Anthropic Files for IPO, Samsung Spyware Concerns | Diet TBPN

Diet TBPN delivers the best of today’s TBPN episode in 30 minutes. TBPN is a live tech talk show hosted by John Coogan and Jordi Hays, streaming weekdays 11–2 PT on X and YouTube, with each episode posted to podcast platforms right after. Described by The New York Times as “Silicon Valley’s newest obsession,” the show has recently featured Mark Zuckerberg, Sam Altman, Mark Cuban, and Satya Nadella. TBPN is made possible by: Ramp - https://ramp.com Public - https://public.com Cisco - https://www.cisco.com Console - https://www.console.com CrowdStrike - https://www.crowdstrike.com Figma - https://www.figma.com MongoDB - https://www.mongodb.com NYSE - https://www.nyse.com Railway - https://railway.com Shopify - https://www.shopify.com/ Follow TBPN: https://TBPN.com https://x.com/tbpn https://open.spotify.com/show/2L6WMqY3GUPCGBD0dX6p00?si=674252d53acf4231 https://podcasts.apple.com/us/podcast/technology-brothers/id1772360235 https://www.youtube.com/@TBPNLive

• 0:01Speaker 00

  This is Anthropic IPO. It's the most important story of the day after the amount of days till Christmas. Let's count it down. We're very close. Fifty-nine days till Christmas. Do you think Anthropic is... Okay. Peter Thiel is fifty-nine years old. There you go. Yeah, it's interesting. Anthropic seems to be sending us...

• 0:24Speaker 01

  Incredible innovation at TVPN that we tie random fun facts to the Christmas countdown.

• 0:30Speaker 00

  I also like that. Just to clarify, it's not that Peter Thiel is fifty-nine years old today, right?

• 0:37Speaker 01

  No, he's just fifty-nine.

• 0:38Speaker 02

  I think his birthday was two weeks ago.

• 0:39Speaker 00

  I think his birthday was two weeks ago.

• 0:40Speaker 01

  He just happens to be fifty-nine.

• 0:42Speaker 00

  It just happens to be that age, which is a fun fact.

• 0:43Speaker 01

  Which is the number of days.

• 0:44Speaker 00

  Because over the weekend, I was thinking about, we did Jeff Bezos' sixty-two on the sixty-two days till Christmas. And I was like, was it Jeff Bezos' birthday? Or was that just a random fun fact? And it appears to be just a random fun fact. Anyway, so do you think Anthropic with, by dropping the S1 on exactly fifty-nine days till Christmas is trying to send like some sort of subliminal message, some numerology?

• 1:02Speaker 01

  What would that message be?

• 1:03Speaker 00

  Oh, just that it's fifty-nine days, so you should go into the S1, Ctrl+F for the number fifty-nine to find like the hidden meaning of the S1.

• 1:11Speaker 01

  Or go to page fifty-nine.

• 1:12Speaker 00

  Go to page fifty-nine. Maybe you should.

• 1:15Speaker 01

  Have you been yet?

• 1:15Speaker 00

  Oh, I've been to page fifty-nine. I think I know exactly what they're trying to say with this. It's fifty-nine days till Christmas. Open up the S1, Ctrl+F, hit fifty-nine, page down to page fifty-nine. What do you see? It says, "We may not have the ability to raise the funds necessary to repay the principal and accrued interest of our outstanding..." Yeah, it's just a random page. I don't think there's anything going on. Anyway, there are a bunch of interesting facts. You gotta dig through it. The S1 is huge, obviously. I mean, it's a massive company, raising a massive amount of money. The exact amount of money that they're raising is not, has not been listed yet. There's sort of speculation in the Wall Street Journal, around a hundred billion dollars raised.

• 1:59Speaker 00

  Bloomberg contextualized the IPO filing as Anthropic files for IPO in global race to raise cash for AI. The interesting thing is that Anthropic has a lot of cash. They also have a lot of revenue. Sixty-seven point two billion in annualized revenue. That's up forty-five percent quarter-on-quarter at this scale. Incredible. Super, super, super fast growth. And full Q3 numbers aren't in the initial S1, but that, that number that was rumored from the Anthropic Investor Day is now in the actual S1. Cash on hand, one hundred and thirty-one point seven billion dollars. That's a lot of cash.

• 2:40Speaker 00

  And they've been super capital efficient. People are saying it might be the most capital efficient company in history. They, of course, brought in one hundred and ten point eight billion in first half financing.

• 2:51Speaker 01

  Yeah, it's one of the most remarkable stories in business history, period.

• 2:55Speaker 00

  Yeah.

