Bill Gates foresees massive AI job loss: these VCs disagree | E2330

This Week In Startups is made possible by: Lightfield https://lightfield.app Northwest Registered Agent https://www.northwestregisteredagent.com/twistdomain Rippling https://Rippling.ai/twist Today's show: *Bill Gates dropped a 6,000 word warning: AI will be "the greatest equalizer ever invented, or the worst sort of injustice." The Microsoft icon has an AI agenda for the US: new national institutions, AI use taxes, and jobs legally reserved for humans only. Our VC roundtable guests — Sheel Mohnot (Better Tomorrow Ventures), Dave McClure (Practical Venture Capital), and Hussein Kanji — push back hard. Is taxing profits a better fix for AI taking jobs than taxing the tokens themselves? PLUS: Meta's $17B kids safety settlement… does it go far enough? Why does Stripe want OpenRouter? A peek at the VC's actual portfolio mark-ups. AND begun, the AI agent wars have. Our panel chooses between OpenClaw, Instinct, and Grok Bot. Guests Sheel Mohnot on X: https://x.com/pitdesi Better Tomorrow Ventures: https://www.btv.vc/ Dave McClure on X: https://x.com/davemcclure Practical Venture Capital: https://practicalvc.com/ Hussein Kanji on X: https://x.com/hkanji Hoxton Ventures: https://hoxtonventures.com/ Relevant Links GatesNotes: "The turbulent AI era is here": https://www.gatesnotes.com/a-turbulent-ai-era-and-critical-choices-to-make NPR: Meta settlement coverage: https://www.npr.org/2026/08/26/nx-s1-5944781/meta-settlement-child-safety-lawsuit TechCrunch: Stripe agrees to buy OpenRouter: https://techcrunch.com/2026/08/16/stripe-will-reportedly-acquire-ai-gateway-startup-openrouter-for-7b/ Skild AI S1 Demo: https://www.skild.ai/blogs/s1 Instinct AI agent (waitlist): https://instinct.co/ TechCrunch: Instinct coverage: https://techcrunch.com/2026/08/24/instincts-powerful-ai-assistant-is-raising-privacy-and-security-concerns/ CNBC: OpenAI CFO says IPO is coming in 2027: https://www.cnbc.com/2026/08/19/open-ai-ipo-timing-2027-friar.html Basis: https://www.getbasis.ai/ TaxGPT: https://www.taxgpt.com/ Cusp AI: https://cusp.ai/ Abacus: https://goabacus.co/ Micro1: https://www.micro1.ai/ Mottu: https://mottu.com.br/ EquityBee: https://equitybee.com/ Kiva: https://www.kiva.org/ Timestamps: 0:00 It's Hussein's first time on the VC Roundtable! 2:09 Gates says "turbulent era" for AI is here 8:56 Microloans, Kiva, and "universal basic income" 9:23 Thanks to our partner, Lightfield, the AI-native CRM that updates itself, so you never have to! Try it for free at https://lightfield.app 13:00 Why sole proprietorships may be AI's biggest beneficiary 20:29 Got a new business idea? Northwest helps you bring it to life. Get a free domain, email, phone number, and more, with no purchase required! Learn more at https://www.northwestregisteredagent.com/twistdomain 21:00 Should the gov't take a stake in AI labs? 30:24 Thanks to our partners at Rippling! Head to https://Rippling.ai/twist to get the only AI built to give you full visibility across your startup and take complex actions across your entire business. 32:44 Meta's $17.1B settlement 45:14 Is anything still fundable outside of AI? 46:29 Stripe and SpaceX deals 55:54 Skild AI's pancake flipping demo 59:49 Sheel's Hottest Takes 1:04:37 Dave's Charts 1:09:07 Who loses money when there are no IPOs? 1:16:49 The Agent Wars heat up 1:24:56 Everyone's favorite investments Subscribe to the TWiST500 newsletter: https://ticker.thisweekinstartups.com Check out the TWIST500: https://www.twist500.com Subscribe to This Week in Startups on Apple: https://rb.gy/v19fcp Follow Lon: X: https://x.com/lons Follow Jason: X: https://twitter.com/Jason LinkedIn: https://www.linkedin.com/in/jasoncalacanis Thank you to our partners: (0:00) PARTNER - AD BLURB (0:00) PARTNER - AD BLURB (0:00) PARTNER - AD BLURB Check out all our partner offers: https://partners.launch.co/ Great TWIST interviews: Will Guidara, Eoghan McCabe, Steve Huffman, Brian Chesky, Bob Moesta, Aaron Levie, Sophia Amoruso, Reid Hoffman, Frank Slootman, Billy McFarland Check out Jason's suite of newsletters: https://substack.com/@calacanis Follow TWiST: Twitter: https://twitter.com/TWiStartups YouTube: https://www.youtube.com/thisweekin Instagram: https://www.instagram.com/thisweekinstartups TikTok: https://www.tiktok.com/@thisweekinstartups Substack: https://twistartups.substack.com

• 0:00Speaker 00

  Bill Gates published a 6,000 word essay today called "The turbulent AI era is here. AI will quote, "Either be the greatest equalizer ever invented, or the worst source of injustice." And that right now, quote, "There is no plan."

• 0:13Speaker 01

  Some jobs are probably going to go permanently go away.

• 0:17Speaker 02

  Humans is kind of sort of get in the way. It is probably like a real thing.

• 0:21Speaker 01

  I trust tech more than I trust government.

• 0:23Speaker 00

  Every time somebody really adopts these tools inside of my firm, three or four new opportunities open up for our company.

• 0:30Speaker 03

  This week in startups is brought to you by Rippling. Don't settle for AI that's all talk. Head to rippling.ai/twist and get the only AI built to give you full visibility across your startup and take complex actions across your entire organization. That's R I P P L I N G dot AI slash twist. Sign up for exclusive access today. Northwest Registered Agent. Got a new business idea? Northwest Registered Agent helps you bring it to life. Get a free domain, email, phone number, and more with no purchase required. Learn more at www.northwestregisteredagent.com/twistdomain/litefield. Name one person who's ever enjoyed updating a CRM. Exactly. Lightfield's AI agent does it for you. It even prospects and books your meetings. Used by thousands of startups. Free at lightfield.app.

• 1:14Speaker 00

  All right, everybody. Welcome back to This Week in Startup slash This Week in VC. Every Wednesday, we do a VC roundtable, 10 a.m. on the left coast, 1 p.m. on the right coast, and here in the great state of Texas, we go live at noon on Wednesdays. With me today, what a lineup, what an amazing amount of news. The docket runneth over. Shiel Monat is with us. How are you doing, Shiel?

• 1:38Speaker 04

  Great.

• 1:39Speaker 00

  Good to see you, you and I getting into it, minimum wage, jobs.

• 1:43Speaker 04

  I love it.

• 1:43Speaker 00

  Great debates on.

• 1:45Speaker 04

  I love it.

• 1:45Speaker 00

  Dave McClure, founder of 500 startups, now 500 global. He's got a great podcast about strip mining the VC industry called Trading Places. I just came up with that.

• 1:56Speaker 01

  Trading Places.

• 1:56Speaker 00

  He's using my podcast to promote his podcast, but I give him a promo for his podcast instead of paying him the $400 minimum wage for his SAG-AFTRA appearance here. He's with Practical Venture Capital.

• 2:12Speaker 01

  We launched on your show a year ago.

• 2:14Speaker 00

  Yes, and I get your shorts. Your shorts are great. TikTok shorts are great.

• 2:17Speaker 01

  He's talking about my video clips, not my pants.

• 2:20Speaker 00

  No. Dave is known for wearing shorts in completely inappropriate settings like conferences, his office, et cetera. And with us, I think for the first time, Hussain Tanji is here. Hussain, it's the first time you're on the program. Yeah.

• 2:36Speaker 02

  I'm dialing in from London, so making it global.

• 2:39Speaker 00

  Great. And Dave, where are you dialing in from?

• 2:40Speaker 01

  I'm in Sunnyvale, which is very sunny today.

• 2:43Speaker 00

  So, Shiel, I assume, San Francisco?

• 2:46Speaker 04

  San Francisco.

• 2:47Speaker 00

  And I'm in Austin at The Ranch. Lots to talk about today. Three great investors on the program. And I think we start out with Bill Gates. Bill Gates published a 6,000 word essay today called, "The turbulent AI era is here. The choices we make now are critical." Obviously, you have to hit exactly 6,000 words. That's what Jensen and Zuckerberg did recently. If you don't hit 6,000 words, we don't know if you wrote it yourself. I didn't run this one through an AI checker yet, so we'll see if it's a drunken miller or not. But he argues AI will, quote, "Either be the greatest equalizer ever invented, or the worst source of injustice."

• 3:27Speaker 00

  And that right now, quote, "There is no plan." Gates warns AI risks are outpacing its benefits. Interesting. Threatening jobs across law, medicine, and software. He's calling for a new national institution of some type and AI usage taxes and making some jobs, reserved jobs, that can only be done by humans. Dave, you read the manifesto, or at least the summary of it. Your thoughts on Gates coming in at this moment now? So, from a meta commentary perspective, why is Gates commenting now? And what resonated with you as true?

• 4:08Speaker 00

  And what resonated to you as not true, or, God forbid, a worse take?

• 4:14Speaker 01

  I don't know particularly why now, although maybe Gates had some bad press that he's trying to get past in the last.

• 4:19Speaker 00

  Okay, I like that theory.

• 4:21Speaker 01

  That might be some reason. I think the three main points I kind of agree with, some jobs are probably going to go permanently go away. Bad actors get superpowers. That's probably true. Not just due to AI. I mean, drones are already seeing bad actors get superpowers with not too much money. And then kids and human connection. And I guess that might be topical today because Meta is just paying $16 billion in fines for, I guess, potentially getting kids addicted to social media.

• 4:54Speaker 00

  Yeah, definitely getting kids addicted. And that'll be our second story. Shiel, when you read the missive, any thoughts on why now? Or any thoughts on what resonated as true?

• 5:06Speaker 02

  I think everything he says is broadly true. There will be a lot of job losses. I still, in my head, don't have an idea of, is this like, is this actually going to change everything? Or is it some subset of the population that, you know, gets their job displaced? Jobs displaced. And it starts out with like, the jobs he's talking about. Many of those were already displaced when we started outsourcing, whatever, 20 plus years ago. In terms of why now? I don't know why now. I think now is as good a time as any. I think he talks about the enormous potential that AI has, which is awesome. I can't say I understand enough about why, about like,

• 5:47Speaker 02

  what we should do about it to have a strong, fully formed thought. He proposes that the AI companies should contribute and like, there is a democratic participation where everyone,

• 6:02Speaker 02

  everyone has a say in how this goes, which I think is a reasonable, a reasonable idea. I think we've been operating as if the AI companies can just, you know, do anything. And clearly, the public sentiment is very bad on that. So, I think there probably does need to be some change. And I think his proposal makes sense.

• 6:21Speaker 01

  I think the public sentiment, I just saw something recently where it was mostly coming from environmental, you know, sort of impact, not so much the economic impact, which I think, you know, maybe is a little surprising. Probably energy and power usage are, you know, primary on people's concerns. I still wonder whether like, you know, whether there's jobs displaced or not, shouldn't we be really like, thinking about AI, kind of like the new oil? Like, shouldn't we be creating sovereign wealth funds with our surplus coming from AI and sharing that broadly? I don't think Bernie Sanders taking 50% is the right story, but Sam was trying to get in front of this and offer like 5 to 10%, I think.

