Weekly Recap | Elon's Starship Explodes, OpenAI's Defense Contract, Nvidia's Robots, We Test Cluely

(00:00) - Intro (00:03) - Elon Musk's Starship Explodes (02:37) - Meta x Oakley (03:56) - OpenAI Wins Defense Contract (04:44) - Meta Puts Ads on WhatsApp (05:33) - Intern Tests Cluely (18:44) - Roy Lee (Cluely) (33:54) - Lakers Sold for $10 Billion (39:40) - Surge AI Beats Scale AI (51:24) - Spotify CEO Invests in Drones (55:41) - Katie Haun (Haun Ventures) (01:14:47) - Justine Moore (a16z) (01:39:44) - Nvidia Drops Humanoid Robots (01:45:09) - George Hotz (comma.ai) TBPN.com is made possible by: Ramp - https://ramp.com Figma - https://figma.com Vanta - https://vanta.com Linear - https://linear.app Eight Sleep - https://eightsleep.com/tbpn Wander - https://wander.com/tbpn Public - https://public.com AdQuick - https://adquick.com Bezel - https://getbezel.com Numeral - https://www.numeralhq.com Polymarket - https://polymarket.com Attio - https://attio.com Follow TBPN: https://TBPN.com https://x.com/tbpn https://open.spotify.com/show/2L6WMqY3GUPCGBD0dX6p00?si=674252d53acf4231 https://podcasts.apple.com/us/podcast/technology-brothers/id1772360235 https://youtube.com/@technologybrotherspod?si=lpk53xTE9WBEcIjV

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

• 0:00Jordi Hays?

  You're watching TVPN.

• 0:03John Coogan?

  The Starship exploded during a test in Texas, a setback for Mars is Mars, for Musk's Mars ambitions. Now, the Mars transfer window is very, very tight. Like, you can only get from the Earth to Mars like once every 18 months or something, maybe even more. It's really hard because like if the planets are on the opposite side of the solar system, like you just can't, even though you have a rocket, you just can't get over there. So you have to wait until they're lined up and then you can do it.

• 0:31Jordi Hays?

  Realistically, skill issue.

• 0:33John Coogan?

  Realistically, true, skill issue. If you build an even faster rocket, you could get there no matter what. You just pilot, steer it around like it's a GT3RS around the Nürburgring, no problem. So the explosion occurred during a static fire test. No injuries were reported. Thank goodness, we love autonomy, very, very happy to hear that no one was injured during this because it looked horrific. And it looked like in any other scenario, there would be a bunch of technicians there, but fortunately they were able to do everything remotely, which is great.

• 1:01John Coogan?

  And then Starship faces pressure to meet deadlines for NASA's moon mission and Mars exploration. So there's a big, there's a big NASA moon contract that's very important, very material to the business. Obviously SpaceX has a lot of other business lines, but this one's very, very important too. And it's, and we hope that they can get back on track. SpaceX is making an enormous bet on Starship, which stands roughly 400 feet tall at liftoff as it tries to break ground with new reusable rockets. And the, the paradigm of Starship, it's not just a bigger rocket, it is way more reusable. Like you look at the thing, it comes down, gets caught by those arms, can instantly be refueled and sent back up. You're talking about potentially like multiple flights per day.

• 1:45John Coogan?

  And so the problem here is not can you build a big rocket? Humanity has done that before. Humanity's built a rocket that's roughly on par. We've gotten to the moon before. The challenge now is not can we get to the moon? It's the same thing with like, the challenge is not can we build a flying car? Or can we build, we have helicopters? Can we build one humanoid robot or one self-driving car in San Francisco? It's like, can we actually scale these systems to the point that it is safe to go to the moon and back on the drop of a hat for 200 bucks? Like, that's the challenge. It's more of an economic and industrial might challenge. And that's a completely different challenge from just can we get one rocket to the moon? An exquisite system? We're looking for reusable, scalable, you know, engineering system.

• 2:29John Coogan?

  So, so good luck to Elon rebuilding and the entire SpaceX team. I'm sure it's a huge challenge right now. Meta Oakleys are coming. This, Sheil says, this makes sense. Luxottica owns both Oakley and Ray-Ban. And Meta is reportedly investing $5 billion for a 4% stake. Luxottica is a fascinating business story. The founder, Leo Del Vecchio's family still owns one-third. The guy was an orphan who became a metalworker, making parts for glasses, ultimately becoming the largest listed company in Italy.

• 3:02Jordi Hays?

  It is really interesting to think about how if Meta can basically corner all of the most iconic, all of the most iconic frames, which they can do through Luxottica. If they do figure out some type of exclusive over time through that investment.

• 3:21John Coogan?

  Does Luxottica just own all the major brands?

• 3:23Jordi Hays?

  They basically own everything. Yeah, everything. Every time you buy sunglasses, you think you're buying, you know, some unique brand heritage. Luxottica.

• 3:31John Coogan?

  It's interesting. We should, we should dig more into that company because they don't own all the retail.

• 3:37Jordi Hays?

  Well, yeah.

• 3:37John Coogan?

  There's a lot of like sunglass hut retail stuff.

• 3:39Jordi Hays?

  I mean, they are big glasses and that created the opportunity for Warby Parker.

• 3:44John Coogan?

  Yep.

• 3:44Jordi Hays?

  Because they realized, you know, basically this entire, you know, Luxottica could verticalize from brand to production to the actual medical side as well.

• 3:54John Coogan?

  Interesting. Also, some good news in OpenAI world, even though they're they're going through the some battles with Microsoft, they scored a $200 million US defense contract.

• 4:04Jordi Hays?

  So they're working with the DOD. The most unhinged picture.

• 4:08John Coogan?

  I know. How did this photo shoot happen? Like, this does it. This looks like he's about to go on stage and he has a lav mic and it's from a low angle, but like, what lighting scenario created this photo? It's amazing, but it's very aggressive. Anyway, great selection by Nick.

• 4:25Jordi Hays?

  Not beating the, you know,

• 4:27John Coogan?

  Arms dealer.

• 4:28Jordi Hays?

  Evil tech arms dealer allegations with this picture.

• 4:31John Coogan?

  Yeah, if you're if you're founder, you got to be careful how the angles people photograph. But at a certain point, if you're on stage, they're going to take photos in any direction. But, uh, yeah. And if they take enough photos, they'll get every single expression. So get ready. Uh, other news, Meta finally put ads into WhatsApp. Uh, in January 2012, they said, we don't sell ads, which is still live. But this is why we love them and this is why it's undefeated. WhatsApp should have ads.

• 5:00Jordi Hays?

  The backbone of the internet.

• 5:01John Coogan?

  It's the backbone of the internet. Uh, and, uh, um, Signal says that's why he's an Apple fanboy because they don't do ads.

• 5:08Jordi Hays?

  Well, I'm just glad, I'm glad. I bet you this is just them listening to their users. I bet, you know, the users, you know, all over the globe said, you know, the only thing that could make WhatsApp better is just putting some ads in this bad boy. It's the one place I go that I don't get any.

• 5:23John Coogan?

  This was already happening. I felt like this leaked like five years ago.

• 5:26Jordi Hays?

  How much it was a $20 billion acquisition? Of course they were going to put some ads in at some point.

• 5:30John Coogan?

  Senator, we sell ads.

• 5:33Jordi Hays?

  Take it over to Tyler.

• 5:34John Coogan?

  How you doing over there?

• 5:35Speaker 02

  What's up, guys? In the back of the Maybach. It's pretty chill back here.

• 5:40Jordi Hays?

  You got a little desk set up?

• 5:41John Coogan?

  Yeah.

• 5:42Jordi Hays?

  Got wifi?

• 5:43John Coogan?

  And so today, the the big news that we're having him dig into is Cluely.

• 5:48Jordi Hays?

  Yep.

• 5:48John Coogan?

  Uh, they are, okay, something happening there potentially. But we got some flack for talking to Roy and not actually using the app. We're still above using the app, but we will let our intern use the app.

• 6:04Jordi Hays?

  It's more that we don't have time.

• 6:05John Coogan?

  Yeah.

• 6:05Jordi Hays?

  We're too busy podcasting, but Tyler has time.

• 6:09John Coogan?

  Not doing a lot.

• 6:09Jordi Hays?

  Many people are starting to call after his windsurf review. People are starting to call him the MK BHD of enterprise software.

• 6:16John Coogan?

  Yeah, but people have been saying that.

• 6:17Jordi Hays?

  And so, um, so yeah, today he's going to be trying out Cluely. We're going to be helping you to see how, how easily he can cheat on some hard hitting questions that we're going to be asking him. So.

• 6:28John Coogan?

  So state of affairs, Tyler, where are we on the Cluely install so far? Have you paid for it? What's the experience been like so far?

• 6:35Speaker 02

  Yeah, I mean, I'm ready to go.

• 6:37John Coogan?

  Oh, really?

• 6:37Speaker 02

  Whenever. Um, I, I played around with it for maybe like two minutes just to make sure it was working.

• 6:42John Coogan?

  Okay.

• 6:42Speaker 02

  So I want to get my live reaction when we start.

• 6:45Jordi Hays?

  Okay, well, spin it up, pay for it.

• 6:48John Coogan?

  Yes.

• 6:48Jordi Hays?

  Let's get on the top tier.

• 6:51John Coogan?

  Are there multiple tiers?

• 6:52Jordi Hays?

  And we'll check back in a little bit.

• 6:54John Coogan?

  Yeah, yeah, we're going to be peppering you with questions that only Cluely could answer.

• 6:58Jordi Hays?

  Yep.

• 6:59John Coogan?

  What's the popular, but what's the population of Iran? Go.

• 7:02Jordi Hays?

  Go.

• 7:03Speaker 02

  Eighty-nine million, eighty-two?

• 7:05John Coogan?

  Eighty-nine?

• 7:06Speaker 02

  I don't have it running right now.

• 7:07John Coogan?

  You gotta have it running. You failed. You failed your technical interview.

• 7:09Jordi Hays?

  You failed the first test. Well, get it, uh, get it fixed and we'll circle back in a bit.

• 7:14John Coogan?

  Get it to, uh.

• 7:15Jordi Hays?

  Get it together.

• 7:16John Coogan?

  Guess a question, uh, guess a number between one fifty randomly. We're going to quiz Tyler now if he's ready. Is he good to go?

• 7:23Jordi Hays?

  He's ready. I got a thumbs up.

• 7:24John Coogan?

  Uh, I want to ask, uh, how much money, uh, has been invested in Shenzhen? I'm trying to talk into the mic, but not.

• 7:36Jordi Hays?

  Not give it all away.

• 7:37John Coogan?

  Yeah, yeah. Okay. So I am looking this up. Oh no, I used O3 Pro, so it's going to be 12 minutes.

• 7:44John Coogan?

  Okay, new, new, new tab. I will have to use 4O for this because I need a quick, uh. So he's investing one trillion, right? To compete with China's Shenzhen manufacturing hub. I want to know how close that gets us.

• 8:00John Coogan?

  Wait, this is weird. I don't know. Uh, one of the nine billion, more than 25 billion. This does not seem right.

• 8:09Jordi Hays?

  I have some, I have some various stats here. I think it's gonna be pretty hard to pin down the exact.

• 8:15John Coogan?

  We need to quiz Tyler on this question.

• 8:19Jordi Hays?

  Tyler, over since 1980s, how much foreign direct investment has there been in Shenzhen?

• 8:30Speaker 03

  Let me think here. I would say since 1980, over 100 billion. Estimates range from 100 billion to 150 billion.

• 8:43Speaker 03

  And Shenzhen is a major global manufacturing and tech hub.

• 8:47John Coogan?

  Wow, you're so smart.

• 8:50Jordi Hays?

  It's actually kind of pulls it off. Pretty close. I mean, I think that the challenge is actually, there's so many ways you could kind of measure this, right? I have a table. So there's about 100 billion of local funds. There was a state and AI robotics fund announced this year. There was a, there was another semiconductor industry fund announced this year. There was, up until 2014, there was 65 billion of cumulative foreign direct investment. But, but who knows? And then, and then run rating, you know, I guess around 10 billion. But also, like, does this count what Apple is doing? Right? That's like another, you know, form of investment.

• 9:34Jordi Hays?

  Anyways, this might be an answer that clearly, I guess, got pretty close.

• 9:39John Coogan?

  It was pretty good. I thought it was good. I have a follow up. So, you know, the iPhones made over in China often flown via 747 to America faster than shipping on a cargo ship. How many iPhones fit inside of a 747?

• 10:00Speaker 03

  All right, let me think here. I'm gonna say, I would say about two to three million in a 747.

• 10:09Speaker 03

  You know, so, okay, so 747 max payload is about 140,000 kilograms.

• 10:15John Coogan?

  Okay.

• 10:15Speaker 03

  Each iPhone box is about half a kilogram.

• 10:18John Coogan?

  Okay.

• 10:18Speaker 03

  So I would say, you know, a practical range of iPhones is probably 1.5 to 2.5 per flight. But obviously, it depends on, you know, packaging, pallets, cargo layout, you know.

• 10:30John Coogan?

  That's pretty good. I mean, ChatGPT here has 9.6 million, but I think that's including like every inch of the plane, including like the passenger portion. I think that's more accurate, actually. I think that might be more accurate.

• 10:44Jordi Hays?

  Is clearly goaded?

• 10:49Jordi Hays?

  We'll have to ask Roy, who's coming on the show later today.

• 10:53John Coogan?

  Yeah, this is, so, so, so, yeah, the ChatGPT estimate had the usable internal volume as passenger plus cargo. And I, it feels like he used just the cargo number. Is that correct?

• 11:04Speaker 03

  I believe, yes. I think so. I see ChatGPT estimate 9.6 million.

• 11:12John Coogan?

  Oh, it's streaming through?

• 11:14Speaker 03

  Yeah, yeah. So I was doing just the cargo.

• 11:20John Coogan?

  This is fantastic. It actually works pretty well. I'm impressed so far.

• 11:24Jordi Hays?

  This is basically young, young Jamie from Joe Rogan.

• 11:27John Coogan?

  Yeah.

• 11:27Jordi Hays?

  Except you don't even have to look anything up. We just get to ask you live.

• 11:31John Coogan?

  Yeah, this is great. Andre Karpathy chimes in. He says, very interesting to think about. Job equals bundle of tasks plus glue. Probably a bunch of other variables involved, e.g. the number of tasks, how long each task is, e.g. meta-like notion of task length roughly equals difficulty, how contextual it is, how high, how high reliability it needs, whether it can be done fully digitally. Not sure what the state of the art is in trying to think this through and chart the impact of AI on labor markets so far. E.g. I was curious to look for radiologists, and if I'm getting this right, the U.S. Bureau of Labor Statistics cites 29,530 U.S. radiologists in 2021, and then up to, and let's go to Tyler.

• 12:16John Coogan?

  How many radiologists does the U.S. Bureau of Labor Statistics claim there have been in 2023?

• 12:25Jordi Hays?

  Uh, okay. Come back to me in thirty seconds.

• 12:29John Coogan?

  Okay.

• 12:31Jordi Hays?

  We'll be back.

• 12:32John Coogan?

  I think he's actually, I think he's working. And so when I just, when I just hit him with random questions, not quite.

• 12:37Jordi Hays?

  He's not in the Zoom, so Cluely's not running.

• 12:40John Coogan?

  Oh, okay. Okay. He's not in the Zoom. Okay. Well, yeah.

• 12:42Jordi Hays?

  That was your first mistake, Tyler.

• 12:44John Coogan?

  Yeah.

• 12:44Jordi Hays?

  Always keep Cluely on.

• 12:46John Coogan?

  Always keep Cluely on. Does Cluely have the ability to, to just prompt it directly? Or, or, or do you have to be on a Zoom?

• 12:54Speaker 02

  No, you don't have to be on Zoom. You can do it on, so on the website, you can just prompt it. It looks like almost just like the ChatGPT interface.

• 13:00John Coogan?

  Sure.

• 13:00Speaker 02

  But you can also just pull audio like, um, just from in person. Like if I was sitting across from you, it'd be fine. I'm not sure to be able to hear you from in the car.

• 13:09John Coogan?

  Yeah, yeah, yeah.

• 13:09Speaker 02

  But yeah, I'll get back on the Zoom.

• 13:12John Coogan?

  Okay. Well, we'll come back to you with that.

• 13:15Jordi Hays?

  The audience will have to wait to find out how many radiologists we have.

• 13:19John Coogan?

  Everyone's waiting with bated breath. Everyone wants to know. Um, well, let's tell you about Linear. Linear is a purpose-built tool for planning and building products. Meet the streamline, meet the system for modern software development, streamline issues, projects and product roadmaps. Uh, if you're building Cluely, get on Linear. Uh, Nikki DeBeere, built a lot of products.

• 13:38Jordi Hays?

  Customer list looks like a tier one venture firm's portfolio page. Got Ramp, OpenAI, Cursor, Runway, Perplexity.

• 13:49John Coogan?

  I normally make the joke of like the next, oh, when we talk to Sam Allman, we're going to pitch him Linear, but it's like, oh, too late. Wow, Boom is on there too. That's cool. Uh, I, I always make jokes about like using Linear for other stuff and you're like, no, it's just for software. And look at Boom. They're using it for everything. It's fantastic.

• 14:06Jordi Hays?

  Yeah.

• 14:07John Coogan?

  Uh, anyway, let's, uh.

• 14:08Jordi Hays?

  Tyler, what do you got?

• 14:09John Coogan?

  Uh, the question is.

• 14:10Jordi Hays?

  Radiologist expert. We're interviewing you for a job as a data analyst, you know, covering radiology.

• 14:16John Coogan?

  Yes. So the question is, how many, uh, how many radiologists does the US Bureau of Labor Statistics claim exist in the United States in 2023?

• 14:30Speaker 02

  Hmm. Let me think about this.

• 14:33John Coogan?

  I'm noticing a tell.

• 14:34Speaker 02

  I'm gonna estimate maybe thirty one to thirty four thousand.

• 14:38John Coogan?

  Wow, really good.

• 14:40Speaker 02

  At least from twenty twenty three, I would say. But yeah, that's my best guess.

• 14:45John Coogan?

  If you best guess, it's thirty one thousand nine hundred and sixty. I think you got the job.

• 14:52Jordi Hays?

  Oh, wow.

• 14:54Speaker 02

  Might be goaded.

• 14:55Jordi Hays?

  Bluey.

• 14:56John Coogan?

  Okay, I have another question for you. Pop quiz. Off the top of your head, what's the GDP of India?

• 15:04Speaker 02

  Off the top of my head, let's see. I'm gonna say three point seven trillion.

• 15:10John Coogan?

  Well, it's really, it really sells it that you that you're touching your face. So I can tell that your hands aren't on the keyboard.

• 15:16Speaker 02

  You can tell that I'm thinking, yeah.

• 15:17John Coogan?

  Yeah, you're you're just thinking about it. Yeah, you gotta be a good actor. But maybe that's why Cluely is so focused on the social media influencers because they have a little bit of acting in them. And so they're able to, hmm, this is gonna be the modern tell.

