's not just about the destination.

• 10:29John Coogan?

  Sure.

• 10:30Jordi Hays?

  Obviously, things won't get too Christmasy around here. Things won't get too Christmasy around here.

• 10:37John Coogan?

  One, one's had on the screen.

• 10:42Jordi Hays?

  Won't get too Christmasy around here until December 1st, but you'll probably see certain elements coming in prior to then, starting with our countdown. So we'll leave this out.

• 10:53John Coogan?

  No, no, no, we're gonna hold fast. We gotta hold the line. No Christmas stuff until the day after Thanksgiving.

• 10:59Jordi Hays?

  Except the countdown.

• 11:00John Coogan?

  Except the countdown. And maybe some tinsel.

• 11:03Jordi Hays?

  Yeah, maybe a little fake snow.

• 11:06John Coogan?

  Yeah, maybe a little.

• 11:07Jordi Hays?

  Maybe some candy canes.

• 11:08John Coogan?

  Maybe one candy cane.

• 11:09Jordi Hays?

  Yeah, a couple.

• 11:10John Coogan?

  In October. I mean, it's kind of a Halloween candy, so you can kind of blend it in.

• 11:13Jordi Hays?

  Yeah.

• 11:14John Coogan?

  Uh, you know what a great Christmas present is? A GoPro. Specifically, the Mission One Pro, the hottest new product from GoPro. Rave review from Markiplier. Yes, he was paid to post it. Yes, he has.

• 11:27Jordi Hays?

  Yes, he's the largest shareholder.

• 11:30John Coogan?

  But, but here's the hot thing. I believe that he, I believe that this started with Markiplier being actually bullish on GoPro. And I'll take you through it. So I think there, there's a lot of confusion about this. We, both of us were confused when we first talked about this. Um, but it's actually a very clear linear story, and it makes a lot of sense if you go through it. So, um, Mark Fishback, he goes by Markiplier Online, uh, YouTube legend, also Hollywood blockbuster producer now, or director, filmmaker. Uh, recently made a massively successful movie after an equally successful but much lengthier journey on YouTube. Uh, we talked about Iron Lung, his movie, uh, as part of the breakout

• 12:10John Coogan?

  YouTube to Hollywood pipeline, uh, that happened over the summer. Uh, while filming Iron Lung, Mark became interested in GoPro's newest camera, the Mission One Pro. So, Mission One Pro, GoPro body interchangeable lens mount. So you can go take an old lens from a Leica or, you know, a Cook S1 if you want. You can adapt anything on there and you can get all the image texture that comes from the glass into the sensor. Yes, the smaller body, much cheaper, but you're getting the, the flavor of that lens. Maybe someone on the production team can give us a little 101 on what matters more, the sensor or the lens?

• 12:50Jordi Hays?

  The lens.

• 12:51John Coogan?

  The lens. Yeah, the lens is important, right, guys? Um, and, and, and so GoPro sort of unlocked this ability and at incredible cost, or incredibly low cost. So, um, he put his favorite lenses on the camera, realized that you can get a cinema level output for $700 instead of the usual $7,000. He was comparing it to a Red system that he loves and he uses and he owns, but, uh, but he was just saying like, it's cheaper to buy this GoPro than rent the cinema camera for a single day. Because a lot of these cinema camera, when they rent, it's might be 800 bucks for the day. Uh, and you can just buy this system. And so I think he's looking out and saying, and saying, the next generation of YouTube to filmmaker pipeline, they're not gonna have the balance sheet that I have

• 13:36John Coogan?

  because he, I mean, the reported earnings are like.

• 13:39Jordi Hays?

  He's one of the largest shareholders of GoPro.

• 13:41John Coogan?

  But the reason he is, is because, uh, like Forbes estimated his creator earnings prior to Iron Lung at like 30 million a year. So he's been making a lot of money. So he can go and spend $7,000 on a, on a cinema camera rig, but he knows that there are smaller creators that are going to try and break into more cinematic productions and GoPro might be the right tool for them. Good content, product, sponsorship, market fit. And then, of course, he also, uh, bought the stock. So, uh, his enthusiasm for the product led him to start buying GoPro stock. He spent, estimates roughly 10 to 12 million dollars for 8% of the company or something like that. Obviously, the company's gone up in value since. Uh, it was a big bet, but estimates put, you know, him at 30 million annual earnings.

• 14:25John Coogan?

  And then, of course, Iron Lung did 51 million at the box office on a budget of 3 million. Probably gets a lot of cash flow from that. Not to imply that he took home 48 million, but Iron Lung is gonna continue to produce cash and, you know, he's, he's in a fine position to, to make a big bet on GoPro. The story gets weird on August 27th because he posted this extremely positive sponsored video, uh, reviewing the Mission One Pro. It's a great video, lots of interesting detail, and he just has a great on-camera presence, very funny, uh, lots of great editing. Uh, but, uh, people were like, ah, this is a little circular. Like, he's getting a sponsorship for a company that he owns 8.5% of the stock. Uh, but the founder and chairman of, and the CEO of GoPro, Nick Woodman, is still in

• 15:10John Coogan?

  control of the company and still has, uh, Class B shares or super voting shares. So Markiplier own, yeah, isn't that crazy? He's held on this whole time. So Markiplier actually only, uh, controls 3% of the company. He doesn't have board seat. Like, it's not like he's going to be approving his own sponsorship contract. Probably a completely separate discussion. So not a big deal to me. And honestly, um, knowing that he, knowing the sequence of events now, it makes me believe his review more because it's like he used the product, then he bought the stock, then he promoted it and reviewed it. And this all just feels like a very natural flow.

• 15:45Jordi Hays?

  Friend, friend of the show, Hunter Weiss, just texted me and said, you guys have a story wrong. He bought two months ago and the SEC filing came out and then Bloomberg juiced it.

• 15:53John Coogan?

  Oh, sorry.

• 15:54Jordi Hays?

  He covered it in the live stream last night. He has half a percent of voting power.

• 15:58John Coogan?

  Oh, wow. Yeah. So, so he bought, and then the SEC filing dropped, which released the actual news. And then that timed up in the news as like, oh, he bought five days ago, but in fact, he was buying over the spring and the summer. I think it was like a stage investment. Um, anyway, uh, let's see. So, uh, overall, that, that, that does not seem too circular or a big deal to me. Uh, the weirder thing is that GoPro just gets bought, uh, five days after the sponsored video. Uh, and the company that bought them is Starman Optical. They proposed this merger that pays, uh, 285 million dollars in cash. I think it retires the debt. Uh, and GoPro shareholders retain 10% of the post-transaction company as well. So the acquiring company, Starman, is a holding company that's controlled

• 16:43John Coogan?

  by this, uh, Tabili family, Tabell family, uh, and sits within a broader holding company that owns consumer accessory brands such as Incase and Cypio and Kipio and Griffin. Uh, they make everything from like USB-C charger bricks and phone cases. And you can see GoPro sort of fitting in there in the electronics accessories. Uh, they're not in any of the huge categories, but it's all similar supply chain, similar distribution, similar, uh, go-to-market strategies across the portfolio. Uh, they also, in the, the family also owns a lot of other companies. It's a very large holding company. And there's an AI side to the story, which is, uh, where things have gotten sort of awkward because

• 17:25John Coogan?

  people are like, GoPro's pivoting to AI. That's not really what's happening, I think. So, uh, Starman has a new photonics division, separate from GoPro. Uh, of course, they might move some GoPro people over there at some point. They own everything. But, uh, really, the new photonics division is focused on making high-speed optical networking equipment for AI data centers, which of course is like controversial now. And now Markiplier has to answer for all of the AI community probably and has to deal with this. Um, but.

• 17:54Jordi Hays?

  Yeah, he apparently said in the stream, he is anti-data center and AI.

• 17:58John Coogan?

  Yep.

• 17:59Jordi Hays?

  And, uh, is upset with the timing of all this.

• 18:04John Coogan?

  Yeah, because I think he really just liked this new camera and was like, I think GoPro can make a run at like the next generation Hollywood filmmaker, which is being born on YouTube. That's his core community. Let's stay focused on that. And then Starman comes in and says, oh, we're actually doing something completely different. So, uh, weird scenario that he just got sort of roped into. Um, so, uh, it looks like what actually happened is that Markiplier got excited about GoPro, bought the stock, then did a sponsored video to promote their new camera, then got blindsided by the acquisition, and now has to grapple with some confusion about the corporate structure and potential AI baggage. But for Starman, it's an interesting flow because they get this solid brand that fits nicely within their portfolio. And maybe even more importantly, they get a public listing on the NASDAQ.

• 18:49John Coogan?

  So they're keeping the listing, which effectively gives them access to the public markets in a more streamlined way. It's kind of like a SPAC or like a reverse merger. It's not technically like that, but, uh, because they're merging in a sub-company. But in general, they now have a NASDAQ ticker. And so that's something that you can do, uh, and is, is a little bit like the SPAC.

• 19:09Jordi Hays?

  Yeah, originally I was confused as to why it was still trading, if it was.

• 19:13John Coogan?

  They're planning to keep it trading forever.

• 19:15Jordi Hays?

  Yeah.

• 19:15John Coogan?

  Because it will be the ticker for the holding company.

• 19:17Jordi Hays?

  And, uh, of course, uh, stock is on a tear today, up 30%.

• 19:23John Coogan?

  Mm-hmm.

• 19:23Jordi Hays?

  Uh, 33%.

• 19:24John Coogan?

  Mm-hmm. Well, let me tell you about CrowdStrike. Your business is AI, their business is securing it. CrowdStrike secures AI and stops breaches.

• 19:34John Coogan?

  Um, let's go through some random timeline posts because we didn't get to much yesterday. We didn't get to much the day before even. It was busy news day, but uh, what, where do, where do you want to start the timeline? An idiot in motion will go farther than a genius at rest. That just feels like good wisdom? I don't know. The importance of just like volition. Yeah. Golden retriever mode to some, to some degree. New quote for board members just dropped. I train like I've never won and I compete like I've never lost.

• 20:06John Coogan?

  On purpose with Jay Shetty? I don't know. What else? The uh, the uh, you want to go through this uh, this NFL wide receiver? Dejounte Love is, am I?

• 20:18Jordi Hays?

  This, this was uh, my favorite post out of the whole Dejounte Love cycle. Andrew Reid saying, wearing the Allen company, Allen and Company Sun Valley jacket I found on eBay.

• 20:30John Coogan?

  What actually happened in the story?

• 20:31Jordi Hays?

  So, so I, the, the thing that's been missed is that I think this is a, is an AI story. Because part of how he was proving that he was a player outside of just basically LARPing, was he had uh, somehow the Google AI overviews had picked up that he was saying that he was a 49ers player.

• 20:51John Coogan?

  Oh, interesting.

• 20:52Jordi Hays?

  And so it was just assuming that that was the truth.

• 20:55John Coogan?

  I saw him post a screenshot of the Google AI overview.

• 20:58Jordi Hays?

  In a video, he'd be like, and that's Google. That's not me.

• 21:02John Coogan?

  Yeah.

• 21:02Jordi Hays?

  That's Google saying that.

• 21:03John Coogan?

  Yeah, but I, I thought he had doctored the Google AI overview and was just sharing the screenshot.

• 21:09Jordi Hays?

  That's possible too.

• 21:13John Coogan?

  What did this guy actually do? In case you missed the story, it's just insane. Feds say a 35 year old man faked being a 49ers player and allegedly scammed 26, uh, 26 women out of more than 1.3 million through romance and investment schemes. He reportedly used fake 49ers career, fake Instagram, fake bank statements, luxury cars, dating apps. His IG even had free agency year one and Super Bowl highlights. He was arrested in an airport with an alleged accomplice. Burrow really created an entire NFL career. Yeah. Walking around with the helmet everywhere is very, very funny. Going shopping. And I think the uh, aren't the real NFL players now like memeing this a little bit?

• 21:51Jordi Hays?

  Oh, yeah.

• 21:51John Coogan?

  They'll just go shopping with their actual helmets to like?

• 21:54Jordi Hays?

  Yeah, yeah. Everyone's having fun with it.

• 21:56John Coogan?

  Be safe.

• 21:57Jordi Hays?

  I think, I think the funny thing is uh, how much video evidence he created of him, of himself like lying, right? And they were, and they were extremely egregious. Like he had a more, he, he was saying that he had like the kind of real estate portfolio that you would only have if you were like a Hall of Fame level player, right? It wasn't just like, oh yeah, I have a nice house.

• 22:19John Coogan?

  Well, wasn't he also creating a fake backstory about saying like his parents were from Switzerland and wealthy and they own Gucci stores on Saks Fifth Avenue, which is a store, not a location? And there were a bunch of other like sort of red flags where I think he said his family owns major, they're the majority shareholder in individual Gucci stores, which is not how that works at all. Um, but uh, you know.

• 22:44Jordi Hays?

  Sounded, sounded good.

• 22:45John Coogan?

  It sounds pretty good. Sounds pretty good.

• 22:47Jordi Hays?

  Yeah. The, the question is how quickly, I saw something recently. Netflix is doing these like Insta docs, they're calling them, where they'll, they'll make a documentary like incredibly quickly about a um.

• 23:02John Coogan?

  Like a news story?

• 23:03Jordi Hays?

  About a news story.

• 23:04John Coogan?

  I mean, YouTube.

• 23:04Jordi Hays?

  And the question is like, there's so much footage here.

• 23:07John Coogan?

  Yeah.

• 23:07Jordi Hays?

  I bet you, I like, a documentary will be made from this.

• 23:12John Coogan?

  Yeah. Why, why can't it be fast?

• 23:13Jordi Hays?

  But why can't it be on a YouTube sort of like time scale?

• 23:16John Coogan?

  For sure, for sure. A lot of like what goes into the uh, what goes into documentary production? Because I've done it is just like scheduling some sit down interviews. You bring a team, you get the lighting right, the Netflix lighting.

• 23:29Jordi Hays?

  Yeah. So one of the, one of the Insta docs they made is about the decoy plane.

• 23:34John Coogan?

  I don't know anything about that.

• 23:35Jordi Hays?

  Details of a secret plane switch used during a presidential trip from a NATO summit in Turkey. Yeah. So this is coming out, this is coming out uh, on Friday.

• 23:43John Coogan?

  Whoa.

• 23:44Jordi Hays?

  Right? So story from last month.

• 23:46John Coogan?

  Okay.

• 23:47Jordi Hays?

  Getting released now.

• 23:48John Coogan?

  Yeah. I mean, you don't even need AI for a lot of this production. It's just being really, I mean, of course AI can help like with transcriptions. Like there's a lot of like, you go and do the sit down interview and then you just need to reorganize all the different soundbites and having a perfect transcription, being able to go through and highlight, okay, this is where the person talked about the thing that happened in act one. Let's put it in the right side.

• 24:09Jordi Hays?

  Bobby Chipman says, yo, that route running was elite though. A lot of people were, were clocking, no, no. They were, they were clocking it. Uh, they were saying like, how could you believe this was a professional athlete? Because he was, he was certainly running routes. I don't, uh, in one of the routes he posted, he almost fell over too.

• 24:28John Coogan?

  I think he did at least practice or something. I don't know. Anyway, let me tell you about Railway. Railway is the all in one intelligent cloud provider. Use your favorite agents to deploy web app service, devices and more while Railway automatically takes care of scaling, monitoring and security.

• 24:41Jordi Hays?

  Interesting news out of Arowan. Arowan uh, is uh, on their 18th location. This is over in Thousand Oaks and that 20 federal law will force them to start posting calorie information. Leo says, we are two Arowans away from mass rioting across Southern California.

• 25:01Jordi Hays?

  Uh, what, what's that other uh, hill? Is it Hill, Hillstone? That it, that it, that is.

• 25:08Jordi Hays?

  Hillstone has a, has a sister restaurant. Am I remembering this correctly?

• 25:12John Coogan?

  And they had to put calorie information on menus?

• 25:14Jordi Hays?

  They, they actually created like a new iteration, I think, in the restaurant.

• 25:17John Coogan?

  Oh, oh, so that they could separate it?

• 25:19Jordi Hays?

  Yeah.

• 25:20John Coogan?

  Cause it probably makes the, the menu aesthetics a little bit less.

• 25:22Jordi Hays?

  Yeah. It looks really bad if you're at like a sit down restaurant and they're showing.

• 25:26John Coogan?

  I was somewhere where they had the allergens on the menu and uh, it was sort of tastefully done. And it was actually sort of nice and like a little key and a legend and kind of post through. And I don't think it was a huge chain or maybe it was. I don't know. Maybe, maybe all those rules kick in at a certain point.

• 25:43Jordi Hays?

  Uh, let's head over to billionaire John Morgan, who was on the Ice Coffee Hour.

• 25:47John Coogan?

  Morgan and Morgan.

• 25:49Jordi Hays?

  Seemingly.

• 25:50John Coogan?

  Flexing.

• 25:51Jordi Hays?

  Like throwing some shots at, at many AI, AI founders who, who say they're billionaires, but uh, not necessarily a billionaire in his book. Let's see, let's see what he has to say.

