Trial Update, AI SPVs, Interaction Models, eBay Rejects, BuzzFeed Sold

I see a large IPO on the horizon. You're surrounded by journalis. Your position, right? This misinformation clearing order inbound. >> Let's just roll. We are surrounded by journal. Hold your position. Come on. Get up. Trust the experts here. We are experts found. I see multiple journalists on the horizon. Standby. >> UAV online. >> Blaze. >> Double blaze. Triple blaze. Double kill. Fight is >> team deathmatch. match. We are experts. Triple blades. That's just wrong. Right. Clearing order inbound. We are surrounded by journalists. Hold your position. >> Strike one. >> Strike two. Activate golden retrainer mode. >> Market clearing order inbound. >> Five put. founder. >> You're watching TVPS. >> Tuesday, May 12th, 2026. We are live from the TV final, the temple of technology, the fortress of finance, the capital cap. I'm boycotting. >> John's boycotting the soundboard. >> The soundboard. Uh we have a great show for you today, folks. We have a bunch of guests. Uh and a bunch of new stories to go through. Uh of course, the trial is ongoing. Did you say that this might be the last week of the trial? I thought it was a four-week trial, but it sounds like it might wrap up. >> Are they ahead of schedule? >> Three time, do you know? >> Yeah, Mike Isaac said it might end this week. I assume just because they're getting through the like, you know, depositions, whatever faster. >> Yeah. I mean, it seems like Ilia has gone. Mirror is gone. Deposition and Siobhan Zillis and then Sam's on the stand right now. I think Mike Isaac is live tweeting it. So, we'll run through that. Uh we will also run through the run of show and what Brandon Guell uh wrote in the newsletter this week uh this morning. Uh Sam Alman took the stand in the OpenAI versus Elon Musk trial this morning. Just as a reminder, here's what's at stake. Per the Wall Street Journal. Uh Musk is suing Open AAI and its leaders Altman and Greg Brockman for allegedly manipulating him into giving tens of millions of dollars to a nonprofit organization only for them to turn the AI lab into a for-profit venture. Musk is also suing Microsoft OpenAI's largest investor for aiding Brockman and Altman in their alleged deception. So big point big turning point in the trial was last Wednesday when former OpenAI CTO Mera Morate and former board member Helen Toner gave testimonies about the events leading up to the November 2023 failed board coup that were critical of Sam Alman's leadership style and canandor call it the blip where Sam was out and then back very quickly with a couple other people stepping into CEO for just a few days. Uh but last week OpenAI's side also began to land some punches on Musk. Earlier testimony from Siobhan Zillis and uh Greg Brockman also had already suggested Musk was not just defending a pure nonprofit vision. He had explored scenarios where OpenAI might become a part of Tesla where Altman might help lead Tesla AI and where Musk could retain deep control. Brockman also testified that Musk supported a for-profit conversion if Musk could control it, according to including a version tied to raising money for his Mars ambitions. Yesterday, Microsoft CEO Satya Nadella and OpenAI co-founder Ilia Sutskver took the stand. SATA largely buffed OpenAI's side, defending Microsoft's partnership with the company and saying that Musk never contacted him to complain about the deal, violating any agreement Musk had with the with with OpenAI's nonprofit, despite Musk having Satcha's number. Ilia testified that he spent a year compiling a 50-page document documenting Sam's manipulative behavior, but also said he never promised Musk that OpenAI would remain permanently nonprofit. Also, it came out in the trial that Suskiver's stake in OpenAI is probably worth around seven billion, which probably complicated how the judge and jury feel about his own motivations. So, the story is since Marotti uh is first the trial became a referendum on Altman's trustworthiness. Then, it became a referendum on whether the 2023 the 2023 board was brave or incompetent. Then, Microsoft came in and tried to make it look like it was the stabilizing partner. Now Alman has to personally answer the core questions hanging over uh the whole case whether OpenAI's evolution was a necessary adaptation to build Frontier AI or a betrayal of the nonprofit mission. Musk says he funded. The trial is expected to conclude this week and you can of course follow. >> Max uh pulled out a quote from Ilia explaining why OpenAI has a for-profit uh and he's uh he I guess yeah was was playing I don't think intentionally playing into the meme potential but certainly that's how it played out. Uh Ilia said under oath in a federal court if there's no funding there's no big computer. Max F says in the running for quote of the year. >> If there's no funding, there's no big computer and you need big computer if you want big AI. >> Very says bro walks around like he knows someone is going to make a movie about. Probably thinks of quotes that are going to sound good in movies to help Christopher Nolan in the future. In fact, I bet Christopher Nolan is messaging him quotes to say as an early investment. >> Oh yes, the Iliad. That's what they're calling it. Uh well, Sam Alman takes a stand in Musk versus OpenAI. Mike Isaac has a live blog going on X under Rat King with lots of with lots and lots of uh side notes about uh his diet for the day. He seems to have continually be depending on a single banana for sustenance, which I'm surprised by. Um but let's run through some of what Mike Isaac is finding uh and saying. Where where does this start? In the coffee line now. It's so confusing because he has a butt pillow in the car. Okay, I'm gonna go back to the other one. >> Ready for got it? >> No, I think he got it, but he's very upset. There are me. You will get There's many twists and turns in the Mike Isaac saga. >> I mean, it's really the meta story. >> Yes. You know, happening around the trial. >> Potentially bigger. >> Potentially bigger. >> I wonder Yeah. Is there is there a world where uh Mike Isaac sues the the court for having un uh uncomfortable chairs? sue sue the federal government since it's a federal courthouse. Uh so open AAI begins questioning Altman much in the same way that the plaintiff side had questioned Elon Musk establishing alt that Altman like Musk has been enamored with AI for years and wanted to build inventive things with it. This was a very interesting uh tidbit from that that original like uh that viral quote from Sam where he's like AI will probably destroy the world. uh like that was an that was that happened in 2015 and it was an answer to a question of like what do you think the key problems to solve are and then the next sentence in that quote that always gets clipped out is like and I'm starting a company well it's more of a nonprofit to to work on this problem exactly but that doesn't make it in but um so they were clearly both uh very interested in building beneficial AI although they ultimately buted heads and they were also very worried about Google rat king Mike Isaac says theme of the trial is basically everyone hates Google. >> Do we know the origin of the rat king nick uh sort of moniker? >> You don't know what a rat king is? A rat king is where so many rats come together that they ball together into one single organism and become a rat king. I believe it's a reference to 30 rock. It's a >> asking chat. >> It's a bit. Anyway, uh Altman email from 2015. Been thinking a lot whether it's possible to stop humanity from developing AI. I think the answer is almost definitely not if it's going to happen anyway. It seems like it would be good for someone other than Google to do it first. Uh and so this was what Elon and Sam were talking about back in 2015. Uh author status update hungry uncomfortable hit points taking tiredness poison damage. Dota mentioned again and Sam had to explain the difference between Dota Dota 2 and the 5v5 player game. Just keep going back to Dota. Uh Altman said Musk once said he would potentially pass control of OpenAI to his children upon his death. I would love to know more about what that means because if you fracture it into like 20 different children at a certain point like that can create a whole different dynamic of like uh succession, right? Uh as opposed to first born or >> maybe he wants to set up a real reality TV show >> where they compete >> maybe take over the company. So, uh I I think this is new, but there's an old email that says Altman might have joined the board of Tesla as part of uh old AI discussions. Also came with a nent threat of Musk doing this AI work inside of Tesla. Very it would be a shame if you didn't accept my offer sort of moves. The Tesla's off the Tesla offer is interesting, says Mike Isaac. Uh Musk's offer Musk offers a board seat. Altman says it was something he felt was to assuage concerns that Alman would have no direction over the development of AI if it were folded into Tesla. But Altman also said it appeared to be a nent threat if Altman had not accepted the idea according to him. Musk hinted that it may have done uh that he may have done work developing AI on his own at Tesla regardless. And Mike Isaac gives some more context here. says, uh, this sort of talk is fairly common place these days on the battlefield that is Silicon Valley. Mark Zuckerberg, Meta CEO, has in the past made overures to companies he's interested in acquiring, though he is often more explicit about his intentions. If you don't take the deal, we'll come for you. Tony Soprano vibes. Uh, his back hurts. Continuing, uh, Altman is criticizing stack ranking of engineers across AI labs. something Musk loves to do across his companies apparently and something very common across big codes like Meta and Amazon and also Microsoft is known for the uh for the stack ranking. They almost like invented it or certainly popularized it uh throughout the 90s and 2000s I believe. Um but Alman says AI engineering labs need more psychological safety. You have to be willing to let a researcher go off and try something random in the corner very bottoms up. This is where the deep research project came from and a bunch of other uh AI breakthroughs came from. Uh LMO Ultman says there was a meeting at Tesla during the evening about folding open AI into Tesla for AI research and then a long long period of time with Elon showing us memes on his phone. And apparently the court reporter asked Sam Alman to repeat memes on his phone loudly. I don't know why they didn't hear it the first time, but uh uh Rat King Mike Isaac is live. This I am going to have Sam Alman say stating memes on his phone into a booming courtroom mic playing inside of my head on repeat for the week. Memes on his phone in all caps. Uh getting hungry. He only had a banana this morning. Mike Isaac is suffering. His stamina points are draining. Uh, then he says, "Lol, email between Altman and Siobhan talking about how to handle Musk and Altman telling him about a Microsoft investment. So, Microsoft's going to invest. How how should we tell Elon?" Uh, Alman narrates the email verbatim. Hopefully, it's easy. Cross fingers emoji because you have to read it out. So, really funny to hear crossfingers emoji in the court record. Um, Alman is going through his real first postmortem of his firing. appears to have gone through all five stages of grief multiple times over the course of five days. What are the five stages of grief? Stages of grief. >> Cope, see, >> cope, see, mold, uh, denial, anger, bargaining, depression, and acceptance. Yeah, that is that is actually cope, see, uh, mold referred to internally at opening eyes as the blip since it was a brief intermission for what it's worth. Uh he said Alman said I had poured the last years of my life into this. I was watching it about to be destroyed. There was something appealing about going to work at Microsoft. I was also very angry, hurt, and upset. It felt like an incredible betrayal. It was definitely one of the hardest times of my life. Alman finally broaches the issue of his widely rumored untrustworthiness. Clearly, there were misunderstandings and a breakdown of trust. he said, but with but uh but with what comes of a bit of a practiced humility in his voice, quote, I was not trying to deceive the board. I feel badly for the misunderstandings, but that was never my intent. This goes to the heart of how Musk council has tried to portray Altman across the entirety of the trial, a fundamentally slippery operator who says one thing to one party and something else uh entirely to others. OpenAI's rebuttal to that line of thinking has been to depict a board of directors at OpenAI rife with dysfunction and as s Microsoft Sata Nadella put it earlier in this week directors who are operating from amateur city. Interesting. Uh taking shots of the board. Uh okay. Sam is giving the full uh jury Sam treatment again trying to bat back against Musk's picture of Altman as a serious liar. If I knew how difficult and painful this was going to be, I never would have tried but I'm very glad I did. Opening eye is done. Cross-examination begins. Steven Molo lad Musk council who has the flare for dramatic will probably give us fireworks. And this is continuing says, "Oh my god, Molo, are you completely un are you completely trustworthy?" Altman says, "I believe so." Molo says, "Do you always tell the truth?" Wow, this is getting heavy. It's all about Musk counsel painting Sam as a liar. Brutal. Uh, Altman is on the defensive, but taking more of a muted tone with some attempted humility in his voice is very clear contrast with how Musk appeared combative on the stand. Interesting. Uh, cross-examination is basically Musk's lawyer, Moolo, reading off a list of questions, saying, "Hey, bro, do you remember? Do you remember all this messed up stuff you did?" And Alman saying, "No, I don't know. Not true." No. Uh, absolute chaos. Well, you can follow along at Mike Isaac. Um he has a whole thread and his live posting and I believe that there's a New York Times lo live blog as well that you can follow along with uh although the live blog does not have nearly enough uh snack updates. But anyway, um >> continuing to cover this. Yes, let's move over to SPVS. The special purpose vehicles >> post are from >> rocking the valley right now. People are raking in the dough with SPVS. Not everyone's happy. >> So yeah, we can actually p go down a little bit and pull up this post which has since been deleted. >> Oh, really? >> Uh the post said uh a few days ago, simply brokering an anthropic secondary deal made me more money than my entire net worth from working in my 20s. This is insane. It is especially insane because this is not legal. Uh it is insane to post. Um >> is it not legal? >> Yeah. So, uh, you need a broker dealer license to broker securities. >> Yeah, that's right. That's right. Well, I mean, she didn't say that she doesn't have one. She might. >> Uh, very, very unlikely. It's it's very burdensome. It just the compliance to get to actually get your own broker dealer. Even there's people that I know that just do secondary transactions. They don't even have their broker dealer license. They work under a firm that does. They basically like contract with a firm. So they're kind of like an almost like a real estate agent working under a bro like >> I'm I'm smelling an intern challenge. Tyler, >> get your broker dealer license. >> Figure out a way to use AI to bring down the compliance burden >> slash goal. Throw that SL goal down. Get me a broker dealer X high >> X high 5.5 CEX. Yeah. Uh and try and try and get your broker up. Let's see what it does. >> Yeah. Turns out that if you want to broker securities, >> yeah, >> transactions, yeah, it is uh there's a big >> uh regulatory burden for good reason, right? We're talking about, you know, uh transactions that are at the scale of high-end residential real estate in this case. >> Uh you know, if if this individual was maybe getting like a 5% fee on the deal, >> paid in cash, >> who knows? It could it could have been. Yeah. >> There wait there is another take here which is that um there's there's a there's there's the term brokering which requires the broker dealer license but there is also the format where you set up an SPV. The SPV takes in money from an investor and then buys secondary from someone who has the right to sell it. Maybe an investor who is not subject to the the the the form that we saw Anthropic put out. Right. And in that case, >> we'll get to that. >> We'll get to that. But hypothetically, there are SPVS that they are not technically brokering the secondary deal, but they are facilitating it and they do take a fee, right? Because SPVS often have fees associated with them. And that does not require a broker dealer license, right? So, >> but the the straightforward interpretation of the post was that they had some sort of side letter which was like >> if I can find you. Yeah. If I can find you a buyer, if I can find you a buyer for 100 million of your shares, you give me $5 million, right? That that happens a lot, but it it uh usually and hopefully is happening through uh through >> legal channels dealer. So, uh this seemingly prompted uh both what started it, right? This must be what that post really >> more specific language on their site saying uh anthropic said unauthorized anthropic stock sales and investment scams. Yeah. >> And said um you know basically saying any transfer or sale of anthropic stock or any interest in anthropic stock that has not been approved by our board of directors is void >> and will not be recognized on our books and records. Mhm. >> Um and so yeah, typically um yeah t typically like these are there there's so many ways to like transact without informing the company, right? A common one would be you know futures contract um >> basically selling the right to >> uh uh the right to the investment and the and the future performance. >> Yeah. So I think the futures the the the the economic exposure enthusiasts or the the futures contracts teams uh would say that uh well we didn't we there was no sale of the stock. We didn't transfer the stock and uh it's not a direct interest in the stock and so it doesn't need to be approved by the board of directors and the board of directors would say absolutely not. That doesn't count. you think you found a workaround and it doesn't count in this world, but that is going to be, you know, >> the funny thing is there's there's these sort of digital asset equivalents like people put out basically meme stocks around that that uh are trying to track overall interest or the overall valuation of these companies. uh they sold off which is funny because I don't believe they're actually tied to any real underlying equity >> and and even purely sentiment >> and even and even in the case that they were like saying that they were tied it was typically like one one to 5% of the fund in anthropic or open AI or SpaceX and uh and they were like already well disconnected from the fundamentals the book value right so >> yeah so I'm I'm trying to think through how this plays out and uh overall I think the reaction from the internet was um uh like being more dramatic than maybe uh maybe is necessary because already >> like if you're if you're let's say an early investor in anthropic and you at some point sold your shares, you didn't go to the board and get permission but you structured some deal to sell your shares. >> You get your shares back. >> Um that is so so waiting waiting for for that. Yeah. >> Um on one hand, neither party if you bought the shares or you sold the shares, neither party is that incentivized to go to anthropic board and be like, "Hey, I'm really sorry. Like we did this. It was against because on one hand like there's probably some scenario where the the the investor or the anthropic employee could get their shares like voided or reclaimed in some scenario. So they don't necessarily want to do that. the investor is like, "Well, I bought these shares and now they're worth a lot more, so let's just like be chill and let this play out and we'll we'll all forget about it, right?" >> Um, but there is a scenario where the the seller said tries to then make the case of, >> "Oh, actually, I'll just give you the money back because now the stock has appreciated so massively." >> Sure. Sure. Sure. >> There might be a weird but but what ends up happening is like there's sort of this like legal tension, right? tension between both these parties and then there could be some incentive again the person that bought the shares at a lower valuation >> wants to just let it ride. Yeah. >> But then but then somebody might be like well I kind of would happily ride up another 20x or something like that. But then if this starts going if once it goes into like an actual complaint or a lawsuit then it becomes public >> and then you have this third party in there which is anthropic which is like um going to just be like hey like you guys have been messing around like this isn't this isn't cool. This is against um against uh you know multiple sort of agreements and and terms. So anyways, it's going to be very messy, right? Because there's there's there's already >> blog post is also these blog posts are not new rules. It's merely they are publicizing rules that are probably already in the stock documents. >> Yeah. Because if you invested early, are you an employee? Yeah, >> you should know all this, which isn't a surprise, right? >> Well, it's possible that very early investors don't have transfer restrictions for some reason. I don't think so. It's pretty standard. No, you always you always set this up up as a company because imagine you have an early angel investor and your company does well and they just sell it to somebody who you don't like. Like part of the reason to be private is you can control. >> Every deal is unique and every deal gets negotiated points and there might be of some point when some investor and employee was like I'm not joining unless you give me this and they're like okay yeah we'll get we'll pay you less but we'll give you this. There's always like horse trading like double trigger single trigger. Yeah, but it would be it would be like I I I agree with I agree. I agree with you. I agree with you. But >> so anyways, who knows how many transactions there's actually