• 15:31Jordi Hays?

  No, it's good. You're either you're a great actor and Cluely might actually.

• 15:35John Coogan?

  Or maybe he's not using Cluely and he just knows all this stuff off the top of his head.

• 15:38Jordi Hays?

  It's very possible. Tyler needs to use Cluely to figure.

• 15:42Speaker 02

  I'm on, I'm on.

• 15:43John Coogan?

  Oh, I think we got a feedback loop here. Can I hear you? How much is the high sense hundred inch TV cost? High sense?

• 15:52Speaker 02

  Um, let me think. I'm gonna say typically, I would say around three to five thousand dollars. Obviously, price varies by region and model.

• 16:03John Coogan?

  This sounds so natural. This sounds so natural. Hundred inch. Yeah, yeah, I think Apple should do it.

• 16:13Jordi Hays?

  Do it.

• 16:14John Coogan?

  It'd be great.

• 16:15Jordi Hays?

  Tim, do it.

• 16:16John Coogan?

  Hundred inches would be a good, a good, like, you know, differentiator too, because a lot of brands, you know, fifty five, sixty five, seventy five, it's gotten all confusing. Who is just like, you know, if you're going with Apple, you're getting a hundred inch TV.

• 16:26Jordi Hays?

  Yeah.

• 16:27John Coogan?

  And it's like, and it's just amazing, amazing quality. The intern cam's still active. I want to go to Tyler for one last pop quiz. Oh, is he on? Okay, I wanted to ask you. Yeah, what's the capital of Michigan?

• 16:41John Coogan?

  Didn't you go to school there?

• 16:44Speaker 02

  I think it's Lansing.

• 16:47John Coogan?

  I think you're maybe leaning on Clueley too much at this point.

• 16:50Jordi Hays?

  I don't know. I don't know if you're cheating using your brain, or I can't really assess the product. You know, you have too much domain knowledge on Michigan.

• 16:57John Coogan?

  Uh, what's your name?

• 17:00Speaker 02

  My name? Um, let me think here.

• 17:05Speaker 02

  It's like that paper that just came out, right?

• 17:08John Coogan?

  Oh, yeah, yeah, yeah, yeah. Do you think that, uh, based on your use of Clueley, do you think it'll make you smarter? Or do you think, uh, uh, you'll take your foot off the gas?

• 17:17Speaker 02

  Uh, I mean, I was thinking, let me think about that, actually. Um, I, I think probably the latter, honestly. I mean, it's just like, I just don't need to think. I don't need to store any knowledge in my brain now. So maybe it frees me up to do more, you know, reasoning tasks.

• 17:30John Coogan?

  Okay.

• 17:31Speaker 02

  But even then, you know, once they get O3 in here, it's really like everything's covered. So.

• 17:35Jordi Hays?

  No reasoning necessary.

• 17:36John Coogan?

  Did you get a feeling for what model was under the hood?

• 17:40Speaker 02

  Uh, I don't know. I think I could probably check, uh, but I'm not sure right now.

• 17:46John Coogan?

  It's so weird interacting with somebody using Clueley. Like, like every answer is like, um, and then you don't know if they're reading Clueley or not.

• 17:54Jordi Hays?

  Or just actually thinking. Well, anyways, uh, people should go try the product.

• 17:57John Coogan?

  Yeah.

• 17:58Jordi Hays?

  You know, I really, I really think that anytime Roy gets a negative comment, yeah, please just, you know, use the product for five, five plus hours. And then you can have an opinion.

• 18:07John Coogan?

  The, the message to Andreessen, no crying in the casino. Because you know Roy Lee, there's probably a viral video of him going to the casino soon.

• 18:15Jordi Hays?

  Pretty soon.

• 18:16John Coogan?

  You know, that's going to make a lot of people angry and so.

• 18:18Jordi Hays?

  Chamath is talking about spacking again.

• 18:21John Coogan?

  Yeah.

• 18:21Jordi Hays?

  I think Clueley's a good target. I bet, I bet.

• 18:23John Coogan?

  It's not the craziest target out there.

• 18:25Jordi Hays?

  Not the craziest, you know, Chamath and Mr. Beast, Holdco.

• 18:28John Coogan?

  Yeah, there's a lot of revenue there. It's growing, you know? The market needs a pure play AI viral.

• 18:36Jordi Hays?

  A pure Roy play.

• 18:37John Coogan?

  Yeah. Yeah, there's no pure play.

• 18:40Jordi Hays?

  Uh, well, we have some more breaking news, apparently.

• 18:42John Coogan?

  Break it down. Next up, we have Roy from Clueley, the man himself, third time in the studio, third time on TBPM.

• 18:50Jordi Hays?

  Get the.

• 18:51John Coogan?

  Welcome to the stream.

• 18:52Jordi Hays?

  Get that hammer ready.

• 18:53John Coogan?

  Ready. Let's bring him in. Let's hope he's ready. Roy, give us the news. Give us the headline number. How are you doing? How much did you raise? 15 million fucking dollars.

• 19:07Jordi Hays?

  Clean hit, clean hit.

• 19:10John Coogan?

  Congratulations. Why'd you raise money? I thought you were printing so much money, you didn't need to raise ever. What happened?

• 19:17Speaker 04

  We're printing money, but we need more money. Every single day, we're looking for things to spend money on.

• 19:23John Coogan?

  Okay, okay. Uses of the funds. What are you gonna spend on first?

• 19:29Jordi Hays?

  14 million for brain computer interface development.

• 19:33Speaker 04

  Exactly, exactly. We have whatever you thought the viral content, you thought this was cool, bro, we're doing 10x this.

• 19:40John Coogan?

  Okay, more videographers, more after effects artists.

• 19:43Speaker 04

  More editors, more engineers, more everything, please.

• 19:46Jordi Hays?

  Mas, mas.

• 19:48John Coogan?

  Yes, let's go.

• 19:51John Coogan?

  Yeah, what's the morning routine like now over at Cluely HQ?

• 19:55Speaker 04

  Everybody wakes up and we swipe on Hinge for 30 minutes, it's mandatory, everyone swipes on TikTok, Instagram for an hour just to make sure the viral senses are refreshed. We, we, we all do cold plunges and we're, we're, we're ready to hit the day with caffeine.

• 20:09Jordi Hays?

  If you, if you cold plunge though, does it negate like the, the brain rot? Like do you get to, or is that intentional of like relocking and like, you know?

• 20:18Speaker 04

  Yeah, yeah, we, we, we, we scroll to keep our viral sense up, but after that is, is time to get to work. We're a serious company, you know, we're not just, we're not just trolling over here.

• 20:26John Coogan?

  Okay, that's good to hear. Talk to me about the Hinge use case. I want to hear Cluely's desktop app, you're not in the App Store. If I'm, if someone's using Hinge on their phone, how are they gonna take advantage of Cluely now or in the future?

• 20:38Speaker 04

  I mean, every single time you screenshot something and ask ChatGPT anything, I mean, like this entire use case, like it is ridiculous that I have to do this, like AI can already take the context of your screen and audio and, and, and, and give you information out of it. Why can't chatgpt.com not use this? Why is the main AI use case not already aware of what's going on on your screen? We think this is crazy.

• 20:59John Coogan?

  Yes, but it's, but it is locked down for privacy reasons on the iPhone. So the question is like, what user interface innovation are you gonna bring to bear on the phone? So that you can actually unlock the vast majority of consumers who are realistically not using the most popular consumer apps on their desktop.

• 21:18Speaker 04

  I would, I would push back on whether we even have to enter the phone at all. Really, the technology is growing so fast, we might just be able to skip phone entirely. We might be able to skip classes entirely. And I like, like, whatever it is, I think this technology is growing super fast. Like, like, I think phone, like, in five years, I would question whether phone is the dominant consumer use case.

• 21:37John Coogan?

  Okay. I, I, I get that you're BCI pilled. It still feels a few years out. The meta Raybans feel very much here today. Have you looked into those APIs? How developer friendly is the meta Rayband ecosystem versus the iOS ecosystem versus the MacBook Pro ecosystem? Which seems to be where you're flourishing right now. I feel like you're going to have a really hard time on iOS. No matter how cracked your engineers are, Apple is just going to say, no.

• 22:07Jordi Hays?

  I think, I think Roy, if anybody could risk Tim Cook.

• 22:09John Coogan?

  I, I, I won't, I won't put it past you, but it feels like the meta Rayband ecosystem might be a little bit more open. What, what's your read on the meta Rayband or the meta glasses rollout? They just had an announcement this today.

• 22:23Speaker 04

  My read is that there is way more money in, in all in desktop assistant than people actually think. There's maybe two, three competitors in this, maybe, maybe two, three competitors who are actually trying to take a meaningful stab at desktop assistant. And there's way more money and way more value in this than people think. We're still going to be using computers in a few years. Maybe we'll be using something else, but like, like enterprise, bro, these sales, Oracle, Adobe, these guys move slow as fuck, bro. Like they will be using Blackberry still, bro. Like they are moving slow. We're going to have computers unlock a bunch of enterprise value for the next few years and we'll be here to capture all that.

• 22:55John Coogan?

  Yeah. So, I mean, I, I, I get that the, I mean, it feels like this is going towards enterprise note taking, enterprise assistant. And, and, and would have a very positive, yes, you use the cheat on your technical interview as like a viral hook. But, you know, we're, we're having our intern demo clearly today. And you could see that if we're on a call, just having answers be pulled up ambiently is valuable. There's obviously a bunch of, you know, bots that plug in and listen and record your emails, but being more proactive seems like a step forward. It begs the question, why are you in the consumer group in Andreessen? But I guess that there still is a consumer angle long-term. But how are you seeing clearly users adopt the product?

• 23:40John Coogan?

  It feels like the logical case is at work on the desktop.

• 23:44Speaker 05

  Yeah, of course. I mean, questions, how are Clue users using the product?

• 23:48John Coogan?

  Yes.

• 23:48Speaker 05

  Most people, it is most helpful in a meeting. Right now, there's no product on the tool that gives you live assistance during a meeting.

• 23:54John Coogan?

  Yes.

• 23:54Speaker 05

  That's where all the prosumer and enterprise values, most prosumer and enterprise values being derived. Other than that, you have the gigantic consumer, the most viral use case ever of literally cheating, bro. Like, like, like, answers your questions. And like, even when you're doing homework, I mean, like, just immediate, bro. Like, you do all your homework instantly. When you're doing quizzes, assignments, when you're watching lectures, bro, immediate, bro. It's immediate help.

• 24:14Jordi Hays?

  Immediate, onsite.

• 24:16John Coogan?

  Yeah, yeah, yeah.

• 24:17Jordi Hays?

  Yeah, gotta give a shout out to the whole team. We, we, we were reviewing Clue throughout the show today. We were pretty impressed with, with the product.

• 24:24John Coogan?

  Yeah.

• 24:25Jordi Hays?

  I think a lot of people that are yapping on the timeline haven't tried it yet.

• 24:29John Coogan?

  Yeah.

• 24:29Jordi Hays?

  And

• 24:30John Coogan?

  We would never.

• 24:31Jordi Hays?

  And I think anytime going forward, somebody leaves a negative comment, just say, "Hey, totally understand how you might think that. Why don't you just use the product for five, 10 hours and then come back and let me know if you feel the same way."

• 24:42John Coogan?

  I think that's the right move.

• 24:43Jordi Hays?

  You get a user out of it. Talk about the process for, for the round. You, you, you raised a seed round not very long ago. You know, did this come inbound?

• 24:52Speaker 05

  I will say right now to all the VCs watching, if you ever are trying to get a round, you get me an email thread and you say, "Hey, let me loop in my assistant and we'll schedule a call in two weeks." You are not getting allocation and I'll bring up everything, one of my friends to make sure you don't get allocation. Bro, these rounds move so fucking quick. You don't have too much, your whole job is to find the alpha and invest quick and early. Why are you looping an assistant in two weeks? My partners, Ryan and Eric, they came with stakes and Coke zeros to the house.

• 25:19Jordi Hays?

  Stakes and Coke zeros.

• 25:21Speaker 05

  Oh, I love these guys. This is how investors need to be. Your job is to find the fucking alpha, bro. Why are you looping in this?

• 25:28Speaker 05

  There was a, there was a preempt and I think all rounds, you need to preempt. Fucking fuck, bro.

• 25:34John Coogan?

  Preempted founder.

• 25:35Jordi Hays?

  If you're not getting preempted, just shut your company down. Even if you're running out of money, if you're not getting preempted, just shut the company down.

• 25:41John Coogan?

  Shut the company down, that's great.

• 25:42Speaker 05

  Bro, these rounds are moving so quick. Companies grow so quick. Oh, VCs don't have two weeks to loop in your assistant.

• 25:47John Coogan?

  Okay. What is your underlying motivation for building this company?

• 25:53Speaker 05

  I want to be conqueror of the fucking universe. It is so obvious that AI is going to massively expand what is capable. And I think like even in five, 10 years, bro, we keep growing at this rate. Like we'll be on the next ship to Mars. Well, I'll be living to 400 years old and I'll be jacked till I die. And in that universe, bro, like these companies will converge into super companies. And these super companies is going to be me versus Elon versus Sam, competing to be guardian of the fucking galaxy, bro. And I'm, I'm going to be on top.

• 26:18John Coogan?

  Okay. Sounds like you're power hungry. Uh, there's been a criticism.

• 26:23Jordi Hays?

  Which can be a strength.

• 26:24John Coogan?

  A strength. The, uh, there, there, there's clearly a sub tweet about you going around on X, uh, arguing that you are driven by fame, not greed or idealism. Uh, is that true? To what degree are you motivated by fame specifically?

• 26:41Speaker 05

  The only two things I, I really care about in my life are working on, is working on something that I find interesting and getting the work seen by people.

• 26:49John Coogan?

  Yes.

• 26:49Speaker 05

  Of Elon Musk, these are my inspirations. Like these people are known by every living conscious human being in the world. Man, this guy founded Apple. This guy did Tesla, bro. Like it's, it's the coolest shit ever. 4,000 years ago, bro, you wanted to hunt big fucking woolly mammoths and claim the back of the tribe. There's no more woolly mammoths. There's only startups.

• 27:06John Coogan?

  Okay, so.

• 27:07Jordi Hays?

  So you're not beating the allegation.

• 27:10John Coogan?

  Wait, but, but, but the more precisely, uh, if, if the best path for Cluely forward is your interns getting up, getting tons of social media views, you step out of the limelight because you're managing the company. People know Cluely, but they don't know Roy Lee. Is that still a win for you?

• 27:28Speaker 05

  That, of course, at one point, the company becomes undistinguishable from the founder.

• 27:33John Coogan?

  Yes.

• 27:33Speaker 05

  What happened with every single big company and it's what, it's what, what will happen with Cluely.

• 27:36John Coogan?

  Yeah, it's just, it's just a unique situation because we, we know of Palmer Lucky because of Oculus, the product. And many people know of Cluely because of you and the, and the viral stunts that you've pulled. And so you're kind of inverting it. And the, and the question that the, the haters are asking of you is that, is this, is the long-term goal to build a great product? Or to build the brand of Roy Lee?

• 28:00Speaker 04

  Bro, it is to change the world in a meaningful way and you don't change the world by going viral a million times. You change the world by genuinely building a world-changing product. Technology changes the world. I will, I will build great technology and every person in the world will watch me do it.

• 28:14Jordi Hays?

  Amazing. How, how big are you going on the content side? Do you want to get a single video with a hundred million views? Are you, are you going that big? Is that, is that kind of the wrong framework to think about it? But, but I, but I imagine you're going to have more, you know, budget than ever. And, and you know, it's easy now to get a million views on X on a video. Is, is a hundred million views on YouTube the next, you know, uh, challenge?

• 28:38Speaker 04

  I will tell you right now, and this might be the, the most logical thing I, I say on here. But the biggest societal shift in maybe human history happened about five years ago. When TikTok surpassed YouTube in terms of like virality and usage. All of a sudden, the number of content creators stayed the same. And the relative number of content being created stayed the same. Whereas the quantity of content being consumed about 100X. As a result, there is this gigantic gap where there is not enough viral content for people to consume. Which is why you see the same subway surfers overlaid on a Reddit story. You see that a hundred times because there's literally not enough good content out there. For the next maybe six months to a year. Anything you post that has the potential to go viral will go viral. Which is why you see our marketing team is all influencers with viral sense.

• 29:23Speaker 04

  We know, we independently all have 20 ideas a day that we know will go viral. And this extrapolate out over a year will literally generate a billion views a month. And if you're someone who thinks a billion views a month is not going to convert to, to some money like, bro, you're retarded, bro. Go back to school, bro.

• 29:37John Coogan?

  A billion views a month, is that, is that, I think, will you run into a cap? Is there a set market size that you will saturate and then you will be seeing Super Bowl ads?

• 29:46Speaker 04

  I have no idea, but I'll tell you right now, like, like, like Super Bowl ads, it's, it's, it's all old. Like this is the old meta. The new meta is in content, is in short form. And nobody seems to have captured the, the gigantic delta in generating more viral content.

• 29:59Jordi Hays?

  I still think it'd be funny if you forced 127 million people, the number of people that watch the Super Bowl, to just watch a video of you saying, "Hello, I'm Roy Lee. I encourage you to go to Clulee.com and sign up for Clulee today." So, don't count it out. But, anything else you want to share while you're here? I know it's a big day for you. The timeline's blown up. You, not very many people have the stones to, to launch a Series A on a Friday, a summer Friday.

• 30:25John Coogan?

  To go head-to-head against Mira, too.

• 30:27Jordi Hays?

  Yeah, yeah.

• 30:29John Coogan?

  And you pull it off.

• 30:31Speaker 04

  Again, I think people worry too much about the little things. In reality, if you post something that deserves to go viral, you will 100% go viral, and this will only be true for maybe the next few years, maybe. And I encourage more people to post. Most businesses will die, not because the product sucks, but because you can't get enough eyeballs. And I think we, if we win, if and when we win, we will show to the world that there needs to be a fundamental difference in how companies are built. You start with distribution and eyeballs, because right now, that is where the gigantic delta is. And if you can't have that, then you-

• 31:02John Coogan?

  Stick with us. Stick with us for a minute. I want to play your fundraising video live on the stream, and then if we have any questions from that, I want to ask you.

• 31:10Speaker 04

  Please, please.

• 31:11John Coogan?

  So, let's play-

• 31:12Jordi Hays?

  Pull it up.

• 31:12John Coogan?

  -the video.

• 31:18Speaker 06

  Mr. Lee, Columbia University has found you guilty of academic integrity violations. Do you have anything to say?

• 31:26Speaker 04

  Look, I've already apologized to school, but to be honest, in two years, nobody's going to think this is cheating.

• 31:33Speaker 02

  Yo, the invasive virus just hit. You think it'll last us for the summer?

• 31:45Speaker 02

  Welcome to Clulee.

• 31:56John Coogan?

  Great video. Congratulations. I gotta hit the gun again.

• 32:02Jordi Hays?

  Very well done.

• 32:03John Coogan?

