Trump-Xi Summit, Inflation Fears, Space Data Centers | Max Levchin, Delian Asparouhov, Richard Socher, Brandon Hill, Nate Tepper, Joubin Mirzadegan, Roman Chernin

(00:50) - Trump-Xi Summit (28:35) - Space Data Centers (37:29) - 𝕏 Timeline Reactions (57:39) - Wall Street's Inflation Fears Rise (01:01:37) - Max Levchin, a Ukrainian-American software engineer and entrepreneur, co-founded PayPal in 1998 and currently serves as the CEO of Affirm, a financial technology company offering "buy now, pay later" services. In his recent conversation, Levchin discussed his deep dive into the mechanics of espresso machines, emphasizing his passion for mastering complex systems. He also highlighted the importance of specialization and depth of knowledge in one's field, advocating for young professionals to pursue expertise in areas like computer science to remain competitive in an evolving job market. (01:30:40) - Delian Asparouhov, co-founder and president of Varda Space Industries, discusses the company's collaboration with United Therapeutics to manufacture pharmaceuticals in microgravity, aiming to improve drug formulations for rare pulmonary diseases. He highlights the significance of this partnership as the first instance of a publicly traded company investing its own resources to produce physical products in low Earth orbit. Asparouhov also elaborates on the technical processes involved, including the benefits of microgravity for drug crystallization and the logistics of launching and retrieving these products from space. (02:01:19) - Richard Socher, former Chief Scientist at Salesforce and founder of You.com, is now leading Recursive Superintelligence, an AI startup focused on developing self-improving AI systems. In the conversation, he discusses the company's mission to build recursive, self-improving superintelligence capable of automating knowledge discovery, emphasizing the importance of AI systems that can autonomously enhance their own capabilities. He also highlights the recent funding success, with Recursive Superintelligence raising over $650 million at a $4.65 billion valuation, led by GV (Google Ventures) and Greycroft, with participation from Nvidia and AMD. (02:12:38) - 𝕏 Timeline Reactions (02:18:17) - Brandon Hill, CEO and co-founder of Vori, is a third-generation grocer whose family has been in the grocery industry for over 40 years. In the conversation, he discusses Vori's mission to modernize grocery store operations by automating processes such as inventory management, pricing, and ordering, aiming to enhance efficiency and profitability for independent retailers. Hill also highlights Vori's recent $22 million funding round, which will support the company's expansion and further development of its autonomous operating system for supermarkets. (02:26:03) - Nate Tepper, founder and CEO of True Short, an AI-driven film studio and streaming platform, discusses the company's innovative approach to creating and distributing vertical, short-form content inspired by China's successful micro-dramas. He highlights their strategy of forming creative pods—teams consisting of a showrunner, AI filmmaker, and editor—to produce weekly series, and emphasizes their focus on rapid content creation and distribution to stay ahead of competitors. Tepper also notes the importance of both organic and paid growth strategies, leveraging platforms like TikTok to drive user engagement and app downloads. (02:39:04) - Joubin Mirzadegan, co-founder and CEO of Roadrunner, discusses the company's inception at Kleiner Perkins, where he identified a critical need for improved revenue infrastructure through conversations with CIOs. He highlights the challenges posed by evolving pricing models, such as the shift from software to SaaS and now to AI-driven consumption-based billing, necessitating adaptable CPQ solutions. Mirzadegan emphasizes the complexity of the sales process, involving multiple stakeholders like CIOs and CROs, and underscores Roadrunner's mission to streamline this process by integrating AI to enhance efficiency and accuracy. (02:46:29) - Roman Chernin, a founding member of Nebius since its inception in summer 2024, discusses the company's rapid growth and its focus on building a vertically integrated, AI-specialized cloud infrastructure. He highlights the swift evolution of AI models, noting that open-source alternatives are catching up to frontier models within three to six months, prompting customers to switch for cost efficiency. Chernin also addresses challenges in scaling, including physical infrastructure bottlenecks and the necessity of efficient financing, emphasizing the importance of post-sales support and recent strategic acquisitions to enhance inference optimization capabilities. Follow TBPN: https://TBPN.com https://x.com/tbpn https://open.spotify.com/show/2L6WMqY3GUPCGBD0dX6p00?si=674252d53acf4231 https://podcasts.apple.com/us/podcast/technology-brothers/id1772360235 https://www.youtube.com/@TBPNLive

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

• 0:00John Coogan?

  You're watching TVPN. Today is Wednesday, May 13th, 2026. We are live from the Temple of Technology. The Fortress of Finance. The Capital of Capital. A bunch of news going on today. Huge show. Max Levchin's coming on the show. Delian's coming in person from Varda. Recursive is coming out of stealth. Brandon Hill from Vori. Nate Tepper from True Short. Very excited to talk about vertical video. The trough. The trough. The trough is cooking. Some of the trough is delicious. The trough economy. Juven Mirzadegan from Roadrunner and Roman Chernin from Nebius. Absolutely destroying earnings. Very excited to talk to the co-founder and chief business officer over at Nebius. But

• 0:44John Coogan?

  the big news this week, and I'm sure what, you know, everyone will be focused on is, of course, on the cover of the Wall Street Journal. That's the Trump-Sijinping Summit that's happening in Beijing. Trump and Xi Jinping vie for wins at summit. They're duking it out. And Trump brought, they both brought a big, a big crew with them. A team. Yeah. Trump brought. Geopolitics. A couple, couple. Team sport. Couple of political people that we won't even care about, but the business leaders are what is particularly interesting. So we got Elon Musk from Tesla, Tim Cook from Apple, Jensen from Nvidia, Kelly Ortberg from Boeing. A little flex there because Boeing

• 1:28John Coogan?

  has been able to maintain the lead in manufacturing large planes for a very long time. DJI has not been able to scale up and make a 747. What's going on over there? David Solomon from Goldman Sachs, Steven Schwarzman from Blackstone, Larry Fink from BlackRock, Jane Fraser from Citi, and Dina Pal McCormick from Meta. So we should read through the stakes of the Trump-Sijinping Summit in the Wall Street Journal from the Wall Street Journal. Before we get into that, let's get into the more important stuff. Yeah, please.

• 1:59Jordi Hays?

  Do you think Jensen was always coming on the trip, right? There's been some speculation. He got on, uh, he got on the plane in Alaska.

• 2:07John Coogan?

  Oh, yeah.

• 2:07Jordi Hays?

  Was that just the most convenient place for him to get on? Or was he a late addition?

• 2:12John Coogan?

  I don't know. Why would he have been a late addition? I don't, I don't know. It seems like a logical person to bring.

• 2:17Jordi Hays?

  There was reporting earlier this week.

• 2:18John Coogan?

  He runs the largest company in the, in America.

• 2:20Jordi Hays?

  I know, but, but there had been statements made from what I saw that he wasn't going.

• 2:24John Coogan?

  I don't know.

• 2:25Speaker 02

  Yes, well, so Trump had a Truth Social post that said CNBC incorrectly reported that the great Jensen Huang of Nvidia was not invited. Uh, but then he, he corrected it. He said he didn't invite him.

• 2:35John Coogan?

  I don't know. These schedules move around. It's got to be really, really difficult if you're the leader of the biggest company in the world to, uh, move things around and, and commit to this.

• 2:45Jordi Hays?

  I know, but what's more important for Jensen and his objectives?

• 2:49John Coogan?

  No, of course it's critical importance, but, uh, at the same time, there might've just been other moving pieces of like, okay, when can he go? Where will he arrive from? Where will he get picked up from? I don't know. These things always like shift. Uh, I, I, I don't have a good thesis. I mean, other than the fact that like there, that is the company that has maybe the most tension between the trade deals with China. Like Apple obviously does a ton of business in China, but, uh, has been much less of a focus in the chip sanctions. And so having Jensen there is a little bit more of a discussion point. What do you think?

• 3:21Speaker 02

  I mean, I, I think on China, like the Nvidia stuff seems like pretty like fine now, but, but, yeah. But Meta, I think has like some conflict, right? Cause I mean, Manus, yeah, maybe it's like not that big of an acquisition on like market cap wise, but.

• 3:33John Coogan?

  Yeah, yeah.

• 3:34Speaker 02

  They're blocking it.

• 3:34John Coogan?

  A lot of these things, you know, always in the, in the context of Silicon Valley, it's like a $2 billion deal or a company that's doing 40 billion in revenue. Uh, and then you get over there and the stakes are like, you know, a trillion dollar oil market or like all the rare earths in the world. And, uh, and it's your, you know, geopolitical conflict, which is obviously a much bigger deal. And so, um, I don't know. We, we, we can speculate it on more. There might be more reporting that comes out about, uh, Jensen's goals there, what actually happened, uh, how he found his way on to, uh, Air Force One. But that was confirmed by Elon Musk, right? He said that, uh, Elon, Jensen and Trump were all on Air Force One together, flying over. I certainly wouldn't want to get there. I would want to arrive on the cool plane.

• 4:18John Coogan?

  Can we play the video of the arrival? Trump arrives in Beijing with Elon Musk and Jensen in tow. I guess the rest of the business leaders came separately. But here is their arrival with, are those

• 4:33Jordi Hays?

  Can we get sound?

• 4:34John Coogan?

  leaders or something? I don't know what. They seem to be waving, oh, flags. They're waving flags. That makes sense.

• 4:42John Coogan?

  Well, there they go, walking down the red carpet. Air Force One is truly stately. There's, it's so disappointing that the economics of the airline industry didn't just get bigger and bigger. And so you find yourself very rarely on 747s unless you're flying across the world. Because they do have such a presence and they're spacious inside. But we have been, you know, cramped down into the 737.

• 5:10Jordi Hays?

  Are there videos where they give a proper tour of Air Force One? Or is it kind of locked down?

• 5:16John Coogan?

  I think they've done tours. I mean, there is, there are several Air Force Ones, I believe, that are on display at presidential libraries. And so you can go and tour them. There might be one at the Smithsonian. I'm not exactly sure, but I'm pretty sure you can go walk around. Old ones.

• 5:30Jordi Hays?

  Take note.

• 5:31John Coogan?

  I wouldn't be surprised if they keep the current spec, like somewhat secretive. There we go. This is very grainy footage. It looks like, oh, maybe it's just the middle of the night.

• 5:43Jordi Hays?

  And it reminds me of Dune.

• 5:45John Coogan?

  Dune on Arrakis. That's Taiwan, though. Anyway, let's go through Jensen's pack list. He was having trouble thinking of what was he going to bring. Of course, he landed on just a ton of leather jackets. The back.

• 5:59Jordi Hays?

  And even the sneakers, I feel like are pretty iconic.

• 6:02John Coogan?

  Yeah, like the uniform is really starting to compound where it used to just be the jacket. Soon we will know the exact brand and specs of the pants as well as the shoes. And the whole Jensen uniform will be out in full force.

• 6:17Jordi Hays?

  Yeah, the clothing industry doesn't want you to know this, but wearing, just getting a few. Pieces of clothes that you like and then wearing them until they fall apart.

• 6:27John Coogan?

  Yes.

• 6:27Jordi Hays?

  Incredibly underrated. Not saying that's what Jensen's doing, but it's pretty funny. I tend to wear almost the exact same thing.

• 6:35John Coogan?

  Yep.

• 6:36Jordi Hays?

  Every day. And so sometimes people on the team will come in and be like, oh, we're matching today. And like, every day you dress like this, you will match with me.

• 6:44John Coogan?

  Yeah, that's right. That's right. There's obviously a personal brand benefit to adopting a uniform. We've seen it with Jensen, Steve Jobs with the black turtleneck, Palmer Lucky with the Hawaiian shirt. Big news from Anduril today. New round series. Are they running out of letters? Series H?

• 7:03Jordi Hays?

  H.

• 7:04John Coogan?

  Series H. Fifty-one, sixty-one billion, something like that. Fantastic progress. But you adopt the uniform, you become more iconic, you become more recognizable outside of your face, and that builds your personal brand, your lore, and it helps you sort of differentiate and stand out, right? The flip side, the thing you got to watch out for is that if you are always dressed exactly the same and you never switch your wardrobe, clips of you saying something a decade ago can go viral. And if you're not, if you're aging gracefully, it will look like you said them just yesterday. And that can be a big problem if, say, you're an AI CEO who a decade ago was reading some sci-fi and thinking like, man, there's something to this Terminator thing. And then maybe in the past decade,

• 7:47John Coogan?

  you've done a lot of work, you've investigated the systems, you have a more informed position and opinion. Well, the old video of you still looks like you today. And so there might be something to leveling up the wardrobe and changing the wardrobe over time that actually creates more distance between, oh, well, clearly that was.

• 8:08Jordi Hays?

  This is indirect way of saying you want Jensen to be in a leather, sort of like, you know, sort of trench coat eventually, like flowing robes.

• 8:16John Coogan?

  Well, the easiest thing to do is go bald. That's what Jeff Bezos did. He was saying some crazy stuff back when he was building Amazon in the nineties and he's changed his opinion. It will be very evident from new clips that, oh, that's an old one because it's very iconic, his older look. Now his new look, he looks transformed, he looks very different.

• 8:35Speaker 02

  I don't think Jensen has to go bald, but he can do the Bezos playbook, which is just get like, get really jacked.

• 8:39John Coogan?

  Get really jacked.

• 8:40Speaker 02

  So as he gets more jacked, you'll just see, oh, yeah, there's, I mean, he's looking like 320 lean right there.

• 8:45John Coogan?

  There you go.

• 8:45Speaker 02

  Like, that must be pretty decent.

• 8:47John Coogan?

  Jensen at 320 would be electric. Uh, well, he's

• 8:52Jordi Hays?

  We have a video of the Air Force One Golden Palace.

• 8:56John Coogan?

  Okay.

• 8:56Jordi Hays?

  Pull it up.

• 8:57John Coogan?

  What is the Golden Palace?

• 8:58Jordi Hays?

  That's the

• 8:59John Coogan?

  Is that what they call the interior these days?

• 9:01Jordi Hays?

  The Air Force One that was gifted by Qatar.

• 9:04John Coogan?

  Okay. And that one is never going to be in use, but going to go straight to the library, I think. Is that the idea or is it going to get flown around? Well, let's, uh, let's watch the

• 9:12Jordi Hays?

  Demibly it's going to be you.

• 9:13John Coogan?

  Golden Palace. Really? Particular aesthetics here. It looks like a normal 747 on the outside.

• 9:20Jordi Hays?

  Looks like a yacht.

• 9:21John Coogan?

  I feel like, isn't there a big, uh, there's a big swing in, in, uh, fuel efficiency based on the color of the plane? If you paint your plane black because you think it looks cool, it will attract more heat and you will burn a lot more fuel. And so most companies go with white, uh, Spirit Airlines went yellow. I don't know if that had anything to do with their downfall, but, uh, you would think, is there a chance? Is there some weird economic logic where if you paint it gold, the gold will reflect the sunlight? And increase

• 9:53Jordi Hays?

  Well, unfortunately, the exterior is not

• 9:55Speaker 02

  Well, so you should wrap your plane in like a mirror like

• 9:58John Coogan?

  Yeah, maybe. But yeah, I don't know if that actually

• 10:00Jordi Hays?

  That would reflect the most.

• 10:01John Coogan?

  That would probably reflect the most, right? Mirrored plane. There are some silver, there are some silver bombers and, and jets that are in service across the United States Air Force. I can't call upon it right now.

• 10:14Jordi Hays?

  This really is a sky yacht.

• 10:16John Coogan?

  Chessboard. You think anybody's played chess on there?

• 10:19Jordi Hays?

  4D chess.

• 10:22Speaker 02

  Yeah, the whole plane is actually used for 4D chess, John.

• 10:27John Coogan?

  4D chess. Chess is already 3D by default. It's a 2D playing board, but time is the third dimension. Because the term that you're on is a dimension as well.

• 10:37Jordi Hays?

  This goes deeper than I thought.

• 10:39John Coogan?

  So 4D chess is merely a 3D representation of 2D chess that's played over time. That is the fourth dimension. Anyway, uh, AI is being put to good use visualizing Xi Jinping, Donald Trump. Elon Musk and Tim Cook having a beer and I guess a cigarette as well in, uh, in China somewhere. And then look who pulled up. If you scroll down, Jensen coming in from the back, looking pretty good. Looking pretty good. Maybe not 320 lean, but he's certainly up there. He's scrolling up, uh, and people are really having fun with this. It, it turned into a little chain letter.

• 11:17John Coogan?

  Anyway, um, what, uh, let's go through the Wall Street Journal's report and the, what the editorial board had to say about the stakes of this summit, what, what's actually at stake. So, "The United States wants stability, but Chinese Communist leader has larger ambitions", says the Wall Street Journal, Journal's editorial board. "President Trump visits, visits Chinese President Xi Jinping in Beijing on Thursday, and the pre-meeting U.S. spin is a 'search for stability' in quotes. It's a nice idea, as long as Mr. Trump doesn't think personal rapport can overcome Mr. Xi Jinping's anti-American purposes," says the Wall Street Journal. "The agenda ranges from trade to technology to Iran. On trade, the best outcome may be

• 12:02John Coogan?

  ratifying the status quo, a truce on tariffs, with a promise from Beijing not to hold the world's rare earth supply hostage again. The markets, business leaders, no one wants chaos, everyone can sort of work around a tariff plan if it's going to stay in place for a long time."

• 12:20Jordi Hays?

  It is really funny for Trump to be coming in being like, "Look, guys, all I'm asking for is a little stability."

• 12:25John Coogan?

  Yes.

• 12:27Jordi Hays?

  "I just want stability."

• 12:29John Coogan?

  Yeah.

• 12:30Jordi Hays?

  "I want calmness."

• 12:31John Coogan?

  Yes.

• 12:32Jordi Hays?

  "I don't, I don't want any conflict."

• 12:33John Coogan?

  Yes. Didn't he famously call himself a "stable genius"? That he, stability has been part of his brand for a long time. Uh, at least the one that he projects. Uh, Mr. Xi Jinping, on the others, on the other hand, uh, China's weak economy is incentive for him to cooperate, and he'll hope to placate Mr. Trump with promises of buying more farm goods, uh, we talked about this previously, more aircraft and, uh, other things. Uh, so that's maybe why Boeing is there, although there is not, it doesn't look like there's representation from a, an agricultural leader, though I, I can't name one off the top of my head, but maybe they should be in, uh, uh, maybe they should be represented. Uh, but Mr. Xi Jinping has made that promise before, and U.S. farmers have never regained

• 13:17John Coogan?

  their lost market share in China. Uh, rare earths ransom offer, uh, the rare earths ransom offer may be more U.S. Advanced chip exports to China. Xi Jinping views artificial intelligence as a decisive theater in Beijing's competition with the United States. And he is trailing, though not by much, maybe six months by most people's estimates. The administration wants to talk with Beijing about AI guardrails and by all means, keep the phone lines open. But don't expect much from AI arms control. And the best deterrent is US dominance on models and computing power. Beijing will be happy to make pronouncements about responsible stewardship and then pursue its own interests with little regard for norms or laws.

• 14:02John Coogan?

  Beijing is engaging in, quote, "industrial scale theft of American AI models." The Trump administration warned this year, and don't forget the Justice Department's indictment this year of a technology executive and associates allegedly running a sophisticated operation to divert high-end chips to China. That was.

• 14:20Speaker 02

  Super micro.

• 14:21John Coogan?

  Super micro. Yeah, they were doing the heater. What was it? The hairdryer?

• 14:26Speaker 02

  Yeah, they were putting the fake shipping labels on there.

• 14:29John Coogan?

  Fake shipping labels. Yeah. Noticeably absent from this trip are the key leaders of the top AI labs. I mean, Elon Musk is there, yes, and Jensen is there, obviously deeply involved in AI, as are many of the other folks. Dean of Powell McCormick at Meta, but you don't have Demis from Google, you don't have Sundar from Google, DeepMind. You don't have Dario from Anthropic or Sam Altman from OpenAI. And each one of those leaders has their own complicated relationships with the federal government and the Trump administration. So it's not shocking that they aren't there, but it does feel like there's a little bit of a disconnect between the conversation that's happening in Silicon Valley and the conversation that's happening on the global geopolitical stage at the highest levels.

• 15:15John Coogan?

  And so if you were looking for answers to some of the biggest questions posed about how superintelligence will play out in the global stage, the AI 2027 scenario, the China wakes up scenario. You're gonna have to keep waiting because that's not really what this is about. It's about maybe a little bit of semiconductor supply chain details and export restrictions, but not answering the big questions about what a US-China relationship looks like in.

• 15:49John Coogan?

  A post AGI world, a post ASI world, a post, you know, a fast takeoff scenario.

• 15:55Jordi Hays?

  OTP says, why is Meta there at all? Good question. All Meta platform products have been banned for quite a long time. I don't think that will change, but they have this Manus thing. I think it might just be to show some friendliness, some presence there. Again, I'd be shocked if there's any time between Xi and Trump that gets dedicated to Manus because like $2 billion is really a rounding error when you look at all of these other issues.

• 16:24John Coogan?

  But it is a big question for both economies. Not only can American companies acquire Chinese companies that have relocated to Singapore and have sort of moved out, like how strict will China be around maintaining talent and restricting exports of whole companies and technologies? There even like a single sentence on it from this talk will clearly resound throughout the industry. And so, the Venus flytrap that Xi Jinping is setting for Mr. Trump is on Taiwan. Xi Jinping wants veto power over arms sales from the United States to Taiwan, and he is pressing for the United States to formally oppose Taiwanese independence

• 17:07John Coogan?

  as opposed to the current posture of not supporting it. Xi Jinping will argue, the tweak is of no great consequence to Americans and stroke Mr. Trump's ego that he can bring peace to one more troubled region. Yet, that change would disrupt decades of US policy that, for all its delicate diplomatic wording, has held the peace. Taiwan is not the aggressor in the Taiwan Strait, a Xi Jinping fiction that opposing independence would indulge. Mr. Trump may not care about Taiwan's freedom or its example that a prosperous Chinese democracy is possible, but the president doesn't want a crisis on his watch, which would be an

• 17:51John Coogan?

  economic and geopolitical catastrophe. That's 100% accurate.

• 17:55Jordi Hays?

  He would never want an economic, geopolitical catastrophe on his watch.

• 18:01John Coogan?

  Xi Jinping will be looking to see if Mr. Trump suggests he won't defend Taiwan in the clutch. Trump's diplomacy is above all personal, and no one can predict what he'll do in the room. Japan and others in the region are watching with anxiety. A reminder that US support for Taipei is an interest that informs America's alliances around the world. One mistake would be not stopping in Tokyo to advance Beijing in advance of Beijing as a signal of solidarity with Japan. Trump has said he'll bring up the case of political prisoner Jimmy Lai, but Xi Jinping won't move to release the 78-year-old publisher who was convicted of bogus charges in Hong Kong unless he believes Trump's request is more than a token gesture.

• 18:45John Coogan?

  The US wants China's help on Iran, and it would be an improvement if China at least stopped actively helping the enemy. Retired Navy Rear Admiral Mark Montgomery suggested last week that Mr. Trump should ask Xi Jinping directly if he's helping Iran with intelligence. And the Wall Street Journal goes on to say, "The larger context for the summit is that the CCP continues to be the main financier and industrial base for the world's bad actors, from Russia to Iran to North Korea. The first Trump administration understood China as a strategic adversary, military, economic, and ideological. The second Trump admin is searching for detent, and Mr. Trump is the chief dove." This has some merit if America spends the interlude diversifying its rare earth supply

• 19:26John Coogan?

  chain and passing a $1.5 trillion defense budget to rearms, says the Wall Street Journal editorial board.

• 19:33Jordi Hays?

  Yeah, and a lot of people are speculating that there's already been significant deals that have been made and that this whole thing is ceremonial, because if you make this huge trip and you bring all these leaders of industry and then you don't come away with some significant progress, like it just feels like an even bigger owl. So I'm expecting some...

• 20:01Jordi Hays?

  Some real progress out of this.

• 20:02John Coogan?

  Yeah.

• 20:04Jordi Hays?

  And it's good to, it's good to, it's good to see.

• 20:10Jordi Hays?

  Every time we talk to a China, to an expert on China like Bill or Jordan Schneider, it's always shocking like how little like direct comms there actually is between these groups like, and so the more the better.

• 20:26John Coogan?

