Masa's Epic Rise, New AI Paradigm, The Drone Race, $MSFT Earnings, Evolution of the Tech Bro

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

• 0:00John Coogan?

  Welcome to Technology Brothers, the most profitable podcast in the world. Let's kick it off with a quote from David Senra. He is quoting sage advice from Lee Liu, Charlie Munger's favorite investor. And he says, "You can compound knowledge faster than money. If you truly love this game, I would suggest that you don't take shortcuts. It might take longer, but it's more rewarding." That's what we're trying to do today, compounding knowledge.

• 0:23Jordi Hays?

  Let's go. More importantly than Lee Liu, David Senra is not feeling super well right now. He's got a little bit of a cold.

• 0:30John Coogan?

  Send him a nice comment.

• 0:31Jordi Hays?

  Send him a DM or a comment and say, "Heard the Technology Brothers told me you were sick. I hope you feel better."

• 0:37John Coogan?

  Hope you feel better.

• 0:38Jordi Hays?

  And let's get him back in action. The RSS feed needs him at the top of his game.

• 0:43John Coogan?

  Desperately.

• 0:44Jordi Hays?

  Even though David on a sick day is better than your favorite, you know, your next favorite podcaster on their, you know, best day.

• 0:50John Coogan?

  Yep.

• 0:51Jordi Hays?

  We still need him back in business.

• 0:53John Coogan?

  Speaking of next favorite podcasters, we got David Sacks here from the All In Podcast. He still has the All In badge. He's monthly now, but he's still putting up huge numbers. He's got a great post here. He says, "New report by leading semiconductor analyst Dylan Patel, you know, we love Dylan Patel here on the show, shows that DeepSeek spent over $1 billion on its compute cluster. The widely reported $6 million number is highly misleading as it excludes CapEx and R and D, and at best describes..."

• 1:21Jordi Hays?

  Hey, we're gonna just ignore CapEx and R and D and every cost that you would normally...

• 1:28John Coogan?

  This is the most American thing you can do. We pioneered this. They even stole the idea of faking your financials from us.

• 1:35Jordi Hays?

  Sam Altman is actually pissed that they figured this out before him.

• 1:38John Coogan?

  This is just adjusted EBITDA. It all comes back to Masa and Adam Newman. He pioneered the community adjusted EBITDA. DeepSeek puts up a fantastic community adjusted EBITDA, ripping out CapEx, ripping out R and D.

• 1:52Jordi Hays?

  And just ripping the American markets.

• 1:54John Coogan?

  I mean, that like, you know, you do take CapEx and R and D out of...

• 1:57Jordi Hays?

  Psychological warfare.

• 1:59John Coogan?

  That's a point, right? Yeah. And, and at best describes the cost of the final training run only. And so today we have the semi-analysis post here. Deep seek debates Chinese leadership on costs, true training costs, closed model margins impacts. H100 prices soaring subsidized inference pricing export controls MLA. And so if you're not already subscribed to semi-analysis, you gotta do it, folks. You gotta do it. It's one of the most embarrassing things that can happen to you in Silicon Valley. Getting caught looking at a, at a, at a semi-analysis paywall. That's the way to get just kicked off a board these days. Yeah, disastrous. What were you saying?

• 2:38Jordi Hays?

  Yeah. If you see a VC out in public, walk up to them, say, pull up semi-analysis right now. And if they hit the paywall, it's just very, very negative signal.

• 2:47John Coogan?

  Say, oh, oh, so you're not raising the next round, like you're, you're retiring?

• 2:50Jordi Hays?

  Yeah.

• 2:51John Coogan?

  Cool. Enjoy Aspen.

• 2:52Jordi Hays?

  Yeah, yeah.

• 2:53John Coogan?

  I hope you picked out some good stuff. So Dylan Patel writes, the deep seek narrative takes the world by storm. For the last week, deep seek has been the only topic that anyone in the world wants to talk about. Basically true. Deep seeks daily traffic is now much higher than Claude perplexity. And even Google's Gemini, which is crazy, but it makes sense.

• 3:11Jordi Hays?

  But is that the Chinese market?

• 3:13John Coogan?

  No, no, no, no. I think in America because the, the, the, the traffic stats are always aggregated by American like tracking pixels. Okay. But Gemini is super embarrassing because it's a Google product. They should be stuffing it everywhere. But it's so hard to get to, as we talked about before. But close watchers of the space, this is not exactly new news. We have been talking about deep seek for months. The company is not new, but the obsessive hype is semi-analysis has long maintained that deep seek is extremely talented. And the broader public in the United States has not cared. When the world finally paid attention, it did so in an obsessive hype cycle that doesn't reflect reality. Classic Americans. We get pumped.

• 3:50Jordi Hays?

  Love it.

• 3:51John Coogan?

  We go to the moon.

• 3:51Jordi Hays?

  We get fired up.

• 3:52John Coogan?

  And then we crash. And sometimes

• 3:53Jordi Hays?

  And we forget how to go to the moon for a few decades.

• 3:55John Coogan?

  Yeah, sometimes you're the world

• 3:56Jordi Hays?

  And then we run it back.

• 3:57John Coogan?

  Yeah, we run it back.

• 3:58Jordi Hays?

  Mazda style.

• 3:58John Coogan?

  Yeah, sometimes you're the world's richest man and then you lose 90% of your money. It happens.

• 4:04Jordi Hays?

  We'll get to that later.

• 4:05John Coogan?

  Very American. We want to highlight the narrative has flipped the last month when scaling laws were broken. We dispelled this myth. Now algorithmic improvement is too fast and this too is somehow bad for Nvidia and GPUs. The narrative now is that DeepSeek is so efficient that we don't need more compute. Jevon's paradox is closer to reality. The models have already induced demand with tangible effects to H100 and H200 pricing. So you can just go look at the spot market for renting these GPUs and you can see Jevon's paradox in action today. And so it's a really strong market signal.

• 4:38Jordi Hays?

  Yeah, and Ram saw this with

• 4:40John Coogan?

  Oh, yeah, that's right.

• 4:41Jordi Hays?

  Their data, right? As the cost per token drop, the actual demand for them increased, spending on them increased substantially.

• 4:48John Coogan?

  Yep. And so high flyer is the name. No, they're a Chinese hedge fund and they started using AI in trading and they invested in 10,000 A100 GPUs in 2021. This is before the chip ban. They didn't do anything. Everything was above board, but they got a big cluster.

• 5:02Jordi Hays?

  I wonder how many trips to Singapore they've taken.

• 5:05John Coogan?

  Since then?

• 5:05Jordi Hays?

  Yeah.

• 5:06John Coogan?

  Well, that's the thing is that they might not have needed to because they just, they just built up so, such a huge cluster. But it goes on to say they spent over half a billion dollars on GPUs with estimates pointing to 50,000 hopper GPUs across variations. So there's the H20, the H800, which is the nerfed one with that memory bandwidth, which they got around, by the way. And then the H100, which they can still get through the Singapore loophole and a bunch of other places. You can buy, I think, 1,000 or 2,000 at a time. And so they, there is an interesting angle here, which is that they truly do have goaded engineers on the team.

• 5:43Jordi Hays?

  Yeah.

• 5:43John Coogan?

  Omega cracked, I think, was the, the, the term Dylan Patel used. They have a really crazy talent strategy. They aggressively recruit top Chinese university students, offering salaries over 1.3 million dollars. And I assume that's per year. Oh, per month. Yeah, I think it's per year, but in, in America, some people are making that per month.

• 6:03Jordi Hays?

  Yep.

• 6:03John Coogan?

  Got to get your money up. With flexible roles and unfettered GPU access, staff count is 150 and rapidly growing. And so they have, uh, there's an interesting kind of like, uh, counter narrative to the whole like 996, grind it out, work really hard. They are much more like a research lab where it's just kind of people hanging out, trying stuff. There's really like, you know, open minded, try whatever you want. Don't worry about cost, just run it. And it's, and it's produced remarkable results. It's more of an American style.

• 6:33Jordi Hays?

  And there had been some pushback because, uh, from, from folks on the DEI side, just because there was no non-Chinese employees.

• 6:41John Coogan?

  Yeah, I think.

• 6:42Jordi Hays?

  But they seem to have made that work.

• 6:43John Coogan?

  Yeah, yeah. It's, uh, we'll see, we'll see what happens. Maybe there'll be some pushback.

• 6:48Jordi Hays?

  I expect the New York Times to come after them pretty hard.

• 6:51John Coogan?

  Yeah, I would imagine Taylor Wren's is writing something right now.

• 6:53Jordi Hays?

  Yeah.

• 6:54John Coogan?

  So in terms of server CapEx, it's estimated at 1.6 billion plus almost a billion in operational costs.

• 7:03John Coogan?

  There's some estimates here, 10,000 H800s, 10,000 H100s with large orders of H20s in progress. H800 has the same compute as the H800, but less network bandwidth. The misleading 6 million figure was widely circulated as the cost of V3, but that doesn't include R and D, hardware depreciation, uh, repeated experiments. Actual total spend is far higher, but at the same time.

• 7:25Jordi Hays?

  Right, and just to break it down, R and D is the, is the cost that they're spending on their team, which is undoubtedly one of, you know, in the, like, I would imagine in the billions of dollars a year.

• 7:37John Coogan?

  Yeah.

• 7:37Jordi Hays?

  Based around.

• 7:38John Coogan?

  I mean, they had 944 million dollars in operational costs. So yeah, that's, the OpEx is probably the, mostly is R and D and salaries. They have 150 people making a million dollars a year. And so right there, that's 150 million dollars.

• 7:51Jordi Hays?

  That we know of. They also.

• 7:53John Coogan?

  Yeah.

• 7:53Jordi Hays?

  I have been aggressively lying and now, and now the truth is coming out a little bit, but we still don't know the full truth.

• 7:59John Coogan?

  Yep. I, I, I think this is probably correct. I, I'm, I'm inclined.

• 8:04Jordi Hays?

  This feels correct and believable.

• 8:06John Coogan?

  Yeah. And so it's easy to lean into this and be like, uh, you know, Dylan Patel is saying it's not, it's not five million or six million. It's actually closer to 500 million or a billion. And it's easy to be like, no, it's even higher. It's 50 billion. And it's like, probably not that high, but, um, but it is, it is interesting. And so in terms of model performance, DeepSeek V3 is the base model while R1 is the reasoning model. We've been through this.

• 8:29Jordi Hays?

  Yeah.

• 8:30John Coogan?

  Uh, and they have a couple genuine innovations here. So these are the things that you need to see. These are the buzzwords that are going to be going out in the AI, you know, influencer space.

• 8:39Jordi Hays?

  Yeah. So this weekend, start sprinkling them into conversations at home.

• 8:43John Coogan?

  Yep.

• 8:43Jordi Hays?

  They may, they probably won't land, but you'll sound smart. And then come Monday, you'll be able to just sprinkle them in the workplace and really start, you know, working them into the.

• 8:52John Coogan?

  Yeah. You gotta let people know that you, you use these words so frequently. You gotta use the abbreviation. So multi-token prediction, MTP.

• 9:00Jordi Hays?

  M O E.

• 9:01John Coogan?

  Tokes.

• 9:01Jordi Hays?

  Tokes.

• 9:01John Coogan?

  Tokes. Multi-tokes prediction.

• 9:03Jordi Hays?

  Multi-tokes, mixture of experts. Just call these PERTs. Specialized sub-networks, quote unquote, experts managed by advanced gating networks. And you could say, oh yeah, my, my PERTs are gated.

• 9:17John Coogan?

  I mean, the funny thing is that.

• 9:19Jordi Hays?

  And real ones will know exactly what you mean.

• 9:21John Coogan?

  Yeah.

• 9:22Jordi Hays?

  And so it's a good way to filter out who's, who's LARPing and who's, who's really, you know, at the, at the forefront of, of these broader trends.

• 9:30John Coogan?

  Yeah. I mean, like the, like mixture of experts was, was described in detail by George Hots when GPT-4 dropped. Uh, and he was saying that there were some hardware limitations to how large you could scale the models. And so they were effectively training six or 20 sub-models and then wiring them all together with this mixture of experts thing. And so I've heard that term before, like outside of this. So that's not entirely new.

• 9:57Jordi Hays?

  Too much credit.

• 9:57John Coogan?

  But, but it does seem like combining all of these are what allowed them to, to, to create a great model. Uh, and then multi-head latent attention, MLA. You're going to be hearing a lot about that drastically reduces KV cache memory 93.3% less slashing inference costs and that's obviously very important. And so at this point, V3 is reportedly passes GPT-4O from May 2024, although AI evolves fast and many new models have also improved drastically since. And there's this reasoning shift going on where post-training synthetic data like RL is getting cheaper than giant pre-training runs letting R1 click quickly match others like O1. Open weights advantage, DeepSeek is now considered

• 10:39John Coogan?

  the single best open weights lab beating out Meta's Llama and Mistral, although Zuck had a few things to say about that. He claims that Llama4 is going to blow them out of the water and that he's still investing in CapEx.

• 10:52Jordi Hays?

  And Zuck loves to deliver.

• 10:55John Coogan?

  Yep.

• 10:56Jordi Hays?

  He's done it many, many times. So that feels believable as well.

• 11:00John Coogan?

  And so.

• 11:01Jordi Hays?

  He kind of has to too, to save face.

• 11:04John Coogan?

  Yeah.

• 11:04Jordi Hays?

  He's got to drop, drop something like truly competitive.

• 11:07John Coogan?

  Yeah.

• 11:08Jordi Hays?

  Not, not just, oh, great. You have distribution.

• 11:10John Coogan?

  Yep.

• 11:11Jordi Hays?

  You'll get users for it, but it's not best in class with the amount that he's spending, which is something like 60 billion.

• 11:17John Coogan?

  Yep.

• 11:17Jordi Hays?

  A year. He's got to show results as well as the meta executives that are all sitting there making 5 million plus a year.

• 11:26John Coogan?

  Yeah.

• 11:26Jordi Hays?

  And facing that pressure internally to perform.

• 11:30John Coogan?

  Yeah. I mean, people, you got to go back in the timeline when Meta dropped the first Llama model because I remember the exact same hype cycle happening where people were really rooting against Sam for a variety of reasons and people were rooting for Zuck for a variety of reasons because he was like on this GigaChad arc. And there was this whole, this whole narrative of like, oh, Zuck, it would be a shame if I destroyed your entire company. Like OpenAI is going to zero now because Llama's out there and it's free and you can just inference it. And then I remember there was a Rune tweet at the time saying, Like, have you talked to that thing? Like, it's not that good. Like, he was kind of playing like defense.

• 12:09John Coogan?

  Obviously, it got better. And at this point, it's it's pretty good. But it had the same narrative as like, as like, oh, if there's an open source model, it's game over for the closed source models. And that didn't really play out because there was obviously the app layer and then all the reasoning.

• 12:22Jordi Hays?

  And yeah, OpenAI is clearly not just a model company. They're shipping products against against the underlying model.

• 12:30John Coogan?

  And they do seem to be able to stay six months ahead or so. So, you know, V3 surpasses G4, GPT-4O. But GPT-4O is almost a year old now, May 2024.

• 12:42Jordi Hays?

  And it's crazy already despite the the mindshare dominance among outside of Teapot.

• 12:50John Coogan?

  Yep.

• 12:51Jordi Hays?

  Is insane with ChatGPT.

• 12:53John Coogan?

  Totally.

• 12:53Jordi Hays?

  Like, I talked to a founder yesterday, and she's like, it's acting as a co-founder for me. And I'm like, thinking out loud, talking to it all day long about what I'm building.

• 13:02John Coogan?

  Yep.

• 13:02Jordi Hays?

  And yeah, she could go and use, you know, Llama or any of these alternative products. And it's just, for some reason, it's not getting traction in that same way.

• 13:12John Coogan?

  Yeah. And so let's let's break down the direct comparison between R1 and O1, DeepSeek's model versus ChatGPT. Again, I think a lot of the narrative of of DeepSeek just killed OpenAI was driven by the fact that it was free. It was free. Yeah, exactly. And so a lot of people hadn't upgraded to the $200 model, O1 Pro. And so they were just like, well, I'm not gonna spend $200. That's too much.

• 13:38Jordi Hays?

  It was the cost of the training run that everybody saw is really bearish, because US companies are spending, you know, tens of billions of dollars.

• 13:43John Coogan?

  And then there's the China dynamic.

• 13:45Jordi Hays?

  And then there's the then there was the concern around, you know, a lot of people just trading against the news, not really trading against Jevon's paradox, right?

• 13:57Jordi Hays?

  And then there's the cost of like, okay, if you introduce a free product that's on that's better than the free product of your competitor, what happens?

• 14:05John Coogan?

  Yep.

• 14:06Jordi Hays?

  But consumer behavior is not always entirely rational.

• 14:10John Coogan?

  Yep.

• 14:10Jordi Hays?

  And especially in the context, I just don't see, it's still hard for me to see DeepSeek, you know, becoming truly sticky and dominant, right?

• 14:21John Coogan?

  Totally.

• 14:22Jordi Hays?

  Cause ChatGPT among consumers is a very loved product.

• 14:25John Coogan?

  Yeah.

• 14:25Jordi Hays?

  And you can't underestimate consumer love because so many people have had magical experiences. If you go, hey, you can use DeepSeek and it's better, but they're like, well, I already love, I already love ChatGPT.

• 14:39John Coogan?

  Exactly.

• 14:40Jordi Hays?

  It does exactly what I want.

• 14:41John Coogan?

  And it's learned a bit about me, some of my data's in there already. Oh, and also there's a little share button. So when I generate something with ChatGPT, I can share the link that onboards you.

• 14:51Jordi Hays?

  The value for us, it's like, okay, for $200 a month.

• 14:53John Coogan?

  Yep.

• 14:54Jordi Hays?

  We would happily for the same service, pay two grand a month.

• 14:57John Coogan?

  Yep.

• 14:57Jordi Hays?

  So by telling us that we can get something that's comparable for free.

• 15:01John Coogan?

  It's not.

• 15:02Jordi Hays?

  The value trade off isn't like not that significant.

• 15:04John Coogan?

  I only want the best, most cutting edge model that has the most features at any given time, but a lot of people aren't, aren't in that boat. A lot of people do just want whatever's free. So is R1's performance up to par with O1? I want to read this pretty much this whole paragraph here. On the other hand, R1 is a table is, is able to achieve results comparable to O1 and O1 was only announced in September. How has DeepSeek been able to catch up so fast? The answer is that reasoning is a new paradigm with faster iteration speeds and lower hanging fruit with meaningful gains for smaller amounts of compute than the previous paradigm. As outlined in our scaling laws report, the previous paradigm depended on pre-training and that is becoming both more expensive and difficult to achieve robust gains with.

• 15:47John Coogan?

  The new paradigm focused on reasoning capabilities through synthetic generation and RL and post-training on an existing model allows for quicker gains with a lower price. The lower barrier to entry, combined with easy optimization, meant that DeepSeek was able to replicate O1 methods quicker than usual. As players figure out how to scale more in this new paradigm, we expect the time gap between matching capabilities to increase.

• 16:10John Coogan?

  Note that the R1 paper makes no mention of the compute used. This is not an accident. A significant amount of compute is not, is needed to generate synthetic data for post-training R1, not to mention RL. R1 is a very good model. We are not disputing this and catching up to the reasoning edge this quickly is objectively impressive. The fact that DeepSeek is Chinese and caught up with less resources makes it doubly impressive. But some of the benchmarks R1 mentions are also misleading. Comparing R1 to O1 is tricky because R1 specifically doesn't mention benchmarks that they are not leading in. And while R1 matches in reasoning performance, it is not a clear winner in every metric. And in many cases, it's worse than O1.

• 16:50Jordi Hays?

  This was your actual user experience where you were trying it and you're seeing, okay, this output is not on par with what I get from ChatGPT.

• 16:59John Coogan?

  And, and my prompt was not something that's baked into some math eval or physics test. It was just, can you summarize this book in 5,000 words? Did you give me 5,000 words and was it, was it factually accurate or not? And O1 Pro gave me exactly 5,000 words, a little bit more, it was great. And DeepSea gave me 1,000 words. And it's like, what, how, how am I?

• 17:21Jordi Hays?

  You failed the test.

• 17:21John Coogan?

  It failed, it failed my prompt.

• 17:23Jordi Hays?

  A functional, yeah, functional test.

• 17:25John Coogan?

  Exactly. And then, and then add to this.

• 17:27Jordi Hays?

  This is again, from a consumer standpoint, you're not going to notice these small intricacies in terms of, you know, having the model, you know, run at 50 physics problems because you wouldn't necessarily, wouldn't have been able to get any of them yourself, right? So it's almost irrelevant.

• 17:42John Coogan?

  Yep.

• 17:42Jordi Hays?

  What matters is actually the output, which is what people want and what they're paying for.

• 17:48John Coogan?

  Yep.

• 17:49Jordi Hays?

  Around specific problems that they need the model for.

• 17:51John Coogan?

  Yeah. And so, and this doesn't even include O3, the latest model from OpenAI that hasn't been fully released yet. O3 has significantly higher capabilities than both R1 and/or O1. In fact, OpenAI recently shared O3's results and the benchmark scaling is vertical. Deep learning has hit a wall, but a different kind. And so then there's also the question of Googles.

• 18:13Jordi Hays?

  Great, great line from Dylan.

• 18:16John Coogan?

  Google's reasoning wall.

• 18:17Jordi Hays?

  Looks like a wall, by the way.

• 18:18John Coogan?

  Yeah, it's completely up and to the right. It's fantastic. But it's on R K G I, Sui Bench and Frontier Math, Advanced Mathematics, like, things that most consumers might not even care about the benchmarks on, but are potentially good proxies. Because a model that can do insanely advanced mathematics might be better at, you know, generating a recipe. And so, Google jumped into the game to very little fanfare. They did not really break through other.

• 18:45Jordi Hays?

  Really struggling on the marketing front.

• 18:47John Coogan?

  Totally. And so, while there is a frenzy of hype for R1, a $2.5 trillion US company released a reasoning model a month before for cheaper, Google's Gemini Flash 2.0 Thinking. What a fantastic name, guys. I don't know why it didn't take off. You got 12 different words that no one knows what they mean.

• 19:06Jordi Hays?

  It's possible that Clippy is like, no longer able to be trademarked. So, Google should just take Clippy for its next model.

• 19:15John Coogan?

  So, the model is available. It's considerably cheaper than R1, even with much larger context length for the model through the API. And again, I'm signed up for Gemini Advanced Pro Plus Plan. I pay for it. I have no idea if I have access to Flash Thinking 2.0, and I have no idea how I even go and find it. If I Google it, I'm gonna get the paper, I'm gonna get some tweet, like, it's so hard to access Google's models. It's so embarrassing for them.

