Kling Crosses 12M, China’s Aging Tech Problem, Thinking Machine Turmoil | Rich Greenfield, Jan Sramek, George Lewin, Ara Kharazian

Sign up for TBPN’s daily newsletter at TBPN.com (01:20) - Kling AI Surpasses 12M Users (15:45) - China's Aging Tech Worker Crisis (23:12) - Rich Greenfield, a General Partner at LightShed Ventures and a seasoned media and technology analyst, discusses the intensifying competition between Netflix and Paramount-Skydance to acquire Warner Bros. Discovery's assets. He highlights Netflix's strategic shift to an all-cash $72 billion offer, aiming to streamline the merger process and provide value clarity to Warner shareholders. Greenfield also examines the implications of Paramount-Skydance's $77.9 billion hostile bid, emphasizing the potential impact on the media landscape and the importance of strategic investments in content and technology. (53:45) - Thinking Machine Leadership in Flux (01:13:21) - 𝕏 Timeline Reactions (01:51:18) - Jan Sramek, a former Goldman Sachs trader and founder of California Forever, is leading an ambitious project to build a new city in Solano County, California. In the conversation, he discusses the challenges of traveling with young children, the decade-long effort to assemble land for the project, and the importance of creating a thoughtfully planned community to address housing shortages and economic development in the region. (02:33:17) - George Lewin, co-founder and CEO of Testudo, discusses the launch of a new category of insurance specifically designed for enterprises deploying generative AI systems. He explains that traditional insurance policies often exclude AI-related risks, leaving companies vulnerable to litigation stemming from issues like copyright infringement, defamation, and data breaches. To address this, Testudo offers purpose-built AI liability insurance that covers legal costs, damages, and settlements associated with these risks, enabling organizations to innovate with confidence. (02:47:58) - Ara Kharazian, an economist at Ramp, analyzes business spending trends, particularly in AI adoption. He discusses the disparity between executives and employees regarding AI's impact on work efficiency, noting that while surveys show mixed perceptions, actual spending data indicates growing investment in AI tools. Kharazian also highlights that AI adoption varies across industries, with tech and finance leading, and emphasizes the challenges in measuring AI's true impact on the labor market. TBPN.com is made possible by: Ramp - https://Ramp.com AppLovin - https://axon.ai Cognition - https://cognition.ai Console - https://console.com CrowdStrike - https://crowdstrike.com ElevenLabs - https://elevenlabs.io Figma - https://figma.com Fin - https://fin.ai Gemini - https://gemini.google.com Graphite - https://graphite.com Gusto - https://gusto.com/tbpn Labelbox - https://labelbox.com Lambda - https://lambda.ai Linear - https://linear.app MongoDB - https://mongodb.com NYSE - https://nyse.com Phantom - https://phantom.com/cash Plaid - https://plaid.com Public - https://public.com Railway - https://railway.com Restream - https://restream.io Shopify - https://shopify.com Turbopuffer - https://turbopuffer.com Vanta - https://vanta.com Vibe - https://vibe.co Sentry - https://sentry.io Cisco - https://www.ciscoaisummit.com/ai-virtual-summit.html Okta - https://www.okta.com Follow TBPN: https://TBPN.com https://x.com/tbpn https://open.spotify.com/show/2L6WMqY3GUPCGBD0dX6p00?si=674252d53acf4231 https://podcasts.apple.com/us/podcast/technology-brothers/id1772360235 https://www.youtube.com/@TBPNLive

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00John Coogan?

  You're watching TVPN. Today is Wednesday, January 21st, 2025, 2026. 2026, throw smoke. It's a new year. We're live from the TVPN Ultra Dome, the Temple of Technology, the Fortress of Finance, the capital of capital. And now that the smoke is cleared, I can tell you about ramp.com. Time is money. Save both. Easy to use corporate cards, bill pay, accounting, and a whole lot more, all in one place. And big news, we have Ara Karasian from Ramp, live in the Ultra Dome at 2:00 PM today.

• 0:33Jordi Hays?

  Here with us.

• 0:33John Coogan?

  Let's show everyone the Linear lineup, because we got a lot of great stuff for you. We got Rich Greenfield coming on at 11:30.

• 0:41Jordi Hays?

  Many people are saying he has one of the best names of all time.

• 0:44John Coogan?

  He does. He does.

• 0:45Jordi Hays?

  If you're, if you enjoy business, if you're a business enthusiast.

• 0:49John Coogan?

  Lots of people like Greenfield Projects. You start fresh. Greenfield Projects are where it's at. Uh, Yance Rimack, founder and CEO of California Forever is in the Ultra Dome at 1:00. Then we have George, uh, from Testudo at 1:40, and Ara closing at 1:50 in person. Uh, it's going to be a fun show. Linear, of course, is the ultimate product. The system for modern software development. 70% of enterprise workspaces on Linear are using agents today, and you should be too. So, uh, cling.ai, cling.ai, the video generation, uh, uh, video model, has been on a tear. There's an article in the Wall Street Journal showing, uh, some pretty staggering numbers.

• 1:34John Coogan?

  They hit 12 million monthly active users, and they generated more than 20 million in revenue just last year. I wanted to dig in and understand where this came from, the history of Quasho, the company, the Chinese company behind it. Uh, there's a new farmer filling up the trough for everyone.

• 1:51Jordi Hays?

  Really interesting that they're so neck and neck with Higgs Field.

• 1:56John Coogan?

  Yeah.

• 1:56Jordi Hays?

  Higgs Field last week comes out announces they got to 200 million.

• 1:59John Coogan?

  Yeah, yeah.

• 2:00Jordi Hays?

  This story drops.

• 2:01John Coogan?

  Yeah.

• 2:01Jordi Hays?

  That Cling seems to be just slightly ahead of them, but really neck and neck and seemingly competing over the same opportunity.

• 2:09John Coogan?

  Yeah, I mean, on the enterprise model API level, even the prosumer level, I think 30% of their revenue is coming from API and 70% is for prosumer. So basically you have someone in a marketing role or they're just a fun individual creator and they want some AI video products, some generative video.

• 2:28Jordi Hays?

  And the silence at Davos on Cling.

• 2:31John Coogan?

  It's crazy.

• 2:32Jordi Hays?

  It's insane.

• 2:33John Coogan?

  It's actually crazy.

• 2:34Jordi Hays?

  It's insane.

• 2:35John Coogan?

  They refuse to ask any hard questions. You got Demis on stage, you got Dario on stage, and you're not asking them about Cling and the absolute tear that Quasho has been on. Actually, I mean, Dario did address the Chinese question. He said that they don't lose, they're not losing enterprise deals to Chinese companies right now. They're going up against OpenAI and DeepMind.

• 2:59Jordi Hays?

  Yeah.

• 2:59John Coogan?

  There is a, there is an interesting Chinese export control issue that I think we should get into at some point with regard to this story. But first, let's tell you about Restream. One livestream, 30 plus destinations. If you want to multi-stream, go to Restream.com. So Cling has hit 12 million MAUs, 20 million revenue in the last month. Now, they seem to be on the up and to the right curve. It's a pretty massive ramp. The product launched 18 months ago, but Cling is not its own startup. It is a new project from Quasho Technology. This is a Chinese company and the founders, I couldn't find a single.

• 3:36Jordi Hays?

  John, I'm gonna, I'm gonna blow your mind right now.

• 3:38John Coogan?

  Please.

• 3:39Jordi Hays?

  Guess who worked at Quasho?

• 3:41John Coogan?

  Who?

• 3:42Jordi Hays?

  He's been on the show.

• 3:43John Coogan?

  Okay.

• 3:44Jordi Hays?

  I share a name with him.

• 3:47John Coogan?

  Wait, Connor Hayes?

• 3:49Jordi Hays?

  No.

• 3:49John Coogan?

  No?

• 3:50Jordi Hays?

  Jordan Schneider.

• 3:51John Coogan?

  Jordan Schneider worked at Quay Show?

• 3:52Jordi Hays?

  Yes.

• 3:52John Coogan?

  No way.

• 3:53Jordi Hays?

  He just responded to the daily newsletter.

• 3:56John Coogan?

  Does he want to hop in?

• 3:56Jordi Hays?

  And said, lol, I worked at Quay Show. What a comeback.

• 3:59John Coogan?

  Tell.

• 4:00Jordi Hays?

  Jordan.

• 4:00John Coogan?

  Tell all.

• 4:01Jordi Hays?

  Jordan, come get on the show.

• 4:02John Coogan?

  You're welcome. Come hang out if you want to.

• 4:04Jordi Hays?

  I'll send him a note.

• 4:06John Coogan?

  It'd be great to hear more of the story from him directly. But he might be the only person that we can get to go on the record about Quay Show because the founders, I don't think they've ever done a podcast appearance. They haven't been, certainly on like the Victory Lab Podcast American circuit. Like many founders that get a company to this scale. But there are some interesting links to other American companies. So Quay Show is pretty old, especially for the AI boom. It launched in 2011 as a mobile app for creating and sharing GIFs. This was before Vine and before Musically. They were sort of like precursor to all those, just by a year or two.

• 4:48Jordi Hays?

  So you could almost say that Jordan Schneider made his money in GIFs.

• 4:51John Coogan?

  I think so. I think he created TikTok, basically. We should put him in charge. We should get him in the CEO seat.

• 4:57Jordi Hays?

  I like.

• 4:57John Coogan?

  Put him in charge.

• 4:58Jordi Hays?

  I like that.

• 4:59John Coogan?

  We're bringing TikTok back to America and Jordan should be running it for sure.

• 5:03John Coogan?

  So there's some similar threads. So Dom Hoffman, the founder of Vine, he worked at Yahoo before founding Vine. And Alex Zhu at Musically worked at eBay and Microsoft, and I think SAP as well. And so both of those companies, they had like big tech experience. Then they went and founded these companies. And the founders of Quay Show, Su Hua and Sheng Yi Xiao, also did the same. One of them worked at Google, one of them worked at Hewlett Packard. And then they jumped into the social media boom that was going on in the early aughts. Like in, or the late, I guess the late aughts, early 2010s. Is there a word for the period between 2010, the teens?

• 5:42Jordi Hays?

  The 10s?

• 5:43John Coogan?

  The 10s? I don't know. But that era, like post-Facebook, there was Foursquare, Twitter, Pinterest, Snap. There were just like a new one every year was popping up. And so they jump in on this and the mobile internet was expanding really rapidly in China. China at that time, there was a big boom, there were a bunch of big winners that came out of that era. Kuai Shou hit a hundred million DAU by 2013. So basically 18 months after they launch, they're a pretty sizable social media app. And they actually pivoted in that 18-month timeline from GIFs to videos. And so, once they had the new product dialed, they ramped pretty quickly. Now, there was a little bit of a slowdown between 2013 and 2019 because they didn't hit 200 million DAU until 2019.

• 6:25John Coogan?

  So they were sort of saturating then, but they were on a fundraising tear the whole time. They raised $350 million from Tencent in 2017. They integrated with WeChat to accelerate distribution. And the company was worth around $18 billion by 2018, just seven years until the jury. So not bad, not bad. The Kuai Shou IPO was a particularly crazy moment for the company. So they raised $5.4 billion at the IPO. And they were massively oversubscribed for that. So they say, hey, we want to raise 5 billion. And 165 billion of demand shows up from the market. So retail investors just went insane. They're like, you know, what, 165 billion of demand, only 5 billion for sale?

• 7:10John Coogan?

  And so the stock trades up 192% at the open. And all of a sudden, the company is worth $180 billion. And both of the founders are deck of billionaires. Pretty sick. Phantom Cash. Fund your wallet without exchanges or middlemen and spend with the Phantom Card. So that didn't last, though. There was a massive sell-off. And there were a couple, there were a couple like speed bumps that Kuai Shou seemingly hit shortly after going public. So China had a big crackdown on, in regulation on local tech companies. ByteDance became much more dominant as a competitor and was, you know, had Kuai Shou in their sights. And then the Kuai Shou user growth just sort of slowed down. And so there were a couple misses on, you know, DAU, MAU growth.

• 7:54John Coogan?

  The metrics weren't looking as good. And so the investors said, hey, we're rotating to other things. They were pulling out. And so the stock traded down 80% within six months. So not great, but today the market cap's around $40 billion. Like, it's still a very real business. And also, just financially, the business is very solid. Like, it's not losing money. You can think about it this way. So it's a $40 billion market cap. Twenty, this is all USD. I converted everything. So forty billion market cap, twenty billion revenue, eleven billion gross profit, net profit two point six billion, two and a half billion. So that's like a lot of cash flow, a lot of net income to work with, certainly enough to do some training runs, start a Neo Lab or a video lab or, you know, take some new bets. And so that's exactly what they did. So in twenty eight, twenty four,

• 8:39John Coogan?

  twenty twenty four, they launched the first version of Clang and they did this just three months after OpenAI demoed Sora. So it was kind of like the Chinese answer to Sora. Since then, they've updated Clang thirty times and carved out a nice little place on the grid of trade offs around model performance and cost. For cinematic footage, people often recommend V O three still, but for Clang, it has some really strong characteristics in motion control and physics simulations. Like, there's a number of places where Clang's been outperforming there. And then there's a number of other sort of niche applications where Clang's really great. And, and at ten cents per second, pricing has been very attractive relative to some of the other options in the market. Although, there are a bunch of ways to get

• 9:22John Coogan?

  like free credits, and then if you buy bulk, like, none of the pricing is like exactly apples to apples. But they've certainly, they've certainly come out as a frontier quality model at a very affordable price. Yeah. And that's led to a bunch of adoption, as we've seen with the twelve million monthly active users. Interestingly, Quai Shou claims that Clang is gross margin positive. And so, now, it's unclear, that doesn't include training, and we don't really, I mean, it's gross profit, so it doesn't include the hundred or so R and D people on the team. But my, my question is, like, what happens if they try and scale another order of magnitude? Will they be paying more

• 10:06John Coogan?

  for inference? Will they be able to get those chips? Because there's still this big debate over how many Nvidia GPU should be able to be sent over to China. So there's a little bit of debate there. And it's also just, it honestly gets me excited about MSL dropping a video model, because a lot of the same A lot of the same sort of like precursor elements in terms of like the training data in the ecosystem, when you think about the just the raw data in reels, that it could wind up being a model that's a little bit more opinionated, maybe it has some mid-journey sprinkled in there. Like, I think that the MSL, the pressure on MSL has been intense, and the initial vibes launch was not loved, but they certainly have the compute, they have the

• 10:51John Coogan?

  team now, they have the data, like they have all the key, the key ingredients to a really successful video generation model launch. The only question is, when will it happen? And will it be one of those like temporary leapfrogs, where it's better than Sora in VO3 for a month until the other labs update? Will it have its own characteristics? Because VO3, when it came out, it was like, oh, we can do audio in there, then Sora was really good at vertical video. And a lot of these like labs, it feels like if you're in video, there's more room to be opinionated and come out with something where it's like, we're really good at making content that's all one, all one scene. Or we, our model by default

• 11:35John Coogan?

  will do cuts and cut from different shots to another. Or it's really good at front-facing videos, or, you know, it gets the faces really accurate, or it does, or does, you know, face replacement, you can upload your own. There's all these like features that you can win on, I think nowadays, since all the, all the different base video models are starting to look pretty photorealistic. So.

• 11:56Jordi Hays?

  Yeah, I mean, I'm so, I can't wait to see Meta's next real launch here, right?

• 12:03John Coogan?

  Yeah.

• 12:03Jordi Hays?

  They have so many advantages, they have the talent now. The pressure is immense, but they should be able to come out with something that's super competitive.

• 12:11John Coogan?

  Yeah. TurboPuffer, search every byte, serverless vector and full text search, built from first principles and object storage, fast, 10x cheaper, and extremely scalable. So, last month, they did 20 million, and of course, Quay Show put out a statement about it. Their shares went 3.6% higher to rank among the top gainers on the Hong Kong Exchange. Year to, year to date, Quay Show is up 23%, so they've been on a run, and there's a lot of investor optimism about Quay Show's potential to monetize AI. The company's AI-powered video and graphics generation capabilities will likely drive earnings over the next few years. S and P Global Ratings analyst wrote in a recent note that could lower content creation

• 12:53John Coogan?

  and advertising costs and boost content creation on Quaysho's short form video platform. The company has the second largest independent short form video platform after ByteDance's Douyin, which is basically the Chinese version of TikTok. And so I, you know, is this going to be, you know, super important to the AI race in America? Probably not. Like, we're still living in a world where you have OpenAI, Anthropic, Google, really be, really battling it out. And then XAI is doing interesting stuff. MSL has interesting stuff. And then there's a couple Neo Labs that are maybe doing interesting stuff, but the, the Chinese labs haven't been putting a ton of pressure. But I think this is interesting because we're actually getting firm data on how these products are monetizing.

• 13:38John Coogan?

  Of course, Google, they're not even breaking out Gemini revenue or metrics. They'll, they'll throw out sort of random numbers, but it's not like YouTube where they have to report out specific things or like Amazon with AWS where they have to break out those financials. Quaysho is kind of doing a service to the public markets, at least they're creating a comp for what, what revenue looks like relative to MAUs. And I mean, right now, if they're doing 20 million in revenue, 12, on 12 million monthly active users, they're getting, what, a dollar 80 per, per monthly active user, a dollar 80 a month, basically like a $20 a year subscription.

• 14:21John Coogan?

  That still feels a little low, but not bad for total ARPU, for such a new, for such a new service that really, we don't know the mix of like enterprise versus prosumer, where they.

• 14:34Jordi Hays?

  Well, yeah, and they're not breaking out where their users are, right?

• 14:37John Coogan?

  So, so, so, Kling is available on AWS. Like, you can go and provision it in America. And so, yeah, we're not exactly sure. And I think some of that inference might run in America in that case. So, not exactly sure where their, where their, where their biggest customers are. But it's just interesting to see, like, you're not going to get this level of detail from Google because Dmin's its own thing and then Gemini's in there. And then you can't even just subscribe to just VO3. You have to subscribe to Gemini Ultra and then you get VO3 credits. And so. Even Google, like, I mean, I'm sure Google knows how much, like, I pay for Gemini Ultra.

• 15:20John Coogan?

  And then they know how many deep research reports I file, how many normal prompts I use, how many times I just talk to it, and they know my, my usage pattern relative to how many VO3 generations I'm doing per month for my, you know, $250, whatever I pay.

• 15:36Jordi Hays?

  Yeah.

• 15:37John Coogan?

  Anyway, moving on, Vanta, automated compliance and security. Vanta is the leading AI trust management platform. There is another interesting, just sort of like nuanced narrative that I hadn't really noticed while I was digging into Quai Shou. One is this China's aging tech workers issue, the curse of 35. They're firing unks over there. That's what's happening.

• 16:05Jordi Hays?

  You can't even be an unk.

• 16:07John Coogan?

  You, you truly can't. You truly can't. Discrimination against older employees, particularly apparent in sector where executives openly state a preference for youth.

• 16:18Jordi Hays?

  Different, different approach.

• 16:20John Coogan?

  We've had back and forth on, you know, in VC Twitter about, oh, should your team be really young and cracked, or should you get the experts in there? What's, you know, obviously in America that you cannot discriminate based on age. But that hasn't stopped plenty of people from opining about what the correct mix is, whether or not you should follow those rules. But there's an article in the, in the Financial Times that sort of has some charts here about how big tech groups in China have been downsizing in the past few years. We can go through that, but let's read through a little bit of this China's aging tech workforce.

• 16:56Jordi Hays?

  First hint, Lao Bai, 34, received that his position at short video app Quai Shou might be at risk was when a 35-year-old colleague was sacked. "I was both shocked and anxious. I realized that our situations were very similar and the same thing could soon happen to me," said Lao Bai, using his nickname to avoid repercussions from his former employer. "Just months from his 35th birthday, the developer was dismissed, another victim of the group's reorganization known internally as Limestone." Wow, they're giving code names to age discrimination.

• 17:28Jordi Hays?

  That's insane. Quai Shou is pushing out junior workers in their mid-30s, according to five people with direct knowledge of Limestone, including current and former employees. Labai was told his termination was part of the company's overall redundancy program. The so-called curse of 35 has long plagued workers across white-collar professions, with older staff widely perceived as being less willing to put up with long working hours because of responsibilities at home. As China's tech sector reels from Beijing's crackdown, this article is from 2024, by the way, and economic slowdown, tens of thousands of jobs have been cut over the past several months, and older workers are seen as particularly vulnerable. Technology companies have made no secret of favoring young and unmarried workers.

• 18:13Jordi Hays?

  Ageism in the tech sector is a big problem. There's a perception that older workers don't keep up with the latest technological developments. They don't have the energy to keep up the hard work and that they're too expensive. Thankfully, our very own John Coogan, who you're very much keeping up with the latest technological developments, otherwise we wouldn't be talking about this, because you didn't just read about Kling, you studied and you wrote about it. While China's labor law prohibits employers from discriminating on the grounds of attributes such as ethnicity, gender, and religion, it does not explicitly refer to age. Whoa. Hence Project Limestone. But Yang said some had interpreted the law more broadly as prohibiting discrimination

• 18:57Jordi Hays?

  against older people, meaning employers would not explicitly cite age as a reason for dismissal. Chinese tech executives have long publicly voiced their preference for younger workers. In 2019, Tencent President Martin Lau announced a plan to reshuffle 10% of the company's managers, saying their jobs will be taken up by younger people, new colleagues who may be more passionate.

• 19:16John Coogan?

  Byu chief Robin Lin, in an internal letter also made public in 2019, announced the company's plan to become more youthful by promoting more workers born after 1980 and 1990. This thinking is deeply embedded across most tech companies. Well, let me tell you about Labelbox. Reinforcement learning environments, voice robotics, evals, and expert human data. Labelbox is the data factory behind the world's leading AI teams. That's right. Between 20 and 30, most people are full of energy. You're more willing to march forward and sacrifice yourself for the company. But once you become a parent, your body starts aging. "How are you going to keep up with the 996 schedule?" says a former

• 19:57John Coogan?

  sales manager at Meituan, referring to the Chinese tech sector's infamous work routine of 9 a.m. to 9 p.m. six days a week. ByteDance, which owns the video app TikTok and e-commerce giant Pinduoduo, have some of the youngest recruits among Chinese tech companies. Data suggests the average age of their workers is just 27, according to the latest figures. The average age of staff at Quayshou is 28 against the 33 years old at ride-hailing AppDidi. The average age of the worker in China is 38, according to the All China Federation of Trade Unions. This trend has become only more entrenched with progressive waves of layoffs. And this is the chart that I wanted to show you. So, big tech groups in China have been downsizing

• 20:40John Coogan?

  in the past few years. So, this is 2021, 2022, and 2023 for Alibaba, Baidu, Quayshou, and Tencent, and they're all downsizing across those three years. Now, I was wondering if this was just an anomaly post-COVID, just one particular period during some economic gyrations. So, I went and pulled more recent data on what's going on, and it feels like they're all continuing to shrink. The one that's that's growing again is Tencent, but Baidu has significantly downsized, Alibaba has continued to downsize and shrink, and I think Quayshou has as well. And so, there's an interesting

• 21:24John Coogan?

  Dynamic there that I didn't, I mean, we, we hear about layoffs in big tech in America, but it feels like it's like a very temporary layoff and, and shrink it and then it starts growing again pretty quickly as they do more acquisitions. Now, to be clear, some of these, some of these companies have shrunk because they've divested whole business units or sold off a piece of a company. And so you can't really count that because it's like the, the two, the job still exists. They're just at a separate company. Um, anyway, Lambda, Lambda is the super intelligence cloud, building AI super features for training and inference at scale from one GPU to hundreds of thousands. We have our first guest.

• 21:59Jordi Hays?

  Before we jump in, it's worth noting, I pulled up, uh, mag seven employee counts and every single company in the mag seven has, uh, increased headcount over that same period that we just showed.

• 22:09John Coogan?

  Yeah, yeah. There have been like periods of layoffs, but even when, even when Mark Zuckerberg comes out and says, hey, we're laying off a thousand people in the metaverse team and the reality labs team. It's like, well, he's adding tons of people to the AI teams and tons of people to the Instagram teams and threads teams and Facebook core and marketing and salespeople and events people. Like the whole organization is just growing so fast that, uh, one niche like layoff is not really going to cause a multi-year trend, at least in America, we're still growing. So, uh, just sort of interesting that, uh, that I, I didn't realize that was going on, that there was such concerted effort across four major Chinese tech companies to really reduce headcount, but it is happening.

• 22:49Jordi Hays?

  Yeah, it is worth noting though, that, that, um, in the chat is sharing this well, that 2022 headcount and current headcount look very, very similar. So there hasn't been a ton of growth.

• 23:01John Coogan?

  Yeah.

• 23:01Jordi Hays?

  Um, anyways.

• 23:02John Coogan?

  Graphite, code review for the age of AI. Graphite helps teams on GitHub ship higher quality software faster. And without further ado, we'll bring in our first guest of the show, Rich. Welcome to the TVP and Ultra. How are you doing, Rich?

• 23:16Speaker 02

  Great to have you back. Busy week.

• 23:19John Coogan?

  Busy.

• 23:20Speaker 02

  Busy week in media world. Earnings kicking off.

• 23:22John Coogan?

  Yes.

• 23:23Speaker 02

  Earnings.

• 23:23John Coogan?

  What's top of mind? What's, what's keeping you the busiest?

• 23:27Speaker 02

  Look, I think everyone's trying to figure out what is the future of Netflix? What happens to Warner Brothers? Does Paramount come back? I mean, we talked about this on your show a few weeks ago, right? We were talking about sort of this battle. Does Paramount come back? You know, they haven't raised their bid since we talked, you know, before the holidays. They have not raised their bid as of yet.

• 23:50Jordi Hays?

  But they did say it wasn't their, they said it wasn't their best and final, right?