  Well, in somewhat related news, Anthropic has granted Mythos access to three major Japanese banks. Japan's three mega banks are set to gain access to Claude Mythos, the powerful artificial intelligence model developed by US startup Anthropic as soon as the end of May. The banks MUFG Bank, Sumitomo Mitsui Banking Corp. and Mizuho Bank were likely informed of the move by the US Treasury Secretary Scott Beson in a meeting in Japan on Tuesday. This will mark the first time that a company from the East Asian nation has been granted access to Mythos. The AI model which can discover and exploit software security laws far faster than earlier tech had been restricted to just 50 or so corporates

• 21:08John Coogan?

  and organizations worldwide, including US firms, US banks, and UK government organizations. So this isn't the first international expansion since the UK did have access, but now Japan does. Japanese Prime Minister Sanai Takeichi had instructed cabinet members to ramp up efforts to find cybersecurity weaknesses in Japan's infrastructure and minimize risks posed by cutting-edge AI models like Mythos. Access to Mythos was likely mentioned in her meeting with Beson on Tuesday. And so Chris McGuire says tonight, the Secretary of the Treasury is personally vetting and approving each company that gets access to the most advanced US AI model because the risks of the model being misused to hurt US national security are so high. Also tonight, Jensen Wong is flying on Air Force One with

• 21:52John Coogan?

  President Trump to Beijing to sell China the AI chips it will use to develop its own Mythos-level AI model as soon as possible. The administration's AI policy remains inconsistent, incoherent. It is impossible to justify these two approaches simultaneously.

• 22:08John Coogan?

  Yeah, I'm still sympathetic to the export control take. At the same time, I feel like there's a larger negotiation that's going on, so I can sort of see both sides. But the interesting question that I've been noodling on, that I haven't fully gotten to the bottom of, is, you know, Dario has said that, you know, the open source community, China, is maybe six months behind Mythos, and that seems to fall in line with the progress that we're seeing from all the American labs. And so, the interesting question is, what would the Mythos moment look like in China? Because in America, there was a showdown with the Department of War, and Dario going back and forth, and Emil Michael, and there

• 22:50John Coogan?

  was threat of a supply chain designation, which it doesn't feel like ever really went anywhere, because the business is still cooking, and it's available on all the hyperscaler clouds, and the models being granted to Japan. And so, it feels like the administration has backed off of that. But it was a really tense moment, and it did call into question all these debates around what rules and what authority should rest with the private sector versus the government. And America handled it in sort of a democratic way, loosely, sort of evaluating the technology, having the option to sort of nationalize, and there's

• 23:33John Coogan?

  this bigger discussion around that. But in China, we've seen many times where tech companies have gotten really big, and it feels like the CCP is applying pressure to the CEOs. And Hi Flyer is, the company behind DeepSeek, is in a very unique position where the founder has an immense amount of control. And, you know, no matter what you think of

• 23:56Jordi Hays?

  He's investing 2 billion of his own money into a really low dilution round.

• 24:00John Coogan?

  Yeah, and I'm pretty sure he's a solo founder who, like, owns probably like majority control, at least majority voting control, if not majority economic control. And that's wildly different than Anthropic, where Dario had like 15 co-founders, tons of dilution from different funding rounds.

• 24:18John Coogan?

  And you know, we had talked about the SPV thing yesterday, like there are lots of people on the cap table like Anthropic is going the way of like a typical American company where there are lots of different stakeholders. They might be a public company soon, which means the government has more oversight as the SEC controls a lot of what they will do. And so you're in this odd scenario where you you could have a similar level of technology deployed in China from a very closely held private company. That is up against a much more aggressive government. And so what that looks like, yeah, what that looks like.

• 24:55Jordi Hays?

  Functionally, yeah.

• 24:58John Coogan?

  Like if you can't do e-commerce without disappearing for a week or something like, like, do you think you can do mythos level AI cybersecurity? Bug finding at the same time while having full control and not being a public company like there are like, it feels like the stakes are much higher. For when deep seek, if deep seek is able to catch up, you know, there's some, there's some, some evidence that like China's on a slightly. Shallower growth trajectory, but still, you know, if you take Dario's claim of six months, even if you extend that to a year, like something is going to happen there where China is going to have their own mythos moment. And what that looks like and what we learn about it, I think is going to be dramatic and interesting.

• 25:43John Coogan?

  And also it's just, it's just odd that like this moment, there's this backdrop of all this stuff that's happening in AI in America. And then there's going to be, you know, talks over like, you guys want to buy more apples, basically. Or like, like, you know, what, I mean, obviously there's going to be more high stakes discussion around geopolitical conflicts and rare earths. But we are talking about like tariff rates at a time when they're like, just a couple of months ago in America, we were talking about like, you know, is AI going to like be able to take over the government? And like, what does that mean? And how does the government control the AI technology as it diffuses? So very, very interesting things coming at some point. A lot of this will probably be pre-negotiated behind the scenes since the mythos moment happened in America.

• 26:28John Coogan?

  And Xi Jinping obviously saw it and can get ahead of it. But you do see this consolidation of control at DeepSeek and there's a question about, yeah, well, where does that go? Tyler, do you have any thoughts on this? Am I directionally correct on the timeline?

• 26:44Speaker 02

  Yeah, I mean, it seems like there's the graph that shows that open source is increasingly getting further and further away from frontier models. But yeah, I don't know. It's just so hard to tell what's actually going on in China. Like, what is it actually? Like, what happens when the CCP starts to have more control over a company? Like, what does it actually look like? In instantiation?

• 27:04John Coogan?

  Yeah, I mean, it's interesting. Like, so much of the way the US government exercises control over the development of AI is on the FDA regulatory. We want to review it. We want to take a look at it. We want to take it for a spin and throw some prompts in there before we let you send it to Japan, for example. And in China, it's a much more industrial process where, you know, if the chips are coming in and it's a whole negotiation at the government level, there's just the question of like, okay, can you even get the data center to? And it's much earlier stage. Whereas that's not happening in America at all. Like, there hasn't been any movement on the government saying, okay, well, we're going

• 27:46John Coogan?

  to, the way we're going to control AI is that we will be, we will decide if you can have a gigawatt. We will decide if you can have 10 gigawatts. Whereas in China, that's sort of the de facto status quo.

• 27:56Jordi Hays?

  Yeah, they still are very pro-competition. At least until you get these breakout winners. So we'll see how that.

• 28:05John Coogan?

  And can they continue to be pro-competition if they need to consolidate all of the black wells that are coming into the country into one data center, this network together that can actually train a Mythos-level model? Right. That's a big question. But people are having huge FOMO over the summit. Dude, I wish I was in Beijing with Elon Musk, Trump, and Xi Jinping, talking business, discussing AI, real boss moves. Must be a movie, says someone who we're not going to read because it's a bad name in the thing. Anyway, speaking of Elon Musk.

• 28:39Jordi Hays?

  SpaceX and Google are in talks to launch data centers in orbit. Deal between the two tech titans would give a boost to SpaceX's business ahead of a historic public listing. Google is in talks for a rocket launch deal as the search giant expands its own efforts to put orbital data centers in space. Launch deal would put the two companies in partnership as they gear up to compete on orbital data centers, an unproven technology that SpaceX CEO Elon Musk has said is the next frontier for his rocket company. Google is also in discussions about a potential deal with other rocket launch companies. They gotta at least have a stalking horse.

• 29:18John Coogan?

  How are we not talking about blimp data centers yet?

• 29:20Jordi Hays?

  I know.

• 29:21John Coogan?

  Sergey Brin has a blimp company. You know, Bezos has a rocket launch company. So there's a very logical line from AWS to space data centers through Blue Origin. But we gotta put some GPUs on the blimps. We gotta start mass manufacturing the blimps. This could be the thing. I mean, no, there's no NIMBY-ism in the middle of the Pacific Ocean if there's just a bunch of blimp data centers floating around in a circle.

• 29:48Speaker 02

  Well, I think if you're already in the ocean, you should go down as well. You know, Atlantis, Max.

• 29:52John Coogan?

  Cooling.

• 29:53Speaker 02

  Yeah, I feel like none of the ocean guys that are working on ocean robotics are thinking about like putting data centers at the bottom of the ocean.

• 30:00John Coogan?

  Yeah, I mean, it feels easier than than space data center. And certainly the space is free, the land is free, you don't run into the regulatory stuff, cooling potentially free. Energy, little bit tricky down there.

• 30:13Speaker 02

  Geothermal?

• 30:14John Coogan?

  Geothermal, maybe. I don't know.

• 30:16Jordi Hays?

  No, there's, there's, there's oil and natural gas reserves.

• 30:19John Coogan?

  You have to bring oxygen there because how do you burn the oil and the natural gas and water?

• 30:26Jordi Hays?

  Big, big.

• 30:27John Coogan?

  Diving bell, tube, yeah, scuba, scuba tanks or something. Anyway, let's continue. Where are we in this? SpaceX and Google?

• 30:34Jordi Hays?

  Speculative technology has been at the center of SpaceX's pitch to investors ahead of its planned IPO this summer, which is anticipated to be the largest IPO of all time. Last year, Google announced its own plans to launch prototype satellites by 2027 as part of a moonshot initiative called Project Sun Catcher. It's working with another company, Planet Labs.

• 30:53John Coogan?

  It's a cool name.

• 30:54Jordi Hays?

  To build those satellites. We're working on getting Will Marshall from Planet Labs on the show in the next week or so. We'll send tiny racks of machines and have them in satellites, test them out, and then start scaling from there, says Sundar. There's no doubt to me that a decade or so away, we'll be viewing it as a more normal way to build data centers. A little bit of an interesting timeline there.

• 31:21Jordi Hays?

  There's no doubt to me that a decade or so away will be viewing it as a more normal way.

• 31:30John Coogan?

  Yeah.

• 31:30Jordi Hays?

  A decade or so away.

• 31:32John Coogan?

  He's being a little cautious in his language on his timelines, but.

• 31:36Jordi Hays?

  Google was an early investor in SpaceX and owns 6.1% of the company. Not bad. The other, the other funny dynamic from SpaceX's deal making recently is given that the OpenAI startup fund was an early investor in, I believe, Cursor's seed round.

• 31:57John Coogan?

  True.

• 31:57Jordi Hays?

  The $8 million round. OpenAI, at least the startup fund, will have some meaningful exposure to SpaceX.

• 32:06John Coogan?

  Yeah, SpaceX, an OpenAI-backed company. That's the way people will introduce it. OpenAI-backed SpaceX IPO.

• 32:11Jordi Hays?

  Yeah, I thought it was, it was quite interesting having that happen while the whole trial was going on.

• 32:17John Coogan?

  Everyone owns everything. Everyone has diversified into every, every company at this point, basically.

• 32:24John Coogan?

  Let's see. The company last week announced a deal to sell earthbound computing resources to the AI company Anthropic. As part of the agreement, Anthropic expressed interest in working with SpaceX on orbital data centers. Earlier this year, SpaceX filed an application with federal regulator to launch up to a million satellites for its orbital data center ambitions. That's crazy. I remember, didn't they get, what was the original Starlink approval? I thought it was like tens of thousands, maybe 100,000 satellites? I'm starting to think like, like, looking ahead, there's going to be a backlash to like, they're blocking out the sun. Like, we've seen The Matrix. This happened in The Matrix, but for like, chemical reasons.

• 33:05John Coogan?

  But like, if there's like, like, light pollution from this at all, it's going to be a absolutely massive, oh yeah, Panthalassa, ocean data centers. You don't need to sink them to the bottom of the, of the Mariana Trench.

• 33:19Jordi Hays?

  How could we forget?

• 33:19John Coogan?

  Just do them on the, on the ocean. Did you, did you look up how many satellites SpaceX currently has in orbit? Cause I think, I mean, it's a huge number. It's over 10,000, I believe, but a million is a huge jump. But that should be, that actually should math out. I think we did the math. That should math out to gigawatts in space, which is definitely meaningful.

• 33:40Jordi Hays?

  So right now they have, like, just over 10,000 satellites.

• 33:43John Coogan?

  Just over 10,000. Okay. But I think they're approved for maybe up to 100,000 or something? And so they go and get the huge, the huge allocation and then they start launching. Very, very excited to see the progress on Starship. What, isn't there a launch that happened? Or is happening this week?

• 34:01Jordi Hays?

  Yeah, when's the next?

• 34:03John Coogan?

  Tyler, when you look up the latest launches, I'll keep reading.

• 34:05Jordi Hays?

  Uh, the other, the other story, this was back in March, uh, Blue Origin has a play in, in space data centers as well. So I would kind of, you could imagine them and Amazon teaming up in some capacity, but you could also imagine Amazon saying like, hey, if we're going to be a real player here, we need to, we'll probably need to work with them.

• 34:23John Coogan?

  And then Star Cloud finally, uh, probably finds a dance partner, if not multiple. Many industry leaders see orbital computing as a solution to the limitations of earthbound data centers. Earthbound is capitalized. It's a proper term now, uh, which requires swaths of land and power. These data centers are designed to be powered by solar panels emitting, uh, eliminating the major power constraint faced by data centers on earth and one of the major ecological issues with emerging technologies. Uh, but there are also major engineering challenges. Uh, SpaceX made its name as the world's leading private launch provider, sending NASA astronauts to the space station and launching thousands of satellites as part of its Starlink internet constellation, over 10,000 apparently. Uh,

• 35:05John Coogan?

  as it prepares to go public, SpaceX has struck a number of deals that have rewritten its balance sheet, helped Musk consolidate his companies, including its acquisition of XAI. Uh, and SpaceX also announced a deal with Cursor as we have talked about on the show. Star, uh, Starship, what's the update on Starship?

• 35:23Jordi Hays?

  The next launch, the 12th one is next Tuesday, the 19th.

• 35:26John Coogan?

  Next Tuesday?

• 35:26Jordi Hays?

  That's when they're targeting, so.

• 35:27John Coogan?

  Okay, yeah, yeah.

• 35:28Jordi Hays?

  And what's their goal?

• 35:29John Coogan?

  But they were like moving it down the runway, sort of getting ready to start.

• 35:32Jordi Hays?

  Do you have any idea what success looks like?

• 35:36John Coogan?

  I think getting it.

• 35:37Jordi Hays?

  This is the first orbital test of the V3.

• 35:39John Coogan?

  Okay.

• 35:39Jordi Hays?

  Um.

• 35:40John Coogan?

  So they got to get it to orbit and then get it back and probably land it, but are they going to land on land or water? Cause I, it, the last, didn't the last one make it up and back, but exploded in the water? Or was that the Blue Origin new Glenn? I don't know. Anyway, there's a whole deep dive on space data centers in the Wall Street Journal. They say, is it a pipe dream or AI's next big thing? They're pointing out some of the challenges. You're going to need thermal louvers, opening and closing shutters to block or allow heat, thermal contacts, special bolts to separate items with different heat requirements, deployable radiators. Heat is transferred to special surfaces that unfold in orbit.

• 36:25John Coogan?

  It looks like a big

• 36:26Jordi Hays?

  Pull up this graphic showing sun synchronous orbit.

• 36:29John Coogan?

  Yeah, this is cool. So when, if you're orbiting the Earth vertically, essentially, the sun is constantly hitting the satellites, so you're not out of power for half the day. But they say these radiators for data centers will likely be very large. I like that. Phase change materials, materials that can absorb, they can change phase to absorb heat like wax or salicylic acid, usually from solid to liquid when returned to normal when temperatures reduced. Sun synchronous orbit, 373 miles to 497 miles up. So about 400 miles up is when you get into sun synchronous orbit.

• 37:14John Coogan?

  That's on the low end of low Earth orbit, low Earth orbit, around 1,000 miles. Mid orbit, 1,000 to 10,000 miles. High orbit, over 22,000 miles. And so we covered a decent amount of this, so we can, we can move on. Do you want to talk about

• 37:35Jordi Hays?

  Shahnu Matthew

• 37:36John Coogan?

  Yeah.

• 37:37Jordi Hays?

  was adding to the conversation we had with Duneberg.

• 37:40John Coogan?

  Duneberg was fine.

• 37:41Jordi Hays?

  Duneberg was saying the only way the data center build out will be successful is by either breaking all the rules or going off grid. And Sean who said the tech crowd keeps leaning into this off-grid is the only way thesis. And I disagree with this notion. The exhibit example of XAI Colossus even overstates what's actually happening at Colossus.

• 37:58John Coogan?

  Okay.

• 37:58Jordi Hays?

  XAI did not build a permanently off-grid AI campus because the grid was unusable. Colossus already has 300 megawatts of TVA interconnect approved across two substations XAI funded. Plus contractual obligations to curtail during periods of grid stress. That is a grid tied architecture with supplemental onsite generation, not an islanded power system.

• 38:21John Coogan?

  I think I think Duneberg was like the other side of this that Duneberg did highlight was like. Colossus is the exception that proves the rule because it moved so quickly and and took advantage of so many different grids. And there were power generation from multiple states at one point. And now there is pushback, like there wasn't pushback when Colossus was built originally because. Data centers were not a hot topic and it's the same thing with launching rockets like. We were talking to someone who lives up in Santa Barbara. They're launching a lot of rockets from Vandenberg. It's getting to be a lot of traffic. It hasn't risen to the level of, you know, protest, but you can imagine that building 10 more Vandenberg's would be difficult.

• 39:07John Coogan?

  Because you go to the local community and you say, hey, we're going to build a a a space launch station, a spaceport. And they say, oh, that sounds good. Like you mean, because we're going to go to the moon once a decade and you're like, no, we're going to launch rockets. 10 times a day or 100 times a day and people, if they have an example that they can draw from. And say, oh, well, like that community doesn't like it, so I shouldn't like it. That's some of the pushback. But anyway, we can keep reading Sean Matthew's post.

• 39:36Jordi Hays?

  Yeah, let's.

• 39:37John Coogan?

  Turbines solved a time to power problem, so it accelerated the deployment while substations and transmission infrastructure were being built. That's very different from do all of this off-grid and economically, most large scale AI load will still want to be grid tied long term. Interesting. I have made this point several times, but running. Your own generation fleet at hyperscale is expensive and operationally complex. Fuel logistics, maintenance, N plus one redundancy permitting, emissions compliance, balancing load and supply continuously, multi-year equipment lead times. You don't just figure that out or want to do that overnight. Amin, the chief technology officer at, or the chief

• 40:20John Coogan?

  technologist at Google AI, does that mean DeepMind? Or straight up confirmed this on a podcast and they literally bought a hybrid power island, hybrid island power developer. BTM generation absolutely matters. It's becoming a critical bridge solution during a period where utility interconnect timelines are badly lagging demand growth. But I'd strongly push back on the idea that the steady state future is fully off-grid hyperscale campuses. The industry is converging towards hybrid architectures, grid interconnect plus captive generation, plus storage, plus demand response. They're throwing the whole kitchen sink at it. Anyway.

• 40:59Jordi Hays?

  Related.

• 40:59John Coogan?

  Yes.

• 41:00Jordi Hays?

  More Perfect Union had a post earlier and

• 41:06John Coogan?

  They're turning off.

• 41:07Jordi Hays?

  I read it. Nearly 50,000 people in like in the Lake Tahoe area have been told their utility will stop providing power to them because it's redirecting that power to data centers. And the energy, the Nevada utility that supplied most of Lake Tahoe's electricity for decades says that next year will stop servicing homes in the area and instead direct that electricity to the growing demand from Nevada data centers. Northern Nevada is one of the fastest growing data center corridors in the country. I read this. I was like, this is completely insane.

• 41:35John Coogan?

  It's so stupid. Like you read it and you're like, this is such an L in the making for the data center industry. What were they thinking?

• 41:43Jordi Hays?

  And then it's immediately getting community noted. And a quote from the president of Liberty Utilities in Lake Tahoe says, this does not mean the power is shutting off.

• 41:52John Coogan?

  Yeah.

• 41:52Jordi Hays?

  Energy companies, utilities and large customers change energy supply frequently. So there's a supplier of energy that is saying like, hey, we're not going to renew our contracts. We're going to divert the energy elsewhere. But there's a bunch of suppliers of energy.

• 42:04John Coogan?

  Sure.

• 42:05Jordi Hays?

  And so Andy Masley says, everything MPU posts about data centers is complete garbage. They have zero respect for their audience. Literally no one here is losing power. This tweet is a complete lie. What's actually happening is that a supply contract between two utilities is ending and the small one is just buying power from elsewhere. And this was all expected to happen since. 2009.

• 42:25John Coogan?

  No way. Wow.

• 42:27Jordi Hays?

  The company that serves.

• 42:28John Coogan?

  I thought you were gonna say like two years ago.

• 42:30Jordi Hays?

  The company that serves homes on the California side of Lake Tahoe is a small utility called Liberty. Liberty buys about 75% of its electricity from a much larger utility, NV Energy in Nevada, and generates the other 25% itself from solar farms it owns. Liberty sells, then sells that 49,000, to 49,000 customers. NV Energy has told Liberty it will stop selling them wholesale power after May 2027. It's kind of like Liberty's a coffee shop that buys beans and sells coffee to customers. The customers are the homes and the beans are the electricity it buys from NV Storage and/or makes itself. This is like your local coffee shop ending a contract with a specific bean company and started buying beans from somewhere else. It doesn't stop you from buying coffee.

• 43:12Jordi Hays?

  Why is their contract with NV, uh, why is their contract ending with NV Energy? NV Energy selling to Liberty was understood as transitional since it started in 2009. Long story short, NV Energy was basically Liberty's only wholesale option, but a new transmission line opening in May 2027 gives Liberty access to a much wider Western market and, among other things, a much larger share of solar and wind and hydro. That's the whole story here, ending the contract with NV Energy and opening up this much wider pool with much more renewable energy was the plan here, completely separate from data center demand.

• 43:47John Coogan?

  Interesting. Well.

• 43:48Jordi Hays?

  Anyways.

• 43:49John Coogan?

  It would be remarkable if all of Tahoe lost energy and Mark Zuckerberg couldn't charge his electric, uh, wakeboard. Because I, I, I somehow feel like.

• 44:01Jordi Hays?

  He would hit the streets. He'd be protesting.

• 44:03John Coogan?

  I think he'd be protesting. I think he would get something done if, uh, if power was lost to Tahoe. I mean, a lot of influential people are out there. So, uh, anyway.

• 44:12Jordi Hays?

  All right. We gotta talk about.

• 44:13John Coogan?

  Set the record straight on that.

• 44:14Jordi Hays?

  We gotta talk about.

• 44:15John Coogan?

  Unitree.

• 44:15Jordi Hays?

  Unitree GDO1.

• 44:17John Coogan?

  They build, they build a new robot and you're gonna love it. It's not scary at all. And it looks very fun and safe.

• 44:25John Coogan?

  This is from Avatar. They just built the mech from Avatar. This has been pictured many times in science fiction and will strike fear into many people.

• 44:38Jordi Hays?

  I like that they use a racing bucket seat.

• 44:40John Coogan?

  It is cool. It does feel very hacker culture. Like, it feels like this was like a crack team, a little skunk works project. This is, it doesn't look like as polished or ready for, you know, sale, but remarkable results.

• 44:54Jordi Hays?

  They're like, you gotta put this out so that the Americans cancel all of their technology ambition and just go back to the dark ages.

• 45:02John Coogan?

  It is intimidating. Is it a coincidence that it was launched the same day that the, or the same week that the summit is happening in China? I don't know. It is amazing that it turns into a horse of some sort, a four-legged creature. Although, how do you drive it at that point if you're laying backwards? It needs some sort of gyroscopic seat. That one hasn't really been considered because if you're laying back while you're driving it in horse mode, you're gonna be, maybe, maybe you'll just nap. Maybe you're like, oh, I wanna commute. You know, Henry Ford said if I asked people what they wanted, they would ask for a better horse. This looks like a better horse to me. You get to work,

• 45:45John Coogan?

  you pop up into vertical mode. I'm fascinated by how they're controlling it. Is it, is it just like a video game controller? Because some of this seems like it would require you to telegraph, like, in, in the, in the Avatar films, like, the, the operator of the mech has full, like, the input is the actual arms. So if they wanna swing a sword, they swing the sword, or they swing the machete physically with their arm, and then the robot does a bigger version of that.

• 46:14Jordi Hays?

  Timeline until... These meccas replace horses for police use cases.

• 46:22John Coogan?

  Oh, I don't know. There's gonna be pretty crazy pushback if that's rolling around during a riot.

• 46:26Jordi Hays?

  I know, but the benefit here is that the, I don't think the mecca will, um, you know, go, go to the bathroom on the ground.

• 46:33John Coogan?

  Obviously this is gonna happen at some point. A lot of these developments are very early. Uh, I bet you if you give that thing a strong kick, it falls over and sort of gets stuck at this point.

