$AAPL + $PLTR, Value of a Search, Grok Bot Breaks the Bank | Harley Finkelstein, Bridgit Mendler, Dylan Patel & Max Kan & Andrew Megalaa

(02:14) - $AAPL + $PLTR Earnings (05:28) - Value of a Search (13:08) - Grok Bot Breaks the Bank (16:55) - 𝕏 Timeline Reactions (25:37) - Harley Finkelstein, Shopify’s president, discusses the company’s strong Q3 results, major brand migrations, and the growing role of AI-powered commerce. He explains how shopping agents can improve product discovery and purchasing while urging merchants to provide detailed product information ahead of Black Friday and Cyber Monday. (40:41) - Bridgit Mendler is the co-founder and CEO of Northwood Space, an aerospace startup building next-generation ground stations and antennas to improve communication between Earth and satellites. Previously a Disney Channel actress and singer best known for Good Luck Charlie, she earned a master's degree from MIT and a law degree from Harvard. Her company recently raised $375 million at a $2 billion valuation, with backing from Andreessen Horowitz and DFJ Growth. (51:14) - Dylan Patel, Max Kan & Andrew Megalaa. Dylan Patel is the founder, CEO, and chief analyst of SemiAnalysis, a leading research firm covering semiconductors, AI infrastructure, and data center economics. He is known for his detailed analysis of NVIDIA, advanced chip manufacturing, AI compute clusters, and the economics of training and running frontier AI models. Max Kan is an analyst at SemiAnalysis and co-lead of its Tokenomics research team, where he models the economics of AI inference, token pricing, and future demand for AI hardware. He previously worked in strategy and product at Jane Street and co-founded Habitat, a reinforcement-learning environments startup. Andrew Megalaa is a researcher at SemiAnalysis focused on AI tokenomics, inference economics, and frontier model performance. Alongside Max Kan and Dylan Patel, he has published research comparing AI subscription economics and developing GDPx, a benchmark measuring AI capabilities across economically valuable fields such as software engineering, finance, cybersecurity, and chip design. (01:17:24) - 𝕏 Timeline Reactions 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.

• 0:02Speaker 00

  You're watching TVB.

• 0:03Speaker 01

  Today's Tuesday, November 3rd, 2026. We are live from a combination of the TVB Alcatraz Dome and a hotel room hundreds of miles north in San Francisco, but we are still in the Temple of Technology, the Fortress of Finance, the Capital of Capital, and of course, we're going to tell you about ramp.com. Time is money, save both, easy use corporate card, bill pay, accounting, and a whole lot more all in one place. And let it, let's let, let's let this San Francisco Halloween goer tell you about Ramp as well, because we got a video from

• 0:40Speaker 00

  Pull it up.

• 0:41Speaker 01

  Let's pull up this video of someone with their Halloween costume.

• 0:46Speaker 00

  You're watching TVB.

• 0:47Speaker 01

  Ramp.com. Time is money, save both. I like the SD. Temple of Technology.

• 0:54Speaker 00

  The Fortress of Finance.

• 0:55Speaker 01

  The Capital of Capital.

• 0:57Speaker 00

  Put the flashback.

• 1:00Speaker 01

  This last thing. Great. Some sort of combination Halloween costume plus Vibrio really got the full experience out of that costume, not just showing up, hoping somebody else takes a picture, clearly shooting some A-roll, adding some B-roll, getting a good, good viral video.

• 1:18Speaker 00

  So good, so good. He's getting, he's getting a pack of real merch. John, how do you think the delay is right now? Can you think, you think it's like five seconds, 10 seconds? Probably hard to say.

• 1:30Speaker 01

  Couple seconds, I'm talking right after you end. How does it feel on your side?

• 1:34Speaker 00

  It feels okay.

• 1:35Speaker 01

  Okay, okay.

• 1:37Speaker 00

  Would you look at that?

• 1:38Speaker 01

  Yeah. Uh, yeah. How, how was, how was your trip home? You got home late last night?

• 1:43Speaker 00

  Uh, I, I, I slept, uh, five hours.

• 1:48Speaker 01

  On the plane?

• 1:49Speaker 00

  On the plane.

• 1:50Speaker 01

  Wow, very nice. I slept on the plane too, and then that kind of threw me off when I got home. I couldn't sleep and I woke up and slept a little bit.

• 1:58Speaker 00

  Skill issue.

• 1:59Speaker 01

  Skill issue, okay. Well, um, let's, let's move on to the news. First, let's tell you about Railway. Railway is the only one intelligent cloud provider. Using Facebook, we can deploy right after this data, but for more. So, uh, the, the, the, the big news, Apple and Palantir had earnings. We are in the midst of tech earnings season. Apple and Palantir, they both beat on earnings. There's a lot of this happening where, uh, the market is in such, in such turmoil that even though, uh, earnings are coming back positive, uh, analysts are reading into, uh, margin compression that may or may not happen in the future, and that's driving stocks, uh, to be a little bit weaker, sometimes sell off, kind of depends on the stock.

• 2:42Speaker 01

  But Apple reported record September quarter revenue while Palantir nearly doubled its revenue from a year ago. Both stocks are down around 2% this morning. The Financial Times reported today that even though Apple beat earnings, the company is warning that rising memory chip prices and the cost of running its AI tools could cut profit margins.

• 3:01Speaker 00

  You don't say.

• 3:02Speaker 01

  What?

• 3:03Speaker 00

  You don't say.

• 3:04Speaker 01

  Yeah, I mean, stuff's going to get expensive and Apple's had a long history of holding the line on pricing as much as they can. Like they love to put up a big clean number and then stick to it for a little bit. And so it can be, they're, they're going to be in a jam as, uh, as memory prices go up mid-cycle when they don't want to change prices. It's never been a company where they change prices every month, every quarter. It's been, you know, every, every year or two, or even, even every three years, they'll, they'll hold the price, hold the line in the price for a really long time. Uh, uh, anyway, um, Palantir, uh, Q3 revenue came in at 2.3 billion, annualized at 9.25 billion.

• 3:46Speaker 01

  It's a $400 billion company, uh, and Karp had a, had a, uh, he, he had a big moment on the earnings call. Uh, US commercial revenue surpassed its US government revenue for the first time, reaching 984 million versus 953 million. This is sort of the, the, the, the dual buckets of are you betting on, on the, the foundation labs, the OpenAI anthropic combination, or the Microsoft, Palantir, the diffusion, the enablers, the cognitions? And, uh, Palantir has, has certainly been growing, like they, their messaging is very similar to Microsoft now around, uh, you know, own your data, let's work with you to implement AI, we'll help you transform your organization.

• 4:30Speaker 01

  Uh, and so, uh, I mean, it's been, been receptive and that's why they're, uh, that's why their commercial revenue is growing. What are you laughing at, Jordy?

• 4:38Speaker 00

  Uh, just you, just laughing at you. Um, no, uh, no, no, I was, I was sort of smiling because it's like, you know, putting, putting Karp and Satya in the same bucket. It's like, you know, uh, very different personalities, but ultimately have a very, uh, similar sort of, um, because, you know, sort of pitch, uh, which is cool.

• 4:57Speaker 01

  Yeah, yeah.

• 4:59Speaker 00

  Chat is asking about merch timing, merch store, wanted to jump in quickly because we do have a date, uh, November 12th, the TVP merch store is going to be going live. Uh, it will be released first into the YouTube chat, uh, and it will sit there. I'm, I'm assuming we'll, we'll, we'll leave it there for like 10 minutes so the chat can, uh, can feast and then we'll post it publicly over on X and everywhere else.

• 5:26Speaker 01

  Yeah, a lot of work, a lot of work man in that. Um, let's go over to Buco Capital Bloke breaking down Reddit. Uh, says Reddit call was absolutely fascinating. Everyone should listen to it as it's a bellwether for where the internet is going. AI mode is increasingly the default Google experience. AI mode provides rich info and data in line, less insensitive to leave search, or less incentive to leave search. AI mode incentivizes dialogue. Google wants to keep, wants to keep you engaged to serve more ads at each turn of the conversation. Google will milk that for as much revenue as they possibly can and transition from a search company to a cloud service and chip company as traffic from humans becomes more scarce. This will put Google in an increasingly adversarial position to the rest of the internet.

• 6:11Speaker 01

  That's interesting. This is a massive headwind to all media type companies who are not destinations. This is a massive headwind to all content driven, go to market motions, especially in the SMB. You have seen companies like HubSpot and Monday.com get crushed by this funnel collapse. We are entering the end game, a knife fight for the remaining and dwindling volume of human traffic on the internet. Interesting. Um, they say people still want Reddit. This is from Steve Huffman, the CEO on the call. People still want Reddit, it's just Google's not sending them to Reddit the way they used to. What's interesting is like Google Zero has been, you know, coined by Neel Patel at the verge like years ago, I don't know, five years ago, 10 years ago, something. He's been talking about that for a long time. Uh, when Roger from Cadenas came on the show, he talked about, uh, they had embraced it

• 6:54Speaker 01

  there and that was sort of a, a bombshell to hear, uh, you know, someone in that position kind of admit it publicly that that's no longer a growth engine for them. Uh, it's, uh, it's, it's interesting to hear that it's spreading to Reddit. Um, but, uh, it's certainly, it's certainly, uh, uh, crazy times for Google because they, they, it's the innovator's dilemma. They have to meet the customer where they want to be with the new product, but at the same time, a lot of people sort of hate AI mode, or at least publicly hate on AI mode, like the, the, the, the, the long history of just Google stuffing more and more ads

• 7:36Speaker 01

  in the search results never really broke through, but now people are publicly saying, oh, I don't like the AI mode. I want to go back to the, the one that monetizes better, which is kind of this funny dichotomy of, well, um, for the first time, just like, just randomly, anecdotally, if you talk to people, they'll, they'll be like, oh, I'm like frustrated. And it can be kind of an annoying funnel because you, you wind up in AI mode and then you're like kind of trying to click somewhere and it can be sort of jarring and it just requires like a new, a new flow to like get into. I don't know. Um, what, what, what, what's your overall thinking on Google these days, Jordy?

• 8:13Speaker 00

  Uh,

• 8:14Speaker 01

  Dylan Patel's.

• 8:17Speaker 00

  I just think if, if you think AI, I, I think if you think, uh, AI is real and going to be big, like it's, it's very, very hard to make a super coherent bear case, right? Even if search revenues, even if search revenues decline, um, you know, every year and, and we're sort of at peak search, they just have so many other assets and they can use that, um, you know, search cash flow to finance so much other infrastructure and M and A and things like that. So.

• 8:47Speaker 01

  I mean, people are nervous about it, but it's still $200 billion. So effectively, I mean, that's revenue, but it's high margin revenue that they can deploy elsewhere. And I mean, the take him take is that in the race to win AI builders, Anthropic and OpenAI now account for 86% of enterprise LLM API spend up from 67%. So the duopoly is consolidating around the frontier leaders and Google's market share went down more than 50% in terms of, not in terms of LLM usage for consumer, but but for builders in the enterprise.

