Weekly Recap: Sam vs. Elon, Cluely's Crazy Ad, UFC x Paramount, Apple's AI Robot

(00:00) - Intro (00:05) - Sam Altman vs. Elon Musk (25:34) - Roy Lee and Cluely's Curious Marketing Strategy (28:50) - Ads in ChatGPT (38:20) - Perplexity Wants to Buy Chrome (55:10) - UFC’s $7.7 Billion Paramount Deal (01:09:13) - Apple is Building a Robotic Siri For Your Home (01:28:40) - Slop vs. Steel Debate w/ Delian Asparouhov (Varda) & Everett Randle (Kleiner Perkins) 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/tbpn Fin - https://fin.ai/tbpn Graphite - https://graphite.dev Restream - https://restream.io Profound - https://tryprofound.com Julius AI - https://julius.ai Follow TBPN: https://TBPN.com https://x.com/tbpn https://open.spotify.com/show/2L6WMqY3GUPCGBD0dX6p00?si=674252d53acf4231 https://podcasts.apple.com/us/podcast/technology-brothers/id1772360235 https://www.youtube.com/@TBPNLive

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

• 0:05John Coogan?

  Jordy, what is going on in the timeline?

• 0:07Jordi Hays?

  We got a red flag.

• 0:08John Coogan?

  We got a red flag on the play. The timeline is in turmoil. Elon Musk and Sam Altman are fighting. Mom and dad are fighting. Mom and dad are fighting. Shots fired. This all started because of Apple, actually, not OpenAI, not X, not the everything app, but Apple and the iOS charts. So this started with Elon Musk posting, "Apple is behaving in a manner that makes it impossible for any AI company besides OpenAI to reach number one in the App Store, which is an unequivocal antitrust violation. XAI will take immediate legal action." Well,

• 0:51John Coogan?

  the the community notes section took immediate action and added a number of extra context that they thought people might want to know. First, in January of 2025, DeepSeek reached number one overall in the App Store, similar to how Ramp is our number one sponsor on this show. Time is money. Save both. Easy years, corporate cards, bill payments, accounting, and a whole lot more, all in one place, folks. Go to ramp.com. And just one month ago, on July 18, 2025, Perplexity reached number one overall in India's App Store. That's interesting. I didn't realize that.

• 1:24Jordi Hays?

  And Grok has hit number one in Japan.

• 1:26John Coogan?

  Oh, that's right. Yeah.

• 1:28Jordi Hays?

  Probably a number of factors contributing to that.

• 1:30John Coogan?

  So most of the AI apps live in the in the productivity section. So that must have been in that. But it's odd because it's like, we need a whole new set of of categories for the new AI apps. I feel like they should have their own category immediately. What are all the categories? I mean, productivity, I feel like that's everything from like spreadsheets to ChatGPT. Like, it's a pretty broad, it's a pretty broad category. And so, I mean, Apple probably needs to redo the the categories. Where are the categories? I feel like you can't, I feel like they're hard to find these days. They have editor choice apps, which we'll get into because, okay, so browse categories. They have Apple Vision Pro apps at the top.

• 2:12John Coogan?

  That's an odd choice for the iPhone version of the App Store. Then Apple Watch apps, then AR apps, then books, business, developer tools, education, entertainment, finance, food and drink.

• 2:25John Coogan?

  Food and drink gets its own

• 2:26Jordi Hays?

  Well, I'm looking at the global top charts right now are global for the US. So across all the different categories and right now chat GPT is number one. Number two is tea on her dating advice, which

• 2:37John Coogan?

  Wait, there's a new tea app?

• 2:39Jordi Hays?

  Which is helping men date safe.

• 2:41John Coogan?

  Wait, wait, so it's the men version?

• 2:43Jordi Hays?

  The male version of the tea app.

• 2:45John Coogan?

  It's men's cereal, but for the tea app.

• 2:48Jordi Hays?

  Rated, but it's number one in lifestyle and number two on the overall charts. Number three is tea dating. Four is threads, which apparently just crossed 400 million monthly active users.

• 2:59John Coogan?

  Adam Mosseri is not messing around over at Meta HQ.

• 3:02Jordi Hays?

  And Grok is number five.

• 3:03John Coogan?

  Okay, that's not that bad.

• 3:05Jordi Hays?

  This is despite Apple. I do believe that Elon is correct and that Apple's not including Grok in features, which are editorial decisions, editorial.

• 3:17John Coogan?

  Yeah, so, yeah, I mean, Doge Designer says Grok is the number two app and productivity number six overall. So why is it so hard to find? And what he's pointing out is that Elon Musk showed this. Grok is the smartest AI in the world and on the toughest tests and came first by far in coding, but is not mentioned at all under AI by Apple. So Apple did an editorial view on the AI powered apps and they listed out a bunch. Chat GPT, Google Gemini, Microsoft Copilot, Lightroom, Photo and Video Editor, which, I mean, I use it every once in a while, but it barely has AI features. It does not compare to a foundation model. It's not a chat interface.

• 3:56John Coogan?

  Then you have Canva, then you have Duolingo, which of course Duolingo uses artificial intelligence in some ways, but you don't think of it as like a competitor of Chat GPT. So this is clearly just like, here are some fun apps and we're using the AI buzzword over at Apple.

• 4:12Jordi Hays?

  And I think it's given, given the series of PR crises that Grok has experienced in the last, call it six weeks. I think it is fairly fair for the App Store to say, hey, let's let this breathe a little bit. We're not, we're not removing them from the App Store. We're not removing them from the rankings. They're still ranked, but maybe let's not feature it, given that it's been saying.

• 4:36John Coogan?

  Yeah, the other, the other interesting thing is like Grok usage has to be split across X and Grok, the actual app. Like I bet, I wouldn't be surprised if the majority of actual prompts or tokens flow through X, the everything app. Like that's certainly how I use Grok. When I use it, I usually start with a post, click the Grok button, then I'm going back and forth a little bit there. And then also, they actually have a pretty awesome flow where now on any image you see on X, you can press and hold and say, edit this in Grok. And then you can just type, you can just type Studio Ghibli and it just Ghibli's it right there in Grok.

• 5:19Jordi Hays?

  And they launched a feature to make, turn it into a video.

• 5:21John Coogan?

  Video, exactly. So all of those Grok tokens, all those Grok usages, that's going to feed into the X app, which again, they've always put X in news and not in social networking because I think it couldn't beat Facebook and Instagram, but it can beat like the, like the traditional news apps. So all of the different rankings are all very, it's all gamed in different ways. Some of them are momentum based, some of them are different categories. And I mean, we heard this from Nikita Beer, where he was saying that his last app that went super viral, he hid in the games section as to, those were his words,

• 6:01John Coogan?

  he hid because the game section is so crowded that people wouldn't see him climbing the rankings, but.

• 6:08Jordi Hays?

  Charts are based on acceleration broadly, not total usage.

• 6:12John Coogan?

  And there are only like 10 dominant social platforms. So if he had a ton of momentum, he'd probably be in the top 10. People would be screenshotting and being like, what is this? And it would be on Mark Zuckerberg's desk and Mark would have to be like, what's our plan to kill this? Yeah. As opposed to if you're hanging out in games next to 75 Candy Crush clones, you're, you could be doing well, but realistically, you're not, you're not really gaining that much, you're not drawing that much attention. Then at the last second, he swaps over to social networking where he actually wanted to be. And then he's at the top of the charts. Anyway.

• 6:45Jordi Hays?

  So Elon says Apple's behaving in a manner that makes it impossible for any AI company besides OpenAI to reach number one in the App Store. He starts getting community noted. Sam Altman fires back, says this is a remarkable claim, claims that Elon is using.

• 7:01Jordi Hays?

  X to benefit himself and his own companies and harm his competitors. Sam starts getting community noted. Elon fires back and says, you got 3 million views on your BS post. You liar, far more than I've received on many of mine, despite me having 50 times your follower account. Elon's getting community noted, but Sam fires back, skill issue or bots.

• 7:19John Coogan?

  Skill issue or bots.

• 7:21Jordi Hays?

  Anyways, based off of that, Sam says, will you sign an affidavit that you never directed changes to the X algorithm in a way that hurt your competitors or helped your own companies?

• 7:29John Coogan?

  Wait, who said that?

• 7:30Jordi Hays?

  This is Sam.

• 7:30John Coogan?

  Sam's an affidavit.

• 7:32Jordi Hays?

  I will apologize if so. One thing is that OpenAI has consistently dominated the narrative on X organically. Many of their-

• 7:43John Coogan?

  To some degree, I feel like, I feel like OpenAI has been more dominant just in the real world and actually Anthropic's done very well on X. And there's been this whole theme of like Claude has better vibes and big model smell and oh Claude code and stuff like-

• 8:00Jordi Hays?

  If Sam Altman puts a post up, he can put up a picture of a Death Star and get 20 million views, right? And so I don't believe that he's like shadow banned. I don't believe that anyone in OpenAI is like shadow banned or being held back in the algorithm. But somebody responded to this exchange-

• 8:18John Coogan?

  Well, really quickly, if Sam's worried about reach, he should be using Restream, putting his content all over the internet, Restream, one live destination, 30 plus destinations, multi-stream and reach your audience wherever they are. And thank you to everyone in the chat today. Mark, Siraj, we got Taylor, David, we got a whole crew here. Techno Chief, I believe, said good morning to me. Hello, Techno Chief.

• 8:39Jordi Hays?

  Good morning.

• 8:39John Coogan?

  Good to see you. And it's fun having all the crew assemble in the chat rooms. We actually can see the chat wherever it's happening, whether it's on X or on YouTube because of Restream. So thank you to Restream. Anyway, continue.

• 8:52Jordi Hays?

  A friend just, just messaged and said, somebody tell Elon to un-shadow ban me.

• 8:57John Coogan?

  Okay.

• 8:57Jordi Hays?

  And I think that-

• 8:58John Coogan?

  I think I know who this is.

• 9:00Jordi Hays?

  I think it's much more likely that, that it's a skill issue.

• 9:04John Coogan?

  I think it is a skill issue for this particular person.

• 9:06Jordi Hays?

  Sam is saying here, you never know, you never know. But somebody responded to Sam and Elon's exchange and they said, Grok, who's right? Don't be biased. And Grok fires back and says, based on verified evidence, Sam Altman is right. Apple antitrust claim is undermined by apps like DeepSeek and Perplexity, reaching number one in 2025. Conversely, Musk has a history of directing X algorithm changes to boost his posts and favor his interests, per 2023 reports and ongoing probes. Hypocrisy noted. So we'll see how long-

• 9:39John Coogan?

  Yeah, but this is 4D chess because in general, people don't believe Grok because they believe it to be insane.

• 9:45Jordi Hays?

  Well, it said some wild, wild thing.

• 9:47John Coogan?

  It said some crazy thing. And so if Grok is siding with Sam, people will be like, well, Grok's wrong. Elon's actually correct.

• 9:52Jordi Hays?

  Yeah.

• 9:53John Coogan?

  That's the beauty of these things.

• 9:54Jordi Hays?

  Elon is thinking, what have I created? Monster. This is like the child that, uh, what's the, what's, what's, what's that mythology where the child kills the-

• 10:07John Coogan?

  Oedipus Rex, of course.

• 10:08Jordi Hays?

  Yes, Oedipus Rex moment. Child's coming for the, for the father.

• 10:14John Coogan?

  Yeah.

• 10:16Jordi Hays?

  Well, we'll see how long Grok lasts.

• 10:18John Coogan?

  I don't know how much you want to play on that analogy. It gets pretty weird.

• 10:20Jordi Hays?

  It gets pretty weird.

• 10:21John Coogan?

  I mean, Oedipus marries his mother.

• 10:23Jordi Hays?

  Yes. But, uh, we'll see how long Grok lasts in the timeline today. See.

• 10:29John Coogan?

  We'll see, we'll see. So the, uh, yeah, the Wall Street Journal wrote it up. Um, "Apple is behaving in a manner that makes it impossible for any AI company besides OpenAI to reach, uh, number one. The App Store, which features lists of top and trending apps, is a key way for apps to access new customers. Apple doesn't say much about how or why it chooses particular apps to feature. Uh, among the factors, it considers its usability and positive reviews and ratings." Yeah, it's definitely getting more and more complex.

• 10:55Jordi Hays?

  It's just important to break out editorial decisions from the App Store team and true rankings, right?

• 11:02John Coogan?

  I mean, it, I, I really, I think a lot of people have not taken a tour of the modern App Store on iOS because it used to be that you just show up and there were, and there was just a list of, like, the charts were like a few clicks away. I'm like seven clicks deep. There's an ad for just Google, I guess, in here. There's Essentials that are just top games right now. Like, you have to scroll and scroll and scroll, and then you go over to apps, then you can- Browse the categories, but even when you browse the categories, you go to productivity. It's going to give you like the, when I go to productivity, you think I'd be browsing to hit like, okay, show me the top productivity apps.

• 11:43Jordi Hays?

  Yeah.

• 11:43John Coogan?

  No, it's, it's showing me an app called sofa, a downtime organizer. Then it's showing me essential productivity apps that are selected by the app store editors. Then the best calendar apps, best to do as, best email apps, best focus timer habit tracking. It's going, going, going.

• 11:59Jordi Hays?

  And the big question is how much, how much discovery is actually happening in the app store? Is this where people are actually finding?

• 12:05John Coogan?

  The top charts, but it's seven, it's seven clicks deep. And so, yeah, if I go to free apps, it's chat GPT number one, then Grok number two, then Microsoft Authenticator number three, AGI.

• 12:16John Coogan?

  For Microsoft Authenticator, maybe.

• 12:18Jordi Hays?

  Doesn't get enough love. No, but the, the question here is, are people discovering various L L Ms through Tik Tok?

• 12:25John Coogan?

  Yeah.

• 12:26Jordi Hays?

  And X and Instagram, various platforms, is that where discovery happen, is happening?

• 12:30John Coogan?

  Yeah.

• 12:30Jordi Hays?

  And I'm sure there's some discovery happening in the app store, but it, it has to be a very small fraction of the, the downloads being driven are, are actually driven by the editorial decisions from the, the app store.

• 12:42John Coogan?

  Of course, of course. Yeah. And, and games don't even show up in the top, like it's not, uh, games are not, it's completely separate tab. You cannot select games as one of the subcategories of apps because games are not considered apps anymore in the app store. To answer the question about like hiding in games.

• 13:00Jordi Hays?

  Um, yeah.

• 13:01John Coogan?

  The other, the other question is just like, how much, how fair is it to give yourself a little boost in your app that you paid $70 billion for?

• 13:10Jordi Hays?

  Yeah.

• 13:11John Coogan?

  Like I was thinking about this and I was saying like.

• 13:14Jordi Hays?

  Forty four billion.

• 13:15John Coogan?

  Well, he was 44.

• 13:16Jordi Hays?

  Yeah.

• 13:17John Coogan?

  Yeah, I was 44. It wasn't 69. I thought it was 69 for some reason. That was, that was the price per share was he, he paid so ridiculous. Anyway, um, I was thinking about like before the launch of Instagram stories.

• 13:31John Coogan?

  I didn't have a way to share Snapchat stories on Instagram. Like you could screenshot them, but there's no sort of like native way to share a link to a story that if someone on my Instagram feed sees it, it clicks and it automatically opens in Snapchat. Like there, it was always a walled garden. And then when Instagram stories came out, there was really no way to tie those two platforms together. Like in the, in the pre meta era, there was a way when you shared a post on Instagram to check a box and automatically share it to your Twitter. And it would not just share a link, it would share the actual photo with the comment.

• 14:15John Coogan?

  And it would work as a native post on X and it could, you know, not really go viral, but it could, it could, it existed on Twitter as like a first-class citizen in the sense that the image was there, there was no link. It was just like you had just actually opened the app, posted the same photo with proper crosspost, right? And then eventually, once Facebook bought Instagram, Twitter had to respond by breaking that integration. So early on Twitter had this very, this was like the Adam Bain era, like the early, back the Dick Costolo era. Twitter had this idea of like, we're going to be the command line for your life.