• 7:01Speaker 00

  So, a tribute, as the world's jobs evaporate, Hussain, any idea of how you would get a coordinated effort? Because Gates points this out in his missive. How we get the world coordinated in either reserving certain jobs, not using robots for certain jobs, which I think would be factories, maybe, or healthcare he brings up over and over again. And then how to tax it? Like, this is a tragedy of the commons, I guess, where you would need, Hussain, everybody to agree, okay, yeah, we won't give these jobs over, but if my company decides on the slide and sneakily uses AI to solve the problem, now I've got a better profit margin, right? So, is there any way to

• 7:46Speaker 00

  coordinate the world if we can't get rid of nuclear bombs, or can't stop global warming, can't stop burning fossil fuels, to get people to stop using AI tools in some coordinated fashion? Is that possible?

• 8:00Speaker 02

  The idea of coordinating global, like, world, different world countries since like, First World War II, I mean, is there any evidence that we are good at kind of figuring out how to tackle any of the big problems? I mean, so like, you know, this is a human problem, not an AI problem. And maybe you have the keys over to the AI, maybe they might do a better job, like, it might do a better job. But the general idea that, you know, automation is going to happen, AI is going to get better at the automation, human jobs are going to get deprecated, and as a result, well, like, society, like, the economy will be so much better run by automation that you actually, humans just kind of sort of get in the way, is probably like a real thing. Like, I mean,

• 8:41Speaker 02

  I feel like that's kind of sort of playing out. And if you really believe this idea that like, a dollar of compute equals, you know, $10 of intelligence, it's, I think it's only a matter of time before even the higher cognition things in society kind of get replaced. And then there is like, a genuine problem. And this is not a new topic. I mean, like, science fiction authors are usually like, like, decades ahead of everybody else on this stuff. Like Kurt Vonnegut wrote about this stuff, Player Piano, it's like, the first book, or Dr. Wright about this stuff. Not, and in his book, it was Walk Away, like, it's an old idea, like, in terms of coming back. But it's, it's manifesting. And I think almost everyone who's in AI has thought about some variation of this. Like, you know, Sam had the UBI, you know, initiative, like, a decade, like, five years,

• 9:25Speaker 02

  it feels like an eternity ago in our industry, but like, this is, I think, a.

• 9:28Speaker 00

  Which notably didn't work.

• 9:29Speaker 02

  Which did not work.

• 9:31Speaker 01

  I think that's just implementation details. I think, you know, not giving people money, but giving people access to capital with some amount of debt repayment is probably a better strategy.

• 9:40Speaker 00

  You think microloans, like we saw, what was the microloans site that we all lost our minds on 10 years ago? Kiva. That actually worked, right? Like, do we need to double click on that again and go back to like, microloans for micro entrepreneurs?

• 9:53Speaker 01

  Microlending, I was, I was on the board of a company called Unitas that basically helped solve microlending in India 20 years ago, and was successful enough that now, microlending is a commercial asset class in India.

• 10:08Speaker 00

  All right, I'm here with Keith Perez. He is the founder of Lightfield, and they are a CRM system built natively in AI that takes all your emails, calendars, Slack messages, all the stuff you keep losing, puts it in one place, and creates organization out of chaos, so you don't lose any customers. Keith, welcome to the program.

• 10:25Speaker 01

  Thanks for having me.

• 10:26Speaker 00

  I got to ask you. I mean, it's 2026. I've used three different CRM systems in my life. The team hates them. Everybody hates CRM. How does Lightfield help me as the CEO founder get people to use a CRM system?

• 10:41Speaker 05

  The first thing is, your team won't have any CRM admin to do. They don't even have to log in if they don't want. It'll update itself. They'll have to occasionally approve some updates. So all of the clerical work is gone. Second, it's going to do work for your team on their behalf. So they're going to spend way less time doing follow-ups, outbound prospecting, account and health scores. Lightfield will do all of that for them. And then third, for you as CEO, it'll help you better forecast because now your forecasts are based off of some real unstructured customer truth, not just pipeline numbers. And it'll uncover new opportunities for you around what product areas you should be in,

• 11:23Speaker 05

  what industries you should be in. It'll proactively give you feedback from your customers on where to take your business.

• 11:31Speaker 00

  So everybody go check out lightfield.app.

• 11:34Speaker 02

  Let's be realistic. I don't think anyone trusts us as techies to kind of figure this problem out. And then the problem is you look around, you look across the aisle, right? Everyone in government, like, I don't think any one of us would really trust. And I don't even think you can converge on decisions in government to figure this out and then make the problem like a global problem.

• 11:53Speaker 01

  I trust tech more than I trust government.

• 11:56Speaker 00

  Well, if you trust capitalism, if we look at, if we parallel AI and intelligence, job loss and this technical wave, and we compare that to, say, energy.

• 12:09Speaker 00

  Capitalism and demand and supply, innovation in the form of solar becoming cheaper and cheaper and cheaper, and batteries becoming denser and denser and cheaper, seem to have solved the problem. It's now more expensive to either retrofit a coal mine or build a coal mine than it is to build solar. Great state of Texas, we're the largest provider of solar in the United States. And I can tell you the people here are not precious about their oil. They're not like, we're Team Oil, we'll never touch solar. They're, what is the best, most profitable, you know, next energy supply I can create?

• 12:46Speaker 00

  And in, I think, four out of five times, it's going to be solar unless you can build the data center right on top of a nat gas field. And so that would lead me to argue, well, maybe there's going to be a lot of displacement in jobs. I think we all know that's going to happen, displacement.

• 13:04Speaker 01

  Sure.

• 13:04Speaker 00

  But what I'm seeing is the people with these tools, every time somebody really adopts these tools inside of my firm, three or four new opportunities open up for our company. And the ability to go faster and solve more problems happens. So this harkens back, Sheil, to the quote that I think Jensen got right. You're not going to have your job replaced by AI. You can have your job replaced by somebody using AI.

• 13:30Speaker 00

  That's what I see in the field in white collar work. Now, for blue collar work, Sheil, I think it's distinctly different. Watching what I'm watching and I have a lot of investments in self-driving car companies, in all of them essentially, from ZipLine to Uber, you know, anything that's public, I dipped in. I don't know that a person who learns AI is suddenly going to deliver more burritos or do more airport jobs. I think they just lose their job, right, Sheil?

• 14:02Speaker 04

  I think that's probably right. Now, that also was true, like, 120 years ago in the United States, everyone was a farmer, pretty much. And now we're not. There have been other jobs where things have been displaced. I think the timeline, we talk about it, and even Bill Gates talks about it as if it's instant, but it's really not. Like, it actually, these things will take time. And your DoorDash driver is probably safe for the next five, 10 years. And in that time, by the way,

• 14:31Speaker 01

  I don't think 10 years. I don't think

• 14:33Speaker 00

  Okay, but five, you think? So we're between, you said five to 10. You take the lower end of the range?

• 14:37Speaker 01

  Yeah, I think, you know, we're seeing job displacement in knowledge industries very fast, but like, physical

• 14:44Speaker 04

  Where are you? You're not seeing it in the data.

• 14:45Speaker 00

  Yeah.

• 14:47Speaker 02

  Not yet. Not yet. I think, I think

• 14:49Speaker 01

  You don't think like the jobs that we've been doing, knowledge-wise, are much easier now with AI?

• 14:54Speaker 00

  Definitely easier, but we're not seeing the job loss. Yeah, that's the

• 14:57Speaker 04

  But we have data on this and it's not happening yet. I'm sure it will. I agree with you, but

• 15:02Speaker 02

  But Sheil, we're still, we're still in the early innings of a lot of this stuff. I think the thesis question is not that this is, I mean, you could argue this is not going to happen and jobs will get created. Or you could argue that this stuff compounds so well that it becomes so much more competent than any of us needing the jobs. And then the question is what to do with us, like?

• 15:20Speaker 04

  Yeah.

• 15:21Speaker 01

  I think hiring in tech industries has definitely been like slimmed down a little.

• 15:25Speaker 00

  It's flat.

• 15:26Speaker 01

  We're not hiring, we're not hiring as fast as we are like increasing productivity, which, which is already going to be a good thing.

• 15:33Speaker 00

  Well, I think that's the nuance between both of your positions. When Sheil says we haven't seen the job loss and you say we're seeing massive productivity, both of those are true. And if you look at a company like Microsoft or Google or Uber or Facebook, in many cases, they have the same relative number of employees over the last five years, plus or minus, let's say, 10%. And if you were to do that Claude search, or you did a, you did a search on like employee count per year, you'd probably see flat across them and you would see earnings growing 30, 40% and top line growing 10 to 20%, which is extraordinary. And that actually is AI making the people working in companies more efficient.

• 16:13Speaker 01

  You're going to see massive net positive benefits for small business and small business creation due to AI. Like, I think actually the biggest beneficiary of AI will be a whole bunch of sole proprietors and small business.

• 16:24Speaker 04

  Totally.

• 16:25Speaker 00

  Why? Unpack it. Why, why will we see a lot more? I think I have a guess.

• 16:28Speaker 01

  Because they will move fastest, they can move fastest, they can be creative, you know? The benefits of AI tools to someone who's running a small business is probably like pretty immediate. Like, if you learn how to like get customers better, do your job better, faster, you know?

• 16:43Speaker 00

  You get the gains immediately. They accrue immediately.

• 16:46Speaker 04

  And there will be AI software companies that help people run their sole props much better. So like, if you're a therapist, you used to have to have a receptionist, you had to have somebody schedule, like, all this stuff billing. Now an AI can do all that stuff for you, which does speak to job loss, but also speaks to sole props being able to function much easier than they could before.

• 17:07Speaker 01

  If you have one person doing each of five jobs and now they're doing like 10 jobs with AI.

• 17:11Speaker 02

  Yeah, I mean, simplistically, if the virtual humans are better at doing the jobs than the actual humans and they're a lot cheaper and you can put, you can, you can deploy a thousand of them like overnight versus having to deal with interviewing, hiring, et cetera. Anyone who hires people is going to probably benefit from this thing. That's a simplistic way. The big question to me, though, going back to this, the big question, like, what happens if humans are deprecated, right? Then how do you build a market-oriented economy to figure out what the heck to do with the humans? Because you probably can't get an autocrat to figure it out. You probably can't government institutions or global institutions to do it. So how do you build a market-oriented economy to figure out how to solve this problem? Like, this is, this, the problem stuff is like kind of trivial to me.

• 17:56Speaker 02

  Like, the solution stuff is like the real intellectual stuff. That's the hard

• 18:00Speaker 00

  Let's, let's pull that string. I'm going to agree with Dave and Sheil on sole pri, sole proprietorships booming, but not just because the existing ones are going to be run better and then they maybe make more profits. So, hey, the person who's the therapist is like, you know what? I just want to have an assistant to manage all the AIs and keep that train going because I'm so much more profitable, but I don't need the second and third one, right? I don't need the outsourced accounting firm. We can just do that in-house. So there could be less people per sole proprietorship, but if you can't get a job coming out of school at Uber, Meta, Facebook and Microsoft, because they're not hiring,

• 18:41Speaker 00

  but you have been using AI to cheat your way through school and you're an expert at it and you know how to get, you know, straight A's.

• 18:49Speaker 01

  Well, you're talking about my kids right now. I've got a

• 18:51Speaker 00

  It is what it is. It is what it is. Like, as far as I'm concerned, if you learn how to cheat on your way through Harvard and then you're perfectly positioned to use AI to actually create a company because it's the same tools. How do I get this task? Here's the goal. Go get the goal. And you just motivate, it's set the loops up, et cetera. So I think we'll see a Cambrian explosion in sole proprietorships because you're just not going to have four job offers. People graduating from college are not going to have like, Mike, unless they happen to be a PhD in AI, but they're not going to have people competing for it. But let's talk about your question, Hussein, which is, what are practical solutions? I have one that I've been talking about a bit. People tell me I'm a libtard when I bring it up.