• 23:55Speaker 02

  That is true. Um, but you know, the, the, when you look at sort of the, how much Netflix clearly wants this? You know, Netflix yesterday went to all cash on their offer. The Warner Brothers board came out and talked about the piece that Netflix isn't buying, which Paramount said was worthless. The Warner Brothers board said was worth, you know, $3, maybe even more, as much as four or five, maybe even more if it gets sold into pieces, which we think is possible. And so the bar, you know, in terms of like, what does Paramount have to do to win? That bar is going up and up and up. And I think that's the challenge right now is how badly do they want this? Do they want to over lever the company to get this? Or is there a better use of capital?

• 24:39Speaker 02

  I mean, it's not like there aren't other assets out there. I mean, you could go into the video game world, right? Like there's assets like Take-Two. Two of the biggest enter, actually, the two biggest entertainment franchises in the world.

• 24:49Jordi Hays?

  Okay, but what's actually, what's actually important for Paramount? Is it to build a compelling consumer subscription, right? Like, like, cause when you look at them overpaying for UFC, or maybe, maybe they're not overpaying, but if they, if they-

• 25:05Speaker 02

  It launches this Saturday.

• 25:06Jordi Hays?

  Yeah, which, which I'm, I'm excited for, but, uh, they, they pay 700 million, or sorry, no, was it, it was, it was more than that. What, what was it?

• 25:17Speaker 02

  They spent a billion one on UFC.

• 25:19Jordi Hays?

  Yeah, billion.

• 25:21Speaker 02

  About 2X what it was, what ESPN was paying.

• 25:24Jordi Hays?

  Yeah, and, and, and I guess like my, my question is, um- How F'd are they if they don't get the Warner Brothers assets? Just, and I, and I, and I mean that from like, how compelling is their, is their subscription? Without Warner Brothers. Those assets.

• 25:43Speaker 02

  Look, you can license a lot of content. I mean Netflix, despite trying to buy Warner Brothers, Netflix actually just went out and did a global licensing deal with Sony. So after Sony movies are in movie theaters, the next place they go is to Netflix, all around the world. That's a deal that Paramount could have done. They could have outbid Netflix for that deal. Those licensing deals are out there. I mean, Universal movies are actually gonna now be, after they do a short stint on Peacock, they're gonna show up on Netflix. Like, if you wanna license catalog content, there is lots of ways to do it. I mean, heck, Amazon, like, like, the craziest thing that's happened this week, honestly, Amazon, you probably remember a few years ago, they went out and they spent $8 billion

• 26:26Speaker 02

  on MGM. Everyone thought that was absolutely insane.

• 26:29Jordi Hays?

  Yeah.

• 26:29Speaker 02

  Then they had to go back because you actually, even for that $8 billion, you didn't control the James Bond franchise.

• 26:34Jordi Hays?

  Oh, yeah.

• 26:34Speaker 02

  They ended up paying the, the broccoli family another billion dollars to get access to control the James Bond franchise. And then what happened today, guys? Today, the entire James Bond franchise is licensed to Netflix.

• 26:48Jordi Hays?

  Netflix.

• 26:49Speaker 02

  Like, literally, you can go watch Doctor No on Netflix right now instead of watching this show. Like, it's crazy, right? So, there is lots of content to license, but you have to be aggressive. And so I think, you know, again, if Paramount has, you know, Larry Ellison's willing to put $12 billion into the Warner Brothers deal, the Middle East is willing to give them $24 billion to invest in this transaction, that's a heck of a lot of capital. If you wanna start really both creating a lot more content internally and licensing a lot more, Paramount has the ability to do that. There's more NFL rights coming up for bids soon. Like, there are many ways to attack this beyond buying Warner Brothers.

• 27:30Speaker 02

  And I, and I just think, there comes a point where overpaying for something gets silly, and you're better off finding an alternative. And I think that's sort of the, the question mark, 'cause remember, for, for Paramount, they need to buy all of these linear cable networks because, unlike Netflix, remember, Netflix generates $11 billion of free cash flow a year. Paramount has negative free cash flow.

• 27:55Speaker 02

  So like the ability to bid here is very different. These are very different companies.

• 28:01John Coogan?

  So what's Netflix's rationale for buying versus licensing? Is that just thinking long term that they're that they'll make more money over the long term? Or is there some other rationale or value that they would get from owning the whole thing as opposed to just licensing it?

• 28:21Speaker 02

  John, it's a great question because I think if you step back and they even said this, I asked this question like, you know, what changed? Because Netflix had not been interested in making acquisitions. They were a builder, not a buyer, you know, throughout their entire history. And I don't if Paramount hadn't put this in play and like this asset hadn't become sort of in play, I don't think we'd be sitting here talking about Netflix buying Warner Brothers. I think once it became clear this asset was going to trade and that there was a way to buy it without getting all of those sort of dying cable networks, that there was a way to just buy the streaming business and the most importantly, the studio. Because what this is really about, this is like when Bob Iger at Disney, remember years

• 29:03Speaker 02

  ago, he bought Pixar, he bought Marvel, he bought Lucas Films. Those three iconic acquisitions of IP have totally transformed the Walt Disney Company. I think that's what Netflix sees here is, hey, these IP libraries are going to trade. This is a once in a lifetime opportunity. Someone's going to own them. Let it be us. Like, let's not let this get away from us because we can do so, just like Amazon for Bond needs Netflix, the ability to take all of that Warner Brothers catalog and shine a light on it the way Netflix can, I think was just too big of a, you know, talk about a five, 10 year opportunity was too big to pass up.

• 29:41Jordi Hays?

  How do you think the studios and the platforms are kind of trying to process how Gen AI will impact the value of IP? Because I look at this and I'm like, if you have IP and the cost to produce new content drops dramatically, which I think is my assumption generally is that you're going to be able to produce, like when you look at animated content and even like kind of blockbuster films, I expect the I expect the cost to produce these things is going to drop dramatically, which means if you actually have a monopoly on the IP, you can create a lot more different content around it. And I think that Gen AI will also mean that there's just a bunch of like more and more and more and more content, like net new content, net new IP being created. But

• 30:24Jordi Hays?

  it's unclear if you have, it will maybe even become harder to like generate real breakout hits if the whole zone is just being flooded with a ton of content.

• 30:35Speaker 02

  Well, look, in a world where, first of all, let me just step back. I agree with you. Gen AI is going to lead to an explosion of content. And I don't think this is just video content. I think it's an explosion of content. So whether it's gaming content, you think about a UGC platform like Roblox, you think about a short form, you know, a shorter form, you know, UGC world of video like YouTube, you think about Spotify, like all of the platforms, in a world where content creation gets cheaper, the platforms win. That is exactly part of the long-term investment thesis on why own Netflix now. Yes, it will get easier to make content from the Warner Brothers library. It'll get cheaper for Netflix.

• 31:19Speaker 02

  I mean, certainly animated content, which takes three to four years to make. I mean, look, you know, one of our questions for Netflix on their earnings call was like, how big of a miss is it that K-pop Demon Hunters 2 isn't coming out until 2029? Like, that's embarrassing, guys, like, right? Like, it shouldn't take four years to get that sequel out, but that's because of the timeline for animation. That's going to compress dramatically.

• 31:40John Coogan?

  Is that, is that everything? Because I thought that there was also sort of just an unpredictable, it was an unpredictable success. They hadn't negotiated the contract with Sony, and so they kind of got caught flat-footed when it became such a success. And again, it was like, it was a success that only would have happened on Netflix, where a movie can go viral, where if that had had some limited run in theaters, it probably would have just been forgotten.

• 32:06Speaker 02

  It's true, but they struck the deal at the end of 25 and you're not getting a movie till 29. Yeah. That is just the timeline, like Sony Pictures Animation, which is up in Canada. Sure. There's a backlog of films that are before this and there's just no way to accelerate that at the moment. But, but I think, I want to go back to Jordy's point. Yeah. Making it cheaper to make content does mean the value of existing content probably comes under pressure. Like, there is no doubt that since you're gonna have so much more content created, existing content will have less value. I think that's a negative for Netflix, it's a negative for Disney, but the platform side of the equation, which is what Netflix is known for, just like YouTube and Spotify and Roblox, I think all of those platforms become huge beneficiaries

• 32:51Speaker 02

  because people are gonna have so much more content on those platforms than they do today. So, I think it ultimately becomes an advantage. Hurts one side of the business, but I think as you look at it holistically, becomes a big, long-term advantage. Because the platform, big platforms have the eyeballs. Like, that's where people turn to, right? Like, you come home from work and you turn on Netflix, you turn on YouTube. Like, those are the fundamental winning platforms and they're battling it out. And I think AI makes that battle even, both of those companies even more powerful.

• 33:24Jordi Hays?

  And so, the, the, it sounds like, if I could summarize the place that you're getting to is, is maybe not believing that Paramount and the Allison's should just lever up to this insane degree when they could potentially take some more, you know, take, uh, maybe still tens of billions of dollars, but just allocate it across a wider variety of deals. Is that, is that, is that one path that you're seeing?

• 33:50Speaker 02

  I, I think this is, they're stretching, right? Like, when they tried to buy this thing at 19 and there were no other bidders, it was a brilliant idea. Maybe even at 23, it was a brilliant idea. As you start getting, you start to realize that, like, you're not winning at 30. That's pretty, I would assume, to both of you and me, like, they're not winning at 30. Yeah. Right? Like, so, they're gonna have to bump and they're gonna have to bump meaningfully. And so, to pay $34, $35, like, you start to get to valuation levels. I don't think you can put any more debt on this. And so, you gotta come up with 10, 12, 14 billion dollars more equity. Like, and even that is too levered. Like, I wouldn't want, I would not want to be in this. transformative AI media world.

• 34:31John Coogan?

  Yeah.

• 34:32Speaker 02

  Sitting there with seven times leverage. That is not a great place to be. And so I truly believe David Ellison has a huge opportunity over the next decade, but I don't think overlevering to buy Warner Brothers is the best path forward.

• 34:45Jordi Hays?

  Also, also, we it's worth noting that state Oracle at the beginning of Q4 was trading at $313 a share. It's now trading at $174 a share.

• 34:58John Coogan?

  Wow.

• 34:59Jordi Hays?

  And so that has to be a factor too, in terms of everyone's confidence.

• 35:03John Coogan?

  Half off.

• 35:04Jordi Hays?

  Around like, hey, how much, how much?

• 35:06John Coogan?

  How much cash is do you have available?

• 35:08Speaker 02

  Look, Larry's got plenty of capital. If he wanted to buy this for all cash, he could. But remember, he's not. This is a $100 billion transaction. The Ellison family's putting in 12.

• 35:19John Coogan?

  Yeah.

• 35:20Speaker 02

  You know, so like, there is a limit on how much I think the Ellison family, they put in, you know, $8 billion or sorry, they put in six of the 8 billion of cash into the Paramount transaction. Redbird put in the other two. So six plus 12, that's an $18 billion commitment between the two deals. It's a big number. But on the flip side, you know, given the size of this transaction, you know, I think there is a limit to how much they probably want to invest in this sector. And again, I just think leverage is not your friend. Like, I look at sort of how you win over the long term in this media space, especially given how much change. And I think you two do a great job highlighting sort of how technology

• 36:04Speaker 02

  is changing what's happening. Being levered is the last thing you want. And I think what was really interesting is that when Skydance bought Paramount, they injected cash onto Paramount's balance sheet to delever it because they didn't want to be levered. And so I think even they understood that they don't want to be levered. They're being forced to lever to try to compete against Netflix. And I think that's actually the mistake. And I just think that there's other ways for them to win long term. Overstretching the balance sheet does not, to me, seem like the right path.

• 36:38John Coogan?

  Explain the cable assets that are sitting within Warner Brothers Discovery. You have CNN, I believe. There's a few other TV channels.

• 36:47Jordi Hays?

  Yeah, when some of the numbers are floating out, CNN doing something like projecting 600 million of EBITDA on like 1.8.

• 36:55John Coogan?

  Yeah, seemed like a good business. My question is, you have this Netflix fight over the Warner Brothers, like the studio, the IP library. And to Netflix, it feels like the TV assets are less valuable. Certainly, they were carved out of the initial offer. Are those more important to Paramount, Skydance, the Ellison family? Is there a world where Netflix takes Warner Brothers, the studio, and the cable assets go to Paramount?

• 37:25Speaker 02

  They're critically important to Paramount because Paramount, as I said, doesn't generate free cash flow. Or doesn't have the earnings capacity of Netflix. And so in order to finance this, to lever this up seven times, you need all of that cash flow. If they were only buying what Netflix was buying, John, this would be levered over nine times. And so you have to have those assets. If you're going to finance it the way they're doing it and not do this as a cash deal, in order to do debt, they need those assets. This becomes really important assets. And so for Paramount, they have to stop the split of this company, which is supposed to happen this summer. If Warner Brothers splits, Paramount can't do this deal because they can't finance it the way they currently are financing it.

• 38:07Speaker 02

  The reality is, these assets like CNN, do I think public market investors will like these assets? No, I don't think so at all. I don't think these are growth businesses. I don't think investors are going to be excited at all. But I do think that there are strategic buyers of these assets where there is the influence and power of owning a news network that will far outweigh its public market trading value. And I think that's really the opportunity. If you put this up for sale, someone's going to come in and buy CNN because it actually has important strategic value. You think about like a NextStar,

• 38:46Speaker 02

  which is trying to build their own news network, trying to build out, they're in the process of making a major acquisition of Tegna. Like, there is certainly an opportunity. Where I think you'll see multiple buyers come out of the woodwork, maybe even billionaires who want, you know, hundreds of billionaires who see this as a way to influence you can, because remember, you could change the direction of CNN from the perception of liberal, you could move it more center right if you wanted to. And so I think there's a lot of people that would look to buy CNN if it was available.

• 39:18Jordi Hays?

  What about, is there any political saving grace for the Allisons? Is there any chance that the Netflix deal gets blocked? Is that the angle? Like if they're not increasing their offer, I'm sure they're back channeling, trying to get it killed. That would be my assumption.

• 39:41Speaker 02

  I'm sure they are, but, but you guys are the, it's funny, doing what we're doing right now is the single greatest reason the deal should be approved.

• 39:49John Coogan?

  Yeah.

• 39:50Speaker 02

  And I mean that sincerely.

• 39:51John Coogan?

  Yeah.

• 39:52Speaker 02

  Like, look at what we're doing.

• 39:53John Coogan?

  Yeah.

• 39:53Speaker 02

  We are sitting on the internet.

• 39:55John Coogan?

  Yep.

• 39:56Speaker 02

  On, on X, broadcasting live.

• 39:59John Coogan?

  Yep.

• 40:00Speaker 02

  No cable subscription required, but you are absolutely competing against the NBC. And like, there is no doubt in my mind that what you're doing is a real comparable, you know, a true competitor to linear television. So trying to tell me that you have to define, you know, streaming TV, subscription TV, let alone free streaming TV like YouTube and X, that we're going to put up artificial barriers and say, this is somehow different than watching CNBC or CNN or Fox News. Like, look, you can make the argument. Will it hold up in court?

• 40:38John Coogan?

  Yeah.

• 40:39Speaker 02

  I would love to see how a judge is going to isolate those categories.

• 40:43John Coogan?

  Yeah.

• 40:43Jordi Hays?

  Yeah.

• 40:44John Coogan?

  You mentioned Take-Two Interactive. It's a $44 billion company. GTA 6 is coming at some point. How does that make any sense for either Netflix or Paramount to own? It feels like for both of them, it would be a massive, just different business line to enter. Obviously, like in the attention economy, they do compete. If you're playing GTA 6, you're not watching CNN, but they just feel like fundamentally very different businesses to me. Is there some synergy that I'm missing?

• 41:19Speaker 02

  Well, I'd say for Paramount specifically, I mean, Skydance, Skydance Games is a real focus. I mean, Ellison, you know, I think if there's anyone in the traditional or legacy media world that bridges Northern California and Southern California, it would be David Ellison. You know, he grew up friends, not just, obviously, his dad is Larry Ellison at Oracle, but he grew up friends with Steve Jobs, right? And like, so if you sort of look at sort of his understanding of technology, you have to believe that he understands the importance and power of gaming. It's why Skydance Games has such big ambitions. And so, you know, I look at sort of the power of that GTA franchise and Red Dead.

• 42:02Speaker 02

  And like, you look at sort of like the future and you go, sure, it'd be great to make more movies and it'd be great to have a bigger studio with Warner Brothers. But there's many ways to win in entertainment. And I think video gaming is a huge category. And while I don't think Take Two and Strauss is looking to sell anytime soon, look, it would be a much smaller transaction relative to Warner Brothers. And you would get some incredible IP and you would shift away. Rather than owning more TV and more sort of legacy studio, you would shift the focus of the company in an entirely different direction, which I think could be really exciting.

• 42:37John Coogan?

  Yeah.

• 42:37Jordi Hays?

  Why did Jared Kushner pull out of the deal?

• 42:43Speaker 02

  You would have to ask Jared Kushner. I have absolutely no idea. But I mean, I'm suspecting that just politically, it didn't look great. I mean, it might have been one thing when this was a friendly, you know, straightforward acquisition, but when you were getting into a competitive bidding situation and it was sort of being looked at as sort of, hey, this is the, you know, this is someone tied to the president that's influencing it. It might have just been, this did not look like he thought it was going to look. But again, I honestly don't know. I've never, I've never met him.

• 43:15Jordi Hays?

  Yeah, that makes sense.

• 43:17John Coogan?

  How are, how are different video generation AI models? Are any of these factors showing up in earnings and financial reports and conference calls? Like, how are management teams messaging around generative AI? Is it just a growth opportunity? Or is it actually becoming something that moves the needle either on the cost side or the revenue side for anyone?

• 43:42Speaker 02

  I would really keep your eyes on Amazon. I think they're the first mover here and really trying to make a dent here.

• 43:49John Coogan?

  Yeah.

• 43:49Speaker 02

  And it's not to make less content, you know, or sorry, to make content cheaper and spend less. Amazon's literally looking at this as can we actually use AI to bring the cost down 20, 30% and then make more content for the same budget. And so this sort of speaks to what you guys were sort of hinting at before. This is a way to increase the total amount of content. And obviously more content means more engagement. And so I really think Amazon's taking a lead here. Netflix has their own AI playbook. I think you're going to start to see it up from Netflix and of course, the other company that's talked about it, we haven't seen anything. But the other company that's most vocal about it would obviously be Paramount, where Ellison certainly believes in the power of technology to change the cost structure of this business.

• 44:34John Coogan?

  What about Disney? Disney did the big deal with OpenAI.

• 44:37Jordi Hays?

  Yeah, I wanted to ask if you're hearing about other IP holders rushing to try to do uh like when we saw that deal happen, I was like, wow. This having like a one year, maybe more exclusive on all the Disney IP. I feel like could be pretty significant. Once it's live, it's going to be incredibly viral. Parents are gonna-

• 44:56Speaker 02

  Jordy, what's the last time you used Sora?

• 44:58Jordi Hays?

  Uh, I was never bullish on Sora specifically.

• 45:03Speaker 02

  But that's the problem, right? Like, so it, all of this is...

• 45:09Jordi Hays?

  But, but I was gonna say, what I was gonna say, I was bullish on the, on the Disney IP deal. Specifically because parents are gonna be willing to pay to bring joy to their children by turning their life into Disney scenes.

• 45:26Speaker 02

  Yeah, or, I mean, do kids just love watching Bluey because they love Bluey? Like, I don't... Do you want to watch yourself? In a, you know, I guess for the creative parent that can actually tell an interesting story. I mean, I get the gimmick like I remember when Sora first came out, we all did it, right? Like we were all trading these around, sending around. I remember I was in a Knicks jersey before they put the copyright controls in. I was in a Knicks jersey on the court dunking like it was, I was catching the game winning pass in the, you know, for the Giants like, and I think.

• 45:56Jordi Hays?

  I think, I think you're a little, I think you're a little bit jaded. I mean, Disney has a whole business of just like have lunch with a character, right? Parents are spending.

• 46:04John Coogan?

  I mean, it goes back to you're at Disneyland, you're, the kid puts their face through the car, through the cardboard cutout and they appear to be Superman.

• 46:10Jordi Hays?

  And, and, and the only anecdote, anecdotally, when, when I first took an image of my son and I turned it, I turned the two of us into dinosaurs. He has never forgotten that moment and he'll bring it up all the time. Turn us into, turn us into dinosaurs. And I'm really like, we're not using AI right now. We're gonna go, we're gonna go to the beach.

• 46:30Speaker 02

  Look, I think it all depends on how sort of, how preconceived it is like, do, do, is it just turning it in and you have to go figure out how to make something interesting and compelling? Or is it sort of already pre-engineered and preset where you stick in your faces and the scene comes to life? Like, I think it's gotta not be a lot of work because I think, you know, people don't, I think, I will say, I am not a terribly creative from like a writing stories like, you know, people need to be taught how to do it. I think that initial, how to prompt, how to make it good is not easy. And so it'll be interesting to see how easy they make it for parents to make this really a great experience. So I like the idea and look, I give Disney credit.

• 47:15Speaker 02

  You would not have expected Disney to be the one to jump out in front on AI, given how much they're focused on sort of protecting their IP. So I give them a lot of credit for trying. I, I think the key is Sora needs to become something that really becomes less of a gimmick and more where you actually want to sit down and actually like watch the content because I still feel like it right now, it feels very gimmicky.

• 47:37Jordi Hays?

  Yeah.

• 47:38John Coogan?

  Yeah.

• 47:38Jordi Hays?

  Yeah, I, I do, I wonder, I wonder what OpenAI is getting out of it, right? Disney has 150 million people visit the parks annually. If they're, if in the line, there's like a QR code that's like turn yourself into such and such character.

• 47:54John Coogan?

  While you're waiting.

• 47:55Jordi Hays?

  I think like right now, OpenAI has a challenge, which is that free LLMs are pretty.

• 48:02Jordi Hays?

  Great, right? And, and they have this gap.

• 48:05Speaker 02

  Free is great.

• 48:06Jordi Hays?

  Yeah, they have this real gap between turning on commerce and turning on ads and really unlocking that from a revenue standpoint. And I think if they can, and making these sort of like magical products that are unique to OpenAI, that you're not going to be able to get at, at, you know, through Gemini or any of these other LLMs, I think it, I think it could buy them a little bit of time to, to turn on some of the other monetization. But again, I think you're, I think you're right on Sora. I wonder how they're doing. See if they're still in the App Store top 25.

• 48:40John Coogan?

  They've been in the top 100. I think they're around 60-ish or something. And I agree with you. I haven't used the Sora app very often, but I am seeing clearly content that has been generated with Sora distributed on Instagram. And so there is a world where, you know, you create a prosumer tool that's subscription that people are paying for. And then they're, and the really creative people are distributing that content elsewhere. They've already said that some of it will go on Disney Plus. And so you could have someone who's a creative storyteller, tell a story that takes place in Disney IP as the world that they're interacting with. And then that does do well and it goes out and, and maybe, maybe it's not every single

• 49:22John Coogan?

  person using the Sora app to generate their own videos, but that you're seeing content that was generated through that partnership and it's monetizing in a variety of ways. I don't know.

• 49:33Speaker 02

  This all gets back to what we said before.

• 49:34John Coogan?

  Yeah.

• 49:35Speaker 02

  There's going to be a heck of a lot more.

• 49:36John Coogan?

  There's going to be more content for sure.

• 49:37Speaker 02

  Over the next five years.

• 49:38John Coogan?

  Yes.

• 49:39Speaker 02

  There's going to be an exponential explosion.

• 49:41John Coogan?

  Yes.

• 49:41Speaker 02

  Of content.

• 49:42John Coogan?

  Yes.

• 49:42Speaker 02

  And it's funny you mentioned Instagram. Another example, platforms.

• 49:45John Coogan?

  Yeah.

• 49:46Speaker 02

  Platforms win.

• 49:47John Coogan?

  Totally.

• 49:48Speaker 02

  That is the key.

• 49:48John Coogan?

  Yep.

• 49:49Speaker 02

  If you own and control a platform and the cost of creation comes down.

• 49:54John Coogan?

  Yeah.

• 49:54Speaker 02

  You're going to be a long-term winner. And so that's why Spotify, why Netflix, why YouTube, why Roblox? Like that's how we're positioned is picking platforms are going to be the big winners over the next five years.

• 50:05John Coogan?

  So maybe that means that Paramount plus Warner Brothers and HBO is more of a platform than separate. And there is actually accretive value to putting those together and overpaying. And so maybe there is some rhyme to the reason behind David Ellison's aggression here.

• 50:22Speaker 02

  Building a platform, a daily use platform is really, really hard. I'm not saying it's impossible, but it is really hard.

• 50:30John Coogan?

  If you've got the Sopranos and Looney Tunes and Superman and Batman and you're on there as a kid and you grow up and it's one of the key apps that you open next to Netflix, next to Disney+

• 50:42Speaker 02

  The funny thing is, is what you're saying is, it's all the reasons why Disney should be bidding on Warner Brothers Studio as well. They need more content.

• 50:49John Coogan?

  I feel like that one just aesthetically actually does trigger FTC just because Superman and Spider-Man can never cross paths. Batman and Iron Man, it's too similar. They're billionaires, they're tech guys. It doesn't work. They gotta be separate universes.

• 51:06Speaker 02

  I'm just saying, they should want a lot more content.

• 51:08John Coogan?

  They should. Oh, 100%. No, I agree. If they could get it done. And they could make the same argument that Disney Plus plus Warner Brothers is no more powerful than YouTube and Spotify and Instagram and all the other platforms that are soaking up people's time, including PlayStation.

• 51:27Jordi Hays?

  What are you paying attention to this earnings cycle?

• 51:32Speaker 02

  I mean, I think the, you know, this is obviously the 26th outlook for a lot of these companies. And I think, you know, you're going to hear sort of like, in a world where so much is changing so fast. I mean, we came out with our, we do a quarterly earnings scorecard where we sort of highlight phrases that are used. And it'll be interesting to see while AI dipped in terms of mentions last quarter, do we see even more companies talking about AI as we move through the year? I think that's going to be really interesting to watch. And is it in a positive or negative light and like who's being disrupted by or helped by? I think is going to be really interesting to watch. And then of course, just going back to where we started, you know, whether it's Netflix or Paramount, someone's going to win Warner Brothers. Well, then the question is, what does everyone else do?