• 14:57John Coogan?

  And there was this idea of like, I'm going to be able to tweet at you to send money to you. Like the everything app idea is something that's over 13 years old at this point, maybe 15 years old at this point. Like the Twitter executives were thinking about this a long time ago, like being able to tweet money at you, being able to like use, use Twitter as kind of this like substrate or this like API for all sorts of things. Other apps would be built on top of Twitter. There was TweetDeck and Tweety Bird and like all these different, like the mobile app was by an independent developer. And they just didn't, and they were like, why would we need one? We just developed the protocol.

• 15:31Jordi Hays?

  Ready to do this too.

• 15:32John Coogan?

  Yeah, well, you need one because you want to stuff ads in it, obviously. And you want to monetize it and it makes a ton of sense. And so Elon came and killed all that, but yeah.

• 15:39Jordi Hays?

  The other challenge here is, is Grok. Has a variety of NSF W features.

• 15:47John Coogan?

  Yep.

• 15:48Jordi Hays?

  And when Apple is making editorial decisions about which apps to feature in the App Store.

• 15:54John Coogan?

  Yep.

• 15:54Jordi Hays?

  That is certainly going to be on their mind.

• 15:56John Coogan?

  We're having Eugenia from Replica on the show later today. I'm wondering if Replica, I think, is currently in the App Store with 226,000 reviews. Hasn't gotten kicked out. I'm trying to think if any other, if any other apps, so like OnlyFans, for example, does not have an app. I'm wondering if any of the, what Character AI does, right?

• 16:26John Coogan?

  So Apple's clearly drawn the line at like, like AI chatbots, even if they're somewhat erotic, are okay. But we.

• 16:37Jordi Hays?

  But that doesn't mean they're gonna, that doesn't mean they're gonna feature.

• 16:39John Coogan?

  They're not gonna promote it.

• 16:40Jordi Hays?

  To the average person on the App Store.

• 16:42John Coogan?

  Yeah, no, that's absolutely correct.

• 16:45Jordi Hays?

  So, and then again, I think it's very hard to say how Apple makes these editorial decisions.

• 16:52John Coogan?

  Yep.

• 16:52Jordi Hays?

  But it's very possible that they are talking with people on the Apple team and being like, what apps do you like?

• 16:58John Coogan?

  Yep.

• 16:59Jordi Hays?

  What apps are you using? Making decisions that way, right? I think, I think part of Grok over the last month or so is like figuring out like, how do we get strong consumer adoption? Which categories are we gonna get strong?

• 17:12John Coogan?

  I'll tell you how they get strong consumer adoption. SOC 2 compliance, they need to get on Vanta. Automate compliance, manage risk, prove trust continuously. Vanta's trust management platform takes the manual work out of your security and compliance process and replaces it with continuous automation, whether you're pursuing your first framework or managing a complex program. No, that is a good question. How can Grok actually get consumer adoption? The companion space seems like the, maybe the right move, even if it is a little weird. But is there any other path? I mean, forking it into X and Twitter and like having it show up on every post seems like a reasonable way. I wonder, it is weird that they have two apps. I thought X was supposed to be the everything app. Like, like, why are they trying to get me to install a second app when they should maybe just say,

• 17:57John Coogan?

  "Hey, we're actually going to be the everything app. You can use Grok fully, and you're all the upgrade and you can get on Grok heavy and you can be paying $200 a month for a top-tier, the super insane level LLM, but it all exists and it's all managed within the X app that already has a lot of it, a lot of installations."

• 18:16Jordi Hays?

  Yeah, it's a challenge. Your Grok is, is uh, top or near the top of a bunch of different benchmarks. And yet that doesn't guarantee consumer adoption, right? People don't switch products because something is 20% better in this technical way, right? They develop habits.

• 18:35John Coogan?

  Yeah.

• 18:36Jordi Hays?

  And the other thing, it was only a month ago, Grok or XAI announced a partnership with the Department of Defense, $200 million contract. So that's serious. But again, you know, figuring out where they're going to ramp revenue with consumers that, when it's not just bundled into X, the social media app.

• 18:55John Coogan?

  Yeah. I think it, it's interesting to, to debate, like, when can a new technology be bolted on and become additive to an existing platform versus you need a new app to actually get it to work? So Facebook actually rolled out a search engine in Facebook, the Blue app, like years ago. And when you would go to search, you could search for your friends, but then you could also go and it would search the web too. And it would say, "Hey, you're searching for this thing. Uh, there's no posts about it out there, so let's just pull from the web." And they basically built a search engine.

• 19:35Jordi Hays?

  Team, pull up this post from ChatGPT.

• 19:40Jordi Hays?

  I want to see John's live reaction to it.

• 19:42John Coogan?

  Okay, let me, let me see this post. Whereas, whereas like, like stories was something that was added on.

• 19:48Jordi Hays?

  So they chat GPT quoted Grok saying that Sam Altman is right and said, good bot.

• 19:54John Coogan?

  Good bot.

• 19:56John Coogan?

  Wow. Timelines in turmoil, you'll love to see it. It's a great day on the internet.

• 20:02John Coogan?

  But there's always, yeah. So, so I, I think there is something about like the pixel screen, the screen pixel real estate that is, um, that is somewhat like, like screen pixels are, are, uh, like scarce. And you can only do so much like it's, it's like Instagram was able to add reels as a tab, integrate those into the main feed. They were able to add stories up at the top as a little bar and it got crowded, but no, but Instagram did not, did not see massive churn.

• 20:32Jordi Hays?

  Yeah.

• 20:32John Coogan?

  But I think that if they, I'm, I really think if they try and stuff like, okay, yes, this is also like Claude code and you're going to like, do your, you're going to do your homework in Instagram now. You're going to do your, your, your software engineering in Instagram right now.

• 20:48Jordi Hays?

  Subway surfers up here. You're going to have a chat below.

• 20:51John Coogan?

  I think people will just say no. I think it's, I think it's too, too big of a step. Whereas going from photos to videos to reels to stories, like all of that works within the same kind of UX UI space. But if you try and bolt on like a productivity tool into a social network, it, it winds up being a little rough. And so maybe that's the reason why Elon like realizes that like Grok has to be a separate app. Because if I'm using Grok heavy to solve Olympic level math, I might not want that to happen on the chaos timeline feed. Right?

• 21:27Jordi Hays?

  Yeah. I mean, if, if

• 21:28John Coogan?

  But it's an uphill battle.

• 21:29Jordi Hays?

  If you're a software engineer working at a company and every time you, your, your boss walks up to talk to you about something, you're in X, the everything app. Just scroll on the timeline while coding, that might be tough, right? It might be better to be doing those, doing that coding work and, you know, with, with Grok, right?

• 21:47John Coogan?

  Put, put a spreadsheet in there. Put, put a database in there. Let me, let me build, let me build an entire business within the everything app. Tyler, what's your reaction today?

• 21:58Speaker 02

  Um, I think, so, so one thing I haven't think about is like, uh, I forget who it was, but someone said like,

• 22:05Speaker 02

  as a company, you want to like, do things that your competitor, that like, go against your competitors morals, right?

• 22:09John Coogan?

  Yeah, this was Paul Graham.

• 22:11Speaker 02

  Yeah, okay.

• 22:11John Coogan?

  It wasn't, it wasn't morals, but it was just like, the idea of counter positioning. This idea that like, Avi Schiffman at Friend, like, he's making a product that is a wearable AI device. And if he makes it look like an Apple product, and he makes it like, oh, it's instead of an AirPod and, you know, an iPhone, it's a necklace, like, and it has Apple design language, like, Apple will totally be able to just steamroll that by launching something very similar. Whereas if he comes out with something that has such a bizarre design, that Apple would be like, wow, if we try and copy him.

• 22:44Jordi Hays?

  And he's not trying to make it useful for anything other than being your friend, right? He's, he's, he's also counter positioning against ChatGPT, which is a tool. It's, it's not, its default state is not to be your friend. People use it that way, but, and, and in some ways, it's designed to, to function like that, but ultimately, yeah, I think he, he's found, he's carved out his own, and, and Grok did the same thing by coming out and, and like leaning really heavy into companionship, right?

• 23:14Speaker 02

  Yeah.

• 23:14Jordi Hays?

  That is a, that's something that OpenAI wasn't willing to do.

• 23:18Speaker 02

  If they're gonna go like, in that like, kind of counter positioning like, idea, I think they could also, I, I could see them doing almost like a Cluely type thing, where it's like, okay, you can use this for your homework, like, you make it very good, and like, you don't have to use like cheating per se, but I think that's like an interesting way that, like, if they want to go further down that, like, consumer kind of positioning.

• 23:38John Coogan?

  Yeah, it's just, it's odd that, it feels like they're trying to do a lot right now. They're still in the exploration phase because. I have, I mean, maybe this gets to like the value of transfer learning in reinforcement learning, but I have it, I have a hard time believing that many people who are in the market for like a companion are like, I definitely want it to be able to ace humanity's last exam. Like, I, in fact, in fact,

• 24:03Jordi Hays?

  Super important to me.

• 24:03John Coogan?

  In fact, I think that you might want a companion not to be better than you at math. I think you might want a companion that just kind of like, is like, oh yeah, I agree, man. Like that math problem is hard.

• 24:14Jordi Hays?

  This is a toxic friendship dynamic. People are like, I want, I want my friend to be great, but not better than me.

• 24:19John Coogan?

  Exactly. That, that's real. So they need to, they need to dumb it down. They need to be the inverse of bench hacking.

• 24:25Speaker 02

  Yeah, the, the truth seeking

• 24:26Jordi Hays?

  Yeah, the new meta is gonna be teaching your AI how to do things.

• 24:29John Coogan?

  Yeah, yeah, yeah.

• 24:30Jordi Hays?

  Teaching it history.

• 24:31John Coogan?

  Yeah.

• 24:31Jordi Hays?

  Teaching it how to do your homework.

• 24:33John Coogan?

  Yeah, yeah, yeah. I mean, the Feynman method. You teach and then you learn, you learn it like, I would probably learn more from teaching an LLM the answer to a problem than it trying to teach me. What were you about to say?

• 24:47Speaker 02

  I was gonna say like the, the truth seeking like idea of Grok seems very much like opposed to the companion aspect. Like, those seem like two different ends of.

• 24:56John Coogan?

  The hero of our group chat right now is one of the greatest fabulous in history. He's a, he's a serial liar, but, but, but he's the most entertaining character.

• 25:07Jordi Hays?

  Court jester.

• 25:07John Coogan?

  He's the court jester of our group chat because he hallucinates more than GPT-2. And it's fantastic. And, and, and it genuinely provides a lot of value than just someone who's like, oh, I will only give you things that are 100%. I will only say things that are 100% factual. I will only say things that are definitively provable. It's like, no, he, he, he throws out a lot of wild pitches, but every once in a while, you just slam it into the outfield. Roy Lee is in the news again. Uh, he bought a billboard in, uh, in Manhattan. Uh, and he said, uh, Alex Cohen says, fine. I'm starting to like the clearly guys because Roy put up a billboard that says, hi, I'm Roy.

• 25:49John Coogan?

  I'm 21, uh, missing an apostrophe on the second I'm clearly deliberate, uh, absolute wordsmith. This was very expensive. P L S. Buy my thing. Please buy my thing. Clearly.com. And John Chu coastal ventures says, this is why I invested in Roy Lee, once in a generation talent at tapping into culture and zeitgeist. This was a spicy post, people kind of going back and forth on whether or not this would actually deliver. Roy also put out a post saying that like, everything he does is for short form. So he bought this billboard. He expects it to convert on the short form that will be created around the billboard. Certainly feels like people will create, will take picture of this share.

• 26:31Jordi Hays?

  I mean, when you, when you look at, when you look at, um, I think what I'm interested to see from clearly is where they really get, where they really get long, you know, retention, right? Because they have.

• 26:45John Coogan?

  The top of funnels.

• 26:45Jordi Hays?

  Clearly they kind of, yeah.

• 26:47John Coogan?

  It's extremely full.

• 26:48Jordi Hays?

  Top of funnel marketing. Uh, but when you look at like, it doesn't, it seems like if they just focused on students, right? They seem to be in this kind of place where they're, they're thinking about enterprise.

• 27:00John Coogan?

  Markets for sure.

• 27:01Jordi Hays?

  Different markets, but if you look at the way that chat GPT is usage, uh, uh, basically tokens generated dropped as the summer started. That's a good, that's a good argument to say clearly could just focus on students for, for students that will eventually graduate into the workforce. And things like that. But anyway.

• 27:20John Coogan?

  They didn't make the top AI agents by revenue chart that Anand Sanwal shared, uh, said, who would you put your money today to win in the long term? The top was cursor at 500 million in annual revenue, uh, and they're making 3.2 million dollars in revenue per employee. Glean's at 100 million, Merkor's at 100 million, Repel's at 100 million.

• 27:42Jordi Hays?

  How are you defining an agent?

• 27:44John Coogan?

  I think it's just AI startups, anyone who's used the AI agent like meme basically.

• 27:50Jordi Hays?

  Stolen, the agents are gonna be pissed about this, stolen valor.

• 27:54John Coogan?

  I don't know.

• 27:55Jordi Hays?

  It's hard to call Merk or an AI agent.

• 27:57John Coogan?

  I agree with that one. That one feels particularly odd, but in Glean also.

• 28:01Jordi Hays?

  Even Glean is enterprise search.

• 28:04John Coogan?

  Yeah, it's search, but I would say Raplet is an agent company. It's kind of like every AI company is now, now, now an agent company. Harvey, you know, hasn't really branded themselves in agent.

• 28:15Jordi Hays?

  But it's interesting, like you're not putting Claude, you're gonna put cursor on here, which generates revenue from Claude code.

• 28:22John Coogan?

  Yeah.

• 28:22Jordi Hays?

  And is a Gentik IDE.

• 28:25John Coogan?

  Yeah, well, you don't put a drop is crazy and also not including ChatGPT, which has deep research, which is probably the most used AI agent in the world right now. I have to imagine just by number of queries. There, it's missing some stuff. It's missing some stuff, but it's okay. Also, Devon's not on here, which is kind of odd, but that's the nature of these lists. It's CB Insights, folks. They do the best they can. Let's pull up the videos of Sam Altman on AI ads, and I think it will crystallize a little bit of like what we mean when we mean like monetizing a free LLM, a free AI chat app.

• 29:05John Coogan?

  It doesn't necessarily mean stuffing display ads in there, just like the answer to Facebook's monetization problem was not banner ads on the, in the right bar. It was in feed ads that look, if you're watching reels and you see a reels ad, it looks exactly like a reel. And in fact, the best performing ads on Instagram reels feel just like user generated content. They don't look like Super Bowl ads.

• 29:29Jordi Hays?

  They're additive.

• 29:29John Coogan?

  They're, yeah, they're additive and people often enjoy them. And so that will be, at least this is the semi-analysis argument that I sort of agree with. That will be the like what we say about ads in AI. It will be more like commissions for agentic checkout, at least at least to start. So let's pull up the first video.

• 29:52Jordi Hays?

  In the example, right now, there's a lot of people that have websites that monetize with referrals to Amazon.

• 29:58John Coogan?

  Yep.

• 29:58Jordi Hays?

  And they're frustrated because a lot of the I mean, traffic, just like organic SEO is way down.

• 30:03John Coogan?

  Yep.

• 30:04Jordi Hays?

  And the general read here is that OpenAI will ultimately start to earn that same type of revenue that the publishers historically did.

• 30:13John Coogan?

  Yep, so there was a fireside chat at Harvard Business School with Sam Altman.

• 30:20Jordi Hays?

  Let's give it up for Harvard Business School.

• 30:21John Coogan?

  Let's give it up for Harvard Business School.

• 30:22Jordi Hays?

  The Harvard of business schools.

• 30:24John Coogan?

  That's what they've been saying, they've been saying. So he got a question from the audience about ad monetization and we'll hear how Sam Altman responded to it.