• 19:38Speaker 00

  Because, God forbid, we even consider humans and employment in this occasion and, and giving them, you know, it's just complete weakness to have empathy for somebody who's an Uber driver or a DoorDash-er. But in China, They are now giving out licenses for self-driving vehicles and they have stopped giving them out. So they have a cap essentially right now because in Wuhan, in Beijing, in Shanghai, and the markets where you have three or four different people flooding the zone with these young men who are not making as much as drivers or, you know, can't get a driver job are getting restless. My prediction is the socialists in the country who are rising up right now and saying, hey,

• 20:23Speaker 00

  we're going to defend workers. We're going to make sure you have a more affordable life. Two ways to do that, cut prices, which they can't do. That doesn't work. Second way, give workers protections through unions and minimum wage, et cetera. They can successfully do in all likelihood, or it's an easier path. I bet you we see AOC and Mondami and Boston and DC, LA, just say, you know what? If you want a self-driving car license and you want to deliver burritos, deliver burritos, and I'm talking against my book right now, you just need a license. The licenses are auctioned off at $30,000 starting price. I think that's literally what we're going to have in the next two years as people respond to it. Do you have solutions, Sheil?

• 21:05Speaker 00

  In the case that we had a quick job displacement occurring, a brisk one as opposed to a manageable one? Okay, so you have identified a real problem and you put together a solid solution and a business model that you believe in. So you're all set to launch your new company, right? Not so fast. If you want investors and potential customers to take your new business seriously, you need to consider forming a Delaware C corp. And that's where Northwest Registered Agent comes in. They're going to give your new company a real identity. That means an address for your public filings, a domain, a custom website, a business email, and of course, a phone number. And that's going to take just 10 minutes and 10 clicks. They don't charge hidden fees. Customer service is available

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• 22:06Speaker 04

  I think that's a reasonable solution to say, so there's a license for a self-driving car and there are externalities that develop from that. Now, there are huge positives that come from that. Like you have more trust, you have fewer accidents. Self-driving cars are amazing. But I do think that it's totally fair to say to society that we need to tax these. And I don't see immediately a bad, that that's a bad plan.

• 22:41Speaker 00

  Dave, any thoughts here for if we do see any kind of acute job loss, as Bill Gates is predicting, ways society can manage it? Do you think that we should be taxing consumption of tokens in corporations in some way? Should we be looking at the people providing the tokens and saying, hey, you know, when you sell hotel rooms, we put a 12% tax on it in New York City, whatever it is, and that goes towards, you know, whatever infrastructure? Do you think there's a, there could be a time where there's a federal token tax of 5% or 10% that goes into the unemployment?

• 23:16Speaker 01

  I don't think that's a great idea because token costs are going down to zero. So you're going to be taxing a diminishing return asset. I do think Gates is correct that right now incentives are probably, you know, because you can depreciate infrastructure and capex spend, you're more likely to hire, you know, agents and things that you can, you know, depreciate. So we probably got to do, figure out some way to make that a little bit more level playing field. But I think what we're really trying to do is how do we recreate the New Deal program in an AI era? Where like before, you know, Tennessee Valley Authority, you know, building the highways, doing all that stuff, you know, back in the 30s and 40s and 50s made sense. But these days,

• 24:00Speaker 01

  I would say probably got to think about more human oriented stuff. So like, you know, maybe some kind of care economy for seniors and people, you know, human services. Maybe we have an advantage in providing emotional support and care for people over agents, at least for the short term. Probably not just down to, you know, liberal, but hey, arts and culture. You know, if everything is, you know, jobs are being taken away in productive industries, maybe we create, you know, cultural art that people actually enjoy. I don't know. I think it's going to be hard to create, you know, hundreds of thousands, millions of jobs if those get displaced. But I do think we need to start

• 24:42Speaker 01

  planning for the equivalent of, you know, retraining budget and/or support budget for people who are going to be displaced. Like it's not going to go well if those people feel like there's a small percentage of humanity which is empowered and rich and a large percentage which is displaced and poor. That's going to end up looking like France in the 1800s.

• 25:06Speaker 02

  Dave, the China model feels like it's trying to stymie progress, right? You're trying to put a barrier?

• 25:12Speaker 01

  China has some big problems. Like we're taking a group of folks to China in October, about 50 people are going to go to Shenzhen and Shanghai and take a look at what's going on. But China has significant unemployment problems for the youth, like.

• 25:26Speaker 02

  But if you, let's assume if this thesis is correct, you don't want to stymie it. You actually want to accelerate.

• 25:32Speaker 01

  I agree. I don't.

• 25:34Speaker 02

  Get the automation to be, to be as fast as possible. Because remember, since the Industrial Revolution, we have largely like lived to work. You know, there is a theory where we may not have to do that anymore. We could go back to kind of purpose.

• 25:46Speaker 01

  Completely agree.

• 25:47Speaker 02

  Especially, and then like, it's very Star Trek-y, right? You know, the stuff just happens, but you want to, then there's going to be a 20-year period, maybe a 10-year period, like a decent amount of time where it's going to be awkward as heck because the jobs are going to dissipate. It won't be solved. But once you get past that funding trap, like.

• 26:03Speaker 01

  I don't think it'll take 20 years.

• 26:05Speaker 02

  You think it's longer?

• 26:06Speaker 01

  It'll take 20 years. I think the big benefits of AI, like three big benefits that I do think will happen is we will get to free energy, we will get to free food, we will cure cancer and major disease. Those things are definitely on the horizon. But the distribution of those benefits to all of humanity will be incredibly uneven. And that's where I have concerns. Like if we solve all those problems, but like 2 billion people on the planet are still, you know, hungry and don't have access to power, that's not going to be pretty.

• 26:39Speaker 00

  I agree with you on the power one. I recently had somebody on This Week in Startups who has robots taking panels, driving them out and installing them, and then goes back to the factory, grabs another panel, installs them, and there's a human like watching it occur and just making sure, yep, that bolt's good. And I just said, wait a second. We're going to have a 24-hour factory, like Elon's going to pop up a solar factory in the middle of a desert and it's just going to go out in all 360 degrees and just lay solar panels. And then we just have to obviously get the hookups to go to where it's needed, which then would of course, Dave, from our time in the Middle East,

• 27:18Speaker 00

  would make for free unlimited water if lunatics don't stop desalination because they're concerned about like the guppies. So you have free energy, you have free, you have free water, free water plus free energy and a bunch of excess optimists. And Elon showed me like one of the latest optimists. He's not showing them publicly anymore, but he just happened to show me on his phone and I was like, whoa, that's moving faster than what he showed me six months ago when I visited the optimist lab on a Sunday and it was packed. Like, he's going to make a billion of those. If a million of those were out there, you know, planting strawberries, like the price of strawberries is going to be a

• 28:02Speaker 00

  dollar a pound, 25 cents a pound. It's going to be nuts. Sheil, your thoughts on the benefits?

• 28:08Speaker 04

  I agree. I mean, I feel like we don't talk about the benefits enough.

• 28:13Speaker 00

  Yeah.

• 28:13Speaker 04

  And all we talk about sort of like what Dario says, everyone's going to lose their job or whatever.

• 28:20Speaker 04

  I think taxing tokens doesn't really make sense because you actually want to promote the use of tokens when it makes sense. But I think it is fair to say, hey, if these companies have enormous excess profits that concentrates wealth, then tax the excess profits. It also makes sense to say like, hey, if we believe that there's a particular type of harm that's happening and it creates costs, we should tax that. So like, you know, the robot taxi, maybe there's a per mile tax, totally reasonable. And then I think if people talk about the energy usage or water usage, I don't think is real, but people talk about energy usage, which is real. And I think

• 29:04Speaker 04

  if it's consuming a scarce resource, then we have the right to charge for that scarce resource.

• 29:14Speaker 04

  So I think that's

• 29:15Speaker 01

  I think you're right about the water usage. There's more water usage by pistachio and almond farmers than there are.

• 29:19Speaker 04

  Totally. It's all bullshit. But people still, people, I don't understand.

• 29:24Speaker 01

  But the power usage is real. Power usage is going to raise bills for people unless we subsidize and take care of power.

• 29:30Speaker 00

  Which, anybody building a data center has the brains to know that they should just go to the community and say, not only are we not going to increase your electricity, how does free sound? Free for five years? Sound good?

• 29:44Speaker 01

  But that's basically like we're doing redistribution on a piecemeal basis. And I think it's probably just better to get ahead of that and say, look, let's take 10% of Anthropic and OpenAI and solve our national debt problem.

• 29:57Speaker 00

  Well, I mean, if you took a third, if it's worth three trillion.

• 30:00Speaker 04

  So you're proposing just the government takes 10% of the companies? Is that what you're proposing?

• 30:04Speaker 01

  Or you're proposing? I know that sounds anti-capitalist, but I actually think it's a reasonably good solution.

• 30:10Speaker 04

  I mean, Trump is doing that all over the place. We have, we have positions.

• 30:13Speaker 01

  Not in a very normalized way either. He's putting it in his own pocket.

• 30:17Speaker 00

  Doing it with threats is what you're saying, Dave. Like, literally, he just threatens people and gives them the carrot. They give their shares.

• 30:23Speaker 01

  I mean, look, we want to be the Norway.

• 30:25Speaker 00

  Let me ask you this question, though, Dave. How is it different the way Trump uses his carrot stick method to extract shares for the American people? Because he likes doing it versus the socialist saying, hey, you got to give us 20% of OpenAI and Claude to pay down the debt? How is it different? Just an open, honest question.

• 30:44Speaker 01

  Let me give you two extreme examples of how that can go right and how that can go wrong. So Venezuela and Norway both have extreme oil reserves. One country has done an extremely good job of providing for their citizens and their wealth and preparing for the future, and one nation has not.

• 31:02Speaker 00

  Rule of law?

• 31:03Speaker 01

  I don't know what the implementation details were that went different directions.

• 31:06Speaker 00

  Rule of law. It happens to every business at some point. You're nearing the end of the month, or maybe it's the quarter, and your sales team is at risk of missing their quota. You could waste days pulling together data from across the entire organization, or you could just ask Rippling AI. Rippling's already built on your real-time people and business data, obviously. So Rippling AI can pull metrics from both Rippling and your CRM into a meeting-ready dashboard. See exactly how close you are to hitting that quota. Break down your revenue by region, or sales rep, or more, all in just seconds with Rippling AI. Look, you're running a company, you're busy, you have critical questions that you need immediate answers to, and you can't just file a ticket and wait a week for your team to get around to sending you a report.

• 31:51Speaker 00

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• 32:07Speaker 01

  There's some really interesting, you know, historical reasons why Norway went that way that actually had to do with the shape of the country and how the timber industry developed. Actually, they, they developed hydropower in Norway before oil was discovered. And that was an actual resource, like Norway is a country of like four or five million people that became a timber and shipbuilding powerhouse across Europe. And I think the things that they did early to like develop timber and, and hydropower actually went very well once they discovered oil.

• 32:37Speaker 00

  Fascinating. What do you think she owes about this?

• 32:40Speaker 04

  If the government owns, let's say, 10 or 20% of Anthropic and OpenAI, first of all, like, how do you decide which companies they own a part of?

• 32:50Speaker 04

  And then is there a regulatory challenge? Like, is the government going to then be easier on the regulations? And I think that's probably what Sam Altman, why Sam Altman is proposing it in part. The government would have a financial incentive to protect their valuations and, and go easy on them. So I'm not sure that that makes sense to me.

• 33:13Speaker 00

  All right, let's pivot to another technology that caused a lot of social harm and a lot of hand wringing. Finally coming to what it seems to be closure for parents and Americans. Meta is agreeing to a $17.1 billion settlement with 29 states over claims. It hooked kids on Instagram and Facebook. The remedies are well beyond just writing a check. This is the most intense settlement I have ever seen for a technology company. And I think the previous record was set by our friends at Meta. So you get this huge settlement of $17.1 billion.

