The Elon vs OpenAI Lawsuit and ads in ChatGPT | Diet TBPN

Diet TBPN delivers the best of today’s TBPN episode in 30 minutes. TBPN is a live tech talk show hosted by John Coogan and Jordi Hays, streaming weekdays 11–2 PT on X and YouTube, with each episode posted to podcast platforms right after. Described by The New York Times as “Silicon Valley’s newest obsession,” the show has recently featured Mark Zuckerberg, Sam Altman, Mark Cuban, and Satya Nadella. TBPN.com is made possible by: Ramp - https://Ramp.com https://ramp.com/ AppLovin - https://axon.ai https://axon.ai/ Cognition - https://cognition.ai https://cognition.ai/ Console -https://console.com https://console.com/ CrowdStrike - https://crowdstrike.com https://crowdstrike.com/ ElevenLabs - https://elevenlabs.io https://elevenlabs.io/ Figma - https://figma.com https://figma.com/ Fin - https://fin.ai https://fin.ai/ Gemini - https://gemini.google.com https://gemini.google.com/ Graphite - https://graphite.com https://graphite.com/ Gusto - https://gusto.com/tbpn https://graphite.com/ Labelbox - https://labelbox.com https://labelbox.com/ Lambda - https://lambda.ai https://lambda.ai/ Linear - https://linear.app https://linear.app/ MongoDB - https://mongodb.com https://mongodb.com/ NYSE - https://nyse.com https://nyse.com/ Okta - https://www.okta.com https://www.okta.com/ Phantom - https://phantom.com/cash Plaid -https://plaid.com https://plaid.com/ Public - https://public.com https://public.com/ Railway - https://railway.com https://railway.com/ Ramp -https://ramp.com https://ramp.com/ Restream - https://restream.io https://restream.io/ Sentry - https://sentry.io https://sentry.io/welcome/ Shopify - https://shopify.com https://shopify.com/ Turbopuffer - https://turbopuffer.com https://turbopuffer.com/ Vanta - https://vanta.com https://vanta.com/ Vibe - https://vibe.co https://vibe.co/ Follow TBPN: https://TBPN.com https://tbpn.com/ https://x.com/tbpn https://open.spotify.com/show/2L6WMqY3GUPCGBD0dX6p00?si=674252d53acf4231 https://podcasts.apple.com/us/podcast/technology-brothers/id1772360235 https://www.youtube.com/@TBPNLive

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• 0:01John Coogan?

  Bunch of news today. Lots of people dropping stuff on Fridays. What's the meaning behind that? I don't know, but we'll take you through it. Lots of AI news, lots of OpenAI news because there's new details, new discovery in the OpenAI versus Elon Musk lawsuit that's heating up.

• 0:19Jordi Hays?

  We're gonna go through it all.

• 0:20John Coogan?

  Yeah.

• 0:20Jordi Hays?

  Because it's part of our job.

• 0:22John Coogan?

  We're gonna go through both sides.

• 0:23Jordi Hays?

  I do have.

• 0:24John Coogan?

  The steel man for Sam, the steel man for Elon. I think you had the best take of the day so far, which is that this is the Super Bowl for Nick on X.

• 0:34Jordi Hays?

  Nick on X.

• 0:34John Coogan?

  N I K is having the best day of his life.

• 0:37Jordi Hays?

  OpenAI is number one hater for three years back to back.

• 0:41John Coogan?

  Let's kick it off with the Elon should lose side of the argument. I'm gonna be steel manning Sam, steel manning Greg. They did nothing wrong. Elon's wrong. He needs to back down.

• 0:53Jordi Hays?

  Do you want your helmet?

• 0:53John Coogan?

  Uh, so, okay. Elon made a donation to a nonprofit organization. He got a tax write-off on that donation and that nonprofit, OpenAI, the nonprofit, it's now one of the best funded nonprofits in history and it's still focused on the original mission. OpenAI, the nonprofit, it still exists. It has a just a tiny hundred plus billion dollar position in a for-profit company. They're gonna be able to do nonprofit stuff forever, whatever they want to do. If they want to hire researchers, if they want to write white papers, if they want to train their own models, the OpenAI nonprofit can do that. Elon donated roughly $38 million alongside other donors who put in 90 million. There's some debate over how much Elon put

• 1:37John Coogan?

  in. I saw one report that was around 45. It's in the tens of millions of dollars.

• 1:41Jordi Hays?

  Their sort of optimistic belief is that the damages would be $38 million.

• 1:45John Coogan?

  If they lose.

• 1:46Jordi Hays?

  The original donation.