• 52:16Speaker 02

  Because everybody else looks really small. And so sort of seeing, you know, the reverberations of what happens because of all of this is going to be really important to listen as you move through earnings.

• 52:28John Coogan?

  What do you think about some of the private movie studios? Do you think any of those will get picked up? A24 did around a 3.5 billion, Thrive Capital mid 2024. Certainly building a lot of IP, they found an interesting mix of content. I really like a lot of their films. Do you think anyone will try and acquire some smaller studios?

• 52:52Speaker 02

  Look, the biggest problem is smaller studios don't move the needle, which is why I think, you know, something like Lionsgate hasn't been bought, but why Warner Brothers, you're seeing this massive interest. I don't know about the smaller studios. I certainly think like as you look at something, you know, you look at Sony Pictures or Sony, you know, Sony, you know, Pictures and TV. There are assets out there that, you know, look like they are ripe for, you know, M and A, whether it's sale or some form of combinations. It does feel like you're going to see more combinations in the year ahead.

• 53:24John Coogan?

  Yeah, but again, you can, you can also just license their content, which is what Netflix and many of the other streamers have done. Well, thank you so much for taking the time to come chat with us. Always a good time to hang out.

• 53:33Speaker 02

  Great to hang.

• 53:34John Coogan?

  Have a great rest of your week. We'll talk to you soon, Rich. Goodbye. Plaid. Plaid powers the apps you use to spend, save, borrow, and invest, securely connecting bank accounts to move money, fight fraud, and improve lending now with AI.

• 53:49Speaker 02

  Back to the timeline.

• 53:51John Coogan?

  The messy drama that dealt a blow to one of AI's hottest startups. This is an exclusive in the Wall Street Journal. After a relationship with a colleague, a Thinking Machines co-founder had his role changed. Months later, he was fired after a contentious meeting. Megan Bruboski has the story in the Wall Street Journal alongside Keech Haigh. Mira Maroti's meeting with her co-founders going off the rails. Maroti, the chief executive of AI startup Thinking Machines Lab, had shown up for work on Monday last week expecting to have a one-on-one with Barrett Zof, her chief technology officer, according to people familiar with the matter.

• 54:33John Coogan?

  Last summer, she had learned that Zof was in a relationship with a colleague. In the months since, she had expressed repeated concerns about his lack of productivity, according to the people. She was invited instead to an impromptu meeting with Zof, another co-founder, and a third employee. The three told her they agree, they disagreed with the direction of the company and that they were considering leaving. They asked Zof to be given Charge of all technical decision making, according to people. Maroti responded that Zof was already CTO and asked why he hadn't been doing his job for months. So they're clearly beefing. It's a very funny. It's a funny request, like what was he doing as CTO if he didn't have full control? But I mean, I mean, obviously CEO can override all sorts of stuff and there's all other people

• 55:18John Coogan?

  around the table and, uh, you know, titles only mean so much. There's soft power all over the place. So two, two days later, Zof was fired within hours. All three had signed offers to rejoin OpenAI, the AI lab that they ditched a year ago to join Maroti's fledgling startup. The departures are a sign of how the heated AI race that is consuming hundreds of billions of dollars and transforming the economy is as much a battle for talent as technology. For all the high tech advancements AI startups are spreading to develop, they are ultimately at the mercy of the humans.

• 55:51Jordi Hays?

  So do you think this was a three hour talent acquisition process? Do you think OpenAI just, just looked at, uh, checked the timeline and said, hey, we got three people that are on the market, maybe we should hire them.

• 56:06John Coogan?

  It seemed like they were talking before.

• 56:08Jordi Hays?

  They entered the portal and then they immediately got picked out.

• 56:11John Coogan?

  The trade portal for sure. That's exactly what happened.

• 56:13Jordi Hays?

  No, I think, I think very obvious that, uh, the conversations had been ongoing. It's very likely, I would assume they had already agreed to, to terms.

• 56:21John Coogan?

  Yeah, it seemed like it.

• 56:22Jordi Hays?

  Prior to the news going out.

• 56:24John Coogan?

  Well, let's continue, but first vibe.co where D to C brands, B to B startups and AI companies advertise on streaming TV, pick channels, target audiences and measure sales just like on Meta. So, um, Zof's firing and decision to rejoin OpenAI with colleagues also marks a pendulum swing for a company that Maroti, the startup that, uh, for startup that Maroti, that startup's former chief technology, uh, former technology chief had founded with 20 former OpenAI employees. So 20 people from OpenAI left during the, uh, Thinking Machines, uh, foundation. Addressing Zof's departure to Thinking Machines employees, Maroti said there had been multiple issues with his performance, trust and conduct, according to an internal message viewed by the Wall Street Journal.

• 57:09John Coogan?

  Zof said she fired him after he exposed an intent to take a job elsewhere. Thinking Machines terminated my employment only after it learned I would be leaving the company, full stop. At no time did Thinking Machines Labs cite me on any performance reasons or unethical-

• 57:25Jordi Hays?

  John, I'm breaking up with you.

• 57:27John Coogan?

  No.

• 57:27Jordi Hays?

  And you're like, no.

• 57:28John Coogan?

  You're fired. I'm breaking up with you. It does feel like a little bit of that going on. But yeah, there's a war for narrative here between Barrett and Mira, clearly. They didn't, so he says Thinking Machines didn't cite any performance reasons or unethical conduct as part of the reason for the termination, and any suggestion otherwise is false and defamatory, Zof said in a statement to the Journal. The exits, coupled with fellow co-founder Andrew Tullock's decampment to Meta last fall, leave Thinking Machines with just three of its original six founders. Maroti spent six years at OpenAI, where she earned a reputation for emotional intelligence and lack of ego, and was named interim CEO during the brief period when CEO Sam Altman was

• 58:10John Coogan?

  deposed. She helped launch its first product and ran almost every aspect of the company before starting Thinking Machines last February. Many of the early researchers, including Zof, that she hired came from OpenAI's post-training team, the division that built ChatGPT, and was tasked with teaching AI models how to communicate with humans. Maroti's issues with Zof started over the summer when she began to suspect he was having a relationship with a colleague with whom he had lobbied to bring over from OpenAI, according to people familiar with the situation. In responses to questions from the Journal, Zof said that many people at Thinking Machines wanted to hire the woman, including Maroti. At the time, Maroti was in the process of raising one of the largest seed rounds in Silicon Valley history. The company ultimately raised $2 billion at a $12 billion valuation when

• 58:54John Coogan?

  she confronted Zof about the possibility of an undisclosed relationship with a female employee who was junior to him at the company but did not report to him. He initially denied it, according to people familiar with the situation. By June, however, both Zof and the woman had told Maroti about the relationship which had begun when they were colleagues at OpenAI. People with knowledge of those discussions said the woman then left the company and returned to OpenAI, which is sort of a wrinkle in this. Zof told his boss that he had been manipulated by the woman into a relationship, according to people familiar with the matter. Shortly after that conversation, he took a break for more-

• 59:32Jordi Hays?

  Okay, I gotta, I generally think that the-

• 59:38John Coogan?

  Mira, she told me it was cuffing season. I didn't know what it meant, so I just said, okay. I got cuffed. Is that what happened?

• 59:45Jordi Hays?

  Yeah, I mean, I think just saying like I was manipulated into becoming the significant other. You know, you gotta take a little responsibility.

• 59:54John Coogan?

  You know, everyone is assuming that this is a romantic relationship. They never reported that this is a romantic relationship. They just said that he had a relationship with someone else and it was undisclosed. And I think that more companies need to be clear about the rules around disclosures of relationships. Like if you and Tyler start an esports team, for example, like you would have a relationship. You would be teammates on playing Call of Duty. And if you didn't disclose that to me, I would be, I would feel left out. I'd be like, why don't I, why am I not on the team? If I find out that Tyler and Scott are going off and drinking a bunch of athletic beers, athletic brews every night, you know, without me, that's a relationship to bros.

• 1:00:37Jordi Hays?

  And it wasn't disclosed.

• 1:00:38John Coogan?

  And it wasn't disclosed.

• 1:00:39Jordi Hays?

  And you might be very angry.

• 1:00:40John Coogan?

  I might be angry.

• 1:00:41Jordi Hays?

  That they didn't disclose.

• 1:00:42John Coogan?

  So I think relationship disclosures need to go beyond romantic relationship disclosures. If you're, if you're just bro-ing down with people.

• 1:00:51Jordi Hays?

  That actually is, that actually is kind of a real thing. Sometimes like catching up Monday after the weekend, somebody's like, oh yeah, I was hanging with so and so on Saturday.

• 1:00:59John Coogan?

  I'm like, wait, where was my invite?

• 1:01:00Jordi Hays?

  You guys hang out on Saturday?

• 1:01:02John Coogan?

  What? You didn't disclose that relationship?

• 1:01:05Jordi Hays?

  Korean barbecue?

• 1:01:06John Coogan?

  Yeah. Oh, so you have a relationship where you go to Korean barbecue together?

• 1:01:10Jordi Hays?

  Okay.

• 1:01:10John Coogan?

  And you just didn't think to tell the rest of the company?

• 1:01:12Jordi Hays?

  Okay, BBQ.

• 1:01:13John Coogan?

  Yeah. What's your thoughts?

• 1:01:17Speaker 03

  I was gonna say, I think there's, you know, I like to imagine there's some kind of like Shakespearean tragedy here, right? Where it's like the Montagues and the Capulets, that's OpenAI and Thinking Machine.

• 1:01:25John Coogan?

  Oh, yes.

• 1:01:26Speaker 03

  And it's these forbidden lovers.

• 1:01:27John Coogan?

  Yes.

• 1:01:28Speaker 03

  Can't be together.

• 1:01:29John Coogan?

  But now they are. They're united because everyone is at OpenAI. Even though, I mean, if you go to the journal and you say, I've been manipulated by that woman, who's now my colleague because they both work at OpenAI now, right? So that's odd.

• 1:01:43Jordi Hays?

  Wait, do we know that the colleague went back to?

• 1:01:46John Coogan?

  So the woman left the company, Thinking Machines, and returned to OpenAI. So Barrett and the woman in this relationship, which might be romantic, they might just be playing board games together or playing COD professionally together, who knows? But they had, but they were both at OpenAI. They both went to Thinking Machines and then they both went back to OpenAI. And so they're the they're all in the Montague camp now or the Capulet camp. I don't know who's who. I I haven't studied enough to to assign roles. Do you have you read Shakespeare recently?

• 1:02:17Jordi Hays?

  Well, at you know, at the end, like they both die.

• 1:02:20John Coogan?

  Yeah. Is that what is that? They they both die and they get steamrolled by a Neo lab? Is that what happens in in Romeo and Juliet? I don't know.

• 1:02:28Jordi Hays?

  OK, one thing is like rewinding to November 13.

• 1:02:34John Coogan?

  Yes.

• 1:02:34Jordi Hays?

  Bloomberg reported.

• 1:02:35John Coogan?

  Hmm.

• 1:02:36Jordi Hays?

  Thinking Machines in funding talks at $50 billion valuation.

• 1:02:40John Coogan?

  Yeah.

• 1:02:41Jordi Hays?

  So.

• 1:02:41John Coogan?

  That's a big.

• 1:02:42Jordi Hays?

  The big question.

• 1:02:42John Coogan?

  12.

• 1:02:43Jordi Hays?

  Yeah, the big question now is is did any any of this financing talks actually convert into real investment?

• 1:02:50John Coogan?

  Hmm.

• 1:02:50Jordi Hays?

  And if not, I think that is very little chance that a round gets done.

• 1:02:56John Coogan?

  Yeah.

• 1:02:56Jordi Hays?

  In that territory anymore.

• 1:02:57John Coogan?

  Yeah. Yeah, it is. It is like certainly not the best thing to have hit in the journal if you're out on the fundraising track. At the same time, these mega rounds, it just feels like they take a long time. We've been hearing about the Anthropic round for a really long time. And we've also been hearing that the Anthropic round, even though it's been going on for, I don't know, six months or something, like it's going really well and everyone's excited. And there was a whole bunch of FUD around the XAI round. Is it going to happen? Have they hit benchmarks? Is the is there, you know, too much fear around all the different hallucinations and whatnot? Are they seeing real traction? The round got done. And so I I this is not like it's not over because these rounds can just take a long time.

• 1:03:42John Coogan?

  So it's not like, oh, you need to have the round closed in three months.

• 1:03:46Jordi Hays?

  Yeah, but.

• 1:03:46John Coogan?

  If you're raising it this.

• 1:03:47Jordi Hays?

  But yeah, so so.

• 1:03:48John Coogan?

  It takes time.

• 1:03:48Jordi Hays?

  Mir is out there fundraising.

• 1:03:50John Coogan?

  Yeah, but this is obviously.

• 1:03:50Jordi Hays?

  Yeah, we've.

• 1:03:51John Coogan?

  Three co-founders.

• 1:03:51Jordi Hays?

  Figuring a lot of stuff out.

• 1:03:53John Coogan?

  Yeah.

• 1:03:53Jordi Hays?

  You know, we have a lot of momentum.

• 1:03:55John Coogan?

  Yeah.

• 1:03:55Jordi Hays?

  We're really excited about what we're doing. And then you have articles in the Journal.

• 1:03:59John Coogan?

  Yeah.

• 1:04:00Jordi Hays?

  That are saying your own co-founders disagree with the direction of the company.

• 1:04:05John Coogan?

  Yeah.

• 1:04:06Jordi Hays?

  I think most investors are going to be like, hey, we should probably chat before we give you another.

• 1:04:11John Coogan?

  Yeah.

• 1:04:11Jordi Hays?

  Five billion dollars.

• 1:04:12John Coogan?

  But Mir is going to say they they only disagree because I fired them for having relationships.

• 1:04:16Jordi Hays?

  Yeah.

• 1:04:16John Coogan?

  Like, I what like.

• 1:04:17Jordi Hays?

  He said, she said.

• 1:04:18John Coogan?

  We're solid. Yeah, it is a he should, she should. And it has Silicon Valley talking. Over the next several months, Thinking, executives at Thinking Machines witnessed a drop off in Zofe's performance.

• 1:04:30John Coogan?

  After he was cycled back to a new technical contributor role with reduced executive and managerial responsibilities, and they were tracking his performance, they said his usage of Slack, the main arena where the company did its work, declined precipitously in the following months. He was locked in. I don't know, I don't see a problem with, if you go from a manager to an individual contributor, you don't need to be slacking as much, you need to be locked in, you need to be grinding, right, and write in prompts. In his responses, Zof said he worked as an individual contributor for two months and also worked on projects that included recruiting and retention of talent, roadmap planning, and the release of the company's model training product, Tinker.

• 1:05:11John Coogan?

  He said he was also out of the office for parts of November and December due to illness and a death in the family, very tragic, that's very sad, in addition to the holidays. So he's like, I'm not on Slack, I was with my family on Christmas. In October, shortly after Tulok left for Meta, where he had previously worked, Zof reached out to Altman to talk about coming back to OpenAI. By the time of their meeting with Maroti last week, Zof, co-founder Luke Metz and third employee Sam Shone-Holtz, had been unhappy with the direction of the company for months and had been holding talks with both OpenAI and Meta in recent weeks about joining either company as a trio, according to people familiar with the matter.

• 1:05:53John Coogan?

  Interesting that Meta, amid the crazy buying spree that they've been on in the talent wars, did not jump in with something, you know, so much higher. They already have Andrew Tulok, they've already got One Thinking Machines co-founder, they're basically acquiring the whole team, piece by piece. They're going to wind up paying more than the 12 billion price.

• 1:06:09Jordi Hays?

  Yeah, and I don't know, I mean, it wasn't that long ago that people were speculating, okay, what is Thinking Machines worth in an aqua hire scenario? And based just on that type of analysis, it's worth a lot less. Today than it was

• 1:06:23John Coogan?

  Yeah, less talent.

• 1:06:24Jordi Hays?

  Few months ago.

• 1:06:25John Coogan?

  I wonder, I wonder what they mean when they say unhappy with the direction of the company. Like, what do they, what do they want? Like, are they, are they excited about the ads product at ChatGPT? Are they excited about Sora? Are they excited about OpenAI for health or for science, research, or particular technical direction, just the GPU scaling, the build out? Just how rich OpenAI will be with the backing of Oracle and all that? Yeah, it's 1.4 trillion, little bit nerve wracking if you're an investor. But if you're an AI scientist, you're like, I'm gonna have unlimited resources. And so it could be that, I don't know.

• 1:07:01Jordi Hays?

  I think, I think the, the big question is obviously,

• 1:07:04John Coogan?

  Yeah.

• 1:07:04Jordi Hays?

  what is, what's Albania's move?

• 1:07:06John Coogan?

  Hmm.

• 1:07:06Jordi Hays?

  Stand by Mira, ride with Mira.

• 1:07:08John Coogan?

  Yeah.

• 1:07:09Jordi Hays?

  Potentially lead this round at 50, right?

• 1:07:12John Coogan?

  Great.

• 1:07:13Jordi Hays?

  Albania, the, the government of Albania

• 1:07:15John Coogan?

  Is an investor.

• 1:07:15Jordi Hays?

  Invested around 11 million dollars

• 1:07:17John Coogan?

  No way.

• 1:07:17Jordi Hays?

  into thinking machines.

• 1:07:19John Coogan?

  No way.

• 1:07:19Jordi Hays?

  The, they could decide to take a bigger swing, though. The GDP of Albania is somewhere around 30, 30 billion USD.

• 1:07:27John Coogan?

  30 billion.

• 1:07:28Jordi Hays?

  Um, and anyways, they might, you know, take a Trump Intel kind of dynamic.

• 1:07:33John Coogan?

  Yeah.

• 1:07:33Jordi Hays?

  Say, you know, we need national AI champion and potentially nationalize thinking machines.

• 1:07:37John Coogan?

  They could.

• 1:07:38Jordi Hays?

  Have like a joint, joint venture.

• 1:07:39John Coogan?

  I don't think you can nationalize a company that's based in America if you're not an American government.

• 1:07:44Jordi Hays?

  Joint venture between A16Z and, and Albania.

• 1:07:46John Coogan?

  Yeah, yeah. So I saw a vibe reel of Jamie Dimon talking about like how important it is that his bank is big, and he says JP Morgan has to be big because we bank, you know, all of the Fortune 500. We bank governments. We bank the US government. That's what he said. It's such a good line. Banking governments. I really, I really want to know what's involved in that. Anyway, um.

• 1:08:06Jordi Hays?

  Yeah. So. I, I, I think like, I think that my takeaway from this is like, the pressure, the pressure for thinking machines to deliver went from like, like, pretty extreme to like, maybe slightly more extreme.

• 1:08:21John Coogan?

  Yeah.

• 1:08:22Jordi Hays?

  But it's actually not that much of a difference.

• 1:08:24John Coogan?

  A little random.

• 1:08:24Jordi Hays?

  I feel like they were already under a lot of pressure, similar to Meta where like dense talent concentration.

• 1:08:30John Coogan?

  Yeah.

• 1:08:30Jordi Hays?

  Haven't shipped anything like, you know, truly remarkable yet.

• 1:08:34John Coogan?

  Yeah, yeah.

• 1:08:34Jordi Hays?

  Obviously, everyone's looking to see if they're gonna be a real

• 1:08:37John Coogan?

  Yeah.

• 1:08:37Jordi Hays?

  uh, horse in the race.

• 1:08:39John Coogan?

  Yeah, yeah, yeah. Um, yeah.

• 1:08:42Jordi Hays?

  And the other, the other thing is like, this team was created during An insane period of drama.

• 1:08:48John Coogan?

  Yeah.

• 1:08:48Jordi Hays?

  So it's not all that surprising that.

• 1:08:51John Coogan?

  Born in the drama.

• 1:08:52Jordi Hays?

  They were born in the drama. Now they're living in the drama.

• 1:08:55John Coogan?

  Yeah.

• 1:08:56Jordi Hays?

  And, but, they can consolidate.

• 1:08:58John Coogan?

  Yeah.

• 1:08:58Jordi Hays?

  They can refocus.

• 1:08:59John Coogan?

  Yeah.

• 1:08:59Jordi Hays?

  They can realign the team.

• 1:09:00John Coogan?

  Yeah.

• 1:09:01Jordi Hays?

  They still have a bunch of super talented people.

• 1:09:02John Coogan?

  Yeah.

• 1:09:03Jordi Hays?

  And, uh, I'm, I'm sure they can still, you know, figure out kind of a niche and, and deliver.

• 1:09:09John Coogan?

  Yeah. Anyway, Okta. Okta helps you assign every AI agent a trusted, a trusted identity. So you get the power of AI without the risk. Secure every agent, secure any agent. Okta secures AI.

• 1:09:23Jordi Hays?

  Well said.

• 1:09:23John Coogan?

  After the meeting, so, uh, the three co-founders, the three Thinking Machines employees that have this meeting, uh, Mira asks them, have you already committed to jobs elsewhere? Mets and Schoenholz said they hadn't. Zof didn't answer, according to some people that were in this meeting, uh, the day after the meeting. Zof had dinner at a pizzeria with Meta executives Alex Wang and Nat Friedman. He confirmed on Wednesday he was fired. Uh, Maroti posted on X that Thinking Machines had, quote, parted ways with Zof. Less than an hour later, OpenAI's CEO for Applications, uh, is it CEO for Applications, Fiji Simo? I thought it was CEO of Applications, Fiji Simo. Uh, anyway, she's, she's running the application.

• 1:10:07John Coogan?

  Uh, she posted that Zof, Mets and Schoenholz were returning to the company and that negotiations had been underway, quote, "for several weeks." That's an interesting thing to put in your, put in your hiring post, uh, because there's clearly going to be a narrative about how sudden was this, when, when was this decided, blah, blah, blah. Uh, but she is saying proudly that we've been talking to these folks for weeks. Uh, she said Zof would report, would report to her while the other two would report to him. So, uh,

• 1:10:33Jordi Hays?

  Yeah.

• 1:10:33John Coogan?

  The, the, the craziness with Thinking Machines.

• 1:10:36Jordi Hays?

  End of, end of the day, you got Mira, you got John Schulman.

• 1:10:39John Coogan?

  Yeah.

• 1:10:40Jordi Hays?

  Like, still.

• 1:10:41John Coogan?

  And it feels like there's, yeah, it feels like there's some sort of niche that could they could carve out. The, I mean, when we first heard about the like fine tuning for L L Ms for business for B to B companies like that seemed like not. It was not the A G I super intelligence pitch. It was also not the, okay, we're going to niche down and give consumers one specific thing. We're going to go after audio, we're going to go after video, we're going to go after, uh, we're going to make a, an A I version of Excel or A I version of PowerPoint. Like, there's so many like niche A I companies that have done very well. We're going to do A I for legal, A I for health, right? Like, there's all these ways that you can niche down.

• 1:11:21John Coogan?

  They kept it sort of broad, but, but it felt like going into the enterprise with her connections and her background and the team seemed like something that could ramp revenue very, very quickly.

• 1:11:30Jordi Hays?

  Yeah, and the raw talent of the team.

• 1:11:32John Coogan?

  Totally, yeah.

• 1:11:32Jordi Hays?

  A lot of which still exists.

• 1:11:34John Coogan?

  Yeah, so, uh, but I, I mean, really like the, the strongest way to counter like the vibe or that's happening right now is, um, just show some good numbers. Because if the business is working, even if you have a little bit of tumult on the technical side and there's, you know, a C T O leaving, like, if the business is working.

• 1:11:52Jordi Hays?

  With Open A I, it's like, you know, some of the craziest drama ever surrounding a company. And then you look at, you know, the revenue ramp and it's like, you know.

• 1:11:59John Coogan?

  And the D A Us are just through the roof and you're like, okay, well, clearly the user was completely unaffected. I bet if you look at the Chat G P T daily active user growth chart, you cannot see Sam Altman getting fired and then rehired. It's not like people were like, well, I'm not using this app today and I'm firing it back up once a week. Like, no, there was no, there was no blip in the graph, I'm sure, around that because this was like Silicon Valley drama. And for the average user, it's like, did it deliver or not?

• 1:12:28Jordi Hays?

  Yeah.

• 1:12:29John Coogan?

  And that's just something that happens all the time when there's these drama, uh, elements that burst onto the scene and take over the timeline for a few days.

• 1:12:36Jordi Hays?

  Yeah, the, the, another, another possible route and then things would have to get really bad over there. They'd really have to be directionless, which, uh, again, you know, the team clearly was, was debating, uh, on, on if the direction was correct. But it sounds like they do have a direction. But I, I still think this is a company that would have a pretty meaningful valuation in an aqua hire context, right? Like, if Amazon were to come and buy them, how much would Amazon pay to get John Schulman and Miramarati?

• 1:13:08John Coogan?

  Yeah.

• 1:13:08Jordi Hays?

  Like, at?

• 1:13:10John Coogan?

  Should be able to clear the prep stack, for sure.

• 1:13:12Jordi Hays?

  Yeah, by like a long shot, you would imagine.

• 1:13:15John Coogan?

  Anyway, MongoDB. Choose a database built for flexibility and scale with best-in-class embedding models and re-rankers. MongoDB has what you need to build what's next. I wanted to look at this photo of Davos. It's AI-generated, but it captures a good vibe. A whole bunch of private planes parked there. That's not real, but I like that Kevin Kwak contextualizes it anyway, saying, "This looks like Hoth Echo Base." And he shared one further down that's Davos transformed into a Star Wars scene. Anyway, over in Davos.

• 1:13:52Jordi Hays?

  Trey says, "We need to know what those machines are thinking."

• 1:13:56John Coogan?

  You call it thinking machines intelligence. Thinking machine intelligence. TMI Labs.

• 1:14:02Jordi Hays?

  I mean, we don't know, too. It's possible that when they think, when they're, they were debating the product direction, they were talking about, "Should we make branded 45s?" Right? We know they're making, we know they have branded plates.

• 1:14:14John Coogan?