• 2:55Speaker 01

  And the S1 came out, I think in some ways, like the leak around the S1 that had happened maybe a week or two ago around this like, and the number that everyone fixated on was this eighty billion dollar loss, this accounting charge. I think people now have had an opportunity to dig in here. And the funny thing is the nature of having access to Claude and ChatGPT and other agents is people can process the S1 a lot faster. So we're already getting like a lot of, it used to be like an S1 would release and the VCs would have twelve hours. Well, they've had twelve hours to pull out interesting stuff. Now it's like you, it's all coming out in real time. And it's, yeah, totally remarkable. I think it's amazing for the AI trade overall.

• 3:36Speaker 00

  It feels like a beat. It feels like this beat expectations.

• 3:40Speaker 01

  Totally.

• 3:40Speaker 00

  It didn't like surprise, oh, they're actually doing a hundred billion in revenue or something. But I mean, really, really solid. People haven't found anything that's like, oh, I didn't understand that the business was actually shaped a very different way or something like this, this sort of meets expectations.

• 3:56Speaker 01

  High-yield Harry said, "You know it's a decent S1 when Ed Zitron hasn't tweeted anything out yet."

• 4:01Speaker 00

  Yeah, I think this is a beat on the expectations of the S1.

• 4:04Speaker 01

  Well, he's doing the old Command F, Command F. He has the Command F, right?

• 4:07Speaker 00

  Command F, bad. Command F, sad. Command F, problem. The Nasdaq is up one percent and it feels like the AI trade is starting to like get put back on. Obviously, there's been a lot of, a lot of selling in the further risk on, the further out on the risk curve assets in the AI trade. Some of the NeoCloud's down a lot. But if you look into what Anthropic's doing, it seems like they're going to be buying a lot of compute from NeoClouds. Like, there's this interesting thing where they raised one hundred and ten billion dollars. They have one hundred and thirty billion dollars in cash. How much did they spend in the first half of the year on capex?

• 4:47Speaker 00

  This is the company that wants to serve AI at scale. And how much did they actually spend buying computers, building computers that they own? Four hundred and eighty-two million dollars. Less than half a billion dollars. I mean, now, of course, over time, they'll build more, they'll do all sorts of stuff.

• 5:03Speaker 01

  Yeah, they've been renting computers.

• 5:04Speaker 00

  At least in the first, at least in the first half of the year, the strategy has been to rent. And then also, they have a pretty huge amount of backlog with the hyperscalers. And it looks like this scary number, I think it's like six hundred and ninety billion dollars of commitments. Really not that much, ten X of revenue currently, if they keep scaling.

• 5:24Speaker 01

  But over a multi-year period.

• 5:26Speaker 00

  Yeah, yeah. So there's, there's Google, Google, Amazon and Microsoft are all in the forty to a hundred and thirty billion dollar range. I can pull up the exact numbers, but the, but the contracts are how much that they have to spend on compute through 2033. Some of them go all the way out to 2036, which is really, really, really far. So they have a lot of time to actually work through that. So Google Cloud, their, their commitment is a hundred and fourteen and a half billion dollars. And that's minimum cloud spending through July of 2033. So they're just renting and it's over a long period of time. Is there any scenario where they don't have the demand to actually parcel out twenty billion of spend

• 6:12Speaker 00

  over the next six years, seven years? It seems like they're in a good position there. AWS is a hundred and ten billion and that's stretched out to 2036. And then Azure is only forty-five billion and that's minimum cloud spending through 2033. Now, they do have a hundred and twenty billion with SpaceX AI. That's up two, that's the maximum. And then N scale is at forty-five, Lambda's at forty-two billion and Broadcom's at a hundred and sixty-one billion for a total of six hundred and thirty-seven billion in spending commitments. But again, over five, six, maybe eight years in some of these scenarios. So pretty healthy there. The other interesting surprises, I mean, people are pretty happy about the margins.

• 6:54Speaker 00

  So compute cost as a function of revenue, they were at seventy-two percent. You can think about this as like cost of goods. Seventy-two percent of every dollar they made was getting eaten up by compute costs. That's down to forty-eight percent compute costs divided by revenue. So that's rapidly improving efficiency quarter-on-quarter. Then the adjusted operating margin gained thirty-two percentage points quarter-on-quarter for almost a billion dollars in GAAP profit. They went from negative thirteen percent to nineteen percent operating margin. And then the big number that is, that people are excited about is the big customers. So they have, I think, over a thousand customers spending over a million dollars, something like that. And then...

• 7:37Speaker 01

  Over ten thousand spending over a hundred K.