• 19:41John Coogan?

  Get it together, guys. On reported benchmarks, Flash 2.0 Thinking beats R1. I remember Peter had a fantastic, Peter Thiel had a fantastic, like, distillation of what's going on in AI, where basically, all the different AI labs are, you can think about them as like lemonade stands, and they're all obsessed with perfecting the formula for lemonade, and none of them are thinking about where to actually place the lemonade stand. When you're running a lemonade stand, all that matters is that you're on the busiest corner. Location, location, location.

• 20:13Jordi Hays?

  Yeah, yeah, yeah.

• 20:14John Coogan?

  And that speaks to distribution.

• 20:15Jordi Hays?

  Not even the corner, what neighborhood you're in.

• 20:17John Coogan?

  Exactly, exactly. And so, you can imagine that at Google, they're like, Gemini Flash Thinking 2.0, we beat this benchmark, it's amazing, everyone's gonna love it. It's like, that's not how products work, guys. That's just not, like, no one is, like, I'm gonna go figure it out at some point, but it's gonna take me 30 minutes to find this product and figure out that I'm using the right model.

• 20:38Jordi Hays?

  Yeah, again, you don't. You have access to OpenAI's reasoning models, so you can just use that.

• 20:43John Coogan?

  Yeah, exactly.

• 20:44Jordi Hays?

  It's easier to access.

• 20:44John Coogan?

  Exactly.

• 20:45Jordi Hays?

  Your data is already there.

• 20:46John Coogan?

  Yeah. And then now in every single Google product, there's some sort of pop up saying like, hey, do you want to use Gemini for this? Do you want Gemini to work on summarize your emails? And I'm like, well, which Gemini? You guys have 17 different products and like, how is it going to integrate?

• 20:59Jordi Hays?

  I know, I'm, we're dealing with this email like related bug right now.

• 21:03John Coogan?

  Yeah.

• 21:03Jordi Hays?

  For TV, uh, related to a new domain.

• 21:06John Coogan?

  Okay.

• 21:07Jordi Hays?

  And I keep, I, I, everything is set up properly, but it's not working.

• 21:12John Coogan?

  Yeah.

• 21:13Jordi Hays?

  And they just keep sending me the pop ups of Gemini and I'm like, you know.

• 21:17John Coogan?

  You can't get the basic like, like level one.

• 21:19Jordi Hays?

  Maybe I should actually try it with Gemini.

• 21:21John Coogan?

  Hey Gemini, fix this.

• 21:22Jordi Hays?

  Hey, can you fix this?

• 21:23John Coogan?

  Fix this.

• 21:24Jordi Hays?

  Yeah.

• 21:25John Coogan?

  And so on reported benchmarks, flash thinking 2.0 beats R1, though benchmarks do not tell the whole story. Google only released three benchmarks, so it's still an incomplete picture. We think Google's model is robust, standing up to R1 in many ways, but receiving none of the hype. This could be because of Google's lackluster go to market strategy and poor user experience. But also R1 is a Chinese surprise, which is

• 21:47Jordi Hays?

  Nobody expected.

• 21:49John Coogan?

  Huge advantage. To be clear, none of this distracts from, uh, none of this distracts from DeepSeek's remarkable achievements. DeepSeek's structure as a fast moving, well-funded, smart and focused startup is why it's beating meta giants like Meta in reasoning and releasing a reasoning model. And they did beat Meta, like Lama 4 still in training, they haven't released a reasoning model. And it certainly would be cool if this had just baked itself into.

• 22:08Jordi Hays?

  At least Zuck is breathing a sigh of relief, knowing that they actually spent

• 22:13John Coogan?

  The money.

• 22:13Jordi Hays?

  However, many billions getting this model out.

• 22:16John Coogan?

  Oh, yeah.

• 22:16Jordi Hays?

  He's like, okay, we're not totally crazy.

• 22:18John Coogan?

  No, no, totally. And I think that's why the stock popped and earnings, I mean, earnings were crazy, but I think, I think everyone was very excited about like his, his positioning on the AI infrastructure investment. And so DeepSeek has cracked the code and unlocked innovation that leading labs have not been able to yet achieve. We expect that any published DeepSeek improvement will be copied by Western labs almost immediately. What are these improvements? We, we covered a little bit of these. These training pre and post, V3 utilizes multi-token prediction at a scale not seen before. These are added attention modules which predict the next few tokens as opposed to a singular token. And so you can imagine, you know, the old version of autocomplete on the iPhone, it would

• 23:02John Coogan?

  say, you know, would you like to go to, and it would have like breakfast or lunch pop up. But now you, but you know, you see some of these models where it's predicting three or four words. It's kind of like that, but baked into the model at a very, very low level. So it's just more efficient because it says, oh yeah, after this sentence, usually there's just this, you know, three words that go together. And, and all of those go together. The, there are added considerations like doing FP8 accuracy and training. We talked about this. Leading labs have been doing FP8 training for some time. So that's a little bit overhyped. There's a lot of things where, where people just went through the DeepSeek paper and everything that they were doing, they assumed was novel. And they were like, oh my God, they're, they're, they're, they're using data to train it. Like no one thought of that.

• 23:47John Coogan?

  And it's like, no, everyone's using data. Everyone's scraping the web. Everyone's, you know, like running it on GPUs.

• 23:53Jordi Hays?

  And the synthetic data side as well.

• 23:55John Coogan?

  Yeah. And so.

• 23:56Jordi Hays?

  And I don't know if this is going to come up later in the show, but some lab at Cal was able to generate a reasoning model with 450 bucks.

• 24:05John Coogan?

  Yeah, I love that.

• 24:06Jordi Hays?

  So anybody working on models out there, we're good for our 450.

• 24:10John Coogan?

  Yeah. So rather than decreasing overall investment mixture of experts, which is, which is where one large model is comprised of many smaller models that specialize in different things. And this is an emergent behavior. Historically, MOE models have faced struggles about how to determine which token goes to which sub-model or expert. DeepSeek implemented a gating network that routed tokens to the right expert in a balanced way that did not detract from model performance. So basically you're getting like, instead of activating the entire model, which is very expensive, requires a lot of energy, you're just activating like one little section of the brain. But despite concerns that MOE efficiency gains might reduce investment, Dario over

• 24:55John Coogan?

  at Anthropic points out that the economic benefits of more capable AI models are so substantial that any cost savings are quickly reinvested into building even larger models. This is Jeff and's paradox. Rather than decreasing overall investment, MOE's improved efficiency will accelerate AI scaling efforts. The companies are laser focused on scaling models to more compute and making them more efficient algorithmically. In terms of R1, it benefited immensely from having a robust base model, V3. This is partially because of reinforcement learning. There were two focuses here: formatting, ensuring that it provides a coherent output, and helpfulness and harmfulness to ensure the model is useful. As mentioned in the Scaling Laws article, this is what happened with O1. Note that the R1 paper, no compute is mentioned. This is because mentioning

• 25:40John Coogan?

  how much compute was used would show that they have far more GPUs than their narrative suggests.

• 25:46Jordi Hays?

  And Nvidia's wouldn't have had billions and hundreds of billions wiped out of its market cap.

• 25:51John Coogan?

  Yep. And Dylan also says that additionally, a portion of the data DeepSeek used seems to be data from OpenAI's models, which of course makes it easier because you're just cloning the outputs. And so you're optimizing against like a very set benchmark. If you want a GPT-4 model and you're training on all GPT-4 data or a lot of GPT-4 data, you're going to get a lot closer to GPT-4 pretty quickly.

• 26:13Jordi Hays?

  Which again is interesting because they would have had to spend a ton of money with OpenAI, right? Which we've talked about before, the same thing that TikTok did to scale. They just spent billions on user acquisition on Snapchat and Instagram. And it's this weird dilemma that the other platforms get in where they're like, well, we'll take the billions now. And even though we're going to lose out on, you know, potentially billions later.

• 26:37John Coogan?

  Yep. And so he concludes with a couple of different takeaways. DeepSeek's cut rate pricing may be zero or negative margin, partially to gain market share and investor attention. And then he highlights Jevon's paradox again, talking about the AI race is similar to semiconductor fabrication, cutting-edge nodes, command premium margins, everything older quickly commoditizes. And that's like the story of TSMC versus Intel. This dynamic spurs an endless cycle of scaling up new models and hardware investment benefiting chip providers like Nvidia. There are export restrictions. H100s are fully banned. They've

• 27:18John Coogan?

  been replaced by H800s. H800s, I think, were banned, and then the H20 was introduced. More stringent US bans may come. It depends. We haven't seen exactly how the government will react to this.

• 27:31Jordi Hays?

  It's a really funny dynamic that...

• 27:35Jordi Hays?

  The our government doesn't want Nvidia selling them great chips.

• 27:39John Coogan?

  Yep.

• 27:39Jordi Hays?

  So why is it okay with them selling them any chips at all?

• 27:43John Coogan?

  Yep.

• 27:43Jordi Hays?

  And what, you know, assuming that they can.

• 27:46John Coogan?

  I mean, the steel man here is that if you're Nvidia and you're Jensen Wong and you've been building this company that you control and own for 30 years and for 29 of those years, the government has been telling you, go global. We want you to be as big as possible. Get those tax revenues up, hire people. It's cool. These are allies. The internet's going to make China democracy and they're part of the World Trade Organization. So absolutely go manufacture over there, do business with them. We love this. We, you know, we'll put you in touch with the ambassador of China.

• 28:16Jordi Hays?

  I totally understand the Jensen Nvidia side.

• 28:19John Coogan?

  Like, that's kind of harsh.

• 28:20Jordi Hays?

  Yeah.

• 28:21John Coogan?

  And so unwinding that relationship.

• 28:24Jordi Hays?

  And it would, and if, and if Nvidia had a blanket ban on selling to China or any, any countries in close enough proximity to China that they can act as a proxy.

• 28:34John Coogan?

  Yep.

• 28:34Jordi Hays?

  It would destroy. I mean, it would, it would wipe potentially trillions out of the, out of the, out of the market.

• 28:41John Coogan?

  See, I might actually disagree with that because I, I think you're right that they wouldn't be as high of a stock, but there's an interesting dynamic where the best time to deleverage from China was when there's insane demand in America.

• 28:54Jordi Hays?

  Yeah.

• 28:54John Coogan?

  And that's what happened during the AI boom in 2023, 2024, where if there was ever a time to say, hey, we're going to pull back in China, it's when, it's when Elon Musk and, and Oracle and everyone is sitting down and being like, we will buy every single GPU can make.

• 29:08Jordi Hays?

  Yeah, yeah. So, so the alt man needs two, uh, he needs 2 million GPUs just in Apple, right?

• 29:14John Coogan?

  Yeah, exactly.

• 29:15Jordi Hays?

  That's, that's.

• 29:15John Coogan?

  He'll buy them all.

• 29:16Jordi Hays?

  Nvidia is going to produce 6 million total this year.

• 29:19John Coogan?

  Yep.

• 29:19Jordi Hays?

  Right? So just one guy is, could, could potentially be a third of. Nvidia's and he's not buying those all this year. It's going to be spread out over time.

• 29:28John Coogan?

  I need a, I need a steel hat to put on when I'm steel manning. Because again, the, the steel man here of why would Jensen not want to do that? Obviously, people have been like very critical of him not putting America first. But the flip side is if you, if you do say, okay, I'm only going to sell to these crazy American AI companies. And then there's a bubble and it pops. You are more fragile than if you have.

• 29:51Jordi Hays?

  Well, yeah, we're also not in a, it's not like the United States and China have declared war on each other. It's just this great power conflict that kind of moves along slowly and everybody tries to kind of.

• 30:01John Coogan?

  We're like not allies, not enemies.

• 30:03Jordi Hays?

  We're also dependent on so much. I mean.

• 30:05John Coogan?

  Totally. And so, uh, uh, this is an interesting stat. I didn't, I hadn't heard about this, but the Bank of China announced a one trillion yuan, 140 billion US dollar AI subsidy. Let's ring the size gong for China.

• 30:19Jordi Hays?

  The one T. Hey.

• 30:22John Coogan?

  Size is size.

• 30:23Jordi Hays?

  Size is size.

• 30:24John Coogan?

  Size is size.

• 30:24Jordi Hays?

  The size gong does, is, is it nationalistic in any way?

• 30:27John Coogan?

  Size gong rings for everyone.

• 30:28Jordi Hays?

  Yep. And if anything, we hope the, the ringing sound inspires one of our listeners to invest a trillion into something.

• 30:37John Coogan?

  Exactly. And so 140 billion subsidy, AI subsidy after meeting DeepSeek's founder. So the guy literally goes and pitches the government.

• 30:45Jordi Hays?

  This all seems very, very.

• 30:46John Coogan?

  You guys should put up 140 billion. And he's like, yeah.

• 30:48Jordi Hays?

  Conveniently timed, right?

• 30:50John Coogan?

  It's their Stargate.

• 30:51Jordi Hays?

  You have, yeah, you have, uh, Sam Altman gets Trump to do his press tour for him.

• 30:58Jordi Hays?

  Less than a week later, China meets with the DeepSeek founder and announces something very similar.

• 31:03John Coogan?

  Yep. But interestingly, this is the Bank of China putting up a subsidy of 140 billion. Trump hasn't put up anything for, other than just his name and, and just a, a, a couple of minutes in the, in the PR room.

• 31:16Jordi Hays?

  Sam or ifarm him.

• 31:17John Coogan?

  He or ifarm him. Uh, whereas the DeepSeek founder. Gold farmed him.

• 31:25John Coogan?

  So China has a goal of self reliance and advanced technologies, obviously, and this aligns with that. And so despite large GPU stocks, scaling to serve millions of new users is tough. Future export controls may starve them of advanced chips. And there's a big question about was this an aberration? Will they be able to keep up? A lot of that's predicated on can they can they either get around the export controls reliably at an order of magnitude larger scale? Or can they get SMIC and SME, their version of TSMC and ASML? Can they get those chips up and running and start making competitive GPUs internally? Because if they can do that, it's game over. Like, they could make a billion chips and with something like $140 billion of like demand.

• 32:05Jordi Hays?

  China is world class at copying.

• 32:06John Coogan?

  Totally. And that's all they have to do.

• 32:08Jordi Hays?

  And I don't even say that in a way to slight them, but that is historically what they've done over and over and over.

• 32:13John Coogan?

  Yeah. And they have ASML machines. They have TSMC machines.

• 32:18Jordi Hays?

  This is what entrepreneurs, entrepreneurs, you develop some hardware product or consumer product, you go to China, you see your factory. If you walk to the factory next door, they'd probably be producing your exact item.

• 32:30John Coogan?

  Totally.

• 32:30Jordi Hays?

  Almost a one for one.

• 32:31John Coogan?

  Yep.

• 32:32Jordi Hays?

  Within a year, if you're actually really selling well.

• 32:34John Coogan?

  Yep.

• 32:34Jordi Hays?

  So it's just ruthless. They're good at it. I'm sure they're going to have their own Nvidia TSMC.

• 32:38John Coogan?

  Yeah.

• 32:38Jordi Hays?

  We'll see how they do.

• 32:39John Coogan?

  Let's close with some of these conclusions. Efficiency does not mean reduced investment. This is Jevon's paradox. Cost savings from new architectures like mixture of experts spur more scaling, not less. Fast follower. Deep seek lags top labs, but closes gaps swiftly with new paradigm reasoning. Their open source stance accelerates industry wide progress.

• 33:02John Coogan?

  Frontier capability commands premiums, but deep seeks low pricing disrupts incumbents, potentially forcing big labs like OpenAI to innovate even faster. And we're seeing that, you know, there's going to be more pressure. Hey, release 03, get it on the free tier, get an ad product in there, do something to bring this to the masses. So you can cut, stem the bleeding of people installing the deep seek app. Long term outlook, hardware demand isn't going away. Quote, more advanced AI, more GPU spending, more scaling. Export controls will likely tighten, but we're going to need to see where this shakes out. I think Jacob Helberg might be on the team that's working on export controls and tech deals globally.

• 33:38Jordi Hays?

  We actually need a rack of GPUs on the set.

• 33:41John Coogan?

  Yep.

• 33:41Jordi Hays?

  I think we should get some H100s.

• 33:43John Coogan?

  Yeah.

• 33:44Jordi Hays?

  Replace that cache with some.

• 33:46John Coogan?

  A couple of GPUs.

• 33:47Jordi Hays?

  With a couple of GPUs, yeah.

• 33:49John Coogan?

  Yeah, great. And so we think the east versus west debate in AI models will continue, and the new paradigm is good for Nvidia. Very interesting. So fantastic analysis from Dylan Patel. Highly recommend subscribing to Semi Analysis if you haven't already. It is a great resource, and we love to see deep dives on the timeline.

• 34:12Jordi Hays?

  A great poster, too. Give him a follow. Follow him, DM him, the technology brother Semi.

• 34:18John Coogan?

  Exactly, exactly. Comment on his post. So let's go to Drone Horizons, a great piece in Pirate Wires, another outlet that you should definitely be subscribed to. This one by GB Rango, fantastic name.

• 34:33Jordi Hays?

  Great name.

• 34:34John Coogan?

  Pirate Wires says, Drone Horizons, our deep dive on how drones will change the future, not just in war, but in everything from construction, infrastructure, and interplanetary space. The widespread adoption of UAV technology, piggybacked on the inexorable AI surge, could significantly retool both international power relations and the daily lives of regular people in a manner that few understand. Today in Pirate Wires, GB Rango systematically outlines the trajectory of inevitable drone developments that are going to permeate every pore of society, from agriculture to medicine to policing and national security.

• 35:09Jordi Hays?

  And firefighting, which is particularly relevant to the last month we had here in LA.

• 35:15John Coogan?

  And so let's kick it off with GB Rango's lead, which is a little anecdote here. The stadium is a roar with 80,000 raucous attendees and casts a short shadow in the midday sun. In the distance, peppered specks rise from nests unseen before gathering over the horizon like iron filings in a magnetic field. Small payload drones, hundreds of them, race balefully forward. The orchestrated swarm twists and folds in hive-like unison as it approaches its target. In response, nearer to the stadium, another group of drones ascends in concert and rushes to meet its hostile.

• 35:54John Coogan?

  Counterpart. The confrontation is swift and casually anticlimactic with only a few citygoers caring to notice the whir of propellers or the hissing and buzzing of the interceptors high powered microwave pulses. The sky is clear once again, and the game goes on uninterrupted. The emergence and facile neutralization of drone threats is commonplace here in a potential future. This cross section of a shocking and interminant future and those to follow are meant to demonstrate and warn of the transformational nature of an imminent drone age shift.

• 36:26Jordi Hays?

  Dark.

• 36:28John Coogan?

  Pretty crazy, but I think this is one of those things where you see one side of the technology development and you don't realize that there is the flip side that's countering it just as aggressively. Like in 2000 or the, or the, you know, the 2000s, the 2010s, if every day you were reading articles about email spam.

• 36:51Jordi Hays?

  Yeah.

• 36:51John Coogan?

  And you had no knowledge about spam filtering and the fact that that was possible, you would be like, wow, why would I ever sign up for email? Like it's just going to get worse and worse and worse. But of course it's an arms race and there's anti-drone technology, which I think we'll talk about as well. And so I'm not quite as blackpilled as some people on this front.

• 37:09Jordi Hays?

  I also find it hard to imagine this future.

• 37:14Jordi Hays?

  If you put it in the context of how dissimilar would it be if somebody launches a hypersonic at a stadium of people and we launch, you know, some type of countermeasure and stop it, that would be national news. So I would hope we don't experience this future because, and, and, and in this illustration, the stadium doesn't even notice, right? But just very dark, but this is like the threat. So it's worth, you know, really paying attention to.

• 37:41John Coogan?

  And there are, so he breaks it into six or seven different sections. We'll give you a little tour of the article and you can go read the full post on Pirate Wires. Says an infrastructure and agriculture, infrastructure development will undergo drastic changes with the advent and ubiquitous drone of advanced and ubiquitous drone technology. Construction sites, sites strangely devoid of human laborers instead.

• 38:04John Coogan?

  By powerful heavy lift drones nimble inspector craft and bipedal robots will be more productive, efficient and safer than ever before. Gargantuan cranes with arms outstretched, fresh metal glinting through measured pivots rotate powerfully over the earth. He's such a good writer. This is why I love the style of writing. It just takes you on like this, this tour.

• 38:25Jordi Hays?

  Yeah, you can really visualize it.

• 38:27John Coogan?

  Yeah, it's like, it's really like pleasurable to read.

• 38:29Jordi Hays?

  Yeah, it's already, can you imagine the drones, you know, working this construction site, they run into an issue or they need some type of human intervention? And you're the human that's on call and you get a call from this nice sounding robot voice and they're like, hey bud, you mind stopping by the site for a few? We could really use a hand here. It's like a human voice. And then, uh, you know, hopefully after you finish as a human that the drones are nice enough to say, hey, thanks bud.

• 38:56John Coogan?

  Yeah.

• 38:56Jordi Hays?

  Uh, probably won't need you anymore today, but, uh, you know, appreciate you stopping by.

• 39:01John Coogan?

  Yeah.

• 39:01Jordi Hays?

  And, um, this is the flip right now. We tell, you know, we tell the models what to do.

• 39:06John Coogan?

  Yep.

• 39:06Jordi Hays?

  Eventually they'll, they'll tell us what to do.

• 39:08John Coogan?

  We are the APIs. But, uh, I mean, there is obviously there's like, there's the job displacement question, but the, the flip side is like, I think every, almost every single time a major skyscraper is built, there is a single digit death toll from workers just because it's so dangerous. And you put 10,000 people on a construction site for five years or something and like, things are going to go wrong. And so there is a pretty significant opportunity to reduce.

• 39:33Jordi Hays?

  Even in oil and gas, right?

• 39:35John Coogan?

  Yeah, totally.

• 39:36Jordi Hays?

  On these fracking, fracking.

• 39:37John Coogan?

  Yep.

• 39:37Jordi Hays?

  Every, every now and then a video will go, you know, super viral and it's, it's an active, you know, fracking site. And then just that kind of action that's going on where there's heavy machinery whipping around.

• 39:48John Coogan?

  Super dangerous.

• 39:49Jordi Hays?

  Yeah, it's just super dangerous. So.

• 39:51John Coogan?

  So he says, in the agriculture world, in the coming age, farms will not sleep. When the sun goes down, drones will work around the clock to protect crop yields and monitor livestock. Rustic family barns sitting bare on flat plains will look like nocturnal beehives with luminous agents approaching for payloads before dutifully buzzing back into the dark. These small flying machines will fit, will flit nonstop through thousands of crop road acres, addressing issues like pest treatment, disease and water shortage on the individual plant level. Very cool. And so

• 40:22Jordi Hays?