  Oh, yes, yes, yes, yes.

• 1:14:15Jordi Hays?

  But.

• 1:14:16John Coogan?

  Maybe that was the technical direction.

• 1:14:18Jordi Hays?

  Yeah.

• 1:14:19John Coogan?

  Like, "Do you lift heavy, or do you do lower weight, higher reps?"

• 1:14:22Jordi Hays?

  Yeah.

• 1:14:22John Coogan?

  And there was a massive debate over that.

• 1:14:25Jordi Hays?

  Anyways.

• 1:14:26John Coogan?

  I mean, Chip Buddy is another relationship that you need to just close. If you're spotting each other, I want to know about it. I want to know who's spotting who, because that's an important relationship that's happening outside of the workplace. I got to know about it, if you're going to be lifting together.

• 1:14:40Jordi Hays?

  Anyways, I'm rooting for Thinking Machines and excited to see what they do.

• 1:14:45John Coogan?

  The, Demis and Dario are apparently just bro-ing out in Davos. I love it. Lisan Al-Ghaib says, "Demis Hassabis, CEO of Google DeepMind at Davos, quote, "When told that Dario Amade was here earlier today, his face lit up. Two minutes later, he was talking about a CERN-like collaboration for AI. Once the labs are close to AGI, they're just stoked on each other. I'm pretty, I'm on pretty good terms with pretty much all of the other leaders at the leading labs. I love Ilya, and we're good friends." You love it. Just some positivity hanging out at Davos. Demis said he thinks entry level jobs and internships might fall away due to AI. Sees consistency as the biggest problem with current agents.

• 1:15:30John Coogan?

  Advice for college graduates get incredibly proficient with these new tools, AI agents. And so, yeah, we were debating this earlier, like the role of a junior engineer is going away, but is it possible that it just changes? Like, what makes a senior engineer that much better with an AI tool? That they don't need anyone else who can potentially use AI tools as well? How much of this is something where, I mean, to go back to like the Chinese young hiring boom, there's an element where I'm sure there's companies where you have older software engineers

• 1:16:14John Coogan?

  who are more resistant to adopt AI technology and you'd actually be better off with a young junior.

• 1:16:19Speaker 03

  Here's a tough question for you, Tyler. What are you fantastic at that AI is bad at?

• 1:16:26John Coogan?

  Hmm.

• 1:16:29Speaker 03

  Uh, walking around, being physically embodied.

• 1:16:33John Coogan?

  Embodied, that's the last.

• 1:16:35Speaker 03

  So maybe that's like for China, it's like maybe the, you know, Silicon Valley has kind of found like Peter Asti from First Principles. Maybe, you know, it's just a similar thing over there, right? There's actually a lot of value. I think, like, so generally, like, I'm kind of, I've always gone between like, is our jobs actually going to go away? Or are they just going to get like more fake? Like Jordi and I were talking about this earlier where it's like, are there just going to be no junior jobs in like five years? Or are they just going to be like, you're just kind of, it's like, you know, you're in the office because like, it's like people like having other people in the office and stuff like this. So I don't really know where I sit, but I think I'm probably more in the camp of like, you just don't need to hire new people.

• 1:17:18John Coogan?

  Yeah.

• 1:17:19Jordi Hays?

  Ken Griffin.

• 1:17:21John Coogan?

  What did Ken Griffin say?

• 1:17:22Jordi Hays?

  Ken Griffin has been on a tear.

• 1:17:25John Coogan?

  Okay, let me tell you about Consol. Consol builds AI agents that automate 70% of IT, HR, and finance support, giving employees instant resolution for access requests and password resets. Let's play.

• 1:17:37Jordi Hays?

  So the post here, one up for the team. Citadel CEO says AI has reempowered technology departments in every business, but claims that 50% of entry-level white-collar jobs will disappear due to AI in five years. Is hype. He's throwing some cold water on Dario's talk track. But let's play the video.

• 1:18:00John Coogan?

  Let's play the video.

• 1:18:04John Coogan?

  Are we getting audio? Where's Ken Griffin on this one?

• 1:18:09John Coogan?

  Is this the right one? The, from Disclosed TV, Citadel CEO says AI has reempowered technology. Is that the one, Jordi? Yeah? Let's play it.

• 1:18:20Jordi Hays?

  And we are, I guess, in the market for an AI agent that can play videos on our.

• 1:18:26John Coogan?

  Let me tell you about Figma. Figma Make isn't your average vibe coding tool. It lives in Figma, so outputs look good, feel real, and stay connected to how teams build, create code-backed prototypes fast.

• 1:18:38Speaker 04

  First of all, it's a pleasure to be on the Gloom and Doom panel.

• 1:18:44Speaker 04

  1920s were an extraordinary period. As I said at the beginning, it's not preordained. But I just love the end note of the 1920s, which was, of course, the Great Depression, Andrew. So let's take a step back and talk about where we are right here, right now. The area of recklessness is the spending of governments around the world, who are all, with little exception, are all spending well beyond their means. That's the recklessness of this moment in history. This is not a parallel to the 1920s in terms of the recklessness of the private capital markets. It's a story of the recklessness of government spending.

• 1:19:27Speaker 04

  Within the private sector, there's a huge question as to where AI will take us. And I was carefully taking notes and listening to what Larry has to say or to what Madame Lagarde has to say, because this is one of the big issues of our moment. Will AI create the productivity acceleration?

• 1:19:47Speaker 04

  That is honestly this hoped for in Washington and in the halls of government around the world as a ways to overcome the profit it's spending that we're currently engaged in. Like, the world, the world needs a savior. And the hope is that AI is the savior that we need for productivity. And the challenge with this is it is it may or may not be. We just don't know yet. Now, there's a tremendous amount of hype around AI. And in some sense, the large AI companies need to create that hype to raise the tens or actually hundreds of billions of dollars. You hear that, Tyler?

• 1:20:32Speaker 04

  That are going to the field. Coop. You wouldn't be able to raise hundreds of billions of dollars. We'll spend, and Larry can probably correct me on this, but roughly $600 billion this year in CapEx for data centers in the United States.

• 1:20:45Speaker 05

  I think it'd be larger.

• 1:20:46Speaker 04

  But does that mean that it's getting hyped up too much? Or it's just the hype is required as a, as a sales mechanism?

• 1:20:53Speaker 05

  Go ahead.

• 1:20:55Jordi Hays?

  Larry's backing you up, Tyler. All right, let's play the next video, which was the one I was originally talking about, which is talking about job, job loss.

• 1:21:06Speaker 04

  What AI has done is it has re-empowered the head of technology in every business in the United States. And it has pushed budgetary resources into the hands of, of the chief technology officer. So what you're seeing across American business is actually the impact of American businesses spending more on digitization writ large, of which AI is just one component.

• 1:21:38Speaker 04

  It's one component, but it's the, in some sense, it's the cover story that creates the space for American companies to really embrace technology in a much more profound way. I was in, I was in China about a year and a half ago with a group of prominent global executives. And they were all talking about how AI was changing their business. It was so fun. And I said, let's go around the table. And let's each share a story as to how we're using AI to make our business better. I heard five or six great stories. Not one involved generative AI.

• 1:22:16Speaker 06

  But does that mean that the productivity boost from generative AI is still coming? Bro, you're telling me a big company's inefficient in a clutching technology? Are you in a camp that, you know, as Dario Amadei says, you know, half of all entry level white collar jobs will, you know, be gone in the next five years? Is it that kind of change or is it more incredible?

• 1:22:36Speaker 04

  Look, you know, put yourself in his shoes. How much money does the AI community need to raise over the next five years?

• 1:22:40John Coogan?

  So he's wrong about this, right? Demis doesn't need to raise.

• 1:22:42Speaker 04

  Data centers in the United States this year, over half a trillion dollars.

• 1:22:45John Coogan?

  Google's doing this with cash flow.

• 1:22:46Speaker 04

  Over $500 billion.

• 1:22:48John Coogan?

  Like, that's true for every other lab lead except for Demis. Like, you would expect Demis to be like, no.

• 1:22:54Speaker 04

  Unless you're gonna make a promise, you're gonna profoundly change the world.

• 1:22:56Speaker 06

  Yeah, but the question was about Dario.

• 1:22:57John Coogan?

  Oh, Dario, okay.

• 1:22:58Speaker 06

  So is it hype?

• 1:22:59John Coogan?

  Yes.

• 1:23:00Speaker 04

  Of course. AI will not profoundly change the world. How else are you gonna get people to write $500 billion of checks? Just this year alone, right? There needs to be a level of, like, AI is your savior almost. And the question is, where will AI land in productivity gains at the end of the day? In certain areas, we know it's gonna be profound, whether it's call centers, whether it's helping to improve the productivity of software engineers. But in a number of white collar jobs, you know, there was a recent Harvard paper on this. They called it AI work slop. That it looks good, but if you sort of peel back the onion, the substance isn't there. I was with one of my colleagues who runs our commodities business and they, he handed

• 1:23:45Speaker 04

  a report on that we were generated with an AI engine. Doesn't matter what the topic was, the first few sentences like, wow, that's, that's really insightful. And then you go down below that and it's all garbage.

• 1:23:57Speaker 06

  So that's going to, and we are, we are running out of time, but that suggests that AI is not going to come to the rescue to make up for the various negatives that we discussed about in the first part of this conversation. So in 10 seconds.

• 1:24:08Speaker 04

  So, but remember, the spending on technology writ large is having a clear, positive impact on the economy.

• 1:24:18Speaker 06

  So which economy in the world benefits most from this conflagration of geopolitics, economic policy and technology change?

• 1:24:25Speaker 04

  I mean, who benefits the most? That's a really interesting way to put it.

• 1:24:32Speaker 06

  In 10 seconds.

• 1:24:34Speaker 04

  In 10 seconds. You know, when it's all said and done, it's somewhat ironic, but it's, it's the United States and China are the two big beneficiaries of this moment.

• 1:24:47Jordi Hays?

  Yeah, so, so one thing, like my, the way that I like process this is as somebody who, who's not indexed to AI scaling and AI progress, but a lot of the most talented people he's ever worked with have ended up working in AI, right? They've gone from the East Coast and gone and, and over to the West Coast and started working at the labs. And so while he's not, you know, working in a lab, I do feel like, you know, his, his, and you can argue like he's not AGI pilled, he, he clearly is not processing models, developing like. More advanced like reasoning and agency and all these things that are gonna

• 1:25:32John Coogan?

  We could be here next year and he could be like, oh, like I got a, I got a report from a commodities trader. It was AI generated. It was amazing. Like that's happening in so many other fields where people have said, oh, like I'll always be able to clock generative imagery. And then they look at the latest Nano Banana Pro output and they're like, yeah, okay, actually I can't. I have updated. That, that certainly happens. Um, the, the interesting thing about his, so I, I, I like his, I like the point about the incentives of lab leads to, uh, make grand proclamations about progress in order to underwrite larger financing rounds. That's clearly true. That's, that's clearly something that does happen.

• 1:26:12John Coogan?

  But explain Demis sounding exactly like Dario in terms of timelines and, and impact. Like a lot of their rhetoric is very, very similar and, and Demis is in a position to just say, oh yeah, like we're going a lot slower because we're doing this off of cash flow. And like, we don't need to raise and it's going to be longer. Like that actually might be to his benefit to sort of like pour cold water on all the competition that's out there trying to raise all this money. If he comes out and says, yeah, like you don't, you don't need to lever up and, and build a trillion dollars worth of data centers because progress isn't going to be that fast. Um, that would be probably beneficial to Google maybe. I don't know.

• 1:26:55John Coogan?

  But it, it certainly doesn't seem like he has to message that. I mean, maybe to the Google shareholders somewhat, but not really. It's not really showing up in Google's financials yet. It's not really changing.

• 1:27:05Jordi Hays?

  Well, Demis might wait until Anthropic and OpenAI get their S1s out and then decide, all right, it's time.

• 1:27:11John Coogan?

  Now, now, now.

• 1:27:12Jordi Hays?

  It's actually over.

• 1:27:13John Coogan?

  What, what, what do you think about that as, as a counterpoint to Ken Griffin's, uh, you know, CEO of So the Dell, he's saying that, uh, all of the AI hype is about fundraising for these labs.

• 1:27:27John Coogan?

  Demis doesn't count there, right?

• 1:27:30Speaker 03

  Yeah, I mean, doesn't he still have to like convince, you know, Sundar?

• 1:27:35John Coogan?

  Yeah, and the internal markets.

• 1:27:37Speaker 03

  Yeah.

• 1:27:38John Coogan?

  Yeah, and the shareholders.

• 1:27:38Speaker 03

  But I think that's probably true, but I still, it's like, you know, he had the example of like, oh, he talked to business leaders and how are you improving your company with AI? And none of the examples were AI. Like, those are, you just know those are like, it's from some consulting firm that gave them the model that was like three years ago.

• 1:27:52John Coogan?

  Yeah.

• 1:27:53Speaker 03

  Like I.

• 1:27:53John Coogan?

  They need some, they need some younger people at these companies that would be using.

• 1:27:57Speaker 03

  Yeah.

• 1:27:58John Coogan?

  General AI in transformative ways as opposed to, uh, yeah, I mean, it, it, it feels like those two things cannot be true. You cannot have a sclerotic, uh, you know, large business that is failing to take advantage of AI and simultaneously not be hiring young people who are more AI native. It feels like you, you have to, you have to, you know, embrace one or the other, like either.

• 1:28:25Speaker 03

  Yeah, and he's discounting like any concept of progress, right? Like, he's like, oh, you, when you read something, it's like total slop now. That's exactly how code, how code was like two years ago.

• 1:28:34John Coogan?

  Yeah.

• 1:28:34Speaker 03

  Now, there's software agents that can.

• 1:28:36John Coogan?

  Yeah.

• 1:28:37Speaker 03

  You know, pretty autonomously build entire systems.

• 1:28:39John Coogan?

  Yeah, yeah, yeah.

• 1:28:39Speaker 03

  That's, that's certainly like not unlikely to happen in, in just general writing.

• 1:28:44John Coogan?

  Yeah, yeah. Ken Griffin needs to vibe code a mobile game or something.

• 1:28:48Jordi Hays?

  Yeah, I think, I think calling, calling out that saying like labor replacement theories and pitches.

• 1:28:55John Coogan?

  Sure.

• 1:28:55Jordi Hays?

  Are like catnip for venture capitalists. They're doing white collar work. And if they get the pitch that, you know, some technology is going to, like, if you go to, if you went to a VC and you gave a really compelling pitch of how your product is going to replace all VCs in the world. And it actually made some sense and you could kind of imagine how it'd play out. I'm sure you'd get a lot of investor interest in something like that, right? Cause you're just trying to hedge, right? So it is, it is like the most compelling.

• 1:29:25John Coogan?

  Narrative.

• 1:29:26Jordi Hays?

  Narrative.

• 1:29:26John Coogan?

  Yeah. fin.ai, the number one AI agent for customer service. If you want AI to handle your customer support, go to fin.ai. Let's click over to Jamie Dimon at the World Economic Forum in Davos. He's talking about raising taxes and special interest groups and the audience.

• 1:29:45Speaker 07

  That makes society work better for everybody.

• 1:29:48Speaker 06

  Would you raise taxes to pay for that?

• 1:29:49Speaker 07

  I don't think you'd have to. I think it would drive a lot of growth. I think I did the numbers at one point, it'd be $60 billion of spending. I think it would probably create more than that of growth and taxes. And if you have to raise taxes a little bit, that's fine. But again, I don't want to have to buy any argument. I don't know anyone, okay? And you guys in the room, you might be Democrats, Republicans, who thinks the spending that sending another trillion dollars to Washington DC will actually improve anything. So when you say raise taxes, if you said raise taxes and directly give it to the people who need it, do it.

• 1:30:23John Coogan?

  Of course.

• 1:30:24Speaker 07

  No? But this is not what happens.

• 1:30:26Speaker 06

  We are running out of time.

• 1:30:27Speaker 07

  It goes to all these interest groups, you know, and they give it to their friends and all that, which is why the people are considered a swamp. It's kind of a swamp. There's 17,000 lobbying groups. Companies are guilty too. They're just fighting for their one self-interest as opposed to what's good for my country. But that's what happens in Congress, you know? And you see how these bills get spent, like the chip sack was a good idea until, you know, it had to be unions, place pays, childcare, diapers, you know? What the hell are we doing? And we do it over and over. That's my president. And then it fails. We spend more money because we probably just spend enough.

• 1:31:04John Coogan?

  Yeah, Jamie Dimon is great. Let me tell you about Sentry. Sentry shows developers what's broken and helps them fix it fast. That's why 150,000 organizations use it to keep their apps working. Demis, we've been talking about him and his blockbuster performance at Davos. He had a number of interviews, this one with Emily Chang, talking about a pause on AI and whether or not he supports it. A very revealing quote, very, you know, says a lot about his timelines and his, he's P doom in some ways. Let's watch this clip from Emily Chang interviewing Demis.

• 1:31:44Speaker 08

  Some folks have advocated for a pause to give regulation time to catch up, to give society time to sort of adjust to some of these changes. In a perfect world, if you knew that... Every other company would pause, if every country would pause, would you advocate for that?

• 1:31:59Speaker 09

  I think so. I mean, I've been on record saying what I'd like to see happen, it was always my dream of the kind of the roadmap, at least I had when I started out DeepMind 15 years ago and started working on AI, you know, 25 years ago now, was that as we got close to this moment, this threshold moment of AGI arriving, we would maybe collaborate, you know, in a scientific way. I sometimes talk about setting up an international CERN equivalent for AI, where all the best minds in the world would collaborate together and do the final steps in a very rigorous scientific way, involving all of society, maybe philosophers

• 1:32:39Speaker 09

  and social scientists and economists, as well as technologists, to kind of figure out what we want from this technology and how to utilize it in a way that benefits all of humanity. And I think that's what's at stake. Unfortunately, it kind of needs international collaboration though, because even if one company or even one nation or even the West decided to do that, it has no use unless the whole world agrees, at least on some kind of minimum standards. And, you know, international cooperation's a little bit tricky at the moment, so that's going to have to change if we want to have that kind of rigorous scientific approach to the final steps to AGI.

• 1:33:21Jordi Hays?

  Pod-friendly guy in the YouTube chat says, "Damas is the Steve Jobs of AI."

• 1:33:26John Coogan?

  You're wearing the TVP and turtleneck today. Maybe we need to make a turtleneck and award it to the who we crown the Steve Jobs of AI. No, he's a fantastic communicator. Demis is inspiring, balanced, measured, knowledgeable, just not, he's not completely accelerationist at all costs, but also not completely doomerist. I don't know. It's a really, it's a really great take. I don't know. What do you think, Tyler?

• 1:33:51Speaker 03

  Yeah, I think there's maybe an interesting way to look at this, like the question of pausing, where if, so if you take, Dario says that He's not competing with with DeepMind or OpenAI, right? Because he's an enterprise, they're a consumer.

• 1:34:04John Coogan?

  Yeah. Wait, wait. Who? Sorry, sorry. Clarify who who's who there?

• 1:34:08Speaker 03

  So Dario.

• 1:34:08John Coogan?

  Dario at Anthropic.

• 1:34:09Speaker 03

  Anthropic is enterprise.

• 1:34:10John Coogan?

  Is saying, we're not competing with DeepMind because that's a consumer company? Is that what he's saying?

• 1:34:14Speaker 03

  Yeah, and OpenAI. That's what he said yesterday. Like, broadly, he was like, we don't have to monetize billion users, whatever.

• 1:34:19John Coogan?

  He's like, just ignore those companies and their enterprise businesses. They don't matter. Okay.

• 1:34:23Speaker 03

  Yeah, but so if you take that and then, so that means, you know, there's some way in which, you know, DeepMind's real only competitor is OpenAI. If, you know, we were just talking about how DeepMind doesn't have to raise money, right? They're in front of my cash flow. So basically, there's a way to look at it where you can either pause for for safety reasons, so we can catch up with regulation or whatever. Or it's just because if we basically pause all AI, it's actually fine for Anthropic, right? Because they're they don't have a like, super direct competitor, right? OpenAI is trying to get more into enterprise. Maybe DeepMind is as well, too, but like, they have a fairly strong position, perhaps.

• 1:34:59John Coogan?

  Yeah.

• 1:34:59Speaker 03

  And then it's going to hurt OpenAI a lot, right? Because they need to raise a lot of money to compete with DeepMind.

• 1:35:03John Coogan?

  Yeah.

• 1:35:04Speaker 03

  So if you can basically make this like, almost cartel-looking, you know, like, thing, group with Anthropic and DeepMind, you can basically try to take out OpenAI.

• 1:35:14John Coogan?

  Oh, interesting.

• 1:35:16Speaker 03

  I mean, that's a very cynical way to look at it.

• 1:35:18John Coogan?

  Yeah, yeah, yeah, yeah, yeah. I hear you. The other the other interesting thing is that he says, he says, he would, he would like, maybe potentially support a pause, but then what he describes is not, oh, all the researchers just focus on productization of the current models. Like, stop training, stop doing reinforcement learning, stop optimizing models, and instead, like, let's build more great SaaS. Like, that's not what he's saying. He's saying, like, let's all still do research.

• 1:35:45Jordi Hays?

  We need to pause AI progress to focus on ads and AI progress.

• 1:35:49John Coogan?

  That would fire me up, but that's not what he's saying. What he's saying is, like, get all the research together in in CERN. And CERN is not pausing scientific research. Like, if anything, CERN is a way to accelerate AI research, but in a collaborative way. So he's really just calling for more collaboration and a pause on competition or a pause. And, I mean, I feel like everyone. In the scientific community, in the in the research community, definitely laments the the days of yore where there were more open research papers, more sharing of knowledge. It wasn't all constantly just backdooring through hiring and poaching. Some of it was just open. You could just download the transformer paper.

• 1:36:28Speaker 03

  Yeah, so but but even in that case, like, DeepMind is still like, you know, on the defensive, right? Because OpenAI is trying to take, like, Google is like, oh, search is dying, right? OpenAI is trying to take it away. If you can basically get everyone to be like, oh, we're gonna, you know, collaborate, everyone's gonna share the research. That's that's probably better for.

• 1:36:45John Coogan?

  So, so, yeah, so game theoretically.

• 1:36:47Speaker 03

  Yeah.

• 1:36:48John Coogan?

  Yeah, so you would never expect the leader to say, hey, let's pause the race.

• 1:36:52Speaker 03

  You wouldn't expect OpenAI to pause the race because they're the ones who have so much more to gain from like attacking the other.

• 1:36:57John Coogan?

  Just continuing, pushing further, yeah.

• 1:37:00Speaker 03

  Yeah.

• 1:37:00John Coogan?

  Okay, I mean, depends on what you mean by pause. Because I I feel like if there was like a a model freeze and you only have Opus four, five, GPT five point two, Gemini three pro. You have those models like OpenAI could still compound on the on the DAU front, right?

• 1:37:21Speaker 03

  Yeah, I mean, yeah, there's a bunch of ways it could like actually go down, but there's like different ways to look at it, I think.

• 1:37:25John Coogan?

  Yeah.

• 1:37:26Speaker 03

  Rather than just like pure safety.

• 1:37:27John Coogan?

  Yeah, there's some extra context here from Andrew Curran, he says, Dario said the same thing during the day after AGI discussion this morning. They were both asked for their timelines, Demis had five years, Dario said two. Later in the discussion, Dario said that if he had the option to slow things down, he would because it would give us more time to absorb all the changes. He said that if Anthropic and DeepMind were the only two groups in the race, he would meet with Demis right now and agree to slow down. But there is no cooperation or coordination between all the different groups involved, so no one can agree on anything. And it's very funny thinking about this CERN like bring all the researchers together in the context of like the craziness at OpenAI.

• 1:38:09John Coogan?

  The craziness, the thinking machines, all the interpersonal aspects, the human element of of AI progress. That that, you know, you get everyone in, it's like, okay, we need to pick a leader, like, okay, who's in charge? Who decides what? Like, how do do these all do all these people get along? Because some of them have some pretty crazy bad blood. He's like, hey, you kicked me out of this lab and then you quit when I thought you were going to be my co-founder and then you were having this relationship with this person. Like, creating harmony in the barnyard might not be the easiest thing.

• 1:38:38Jordi Hays?

  Interesting point from Deepak in the chat. No OpenAI at Davos, question mark.

• 1:38:43John Coogan?

  There is. So I believe Sarah Fryer did an interview there. The interviews are on like a delay. A lot of them happen at 10:00 PM Davos time. Also, the first day of the conference was yesterday, so we will be getting more Davos content today. I did feel that, though. But a lot of it's just about when different segments happened. So, I mean, amazing move by Dario and Demis to come out with, you know, absolute heater on day one, very early, establish some ground games, some ball control. Because Satya Nadella is there. He's going on the All In Podcast and he's already given quotes and there's some clips from him. But we haven't seen him. He hasn't been aura farming. Microsoft hasn't been aura

• 1:39:28John Coogan?

  farming Davos as effectively as Google and Anthropic. So, you know, little bit of tail of the tape there.

• 1:39:35Jordi Hays?

  Well, let's skip ahead.

• 1:39:36John Coogan?

  To 11 Labs. Build intelligent, real-time conversational agents. Reimagine human technology interaction with 11 Labs. And I believe the CEO of 11 Labs is there at Davos. But what do you want to move on to?

• 1:39:48Jordi Hays?

  This is, I mean, this was the, probably the story that got reported on the least out of Davos over the last 24 hours, but is arguably the most important. The most expensive car in the world. Everyone wants to know, of course, it is the car that Jensen bought his parents. So let's pull up this clip.

• 1:40:07John Coogan?

  I love it. This is great.

• 1:40:09Speaker 10

  Congratulations on that journey. And I know we have many more years of that journey ahead of us. Thank you. I appreciate that. My only regret was at the IPO, after the IPO, I wanted to buy my parents something nice. And so I sold Nvidia stock at a valuation of $300 million. The company was at a valuation of $300 million and I bought them a Mercedes S-Class. It is the most expensive car in the world.

• 1:40:41John Coogan?