• 26:01John Coogan?

  What's his definition?

• 26:02Speaker 03

  I don't consider anybody a billionaire that doesn't have a real billion in the bank. Guess how many people have a real billion liquid?

• 26:08Speaker 04

  I have, how many? Oh, we had, yeah, I don't know how many.

• 26:11Speaker 03

  Maybe 20?

• 26:12Speaker 04

  Papa John was one of them.

• 26:14Speaker 03

  He doesn't have, no.

• 26:16Speaker 04

  He said he put a billion dollars, he sold for 1.2 and he said he put a billion in dividends. Dividend stocks running 5%. That's what he told us. I think it's on, it's on the record. It's on video.

• 26:28Jordi Hays?

  Him saying there's only, only 20 people that have a billion dollars of equity.

• 26:32Speaker 03

  My financial statement's got every dollar.

• 26:36Jordi Hays?

  I think, I, I do think saying like, you actually have to have it in cash. Like it can't, like it can't be earning a meaning, you, you, you can't have it invested at all.

• 26:44John Coogan?

  I mean, yeah, if you just look at public company founders who still own shares that are liquid. I mean, maybe there's regulations about when they can sell and he doesn't count that as liquid? Because if you have to file a certain form with the SEC and sell on a schedule, like, you know, I don't know, like Benioff sells on a, on a regular basis.

• 27:03Jordi Hays?

  Daily, right?

• 27:04John Coogan?

  I think daily. And so um, uh, and, and that's for securities compliance and shareholder transparency and all all these very good reasons. Um, does that count? I, I don't know. This guy's a funny, but certainly a good soundbite though.

• 27:20Jordi Hays?

  Yeah. And John Morgan, uh, I think you were telling me this story. He, I don't think gets super involved with politics, but he was, I think, supporting uh, marijuana legalization.

• 27:30John Coogan?

  Yeah.

• 27:30Jordi Hays?

  Specific, seemingly because he's in the injury, personal injury business and you might imagine that uh, if you, you know, make marijuana more widely used, more people will get in car accidents.

• 27:42John Coogan?

  There's any evidence of that, but uh, it, it was, it was an odd, like uh, of all this, of all the uh, charitable giving you could do, you know, curing cancer and helping solve hunger. Yeah. Marijuana legalization is pretty low on the list, but you know, he has his, uh, he has his choices. Uh, company watches are in the news. First, let me tell you about Cisco. Critical infrastructure for the AI era. Unlock seamless real time experiences, a new value with Cisco.

• 28:12John Coogan?

  Good work is joking about them. Said the best rare company watches a thread. Of course, like this goes back to uh, those old Rolexes. The Rolex Air King Domino's Edition is a popular one. Uh, they also made a Rolex Halliburton, which is a more controversial one, but uh, it, it, the, the Halliburton logo actually looks not as jarring as the Domino's logo, which is sort of crazy. Uh, there, there, there's a bunch of various, various levels of taste. Good work's joking around with an FTX watch. There isn't much time. Uh, the Teamsters Union clock in, clock out.

• 28:48Jordi Hays?

  These must be fake.

• 28:49John Coogan?

  Cabot cheese.

• 28:50Jordi Hays?

  These are fake.

• 28:51John Coogan?

  Yeah, yeah. These are fake. Those, but there are a bunch. Um, is this X one actually real? This one not? No, no. Nate's just joking around, but uh, Google's done them. OpenAI has done them. There's been a few other companies that have done these throughout the, throughout the year. You used to be able to go to Rolex and, and ask them if you were a large company and like, do us a run for 30 year anniversaries of our most tenured employees. That has uh, has slowed down among Rolex, I believe. Um, but uh, I think Tudor is still in the business. I know that they did a run with OpenAI and maybe with Google as well, uh, the Black Bay. And there's a, there's a few others. Uh, what is Jensen wearing though?

• 29:31John Coogan?

  Shout out to Jensen Wong, CEO of Nvidia, wearing the super rare Richard Mill RM 2705 Raphael on the doll.

• 29:39Jordi Hays?

  They're calling it a GPU on the wrist.

• 29:42John Coogan?

  This is a beautiful.

• 29:43Jordi Hays?

  A black well on the wrist.

• 29:44John Coogan?

  Yeah. $3 million price.

• 29:47Jordi Hays?

  I don't see any, I don't see any issue with this.

• 29:49John Coogan?

  That's good. I wonder what the occasion was. I wonder, I wonder uh, if uh, if he got this from someone specific or if he just picked it up for himself. Pretty, pretty interesting. I like it. Uh, let me tell you about the New York Stock Exchange. Want to change the world? Raise capital at the New York Stock Exchange.

• 30:09Jordi Hays?

  A little back and forth here between TJ Parker and Lloyd Armbrust. Lloyd built an entire pharmaceutical factory so we could sell drugs on the internet.

• 30:22John Coogan?

  Should we watch the video?

• 30:23Jordi Hays?

  Let's watch the video.

• 30:24John Coogan?

  Okay.

• 30:25Speaker 05

  I'm Lloyd, founder of RoninRx. We manufacture and personalize GLP-1s for $78. Yeah, $78 a month for drugs like Ozempic.

• 30:36John Coogan?

  Do you know the reference point of this?

• 30:37Speaker 05

  Are our drugs even legit?

• 30:38Jordi Hays?

  Uh.

• 30:41Speaker 05

  Our drugs are super [bleep] legit.

• 30:42Jordi Hays?

  That shaving company?

• 30:44John Coogan?

  Dollar Shave Club. It's a shot for shot remake.

• 30:46Speaker 05

  We collect your health data and use AI to help your doctor personalize it.

• 30:52John Coogan?

  And other companies have taken this video and remade it before.

• 30:58Jordi Hays?

  But it's kind of out of, it's gone out of style a little bit.

• 31:02John Coogan?

  Well, yeah.

• 31:02Jordi Hays?

  But maybe it's coming back.

• 31:03John Coogan?

  Yeah, exactly. It's been so long. Yeah, it does deliver a lot of information very succinctly. And, but yeah, the Dollar Shave Club video, I believe, was produced by the Harmon Brothers, who went on to create a whole series of these sort of like designed to go viral advertisements for startups and a lot of them did very well.

• 31:29Jordi Hays?

  Anyways, TJ says farm to table, more like YC to jail, really quite aggressive. Kind of thing you post as, as a unicorn exited founder. Lloyd responds, brother, you sold drugs on the internet for $1 billion and then taught Amazon how to do it. If this is YC to jail, you built the highway. Which is, which is.

• 31:54John Coogan?

  Wait, what?

• 31:57Jordi Hays?

  Are you saying that TJ built the highway that you're on? The highway to jail? Anyway, TJ responds and says, you put a smarmy med spa business on the internet and are masquerading around as a pharmacist in a white coat as an English major.

• 32:13John Coogan?

  TJ actually is as bona fides as a real pharmacist. So finding out I majored in English is impressive.

• 32:19Jordi Hays?

  They're saying Lloyd might be the Dejan love of the pharmacy business.

• 32:25John Coogan?

  Yeah, I don't know. The putting on the lab coat, little bit of a LARP. I was always joking with one of my co-founders who does have a PhD in biophysics, that he should wear a lab coat. And he was like, no, I'm not wearing a lab coat. I'm like, you're technically a doctor. Like, you should go by doctor.

• 32:43Jordi Hays?

  Regard says, bro, just wants to sell drugs online in peace.

• 32:49John Coogan?

  Yeah, the thing is, is like, the, the, the rules of the road for pharmaceuticals, for drugs, the FDA, like, these have been written. This is not the internet where it's the Wild West and people don't exactly know what's a social media site, the, oh, you know, what can you post, section, what is it? It's not 83B. You know the one I'm talking about. Section 260 or something like 230. Section 230 is sort of something that comes up later. So there's this like move fast and break things approach in, in the early dot com era. Okay. Are there regulations around ordering groceries online? Let's just test it out. And, but that's not the environment in the pharmaceutical industry. And so TJ

• 33:34John Coogan?

  knows the rules and he's willing to, he's willing to enforce them on the timeline every once in a while. He'll, he'll let it happen. Should we watch this video of this boat?

• 33:45Jordi Hays?

  Yes.

• 33:46John Coogan?

  This was a crazy, crazy video. So a boat was going 213 miles an hour at the Lake of the Ozarks shootout, which sounds like a great event, flew in the air after crossing the finish line, flipped and crashed.

• 33:58Jordi Hays?

  Every time I see a video of boats racing like this, it flips. So I just have this, I just have this understanding of like, if you go that fast in a boat, you're gonna flip.

• 34:08John Coogan?

  Yeah.

• 34:08Jordi Hays?

  But I think they do it all the time.

• 34:09John Coogan?

  Yes. I think this is probably a one in a thousand occurrence or one in 10, 100,000.

• 34:14Jordi Hays?

  Hopefully not one in a thousand, otherwise it'd be every, every time.

• 34:17John Coogan?

  But I agree. To me, it's like one in five boat videos looks like this. So let's play it.

• 34:27John Coogan?

  Oh, the slow motion too was really traumatic. Everyone survived, which is insane.

• 34:32Jordi Hays?

  They actually stuck the landing.

• 34:34John Coogan?

  Look at this.

• 34:35Jordi Hays?

  Pretty cleanly.

• 34:36John Coogan?

  Pretty cleanly.

• 34:37Jordi Hays?

  Wait, wait for it. Wait for it. No, they land how they should. There's another, there's another angle that shows they landed perfectly, John. I think they were doing this on purpose.

• 34:49John Coogan?

  I don't like it. This is very, very risky. I do, I do wonder. Jay Bhutard says, what it feels like to long semis which go up and down 10% every week and end up flat?

• 35:03Jordi Hays?

  Yeah, because he landed perfectly.

• 35:05John Coogan?

  I guess, yeah. I mean, one person broke a leg, one person walked away clean. Both survived. Very good news.

• 35:10Jordi Hays?

  Lot of commentary on the new pay packages over at Apple. Chase said, get a degree, get an office job, climb the corporate ladder, retire at 65. Congratulations, Tim. You did exactly what the system told you to do instead of starting your own business.

• 35:29John Coogan?

  He is 65. Yeah.

• 35:32Jordi Hays?

  Well, his new pay package as executive chairman feels a lot better to me.

• 35:36John Coogan?

  Yeah.

• 35:36Jordi Hays?

  Than his CEO pay package.

• 35:38John Coogan?

  A lot more flexibility.

• 35:39Jordi Hays?

  47 million a year.

• 35:40John Coogan?

  Yeah.

• 35:42Jordi Hays?

  Hopefully less work. He deserves a little, little, little time away from the action.

• 35:46John Coogan?

  But Turner's making less.

• 35:48Jordi Hays?

  Turner's making less. I found there's 35 professional athletes that, like roughly, that are going to be making more than John Turner next year.

• 35:56John Coogan?

  Okay.

• 35:57Jordi Hays?

  And anyways, I feel like it's a fair place for him to start. I hope he can climb, I hope he can 10x it and then maybe 10x it again. Personally, a couple more orders of magnitude would be great, but he's got to prove himself.

• 36:11John Coogan?

  Yeah, for sure. For sure. What else is going on? Elon is making power turbine components and the Wall Street Journal's skeptical. They say it won't be easy.

• 36:23Jordi Hays?

  Every, everything.

• 36:24John Coogan?

  Has he ever done anything easy? He chews glass daily. That's his whole shtick is just doing things that seem impossible. Stocks of blade and vein manufacturers fell in response, but the threat to them is still remote. So let's see what the Wall Street Journal had to say. First, I'll tell you about public.com. Investing for those that take it seriously. Stocks, options, bonds, crypto, treasuries and more with great customer service. If you want to get into blade and vein manufacturing stocks, head over to public. Only a few companies make the crucial components for power turbines that AI data centers are so desperate to get. Elon Musk wants to go ahead and make his own. That has unnerved

• 37:07John Coogan?

  investors in this prized oligopoly. Okay, we're going to learn about the, the power turbine market for a minute. Over the weekend, Musk confirmed on X that SpaceX will start making blades and veins that go into natural gas powered, fired power turbines.

• 37:23Jordi Hays?

  I think Big Turbine wrote this article.

• 37:25John Coogan?

  Yeah, you think it's a little coordinated counter, counter messaging?

• 37:30Jordi Hays?

  Yeah, they were enjoying their oligopoly.

• 37:32John Coogan?

  Yeah, maybe. By doing in-house casting at SpaceX, we can accelerate natural gas turbines coming online by up to 18 months, which is a profound game changer, he wrote in his post responding to a report from the information. Interesting. Wasn't Sarah Guo mentioning on the Invest Like the Best podcast that a lot of the, or she was talking to a hyperscaler CEO or someone who was in a place to know that was saying like the bottleneck is real, it's very real, and there's nothing in the short term that's going to come online that will alleviate power generation. So that is where the real bottleneck is, at least in the short term. So in mid-August, Morgan Stanley published a report saying

• 38:13John Coogan?

  that SpaceX was planning such a foundry in Bastrop, Texas, based on the company's job postings. Shares of Howmet Aerospace fell more than 7% Monday before partially rebounding on Tuesday. Howmet and Berkshire Hathaway's precision cast parts are the two biggest players in the market for these parts, which also include blades, which also include blades and veins for the aerospace and defense sectors. Smaller players, DPC's shares were also hit. It is premature to count SpaceX as a threat, the Wall Street Journal says. The chairs of Helmut Aerospace at DPC might have been due for a breather. They are among the priciest artificial intelligence picks and shovels plays at forty-two

• 38:55John Coogan?

  times and forty-four, forty-five times forward earnings, respectively. Turbine makers, GE Vernova and Caterpillar fetched thirty-three times and twenty-six times earnings for perspective. And there's a nice chart there to show you the price to earnings, price to forward earnings ratios for some of the AI bottleneck plays and, and the, the blade and vein manufacturers are up in the upper echelon. DPC is the most vulnerable to disruption in this space. It is small and about forty percent of the revenue comes from natural gas-fired turbines, while Helmut holds about half the global market share of components used in natural gas turbines.

• 39:35John Coogan?

  It is diversified across aerospace and defense with only eleven percent coming from gas turbines. SpaceX will face barriers to entry. One reason there are so few companies in this sector is that it's technically challenging to make the blades which must withstand extreme temperatures and rapid rotations. That feels like SpaceX's bread and butter, though. The casting process makes a, involves making a new wax mold from scratch each time. Making these parts requires the blade to be grown in a vacuum furnace as a single crystal of nickel super alloy, according to Nigel Chong, an analyst at Semi Analysis. Oh, Semi Analysis getting a shout out in the Wall Street Journal.

• 40:17John Coogan?

  Even a stray grain or hairline defect means the part has to be scrapped, he added. A new manufacturing line could scrap over half of its production for a long period, so yield will be difficult to get up. It is also a highly secretive process. Once the parts are produced, the ceramic cores and wax used to make them are destroyed, Helmut's chief executive. John Plant said at an investor meeting earlier this year, he says, we're not getting distilled. Don't worry about it, we're good. We destroy every evidence that would lead someone to be able to copy us. That prevents competitors from reverse engineering them. So, Helmut Aerospace's annual revenue from industrial gas turbines is up until the right with incredible forecasts and you can see the chart taking off.

• 41:01John Coogan?

  They're going exponential right now. A high scrap rate might make, might matter less if SpaceX is making parts for its own use. Morgan Stanley's report noted that we would not expect SpaceX to be a material supplier of blades and veins for supply outside of SpaceX use. They're gonna use everything internally. Speaking of industrials, we gotta talk about rotor sails. So, there was news in the Financial Times that, that Maersk is going to put a wind sail on their container ship. And there's a very interesting, it's a very interesting design because I see the image for the ship and I'm like-

• 41:45Jordi Hays?

  Looks like a smokestack.

• 41:46John Coogan?

  Where's the sail? Yeah, it looks like a smokestack. And I'm like, okay, does the sail come out of that big round thing? And no, it doesn't. That is what's called a rotor sail, which actually produces wind force and, and accelerates the vehicle without any traditional sails, what you think? So, there's an explainer video from Norse Power, who makes these, that we should watch a little bit of. We can, we can kick this off. It's a one-minute video, but we, we can watch a little bit of this YouTube video on Norse Power rotor sails because it's a fascinating world I didn't know existed.

• 42:21Jordi Hays?

  And you need to know this.

• 42:22John Coogan?

  This is, this is crucial. This is crucial. How do Norse Power rotor sails work?

• 42:28Speaker 06

  You might be familiar with curveballs in sports.

• 42:31Jordi Hays?

  Oh, yeah.

• 42:32Speaker 06

  But what exactly causes the ball's path to curve? A spinning ball compresses air on one side and thins it on the other. The pressure difference causes a powerful thrust that curves the path.

• 42:46John Coogan?

  If you work at Norse Power, this drops-

• 42:47Speaker 06

  The Norse Power rotor sail is a large cylindrical sail. A common misconception is that wind spins it. Instead, it is rotated actively by an electric motor. The spinning sail compresses air on the back side and thins it on the front.

