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Timelines in turmoil again, except this time it's not the Substack. It's technically called Passport. It's Ben Thompson's version of Substack. Um, because Semi Analysis and Stratechery are both, I think, on the same technology platform, the same blogging platform. Um, but uh they have slightly different takes. Obviously, they agree on a lot, but we are going to play the bull and the bear today. Uh we have we have some we have some
Whoa.
some new hats in the studio. Wait, uh did you was I going to play the bear? So, we're talking about Google because recently Ben Thompson came out with a post uh talking about how he has he's he's reviewed Google's technology strategy, their AI placement, and maybe uh things are good and maybe things are are going to are going to go well for the company. Um Buco Capital bloke says Ben Thompson's Google bull posting is accelerating. Uh he says a quote from their uh from Ben Thompson's Sharp Tech with Andrew Sharp says, "I am becoming a Google fanboy. Let Google abuse their search monopoly as much as they want to. Humanity is benefiting. Leave Google alone."
I will say it is hard to participate in this.
Yeah, I don't think this is going to work at all. I really I can't see anything. This doesn't work at all. This is
Yeah, I don't think Dylan I don't think Dylan tested these out. I don't think he tested these out. I can see through those holes and that's it. I can only I can see like one one pixel
here. Let me let me see if I can hit the gong.
Can you hit the gong?
Well, we had our fun with that. Oh, did you just miss?
No, I'm kidding.
Okay.
Okay. Well, so so thank you to Reream one live stream 30 destinations. Multiream and reach your audience wherever they are. This this stream is made possible by Reream. So, uh, basically, let me set the stage and then we'll debate it a whole bunch. So, um, last week Ben Thompson wrote a Stratechery article titled Paradigm Shifts and the Winner's Curse. And he weaved through some of the opportunities in front of Google. And if you were to play the the Google bull, it looks something like this. They have a fantastic AI chip with the TPU. This allows them to serve frontier models at low the lowest possible cost. They're they're they're pretty dominant on the paro frontier as we've seen.
Uh they have incredible cloud scale with GCP, Google Cloud Platform, and that's accelerating. We saw in the recent run of earnings, Azure did quite well, GCP did quite well. Uh AWS was kind of lagging there. So, they're positioned well in terms of like building big data centers, big capex, big big AI token factories. Yes.
Uh they have an amazing lab, DeepMind, which we will get into some of the DeepMind folks who made the updated version of the Metas list. Um they are producing top tier models. Gemini obviously very impressive but also VO3 completely state-of-the-art and Genie3 now definitely state-of-the-art. Uh and Ben highlights that Google is hard to analyze because Larry Page and Sergey Brin famously weren't particularly interested in business or in running a company. They just wanted to do cool things with computers in a college-like environment like they had at Stanford. that the company nearly 30 years later is still doing cool things with computers in a college-like environment may be maddening to analysts like Ben who want clarity and efficiency. It also may be the key to not just surviving but winning across multiple paradigms. So Ben has become a Google fanboy by his own account. But on the other side of the argument is Dylan Patel and the crew over at Semi Analysis. In this new post on Semi Analysis, GPT5 set the stage for ad monetization in the super app, they lay out a path to a complete to complete ChatGPT dominance in the advertising space. And they give it's a great read. We'll go through some of it, but um you should go subscribe to both uh Ben Thompson's Stratechery and Dylan Patel's Semi Analysis uh because they are truly fantastic. So basically when you go to chat with a highly monetizable query and they pick the funniest possible example which is DUI lawyer near me. I love these guys.
But apparently that is extremely monetizable because if you you need a lawyer if you get a DUI and you're going to pay that lawyer a lot of money and so it's not unheard of.
Somebody's on the side of the road frantically in ChatGPT.
It's y DUI lawyer near me. And if you're if you're a lawyer that represents clients in DUI cases, they're going to pay you maybe $100,000. You're happy to pay $1,000 for a referral fee to Google or to ChatGPT in the future. And so basically, when you go to ChatGPT with a highly monetizable query like that, like if you ask, you know, what's the what's the capital of Wisconsin? Like it knows that we can't really make money off of that. So let's not light the GPUs on fire.
This query is simply too good. I got to find some way to make money off. got to make money off of it if it's the DUI lawyer example. Uh so the new model router in ChatGPT and GPT5 will be able to understand that they could potentially earn hundreds or even thousands of dollars on in referral traffic if they help you find the best person for the job. This means firing up the biggest model, the most expensive GPUs to make sure you get the best possible answer. This applies to lots of other domains, too. Companies are now building out uh clones. They're called reinforcement learning environments with verifiable rewards. Basically a clone of DoorDash, a clone of Amazon.com, a clone of other UI experiences.
Shopping experiences. Exactly. Um, and then the and then the companies can go RL on top of those environments, those virtual environments.
Get good at buying stuff.
Learn how to use the real DoorDash. learn how to use the real uh the real amazon.com and and and
learn how to check the box that says I'm not a robot and select the bic.
Literally yes. Literally literally yes. Uh I mean that was what uh that was what uh the Semi Analysis crew's take away from GPT5 was that it was not a bigger pre-training model. That was the Death Star. The Death Star was the idea that GPT5 would be a bigger model or some sort of foundational change. No, they blew that up. They blew up the idea that GPT5 would be a much bigger model and instead they focused on they RL'd the hell out of it according to the Semi Analysis crew. And so it's highly good at very specific things. It's the spikiest intelligence we've had. So um basically they will RL on door- amazon.com other websites so you can check out on your on so so that the agent can check out on your behalf. Uh it might be expensive for an AI model to jump through all those hoops to actually order you a new pair of headphones, but it'll be worth it if there's a commission, affiliate commission on the end of the line. Uh this obviously poses a major threat to Google search ad revenue.
Can you assume that the labs are also just training on the real applications and the real websites themselves?
No, because every time you check out on Amazon, you're spending like 50 bucks at least, right? If you're if you're going through the flow and the flow for buying expensive to do the volume
millions of times. Exactly. So why not just simulate the whole thing? Yeah.
Uh I'm sure that they are they probably have
they do test test runs.
Of course. Of course. Little Yeah. When when when Sam Altman needs to go through the the the Koig configurator, he's he's he's using that as training data. I remember when when Sam when when they launched Deep Research, the example that Sam gave was he was trying to buy this obscure Acura in Japan,
an NSX,
an NSX.
Obscure to some people, not to me.
And he he was like, "Yeah, I just used Deep Research and I found it." And people
a lot of people didn't pick up on that a ton at the time,
but that was a highly monetizable deep research report.
For sure. For sure. Um and so uh Ben Thompson and others have noted within weeks of ChatGPT's initial launch that there was a threat to Google. Uh the question is how fast this shift happens. How much will Google adapt to the new paradigm and what the economics of the consumer tech industry look like in a world where we no longer operate on top of zero marginal costs. the cost to serve the one more Google search was zero, but the cost to serve one more DUI lawyer lookup will be 50 bucks. And so, uh, Semi Analysis has a bunch of good charts and graphs that we can kind of look through and then maybe we'll we'll go back to the bull case after, but let's look through the bear case. So, uh, fabricated knowledge, Doug, who from Semi Analysis, who came on the show last week, fantastic hourlong interview. Every time we grab one of these Semi Analysis guys, we're like, "Yeah, yeah, yeah. The standard the standard interview is an hour. don't worry about it. Like, just send them an hour and and they're like, "Wait, most of most of these TVP interviews are 10 minutes. Like, why why do you need an hour of my time? It's because you're gold. We love you." Um, so fabricated knowledge says, "So, if you can't tell, I wrote the f out of this." Also, I know we're getting a lot of push back, but the affiliate model feels inevitable. Timeline is this. Instacart adopts a gentic purchase in January. Instacart CEO leaves, that's Fiji Simo, to OpenAI in May. Sam tone shift uh router for for control of query. So let's pull up the videos of Sam Altman on AI ads and I think it will crystallize a little bit of like what we mean when we mean like monet monetizing a free LLM, a free AI chat app. It doesn't necessarily mean stuffing display ads in there. Just like the answer to Facebook's monetization problem was not banner ads on the in the right bar. It was in feed ads that look it if you're watching reels and you see a reels ad, it looks exactly like a real and in fact the best performing ads on Instagram reels feel just like user-generated content. They don't look like Super Bowl ads. They're Yeah, they're additive and people often enjoy them. Um and so that will be at least this is the Semi Analysis argument that I sort of agree with. Um uh that will be the the the like what what we say about ads in AI. It will be more like commissions for agentic checkout at least at least to start. So let's pull up the first video.
Example right now there's a lot of people that have websites that monetize with referrals to Amazon. Y
and they're frustrated because a lot of the I mean traffic just like organic SEO is way down.
Yep. And the general read here is that OpenAI will ultimately start to earn that same type of revenue that the publishers historically did.
Yep. So, um, uh, uh, there was a fireside chat at Harvard Business School with Sam Altman.
Let's give it up for Harvard Business School.
Let's give it up for Harvard Business School.
It's the Harvard of Business School.
That's what they've been saying. They've been saying um, so he he got a question from the audience about ad monetization. We'll hear how Sam Altman responded to it. Although fair, it could be a barrier for early stage entrepreneurs or startups or even small businesses. Given this context, do you envision OpenAI exploring alternative monet monetization strategy that could include like free free API access perhaps supported by advertising or other uh methods to foster innovation in the future? I
I will disclose just as like a personal bias that I hate ads. Um, I think
I think ads were important.