  Very well done and beautifully shot. Like the lighting, I mean, the cinematographer you have.

• 32:08Jordi Hays?

  I almost had it here.

• 32:09John Coogan?

  Very, very good. Very, very good. Nailed it. Anything else for Roy?

• 32:13Jordi Hays?

  That's it for now.

• 32:15John Coogan?

  It's crazy that you can shoot that in-house. That really is remarkable. Congratulations.

• 32:20Jordi Hays?

  We are excited to follow the journey.

• 32:23Speaker 05

  You just got $15 million.

• 32:25John Coogan?

  Oh yeah. Tell us about the fundraising leak. Well, what's your deal with R4 Rock? Were you able to, how much do you have to pay him to shut up?

• 32:33Speaker 05

  Man, I was, I was begging him. You guys have no way. For the last few weeks, I've been begging this man. Please do not leak it.

• 32:40John Coogan?

  Why? Why? I feel like, I feel like it already leaked separately and like having, I feel like you would lean into a leak. I was expecting like a collab almost.

• 32:50Speaker 04

  I think what, whatever leak there could possibly be, I have very strong faith in my ability to make my announcement go more viral.

• 32:58John Coogan?

  Oh, sure.

• 32:59Speaker 04

  This video will go more viral than any leak would have, even if I try.

• 33:02John Coogan?

  Yeah, yeah, yeah, that makes sense. You actually don't want to take the gas out of the, out of the tank. I love it. Uh, thank you so much for stopping by. This is fantastic and good luck.

• 33:09Jordi Hays?

  Congratulations to you and the team. Excited to watch you guys cook this summer. And hopefully the 15 mil makes it, you know, back, you know, August, just remember August, it's going to be hard to get, the auto responders will be on. It's going to be hard to be, you know, get those 24 hour meetings.

• 33:23John Coogan?

  Yeah.

• 33:24Jordi Hays?

  Uh, and so just make sure you got the runway to September.

• 33:26John Coogan?

  And despite comes a shock, IPO underwriters do not preempt. So at some point you will have to stop with the preempt everything mantra.

• 33:35Jordi Hays?

  I don't know. There's some SPAC sponsors out there.

• 33:37John Coogan?

  Who knows? Maybe, yeah, maybe you'll get preempted on the SPAC too.

• 33:40Jordi Hays?

  A Tramont SPAC in the fall, you know, I wouldn't be, I wouldn't be surprised. So.

• 33:44John Coogan?

  You're, you're saying it as a joke. I, I feel like it might be in the cards. Uh, we're, we're, we're going to be tracking it. Thank you so much for stopping by.

• 33:51Jordi Hays?

  Great chatting with you.

• 33:52John Coogan?

  We'll talk to you later.

• 33:53Jordi Hays?

  Talk soon.

• 33:53John Coogan?

  Bye.

• 33:55John Coogan?

  In other news, the Los Angeles Lakers has been sold for $10 billion in richest deal in sports history. Guggenheim Partners CEO Mark Walter, who also owns MLB's The Dodgers, is acquiring the storied NBA team in a move that makes it the world's most valuable sports franchise. And it's so funny because the Wall Street Journal's framing this is like, this is the biggest deal ever. No one's ever done a deal like this. And we're like, wait, so you're talking about like a series A for like a foundation model company? Like as a tech person? I'm just like, yeah, like $10 billion.

• 34:29Jordi Hays?

  $10 billion!

• 34:31John Coogan?

  I mean, we should ring the gong, but it's not exactly like the first time. It's not even the first time this show we've heard a deck of corn.

• 34:46John Coogan?

  Congratulations to the Lakers.

• 34:48Jordi Hays?

  Mark Walter and the whole team.

• 34:50John Coogan?

  It's fantastic. Major premium to the Boston Celtics, who sold for 6.1 billion. And now the Lakers is the most valuable sports franchise. But they just don't do enough volume. There's only a couple of games, you know? They're not 24/7. Like Instagram, does that ever go offline? No. There's always entertainment. Lakers, they're still doing seasons. They need to have 24-hour basketball. They want to really get there.

• 35:18Jordi Hays?

  Around the clock. It's like endurance, endurance basketball. It's just a week-long game, you know? You gotta always have five players on the court.

• 35:25John Coogan?

  Just constantly.

• 35:26Jordi Hays?

  Running up.

• 35:27John Coogan?

  It's the only option. Jeanie Buss and her family, who have owned the Los Angeles Lakers since Jerry Buss bought the team in 1979, wow, on Wednesday, agreed to sell majority control of the storied team to Mark Walter, the sports investor. And I looked at the return on investment of owning the Lakers for that 40 years, slightly under S and P 500.

• 35:51John Coogan?

  Like it was a really, really good deal and it was a really great company that grew a lot, but it didn't outperform the stock market. Just diversification, bros, DCA, bros, undefeated again. Well, if you're trying to DCA, do it on public.com, investing for those who take it seriously, multi-asset investing, industry-leading yields that are trusted by millions, folks. Anyway, Walter, who is part of the ownership group that owns the Dodgers, has been part of the Lakers since 2021, when he purchased a 27% minority stake in the franchise. He's also a co-owner of Chelsea in the English Premier League, the WNBA's Los Angeles Sparks, and the newly-formed Cadillac Formula One team. Let's hear for Cadillac. Let's go.

• 36:36Jordi Hays?

  Congratulations.

• 36:39John Coogan?

  Can't hear you at all.

• 36:40Jordi Hays?

  John front-run the Cadillac F1 team and got a Cadillac for himself over there. You can see the black.

• 36:46John Coogan?

  It's great to have an American F1 team in the business now.

• 36:49Jordi Hays?

  Yeah.

• 36:49John Coogan?

  Yeah, we've fallen off, but we're coming back.

• 36:52Jordi Hays?

  You're not going to be able to get one of these in the whole country.

• 36:54John Coogan?

  I don't think so.

• 36:55Jordi Hays?

  After the F1 team gets out on.

• 36:59John Coogan?

  The sale marks the end of nearly a century of Lakers' control by a family that has become synonymous with Los Angeles sports and the glitz of professional basketball. The deal also comes at a time of skyrocketing valuations in professional basketball, which haven't come back to earth since the league announced a media rights deal last year worth 77 billion, when the Celtics sold in March. The 6.1 billion valuation exceeded the previous record valuation set for a sports team by the 6.05 billion sale of the NFL's Washington Commanders in 2023. He purchased the Lakers for 67 million in 79, 1979. The team transformed from franchise uprooted from Minnesota into one of the winningest

• 37:44John Coogan?

  and most valuable sports properties.

• 37:45Jordi Hays?

  I had no idea that they were founded in Minnesota.

• 37:47John Coogan?

  That's where the Lake name comes from. Minnesota is the land of a thousand lakes. They were the Lakers because there's a lot of lakes in Minnesota and then they just put them to, uh, they just brought them to LA and kept the name. But that's what Lakers means. Yeah.

• 38:02Jordi Hays?

  Wow.

• 38:02John Coogan?

  Bus, uh, the bus family oversaw the creation of Showtime and presided over the NBA's last three-peat. A-listers like Jack Nicholson and Leonardo DiCaprio have become fixtures at the games. And when they sell merch, they need to pay sales tax. They should get on numeralhq.com, numeralhq.com. Sales tax on autopilot. Spend less than five minutes per month on sales tax compliance. You know, all the athletes also.

• 38:27Jordi Hays?

  They've won 11 championships since 1980. Their rosters have boasted many of basketball's brightest stars. Magic Johnson, Kareem Abdul-Jabbar, Kobe Bryant, Shaquille O'Neal, LeBron James, and LeBron James's son have all worn the Lakers purple and gold.

• 38:41John Coogan?

  I love it. It's such a cool, the, the father-son duo. I mean, I feel like that should have been a bigger like national news story. It's such a cool thing. I think it's like not like if they were like winning championships together immediately, that might be a different story, but it's just so insane that you could be playing professional basketball.

• 38:58Jordi Hays?

  Just because you could have earned a better return by DCing into the, into the, into the stock market.

• 39:06John Coogan?

  That's not why people own these assets though.

• 39:08Jordi Hays?

  Owning the Lakers for a number of decades, I imagine, was absolutely priceless. So, um, great investment. Great run.

• 39:17John Coogan?

  Yeah. All the perks, you have to add those in. What, do you get perks from DCAing into the?

• 39:22Jordi Hays?

  I like how, uh, Lakers legend, Magic Johnson, hit the timeline, said, "Just like I thought, when the Celtics sold for 6B, I knew the Lakers were worth 10B."

• 39:32John Coogan?

  Let's go. The confidence of Magic Johnson. Great investor too. He's got a bunch of, a bunch of good stuff in the portfolio. More news on the Scale AI transaction. So it's closed. I believe that Alex Wong has a badge at Meta and shows up to work at in Palo Alto and clocks in at Meta HQ now. Scale AI is still an ongoing concern, is still a company, but every competitor is out for blood and they want to take as much of the business as they can, since obviously the perception is that Scale AI will primarily be working with Meta and that other foundation model labs might not want to do business with Scale AI anymore. Unclear if they can

• 40:16John Coogan?

  separate out the businesses, if they can separate them out fully over time and sell the position to other investors, create like a diversified, I mean, they could even take the company public, at which point I imagine that it would be a lot less, a lot less of a conflict of interest or like a fear. But there's been news that, that OpenAI said, hey, we're not training, we're not using Scale AI for data anymore, because it's too aligned with our competitor, Llama, maybe. But everyone's trying to-

• 40:45Jordi Hays?

  Yeah, a lot of this was very predictable, right? I don't think Meta and Scale's teams looked at and said, hey, if we sell right now to Meta, which is competing in open source AI, we're totally going to retain all of our customers, right? Like, people aren't just going to immediately churn off. And no, they were smart enough to know what would happen. And there was an article, I think, yesterday about OpenAI, you know, ending their relationship with Scale, but from what we knew, like, they hadn't been doing much for a while. It's part of the reason why Merckor had been-

• 41:19John Coogan?

  And they also brought a big function in-house, because for some of the more complex tasks, it makes sense to generate the reinforcement learning data yourself. And there's just so many others, there's so many other services, having like a single point of failure never makes sense for a business of that size, but we'll see. So, the, the information has an article here about a little-known startup that has surged, hint, hint, past Scale AI without any investors. This is interesting. After Meta platform Scale AI DL data labeling is looking like Silicon Valley's hottest new interest, that's enormous- Opportunity for Edwin Chen's Surge AI. For years, data labeling existed in a tucked away corner of Silicon Valley, a critical but unglamorous area of AI where companies like Google and OpenAI

• 42:01John Coogan?

  how are higher outside firms to improve their models by laboriously grading the quality of what they produce. Now, a spotlight has unexpectedly fallen onto the field in the wake of Meta Platforms' decision to pay 14.3 billion for 49% of Scale AI, the best-known data labeling firm. But it's not the largest such firm, nor perhaps the most impressive. That title belongs to Surge AI, founded by Edwin Chen. This is fascinating. I didn't know this. 1 billion in sales last year, bigger than Scale. Yeah. So Chen's startup has won customers like Google, OpenAI, and Anthropic.

• 42:38Jordi Hays?

  It's such a testament to the idea that like, sure, you can bootstrap, but you, it's so incredibly hard to have any hype around your business if you're bootstrapped because you're not having, your investors aren't hitting the timeline for you

• 42:52John Coogan?

  Yep.

• 42:52Jordi Hays?

  on a daily basis. And also, you have, if you're not trying to raise capital, you have less need to go and be loud and go on podcasts and talk to the press and all this stuff because you're just making a lot of money. And, and you know, sometimes it can be beneficial for, to, for people to not know about you.

• 43:11John Coogan?

  So this is, I mean, this is crazy, crazy stats. So Chen is 37, he has no investors and has bootstrapped a five-year-old startup entirely by himself, which has 110 employees in offices in New York and San Francisco. The company generated more than $1 billion in revenue last year. Surge has told employees a previously reported figure that exceeds the $870 million scale generated in revenue during the same time period. And unlike Scale, Surge was profitable and has been from the beginning, Chen said. Moreover, Surge could see its sales get even larger if other companies copy OpenAI's decision to stop hiring Scale, a choice made over concerns about Scale's relationship with Meta to shift business to Surge. Other key financial metrics couldn't be learned,

• 43:54John Coogan?

  like how much revenue Surge keeps after paying its workforce of mostly contractors. So there is a question about like the Margin since this is somewhat of a marketplace business. This could be a situation where, you know, a thousand dollar contract comes in and eight hundred dollars of that contract goes to the actual contractor who's doing the work of the data labeling. But at the same time, even if it's two hundred million and like, you know, like net revenue, that's still a huge business. I it's hard to imagine Serge not being a fantastic business. They haven't had to raise money. They have one hundred and ten employees and they're used by Google and all these major foundation model labs. So it seems like a fantastic business.

• 44:35John Coogan?

  But if Serge could earn a valuation from investors similar to the one Scale received from Meta, such a price would make Chen a billionaire many times over, at least on paper, and quietly one of the wealthiest people in tech. Interesting. I'm very interested to see what what he did before this company. Edwin Chen. I feel like I've heard that name before, but I don't know. As AI models transform from toys into real business tools, data labeling is becoming more and more essential. Contractors hired by like by companies like Serge grade the responses from AI models and write thousands of questions and answers in fields like programming, math and law to feed those AI models. And so, you know, if you're, I I wonder if this is going to go the route of, you know, you are Deloitte or McKinsey and you're going to have your team, but then also a company like Serge

• 45:20John Coogan?

  create a ton of training data around a specific workflow that is costing your business, you know, twenty or fifty or a hundred million dollars every year. And then, so it's like, instead of like the the AI BDR that's like kind of generically writing emails based on like the average of the entire internet, it's like, no, this is a fine tune for your business, perfectly trained, perfectly, and it really, it really distills what you do excellently. Yeah. I don't know. I don't know if it'll go that way. I'm interested to talk to people about it. As AI models.

• 45:57John Coogan?

  Surge's subsidiary, Data Annotation Tech, says workers get paid to train AI on your own schedule with wages starting at $20 an hour. Chen has distinguished Surge by making it the high-end shop, charging premium rates, often two to five times what Scale might bill. Surge justifies the prices with its reputation for industry-leading work. Indeed, one former Scale employee said Surge often performed better than scaling customer audits of labeling quality. And competitor Garrett Lord, who's coming on the show today, who runs Kleiner Perkins-backed Handshake, readily acknowledged that Chen is the number-one player. So I'm excited to talk to Garrett Lord today about this exact topic. Should be very interesting. You wouldn't know that from the coverage of Meta's blockbuster

• 46:39John Coogan?

  deal to quasi-acquire Scale AI. Its CEO, Alexander Wong, who is now joining Meta in a senior AI role, was widely regarded as leader of the data labeling field and had become a Silicon Valley celebrity, blanketing podcasts and conferences with his presence and posting heavily on X. It also raised 1.5 billion in venture capital, putting Scale on a very short list of companies that have raised that much, and he hired upwards of 1,000 people. Wong had made a timed his exit perfectly, given the traction of Surge, which had grown larger than Scale without outside capital and with a tiny fraction of Scale's workforce. Scale also missed the goal to hit $1 billion in revenue last year, but Scale's spokesperson said the company stood behind this.

• 47:15Jordi Hays?

  Scale wasn't profitable?

• 47:16John Coogan?

  It was not profitable.

• 47:17Jordi Hays?

  Which...

• 47:18John Coogan?

  But wasn't burning a ton of money. Like, I think they had, like, they raised 1.5 billion and they still had like almost a billion in cash. So they weren't, they weren't in like trouble or anything, but at the same time, it was like, like, not, not a wildly profitable, not a wildly lean business, but I don't know.

• 47:33Jordi Hays?

  What, what, what a... It's absolutely fascinating to talk about these two businesses.

• 47:38John Coogan?

  It's a wild industry. Something that like, yeah, I mean, just, it feels like there's such an edge just to even identifying this opportunity years and years ago. I mean, I guess Surge started four or five years ago, but it was certainly like pre-chat GPT that all these companies got started. And then they realized, like, some of them got started in self-driving car annotation, all sorts of stuff like that. But Chen studied linguistics and math at MIT, came to the idea for his startup after leaving college and witnessing firsthand how big companies struggle with data. Before starting Surge, Chen worked as machine learning engineer at Facebook, Dropbox, Google, and Twitter. He worked at four different tech companies.

• 48:16John Coogan?

  Just like going from one to the next. It's insane. He was developing recommendation and search algorithms and helping gather the data needed to train them. Despite the hefty resources of those companies, Chen encountered a lot of problems. At Facebook, for instance, Chen was tasked with helping build a Yelp competitor. His team needed to train a model that could correctly classify businesses, telling the difference between restaurants and grocery stores, for instance. To do so, they needed a dataset containing 50,000 accurately labeled businesses, which he found out would take six months for an outside firm to assemble. We had no solution other than waiting. We simply waited. When the data came back, Chen blanched. In some instances, it had labeled restaurants as coffee shops and coffee shops as hospitals. The data was complete junk. He wouldn't say which vendors Facebook had

• 49:01John Coogan?

  used. In 2020, he left Twitter to found Surge and picked up some of his first customers, executives from Airbnbs and Niva, a once promising AI search engine startup, as only a founder in San Francisco might bumping into them at rock climbing gyms in the city's Dog Patch neighborhood and the Mission District, talking up his startup. To get Surge going, Chen recruited data labeling contractors he knew from his previous roles and funded the startup using his savings. He wouldn't say how much he put in. Fortuitously, Chen focused on language modeling. Scale by contrast started out using more visual data for autonomous vehicles, which we talked about, just as those types of models began to grow in importance. Less than a year later, OpenAI had hired Surge to fine tune its models by teaching

• 49:45John Coogan?

  them how to avoid producing harmful responses like racially biased language, biased based on research paper the company published together. By 2022, Anthropic had become a Surge customer.

• 49:55Jordi Hays?

  They're putting out research papers with OpenAI and still managed to stay this under the radar.

• 50:01John Coogan?

  Wow. Yeah. So, look at this, the label largess. Data labeling has proved to be a lucrative niche in AI. Surge, founded in 2020, has over a billion in revenue, zero funding. Scale, founded in 2016, has 870 million in 2024, raised, oh, the, this says funding raised, but this is clearly valuation or something because it says 17.4 billion, which is not what they raised. Turing has 300 million annualized, raised 225 million. Invisible.

• 50:32Jordi Hays?

  Interesting. Turing, too, initially was like a marketplace to just hire developers, and I think they pivoted into data labeling.

• 50:41John Coogan?

  Interesting. It's the same thing when I work with a cloud provider, the enterprise tech customer said, "I don't know the internal expectations for why their services work so well. I push a button, and I'm glad for the internal work to make that happen." Data labeling companies typically use various techniques to make sure contractors aren't just dialing it in, or phoning it in, I guess, when answering questions. For instance, companies randomly insert questions that have no correct answers, or make sure labelers agree on the right answer to a question. So obviously, you scaffold up these responses so that everything's like double-checked, and then you can kind of see if people are messing around. But wow, what a beast of a business. No idea how big this thing is. Amazing.