been. >> Yeah. >> Right. I would expect like >> certainly like I don't know there could be like when you actually look down through all the trees of SPVS and there could be >> what what a lot 10 over >> Yeah. 20,000 individual. >> It's not like taxi cab driver telling you about the SPV that they got into yet, but it's like close to it. >> I mean, there was the story of the guy who was like selling his house for anthropic secondary, right? Like there's a lot of examples of this. Like >> that's bad, too. Imagine imagine the the the the like record updates. >> Mhm. >> Like like you'll be able to look at the deed or whatever and be like, "Oh, who's the new owner? Oh, you work you're an early >> like so that transaction that whole transaction doesn't really work. >> Oh, yeah. And that's extremely public. Yeah. Way more complicated. Yeah. Yeah. Very odd. Well, let's break it down for the Frog and Toad fans, the children in the audience because uh Frankie over at Paradigm uh put it in uh terms even a child could explain, potentially a four or fiveyear-old. Um so, if you're familiar with just Frog and Toad and you don't know anything about all the buzzwords we've been dropping for the last five minutes, uh you can think about it this way. Frog and Toad, beloved children's book. Frog put the shares of Anthropic or OpenAI in an SPV. There he said now we can transfer these shares freely. But Anthropic can still exercise its transfer restrictions, said Toad. That is true, said Frog. The frog and toad. It's a great one. It's a great one. Is there anything else we need to talk about there? Uh Anker says, uh, "If Anthropic deems all secondary sales of Anthropic stock should be voided, does that mean the original buyer retains financial interest even after selling it away?" Lawsuit territory. Yeah, there's going to be a messy thing. People been talking about unwinding S uh SpaceX AAA or SPVS for a long time. >> Yeah, that's going to be a billion dollar that's going to be almost a billion dollar industry. >> Yeah, we need to get the Mac We need to get the Mac Grim clip up again. It goes viral every time we talk about SPVS. What does Mike Isaac say? He says, "Yeah, look. All the privos draft this language uh to scare employees who don't know better from trading on secondary markets and from buyers seeking those shares and yet SPVS uh find a way." Funny to see the saber rattling and Twitter accounts doing hyperbolic posts though. Uh and so it'll be interesting to see like how far does the legal implications how far do they actually go? Well, over at a different AI lab, uh Mera Moratti, who was just Was Meera on the stand? She was actually testifying in person or was she just video deposition? >> When I saw her, uh which was last Wednesday, it was just deposition. I don't believe she actually has testified in the trial yet. >> It was Siobhan that was on the stand. Correct. Got it. Okay. Uh well, Meera is cooking over at Thinking Machines Lab. TML launch uh interaction models with a delightfully concise YouTube video that we should play so that we can uh watch this. Uh Mir Moratti says on X, "Today we are sharing our work on interaction models, a new class of model trained from scratch to handle real-time interact interaction natively instead of gluing it to onto a turnbased one. Let's play the video." >> Hey, I need your help with something today. You ready? Absolutely. I'm ready. What's up? >> Yeah. So, we're giving an announcement today and I've got two of my friends coming to help. Every time one of them enters the frame, I need you to say, "Friend, >> look at those speakers." >> Got it. >> Absolutely. Whatever. Insane setup. Audio file. >> Cool. So, we've got a new system for full duplex audio and video, which means that uh you can stream input into it in real time and it can respond to you even while you're speaking to it simultaneously. How does that sound? Sounds like a solid setup. Full duplex with real-time interaction is super useful. >> It seems faster than the original voice mode which was lamented by the viral Instagram real producers. >> Can you translate in to in English in real time for my friend and for audience? >> Absolutely. I'll translate as you go. preview model. >> Today we're taking a look at our preview model. >> I saw or I heard about a version of this in China that's a mask that you wear that translates everything you say out of a speaker on the front and I was hearing this and I was just like why is this not in America? This seems so sick. Like we hear about the AirPods, but then you so the example was a mom in China teaching her kids uh English and so she basically wants to be talking to them in English constantly, but she doesn't know enough English to teach them, but she wants them to learn. And so she will, I think, wear >> put on the mask. >> Put No, it's literally a Bane mask. It looks >> exactly like a Bane mask. >> Yeah. Yeah. Uh you merely adopted English. she was born in it or born in the AI translation uh minds. Um so she wears this Bane mask that does the live translation out to her kids. Her kids speak back to her in English. Uh smart headphones translate back >> like metal that wraps around. >> I don't know. I couldn't find it. I was listening to it on a podcast so I didn't have any visuals. But we got to find this thing and get a pair in America. Because in theory, we could do the whole show speaking Chinese to each other and the audience would hear Chinese, but we would be hearing English that we talk to each other. Isn't that cool? Powerful. So, I would be hearing English on a massive delay probably. Uh, and but I would be speaking Chinese as it comes out of my Bane Mask. And uh, and it was just a whole story. The whole the whole thrust of the the New York Times Daily was uh like the optimism of of AI, optimism in China around AI. Just tons and tons of examples of of you know, everyday people being like, "Oh yeah, like AI is amazing. I'm teaching my kids English, they're going to have a great life and like I would not be able to do this before and now I can just do this." And there's like so many examples of that and it's the exact opposite. >> David says the moment Jordy gets a live translation button, it's over. We're not that far away from me being >> We're working on that right now. Actually, uh yeah, for guest for that mask, I would actually be very surprised if that's like real or or at least if the audio sounds very good. >> It'll be because like you can just look at like okay, what are the best like real-time translation models? Uh what are they like API prices? They're like not super cheap. So, you can't do it locally, which means it's somehow in the cloud, right? Um, and and just like even the best models are there's still some delay and they're just basically now getting to a point where it like sounds like a real person and not like super computerized audio. >> It has a it has a clanker dialect. >> Okay. Yeah, maybe. But but just like getting the the latency down is like extremely difficult because people have been working on this for I mean this is like >> you don't think you can do it on device at all. >> What if you basically >> at some point you can but I think it's still like very >> phone as for this one model. You take the llama 3 version of it. You bake it down. Huge battery pack. You're wearing a whole jetpack full of batteries to power the H100 in the back. It's on device inference, but they didn't say how big the suit is. You have to wear the connect for the mask. Like >> it's like the Nathan for you. No, it's like the Nathan for you the chilly suit. >> But it's an NBL72 that you're just like dragging behind you like a washing machine. Uh anyway, we have our first guest of the show, Doomberg, the anonymous poster and analyst with us in the waiting room. We'll bring in Doomberg to the TV show. Duneberg, how are you doing? >> Stunning. >> Hey guys, doing great. >> Thank you so much for taking the time. I love an animated avatar. Uh can you what can you tell the audience about who you are, why you chose uh anonymity, pseudonymity, any of that just as an a way of an introduction? >> Sure. Brief intro first. Thanks for having me. Um, >> great to be here. Um, yeah, we are a anonymous team of former industry executives that write about the energy markets. >> Okay. >> When we launched Duneberg 5 years ago this month, um, we had nothing. >> And so we we decided to build um Duneberg on Twitter back then. >> Yeah. >> And um the the choice came down between another middle-aged white guy in a tie >> Yeah. >> or a green chicken. And um you can't be remembered if you don't stand out. And so that decision actually accelerated our early growth. And then once a brand kind of kind of blows up. Um >> we observed other other Twitter accounts deanonymizing >> and um it kind of destroys the brand mystique. So it's nothing more than that really just um >> why is why is the chicken green? >> Um well another master stroke of marketing by our co-founder and editor-inchief. Um >> love it. So, our ideal clients have Bloomberg terminals. >> And the colors on the Bloomberg keyboard are pretty iconic. >> I get it. >> And and the most dominant color on that keyboard is is a close proximity to the green that we >> currently wear. Um, >> you know, so yeah, just a >> it's the a brand is the gut feeling you induce in people when they interact with your product. And um >> that's right. If our ideal clients have a Bloomberg keyboard and they see the green chicken, you know, Doomberg chicken little gets a terminal was our first uh >> yeah, >> first tagline and um they don't know why they like it. It's some combination of the colors and the stunted eyes, we think. >> But yeah, it works. And when you got a winner, you know, just keep riding it. >> I love it. I love I love I love combining this this high low, right, which is like, you know, serious content with uh >> Sorry, I Yeah, I I want to talk about energy and AI, but I also want to talk about the like the workflow here because uh like am I just watching like a looping animated GIF or MP4 file or can you actually puppeteer this uh like a Vtuber or have you considered that? >> This is very low tech. >> Okay. >> Um there's no new Coke yet in design. >> Okay. Um, this is a GIF. >> Yeah. >> Animated as our background on Zoom. >> Cool. >> And I'm speaking to you through a um Roland VT4. >> Oh, >> slightly modified in real time. >> Sure. >> The latency is perfect. >> Yeah. >> To build on your last discussion. And >> yeah, we've had a couple guests come on and want to do voice changers and no one's landed the plane like you have. So, uh, congratulations and all that for dialing it. Technology is one of the five pillars of any business and we decided to invest in our technology plan to execute the vision of the green chicken. Come on. I mean it works. Every time I see >> a um advertisement of all these serious finance people in suits and ties speaking at a conference and then a green chicken sitting there. >> Take this suit off real quick. >> Makes me makes me laugh every time. So >> that's so good. >> Uh talk about the other four pillars. >> Uh brand channel, technology, demand creation, and operations. >> Okay, makes sense. And uh we have a plan for each. One of the hallmarks of Duneberg's execution on Substack is that we openly shared how we built Duneberg from the beginning. >> Sure. >> In a series of monthly pieces called The Work of My Life. >> Yeah. >> And um it's been fun. Been a fun ride. We've got almost like 400,000 email subscribers now. >> That's amazing. Congratulations. >> Crazy. How big is the crazy run? >> You said it's just a couple people, right? >> Um our official statement is that you could count them on one hand with a few fingers left over. >> Sure. Okay, I like that. Uh, >> leaving some ambiguity, but with a few is a few three. Let's Yeah, let let's start with uh let's start with energy markets. Let's start with uh the straight of hormuz. I've heard it's closed. Is that good? >> Uh how bad are things? How serious is uh the situation in the in the oil and gas markets? and then we can go through some of the knock-on effects. But just in terms of like like you know a lot of people have been tracking this, but where are we on the cutting edge right now in terms of where this all goes? >> Yeah, we're launching a piece tomorrow. Look, if you had given us this fact set in February and asked us to bet the overunder of 150 on oil, we would be homeless because I would personally have um mortgaged the house to greedily bet more on the over, >> right? >> And and would have lost. And I think one of the great mysteries of this whole affair is why is oil still so cheap? >> Yeah. >> Um and it's a really interesting mystery. Go ahead. >> Yeah. And and I that feels like that's true for also just like the broader market like the market is not processing in the same way and maybe it's like the AI narrative which we can get into but it feels like there's a very very big historically significant thing happening and everyone's just sort of like closing their eyes. I don't know. How do you explain it? >> So we've got a deep think on it. Nobody knows. So, one of the things about the oil markets is everybody lies. That's the first thing. >> And one of the sort of theories I was bouncing around with a guy who's traded oil for 50 years um over the weekend was >> there was an enormous excess of oil all of last year. China bought most of it. They lied about it and they're bleeding that into the market now to keep a lid on prices. >> Got it. >> Um that's one sort of conspiratorial look. >> Yeah. Um, and and sorry, just to double tap there, you're saying they were lying about their the the levels of their oil reserves. So saying like, you know, basically under underelling. >> Uh, >> yeah. So there's a lot of dirty oil. There's a lot of dirty oil on the market and they were buying it, you know, um, sanctioned oil, shadow fleet, Russian oil, Iranian oil. >> Sure. Um and um and so you >> Yeah, because back at the beginning when it first closed, weren't people saying China has 40 days of oil or something like something to >> Oh, they have they have 1.8 billion barrels is our best guess. Um they probably bought a million or to a million and a half barrels a day extra all of last year. >> Wow. >> Um and they're using them for geopolitical leverage now. They're cutting refined fuel deals with Australia. They're helping out their neighbors. um looking like the mature, stable, don't have a tro truth social account to post on during the day. Um you know um ascending power with Trump going there this week. Um look, I just want to say in a world where oil is more expensive, oil doesn't matter like it used to. >> Mhm. >> It used to be 55% of global energy. Now it's 30 and change. And to the stock market, look, the AI revolution is powered by coal in China and natural gas in the US. >> Yeah. And natural gas in the US has been made cheaper by this war for reasons that we can explain. And um coal is basically insulated from oil. And so I I don't think it's all that crazy. Of course, with the benefit of hindsight, >> doesn't mean we would have predicted $100 oil 60 days into the street of Hormuz being closed or 75 days, whatever it's been. But anybody saying that they would have not predicted a calamity is lying. Going back in time, are you learning any lessons or pulling any historical lessons from the previous wars in the Middle East? I grew up at a time when the war in Afghanistan, the war in Iraq were breaking out and the protest signs said no blood for oil, which is a completely reasonable thing to say. Uh but I was surprised by the fact that if you look at the oil markets during that time, it feels like even if you took the cynical approach that the US was going there to steal the oil, it didn't seem like that oil was successfully stolen and flooded the market. And I'm wondering what else you've learned from history and the various conflicts in the Middle East about oil prices that you can like draw on today, if anything. Well, be for that war, James Baker went went around the world and told all of our allies to start pumping ahead of it to to insulate. >> Okay. >> Um the world from it. The real comparison everyone draws is the Iran embargo following the war in the Middle East in 1973. >> Okay. >> Um but the big difference between then and now aside from the fact that oil just matters >> so much less >> less >> is that um there's an organization called the IEA that exists. >> Yeah. the and they have worked with the developing world to ensure that countries have a stockpile of oil for this exact situation >> and they flooded the markets shortly after the straight was closed with 400 million barrels. You know, there's there's still when you do the math there there's oil prices should be higher. >> Um and they just aren't. Um so it's it there will be lots of time for an afteraction report when this war is done. >> Mhm. Um but for AI and for the tech world, um natural gas in the US being cheap and coal and China being cheap means those data centers are humming and all is good. >> What's driving uh natural gas prices right now? >> Great question. So the shale revolution in the US not only made the US a net oil exporter, it twinned the production of natural gas and oil. It used to be that natural gas was drilled for on purpose. Oil was drilled for on purpose. And now in the shell patch in the same well, you get natural gas and oil. >> Got it. >> Especially in the perant. >> We're drowning in natural gas in the per. So when the straight is closed, oil spikes, drilling goes up >> and you got all this natural gas to get rid of. >> Yep. Got it. >> It's co-production economics, which is actually not widely understood. And it that's like pulling on our industry days. Whenever you have to compete against a co-producer, it's terrible >> because if either of the markets are hot, they're producing too much and they're flooding the market with the unwanted byproduct, which happens to be what you make. >> Yeah. >> And so, um, when the war broke out, we correctly predicted that natural gas in the US, despite a global energy shortage, would would, um, prices would go down. And in fact, as we're talking today, natural gas is trading in the US for like three bucks a million BTU, which is about $18 a barrel oil. >> Yeah. >> And in the Peran Basin, it's negative spot prices. They're giving it away. >> Yeah. >> They're drilling for the oil. The natural gas is a nuisance. >> And >> so it's possible there's a super intelligence that's already in control that wants to feed on natural gas. playing. Yeah. This 40 chess political the ultimate, >> you know, claude agent gone. >> Yeah. Yeah. Uh how is China is is China potentially like the biggest loser here? Because I imagine that coal and oil cannot be co co-produced in the same way and so you don't have that dynamic playing out. Are they being squeezed? Like who who is suffering the worst from the closure of the street of her? I suppose >> um Europe and Australia. China is going to come out the big winner in this. >> Okay. Why? >> Uh a variety of reasons. So, first of all, China has been building out something we've chronicled to the tune of hundreds of billions of dollars, the ability to convert coal into oil products. >> Oh, interesting. >> Um the only two regimes to have done this historically are the Nazis and um apartheid South Africa. >> It's a quite the exclusive club the Chinese have decided to join. >> Um you do that out of necessity when you're worried about losing access to oil. >> Mhm. It's very expensive, very environmentally taxing. It's not something you would do spontaneously to create shareholder value. >> You do it for geopolitical insulation. And um >> but also >> China's um sway in the Middle East is going to grow >> if Iran continues to resist um the USIsraeli strikes and controls the straight of Hormuz because Iran is being backstopped by Russia and China. Mhm. >> And so in a world where the US has lost some geopolitical leverage in a zero sum game, um, China benefits and we'll see what happens this week. I think this is going to be a historic summit. >> Yeah, that's what I was going to ask you next. Uh, what are you expecting? >> Before we before we dive into that, I did want to uh one one more question around uh oil. How are you forecasting whether we get high prices or massive shortages with you know oil uh you know uh everything from gasoline to other oil based products because I think they're I think America like a lot of people right now are are kind of projecting hey we're just going to pay more at the pump but then there is some scenario depending on how things play out where you actually have uh you know you can't just go to you Uh we were talking yesterday um and you know maybe there's a scenario where depending on uh the last digit of your license plate if it's an odd or an even number you can only go on certain days it's and you get actual rationing >> that's not going to happen in the US. It depends where you are. So the US is a net oil exporter. Um it's a bit complicated. We're detailing it all tomorrow. Trump is playing a careful game where he is allowing the export of gasoline, diesel and jet fuel to try to help the rest of the world and the US is still well supplied but is paying more. So we see $5 gas, $67 diesel. Trump could reverse that at any time just by limiting the exports of refined products. He's choosing not to yet. Um, but if you're in Australia, you're already in a situation where you have to have urgent intervention by the government, who who have done a great job, by the way. Um, and Europe, you know, when you don't make your own hydrocarbons and you're beholden to the rest of the world, well, if everybody turtles up and says, "We're not going to export until our domestic, you know, demands are met," then you will see real shortages and no amount of price will clear. >> Um, and so North America is fine. And if you draw a circle around Canada and the US, the two countries are self-sufficient in oil, diesel, gasoline, jet fuel, fertilizers, wheat, corn, sulfur, helium, all the things that people are worried about globally. Um, we have not yet instituted export controls, but before the stocks would run dry, especially with the midterms coming up, you would assume that Trump and Carney would collaborate on such a such an action. Have you been tracking the Diet Coke