• 7:39Speaker 00

  Over, yeah, over ten thousand spending a hundred K and net revenue retention is nine hundred percent on those. So they got in early in 2024, 2025, and then all of those companies scaled up. So maybe they had a smaller subscription, smaller, they were using the APIs here and there. And then we went to the token maxing era. They were in the right place. And so many companies scaled their spend that on average, it was basically a ten X increase for organizations. But that makes sense. We've all seen this as, you know, more and more people are like, hey, it's not just like the early adopter on the team that has an AI agent running all the time. It's actually spread to everyone. It's spread to the marketing organization, the operations teams using it. And so these services are going out all over the place.

• 8:22Speaker 00

  They have more than half of the Fortune 500 spending over a hundred thousand dollars annually. That actually felt low to me. Obviously, it's really impressive, like it's great. But I'm sort of like, I was under the assumption that all of the Fortune 500 was spending a lot on like every single model. And I would have said, oh, of the Fortune 500, a hundred K annually? The Fortune 500 is probably spending a hundred K annually on open source models and OpenAI and Google and Microsoft and Anthropic.

• 8:51Speaker 01

  You gotta ask what that half is, what they're up to.

• 8:54Speaker 00

  I mean, some of them might just be in industries that don't write any software really. But it feels like every company in the, if you're in the Fortune 500, you have some software.

• 9:03Speaker 01

  It's kind of bearish anywhere you put it. I do know, I do know.

• 9:06Speaker 00

  You don't do spreadsheets?

• 9:07Speaker 01

  I was, this was maybe six months ago, but I was talking to someone at a Fortune, relatively high up at a Fortune 500. And they said that they had, they were basically running like boilerplate Gemini that like the whole org had access to. And that was like their AI tool. They were telling everyone, just use this.

• 9:24Speaker 00

  Yep.

• 9:25Speaker 01

  And so there's, I'm sure examples of that.

• 9:28Speaker 00

  Yeah, yeah, yeah. Just, and so, yeah, maybe, maybe you see like fifty percent has spending over a hundred K on Anthropic. And then there's some, there's some slice that's on OpenAI, some slice on Gemini and Google, and then some slice on some other section of the market. But I mean, it's odd because like even Meta is probably spending over, over a hundred K annually on Anthropic. I have to imagine that, that Google employees, some of them have access to Anthropic models to the tune of a hundred K. And so that was sort of interesting. The other interesting update was on the distillation... Revenue. So coming out of the Investor Day, it felt like we finally got a number on how much of this revenue is distillation? How much of it might go away if Anthropic figures out how to prevent distillation?

• 10:12Speaker 00

  And the number that was floated was five to seven percent, totally reasonable. It was not like a it's over moment. It was like, oh, like, that's significant. It's crazy that companies that these that these distilleries are spending. I don't know if that's the right word, but we're going to go with it. That these distilleries are are willing to spend like five percent of $70 billion ARR.

• 10:34Speaker 01

  It was way less than some of the the peanut gallery on X would like to say.

• 10:38Speaker 00

  Yeah.

• 10:38Speaker 01

  Half their revenue.

• 10:39Speaker 00

  Half their revenue. That's ridiculous, but still, it's crazy that there are companies out there or like, I don't even know what you call them, like bot farms, organizations, like.

• 10:46Speaker 01

  Distilleries.

• 10:47Speaker 00

  They're distilleries, but they're illegal distilleries, like they're criminals, basically. They're they're TOS violation companies, but they're networks, they're organized. And what's interesting is that it's not just, you know, oh, some, you know, enterprising, scrappy data broker, sales guy, like figured out how to like puppeteer a couple, clawed accounts and sneak some tokens out and like resell them into like somebody who's selling it to Kimmy or whatever. It's like, no, people are deploying like billions of dollars to this strategy and it seems pretty, pretty organized.

• 11:20Speaker 01

  Yeah.

• 11:20Speaker 00

  At the same time, the wrinkle that we got from the S1 is that that five to seven percent number that was leaked out from the Investor Day, it's not explicitly listed as distillation revenue. It's just terms of service violation. So it could be people that are doing adult content or cybercrime or hacking or bio weapon development, anything that's going to get you banned. I would imagine that the vast majority of it is still distillation because what else is going to generate that many tokens that not much revenue? But it is worth noting that it's not entirely distillation attack. I like that we still have the Christmas trim up. It's very, very good. The other one, speaking of Christmas, there apparently is a war on Christmas going on.

• 12:01Speaker 00

  And it's hurting Anthropic significantly. We have some real numbers on how much Christmas hurts the AI trade. It's apparently 20%. So API consumption effectively revenue in December for the last two weeks will be down 20% as as engineers, as vibe coders, as startups, as everyone goes on holiday, they're celebrating Christmas. People will be buying.

• 12:27Speaker 01

  There's been some speculation, obviously, they announced what their ticker is going to be ant during the the the road to Christmas.

• 12:35Speaker 00

  Yes.