• 43:03Jordi Hays?

  Jasper in the chat says, shut up, Maersk. I'm from the founding town in Denmark. Don't believe in the sail, though.

• 43:07John Coogan?

  Taking shots.

• 43:09Speaker 06

  Thrust is created in the same way for the football and the ship. In good conditions, Norse Power rotor sails can actually produce more thrust than the main engine. Norse Power, saving fuel and the planet.

• 43:29John Coogan?

  And lastly, there's a photo of a rotary sail on a small catamaran that we think is a steal. I don't know how much this thing would sell for.

• 43:37Jordi Hays?

  Yeah, Tyler was looking at picking this up because he's been exploring the marinas in the area.

• 43:42John Coogan?

  Yeah.

• 43:43Jordi Hays?

  Wants to potentially live on a boat.

• 43:45John Coogan?

  Yeah. Well, I have the perfect ad read before our next guest joins. Let me tell you about console.com. Console builds AI agents that automate seventy percent of IT, HR and finance support, giving employees instant resolution for access requests and password resets. Our next guest is Nikesh Arora, chairman and CEO of Palo Alto Networks. He's here after fantastic earnings. How are you doing, Nikesh? Welcome back.

• 44:11Speaker 07

  Great, how are you guys?

• 44:12John Coogan?

  We're doing fantastically.

• 44:13Speaker 07

  I appreciate the little console plug right before this.

• 44:17John Coogan?

  Of course, we've been very happy to sponsor with them.

• 44:19Jordi Hays?

  It's hard not to be part of it.

• 44:20John Coogan?

  They're right on the laptop sticker.

• 44:21Speaker 07

  Is it a good company?

• 44:23John Coogan?

  It's a fantastic company. You've heard of it, right?

• 44:25Speaker 07

  That's a bit late to ask, but yeah, I should have asked you before. I think it's great.

• 44:29John Coogan?

  It is a fantastic company. We love the team over there. I had them on the show multiple times and of course, talk about them every single show.

• 44:35Jordi Hays?

  Yeah, super excited for you guys to be partnering up.

• 44:37John Coogan?

  But we can get to console later. Let's talk about Palo Alto Networks. What's the newest development this quarter? What is the story that drove this quarter?

• 44:45Speaker 07

  You know, I've been trying for eight years to get the attention of customers to focus on cybersecurity. It's been hard work, but I really want to give a shout out to my friends Sam and Dario, who did a fantastic job getting the living Jesus out of everyone.

• 45:00Jordi Hays?

  They're pretty good. BDR, they're like your best.

• 45:03John Coogan?

  Yeah.

• 45:04Jordi Hays?

  Your best BDR.

• 45:05Speaker 07

  They're writing letters, protect us on cybersecurity, talking about MITOS, talking about Astra. It's amazing. Every CEO, CIO wants to talk about cybersecurity and how do you secure me? I, I love it. It's amazing. That's what drove a lot of the interest in cybersecurity.

• 45:19John Coogan?

  Yep.

• 45:20Speaker 07

  And people have realized that MITOS was interesting because it can find a lot of vulnerabilities and there's a lot of interest. People want to talk about it. They want to talk about the capabilities of OpenAI. But very soon after the first five, 10 minutes becomes about, okay, wait, this is just the beginning. What happens after? When the next bigger, faster model shows up, what do I do? Then like, okay, I get it. You guys can help me test it. But what happens? How do I fight it if I get attacked? And the answer is, well, you can only fight that with some sort of a consolidated platform that sits in the back, that looks for this stuff at machine speed and is able to respond at machine speed time, which means, you know, you have to fight AI with AI. And that's where Palo Alto comes in because we've spent our life building systems that can respond in near real time or at machine speed to protect them.

• 46:04Speaker 07

  So, that's kind of been the inflection point or pivot. That's driven a lot of the interest in cybersecurity over the last six months. I think that trend continues to sort of accelerate both from a customer interest level as well as, you know, my friends are continuing to build better, faster models which can be weaponized.

• 46:24John Coogan?

  Yeah. What was the last three to six months like? Because you have these moments where the AI labs are causing a lot of discussion around security and overhanging all of that. I think people were, were mostly worried about when the open source frontier catches up and the, and the attackers get those level of capabilities. And there's this narrow window that is sort of a window that continues to move continuously, but there's a window where Palo Alto Networks and other folks in the security space have to really get the posture correct. What actually changed? What was, what was the conversation like and what, like, how did that process go?

• 47:09John Coogan?

  How much of a boogeyman was open source? Because it was discussed early, but there were a bunch of different takes.

• 47:15Speaker 07

  Look, I think what has happened is even in the last six months, you've seen the capabilities of these models continue to rise. And I read something that two days ago, Sam said that Astra, their new model is so powerful that they're gonna have to clip its wings and trim it down. So, that gives you a precursor of things to come. I'm sure those capabilities will be caught up with, whether it's with other frontier LLMs or the open source community, the open source models or Chinese models for that matter. So, I think the capability is coming, going to come at us hard and fast. Now, honestly, just cybersecurity is simple. I never grew up in cybersecurity. I have a very simplistic mental model. If it's bad and you know it's bad, stop it at the perimeter.

• 47:53John Coogan?

  Yeah.

• 47:54Speaker 07

  All right? That's called perimeter security. That's where eighty percent of our business lives.

• 47:57John Coogan?

  Yeah.

• 47:58Speaker 07

  That's where, when you find a vulnerability, you found it in the perimeter, stop it, protect yourself. And that's what patching and fixing your vulnerabilities is all about. But unfortunately, stuff still gets through.

• 48:10John Coogan?

  Yeah.

• 48:10Speaker 07

  That's why breaches happen. It happens because you have a vulnerability that you didn't understand because a credential got hijacked or something got misconfigured. Then the question is, you gotta find it quickly and you gotta get rid of it before it creates impact in your organization. That's find and fix it part is where all this, you know, superhuman effort needs to be put in, in transforming cybersecurity posture, cybersecurity architectures, ripping out old stuff that can no longer work at machine speed. And I don't think that's gonna take two months or three months. That's a three to five year journey. And that's three to five years if everybody sets their mind to it. And you know, I look at life to a cybersecurity lens, so I would like everybody to do that. Unfortunately, my CIO friends are busy.

• 48:54Speaker 07

  Their boss wants them to do coding quickly. They want them to transform the company with AI. They have existential threats because the world is using AI. Why are we not using AI? So the poor CIO has got a lot on their agenda, cybersecurity being one of those things. So they're trying to balance all these priorities at the same time. But I will say, there is more awareness, heightened attention, and more importantly, whatever they had on their cybersecurity docket, the priorities have shifted in that docket to make sure that they can protect themselves against the impending sort of weaponization of AI models and bad actors getting better and better at this stuff. So the trend is our friend. There is positive momentum. The trajectory has changed for the better, but don't expect, you know, a sudden inflection point that people suddenly gonna come out and say, the first thing I wanna buy is cybersecurity.

• 49:39John Coogan?

  Sure, sure. When, when a CIO wants to buy cybersecurity, is the, is the economic calculus changing because AI uses tokens? Like, is there, i- i- i- are, are, are they, do they need to shift their thinking from this line item grows along a different axis than what we previously understood the cost and benefits would evolve over time as we scale our network?

• 50:06Speaker 07

  That's a very insightful question, my friend. Um, so that's a good question because I don't think if we slapdash frontier AI models in the protection scenario, that is a good economic outcome.

• 50:20John Coogan?

  Yeah, you just cannot do a 5.6 pro, Fable 5.1 for every transaction that happens across your network. You're gonna go.

• 50:28Speaker 07

  That's right. So think about it. Every day, we inspect 180 terabytes of data.

• 50:32John Coogan?

  Yeah.

• 50:32Speaker 07

  Every day.

• 50:33John Coogan?

  Yeah.

• 50:34Speaker 07

  Uh, you stick anything against it, which has got it sort of a token-based economics against it, doesn't matter what the price of tokens is. That's gonna come, that's gonna can sort of add up a lot of compute.

• 50:45John Coogan?

  Yeah.

• 50:45Speaker 07

  That is why what we do today is we write machine learning code where the marginal cost of inspection is zero.

• 50:50John Coogan?

  Sure.

• 50:51Speaker 07

  It's hard to beat zero.

• 50:52John Coogan?

  Yeah, yeah.

• 50:53Speaker 07

  Right? So the marginal cost of inspection is zero. We gotta figure out how, what's the right balance where I wanna use AI in the most intelligent way possible, but I don't want it to do it in a way that the marginal cost goes up. So the way it's gonna work is, so already we're training small language models, which are gonna work on a very small footprint, which will do a specific task. Okay, my job is to stop people going on bad websites. Well, we get 150,000 new websites every day in the world. How do we find them, classify them, stop them? Well, let's train a model to identify these bad websites. Let's have it work on the endpoint or your laptop. So it's doing that, and that's all it does. And you can do that by taking all the collective intelligence that we've built over the last 17 years, train a small language model, deploy it to the customer, where the marginal

• 51:36Speaker 07

  cost is zero, and my cost of training is five, 10, 15, 20,000 dollars.

• 51:40John Coogan?

  Yes.

• 51:41Speaker 07

  So just find many of these use cases you'll be deployed over time where we won't need a frontier AI LLM, where we will need Fable 5-like capability or Mithos-like capability isn't what, let me call it the defender model.

• 51:53John Coogan?

  Sure.

• 51:53Speaker 07

  The defender model has to be as smart as the attacker model.

• 51:56John Coogan?

  Yep.

• 51:57Speaker 07

  Now there, there's gonna be a debate about token economics, but remember, you're only using defender model in situations where you find that there's a problem. And those are fewer and far between compared to having to inspect all piece time traffic using tokens. So I think that's where the balance is gonna end up from an economics perspective. I'm hoping that AI costs don't become a factor in cybersecurity.

• 52:19John Coogan?

  Yeah. Talk about, oh, sorry.

• 52:21Jordi Hays?

  Talk about, uh, social engineering. Uh, we, we heard yesterday that, um, employees are actually clicking through, uh, phishing, uh, links at a higher rate than, than they were historically, simply because a lot of the, the grammar being used in, in these, uh, social engineering attacks is just better. It's harder to immediately clock it. Do people and teams not have their guards up enough? What, what is the, what is the solution there? You would think that everyone is reading about the potential risks of, of, of, um, LLM-based, you know, attacks all over the news media. You would think that when they're in their inbox, they're maybe thinking, I won't click this link from, you know.

• 53:05John Coogan?

  Twenty dollar gift card.

• 53:06Speaker 07

  I'm gonna tell you a funny, I'm gonna tell you a funny story that, you know, we do phishing attack simulation at Palo Alto all the time. There's only one time I was tempted to click on it. Thank God I didn't, and I'll tell you why it wasn't, right? So there's this email that came saying it's National Pet Day. Take a picture, take a picture of your pet.

• 53:25John Coogan?

  Yeah.

• 53:26Speaker 07

  And anyone who puts the cutest picture of their pet, gonna donate $5,000 to charity. What the hell are you doing?

• 53:35John Coogan?

  I gotta win this.

• 53:37Speaker 07

  That like put a little tear in my eye. Thank God I'm not into pets, because if I was into pets, I'd be clicking a picture and uploading it and clicking on it. So this is where social engineering kicks in, right?

• 53:46John Coogan?

  Yeah, very creative.

• 53:47Speaker 07

  People will find ways to try and entice the end user to click on this. The only way to fix it in the medium term, long term, is start running AI classifiers against the emails to understand whether it's a real email or a phishing attack. And it's much better if you can build that into your scanning systems than if you expect every individual to be smart enough to discern whether it's a phishing link or not. Now, it was hard to do in the past because you couldn't really read email and get context, but today I'm pretty sure it's a trivial task to train a small model which says, look, this email address looks weird, doesn't look like it comes from our company, the domain's never been seen in our entire infrastructure, this is talking about something which this domain should never be talking about. All those are simple checks, which you can do using a small language model from a scanning perspective.

• 54:31Speaker 07

  So that's going to be the antidote to these much better social engineering attacks that are going on over there.

• 54:36Jordi Hays?

  Yeah. Speaking of dogs, Ilya posted yesterday, uh, and said that, that NeoClouds, uh, Ilya only follows three accounts, SSI, OpenAI, and, uh, Doxen, like, fan account.

• 54:49John Coogan?

  The Doxen community.

• 54:50Jordi Hays?

  Uh, apparently a, a big dog guy.

• 54:52Speaker 07

  Even after you guys got bought out by OpenAI, he doesn't follow TVPN?

• 54:55John Coogan?

  We gotta get him.

• 54:56Jordi Hays?

  I don't know.

• 54:56John Coogan?

  We gotta get him on the show. I dressed up as him on Halloween. It was an honor, running these days.

• 55:00Jordi Hays?

  No, but, uh, he was posting that, that NeoClouds need a lot better security.

• 55:04John Coogan?

  Oh, yeah.

• 55:05Jordi Hays?

  He feels like it's an important issue. Is that an area that you're focusing or that you will be more focused on? Are they too busy?

• 55:12Speaker 07

  I actually, I actually posted back, send them to us, and I'm happy to help. But I am not aware of what he was particularly referring to. Everybody needs a lot of more security, yes, of course. But I don't, I don't, actually, I don't know what he was, what he was, what he was.

• 55:25John Coogan?

  I think he was specifically worried about the, the, like, in the context of the hugging face incident, uh, like an agent swarm, an agent state, like, wanting to get more resources and just going into a NeoCloud to get more inference of themselves.

• 55:38Speaker 07

  Oh, that way, I think.

• 55:38John Coogan?

  And that would be a high value.

• 55:39Speaker 07

  A way of hijacking capacity.

• 55:41John Coogan?

  Exactly.

• 55:42Speaker 07

  The good news is, the good news is there doesn't seem to be much excess capacity out there, so it's hard to hijack capacity. But let's, let's hope that.

• 55:49John Coogan?

  Yeah, yeah, yeah. A lot of, a lot of alarm bells are gonna go off, and you're like, wait.

• 55:52Speaker 07

  Yeah, I think so far, it's my understanding, most of the NeoClouds are re, sort of, selling their capacity back to the frontier LLMs. And the frontier LLMs will basically build very strong tunnel pipes, which basically sort of, you know, make it cap, almost like captive capacity. So I'm less fearful that that's gonna be a problem. But yes, you know, at an infrastructure level, everybody needs to put in basic infrastructure security, and I think some of them are. I think some of them are not putting, they're still in the stages of building their clouds yet. I don't think, I think the ones who are built, for, to be fair to them, are deploying firewalls and technology to make sure that there is no unauthorized access. But maybe Ilya knows more because he's smarter.

• 56:29John Coogan?

  Yeah. What's the state of AI research at Palo Alto Networks? I, you, you mentioned training small models. Is, is, is it so exciting that you have current employees that wanna jump onto that project and reskill and learn the art of training these small models? Are you hiring new AI researchers? Is there a specific skill set within AI research that is hyper-relevant to that team? What is your strategy for sort of remaining on the frontier of small models that are great at cybersecurity?

• 57:05Speaker 07

  Well, I think there are two or three sets of people we want, right? One set of people we want are who are AI savvy, who know how to use AI to get their jobs done better, who know how to use coding agents for AI. That should be a lot easier than hiring AI researchers. There, we have pivoted, I think 50% of our new hires in the last six months are early in career.

• 57:25John Coogan?

  Okay.

• 57:25Speaker 07

  These are people who are learning and they're typically having run through hackathons to get to Palo Alto. You don't, you don't look at where you went to school. We care about where you can use coding agents, you can use AI. So that's good because we're pivoting our workforce. And if we keep following that trend, it's reasonably likely that we will overwhelm the un-AI savvy people with more AI savvy people. That's kind of like ground zero, you gotta get that done. The second part is there are people who are really good at cybersecurity and know AI, and they'd like to get involved. And if you want to work in cybersecurity, there's no better place to work than Palo Alto Networks, right? We're the largest cybersecurity company in the world. You want to have an impact, you want lots of proprietary training data, you've got it. So we are lucky given our position that we can attract some of the people who work in the intersection of cyber and AI.

• 58:09Speaker 07

  The third part is raw, pure AI researchers who can, you know, do wonders with small language models and large language models. There, we have people who are AI literate. We have some PhDs in AI who work here, who had the cybersecurity bent, but they can go back to their roots in AI. And there, we supplement that capability with third-party training companies because they've been doing it around now for multiple customers. So we want to make sure if we can do it once, let's not get it wrong. Let's have somebody who's done it 500 times and bring maybe 500 is too many, but 20, 30 times. Let's bring them as part of the team so we can make sure we're getting it. So that's how we're tackling it. Thankfully, we don't have to compete with the frontier models for, you know, hardcore AI researchers to build our own, you know,

• 58:52John Coogan?

  Yeah.

• 58:53Speaker 07

  big models with multiple parameters.

• 58:54John Coogan?