• 46:42Jordi Hays?

  Uh, Sailor Overrun X had pulled out the funniest part.

• 46:47John Coogan?

  Yep.

• 46:48Jordi Hays?

  Uh, which is that Unitree unveils the world's first mecca, show it breaking down a brick wall, and then in the launch announcement, they say, please, everyone be sure to use the robot in a friendly and safe manner.

• 47:01John Coogan?

  Yeah, wild. Uh, egocentric data collector versus the mecca-mounted tele-op Chad. Uh, absolutely. Wild, wild. Uh, is there another video of this? Oh, yes. This is an AI video, but we have to play the version of this getting hot dropped into what you could imagine as the battlefield with, uh, four FC 204 drone formation, max payload of 600 kilograms. Unitree's new transformer mecca, 500 kilograms of weight. That's probably without a human inside, so you might need six drones, but, uh, this is something that feels not that far away, not that far away. Although you drop that thing in the ocean, I feel like

• 47:44John Coogan?

  there, there are so many steps on the humanoid robot, uh, path where, you know, the deployment in a flat surface in a warehouse makes so much more sense than like standing on a ladder, straddling a chimney in the rain, and there's a little bit of mud and you're use a power tool and dust kicks up like actually ruggedizing all of this is probably a whole second step in this process where you're adding more weight. That means more battery. You need better battery technology. I don't think you'll be dropping this into the Taiwan Strait anytime soon, but it certainly strikes fear into the hearts of many. Uh, well.

• 48:20Jordi Hays?

  Uh, there's more humanoid news. Brett Adcock has a live stream going.

• 48:26John Coogan?

  That's right.

• 48:26Jordi Hays?

  Of their robots.

• 48:29John Coogan?

  Yeah.

• 48:29Jordi Hays?

  Um, I do wonder how their.

• 48:33Jordi Hays?

  Again, I'm sure the comments are all, how do we know this is actually live? Right? Like, how do you, how do we know?

• 48:40John Coogan?

  So is this the actual livestream right now? It's continuing going? Because I, I, I pulled this up an hour ago and it looked, I mean, I guess exactly the same because it's the robot and they've been sorting for an hour.

• 48:53John Coogan?

  Battery pack or plugged into the wall? What do we think? What's the battery?

• 48:59Jordi Hays?

  He says, watch a team of humanoid robots running a full eight hour shift.

• 49:03John Coogan?

  Okay. Okay, so they might have swapped it out at some point for a different one?

• 49:08Jordi Hays?

  Yeah, they could just trade.

• 49:09John Coogan?

  Interesting. It looks like a lot of progress.

• 49:11Jordi Hays?

  It's extremely fast.

• 49:13John Coogan?

  It is fast, like the movement's very natural. I wonder, what, what is the goal here exactly? Because the, is the robot sorting these? What, what does it do with the blue one?

• 49:27Jordi Hays?

  I, I think it's putting it so the shipping label is visible.

• 49:30John Coogan?

  Or the shipping label's down. Oh, okay, okay, okay. Yeah, that makes sense. That feels like, because some of the robot applications are things that you could do with a two-axis gantry or, or a sorter. Like, if you watch how it's made, there are industrial machines, not robots, that can do all sorts of sorting. Like, you watch like how Diet Coke gets filled and the cans roll down and at some point, they all need to be facing upwards. And so there's a machine that sorts them and, and tilts them all upwards. Obviously, the, the humanoid use case is much more unstructured and that is beneficial for so many things. I don't know. If, if this is your job.

• 50:13Jordi Hays?

  Apparently, they're just gonna have the robot go until it taps out.

• 50:17John Coogan?

  Ooh, okay, I like that.

• 50:18Jordi Hays?

  It's just cool.

• 50:19John Coogan?

  That's great. Very cool. Well, in other video news that we need to play, General Catalyst launched an ad on X that might be making it into TV ads or

• 50:32Jordi Hays?

  G cat?

• 50:32John Coogan?

  At some point, what?

• 50:34Jordi Hays?

  G cat?

• 50:34John Coogan?

  G cat? What's G cat?

• 50:36Jordi Hays?

  That's where all the

• 50:39John Coogan?

  Maybe that's the new ad campaign, but the campaign is called Meet GC and it's a clear reference.

• 50:46Speaker 03

  Hi, I'm GC.

• 50:47Speaker 04

  And I'm VC.

• 50:49Speaker 03

  Who's your friend here, VC?

• 50:50Speaker 04

  This is Woof AI, an AI-native companion platform that combines robotics and machine learning. You'll never want a real dog after this.

• 51:00Speaker 03

  Well, I think people like dogs as they already are, though, VC.

• 51:02Speaker 04

  You don't need to walk it. You never need to tell the kids you sent Milo to the farm. We're leading the seed and could probably make room for you.

• 51:10Speaker 03

  I'd love to hear more, but we actually have a really high bar around responsibility for these things.

• 51:16Speaker 03

  Is Woof AI OK?

• 51:18Speaker 04

  Of course he's fine.

• 51:23Speaker 04

  Oh, sorry, buddy.

• 51:25Speaker 03

  Doesn't look happy.

• 51:26Speaker 04

  It's easy, easy. Stay, stay. No, no! Stop, stop, stop, stop!

• 51:36Speaker 03

  I'm sure he'll be fine.

• 51:42John Coogan?

  Interesting symmetry to the podcast set that Reggie's doing, right?

• 51:46Jordi Hays?

  Well, I think Reggie directed.

• 51:48John Coogan?

  Yeah, but it's cool that like the brand like, like you could wind up doing two very different designs, but there's like a, there's a through line there, even though it's obviously a nod to the Mac versus PC ads from the 2000s, which we can pull up to watch one of those. I think we've watched these before. And they have a very similar, you know, stiff PC versus Mac look, but I think that's, I think that was a good message of like, OK, like, that's not-

• 52:20Jordi Hays?

  We're not like the other ultra-capitalists.

• 52:22John Coogan?

  But also like, let's not fund the stuff that like is pointless and useless. And if you already have a dog-

• 52:27Jordi Hays?

  And this is a big moment because you have been wanting a VC firm to just commit to paid advertising for a long time.

• 52:37John Coogan?

  Well, I wouldn't say this is a commitment yet. We gotta actually see some spend behind it. Yeah, of course, of course. Yeah. No, no.

• 52:44Jordi Hays?

  Magazine ads.

• 52:46John Coogan?

  Yeah, in the right. I mean, certainly in like the Wall Street Journal, in Forbes, and like the places that people, entrepreneurs go for information, it makes so much sense to to actually spend on advertising to build a brand, especially when you're at the scale of General Catalyst. Can we pull up the Mac versus PC ads? We're not going to watch all of them. There's 66 of them. Talk about a generational run.

• 53:08Speaker 05

  A lot of the same kinds of programs. Yeah, like Microsoft Office. But we retain a lot of what makes us. You should see what this guy can do with a spreadsheet. It's insane.

• 53:16John Coogan?

  Bogged.

• 53:17Speaker 05

  Yeah, he knows that I'm better at life stuff, like music, pictures, movies, stuff like that. Whoa, whoa, whoa. What exactly do you mean by better? By better, I mean, making a website or photo book is easy for me, and for you, it's not. Oh, that kind of better? Yeah. I was thinking of the other kind. What other kind?

• 53:35John Coogan?

  Um, we can switch away, because you've seen all these. Marc Andreessen quote tweeted it dunked. He said, "Stay tuned for our upcoming ad campaign. We're the VC who doesn't sneer at your idea." Interesting. Getting spicy. Yeah, red alert over there. Red alert. It's a lot of red alert going on. It's a long thing.

• 54:01Jordi Hays?

  Well, both companies are invested in robotics company Andro.

• 54:07John Coogan?

  Oh, yeah. I mean, I'm sure there's a ton of portfolio overlap.

• 54:10Jordi Hays?

  Oh, no. I just think, I just think like, in another world, that's an Andro product?

• 54:15John Coogan?

  Yeah.

• 54:16Jordi Hays?

  That dog thing?

• 54:17John Coogan?

  Probably.

• 54:18Jordi Hays?

  I'm sure they've experimented with that form factor.

• 54:19John Coogan?

  Andro's got some fresh funds. They need to build a Mecca. It is, I mean, if there's ever someone to build the Mecca, it would be Palmer Lucky. He has talked about this stuff. I even asked him on stage once, like, "Walk me through the Pacific Rim vision." Like, "How do we build that?" And we had a fun back and forth about it. Well...

• 54:40Jordi Hays?

  Do you remember? Do you remember much about his response?

• 54:44John Coogan?

  Yeah, so his response to stuff like that.

• 54:46Jordi Hays?

  That Meka form factor is just like, hey, I'm a, I'm a sitting duck on a platform.

• 54:51John Coogan?

  Yeah, exactly. So, so his, his point is always like, uh, the technology to build the Meka is way behind the technology to like, remote control something, or put an AI on board, or something like that. So, uh, you actually don't want to build the Iron Man suit, because you can just build the drone, the submarine.

• 55:11Jordi Hays?

  Or hell, use the example of like, the Batmobile. It's like, if you need a vehicle for the city, like, do you really need this like, massive vehicle, right?

• 55:19John Coogan?

  No.

• 55:20Jordi Hays?

  Clearly Bruce Wayne just wanted it.

• 55:22John Coogan?

  The parking car, he's obsessed with, he's obsessed with building Batmobiles, it's very funny. Um, I don't know, uh, that is a very cool demonstration, though, but, uh, uh, yeah. He, yeah, Andrew always says, don't build the Batmobile and focus on like, is there an actual, in like, urgent need from the military, is there support from Congress to actually appropriate the funds? And Unitree, I don't actually know, that feels like, just like an, that's like a marketing project at this point.

• 55:56Jordi Hays?

  Yeah, I mean, I think their, their IPO is like, very soon, right? I think the, the original application was like, late March.

• 56:02John Coogan?

  Yeah, that would probably pump it. And then also, uh, you know, they're, they're showing it like, break down a brick wall. But like, when I was thinking about what that's actually valuable for, we were talking about like, could you deploy that and like, sneak through a forest and then attack the enemy or something? It's so big, it's so invisible, like, a single drone with a, you know, fiber cable coming out of the back is going to blow that up. It doesn't really seem that practical. Um, maybe if you're going over really rough terrain, you want the legs instead of a tank tread, but you can sort of just put a huge tank tread on something and just crush everything in your way. Um, but if you're building and you need to get a bunch of two by fours onto the roof, like, there's a theory that that might be a little bit better.

• 56:46John Coogan?

  You were saying you're, you're forklift maxing, and you think the forklift will always defeat that, but. There's got to be certain areas where you can't necessarily bring a forklift because there's a narrow, it's an uneven ground, a narrow entryway into the back of a house. You have all the two by fours, you need to get them on the roof, you would otherwise be going up and down a ladder. And so, Mecca to the, to the, to the rescue.

• 57:11Speaker 02

  Yeah, I mean, I, it's just like, pretty hard to justify this. Like, I, I think, yes, for certain, like, emergency scenarios, it makes sense to have some, like, super weird form.

• 57:20John Coogan?

  Emergency, I need a really cool thing, piece of tech. I need something that looks really cool before my IPO. Emergency. Uh, well, um, we can, we can flip over to the other financial news that's making headlines on the cover of the Wall Street Journal. Inflation accelerated 3.8% last month. Not good news. Uh, Joe Weisenthal has a couple posts, but uh, one is just man. And he says, uh, the headline, US April producer prices rose 6% year over year. The estimate was 4.8%. So obviously the closure of the Strait of Hormuz is having an effect. We were talking about Diet Cokes. Uh, you would think that the, uh,

• 58:02John Coogan?

  the caffeine doesn't come from the Middle East, the, the delicious caramel flavor, whatever else they put in this, uh, it does not come from the Middle East. But aluminum, actually, there are smelters in the Middle East. Aluminum is in shorter supply because of the closure of the Strait of Hormuz. And so, uh, Diet Coke is rapidly going out of stock. And so, you need to load up if you're prepared.

• 58:25Speaker 02

  How many, you got four or five pallets?

• 58:27John Coogan?

  I have not actually gotten any, I'm not stockpiling Diet Coke yet. But who knows? Maybe prices go up, that's what inflation represents. And Wall Street is getting more anxious about it. So we can read through this quickly before we are joined by Max Levchin from Affirm. So, surging energy prices have pushed investors' inflation expectations to multi-year highs. Uh, Tuesday's hot readout on consumer prices is intensifying Wall Street's anxiety about inflation. Uh, even before the latest release of the Consumer Price Index, inflation expectations had been climbing, a potential trouble spot in the market where... Stocks have largely shrugged off the US-Iran conflict and the resulting energy shock.

• 59:10John Coogan?

  And so investors bet on inflation by buying and selling both ordinary US Treasuries and those that hedge the risk of inflation called TIPS, Treasury Inflation Protected Securities. The gaps between the yields of those two types of bonds, known as the break even rate, recently hit the highest level since October of 2022, according to Federal Reserve data, suggesting that investors expect annual inflation to average around 2.7% over the next five years. Now, that's not entirely doom and gloom, but the risk here is that the AI boom, the GDP numbers are sort of concentrated in AI, CapEx and data centers. It's not evenly distributed.

• 59:51John Coogan?

  The real economy is only growing at 0.1%, while the real economy is suffering from 2.7% inflation over the next five years. That's a recipe for stagflation, stagnation plus inflation, a very rough thing for any economy to go through and something that the market and the economy and the politicians should be focused on. So the 10-year break even rate has also climbed, hitting 2.5% this month, its highest level since 2023, driven largely by the war-fueled surge in oil prices. The rise in inflation expectation worries investors because of the challenges it poses for the Fed interest rates policy and major indexes latest run to records.

• 1:00:35John Coogan?

  And so for a while, everyone was thinking about maybe interest rates will come down, maybe mortgages will become more affordable, but there was even the whole debate or the fight with Powell and lawsuits, which were eventually dropped. But Powell and Trump were at each other's necks and issuing statements about their vision for the future of the American economy. And on the flip side, you have Kevin Warsh coming in, maybe more friendly, maybe more receptive to a rate cut, but the data makes that very, very hard to justify. And so we are in

• 1:01:11Jordi Hays?

  Yeah, in some ways, in some ways, you know, who knows how history will view Powell, but like he landed, he landed the plane.

• 1:01:21John Coogan?

  He did.

• 1:01:22Jordi Hays?

  And then, you know, we get war in the Middle East and now Kevin Warsh, in some ways, looks like he'll have just as tough of a job.

• 1:01:31John Coogan?

  Potentially, potentially. Well, our next guest, Max Levchin from a firm is a co-founder and CEO. He's returning to the show. We've been keeping him waiting far too long. Max, how are you doing?

• 1:01:43Max Levchin?

  I'm great. Thanks for having me again. Third time's a charm.

• 1:01:46John Coogan?

  Third time?

• 1:01:46Jordi Hays?

  What have you learned about?

• 1:01:48John Coogan?

  Third time can't be the charm. I want 25th time to be the charm. Let's keep it going. I love these.

• 1:01:52Max Levchin?

  I enjoy this journey.

• 1:01:54Jordi Hays?

  What have you learned about making coffee since the last?

• 1:01:57John Coogan?

  Yes, the important update.

• 1:01:59Jordi Hays?

  Because I'm assuming you're never like, oh, I'm pretty good at this.

• 1:02:01John Coogan?

  Or are you resting on your laurels? Are you, are you the final boss?

• 1:02:04Max Levchin?

  I'm absolutely not.

• 1:02:06John Coogan?

  Okay.

• 1:02:06Max Levchin?

  I took apart E61 Group, which is the classic 1961, sort of that that's the granddaddy of all the espresso group heads. And I wanted to learn how the mushroom valve works because I thought mine was clogged. It turned out not to be clogged, but I went down an extremely deep rabbit hole of taking apart an E61, which I've actually never done before. So I'm now really boned up on how espresso machines worked in 1961 and since.

• 1:02:37John Coogan?

  Yeah, yeah. People always talk about like, when you get into coffee, you go, you effectively vertically integrate or go deeper in the supply chain. You start roasting the own beans. You got to grow your own coffee. At a certain point, you have to be smelting the metals that go into the machines, understanding the alloys, coming up with new chemical processes. You have to set up your own mind.

• 1:02:56Max Levchin?

  You're putting all kinds of wrong ideas into my mind. Jack, ooh, not yet.

• 1:03:01John Coogan?

  Yeah, yeah, yeah, yeah. Did, did you smelt the metal that went into the espresso machine?

• 1:03:07Max Levchin?

  I've not smelled anything lately. I'm gonna.

• 1:03:09John Coogan?

  Wow, a novice, a real novice. Anyway, we're not here to.

• 1:03:13Max Levchin?

  Next time I'll tell you about my smelting experiences.

• 1:03:15John Coogan?

  Fantastic. I imagine that the smelting process is as intricate and as, as rewarding as the coffee making process in some ways.

• 1:03:23Jordi Hays?

  Yeah, I expect you to be able to try a coffee and understand.

• 1:03:26John Coogan?

  The alloy of the machine.

• 1:03:30Max Levchin?

  Possibly, but I'm very, very long depth. Anything that you can go very deep into, like this is the time in general, but like depth as a competitive advantage is like a profound strength. So the reason I'm so into whatever things I'm into is I found over the years that if you out depth your competitors, that they just can't beat you. So I'm very pro smelting, I'm very pro going over the deep.

• 1:03:57John Coogan?

  Yeah, yeah, that's interesting. Is there, is there a translation or if you transpose that to sort of like advice for young people who might have anxiety about traditional career paths? I was sort of, you know, we, we, we look at like job numbers all the time and layoffs. And at the same time, I think about when I was a kid, if I said, oh, when you grow up, you will be a live streamer who had an AI lab. It's like none of those words existed back in the nineties and here I am.

• 1:04:25Jordi Hays?

  Yeah, also a lot of, a lot of, there's so much advice out there. It's like, you want to be a generalist. This is the age of being, you know, a strong, you know.

• 1:04:33John Coogan?

  Maybe it's the opposite.

• 1:04:34Jordi Hays?

  And, and when I, when I look at people that are, that are maybe sort of midway through their career, the highest earning, you know, the most respected are almost always the ones with extreme depth, where they can simply out compete anyone else in that role because they know more about it, they put in more hours.

• 1:04:54John Coogan?

  Yeah, but yeah, but what are you thinking for young people?

• 1:04:58Max Levchin?

  I'm, I'm definitely big on depth. I think I'll be, these are like entirely non contrarian opinions, but maybe the contrarian right now, but I think it's a great time to get a computer science degree. I think if you're like ultra deep into really understanding how software is made, you are, like everyone's going to be 10x engineer. If you were 1x engineer yesterday, you better be a 10x engineer tomorrow. That's the new baseline. But if you really, really get it, if you're like, if you're smelting your own code, I'm just going to go with the smelting analogy for a minute. But if you're that good, you're going to be 10,000x engineer and like you will be worth your weight in. Smelted gold, who knows, but it's very, very powerful to be a deep expert. Like you are the one AIs want to learn from.

• 1:05:41Max Levchin?

  And like that, that is, that is the unattainable Mount Olympus of value. And so I, I would strongly suggest that being deep is great. Majoring in computer science is great if you love computer science. Like this is the time to major in whatever it is you see yourself being as deep as possible, because then you will become absolutely invaluable.

• 1:05:59Jordi Hays?

  What about, what about industry specific depth? Like if a founder comes to you and they're like, oh, I've been building, I've been building an e-commerce, but really, and, and I've done quite well, but really I'm interested in space. I want to work on that. You've done.

• 1:06:15Max Levchin?

  You're interested in space and you're not working on it. Like what are you doing? The very best time in history to do that.

• 1:06:20Jordi Hays?

  Yeah. But, but, but generally like you've done quite well by just focusing on something and a category that you know better than maybe there's maybe like three, four other people in the world that understand the intersection of like money and technology the way that you do. And, and I feel like a lot of founders oftentimes will do one thing, feel like they kind of like climb the mountain. And then some, some will just go back and climb a very similar mountain and do quite well. Again, others want to jump ship and do something completely different.

• 1:06:53Max Levchin?

  So I tried both. My last startup in between the other payments startup was not in payments. And it turns out that I'm very good at climbing this one mountain. I'm just going to keep climbing it because, but also the reason I'm good at it is because I love depth and I love getting deep and deep, deeper and deeper into payments, into how to make payments more expedient, more transparent in the case of a firm. And payments are a lot of things and access to credit is a totally new idea. Like I've never touched credit until a firm. And now I, you know, maybe with, without false humility, I think we are definitely one of the very best credit underwriters in the world and are just getting better and better. We just announced yesterday, we built an entire new.

• 1:07:34Max Levchin?

  Model family loosely inspired by the attention mechanism that is powering all of your L M's out there, including your parent company now. Some ideas we borrowed from all these really amazing discoveries and sort of pure, you know, language A I. And yet it feels like we're just getting started. Like every time I look at the sort of corpus of things that we can try to do, things we can build a product, we can launch, like, oh, my God, there's so much to do. Like, there's absolutely no chance I'll get to rest. I'm not sure I'll get to speak after all. It's the greatest time to build stuff because everything is faster and more exciting and easier to start. But the depth reveals itself, the deeper you dig.

• 1:08:17John Coogan?

  Okay, so, yeah, we sort of mentioned, we referred to it a little bit, the 2026 Investor Forum. Who attended? What was the goal of that? Take us through that event. And then I have a whole bunch of follow up questions about how you're communicating the at the current time.

• 1:08:35Max Levchin?

  Yeah, it was amazing. I'm still kind of slightly high on the whole thing. But the thing that was really fascinating, so we did this event three years ago, or similar event three years ago, and it's like a blink of an eye. Like, I remember it was in the same building, so a lot of the same people attended. So these are mostly buy and sell side analysts, a bunch of our shareholders, a couple of our board members actually flew in for it, which was like a nice surprise to me. And the entire management team gets on stage and like, here's what I work on, here's what the company is. But like, the reason analysts are there, they're like, okay, tell us about your vision, Max, yada, yada, yada. Really, what will the next three years worth of growth targets going to look like? And so the main act, I was the warm up act. I tried to be funny. But the main act was our CFO, Rob, who got on stage and said, all right, so we're going

• 1:09:20Max Levchin?

  to grow to $100 billion of G M V. We're just in the range of touching 50. We're going to double. And we're going to do this by compounding at 25% every year. And we're going to move our profitability target from 3% to 4%, which is our current range, to 3.75% up. And so we're going to up the floor. We're going to be more profitable and grow faster. And it's like faster. We're a bigger company now. Like, well, what have we done? Like, wait a second. Last time we did this, three years ago, we said we're going to compound at 20%. But instead, we did it like 30 plus. And so just like this out of body experience, like we're getting bigger. The room was significantly larger. Same building, different floor, different room, many more people, many more shareholders.

• 1:10:03Max Levchin?

  And yet we're telling people like, hey, we're going to compound that much faster than the last time. It's like, I guess it's like a flywheel, this network we've built. It keeps spinning and spinning faster. And so it was amazing in a sense that I knew all these numbers. Like, I obviously improved and worked with the team to make sure we feel great about them. But when you sort of say it out loud, like compare that to the last time we told you the same thing, we're going to accelerate. It's like, wow, that is like so cool. So anyway, so I'm still very high from like being able to say that out loud is very fun.

• 1:10:31John Coogan?

  So there's a flywheel. I imagine with a lot of financial companies, there's economies of scale. And so that seems doable. Are you also talking about TAM at this point because the company is so large? Or is it still early enough that that's not something that investors are coming to you, asking to sort of justify, well, you know, the global economy is only this big. And if you take 50% of it, well, there's nothing else.

• 1:11:00Max Levchin?

  The good news is that $100 billion of payments in this country is but a drop in the bucket.

• 1:11:07John Coogan?

  Okay.

• 1:11:07Max Levchin?

  Even a larger bucket. We're in no danger. The US revolving credit, which is obviously a fraction of total economic rotation, is like a trillion three right now. And 100 billion is like, then this we're taking share. So I like to go there's that number. People are not using revolving credit. They're using a firm, good for them, not revolving, no fees, all that. And so we're not yet at the sort of TAM. By the way, these are all US numbers and we're already live in the UK and Canada. And we've announced a bunch of other countries.

• 1:11:37John Coogan?