• 1:47John Coogan?

  If they lose. But I'm arguing right now that they're gonna win. They're gonna win. The jury's gonna say not guilty. Elon, yeah, he was a big donor. He put up tens of millions of dollars, but play out the counterfactual. It's entirely reasonable to assume that things would have played out exactly the same even if Elon was never in the picture, even if he never donated. Sure, I mean, the office would have had to be a little bit smaller. You're working with, you're working with 90 million instead of 120 million. But we've seen folks raise 90 million Series Bs. We've seen folks raise 120 million dollar Series Cs. Roughly the same company, you know, you, you pay people a little bit less. You have a few, few less perks. The office snacks aren't as good. Maybe you skimp on the 45 pound plates. You just get the 10 pound plates. These things happen.

• 2:30John Coogan?

  So if Elon had never donated, maybe Sam would have just stepped up his donation. He put in 10. So it's not like if, if, if Elon didn't donate, he wouldn't have, like OpenAI wouldn't exist. Right? It's totally possible that everything would have been the same and that the Elon donations were not make or break for A, for OpenAI. Elon should lose this case because everyone around the table came to the same realization at roughly the same time about the goal of creating AI responsibly. Basically, scaling laws ensured that AI progress would require vastly more capital than could ever be raised through donations. At a certain point, if you need 100 million dollars for a nonprofit, you can do it if

• 3:11John Coogan?

  you're aligned with some of the world's richest people in tech, like Elon, Peter Thiel, the other folks that I mentioned. At the, on the flip side, if you need 100 billion dollars or you need 50 billion dollars, like OpenAI has already raised in the venture markets, that's just not going to happen in the nonprofit sector, except it could have. Because if Elon really believed in the nonprofit mission and really said nonprofit or bust, yes, I see the scaling laws. Yes, I agree, we'll need an insane amount of capital to get to AGI. Well, guess who has an insane amount of capital? Elon. If he wanted to, he could have said, yes, I'm staying with the nonprofit strategy and I'm going to put up the 50 billion. Every dollar that OpenAI has raised in the venture markets could have been a dollar donated by Elon Musk if he sold down all the positions. Now, it's crazy.

• 3:56John Coogan?

  Never going to happen. Doesn't make any sense. Obviously, we're pro, like, I think the nonprofit transition makes a ton of sense in the context of raising that amount of money. I think that's a reality. And truthfully, I think that Everyone around the table agreed about that. Even if you were going to keep funding the nonprofit, you're going up against Google. They have an economic flywheel that will provide the amount of capital required to advance AI, build massive, they're a hyperscaler, they're going to build massive data centers. They're not going to have a problem with this. Google was set up to make investments at this level, at 10 billion of CapEx. Google's not blinking, the shareholders are all thumbs up on that.

• 4:32Jordi Hays?

  Yeah, and remember when Sam was texting Elon, I think this was in 2023, saying like, "It pains me to see you attack OpenAI publicly." I think we can both agree it's important that Google doesn't own AI.

• 4:47John Coogan?

  Exactly.

• 4:47Jordi Hays?

  And that's been one of the only things that throughout this whole process, they've stayed in agreement on.

• 4:52John Coogan?

  Yes, yes, so they want to create a counterbalance to Google specifically. Elon did actually have the money to continue supporting OpenAI as a nonprofit. It would have been crazy, but technically could have sold down positions. But Elon clearly agreed that OpenAI should build a for-profit, and that's why he wanted equity, he wanted to be CEO. He was interested in OpenAI joining Tesla. Tesla's a for-profit, he wasn't saying, "We're going to bring OpenAI over to Tesla and the whole thing's going to be a nonprofit." Clearly Elon is no purist about nonprofit AI research. He runs XAI, it's a direct competitor to OpenAI. He started it as a benefit corporation, which meant it had an obligation to deliver environmental and social benefits. But after the merger with X, that benefit corporation status was dropped entirely. This whole lawsuit is clearly just corporate lawfare.

• 5:37John Coogan?

  And the battle should be fought out in the financial markets, in the App Store, on the open internet, not the courtroom. Let the best product win, let the best AI model win. Let them, let them build, let them cook.

• 5:49Jordi Hays?

  This is what winning, like today is what winning looks like for Elon. It doesn't really get me one step closer to Mars, right? It doesn't necessarily align. So the win state right now is just being disruptive, right? Basically buying, buying XAI time, putting OpenAI in a position where they are...

• 6:09Jordi Hays?

  Trying to go public, right?

• 6:12John Coogan?

  Yeah.

• 6:12Jordi Hays?