• 9:19Speaker 00

  Yeah, but but that revenue is flowing through GCP. It's it's it's paying for TPUs, right? And so it's like, Google's getting their Google's getting their cut, right?

• 9:31Speaker 01

  100%.

• 9:32Speaker 00

  And and yeah, it's like, you just cannot it's when you look at the sort of collective, you know, the collection of assets, the exposure to everything from, you know, SpaceX to to Anthropic, to the TPU business, to the cloud business. It's like, you know, this is still one of the greatest businesses in history.

• 9:54Speaker 01

  Where do you sit on the question of like, is Google in founder mode or not? Because like, we always get these headlines of like, oh, Larry and Sergey came back in, they're they're digging in. And then you'll see like, they bought another estate in Florida. And it's like, going back and forth on like, who's actually and I know they have the voting control. So they could at any point come in and be like, we're doing some huge M and A deal, or we're completely reorganizing this organization. We're gonna completely, we're gonna go Mark Zuckerberg mode and completely rework the organization. But at the same time, they have been out and had a real CEO in place, unlike Meta. So they're kind of this hybrid, like, they're not quite.

• 10:35Speaker 00

  It doesn't feel like it doesn't, it certainly doesn't come across like the company is in founder mode in the way that you in the way that you feel it with a meta, right?

• 10:44Speaker 01

  Yeah.

• 10:45Speaker 00

  And so, and I, and I think that's what matters, right? I think the big, obviously, you know, the headwinds for Google is like, losing, you know, people almost forget about the massive talent exodus from like, what, a few months ago, right?

• 11:00Speaker 01

  Yeah.

• 11:01Speaker 00

  And but but again, it's like, as long as they can stay competitive around the cloud and chip business, you know, there's a lot of upside.

• 11:10Speaker 01

  What is going on with this New York Times headline? Google will turn off search for schools that reject AI. Andrew Curran is sort of correcting the record here, but it sounds really aggressive. It's like, the carrot or the stick. Did you see this?

• 11:27Speaker 00

  Yeah, yeah, yeah. I mean, they're just saying, they're effectively saying, like, if you, we are every, all of our products are AI. So if you tell us not to use AI, then none of you can't use any of our products, right? But it sounds much more aggressive to be like, you can no longer Google search. But I think their point is that AI is everywhere, across every product surface area.

• 11:53Speaker 01

  Yeah.

• 11:54Speaker 00

  And so it's unavoidable.

• 11:55Speaker 01

  So Andrew Curran says, this article is getting posted everywhere this morning. I can see why, very, very controversial. But this decision is being incorrectly framed as punitive. There's no such thing as search without Gemini. Even if you don't turn AI mode on, you're still talking to Gemini in the search box. The old Google search is gone. Yeah, that's, it's a good point. Like, I, I'll give Google some points for, you know, this is just the way things are now. But it does sort of, yeah, necessitate like a Google search classic or something. I mean, I guess schools can do DuckDuckGo or some search engine that hasn't embraced, you know, LLM search if they want to offer that that

• 12:37Speaker 01

  more classic, old school experience. But I don't know, it might be time to learn the Dewey Desner system, hit the library.

• 12:43Speaker 00

  Yeah, I think I think so. So.

• 12:46Speaker 01

  Google is not going to save you at this point. If you're trying to learn, you gotta, you gotta hit the books. I don't think you're gonna do that. What's going on with Grokbot?

• 12:55Speaker 00

  I don't know.

• 12:57Speaker 01

  Let's tell everyone about CrowdStrike. Your business is AI, their business is security. CrowdStrike secures AI, one stop, three ways. The Grokbot thing was very weird. So Elon chimes in on November 1, which was what, Sunday morning, I guess, or Sunday afternoon, says the cost of serving Grokbot was unsustainably high relative to revenue. Sheel says Elon says Grokbot costs are unsustainable relative to revenue. Computer use is expensive, but AI companies are racing to make it cheaper while giving it away for free. Thank capitalism, we get free digital labor before they figured out how to profit for it. I was so surprised by this. I think everyone was surprised by this. What was your take?

• 13:39Speaker 00

  So the, I think the current read is that they were using Opus 5.5 under the hood.

• 13:45Speaker 01

  Oh, yeah, they're a big Anthropic customer, too.

• 13:49Speaker 00

  And so, but, but still, like, you would think that they would just eat the, eat the losses for some amount of time, given that, given that they, you know, they're a $2 trillion company, they're like, I think, somewhere around a million, you know, weekly actives, like, it's not a, it's not a massive product at this point. And so this whole thing was just like, very, I, I still don't know what the read is. Like, I'm just very confused.

• 14:22Speaker 01

  Yeah. I mean, I'm just doing a back of the envelope, like.

• 14:24Speaker 00

  Like, he's, he's going and publicly saying that I believe that in the future Grokbot will consume the majority of our compute.

• 14:34Speaker 01

  Mm hmm.

• 14:35Speaker 00

  And then, now you're saying like, the cost of serving our product is unsustainably high relative to revenue?

• 14:43Speaker 01

  I mean, I guess the steel man would be like, the next version of Grokbot, people will be paying more for. So even though it's consuming all the new data center compute capacity.

• 14:54Speaker 00

  But but but like, assume, assume the sort of continuous decline in the actual cost to serve your users. Why are you, what, like, maybe, maybe, maybe he was having a big night out?

• 15:10Speaker 01

  I don't know. Also, it seems like, I mean, it's not like he turned Grokbot off. He just, this is just, he just denied someone a reset, right? Wasn't that what happened?

• 15:20Speaker 00

  I know. I think people were complaining that.

• 15:24Speaker 01

  There's not.

• 15:25Speaker 00

  Their usage just like rocketed to 100%. And then.

• 15:28Speaker 01

  Sure, sure.

• 15:29Speaker 00

  It doesn't.

• 15:30Speaker 01

  So they kind of right sized the the tokenomics internally. Yeah, it is odd, because even if they're like, 10% of Anthropic's revenue, that's less than a billion dollars of cost. And if they have, you know, a million people paying 100 a month, that's 100, like, they're, they'd be losing a lot, but they have a lot of money. But I guess, they just, you know, Elon's definitely wanted to rip the Band-Aid off and kind of right size things and maybe just wait. Also, I've just been surprised at the the level of adoption, at least the level of, maybe it's just on X, but people talking about actually using it. It precursor

• 16:10Speaker 01

  the enterprise, the power user go to market motion was a little confusing. It made a lot of sense to stuff Grok in X as like this helpful little answer bot for community notes and questions on facts and stuff like that. When you're seeing, when you're reading a news article, having Grok summarized, that that seemed like a good use case. But the idea of like, bridging that, bridging from that, like, the X, the everything app, that's like, mostly for fun, and mostly for like gossip, to like, it's in my Slack now, was always a little bit of a stretch, versus like a Palantir, or Microsoft, or, you know, any of these other enterprise products that have more mature go to market motions. Anyway.

• 16:50Speaker 00

  What's, how's Wiz Khalifa responding to the situation?

• 16:55Speaker 01

  Wiz Khalifa had some insights, and he had some wisdom.

• 16:59Speaker 00

  He's sort of fired back.

• 17:01Speaker 01

  The work is the reward. The work is the reward.

• 17:07Speaker 00

  I think that's because he, he ran out of usage. He hit his usage limit on Grokbot, and so he's sort of reminding himself, the work is.

• 17:15Speaker 01

  I gotta do the work now.

• 17:16Speaker 00

  Yeah.

• 17:17Speaker 01

  My Grokbot can't handle it.

• 17:18Speaker 00

  Yeah.

• 17:19Speaker 01

  But the work is the reward.

• 17:20Speaker 00

  But it should feel rewarding.

• 17:21Speaker 01

  I like, I like a pithy quote every once in a while. I haven't seen him take over the timeline for a while, but.

• 17:28Speaker 00

  Naval's been awfully silent since Wiz Khalifa posted this.

• 17:32Speaker 01

  True. Here's an exercise for the viewer. Figure out where I am. Because apparently, you can listen to my audio, and you can run it through some analysis, and, and hear the various planes with their Doppler signatures, their Doppler curves, nearby airplanes, and you can triangulate where I am. I already gave you a clue. But, but I do wonder how detailed this needs to be. I've heard that it's like, 15 minutes of, of, of clean audio. If we're passing this through this call, and there's noise on your side a little bit.

• 18:12Speaker 00

  And I'm assuming you're on a Zoom call, so there's some noise cancelling happening naturally.

• 18:17Speaker 01

  Yeah, yeah. It's not like a clean, like, file that's continuous on my side coming through to you. Yeah, yeah, we're gonna need a lot of soundboard to keep me anonymous. This is the new cybersecurity.

• 18:29Speaker 00

  I'll just keep spamming it.

• 18:30Speaker 01

  Just spam that cat, because we got to confuse the people that are trying to track me down, using the latest. No, this is, this is a crazy example of like, AI enabled surveillance.

• 18:41Speaker 00

  This is like, yeah, everyone is going to have access to superintelligence. So you get to do things like this.

• 18:47Speaker 01

  Yeah, yeah.

• 18:49Speaker 00

  You know.

• 18:50Speaker 01

  Yeah, I mean, they genuinely, for, for people that have recorded, like, long form vlogs, outside, at their house, unedited, there's no cuts in the audio, like, this definitely could dox your location. But GeoGuessr, your Rainbolt has been able to guess locations for the old way, analog way, just by looking at the photos and looking at Google Maps for a long time. So, security was always a layered, a layered problem. But this is, this is a fascinating, just mathematical breakthrough or situation. What else is in the timeline?

• 19:28Speaker 00

  Let's check out this ad from Ulol Capital. Just, just a picture of this guy.

• 19:37Speaker 01

  I love it.

• 19:37Speaker 00

  Then learn more, learn more. I'm curious now, I'm curious. Thomas says, hey Meta, waste my money. Cause they'll, you know, they'll, of course, offer you the ability to kind of just promote any, any kind of content. They make it really, really easy. Can do it with a credit card in the app.

• 19:55Speaker 01

  Not as easy as X. X has a finger that pops up.

• 19:59Speaker 00

  The guy that, yeah.

• 20:01Speaker 01

  And points to the promote button, which is going to be bigger than the post button soon. The, I, I had to set up X again, and the Nikita vacation of the app is remarkable. Like if you don't enable notifications, it, it has this like, this, the slider bar that's like notifications on or off. And if you say, no, I don't want notifications, it slides into a state that looks like it's broken and looks like you have an error in the app. Like it's, it's genius to get you to like, be like, oh, I gotta correct this. It really, there's so many different patterns to get the, uh, the, the, the retention up for sure. They're, they're, they're working on it. Anyway, let me tell you about Codex. Codex is a powerful workplace. We're going to work down with AI agents.