We love ads
to give the early internet a business model,
but I think they they do sort of somewhat fundamentally misalign a user's incentives with the company providing the service.
I'm not totally against them. I'm not saying I would never consider ads,
but I don't like them in general. And I think that uh ads plus AI is sort of uniquely unsettling to me. You know, when I when I think of like GPT writing me a response, if I had to go figure out, you know, exactly how much was who paying here to influence what I'm being shown,
I don't think I would like that things go on.
I think I would like that even less.
So, there's something I really like about the simplicity of our model, which is we make great AI and you pay us for it, and it's like we're just trying to do the best we can for you. And then
Senator, we write that that has some inherent lack of access and inequality. We commit as a company to use a lot of what basically the rich people pay to give free access to the poor people or the poorer people. You see us do that today with the ChatGPT free tier. Um you'll see us do a lot more to make the free tier much better over time. And I'm interested in figuring out how we bring the equivalent concept to the API. Um, but I
I kind of think of ads as like a last resort for us for a business model.
Um, I would do it if it meant that was the
That's where he says he says I kind of think of ads as a last resort of a as a business model, but recently he dropped a new podcast. This was from I think a month ago. Uh, and it's from the OpenAI podcast. So you have to imagine that they that the that the the run of show and the talking points in here are very carefully selected to you know move the narrative forward and kind of educate the community on where the company is going. So and so we'll pull up Sam Altman's interview on AGI GPT5 and what's next from the OpenAI podcast. So that brings up the other question from people who are using this or skeptical is that OpenAI now has access to this data and there's the concern one was about training which OpenAI has been very clear about when or when not it's training you have the options to turn that off the other thing is like uh advertising things like that what's OpenAI's approach towards that how are you going to handle that responsibility
we haven't done any advertising product yet um I kind of
I mean I'm not totally against it
he's not totally against Yay.
Areas where
I like ads. I think ads on Instagram kind of cool. A lot of
Yes, ads on Instagram. Very cool. Let's go.
I am like I think it'd be very hard to It would take a lot of care to get right.
I I have faith. I think you can do it.
People have a very high degree of trust in ChatGPT which is interesting because like AI who's mates it should be the tech that you don't trust.
My friends too, so I trust them too.
People really do. Um, but I think part of that is if you compare us to social media or you know, web search or something where you can kind of tell that you are
being monetized and the company is trying to like
Yeah, you can see good policies, no doubt, but also
kind this is the monetized block,
whatever.
you know, how much how much do you believe that like you're getting the thing that that company actually thinks is the best content for you versus something that's also trying to like interact with the ads? I I think there's like there's a psychological thing there.
For example, I think if we started modifying the output like the stream that comes back from the LLM
in exchange for who is paying us more,
that would feel really bad. And
this is a great solution. Give you the actual answer you want, but
hey, these are the best headphones for you, but if you want me to buy them, I'm gonna have to go cook as an agent. I'm doing the work and I'm gonna take a cut of that.
That's that's amazing. I'm so down for that. Like it the agent's like, "I'm getting paid either way."
Yeah. Exactly. And I could say I say, "Okay, which headphones do I want? Do I want the Sony's or do I want the uh or or or do I want the the Apple AirPod Max's?" And if I decide the Apple ones, it goes checks out. It uses some coupon code. It gets some
comparing comparing this to the other ways that people discover products and services.
Yeah. If somebody searches best luxury hotel in Hawaii,
they're going to get ads against that and then they're going to get organic rankings that aren't necessarily the truth, right? Because the truth is
for something like best luxury hotel in Hawaii is very subjective.
Yeah.
Then they might go and try to get recommendations from an influencer.
Yep.
In hopefully the influencer is disclosed.
Yes.
Whether or not they're being compensated by the advertiser. Yeah.
And
so if I were to ask you as an influencer, like what design software would you recommend? Like what would you say? Just honestly,
figma.com,
think bigger, build faster. Figma helps design and development teams build great products together. Uh this is a paid
disclosure. But yeah, the disclosure is super important. And if and if the influencer is saying like, "Oh yeah, I love this hotel, but that hotel is giving them like, you know, two weeks free a year," then like that's not That's not a a super ethical. Yeah, it needs to be disclosed. And then also also the the beauty of the LLM is that is that like the like the the recommendations are going to be able to be tailored. So, best luxury hotel. Well, if you're if you really want a certain type of pillow or you really want, you know, a a pool in your unit or you want it to be wheelchair accessible or you want, you know, high ceilings or you want, you know, beachfront access, like there's a million different parameters that could go into that
and the thing
and then it could just and then it just saves you the time at the very last step.
Well, the thing that ChatGPT needs to navigate is maintaining that trust. Yep. Right. I trust that Instagram is going to serve me ads y that
that
I I trust that they're going to try to serve me ads for things that I will want to buy. Right? Sometimes they serve me an ad, I'm like, "This is this looks garbage. I'm not going to buy it." Other times they serve me an ad, I'm like, "This looks great. You're actually good. Good call. I I I am interested in this product."
And the thing is is like if Chat ChatGPT has to maintain that trust because if they recommend you a hotel and they're like, "You're going to love this. I know I know what you like. You're going to love this hotel." and you go there and you spend all this money and you stay there and it's and it's terrible. It's the same thing of if you go to a friend for a recommendation for a hotel, they recommend you a hotel, you show up there and it's like, "This is terrible. Like, why did you recommend this?" And if they go, "Oh, yeah, I recommended it because I was getting like 7% referral fee." You're going to be like,
"What are you doing? Why are you monetizing me?" Right? So I think like it's a very um uh it's an interesting challenge that they have where they're going to be directing already directing so much economic activity and how do you monetize that in a sustainable ethical way.
Yeah. I I mean I think the router is the answer. Um uh OpenAI or or Semi Analysis called like this release like the router is the release like GPT5 is the router. It's not a new model. It's a router on top of multiple models. And that's the value. So the router release can be now understood can now understand the intent of the user's queries and importantly can decide how to respond. It only takes one additional step to decide whether the query is economically monetizable or not. Today we will make the case for how ChatGPT's monetized free end state could look like an agentic super app for the consumer. This is only possible because of routing. Um there's a very interesting chart in here. Um where is it? It's about the various costs. So cost per million tokens output has a really really steep power law curve. So o3 Pro uh the the model that everyone's obsessed with the the one that people really want to hit as much as possible because they feel like it gives it the most uh the most rigorous and thoughtful output. and I was certainly firing off o3 Pro queries constantly. Um, so, uh,
more and more free users will be able to interact with o3 Pro occasionally because they will trigger it randomly. They might not have been on the upgrade tier, but they actually get to experience what that's like now without having to first go and pay, which I think is cool. Um, over 99% of free users have yet to interact with a thinking model like o3. And for the average user, chat just got a huge upgrade. And so there's this weird like the vibes on X with the power users were kind of like all over the place.
Yeah, there's that post from John Collison,
but for most people were just like, this is incredible. Everything just got better. If you weren't in love with the old model and you didn't like the upgrade, but for most people it was just a big upgrade. So the number of
You got to pull this up. Pull this up, guys.
The number of free users exposed to thinking models went up 7x in the first day and the number of paying users up.
John Collison, what it feels like to select o3 and legacy models menu.
Yeah, it's a good metaphor. It's definitely it's definitely a good metaphor. Uh it's it's a it's it allows that engagement. Yeah.
This this sort of army green on tan. So on a cost per million tokens basis, o3 Pro is $80, GPT5 is $10, GPT5 mini is $2, and GPT5 Nano is 40. So a huge huge gap of 200x the spread on the cost to actually serve the user. So um the the the but the router is clearly a feature of the new to the new service and can likely see improvements or changes over time. It will continuously learn on preference rates and OpenAI promises it will improve over time. They'll get a lot of feedback from somebody said, "Hey, you triggered thinking I would have liked a faster answer in this case or hey, you you you gave me the fast answer. I actually wanted you to go way deeper. This was not satisfactory." So, so Semi Analysis says, "Centralizing the control of the free user experience allows for many more future monetization paths. And this monetization path is one that has been hinted at subtly for a while. It all starts with OpenAI's decision to hire Fiji Simo as CEO of applications in May. Yep. Let's look at her background because it's telling. Obviously, we covered this back in the day, but we'll cover it again now. So, Fiji was at eBay from 2007 to 2011, but her career uh defining career was primarily at Facebook. She was vice president and head of Facebook, and she is known for having a superpower to monetize. Let's give it up for monetization superpowers. She was critical in rolling out videos that autoplay, improving the Facebook feed and monetizing mobile and gaming. And I think we should just keep the claps going. She might be one of the most qualified individuals alive to turn high intent internet properties into ad products. And now she's at the fastest growing internet property of the last decade that is unmonetized. It's an obvious story.
This is the next list. Post medicine list. We need po we need the the the monetization maxis. Yeah. Fiji at the top of the list.
Money maxis. Um, we can continue to run through this or we can kick it over to the medicine list. Whatever you want.
Yeah, I mean, let's cover a little bit more. So, they're covering the tone shift. We obviously had those videos. Yep. They say in recent interviews, Sam's tone has shifted. There's clearly a lot of thought happening about how to best monetize free users more recently. Again, this this goes back to the kind of little debate we were having, the little little timeline and turmoil moment with uh Cuban where Yeah. Again, you can't expect companies to give products that are expensive to serve away for free forever, right? And it's great that pro tier users can help offset the costs for free tier users, but there's very few I mean, OpenAI, the funny thing is they're trying to convert to a for-profit. Right now, they are nonprofit, so it makes sense they're giving this incredible product away to to millions of humanity.