• 12:36Speaker 01

  But if you put the, you know, the the dollar sign, it looks like the start of Santa. Sand. And so speculation that they're.

• 12:44Speaker 00

  Related, yeah.

• 12:45Speaker 01

  It's a sort of, yeah, it's a it's kind of a nod to Santa.

• 12:49Speaker 00

  Yeah, yeah, yeah. You know, that that does make perfect sense. What is the opposite of an ant?

• 12:57Speaker 00

  Like the animal opposite of an ant? Like, if you had to think of like the animal, the ant, and then the opposite, because this is the whole Elon Musk philosophy is like you're destined to become the opposite of whatever you are branded as. So the bio, the biological opposite of an ant is an anteater.

• 13:16Speaker 01

  Yeah.

• 13:16Speaker 00

  So maybe they're destined to become an anteater. I don't know. Size opposite would be an elephant. It is an elephant of a stock. I mean, two going out of two trillion is going to be the biggest IPO ever. And so maybe that's the destination.

• 13:28Speaker 01

  I was thinking whale.

• 13:29Speaker 00

  Whale? Yeah, I mean, it's good for others. There can be a lot of whales moving into the stock, right? Anyway.

• 13:38Speaker 01

  Liz Hoffman.

• 13:40Speaker 00

  Yeah.

• 13:40Speaker 01

  Says seven people. So basically, she's pulling out the founder voting structure in the S1, which is which spells out, we believe that our seven co-founders as a group are distinctly equipped to be stewards of our mission. Immediately prior to the completion of this offering, we will issue a single share. They're calling it the golden share of Class F.

• 14:02Speaker 00

  They're not actually calling it the golden share, but it is a golden ticker.

• 14:05Speaker 01

  The Class F common stock, a special class of our common stock to a limited liability company, of which our seven co-founders will initially be the sole members of the quote founder LLC. Our Class F common stock will be entitled to an aggregate number of votes that equals 50.1% of the total voting power of our outstanding shares of capital stock with respect to matters submitted to stockholders generally, including the election of our directors other than the Class T directors. So missed opportunity to call it my precious LLC. But I think that a founder LLC, if they actually have founder LLC, that's very cool. Because it means like they some, obviously, like somebody over the years would have sniped that LLC.

• 14:48Speaker 01

  And then they could either sort of grant that, sort of grant the name to someone else, they can sign off on it. It might just be a placeholder name, but it seems like they might actually have it, which is very cool. And yeah, it's kind of funny that we have like, okay, we have this public benefit corporation and that's super important for.

• 15:05Speaker 00

  For economic redistribution is the.

• 15:07Speaker 01

  For, for, yeah, yeah, yeah. And then you have like just a good old, good old fashioned like LLC that can offer one vote.

• 15:14Speaker 00

  Yeah.

• 15:15Speaker 01

  The thing that would have been interesting is like if they, if this would have been seven votes and that there would have been public, like where the line was. But this allows them to effectively have their own disagreements internally, not have there any be any visibility externally.

• 15:27Speaker 00

  Interesting. Okay, so that's the.

• 15:28Speaker 01

  So you could have like, you could have like, it'd be like a four, three vote.

• 15:32Speaker 00

  Yeah.

• 15:33Speaker 01

  People are like, you know, massively infighting, but all, all we see is is a single vote. Yeah.

• 15:38Speaker 00

  Got it. Okay, interesting. I thought it was more about like passing down, because if you have seven votes, seven shares, then would your, like, if you die and you in your will, you're like, oh, I want to like pass this LLC down to my five children. Then do they become voting members? Do they have a voting, a separate? I mean, the LLC probably has its own voting structure, right?

• 16:03Speaker 01

  Yeah.

• 16:03Speaker 00

  So so it could be, it could, within that LLC, there could be one, one member of the LLC that has 90% of the shares in that LLC. So they could have one can, one person control potentially, like we have no idea the structure of that LLC, which is interesting, right?

• 16:19Speaker 01

  Yeah, we just know that we know it's, they're precious.

• 16:23Speaker 00

  What's also interesting is like, I don't understand how the board works now, because there's the, there's the board that's independent with like Ben Bernanke on it and they appoint the executives, I think. But they were supposed to have control, but now it seems like this has control that supersedes that. So there's a lot of interesting, there's a lot.

• 16:45Speaker 01

  Interesting complexity.

• 16:46Speaker 00

  Yeah, it's really, it's really full employment for Corey Weimberg. I understand why the New York Times is like, we gotta get this guy from the information. Because like, he's going to have full time employment, because every time he writes a breakdown or a scoop or something, Anthropic's like, here's another twist, here's another plot twist, let's, good luck figuring this one out. It's a very, very interesting setup.

• 17:12Speaker 00

  I wonder if if this will become more common, like with AI.