  We gotta get him to describe us.

• 40:24John Coogan?

  Yeah.

• 40:24Jordi Hays?

  Prepared for a podcast.

• 40:25John Coogan?

  What a great writer, seriously.

• 40:27Jordi Hays?

  John threw on his jacket.

• 40:28John Coogan?

  Yeah, and yeah, and this next, this next segment on emergency medical services was actually highlighted on Pirate Wires. Drone-delivered organs should be standard protocol for transplants. And he says, "Over 46,000 organ transplants were conducted in the United States in 2023. Quicker transport times are associated with better patient outcomes. And in the sort of major delay described above is not unheard of. In 2023, a pro Gaza ceasefire protest on the San Francisco Oakland Bay Bridge blocked all westbound traffic for four hours. Three UCSF organ transplant deliveries were significantly delayed, one of which had to be rerouted over the Golden Gate Bridge.

• 41:07John Coogan?

  But one transplant surgeon at UCSF noted that two other large transplant centers in the Bay Area, Stanford and CPMC, were probably suffering from the same issues as well. Now, while no known complications have been directly attributed to the protest, the proliferation of drone technology will completely eliminate the transport delay risk opposed."

• 41:26Jordi Hays?

  Yeah, I mean, a lot of this stuff, a lot of this stuff happens via helicopter now.

• 41:30John Coogan?

  Yeah.

• 41:30Jordi Hays?

  And there's even, there's companies like Blade that actually have a really, I think at one point, Blade's organ transplant business was bigger than their consumer business during, I think it was COVID.

• 41:41John Coogan?

  Wow.

• 41:41Jordi Hays?

  Might have that off, but um, yeah, this is actually a very big business already, but it's kind of funny to think about, you know, needing to fly an organ from one side of a city or county to another, and you just put it in a helicopter, like it's not the most efficient if you're just basically needing to transport the equivalent of like an ice chest.

• 41:59John Coogan?

  Yep, yep. Uh, he goes on to explain search and rescue maritime efforts, larger boats serving as basis of operation for small drone swarms that can expand radially outward and aid in the geographic process of elimination. Larger unmanned aircraft systems with multi-day endurance will work in concert with these teams to survey vast areas of open sea for survivors and identify points of interest. That just seems like a new capability.

• 42:22Jordi Hays?

  Yeah, and this happens now, you, you have a bunch of pilots that go up in their planes, and they take turns just taking, you know, basically running.

• 42:30John Coogan?

  Yep, there's some sort of like- Grid search they have to do, but it's a funny path. It's not just like what you have to do.

• 42:34Jordi Hays?

  And they have to, you have to be high up enough to get enough coverage, but in a world where you can send a thousand drones.

• 42:39John Coogan?

  You can be much lower.

• 42:39Jordi Hays?

  Almost instantly scan huge, huge surface area.

• 42:43John Coogan?

  This would have been useful during hurricanes Helene and Milton, both of which struck in the fall of 2024. And drones were pivotal in the preparation for and response to these disasters. He goes on to explain that drones will have an impact on firefighting, which I think we discussed previously.

• 42:59Jordi Hays?

  Yep.

• 43:00John Coogan?

  And in America, fire department use of drones is almost exclusively limited to the realms of surveillance and intelligence gathering. In the wake of the recent Los Angeles fires, which have reportedly resulted in the deaths of at least 24 people and wreaked over $250 billion of economic damage. This lack of progress. What?

• 43:16Jordi Hays?

  Two weeks ago was at 150 billion.

• 43:18John Coogan?

  So it's still climbing. Wow.

• 43:20Jordi Hays?

  Climbing. Yeah.

• 43:23John Coogan?

  Compounding this international delta is the fact that across all US public safety agencies, 90% of drones in use are designed and manufactured by DJI, a company that was recently added to the Department of Defense list of Chinese military companies. While that number is from a 2020 survey and steps are being taken to limit Chinese drone usage, the status quo remains largely unchanged. So he goes and just talk about foreign dominance and how they can, how drones will be effective in the military. Talks about regulation of drones and drone deliveries as well as policing in the state. And finally, national security and war. National security, of course, is a paramount, is of paramount relevance in the discussion of drones.

• 44:07John Coogan?

  The nature of war is changing faster than it has at any point since the post-World War II nuclear proliferation. And drones are one of the major cruxes of this change. It is essential that America not rely on China for any segment of the defense supply chain, let alone UAS design and manufacturing.

• 44:23Jordi Hays?

  Yeah, and this goes back, I posted a while back and it resonated. We needed a Stargate for domestic drone production.

• 44:29John Coogan?

  Yep.

• 44:30Jordi Hays?

  And the reason for this is that if we were in a conflict with China, they could produce presumably millions of drones a month and we can. Probably right now produce, I don't know if we like needed to turn it on and produce locally.

• 44:44John Coogan?

  Yep.

• 44:44Jordi Hays?

  But however, it would be a fraction of what China could produce and the capability would not be there.

• 44:49John Coogan?

  Yep.

• 44:49Jordi Hays?

  Which is just a terrible place to be in. Like a huge part of the reason that we were successful in World War II was because we were able to turn on this massive, you know, manufacturing capacity and just out, out produce our, uh, out produce the competition.

• 45:06John Coogan?

  Yeah. This is interesting. He ends with, uh, space and visions of the future. Below the arcing of stars and spirited space adventuring of generations to come, the skies are clear, save the birds and an occasional transport drone passing silently overhead towering bio hybrid buildings draped with verdant ivory, attended to by swaths of assiduous airborne robo gardeners, looks as if they might have emerged in search of sunlight from the earth itself. A period of peace, less fraught with tension than its Dr. Strangelove type predecessor has settled upon the world. This is not for want of bad actors, but for their inability to find secrecy.

• 45:48John Coogan?

  And he closes with now, with all of this having come to pass, there seems to be an almost palpable optimism, a sense that things can change and that we have a significant say in how they change. A weird coalition between humans and their hive minded autonomous aircraft. Once an unnerving prospect now powers the world forward in ways that not even the most visionary among us could have seen in a crystal ball. This or something else entirely lies ahead of us with courageous optimism. We step into drone filled horizons.

• 46:19Jordi Hays?

  So clearly GB Rango should write some science fiction.

• 46:22John Coogan?

  Yeah.

• 46:23Jordi Hays?

  Cause we'll read it.

• 46:23John Coogan?

  So good.

• 46:25Jordi Hays?

  One thing that's interesting too, there's already technology that's been developed to make drones silent. So it's some element of, of the way.

• 46:32John Coogan?

  Propeller design.

• 46:33Jordi Hays?

  Yeah, the propeller design.

• 46:34John Coogan?

  It's very crazy.

• 46:34Jordi Hays?

  And so right now it's actually nice that you can tell when a drone is, I've had situations where a drone flies over my backyard.

• 46:42John Coogan?

  Yeah.

• 46:42Jordi Hays?

  I got there and I, I look up at it. I'm like.

• 46:45John Coogan?

  Get out of here.

• 46:46Jordi Hays?

  Get out of here.

• 46:46John Coogan?

  Scram.

• 46:47Jordi Hays?

  Scram, scram.

• 46:48John Coogan?

  Yeah, get off my lawn.

• 46:48Jordi Hays?

  Not much you can do. But, uh, imagine when they're completely silent, you're just, you know, if somebody could fly it over your backyard, uh, on a, on a, on a battlefield, it's pretty terrifying to think about, you know, this kind of, uh, assassin that can move it 100 plus miles an hour instantly take you out without you even hearing about it. So. Very dark, but good time to get it. So one thing I would say, kind of a call to action for the audience. It's there are a lot of new American companies taking on this issue, developing drones for all these different use cases. If you look at Augustus and Rainmaker, they're developing drones for cloud seeding and agriculture.

• 47:28Jordi Hays?

  We like that we could probably have 10, 10 to 100, you know, 50x more drone companies attacking all these different areas, everything from like the production down to the parts level, all the way up through these sort of like app layer, product layer companies for organ transplants, you know, sorry, not transplants, transports.

• 47:47John Coogan?

  Transports, yeah. Well, transplants, yeah. That's right.

• 47:50Jordi Hays?

  Yeah.

• 47:51John Coogan?

  Well, we'll go give it a read on Pirate Wires. We love Pirate Wires and highly recommend that you subscribe. It would be just crushingly embarrassing to get caught looking at a Pirate Wires paywall in front of someone in tech.

• 48:02Jordi Hays?

  Brutal.

• 48:03John Coogan?

  You don't want that to happen to you.

• 48:04Jordi Hays?

  Yeah.

• 48:05John Coogan?

  And if you ever run into Solana, he has the ability to just search your email in the database and he'll know.

• 48:10Jordi Hays?

  Yeah.

• 48:11John Coogan?

  So you can't fake it, guys. Can't fake it. You gotta be real, real subscriber. So let's go to Sir Tekary, breaking down more tech earnings from big tech, the hyperscalers. Microsoft and Meta earnings went live and Ben Thompson broke it all down.

• 48:25Jordi Hays?

  And I don't, I don't know what day it was. We already covered a lot of Meta's earnings.

• 48:29John Coogan?

  So we can kind of rip through Microsoft and just give you a quick update from the Wall Street Journal. Microsoft's flagship cloud computing business experience to slow down in growth last quarter as constraints on data center supply once again weighed down results. Revenue for tech, for the tech giants, Azure Cloud Computing Division, which is closely watched by investors, grew 31% at the low end of companies, of the company's projections. Chief Financial Officer Amy Hood said Azure growth would again be 31 to 32% this quarter, a projection that disappointed investors. Microsoft's stock was down four and a half percent in after hours trading. Fortunately on public, you can get in on the after hours action now.

• 49:08Jordi Hays?

  Yeah.

• 49:09John Coogan?

  They are allowing after hours trading. So first off, Ben says, Microsoft said the AI growth was capacity limited, but would be rectified by mid-year. It's nice to not have to be on the hook for that new OpenAI data center. But the bigger miss in Azure was somewhat obscure, but interesting in its own right. Basically summarizing the Wall Street Journal, Ben says, Microsoft pivoted their scale motion. Think small and medium sized businesses in second tier geographies to be very focused on AI instead of boring old cloud migrations. And they didn't get many takers. So they're going to second tier geographies outside the United States, and they're going to small and medium businesses. And instead of saying, hey, you have this data on this old server. Let's get it on the cloud.

• 49:54John Coogan?

  They are now shifting to a model of saying, hey, can we get AI installed in your teams integration? Can we get AI installed in looking at all your data, running streaming analytics, looking at your enterprise? And that's a harder sell for a lot of businesses that are just, hey, like, I kind of have, I'm running on vibes, like I'm the AI. I know if revenue is down, I kind of know why. I don't necessarily need now to dig through everything.

• 50:17Jordi Hays?

  I'd love to see an AI have a power lunch.

• 50:19John Coogan?

  Exactly. It's a harder sell. Apparently that's what we're seeing. Could turn around. We never know.

• 50:24Jordi Hays?

  Yeah.

• 50:25John Coogan?

  So now they will go back to just selling actual cloud services and expect to see a revenue rebound. Count one for my thesis that bottoms up AI adoption will be a hard sell. And this is also why there's those private equity rollups, VC backed rollups that are, that are buying companies and then forcing them to use AI because it seems to be a hard sell from an outsider. And so you could always ask, hey, why is Long Lake rolling up HOAs and then dropping AI on top of it? Why don't they just build AI for HOAs and then sell into the existing HOAs? Well, maybe the sales motion is very difficult. Maybe they want a new model. And so if they own the company.

• 50:57Jordi Hays?

  Yeah.

• 50:58John Coogan?

  They get to convert that.

• 50:58Jordi Hays?

  My H O A management company still runs on paper sent in the mail that has to be sent back to them and then processed.

• 51:05John Coogan?

  Yeah.

• 51:05Jordi Hays?

  It's like the easiest software integration to just allow online surveys.

• 51:09John Coogan?

  But if you, if you had.

• 51:10Jordi Hays?

  That out. So imagine how many H O A software companies have pitched them.

• 51:14John Coogan?

  Totally.

• 51:14Jordi Hays?

  Look, you could be way more efficient.

• 51:15John Coogan?

  Yep.

• 51:15Jordi Hays?

  You could save money here, all this stuff. Don't care.

• 51:18John Coogan?

  Yeah. And they're saying, oh, you're trying to pitch me some e-signing software. How many employees you got? 50,000? I'm not interested.

• 51:23Jordi Hays?

  Yeah.

• 51:24John Coogan?

  It'd be too expensive.

• 51:24Jordi Hays?

  Get those numbers up.

• 51:25John Coogan?

  Yeah.

• 51:27John Coogan?

  So on the flip side, Satya Nadella claimed good progress with Copilot adoption. We are seeing accelerated customer adoption across all deal sizes as we win new Microsoft 365 Copilot customers. Once again, however, Ben says there was no actual real number shared. I'd love to see them. Beyond that, I do want to express gratitude for, to Microsoft for introducing a new term, new terms of art. Database fungibility.

• 51:50Jordi Hays?

  They're not getting pressed harder on that, considering it's such a major element of their AI strategy. Wouldn't the analysts kind of push?

• 52:00John Coogan?

  No, you can totally push back until the S E C says you got to break out the revenues. You don't want to share anything. This is the classic Google, YouTube, A W S, Amazon thing. Like, Amazon did not want to break out A W S data because even though like you could hire someone from A W S and they could tell you like, yeah, that thing was really profitable. That doesn't ring as true as every day seeing the stock price and every quarter seeing A W S just print profit. And that gets Google and Microsoft off the couch and they say, well, I know for a fact that, that, that A W S is massively profitable. We got to build a competitor. Instead of just, oh, I've heard whispers that they're making lots of money.

• 52:40Jordi Hays?

  Yeah.

• 52:40John Coogan?

  Right? Very different because Bezos that whole time was reinvesting all the profits. So it wasn't showing up. It was hiding.

• 52:45Jordi Hays?

  It's just tough because, I mean, on the, on the Copilot side, they're selling into existing customers, right? So it's an upsell.

• 52:52John Coogan?

  Yep.

• 52:53Jordi Hays?

  Which is different than, okay, if you want to go compete with them really on Copilot, in many ways you have to own the underlying. Company wide.

• 53:02John Coogan?

  Yep.

• 53:02Jordi Hays?

  People, infrastructure to some degree, right? Like you need to own teams so that you can upsell.

• 53:07John Coogan?

  Totally.

• 53:07Jordi Hays?

  You know, the co-pilot for Teams integration.

• 53:09John Coogan?

  Yeah. And so Satya continues to get hammered with questions about OpenAI and the relationship there. And he says.

• 53:16Jordi Hays?

  And they posted, so, so Altman and Nadella. Altman and Nadella posted a selfie together.

• 53:23John Coogan?

  Yep.

• 53:23Jordi Hays?

  Trying to, you know, clear up.

• 53:24John Coogan?

  Hey, we're buddies.

• 53:25Jordi Hays?

  We're buddies. We're smiling. We're happy.

• 53:27John Coogan?

  It's not, it doesn't count unless there's the, the, the.

• 53:30Jordi Hays?

  Nadella mugged Altman on TV. He said.

• 53:33John Coogan?

  Yeah. The bar for like the, the CEO to CEO selfie has gotten so high. It's like, I want to see you doing jujitsu together. I want to see a jersey swap. I want to see that leather jacket on you. I want to see, I want to see Satya in the passenger seat of the Regera. In the cone set.

• 53:48Jordi Hays?

  We need to see paparazzi shots of them.

• 53:50John Coogan?

  Yeah. I want to see Sam.

• 53:51Jordi Hays?

  Together.

• 53:51John Coogan?

  Hitting 200 miles an hour in that thing and Satya scared out of his mind.

• 53:55Jordi Hays?

  Yeah.

• 53:55John Coogan?

  Then I'll be like, okay, yeah, these are boys. They're boys. They went to the track. They did a track day together. And Satya trusted Sam to put up five Gs in the corner.

• 54:03Jordi Hays?

  Satya let Sam ride his favorite thoroughbred.

• 54:06John Coogan?

  Exactly. Exactly. Uh, yeah, it's not, you can't just take a picture in a boardroom. It's boring. It's boring. Step it up, guys. Um, so Satya answering about OpenAI, he says, but to your overall point, I, the thing I would say is that we are building a pretty fungible fleet. Right? Like, don't worry, we can move our fleet anywhere. Uh, we're making sure that all the right, that there's the right balance between training and inference. It's geo-distributed. We are working super hard on all the software o- o- o- positions, right? I mean, it's not just the software optimizations that come because of what DeepSeek has done, but all the work we have done too. For example, reduce the price of GPT models over the years in partnership with OpenAI, which is true. They've done a lot of optimization to serve GPT through Azure.

• 54:46Jordi Hays?

  How much Microsoft owns of OpenAI? Because there was that one weird investment where they basically bought. Seemingly, I forget the exact structure, but it was like 10 on 20 years.

• 54:59John Coogan?

  The way I think of it is like, is like, there's kind of three important parties around the table with the OpenAI for profit. It's like the, like the founders, employees, like the shareholders, the Microsoft, and then the nonprofit. And then the actual investors are like pretty small in that, but you could think about like those four things and they're like roughly balanced. There isn't one person or one organization that has like outsized control. I think the whole meme of like, it's entirely controlled by the nonprofit, or it's entirely controlled by Sam, or it's entirely controlled by Satya. Is maybe a little bit oversold and it's a little bit more of a balance because when the nonprofit conversion happened, there was like a big debate and you get four people around the table.

• 55:39John Coogan?

  Oftentimes, if everyone has like roughly equal leverage to kind of veto, you kind of wind up with roughly equal positions. But I don't really know. Anyway, in fact, we did a lot more work in inference optimizations on it. And that's been key to driving, right? One of the key things to note in AI is you don't just launch the frontier model, but if it's too expensive to serve, it's no good, right? It won't generate any demand. So you've got to have that optimization so that inference costs are coming down.

• 56:05Jordi Hays?

  Specific communication strategy where he keeps saying, right?

• 56:08John Coogan?

  Yeah, yeah, yeah.

• 56:10Jordi Hays?

  And it makes you inclined to agree with him, right?

• 56:13John Coogan?

  Yeah, right. Yeah. A hundred percent. I was watching some video of someone, uh, who was it? Someone on, uh, it was Vivek Ramaswamy on Mad Money, on Mad Money with Jim Cramer, and he's breaking down this biotech deal. And every sentence he starts with, actually, he includes the word actually like 25 times in this interview. And so Kramer will be like, oh, like, why are you taking this drug through, uh, through phase three trials? Like it already failed phase two. And he's like, well, actually, when we looked at the data, like it actually outperformed. And so he's like really enforcing that this is like true. What he's saying is a fact. It's actually true. And he was just throwing that in and I just picked up on it as like a rhetorical technique.

• 56:58John Coogan?

  Got to watch out for these things, folks. It's important. We would never do something like this to you. We would never use rhetoric against you.

• 57:04Jordi Hays?

  Never.

• 57:04John Coogan?

  To get you to buy one of our.

• 57:06Jordi Hays?

  To sign up for ramp.

• 57:07John Coogan?

  To sign up for ramp.

• 57:09Jordi Hays?

  Actually.

• 57:09John Coogan?

  Actually, which is actually the greatest financial institution of all time.

• 57:13Jordi Hays?

  All time.

• 57:14John Coogan?

  Also, the fleet physics that we are managing and also remember, you don't want to buy too much of anything at one time because Moore's law every year is going to give you 2X, your optimization is going to give you 10X, you want to continuously upgrade the fleet, modernize the fleet, age of the fleet, and at the end of the day, you have the right ratio of monetization and demand-driven monetization to what you think of as the right training expense.

• 57:37Jordi Hays?

  I like the use of fleet because it does, you can imagine that same language being used at Amazon where they're like, all right, Jeff, you have, you know, tens of thousands of these delivery vehicles, like the depreciation is insane, you're putting hundreds of thousands of miles on them, you know, every few years, like they're clearly depreciating massively. And so by positioning it as a fleet standpoint, it makes it slightly less painful that a lot of these GPUs will be worthless in three years.

• 58:05John Coogan?

  Yeah.

• 58:05Jordi Hays?

  Not worthless.

• 58:06John Coogan?

  People are like, yeah, I got a fleet of sports cars at home. I'm used to this. I've dealt with depreciation before.

• 58:11Jordi Hays?

  You buy the right cars?

• 58:11John Coogan?

  I got an SF90 sitting in the garage.

• 58:13Jordi Hays?

  Yeah.

• 58:15John Coogan?

  I got a bunch of Tycons.

• 58:16Jordi Hays?

  Yeah.

• 58:17John Coogan?

  In my fleet. I'm sitting on losses.

• 58:20Jordi Hays?

  Yeah, the only thing, the only thing that depreciates faster than GPUs is Tycons.

• 58:24John Coogan?

  Tycons. Some, some people call them the GPUs of the car market.

• 58:28Jordi Hays?

  Yep.

• 58:29John Coogan?

  And so Ben summarizes by saying, this is the exact opposite way in which Microsoft was talking about their data center investments in October 2023, where Nadella emphasized that Microsoft would have a durable cost advantage because they could build infrastructure for a specific model. So they were not talking about fleet fungibility at that point. They were talking about going all in on OpenAI.

• 58:50Jordi Hays?

  Ben doesn't forget.

• 58:51John Coogan?

  He's putting, he's putting Satya in the truth zone.

• 58:52Jordi Hays?

  Truth zone.

• 58:53John Coogan?

  In the truth zone.

• 58:54Jordi Hays?

  And you know Satya's reading this being like, oh, he got me.

• 58:56John Coogan?

  He got me. Yeah, I was trying to be a little sneaky, like dead sneak past your techery. Oh, no. Ultimately, though, that's not a criticism. Models seem to be well on their way to commoditization and Microsoft just changed its tune appropriately. And so, yeah, and they're hosting R1 for free. And so, you know.

• 59:14Jordi Hays?

  Wait, Microsoft is.

• 59:15John Coogan?

  Where credits do.

• 59:16Jordi Hays?

  Microsoft is hosting R1?

• 59:17John Coogan?

  Everyone's hosting R1. No one is as much of a Djangoist as you.

• 59:22John Coogan?

  No one, no one is that America first. Like the whole, like the abstract concept of like, it's bad to host the open source model, just like that didn't take hold at all as a meme.

• 59:31Jordi Hays?

  Yeah, just, you know, imagine, imagine Sam, you're, you're posting the smiling picture with Satya. Meanwhile, he's.

• 59:38John Coogan?

  But they host everything. They host Llama. They do a whole press release.

• 59:40Jordi Hays?

  I understand, I understand.

• 59:42John Coogan?