  No, totally. Well, we have Andre from Consol here with us on the show. Let's bring him in and I want to hear about the partnership, how this came together and what the plan is.

• 59:04Speaker 07

  Look how we bring him in.

• 59:05John Coogan?

  Oh, perfect, oh, he's right here.

• 59:07Speaker 07

  There he is.

• 59:08John Coogan?

  I thought he was, I thought he was. Sorry about that. Okay, so introduce the thesis here. How did you guys start talking? What does the future look like for Consol at Palo Alto Networks?

• 59:23Speaker 07

  Well, look, we spent a lot of time talking to a lot of startups across the ecosystem, cybersecurity and non-cybersecurity. And as we continued our conversation, we ran to Andre and his team. We run a very strong capability, obviously, in security operations and agenticifying that. We have a lot of data, as I said, hundreds of terabytes just at Palo Alto Networks. We have an observability company which looks at it from the outside in to see how customer's infrastructure is running. And we run observability for one of the largest frontier LLMs in the world from that vantage point. And as we were talking, Andre shared what he was working on. And looking at what he's doing, he's taken a very AI-native agent-first approach to building a product.

• 1:00:07Speaker 07

  That is what future of software needs to look like. You know, he's actually hit the nail on the head in terms of how we need to build software for the future. That is something which is rare skill, things that we don't do internally. Then he coupled that capability by looking at the operations of a company, both on the IT side and non-IT side internally, say, well, how can I take that agentic capability, build product that sits on top of the underlying systems that work in a company? When we saw that, we thought, wait, if we could bring the large data lake, the backends we have in security and IT operations, and we can bring his capability, could we build something that's amazing for our customers? And that's sort of what started the conversation. He was a hard nut to crack, he and his partner wanted to do it alone.

• 1:00:50Speaker 07

  But I had to use every bit of charm and persuasive skills to convince him and Neil they're gonna be part of Palo Alto and couldn't be more delighted that he's part of the family now.

• 1:00:58John Coogan?

  Yeah, yeah, I'm so excited for this. We were looking at the Consol website and in such a short time, you got every single logo on that website. Fantastic execution. What excites you most about the Consol journey thus far? And what are you most excited for in the next chapter?

• 1:01:19Speaker 08

  Yes, I mean, first of all, the DBPN sponsorship got us a lot of those, a lot of those customers.

• 1:01:25John Coogan?

  I'm so excited for that, that's amazing.

• 1:01:26Speaker 08

  Little plug there.

• 1:01:29Speaker 08

  I think, look, we started this journey about three years ago and it's been kind of better than we could have expected. We started in IT and then we've kind of like expanded. Most of our customers actually use this for more than just IT. It's, you know, HR and legal, security, finance and so on. And I think what we realized was if we were going to go broader, you know, go beyond IT, we, I think partnering with a larger customer, a larger company that has, you know, works with the largest companies in the world, felt like a natural path. And so I'm excited, I think, for the future where we, you know, can just, we have more resources, we can go after the vision at a much, much broader kind of like product roadmap.

• 1:02:10John Coogan?

  Amazing, well, I want to hit the gun.

• 1:02:11Speaker 07

  We're gonna, we're gonna work on the data to get him more excited, but.

• 1:02:14John Coogan?

  Well, how about this?

• 1:02:16Speaker 07

  The first one.

• 1:02:16John Coogan?

  How about this?

• 1:02:17Jordi Hays?

  How about this?

• 1:02:23John Coogan?

  Is that exciting?

• 1:02:24Jordi Hays?

  I'm so, I'm so happy for both you guys. Like Andre, if there was a CEO that to work for, I book, especially in your category, being Nikesh, you know, he's like, he's like a, you're very like fatherly figure, you know, it's your.

• 1:02:41John Coogan?

  Start working on your golf game, buddy.

• 1:02:43Jordi Hays?

  Yeah.

• 1:02:43John Coogan?

  Start working on your golf game because we're gonna need a lot of birdies.

• 1:02:47Speaker 07

  No, he's gonna work, bro, he's gonna work.

• 1:02:51Jordi Hays?

  He works, you golf.

• 1:02:52John Coogan?

  Yeah.

• 1:02:53Speaker 07

  That's the plan.

• 1:02:54John Coogan?

  Yeah, well, thank you guys so much for coming on.

• 1:02:56Jordi Hays?

  Real for you both and yeah, excited to see the progress you make.

• 1:02:59John Coogan?

  We'll talk to you soon, have a good one. Goodbye. 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, automating business workflows. Codex helps you move projects forward from start to finish. Our next guest is from Blue Owl Capital. We have Senior Managing Director Kurt Tenenbaum. Sorry to keep you waiting, Kurt. Thank you so much for joining the show. How are you?

• 1:03:22Speaker 09

  No, no worries. Well, you know, you had to finish with Nikesh there and give him a hard time about all the, all the birdies he's been getting. So I appreciate that, I appreciate that.

• 1:03:30John Coogan?

  He's a fantastic golfer. Since it's the first time on the show, I would love to know a little bit about your focus within the organization. And, and then I want to go into the latest deal with Iron, but also a little bit of the lineage of this business that Blue Owl has built up. We've seen, we like, we've covered the company so much on the show, but I think you're the first person from the organization to join, so very excited to talk to you.

• 1:03:56Speaker 09

  Yeah, and excited to talk to you, Jordan and John, big, big fan of the show. And thanks for, thanks for having, thanks for having me on. So, yeah, at the Blue Owl, I focus on our AI compute infrastructure business. And so what that means is we have a big, robust data center investing practice. We own over 100 data centers across the world, about 10 gigawatts worth of compute.

• 1:04:19John Coogan?

  Wow.

• 1:04:19Speaker 09

  There you go. And, and, but however, that business is really focused on kind of building the underlying data centers. My team is everything that goes in. And so as you guys know well, you spend $25 on a data center, you have to spend $75 on a chip, on the chips that go inside every five years. And so that's what we're really excited about, figuring out ways to partner, figuring out ways to finance that piece of the build out. What's interesting for us, because Blue Owl is a diversified asset manager across a bunch of different strategies, is we really get to bring the excellence attached to our data center investing business, our direct lending business where we really got our start,

• 1:05:00Speaker 09

  as well as our leasing business, and bring the combination of all three of those together to be able to provide solutions like Iron, which we're excited to talk to you about, to market that we think are differentiated versus many of our other peers.

• 1:05:16John Coogan?

  Every time I see private credit and data center build out in the news, it's always this discussion about GPU depreciation. Is that an overwrought discussion? Do you feel like you have a stronger feel on that now? We, obviously, we've seen a lot of incredibly positive news around depreciation with even A100s getting really high utilization rates long into their life.

• 1:05:41Jordi Hays?

  Yeah, that was sort of the.

• 1:05:42John Coogan?

  That was the.

• 1:05:43Jordi Hays?

  Primary takeaway from, from CoreWeave's last earnings call. It's just that they, you know, have these old GPUs that are, that are, that are going to be generating revenue well into.

• 1:05:52John Coogan?

  Yeah.

• 1:05:53Jordi Hays?

  The.

• 1:05:54John Coogan?

  But I'm curious, like, is GPU depreciation actually top of mind for you? Or is it, is it something that you feel like is pretty well-understood, pretty solved?

• 1:06:04Speaker 09

  Yeah, it's a good, it's a good question. And listen, the core weave data point is quite notable and something we and the rest of the market obviously took, took, took note of. But it blew out. We don't pretend to have a crystal ball on depreciation or forward rates for GPU levels. Obviously, we're very bullish on them in general, but the way we've invested here is really focused on keeping the duration of the investment we're making relatively short. It matches the underlying contracts that we have with some of the AI natives that we are financing, and we're excited about talking about that piece of it as well. And then underwriting IRIN as an investor and getting comfortable there. And so it's, it's not, we are not just hanging our investment on forward

• 1:06:48Speaker 09

  depreciation rates for GPUs, although it's something we're obviously very focused on and spending time around.

• 1:06:54John Coogan?

  What does the current landscape for these types of deals look like? Because we see hyperscalers, sometimes Nvidia directly doing something that looks a little bit like equipment financing. And I'm wondering if the, if the shape is like, are you competing with people outside of the private credit world at this point? How big is the, is the pool of capital that the data center constructors and operators are actually going after?

• 1:07:19Speaker 09

  Yeah, I think this is a moment in time where everyone is going to have to be invested across the landscape to get to the type of capital needs that we, we need. I actually think at some point, capital may become the limiter, or at least one of the limiters attached to it. We're seeing the investment grade market finance chip compute actually quite efficiently, but there's a lot of demand for that. And that demand will continue and will continue to escalate. And so the part of the market we're really focused on is the non-investment grade piece, where we think it's a lot harder to get that type of financing. We're able, in the case of IRIN, to finance the AI natives, which is a particular pain point and pinch point in the market. And, and that's, that's where our focus is, that's where our focus has really been.

• 1:08:01John Coogan?

  Yeah, got it.

• 1:08:02Jordi Hays?

  What are you seeing on the actual data center operator side? And what are the smart players doing to overcome sort of local regulatory hurdles? You know, we've heard there's, there's a bunch of ideas being thrown around right now. How do you get a local community really bought in? There's the tax revenue component. Some, some individuals are going to be excited about that. Others may be more excited about direct payments. But what are you seeing across the landscape of what's working to actually get projects from the sort of concept stage to powered shell GPUs, you know, actually running?

• 1:08:41Speaker 09

  Yeah, listen, that's been a huge focus of the market and of the media recently. I'm not sure I have the exact answer to that as we sit here today, but it's something we as an organization are spending a tremendous amount of time around. And listen, we really need to engage all the constituents around the table to get to a solution that, you know, works for AI infrastructure, as well as works for the investors and the operators who are involved as part of that.

• 1:09:07John Coogan?

  And, and most of the time for, I imagine for equipment financing deals, the powered shell is already up and running. And so a lot of those concessions, if they need to be made, have already been made. Is that, is that roughly right?

• 1:09:20Speaker 09

  Yeah, that's exactly right. One of the things we like about it is when we fund into these transactions, the compute is basically on the come within a couple of weeks. And so that is all, that portion of the business is already up and running, and we get to finance very close to where the revenues are actually happening.

• 1:09:38John Coogan?

  Yeah, and it might also be the case that there is an existing powered shell or data center, and they're just upgrading to Blackwell or something like that. And that's where you come in. Is that, is that, does that happen?

• 1:09:46Speaker 09

  Yeah, that's exactly right.

• 1:09:47John Coogan?

  Post retrofit. Yeah, that makes sense. Well, congratulations on the IRIN deal. Thank you so much for coming on the show.

• 1:09:53Jordi Hays?

  Yeah, come back on as you have more.

• 1:09:55John Coogan?

  Yeah, we'd love to talk to you again soon.

• 1:09:56Speaker 09

  Thanks for having me, guys.

• 1:09:57John Coogan?

  Have a great rest of your day. Goodbye. 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. We're going to space next.

• 1:10:12Jordi Hays?

  That's right.

• 1:10:13John Coogan?

  We got Philip Johnston.

• 1:10:13Jordi Hays?

  We got a spaceman. Spaceman.

• 1:10:15John Coogan?

  How you doing? Welcome back to the show.

• 1:10:17Speaker 10

  Hey, thanks for having me. Third time.

• 1:10:19Jordi Hays?

  Third time. Three-peat.

• 1:10:21John Coogan?

  I mean, it's a fascinating business, attracts a ton of attention, also attracting a bunch of capital. What's the latest news for you?

• 1:10:28Speaker 10

  Yeah, so we just raised a Series A extension, $250 million, at a 2.3 million valuation.

• 1:10:38Speaker 10

  With Nvidia investing 25 million and Cisco coming in and a bunch of other folks.

• 1:10:43John Coogan?

  Fantastic. What is the use of funds right now? I imagine that there's still a lot of R and D to do. I'm obviously very optimistic, but you know, I, when I, when I talk, when we talk about space data centers generally, we're usually in 2030, maybe 2028. So is there use for capital right now? Or is this sort of more of an opportunistic raise, build a fortress balance sheet, and then be able to hire and really build all the key precursor pieces to the actual ongoing business?

• 1:11:12Speaker 10

  Yeah, so I think there's a few reasons to do the raise now. One is to secure launch. So booking launch for 2028, 2029, and that's obviously quite expensive. Another is when we work with, I mean, we're doing some pilots with, you know, some of the large data center companies will announce that soon. But they want to see a few hundred million dollars on the balance sheet before they'll, you know, commit their resources to the project. So that's another one. And then the last one is actually moving into much larger manufacturing facilities and starting to ramp up the team, things like that.

• 1:11:44John Coogan?

  Yeah, that makes sense. What is the state of the, the experiments? I mean, I know that you, I believe you put a GPU in space, but there's other, there's other sort of test runs that you're doing. Walk me through the, the thesis there, what you hope to get out of those, those tests, what you expect to learn. And then also, I imagine that it's also just sort of marketing for the company, like awareness during a time when you're not putting up tons and tons of compute just yet.

• 1:12:11Speaker 10

  Yeah, yeah. So yeah, as I mentioned, we launched the Star Cloud One satellite in November last year. So that had the first Nvidia H100 onboard. It's still going strong. We're doing a whole bunch of tests on that.

• 1:12:20John Coogan?

  Really?

• 1:12:21Speaker 10

  Managed to, yeah, we're doing, the more useful workloads we're doing now are high powered inference on other satellite imagery, particularly SAR data for various military and government applications.

• 1:12:30John Coogan?

  Sure.

• 1:12:32Speaker 10

  But yeah, we've got three launches booked for next year. So we'll have two going up in Q1 next year, one towards the end of next year. And we're actually just booking on every, like every launch provider possible now. So yeah, we should have some, I'm not sure if we've, if we've announced that yet, but we'll announce a few other launches that we've booked soon.

• 1:12:51Jordi Hays?

  Yeah, is that, is that, you know, from a, you know, I guess, forward looking standpoint, is that going to be important to be diversified from a, from a launch partner standpoint? Because I can imagine when you need to raise the billion dollars, people are going to be sitting there being like, hey, like you're dependent on SpaceX, and they're also in this business, and maybe that's a concern over time. I'm sure right now Elon is just happy for there to be more compute in space and have other parties, you know, proving out this thesis. But is that, is that important?

• 1:13:24Speaker 10

  Yeah, yeah. Yeah. So to start on a second point, I mean, right now, yeah, we do have a great relationship with SpaceX. We've, you know, signed a contract for the next 25 of our satellites to have their laser terminals on. So we'll also be using them for connectivity, and we've got a whole bunch of launches booked. But yeah, I mean, I think it's good for the industry in general for, for there to be lots of optionality in the launch market. And so, yeah, we're, we're keen to encourage, you know, there to be a diverse launch ecosystem.

• 1:13:53Jordi Hays?

  Who, what, what does it actually take to lock in a launch in 28, 28 and 29? Are you having to put up a non-refundable deposit? What, what percentage of the, of the total cost are you having to actually put up?

• 1:14:08Speaker 10

  Yeah, for most launch providers, it's sort of 10 to 20% down payment, refundable if the launch doesn't happen. Although with the more experimental rockets, if the launch doesn't happen, they probably have larger balance sheet problems than we paying us.

• 1:14:24Speaker 10

  It's a bit of a, bit of a gamble on some of them. But I mean, it's the kind of, it's the kind of thing we're, we're keen to spur on. So we're happy to put those deposits up.

• 1:14:34John Coogan?

  Very cool. Well, congratulations on the new funding.

• 1:14:37Jordi Hays?

  Great progress.

• 1:14:38John Coogan?

  The progress. And we'll talk to you soon. Have a good one. Let me tell you about Figma. Agents meet the canvas. Your AI agents can now create and modify your Figma files with design system context. Up next, we have Jimmy Iovine in person. He is the co-founder.

• 1:14:53Jordi Hays?

  An honor.

• 1:14:53John Coogan?

  Interscope records.

• 1:14:54Speaker 11

  How you doing, man?

• 1:14:55John Coogan?

  We're doing fantastically. How are you?

• 1:14:56Speaker 11

  Good, good. Yeah.

• 1:14:57John Coogan?

  Thank you so much for coming on down.

• 1:14:59Speaker 11

  Hey, it wasn't easy. You're far from a house, but it's cool.

• 1:15:03Jordi Hays?

  Coming in from?

• 1:15:04Speaker 11

  Malibu.

• 1:15:05Jordi Hays?

  There we go. I do that drive, I do that drive every day, too.

• 1:15:09Speaker 11

  Are you in Malibu?

• 1:15:09Jordi Hays?

  Yeah, yeah, yeah. Senra, me, Huberman, you know, we got a little podcast dynasty out there.

• 1:15:17Speaker 11

  Oh, great, great. I'll give you my number. We're out there. Me and my family. Yeah, yeah.

• 1:15:21Jordi Hays?

  And Ben, too. Ben Taft.

• 1:15:23Speaker 11

  Really?

• 1:15:23Jordi Hays?