• 17:15Speaker 01

  Well, yeah, so Zuck is in this position where later on, like he's had like total control of Meta. Now he's like, I can, I need to raise equity.

• 17:23Speaker 00

  Yep.

• 17:23Speaker 01

  And so he's creating this new class so that he doesn't dilute himself so much. But in the fullness of time, he could be diluted down. This structure enables them to never, they could, they could.

• 17:34Speaker 00

  Sell everything.

• 17:35Speaker 01

  They could all own basically nothing and be happy because

• 17:41Speaker 01

  they still have, they want the golden vote.

• 17:43Speaker 00

  The golden vote.

• 17:44Speaker 01

  The golden.

• 17:45Speaker 00

  I'm so, I'm so interested to understand how this, how this LLC votes. Because, I mean, even if it's just, even if it's just seven equal founder votes, which is cool, like you got seven co-founders, everyone's on the same page. That's awesome. Also, it's just nice to have seven because you you'll never have a three, three V three. But like, what happens in succession planning? Like, what happens if someone has multiple kids? What if somebody gets divorced? What if somebody dies? Like, there are these weird things that like the perfect structure probably doesn't hold up under. Like, if if one of the co-founders dies with no children and they're just like, I don't, then it's just six to six and it's six people. Then you're back to three V three. Is that a problem? I don't know. Like, there's just so many different dynamics of what, of what could happen.

• 18:30Speaker 01

  We need to study the dynamics of ant colonies.

• 18:35Speaker 00

  Maybe. I don't know. Maybe that's, maybe that's what it is. Or maybe it's, maybe it's elephants. I don't know. Yeah. Our Class F common stock will not have any economic rights. Interesting. Class F common stock entitled to 50.1% of total voting power. I wonder how that's treated for tax purposes. Like, they say it doesn't have any economic rights, but like if it has, if it has incredible power over something valuable, like can it have a fair market valuation? Like, certainly, there are plenty of people that would pay a lot for that one share, right? Like, if you were to market to market and you just ran an auction, like, you know, like Google and Nvidia and Microsoft would all be like, well, yeah,

• 19:16Speaker 00

  I'll pay like a billion dollars for that share or 10 billion or 100 billion dollars for that share, because I would get control over this amazing asset. So like, it has value, but you just never market to market.

• 19:28Speaker 01

  I mean, it could be written into the operating agreement that that none of, they can't be transferred or sold or.

• 19:34Speaker 00

  But you could do a forward contract against it.

• 19:37Speaker 00

  The most mind blowing stats Semi Analysis has seen about the Anthropic S1 is as of June 30th, 2026, quote, "We had raised an aggregate of $141 billion of capital and had cash and cash equivalents of $112.4 billion and short term investments of 19.3." Means to date, they've burned $9.8 billion. They are growing at rapid pace and are profitable on an operating income basis as of June quarter. This is likely the most efficient scaling of a business in the history of capitalism. So when is this going out? What do we know? What don't we know? We know the ticker, dollar sign, and obviously reference to Santa Claus.

• 20:13Speaker 01

  Yes.

• 20:13Speaker 00

  But we don't know how much they're raising. It's rumored to be 100 billion. We don't know the valuation. People are saying somewhere between 1.5 or 2 trillion. 2 trillion feels like it's on the table now. When the market was selling off and there was like a lot of discussion over the revenue deceleration, there was a question about will they need to pull it back? Probably still could. Doesn't really matter at the end of the day. It's still huge up round based on the last valuation. Puts a bunch of money on the balance sheet. Whether it's 5% dilution, 7% dilution, not the biggest deal. The IPO should be happening the week of November 16th. As a reminder, we will be at tomorrow X around that time and it should be an incredible time for us to be doing the show because we have an insane guest lineup with some of the biggest,

• 20:58Speaker 00

  greatest capital allocators in tech and business. And so we will be able to get everyone's take live as this is progressing. Whether, even if it's delayed another week, we're going to have a lot of great stuff to talk about as everyone gets ready to position, maybe go along, give their thesis, give their take. Maybe they're already in Anthropic. Maybe they bought pre-IPO shares. Risk factors. Nick Carter, Sharon, a satirical risk factor. What does he actually say? People are talking about time travel and stuff. What else is in there? The only one, I mean, everyone sort of knew that the IPO risk factor was going to have catastrophic risk, sort of like the AI

• 21:38Speaker 00

  doom, the doom scenario. It did make it into the S1. The market seems to have digested it and been like, yeah, we know.

• 21:46Speaker 01

  Yeah.