• 33:57Speaker 00

  But in addition to this, they are going to put hard limits, similar to what China has done and other countries are considering. Productive pauses interrupt scrolling after 15 minutes of continuous use. Then again, at 60 and 90. This is a self-imposed feature that Instagram will give to kids. They will also have a nighttime block, no access from midnight to 6 a.m. to make sure kids get sleep. And then no push notifications during the school day, 8 a.m. to 3 p.m. They're adding age verification. They're redesigning the features that they believe, or that studies have shown will cause harm to kids,

• 34:41Speaker 00

  like beauty filters. Oh, my God, the fact that they even added those visible like counts. And then add stronger safeguards against bullying. And they'll obviously be, as they typically are with these, independent auditors. It would have been nice, Hussein, if Mark Zuckerberg and, who's our guy running Instagram?

• 35:06Speaker 04

  Messari.

• 35:06Speaker 00

  Adam Messari, as I believe both parents looked at this data five or 10 years ago and said, we'll do this without 29 attorney generals bringing us to court and embarrassing us and shaming us. But here we are. It's getting done. Hussein, what do you think of this unprecedented settlement?

• 35:30Speaker 02

  Long time coming. I mean, I think the harms are pretty clear in the academic literature. And your parents definitely notice this thing if you have, if you have kids. And you're starting to see other governments actually crack down. Australia was, was a big one. The real question is, is all of, are all of these changes really enough? Like, I'm in the view, like, you might actually not want, like, prepubescent teens and maybe teens to be using some of these things. You might really want to gate these things. Like, this might, and this is a reasonable, and this is a big number in terms of a fine. There's a small, small, small portion of Meta's market cap. Like, this is, this is a drug. It's a small portion of like Meta's free cash flow. Like, it's, it's not that big of a fine.

• 36:10Speaker 00

  Probably 10% of free cash flow. I'm guessing they have 200 billion.

• 36:13Speaker 04

  I mean, Meta stock is up.

• 36:15Speaker 00

  And Meta stock's up probably larger than 17 billion, if I'm going to guess. It went up more than 1% on settlement, so it paid for itself.

• 36:22Speaker 02

  And you've tackled the problem.

• 36:23Speaker 04

  Jason, first of all, so my wife works at Instagram as a lawyer, but

• 36:27Speaker 00

  Disclosure, no.

• 36:28Speaker 04

  You're wrong, actually. Instagram instituted this stuff two years ago.

• 36:31Speaker 00

  Okay.

• 36:32Speaker 04

  So they actually have teens have sleep mode from 10 p.m. to 7 a.m. There's an automatic notification if you spend 60 minutes on the app. They did a lot of this stuff. The, the difference in the settlement is it's now across apps. So it's Facebook and Instagram and I believe WhatsApp. But they actually self-instituted this, this policy a couple of years ago.

• 36:52Speaker 00

  Got it. So we can give them a little bit of credit.

• 36:55Speaker 04

  Give them some credit, yeah. I, I think, I think that they have, and like the AI world, I think social media has totally bungled the PR. I actually think there are so many benefits from social media that are never talked about. During COVID, I was depressed. I'm an extrovert. I love talking to people.

• 37:16Speaker 00

  You are.

• 37:17Speaker 04

  Social media cured me, I think, like, from depression. I, I, there's so many outlets for creativity that teens have that they did not have before. So I think, I think there's a huge positive that we never talk about. The studies show some negatives, which I think are real.

• 37:35Speaker 00

  Curious, do you have kids?

• 37:37Speaker 04

  I don't.

• 37:37Speaker 00

  Got it. Okay. Dave, you have kids. I have kids. Our kids grew up on this. What's your take as somebody with kids and watching up close and personal what that generation experienced with these tools?

• 37:51Speaker 01

  I have a really funny story about this because one time I was in Palo Alto having brunch with some friends and my kids were there. I think they were probably like three and five at the time. And one of them was playing with an iPhone, one of them was playing with an iPad. I looked over at the table next to us and Steve Jobs was sitting at the fucking table right next to us. And at the time, I went over and said, hey, you know, these are actually really fun tools. My kids are learning how to like, you know, draw and read and do some other stuff. Thanks. And he sort of said, you know, you know, you're welcome, whatever. Later I found out he didn't allow his own kids to have that. Just at that age. I would say we've had a mixed experience. I think

• 38:30Speaker 00

  Unpacking, yeah, unpacking.

• 38:31Speaker 01

  With one of my kids, I

• 38:33Speaker 00

  Well, yeah, sure, sure.

• 38:34Speaker 01

  Privacy is

• 38:35Speaker 00

  Tell me about average kids, you know, that you, in Silicon Valley. Tell me about average.

• 38:40Speaker 01

  I live in Silicon Valley. I don't know what average means here because it's like completely weird and different. But, you know, I, I think there are some great things about Silicon Valley. We, we live in a very diverse community. Like, my kids went, you know, to school with people from all over the world. They got to experience a lot of other cultures, but, you know. Everybody had technology all over them. Everybody had very high expectations. You know, one of my kids went to a pretty high pressure, you know, private school where, you know, a lot of negative things happened to kids. Some kids actually committed suicide. Many of them had stress.

• 39:11Speaker 00

  Yes.

• 39:11Speaker 01

  Related from pests and things. So like, it's a mixed bag, living in Silicon Valley. I kind of agree with Sheil. I think there are both pluses and minuses, but there are definitely some minuses. And particularly, I think when kids are, let's say, between 12 and 17, there's a lot of social pressures and challenges. I mean, without technology, kids can be assholes to each other. And, you know, sometimes that's amplified, not because of the technology, but because of the people who are on the technology. And so bullying and shaming and like.

• 39:45Speaker 00

  Social pressure, body issues. Yeah, it's all contained in that window.

• 39:49Speaker 01

  That exists in real life. It's not like the technology is what's causing it.

• 39:53Speaker 00

  Well, it amplifies it, I think, to a level that is superhuman. So the same way, you know, you could become famous and go viral and help your business, or, you know, get people to read your novel, whatever it is, all those positive things. Or if you're feeling melancholy, I can't believe you would be depressed, Sheil. I'll just go with melancholy. If Sheil hit a level of melancholy and, you know, talking to people online and, you know, having never-ending threads debating social topics got you to be less melancholy, I'm for it. You know, I just had a hard rule. You know, the kids were allowed to have a certain number of hours with the controls Apple built, but no social media until 17. And my oldest daughter's

• 40:36Speaker 00

  16, and we're just, you know, she'll be 17 shortly, and we're just doing read-only accounts. Read-only accounts, because she's really given me the full-court press. I'm the, she's literally saying, I'm the only one, Dad. I'm the only one without this now. And I look at.

• 40:54Speaker 04

  What are her friends posting?

• 40:55Speaker 00

  Um, most of her friends are great kids, and they're posting pictures of their outfits and their friends goofing off and nature and food and, you know, anything that we would all post. But it does start you down a, how many followers do I have? How many likes do I have? And already, kids are coming back to the phones and back to the iPads, and this creates the same addiction you and I have, Sheil, with Twitter.

• 41:23Speaker 01

  Yeah.

• 41:23Speaker 00

  You and I get pulled into it.

• 41:25Speaker 01

  It's not just kids, it's us. Like, we have these problems too.

• 41:29Speaker 00

  Yeah.

• 41:29Speaker 01

  It doesn't, doesn't stop at 18 or 21.

• 41:32Speaker 00

  Yeah.

• 41:32Speaker 02

  But the kids are.

• 41:33Speaker 01

  I bet you median time in the bathroom has doubled or tripled.

• 41:36Speaker 00

  Hundred percent, hundred percent. Yes. Hussein, go ahead. You, you want to add to this? Do you have kids, Hussein? Do you have a?

• 41:42Speaker 02

  Do, I have a four-year-old, so much younger. But these kids are just so much more sensitive to it, right? And they're in like these growth, these development cycles where the number of likes, and if someone leaves a mean comment, we're more resilient than they are. Like, we've lived through more, and we've had to deal with this stuff. And maybe the argument is kids have to go through this stuff, but I think shielding kids from this stuff is actually a good thing versus a bad thing.

• 42:07Speaker 00

  I would.

• 42:07Speaker 02

  Despite the.

• 42:08Speaker 00

  Yeah, I, I would love to see Apple and Google put this into the hardware level of the products in America. So if you're a parent and you buy an Apple or an Android-based phone, you're kind of bought into the same, you know, both of those ecosystems allow protection of kids at a very root level. And the controls in Apple's products were extremely confusing and complicated. And after hours and hours of managing them, I, after like a year, and I'm a technologist, you know, I've kind of got a grip on what I want to do. As an example,

• 42:50Speaker 00

  I'm into audiobooks. I like to listen to them. I'm an audio listener. I like to hike around the ranch. I got the girls into Audible. They're addicted to Audible. I put Audible, you could listen to Audible 10 hours a day. Now, we were having like the sleeping thing. I let them put a sleep timer on. They can listen to an audiobook. They put a 30-minute sleep timer on. You know, of course, we'll read them stories, but they're kind of getting to the age where that's not cool anymore. 10 years old, like, they're like, I don't want you to read me, you know, a story, which is sad. But they do want to listen to something when they go to bed. And I'm like, hey, if I can get them addicted to audiobooks, that would be fantastic. And so, you know, I'm, I'm, I'm starting to have the controls work

• 43:32Speaker 00

  in my favor. And if you want a child to behave well, if they've got a device, and you can say, after, after these chores are done, go to the, clean the chicken coop, take the dogs for a walk, yada, yada, then you can earn more time on the device. You, you'll be amazed, Sheil, when you have your kids, how quickly chores get done when the iPad does not work because you remotely turned it off. Oh my God, they just have to come to Dad. And I'm like, okay, you were arguing with Mom? You were disrespectful to your mother? And you didn't, oh, she asked you three times to empty the dishwasher? Okay, great. Let me know when the dishwasher's free. I'll, I'll turn on your iPhone again. Problem solved.

• 44:17Speaker 00

  Or let's get into venture capital, unless anybody wants to add anything there, but I think we beat it to death.

• 44:23Speaker 04

  One, one funny thing, I saw Taylor Lorenz posted a thread of all of the past moral panics. And there were studies done around novels that said they were bad for teens. There were studies done around jazz music, saying they were bad for teens, radio, television, of course, bad for teens. And actually.

• 44:45Speaker 00

  Dungeons and Dragons.

• 44:46Speaker 04

  They're all remarkably similar to the, the, the stuff that we talk about social media today.

• 44:53Speaker 01

  D and D is definitely detrimental to your dating life, for sure.

• 44:56Speaker 00

  Yeah, dating life, but it's also good for your creativity. You're definitely not going to get a lot of dates for that. Yeah, she's, she's got a point, except, you know, I, I don't think we've ever seen anything in humanity as addicting as social media. I'm trying to think of, like, cigarettes and social media seem to be the two, and I guess sugar and fatty foods, right? And so if you were to think of those three that just came off the top of my head, the damage they've done, the damage that, you know, processed foods have done to Americans.

• 45:30Speaker 01

  Tobacco, alcohol, and carbs.

• 45:32Speaker 00

  Tobacco, alcohol, carbs, and then you add to it the mental health issues with screen addiction. That's a pretty big, those are the four horses of the apocalypse for humanity. Hey, question for you guys. Is there anything left to fund outside of AI right now for us? Has anybody, looking through your last couple of investments, was the company, because there's two things, a company that uses AI to build a company, you would be foolish not to, that would be a sure sign that your company's going to fail. But then, a company based on AI providing services that are AI-related and/or powered by AI, is there anything outside of AI that anybody is funding?

• 46:16Speaker 01

  I think that's an extreme statement, but it is probably at least half of the VC brain, if not two-thirds.

• 46:22Speaker 00

  Yeah.