  Yeah.

• 1:40:42Speaker 10

  They regret it. Do they still have it? Oh, sure. Yeah, they still have it. You've got Jensen, congratulations on that journey.

• 1:40:49John Coogan?

  Yeah, what is, uh, five?

• 1:40:51Jordi Hays?

  So it's currently a four and a half trillion dollar.

• 1:40:53John Coogan?

  Four and a half.

• 1:40:54Jordi Hays?

  And an S class when.

• 1:40:57John Coogan?

  Trillion.

• 1:40:58Jordi Hays?

  Uh, they went public in nineteen ninety nine.

• 1:41:02John Coogan?

  So.

• 1:41:03Jordi Hays?

  At S.

• 1:41:04John Coogan?

  So what was S class cost like sixty K something back then? I don't know. Eighty K?

• 1:41:08Jordi Hays?

  How much? What did?

• 1:41:10John Coogan?

  I mean, you're talking about a.

• 1:41:14John Coogan?

  Maybe a billion dollar car? I don't know if I have the math right there, but it seems like.

• 1:41:19Jordi Hays?

  Yeah, around sixty five K.

• 1:41:20John Coogan?

  It seems like the stock might be up fifteen thousand X. There's something, I don't know. I mean, it's definitely up a thousand X, right? Cause it's, uh, yeah, three hundred million, three hundred billion. And then you get another zero, so ten thousand X. Wow, that is brutal.

• 1:41:36Jordi Hays?

  Brutal.

• 1:41:37John Coogan?

  Brutal, worse than the TV I bought with a Bitcoin.

• 1:41:39Jordi Hays?

  Hey, worth it.

• 1:41:39John Coogan?

  I bought, I, I, I bought a TV with a Bitcoin. Terrible. Not even four K. Things in the trash now. It was like, it was like a thousand dollars back then. It was ridiculous. Anyway, Cisco, the Davos of Cisco. Cisco AI Summit, it's February third. It brings together leaders from Nvidia, OpenAI, AWS and more to discuss the future of the AI economy. The whole thing will be live streamed and will be there for a gigastream. Mark your calendars, February third, Cisco AI Summit.

• 1:42:09Jordi Hays?

  Hope to see, uh, many of you there. We're very excited.

• 1:42:12John Coogan?

  President Trump had some comments in Davos. Alex Heath broke the story, took it to the timeline. Uh, Alex Heath says, uh, a quote from Trump. Mark Zuckerberg showed me a plant where he put it over map the size of Manhattan. Miles long, miles wide. It literally covered most of the island of Manhattan. It's called a big plant. I think he's talking about a data center, but I like that he's calling a plant. That is a big plant, a power plant, essentially. A plant of things. Um, and, uh, President Trump also said that the stock market dip is peanuts, that the stock market is going to be doubled.

• 1:42:54John Coogan?

  And, uh, and, uh, boring business quotes it and says, the, the president is literally telling you that the stock market will double from here and you are buried. It's a crazy, crazy line. What else did Trump say here? He said, "Our stock market tip is peanuts. The Dow is going to hit 50,000 and double to 100,000 in a relatively short period of time." Anyway, let me tell you about AppLovin, profitable advertising made easy with axon.ai. Get access to over 1 billion daily active users and grow your business today.

• 1:43:23Jordi Hays?

  Someone should try to follow up and figure out, ask the president, "Are you giving financial advice?"

• 1:43:28John Coogan?

  Yeah. And what's driving it? Are multiples going to double? Or is our earnings going to double? Or are we going to see a little bit of earnings growth and then a little bit of multiple expansion? What's driving the valuation increase? I'd love to know that. Let's get to the bottom of it.

• 1:43:45Jordi Hays?

  Semaphore made a print newspaper for Davos.

• 1:43:49John Coogan?

  I mean, first, we need to confirm that Philip Johnston, the founder of Star Cloud, former guest on the show, he is there at Davos. He's dropping takeaways. He's asking questions. He was the only person that got to ask Demis a question, right? That's crazy.

• 1:44:08Jordi Hays?

  I mean, makes you ask some questions.

• 1:44:09John Coogan?

  It does. It does. Yeah, yeah. I mean, what a run from Philip Johnston. But it's been fun seeing like the on-the-ground. Obviously, there's a lot of polished clips that are going out from the media organizations, but he's doing citizen journalism over there. And we thank him for his service, bringing clips to the timeline, saying that Jensen Huang announced that we need more energy. And also, he broke the story, at least to me, that Jensen's parents own the most expensive Mercedes in the world. I wonder if they still have it. Anyway, let's go to Semaphore first. Let me tell you about Gemini 3 Pro, Google's most intelligent model yet. State-of-the-art reasoning, next-level vibe coding, and deep multimodal understanding. I like that sound cue. It's a good one.

• 1:44:52Jordi Hays?

  It's the best.

• 1:44:53John Coogan?

  Anyway, Reid over at Semaphore says, "It's fun to work for a print newspaper again, although I missed the print deadline for some changes, which brought back some fond Wall Street Journal memories and traumas."

• 1:45:05Jordi Hays?

  We really missed our window to do the TBPN print newspaper. Somebody... Somebody sent us a fully built out TVP and print newspaper. It looked absolutely fantastic last year. We wanted to roll out at least a weekly, maybe daily print newsletter, but couldn't get around to it.

• 1:45:22John Coogan?

  This is a very interesting lead, too. I can't find this actual article. I'll have to find a digital version of this, but he says, "Techies Ignore the Geopolitics on Their Davos Home Turf." Quote, "This reminds me of Burning Man, but not how you think." I'm like just zooming in to try and read this. AI has finally been eclipsed by geopolitics at Davos. There are essentially two conferences happening. One involves Greenland, Venezuela, and the rewriting of the world order, and the other is really just a tech conference centered around selling and deal making. That's the one I want to go to. Yeah, we were texting with a journalist who is writing a story about tech's involvement in Davos. And my point was like, it does feel like Davos is coming back and the tech companies are there.

• 1:46:06John Coogan?

  Although, from the outside, I think a lot of people think of Davos purely as a meeting of world leaders and geopolitical, and they're following the Greenland story, and they're very much looking at the front page of the Wall Street Journal. But if you go to the front page of X and the timeline, it's all Demis and Dario clips, and Ken Griffin, and a few others. But mostly, like, the stuff that I've been seeing has been focused very much so on tech. But there is a whole different story going on all around Greenland and whatnot. But we got to talk about AI timelines. It's more interesting to me. I'm just so excited.

• 1:46:40Jordi Hays?

  Should we talk about why Elon is racing to take SpaceX public?

• 1:46:44John Coogan?

  Absolutely, absolutely. But first, speaking of public, public.com. Investing for those who take it seriously. They got stocks, options, bonds, crypto, treasuries, and more with great customer service. So, why is Elon racing to take SpaceX public?

• 1:47:01Jordi Hays?

  Putting data centers in space pushed the bean air toward an IPO, sources say, according to the Wall Street Journal. SpaceX resisted going public for years, then came the rise of artificial intelligence. Elon's rocket maker became one of the country's most valuable private companies, due in part to its ability to develop risky space businesses outside the scrutiny of public investors. Its executives like to say the company wouldn't IPO until its rockets were regularly flying to Mars. That was before the rush to build data centers for AI computing prompted Musk, Jeff Bezos, and others to propose putting them in space. The idea is prompted Skepticism for many engineers, given the technical challenges poised by building solar-powered AI data centers that zip around the earth.

• 1:47:44Jordi Hays?

  But it has continued to gain traction and Musk has become obsessed with the idea of SpaceX being the first to do it. Such a feat would be hard to attempt without billions of dollars in capital, and IPO could deliver in one fell swoop. The billionaire, uh, it's so funny to just refer to Elon as like, just a billionaire. The billionaire also sees a SpaceX IPO.

• 1:48:03John Coogan?

  Issue correction in like two months.

• 1:48:05Jordi Hays?

  Yeah, two months, one season. Trillionaire.

• 1:48:08John Coogan?

  Teen air.

• 1:48:09Jordi Hays?

  Teen air. Teen air is the new, I'm excited to be throwing that around. Sees a SpaceX IPO as a way to help his AI company XAI catch up to rivals. Musk has a long-running rivalry with OpenAI. CEO Sam Altman, who last year explored buying a rocket company to deploy satellites with AI computing capabilities into space. Two of XAI's competitors, OpenAI and Anthropic, are eyeing their own IPOs this year, and Musk seems eager for SpaceX to hit the public market first. SpaceX is expected to select banks to lead the stock offering soon. Musk has told people he wants to complete the IPO by July. He wants to get it done so he can have a nice summer.

• 1:48:48John Coogan?

  Philip Johnson needs to SPAC StarCloud, like, today. If he SPACs it, it's going to 20 billion, like, overnight. Like, it's gonna be the biggest meme stock. Anytime that there's a, that there's a, like, a public SPAC'd comp to an Elon company that's, like, private, it's just like, everyone wants it because they want the, they're like, well, if the Elon thing works, like, this one will take 2% of the market, so it maths out. Certainly be able to raise a lot of money.

• 1:49:18Jordi Hays?

  Musk's apparent change of tune on SpaceX IPO plans in the middle of last year surprised many. The bean air, soon to be teen air, has loudly complained about running his existing public company Tesla and is repeatedly tangled with regulators and the courts over issues like his compensation.

• 1:49:31John Coogan?

  Everyone thought, like, Elon ran the biggest A/B test on what it's like to run a large-cap company in the public markets and the private markets. He had a terrible experience in the public markets with Tesla, getting sued and dealing with all that, dealing with complicated comp packages. And so it felt like he would definitely prefer to be private all the time. He wanted to take Tesla private, remember?

• 1:49:54Jordi Hays?

  Funding secured.

• 1:49:55John Coogan?

  Funding secured. He's never been a fan of the public markets, but he has changed his tune. So.

• 1:50:02Jordi Hays?

  Anyways, building and launching thousands of satellites would be technically demanding. Costly and SpaceX officials quickly decided the easiest way to raise the tens of billions of dollars it required was to dip into the newly thawed US market for IPOs. Meanwhile, XAI was trailing rivals, including OpenAI and Google Gemini by key metrics such as revenue and user base. A SpaceX IPO was seen by some of its investors as a potential cash cow that could supercharge XAI's growth and in turn help SpaceX. If SpaceX succeeds with putting data centers in space, its investors expect XAI to become a customer. Some investors believe SpaceX could purchase a percentage of XAI or Musk, who owns more than 40% of SpaceX, could tap that stake to invest in his other companies, including XAI.

• 1:50:47Jordi Hays?

  Plus, a publicly traded stock creates a capital safety net of sorts and would be reassuring to investors.

• 1:50:54Jordi Hays?

  So anyways.

• 1:50:55John Coogan?

  The two companies have existing ties. SpaceX has invested $2 billion in XAI as part of $5 billion financing and then XAI raised a bunch more money. So, very exciting. Anyway, CrowdStrike, your business is AI, their business is securing you. CrowdStrike secures AI and stops breaches. And we have our first guest in the TVP LPL, Jens Riemek, the founder and CEO of California Forever. Good to have you on the show again. Welcome back. How are you doing? Sorry, let me get my diacryl out of the way.

• 1:51:29Speaker 11

  I'm great.

• 1:51:30John Coogan?

  How are you? How's the new year going? How was your break? How were the holidays?

• 1:51:34Speaker 11

  We have three young kids, under four, and we dragged them nine hours. We dragged them nine hours to see my mom and dad in the Czech Republic. Nine hours time difference there and then nine hours back. So you can imagine how my Christmas was.

• 1:51:47Jordi Hays?

  More like a day of travel with young children is more stressful in many ways than 99% of workdays.

• 1:51:58John Coogan?

  I went to Europe over the break. I went to Austria, but didn't bring the kids. So it was very relaxing.

• 1:52:04Speaker 11

  That's a big difference. My new pet peeve is. Single people or couples on airplanes who complaining about the long flight. I'm like, really?

• 1:52:11John Coogan?

  Oh, sure.

• 1:52:11Speaker 11

  You had to sit there for twelve hours and drink wine and watch Netflix. That was terrible.

• 1:52:15Jordi Hays?

  Well, I I used to think when a when a kid was crying, it meant the parent was doing something bad. So as you know, I'd be on a flight and the kid's crying. And I'm like, wow, this parent is just like being abusive or whatever. Why is it? Why is it? Why is the kid so upset?

• 1:52:28John Coogan?

  Yeah.

• 1:52:29Jordi Hays?

  Turns out, kids will just cry.

• 1:52:30John Coogan?

  For all sorts of reasons.

• 1:52:31Jordi Hays?

  A million reasons.

• 1:52:32John Coogan?

  Yeah. Uh, anyway, give you give us the update. Uh, how are things going? Uh, just sort of reset for us on the project. How long have you been working in California forever? Where are you in the process?

• 1:52:43Speaker 11

  Uh, I've been working on this for almost a decade.

• 1:52:46John Coogan?

  Almost a decade.

• 1:52:46Speaker 11

  Almost a decade. So

• 1:52:49Speaker 11

  twenty sixteen, started in twenty seventeen.

• 1:52:51John Coogan?

  Okay.

• 1:52:51Speaker 11

  Um, it was about seven years of land assembly, and then we introduced it publicly in about two years ago.

• 1:52:57John Coogan?

  Um, were you full time back in twenty seventeen?

• 1:53:00Speaker 11

  Yeah, I was full time. I was the, um, I was the only employee for seven and a half years.

• 1:53:06John Coogan?

  Okay.

• 1:53:06Speaker 11

  And obviously confidentiality was very important for us. And so the mandis, when I say I was the only employee, I mean, I did everything. We raised a billion dollars in the period. And I did everything from bookkeeping to being everything else in the company. I literally did.

• 1:53:18Jordi Hays?

  And the confidentiality, was that in part because if people knew what you were doing, they would come in and start trying to bid against you on land stuff?

• 1:53:25John Coogan?

  Yeah, because it's like, he needs this plot, so he's willing to pay more. And that is the game theory.

• 1:53:30Speaker 11

  Yeah. And you it's always happens. I mean, even if you have university, if you have public universities buying land in a city to build a building, they don't come in and like, we are MIT, and we would like to buy this plot of land. You have some kind of companies. That was why.

• 1:53:42John Coogan?

  So what was the what was the structure of that fundraising? Because you probably had to draw a salary. Is it like a search fund where a venture capitalist might raise some money, pull some management fees to fund their salary and operational overhead? And then like, when there's a deal to be done, there's a capital, uh, there's a capital commitment that happens, a transfer. Is that what it's like?

• 1:54:04Speaker 11

  We structured it as a partnership that raised money over time.

• 1:54:07John Coogan?

  Okay.

• 1:54:07Speaker 11

  At different valuations, as we made progress.

• 1:54:09John Coogan?

  Okay.

• 1:54:10Speaker 11

  And then I just took salary like any other founder. It was it was pretty similar to a normal, normal tech company. There's some nuance because it's real estate and because of the just the sheer amount of capital that we needed and how long it took to do it. But other than that, pretty, pretty standard.

• 1:54:23John Coogan?

  Yeah. And what was the what was the first pitch? What was the first plot of land that you bought? What was that negotiation like?

• 1:54:31Speaker 11

  Well, the first few are, um, the first few are listed. So when we came to the market, uh, there, there were four or five properties that had just been listed and sitting on the market for two years or something.

• 1:54:41John Coogan?

  Was there anyone else thinking about doing anything in this particular region?

• 1:54:46Speaker 11

  I don't know of anyone else. I mean, not right now, but the, the, the great irony of the situation is, um, lots of people thought this was a really good idea in 1958.

• 1:54:56John Coogan?

  Oh, yeah.

• 1:54:57Speaker 11

  Seriously.

• 1:54:58John Coogan?

  Yeah, yeah, yeah.

• 1:54:58Speaker 11

  There, there, there, there is this, there is in 1958, the Federal Commerce Department and the Army Corps of Engineers go together. This is before, almost before computers.

• 1:55:09John Coogan?

  Yeah.

• 1:55:10Speaker 11

  And they, they, they wrote this thick binder. They called it the future development of the San Francisco Bay Area, 1958 through 2020. And decade by decade, they planned where growth should go in the Bay Area.

• 1:55:21John Coogan?

  Yeah.

• 1:55:22Speaker 11

  And, um, you open these maps and they did it decade by decade. And you look at the first one and Santa Clara is still on orchards and, and so on. Then they correctly predicted this explosion in places like Pleasanton and Dublin in the East Bay in the eighties and in the nineties. But the part of Solano where we're building remained open. And then you flip open the 2010 map and where I thought there should be a city, they had a city.

• 1:55:46John Coogan?

  Hmm. There you go.

• 1:55:48Speaker 11

  And I was sitting there in 2015 and I'm like, okay, maybe this isn't just Jan's insane idea. Maybe some smart people thought about it. And then you look at other regional planning documents in the Bay Area, something called the Association of Bay Area Governments, which is the regional planning body, um, had a plan called 1972, 1970 to 1990. And in the plan, they literally said, by the end of the nineties, we are going to be running out of space in the Bay and we're going to need to build some new cities. Otherwise, the region is going to become unaffordable.

• 1:56:16John Coogan?

  Yeah.

• 1:56:17Speaker 11

  And there are some areas where you could build cities that are really good for it.

• 1:56:20John Coogan?

  Yeah.

• 1:56:21Speaker 11

  The pad of the bay that's the best place to do it, that is five times bigger than anywhere else, is the area of which we've acquired about ninety percent over the last ten years.

• 1:56:29John Coogan?

  Yeah.

• 1:56:30Speaker 11

  This is a very old idea that we've dusted off and, and obviously we're building something different that they would have built there in the fifties.

• 1:56:37John Coogan?

  Yeah.

• 1:56:37Speaker 11

  Um, but lots of roots in regional planning.

• 1:56:39John Coogan?

  So in terms of development, it's, it feels like, you know, AI has been the, the mega trend over the last few years. Most of the building that's happening around AI is happening in Abilene, Texas, and just wherever the natural gas plant lines are and sort of all over America in pretty low population areas. No one's really thinking that, oh, you know, Meta needs a data center right next to Men, their Menlo Park campus. But the AI mega trend also might drive up housing prices in San Francisco a ton. A lot of people are predicting this based on the IPO schedule. If OpenAI, Anthropic get out, there's a trillion plus in liquidity going loosely into the San Francisco housing market. Uh, you could

• 1:57:23John Coogan?

  see some really crazy dislocations in that market. I, I, is that, is that something you're tracking as a, an accelerant of your plans?

• 1:57:33Speaker 11

  Yeah, hundred percent.

• 1:57:33John Coogan?

  Okay.

• 1:57:34Speaker 11

  And I think it's, and I think it's, it's honestly, it's more from the policy perspective. Because the, the last time, I mean, this has happened in the Bay Area periodically for the last twenty years. The problem is we haven't done anything about it in fifty years. And every time it gets worse and then there's a bit of a pullback and like, oh, it's gonna be better. And then it just comes back stronger than before, right? And dot com boom, then social, crypto, now AI. Um, and so from a policy perspective, the argument that we've made is we need to get ahead of this because if we don't, this is gonna be way worse than what we saw in twenty seventeen, twenty eighteen. And when, when it last happened in twenty seventeen, twenty eighteen, um, the problem is tech is gonna get blamed for this. Of course.

• 1:58:16Speaker 11

  It's wrong and it makes no sense because you just create all of these real world paid jobs. But you're gonna get blamed for it or we're gonna get blamed for it. And so we as an industry need to get ahead of it. And you saw attempts at this in 2017 and 2018. In Google and Apple and Facebook and I think Amazon app in Seattle. All made these 500, one billion, two billion dollar commitments to go and build affordable housing. Yeah. But what happened when you look at the numbers is they would maybe build a few hundred units or a few thousand units because building in existing cities is just so time consuming, so expensive. It costs a million dollars to build a small two bed affordable apartment in San Jose. Yeah. A million dollars. That's a lot. And it takes 11 years of planning.

• 1:59:00Jordi Hays?

  Yeah, so affordable housing for millionaires.

• 1:59:04Speaker 11

  Yeah, exactly. Heavily subsidized by the taxpayer.

• 1:59:06Jordi Hays?

  Sure.

• 1:59:06Speaker 11

  Whereas our argument is if you create a place where you can build, you can get the private capital markets to build it. And we are proposing to build 174,000 homes. For context, 174,000 homes is more homes than San Francisco has built since 1950. Since 1950. And sure, we should build a lot more housing in San Francisco. The idea that you can solve the Bay Area housing problem. The trends are the trends. In San Francisco or in Menlo Park is insane. No city in the world has ever solved housing affordability issue without spreading out a little bit. And then the question is, do you spread out just by spreading out with sprawl? Or do you spread out and actually thoughtfully plan it and be able to build something really magic?

• 1:59:51Jordi Hays?

  What is the number of homes that California government has projected or needed to sort of solve the housing crisis?

• 2:00:01Speaker 11

  Three million.

• 2:00:02Jordi Hays?

  Three million?

• 2:00:02Speaker 11

  Yeah.

• 2:00:03Jordi Hays?

  Just in California?

• 2:00:04Speaker 11

  Just in California.

• 2:00:05Jordi Hays?

  Yeah.

• 2:00:05Speaker 11

  And the way that they calculate.

• 2:00:07Jordi Hays?

  And so like, in some ways, you could say like, okay, 174,000, like. It's starting to make a dent.

• 2:00:13Speaker 11

  Yeah.

• 2:00:13John Coogan?

  It was less than 10%.

• 2:00:14Jordi Hays?

  But it shows that you need projects at this scale.

• 2:00:17John Coogan?

  You need 20 of these.

• 2:00:18Jordi Hays?

  To ever solve it, because you're not going to solve this problem by like, oh yeah, there's an empty lot, you know, behind this, this, you know, in this neighborhood, let's put up eight units here, right? It just doesn't, that really doesn't make a dent, right?

• 2:00:29Speaker 11

  Yeah, I mean, I think that's going to be a part of the solution, but you'll need, I think California will need multiple, California forever. Our hope is that by blazing the path and showing how you can, how you can finance it, how you can buy it, how you can work with the community to get the buy-in and to convince people that you actually care about it and you want to do it right and you want to do it well. We make it easier for others to do it. I will say, we do have what I think is by far, it's a very unique site, the idea that you can put together, I mean, we own 70,000 acres at this point. It's 110 square miles. It's two and a half times bigger than San Francisco, it's five times bigger than Manhattan.

• 2:01:06John Coogan?

  Wow.

• 2:01:06Speaker 11

  It's bigger than Washington DC by one and a half times.

• 2:01:10John Coogan?

  Wow.

• 2:01:10Speaker 11

  And so, the idea that you can find that, by the way, I drove from my meeting in downtown San Francisco to the site in 55 minutes the other day. Now, that's not the case depending on how you time it with traffic, but it's pretty close.

• 2:01:22John Coogan?

  Yeah.

• 2:01:22Speaker 11

  So it's going to be hard to do it at this scale, but we certainly should be finding 500 acres at the edge of, or 1,000 acres at the edge of Sacramento and all different parts of LA and so on, and building it at medium density and walkable and some industry and jobs.

• 2:01:39Speaker 11

  But I think in California, it's 3 million units, it's about 2 million in Southern California, it's about a million in Northern California. And so, we come close to solving 20% of it. And that's just one of our projects, that's the expansion of a city called Soosun. We're also looking at doing a second project on lands that we own on the west side, sorry, on the east side of our property, around a city called Rio Vista, that could add tens of thousands of additional units. So we get close to solving 20% of Northern California's deficit.

• 2:02:07John Coogan?

  That's good.

• 2:02:08Speaker 11

  Which is a big deal.

• 2:02:08John Coogan?

  Yeah. Talk to me about the transportation issue. Fifty-five minutes when there's not that much traffic, could be more.

• 2:02:15Jordi Hays?

  As an LA resident, I'm thinking.

• 2:02:17John Coogan?

  Yeah, it's easy.

• 2:02:18Speaker 11

  Exactly.

• 2:02:19Jordi Hays?

  That's my daily, that's my daily commute.

• 2:02:21John Coogan?

  Yeah.

• 2:02:22Jordi Hays?

  So.

• 2:02:23John Coogan?

  But, yeah, what has the Bay Area done recently? I know the, the, the, the, the bridge, the Oakland Bridge was improved, but what's on the table in terms of like toll roads, congestion pricing, building new bridges, adding ferries, like, are there lessons to be learned for Manhattan and how they have solved things? I've seen people be very pro congestion pricing, very anti-congestion pricing all over the place. What's your, what's your vision for, what you would advocate for in terms of modernizing transportation in the Bay Area?

• 2:02:57Speaker 11

  It's a great question. I, I, and there's so many layers to it.

• 2:03:00John Coogan?

  Yeah.

• 2:03:01Speaker 11

  I'll, I'll try to keep it brief.

• 2:03:02John Coogan?

  No.

• 2:03:03Speaker 11

  I'll give a slightly nerdy answer. The first step in any kind of transportation planning is land use planning. Where do you put things and how do you lay them out?

• 2:03:12John Coogan?

  Sure.

• 2:03:13Speaker 11

  To kind of eliminate the need to go that much in the first place.

• 2:03:15John Coogan?

  Okay, sure. So, so, so, yeah, you don't want to have to go to San Francisco just to get a burger. There should be a burger joint locally. And same thing for, you know, all the different amenities.

• 2:03:25Speaker 11

  And jobs, jobs in particular, because in Northern California, we have this really, really dumb distribution of jobs where the Northern California mega region increasingly works as one place.

• 2:03:34John Coogan?

  Yeah.

• 2:03:35Speaker 11

  From Sacramento all the way to San Jose. I mean, you have people who live in Sacramento, they work in the Bay two days. They do the commute, right?

• 2:03:41John Coogan?

  There's a ton of people that live north of the Golden Gate Bridge and commute to San Francisco. And then there's a ton of people that are really far south and commute up to the tech companies and whatnot.

• 2:03:49Speaker 11

  Exactly. And, and right now, the challenge is, basically, all of the jobs are between San Francisco and San Jose.