  Okay. So speaking of the investors, obviously it's very important to communicate with investors right now, both for your growth plans and also what's going on in the market. As you think back to the March time period, the SaaS apocalypse, every company got sort of beaten up. You came back really quickly. How much of that was show versus tell? How did you think about communicating to investors through that? How important was the investor communication versus just continuing to deliver on the actual metrics? Like, as you're confronted with one of these, like, oh, there's a new narrative. How do you, what's your playbook for actually working with investors to get them comfortable?

• 1:12:19Max Levchin?

  You know, to be completely honest, I don't know. I think the, well, and I'm usually honest, so I might as well tell the truth every time. So this particular time, we said nothing. We said, okay, I guess the sky's falling. Doesn't feel like it's falling on us. We're printing a really, really good quarter. We're about to report it. We could like wave our hands and then like, you got it all wrong. We're fine or just wait a few more weeks and like, hey, here's what we printed. How about that? And by we're going to guide, so we're going to reveal that we're having a pretty good quarter too.

• 1:12:57Max Levchin?

  And so, but that's what we did this time and we just didn't spend too much time communicating how the story isn't true. I don't know if that's like the best response. Like we've definitely in the past, we would read, you know, the, the most recent time when I thought we need to speak was when the rates were rising very quickly. We were screaming into the void of like, no, no, no, this business is fantastic at ZIRP. It is fantastic at 5% Fed funds rate. It is just find a number that's higher than that. We love our value creation opportunities more or less at any rate. Like obviously, you know, it breaks at some point, but US economy breaks at some point too.

• 1:13:40Max Levchin?

  For all possible values of the federal funds rate, we're going to be just fine. And a long explanation why, and I don't think anybody heard it. People like. Yeah, but the rates are up, so you're obviously first.

• 1:13:50John Coogan?

  Yeah.

• 1:13:51Max Levchin?

  And so the dip in the return of our stock is like a great turnaround, but it basically amounts to people saying, wait a second, this thing is in just as much demand, does just as well, grows just as fast, just as profitably through whatever rate cycle.

• 1:14:04John Coogan?

  Yeah, I think we've talked about the history of the effective interest rates on a firm. But we're now in a new regime and the fear is not higher rates, it's higher inflation. And so are you, do you, do you already have an intuitive sense of how a different inflation regime or different inflation environment will affect a firm? Are you confident? How do you think about the relationship?

• 1:14:30Jordi Hays?

  Yeah, I can imagine it's somewhat of a double edged sword and that like, you know, higher prices means people are more likely to want to use credit, but maybe there's a drop in some purchasing activity of some items, you know.

• 1:14:43John Coogan?

  Also, just like if you're getting $10 in two years and it's worth less, that should have an effect. But how is it actually playing out?

• 1:14:51Max Levchin?

  So a little too early to tell, but you were exactly right in a sense that we saw this game play out in the last inflation spike just a few years ago. We absolutely saw an increase in demand because as things became a little bit more expensive, people felt that it would be better if they weren't paying for them upfront. People who initially would say, yeah, it doesn't really make sense for me to finance this thing. I have the cash, but I kind of want my cash to go a little bit longer because I don't exactly which way the price are going to go. So we expect more demand. We have to be, we're always very careful. The number one line I give at every investor event is credit is job number zero. As a computer science major, I count from zero. And it is the most important job. We grow as fast as credit performance will allow us to grow, full stop. We have to print consistent credit returns.

• 1:15:36Max Levchin?

  Otherwise, we lose credibility with our debt investors and that's the most important thing. So we will grow. Fast, no faster than credit results will allow us to. We expect more demand. We don't yet see literally anything related to change in credit performance. We just printed our results and they're just as we expected them.

• 1:15:56John Coogan?

  Yeah.

• 1:15:56Max Levchin?

  And so TBD, whether we see some deterioration of consumer credit due to prices, we really didn't see much of it at all through the last inflation cycle, which was quite dramatic, if you remember.

• 1:16:07John Coogan?

  Yeah.

• 1:16:07Max Levchin?

  And so we feel pretty great about our ability to underwrite kind of all eventualities. We are obviously not blind to the macro reality. The minute before I got on stage and promised people 25% growth with an increased profit margin. So, you know, we must think we're going to be okay. And that is the case, in fact, the case.

• 1:16:25John Coogan?

  Yeah.

• 1:16:25Jordi Hays?

  How is AI changing how you think about international expansion? Does it make teams more efficient in terms of adapting the product for different markets? Everything from language to just simply being able to ship more code? Or is international, is your like international GTM just like much more like, we know what it takes to launch a new market. If AI makes it slightly more efficient, great, but it's not going to change the strategy?

• 1:16:54Max Levchin?

  I think the 1A of every list of things that have really changed thanks to AI is shipping code. Like, I think it's, this is the best time to be a CEO with a computer science degree because like you feel what this means. Like, you know what it's like to make code. You've done it, in my case, for the last 40 years. And I know how much easier it is, how much more effective teams can be, how you can have three people in a room, build a product over the weekend, which is kind of an amazing thing that didn't exist six months ago. And so shipping code is absolutely, we're seeing that in my latest shareholder letter, actually showed an illustration of percentage of code written by AI at a firm. And it's like.

• 1:17:34Max Levchin?

  And it's not like a slow rise. Like, okay, we're trying, we're trying. We're convinced 60% to start, 75% last month. So it's just, you know, rocketing. It's not like people are writing less code or reviewing less code. It's just that much more productive. So that helps us internationally, helps us domestically, helps us with everything. I think other parts of the business are much better with AI. So translation, obviously, services are fantastically effective with AI. You can do a lot of interesting things with legal and anything that's text heavy, you have just, you know, a great helping hand. But the sort of night and day moment is writing code. That's one A through maybe like one P on the list of things that just stunningly effective.

• 1:18:15John Coogan?

  Are you expecting token cost to be like an important line item in the P and L going forward? Like we've seen, because there's so many stories of a lot of code written by AI. Sometimes that moves the needle. Sometimes you're just sort of doing what you needed to do and doing it more efficiently or faster. But at the same time, if you get hit with like a billion dollar token bill in a year, that might be material. And so you start having to do, and it feels like we're at the early innings of ROI calculations. We're more in like the feeling of like, oh, everyone loves this. We're seeing good results.

• 1:18:49Jordi Hays?

  Max doesn't strike me as someone who's just going to tell your team to

• 1:18:53John Coogan?

  Slop it up.

• 1:18:54Jordi Hays?

  Use a lot of AI because obviously there's stories coming out of Amazon and Meta where teams are basically just like, I want to, I want opt, I want the optic to be that I'm using more AI than anyone else on my team. So I'm just going to run things overnight.

• 1:19:09John Coogan?

  Yep.

• 1:19:09Jordi Hays?

  For no reason.

• 1:19:10John Coogan?

  Yeah.

• 1:19:11Max Levchin?

  We are extremely, extremely metrics driven company. Like we, some might take issue with just how completely obsessed we are. We're like, you know, you improve what you can measure. Like if you're going on feels, you're going to, you know, feel great until you don't. So we measure everything obsessively. We have, at the moment at least, fantastic ROI on our token spend. We are. I would say it's real numbers, so it's not like, oh, you know, don't care, don't look. We have a weekly report that's generated thanks to AI and some very smart humans who are monitoring our token use and tell us how each team is producing value and what it's costing us in tokens and all this sort of various conclusions downstream.

• 1:19:54Max Levchin?

  So we are already very mindful of what it means in terms of return on investment on two tokens, return to shareholders at the limit. Right now, it's like undoubtedly a very, very accretive thing, but we're also not assuming that, you know, like infinite budgets are just great. And we also expect, by the way, prices of tokens will probably increase over time. Like, I think there's plenty of subsidies taking place. You're now inside of one of those places, so you probably know the true price.

• 1:20:22John Coogan?

  If we can circle back to specialization from AI creating effectively more generalists, I'm interested in sort of computer science history, your career history. How have you processed like the, there was a point where front end and back end engineering were two very separate disciplines. At the point where you could do JavaScript on the front end and in the back end, you see more full stack engineers. Now you have engineers that are designers, designers that are engineers, designers that might be pushing server code and stuff. So I'm wondering how you're thinking about maintaining that idea of you want the specialized

• 1:21:06John Coogan?

  genius, the artisan, the true expert in your organization versus you also want to empower someone to move really fast with a small team. And so you might not need to staff 100 experts to do one thing and that there's got to be a tension there. So I'm wondering how you're grappling with that.

• 1:21:23Max Levchin?

  It's a great, great question, and you're totally right. So.

• 1:21:29Max Levchin?

  There are definitely pockets of today's software engineering that accrete profoundly to specialists. So if you are an extraordinary infrastructure engineer, you're far from being replaced by some mindless drone because it's as much art as it is science, intuition, experience. Like, I've seen this kind of a failure before. And AI is good at it, but AI is a great tool. Like, you're in no danger of being supplanted just because it, so much depth goes into that. And by the way, AI making a slight mistake could cost you a massive outage in the case of... And so the cost of error is very high. Like, an even better example, actually, in my world, would be an underwriting model. So somebody who designs

• 1:22:13Max Levchin?

  underwriting models, it's like, "Hey, AI, go build me a great underwriting model. Come back when you're done. Like, here it is, a hallucinating one for you." Like, that's like, real money lost that we will never see again if it, in fact, didn't hallucinate the right thing. And so, many of these sort of ultra-specialist roles, they are absolutely benefiting from AI, but that human is not just in control, they're not just steering, they're like reviewing every line of code. They have another human making sure that there's absolutely nothing that could go wrong. So, that's sort of one thing. On the completely other spectrum of this, which is, I think, what you're alluding to, to, you know, fun examples, we just had a product hackathon. So, only product managers can attend. A lot of our product managers have CS degrees, so we're cheating here a little

• 1:22:54Max Levchin?

  bit. But, but these people are like, "Hey, I love writing code, but I want to make it into things as opposed to code. And like, I want to ship a full product." So, most of those folks haven't written code professionally in quite some time, maybe since college. They're like, really good with Figma, they know how to design things, they have a sense for taste, but they like, they don't remember anymore what it's like to sort of go deep into some, you know, SQL query debugging. We had 100 people, 37 projects in 27 hours went from a whiteboard plan to a shippable feature that was presented to the entire company. Like, "Hey, we have this thing, it's..." And we graded it, not just on... So, the winners and the whole grading of who won first through whatever, 10th.

• 1:23:37Max Levchin?

  We're all people that have to report not just like, here's my idea, here's what it looks like, here's my prototype. How close are we to shipping it? Like, are you ready? And the winner was absolutely probably the best idea, but also the ones that said, we're ready. Like, if we're allowed to ship it tomorrow, we will. So that is like an extreme generalist who like has a vision and a few tokens and a feature in 27 hours with like two of their co-conspirators and like a pizza box. So that is new and different, and it's totally a new phenomenon.

• 1:24:05John Coogan?

  This AI thing is gonna be terrible for the pizza industry because famously two pizza team, you only need one pizza teams now.

• 1:24:12Max Levchin?

  50% reduction.

• 1:24:14John Coogan?

  50% reduction. Short dominoes. This is a disaster. I hadn't thought about this.

• 1:24:19Max Levchin?

  We, uh, we sprung for a somewhat higher quality.

• 1:24:23John Coogan?

  Oh, yes. Okay. So revenue is flat, margins potentially going up in the pizza industry. Okay.

• 1:24:29Jordi Hays?

  Last question. How are you, how are you, uh, what's your framework for evaluating the, the, all the different AI products being pitched to you across the rest of the organization? You have the benefit of being a technical, you know, CEO, uh, a lot of other CEOs in your role are just like, I just want to buy AI everywhere. Just give me every part of my company. Just give me, give me, give me three pilots. I'll pilot anything. Um, whereas I think you're probably looking at some of this more non, you know, non deterministic work saying like, hey, um, you know, you can play around with it, but maybe you don't have budget.

• 1:25:06Max Levchin?

  So I have a great heuristic. This, this will be potentially worth, worth the rest of my drill.

• 1:25:13Max Levchin?

  If you know how to describe the evaluation criteria being used by the maker of the tool you're buying, it's probably worth piloting. If you can't, it is slop and you're being sold a story. So if, so we know code gen works and is amazing, and it's only getting more amazing because we know how to validate code. And you can use another AI to validate code, but you can also just like, look, it doesn't work, doesn't pass the unit test. So the feedback loop of I gave you a thing, like Codex was okay, and then it was better, and then it was great, and now it's really pretty damn good. It's not because someone was coding faster. It's because it has really objective eval criteria, and it just loops on making itself better with some degree of human influence. The same can be said for a bunch of industries. It cannot be said for others.

• 1:25:59Max Levchin?

  I'm not going to dig into examples too quickly, given we're short on time. But if you can say, oh yeah, I know exactly what these guys are doing. Customer service centers. Is the consumer happy after they hung up the phone with an agent? Can we ask them?

• 1:26:12Jordi Hays?

  What is their satisfaction rate?

• 1:26:14Max Levchin?

  Is there a way to say that was good? That was bad. AI do more of the good kind.

• 1:26:18John Coogan?

  Yeah.

• 1:26:19Max Levchin?

  Fast feedback loop, high quality eval criteria.

• 1:26:22John Coogan?

  Yeah.

• 1:26:22Max Levchin?

  It's a great, so we use a ton of adjunct customer service because we know it'll just get better and better and better.

• 1:26:27John Coogan?

  Yeah.

• 1:26:28Max Levchin?

  That's a great thing to buy. We're not a specialist. We are excited to buy it from a specialist. Somebody tells you, oh, it's AI. It's going to be a tool. It's going to make you a better writer of fiction.

• 1:26:38Jordi Hays?

  Yeah. Yeah, or even pitch decks. Pitch decks are an example because like you could have the worst formatted pitch deck and having tremendous success with it. But it didn't have anything to do with the deck. It had to do with your delivery and who you are.

• 1:26:51Max Levchin?

  So I would not, would not buy the pitch deck AI assistant, even if somebody paid me to do it. Because 95% of the talk track.

• 1:27:03Jordi Hays?

  And the company.

• 1:27:03Max Levchin?

  So far, and the company and the idea and the market and the TAM and all those things. And so, but most importantly, 100 companies pitch their decks good old and made by AI. Seven out of 100 get funded. 93% failure rate. Sucks. Should never raise money. Like, is that the conclusion? So I would, I would stay away from the non-objective or very slow feedback loop systems before I consider buying tools there.

• 1:27:28John Coogan?

  I love it. Well, thank you so much for taking the time to come chat with us.

• 1:27:30Jordi Hays?

  Great to catch up.

• 1:27:31John Coogan?

  Have a great rest of the week.

• 1:27:32Jordi Hays?

  On the progress.

• 1:27:33Max Levchin?

  I'll come.

• 1:27:33Jordi Hays?

  And the guide.

• 1:27:34Max Levchin?

  Thank you, and I'll come back with smelting news.

• 1:27:35John Coogan?

  We'll talk to you soon. Have a good, goodbye. We have Delian Asperhoff from Founders Fund in Varda joining in just a few minutes. While we wait for him to get here, he's coming in person. We will talk about Joe Lo, who I thought was a household name, but apparently is not. He is the fugitive behind the one M D B scandal. It reads like I M D B. It's not one M D B. It was a Malaysian financial fraud that.

• 1:28:07John Coogan?

  Led to the disappearance of four and a half billion dollars. And he's in the news today because he asked Donald Trump for a pardon while on the run, I believe. So Joe Low, the alleged mastermind of one of the greatest financial frauds in history, you got to read this book. The, the camera's following you around.

• 1:28:30Jordi Hays?

  That's the new, that's the new meta.

• 1:28:32John Coogan?

  New meta. Go on the run until you can get the pardon.

• 1:28:34Jordi Hays?

  You're on the run. And you're just, just popping up to say, I'd like a pardon.

• 1:28:40John Coogan?

  Yeah, yeah, yeah, yeah. So, uh, yeah, you got to read this book Billion Dollar Whale. Fantastic book. I thought it was going to be turned into a movie at some point. It should be. It's, it's a fascinating story, but we'll just give you the high level and we'll do a whole deep dive later. Uh, Joe Low, the alleged mastermind.

• 1:28:56Jordi Hays?

  I think we should, we should take matters into our own hands.

• 1:28:58John Coogan?

  Make the movie.

• 1:28:59Jordi Hays?

  Into a play.

• 1:28:59John Coogan?

  A play. Okay. A stage play. I like a stage play.

• 1:29:02Jordi Hays?

  We haven't, we haven't done a play yet on set.

• 1:29:05John Coogan?

  No, no, not yet. Although, a lot of the, a lot of the red string, uh, poster board sessions, they feel like plays. They, they're very well acted.

• 1:29:13Jordi Hays?

  But I'm talking, even if we're reading off.

• 1:29:15John Coogan?

  Yeah, yeah. We don't have lines for this.

• 1:29:16Jordi Hays?

  Joe, Joe Lai.

• 1:29:18John Coogan?

  One pardon, please.

• 1:29:19Jordi Hays?

  Walked into the room billionairely.

• 1:29:22John Coogan?

  Yeah. So Joe Low, the alleged mastermind, alleged mastermind of one of the greatest financial frauds in history is asking President Trump for a pardon. The request was filed in recent weeks, according to people familiar with the matter, and if granted, would remove U.S. criminal charges against the fugitive Malaysian financier. A Justice Department website lists a pending request for pardon for completion of sentence under Joe Low. The move represents the latest gambit in the extraordinary saga of Low, a once little-known businessman who prosecutors, prosecutors say used subterfuge, fake documents and payoffs to engineer the heist of billions of dollars from one M D B, which was a Malaysian government-owned

• 1:30:04John Coogan?

  investment vehicle set up to promote economic growth. He's known for his lavish lifestyle, partying, partying with Hollywood stars and political rulers. He was involved in, there were a bunch of other people that went to jail for this. But he financed The Wolf of Wall Street in potentially the most ironic thing you could do as a fraud, finance a movie about a fraud.

• 1:30:26Jordi Hays?

  So it's illegal to make them awesome movies now?

• 1:30:28John Coogan?

  I guess. It is a great movie and you can tell that the budget was really flying with that one because they they crashed a Lamborghini Countach, which is maybe a $500,000 car. And they just, I think they just destroyed it and they destroyed maybe the actual, I don't know, that might be not real, but very fun movie. Anyway, we have Delian Espru from Varda and Founders Fund in the TVP in Ultra Dome.

• 1:30:49Jordi Hays?

  There you go. Here you go.

• 1:30:50John Coogan?

  There we go. Oh, he's doing a victory lap.

• 1:30:57Jordi Hays?

  Victory lap.

• 1:30:58John Coogan?

  Running around the table. For anyone who's been living under a data center, introduce yourself.

• 1:31:06Delian Asparouhov?

  Hi, my name's Delian, co-founder and president of Varda. Have a couple other side gigs, but that's the main gig.

• 1:31:11John Coogan?

  Let's focus on Varda today.

• 1:31:13Delian Asparouhov?

  Oh, yeah.

• 1:31:13John Coogan?

  We're talking space data centers, right?

• 1:31:15Delian Asparouhov?

  No, we do have some chips up there, so in theory you could do, but we do more valuable things than just some inference. We make some drugs up there.

• 1:31:23John Coogan?

  And there's a big announcement today.

• 1:31:24Delian Asparouhov?

  Yeah. So for the first time in human history, there is a large publicly traded company, United Therapeutics, $25 billion in market cap, traded on the NASDAQ. They're using their own balance sheet to go produce a product, physical product in low earth orbit.

• 1:31:38John Coogan?

  Wow.

• 1:31:39Delian Asparouhov?

  With us.

• 1:31:40John Coogan?

  Yeah.

• 1:31:41Delian Asparouhov?

  Pharmaceuticals, they focus on pulmonary disease, I think, you know, lung, blood, etc.

• 1:31:44John Coogan?

  Yeah.

• 1:31:45Delian Asparouhov?

  We're working on those products together.

• 1:31:46John Coogan?

  Yep.

• 1:31:47Delian Asparouhov?

  Crystallizing them into a better formulation, bringing them back down. That's the only company that makes physical products in space. Everybody else, it's all radio waves. It's internet, it's inference, it's, you know, you know, photos of the earth, etc. This is literally the first time in human history where there is physical products being moved in space as a way to generate revenue there.

• 1:32:03John Coogan?

  For real business.

• 1:32:04Jordi Hays?

  Is that that's happening or is about to be happening?

• 1:32:08Delian Asparouhov?

  Yeah, so we signed this deal, you know, call it like, you know.

• 1:32:11Jordi Hays?

  I'll stop you right there because there's an opportunity for someone else to put.

• 1:32:14John Coogan?

  Oh, it's a race.

• 1:32:16Jordi Hays?

  In a balloon. We should, we should race, we should race a bit.

• 1:32:18John Coogan?

  No, no, wait, wait. Balloons can't go to space.

• 1:32:20Delian Asparouhov?

  Balloons can't go to space. You gotta go, you gotta go on the rocket.

• 1:32:23Jordi Hays?

  A balloon and then, once you're up there.

• 1:32:25Delian Asparouhov?

  Hmm.

• 1:32:26Jordi Hays?

  Jet pack type thing to.

• 1:32:27Delian Asparouhov?

  Yeah, people have talked about the like, you know, could you go float a rocket up there? But it turns out the like, size of balloon and complexity that you're just better off building a rocket to get the rocket up there.

• 1:32:35Jordi Hays?

  Tyler could build a rocket.

• 1:32:36John Coogan?

  Yeah, I talked about this coming space ride. They would, they would take the balloon up and.

• 1:32:39Delian Asparouhov?

  Yeah.

• 1:32:40John Coogan?

  And this was actually used back in like the 30s, I think.

• 1:32:43Delian Asparouhov?

  I think they did some like very early tests when rockets were small. Yeah, and other rockets are big and like satellites are big, a little, little harder to get up there. Uh, but yeah, we signed the deal a little while ago. We've been working on the products with them for a period of time. In order to get ready to go to space, we do do some work on the ground.

• 1:32:58John Coogan?

  Yeah.

• 1:32:58Delian Asparouhov?

  To understand, hey, what is the thing that we're going to go do in space? And let's make sure we figure out all the other process parameters. When you're like crystallizing a drug, there's a particular temperature, a mixing rate, a solvent. We just bring one extra knob, the gravity knob.

• 1:33:10John Coogan?

  Yeah.

• 1:33:10Delian Asparouhov?

  Now, here on Earth, we can't decrease gravity, but we can increase it. And so alongside the customer, we look at basically adjusting that gravity knob down here on Earth.

• 1:33:18John Coogan?

  Yeah.

• 1:33:18Delian Asparouhov?

  Figure out kind of how to tune all the other things. So we're tuning the right knob. Once we get that all set, load that up into a spacecraft, send it up to space. Obviously there, the gravity knob goes to zero, get a different result. Landed in Australia and then send it off to the clinic. Yeah, we're still working with United on the ground so far, getting those drugs ready for flight. But we'd expect basically or next year to fly the first United drug.

• 1:33:37Jordi Hays?

  And how are they making this drug on Earth today?

• 1:33:41Delian Asparouhov?

  Um, today you're using traditional techniques. So there's a whole set of companies.

• 1:33:45Jordi Hays?

  Much less efficient.

• 1:33:46Delian Asparouhov?

  Uh, you're just getting a different result. So as an example, you know, uh, the, you know, sort of use case or paper that the company was in some ways predicated on. Obviously, there's been 40 to 50 years of work on protein crystallization up on the International Space Station, Skylab, Space Shuttle. Uh, but in 2019, Merck basically showed their blockbuster cancer drug, KEYTRUDA. They crystallized it up in space. They showed they could shift the administration from what was previously an IV drip, um, to now a subcutaneous syringe. So you don't have to go to an IV clinic, a rural patient that can't access IV clinics, um, can now access this drug. Um, and so that's what we're doing up there with United Therapeutics is we're looking for. Basically changes in performance of the drug because of those different results that allows them to shift administration. United Therapeutics is famous for a variety of different things. So the company was originally started by Martine Rothblatt

• 1:34:29Delian Asparouhov?

  to solve a rare pulmonary disorder for her daughter. Built that up into a huge platform. They've really leaned into the frontier over the course of the last years, or 20, 30 years. Including they like, you know, make gene modifications for pigs to create human organs inside of pigs. But one of the things that they're known for is for one of their pulmonary compounds, they shifted the administration from a nice pig sound. Well done. Well done. I like it. You know, a lot better than waiting on like a, you know, whatever 24 year old kid to die on a motorcycle. Your kidney instead, just get from a pig farm. But one of the other things that they're known for is they actually shifted one of their, you know, sort of primary drugs from an oral pill to instead an inhalable and made it much more efficacious, easier for the patient because you have to take the drug less often. It's things like that that we're looking to sort of do with them.