• 21:47Speaker 00

  You guys have been talking about this for a long time. We're still going to underwrite it. Like, there's not really anything you can change about your underwriting. You're not going to put that in your DCF. You're just going to say, okay, I hope that doesn't happen. What's interesting is like, it's not even like a cost lineup. Like, we've seen the marketing dollars scaled significantly. So in 2023, they spent just $2 million. I'd love to know what they were spending 2 million bucks on in 2023 for ads. Was that like, was that like Facebook ads or something? Like, what were they advertising? I don't remember any.

• 22:15Speaker 01

  Could have been.

• 22:16Speaker 00

  Awed ads in 2023. Because they were sort of like, they just.

• 22:20Speaker 01

  But couldn't you, couldn't you bundle like events?

• 22:22Speaker 00

  Maybe, maybe. Okay. Yeah, yeah, yeah. Maybe they did like a dev day or something. But then it started ballooning. So in 2025, they spent $568 million and then first half 2026, they're, they're spending $3.17 billion on marketing. Lots of money in marketing. I didn't see a line on safety. I didn't see like a line item on like, how much are they spending on AI safety? Which is sort of interesting. I don't know if I just missed it, but if you're putting the catastrophic scenario in the risk factors, you would think that that would also flow to other parts of the income statement as a cost item because you would say, hey, look, like, one of the weird things about this business is that we invest a lot of compute, a lot of costs, a lot of headcount

• 23:02Speaker 00

  in AI safety. And so expect that to grow with revenue or expect that to grow with headcount or expect that, expect that to grow, whatever. They're doing great. You mentioned, what, 6 million per employee revenue scale or something like that?

• 23:16Speaker 01

  Yeah, somewhere around there. It's interesting how many billions of, you know, very, very anti ads as a business model, but a lover of ads as a business.

• 23:24Speaker 00

  Oh, interesting.

• 23:26Speaker 01

  You know, billions. Probably.

• 23:28Speaker 00

  Ads for thee, not for me.

• 23:29Speaker 01

  Makes them the number one advertiser, like one of, one of the, certainly the number one advertiser in AI. I would be surprised if, you know, Google could, could have topped that, maybe. Who knows?

• 23:40Speaker 00

  No, no, no. That is a very, very interesting scenario. Anyway, what, what else? They have a $125 billion equipment lease with Broadcom. 48% of revenue is coming through the cloud marketplaces. So that was something people were, were talking about how much is accounted for in that different revenue recognition way. Doesn't really matter when you look at the operating income. Clearly that factors that out, but that was a question that people had. And then AI accelerating beyond its limits to.

• 24:13Speaker 01

  We got to give a round of applause to Spark Capital.

• 24:17Speaker 00

  Oh, yeah.

• 24:17Speaker 01

  Huge. Vivek pulled out the amount that they had invested at different points or at least an estimate of that. And you can see they started by leading the series C, which they have 131 X on, and then they just kept doubling down through D through H. Total of 777 million invested, which would give them roughly an $18 billion stake at a $2 trillion market cap. So really fantastic return, early conviction. And Yasmin is the only venture capitalist on the board.

• 24:57Speaker 00

  Yeah.

• 24:58Speaker 01

  So I, you know what I'm, you know what I'm thinking?

• 25:01Speaker 00

  What?

• 25:02Speaker 01

  Top of the Midas list.

• 25:03Speaker 00

  Oh, for sure. Yeah.

• 25:05Speaker 01

  Like, she should probably just jump straight to the front.

• 25:07Speaker 00

  Yeah, hard to make an argument against that.

• 25:10Speaker 01

  Okay, so.

• 25:11Speaker 00

  So they got hacked.

• 25:12Speaker 01

  Yeah, so Cathedral, you, you know what they were trying to do.

• 25:17Speaker 00

  This was a white hat, safe harbor hack. This was not the same thing that you've been seeing.

• 25:22Speaker 01

  So Elizabeth in the Washington Post says, "In less than 12 hours, a group of ex-Doge cyber researchers were able to penetrate Anthropic's systems."

• 25:29Speaker 00

  Yeah.

• 25:30Speaker 01

  Using AI agents, including Slack channels where the most sensitive models are discussed. This is just weeks after.

• 25:35Speaker 00

  Maybe TikTok.

• 25:36Speaker 01

  Anthropic whistleblowers.

• 25:39Speaker 00

  It looks kind of silly. There we go.

• 25:41Speaker 01

  There we go. Anthropic was, this is just weeks after Anthropic whistleblower Joseph Cox and charged the company with launching a hubristic gamble from a private company Slack.

• 25:50Speaker 00

  Launching a hubristic?

• 25:51Speaker 01

  Anyway, so the interesting thing was Cathedral, like, seemingly wanted to drop this the day that, the day of the IPO.

• 25:58Speaker 00

  Yeah.

• 25:58Speaker 01

  Assuming that it would just be this like crazy bombshell.