• 51:24John Coogan?

  Over in defense tech world, Androl has partnered with Rheinmetall, the German defense tech company, Le Prime, really, to manufacture Barracuda and Fury over there. That's very exciting. And then we also touched on Spotify founder Daniel Ack.

• 51:40Jordi Hays?

  Guess when Rheinmetall was founded?

• 51:47John Coogan?

  The way you're saying that makes me think it's like 1650.

• 51:50Jordi Hays?

  I'm putting you on the spot like Tucker put a...

• 51:53John Coogan?

  Yeah. How can you possibly report on the news if you don't know when it was founded?

• 51:58Jordi Hays?

  This is the best bit earlier. I have to read it out.

• 52:01John Coogan?

  Yeah, read the muffin man.

• 52:02Jordi Hays?

  Tucker, do you know the muffin man? Ted goes, "The muffin man?"

• 52:06John Coogan?

  The muffin man?

• 52:07Jordi Hays?

  Muffin man. "No, I don't know him personally."

• 52:11Jordi Hays?

  "How can you know anything about Drury Lane if you've never met the muffin man, John?" This is a post from Zach Stewart.

• 52:17John Coogan?

  This is real gotcha.

• 52:18Jordi Hays?

  Really, really good. Anyways, you can still, I give you permission to comment on Rheinmetall, even though you don't know. 1889.

• 52:25John Coogan?

  I knew it was really old. 1889?

• 52:29Jordi Hays?

  Dusseldorf.

• 52:29John Coogan?

  Okay, I was pretty far off with 1650, but over 100 years. I mean, yeah, that's the same. It's general atomic is part of like this roll-up, and it came out of like, I think, General Dynamics at some point, and the company that, the founder of the company that competes with Fury for that autonomous program that they're competing for right now.

• 53:02John Coogan?

  Was like the designer of a submarine in the Civil War or something like that. Like, I'm pretty sure that he's, he died more than a hundred years before Palmer Lucky was born.

• 53:15Jordi Hays?

  Yeah.

• 53:15John Coogan?

  That's the, that's the cultural difference between the two companies that are competing for this like one contract. It's like a fascinating dynamic about like how legacy they are. Like, it's not just like-

• 53:25Jordi Hays?

  If you're in the game for a while, you know, decades after, after you start the company, your, your greatest enemy will, will be born. And then they'll have to grow up a little bit.

• 53:35John Coogan?

  Yep.

• 53:35Jordi Hays?

  They'll have to learn the game.

• 53:36John Coogan?

  Yep.

• 53:36Jordi Hays?

  And then they're gonna come for you.

• 53:38John Coogan?

  Wild. So yeah, Spotify founder Daniel Ack is leading a $600 million funding round into German defense startup Helsing. This is the, this is kind of more of an and roll equivalent over in Europe, valuing that four-year-old company at 12 billion. The, the business makes battlefield AI drones, submarines and robo fighter pilots. It's now one of Europe's most valuable startups.

• 54:02Jordi Hays?

  And they're using some renders here, John.

• 54:05John Coogan?

  Renders?

• 54:06Jordi Hays?

  Image. They're render maxing.

• 54:08John Coogan?

  They're render maxing.

• 54:10Jordi Hays?

  Happens. It is a cool render. Yeah, look at the water there. It's definitely a render.

• 54:14John Coogan?

  Who knows? It's hard to tell these days. It's so, it's, we're beyond the uncanny valley. And so Helsing is, is expanding from its origins in artificial intelligence to produce its own drones, aircraft and submarines as part of a bigger push for locally made and owned defense products for European countries and really companies all over the world.

• 54:38Jordi Hays?

  Crazy. It was founded in 2021.

• 54:42John Coogan?

  Wow.

• 54:43Jordi Hays?

  By Torsten Reel, Ryle.

• 54:46John Coogan?

  Okay.

• 54:46Jordi Hays?

  A video game entrepreneur, Gunbert Scherf, a former German Defense Ministry official and Nicholas Kohler, an AI researcher.

• 54:55Jordi Hays?

  And they have partnerships with Saab already.

• 54:59John Coogan?

  And tons of.

• 55:00Jordi Hays?

  As Mr. All.

• 55:01John Coogan?

  Yeah, and tons of American venture capitalists in the deal. You got Lightspeed, Excel, and General Catalyst.

• 55:06Jordi Hays?

  Connor's cooking.

• 55:07John Coogan?

  They've raised over 1.37 billion. The, the, the, Daniel X said, "The world is being tested in more ways than ever before." That has sped up the timeline for Helsing's financing, X said, pointing in particular to the conflict between Russia and Ukraine, where drones and other AI-powered systems have been deployed at scale for the first time. There's an enormous realization that it is now really AI, mass, and autonomy that is driving the new battlefield. And so, yeah, exciting, exciting deal. Up next, we have Catherine Han from Haun Ventures coming in the studio to talk about the stablecoin bill. The genius bill is slated to pass on the front of the Wall Street Journal today.

• 55:52Jordi Hays?

  Is the guiding and establishing national innovation for US stablecoins.

• 55:57John Coogan?

  We had her on the show. And yeah, we're excited to talk to her. So, welcome to the show. How are you doing, Catherine?

• 56:03Jordi Hays?

  What's going on?

• 56:04Katie Haun?

  Hi, how are you guys?

• 56:05John Coogan?

  We are great.

• 56:07Jordi Hays?

  Big 24 hours.

• 56:08John Coogan?

  Congratulations, I think, are in order, but please get us up to speed on what's actually happening and where, where things are in Washington.

• 56:15Katie Haun?

  And I love that you called me Catherine. That was my Washington name. I haven't been called that since I used to appear in court. But Katie.

• 56:21John Coogan?

  Katie, let's update the, let's update the Chyron. Katie Haun.

• 56:24Katie Haun?

  So, thanks for having me on, guys. Actually, I literally just walked off a plane. I was down at the COTU conference.

• 56:31Jordi Hays?

  Nice.

• 56:31Katie Haun?

  Where I was talking to a lot of founders, crypto and non, and everyone loves your show. So, I'm happy to be here.

• 56:39Jordi Hays?

  Well, thanks for making the time.

• 56:40Katie Haun?

  Yeah, thanks. I think congratulations are in order. I don't know if I would say that yet. I mean, first of all, the bill passed through the Senate. Great, great news, obviously. It's another signal, I think, kind of like, I feel like I did when ETFs. Were approved, by the way, not really by the SEC, although that was the body that formally approved it. But as I said last time I was on your show, guys, make no mistake, the DC Circuit, that Article 3, that other branch of our government, left the SEC no choice. The courts don't always get it right, but sometimes they do. And the courts unanimously in that case, said that the SEC had acted arbitrarily and capriciously. So to my mind,

• 57:21Katie Haun?

  the court system is the reason we have ETFs in this country today for Bitcoin and for ETH. And I think of this as a bit, a similar thing. Now, here we have another branch of government stepping in. In this case, you have the Senate passing this, introducing this legislation, passing this legislation. Now, of course, the House has to vote on it, and then the President has to sign it into law. So if those two things happen, you can say congratulations are in order for the industry. But I think one thing that is not really being discussed, and I hope we can discuss today, is there's another very important bill. And I'm not going to slap a percentage on and say which bill is more important, but

• 58:02Katie Haun?

  that's the market structure bill. And to me, that's really the transformational bill for the crypto industry.

• 58:09Jordi Hays?

  Okay, so break, yeah, break that down for us.

• 58:11Katie Haun?

  Yeah. So there's one bill, stablecoin bill, as you just mentioned, that the Senate passed. And one of the things that I loved to see about that is the bipartisan support for that bill. Because I think we used to be as an industry pre-political. Brian Armstrong always talked about the industry being pre-political. And I think I don't want it to be the case that this industry is too political on one side or the other. So I really love to see these moments, like we saw yesterday in the Senate, where you have a number of Senate Democrats voting in favor of sensible rules of the road. And I think this is a classic example of that. So I'm delighted, and I hope the House passes it. But I don't see why we have to choose between just a stablecoin bill and the market

• 58:55Katie Haun?

  structure bill. And the stablecoin bill obviously paves the way for a regulatory framework for stablecoins in this country. So that's that. Then there's another bill, the market structure bill. And that kind of will answer, or attempt to answer the question of what's a security? What's a commodity? And I know you guys have been covering crypto for long enough. You know, this is kind of an age old debate. And you know, where can there be an enforcement action? Well, the big question is, well, what's a security and what's not? And I think the market structure really goes a long way in answering that question. And that's why I think it's so fundamental. And we've seen courts across the country weigh in on that question. And that's

• 59:35Katie Haun?

  because we don't have legislation. And Gary Scheffler said it was also clear. And of course, it wasn't also clear.

• 59:42Jordi Hays?

  Yeah. So what's the timeline there? What are the different players? What do people want out of it? What is the core, you know, kind of crypto industry, both on the investor side and company side want out of it? And what are, what, who would not want it to go through? At least how the crypto side has it in mind?

• 1:00:04Katie Haun?

  Look, I think, I think everyone in the crypto industry wants the stablecoin bill to go through and become law. I don't think there's really any question about that. The question is, do you go for both? Someone just described it to me as in a sports analogy, and I'll probably fumble that one. But it was like, do you go for the field goal? Or do you go for the touchdown? And the thing about after a field, you know, after a field goal, the other side gets the ball back. And I think Congress really operates in kind of six to 10 year windows. And, you know, it's on their mind, reform regulatory clarity for crypto right now. And I think the transformational bill for crypto right now is very much that market structure bill. We also want that stablecoin bill and we have this unique moment in time where we

• 1:00:48Katie Haun?

  have bipartisan support for both bills. So personally, I say go for both of them. And worst case, you end up getting the stablecoin bill only. But I do think that's not the most desirable outcome for the crypto industry. I think the crypto industry deserves, especially after years of uncertainty, both a clear message from Congress. I think Congress ought to do its job and pass both bills. And I especially think that because after the Supreme Court last summer, in a case I said that this was the most important case for technology policy, not for just crypto, but for tech policy in decades, was the overturning of the Chevron doctrine. And that takes power kind of away at a high level, away from regulatory agencies,

• 1:01:32Katie Haun?

  and puts it back more in the hands of the courts. And do we want to have another 10 years of litigation percolating up from the district to the appellate court to the Supreme Court on what's a security or what's a commodity, and a patchwork of different answers throughout the country? Or do we want Congress to answer that question for us now? And I think it's incumbent for Congress to answer that question now. You asked who, what does the industry want? I think people, this is a big industry. We say crypto's not a monolith. It's a broad new asset class. And stablecoins are a very big, important piece of that asset class and a growing piece. As you guys saw, I shared with you the stats, you know, almost a quarter

• 1:02:13Katie Haun?

  of a trillion dollars, I think you banged the gong for that stat, locked in supply, growing enterprises across the world integrating stablecoins. You probably saw those announcements from some of the big tech companies in the last few weeks. And I think one thing that everyone's wondering is, those ones that haven't yet dived in for stablecoins is, well, what are the rules? So this bill that was passed yesterday out of the Senate, the genius act is so important for that. It's like, here you go. And so what kind of institutional interest will be unleashed once that bill becomes law? I think that's really exciting.

• 1:02:49Jordi Hays?

  What's your, how would you, how do you think about big companies getting excited about stablecoins and thinking, or institutions and being like, there's a lot of potential here, we should create our own stablecoin versus we should just figure out how to leverage this technology? Where do you see the kind of line and opportunities?

• 1:03:08Katie Haun?

  Well, look, we already have two very dominant stable coins, right, already today. Tether, USDT, and then we have USDC. So clearly, it's not winner take all. I mean, those two are both growing and they both have market share. So we think there will be stable coins like those that will have network effects. But we also think at the same time, there are some businesses that are just so big and just so important. And if they launch their own stable coin, we could also see that, too. I don't think we see a world where every one, I think we get asked this question all the time, is there going to be a world where every company has their own stable coins? You know, we don't think so. We could be wrong, but that's not the view of how we see this evolving.

• 1:03:50Jordi Hays?

  Yeah, we had, we had Aaron, Aaron Frank from Lightspeed on earlier, and he was comparing certain companies would launch a stable coin and they'd maybe would feel like Kohl's Cash, where it's like,

• 1:04:01Katie Haun?

  Yeah, yeah, good point. I don't have any of that, nor do I, I don't have any of that. And that's the thing, if I did, would you want to use it on other platforms, right?

• 1:04:10John Coogan?

  I mean, every bank could launch a Visa network competitor theoretically, but that doesn't necessarily make sense.

• 1:04:16Jordi Hays?

  Yeah. So, so in your mind, is the, is the broader market structure bill the kind of thing that could catalyze a massive amount of new activity? And from my view, you know, stable coins have been getting adoption. There are a bunch of exciting use cases. We have a public, American, stable coin, you know, issuer in Circle now. It feels like, yes, regulatory clarity is important there, but having broader clarity around how tokens are treated by, you know, how the government actually views tokens feels like it could catalyze, you know, much more of an explosion and investment activity and new company formation and you new use cases for tokens. Is that the right framework?

• 1:04:56Katie Haun?

  I think that is the right framework because, like I said, stable coin is a big, important piece of the pie. And, and very low hanging fruit, by the way, to my mind. But crypto as an asset class is much broader. So when you say, where do the industry players, where do the crypto investors, where do we want to see it? I don't think it's a monolith. I think crypto, as it grows to a multi-trillion dollar asset class, like any multi-trillion dollar asset class, you have different factions. And I think some fairly and some really smart people think, just take this, take this win and move on and don't worry about the rest. And I, I think that's a little, I see why they might think that if they think that. It's this or nothing, but I don't, I think that's a false choice.

• 1:05:38Katie Haun?

  I think that we can have both, and this is a really opportune moment to have both. And I think the, the question that has beleaguered the industry really has been the question over securities, commodities, which agencies are going to have jurisdiction? I think that's a bigger question, and I think it would be a real shame if we let this moment go to waste. You know, the irony too, so you have some stable coins or only stable coin companies who are like, yep, genius act and move on. They don't want to get dragged into this broader, um, kind of a more omnibus package, right?

• 1:06:10Jordi Hays?

  Yeah.

• 1:06:10Katie Haun?

  With the market structure legislation, but I think that's a missed opportunity. And I think we'll be sorry as an industry if we don't go for both now. Again, go for the touchdown. Um, and with, you know, I think all of the, like I told you, all of the fundamentals are kind of working all at once together now when I last talked to you guys.

• 1:06:27Jordi Hays?

  Yeah.

• 1:06:28Katie Haun?

  And that's very much part of it, so why would we not go for that? So I think some folks who don't maybe have an appreciation for how, sometimes, sorry to say it, slow Congress operates. They've been trying to update the money laundering laws for two decades. Um, and it's like out of sight, out of mind sometimes. And I think we have a really unique moment to press for both here. And the irony is some Democrats who are opposed to market structure, um, you know, had they, because of abuse, potential abuses, or who are opposed to the crypto industry. They cite abuses, they cite fraud, um, they cite speculation, they cite Trump coin. And I, I get all of those criticisms, but I'll tell you what, had the market structure bill been passed, that would have answered a lot of those questions.

• 1:07:11Jordi Hays?

  Totally.

• 1:07:12Katie Haun?

  The irony is if you would have had the market structure bill, you wouldn't have had a lot of the blowups that you had in the past several years in this industry.

• 1:07:19Jordi Hays?

  Totally. Is crypto truly coming home to America? We went through a period where crypto is being pushed offshore. We've heard over the last year that some crypto founders feel like they can come back to the States now, maybe actually have an office stateside. Are you seeing more and more momentum there with, with some of this positive regulatory movement? Uh, or is, or are you still seeing momentum around, uh, places offshore, Singapore, et cetera?

• 1:07:48Katie Haun?

  I think, look, everywhere that you're going to want to develop does is going to have some rules that you're going to have to follow. When I hear founders who say there is no regulate, it's often that there is no regulatory regime whatsoever. Sorry, Balaji, if you're watching. But I am seeing that onshoring a bit. We were kind of seeing the offshoring in an unfortunate way, but it's not only regulation that matters. It's hiring top talent. And currently, there's top talent right here in Silicon Valley and other places in the world. I mean, you mentioned Singapore. Singapore has top talent, to be sure. But you know, there's a lot going for the US. So we're still very optimistic. And I don't think it, but we were getting to a very dangerous point with the crypto industry had the likes

• 1:08:32Katie Haun?

  of Gensler and others like him been left kind of to just do this. Now, fortunately, the courts were pushing back. So it wasn't a partisan issue. It was just the courts were starting to say, no, you've gone too far. I mean, I lost track now. I literally lost track of how many federal courts of all political persuasions and appointments ruled against Gensler's regime. And not just Gensler, but others like it where you had very activist regulators who were really far out of their lane. And, and you saw courts curbing back on that. So I think that was already, we're at a dangerous spot, but the courts were maybe going to save us. But you don't only want to rely on litigation to save you, of course, because then you've already lost. But I think hiring talent is

• 1:09:15Katie Haun?

  important. I think, you know, access to capital and traditional venture, maybe that's a little different in the crypto asset class. But I think also fundamentally, what you have going on right here now with AI, particularly in Silicon Valley, and we've talked a little bit at the early stage about some of the synergies between AI and crypto, because of course, AI creates digital abundance and blockchains are good at enforcing digital scarcity. And I think you're going to see more and more synergies emerge and use cases over time. And I'm not going to say what they are, because you know, we've seen that before in crypto, a lot of over promising, under delivering on use cases. So let's just stick to, right now, we see synergies. There's a lot happening in Silicon Valley, obviously

• 1:09:57Katie Haun?

  with AI. We think that's going to benefit the crypto industry. And so, in addition to regulatory clarity, if you're a founder, you want access to great talent, you want your visa situations sorted out for your employees, you want

• 1:10:12Katie Haun?

  Access to other founders, depending on what type of company you are, you want access to capital. So I am optimistic about the state of crypto in the US, but also elsewhere. And we invest in companies, we invested in squads, we've announced that. And I know Stepan, one of the founders of squads, watches your show. But Stepan's based right now overseas. And I was just having a conversation with him about how do we get you to come and bring squads to the US?

• 1:10:42Jordi Hays?

  Awesome, awesome.

• 1:10:44John Coogan?

  I want to talk about the longer tail of regulation because it seems like the stablecoin bill is very straightforward. Like the least, the least ambiguity there. Then you have the Market Structure Act and there's a lot more to do there. But I'm sure that there's like riders getting pitched and all sorts of long tail things. Like, how much are we actually like, where does the line end between what we're actually trying to define versus what we're still in the exploration phase of? Because you have NFTs, crypto gaming, there's, you know, prediction markets. There's so many different crypto applications that trying to kind of do them all at once, maybe that's the right approach.

• 1:11:26John Coogan?

  Maybe these need to be handled like after we've done the technological exploration. But what's your view on kind of the long?

• 1:11:33Katie Haun?