Yeah. for just for the benefit of humanity. But eventually,
yeah,
eventually, you know, they're business.
I do think uh like Cuban has a point with which I steal man with with the idea of if it was purely based if the entire flow of we want people to open the app and convert to to commerce immediately. Um that could result in perverse incentives and like lower quality just general user experience. uh it might be a situation where um that's kind of like a short-term gain for long-term pain in the sense that people wind up churning if it's really really bad. Um but I think that it is possible to have a wall in the organization between like okay the truth seeking happens here and the first layer of you ask a question we're going to give you the best possible answer for what you asked. So, luxury hotel with your preferences. We're really going to and the team is purely focused on that and then they are separate from the monetization team that says, "Would you like to check out?" Okay, we have a great agent that can go do that, book it. And it's similar to having a a a you know, a a flight uh what do they call a travel agent that actually books it for you and then takes a cut of that. And that's a very clear value because it's actually
Yeah. And travel agents have pretty aligned model with consumers, right? They want to give you a great trip. So they you come back and book more travel with them, but they end up taking a rev share in different ways from from the hotels and and various like vendors that they end up like booking the trip through.
Yep. And I believe Google has a similar uh wall between like what shows up in the knowledge panels cannot be bought. So there is no amount of you know Google ad dollars that you can pay them to change your height on if if it's autocompleting like that pulls from Wikipedia and all these data sources into their knowledge graph. You can't there's nothing you can do to manipulate the Google knowledge graph.
You can just buy keyword ads that show up in their box and you might have to scroll a while because they sometimes they put seven ads up there. But uh
as an ad enthusiast, if you do a Google search and the entire screen is filled with ads, it's really
fills you with heartwarming. Yeah. Search DUI lawyers near me right now, I'm sure you'll see them. Uh anyway, let me tell you about Vanta. Automate compliance, manage risk, prove trust continuously. Vanta's trust management platform takes the manual work out of your security and compliance process and replaces it with continuous automation whether you're pursuing your first framework or managing a complex program.
Should we run through uh Ben Thompson's?
Yeah, we should. So uh Semi Analysis actually quotes Ben Thompson here and talks about aggregation theory. Uh let's talk about agentic purchasing and compare it to search quer to the search query today because LLMs have a core feature that search does not and that is scaling marginal cost. That's what we talked about with o3 pro costing $80 per million tokens versus GPT5 nano costing 40 cents per million tokens. All of a sudden it has a different economic equation. Uh this is fundamentally different than the world search grew up in. Let's examine aggregation theory by Ben Thompson because the core feature was that most technology companies had zero marginal cost to an additional user. There were some fixed overheads for running while large uh the large search engine but the incremental cost of another query was virtually zero. Agents and LLM kill this concept for the first time the more you spend the better your result is because of chain of thought reasoning tokens and now marginal costs exist in software. Again, there is somewhat direct relationship between more money, more compute, and a better answer. Nowhere is this clearer than in AI in which you can spend variable cost to get variably better answer or outcome. And so before the router, there was no way for a query to be distinguished. And after the router, the first low value query, if you ask why is the sky blue, that can be routed to a GPT5 mini model that can answer with zero tool calls and no reasoning. This likely means serving the user is approaching the cost of a search query. Um the the the monetizable query on the other hand has a fixed cost. It would show a page ranking websites with potential AI summary at the top. This is a fixed supply response to what could be a variably hard question. But now ChatGPT free because of routing. There's some incredibly, you know, incredible OpenAI hater out there who's on like the maxed out pro plan and just going into o3 Pro and saying, "What is the capital of California? Give me a 60page PDF with the answer."
This is the the the hitting Grok 4 heavy with just like answering one word, but think for 10 minutes. It's like just burning the GPUs. Um, but yeah, I mean the router will will, you know, increasingly
eliminate that
decide how monetizable is this query and that's how much compute you get for it. And so GPT5 can decide to allocate $50 to a query, create a plan, gather information about the DUI incident in this example, uh, research local lawyers, consider who is likely to answer fastest, consider your budget, then contact multiple lawyers on your behalf. All of those are tool calls. All of that is expensive. It could even agentically reach out to lawyers on behalf of the free user knowing that the conversion ratio of this query is even higher. Uh this version of chat is highly helpful, aligns with the user's query and is a valuable referral to the seller of goods and services. So there's a little bit of you know going into uh how does Google respond to this? Um there's uh there uh so ChatGPT has partnered with a lot of different companies in finance. They've come they've partnered with Stripe, Visa and PayPal. On the consumer side they've partnered with Mattel, Booking.com and Lowe's. Enterprise software. They've
they have a partnership with Shopify as well.
That's on the consumer internet side. Snapchats, Shopify, Instacart, and Merkari. So if you are a Shopify merchant, you are probably happy to let people check out with your products directly in ChatGPT. You don't really care if they hit your if they hit your website.
It doesn't really matter as long as they're buying your product. Your margin's probably going to be the same. And so uh
OpenAI is firmly knocking on the door of technology giants Google and Meta and and even Amazon. Previous scares about AI have been focused on search query volume not being replaced in the ad tech stack. ChatGPT can compete with dominant platforms for its place in the ecosystem. And to date, this push into purchasing is the most concrete example of OpenAI coming for advertising at large. If they were first to launch an aggressive agentic checkout solution before Meta or Google, this would be seen as huge competitive shots for both companies. a reminder that what we that if we are talking about pure usage only one company is growing users at a meaningful rate. It's OpenAI and the visits year-over-year for OpenAI are up 135%. And there's this other crazy crazy chart in here that's the of the top 10 websites,
uh, ChatGPT is number five and it's uh, and every single property is over 15 years old. So Instagram is the next youngest
like website in the top 10 websites and it's 15 years old. Then you have Google at number one 28 years old, YouTube at 21 years old, Facebook is 22 years old.
Hearing that Instagram is 15 years old.
Crazy.
Makes you feel a little bit old.
X.com, Twitter originally 19 years old, Reddit is 20 years old, WhatsApp is 17 years old is 16 years old. Twitter's going to be able to drink soon.
Get ready.
Get ready for that.
Yeah. I mean, rebranding at at age 17 is kind of on brand. You know, it was Twitter and then it had to Don't call me Twitter anymore, Dad. I'm X. I'm X. Just call me X.
Call me X. Right.
Uh, and so, um,
yeah, when companies turn 21, they should just like really
even 21st birthday, get a little wild for 24 hours and then lock in again.
Yeah. So, um, let's go over to Mr. Tekker. Let's go over to Ben Thompson. But first, let me tell you about graphite.dev code review for the age of AI. Graphite helps teams on GitHub ship higher quality software faster and you can get started for free. So, paradigm shifts in the winner's curse. This was posted Wednesday, August 6th on Stratechery by Ben Thompson.
Ben says, "It's fun and often accurate to think of tech companies in pairs. Apple and Microsoft define the PC market. Microsoft and Intel won it. Google and Meta dominate digital advertising. Apple and Google won mobile." That however is not the defining pair of the smartphone smartphone era which ran from the introduction of the iPhone in 2007 to the launch of ChatGPT in 2022. Rather the two most important companies of the last two decades of tech were Apple and Amazon specifically AWS. The Apple part is easy. The iPhone market created the smartphone paradigm from its user interface to its distribution channel and was richly rewarded with a bit under half of the unit market share and a bit under all of the
all of the total profits. Isn't that a great line? It's such a good line, but it's true.
A bit under. Google did well to control the rest in terms of the Android operating system and profit from it all thanks to Google search. But it was search that remained their northstar. The company's primary era error in that era was the few years they let the tail Android wave the dog Google.
That's a that's a typo. It should be wag the dog. I I or maybe maybe he's making a wave joke because Google had a product named wave. But usually the phrase is you let the tail wag the dog. The dog should be in charge of the tail in the golden retriever.
It wasn't just wagging, it was waving.
Yes.
The AWS part is maybe less obvious but no less critical and the timing is notable. Amazon created AWS in 2006 just 10 months before the iPhone unveiling and the paradigm they created was equally critical
crazy timing
to the smartphone era. Y I explained the link in 2020 is the end of the beginning
where he says this last point gets it why cloud and mobile which are often thought of as two distinct paradigm shifts are very much connected. The cloud meant applications and data could be accessed from anywhere. Mobile made the IO layer available everywhere. The combination of the two make computing continuous
instead of deliberate. Before you had to sit down at a computer linked to a on-premise server and you could only use technology in one place at a time and now you can be always on uh tapping into the cloud wherever you are. Let's hear it for the cloud and mobile. Fantastic. Um, and so AWS was not the only
I remember those days as a kid summer. I'd have my email. I'd sit down. I'd send some emails as a
as a as a as a teenager and then I'd walk away from my computer. I'd go out into the world.
Yeah.
Unconnected.
You used to have to go and turn on the Xbox to play Call of Duty. Now you can play on your phone
and you can even stream it. There's there's a ton of stuff. It's changed everything.
AWS was not the only public cloud provider. Of course, Azure and GCP were both launched in 2008, but by virtue of being first, they both
AWS defined the paradigm
and also were the first choice of the universe of applications that ran on smartphones and more accurately ran everywhere.