• 26:01Speaker 00

  Yeah.

• 26:02Speaker 01

  And I do think it's an important, interesting story.

• 26:04Speaker 00

  Yeah.

• 26:04Speaker 01

  But the S1 was just so good that it's kind of drowning it out.

• 26:09Speaker 00

  Yeah.

• 26:10Speaker 01

  We were talking about this over the weekend. You were saying you think that there should be like, at least a 10, 20 billion, like, white hat program potentially?

• 26:20Speaker 00

  I don't, I don't fully understand the scale of the economic damage of like the Quest Labs hack and the other, like, how, how serious is the risk that like the banking infrastructure shuts down or like the grid goes down? But like, if, if there's really a risk of like the grid going down, you're looking at economic damages in the billions, if not hundreds of billions. Like, it'd just be so disruptive. It would be like, like, you could imagine a COVID-like scenario where the internet is disrupted and all of a sudden you just have like, a, like a 20% nuke in GDP because, like we did with COVID, where everyone was like, we can't go out to restaurants. So the restaurant industry is just zeroed for this quarter. And if, if something like that happens, like the economic damage is so high, you have to incentivize it. Right now, there is

• 27:05Speaker 00

  an incentive, which is just Anthropic and OpenAI are like racing with each other. So they want to be like the, the savior. And so they have Daybreak and Mythos or Glasswing to, to like, you know, kind of help out and make money and also earn PR wins for, you know, disclosing bugs and, and patching things. But it would be interesting to see it go a lot further. I was, I was comping it to like, what was the Intel deal? Like 20 billion or something? Like, if the US government was just like, we're doing a $20 billion bug bounty, like, that's secure America? And all the labs are like, okay, well, like, this is actually going to move the needle for us?

• 27:46Speaker 01

  People in Miami are selling courses on how to get your first white hat bounty.

• 27:50Speaker 00

  Yeah.

• 27:50Speaker 01

  Anyone can become a millionaire.

• 27:52Speaker 00

  Yeah, maybe, maybe it winds up being.

• 27:54Speaker 01

  Go to.

• 27:54Speaker 00

  Misused.

• 27:55Speaker 01

  Go to Hugging Face, get an obliterated model.

• 27:57Speaker 00

  Yep.

• 27:58Speaker 01

  Go, point it.

• 28:00Speaker 00

  I mean, that's a pretty good use of time and money. Like, you need a lot of people to, to test a bunch of different ideas, all the long tail stuff, figure out.

• 28:10Speaker 01

  It would be very chaotic.

• 28:11Speaker 00

  It'd be extremely chaotic, but if it's all white hat and they're all doing it because like, yeah, I got into.

• 28:16Speaker 01

  How, how white hat can it be if there's a guy in Miami selling a course on how to use obliterated models to hack?

• 28:23Speaker 00

  I think that there are, I think you'd be surprised by the number of like hackers who would break into something like Quest Labs and be like, between like having a bunch of Brian Johnson's blood work and just like a check from the government for six figures, like, I'm taking the check for the government. Like, I don't actually care about the underlying data.

• 28:40Speaker 01

  It would be just extremely chaotic and potentially have some like massive negative externalities.

• 28:45Speaker 00

  Because you're just.

• 28:46Speaker 01

  You're incentivizing a bunch of people that have never. That have no experience like handling sensitive data.

• 28:53Speaker 00

  Yeah, but you could also restrict the bug bounty program just to big companies.

• 28:57Speaker 01

  An account called Log4j has been having an absolute field day with their Samsung TV over the last few days. Where should we even start?

• 29:07Speaker 00

  I mean, at the high level, I love the, I love the idea of getting a dumb TV in 2026. The smart TVs, we've complained about them a ton. Palmer Lucky's complained about them. Like they're slow. You always have to update them. They have a whole bunch of unnecessary features. You just want it to turn on and look good. You probably need a settings panel with some of like the color correction and some of the, some of the, some of the decisions that you make to make sure like the frame rate matches whatever your input source is. But by and large, I don't need the ads, but I also don't need the ability to stream Netflix on the device directly. I just want it to be a dumb panel and that's just a product that's not for sale, right?

• 29:45Speaker 01

  Yeah.

• 29:45Speaker 00

  Everything is ad-supported. Everything is spyware and calling home and listening to you and it's all very annoying. For no other, for if, if, even if you're fine being spied on, it's just annoying because it's slow.

• 29:56Speaker 01

  Yeah.

• 29:56Speaker 00

  It's just a bad product.

• 29:57Speaker 01

  That's the biggest thing.

• 29:58Speaker 00

  Amazon has a ton of ads. At least it loads quickly.

• 30:00Speaker 01

  Yeah.