  My view on that is no, because we can't just, but we can't have an NFT bill, a bill for bank contracts. Or we can't have specific bills. And if you saw, if you think back to the advent of internet, that's not what we had. You know, we had section 230, it applied broadly to platforms. And I think we need something similar here. So on the one hand, I would say it can't be so specific that it's like, okay, if you're a, you know, events contract platform, it's this rule. And if you're an NFT player, because again, we don't even know yet what will be created.

• 1:12:08Katie Haun?

  Really, at the end of the day, we've seen some early use cases with product market fit. Obviously, chief example of that is Bitcoin. But what if we had had this conversation, guys, back in 2010? And you said, okay, we've got Satoshi's white paper and there's this thing called Bitcoin. Let's pass some crypto regulation, which has just been for Bitcoin. And that would have been a mistake because then a couple of years later on the scene, we have ETH. And a few years later, we have Solana. So I think what we need to do, so you don't wait for the end state. Have any regulation, right? You don't do regulation by enforcement. I can tell you what we don't do. We don't do regulation by enforcement. You don't wait till the end state of things, but nor do you want to get so with such specificity today and do the

• 1:12:49Katie Haun?

  current state of regulation by the end state of regulation. That you can't do either. And so I think what you have are some guiding principles, some generic rules of the road. And really, that's all the market structure bill is. And there's enough clarity that you had Democrats vote for it last time it came up. So it's not like it's so specific. It talks about, and I think, look, I think you have people like Hester Purce, who is SEC Commissioner, has written and given speeches on this of what that ought to look like. What is a decentralization test? And those are some guiding principles that you can kind of look at and apply as you think through this legislation. You know, what body ought to regulate it? And sure, you're gonna have some outliers and new technologies emerge

• 1:13:32Katie Haun?

  that you're like, okay, does this fit neatly in the bill? No, but we have laws for everything in this country with technologies that develop that don't fit neatly in a particular bill. And that's why we have, that's why we actually have, we don't do regulation by enforcement. We do notice and comment. We do things like advisory opinions. Certain bodies, by the way, do do advisory opinions, not judges. And then if all else fails, you do go and sometimes seek Article Three, seek a judicial interpretation. But I think that's, like I said, that's kind of the failure state if you're having to go to the courts. But indeed, that's what was happening because we were getting no rules of the road and we were only getting unfair regulation by enforcement. And I say unfair because Gary

• 1:14:15Katie Haun?

  Gensler basically picked what should have been the best companies, a crypt of the poster children for compliance and brought enforcement actions against them. And then the complete spectacular disasters didn't bring anything. So until after the fact. And so I think regulation by

• 1:14:33Jordi Hays?

  We gotta have you and Gary on the show to hash it out. I'm sure you guys have

• 1:14:38John Coogan?

  This is fantastic, though.

• 1:14:40Jordi Hays?

  had some funny conversations.

• 1:14:41John Coogan?

  Thank you so much for hopping on.

• 1:14:41Katie Haun?

  Yeah, thanks guys for having me.

• 1:14:42Jordi Hays?

  Great having you.

• 1:14:43John Coogan?

  Have a good rest of your day.

• 1:14:45Jordi Hays?

  Talk soon. Cheers.

• 1:14:46Katie Haun?

  Okay, bye bye.

• 1:14:47John Coogan?

  Up next, we have Justine Moore from Andreessen Horowitz. Incredible map knowledge dropped a fantastic market map all around AI image, AI video models. We're gonna have her take us through it. Welcome to the show. How are you doing?

• 1:15:04John Coogan?

  Can you hear us?

• 1:15:05Jordi Hays?

  Can you hear us?

• 1:15:06John Coogan?

  Hello?

• 1:15:08Justine Moore?

  Oh, I can hear you guys now. Sorry.

• 1:15:09Jordi Hays?

  There we go.

• 1:15:10John Coogan?

  Hey.

• 1:15:11Jordi Hays?

  I was saying to John, when you dropped your new market map, I was saying, you know, it's a great sign of respect in our culture to drop a new market map and come on the show.

• 1:15:20John Coogan?

  I've been incredibly bullish on market maps. I find them extremely interesting and I think they got a bad rap a couple of years ago, but I'm glad you've stayed the course.

• 1:15:29Jordi Hays?

  We are pro, strongly pro market map.

• 1:15:32John Coogan?

  Yes.

• 1:15:32Justine Moore?

  The people love market maps. It's like you can guarantee a popular tweet if it has a market map in it.

• 1:15:37John Coogan?

  Absolutely. And I think people got kind of sick of like, oh, like we know the playbook. We've seen it, but there's a playbook for a reason. It works. So yeah, take us through the latest market map. What are you tracking? How did you decide what to divide it up into? And, and what, what kind of inspired this moment specifically?

• 1:15:55Justine Moore?

  Yes. So I mostly do AI creative tools here at A16Z. So I spend like all my time testing all of the image, video, audio, et cetera. And obviously the past few months in particular, video has been like the thing. There's been like VO3, obviously, which was a massive moment with adding the audio for the generations. Hydra around the talking characters, the new Mini Max model, the new ByteDance model, Seed Dance, which is in the arena, already outperforming VO3. So it just felt like a good time to refresh sort of what's going on in the video space. And I kind of formatted this market map, just thinking about more from the perspective of a creator, like less in terms of the go-to-market

• 1:16:39Justine Moore?

  of the company, more just like if you're a person trying to create a video with AI, where would you go for these different use cases? So there's first sort of the model, like the foundation model companies where it's either text to video or image to video. Most places do both, where they actually take your input, generate, have their own proprietary model that generates the video for you. So that's the, the VOs, the Clings, the Runways, the Picas. And then there's also now this emergence of what I call like multimodal apps, places like Kria and Flora and Visual Electric that enable you to run a bunch of models in one place. So like, if you want to take a single prompt or a

• 1:17:23Justine Moore?

  single image and see what it looks like in five different models, super easily, you can do it somewhere like that. And then the other side of this market map is sort of like what happens when you add speech and talking characters. And so some folks do that by like generating a talking avatar from an image where you can eventually have the person move. And other folks do that by taking like a video of a person and then applying lip sync over it and then syncing the audio. So that's sort of the distinction between talking avatars and lip sync.

• 1:17:54John Coogan?

  Yeah, it's interesting that you're in the consumer group because I can imagine that a lot of the talking avatar companies wind up selling to corporations that want to vend in talking avatars, for example. Are you seeing a lot of that? Or like, I guess, how rigorous or stringent are founders about like, hey, we are trying to build a consumer app, or we're just building a cool technology? And it might land as a consumer product, but it also might land as a B two B play?

• 1:18:21Justine Moore?

  Most people are not at all rigorous and often don't even know at the beginning. So what we actually saw with the first generation of AI video was it was only researchers making these like magical models. And they had no idea what the use cases were going to be. They all just put like a text prompt box in front of the model. And then you got an output and like, a big company and an individual were using the exact same interface. Now I think we're starting to see more at like what we call the app layer, which is essentially like, how do you productize this? How do you create workflow? And therefore, how do you go into specific verticals? Maybe an example of that is all of the like standalone video ad creation products. So things like Creative or captions where, or hey, Jen has

• 1:19:04Justine Moore?

  a product for this too, where you can literally just like paste in a link to your Amazon or Shopify store. It will pull all of the info about your product, your logo, your brand, and it will generate a talking head avatar, like holding your product and describing it. And that's something that like a VO3 or a cling, the general video model companies won't do today.

• 1:19:25John Coogan?

  Yeah. Um, where are you seeing the strongest like low churn adoption of these tools? Because just personally, like VO3 was the thing that got me to subscribe to Google Pro Max 25, which we can go into the names and how difficult it is to access these. But, but other than that, uh, there, there haven't, I haven't seen that many where like we've seen the ASMR stormtroopers or something, but, but it hasn't been clear to me that someone's building like the next Pixar and they're actually thinking about it like Mr. Beast and they're like, I'm building a studio. This is a business. I have ad integrations and I have a content schedule. It's very much in like the testing phase. We see the Studio Ghibli moments go viral.

• 1:20:06John Coogan?

  So where, where is like the true long-term value playing out right now?

• 1:20:12Justine Moore?

  Okay. On the content creation side, where we are at right now is actually, there's a bunch of content agencies, like, you know, there's a bunch, Wonder Studios, Dream Studios, there's, there's probably like 20 of them now. Uh, one called Paracosum, that's, that's really cool. Um, and these are people who are just early adopters of the tools and they're getting hired by brands and ad agencies and entertainment companies to use the tools for them uh, and make content. I think the problem now and what you're describing is like, the people at Pixar would have to know how to use the AI video tools and how to set up the workflow in order to create their next movie using AI. And we're not yet at like, the tools aren't mature enough and we don't have enough people who are working at those entertainment

• 1:20:55Justine Moore?

  companies who know how to use the tools, that it's primarily being done with these external AI native agencies or contractors today. Um, I think like one of the first AI IP we've seen is the Italian brain rot characters. I don't know if you guys.

• 1:21:10John Coogan?

  No, I don't know this.

• 1:21:12Justine Moore?

  Italian brain rot characters are huge, so I can't even say the names here because they will sound ridiculous. But, um, it's people basically making images of like an animated talking baseball bat and like a ballerina who's head is like a cup of cappuccino.

• 1:21:26John Coogan?

  Okay, okay.

• 1:21:27Justine Moore?

  And a shark who wears sneakers.

• 1:21:29John Coogan?

  Okay, but they're starting to build like a cinematic universe.

• 1:21:32Justine Moore?

  Oh, it's massive. Yeah. Accounts have like millions of followers.

• 1:21:35Jordi Hays?

  The world isn't ready for Italian brain rot.

• 1:21:38John Coogan?

  So is it, is it, uh, is it like decentralized in the sense that like I could just go and participate in this like broader trend?

• 1:21:46Justine Moore?

  So yes and no. I would say there were a couple of accounts that originated the first few characters and then other people started participating using the hashtags remixing.

• 1:21:56John Coogan?

  Okay.

• 1:21:56Justine Moore?

  And then the good, the characters that were good that came out of that sort of bubbled up to become part of the cinematic universe.

• 1:22:03John Coogan?

  The canon.

• 1:22:03Jordi Hays?

  They have Bombadiri Bombadiro Crocody Crocodyo, which is a bomber.

• 1:22:10Justine Moore?

  He's a crocodile plane that shoots bombs.

• 1:22:13John Coogan?

  This sounds like, yeah, yeah, super, super viral.

• 1:22:16Justine Moore?

  Yes.

• 1:22:16John Coogan?

  Your kids probably love it. It's wild.

• 1:22:21John Coogan?

  Before we go into more of the consumer side, talk to me about some of the, the more like niche, like B two B use cases, because I remember when like GPT three point five and we got four, four, uh, GPT four dropped, there were still like a lot of hallucinations, but you saw companies that were just like, yeah, like, sure, it's not incredible at writing poetry, but it's amazing at just like converting this messy text to JSON and they were all of a sudden just running tons and tons of queries. And so I would imagine that in a, in a, in a, in a video workflow, things like what runway was doing in the old days of just like green screening or the, the stuff that like artists aren't going to really get upset about because

• 1:23:03John Coogan?

  it just feels like a better, more advanced tool. Are, are a lot of these companies building tools like that? Or is all the focus just on like, let's one shot the next Oscar film?

• 1:23:12Justine Moore?

  Yeah, it's a great question. There's a decent amount of vertical focus. I think also like, it's very hard for this, for startups, like if you're not a Google to, or an OpenAI or whoever to play in the game of like, let's train the largest one-shot best video model. So a lot of them are focusing on verticals like Luma, which is a company we've invested in, did this really cool tool where you can upload like a, a nine by 16, like iPhone style video and you can just say extend and it just basically like out paints around the existing video and makes it look like, so you can just change the dimensions of your video really fast.

• 1:23:47John Coogan?

  Yeah.

• 1:23:48Justine Moore?

  Or there's companies like.

• 1:23:48John Coogan?

  More of just like a practical tool, but super useful for a bunch of creators that are filming vertical content probably, and they want to distribute in a horizontal format. So they just do that.

• 1:23:57Justine Moore?

  Yes, exactly.

• 1:23:58John Coogan?

  That makes a ton of sense.

• 1:23:59Justine Moore?

  Or, or something like Higgs field that it has all these really special effects, like motion lauras essentially. So you can take like an image of a car and just say like, this is like, here's a template of what a car explosion looks like, make this specific car explode. And then on the B2B side, we've seen a lot around like, how do you scale marketing or L and D or like executive presence type content? So like, you know, tools like Descript now allow you to take a video of someone talking and then change the word that they're saying by changing, like cloning their voice, having them, the voice say the new word, and then doing a new lip dub.

• 1:24:36John Coogan?

  Lip sync, yep.

• 1:24:37Justine Moore?

  So you could have your CEO sending what looks like a personalized holiday message to like every single customer or something like that.

• 1:24:43John Coogan?

  Yep, or maybe something worse with a phishing scam, but I'm sure we'll get into safety at some point.

• 1:24:48Jordi Hays?

  What do you, what do you think the long-term ambitions of companies like Google with Vio and ByteDance with their model, what do you think they want out of this category? They obviously have a massive edge. I saw Aneesh was posting about Google's edge or YouTube's edge around IP with Vio, you can generate.

• 1:25:11John Coogan?

  Yeah, what was going on there?

• 1:25:12Justine Moore?

  It's crazy.

• 1:25:13John Coogan?

  The Disney thing, is that like a real deal or is that just a beneficiary of like some sort of relationship?

• 1:25:18Jordi Hays?

  Yeah, then I want to get a sense of, do Google and ByteDance, do they want to be developer tools that just vend into a bunch of these platforms? Do they actually want to own the end customer? What is this market? Is there a generalized market in the long run of just generating funny videos for the average consumer? Or is it going to all be verticalized out where I want to generate ads? I maybe want to generate, you know, customized messages, but I want to understand, like, this is a good overview of all the, of the ways that you can generate content, but like, how does the market structure evolve?

• 1:25:53Justine Moore?

  Yes. Okay, on the IP question, I have not talked to Google's IP lawyers and I'm not an IP lawyer, but my understanding is Google.

• 1:26:01Jordi Hays?

  But this is legal advice, right?

• 1:26:02Justine Moore?

  Yeah, exactly.

• 1:26:03John Coogan?

  It's financial advice.

• 1:26:05Justine Moore?

  Our compliance team is going to love this.

• 1:26:07John Coogan?

  Yeah, they're going to love it.

• 1:26:08Jordi Hays?

  Sarcasm.

• 1:26:09Justine Moore?

  Uh, you can, uh, I, I think my sense is basically, you know, when YouTube came about, it was suddenly like all this IP content is on the internet. And Google cut deals with a bunch of the IP owners about essentially what, what can be posted on various Google properties? And if that content gets monetized, how it ends up going to the end rights holder. And so that's sort of the the working theory right now about like why V O three can generate IP content and not get sued? When a lot of other people are struggling with that. Um, in terms of the market dynamics, it's so fascinating, the question around like Google and ByteDance. And, and eventually I think Facebook I hear is going to do more in video soon as well. Um, like why they're doing it and what their strategy is.

• 1:26:51Justine Moore?

  I think first of all, like, if I'm one of those huge consumer giants, AI is such a massive shift in consumer behavior that like you want. If you want to own the interface to consumers, you probably want to own text, image and video generation as well. And they have the resources in terms of data, like YouTube, for example, is a perfect example of this. They have a ton of compute, they have a ton of money and they can hire the best researchers to build the best models. I think the question, as you sort of alluded to, is like, do they, do they sell those models via API? And let other people build the consumer experience on top of them? Or do they own the end to end consumer experience? My honest take on it so far has been like, it takes so long in the big company product teams to get stuff done and get new products out.

• 1:27:35Justine Moore?

  That like the model teams are just shipping the models and like pretty basic interfaces like Google Flow. And then the product teams are going to figure out if they can catch up with some kind of cool new consumer app later.

• 1:27:46Jordi Hays?

  Yeah.

• 1:27:46John Coogan?

  Uh, yeah, I mean.

• 1:27:47Jordi Hays?

  Yeah, my, my question is like, how much, uh, what will the market actually look like? For the average consumer wanting to generate images and video? Or will it just be something that people default to chat GPT? Cause maybe they already have a subscription or they're fine with the free tier. And it doesn't end up, there ends up being. A bunch of different applications on the enterprise B2B side, but then not so many like, you know, core consumer subscriptions on just like cool videos, pictures, et cetera.

• 1:28:19John Coogan?

  I mean, it seems like it's a killer, killer moat for Google Cloud Platform to have VO3 as an API, even if Google can't figure out how to productize it fully. It's like, they do seem to have a real moat. I want to get into that about, uh, YouTube is obviously an incredible training data resource.

• 1:28:36Justine Moore?

  Yeah.

• 1:28:36John Coogan?

  Uh, you mentioned that there was another company that, that just surpassed them. Was it Tencent, you said?

• 1:28:41Justine Moore?

  Uh, ByteDance.

• 1:28:42John Coogan?

  ByteDance, that's right. So, uh, I have a question about that because, um, obviously with CodeGen, uh, GitHub has a lot of public repos that people can probably just scrape. It's also just not that much data. You can probably fit it on a couple of hard drives, maybe sneak it out the back and go ahead of flight and, and train somewhere in Malaysia or something. You can't do that with YouTube. Like, it's just too much data. And so my question is, uh, is how durable, how much should we be thinking about a durable data moat in video generation for YouTube? Because it seems like something that they could really like clamp down on and would give them a durable advantage. But I don't know, there's so many other, there's so many other ways to attack any

• 1:29:27John Coogan?

  of these model developments.

• 1:29:28Justine Moore?

  Totally.

• 1:29:29John Coogan?

  There's a lot of different options.

• 1:29:31Justine Moore?

  So, there's a couple of parts of the data question.

• 1:29:33John Coogan?

  Yeah.

• 1:29:33Justine Moore?

  The first part is like, what do you own versus what do you scrape?

• 1:29:36John Coogan?

  Sure.

• 1:29:36Justine Moore?

  I mean, we've seen companies like OpenAI will, will scrape YouTube as well to train their models.

• 1:29:40John Coogan?

  Yeah.

• 1:29:40Justine Moore?

  I think ByteDance also like, you know, here we think of YouTube and Facebook and whatever here in the US, I mean, as, as being the big hosts of content. But like, there's all these massive companies in China like ByteDance who have their own, um, have, have their own user-generated content on like their version of TikTok and their version of YouTube and their version of all these.

• 1:29:59John Coogan?

  I'm sure there's reposts of American videos over there. So it's not like even has a unique flavor, probably can generalize pretty well, right?

• 1:30:05Justine Moore?

  Totally, though, yeah, like I was one of the very early users of all the Chinese video models when you still had to access them on Chinese apps with Chinese phone numbers and they were definitely very good at things that were more China oriented than than the US models.

• 1:30:21John Coogan?

  That makes tons of sense.

• 1:30:22Justine Moore?