  And they've got this, you know, massive, high-profile trial going on.

• 6:16John Coogan?

  The helmet is really adding a lot to this conversation. I love it. Now, let's argue the flip side. Elon Musk will win the OpenAI lawsuit, and he should, and he should, he should win this. Judge Gonzalez Rogers already rejected OpenAI's motion to dismiss. Judge said, "I think there's plenty of evidence that something happened here. OpenAI was trying to kill the case before the trial even started." They're trying to, they're trying to get rid of this thing, but it's clear that Elon is on to something here. Okay, just look at the emails. It's so obvious that the OpenAI squad was trying to fleece Elon and push him out without giving him a fair share. Elon said, "Guys," this is a direct quote from Elon email, "guys, I've had enough. This is the final straw.

• 7:01John Coogan?

  Either go do something on your own or continue with OpenAI as a nonprofit. Otherwise, I'm out. I'm not donating anymore. If you're gonna do the for-profit, just go start a normal company and wind this thing down." And that makes a ton of sense. It was an open invitation by him to just go build a traditional venture-backed company.

• 7:19Jordi Hays?

  And this is part of the trial, part of the trial in this proceeding that I'm interested in is like finding out why they didn't just do that.

• 7:25John Coogan?

  Yeah.

• 7:25Jordi Hays?

  It's not like Sam and Greg couldn't have been like, "Cool, we worked on a nonprofit for a while."

• 7:29John Coogan?

  How do we set up a C corp?

• 7:30Jordi Hays?

  How do we set up a C corp?

• 7:31John Coogan?

  How do we set up a C corp?

• 7:32Jordi Hays?

  Oh, Sam's like, "Oh, I own like a couple points of Stripe."

• 7:36John Coogan?

  Yeah.

• 7:36Jordi Hays?

  I think they have something called Atlas. You can just make a C corp.

• 7:39John Coogan?

  Maybe he forgot.

• 7:40Jordi Hays?

  A few clicks. Maybe there was like a very, very specific reason.

• 7:44John Coogan?

  Yes.

• 7:44Jordi Hays?

  Like the nonprofit had developed some IP at that point.

• 7:47John Coogan?

  Yeah.

• 7:48Jordi Hays?

  That meant that starting over or, you know, having to rebuild a team or whatever factor meant that that was like gonna set them back years.

• 7:55John Coogan?

  Yes.

• 7:56Jordi Hays?

  That's, that's a big, that's a big deal.

• 7:58John Coogan?

  Yeah. Elon gave them an invitation. "Just go out and build a traditional venture-backed company. Maybe I'll invest, maybe I'll be involved, maybe I won't, but at least we'll have a clean slate to start from." But Sam told Elon that he remained, quote, "enthusiastic about the nonprofit structure." That was enough to get Elon to donate more, but OpenAI wasn't all in on staying in nonprofit mode. They were on the cusp of restructuring OpenAI and taking the $10 billion investment from Microsoft. See, the reality of modern philanthropy, it's not fire and forget. You don't... Big donors like Elon, in this case, do have specific intentions and conditions attached to the gifts. It's not like he's just throwing 20 bucks in the Salvation Army

• 8:42John Coogan?

  donation box around Christmas. This is 30 something million. If you give that to a university and you want a building, they need to build that building. They probably need to build it to your specifications, even if you want no windows.

• 8:55Jordi Hays?

  They might even put your name on it.

• 8:56John Coogan?

  Yeah, they might even put your name on it. And you can dictate these things in a nonprofit donation, and you can ask that the donation is contingent on those results. You can pursue specific directions. He has every right to demand results. So, a big part of this, if and why Elon is going to win, why he should win, is that you can't just have corporate structure remorse, OpenAI. You can't pull the plug on promises made. OpenAI's own certificates of incorporation talk about creating a company, quote, "exclusively for charitable purposes", with the technology being intended to benefit the public. What's exclusively charitable about raising venture to build a subscription app with ads? That's not charity. Why are

• 9:41John Coogan?

  you doing that? Elon's right. Not only should Elon win this case against OpenAI, he will win this case. It's simple. A bunch of people, a bunch of San Francisco elite tech guys, their fancy cars, promise to build AI for humanity. They took $38 million from one of their co-founders based on that promise, then turned around and built a $500 billion for-profit empire with Microsoft. It's a straightforward bait-and-switch story that will play well to 12 regular jurors in Oakland. And so, that's the case.

• 10:12Jordi Hays?

  I mean, this is going to be the big challenge, finding 12 regular people in Oakland.

• 10:16John Coogan?

  Extremely offline.