• 20:47Speaker 01

  When you're writing code, analyzing data, creating content or automating business workflows, Codex helps you move projects forward from start to finish. We have a, we have a great show lineup. We have Harley from Shopify joining to share Shopify's Q3 results in just two minutes. Then Bridget Mendler from Northwood Space is coming on 11:45. And then Dylan Patel and the Semi Analysis Crew are coming on 11:55 to break down GDP X. There was a, there was a viral picture of a cat that was born with a mullet. It was unfortunately AI generated, but

• 21:19Speaker 00

  brutal.

• 21:20Speaker 01

  I think with, with AI is both the problem and the solution here. Because AI is the problem that generated the cat with the mullet. But with advanced breakthroughs in biotechnology driven by advanced AI models, it might be possible to breed a real cat like this in real life.

• 21:36Speaker 00

  Yeah, a lot of biologists are going to be looking at this.

• 21:39Speaker 01

  Yeah.

• 21:39Speaker 00

  And saying, actually, I was focused on, you know, extending human lifespan, but I'm actually shifting focus to, you know, developing the mullet cat.

• 21:50Speaker 01

  I could see a new startup. You know, we have that Palmer Lucky, uh, you know, uh, warhound for the, for the, for the dog, for the warfighter. Mullet cat, new startup. Send it to a billion. For sure.

• 22:08Speaker 00

  Peter Rahal.

• 22:10Speaker 01

  Yes.

• 22:10Speaker 00

  Back with a new brand called Rowdy. It's a absolutely fantastic name. He's coming after Doritos. It's his holding company's, Andrea shares, it's his holding company, Medici's. First savory EPG snack, and it's pretty addictive. Their tangy ranch is the closest thing to reverse engineering. Doritos Cool Ranch. It's going to be interesting to see how Frito Lay reacts.

• 22:37Speaker 00

  Really, really good execution on this. You can just tell already that it's going to be a hit. I mean, this is, you know, the, the Doritos Cool Ranch was literally created in a lab to be

• 22:53Speaker 00

  the most addictive product snack in the world. And I'm, I'm almost certain that Peter would have replicated it pretty perfectly. Yeah, you are, you are, you, you're, you are a Doritos guy. This is, this is things that, you know, something that people don't really know about you. But you, you, you clearly will be in a situation where like the only food available is Doritos. And you're like, twist my arm, twist my arm. You'll grab like three bags and then you'll just go.

• 23:24Speaker 01

  I would go further. I, I would say I live sort of a Doritos coded lifestyle. I, I would say that my entire life is Doritos coded in any way.

• 23:34Speaker 00

  Absolutely.

• 23:35Speaker 01

  Well, uh, that I, I, I love this because I, I think, uh, he's not overthinking these categories that he's going after. Like clearly there's a market for Doritos, those particular flavors. There are so many other things, if you were trying to go into like the new chip category, you could go way too protein forward, try and change up the flavors and just make it a little bit too confusing and not legible to the Doritos customer. This is something that a Doritos customer could see and just pick this instead. And so I, I think that there's, this is a good like counterbalance to the war that's happening in the rest of the new healthy chip category. This is just like one click away from Doritos.

• 24:19Speaker 01

  And it's more like Doritos than like a masa, for example. That, that, that was the, that was.

• 24:24Speaker 00

  Yeah. Before we bring in Harley, let's pull up this video of LeBron's newest sponsor.

• 24:32Speaker 01

  Yeah, this is huge.

• 24:33Speaker 02

  LeBron just went to the 76ers in Philadelphia. Did you see the new sponsors of the 76ers?

• 24:38Harley Finkelstein?

  Wait.

• 24:38Speaker 02

  It's on LeBron.

• 24:39Harley Finkelstein?

  Wait.

• 24:39Speaker 02

  Left breast.

• 24:40Harley Finkelstein?

  Don't you, or is it, you were Bloom Energy?

• 24:42Speaker 02

  I am Bloom Energy, but that is a different Bloom Energy. There is an AI company. I think they paid like $30 million to sponsor the 76ers. No one other than you finance nerds know what Bloom Energy is. The amount of messages I got that thought I just signed the 76ers is the funniest thing that's ever happened to me.

• 25:00Speaker 00

  So good.

• 25:01Speaker 01

  So lucky. Yeah, it's better to be lucky than good. I don't know. Greg is very good as well, but it's just like.

• 25:09Speaker 00

  Mandate, mandate of heaven.

• 25:10Speaker 01

  Mandate of heaven moment for sure, for sure.

• 25:12Speaker 00

  So good.

• 25:14Speaker 01

  Let's bring Harley in first. Let me tell you about public. Invest across all asset classes, automated AI agents, run trading strategies, risk management, money movements, and monitor markets with AI agents for investing on public. And we have Harley from Shopify here to tell us about everything with Shopify's Q3 earnings, the health of the e-commerce economy. Let's bring in Harley and catch up.

• 25:39Speaker 00

  Boom. He's back.

• 25:42Harley Finkelstein?

  Gents, great to be on the show. I think, are you, are you virtual? Are you local?

• 25:47Speaker 01

  I am virtual. I'm in San Francisco. I'm traveling, so I got the fake background to cry and kind of.

• 25:52Harley Finkelstein?

  I think, I think it actually plays really well. I was going to say if there's no gong, I'm out of here.

• 25:56Speaker 01

  No, no, Jordy is.

• 25:57Speaker 00

  We got you, we got you covered. We got you covered.

• 25:59Speaker 01

  Give us the first gong worthy number. I want Jordy to warm up.

• 26:02Harley Finkelstein?

  Okay, all right. Well, let's, let me give you three, because three, these are by far the most important. GMV 119 billion, that's up 29.5%. Revenue was 3.7 billion, that's up 32%. And free cash flow margin was 22%, which

• 26:21Harley Finkelstein?

  you guys know this, at our scale is remarkable.

• 26:24Speaker 00

  Yeah, I held up, I held up.

• 26:25Harley Finkelstein?

  Some massive companies, massive brands this quarter. Mac, Clean Eat, Balmain, Lululemon, all moving to Shopify. We're seeing more and more of this incredible, you know, commerce happen on, on agentic services. I think Q3 was really the era of like these new personal agents, which we've embedded with all of them. We're beginning to see real traction on the agentic side. But this is, this is, you know, this is the best of Shopify.

• 26:48Speaker 01

  Lululemon, that's a huge one. Is, is AI accelerating the pitch for a big brand like that? Because I imagine AI is incredibly useful at replatforming, moving things around, taking product detail pages, translating them, actually just doing all the grunt work that might be required to change e-commerce providers.

• 27:09Harley Finkelstein?

  I think every retailer is looking, is being asked by their board, hey, what is your AI commerce strategy? What is your agentic shopping strategy? And one of the things that I've said to, when I meet these brands, you know, even some of the, you know, bigger brands or, or older brands like, you know, Estee Lauder or Birkenstock or, I don't know, Hunter Douglas, is I will say, look, ultimately what I think you've all had to do for the last 20, 30 years is you've had to not just be an incredible retailer and a, and a brand producer and a product producer, but you also had to effectively become a technology company. You had to understand like, you know, online stores, you had to send servers, you had to send data rooms, you had to send, you know, how this all kind of fits together. And, and you, many cases, you even had your own like on-prem servers. I was like, I think that era is over.

• 27:54Harley Finkelstein?

  I, I think the era is now get back to building incredible cosmetics or great, you know, yoga apparel or whatever your product is, and let us handle the infrastructure around all, all of commerce. I think the agentic, everyone's sort of thinking about it. I think the numbers are actually, I mean, it's still on a very small base because it's so new. You know, we, we did $400 billion last year of GMV total. So it's still a fairly small base relative to overall GMV. But traffic was up 2.6x year on year. Orders were up 3.3x year on year. And, and more importantly, on the conversion side, if you just compare conversion using Shopify catalog versus general AI search, which is effectively scraping, it's 2x higher.

• 28:36Harley Finkelstein?

  And even in terms of what they're seeing from some of these, like they're seeing more, more, more new customers come on. But the real winners of, of AI so far has really been kind of the long tail. These, you know, like products that are outside our top 100 categories. And we have a ton of them on Shopify.

• 28:55Speaker 01

  I completed my first, oh, sorry, Jordan, you go.

• 28:58Speaker 00

  No, you go, go, John. I, I can't wait to hear.

• 29:01Speaker 01

  I completed my first agentic purchase on Shopify.

• 29:04Harley Finkelstein?

  What was it?

• 29:04Speaker 01

  I, I bought a raincoat. It was raining and I told Dot in chat GPT, I need a raincoat. Go find it, buy it, send it to me. Just do everything and it used Shop Pay and it has arrived.

• 29:16Harley Finkelstein?

  It's great, right? It's so seamless. It's so simple. One thing though, that I would say, John, that people are missing about the Shop Pay integration, whether it's Muse or Instinct or Claude, or CrocBot, is that by using Shop Pay, obviously the, the payment, the transaction is simple, it's safe, it's fast. But as part of it also, when you connect shop to, to these, these personal agents, your entire shopping history, the agent now understands, they give way better recommendations. Obviously the same payment details with Shop Pay, but also you now can track your package through the shop, shop app as well. So this idea of actually using Shop Pay almost as an identity system for these agents mean that no matter what agent you use, if shop is, and shop are connected to it, it actually has a perfect understanding about your buying.

• 29:59Speaker 01

  Yeah, yeah, I feel like we spent all last year talking about like, are you seeing agentic commerce yet? And it feels like we're still in the early adopter mode for sure, but it's starting to be real. I'm hearing more stories. Everyone has it access to at least a technology that can functionally do it. Whether they've leaned in and built the.

• 30:18Harley Finkelstein?

  Some of them are just using it still as discovery, right? I think, I think BFCM 2025, which we spent, we spent that day together. It was really about discovery. I'm looking for new products. I think now we sort of move from just discovery to discovery and just buy from it.

• 30:33Speaker 01

  Yeah.

• 30:34Harley Finkelstein?

  Like delegated, delegated purchase.

• 30:36Speaker 01

  Yeah, no, it, it actually is.

• 30:38Speaker 00

  So what, what are, what do you think's actually going to happen with this category? Because like I, you know, an agent cannot save me time.

• 30:48Speaker 00

  Versus just doing it myself with how good Shop Pay is like I'm like

• 30:53Harley Finkelstein?

  Yes, I think I think I think we go back to to yeah, go ahead.

• 30:57Speaker 00

  Yeah, I just as somebody who's like very AI pilled, but almost equally Shopify pilled, right? Like I've just been been buying things with Shopify for so long and it feels like every single year it gets like, you know, like significantly faster to complete a purchase like both like the

• 31:16Harley Finkelstein?