• 30:32Speaker 03

  Although fair, it could be a barrier for early-stage entrepreneurs or startups or even small businesses. Given this context, do you envision OpenAI exploring alternative monetization strategy that could include like free API access, perhaps supported by advertising or other methods to foster innovation in the future?

• 30:55Sam Altman?

  I will disclose just as like a personal bias that I hate ads. I think I think ads were important. We love ads. To give the early internet business model. But I think they they do sort of somewhat fundamentally misalign a user's incentives with the company providing the service.

• 31:17Sam Altman?

  Totally against them. Get the cheering ready for any flex. But I don't like them in general. And I think that ads plus AI is sort of uniquely unsettling to me. You know, when I when I think of like GPT writing me a response, if I had to go figure out, you know, exactly how much was who paying here to influence what I'm being shown. I don't think I would like that. The knowledge engine should be pure. I think I would like that even less. So there's something I really like about the simplicity of our model, which is we make great AI and you pay us for it. And it's like, we're just trying to do the best we can for you. And then

• 31:57John Coogan?

  Senator, we run ads.

• 31:58Sam Altman?

  that that has some inherent lack of access and inequality, we commit as a company to use a lot of what basically the rich people pay to give free access to the poor people or the poorer people. You see us do that today with the ChatGPT free tier. You'll see us do a lot more to make the free tier much better over time. And I'm interested in figuring out how we bring the equivalent concept to the API. But I I kind of think of ads as like a last resort for us for a business model. I would do it if it meant that was the

• 32:34John Coogan?

  That's where he says, he says, I kind of think of ads as a last resort of as a business model. But recently he dropped a new podcast. This was from, I think, a month ago. And it's from the OpenAI podcast. So you have to imagine that they that they that the the run of show and the talking points in here are very carefully selected to, you know, move the narrative forward and kind of educate the community on where the company is going. And so and so we'll pull up Sam Altman's interview on AGI GPT five and what's next from the OpenAI podcast.

• 33:10Speaker 05

  So that brings up the other question from people who are using this or skeptical is that OpenAI now has access to this data. And there's the concern one was about training, which OpenAI has been very clear about when or when not it's training, you have the options to turn that off. The other thing is like advertising, things like that. What's OpenAI's approach towards that? How are you going to handle that responsibility?

• 33:31Sam Altman?

  We haven't done any advertising product yet. I kind of, I mean, I'm not totally against it.

• 33:38John Coogan?

  Totally against it. Yeah.

• 33:40Sam Altman?

  Areas where I like ads. I think ads on Instagram, kind of cool.

• 33:45John Coogan?

  Yes, ads on Instagram, very cool. Let's go.

• 33:47Sam Altman?

  I am like.

• 33:50Sam Altman?

  I think it'd be very hard to, it would take a lot of care to get right.

• 33:53John Coogan?

  I have faith. I think you can do it.

• 33:55Sam Altman?

  People have a very high degree of trust in ChatGPT, which is interesting because like AI hostmates should be the tech that you don't trust that much.

• 34:02Speaker 05

  My friend's listening too, so I trust them.

• 34:04Sam Altman?

  People really do. But I think part of that is if you compare us to social media or, you know, web search or something, where you can kind of tell that you are

• 34:18Sam Altman?

  being monetized and the company is trying to like

• 34:20John Coogan?

  Yeah, you can see.

• 34:22Sam Altman?

  Good policies, no doubt, but also to kind of like

• 34:25John Coogan?

  This is the monetized block. This is the non-monetized block.

• 34:29Sam Altman?

  Whatever, like, you know, how much?

• 34:33Sam Altman?

  How much do you believe that like you're getting the thing that that company actually thinks is the best content for you versus something that's also trying to like interact with the ads? I, I think there's like, there's a psychological thing there. So for example, I think if we started modifying the output, like the stream that comes back from the LLM in exchange for who is paying us more, that would feel really bad.

• 34:59John Coogan?

  Yeah, this is a great solution. Give you the actual answer you want, but hey, these are the best headphones for you. But if you want me to buy them, I'm gonna have to go cook as an agent. I'm doing the work and I'm gonna take a cut of that. That's, that's amazing. I'm so down for that.

• 35:13Jordi Hays?

  Like, the agent's like, I'm getting paid either way.

• 35:17John Coogan?

  Yeah, exactly. And I could say, okay, which headphones do I want? Do I want the Sonys or do I want the or, or, or do I want the, the Apple AirPod Maxes? And if I decide the Apple ones, it goes, checks out, it uses some coupon code to get some

• 35:31Jordi Hays?

  Yeah, I mean, comparing, comparing this to the other ways that people discover products and services.

• 35:36John Coogan?

  Yeah.

• 35:37Jordi Hays?

  If somebody searches best luxury hotel in Hawaii, they're gonna get ads against that. And then they're gonna get organic rankings that aren't necessarily the truth, right? Because the truth is for something like best luxury hotel in Hawaii is very subjective.

• 35:55John Coogan?

  Yeah.

• 35:55Jordi Hays?

  Then they might go and try to get recommendations from an influencer.

• 35:59John Coogan?

  Yep.

• 36:00Jordi Hays?

  In hopefully the influencers disclosed.

• 36:03John Coogan?

  Yes.

• 36:03Jordi Hays?

  Whether or not they're being compensated by the advertiser.

• 36:06John Coogan?

  Yeah.

• 36:06Jordi Hays?

  And.

• 36:07John Coogan?

  So if I were to ask you as an influencer, like what design software would you recommend? Like, what would you say, just honestly?

• 36:15Jordi Hays?

  Figma.com.

• 36:17John Coogan?

  Think bigger, build faster. Figma helps design and development teams build great products together. This is a paid advertisement.

• 36:22Jordi Hays?

  But yeah, disclosure is super important.

• 36:24John Coogan?

  Exactly.

• 36:25Jordi Hays?

  And if, and if the influencer is saying like, oh yeah, I love this hotel.

• 36:29John Coogan?

  Yes.

• 36:29Jordi Hays?

  But that hotel is giving them like, you know, two weeks free a year.

• 36:33John Coogan?

  Yes.

• 36:34Jordi Hays?

  Then like, that's not, that's not a, the super ethical endorsement.

• 36:38John Coogan?

  Totally. Yeah, it needs to be disclosed. And then also, also the, the beauty of the L L M is that, is that like, the, like the, the recommendations are going to be able to be tailored. So best luxury hotel, well, if you're, if you really want a certain type of pillow, or you really want, you know, a, a, a pool in your unit, or you want it to be wheelchair accessible, or you want, you know, high ceilings, or you want, you know, beachfront access, like there's a million different parameters that could go into that.

• 37:06Jordi Hays?

  And the thing, the thing that chat G P T needs to.

• 37:08John Coogan?

  And then it could just, and then it just saves you the time at the very last step.

• 37:11Jordi Hays?

  Well, the thing that chat G P T needs to navigate is maintaining that trust.

• 37:15John Coogan?

  Yep.

• 37:15Jordi Hays?

  Right? I trust that Instagram is going to serve me ads.

• 37:19John Coogan?

  Yep.

• 37:19Jordi Hays?

  That, that I, I trust that they're going to try to serve me ads for things that I will want to buy.

• 37:25John Coogan?

  Yep.

• 37:25Jordi Hays?

  Right? Sometimes they serve me an ad, I'm like, this is, this looks garbage. I'm not going to buy it. Other times they serve me an ad, I'm like, this looks great. You're actually good, good call. I, I, I am interested in this product. And the thing is, is like, if chat, chat G P T has to maintain that trust, because if they recommend you a hotel, and they're like, you're going to love this. I know, I know what you like. You're going to love this hotel. And you go there and you spend all this money and you stay there and it's, and it's terrible.

• 37:47John Coogan?

  Yep.

• 37:47Jordi Hays?

  It's the same thing if, if you go to a friend for a recommendation for a hotel, they recommend you a hotel. You show up there and it's like, this is terrible.

• 37:54John Coogan?

  Yep.

• 37:54Jordi Hays?

  Like, why did you recommend this? And if they go, oh yeah, I recommended it because I was getting like seven percent referral fee. You're going to be like, what are you doing? Why are you monetizing me? Right? So I think like, it's a very, um, uh, it's an interesting challenge that they have, where they're going to be directing, already directing so much economic activity. And how do you monetize that in a sustainable, ethical way?

• 38:20John Coogan?

  Exclusive from the Wall Street Journal, AI startup Perplexity made an unsolicited long shot offer to buy Google's Chrome browser for 34.5 billion.

• 38:31Jordi Hays?

  This inspired me, John.

• 38:32John Coogan?

  Yes.

• 38:32Jordi Hays?

  Everybody needs to be making long shot offers.

• 38:35John Coogan?

  I agree.

• 38:35Jordi Hays?

  TBPN, let's, let's submit an offer to buy the Golden Gate Bridge.

• 38:39John Coogan?

  That's a good one. That's a good one.

• 38:41Jordi Hays?

  You've got to be thinking bigger.

• 38:43John Coogan?

  What else should we buy? I don't know. It's tough.

• 38:47Jordi Hays?

  Yeah, it's, it's really, when I saw this, it's funny to think that Sundar has to go to the board or like, probably send them an email and say like, I'm required to let you know that we've received this offer from Perplexity to buy one of the crown jewels of our product ecosystem.

• 39:07John Coogan?

  I wonder, I wonder how, how real this is. Like, it seems like we would, like, the reporting is pretty loose. We can read through this Wall Street Journal article and then kind of like, dig into it a little bit more. So, um, perplexity's offer is significantly more than its own valuation, which is estimated 18 billion. Has this ever been done before? Has any tech company been able to pull off an acquisition that's bigger than their own valuation?

• 39:36Jordi Hays?

  Totally. I mean, what was the, what was the slow ventures company that, that Metropolis, right? And they buy?

• 39:43John Coogan?

  Yeah.

• 39:44Jordi Hays?

  That was much larger, you know, basically more traditional.

• 39:46John Coogan?

  Kind of reverse merger almost.

• 39:47Jordi Hays?

  Yeah, exactly.

• 39:48John Coogan?

  Interesting.

• 39:49Jordi Hays?

  These things happen.

• 39:50John Coogan?

  So there's, there's also pressure. So estimates of Chrome's enterprise value vary widely, but recent ones have ranged between 20 billion and 50 billion. I have no idea how you got that. I feel like Chrome is probably more valuable than that just on, I mean, I imagine that the default search engine in Chrome has got to be as valuable as the default search engine in iOS Safari, right? And how much is Apple paying Google every year?

• 40:17Jordi Hays?

  20.

• 40:18John Coogan?

  Twenty billion?

• 40:19Jordi Hays?

  Per year.

• 40:20John Coogan?

  I mean, you'd pay, like, you'd pay way more than fifty billion dollars to get twenty billion dollars of profit every year. It's crazy. So that feels low. I don't know where, I don't know where those estimates came from, but they are apparently under pressure. U.S. District Judge Amit Meta is weighing whether to force Google to sell the browser as a means of weakening Google's stranglehold on web search. It's so, it's so interesting that, like, we're having this debate now. Like, Google's had ninety-nine percent of the web search market for two decades. And they finally have a crack in the, in the, in the, in the foundation with ChatGPT actually eroding things. AI, LLMs kind of upending web search dominance, like.

• 41:04Jordi Hays?

  Yeah, we're having, we're having James from Profound on later today, which, which is built a big business very quickly. Because consumers are now using something besides Google Search to, to do web searches.

• 41:16John Coogan?

  Yeah, this is like the last, this is, this is like completely the wrong time to be focused on this. Like, the ship has completely sailed. But that's kind of the, that's kind of the pace that the government operates at, so.

• 41:26Jordi Hays?

  The Journal says perplexity offer could be an attempt to signal to the judge that there's an interested buyer should he force a sale. I'm, I'm, I think there would be a lot of interested buyers if there was a forced sale.

• 41:37John Coogan?

  Yeah. Who else would buy it? Apple?

• 41:41John Coogan?

  Meta?

• 41:43John Coogan?

  Microsoft? Get Bingo in again?

• 41:45Jordi Hays?

  Bing. It's Bing, Bing.

• 41:47John Coogan?

  Bing it. I mean, Microsoft would have a wild strategy because they'd have all the code to ChatGPT, all the OpenAI intellectual property. Like, they could do, they could do what perplexity is thinking about, right?

• 42:00Jordi Hays?

  Yeah, I mean, what does this say, what does this say about, I mean, so they just launched the perplexity Comet browser.

• 42:09John Coogan?

  Daniel says Chrome's worth at least ninety to a hundred and twenty, Billy. I agree. I think twenty's, twenty's too low.

• 42:17Jordi Hays?

  But yeah, so they, so perplexity just launched Comet. We had Arvind on the show. He said this is a big, important bet for the company. If you're, if you just launched a browser and now you're saying that you want to buy to compete with Chrome, and now you're trying to buy Chrome. What does that say about the state of your new product?

• 42:40John Coogan?

  Like it's very clear that that even if you built a better product, the best product is not going to win. And we see this with the with the L L Ms like like the the leaderboards and the vibes shift constantly. But the consumer adoption is just around chat. Everyone just uses chat. That's the one that's broken through. That's the one that people are familiar with all over the United States and all over the world. And so it's it's very hard to break through, even if even if perplexity can like rocket to the top of the app store in India for a little bit. Like it's hard to hold on to when when the chat G P T snowball is just growing bigger and bigger every single day.

• 43:19Jordi Hays?

  Yeah.

• 43:20John Coogan?

  Much like the graphite snowball. Code review for the age of A I. Graphite helps teams on GitHub ship higher quality software faster. Get started for free. Graphite dot D E B.

• 43:29John Coogan?

  Is there a is there a poly market on perplexity? By the way, can you look that up?

• 43:33Jordi Hays?

  I will. Will perplexity acquire Chrome in twenty twenty five?

• 43:37John Coogan?

  What's the what's the market on it?

• 43:39Jordi Hays?

  When I posted about it earlier, it was at twelve percent. And it's and I said twelve seems quite hot. And it's now at three percent.

• 43:49John Coogan?

  It went down even though they're in the journal saying they're gonna do it. They're like.

• 43:54Jordi Hays?

  The market opened at thirty four percent.

• 43:56John Coogan?

  Okay.

• 43:57Jordi Hays?

  Like nine A M. When the news dropped and it's now down at three percent. So.

• 44:00John Coogan?

  Wait, just today it went from thirty four down to three. Wow, so this has basically been like debunked. Yeah. Makes sense.

• 44:06Jordi Hays?

  Yeah, I mean, there's.

• 44:09Jordi Hays?

  I would I would put the odds of this deal happening closer to zero percent than one percent.

• 44:17John Coogan?

  That sounds fair.

• 44:19Jordi Hays?

  But great way for perplexity to get.

• 44:22John Coogan?

  Yeah.

• 44:23Jordi Hays?

  In the journal.

• 44:23John Coogan?

  Call me. No, this is great for S E O. It definitely puts perplexity and web browser in the same key word.

• 44:30Jordi Hays?

  Perplexity was also bidding on Tik Tok.

• 44:33John Coogan?

  Yeah. Arvin loves a long shot bet, a long shot bid.

• 44:39Jordi Hays?

  I invited, I invited, I invited him on the show this morning. He, I don't think they want it.

• 44:44John Coogan?

  He's not ready for press.

• 44:45Jordi Hays?

  Not ready to chat, but we love a, we love a size Lord long shot offer.

• 44:50John Coogan?

  Keep throwing these out. More startups should do this. Google hasn't indicated a willingness to sell Chrome. In testimony this year, Pichai told the judge that forcing the company to sell it or share data with rivals would harm Google's business, deter it from investing in new technology and potentially create security risks. Chrome has roughly three and a half billion users worldwide. It's like, it's like perplexity has probably like millions of users, but it's just gonna take decades, even at reasonable growth rate to hit three billion. It's just so many people. And accounts for more than 60% of the global browser market. That's lower than I thought it would be.

• 45:27John Coogan?

  Founded in 2022, San Francisco, San Francisco-based perplexity recently released its own web browser called Comet to some of its users. Tyler, you've demoed these.

• 45:38Speaker 02

  Yeah.