• 10:18Speaker 02

  How illegal is it to try to be on a jury?

• 10:22John Coogan?

  Stop trying to get on the jury.

• 10:24Jordi Hays?

  Stop trying to get on the jury.

• 10:25Speaker 02

  Look, I said this, I'm gonna vote, I'm gonna vote in favor of whoever has the higher R K G I score.

• 10:29John Coogan?

  Okay.

• 10:30Speaker 02

  I'm just pro AI progress.

• 10:31John Coogan?

  Yes, yes, yes.

• 10:32Speaker 02

  I don't care at all about who wins.

• 10:33John Coogan?

  Mm hmm.

• 10:34Speaker 02

  I just want better models.

• 10:35John Coogan?

  You just want better AI.

• 10:36Speaker 02

  Yeah.

• 10:36John Coogan?

  Whoever will build, whoever's scaling faster. It does feel like it won't be existential, and it feels like it's more of a vibe war than maybe a true economic war. You could go back and argue that Elon should get pro Rada equity at what was effectively like a pre-seed round that was done as a nonprofit. And that's thirty eight out of a hundred and twenty that was raised in the nonprofit, something like that. So you give him, you give him twenty five.

• 11:01Jordi Hays?

  Is there any precedent for a company going for a blockbuster IPO while having this like lawsuit that is really going at the like foundation of the entity itself?

• 11:12Speaker 02

  Elon actually didn't directly donate to OpenAI.

• 11:14John Coogan?

  Hmm.

• 11:15Speaker 02

  It was basically indirectly through a donor advised fund.

• 11:18John Coogan?

  Okay.

• 11:19Speaker 02

  Through OpenAI's fiscal sponsor Y C. And so because it's not direct, the idea of like the, the specific charitable purpose doesn't actually like, doesn't hold up.

• 11:33John Coogan?

  Okay.

• 11:34Speaker 02

  And that it actually just defaults to like OpenAI's.

• 11:37John Coogan?

  Yeah, because it's like you donate to one entity and then that entity would have to make that claim. So their direct communication doesn't necessarily pull as much weight.

• 11:43Speaker 02

  And then so there's like, there's a bunch of pages about the history of like how you actually define these things. So it seems like it's gonna be just come down to like extremely like esoteric legal definitions of like trusts.

• 11:56Jordi Hays?

  The last thing I would say there is part of OpenAI's defense is that through their actions, they've created one of the most well capitalized foundations in history.

• 12:07John Coogan?

  Yeah.

• 12:07Jordi Hays?

  Right? And I think that they're gonna continue to lean on that. Novo Nordisk has a foundation themselves focused on biomedical research. And it's like, it has, the estimate is that they have a hundred and sixty seven billion dollars.

• 12:18John Coogan?

  Okay. Oh, so that's why we that's why we're using the term one of the best funded because it's possible that the OpenAI nonprofit might not be the best funded in history. Although, if the stock continues to rip, they will probably become the best funded in the in history. There's a whole bunch of leaks news in the timeline. There's so many documents that hit the timeline that it brought down all of X and X actually crashed because so many people were logging on. The other interesting thing is that do we know where Sam Altman sits in terms of equity? It's been going back and forth?

• 12:49Speaker 02

  There isn't a number, but in one of the documents I I lost it, but it said he had indirect exposure via YC.

• 12:54John Coogan?

  Okay, okay.

• 12:55Speaker 02

  Yeah.

• 12:56John Coogan?

  Into the for profit as well?

• 12:57Speaker 02

  Uh, yes.

• 12:58John Coogan?

  Okay, so look through exposure there. But then in terms of like an actual grant, is there a number that's been thrown around?

• 13:04Jordi Hays?

  To my knowledge, nothing has been shared publicly, other than the sort of idea of him getting around 7%.

• 13:11John Coogan?

  Okay, okay.

• 13:12Jordi Hays?

  But.

• 13:12John Coogan?

  Yeah, that still feels low for for a co-founder of a, you know.

• 13:16Jordi Hays?

  No, but that was happening that that's like that's like a lot of evolution had happened.

• 13:21John Coogan?

  Yeah, no.

• 13:21Jordi Hays?

  By that point. I mean, yeah, if anything, these these files make a lot of Elon's kind of antics like more understandable. Like, he's been the one saying that they're morally bankrupt. And here, they just straight up say it would be pretty morally bankrupt to steal the nonprofit from him.

• 13:40John Coogan?

  Yeah.

• 13:41Jordi Hays?

  Like, I don't think anyone ever expected their that that language come out that was this specific about their moment to moment thinking during that point in time. You look at the run that Sam has gone on.