  Yeah. And if you're an Azure customer, you're like, I want all of them. Like, give me all the flexibility, all the time on cost and stuff like.

• 59:48Jordi Hays?

  They're hosting it on Azure.

• 59:50John Coogan?

  On Azure.

• 59:51Jordi Hays?

  I thought, I thought it was an integration in Teams or like.

• 59:53John Coogan?

  No, no, no, no, no.

• 59:56John Coogan?

  If I go to Azure, I can get MySQL, I can get Postgres, I can get other databases.

• 1:00:00Jordi Hays?

  I thought they were like, yeah, load it into Copilot, let's go. Sorry, Sam. Sam's got the, you know, the smiling face on, he's just crying.

• 1:00:08John Coogan?

  No, no, no, it's not that aggressive yet. But, uh, and one more point of note, Hood, the CFO, said, we talked a little bit about what the main drivers, uh, what, which was one of the Azure commitments that OpenAI has made. Uh, and I do want to say that obviously this is a big commitment. You'll continue to see OpenAI make commitment. Uh, so I want to separate the concept that this is one time versus an ongoing relationship that will grow as they grow, which it absolutely will. That right of, and Ben says that right of first refusal to OpenAI's AI build out figures to be a pretty handy tool for Microsoft. They can build capacity for their customers. And if they overbuild, well, guess they'll grab a bit more of OpenAI capacity to fill in the gaps.

• 1:00:52John Coogan?

  And so Satya, you know, getting a little, a little.

• 1:00:56Jordi Hays?

  An absolute dog.

• 1:00:57John Coogan?

  But an absolute dog.

• 1:00:59Jordi Hays?

  He's, he's nice with it.

• 1:01:00John Coogan?

  He's nice with it.

• 1:01:01Jordi Hays?

  He's nice with it.

• 1:01:01John Coogan?

  You know, he was the first hyperscaler big tech CEO to mention the metaverse before Zuck. He got to it before Zuck. He was like, yeah, we're really into this metaverse concept. Like, it's going to be a big deal. We're going to like.

• 1:01:12Jordi Hays?

  It's called Teams.

• 1:01:13John Coogan?

  It's called Teams. Yeah, it was like, you're going to be, if you're like an industrial company, you'll be able to create a, uh, what do they call it? Like a clone of your industrial systems. So you'll be able to like, walk around in virtual reality and see, okay, this machine is green. This machine's red. What, let's diagnose it. And called.

• 1:01:31Jordi Hays?

  We're out of, we're running out of Lucy.

• 1:01:32John Coogan?

  Digital twin. Yeah, yeah. Let's fire up the.

• 1:01:34Jordi Hays?

  Fire it up.

• 1:01:35John Coogan?

  Packaging machine, print more labels, uh, all, all digital. And I think they have some products for it. I don't think the adoption's been great, but, uh, it is just funny that he was early to the trend. He was reading that ball.

• 1:01:45Jordi Hays?

  Yep.

• 1:01:45John Coogan?

  Another absolute dog. Okay, let's move on.

• 1:01:48Jordi Hays?

  What is Matt Ball up to these days?

• 1:01:49John Coogan?

  Oh, he just put out a fantastic report on the state of video games, which we should dig into.

• 1:01:53Jordi Hays?

  Should dig into that.

• 1:01:54John Coogan?

  It's like a massive slide deck and he just did an interview with none other than Ben Thompson. The absolute man.

• 1:02:00Jordi Hays?

  Absolute dog. Dog on dog action.

• 1:02:04John Coogan?

  It's a dogfight.

• 1:02:05Jordi Hays?

  It's a dogfight.

• 1:02:05John Coogan?

  Those two guys getting the ring.

• 1:02:06Jordi Hays?

  Yeah, yeah.

• 1:02:07John Coogan?

  Hot takes flying.

• 1:02:08Jordi Hays?

  Yep.

• 1:02:09John Coogan?

  It's great. Okay, let's move on to Masa Yoshi Son.

• 1:02:13Jordi Hays?

  Hey, crack. I specifically ordered these this morning. This is my favorite little Japanese soda.

• 1:02:21John Coogan?

  Fantastic.

• 1:02:21Jordi Hays?

  It's called the Kimono.

• 1:02:23John Coogan?

  Okay.

• 1:02:23Jordi Hays?

  Sparkling Yuzu Soda. It's made in Japan. It actually still has all of the, it has some westernized labeling in order to sell here, but they left the Japanese characters on the side too. So if you can read Japanese, you can dive in there, but these things are delightful.

• 1:02:41John Coogan?

  Yep.

• 1:02:42Jordi Hays?

  I thought it was a great way to kind of sort of kick off this overview of Masa Son's, Masa Yoshi Son's absolutely incredible career.

• 1:02:52John Coogan?

  Yeah.

• 1:02:53Jordi Hays?

  And that we are blessed is still raging and roaring onward.

• 1:02:57John Coogan?

  The ultimate size lord.

• 1:02:58Jordi Hays?

  The Gambling Man.

• 1:02:59John Coogan?

  The Gambling Man.

• 1:03:00Jordi Hays?

  The Gambling Man. There's, there's, so there's, John had covered Masa on, on his YouTube channel in the past, but in, in diving into this, so we, we looked at some of his research from that. And then I went back and started listening to the audiobook Gambling Man, which is an incredible overview of Masa's life and gets you really into, really into who this guy is. Everything like deep family history, going back to his dad, his dad's family, his grandpa, their entire trajectory, going from Korea to Japan, back to Korea, back to Japan.

• 1:03:41John Coogan?

  Yeah.

• 1:03:41Jordi Hays?

  You know, going through a very tumultuous.

• 1:03:44John Coogan?

  Oh, yeah.

• 1:03:45Jordi Hays?

  Series of decades, leading up to. Masa being born.

• 1:03:50John Coogan?

  Well, let's start with some context of why he's in the news and then we'll kick it off with the proper intro. So Jeff Lewis has a great post here that we'll put up on the screen. He says, "You only have to be really right once. Masa has been really right twice. Third time tends to be a charm." And so Jeff's going long Masa and Hiro Onoda Capital says, "25 at 340 posts. This is the rumored OpenAI round." And it's a quote, it says, "There are one business guys. Bill Gates just started Microsoft and Mark Zuckerberg just started Facebook. I am involved in 100 businesses and I control the entire tech ecosystem."

• 1:04:32John Coogan?

  Masa continued, "These are not my peers. The right comparison for me is Napoleon or Genghis Khan or Emperor Qin, builder of the Great Wall of China. I am not a CEO. I am building an empire." And that's the type of energy we love to see on the timeline. And so we got some photos of Masa, but let's kick it off with why you should care about this guy. He's back. He's in on Stargate. He's ripping huge checks. He lost a ton of money. It was embarrassed by WeWork, but he made a ton back on ARM. He's rich, he's powerful, and he's firmly back in the game. And so why don't you kick it off with his humble beginnings and early life?

• 1:05:12Jordi Hays?

  Humble beginning is an early life. So he was born on the 11th of August in 1957 in TOSU, which is the southeastern part of Japan's Kyoshu Island. He is a third-generation Korean.

• 1:05:25John Coogan?

  Zainichi Korean.

• 1:05:26Jordi Hays?

  Zainichi Korean, which are ethnic Koreans that were, at some point or another, granted permanent residency or citizenship in Japan. So before going into that, he actually, so going back to his grandpa, I'll pull up some notes here. His grandpa and his, I guess his great-grandpa were a part of this sort of agricultural class in Korea. And so they were not seen as businessmen, but they were seen as people that sort of, they were sort of aristocratic.

• 1:05:58Jordi Hays?

  Adjacent, their responsibility was sort of overseeing agriculture in Korea. And what's interesting about this is that his grandpa really internalized this. And so even though that aristocratic sort of agricultural class was disbanded in Korea and they eventually moved to Japan, he always saw himself as above business, like had a very negative view of business. He had a negative view of entrepreneurs, which is fascinating because Mas's dad, his grandpa's son, the grandpa's son was very much an entrepreneur and he went on to very much influence Mas in a big way.

• 1:06:36John Coogan?

  It's a real you can just do things type guy.

• 1:06:39Jordi Hays?

  You can just do things guy.

• 1:06:40John Coogan?

  Break into the rules, build whatever you can.

• 1:06:42Jordi Hays?

  So yeah, so going, going back, Mas's dad was born in 1936. Their, their Mas.

• 1:06:51John Coogan?

  Wow, he was just 21 when he had Mas.

• 1:06:53Jordi Hays?

  Yeah, so has a kid very young. Mas is one of seven.

• 1:06:57John Coogan?

  A pronatalist going on.

• 1:06:58Jordi Hays?

  So his, his, yeah, very, very much. And so Mas's dad is living through World War, you know, the sort of the end of World War II, right? Sort of this Japanese reconstruction era. The Japanese were deeply embarrassed by World War II, right? They went from this sort of dominant empire that stretched all over Asia to being forced back onto the four islands. And they went through this reconstruction period. And so as the Japanese were in a bad spot, they badly, badly mistreated Koreans. Even during the war, the Koreans were, the men were forced to work in like coal mines and do these sort of tasks that, that were basically slave labor.

• 1:07:42Jordi Hays?

  And the women were like concubines, sort of sexual slaves. So very, very dark history. And so this is, this is what Mas's grandpa is like going through as, as like an adult, basically. So he has a son, he has seven kids. And Mas's dad even has memories of American B-29 bombers.

• 1:08:04John Coogan?

  Whoa.

• 1:08:05Jordi Hays?

  Flying and bombing nearby cities that they were in. And Mas's dad has this memory. Of walking up and touching the glass of a B-29 bomber that crashed. But Mas's dad at the time is a kid. He decided that America was awesome. He says, like, there's a quote, he says, they, he's like, at that point, from that point on, I thought America rocked. That was like the summary, you know, not, not word for word.

• 1:08:31John Coogan?

  That's hilarious.

• 1:08:32Jordi Hays?

  And so, after, after the war, Koreans are being treated terribly. There was, there was a lot of pushback. Many of them were asked to leave. If you didn't leave, you were forced into these sort of shanty, you know, ghettos, slums.

• 1:08:46John Coogan?

  Japan's always been kind of a, like, late ethno-state. Like, they've never been big on immigration.

• 1:08:51Jordi Hays?

  Yeah, still, you can, like, go live there, but you're very, very difficult to get citizenship.

• 1:08:56John Coogan?

  The, the population's collapsing, so things might change, but it's been rough, even, even being Korean, not even being like an American, who would really stick out.

• 1:09:04Jordi Hays?

  Yeah, and so.

• 1:09:06John Coogan?

  They lived in this illegally built shack on the railroad. You saw this?

• 1:09:10Jordi Hays?

  Yeah, so gnarly. And so at one point, they go, so Mas's dad goes back to Korea. They realize it's even worse there. There's like, there's no economy.

• 1:09:20John Coogan?

  Yep.

• 1:09:20Jordi Hays?

  Then they decide they're gonna come back to Japan. They get on a boat. There, it's like, it's a multi-day crossing typically. It's like a couple of days. They, the boat sinks, and they spend two days at sea, just like drifting around, and eventually get picked up, taken back to Korea, and then they finally make it back to Japan.

• 1:09:39John Coogan?

  Wow.

• 1:09:40Jordi Hays?

  And so, jumping forward a little bit, Japan at this point is still like a completely shattered economy, right? They're rebuilding. They've lost so much ground. Mas's dad leaves school at 14 and is selling alcohol to basically support his family. Right. He's one of seven. He's trying to put some food on the table.

• 1:10:02John Coogan?

  He has an illegal sake business.

• 1:10:04Jordi Hays?

  So Mas, yeah, Mas's dad starts a moonshine business, and at this point, his dad is a drunk, is beating him, like, frequently, very dark.

• 1:10:14John Coogan?

  Yep.

• 1:10:15Jordi Hays?

  And has, at one point, badly beats him because he was bragging, Mas's dad was bragging to his friends about his business success, right? He's like, I'm making moonshine. I'm making some bucks. His dad overhears it, ends up beating him for it. So Masa is born 10 years after the family gets back to Japan. They're completely at the bottom of society. So it's very much like Masa, by the time he's a teenager, his dad is kind of on top, not on top of the world, but they have a very flashy lifestyle. But he's born while his dad is living with their family in the slums and they are pig farmers. And they chose pigs for a few specific reasons that I thought were interesting. So they,

• 1:10:58Jordi Hays?

  one, his dad had free labor because they have a big family and everybody's participating. They have free land because they're just living in this sort of like railroad ghetto and the pigs just kind of roam around chilling. The Masa's grandma, who is a big part of raising him because his mom was very absent, takes Masa around in a wheelbarrow, picking up scraps of food to feed the pigs. So this is just like, it's hard to even illustrate how rough of a situation they're in. But anyways, they pick, his dad picks pigs because they reproduce super quickly.

• 1:11:31John Coogan?

  Yeah.

• 1:11:32Jordi Hays?

  The pigs are just...

• 1:11:33John Coogan?

  It's like very hustle mindset, but very limited opportunities and like low class.

• 1:11:38Jordi Hays?

  Yeah. And so eventually through this sort of raising pigs, selling them off to be butchered for food, Masa's dad starts saving up some money. At one point, he has the equivalent of 100,000 USD, which is a lot of money back then. And Masa, this really gets into kind of understanding who he is. His dad starts to get into this thing called Pachinko, which is this new form of gambling, which is effectively via slot machines. So this still is very much around in Japan. So his dad just starts getting into the game a little bit. He's gone from pig farming to gambling.

• 1:12:12John Coogan?

  Yep.

• 1:12:12Jordi Hays?

  An absolute dog.

• 1:12:13John Coogan?

  But he's on the casino side.

• 1:12:15Jordi Hays?

  But he's on the casino side. He's on the house.

• 1:12:16John Coogan?

  He's not gambling the family money away. This is important.

• 1:12:18Jordi Hays?

  But he still has to take some pretty big gambles. So anyways, these are picture-like casinos and is not that dissimilar to what Vegas looks like today where it's just rows and rows of these machines and people just sit there. And over time, he's sort of levering up, he's launching different parlors here and there. At one point, he takes a huge bet and spends $4 million on a new, on a new club, they called it. And it's called Lions. And so this was like the vast majority of the capital that he had available. So huge bet. And for the bet to pay off, he needed to get 5,000 to 10,000 people per day

• 1:12:58Jordi Hays?

  gaming in this, in this facility, which is an order of magnitude more than his like best performing club. So it's, it's literally the most like giga chat, long move that a lot of people are like, you are absolutely crazy. And his dad is on record saying, I don't care if I go bust. And he even had contingency plans. He's like, if I go, he's like, if I go bankrupt, like we'll hit, we'll go on the run. He's like, I'll run it all back. Wow. And so this is, this is the environment that Maz is growing up in as like sub 10 years old, which is just crazy, crazy environment. Yeah. And so he launches this club. Yep. First two weeks, absolutely flopped. And he's like, obviously freaking out, but wants to, you know, wants to really make a play.

• 1:13:38Jordi Hays?

  So he takes like a $350,000 loss in the first month. He's like, I gotta turn this around. He decides to, he works with his engineers to make it so that the machines like pay out a lot more. And people start winning a lot. And he starts attracting this flood of people. And so the next month he changes it and he makes 350K of profit. There you go. And then he, the next month, you know, they're, they're kind of messing with the machines. He loses it back again. So he's no, the, the, the sons are just like not afraid to like make it all, lose it all, make it all, lose it all. And, and eventually he sort of slowly dials it, dials it in. And so by the time Maz is, I believe it's 14, the family's now living this sort of dual lifestyle where some,

• 1:14:23Jordi Hays?

  they have 20 members of the family that are, that are working on the family business. But then there's also the sort of older generation. And so it's this weird dichotomy where the people that are working in the business are like driving like flashy cars and like really like living it up, right? They have all these sort of casinos. And then the grandparents are like, kind of still around, but like very much still living in the past in some way. And so we can get more into Masa's, you know, life and career, but I think that's very important context because this sort of gambler's mindset and entrepreneur, like high, high risk entrepreneurship is 100% in his DNA. It's

• 1:15:03Jordi Hays?

  all he knows. So when people are like, oh, how could Masa put $10 billion into, you know, WeWork and lose it all? It's like, well, he's lost more money than any other man in history, in the entire history of the world, in our sort of modern economy.

• 1:15:19John Coogan?

  He was 70 billion during the dot com crash.

• 1:15:22Jordi Hays?

  Yeah.

• 1:15:22John Coogan?

  The highest number.

• 1:15:24Jordi Hays?

  Yeah. He was also the rich. So he went from being the richest man in the world to losing like 90.

• 1:15:29John Coogan?

  In history.

• 1:15:30Jordi Hays?

  Yeah.

• 1:15:30John Coogan?

  Crazy.

• 1:15:31Jordi Hays?

  So.

• 1:15:31John Coogan?

  Yeah. And so I think through, through the, through the gambling business and through kind of their family growing, he meets this guy, Den Fujita, who is an entrepreneur who brought McDonald's to Japan. And this guy is a psycho. He has this quote, he says, if the Japanese eat McDonald's for a thousand years, they'll grow taller, have white skin and blonde hair. Like, it's like they'll basically turn into Donald Trump. I think it's so funny that the dude's just like, oh yeah, like this is like Trump coded. This is Trump maxing.

• 1:16:05Jordi Hays?

  Trump maxing.

• 1:16:06John Coogan?

  And so Fujita acts as like a mentor to Masa and tells him, go study English, learn about the computer industry and you gotta go to America. And so Masa has this outsider complex. He's like, you know, yes, I'm like the lowest rung of society. Yeah. My family's from this like destitute, you know, shack and we're still looked down on as kind of like gamblers and like, you know, lower class, but I'm keeping the name. I'm not changing my name and I'm going to prove that I can do it.

• 1:16:36Jordi Hays?

  No. And the cool thing, so Masa's dad had a. You know, I don't know the exact dynamic, but very rough relationship with an abusive father, who's an alcoholic. Mas's dad is awesome, though, and like from a young age is training Mas and saying, you are the best, you are number one, anything you want, you can achieve. Like it's honestly like I went from being, I was, you know, listening to this, being like very emotional because it was so dark and then it flips and Mas's dad is, you can just do things, anything you can see in your mind, you can achieve. And Mas really carries that into the rest of his career.

• 1:17:07John Coogan?

  Oh, yeah, totally. So he goes to California at age 16, joins this college before entering high school. And he, and he advances from sophomore to junior to senior in two weeks by just testing out of everything. And he spent two full years at the college, then transferred to UC Berkeley to study economics, while also taking some computer sciences, some computer science classes. And he has this idea where he needs to generate business ideas. And so he generates one new business idea every single day.

• 1:17:37Jordi Hays?

  He would have loved my first million.

• 1:17:38John Coogan?

  Oh, yeah, my first million, or just like, you know, your, your path of just like building a deck, spinning up an idea, tweeting something out and then being like, actually, this is a business. Yeah, the idea sucks. Or, but he was just throwing stuff at the wall. I remember in my first startup, we were like destitute and we had a wall of sticky notes, just like all the different business ideas. And some days we would just pull one out and be like, can we build an MVP for this? And like eventually it started working, which is great. So he sells a patent for a translation device to Sharp Electronics. So it seems like he does have some sort of technical background, even though later on he becomes deeply vibe-based investor.

• 1:18:13Jordi Hays?

  He's just not an engineer and he never identified as an engineer.

• 1:18:16John Coogan?

  No.

• 1:18:16Jordi Hays?

  He, he, he is the Jap, in the grand scheme, he's the Japanese Warren Buffett. So you should look at him as like a dealmaker, somebody that's seeing opportunities, putting people, capital and ideas together.

• 1:18:29John Coogan?

  Yeah.

• 1:18:29Jordi Hays?

  And doing it on a, on a global scale.

• 1:18:31John Coogan?

  And so Sharp pays him 1.7 million dollars for that patent, which is crazy considering how young he is at the time. It's a huge windfall back for, this was before 1980, so this is in the seventies. He gets 2 million bucks, basically. And so he immediately invested all in importing Space Invaders arcade machines, modifying the software and installing them on campus. And that makes him another million dollars. And then he founds a game software company and he sells that for 2 million dollars. So he has a bunch of like back-to-back hits really, really quickly.

• 1:19:00Jordi Hays?

  Yep.

• 1:19:01John Coogan?

  And, and so then he returns to Japan in the early eighties and he starts doing extensive research. So he's just kind of monk mode. He's made his money in America enough to like, you know, buy some time and he's just spending 18 months doing extensive research. All of his relatives are like, this guy's doing nothing, but secretly he was building a massive knowledge base. So he developed 20 metrics to measure potential business ideas and the highest scoring idea for him was personal software distribution. And this goes into his deal making philosophy. He's not building the software. That's complicated. That's risky. He's just taking software that automatic, that already works and just buying it for cheap and selling it to somewhere else.

• 1:19:43Jordi Hays?

  Yeah. Distribution businesses have existed for years. They're great businesses. You usually don't have to take on, you don't have to take on too much inventory risk, but you get this sort of toll booth style.

• 1:19:53John Coogan?

  Yeah. Not R and D heavy, very bootstrappable. I know some people that own food and bev distribution companies and like they just print money and they don't, and they never raised any money. It's like this amazing family owned business. And so this, and this also like just, it's super aligns with his skillset at this point. Like he understands what good software is obviously because he's built a game company, ran the space invaders thing. But if you think about, you know, you get a call from somebody who's like in their early twenties, they've already sold like three companies. Like they're, they have money. They're really like this crazy hustler with this interesting backstory. Like you're going to take that meeting even though they're young. And so that's the ultimate alpha is just, he's like such a hustler, has enough of a track record to get the meeting.

• 1:20:35John Coogan?

  And then it's like, oh yeah, you're providing me a service. Like I need software to distribute through my stores anyway. So why not, why don't I go with you?

• 1:20:42Jordi Hays?

  Yeah. And that's why when, you know, because today, the younger generation of entrepreneurs really know Masa for going giga long on WeWork and, and, but it's

• 1:20:54John Coogan?

  But that's not the story.

• 1:20:55Jordi Hays?

  Fifty years earlier, he had his 20 metrics to measure business ideas. And so he takes massive risk and oftentimes there is a sort of vibes based analysis, which, which some of his, his employees talk about, right? But in general, he's one of the most well-studied, well-researched, most experienced deal makers in history.

• 1:21:17John Coogan?

  Totally, totally. And so

• 1:21:18Jordi Hays?

  And there's not like, he does get some really lucky breaks, but It's not necessarily luck, right?

• 1:21:25John Coogan?

  Yeah.

• 1:21:25Jordi Hays?

  Because he's taking so many crazy shots on goal.

• 1:21:27John Coogan?