So, if Apple and AWS were the definers and thus winners of the smartphone era, then it was Microsoft and Nokia that were the losers. The reasons for their failure were myriad, but there was one common thread. Neither could shake off the overhang of having won the previous paradigm. Indeed, both failed in part because they deluded themselves into thinking that their previous domination was an advantage. Uh for Microsoft, that previous paradigm was the PC and the Windows platform, which they thought they could just port to mobile. And so all of their mobile efforts were basically just like Windows running on a phone, kind of dumbed down, didn't really work very well. It took Microsoft years and new CEO to realize that uh their mistake. So, uh, we will come back to this and debate Google more on this show, but we have Keith Rabois joining the stream. Welcome to the show, Keith. Good to hear from you. How you doing?
Great.
Pleasure to be back with you.
Fantastic. Uh, before we go into all all the news that's shaking up the timeline. Do you have a take on on Google right now? We were diving into the fact that Semi Analysis seems quite bearish on Google and is is c is is saying that uh uh OpenAI will basically steamroll them once they get into agentic commerce and and checking people out
properly monetizing the user base and all the economic activity that they're already driving.
Yeah. And then Ben Thompson's kind of saying like, hey, it's this college campus. They have a bunch of great AI researchers. Like something will come out of this and there and it's it's just a lindy company. It's been around for a long time. It's not going anywhere.
Well, I think ChatGPT is the fastest growing consumer app of all time and as long as that continues, Google's significantly threatened. I think normal people are substituting uh what used to be searches and queries into prompts and that really does threaten Google. Even if they have top tier AI talent, they have yet to productize it in a way that undermines the trend towards ChatGPT. If Google were to fuse together all the information they have about you, your Gmail, your YouTube, etc., and make everything personalized out of the box, that'd be interesting. We'll see if they can ship that product, um, internally, uh, substantively, and whether it resonates with users. But they're losing, you know, the AI battle to OpenAI, period. It also threatens the revenue. I don't think that performance-based advertising which is the mainstream you know driver of Google success will be the way that consumers uh expect to be monetized in the future. I think uh all the AI applications are showing that consumers are willing to pay for value and so I think direct value direct capture uh from consumers subscriptions etc might be better um and that would you know undermine the entire advertising business model that really has propelled Google into the stratosphere was there's product innovation initially engineering innovation data innovation but ultimately is advertising innovation and they had a more efficient advertising platform and that may not be the future of the next 20 years. Yeah.
Yeah. In some ways, Google's Google's margin and how much revenue they generate for me as somebody who throughout the year is going to make a lot of searches that that result in a lot of purchase activity. And if I can substitute that by just paying 200 bucks a month and eliminating a lot of that, you know, it it ChatGPT can can become a probably a trillion dollar company
by just eating into eating into that and being willing to give up that that incremental revenue that they might get from advertising.
I just had this experience. I bought a Nintendo Switch 2. I went to ChatGPT. I fired off agent mode. I had it uh go around check every website for what's in stock. It decided that Target was in stock. I clicked on that. Had to go into the Target app and set up an account and it was like a huge hassle. Could have just done it for me and taken a cut, but Google wasn't involved. So, it's kind of a crazy time.
Yeah. I mean, you can also do some rough math. Uh you can calculate Google's revenue per user per month or per year.
Yeah.
And then what consumers are willing to pay through ChatGPT and similar products.
Totally.
I think exceeds that.
Yep. No, it makes sense. Anyway, uh enough on Google. give us the high level on what's going on with Open Door.
Well, I'm very excited. A bunch of retail investors led by Eric Jackson have really take a spotlight and focus it on the potential of the company. I think for a lot of reasons the company for the last three years has not really uh capitalized on its disruptive elements, its innovation and people have sort of forgotten about it. um in the public markets attention is really important and now there's a a very strong shining spotlight on the potential of the company which I think should be like Carvana. Carvana is a $40 billion company with in fact more competition than Open Door has but Open Door has not been able to frame the narrative about the innovation as well as Carvana and I think that's going to have to change. I think substantively the company needs better leadership both on the storytelling side and on the innovation side. I like tweeted out, you know, really with about 10 minutes of thought ways to fix Open Door this morning.
And there's specific uh specificity behind every one of those elements that I could dive in deeply, but the company's not executing on any of those things. If anything, it's taking a step backwards and partnering with these legacy real estate brokers, which makes no sense whatsoever.
How much of the like selloff in the stock or just kind of like you know the like getting into the doldrums is and the trouble that Open Door has run into has been just the interest rate dynamic in the post 2022 2023 era where we've been in this high high interest rate environment that that abstractly has a big impact on home buying. But how direct is that on the Open Door story?
It's moderately direct. So in a hot market, maybe 5 to six million homes transact a year. And Open Door gets paid every time it transacts. So in a in a very high interest rate environment, that number went down to 4 million. So 4 million verse six. Like that's that's right. It's not like people stop buying and selling. It doesn't go to zero and it doesn't go to infinity. So 4 to 6
Million. The problem for Open Door financially is the cost structure of the company at a GNA level, not marginal level. GNA level is just way too expensive to make profits at $4 million.
And this was a known problem. The node post who I work with warned the current management team, myself included, in 2015, that this was going to happen. Real estate has roller coaster rides to it. And you need your fixed cost base to be low enough that you don't have to transact to offset your fixed cost, your burn.
Unfortunately, the base was too high. And when the Fed raised interest rates like five times sequentially really fast in kind of an unprecedented way, very few people transacted. So there wasn't enough profits to offset the fixed cost of running the business. It was a mistake. It really did cause significant strain. Arguably, you know, the entire management team made that mistake, didn't listen to the node. Whenever that's three years ago, the company's made no progress on cutting the GNA cost over the last three years.
The good news is it's actually really easy to cut the GNA cost these days. AI allows you to substitute for most of what the people that work at Open Door do. So you should be able to bring the very the fixed cost of running the business down to here and then just decide on every home purchase are we going to make money or lose money and just purchase homes in any interest rate environment where you will make money.
What are the what are the key activities within the business that you think are are most ripe for replacing with agentic workflows?
Honestly, I think real world stuff like there are companies that are actually doing inspections with AI. The idea that you need this like we have labor going to inspect you know repairs etc etc that that stuff can be done videos and AI much better than traditional people and there's companies that are specializing in this. So I I just think that you don't need all these people and it's going to continue. Acceleration AI is more and more obvious and more and more stark every day. So can you cut it to 100 people? Probably yes actually maybe less and then you have a then you all have variable costs and the only thing you need to do is model the value of a home correctly which is complicated but open door has been excellent at it.
One thing that people miss is with a exception of one quarter in the history of the company, the company has priced homes correctly and purchased successfully and profitably, but the marginal cost uh the fixed cost sorry has not been able to be offset in when no one's transacting. The company has significant market share in many markets. So the company will just mint money as long as it's gets its cost under control. Now it needs to be a massive company which is the potential.
Like if you think about it, let's take a top down perspective. Yuri Mililder actually made this point to me seven years ago. The largest real estate platform in the West is worth about $18 billion.
That's insane. This is the largest asset class. Period. The idea that the most innovative company in the entire Western universe would be worth $18 billion in residential real estate makes no sense whatsoever. So somebody's going to build a 50, 100, $150 billion market cap company. And this management team doesn't think that way. They think about, you know, moving one basis point here and one basis point there versus innovating to build a hundred billion dollar company. There is no reason this shouldn't be a 50 to $100 billion company. You just need the right leadership and we're going to fix that.
We have a couple questions from the chat. Are you interested in going back on the board of Open? Are you interested in stepping in the CEO seat, getting a new role? Like what what do you see your involvement going forward? How do you think about that?
The co the company needs a new CEO. If I can be involved in identifying, assessing and or closing the proper candidate, I'll be happy to be involved. Um I I do not plan to be an executive. I have a very busy full-time job. Um and I this company needs a full-time dedicated CEO who's intense, who's creative, who's innovative. Um, so if I can help that person, y if I can encourage that person, that would be wonderful. Regardless of the structure.
Maybe they're listening right now. Uh, DM Keith if you're the one for the job.
If you're a great if you if you're anything like Will Gabbrook at Stripe or Greg Bman, head over, please call.
Come on over. Uh, I want to talk about uh transformation and actually implementing agentic workflows, implementing AI and then cutting cost. Is there a sort of uh like capex type cost? I mean, I imagine that there's some folks on the private equity side that are buying up small businesses and then hope to use AI to cut costs, improve margins. Uh, and maybe they're doing that internally and defaying those costs of knowing which tools to pick uh internally across a portfolio. Then there's McKenzie and the big uh the big consulting firms that are going to Fortune 500s and saying, 'You're going to pay us a ton for a slide deck, but you know, in theory, we're going to get you set up with something that will save you money.' But for a company like Open Door, um, what does it look like? Because it feels like it's probably too complex to just say, 'Okay, yeah, we're going to like sign up for chat GPT and that solves our problem.' There's probably going to be some implementation of these AI tools. Uh, and that might have cost in the short term, even if it drives longer terms better earnings outlook. How do you think about that?
Well, I think that's why we need a CEO who's AI native, AI uh, insightful. I think that business transformation requires real skill. I think you are right though that the hottest area of venture capital is venture capital is chasing after old school businesses and trying to turbocharge businesses uh with AI whether they're turbocharging on the top line which to me is more interesting or improving IBIDA with AI substitution of cost. That's that's pretty cool. But you know we funded a few companies. There's at least two VC competitors of ours that I know of that have dedicated funds that do nothing else except roll up traditional businesses and try to turbocharge them with AI.
So I think you know this is very common at the large company level. It is happening apparently. Um actually apparently Amazon has had a lot of success with this. They don't talk about it and speak about it but apparently it's true. Um, and then I think you're going to see more private equity firms insist upon their portfolio, whether they're large market cap portfolio companies or small, um, apply AI in a thoughtful creative way.