• 13:53John Coogan?

  Yeah.

• 13:53Jordi Hays?

  And you could imagine a situation where they're sitting at the table and saying, this boardroom ain't big enough for the two of us.

• 13:59John Coogan?

  Yep.

• 13:59Jordi Hays?

  Right?

• 14:00John Coogan?

  Yep.

• 14:00Jordi Hays?

  And it really feels that way.

• 14:01John Coogan?

  Big egos, yeah. Alex read through thousands of pages in Musk versus Altman, so you don't have to. We'll go through some of the summary here. Sutskever voiced his worry over text with Maroti and others. Sutskever, my trepidation around open source is that we're treating it as a sideshow, e.g. DAF not going far enough to really hurt stability. So they're not taking it seriously. And if open source takes off. Everyone could standardize on that.

• 14:28Jordi Hays?

  For Gov says, "Bro, scooping harder than a Ben and Jerry's employee."

• 14:32John Coogan?

  That's Gov. This is good. This is good, Alex. He's scooping harder than a Ben and Jerry's employee. We're gonna use that from now on. This is fantastic. So, Mira Maradi said, "We're missing the opportunity to set standards with this massive growing group of developers. People are hungry to build things and we should lean in and bring our tech to as many people as possible. Long-term maximize our chance of maintaining lead, reducing competition." OpenAI leaders were divided over early investor Reid Hoffman's decision to start a rival AI lab inflection. Altman, here's how I'd summarize my thoughts on this. Pros: He supported us in a moment when no one else would.

• 15:10Jordi Hays?

  Correct.

• 15:10John Coogan?

  And it was pretty existential. Okay, so we're learning more about the existentialness of certain donations when they came in during the OpenAI nonprofit era. I think OpenAI would have been pretty effed if he hadn't stepped up. Also, he was instrumental in getting the first Microsoft deal done.

• 15:26Jordi Hays?

  There we go.

• 15:27John Coogan?

  And has generally been quite helpful with Microsoft-related stuff, and he's generally a good board member. Satya Nadella was worried about Microsoft's position in AI when he started looking at OpenAI.

• 15:35Jordi Hays?

  Yeah, so Stripe was in 2017, Stripe was valued at 9.2 billion.

• 15:41John Coogan?

  Bunch of wee lads, just doing Stripe. From Satya Nadella's deposition, the question to Satya Nadella, the CEO of Microsoft, "Did you feel that your progress was moving more slowly than you had liked?" And the answer, Satya Nadella says, "I mean, always as a CEO of a company, I feel my job is to sort of be dissatisfied with the rate of progress at all times. And so yes would be the answer, which is both in the absolute sense, which is can we build products that are more capable in any particular domain? And also, you know, vis-à-vis competition." And so Satya Nadella was obviously motivated to invest, and now he has a huge stack of OpenAI shares. On Wednesday, August 24, 2022, with the Pacific Northwest summer showing all of its beauty,

• 16:25John Coogan?

  Bill Gates hosted a dinner at his home in Lake Washington. Satya suggested the gathering, which included Chief Technology Officer Kevin Scott and a handful of top researchers. Food and drinks would be served, but the main entree was a hush-hush demo by OpenAI co-founder Sam Altman on a forthcoming release of ChatGPT powered by GPT-4.

• 16:49John Coogan?

  An AI built on large language models. Bill had long encouraged researchers to develop a truly accomplished AI assistant, but had voiced his skepticism about this particular approach.

• 17:00Jordi Hays?

  That sounds like I'm listening to an audible.

• 17:03John Coogan?

  Thank you. Microsoft beat out Amazon when it initially started working with OpenAI. Elon Musk was opposed to working with Jeff Bezos and wrote the following in an early email to Sam Altman. He said, "I think Jeff is a bit of a tool and Satya is not, so I slightly prefer Microsoft, but I hate their marketing department." Altman responded that Amazon had started, quote, "really decking us around." Yeah.

• 17:27Jordi Hays?

  Such a crazy line.

• 17:29John Coogan?

  So, the upside on Microsoft's initial $1 billion investment in OpenAI was capped at $500 billion. Hopefully, they hit that cap. From a filing written by Musk's lawyers, in November 2018, after dinner with Sam Altman, Scott told Nadella that OpenAI's new corporate structure offered both, quote, "a commercial vehicle for monetizing OpenAI AIP and investment returns capped at $500 billion. That's not bad. A 500x bagger is gonna move the needle for Microsoft, for sure." Altman claimed the nonprofit would eventually benefit because, though OpenAI has yet to make a single dollar in returns, if OpenAI ever does get to $500 billion in returns, the balance over that goes directly to the 501(c)(3). That's exciting.