shortage? I >> have not been tracking the Diet Coke shortage. >> Apparently 8% of aluminum goes through the straight of her moves. So the cans are in short supply now. >> Yeah. And this is top of mind top of mind for us because John could run to the to the studio if he didn't have gas. But you know, the show wouldn't be possible without him going through three or four of these. >> Well, I I got one word for you, too. Uh plastics. plastics not gonna be popular with some >> Oh yeah, you technically can get a Diet Coke. You can get a DC. >> You could just buy a two liter bottle or maybe fountain. Maybe fountain is the future. >> Um uh fertilizer was was my last last question around um yeah, how you know how are you uh I don't know if you're covering you know future uh you know food prices, commodity pricing, etc. We we sure are. Again, um North America both in well in nitrogen in in phosphorus in potassium. The big three Canada and the US are self-sufficient. Um Canada has the the world's biggest most fantastic potassium deposit pod deposit up in Saskatchewan. Um we wrote about this a couple of months ago before the war. >> Um the US, you know, ammonia is basically just a natural gas play and the US is drowning in natural gas. >> Oh, sure. um through the habber process. You just take natural gas and um long story, but you make ammonia that way. Um there will be shortages of fertilizer around the world. There will be food shortages and all that really means is it'll be more expensive for the rich countries and there won't be food in the poor countries. This is what we see historically is the market clears >> and the poorest countries in the world suffer and um the rich countries complain. >> Black pill. Do you have any white pills? Is there a good ending that you are guiding towards optimistic about? Is there anything that you're optimistic about right now? >> Yeah. Um >> I think a major deal is in the works between Look, I don't think Trump would be going to Beijing. I know we wanted to talk about that. Um >> Trump wouldn't be going to Beijing if there wasn't a major deal and the list of CEOs going with him. >> Yeah. >> Is quite the tell. >> Yep. um broadly you don't have the president of China and the president of the United States get together in such a high-profile visit without a bunch of stuff worked out in advance. Y >> and um I would I personally being vehemently anti-war would love to see a solution to Iran and Ukraine all tied up in a nice bow >> and the US focus on its neighborhood here in the Western Hemisphere and um and we get back to growing and computing and um competing and drilling for energy and you know making money in stocks and you know let the president make the all the money he wants in crypto. I don't care. But um another war in the Middle East was not on the one. It's not on the bingo card for us in 2026. >> I don't think many people voted for it. Um well, let's shift over to what's happening in America. If we can get back to domestic policy, uh what are you tracking on the AI buildout? How important is energy? Everyone's been going back and forth on the chip bottleneck, the energy bottleneck, the chip bottleneck, the energy bottleneck. Do you have a viewpoint? Has it evolved? Where do you see the buildout going these days? Yeah, we're we're an energy newsletter and so um holding that hammer, all we see are energy nails >> around the AI space. Look, I think natural gas is so cheap and abundant. >> So then, okay, what's the constraint downstream from being able to produce electricity from natural gas? Um that's gas turbines sold out. Y >> um so then, okay, can I make electricity with anything other than a gas turbine? All right. um solid oxide uh fuel cells by Bloom Energy. Yeah. >> Their stock is booming. >> Yep. >> Um Okay. If I wanted to get sophisticated, half the energy used at a data center is for cooling. And boy, there's an awful lot of natural gas in British Columbia, and last I checked, it's colder up there than in Texas. And so maybe I might want to look at >> British Columbia, Alaska, Iceland, >> cold places, um to build my data centers. And you're seeing some of that. >> Yeah. Um but there's just so much fuel that it's become almost um taken for granted in the US that this is the fuel of choice and now you're running into um grid connection issues. And so one of the pieces we wrote again before the war changed everything was called um irreconcilable differences where we predicted that most data centers would have to go off-rid. >> Mhm. >> Because like the clearing price for retail electricity is not what a data center is willing to pay for it and no politician can absorb those increases um for industry and for you and I at home. And so we sort of envision these buildings where natural gas goes in one end and data comes out the other. >> Yeah. and everything happens under the same roof. So in your >> what what's the what's sorry to interrupt but what what's the downside there is hasn't it been in in some instances generally beneficial to bring a bunch of new energy production onto the grid uh just due to yeah the yeah more supply >> prices are set at the margin and the rate of demand for electricity for data centers is growing faster than the >> bureaucratic ability to bring on new grid connected power. >> Yeah. Um the way in which the grid is operated, managed and built out in this country would shock you and it is utterly inongruent with the Silicon Valley break it you know move fast and break it mindset. Um and so >> little Freudian slip there sometimes just go just break it. >> Just break it. >> Yeah. >> You might be moving slow but you're still going to break it that's trying to fix it. >> That's the Masson funded. just pour money on on the founder until they get it. Look, we wrote a piece called the exception that proves the rule where we we showed that, you know, Elon Musk built this major natural gas powered data center for um XAI in in Tennessee by >> breaking all the rules, right? He just built his own natural gas power plant. >> And it proved to us, the exception that proves the rule, >> that the the current rules need to be broken for stuff like that to happen. And so you >> since Microsoft and Google aren't ever going to behave like Elon um >> you need to do this stuff off grid. Um and so there's a hybrid solution where most of the power is off grid but they still connect for backup. >> Mhm. >> And you build these at old um shut down coal plants. >> That's another trend that we're seeing in Appalachia near the big um natural gas >> interesting >> shell patches up there. So you have an old coal plant with all the connections there. it's shut down and you build new natural gas plants there powered by local natural gas and um you use the connections to the grid for backup. >> Yeah. >> But you're not leaning on the grid for most of the power and that's kind of a win-win. >> Walk me through what an off-grid natural gas powered data center in Alaska would look like. I'm a big Alaska fan, but do they have natural gas deposits up there that you would need to go set up drillers and then uh turbines? Like how would that work? And what what is the timeline for that versus something like nuclear? >> Much much quicker depending on bureaucracy. Um, one of our operating mental models is that the US has an infinite supply of natural gas. >> Really? >> Um, it's just a matter of going and getting it. And so, um, if you made it, for example, if if we made it a, let me put it this way, if Trump issued a nationwide price floor of $5 a million BTU for natural gas, the US would be the drilling stampede that would erupt would blow the world's minds. Um, the US produces so much natural gas. I'll just give you some numbers. Um, the entire European Union's dependence on Russia before the war was like 15 billion cubic feet per day. And the US alone produces 110 billion cubic feet per day. >> Wow. >> It's just this mammoth machine of fuel. >> Um and so yes, there's plenty of natural gas in Alaska. You could build it in British Columbia. >> Sure. >> Next door. Um little to the south. >> What about the infrastructure? Like isn't part of the strategic importance of the straight that they have the infrastructure to what is it? Liqufy the natural gas so it can be transported. Are we are we way behind on on that infrastructure? >> The US is stampeding to the lead in this regard. So when I was in industry, >> Freeport LG, >> but when did that stampede start? >> 2015. >> Okay. So it's been in process. >> When I was in industry, Freeport LG was meant to be an LG import terminal. >> And then the share revolution happened. So just to go back to those same numbers, um by the end of this decade, the US plus a sprinkling from Canada, Mexico will have gone from zero LG export capacity to 30 billion cubic feet per day. Um and in Qatar today about 15 to 20% of the world's LG capacity sits at a place called Ros Laughen. >> Mhm. >> And um a couple of trains were blown up there. Two out of 14. But LG is still a small part of the global natural gas trade. So the straight of hormuz is not really a natural gas problem in the way that it's an oil fertilizer um you know refined products problem. UR is let's say just to make the numbers round um Qar is 20% of LG and LG is 20% of natural gas. That means Qar is 4% of natural gas. >> What has the environmental push back been around natural gas? It feels very intuitive. It's burning of fossil fuel. Sure, it's not scarce, but it feels like it could create global warming. And yet, I've been shocked that there's been so much focus on the water that's consumed by data centers because that feels much more plentiful and much uh much easier. >> Yeah. There's a certain there's a certain irony that fear around global warming has been replaced by fear around AI, at least the mainstream media narrative. Yeah. >> Yet the >> So, >> yeah. >> There's um yeah, there's an always a a fear campaign around whatever America's excelling at. >> That's sort of our mental model. Like, hey, America's dominating with AI and data centers. We better whip up some fear. >> Yeah. Sort of like a tall poppy syndrome in our culture. >> It's Well, who knows? Foreign actors who don't necessarily want to see the US succeed. >> Sure. Um, so to your specific question, natural gas is super clean burning, produces the least amount of CO2 >> per energy. >> That's good. >> Um, in fact, well, you can cook with it in your homes with no ventilation. Nobody would say that you would bring your barbecue indoors. >> Oh, yeah. >> Which is basically coal, right? >> Yeah. That's right. >> Um, and so you you have natural gas in your furnace and you have it on your stove top. You have it in the restaurant. >> Um, and it's just burning away nice and cleanly. Um, there is one madeup problem with it. Well, I say made up. Um there's um if natural gas leaks, it's considered a very potent greenhouse gas. Methane leaks. They've even launched satellites to try to >> track where industry is leaking methane directly into >> Got it. Yeah, we were talking with uh Will from Planet Labs and he was saying by you can use uh you know sort of like real time satellite imagery to track natural gas leaks and they've been pretty effective I think at helping countries and companies identify these leaks. >> This will blow your mind. Natural gas is so cheap historically and such a nuisance that they would just release it in vented into the air to get the oil. >> This is before plant, right? before people cared about methane leaks to be honest with you. >> Um, and look, this is a much much smaller problem in the US. US is very regulated. Environmental permits and controls are tough. >> Where it's a big deal is places like the Middle East, Venezuela >> where there's, you know, weaker governments um, weaker environmental controls. >> Yeah. >> Um, but you can go online and find a bunch of people really >> hyperventilating about methane leaks. >> Who else is big in natural gas across the world? Like who like do you know what country is number two, three something like that? >> Yeah, I know them all. Yeah. Um so um US is by far the biggest. Okay. >> Um Russia's number two. >> Oh. >> Um oh is that some kind of uh >> it's an eagle. >> That was an eagle for us >> for America. Um yeah have chickens don't like eagles. >> Oh no. >> Yeah. So you kind of get kind of triggering me over here. Um >> you got to be careful. So, um, Iran, Russia, Iran's a big natural gas player. Um, obviously, um, Canada is a growing natural gas player >> because of the shale patch they have up there. >> Um, Australia is a big LG exporter. Qar is a big LG exporter. >> But Russia is the second biggest. They probably produce about half as much natural gas as the US. >> Mhm. >> Um, and then, you know, a sprinkling throughout the old Russian, the old Soviet Union, the Confederation of Independent States, I believe they're called now. What are you tracking on the nuclear side? Every time we talk to a nuclear founder, they're ready to run through walls. They're they're wellunded. They're ex SpaceX, ex rocket scientists, geniuses, and they're like 2035. >> Yep. >> Is there any optimistic scenario where we get nuclear a little bit earlier? >> So, there's only one way to do it, which is not seductive and doesn't require any technology, which is just build a lot of the stuff we already know how to build. So that's AP-1000s and can do reactors up in Canada. And >> there's no like >> fusion is a fake solution to problems that don't exist. >> Sure. >> Like we don't really have a nuclear waste problem and we don't have a meltdown risk problem with the latest designs. >> Yeah. >> And so all we have to do is build what we have. But that's not sexy. Mhm. >> And that's not a technology store you can sell on Wall Street and >> have your IPO and you know, >> so that that's our >> there are some companies that are not trying to reinvent the wheel and are just saying like let's just do more of what we already know do. Whether or not they should be venturebacked is another question. Uh >> I think there's better use for venture money than nuclear. Yeah. >> Uh where is solar in all of this? How much uh out of out of uh all of your coverage, how much is dedicated to uh solar? I think that will we we write about intermittent renewables from a pretty critical lens. Um broadly speaking, there's an awful lot of misinformation and disinformation about solar. The biggest one is that the sun is free. As though the price of a fuel is the only input into the cost to use it. >> Yeah. As we're learning with natural gas, it's free in the Waja hub. Doesn't mean that you can buy your turbines and build your data centers. Um >> and uh the biggest challenge with solar is that um sometimes the sun doesn't shine >> and dealing with that intermittency is a real challenge and the expenses associated with making room for solar when it's there and getting out of solar's way um you know when it's really hot and the sun is really shining but also standing in for solar when it decides not to show up for work. Those expenses are never ascribed to solar. they're just piled on to all the other technologies that um have to stand ready. And so um historically, whenever you reach a certain threshold of solar on a grid, things start to break. I could explain technically where that breaking point is, but it's probably >> beyond today. >> Duneberg, is the name Doomberg like reflective of your demeanor at all times? It's uh mostly tongue-in-cheek sarcasm. We're techno optimists. Um and we are defensive pessimists. We spend a lot of time pondering worst case scenario risk and then once those are properly abaded >> um we feel that we're in a position to take >> more risk personally. Um I'm personally a prepper for example. So >> um that's good to know. I wouldn't have guessed that Doomberg was a prepper. Actually maybe I would have. Um uh I had one question. Uh, do you one last question and then I I know we're out of time. Uh, would love to do this again soon. Uh, I enjoy talking with the chicken, although your eyes do make me kind of go crosseyed myself, which is a challenge. Um, any do you believe that uh we've we've seen videos online of people filming data centers with uh, you know, uh, generators outside them. They seem to be not exceptionally loud, but loud enough to be mildly annoying. Low, like, you know, lower decibel than sort of legal limits, but still maybe not something that someone wants.9. >> Yeah. Maybe not something that someone wants in their backyard. Do you do you think there's any innovation on um reducing uh overall like noise pollution on that front or is that um to to date you know at least we talked to somebody yesterday who was like that's the least of my issue you know um but uh it feels like something that probably can and should be worked on >> unless we in Alaska >> nimism is real and I don't think should be dismissed and I think local concerns are um always worth listening to, especially if you want to be um durable as a good neighbor and as a as an industry that has, you know, persistence. >> Yeah. Historically, like factories were very ugly, but they provided a lot of jobs. And so, >> uh if you come through and you're like, hey, we're going to build a new factory, but it's not going to create a lot of jobs. >> That's not a super compelling >> pitch, right? >> And it's going to be loud, you know? Um, so I I assume that the diesel generators are there for backup power predominantly. >> Oh, that's what we're looking at. Yeah, that's right. >> And I would suspect that um there's all manner of venturebacked companies pitching stationary batteries. You know, a stationary battery for backup at a a data center is a different problem set than say a battery for an electric vehicle, which gives you some more degrees of freedom in design um than as you know because with a car for example, you care a lot about gravimetric energy density, >> whereas you might have different CTQs for a a battery set up um to provide backup power for a data center. Um and so there's lots of people working on it. I see some private deals floating around in our own personal lives. Um, look, um, the speed with which this revolution is unfolding means that you're going to break a few eggs, >> you know, like we were talking about earlier, you know, move fast and break stuff is happening. It's real. Um, and you'll see local communities embrace it because there are jobs, construction jobs and, you know, um, so on that come with these things. And, um, they're not all yet staffed by robots. Um, >> we have eagle eggs or both. What are we breaking? >> You know, I'm I'm in the egg business, you know. Um, it's a renewable resource where we are. >> It is a renewable resource. That's an optimistic. >> Last last question. Do you think California will be producing more or less oil in 10 years than it is today? >> Oh, way more. Yeah. They're heading for a big crisis. And um, you know, California needs to drill more, refine more, and connect pipelines to Texas. And and I do think one of the big laments of the Trump supporters is that this Warner may have squandered the opportunity to get domestic energy projects like that over the line where he had political wind at his sales. Um we'll see. Um but um I think let's put this way. I'll leave you with this, >> please. >> Um California has as much oil and gas as Texas. And the the reason why Texas is a global energy superpower and California is a flaccid energy vessel is little more than politics. And you get a big enough energy crisis, um, politics is easy to wipe away. >> Yeah. Uh, I I had the pleasure of having dinner with a guy uh who had basically like an oil drilling SMB in California for like a decade and then ended up shutting it down about a year ago because of some new regulations. And uh he was just sitting there being like I don't you know just kind of at at a loss because he's like we use so much oil. We we depend on it. Uh we should be making it here versus just importing it. So >> well thank you so much for coming on the show. This was a pleasure >> and we hope you have a great rest of your day. We'll talk to you soon. >> Thank you so much. Talk soon. >> Uh there's a good note for the listeners. If you're looking to build a diesel refinery out in Malibu, reach out to me. I'm happy to finance it. It won't be a problem. We'll build a massive diesel refinery right in Malibu. Jordy's not paying attention. Uh Westinghouse, they make nuclear reactors. We are in an AI boom. We are in an energy crisis. What do you think the stock's done over the last six months? >> Down, >> completely flat, up4%. >> Perfect store of value. >> Anyway, we have our next guest. Sahir from Forest. He's the co-founder or founder and CEO. Welcome to the show. How are you doing? >> Good, guys. How are you doing? >> Fantastic. Uh, first time on the show. Please introduce yourself. Tell us what you're building. >> Yeah, thanks for having me. So, today we're publicly announcing for the first time our company for us, which has raised $160 million from Thrive Capital, General Catalyst, Excel. >> This is out of the lineup. Out of the gate, >> you have coming out of stealth with a $1 billion valuation. Congratulations. That's amazing. I usually give this advice to founders. I say like don't even talk about what you're doing until you're a unicorn. Just focus on the basics. Don't worry about the news. Don't worry about the media. No, it's actually true. Underrated underrated strategy if you can pull it off. >> Yeah. But let's talk about what you're actually building. Talk about the business. Talk about the development. Maybe a little bit of the history that went into uh building the company, start deciding to start the company. >> Yeah, sure. So, what we do today is we help people get access to medicine faster, easier, cheaper. Most impactful are people with high cost and complex conditions. So think things like autoimmune diseases, COPD, cancers, anything where the drugs are unaffordable without insurance coverage or financial assistance or complicated supply chains. We might take a doctor and patient weeks of phone calls and research and paperwork, get their medicine on time affordably. >> What we're doing is using AI to take on all that complexity and abstract it from them to get their medicine without any of the burden falling on their shoulders. Y >> we do all of that entirely for free because it allows us