• 46:24Speaker 01

  But, you know, let's, let's say there's all these new sexy categories, space tech, defense tech, robotics, AI, are probably like the hot, hot and sexy categories. I still think fintech is like a big category.

• 46:38Speaker 00

  Yeah.

• 46:39Speaker 01

  And it's not, you know, overfunded, particularly if you get outside the US and a lot of emerging markets. I would say fintech and e-commerce are still big categories and are still growing. They're, they're not sexy in the venture world, at least not in the US.

• 46:53Speaker 00

  I was an investor in a fund, and I got a distribution for this new bank, N U Bank. And I'm like, what's a new bank? And it was like, this tiny little amount of stock. And I'm like, well, if this legendary venture firm found this company, and I'll just hold on to the stock and see what happens. And then all of a sudden, it became a very large amount of stock over a period of time. Yeah, for sure. Still much room to grow. What do we think, Hussein, of Stripe buying Open Router? Those are two different things, tokens and web hosting and?

• 47:31Speaker 02

  Oh, it's more than web hosting. It's like the, it's the information layer. You kind of know exactly how the token spends, kind of going through the economy. And I, I mean, I think these are, it's an interesting strategic purchase. We all kind of scratch our heads when YouTube, well, we all scratch our heads when YouTube got bought. We all scratch our heads when WhatsApp got bought, like, maybe a little bit less so for Instagram. I think if you're, if you're leaning into AI and you're the plumbing system for the payments, being leaning into AI, knowing where the spend is actually happening, how these, like, it's actually strategic. The why, I think we're going to figure out, probably five years from now, we're going to kick ours, like, look at it and be like, that's such an obvious big purchase. Like, I think you give a lot of credit to founder-led businesses who can kind of think one or two steps ahead of the rest of the market.

• 48:16Speaker 00

  I like how you're framing as like Stripe's infrastructure, Open Router's infrastructure, infrastructure respects infrastructure. That, that could be the beginning. I never thought of that. That makes sense to me. They, what do you think, Sheil, when you saw that purchase?

• 48:30Speaker 04

  I mean, yes, Stripe routes money, payment methods, banks, et cetera. And Open Router routes inference, basically. And I think broadly, it makes sense. I think the price is wild. And.

• 48:43Speaker 00

  What did it go for? 12 billion?

• 48:45Speaker 04

  Seven.

• 48:46Speaker 00

  Oh, seven.

• 48:47Speaker 04

  Seven, seven to eight, seven to eight, something.

• 48:49Speaker 00

  And it was making 100 or 200 million at the time? I think.

• 48:53Speaker 04

  That's, that was rumored. I don't know. I don't, I don't.

• 48:55Speaker 01

  I think it was more than that. I thought it was a little.

• 48:58Speaker 00

  It was still 50 times revenue, 100 times revenue.

• 49:00Speaker 04

  Something crazy, yeah. Because they had just raised at 1.3 billion earlier in the year.

• 49:05Speaker 00

  Got it.

• 49:06Speaker 01

  70 times revenue.

• 49:07Speaker 00

  70 times? There it is. Okay.

• 49:09Speaker 01

  Well, sorry, that was based on the $10 billion number, so I guess less than that.

• 49:12Speaker 04

  Something in that range.

• 49:13Speaker 00

  Okay, so between 50 and 100 times, it's unbelievable.

• 49:16Speaker 04

  It's clearly a bet that neutrality ends up, like, that you need to, to route, which I think, I see no evidence that that isn't true, but people are building their own, Ramp launched their own, router.com, the same day that the deal was announced. It's crazy.

• 49:34Speaker 01

  Yeah. I mean, hey, it's been a fucking great week for Martin Cusado at Andreessen, man. Between Cusado and Cursor.

• 49:45Speaker 00

  Well, I mean, a $60 billion Cursor deal. I mean, explain how unprecedented that is, Dave, in terms of the last 20 years you've been a venture capital and 12 I've been one.

• 49:56Speaker 01

  Uh, I think Cursor was the biggest M and A, uh, ever $60 billion. Um, Andreessen and Thrive, I think both invested roughly 60 million, 50 million. They both made, Andreessen got 6.6 billion back on 44 million and 150x return in a couple of years.

• 50:18Speaker 00

  And a big cash on cash number. So 150 times multiple might be small compared to some angel deals, but it's on a big number.

• 50:25Speaker 01

  Right.

• 50:26Speaker 04

  Exactly.

• 50:27Speaker 01

  Some of the angel investors even better, like I think Neo, Ali Partovi, I think, put in a million and a half and is getting, I don't know, billions back, something like.

• 50:37Speaker 00

  Yeah. And nobody could ever challenge Y Combinator, could ever compete with them. And the Y Combinator people attacked him savagely. And I wondered why they did that.

• 50:48Speaker 01

  Because he was a legit threat, probably.

• 50:51Speaker 00

  He was good at what he does.

• 50:53Speaker 04

  But notably Cursor didn't go through the accelerator. It was an investment outside the.

• 50:56Speaker 01

  Right.

• 50:57Speaker 04

  But I agree with your point, though.

• 50:58Speaker 00

  I mean, what did you think when you saw that?

• 51:00Speaker 01

  They were also investors in Repli. I think they did go through.

• 51:03Speaker 00

  What did you think, Sheel, about that? Like the Y Combinator trying to put him out of business?

• 51:07Speaker 04

  I thought that was, that whole thing was weird. Why come out with this personal stuff? And you, you make claims that like, oh, he's a bad person. We know the story, but we're not going to tell you. I don't like all that stuff.

• 51:19Speaker 00

  That's the YC playbook. They did it to me, too, at one point.

• 51:21Speaker 01

  I can tell you from experience, it's a very different thing when you are not competing with YC and are competing.

• 51:27Speaker 00

  They did it to you, too, Dave. They went after you. Yeah.

• 51:30Speaker 01

  I was, I was pretty close with a lot of people before I started 500. I even emailed, you know, PG and Jessica before I started 500. Um, and then as soon as I left 500, things got very warm again. It was, it was an interesting experience.

• 51:43Speaker 00

  Yeah, they're circled away. I mean, they don't, it's so lame, though, to be, you know, swinging your elbow like that and trying to, you know, it's like, there's plenty of, if you only, if you accept less than 1% of startups, then you should be happy that the other, let's say, 9% in the top 10% have a place to go. Because I can tell you, Dave, you and I both know the business pretty well. Do we know the difference between top 1% or 2% or 3%? And does YC? Obviously not.

• 52:13Speaker 01

  Not, not until seven years later?

• 52:14Speaker 00

  Correct. So what are we talking about here? Like, you could be kind to each other and supportive. I'm super happy for him.

• 52:21Speaker 01

  I think, you know, entrepreneurs of all kinds are competitive and, you know, you're probably very familiar with, you know, how Elon looks at people. How about before, a year ago, how Elon thought about Dario and this year, now that Dario is a big customer?

• 52:34Speaker 00

  I think he re-underwrote his position on them after talking to him. Chamath re-underwrote his position on Trump. It's a lot of re-underwriting that occurs in our industry. All right, let me just take a pause for the cause right now. I love using AI. Obviously, we all do. And then I found out about this great product called Harmonic. What is Harmonic? It's a database of every transaction, every investment in venture capital, every profile of every company. And I've been getting into robotics, because when I was in Japan, I started seeing these robots fighting each other. And I was like, tell me about these. And it very quickly, as you can see on my screen here,

• 53:17Speaker 00

  told me who, who, which ones are the ones being used at all these different fighting competitions. But then I was like, you know what? I want to, um, have this type of search going on, like an associate or a researcher at my firm might do. And so I've empowered my team to create scouts, just like the Sequoia Scouts program. I was the first Sequoia Scouts. Uh, and they named it Scouts. So I said, hey, find me any robotics companies that are pre-Series A. And if they went to Carnegie Mellon, MIT, Harvard, Stanford, uh, get me that list as well. And now it runs it every Monday for me. That's the power of Harmonic AI. If you are in our business and you don't have Harmonic AI,

• 53:59Speaker 00

  you might miss the next Uber, the next Micro One, the next Cursor. Give it a shot, folks. Harmonic.ai. Lots more to get to here, but let's talk about physical AI, robotics, defense industry. Hussein, have you jumped into it yet? Are you monitoring it? Because it feels like frontier models. Obviously, that investment opportunity, uh, seems to have manifested itself fully. There might be less opportunities in backing a frontier model, but feels like we're in that moment for robotics. And still, for the, for military tech, still seems pretty nascent to me, especially on the implementation side. These things aren't in our homes yet, aren't really in the factories.

• 54:41Speaker 00

  And if they are, they're kind of klugey. So your thoughts on physical AI and just physical, real world stuff being the moat now? That's what we're hearing from a lot of investors. Hey, there's no moat, but hardware used to be hard, so we didn't do it. Now hardware is still hard, so we do it so we have some kind of defense ability.

• 54:59Speaker 02

  It's amazing how this industry has transformed from being anti hardware five years ago to very, very, very pro hardware across the board. You know, I am convinced that the future is like, like it's, everything language related is done. Like, and every derivative of the language stuff, it's the frontier models that we all kind of know, OpenAI, Anthropic, and then, you know, people building on top of the stuff. I think it is still up for grabs. Who's going to win Transformers AI for physical and Transformers AI for biology? And it's no surprise that D2 spaces have kind of gotten hot. And there's a bunch of that stuff in Europe, which is kind of good news for us, because that's where we kind of invest. And we've done one stealth one that came out of Imperial College, uh,

• 55:42Speaker 02

  and a bunch of people are citing their papers. I can't talk about it yet, because they're going to launch in about like two or three months, but it's super exciting. It's like a new frontier model for, for robotics that kind of upends the figures and the generalists, et cetera, of the world, with a different technique that requires a lot less training, uh, that makes it much more efficient. So big believers in this stuff, though.

• 56:03Speaker 00

  Sheel, any, um, investments in the area so far? Are you double clicking on it? What are your thoughts? I mean, you're early stage, so it's a little bit scary to put, I'm assuming your average check size, 250 to a million? Am I correct? Or do I have all different?

• 56:19Speaker 04

  We're, um, we're probably like 2 million average to 2 and a half.

• 56:22Speaker 00

  Okay, so that would burn through like the prototype in nine months.

• 56:27Speaker 04

  Yeah.

• 56:28Speaker 00

  In a hardware company.

• 56:29Speaker 04

  It is hard. In general, the AI companies take so much money. We have not invested in anything in physical AI. I am super excited about what I've seen. I don't know if you saw the demo yesterday from Skilled AI. They announced something. They have a robot that like, you show it flipping a pancake and it'll just flip, it'll flip pancakes perfectly every time. They did a really cool thing where the demo had, or the, they cut off a dog's leg and like a robot, a robot dog's leg.

• 57:03Speaker 01

  Oh.

• 57:04Speaker 04

  Sorry.

• 57:07Speaker 04

  And.

• 57:07Speaker 00

  This is a robot dog.

• 57:09Speaker 04

  Learned to walk.

• 57:10Speaker 00

  No dogs have been harmed in the creation.

• 57:12Speaker 04

  No dogs have been harmed.

• 57:13Speaker 00

  So we're clear.

• 57:14Speaker 04

  They cut off a robot dog's leg and show that it just learns how to walk on fewer legs. Or they cut off part of its leg and it shows learning how to walk. It, the demos are amazing and I can't freaking wait to have a robot in my house doing my chores.

• 57:32Speaker 00

  And this is from Skilled AI.

• 57:36Speaker 04

  Skilled AI, yeah.

• 57:37Speaker 00

  Here is the.

• 57:38Speaker 04

  Carnegie Mellon spin out.