  Um, oh, okay. The other, the other thing that's important to mention on data is in video in particular, it's not just the volume of data, it's also the quality of data and the quality of data labeling, because essentially you can't just feed a video into a video model and assume it can understand what's going on and, and pull out the relevant info. You have to have really sort of dense labels is what we call them, or super detailed captions about like, this is this style shot, shot from this sort of camera, the camera is coming from this angle, this is the sort of character, this is how the character is interacting with the background, and that quality data is what drives quality in the video models. Um, and China has really benefited there because there are so many more PhDs than there

• 1:31:04Justine Moore?

  are here, and it's much cheaper for these companies to hire them to do these, these dense labels for the video data.

• 1:31:13John Coogan?

  Yeah, well, how does Mid Journey fit into all of this now? It's such an interesting company because no venture dollars, this like behemoth kind of quietly hiding in a Discord server still. Uh, I saw some examples of video, it looked fantastic, seemed like they hadn't added audio yet, but how, how do they fit into the whole, the whole piece? Because it seemed like early on, they, they developed a really great, um, feedback loop for the data that maybe wasn't happening with some of the other model providers.

• 1:31:41Justine Moore?

  Yeah. So the Mid Journey model came out this morning, um, really conveniently like 10 minutes after I put out my market map without Mid Journey Video because it's not yet available. Um, I was just playing around with it too. It's, it's really cool. They do image to video, um, and they, and so they don't do text to video, which is actually sort of easier. They can start with their, the super high quality images that they generate on the platform and then animate those. I think they have like a low motion and a high motion setting. Um, from what I've tested so far, um, it's, it's better as sort of like a low motion scenery, environment, light interaction type thing. Like you have a photo of a person and you can then animate sort of rain and wind and them walking slowly.

• 1:32:22Justine Moore?

  And it's not as good at like what I call physics heavy world model type things, like two cars.

• 1:32:30Justine Moore?

  Running into each other and exploding.

• 1:32:32John Coogan?

  Yep.

• 1:32:32Justine Moore?

  That sort of thing requires a very, very large and costly, usually like text to video model that is more difficult to train. Whereas Mid Journey, I mean, I have no idea how they did it. It's a great model. They could have taken one of the open source image to video models and fine tuned it on all their own data.

• 1:32:50John Coogan?

  Yeah. Yeah, I've noticed VO3 is really, really good with some of that physics stuff, but it still gets confused. Like if a car is driving away, all of a sudden you'll be looking at the front of the car and then the back of the car and it'll get kind of mixed up.

• 1:33:01Justine Moore?

  Yes.

• 1:33:02John Coogan?

  But yeah.

• 1:33:03Jordi Hays?

  Are you, as, as all these different models have progressed, I always remember Brad and Trevor McFedries and just how early he was to tip what I think will be this like new wave.

• 1:33:17John Coogan?

  Is that Lil Mikayla?

• 1:33:18Jordi Hays?

  Yeah, Lil Mikayla, which was like basically CGI influencers. So very, very early, I think we're going to see a lot more of this. And we've seen some of this to date, but do you expect that to be kind of like a new, a new, like how bullish are you on, on sort of like entirely AI creators getting, getting real adoption, following, followings, turning into real businesses? I'm sure you've, you follow a bunch of them already.

• 1:33:46Justine Moore?

  Yeah, I'm, I'm personally super excited about it because it kind of separates the content from the character. Like now, you know, before AI, if you were on Instagram, like you were both the character and the person coming out with the content. And so you had to like look in a way and present yourself in a way and talk in a way that was like interesting to the Instagram algorithm. And now it's like anyone with a good idea can create a compelling character. And so I think some of those are human characters. I've already seen way too many examples in my reels feed of OnlyFans models who promote themselves with AI avatars of themselves now, which works shockingly well. There's some photorealistic human influencers, but honestly, some of the more interesting

• 1:34:28Justine Moore?

  ones are things that could never be influencers before AI. So there's one called like Raccoon Stole My iPhone and it's a, it's an AI raccoon influencer. There's like AI Caffey Bear influencers. There's like mystical creatures, like all of these things that just come out of people's imagination.

• 1:34:47Jordi Hays?

  Competing for mindshare with Instagram pet pages, you know, dog pages, things like that. Did you have a reaction to Fountainhead? It was the, or sorry, Mountainhead, not Fountainhead.

• 1:34:59George Hotz?

  Oh, yeah.

• 1:35:00Jordi Hays?

  Mountainhead, the movie, the core overarching theme was that basically deep fakes or AI-generated content had gotten so good that it was causing global unrest. Did it resonate at all? It does feel like I now have, you know, multiple times a day, I'm seeing content online and it's like getting, we're both in the community notes program. So it's like you see content getting community noted. It's one person says, "It's not real. Look at this link. It was this image. They redid it." Another person says, "It's real. Look at this." So it's like, I just assume that everything's fake and made up unless I see it, you know, with my own eyes. But I'm curious if you, if you, if it resonated at all with you.

• 1:35:42Justine Moore?

  So I've not, I largely consume AI slop, so I have not seen the movie. I should watch it.

• 1:35:48Jordi Hays?

  You should watch the movie, the motion picture on slop.

• 1:35:51Justine Moore?

  Yeah. Once they have that, I will watch the full film. But it's so interesting. We talked about this a lot, actually, with audio models with the last like election cycle because video, I think, wasn't there yet to have convincing deep fakes. But audio, like there were way less cases of, even though you could make really realistic voices cloning candidates and saying things that weren't true, there were way less examples than we thought of that actually like impacting any, any election in any sort of meaningful way. And I think part of it is like things like you mentioned, the community notes program where like you have sort of citizen watchdogs on various platforms saying, "This is real. This isn't real," running them through various sort of AI detectors. But I also think like people

• 1:36:34Justine Moore?

  are starting to develop more skepticism around everything they see online and whether or not it is real, which is probably not a terrible thing.

• 1:36:43John Coogan?

  Yeah, I had this take that After Effects would be more impactful on the election than AI video because like you can just show a clip of a burning building from 2020 and it's real video, but you recontextualize it and say, oh, you know, the, the, the Capitol's burning or something and it's from years ago or, or just, you know, speed up a video, slow it down, edit it out. They would do this with various politicians, you know, cut out the ums and ahs and they'll sound sharper, add a bunch of gaps and all of a sudden they sound like they're slower.

• 1:37:13Jordi Hays?

  Yeah, it even, you know, we're, we're here in LA and when all the imagery was coming out of the, the protests from a couple of weeks ago, it was like burning Waymos.

• 1:37:22John Coogan?

  Yep.

• 1:37:22Jordi Hays?

  Kind of looks like something you generate with VO3.

• 1:37:25John Coogan?

  Totally.

• 1:37:25Jordi Hays?

  Just because it was so symbolic and just such a crazy image. And then like make an image of a guy with a Mexican flag riding a, doing burnouts around a, a car that's on fire. And it's like, that looks like.

• 1:37:37John Coogan?

  And even, and even the, just the way that was photographed, there was like, it looked like all of Los Angeles was engulfed in flames, but it was really like one crazy block with a bunch of different angles.

• 1:37:47Justine Moore?

  Yeah.

• 1:37:47John Coogan?

  And then a bunch of different posts and, and you drive around and you'd be like, oh, there's not that much.

• 1:37:51Justine Moore?

  See, that's the other interesting thing is like even real footage can be manipulated.

• 1:37:55John Coogan?

  Totally.

• 1:37:55Justine Moore?

  Like any kind of story can be manipulated in a way like AI or not.

• 1:37:59Jordi Hays?

  Yeah. Are you, are you seeing, I think like, you know, there's exciting companies like WorldCoin, you know, doing like proof of human. Are you seeing any infrastructure players trying to like do anything on like content verification side and like trying to create some sort of mechanism to, to prove whether something was like authent, you know, actually shot on an iPhone, right?

• 1:38:24Justine Moore?

  Right.

• 1:38:25Jordi Hays?

  You know, proving through the metadata and some type of like public setting. Is there, is there any pitches from, from that side?

• 1:38:32Justine Moore?

  Yeah. So largely, honestly, today that has come in two places. One is the model companies themselves will often watermark the content in some way, like the VO3 generations has a little VO3, 11 Labs, which shows the audio. They actually have a site where you can upload any audio and it will tell you if it was generated with 11 Labs or not.

• 1:38:50Jordi Hays?

  That's cool.

• 1:38:51Justine Moore?

  Um, which, which is pretty cool. The other place we've seen development there is for like prominent individuals, um, like, you know, celebrities or someone who's, there's like value behind their brands and who potentially even might want to monetize it in the age of AI. Like if you're an actor and you suddenly don't have to. You know, film, go fly back to LA when you're filming a movie in Australia to tape like five ads for some cellphone brand and you can have your AI avatar generated to do it instead and it looks just as good. Like you might actually want to, you know, have some licensing company that owns your AI licensing rights, whether it's your traditional talent agency or not, who can manage that for you.

• 1:39:32Jordi Hays?

  Yeah, totally.

• 1:39:33John Coogan?

  Very cool. Well, thank you so much for stopping by. We could talk for another hour. I have so many more questions in the, in our doc, but we'll have to have you back. So thank you so much for stopping by.

• 1:39:40Justine Moore?

  Thanks, guys.

• 1:39:41Jordi Hays?

  Thanks, Christine.

• 1:39:41John Coogan?

  We'll talk to you soon.

• 1:39:42Jordi Hays?

  Great chatting. Have a good one. More breaking news. Nvidia to drop humanoid robots that will produce Nvidia GB 300 chips in Q1 of 2026. Nick says wholly based.

• 1:39:54John Coogan?

  That is so close.

• 1:39:56Jordi Hays?

  Foxconn in talks to deploy humanoid robots at Houston AI server making plant.

• 1:40:01John Coogan?

  Wow, that is extremely close.

• 1:40:02Jordi Hays?

  I don't totally understand this.

• 1:40:04John Coogan?

  What does that mean?

• 1:40:05Jordi Hays?

  I guess Fox, Foxconn has been training the robots to pick and place objects and insert cables.

• 1:40:10John Coogan?

  Yeah.

• 1:40:12Jordi Hays?

  I don't know if this is marketing.

• 1:40:14John Coogan?

  It feels like.

• 1:40:15Jordi Hays?

  We've had, we've, we've asked a bunch of robotics experts about humanoids and so far I haven't got a, I don't have the confidence that, that this is actually a super great use case for them.

• 1:40:31John Coogan?

  It's just the definition of like, what is humanoid? Because you go to a, you go to like a Ford F1, F150 factory and they have like massive robotic arms, like moving windshields around, right? Like, it's like you could anthropomorphize that by like spray painting it pink and putting some hair on the, on the hand and being like, it's a, it's humanoid now. But like, you could like retrofit every.

• 1:40:53Jordi Hays?

  Just give it more bicep definition.

• 1:40:55John Coogan?

  Totally. I mean, like, like Amazon has like tons of robots sliding around. You could put googly eyes on them and be like, they're humanoids now. And and you get maybe get like a stock bump, but like there's clearly things that are happening in the AI server assembly process that are using robotics, obviously, whether it's even just like conveyor belts or or, you know, the the three axis pick and place, you know, pick it up, put it over here, that type of stuff, just going to humanoids is just, it's like, well, will it have five fingers or will it have a just a grabber? Will it have legs or will it have wheels? Like, it could just be sitting there because for a lot of these pick and place jobs, you can just have the the humanoid sit there with a single arm mounted to the ground

• 1:41:39John Coogan?

  because the stuff comes to it. And so then you're just kind of in a, okay, we're in the arm business now. It feels it feels like it's a little bit wrapped in marketing lingo, but still cool that more companies are making humanoids because it does seem like a cool form factor that hopefully people will break through and get there. And this seems like, you know, a step in the right direction in the sense that it's a very defined task. I think when people think humanoid, they think some like my new touring test is is humanoid robotics will will be here and when they can put up a six minute Nürburgring time in a manual.

• 1:42:19Jordi Hays?

  Yeah, gated manual.

• 1:42:20John Coogan?

  In a gated manual. Because at that point, the they have to not just be a self-driving car, but they have to be able to, you know, negotiate the the wheel and the stick shift so so efficiently and so quickly that they are truly performing.

• 1:42:39Jordi Hays?

  Yeah, and a manual and a manual can be weirdly like probable probableistic, right? And that like you're like, you know, you can move the

• 1:42:46John Coogan?

  Synthesize a lot of data.

• 1:42:47Jordi Hays?

  Yeah, it's not it's not like, you know,

• 1:42:49John Coogan?

  Yeah.

• 1:42:50Jordi Hays?

  Perfect system, right?

• 1:42:51John Coogan?

  You're not gonna you're not gonna put up a a sub seven minute Nürburgring time with a Joe Biden walk.

• 1:42:56Jordi Hays?

  That's right.

• 1:42:57John Coogan?

  You're gonna have to be moving fast. Those actuators are gonna have to be

• 1:43:01Jordi Hays?

  That's right.

• 1:43:02John Coogan?

  High speed. So, yeah, I I don't know where all this goes, but I mean, exciting to see that they're that they're at least doing work on it because it seems like an important it's it's clearly an important path in the tech tree. We don't know how relevant it is to other to other formats, but cool to see a lot of money pouring into the sector from very big companies.

• 1:43:23Jordi Hays?

  So Foxconn will be announcing their robots in November and then deploying them shortly after. Our year 2026.

• 1:43:33John Coogan?

  I mean, Foxconn seems like the right builder for this. Unitree is already like feels like it's scaling up to the point where like Unitree robots should be usable in certain locations like they're not generalizable yet, but they're certainly if you train them on a specific task, they could do that task over and over and over again. The question is just like, like, you know, do you need five fingers, 10 fingers, 10 toes? Is that, is that really like the right form factor? Or, or should we be just doing things that are more specified? Because if you're, if you're, if the whole point of these humanoid robots is just AI server making, just assembly, just one, one spot on the manufacturing line could probably be a much more specialized robot. But will be cool to see. I'm sure we'll see a lot of viral videos about it. It'll be very cool.

• 1:44:14Jordi Hays?

  I invested in a company making robots for data centers. And they intentionally chose not to make it humanoid form factor. Which, and I think a lot of those, the reason behind that decision would also transfer to manufacturing setting, right? Which is like, do you need legs? If you can use wheels.

• 1:44:37John Coogan?

  I mean, data centers have the, the most perfectly polished floors with like no dust at all. Like it's, it's the, the perfect environment for a wheeled use case. At the same time, you probably need to have a very specific actuator for like unplugging and plugging the cable back in, right? And that's actually like, it's pretty hard to reach around the back of a computer and unplug an ethernet cable. And obviously the server racks are like designed to be worked on more, but still even the cabling is like very detailed work. And so if that's what they're trying to do, you probably need a specific actuator for that. We have our next guest in the studio, George Hots. How are you doing, George? Good to hear from you.

• 1:45:14Jordi Hays?

  What's going on? Welcome.

• 1:45:17John Coogan?

  Can we hear you?

• 1:45:19George Hotz?

  Oh, can you hear me?

• 1:45:20John Coogan?

  Yes, I can hear you.

• 1:45:21Jordi Hays?

  Gotcha.

• 1:45:23John Coogan?

  Well, let's kick it off with something simple. I want to take your temperature on AGI timelines, P Doom, the, the easy and fun stuff.

• 1:45:33George Hotz?

  I don't know what AGI means, and I don't know what you mean by Doom.

• 1:45:36John Coogan?

  No?

• 1:45:38John Coogan?

  Are these terms just like entirely irrelevant? I mean, now we've shifted to like super intelligence. They're all buzzwords, but at the same time, like there is, there is an idea of like the like, I don't know, the, the conversations may be shifting to like the AI generating more economic value than humans. Is that a relevant metric to track?

• 1:45:59George Hotz?

  Machines have been generating more economic value than humans since the industrial revolution.

• 1:46:04John Coogan?

  Is there some, is there some other metric that we, that we should be tracking?

• 1:46:09John Coogan?

  Or is it just like irrelevant?

• 1:46:10George Hotz?

  You're just talking about like hype, like, I don't know. I mean, I, I like, I don't know what you mean. Like you can talk about concrete things. The term like AGI means nothing, right? Like computers, everything that's a Turing machine is a general purpose computer. Is that what you call intelligence? I don't know what you mean. It's a linear regression intelligence. What if it's big enough? The Chinese does know Chinese.

• 1:46:33John Coogan?

  Yep. Um, what, what, I mean, what about, uh, uh, your, your decision to get on a spaceship, traveling at point nine C away from the, from the earth? Like, how close are we to that? Are we closer than the last time we talked, which was like a couple of years ago? And it seemed like it was maybe going to happen within your lifetime. Has it moved at all?

• 1:46:55George Hotz?

  Yeah, I don't know. I don't know if I'm actually going to get that spaceship, but it's kind of like in an ideal world, what I would want to do, you know?

• 1:47:02John Coogan?

  Yep.

• 1:47:02George Hotz?

  Just, just, just back away and chill. And don't look back, actually, you can't look back.

• 1:47:07John Coogan?

  You can't.

• 1:47:08George Hotz?

  Never look back. They're all there.

• 1:47:09John Coogan?

  You need the, you need the blast shield, right?

• 1:47:13George Hotz?

  You need the information shield.

• 1:47:15John Coogan?

  Information? What do you mean?

• 1:47:18George Hotz?

  Oh, that's how they're going to get you.

• 1:47:20John Coogan?

  Okay.

• 1:47:21George Hotz?

  Right? I mean, okay, so like, here's a way you can think about AI, right?

• 1:47:25John Coogan?

  Yeah.

• 1:47:25George Hotz?

  Um, imagine there were 10 CIA agents assigned to you. And they're running at a thousand X real time. So they're like hyper fast CIA agents that devote their entire lifespan to your day. And they're trying to manipulate you.

• 1:47:41George Hotz?

  Maybe to get you to buy things, maybe to get you to vote for a certain guy, whatever. But like, that's what you're gonna be up against with AI. What we're currently building, what, what, what, if you think about the biggest companies in AI, what they do is advertising. What advertising is, is just manipulation of humans. Um, so you're gonna have a team of CIA agents thinking about you and trying to manipulate you at all times. And now you see why you wanna head away at the speed of light, right?

• 1:48:05John Coogan?

  Mm-hmm.

• 1:48:05George Hotz?

  Even CIA agents can't beat that.

• 1:48:07John Coogan?

  Is there, is there some world where there's like a capital war and I'm paying for a more powerful ad blocker?

• 1:48:15George Hotz?

  Yeah, I mean, that sounds good. Like, another question is kinda to say like, okay, if you think that, you either think that current like capital accumulation dynamics are gonna continue and that the rich are gonna continue to get richer.

• 1:48:29John Coogan?

  Mm-hmm.

• 1:48:30George Hotz?

  And if you believe that, the question is kind of, well, how many people are gonna survive in the future? How many people are gonna have any modicum of independence?

• 1:48:36John Coogan?

  Mm-hmm.

• 1:48:37George Hotz?

  Um, right? Like, you have some far AI people who think that there's gonna be a singleton. Right? You think that there's gonna be literally one, right? Um, you know, some people maybe think it's 10, some people 1,000, 10,000. Uh, some people think that all the humans will get to continue to exist as independent entities. Are they already independent entities? That's a question, right? I don't know.