• 18:12John Coogan?

  Microsoft's board initially approved a capital investment of $2 billion, but ultimately decided to limit its initial investment to $1 billion in the hopes that a smaller investment would compress OpenAI to commercialize.

• 18:23Jordi Hays?

  Satya. Hey, we got it. We can't give them too much.

• 18:26John Coogan?

  Let's put a little fire under them. Let's make sure that they're thinking about dollars. Dollars and cents. The second update to Microsoft's partnership with OpenAI in 2021 included another $2 billion investment that wasn't reported and came with a lower upside. This is also a filing from Musk's lawyers. In March of 2021, Microsoft quietly invested another $2 billion in OpenAI. Neither OpenAI nor Microsoft publicly announced the investment, which was subject to a lower 6x return multiple. In place of its 2019 license to a single OpenAI model, Microsoft secured rights to commercialize any OpenAI model developed during the term of the agreement, except AGI. This could have saved OpenAI from Elon, and it's a diary with a lock on it.

• 19:08John Coogan?

  I think the diary framing is like woefully wrong. That's probably the worst part of this whole thing is because most of the, most of the, the thoughts that Greg's putting out are completely reasonable. Elon says they stole a charity, plain and simple.

• 19:23Jordi Hays?

  They're really on the, on the, uh, for all the jurors, they're really gonna have to, I imagine you get, if it's Oakland, 12 people on the jury, I'd guess like four of them are driving Teslas. They're really gonna have to go check all the cars, make sure they don't have the bought this before Elon went crazy bumper sticker on it. They're gonna have to throw those, those candidates.

• 19:44John Coogan?

  Well, they should also throw out any jurors that show up in Koenigsegg's. Cause they're probably in the Koenigsegg owner meetup and their cars and coffee.

• 19:51Jordi Hays?

  If I were grading this purely as an analyst, not as an open AI model, the documents are legitimately bad.

• 19:58John Coogan?

  I was asking, I was asking Claude about this and it was very funny because it, you can't not read into it like you're talking to someone at Anthropic because it's taking shots at both of them being like, oh, well, like, you know, uh, Elon has XAI and that's a for-profit, so he's a hypocrite. And like, maybe that's just objectively true and the model's just, you know, accurate, but it's funny just reading it in Claude's voice being like, Claude's sitting there being like, I don't like either of these companies.

• 20:31Jordi Hays?

  Joe says, huge congrats to Goldman Sachs. I've been following them a long time. The whole team in culture is so impressive. I can't wait to see where they're going and what they do next.

• 20:42John Coogan?

  Yes, yes, yes.

• 20:43Jordi Hays?

  Really Goldman's really just getting started.

• 20:45John Coogan?

  There are some absolute dogs over there. We talked about it a bunch, but one of the most legendary things going into the financial crisis, they know that real estate's gonna sell off. They sell their corporate headquarters and lease it back for 10 years. They're not exposed to the, the financial risk of their building.

• 21:02Jordi Hays?

  Breaking with the United States, Canada, Canada has agreed to cut its 100% tariff on Chinese electric cars in return for lower, lower tariffs on Canadian farm products. China will reduce its total tariffs on canola seeds, a major.

• 21:21John Coogan?

  Okay, yeah. Fentanyl oil, they're getting seed oils, they're like, we gotta have them.

• 21:26Jordi Hays?

  Okay, okay, maybe this is part of a grander strategy.

• 21:29John Coogan?

  Oh.

• 21:30Jordi Hays?

  He's like, yeah, we need to, this is our version of fentanyl.

• 21:35Speaker 02

  So he actually did, um, uh, Carney said that Canada's partnership with China, uh, sets us, Canada up well for the new world order. So this is, the seed oils are the first step.

• 21:46Jordi Hays?

  Yeah, that was a, that was a crazy quote.

• 21:48John Coogan?

  In other, uh, electric car news, Ford and BYD are in talks for car batteries. Let's give it up for some talks. US car makers need, uh, Ford, the US car maker, needs more batteries for hybrid vehicles. He's shifting away from the full EVs, you know, they canceled the Ford Lightning, but they are going to do a lot of hybrids and so they need a lot of batteries and they're calling up BYD to help with it. The American car maker would buy batteries from the Chinese auto company for some of Ford's hybrid vehicle models, according to people familiar with the matter. The two companies are still discussing how the arrangement would work. One idea is that Ford would import batteries from BYD to Ford's factories outside of the

• 22:32John Coogan?