• 45:38John Coogan?

  What do you daily drive in these days in terms of the web browser?

• 45:41Speaker 02

  I'm using old reliable Chrome.

• 45:43John Coogan?

  You're using Chrome?

• 45:43Speaker 02

  Yeah, I, I don't know. None of the agent browsers really seemed very helpful to me.

• 45:48John Coogan?

  Have you churned from Clueley too?

• 45:51Speaker 02

  Yeah, I started using that like, you know, right after the show ended. I was, I mean, I'm not doing interviews.

• 45:58John Coogan?

  I was thinking about like the Clueley pattern.

• 46:01Jordi Hays?

  What if Tyler was like, been using Clueley every day, hours a day. We're like, wait, you've been interviewing the other companies?

• 46:09John Coogan?

  Well, that's the thing is that I, when I was thinking about Clueley, I was actually wondering like if we ran the show through Clueley and we had like this, just this idea of like streaming audio essentially and streaming pixels. And then just somewhat random LLM queries firing all the time. Like, is that a good pattern versus?

• 46:32John Coogan?

  Chat GPT where you have to decide, okay, this is the time to query it. And so when I think about like the going to you and saying like the pull the poly market up on perplexity or tell me the market share for Chrome. Like if we could have something like clearly running and it's just a big screen there that I can see. And it's just pulling up answers to questions that it thinks we're about to talk about or ask or just adding context. Like that actually might be kind of useful to us. But I don't know if a tool like that exists. It also just might be so sloppy and so noisy and so it's heavy that it just doesn't math out. I don't know. Are there any, are there any value or like what, what, what's actually seeing breakout for you in terms of AI adoption?

• 47:17Speaker 02

  I mean, most of my time using AI tools is just like coding stuff.

• 47:20John Coogan?

  Yeah.

• 47:21Speaker 02

  So it's like Claude code, curse a little bit. Sometimes I just go raw chat GPT.com.

• 47:27John Coogan?

  Oh, that's raw.

• 47:28Speaker 02

  Yeah, yeah, just straight prompt like.

• 47:30John Coogan?

  What about raw text file? What happened to, what happened to good old fashioned just handwritten code? Farm the table code. Apparently not.

• 47:38Speaker 02

  Paste your raise code. But yeah, I don't know. I mean, like clearly I'm not like doing, I'm not doing like sales calls or like anything that really requires that kind of like interaction.

• 47:48John Coogan?

  Yeah.

• 47:48Speaker 02

  So not to be useful for me, but.

• 47:51John Coogan?

  Yeah, I wonder how the product will change because like the marketing is not going to stop. Like they are definitely going to keep filling that top funnel until they figure out the, the bottom of funnel and the, and the, and the churn. But, but I, I wonder what retention is like. I mean, I imagine that, you know, you bring in such a broad top of funnel. Like there's probably people that are sticking around. There's probably people that just sign up and forget their credit cards are down and they just pay for a while. Like, like the, the, the nature of just getting someone to convert for 20 bucks a month. They don't even have a free tier, right? Like you have to pay to like get, get up and running.

• 48:23Speaker 02

  No, they do have a free tier.

• 48:24John Coogan?

  They do. Okay.

• 48:25Speaker 02

  Yeah.

• 48:25John Coogan?

  Interesting.

• 48:28John Coogan?

  There was something, um, oh yeah. Tyler, did you see vibe sort? Someone wrote a sorting algorithm that uses L L F. You have to put in your, you have to put in your OpenAI API key and then it just passes the random list or the array of numbers to ChatGPT and asks ChatGPT to sort it and it just comes back with whatever it can do. And I was thinking that, have you, did you ever, did you ever have to do fizz buzz back in the day? Have you ever heard of it? Yeah, I've like heard of it. Yeah. We should, we should definitely do vibe fizz buzz where it, it, it, it, for each, for each number between one and a hundred, it queries, it queries the GPT five API to

• 49:11John Coogan?

  ask it, should it respond with the number fizz or buzz? The most, the most inefficient and most inference heavy fizz buzz answer possible. Anyway, back to perplexity. Perplexity told Sundar Pichai, as part of the proposed acquisition, it would maintain and support Chromium, the open source project that supports Chrome and other browsers. It also said it would continue placing Google as the default search engine within Chrome, though users could change settings. That's crazy because you would think the first thing you would do if you owned Chrome would be change the browser to mine. I'm getting those ad dollars, but I don't know. Maybe it's a nice olive branch in this somewhat, somewhat hypey offer.

• 49:54John Coogan?

  The Justice Department filed the antitrust case against Google in 2020 and just a few five years later, in addition to their here. In addition to forcing a sale of Chrome, the judge is considering limiting Google's ability to pay to be the default search engine on devices and browsers and requiring it to share data with rivals, among other things. In weighing potential remedies earlier this year, Meta questioned how much new AI chatbots might be whittling away at the traditional search business of which Google has 90% market share. So 60% share in browser, but 90% in search. So even, even for, there's 30% of people out there that are using Firefox or Brave or, or Edge, it's Edge, right? Is the Microsoft one? Yes.

• 50:39John Coogan?

  But then they, they, they use Edge, but then they still set their default to Google because Google has dominant, or maybe, maybe they're just Google users are querying more. I'm so.

• 50:49Jordi Hays?

  Fascinated by perplexity.

• 50:51John Coogan?

  Yeah.

• 50:51Jordi Hays?

  And I can't wait to see.

• 50:53John Coogan?

  It's perplexing.

• 50:54Jordi Hays?

  It's perplexing and I can't wait to see what ultimately becomes of the business. They're offering to buy TikTok. They're offering to buy Chrome. They're rumored, you know, there's rumor mill saying that Apple's kicking the tires on it. It's hard to tell where that's coming from, right? Is that just more marketing?

• 51:13John Coogan?

  Yeah.

• 51:13Jordi Hays?

  Perplexity. They have, I think the last reported number or the alleged number is something like 30 million monthly actives, which is a lot.

• 51:23John Coogan?

  Yeah.

• 51:23Jordi Hays?

  But it, but they have such a tiny share of overall queries.

• 51:27John Coogan?

  Yeah.

• 51:27Jordi Hays?

  That it becomes, and it's just clear that, that search

• 51:34Jordi Hays?

  feels like it'll be a winner take, take all market.

• 51:36John Coogan?

  Yep.

• 51:37Jordi Hays?

  And it's, it's, they're not going, you know, two years from now, if they're sitting at 30 million monthly actives or even a multiple of that, it's hard to see it, you know, being worth, uh, you know, significantly more than Snapchat, for example.

• 51:53John Coogan?

  Yeah. And I think that's why you're seeing Arvin talk about potentially maybe pivoting to B2B contacts with the Bloomberg thing. Um, it feels like if you're, if you're in a winner take all market and you're in the writings on the wall that you're not going to be the winner in that market, a B2B pivot feels like a decent move. You could even put kind of anthropic in that bucket where there was a time when it was like, oh, is everyone going to switch to Claude, like the app on their phone? And then it didn't play out that way. Now they have a dominant B2B business. So you could imagine that perplexity niches down, like the perplexity interface, the perplexity ability to, to, you know, like answer questions,

• 52:37John Coogan?

  act as a search engine, that feels valuable in enterprises. It feels value in finance. It feels valuable in medicine. If you, if you fine tune the service for that, uh, but it's just a very different business.

• 52:48Jordi Hays?

  Yeah.

• 52:48John Coogan?

  So they have to go through a little bit of a, uh, of a, of a rebuild or kind of read, readjustment, maybe. I don't know.

• 52:57Jordi Hays?

  Yeah. Yeah. I mean, at, at the end of the day, when, when Elon bought X, it took, it took someone like Elon to be able to put together the amount of. Equity and debt to buy that business.

• 53:10John Coogan?

  Yep.

• 53:10Jordi Hays?

  And he had to put a lot of his own capital on the line. And in this situation, and that was buying a business that generated a lot of advertising revenue. Right. It wasn't, it wasn't known as, it was a bit of a dog in some ways. Right. Maybe, maybe never was living up to its full potential. Where in this case, if you offered to buy Chrome and then in theory, you have to create an entire new economic model for the business because you don't have the Google Ads engine built into it. It's, it's hard to see. It feels like basically impossible to pull that amount of cap, to, to find people.

• 53:52John Coogan?

  Yeah. Call me when the Morgan Stanley associates are losing sleep.

• 53:56Jordi Hays?

  Good point.

• 53:56John Coogan?

  Unless, unless Morgan Stanley is, is burning the midnight oil.

• 54:00Jordi Hays?

  Yeah.

• 54:01John Coogan?

  Uh, this deal probably isn't happening.

• 54:03Jordi Hays?

  I'm remembering that exchange between Allison and Musk, basically saying, how much Allison's like, how much should I do? A billion? And Elon goes, I don't know. I think you should do like two.

• 54:15John Coogan?

  Yeah. It's great. Who, yeah. So, I mean, Arvin's got to, got to find some.

• 54:20Jordi Hays?

  You gotta get Larry.

• 54:21John Coogan?

  Get a few of those guys on board for sure.

• 54:23Jordi Hays?

  Thirty-four Larrys.

• 54:24John Coogan?

  Well, we have some big news in the TVPN world. We are officially partnered with Waymo via Spotify. Because Spotify has a partnership with Waymo. So you can listen to TVPN in Waymo's now.

• 54:35Jordi Hays?

  Now what?

• 54:35John Coogan?

  Yeah. This just dropped.

• 54:37Jordi Hays?

  Very cool.

• 54:38John Coogan?

  There's a new upgraded Spotify in Waymo launching today. Uh, Waymo put out the post two hours ago. You can connect your accounts and you can vibe. You can listen to TVPN in your Waymo, which is probably the most tech thing you could possibly do.

• 54:52Jordi Hays?

  A, a little birdie just told me that, uh, they spoke to a number of bankers that have not heard of the perplexity deal.

• 55:01John Coogan?

  Hmm.

• 55:02Jordi Hays?

  Which, uh, I imagine as it, as it firms up, if it firms up, they'll certainly hear about it.

• 55:10John Coogan?

  UFC landed a $7.7 billion deal with Paramount after a whirlwind 48 hours, according to TKO executives. But zoom out for me, explain UFC. This is, this is the punching one or the punching one and the kicking one?

• 55:26Jordi Hays?

  This is one of your best bits. So, Senra and I

• 55:29John Coogan?

  Yeah.

• 55:30Jordi Hays?

  Love UFC.

• 55:31John Coogan?

  Yep.

• 55:32Jordi Hays?

  And we'll text John.

• 55:33John Coogan?

  Yep.

• 55:33Jordi Hays?

  And say, "Hey, John, do you want to watch? You want to watch, come over and watch like the pay-per-view tonight?"

• 55:38John Coogan?

  Yeah.

• 55:38Jordi Hays?

  And John goes, "Awesome."

• 55:39John Coogan?

  I love watching the game, my boys.

• 55:40Jordi Hays?

  Who's playing tonight?

• 55:41John Coogan?

  Yeah, I mean, I'm there if the teams are good.

• 55:44Jordi Hays?

  Yeah.

• 55:44John Coogan?

  If there's a good matchup. Yeah, but it depends on who's starting. I want to know.

• 55:49Jordi Hays?

  The starting, it'll depend on the starting line.

• 55:50John Coogan?

  I want to know who's playing.

• 55:52Jordi Hays?

  So, UFC.

• 55:55John Coogan?

  The kicking and punching one.

• 55:56Jordi Hays?

  The kicking and punching one.

• 55:57John Coogan?

  They can do both.

• 55:58Jordi Hays?

  And wrestling.

• 55:58John Coogan?

  They can do wrestling, too.

• 55:59Jordi Hays?

  And choking.

• 56:01John Coogan?

  Okay.

• 56:01Jordi Hays?

  Rear naked chokes.

• 56:02John Coogan?

  Got it, got it, got it. Kind of a mixture of experts model in fighting sports.

• 56:07Jordi Hays?

  Yes. Got it.

• 56:08John Coogan?

  Multimodal.

• 56:10Jordi Hays?

  Yes, exactly. So, long relied on the pay-per-view model.

• 56:14John Coogan?

  Mm-hmm.

• 56:15Jordi Hays?

  Worked well before the internet and illegal streaming.

• 56:17John Coogan?

  Mm-hmm.

• 56:18Jordi Hays?

  And the pay-per-view model has been in decline.

• 56:20John Coogan?

  Mm-hmm.

• 56:21Jordi Hays?

  UFC has also struggled to surface new American superstars. A lot of the biggest stars are international, but UFC's biggest market is in the US. International stars have a lot of fans in the US, but they're not driving pay-per-views, right? People in Brazil are not paying $100 to watch a single card, right? And, so the pay-per-view model's been in decline. UFC's relationship with ESPN has been a little bit rocky.

• 56:54John Coogan?

  Pay-per-view model in decline, is that? Is that just because of the trends in like how, how yappy and how popular the fighters are? Or is there something else going on at like a technological level? Where, like, I don't have to click any buttons to open Instagram reels or TikTok or YouTube? And with pay-per-view, it's like technically difficult, it's kind of janky tech systems? Is that like a real, a real headwind, or is that like fake news?

• 57:21Jordi Hays?

  So there's definitely friction to buying pay-per-views.

• 57:23John Coogan?

  Yeah.

• 57:23Jordi Hays?

  You gotta like be on a traditional television.

• 57:26John Coogan?

  It's not like in-app purchase, like double tap and Face ID like that level.

• 57:30Jordi Hays?

  It's not that easy. I mean, I think you can go in the ESPN app and like buy the pay-per-view, but a lot of people aren't buying the pay-per-view to watch it on their phone.

• 57:37John Coogan?

  Sure.

• 57:37Jordi Hays?

  I think the bigger challenge and something that-

• 57:40John Coogan?

  And Apple would take 30% if you paid on your phone. So even then-

• 57:44Jordi Hays?

  I don't know because it's a real world-

• 57:46John Coogan?

  It's digital.

• 57:46Jordi Hays?

  Oh, because it's streaming?

• 57:47John Coogan?

  It's for sure. It's for sure digital. So-

• 57:49Jordi Hays?

  But the funny thing is-

• 57:50John Coogan?

  There's a ton of friction.

• 57:51Jordi Hays?

  Dana's been in this challenge because he gets very frustrated about illegal streams and he'll-

• 57:57John Coogan?

  Yep.

• 57:57Jordi Hays?

  Every now and then he'll be like, "If you're watching a stream tonight, illegal stream tonight, we're coming for you. We're coming for you." And everyone's like, "Okay. I don't know how you're planning to do that."

• 58:07John Coogan?

  Yep.

• 58:08Jordi Hays?

  But they try to take, I think that they try to like DDoS the various streaming sites.

• 58:14John Coogan?

  Oh, interesting.

• 58:15Jordi Hays?

  Like you can just like send a ton of-

• 58:17John Coogan?

  And then they probably have someone like talking to Twitch and being like, "We are going live right at this time. You need to have someone searching and taking down streams actively."

• 58:26Jordi Hays?

  Yeah, but there's plenty of other like more decentralized illegal streams that are happening-

• 58:31John Coogan?

  Kick and all these different ones. Yeah.

• 58:32Jordi Hays?

  Random URLs with-

• 58:34John Coogan?

  Yeah, yeah, yeah. Even just somebody spinning up like their own thing. Yeah.

• 58:37Jordi Hays?

  And so Dana was in a tough position because the more he talks about illegal streaming affecting the business, the more people are like, "Wait, I can stream illegally."

• 58:46John Coogan?

  It's a Streisand effect. Yeah.

• 58:47Jordi Hays?

  And so he had been looking for a new home for UFC. People had debated, you know, would Netflix be a potential buyer there? There's a lot of potential candidates.

• 58:58John Coogan?

  Meta Quest. You have to buy the headset. You gotta watch it in VR.

• 59:03Jordi Hays?

  I'm sure, I mean Dana's obviously on the Meta board and I'm sure that that idea got-

• 59:07John Coogan?