• 2:03:54John Coogan?

  Mm-hmm.

• 2:03:55Speaker 11

  And then up in Sacramento.

• 2:03:56John Coogan?

  Yeah.

• 2:03:57Speaker 11

  And then you have four million people in places like East Contra Costa County and Solano and Stockton and San Joaquin. There's basically no jobs.

• 2:04:03John Coogan?

  Yeah.

• 2:04:04Speaker 11

  So what happens in, in, in the morning is all of those people get in a car.

• 2:04:06John Coogan?

  Yeah.

• 2:04:07Speaker 11

  And they have a two-hour commute to Menlo Park. The number of people who live in Solano County who work in Menlo Park and have a two-hour commute each way every day would, would blow your socks off. It's half, more than half of the county commute.

• 2:04:19John Coogan?

  I'll just leave.

• 2:04:20Speaker 11

  Outside of the county. So it's, it's completely, it's completely insane.

• 2:04:23John Coogan?

  Yeah.

• 2:04:24Speaker 11

  So the first solution, and this is actually our big contribution to the region.

• 2:04:26John Coogan?

  Sure.

• 2:04:27Speaker 11

  Is to take a bunch of jobs.

• 2:04:29John Coogan?

  Yeah.

• 2:04:30Speaker 11

  And put them in the middle of the region, which makes life better for everyone who lives in. Palo Alto, San Francisco, because you don't have all of those people sitting on the 101 or 3D coming down.

• 2:04:39John Coogan?

  So, big office buildings for tech companies or big companies, big employers.

• 2:04:43Speaker 11

  Big manufacturing.

• 2:04:44John Coogan?

  Big manufacturers.

• 2:04:45Speaker 11

  Big manufacturing.

• 2:04:46John Coogan?

  Have you talked to companies or they receptive to that? Because there's sort of like the first mover is gonna have a rougher time, I imagine, than if they're already, hey, we're already in Menlo Park and most of our employees are right here, at least the executives are. Yeah, there's a lot of people that commute, but, you know, uh, maybe fifty percent of the employees only commute less than thirty minutes. Like, that's probably a pretty common stat for a tech company in the Bay. Uh, how are you thinking about pitching this to companies to go and take that leap and be the first one?

• 2:05:14Speaker 11

  I mean, we, we start with, there has to be a reason for them to be in Solano.

• 2:05:18John Coogan?

  Sure.

• 2:05:18Speaker 11

  And generally the ones that.

• 2:05:19John Coogan?

  Not just pricing.

• 2:05:20Speaker 11

  Not just, not just pricing. Um, and, and the biggest one that we found two big ones. Um, the first one is manufacturing.

• 2:05:26John Coogan?

  Sure.

• 2:05:27Speaker 11

  You have this whole wave of companies doing manufacturing. A bunch of them are headquartered in the Bay Area.

• 2:05:31John Coogan?

  Yeah.

• 2:05:32Speaker 11

  Um, and then I think the sweet spot is you are a company, you figure out a new way to do X, you've raised twenty million, you have twenty people. You've perfected it, now you've raised a hundred million and you need to build a factory.

• 2:05:44John Coogan?

  Yeah.

• 2:05:44Speaker 11

  And the factory is gonna have a hundred or two hundred employees and you wanna build it somewhere.

• 2:05:48John Coogan?

  Yeah.

• 2:05:48Speaker 11

  Right now, what happens for virtually every single company, and we've spoken to four hundred of them, is they say, we really wanna build it in California because we still figuring out how the factory works.

• 2:05:57John Coogan?

  Yeah, the factory is the product.

• 2:05:58Speaker 11

  The factory is the product. And if every time that, um, our software engineers or AI engineers need to go to the factory, they need to go on a plane and fly to another state.

• 2:06:07John Coogan?

  Yeah.

• 2:06:07Speaker 11

  That's a three-day trip.

• 2:06:08John Coogan?

  Yeah.

• 2:06:09Speaker 11

  It's like, oh, it's three hours to go to Austin. No, it's not three hours.

• 2:06:13John Coogan?

  Yeah, yeah, yeah.

• 2:06:13Speaker 11

  It's an hour and a half to the airport, then it's TSA, then it's late, then you fly in, then it's to get there, then, so it's a three-day trip, right? Um, and our value prop is put the factory in Solano, because if you get in a car in Menlo Park in the morning, you can be in the factory of eighty minutes and you can be back home and have dinner with your kids. And that really works. Now, what means, what that means is if you put the first factory there, then you go and you raise five hundred million dollars. And you need to build factory number two. Our value prop is we have so much land that if you wanna build factory one, which is a hundred thousand square feet, we can reserve enough land around it for five or 10 years that you can put factory two, three, four, five next to it. You can have them all in the same place instead of having to solve this problem over and over and over again in a different place.

• 2:06:59Speaker 11

  Now, that means that we get the factory that employs 500 or 1,000 people. Now, if you wanna build a giga factory that employs 10,000 people where you are really, really cost sensitive, maybe that still goes to Ohio, but that's okay. But a lot of the cutting edge stuff would be in Solano. And to your point about AI, that's becoming even more important.

• 2:07:17John Coogan?

  We already see this down in LA, by the way, there's a lot of startups that start in El Segundo and they have, you know, 5,000 square feet, they're doing some R and D. And then, once they start building larger factories, they move just outside of El Segundo, just to drive. They might still have, you know, SpaceX was started in El Segundo, but eventually moved to Hawthorne and grew out of that. And then eventually Starbase in Texas. And so for that interim step in the San Francisco hard tech, deep tech community, that can make a ton of sense.

• 2:07:44Speaker 11

  They don't have that, exactly. San Francisco doesn't have that. And then, and even in LA, when you, at least when we talked to a bunch of those companies, LA is becoming a kind of, El Segundo and Hawthorne are becoming, and Torrance are becoming victims of their own success.

• 2:07:56John Coogan?

  Oh, sure.

• 2:07:57Speaker 11

  Because they are fully built out.

• 2:07:58John Coogan?

  That's expensive.

• 2:07:58Speaker 11

  There's no available land. And so a bunch of these companies will tell you, we can't really build another factory here. And we still have R and D in the Bay. So it might be an even outlet for companies that started out here, they have a factory here, they have a bunch of talent in the Bay. And then to your point about AI, everyone talks about building the factories of the future. How are you gonna build the factories of the future? You're gonna build them with AI talent. Where is 85% of the market cap in AI in the Bay area? Do you think you're gonna convince those engineers easily to spend every week flying to some other state? It's a real, it's a real competitive advantage.

• 2:08:34Jordi Hays?

  Yeah, it's like, hey, I know you can go work at Meta for $100 million a year, but how about if you work for less than that in Utah?

• 2:08:41John Coogan?

  Yeah, and then you fly all the time.

• 2:08:44Jordi Hays?

  What does, what does success look like for this year? One thing that I just appreciate so much about this project and this company is that most people. Come up with an idea like to make a new make a new city or make, you know, and they start running the calculations and they realize, okay, not only is this going to be hard, but it's going to take, you know, 10 plus years. So I'm not even going to start, right? Because I want to be doing something where maybe I can see more tangible progress on a faster timeline. Or I need a billion users like two years from now, not not.

• 2:09:16John Coogan?

  I need 100 million ARR today.

• 2:09:19Jordi Hays?

  Today, today.

• 2:09:20John Coogan?

  The bar is three months now.

• 2:09:21Jordi Hays?

  But but so you've just chunked it out and you're just like, you know,

• 2:09:27Jordi Hays?

  10 years in, which is probably the moment where it really is hopefully more exciting than ever. What is what is this year look like in terms of just pushing pushing the ball forward?

• 2:09:40Speaker 11

  Well, hopefully it will break ground this year. And so I that would have seemed ambitious a year ago, I think. But I think there's a few things that kind of aligned. And so if I just

• 2:09:56Speaker 11

  there's this really interesting thing that's happened where a lot of things have come together at the same time for us, where we've announced it, what is it, two years ago? And of course, it was very controversial, right? You come to a community and it's a guy with a funny accent, and we want to build a major new city, which we haven't done in America in 100 years. So nobody even thinks that you can build new cities. And it's like, oh, it's not just going to be a city, it's going to be a massive manufacturing park. And by the way, we'll build the biggest shipyard in in in America on the south end of the property. And everyone is like, you guys are crazy and we don't trust you. But what's happened over the last few years is we've actually done the work, we've put together this incredible team. And so we've built a lot of trust. And now there's a tremendous amount of support for it in the community. And then what's happened at the same time at the state level and at a national level, I mean, think back to where

• 2:10:41Speaker 11

  we were as a country two years ago. Abundance wasn't really a thing. Built wasn't really a thing. We didn't just have an election on affordability. Reindustrialization was kind of beginning. And so at a macro level, there's been this massive shift towards

• 2:10:59Speaker 11

  we need to do this and that exists in California. And so right now where we are is we had a big announcement this morning that we can talk about. But basically, the the goal for this year is the

• 2:11:13Speaker 11

  The stretch goal for this year, I'll say that, is to break ground and there's lots of reasons for why. That makes sense for Solano County, it makes sense for California, it makes sense for the country.

• 2:11:22John Coogan?

  Sorry, going back, closing the loop on congestion pricing.

• 2:11:25Speaker 11

  Yes, sorry.

• 2:11:26John Coogan?

  Are you pro, con? What do you think?

• 2:11:29Speaker 11

  I think it is...

• 2:11:33Speaker 11

  I think the... The direction that I'm most excited about is we should use congestion pricing to build a lot more capacity. I think it's really politically complicated to come and say, we are going to take this existing road that right now is free and make it paid.

• 2:11:49John Coogan?

  Yeah.

• 2:11:50Speaker 11

  But I think people want a lot more capacity.

• 2:11:52John Coogan?

  Sure.

• 2:11:53Speaker 11

  And paying for it with congestion pricing is great.

• 2:11:57Speaker 11

  New York has proven that it... I mean, I lived in London when they introduced congestion pricing, it clearly worked.

• 2:12:01John Coogan?

  Yeah.

• 2:12:01Speaker 11

  We've known that this worked for a long time. It was a big fight to do it in New York.

• 2:12:05John Coogan?

  Yeah.

• 2:12:07Speaker 11

  I think that self-driving cars are gonna force us to do it. Because there's an induced demand with self-driving cars, when the cost of driving a car is just the financial cost, but you can be watching Netflix or doing email or whatever. People are gonna drive more, we're gonna send packages back and forth.

• 2:12:24John Coogan?

  It does feel like there's a... If you believe the self-driving car narrative, you have to be long suburbs.

• 2:12:30Speaker 11

  You have to be long suburbs and then you have to believe that it's going to force us to price at least some of the roads and some of the capacity. Because without it, it's induced demand and there's gonna be more and more driving, right?

• 2:12:43John Coogan?

  Yeah, yeah.

• 2:12:43Speaker 11

  Because if the cost of your DoorDash delivery drops by 70% because you don't need to have the driver.

• 2:12:47John Coogan?

  You're gonna get more.

• 2:12:48Speaker 11

  You're gonna get more DoorDash.

• 2:12:49John Coogan?

  And yes, there's some intelligent routing that you can do.

• 2:12:53Speaker 11

  Exactly.

• 2:12:53John Coogan?

  To have multiple people in the same car, but that's what congestion pricing incentivizes.

• 2:12:57Speaker 11

  I think the political opening is to say, we're gonna charge, we're gonna, we're gonna, we're gonna price these roads. We're gonna use the part of that revenue or all of the revenue to fund the construction of them. And that also, I think, is a way to get it through politically.

• 2:13:12John Coogan?

  Sure.

• 2:13:12Speaker 11

  Because in California, you have a... Environmental interest group that doesn't really wanna build highways. But if you price those highways, they are much more open to it. And so I think that's the grand bargain that you can you can drive. The other thing that I would say is what we hope the city will do at the scale of the mega region is, if you look at the California mega region from San Jose to Sacramento, it's kind of like a donut. In the middle of the donut is all of the property that we own. And part of the issue we have is that this used to be two regions. It used to be the Bay Area and Sacramento, and they've become one, and they've grown, and they've become what would be, I mean, if the Bay Area was a state, if Northern California was a state, there's 12 million people who live there.

• 2:13:57Speaker 11

  It would be a seventh largest state in America. And right now, we haven't really tied it together in terms of transportation infrastructure the way that we need to. That's why when you try to go from Palo Alto to Tahoe on a Friday night, it's such a disaster. And so we need to build more capacity there. And putting a major new city in the heart of the region is how you help pay for some of that.

• 2:14:17John Coogan?

  What are you seeing on the, are you tracking the rebuild of the Palisades in Altadena in LA? Obviously, we experienced the fires down here. There's a huge amount of construction. The hope is that it's really quick construction. We've already talked to a friend who's, I think, finishing rebuilding this summer, which is pretty crazy, pretty fast. Are there any lessons, learnings, just supply shocks to demand for building labor? Are assets actually getting reallocated from Northern California to Southern California to to enable the rebuild? Or is that something that's not really changing your plans at all? Are there any lessons that you've learned?

• 2:14:59Speaker 11

  Yeah, I mean, I I'm not deeply involved in the in the rebuild. We're far away from it. But my, from my vantage point, we are still at a point where permitting and coordination is the bottleneck. It's not the labor, it's not the construction. It might become that. I think what it illustrates is just the complexity of. Building infill in general, just building in existing cities because you have thousands of people who own the land and they need to all agree on construction schedules and redoing it and so on. I will say that there's some pretty impressive success stories. I'll give a shout out. I mean Alexis Rivas at Cover has been doing great work in terms of both documenting the permitting challenges and then I think that they delivered several units already. Yep. And so I'm a huge fan of what they're doing. I think the product is beautiful. Yeah.

• 2:15:44Speaker 11

  It's a factory-built ADU company. Yeah, exactly. I think they started out as an ADU and now increasingly a single family and then I think they have ambitions beyond that. So I think that's an interesting area, but I do think what the Palisades did, if there is one silver lining to it, is that... And it was, and it's partially because of when it came out with Abundance and other books of the topic is it exposed a lot of people to just how insane the system is that we've built for permitting something in California. And my favorite example that I give is I think a lot of the rules that we've put in place in California were genuinely well-intentioned. And I mean it.

• 2:16:26Speaker 11

  I mean, some of them were just bad people using a pretense to put in place a rule that they knew exactly what it would do, but most of it was well-intentioned. But I think having two glasses of wine is a pretty good idea. I think having 50 glasses of wine is a pretty bad idea. What's the analogy here? And regulations in California. Oh, we have 50 glasses of wine worth of regulations. Every single one of those regulations, you look at it, it's like, it's a good idea. Like, it's a good idea to have more standards on heating in the buildings. It's a good idea that the community should be able to have another review on the design. This is a good idea. This is a good idea, but this is 50 years of legislators who each felt like they wanted

• 2:17:08Speaker 11

  to fix an issue, but they've created this layer cake of regulations that's just very hard to get through, which actually is one of the things that we can deal with better than individual homeowners because in some sense...

• 2:17:22Speaker 11

  We are permitting the entirety of the city at once.

• 2:17:25John Coogan?

  Yeah.

• 2:17:25Speaker 11

  And what that means is we're doing it wholesale, which it means we have to spend an insane amount of money on lawyers and consultants to do all of that work, but we can drive down the costs of the housing because we are spreading it out over so many units.

• 2:17:39John Coogan?

  Yeah.

• 2:17:39Jordi Hays?

  And a big factor to permitting is speed, right?

• 2:17:43John Coogan?

  Exactly.

• 2:17:44Jordi Hays?

  Even if you're still dealing with the same number of regulations, if you can just turn

• 2:17:48John Coogan?

  Yeah.

• 2:17:49Jordi Hays?

  turn approvals over faster throughout the build process, you can still have a tremendous impact.

• 2:17:54John Coogan?

  I want like a synthetic permitting office in like embedded in CAD or something. So as you're designing your structure, you put a window there and it runs a simulation to say, hey, if you were to submit this, the permitting office would say no to that. Or and then you slide the window over two inches and it says, okay, now you're good. And you just have like sort of red, green lights on everything you're designing. So you're getting feedback instead of having to submit, wait for them to come back with the revision. Like what you submit should be almost always approved and accepted, but there's still all of this uncertainty when you submit permits.

• 2:18:31Speaker 11

  I think that's much closer than it might seem.

• 2:18:33John Coogan?

  Yeah.

• 2:18:33Speaker 11

  And I think there's a, and even before we get to it, I'm really optimistic about AI tools that you basically embed in cities.

• 2:18:41John Coogan?

  Sure.

• 2:18:41Speaker 11

  And then as they get these applications come in,

• 2:18:45Speaker 11

  instead of people manually review them, you just do a pre-scan. And I actually had discussions with legislators in Sacramento who want to run those bills. But you could basically, actually, it's very much what you said. It's you can submit your application and it just runs it through and it says, we think that this is acceptable. Or here are some issues to fix. So that's kind of the the front end to the client, to the architect or to the builder.

• 2:19:08John Coogan?

  Yeah.

• 2:19:08Speaker 11

  But then even to the employees who are working those jobs and approving it, you could see a system where it comes to them and is like, recommendation is that you approve it and the five areas where me, the AI, have the least

• 2:19:21John Coogan?

  Confidence.

• 2:19:21Speaker 11

  confidence is these five, go check them.

• 2:19:23John Coogan?

  Yeah, yeah.

• 2:19:23Speaker 11

  Because I think, I think it's. I think it's easy to vilify some of the permitting authorities and some of the people who work there, but they're just trying to do their best. And some of it is real. I mean, I don't know the details of it, but the tragedy in the nightclub in Switzerland, I was talking to a friend who is on the ground and who knows it. And part of the issue allegedly there is you basically had a situation where it was a small town, there were some relationships, and the fire chief, mine is standing as the fire chief or whoever was in charge of doing the inspections, was friends with the club owner and they didn't want to deal with the costs of revising the material they had on the floor.

• 2:20:06Speaker 11

  And then they had a fire exit and they locked it because they didn't want the teams to be sneaking into the nightclub.

• 2:20:13John Coogan?

  Interesting.

• 2:20:14Speaker 11

  And so you're like, it's very easy to be really, really upset about your fire department and be like, this is stupid, we should get rid of it. But if you want to be able to walk in a restaurant, or you have kids walk in a restaurant, or walk into an office and feel like, feel secure in the environment, I think you need a balance. I'm hopeful that AI can actually give us the best of both worlds.

• 2:20:37John Coogan?

  Yeah, me too. Jordi, what's your question?

• 2:20:40Jordi Hays?

  On the, on the customer side for California Forever, customers being businesses that would come in and build facilities, are you within the range now where you can move, you've said you've talked to hundreds of companies that it would be potentially leasing or buying, or, you know, building in California Forever? Given that you're hoping to break ground this year, are you at a point where you can actually get more serious with these companies and say like, hey, like, let's actually like, put this into, not go from like concept to actual like planning around building factories, shipyards, et cetera?

• 2:21:16Speaker 11

  Yeah, I mean, we've, we've, so we have, we have two timelines. We have a default timeline, which is we're going through the usual process when we would break ground in 2028. And that's what we've told the companies, we said, this is, this is where we feel pretty strongly that we can deliver. And actually, part of where the 2029 breaking ground, sorry, 2026 breaking ground is coming from is a bunch of those companies have come back and said, you know, We love Solano as a location. We love putting the facility in the middle of what you're building, but we need to place it and break ground in 2026.

• 2:21:47Jordi Hays?

  Yeah.

• 2:21:47Speaker 11

  And so if Solano can deliver and if you can break ground in 26, we want to put it there. If you can't, unfortunately, it's going to have to go to name another state, generally speaking.

• 2:21:55Jordi Hays?

  Yeah.

• 2:21:56Speaker 11

  And so we've brought that to the local elected officials and we've brought that to kind of economic development agencies at the regional level and said, can we work on this? Can we figure out a way to do the permitting in parallel?

• 2:22:08Jordi Hays?

  Yeah.

• 2:22:08Speaker 11

  Because we don't want to lose these jobs, right?

• 2:22:09Jordi Hays?

  These are tax revenue and jobs that will just go to other places and we have an opportunity to keep it here in California.

• 2:22:14Speaker 11

  Exactly.

• 2:22:15Jordi Hays?

  Has the, how, how, how has the support been from local officials and even Sacramento?

• 2:22:21Speaker 11

  It's, I mean, it's night and day from two years ago. And as I mentioned, kind of in the beginning, it was obviously very controversial and, and people didn't know what to make of it. You look at it today, there's a, there's a, there's an open letter that, that I was put up this morning on our website in connection with a labor announcement we've made. There is basically this, I mean, honestly, it's, it's, it's a love letter to California that is signed by the construction unions, by us, by a bunch of other people saying, hey, this is the state that used to be able to build the Golden Gate Bridge in four years. We built, we built Hollywood and we built the California Water Project. Surely we can break ground on this quickly. And there's a moment. And if you look at the signatures, it's, it's the former speaker of the California Assembly, Bob Hertzberg,

• 2:23:04Speaker 11

  who wrote the legislation around how cities would expand. It's Alan Burtor, who I think is one of the most respected urban planners in the world. It's former Senator Bill Dodd, who was Senator for our district until two years ago. It's countless local mayors, former supervisors. And so there's, there's, there is a really incredible coalition that's come together to say, hey, we can do this. We can, we don't have to kind of skip steps. We can just do them in parallel and break ground. And part of that is companies saying that. Part of that is construction workers saying, I'm sick and tired of commuting for two hours. I want to have a job 20 minutes from home. Part of that is Solano had some old industries closed down in the last couple of months. They had a

• 2:23:48Speaker 11

  There was a Budweiser Brewery in Fairfield that was 50 years old that's closing. There's a refinery that's closing, and so there's a need to replace these jobs. And so you see the outlines of this compelling argument to say, hey, this can be a solution to the very practical local issues of tax revenue and jobs. But at a much bigger level, this can be, this can be a real moment for California where the state can show, hey, we can do big projects. This isn't just high-speed rail. And I think there's something deeply poetic about doing that in 2026.

• 2:24:24Jordi Hays?

  Yeah.

• 2:24:25Speaker 11

  I mean, it's 250th anniversary, right?

• 2:24:27Jordi Hays?

  I love it. Growing up as a, growing up as a, as a kid, I can't tell you how many times I like saw a piece of land and thought out loud with whoever I was with, what if we put this there? What if we put that? And every single time, the messaging was, oh, like, yeah, technically you could, but it'll take so long, like, it's not, it's not worth doing. And so I'm so optimistic that getting California Forever off the ground, active, a real place that people live and work and build, will just inspire, it could be like really a real turning point for the whole state, so.

• 2:25:01John Coogan?

  How many acres do you have now? Your empire's growing. What's the total amount of acreage for California?

• 2:25:07Jordi Hays?

  Total acreage?

• 2:25:08John Coogan?

  Give us the number.

• 2:25:09Speaker 11

  69,000 acres.

• 2:25:10Jordi Hays?

  Boom!

• 2:25:11John Coogan?

  Congratulations. Thank you so much for coming to the season.

• 2:25:18Speaker 11

  Always in the studio. I'll come back when we break ground.

• 2:25:20John Coogan?

  We can't wait.

• 2:25:21Jordi Hays?

  We can't wait for our first episode.

• 2:25:23John Coogan?

  From there, we'll do it.

• 2:25:24Speaker 11

  You can come over, we'll do it from there.

• 2:25:25John Coogan?

  Thank you so much for having us. We'll talk to you soon. Goodbye. The New York Stock Exchange. Want to, want to change the world? Raise capital at the New York Stock Exchange. Ching, ching. We have some news here from OpenAI. This is sort of leaked through Foxconn, but from Dan Nice Stat says, OpenAI will reveal, will unveil its first AI earbuds, dubbed Sweet Pea, in September this year, and shipments are expected to reach 40 to 50 million units in 2027.

• 2:26:01John Coogan?

  So, you know, this is citing OpenAI's Chief Global Affairs Officer, Chris Lahane. Taiwan's Foxconn will do the assembly for these buds. Makes a ton of sense. You know, you're chatting with OpenAI, you're chatting with ChatGPT. You got Johnny Ive on the team, former Apple. And you put something together that's your always on AI assistant that you're chatting with. But forty to fifty million units, that's a lot. So I wanted to put some context around how massive that would be. So the Amazon Echo in year two sold eleven million units.

• 2:26:40John Coogan?

  The Xbox Series X slash XS, this is the sequel to the Xbox, there's already an Xbox install base. Sixteen million units in year two. The iPhone, the iPhone in year two, seventeen million units. The Apple Watch did twenty million units in year two. The PS5, massive success, hugely anticipated product. The PS4 was almost a decade old, lots of people upgrading. The PS5 shipped thirty million units in year two. The Nintendo Switch did between thirty-five and thirty-seven million units in year two. AirPods now, AirPods did do fifty million. So if the ChatGPT, OpenAI, earbuds dubbed Sweet P.

• 2:27:26John Coogan?

  Perform as well as AirPods, you could see fifty million units. And the iPad, the iPad sold fifty-five million units in year two. But it's a tall order.

• 2:27:35Jordi Hays?

  From the goats.

• 2:27:36John Coogan?

  It's a very, very tall order.

• 2:27:37Jordi Hays?

  Consumer hardware. There is more news from Wayne Ma and Kianer Liu. Apple is developing an AI-powered wearable pin the size of an AirTag that is equipped with multiple cameras, a speaker, microphones, and wireless charging.

• 2:27:48John Coogan?

  Shots fired.

• 2:27:49Jordi Hays?

  The device could be released as early as 2027.

• 2:27:52John Coogan?

  Yeah, wait, why are you reacting?

• 2:27:53Speaker 03

  I'm just like, like, I feel like a lot of the reason why people like do the pin or something is because they can't get all the features from the iPhone. But like, they already have the iPhone, so why don't they just make that good? I guess they probably will, but.

• 2:28:03Jordi Hays?

  Like, what, do you think this is a good idea, Jordy? I feel like I'd rather just have it in my phone.

• 2:28:07John Coogan?