  US, some other people said, talks continue. And it's possible a deal won't materialize. The tie up, if completed, would pair Ford with the largest Chinese car company that has struck fear in much of the auto industry over its ability to produce affordable models that carry sophisticated technology. For Ford, it solves a problem. As the company pulls back from electric vehicles and ramps up its lineup of hybrids, it needs a battery supplier and BYD is able to produce high quality car batteries. We talked to lots of companies about many things, a Ford spokesman said. A BYD spokesman declined to comment. That's a good comment. President Trump's trade advisor, Peter Navarro, criticized the idea on X.

• 23:16John Coogan?

  He said, so Ford wants to simultaneously prop up a Chinese competitor's supply chain and make it more vulnerable to the same supply chain extortion? What could go wrong here?

• 23:29Jordi Hays?

  The day has finally come. Not to see ads in ChatGPT, but they're coming.

• 23:35John Coogan?

  They're coming.

• 23:35Jordi Hays?

  They're coming. We're talking about in the coming weeks, OpenAI plans to start testing ads in ChatGPT free and go tiers. It's go time. They said, we're sharing our principles early on how we'll approach ads guided by putting user trust and transparency first as we work to make AI accessible to everyone. They say what matters most responses in ChatGPT will not be influenced by ads. That is.

• 24:01John Coogan?

  There's a firewall. There's a firewall. Editorial is over here. Ad sales is over here. They don't interface with each other at all. And so the models that generate the responses will not be aware of who's advertising on what. This seems extremely easy to do technically, extremely good for product reliability. It's what the consumer wants. They want, you want to know when you go to Google, if you scroll down far enough, you eventually get past the ads and you see the real results and you're going to want that in your LLM, even if there's an add up at the top or in the middle, as long as it's clearly labeled, which they say they will be. So ads will always be separate and clearly labeled. Your conversations are private from advertisers.

• 24:42Jordi Hays?

  Yeah, so, so people have been so concerned, specifically Mark Cuban. We obviously had him on the show to talk about this last year.

• 24:50John Coogan?

  Yeah.

• 24:50Jordi Hays?

  About this idea of like ads showing up in the results.

• 24:53John Coogan?

  Yep.

• 24:53Jordi Hays?

  And part of it, the reason I was never that concerned is like, if I just search best backpack for men, which is kind of a joke in itself.

• 25:02John Coogan?

  It's going to tell you ridge, but.

• 25:03Jordi Hays?

  Well, a man shouldn't wear a backpack in the first place. So, uh, sorry to, to any backpack super fans out there.

• 25:11Jordi Hays?

  Well, you're not a man yet. You're not 21.

• 25:13John Coogan?

  Oh, true.

• 25:14Jordi Hays?

  When I search best backpack for men, I can scroll down and find a Reddit result.

• 25:19John Coogan?

  Okay.

• 25:19Jordi Hays?

  It's the second result after Nordstrom.

• 25:21John Coogan?

  Sure.

• 25:22Jordi Hays?

  But I can all, they also served me a bunch of ads.

• 25:24John Coogan?

  Yeah.

• 25:24Jordi Hays?

  I don't assume that the best backpack for men is the first ad, right? It's not like when it's clearly labeled and separated, I just assume this is an ad for somebody that sells backpacks.

• 25:35John Coogan?

  Yeah.

• 25:35Jordi Hays?

  People, people, people seem to be really riled up about this. I'm seeing a bunch of comments on the post. They're, they're upset. I don't, I don't get it at all. The whole point is that, uh, ads have made it so that wonderful services on the internet have been free.

• 25:49John Coogan?

  Yeah.

• 25:50Jordi Hays?

  For decades. They're generally aligned. Even Target people report they like targeted ads.

• 25:55John Coogan?

  I agree.

• 25:56Jordi Hays?

  This is funny. Somebody, somebody in here says some poor fifth grade teacher grading the worst World War II paper ever turned in when it suddenly starts talking about world of tanks and Nord.

• 26:08John Coogan?

  That's copyfacing the ads.

• 26:10Jordi Hays?

  Honestly, maybe that's a feature though, you know, because you get two impressions.

• 26:15John Coogan?

  Two impressions.

• 26:16Jordi Hays?

  My understanding is they will use what they know about you to offer better targeted ads to advertisers. They're just saying they won't explicitly be like, hey, we have, here's this person's email and here's what they like and actually sell that specifically.

• 26:29John Coogan?

  Flowers, no way. Reacting to the screenshot that flowers hinted math before numerals. Pottery made by people of the Holotheian culture who inhabited northern Mesopotamia between 6,200 and 5,500 B.C. Painted flowers with four, eight, 16, 32 petals. Some of them have 64 petals. They were obsessed with exponential growth. They were obsessed with compounding, the power of compounding.