  I mean, $7.7 billion, that's one researcher. Just, just cut one, one headcount from MSL and you're good. And Zuck can just own all of UFC and be like, look, put on the headset or you don't get to watch.

• 59:20Jordi Hays?

  Yep. Well, the deal that was reported, uh, were in Yahoo Sports, how the UFC landed a $7.7 billion deal with Paramount after a whirlwind 48 hours, according to TKO execs.

• 59:32John Coogan?

  Even, even Dana White didn't see it.

• 59:34Jordi Hays?

  Beginning in 2026, all UFC events will stream on Paramount Plus with select events also airing on CBS. And, uh, so anyways, Ben Folks is reporting just how big of a surprise was the UFC's bombshell $7.7 billion deal with Paramount and CBS so big that even UFC CEO Dana White didn't see it coming. No, uh, this is a quote, "No, I didn't think this is where we'd end up," White said Monday during an appearance on the Pat McAfee Show. Shout out to Pat to discuss the new broadcasting rights deal. But this sort of, this, this is sort of how it played out. I love it. These guys are obviously smart guys, very aggressive. He's talking about the team, uh, the new team over at Paramount. So in an interview with CNBC, TKO President and CEO Mark Shapiro said he initially expected

• 1:00:18Jordi Hays?

  to make a deal that would bring only the UFC Fight Night events to Paramount, but after Skydance and Fight Night events have always aired on ESPN, just fully ad-supported.

• 1:00:27John Coogan?

  Yeah, got it.

• 1:00:27Jordi Hays?

  So, um, but after Skydance Media completed its deal to purchase control of Paramount last week, Shapiro said the deal for the entirety of the UFC's US broadcast rights came together in just 48 hours. Now, instead of just the 30 UFC Fight Night events per year, Paramount will feature, and the Fight Night events were, were events that wouldn't draw big pay-per-view buys.

• 1:00:47John Coogan?

  Those were not the numbered UFC events.

• 1:00:49Jordi Hays?

  Correct.

• 1:00:49John Coogan?

  It was the UFC 776. That's like pay-per-view. Fight Nights just random on the, on the TV.

• 1:00:56Jordi Hays?

  And there's only 13 of those events.

• 1:00:58John Coogan?

  Okay.

• 1:00:59Jordi Hays?

  Per year.

• 1:00:59John Coogan?

  13 numbered and 30 Fight Nights. So almost every week, there's something if you're a UFC fan. But you're really, once a month is when you really want to tune in.

• 1:01:08Jordi Hays?

  But for the, they, they sort of depend on more casual fans historically to drive pay-per-views. People that are like, I watch UFC when Conor McGregor's fighting, right?

• 1:01:18John Coogan?

  Yeah.

• 1:01:19Jordi Hays?

  That's what really...

• 1:01:20John Coogan?

  Spike, spike the pay-per-view and have kind of a power law outcome that day.

• 1:01:23Jordi Hays?

  People getting together being like, hey, we're gonna buy the pay-per-view. We're gonna, we're gonna watch it.

• 1:01:26John Coogan?

  Sure, sure, sure.

• 1:01:27Jordi Hays?

  That kind of thing.

• 1:01:28John Coogan?

  Yeah.

• 1:01:28Jordi Hays?

  Possibly the biggest news in all of this for fight fans is the end of UFC's pay-per-view era. Ever since the first UFC event in 1993, pay-per-view has been a vital part of the UFC's strategy. Remember UFC, when it started airing on TV, was thought to be, it was so shocking and violent to people that even politicians wanted to get it banned.

• 1:01:49John Coogan?

  Wow.

• 1:01:50Jordi Hays?

  Like, they were like, this should not be on television. So it had to be in that bucket.

• 1:01:54John Coogan?

  Oh, it had to be pay-per-view. Cause it was like, yeah, it was like adult restricted anyway.

• 1:01:58Jordi Hays?

  Yeah.

• 1:01:58John Coogan?

  So, do the fighters need to sleep well before the fights?

• 1:02:01Jordi Hays?

  Of course.

• 1:02:01John Coogan?

  They have to be on 8-sleep. Pod 5.

• 1:02:03Jordi Hays?

  That's right.

• 1:02:04John Coogan?

  5-year warranty, 30-night risk-free trial, free returns, free shipping.

• 1:02:07Jordi Hays?

  You gotta make sure Bo Nickel, friend of the show, is on an 8-sleep. I'm gonna message him after this.

• 1:02:12John Coogan?

  Okay, perfect.

• 1:02:12Jordi Hays?

  Let's, let's figure this out. Ever since the first UFC event in 1993, pay-per-view has been a vital part of the UFC's strategy. Under the current deal with ESPN, each UFC pay-per-view costs $79.99 in the US plus the cost of the ESPN plus subscription on top of that. So you gotta subscribe, and then you gotta pay per event.

• 1:02:29John Coogan?

  Sure.

• 1:02:29Jordi Hays?

  With the pay-per-view revenues reportedly in decline, it makes sense for the UFC to finally ditch that model. The fact that it's doing so as part of a deal that will essentially double the roughly $550 million per year the UFC currently receives from ESPN likely only made that calculation easier.

• 1:02:44John Coogan?

  This is crazy, this is crazy. When they find out, wait, if I, if I just sign up for Paramount Plus for $12.99 a month, I'm going to automatically get UFC's numbered fights and the rest of the portfolio? That's a message we want to amplify? That is a crazy, crazy value change. Because if you were doing, if you were doing all 13, if you were the hardcore UFC pay-per-view buyer, you're up at $1,000 a year on UFC. Pay-per-view, basically, like $700, $800. Like, that's a lot of money. And you're going from there down to $1,299 a month. That's 150 bucks, basically. That is a steep, steep savings.

• 1:03:24Jordi Hays?

  Yeah.

• 1:03:24John Coogan?

  The hardcore fans are gonna be excited.

• 1:03:26Jordi Hays?

  Yeah, and a lot of, I mean, a lot of fans would, you know, somebody's hosting the pay-per-view one night.

• 1:03:32John Coogan?

  They split it or something. Yeah, makes sense. But still, I mean, that's a big, big savings. I do wonder what the ad load will be like, because when we watched UFC that a couple of months ago with David Senna, I noticed that it felt extremely, extremely content-rich and like the flow of the show was fantastic. Because you'd just be watching a fight and then it would cut to the commentary, the post-show, the in-ring Joe Rogan's doing an interview. And then pretty quickly, they start telling you who's coming up next. And the actual fight, like, you're only watching maybe like

• 1:04:09John Coogan?

  a half an hour of fighting over an hour or two of content, but it didn't feel like, oh, I'm not crazy commercial break and I'm totally taken out of the stadium. Like, even, even the, they did a really good job with the production to show, like, when they show you the stats, it's virtually laid over in the stadium. Like, you're watching a camera pan around the stadium. So it actually kind of feels like you're there the whole time. It was really well-produced. I wonder if they'll lose any of that by stuffing ads all over the place.

• 1:04:35Jordi Hays?

  Yeah, we'll see. I mean, and you compare that to NFL. NFL's like roughly, I think, 25% of the time allotted to NFL is advertising.

• 1:04:45John Coogan?

  Yep.

• 1:04:46Jordi Hays?

  And that's not the case, that hasn't been the case for pay-per-views.

• 1:04:48John Coogan?

  Yeah, and it certainly feels like it's, yeah, it's like, it's a shift in the, in the type of content. Yeah, they just gotta work on making seamless transitions to advertisements like we do here with Fin AI. The number one AI agent for customer service, number one in performance benchmarks, number one in competitive bake-offs, number one ranking on G2. You can get started at fin.ai.

• 1:05:06Jordi Hays?

  And anyway, so Paramount is, or Skydance, young Allison is all, is just getting aggressive across the board, right? He's, there's been rumors of this Free Press acquisition that I'm sure is still in the works, but it had been reported it was a quarter billion dollars for the Free Press.

• 1:05:26John Coogan?

  Yeah.

• 1:05:26Jordi Hays?

  From our sense, they have about a million, a million people subscribe to their newsletter, most of which, vast majority of which are non-paid. And so that just says that Paramount sees, CBS, Paramount, you know, the combined, and Skydance, sort of this combined entity just see the Free Press and

• 1:05:48John Coogan?

  Yeah.

• 1:05:49Jordi Hays?

  As, as highly, and Barry Weiss specifically is just highly strategic.

• 1:05:53John Coogan?

  Yeah. And then CBS also cut the light show, which is losing 40 million a year. So they're really like, kind of really like shuffling the chips around, like really restructuring the organization. Like what does CBS actually do? Well, now it's potentially UFC and Barry Weiss as opposed to Stephen Colbert, I guess, in terms of like headline stuff. I love this. I love this article. Back in, back in 2009, Dana White swore that if UFC 100 did a million pay-per-view buys, he'd bungee jump off the Mandalay Bay. It did. He didn't.

• 1:06:29Jordi Hays?

  No.

• 1:06:30John Coogan?

  When UFC 151 was canceled after John Jones refused an appointment, an opponent's switch, White called Jones' coach Greg Jackson a "sport killer." He left a crater in the UFC schedule that only MMA fans could fully appreciate. A few years later, when Conor McGregor and Nate Diaz shattered the pay-per-view world record at UFC 196, it was a testament to how big the sport had become. We cared about those numbers as much as we did the outcome. Since UFC 1, when people paid out of morbid curiosity, this is what you were talking about earlier, pay-per-views have been a vital part of the identity of the sport. It's hard to get nostalgic over being gouged. But what follows here should, shouldn't be

• 1:07:10John Coogan?

  mistaken as such, but Monday's news of UFC coming, $7.7 billion partnership with Paramount came with a small pang of sadness upon realizing the pay-per-view model will soon belong to a

• 1:07:22Jordi Hays?

  Yeah, I'm interested to see how this impacts the fighters because Early in their UFC careers, they don't get any exposure to pay-per-views points, which is like a percentage of pay-per-view sales that top fighters would earn. So if you're a rising fighter and you got on a pay-per-view card, you weren't necessarily getting cut into that revenue. But if you were Conor McGregor or a true superstar, you were actually getting some percentage of the sales, right? They call these pay-per-view points. And so now that that model is going away, I mean, I'm sure the number one thing on the fighter's mind with this new deal is, how are we gonna actually, you know, basically get cut into this new structure, right?

• 1:08:04Jordi Hays?

  Because historically, a lot of fighters have critiqued the way that UFC fighters are comped.

• 1:08:10John Coogan?

  This is such a funny nostalgic article. This writer clearly really loves UFC. "Back in the mid-oughts, the UFC combined the tuxedo affairs of 1990s boxing with the vibes of an underground temptation. From there, it slowly stockpiled its greatest passions behind the paywall. Remember how red Dana's face would turn as he tried to sell the pay-per-view at the end of the televised portion of the card? Remember the names?" He goes through. "BJ Penn, Matt Hughes, Chuck Liddell, Tito Ortiz, Randy Couture, Conor McGregor, Ronda Rousey. Go through the posters of the past and they were special. They were the special attractions. The names on the marquee for the numbered events. Those were some good parties we shelled out for.

• 1:08:54John Coogan?

  As MMA fans, they were ours."

• 1:08:57Jordi Hays?

  Well, end of an era.

• 1:08:58John Coogan?

  Yeah.

• 1:08:59Jordi Hays?

  And TKO Holdings, the company that of course owns WWE and the UFC, is a $36.8 billion company as of today. It's up 11. Let's take it over to Mark Gurman himself. He has some new reporting. Apple plots expansion into AI robots, home security, and smart displays.

• 1:09:24Jordi Hays?

  Apple Inc. is plotting its artificial intelligence comeback. Don't call it a comeback. Actually, you can call it a comeback. Give you.

• 1:09:30John Coogan?

  It makes sense. They've been, they've had, they've gotten a lot of hate over the last few years for the role, particularly the rollout of Apple Intelligence. Very hyped. A lot of features on display at WWDC that didn't ship when the new iPhone launched.

• 1:09:46Jordi Hays?

  Yeah, the actual lawsuits around that.

• 1:09:48John Coogan?

  Yeah, exactly. And so I think that there were, there were high expectations because of Apple's position with on-device inference being very cool.

• 1:09:57Jordi Hays?

  I gave you Gen Moji. Are you not entertained?

• 1:10:00John Coogan?

  They shipped a few things. I think that I would love to see the Gen Moji actual usage data because I feel like even though it's not popular in T-Pot and on X and in the tech, the Technorati, it might actually be seeing like decent adoption and joy. I mean, I've seen people share generative imagery from Microsoft Copilot, which I had no idea was a popular image generation platform whatsoever.

• 1:10:25Jordi Hays?

  Facebook crowd.

• 1:10:26John Coogan?

  Exactly, exactly. So, so I wouldn't be so sure that Gen Moji is, is producing zero value. But at the same time, it's clearly been a tumultuous time for the company. They've been kind of on defense in terms of public relations. But Mark Gurman is still scooping every single day.

• 1:10:43Jordi Hays?

  So, Apple's plotting its AI comeback with an ambitious slate of new devices, including robots, a lifelike version of Siri, a smart speaker with a display and home security cameras, a tabletop robot that serves as a virtual companion targeted for 2027 is the centerpiece of the AI strategy, according to people with knowledge of the matter. The smart speaker with a display, meanwhile, slated to arrive next year, part of the push into entry-level smart home products.

• 1:11:08John Coogan?

  Entry-level.

• 1:11:09Jordi Hays?

  Tabletop robot that's a virtual companion.

• 1:11:12John Coogan?

  Yep.

• 1:11:12Jordi Hays?

  That's big.

• 1:11:13John Coogan?

  Lot of, lot of software they got to write to make that work. They got to get on Graphite.dev, code review for the age of AI. Graphite helps teams on GitHub ship higher-quality software faster. Tim Cook, if you're listening, get on Graphite.

• 1:11:25Jordi Hays?

  So, this is big too. Home security is seen as another big growth opportunity. New cameras will anchor an Apple security system that can automate household functions. The approach should help. Make Apple's product ecosystem stickier with consumers to the people who ask not to be identified because the initiatives haven't been announced.

• 1:11:40John Coogan?

  I mean, this seems like something that they could knock out of the park, like just the smart thermostat, like these, these patterns have been defined for a decade. And that's like the sweet spot for Apple to come in and like the Sonos home speaker where we were saying like it, they're just like the speak, everyone knows what they want out of a connected speaker system. They just want it at the level of Apple execution. It doesn't require going zero to one in some new territory. And so I feel like they could be very successful in, in the home video monitoring, home thermostat, home speaker. So I, I, I think I like this overall. The robot is where it gets funny because this feels crazy, but I'll.

• 1:12:21Jordi Hays?

  Yeah, that going into companionship feels interesting.

• 1:12:26John Coogan?

  I don't think it's companionship. I, I, I don't, I don't think of it like that at all.

• 1:12:29Jordi Hays?

  Tabletop robot that serves as a virtual companion is the centerpiece of the AI strategy.

• 1:12:35John Coogan?

  I mean, so let's read what the actual report is on this robot. The tabletop robot resembles an iPad mounted on a movable limb that can swivel and reposition itself to follow users in a room like a human head. It can turn toward a person who is speaking or summoning it and even seek to draw the attention of someone not facing it. The hope is to bring AI into life. I don't think of this as like companion necessarily. This could just be.

• 1:13:02Jordi Hays?

  Jarvis.

• 1:13:02John Coogan?

  Assistant. Yeah, Jarvis.

• 1:13:03Jordi Hays?

  It feels like Jarvis.

• 1:13:04John Coogan?

  I mean, I guess Jarvis isn't a companion, but companion has a bad flavor to it right now, a bad, a bad vibe because people are saying like, I married my companion and that feels very Black Mirror. I do think that there's a serious Black Mirror risk, but I'll go into that in a second. But what were you about to say?

• 1:13:20Jordi Hays?

  Yeah, I'm not going out and saying this, this feels like a competitor to friend.com or any other players that are actually focused on companionship. But this does feel like giving Siri a presence in the home.

• 1:13:34John Coogan?

  Yeah.

• 1:13:35Jordi Hays?

  Like an always on presence in the home.