  Yeah. And so he chooses the name SoftBank. Thinking about it, it's like a bank of software. It's not, it's not actually a financial institution, but it kind of turns into one or a huge fund at a certain point. And so he hires two part-time people in a small office. He's not afraid to hustle. And then famously, he would get an Apple box because he's short and stand on them and, and declare in five years, we'll have $75 million in sales supplying a thousand outlets and will be number one in PC software distribution. And the two employees were like, this guy's crazy. We quit immediately. Imagine giving a speech to your only two employees. Imagine we're like, Ben, this is going to be the most profitable podcast. We are going to crush it. We're going to be number one this year. And Ben just is like, I'm good.

• 1:22:11Jordi Hays?

  I'm out.

• 1:22:12John Coogan?

  I'm out.

• 1:22:12Jordi Hays?

  On that note, I'm out.

• 1:22:13John Coogan?

  Yeah. I mean, if he saw a stand on an Apple box, maybe that would be the, the trigger for that. But hilarious. And so, but he doesn't mind. He grinds through it. And so he, he books a giant booth the size of Sony Toshiba's at a Tokyo trade show, even though he's like this small company. He's just sending it.

• 1:22:30Jordi Hays?

  So smart.

• 1:22:31John Coogan?

  It's so smart. So smart. Standing out. This is, this is the friend.com Alvy thing. Like he's, he's doing the thing where everyone's like, no one would take that amount of risk. And then it gets him a bunch of attention. And so he invited vendors to exhibit for free. And so he's like, I got this booth. I'll let you do it for free. I'm going to advertise you for free. And he's just creating, pulling forward value, basically. And so it feels like a flop. There's no immediate leads, but weeks later, Jocelyn Denki from Osaka contacted him. And originally, this is hilarious because he's made millions of dollars at this point.

• 1:23:02Jordi Hays?

  Yeah.

• 1:23:03John Coogan?

  And, and they're like, hey, we're, we're the software firm. Why don't you come and pitch us and we'll see if we can do a deal? And he's like, I don't have enough money to afford a train ticket. Like I literally can't go.

• 1:23:14Jordi Hays?

  Yeah. So we, I would love to know how he's, he probably did the most degenerate thing with all that cash. Probably going long, like

• 1:23:21John Coogan?

  Of course.

• 1:23:22Jordi Hays?

  Russian corn futures, just like uses it all.

• 1:23:25John Coogan?

  Yeah. I mean, he's investing it. I think he literally spent a ton of it on that trade show booth and just spending it on like, you know, all these, all these crazy long shots.

• 1:23:33Jordi Hays?

  Oh yeah. You can imagine in an era when, when Tokyo's biggest software trade show, to actually get a booth the size of Sony or Toshiba, you might've had to spend

• 1:23:43John Coogan?

  A million bucks or something or, yeah, a ton. And so, The president of Joshen Denki calls him and says, we need a dedicated software supplier. We want you to be the one to do it. And he says-

• 1:23:54Jordi Hays?

  And this is such an interesting time, right? Because this is at a time where companies were R and D product companies, but they wouldn't do their own distribution. So to sell, they would just find a distributor that would be the primary sales channel for them.

• 1:24:09John Coogan?

  I mean, this was up until the internet, like all the not this, we're in 1981 or something. And all the way up to 2000, you would have to go to, what was it? Comp USA or Best Buy or Fry's Electronics. And I remember buying video games on discs in like boxes and you'd take that home.

• 1:24:28Jordi Hays?

  That's why GameStop was a great business.

• 1:24:30John Coogan?

  Yeah.

• 1:24:30Jordi Hays?

  It's because the manufacturers or the game makers didn't actually have-

• 1:24:35John Coogan?

  And if you just think about it, like there's, I mean, there's obviously some sort of power law where Best Buy is probably the biggest one. GameStop is big, like you mentioned, but there are hundreds or thousands of individual small software box retail stores. And then there's also thousands of game companies and software companies and somebody making spreadsheets. You forget that before Microsoft condensed all of Office, like PowerPoint was its own company. I'm pretty sure Excel was its own company and they like put all these together. Yeah, almost all of that was through M and A. And, and so at a certain point, if you're the guys who are like, we're making presentation software, we're going to call it PowerPoint or whatever. You're like, okay, we have some cracked engineers. We built it, it works, it's good, but like now we got to sell it into a thousand different retail stores. Like we have to have a massive sales force.

• 1:25:19John Coogan?

  It makes perfect sense to disaggregate that and work with a distributor. And so that's what they do. And but Masa gets this phone call and they're saying, we need a dedicated software supplier for Joshen Denki. And Masa says, I have no product, no money and little experience, but I have the greatest desire to succeed and I will pour my entire spirit into PCs.

• 1:25:40Jordi Hays?

  Let's go.

• 1:25:41John Coogan?

  Let's go. Full send.

• 1:25:42Jordi Hays?

  So, so one thing you'll know about Masa that's important to know is from a very young age. He intensely practiced manifestation and visualization. So he would have loved LA in the 2000s.

• 1:25:54John Coogan?

  Totally.

• 1:25:55Jordi Hays?

  Because this guy, I'm sure he's a big Feng Shui, you know, you know, enthusiast as well. But he, he would, in his view, from, from early in his career, if he could visualize it, he could make it real.

• 1:26:08John Coogan?

  Yep.

• 1:26:08Jordi Hays?

  And so that has kind of bit him in a little bit throughout, you know, the last few years. Well, he'll just announce a huge deal before it's done.

• 1:26:18John Coogan?

  Yep.

• 1:26:18Jordi Hays?

  And in his mind, he's like, I can see it in my mind. It's done. We're going to do it.

• 1:26:21John Coogan?

  Yep.

• 1:26:22Jordi Hays?

  And that bit him a little bit with WeWork because I'm sure when he was investing at WeWork at a $44 billion valuation, he just imagined a world where WeWork had office buildings, hotels, apartments, you know, all these, you know, campuses, right? And so he's like, of course this, he was not analyzing it based on their

• 1:26:39John Coogan?

  Yeah.

• 1:26:39Jordi Hays?

  EBITDA at the time. It was entirely based on what he visualized.

• 1:26:43John Coogan?

  Yep.

• 1:26:43Jordi Hays?

  And he believed in Adam Newman. In many ways, Adam Newman was an amazing CEO from a storytelling, narrative, brand building standpoint.

• 1:26:50John Coogan?

  Yeah, yeah.

• 1:26:51Jordi Hays?

  And so in his mind, WeWork was already a hundred billion dollar company. So it seemed like he's buying it for cheap.

• 1:26:57John Coogan?

  Yeah.

• 1:26:57Jordi Hays?

  He's like, you're the idiots, right?

• 1:26:59John Coogan?

  Yeah.

• 1:26:59Jordi Hays?

  Cause he could see it in his mind.

• 1:27:01John Coogan?

  Even, even WeWork, like, it's not like WeWork, people, people like to put WeWork in the same bucket as like Theranos, but it's just not true at all. Like, this is a benchmark company.

• 1:27:08Jordi Hays?

  Like, yeah.

• 1:27:09John Coogan?

  This was like, they were very much like a serious contender in Silicon Valley. Whereas Theranos was like this weird zombie.

• 1:27:15Jordi Hays?

  The thing, the other thing with WeWork is the fundamental consumer product was amazing.

• 1:27:19John Coogan?

  Yeah.

• 1:27:20Jordi Hays?

  Do you remember walking into early WeWorks? I, I remember being, you know, you know, in college, probably going to my first WeWork. I'm like, the coffee's free and good.

• 1:27:28John Coogan?

  Yeah.

• 1:27:29Jordi Hays?

  Like, that's amazing.

• 1:27:30John Coogan?

  Great.

• 1:27:30Jordi Hays?

  It was like a fun vibe. Everyone was friendly. Maybe it's not the highest productivity space in the world.

• 1:27:36John Coogan?

  And it was on, it was on a mega trend of like more remote work, more distributed teams, more small teams, more startups.

• 1:27:44Jordi Hays?

  It felt like the pricing, part of why the product was so good is because they were not selling it for what it costs to deliver.

• 1:27:50John Coogan?

  Totally.

• 1:27:50Jordi Hays?

  But it still was like, okay, at 400 bucks a month, it'd be stupid not to get this because I'm getting so much value.

• 1:27:56John Coogan?

  Totally, totally. And so Masa, the dealmaker, comes out in full force with the Joshin Denki deal. He says, first off, you got to break off other vendor relationships. You got to go exclusive if you want to be with me, but I will work extra hard for you. And then he also really pitches them on this idea that the software is key to them winning in hardware. So the idea is like, if Joshin Denki wants to sell a lot of hardware, they're going to need the best software in their stores. And people will come for the software and then they'll buy a new computer. And that, and that virtuous cycle will drive value for Joshin Denki. He's not, he's not wrong there. Like that is a good pitch. And so he secures the deal and he also importantly gets Joshin Denki to pay for product inventory, covering Masa's shortfall. So all of a sudden, he doesn't have a working capital problem.

• 1:28:39John Coogan?

  And so even though he's very small and doesn't have a lot of, a lot of funding raised or anything, he can basically bootstrap this up.

• 1:28:46Jordi Hays?

  Joshin deserves, hopefully Masa went back after all of this and was just like,

• 1:28:51John Coogan?

  Got some warrants.

• 1:28:52Jordi Hays?

  Here's a boat.

• 1:28:52John Coogan?

  Here's a boat or something.

• 1:28:53Jordi Hays?

  You know, something to pay him back because it seems like Joshin just made it a really risky bet.

• 1:28:59John Coogan?

  I mean, look at this growth.

• 1:29:00Jordi Hays?

  He's a force. He was always a force.

• 1:29:01John Coogan?

  Always a force. And so Masa takes, Masa takes SoftBank from $10,000 in monthly revenue to 2.3 million in monthly revenue. And remember, there's no inventory cost here. So it's all, like, it's all like effectively software margins. Like he doesn't have the working capital, like the debt issue.

• 1:29:20Jordi Hays?

  So he's printing.

• 1:29:21John Coogan?

  He's printing. And so he IPOs in 1994 at a valuation of $3 billion. And by the early 1990s, SoftBank was, SoftBank was Japan's largest distributor of PC software.

• 1:29:30Jordi Hays?

  He manifested this.

• 1:29:31John Coogan?

  And he was extremely wealthy, but far from done. Should we move on to the dot com boom and bust?

• 1:29:37Jordi Hays?

  This is like, we're just getting started.

• 1:29:39John Coogan?

  We're just getting started. Buckle in, folks. We got another hour at least on this, baby. So he moves to Silicon Valley in 1995. He sets up offices in Mountain View, seeing the internet's enormous potential. And 1995, this is still early on the dot com boom. It's not like he YOLO'd in at the top in 2000. Like, he did that also.

• 1:29:58Jordi Hays?

  He also did that.

• 1:29:59John Coogan?

  But he also got in early and that was very, that was very valuable. And so the dot com boom was in full swing. Companies were rushing to harness the web's explosive growth, but this was still pre-IPO craze. Oh, raise, you know, go public with just a slide deck and a domain name. And so in 1996, he meets the Yahoo co-founders Jerry Yang and David Filo. He offers them $100 million for 30% of Yahoo. It's a big stake. Typical VC funds at the time rarely wrote $100 million checks because that could alone be 40% of the fund.

• 1:30:30Jordi Hays?

  Yeah, this is so normalized now, but the biggest funds back in the day were like

• 1:30:34John Coogan?

  100 million dollars.

• 1:30:35Jordi Hays?

  Classic solo GP fund.

• 1:30:37John Coogan?

  Yeah, yeah, exactly. Yeah. And it just, yeah, just like you would just raise from VCs for a seed round or a series A, series B, and then IPO. Google IPO'd very early. Obviously, it was a different thing because they were cash flow positive, but even, even the money losers would IPO and use the capital markets in the public capital markets.

• 1:30:57Jordi Hays?

  To raise money.

• 1:30:58John Coogan?

  Exactly.

• 1:30:58Jordi Hays?

  Nowadays, when companies IPO, they're oftentimes not even about the money. It's about the liquidity for the shareholders.

• 1:31:04John Coogan?

  It's like, well, I raised a couple million dollars just from angels. Then there were a bunch of, there were a bunch of huge venture capital firms that could raise a $20 million series A check, no problem. Then there were growth funds. Then there were crossover hedge funds. Then I started just going to the direct LPs and being like, can I raise a couple billion from a sovereign wealth fund just directly in the private market, all before IPO? And that's why you see companies IPO-ing at 60 or 100 billion.

• 1:31:24Jordi Hays?

  So listen to this quote. Masa gave the, after he made this offer, he gave the Yahoo founders an ultimatum. He says, "If you don't take my money, I'll invest in Excite or Lycos, which were competitors, and kill you."

• 1:31:37John Coogan?

  The funniest thing about

• 1:31:38Jordi Hays?

  Just making death threats.

• 1:31:39John Coogan?

  The funniest thing about this quote is that he didn't even know who their competitors were. In the meeting, he asks, who do you think your biggest competitors are? And they say, probably Exciter Lycos. He's like, okay, well then, if you don't take the money, I'm investing in them. Thanks for doing my DD for me. Ultimate dealmaker. Didn't do any research, still wins the deal.

• 1:32:00Jordi Hays?

  And so it's this, it's this interesting because he breaks all the, all the trends of, he's exactly the opposite of, of Warren Buffett.

• 1:32:07John Coogan?

  Totally, totally.

• 1:32:08Jordi Hays?

  Right, Warren Buffett is heavily researched, sort of slow, moving, builds these positions, you know, over time. Make, takes a position, then starts marketing and things like that. He's the opposite where, where he's coming in and he's clearly brilliant and gifted and a brilliant entrepreneur. But from an investment standpoint, he breaks all the rules, right? He's not even doing market research before offering to do a hundred million dollar investment.

• 1:32:34John Coogan?

  Crazy, to not know the competitors.

• 1:32:36Jordi Hays?

  Yeah.

• 1:32:37John Coogan?

  And just be like, yeah, like you guys, but also I will kill you if you don't let me invest. And so Yahoo accepts the hundred million dollar offer, they IPO in 1996, like very shortly after this deal goes through. And the share price soared on day one, Masa made a hundred and fifty million dollars immediately.

• 1:32:53Jordi Hays?

  And which again, at this point in time, doesn't really make a dent in his net worth, right? Like he, he had taken SoftBank public at a three billion dollar market cap. Sure, a hundred and fifty extra bones is not a bad thing.

• 1:33:07John Coogan?

  I mean, Yahoo continued to rip post IPO all the way.

• 1:33:10Jordi Hays?

  I know, I know.

• 1:33:11John Coogan?

  And I, I

• 1:33:11Jordi Hays?

  But I'm just saying, I think you'll realize through looking at Masa's, the reason that later in his life, he starts to make these crazy side lord, size lord, Giga Chad, Oh yeah. Omega long bets is because he's had instances like later when he invests in Alibaba. And prints tens and tens of billions of dollars.

• 1:33:30John Coogan?

  Yep.

• 1:33:30Jordi Hays?

  You know that he wished he just massively sized up that position.

• 1:33:33John Coogan?

  Totally, totally.

• 1:33:34Jordi Hays?

  And so that that leads to sort of 10, you know.

• 1:33:37John Coogan?

  He understands concentration.

• 1:33:38Jordi Hays?

  You know, right now.

• 1:33:38John Coogan?

  There's too many VCs who are like, yeah, I'm in this amazing company. I got a quarter percent, you know, because I got I got diluted down.

• 1:33:46Jordi Hays?

  Just a logo at that point.

• 1:33:47John Coogan?

  And I got crammed down on this one round. I couldn't get to the ownership percentage and the founders only wanted to do a 10% round. And I only took 2% of it, all this stuff. But I mean, Yahoo, like the wealth creation at Yahoo is really underrated in the Silicon Valley story. Like when I got to Silicon Valley, you'd meet a lot of Gen Xers and a lot of them were like, oh yeah, I was early at Yahoo. And then you're like, okay, this person's like cool and like kind of smart, but not like generational talent. You go to their house, like a $40 million mansion in like Menlo Park. Because there was just so much wealth created from that IPO and a lot of liquidity.

• 1:34:18Jordi Hays?

  Yeah.

• 1:34:18John Coogan?

  And so it was a huge, huge thing that led to, you know, a rarified air around anyone associated with Yahoo. And then also just a kind of Yahoo mafia that spawned and built a bunch of companies. And it was kind of like the Facebook of the day, but it didn't have staying power whatsoever. And so it eventually unwound. But so once he gets liquidity from that, he's he's hooked on deal making. And so from 1996 to 2000, he invests in 250 internet startups.

• 1:34:46Jordi Hays?

  Generational run.

• 1:34:47John Coogan?

  Deal a week.

• 1:34:49Jordi Hays?

  Yeah.

• 1:34:49John Coogan?

  And he emphasizes.

• 1:34:50Jordi Hays?

  And you know, there were some weeks where, you know, some weeks he probably did five.

• 1:34:53John Coogan?

  Oh, yeah.

• 1:34:53Jordi Hays?

  And other weeks he was back in his Tokyo pad.

• 1:34:56John Coogan?

  He's making calls, okay, yeah, what is it? Oh, who are your competitors? Okay, I'll invest in them. Okay.

• 1:35:00Jordi Hays?

  Yeah, one thing that's interesting, a lot of his career, you know, he had his time in the valley, but a lot of his career, he spent working and living in Tokyo.

• 1:35:10John Coogan?

  Yep.

• 1:35:10Jordi Hays?

  And just sporadically traveling to places like Davos, you know, or California, things like that.

• 1:35:16John Coogan?

  And so he's basically just making a, he's not trying to pick winners. He's just trying to ride the internet wave. So he's not not doing a lot of due diligence, enormous volume. And it's a good bet.

• 1:35:27Jordi Hays?

  He created the Tiger Global Playbook.

• 1:35:29John Coogan?

  Tiger was the same thing. Tiger just timed it terribly, but Masa originally.

• 1:35:33Jordi Hays?

  Tiger actually did way more due diligence because they would hire like. Bain consulting.

• 1:35:38John Coogan?

  It was still pretty quick.

• 1:35:39Jordi Hays?

  Still, like, they were doing market research.

• 1:35:41John Coogan?

  Totally, totally.

• 1:35:41Jordi Hays?

  Mas is just vibes based, ripping checks.

• 1:35:44John Coogan?

  And I mean, we should do the Tiger story at some point, but they were very active in, in Asia around this time shortly after this, too. Made a lot, made a ton of money there.

• 1:35:53Jordi Hays?

  Mas is not just scaling the investments, he's scaling the firm. So he launches basically teams in South Korea, Japan, Hong Kong, Australia, India, Mexico, Brazil, Argentina. So all, you know, over the last, you know, decade, you've had VCs being like, oh yeah, we're doing a lot in LatAm. We're doing, you know, we're doing stuff in India. We got bets in Pakistan. And, and meanwhile, Mas has already been in all those places just spamming checks. It's like you on the, you know, with the.

• 1:36:23John Coogan?

  The dealt machine, yeah.

• 1:36:24Jordi Hays?

  You know.

• 1:36:25John Coogan?

  Spam them. And so he makes $15 billion in just a few years and he starts to double down once he meets Jack Ma of Alibaba. And so Alibaba's scaling, they need additional capital. Goldman Sachs, who was Alibaba's previous investor, was reluctant to keep funding it, didn't really see the massive potential there and was looking at more on a spreadsheet basis. And so Mas meets Chinese.

• 1:36:49Jordi Hays?

  First mistake.

• 1:36:49John Coogan?

  Yeah, for sure.

• 1:36:50Jordi Hays?

  Ignore spreadsheets.

• 1:36:51John Coogan?

  For sure. And so he meets Chinese tech entrepreneurs and he sees a glint in Ma's eyes.

• 1:36:56Jordi Hays?

  And one, one thing about Mas is like, you need to understand this run as he is a degenerate gambler because like he grew up in casinos. Like, you know, these Pachinko clubs.

• 1:37:08John Coogan?

  And he had so many wins.

• 1:37:09Jordi Hays?

  And his dad was fully comfortable with making, you know, going up one month and losing it all the next month and just keeping it rolling.

• 1:37:16John Coogan?

  Yeah, beta, beta. Beta. And so they shake on a deal 20 million on a $100 million valuation, but he winds up getting 34% of Alibaba through as the deal progresses. And so the critical advantage here is that Mas sat on Cisco's board and saw router sales to China exploding, indicating massive internet expansion. So he got some insider intel, understood the market was growing, went in, found a targeted bet and ripped a check. What's probably missing from this story is that he. Probably wrote a hundred other $20 million shacks and none of them went, went anywhere, but it doesn't matter because he got, he got the elephant. He bagged the elephant. And so the dot com crash was rough for him.

• 1:37:57Jordi Hays?

  Wait, let's talk about the Alibaba investment real quickly. So he turned $20 million into a $72 billion position, which I think is, I think is actually the greatest.

• 1:38:08John Coogan?

  I think it might be.

• 1:38:09Jordi Hays?

  The greatest venture bet of all time.

• 1:38:11John Coogan?

  Yep. It's hard to measure because I think it sold off a ton during the dot com crash, but at the current valuation, and I, and I think he still owns a huge chunk of Alibaba, right? Because that was one of the, one of the positions that they were thinking about unwinding to do the Stargate deal.

• 1:38:28Jordi Hays?

  Yeah.

• 1:38:30John Coogan?

  So interest rates rise in 2000, the stock market plummets and many dot coms with shaky business models went bankrupt. SoftBank's market cap plunged 99%.

• 1:38:41Jordi Hays?

  Yeah. So, so to be clear, so this was in March of 2000. In January, there he was giving a talk in Tokyo at this like very kind of cool underground sort of disco type club to all these. And the Japanese culture at the time was very much salary men, you know, you worked a good income and it was sort of seen as boring. And so Masa got all these guys in a room and it's been described as being almost like a get rich quick scheme because he was pointing around the room being like, you're going to be worth $50 million. You're going to be worth $100 million. You're going to be worth $100 million and just like going around the room like that. And it really seemed like that and he genuinely believed it.

• 1:39:22John Coogan?

  Totally.

• 1:39:22Jordi Hays?

  And I'm sure many of those people went on to start, you know, important companies, but he was, he, I do believe that at every market top.

• 1:39:34John Coogan?

  Yep.

• 1:39:34Jordi Hays?

  He still believes, which is why he gets smoked, right? He's not the guy, he doesn't really.

• 1:39:39John Coogan?

  No, he never sells early.

• 1:39:40Jordi Hays?

  He never sells early.

• 1:39:41John Coogan?