• 26:59Jordi Hays?

  It's the Claude logo.

• 27:01John Coogan?

  It is the Claude logo. That's hilarious. I love it.

• 27:06John Coogan?

  It's amazing.

• 27:07Jordi Hays?

  Had dinner with wife at a Mexican restaurant last night. Looked at the menu. They were trying to raise prices from eighteen dollars to twenty-four dollars for her favorite entree. Wife was like, I think we can have Claude make this. Told waitress trying to gouge us, they done. One week sprint. Claude cloned and replaced.

• 27:25John Coogan?

  Coach needs a Pabell and car needs us.

• 27:28Jordi Hays?

  Restaurant manager freaks out. How do we solve this? This is gonna happen so much in 2026.

• 27:37John Coogan?

  Just telling the restaurant owner that you're gonna do it at home.

• 27:40Jordi Hays?

  We cloned your entree with Claude.

• 27:41John Coogan?

  We cloned you.

• 27:42Jordi Hays?

  Every year, these kids come back with a new annoying quirk, dot, dot, dot. Claude Boys are apparently the new thing. In my 10th year of teaching, mostly freshmen, ever since the pandemic, there's always a new thing students bring to school that they learned over the summer from the internet or wherever. The newest thing here is a flock of self-proclaimed Claude Boys who carry AI on hand at all times and constantly ask it what to do. They have their entire personality revolve around Claude prompting an AI. When we went around doing an icebreaker, four of the five kids, some variation of I live by Claude and die by the Claude. Just about an hour ago, when I assigned the first assignment of the school year, one of the Claude Boys was bold enough to say, if Claude says I do it, otherwise I don't. I told him if he asked Claude, he would be getting a call home on the first week of high school.

• 28:27Jordi Hays?

  He asked it anyway, and it said to do the homework. California-based unicorns being routed to the glue factory.

• 28:34John Coogan?

  The horse metaphor.

• 28:35Jordi Hays?

  Not mincing words. We will protect the unicorns. Unicorns are horses. We will protect them.

• 28:42John Coogan?

  They are.

• 28:42Jordi Hays?

  California started with the gold rush and might end with the golden exit. It has been underreported how much wealth has left California because of the asset seizure tax being proposed. It's important that we continue to call it the asset seizure tax.

• 28:55John Coogan?

  He's coining.

• 28:55Jordi Hays?

  A private poll was conducted amongst affected individuals a few days ago. An eighty to ninety percent surveyed they'd already left California in 2025 or will leave in 2026 if the ballot measure looks likely to pass. Two to two and a half trillion of assets gone, representing 20 billion of annual revenue for the state government and likely hundreds of thousands of jobs. Now at risk, less reported is the bigger exodus underway from folks who are not directly affected, but worry as they should that this law will quickly transition from billionaires to everyone else. The initiative actually gives California legislators the right to take anyone's post-tax assets anytime in the future based on a majority vote.

• 29:35Jordi Hays?

  This isn't about billionaires. It's a new tax system that simply destroys private property rights in America. All private property is now public property, even after paying your taxes. It's not legally your property anymore. It's the government's. You're just borrowing it. Not just tech, not just AI, not just billionaires, but the core engine of California's prosperity since 1847 is unraveling. States not in crisis will declare enough is enough. Individuals in those states will refuse to pay their federal taxes. Why pay for other people's mistakes? Some states may try to secede from the union and a constitutional and civil crisis will erupt. I know this sounds crazy, but I think at some point, states will just say, like, people, citizens, will be like, why am I sending 30% of every dollar I make to bureaucrats in

• 30:19Jordi Hays?

  Washington that hate me? I think this sounds wild, but I don't, I don't think it's as far-fetched.

• 30:26John Coogan?

  Yeah, it's very dark. It's chaos.

• 30:30Jordi Hays?

  Nothing like a little Friday black pill.

• 30:31John Coogan?

  Not, we just, the answer, the answer is clearly just AGI pilling all of the California regulators. AGI will solve the deficit. We will just ask AGI to fix the debt, fix the fiscal crisis, fix the pension liabilities, fix the budget deficit, don't make mistakes. And so much value will be created by AGI here. Just the income taxes will pay for that a thousand times over. Don't worry, it's going to be fine. AGI is here to save it. That's the solution. Got to pitch them.

• 31:08Jordi Hays?

  Thank you for being here with us.

• 31:09John Coogan?

  And goodbye.