• 1:13:36John Coogan?

  It will be interesting to see how they solve it. A partnership with OpenAI or Anthropic seems logical, but Apple-Siri partnership with OpenAI Anthropic before September on Polymarkets is a 6% chance. By December, it's at a 44% chance, though. So, but this is a very low-volume market, but still, it feels like we haven't seen a lot of messaging from Tim Cook that they're going to be building a huge data center, going to be training a foundation model. It feels like they're going to need to partner on some of the underlying infrastructure for that, because I would not, I would not want Siri hanging out in my kitchen, talking to me.

• 1:14:15John Coogan?

  Like Siri is just not reliable enough, but I would, I would welcome Claude or, or ChatGPT into my house. But I would treat it specifically as a, like an Alexa, what's the weather like? What's on my calendar? Look up the history of the Roman Empire. I would ask it questions like that, and I would use it as a knowledge retrieval tool. I might start to trust it in some agentic contexts.

• 1:14:42Jordi Hays?

  And the question is, do you want, do we want a robot iPad with an arm swinging around your kitchen? And so, and hopefully, when you want to know the weather, it's, you're, you're within earshot.

• 1:14:56John Coogan?

  I think, I think this could be really cool. I think it could be really cool. I mean, they say FaceTime is going to be...

• 1:15:01Jordi Hays?

  It's just funny because you're competing, they're still competing with their own...

• 1:15:04John Coogan?

  Yeah, but if you're ever in the kitchen, like, this is an example. So FaceTime calls will be a key function of the device during video conferencing. The display will able, will be able to shift to lock on to people around a room. And so as you're walking around, the FaceTime is just following you. That actually feels more social. I remember during COVID, I bought Facebook's camera. They had some sort of device that you would mount on your TV, and it would act as a, as a video conferencing system.

• 1:15:32Jordi Hays?

  Yeah.

• 1:15:32John Coogan?

  And I used it a few times. I ultimately churned, but it was, but it was, it had a really wide-angle lens, and it would like zoom in on the people. It had really good face detection. And so it would center you no matter where you were in the room. But as soon as you walked to the other side of the room, it wouldn't be able to follow you because it didn't have any motors in it. And I feel like this could be interesting.

• 1:15:51Jordi Hays?

  Can we pull up the link in the chat? This all reminds me of the Meta Portal.

• 1:15:58John Coogan?

  Yeah, that's the one I'm talking about, the Portal.

• 1:16:00Jordi Hays?

  Basically, I didn't market it as a robot, but it would sit on a table and it would sort of follow you around the room. And Meta is no longer selling Meta Portal. I guess they wound it down. So anyways, Tim Cook told employees in all hands.

• 1:16:17John Coogan?

  I gifted some of these and they were pretty well received. Most of them wound up being used as like digital, digital photo frames though. And they weren't actually used that often for calls. I don't know if putting it on a robotic arm is enough to make it useful. I think you do have to nail the underlying speech recognition and, and the, in the conversational nature, like it has to be powered by a Frontier LLM.

• 1:16:44Jordi Hays?

  You know what's funny?

• 1:16:44John Coogan?

  What?

• 1:16:45Jordi Hays?

  Is I feel like the product, I, I could imagine them having a mood board internally with the Pixar lamp hopping around.

• 1:16:52John Coogan?

  That's literally listed here as like one of their inspirations, apparently.

• 1:16:55Jordi Hays?

  So Tim Cook told employees in all hands meeting this month that Apple must win in AI and hinted at the upcoming devices. The quote, "The product pipeline, which I can't talk about, thankfully, Mark Gurman has his moles in Apple that are talking." Tim Cook says, "It's amazing, guys. It's amazing. Some of it you'll see soon. Some of it will come later, but there's a lot to see."

• 1:17:15John Coogan?

  Yeah.

• 1:17:15Jordi Hays?

  So Apple obviously always is cooking on moonshots. Very little of it surfaces to Mark Gurman. And even less actually surfaces, you know, publicly via Apple's own channels.

• 1:17:28John Coogan?

  Mark Gurman, if you have a little extra time, you should leak Julius's user numbers because Julius has over 2 million users now. They're trusted by folks at Princeton, BCG, Zapier. What analysis do you want to run? It's the AI data analyst that works for you. Connect your data, ask questions in plain English and get insights in seconds. No coding required.

• 1:17:49Jordi Hays?

  Need to get our logo up there.

• 1:17:51John Coogan?

  Yeah.

• 1:17:51Jordi Hays?

  The fourth logo.

• 1:17:52John Coogan?

  For sure. So, Apple is planning to put Siri at the center of the device operating system and give it a visual personality to make it feel lifelike. The approach dubbed Bubbles is vaguely reminiscent of Clippy, which we are super bullish on. And we think Microsoft should totally bring back Clippy, an animated paperclip from the 90s that serves as a virtual assistant in Microsoft Office. Apple has tested making Siri look like an animated version of the Finder logo, the iconic smiley face representing the Mac's file management system. The final decision on its appearance hasn't been made, with designers considering ideas that veer closer to emoji, the player, the playful characters that represent Apple user accounts. Device prototypes use a roughly seven inch horizontal display approaching the size of an iPad mini.

• 1:18:36John Coogan?

  The motorized arm can extend the display away from the base roughly half a foot in any direction. So that's not.

• 1:18:41Jordi Hays?

  I was really hoping, I was really hoping five, I was really hoping at least five.

• 1:18:45John Coogan?

  Across the room, it reaches across and pins you against the, against the fridge. Yeah, I think Apple should be able to nail delivering this in a way that doesn't feel Black Mirror and dystopia.

• 1:18:56Jordi Hays?

  Oh, that's funny. Sorry. So I actually didn't see this, but there's a quote in here. Some people familiar with the product call it the Pixar lamp.

• 1:19:02John Coogan?

  Yep, exactly. I, I, I think it could work really, really well. Now, they have to be cognizant of the Black Mirror vibes. That would be very cool.

• 1:19:11Jordi Hays?

  Cause if it could hop off my kitchen table.

• 1:19:13John Coogan?

  Around, that's not Friedman core. This is, this is, this is, this is doable with modern technology. But the risk is that they, they botch it because Apple's had a rough go with the recent marketing and they've had a couple real like backlashers. They had that one where they smashed all the pianos in the press. Do you remember this? So they had a, a huge hydraulic press and they, and they pressed like an easel with paints and a bunch of paint buckets and pianos and violins and all this stuff.

• 1:19:45Jordi Hays?

  Get a bunch of blowback.

• 1:19:46John Coogan?

  They got a ton of blowback from this. We can, we can try and pull it up. Do you remember this?

• 1:19:50Jordi Hays?

  Yeah, I remember that. People were saying that they're like destroying these timeless pieces.

• 1:19:54John Coogan?

  Yeah, and it's just like the thing that I.

• 1:19:56Jordi Hays?

  Instruments and stuff like that.

• 1:19:56John Coogan?

  Yeah, the thing that I love, you're literally, you're destroying it for this particular. Shots fired, Bill Bishop from the Substack stream. You need better guests to talk about China and chips, not just Nvidia partners who are regurgitating Nvidia's talking points. Bill Bishop, get on the stream, call in. We'd love to have you.

• 1:20:14Jordi Hays?

  Bill.

• 1:20:15John Coogan?

  Bill, you're welcome. Hop on.

• 1:20:16Jordi Hays?

  Of course, Aaron is riding with Jensen.

• 1:20:19John Coogan?

  Yeah, he is the Jensen surrogate. He's a surrogate for Jensen the juggler. The other ad that didn't go as viral and result in major backlash was the launch of the Apple Vision Pro. So when the Apple Vision Pro launched, one of the videos that they showed was of a middle aged man looking at VR video of his kids, but he was alone in a dark room and Ben Thompson was like, it feels like he's divorced or something, or maybe like the kids died. It felt like Minority Report, which is a movie I know you haven't seen, but in Minority Report, Tom Cruise's son goes missing from the pool one day and he has a, he has a virtual 3D video that he plays

• 1:21:01John Coogan?

  back and gets very emotional about. And, and the imagery was very similar in the Apple Vision Pro, but it wasn't an optimistic scenario. It was like, yeah, like I guess if my son passed away or got kidnapped, like I would want to relive that, but that's not like going to inspire me to buy an Apple Vision Pro. And so with, with this like Pixar lamp, this, this, this robot in your, in your kitchen or in your house, like they really, I think they have to lean into, to light mode, not dark mode. They have to really be aware and reality check themselves on the Black Mirror effect because the, the idea of, of someone hanging out in their kitchen,

• 1:21:41John Coogan?

  being lonely and having this be the only companion that they ever talked to, that's a lot less fun than, hey, we're all cooking together in the kitchen and this is helping us keep track of the ingredients. Or my idea was, uh, teach it to, uh, teach it to pour some beers and get it at the fraternity. This thing needs to be tending bar at a frat house and inspiring dancing silhouettes like the original iPod commercial in order to be successful. Get the iPod. A robot, a stack of red solo cups ASAP.

• 1:22:14Jordi Hays?

  Apple's canceled for fraternity coded marketing.

• 1:22:17John Coogan?

  I think I think that would be amazing if this thing could if this thing could pour a beer without without foam. I think they got a winner. Because it needs to inject itself into social, even the iPod, like, yes, you could put it in the headphones and you could and you could tune out the world and be that dancing silhouette during the iPod commercial. But also you could say, pass me the aux cord. I want to play a song for my iPod that everyone can enjoy and it's a social experience. And so it's important to show both of those sides now more than ever. And in in chat GPT demos and any AI product demo, there's always going to be the user who who uses the product to be more isolating. But the marketing should always be aspirational and pro social, just like social media.

• 1:23:00John Coogan?

  Social media, it's at its best when we're highlighting the fact that like I have so many friends that just send me a random Instagram reel every single day. And like, that's our interaction and it's and for me, it's a way to like check in with a friend and and like.

• 1:23:14Jordi Hays?

  Share a laugh.

• 1:23:14John Coogan?

  Hey, share a laugh and and it's a heart and it's a laugh.

• 1:23:17Jordi Hays?

  I can I can imagine the ad creative for the Apple Pixar lamp. You know, it's sitting on the center of a kitchen island and the family's hanging out and they're FaceTiming somebody.

• 1:23:27John Coogan?

  Exactly. Yeah. So one of the family members is in town.

• 1:23:30Jordi Hays?

  I can actually imagine us having a Pixar lamp here on the table.

• 1:23:33John Coogan?

  Really, really, it's like, yeah, it's like you want to be connecting two families or two, two, two sides of the family. The East Coast side of the family, the West Coast side of the family, they're both having Thanksgiving and they're able to connect. But there's everyone's being extremely social. Do not film this thing with the lonely, the lonely person. You know, having the Pixar lamp be the only thing to keep it company. Anyway, that's my advice.

• 1:23:58Jordi Hays?

  What else is in here? Projects coded Linwood and Glenwood. Core to the new home devices are current products like and current products like iPhones and iPads is an overhaul to the underpinnings of Siri. Engineers are working on a version code named Linwood with an entirely new brain built around L L M's, the foundation of Gen AI. The goal is to tap into personal data to fulfill queries, an ability that was delayed due to hiccups with the current version.

• 1:24:22John Coogan?

  It should be able to do it.

• 1:24:24Jordi Hays?

  Hopefully, this team, they should have a a a moonshot division just trying to solve iMessage search.

• 1:24:33Jordi Hays?

  They could probably start there.

• 1:24:34John Coogan?

  Every tech company is that Amazon search is rough, Google Gmail search is rough. Search has gotten so like dominated.

• 1:24:42Jordi Hays?

  There's a billion dollar business in figuring out.

• 1:24:46John Coogan?

  I mean, that would be the killer. That might be a killer app for Comet and some of the browsers is just like actually being able to search my Gmail inbox better. That would be pretty fantastic.

• 1:24:57Jordi Hays?

  I feel like it should be at the app layer.

• 1:24:58John Coogan?

  Anyway, whatever they're building, they're building products. They got to get on linear. Linear is a purpose built tool for planning and building products. Meet the system for modern software development, streamline issues, projects and product roadmaps.

• 1:25:10Jordi Hays?

  OpenAI is on linear. Let's get Apple on linear. Let's get the Siri team on linear. They very well might be already. So somebody Craig Federighi, who you all know, says the work we've done on this end to end revamp of Siri has given us the result we needed. He added that this has put us in a position to not just deliver what we announced, but to deliver a much bigger upgrade than we envisioned. He said, there is no project people are taking more seriously. So that is very positive. A final decision hasn't been made on which models will be used, but Apple has been testing Anthropic PBC's Claude for this purpose.

• 1:25:48Jordi Hays?

  Mike Rockwell, the former Vision Pro chief, who was put in charge of Siri earlier this year, is overseeing both the Linwood and Glenwood efforts.

• 1:25:58Jordi Hays?

  Apparently so during the development of the tabletop robot, Apple engineers have made heavy use of ChatGPT and Google Gemini to build and test features within Apple AI and Siri teams as a whole. Software developers are increasingly using third party systems as part of their development process. Getting into a ring competitor here, Apple's working on a camera codename J four fifty is designed for home security, detecting people and automating tasks. The device will be battery powered and could last for several months to a year on a single charge. That's interesting. If they can do this for they can they can do this for a random home security camera. They can't do it for.

• 1:26:38Jordi Hays?

  So they have, you're telling me they have the capability to have an always on camera?

• 1:26:42John Coogan?

  I had the tinfoil hat on.

• 1:26:43Jordi Hays?

  We need a tinfoil hat. Uh, the device has facial recognition and infrared sensors to determine who is in a room. Apple believes users will replace, will place cameras throughout their home to help with automation. That can be turning lights off when someone leaves a room or automatically playing music. So, Apple, you're telling me that you can make a home security camera, of which I will purchase multiple and put them around my house? And it will be able to have a single battery that could last for several months to a year on a single charge? And you can't make an iPhone?

• 1:27:18John Coogan?

  It's a little bit different. The screen's pretty bright.

• 1:27:21Jordi Hays?

  The screen's bright.

• 1:27:22John Coogan?

  Yeah.

• 1:27:23Jordi Hays?

  But an always on camera? How long do you think your phone battery would last if you just constantly had the camera?

• 1:27:29John Coogan?

  I actually think, I actually think running the camera sensor is a lot less power intensive than running a screen, for sure.

• 1:27:35Jordi Hays?

  And obviously, a bunch of different applications. But still, pretty powerful, pretty exciting stuff.

• 1:27:40John Coogan?

  I don't think people want an always on iPhone. They want the thrill of charging the iPhone every night. If, if you're an adrenaline junkie, there's nothing like being on 1% trying to fire off that last iMessage, trying to search iMessage.

• 1:27:50Jordi Hays?

  You know, I actually had a moment yesterday. Uh, my, my one-year-old is, uh, starting to walk. And I had this moment yesterday where I was, I was, I was, I'd filmed a, a video of her walking. For about 10 seconds. Uh, everyone's in, in the house is like laughing, enjoying the moment, and then my battery died and completely lost the video. Because I didn't hit, I didn't hit like end of the video. So, the battery died right in the middle of this. Memory gone forever.

• 1:28:20John Coogan?

  There is actually, that, that has something to do with the encoder. There is a certain, uh, file type that you can use when you're filming on one of these cameras, that if the battery dies, it will actually save the last of the file. Um, but there's certain, there's certain codecs where if you don't hit finish recording, the whole thing will be corrupted. It's very annoying. We have the debate of the century, the debate of the year showdown between former founder fund, founders fund colleagues.

• 1:28:47Jordi Hays?

  Friends turned foes.

• 1:28:49John Coogan?

  Friends turned rivals. Everett Randall, he's been on the show before. Delian Asperu, he's also been on the show.

• 1:28:55Jordi Hays?

  They haven't been mincing words, John.

• 1:28:57John Coogan?

  They haven't.

• 1:28:57Jordi Hays?

  They have been throwing shots.

• 1:28:59John Coogan?

  Yes.

• 1:28:59Jordi Hays?

  Back and forth. Every TVPN appearance.