• 57:39Speaker 00

  Yeah, I mean, that's why I put that into my search. Here it is, folks. Uh, let's take a look. Skilled AI, person has, um, some gloves or a harness, I guess, a physical harness. Here's the pancake being made. Here's a, uh, plant being planted and they, you can see here, the human has devices, cameras on each wrist, and it's studying the human doing planting, uh, you know, moving things from pots and flipping pancakes. And lo and behold, uh, this is like the scene from Planet of the Apes. Dave, you remember that famous scene where it was like dew?

• 58:20Speaker 00

  And they were like putting the forks and the knives into the, into the proper trays and, it does look like this is going to be the end of chores and human.

• 58:32Speaker 02

  Your daughter is never, always, is always going to have her iPad.

• 58:36Speaker 00

  I mean, basically, she's going to be like, she's going to be doing to the optimist or the skilled robot what I do to her. She's going to be like, I'm turning off your internet access until that dishwasher is empty. And the robot's going to be like, okay, I'll empty the dishwasher. But this feels like it's getting close. Yeah, it's getting close.

• 58:52Speaker 02

  Yeah, it's compounding at a rate which is like exponential. And like, I, I think this is, I mean, I think if you're, you can take the long view and be like, it's 10 years away, but I think it's a lot sooner.

• 59:01Speaker 00

  I mean, watching this, I think the training data is happening at such a fast rate. So Sheel, your thoughts on the compounding nature of what we're seeing right now? And when that hits reality?

• 59:14Speaker 04

  As these things get better and better, it's, I just can't wait to have a robot in my house. And I would easily pay way more than it costs to make one of these things. Like, is a robot worth $100,000 to me? Easily. Like, if it's cleaning and cooking, it's worth $100,000. And what are these things going to cost to make? Not that much.

• 59:35Speaker 00

  30,000 is, I think, what the first, yeah, what do they say? Build of materials or, um, bomb?

• 59:43Speaker 04

  Build of material.

• 59:44Speaker 00

  Build, build of materials. I always say build. Build of materials, bomb. The bomb, I think, is like probably 15, 20. You put in some extra pricing. I think they got to be 20 to 30. So I think they're the cost of a Toyota Prius.

• 59:56Speaker 04

  So think about what that unlocks for humans. And it's just incredible. Like, at that price point, it's incredible.

• 1:00:03Speaker 00

  Yeah.

• 1:00:03Speaker 04

  It's, it's going to be like everyone, not, you know, unfortunately, not everyone's going to be able to have one immediately, but like, even for the average person at 20, $30,000, it actually pays for itself pretty quickly. We have Rosie, the robot.

• 1:00:18Speaker 00

  Unbelievable. Unbelievable. All right, listen, while we wrap up here, Sheel is a beast on Twitter. And we're going to play a new segment. It's a new segment, Hussein. It's called Sheel's Hottest Takes. Take number one. Let's see.

• 1:00:32Speaker 00

  You disagreed with Chamat's all in that Silicon Valley has lost the idealism that made it great and that people only care about money. Now you suggest, quote, "most likely a function of who Chamat surrounds him with." Am I supposed to take this personal? What do you, what do you think of this take, Dave? And then what you'll end it up, we'll end it with you, Sheil, defending your take.

• 1:00:59Speaker 01

  All right. That is below my line.

• 1:01:02Speaker 00

  It's below your line. Okay. As you're saying, your take on the, I mean, is it too much about money right now and a little less Steve Jobs and, you know, idealistic, we're going to index the web, Larry Page, you know, it did feel.

• 1:01:14Speaker 01

  Silicon Valley is always about the money, but it's also always about the innovation. Jason, you were probably around, well, you may not have been. Were you here in the Valley in the late 90s? You came out.

• 1:01:26Speaker 00

  No, I was in New York still. Yeah. But I mean, I would come out two or three times a year. But, I mean, it did get.

• 1:01:32Speaker 01

  There were a lot of people who thought in the late 90s, it was just people here for the money. And a lot of them were just here for money. And then it blew up in 2001 and a lot of them left town. And then again.

• 1:01:44Speaker 00

  Yes. You can.

• 1:01:45Speaker 01

  That happened probably two or three times. So like, I don't, I don't know that it's wrong. It's just not the whole story.

• 1:01:53Speaker 00

  The true believers versus the get rich quick people is, I think, a trend you are correctly identifying, Dave. And we are, I think, tipping into the get rich quick kind of like, hey, can I get in here?

• 1:02:06Speaker 02

  And I was gonna say, I mean, like in the 90s, there were a bunch of tourists who came in. They were definitely there to make a buck and they left. But like, we did not see seed rounds and series A rounds of secondaries where founders were taking a ton of money off the table pretty much like, like life alter, like not life altering money by today's like trillion dollar company standards, but life altering money and it's like, like, like millions of dollars.

• 1:02:29Speaker 00

  I mean, if you break 10, it's life altering. Yes. Five or 10, it starts.

• 1:02:32Speaker 02

  It's been much more coin operated than, than, than it used to be in the past. Like there, there's a, and I think there's a, there's a bit of a negative halo around some of this stuff because I think that, that voice has become much more amplified, even among the most technical founders and the most innovative of founders. There's like a, it's become a business in a way where it wasn't as much of a business 20 years ago, 30 years ago.

• 1:02:55Speaker 00

  It felt more clubby, that's for sure, 10 or 20 years ago. So Sheil, you defend your take? You still defend your take?

• 1:03:01Speaker 02

  I'll defend my take, yes.

• 1:03:02Speaker 00

  Or were you S posting? Be honest. Were you S posting?

• 1:03:05Speaker 04

  No, no, no, no, absolutely not. I think, I think that, so Chamat said Silicon Valley lost the idealism that made it great and it only cares about money. Are there people that only care about money? Absolutely. Has always been the case and it ebbs and flows. On the whole, the people doing the great work, like my friends at Anthropic and OpenAI could give two shits about the money. Like they're doing it for the mission. I think like this.

• 1:03:30Speaker 00

  Easy to say when you pass a hundred billion valuation.

• 1:03:35Speaker 04

  Sure. Yeah, that's right. But, but also like their lives haven't changed. Like they haven't changed the way they live their lives. And what are they, they could, they could easily just say, hey, I'm done. I'm retiring. But if you look at the, the number of people that continue to do stuff, it's not strictly money motivated. It's because they're excited about the mission. And I think I've actually, I didn't see that idealism five years ago that I do see now.

• 1:04:00Speaker 00

  It is a peculiar group of people. I will say Anthropic, because of the leadership having all self-selected out of the Sam Altman experience, which is the cutthroat experience in their minds and the, like, the money people are going to make the decisions, you know, code monkeys, code monkey, but leave it to Sam to, you know, take the credit. This is not my interpretation. This is what people say. Like Sam's taking the credit. Sam's doing the deal. Sam's the front man. That got a little tired, I think, for that group of people. Anthropic is like, oh, we're a bunch of monks. We're a bunch of pious, like, we're doing this and we're giving all our money to the Anthropic Foundation and we're going to cure cancer and, but you're going to lose your job. They seem like head cases

• 1:04:43Speaker 00

  to me, a bit on the margins, like really delusionally committed to being the last company on earth. It is a little weird. All right.

• 1:04:53Speaker 02

  Oh, cult.

• 1:04:53Speaker 04

  What about Sam not having any equity in OpenAI?

• 1:04:55Speaker 00

  I don't know if it's true.

• 1:04:57Speaker 01

  I mean, I think we're missing the, we're missing the point. He's got a lot of money, probably in nonprofits and philanthropic entities that he controls. And like, who's to say whether that's, you know, money in his personal pocket versus money in his philanthropic pocket? It's fuzzy. People need liquidity and, you know, obviously talking my own book here, but I just wanted to share a few interesting charts.

• 1:05:19Speaker 00

  Oh, sure.

• 1:05:20Speaker 01

  That might be relevant. I've been doing this presentation for another talk. This is like comparing hundred million dollar private rounds versus hundred million dollar IPOs. That crossed over around 2017 when SoftBank Vision Fund came out. Got a little nuts in 21.

• 1:05:37Speaker 00

  In 2016 is when the flip happened. The blue line is hundred million dollar private rounds. The red line is hundred million dollar IPOs. And we see them bifurcate in 2016. Just so people listening understand.

• 1:05:50Speaker 01

  And now it's 10 to one. Last couple of years, the number of private hundred million dollar rounds, 400 per year. Looks like we're going to continue on that track. Number of IPOs of a hundred million dollars, only like 40 or 50, right? And I think that's what we've seen is the IPO market now is requiring half a billion to a billion dollars to go public. It's not that it's closed. You just have to be a lot bigger. That results in companies being private a lot longer. The other graph I will show is this one, which is the tender offer. And this is corporate tenders or internal secondary offers for their employees. That is a booming business, somewhere between 30 to 40 billion dollars

• 1:06:34Speaker 01

  a year now. And, you know, growing probably north of 50%, at least north of 30, 40, 50% per year.

• 1:06:41Speaker 00

  And here we're seeing 2023, there were 6.5, 2024, 12. Major jump from 24 to 25, 12 to 27 billion. So just over 2X. And then 27 billion to 37 billion into the estimated 2026. Tender offers, which for people who don't know, that's some investors coming in and buying common shares from employees.

• 1:07:04Speaker 01

  That it's, it's corporate organized secondaries, primarily for the employees, sometimes also for their investors.

• 1:07:10Speaker 00

  Early investors who have been patiently.

• 1:07:12Speaker 01

  And for a lot of companies, for a lot of companies like Databricks and Stripe and Kim and others, these are happening on almost an annual basis now. Those numbers are probably distorted a little bit. OpenAI did their own seven billion dollar secondary earlier this year, but still, the majority of those deals.

• 1:07:28Speaker 00

  Who was the buy side on that seven billion? Was that Kushner?

• 1:07:31Speaker 01

  Uh, it's secondary firms. It's the primary round VCs who, you know, want more equity when they're oversubscribed rounds. It's retail market and family offices, you know, at least for the popular names. But it's kind of interesting because outside the top 50 companies, there's not as much awareness of those companies. And I think this is what's going to start to happen is these companies are staying private for five years longer than they used to. Employees there want to buy a house, want to put their kids to college. They want liquidity. They're sitting on a ton of, you know, unrealized equity, but they can't buy a house in Silicon Valley. They can't, you know, pay for schools and everything.

• 1:08:12Speaker 00

  Well, and their concentration, Dave, is the real issue, right? Like you're basically 99.99% of Sheil's friends at Anthropic, their wealth is in one stock.

• 1:08:22Speaker 01

  Well, okay, one more, one more graph and I'll quit here.

• 1:08:26Speaker 00

  Well, we love your graphs. Keep them coming.

• 1:08:27Speaker 01

  Here's my segmentation of that market. In that top category, used to be SpaceX, still is Anthropic, OpenAI.

• 1:08:36Speaker 02

  Now it's like a trillion.

• 1:08:37Speaker 01

  Stripe. Well, but as soon as OpenAI, Anthropic go out, then the remaining ones will be like Stripe, Databricks, maybe Revolut, Andurall, a few others, I guess ByteDance, if you consider.

• 1:08:49Speaker 00

  Right around 100. Yeah. Some of them just below, some of them just above. So that will.

• 1:08:53Speaker 01

  Huge amount of dollars there. But like, look at the Rhinos and Stallions and maybe the Donkeys. These are like where the majority of the number of tenders are. They're not like huge numbers. These are like 10 to 50 million dollar tenders. Amount of market cap that's being sold here is probably somewhere between 2 to 5% for most of these companies.

• 1:09:11Speaker 00

  Got it. So they're trimming very little of their cap table for very large numbers.

• 1:09:16Speaker 01

  Right. And, you know, let's just assume these companies are probably growing, you know, north of 20, 30, 40% per year. It's not at all unreasonable to say you would, you know, do 5% every year in sort of secondaries.

• 1:09:27Speaker 00

  Yeah.