  Yep. Which is, which is a drawback for a lot of big investors who have the ability to find a fantastic entrepreneur, see trends, but then they get pessimistic at the last second and say, ah, this must be capping out. I've made so much money. I mean, the whole benchmark Uber story, people are like, you know, maybe that was like, they were like, looking at, well, you know, we're each going to take home a billion dollars individually. Like this is retirement money. Maybe we got to get out, something like that. And there's a little bit of internal, you know, devil on the shoulder telling you, hey, uh, this is, this is too good to pass up. But even though he's losing so much money, uh, he personally lost $70 billion, which is a record at the time. Alibaba is surviving.

• 1:40:21Jordi Hays?

  Did we hit the size?

• 1:40:22John Coogan?

  I think we take a moment of silence.

• 1:40:23Jordi Hays?

  Moment of silence, but it's almost like losing 70 million, $70 billion means you made that much.

• 1:40:30John Coogan?

  Yeah.

• 1:40:30Jordi Hays?

  Which should be.

• 1:40:31John Coogan?

  Gone but not forgotten. Let's hit the size gone just a little bit. Boom. There we go.

• 1:40:35Jordi Hays?

  For the run up and the rundown.

• 1:40:37John Coogan?

  And so, uh, he, he makes it through with the Alibaba stake and then he starts launching more companies. Yahoo broadband, Japan telecom, Vodafone Japan, rebranded as SoftBank Mobile.

• 1:40:47Jordi Hays?

  And this was smart because he found the area of tech that had durable revenues.

• 1:40:53John Coogan?

  Totally.

• 1:40:53Jordi Hays?

  People would pay for.

• 1:40:55John Coogan?

  Yep.

• 1:40:55Jordi Hays?

  An internet connection. They would pay for cell service, you know, things like.

• 1:40:59John Coogan?

  And disaggregated from the application layer.

• 1:41:01Jordi Hays?

  Yeah.

• 1:41:02John Coogan?

  So it doesn't matter if Yahoo wins or Google wins or Excite wins. If you own the broadband, broadband demand is going to increase.

• 1:41:08Jordi Hays?

  And today he still has a huge position in T-Mobile.

• 1:41:11John Coogan?

  Yeah, that's right.

• 1:41:12Jordi Hays?

  Certain positions that he just.

• 1:41:13John Coogan?

  Trying to merge.

• 1:41:14Jordi Hays?

  You know, kept, kept riding. But so the, the chaos of the post 2000, um, you know, the, the, the actual like dot com crash was because there were all these businesses that Masa was hugely invested in that were like dogs.com.

• 1:41:30John Coogan?

  Yeah.

• 1:41:30Jordi Hays?

  And be like. Basically a service where you could buy dogs online and it turned out that people were still just buying dogs from like, you know, regular kennels and stuff like that.

• 1:41:40John Coogan?

  And so you can think about the early 2000s as kind of like back to the basics, rebuilding with like the less frothy companies, riding the Alibaba stock, rebuilding SoftBank back up. And then in 2010, he releases this 30-year vision presentation and this thing is a bombshell. In June of 2010, it's 133 slide deck with outsized predictions like advancements in artificial intelligence will surpass the human brain, life expectancy in Japan will reach 200 years, and a new era of hyper-connected communication will be upon us. And so he, his central philosophy is the information revolution will bring happiness for everyone.

• 1:42:19Jordi Hays?

  So I love that even today, he does.

• 1:42:22John Coogan?

  Similar things.

• 1:42:23Jordi Hays?

  Well, he, his, his, he's a master marketer and salesman, right? He's a deal maker. So he's got to sell these deals. And he would even, despite his limited English, he would know the simple words to say, "information revolution to bring happiness for everyone", right? It's very sort of simple.

• 1:42:42John Coogan?

  It's very intelligible. It's not, it's not techie mumbo jumbo about scaling curves and H100s and all this other stuff. It's like, anyone can understand.

• 1:42:50Jordi Hays?

  Even his more recent decks have these very simplified.

• 1:42:53John Coogan?

  Yep.

• 1:42:54Jordi Hays?

  People, they're, they're so simple.

• 1:42:56John Coogan?

  People make fun of them.

• 1:42:57Jordi Hays?

  People make fun of them, but then they end up being correct.

• 1:42:59John Coogan?

  Yep, they do.

• 1:43:00Jordi Hays?

  In many ways.

• 1:43:01John Coogan?

  And so the Vision Fund is born on 20, in 2017. He conceptualizes it in 2016 during a flight to the Middle East. He wrote down a target of $30 billion, then crossed it out in favor of 100 billion.

• 1:43:13Jordi Hays?

  Quote, what did he say? He said, "Life's too short to think small."

• 1:43:16John Coogan?

  Yeah.

• 1:43:17Jordi Hays?

  And so.

• 1:43:18John Coogan?

  Just tripling the size of your raise. Just, yeah, let's go big.

• 1:43:21Jordi Hays?

  One of the, one of the greatest, probably the greatest fundraiser of all time. Sam Altman's very good at fundraising, yet he still has to go to Masa to really get the job done.

• 1:43:30John Coogan?

  Yeah. Elon's great too, but it's a very different style of pitch, more driven by the science and, and the technology.

• 1:43:38Jordi Hays?

  So he has this famous 45 minute pitch where he's meeting with the Crown Prince of Saudi Arabia, Mohammed bin Salman. In Mas's words, he says, "I want to give you a trillion dollar gift. If you invest 100 billion, I'll turn it into 1 trillion." So MBS ultimately invested 45 billion dollars on the spot catapulting the Vision Fund into existence. They also add a bunch of other investors, Apple's in the Vision Fund, Qualcomm,

• 1:44:05John Coogan?

  Foxconn.

• 1:44:06Jordi Hays?

  UAE's Mubadala, you know, sort of sovereign wealth fund.

• 1:44:11John Coogan?

  SoftBank puts in 28 billion.

• 1:44:12Jordi Hays?

  Yeah.

• 1:44:13John Coogan?

  The funny thing about this is that he goes to MBS and is like, "You gotta invest 100 billion. I'll turn it into a trillion." And MBS is like, "That's crazy, but I'm still gonna give you 45."

• 1:44:24Jordi Hays?

  Yeah.

• 1:44:25John Coogan?

  It's like a total shoot for the...

• 1:44:26Jordi Hays?

  You're good for my 45.

• 1:44:27John Coogan?

  I'm good for my 45. And it's funny because his original target was 30. He sized it up and still exceeded that with the first check.

• 1:44:33Jordi Hays?

  Yeah, and there's been this idea in tech that Middle Eastern money is easy to get.

• 1:44:40John Coogan?

  Yeah.

• 1:44:40Jordi Hays?

  And that perception is only because there's a lot of capital out there. These relationships take a lot of time.

• 1:44:47John Coogan?

  Yeah.

• 1:44:47Jordi Hays?

  I know, I know a ton of allocators that have had to go visit the Middle East 10 plus times before getting anything done. And so it's not like this was easy. You know, Masa made it look easy because he just rolled over there. He was thinking about doing 30, crossed it out. He liked the 100 to a trillion. But this was, again, a very credible feat by itself. And then SoftBank commits 28 billion dollars of the fund. What Masa has done historically, I don't know exactly, but he also makes venture investments using leverage, which is kind of a tricky situation to get in because, one, venture investments can go down... All the way to zero.

• 1:45:31John Coogan?

  Yep.

• 1:45:31Jordi Hays?

  Right? And yet he still owes that money to someone.

• 1:45:34John Coogan?

  You need the cash flow to offset the debt payments.

• 1:45:36Jordi Hays?

  He would use SoftBank's, you know, actual earnings to help back that up, but then also would lever up other positions. So he would raise debt against, you know, some of his specific positions.

• 1:45:48John Coogan?

  Alibaba stock.

• 1:45:49Jordi Hays?

  And so all throughout this, even from, you know, from the early 1990s to now, he's gone almost bust in like smaller ways that don't even make it into the story because he's just levering up, just going long. Like, he doesn't, you know, I don't think this man has ever been short, you know.

• 1:46:06John Coogan?

  He doesn't have any middle of the road outcomes.

• 1:46:07Jordi Hays?

  Yeah.

• 1:46:08John Coogan?

  It's all 10 baggers or zeros.

• 1:46:10Jordi Hays?

  Yeah.

• 1:46:10John Coogan?

  Which is great.

• 1:46:11Jordi Hays?

  Well, in the case of Alibaba, you know, a 10,000.

• 1:46:14John Coogan?

  10,000 bagger. Yeah. So he focuses on AI, robotics, IOT and consumer tech. He makes bets on Uber, WeWork, ByteDance, Didi, DoorDash, Grab, and then quirkier startups like Zoom for robot pizza and Wag for dog walking. And it's funny because three of those are companies that have been like, oh, this is such a silly idea. It never was going to work. He was so stupid for doing it. And then Uber, ByteDance, Didi, DoorDash, Grab, all banger companies.

• 1:46:40Jordi Hays?

  Yeah.

• 1:46:40John Coogan?

  All very, very good.

• 1:46:42Jordi Hays?

  Yeah. And one thing you'll notice here, he does not, he has no issues investing cross borders. So he has a big presence in the US. He has a big presence in China. And so he's one of the few that's actually threading. I mean, of course, some American venture capital firms have gone and raised Chinese money or invest in China, but he's getting into the best Chinese companies, you know, ByteDance, Didi, the Uber of China. He's, and so really he's a, he's a truly global deal maker. Like he can go into any room and make stuff happen.

• 1:47:15John Coogan?

  And he's really good at being the capital that bridges these huge deals. Like, I'm pretty sure the Uber and Didi deal, like having, having SoftBank bridge those two companies and put money into both in like this interesting way.

• 1:47:30Jordi Hays?

  Yeah.

• 1:47:30John Coogan?

  Is like, what kind of facilitated that? And, and that's just like a wild card. It's kind of the same thing that's happening with Stargate where he comes in and all of a sudden, like Larry Ellison is with. Altman and it's like more of this like Avenger style team coming together because there's so much capital on the table. Everyone's like, okay, yeah, I'm, I'm marching to the same beat of this

• 1:47:48Jordi Hays?

  Yeah.

• 1:47:48John Coogan?

  Drum.

• 1:47:48Jordi Hays?

  And he's oftentimes has the conviction to make stuff happen that otherwise would have never been a part of history.

• 1:47:57John Coogan?

  Totally. Yeah.

• 1:47:58Jordi Hays?

  I, I recently invested in a founder, uh, who will go unnamed that took a couple hundred million dollars from, from a vision fund during 2021 and the pressure that he faced immediate, you know, immediately after investment to deploy it because in hindsight, he's like, how did I spend that much money in such a short period of time? Company ended up, uh, you know, selling it wasn't, wasn't a good, good outcome, but he just said the relentless pressure of like, we gave you this money.

• 1:48:30John Coogan?

  Yeah.

• 1:48:31Jordi Hays?

  A hundred X your business this year.

• 1:48:32John Coogan?

  There's also this interesting dynamic with SoftBank. I've heard from, uh, some folks that have had SoftBank on their board that even though Masa might come in, there's this example with WeWork. He gave Adam Newman, uh, the founder of WeWork, $3 billion on the first meeting and told them to be crazier. So the CEO and Masa, they, they get together, they have a short meeting and it's like the deal's done, but then SoftBank actually comes in and puts in like crazy infrastructure in the board. And so if you sit on a board with a SoftBank board member, there will be audit committees, compensation committees, like they run it like a, like a public company, basically. And so a lot of investors like hate that because they're like, I'm used to having like a one hour strategy meeting with my boys and now I'm like doing like paperwork, which I'm not down with. I just want to let the CEO cook and just do whatever.

• 1:49:15Jordi Hays?

  Yeah. In many ways.

• 1:49:16John Coogan?

  But it's interesting.

• 1:49:17Jordi Hays?

  And in many ways, uh, early on, I think investors would say, this is amazing vision fund, you know, very early, just gave a company that I invested in at an $8 million valuation. They just gave them a hundred million dollars, right? It's some crazy valuation. So the markup's great. Company's super capitalized, but then over time, uh, it ends up being seen as more of a kiss of death because a lot of these companies, unless you were this generational outcome like Uber or DoorDash.

• 1:49:45John Coogan?

  You're really ready to deploy that money.

• 1:49:47Jordi Hays?

  Yeah. And you're legitimately a phenomenal business that's, that's already has some maturity versus something like. You know, Zoom, like the robot pizza company where there's tons of competition. There's clearly no real network effect.

• 1:50:00John Coogan?

  It's called the suicide round. I like that terminology. And there's been a few of them. They lost money on WeWork, obviously, which we've talked about. They lost money on Wirecard, the German payments processor, which collapsed after accounting fraud. Greensill Capital melted down and many Vision Fund startups lacked profitability.

• 1:50:18Jordi Hays?

  What was Greensill? Was it a fund they invested in?

• 1:50:20John Coogan?

  Greensill, I don't remember. I thought it was like Housing or Energy or something like that. And it was a big blow up. And so there's been a lot of those, but he's still in the game.

• 1:50:29Jordi Hays?

  Yeah, and it's tough. Like, the reason, you know, the reason why these rounds ended up being the kiss of death is if you're not profitable, then you raise $300 million and you spend it all.

• 1:50:40John Coogan?

  Yeah.

• 1:50:41Jordi Hays?

  Then you're sitting on this massive preference stack. Nobody else wants to back the company because it's going to be tough to get any money out unless like everything goes perfectly.

• 1:50:50John Coogan?

  And, and the number is so big, you think like, oh, wow, he gave Adam Newman $3 billion and like it basically went to zero. Like, that's so embarrassing. And then you realize that in 2021, SoftBank posted an annual net profit of $46 billion.

• 1:51:04Jordi Hays?

  Yep.

• 1:51:04John Coogan?

  It's like enough to cover, what, 10 of those investments, 15 of those investments without blinking? And so you look at the GP commit on the, on the, on the Vision Fund, they put in, what, 26 or something? 28 billion on 100. Yeah.

• 1:51:19Jordi Hays?

  They can do that all day.

• 1:51:20John Coogan?

  They could do that all day. And it's just like, he's just, the numbers are so big, you can't get, you can't analyze them like it's a traditional fund. Because it's backed by this organization that's just printing cash, printing cash from all of their holdings.

• 1:51:32Jordi Hays?

  Yeah, but now I think their, their actual net income is in the single digit billions. So that was a specific moment in time where they had a lot of things go right, which was just due to COVID and interest rates and.

• 1:51:44John Coogan?

  But he doesn't quit. You only need one. You only need a couple wins to make it all back. Yeah, that's basically what he does every single time. And so in 2022, 2023.

• 1:51:53Jordi Hays?

  And this, this history, going back again to his childhood, he was conscious when his dad was willing to bankrupt the family to go, when they were already super successful, right? So a lot of people look at this and it's like Masa, you're. You've made all these amazing investments. You've built one of the biggest companies in Japan. You've been the world's richest man. Why are you still taking on all this risk?

• 1:52:15John Coogan?

  Yep.

• 1:52:16Jordi Hays?

  And the answer is he's playing the greatest, biggest game that he can play, right?

• 1:52:20John Coogan?

  Yeah.

• 1:52:20Jordi Hays?

  Which is.

• 1:52:21John Coogan?

  And so, I mean, you were right that a year later in 2022, they announced a $27 billion loss. And so they lose money on Klarna. There's a Chinese tech crackdown. And so Alibaba and Didi get hammered by PRC regulations. Very hard to make money as a private investor in China, especially if you're Japanese instead of Chinese. And then it emerges in 2022 to 2023 that he personally owes SoftBank $5 billion due to side deals gone awry.

• 1:52:50Jordi Hays?

  He's just ripping. He's got his main deals.

• 1:52:53John Coogan?

  And he's just like, I have side deals. And I'm like, oh yeah, I'm good for it. Like, I'll write, I'll put this on the ramp card.

• 1:52:57Jordi Hays?

  Yeah, yeah, yeah.

• 1:52:59John Coogan?

  Yeah, just, just, just hit up SoftBank. They'll take care of this billion dollar loss.

• 1:53:03Jordi Hays?

  Yeah.

• 1:53:04John Coogan?

  And so Masa says.

• 1:53:05Jordi Hays?

  Yeah, and this is, this is evident of the way that he operates, which is, he is such a force that he's traveling all over the world, doing deals, committing to things, announcing things that haven't been actually finalized yet. And then telling his team, all right, just make it happen. So it's not, shouldn't be that surprising to anyone that after the chaos of 2020 to 2023, he just happened to like owe his own company $5 billion because of like some other stuff that probably didn't even make it into the news.

• 1:53:38John Coogan?

  It's remarkable. And so he shook it off. He says, when it rains, you open an umbrella. And he's repeatedly insisted that he's embarrassed by the fund's performance, but remains an unshakable optimist. And we saw that comeback. And we didn't even get to ARM, you know, he, he turned something like $20 billion into an $80 billion gain. He's back in the game and he is making AI deals now, ripping checks into OpenAI, working on Stargate.

• 1:54:05Jordi Hays?

  It's just.

• 1:54:06John Coogan?

  He's just not going anywhere.

• 1:54:07Jordi Hays?

  He's so, he's, he's the deal maker, tech mogul that has the, he clearly has a very powerful, very well known in our center, you know, corner of the internet. But if you actually go ask people that maybe even are in tech, but don't really follow the game closely, they won't know him.

• 1:54:29John Coogan?

  Yep.

• 1:54:30Jordi Hays?

  And the story. Is just truly incredible. Grows up in not just poor, but like abject poverty, living with pigs.

• 1:54:39John Coogan?

  Yeah.

• 1:54:39Jordi Hays?

  Like he has, he, he said he has a consistent nightmare around waking up, you know, having these nightmares that he's smelling that the pig sort of fumes, right? And he wakes up like,

• 1:54:50John Coogan?

  Yep.

• 1:54:51Jordi Hays?

  You know, in, in, um, in shock, right? And so to go from that abject poverty to the richest man in the world.

• 1:54:58John Coogan?

  Yeah.

• 1:54:59Jordi Hays?

  Made his, was born in poverty, made his first million in America before he turned 20.

• 1:55:04John Coogan?

  Yeah.

• 1:55:04Jordi Hays?

  Runs it down to zero again, runs it back up, back down to 99% down, runs it back up.

• 1:55:10John Coogan?

  It's so funny.

• 1:55:11Jordi Hays?

  Man, uh,

• 1:55:12John Coogan?

  Doesn't quit.

• 1:55:13Jordi Hays?

  He can't be broke.

• 1:55:15John Coogan?

  No.

• 1:55:15Jordi Hays?

  He's like, he should launch a course.

• 1:55:18John Coogan?

  Yeah.

• 1:55:18Jordi Hays?

  You know, like at this point, like if he, if he ever got down bad enough, he just could launch a course.

• 1:55:22John Coogan?

  Well, yeah, it's so funny because this week that Hacker News comment went viral. That's like, uh, entrepreneurship is like, uh, throwing darts at the dartboard at a carnival. Uh, if you're middle class, you get one throw. If the rich kids get, uh, unlimited throws and the poor kids are working the carnival. And this guy has gotten so many throws and he came from nothing. Just complete validation of that. Yeah, he just figures it out. And, uh, it's funny because that always goes viral and people are like, oh, this is so true. Like this hits so hard. I looked up the dude who posted it. He's never launched a startup. He's never even tried.

• 1:55:54Jordi Hays?

  Yeah.

• 1:55:54John Coogan?

  And so it's, it's clearly just cope, just being like, you know, oh yeah, like I can't do it because like I'm too poor or something.

• 1:56:01Jordi Hays?

  Yeah.

• 1:56:01John Coogan?

  And like, clearly there's a million ways to start the flywheel. And then once you're on the flywheel, you get extra shots. Cause it's like, oh, well, like your last company didn't do well, but yeah, you probably learned a lot and you were a CEO.

• 1:56:12Jordi Hays?

  Yeah. He went in that, in that, when he was in that nightclub, talking to all the Japanese at that time, it was not normal. You know, venture capital didn't really exist in Japan. In the same way it does in America. And he gave this story. He's like, in America, an entrepreneur can start four companies. They all fail. And on the fifth one, they become a billionaire.

• 1:56:31John Coogan?

  Yep. There's so many stories like that.

• 1:56:33Jordi Hays?

  And so the thing, the criticisms of the risky governments and the just crazy risk tolerance are real. We're not, you know, this show is obviously for entertainment purposes only. But the thing that I think everybody should take away from Masa is that extreme radical optimism.

• 1:56:51John Coogan?

  Yep.

• 1:56:52Jordi Hays?

  And he's shown that-

• 1:56:54John Coogan?

  And the ability to be a dealmaker.

• 1:56:55Jordi Hays?

  Yeah.

• 1:56:55John Coogan?

  It's really just a story of dealmaking, in my opinion.

• 1:56:58Jordi Hays?

  Yeah.

• 1:56:59John Coogan?

  It's so underrated in tech.

• 1:57:01Jordi Hays?

  Tech mogul without seemingly ever written, writing a line of code.

• 1:57:05John Coogan?

  Maybe in the very early days.

• 1:57:06Jordi Hays?

  Yeah, like when he was-

• 1:57:07John Coogan?

  But very quickly moved to just, how do I assemble capital effectively?

• 1:57:10Jordi Hays?

  Yeah.

• 1:57:11John Coogan?

  How do I put the puzzle pieces together?

• 1:57:12Jordi Hays?

  This is Sam Altman, too. This is probably why they-

• 1:57:14John Coogan?

  A lot of people. Elon hired Gwen Shotwell to run SpaceX. Like, it's fantastic. It doesn't take away, it actually adds to their, like, their abilities. It's leverage. It's leverage for the team, for the mind. It's fantastic. Well, that wraps up our deep dive on Masayoshi Son and SoftBank. Let's go to a promoted post from your buddy Steve.

• 1:57:34Jordi Hays?

  Oh, also, small note.

• 1:57:35John Coogan?

  Yeah.

• 1:57:36Jordi Hays?

  He's got two daughters. I don't know their relationship status, but brothers. Why don't you, if you send Masayoshi a DM on LinkedIn and say, hello, you know, if you review my profile and you find me compelling, I would love a warm intro to your daughter.

• 1:57:54John Coogan?

  There you go.

• 1:57:55Jordi Hays?

  And he's still, he's married to his wife that he actually met at Berkeley still.

• 1:57:59John Coogan?

  Wow. That's fantastic.

• 1:58:00Jordi Hays?

  Masayoshi always gets the last laugh.

• 1:58:02John Coogan?

  He does, he does. Let's go to a promoted post from Steve.

• 1:58:05Jordi Hays?

  I got a promoted post from my buddy Steve Simone. So yesterday, you sent me this, which was a Chinese drone light show. And can you actually play? No, you can't play that.

• 1:58:15John Coogan?

  No, we can't play the video. We're working on that.

• 1:58:17Jordi Hays?