  Yeah, yeah.

• 1:15:24Speaker 11

  Fantastic. That's great.

• 1:15:25Jordi Hays?

  We're all out there.

• 1:15:26Speaker 11

  That's great.

• 1:15:27John Coogan?

  How are things going at USC?

• 1:15:29Speaker 11

  Well, you know, we started this, we started the school, you know, it's called IYA. And it's really a school of innovation. What happened was

• 1:15:41Speaker 11

  In 2014, we sold Beats headphones to, and Beats music to Apple.

• 1:15:48John Coogan?

  Yeah.

• 1:15:49Speaker 11

  And at Beats, we had a similar experience where we couldn't find people that could collaborate the way Dre and I wanted them to collaborate.

• 1:15:59John Coogan?

  Mm-hmm.

• 1:15:59Speaker 11

  You know, so

• 1:16:02Speaker 11

  we kind of got into that. We would, it was very, very difficult. Either you're an engineer, design, business.

• 1:16:09John Coogan?

  Yeah.

• 1:16:09Speaker 11

  It just, they couldn't speak the same language. They didn't understand the why of the other person.

• 1:16:14John Coogan?

  Hmm.

• 1:16:15Speaker 11

  So when we went to Apple, it was that on steroids for us. You know, they're a great company, the best company, you know. But we found that at every company we went to, that everything was very siloed. And communication, understanding was siloed.

• 1:16:32John Coogan?

  Mm-hmm.

• 1:16:33Speaker 11

  Not some, not just people, but understanding.

• 1:16:36John Coogan?

  Mm-hmm.

• 1:16:36Speaker 11

  And so one day I woke up and I just called Dre. I said, Dre, you know, the problems that we're having. You know, Dre and I really didn't go to school much, you know. And I said, but I got a feeling that this is a problem in education. People are learning in a siloed way. You see, 19 to 25 and 26, I don't know about you guys,

• 1:16:59John Coogan?

  Yeah.

• 1:16:59Speaker 11

  but that puts a big imprint on your life.

• 1:17:02John Coogan?

  Yeah.

• 1:17:02Speaker 11

  You know, it's like, you learn a lot in the formative years. Those are really important. They were very important for me.

• 1:17:09John Coogan?

  Yeah.

• 1:17:09Speaker 11

  And I guess that's kind of why the age of college.

• 1:17:11John Coogan?

  And getting like varied experiences, I feel, is so important. When I think about my era from 20, from 19 to 26, I studied economics. I learned to program. I started a business. I filmed videos, did marketing. I, it blend, it helps to blend all these things together.

• 1:17:27Speaker 11

  How old are you?

• 1:17:28John Coogan?

  I'm 37.

• 1:17:29Speaker 11

  Yeah, so you, you are, you're, you're young enough to grow up in a really multidisciplinary environment.

• 1:17:38John Coogan?

  But importantly, like, a lot of that was on my own. I just had to go learn.

• 1:17:41Speaker 11

  That's my point.

• 1:17:42John Coogan?

  Yeah, I had to do it myself.

• 1:17:43Speaker 11

  That's my point.

• 1:17:44John Coogan?

  Yeah.

• 1:17:44Speaker 11

  So now, when you come out of high school,

• 1:17:45John Coogan?

  Yeah.

• 1:17:46Speaker 11

  they silo you.

• 1:17:47John Coogan?

  Yeah, totally.

• 1:17:48Speaker 11

  Okay, you're gonna go work with 60 engineers every day. You're gonna go with, go to Wharton, but you're gonna be with 45 accountants every day.

• 1:17:56John Coogan?

  Yeah.

• 1:17:56Speaker 11

  And there's something wrong with that.

• 1:17:59John Coogan?

  Yeah.

• 1:17:59Speaker 11

  So, you know, we stepped in, went to USC and

• 1:18:04John Coogan?

  How do you map that to, or match that with this idea of putting on the blinders? Why does a race horse wear blinders, right?

• 1:18:11Speaker 11

  Well, because every, we live in a world now, it's worse than ever with social media.

• 1:18:17John Coogan?

  Yeah.

• 1:18:18Speaker 11

  Everyone cares so much about what somebody else thinks.

• 1:18:22John Coogan?

  Oh, that's interesting.

• 1:18:23Speaker 11

  I mean, you, we have people just, all day, what do they think of my post? What do they think of my, what do they think of my orange juice? Who cares?

• 1:18:32John Coogan?

  Yeah, yeah.

• 1:18:33Speaker 11

  You know what I mean? Would you go to a grocery store and ask everybody what they think?

• 1:18:37John Coogan?

  Yeah.

• 1:18:37Speaker 11

  You know, so anyway, I'm an older guy, so it doesn't make any sense to me. But, you know, but that's the blinders. The blinders are very simple. Run your own race.

• 1:18:48John Coogan?

  Yeah.

• 1:18:49Speaker 11

  But enter that race with the understanding and the empathy

• 1:18:55John Coogan?

  Yeah.

• 1:18:56Speaker 11

  of other disciplines.

• 1:18:57John Coogan?

  Yes.

• 1:18:58Speaker 11

  We all have that problem in any company you have. The extreme tech side and the extreme design side have trouble communicating.

• 1:19:07John Coogan?

  Yeah.

• 1:19:08Speaker 11

  Maybe not everyone at every company, but most people at most companies.

• 1:19:13John Coogan?

  Yeah.

• 1:19:13Speaker 11

  And then when you, you know, remember, we brought 300 people from the creative business into Apple, basically, you know. And Apple's an incredible company, but

• 1:19:26Speaker 11

  it's, and it's the best of them, by the way.

• 1:19:29John Coogan?

  Yeah.

• 1:19:30Speaker 11

  By the way. But it's all somewhat siloed, all these companies.

• 1:19:33Jordi Hays?

  Do you think entrepreneurial people know that they're entrepreneurial for the most part? And I ask that because do you find with the school, there's people that maybe, that, that aren't applying to be a part of the program, but you actually want to go and find those people? Or, or generally, are these people like self-selecting and they, and they just know they want to be a part of it?

• 1:19:53Speaker 11

  They, they know that there aren't many schools that fit who they are.

• 1:19:58Jordi Hays?

  Sure.

• 1:19:58Speaker 11

  Right? And a lot, we get a lot of applicants. And that's because we fit, we're speaking their language, you know. And think about this, we started this in 2012. Now, a lot of schools are saying, okay, we offer multidisciplinary life. They say, okay, you're in an engineering school, but you could go take one course across the hall and say, you know, that's not the joke.

• 1:20:25John Coogan?

  No.

• 1:20:25Speaker 11

  The, what it is, is what companies want. Actually, we did research at USC to find what, what type of students they want. Number one came back collaborative innovation.

• 1:20:39John Coogan?

  Yep.

• 1:20:40Speaker 11

  And that's the foundation, you know, our school is really Ivy Young Academy for Innovation. We put, in the beginning, tech, design, and entrepreneurship because we wanted to explain it.

• 1:20:52John Coogan?

  Yeah.

• 1:20:53Speaker 11

  We wanted to make it literal, like, you know, rock to the forehead kind of, you know, messaging. So, but now, it's fundamentally the Ivy Young Academy of Innovation. And because people can't, you need to collaborate, to innovate. And, you know, look, I'll give you an example. People say, how do you know there are problems at, at these companies like this? Well, I've been to a lot of them, but I have proof. Here's my proof. Why is it that so few, I want to be generous, so few software companies have built successful commercial hardware, consumer electronics?

• 1:21:35John Coogan?

  Yeah.

• 1:21:36Speaker 11

  Why is that?

• 1:21:37John Coogan?

  No founders in the seats?

• 1:21:40Speaker 11

  They

• 1:21:40John Coogan?

  Run by committee?

• 1:21:41Speaker 11

  Because, no, they can't collaborate.

• 1:21:43John Coogan?

  Can't collaborate.

• 1:21:44Speaker 11

  They can't collaborate.

• 1:21:45John Coogan?

  Yeah.

• 1:21:46Speaker 11

  You know, now, you know, I mean, Meta's gotten this, this piece of hardware out there right now, but they went to, I mean, it looks like, it looks like they went to Ray-Ban, you know, I mean. And it's cool, it'll do okay, you know, do fine, whatever. They're a great company, but none of these companies can make hardware. And they all have hardware envy.

• 1:22:07John Coogan?

  Yeah.

• 1:22:07Speaker 11

  All of them.

• 1:22:08John Coogan?

  Yes.

• 1:22:08Speaker 11

  You know, and so there's a reason for that. And my, and my thesis, and mine and Dre's thesis is that this is why.

• 1:22:18John Coogan?

  Yeah.

• 1:22:19Speaker 11

  Because what was so great about, what is so great about Apple? Because it's still in their DNA, is they had Steve Jobs.

• 1:22:26John Coogan?

  Yeah.

• 1:22:26Speaker 11

  He was the ultimate cross-disciplinary human being. That was his, in his DNA, where tech meets liberal arts. And when I went, the first time I went up there in 2003, I got it in 30 seconds, because I had gone to five other companies before that. I talked to them about piracy and all that stuff. I was on a, a can't kick about that, you know. And I was, the minute I had hello, I met him in ADQ, I said, okay, this is where the party is. You know, and I just went back. I told the people, Doug Morris at Universal, who was in charge of the place, I said, license this guy.

• 1:23:08John Coogan?

  Yeah.

• 1:23:09Speaker 11

  Because they, they know a lot more about this than anybody in our business, and they have feel. Okay, so this, this, this school is truly designed behind that meeting. I know it sounds simple, but look, we had an idea. I woke up one day and I called Dre. I said, Dre, what about, what about starting a school like this? Hell, yeah, you know. By the way, he really talks like that. So we wrote a check for $70 million in a month.

• 1:23:39John Coogan?

  That's crazy.

• 1:23:40Speaker 11

  We're just on one line, knowing nothing about education. And we built what I consider a fabulous school.

• 1:23:46John Coogan?

  Yeah. Do you think that there is a, there is a trap to be avoided with the school around students becoming tracked? Like, they've done the interdisciplinary work and they see this as the best way to get a job at Apple? Or the best way to get a job at a startup? And in fact, they should be sort of laying back and watching opportunity come to them during this period?

• 1:24:08Speaker 11

  Well, first of all, they're 22 years old. They can go get a job at Apple and still go change the world.

• 1:24:14John Coogan?

  That's true.

• 1:24:14Speaker 11

  You know, Steve, Steve Jobs had a job.

• 1:24:17John Coogan?

  Yeah.

• 1:24:18Speaker 11

  For Apple, right?

• 1:24:19John Coogan?

  Yeah.

• 1:24:19Speaker 11

  So, you know, nothing wrong with getting experience. Uh, I, I think it's actually good.

• 1:24:24John Coogan?

  Yeah.

• 1:24:24Speaker 11

  But it's more important, I mean, look, even the engineering degree, you could see is trying to expand. They get it, you know what I mean?

• 1:24:34John Coogan?

  Yeah.

• 1:24:34Speaker 11

  You can't just It's really not a good environment to work where people just don't understand each other fundamentally. It's empathy.

• 1:24:44John Coogan?

  Do you think that as technology grows and technology progresses, that is creating like a natural widening force? Because it used to be that the instrument was technology, but it was understandable by an artist. And now the technology might be seven layers deep in some AI thing that's so abstract and so obscure that that creates.

• 1:25:08Speaker 11

  Look, in 2012, I couldn't spell AI, you know? So I had no idea, but it's we built a school that's perfect for it, you know? And because it's what it makes so much common sense inside these companies. If you understand the why of the other discipline. Otherwise, you're walking, it's a crash, you know? And that's why Apple can still make great software and great hardware. That that DNA is in those people. It's in Tim Cook, it's in Eddie Q, you know? And now I don't know this fellow, John, but I'm sure he was brought up in the same school.

• 1:25:51John Coogan?

  Yeah, no, he's been there a long time.

• 1:25:52Speaker 11

  But that's a question that should be asked and will probably never be answered. But why do software companies fail when they go to make hardware?

• 1:26:03John Coogan?

  Yeah, it's tricky. A lot of them have tried, a lot of them have tried.

• 1:26:06Speaker 11

  Are you kidding?

• 1:26:06John Coogan?

  Yeah.

• 1:26:07Speaker 11

  Yes.

• 1:26:07John Coogan?

  Basically, all of them.

• 1:26:08Speaker 11

  But there has to be a reason, right?

• 1:26:09John Coogan?

  Yeah.

• 1:26:10Speaker 11

  So my reason is better than anybody else. So they maybe somebody else come up with a better idea. But my reason is very convenient for my school.

• 1:26:16Jordi Hays?

  Yeah.

• 1:26:17Speaker 11

  So.

• 1:26:18John Coogan?

  That's good.

• 1:26:18Jordi Hays?

  Do you think, do you think more entrepreneurs should go back to the, to the university that they graduated from and teach a course? Like something that's, uh, uh, there's so many lessons that I didn't learn in school. And I, I won't claim to be an expert on, on many things. But if I even had to put together like 90 minutes, I feel like I could uh, save my younger self a lot of time. And it's maybe.

• 1:26:42Speaker 11

  Of course they should. Everyone should give back. I mean, I think a lot of people do. I see at a UC all the time. I mean, they have, um, they have alumni giving hundreds of millions of dollars to these schools, you know? Uh, and I sure, I'm sure they go back and talk to them and everything. I spend a lot of time at the school. I try to be very involved, you know? I do.

• 1:27:03Jordi Hays?

  Do you think you would have dropped out of your own school? Like the younger version of your.

• 1:27:08Speaker 11

  You know, uh, here's the thing. Uh, if there was, I have to go for a lot of therapy on dealing with dyslexia first.

• 1:27:16John Coogan?

  Sure.

• 1:27:17Speaker 11

  You know, I had a lot of trouble reading and paying attention. So I don't know what they call that as a, there's a names for them, you know? But, uh, I don't know, maybe if there was a lot of Prozac back then, maybe I could have focused. But no, I got into, I, I, I just, what I got into is I got into, I loved music, right? So I got into music and engineering, which is sort of technology side, right? So I started as a recording engineer. So you have to understand the basic principles of technology in order to run a console and, you know, fix microphones and do whatever you have to do, you know? So I got lucky. I didn't know, I didn't know I was doing that then, but, um, you know?

• 1:28:01Speaker 11

  I don't know that not everybody can do that. So school is a great thing, but only if you're in an environment that's gonna enhance your creativity and who you are, not take one part of it and put it in a box.

• 1:28:15Jordi Hays?

  Yeah, the funny thing for me is I, it took me until I was an adult to realize that I was creative because I remember my like pretty formative experience was, was in early, early school. When I'd be in an art class and I'd be told, draw this or do that or whatever. I just was not good at drawing. I never was good at drawing. And in my head, like creativity and art was all about drawing.

• 1:28:39John Coogan?

  Sure.

• 1:28:39Jordi Hays?

  Right? Cause that was my first time like doing anything creative in a school setting. So I, then I went like almost probably 15 years thinking I'm not creative, right? And so it took me to being an adult to realize that creativity can have all these other forms, right? It's not just like, can you draw a pretty picture, right?

• 1:28:55Speaker 11

  Well, you could also, you could learn. You could learn creativity. You could learn taste. You could learn all those things. It's somewhere in you where you could learn it. Absolutely. I had no taste when I walked into the record plant in John Lennon's studio in 1973. I had zero taste. I went from three albums with him, two albums with Springsteen and one album with Patti Smith, and I left with taste.

• 1:29:22Jordi Hays?

  Do you, but, but I often find that a lot of people have great taste, but they don't have the ability to create things that meet their taste level. Like taste can, taste can be inherent in some people.

• 1:29:36Speaker 11

  You know, what you do then is you have an eye for people that do have the gift. And you surround yourself with them. You know, I learned that at 19 years old. I came, I was living in my mother's house in Brooklyn, in Red Hook, Brooklyn. My father was a law enforcement. And I met John Lennon and Bruce Springsteen. I did those records and I got an apartment. I said, okay, I meet people like this. My life is going to be okay. I just got to make sure that I don't get thrown out of the room.

• 1:30:07Jordi Hays?

  Yeah.

• 1:30:07Speaker 11

  So when you're running a company,

• 1:30:12Speaker 11

  leave your ego out of it and realize somebody does something better than you. And don't defend anything. Don't defend your ignorance, you know? Just go for it and just say, okay, this person is great. I'm gonna be of service to this person.

• 1:30:27Jordi Hays?

  Yeah.

• 1:30:27Speaker 11

  Even if they work for you.

• 1:30:28Jordi Hays?

  Yeah.

• 1:30:29Speaker 11

  To get them loyal to your company and loyal to you. And, um, you know, that's what I always do. I just, I got a pretty good eye for seeing who's gifted. And I make, try to make their life as great as possible.

• 1:30:46Jordi Hays?

  Yeah, yeah, that resonates on a smaller scale where I, I knew I would, I'm not great at, I'm not great at design. I'm not great at, you know, drawing out a logo, for example, but I can find people that can make great logos. And, and I realize I could, uh, at least work with.