• 1:09:27Speaker 01

  Back to employees. This is really the new IPO market. This is like where liquidity is coming from for employees. It's why real estate agents in San Francisco make a ton of money and car dealerships and, you know, private schools. But, but the challenge here is it's still a pretty concentrated story. And, and I think we're just going to see more and more of these corporate tenders happening on a regular basis. If nothing else, just to be competitive, you know, if you, if you have the choice to go work for a company that has an annual tender offer and one that doesn't, which one you're going to choose?

• 1:09:58Speaker 00

  Uh, yeah. And who's the loser here, Hussein? Who, who loses in this new private marker tender offer in your mind?

• 1:10:06Speaker 02

  And retail, retail investors, right? Retail investors have to wait until these things are super expensive. And you're, and in the old days, Dave, like in, like the 90s, like you take these companies out, like really, really early, like at market caps of 100 and employees would have liquidity immediately, like after the lockup.

• 1:10:22Speaker 00

  And retail could buy those shares. More importantly, a civilian could own Microsoft at 100, 200, 300 million.

• 1:10:29Speaker 01

  Well, they can still do that, but the difference is now it's a fuzzy story because when those companies go public, they report their numbers. There's quarterly transparency of what's going on. You have a two, three, four trillion dollar, you know, middle ground market where these companies, you know, exist before they go public, but their financials are not disclosed to anybody. It's not an insider or a primary investor. And so all this secondary trades that are happening on markets, you know, Hive, Forge, Equizen, Augment, all these other brokers, there's no underlying corporate financial data on most of them. Everybody's flying blind and buying that on vibes.

• 1:11:05Speaker 00

  Yeah.

• 1:11:06Speaker 02

  It's vibes. Yep.

• 1:11:07Speaker 04

  Totally vibes.

• 1:11:08Speaker 00

  Uh, and the buy, yeah, the buyers who are buying it are hearing people talk about these names. And when something gets a certain amount of PR, then.

• 1:11:18Speaker 01

  It looks great while SpaceX and Anthropic are going through the roof, but I guarantee you as soon as that market turns around.

• 1:11:24Speaker 00

  It could be like the SaaS apocalypse, right? Like late stage VCs, they suspended disbelief. They bought Airtable, no, no dig to Airtable at 10 billion and it didn't get there. They got their money back.

• 1:11:35Speaker 02

  We could have a lot of those. We could have a lot of those. Like, I mean, I don't know how many unicorns there were back in 21, like, you know, 600 plus. Like, how many of them are real, right?

• 1:11:44Speaker 01

  We were just talking about Headspace just got bought for 200, 300 million dollars, but the last private mark was 3 billion dollars.

• 1:11:51Speaker 00

  Headspace got bought.

• 1:11:52Speaker 01

  Down 90%.

• 1:11:53Speaker 00

  Who bought them? I'm still a large shareholder in Comm. I did take advantage of secondary twice during that opportunity on the way up for my LPs. But who bought Sword Health, Plans to acquire Headspace in a cash transaction? Wow.

• 1:12:06Speaker 01

  And by the way, this same issue exists for a lot of seed funds. I think this is the big challenge for a whole bunch of fund managers is they're sitting on unrealized marks. They may have a fund that's at 3, 4, 5X, you know, TVPI, but DPI is 0 or, you know, barely, you know, 0.5. These funds are getting to 10 years and there hasn't been, you know, 1X return back to investors yet. And I think we need to start figuring out how we're going to get liquidity for these funds.

• 1:12:33Speaker 00

  I really, if I wasn't doing what I'm doing right now and so busy, I would do a roll up vehicle. I would raise 500 million and then just go straight down, like, um, Bending Spoons is doing.

• 1:12:45Speaker 02

  Bending Spoons.

• 1:12:45Speaker 00

  But I would do a private Bending Spoons and then just hire a bunch of AI kids, developers, give them like really crazy bonuses for hitting crazy profitability and just buy every Headspace slash whatever is out there with, maybe Headspace has 50 million in revenue and they get sold for 100 or 200 million. And then you can get rid of 80% of the staff. You can do what Elon did at Twitter, you know, get rid of 80, 90% of the cost and now you've got a wonderful business. I remember meetup.com, my friends got high for me. I started that company, Kevin Ryan, wound up buying it. And then it went to Bending Spoons and I had heard a whisper that it was making 15 million a year. And then it got bought for 20 million. And I was like, well, how's that possible?

• 1:13:29Speaker 00

  It doesn't make any sense to me. And I don't know if that's true or not. That was just a whisper I heard. But I think if it's not growing, VCs just don't want to waste their time. But what an incredible opportunity.

• 1:13:38Speaker 01

  Well, there's some stuff that's growing, just not fast enough for venture returns.

• 1:13:42Speaker 00

  Yeah, that was Airtable, right? Airtable was still growing 20% and people are like, well, this is a waste of my time. It's like, really?

• 1:13:50Speaker 00

  But okay, uh, I guess we'll see.

• 1:13:52Speaker 02

  It all depends on, it all depends on price, right? And at the end of the day.

• 1:13:55Speaker 00

  Well, it's price and, but I think more importantly, see, this is what I thought that too, Hussein. Then I realized it's not price, it's opportunity plus price. You have a certain number of things mentally you can keep in your brain as an investor, probably 10. You know, like I was in board seats and you're like, well, if I have.

• 1:14:14Speaker 01

  I would say three.

• 1:14:15Speaker 00

  Okay, but you know, I'm being generous here. Let's say it's eight. Let's say it's seven. So you got seven and you're like, hey, these three are filling my space with a 20% growth company. And it's hard and every conversation is hard and a bummer. And we can't get out of the mud for four years. And I could give those three seats to, I don't know, this robotic company making pancakes. You know, it's just, you only have so many, um, spots on your dance card. I think that's. Sheil, you're nodding, I think. Yeah.

• 1:14:45Speaker 04

  No, I agree. I, I think there's a, there's a question of like, are these companies ever going to go public? Like, why would Stripe go public ever? Like, they have unlimited capital, they want to grow.

• 1:14:56Speaker 01

  Sell their capital, you know, why not? They don't have to.

• 1:14:59Speaker 04

  They have liquidity. If they want to acquire PayPal, it seems like they can, uh, because somebody else will give them money to do it. So why would they ever go public?

• 1:15:07Speaker 00

  Mike Bloomberg never took Bloomberg public.

• 1:15:09Speaker 04

  Different. He owned it almost entirely.

• 1:15:12Speaker 00

  Sure, 80, 90%.

• 1:15:14Speaker 04

  Like, cause he didn't have to solve for, like Stripe gets this tender thing that Dave's talking about, solves for the liquidity question and the private markets have grown so much that they don't need to go public to grow.

• 1:15:25Speaker 00

  Bloomberg was a technology company. You know what he did in New York? He was famous for just paying 50% more than everybody else. If you worked at the New York Times, you made 100, you were making 200 working for him. You know, if you worked at the Washington Post and you went to Bloomberg, you, you got a 50K, 75K raise. And you didn't get any equity, but right now.

• 1:15:43Speaker 02

  I was just saying.

• 1:15:45Speaker 01

  I think there's an arbitrage opportunity here where these companies have been priced on sort of venture scale projections. And now some of them are profitable, but not growing that fast. And they're going to be priced on free cash flow projections, you know, not just multiples of revenue or growth. And that's going to be a different number, very different.

• 1:16:04Speaker 00

  I mean, if you have a currency like Elon did, I think Cursor might wind up being, you know, this generation's YouTube acquisition. You've got a.

• 1:16:12Speaker 01

  That's a great buy. That was.

• 1:16:14Speaker 00

  2 trillion dollars and they brought in 3 billion and what was their runway? 3 billion, 4 billion at the time?

• 1:16:19Speaker 01

  It's, it's at 4 billion now and it's on its way to 10 by the end of the year. But like, that, that's not even like the total value. It's like, you know, to be, to be kind, I would say XAI was a shell of a company that was mostly valuable because of.

• 1:16:33Speaker 00

  Elon pre infrastructure and CapEx.

• 1:16:35Speaker 01

  That Elon bought. It wasn't because of the tech or, or even the people who largely walked out the door after that acquisition. But, you know, turns out that all that infrastructure was very useful to rent out to, you know, Anthropic and Google. And then Cursor was really the value that came in. And I think that combination, like, you gotta give Elon credit, the massive pivot that he's done in the last six, nine months with that company.

• 1:17:01Speaker 00

  Incredible.

• 1:17:02Speaker 01

  He's going to have a line of business that is the majority of their revenue that did not exist.

• 1:17:06Speaker 00

  Elon Web Services. Yes.

• 1:17:08Speaker 01

  That is just mind.

• 1:17:09Speaker 00

  All right, let's end on agents. Uh, I have been obsessed with GrokBot. Just does what you tell it to do. Sheil, you have been obsessed with another agent, which has a landing page that looks like it was built in seven minutes by a Python developer. And I signed up for it and people are losing their minds over it and the terms of service. Tell us about this, um, new OpenClaw abstracted into just iMessage that people are losing their minds over. Tell us everything.

• 1:17:43Speaker 04

  Yeah. So I, I've been using GrokBot too. Um, I, this, this company is called Instinct. It was funded at seed by conviction and A, I believe by Kleiner Perkins, not announced, but that's what I've heard. Also, I've also heard crazy valuation numbers like seed at 100, uh, A at 500. And I heard they have offers, uh, at the billion plus range. What it does is it's basically like your assistant. You can, that's the website.

• 1:18:15Speaker 00

  Yeah, this is worth a billion dollars, folks. Here's your. I mean, could we even just put it in a no background? No? Okay. Sounds good.

• 1:18:24Speaker 04

  You can text it and it just does stuff for you. What's cool and I think valuable about it is it actually like goes the next step beyond what you would think to do, you would think a bot would do. So, um, if you ask, uh, ChatGPT work to book a flight for you, it will take you to the landing page, Google flights. Here's the flight to take. Instinct will actually go through and book it for you and they're able to do that because they have a vault where they store your credit card information.

• 1:18:58Speaker 04

  And they're probably violating all sorts of terms of service, um, but hey, the thing works.

• 1:19:05Speaker 00

  I signed up for it. I saw the terms of service debate. I paused. I was like, I'm not sending anything until I find out what's going on here. GrokBot has been amazing for me. A bunch of the things I wanted to do with OpenClaw, but, and Hermes, I call it Hermes because I think it's funny. Um, it's a harness and they make bags. But anyway,

• 1:19:27Speaker 00

  a lot of those agents in Claw Code, just they had too many restrictions on what they would do and not do. I took a clip of a YouTube file and I said, analyze this into the five most important clips and, um, make me five clips. And it took this Mearsheimer, John Mearsheimer video about tactical nukes, whatever. He's been on the All in Pod. It made me five clips. I was like, whoa. And it's like, would you like one of these vertical with captions? And I said, sure. And then I shared it on my Twitter and I was like, well, that's a $50 an hour video editor, you know, freelancer that I would have done that back and forth with. Instead of taking three hours, it took three minutes and was essentially close to free.

• 1:20:09Speaker 00

  And then I asked it to do some things on LinkedIn and it just did it because it has a computer window that abstracts into Cursor and it kind of works all the time. I think that product, if it goes multiplayer mode, will go.

• 1:20:25Speaker 00

  Parabolic. And by multiplayer mode, I mean, can I just add three team members to it as comment only? Can I add five team members to it as read only? You know, like the Google Doc Suite? If they add multiplayer mode to that, I'm gonna, I would have taken the docket creator for today and shared it with you guys. And we would have all been there talking with the docket. Really interesting product. Have you used, anybody used Grok Bot yet? And any impressions?

• 1:20:53Speaker 04

  I'm using it too.

• 1:20:53Speaker 02

  I use them all. Like, I mean,

• 1:20:55Speaker 00

  Which one sticks? Which one is sticking most? Which one do you go to first?