Do you think do you think I mean it feels like private companies have like an extreme structural advantage in terms of doing like true AI driven transformation because open AI uh sorry not not open AI open door you know every uh over the last week every 10 posts on X has been some you know different retail investor having strong opinions about who the management should be and and what the board's doing and all this stuff. Um, yeah. Do do you think that um do you think that if if the right person were to come to the table that that like a that that Open Door would do better if it was a private company for the next like few years?
Yeah, I don't think so. I think you can transform yourself in the public domain as well. I think you could take advantage of those suggestions. I think first of all, let's just take a step back. I think retail investors having a point of view and being excited about an opportunity is a great thing. I think the whole point of markets is to allocate capital that's why we have markets right that's why we have public markets it's an allocation function and consumers voting with their feet especially for consumer brands saying I want more of this I want less of that is actually a proper capital allocation like if the company did this I would spend more money with them that should encourage capital allocation the this is not some people have like this negative perception of retail investors I think it's actually better when retail investors say I'm going to vote with my feet, I'm going to vote with my dollars. If product X or Y or brand does it does X, Y or Z or brand represents Z, I'm going to spend money with them. That is a reason to allocate more capital to that company. It's fundamentally sound.
How do you think about the the storytelling around AI as a silver bullet versus a core competency that will be a compounding advantage? I'm thinking of the Amazon example you gave. I completely agree that Amazon's been a beneficiary of AI all over the place, but I don't think it's happened in a single quarter. I think they ramped to a million robots across all of their different facilities. They bought KA a decade ago. They were using they were using AI recommendation systems to tell you, hey, you're buying a computer. Do you want to monitor? That's AI. But, you know, just a couple decades ago. And so, it feels like the right person for the job. They might be able to come in, rip off a band-aid, get things right sized, do the hard work, but then it's really like you can't take your foot off the gas.
I think you need to do both. I think there's bottomup transformation, which is blocking and tackling, persistency, consistency. It's like going to berries. You have to go every day like every day for like for like a decade. And you know, you get sometimes sometimes sometimes three, four, five times that. Yeah. And then there's I think there's top down. I think leadership involves sometimes just putting a stake in the ground and saying thou shalt not like we are just not going to do this anymore. We are absolutely out of that business. And that's why you need a founderdriven CEO. Truthfully, transformations with emerging technology require the moral authority of a founder just saying absolutely no. I know this has worked in the past. I know this has worked in other companies, but we're just not doing that anymore because the world's going this way and we want to be ahead of the world.
How do you think Open Door's relationship with with traditional real estate agents should evolve?
Well, I I think it should be we should be innovating so that there's no comparison. Like the value proposition Open Door provides a consumer, whether a buyer or a seller, should just be so much better that no one wants a real estate agent. It's not a bad thing. Like real estate agents used to do X and Y and there's a bundle of services they provide, but what Openor provides is this and it's just like a no-brainer. And if it's not a no-brainer, the company is not innovating and is not creating enough value period.
Uh how do you think about other levers like zooming out to the macro that could just increase the velocity of uh of real estate transactions or just make homes more affordable in America? I don't know how high this up is how high this is on the current administration's agenda, but it feels like something that people have been clamoring for for years on both sides. Are there obvious wins that you're optimistic about in the next couple of years to just improve the quality of housing in America broadly?
Well, affordability is a top tier issue certainly for my conservative friends. Yeah, we need to make housing more affordable for more people as fast as possible. There are some things that have short timelines and some things that take longer. So, building is great. We need more. We need more supply. Supply works. Supply has worked in local environments. You can prove it in in in city action and citywide. The cost will come down if you build. But you can't build a house, at least right now, without more robots, more automation. You can't build one overnight. So supply does take time, but we need to start working on supply and getting rid of all the blockers and excuses for lack of supply, particularly in California.
Secondly, we do need interest rates to come down. U we do need a new chairman of the Federal Reserve. The best thing ever, you know, for open door would be replacing Carrie as CEO and replacing Jerome Powell as Federal Reserve chair. Fortunately, I think both are going to happen. I hope both happen in September, maybe before.
Okay. Can interest rates ever be too low?
Probably. You know, like interest rates, it's basically related to a time value of money. Yeah. And so if interest rates are too low, people's willingness to part with money to get paid back in the future gets reduced. And that that is investment. That's that's really what the definition of investment. So they could be too low, but they're they're definitely too high right now.
I guess I've just been thinking like there are there are a lot of green lights, green flags in the market. New companies are going out. The stock market's at all-time highs. Everything feels really strong in the economy. Even the CPI is coming back flat and GDP is printing. Everything seems pretty good and it feels like
Except the fast casual restaurant chain.
Yeah. Yeah. They're having trouble.
Except the slot market is.
But in general things to be seem to be going very well in the American economy and when there's a risk of okay, we could be overheating. I feel very reassured by having let's lower interest rates as an ace up our sleeve in case we get over our skis and there is a market correction. The Fed does have some has some tools in the.
Like our friend our friend Joe's point is like the in his view the the argument to lower rates is like the data that's coming out of the labor markets but again that's also being debated and rehashed and and uh I don't think anyone really.
Well let me let me take a step back though.
I think the foundation that growth equals inflation is just wrong. So from 1950 to 2010, each decade we average 3.6 years with over 4% growth without inflation. It's only the modern world post 2010 with qualitative easing that people equate growth with inflation.
The good news about AI and productivity gains is it's very easy to see how you can grow fast three, four, 5% consistently without sparking inflation because all of the growth is not propelled by labor cost increases which is what causes inflation. So I think the modern world of the next 30 years if it's managed correctly, if the leadership in the political sphere is dialed in should allow consistent growth which will eliminate the debt and make not a non serious problem like 3% 3% 3% plus without inflation. And we need to get people who are sort of educated a century ago out of this mindset that every time you see growth, you need to put on the brakes. That's just not that. And that's why the Federal Reserve keeps making that mistake. And so we've got to fix that. But part of it is AIdriven and technologydriven innovation will allow for great growth, consistent growth without inflation.
Is that your current outlook? Um, not necessarily a fast takeoff and we're growing at 10% GDP a year. Uh, Satin Nadella says, 'Call me when we're growing at 10% a year.' Uh, but but but a materially improved economic condition for the United States on a on a long-term basis.
Yeah. Scott Bess likes to talk about 33 and you want the 3% consistently. You could beat three and I think we will beat three and I think he wants to beat three in the next couple years. So I subscribe to his perspective on the world. I think he's right. But it's technology that's the magic wand that allows consistent growth without actual inflation. And that's what we need. That is how that is raising taxes is a disastrous policy. It's not going to fix any problems. Consistent growth without inflation will. And we need a Federal Reserve chair who understands that. We have a Treasury Secretary, fortunately, who really does understand this.
Yeah. Yeah. And we and we've seen that with those charts of the various goods and services inflation over the past decade. Education and healthcare goes through the roof where everything that's on the technology adoption curve like TVs and dishwashers that all has gone down in price. And so the more goods and services that you can put on the deflationary curve, the more growth you get and the and the better health of the American consumer. Good stuff. Jordy, anything else?
I think that's it. Thank you for jumping on on short notice.
Thanks for taking the time, Keith. This is always great. Come back on whenever you have uh more thoughts on uh on if you if you can think for 10 minutes and get a post up, you can jump on the show, please. We'd love to have you.
Great pleasure to be with you. I'll be back. Cheers.
We'll talk to you soon. Bye.
See you.
Uh let's go to the medicine list. We updated the Met list, our ranking of the uh top 128 now AI researchers. Uh it's uh burning up the timeline extremely controversial. Fortunately, we have Tyler Cosgrove to blame for that. We had no no involvement whatsoever. We will be disavowing the Met list if it comes back to bite us. But Tyler, why don't you give us an overview of what changed uh who's on top and what's going on with the Met list today.
Okay. So, we're going to the mic, right? Okay. So, so uh Okay. Before we start, just want to give um you know, this is not done yet. Okay. The list can change. Okay. So, we got some haters in the comments again.
Oh, this person like oh he's so low. Okay. Okay, we can fix it. All right, it's not done.
All right. Um, but yeah. Okay. Let's start with uh the top five here, right?
So, I I think a big change we'll see is that we saw Noom, Shazir, and Ilia switch, right? That's pretty big.
That's a huge move. Okay. What drove that?
What drove that? Uh, is that just because Ilia has been quiet at SS SSI hasn't published anything in the last part of it.
And Gnome's been on a tear?
Yeah. So, so I I know. So, so I mean I think Nome Shazer is broadly almost like you you can't say he slept on he's number one. Yeah. But he is I think you know punching above his weight a little bit.
I think Doug from 79 just came on and said that the reason that Gemini is so good is because is because Gnome's back.
Yeah. You can basically track like Gemini was okay. It was fine. He comes back from character.
Okay. Okay. So, let's go down to number seven.
Soundboard Jordy for Gnome. Shazir.
Yeah. Demus. He was missing from the first list. Um that was maybe a conscious decision. It might not have been.
He was missing. He was on the list at all.
He's one of the greatest.
Well, you know, the thought was like he, you know, he's not as much of a researcher now. He's more leader. He just leads the lab almost.
Exactly. But, you know, if you trace it back, he's obviously still making some research decisions.
Okay. Yeah. So, I think it's fine to put him back on.
Okay. So, he's number three.
No, he's number three. Dario.
Dario. Amodore moves up. Anthropic.
Similar thing. Another lab leader.
Um, and then last up we have John Schman.