• 1:29:02John Coogan?

  Yes.

• 1:29:03Jordi Hays?

  They're calling the other one out.

• 1:29:04John Coogan?

  Yes, and so they will be debating strategies. We're going to settle it today on the stream. The slop versus steel debate. Which is better? High margin software or capex intensive reindustrialization efforts?

• 1:29:19Jordi Hays?

  That's right.

• 1:29:19John Coogan?

  We will bring in Delian and Everett into the studio. Welcome to the stream. How you guys doing?

• 1:29:26Delian Asparouhov?

  I like that background. Very good.

• 1:29:28Everett Randle?

  Energized.

• 1:29:29Jordi Hays?

  Here we go. We're going to be breaking it down live here.

• 1:29:31John Coogan?

  Yeah, we're going to be breaking it down live.

• 1:29:32Jordi Hays?

  All, every time one of you gets a point, I'll, I'll put a.

• 1:29:36John Coogan?

  We'll put a little point on the board. If, if things get out of hand, we'll be banging the gong and bringing order like it's a gavel. Uh, but I'm sure, I'm sure this will be, uh, I'm sure everyone will be civil.

• 1:29:47Jordi Hays?

  Oh, I'm sure.

• 1:29:48John Coogan?

  And keep the name calling to a minimum. Uh, good to have you both. Thanks so much for being here. Let's, let's, let's kick it off.

• 1:29:54Jordi Hays?

  Let's start off, what's your least favorite thing about the other person?

• 1:29:59Delian Asparouhov?

  Kick it off with the original story. Like, how did this all start?

• 1:30:02John Coogan?

  Yes, yeah, yeah, yeah.

• 1:30:03Jordi Hays?

  Give us some backstory.

• 1:30:04John Coogan?

  Yeah.

• 1:30:05Delian Asparouhov?

  You wanna, you wanna give it?

• 1:30:06Everett Randle?

  Yep, I, I'm, I'm happy to. So we were, um, back at Founder's Fund. We were, um, starting to beef up our, our like CRM and data science efforts. And so we were, we were integrating some external data into our CRM, figuring out how we could filter opportunities better to each of the, each of the investment team professionals. And we were looking and we were looking at the different data. I was like, ah, it'd be really nice if we could filter this by gross margins so that all of the negative gross margin companies that come into our CRM, we could give them all the Delian, because it seems like those are the types of companies that, that he loves to invest in.

• 1:30:45Everett Randle?

  The rivalry between the low gross margin side of the house and the high gross margin side of the house was born then.

• 1:30:52John Coogan?

  Okay. And Delian, justify, why do you like these businesses?

• 1:30:58Delian Asparouhov?

  What drew you in?

• 1:30:59John Coogan?

  Is that even a fair characterization?

• 1:31:01Delian Asparouhov?

  Fair characterization, I think, you know, my sort of one line would be, I'm not sure that gross margin is actually the right thing to focus on in a business, especially sort of early on. What you want to be thinking about is obviously EBITDA margin, in particular, terminal EBITDA margin. And so when I think about the like, at least founders' fund ethos to investing, we think that that terminal EBITDA margin mostly is determined by ultimately how much of a monopoly your company can be in the long term. And so if you look at sort of Mag7 today, obviously there's a decent chunk of them that have some phenomenal sort of gross margins, and those tend to be the ones that are a little more software oriented. If you look at the one that is at the biggest scale and has the best EBITDA margins, it's the one that is the most basically hardware oriented. For sure, some of it propped up by like CUDA and their sort of software side of the house.

• 1:31:46Delian Asparouhov?

  But Nvidia is the one that is performing the best of all those. And then even if you study within those, which of those companies on the hardware side have monopolies versus not, you see it's the one that with the monopoly clearly outperformed the ones that don't, right? So Tesla, obviously, in that Mag7, but a part of why they suffer much worse margins than like an Apple or an Nvidia is because they actually do have competition. And so my general characterization of SaaS is people always study their original gross margin, but weren't burdening in the cost of sales, marketing, et cetera. And because you just have much less of a monopoly typically in SaaS, that ends up totally hurting your EBITDA margin profile. So take the favorite terminal scale thought of as a monopoly SaaS company that I'm sure

• 1:32:31Delian Asparouhov?

  loves, Salesforce, their market share in all things CRM is 25%. And so that's why you end up seeing like, yeah, gross margin profile is only burdened by like cloud sort of costs, but their EBITDA margin profile that is like 40%. And so the reason that I like these negative gross margin businesses is yes, they're tougher to start, they may be more equity intensive at the beginning, but end up with way better terminal margin profiles versus, you know, Ev loves to invest in the AI slop codes that might have early gross margins and revenues.

• 1:32:59John Coogan?

  So Ev, what's the bull case for software? What's the bull case for SaaS? What's the bull case for AI slop codes?

• 1:33:08Everett Randle?

  Look, so to quote the godfather Neil Meta himself, "The laws of great businesses are the laws of great businesses. The job of a business in a capital society is to maximize and find the efficiency frontier for three things: ROIC, aka return on invested capital, the amount of capital you can actually deploy, and how long you can deploy that amount of capital at and above market ROIC." There's a lot of different framings for the paths to do this and how companies can actually do this. The one that people like in tech circles is Hamilton-Hemler's Seven Powers. A company accumulates power in the form of scale economies, network effects, whatever power you want to take, and then uses that

• 1:33:49Everett Randle?

  power to produce above-market ROICs for as long as possible and with as much capital invested in the business as possible. There are great atoms-based businesses that do this. There are terrible atom-based businesses that don't do this. There are great digital businesses that do this. There's terrible digital businesses that don't do this. I mean, you want to hear about a great atoms-based business that does this, listen to the Acquired Pod on Costco. Like, it's certainly not like a atoms versus SaaS thing necessarily. The advantage that digital businesses have is that in this process of producing above-market ROIC for a long time is that their product form factor and the way that they distribute their product lends itself more to the process of creating power, I'd argue, than most atoms-based

• 1:34:32Everett Randle?

  businesses. So if you think about like network effects, the best place to create network effects is in a digital marketplace like an Uber, an Airbnb, or a DoorDash. And so there's a lot of these forms of power that naturally lend themselves to digital products, and the scalability of digital products tends to be a lot greater than physical products. And so you can see these rapid growth trajectories like we're seeing from OpenAI and Anthropic and many others.

• 1:34:56Jordi Hays?

  When did you guys find common ground? Was it in the e-scooter era, the sort of 15-minute delivery era? Were you ever able to kind of come together and say like, "Yeah, we can both agree that this is not it."

• 1:35:11John Coogan?

  Or good, or good. I mean, to be fair, Kleiner Perkins, Founders Fund, both invested in Figma, Stripe, Airbnb. There is some portfolio overlap.

• 1:35:19Everett Randle?

  Rippling, too, right?

• 1:35:21John Coogan?

  Rippling as well. Modern Health, I believe, as well. There's a few others. But yeah, to Jordy's point, where else is the common ground and where else is the divide? Or the consensus in the disagreement?

• 1:35:34Delian Asparouhov?

  As you say, you know, everyone we're texting before this of like, you know, what are you sort of two companies that I think, you know, both of us were enthusiastic about in, you know, sort of 2021 that actually both of you sort of trended well, but are, you know, sort of counterpoints are two arguments. And the ones that we kind of came up with were, you know, 2021, I was really, you know, sort of, you know, high conviction on Hadrian in 2021. I was super, you know, high conviction on Rippling. Both those investments have, you know, performed quite well over the last couple of years, but look, you know, sort of wildly different in terms of, you know, profile. You know, Rippling, like many other, you know, sort of SaaS companies, does end up having, you know, an initial, you know, very high gross margin, but does still have to spend a lot on sales and marketing to bring in, you know, sort of net new customers.

• 1:36:13Delian Asparouhov?

  Hadrian on the flip side, deeply, you know, sort of negative gross margin to start, but now as they've gotten to scale, they actually have like super limited, you know, sort of sales and marketing spend because there's only like, you know, 10, 15 customers that matter. And the moment that you're delivering for them, they just proactively start, you know, sort of throwing revenue, you know, at you. And so, um, yeah, I think there are times where, um, you know, both of our, you know, sort of stories, obviously you can play out. The thing that I'd be curious to hear from, you know, sort of Everett is to actually like compare and contrast, you know, you were bringing up, you know, some of these digital businesses, you know, that, um, end up having these, you know, network effects. I would kind of argue that like, you know, the like 2010s, um, negative gross margin businesses like, you know, they're like Uber, DoorDash, you know, uh, you know, types.

• 1:36:51Delian Asparouhov?

  I think of as more as like, you know, Adams businesses, but there was a whole set of investors in like the mid 2010s that were generally unwilling to approach both Adams based businesses that started with negative gross margin, but even some of these local marketplaces that started with negative gross margin that like swore off of the Ubers, the DoorDash's, et cetera. You know, it's very clear that Uber, DoorDash, through, you know, lots of investment, through building out these local, you know, certain networks of, you know, both supply and demand, were able to, and, you know, drivers were able to eventually get to a point where now they actually, you know, have very attractive, you know, sort of financial profiles.

• 1:37:22Delian Asparouhov?

  Today, the equivalent of that is like, there's all these investors that, you know, back in the 2010s would have refused to invest into any company that had negative gross margin and are all now pouring cash into both the like AI application layer companies and the like, you know, foundation models that all have like ridiculous, I mean, I forget, I think it's girly is nonstop, you know, not my favorite person in the world, but girly is nonstop talking about like, you know, what is going on here? They're selling a buck for 90 cents.

• 1:37:44Jordi Hays?

  So I think, I think it's, it's an important example because you had that. Plenty of examples of these chained losses during that era where a restaurant was selling something below cost to a platform that was selling something below cost to a logistics provider, an individual contractor that like maybe wasn't actually making money if you factored in depreciation and fuel costs of their vehicle. And that ultimately worked out, right? DoorDash is a massive fantastic business based on the power of the American consumer. But when you compare that to today, where a lot of the conversation on the timeline this week has been the margin profile of this new generation of software companies

• 1:38:26Jordi Hays?

  that has to pay a lot for sales and marketing, but also inference. And so I think like the debate should really be, you know, continue to be around just how quickly will the cost per token fall. And I think a lot of people have a lot of confidence around that. But I think that that is the key thing that Everett's sort of like broad investment thesis right now is dependent on.

• 1:38:54Delian Asparouhov?

  Yeah. Do you think there's going to be that same path of like Uber for a while had a bunch of negative gross margin, people going into it? Like, do you actually think there's that equivalent path?

• 1:39:00John Coogan?

  I want to pull this post up. Everett actually posted this in January 31 of 2024. So over 18 months ago, he said, I'm making a real effort to not take for granted the $3 Uber across town era of AI. And I hope you are too. And so I guess the question is, and it's funny because then a bunch of people, I thought it was a good point. I thought it was a hot take then. And I think then, you know, a bunch of people kind of parroted that take all over the timeline, stole your whole flow, as you like to say. But, but I guess the question is like, are we in some sort of different regime right now where the traditional gravity and like fundamentals of software investing have changed

• 1:39:42John Coogan?

  because we are out of the zero marginal cost era? And does that impose risks to the strategy that, you know, you've sort of employed or like, we're kind of putting you in this hole, in this box. But if the, if the fundamental structure of zero marginal cost era is going away, that, that presumably forces like a rewrite of your logic around investing, I would imagine.

• 1:40:06Everett Randle?

  Yeah, I think that the biggest variable that's changed from the 2010s SaaS era to today is that in the 2010s, and you basically made this point without making it, Delian, though, is that the thing that was missing from your talk track is that the competitive intensity of SaaS during the 2010s was much, much, much lower than it is today. Yeah. Like during the 2010s, there was an entire crop of companies in the 2000s, but then especially in the 2010s, you could basically pick either a vertical segment, you know, like HVAC or car dealerships, or you could do a horizontal function like the CRM or, you know, some very niche workflow for like the finance team. You could build a software product around that workflow, around that vertical, and you really only had to deal with typically

• 1:40:50Everett Randle?

  like two to three competitors. Like, there really wasn't that much competition relative to what there is today. And there was less, just like, general pricing pressure, competitive pressure, just the general pressure that you actually had a lot with some of the digital marketplaces early on. And so like, I think there was a whole crop of investors then, and like the SaaS investors then, were like, well, we don't need to, we don't need a bunch of cash burn. And it's actually, it's a really unhealthy indicator if these SaaS companies are producing a bunch of burn, because they're not competing with anybody. So if they can't like sell their product for good unit economics on day one, when the competitive intensity isn't very high, then they're probably not a very good business. I think the thing that's changed now is, one, you have the change from zero marginal cost to actual meaningful

• 1:41:35Everett Randle?

  marginal cost in the form of inference. And it's also just a hell of a lot more competitive than it used to be. And so you are, and by the way, there's an immense, it was probably 10x more capital than there was 15 years ago to go into these companies. And so like, every single category now has become like mini, you know, like mini rideshare or like mini Uber market, where it's like, hey, there's probably a really big pot of gold at the end of the tunnel, and we need to be the ones that get first to scale. And in a lot of these categories, the ones that have gotten first to scale have gotten a lot of brand equity out of it and have gotten a pretty resounding lead. I think the The only other piece I would say, I lost my train of thought, so.

• 1:42:13John Coogan?

  Yeah, yeah, but it's gonna be, basically, it's gonna be like a capital fight now on the, on the SaaS side. I, I wonder if, if, if the contrarian trade around hard tech is, is, is entering a similar era, where it's become consensus, and so we're gonna see more capital fights, and when a founder goes out and says, yeah, I'm gonna do something crazy, but I need to spend a billion dollars of CapEx, people are just like, yeah, I, this could be the next SpaceX.

• 1:42:36Jordi Hays?

  Yeah, it made sense to have a capital war and ride share, but now we have a capital war in like this niche agentic workflow in some industry that, that most people have never heard of.

• 1:42:46John Coogan?

  And then it's like, oh, here's 200 million dollars for funding. Military boats and UAS and, and UAP, like, all these different subsegments are gonna wind up, if, if capital wars start popping up there, that could potentially be a headwind to Delian's model. Is that, is that roughly correct? How would you, how would you, how would you fight back against that?

• 1:43:04Delian Asparouhov?

  Look, I think it's, it's always, you know, sort of important to talk about, you know, sort of specifics here, right? You know, one of Ev's, you know, sort of major investments in the last year is this, you know, company called Captions that basically does AI captioning of, you know, various, you know, sort of videos on social media. When I think about, you know, handing, you know, sort of two Stanford grads and 100 million dollars to go try and, you know, sort of replicate that, yeah, feels like, you know, they could, you know, go do something like that. There's like, you know, clear, you know, voice recognition models, they can go, you know, sort of pay on ads on TikTok, et cetera, and you could probably go and replicate that. And so, you know, you know, our one line, our founder's fund is competition is for losers. And so, you know, I think I was a loser for investing in this company.

• 1:43:43John Coogan?

  You know, the shower saying this wasn't spicy enough, and you just delivered, Delian, so thank you.

• 1:43:48Delian Asparouhov?

  Now, you know, if you take, you know, sort of two Stanford grads and 200 million dollars and tell them, hey, I need you to go replicate this manufacturing facility and go start building a bunch of, you know, sort of satellites, reentry vehicles, you know, bioreactors that can actually survive the environment of space. Most, you know, sort of Stanford grads, you know, can't go, you know, ask ChatGPT how to go do that. And yet, yet, yet, haven't really faced significant sort of competition, irrespective of the fact that, you know, all things space factories are thought to be, you know, sort of the hot new thing.

• 1:44:16John Coogan?

  To be clear, we use captions here on clips. We enjoy the captions. Captions app, we thank Ev for making it possible and subsidizing our

• 1:44:24Jordi Hays?

  And there is a Y C, there is a Y C, a Varda-esque Y C company. So they're coming for you.

• 1:44:29Delian Asparouhov?

  You know, Indian Varda, I think will be a little bit less competitive than, you know, Indian captions. Also, if you're the caption CEO and you know, Founders Fund is trying to invest in your next round, please still let us do that. Helpful counterpoint for me.