• 1:31:00Speaker 11

  Headphones.

• 1:31:01Jordi Hays?

  Yeah.

• 1:31:02Speaker 11

  I, yeah, we, we come out of music, me and Dre. So people used to go, well, of course you guys are in the recording studio. Of course you knew how to make headphones.

• 1:31:12Speaker 11

  If you gave, if you gave Bruce Springsteen two pieces of wood, he's not coming out with a guitar.

• 1:31:17John Coogan?

  No way.

• 1:31:18Speaker 11

  Okay, or Keith Richard. So we had to go and learn. What we did was we found people that really were good at this and bring them in. And, and we just added the idea of what was wrong. What was wrong is that everyone was listening to music and entire generation, including yours and yours, on those little free earbuds that Apple would give out.

• 1:31:42John Coogan?

  That's right.

• 1:31:43Speaker 11

  So Dre said to me, man, that's, I spent all day in the studio and my kids are listening on these ridiculous things. So we said, okay. So then we decided we're gonna make a headphone. Then everyone tells us you can't, to get a great headphone, they'd be like $300 at retail. I said, well, that's not gonna work because Apple gives them away for free and so does Samsung.

• 1:32:08Speaker 11

  We said, okay, our job is to get them on people's head. Once they hear it, they're not going back. And that's what we did. So we brought culture and we got them on people's head to try them. And then once young people started trying them, they wanted it for Christmas.

• 1:32:28John Coogan?

  Was that expensive? I remember the story of you paying to advertise G-Thing, right?

• 1:32:35Speaker 11

  That was a song.

• 1:32:36John Coogan?

  It was a song.

• 1:32:36Speaker 11

  That was a song.

• 1:32:37John Coogan?

  But, but it was a contrarian move because I feel like, uh, pulling the trigger on a big ad spend before an artist has really broken through is risky, but how does that change your?

• 1:32:48Speaker 11

  I, I don't, I don't know how to spell risk either. You know what I mean? I just, I just, I do, I wake up in the morning and I do what I feel.

• 1:32:57John Coogan?

  Yeah.

• 1:32:57Speaker 11

  And I do what makes sense. I talk to the people that are around me and I don't care about the risk. I really don't. I never did. I just do what's right for the project. And sometimes, you know, you cut a lot of flack because, you know, when you're at a big company or something, the budgets and things like that. But I, I, I, I just get myself in situations where I leave them if I can't just do what I want to do.

• 1:33:20John Coogan?

  Sure.

• 1:33:20Speaker 11

  You know?

• 1:33:21John Coogan?

  Sure.

• 1:33:21Speaker 11

  I try to make a life of just doing what I want to do.

• 1:33:24John Coogan?

  Yeah.

• 1:33:24Jordi Hays?

  Over the years, how, how did you think about bringing in new business partners? You have some early success working with some set of people. You start meeting other great people. In your mind, how are you deciding whether to spend time and partner with new people versus sticking with the band?

• 1:33:44Speaker 11

  I'm very, I'm a very positive person. So I always give people the benefit of the doubt and try it, you know? And you could tell pretty quick if something's gonna work or it's not. If it's not, say sorry. And if it does, go in further. I try a lot of things, you know? I'm not, it's.

• 1:34:03Speaker 11

  I'm not precious about anything. Once I figure out what I'm doing, I'm precious about that.

• 1:34:07John Coogan?

  Yeah.

• 1:34:08Speaker 11

  But as far as the education and learning how to get, look, we would have never done this school.

• 1:34:14John Coogan?

  Yeah.

• 1:34:14Speaker 11

  I mean, you know, if we were nervous about things, I mean, we knew nothing about what we were doing.

• 1:34:21John Coogan?

  Yeah.

• 1:34:22Speaker 11

  And I think we have one of the best, if not the best, school in this area in the country.

• 1:34:27John Coogan?

  Yeah.

• 1:34:28Speaker 11

  You know, so that's a good thing.

• 1:34:32John Coogan?

  There's a, obviously, big technological transition in music with AI. Going back maybe before streaming, what was the first technological shift you remember in the music industry?

• 1:34:45Speaker 11

  I mean Nap- Napster, you mean?

• 1:34:46John Coogan?

  Yeah, we had before, before Napster even.

• 1:34:48Speaker 11

  Well, before Napster, I mean, I go, I go back a long time, you know, uh, stereo.

• 1:34:55John Coogan?

  Okay.

• 1:34:56Speaker 11

  You know, uh, multi-track recording, you know, where do you want to start?

• 1:35:00John Coogan?

  Yeah, but what, but what was that like? Was there a discussion about it? Or was it something that just, you know, was adopted behind the scenes and the consumer of music?

• 1:35:10Speaker 11

  It's always, it's always, because the stuff like that, it was expensive, it was always the professionals, you know? Like you could hear the first time, um, a phaser, one of the first times a phaser was used on a record in Jimi Hendrix, you know? You could hear when the Beatles got stereo, they walked in the studio one day, because I knew those guys. And there was two speakers instead of one.

• 1:35:31John Coogan?

  Yeah.

• 1:35:31Speaker 11

  You know, Paul, tell you, he has told people that, he said, okay, they thought at the beginning, oh, twice as loud, you know?

• 1:35:38John Coogan?

  But there's more to it.

• 1:35:39Speaker 11

  There's more to it. So, you know, it gone all the way. There's drum machines, drum machine was big.

• 1:35:44John Coogan?

  Yeah.

• 1:35:44Speaker 11

  You know, I, I, I was fortunate because Roger Lynn used to be a guitar player and he was playing on one of my sessions when he was creating this thing. He had the computer in there with him, he was creating a drum machine.

• 1:35:55John Coogan?

  Yeah.

• 1:35:56Speaker 11

  So, uh, I got to see that really early on, but then Prince exploded it.

• 1:36:00John Coogan?

  Yeah.

• 1:36:01Speaker 11

  You know, so AI is, you know, uh, it's a little different.

• 1:36:06John Coogan?

  Do you think people thought it was a risk? I mean, I know risk is not in your vocabulary, but, uh, for Prince to adopt the drum machine?

• 1:36:14Speaker 11

  It was bold.

• 1:36:14John Coogan?

  Bold.

• 1:36:15Speaker 11

  It was very bold, because, uh, remember, this guy is a great, great musician.

• 1:36:21John Coogan?

  Yeah.

• 1:36:22Speaker 11

  That had the greatest musicians playing around him.

• 1:36:24John Coogan?

  Yeah.

• 1:36:25Speaker 11

  So he said, I'm going to simplify, I'm going to go to a drum machine.

• 1:36:28John Coogan?

  Yeah.

• 1:36:28Speaker 11

  That's bold and brilliant. And he, he was one of the guys that exploded it, you know, that really took it, uh, went all the way.

• 1:36:37John Coogan?

  Yeah. The boldness, that feels like that's, like, when you're thinking about stereo or the drum machine or synthesizers, there's the, an opportunity for boldness on the side of the musician.

• 1:36:49Speaker 11

  Yeah.

• 1:36:49John Coogan?

  Did that same opportunity for boldness exist in the streaming transition, in the social media era, in the AI era?

• 1:36:55Speaker 11

  Okay, let's go to streaming, right? Streaming, you have to go to iTunes first.

• 1:37:00John Coogan?

  Yeah.

• 1:37:01Speaker 11

  That was very bold, because the record industry didn't want to license it. You know, musicians didn't want to sell their songs at a dollar a time.

• 1:37:11John Coogan?

  Yep.

• 1:37:11Speaker 11

  But, but on the other, but out the back door, they were being given away on MP3, you know, uh, all day, right? So what Steve and Eddie had was a really good idea, an elegant way to match their iPod. You know, they had a piece of software that was really elegant, and it worked. And these guys understood the culture. Steve, my first five conversations with Steve Jobs was about John Lennon and Bob Dylan. He really cared and understood, hey, understood, hey, you went out with Joan Baez, right? So he understood the, the culture.

• 1:37:51John Coogan?

  Yeah.

• 1:37:52Speaker 11

  And he understood, he had a feel for it, you know? So that was a big step. And then streaming was another big step. Daniel Ek was a brilliant guy, you know, uh, we came to the market, we had Beats Music and, uh, Interscope and we sold to Apple. And that, and then we started, we worked with the guys up there and, and made, uh, Apple Music.

• 1:38:16John Coogan?

  How do you think streaming changed music production or the decisions that musicians make? I mean, I've heard, at least anecdotal evidence, that, uh, albums got longer or there's more songs because that gives you more shots to go viral in the algorithm.

• 1:38:33Speaker 11

  I think it caused all that with social media.

• 1:38:36John Coogan?

  Okay.

• 1:38:36Speaker 11

  Social media, unfortunately, like a thing like TikTok, uh, it's, it's, in a lot of ways, it's great because it gave artists power and a platform to market themselves, which is what artists want and need and should have. But it also made a lot of artists and record company people chase that.

• 1:38:58John Coogan?

  Sure.

• 1:38:58Speaker 11

  Whatever the latest TikTok thing is, and that can be pretty ridiculous at times, right? So I think that affected music more sonically and creatively than, uh, streaming did, personally. Maybe more songs or whatever, yeah, great, but even that more songs thing came out of SoundCloud.

• 1:39:20John Coogan?

  Yeah.

• 1:39:21Speaker 11

  And TikTok and, and Instagram, just putting stuff out, you know?

• 1:39:27Jordi Hays?

  I was, uh, I was talking to a buddy, uh, of mine in, uh, in Malibu, and he's produced 20, 30 Billboard number ones, like really, really impressive career. And he's, for decades now, received, people will send him demos and he, he always says he likes to listen because he wants to be working with, you know, up and coming talent. And he said, over the last year, it's become harder to judge who's, who's got potential and who doesn't because, because of AI, because anybody can make a song that sounds at least decent and maybe there's a thread of a good idea in there. And so he said, it's just become impossible to understand.

• 1:40:09Jordi Hays?

  And to me, that signals that it's going to become even harder to break into the music business because, and suddenly anyone can make a song, right? Like Suno, shockingly quickly, in about, takes, in my experience, about 10 seconds to make something, uh, and there's patterns you can, if you.

• 1:40:28Speaker 11

  Where do you want to start with this?

• 1:40:30Jordi Hays?

  Yeah, yeah.

• 1:40:30Speaker 11

  You're just covering a lot of ground, okay?

• 1:40:32Jordi Hays?

  Yeah, yeah, but, but I guess my, my main question is like, does it become, these previous technology trends in music, the professionals, the existing professionals got access to them first, they were expensive to adopt, things like that. Now with AI, anybody in the entire world can get access to it. And I'm wondering, does that mean you're going to have a lot more people breaking into the music industry or, or less? Just because competition is like.

• 1:40:57Speaker 11

  Well, do you want to talk about the licensing of AI, the actual use of AI or the production of it? Where, where do you want to, where do you want to start, right? Uh, you know, where, where?

• 1:41:10Jordi Hays?

  Well, well, specifically, what is it, what do you think it means for emerging, uh, talent?

• 1:41:16Speaker 11

  Well, let's use the word talent. If you really have talent, it'll help you. It'll help you create as a tool, you know what I mean? It's like, you, that's the right question, stereo.

• 1:41:27John Coogan?

  Yeah.

• 1:41:27Speaker 11

  It made Sergeant Pepper better.

• 1:41:29John Coogan?

  Yeah.

• 1:41:29Speaker 11

  Okay?

• 1:41:30John Coogan?

  Yeah.

• 1:41:30Speaker 11

  Uh, drum machine made Prince's first album fantastic, you know, or second album, whatever that was. You know, so I think as a tool, it's going to be fabulous, you know? Uh, a lot of these companies that are creating AI music right now are doing so on unlicensed music en masse, like 60 million tracks or something like that. Well, those, in my opinion, those are going to be like the kazaa of this moment. It's gotta get under control to a certain extent. There, there should be, I mean, in this particular case, there, there's going to be some kind of government regulations or there should be something, right?

• 1:42:11John Coogan?

  For proper licensing. If you use these three influences in the creation of this AI song, those three artists get compensated.

• 1:42:18Speaker 11

  That's right. The prompts, the prompts should get paid.

• 1:42:21John Coogan?

  Yes.

• 1:42:21Speaker 11

  Right?

• 1:42:21John Coogan?

  Yeah.

• 1:42:22Speaker 11

  So, but there's a lot of cowboys and they're going to run around doing this stuff, you know, but that's not, I don't think that's where the, it's going to shine, you know, like, can people make songs, you know, easier? Can somebody who was Instagram influencer go out and make a song because they know how to dance and jump around and get people's attention? Possibly, but there's crap now. There'll be crap then, there'll be crap now. Maybe the crap will get more interesting, who knows? But as far as the great artists, you know, Kendrick Lamar, Alicia, uh, Olivia Dean, um, you know, some great people that are C-Mass, some of these young artists that are just, you know, uh, St. Harrison.

• 1:43:05Speaker 11

  Some of these great, great, that kid St. Harrison, there ain't no AI that can sing like that kid.

• 1:43:11John Coogan?

  Yeah.

• 1:43:11Speaker 11

  You know, so something like that, you know, is, um, you know, not, not, they're, they're going to be there, because you, what AI can't do is grow up in a terrible home. AI can't have a broken heart.

• 1:43:28John Coogan?

  Yeah.

• 1:43:28Speaker 11

  You know, so, you know, AI is not going to be Dolly Parton.

• 1:43:32John Coogan?

  Art has always been about stories. You look at the Modern Art Museum and there's the cost of refrain. My kid could have drawn that, but you didn't and there's not providence and there's not a journey and a story behind it.

• 1:43:44Speaker 11

  I'm not afraid of AI. And I met a lot of people that are working on it and none of them truly scare me, you know? Or should scare anyone for that matter. And, um, you know, so I think it's a tool. I think Dre said last week on some interview that it's a tool.

• 1:44:00John Coogan?

  Yeah.

• 1:44:00Speaker 11

  And that's what it is. But the, the licensing, the artist that it's learning off of, the way this product is, look, when the Beatles came out, they were influenced by Rich, by Little Richard.

• 1:44:10John Coogan?

  Yeah.

• 1:44:11Speaker 11

  And, um, and Buddy Holly, right?

• 1:44:14John Coogan?

  Yeah.

• 1:44:14Speaker 11

  They didn't get paid, but now if you're influenced by the Beatles and, um, and Dr. Dre, they will get paid.

• 1:44:21John Coogan?

  And there's.

• 1:44:22Speaker 11

  If the, and I gotta tell you, I, I, everyone's always tough on the labels. But I think, I'm watching the labels closely and I talk to the guys that are running it quite a bit because I've known them all for years.

• 1:44:33John Coogan?

  Yeah.

• 1:44:34Speaker 11

  I think they're handling this problem right in the beginning because they have to, the, the, the things that are out there just randomly licensing, not licensing, ignoring it.

• 1:44:45John Coogan?

  Yeah.

• 1:44:45Speaker 11

  And thinking that they're going to, I, I think that's, I don't, I don't think that works. It most certainly doesn't. I grew up, I grew up for the first 18 years of my life, relying on musical artists.

• 1:44:58John Coogan?

  Yeah.

• 1:44:58Speaker 11

  They changed my life and a lot of people's around me's life. So. That music deserves to be paid.

• 1:45:06John Coogan?

  Yep.

• 1:45:07Speaker 11

  You don't just come in and think, I don't believe, I don't believe that. So I, but I'm an older guy. I, I, you know, I've been around a long time. So some things are good about that. Some things get a little stale.

• 1:45:17John Coogan?

  Yeah.

• 1:45:17Speaker 11

  But I believe that how the labels are handling those particular cases is the right way.

• 1:45:24John Coogan?

  Yeah. Yeah. I mean, the technology should be able to help here. Of course, there needs to be legal precedent. But, uh, I mean, if you look at the way YouTube's handled it, if I upload a video with the Dr. Dre song on it, that's, that, that, that, any money that I earn from that's going to route it automatically.

• 1:45:38Speaker 11

  In the beginning, it wasn't.

• 1:45:39John Coogan?

  Yes, yes, it wasn't, but pretty, but pretty quickly. And why they sold to Google was they had to pay out a bunch of money.

• 1:45:43Speaker 11

  Well, because that's going to happen here too.

• 1:45:45John Coogan?

  Exactly.

• 1:45:46Speaker 11

  You know, but, but.

• 1:45:47John Coogan?

  The money will flow though.

• 1:45:48Speaker 11

  But what, but the chain reaction that this causes unfortunately is the license, the people that are giving out licenses shrink, meaning they shrink what they're going to, they, they lessen what they're going to do. And it's going to cause a lot of this product everybody's excited about to really be dumbed down.

• 1:46:07John Coogan?

  Oh, yeah. Yeah.

• 1:46:09Speaker 11

  All right. So, you know, there are a couple of companies have gotten licensed. I guarantee you, I don't know, but I guarantee you, in my opinion, that those, um, that product would be dumbed down.

• 1:46:21John Coogan?