And Dario, uh, has he been on the Dark Cash podcast?
I think actually all five.
Dor has hit all five. He's in seven of the top 10 as well.
So I mean, he's been on a generation.
We didn't just listen to Dwar. We studied.
We sat down and listened. We didn't just hear Dar Cash. We sat down and listened.
Okay. Who's last? Uh, on the top.
John Scholman. Thinking machines.
Yeah. So, another another big player. Um, I believe.
Everyone except Demis has at one point worked at OpenAI.
Uh, actually, wait, I don't know if that's true. Maybe I don't know.
I don't think Gnome did, but.
Um, still would have run for Open AI. That's the new top five. I think let's move over to big moves.
Big Moves. Who we got? We got.
From two weeks ago. So, uh, the first one we can look at. Number 13, Nome Brown.
So, he he he did really well.
36 spots. Now, he was in the IMO gold medal team at OpenAI that cracked that code.
Yeah, he's big on the kind of RL team. I don't know, they probably have multiple RL teams post training, but yeah, he he's he's doing a lot of good work there.
There's someone else at OpenAI who's famous for like holding RL all together. They made the list as well. Is that correct? Are you familiar with that?
There's a bunch of um just like post training RL people that that are new on the list now.
That'll be important going forward.
Yeah. I don't know if we mentioned, but the list is longer now, right? There's now 128. We were at 100. Now we're at 128. A nice base 2 number.
I think some big additions, too. Will Brown crack.
Unsurprising to anybody with a brain.
Multi-time TBPN appearance. So, makes a lot of sense.
Um, okay. We can go next one. Paul Cristiano.
He's kind of an OG. He um.
I don't know if he's the godfather of ROHF, but he he was a big name on that paper. Um, now he's mostly into safety stuff now, but he's definitely kind of a a thought leader in the space. Right.
We got Reggav in the chat saying Tyler is trying to atone for mogging Anthropic in Sonnet 4 yesterday. Is that true? Are you the allegations? I think I think you've atoned. Good job.
Shelto. I think Shelto actually moved down.
Anthropica is still, you know, they have a lot of people on the list. Okay. Okay. Let's go to Peter Beiel. Up 66.
What is he known for? I've heard his name before. I mean, so he's just an academic. He's at Berkeley.
He's not in a lab right now.
Not yet. He's leaving billions on the table.
Yeah, he's been on a ton of papers. He's like uh also advised a ton of the of the top researchers. Sure. So, I think he's kind of influ influential in that way.
Um let's go down to Yan Lun is actually missing from the list now.
Shot fired. I think he was top 10.
Okay. Hey, he was top 10.
He's now not even on the list.
He's not on the list and he's that.
So, you know, like I don't make the list. I just give the I give the voting out and then people make the decision. It's not me. Okay.
So, let us know in the chat. Should we shoot the messenger or should we not shoot the messenger here? Do we have a do we have a toy boner? I can shoot the messenger here. Uh yeah. So, Yan Lun um big meta AI researcher ran fair. Uh was not directly on the llama project but was one of their key researchers. Is that right? and then kind of llama spun out a fair AI research lab and then yeah uh and and sort of like a thought leader in many ways uh steward of the of the strategy uh also sort of a hater on deep learning for a while.
Sort of a hater on on LLM I don't know about deep learning specifically he was kind of he did CNN's right that was his big thing.
So he's kind of he's been kind of maybe right it's kind of too soon to call it on him but uh he's certainly like lost a lot of power within that organization as as Mark Zuckerberg has built out the meta super intelligence lab.
I think his title is still chief AI scientist, but maybe it might be co-led.
Yep. And then of course you have Nat Friedman, Daniel G.
But he's not considered to be on the MSL.
You mean no as in yet? He is not considered.
He's not in MSL. He's in a separate or he's in a separate or right now. Okay. Uh then break down Jurgen Schmid Huber. What's up with him?
53 spots. He's also somewhat controversial um during the Nobel Prize um you know he was saying oh it should have been me instead he he's kind of he's a real OG in the space in deep learning.
You're trying to or the Nobel Prize.
Yeah so it didn't really work but.
So so so maybe that's that's the reason why.
I do remember when uh when chat first launched there was someone in the comments uh dystopia breaker was saying oh this stuff hub did all this years ago. There's nothing new here. Of course, I think that under underrepresents the importance of actually productizing these technologies and these research efforts, but uh still interesting to see that he fell so far. Uh expect.
Let's get into the overall stats. Yeah. So this was actually pretty interesting. Um so we can look at the this is the the number of researchers per lab. Okay.
So we basically see the top three are all you know neck and neck, right? Opening ads at 24, deep mind at 23, anthropic at 22. This is different from from the previous list. Anthropic was I think leading by maybe four researchers.
Um but now it's really neck and neck here. And then you see Thing Machines at 12. Somewhat surprising. They're really I mean they have a lot of goats on their team and then Meta down at eight.
Interesting that Meta doesn't have more on the list given what a spree they've been on. Um but they're probably still just in the early days of actually building out that squad. Yeah. I mean, if you consider they started MSL like what, a few months ago?
Yeah. It takes time to even even when you have the money, it takes time to actually convince people.
I think if we would have made that list back then, they would have had basically zero, right? Maybe they would have had Yan Lun, but he's not even on the list anymore.
Yeah. They didn't have that many. Sure.
And then we can also bring it down.
I mean, I remember those viral posts about people saying like, 'Oh yeah, I worked on Llama 3, not Llama 4, and now I'm at another lab.' Like that was something somebody posted on their LinkedIn viral LinkedIn screenshots. There was a little bit of an exodus and now Zuck's rebuilding the team going into season 2026.
Exactly. Yeah. And then finally we can break it down by country. We see USA of course 51.
Way above everyone else. China at 14.
UK at 13, Canada 12. China would be putting that in the true zone.
On a Yeah. On a uh on a weighted basis though population weighted Canada is doing fantastically. They have onetenth the population of America I believe and uh one one as many AI researchers on the medicine list. So congrats to the Kucks up north.
It's always hard especially with China because a lot of their labs are very secretive. Right. So we have.
So did anyone from uh from Highflyer Deepseek or Alibaba.
We have two I believe two deepseek researchers. Okay.
Uh one is from started like moonshot.
Yep. Moonshot is big now. And then.
I don't know if we have anyone specifically from.
Dance the the the the the guy who created the the gal who created the Tik Tok algorithm. You got to put them on there. That thing is wild.
Yeah. It's always just hard because you know.
Brain rot. You want to build the brain rot machine.
I think especially with we should actually build the brain rot list.
The brain rot list. The researchers who have created the most sticky, you know, user generated content algorith.
User hour maxers. Anyway, what else you got for me? Um, so, so I think one of the big improvements of of this list versus of two weeks ago was that I think it originally we kind of optimized a little bit too much for Twitter cloud.
Or uh Google Scholar citations.
It's hard like I mean the labs are so secretive now they really put out papers.
Of course and if you have someone incredible you have a huge incentive to not let them do press like hey no actually you can't go on to our cash. We definitely got messages from people that were saying, 'Can you can you put can you take my team off the list? Can you take my team off the list?' Like, 'Stop stop talking about us. We we'd prefer if these people didn't get poached, but that's in the comments.'
Yeah. Sutton. I mean, there's a bunch of people that probably like should be on the list.
Rich Sutton, John Carmarmac. Yeah. Both of them at uh Keen. We haven't seen a lot from Keen, but would be very, very interesting.
Yeah. But yeah, we're gonna Big Shout out to Mark Chan. broke the top 10. Welld deserved. Up 19 spots, sitting at number six, just under John Schulman.
To the chat. I have I have unplugged and plugged back in my uh microphone. Hopefully, it sounds better. If not, I can switch to the other microphone, but let me know how it sounds. And we will stop cutting off Tyler Cosgrove, our intern, because the chat is telling us to stop cutting him off. So, uh Tyler, uh who else uh who else fell off the list? How is my boy George Bull doing?
Yeah, George Bull. Uh, Alan Turring.
Both on the list, but but.
Lenes is on the list now.
Okay. Okay, that's good. Um, but what what happened to George Bool? Where where where is he?
People were really hating on him. I mean.
He's off the list entirely.
Yeah, off the list entirely.
I don't know what his what his actual rank is. Obviously, like I have the internal one.
The ghost of Allan Turing is going to haunt you, Tyler.
So, Allan Touring is not on the list.
Kind of fell off. His his test didn't really hold up too much. He got he got mogged by Yeah. JP, but this test.
Tyler Cowan still defending Allen.
Okay. Yeah, the touring test is is is Lindy. Uh any other moves? Did we get any other Easter eggs on this version or are we Easter egg free now?
I think I mean Livveness you could maybe say is an Easter egg.
I think that's go full meme core.
That's the main one. Yeah.
Oh well. Well, thank you for all the hard work on the Metlist. You can check it out at metislist.com.
Fantastic work, Tyler. We will continue to update it. So, if you're angry, if you're happy, shoot Tyler a message.
Uh Tyler also uh produced and uh edited a wonderful uh Vibe video. Uh he did a launch video for this um which uh we're very excited to see him dip his toes in the water of video editing, giving a run for their money. Uh anyway, let's uh let's run through some posts. We have 20 minutes until Alfred Lynn from Sequoia Capital joins us. Let's uh see what else is going on. Um I did want to cover the Nvidia H20 news. Do you want to.
Chinese authorities have urged local companies to avoid using NVIDIA's H20 artificial intelligence chips, particularly for government related purposes, media report said. So they're worried about back doors and they're probably worried about generating revenue for Uncle Sam, their sworn enemy.