• 1:21:00Speaker 02

  Oh, OpenClaw is the least durable. Like, like I switched over to Hermes. And then, then Grok Bot became the next one. Then Instinct, I just got, I was, it has a signup list and I'm not cool enough like you guys to get access.

• 1:21:13Speaker 00

  Dude, I put my name in, it was instantly, it was like, okay, you're on the list. But you're in. I was like, okay. Okay, so I know where the bread is buttered.

• 1:21:23Speaker 02

  So I'm now working on that one. But it's also amazing. Like, a year ago, none of these things existed. Like, like OpenClaw was like a year ago. It was like, yeah, yeah. It's like, the pace is like, super fast again. These things are compounding.

• 1:21:35Speaker 00

  I gotta say, with Sam Altman, I mean, I don't want to beat up on Sam here, but what he did to OpenClaw was so sinister and cynical in my mind. He like buys the guy, brings him internal, and then, you know, Dave Morin, like, is trying to keep this foundation going. And literally, the second, the, um, his name is Peter, I believe. I've never met him. The second Peter to OpenAI, OpenClaw just lost its voice, lost its momentum. Everybody was like, well, this is over. Whether it's true or not, I've never seen a project go from everybody embracing it, talking about it, to

• 1:22:18Speaker 00

  completely toxic and people being like, yeah, you know, I gotta, I gotta go find something else. I gotta find something else. And I don't know if that's because they thought it was part of OpenAI and they didn't want to, you know, they were open source people, or better options came out. I don't know. What do you think, Sheil?

• 1:22:33Speaker 04

  Yeah, I'm not sure what happened there. I, I think to your point about Grok Bot being like, uh, we talked about this, having 100 million users. I think that relies on the other guys not catching up. And they actually already have. Like, ChatGPT Work already yesterday announced new stuff that's doing a closer version of this.

• 1:22:51Speaker 01

  Show you guys one more graph?

• 1:22:52Speaker 00

  And by the way, Sheil, is OpenAI Work basically what Peter's probably working on there? And it's basically OpenClaw inside of OpenAI?

• 1:23:01Speaker 04

  Totally. Yeah.

• 1:23:02Speaker 00

  I mean, what did he get? You think he got 300 million, Sheil?

• 1:23:07Speaker 01

  Yeah, I think it was

• 1:23:07Speaker 04

  I, what is he worth? You heard that? I don't.

• 1:23:10Speaker 01

  That was somewhere between 200 to 300.

• 1:23:12Speaker 04

  That sounds right.

• 1:23:13Speaker 00

  Oh, man. But maybe at 300 million valuation or 400 million, that might be triple, it might be a billion dollars right now. What do you think, Hussein?

• 1:23:20Speaker 04

  Just one guy.

• 1:23:21Speaker 00

  Just one guy.

• 1:23:21Speaker 02

  That was never disclosed. I mean, the rumors were like a crazy number.

• 1:23:24Speaker 01

  Sorry, you know what? That wasn't, uh, that was the other company that was acquired. Um, the,

• 1:23:29Speaker 00

  Podcasting Bros was two, two.

• 1:23:32Speaker 01

  No. Remember the,

• 1:23:33Speaker 00

  Oh, there was a social media experiment that they bought? Oh, yeah. What was that? No, no, but I think Peter got, the whisper number on Peter was 200 or 300 million in equity.

• 1:23:42Speaker 01

  Yeah.

• 1:23:42Speaker 00

  And that was when it was a 300 or 400 million dollar company. If it goes out at 2 trillion, that could be 5X, 6X.

• 1:23:48Speaker 01

  Anyway, just want to point this out.

• 1:23:49Speaker 04

  Remember how crazy it was?

• 1:23:50Speaker 00

  Go ahead, Sheil.

• 1:23:50Speaker 04

  The OpenClaw hype. The OpenClaw hype was so crazy that there was a, there was this MultBook,

• 1:23:56Speaker 01

  MultBook, that was the one that I was talking about. MultBook got acquired, I think that got acquired for like 200 million by Meta.

• 1:24:02Speaker 00

  By Meta, yeah.

• 1:24:03Speaker 01

  Right.

• 1:24:03Speaker 04

  Yeah.

• 1:24:04Speaker 02

  And there was like the OpenClaw religion, like if someone planted that seed, like, it was like, there was a euphoria around this thing. And then it just like died, like,

• 1:24:12Speaker 04

  It was about one month, the whole thing, start to finish.

• 1:24:15Speaker 01

  Well, I think the hype was maybe overplayed, but the story was sort of for real. I think that was like, original agentic sort of adoption. But

• 1:24:23Speaker 04

  Wow, look at this chart.

• 1:24:24Speaker 01

  This graph, this is kind of like crazy because

• 1:24:27Speaker 00

  Explain the chart. You gotta explain the chart, Dave, because people listen.

• 1:24:30Speaker 01

  Okay, so there's a little story here in that CFO, Sarah Fryer at OpenAI, four months ago, she was like, Sam's like, we're gonna IPO. And she's like, we're not ready to IPO. And then just recently, this was leaked from their internal conversation. She's like, we're definitely gonna IPO in 2027, and maybe sooner if our growth keeps inflecting. And I was like, what's she talking about inflecting? And I was like, this graph is what she was talking about. Look at those numbers, sort of like, go through the goddamn roof.

• 1:24:57Speaker 00

  Yeah. And what we're seeing here is, uh, OpenAI active agent users, uh, in, back in January, 200,000, breaks a million.

• 1:25:06Speaker 01

  Just, just a month ago. Like, that growth went through.

• 1:25:09Speaker 00

  But it hits, it hits 5 million in May, and then 6 million in July, 10 million later in July, 15 million in the beginning of August, 20 million towards the end of August. So you're talking about 4Xing in two months.

• 1:25:23Speaker 01

  Right.

• 1:25:24Speaker 00

  Unbelievable.

• 1:25:24Speaker 01

  And I don't have the grass in front of me, but I know that, uh, it was reported that OpenAI revenue was going faster than Anthropic this month.

• 1:25:32Speaker 00

  This is after they had quarter over quarter slowdown. Hmm, interesting. All right, listen, another amazing episode. This week in venture capital, a special edition of this week in startups and offshoot, whatever. Uh, hey, guys. Best investment? What's your, what's, what's, uh, what's your biggest portfolio win these days? Sheil, tell us. When'd you get in? What is it? Which one is just gonna sprinkle all that beautiful DPI on your LPs? Tell us everything. Tell us, tell us where hope, where is your hope tied to? It's a hard job being

• 1:26:07Speaker 01

  I would say, a real DPI or hope? Those are two different things.

• 1:26:10Speaker 04

  Selling hope, baby.

• 1:26:12Speaker 00

  Hopium. Tell us about your Hopium.

• 1:26:14Speaker 04

  I would say recently, one is called Basis. It's a, um, AI for accounting, really automates the work of a junior accountant. If you think about Harvey Legora for law, um, and you've seen the growth in those companies, this is that for accounting. Um, we led a seed, Keith at Cosla led the A, and Excel led a B recently. And the growth that I've seen is amazing. And companies, these, these accounting firms are really using the product. And it's, it's, it's been amazing.

• 1:26:48Speaker 00

  Fantastic. And you got in at seed. We, I think we are investors in the, uh, the Uber to your Lyft or your DoorDash, uh, whatever the analogy is, a tax GPT, um, that we incubate. So, yeah, I agree. This is gonna be a fantastic space for both companies. What do you got, Dave? What's, um, what's making you?

• 1:27:06Speaker 01

  Uh, we talking about what we're gonna get DPI and what we hope to get DPI?

• 1:27:09Speaker 00

  Yes, yes. Which one do you, when you talk about it, put an eggplant emoji at the end of the sentence? Which one?

• 1:27:16Speaker 01

  Uh, well, I guess because I worked at Founders Fund 16 years ago, I have carry in Founders Fund too. And we, when we started our, our second secondary fund, I, I rolled in about a million dollars of GP commit in that fund. Thinking, oh, this will perform pretty well.

• 1:27:31Speaker 00

  Oh, yum, yum.

• 1:27:31Speaker 01

  Turns out that was all SpaceX.

• 1:27:33Speaker 00

  Well done.

• 1:27:34Speaker 01

  It was our best investment. So that, that went really well. But, but the things I'm actually excited about probably are not generally on people's radar. We, we spend about 10% of our capital in Latin America. And one of our best performing investments, I may have mentioned this on the show before, was a company called Motu. And they are a motorcycle manufacturing and small business lending company for delivery drivers in Sao Paulo, Brazil. And that business is on fire. Uh, it's doing over 300 million in revenue, profitable, growing 60, 70% per year. Uh, and it's very, very reasonably priced. A lot of platinum is actually on sale.

• 1:28:12Speaker 00

  Like to meet him. Yeah.

• 1:28:13Speaker 01

  And as Sheil knows, you know, we used to do a lot of investments all over the world in 500 startups. Now that I'm doing secondaries, most of it's in the US, um, but at least some of it we're doing emerging markets. Um, a different deal that's not a typical secondary for us is in a company called Equity Bee. Uh, and we recently put money into that because they are a platform sort of similar to secondary marketplaces like Forge Equities then, but they do employee stock option forward contracts. Uh, and so again, getting back to those employees who are sort of locked up and, and want or need liquidity before the shares are actually available to them. Uh, they can finance and exercise and hold those shares and get some liquidity. And really helpful

• 1:28:55Speaker 01

  for people who are leaving companies who might otherwise lose those options. Equitybee.com, B E E.

• 1:29:01Speaker 00

  Amazing. Well done. Hussein, who do you got? Who's making you feel optimistic these days?

• 1:29:06Speaker 02

  This, this year, this month, we did one in the AI space for material science called Cusp AI. We were the inception check. We wrote him a $10 million check. Uh, great. Well, what at the time felt like a crazy number. Uh, it's not a crazy number in hindsight. It's worth 2.6 billion. Kleiner just marked it up. Two years in, like, almost a fund returner for our fund three, like, in, in two years. Feels pretty good.

• 1:29:28Speaker 00

  Congratulations.

• 1:29:29Speaker 02

  Not our most, like, our sister company to that in many ways is like the same type of thing, but a drug discovery company. So AI, um, AI for biology called Peptone.com, which, like, the AI, this stuff really works. And like, we have a, we have a drug against prostate cancer that might actually stop prostate cancer, almost entirely generated by a computer. And like, we're going into clinical trials. So like, that, that to me is like the one that's where I can generate the ton of DPI for us. But both, both are great.

• 1:29:56Speaker 00

  Absolutely fantastic. Congratulations. I'll just give you two quick ones myself. Uh, we love all of our startups equally, but you know, sometimes we see, um, things get marked up, and this is this week in VC. So, um, just on the markup trail, on prem, uh, and Sovereign AI became like a big deal, but we had incubated this company, Apicus, 18 months ago. And so for banking and healthcare, et cetera, they take this Go1 server, put it into your facility, and they help you build your own, uh, large language models, harnesses, et cetera, and keep you from having to give, uh, all that data to a frontier or risk leaking it. And they have a waitlist for

• 1:30:38Speaker 00

  their product. And that is always a great sign. Second one, Micro One. I met this crazy founder, just high energy, you know, reminded me a bit of Travis. And he was using AI to figure out who the top developer was, top developers were. It's a pretty interesting product. I think we invested when it was 10 or 15 million dollars. And then he pivoted into AI training. This week, he announced he had $500 million in training revenue, everything from legal, et cetera. Um, and that they also hit a $4 billion valuation. So that is a, uh, fund returner times four, three or four, I guess.

• 1:31:18Speaker 00

  Um, but of course, long way to go. Still more work to be done. Dave, Sheil, Hussein, great job on the show, and we'll see you all next time. Bye bye.