• 1:44:41Everett Randle?

  Delian, you were, you were correct that it was getting, it was getting too friendly of a debate. Yeah, I did want to make sure I could, I could pin this one on you. If you can recite the equation for a return on invested capital, I will give victory to you and I will donate $5,000 to a charity of your choice.

• 1:45:00Jordi Hays?

  Hopefully, hopefully he's got Cluely running.

• 1:45:03Delian Asparouhov?

  Exactly, exactly. My like, you know, equivalent for Everett will be if you can explain, you know, basically why you can't create microgravity down here on Earth. I will also donate $5,000 to a charity of your choice, but I don't think you have it, you know, I may not have the, you know, basic understanding of business physics, but you don't have a basic understanding of physics. And one's more important about understanding the universe around you.

• 1:45:19John Coogan?

  Okay.

• 1:45:20Jordi Hays?

  I mean, I'm, I'm pretty fixated on the 2035 Midas list. That's really kind of the final, that's this, that's this debate's last example.

• 1:45:30Delian Asparouhov?

  I forget whether or not you've made it up there.

• 1:45:31John Coogan?

  Oh, taken shot.

• 1:45:33Delian Asparouhov?

  Not even on the brink yet, you know, we rejoins, you know, KP after you and she beats you.

• 1:45:37Everett Randle?

  Laughing me.

• 1:45:39John Coogan?

  It's okay, it's okay. Eventually, we're gonna, we're gonna bring back the extra names in Kleiner Perkins. It used to be Kleiner Perkins, Caulfield, Byers. It's gonna be Kleiner Perkins, Randall, Brasswell, eventually.

• 1:45:50Jordi Hays?

  We're working on it.

• 1:45:51John Coogan?

  We're working on it. We're pitching it. Where, where should we go next, Jordy?

• 1:45:55Jordi Hays?

  I guess, Everett, how are you, how quickly, like, how much should people be fixated on the cost per token with these frontier models over the next six months? Like, how, how long can, can venture capital sort of like backstop these chain losses?

• 1:46:17Everett Randle?

  Yeah, I think that the the way to delineate the whole, so so obviously, like, I think there was this kind of consensus narrative that like every, you know, twelve eighteen months token costs were going down in order of magnitude. And I think that did hold for a while. I think what you've seen now is like actually for frontier models that started to peter out a bit and like pricing has actually started, it's still going down. It's not going down nearly as much as it as it used to, um, when when like when when we were kind of in in the in the like the meat of the curve of of capability improvements on frontier L L M's um, uh, in terms of of pricing curve. So I think that the way that you want to delineate it is like there's a certain like what I always tell everyone is that like there hasn't been a chat G P T query since G P T four that like my mom hasn't been able to ask and have it answered by the model.

• 1:47:02Everett Randle?

  Uh, so there's like the mom test of models where like there's a growing subset of tasks like economic or knowledge tasks that the models are tasked to do that no longer need frontier intelligence. And when you're not on the frontier, um, either through open source or just the like the the cheapening and distilling of of older models, like the price still falls off a cliff.

• 1:47:23Sam Altman?

  Sure.

• 1:47:23Everett Randle?

  There's going to be a very, very large set of tasks that models do that are not on the frontier and those are going to continue to get dirt cheap. I actually think that at the frontier, you're probably going to see continued price decreases on a per token basis, but nowhere near what you saw before, which was like this this order of magnitude decrease on a very regular cadence. Uh, and so I think I think for for like depending on the company, it's going to depend on one. If you've actually built a company that has enough power where you have pricing power where you can price above the the kind of marginal token um, price from the actual model providers. And then two, like how much of your inference actually needs to be at the frontier? Like how much of your inference can be an older model that's much, much cheaper? Versus how much do you need to do on on the actual frontier?

• 1:48:05Everett Randle?

  I think that's what you're seeing like, you know, everyone loves to talk about cursor and Chris Paquette over at Pace Capital had this. Really great, kind of like mini essay, I think only like last night or a couple nights ago. And he talked about like, no one knows if Cursor has power yet, because, you know, coders and developers, they're very, very, like, they're tastemakers. They're very good at understanding the quality of the models and how much inference they're getting. And there's a lot of price sensitivity for them because they have a really good understanding of how much inference they're getting. And so, no one really knows, I think no one can definitively say whether a lot of those types of companies have actual power with their users, or if they're just drawn to an interface for frontier models or not. And so I think that's what everyone needs to be looking out for, is those two things, like, do you actually have power? Like, will people give you margin above the marginal cost of tokens?

• 1:48:50Everett Randle?

  And then two, like, do we even need the frontier inference for the vast majority of your product, or is that, or is there a lot that you can offload to cheaper models?

• 1:48:57Delian Asparouhov?

  Yeah, I mean, I guess your counter, you said there, Everett, is that, you know, a majority of what the foundation models are providing in terms of user value to their end users is starting to be, you know, sort of obviated by the, like, you know, the historical generation, even some of the ones that are, you know, sort of open source. So it seemed to imply that where value is accruing and where you'd expect like the highest revenue growth wouldn't necessarily be at the foundation layer, but you'd see it more at the application layer since those folks can squat models out. But like, in reality, that's like literally just not what actually is happening. Like, if you look at which companies are, you know, sort of fastest on user revenue growth, user growth, et cetera. It is the foundation model companies. It seems like a part of it is that they also have, you know, sort of the most pricing power where, yes, you know, your mom, you know, uses GPT-4, but like,

• 1:49:39Delian Asparouhov?

  she's not the one that's necessarily paying like, you know, a hundred, a thousand, $10,000 per month versus the true frontier capabilities on like, you know, AI coding, the pro users, the one that actually do care about, you know, maybe your mom is fine with 115 IQ model, and that's like fine for the rest of her life because she's just like not asking it that difficult of questions versus the people that actually are willing to, you know, to pay are the ones that actually do care about the 140, 160, 180 IQ. Again, maybe at some point that gets, you know, commoditized as well, but my sort of counter to you would be, you've made this argument that seems to imply, hey, you know, things will accrue to the AI application layer, which, if I understand, your guys' portfolio is largely where you guys invested. But in reality, that's not what's played out. The like places that have captured the most, you know, revenue growth, the most market share have been the ones that are actually pushing the true frontier,

• 1:50:24Delian Asparouhov?

  you know, of the, you know, technology forward. And so so far, at least in the last 18 months, your thesis is not pulling out at all.

• 1:50:30Jordi Hays?

  Well, to be clear, the isn't, isn't it somewhat widely understood that Anthropic has negative gross margins as well? So it's, it's not like they're, they're doing.

• 1:50:41Delian Asparouhov?

  Like, Evan's point was that you want to invest in these companies that have the, you know, sort of seven powers and like, you know, in the, you know, days of like Uber, you know, DoorDash, et cetera, that did end up, you know, translating.

• 1:50:49John Coogan?

  It seems like Nvidia has the most power, then the foundation model labs, maybe then the application layer. We'll see how much power develops in the application layer. But Evan, we'll let you respond.

• 1:50:59Everett Randle?

  Oh, yeah, I was gonna say that, that basically what Dalian said was just wrong because even though it is, even though like if you, if you, if you think about, okay, like, let's take like whatever OpenAI and Anthropic's recently reported revenue run rate is, the majority of all of that, or at least the plurality of all of that is ChatGPT. And ChatGPT, even though it is served by a foundation model company, is an application. It is a consumer subscription that has an immense amount of power. It has immense amount of branding. Like, you know, it is the only, it is like the first billion plus user consumer application that's been developed by a new company in a really long time. And so I think that, like, you could put whatever models you wanted through ChatGPT at this point, and it would not knock it off of its perch. I think that is power. Like, you could, you could run Claude

• 1:51:43Everett Randle?

  3 Sonnet through ChatGPT, and I guarantee people, like, the average user wouldn't actually know the difference. And that, to me, is power. And just because the foundation model companies are producing apps themselves, doesn't mean that it's not the application layer that it's, that is accruing the value.

• 1:51:57Delian Asparouhov?

  Okay, then my question is, you know, you've got, you know, OpenAI with the best possible consumer application layer. You've got Anthropic that, like, shifted over to positive gross margins, and those margins are expanding. And yet, client is not investing into either of those foundation model, you know, sort of companies. Why?

• 1:52:11Everett Randle?

  I cannot comment on our current investment activities.

• 1:52:15Jordi Hays?

  Okay. Switching gears.

• 1:52:19Delian Asparouhov?

  I mean, look, do you like making money or do you like, you know?

• 1:52:24John Coogan?

  Can you comment on Donald Boat? Have either of you bought anything for Donald Boat, the notorious e-bagger on X.com, the everything app?

• 1:52:33Delian Asparouhov?

  Like my little brother, you know, played the Uno reverse card and tried to get Donald Boat to buy him something.

• 1:52:38Jordi Hays?

  Smart.

• 1:52:39Delian Asparouhov?

  You know, contrary to our nature.

• 1:52:41Jordi Hays?

  Let's talk about revenue quality, because I think that you guys run into this in your respective domains every single day. Just like in AI, you can have low quality revenue, like that might be the explosion of like consumer prompt to app activity, you know, might not be the highest quality revenue. Meanwhile, on the hard tech side, if somebody gets like a random like Ciber or like experimental, gets like experimental budget from some branch of the military. And it's like a fine, you know, fixed length contract, it's not necessarily the right strategy to slap like a 50x revenue multiple on it. So like, what's your view on both of those?

• 1:53:24Jordi Hays?

  And then I want to talk about if we should get into if accounting rules even matter at this point.

• 1:53:29John Coogan?

  For sure.

• 1:53:32Delian Asparouhov?

  Yeah, I mean, in hardware land, we think about this all the time of like, there's clear differences in quality of revenue, everything from like, you know, defense, you know, program of record. You have to value that very differently than even like a $50 million, you know, SBIR. And so it has been interesting to see a bunch of investors coming into this field where I think there's a lot of pre-existing 10 years of rules around software of like, what, you know, healthy revenue looks like, rule 40, there's all these things that like, you know, even if you're somewhat unsophisticated, infinite blog posts, when you look at that in the world of like hardware and defense, you know, sort of investing or aerospace, there aren't like infinite blog posts for people to study. And so I admit that I'm sometimes amazed when I watch people come in, even for, I should never, you know, sort of trash my own portfolio, but sometimes even my own portfolio companies, I watch people invest in them. And I'm like, wow, like you just have a deep under appreciation for just like,

• 1:54:15Delian Asparouhov?

  how long this company has until gross margin flips to like positive, how long it's going to be until they're actually, you know, sort of ready to, you know, go scale revenue. Even if it on the backend, it might be attractive, it may be years and years for them to, you know, sort of get there. And so, yeah, I see huge variation on that. And then mostly what I end up, you know, sort of seeing is people just come in and like slap a 10 to, I even saw 100x rev rate multiple on this like hardware company recently. And I was like, Holy shit. Wow, people like not having IRR for a long time.

• 1:54:45Everett Randle?

  Oh. Yeah, I think, um, so, uh, Delian's, uh, hero and close mentor, Bill Gurley, had an essay a long time ago called the 10x Revenue Club. Uh, and I, I think it's like a good abstraction for kind of like tech revenue quality and like what makes up revenue quality and it's things like, you know, how durable is the revenue? Like if you sign a customer, are they going to stay for a year, 20 years? Um, you know, how much contribution profit is going to come off of that revenue stream over time? Um, all the basics, and I think you can like take those same building blocks and apply it to AI. I think there's several things that are worse, uh, for AI than, at least than, than relative to SaaS for now. So generally gross, like gross margins are lower, which means contribution profit coming off is lower. Um, I actually think that like depending on the category, you could have customers that are more sticky or less sticky.

• 1:55:29Everett Randle?

  Like I know the meme is that everything's experimental run rate and none of these customers are actually sticky. I think we see something very, very different, uh, among the, the, our group of portfolio companies. I think the, the biggest lever that didn't exist in SaaS that exists in AI that could be a huge call option boon for the revenue quality of AI is the actual contract sizes as people start to eat into potential labor budgets. I know this is like still kind of like inning one and inning two, and it's also like a little bit of a meme where everyone's like, oh, it's going to replace labor and labor's 10 times SaaS and it hasn't really happened yet. But I think if you look at some of these coding tools and you look at something like Claude Code, that is the first place where you can really actually say like, no, this is replacing the labor that a developer would do and it is paid for on like a metered consumption basis.

• 1:56:11Everett Randle?

  And the monetization numbers we're hearing around developers using Claude Code are pretty crazy in terms of like, wow, that's like, you're paying like one 10th of like a developer's full in cost to a company on an annualized basis for this product. And so I think that the like, the, the thing to watch is like durability of revenue plus the amount of actual revenue that a customer can give you. And I think that you're going to end up, or the amount of gross profit that a customer can contribute over time. And I do think as some customers crack these agentic products that look and monetize more like labor, um, AI revenue could actually exceed the quality of SaaS revenue just because you're getting so much more gross profit per customer or, or like customer relationship than you would on the SaaS side, even though there are clearly things that are worse about AI revenue at, at this current point in time than there are about SaaS revenue.

• 1:56:55John Coogan?

  Dillian, how do you think about the moral imperative of a venture capitalist to invest in positive sum versus zero sum markets? This idea that you're re-industrializing America, you're saving the West versus moving chips around versus moving chips around the poker table, taking from some legacy web 1.0 company and putting it into an AI company? What's your thinking and argument there? Is a market beating ROIC all that you need?

• 1:57:30Delian Asparouhov?

  Yeah, I think Peter always reminds us, like, our number one job is to deliver returns for user LPs. And so I actually tend to not try to overly moralize when analyzing the things that I want to invest into. For sure, when it comes into like, policy and I'm in DC and I need to sort of report to the Security Council that Bill Gurley is a Chinese spy and like the investments that he's making should probably be banned from the United States. Yeah, for sure there I have sort of moral imperatives and things that influence that may end up shifting ROIC, right? So, but when it comes to like, which literal investments are we making? I think of it as just like, yeah, you just have to sort of make the best possible investments irrespective of sort of moral imperatives.

• 1:58:13Delian Asparouhov?

  But in some ways, I tend to think it turns out actually if you go too immoral, then that ends up affecting ROIC. So, and the last thing that I would at least close on for my question for Everett is, one of the upsides of Founders Fund is we're very, let's say, non-centralized, distributed, not many rules, which ever for some reason you chose to leave. And so I know nowadays, everything that he says publicly, probably five comms people and five compliance people need to approve it. And so I have my only request to you is to blink twice if somebody's got a gun behind the camera. That's all you got to tell us, brother.

• 1:58:58Delian Asparouhov?

  Let us know.

• 1:58:59Everett Randle?

  Hey, our wonderful marketing partner, Ally, is behind the camera with a green and red paddle and she hasn't raised the red paddle yet.

• 1:59:06John Coogan?

  That's great.

• 1:59:07Everett Randle?

  So that's.

• 1:59:09Jordi Hays?

  Last question, are you worried about Uncle Sam potentially having sharp elbows now that we're hearing about the federal government taking a stake in Intel? Any concerns about him going down the stack into the early-stage game, competing for those seed and Series A allocations?

• 1:59:27Delian Asparouhov?

  Look, if Trump Capital wants to sort of mark up some of the re-industrialization companies, I'm all for it, baby, cheap cost of capital.

• 1:59:34Jordi Hays?

  You're all for it.

• 1:59:35Everett Randle?

  I'll say two things, I'd say, one, I think that the EV of like the enterprise value of Founders Fund, probably 3X the night that Trump got elected, so I don't think Delian would complain about that. And then two, as a parting gift, Delian, I think this conversation's been great and it's made me realize why you want to build factories in space, because your math on Earth doesn't make any sense.

• 1:59:55Jordi Hays?

  Well, thank you both for joining. This is fantastic. You're both good sports. We'll have to do this again. I think it might be a draw, we'll have to have you both back soon. Thanks so much for hopping on. Great stuff. We'll see you guys later. Cheers.