Yeah. So there's an interesting dynamic here because the uh the Chinese economy is not monolithic. It is it is like state directed capitalism. It's a mixture. It's with Chinese characteristics of course. So the news is that Donald Trump approved Nvidia's request and AMD is bucketed in in here as well but lower in in importance. uh to export chi uh export H20 GPUs to China. These are the nerfed uh AI chips uh and they're critical for training large language models. And of course, DeepSeek famously optimized their training uh regimen and and algorithms so that they could run on H20s. And so they have figured out a way to train large language models on H20s despite H20s kind of being designed to not let you train or inference large language models as efficiently. But they're still getting it to work and they want them.
So, uh, first off, oddly, uh, the news is that, uh, Nvidia will pay a 15% export tax roughly. It's not technically a tax rev share to the federal government, not to Donald Trump personally, but to the federal government um, for the H20s that they sell. Now, it is unconstitutional to le to levy an export tax on Americanmade goods. Uh this came from the southern states uh I think post civil war where uh the southern states were exporting lots of cotton goods and they were worried that the northern states were going to try and raise federal revenues through export taxes that would disproportionately hit the south. Um but there's another odd wrinkle where the H20 isn't technically made in America. It's uh the chip is made in Taiwan with equipment from the Netherlands. The memories from South Korea. I think Singapore might be involved at some point. It never actually hits American shores. All the packaging happens uh overseas and then it's shipped to China. And so.
Exactly. So Trump still has leverage and he was able to block exports of H20s back in April, which we covered on the show. Uh and now Trump argues that this chip is not a threat. There's this incredible quote where Donald Trump says they're not getting Blackwell. Blackwell's the best chip ever. And.
He goes, 'Maybe maybe they could they'd have to pay more.' He's sort of all over the place, but he's having fun. Um, uh, so, uh, the H20 at this point, I think most people the consensus that it is an older chip. It's nerfed and it won't lead to nuclear weapon level AI technology. Maybe that's the next next chip. But certainly we're sort of in the implementation uh you know um plateau era of you know decent value coming from these AI systems but certainly not anything super intelligence coming out of a a a rack of H20s just yet. Yeah.
So, Beijing is demanding that tech companies including Alibaba and Bite Dance justify their orders of Nvidia's H20 artificial intelligence chips, which uh just further complicates things for Jensen. He's, you know, the the meme of him, you know, smoking a smoking a heater.
No, it's who who's the who's the who's the actor? Uh.
That that there's one of him like taking a drag off a cigarette when he's like engaged in some conspiracy or like unveiling a conspiracy. Ben Affleck.
Oh, Ben Affleck. Yeah, yeah, yeah, yeah. Totally.
Ben, you can somebody Chad GBT Jensen, you know, sitting outside his office making heater. Uh, the tech companies have asked by regulators such as the Ministry of Industry and Information Technology. Let's give it up for that name.
Sounds a little ominous. Anytime you got a ministry, it sounds a little ominous, but uh they're making people explain why they need to order.
Explain. Why not use a domestic alternative?
And so the dynamic here is pretty clear. Beijing wants China to continue broadly like the government wants China to continue continue to move down the learning curve for advanced semiconductors. They want Smick, Smei, W Huawei to develop the indigenous supply chain for semiconductors and do all the hard work. And the only way to actually get the yields up and and really get to the frontier is volume. It's a volume game. So, a Chinese data center operator was went on record to say it's not banned, but has kind of become a politically incorrect thing to do when asked about buying H20s. Yeah.
One issue with doing politically incorrect things in China is you can often be disappeared.
And have your uh wealth taken from you, your your.
I think they got to push back. I think they got to push back. So the dynamic is you know China wants to continue developing supply chain semiconductor their semiconductor supply chain and then on the flip side Chinese companies just want to develop you know the best possible AI models that they can and so they don't want to be GPU poor and uh and so they're they're they're probably there's going to be a little bit of a dance there and some of these will be justified. There still might be some diversion that happens just for political reasons. Uh it's all very complicated, but it will be interesting to see how many uh of those H20 GPUs that uh have been kind of mothballled uh can Nvidia actually sell. And we'll see that in their next earnings report most likely.
And the irony here, everyone, you know, people like the ultra China hawks, the you know, AI war group saying that, you know, criticizing the original.
You know, H20 deal be saying that it would help the Chinese military and just broadly uh undermine US strength and artificial intelligence and now you have uh the Chinese government uh just saying actually we don't even want it. We don't want you buying them. We don't want you using them. Yep.
Well AI war seems to have been averted and war with China is also between China and Taiwan is also at an all-time low on poly markets. 7% chance by the end of this year. Of course, the year is ticking by, so you would expect that to go down. But even by the end of 2026, it's only at a 22% chance. So people.
People have been saber rattling about this for a long time that something's going to happen soon. And uh you know, the at least the poly market doesn't really think that's going to happen. Um anyway, let me tell you about Julius. What analysis do you want to run? Chat with your data and get expert level insights in seconds. You can ask Julius to analyze your data and it's loved by two million plus users and trusted by individuals at Princeton, the Boston Consulting Group and Zapul.
When Rahul first told me.
When I saw the 2 million user number, I was like, is that a you add a few extra zeros there?
It did seem like No, it's real.
It's fantastic. So, there's another interesting um data point that came came out of earnings. So there were two companies that uh that announced earnings recently and are in the business and finance section of the Wall Street Journal today. So uh stable coin firm Circle records loss but revenue source 53% and then separately uh coreweave posts a loss on higher revenue. So both of these companies um one in AI one in crypto beat on topline missed on the bottom line. So they're in different industries, but it feels like they're adopting similar financial strategies, which is invest right now for growth. Uh go go go get the top line higher, become a big company. So uh the numbers are crazy. Circle's share price has quintupled since its June IPO. We interviewed the CEO just after that IPO. I had not been tracking exactly what the share price had done. That's that's incredible performance. Uh revenue is up 53% year-over-year. It's great stuff, but the losses are growing. Um, analysts expected a $338 million loss for Circle. They posted a $482 million loss in the second quarter. Uh, something similar happened with Cororeweave. We also interviewed the founder of Cororeweave on the show. Uh, second quarter revenue tripled since a year earlier. That is incredible performance. Um, but the company lost 290.5 million in the quarter, which is 15% more money lost than the analysts expected. not a huge miss, but certainly something that uh people weren't really uh pricing in fully. And both of those companies have had, I believe, they've had uh profitable quarters. Um but then kind of gone down as they've gone back into the reinvestment mode. And so my read is basically like there's green lights all over the economy. It's green flags everywhere. The market's open, the IPO windows open, the the economic data is really good. So invest, invest, invest. Uh take advantage of the AI race. take take advantage of the the new crypto regulations, anything you can to go take as much market share as possible and get really really big. So, you know, maybe the wave is cresting, but why not get a firm foot v foot v foot v foot v foot v foot v foot v foot v foot v footing on your board while you can.
Anyway, that's my take on uh coreweave and circle. Um anyway, let's move on. I think we I think we hit Google pretty well. We can tell you about profound though that's obviously relevant to the Google conversation. Get your brand mentioned in chat GPT. It's going to be more important than ever going forward, especially as they add agentic commerce features where you can reach millions of consumers who are using AI to discover new products and brands. You can get.
I wanted to highlight a brand uh the founder's name is Isabelle. She said this morning, my brand that's less than 13 months old is launching Whole Foods nationwide without a seven figure raise. How is that even possible? One strong lending partners. We have invoice factoring and PO financing at less than 12% APR making it a clear no-brainer to free up working capital. Two, prioritize strong unit economics 50% plus and by coastal manufacturing and fulfillment to not get crushed on freight. Three, trial and retention. We invest.
Wow manufacturing on both coasts day one. That's a bold move.
And then four, the thing that's interesting, A2 dairy is on trend. So A2 dairy is not quite uh it's not raw which is which is nonpasteurized dairy.
But but I I forget the exact definition of it. Uh but it's.
But it's think of it as a milk uh uh derivative.
Let me pull up the definition. A2 milk is a type of cow's milk that primarily contains the A2 beta casein protein unlike regular milk which contains both A1 and A2 protein. So some people are sensitive to A1 and so they can have A2 dairy.
And we were talking about this earlier today. I haven't been a fan of a lot of um a lot of like ready to drink products, especially in coffee lately because they include.
All these random alternative milks that have a lot of sunflower and canola oil in them. But um anyways, uh super impressive.
You just want a simple You just want a simple RTD with a uh simple RTD protein shake with ingredients that anyone can understand. 300 milligrams of caffeine, 12 milligrams of nicotine.
Pound of creatine, some aderall, just stuff anyone can understand.
Just a pound. It's all we need.
If you're planning your launch of your consumer product, get on linear. Linear is a purpose-built tool for planning and building products. Meet the system for modern software development. Streamline issues, projects, and product road maps. Go to linear.app to get started. Um.
Jovian says, 'I've successfully solved the OpenAI naming problem.' And they say uh they they have a screenshot here. Harder, better, faster, stronger.
Kind of works. It's crazy, but it's just crazy enough to work. I do think it's hilarious that there's like chat GPT GPT5 thinking mode, and that implies that like the normal version just.
doesn't think at all, I guess. I do like that it's that I do like the language here where it's harder. It's not just thinking or not thinking, it's thinking harder, thinking better, faster. And maybe that's where this will collapse because right now even in the GPT5 update, I mean obviously it's such an improvement over the previous one where you had to know that 03 was better than 40, which is deeply deeply confusing. But now I'm seeing fast thinking thinks longer for better answers and pro research grade intelligence auto decides how long to think. That's pretty pretty good. I think they're close. I do think over time we will see no selection at least in the main UI. Maybe buried somewhere, but overall it seems like the mountain.