to build a large network of doctors, patients, and the data and systems between them. >> And we are then using that network on the other side of our business to partner with life science companies. Think companies like Fizer, Lily, Johnson, and Johnson, helping them develop and bring to market new drugs faster and more efficiently. So, it's really a two-sided model. >> Okay. Two-sided model. I feel like every time we talk to healthcare, it's like 10-sided model with like insurers and healthcare networks and doctors and then the hospitals have private equity back and they have a different set of incentives like who who are you cut are you cutting anyone out? Who are you not interfacing with? Are you interfacing with insurance or not? Is that a deliberate choice? Will that change over time? >> No, we so that's actually part of why this is such an impactful product for the core users. that we sell the doctor's offices as free product to help them automate all the complexity involved in dealing with all those other pieces. So think the insurance companies, the PBMs, thearmacies, any other aspects and really the goal is to automate every process that involves them working with those folks externally so they can focus on treating their patients and not have to worry about all that complexity underneath the hood. We interact with all those folks to kind of push things through the system, but it puts us in a position where we are kind of at the center of each individual transaction and have kind of a unique view into what's going on and that's what sets us up then partner with these life science and bioarmmer companies to help them in a unique way on bringing to market new therapies. >> Have you developed fax machine super intelligence yet? >> I would bet that we have some of the best fax AI. >> No way. And that's both on uh is that both on sending and then receiving and transcribing OCRing and understanding and then putting in some sort of database like are you birectional in your faxing? >> We are birectional. There's like a pretty decent chunk of transactions that can only go through fax. >> Yeah. >> In reality fax is actually a considered HIPPA compliant. So you have a lot of leeway there as opposed to in other transactions. But it's also very reliable. If you can't get someone on the phone, you don't have their contact information, you can almost always find their facts and republicly. So despite the fact that it seems insane, it's a shockingly reliable form of communication in the system. >> Yeah. And so what else is is uh what else is enabled or accelerated with AI because I can imagine you can use AI to build, you know, uh business logic and software like you can build SAS faster for deterministic workflows, but then you can also do sort of agentic things. When I hear about like finding someone's fax number online, that sounds like, yeah, you could Google it, but that's usually a person. There's not really an API, but with an agent, there sort of becomes an API. And so, where where are you doing agentic tasks on an ongoing basis versus using AI to develop sort of SAS? >> Yeah. So, there really two layers we think about and what makes the problems hard. The first is kind of what you're describing, a genuinely hard set of agent problems. you're navigating this multi-step path dependent process where there's almost never an obvious correct answer. And so it's usually not even cataloged anywhere what you're supposed to do or what the right answer is. You're working with imperfect information every term, what insurance does someone have, >> what does it cover, whaties work for this specific drug, what approval criteria exist, what medications have this person tried before, and you're interacting with all of that, like you mentioned, through faxes, phone calls, poorly designed websites, and scattered information. Mhm. And >> so that's kind of one huge piece of it. The second is a set of really complex ML problems where you're using dozens, sometimes hundreds of pages of medical records per person to answer very precise questions about someone's medical history across thousands of medications and diagnoses, dozens of subsp specialties and tens of thousands of doctors who all document and write notes about their patients and diagnose them and treat them differently. And so that same cap capability is what powers everything from navigating insurance authorizations uh to identifying whether a patient might be eligible for clinical research. That system kind of never stops evolving, right? New drugs, new guidelines, new insurance policies. And so as we're building and scaling, the complexity keeps increasing and you're kind of constantly regenerizing everything you built in your platform. >> Last question for me. Uh talk about the data side of the business. I imagine that there's, you know, you want every doctor's fax machine number. That's a data problem. You might be able to scrape it. You might be able to buy it. Uh there's also the data that goes into maybe fine-tuning models, maybe just setting up models for success, giving them the correct context. Like what is the shape of the data problem and how is it evolving? >> Yeah. I mean, it's kind of like what you described. It's through every single step in the process. So you can imagine where we sit, we see this from end to end, right? We see everything from the clinical information, how the doctor made their diagnostic decision all the way through to logistically what got stuck in the system and prevented someone from getting their medication or resulted in it being late. All of that's really relevant in understanding not just a how do we translate that into helping us automate more effectively and have more predictability in every step of the process, but also in then informing decisions that our partners are making on how to kind of move therapies forward in the research and development process, how to think about launching them, where to allocate their resources so those medications can reach as many people as possible. >> Got it. How big can the business be? >> So, I mean there's two parts, right? We think this can be the most important company in life sciences. Our goal number one is ubiquity, right? Every doctor's office and patient in the country should be using our product. That position doesn't obviously just let us eliminate friction for more people, but it puts us in a position to accelerate every step of bringing new therapies to market on the other side, right? When a new molecule is ready. >> So, do you become do you become basically like a is a legacy like legacy version of this and maybe in another industry like a distributor? Is that like the last >> distributors are like a partial analogy, but like a lot of what we're going to do is not the actual physical supply chain, but really helping on all kind of decision and and actions around that. So think about when you have a new drug, right? There's a ton of stuff happening right now in AI drug discovery. All that is translating into more and more hypothetical molecules, but how do we translate those molecules into production real life mass market medicines? From the moment a new molecule is ready to test in people all the way through all those steps, you have to figure out, you know, how do you identify the right clinical trial sites? Which patients do you recruit and are not contaminated by their medications? When a drug launches, which doctors have the most patients that look like the patients that did best in the phase three trials and therefore the right, you know, early adopters and can benefit the most. As it scales, how do you kind of use real world usage to identify where there new conditions where the same drug can be effective or there gaps in the market? that full loop from clinical development through mass market access hasn't really been possible before and we think we can kind of be the main chassis through which that happens. Today we are as you can imagine kind of growing in a ton of different specialties and the kind of first special launch we're already kind of approaching a third of the country. So you can imagine we really can get really far along and become the best partner to facilitate all these decisions. >> Well congratulations on the progress and congratulations on the round. Thank you so much for coming on the show. Great. Uh, thanks for having me. >> First day of media. See if you stay very dial. What were you doing before this? >> Uh, so I used to work at this company called Oscar, if you're familiar with it. Was that tech? >> That makes so much sense. >> I was thinking this whole thing this whole time. I was thinking this whole time. You must have been an Oscar. >> Drive universe. >> Drive universe. >> Drive universe. >> Cinematic universe. >> You and the SF Giants. Similar portfolios. >> Fantastic. We'll talk to you soon. Goodbye. >> Cheers. Thank you guys. >> Take care. Up next, >> before our next guest, >> who are you on? >> Uh, we actually are running behind. So, we're going to bring in the legend, the living legend, >> Sam Blonde. >> Let's bring him in from Monaco. >> Sam Company's Monaco calling in from San Francisco, I assume. But get that cash register ready. >> Count out a CRM. >> No, >> don't count it out, >> guys. >> Yeah. >> Great seeing you. Thank you so much for having me. Round two. >> Round two. Do you wait by by the way do you leave? Did >> Did you guys want to hear the gong? >> Yes. >> You want to hear the gong? >> You have a gong? >> Show us the gong. You have a gong. >> Hang on. Let's see if we can have a bigger gong. >> You have a bigger gong than us. IT'S >> A GONG. >> YES. >> This is amazing. >> Amazing. Hey team, >> let's hit the G. >> Congrats every >> Okay, I have a question for you. Do you leave up the whiteboard behind you to just kind of torture and mess with your competitors so they're like screenshotting it and trying to people are trying to reverse engineer gibberish like you just >> it's it's mostly art at this point. Um it's kind of funny. It it's like it is a cool it is a cool wall cuz it goes like all the way around like whiteboard wall. Um there is something up here that still has dates from last October. Okay. >> So, I don't know that it's like uh current currently functional, but some we use it every once in a while. >> It's seen some more. Uh but yes, uh kick us off with the news. What happened? >> Let's see. Uh well, thank you for having me on round two. Great seeing you both. Uh and we were we're we're so fortunate. Uh we launched in February. Things are going really well. Uh Jack Alman was an investor through Alt Capital and so he receives the uh monthly updates. We've known each other for a long time now. Um, and recently, you know, the business is is performing, I think, better than we would have anticipated last time we caught up, uh, which was sort of like midFebruary. And Jack reached out, uh, and said, "We're sort of interested in doing something with you and in the space." And we caught up and I think this is just sort of the dream round for us. You know, we did Founders Fund in the series A. That's a firm that John, you and I have a lot of history with. Couldn't have dreamt a better round for the series A. And then we're we're repeating it with the B. I think both with Benchmark leading Founders Fund tripling down, Jack joining the board. Um, it's awesome. So, >> I I thought I thought this was an Ev Randall special. I thought you were just like, I got to make have some money, my former colleague. But, uh, interesting that it's Jack Alman. Uh, makes sense though. I mean, Lattis, a lot of experience like adjacent to the space. Lot of lot of career lineage there. Uh, but take us through the product. How has the company evolved? What's traction like? >> Let's see. Launched in uh February. We entered February pre-revenue. We had some design customers. It's tough to do this thing where you like predict how the first few months are going to go because you have no data history. Um on February 10th, literally no one knew who Monaco was because didn't have LinkedIn that were up. We didn't have a website that was up. We went from sort of like this this deliberate stealth mode um with design customers where there are small handful of people that we were partnering with to build the product to trying to make as big of a splash as we possibly could. And I think like you know we sit here three months later uh in May and we sort of blew past all of the sort of business performance expectations that we had in that period of time measured by like you know number of customers revenue uh customer sentiment um which is is maybe the most critical of those things but um you know just just sort of uh couldn't have hoped for a better start um to the business. >> Okay. in in go to market in sales. I imagine that there's a ton of uh processes that you just want to make reliable, more efficient, all of that. And I'm sure you're executing on that. But I'm interested, has anything stuck out to you that's sort of like the Studio Gibli moment for this uh for this sector? Like, you know, image generators came out, it was like, yeah, you can make a picture of a horse or a cat, but then like there was this thing where it was like, oh, no one really knew that that was coming. and then all of a sudden it was like this delightful new experience and now you can like turn yourself into a cartoon if you want. Uh, is there is there some like net new process or like your customers when you see them use the product, you're like, "Oh, they're doing things a little bit differently. It's not just sending the email. It's not just the CRM management. It's not just all the other pieces. It's something that like, oh, this is uniquely enabled by AI." >> Yeah. Um, I think there there are three things that come to mind that differentiate Monaco uh relative to anything else in the market. And the third one is sort of the like >> it will shock us. It will shock us. >> The third one will shock you. This is good. >> It'll be the like jibly moment it that to use Kugan's language. Um the first two and I I won't go like super deep on these things. I I'll time box this to 30 or 40 seconds. The first two um we're we're an all-in-one. So we replace traditional or legacy CRM. These are your Salesforces, HubSpots, AIOS. Um we also replace all the disperate tools that integrate to those traditional CRM over APIs. Yeah. Uh and so we're an endto-end platform or an all-in-one maybe like the rippling version for go to market. So that's like the first category. Um that in and of itself isn't like the Jibli moment. Uh the second category is uh that we are AI native. Um you know just sort of definitionally we started let's call it post chat GBT. Um the way that we think about being AI native agents are the first line of defense. the things that historically speaking sales users like me, people in revops, SDRs, um that that those workflows that we were doing with manual or human labor, we now have agents doing. And you should think about the user of Monaco as having this like front row seat to all of the work that the agents are doing on their behalf. So that's number two. >> The third thing, and this one is like a little bit contrarian like Peterism, um and and it is maybe the thing that I think um we have a unique competitive advantage in. that's very difficult for any of our competitors to get right or even be able to do and that is you know there's this thing right now that's like the forward deployed a the forward deployed engineer the FDE is like the most valuable asset in deploying uh AI successfully across enterprise and you see these you know open AI and anthropic investing billions of dollars in these almost like Accenture style uh uh consultant type companies well we sort of invented this concept of the forward deployed AE. >> Okay. >> And every customer that we have is paired with a startup sales uh expert, somebody that has deep experience doing startup go to market. And you should think about a lot of our customers, these are seed and series A startups that one don't have a lot of experience in go to market, a lot of technical founders and technical early teams. And so this is a very complimentary skill set, but two just definitionally they have no experience working with the platform and agents that we have in Monaco. And so that buffer, that layer between the customer and the technology itself, that is our forward deployed AE, that is some of like the secret sauce for us in terms of making Monaco work better than any of the competitors that you try and just like deploy these agents and the technology in the wild without anybody making sure that you're successful. >> All-in-one compound startup rippling philosophy. Uh I imagine that eventually you'll get to a point if you're not there already where some big company will come to you and say ah but like we're not ripping out this thing and you have to build a connector. Do you have a strategy for that or is that a moment where someone comes to you and says like yeah we have this weird niche like you know B2B SAS product for just our industry that we need to keep around. Is your philosophy agents will connect or you'll just go and rebuild that? We have an open API read write API um ability to do clawed MCP um and so we will integrate and do integrate with third parties. Um >> examples would be like we have a granola integration, we have a Slack integration, we have a G Suite integration and and many more. Um we we don't today have native sort of traditional CRM integrations. And if you think about the category of sales technology, the market leader today is Salesforce. Yep. >> Um and Salesforce is a system of record. And then um you think about other system of record companies, there are some large players that exist in the space. The other type of sales technology company is a point solution. These are tools that integrate into the system of record. And if you think about the outcomes, the terminal values, the sort of market caps of these point solution type companies that they are less interesting to us to sort of be like uh I I think this world's word is politically correct now. We don't want to be the tallest [ __ ] uh we want to be the market leader in sales technology and in order to be able to do that we have to disrupt the uh system of record companies today like the sales forces of the world but the space will become much larger than it is today because we are not just taking the IT budget away from companies that today are spending on platforms like Salesforce we are taking the labor budget and so Monaco is far more expensive than the traditional competitors that exist in the space and It's because we're not a replacement for uh the traditional CRM, which we we're not just a replacement for the traditional CRM. We were a replacement for you hiring a bunch of people to do this for you. Sure. >> In a deeply integrated platform. >> Okay. Uh where can people go get go to get started? You're in public beta. >> Full. >> You're in public beta. Um GA in the next couple months. Uh I would love to come back. Yeah. So, uh that would be fun. We'll >> Who's the best sales rep? at Monaco selling the most. >> I guys, I can't do that. >> You can't pick a favorite. >> Isn't it Isn't it objective? Isn't it objective? >> There is an objective of truth. You can't leak it right now. They'll get poached. >> Bennett will be flying him out to Hawaii. >> Yeah. >> Comes to him at the Dolphins. >> Yeah. >> He'll do his little thing. >> We We don't have a worst sales rep, but I I should say that name if we did. >> Okay. >> We don't get No. Um this is a little this is maybe like philosophically against uh uh what I would recommend for folks. We're in the fortunate position that we are in just inundated in demand. We're still on team goals. The the whole team is like really working with one another just to try and manage the uh demand that we have and so we actually don't even yet to your point on like isn't it objective if we don't have a leaderboard it's just falling. >> So what you're saying is Mark Ben off has to buy the whole company. Got it. Uh, how has the the Billboard campaign gone? >> It's great. Uh, you know, I think these things we do, we do the launch videos and a bunch of the like, you know, launch posts and those sort of things that hopefully get amplified. We do the billboards there. Um, our billboard strategy right now, we're just doing like a dollar symbol and then monaco.com. It's a little provocative. Um, we have these big poker tournaments. Uh, and a whole bunch more. >> Who won the Who won the poker tournament? It was um the CEO of Synindoso. His name is Chris Rudigarp. >> Nice. Nice. Another sales. >> All these things. It's sort of like 1 + 1 plus 1 plus 1. It like equals 10. It's like the billboards compound the uh a poker tournament that compounds the post that compounds the trucks that are driving. Today we have a plane >> with a banner >> trailing Monaco behind it. >> This is blimp adjacent. We're huge fans of this. Uh anyway, thank you so much for coming on the show. >> Uh congratulations on all uh and always >> counting down the days till GI. >> Talk to you soon. Have a great day. >> You guys are the best. Thank you. Great to hang. >> Goodbye. >> Up next we have Kevin Hartz from Aar. He's the co-founder and general partner. >> He's a star. >> He is a star. Is that why he named it AAR? He's like I think of myself as a bit of a star. Kevin Harts, welcome to the show. How you doing? >> Hey guys. I'm doing great. Uh, so great to see the both of you. First time on the show. >> Welcome to the show. >> That's crazy. >> It is crazy. Yes. We've talked about so many we we've talked about so many of your investments and so many of the projects you worked on. >> Well, it's funny you say that because I'm I'm I'm sandwiched between um Sam in Monaco and uh Judgment Labs and we have a AAR has a small check in each one of those. So, he feels very very comfortable in this position. >> The man behind the curtain with a curtain behind him actually. But that's not we're not here to talk about Judgement Labs or or uh or Monaco. We're here to talk about AAR. Give us the latest news. What is the update with the fund? >> Well, we've uh we've just announced today that that we've raised our third fund. It's $450 million. >> Let's do it. >> Okay. So, seed fund $450 million. So, like one AI lab. Is that the plan? Or