  I'll give you the example where I think where I think it is where I think you'd use just go to the online store, use Shop Pay, it's fast and easy versus John's example of the raincoat. If John had a favorite raincoat company, I think he would have gone directly to the site in a matter of seconds, would have checked out using Shop Pay. I think because he doesn't necessarily have a specific company that he wanted to purchase from, there was a there was an element there of research.

• 31:40Speaker 00

  Yeah.

• 31:40Harley Finkelstein?

  If you if I look back on like the last bunch of of transactions completed by personal agents, it's companies like RoboRock, which robot vacuums are everywhere, everyone has one, but this is specifically for a particular type of pet hair or We Things, which you guys are the brand, like it's it's a smart watch, it does not look like a smart watch or a car seat for three. This is literally a transaction happened or a car seat for three kids, a car seat for three kids that fit in the back of the center. So three car seats stacked. This is very different than knowing I'm going to go to this car seat brand, buy it. I want to do it. There's an element of discovery here.

• 32:20Speaker 00

  Yeah.

• 32:20Harley Finkelstein?

  Whereby the AI whereby the agent can actually digest a billion different SKUs, look at product attributes, cross-reference it with what everything it knows about you from shopper or elsewhere, and then say, hey, here's what you want. And I think for those type of purchases, this gets into a really interesting new area.

• 32:39Speaker 00

  Yeah, yeah, yeah. Okay, I think that's a that's a very, that's a very helpful way to think about it because personally, I would never just say like, I need a rain jacket.

• 32:49Speaker 01

  Get me a rain jacket.

• 32:50Speaker 00

  I would, I would, I would go to a handful of my favorite brands and look around.

• 32:56Harley Finkelstein?

  The direct to consumer, like the cool one, like rings or something like that.

• 32:59Speaker 00

  Yeah, there are, there are a bunch of other products where that are not like brand-driven purchases to me that don't, you know, I'm now I'm so curious to, John, you got to wear the rain jacket tomorrow, whether it's raining or not. I gotta, I gotta see.

• 33:13Speaker 01

  Your jaw is gonna be on the floor. You're gonna be like, that's the best raincoat I've ever seen.

• 33:18Harley Finkelstein?

  Yeah, I will, though, give a shout out, though, to, you know, to those that are listening to the show. And I know we have so many Shopify merchants that watch your show religiously, who are thinking about preparing for Black Friday, Cyber Monday. What I will say to them is to the conversation we're having, it is really important that you look at the knowledge, like the knowledge center inside of Shopify add-in to figure out like, what are agents seeing about your products? Because remember, like, we have syndicated all of your products into catalog. The catalog was built for agents so they can sift through everything, real-time inventory, the right product attributes and details. But if there are like details of your products that you are not telling it. So if this raincoat is really good in in New York City, but won't work in Toronto because it's too cold, that

• 34:00Harley Finkelstein?

  is a product attribute you should mention, like this works better in cold weather. Therefore, you will be found more if the consumer is searching for that. That is a very November 2026 recommend suggestion that was never actually that important because eventually consumers can kind of do their own research. But now it matters more than ever because the agent's going to surface whatever is the most merit-based product.

• 34:23Speaker 01

  Yeah, the big thing is measurements. I mean, for me, I'm six foot eight tall and like have specific proportions, but I've given my agent.

• 34:31Harley Finkelstein?

  Yeah, flex, John, flex.

• 34:34Speaker 01

  But I've given my agent like every possible measurement. And so it can go and sometimes it can look for this particular size and then translate, maybe it's in centimeters and needs to get over to inches or something. It can do imperial metric translations, but some fits are different. And so vending that to the agent in, okay, here's our sizing, here's how we benchmark against European standards, but then also here's almost like a 3D model of this item. Here's, here's the exact measurements and then the agent can translate that to match the human that's on the other end.

• 35:10Harley Finkelstein?

  One of my favorite Shopify merchants is a company out of New York called Goldbelly. Do you guys know Goldbelly? They're amazing. So I live in Canada now, but I love, I mean, you know, I grew up in the US, so I love getting like Katz's Deli delivered to to Montreal and stuff like that. It turns out that some products are easy, can go over the border easily from Canada, from the US to Canada, some cannot. Goldbelly needs to be specific to say like this type of fish doesn't like because of some duties and tariffs doesn't work, but this type of fish does work. Again, that was something that you probably thought about in, in, you know, in your, you know, it's some sort of line in your checkout where like, hey, like this won't work there. Now you actually have to merchandise your products to be able to say this ship's cross-border. Again, very, very

• 35:53Harley Finkelstein?

  new. I think what's also interesting is on the call today, I got most of the questions were really about agentic, of course, but it's interesting because the reality of what most merchants on Shopify need right now is actually like point of sale, it is international, it is like B to B functionality. It's sort of like the basic stuff. And so I think it's Shopify right now, we're in a very interesting time where we're sort of operating in two realities, which is building the future of commerce that people are excited by like agentic and at the same time, like actually powering like full stack, proper infrastructure for physical retail or for, you know, for for things like that. It's, it's fascinating to see how different types of demographics care about different things right now. And as shop, we're 14% of US e-comm, we have to sort of do both.

• 36:38Speaker 01

  Yeah. The reason why Katz has a huge line, we drove by Katz's Deli yesterday in New York and it was, it was a line down the block and now we know.

• 36:46Speaker 00

  Amazing, great spot.

• 36:47Speaker 01

  It's a good spot.

• 36:49Speaker 00

  Uh, question on agent monetization. So I'll give you the two situations. If I go to my preferred agent and I say, hey, I want this rain jacket, please like go, go buy it for me and make sure that it shows up at my house, right? The merchant is not going to have any desire to like pay any type of referral for that because the demand was already created. Like they did, they figured out how to reach me and convince me to buy their product somewhere or another, right? Attribution is hard, but that they created the demand. I was on their website. I found the product. In John's case where the agent did the research, did, did all this discovery based on John's preferences

• 37:31Speaker 00

  and then John goes and buys that product and effectively like created the demand for that product. There's a very strong argument in my view that that the merchant should pass back some of that revenue to the agent for basically generating that lead. But

• 37:45Harley Finkelstein?

  Yeah, I mean, that may happen eventually. Right now, the current economics remain completely unchanged. For Shopify merchants, like agentic transaction carry the same fees the online store transactions do. If a transaction flows through Shopify payments, the same economics apply. So from a merchant perspective, nothing really changes. If you look across like Muse or Instinct or Google AI mode or Microsoft Copilot and GPT, you know, like Shopify merchants default to Shopify payments. So the merchant should have, you know, it shouldn't make any difference whatsoever. Where it may eventually go, and I think I talked about this last time I was on the show, is what happened with agentic ads? Because I think ultimately agentic advertising will be one of the ways why these, how these agents

• 38:25Harley Finkelstein?

  actually monetize sending customers to your store. And I think the advantage in agentic channels is actually relevant. So I can, I can sort of see a time, and we've already integrated with with ChatGPT ads, for example, we announced in Q3 that all Shopify merchants can use the ChatGPT ads app to create and manage campaigns right on there as well. But we're not assuming that agentic shopping stays ad-free. What we're trying to do is making sure our merchants participate in it. So there may be a time where John buying his, his coat, if he actually, you know, does the search, has a conversation with his personal agent, and it shows them two different things, and he clicks on the one that actually is sort of in the sponsored bar, that that merchant has to pay some sort of commission

• 39:10Harley Finkelstein?

  to the to the application.

• 39:13Speaker 00

  To me.

• 39:13Harley Finkelstein?

  That hasn't happened. I think it's going to be like Google where you've always had ads, but most people click on the organic searches because it feels more legitimate. It feels more

• 39:21Speaker 00

  Yeah.

• 39:21Harley Finkelstein?

  organic.

• 39:22Speaker 00

  But I guess, but I guess what I'm, what I'm getting at is like, I still think that in some ways, I think it would be relatively fair, and I don't think merchants would have a big issue if agents are creating all this demand, as long as they're showing, as long as they're willing to pull from the entire Shopify product catalog and they're not just picking and choosing, right? Like if it's something that a switch, you can toggle on or off, but.

• 39:45Harley Finkelstein?

  I think if it's merit-based, I think you're right. I think consumers, I think merchants are used to paying for traffic, paying for for customers. I think if it's done, I think right now, best I can tell, the AI applications wants to get as many consumers using these AI applications as much as they can. So John having an amazing experience with the raincoat means he's probably going to come back for the next time. I think right now that is what their focus is.

• 40:08Speaker 00

  Yeah, absolutely. Well, great stuff. Thank you for coming on.

• 40:14Harley Finkelstein?

  Appreciate it.

• 40:14Speaker 00

  Massive quarter.

• 40:15Harley Finkelstein?

  Thanks for having me.

• 40:16Speaker 00

  Road to, road to BFCM.

• 40:18Harley Finkelstein?

  BFCM. It's gonna be a banger.

• 40:20Speaker 00

  It's upon us. It's upon us.

• 40:21Harley Finkelstein?

  I can't wait.

• 40:22Speaker 00

  I can't wait. Awesome. Cheers, dude.

• 40:24Speaker 01

  Talk to you soon. Goodbye. Let us all tell you about Cisco, critical infrastructure for the AI era. Unlock seamless, real-time experiences and new value with Cisco. We have Bridget Mendler, Northwood Space, back on the show. We talked like a month ago. I think it was a fun, always a joy, Bridget. Welcome to the show.

• 40:45Speaker 00

  Out of control, out of control.

• 40:47Bridgit Mendler?

  You know, we gotta, we gotta keep the regular cadence of conversations. So I gotta, I gotta keep doing things.

• 40:53Speaker 00

  I know.

• 40:54Speaker 01

  Give us the round. Give us the details. The gong's warmed up. I want Jordy to

• 40:58Bridgit Mendler?

  Rock on. Um, yeah, we just finished our $375 million Series C fundraiser. So that's

• 41:07Bridgit Mendler?

  Thank you. Thank you very much.

• 41:10Speaker 01

  And we talked last time, but what was the key unlock? Is it a technology milestone, financial milestone? What really unlocked this particular fundraise?

• 41:22Bridgit Mendler?

  I mean, we're asking ourselves a series of questions. The first one is like, can the tech do what we say it can do? So we have the two products. There's Portal, which is our C2 product. And then there is Prism, which is the high throughput product. We've now validated them across not just lunar orbit, but all the way up to deostationary orbit. And the real thing that matters for us is that capability, demonstrating it, but also on a timeline that is relevant. So we were able to turn that capability around, get it fielded in a matter of days. So it's basically, you know, can we perform at speed? And can we actually hit the performance specifications that we are saying we can do? And then at that point, it's a question of scale. Have we kind of proven to ourselves that we can actually scale this product?

• 42:04Bridgit Mendler?