• 1:35:12John Coogan?

  Dumb question. You have the gravity knob. You're able to turn that off, but aren't you adding a knob for like vibrations and basically dialing it to 10? Like, does that ever affect? Because you imagine you're sort of centrifuging it like it's gyrating as it's re-entering. So is that a problem? Do you have to, is that like for the selection criteria? Do you have mitigation strategies?

• 1:35:31Delian Asparouhov?

  What you can think of is like, in a pharmaceutical process where you're crystallizing something, you're basically going through like a phase change. You're going through from like a liquid to a solid. Where things matter is when that phase change is happening. In that particular moment is where you don't want the sedimentation, convection, et cetera. So we do in some ways, we like load up all the liquids ahead of time. Those liquids for sure on the rocket lighter up, get shaken, et cetera, but it doesn't matter because the liquid's still saying a liquid. Then up in space, what we do is we go through that phase change. We go from basically like a liquid to a solid. That needs to happen in a very pure environment. We shut down all the reaction wheels. We make sure that like everything on the spacecraft that would vibrate is totally silent, that it is as pure of microgravity basically as possible. It then becomes a solid and at the end of it, it kind of looks like a salt, basically. Like, think of it like table salt.

• 1:36:16Delian Asparouhov?

  Now on the way back, that table salt for sure is shaking a bunch. But the table salt, if you think about like a, you know, some, you know, table salt that we put and we go put it in like a centrifuge for a hundred years at a, you know, a thousand Gs. It's still going to be table salt.

• 1:36:27Jordi Hays?

  Sure.

• 1:36:28Delian Asparouhov?

  Where are those like vibrations that matter?

• 1:36:30Jordi Hays?

  Heat more.

• 1:36:31Delian Asparouhov?

  You do need to manage heat. If you melt the salt, you're fucked because it's a fatso liquid. But you know, this is what convinced United that we would be capable as a partner is we actually had data sets from our very first mission where the surface of the heat shield was hotter than the temperature of the surface of the sun. So like extremely hot. Onboard, I think it was like something like 14 degrees centigrade, plus or minus 0.1 degrees.

• 1:36:51Jordi Hays?

  Wow.

• 1:36:51Delian Asparouhov?

  And so we had extremely precise temperature control onboard. And so a lot of what has brought, you know, people to the table for this, you know, sort of first commercial deal is while there's been this historical work on the ISS, nobody had showed how do you go do this on a purely private platform, fully autonomous, low cost, high cadence. And a part of what convinced them was yes, both the regular flights we've been doing, right? We are now on W sort of six, seven, eight, nine will be, you know, sort of launching later this year. But it was also, hey, not only are they launching and landing these things, but onboard, they've got the right process control. So I can see, hey, they can go work on my drug. And by next year, when we fly seven times in a year, that's going to be higher cadence than everything that the like ISS, space shuttle, et cetera have done in all of human history. Let alone in 2028, 2029, as we continue to go higher and higher cadence.

• 1:37:33Jordi Hays?

  So how many things need to go right in a row to have a successful mission? I imagine that, you know, there's like all these different.

• 1:37:40Delian Asparouhov?

  Like just the space mission or like get the drug into the clinic? Cause the drug in the clinic is more complex?

• 1:37:45Jordi Hays?

  Just the space mission.

• 1:37:46Delian Asparouhov?

  The space mission, at this point, we've like kind of shown we can do pretty safely, but I'll walk you through it. First on the ground, we got to go build, basically effectively think of it as like a two-part spacecraft. One is sort of looks like a traditional satellite system. It's a little bit lower power and under, you know, spec relative to most satellites because we don't need super high power to communicate with, you know, internet terminals, radio waves of photos, et cetera.

• 1:38:07Jordi Hays?

  Oh, that makes sense, yeah.

• 1:38:07Delian Asparouhov?

  The only power we need is just to run the bioreactor and the bioreactor doesn't consume that much power. So think of it as like a.

• 1:38:12Jordi Hays?

  Like basic telemetry.

• 1:38:13Delian Asparouhov?

  Yeah, basic telemetry, but we don't need like super high pointing accuracy while it's just floating up there. Cause again, we're not pointing at a particular place on the ground to basically try and like take a photo of it. And so think of it as like we build an under spec sort of satellite. Now the one thing that it is. Big on is like it's got a lot of thrust and propulsion on board because we need to come back unlike every other satellite. But otherwise under spec satellite. So we do those on the ground. We've now built a handful of those. Then we have to build the second part of the spacecraft, which is the reentry pod. All this does have a relatively complex supply chain. Think like the solar panels, the GPS chip, the flight computer. That type of stuff we buy out of house. Some things you have to do in house. You can't buy a capsule like off the shelf. So we have to build the heat shield, the structure, et cetera around that.

• 1:38:53Delian Asparouhov?

  Those have to get integrated. We have to do a bunch of ground tests to make sure that works. Then you ship it off to SpaceX's facility a couple of months before launch. Make sure that everything's still working over there. Install it onto the rocket. Once we're on the rocket, we kind of look like any other satellite that goes up there, whether it's like asteroid mining satellites or comms satellites or spy satellites. SpaceX takes us up to orbit. They then drop us off. Again, like any other satellite. We spend between call it like four to 12 weeks up there. Kind of depends on the drug manufacturing process. Some go pretty quick. Some take quite a bit of time. While we're up there, we have basically pharmaceutical scientists on the ground in mission control. So you remember those like Apollo films in mission control? We literally have like, think like Amgen scientists, but like they're in mission control.

• 1:39:33Jordi Hays?

  I can imagine you love hanging out in there.

• 1:39:36Delian Asparouhov?

  Bree always makes fun of me. He's like, you know, I don't quite know the American idiom or don't get it, but hopefully you guys will. But he's like, he calls me like the gentleman's mission control. Where like there's like the gentleman's farmer. It's like the guy that stands around the farm, but it's like. I'm like the gentleman's mission control. We're like, yeah, I like hanging out there. Obviously I like, I'm completely useless and mostly a distraction. So I tried mostly just listening to the live stream now.

• 1:39:58Jordi Hays?

  Every team needs a class clown.

• 1:39:59Delian Asparouhov?

  Yeah, exactly.

• 1:40:00John Coogan?

  Can you unpack a little bit more about the orbit? There's a piece in the Journal today, "Space Day, Centers Face A Lot Of Challenges." They all got to go to sun synchronous orbit. I imagine you don't, but I want to know about the knock on effects of like, what can you tell me about sun synchronous orbit? What orbit do you use and why? And then how might this change what happens in the future?

• 1:40:19Delian Asparouhov?

  Yeah, part of what's beneficial at sun synchronous orbit is you're basically like always like facing towards the sun and have sunshine. We are not as dependent on that. As I mentioned earlier, we're not super power constrained. And so we can just charge up, you know, basically our batteries onboard. And while we're on the dark side of the earth, we can basically just drain those batteries, recharge them basically on like the next orbit. We're up there just for the microgravity. And so we can be in almost any orbit. That gives us a ton of benefits. One, when you're in space, you don't have to worry as much about traffic. We just go where other people aren't. But two, it actually helps a ton with launch. You know, as an example, later this year, for the first time, we'll be actually launching, historically, we've only launched a sun synchronous orbit because that's where all the transporter missions, which are the SpaceX Rideshare missions.

• 1:40:59John Coogan?

  That's what I was gonna ask.

• 1:41:00Delian Asparouhov?

  They now have what are called bandwagon missions, which go up to, they're also rideshare, but they go to polar orbit. We'll actually be flying our first bandwagon mission later this year. So now we have launch flexibility. There's a bunch of companies that can't go on bandwagon or basically, we're actually probably one of the only companies that can go on both.

• 1:41:16John Coogan?

  Either. Yeah, that's what I was gonna ask. Because what happens if everything winds up being sun synchronous orbit? Because I think there's 10,000 or so Starlink satellites, Elon's asking for a million for space data centers. That means like 90% of the launches are going to be sun synchronous, but that's okay for you.

• 1:41:33Delian Asparouhov?

  Yeah, we're okay going to sun synchronous. We can quickly get out of the orbit if we can need to, or try and go, you know, sort of slightly off of it. Or we can just go to polar and be totally, you know, sort of happy there. And that gives us some benefits on the like launch economics side of things where now we're basically able to go on any rocket.

• 1:41:47Jordi Hays?

  Yeah, so I was gonna ask. It seems like every hyperscaler, some startups are, you know, and some of the labs are thinking about space. Are you expecting like launch to, could, you know, theoretically?

• 1:42:02John Coogan?

  Increase because of demand.

• 1:42:03Jordi Hays?

  Launch could be like bottleneck, launch price thing.

• 1:42:05John Coogan?

  It's been falling for so long, but yeah, what do you expect?

• 1:42:07Jordi Hays?

  Yeah, how are you planning? Because you have to buy capacity, launch capacity years out.

• 1:42:11Delian Asparouhov?

  Yeah, to date, launch prices have only gone up, so they have not gone down since we started the company. Launch costs for SpaceX, I'm sure have, but there has not yet been pricing competition. So why would they necessarily pass on those savings to us? You know, and they haven't, I think, seen that much price elasticity in the market. When they've like lowered prices, it's not like they've seen like 10x greater demand. And so for them, it's like capture as many margin dollars basically as possible. Yeah. I do think what we're going to start to see is more competition in the launch market over the course of the next five years rather than the prior five, right? Blue Origin, I think it was today or yesterday, announced they're, you know, going to be doing their first external, you know, sort of fundraising, which speaks to, you know, I think them taking themselves much more seriously as a company that is going to like regularly show shareholder, you know, you know, value and launch very regularly. You've got Rocket Lab now, it's like a, I think, $65 billion company. Yeah, wow.

• 1:42:57Delian Asparouhov?

  Definitely have enough resources to go tackle Neutron, and they've got shareholder expectations for them to get that medium lift, you know, sort of rocket up. You've got Stoke Space, and so there's a few others basically playing in it. We are booking out, you know, sort of rocket launches now all the way through 2029. So we do have the capacity that we need for the next, you know, sort of many years. And I think by the time we're getting into booking late 2029 flights, yeah, there's a world where there start to be, you know, basically more providers online. SpaceX at least, basically to date, has been like, you know, for us at least, as many times as we've wanted to launch, that capacity has been available. Like, they are not capacity constrained, they are still more demand constrained. I do think that, you know...

• 1:43:32Jordi Hays?

  Yeah, because no one's making anything in space.

• 1:43:34Delian Asparouhov?

  Totally, nobody's making anything.

• 1:43:35John Coogan?

  And that's why they were able to be so successful with Starlink, was because they had the residual capability, right?

• 1:43:40Jordi Hays?

  It's so, it's, it's, it's like a tealism, right? It's like we created space, we created the space economy and then it's just more internet.

• 1:43:47Delian Asparouhov?

  Yeah.

• 1:43:48Jordi Hays?

  More apps. And now it's just gonna be more, more AI. How are you thinking about other drug categories? I can imagine space reta would be a pretty hot drug if people would smoke space reta.

• 1:44:03Delian Asparouhov?

  One thing that I didn't realize is, so Ozempic today, one kilo of Ozempic retails for a million dollars. What people don't realize, when people ask me, like, oh, space drugs, economics, etc., does this stuff work? I have to tell them, like, yeah, for you, like, you know, it might be like a thousand bucks, you know, basically per shot. But like, it's because there's very, very little Ozempic basically on board.

• 1:44:21John Coogan?

  A lot of them are like powders that then get diluted and then injected. And so like, yeah, the actual core ingredient is so tiny.

• 1:44:28Delian Asparouhov?

  Exactly. And what we do up there is we just make the powder.

• 1:44:30John Coogan?

  Yeah, exactly.

• 1:44:31Delian Asparouhov?

  United has, United Therapeutics, you know, are a partner that we're announcing today. They have a ton of expertise in all things like, you know, rare pulmonary, you know, certain disorders. They're for sure going to be the person that we work with on that indication, you know, sort of area. But microgravity has a wide set of pharmaceutical applications, neurological, immunology, oncology, etc. And so for sure, we'll start to, you know, I think in the success case of Savarda, it's not going to be like, we have like 50 different partners. It's probably going to be like five to seven that we go really deep with. We kind of choose sort of one partner per, you know, sort of indication area. Then we go as deep as possible. You know, ophthalmology is another area that we're looking, you know, sort of deeply at. You know, partially because like the eye, smallest organ, again, smallest amount of powder that you need. Also an area where some of the other changes of administration technologies don't really work as well. And so, yeah, we're starting to explore who are the partners for the other indication areas.

• 1:45:15John Coogan?

  What about beyond bio? I remember ZBland being something that people were talking about potentially being able to manufacture microgravity. Wildly different economic trade off there, but are there other, when you imagine like the industrial city in Leo, like, are there other categories that extend maybe 10 years out, 20 years out, where it might be logical?

• 1:45:37Delian Asparouhov?

  Yeah, I think like if we look at the next decade, you know, call it, if there's 200 products that are manufactured in orbit, I think 195 of those are going to be pharmaceuticals. So vast majority is going to be, you know, sort of there. And that's where our core focus area is. If I had to, you know, sort of peer into the crystal ball and look at what comes next. I do actually think probably fiber before semis is probably, you know, sort of my rough guess. Yeah, when we were looking at that like high end, you know, sort of ZBland, you know, sort of fiber market back in 2021, when we started the company, there was clearly some level of like, you know, sort of interest and capabilities there, but just like relative to what we were seeing on hypersonics or pharma, not as large. Interestingly, that market has matured a lot. There's sort of two. Sort of call three areas where it has applications.

• 1:46:15Delian Asparouhov?

  One is it is the lowest, basically, you know, think of it as like interference inside the optical fiber for infrared. Near infrared is now used in a lot of the high-energy weapon systems.

• 1:46:28John Coogan?

  Oh.

• 1:46:28Delian Asparouhov?

  If you think about having to pump that laser through a fiber, you basically want as little basically resistance as possible. There's just like a lot more being spent on those types of near-infrared weapon systems, especially with some of the like the anti-drone stuff that's sort of coming down the pipe. So that's sort of expanded. It's also used now a lot more in like metal cutting and like organ, like eye surgery relative to where it was sort of five years ago. So that's expanded. The other area is quantum communications. So quantum entangled photons are much more sensitive to those types of impurities in fiber. Quantum comms has also grown a lot over the last five years. And then the other area is oddly data centers.

• 1:47:01John Coogan?

  I was gonna say, as soon as there's a data center story, there's gonna be 25 companies that are funding IPOs and stuff.

• 1:47:07Delian Asparouhov?

  So ground data centers, not space ones, but they are actually.

• 1:47:10John Coogan?

  No, no, no, no, no. You make the ZB land there, you bring it back and then you.

• 1:47:14Delian Asparouhov?

  Dude, ZB land is now being used in terrestrial data centers. That was not a use case at all five years ago. So anyways, all these things.

• 1:47:20John Coogan?

  Photonics and optical.

• 1:47:21Delian Asparouhov?

  Yeah, they're still like early, I would say. But and like, you know, what's happening though is also like the VARD economics keep improving on a flight by flight basis. The ZB land market keeps growing.

• 1:47:30John Coogan?

  Yep.

• 1:47:30Delian Asparouhov?

  We're like, for the first time, I would say we're like dedicating resources or anything, but like around the office for the first time in five years, somebody was like, the ZB land stuff is like almost starting to explode again. It's probably like four years till we like, you know, sort of do anything, but like you're starting to see those lines start to get closer together. But that's what I love about a platform like ours is like, if you had told me like predict where your revenues would be five years ago really hard, even this year, like things that are landing are probably not what I would have underwritten a year ago. Like I think pharma has like way exceeded expectations. Like it's pulled in probably like three and a half years relative to like, you know, our series C that we announced last year. Our financial projections on that on pharma were just like totally, you know, sort of wrong. And so I'm excited by the idea that like, yeah, there might be other areas that are wrong. Semis, I think is just gonna be like, you know, the furthest out, partially just like the process of equipment and the sensitivities. Like if you think about a bioreactor,

• 1:48:15Delian Asparouhov?

  it's like hard, but it's kind of like mixing like liquids together. The hard thing is like which liquids, that's what's hard. The mixing of it, not so hard.

• 1:48:21John Coogan?

  But you're making those decisions.

• 1:48:22Delian Asparouhov?

  Down here on the ground.

• 1:48:23John Coogan?

  Yeah.

• 1:48:24Delian Asparouhov?

  Fiber, same thing. It's like, you know, it's like, once you like make that like precursor like rod, then drawing it is not like a crazy complex process. It's making that rod that's hard, but again, you're doing that on the ground.

• 1:48:33John Coogan?

  Yep.

• 1:48:33Delian Asparouhov?

  With semis, it's like, oh, my God, that process equipment is like so, so sensitive, right? If you look at like the like, you know, stuff that they use for EUV, basically like, you know, lithography, the mirrors for that.

• 1:48:42John Coogan?

  Yes.

• 1:48:43Delian Asparouhov?

  If you were to lay out a lithography mirror over the course of the size of Germany, the amount of variation you see in terms of like mountains would still be less than 0.1 millimeters. And so this stuff just has to be like so, so, so, so, so, so, so precise that it's just like-

• 1:48:58Jordi Hays?

  And the cost is so high.

• 1:48:59Delian Asparouhov?

  Yeah.

• 1:49:00Jordi Hays?

  Even during the experimentation process, you could-

• 1:49:02John Coogan?

  Yeah, the famous quote from TSMC is that if there's an earthquake, they don't have like a pager duty. Like, they don't slack everyone, "Hey, you gotta come in, there was an earthquake." Everyone knows, "If there's an earthquake, just go to the factory."

• 1:49:12Delian Asparouhov?

  Exactly, exactly.

• 1:49:13John Coogan?

  And the employees just know, because it's just so, so important.

• 1:49:16Delian Asparouhov?

  And so just that like microgravity process equipment is just so much more complex. It's, I mean, so it'll get there one day, but like bioreactors, the fiber draw things are like orders and orders of magnitude simpler to make like microgravity bioreactors, microgravity fiber draw towers.

• 1:49:28John Coogan?

  Yeah, yeah, yeah.

• 1:49:29Jordi Hays?

  Uh, will it ever make sense to have a permanent like ISS style structure that you are transporting supplies to and then sending, you know, sort of finished product down? Because like, knowing you-

• 1:49:43John Coogan?

  Warehouse.

• 1:49:44Jordi Hays?

  You would like to have a proper like dedicated space factory, but does it actually make sense?

• 1:49:49Delian Asparouhov?

  It's always been the somewhat secret, somewhat not secret, like ambition of artists to go build that, but go do it step by step, right? So when you look at like generation one of basically what we're building, it's this two-part spacecraft, right? Satellite, pod. Satellite has all the process equipment, et cetera. Pod just has the finished good. When we're done, pod survives. All that process equipment, everything onboard, we basically just burned it up. Generation two, that'll be flying in like call 2029. Think of it as just like, we make it so that that heat shield material just envelops everything. And so now the satellite plus the pod, they both survive. And that'll probably look like a little mini space plane is kind of how you can think about it. So space plane has the solar panels, the propulsion, it's got the process equipment. It's also got the finished good. That goes up and down. And so now that full system is reusable, improves the economics, will have more payload on board, too.

• 1:50:34Delian Asparouhov?

  Now, at some point, like, it doesn't make economic sense to keep moving that process equipment up, down, up, down every time. Caught by the end of the decade, the goal will be, we'll start to invest into those like fixed pieces of infrastructure in orbit. Early on, they'll probably just look like a satellite, just with a little docking port, basically. The like space plane will come with the raw ingredients, basically, the liquids, et cetera. It'll dock with that like satellite up in orbit, exchange for the fabricated goods. But then we'll have like 10 of those satellites. We'll start to stitch them together, basically looks like a station. One day, there'll be so many of those pieces of equipment on board that we'll be able to economically justify, hey, probably need to do it with wrench every once in a while to go like fix some stuff up there. But like, once we can economically justify like one person with a wrench, 10, 100, 1,000, and so like, yeah, we for sure, we want to build the first industrial city in low earth orbit,

• 1:51:19Delian Asparouhov?

  but we're taking it like one step at a time, building out the business, getting great unit economics, proving out one use case at a time.

• 1:51:25Jordi Hays?

  What about the other parts of the stack that you actually need for that? So like, I'm thinking like docking, is there a startup that's just, just working on docking?

• 1:51:33Delian Asparouhov?

  Yeah, I mean, uh, you know, sort of credit to them, um, there's a company in Seattle called Starfish, you know, sort of space that is hyper focused just on like the like docking, maneuvering, the software for that.

• 1:51:42Jordi Hays?

  Yeah, cause that, that feels like something that like, if that's not your core competency, like, seems like you could have a series of nightmares around just trying to figure out docking. And that is a probably, you know, super widely applicable, uh, process for the rest of the space economy.

• 1:51:57Delian Asparouhov?

  Totally, it's like, um, you know, back in the day, we would have had to make our own solar panels, our own thrusters, propulsion tanks, et cetera, for like the stuff that we build on the ground. That stuff, you know, over the course of the last decade has become a much more mature supply chain. As we start to get to this like space station world, I think there'll be some of these things where like Starfish, if, uh, Starfish, I believe, basically makes this like camera that you can basically attach to your satellite. They take over the controls for your like propulsion and they'll dock you to wherever you're needing to go. Yeah, five, 10 years ago, there's no way that we would have like been able to buy that, we would have absolutely had to build it. And so, yeah, I think on a, you know, ongoing basis, we'll always be doing that, you know, sort of build, buy, trade. And ideally, obviously, if there's an off-the-shelf solution, integrating that, and that only accelerates basically our progress. And so, yeah, it's cool to see that like, as obviously Varda is developing, the general space economy and all these use cases are developing.

• 1:52:40Delian Asparouhov?

  And heck, when you said like, you know, sort of warehouse in space, there are companies like Gravitix that are trying to do like dedicated warehouse vehicles. Maybe there's some world where like, yeah, we like buy the warehouse and we just install some docking ports, fill it up with press equipment, but we don't have to like build the warehouse. I'm not like opposed to that. What we really want to focus on is like, we're going to have the best lab down here on earth to like assess how to make these formulations. We definitely have to make the bioreactors ourselves. Nobody else is going to make microgravity bioreactors. We got to make those space planes basically ourself because like, nobody else is going to be bringing those up and down all the time. But the rest of it, pretty open to like, you know, buying where we can.

• 1:53:13John Coogan?

  How are you thinking about the public markets? SpaceX is going out at like, in the trillions, a lot of bio companies, I'm sure United Therapeutics went out in the billions, probably. And a lot of biotech companies, they go out earlier. Pharmaceutical companies go out earlier. The public markets, sometimes they like really stable projections. Do we understand the quarterly forecasts? Sometimes they like a big vision and you get out there with a Tesla or something and it does really well. What is your take on how you might fit into the public markets in the future?

• 1:53:44Delian Asparouhov?

  Yeah, I mean, there's not a lot of private like 10-plus billion dollar in market cap, like pharmaceutical companies. They basically all go public before that. I think it's like-

• 1:53:52John Coogan?

  I mean, there's so many deals, like every day, a big biotech company is buying something for 1 billion, 2 billion, all day long.

• 1:53:59Delian Asparouhov?

  Totally. That's basically like the default.

• 1:54:00John Coogan?

  Yeah.

• 1:54:00Delian Asparouhov?

  Now, I think like GLPs have shown that like in the therapeutics world, you can build a like, you know, a business that can effectively be like a trillion dollar outcome.

• 1:54:07John Coogan?

  Really?

• 1:54:08Delian Asparouhov?

  Just one therapeutics business. You know, we're definitely thinking about that from the, you know, sort of founders fund hat side of things. How do we back things that aren't just that 1 to 5 billion dollar therapeutics outcome? At Varda, I think we'll look at it like on a round-by-round basis where like, I think about it as like cost of capital. The public markets are offering me a lower cost of capital because they have more expertise, because there's a bunch of hedge funds that have like MD PhDs and tons of them on staff to deeply understand pulmonary diseases, ophthalmology, et cetera. Yeah, we'll go to the public markets if that's the case. If we're still seeing tons of support in the private market and we think it's like relatively net similar, you know, we'll start a private for a period of time. If I had to be, again, peer into the crystal ball, my guess is like, yes, relative to a SpaceX or an Andal or things like that, I think we will have much lower cost of capital early on, you know, sort of being public rather than not.