you're going to split this up between like two companies these days? is I mean valuations are high but what's the strategy? >> It's a good point. It would be you know if it was a a lab it would probably be just about one company. Um no we are we are sticking to our our knitting. Um we are generalists so we're looking at all different you know all different types of business businesses. uh certainly in this super cycle that we're having right now, it's driven by AI and the application layer of AI and we're investing um pretty aggressively in that space, but you know, our checks tend to be 3 to 5 million, although we we go higher up to 10 and so on. Now, certainly there's a Neolab that will raise a big round, but that's really in the 1%. We're still in this this core market. >> Yeah. Um where where are you fishing? where what lakes are stock these days? Are you fans of the mafias or the or the you know universities or the dropouts? Like there's so many different pools of entrepreneurial talent. Uh where are you finding success at seed? Yeah, that that's the right question is is how to source uh this talent, how to be in front of everyone else, how to meet these founders when they're still working in their gigs or still in college or in sometimes even high school. >> I I will say ages have declined on average, you know, like you're now seeing more and more founders that are teenagers. And you know, I like to think of it as having, you know, seen like, you know, we had Bill Gates and Steve Jobs in the '7s when they were teenagers. They started their company and that was such an anomaly. >> And you fast forward to today and it's um it it's really dramatically changed. So to answer your question, I think of uh folks like Cy Cory Levy at ZFellows who's uh just terrific at finding uh dropouts and you know more and more they're high school dropouts as much as they are college dropouts. >> Yeah, it's remarkable when you meet a founder and it's like Corey did the deal like three years ago and you're like just getting started. He >> How are you thinking about incubations with this new vehicle? Is that going to be opportunistic? Do you do you expect to have or do you expect to have kind of a certain amount that you're aiming for? What's the philosophy? >> Well, incubations are I mean I I don't like the term incubation. It kind of sounds like um this like kind of a sort of contrived venture. We like to find founders um and spend time with them and and help them kind of develop ideas. Uh and we've done this a couple times. Uh we did this with a mortgage AI business um that's run by a founder named Michael White who came out of um block and um that business has grown substantially and we've done that very recently um with a company called Sauron which is a physical security business. So um is starting in the high end of alarm systems or or monitoring systems that is really just a bet on you know you see all this stuff happening in in autonomy um autonomous cars and robotics and a lot of money is invested in that space and when we see that happen you know that usually means there's um like dropping uh price of LAR uh cheaper sensors and the like and you know that means an opportunity in this case in the home security space. >> Wait, is there an application for LAR and home security that I'm not aware of? >> Absolutely. You um if you have sensors around LAR sensors, you can know exact distances. >> Um you can track objects more effectively in in different weather. Okay. um and that doesn't become available when they're, you know, so expensive, but it absolutely um becomes a very meaningful aid to understanding a scene when the price drops. >> That's fascinating. Um you're obviously have an incredible track record in Silicon Valley. Um, but I'd love to know about the mood in among LPs around a $450 million seed fund because we talked to a lot of the mega funds and then we'll talk to uh solo GPS. We had one on the show last week that raised a $50 million fund and I'm wondering about uh are LPs looking for a particular strategy with that size of fund? What's the appetite? like how do you talk about like where you're positioning for the long term? Just any of the dynamics around that particular fund size at this particular time in the market? >> Yeah, great question. It it was a step up. Our first two funds were about 300 million each and we went up to 450, but we do have five of us on the investment team and we're expanding the team. So if you look at you know kind of divide the amount of capital by >> um the number of those putting that capital work over the period of time over a couple years we've been successful and you know our first two funds are in top 5% um you know kind of category. Thank you. I've got a I'm I'm a venture capitalist so I I have to brag a little bit. But um you know in we've been very good at sharpshooting like meaning like we haven't plowed money and we've really waited for the right companies and spent the right amount of time with these companies and helping them grow. You know it's kind of expressed in like we have an incredibly high conversion of seed to series A which you know if you would imagine like typically most companies don't even make it past the seed stage the zero to one phase. Um and and so you know we don't want to disassemble our model by spraying capital out there. We think that's very different from the multi-stages that have almost this incentive you know with the with the fees against um very large capital bases. Uh we we we're very uh opposite of that. How do you uh how do you how do you stay collaborative or is are there are your elbows getting sharper with this fund? I mean, we have a we have a mutual friend who has like a similar size uh seed fund. I know you guys have collaborated a ton on deals in the past, but uh I know uh you guys are also both very competitive and want to put up, you know, top funds and I'm sure it can get uh you know, tempting at certain points of hey, I could get 20% ownership in this company and I don't necessarily want my my buddy, you know, it doesn't necessarily benefit my fund to to give 10% to someone even if they're a great friend and could also help the company. Yeah, it it's challenging. Our partner got him. His wife is Christina over at the GP over at chemistry >> and um you know if if he steal if he wins a deal over her you know like I could only imagine what would happen. Uh so you know like it it's it's tricky but it is you know we see a lot of new funds. I spend a lot of time backing new funds and helping, you know, these fund managers kind of grow and then they get to a point where you can no longer kind of even cole deals. The funds get so big. So, you know, and we're going into this like massive super cycle of an incredible amount of um you know, fast-paced and a lot of capital invested. So it's, you know, I I want to say that it's it's always on our shoulders to find, you know, the founders early enough and be the first ones there and just not be in those situations. >> How are you thinking about uh services as a software, the AI economy expanding beyond software and IT spend? I mean, Sam Blonde was just talking us talking us talking to us about like the forward deployed account executive and uh we talked to Long Lake about buying companies that are heavily serviceoriented and infusing them with AI and I'm just wondering if there's going to be a boom in denovo companies that are more services sector focused and what you're seeing in that category right now. >> Yeah. Well, you know, you really have to turn towards uh Palanteer and just give them a nod because this Ford deploy engineer thing back in two 2004 or five, you know, was was like universally, >> you know, hated by by the world and the investors and so on and they really gave us 20 years of a look at how to, you know, make that incredibly effective. And generally though I think that it's in the early stages that this kind of custom work is is done. And you know that that may lead to kind of automating things over time. Um and then the flip side that you know to to critique it would be simply that you know if you look in other kind of boom eras the consulting services really did well when the markets pulled back they were hit almost the hardest. So, you know, there's there's uh certainly a trade-off there, but to get new services into these old markets, you know, we're just going to have to get our hands dirty. Um, I don't know, but, you know, I'm old, so I look at the services industry as this like really tough thing we want to replace by software. >> It's tough. Uh, second best city to invest in. I assume you'd say S. >> It has to be It has to be New York. >> New York. >> Yeah. I I've been very impressed uh with New York. We have a number of companies there from company called WAP in the creator services side >> to Antioch which is um which is physical AI robotic uh infrastructure. >> Um and and I'm just um amazed every day of it. But I guess it makes sense that you're able to pull talent from the northeast out of college and >> it's still a big financial center. There's a lot going on. So, it very much in my mind is a number two. Um, nothing's even close. Not Austin or anything else. >> Yeah, that makes sense. >> How how often do you find yourself backing teams uh that are building things that you know are on that or you you expect could be on the road map of the labs? Because in certain instances, even if the labs care about a certain part of the application stack, that doesn't mean you just shouldn't still back a team, right? it's just a new version of what if you know Google does this or or you know something along those lines. >> You know I I I want to say um that the startups you've always got to like um hope and pray and expect that the startups are going to win. Uh this is the big question of of our era is you know do we go ahead and build all these um put all these apps forward or build all these applications only to be steamrolled um you know by the big labs. I, you know, we saw that happen in the 90s. Um, you know, Bill Gates and Microsoft would watch and see what people would build on, um, >> you know, on on the on Windows and then they build their own disc compressor and give it away for free. Um, so, you know, this is like a a pattern that are these monopolists do um, you know, in this case and and um, you know, our our companies need to show that they can stand on their own two legs. you know, we're we're in businesses like Decagon, which is >> AI customer service. It is the best product in the market and they have to stay the best. >> Um, and we know they can do it. >> Yeah, that makes sense. Well, thank you so much for coming on the show. Congratulations in the round and we have that you got some more great. >> Yeah, great to see you. >> Have a great rest of your day. We'll talk to you soon. Goodbye. Up next, we have Alex Shawn from Judgment Labs, an AAR portfolio company apparently, but here to talk about a new round from Lightseed Venture Partners. Alex, how are you doing? >> Doing great, guys. Thanks so much for having me on board. Kevin's great also. >> Nice of him for for uh to open for you. >> Yeah, exactly. >> Yeah, some nice guys over here. >> He only gave us a little bit. So, tell us a little bit about yourself and the company. >> Yeah, happy to. And before I do that, we got a little bit of a crowd here, which I'll take you guys out to come and be with us >> in person here out in the office and financial history. >> Whoa. Let's go. >> Great to have you here with us financial district and the rest of SF. But thanks for having me. >> Amazing. Uh, explain the orange suits. Yeah, >> you know, we are judgment orange. You know, it's the color of the company and we like to be proud about that. And so, um, you know, we wear it loud and proud. You'll catch us running the beta breakers race in SF, hopefully winning it with the whole team. So, be on the lookout for the orange, too. >> It's still, uh, such a good strategy to pick a color that doesn't have a loud startup already kind of anchored around it and just own it. >> Good luck going up against Facebook blue or Coinbase blue. uh much easier to stand out with a funny color yellow or >> anyways >> please introduce the company tell us uh about the progress the news everything >> thanks a lot guys you know judgment labs is the platform for improving long horizon agents from production data we sort of started the company with this thought process that these autonomous long horizon agents are going to consume the vast vast majority of the economic value that AI is set to create across the next decades in the economy And you know, we're already seeing the first sets of those things happening. Developer productivity is skyrocketing at rates that I don't think anyone, including myself coming from a research background, could have anticipated. And yet that sort of progress is also barbelled in the sense that in many industries we don't see the same progress on these long horizon agents. And so typically that's, you know, to do with a lot how verifiable or semi-verifiable the outcomes are and therefore how easy it is to train those agents. But you know, we believe that regardless of what agents you're building, the single source of truth to improve them to get to that point is going to be production data. You know, during the runtime of the agents, these long horizon agents emit so much production data ranging from their reasoning tokens to the tools they call to the retries and their memory and all the things more that are going to come out on these agents. And so that data just forms the cleanest record of how those agents behave with customers, software and their broader environments. And when you know you process it, right, we can sort of find out what users actually ask for and struggle with, which failures actually happen in production and where agents actually find breakthroughs to solutions that we could have never predicted. And so therefore, the goal for us as developers and sort of people that are going to bring about this agent revolution is to operationalize that production data for all these agent companies out there to create these flywheels that convert distribution advantages of, you know, people like Sam um into their product modes that are going to last them for a long time. And so we've been very lucky to uh partner with a lot of people across the journey of the company. Coming out of stealth today has been an amazing journey. and you know Nova backing us at the preede all the way to Lightseed backing us at the seed and Lightseed doubling down to co-lead the series A with Green Oaks. >> What's the sweet spot customer look like right now? So we love partnering with people who are building you know agent native companies and focusing on long horizon agents and so I can break down >> startups like like scaleups like series B companies like what's the >> primarily agent native startups in that range of like series A to series B is our sweet spot. We focus on these companies that produce a lot of production data and want to figure out how to use it. >> And and is it particularly focused on knowledge work and sort of like the next iteration of AI agents or are you doing coding work as well or both? >> Definitely a lot of coding work. You know, we actually serve agents across the stack. Sam and his company Monaco are customers of ours and so different vertical agents require different versions of improvement. And so we work across the stack, but mainly on these new age long horizon agents that sort of autonomously do tasks end to end. >> Yeah. What what what uh what are you helping with specifically? Because I imagine that if Monaco builds an AI SDR and an agent that goes and runs around and figures out everything about a customer and builds scripts and battle cards and all the stuff that they do, uh all of that's logged. They have it somewhere. Uh where's your value at? Like why are they a customer? like are you helping them actually change production designs or is it more about organizing and unifying data for them to go improve their own products? >> Great question. Mostly the latter. So if you think about in practice improving those agents is really challenging for teams and so like most teams with all those logs that you're saying that they store have to sort of manually comb over these tables and tables of data. And so whenever they find a failure case, the question often the case is not just like is this a problem, but it's you know how frequent does this happen? Are our most important customers affected? What task types are most affected? And so being able to chop up and parse this data using other agents in fact to sort of pinpoint the exact failure modes and therefore the exact part of you know an agent framework or an agent harness is exactly what we help these companies do. >> Interesting. >> Uh next breakout agent category. coding. >> Yeah, >> you know, we tend to believe here that at judgment we think that the domains that are going to get solved first are proportional to those that are most verifiable. Meaning that if you can check the answer, you know, the the this is the smallest feedback loop. Exactly. So, I would say that a lot of these domains are going to be the ones that are quantitative. You know, these are things like, you know, um you know, the coding agents are easy. You can imagine the site reliability and ticket resolution agents next and then the ones that do math. But, you know, we are increasingly seeing a lot of progress in non-verifiable domains as well. Stuff that you would traditionally think is like not very easy to quantitatively measure such as like finance and legal and even sales to say what what Sam's agents are doing are incredibly, you know, fast in terms of how the teams have been able to use their data to improve their agents. >> Tax and accounting seems pretty verifiable and like closed loop versus, you know, like I don't know, long horizon. How did this cancer drug respond to someone over a decade? Like it's very hard to close that loop. Uh well, congratulations on all the progress. Jordy, any other questions? >> This was great. >> Thank you so much for coming on the show. Go Orange. We'll talk to you soon. >> I'm sure you'll be back on soon. Congrats to the whole team. >> Have a good day. >> Cheers. >> Up next, we have Glenn Wise from Cinder. He's the co-founder and CEO. Good nominee, determinism. We got a wise man in the waiting room and here he is. How you doing, Glenn? >> What's going on, guys? Good. >> Welcome to the show. Thank you so much for stopping by on such a big day. Uh, introduce yourself. Introduce the company. Tell us the news. >> Yeah. Uh, I'm Glenn, the founder, CEO of Cinder. Uh, we just raised 41 million. Announcing it today. >> Whoa, whoa, whoa. >> Cool guy. >> Good news. >> Right to it. >> Yeah. >> Fantastic. >> Radical Ventures. I got a buddy Rob Taves over there. >> Oh, yeah. They're great guys over there. Really great team. >> Um, but our our focus is helping companies stop uh all of the AI powered abuse that's happening across the internet today. Okay. >> Um, >> yeah. What does that mean? Because there's like cyber bullying and like mean comments on YouTube videos or live streams and then there's uh like spam and hacking and cyber attacks and all sorts of crazy stuff. >> Yeah. Uh, and honestly, it means the entire gambit of threats. >> Okay. Um, and that's really I think like what gets missed in this conversation, which is the fact that like there's small, right? There's small incidents such as bullying. There's large incidents such as like state sponsored espionage. >> Sure. >> Um, but companies need to respond to all of these. >> Mhm. >> And uh we've never before seen kind of the scale of threats that we have today. Um, and this was a problem before Genai, but obviously Genai has made this exponentially worse. >> Sure. So, uh, it says customers include OpenAI, Spotify, Deepop, Black Forest Labs. I'd love to know about how much of this is happening like internal to a particular product like, uh, someone is effectively doing internet graffiti on like the Spotify comments. We get comments on our Spotify sometimes. They're usually pretty positive, but I could imagine a state sponsored actor wanting to take us down and writing a bunch of mean comments versus, and that would be something where you would go to Spotify and say, "I can solve your problem internal to your product versus there's a there's a misinformation campaign that's happening on X or Instagram about Spotify and you're notifying them, like what's the trade-off there?" >> Yeah, that's a really good distinction. So, we sell directly to the customers themselves. Okay. So they can combat if there's some horribly racist comment. >> Sure. >> Right. That shouldn't be on there. Okay. Um so they can combat taking that off. And so how the platform actually works >> is that our customers set what policies they care about. >> So they say, "Hey, we really care about uh some of the really big ones now, AI generated uh NCI, so like AI generated deep fake porn, right? That's a huge one, a huge issue that a bunch of people see. um obviously anything child safety related uh anything any egregious uh hate speech and and things like that uh they are able to set these policies on our platform and then uh we use AI to detect and mitigate it at whatever scale the platform is operating at. >> Yeah. Um how uh what has it been like ramping up to some of these bigger customers? I imagine that uh if you get the fire hose of like Spotify content that's a lot. Was that a challenge? Like how did you solve that? Obviously there's a lot of off the offtheshelf tools, but like how big is the company at this point? How are you able to take on those clients? >> Yeah, I mean we were really lucky in the sense that the whole team uh the whole founding team came from Meta. >> Um and so like we saw >> Yeah, we and prior to that we were at the US government. Um >> Okay. >> So we've seen we've seen kind of what harm at scale looks like. Yeah. Uh and um and obviously that's like kind of like an infrastructure challenge, right, that we that we deal with. Um but inevitably it is um one like actually be able to process data as quickly as possible. That's a big one, right? So how can we make a decision as fast as possible of whether or not something violates your policies? There's