  We have produced at this point 29 units of hardware across the products. We've done two production runs. We're now at our bigger scaled up facility, 185,000 square feet that's ready to produce hundreds of antennas. And so we kind of convinced ourselves we were ready for that scale. And then ultimately, it's been, you know, a tremendous year for the space industry in terms of just validating the original Northwood premise, which is the volume and data is going to go up by a lot. So yeah, we were ready for the next milestone.

• 42:31Speaker 00

  Super impressive. And then demand, like demand side, like what's going on on that front? Like, I'm assuming a lot of it's still like, kind of, hey, if we do this thing, like, will you give us a lot of money? And so far, it seems like the answer is yes, but break that down.

• 42:47Bridgit Mendler?

  Yeah, I mean, there's the whole range from a lot of net new signed customers, as well as exactly what you're saying, which is huge amounts of demand as new customer sets are examining space fresh for the first time on the commercial side, but also on the government side, just huge waves of funding and programs that are becoming more solidified. So all of those things at the same time, and a lot of different customer priorities. But that's what we're, you know, built to support.

• 43:16Speaker 01

  Are you thinking about the breakdown of different opportunities in space? Obviously, there's a lot of satellite internet traffic. That's so exciting. There's imagery that's happening. There's also AI potentially happening, but unclear how bandwidth heavy that will be. And then just yesterday, SpaceX announced Starfall doing microgravity experiments for bio. I have no idea how bandwidth constrained those types of experiments are. But what's on the horizon that you think will either be uniquely unlocked by Northwood or just be another tailwind for you?

• 43:54Bridgit Mendler?

  Yeah, I mean, exactly. Like, the industry is diverse. And frankly, like, that's what we think is really important and what we're solving for. So the way that we design our product is so that we can fit as many industry use cases into Portal and Prism, our two product lines as possible. And so when we're looking at those use cases that are coming up and are interesting, the kind of like overall customer requirements that are customer features that align with us. Is it a customer that cares about scale? And is it a customer that cares about reliability? Like, these are customers that are managing constellations that need to hit that scale on aggressive timelines, but also really assure high levels of uptime that historically, you know, third-party ground has not been able to offer. So that is things like comms.

• 44:39Bridgit Mendler?

  Comms is a use case that has a particular amount of pressure there. And I think, as you said, pushing into higher and higher throughputs is a really exciting problem. And for me, I think that's especially exciting as we talk about overall volume of data in space becoming more important. But use cases like you described, whether it's Starfall or others on the actual lower bandwidth side are also tremendously exciting. And it's also a very key national security priority. So, yeah.

• 45:04Speaker 01

  On the national security side, what's the supply chain look like? I was reflecting on the fact that the new iPhone, I think we're on 18. It's been almost 20 years. I think this one is the first one that has an Apple modem in it. They finally moved on to their own hardware stack. And I'm wondering, like, are you supply constrained in any way? Or are you thinking about? I don't even know what goes into building a ground station. Are there rare earth magnets? Or is it just metal and aluminum? Or do you have licensed technology and IP from like Qualcomm or some other company? Like, what does that supply chain look like? I imagine you're not bottlenecked right now because you're still growing the company. But what's coming down the pipe?

• 45:44Bridgit Mendler?

  I mean, I don't think there's a single hard tech company that is not supply chain impacted. It's just like, what are the strategies that make sense for the company to address that? And I'd say that's where the new capital comes in. We're at a stage now as a company where we're making, you know, different sets of decision calls about how we can scale up production, whether that be deepening vendor relationships. So like, we've had some relationships we've been building since day one with vendors that are non-traditional to these space problems. And really, now we can indicate higher levels of volumes, which helps get us, you know, special engagements with those partners. So that's great. But also, we're at this point able to implement bringing more things in-house. So we're also doing that strategically

• 46:27Bridgit Mendler?

  with a whole wide range of pieces of our stack for exactly the reasons that you mentioned. And then also sometimes, whether it be for like a performance or cost reason, but also, you know, any areas where we're kind of pinned down by vendors' timelines, that's where we seriously consider insourcing.

• 46:45Speaker 00

  How many countries are you guys in now?

• 46:48Bridgit Mendler?

  So we're in building nine countries. Yeah.

• 46:52Speaker 01

  Wow.

• 46:55Speaker 00

  Is that, is that, is, like, what's the ceiling on countries? Like, I'm assuming that it's not like, I'm assuming it's not like, we have to 10x.

• 47:06Bridgit Mendler?

  Every country?

• 47:07Speaker 00

  Yeah, yeah.

• 47:08Bridgit Mendler?

  Yeah. Yeah, yeah. So there is, you know, if you look at SpaceX, for example, like, their market access program is tremendous. I think they have nearly covered most countries, which is insane and super, super cool. But that's more on the consumer side. So on the actual, you know, backhaul side, which is the side that we focus on, it turns into basically like looking at a map and then plugging in a satellite elevation and determining, you know, where you need to have visibility and where you need to have like extra density in a network. So I'd say there's still a lot more to go for Northwood. You know, we will be dramatically increasing that number in terms of both density and in terms of diversity.

• 47:53Speaker 00

  So we should expect a 10x year over year.

• 47:58Bridgit Mendler?

  I mean, I was, we're a startup here. We're trying to 10x everything year over year.

• 48:03Speaker 00

  There we go. 90 countries by, by, by.

• 48:06Bridgit Mendler?

  9,000 countries.

• 48:07Speaker 00

  9,000 countries. And I hope you enjoy, I hope you enjoy a lot of travel. John, what were you gonna say?

• 48:15Speaker 01

  I was gonna ask about hiring. Just what is the balance between like PhD, industry veteran, someone who's been working on the foundational technology for their entire career versus young person who might be able to get up to speed faster in the AI era, but at the same time, they might not know to identify a hallucination? How have you been balancing the role of young people in the organization in the AI era?

• 48:44Bridgit Mendler?

  Yeah, yeah. I would say if you have any interest in the work at Northwood and if you have a lot of, you know, fire and what I like to describe horsepower to just get things done quickly, then we definitely are really excited about new grad talent. I think there is a lot that new grads can do and can contribute. You know, I think there's a SpaceXism about what the exact ratio is of, you know, more senior talent to more new grad talent and really like what the optimal balance is there. But I think, I think there's so much ownership that new grads are bringing to Northwood when they come in the door. So we've been really impressed by what folks can get done.

• 49:29Speaker 01

  Awesome. Well, congratulations on the new round. And we'll talk to you soon, Bridget.

• 49:33Speaker 00

  Go for one more, go for one more before the end of the year. There's still, there's still.

• 49:38Speaker 01

  Still a couple of months.

• 49:38Speaker 00

  So like 50 days till Christmas, you know?

• 49:41Bridgit Mendler?

  There's not a lot we got in the chamber, guys. So we'll see you soon.

• 49:44Speaker 00

  Awesome. Great to see you. Congrats to the team.

• 49:48Speaker 01

  Let's tell you all about Pigma. Agents, meet the canvas. Your AI agents can now create and modify your Pigma files with Design System context. We got Tyler in.

• 49:58Speaker 00

  There he is.

• 49:59Speaker 01

  Tyler taking over. I'm gonna drop off for this one. Well, the semi-analysis crew hops on. Have a good one.

• 50:06Speaker 00

  Cheers, John.

• 50:07Speaker 05

  See you, John.

• 50:08Speaker 00

  It's good to see you, Tyler.

• 50:10Speaker 05

  Likewise.

• 50:10Speaker 00

  You are.

• 50:11Speaker 05

  Good to be here.

• 50:12Speaker 00

  Physically around half the man John is, but spiritually 100%. So it's great to have you. We have multiple people from Semi Analysis joining. Any minute now, we can, can head over to the timeline and see what's going on.

• 50:35Speaker 00

  Take him, what's going off on, on, on Apple earnings yesterday? Says, "Live by the sword, die by the sword." It looks like services revenue from Apple's search royalty deal with Google will decelerate significantly going forward. That's bad news for Apple. I don't know. Like, obviously not great because they just completely, you know, that deal was just like flowed directly to the bottom line. But they had to, you know, all good things come to an end.

• 51:06Speaker 05

  That's true. That's true.

• 51:09Speaker 05

  I think we got the, we got the Semi Analysis crew here.

• 51:11Speaker 00

  Let's do it.

• 51:15Speaker 00

  Coming in. Here they are.

• 51:21Speaker 00

  We got five of us. Incredible. Incredible.

• 51:25Speaker 05

  How's it going, guys?

• 51:27Speaker 00

  What's up? Welcome to the show. Thank you, thank you. Gentlemen on the left, introduce yourself because I think it's the first time. And then I don't know who this other guy is, but I think he, I think he's a big yapper. So looking forward to hearing from him, too.

• 51:44Speaker 06

  Yeah, for sure. Well, first, just thanks so much for having us, guys. My name is Max. I co-lead the Tokenomics team here at Semi Analysis. Tokenomics is just the top of Semi Analysis's full stack coverage. We focus on things like the AI labs, the clouds, the data companies, application AI companies, et cetera.

• 52:03Speaker 00

  Amazing.

• 52:05Speaker 06

  How's it going, guys? I'm Andrew. I recently joined the Tokenomics team working with Max here.

• 52:09Speaker 00

  Amazing. Who's this other guy? Hey, guys. My name's Dylan.

• 52:15Dylan Patel?

  I'm a big loser, so thanks for having me on.

• 52:17Speaker 00

  Awesome. You guys, yeah, let's get right into it. Why don't you introduce GDPRX? And then we can go into some of the takeaways from it.

• 52:27Speaker 06

  Yeah, for sure. So GDPRX is, in our opinion, the single best benchmark for measuring frontier model capabilities.

• 52:38Speaker 06

  We think previous attempts at comprehensive benchmarks, most notably OpenAI's GDPRVal, are sort of fundamentally misguided because they pick their domains based on percentage of GDPR or using things like the SOC or ONET taxonomy. Whereas we believe that sort of the first trillion dollars of AI revenue are going to be extremely concentrated in certain domains. The ones that can sort of move fast enough to actually adopt this new technology and also sort of have high enough of a skill ceiling to continue using frontier intelligence at high ROI. And so we made a benchmark focused exclusively on those domains, which are things like chip design, biology, cybersecurity, RSI, et cetera.

• 53:24Speaker 00

  Okay, so my first question is,

• 53:29Speaker 00

  how did you think about the gap right now between AI's ability to execute on tasks and do them in an effective way versus roles, right? Because I think like, as you look out, as I look out into the next year, and especially right now with the sort of market jitters that we're having, it feels like we need a capability jump in the same way that we had, like similar to what we had in, let's say, Q4 of last year, where there was like this momentary correction because everyone was, sort of had this idea that chatbots were going to create, you know, trillions and trillions of dollars of value. And then there started to be some skepticism and you remember there was sort of like, very momentary like correction and then we got agents and everything ripped again.