• 1:54:52Delian Asparouhov?

  Because the public markets have so much appreciation for the types of clinical data sets that we'll be putting out.

• 1:54:56John Coogan?

  What about on the other side? I've heard there's a like a really way to really great way to make a lot of money really quickly is like an unlicensed broker dealer of like SPVs. Like, would you recommend that? What's your take?

• 1:55:07Delian Asparouhov?

  You know?

• 1:55:07John Coogan?

  Get into that game like fine. Do they go to some employee?

• 1:55:10Jordi Hays?

  There's no securities law in space.

• 1:55:12John Coogan?

  Random person. Oh, there we go.

• 1:55:13Delian Asparouhov?

  You can't find me there, baby.

• 1:55:15John Coogan?

  But how even processing the SPV boom, all of these questions around brokering and what's going on there?

• 1:55:21Delian Asparouhov?

  Yeah, I mean, I think I do think that one lady's like anthropic tweet basically led to anthropics like Paulson on this. Part of why that, you know, sort of is happening is, you know, there's this SEC regulation on the number of entities you can have on your cap table while staying a private company. I forget the exact number. I think it used to be a thousand.

• 1:55:36John Coogan?

  Yeah.

• 1:55:37Delian Asparouhov?

  Now it's 6,000. These private companies, as they stay private so long and have this number of SPVs, and especially as these SPVs get warehoused out, it increases your entity count. And so I do think there's a significant, you're sort of locked down on it.

• 1:55:49John Coogan?

  And employees typically own options and they don't show up on the cap table until they exercise.

• 1:55:53Delian Asparouhov?

  Exactly, exactly. So, yeah, I mean, we're, we're obviously tracking that avarity in terms of how many entities we have. We're not seeing some like exponential growth. We're like, we're too worried about it. Um, you know, I don't know that we've been like as stringent to date, but as I look at our future rounds, yeah, like you need to start to think about like, okay, how many more rounds am I going to stay private? And at some point, like, I need to keep the entity count managed. So totally get the anthropics of the world. It's like they've just raised so many good bajillion of dollars in the private markets that like they have to.

• 1:56:19Jordi Hays?

  I did get some more backstory on that one, uh, one deal.

• 1:56:23John Coogan?

  Yeah, it was not.

• 1:56:23Jordi Hays?

  Allegedly, allegedly it was a much more like complicated structure that wasn't as like bad sounding as the original post said, and like there was like an SPV involved and like some other stuff, but anyways. Uh, why, uh, uh, every single person that you know that has invested in the company has probably come to you saying like, what are you doing with data centers? And all the biggest companies in the world are now like dedicating resources to it. You guys are seemingly staying like extremely focused.

• 1:57:01Jordi Hays?

  You've had conviction around timelines around space data centers being longer, but now that the sort of regulatory environment on earth is changing things. That could change potentially the, the need or the economics, like when would you change your mind and capitulate?

• 1:57:23Delian Asparouhov?

  I mean, I'm definitely sort of open to changing my mind as like a shareholder of companies that may take advantage of these technologies. As somebody that's going and building a space company, I really want to focus on like where I think we have the right to win and can sort of build up something that has like durable margins.

• 1:57:39Jordi Hays?

  Yeah, not a great situation. Like you being in a situation where you're like this like deeply entrenched partner with five massive pharmaceutical companies that are dependent on you for a specific part of their supply chain. That is much better business to me than like competing with SpaceX on like putting GPUs in space when they just are naturally going to have a lot of advantages. And so it feels like, yeah, you could pull forward like around, but do you shoot yourself in the foot in the process of that?

• 1:58:08Delian Asparouhov?

  Yeah, I just think there are a lot of companies in the space industry that will raise off of contracts, renders, et cetera. But ultimately, these things aren't durable unless you are regularly flying spacecraft, building up a production line, right? You know, the Elon quote that I love is like, the factory is the product. I think the thing that we've done well at Varda is we've stayed hyper focused on just like our particular W series vehicle, getting that up to a production rate, flying it regularly, and making sure that it's succeeding and serving customers across a wide variety of verticals versus distracting ourselves with like, there have been a lot of opportunities that we've said no to. I'm sure some of those things in the short term would have inflated our valuation and top line, et cetera.

• 1:58:44Jordi Hays?

  But wearing your investor hat, you're like, I don't care about what my valuation is today. I care about-

• 1:58:49Delian Asparouhov?

  I care about where it is in like 10, 20 years. And so like, I don't need to like listen to the noise of the market. And so I think that is the benefit of like having somebody like me on the sort of cap table or as a sort of co-founder versus like, there are plenty of companies that had XYZ vision two years ago and are now fully pivoting to space data centers because like, that's where investors are deploying capital. And at some point, it's like, if you're changing your company vision and product off of the basis of like where investors are like cycling capital into versus like what customers are demanding. And this is where it's like, look, are there areas where it's like, yeah, Zee Blan might get affected and there I think we have much more of like a right to win. And that affects terrestrial data centers and things like that. Yeah, like there might be areas that we sort of play. But like, go launch a bunch of Nvidia Jetsons up into

• 1:59:30Delian Asparouhov?

  orbit and do that at economics that aren't competitive relative to SpaceX. And even then, I think the SpaceX economics, while promising, still have a long ways to go. That's not a game that I want to play in, you know, competition is for losers.

• 1:59:43Jordi Hays?

  There you go.

• 1:59:43John Coogan?

  Yeah, yeah. I mean, also, like, you're so far from realizing, like, the TAM of what you're building. Like, it makes sense for Google to, like, jump into AI. Like, search is saturated, and they need the next thing.

• 1:59:53Jordi Hays?

  Yeah, it's possible we'll look back on this moment and be like, okay, every viable competitor to actually go and compete in pharma, like, went and did this other thing, and maybe some did well, but then that still left an opportunity to just kind of, like, verticalize on the category.

• 2:00:10Delian Asparouhov?

  And I think what, like, tech people misunderstand is just, like, the, like, size of the TAM in pharma. So, you know, Anthropic is what, I think, like, a $60 billion run rate or something like that, if I get, like, the, you know, sort of latest numbers. Kichuda, that drug that I mentioned, that Merck did in 2019, that one drug's top line last year for Merck, $25 billion in revenue. Just that one drug.

• 2:00:29Jordi Hays?

  Yeah.

• 2:00:30Delian Asparouhov?

  They obviously have many other drugs. There are many other cancer drugs. There are many other immunology drugs. And so it is a massive TAM. If you're able to actually significantly improve the performance of these things, capture some upside, start to go more full stack yourself in pharma, I'm not concerned. And especially, by the way, once there's AGI, what do you think everybody's going to be focused on afterwards when, like, there's no more, like, you know, white collar, you know, sort of, you know, labor that is needed? Everybody's just going to want to live for forever. Where do you think all that capital's going to rotate into? It's going to rotate into longevity, therapeutics, manufacturing. And so I'm, you know, sort of happy to stay on the sidelines and, you know, sort of accept that capital once, you know, sort of all the AGI people rotate out.

• 2:01:03John Coogan?

  I love it. I love it. Well, thank you so much for coming on the show.

• 2:01:05Delian Asparouhov?

  Oh, yeah, exactly. Finally come in person. Good to see you, boys.

• 2:01:08John Coogan?

  So good to have you in person. We'll talk to you soon, darling. Have a great

• 2:01:11Jordi Hays?

  Say hi to the team.

• 2:01:12John Coogan?

  Day. We have Richard Socher from Recursive in the waiting room. We've been keeping him waiting, so we will bring him in to the TBP and Ultra Dome. I love when companies emerge from stealth. Nothing makes me more frustrated than when they

• 2:01:28Jordi Hays?

  What's going on?

• 2:01:29John Coogan?

  We've talked to Richard before, so.

• 2:01:30Jordi Hays?

  Yes, welcome back.

• 2:01:31John Coogan?

  But we're very excited to have him.

• 2:01:33Jordi Hays?

  We've talked to you before.

• 2:01:34John Coogan?

  Yes.

• 2:01:36Jordi Hays?

  That was a bad joke. You.com, right?

• 2:01:38John Coogan?

  Oh, that's right. That's right. Yes.

• 2:01:41Jordi Hays?

  Great to see you, Richard.

• 2:01:43John Coogan?

  Let's, but, but even though you've been on the show before, let's reintroduce the, the, the company and, and, and sort of set the table for us on what you're building.

• 2:01:52Richard Socher?

  Happy to, yeah. So still happily running U.com and AI X Ventures, but now very excited to start recursive with seven incredible co-founders. At recursive, we're looking to build recursive self-improving superintelligence to automate knowledge discovery.

• 2:02:09John Coogan?

  Yeah.

• 2:02:09Richard Socher?

  It's a lot to unpack there, you know, we're getting close and close to the AGI. I think we have to set our sights, set our goals now to, to superintelligence. I think AI is code and AI can code. So now we can actually put those two together and allow in an open and fashion to

• 2:02:31Richard Socher?

  let AI actually improve itself.

• 2:02:33John Coogan?

  Yeah. Are there any other, is, is the entire focus on AI research? Or are there any other areas of research that you're interested in? You see a lot of labs do research on cybersecurity or research on bio or science. There's a whole bunch of different initiatives. How focused do you want to be on AI research?

• 2:02:53Jordi Hays?

  Yeah, it is, it is part of that, part of that focus, just if you can get RSI actually going, then everything else you can enter.

• 2:03:01John Coogan?

  Potentially, yeah.

• 2:03:01Jordi Hays?

  Seemingly very easily.

• 2:03:03John Coogan?

  There you go.

• 2:03:04Richard Socher?

  You, you kind of answered the question. That's exactly right. I think for now, as a company, you want to have a very strong laser focus. And that laser focus for us is on enabling AI to automate the scientific method on itself. The ideation, implementation, validation of ideas, right? And once it's gotten really, really good at that, that means it can be fully recursive, self-improving, then we're going to apply it to a whole host of other applications. First in software and broadly construed digital work, eventually even physical work. And I saw your previous show just now, I'm very excited about pre-communicative biology and the impact that I can have on that.

• 2:03:45John Coogan?

  Talk about the round, the structure, who's in, how much did you raise?

• 2:03:49Richard Socher?

  We raised north of 650 million.

• 2:03:58Jordi Hays?

  There we go. What, walk us through the pitch that you gave investors. What's your, what's your right to win this? You're one of, you know, many, many teams working on this problem, including all the existing labs. But I'm sure that the pitch was compelling. Otherwise, you wouldn't have gotten the $650 million.

• 2:04:21Richard Socher?

  That's right, yeah. At a $4 billion pre, as led by Google Ventures, the Grey Craft, some amazing participation also from Nvidia, AMD and many other incredible funds that we're very grateful for, Angel, Strategix and so on. Our right to win is essentially fourfold. It's the focus. Yes, we know that everyone works a little bit on self-improvement, auto research, things like that. But no one is fully focused on this. We have the team, we have incredible co-founders. Tim Rockteschel, who invented Retrieved Augmented Generation with others and Rainbow Teaming and Prompt Reader and Genie 3, which is like the most sophisticated world model that Google DeepMind had recently launched. Like this incredible talent.

• 2:05:05Richard Socher?

  We got Jeff Clune, who has worked together with Tim Arne, many things. He's done incredible papers like the Darwin Gödel machine, hyperagents with some of his students who are also with us. We got Tim Shi, who built Cresta into unicorn AI for service centers. We got Josh Tobin, who's one of the earliest people at OpenAI and eventually led some of their work on ChatGPT agents, Codex, deep research. We got Samin Xie, co-inventor of prompt engineering. We got Alexey Dostovitsky, the co-inventor of the vision transformer. We got Yuan Dongqian, who used to lead RL at Meta. I mean, it's just an incredible team.

• 2:05:44Jordi Hays?

  Yeah, that's that's pretty compelling.

• 2:05:46John Coogan?

  Then then how are you thinking about scale being all you need or not? Is there a capital war? Or is $650 million enough to do the level of training or inference that you need to actually reach RSI? Because if a lot of the labs at least are sort of, you know, putting the AGI ASI terms in orders of magnitude of compute or orders of magnitude of dollars. And so is there some sort of race condition? Or do you think that there's a more like elegant solution? We need new algorithms, I guess.

• 2:06:25Richard Socher?

  It's a great question. Certainly 650 in this league that we're now in is step one. If you want to compete at that level, you want to build massive frontier AI. You have to eventually raise more. At the same time, you know, this will last us for quite some time. Unless we're seeing enough progress that makes us want to accelerate this, right? And then we prove a new kind of scaling law. Where more compute results and more inventions, more capabilities in AI, more automation in the process of AI research itself, then we're probably going to accelerate that. And to be honest, the team has already made some incredible meta inventions that led the AI to make its own inventions.

• 2:07:09Richard Socher?

  And so we're really excited about the progress and like they will accelerate.

• 2:07:14Jordi Hays?

  Yeah. Do you view today's coding agents as somewhat of a form of RSI? Or is that the wrong, you know, kind of wrong category?

• 2:07:25Richard Socher?

  I'm glad you asked that question. The current models are great for auto research, which is a step towards RSI. But you're not doing true recursive self improvement. If you don't have full control over the entire self, namely the model, the architecture, the infrastructure, its entire harness and all of the things that go into the training, pre, mid, post training, all of these things. And so they are, it's a useful step to use coding agents for auto research. But it's just a step towards the true RSI vision.

• 2:07:59Jordi Hays?

  Got it.

• 2:08:00John Coogan?

  How are you thinking about standing on the shoulders of giants broadly? I mean, you mentioned a bunch of researchers who have published a bunch of papers and obviously you're integrating that, but is there a way to pull forward progress or like catch up to the frontier faster based on open source models, open source research, open source data sets, or distilling, or integrating existing open source projects? I would love to know just your thesis on leveraging open source and tweaking and fine tuning and iterating on versus start from a completely blank sheet?

• 2:08:36Richard Socher?

  Great question, yeah. I think as with many things and similar to the applications of RSI, you want to start with a laser focus and then open up the aperture to more and more things. And 100% you want to stand on the shoulders of giants, both like closed, open source. Open source has done an incredible job bringing in and more capabilities to the community. And so we will use anything and everything that we can, but we also know that long term you're going to want to own and be knowledgeable and able to build the entire stack.

• 2:09:14John Coogan?

  Yeah.

• 2:09:15Jordi Hays?

  Now that you have your own funded NeoLab, do we need more new NeoLabs or do we have enough?

• 2:09:22Richard Socher?

  I'd like to think so. One, we want to build a real company, right? We're not just a lab. I sometimes struggle a little bit with that terminology. I think there are a couple of labs that are truly just labs and it's a little bit unclear where they're going to go long term. We have folks that also build unicorn companies from scratch with revenue and so on, have launched amazing products like an OpenAI Codex with Josh and others. So we're excited, but at the same time, this machine we're building is almost like a eureka machine in the sense of like it'll keep making inventions for you. And so a lot of labs that are focused on like continual learning and world models

• 2:10:04Richard Socher?

  and maybe memory and all of these other aspects, I believe those are all important aspects. I believe that if we're successful, those are all just special cases and outputs of this machinery that we're building.

• 2:10:16John Coogan?

  So do you, yeah, I mean, how close are you, I imagine that this is a whole process, but how close are you to thinking about a product for businesses or a product for consumers, an API, you know, a web playground, a demo? Is that something that by design you want to be super fast about and get something out into the world, have some impact in the interim? Or do you want to keep everything closely held for potentially a really long time? I don't know, forever, potentially, if you're just gonna invent-

• 2:10:52Jordi Hays?

  Yeah, when I hear the Eureka machine, I'm not, I'm keeping that to myself, personally.

• 2:10:56John Coogan?

  Yeah, what's-

• 2:10:57Richard Socher?

  So, initially, initially, we thought about like really giving ourselves like a year or more of time. In the last few months, the team has already made some incredible breakthroughs, and so we may accelerate some of the productization of this research to come out earlier. I don't want to commit yet to specific date or anything, but like, I think, you know, we want to build a viable company here that brings superintelligence and allows it to have massive impact to help humanity flourish, and that won't happen in just a research model.

• 2:11:32John Coogan?

  Love it.

• 2:11:33Jordi Hays?

  Could you ever see a scenario where you create something that would make more sense to like spin off into another company to productize? Or do you, do you expect to, you know, basically use all of your creations internally and productize them yourself?

• 2:11:52Richard Socher?

  I can see how our customers will use this in incredible ways so that they can then use, like, create new kinds of products and new kinds of product categories. I think we've seen similarly incredible new companies like that have used AI and code generation to enable others to build their own businesses, you know, Rep, Lit, Lovable, and so on are great examples of that. And I can see our technology doing something similar at an even more foundational level.

• 2:12:24John Coogan?

  Amazing. Thank you so much for coming on the show. Congratulations on the product.

• 2:12:29Jordi Hays?

  Great to get the update and come back on for your first release.

• 2:12:34John Coogan?

  Yeah.

• 2:12:35Jordi Hays?

  Great to see you.

• 2:12:36John Coogan?

  We'll talk to you soon.

• 2:12:37Jordi Hays?

  Cheers, Richard.

• 2:12:38John Coogan?

  Have a good one. Goodbye. We have a debate.

• 2:12:41Jordi Hays?

  What's up?

• 2:12:41John Coogan?

  In the Wall Street Journal, they are reporting that typing is being replaced by whispering. And it's way more annoying. This is a trend because programmers, startup founders, startup employees are starting to resemble high-end call centers. Only these employees are talking to AI and people are saying it's a little awkward. Where do you stand on whispering? Tyler, you have a take?

• 2:13:06Speaker 02

  Well, so I think this might be planned words, right? Because whisper is like the model.

• 2:13:10John Coogan?

  Yes.

• 2:13:10Speaker 02

  Used to speak into.

• 2:13:11John Coogan?

  Yes, but apparently.

• 2:13:12Speaker 02

  Are they literally whispering?

• 2:13:13John Coogan?

  They are literally whispering. So Molly here mumbling. Molly's mumbling was starting to get on her husband's nerves. What was once a sacred nightly routine, putting the toddler to bed, collapsing onto the couch and opening their laptops to finish their work in peace, had become anything but peaceful. Instead of typing quietly, Molly started to hold down the function key and talk in hushed tones to her computer. She runs her own AI business in Seattle and is hooked on Whisper Flow, a company you might have heard of, a dictation app that users are pairing with coding tools like Codex from OpenAI and Claude Code to turn rambling stream of consciousness prompts into coherent, usable texts in seconds. Efficient?

• 2:13:57John Coogan?

  The Wall Street Journal says yes, but annoying? You bet. It didn't take long before Molly's husband told her they needed to talk. The couple now often sit apart. If we need to get something done at night, one of us will stay in our office across Silicon Valley. Work is being remade as once mellow spaces become dens of din. And we got a mention of our friends over at Ramp. One venture capitalist said visiting AI startups today is like showing up at a high-end call center. Except everyone is chatting with AI. Engineers at credit card startup Ramp sit at their desks wearing gaming headsets so they can talk loudly to their AI assistants. Gusto co-founder Edward Kim has encouraged employees at the human resources company

• 2:14:40John Coogan?

  to experiment with dictation technology, telling them the office of the future will sound more like a sales floor. People are going to be screaming at the AI agents.

• 2:14:49Speaker 02

  Oh, I like that. Like, yeah, stock trading.

• 2:14:51John Coogan?

  Yeah, we're bringing back the New York Stock Exchange. There is a way to combat this. I've seen a couple masks, the Bane mask.

• 2:14:59Jordi Hays?

  The Bane mask.

• 2:14:59John Coogan?

  It's the Bane mask, basically.

• 2:15:00Jordi Hays?

  The Bane mask.

• 2:15:01John Coogan?

  People do put it over and it has a headphone jack and a USB-C port and then they can yell very aggressively if they're live streaming video games late at night and they don't want to wake up their partner or roommate. But I think I think I'm pro this. What do you think, Jordy? I think I'm in favor of a noisier, louder. I do like a library environment. I like a calm environment, but there's something invigorating about everyone yelling at their computers all day long. Where do you stand on it, Jordy?

• 2:15:29Jordi Hays?

  I like it.

• 2:15:30John Coogan?

  You like it?

• 2:15:31Jordi Hays?

  I bring the energy.

• 2:15:32John Coogan?

  Yeah. What about you, Tyler?

• 2:15:33Speaker 02

  Yeah, I like the aesthetics of people yelling, although the muzzle, coding muzzle, I think is a good.

• 2:15:39John Coogan?

  You won't put on the Bane mask?

• 2:15:40Speaker 02

  I don't want the muzzle, no.

• 2:15:42John Coogan?

  Yeah, you don't want the muzzle?

• 2:15:43Speaker 02

  Yeah.

• 2:15:43John Coogan?

  Yeah, you can't muzzle me.

• 2:15:44Speaker 02

  You're not gonna stop me from screaming at my computer.

• 2:15:46John Coogan?

  So you say, you say you're a fan of this, but I don't feel like I've ever seen you talking to Whisper Flow while you are vibe coding.

• 2:15:53Speaker 02

  That is true.

• 2:15:55John Coogan?

  Reveal preference.

• 2:15:56Speaker 02

  I find I usually only use the speaking when I'm like driving or something.

• 2:15:59John Coogan?

  I do that all the time. I'm always on the dictation mode. I don't use the advanced voice mode that often. What I will do is I will go and press the little microphone button, ramble for a few minutes, and then fire off a more robust query to ChatGPT with more context.

• 2:16:14Jordi Hays?

  Yeah, you're doing that like once a day and it's incredibly powerful. I actually don't think many people realize that you can just ramble.

• 2:16:22John Coogan?

  Once a day in front of you, like 50 times a day.

• 2:16:25Jordi Hays?

  There's some controversy has hit the timeline.

• 2:16:29John Coogan?

  Okay, what's going on?

• 2:16:30Jordi Hays?

  Socks has pulled a screenshot of the figure livestream.

• 2:16:37John Coogan?

  No way.

• 2:16:37Jordi Hays?

  Where the robot appears to be doing something like adjusting a headset.

• 2:16:42John Coogan?

  Okay.

• 2:16:43Jordi Hays?

  And so he's alleging that.

• 2:16:44John Coogan?

  Well, he thinks it's teleoperation.

• 2:16:46Jordi Hays?

  That it's teleoperation.

• 2:16:47John Coogan?

  Okay.

• 2:16:48Jordi Hays?

  And the robot is actually just being controlled by someone in a VR headset.

• 2:16:53John Coogan?

  Well.

• 2:16:54Jordi Hays?

  There's some comments that say, hey, maybe this could have been in the training data.

• 2:16:58John Coogan?

  I was about to say, yeah, it could be in the training data. Interesting.

• 2:17:02Jordi Hays?

  So who knows?

• 2:17:03John Coogan?

  It's interesting to think about all the, all the vestigial behaviors of human behavior that might exist in training data for humanoid robots. Like it might just go and pick up the, a phantom diet coke and take a sip because it's had a long day and it knows that's what humans do. So it recreates that. Uh, we'll let Brad Adcock, uh, respond to this, dunk on it.

• 2:17:23Jordi Hays?

  Yeah. The, the main thing is the speed. The speed up is insane.

• 2:17:28John Coogan?

  Oh, is this so? Sorry. I don't know.

• 2:17:30Jordi Hays?

  Just the, the robot, how quickly it's moved.

• 2:17:32John Coogan?

  Yeah. But from the, because the, the last version, he was, he was talking about the Biden walk going away and it was still a little like jerky and this doesn't look jerky at all. This looks, uh, this looks very polished and, uh, and I don't think we've seen anything at this level. Like Optimus is still a little jerky and even the unitry stuff is pretty jerky. That crazy huge unitry was pretty jerky and we're all sort of used to that because it doesn't really matter.

• 2:17:56Jordi Hays?

  I do think, I do think.

• 2:17:57John Coogan?

  Getting the job done.

• 2:17:58Jordi Hays?

  I do think they should have allowed some type of like actual live demo. So people could go and see the robot saying, hey.

• 2:18:06John Coogan?

  Or like a respected journalist in the room or something. I don't know. There, there's a bunch of ways, but this, this debate will continue going back and forth with people understanding and debating the capabilities of this technology. But we can come back to that in the future because our next guest is in. We have Brandon Hill from Vori, the CEO. I kind of like that. How are you doing, Brandon?

• 2:18:27Jordi Hays?

  What's going on?

• 2:18:27John Coogan?