a bunch of techniques there. Um as well as just like being able to handle that scale, right? Uh we have some customers that have a really large Gen Z audience that all log in at the same time. Um so that adds some really great kind of distributed computing challenges that that the team is working on. Um but I don't know that's all part of the fun of of building this. >> Is there is there something about this problem that makes companies want to outsource this function? Because I'm assuming at Meta, if you were working on this problem at Meta, you were working on internal tooling and platforms at a certain scale, maybe they end up wanting to do this themselves, but is there uh themselves, but is there a certain part of this problem that makes it particularly suited for, you know, having a partner like Cinder? >> Yeah, I think there's a few. I think primarily it's taking the human expertise and really understanding the policy and understanding how to mitigate that policy, right? Like every customer of ours can't be an expert in every single issue that they might face. Uh and so that right there means that they need to bring people on. Um and yeah, Facebook, I was on the threat intelligence team there. Uh they have an amazing threat intel capability, right? They're also Facebook, right? so they can spend uh on building out that thread intel capability, but not everyone can or should have to do that. Um so that's a big piece and another one that we've been seeing more and more often actually is uh the the third party credibility of going with a company that's also, you know, in truly a set of experts, right? And so uh you're not grading your own homework when you're trying to defend your platform. You have someone else that can bring that expertise in and do that for you. Totally. >> How uh how are you thinking about like the actual uh model choice or just scaling because I imagine that uh there's so many of these like toos violations. you know, you just ask like, is this a of toos violation or threat of violence or something that's, you know, doesn't conform uh to any of like the frontier models and you're going to get a very accurate result, but that's going to be slow and probably expensive if you're running it like over every single Spotify comment or every single upload to the platform. Uh, and then you can go open source, cheaper models, faster models. You can also try and run models on AS6 or more advanced chips like Cerebrus is in the news this week because the IPO but there's obviously other providers but how have you thought about the infrastructure tradeoffs and as you scale the service >> the thing that is most important for our customers right I talked about policy yeah >> it's really eval uh ground truth data >> okay >> and so once our customers ers have within our platform set what does true look like, right? What does an actual violation look like? Because as you can imagine, these violations are incredibly nuanced. >> Yeah. >> Um, and it really depends on what's the platform, where they're based, how old are their users. >> Uh, a really classic example, right, is like a gaming company could have two different games. >> One that is a first-person shooter for adults. The other one that's a game for children. >> Sure. >> Obviously, they they're going to define like a threat of violence very differently. >> Oh, sure. Even within the company. Right. And so you need to be able to set ground truth uh and really set these evals. So then from there you run evals on these models. Um and so and it kind of depends on are you prioritiz are you prioritizing you know costs or latency or accuracy. >> Um those are basically the three trade-offs that we see. >> And uh but you can get really great results now especially around fine-tuning some of these open source models. >> Yeah. But what's funny is that uh obviously these are like these models themselves are trained to not be able to produce this content and so you do start hitting limitations with these foundation models. >> Yeah. >> Um and so you can do techniques like model obliteration where you can actually remove guardrails and host them yourself. You can do technique where you can do kind of traditional uh classification kind again depending on what the policy area is. But that's why you need to >> I've heard enough. Give him a billion dollar cluster. >> Well, speaking of cluster, has there been any demand for on-rem? We were talking to David Bazooki from Roblox about this and I was sort of saying, you know, he has a younger audience obviously on the platform and there's been a lot of push back about uh the communication that happens between adults and and children on the platform. And I was saying like it feels like although this is a huge problem that obviously needs a lot of attention like the technology is getting better and better to the point where you should be able to screen every single chat message that flows through the Roblox platform in real time with a very very advanced LLM. Uh but Roblox runs their own infrastructure. Is there an API call? And I could imagine a situation where Roblox wants to uh run this like deeper in their stack. And is that is that something that's on your road map or you've heard customer pull from or do you think it will never be an issue? >> Uh yeah, would love an intro. I really appreciate that. Okay. Um, but uh uh yeah, I I think for us um because of these the proliferation of these foundation models, our customers have gotten really comfortable on utilizing, you know, already utilizing OpenAI >> because they're already pulling stuff from AWS or GCP or Azure and they already have like a fabric they can pull things into. >> Exactly. and and we uh because of our sort of security paranoia background uh we've invested a lot in we even have run a full single tenency architecture um that our our customers love because you know they have uh they know all their data is theirs um and so you know customers have gotten more and more comfortable but I could see the pendulum swinging especially with open source models I could see it going the other way where they want to selfhost host Cinder in which case you know it's built in a way now they can. >> Yeah, that'd be really cool. Uh, last question. Get me up to speed on your work with Black Forest Labs because uh I believe that that's a more unique uh relationship. They do benchmarking. It seems like they've shared some data, but can you get me up to speed on on your work there? >> Yeah. Um, we've been doing some really exciting red teaming work with these models. >> Uh, you know, I think it's a really important job that these models are able to be tested before they're released, obviously, right? because once they're released in the wild, then they are subject to the rest of the world. Um, and so that's a lot of the work that we do as well, right, is allow companies to set up those guardrails, but also allow them to not only test the guardrails, but test the models themselves. Um, and that leads to just dramatically safer outcomes when they release these models um out into the world. And I think that we're going to see standards coming out of the UK, the EU, the US on expectations around red teaming. Um, especially as these models become more and more powerful and the attacks become more sophisticated. >> Yeah. Yeah. We're already seeing with that uh with the uh who who was it? Uh it wasn't Meta, but it was Google, Microsoft, and maybe XAI joined OpenAI Anthropic in you know delivering models to the government earlier to test and this could be a logical place to test as well. Um, but congratulations on the progress. Thank you so much. >> Fantastic to meet you. Thank you for doing this work. And the chat is uh concerned uh by your co-workers posture in the back there in the blue. >> We're going to get some ergonomic experts in here. >> Yeah. Give him give him our best. >> Well, I got I got to tighten up the shirt. >> No, no, it's good. He's locked in. That's actually a high performance posture. >> That is that is, >> you know, and the window open. You're getting some fresh air. CO2 levels probably not a problem. >> Doing some critical work. >> Anyway, thank you so much for coming on the show. >> Great to meet you, Glenn. >> Great to meet you. We'll talk to you soon. >> Uh, bunch of updates really quickly. First, the chat has given a name to my next project. It's the diesel the diesel refinery company of Malibu. Get ready, Jordy. We're going to be pumping diesel fumes all over Malibu. It's going to be a boom time. Uh, also got a swatch. Yeah. >> Yeah. Pull it up. So, we talked about the Swatch AP collab. The Swatch Adomar Pig Royal Pop collaboration. Well, the final design or something close to the final design has finally hit the timeline. And we can pull up this image because it's not a a wrist watch. It's more of a pocket watch. It it goes on a necklace, I guess, and it doesn't >> It's more of a charm. Like I see people tying this to like uh >> I think this this tells me that the all of the fears that this would be confused with a stainless steel Royal Oak uh were probably misplaced. What do you think, Tyler? >> Yeah. Well, okay. So, it's based off like the Swatch Pop, right? So, this is just like I'm talking about like this is a long time ago they made the Swatch Pop, which is like this little It is a watch, but you can pop it in and out into a necklace into like a little charm or onto like an actual bracelet. a stainless steel. >> There might be like we haven't seen anyone actually buy this yet. It's just like been promo videos. So, there may actually still be bracelets that you can put it into a watch form. That's >> true. >> But so far, everyone is up in arms. >> Platinum platinum uh platinum wrist. >> Yeah, I'm trying to find pictures of the watch maybe. >> I don't know. Uh well, there's a release video uh that we do think is real. I think we verified this with Quaid over at Bezel. Uh, and it's uh, it's showing how they're building it, how they're putting it together, some cinematic music, and they're making them. These are mass manufactured. They're showing them being mass manufactured, testing them. Uh, but they come in all sorts of colors, and uh, we'll be see will be interesting to see what happens. Uh, this does not seem like uh, an it's so over moment for the AP Royal Oak market. It seems like they have over for the Bears. >> He Yeah, it's so over for the Bears. Everyone that sold yesterday needs to buy them back potentially. >> Yeah. >> Uh I I I think it's working to the degree that I see that and I'm like I I kind of want one of those. >> Yeah. It's like a cute I don't know. It's like a It just fits a different >> I I have a I have a a a guess as to what the hype beast will do. John, do you know what they're going to do? >> What? >> They're going to take those royal pops and they're going to use them >> to tie their shoes. They're going to use them as shoelaces. >> So, they'll have like, you know, a bunch of swap swatch pops hanging off of, you know, some some like Nike Dunks or something. >> I could see that. I could see that. But why not just have the full stainless steel Royal Oak hanging off your shoes? There's levels to the game. >> Yeah. >> Uh well, true. >> Uh GameStop is going to need to level up if they want to successfully take over eBay because eBay has rejected GameStop's $55 billion takeover bid. The online marketplace, that's eBay, called the cash and stock proposal, quote, neither credible nor attractive. Uh, the New York Times has a story here. The online marketplace rejected the proposal. Uh, GameStop announced a proposal last week. We talked to Ryan Cohen on the show about this. Uh, to combine with eBay, which is a company nearly four times its size. The offer has confounded much of Wall Street in part over questions of how the company would afford it. GameStop's chief executive, Ryan Cohen, initially declined to elaborate on how he would finance the deal, and much of Wall Street remains skeptical about the mechanics of the deal. eBay has officially turned down its lopsided marriage proposal, said Don Bilson, head of event-driven research. Uh, this news should surprise no one since the odds it would accept GameStop's brash offer were infantessimally remote. Um, in a letter to GameStop, eBay's chairman Paul Pressler listed several concerns with the bid following a review of the offer with legal and financial adviserss. The concerns include uncertainty about how it would be paid for and the amount of debt the deal would add to the company. Uh, a cornerstone of the deal was a letter that GameStop secured from investment bank TD Bank, uh, saying it was highly confident it would raise 20 billion to fund the offer. That letter which is not binding stated that the confidence rested partly on the assumption that the combined company would be investment grade according to at least two of the three major credit credit rating agencies. So >> what does Ryan say as he responded? >> I did I was confused because I saw a post by Paul Brham and I I thought Paul that's the chairman of eBay. No, it's a different uh Paul. And this Paul is a major GameStop supporter, I believe, uh who said, "Ryan, we got your unsolicited. Let me translate the eBay letter. Uh we got your unsolicited bid. Our board thoroughly reviewed it. We're rejecting it. Not because the math doesn't work, not because we're highly confident, because the high and so this person is uh very uh you know, excited about this deal. I think uh anyway, there is another media deal going on right now. Byron Allen is buying BuzzFeed uh investing $120 million in the digital media company and will become the CEO. Uh this is a very interesting story because uh I don't know how familiar you are or the audience is with Byron Allen, but uh he had a fascinating career uh where he was originally he jumped straight into late night talk show host. Uh he was he he became a late night talk show host and then eventually had this very interesting business where he would buy >> zero to yap >> basically he would buy the rights to broadcast on TV in certain slots in certain hours and then he would independently go sell advertising against the programming that he uh would put together. And so the money would flow from the advertiser to him and then he would pay to air his content on traditional TV. >> Interesting. Very interesting. >> So he was on the hook for the air time basically, but any incre any any difference was >> but he was paying for the air time and then he eventually bought the weather channel and a number of other uh uh sort of traditional over the over the air uh TV stations and sort of grew. He's also will be taking over the time slot from I believe Steven Colbear uh post that changeover with a show called uh uh what is it? Comics Unleashed. It's a roundt conversation. It's sort of just a podcast with a bunch of comics. And when I first saw it, I was like that's so weird that they're replacing Steven Coar with a show about comic books. Uh but it's not. It's a bunch of comedians. Uh, and Theo Von's been on before and uh, it'll be interesting to see how that how that show does in that slot. I think the cost structure of that show will be much much lower. I don't think it's a live band. It's sort of just a studio with a round table and a couple chairs. And so I imagine that the economic equation works much better. But that's not what is in the news today. What's in the news today is that he is buying BuzzFeed uh, and will become the CEO of BuzzFeed. BuzzFeed had sort of changed hands a few times. Uh, and now it is in the hands of Byron Allen. Uh, Jonah Peri, who co-founded BuzzFeed 15 years ago or so, uh, will step will step down as chief executive, but he will still serve as its president of AI. And if you love reading AI, listicles, you're probably going to get a lot more of them because I think that's part of the plan. But let's read through what the New York Times wrote about Byron Allen's acquisition of BuzzFeed. It's time for list of goals to come back. >> Yes. Here are five key things to know about Byron Allen buying BuzzFeed. Number four will shock you. Uh Byron Allen, the comedian turned entrepreneur, is buying a controlling stake in BuzzFeed, the digital media company that pioneered virality on the internet. Pioneered virality on the internet. That's a bold claim. I think that's probably true, but uh you know uh David after dentist would like a word. Uh Allen Family Digital, a company associated with Mr. Allen, will pay $120 million for 52% stake. And this is a huge jump from where BuzzFeed was trading. I think BuzzFeed was trading around like 40 to 80 million market cap or something. So it's like almost a 3x premium. And we can get into the share price in a minute. But um Mr. Allen will become the CEO. Jonah Petty will become the president of artificial intelligence. Byron Allen pictured there is 65 years old. Uh he will remain CEO of Allen Media Group, a news and entertainment company that owns local TV stations, as I mentioned, The Weather Channel and a TV production arm. Uh he also produces Comics Unleashed, not about comic books, but about comedians, uh which will replace Steven Coar's The Late Show on CBS at the end of the month. Um and uh where I'm did I lose this? I don't know. But it's an interesting story. Yeah, I'm I'm sure there will be more developments on what happens with BuzzFeed uh as >> I'm so curious what the plan is. Uh they had Q1 revenue of about $31 million, 31.6 million to be precise and a net loss of roughly 15 million. Revenue was down 12.4% yearover-year. >> Yeah. >> So losing a bunch of money, revenue shrinking. I don't think the brand is I don't think it's a good good brand at this point. Certainly has name recognition, but I don't know anybody that wakes up in the morning >> and homeage says, >> "Yeah, I got to know what BuzzFeed is talking about today." Granted, there's probably a lot of people and Byron uh is uh a a media tycoon. Yeah. So >> now that's why I'm curious like what is what's the play here, right? I think you see an opportunity. >> If you if you had $120 million to just build a new media property, >> yeah, >> you wonder, hey, uh what what could you actually do? So, is it is there some massive audience that's still sneakily more engaged? Uh maybe he sees a pivot to prediction markets. >> Oh, I don't know. >> You know, I don't know. Like >> a cover of BuzzFeed today. Let's check it out. Buzzfeed.com 50. Why would you put that thing in writing photos that prove people are the worst? That's the number one trending article on BuzzFeed. Uh 41 celebs people used to love and now can't even stand to look at 22. They really go they love the listical and they're getting longer. I was joking about five key reasons that would be I would never make the cut at modern Buzzfeed. 22 stories about boy moms and their sons that will make you cringe into oblivion. I don't want to read that. 32 people confessed the secrets they've been hiding and these would destroy multiple people if they ever came out. And there are reactions. I did I was a fan of uh I was never a fan of the Buzzfeed quizzes, but I was a fan >> Yeah, there's an arcade, so maybe there's a gaming play. They also had uh a bunch of different like CPG spin-offs at various points. I think they got into physical goods. Uh but a lot of the talent did uh did go off and venture on their own. Like the Try Guys, I think famously left BuzzFeed and uh and started a YouTube channel and and uh that there was always like a little bit of a talent management uh not always perfectly aligned. Anyway, uh >> we have the perfect guy to ask. >> We have the I don't know who's going to comment on any of this, but we can certainly try and ask him about it. Uh because we have Roger Lynch, the CEO of Kai Nast with us here in the TBP Ultra. >> Roger, great to see you again. How you doing? >> I'm all right. >> Uh for those I mean we were hanging out last week, but for those who don't know, uh uh introduce yourself. Let's go a little bit back in time. Take us on your journey and then we can get into all the hot topics in media. >> Sure. Well, um yeah, I'm been the CEO of Cutting House for seven years, but prior to that, I spent my whole career really in technology. >> Yeah. and primarily a fantastic guitarist. >> Thank you very much. That was my life's ambition. >> That was an incredible performance. Uh it's a little bit of just lore, I guess, but uh we we we can get into hobbies and and things outside business, but uh yeah, take us back. What was the first job in media? How did you get to where you were? >> First job in media? >> Yeah, maybe that's a good place to start. >> Well, I mean, it depends on how you define media really. I spent my career at the intersection of technology and media. >> Sure. So, the first company that I ran was a broadband business. It was one of the first broadband businesses in Europe, uh, going back to 1999. And >> literally, one of the first things we did is we did a deal with the NFL to stream live NFL games in 1999. >> That's crazy. >> Where was how much how much demand was there for NFL in Europe at that time? >> Well, the reason the NFL was interested in it, um, this is back when Paul Tyleu was the commissioner. he came over to announce this, >> you know, crazy idea that we had >> um was they were trying to build the NFL in Europe and they had >> they're like, I hear people love football over there. Why aren't we why aren't we making money? >> Why isn't it our football? Um they had I think there was a team called the Amsterdam Admirals at the time. >> Um there's a European football league they were trying to promote. >> And uh you know broadband was a really interesting technology and I was really >> excited to see how it could be used to change how people consume content. That's why we did that that deal. And then I started an IPV company and first video on demand IP TV and then >> uh Sling TV, streaming TV. So always sort of at the intersection of technology and meteor content. >> Uh then I ran Pandora, the first company I ran that I didn't start. >> I loved Pandora. >> Yeah, Pandora. Pandora is truly when I think of magical When I think of magical >> Yeah. >> When I think of magical technology experiences in my childhood, I think of Pandora. I think of being in my with my dad. We'd be like playing pool obscure songs on Pandora is amazing. Was there some sort of opportunity