• 54:14Speaker 00

  And it feels like right now, like, my question looking at this, you know, at the benchmark is like, are you guys thinking about, obviously, there's a lot of room to run for all the models? But like, how are you thinking about like, sort of broad capability increases versus just like scaling up intelligence in these specific domains?

• 54:36Speaker 06

  Yeah, so I actually don't want to go into this too in depth because we're currently working on a demand model to sort of project 27 and 28 OpenAI and the topic revenue, which is kind of, is going to lay out in full detail the semi-analysis.

• 54:51Dylan Patel?

  I do think we can say some things though, right?

• 54:53Speaker 06

  Yeah, I'm going to give the overview for sure, or you can go ahead.

• 54:56Dylan Patel?

  Yeah, I was just gonna say, like, I think it's very like, people tend to think that AI will diffuse very broadly and that everyone will use a ton of AI and that's going to drive AI spend. But we have a very different view of this, right? We don't actually think that that's the case. We think that there's a lot of challenges to AI being adopted this way. We think that the general populace will not be able to effectively use a ton of AI in their tasks. And given the fact that AI at a given level of capabilities falls anywhere from 100x to 1,000x in cost a year because of the insane progress that these firms are having in research, data, compute, et cetera.

• 55:38Dylan Patel?

  It means that, you know, the places where you actually can absorb all of this usage of AI is where, you know, sort of people can take extremely large amounts of intelligence and get ROI from them quickly, right? Replacing white collar work is something that will happen, right? But that's not something that's going to drive the first trillion dollars of AI spend. Those are not industries that are going to diffuse AI capabilities quickly. It's going to take them quite some time to, you know, reorder how their OpEx is spent, right? Because companies just have a lot of inertia with regards to, you know, people's jobs, you know, changing how their compensation works, changing how many people work on what. There are areas where we think that intelligence is very, very important, though.

• 56:22Dylan Patel?

  These include areas like chip design, cybersecurity, financial services, life sciences, material science,

• 56:32Dylan Patel?

  you know, software engineering. And in that, you know, there's sort of two, you know, there's, you can absorb unlimited intelligence, essentially. And there's two reasons for that. One is that it's just a domain where humans aren't anywhere close to the frontier and there's just so much to discover. Think material science, think chip design, think anything in the scientific realm, right? We figure out new stuff, we deploy it, we make everyone's lives better. There's the other world, which is adversarial, right? Think specifically finance and cybersecurity. It's human versus human. And we're constantly just going to be leveling up, either trying to arb each other, you know, like quants do and, you know, make markets, or it's going to be, you know, constantly trying to hack and then defense, hack and defense. And so there's this like constant

• 57:17Dylan Patel?

  demand for intelligence because when you have more intelligence than the other parties in the market, you win.

• 57:23Speaker 00

  Yeah, so specifically though, on, let's say like material science, like if I throw, if I spend a billion dollars on tokens and I come up with a bunch of, a bunch of like, basically like ideas, there's potentially like a duration, I might have like a duration problem where I have hundreds of like sort of promising ideas, but then that creates, those ideas mean that I actually have to put spend behind each idea to sort of run them down and see if they're viable. And there still could be this like massive multi-year lag. And so I'm wondering like, my question is like, what is the willingness to spend for some of these companies that obviously have, you know, massive balance sheets?

• 58:07Speaker 00

  They could either be heavily funded startups or they could be, you know, large sort of legacy players in these domains. But I'm struggling to see how you can get a hundred billion dollars of spend in one, you know, in a domain like this, just because very quickly you're not in a situation where you're like, we have a shortage of ideas. It's like, we have a shortage of capital that we can put and point at these different experiments. Does that make sense?

• 58:37Dylan Patel?

  Yeah, so one thing that I think we can sort of point to is there's two domains, right? When you think about science, right? There's discovery and there's engineering. And everyone always talks about the discovery side of things, but actually the bulk of the spend is on the engineering side of things and you have to get really good at the engineering before you can discover something and bring it to market. And so when you look at, for example, Periodic Labs, they are a company that's specifically focused in this realm. Most of their work is on engineering, right? Increasing the engineering velocity of these materials. Hey, if I make something, you know, this sort of deposition technique, 10% more efficient, is that going to be, what is the benefit to humanity? And actually, it's not about inventing a new material.

• 59:21Dylan Patel?

  They're of course going for that as well. But if I improve the, you know, the, let's just say, you know, in semiconductor is the deposition of something and so then your chip has less resistance or you can shrink it a little bit further, that's so much economic value that is immediately delivered. Or hey, I'm a battery company and I'm optimizing my, you know, you know, my anode or my cathode or whatever it is and I've made it have 5% more capacity. That is so much economic value delivered to society. And it's a bunch of small engineering. And the big problem here is when we look at software engineering, everyone's like used to pretty advanced software engineering techniques. But if you go look at the broad space of any of these companies in batteries and semiconductors,

• 1:00:04Dylan Patel?

  in many, in automobiles, in aerospace, all of their tooling sucks. And their research velocity is slow, their engineering velocity is slow. And so, you know, using AI to create simulations to help judge all of the data that's coming out. You know, in Intel wafer, you know, they've made this comment. Intel, when they make a wafer, they have about 100 terabytes of data that gets generated. And they don't do anything with the vast majority of it, right? There's, there's small loops that get closed, right? Oh, from this tool to this tool, there's a small loop, use the data, modify it a little bit. But what, how do you possibly analyze all this data when most of your, you know, PhDs in material science and chemistry and all this stuff

• 1:00:47Dylan Patel?

  are, you know, using Excel and MATLAB, right? And MATLAB is if they're sophisticated. So how about you have AI help this become, you know, something much more advanced in terms of, you know, the data analysis, in terms of extracting information out of this stuff, in terms of building models, building simulations and closing that sim to real gap and then actually allowing you to make progress at a faster pace. And it could mean, hey, immediately I could figure out things that improve my yield. You know, if I take, for example, and it's quite simple, right? The chips sit on substrates, substrates route the wires in and out and power in. Those, the substrates for CPUs, this is stuff that isn't even that complicated, you would think. It's been around for a while. The yields there are on the range of 40 to 60%.

• 1:01:31Dylan Patel?

  What if those yields become 95%? The economic value that's generated is massive. Or let's take an Intel fab, their fabs are lower than TSMCs, the yield. If their yields are now all of a sudden higher than TSMC or equivalent or, you know, both of them just raise yields massively, the economic value that can be delivered is massive. Take Nvidia, right? It takes them two and a half years to go from design concept to shipping a chip in volume production. What if it takes them a year, right? That architecture idea they had two and a half years ago or that change that they're trying to make, you know, a year into the process that's, you know, holding everyone up and pausing things, all of a sudden they can change it and do it much more quickly. If they wanted to bring optics into the chip, what about all the simulations that they can do?

• 1:02:13Dylan Patel?

  And they can bring optics to, you know, co-package optics to reality much faster and get the step function improvement and performance of chips and networking speeds. All of these things are rate limited by the, by intelligence, right? There's obviously a lot of physical difficulties, but the experiments that these companies are running are not able to close the loop quickly. They're, you know, the loops are very small, the domains that people operate in, right? The amount of siloing is just so massive because the complexity here is far beyond that of any software engineering. And so the models need to get really, really good at these things before they can assist these people and, you know, help close this loop in a full circle, right? And then optimize the heck out of these things, make these experiments that you're running.

• 1:02:55Dylan Patel?

  You know, have that data actually influence the design and go towards the right process, improve the yields, help you shrink faster, help you do whatever it is and then actually generate hundreds of billions, if not trillions of dollars of economic value to the world.

• 1:03:10Speaker 00

  Talk about the incentive for people building in these domains using the models to not want to talk about what they're doing publicly, right? Because I feel like part of the current disillusionment with the state of AI is that you have a bunch of new software being created, software engineers are obviously happy, look, I shipped this new feature, or you have like really cool-

• 1:03:35Dylan Patel?

  I don't know, bro, I think software engineers are depressed, by the way.

• 1:03:38Speaker 00

  Yeah, yeah, but at the same time, you have like the excitement of like Carpathia making like HackerTube, right? And everyone's like, oh, that's really cool that like you can do a two, three, you know, sentence prompt and like create this like sort of novel product that maybe wouldn't have been worth putting the effort into historically. But I feel like when you talk about these domains like material science, like I know from having built businesses in the past, like if I figure out like one simple trick, I assume that like it's only gonna be like, you can only arbitrage it for like a certain amount of time before it becomes sort of common knowledge. And so there's an incentive, or even another example, like if I find an amazing freelancer, like I'm not gonna try to introduce them to like 20 people because I don't want my competitors

• 1:04:23Speaker 00

  or other companies in the category to have access to them. I assume over time, they'll probably, that person will meet a bunch of people. But like, right now, when you talk about, you know, these domains where you can have like a 20% efficiency gain or things like that, there's so much, like I assume that you guys are calling all these people and like trying to understand the kind of like gains that they're getting, but they're not exactly like raising their hand and going on LinkedIn or going on X and saying like, oh, we're getting this like massive speed up or efficiency gain here and we want to tell everyone. Because they want to like get as much out of it as they can before it becomes sort of more common knowledge.

• 1:04:59Dylan Patel?

  There's definitely a big difference in hustler culture, right? In sort of software and founder land and SF and sort of these things versus, you know, these industries that have, that are manufacturing and making the world go, right? And work and operate. I agree that they're not gonna stick their hand up and scream what they're doing. They'll do some vague stuff, hey, we improved our manufacturing efficiency, hey, customer, here's what we did. It'll get out there, right? You make your product better, everyone will understand that you made your product better. Your financials get better, everyone will understand that your financials got better. These are just like obvious facts that are public. And so, you know, we're in the very early innings of these things, to be clear, you

• 1:05:42Dylan Patel?

  know, whether it be material science or semiconductor engineering or whatever, whatever very hard science thing it is. But our sort of like, one of our main focuses from GDPRX, looping it back, is to focus on these areas where we think AI has to improve drastically in order to deliver a trillion dollars of revenue. And now we at Semi Analysis are very bullish on this happening, on AI delivering a trillion dollars of revenue, you know, just open AI and Anthropic and the leading labs within the next couple of years. You know, the two, you know, Max and Andrew will call me bearish for saying in two years, but generally, you know, if those areas don't deliver, then yeah, we're gonna like, we're gonna saturate all the existing tasks pretty quickly and spend well, and diffusion of

• 1:06:26Dylan Patel?

  like white collar work replacement will be too slow, and these companies will actually not even maybe be able to make their compute commitments, right? It's like, that's like sort of, and I think the AI labs, I think us at Semi Analysis, I think the people who are really in the know see the tremendous progress that's happening. I mean, Max or Andrew, why don't you talk about the material science eval a little bit that we did and some of the things that our PhD collaborator sort of found?