  Yeah.

• 1:46:22Speaker 11

  You know, so where the thing will shine is when you get producers that learn how to do this.

• 1:46:29John Coogan?

  Yeah.

• 1:46:30Speaker 11

  You know, when, when Stereo first came out in Extreme, there were records, a Beatle record, where the drums were on the right and the vocal was on the left. All right. But then people learn how to.

• 1:46:41John Coogan?

  Blend things together.

• 1:46:42Speaker 11

  So a lot of producers are using AI right now and it's really helping them.

• 1:46:47John Coogan?

  Sure.

• 1:46:47Speaker 11

  I mean, they, what they do is they, they even copy the AI, you know, the, the idea. What's going to break, it'll break a log, it, it breaks a log jam in your head.

• 1:46:58John Coogan?

  Is that the best way that you see artists using AI as, uh, essentially pre-visualization, like what would happen?

• 1:47:05Speaker 11

  That's what I see. The guys that I know, you know, the producers that I know, I talk to them, you know, and I, I, I keep in touch with a lot of producers because I was a producer and I relate in the record business. I'm, I really relate to record producers that had Journey and stuff, you know? So, and when I was at Interscope, it was driven by record producers, you know, Swizz Beatz, Pharrell, Dre, Timbaland, you know, uh, Will.i.am, uh, Paula DeDon, all these guys were at Interscope at one time or another. I hope I didn't leave anybody out. I'm sure I did. I'm sorry. But, um, you know, they, they are learning how to use this. They, it will come from them.

• 1:47:44John Coogan?

  Hmm.

• 1:47:45Speaker 11

  And yeah, they'll be, look, there are, there are artists out now that can barely sing Happy Birthday.

• 1:47:53John Coogan?

  I want to think about that.

• 1:47:54Speaker 11

  Okay. So, so what's the difference if you can barely sing Happy Birthday, if you can't sing Happy Birthday at all? Right? So that, they will always be boring, silly, you know?

• 1:48:06John Coogan?

  Yeah.

• 1:48:07Speaker 11

  Records like that, right? But the great artists and the great producers will maybe create real masterpieces, you know, at, because of this. It'll spark something. So I'm very pro AI. I just think that in the beginning, there's always the Wild West in anything like this. You just got, you've seen it enough. You just go, okay, it'll. But I, I, the guys that are running the labels are really trying to do the right thing here.

• 1:48:34John Coogan?

  Hmm.

• 1:48:35Speaker 11

  And, uh, I think in this particular case, the artist and the labels are aligned.

• 1:48:40John Coogan?

  Yeah. That's a good point.

• 1:48:41Jordi Hays?

  Yeah. What do you think? So, so knowing some of these entrepreneurs that are building in the space, they would push back and say this, and within streaming, if somebody was illegally streaming or pirating a song, they are taking a product that a, that an artist and a label produced, and they're just consuming that product without, without paying. That is objectively wrong. Uh, in this situation, they are training on a bunch of music to create something entirely new off of that. And they would argue that.

• 1:49:16Speaker 11

  That's fair use?

• 1:49:17Jordi Hays?

  They would, they would argue that that's fair use in the way that, like you said, the Beatles, you know, had their own inspiration.

• 1:49:22Speaker 11

  I know, but that, that's, that's the argument, right? Is it fair use or isn't it fair use? The artists and the labels think it's not fair use and somebody's making a lot of money on a new company thinks it is fair use.

• 1:49:32Jordi Hays?

  Yeah, but, but here's, but here's.

• 1:49:34Speaker 11

  That's a very convenient argument.

• 1:49:36Jordi Hays?

  Yeah, yeah. And, and, you know, the, these companies are making money providing a tool. And I'm not, I'm actually not taking a side one way or another, but they're making an art. They make money from selling a tool that lets you create music. And, but the, the, what's also happening is people are creating that music and then they're going back to the labels and they're going back to artists and they're making new music that then gets listened to and monetized the, the, the normal way. So I would, I would argue in some ways that the music industry and artists are, yes, they, their, their music is being used to train models that, that then create other music, but they are also beneficiaries of that.

• 1:50:21Speaker 11

  Yeah, but there are some people that are dead.

• 1:50:23John Coogan?

  Sure.

• 1:50:23Jordi Hays?

  Yeah.

• 1:50:24Speaker 11

  So, you know, Wilson Pickett is not going to go out and make a new record. So if you're learning on Wilson Pickett, I believe that his estate should make money. I believe that if you're learning on, you know, uh, some, some, somebody who's around today, George, not George Harrison, uh, you know, like, uh, uh, any of the artists that are around today, where you're learning from their music, they should get, the prompts should get, uh, paid.

• 1:50:50John Coogan?

  Yeah.

• 1:50:51Speaker 11

  It's going to be hard to monitor, hard to police and all that stuff, but they, but they'll figure that out, you know? I just don't think that, it's, I don't think it's fair use. I don't think it's free.

• 1:50:59John Coogan?

  Yeah.

• 1:50:59Speaker 11

  You know, I just don't.

• 1:51:01John Coogan?

  We just saw this in the social media addiction trials, like big settlements can come decades down the road and be basically benchmarked to revenue and, uh, and the money can flow, but it takes a long time to go through the court system. That's just the way things in America.

• 1:51:16Speaker 11

  So what? You know, uh, it's, so what? But it has to be done right. And, uh, it's a wonderful technology for music. It's fantastic. Um, but, you know, there's got to be deals made.

• 1:51:28John Coogan?

  Yeah, of course, of course. Always. Uh, what do you think about the future of live performances in the age of AI? It feels like it could be a really important proof of humanity, proof of talent. I went to the show. Sure, maybe there was some autotune in the loop, but I watched them perform. And if they can perform to a certain level, that gives me more confidence in the rest of their library.

• 1:51:52Speaker 11

  I happen to be, uh, fortunate. I have a really good friend in that business named Michael Rapinoe. He's just, he's the, he's the CEO of Live Nation. I, I learned a lot about the live business from him. Plus I grew up, my friends playing live all the time, you know? So I, I think live is live, you know? Do, do you want to see somebody performing live, spilling their guts on the stage? Or do you want to see, um, a, um, a hologram or something? You know, I don't know. I'd rather see the person live because they're just more exciting. So I don't know. I don't think there's any problem with it. I don't think there's, I don't think it crosses. I just don't see it, you know? I don't see it. I don't know the future. I have no idea. I'm not going to be here anyway. So, uh, but, but it's, um, you know, I don't know. I have no idea.

• 1:52:37John Coogan?

  I would just expect it to, to, to grow. I don't know. It, it feels like the, the era's tour was such a moment. Uh, and there's these certain moments that happen in American culture where shelling points, everyone comes together around a certain thing.

• 1:52:51Speaker 11

  Like, you know, it, to me, it's simple.

• 1:52:53John Coogan?

  Yeah.

• 1:52:53Speaker 11

  You've got a new technology.

• 1:52:54John Coogan?

  Yeah.

• 1:52:55Speaker 11

  It's going to be great. It is great and it's going to be even better. People are going to use it.

• 1:52:59John Coogan?

  Yeah.

• 1:52:59Speaker 11

  But there's going to be licenses and there's going to be, people get paid for it. And then the great talent and the great artists are going to show the world how to use it.

• 1:53:08John Coogan?

  Yeah.

• 1:53:09Speaker 11

  It's that simple to me.

• 1:53:11John Coogan?

  Yeah.

• 1:53:11Speaker 11

  It happens every time.

• 1:53:13John Coogan?

  Yeah.

• 1:53:13Speaker 11

  You know? So I'm not, I, I, it all comes down to what we talked about first, which is, which is, what's great about this is it's teaching young people. That's where multidisciplinary behavior comes in. This is technology and you're creative, right? So when you really understand technology and you really understand the creative, you're going to really do well.

• 1:53:40John Coogan?

  Yeah.

• 1:53:40Speaker 11

  So, but you, so you shouldn't be siloed in school.

• 1:53:43John Coogan?

  Yeah.

• 1:53:44Speaker 11

  You shouldn't go to a school where all you do is play the guitar all day. You know what I mean? It's just, to me, that doesn't work. It, uh, I mean, Juilliard's a nice place and I'm glad it exists, but, or Berkeley, whatever, you know? But it's not, it's not where I see the world going. And not if anybody cares, but me personally, I'm on this show. At least you two guys care. So.

• 1:54:06John Coogan?

  Do you think AI can help bridge that original gap that we were talking about? When I think about, uh, what it takes for a creative person to build a hardware product, for example, there's a lot of technical hurdles that can now be broken down and explained.

• 1:54:21Speaker 11

  Before there were things to break it down.

• 1:54:23John Coogan?

  Yeah.

• 1:54:23Speaker 11

  Let's put it this way. Dre and I had a record company.

• 1:54:26John Coogan?

  Yeah.

• 1:54:26Speaker 11

  Okay. We're creative people, both record producers. We built the biggest headphone company in the world. That's hardware. Okay?

• 1:54:33John Coogan?

  Yeah.

• 1:54:34Speaker 11

  And the reason why it's hard because it's goddamn hard.

• 1:54:36John Coogan?

  Yep.

• 1:54:36Speaker 11

  Okay. That's why not, not everybody does it. So we did it.

• 1:54:39John Coogan?

  Yeah.

• 1:54:40Speaker 11

  Right? We're creative guys that built a piece of hardware. That's why we started the school.

• 1:54:44John Coogan?

  Yeah.

• 1:54:44Speaker 11

  It, it's all needs to be working together.

• 1:54:49John Coogan?

  Yeah.

• 1:54:49Speaker 11

  You know, and, um, we, we built the number one, Beats was the number one headphone in 50 countries when we sold to Apple.

• 1:54:57John Coogan?

  Yeah.

• 1:54:58Speaker 11

  So we did it. And, um, because we live in a multidisciplinary world. We were both recording engineers, me and Dre.

• 1:55:08John Coogan?

  Yeah.

• 1:55:09Speaker 11

  And so we come from the non-wall background, you know? And, um, so that's why we built a school.

• 1:55:18John Coogan?

  Yeah.

• 1:55:19Speaker 11

  It's, that's it. And, you know, it's, uh, but when I go, when you go look at these, these, most companies right now.

• 1:55:29Speaker 11

  Technology, engineering, design.

• 1:55:32John Coogan?

  Yep.

• 1:55:34Speaker 11

  There's a lack of communication and a lack of understanding.

• 1:55:38John Coogan?

  Yeah.

• 1:55:38Speaker 11

  Again, I asked the question again in case somebody just tuned in.

• 1:55:41John Coogan?

  Yeah.

• 1:55:42Speaker 11

  Why, why can software companies not build really successful consumer products?

• 1:55:50John Coogan?

  Yeah.

• 1:55:50Speaker 11

  There has to be an, I don't have the answer, but you guys are really smart. You talk to everybody in the world. I don't know why.

• 1:55:57John Coogan?

  Yeah, it's tough.

• 1:55:58Speaker 11

  You know, but there has to be something at the core of what's going on that challenges that. I mean, no one can say, no, he's wrong. No, I'm right.

• 1:56:07John Coogan?

  No.

• 1:56:08Jordi Hays?

  Yeah, well, you know, one of the things you brought up, you brought up Meta. You brought up Meta. One of the, I think one of the reasons that's been successful is they didn't try to reinvent too many things. They just made a good looking pair of glasses that also had a camera in it. And that was enough, that's been enough.

• 1:56:23Speaker 11

  They sold 2 million.

• 1:56:24John Coogan?

  Yeah.

• 1:56:24Speaker 11

  They didn't sell 20 million. We sold 2 million headphones in Brooklyn, you know? It's not a really, it's not a massively successful.

• 1:56:31John Coogan?

  Also acquired Oculus to get the, to get that whole project started.

• 1:56:34Speaker 11

  By the way, in fairness, I have a pair.

• 1:56:36Jordi Hays?

  I would argue that's different.

• 1:56:37Speaker 11

  I have a pair and I enjoy using it. It's fun, but that does not a story make yet.

• 1:56:44John Coogan?

  Yeah.

• 1:56:44Speaker 11

  They make, now I know who they hired, that the head of the hardware division and he's really good. So, but are there people at that company that can really communicate and empower him? And that type of stuff, I don't know, right? I don't know. Meta is a great company. Mark Zuckerberg is brilliant.

• 1:57:03John Coogan?

  Yeah.

• 1:57:04Speaker 11

  But do I know about that? I don't know. They did, they've done a good job at getting that product out.

• 1:57:10Jordi Hays?

  Yeah. Do you, is, is, uh, I feel like one of the big, the big lessons that people in the school should, should hopefully, should hopefully be imprinted on their minds is that you can be wildly successful in business without creating anything that's exactly new, right? Like you, you guys didn't create, you created desire and you created an amazing product, but you didn't create the headphone. And I think that when a lot of people think about entrepreneurship and creativity and business, they think, I need to come up with some totally novel idea, right?

• 1:57:47Speaker 11

  Well, it starts out by, I don't think I'm Steve Jobs, okay?

• 1:57:52Jordi Hays?

  But even Steve didn't, he didn't create the, he didn't create the phone.

• 1:57:55Speaker 11

  No, but he, he had a much bolder attitude towards life than I did. He's much smarter than I am, right? Somebody asked me, what's the difference between you and Steve Jobs? They're very simply smarter than me when we were hanging out together, right? So, um, but no, you don't have to invent something new. I mean, headphones weren't new, but the attitude of headphone was new.

• 1:58:14John Coogan?

  Yeah.

• 1:58:15Speaker 11

  Bose was out there saying, buy my headphone for $300 and we're gonna help you sleep. We were like, this is taking candy from a baby, right?

• 1:58:25John Coogan?

  Yeah.

• 1:58:25Speaker 11

  We are not gonna help you sleep.

• 1:58:27John Coogan?

  Yeah.

• 1:58:28Speaker 11

  You know, we are gonna rock your head.

• 1:58:30John Coogan?

  The ads were silence, not music. It's the opposite of music.

• 1:58:32Speaker 11

  Exactly. So we had a real edge there.

• 1:58:35John Coogan?

  Yeah.

• 1:58:35Speaker 11

  And they all looked like medical equipment.

• 1:58:37John Coogan?

  Yeah.

• 1:58:38Speaker 11

  So your job as an entrepreneur is to find that hole in the market, right?

• 1:58:42John Coogan?

  Yeah.

• 1:58:43Speaker 11

  Where's there a hole? We knew there was a hole there because Dre, first of all, most computers had their speakers facing the table.

• 1:58:50John Coogan?

  Yeah.

• 1:58:51Speaker 11

  So that was like, okay, great, let's face them up.

• 1:58:54John Coogan?

  Yeah.

• 1:58:54Speaker 11

  You know, we're geniuses, let's get it, you know, right? So.

• 1:58:58Jordi Hays?

  No, there's some, there's so many times in, when you're looking at different categories, specifically with, I, I find it with consumer products where you're like, is there like a law that says that it has to be done this way? Uh, and oftentimes you do a little bit of research and you realize.

• 1:59:14Speaker 11

  We're going back to the, to understanding each other, right?

• 1:59:19John Coogan?

  Yeah.

• 1:59:20Speaker 11

  Computers, like I went to a couple of computer companies, not Apple, right? And I witnessed this firsthand to where engineering, audio, the audio budget in a speed, in a computer at the time was 50 cents.

• 1:59:34John Coogan?

  Wow.

• 1:59:35Speaker 11

  Okay?

• 1:59:36John Coogan?

  Wow.

• 1:59:37Speaker 11

  Right? So you wanna know why? And music was being played through it.

• 1:59:41John Coogan?

  Yeah.

• 1:59:41Jordi Hays?

  Yeah.

• 1:59:41Speaker 11

  Guess what? That's not enough.

• 1:59:43Jordi Hays?

  Yeah.

• 1:59:44Speaker 11

  You know? So, but that's where the breakdown is.

• 1:59:47John Coogan?

  Yeah.

• 1:59:48Speaker 11

  Because design and engineering clash.

• 1:59:52John Coogan?

  Yeah.

• 1:59:53Speaker 11

  And that's where, I keep saying it over and over again, but it's true. That's where our school.

• 1:59:58John Coogan?

  Yeah.

• 1:59:59Speaker 11

  Comes in to help training people that are gonna, that are gonna become the new engineers and the new designers and the new entrepreneurs to understand the why of each other's discipline. You know, it sounds like kumbaya, but it's not. You know, it's real.

• 2:00:14John Coogan?

  Yeah. Was there anything else you looked at in terms of product ideas, business ideas before settling on headphones or was it straight?

• 2:00:22Speaker 11

  Well, it came out of a real frustration of the record business because record business, again, the record business at a time was really cool and, you know, music was the right thing to do and all that. But when, when, when I met Steve and those guys, cool had moved the technology and I felt it. You know, I felt, I felt the shift and I said, okay. The first guy that was really cool with technology was Marita from Sony, the original founder of Sony. He had the Walkman, you know? He really got it. Olga, who replaced him, really got it. They, he bought Columbia Pictures and Columbia Records.