  Welcome to the show.

• 2:18:28Speaker 09

  Thanks for having me.

• 2:18:30John Coogan?

  We gotta ask you, uh, what's your stance on whispering in the office? Have you heard this? All the AI employees, all the startup employees are whispering into their computers to give commands to Claude code and codex. Are you in favor of having your office feel like a sales floor? Or would you like a quiet, library-like environment?

• 2:18:51Speaker 09

  I mean, ABC always be closing, right? Like whether you're closing PRs, whether you're closing deals, we want Kinesis on the office environment.

• 2:18:58John Coogan?

  I love it. We, yeah, I, I agree with you. I think everyone, it's unanimous.

• 2:19:02Jordi Hays?

  Get used to it.

• 2:19:03John Coogan?

  But we're not here to talk about whispering your computer or screaming at it. We're here to talk about your company. So please give us an introduction on yourself and Vori.

• 2:19:10Speaker 09

  Yeah, absolutely, guys. Thanks for having me. My name is Brandon Hill. I am the CEO and co-founder of Vori. I'm actually a third generation grocer, just to give you my story.

• 2:19:18John Coogan?

  That's amazing.

• 2:19:18Speaker 09

  My grandparents ran grocery.

• 2:19:20John Coogan?

  Cool.

• 2:19:20Speaker 09

  My parents met and fell in love in a grocery store and have been in the industry for over 40 years.

• 2:19:25John Coogan?

  That's amazing.

• 2:19:26Speaker 09

  I went to Stanford University. That's where I met my two co-founders, who are two of my best friends. Worked at Google with Trey. Rob was an aerospace engineer at SpaceX, under Elon. And then self-driving cars at Lyft. And we're building the operating system, a self-driving operating system for supermarkets. Where they basically help them make more money and operate more autonomously, because as you know, grocery is a paper and pencil industry. But it's also one and a half trillion dollars of the American economy.

• 2:19:53John Coogan?

  Yeah. So are you starting with back office ERP inventory management accounting? Or are you going to try and replace those automated checkout machines that everyone knows barely work, even though they've been around for decades? It feels like there's opportunity in both. How quickly do you want to focus?

• 2:20:13Speaker 09

  Well, you know, what's interesting is we found that the alpha is really in automating everything before checkout.

• 2:20:18John Coogan?

  Okay.

• 2:20:18Speaker 09

  And after checkout.

• 2:20:19John Coogan?

  I can imagine.

• 2:20:19Speaker 09

  As you know, there's a bunch of companies that raised hundreds of millions of dollars trying to do the just walkout Amazon model.

• 2:20:25John Coogan?

  Yeah.

• 2:20:26Speaker 09

  The unintuitive thing is, what we're surprised by is it actually turns out building inventory, automating pricing.

• 2:20:33John Coogan?

  Sure.

• 2:20:34Speaker 09

  Helping grocery stores market their products to their customers. Everything before and after is really where the, that's where the economics are. And that's where the grocery stores have the most need and willing to spend money.

• 2:20:44John Coogan?

  Yeah.

• 2:20:44Speaker 09

  So that's what we do. We happen to have a sleek, modern checkout on the front end.

• 2:20:48John Coogan?

  Yeah.

• 2:20:48Speaker 09

  But it's about connecting everything in the store end to end.

• 2:20:51John Coogan?

  Okay, automating pricing in a store. There's, you know, the price of oil is going up. There's inflation. There's all sorts of different prices that are changing all day long. The price of milk fluctuates day to day. You mentioned a pencil and paper and pencil industry. I imagine that at some point, a store manager gets a spreadsheet or an email or some sort of notification that a price needs to be changed and then they have to print out a new label. Is that how it works? And then how will it work in the future?

• 2:21:20Speaker 09

  So there's the old way and the new way.

• 2:21:21John Coogan?

  Yeah.

• 2:21:22Speaker 09

  In the old world, imagine a supermarket which has 100,000 products. Whereas a grocery store, you know, a restaurant might have 50, 100 menu items. Grocery store has 50, 100,000 SKUs. They're accepting dozens of payment types.

• 2:21:36John Coogan?

  Yeah.

• 2:21:36Speaker 09

  Right. They have hundreds of employees and they might do more in sales than a restaurant or like a donut shop or a coffee shop might do in a month or a year.

• 2:21:45John Coogan?

  Yeah.

• 2:21:45Speaker 09

  In terms of overall volume. So the complexity of solving the problem is really hard. Now today, what they're, the state of the art, if you could believe it, is you have a pricing coordinator like named Judy. She has her bifocals on. She receives an invoice from the supplier. She's looking at it with her bare eyeballs, going through line by line with a ruler and highlighter to figure out if milk and bok choy and ketchup and cereal have gotten more expensive today versus last week. She finds the price change and has to go type it into her ERP system, like the back office system, and hope that that reflects accurately at the POS. It's a 12-step process. Vori does it in one click. So our pricing agent reads all the incoming invoices from all of the hundreds of wholesale suppliers that a supermarket is using.

• 2:22:30Speaker 09

  It detects when there's changes in cost, which of course there always are due to inflation and supply chain issues, and then automatically changes the price across 30,000, 50,000, 100,000 items in real time.

• 2:22:42John Coogan?

  So I, I, the, the, the changing of the price at the checkout actually seems like the easy part because when I'm in a grocery store, I feel like a lot of the prices are printed and they're, and they're labeled right on the shelves. Is there a move towards like e-ink displays or LCD displays that could be updated in the cloud in the future? Is that an important like, like step along the road to like automating the price setting of, of grocery stores?

• 2:23:14Speaker 09

  Oh, it's critical. In fact, I got a couple right here.

• 2:23:16John Coogan?

  Oh, no.

• 2:23:17Speaker 09

  Electronic shelf labels, right?

• 2:23:19John Coogan?

  That's amazing.

• 2:23:20Speaker 09

  Walmart actually just spent a billion dollars rolling out electronic shelf labels across every single item, across every single of their 4,600 stores.

• 2:23:27John Coogan?

  Makes so much sense.

• 2:23:28Speaker 09

  But the thesis behind Borey is we do that today.

• 2:23:30John Coogan?

  Yeah.

• 2:23:31Speaker 09

  For all of our customers.

• 2:23:32John Coogan?

  Yeah.

• 2:23:32Speaker 09

  And we're taking like that Walmart and Amazon level technology.

• 2:23:34John Coogan?

  And bringing it.

• 2:23:35Speaker 09

  And rolling it down market to other 75%

• 2:23:37John Coogan?

  Yeah.

• 2:23:38Speaker 09

  Of the trillion and a half dollar food and bed retail market.

• 2:23:40John Coogan?

  I didn't realize there was that fracture. I would have guessed.

• 2:23:42Jordi Hays?

  Do grocery stores.

• 2:23:43John Coogan?

  Doing like 70% of all grocery or something.

• 2:23:46Jordi Hays?

  Do, do some of these, uh, smaller grocery stores, or I guess the full stack, end up selling products at a loss accidentally sometimes because they get a price change and then.

• 2:23:56John Coogan?

  Didn't get rolled out fast enough.

• 2:23:58Jordi Hays?

  Yeah, they didn't roll it out and then they're just like losing money on an item. Is that, is that a thing?

• 2:24:01Speaker 09

  It, well, it happens all the time. So Dylan, right?

• 2:24:03John Coogan?

  Yeah.

• 2:24:04Speaker 09

  Dylan from TVP. So Dylan, I was going back and forth with him on X yesterday. And so his favorite shop is Mill Valley Market. Okay, up in Mill Valley. Um, love that store. It's beautiful. That's powered by Borey. Before we went in that store, and Ryan, the owner, will tell you, yes, they were mispricing items here and there, and they were losing margin. We go in, we find five points of gross margin sitting on the table with our, uh, and give it back to them, put it back in their pockets with our automated pricing.

• 2:24:32Jordi Hays?

  Take it out of our pocket.

• 2:24:33John Coogan?

  Take it out of Dylan's pocket and put it in the store owner's pocket. I like this.

• 2:24:37Speaker 09

  Hey, I'm pro competition. I'm pro America. That means I'm pro small business, right? Just trying to help them succeed.

• 2:24:41John Coogan?

  No, no.

• 2:24:42Jordi Hays?

  No, it's great.

• 2:24:42John Coogan?

  Dylan's doing fine, but yeah, it's funny to frame it that way.

• 2:24:44Jordi Hays?

  The price of Bok Choy is going up.

• 2:24:46John Coogan?

  Yeah. Good luck, Dylan.

• 2:24:49John Coogan?

  Get ready to, get ready to pay through the nose for your Bok Choy. Uh, tell us about the round. How much did you raise? What happened?

• 2:24:56Speaker 09

  Yes, so we raised $22 million, uh, to.

• 2:25:05Speaker 09

  Thank you. We raised 22 million to invest really in our go to market. We've been expanding rapidly. We've done over $500 million.

• 2:25:12John Coogan?

  Wow.

• 2:25:12Speaker 09

  In payments.

• 2:25:13John Coogan?

  Wow.

• 2:25:13Speaker 09

  Um, which is where 60% of our revenue comes from. We're investing behind that, um, advancing our product, releasing more agents for the store to do more work to help them be more competitive against big box, big box stores. And investing behind our deployment team to help install this hardware and software and complex payment system into more grocery stores across the country. So we're super excited.

• 2:25:33John Coogan?

  That's amazing. Well, congrats.

• 2:25:36Jordi Hays?

  Seems really smart.

• 2:25:37John Coogan?

  Very, very unique market to very unique.

• 2:25:40Jordi Hays?

  Hard to compete with you having probably done all of these different jobs.

• 2:25:44John Coogan?

  Yeah.

• 2:25:44Jordi Hays?

  At, at different points yourself back in the day.

• 2:25:47John Coogan?

  Generational success. I love to see it.

• 2:25:50Speaker 10

  There you go.

• 2:25:51John Coogan?

  Have a great rest of your day.

• 2:25:52Jordi Hays?

  Great to meet Brandon.

• 2:25:53John Coogan?

  Thank you so much for coming on the show.

• 2:25:54Jordi Hays?

  Come back on soon.

• 2:25:55John Coogan?

  Yeah, we'll talk to you soon. Have a good one. Um, next we have Nate Tepper from True Short. He's the founder and CEO here to talk.

• 2:26:03Jordi Hays?

  The Tefanator.

• 2:26:04John Coogan?

  Funding from Coastal Ventures, WonderCo, a bunch of Hollywood investors for AI-generated vertical films for mobile. The Tefanator. Welcome to the show.

• 2:26:15Jordi Hays?

  What's going on, dude?

• 2:26:15John Coogan?

  How you doing, Nate?

• 2:26:16Speaker 10

  Guys, good to see you. Let's go.

• 2:26:18Jordi Hays?

  Let's go.

• 2:26:20John Coogan?

  First time on the show. Introduce yourself. Tell us about the company. Tell us about the product.

• 2:26:25Speaker 10

  Uh, Nate Tepper, founder, CEO of True Short. We're an AI film studio and streaming platform. So on one side, we have creatives and engineers that are making movies together. On the other side, we make the streaming platform too, like Netflix, distribute the movies, monetize them.

• 2:26:43John Coogan?

  Yeah.

• 2:26:43Speaker 10

  Full stack creative company.

• 2:26:45John Coogan?

  Vertically integrated. Uh, what is the, like, how, how do customers experience this? A mobile first, web, desktop? Like, what is the watching behavior these days?

• 2:26:57Speaker 10

  Yeah, exactly. So we were kind of inspired by the micro dramas. I don't know if any of you guys know about that, but basically saw that China was pumping these vertical soap operas that were making more money than the box office in China. Like, some of these apps are doing 50 million a month in revenue and they're all shot vertically, minute-long episodes. And that kind of led us to this idea that like, wait, there's something in between Netflix and TikTok. People are consuming this on their phone vertically, short form. So we kind of took that exact same approach, but not.

• 2:27:29Jordi Hays?

  Yeah, we, we, we had that realization probably a year ago too. We were looking at some of the, the iPhone kind of charts and saying like, what are all these companies I've never heard of that are? In the top 25 that are, you know, printing money.

• 2:27:44John Coogan?

  Yeah.

• 2:27:45Jordi Hays?

  Is this, and someone else had a realization like this years ago. One of your investors.

• 2:27:51John Coogan?

  I wonder who.

• 2:27:53Jordi Hays?

  Good, good friend of ours. Jeffrey Katzenberg. You got him into the round. Why, what did he see in kind of your approach that would, you know, make, make this a great investment?

• 2:28:08Speaker 10

  I mean, the next Hollywood is being built right now from the ground up. Right? Like all these new creators are coming in. I think some kid in his bedroom is going to make the next Star Wars, leveraging AI and maybe different formats, short form, et cetera. And I think he just sees that opportunity and the approach that we took, we have this vision of like the next Netflix. But we launched with a true crime app. We just took a very strategic like Amazon launch with books. We took a niche wedge approach and within six months with the number one true crime app, three million in annualized revenue twice. I think he saw the vision, but that actually we know how to execute as well.

• 2:28:47John Coogan?

  Yeah.

• 2:28:47Speaker 10

  And so I think he was bought into that.

• 2:28:51Jordi Hays?

  How are you working with creative talent? Are you hiring all over the world? Or is this going to be like, you want to get a big studio here in LA and hire a bunch of people?

• 2:29:03John Coogan?

  The next James Cameron.

• 2:29:05Speaker 10

  Yeah, let's go. I like that. We, we actually just opened an office in LA. And so the, we call them creative pods is kind of the way we work. A pod is basically a showrunner who's like the visionary, the, that knows the story, the characters, the brand. Then there's an AI filmmaker who brings all the shots to life with AI, kind of like the DP director of photography. And then you have the editor who strings it all together. And that pod basically produces content every week, a series a week. And so we want to keep building more and more of these creative pods. And we're, we're testing it right now. We have remote pods, but we just opened our first office in LA with our in-person pods. And just the speed that you can work collaboratively together there.

• 2:29:50Speaker 10

  So we're stoked about that.

• 2:29:51John Coogan?

  Talk about the customer acquisition flywheel. You've been at the top of the app charts. I'm sure that that has a lot of energy. There's, there's news about the company, but how do you think about the content being shareable? One of the critiques of Quibi was that you couldn't screenshot or, or screen record the content. At the same time, if someone's just wiring up every time something goes out on TrueShort, just upload the full thing to YouTube and TikTok and Instagram and like, let me steal the ad revenue. That's not going to work. So how are you, how are you dealing with getting attention for the company, having the flywheel, leveraging the content that you're creating without giving everything away and still giving customers a reason to subscribe and pay you?

• 2:30:32Speaker 10

  Yeah. Yeah. Great question. Um, and like growth is in our DNA. Jordy knows this, but our last app was number one in the app store for health and fitness. I think it had close to a billion views on TikTok. Let's go. Um, and we, I mean, look, we run like kind of similar playbooks. We're super growth hacky. We're running many different TikTok accounts. Like we know how to do all that stuff.

• 2:30:53John Coogan?

  Okay.

• 2:30:54Speaker 10

  Steal it yourself.

• 2:30:54Jordi Hays?

  Dark arts.

• 2:30:56John Coogan?

  You steal the content yourself. That's probably the right move. Yeah. I mean, that's what we do here. We clip our own show. Yeah.

• 2:31:01Speaker 10

  I know. We make content. We might as well put it out there.

• 2:31:04John Coogan?

  Yeah.

• 2:31:04Speaker 10

  Everywhere.

• 2:31:04John Coogan?

  Yeah.

• 2:31:05Speaker 10

  But, uh, but I do want to be straight up too. Like the micro drama space is run on paid acquisition.

• 2:31:10John Coogan?

  Interesting.

• 2:31:11Speaker 10

  Very much so. And like, I won't deny that too. We, we definitely run paid acquisition. We just know how to do both.

• 2:31:16John Coogan?

  Yeah.

• 2:31:17Speaker 10

  So it's, we have a growth advantage.

• 2:31:19John Coogan?

  Yeah. And I feel like the, the, the cost of paid acquisition probably falls when there's already some organic content out there. There's more familiarity with the brand. All of that helps with the CPMs.

• 2:31:30Jordi Hays?

  Yeah. How quickly do you expect the, the Youtubes of the world, the TikToks to actually roll out dedicated micro drama features?

• 2:31:40Speaker 10

  TikTok did.

• 2:31:42John Coogan?

  Okay.

• 2:31:43Speaker 10

  So TikTok has one called like Pine Dream, Pine something. I don't know. I don't know why it has like 200 ratings on the app store. So I don't know what they did with it. Um, Netflix is creating kind of like vertical section in the app, but they haven't made vertical content in it yet. So it's, it's definitely happening. Things are going.

• 2:32:03Jordi Hays?

  Yeah. It feels like, it feels like this business to me will.

• 2:32:09Jordi Hays?

  Over time, probably look more like an A24 that owns its own distribution and actually sells the product because you're gonna get like competition from all the

• 2:32:20John Coogan?

  Platforms on the features.

• 2:32:22Jordi Hays?

  And so your advantage is like, can you create a system that can reliably create hits and IP and deliver enough value to customers so that they subscribe and they keep coming back?

• 2:32:32John Coogan?

  Youtube, Youtube had

• 2:32:34Jordi Hays?

  Is that, is that, is that, is that right?

• 2:32:36John Coogan?

  Yeah.

• 2:32:37Speaker 10

  Yeah, that's why we want to build the full stack here. Like, it's almost like its own flywheel where we create the content, put it in the app, funnel that data back into our own technology and creative teams and just keep making more. So the speed that we're going and the learn it, the pace of learning on the creative side too, I think we'll get to hits much faster. I don't honestly just don't see these companies keeping up in terms of speed and iteration, not of creative, actually. Yeah.

• 2:33:06John Coogan?

  Yeah, yeah. I mean, Youtube got into original content that they were producing and they pulled back from that eventually and they just maintained just pure platform. Netflix, obviously, does productions and but a lot of that is done with other studios and then they just buy or license the the actual end product. So yeah, the vertically integrated approach.

• 2:33:27Jordi Hays?

  Yeah, I think, I think the key will be creating a setup where a pod can make more money, like building on True Short than they can by just going and setting up their own kind of Youtube account.

• 2:33:40Speaker 10

  I'm, I'm curious in general, like, part of what I'm thinking about is like, there's about to be a million filmmakers. Like some, like I said, some kid in his bedroom is gonna make the next Star Wars. Where is that gonna be distributed? Is it Youtube? Is it Netflix? Is it True Short? I think that we're gonna see emerging films, which is already happening, that are actually high quality that people want to watch. Where are people gonna watch them? I don't, I don't know yet. I think we'll see some stuff over there as well.

• 2:34:08John Coogan?

  How are you thinking about episode length and number of episodes? What have you actually tested? It feels like the, the base case is like a two-minute episode, maybe 10 episodes per story. Is that roughly correct? And then like, do you think there'll be wide variation? Like, we see a 90-minute movie and then a three-hour epic from Nolan every once in a while? Like, where do you see the dials turning?

• 2:34:33Speaker 10

  Yeah, I mean, I actually view this microdrama space and what we're doing as like separate from theatrical, even separate from Netflix. The way people consume it is different, too. It's like they open this stuff when they're bored on the subway. Right? And so it's actually, if you still want to go watch a full two hour length movie, you're gonna go watch that on Netflix or go to the theater. That will still exist until these become good enough that they're distributed there. But and so for now, just for now, that we're focused on these like kind of niche genre, one to two minute long episodes, mini episodes per series and like getting a flywheel going around that.

• 2:35:12Jordi Hays?

  Uh, what is, what is the, do you feel like you have hit IP yet, something that you'll invest, you know,

• 2:35:23Jordi Hays?

  twenty million dollars into a specific like series over time yet? Or are you still just like taking, taking shots, getting base hits, doubles, etc.?

• 2:35:33Speaker 10

  So I, I do intuitively, we're launching it later this month. Um, it's not true crime, so it's not on our true crime app. It's our next genre. And just seeing what we're creating there, I would honestly say our true crime stuff is just like, that'll be the lowest quality we'll ever put out stuff. Like it's getting better and better. So intuitively, I think we're making now is real IP, people that will have fans.

• 2:35:59John Coogan?

  So, so true crime, true short, there's obviously a linkage there, but the, the name true short feels like it can hold anything like it's not like

• 2:36:09Speaker 10

  Yeah.

• 2:36:10John Coogan?

  a home box office. No one cares that they just think HBO and it feels like you'll be there very quickly. But it sounds like you're considering multiple apps. Is that in the roadmap?

• 2:36:20Speaker 10

  Um, I don't want to say too much yet about exactly what direction, because like it's, we're still discussing

• 2:36:26John Coogan?

  Yeah.

• 2:36:26Speaker 10

  it, but what I will say is like, There are a lot of opportunities now around niche genres.

• 2:36:33John Coogan?

  Yeah, what about?

• 2:36:34Speaker 10

  I think that's interesting.

• 2:36:35John Coogan?

  What about like pseudo or semi user-generated content? HBO, you need an agent, it's incredibly high bar to get your media product, your movie or show on HBO. Amazon Prime sort of has a self-publishing like route if you're really creative. And Kindle self-publishing, you can publish a book without any, like I think it needs to meet standards, but it doesn't necessarily, it's like an App Store review, not, it's maybe just one notch above YouTube to publish on the Amazon suite of products. How are you thinking about engaging like that random, the next James Cameron,

• 2:37:15John Coogan?

  who isn't in LA and didn't have a great resume, but created a great product and you could monetize it for them? Have you thought about that?

• 2:37:24Speaker 10

  Yeah, I mean, you nailed it. Like that was the original vision was like, let's be the distribution for these million filmmakers that are coming and curation and taste is going to be really important, things like that. But we quickly learned, like, and just realized that like, out of those million filmmakers, a lot of it will be slop. And it's still the earliest days. And we also learned from the micro dramas that like, there's a formula, especially for winning in the beginning. So we're like, let's own it, let's learn it ourselves, let's build it right now. And we can take this, we could probably take this to a billion dollar company just as our own team moving fast. But I do think the big, big vision, like I said, is like, how do you find the next James Cameron? Where is he putting his stuff? That's, that's really exciting.

• 2:38:09John Coogan?

  Favorite song to play on the guitar?

• 2:38:10Jordi Hays?

  Well, we have 30 seconds left. Do you want to use the opportunity to do a quick solo or your guitar?

• 2:38:16Speaker 10

  I knew you were gonna ask me to do that. But I will plug, I will plug, check out my band, Pink Roses on Spotify. If you know Dave Fontenot, it's my bandmate.

• 2:38:28Jordi Hays?

  Yeah, they've had this crazy side quest of being rock stars.

• 2:38:32John Coogan?

  Amazing.

• 2:38:33Jordi Hays?

  It's amazing.

• 2:38:33Speaker 10

  Well, it actually has millions of streams. You like it?

• 2:38:36John Coogan?

  Well, congratulations on the round. I don't know if we have to go on.

• 2:38:38Jordi Hays?

  Hit it again.

• 2:38:41Jordi Hays?

  Great to see you Nate.

• 2:38:43John Coogan?

  We'll talk to you soon.

• 2:38:43Jordi Hays?

  Make a micro drama about Tyler the intern's life at TVPN.

• 2:38:48Speaker 10

  Should we use his likeness?

• 2:38:50John Coogan?

  Yeah.

• 2:38:51Jordi Hays?

  Yeah.

• 2:38:54Speaker 10

  This is not recorded.

• 2:38:55Jordi Hays?

  Yeah, there's a lot of training data too, so how about it?

• 2:38:59Speaker 10

  Later.

• 2:39:00Jordi Hays?

  See you Nate.

• 2:39:01John Coogan?

  Thank you so much. Our next guest is the co-founder and CEO of Roadrunner, a new company for AI-native revenue infrastructure.

• 2:39:12Jordi Hays?

  I like the sound of that, John.

• 2:39:13John Coogan?

  There's that again. Welcome to the show. How you doing?

• 2:39:16Speaker 11

  Hey guys.

• 2:39:17John Coogan?

  Thanks so much for joining. How you doing?

• 2:39:19Jordi Hays?

  It's happening.

• 2:39:20Speaker 11

  Good.

• 2:39:20Jordi Hays?

  Revenue, infrastructure. I love revenue and I love infrastructure.

• 2:39:24John Coogan?

  Yeah, we talked a couple of years ago, but for those who don't know you, please introduce yourself in the company.