• 1:06:51Speaker 06

  Yeah, I'm sure you want to take this one, Andrew? Yeah, basically like, our collaborators like found that like the models are much, much better than they previously expected. And so they had like a moment where they had to like sit back and be like, wait, like, this is actually better than a lot of like, the stuff people are putting out there in papers. And like, in fact, and like one of the problems, like Astra, for example, solved like a subtask of a task better than like a state of art, state of the art reference, published reference. And so that was like a big moment for them. So it's very clear that the models are very spiky in these categories and are increasingly better and reaching like above, you know, superhuman baselines, but you know, still

• 1:07:34Speaker 06

  like even on our benchmark, the best model, Astra, material science, only reached like 28%.

• 1:07:40Speaker 05

  Can you talk about the value of like using human baselines in these? I noticed there was no human baseline in these. Is that because this benchmark is just like so general and like it wouldn't make sense to, for someone to be so good at all these different things? Or why is there no kind of human baseline compared to a person here?

• 1:08:01Speaker 06

  Yes. Someone actually tweeted about this and I replied to him. It was, it's funny because it's very, it's very hard to put a human baseline on these, right? Like, if Astra just gets better than like state of the art, like teams of researchers, like what is a human baseline there? I mean, maybe for software engineering, you could say like this could take X days of software engineering, but like some of the stuff is just like teams of hardware engineers would have had to do to get done, like in our hardware design task or our chip design task, like that's not one person, that's like many, many people working together. And it's very difficult to even put a number on like the amount of hours or days that it would take for those people to accomplish, like finish even those tasks that we have.

• 1:08:45Dylan Patel?

  And we're well past the point where we're trying to measure, you know, our models similar to humans. It's like, we're trying to measure, when will models be superhuman? Because we're not gonna pay for models that are similar to like regular humans. People are only gonna pay for models that are superhuman in certain domains and then utilize them to advance humanity.

• 1:09:03Speaker 00

  I'm so curious, we were talking about this earlier on the show, how should people read into Elon's post, I believe it was Saturday, that like Grokbot is just too expensive to run? Sorry, tangent, but I'm curious what the, what the house take is on that.

• 1:09:23Speaker 06

  Like, it might be too expensive to run today, especially when you consider sort of like the CPU and you know, sandboxing costs needed per user. But I think one thing to understand about these personal agents is that it's very likely you will not need sort of the smartest frontier model a year from now in order to like serve the majority of people. And sort of the cost to serve will actually undergo this, you know, potential 100X plus. I follow the same trend as essentially the decrease cost of intelligence that Elon was talking about. So even if like personal agents are really expensive to serve today, I think it's very likely that they are totally economical to serve a year from now.

• 1:10:02Speaker 00

  I know, so what's the logic? You have a product that people love, that's like, you know, gaining traction, and then you basically like have everyone hit their usage limits, you know, suddenly, and then say, oh, it's too expensive. Like Elon has been on the record saying that he thinks that Grokbot will, one day, and again, I don't know how much to read into this, but he's like, he thinks that Grokbot will, will consume the majority of their compute over a longer time horizon. So like, what, what, you know, assume the cost is gonna drop 100X, like why do you, why do you stop like subsidizing that when it's seemingly working?

• 1:10:41Dylan Patel?

  Well, you have to remember what Elon's trying to do right now, right? He's taking SpaceX and turning it into a NeoCloud, right? In some sense, right? He's building ridiculous amounts of compute and, you know, he's only got, you know, if you take his balance sheet, you know, he's got what, like $80 billion of cash on it, $20 billion is gonna go to, you know, rockets and stuff like that, but then the other $60 billion he can spend on compute, he's raising another $40 billion right now. At the same time, he claims he wants to build 13 gigawatts. 13 gigawatts, if you build all of that out is, is, you know, you know, 400 plus billion dollars, right? You know, 500 plus billion dollars. So where does he get the cash, right? He has to monetize his compute as effectively as possible to be able to pay for all the CapEx that he wants to do.

• 1:11:25Dylan Patel?

  And given what's going on in the spot compute market, right? You know, being able to sell GPUs for, you know, $15 an hour, when the TCO of them is only like $4 an hour, you have this massive delta. And so he's exploiting that and he needs to focus on, how do I build the most compute, period, right? And that's, that's step one. Step two is, okay, how do I use that compute most effectively to dominate the universe, right? It's sort of like, I don't know, if you're like, take a evil look at it, I'm sure it's just to, it is just to benefit humanity, but the only way-

• 1:11:57Speaker 00

  But also a little dominate a little bit.

• 1:12:00Dylan Patel?

  Yeah. But the only way to build 13 gigawatts or even 10, or even seven financially, is if he makes as much money as possible from the compute he has. And so if that means, hey, he ripped some compute out of the XAI's team to sell it to Anthropic and Google, he had to do that, right? Because ultimately, a year from now, his XAI team will have a lot more compute to deliver by doing that. And so he needs to be able to generate all this cash flow and sort of bridge the financial gap to get him to being able to spend 300, 400, 500 billion dollars on CapEx over the next year, year and a half.

• 1:12:33Speaker 06

  Yeah, and he's got to convince people that the going rate for these gigawatts is not the 12 to 15, you know, billion a gig that people are signing five-year contracts for, it's the, you know, 40 billion plus a gig that he was able to sell this like short-term contract to Anthropic for later this year. But if you look at people who are actually all in on the personal assistant, like, you know, Meta, Muse, I do not see them seeing, you know, stopping the subsidization anytime soon, because they know it's gonna become economical like a year from now and all that really matters at this current point in time is we get the adoption, you know, we get the users.

• 1:13:07Speaker 00

  Makes sense. Any other questions, Tyler?

• 1:13:13Speaker 05

  I think, yeah, this is great.

• 1:13:15Speaker 00

  Recovered it.

• 1:13:16Speaker 05

  Yeah.

• 1:13:17Speaker 00

  What else is top of mind for you guys before we jump off?

• 1:13:21Dylan Patel?

  I think one other thing that's really interesting is, you know, the frontier models are actually not the best at certain tasks from OpenAI and Anthropic because they're safety classifiers, right? Google and Meta and the Chinese models are better at like cyber tasks, at biotasks, at certain alignment tasks. And that presents a really interesting opportunity that certain markets should just actually not use OpenAI and Anthropic, unless they get into some specific sort of tent that OpenAI and Anthropic are willing to give, which labs like us at least are not able to.

• 1:13:58Speaker 00

  Just reminded me, something I wanted to ask earlier. It feels like there's a massive incentive right now for companies to come out and say, you know, we're bringing compute on-prem and we're running open models and we're getting...

• 1:14:13Speaker 00

  And how much should people read into that? I think the headline yesterday, I couldn't tell if it was real, is that Goldman is sort of banning the use of Claude code and Codex internally and other coding agents? To me, that seems kind of like an insane move, given that they're, you know, underwriting the IPO. And it also feels like you're sort of betting against frontier progress and capability increases. But like, how should people think about those kind of headlines?

• 1:14:48Speaker 06

  I think this is really funny because... Go ahead. I was just gonna say, like, it's really funny that they would do this because like even on our finance like benchmark, it was very clear that none of the models were even able to like successfully do a task of an analyst. Like, the closest one got to like 50% of the credit or something. So like, even like if you use open models, you're just like shooting yourself in the foot because you're just like using worse models. And like even the frontier models aren't there. Like, imagine how much worse like an open source model would be. But I think on-prem slash open source, it is a real market. It is going to keep growing like pretty fast in absolute terms.

• 1:15:29Speaker 06

  But if you sort of believe that the world has these fundamentally intelligence bald domains, which like Dylan was explaining at the beginning, and that people will be able to figure out how to use frontier intelligence in order to sort of earn high ROI in those domains relatively quickly, then you would expect sort of the market for frontier intelligence to grow faster on a relative basis than sort of the on-prem slash open source market, even if like both of them still do pretty well kind of just in isolation.

• 1:15:56Speaker 00

  Yep. That makes sense. Cool, guys.

• 1:16:01Dylan Patel?

  Yeah, we do believe the bulk of tokens will be non-frontier models. We just think the bulk of dollars will be frontier models. And so like, you know, great if Goldman bans their random, you know, year one, year two analysts from using Claude code. You know, that's probably a short sighted move, but you know who they're not gonna ban from using Claude code? All of their pen testing. And they're gonna have to spend a lot of freaking money on pen testing because if Goldman's not secure, that's really bad.

• 1:16:31Dylan Patel?

  Yeah.

• 1:16:31Speaker 00

  Yeah. Well said. Cool, guys. Very... Thanks for coming on and breaking it down. And I'm excited to see how quickly all of the different participants can hill climb this. You've certainly given them a lot of work.

• 1:16:49Dylan Patel?

  See you guys.

• 1:16:50Speaker 00

  Awesome. Cheers, guys.

• 1:16:56Speaker 00

  Let's see if there's anything else we want to cover.

• 1:17:01Speaker 05

  I think we got John coming back on. Oh, there he is.

• 1:17:04Speaker 01

  I got the flashbang. The weather changed outside my hotel room, so it's full, much brighter than before. But you can do a three up if you want. We gotta go through a couple more news items. We gotta talk CrowdStrike. First, let me tell you about MongoDB. What's the only thing faster than the AI market? Your business on MongoDB. Don't just build AI. Own the data platform that powers it. No, I like this. So CrowdStrike's acquiring two AI security startups for a combined $495 million. Fiddler AI and Dread Node, such different names. One is like the most whimsical. We're just Fiddler.

• 1:17:44Speaker 00

  A person who plays the violin, particularly in folk bluegrass country or traditional rural dance music, the Fiddler.

• 1:17:51Speaker 01

  I love it. I love it. Yeah. It's funny. They're taking security so seriously that they're just doing bulk acquisitions, announcing them simultaneously. But George Kurtz had a great post as well saying that he's creating the emergency button. I forget exactly how...

• 1:18:08Speaker 00

  The kill switch.

• 1:18:09Speaker 01

  The kill switch, which is something like every, I think like Bernie Sanders has literally asked for that. And like many other people have been like, we need an AI kill switch. And the labs have said that there is like effectively a nuclear football, that there's a device that can, you know, take everything offline. But I think every company wants an AI kill switch. So good market positioning, good branding. You know, people are rebranding compute data centers to compute campuses. Our buddy over at Now the Atlantic, Mike Isaac, wants to use the term, doesn't want to use data centers. He doesn't want to use compute campuses. He wants to call them databases, the base for all the data. I like that.

• 1:18:53Speaker 01

  I'm still supercomputer camp, but...

• 1:18:55Speaker 00

  Yeah, we've had the perfect name for decades, the supercomputer.