  We're working on tech here at Technology Brothers. We want to get to the point where we can play videos, but I will just share. So Ben, Benjamin Craker, Cracker?

• 1:58:27John Coogan?

  Who knows?

• 1:58:28Jordi Hays?

  Who knows? The Cracker says, how do you defend against this? Not a rhetorical question. And it's a video of these drone, crazy drone light shows. Steve says, you don't. You have a robot do it for you. And so what ACS is developing, I'd love one of these to put on top of my G-Wagon. But he's developing this sort of autonomous counter drone. Gun that can, I've seen a bunch of demos at this point, but it can take out

• 1:58:53John Coogan?

  Some people have just described it as ACS, gun on truck.

• 1:58:56Jordi Hays?

  Gun on truck.

• 1:58:56John Coogan?

  The end.

• 1:58:57Jordi Hays?

  Yeah, yeah. They should really buy gunontruck.com.

• 1:58:59John Coogan?

  Gun on a truck.

• 1:59:00Jordi Hays?

  Gun on a truck.

• 1:59:01John Coogan?

  And that's the end of the story.

• 1:59:02Jordi Hays?

  But anyways, go check out at Steve Simone and check out their turret. It's pretty awesome. The Bullfrog.

• 1:59:08John Coogan?

  Fantastic. We have another promoted post from Ryan McIntosh promoting our show and promoting an ad in Arena Magazine.

• 1:59:17Jordi Hays?

  And this is also a promoted post for Arena Magazine.

• 1:59:19John Coogan?

  And there's an ad for Ramp in the ad for Technology Brothers in the ad for Arena Magazine, posted by Ryan McIntosh. There's levels to this.

• 1:59:28Jordi Hays?

  Yeah.

• 1:59:28John Coogan?

  And so we whipped up a, an advertisement, full page, full bleed, beautiful, full color, printed in the latest Arena Magazine.

• 1:59:37Jordi Hays?

  And why don't you, why don't you read it, the whole thing, top to bottom?

• 1:59:39John Coogan?

  Sure. So I said, "Technology needed a podcast. Last year, we noticed a problem. While we were listening to the All In Podcast on vinyl, we realized something shocking. It doesn't have ads. No ads for watches, no ads for private jets, not even a plug for Ramp. It's hurting the tech community, but the madness ends today. What if instead of focusing on audience size, a podcast focused purely on profit? What if instead of big political questions, it answered the ones entrepreneurs really care about? Should I get a Ferrari F40 or a Lamborghini Murra? Should I upgrade from a Gulfstream to a BBJ? What's the best Aman property? Technology Brothers is that podcast, focused, profitable, capitalist."

• 2:00:20John Coogan?

  Visit techbrospod.com today and add it to your RSS feed.

• 2:00:27Jordi Hays?

  We, before we dive into the rest of the timeline, we got some questions.

• 2:00:31John Coogan?

  Let's read through some questions.

• 2:00:32Jordi Hays?

  Tyler Rongioni with a phenomenal suggestion. He says, "Get a medieval night helmet for steel man arguments."

• 2:00:38John Coogan?

  Oh, that's fantastic.

• 2:00:39Jordi Hays?

  So much better than.

• 2:00:40John Coogan?

  That's so good.

• 2:00:41Jordi Hays?

  So much better than.

• 2:00:42John Coogan?

  Steel hat, yeah.

• 2:00:43Jordi Hays?

  Than just a steel hat. I mean, we have our tin foil hat, but the medieval knight helmet is a good opposite.

• 2:00:51John Coogan?

  Yeah, we need both of these clearly.

• 2:00:53Jordi Hays?

  And anyways, just J, the letter J says, which one is the Technology Brothers' favorite? YOLO seed round or guac A round? I think it's the mango seed round.

• 2:01:04John Coogan?

  Mango seed round or the suicide A round?

• 2:01:05Jordi Hays?

  Suicide. No, it's more of a suicide B.

• 2:01:08John Coogan?

  Suicide B is typically what happens.

• 2:01:10Jordi Hays?

  Take the 300 million and just die.

• 2:01:13John Coogan?

  They just spend it all on people who don't want to work there.

• 2:01:15Jordi Hays?

  I love a YOLO. I actually like when the first round is just 20.

• 2:01:19John Coogan?

  Yeah.

• 2:01:20Jordi Hays?

  You know, kind of like that incorporation round, 20 on 100. Those ones always work out. Great.

• 2:01:25John Coogan?

  For sure.

• 2:01:26Jordi Hays?

  Next question, Venturi says, I think he's responding to Masa on this deal making. I don't know exactly. He says, sales is massively more valuable than engineering. So Venturi's clearly mugging the engineers listening. So feel free to duke it out in the comments. But in Masa's case, he probably had way more impact on the world by being a dealmaker. He might've been a top 10% engineer. He's a top 0.01%.

• 2:01:51John Coogan?

  Yeah, I think it's clear that he did the 80/20 on the computer science thing, took the classes, got really pilled on technology and understood how exponential curves will affect the future of the world and humanity. And he can still think like a technologist while not actually needing to lead a tech company, be a CTO, be a programmer, do any of that. But he understands the science at a deep enough level, which is important, but.

• 2:02:17Jordi Hays?

  Yeah, he's still not using that knowledge for diligence.

• 2:02:19John Coogan?

  Yeah, yeah. And I mean, we have company, we have friends that buy small companies where people will say, oh, did you do like technical due diligence, look at all the code? And they're like, no, I looked at the Stripe account because if the customers are paying, that's evidence that the code is working.

• 2:02:32Jordi Hays?

  Yeah, or just use the product yourself.

• 2:02:33John Coogan?

  Exactly.

• 2:02:34Jordi Hays?

  Is it a good product?

• 2:02:34John Coogan?

  Is it a good product?

• 2:02:35Jordi Hays?

  I know there's, this has been happening with.

• 2:02:38Jordi Hays?

  With really smart sort of AI ML trained engineers that are now building products at the app layer. Oftentimes, they know so much about the actual technology, but can't translate it into products.

• 2:02:50John Coogan?

  Totally. Like, oh, cool, like, your training and inference costs is so low, that's amazing. But like, what's your product sense like? Are people actually using it? Did you get buy road market entry? Exactly, exactly.

• 2:02:59Jordi Hays?

  Azar says, should companies stop paying dividends to reinvest their dollars into custom letterheads? Yes, obviously. You need to have custom letterheads. We're working on it here. We're actually, you know, behind.

• 2:03:12John Coogan?

  I got some custom letterhead for Christmas.

• 2:03:13Jordi Hays?

  We need like our own actual stacks of paper, even though we're sort of evolving.

• 2:03:16John Coogan?

  I got the business cards. We need TB business cards. I got some personal stationery. I need some TB stationery for sure.

• 2:03:22Jordi Hays?

  Haneel Patel says, I'm planning to do my masters at Berkeley in civil engineering. Should I do it? Should I do it? He's an international student. He says he wants to go become a founder or break into Founders Fund. Both good options. Hopefully, you get, well, you definitely have the first option, Founders Fund. It's tough, tough to get in, but we have at least 50% of this podcast works for Founders Fund. So if you're listening to it, that's a good start. You know, if you want to be a founder, doing a masters in civil engineering might be awesome.

• 2:03:58John Coogan?

  It depends on what you want to build.

• 2:03:59Jordi Hays?

  It could be a huge distraction.

• 2:04:00John Coogan?

  It could be a huge distraction.

• 2:04:00Jordi Hays?

  So if you want to, you know, go into that field, and I'm sure there's a bunch of really crazy, cool opportunities to apply like modern technology within that. So I don't think it's a bad idea, especially if you're, you know, not a US citizen and you want to spend time in Berkeley. I mean, so many, Berkeley's doing a bunch of cool stuff in AI. I don't know if it's in the timeline, but they, I mentioned it earlier, they were able to create a reasoning model for like 450 bucks. So just being in the Bay. I was born in Berkeley. It's a funny, funky town, but you're right there next to San Francisco.

• 2:04:33John Coogan?

  Long going to the Bay. I guess the question is, will this pull forward finding a really, really valuable idea? And sometimes being in a masters program can be a conduit to industry where you might identify a big problem and identify customers. Sometimes you can bootstrap that without that, you know, on the resume. You could just go work straight at a company and realize, oh, this stuff's way broken. I got to spin this out and build something.

• 2:04:56Jordi Hays?

  Yeah.

• 2:04:57John Coogan?

  So there's a bunch of options.

• 2:04:58Jordi Hays?

  Yeah, you're probably going to have to go from your civil engineering masters to work at a company to truly just. Figure out. So the question is, can you just go straight to the company?

• 2:05:07John Coogan?

  Yep.

• 2:05:07Jordi Hays?

  Get those learnings. But starting companies is not a race. There's just so many examples at this point of people that started their first company at 40 years old and they needed all that experience to get to the point where they had the knowledge. One, two more questions. Do the Technology Brothers have a favorite pen or pencil brand from Azar? Again, I actually don't. My handwriting is terrible.

• 2:05:29John Coogan?

  Mont Blanc, we promoted on the show before.

• 2:05:31Jordi Hays?

  I'm using a Bowery Hotel pen here.

• 2:05:35John Coogan?

  But also hire a calligrapher.

• 2:05:37Jordi Hays?

  Yeah, for me, it's just gotta go higher.

• 2:05:40John Coogan?

  Full time.

• 2:05:41Jordi Hays?

  Sergio says, do you guys publish anything in the paper form? Or do you have a website? Yeah, we have tech bros pod.com and a new website that is already in the works with a new domain that we're excited to share soon. And then we don't do anything in paper yet. We're experimenting.

• 2:05:57John Coogan?

  Auction these off. They're valuable.

• 2:05:59Jordi Hays?

  Kids books. We've talked about. We talked about making a book that's just why you shouldn't use leverage. And then it's just 100 empty pages.

• 2:06:09John Coogan?

  Love that.

• 2:06:11Jordi Hays?

  But, but yeah, we stick with Arena right now. That's our magazine of choice and.

• 2:06:16John Coogan?

  And Colossus.

• 2:06:17Jordi Hays?

  Colossus, of course. So, thank you guys for the questions.

• 2:06:20John Coogan?

  Fantastic. Well, let's go to Grant. He says substituting three hours of daily scrolling through X.com with three hours of playing Factorio while listening to the Tech Bros Pod. Gets me up to date on the news I care about, plus teapot bangers of the day while destroying biter nests and juicing mining productivity. I have a similar hack for work. Instead of writing code for eight hours like a pleb, I spend five minutes writing GitHub issues for Mentat. Alt Tab and spend 10 minutes expanding my green circuit board, then flip back to GitHub and review PRs. Mentat is the fastest, most capable AI agent for coding that plugs directly into your GitHub workflow. Log in at mentat.ai for $30 worth of credits free and redirect your engineering talents toward expanding your base.

• 2:07:01Jordi Hays?

  Brilliant, brilliant post.

• 2:07:04Jordi Hays?

  Talks about the show.

• 2:07:05John Coogan?

  Yep.

• 2:07:06Jordi Hays?

  Talks about the content.

• 2:07:08John Coogan?

  Yep.

• 2:07:09Jordi Hays?

  Puts an ad in it.

• 2:07:09John Coogan?

  I love it. I love it. This is peak.

• 2:07:11Jordi Hays?

  One post, you're gonna have a ton of different content in a post, including ads.

• 2:07:15John Coogan?

  Yeah.

• 2:07:16Jordi Hays?

  Love to see it.

• 2:07:16John Coogan?

  Well, we got another, we got another promoted post by none other than Lulu Maservi. We got a fantastic opportunity. She says, wanted a founding engineer to join roster to work with me on a novel tool for founders. Like Awemo, you will be fully self-driving. Like the media's portrayal of Awemo, you will go through walls if it's the shortest path. You will choose your own tools for the job, but experience with LLMs with tool use will help greatly, especially if it involves building long chains of structured and unstructured outputs. You are creative and tasteful with a strong sense of style and vibes. You have a finely tuned cringe detector and ability to read the room. If you believe you are the person to do it, apply at the link below. Fantastic job opportunity. If you're looking for your next thing, hit up Lulu.

• 2:07:58Jordi Hays?

  I mean, that's actually the craziest opportunity that I've seen in a while.

• 2:08:04John Coogan?

  Yep.

• 2:08:04Jordi Hays?

  And, and truly, if you're Omega cracked, go apply for that or DM us and we'll let you know if we think, you know, you'd be a good fit. Lulu's phenomenal and the kind of companies you'd be building products for are legitimately some of the best founder mode companies in the entire world. So crazy opportunity.

• 2:08:25John Coogan?

  Well, we got some personnel news. We got some breaking news here. Scott Belsky, after seven years at Adobe, post-acquisition of Behance, he's shifting gears over the coming months and jumping into the fast-evolving world of filmmaking and storytelling, a longtime passion. He's joining A24, an independent studio he has long admired as a partner, and he will be kicking off a few special projects within. Fortunately, he'll remain in the extended family of Adobe and look forward to working with them as a future tech partner. You want to break it down, Jordan? What else you got for me?

• 2:08:57Jordi Hays?

  This is absolutely massive. I can't, you know, if it's non-obvious, he's going to work on AI within A24.

• 2:09:06John Coogan?

  Yep.

• 2:09:06Jordi Hays?

  He doesn't necessarily say that explicitly, but A24 is one of the, you know, greatest film, you know, production, media companies in the world.

• 2:09:14John Coogan?

  Yep.

• 2:09:15Jordi Hays?

  Josh Kushner also made a big investment in A24, size lord that we've talked about. On the show before, and I'm just so excited to see what comes out of this. This is

• 2:09:24John Coogan?

  It'll be fantastic.

• 2:09:25Jordi Hays?

  Exactly, you know, for so long, it feel, you know, we live here in LA.

• 2:09:29John Coogan?

  Yep.

• 2:09:29Jordi Hays?

  For so long, it feels like Hollywood has just been so behind the times in terms of actually innovating. They obviously, there's a, you know, a massive sort of CGI industry here.

• 2:09:40John Coogan?

  Yep.

• 2:09:41Jordi Hays?

  A cottage industry around LA, but the opportunities of applying generative AI to filmmaking are so obvious, yet we still need the best talent in the world to actually implement that and make that happen. So Scott going over to A24, I imagine he's going to build out a massive, you know, team of really bright technologists that are going to allow generative AI to actually compete with traditional filmmaking.

• 2:10:10John Coogan?

  Yep.

• 2:10:10Jordi Hays?

  Which is going to be incredible for consumers.

• 2:10:14John Coogan?

  Yep.

• 2:10:14Jordi Hays?

  Period.

• 2:10:14John Coogan?

  Absolute dog.

• 2:10:15Jordi Hays?

  An absolute dog.

• 2:10:16John Coogan?

  Belski on the move. Stay tuned for what's next.

• 2:10:19Jordi Hays?

  And yeah, this is massive.

• 2:10:21John Coogan?

  What a pickup by A24. You'll love to see it. Well, we have another massive announcement breaking here on the show. You definitely haven't seen the tweet before. Eleven Labs has raised $180 million Series C to give every AI agent a voice. Let's go. Oh, with authority.

• 2:10:40Jordi Hays?

  With authority.

• 2:10:41John Coogan?

  You'll love to see it. The past year has been about building the foundations of AI audio. Now they are focused on making speech the standard for how we interact with technology.

• 2:10:51Jordi Hays?

  Yep.

• 2:10:51John Coogan?

  And so if you haven't checked out Eleven Labs, they have some fantastic abilities to turn text into audio that sounds perfectly human.

• 2:10:59Jordi Hays?

  Here's a homework assignment. Download a transcript of this show, all three hours. Put it into Eleven Labs, generate it in some exotic sounding voices.

• 2:11:08John Coogan?

  Give us Irish accents.

• 2:11:09Jordi Hays?

  Irish accents, like

• 2:11:10John Coogan?

  Make Jordy Scottish.

• 2:11:12Jordi Hays?

  Make me sound like Pat, old Patty Collison.

• 2:11:14John Coogan?

  Yeah, I want to sound like

• 2:11:17Jordi Hays?

  It's interesting, some of these models-

• 2:11:18John Coogan?

  Sean Connery. Put me in Sean Connery voice, please.

• 2:11:21Jordi Hays?

  Please. Some of these, you know, voice generation tools have some limitations.

• 2:11:26John Coogan?

  Yep.

• 2:11:26Jordi Hays?

  They let you do Irish, Scottish voices. They don't always let you do-

• 2:11:29John Coogan?

  Japanese.

• 2:11:30Jordi Hays?

  Japanese, which is unfortunate.

• 2:11:31John Coogan?

  We were trying to generate some Masa-

• 2:11:33Jordi Hays?

  But maybe 11 Labs can do a Masa, you know, adjacent voice-

• 2:11:37John Coogan?

  Yes.

• 2:11:37Jordi Hays?

  That we could leverage, because we have a lot of uses for that.

• 2:11:39John Coogan?

  For sure.

• 2:11:39Jordi Hays?

  And we would, we would happily pay a few million bucks a year to get access- To that voice.

• 2:11:45John Coogan?

  Fantastic.

• 2:11:46Jordi Hays?

  But congrats to the 11 Labs-

• 2:11:47John Coogan?

  Congrats to the 11 Labs team and everyone involved in that deal.

• 2:11:50Jordi Hays?

  Hopefully there was some cheeky secondary in there.

• 2:11:52John Coogan?

  Hopefully. Let's go to an evolving story. This is heartbreaking. Yesterday, if you were watching the show, we gave Mas, brother of the week-

• 2:12:01Jordi Hays?

  We did.

• 2:12:02John Coogan?

  For his amazing work putting up a swing in a public park in San Francisco. He says, "They took the swing down. Apparently, fun is illegal."

• 2:12:12Jordi Hays?

  That's insane.

• 2:12:13John Coogan?

  Isn't this crazy?

• 2:12:14Jordi Hays?

  That's insane.

• 2:12:14John Coogan?

  And the picture is of someone like with the government saying, "No swings."

• 2:12:19Jordi Hays?

  It's like, hey, we know somebody's actively breaking into your car right now, just like 10 feet over there-

• 2:12:24John Coogan?

  But this is the priority.

• 2:12:25Jordi Hays?

  But we're gonna take the swing down.

• 2:12:25John Coogan?

  This is the priority. How, it's just so bad. It's so bad. It is the perfect symbol of everything that is wrong with the government prioritization here. It's, it's really just so ridiculous. Just, uh, the Mas brought joy to the world, uh, went viral and was immediately shut down by the long arm of the law. And so, uh, Mas, please don't go full Ross Ulbricht mode. Keep things legal. Maybe there's a way to get through this. We'll get the swing back up. Maybe a petition. Maybe we'll go viral. Maybe we will upend the entire San Francisco government, but we'll do it entirely legally and we won't need to uh, create a massive, uh, illegal drug network to do it.

• 2:13:09Jordi Hays?

  Great.

• 2:13:09John Coogan?

  Uh, let's go to Jason Yanowitz. He says, "Tether, 13 billion net profits last year. Every financial institution will read this and ask, 'Why don't we have our own stable coin?'" So I don't know that much about Tether. I know there's been like rumors swirling, but the Tether organization seems to be on a tear.

• 2:13:28Jordi Hays?

  Yeah. So they've had a lot of people that sort of question their business, right? It's sort of this, they, they control tens of billions of dollars of assets. I don't know the market cap of USDT, but whatever it is, if they have a hundred billion dollars in market cap, that is a hundred billion dollars of basically cash that they have on their balance sheet. And so

• 2:13:49John Coogan?

  They invest that in treasuries. They earn some interest rates. They give you some of that, but they keep a little bit.

• 2:13:53Jordi Hays?

  Some of it. That's generally the business model. It's a good business model.

• 2:13:56John Coogan?

  Yep.

• 2:13:57Jordi Hays?

  And so, yeah.

• 2:13:57John Coogan?

  The flow of money, it's easy to just take a little slice.

• 2:14:00Jordi Hays?

  And so Tether has been also pretty aggressive on the M and A front.

• 2:14:03John Coogan?

  Yep.

• 2:14:04Jordi Hays?

  Making, you know, if you're doing anything sort of adjacent to them and getting traction, they'll probably make an offer and they, they make typically control offers. So they'll say, we want to buy your business, but we want 51%.

• 2:14:16John Coogan?

  Yep.

• 2:14:18Jordi Hays?

  And so they've been on a tear, very under the radar. They don't have as much hype because nobody's printing, you know, thousand X returns off of Tether.

• 2:14:27John Coogan?

  Yep.

• 2:14:27Jordi Hays?

  They did have some crisis points where if you remember after, after all the FTX stuff.

• 2:14:33John Coogan?

  There was a lot of questions.

• 2:14:34Jordi Hays?

  USDT was trading at less than a dollar, which a lot of people were like, this is free money.

• 2:14:39John Coogan?

  Yeah.

• 2:14:39Jordi Hays?

  But people were worried that

• 2:14:40John Coogan?

  Not chaotically. It wasn't down to 10 cents. It was down at like 99 cents or 97 cents or something.

• 2:14:45Jordi Hays?

  I think it got even more than that at one point, but, um,

• 2:14:48John Coogan?

  It's rough.

• 2:14:48Jordi Hays?

  But, but yeah, still they were, you know, people were

• 2:14:51John Coogan?

  But for those people, it was free money.

• 2:14:53Jordi Hays?

  But the interesting thing is because it's an international organization, there's not as much, um, there's not necessarily, you know, the FUD around Tether has been, are they just sort of taking a dollar and printing $2 on chain or something like that? But they've weathered every storm to date and we'll see what happens. And absolutely meteoric numbers.

• 2:15:16John Coogan?

  You'll love to see it. Should we hit the size going for that? Little one?

• 2:15:21Jordi Hays?

  Little one. 13 billion in net profits.

• 2:15:23John Coogan?

  Pretty good. Let's go to Varanam Ganesh. He says, "If you're not subscribed to Pirate Wires already, you really should, missing out on bangers like these." From Riley Nork, he says, "In the wake of Trump's recent executive order renaming the Gulf of Mexico after its namesake, superior northern neighbor," I said what I said, "Google Maps announced it would indeed rechristen the ocean basin as the Gulf of America, but don't pop bottles on your boat just yet. Right after the change was announced, Google reclassified the US as a 'sensitive country,' a label reserved for nations with strict governments and border disputes like China, Russia, and Iraq. In other words, they're virtue signaling. Google wants to pretend they're here for tech's vibe shift, but behind closed doors, they're rebranding Trump's America as an authoritarian dictatorship. Bold strategy

• 2:16:06John Coogan?

  for a company with an ongoing antitrust suit, a laundry list of foreign governments that want to rob them blind, and a president, their only real hope against those governments, who famously, to borrow your phrase, 'sensitive to public ridicule.' Good luck." And the reason

• 2:16:19Jordi Hays?