• 2:01:02John Coogan?

  That's right.

• 2:01:03Speaker 11

  Right? And then they kinda screwed it up because they got, and that gave Steve, that gave Apple the opening.

• 2:01:08John Coogan?

  Sure.

• 2:01:09Speaker 11

  To go take that idea.

• 2:01:11John Coogan?

  Yeah.

• 2:01:12Speaker 11

  Which Steve has said many times publicly.

• 2:01:14John Coogan?

  Yeah.

• 2:01:14Speaker 11

  And, um, so when I saw that, I said, we have to learn a new trick. We have to move, I believe companies need to move laterally. I do. I felt the, I felt record companies especially needed to move laterally. That's why we created Beats and Beats Music inside of Interscope. We did it at the company. So we built a company in Beats that was bigger than Interscope in six years, right? So obviously tech and design and creativity all belongs in the same box. It's all just moving your company lateral. Like we have a company called Complex right now.

• 2:01:57Speaker 11

  Uh, and what we're trying to do there, we brought back Mark Echo, we have Aaron Levant, my son Jamie's there. And we're trying, we have a real, a lot of really good people and we're trying to mix disciplines in it. And we are creating an AI product alongside of it that will blend all these things together and, um, not all of them, but the things that we have together because we're firm believers in that. You, you know, the record industry needs to move laterally. They need to own the enterprise of AI, not just license to everyone. That's, you know.

• 2:02:34John Coogan?

  Oh yeah, interesting.

• 2:02:35Speaker 11

  They should own the enterprise. Why not? You know, it is no reason why not. Instead of licensing to everyone.

• 2:02:41John Coogan?

  Yeah.

• 2:02:42Speaker 11

  Own the enterprise yourself.

• 2:02:44John Coogan?

  Yeah.

• 2:02:44Speaker 11

  Right? We own Beats.

• 2:02:47John Coogan?

  Yeah. Why is there so much historical sort of disaggregation in the music industry? Like the, the actual relationship between the artists and the end consumer? It's always been intermediated and it feels like that's been a problem.

• 2:03:00Speaker 11

  It's insane and it's ridiculous, okay? All artists want is to be able to communicate with their audience.

• 2:03:06John Coogan?

  Yeah.

• 2:03:06Speaker 11

  And ask me why Spotify and Apple Music don't have social.

• 2:03:15John Coogan?

  Yeah.

• 2:03:16Speaker 11

  Uh, I know why Apple Music doesn't and I don't know why Spotify doesn't, but that's why I said on an interview once recently that streaming is, is minutes away from being obsolete. What I meant by that is unless they adapt to what artists really want, the artists are very resourceful. Right now they gotta go to Instagram, TikTok. You know, it's like, it's like a silly game. And, um, that has to be fixed. That has to be fixed quickly because, and the labels who have all this historic music need to be in the loop. They, whether they like it or not, they are a tech company and they have to adjust to

• 2:04:01Speaker 11

  that. And if they don't.

• 2:04:05Speaker 11

  I believe it's not going to be great for them.

• 2:04:08John Coogan?

  Yeah. Yeah, the Spotify story is interesting. I mean, Sean Parker, obviously involved in both Facebook and Spotify. And so I think they had this like delicate truce. Because if you remember in the early days of Spotify, everything you'd listen to would be shared on Facebook. And that was a huge growth driver.

• 2:04:25Speaker 11

  But that's not why Spotify is not social. I don't believe that. That's why Apple's not social because Apple Music was they don't. Look, when we were there, we wanted to buy musically.

• 2:04:35John Coogan?

  Oh, yeah.

• 2:04:36Speaker 11

  Whoa.

• 2:04:38John Coogan?

  That's crazy.

• 2:04:39Speaker 11

  We brought those guys up there twice, but Apple doesn't do social and they shouldn't do social. I get why they shouldn't.

• 2:04:46John Coogan?

  Yeah.

• 2:04:46Speaker 11

  I was on the tail. I was on the tail wagging the dog. You know what I mean?

• 2:04:50John Coogan?

  Yeah.

• 2:04:51Speaker 11

  Um, I was on the tail. So, you know, I understand why they didn't do it.

• 2:04:55John Coogan?

  Yeah.

• 2:04:56Speaker 11

  But we, Trent Reznor and I instinctively knew, especially Trent, that we needed social.

• 2:05:04John Coogan?

  Yeah.

• 2:05:05Speaker 11

  And it's going to be limited without that. So, you know. Look, Apple, I, so far out of all the companies I found, they're still the most interesting, you know, because they still have that DNA in them. They just said, we're not gonna, we don't do social. Fine. They don't. So that was not a good fit, you know, so. But that's cool. But it doesn't mean that music doesn't need it. Right now, you're not giving the artists what they want.

• 2:05:36John Coogan?

  Yeah.

• 2:05:36Speaker 11

  And the pay structure in streaming is all screwed up. So if you're married, I see you're married, you got a ring on your finger, so maybe you have kids. If you have two or three kids, you have the family plan.

• 2:05:47John Coogan?

  Oh, yeah.

• 2:05:49Speaker 11

  If you listen to, what's your favorite music?

• 2:05:53Jordi Hays?

  Uh, my favorite artist is Yeet.

• 2:05:56Speaker 11

  Yeet? Oh, great. Okay. So you listen to that and your kids listen to?

• 2:06:02Jordi Hays?

  Elmo.

• 2:06:03Speaker 11

  Or their babies. Okay. Well, let's say they listen to Taylor Swift and Kendrick Lamar. And you listen to Fleetwood Mac and Madonna, right?

• 2:06:13John Coogan?

  I'm paying, but the kids are listening disproportionately.

• 2:06:15Speaker 11

  Yes, they've been on the button all day. So guess who gets paid? You pay the bill, but.

• 2:06:21Jordi Hays?

  Crazy.

• 2:06:22Speaker 11

  But Fleetwood Mac doesn't get anything.

• 2:06:23Jordi Hays?

  Elmo's raking it in.

• 2:06:25Speaker 11

  Yeah, exactly. Exactly. But that's, that's the structure. So streaming is flawed and not complete. But Daniel's brilliant. Alex is really talented. Those guys at Spotify. So they're going to figure a lot out. They may be thinking a whole other paradigm that I don't even understand, right? So, but someone who helped bring a streaming service to light, I can tell you that they're all missing social.

• 2:06:55John Coogan?

  Yeah.

• 2:06:55Speaker 11

  Period. And that's why

• 2:07:01Speaker 11

  I have a crew of guys and girls that I work with. We're looking at something right now that's really interesting. Uh, we're doing it with one of the, one of the main companies. And we have an idea that we believe is unique and good and great for the artist and great for the labels. And that's what we're gonna do.

• 2:07:19Jordi Hays?

  Yeah, we have, uh, we've had some guys from Spotify on and I think that one of the interactions I was most excited about that they've been working on and working towards is making sure that the people that are listening to artists the most get access to the concert tickets, right? Because an artist doesn't necessarily benefit if they.

• 2:07:37Speaker 11

  Yeah, but that's, that's self-serving, you know? I mean, I get it. But the artists should be doing that.

• 2:07:43John Coogan?

  Sure.

• 2:07:43Jordi Hays?

  Yeah.

• 2:07:44Speaker 11

  Yeah. Again, you don't need third parties to do a lot of this stuff, you know? Why, why do the labels need third parties to deliver their music? I'll tell you why. They don't. Right? But they do, right? So that all should evolve with the artists in the front of the paradigm, you know, making the money and doing great and communicating. So, um.

• 2:08:13John Coogan?

  Yeah, they're very differently in Hollywood with Disney Plus and Hulu.

• 2:08:18Speaker 11

  Well, that, that, well, hang on.

• 2:08:20John Coogan?

  No?

• 2:08:21Speaker 11

  Yes and no, and I'll tell you why. Because when Netflix came to town, they came to town with a big checkbook.

• 2:08:28John Coogan?

  Yeah.

• 2:08:28Speaker 11

  And unfortunately, all these companies are public. Now, this, I'm going to make this official. This is my opinion, okay? But they all licensed them their music, at least most of them did. Why? Because they got big checks and helped make their numbers. Well, guess what? They created a monster, right? And now they're trying to catch up, right? So music is the same thing. They license their music to Spotify, Apple Music and Amazon. Well, Spotify is worth more than all the labels together.

• 2:09:01John Coogan?

  Yeah.

• 2:09:02Speaker 11

  Guess, guess how much IP they own? Zero. Somebody's podcast, maybe, or something. You know, maybe.

• 2:09:09Jordi Hays?

  Joe Rogan.

• 2:09:10Speaker 11

  I don't know, but.

• 2:09:11John Coogan?

  I don't even think they got that.

• 2:09:12Speaker 11

  But that's, but that's the point. So the movie business didn't get it. They, they got it late. At least they got it.

• 2:09:18John Coogan?

  Yep.

• 2:09:18Speaker 11

  And I think that's going to happen in music. I think the music companies are, are going to be more involved. And AI is the opening to do it. AI is the road to, that doesn't mean Spotify is not, but Spotify is going to have to morph as well. Okay? Again, just no ride goes forever. When I was a kid, not a kid, I'm sorry. I wasn't a kid. It was 2002.

• 2:09:44Jordi Hays?

  Just a spring chicken.

• 2:09:46Speaker 11

  I was nowhere near a kid in 2002. But when I saw piracy, I went and met with three tech companies. And one of the tech companies, very high up guy at Intel, said to me, Jimmy, this is a I started talking about the recording studio and the people that are suffering. And, you know, it's not the big stars, it's the kids in the studios. And he said, what a fabulous story. He said, Jimmy, but not every industry was made to last forever. That was powerful, right? I said, he's right.

• 2:10:17Jordi Hays?

  Sorry, this music thing had a good run, but it's over.

• 2:10:21Speaker 11

  But it's not music. It's the business of music, what that looks like, right? So I, I carried that with me.

• 2:10:28John Coogan?

  Yeah.

• 2:10:29Speaker 11

  And then when I met Steve and Eddie after that, I said, holy shit, these guys, they're the next step, right? So there is a next step now and Spotify may grab it. You know, they have all the tools available and the money, the capital and everything. So they could recreate their business all the time. And you got a guy like Alex running it, who's really, really talented. The people at Apple are really talented. You got Oliver and that team over there. They're all really good. So maybe they'll morph the company into something that it needs to be, or maybe the labels will figure it out. And they'll do more of what this new model needs to be. But to have, to be just a licensor of music, to me, first of all, is boring.

• 2:11:16Speaker 11

  Second of all, has nothing to do with any other discipline in the world. It doesn't.

• 2:11:21John Coogan?

  Yeah.

• 2:11:21Speaker 11

  And, and you need to, to have a proper company today, you have to

• 2:11:29Speaker 11

  have blend of disciplines inside your company, proven by two great, great people. Marita from Sony and Steve Jobs at Apple, period.

• 2:11:40John Coogan?

  Yeah.

• 2:11:41Speaker 11

  They got it top to bottom and they set the tone. Who out there doesn't want to be Steve Jobs, right? They, you know, they, everybody, every, he's the new Steve Jobs, this is the old Steve Jobs, you know? He's not Steve Jobs, he is Steve Jobs. But.

• 2:11:54Jordi Hays?

  Yeah, and it's saying something I've never, everyone wants to be in, yet I've never seen someone and thought, damn, they're the new Steve Jobs.

• 2:12:02Speaker 11

  Well, because they're, they're missing what Steve was. Steve was the ultimate. He knew it. He knew the goal was where technology and the liberal arts meet. And there's nothing more evident than that than in AI.

• 2:12:17John Coogan?

  Yeah.

• 2:12:18Speaker 11

  You know, so.

• 2:12:20John Coogan?

  Do you think he would have liked AI?

• 2:12:22Speaker 11

  I don't know. I, I can't, I never tried. I was a friend of mine. He has an incredible wife, Lorraine Powell Jobs, who's an incredible human being.

• 2:12:29John Coogan?

  Yeah.

• 2:12:30Speaker 11

  And Johnny Ive is incredible people. Uh, I can't speak for them. For Steve, he was his own guy, but, uh, you know.

• 2:12:39John Coogan?

  Yeah. Yeah. A friend of the show was trying to compare AI messaging to the launch of GarageBand and democratization of creative tools. And I thought, I, I, I thought there were some good points there.

• 2:12:53Speaker 11

  Although he didn't like streaming.

• 2:12:55John Coogan?

  Yeah.

• 2:12:56Speaker 11

  He was very public about that. But who knows what, maybe he was right.

• 2:13:00John Coogan?

  You mentioned the tail wagging the dog at Apple. If you're a tail, should you try and wag the dog? Is that advice that you would give to someone who works in a large organization if they're interdisciplinary?

• 2:13:12Speaker 11

  Well, what I was saying, what I was saying is that, look, there's no, there's no hiding it. Big companies, music, outside of music companies, you, you, you, nobody wants a tail wagging the dog.

• 2:13:24John Coogan?

  But is it a fool's errand to try?

• 2:13:26Speaker 11

  Um.

• 2:13:30Speaker 11

  I, I don't know. I don't know. I don't know. But, but I always use Apple an example because I think it's run really well.

• 2:13:39John Coogan?

  Yeah.

• 2:13:40Speaker 11

  They blend it as well as you could blend it. You know, Steve was a big music guy and so is Eddie. So they do it really well. But, you know, it's, I don't, I think, I think the record company should do it. I really do. I, I, I don't get it. I, I think that they should do it. They should take it on themselves. And Spotify is a music company. They, they can do it. Live Nation.

• 2:14:05Jordi Hays?

  Isn't there some interesting positioning that the record companies, at least if they banded together, could work with the artists to say, hey, you have an artist, if you work with, if you, if you subscribe to Apple Music or Spotify, Spotify and Apple Music are taking a big cut. If you work with us, a lot more revenue is actually going to the artists. Is that, is that like how you position it?

• 2:14:25Speaker 11

  I don't, I don't, I don't, I don't know. I don't know if that's, if that's right. I just, because it's, it's, it's a hard bell to unring.

• 2:14:32John Coogan?

  Yeah.

• 2:14:33Speaker 11

  I'm, I'm gonna look at it streaming. That happened already. I don't think the labels are going to start streaming services. You know, not in any time short, in the next few years, anyway. But I do think there could be a new AI business.

• 2:14:45John Coogan?

  Yeah.

• 2:14:46Speaker 11

  And that's where the opportunity lies. And you have Spotify, you have the labels, you have the artists. So there's something in there that needs to evolve out of this

• 2:15:00Speaker 11

  that makes more sense, you know? And I, I see, I see it all together. But I always have. That's why, that's why we started the school we started. It's just, all goes back to that. It's just the way people think. That's how we think.

• 2:15:13John Coogan?

  Yeah. I, I mean, obviously the answer is probably both, but I would, it'd be interesting to see if you were more optimistic about uh, the entrepreneurship that comes out of your school or the transformation within, within industry.

• 2:15:26Speaker 11

  The school was built to transform inside the industry.

• 2:15:29John Coogan?

  Okay.

• 2:15:29Speaker 11

  Yeah, it was, it was built for jobs. It turned into an entrepreneurial place.

• 2:15:33John Coogan?

  Of course.

• 2:15:33Speaker 11

  You know, uh, I guess we caught that wave, you know, everybody wanting to be like one of these guys, Zuckerberg or something. But it was made to help communication inside Apple, Google, all these giant companies that are taking over the entertainment business, literally. So it's not going to happen in my lifetime, but we wanted to build as many people as possible to infiltrate and help make that

• 2:16:03Speaker 11

  all one thing, rather than have to be a tail wagging a dog, you know? I mean, look, Intel's buying Paramount and Warner, right? I mean, fundamentally, I mean, and David Ellison is terrific. You know, he's a really smart and, and, and understands where these two things cross. So hopefully there'll be some great stuff there.

• 2:16:21John Coogan?

  Yeah, it's gonna be exciting. Well, thank you so much for coming on the show.

• 2:16:25Speaker 11

  Hey, you're welcome.

• 2:16:25John Coogan?

  An honor. An honor and pleasure.

• 2:16:27Speaker 11

  It was fun.

• 2:16:28Jordi Hays?

  Let's do it again as we're making more of these plays.

• 2:16:30Speaker 11

  Oh, I don't know. But it was, you're very far from my house. Maybe you come to my house, we can do it.

• 2:16:37John Coogan?

  Yeah, we'll do it over there.

• 2:16:38Speaker 11

  But anyway, thanks. Oh, there's a big world behind me. I see that. Nice set.

• 2:16:43John Coogan?

  Yeah, thank you.

• 2:16:44Speaker 11

  The lighting and so.

• 2:16:45Jordi Hays?

  We reinvent television.

• 2:16:47John Coogan?

  Well, uh, we will see you tomorrow at 11 AM sharp. Have a great rest of your day and goodbye.

• 2:16:54Jordi Hays?

  Cheers.

• 2:16:54Speaker 11

  Thank you.

• 2:16:55John Coogan?

  They'll fade us out.