It is really funny though that people went complaining about the complexity of the naming to the same people complaining about not being able to select their own models.
Yeah. Were those the same people or was it like separate? There's definitely some it's the current thing to hate on the
Josha box says AI psychosis is rampant now.
You might have a version of this totally
I mean yeah I don't know I think there's a big difference between seeing something that is chat GBT generated text and being like somewhat frustrated and annoyed that somebody's just slopping up the timeline
Yeah.
with a bunch of it's not this, it's that. I don't want to see that.
yeah, it has been a fascinating story though. But in general on the show today, there's this excitement. People have this like general excitement to try to identify who they think has been oneshotted. But later today we're having Keith, Dr. Keith Sakata on. He's a doctor at UCSF and he has seen a number of patients this year that have that he's identified as suffering from AI psychosis.
Yeah, it's clearly very real. But at the same time, my takeaway is that it should be solvable pretty quickly with, you know, if you can decide in the model router, do I need to think really hard and actually help someone with this checkout? You should also be able to say, "Okay, this person definitely thinks I'm the boyfriend now." Like, "Yeah, it definitely thinks I'm, you know, God or something or they think they're God." And going from there just makes a ton of sense. Anyway, let me tell you about numeral hq.com. Sales tax on autopilot. Spend less than five minutes per month on sales tax compliance
benchmark series A.
And we have our next guest, Alfred Lynn from Sequoia Capital in
finally the studio. Welcome to
I'm looking forward to this.
How you doing, Alfred? Good to meet you.
Doing great. Thank you for having me on the show.
Great to be here.
Thank you for coming on. We've This is overdue.
Yeah. Would you mind kicking us off with an introduction on all the different pieces of the Sequoia world that you touch currently? Because I know you're there the firm has grown so much. There's a lot that you could be focusing on, but I'd love to ground it in what is current how you're spending your day currently.
Well, Sequoia has been around for 50 years, and we're still very much focused on every on venture capital. So, we have a seed business, a venture business, a growth equity business, an expansion business, and then we have an overlay fund called the score capital fund. And most of my days are still trying to find the pre-seed and series A founders that are daring enough to start a company and want to change the world. So that's where I focus.
What's happening at the earliest possible stage in the Sequoia portfolio? like what how I mean I feel like if you go back 40 50 years you hear these stories about oh yeah Sequoia got 10% of this multi-billion dollar company for $100,000. Obviously the market dynamic has shifted and there's some huge seed rounds happening but you are still funding people with really small checks at a certain stage. Can you explain how that all works?
Yeah, I like to say that my job is to take small dollars and make them into big dollars.
here for you don't need to you don't need to over complicate it.
Yeah, don't over let's not Yeah, let's not complicate things. you're trying to put small amounts of money to work and you're trying to make sure that it becomes
large amounts when the company becomes successful and yes there are large seed rounds but there are also just lots that's going on and it's not just AI there's just a lot of breath AI is enabling a lot of things and AI is not the only thing that we invest in we are all generalists here from consumer to enterprise in robotics and everything you can think of. We're trained as generalists because things move and things change. It's not just one thing after another. It's not like we only invested in the internet when the internet was happening and only invested in mobile and only invested in SAS when those things were happening. And the same is true now. There's a lot going on. And
you know the founders that I really enjoy meeting are two people on an idea and they want to they feel like the world has gotten something wrong in the world and they want to go fix it and they want to their legacy will be changing the world and how we live just like some of the people I've been fortunate to partner with and we use that term very very judiciously at Sequoia. We want to partner with the daring founders who want to start the company. We don't think of ourselves as investors. We don't try to buy low and sell high. we really want to work with a small select set of founders that want to go all the way and you know the thing that I've learned over time is you can take two founders in a seed of an idea and in a decade that company could be worth one to $10 billion and in two decades that could be 10 to 100 billion and in three decades that can be a 100 billion to a trillion and we've seen a number of companies that have reached that including Nvidia, including Apple, including Google. And we're going to try to help the next set of founders do those things.
Going back to something you said earlier, you said you're not just investing in AI, but what is a company look like today? What is a non-AI company that look like today that's coming to you to pitch you at the sort of idea stage? Because in some way in some ways you have to think that if a founder wants to just not think about AI and they're starting a company from the ground up today. It seems like you know I'm sure there's some outliers but seems like a question that you know if you have the blessing and the opportunity to start a company in the year 2025 there's probably some way that AI could be transformative to your business or the market broadly.
Yeah, don't get me wrong. I think all the companies that we work with are using AI and AI tools. That doesn't mean that they're an AI native. And you guys were just talking about the AI researchers and the medicine list. And there's some companies that aren't going to be AI native. They're not going to build a foundation model. They're not going to build a world model. They're going to be building an application. And in some sense in probably two or three or four years, we're going to call those back to software companies. Those are just new updated ways of building software companies and we do believe in a lot of value will be created in the application layer and new applications will be created in this world. And I think there's a desire to associate all those companies as AI companies just like you know when the web was happening everybody wanted to be called a web company but at the end of the day you're still you may be a consumer company you may be a gaming company you can be a commerce company you might be using the internet as distribution and here you might be using AI as a way to improve the way you get things done But you're not a native AI company.
Yeah. So your definition of an AI native company is effectively like you have to be hiring researchers and I am I hearing that correctly? Because I think some people describe themselves as AI native because they're just they feel like they're using the tools to the
it also just feels like the difference between like AI native company where it really matters is just like what will the financial profile look like when I think of AI native foundation model company I think R&D I think capex maybe they're not building a big data center but they're at least spending a lot of money on training versus an application layer company, it's going to be much more about the how much does it cost you to generate those tokens even if they're on a different foundation model and then how much value are you delivering and how much revenue are you generating from your customers. Is that a reasonable framework?
That's a reasonable framework in the sense that I think there are a lot of companies that are using AI and AI tools to be able to increase productivity
and but they're building an application they're building a service they're building something that is different than a native AI company. So
how is your thinking, you know, it feels like this debate has faded a little bit into the background, but over the last five years, how did your thinking evolve on kind of value accrual between the model layer or the labs and the sort of application layer? Because in our view, you know, we had a number of folks on from OpenAI last Thursday for the GPT5 launch and it felt like, okay, this is a consumer tech company like it really felt like and they're selling at least today subscriptions to their consumer tech product and that is and the product is the product. The models were in many ways with the introduction of the router taking a little bit more of a backseat.
So I think the where value accrues is a very hard question to answer. At the beginning we have a particular point of view and in throughout history I think you would see that value accrual shifts as the sort of development changes like in the early days you need the infrastructure to be built and so a lot of value accrues to the infrastructure layer. That's kind of the reason why all the way down to the bottom of the infrastructure layer, Nvidia is a $4 trillion company today. Value is accruing there because everybody needs that chip. Over time, then you have people building on those chips and then value starts accruing to the model layer because you got to build the model for other people to build on top of it. And over time hopefully you build the infrastructure, the systems, the operating system and then the application and then the application historically has been where a lot of value accrues in previous generations of the internet and it's too early to call that that's where a lot of value will accrue in the future but if you just look at history that has been the case.
Can you talk about Sequoia Arc and then specifically some of the trends you're seeing in those very early stage companies, how they're building businesses, how the financials change because even though I'm sure some of these companies could go out and raise huge rounds and train foundation models like where is the money going at the early stage for kind of startups that are joining the program?
So, ARC is a program that we started in 2022. It's a program that we started because we wanted to help our own founders have a common language and basically leverage the 50 years of learning that Sequoia has had in company building.
One of the things that we've noticed over time through many different technology waves is the fundamentals of company building don't really change. You might have to hire slightly different engineers or slightly different salespeople etc etc but the fundamentals don't really change. The history of technology lowering the cost of creating a company hasn't really changed. The sort of ability to sort of get above the noise because there are a lot more companies being produced. That hasn't really changed. So yes, you know, the trend is we're going to probably have fewer people in a company. That has been the case for a long period of time in technology. Is it harder than ever before to get above the noise because you know it costs less to start a company? Yes, that's been the trend. And the things that we sort of try to focus on is what is stable over time and the company building aspects. And what we try to do in that program is in a short number of weeks teach everything that we can to sort of get a company off the ground especially from the zero to one phase of the company that you can then take with you to build from one to end. And that's the company building program that I think we're trying to aspire to make sure that we teach in that program.
What is a graduation day or demo day look like? Is it just pitching the Sequoia partnership or are you setting up is it actually is there some competition and other firms are trying to come in? It feels like one of the elegant things of demo day is that for at least for Y Combinator is that they don't they sometimes occasionally will feed off of their best companies but oftentimes other firms can come in and snipe some company that's overlooked or something. how do you think about companies graduating from ARC?
So the program is a company building program so that at the end of the program yes they pitch the whole partnership as well as builders in our community so that we can give them feedback on their next stage of company building. It is not a fundraising demo day and so that's not the objective. The objective is to continue to build the company.
When you talk about you talked about getting above the noise, it's obviously one of the biggest challenges that any company faces. Do you have portfolio companies today where you're general that have products that are working and getting real customer traction where you advise them to actually just be quiet and try to dominate their sub market as much as possible because
go viral amongst a bunch of people that want to build things compete with you?