• 1:48:57John Coogan?

  Good question. Uh, I mean, if you were trying to put it in like the form of a bet, human population above or below 8 billion in 2030?

• 1:49:08George Hotz?

  Above, I think. I would just say that's a normal trend.

• 1:49:11John Coogan?

  Hopefully.

• 1:49:12George Hotz?

  But is that what the trend says? Yeah, just go for the trend says. I don't think there's gonna be any discontinuities to any trends, really.

• 1:49:18John Coogan?

  Well, yeah, I mean, I mean, at some point, uh, but, but the question is like, how far out do you have to go until you start seeing these effects?

• 1:49:25George Hotz?

  What do you mean by human, right? What about someone who lies in bed all day and watches TikTok? Are they human?

• 1:49:30John Coogan?

  Yeah, that is odd. They kinda drop out of society.

• 1:49:32Jordi Hays?

  I think, I think, uh, question that, that popped up for me is, is this, uh, all this debate about AI safety and what should labs be doing, what should labs not be doing? It feels like your angle is, it, it should be each individual's responsibility to look, to look after their own safety in the context of, of AI. Is that at all?

• 1:49:54George Hotz?

  I just, I, I just like this whole like should, shouldn't, like, what? I don't know. I'm not a sadistic fuck who wants to manipulate other people like the people in power. Like, I don't know.

• 1:50:04John Coogan?

  Yeah, but I mean, people still look to you as like an example of like uh someone who might have uh.

• 1:50:11George Hotz?

  Answers? No, I don't have any answers.

• 1:50:13John Coogan?

  Not not necessarily answers, just like uh.

• 1:50:16George Hotz?

  But you can buy my shitcoin. Here, can I share the shitcoin? Here you go. Just flick this QR code and you can buy a George Hots coin. And that will give you answers. You will find satisfaction and fulfillment in your life after purchasing a George Hots coin.

• 1:50:32John Coogan?

  Is that the end state? We all have our own coins?

• 1:50:35George Hotz?

  No, no, no, I don't mean it like that. I mean, like, I think that a lot of people are like, they don't really know what they're looking for. And that vacuum is is a very, uh, you know, it's very dangerous and it's gonna be filled by dumb shit. And don't have that vacuum, right? You gotta you gotta stand for something, you know, or something. I don't know.

• 1:50:55John Coogan?

  Yeah, I mean, do you think that there's a chance that someone is able to take a stand and and actually uh bend the arc of of AI progress in the way that uh, I mean, it happened with nuclear, right? Like, like, nuclear development did stall. There was a stagnation in real world build out of nuclear capability on the energy side.

• 1:51:19George Hotz?

  Yeah, I mean, there's a few things about nuclear that make it different. Uh, so nuclear, uh, even as a weapon is incredibly hard to deploy tactically. Right? So so if a country has has nuclear weapons, they're aside from like a mutually assured destruction idea, they're not all that useful. It's not like you can use a nuclear weapon to accomplish tactical objectives. You know, if you could, I think Russia would have already done it. Right? Russia has some tactical objectives they might want to accomplish, but uh nukes aren't really gonna do it, right? I mean, and from a pure real politik perspective, not even from a uh like, uh, oh, like a taboo moral perspective. Like, what do you want? An irradiated pile of rubble? Like, that's what you're gonna get. No. What you want is drones that are hyper-specific and can take out exactly who you want, can control areas, right? So like.

• 1:52:03George Hotz?

  As a military technology, nukes are not that good. AI is way better.

• 1:52:06John Coogan?

  Yeah, but what about it as an energy technology? It feels like the fear, like the memetic fear of nuclear war and total destruction caused a whole bunch of regulation to pour into a sector and essentially a stalling of nuclear energy build out. And if the AI doom scenario, whether it's real or not, becomes so memetically powerful that someone's able to harness that and actually say, if you try and build a big data center, we will shoot you, then maybe it stagnates? No?

• 1:52:35George Hotz?

  I really think that's the reason for nuclear. I think it has more to do with why we can't do other big infrastructure projects in this country, right? Like, it doesn't have to do with the new... We also can't build dams, right?

• 1:52:45John Coogan?

  Yeah.

• 1:52:46George Hotz?

  And if you look, like, that is the thing. If people think that there's some weird taboo around nuclear, right? But then, okay, look at hydroelectric, right? There's no taboo around hydroelectric. But China leads in installation of both nuclear and hydroelectric.

• 1:52:58John Coogan?

  It's different.

• 1:52:59George Hotz?

  And everything. It's almost like they're correlated, right? So the thing is not, there's a specific fear around nuclear. It's like, you know, the US decided that they're a developed country. We're not going to develop anymore because we're already developed. You see the D on the end, right? Like...

• 1:53:12John Coogan?

  Hmm, interesting, yeah. So is that just cultural then, when you, like, the malaise sets in? Would you expect that to happen to China when they catch up?

• 1:53:21George Hotz?

  I don't know. I, yeah, I mean, maybe it's just like this normal story arc of like, you know, it's, it's...

• 1:53:33George Hotz?

  I don't know. I don't know. I think that, like, you have a real problem when the kids can't live better than their parents.

• 1:53:38John Coogan?

  Yeah.

• 1:53:40George Hotz?

  So, but I don't have anything more to speculate on that.

• 1:53:44John Coogan?

  Do you have more context on China and specifically in like the AI context?

• 1:53:51George Hotz?

  US electricity looks like this, and China electricity looks like this.

• 1:53:54John Coogan?

  Is that all that matters?

• 1:53:55George Hotz?

  Pretty much, yeah. I mean, that's a pretty good proxy for everything, right?

• 1:53:59John Coogan?

  Yeah.

• 1:53:59George Hotz?

  Um, like, there's two things, there's two things, you know, people are like, George, how do you feel about the Trump administration? I'm looking at two things.

• 1:54:05John Coogan?

  Yeah.

• 1:54:06George Hotz?

  With any administration, I'm looking at two things. Did you decrease government spending?

• 1:54:10John Coogan?

  Mm-hmm.

• 1:54:11George Hotz?

  And did you increase total electricity production of America? Those are the only two numbers I care about. Those will capture everything.

• 1:54:16John Coogan?

  Why does, uh, why does government spending matter? We were joking that, you know, Trump must be extremely AGI-elled if he's running up a massive budget deficit.

• 1:54:26George Hotz?

  What the hell is AGI? I don't know what this is!

• 1:54:30John Coogan?

  Uh, like, in this formulation-

• 1:54:32Jordi Hays?

  Never seen it, never seen it.

• 1:54:33John Coogan?

  In this formulation, it's that, it's a-

• 1:54:35George Hotz?

  It adds numbers!

• 1:54:37John Coogan?

  Yes, yes, yes, but, but it, but it is an extra lever on, on labor and capital, and it creates more GDP that then can be taxed to pay down the increasing amount of debt.

• 1:54:46George Hotz?

  Super, super Excel.

• 1:54:48John Coogan?

  Yes, super Excel.

• 1:54:49George Hotz?

  What is, what is, what is super Excel do that normal Excel doesn't do?

• 1:54:52Jordi Hays?

  Let's give it up for better Excel.

• 1:54:55George Hotz?

  Yeah!

• 1:54:55John Coogan?

  Yes, yes, we need that.

• 1:54:56George Hotz?

  Excel 2.0, right?

• 1:54:59John Coogan?

  Yes.

• 1:54:59Jordi Hays?

  The thing is, Excel was the, the final so- piece of software, and then, but in order to add another, you know, a hundred trillion dollars to, to global GDP, we needed to, like, kind of rebrand it. And so, now we get AGI.

• 1:55:13George Hotz?

  GDP is the, the complete, it's the biggest bullshit thing ever, right? Like, I always joke with my friend and I that we're gonna start companies and be billionaires, and I'll tell you how we're gonna do it, so I'll say-

• 1:55:20John Coogan?

  Okay.

• 1:55:21George Hotz?

  Alright, I start a company, he starts a company. Uh, we both write contracts to each other.

• 1:55:25John Coogan?

  Yep.

• 1:55:26George Hotz?

  Right? Like, I'll buy something from him for a million dollars, and he'll buy something from me for a million dollars. We'll just do this real fast, we'll keep passing the money back and forth. Whoa, look at our revenue! Wow, that all contributes to GDP! Wow, we made, we're billionaires overnight, right?

• 1:55:39John Coogan?

  Yep.

• 1:55:41George Hotz?

  Like, like, and that's, my argument is the economy is just that with a lot of extra steps, right? You can't, you, services is not part of GDP, this is complete nonsense. Right? You can't, you can't have services, you know, like, literally, literally, you take the steel out of the ground, you grow the corn, okay, that's GDP.

• 1:55:55John Coogan?

  But is, I mean, if, if that GDP is fake, is not the, is the deficit not fake? Like, is government spending less fake?

• 1:56:01George Hotz?

  No, we really owe that shit to people, it's not fake!

• 1:56:04John Coogan?

  But can't you just tax the fake, the fake money? Like, if you tax your scenario where you're generating a billion dollars in fake money?

• 1:56:10George Hotz?

  You can't tax the fake money because we're passing the same dollars back and forth. The minute you tax it, that falls off so fast.

• 1:56:17John Coogan?

  Yeah, yeah, yeah.

• 1:56:18George Hotz?

  You can only tax productive work.

• 1:56:23John Coogan?

  Is AMD doing productive work right now?

• 1:56:27George Hotz?

  AMD is doing alright. Yeah, I've heard Nvidia is really overvalued or AMD is really undervalued. It has to be one or the other.

• 1:56:33John Coogan?

  How does it all play out? Like, what does AMD actually need to do to get back on track or realize their potential?

• 1:56:39George Hotz?

  Nvidia needs to stumble. I mean, it worked for AMD and Intel, right? Like, so AMD ended up beating Intel in the entire, like, no one would buy a data center Intel CPU anymore.

• 1:56:48John Coogan?

  Yeah.

• 1:56:48George Hotz?

  And it's just because, well, you know, they stumbled and now Intel owns that market.

• 1:56:53John Coogan?

  Yeah.

• 1:56:53George Hotz?

  So, you know, AMD just sits there in second place.

• 1:56:57John Coogan?

  Okay.

• 1:56:57George Hotz?

  They're being a better second place than they were a few years ago.

• 1:57:00John Coogan?

  Yeah.

• 1:57:01George Hotz?

  And then when Nvidia stumbles, AMD is like, oh, hey, we're here.

• 1:57:05John Coogan?

  Is DGX Lepton, like, their cloud offering a potential stumbling block or is it, or is it the right move for them?

• 1:57:14George Hotz?

  I don't know what that is. What's an Nvidia cloud shit?

• 1:57:16John Coogan?

  Yeah, exactly.

• 1:57:17George Hotz?

  Cloud's dumb. Cloud's dumb. You can break AI down basically into like, there's like five tiers, right? Like, at the base level, you have like electricity and data centers and land and like things like that. Tier two are like TSMC, ASML, Samsung, Intel, right, fabs, Nvidia, AMD, OpenAI, Anthropic. And then on top, you have like completely worthless things like Curse and Windsurf. You know, these character AI, all these people who think, oh, with you up, we're gonna, we're gonna get the ARR. No, that worked in the web, it won't work for AI, and I can go into why, but it's kind of boring.

• 1:57:47John Coogan?

  I want, I want to hear why.

• 1:57:48Jordi Hays?

  Keep going, keep going.

• 1:57:50George Hotz?

  Basically, okay, so like, here's the difference between AI and web. When you want to run a service like Gmail, one server can serve 10,000 people easily, right? And there's no demand for like better Gmail, right? It's not like, it's not like I can click and get like, yeah, you could buy Gmail for all, it'll have a few things, but most people don't really care, right? There's no limit to the ceiling of how good you want your AI to be, right? Or how fast you want your AI to be. Maybe there's a limit to the speed, but like, when you're at like 1,000 tokens per second, I want the biggest model in the world, right? Like, so there's very little limit on that, but suddenly you can't serve 10,000 users from one server anymore. Right? And the whole dynamics of the web, the whole reason some of the value aggregated to these end players, and they still didn't aggregate to the Curse or the Windsurf.

• 1:58:34George Hotz?

  They aggregated to the OpenAI and the Anthropics, right? Nobody, nobody, nobody who built like an email client survived. They all got eaten up by the tier fours of the web, right? The Googles, the Facebooks. Um, all of these like app providers, right? Where's a Zynga today, you know? Like this already happened, right? People just don't, where's Zynga? Oh, Zynga is gonna be the next thing, man. Like, no, it's not. Facebook ate all of that value, right? Google ate all of the value from all the people building on top of Google. So the tier fours ate all that value.

• 1:59:01John Coogan?

  Yeah.

• 1:59:01George Hotz?

  So OpenAI, Anthropic will eat all the value from the cursors in the wind surf of the world. They'll acquire some of them. They'll compete with some of them, right? Same as you saw on the web. Uh, but I argue that the tier fours aren't even gonna have value. Because the tier fours are, this ain't the web. This ain't where you can have one server serve lots and lots and lots of people. You know, I'm running O three, I'm running, you know how much I cost OpenAI every month?

• 1:59:25George Hotz?

  I pay the $200 a month and I cost him a lot more than that. You can now click on Codex, yeah, spin up four nodes. Yeah, why would I not click four? It's not my computer.

• 1:59:37George Hotz?

  You gave me the button. Hey, I'm just using it.

• 1:59:41Jordi Hays?

  George Hotz, single-handedly bankrupts.

• 1:59:44John Coogan?

  So, is there, is there no value in just being the, the, the front end to AI applications to be like the, the, the, the front door? Just the, the, the default button? Because we see these, we see these, these, these, uh, these models kind of go back and forth in terms of benchmarks or what's hot. And there isn't as much customer churn as you would expect. Because people are, are just kind of like defaulted into the app that they installed whenever. And so even if Gemini gets better in terms of the actual performance metrics, people don't switch from OpenAI to Google overnight.

• 2:00:17George Hotz?

  It's so negligible. You gotta make something 10x better, right? You gotta make something 10x better. So like, thi- thi- this whole game is OpenAI's unless they stumble.

• 2:00:25John Coogan?

  Sure.

• 2:00:26George Hotz?

  Um, I'm not switching to Gemini because it's 20% better. I have downloads the new app and think about a whole new thing, right? No one's gonna switch.

• 2:00:32John Coogan?

  Is there, is there a chance for a company to kind of come out with something that's 10x better? With an algorithmic improvement or is it just a race for scale? Like, what could actually be that next? It felt like GPT 3.5 when they really broke through with Da Vinci and then 4.0 or, and then four. Like, it felt like this kind of like binary moment when a lot of people realized that this was usable for their daily life. Uh, even if it's just a Google search replacement or whatever, write a poem or whatever. Uh, like, a, a, a 10x, what you're describing, like a 10x improvement feels like that kind of like qualitative binary shift. Is that possible with just scale? Or is this something that we need a different model for?

• 2:01:15George Hotz?

  I don't know. Um, I don't know. I would bet majority still on like these big labs are also attracting the talent. Um, but it is also like, it it's a pretty commoditized, a lot more so than like Google search. Right? Like you can look at people track how far open source is behind. It's not that far behind.

• 2:01:34John Coogan?

  Yep.

• 2:01:35George Hotz?

  Um, so no, I I don't know. I think this game is mostly gonna be uh chat GPTs. I think Elon's aware of this too. That's why he's trying to go 10x bigger with the data center.

• 2:01:47John Coogan?

  Yep.

• 2:01:48George Hotz?

  We'll see. Maybe it'll work. You know, there's there's someone to bet on. Anthropic, I'm not that bullish on, but uh. Maybe.

• 2:01:56John Coogan?

  You you kind of predicted the uh the pre-training wall, uh but that's not a refutation of the bitter lesson. And we're gonna see similar scale play out reinforcement learning, or is there gonna be something else that we're building the big data centers for?

• 2:02:10George Hotz?

  There's something that we don't understand uh in terms of data efficiency. Um, so like when you think of how long it takes a GPT to learn to talk, like how much data it takes, it takes like terabytes of data. In order to make a GPT talk like a normal person, it takes terabytes of data.

• 2:02:26John Coogan?

  Okay.

• 2:02:26George Hotz?

  Whereas a human trains on megabytes.

• 2:02:28John Coogan?

  Yeah.

• 2:02:29George Hotz?

  Right? How is it that if you take all the texts that you've ever heard in your life and you you put it to whisper and you you uh you transcribe it? It's gonna be a couple of megabytes, 10 megabytes, maybe 100 megabytes.

• 2:02:38John Coogan?

  Yeah.

• 2:02:39George Hotz?

  So humans have this thousandx data efficiency.

• 2:02:42John Coogan?

  Hmm.

• 2:02:43George Hotz?

  Uh advantage. And we're gonna have to fix that if we want like reinforcement learning to work, especially like reinforcement learning that you wanna do in the real world. Uh humans could do, humans can learn from very few samples.

• 2:02:55John Coogan?

  Yep.

• 2:02:56George Hotz?

  Um, and yeah, I think that like it might be okay if these foundation models train unsupervised on lots and lots of stuff. But uh, yeah.

• 2:03:04John Coogan?

  Is that eh? Is that something that?

• 2:03:10John Coogan?

  Somebody's working on just like a new, more data efficient algorithm to drop into the pipeline, or do we have any like leads there? Because it feels like right now, we're going down the path of like reinforcement learning with verifiable rewards and we're going after like individual business use cases that are increasingly long tail and that could be kind of like valuable, but it doesn't feel like the breakthrough that you're talking about.

• 2:03:35George Hotz?

  Like, has there ever been a breakthrough, right? Like, people think GPTs were a breakthrough. Well, they weren't. Like, if you watch the world, it was just, it was all just...

• 2:03:44John Coogan?

  Smooth curve.

• 2:03:45George Hotz?

  But, but, but, but, what I will say about AI scaling laws, oh, man. You see, like, people get excited about AI scaling laws, but here's a pitch that'll kill your excitement immediately. Ready? AI scaling laws. You can put in exponentially more money to get linear returns.

• 2:04:00John Coogan?

  Exactly. Do you believe that the real value is investing in humanoid robotics, then?

• 2:04:12John Coogan?

  Have you heard this theory? So, so, I mean, if you, if you put exponential more money into humanoid robotics, assuming that they work and assuming you can, you can, like, if you make 10 times as many robots, you get 10 times as much output.

• 2:04:27George Hotz?

  Anyone, anyone who wants a humanoid robot has never worked in a factory in their life.

• 2:04:31John Coogan?

  Okay.

• 2:04:32George Hotz?

  Right?

• 2:04:32John Coogan?

  Break it down.

• 2:04:33George Hotz?

  No one wants a humanoid. Oh, yo, yo, it's gonna walk around. Oh, good thing it has legs, right? No. Here's what I'm not. Yeah, yeah. We got a laugh track. All right. Can you show me a robot arm that's capable of putting a screw in something?

• 2:04:48John Coogan?

  Probably.