• 2:39:32Speaker 11

  I'm Joubin. You guys pronounced my name right, both first and last, which I was impressed by. I am one of the co-founders and the CEO of Roadrunner. Thanks for having me.

• 2:39:41John Coogan?

  Yeah.

• 2:39:42Jordi Hays?

  Great to meet you.

• 2:39:43John Coogan?

  I mean, introduce the product, introduce the problem and sort of explain where you fit into the businesses that you're selling into these days.

• 2:39:52Speaker 11

  Sure. So, the backstory is that we incubated the company at Kleiner Perkins. The reason that we did it was because I run a group of CIOs here that meet twice a year and over the course of several dinners, they basically told me it's the most broken problem inside their company. And I actually didn't believe them because I was like, there's no way this has not been a solved problem. And they were like, no, seriously. And in some cases, it was the number one negative NPS survey software inside of their business. I come from sales, so I've been the consumer of this problem. And I'm like, okay, I understand the problem. So, we did a full market map, looked at every company, ended up not finding anything, and so decided to do it ourselves.

• 2:40:35John Coogan?

  So, you said that the existing solutions were low NPS. Was the market also highly fragmented? That's often like the Keith or Boyd lens that he likes to look at, both low NPS and because if it's low NPS, but there's just one monopolist, it might not be a good business opportunity. But what was that market map? How dense was it?

• 2:40:54Speaker 11

  Yeah, so I think the the mother of all tailwinds for us right now, which is the challenge that every incumbent is going through, is that every 10 years, there's a new CPQ vendor that that that comes alive. And the reason for that is because about every 10 years, there's a new technology shift that happens. We went from software to SaaS. That became a subscription-based billing. Then we went from SaaS to AI. AI is very likely going to be a usage or consumption-based billing. Every time that happens and there's a new pricing pressure that comes on onto a business or a pricing model, you need somebody that can actually price. Like, if you're a rep trying to do a deal, you need to be able to price that deal. If you if the data models with the incumbents were not built to be able to actually price those deals, you're screwed. So every 10 years,

• 2:41:39Speaker 11

  we have a new technology shift. Every 10 years, that puts a bunch of pressure on pricing models. And every 10 years, you need to be able to actually get quotes out the door, leveraging those new pricing models. And so I think in our case, we are the beneficiaries of that.

• 2:41:52John Coogan?

  Who, what is the sales process like? Because you mentioned the CIOs, the Chief Information Officers. They feel like they have an incredible amount of leverage over the the decision of what what platform to use. But then the end user is different. So can you sort of walk through the the actual user journey a little bit?

• 2:42:14Speaker 11

  Yeah, I would say the two primary personas are CIOs, who are the ones that are responsible for delivering software to an organization, and CROs, who are the ones that are responsible for getting deals done inside of an organization. And the underlying software that they're using is just fundamentally broken. So those are like the two people that really matter. The unique thing about this problem is that there's many hands in the cookie jar, which is why it's like a unique problem for a startup to go solve, because you have Deals Desk, and RevOps, and Finance, and Sales, and IT. All of these folks touch this business process. And so it's actually quite difficult both to build, because you have to build for all of these personas, and sell, because you have to get all of these people kind of on

• 2:42:56Speaker 11

  board with you. Even if you can get all of that done, then you have to convince them that running one of their most important production systems onto an early-stage startup makes sense. And so I think that's like kind of the the hill that we that we I guess that we have the honor of climbing.

• 2:43:11Jordi Hays?

  Yeah, just you're like, I'm pretty good at sales. Why don't I sell something that requires buy-in from every part of the organization?

• 2:43:19John Coogan?

  Yeah.

• 2:43:19Jordi Hays?

  No, it's a great, it's a great challenge, but it seemingly will be incredibly sticky once

• 2:43:24John Coogan?

  Yeah.

• 2:43:24Jordi Hays?

  you get everyone bought in.

• 2:43:25John Coogan?

  Where, where is AI good at this out of the box? Where foundation models are open source useful versus like, you gotta go build a harness, or you gotta go write some SaaS on top of it, or get some of your own data and fine tune it? Like, where are we on the frontier of like, this problem being solved end to end by AI?

• 2:43:47Speaker 11

  Yeah, so during the, the Series A fundraiser, the, the hottest question was, why won't Anthropic eat you?

• 2:43:57John Coogan?

  Yeah.

• 2:43:57Speaker 11

  Basically. And my general point of view is if they go after this, we're all screwed. Like, we might as well put all of our money and all of our eggs inside of the Anthropic basket, because this feels like the most esoteric problem that you could possibly go after. I think the, the unique thing about this is, you know, at, at least at KP, we invested early in companies like Windsurf and Harvey, and we saw what happened when you can point these models at structured and unstructured text in nature. And anytime you can do that, the models are very, very good at reasoning with them. And CPQ is a very similar problem. You have price books, approvals, volume-based discounting, all of these rules sit somewhere. And the models are very good at reasoning with them.

• 2:44:38Speaker 11

  The challenge for us, I think, like where our kind of secret sauce is, is that you need to be able to have this agent architecture, call it at the header, that on the Y-axis, you have a bunch of policy engines that are enforcing a probabilistic system through a deterministic engine. That sits on top of a data model that has to be flexible enough for the pricing models of today and in the future. So the combination of those three things is really our secret sauce. And then obviously, I think the problems that many of these kind of bleeding-edge enterprise AI agent companies are running into, is like, how do you get an agent to work predictably with the harness around it, inside of a large enterprise, doing something where if we go down, like, we get sued. Like, you can't get quotes out the door.

• 2:45:20Speaker 11

  And so you can't not get it right. And so I think, you know, in many ways, we are tackling probably one of the more bleeding-edge agent problems in the enterprise.

• 2:45:29John Coogan?

  Yeah.

• 2:45:29Speaker 11

  And that's really where we live is in the enterprise.

• 2:45:31John Coogan?

  Awesome. Tell us about the round. How much did you raise? I want to hit the gong.

• 2:45:35Speaker 11

  We, uh, we raised 27 million and

• 2:45:43Speaker 11

  We announced the seed from KP, 5.2 mil and then 22 million from with founders fundraising and KP doubling down.

• 2:45:51John Coogan?

  Any familial conflicts going on over there? Just kidding. Trey Stevens led the round. Don't worry. He's brothers with a mean. Thank you so much.

• 2:46:01Jordi Hays?

  Oh, I didn't. I didn't even put that together.

• 2:46:02John Coogan?

  Yeah, yeah, yeah.

• 2:46:03Jordi Hays?

  Amazing.

• 2:46:03John Coogan?

  Anyway.

• 2:46:04Jordi Hays?

  Family business. Love it.

• 2:46:05John Coogan?

  Have a good one. We'll talk to you soon.

• 2:46:07Speaker 11

  Thanks, guys.

• 2:46:07John Coogan?

  Goodbye.

• 2:46:07Speaker 11

  Thanks, guys.

• 2:46:08Jordi Hays?

  Talk soon.

• 2:46:10John Coogan?

  Up next, we have Roman Chernin from Nebius. He's the co-founder and chief business officer. If you've been living under a data center.

• 2:46:19Jordi Hays?

  And Nebius is only up 15% today, so we'll ask him.

• 2:46:23John Coogan?

  The AI Cloud Division posted 841% year-over-year revenue growth.

• 2:46:30John Coogan?

  Earnings per share beat expectations significantly. Shares are up, as you mentioned, and the business has been on an absolute tear. And we're excited to be joined by Roman to break it down for us. How are you doing?

• 2:46:43Speaker 12

  Great. Thank you for inviting. I must say that I think three meetings ago.

• 2:46:50John Coogan?

  Yes.

• 2:46:50Speaker 12

  Someone said that I need to take a nap. So don't be surprised that I just fell apart here.

• 2:46:57John Coogan?

  I can imagine you're working nonstop right now. How long have you been working on this? I feel like Nebius is in the news every day, but can you take us back a little bit on your journey with this company?

• 2:47:12Speaker 12

  Yeah, so I'm with Nebius from the very beginning and Nebius officially, in the current shape of the company, exists from summer 2024, so less than two years. But we as a team had experience longer than that.

• 2:47:29John Coogan?

  Yeah.

• 2:47:31Speaker 12

  You maybe know that core team came out from Yandex, which was a large Russian internet company. And yeah, we started with quite a unique mix of talent that helped us to start.

• 2:47:46Speaker 12

  Like really fast.

• 2:47:47John Coogan?

  Yeah. So, I mean, people know Nebius Neo Cloud, but that can mean a lot of things. How are you describing the shape of the business? How are you describing?

• 2:47:57Jordi Hays?

  Before we get into that, what's the other, what's the other spin out? That's also on a tear.

• 2:48:02John Coogan?

  From Yandex?

• 2:48:03Jordi Hays?

  Yandex.

• 2:48:04Speaker 12

  Yeah, you may be no ClickHouse.

• 2:48:06John Coogan?

  ClickHouse, that's right, yeah.

• 2:48:09Jordi Hays?

  Yeah, the talent bench at Yandex seems to have been just like genuinely insane, so.

• 2:48:15John Coogan?

  Yeah.

• 2:48:16Speaker 12

  Yeah, you can find a lot of other startups that, or companies that created with Xyandex people. But, yeah, not really.

• 2:48:32Speaker 12

  Talking about how we describe our business, I don't really like the word new cloud because I think it's too broad definition of too many companies that do different things. Like someone is doing just really data center business. Someone is doing data center plus renting out hardware. Someone don't own hardware and do kind of marketplace play.

• 2:48:59Speaker 12

  We like to say about us that we built vertically integrated full stack AI specialized cloud, AI specialized cloud. So that's, that's what we think we do. And I think that the difference of like Neo Cloud or Bremetal Compute and Cloud is quite significant because it's completely different developer experience, right? So if you need to come and rent a large cluster and wait like six months it to be delivered and then sign it for three years and run it, probably it's not really real cloud experience, right? In the cloud, you expect more flexibility, faster time to value, more tools that you

• 2:49:43Speaker 12

  can use as a developer, more layers of the value. So.

• 2:49:46John Coogan?

  How do you think about lagging edge model inference like load over time? Because a new model comes out, there's an incredible amount of hype. Everyone's looking at benchmarks and testing it. And then at a certain point, open source catches up, different models sort of commoditized. But if you're an enterprise and you found that, you know, GPT-4 is great for scanning your receipts or something, you might leave that capability, that functionality, running forever and you might never need to deploy a smarter model against that problem.

• 2:50:26John Coogan?

  And I'm wondering, as we see, you know, skyrocketing frontier revenues, lots of, you know, debate over token maxing versus, you know, incredible results on the profitability side. How are you, how are you trying to understand what's happening with those workloads that have been sort of baked into the economy already? Like the, the AI diffusion story is, is done because that capability has, has been adopted fully?

• 2:50:55Speaker 12

  Yeah, so I think there are, as we see a few trends, let's say. So first, as you said, open source models are catching up different tier models quite, quite fast, probably. I mean, I think that like there is three, six months gap like that we see for the most of the tasks. And we see that a lot of people, a lot of customers, when they come to the scale, they so the journey is you start with a frontier model, you, you want to have the best capabilities to unlock the use case, to see the things working, to start growing. But then when you grow, you may meet the limitations.

• 2:51:39Speaker 12

  And first of all, in economics, because at scale, you, the economics, the economics matter. And then if you have other capabilities from open source models that can deliver in a particular use case that you already understand.

• 2:51:55Speaker 12

  Like same or close to same uh performance and quality for times uh lower cost uh you need you you actually switching and it's not easy to switch because you need to look those models. Nobody uses obviously vanilla models. You need to rel like you need to figure out your data and so on and so forth. But again, if you scaled, you you you have a lot of value there. And then what you need from infrastructure where we believe that like our value is created is to help you with that, to lower the barrier

• 2:52:34Speaker 12

  to A tune those models and then B run those models reliable and cost efficient. And that's like the layer uh the next layers of the offering that they're building.

• 2:52:46John Coogan?

  As you look out over the next couple of years or even a decade in the future, which sounds like an infinite amount of time, uh but but on on the near and midterm, how are you thinking about semiconductor bottlenecks versus energy bottlenecks? So we've been going back and forth on this. Both are in short supply. What's keeping you up at night?

• 2:53:09Speaker 12

  I'm a lucky person. I'm more on the product and demand side and it's a lot of fun. So I I really I

• 2:53:20Jordi Hays?

  Yeah, being the being the demand guy during the explosion, uh demand has got to be great.

• 2:53:26Speaker 12

  Yeah, the best worker. Yeah, the best worker in the world. Yeah. So people hug you and uh but uh but no, I I think that now uh obviously the physical kind of the physical infrastructure, the the even not the energy itself, but like getting from

• 2:53:48Speaker 12

  Greenfield to having data center that works and full of GPUs is actually the big uh the big the big challenge and I I like the the bottlenecks are like along the all the supply chain starting from whatever connecting to the grid or bringing local generation and all the way to like even human power and all the all the complexity. So uh I really kind of take my head off uh from like uh in front of the people who uh who who are bringing those like gigawatt capacity online and that's challenging work.

• 2:54:29Jordi Hays?

  Can you uh how do you there there's such overwhelming uh overwhelming demand and just energy to bring compute online. How do you measure yourself and the team's performance? How do you know whether or not you're doing a truly great job, right? Because people are so desperate that that they'll they'll work with uh like a third tier supplier just because it's their only option. Uh you guys have shown, you know, tremendous capability. Um and so but but but then again, it's like, how do you know if you're actually doing an exceptional job?

• 2:55:08Speaker 12

  It's a good question. Uh I I think the race is uh is so that you never know are you good enough or not. So you look like, oh, you're growing like whatever, you're growing like seven times a year or so. Uh uh is it good enough? Like in any normal business, yes, probably it's excellent growth and you meet your customer and they say, oh, you know what? I grew seven times in the last four months. And you're like, okay, probably probably we need to move faster.

• 2:55:39Jordi Hays?

  I gotta grind harder.

• 2:55:40Speaker 12

  Uh yeah, yeah. And but you you there is another component that I I think is uh people speak less about, which is how you finance all that. So uh.

• 2:55:57Speaker 12

  You ask about like the bottlenecks in the chips, you ask about like the bottleneck to bring uh physical infrastructure online, but then uh uh there is another part uh you need to finance all that. So I think that now if you would have unlimited capital, we would be able to on technical execution, on operational execution, we could even move faster. So there are like, there are so many components in this business of the infrastructure uh that you need to do efficient, like and fund like financing uh uh like finance enough and finance smart to not eat all your margins. It's it's a part of the uh of the science here.

• 2:56:44Jordi Hays?

  Uh what is a job at Nebius that is a sort of the unsung hero of the business?

• 2:56:53Jordi Hays?

  Besides, besides you. But we're singing for you.

• 2:56:56Speaker 12

  No.

• 2:56:58John Coogan?

  He gets sung for all the customers.

• 2:57:00Jordi Hays?

  They're hugging, they're hugging you, you said.

• 2:57:02Speaker 12

  Yeah, yeah, like.

• 2:57:04Jordi Hays?

  But but is it like somebody that's like, yeah, boots, boots on the ground?

• 2:57:08Speaker 12

  Yeah, no, I I think that uh our business is very much like, like at any cloud business, to be honest, it's post-sales, uh it's post-sales business. So like when you sell, you give a promise, people hug you that you allocated capacity to them and like they had to start working with you and so on. Uh but then how you make sure that the customers are happy and things are working and again, everything is moving so fast. We we've got new chips every three months, we got new physical data centers every month, we got new customers that of the scale that we never saw before every month and the workloads are changing so fast. And I think

• 2:57:55Speaker 12

  It's not like one role, I think, that underappreciated, but in general, uh, uh, delivery in this, uh, uh, and I started with that. It's execution business. It's, it's, it's, it's not, not that it's not, it's, it's, it's, it's, it's less magic. It's a lot of, a lot of boring execution on each layer, starting from finance, like physical infrastructure, software, uh, customer kind of facing engineering support, like every piece, and then only magically, everything comes together,

• 2:58:34Speaker 12

  from supply chain to customer facing, uh, person that, uh, um, make sure they don't waste their money with us, uh, then, then, then, then things start working. So, yeah, I think delivery is the key. Uh, delivery chain is, is the key in this business. Post-sales.

• 2:58:56John Coogan?

  Last question, uh, can you talk about some of the recent acquisitions and talent moves at Nebius? I'd love to know the philosophy and, uh, and, uh, strategy there.

• 2:59:05Speaker 12

  Yeah.

• 2:59:08Speaker 12

  Uh, this, the philosophy is very simple. We need to build so many things that we need to move, and we need to move it so fast that we're always looking for people who can accelerate us. And it's, uh, it should be exceptional talent and it should, and/or it should be, uh, uh, something that, uh, had a great adoption. Our two recent acquisitions that we announced just like with the two, two weeks, both, uh, uh, two teams that, so two teams that work on, uh, inference optimization. So you can think, uh, again, our part of, big part of our business is how efficiently

• 2:59:48Speaker 12

  can we convert GPUs into tokens and like, uh, value for, for the customers? And these are two teams, one of them, uh, Eigen AI, another Clarify AI. Uh, one is very much focused on model optimization, like to.

• 3:00:05Speaker 12

  The engine of inference, how how you run specific model and all the techniques around spec decoding quantization and so on. And another is more like system optimization, all the routing, key caching, orchestration across the big cluster of compute and so on. And we had a very strong internal team also working on inference, but we felt that we need to move fast, like we need to move faster, we need to bring more capabilities there because the market is so fast that every every three months you can lose the like so so big pie, so big piece of the pie.

• 3:00:48John Coogan?

  And it's going to show up in your in your margins and your earnings, obviously, which are important now. If you if you don't if you unoptimize chips, you're not going to get the yields that you want, the results and the tokenomics are going to flip.

• 3:01:00Speaker 12

  Yeah, that's true. And also what's important that it unlocks the new types of the customers, the new types of the workloads that we can serve, like not just against our raw compute, but serve all this fast-growing vertically AI companies and enterprise adoption.

• 3:01:15John Coogan?

  Yeah, that makes a ton of sense. Well, thank you so much for taking the time to join us on a busy day.

• 3:01:21Jordi Hays?

  Yeah, you're gonna get some sleep or you you'll be asleep in a few years.

• 3:01:27Speaker 12

  I will take a nap now.

• 3:01:29Jordi Hays?

  Fantastic. Just a nap. It's I know you're you're you're across the pond, right? So you should be just going to sleep for eight hours, but he said.

• 3:01:37John Coogan?

  Nap. I love it. Well, thank you so much for coming on the show, Roman. We'll talk to you soon. Have a good one. Goodbye. The last post I want to talk about today is about video games, of course. There's an individual who beat, is this a Dark Souls boss or but they built a controller that uses their full body. It's not a VR game. It's not a VR simulation, but if you want to attack, you strike the dummy with a physical stick and that presses

• 3:02:16John Coogan?

  the button in the game to trigger your character to attack in the game. And then it appears that he's playing on a green screen or something because you can see the game actually playing behind him and he also is wearing glasses of some sort. You don't like this. What's not to like? You need to get a workout while you're gaming. The future of gaming very well, might very well produce some of the fittest people. Yeah.

• 3:02:43Jordi Hays?

  I don't like the aesthetics of, of, of this.

• 3:02:46John Coogan?

  You don't?

• 3:02:47Jordi Hays?

  Uh, not at all.

• 3:02:48John Coogan?

  You think you should, you're more in the-

• 3:02:49Jordi Hays?

  But I shouldn't knock it till we try it.

• 3:02:51John Coogan?

  You're more, you're more a fan of-

• 3:02:53Jordi Hays?

  I've seen it, let's get, let's get around-

• 3:02:54John Coogan?

  You're more a fan of, of unironic LARPing. Like, live-action role-playing, where you get the, like, uh, the SD Kid concert. You, you're a fan of that. Put on the actual armor.

• 3:03:04Jordi Hays?

  Yeah.

• 3:03:04John Coogan?

  Do the real battle.

• 3:03:05Jordi Hays?

  Yes.

• 3:03:06John Coogan?

  Don't play the video game version of that, that's a poor simulacrum.

• 3:03:09Jordi Hays?

  Yeah, hit the park.

• 3:03:10John Coogan?

  Yeah.

• 3:03:11Jordi Hays?

  Hit the park.

• 3:03:11John Coogan?

  Or find a multiplayer version of that, just get another human to sit in next to you and you can learn defense.

• 3:03:18Jordi Hays?

  Uh, before we go-

• 3:03:19John Coogan?

  What?

• 3:03:20Jordi Hays?

  There's some, there's more of a scuffle on the timeline around Meet, the Meet GC campaign.

• 3:03:25John Coogan?

  Okay, what's-

• 3:03:25Jordi Hays?

  I've realized why Mark is taking shots at it, and it's because I think they use an actor to try to look like him. Let's watch it again.

• 3:03:33John Coogan?

  Oh, really? Interesting. I did notice that the actor that plays the, uh, the General Catalyst character is, like, over-the-top handsome in the sense that, like, the original Apple, Mac, and PC ad, uh, Justin Long, he's sort of like an everyman, and, uh, and the, uh, and the chara, and, and, uh, the actor who's playing the General Catalyst guy looks like a male model to me. I don't know. You, you can be the judge of it, but-

• 3:04:03Jordi Hays?

  Yeah, all, all I'm, all I'm saying is I think, uh, I think we got a Drake Kendrick situation on our hands.

• 3:04:08John Coogan?

  Brewing.

• 3:04:09Jordi Hays?

  I think the new media team at Andreessen needs to respond. They need to try to dunk on, uh-

• 3:04:14John Coogan?

  General Catalyst?

• 3:04:15Jordi Hays?

  GC.

• 3:04:15John Coogan?

  Okay.

• 3:04:16Jordi Hays?

  I wanna see a war.

• 3:04:17John Coogan?

  Yeah.

• 3:04:17Jordi Hays?

  I wanna see, uh, it should be a bloodbath. Um, anyways-

• 3:04:21John Coogan?

  Demanding acrimony in the tech industry, sowing dissent.

• 3:04:24Jordi Hays?

  Yeah, no, no, they, they need to get revenge.

• 3:04:26John Coogan?

  What about peace? What about peace?

• 3:04:27Jordi Hays?

  They need to get revenge. Mark says this is a clear inversion, clever inversion of the original Mac vs PC commercials. This time, and clearly intended to make the sponsor appear smarmy and judgmental. Fascinating, so-

• 3:04:37John Coogan?

  You got rage baited. They rage baited you. Uh, you could've just muted this, you could've blocked them, you could've not amplified it, now it's on everyone's timeline.

• 3:04:45Jordi Hays?

  Now, it's war now.

• 3:04:46John Coogan?

  Because of this?

• 3:04:47Jordi Hays?

  We're gonna get a VC content rap now.

• 3:04:50John Coogan?

  No one would know what General Catalyst is until now. Now there's a fight and it's working, no.

• 3:04:57John Coogan?

  It is entertaining though.

• 3:04:58Jordi Hays?

  Very fun. Well, Duke it out. Duke it out.

• 3:05:01John Coogan?

  Good campaign.

• 3:05:01Jordi Hays?

  It's time.

• 3:05:02John Coogan?

  I, I do, I do.

• 3:05:03Jordi Hays?

  Eric Torreberg, Reggie James.

• 3:05:05John Coogan?

  First, oh yeah, that's a matchup there. It is just, I, I, I mean, to, to, you know, put aside the, the war. It is just interesting seeing a produced 30 second, 60 second ad for a venture capital firm. It is sort of a first. I can't think of another.

• 3:05:23Jordi Hays?

  See a, a non-vibril.

• 3:05:25John Coogan?

  Yeah. The vibrio meta, that was sort of played. So we got, we got to go a different direction.

• 3:05:32Speaker 13

  And we're going to TV ads. We're going to television bowl, 30 seconds, highly produced ads running on the Super Bowl on Saturday and live. I don't know when would you see advertisers?

• 3:05:47John Coogan?

  Torreberg, CNBC. I don't know.

• 3:05:49Jordi Hays?

  We got to get on with London.

• 3:05:52John Coogan?

  Yes.

• 3:05:52Jordi Hays?

  So we will see you tomorrow.

• 3:05:53John Coogan?

  Leave us five stars on Apple Podcasts and Spotify. Sign up for the newsletter at tbfn.com and we will see you tomorrow at 11, at 11 a.m. Pacific sharp.

• 3:06:00Jordi Hays?

  We love you.

• 3:06:01John Coogan?

  Goodbye.

• 3:06:01Jordi Hays?

  Goodbye.