• 30:01Speaker 00

  Right? But, um, and so Log4j has been hacking his, uh, his Samsung TV and seeing some solid progress, says, uh, another development might-

• 30:13Speaker 01

  Realizing that the, the TV is watching, he's watching the TV while the TV watches him.

• 30:18Speaker 00

  It's brutal. So the TV has a camera. Apparently the Samsung TV loads a region-specific convolutional neural network, which tracks your usage in the app. Like in YouTube, it's looking for videos you watch, ads you skip, progress in a video. So glad they're interested in me. Code for facial recognition within the content was also found. I think that would be facial recognition for who's on screen. So it's like, oh, you're watching Mr. Beast. That's a fact, but-

• 30:45Speaker 01

  No, no, no. I think it's, it's, it's watching to see who's watching.

• 30:49Speaker 00

  I think that might be what's going on. But yeah, the TV, the TV industry has just sort of been able to like skate by on different rules. Like Apple's done all of this work around privacy and, and even Meta has like, well, yeah, we have camera glasses, but there's going to be a light on. And the TV industry just isn't under the same amount of pressure or scrutiny. So I think they can just kind of do whatever they want.

• 31:15Speaker 01

  Today Instagram announced they are testing long-form horizontal videos called features. The platform wants to be a place where you watch a 90-second video and a 90-minute video all on your TV. They're also testing lives in the Reels tab, a hub for series and more. So coming straight for YouTube. I like it. I think more, more competition is good. I'm interested to see how YouTube responds to this, you know, when, when Netflix started courting YouTubers, YouTube said, hey, if you put your videos there, we're gonna destroy your reach. We'll see what they do here. The, the feature that I think is most interesting. So, uh, Messari was talking about this, um, on Colin and Samir's show.

• 31:56Speaker 00

  Cool.

• 31:57Speaker 01

  Uh, right now there's, we have a big problem and, uh, we may have played a part in it, but the big problem is that you get a clip, right? And you get like the, this really interesting moment and-

• 32:07Speaker 00

  We're all looking for the guy who did this.

• 32:08Speaker 01

  Yeah, we're all looking for the guy who did this. Um, but you get this bit, you get, you get this interesting, you know, 30 seconds, let's say. Um, and some percentage of the people watch the clip and then go find the full-length thing, but most of the people get like, they feel some emotion, whether it's joy or rage.

• 32:24Speaker 00

  Some percentage, like two basis points.

• 32:27Speaker 01

  Yeah. Yeah. We've, we've noticed this where like our, our core show-

• 32:31Speaker 00

  Yeah.

• 32:31Speaker 01

  The recording of the live and the diet, they just sort of grow at a steady rate every single day. But like a viral clip here and there doesn't actually drive like a huge uptick, right?

• 32:41Speaker 00

  Yes.

• 32:42Speaker 01

  And so that's just proof that like-

• 32:43Speaker 00

  But it can drive like a conversation.

• 32:44Speaker 01

  Yeah.

• 32:45Speaker 00

  And it can be a distillation of like, wait, that's all they talk about all day? You know, like people can see it as like a-

• 32:50Speaker 01

  And so what I think is interesting here, and I'm sure that YouTube will respond in, in some way. It feels relatively straightforward to implement, is like you'll be able to watch a clip and then just click into the, like while on Instagram, click into the main, the full video to that, to that exact point. And then you can like watch the whole conversation around it.

• 33:09Speaker 00

  Cool.

• 33:09Speaker 01

  I think it's going to be very healthy because, um-

• 33:12Speaker 00

  Yeah, this is-

• 33:14Speaker 01

  Yeah, because we, we've had instances in the past where like someone watches one of our clips, gets angry at it and like because of something that we said, you know, immediately outside of that like short little bit. And it's like, no, we understand that that's like a reality of the situation and, and that can potentially be bad or good or whatever it is.

• 33:31Speaker 00

  Yeah, happened with this arrow-

• 33:32Speaker 01

  But I think just like more, more competition is good.

• 33:35Speaker 00

  And, and because I, I think I didn't have my question and, and I was like, oh, I, I, I actually asked exactly what you're saying in the question, but we didn't clip the question. So it looked like the answer was not aware of that or something. I don't know. It happens all the time. Yeah.

• 33:50Speaker 01

  But anyways, I will be very curious if people start watching Instagram on, on TV.

• 33:55Speaker 00

  Anyway.

• 33:55Speaker 01

  It's been a great day. It's that time.

• 33:58Speaker 00

  Yeah, we're so close to, we're so close to Christmas.

• 34:00Speaker 01

  We're just hours away.

• 34:02Speaker 00

  Next week's gonna be rough. This week's gonna be rough. Nigga's five stars.

• 34:06Speaker 01

  We love you.