• 1:19:00Speaker 01

  I know. The supercomputer. It just sounds so good. And it even fits with like the new, the new superintelligence push. The other news, there's a bunch of OpenAI news here. They hired Dan Driscoll, former TVPN guest. We got him, US Army Secretary.

• 1:19:17Speaker 00

  This goes deeper than I thought.

• 1:19:18Speaker 01

  I really enjoyed talking to Dan Driscoll when he came on the show. It was a very funny moment for us because it was like, we were just having fun on our show. There was like, now we're talking to the Secretary of the Navy, or the Army. And yeah, the reactions that day, there were some quote, it was like, TVPN's talking to the head of the Army?

• 1:19:41Speaker 01

  It had turned from like us just purely joking around to like us joking around with like our friends. And obviously we had some very successful founders and venture capitalists on, but it was still like very, very lighthearted and pretty low stakes interviews, just people yapping about their takes on the market business. And then this one was like, so good to see him hopping in.

• 1:20:02Speaker 00

  SpaceX

• 1:20:04Speaker 01

  Yeah.

• 1:20:05Speaker 00

  has introduced Starfall, which enables affordable routine access to a microgravity environment, providing unique opportunities for manufacturing, scientific research and testing in low Earth orbit. SpaceX says Starfall is for biomedical research, developing advanced biomaterials, medical implants, stem cell organoids, and replacement tissues. Tyler, you were looking at developing some stem cell organoids.

• 1:20:34Speaker 00

  So I'm sure that's exciting for you. Pharmaceutical discovery, growing more uniform protein and drug crystals in microgravity to accelerate drug development and materials, science, manufacturing next gen materials and semiconductors using the vacuum and microgravity environment of space. So I always thought with Varda, like the sort of like debate around Varda since the very beginning was that like, okay, incredible, incredible team, like very, very unique sort of like market that they're going after. Always questions, it was like so difficult for people to even believe that like this was super necessary.

• 1:21:13Speaker 00

  And next, like, what would the end market even be? It just seems so like experimental and sci-fi that it was almost like, it was hard, it was much harder to get behind than like the typical like manufacturing startup, which is just like, we make widgets and we're gonna sell this many this year. We're gonna hopefully sell more next year and many, many more in, you know, a decade, right? And I always, in the back of my mind, was like, well, I don't know what this market turns into, but at least like this feels like very complimentary to SpaceX and it doesn't seem like something SpaceX is gonna do. And turns out, turns out they are gonna go compete in this category.

• 1:21:54Speaker 00

  But if anything, it just feels like incredibly validating to Varda because SpaceX just wouldn't do this unless it was like they saw it as like a massive, you know, opportunity, right? That was going to be a very important part of the overall space economy. So although Varda now has some real competition, again, this just feels like a huge like vote of confidence in the business and the overall market opportunity. So pretty cool to see.

• 1:22:25Speaker 01

  There's kind of two questions that come out of it. Like, one is, is this something that can be somewhat complimentary to Varda in the sense that it's unclear if SpaceX is building just the launch trajectory, the launch capacity to send something up and bring it back? Like, that is a different workflow that Varda's had to build. And then Varda's also had to build a capsule for doing the biomedical research and has a bunch of deep partnerships with bio companies. So there is a world where they wind up working together in some capacity. And then also, we've just seen time and time again, companies not wanting to dual source or single source intelligence frontier labs or launch capacity. And so Rocket Labs going and ASTS is still, you know, trading really high.

• 1:23:08Speaker 01

  Because there's just this expectation that not everyone is going to be signing up for Starlink because some of them are gonna say, I want an alternative. I want to be able to dual source. I want to have some negotiating leverage. So overall, exciting to see the whole market like really heat up. And yeah, total validation that the thesis was something that was interesting and viable and that there would be real demand behind. Because SpaceX wouldn't be going after it unless there was serious demand. Let me tell everyone about Consol. Consol builds AI agents that automate 70% of IT, HR and finance support, giving employees infinite resolution for access requests and password resets.

• 1:23:46Speaker 00

  Something going on in politics today, John?

• 1:23:51Speaker 01

  What's that?

• 1:23:53Speaker 00

  I don't know. I just, I keep seeing random posts about, I don't know, a lot of, a lot of blue and red.

• 1:24:00Speaker 01

  No, I, I meant, what's politics?

• 1:24:02Speaker 00

  Oh, yeah, yeah. I mean, that might, we might need to save that for another episode. The TVPN deep dive.

• 1:24:09Speaker 01

  Yeah.

• 1:24:10Speaker 00

  On politics, not, not on any policy or politicians, but just the history of politics.

• 1:24:18Speaker 01

  Where does it come from? It started with Rome, Greece, democracy. Uh, yeah, get out there, vote, do whatever you gotta do on, on, uh, election day. And, uh, there's, there's some good Nate Silver, uh, podcast going around. He was on Odd Lots, breaking down polling and, uh, and, uh, prediction markets are fitting together today and some of his thinking on the, the benefits of each of them and where some of them break down. But it's all interesting. Uh, we'll, we'll have a bunch of updates tomorrow, I'm sure, as, as the polls roll in. Uh, although some of the, some of the, uh, elections could be like, takes time to count the votes, so maybe go ongoing all week. But there are plenty of shows where you can go get updates on what's happening with the midterms. So go check it out.

• 1:25:03Speaker 01

  Uh, yesterday we were at the New York Stock Exchange. Let me tell you about the New York Stock Exchange. Want to change the world? Raise capital at the New York Stock Exchange. Let's do it. Uh, don't, yeah, get your mind off the midterms. Go IPO at the New York Stock Exchange. That's, if you're frustrated with the political climate, just take your company public. It's easy.

• 1:25:23Speaker 00

  Great.

• 1:25:23Speaker 01

  Uh, I want your take on this, on this font. Are you, are you a fan of this font? They're calling it the new Comic Sans. This speaks to me as a Doritos American. This is me. But what do you think? Is this, is this, uh, going in your repertoire for brand building?

• 1:25:40Speaker 00

  Yeah. I mean, I think every, every company in the world should sort of adopt this at the same time and just level the playing field and just compete entirely on, on, uh, product specs in every, in every domain from like,

• 1:25:55Speaker 01

  Yeah.

• 1:25:55Speaker 00

  from, from haircuts to coffee, you know, uh, to coffee, you know, it should just be a stats driven market. No more branding.

• 1:26:04Speaker 01

  Yeah.

• 1:26:04Speaker 00

  Everyone adopt this.

• 1:26:06Speaker 01

  Everything needs to look like you're announcing an illegal street race. That's the goal. Uh, no, uh, the chat GPT app allows you to change the color of the bubble. Default is blue, blue bubbles going back to blue and gray for what you type, what the agent checks back to you. You can change it. I changed it to green. TVPN green. I was very satisfied. Then they updated the app, different shade of green. It's completely rugged me on my green. I have a nice forest green going. It got a lot lighter. Don't like it as much, but I want them to go further. I want to be able to set this font as my default font in chat. Every response coming back like this, that would, that would fix me. That would get you to three billion DAU. I, I, I think this is the unlock. No?

• 1:26:52Speaker 00

  I, I agree. I agree.

• 1:26:55Speaker 01

  Fantastic. Last, last, last post, last ad read. Let me tell you about Shopify. You heard about him earlier from Harley. But Shopify is the commerce platform that goes with your business and lets you sell in seconds, online, on in-store, on mobile, on social, on marketplaces, and now with AI agents. So Jordy, is there anything else in the timeline that you want to go through? Any other, uh, details that we didn't get to? Uh, there's some debates. Uh, oh yeah. OpenAI also partnered with Cathedral Systems. Everyone's ramping up cybersecurity stuff, but this was cool because, uh, Cathedral was the one that was able to break into the Anthropic Slack. And there was a lot of debate over that, but, um, in general, it seems like the folks at Cathedral are, are good at penetration testing and,

• 1:27:37Speaker 01

  and everyone wants the agents to be, uh, ultra secure since they be, they're quickly becoming like the master key. Everyone's giving Muse all their passwords. Bot all their passwords, chat GPT all their passwords. And if you break into that, you're kind of in the email, you're in all the services, you're in the bank accounts pretty quickly. And you can imagine wreaking havoc pretty quickly. So, uh, cybersecurity is of the utmost importance at Frontier Labs. Uh, not just because people want to steal the weights, but also, uh, the actual, uh, user experience for sure.

• 1:28:07Speaker 00

  Uh, we'll close out with, uh, the largest domain sale ever from our friends at Shopify. They spent $99 million on shop.com and I think they stole, I think they stole it.

• 1:28:23Speaker 01

  Yeah.

• 1:28:23Speaker 00

  I think they stole it.

• 1:28:24Speaker 01

  That's a great deal for them.

• 1:28:26Speaker 00

  Um, amazing, uh, amazing domain and, um,

• 1:28:34Speaker 00

  I'm sure they have big plans for it.

• 1:28:36Speaker 01

  Yeah. Yeah, very true.

• 1:28:40Speaker 00

  Anyways, folks, that is our show.

• 1:28:44Speaker 01

  Yeah.

• 1:28:45Speaker 00

  John, let's, uh, we made this work. We made this work. I thought you were here right next to me the whole time. You tricked me.

• 1:28:53Speaker 01

  No one noticed.

• 1:28:53Speaker 00

  No one, no one.

• 1:28:56Speaker 01

  The empty chairs.

• 1:28:57Speaker 00

  Oh, it's so brutal. It's so brutal. I, I, I, you know, there's a reason that we could do remote shows every day and we don't. Because it's not the same, but, uh, we still had fun. We still had fun.

• 1:29:10Speaker 01

  Production team learned a lot. I think that there's a whole bunch of improvements that they have in the works. Uh, I think we're going to get this dialed for the occasional, uh, for the occasional moment where I gotta go to the opera, you know, it happens. I gotta go to the San Francisco Opera, Marriage of Figaro is playing and, uh,

• 1:29:28Speaker 00

  Couldn't miss it.

• 1:29:28Speaker 01

  I say no to all sorts of tech conferences. Oh, this is happening. That, no, no, no. But you can't say no to an SF opera invite. So that's where I'll be. Time to change. The tuxedo.

• 1:29:40Speaker 01

  Yeah, I, I, I'm kind of dressed casual right now, but I'm about to class it up and

• 1:29:45Speaker 00

  Thank you.

• 1:29:45Speaker 01

  get to the opera in my tuxedo.

• 1:29:48Speaker 00

  Yeah. Could you, could you, could you have called in with a bow tie? Would it have killed you to do that?

• 1:29:53Speaker 01

  Maybe, maybe that's the secret. Maybe if I put on the tuxedo regularly, you'll put on the suit because right now you're like, there's a comfortable level of distance. John's in sort of a business casual. We're getting out of here. Leave us five stars on Apple Podcasts. I have a newsletter, TVN.com. Goodbye. We'll see you.