  Yeah, it is, it is crazy if you're in the Apple ecosystem and you have a MacBook, an iPad, a watch, earbuds, AirPods, and the phone.

• 2:28:17Jordi Hays?

  Look.

• 2:28:17John Coogan?

  And the Vision Pro. It's like, they got ninety percent of your body covered with tech. Like, you're pretty good.

• 2:28:23Jordi Hays?

  Talking to a wired headphone guy.

• 2:28:25John Coogan?

  Yeah.

• 2:28:25Jordi Hays?

  I've been rocking Apple wired headphones.

• 2:28:27John Coogan?

  Yeah, yeah. So if this was wired in, you'd be good to go?

• 2:28:30Jordi Hays?

  Probably five, five years now. Uh, no, no, I, I, I'm not in the, I'm not in the.

• 2:28:36John Coogan?

  In the market for this?

• 2:28:37Jordi Hays?

  I'm not in the market for this, uh, but I gotta wait and see. I'll, I'll continue here. So Apple's trying to release their device as early as twenty twenty seven as well. Such a product would position Apple to compete more effectively with OpenAI, which is planning its own AI-powered devices, and Meta, which is already selling smart glasses that offer access to its AI assistant. Google also plans to release smart glasses in conjunction with Samsung. Apple's development is still in the early stages and could still be canceled. Still, Apple is endeavoring to move faster than usual to try to stay competitive because of OpenAI. It's planning to manufacture roughly twenty million units at launch, the person added. Apple's pin joins a growing portfolio of AI-powered products the tech giant has under development,

• 2:29:20Jordi Hays?

  including AirPods equipped with enhanced sensors. Like, yeah, I, it's kind of a...

• 2:29:27Jordi Hays?

  It's like, are people really gonna have, like, their pin on and their AirPods in and have their phone? Just how many AI-enabled devices do we need?

• 2:29:39John Coogan?

  Shoulder pads, the smart cane, you want the, the breastplate.

• 2:29:44Jordi Hays?

  And there's the, there's the Apple, there's the Apple home device that's gonna be like, you know.

• 2:29:49John Coogan?

  I actually do, I mean, we have to, we have to get to our next guest, but I do have a hot take that, uh, there might be a future wearable that looks like the Pip Boy from Fallout. Are you familiar with the Fallout series? I'm not, I'm not, I'm actually not kidding about this and I'll unpack it. So basically, in Fallout, you wear a device on your arm and you, and you turn it and it's basically a phone that's like glued to your arm and then on, you can access your menus through here, right? And it was always like something fun that like the, you know, the cosplay community would build out. Yeah, there's the pit boy. And people have made real versions of this. It has this cool retro aesthetic.

• 2:30:32John Coogan?

  It's never taken off, but I've noticed that if you look at the live streamers like I show speed Kaizen not when they're out in the world, they often have phones strapped to their arms to read chat while they're going around like when I think it was speed that went to China and he went on this world tour. He toured America. He keeps a phone strapped to his arm so he can use both hands and it feels like weird and cyberpunk, but it feels like a glimpse of the future. Like we're all going to be living like speed in the future, maybe. And maybe we're going to have phones or something like it glued to our arms. That could just be an accessory that actually helps you glue the phone to the arm. It could be some sort of modified device that's curved to wrap around your arm. But

• 2:31:15John Coogan?

  I feel like the the end state is like more technology on your body constantly. And that's like an easy one that people could adopt. You've already seen, you've seen Apple sells the sock that you can keep your phone and a lot of people are wearing like almost necklaces with their phones. So their phone never goes in their bag, never goes in their pockets. It's always just here and then they can just pull it out and take a picture, do whatever because they're so glued to their phone. I think like an interim wearable is just something that makes your phone like permanently dangle here because the phone is powerful. It has a lot going on in that, but you just never want to put it in your pocket. You're obsessed. What do you think?

• 2:31:51Jordi Hays?

  Yeah, I mean, the next step is just like a pair of glasses.

• 2:31:53John Coogan?

  Yeah, we'll get there.

• 2:31:54Jordi Hays?

  You mount the phone.

• 2:31:55John Coogan?

  The phone.

• 2:31:56Jordi Hays?

  Uses the camera to show you the world.

• 2:31:57John Coogan?

  Google made that. Google cardboard. You can take a cardboard box, fold it up and put it, put the phone on your face. Anyway.

• 2:32:04Jordi Hays?

  Yeah, I'm so, I'm so curious to see if, if OpenAI and Apple just happen to simultaneously kind of land on this very similar form factor and it actually becomes good enough that

• 2:32:20John Coogan?

  That they're in a race.

• 2:32:22Jordi Hays?

  I'm not currently, you know, using LLMs like multiple times a day for search and research or whatever. I'm not having these moments where I'm like, oh, if I could only just not get my phone right now.

• 2:32:35John Coogan?

  Yeah, especially because of the, I mean, these prompts, they take five, 10 minutes. I still feel like going into a, an agentic coding experience, or, or even just a deep research report. It's gonna, I'm gonna spend a couple of minutes there. And so, the, the two seconds it takes me to pull out my phone is not the rate limit. Maybe if the models get faster, but expectations are sky high, and it'll be interesting to see the, the reveal, how it's marketed, how it's pitched, and then ultimately how it sells. Let me tell you about cognition. They're the makers of Devon, the AI software engineer. Crush your backlog with your personal AI engineering team. And I'm also gonna tell you about Railway. Railway simplifies software deployment, web apps, servers, and databases run in one place with scaling, monitoring, and security built in.

• 2:33:21John Coogan?

  We have our next guest, George from Testudo, in the research waiting room. Let's bring him into the TVP at Ulsterum. George, how are you doing?

• 2:33:28Speaker 12

  Whoa. Good afternoon, gentlemen.

• 2:33:29John Coogan?

  Good afternoon.

• 2:33:30Jordi Hays?

  Good afternoon.

• 2:33:31John Coogan?

  Great to see you.

• 2:33:31Jordi Hays?

  Good afternoon.

• 2:33:32John Coogan?

  We got, we, we gotta, we gotta ask first, where does the name come from?

• 2:33:36Speaker 12

  Well, it's Latin, it's Roman military history, it's all things that we love.

• 2:33:41John Coogan?

  Okay.

• 2:33:41Speaker 12

  It basically is Latin for Roman military formation, where the shields are on all sides, the front, the back. It's been in Lord of the Rings, it's been in many Gladiator films, and that is exactly what our insurance is for the enterprise

• 2:33:56John Coogan?

  Metaphor.

• 2:33:56Speaker 12

  we work with. We are that protective coverage from litigation that they might experience.

• 2:34:03John Coogan?

  Yeah, talk to us about the, the early customers, who you're going after with this insurance product, and then we can get into how AI plays a piece into your business.

• 2:34:12Speaker 12

  Yeah, so this is a brand new category of insurance product. This is generative AI insurance, so excited to announce and, and launch that category today. Previous

• 2:34:22Jordi Hays?

  Category creator.

• 2:34:23John Coogan?

  Category creator.

• 2:34:24Speaker 12

  Exactly. Gong. Come on. We've got to get a gong there, John.

• 2:34:27Jordi Hays?

  Oh, yeah, of course. And former Goldman Sachs VP. So gong, gong to that.

• 2:34:32Speaker 12

  Yeah, there we go.

• 2:34:35Jordi Hays?

  A lot of gong-worthy moments. Love it.

• 2:34:38Speaker 12

  Yeah, exactly. So, brand-new category. You'll have heard of cyber insurance.

• 2:34:42John Coogan?

  Yep.

• 2:34:43Speaker 12

  This is AI insurance.

• 2:34:44John Coogan?

  Yeah, so, so walk me through, is this, uh, uh, I build a tool with, uh, generative AI, and then at some point a lawsuit comes along because of a hallucination. What are some of the downside risks that folks are insuring against?

• 2:34:59Speaker 12

  Yeah, so enterprises are deploying AI for, as you know, a huge range of different things. The enterprise is our target customer. Any company in any industry deploying AI for anything, quite a, a large market for us there. So, um, our focus is to cover these enterprises with an insurance product. So if they are sued, for example, for copyright risk, for kind of bodily injury, personal injury, all sorts of different types of risks, we cover the legal costs, damages, and settlements associated with any liability risk that they might be exposed to.

• 2:35:34John Coogan?

  How do you possibly underwrite this? There's so little data. There's the anthropic, like, billion-dollar settlement. OpenAI might have some massive settlement. Uh, at the same time, there's like two data points. Uh, how are you actually?

• 2:35:46Jordi Hays?

  Yeah, yeah. I, I mean, the, the, I'm sure a lot of enterprises are like,

• 2:35:51John Coogan?

  I want this.

• 2:35:53Jordi Hays?

  It's one of those interesting challenges where like, you know, if you're, if, if you get, you kind of need to balance that, like, if demand is too extreme, maybe you're underpricing it. But I'm sure you have a lot of comps from, again, cyber insurance and maybe other insurance categories, uh, that were created in the past.

• 2:36:10Speaker 12

  Yeah, so that's the secret sauce, and that's what's taken us over a year to figure out how to price this insurance without needing to connect or invasively audit the enterprise that we're working with. So we can turn a quote around in the same day. You know, companies like Goldman are not going to allow third parties to invasively integrate or audit their proprietary AI systems. We can price and give a Indicative terms within the same day. So that really is key to getting this product out via brokers, distributed to these enterprises. And the the pricing obviously is what we spend a huge amount of time doing. We're using some very special new data that we have sourced ourselves. We're using lawsuits

• 2:36:49Speaker 12

  and basically have ingested the federal and state US lawsuit databases. We've taken all of the generative AI lawsuits and then we break down those lawsuits in specific causes of action. So we know exactly what's driving the losses where in the US of that data, we then took it to Lloyds of London, the largest specialty insurance market in the world, where we source all our capacity and essentially presented our view of the frequency and severity of the generative AI liability risk in the market. And, you know, we're super excited that we're launching the product today with nearly a billion dollars of of risk capital backed by Apollo Specialty in in Lloyds.

• 2:37:28Jordi Hays?

  Let's go.

• 2:37:30Jordi Hays?

  Another gong hit.

• 2:37:32Speaker 12

  Two gongs. Love it.

• 2:37:35Jordi Hays?

  What what is what? I mean, obviously, I'm sure every policy is different and you guys are acting as the you guys are the broker, right? So you're not actually deploying your own capital or how does that work?

• 2:37:49Speaker 12

  Yeah. So we're called a Lloyds coverholder. In the US, a similar structure is called an MGA. It means we have full delegated underwriting authority. We have the pen essentially. So the insurer has the balance sheet and the risk capital. We essentially have the pen. We do all the technology, the infrastructure, the pricing, the data, the monitoring, the portfolio controls. And we take submissions from insurance brokers and it's our decision, yes, no, as to whether we cover that company or not. Again, up to $10 million or eight and a half million dollars of of risk for those different areas. And very excited to, you know, be working with enterprises deploying.

• 2:38:28Jordi Hays?

  And so how does the claims process work? If I'm, if I'm, you know, if I'm, if an enterprise is running some gen AI product and, and some, they end up getting sued because of that, like what, like what typically qualifies versus just a company just being like generally negligent, right? So like if somebody is driving a car and they're drunk and they crash into someone, the insurance company is maybe gonna like

• 2:38:54John Coogan?

  The CEO says like, please go download all of Netflix to train a video model. Like, that's pretty blatant infringement. I imagine that wouldn't be covered.

• 2:39:05Speaker 12

  Yeah, so I'm hoping we're not going to be doing too much of paying out claims, but obviously we will be paying some to prove that the product is useful. But the claims are being managed by our capacity provider, by the insurer in Lloyd's. And essentially, you're right, we'll be getting kind of logs, we'll be getting all the information associated with exactly why there's been a lawsuit. What's really interesting from all our legal data is only 4.9% of all of the gen AI lawsuits in the US market have been caused by model hallucinations or performance-related issues. So you would think that the model performing incorrectly is driving a lot of the litigation, but that's not actually the case in the data.

• 2:39:48Speaker 12

  Obviously, a lot of copyright risk, a lot of patent infringement, a lot of DNO claims, things like that. So if you over-index too much on the performance of the model rather than where that enterprise is deploying the AI or which industry or, or what type of revenue that company has, you will miss the driver of the liability. So we're very excited to, you know, talk through our approach.

• 2:40:11Jordi Hays?

  How, a scenario in the future where people have a bunch of agents deployed working on behalf of a company, and let's say an agent goes a little haywire, starts bribing, bribing a bunch of officials, like how, how much are you like thinking about like kind of like the sci-fi future where companies have more basically robots working for the company than?

• 2:40:33John Coogan?

  Yeah, AI kills everyone. I definitely want a payout. That's important to me because I'll be on a spaceship going light speed away from the from the gray goo boom and I expect you to send the wire immediately.

• 2:40:49Speaker 12

  Exactly. Um, product two for us is AI agents, as you said. Um, product three is AI and robotics. And so we're getting inbound for both of those things now. We are going to be multi-line across, you know, the whole AI economy. And I really believe that AI insurance is the biggest horizontal play picks and shovels for the AI economy. You know, everything in in every industry is insured up to a certain level. So, you know, we think this is going to be a massive category. We're excited to be defining and leading it. Um, and, you know, that agent product is number two for us, but we don't see a huge amount of enterprise deployment of agents yet. We think, um, obviously these types of insurance products can unlock that adoption. And, um, you know, you heard

• 2:41:32Speaker 12

  last week with JD from with coverage, companies like Coalition have done a really good job on the cyber insurance side. You know, they're a great comparable for us and, you know, huge fans of their work. You know, this is not cyber insurance. This is AI insurance. And so, um, we're very excited about the future roadmap and the category that we're creating.

• 2:41:50John Coogan?

  Talk about, uh, policy concentration, diversity of revenue and and policy size for you. I imagine that, uh, some of the big labs would probably love a billion dollar policy. They'd take 100% of what you have to sort of allocate. Uh, are you looking for 100 to spread that across 100 companies at a $10 million policy cap, 1,000 at $1 million? Like, what's the right shape of diversification for your business?

• 2:42:16Speaker 12

  Yeah, that's a you. That's a genius question and exactly what we're focused on. Obviously, coming from a capital markets perspective, you know, diversification across jurisdiction, industry types, um, revenue bands, AI models, deployments. That is exactly right. We are weaving a basket of of diversified clients, which means we can manage risk on the on the portfolio, on the on the whole portfolio.

• 2:42:40John Coogan?

  And then, and then walk me through, uh, uh, a YC company, for example. Uh, they they raise 5 million, $50 million valuation or something. They have a couple, you know, customers, you know, they're making some money. They're still early. They're deploying a bunch of generative AI products. Should they? Get AI insurance at that point. There's sort of a normal function when you do a series A of getting, you know, DNO insurance, a couple of other pieces of insurance when you leave the garage. How quick on the on the life cycle of a startup should someone consider this?

• 2:43:16Speaker 12

  Yeah, so unfortunately, this is not a product for startups. This is for kind of mid-market enterprises who are deploying AI. So we are not currently working with AI vendors or the base model providers. We think there's too much concentration risk. We've seen the number of lawsuits that have hit, especially the the base model providers. So as you say, like if we were insuring some of the big guys up to a billion dollars, I'm sure we'd be paying a hell of a lot of that out in claims already. So we are focused on enterprises, you know, things that we're getting from architectural companies to law firms to, you know, banks to, you know, any anything under the sun, really. So those are the target customers and we start, you know, in the mid-market.

• 2:43:56John Coogan?

  What about non-legal negative outcomes from AI? I'm thinking of,

• 2:44:03John Coogan?

  I run a I run a company. I let a chatbot talk to some customers. The customers prompt inject the the bot and they get refunds or discounts that I didn't want to give them. And it happens sort of quickly. And I'm like, ah, they they they took like some scammers came in, hacked the bots and they took 20 Gs off me. Like, can you do anything for me?

• 2:44:24Speaker 12

  Yeah, I think we absolutely could do something for you. It depends whether this is a like a first party loss. So you say like a financial loss that you've suffered yourself or you've been sued, right? This is a liability product. So this is protection from litigation.

• 2:44:37John Coogan?

  Sure, sure, sure.

• 2:44:38Speaker 12

  So first party is definitely in the hopper for us, but this first product is third-party litigation. And the liability exposures that enterprises are are exposed to kind of out of the box when they're deploying these AI systems.

• 2:44:52John Coogan?

  Fantastic. Well,

• 2:44:53Jordi Hays?

  Did you have you announced any funding yet or what's the story there?

• 2:44:58Speaker 12

  We don't announce funding. We don't believe that's the purpose of this company. I mean, you guys have Senna and David Senna on all the time. And he says the focus is building a durable business. Honestly, that's what I'm focused on with our moat within within the data, within the licenses, within the capacity, the balance sheet, and obviously our incredible team. And and honestly,

• 2:45:17Jordi Hays?

  Hit the gong. Hit the gong for not announcing that he's not announcing it.

• 2:45:22John Coogan?

  We're building a durable business.

• 2:45:24Jordi Hays?

  I'm reading that as we're building a durable business that has raised a little bit of money. Maybe a lot of money.

• 2:45:32John Coogan?

  Maybe a lot, but.

• 2:45:33Jordi Hays?

  I love it. I love it.

• 2:45:34John Coogan?

  When you're ready with other announcements, please come back on. This is a lot of fun.

• 2:45:38Jordi Hays?

  Yeah, yeah. Very, very cool. And.

• 2:45:40John Coogan?

  Congratulations. I mean, honestly, like.

• 2:45:41Jordi Hays?

  Yeah, I love how you're approaching this.

• 2:45:42John Coogan?

  Having the backing of Lloyds is like probably harder to get bigger, more important to the core business than grabbing a couple of checks from some Silicon Valley investors. So that's why we're living the gong.

• 2:45:54Speaker 12

  Yeah, yeah. Good luck to any Y C startup going into Lloyds of London. It is a den of, you know, of underwriters.

• 2:46:02John Coogan?

  Good luck going to Lloyds of London without an accident like this.

• 2:46:06Speaker 12

  I'm serious. And if you wear the wrong colored shoes or the wrong type of suit.

• 2:46:10John Coogan?

  Okay.

• 2:46:11Speaker 12

  Um, you will be laughed out of that building. So.

• 2:46:13Jordi Hays?

  That's your mode. That's your mode.

• 2:46:15Speaker 12

  Honestly.

• 2:46:16Jordi Hays?

  Yeah, like, oh, what's your mode? The mode is I know exactly what kind of suit to wear.

• 2:46:21John Coogan?

  Yeah.

• 2:46:21Jordi Hays?

  And.

• 2:46:22Speaker 12

  AI can't disrupt that. AI cannot disrupt those relationships.

• 2:46:25John Coogan?

  Timeless.

• 2:46:26Speaker 12

  You, you both are invited to Lloyds of London and a tour of the inner sanctum of underwriting by, by our head of insurance and my co-founder Mark. So we'd love to have you there.

• 2:46:36John Coogan?

  Thank you.

• 2:46:37Speaker 12

  You know, if you can drink Guinness's at high velocity, we'd also love to welcome you to Leadenhall Market, the home of insurance boozing, but you won't find us there. We are, we are hard at work 24/7 around the clock and excited to launch the category.

• 2:46:52John Coogan?

  That's amazing. Congratulations.

• 2:46:54Jordi Hays?

  Where are you based?

• 2:46:56Speaker 12

  We're between SF and, and London, but looking to expand into kind of New York and other, other cities as well.

• 2:47:03Jordi Hays?

  Amazing. So great to meet you, George. Congrats to the whole team.

• 2:47:06John Coogan?

  Congratulations.

• 2:47:07Jordi Hays?

  Not congrats on the funding. Congrats on the incredible partnership and all the progress.

• 2:47:12John Coogan?

  Yeah.

• 2:47:13Jordi Hays?

  We'll have you back on.

• 2:47:13Speaker 12

  Great. Thanks, gents.

• 2:47:14John Coogan?

  Have a great rest of your day. We'll talk to you soon. Goodbye. Gusto, it's the unified platform for payroll, benefits and HR built to evolve with modern, small and medium sized businesses. Get on Gusto.

• 2:47:26Jordi Hays?

  The backbone.

• 2:47:26John Coogan?

  And then also head over to Shopify. Shopify is the commerce platform that grows with your business and lets you sell in seconds, online, in store, on mobile, on social, on marketplaces and now with AI agents.

• 2:47:38Jordi Hays?

  Seconds.

• 2:47:38John Coogan?

  In seconds.

• 2:47:39Jordi Hays?

  And so fast.

• 2:47:40John Coogan?

  Yes.

• 2:47:41Jordi Hays?

  I will routinely just buy the products of our guests if they're on Shopify. I'll just buy it during the interview.

• 2:47:48John Coogan?

  Yes.

• 2:47:48Jordi Hays?

  It's one of my favorite pastimes.

• 2:47:50John Coogan?

  Yes.

• 2:47:50Jordi Hays?

  I really love it.

• 2:47:51John Coogan?

  Well, we have our second in-person guest in the TVP and Ultra Dome, Ara Krasian from Ramp. He is the economist. We'll bring him on down. He's here in the TVP and Ultra Dome. So, welcome to the stream Ara. Good to see you. How you doing?

• 2:48:07Ara Kharazian?

  Good to see you.

• 2:48:08John Coogan?

  Welcome to the Ultra Dome. Thank you so much. For those who have been living under a data center, please introduce yourself for everyone.

• 2:48:17Ara Kharazian?

  My name is Ara Krasian. I'm the economist at Ramp. Time, money, save both.

• 2:48:20John Coogan?

  Let's go.

• 2:48:22Ara Kharazian?

  I researched data on where businesses spend, where they're investing, where they're pulling back and what's growing. Our flagship research is called Ramp AI Index. Tracks the size of the AI economy.

• 2:48:32John Coogan?

  Okay, well, we're gonna, we're gonna have you, I think Tyler might have some beef with you. We'll see. Maybe you agree because there's this article in the Wall Street Journal that I want to go through. It says, "CEOs Say AI Is Making Work More Efficient, But Employees Tell A Different Story." Tyler took to the timeline to say, "Auto manufacturers say cars are making more travel inefficient. Horses tell a different story." And so, he's having fun with it. But there is an interesting stat in this Wall Street Journal article. I don't know if you've had a chance to read this, but basically, they asked workers and C-suite executives, "How much time do you think you're saving each week by using AI?" And the C-suite said, "Only 2% of C-suite executives that

• 2:49:16John Coogan?

  were surveyed by the Wall Street Journal said, 'No time at all. I'm getting no benefit from AI.'" Workers, 40% of workers said, "AI is not doing anything for me."

• 2:49:27John Coogan?

  Nineteen percent of executives, the C suite, said they were saving more than 12 hours a week. And only 2% of workers said they were saving more than 12 hours a week. So you have this huge disparity, at least in the reporting from the Wall Street Journal. How are you interpreting this piece?

• 2:49:42Ara Kharazian?

  So there's two things going on here, right? You've got either the fact that the surveys may be the improper way of measuring this. Because surveys don't always correspond to people's revealed preferences. So if you look at actual spend on AI models, it doesn't tend to reflect, you know, this kind of hesitance to use them or any lack of, lack of adoption. Especially because when we track spend, we're not just seeing that people are blowing a ton of money on models. We see that the spend that they're doing is becoming larger and they're renewing their contracts more. They're doubling down on them. They're typically extending those contracts out. That's not the type of spend that you do or investment that you make unless you're actually seeing some benefit.

• 2:50:18John Coogan?

  And specifically, I think a year ago, sort of like mid AI boom, post chat GPT, there were a lot of startups that came out and had, you know, were doing vertical AI for this, vertical AI for that, AI SaaS. And a lot of people saw the charts that went from zero to $100 million in 12 months, eight months, two months, two days. And people were wondering, is it going to be sticky? Are the venture capitalists going to get burned? Are these going to be flash in the pans or going to get steamrolled? But from the data that you've pulled, it seems like a lot of these companies, probably not all of them, but a lot of them have become sticky. The spend has been recurring and it's growing, but tell me more about what you're saying.

• 2:50:53Ara Kharazian?

  And well, that's the second part of why these surveys may not be the best way to measure this is that the, this kind of adoption takes a long time to actually take place. We're still in our own tech bubble.

• 2:51:02John Coogan?

  Yeah.

• 2:51:03Ara Kharazian?

  Where I just posted this data about cursor and anthropic.

• 2:51:06John Coogan?

  Okay.

• 2:51:07Ara Kharazian?

  And every time I post about cursor and anthropic, it gets way less engagement.

• 2:51:10John Coogan?

  Why?

• 2:51:11Ara Kharazian?

  Because a lot of people don't know what cursor and anthropic are.

• 2:51:13John Coogan?

  Oh, interesting.

• 2:51:14Ara Kharazian?

  And not to, no shade about cursor anthropic, like great technologies, but when I.

• 2:51:18John Coogan?

  I literally thought you were going to say the opposite, that like the cursor fanboys and the anthropic fanboys are like down ranking you or something.

• 2:51:25Ara Kharazian?

  The total addressable social media market for content about anthropic is just significantly lower. Because a lot of my followers, particularly those in the accounting space. Even people involved in procurement

• 2:51:34John Coogan?

  Sure.

• 2:51:35Ara Kharazian?

  Don't are still new

• 2:51:36John Coogan?

  Yeah, yeah.

• 2:51:36Ara Kharazian?

  To understanding, well, what are the dynamics in this market? Even for Anthropic, which is the second largest player.

• 2:51:41John Coogan?

  Yeah. So Jordi had a Jordi had this this thesis. We didn't really fully run the analysis, but I'd love to sync it up with what you're seeing because he was saying that there's a vibe war on X about the hottest lab. Everyone over the break was obsessed with Claude Code.

• 2:51:56Ara Kharazian?

  Yeah.

• 2:51:56John Coogan?

  And then Jordi was saying like, let's try and marry that with what we're seeing in the App Store and look at where things are ranking. There's the discussion that's happening.

• 2:52:05Ara Kharazian?

  Yeah.