with Pandora around treating it like a radio station? because it feels like there was some sort of licensing deal on the back end that was not the same as Spotify or iTunes store at the time where >> yeah the trade-off I remember I must have been I must have been intuitively at the time I was like okay this is a fair trade-off like I'm used to going to iTunes and having to pay 99 cents >> or I can just kind of like roll the dice maybe I'll get my maybe I'll get my favorite song on Pandora so I found myself on Pandora a lot and >> Pandora took advantage of um some rights that allowed them compulsory rights allowed them to >> stream all of that content and uh but you know one of the trade-offs was you couldn't choose the song >> and so they did launch a subscription this long before I joined >> uh subscription service but we're late for that game they were quite late for that game by that time Spotify already had a very strong presence and some of the other big tech companies were getting into it >> but uh you you mentioned AI I mean to me one of the key things with Pandora was the way it combined sort of human taste with AI. So we had a team of musicologists and one of the you know you mentioned you I've been a guitar player all my life. One of the best parts about that job is they were all fantastic musicians. >> So we do these company events and we'd play all the time and these guys were so and they were mostly men were so good. Yeah. But then we had the data scientists also and they would take the work that the musicologists did and create their machine learning algorithms around that and each of the algorithms they had I can't remember now 90 or so algorithms each one get tuned for every individual listener >> so it' be weighted a little bit more Jordy likes this John's like this and uh and so it creates a personalized experience and and to me >> you know I I still listen to Pandora I also listen to Spotify but when I want something just to put something on and let it play I'll go to Pandora because I think those algorithms still outperform. >> Yeah. And we I mean we've talked to this the the new coco of Spotify, but uh like the that AIdriven feature, the promptable playlist is just coming to Spotify like this year. And I'm sure it's souped up and powerful and stuff, but it is it is remarkable how long that like internet radio like lasted. These things have long these things have long lives. I'm wondering about your view on durability in media generally. It feels like anytime that there's some platform shift, there's endless think pieces about legacy media is dead, linear TV is dead, this is dead. Everyone loves to talk about that. But in your experience, how does how does the media industry actually change as technology arrives? You know, the media industry is has a history of not changing quickly enough. >> And you can start with the music industry. You know, music recorded music industry peaked in 1999 and then, you know, Napster >> and that's sales revenue. >> Yeah. And recorded recorded uh recorded music industry. We we found out >> like last week or the week before that uh vinyl record sales are like something like 10% of streaming revenue which sounds >> so vinyl records. So that's an interesting trend to talk about. But but what the music industry did or didn't do is and this is one of the big mistakes and you know like most lessons that you learn you learn the biggest lessons from your mistakes. What the music industry didn't do is look at how their customers were behaving and say, "Okay, let me craft my business around that." >> They said, "No, I don't like that behavior. I'm going to change the behavior. Let me sue these teenagers in Iowa who are downloading music or sue the ISPs or their parents or whatever so I can change the behavior back because I really like it when they buy CDs. That's really good for my business." >> That was disastrous for the industry. So finally once they had you know embraced you know downloads and then streaming it started growing again. It's only just gotten back to the size it was in 1999 >> you know 27 years later >> um >> there's more people and people still like music just as much as they did before but they fought it for for far too long and uh and it's it's a mistake. Vinyl records have grown every year for the last 18 years and sales of vinyl records and it was it used to be people my age buying vinyl records and collecting them. Now there is many people in their 20s buying them as there are people in their 50s or 60s buying them. >> A lot of people in their 20s don't even own a record player. They buy the vinyl records. >> There's an interesting trend that we and we see it a bit in our industry too like young people buying physical magazines. >> Y >> it's like why? Well I think it's a search for authenticity. I think when you have so much >> I got the paper right here >> digital content that is in your pocket and it's all free or free to consume um it becomes less valuable and and maybe less authentic to you. >> And so >> yeah, and there's there's something that's always been missing from like part of the the experience of being a music fan to never actually go and trade your dollars. Like I think people do like to vote with their dollars and express their interest and actually have this physical embodiment of their of their taste. >> Well, they're doing it with live music now. That's where the money has gone. The money is, you know, >> really moved to to live. It used to be, you know, in the 90s and 80s and everything, people would go on tour to support their record sales and now it's the reverse. Release a record so you can go on tour and sell tickets. And it feels like the in-person events stadiums are getting like the capex is just skyrocketing across the sphere. So sofi stadium here in Los Angeles there's like more and more ways to draw people in with like ever larger spectacles and these like shelling points where like did you see Taylor Swift uh in the tour? Like that was a key moment that even like the casual fans needed to find. >> So after Pandora talk about the the journey into uh cond. Yeah, it was um you know, we I I wasn't at Pandora very long because we sold it to SiriusXM. >> Yeah. >> And you know, I was thinking about what I wanted to do next and I was fortunate enough to be in um process on four different companies. Two were in New York, two in LA. We're we're from LA, so LA had a lot of >> attractions for us. >> And uh I was flying back and forth between New York and LA and having trouble deciding what I wanted to do. And my wife was like, "Usually you're so decisive." It's like I know it's really tough. And then I finally realized on one of these flights that when I'm sitting there I had all the information on all these companies every time I'd go to the condformation. I wanted to read about that. It was like and that's how literally how I made my decision. >> Like that's the most intellectually interesting to me. I'm going to go do that. >> Um so and I I but there were a couple criteria I was I had for what I did next. One was I still like the intersection of content and technology and distribution models, >> but non-exclusive content was going to be dominated by big tech companies, >> you know, music, >> sure, >> films, TV, whatever. The stuff that I had been doing, it had all been non-exclusive. Like I wanted to go somewhere where we had our own content, we had our own brands, we could control our distribution more. And so that was certainly one of the criteria, but also still the opportunity to innovate around technology. how you use technology to create new business models, distribution models and you know Connie and really fit that well. >> Yeah. >> Yeah. There is uh this interesting I mean we've talked about this a ton because uh you know thinking about all the new categories of media which we joked about. We put out this uh really like unhinged market map of of media uh as a joke and then unfortunately people we like called ourselves neotraditional media which was a joke and then now people will tell us and be like you guys are a pioneer of neo neotrad media. We're like we created that category as a joke. Uh but but something that we've uh come back to uh over and over is just the value of these legacy brands that have been built across decades and how um you know take away like the business models and and how those are evolving like it just seems like the value of a Vanity Fair or a Vogue or the New Yorker uh are are uh shockingly uh durable because we're just you can make more of these kind of properties but you need decades. Right. And and um and so I'm wondering your strategy around kind of how you think about counterpositioning these brands against the content that is flowing so freely across. Um >> you're referring to the trough. >> Uh what's that? Oh yeah. Yeah. Yeah. The trough of social media apps. Um but yeah but yeah like even uh you know I I've also talked about the u the challenges with Substack around certain stories. Substack if you're an individual selling a subscription it wants it it will reward people that publish multiple times a week that sell a subscription and yet there's so many stories that take >> months to tell year there's there's great stories out there that you'd want somebody writing spending a year on it. Hersh is not going to break the milei massacre on >> and so and so there's this opportunity of like the value of brands and curators that that is maintained and we're not creating we are like again I would say we're creating new uh iconic media brands but it'll take you know 20 30 years right it just you cannot do it overnight uh and then how these things can operate as platforms where there are a lot of super talented uh writers that shouldn't be trying to publish every single week because their calling is to publish uh maybe once a month or even once a a quarter at different points, right? And finding finding those lanes. So, I'm curious about how you're thinking about the role of the different brands under cond NAS and, you know, counterpositioning against platforms like traditional social media or or Substack. >> Look, I think you bring up a really good point about Substack in particular, which is it is a great platform for certain creators. >> Yeah. And if you are if you want to be on that bit of a hamster wheel meaning but it may not feel like a hamster wheel to a lot of people like they love to publish content multiple times a week that's great. It's a great platform for that. If you want to spend six months 12 months deeply researching something and Substack is not the medium for that. Yeah. >> It won't reward that behavior. The New Yorker is. >> Yeah. >> You know it really is and that's and and we get rewarded for that by our subscribers. Yeah, >> when we come out with these really deeply researched investigative pieces >> that you know we have a huge army of fact checkers at the New Yorker that comb through every single word in that >> so that when it is published it has really really been thoroughly fact checked. >> When we publish that we see the numbers spike on subscriptions. Our subscribers reward us for that type of jour journalism >> in a way that I don't think works so well with Substack. Other things work really really well with Substack. >> Yeah. >> Yeah. That said, there's been there's been uh you know, we we're we cover tech primarily. So, we've seen a lot of people from tech leave the sort of like brands or platforms to go to Substack. And some of the some of the times they come out and they're just scooping every single day and it's it's amazing. But more often than not, I'm like, I actually wish that at least a few of you guys would go to one company and I could subscribe to you and you weren't feeling this pressure. Um, and and I don't actually want like for a lot of people I'm like I think you selling ads is a waste of your time. You should just be writing, right? And a lot of them feel that. And then the hamster wheel thing I was talking to um, you know, really big Substacker uh, yesterday and they were feeling that. They were like, I don't uh, I don't want to publish every day, right? But you built a business around that and then you're sort of like trapped to this >> business model. So, uh, so anyways, I think we're going to I've I've said it. Uh, I think in this in this age of AI, in this age of slop, uh, and sort of like ultra fast media, uh, I believe that being a true journalist, being a reporter, being a writer is only going to, I think it was always relatively high status, but I think it will even go up and up and up over >> and become valuable. Yeah. And it's more valuable. It's like we want people that are doing original journalism, factf finding. It's so essential. And then also, yeah, just just spending spending the time. I mean, we're we're sort of a symptom of the internet, right? We make ultra fast content, right? I don't expect people to watch >> most of any of the shows from last week, right? Maybe there's some interviews that are sort of durable, >> uh, but the majority of the commentary, it's just it's comes and goes, right? We expect people to watch it in the 24 48 hours that we create it. >> Um, but there's so much content that I think about, you know, sitting down on a on a Saturday where I'm like, well, maybe I want to read I have limited time. Maybe I want to read something that somebody put six months into. >> Look, I think it's important to know what you're good at and take advantage of that and not try to be something that you're not good at. And you guys are really good at exactly what you just described. And so you've made the most of that and you've attracted a really important audience and it's really worked for you in a business model. For us to try to chase that would be to move away from what we're really good at and try to become something different. And I agree with you. I think where you know with with the amount of AI generated content or lowquality content that is being flooded into the market that only I think acrru to the benefit of companies that can really stand out from that. And so don't try to be that. Like I always tell our, you know, we're going to always have human created content. First of all, I think it's what our I know it's what our audiences expect and want. And secondly, we have no competitive advantage over just creating AI generated content. There's that doesn't leverage any of the advantages we have. And so knowing what your advantages are competitive and and and really building upon that I think is always important in any business. And for the industry changes that are happening right now, I think there's real value in it because unfortunately there's going to be fewer places that can do that because the ones that are more marginal may not survive the changes that are happening and uh and you know our brands have been really thriving in it. >> Uh what is uh how do you compare your philosophy of running like a house of brands versus >> let's say an LVMH? Uh is there similarities, differences? what what is the uh philosophy? >> Yeah, I mean, you know, I when I first joined, I spent a lot of time talking to those companies to try to understand how they were organized because one of the things I had to figure out is what I wanted to do with the way we were structured because we were structured very differently. We were um really a loose collection of companies all around the world. Every country operated entirely independently from every other country. >> We really >> Oh my god, it was crazy. >> Wow. >> There was no technology collaboration. There was no they competed literally I remember literally three weeks into the job >> I'm start traveling I go to Milan you know I'm trying to visit all different offices and I get a call from my assistant like you know some of the team in Milan is upset you're not visiting I'm like I'm in the office I'm here visiting them >> the wrong office >> I found out we had seven offices US had an office there Russia had an office France had all in Milan all different offices >> because of course they couldn't be in the same office because they were competitors Yeah. >> So, a lot of changes to make >> in that model. But, but look, actually, >> it was a great strategy >> when the company was a print publication business. It worked by definition. Kany became very big successful company following that strategy, >> but it was not the right strategy for >> the internet age and a digital age and you know how and how audiences had changed. audience has moved from oh I read my local you know newspaper or my local content to I want to see what's you know happening around the world I want to consume content from Korea or China or Sweden or Israel or wherever >> much more cosmopolitan in their approach to how they consume content >> and uh and so really we use that as a guidepost to say okay how should we structure ourselves >> and just you know question everything about you know how we organize oursel and even the culture of the company which was very very territorial AL and FFT based um to to what it is today which is much more collaborative. >> So obviously plenty of efficiencies across the portfolio geographically. Uh the brands are power law driven right you have a few brands that drive the the vast majority of the revenue. Have you been in a portfolio expansion period or portfolio contraction period? Is there a benefit to going more focused around the the tentpole brands or do you want to expand further? How are you seeing like the >> what we find is scope of the business, >> you know, certainly our largest most important brands um have done very well in this, you know, like Vogue is our largest brand. >> Yeah. >> Vogue has grown every year I've been at the company. It grows revenue, grows profitability every year. >> And thank you. >> Good news. Good news. >> It is good news. And um and you know the New Yorker also the New Yorker just had its most successful year ever by by a long shot. >> Those brands whatever's happening with search algorithms or AI they seem to just be able to rise above it. >> Sure. >> We have smaller niche brands um pitchfork and music brand 1% of our revenue >> but it has a very strong loyal audience in the category that it covers. It's doing very well. And so there's this sort of barbell effect that's happening at least within our portfolio. And then we have some that are in the middle that that are impacted more. Either they don't have as strong authority in the category or they're a little too broad that they don't go deep enough in in a specific. Yeah, we were just talking about BuzzFeed and it felt like for a long time it fell into that category of, you know, decent size audience but ultimately built on a shaky ground of another platform without that really strong core audience that would stick around through thick and thin. >> How do you think about talent identification going with sort of discovered talent? let's say a writer who's established that uh that's that already has a you know following versus somebody who you know has a lot of potential but maybe hasn't had a breakout moment yet. And then the same thing with executives. >> Yeah. I think you know first of all for writers we're a great home for the best journalists in the world. Mhm. >> In part because, you know, I wouldn't have thought this was a necessary competitive advantage several years ago, but it is today, which is that we're not impacted by political influence. We we're not under the FCC's >> thumb. We don't have licenses that they need. We're not trying to buy Warner Discovery and need merger approval. Um and so and we're owned by a family as own cutting ass for seven decades. Yeah. >> That you know I've been at the company now seven years and not once have they ever called to interfere with anything we do. Therefore I don't need to do that with our editors. We can just hire the best editors >> and stay out of their way and let them let them do their job the best. So that is very attractive to journalists because they know when they come to our company they're not going to get a call from the CEO or the board or whatever about why' you say those things about this advertiser or whatever it is. No, the journalism comes first and will always come first. So that helps us attract very established writers, but at the same time we also are a great place for people earlier in their career to learn because they can learn from the best. So we always try to make sure that we're recruiting really high potential new journalists into the company as well as you know the best external in terms of executives. Um, you know, other than Anna Winter, every other executive has turned over since I joined the company. Every single one. >> Wow. >> And I did most of it immediately. And and two reasons. >> One, if you want to affect culture change, change people. Change people that that that that don't reflect the culture that that you want to have. And when I got to Kandas, I felt like this is not the culture of there were great things about the culture. you know the the focus on excellence really really deep at the company but there were other aspects of it very internally competitive and political that that I didn't like and I just decided I'm gonna I want to create the culture of a company that I want to work in so let me find people who think similarly about about the importance of culture and then secondly because you know we were going from like in the US that was a had its own CEO as a separate company from the rest of the world it was very focused on the US market I wanted people who had much more global perspective and global experience and so the skill set I wanted to be broader than than uh what the company had traditionally had. >> Mhm. >> Uh probably 2018 this idea of like content to commerce got incredibly popular. >> Uh and even by the time we were starting this show, >> you're thinking New Yorker protein powder, when's it coming? >> Yeah. Yeah. Love that. Uh but even when we were starting this show a lot of people said wow you have this audience of you know entrepreneurs why don't you build your own software and you know spin out software companies or develop uh stuff internally and we said uh what with what hours in the day are we going to do that and why why would we deserve to win over a team that is you know entirely dedicated to a certain problem where has