  I just like this ad copy.

• 2:16:21John Coogan?

  BG is sharing this is because there's some fantastic ad copy, which we love to highlight sponsors. We love to pass through ads when we're reading content. If it has ads, you're gonna hear the ads.

• 2:16:31Jordi Hays?

  Sponsor acknowledgement.

• 2:16:32John Coogan?

  Sponsor acknowledgement. Says Warp fixes this. "If I run the FBI, we're shutting down headquarters on day one and reopening it as the museum of the deep state. Cash Patel's words, not ours. Here's the thing, your business has a deep state too. It's called the HR department. You know, the bureaucratic overlords who bury you in paperwork and pointless meetings. Warp shuts them down cash style by automating payroll, navigating state tax compliance, and making international contractor payments effortless, so founders can focus on building, not busy work."

• 2:17:00Jordi Hays?

  One of my portfolio companies got kicked off of Rippling with zero notice, and Warp got them live again the same day.

• 2:17:07John Coogan?

  It's great. You'll love to see it.

• 2:17:08Jordi Hays?

  Love to see it.

• 2:17:09John Coogan?

  Let's go to Balaji. He's talking about our favorite topic, technology brotherhood. He says, "We need the tech bro. Massachusetts equals tech. Virginia equals bro. The synthesis is greatness. Lift weights, yes, but train weights too." And I agree. He goes on to expand on the analogy, doing a little bit of Coogan's Law here. Coinages, Balaji, fantastic coiner. He loves coining things.

• 2:17:31Jordi Hays?

  Big coiner.

• 2:17:32John Coogan?

  Big coiner, Bitcoiner, and

• 2:17:34Jordi Hays?

  Worked at Coinbase.

• 2:17:35John Coogan?

  Coinbase. Coinages. All of the above. To explain, Virginia's time ended long ago and today is just another US state, but it was originally the home of the masculine, noble and brave Cavaliers. Massachusetts' time is now ending too, but for almost 400 years, it was a center of higher learning. That's why Harvard and MIT are there. These were two of the most important American colonies. In a sense, they compete and cooperate every 100 years. In the mid 1600s, they fought back in England itself. First, the Cavaliers, the moose for Virginia, then the roundheads migrated to Massachusetts. But where does he learn this stuff? I've never heard those terms before. Roughly speaking, the Cavaliers were right and the roundheads were left, and the English Civil War was over the same themes of hierarchy versus equality.

• 2:18:19John Coogan?

  In the 1700s, they worked together to beat Britain and found the United States. In the 1800s, their descendants fought in the Civil American War. And in the 1900s, they worked again together to win World War II and found the American Empire. Now, in the 2000s, they are fighting once again over the same themes of hierarchy, red versus equality, blue. Even if the geographic center of red has been displaced somewhat to the south and the geographic center of the blue has been dispersed across the northeast. Others have written about this as well. See the Fourth Turning, Turchin, Yarvin, Walter Russell Mead, Albion Seed, and Scott Alexander's review. My view is that red and blue will unfortunately smash each other to pieces over the next several years, and then the gray will have to pick

• 2:19:00John Coogan?

  up the pieces. Gray is tech in its modern incarnation of the tech bro. Tech is the intellectual successor to Massachusetts as the migration to the internet of Harvard's best proves. Bill Gates, Zuck, and Paul Graham all moved away from Harvard in the literal sense, and of course Larry Page, Steve Jobs, Vitalik, and many other college dropouts moved away from Harvard in the metnomics sense. But in its more recent tech bro incarnation, tech is also becoming the virile successor to Virginia. Elon, Zuck, and Palmer Lucky are examples of tech bros respectively becoming leaders of men, packing on muscle and getting serious about the military. Amazingly, this synthesis, the tech bro, did not exist years ago, but it was memed into reality by blue attacks and has the balance that blue and

• 2:19:46John Coogan?

  red both lack. Train weights, yes, but also lift weights. I think this synthesis, the tech bro, will be crucial to what follows. After all, the tech bro founded America. Let's see what they found next. What do you think?

• 2:20:00Jordi Hays?

  I don't want to say anything at all because I feel like it would take away from that dramatic, powerful prose. I think he nailed it.

• 2:20:08John Coogan?

  Yeah.

• 2:20:09Jordi Hays?

  If, if I had to fight in the culture war, I would want biology to be

• 2:20:15John Coogan?

  By my side. Yeah. My, I love it. It's great. I, I think, I mean, we literally worked out today. It was leg day. I'm super sore. And then we dove into semi-analysis and talked about training weights and, and AI semiconductors for an hour. And that is the fantastic dichotomy of the tech bro that is so enjoyable and wonderful, and I think value creative as well. And it's interesting because during the, the, the mid 2010s, when tech bro was a slur, we could have just said, no, it's actually fine. It's fine to be a programmer and, and lift weights and program. But there just wasn't enough,

• 2:20:56John Coogan?

  like memetic or social, like power to actually have a post like this that everyone says, yes, I'm on board. It took Coinbase. It took.

• 2:21:04Jordi Hays?

  And now you have people like Word Grammar, who did one of the best analyses of the DeepSeek research paper. He's an amateur powerlifter.

• 2:21:14John Coogan?

  Oh, he's jacked.

• 2:21:15Jordi Hays?

  And I would actually push him to say, you know, keep being a professional programmer, but become, also become a professional powerlifter, right? Don't limit yourself.

• 2:21:23John Coogan?

  He's diced.

• 2:21:23Jordi Hays?

  He's, he's diced.

• 2:21:24John Coogan?

  He's diced.

• 2:21:25Jordi Hays?

  He's jacked.

• 2:21:25John Coogan?

  That's fantastic. We love to see it.

• 2:21:27Jordi Hays?

  Follow Word Grammar.

• 2:21:29John Coogan?

  Well, let's go to this post by Andre. Funny meme. I like this meme format. It's Sydney Sweeney and Ana de Armas recently had a spontaneous exchange about which characteristics would constitute a sixth generation fighter aircraft. Sydney, no standing vertical tail surfaces, the ability to operate AI enabled drone wingman. Ana, but those will be first fielded in F-35s. So drones alone would not constitute a sixth generation fighter. Sydney, well, fifth gen, sixth gen, these are marketing terms, not technical classification. Northrop Grumman is calling the B-21 Raider. Ana says, a heavy payload strategic bomber. Sydney says, a heavy strategic payload bomber, the world's first sixth gen aircraft. Also, China doesn't recognize the

• 2:22:10John Coogan?

  same designations at all. They recognize the J-20 and the F-35 only as fourth generation fighters. Ana says, okay, so what else? Adaptive cycle turbo fan engines? Open system software architectures? Sub over to flight? Sydney says, LMAO, I wouldn't hold my breath on that one. And just a great way to deliver a little bit of information. I definitely learned a little bit about fourth, fifth and sixth generation fighters from this. Hadn't heard the terms, vertical tail surfaces before, adaptive cycle turbofan engines, but now I know to go look them up. So thank you for turning into a meme.

• 2:22:45Jordi Hays?

  Yeah, I love when any new video just like emerges on the internet of a potential six gen fighter and then everybody just like breaks it down in a million different ways. And you just get one thread and learn a lot about fighter jets and about 20 comments.

• 2:23:00John Coogan?

  And it's just, it's so fun. It's so fun to learn about this stuff. So we got a post from Kyle Samani, huge investor in Solana. He says, "Polymarket parlays. Who's building this?" And the reason I wanted to highlight this was because six months ago, in October 23rd, I said, "Does polymarket allow parlays? Because I want Lando Norris in Mexico City, four rate cuts, Trump Rogan over two hours, and US confirming aliens exist." I would have lost this parlay, but I could have made a lot of money if they had that product. I did talk to the polymarket team about parlays. It's very hard from like the crypto perspective on the backend to actually implement it, but it would be very fun. And I, and I, on the, on the Pirate Riders podcast, I talked about the, the Coogan parlay, which was, you

• 2:23:43John Coogan?

  bet whoever does, whatever presidential candidate does the longer episode of Joe Rogan will win the, the popular vote and the, and the national election. Because basically I was saying that like, I was predicting that this would be the podcast election and that, and that now that three hour podcasts were on the table, it was really going to be a battle for attention and whoever could be in the ears of more Americans for longer would draw more attention.

• 2:24:07Jordi Hays?

  And authenticity.

• 2:24:08John Coogan?

  Totally.

• 2:24:08Jordi Hays?

  Which, which you cannot hide your true self beliefs, et cetera, across three hours. An hour, you can hit talking points, have your notes, but by hour, we know this, by hour three, you're just riffing.

• 2:24:21John Coogan?

  That's when the real Jordy comes out. That's when the real John comes out. The real dog. Yeah.

• 2:24:25Jordi Hays?

  Yeah.

• 2:24:26John Coogan?

  You gotta put the caution tape over the mouth.

• 2:24:28Jordi Hays?

  Yeah, your dogs are barking.

• 2:24:29John Coogan?

  Yeah. And, and so, yeah, there was a lot of debate over, oh, Trump's too old. He couldn't last two hours, three hours on Rogan. There was a whole polymarket for And then obviously Biden, people were saying he couldn't do Rogan, but then Kamala, they were like, well, she's gonna go on Call Her Daddy, that'll be really big. But her Call Her Daddy experience was, I think, like, her appearance was like, maybe an hour, maybe slightly over, and it just wasn't as viral because it wasn't as long, it wasn't as deep. And I think that really hurt. I really, I do think that really changed the election. Let's skip this next one. Did you see this, Derek Die Workwear, the watch guy, getting in a fight?

• 2:25:04Jordi Hays?

  Yeah, I think I shared this. Alex broke it down. So, basically, Derek Guy, at Die Workwear, posted a handful of watches that he was, thought were interesting, as well as a belt. Somebody quote tweeted it and said, "If you ever need a reminder that this society deserves to be destroyed, it should come from the fact that absolutely anyone cares in the slightest about any of this, nonetheless are willing to pay many years' salaries for something you can get for five bucks." So this guy's basically saying, "Society should be destroyed because people like nice things." They go back and forth a little

• 2:25:44Jordi Hays?

  bit. Derek immediately responds with a bunch of evidence that the guy that quote posted him, who actually has a lot of followers, is a pedophile, convicted sex offender.

• 2:25:57John Coogan?

  The ratio is astronomical. It's like 25,000 likes to just zero likes.

• 2:26:03Jordi Hays?

  Yeah, so this guy actually has the audacity to respond and tell Derek, "One of us will be remembered for trying to save millions of innocent lives." This is the same guy who said society should be destroyed. "And the other will be remembered for embodying why this society doesn't... Well, your only god is luxury. You're emblematic of absolutely everything wrong with this society." And Derek says, "I like watches, you're on a watch list."

• 2:26:28John Coogan?

  Such a good dunk.

• 2:26:29Jordi Hays?

  Ratio again. So anyways, I think this guy-

• 2:26:32John Coogan?

  He's a fantastic poster. He's a fantastic poster.

• 2:26:35Jordi Hays?

  Anyways, the guy he's going back and forth with should delete his account. Generated a bunch of regretted user seconds. But at least Die Workwear managed to turn it into entertainment for the rest of us.

• 2:26:47John Coogan?

  That's fantastic.

• 2:26:48Jordi Hays?

  Anyways, absolutely brutal, brutal mogging.

• 2:26:49John Coogan?

  Thanks for highlighting that, Alex Cohen. We appreciate you. Let's go to Andrew McCallum, friend of the show. He's been on before. He says, how embarrassing must it have been for all these car manufacturer dynasties such as Ferrari to get completely dominated by a caffeine rapper company in F1? Talking about Red Bull.

• 2:27:06Jordi Hays?

  Red Bull is just a rapper on caffeine.

• 2:27:08John Coogan?

  And they've, and they've crushed it. Max Verstappen's an absolute beast. The car is beautifully designed.

• 2:27:12Jordi Hays?

  Obviously, it's not Red Bull manufacturing the engine, but it's a lot of the energy and the brand of Red Bull definitely comes through with the team.

• 2:27:21John Coogan?

  Yeah.

• 2:27:22Jordi Hays?

  And.

• 2:27:22John Coogan?

  And the budget and stuff.

• 2:27:23Jordi Hays?

  Yeah. Did you see Lewis Hamilton just crashed in the Ferrari for the first time?

• 2:27:26John Coogan?

  No, I didn't see that.

• 2:27:27Jordi Hays?

  I mean, he's fine.

• 2:27:28John Coogan?

  Yeah.

• 2:27:28Jordi Hays?

  But it was a practice run.

• 2:27:29John Coogan?

  Okay.

• 2:27:30Jordi Hays?

  Crashed. We might have to start, we might have to start live streaming F1.

• 2:27:34John Coogan?

  I think that's the real failure mode for the show. You know, people always criticize, oh, all they know, they used to talk about tech. Now they just talk about politics. I think if this show goes down the drain, it's going to be because it just becomes an F1 show. And we're just talking about sports all the time.

• 2:27:48Jordi Hays?

  Yeah.

• 2:27:48John Coogan?

  Just sports all the time. And everyone's like, didn't they used to be talking about tech? Like, why are they covering the NBA finals?

• 2:27:53Jordi Hays?

  Somebody, somebody, a friend's, a friend's company told us very recently that they were, it'll all go unnamed, but they're like, we're working on this, you know, partnership with this athlete. Turns out to be a very famous athlete. Neither of us knew who they were.

• 2:28:11Jordi Hays?

  You're like, I was like, is that like an actor or something?

• 2:28:13John Coogan?

  This is part of golden retriever Max saying, I'm getting into sports because the politics stuff is too much. It just rots my brain. And I want to be able to just chill out and just.

• 2:28:23Jordi Hays?

  Rip parlays.

• 2:28:23John Coogan?

  I care about the game. Yeah. Rip parlays. Exactly.

• 2:28:26Jordi Hays?

  I've never, I've never ripped a parlay.

• 2:28:28John Coogan?

  The first one's going to be electric when it hits. What if you hit it on the first try? You're going to be addicted for life.

• 2:28:32Jordi Hays?

  Massimo.

• 2:28:32John Coogan?

  Yeah, let's do it.

• 2:28:33Jordi Hays?

  Massimo.

• 2:28:34John Coogan?

  Speaking of ripping parlays, we got Ross Ulbricht, update from our deep dive most recently. He lost $12 million on Pumped Out Fun. Hilarious that he has $12 million to lose.

• 2:28:44Jordi Hays?

  No, no, no.

• 2:28:45John Coogan?

  Further evidence that he has hundreds.

• 2:28:46Jordi Hays?

  Here's the backstory. Here's the backstory.

• 2:28:47John Coogan?

  You can read the, you can read the post, yeah.

• 2:28:48Jordi Hays?

  I don't know the full story, but that's never stopped us from talking about anything on the show. So it says Ross Ulbricht, or someone with access to his wallets, just accidentally nuked the price of a pump fun coin sent to him while trying to provide liquidity to said coin. And so what happened is somebody basically made a coin, like a free Ross coin or some type of coin that, that ripped because obviously the vast majority of Ross's biggest fans are heavily involved in crypto. And so anyways, they then sent him a lot of the token because they're like, hey, this is your token. And then he made a sort of technical error in terms of trying to actually, he was, from what I can tell, he was trying to

• 2:29:32Jordi Hays?

  support the, the, the project, basically by adding liquidity to it, which presumably would have made the, the price go up. But he ended up blowing more, yeah, 12 million, 12 million dollars.

• 2:29:46Jordi Hays?

  Which was, which was effectively, I don't know exactly how it works, but some type of bot that's entire job is to find, find.

• 2:29:56John Coogan?

  Just find big traders like whales.

• 2:29:58Jordi Hays?

  Yeah. If you're, if you're a super talented software engineer, you can write code that just sort of, it's the same, similar to high frequency trading, right? And so anyways, basically wealth transfer of 12 million dollars from, from him or the wallet that, that he controls to this bot. So the bot did well. Everybody else got smoked.

• 2:30:19John Coogan?

  Good day to be a bot.

• 2:30:20Jordi Hays?

  Good day to be a bot.

• 2:30:21John Coogan?

  Yeah. Maybe consider going digital.

• 2:30:24Jordi Hays?

  But it's, but somebody, I saw people in the comments saying he's a little rusty. But, but, but even in the era, even when he, even during the height of the Silk Road, he was, there were coins flying around everywhere.

• 2:30:35John Coogan?

  This is par for the course.

• 2:30:36Jordi Hays?

  He would lose 10,000 Bitcoin in a day and just shrug it off. He'd be annoyed. He'd be like, I'm gonna fix the code.

• 2:30:42John Coogan?

  And I'm gonna kill the person that did it.

• 2:30:44Jordi Hays?

  Just a little bit.

• 2:30:45John Coogan?

  Or try.

• 2:30:45Jordi Hays?

  You're gonna order to hit. You're not necessarily gonna.

• 2:30:47John Coogan?

  Or try to, try to do it. Uh, let's go to Luke Metro. He says, AWS GovCloud is safe, y'all, because breaking news, in a major reversal, Amazon is ramping up ad spending on X after pulling much of its advertising spend more than a year ago. And this is, I want to cover this because this is a major narrative violation. Like after Elon bought X, all the, all the advertisers pulled out. He told them to F off. It was very dramatic. And there was this question about like, okay, are they going to be able to get the premium side running? Like, is the business model going to change completely? But advertisers are coming back. We're set. I'm setting up a, an advertising program with them for Lucy and they've, and they brought a ton more advertisers on. They just did a deal with Visa.

• 2:31:25John Coogan?

  And just in general, the vibe shift is, is perfectly timed because people realize that, yeah, there's a lot of valuable people on X and it's worth reaching.

• 2:31:33Jordi Hays?

  Do you remember af- after the whole ad crisis? All the advertisers were things like. Buy these Donald Trump socks.

• 2:31:40John Coogan?

  Yep.

• 2:31:41Jordi Hays?

  You know, it became like the bottom of the

• 2:31:42John Coogan?

  Oh, yeah. So bad.

• 2:31:44Jordi Hays?

  Of just like people that will like pay for any

• 2:31:46John Coogan?

  Yeah. But then quickly I upgraded to X premium plus pro plan or whatever, and I never see any ads now.

• 2:31:52Jordi Hays?

  Yeah.

• 2:31:52John Coogan?

  And it's actually a lovely, it's totally worth it.

• 2:31:54Jordi Hays?

  I don't know. I kind of miss.

• 2:31:55John Coogan?

  Kind of miss the ads.

• 2:31:56Jordi Hays?

  Seen an ad here, there.

• 2:31:57John Coogan?

  Well, if you see a good ad screenshot it, send it to us and we'll read it on the show.

• 2:32:00Jordi Hays?

  Yeah.

• 2:32:01John Coogan?

  As long as it's in a five star review.

• 2:32:03Jordi Hays?

  Yeah.

• 2:32:03John Coogan?

  So, uh, peak journalism. Uh, this is, this is just hilarious. Uh, everything I say leaks. Zuckerberg says in leaked meeting audio. You'll love to see it. Absolutely banger. Get it on the banger archive. Uh, very funny. It is, it is interesting. Like there's, there's some sort of shift that happens as companies scale and get more media attention. And it obviously matters a lot more if it's consumer and it gets clicks. Sure. This is the case at all the Elon companies, no matter how small they are. Um, a reporter will be dedicated to like the, the Elon Musk beat or the SpaceX beat or, you know, the, the meta beat. And they'll be like, yeah, I was at the Wall Street Journal for four years. I was covering meta. And so I cover their earnings, but I also cover any press release. And I'd be talking to employees all the time, just trying to get information on what's going on. Oh, I was telling a story, trying to get clicks. Also just doing good

• 2:32:47John Coogan?

  journalism. Sometimes occasionally it happens. Um, and, uh, and it's funny that this leaked. It's almost like he baited this out.

• 2:32:54Jordi Hays?

  Yeah.

• 2:32:55John Coogan?

  Like he knew it was going to leak. And so he just said that because it's hilarious, but it really, it really must be so weird to be Zuck. And that's something I'd never seen an interview hit on is like, what is your life like? You're this like, they made a movie about you when you were in your twenties.

• 2:33:10Jordi Hays?

  Yeah.

• 2:33:10John Coogan?

  Very few people get a biopic by Andrew Ross, Andrew Sorkin.

• 2:33:14Jordi Hays?

  Yeah.

• 2:33:15John Coogan?

  No, Andrew Ross Sorkin is the, Aaron Sorkin.

• 2:33:17Jordi Hays?

  Aaron.

• 2:33:17John Coogan?

  Aaron Ross Sorkin is the, is the journalist.

• 2:33:20Jordi Hays?

  Yep.

• 2:33:20John Coogan?

  And so just, just a bizarre life. Uh, but he's living it to the max, getting jacked, wakeboarding and doing UFC. You'll love to see it. He's, he's grinding on. And to end on some really positive, awesome news, we got a post from Adam Singer.

• 2:33:36Jordi Hays?

  I thought this was amazing. When people talk about the roaring twenties, I feel like it's so often about the markets.

• 2:33:42John Coogan?

  Yep.

• 2:33:42Jordi Hays?

  Just looking at charts, but this is the roaring twenties, folks.

• 2:33:46John Coogan?

  Yep.

• 2:33:46Jordi Hays?

  We can go on a carnival that's a mini Disneyland on the water.

• 2:33:49John Coogan?

  It's amazing. We got a sphere.

• 2:33:51Jordi Hays?

  We got this sphere.

• 2:33:51John Coogan?

  It's an icon.

• 2:33:52Jordi Hays?

  We got planes going Mach 1. We're catching rockets with chopsticks and it's all out there in the open. We should celebrate it. We're also working on some very cool stuff with Adam.

• 2:34:01John Coogan?

  Yep.

• 2:34:01Jordi Hays?

  Which we'll announce soon in the Ad Quick team.

• 2:34:04John Coogan?

  Amazing.

• 2:34:05Jordi Hays?

  But look, we have seven minutes until the markets close.

• 2:34:09John Coogan?

  Okay, let's do it.

• 2:34:10Jordi Hays?

  We just got the notification from public, so.

• 2:34:12John Coogan?

  Cool.

• 2:34:12Jordi Hays?

  That's our time to call it for today and I cannot wait for Monday.

• 2:34:16John Coogan?

  Yeah, so thanks for watching. Go leave us a five star review on Apple Podcasts and Spotify. Please do both. Leave an ad in your review. Leave us five stars.

• 2:34:25Jordi Hays?

  We had two ads that way.

• 2:34:26John Coogan?

  And stay tuned for the next one. We'll see you Monday.

• 2:34:29Jordi Hays?

  Thank you, folks.

• 2:34:30John Coogan?

  Bye.