• 2:52:05John Coogan?

  But then you go back to the App Store and you see a very different picture. What what stuck out to you about the the the vibes versus public perception, the consumer market, and then maybe we can marry that to what we're seeing in the ramp data?

• 2:52:17Jordi Hays?

  Yeah, I mean, that was really consumer.

• 2:52:19John Coogan?

  Mm hmm.

• 2:52:20Jordi Hays?

  Just, just, just because you have consumers on X just saying this company's cooked.

• 2:52:24John Coogan?

  Yes.

• 2:52:25Jordi Hays?

  Cooked. And then you just look at like the actual reality in the charts, which shows acceleration. And it just shows that social media reactions in real time are not even actually driving like

• 2:52:35John Coogan?

  Yeah.

• 2:52:35Jordi Hays?

  Macro

• 2:52:36John Coogan?

  Yeah.

• 2:52:37Jordi Hays?

  Acceleration in the even downloads of different apps.

• 2:52:40John Coogan?

  Sure, sure, sure.

• 2:52:40Jordi Hays?

  That that has less to do with enterprise.

• 2:52:42John Coogan?

  Yeah. And then and then what are you seeing in the spend data?

• 2:52:45Ara Kharazian?

  A lot of those consumer trends start to reflect in business trends as well. So in our data set, we see that OpenAI has the highest adoption rate amongst US businesses, approaching about 35%. And to be clear, only about 46% of businesses on our platform are paying for any AI model service at all.

• 2:53:00John Coogan?

  Yeah.

• 2:53:01Ara Kharazian?

  The vast majority of them are probably using OpenAI in some way.

• 2:53:04Jordi Hays?

  50% just being like horses.

• 2:53:05Ara Kharazian?

  Yeah.

• 2:53:06Jordi Hays?

  Horses are actually fantastic.

• 2:53:07John Coogan?

  Yeah, yeah, yeah. Unpack that. Is it is it that they're just not paying, but they're using free tiers? Is it that maybe they're paying, but on a personal basis and the CEO is paying for a ChatGPT Pro subscription or Claude Code or something?

• 2:53:23Ara Kharazian?

  Yeah.

• 2:53:24John Coogan?

  And then that when they go to work, they're not expensing it. So it's not showing up on a ramp card.

• 2:53:28Ara Kharazian?

  There's a couple of dynamics, again. Yeah. Like, we already get criticism for having a dataset that's probably a little bit more tech-forward. tech-forward than other datasets. And we're transparent about that, and we think that's an important part of doing this kind of research. At the same time, I think that we're likely underestimating AI adoption in some ways, because we don't capture free usage. Yeah. We don't cap, because we only see anything that's associated with rampant card spend. We don't capture employees using their personal accounts. And then even when you do capture all that, where do you draw the line on what AI usage actually is? I mean, this is a big debate happening in the sort of AI economics research, particularly as far as how we're going to measure the labor market impact. Because the real question you want to answer is, are companies using AI?

• 2:54:12Ara Kharazian?

  And then secondarily, how intensely are they using AI? Yeah. It's very difficult to measure. You can't just use dollars to measure AI intensity. Yeah. Right? Because the malls are getting cheaper over time. Sure. So comparing those dollars spent over time is not going to be helpful to you as a researcher. And then second, where do you draw the line on what AI usage is? And then what kind of job can actually be automated? So far, the research has tried to define job families with characteristics that are exposed to AI and likely to be automated. That research has, you know, gotten plenty of criticism itself. Yeah. Especially as the AI malls develop and it's, they start to be capable of doing more and more. Yeah. So now the research community is coming around to, well, we need to figure out which companies are using AI, get a dataset. Ideally, that's something that private sector is working on.

• 2:54:57Ara Kharazian?

  That's why we put out our Ramp AI Index research. Tracks which businesses are using AI and spending on it in some meaningful way and how they're using it. And then ideally be able to marry that with payroll statistics and see, well, are there shifts happening in this part of the labor force or others?

• 2:55:13Jordi Hays?

  Yeah, the, the, the thing that is going to be, like, I don't care if a CEO does a layoff and says, like, we're getting, we're doing this because we're getting efficiency from AI.

• 2:55:22Ara Kharazian?

  Yeah.

• 2:55:23Jordi Hays?

  Because the incentive is just to, like, blame it on AI efficiency instead of, we overhired, or business isn't growing as fast as we thought it was, and all this stuff. Like, you actually want, like, to, to, for the labor replacement kind of theories to be proven, you have to see somebody, like, actively switching spend from payroll to... To toke it.

• 2:55:45Ara Kharazian?

  Yeah, and you're going to have to see it over a long period of time. I agree that when you see these layoff announcements, the CEO may or may not say that it's about AI, but that's not going to matter when, you know, hundreds of thousands of people get laid off all the time. It's sort of a drop in the massive size of the labor market. You really want to track these changes over time as they happen, particularly as they affect other sectors.

• 2:56:05John Coogan?

  Sure.

• 2:56:06Ara Kharazian?

  And whether or not those sectors that are seeing the concentrated employment effects are ones that have an AI story.

• 2:56:12Jordi Hays?

  Have you been surprised at all at the types of individual companies that are adopting AI? You know, are you seeing a difference? Have you broken out like professional services firms? So like accounting, tax, perhaps legal versus SMBs like retail and or, you know, like, let's say, like car dealerships or things like that?

• 2:56:33Ara Kharazian?

  A lot of the early adoption is where you'd expect. I mean, the vast majority of tech tech companies, for example, we do track their adoption and it's been high for a long time. The vast majority are using some AI models. Finance directly follows that. And I think that makes sense, especially for tech, right? These are the tools that were developed by engineers for engineers and therefore the best productivity enhancing tools were things like Claude code or the code AI code editors, things that would directly help the people who were building the technology in the first place. What we're going to start to see soon, though, is how it's going to affect other parts of the labor force, especially now, you know, Claude cowork is out. Increasingly, there are AI agent tools that can automate and have access to the broader context of a worker outside of like a coding tool. So

• 2:57:16Ara Kharazian?

  you could start to imagine a more typical office worker benefit from these tools now. And that's where we're going to see the greatest productivity gains as those tools proliferate. And we're starting to see that, you know, change in business strategy now from the model companies themselves. Anthropic is doubling down on subscriptions, increasingly growing their subscription revenue. They used to be sort of seen as like, oh, it's just about APIs. That's their business model. No, they're like really leaning into the consumer side and the employee subscription side. You know, I think we're going to see that from OpenAI, a lot of competitors, too.

• 2:57:46John Coogan?

  Yeah. Can you help me understand a little bit more about how you would theorize about the substitutability between payroll dollars and AI spend? Because if I see a public company CEO lay off a thousand people, like that might be half a billion dollars of payroll spend over a year. And if I'm not seeing Well, a quarter billion dollars of AI spend. I would not attribute it to AI just instinctually because I feel like if there was a substantive effect, it would be, well, you know, AI, an AI worker is half the price.

• 2:58:25Ara Kharazian?

  Yeah.

• 2:58:25John Coogan?

  Not an AI worker is one thousandth the price. So sure, yeah, get, you know, spend, spend a hundred thousand dollars on AI and lay off a thousand people that was costing you a hundred million dollars. That just doesn't clock for me, but am I off there economically or do you think there's something to that?

• 2:58:41Ara Kharazian?

  Our early research right now shows that the job profiles that are going to be affected most by this transformation are those most marginally connected to the workforce. So you can imagine something like a labor marketplace, like an Upwork or Fiverr.

• 2:58:54John Coogan?

  Yeah.

• 2:58:54Ara Kharazian?

  Like this is where people go to, it's anything from designers to software engineers to.

• 2:59:00Jordi Hays?

  Yeah, we gotta check in. We gotta check in on, on some of those businesses because I used to think like, oh, you want a, a song made for like a video, like go to, go to, go to Fiverr, go to Upwork.

• 2:59:12John Coogan?

  A blog post written for SEO, like a lot of SEO blog post writing was done.

• 2:59:16Ara Kharazian?

  Highly scoped one-off tasks as well.

• 2:59:18John Coogan?

  Yes, yes.

• 2:59:19Ara Kharazian?

  And instructing a human being to do that task is not dissimilar from instructing an AI.

• 2:59:23John Coogan?

  Yeah.

• 2:59:23Ara Kharazian?

  Comprehensive.

• 2:59:24John Coogan?

  No, the job description is the prompt and then you're done and there's very little back and forth. It's just, turn it in and then I'll pay you or I'll grade you. Yeah.

• 2:59:32Ara Kharazian?

  On ramp spend, we have seen a significant decline in spend on those labor marketplaces. And specifically among firms that have replaced that spend with AI spend, but it's not one for one.

• 2:59:42John Coogan?

  Okay.

• 2:59:42Ara Kharazian?

  So there are significant savings.

• 2:59:43John Coogan?

  Is the ratio 50% or 10?

• 2:59:46Ara Kharazian?

  More than 50, but unfinalized numbers is a lot.

• 2:59:48John Coogan?

  But, but, yeah, but it's not, it's not one thousandth maybe or something. I don't know.

• 2:59:53Jordi Hays?

  It's somehow, so, so Fiverr's down 50% over the last 12 months. Upwork is somehow up 20% over that same period.

• 3:00:04Ara Kharazian?

  Yeah, but over the past couple of years, I think they're. They're down over the last couple of years. Yeah.

• 3:00:09John Coogan?

  How do you think about this, going back to this Wall Street Journal article? How do you think about AI tools diffusing through organizations? Either from your experience inside of Ramp versus the companies that work with Ramp? Like, there is a world where you could see C-suite executives. They're like, I definitely need to be doing deep research reports on every business question that comes to me. Maybe I'm not vibe coding solutions myself, but I'm a power user of these tools because I take my job seriously. Alternatively, there's a lot of young people who are just AI native entering and they're more on the junior side who come in and sort of bring these AI tools with them and might demand an AI tool.

• 3:00:52John Coogan?

  So how do you think about AI adoption across levels of seniority within organizations?

• 3:00:58Ara Kharazian?

  It often starts with one team.

• 3:01:00John Coogan?

  Okay.

• 3:01:00Ara Kharazian?

  At a company that might be an early adopter or might be, the same adoption dynamics that happen in a larger market where it starts with early adopting companies happen at the micro level at a company too. Where it might be a couple of people at a company that then evangelize it or bring it to a team. Then you might see a larger like pilot program. I've criticized the idea of pilot programs because I just think they end up, you end up trying to sign like a multi-year contract for one thing instead of doing a more constant evaluation of the types of products coming to market, especially for enterprise lately. And so diffusion will always happen, will typically happen like that. It depends on the company, how much leadership there is from the executive team on increasing AI adoption.

• 3:01:43Ara Kharazian?

  I think the vibe has also changed where more and more companies are not shying away from using AI. I think it's probably a net positive to talk about how you're using it effectively. But it certainly depends on the industry. Because there is, I think, a PR problem. Oh, totally, yeah. But for the task that it does well, I mean, you know, we'll talk about how AI's frontier is kind of jagged. We kind of know what it's good at doing. We're not entirely sure. But for the task that it's figured out pretty well, I think most companies are very receptive to evangelizing it fairly quickly.

• 3:02:15Jordi Hays?

  Are you, as part of your research, are you actively trying to replace your own work? I knew an Alana, like, you were an economist at Ramp. Your job is to look at all of our data and turn it into easy to understand reports.

• 3:02:30Ara Kharazian?

  Yeah, what do you, yeah, what's your tool chain? In the, I mean, I, for a couple of reasons, I just have to be on top of it all, just so I can talk about it effectively. But for the experimental, early-stage research process, they're so good. I mean, even a rudimentary aspect of most economic analysis is just doing like a seasonal adjustment on your data. Sure. And it's really just integrating a Python package. But there's a lot of different times where you might use this or that package. And if before you might have to write that code yourself to say, hey, do this seasonal adjustment. You can now just instruct it to like swap in and out packages and really check your results across different methodologies. So it really does make my work a lot better because it allows you to, you know, particularly for my job.

• 3:03:15Ara Kharazian?

  You know, you, everything I do is public facing, so all my research is just out there. But you really only see 10% of what I ultimately worked on. A lot of the research threads that I go down never see the light of day. Sure. And so AI allows me to experiment a lot more, check a lot of different results faster, and ultimately get through the bad ideas more quickly so I can focus on the good ones.

• 3:03:34Jordi Hays?

  Do you think without AI, you would need like a bigger team in order to put out the amount of research that you put out?

• 3:03:40Ara Kharazian?

  For sure, yeah. I mean, for me, it's certainly been a productivity enhancing tool. Sure. But I haven't figured out yet how to do the The more multimedia stuff, like I increasingly am making my own videos.

• 3:03:53John Coogan?

  Sure.

• 3:03:53Ara Kharazian?

  I'm still doing a lot of my own editing.

• 3:03:55John Coogan?

  Yeah.

• 3:03:56Ara Kharazian?

  I make my own like promo images and make my own charts. I haven't found the AIs to be helpful for me.

• 3:04:02John Coogan?

  Yeah, I think they need to build the RL environment around like premiere or some video editing.

• 3:04:07Ara Kharazian?

  No, my AI girlfriend's always telling me to work on that aspect.

• 3:04:13Ara Kharazian?

  I'm just thinking about you all the time.

• 3:04:17John Coogan?

  There were some, there was some flood around OpenAI towards the back half of last year. Is OpenAI cooked? What does the data say?

• 3:04:25Ara Kharazian?

  There's no definitive leader in terms of the AI race. Markets changing really quickly. OpenAI has a distinct advantage as far as distribution. It's at the most businesses. Now, Google also has a distinct advantage.

• 3:04:37John Coogan?

  Yeah.

• 3:04:38Ara Kharazian?

  Because it integrates Gemini for free across all of workspace.

• 3:04:40John Coogan?

  Sure.

• 3:04:41Ara Kharazian?

  So in our data set, I think we likely undercount Gemini adoption. But OpenAI, just by nature of being kind of this consumer default. If you're a company that is going to make some early business investment in an AI model for your employees, it's kind of a no brainer oftentimes to just go with, hey, what do you know about as a consumer? And what do your employees know?

• 3:05:01John Coogan?

  Yeah.

• 3:05:01Ara Kharazian?

  And so for that reason, OpenAI, I think is in a very safe place.

• 3:05:05John Coogan?

  Cool.

• 3:05:06Ara Kharazian?

  But it's a pretty tense race and we have seen, particularly in the sort of product layer, you know, large incumbents being, uh, uh, losing a lot of market share very quickly to like a new entrant. GitHub Copilot a couple of years ago, that was the major, that was pretty much the only AI code editor available for enterprise. Six months later, Cursor comes out and it's at 50% market share.

• 3:05:28John Coogan?

  Wow.

• 3:05:29Ara Kharazian?

  So I don't think any company should feel particularly comfortable, even if they have the enterprise backing and distribution.

• 3:05:34John Coogan?

  Yeah, only the paranoid survive. So OpenAI is growing. Anthropic's also growing, 1.6 percentage points to 16.7% of businesses using Anthropic. Biggest spenders in the tech sector leaning heavily on API spend. And then Google adoption growing as well. So basically it's, it's all good news. There's still a little bit of a horse race, but everyone's making it across the finish line for the most part.

• 3:05:58Ara Kharazian?

  People were worried over the last couple of months, well, Claude Code is getting so much better. Is this going to automate away things like Cursor?

• 3:06:04John Coogan?

  Sure.

• 3:06:04Ara Kharazian?

  Or obviate it away? And what we just found in our latest research is that. Cloud code is definitely accelerating in its adoption, but cursor, you get dollars spent like the pie is still getting bigger too.

• 3:06:16John Coogan?

  Yeah.

• 3:06:17Ara Kharazian?

  So there are enough people entering the market such that, and also by the way, enough people that are enough companies that are willing to buy multiple tools. And are still experimenting or at least finding that, you know, they can afford to to have multiple tools at their disposal. So neither of them are losing, you know, revenues and they still continue to grow.

• 3:06:37John Coogan?

  I imagine that as businesses scale, at a certain point, they want to go with an enterprise plan, they want a contract, they want billing. Do you think you'll maybe have to supplement your data with survey data? Because you might see a drop as a bunch of businesses say, hey, we don't want you training on our stuff. Let's just sign some big master service contract and wire you the money or something, or how are you thinking about adjusting to that?

• 3:07:02Ara Kharazian?

  I think that the value of ramp data is that we see actual money movements.

• 3:07:08John Coogan?

  Yeah.

• 3:07:09Ara Kharazian?

  And you can go to another researcher if you want survey data.

• 3:07:12John Coogan?

  Sure.

• 3:07:12Ara Kharazian?

  I think what we do well is that we're focused on what we uniquely have access to. There's no data set that tracks where and how American businesses spend, at least not one that's available to the general public. Our research tries to focus on that and track those.

• 3:07:26John Coogan?

  That's great.

• 3:07:26Jordi Hays?

  And you're pushing the ramp sales team to get even more businesses on the ramp platform.

• 3:07:32Ara Kharazian?

  Every.

• 3:07:33Jordi Hays?

  Feed me, feed me.

• 3:07:34Ara Kharazian?

  Every time you sign up for ramp, you build my data set, all anonymized, all aggregated. We don't do anything like that. But for that reason, I, this is the, at the start of this podcast, probably the first time I ever pitched ramp.

• 3:07:45John Coogan?

  Yeah.

• 3:07:45Ara Kharazian?

  Like pretty separate from the sales team for that reason.

• 3:07:48John Coogan?

  That's good. Uh, yeah, the real nightmare is when, uh, ramp rolls out enough AI tools that you have to classify being a ramp customer as an AI adopter. And then 100% of the data is AI adopters.

• 3:08:00Ara Kharazian?

  Yeah, this research at some point is going to become useless when it hits 100. I mean, imagine if there was like a ramp internet index in the 90s.

• 3:08:06John Coogan?

  True, it's like, how many people have websites?

• 3:08:07Ara Kharazian?

  If I were still talking about that.

• 3:08:09John Coogan?

  Yeah.

• 3:08:09Ara Kharazian?

  20, 30 years later.

• 3:08:10John Coogan?

  Everyone would be snoring.

• 3:08:11Ara Kharazian?

  Praying that people are still interested in it.

• 3:08:12John Coogan?

  Yeah, yeah.

• 3:08:13Ara Kharazian?

  Would be, would be useless research.

• 3:08:14John Coogan?

  But at the same time, there's a ton of interesting research to be done deeper in the internet stack. Well, what clouds are you on? What databases are you using? What front end frameworks are you using?

• 3:08:23Ara Kharazian?

  We're hiring on economics lab if you're, these are great ideas.

• 3:08:26John Coogan?

  Yeah.

• 3:08:27Ara Kharazian?

  I know you got your talent signing today.

• 3:08:29John Coogan?

  Yeah.

• 3:08:30Jordi Hays?

  John helped with the census at one point.

• 3:08:32John Coogan?

  I did, I did work for the census at one point.

• 3:08:34Ara Kharazian?

  Really?

• 3:08:34John Coogan?

  Yeah, in college, it was a fun, fun gig.

• 3:08:36Ara Kharazian?

  They do great work.

• 3:08:37John Coogan?

  They do, they do.

• 3:08:38Ara Kharazian?

  I've criticized this.

• 3:08:39John Coogan?

  Yeah, I mean, I from from working there and and and doing everything on pencil and paper, I was like the first person I think to ever use like Google.

• 3:08:46Ara Kharazian?

  Oh, were you a door to door census taker?

• 3:08:48John Coogan?

  I was.

• 3:08:49Jordi Hays?

  No, he quickly worked his way up.

• 3:08:51John Coogan?

  So I was a manager of a unit that would re-interview people to make sure that the door to door census takers weren't like lying.

• 3:08:59Ara Kharazian?

  Oh, wow.

• 3:09:00John Coogan?

  Because if you're a door to door census taker, you get paid 20 bucks an hour, you just go up and you're say, I have to walk to all these doors and say, I saw three people, I saw four people, or but you could just write that and then just turn that in and not do the work. And so we would go reality check all the day.

• 3:09:13Jordi Hays?

  John was also, what, 20 at the 20 at the time managing a team of hundreds?

• 3:09:18John Coogan?

  It was a big team and they were all older than me. It was very crazy.

• 3:09:22Ara Kharazian?

  I want every tech person listening to recognize the value of government data and the checks that it always goes through.

• 3:09:27John Coogan?

  Yeah.

• 3:09:28Ara Kharazian?

  And and the great work that you did.

• 3:09:29John Coogan?

  There's some good stuff.

• 3:09:30Ara Kharazian?

  In your early career.

• 3:09:31John Coogan?

  Yeah, it was a lot of fun. Anyway, thank you so much for coming on the show.

• 3:09:34Jordi Hays?

  Great to, great to have you here.

• 3:09:36John Coogan?

  Always great. We'll wind down the show.

• 3:09:39Ara Kharazian?

  Thank you.

• 3:09:39John Coogan?

  Thank you so much.

• 3:09:40Jordi Hays?

  Find you in a second.

• 3:09:40John Coogan?

  And with that, we will conclude today's show. We will be back tomorrow at 11 a.m. Pacific, sharp on the dot, hopefully earlier. Is there anything in the timeline that we need to go through before we get out of here, Jordy?

• 3:09:55Jordi Hays?

  Let's see.

• 3:09:57John Coogan?

  We didn't even talk about CIA. We are officially signed with CIA. We went Hollywood mode. That's very exciting.

• 3:10:03Jordi Hays?

  Yeah, very, very excited.

• 3:10:05John Coogan?

  We're pleased to be partnered with them. We put up a trading card.

• 3:10:08Jordi Hays?

  CIA team.

• 3:10:10John Coogan?

  Yes.

• 3:10:11Jordi Hays?

  They're going to be helping us navigate.

• 3:10:15John Coogan?

  Yeah.

• 3:10:16Jordi Hays?

  The entertainment landscape.

• 3:10:17John Coogan?

  Yeah.

• 3:10:18Jordi Hays?

  Very excited.

• 3:10:19John Coogan?

  Yeah, we went down, we took some headshots at CIA HQ. Also, you know, I like to think of

• 3:10:25Jordi Hays?

  We had to make them a little goofy.

• 3:10:26John Coogan?

  The Creative Artists Agency, sort of the anthropic of agencies. Do you know the lore? Did you actually get up to speed on this? So Creative Artists, Creative Artists Agency was formed by five agents. They were at WME. They were at William Morris Agency in 1975. Who you got? There's a dinner. You got Michael Ovitz, Michael Rosenfeld, Ronald Meyer, and Roland Perkins and William Haber and they're at this dinner and they decide to create their own agency. What happens? They they're like, okay, we need some financing. We're gonna start a rival agency. We're leaving WME. We're starting CIA. What happens? Before they can get financing, they all get fired. They all get fired. Seriously, this is real. This is on the way.

• 3:11:08Jordi Hays?

  It's almost like a thinking machines dynamic.

• 3:11:10John Coogan?

  Yeah, no, it really is like AI lab talent wars all over again. And I don't know if they're the anthropic or the thinking machines, but maybe they're the open eye in this. But the the metaphor is extremely messy, but it's fun lore. Of course, CIA was incorporated in Delaware and had a $35,000 line of credit and a $21,000 bank loan. They rented a small office in Century City. And within a week, they sold a game show called Rhyme and Reason, The Little Rich Show, and The Jackson Five. An early plan was to form a medium sized full service agency, share proceeds equally and do without nameplates on doors or formal titles or individual client lists with guidelines like be a team player and return phone calls promptly. I like those rules.

• 3:11:53Jordi Hays?

  Great rules.

• 3:11:55John Coogan?

  We're very happy to be partnering with them. So.

• 3:11:56Jordi Hays?

  I gotta reread Who Is Michael Lovitz?

• 3:11:58John Coogan?

  For sure. For sure.

• 3:11:59Jordi Hays?

  Fantastic book.

• 3:12:00John Coogan?

  Absolute legend.

• 3:12:01Jordi Hays?

  And we, when we were at CIA last week.

• 3:12:03John Coogan?

  Yeah.

• 3:12:04Jordi Hays?

  Uh, we, or, or, yeah, last week, uh, we did confirm that the mailroom still exists.

• 3:12:09John Coogan?

  It does.

• 3:12:10Jordi Hays?

  Went down to the physical room. There was a lot of mail. There's a lot of people in it. They were moving the mail around. Apparently, they said we are the only, only talent to ever

• 3:12:19John Coogan?

  That was crazy. I think they tell everyone.

• 3:12:21Jordi Hays?

  They probably tell everyone.

• 3:12:23John Coogan?

  But there was a lot of aura in there. There was a lot of positive energy. You could see that the next generation is already cooking.

• 3:12:28Jordi Hays?

  Chomping at the bit.

• 3:12:29John Coogan?

  And, uh, yeah, getting ready to build. Anyway, thank you so much for tuning in. Is that the bomb? The bomb has been planted.

• 3:12:36Jordi Hays?

  Bomb has been planted.

• 3:12:37John Coogan?

  I love that.

• 3:12:37Jordi Hays?

  Uh, Mark Gurman says the Siri chatbot is known internally as Campos. It'll likely be powered by Gemini, running on Google's own GPUs and cloud infra.

• 3:12:44John Coogan?

  Okay.

• 3:12:44Jordi Hays?

  Meaning it's far more powerful than the one coming to Siri.

• 3:12:47John Coogan?

  I'm very excited for Gurman. He's coming back on the show. We're gonna get him in person. Leave us five stars on Apple Podcasts, Spotify. Sign up for our newsletter at tbpn.com.

• 3:12:55Jordi Hays?

  Meta's superintelligence lab delivers its first base models internally. Bosworth calls them very good.

• 3:13:00John Coogan?

  More headlines, more headlines.

• 3:13:02Jordi Hays?

  Tremendous amount of work to do for post-training.

• 3:13:05John Coogan?

  Anyway, thank you so much for tuning in. We will see you tomorrow at 11 a.m. sharp.

• 3:13:09Jordi Hays?

  Cheers.

• 3:13:09John Coogan?

  Goodbye.