content to commerce worked within cond uh and where have you experimented or avoided it Mhm. You know the if you think about from an advertiser perspective, the reason advertisers have always come to Condast is the influence that we have with audiences, right? That that you know whether it's fashion or travel >> or home, you know, it's it's it's the influence that we have >> now. You know, that that was very very true in the print era. It's very true today. But they also have many more avenues to reach audiences than than they used to. So for us when we look at commerce, we think that ability to influence audiences certainly exists even more than before because of how much larger our our reach is. And so we can use that maybe not to create the New Yorker protein powder, but to sell fashion, to sell travel. So we've been investing in commerce but not creating our own products per se. >> Partnerships. >> Yeah. In partnerships. And that that also has grown every year. And we announced a >> it'll be launching soon an initiative we announced last year called VET which is really at the intersection of you know certainly e-commerce growth, social commerce in particular and the creator economy. And so what VET is, you know, we have relationships with all the luxury fashion companies, we're using those relationships, creating a marketplace commerce platform that then creators can use to connect with our audiences. And so we'll be working with a initially a small number of of real taste makers in fashion >> um and then using the relationships and the technology we've built to create this uh creator marketplace called vet. >> How do you think about journalists becoming influencers can be great develop their own audience and then that draws more people into their stories when they do have something to publish. double-edged sword because if they leave, they have an audience that might sign up on day one. They might say something that doesn't necessarily represent the views of the publication. There's sort of, you know, some some organizations have gone back and forth on it, either saying everyone needs to be posting on Instagram every day, uh to you can never post on Instagram any day. Uh how have you toyed with that or dealt with that tension throughout your career? you know, because we have, you know, as you said, a house of brands. Our brands are very different. So, you know, a journalist for the New Yorker may be very different than a journalist for Vogue. Yeah. >> Um, in their approach to that question. So, you know, we don't have hard and fast rules that we would. >> So, no oneizefits-all. >> Definitely not one-sizefits-all, but we do know that, you know, journalists that are able to build profiles for themselves >> um tend to be good for business. So, we certainly support that. Mhm. Got it. One thing about events. >> Yeah. >> Are events more power law driven? Do you want to uh like raise the long tail of events? Do more events and try and elevate to something where there's a MetGala happening every week or something. I don't know. Where does the event strategy go? >> Events for us um are one of the fastest growing parts of our business. >> Interesting. Um, but not because we're just doing more and more events. We're actually doing fewer events, okay, >> than when I started. We're doing fewer events, but we're focusing on >> uh events that really are what we call cultural moments. Met Gala is a great example of that. >> You know, Met Gala was last week, you know, last Monday. >> Yeah. >> Um, you know, in the first seven days, I just saw the numbers last night, we had 3.1 billion video views of the content we created. >> Yeah. >> That's remarkable. >> It is. It was up, I don't know, 60% over the last year. off the record like there aren't necessarily I've never seen like you can't just live stream it. You can't watch what happens inside or like there aren't like microphones on the dinner table. >> We do a live stream of the red carpet. >> Yeah. Yeah. Yeah. Exactly. So it's it's even limited in terms of what you're sharing. >> The live stream had 200 million tune in to view it. >> That's amazing. >> Wow. >> So it it every year we do the MetGala. >> Yeah. >> It just grows at a level that's hard to believe and we finish it and we go, "Oh my god, how are we ever going to exceed that next year?" And then it grows 65% again the next year. >> Wow. >> And it was the same thing for the Oscar party. Very Oscar party this year. 65% growth year over year. >> Remarkable. >> So I think we found a playbook. Yeah. >> On that. But it's not a playbook where you can say, "Oh, great. Let's just do one a week." >> Yeah. >> You can't create cultural moments like that. >> What you can do, what we found is doing fewer and doing them at very high quality. >> Sure. >> Um and make them global events like the Met Gala is a global phenomenon now. >> Yeah. in a way that it wasn't, you know, seven years ago when I joined. It was an important, very important, >> you know, event that people in the US knew about and, you know, people in the fashion community around the world knew. >> Yeah. >> But by bringing the company together >> into one organization, now all of our brands globally promote it and promote the live stream and the content from it. And that's really helped elevate it to become now a global cultural moment. >> Yeah. Interesting. Uh, help me. Uh, I don't know how much you'll be able to say here, but help me understand why BuzzFeed is worth something like 120 million. >> No, 240. That about half the company for >> Oh, half the company. >> Yeah. 24. >> Uh, what's the case? >> Revenues declining. Decent, you know, run rating 60 million a year of losses. Uh, I would guess an aging audience. Do you have any idea where the where the value is? Well, look, the only thing I read about that is there was like $20 million going into it. My understanding, >> I thought it was 120. >> There's a valuation of that, but there's there's stage I you guys may have read about. >> Okay. Okay. Yeah. Yeah. >> But look, I can't speak specifics of that business. That was a business that did very well. They were very innovative >> around >> a different era of the internet when you could take >> search traffic and social media traffic and turn it into commerce dollars or other things. >> Yeah. That era is gone. >> Why? Why? >> Yeah. What killed that era? Like people are still spending time on social media. They're still searching on Google and yet publishers have not been able to monetize traffic or generate traffic from the >> My thing is like I I look at BuzzFeed as like, you know, I I look at cond Nast. This is like luxury media. That is what that that's my personal view on it. It's like this is the LVMH of media and BuzzFeed was like a fast fashion. Just say you've never been to the BuzzFeed gala. >> But think think about it's really interesting. We we did this for a board meeting about six months ago. >> Took a snapshot of search results from I don't know seven or eight years ago. >> Okay. >> And what you saw were, you know, a few sponsored links and then the 10 blue, you know. >> Yeah. The traditional search page. >> Yep. >> Do the same search term today. You get an AI overview. Yep. >> Then you get rows and rows and rows of commerce links. >> Yep. >> And then you get Somebody somebody last week was saying, "How is search revenue up?" I was like, "Have you have you done a search recently?" >> And I got I basically have to go to the second page to get an organic result. >> It's been good for Google. >> Yeah. It's been great. It's been great. Great for business. >> If you're a publisher, you've you page. So, >> um if you were if you had a business that relied on that >> to arbitrage that traffic to sell whatever, >> um that business got very very difficult. >> Yeah. Yeah. Yeah. So, you know, and look, the changes in search traffic have certainly impacted our business, >> but not to the point that we haven't been able to grow our revenues and grow our profitability, but it's a headwind. >> Yeah. >> But, you know, last year, so, you know, each of the last three years, we would do our budgets and we'd put some forecasts in of search traffic declining. >> You know why? Just because we'd seen the pattern of algorithm changes and generally those algorithm changes were negative. They had negative impacts. So we're going to forecast it be to be down and then every year it was down more than we forecast. >> Yeah. >> So last year I told our teams assume there's no search. >> You have to have your businesses planned >> as if search is zero. We don't expect it to be zero. >> Yeah. >> But we, you know, don't we expect it to be a single digit percentage of our traffic, >> very low. >> So we started working on plans for each of our brands around that. And some of the brands we looked at and said, they don't really have a good plan for that. Yeah. >> So, we're going to rep prioritize on the ones that that do. And uh but if you know, if you don't have those paths forward, >> you know, if you don't have really strong authoritative brands or brands that have very strong niche in certain areas or direct audiences, >> um then you're just going to be fighting that all the way down. >> Talk about subscriptions, bundles, uh subscription pricing in a time when we have little spurts of inflation here and there. um how important has that been? How resilient has the subscriber model been? What are you seeing there? >> You know, it's um it's a it's a very important part of our revenue stream. What you know, our >> digital subscriptions grew 29% last year revenue. >> Wow. >> And um >> you know, growing double digit percentages this year. So, it's a really important growth area of our business. And we're launching more digital subscriptions for more brand like Pitchfork, small brand, just launched a subscription earlier this year. Tatler, another small brand in the UK launched it. But you know, our big brands, the New Yorker, >> you know, very very strong growth. Vogue is showing incredible growth in digital subscriptions. >> So that's that's an area that's important to progress. And we think we've built up some really good capabilities both on the technology side, but then also on >> just the people capability side, too. >> Yeah. And then uh do subscribers get stuck in a mentality of I pay a certain amount and they're resistant to a price adjustment in a time of inflation or is there some price elasticity there? >> You know we have um we have raised prices on subscriptions fairly materially over the last couple years. Okay. >> And you know each year we think okay we're raising the price we're going to the retention is going to go down and actually the retention has gone gotten better every single year. >> Yep. So, um, the elasticity looks pretty good for us so far. >> Yeah, in some ways, uh, you know, and we're the biggest fans of independent creators on on Substack and other newsletter platforms. Like we we really, uh, we have a lot of them on the show. We subscribe to a lot of them, but in some in some ways, they're helping you your guys' like pricing dynamic. And they're like, "Well, I want $20 a month for my newsletter that publishes, you know, twice a week." and I just kind of like write what I'm thinking. And you guys are like, "Well, we're gonna give you, you know, all these stories and all this like video and images and and uh, you know, these deeply researched stories." And so your product or subscription for one of the brands starts to look like incredible value because you're like, "The alternative, my dollars are going to go way less far with an independent creator in terms of a volume of stories." Now you don't get the same dynamic that they have which people just like to support independent writers and content creators. That's a part of it. It's just you enjoy saying putting you know kind of helping somebody be in business. But um I think uh that's an interesting dynamic. >> Can you talk about uh the further nichification of media? Um Architectural Digest, The New Yorker. These are already not niche publications, but they have a category. Vogue, GQ, right? There's a there's a a theme to the to the product. Um, and what we've been tracking over the last couple of years is that uh the internet native media properties, the creators have been able to find even smaller niches. So, we've talked to uh someone who just does, you know, car reviews or just does uh the >> car dealersh car dealer the car dealership guy was a good example of like that that would not be a national magazine, but he's made a business work there. And I'm wondering if there's opportunity for more niching or if there's value in not overning a product and how you're thinking about because you see all these niches and you think okay maybe there's a rollup strategy or maybe there's some sort of you know synergy between them but that's already sort of playing out on the platform in the sense that like YouTube is making money from both Doug Deurro reviewing every car and the car dealership guy talking about the dealer side of the automotive industry and these are separate from an automotive magazine. that might sort of in previous era address both sides. >> You know, I think where publications uh can get hurt is if they're caught in the middle. >> Sure. >> If you if you try to be too broad, too large of an audience, >> this is not the era for that. Yeah. >> You know, five years ago, maybe that worked, but but not today. >> You either need to be large and authoritative in a big category. >> Yep. >> Vogue is a good example. >> Or architectural digest. >> Yes. or Kanye Traveler would be another one or you need to be >> really nailing a specific niche where you have a loyal audience that's willing to pay >> and and and you know ad supported only tough that's that's if I if you are if you have a brand where you're investing in the journalism if you have to make significant investments in journalism supporting that just with advertising is is a tough >> place to be but if you've got you know really content that people are willing to pay for Then but to do that don't get caught in the middle. >> Yeah. >> Tough place to be. >> The devil wear Prada's uh The Devil Wears Prada 2 box office hit. Uh do you expect that to be a pretty major catalyst for for Vogue? >> You know, it's uh it's actually actually been a catalyst for Kandandy Nast broadly. you know, obviously the movie is, you know, based on Anna Winter and the company is based on Kand Nast and uh but uh you know, I was I was talking to our chief revenue officer a couple weeks ago and like you know, we had a really good first quarter. We exceeded budget and second quarter was looking strong and I asked her like you know what's driving the strength and she stopped for a minute she said the movie. It's like what? >> Wow. >> Like that's driving even other brands. So I think there's just more interest in Connie Nast in general. >> Now I think it's more than just that, but you know, I think the movie has created a lot of intrigue >> and uh and it's been fun. >> I imagine it's good for hiring, but can you zoom out and talk a little bit about the hiring pipeline? There's so much uncertainty in the job market. Should you become a software engineer? Are there going to be no software engineers? the AI can write stuff but can't really do investigative journalism but there's still a lot of anxiety like how are you seeing the next crop of great journalists develop right now? >> Yeah. >> Or advice that you give to like new grads who want to work at >> company. Well, you know, we hire journalists and we hire software engineers. So, >> and it's it's it's difficult >> and everything in between business and finance and legal. Um, look, >> you know, I I remember my mom growing up, she always said, "There's always room at the top, right?" And it was good advice. Like, if you can be >> at the best of what you're doing, there's always going to be room for you. That's remarkable. Moms have the best. >> So good. >> Um, so for us, you know, journalists who really excel, I think they'll always have a home. >> Um, you know, in terms of software engineers, you know, we we we >> we brought in a new head of product and technology. really fertuitously in December. And December was >> really, you guys cover this. Yeah. Very well, was >> a stem function change. >> Yep. >> And so when he started, you know, I I told him, you need to question everything we do. >> Start with a blank sheet of paper, rethink everything that we're doing, how we do it, and how we can use AI. And the first thing he did is he started some small pilots, >> three or four people on a team eliminating certain roles that that would have been on a much bigger team >> to create new products. And uh we he ran the pilot six or eight weeks and like there was enough information already >> where we said okay let's go make big changes now. And so we just, you know, last month made big changes in that in that org really centered around how we use AI at the core of not our content but how we develop technology and products. >> So you know the result of that is there there were whole departments that we no longer needed. >> Like we used to have a you might be a team of 10 or 12 people on a big project. when you have that big of a team, you need a technical project manager, >> you need QA engineers, you need, you know, product analysts and all these other things. >> Well, we just redesigned it and said, actually, you have a product manager and they're going to be the product analyst also. >> Uh maybe there's a designer and there's an engineer and we're going to have AI create the software and also do the QA of it. And so these teams that were 10 or 12 people became three or four people >> and they moved at three times the speed. >> Um so what does that mean if you're software engineer? It means there's going to be fewer jobs for entry without a doubt fewer jobs >> for now. But like if you're a product manager, you can do things that you could never do before because you can actually create the code yourself. Yeah. >> Using AI. >> Well, yeah. And cond NAS is a unique company because you guys don't sell technology, you sell content. And so you want to make great technology to serve the content, but it's not the core. That's not the thing that you sell. Whereas >> um yeah, we we've noticed something is that we basically we hired a full-time software engineer >> early in the company, Tyler sitting over there. Um, and we're uh uh we're the kind of employer that never would have hired a software engineer historically because it for a small podcast at the time. Why would you >> why would >> build software? >> Yeah. Why would you build custom software? And so there's job creation happening by companies that never made sense to hire software engineers, but now they can. >> Yeah. Cool. How are you thinking about I I imagine that uh at almost all the publications there's essentially no AI doing writing or or creative work, but uh how have you had to confront anything on the advertising side? Like I imagine if I flip over the back of the New Yorker, >> I'm sure I've seen a 3D render of a watch at some point. >> Will I be seeing a AI render of a watch? >> Very uh >> does that matter? Does anyone care? It matters what you know last June >> Yeah. >> there was an ad that was run in Vogue Print magazine and the ad used an AI generated model. >> That's right. >> And it blew up. >> Yeah. >> But people who were angry, they were angry a little bit at the advertiser. Yeah. >> They're mostly angry at Vogue. >> Interesting. >> And I loved it. I thought it was fantastic because it reaffirmed what I hoped was going to be the case, which is our audiences want human generated content. They want to know what they're reading and seeing is real and not AI generated. >> Interesting. So to me that was a really important indicator of frankly our future that our future strategy about using AI in many many places to drive efficiency to reach audiences faster speed up the velocity of what we do >> all to enable us to invest more in human generated content >> that that was really >> it's very especially clothing is really interesting there's um a slippery slope where let's say you generate you know you have a a real piece of clothing and you say put this on this you know even if it's a model, but put this on this model and then what happens if like you know you could just prompt it and say make make it fit uh like slightly different. It's like well then now you're that's not the product that you're selling. You're now selling a product that >> doesn't really exist anywhere. So there's certain uh certain certain categories that I think will yeah um and just yeah it'll be a brand decision and I think um >> ultimately that that is why >> that is why I think uh >> your brands will will endure because there will be plenty that make the opposite decision. We're going to lean into it but there's always there's always room at each end of the barbell. Yeah. >> So, lots of care with regard to AI advertising. Zooming out. Are are ads a bug or a feature? If I open up a copy of Vogue, >> well, in a print magazine, it's absolutely a feature. >> I think so. >> Yeah, without a doubt. I think for for digital, it can be both. >> Sure. >> You know, programmatic display ads >> may be more of a bug than a feature. >> Yeah. But you know really >> because it disrupt it's just it really it uh it's mostly the visual disruption of like I'm reading this like beautiful story I actually like integrated sort of a native ad from the publisher that was you know considered but anything that becomes you know display ads just the >> so our biggest advertising category is branded content. Yeah. And it's it's great because it it it it leverages a big competitive advantage we have. >> Sure. >> Our brands, our audiences, but our creativity. And so that's a that to me is a is a really great place to be in our business. And to see the growth of that every year, >> you know, of course we have display ads, we have print ads, some of which can be branded content. Um, a lot of video video ads. >> Yeah. >> Yeah. >> Anything else, Jordy? >> No, this was fantastic. This is fantastic. Really glad this work. We'll we'll wrap the show right now. Uh, leave us five stars on Apple Podcast and Spotify. Sign up for our newsletter, tbpn.com. And we will see you tomorrow at 11 a.m. Pacific sharp. Goodbye.