• 2:04:49George Hotz?

  Put the screw in the thing.

• 2:04:50John Coogan?

  Yeah.

• 2:04:51George Hotz?

  No, no, no, no. Not like you carefully jigged up the screw with a screw dispenser, like the way a normal human does it, where the screw's sitting there in a little bucket on the thing and it picks up one screw and it puts it in, it takes the screwdriver.

• 2:05:02John Coogan?

  No, we're, no, we're, we're not close, but also it feels like we're not far. It feels like that's what, five years, 10 years?

• 2:05:08Jordi Hays?

  I feel like humanoids are this interesting sort of like space because a lot of smart people just say like, here's the 20 reasons why they won't work and like why we shouldn't build them. But then so much capital and so many different teams are trying to make them work that they, they very well might work for some things and like they just, humanity might brute force it because we saw it in a sci-fi movie, you know, 30 years ago.

• 2:05:33John Coogan?

  Why, why, why, why are we cooked on?

• 2:05:35George Hotz?

  This is as dumb as self-driving cars was, right? And nobody learns their lesson. And people like Kyle Boat should be ashamed of themselves. Like, they really should. These people who go and raise large amounts of money for another thing that like they should know. They should know better, right? Here's basically like, remember in 2012 and Google said that, you know, my, my, my 12-year-old daughter would never have to get her driver's license?

• 2:05:57John Coogan?

  Yeah.

• 2:05:58George Hotz?

  Come on, that's nonsense, right? And like now, okay, they shipped Waymo. It's in a few cities. They're tele-opted, right?

• 2:06:08Jordi Hays?

  Yeah, how, how, how tele-operated are they in your opinion? Is it, is it effectively one-to-one?

• 2:06:14George Hotz?

  It's more than one-to-one. There's probably about, I'd say there's 1.2 operators per car. Um, but it's not, they don't have a steering wheel and pedals.

• 2:06:21John Coogan?

  Yeah.

• 2:06:22George Hotz?

  It is, it is an autonomous system.

• 2:06:24John Coogan?

  Yeah.

• 2:06:24George Hotz?

  That they're probably doing some higher level inputs on. They're definitely like, say, when you can be aggressive, when you should slow down. Uh, you know, whether you can turn to the stop sign or not.

• 2:06:33John Coogan?

  Yeah.

• 2:06:34George Hotz?

  Um, you know, again, like here's, here's the simple reason to know that it's like that, right? There's definitely some tele-opt of the Waymos, right?

• 2:06:42John Coogan?

  Yeah.

• 2:06:42George Hotz?

  Have, have you ever seen a picture of that room?

• 2:06:44John Coogan?

  No.

• 2:06:45George Hotz?

  Yeah, why not?

• 2:06:47John Coogan?

  I've always thought it was like an ace up their sleeve because like if, if there's a lot of pressure on them to say these Waymos aren't safe. They can pull up, pull the, the sheet off of the ghost and say, there's actually a human in the loop. Don't worry, it's safer than you thought.

• 2:07:01George Hotz?

  Yeah, yeah, like, uh, you, the fact that you've never seen that room tells you that it's way worse than you think it is, right?

• 2:07:07John Coogan?

  Okay.

• 2:07:07George Hotz?

  Tells you that there's way more tele-opt than you think it is. If it was really one person supervising 10 cars, Google would post those pictures all over the place.

• 2:07:14John Coogan?

  Yes, yes.

• 2:07:14George Hotz?

  You don't see any pictures. There's, so Cruise, it actually came out, the lawsuit, I think it was like 1.5 or 1.7 humans per car, right?

• 2:07:21John Coogan?

  Or, or, or vice versa, like, right? 1.5 cars per person, right?

• 2:07:25George Hotz?

  No, no.

• 2:07:27John Coogan?

  Wait, more people than cars?

• 2:07:28Jordi Hays?

  Yeah, that's what he's saying.

• 2:07:29John Coogan?

  That's insane.

• 2:07:30George Hotz?

  It's still that.

• 2:07:31John Coogan?

  Cause an Uber only requires one person.

• 2:07:34Jordi Hays?

  Yeah, but, but so, so maybe the real innovation is just allowing somebody to get in a car with, and not have to talk about the weather or, or, you know?

• 2:07:42George Hotz?

  Exactly. I'll pay more for that. I'll pay more for that.

• 2:07:45John Coogan?

  Yeah, but I mean, is there any hope that we drive this down and we get to two cars per person, then four cars per person? It starts doubling exponentially and eventually like we are there?

• 2:07:54George Hotz?

  I mean, yeah, like, it's obviously going to happen, right? It's obviously eventually going to happen. If you want to see where the real state of the art of unsupervised self-driving is today, right, there's no person with FSD. When you get your Tesla, that's not telepath. You can go press FSD and that's real AI.

• 2:08:08John Coogan?

  Yep.

• 2:08:08George Hotz?

  Uh, and, well, you can see how good it is, right? Would I, uh, take a nap in there? Even for five minutes? Oh, A and L.

• 2:08:17John Coogan?

  Yeah.

• 2:08:18George Hotz?

  Um, you'd be super excited, right?

• 2:08:20John Coogan?

  How are things going on the commis side? Uh, give us the update there.

• 2:08:23George Hotz?

  Pretty good, you know? We're, we're, we're on track to, um, we're on track to be two years behind Tesla, so.

• 2:08:30John Coogan?

  There you go.

• 2:08:30George Hotz?

  So, so two years behind Tesla, uh, but, you know, here's why we win, right? Like, because, like, it's cheap. Uh, okay, so, when you think about self-driving cars, uh, it doesn't look anything like the rollout of Uber, right? Or Airbnb. When you roll out something like that, you're trying to roll out a two-sided marketplace. Uh, you gotta spend tons of money on customer acquisition costs. You've got to make sure that you've perfectly matched that marketplace right away. Because if drivers aren't getting rides, they're going to leave the platform. If riders have to wait to loan for drivers, they're going to leave the platform. So it's this careful balancing act, but once you get this marketplace, you got, you got a moat, right? Switching costs are real high. Try to get everybody to switch at the same time. It's a challenge point, never do it. Self-driving cars don't look anything like that. Self-driving cars look like scooters.

• 2:09:15John Coogan?

  Hmm.

• 2:09:17George Hotz?

  The only thing that it's going to take to roll out big fleets of self-driving cars is capital, right? It's just strictly a capital market. You could just, I can, if I look at a city, I can calculate how many Waymos there are. If I want to build my own network and deploy that network and run it at a lower cost, it's straight up capital. Easiest thing for investors to calculate. Very little risk. So, self-driving cars are going to be this awesome race to the bottom. Right, it's going to be like scooters, where there's going to be like 10 providers of these things for a while, and then they're going to consolidate, like, one's going to do it, but, um, yeah. Uh, people are really going to win.

• 2:09:48John Coogan?

  What is, what's most valuable in terms of developing the next, like, the next better version of full self-driving? Is it having a lot of data? Building a big data center? Having a great team to actually design the system? What's most important? Are they all equal?

• 2:10:06George Hotz?

  Yeah, all those things matter, right? I think the main thing that matters more than anything else is just time. Like, we're figuring things out, research, infrastructure's getting better. I think a lot of it's just infrastructure. My new company's AI infrastructure, right? Like, the infrastructure gets better. My, uh, my, uh, coworker has a saying, he's like, uh, what we do is that we make the, uh, hard things easy and the impossible things hard. And that's like the goal of infrastructure. So you build infrastructure, your infrastructure gets better. And then what was, what you couldn't even dream of doing 10 years ago is now one command today. And today, you know, what, what you, you, you, uh, yeah.

• 2:10:49John Coogan?

  What's the current use case for most people with tiny boxes?

• 2:10:54John Coogan?

  Yeah, is that, that's my design, right? You're not supposed to know, but I mean.

• 2:10:58George Hotz?

  So like, I sell a computer, it has specs, right? Like, so many people want to tell you, and I hate this, I hate this, they're telling you like how the product's gonna impact your life, or what you use the product for. Oh my God, who cares? Here's what it is. I'm gonna tell you what it is. That's your job, right? I'm not an advertiser.

• 2:11:16John Coogan?

  But I mean, I mean, our intern wants to build something with a tiny box. I want to give him some ideas.

• 2:11:22George Hotz?

  Go buy one. I don't know. Why do you want to build something with a tiny box? I mean, is it good? Yeah, it's just a, it's a bunch of GPUs in a box, you know, it's a nice little box.

• 2:11:30Jordi Hays?

  GPUs in a box. What, um, what robotic form factors are you most bullish on? We've touched humanoids, you gave a, you a great review there. We've touched autonomous vehicles, sounds like generally bullish, but capital wars, race to the bottom, uh, all that stuff. Are, are there any other kind of form factors that you're thinking about that you are generally optimistic or excited about?

• 2:11:55George Hotz?

  Arm. Maybe two arms, right? Just two arms, right? Cause I look, I run a factory, I run a factory in San Diego, we make all the cameras right here. And I can't wait to get a whole lot of robots in there. But, uh, I don't need humanoids. I'm just gonna stick two arms to the table. And then it's gonna grab a comma, it's gonna put the screen on the front, it's gonna flip it over, it's gonna put the four screws in it, then it's gonna pass it on.

• 2:12:18John Coogan?

  Yep.

• 2:12:19George Hotz?

  Alright, show me anything that's anywhere near that level today.

• 2:12:22John Coogan?

  Yeah, what, what, uh, what would you do if you were trying to build like a truly multi-purpose robotic arm?

• 2:12:29George Hotz?

  The arms are already good enough. It's the off-the-shelf arms are fine, it's all software. Again, it's always all software. Autonomous vehicles are all software. Robotics is all software. But everybody loves to bike shit.

• 2:12:40John Coogan?

  Yeah.

• 2:12:41George Hotz?

  Like, what color are we gonna paint the human ones?

• 2:12:43John Coogan?

  Yeah, yeah, yeah.

• 2:12:44George Hotz?

  Like, like, let's have a great conversation about that. Well, you know, we don't wanna paint them red, because that might scare people in a remote terminal. This is actually the level of stupidity that I see in most discussions about human or robots.

• 2:12:54John Coogan?

  Yeah.

• 2:12:54Jordi Hays?

  Would you, uh, would you trade in your legs for wheels if you could? I got that.

• 2:13:00George Hotz?

  Am I trading my legs for wheels?

• 2:13:01Jordi Hays?

  Yeah. This is a question from Aaron Frank, friend of the show. He's asking this in real time.

• 2:13:06George Hotz?

  You're a wheel guy then. Like, people would ask me if the wheels are, like, making a statement. I just don't wanna have to have this conversation all the time.

• 2:13:13John Coogan?

  Well, what about the sim-to-real gap in robotics? Like, how, how is, how is simulated data, you know, you build a bunch of data in Unreal Engine, then you try and transfer, learn it back? Uh, obviously, there's been a bunch of experiments of that with self-driving cars. Is that a path that we should be going down for the, for the robotic arm development?

• 2:13:33George Hotz?

  Yeah, so I think with a lot of sim-to-real stuff, the reason people are excited about it is because of that data efficiency gap we spoke about. Right? Like, current machine learning algorithms, like 1,000x less data efficient than humans. Uh, so, yeah, you're gonna need 1,000x more data, right? If a human can learn something in one exemplar, 10 examples, the computer's gonna need 1,000 or 10,000. Now, do you really wanna reset the stupid state of the physical world 10,000 times? You might do it 10, but you're not gonna do it 10,000, right?

• 2:14:00John Coogan?

  Yeah.

• 2:14:00George Hotz?

  So that's where you wanna simulate, or you can just click reset, and everything's back to exactly how it was. So I think this stuff's gonna play a role, but I think more fundamentally, that data efficiency gap has to be understood.

• 2:14:14Jordi Hays?

  We talked a little bit about coding agents. We talked about how you're bankrupting OpenAI by spinning up a lot of different codex agents. What, what other sort of agentic software are you excited about? Do you expect to, you know?

• 2:14:31George Hotz?

  What's agentic mean?

• 2:14:32Jordi Hays?

  Yeah, basically bots. It's like what we're calling bots now.

• 2:14:37George Hotz?

  What's a bot?

• 2:14:37Jordi Hays?

  But anyways, I just, you know, I don't know.

• 2:14:40George Hotz?

  From Star Trek?

• 2:14:42Jordi Hays?

  Yeah, yeah, maybe. No, but I think about a world in the future, you know, do you expect to be, I don't know if you're a Slack guy, an iMessage guy, Discord, maybe no messaging at all, just, you know, you know, telepathy. But, but do you expect a world in the future where you're just, you know, a perfect interaction between, you know, human employees and agents? Or is it, you know, going to be more like, you know, you'll do the odd deep research or maybe you send some automated outbound emails or have some codex bots running?

• 2:15:15George Hotz?

  I don't even like follow this.

• 2:15:17John Coogan?

  When do you think you'll be able to book a flight just by saying I'm trying to get to New York tomorrow?

• 2:15:21George Hotz?

  Oh, see, the worst part about this is like, like, and that's going to come pretty soon, actually.

• 2:15:26John Coogan?

  Okay.

• 2:15:26George Hotz?

  Right? We're going to pretty soon have computer use models that are actually capable of going to delta.com and booking a flight.

• 2:15:31John Coogan?

  Yeah.

• 2:15:32George Hotz?

  But then what's actually going to happen is Delta's going to partner with whatever company does that, and they're going to put it behind a stupid thing and like, yeah, so that's going to, yeah, that's going to be here in a few years, right? Not with agentic shit, but just with normal hooking the APIs together, right?

• 2:15:46John Coogan?

  Yeah. Wait, so yeah, what is the?

• 2:15:48Jordi Hays?

  It's bullish on APIs.

• 2:15:49John Coogan?

  What is the mistake about like the agentic buzzword? Like, what are people like even describing?

• 2:15:54George Hotz?

  Again, it's another thing that I really have no idea what it means. You know, I was hanging out with some friends last night and like, like my friend's in this VR company and the, you know, the, the CEO is really interested in things being open source. But he's also really interested in making sure that things are protecting our intellectual property and proprietary. And the truth is, He has no idea what the word open source means.

• 2:16:16John Coogan?

  Yeah.

• 2:16:17George Hotz?

  He has no idea what it means that they can copy a shit. Right? Like that's someone else confusing. He just, he just heard the word open source in some like buzzword thing. And he's like, do we have the open source? Do we have the open source in the thing?

• 2:16:28John Coogan?

  Okay, so. Check the box. Check the open source box. Okay. But let's protect our IP. Last question about the age, last question about the agentic buzzword. I think that there is something that people are picking up on, which is that these models seem to be very smart for short amount of time. But if you run them for a long time, they start hallucinating and going, going off the rails. And so you have like 10 minute AGI, it feels incredible. But as you let it run and do more work, you can't just say, hey, go do a week's worth of work. Come back to me when you're, but it's superhuman in one minute. And so is that kind of trade off curve real? And then is it just a matter of like better harnessing to actually get to two hours of work? Which is kind of what the agentic people are like advocating for.

• 2:17:12George Hotz?

  Uh, no, so I don't think it's better, harder, but this is definitely a real phenomenon.

• 2:17:15John Coogan?

  Okay.

• 2:17:15George Hotz?

  This is definitely a real phenomenon. Uh, you can experience this, there's papers exploring it.

• 2:17:20John Coogan?

  Yeah.

• 2:17:20George Hotz?

  Which show that if in 10 seconds, there's absolutely no way I'll come even close to a modern LLM.

• 2:17:27John Coogan?

  Totally.

• 2:17:28George Hotz?

  Um, because the first shot from the LLM is great.

• 2:17:31John Coogan?

  Yep.

• 2:17:32George Hotz?

  And then it kind of degrades and it degrades pretty quickly. We're, whereas humans look a lot more like this. Humans can stay coherent internally for much longer.

• 2:17:42John Coogan?

  Hmm.

• 2:17:43George Hotz?

  Um, so, yeah, I, I think that that's a real thing. I think that that's mostly going to be fixed by like long context.

• 2:17:53John Coogan?

  Just more energy.

• 2:17:54George Hotz?

  Long context RL.

• 2:17:56John Coogan?

  Okay.

• 2:17:57George Hotz?

  Yeah, just like, you just gotta do it. We'll figure out new ways to make the context better. We'll combine diffusion and, uh, and auto regression in some clever ways.

• 2:18:07John Coogan?

  Hmm.

• 2:18:08George Hotz?

  Uh, yeah, I, I think that this is just gonna be, uh, like, there's not gonna be a breakthrough here. There's not like one magical thing that we're missing.

• 2:18:14John Coogan?

  Yeah.

• 2:18:14George Hotz?

  I think it will be a continued plod, the same thing with data efficiency. I think people will start to care about it.

• 2:18:19John Coogan?

  Hmm.

• 2:18:19George Hotz?

  Some new tricks will come out, some of them will work, some of them won't work. We'll continue to do graduate student descent until we find a.

• 2:18:26Jordi Hays?

  Anything, anything, uh, last question for me, anything that you're particularly optimistic about? Anything you check the timeline and you think, this is awesome. I love this. I love this. I want to see more of this. A little, maybe a little white pill to kind of cap it off.

• 2:18:43George Hotz?

  Yeah. So here's something I'm optimistic about. That fact that the one server can't run 10,000 users. That is most of the reason that the modern internet, that, that's one of the reasons that the modern internet sucks. That, that, that so much of the stuff is in non-recurring expense. And then it becomes really, really hard to compete with these people. Right? Like you could run Twitter on one computer.

• 2:19:07John Coogan?

  Yeah.

• 2:19:08George Hotz?

  Right? And 20 people could do it too. But like they don't because again, these companies have moats and they invest in making sure that their moats can't be broken. With AI, I think there's going to be a much less of a vote. Especially when you look at the move from auto regression to diffusion. So auto regression can run in large batch sizes. When you run chat GPT, you're running with a whole bunch of other people on that same computer.

• 2:19:30John Coogan?

  Yeah.

• 2:19:31George Hotz?

  It's only a hundred. It's not 10,000, but still it's a hundred. Diffusion is running the cloud at batch size one. And once you're in batch size one land, running it locally starts to make sense. Actually running the models locally, or at least having your own computer in the cloud.

• 2:19:48John Coogan?

  Yeah.

• 2:19:48George Hotz?

  Not being some shared resource that's really controlled by some.

• 2:19:53John Coogan?

  Yeah.

• 2:19:56George Hotz?

  Um, so yeah, this was never a thing because you can't put lots of people on a GPU.

• 2:20:01John Coogan?

  That makes sense.

• 2:20:02George Hotz?

  They tried some weird stuff with the licensing, but yeah.

• 2:20:05John Coogan?

  Fantastic. Well, thank you so much for stopping by. This is a great conversation.

• 2:20:08Jordi Hays?

  Yeah, I wish we had a full hour. This is great.

• 2:20:09John Coogan?

  We'll talk to you soon, George.

• 2:20:11George Hotz?

  Cool. Bye.

• 2:20:12John Coogan?

  See you later.

• 2:20:12Jordi Hays?

  Cheers.